<PAGE>
Exhibit 2.2
SALE OF SHARES AND CLAIMS AGREEMENT
between
GEMINI HOLDINGS PLC
and
THE MAJORITY VENDORS
Confidential Treatment Requested and the Redacted
Material has been separately filed with the Commission
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TABLE OF CONTENTS
1 PARTIES ............................................................. 3
2 PREAMBLE ............................................................ 3
3 DEFINITIONS AND INTERPRETATIONS ..................................... 3
4 SALE AND PURCHASE OF THE MINORITY SHARES AND THE MINORITY CLAIMS .... 8
5 PURCHASE PRICE ...................................................... 8
6 CLOSING ............................................................. 8
7 REPRESENTATIONS AND WARRANTIES OF THE MAJORITY VENDORS .............. 9
8 REPRESENTATIONS AND WARRANTIES BY THE PURCHASER ..................... 20
9 INDEMNIFICATION ..................................................... 21
10 FURTHER ASURANCE .................................................... 23
11 CONFIDENTIALITY; ANNOUNCEMENTS ...................................... 23
12 ASSIGNMENT .......................................................... 24
13 NOTICES ............................................................. 24
14 AMENDMENTS .......................................................... 25
15 HEADINGS ............................................................ 25
16 ANNULMENT OF PROVISIONS ............................................. 26
17 MISCELLANEOUS ....................................................... 26
18 CONDITIONS PRECEDENT ................................................ 27
19 GOVERNING LAW AND ARBITRATION PROCEDURES ............................ 27
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SALE OF SHARES AND CLAIMS AGREEMENT
1 PARTIES
1.1 Gemini Holdings Plc, registered in England with number 3377251, whose
registered office is at 162, Science Park, Milton Road, Cambridge CB4
OGH, United Kingdom, hereinafter referred to as the "Purchaser".
1.2 The persons and entities listed in Appendix 1 hereto, hereinafter
collectively referred to as the "Minority Vendors".
2 PREAMBLE
2.1 The Majority and the Minority Vendors are the owners of all of the
Shares in and have the benefit of all of the Claims against Eurona
Medical AB, co. reg no 556512-6298, a company incorporated under the
laws of Sweden (hereinafter referred to as the "Company"), having a
registered share capital of SEK 1,045,232 divided into 1,045,232 shares
with a nominal value of SEK 1 each.
2.2 The Purchaser has agreed to purchase and the Majority Vendor have agreed
to sell the Majority Shares and the Majority Claims on the terms and
conditions set out in this Agreement.
3 DEFINITIONS AND INTERPRETATIONS
3.1 In this Agreement (including the Appendices hereto) the following terms
and expressions shall have the meanings set out below:
"Accounting Principles" means the accounting principles described in
Appendix 2 hereto, and otherwise such principles
as are consistent with the past practice of the
Company during the years 1997, 1998 and 1999,
all such principles being in accordance with
generally accepted accounting principles in
Sweden;
"Accounts" means the audited statutory balance sheet and
the audited profit and loss account of the
Company for the financial year ended 31
December, 1998, prepared in accordance with the
Accounting Principles;
"Agreement" means this Sale of Shares and Claims Agreement,
together with all Appendices
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hereto;
"Agreement on Purchase and means an agreement on purchase and licensing of
Licensing of Inventions" cardiovascular intellectual property entered
into by the Company and Pyrosequencing AB on
December 6, 1999;
"Appendix; Appendices" means the Appendices to this Agreement;
"Balance Sheet" means the Balance Sheet of the Company as of the
Balance Sheet Date enclosed as Appendix 3;
"Balance Sheet Date" means 30 November, 1999;
"Claims" means all claims and rights of whatsoever nature
and however arising which any of the Vendors may
have against the Company on the Closing Date or
at a later date arising out of circumstances
present on the Closing Date, including but not
limited to (i) any other monetarial claims than
wages, employment benefits and consultancy fees,
(ii) zero coupon loan notes and promises to
receive zero coupon loan notes, (iii) options
(including but not limited to synthetic options
(sw: "synteriska optioner") and staff options
(sw: "personaloptioner"), (iv) warrants, rights,
commitments, conversion rights and any other
rights to subscribe for or acquire shares in the
Company;
"Closing" means the consummation and completion of the
sale of the Shares and of the benefit of the
Claims at the Closing Date in accordance with
the provisions of clause 5 below;
"Closing Date" means 17 December, 1999;
"Directors" means the board members and deputy board members
of the Company at the Closing Date;
"Due Diligence List" means a list of the documents disclosed to the
Purchaser by the Vendors, as set out in Appendix
4 hereto;
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"Environment" means any and all organisms (including man),
ecosystems, property and the following media:
air (including the air within buildings and the
air within other natural or man-made structures,
whether above or below ground); water (including
water under or within land or in drains or
sewers and coastal and inland waters); and land
(including land under water);
"Environmental Laws" means any and all laws, whether civil, criminal
or administrative, applicable to the Company
and/or conduct of the Company's business and
which have as a purpose or effect the protection
or the provision of remedies in respect of the
Environment including: European Community or
European Union regulations, directives,
decisions and recommendations; statutes and
subordinate legislation; regulations, orders and
ordinances; Permits; codes of practice,
circulars, guidance notes and the like; common
law, local laws and by-laws; and judgements,
notices. orders, directions, instructions or
awards of any competent authority;
"Gemini Shareholders means the Shareholders Agreement relating to
Agreement" Phenomix PLC entered into between GeneLink
Holdings Limited and others, on the one side,
and Phenomix PLC on the other side, on December
5, 1997.
"Health and Safety Laws" means any and all laws, whether civil, criminal
or administrative, applicable to the Company
and/or the Company's business concerning health
and safety matters and all and any regulations
or orders made or issued under any such
legislation and any relevant codes of practice,
guidance notes and the like issued by government
agencies;
"Intellectual Property" means all domestic and foreign patents, patent
applications, patent licenses, software rights
and Know-How rights, trade names, trademarks,
copyrights, service marks, trademark
registration and
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applications (whether pending or abandoned),
service mark registrations and applications,
copyright registrations and applications
(whether pending or abandoned), rights to
drawings and photographs, and rights to patterns
as well as any other intellectual property of
any nature;
"IT Systems" means any and all computer, telecommunications
and network equipment and/or computer software
or programs (in both source and object code
form) of whatsoever nature owned or used by the
Company;
"Know-How" means all information, data and methodology
nor at present freely available to the public
and all financial, commercial, trade and
business secrets of whatever nature and in
whatever form (including those comprised in,
derived from or relating to any drawings,
diagrams, illustrations, data,
specifications, lists, programs, formulae,
technical information, plans, reports,
manuals and all other documents, recorded
information and data);
"Majority Claims" means the Claims held by the Majority Vendors
as set out opposite the names listed in
Appendix 1;
"Majority Shares" means the Shares held by the Majority Vendors
as set out opposite the names listed in
Appendix 1;
"Majority Vendors" means the persons and entities set out in
Appendix 1;
"Minority Claims" means the Claims held by the Minority Vendors
as set out opposite the names listed in
Appendix 5;
"Minority Shares" means the Shares held by the Minority Vendors
as set out opposite the names listed in
Appendix 5;
"Minority Vendors" means the persons and entities set out in
Appendix 5;
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"Permits" means any and all licences, consents, permits,
registrations, filings, exemptions, approvals,
authorisations or the like, made or issued
pursuant to or under, or required by,
Environment Laws in relation to the carrying on
of the Company's business;
"Properties" means the premises leased by the Company in
accordance with the lease agreements listed in
Appendix 6;
"Purchase Price" means the price set out in clause 5 below;
"Relevant IP" means the Intellectual Property owned, used or
exploited by the Company and listed in Appendix
7;
"Shares" means 1,045,232 shares in the Company each with
a nominal value of SEK 1;
"To the best knowledge of the means matters which are actually known
Majority Vendor" by any of the Majority Vendors or any
board member or deputy board member of
the Company appointed by any Majority
Vendor;
"Warranties" means the warranties and representations set out
in clause 7 below;
"Value 1" means (i) the quoted price [trading
bid price] (SW: KOPKURS) of each
Majority Vendor's Gemini Shares at
the date occurring two (2) trading
days after a claim for
indemnification is made in
accordance with clause 9, or (ii) if a
Majority Vendor has disposed of his Gemini
Shares before a claim is made, the purchase
price; or (iii) if the Majority Vendor has
partially disposed of his Gemini Shares before a
claim is made, the aggregate of (i) and (ii);
"Value II" means the purchase price actually received by
each Majority Vendor for his Gemini Shares at
a sale made in accordance with the Gemini
Shareholders Agreement and the Purchasers
articles of association;
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"Vendors" means the Majority Vendors and the
Minority Vendors collectively
4 SALE AND PURCHASE OF THE MAJORITY SHARES AND THE MAJORITY CLAIMS
4.1 Subject to the terms of this Agreement, each of the Majority Vendors
agree to sell to the Purchaser the number of the Majority Shares and the
benefit of the Majority Claims as set out opposite each Majority
Vendor's name in Appendix 1 on the Closing Date and the Purchaser agrees
to purchase the Majority Shares and the benefit of the Majority Claims
on the same date.
4.2 The Majority Shares and the benefit of the Majority Claims shall be sold
free from liens and encumbrances and together with all benefits and
rights attaching thereto.
4.3 The Purchaser shall not be obliged to complete the purchase of any of
the Shares or the benefit of any of the Claims union the purchase of all
of the Shares and of the benefit of all of the Claims is completed
simultaneously.
5 PURCHASE PRICE
The Purchase Price for the Majority Shares and the benefit of the
Majority Claims shall be satisfied by the issue by the Purchaser of
eighty six thousand eighty six (86,086) C Preferred Ordinary Shares of
GBP 1 (one) each in the Purchaser ("the Gemini Shares"), which shall be
delivered to the Majority Vendors in the proportions set out opposite
their respective names in Appendix 1.
6 CLOSING
6.1 Closing shall, unless otherwise agreed in writing between the parties,
take place immediately upon the execution of this Agreement on the
Closing Date at the offices of CMS Tisell Advokatfirma AB.
6.2 At the Closing
(i) each Majority Vendor shall in exchange for the number of Gemini
Shares set out opposite his name in Appendix 1, deliver to the
Purchaser the share certificates his respective number of the
Majority Shares and any instrument pertaining to the Majority
Claims, all of which shall be duly endorsed;
(ii) the Majority Vendors shall cause all Directors to retire (to the
extent
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this is requested by the Purchaser) without any claims for
compensation from the Company;
(iii) if requested by the Purchaser, the Majority Vendors shall
procure the Company to issue powers of attorney enabling the
persons appointed by the Purchaser to sign for and on behalf of
the Company until new signatories have been duly registered.
7 REPRESENTATIONS AND WARRANTIES OF THE MAJORITY VENDORS
The Majority Vendors represent, warrant and agree as of the Closing Date
that the following statements in this clause 7 are true and correct in
all respects.
The Purchaser has carried out an investigation of the Company (due
diligence).
None of the Warranties shall be deemed in any way modified or discharged
by reason of any investigation or inquiry made or to be made by or on
behalf of the Purchaser unless information implying a deviation from
and/or a breach of a Warranty is clearly disclosed in this clause 7
and/or in the documents contained in the Due Diligence List. No other
information relating to the Company of which the Purchaser has knowledge
(actual or constructive) shall prejudice any claim which the Purchaser
shall be entitled to bring or shall operate to reduce any amount
recoverable by the Purchaser under this Agreement.
7.1 Capacity
Each Majority Vendor has obtained all necessary corporate and other
consents and approvals in relation to the performance of this Agreement
and, accordingly, has full power to enter into and perform this
Agreement, which constitutes (or will when executed constitute) binding
obligations on each Majority Vendor in accordance with its terms.
7.2 Full Disclosure
The information set out in Appendices 1 - 13 and all information
contained in the documents listed in the Due Diligence List is true and
accurate and not misleading and all information which has been given to
the Purchaser or its representatives or professional advisers by the
Vendors or by any director, officer or other official of the Company or
by their respective professional advisers or other agents in the course
of the negotiations leading to this Agreement was when given and is now
true and accurate in all respects and not misleading. Insofar as any
such information are matters of opinion or represent a forecast,
intention or expectation,
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such opinions, forecasts, intentions or expectations (as appropriate)
are honestly held or believed by the Majority Vendors and made on
reasonable grounds.
To the best knowledge of the Majority Vendors, there are no undisclosed
material facts or circumstances concerning the Company, which if
disclosed to the Purchaser, might reasonably have been expected to
affect the decision of the Purchaser to enter into this Agreement on the
terms herein.
7.3 Ownership of Stock
Each Vendor is the owner of record of the number of Shares as listed
opposite his name in Appendices 1 and 5 hereto, free and clear of all
liens, encumbrances, restrictions and claims of any kind; each Majority
Vendor has full legal right, power and authority to enter into this
Agreement and to sell, assign, transfer and convey the Shares so owned
by him pursuant to this Agreement.
7.4 Claims
Each Vendor is the holder of the Claims listed opposite his name in
Appendices 1 and 5 hereto, free and clear of all liens, encumbrances and
claims of any kind; each respective Majority Vendor has full legal
right, power and authority to enter into this Agreement and to sell,
assign, transfer, waive and convey the Claims so held by him pursuant to
this Agreement; each Vendor has no further Claims than the ones listed
in Appendices 1 and 5.
7.5 The Company
The Company is a corporation duly formed and organised and is validly
existing under the laws of Sweden. The Company has the requisite
corporate power and authority to own its property and to carry on its
business in its present form. The Company's Articles of Association and
Certificate of Registration as presently in force are attached as
Appendix 8 to this Agreement and are true and complete in all respects
and the Company has always carried on it business and affairs in
accordance with the Company's Articles of Association and Certificate of
Registration.
7.6 Share Capital
The Shares constitute the whole of the Company's share capital and each
Vendor is the sole beneficial owner of the number of Shares as set out
opposite his name in Appendices 1 and 5. All such outstanding Shares
have been duly authorised and validly issued and are fully paid and
non-assessable, and have not been issued in violation of any pre-emptive
rights of shareholders. There are no outstanding options, zero coupon
loan notes,
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warrants, rights, calls, commitments, conversion rights, rights of
exchange, plans or other agreements of any character providing for the
purchase, subscription, allotment, issuance or sale of any shares of the
capital stock of the Company other than the Claims listed opposite each
Vendors name in Appendices 1 and 5 hereto.
7.7 Accounts, Balance Sheet and Financing
7.7.1 The Accounts have been properly audited and the Accounts and the Balance
Sheet are true and correct in all respects and have been prepared in
accordance with the Accounting Principles. The Accounts and the Balance
Sheet fairly present the financial condition of the Company at the
respective dates thereof and, except as indicated therein, reflects all
claims made against and all debts and liabilities of the Company, fixed
or contingent, as at the respective dates thereof, and the related
income statements fairly present the results of operation of the Company
for the period indicated; and do not include (and the profits of the
Company for the period have not been affected to a material extent by)
any unusual, extraordinary or non-recurring items of income or
expenditure.
7.7.2 The Company's account overdraft facility (sw. "checkrakningskredit") and
bridging facility, the particulars set out in Appendix 9, are terminated
by the Company on the Closing Date and all sums owed by the Company
under said facilities are repaid in full.
7.8 Book and Records
7.8.1 All accounts, books, ledgers and official and other records of the
Company of whatsoever kind have been properly and accurately kept and
completed in all material respects, and there are no material
inaccuracies or discrepancies of any kind contained or reflected
therein, and taken as a whole they reflect a fair view of the financial
position of the Company.
7.8.2 To the best knowledge of the Majority Vendors, all returns, particulars,
resolutions and other documents required to be filed with or delivered
to the Swedish Patent and Registration Office (sw. "Patent- och
Registreringsverket") by the Company have been correctly and properly
prepared and so filed or delivered.
7.9 Assets of the Company
7.9.1 The Company has good, valid and marketable title to all its tangible
assets and, To the best knowledge of the Majority Vendors, to all its
intangible assets including, without limitation, all the assets
reflected in the Accounts and the Balance Sheet except as indicated in
the notes thereto, and all the assets purchased or otherwise acquired by
the Company since the Balance
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Sheet Date (except in each case for assets reflected in the Accounts and
the Balance Sheet or acquired since the Balance Sheet Date that have
been sold or otherwise disposed of in the ordinary course of business)
and all such assets are in the possession and control of the Company and
sited within Sweden; in each case subject to no encumbrance, lien,
charge or other restriction of any kind or character, except for liens
reflected in the Balance Sheet or the notes thereto.
7.9.2 The Company has not acquired or agreed to acquire any material assets on
terms that title does not pass to the Company until full payment is made
(sw. "aganderattsforbehall").
7.9.3 Appendix 10 contains a complete and accurate list of all assets owned or
in the possession of the Company and held under any leasing,
hire-purchase, conditional sale, deferred payment or other similar
agreement and up to date details of the rentals (or alike payments)
payable by the Company thereunder.
7.10 Contracts
Complete and accurate copies of all contracts to which the Company is a
party as are material have been disclosed by the Majority Vendors and
are listed in the Due Diligence List. The Company is not a party to or
subject to any agreement, transaction, obligation, commitment,
understanding, arrangement or liability which is in any way otherwise
than in the ordinary and proper course of the Company's business.
7.10.1 To the best knowledge of the Majority Vendors, the terms of all
contracts of the Company have been complied with by the Company and by
the other parties to the contracts in all material respects and there
are no circumstances likely to give rise to default by the Company or by
the other parties under such contracts.
7.10.2 The Majority Vendors have no knowledge of the invalidity,
unenforceability or grounds of rescission or avoidance of any agreement
(wholly or partly) or other transactions to which the Company is a party
and has received no notice of any intention to terminate or disclaim any
such agreement or other transaction.
7.10.3 The agreement of 14 May, 1998 between the Company and Clinical
Responsibility in Uppsala AB (formerly Eurona AB) ensures the Company
the full and unlimited benefit of any and all of Clinical Responsibility
in Uppsala AB's rights in accordance with the contracts set out in
Appendix 11.
7.10.4 The Company has the right, at no cost for the Company, to assume the
rights of Clinical Responsibility in Uppsula AB in accordance with the
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contracts set out in Appendix 11 and thus to enter into the contract as
a party, subject to the approval of the counterparty.
7.11 Litigation
There is no action, suit, proceeding by any person or legal entity, or
any arbitration or any administrative or other proceeding by or before
any governmental or other instrumentality or agency, pending or, to the
best knowledge of the Majority Vendors, threatened, against the Company
and the Majority Vendors do not know of any valid basis for any such
action, proceeding or investigation. The Company is not plaintiff in any
proceeding or in any arbitration or administration proceeding. The
Company is not subject to any judgement, order or decree entered in any
lawsuit or proceeding.
7.12 Taxes
7.12.1 The Company has filed, or caused to be filed within the times and within
the manner prescribed by law, all tax or information returns and tax
reports required under all applicable statutes, rules or regulations to
be filed by the Company with respect to any taxes, levies and charges
(including interest, penalties or additions to tax in respect of the
foregoing) whether disputed or not (all of the foregoing and the tax
losses referred to in sub-clause 7.12.2 collectively referred to as
"Taxes"). All Taxes shown on said returns to be due and all additional
assessments received prior to the date hereof have been paid. The
amounts set up as accruals for Taxes in the Accounts and the Balance
Sheet are sufficient for the payment of all accrued and unpaid Taxes of
the Company whether or not disputed, for all periods ended on and prior
to the respective dates thereof. The Company has not received notice of
any proposed audit or reassessment from any taxing authorities and no
examination by the appropriate taxing authority of any return of the
Company is currently in progress. No deficiency in the payment of Taxes
by the Company for any period has been asserted by any authority and
remains unsettled at Closing Date. There are no outstanding agreements
or waivers extending the statutory period of limitation for assessment
applicable to any tax return of the Company.
7.12.2 The tax losses for the fiscal year 1999 will amount to not less than SEK
sixty five million six hundred thousand (65,600,000). The consummation
of this Agreement will not negatively affect the Company's right to
deduct the said tax losses.
7.13 Insurance
To the best knowledge of the Majority Vendors, particulars of all
policies of insurance of the Company now in force have been disclosed
and such particulars are true and correct and all premiums due on such
policies have
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been duly paid and all such policies are valid and in force and listed
in the Due Diligence List. So far as the Majority Vendors are aware
there are no circumstances which might lead to any liability under such
insurance being avoided by the insurers or the premium being abnormally
increased. There is no claim outstanding under any such policies and so
far as the Majority Vendors are aware there are no circumstances likely
to give rise to a claim.
7.14 Intellectual Property and Information Technology
7.14.1 Appendix 7 contains complete particulars of all Relevant IP, except for
patent application reference OE985USO where a license agreement with the
inventors is not at place.
7.14.2 The Company is the sole beneficial owner of all Relevant IP unless
otherwise explicitly stated in Appendix 7.
7.14.3 The Company has not, to the best knowledge of the Majority Vendors,
authorised or otherwise permitted any use whatsoever of any Relevant IP,
or granted to any third party any right or interest in respect thereof,
and the Relevant IP owned by the Company is free of all liens, pledges
or other encumbrances, except for patent application reference 1DO42US1
and 2D042WO0.
7.14.4 The Relevant IP (insofar as it is owned by the Company) is valid and
subsisting and none of the Relevant IP is, except for patent application
reference 1DO42US1 and 2D042W00, to the best knowledge of the Majority
Vendors, the subject of outstanding or threatened disputes, claims or
proceedings for cancellation, revocation, opposition, interference,
rectification or contested ownership.
7.14.5 In carrying on its business, the Company has, except for patent
application reference 1DO42US1 and 2D042WO0, to the best knowledge of
the Majority Vendors, not infringed and does not infringe any
Intellectual Property of a third party.
7.14.6 Where registration is available, applications for registration of all
Relevant IP owned by the Company are, to the Best knowledge of the
Majority Vendors, being diligently prosecuted and the Company has,
except for patent application reference 1DO42US1 and 2D042WO0, received
no adverse opinion whether from any registry concerned or its own
advisers in relation to any such application. All pending patent
applications have been maintained and all fees have been paid on time.
7.14.7 To the best knowledge of the Majority Vendors all Know-How owned, used
or exploited by the Company has been kept secret and confidential and
has not been disclosed to third parties other than those subject to
confidentiality obligations and there has, except as set out in Appendix
7,
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been no publication of research results detrimental to the application
of patents.
7.14.8 To the best knowledge of the Majority Vendors, all agreements or
arrangements relating to the Relevant IP are valid, binding and
enforceable, none has been the subject of any breach or default by any
party or of any event which with notice or lapse of time or both would
constitute a default, and there are no disputes, claims or proceedings
arising out of or relating to such agreements or arrangements.
7.14.9 To the best knowledge of the Majority Vendors, there has been and is no
current or anticipated infringement by any third party of any Relevant
IP.
7.14.10 All material IT Systems are owned or leased by the Company.
7.14.11 Appendix 7 contains a complete listing of all agreements or arrangements
with third parties relating to IT Systems, which are material to the
Business (including all hire purchase agreements, or leases of hardware
and licences of software, disaster recovery services, outsourcing or
consultancy agreements, maintenance and support contracts) and all such
agreements and arrangements are valid, binding and enforceable.
7.14.12 The Company has fulfilled its obligations under the Swedish Act on the
Right to Employee Inventions (sw: "lag om ratten till arbetstagares
uppfinning") in relation to T. Norberg, M. Andersson and F. Lindstrom
(re: patent applications reference 1DO42US1 and 2D042WO0) and to T.
Norberg, M. Andersson, L. Jonsson and P. Lindstrom (re: patent
applications reference 1E793US1 and 2E793WO0.
7.15 Compliance with Laws; Licenses and Permits
7.15.1 Compliance
To the best knowledge of the Majority Vendors, the Company is, and its
business has been conducted, in compliance in all material respects with
all applicable laws, regulations, orders, judgements, decrees, codes,
and ordinances (hereinafter referred to as "Requirements of Law"). The
Company has not been charged with or threatened with, or is under any
investigation with respect to any charge concerning any violation of
any Requirements of Law.
7.15.2 Licenses
To the best knowledge of the Majority Vendors, the Company has all
licenses, permits or other governmental certificates, authorisations and
approvals required by any governmental or regulatory body for the
operation of the Company's business or the use of its properties as
presently
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operated or used.
7.16 Employees
7.16.1 Appendix 12 is a complete and accurate schedule of all employees of the
Company including details of their dates of birth, the date on which
they commenced continuous employment with the Company and all
remuneration payable and other benefits provided or which the Company is
bound to provide to each such person. In addition, the Due Diligence
List contains a complete listing of all standard terms of employment and
other statements or documents containing the terms of employee
emoluments and benefits.
7.16.2 All employees of the Company, except for the administrative staff not
involved in research and development, have confirmed the Company's
rights to inventions an accordance with the appendix: "Rights to
Inventions" (sw: "Ratt till uppfinningar") attached to each employment
agreement.
7.16.3 The Due Diligence List contains a complete listing of all consultancy
agreement of any significance for the normal course of the Company's
business (including management services agreements) in existence between
the Company and any other person, firm or company, and there are no
arrangements (including collective bargaining agreements) between the
Company or any employers association of which the Company as a member
and any trade union.
7.16.4 The Company will not be encumbered with any consultancy, costs related
to the disposal of the Shares and Claims to the Purchaser, including but
not limited to fees to financial and legal advisors.
7.16.5 Save to the extent (if any) to which provision or allowance has been
made in the Accounts or the Balance Sheet the Company has not, except
for what is evident from any disclosed employment contract, made or
agreed to make any payment to or provided or agreed to provide any
benefit for any former director, officer or employee of the Company.
7.16.6 To the best knowledge of the Majority Vendors, the Company has, with the
exception for the termination of Erik Bisessar's employment and the
Purchaser's disclosure to certain of the Company's staff of its
intentions regarding reduction in staff levels complied with all
obligations imposed on it by all relevant statutes, regulations and
codes of conducts and practice relating to its employees and (so far
as relevant) former employees and has maintained current and adequate
records regarding the service, terms and conditions of employment of
each of its employees.
7.16.7 Save as provided in Appendix 12, no present director, officer or
employee of the Company has given or received notice terminating his
employment
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except as expressly contemplated under this Agreement and the
consummation of this Agreement will not entitle any employee to
terminate his employment or trigger any entitlement to a severance
payment or liquidated damages.
7.16.8 Save for the Claims listed in Appendices 1 and 5 the Company does not
have in existence nor is it proposing to introduce, and none of its
directors, officers and employees participates in (whether or not
established by the Company), any employee share trust, share incentive
scheme, share option scheme or profit sharing scheme for the benefit of
all or any of its present or former directors, officers or employees or
the persons closely associated with any of such persons or any scheme
under which any present or former director, officer or employee of the
Company is entitled to a commission or remuneration of any other sort
calculated by reference to the whole or past of the turnover, profits or
sales of the Company or any other person, firm or company.
7.16.9 The Company is not involved in any labour dispute, no dispute exists
between the Company and any trade union or employee, and to the best
knowledge of the Majority Vendors, there are no wage or other claims
outstanding against the Company by any person who is now or has been a
director, officer or employee of the Company, other than the claims
raised by Per Lindstrom.
7.17 Post-Balance Sheet Date Events
7.17.1 Since the Balance Sheet Date, the Company:
(i) has carried on its business in the normal course and without any
interruption or material alterations in the nature, scope or manner of
its business;
(ii) has, except for the Agreement on Purchasing and Licensing of
Inventions, not acquired or disposed of or agreed to acquire or dispose
of any assets other than in the ordinary course of trading, or assumed
or incurred or agreed to assume or incur any material liabilities
(actual or contingent) or entered into any long term or unusual
transaction, whether or not in the ordinary course of trading;
(iii) has not declared, made or paid any dividend, bonus or other
distribution of capital or income;
(iv) has not received or been notified of any wage claim or made or
agreed to make any change to the terms of employment or basis or amount
of the emoluments or pension benefits to any present or former director,
officer or employee of the Company, except for a payment to Torbjorn
Norberg in accordance with the agreement regarding synthetic options,
Appendix 3;
<PAGE>
18(28)
(v) has not entered into any contract involving capital expenditures;
(vi) has not purchased stock in quantities or at prices materially
greater than was the practice of the Company before the Balance Sheet
Date;
(vii) has not acquired or agreed to acquire any asset for a
consideration higher than the market value at the time of acquisition of
such asset or disposed of or agreed to dispose of any asset for a
consideration lower than the market value of such asset at the time of
disposal;
(viii) has paid its creditors within the times agreed with such
creditors and does not have any debts outstanding which are overdue for
payment by more than four weeks; and
(ix) has not made a payment or incurred an obligation to make a payment
which will not be deductible in computing trading profits for the
purposes of corporation tax.
7.18 Net assets
The net assets (sw: "eget kapital") of the Company on Closing Date is at
least SEK thirty five million seven hundred thousand (35,700,000) of
which at least SEK one million five hundred thousand (1,500,000) is in
unrestricted cash and cash equivalents. The total net assets of the
Company on Closing Date shall be determined in accordance with the
Accounting Principles.
7.19 Liabilities
To the best knowledge of the Majority Vendors, there an no actual or
contingent liabilities arising out of contract (including tort and
product liability) due to the activities and products of the Company.
7.20 Properties
7.20.1 The Properties comprise all the premises leased, controlled, used or
occupied by the Company.
7.20.2 The Company has no liability (whether actual, contingent or otherwise)
as lessee, assignee, guarantor, covenantor or otherwise arising from or
relating to any estate, interest or right in any land other than the
Properties.
7.20.3 The Company is in actual occupation of the Properties on an exclusive
basis and besides the lessor (sw; "hyresvarden") (to the extent
prescribed by law or the Lease Agreement) no person, other than the
Company, has any right (actual or contingent) to possession, occupation
or use of or interest in the Properties.
<PAGE>
19(28)
7.20.4 Complete and accurate copies of all lease agreements are enclosed hereto
in Appendix 6 (hereinafter collectively referred to as the "Lease
Agreements") and the Company has not committed any material breach
thereof.
7.20.5 The sub lease agreement regarding certain premises at Kungsangsvagen 25
in Uppsala between Clinical Responsibility in Uppsala AB as sub lessor
and the Company as sub lessee (hereinafter referred to as the "Sub Lease
Agreement") is amended on the Closing Date to the effect that the
Company's rights and obligations under the Sub Lease Agreement are
identical with and/or not less favourable than the terms set out in
Clinical Responsibility in Uppsala AB's lease agreement with the owner
of the property on which the premises are located. The owner of the
premises has approved the sub lease in accordance with the Sub Lease
Agreement.
7.20.6 Except for charges for utility services the Properties are not subject
to any other outgoings than those set out in the Lease Agreements and
sums due under the Lease Agreements and payments for utility services
have bean made to date.
7.20.7 To the best knowledge of the Majority Vendors, there is no outstanding
order, notice or other requirement of any local or other authority
affecting the Properties or involving expenditure in compliance with it,
nor any circumstances which may result in any such order or notice being
made or served.
7.20.8 To the best knowledge of the Majority Vendors, the Company has complied
in all material respects with all laws, regulations, restrictions,
covenants and obligations (including all covenants binding the Company
contained in the Lease Agreements) relating to the Properties, the
Company has not received any notice or allegation of any breach of such
laws, regulations, restrictions, covenants or obligations from any
person and there are no circumstances likely to give rise to the service
of any such notice or allegation.
7.21 Environment, Health and Safety
7.21.1 To the best knowledge of the Majority Vendors, the Properties have been
used and the Company's business has been conducted at all times in
compliance with Environmental Laws and Health and Safety Laws.
7.21.2 To the best knowledge of the Majority Vendors, no material work,
repairs, remedy, construction, or capital expenditure is or may be
required under any Environmental Laws and/or Health and Safety Laws or
in order to carry on lawfully the Company's business.
7.21.3 To the best knowledge of the Majority Vendors all Permits have been
obtained and are in full force and effect and their terms and conditions
have been complied with.
<PAGE>
20(28)
7.21.4 To the best knowledge of the Majority Vendors, no circumstance exists
which may or is liable to result to the detriment of the Company in
modification, suspension, or revocation of any Permit or may or is
likely to result in any such Permit not being extended, renewed, granted
or (where necessary) transferred.
7.21.5 To the best knowledge of the Majority Vendors, no hazardous matter is or
has been generated, used, kept, treated, transported, spilled,
deposited, disposed of, discharged, emitted or otherwise dealt with or
managed at, on, under or from any of the Properties.
7.21.6 To the best knowledge of the Majority Vendors, the Company has not
received any notice, claim, demand or other communication alleging any
actual or potential breach of Environmental Laws or Health and Safety
Laws from any applicable authority or individual and the Majority
Vendors are not aware of any circumstances that might reasonably be
expected to give rise to the service of any such notice, claim, demand
or communication.
7.22 Insolvency
The Company has not stopped payment of its debt (sw; "betalningsin-
stallelse"), has not entered into any scheme of arrangement or voluntary
arrangement with any of its creditors except for the settlement of the
Claims in accordance with this Agreement; then is no pending application
for bankruptcy or winding-up of the Company and there is no distress,
execution or other process levied on any of the Company's assets.
8 REPRESENTATIONS AND WARRANTIES BY THE PURCHASER
8.1 At the next annual general shareholders meeting of the Company, the
Purchaser undertakes to grant the Directors who have retired during
1999, discharge from liability for their administration until the
Closing Date (or the earlier date of retirement), however, subject that
the auditor's reports for the relevant periods do not recommend against
such discharge.
8.2 The Purchaser is duly organised and existing under the laws of the
United Kingdom and is in compliance with its articles of association.
8.3 The Purchaser has obtained all necessary corporate and other consents
and approvals in relation to the performance of this Agreement and,
accordingly, has full power to enter into and perform this Agreement,
which constitutes (or will when executed constitute) binding obligations
on the Purchaser in accordance with its terms.
8.4 The Purchaser is acquiring the Shares for its own account and has no
present
<PAGE>
21(28)
intention of disposing of same.
9 INDEMNIFICATION
9.1 In the event of a deviation from and/or a breach of any of the
Warranties, the Majority Vendors shall severally and not jointly pay to
the Purchaser on a pro rata basis to each Majority Vendors consideration
in accordance with clause 5, the aggregate of:
9.1.1 the full amount by which the value of any asset or contract of the
Company (including any asset or contract warranted to exist which does
not exist) is or becomes less than it would have been if the Warranties
had not been breached or untrue or misleading;
9.1.2 an amount equal to any other loss or liability suffered or incurred by
the Purchaser and/or the Company as a result of any Warranty being
breached or untrue or misleading; and
9.1.3 all costs, expenses and disbursements incurred by the Purchaser and/or
the Company as a result of any Warranty being breached or untrue or
misleading.
9.1.4 Irrespective of the above in sub-clause 9.1, the Majority Vendor's
aggregate liability due to a deviation from and/or breach of the
Warranty in sub-clause 7.12.2 shall be limited to SEK three million
nine hunderd thousand (3,900,000).
9.2 With respect to an indemnity to be paid pursuant to sub-clause 9.1
hereof:
9.2.1 No amount shall be payable unless the aggregate of compensation under
the Warranties exceed SEK 800,000 but upon exceeding such amount, the
entire amount of the claims from the first SEK shall be payable. This
does not apply to any indemnity to be paid pursuant to sub-clause 9.1
hereof in case of a deviation from and/or a breach of any of the
Warranties in sub-clauses 7.6, 7.12.2, 7.16.4 and 7.18, which shall be
indemnified from the first SEK;
9.2.2 The indemnity to be paid by each Majority Vendor (exclusive of any legal
fees or court costs) shall not exceed the lower sum of
(i) SEK twenty nine million three hundred and seventy two thousand
(29,372,000) distributed between each of the Majority vendors
on a pro rata basis to each Majority Vendor's consideration in
accordance with clause 5; or
(ii) if the Purchaser is quoted on a stock exchange when a claim is
made:
<PAGE>
22(28)
Value I; or
(iii) if the Purchaser is not quoted on a stock exchange when a claim
is made: Value II.
For avoidance of doubt it should he clarified that each Majority
Vendor's indemnity shall be limited to each Majority Vendor's portion of
the consideration in accordance with clause 5.
9.3 No claim may be brought by the Purchaser against the Majority Vendors
unless notice in writing of any such claim, accompanied by reasonable
particulars thereof specifying the nature of the breach giving rise to
the claim and, so far as practicable, the amount claimed in respect
thereof, has been given to the Majority Vendors not later than twelve
(12) months after the Closing Date, and, in the case of a claim relating
to Warranties of a tax nature, not later than ninety (90) days from the
date the Taxes have been finally determined by the relevant tax
authority or tax court. The Purchaser is under no obligation to bring
claims under the Warranties against the Majority Vendors at any time
before the expiry of the twelve month period.
9.4 A breach of this Agreement which is capable of remedy shall not entitle
the Purchaser to compensation unless the Majority Vendors are given
written notice of such breach and such breach is not fully remedied
within sixty (60)days after the date on which such notice is served on
the Majority Vendors.
9.5 If the Majority Vendors shall pay an amount to the Purchaser (or shall
procure the payment of an amount to the Purchaser) in respect of a
deviation from and/or a breach of a Warranty and the Purchaser or the
Company subsequently recovers or becomes entitled to recover (whether by
way of payment, discount, credit, set of, counterclaim or otherwise)
from a third party (including any taxation authority) a sum which is
referable to that breach, the Purchaser shall notify the Majority
Vendors and, if so directed by them, the Purchaser shall procure that
the Company shall take all necessary reasonable steps to enforce such
recovery and the Purchaser shall forthwith repay to the Majority Vendors
so much of the amount so paid to the Purchaser as shall not exceed the
sum recovered from the third party, less all reasonable costs charges
and expenses incurred by the Purchaser or the Company (as the case may
be) in obtaining that payment and in recovering that sum from the third
party. If no recovery is made, the Majority Vendors shall reimburse the
Purchaser or the Company (as the case may be) all reasonable costs,
charges and expenses incurred in seeking to obtain recovery.
9.6 Any liability of the Majority Vendors under this Agreement shall be
computed after taking into account and giving credit for any
corresponding tax saving before the expiry of the fiscal year 2002.
However, such a tax
<PAGE>
23(28)
saving shall only be credited if the tax losses referred to in
sub-clause 7.12.2 have been fully utilised before the expiry of the
fiscal year 2002. If any provision (whether for taxation or any other
matter) in the Accounts or the Balance Sheet shall prove to be an
over-provision, the amount over-provided shall be set off against the
liability (if any) of the Major Vendors under this Agreement.
10 FURTHER ASSURANCE
10.1 The Majority Vendors shall, from time to time on being required to do so
by the Purchaser, promptly and at the cost and expense of the Majority
Vendors do or procure the doing of all such acts and/or execute or
procure the execution of all such documents in a form satisfactory to
the Purchaser as the Purchaser may reasonably consider necessary for
giving full effect to this Agreement (or to such parts of it as remain
operative after termination) and securing to the Purchaser the full
benefit of the rights, powers and remedies conferred upon the Purchaser
in this Agreement.
11 CONFIDENTIALITY; ANNOUNCEMENTS
11.1 The Majority Vendors severally undertake with the Purchaser, and the
Purchaser undertakes with the Majority Vendors, to keep confidential
(except as expressly provided in this Agreement) at all times after the
date of this Agreement, and not directly or indirectly reveal, disclose
or use for his or its own or any other purposes, any confidential
information received or obtained as a result of entering into or
performing, or supplied by or on behalf of a party in the negotiations
leading to, this Agreement and which relates to:
11.1.1 the negotiations relating to this Agreement;
11.1.2 the subject matter and/or provisions of this Agreement; or
11.1.3 (in the Majority Vendors' case) the Purchaser or (in the Purchaser's
case) the Majority Vendors.
11.2 The Prohibition in sub-clause 11.1 does not apply if:
11.2.1 the information was in the public domain before it was furnished to the
relevant party or, after it was furnished to that party, entered the
public domain otherwise than as a result of (i) a breach by that party
of this clause or (ii) a breach of a confidentiality obligation by the
discloser, where the breach was known to that party; or
<PAGE>
24(28)
11.2.2 disclosure as necessary in order to comply with applicable legislation,
regulatory requirements or to obtain tax or other clearances or consents
from any relevant taxation authority; or
provided that any such information disclosable pursuant to sub-clause
11.2.2 shall be disclosed (unless such consultation is prohibited by
applicable law or regulatory requirements) only after consultation with
the Purchaser or the Majority Vendors (as the case may be).
11.3 No party shall make any press release or other public announcement in
connection with any of the transactions contemplated by this Agreement
except:
11.3.1 an announcement in the agreed form or in any other form agreed by the
Purchaser and the Majority Vendors; or
11.3.2 any announcement required by any applicable law or regulatory
requirements to which the party is subject (including the London Stock
Exchange Limited).
12 ASSIGNMENT
12.1 The Purchaser is permitted to assign the benefit of, and any of its
rights under, this Agreement without restrictions.
12.2 None of the Majority Vendors may assign, transfer, charge or deal in any
way with the benefit of, or any of their respective rights under or
interest in, this Agreement except in accordance with a prior written
waiver given by the Purchaser.
13 NOTICES
13.1 Any communication to be given in connection with the matters
contemplated by this Agreement shall be in writing and shall either be
delivered by hand or sent by registered mail (sw: "rekommenderat brev")
or facsimile transmission. Delivery by courier shall be regarded as
delivery by hand. Such communication shall be sent to the address or the
facsimile number of the relevant party set out below or to such other
address or facsimile number as may previously have been communicated to
the sending party in accordance with this clause.
<PAGE>
25(28)
Majority Vendors Purchaser
To the addresses set To the company secretary of the Purchaser
out opposite each Majority
Vendors name in FAX: +44 1223 43 53 01
Appendix 13
Provided further that the Purchaser may serve any such communication on
the Majority Vendors by service on any of the Majority Vendor.
13.2 A communication shall be deemed to have been served:
13.2.1 if delivered by hand at the address referred to above at the time of
delivery;
13.2.2 if sent by registered mail to the address referred to in that
sub-clause, at the expiration of two days after the time of posting; and
13.2.3 if sent by facsimile to the number referred to in that sub-clause, at
the time of completion of transmission by the sender.
13.3 In proving service of the communication, it shall be sufficient to show
that delivery by hand was made or that the envelope containing the
communication was properly addressed and posted as a registered mail or
that the facsimile was dispatched and a confirmatory transmission report
received.
13.4 A Party may notify the other Parties of a change to its name, address or
facsimile number for the purposes of sub-clause 13.1 provided that such
notification shall only be effective on the date specified in the
notification as the date on which the change is to take place or if no
date is specified or the date specified is less than five days after the
date on which notice is deemed to have been served. the date falling
five days after notice of any such change as deemed to have been given.
14 AMENDMENTS
Amendments to this Agreement must be in writing and signed by the
Parties to be binding.
15 HEADINGS
The division of the Agreement into different clauses and the inclusion
of headings will not affect the interpretation of this Agreement.
<PAGE>
26(28)
16 ANNULMENT OF PROVISIONS
If any provision in this Agreement or part thereof is declared null and
void, the Agreement as a whole will not be annulled as long as the
Agreement remains significant without the annulled provision or part. If
an annulment significantly affects one party's benefits from or
performance based on this Agreement, a party that considers itself
disadvantaged is entitled to initiate negotiations with the other
parties with the aim of restoring the balance of the Agreement through
reasonable modification of other provisions in the Agreement.
17 MISCELLANEOUS
17.1 By the signing of this Agreement each Majority Vendor confirms his
adherence to the Gemini Shareholders Agreement and that they shall vote
in any meeting of the Purchaser's shareholders in accordance with the
current majority of shareholders in the Purchaser. Furthermore, each
Majority Vendor confirms that the Eurona Shareholders' Agreement entered
into between Per Lindstrom, Torbjorn Schroder, Lars Frodell, Goran
Agerberg, Bismuth Investments Ltd and Health Cap KB dated 19 March 1997
is immediately terminated without retaining rights for any of the
parties thereto.
17.2 Should the Purchaser not acquire all the Shares on the Closing Date and
the Purchaser notwithstanding this chooses to refrain from using his
right to cancel this Agreement, the Purchaser will be unable to hold an
extraordinary general meeting immediately after Closing and appoint a
new board of director in the Company. In such case each Majority Vendor
shall use his best endeavours to see to it that the board directors
appointed by him remain as board members in the Company until the
Purchaser are able to appoint a new board of directors.
17.3 Upon Closing of this Agreement, the Company will give a general power of
attorney to officers of the Purchaser. Under the circumstances set out
in the first sentence a sub-clause 17.2, each Majority Vendor shall use
his best endeavours to see to it that the board directors appointed by
him do not participate in any decisions or act on behalf of the Company
without the prior consent of the Purchaser or the holders of the general
power of attorney. Each Majority Vendor shall also use his best
endeavours to see to it that the board directors appointed by him
participate in decisions and act on behalf of the Company in accordance
with the instructions of the Purchaser and the holders of the general
power of attorney. The foregoing shall under no circumstances result in
a board director appointed by a Majority Vendor not being able to fulfil
his fiduciary obligations against the Company or result in his
participation in decisions and acts on behalf of the Company in conflict
with the Swedish companies Act (Sw: Aktiebolagslagen)
<PAGE>
27(28)
Upon request of a Majority Vendor, the Purchaser shall furnish an
indemnity to the board directors appointed by the Majority Vendor for
the damages that may occur from following instructions from the
Purchaser and the holders of the general power of attorney.
18 CONDITION PRECEDENT
This Agreement as conditional upon
(i) each Majority Vendor fulfilling his obligations according to
clause 6;
(ii) the purchase by the Purchaser of the Minority Shares and all the
benefits of the Minority Claims is completed on the Closing
Date;
(iii) the Company on the Closing Date having entered into the
Agreement on Purchase and Licensing of Inventions; and
(iv) the Purchaser and the shareholders of Clinical Responsibility in
Uppsala AB having entered into an option agreement giving the
Purchaser the right but not the obligation to purchase all the
shares in Clinical Responsibility in Uppsala AB (including any
right to subscribe for, acquire or otherwise receive shares) for
a purchase price equal to the par value of the shares. The
option shall be exercised within (twelve) 12 months from the
Closing Date.
If any of these conditions is not satisfied, the Purchaser is entitled
to cancel this Agreement in relation to all of the Majority Vendors,
without any liability of any kind for the Purchaser.
19 GOVERNING LAW AND ARBITRATION PROCEDURES
19.1 This Agreement is governed by the substantive laws of Sweden.
19.2 Any dispute, controversy or claim arising out of or in connection with
this Agreement, or the breach, termination or invalidity thereof, shall
be finally settled by arbitration in accordance with the Rules of the
Arbitration Institute of the Stockholm Chamber of Commerce.
The arbitral tribunal shall be composed of three (3) arbitrators
appointed by the Stockholm Chamber of Commerce.
The place of arbitration shall be Stockholm.
The language to be used in the arbitral proceedings shall be English.
---------------------------------
<PAGE>
28(28)
The parties have executed this Agreement with Appendices 1 - 13 as of this date
in six (6) original copies, of which each of the parties have taken one each.
December 12, 1999 [ILLEGIBLE] Dec 17 99
------------------------- ---------------------------
(Place and date) (Place and date)
BISMUTH INVESTMENTS
GEMINI HOLDINGS PLC (GIBRALTAR) LTD
/s/ [ILLEGIBLE] /s/ [ILLEGIBLE]
------------------------- ---------------------------
[ILLEGIBLE] Dec 17, 99
---------------------------
(Place and date)
HEALTHCAP KB
/s/ Eugen Steiner
---------------------------
Eugen Steiner
[ILLEGIBLE] Dec 17, 99
---------------------------
(Place and date)
SETRACO AB
/s/ [ILLEGIBLE]
---------------------------
Stockholm Dec 17, 1999
---------------------------
(Place and date)
/s/ Per Lindstrom
---------------------------
Per Lindstrom
Stockholm Dec 17, 1999
---------------------------
(Place and date)
/s/ Torbjorn Schroder
---------------------------
Torbjorn Schroder
