Exhibit 10.1
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ACQUISITION AGREEMENT AND PLAN OF MERGER
dated as of August 25, 2006
by and among
GARDANT PHARMACEUTICALS, INC.
SWITCH PHARMA LIMITED
and
GARDANT PHARMACEUTICALS ACQUISITION CORPORATION
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TABLE OF CONTENTS
Page
1. DEFINITIONS ...................................................................................... 2
2. THE MERGER ....................................................................................... 4
2.1 The Merger .............................................................................. 4
2.2 Effective Time; Closing ................................................................. 4
2.3 Effect of the Merger .................................................................... 4
2.4 Certificate of Incorporation; By-laws ................................................... 4
2.5 Directors and Officers .................................................................. 4
2.6 Conversion of Securities ................................................................ 5
2.7 Employee Stock Options, Company Warrants, Company Preferred Stock and Other Securities .. 5
2.8 Exchange of Certificates ................................................................ 6
2.9 Appraisal Rights ........................................................................ 7
2.10 Stock Transfer Books .................................................................... 8
2.11 Shares Not Registered; Transfer Restrictions ............................................ 8
3. CERTAIN MATTERS PERTAINING TO EPRESENTATIONS AND WARRANTIES OF COMPANY ........................... 8
3.1 Warranties by Company ................................................................... 8
3.2 Limitation on Liability ................................................................. 8
3.3 Each Warranty Separate .................................................................. 8
3.4 No Responsibility for Certain Changes ................................................... 8
3.5 No Other Representations or Warranties .................................................. 8
4. REPRESENTATIONS OF PURCHASER ..................................................................... 8
4.1 Authorization of Merger Shares .......................................................... 8
4.2 Corporate Existence and Power; Enforceability; No Conflict .............................. 8
4.3 Issuance of Merger Shares ............................................................... 9
4.4 Consents and Approvals .................................................................. 9
5. COVENANTS PRIOR TO CLOSING ....................................................................... 9
5.1 Access and Cooperation; Due Diligence ................................................... 9
5.2 Conduct of Business Pending Closing ..................................................... 10
5.3 Prohibited Activities ................................................................... 10
5.4 Newco ................................................................................... 11
5.5 Further Assurances ...................................................................... 12
5.6 Listing of Common Stock of Purchaser for Trading ........................................ 12
6. CONDITIONS PRECEDENT TO OBLIGATIONS OF COMPANY ................................................... 12
6.1 Representations and Warranties; Performance of Obligations .............................. 12
6.2 No Litigation ........................................................................... 12
6.3 Consents and Approvals .................................................................. 12
6.4 Secretary's Certificate ................................................................. 12
6.5 Other Closing Conditions ................................................................ 12
6.6 Shareholder Consent ..................................................................... 12
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7. CONDITIONS PRECEDENT TO OBLIGATIONS OF PURCHASER AND NEWCO ....................................... 13
7.1 Representations and Warranties; Performance of Obligations .............................. 13
7.2 No Litigation ........................................................................... 13
7.3 Consents and Approvals .................................................................. 13
7.4 No Material Adverse Effect .............................................................. 13
7.5 Secretary's Certificate ................................................................. 14
7.6 Other Closing Conditions ................................................................ 14
7.7 Shareholder Consent ..................................................................... 14
7.8 Exemption from Registration ............................................................. 14
8. SURVIVAL OF REPRESENTATIONS AND WARRANTIES ....................................................... 14
8.1 Survival of Representations and Warranties ................................................... 14
9. TERMINATION OF AGREEMENT ......................................................................... 14
9.1 Termination ............................................................................. 14
9.2 Liabilities in Event of Termination ..................................................... 15
10. COVENANTS POST-CLOSING ........................................................................... 15
10.1 Payment of Taxes ........................................................................ 15
10.2 Cooperation on Tax Matters .............................................................. 15
11. GENERAL 15
11.1 Cooperation ............................................................................. 15
11.2 Successors and Assigns .................................................................. 16
11.3 Entire Agreement ........................................................................ 16
11.4 Counterparts ............................................................................ 16
11.5 Brokers and Agents ...................................................................... 16
11.6 Expenses ................................................................................ 16
11.7 Notices ................................................................................. 16
11.8 Governing Law ........................................................................... 16
11.9 Jurisdiction and Venue .................................................................. 16
11.10 Survival of Representations and Warranties .............................................. 17
11.11 Exercise of Rights and Remedies ......................................................... 17
11.12 Time .................................................................................... 17
11.13 Reformation and Severability ............................................................ 17
11.14 Remedies Cumulative ..................................................................... 17
11.15 Captions ................................................................................ 17
11.16 Representation by Counsel ............................................................... 18
11.17 Amendments; Waivers ..................................................................... 18
11.18 Public Announcements .................................................................... 18
11.19 Transfer Restrictions; Compliance with Securities Laws .................................. 18
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ACQUISITION AGREEMENT AND PLAN OF MERGER
THIS ACQUISITION AGREEMENT AND PLAN OF MERGER (the "Agreement") is made as
of August 25 2006 by and among Gardant Pharmaceuticals, Inc., a corporation
incorporated under the laws of the State of Nevada with offices at Savannah
House, 00-00 Xxxxxxx XX Xxxxxx, Xxxxxx, Xxxxxxx XX0X 0XX ("Company" or
"Surviving Corporation"), Switch Pharma Limited, a corporation incorporated
under the laws of England & Wales whose registered office is at Kent Science
Park, Wood Xxxxx Xxxxx, Xxxxx Xxxx, Xxxxxxxxxxxxx, Xxxx, XX0 0XX ("Purchaser" or
"SPL"), and Gardant Pharmaceuticals Acquisition Corporation, a corporation
to-be-formed under the laws of the State of Nevada and which shall be a
wholly-owned subsidiary of Purchaser ("Newco" or "Merger Sub").
RECITALS
WHEREAS, Newco is a corporation-to-be-formed under the laws of the State
of Nevada for the purpose of being merged with and into Company (the "Merger"),
with Company being the Surviving Corporation in the Merger;
WHEREAS, Newco, upon formation and at the time of the Merger, shall be a
wholly-owned subsidiary of Purchaser;
WHEREAS, the parties hereto desire for Newco to merge with and into the
Company, with the Company being the Surviving Corporation in the Merger, in
accordance with the Nevada Revised Statutes, as amended ("NRS");
WHEREAS, the Board of Directors of the Company has (i) determined that the
Merger is fair to the holders of shares of the Company ("Shares") and is in the
best interests of such stockholders and (ii) approved this Agreement and all of
the transactions contemplated hereby (the "Company Board Approval") and
unanimously has recommended that the stockholders of the Company adopt this
Agreement and approve the Merger, and such approval and recommendation have not
been amended or rescinded;
WHEREAS, the Board of Directors of Purchaser has approved and adopted this
Agreement and the transactions contemplated hereby and such approval (the
"Purchaser Board Approval") has not been amended or rescinded;
WHEREAS, actions by written consent of shareholders of the Company owning
outstanding Shares carrying the right to cast a majority of the votes which may
be cast by all shares of each class of the Company's outstanding securities in
any election of directors are binding as the vote of shareholders of the
Company; and
WHEREAS, shareholders of the Company owning outstanding shares of the
Company carrying the right to cast a majority of the votes which may be cast by
all shares of each class of the Company's outstanding securities in any election
of directors have agreed by written consent (the "Company Shareholders Written
Consent") to approve this Acquisition Agreement and the Merger and such consent
has not been amended or rescinded;
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements, representations, warranties, provisions and covenants herein
contained, the parties hereto hereby agree as follows:
1. DEFINITIONS
Unless the context otherwise requires, capitalized terms used in this
Agreement or in any schedule attached hereto and not otherwise defined shall
have the following meanings for all purposes of this Agreement:
"Affiliate" means, with respect to any Person, any Person that directly,
or indirectly through one or more intermediaries, controls, is controlled by, or
is under common control with, such Person.
"Business Day" means any day other than a Saturday or a Sunday) on which
commercial banks are open for banking operations in both New York, New York and
London, England.
"CA" means the Companies Xxx 0000.
"Companies Acts" means the CA, the former Companies Acts (within the
meaning of CAs 735 (1) and the Companies Xxx 0000.
"Company" means Gardant Pharmaceuticals, Inc, a Nevada Corporation.
"Disclosure Documents" the bundle of documents initialled on behalf of the
Company and the Purchaser for the purposes of identification and delivered with
the letter referred to in the definition of "Disclosure Letter".
"Disclosure Letter" means the letter of even date herewith from the
Company to the Purchaser specifying exceptions to the Warranties and the
Disclosure Documents.
"Encumbrance" means any (other than by virtue of this Agreement) interest
or equity of any person (including any right to acquire, option or right of
pre-emption) or any mortgage, charge, pledge, lien, assignment, hypothecation,
security interest, title retention or any other security agreement or
arrangement.
"GAAP" means generally accepted accounting principles as used in the
applicable national jurisdiction, applied on a consistent basis.
"ICTA" means the Income and Corporation Taxes Xxx 0000.
"Intellectual Property" means any patent, patent application, know-how,
trade xxxx, trade xxxx application, trade name, registered design, copyright or
other similar industrial or commercial right.
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"Knowledge" means the actual knowledge of the officers of the applicable
party.
"Laws" shall mean all laws, common laws, rules, regulations, ordinances,
codes, judgments, injunctions, orders, decrees, permits, policies and other
requirements of the United States and other jurisdictions to which any party to
this Agreement, as applicable, or its respective properties, assets or
businesses, are subject.
"Liability" or "Liabilities" means liabilities or obligations of any kind,
character or description, whether accrued, absolute, secured or unsecured,
contingent or otherwise, unless otherwise specified.
"Material Adverse Effect" means, with respect to any Person, a material
adverse effect on the business, operations, properties, assets, condition
(financial or otherwise) or results of operations of such Person, taken as a
whole.
"Merger Consideration" means 81,914,283 shares in the Purchaser.
"Permitted Encumbrances" means (i) any lien for Taxes not yet due or
delinquent or Taxes being contested in good faith by appropriate proceedings and
properly reserved for in accordance with GAAP, (ii) any statutory lien arising
in the ordinary course of business by operation of law with respect to an
obligation or liability that is not yet due or delinquent, and (iii) any minor
imperfection of title or similar lien or encumbrance which individually or in
the aggregate with other imperfections of title, liens or encumbrances could not
reasonably be expected to have a Material Adverse Effect on the applicable
Person.
"Person" means an individual or a corporation, limited partnership,
general partnership, limited liability company, trust, unincorporated
association, joint venture, association or government or any agency,
instrumentality or political subdivision thereof, or any other entity.
"Record" means information that is inscribed on a tangible medium or that
is stored in an electronic or other medium and is retrievable in perceivable
form.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder by the United States Securities and
Exchange Commission (the "SEC").
"Shares" means the entire issued share capital in the Company as set out
in Schedule 1;
"Subsidiary" means, as to any Person, any Person other than an individual,
50% or more of the shares of voting stock (or in the case of such a Person which
is not a corporation, 50% or more of the equity interests that provide the power
to manage, elect the management or direct the management of such Person) of
which is at the time any determination is being made, owned or controlled,
directly or indirectly, by such Person and its wholly owned Subsidiaries.
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2. THE MERGER
2.1 The MergerIn accordance with the NRS and subject to and upon the terms
and conditions of this Agreement, at the Effective Time (as hereinafter
defined), Newco shall be merged with and into the Company. As a result of the
Merger, the separate corporate existence of Newco shall cease and the Company
shall continue as the surviving corporation of the Merger (the "Surviving
Corporation").
2.2 Effective Time; ClosingOn the Closing Date (as defined below), the
parties hereto shall cause the Merger to be consummated by filing a certificate
of merger (the "Certificate of Merger") with the Secretary of State of the State
of Nevada, in such form as is required by, and executed in accordance with, the
relevant provisions of the NRS (the date and time of such filing being the
"Effective Time").
(a) The consummation of the transactions contemplated by this
Agreement (the "Closing") shall take place on September 29, 2006, or as promptly
thereafter as the conditions to the Closing have been satisfied or waived by the
appropriate Person or Persons not later than October 31, 2006 or such other date
as may be mutually agreed by the parties to this Agreement (the "Closing Date"),
at such office as Purchaser shall designate.
2.3 Effect of the MergerAt the Effective Time, the effect of the Merger
shall be as provided in this Agreement, the Certificate of Merger and the
applicable provisions of the NRS. Without limiting the generality of the
foregoing, and subject thereto, at the Effective Time, all the property, rights,
privileges, powers and franchises of Company and Newco shall vest in the
Surviving Corporation, and all debts, liabilities, obligations, restrictions,
disabilities and duties of Company and Newco shall become the debts,
liabilities, obligations, restrictions, disabilities and duties of the Surviving
Corporation.
2.4 Certificate of Incorporation; By-laws
(a) At the Effective Time, the certificate of incorporation of
Company, as in effect immediately prior to the Effective Time, shall be the
certificate of incorporation of the Surviving Corporation until thereafter
amended as provided by the NRS and such certificate of incorporation.
(b) At the Effective Time, the by-laws of Company, as in effect
immediately prior to the Effective Time, shall be the by-laws of the Surviving
Corporation until thereafter amended as provided by the NRS, the certificate of
incorporation of the Surviving Corporation and such by-laws.
2.5 Directors and Officers(a) The directors of Company immediately prior
to the Effective Time shall be the initial directors of the Surviving
Corporation, each to hold office in accordance with the certificate of
incorporation and by-laws of the Surviving Corporation, and the officers of
Company immediately prior to the Effective Time shall be the initial officers of
the Surviving Corporation, in each case until their respective successors are
duly elected or appointed and qualified or until their earlier death,
resignation or dismissal.
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2.6 Conversion of SecuritiesAt the Effective Time, by virtue of the Merger
and without any action on the part of Purchaser, Newco, Company or the holders
of any of their respective securities:
(a) Subject to Section 2.9, each share of Company's common stock
(the "Company Common Stock" or the "Shares"), issued and outstanding at the
Effective Time (other than shares canceled pursuant to Section 2.6(b), if any),
shall be exchanged and converted automatically into the right to receive the
number of whole shares of Purchaser's common shares, (the "Purchaser Common
Stock") which is the quotient obtained by dividing the number 81,914,283 by the
sum of all Shares issued and outstanding at the Effective Time, all such shares
of Purchaser Common Stock being the "Merger Consideration," and each share of
Purchaser Common Stock constituting a part of the Merger Consideration being
sometimes hereinafter referred to as a "Merger Share."
(i) Notwithstanding the foregoing, the number 81,914,283 in
the calculation above was established on the assumption that shares of Purchaser
Common Stock shall be trading for at least $1.03 per share at the first day of
trading of Purchaser Common Stock on a London market on or after the Closing
Date. If and to the extent that shares of Purchaser Common Stock do not trade
for at least $1.03 per share on the first day on which such shares trade on a
London market on or after the Closing Date, the number 81,914,283 shall be
adjusted upwards by the same percentage as the shortfall from $1.03 per share
represents as a percentage of $1.03. In such event, any such additional shares
shall be delivered as soon as practical after the Closing in a fashion
consistent with this Agreement as additional adjusted Merger Consideration and
shall be deemed to be part of the Merger Consideration.
(b) Each share of capital stock held in the treasury of Company and
each share of capital stock of Company, if any, otherwise owned by any
Subsidiary of Company immediately prior to the Effective Time, by virtue of the
Merger and without any action on the part of the holder thereof, shall be
canceled without any conversion thereof and no payment or distribution shall be
made with respect thereto; and
(c) Each share of common stock of Newco issued and outstanding
immediately prior to the Effective Time shall, by virtue of the Merger and
without any action on the part of the holder thereof, be converted into and
exchanged for one validly issued, fully paid and nonassessable share of common
stock of the Surviving Corporation.
2.7 Employee Stock Options, Company Warrants, Company Preferred Stock and
Other Securities
(a) At the Effective Time, each outstanding option to purchase
Shares under any Company stock option, stock purchase, restricted stock, phantom
stock or similar plan (the "Company Stock Option Plans") not exercised prior to
the Closing Date will terminate. Prior to the Closing Date, Company shall take
any corporate action necessary to effectuate the foregoing and Company shall
give any required notice to participants in the Company Stock Option Plans of
the cancellation of the plan, and that each participant shall have the right to
exercise his or her outstanding option(s) under the plan in full prior to the
Closing Date.
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(b) On or prior to the Effective Time, Company shall take all action
that may be necessary (under the plans pursuant to which any Company options or
similar instruments or rights are outstanding and otherwise) to effectuate the
provisions of this Section 2.7 and to ensure that, from and after the Effective
Time, holders of such securities shall have no rights in connection with the
Merger with respect thereto other than those specifically provided in this
Section 2.7.
(c) At the Effective Time, each outstanding option to purchase
Shares under any warrant to purchase Company securities (the "Company
Warrants"), if any, that is not exercised on or prior to the Closing Date, will
terminate. Prior to the Closing Date, Company shall take any corporate action
necessary to effectuate the foregoing and Company shall give any required notice
to holders of Company Warrants of the cancellation of such Company Warrants, and
each holder shall have the right to exercise his or her Company Warrant in full
prior to the Closing Date.
(d) On or prior to the Effective Time, Company shall take any and
all corporate action necessary to cause each outstanding share of Company
preferred stock, if any, and any other security, right or other instrument or
agreement to acquire, directly or indirectly, any security of Company, whether
by acquisition, exchange, exercise, conversion or otherwise, which has not
converted into shares of the Company Common Stock on or prior to the Closing
Date, to terminate or otherwise cease to be outstanding, without any monetary or
other claim against Company or its assets or Purchaser or Newco, as of the
Closing Date, and all such securities shall be cancelled and shall cease to be
outstanding as of the Effective Time.
2.8 Exchange of Certificates
(a) Exchange Procedures. As promptly as practicable after the
Effective Time, Purchaser shall mail to each holder of a certificate or
certificates which immediately prior to the Effective Time represented
outstanding Shares (the "Certificates") (i) a letter of transmittal (which shall
specify that delivery shall be effected, and risk of loss and title to the
Certificates shall pass, only upon proper delivery of the Certificates to
Purchaser, and shall be in customary form) and (ii) instructions for use in
effecting the surrender of the Certificates in exchange for the right to receive
the Merger Consideration. Upon surrender to Purchaser of a Certificate for
cancellation, together with such letter of transmittal, duly executed, and such
other documents as may be reasonably required pursuant to such instructions
under applicable securities laws, the holder of such Certificate shall be
entitled to receive in exchange therefor the whole shares of the Merger
Consideration, in accordance with Section 2.6, which such holder has the right
to receive in respect of the Shares formerly represented by such Certificate
(after taking into account all Shares then held by such holder), but no
fractional shares shall be issued and no cash or other consideration shall be
issued or delivered in respect of any such fractional share interests, and the
Certificate so surrendered shall forthwith be cancelled. In the event of a
transfer of ownership of Shares that is not registered in the transfer records
of Company, the Merger Consideration such holder has the right to receive in
respect of the Shares may be issued/distributed to a transferee if the
Certificate representing such Shares is presented to Purchaser, accompanied by
all documents required to evidence and effect such transfer and by evidence that
any applicable stock transfer taxes have been paid. Until surrendered as
contemplated by this Section 2.8, each Certificate shall be deemed at any time
after the Effective Time to represent only the right to receive upon such
surrender the Merger Consideration which such holder has the right to receive in
respect of the Shares formerly represented by such Certificate.
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(b) Distributions with Respect to Unexchanged Shares of Purchaser
Securities. No dividends or other distributions declared or made after the
Effective Time with respect to Merger Shares with a record date after the
Effective Time shall be paid to the holder of any unsurrendered Certificate with
respect to Merger Shares represented thereby until the holder of such
Certificate shall surrender such Certificate. Subject to the effect of escheat,
tax or other applicable laws, following surrender of any such Certificate, there
shall be paid to the holder of the certificates representing whole shares of
Merger Shares issued in exchange therefor, without interest, (i) promptly, the
amount of dividends or other distributions with a record date after the
Effective Time, if any, and theretofor paid with respect to such whole shares of
Merger Shares, and (ii) at the appropriate payment date, the amount of dividends
or other distributions, with a record date after the Effective Time, if any, but
prior to surrender and a payment date occurring after surrender, payable with
respect to such whole shares of Merger Shares.
(c) No Further Rights in Company Common Stock. All shares of Merger
Shares issued upon conversion of the Shares shall be deemed to have been issued
in full satisfaction of all rights pertaining to such Shares.
(d) No Fractional Shares. No certificates or scrip representing
fractional shares of Merger Shares shall be issued upon the surrender for
exchange of Certificates, and such fractional share interests will not entitle
the owner thereof to vote or to any other rights of a stockholder of Purchaser.
No cash or other consideration shall be paid for any fractional share issuance
to which such holder would otherwise be entitled.
(e) No Liability. Neither Purchaser nor the Company shall be liable
to any holder of Shares for any such Shares (or dividends or distributions with
respect hereto), or cash delivered to a public official pursuant to any
abandoned property, escheat or similar Law.
(f) Withholding Rights. Each of Surviving Corporation and Purchaser
shall be entitled to deduct and withhold from the consideration otherwise
payable pursuant to this Agreement to any holder of Shares such amounts as it is
required to deduct and withhold with respect to the making of such payment under
any provision of state, local or foreign tax law. To the extent that amounts are
so withheld by the Surviving Corporation or Purchaser, as the case may be, such
withheld amounts shall be treated for all purposes of this Agreement as having
been paid to the holder of the Shares in respect of which such deduction and
withholding was made by the Surviving Corporation or Purchaser, as the case may
be.
2.9 Appraisal RightsTo the extent, if any, that holders of Shares are
entitled to exercise appraisal rights pursuant to the applicable provisions of
the NRS and do exercise such appraisal rights, the Shares of such holder shall
not be converted into the right to receive the Merger Consideration, but the
applicable amount of Merger Consideration shall be held by Purchaser subject to
the provisions of the NRS. If any such holder fails to protect or withdraws or
loses its appraisal rights, such Shares shall then be treated as if they had
been converted as of the Effective Time into a right to receive the Merger
Consideration.
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2.10 Stock Transfer BooksAt the Effective Time, the stock transfer books
of Company shall be closed and there shall be no further registration of
transfers of Shares thereafter on the records of Company. From and after the
Effective Time, the holders of Certificates shall cease to have any rights with
respect to such Shares except as otherwise provided herein or by any laws. On or
after the Effective Time, any Certificates presented to Purchaser for any reason
shall be converted into shares of Merger Shares and any dividends or other
distributions to which the holders thereof are entitled pursuant to Section
2.08.
2.11 Shares Not Registered; Transfer RestrictionsThe shares of Purchaser
Common Stock issued as Merger Consideration have not been registered and are
subject to restrictions described in Section 11.19 of this Agreement.
3. CERTAIN MATTERS PERTAINING TO EPRESENTATIONS AND WARRANTIES OF COMPANY
3.1 Warranties by CompanyThe Company warrants to the Purchaser that the
Warranties set out in Schedule 1 and Schedule 2 are true and accurate in all
material respects.
3.2 Limitation on LiabilityThe Company shall have no liability to the
extent that the circumstances, facts or events giving rise to any claim are set
out or referred to in or annexed to this Agreement, or the Accounts. The Company
shall have no liability to the extent that allowance, provision or reserve was
made in the Accounts in respect of the matters to which such liability relates
or such matter was taken into account in computing the amount of any such
allowance, provision or reserve or such matter was specifically referred to in
the notes to the Accounts.
3.3 Each Warranty SeparateEach of the Warranties is without prejudice to
any other Warranty.
3.4 No Responsibility for Certain ChangesThe Company shall be under no
liability in respect of any matters resulting from a change in accounting or in
Taxation policy or practice of the Purchaser including the method of submission
of Taxation returns introduced, or the making of any claim, election, surrender,
disclaimer notice or consent, since or having effect after Closing.
3.5 No Other Representations or WarrantiesThe Purchaser acknowledges that
it is entering into this Agreement in reliance on no warranty, representation or
undertaking save as specifically set out in this Agreement or in Schedule 1 or
Schedule 2 hereto.
4. REPRESENTATIONS OF PURCHASERThe Purchaser warrants to the Company that:
4.1 Authorization of Merger SharesPrior to the Closing and the issue of
the Merger Shares, the Purchaser will have authorized the issue of the Merger
Shares.
4.2 Corporate Existence and Power; Enforceability; No ConflictThe
Purchaser is an corporation duly organized and validly existing and in good
standing under the laws of the United Kingdom and has power and authority and
all material licenses and permits necessary to carry on its business and to own
its assets. The Purchaser has all requisite legal and corporate power, and has
taken all requisite corporate action to execute and deliver this Agreement and
to carry out and perform all of its obligations under this Agreement and will by
the relevant issue date have taken all requisite corporate action necessary to
issue the Merger Shares to be issued on such issue date in accordance with this
Agreement. This Agreement constitutes the legal, valid and binding obligations
of the Purchaser, enforceable in accordance with its terms, except (i) as may be
limited by applicable bankruptcy, insolvency or similar laws relating to or
affecting the enforcement of creditors' rights generally and (ii) as limited by
equitable principles generally. The execution and delivery of this Agreement
does not, and the performance of this Agreement and the compliance with the
provisions hereof, and the issue of the Merger Shares by the Purchaser will not
conflict with, or result in a breach or violation of the terms, conditions or
provisions of, or constitute a default under, or result in the creation or
imposition of any lien pursuant to the terms of, the Certificate Incorporation
or Bylaws of the Purchaser or any indenture, mortgage, lease or other material
agreement or instrument of the Purchaser or so far as it is aware but without
prejudice to any other provision of this Agreement any statute, law, rule or
regulation or any state or federal order, judgment or decree.
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4.3 Issuance of Merger SharesThe Merger Shares when issued in compliance
with the provisions of this Agreement will be validly issued, fully paid and
nonassessable. The issue and delivery of the Merger Shares is not subject to
pre-emptive or any other similar rights of the stockholders of the Purchaser or
any liens of encumbrances.
4.4 Consents and ApprovalsNo consent, approval, order or authorization of,
or registration, qualification, designation, declaration or filing with any
local or governmental authority inside or outside the United Kingdom on the part
of the Purchaser is required in connection with the consummation of the
transactions contemplated by this Agreement.
5. COVENANTS PRIOR TO CLOSING
5.1 Access and Cooperation; Due Diligence(a) Company and its Subsidiaries
will afford to the officers, directors, employees, consultants, representatives,
advisors and agents of Purchaser and Newco reasonable access to all of their
respective sites, properties, books and records, subject to mutually acceptable
confidentiality agreements, during the applicable company's customary business
hours upon reasonable notice and without undue disruption of the applicable
company's business and will deliver or make available to Purchaser and Newco
such financial and operating data and other information and documents as to the
business, operations, properties, assets, condition (financial or otherwise),
results of operations and prospects of Company and its Subsidiaries as Purchaser
or Newco may from time to time reasonably request. Company and its Subsidiaries
will cooperate with Purchaser and Newco and their officers, directors,
employees, consultants, representatives, advisors and agents in the preparation
of any documents or other materials which may be required in connection with any
documents or materials required or contemplated by this Agreement.
(b) Purchaser and Newco will deliver or make available to Company
such information and documents as to the subject matter of Purchaser's and
Newco's representations and warranties as Company may from time to time
reasonably request. Purchaser and Newco will cooperate with Company and its
officers, directors, employees, consultants, representatives, advisors and
agents in the preparation of any documents or other materials which may be
required in connection with any documents or materials required by this
Agreement.
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(c) Purchaser and Newco, on the one hand, and Company and its
Subsidiaries, on the other hand, will treat all information obtained in
connection with the negotiation and performance of this Agreement and the due
diligence investigations conducted with respect thereto as confidential. No
information or knowledge obtained in any investigation pursuant to this Section
or otherwise shall affect or be deemed to modify any representation or warranty
contained in this Agreement or the conditions to the obligations of the parties
to consummate the transactions contemplated hereby.
5.2 Conduct of Business Pending ClosingFrom the date hereof through and
including the earlier of (x) the Closing Date and (y) the date, if any, upon
which this Agreement is terminated in accordance with Article 9 hereof, Company
and its Subsidiaries will take all reasonable actions to do the following except
as expressly set forth in this Agreement or as heretofore disclosed to Purchaser
or otherwise agreed by Purchaser in writing:
(a) carry on their respective businesses in the same manner as they
have done prior to the date hereof and not introduce any material new method of
management, operation or accounting;
(b) maintain their respective properties and facilities, including
those held under leases, in good working order and condition, ordinary wear and
tear excepted;
(c) perform in all material respects all of their respective
obligations under agreements relating to or affecting its assets, properties,
business or other rights;
(d) keep in full force and effect present insurance policies or
other comparable insurance coverage;
(e) use their respective best efforts to maintain and preserve their
respective corporate existences and maintain their respective relationships with
suppliers, customers and others having business relations with them;
(f) use their respective best efforts to maintain compliance with
all licenses and Laws applicable to each of them and their respective
businesses, properties or assets; and
(g) maintain present debt and lease instruments and not enter into
new or amended debt or lease instruments without the knowledge and written
consent of Purchaser.
5.3 Prohibited ActivitiesFrom the date hereof through and including the
earlier of (x) the Closing Date and (y) the date, if any, on which this
Agreement is terminated in accordance with Article 9 hereof, Company and its
Subsidiaries will not do any of the following without the prior written consent
of Purchaser except as expressly set forth in this Agreement or as heretofore
publicly disclosed by Company:
(a) make any change in the Company Charter Documents;
(b) issue any options, warrants, calls, rights, subscriptions,
claims of any character, agreements, obligations, convertible or exchangeable
securities, or other commitments (contingent or otherwise) of any kind relating
to its securities;
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(c) declare or pay any dividend, or declare or make any distribution
in respect of its capital stock, or any direct or indirect redemption or
purchase, or other acquisition for value, of any shares of its capital stock;
(d) make any changes in the compensation payable or to become
payable to any of its officers, directors, shareholders, employees, Affiliates,
consultants or agents or to any other persons providing services;
(e) make any loans to any of its officers, directors, shareholders,
employees, Affiliates, consultants, representatives, advisors or agents or made
any change in its existing borrowing or lending arrangements for or on behalf of
any such Persons, whether pursuant to any employee benefit plan or otherwise;
(f) grant, issue, accelerate, pay, accrue or agree to pay or make
any accrual or arrangement for payment of salary, bonus or other payments or
benefits pursuant to, or adopt or amend, any new or existing plan;
(g) enter into any contract or commitment or incur or agree to incur
any new Liability or make any capital expenditures, except (a) in the ordinary
course of business consistent with past practice and (b) for any other
Liability, in each case of (a) and (b) which shall be fully and completely
discharged on or before Closing and any Liabilities to Purchaser or Newco
arising by virtue of this Agreement;
(h) sell, assign, lease or otherwise transfer or dispose of any
assets, property or rights except in the ordinary course of business consistent
with past practices;
(i) purchase or acquire, or agree to purchase or acquire, any
property, rights or assets except in the ordinary course of business consistent
with past practices except as contemplated hereby;
(j) merge or consolidate or agree to merge or consolidate with or
into any other Person;
(k) cancel or agree to cancel any indebtedness or other obligation
owing to it, or waive any its rights or claims, provided that it may negotiate
and adjust bills and accounts in the course of good faith disputes with
customers in a manner consistent with past practice;
(l) amend in a manner adverse to it or terminate any agreement,
license or other right;
(m) enter into any other transaction outside the ordinary course of
its business other than this Agreement and the implementation hereof; or
(n) agree to do any of the foregoing.
5.4 NewcoAs promptly as practicable after the execution and delivery of
this Agreement by Company and Purchaser, Purchaser shall organize Newco as
contemplated by the recitals of this Agreement and shall cause Newco to become a
party to this Agreement by executing a counterpart signature page to this
Agreement and delivering the same to Company.
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5.5 Further AssurancesThe parties hereto agree to execute and deliver, or
cause to be executed and delivered, such further instruments and documents and
take such other action as may be reasonably necessary or convenient to carry out
the transactions contemplated hereby.
5.6 Listing of Common Stock of Purchaser for TradingThe Purchaser shall
use its best efforts to cause the Purchaser Common Stock to be listed for
trading on a trading market in London, England as promptly as practicable on or
after the Closing,
6. CONDITIONS PRECEDENT TO OBLIGATIONS OF COMPANY
The obligations of Company with respect to actions to be taken on the
Closing Date are subject to the satisfaction or written waiver by Company on or
prior to the Closing Date of the following conditions:
6.1 Representations and Warranties; Performance of ObligationsAll
representations and warranties of Purchaser and Newco contained in Section 4
shall be true, complete and correct as of the Closing Date as though such
representations and warranties had been made as of that time, except for such
representations which speak as of a specific date, which shall continue to be
true, complete and correct as of the applicable date; all of the terms,
covenants and conditions of this Agreement to be complied with and performed by
Purchaser and Newco at or before the Closing shall have been duly complied with
and performed; and a certificate to the foregoing effect dated the Closing Date
and signed by the chief executive officer of Purchaser and Newco shall have been
delivered to Company.
6.2 No LitigationNo action or proceeding before a court or any other
governmental authority shall have been instituted and be continuing or
threatened to restrain or prohibit the transactions contemplated hereby except
as disclosed.
6.3 Consents and ApprovalsAll necessary consents and approvals of and
filings with any governmental authority relating to the consummation of the
transactions contemplated herein shall have been obtained and made.
6.4 Secretary's CertificateCompany shall have received a certificate,
dated the Closing Date and signed by the Secretary or an Assistant Secretary of
each of Purchaser and Newco, certifying the truth, completeness and correctness
of attached copies of the Purchaser and Newco Charter Documents and resolutions
of the boards of directors of Purchaser and Newco approving Purchaser's and
Newco's execution and delivery of this Agreement, the consummation of the
transactions contemplated hereby, and the performance of their respective
obligations hereunder.
6.5 Other Closing ConditionsThe other closing conditions set forth in this
Agreement as conditions to the obligations of Company, if any, shall have been
satisfied.
6.6 Shareholder ConsentActions by written consent of shareholders of
Company owning a majority of the outstanding shares of Company shall be binding
as the vote of shareholders of Company, and shareholders of Company owning
outstanding shares of Company carrying the right to cast a majority of the votes
which may be cast by all shares of Company in any election of directors shall
have agreed by written consent (the "Company Shareholders Written Consent") to
approve this Agreement and the Merger, such written consent being in form and in
substance satisfactory to Purchaser, and such written consent shall have been
delivered to Purchaser and such written consent shall not have been amended
without Purchaser's prior written consent or rescinded.
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7. CONDITIONS PRECEDENT TO OBLIGATIONS OF PURCHASER AND NEWCO
The obligations of Purchaser and Newco with respect to actions to be taken
on the Closing Date are subject to the satisfaction or written waiver by
Purchaser and Newco on or prior to the Closing Date of all of the following
conditions:
7.1 Representations and Warranties; Performance of ObligationsAll
representations and warranties of Company contained in Section 3 shall be true,
complete and correct as of the Closing Date as though such representations and
warranties had been made as of that time, except for such representations which
speak as of a specific date, which shall continue to be true, complete and
correct as of the applicable date; all of the terms, covenants and conditions of
this Agreement to be complied with and performed by Company at or before the
Closing shall have been duly complied with and performed; and a certificate to
the foregoing effect dated the Closing Date and signed by the chief executive
officer of Company shall have been delivered to Purchaser.
7.2 No LitigationNo action or proceeding before a court or any other
governmental authority or body shall have been instituted and be continuing or
threatened to restrain or prohibit the transactions contemplated hereby except
as disclosed.
7.3 Consents and ApprovalsAll necessary consents and approvals of and
filings with any governmental authority relating to the consummation of the
transactions contemplated herein shall have been obtained and made, and all
necessary consents and approvals of third parties shall have been obtained.
7.4 No Material Adverse EffectNo event or circumstance shall have occurred
which has had or is reasonably likely to have, individually or in the aggregate,
a Material Adverse Effect on Company or the ability of Company to perform this
Agreement, and Purchaser shall have received on the Closing Date a certificate
signed by Company dated the Closing Date to such effect.
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7.5 Secretary's CertificatePurchaser shall have received a certificate,
dated the Closing Date and signed by the Secretary or an Assistant Secretary of
Company, certifying the truth, completeness and correctness of attached copies
of the Certificate of Incorporation, Bylaws and resolutions of the Board and of
the shareholders of each of Company approving the execution and delivery of this
Agreement, the consummation of the transactions contemplated hereby, and the
performance of their respective obligations hereunder.
7.6 Other Closing ConditionsThe other closing conditions set forth in this
Agreement as conditions to the obligations of Purchaser or Newco, if any, shall
have been satisfied.
7.7 Shareholder ConsentActions by written consent of shareholders of
Company owning a majority of the outstanding shares of Company shall be binding
as the vote of shareholders of Company, and shareholders of Company owning
outstanding shares of Company carrying the right to cast a majority of the votes
which may be cast by all shares of Company in any election of directors shall
have agreed by written consent (the "Company Shareholders Written Consent") to
approve this Agreement and the Merger, such written consent being in form and in
substance satisfactory to Purchaser, and such written consent shall have been
delivered to Purchaser and such written consent shall not have been amended
without Purchaser's prior written consent or rescinded.
7.8 Exemption from RegistrationPurchaser shall be satisfied that the
shares of Purchaser Common Stock to be issued and delivered to shareholders of
Company in the Merger may be offered, issued and delivered to such shareholders
without registration under applicable Laws.
8. SURVIVAL OF REPRESENTATIONS AND WARRANTIES
8.1 Survival of Representations and WarrantiesThe parties agree that
representations and warranties made by the parties in this agreement, or in any
certificate or other instrument delivered pursuant to this Agreement, shall
expire upon consummation of the Closing.
9. TERMINATION OF AGREEMENT
9.1 TerminationThis Agreement may be terminated at any time prior to the
Closing Date solely:
(a) by mutual consent of the Boards of Directors of Purchaser and
Company;
(b) by any party if the transactions contemplated by this Agreement
to take place at or prior to the Closing shall not have been consummated by
October 31, 2006, or such later date as agreed between the parties, unless the
failure of such transactions to be consummated is due to the willful failure of
the party seeking to terminate this Agreement to materially perform any of its
obligations under this Agreement to the extent required to be performed by it
prior to or on the Closing Date;
(c) by Company if a material breach or default shall be made by
Purchaser or Newco in the observance or in the due and timely performance of any
of the covenants or agreements contained herein, and the curing of such default
shall not have been made before the Closing Date; or
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(d) by Purchaser or Newco if a material breach or default shall be
made by Company or any of its Subsidiaries or Affiliates in the observance or in
the due and timely performance of any of the covenants or agreements contained
herein, and the curing of such default shall not have been made before the
Closing Date.
9.2 Liabilities in Event of TerminationThe termination of this Agreement
shall not limit any obligation or Liability of any party based on or arising
from a breach or default by such party with respect to any of its
representations, warranties, covenants or agreements contained in this
Agreement.
10. COVENANTS POST-CLOSING
10.1 Payment of TaxesAll transfer, documentary, sales, use, registration,
value added and other such taxes and fees (including any penalties and interest)
incurred in connection with this Agreement (including any real property transfer
tax and any similar tax) or the transactions contemplated hereby shall be paid
one-half by Company and one-half by Purchaser or Newco when due, and Company
will, at the expense of Company, file all necessary tax returns and other
documentation with respect to all such taxes and fees, and, if required by
applicable legal requirements, Purchaser will join in the execution of any such
tax returns and other documentation to the extent necessary under applicable
law.
10.2 Cooperation on Tax MattersFrom and after the Closing, MFG, Purchaser
and Newco shall cooperate fully, as and to the extent reasonably requested by
the other, in connection with the preparation and filing of any Tax Return,
statement, report or form (including without limitation any report required
pursuant to Section 6043 of the Code and all regulations promulgated
thereunder), any audit, litigation or other proceeding with respect to Taxes.
Such cooperation shall include the retention and (upon the other party's
request) the provision of records and information which are reasonably relevant
to any such audit, litigation or other proceeding and making employees available
on a mutually convenient basis to provide additional information and explanation
of any material provided hereunder. MFG, Parent and Newco agree to retain all
books and records with respect to Tax matters pertinent to MPM and RRM relating
to any tax period ending on or prior to the Closing Date, and to abide by all
record retention agreements entered into with any Tax authority.
11. GENERAL
11.1 CooperationEach of the parties to this Agreement shall, subject to
the terms and provisions hereof, each deliver or cause to be delivered to the
other on the Closing Date, and at such other times and places as shall be
reasonably agreed to, such additional documents and instruments as the other may
reasonably request for the purpose of carrying out the transactions contemplated
by this Agreement. Each of the parties to this Agreement will cooperate and use
its best efforts to have its respective officers, directors and employees
cooperate with the other parties to this Agreement in furnishing information,
evidence, testimony and other assistance in connection with any tax return
filing obligations, actions, proceedings, arrangements or disputes of any nature
with respect to matters pertaining to all periods prior to the Closing Date.
15
11.2 Successors and AssignsThis Agreement and the rights of the parties
hereunder may not be assigned, transferred or otherwise disposed of (except by
operation of law or as expressly stated hereunder) and shall be binding upon and
shall inure to the benefit of the parties hereto. This Agreement is not intended
to create any third party beneficiaries.
11.3 Entire AgreementThis Agreement (including the schedules, exhibits and
annexes attached hereto, if any, and the documents contemplated hereby and
thereby) sets forth the entire understanding of the parties relating to the
subject matter of this Agreement and cancels and supersedes all agreements,
arrangements and understanding relating thereto made prior to or on the date
hereof, written or oral, between the parties to this Agreement.
11.4 CounterpartsThis Agreement may be executed by the parties hereto in
separate counterparts, each of which when so executed and delivered shall be an
original but all such counterparts together shall constitute one and the same
instrument.
11.5 Brokers and AgentsEach party represents and warrants that it employed
no broker or agent in connection with this transaction and agrees to indemnify
the other parties hereto against all loss, cost, damages or expense arising out
of claims, actions, suits, proceedings, demands or assessments for fees or
commission of brokers employed or alleged to have been employed by such
indemnifying party.
11.6 ExpensesExcept as expressly provided in Section 10.1, whether or not
the transactions herein contemplated shall be consummated, each party to this
Agreement shall pay its own fees, expenses and disbursements incurrened in
connection with the negotiation, preparation, execution and closing of this
Agreement.
11.7 NoticesAll notices and other communications under this Agreement
shall be in writing and shall be given by hand delivery, facsimile, or
nationally recognized overnight courier, and shall be deemed to have been duly
given 1) if delivered by hand, on the date of such delivery, 2) if delivered by
facsimile, on the date of such delivery, with receipt of appropriate
confirmation, 3) if delivered by nationally recognized overnight courier, on the
business day following dispatch, and 4) if delivered by first class post (or air
mail if oversees) on the 6th business day after posting with all applicable
postage pre-paid, in each case to the respective parties to this Agreement at
their respective addresses indicated in the preamble to this Agreement.
Any party may change such party's address for notices by notice duly given
pursuant hereto.
11.8 Governing LawThis Agreement shall be governed by and construed and
enforced in accordance with English law applicable to contracts entirely
negotiated, executed and performed within England, without giving effect to the
conflict of law principles thereof.
11.9 Jurisdiction and Venue(a) Each of the parties hereto hereby
irrevocably and unconditionally submits, for itself, herself or himself and its,
hers or his property, to the nonexclusive jurisdiction of any English court, and
any appellate court therefrom, in any suit, action or proceeding arising out of
or relating to this Agreement or the transactions contemplated hereunder, and
each of the parties hereto hereby irrevocably and unconditionally agrees that
all claims in respect of any such suit, action or proceeding may be heard and
determined in any such English court. Each of the parties hereto agrees that a
final judgment in any such suit, action or proceeding shall be conclusive and
may be enforced in other jurisdictions by suit on the judgment or in any other
manner provided by law.
16
(b) Each of the parties hereto irrevocably and unconditionally
waives, to the fullest extent it or he may legally and effectively do so, any
objection that it or he may now or hereafter have to the laying of venue of any
suit, action or proceeding arising out of or relating to this Agreement or the
transactions contemplated hereunder in any English court. Each of the parties
hereto irrevocably waives, to the fullest extent permitted by law, the defense
of an inconvenient forum to the maintenance of such suit, action or proceeding
in any such court.
11.10 Survival of Representations and WarrantiesThe representations,
warranties, covenants and agreements of the parties made herein and at the time
of the Closing or in writing delivered pursuant to the provisions of this
Agreement shall survive the consummation of the transactions contemplated hereby
and any examination or investigation on behalf of the parties until the
completion of the Closing.
11.11 Exercise of Rights and RemediesExcept as otherwise provided herein,
no delay of or omission in the exercise of any right, power or remedy accruing
to any party as a result of any breach or default by any other party under this
Agreement shall impair any such right, power or remedy, nor shall it be
construed as a waiver of or acquiescence in any such breach or default, or of
any similar breach or default occurring later; nor shall any waiver of any
single breach or default be deemed a waiver of any other breach or default
occurring before or after that waiver.
11.12 TimeTime is of the essence with respect to this Agreement, both as
regards the dates and periods specifically mentioned in this Agreeme nt and as
to any dates and periods which may by agreement in writing between or on behalf
of the parties to this Agreement be substituted for any such dates and/or
periods.
11.13 Reformation and SeverabilityIn case any provision of this Agreement
shall be held to be invalid, illegal or unenforceable, it shall, to the extent
possible, be modified in such manner as to be valid, legal and enforceable but
so as to most nearly retain the intent of the parties, and if such modification
is not possible, such provision shall be severed from this Agreement, and in
either case the validity, legality and enforceability of the remaining
provisions of this Agreement and the future application of such provision shall
not in any way be affected or impaired thereby.
11.14 Remedies CumulativeNo right, remedy or election given by any term of
this Agreement shall be deemed exclusive but each shall be cumulative with all
other rights, remedies and elections available at law or in equity.
11.15 CaptionsThe headings of this Agreement are inserted for convenience
only, shall not constitute a part of this Agreement or be used to construe or
interpret any provision hereof.
17
11.16 Representation by CounselEach party to this Agreement represents and
warrants that such party has been represented by counsel in the negotiation,
drafting and execution of this Agreement. Accordingly, no provision of this
Agreement shall be construed against any party on the grounds that party drafted
the provision or caused it to be drafted.
11.17 Amendments; WaiversThis Agreement may be amended, modified or
canceled and the terms or covenants hereof may be waived, only by a written
instrument executed by the parties, or in the case of a waiver, by the party
waiving compliance. The failure of any party at any time or times to require
performance of any provision hereof shall in no manner affect the right of such
party at a later time to enforce the same. No waiver by any party of the breach
of any term or covenant contained in this Agreement, whether by conduct or
otherwise, in any one or more instances, shall be deemed to be, or construed as,
a further or continuing waiver of any such breach, or a waiver of the breach of
any other term or covenant contained in this Agreement.
11.18 Public AnnouncementsThe parties hereto agree that no announcement
relating to the transactions contemplated hereby shall be made by any party
hereto or any of their Affiliates or representatives without the prior written
consent and involvement of each other party, except as may be required by any
applicable Law or governmental authority.
11.19 Transfer Restrictions; Compliance with Securities LawsThe shares of
Purchaser Common Stock to be issued to the Company shareholders pursuant to the
Merger have not been registered under any applicable Laws, and may not be sold,
transferred or otherwise disposed of, except pursuant to an exemption from the
registration requirements under applicable Laws or an effective registration
statement filed with the applicable governmental authority. In addition, the
shares of Purchaser Common Stock to be issued to the Company shareholders
pursuant to the Merger may not be transferred or otherwise disposed of for a
period of one (1) year following the effective date of the listing of the
Purchaser Common Stock by Purchaser for trading on a trading market pursuant to
Section 5.6 of this Agreement without the prior written consent of Purchaser,
which consent, if given at all, shall be given to all shareholders. The
Purchaser has no intention to register the Merger Shares or to establish a
trading market for the Merger Shares in the United States. The Purchaser has
covenanted to use the Purchaser's best efforts to cause the Merger Shares to be
listed for trading on a London trading market as soon as practicable on or after
the Closing. All certificates representing shares of Purchaser Common Stock
issued pursuant to the Merger shall bear a legend reflecting the foregoing.
Purchaser may place stop transfer orders with its transfer agent with respect to
such certificates in accordance with applicable Laws and the foregoing.
11.20 Restatement and Amendment of Prior AgreementThe parties to this
Agreement acknowledge and agree that this agreement restates, amends and
supersedes in its entirety any prior acquisition agreement and plan of merger
among the parties hereto.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
GARDANT PHARMACEUTICALS, INC.
/s/ Xxx Xxxx
-----------------------------------
By: Xxx Xxxx
Its: Chairman
19
SWITCH PHARMA LIMITED
/s/ Xxxxxxx Xxxxxxx
-----------------------------------
By: Xxxxxxx Xxxxxxx
Its: Director
20
GARDANT PHARMACEUTICALS
ACQUISITION CORPORATION
/s/ X. Xxxxxx
-----------------------------------
By:
Its: Vice President
SCHEDULE 1
Details of Gardant Pharmaceuticals, Inc
State of Incorporation: Nevada
Date of incorporation: March 10th, 2000
Share capital:
Authorised: 100,000,000 Common Shares at $0.001 par value
10,000,000 Preferred Shares at $0.001 par value
Issued: 81,914,283
Subsidiaries : Bioaccelerate, Inc (Delaware)
Bioaccelerate Limited (United Kingdom - England
& Wales)
Cynat Oncology, Inc (Delaware)
Anvira Inc (Delaware)
Biocardio Inc (Delaware)
CNS Thera, Inc (Delaware)
Genar Oncology, Inc (Delaware)
Oncbio, Inc (Delaware)
Innova Lifestyle, Inc (Delaware)
2
SCHEDULE 2
Warranties
1. Corporate Matters
1.1 The information relating to the Company contained in Schedule 1 is
true.
1.2 The Shares constitute the entire issued and allotted share capital
of the Company.
1.3 There are no agreements or arrangements in force, other than this
Agreement, which grant to any person the right to call for the
issue, allotment or transfer of any share or loan capital of the
Company.
1.4 Save for immaterial errors the register of members and other
statutory books of the Company have been properly kept and contain
an accurate and complete record of the matters with which they
should deal; and no notice or allegation, that any of them is
incorrect or should be rectified, has been received.
2. Accounting Matters
2.1 The Accounts have been prepared in accordance with the historical
cost convention.
2.2 The Accounts:
2.1.1 give a true and fair view of the assets, liabilities
(including contingent, unquantified or disputed liabilities)
and commitments of the Company at the Accounts Date and its
profits for the financial period ended on that date; and
2.1.2 are not affected by any extraordinary, exceptional or
non-recurring item.
2.3 All the accounts, books, ledgers, and other financial records of the
Company are in its possession and have been maintained.
3. Taxation Matters
3.1 All returns, computations and payments which should be, or should
have been, made by the Company for any taxation purpose have been
made within the requisite periods and are up-to-date, correct and on
a proper basis and none of them is, or is likely to be, the subject
of any dispute with the applicable taxation authorities.
3
3.2 The Company will, nor will become, liable to pay, or make
reimbursement or indemnity in respect of, any taxation (or amounts
corresponding thereto) in consequence of the failure by any other
person (not being a group company) to discharge that taxation within
any specified period or otherwise, where such taxation relates to a
profit, income or gain, transaction, event, omission or circumstance
arising, occurring or deemed to arise or occur (whether wholly or
partly) on or prior to the date of this Agreement.
3.3 The Company has not incurred or is, or has become, liable to incur
expenditure which will not be wholly deductible in computing its
taxable profits except for expenditure on the acquisition of an
asset to be held otherwise than as stock-in-trade.
3.4 The execution or completion of this Agreement will not result in any
profit or gain deemed to accrue to the Company for taxation
purposes.
3.5 The Company has not in the three years ending on the date of this
Agreement carried out, or been engaged in, any transaction or
arrangement in respect of which there may be substituted for the
consideration given or received by the Company a different
consideration for taxation purposes.
4. Asset Matters
4.1 The Company owns and has good and marketable title to all assets
purported to be held by it.
5. Intellectual Property Rights and Trade Secrets
5.1 All Intellectual Property rights used or acquired (and not
subsequently disposed of) by the Company, as the case may be, in
connection with its business are in full force and effect and are
vested in and beneficially owned by it.
5.2 The Company has not (otherwise than in the ordinary and normal
course of business) disclosed or permitted to be disclosed or
undertaken or arranged to disclose to any person other than the
Purchaser any of its know-how, trade secrets, confidential
information, price lists or lists of customers or suppliers.
5.3 The Company is not a party (otherwise than in the ordinary and
normal course of its business) to any secrecy agreement or agreement
which may restrict the use of disclosure of information.
6. General Matters
6.1 So far as the Company are aware, all information given by the
Company, or the Company' accountants to the Purchaser, or the
Purchaser's accountants relating to the business, activities,
affairs, or assets or liabilities of the Company, as the case may
be, was, when given, and is now accurate and comprehensive in all
respects.
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6.2 To the best of the Company' knowledge, there are no material facts
or circumstances, in relation to the assets, business or financial
condition of the Company, as the case may be, which have not been
fully and fairly disclosed in writing to the Purchaser and which, if
disclosed, might reasonably have been expected to affect the
decision of the Purchaser to enter into this Agreement.
5
