<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
/x/ Quarterly Report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended September 30, 1996, or
/ / Transition Report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from _____________ to _____________.
Commission File No.: 0-25978
THERAPEUTIC ANTIBODIES INC.
--------------------------
(Exact Name of Registrant as Specified in Its Charter)
Delaware 62-1212485
-------- ----------
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
1500 21st Avenue South, Suite 310
Nashville, Tennessee 37212
-------------------- -----
(Address of Principal Executive Offices) (Zip Code)
(615) 327-1027
--------------
(Registrant's Telephone Number,
Including Area Code)
Not Applicable
----------------------------------------------------
(Former Name, Former Address and Former Fiscal Year,
if Changed Since Last Report)
Indicate by check mark whether the registrant: (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
YES X NO
---- ----
As of November 14, 1996, 21,690,359 shares of the registrant's Common
Stock were outstanding.
<PAGE> 2
PART I
FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
THERAPEUTIC ANTIBODIES INC. AND SUBSIDIARIES
(A Development Stage Company)
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
<TABLE>
<CAPTION>
ASSETS
September 30, December 31,
1996 1995
------------- ------------
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 24,380,702 $ 3,397,082
Trade receivables 229,269 109,435
Value added tax receivable 228,578 162,655
Inventories 195,037 393,094
Other current assets 318,919 338,760
------------ ------------
Total current assets 25,352,505 4,401,026
Property and equipment, net 11,412,642 10,119,160
Patent costs, net 460,810 342,246
Other assets, net 258,170 294,667
------------ ------------
Total assets $ 37,484,127 $ 15,157,099
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses $ 1,418,168 $ 1,506,124
Accrued interest 217,506 177,493
Current portion of notes payable 1,856,125 2,478,858
------------ ------------
Total current liabilities 3,491,799 4,162,475
Notes payable, net of current portion 8,151,114 9,595,420
Deferred revenue 322,781 349,425
Other liabilities 156,500 155,300
------------ ------------
Total liabilities 12,122,194 14,262,620
------------ ------------
Stockholders' equity:
Common stock - par value $.001 per share; 30,000,000 shares authorized; 21,522,359 -
September 30, 1996 and 16,556,603 - December 31, 1995 issued and outstanding 21,522 16,557
Common stock subscribed 0 0
Additional paid-in capital 65,992,066 30,879,879
Deficit accumulated during the development stage (1984-1996) (40,508,805) (29,818,548)
Cumulative translation adjustment (142,850) (183,409)
------------ ------------
Total stockholders' equity 25,361,933 894,479
------------ ------------
Total liabilities and stockholders' equity $ 37,484,127 $ 15,157,099
============ ============
</TABLE>
The accompanying notes are an integral part of the financial statements.
2
<PAGE> 3
THERAPEUTIC ANTIBODIES INC. AND SUBSIDIARIES
(A Development Stage Company)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
For the Cumulative
For the Nine Months Ended For the Three Months Ended Development Stage
September 30, September 30, from August 10, 1984
------------------------------ ------------------------------ (inception) Through
1996 1995 1996 1995 September 30, 1996
------------- ------------ ------------ ------------ --------------------
<S> <C> <C> <C> <C> <C>
Revenues:
Sales and contract revenue $ 547,965 $ 438,178 $ 324,970 $ 226,912 $ 2,345,587
Interest income 326,818 74,228 293,909 18,062 755,514
Grant income 107,966 29,753 10,113 9,834 516,381
Value-added tax and insurance recoveries - - - - 577,170
Other 231,973 106,913 194,870 100,000 460,516
------------- ------------ ------------ ------------ -------------
1,214,722 649,072 823,862 354,808 4,655,168
------------- ------------ ------------ ------------ -------------
Expenses:
Cost of sales and contract revenue 266,137 32,397 209,955 14,626 365,565
Research and development 6,836,689 4,215,184 2,665,422 1,712,553 28,359,488
General and administrative 1,645,098 1,226,414 697,219 509,778 8,177,015
Marketing and distribution 245,245 381,489 75,912 146,883 1,245,938
Depreciation and amortization 1,075,593 707,234 373,810 321,091 3,555,425
Interest 1,034,620 549,572 427,082 263,315 2,561,909
Debt conversion expense 801,597 - - - 801,597
Other - 2,866 - 2,866 97,036
------------- ------------ ------------ ------------ -------------
11,904,979 7,115,156 4,449,400 2,971,112 45,163,973
------------- ------------ ------------ ------------ -------------
Net loss $ (10,690,257) $ (6,466,084) $ (3,625,538) $ (2,616,304) $ (40,508,805)
============= ============ ============ ============ =============
Net loss per share $ (0.60) (0.43) (0.19) (0.16) $ (4.70)
============= ============ ============ ============ =============
Weighted average shares used in
computing net loss per share 17,782,690 14,936,563 19,344,431 16,018,103 8,626,653
============= ============ ============ ============ =============
</TABLE>
The accompanying notes are an integral part of the financial statements.
3
<PAGE> 4
THERAPEUTIC ANTIBODIES INC. AND SUBSIDIARIES
(A Development Stage Company)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
For the Cumulative
For the Nine Months Ended Development Stage
September 30, from August 10, 1984
------------------------------ (inception) Through
1996 1995 September 30, 1996
------------- ------------ --------------------
<S> <C> <C> <C>
Cash flows from operating activities:
Net loss $ (10,690,257) $ (6,466,084) $ (40,508,805)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation and amortization 1,075,593 707,234 3,555,425
Debt conversion expense 801,597 801,597
Warrant expense - - 147,050
Changes in:
Accounts receivable (185,757) 914,774 (208,476)
Inventories 198,057 (191,419) (80,863)
Other current assets 19,841 (84,806) (320,069)
Accounts payable and accrued expenses (87,958) (746,019) 1,159,285
Accrued interest 105,116 30,132 919,630
Other - (8,136) 190,812
------------- ------------ -------------
Net cash used in operating activities (8,763,768) (5,844,324) (34,344,414)
------------- ------------ -------------
Cash flows from investing activities:
(Increase) in restricted cash - 632,550 -
Purchase of property and equipment (2,210,039) (1,640,195) (11,436,085)
Patent costs (124,980) (56,300) (477,766)
Cash received from PAL acquisition - - 124,496
Other (44,992) 370,263 (99,738)
------------- ------------ -------------
Net cash used in investing activities (2,380,011) (693,682) (11,889,093)
------------- ------------ -------------
Cash flows from financing activities:
Proceeds from notes payable, net 6,292,438 3,062,476 19,565,599
Payments on notes payable (5,923,397) (894,457) (8,832,519)
Proceeds from line of credit - 500,000 3,186,010
Payments on line of credit (1,018,580) (995,695) (3,208,779)
Proceeds from convertible debt, net 1,081,732 2,807,208 5,304,232
Proceeds from issuance of stock, net 31,750,451 2,844,750 55,077,681
Other - - (116,154)
------------- ------------ -------------
Net cash from financing activities 32,182,644 7,324,282 70,976,070
------------- ------------ -------------
Effect of foreign currency translation on cash (55,245) (245,791) (361,861)
------------- ------------ -------------
Net increase in cash and cash equivalents 20,983,620 540,485 24,380,702
Cash and cash equivalents at beginning of period 3,397,082 593,154 -
------------- ------------ -------------
Cash and cash equivalents at end of period $ 24,380,702 $ 1,133,639 $ 24,380,702
============= ============ =============
</TABLE>
The accompanying notes are an integral part of the financial statements.
4
<PAGE> 5
THERAPEUTIC ANTIBODIES INC. AND SUBSIDIARIES
(A Development Stage Company)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
September 30, 1996
NOTE 1 - BASIS OF PRESENTATION
The accompanying third quarter financial statements are unaudited, but include
all adjustments (consisting of normal recurring accruals) which are, in the
opinion of management, necessary for a fair statement of the results for such
periods.
The unaudited third quarter consolidated financial statements should be read in
conjunction with the audited December 31, 1995, consolidated financial
statements of the Company.
The results of operations for the interim periods are not necessarily indicative
of the results to be expected for the full year ending December 31, 1996.
NOTE 2 - FINANCING ACTIVITIES
On July 23, 1996, the Company completed an initial public offering of its Common
Stock on the London Stock Exchange ("the UK Placement"). The Company issued
4,190,477 shares of Common Stock at (pound)5.25 ($8.14) per share raising
(pound)22,000,000 ($34,100,000). The offering raised net proceeds of
approximately $30,360,000, which proceeds have been used to repay certain
indebtedness and to fund working capital, operations and capital expenditures.
In June 1996, the Company completed a private placement of $5,000,000 principal
amount of the Company's 15% Subordinated Promissory Notes due May 1, 1997, (the
"15% Notes"), of which $4,250,000 were purchased for cash and $750,000 were
issued upon conversion of other indebtedness. Warrants to purchase 360,000
shares of the Company's Common Stock at $8.00 per share were issued in
connection with the 15% Notes. On August 24, 1996, the Company redeemed, for
cash, $4,250,000 principal amount of the 15% Notes and accrued interest thereon.
In April 1996, Martin S. Brown loaned $1,000,000 to the Company in exchange for
a short-term unsecured note bearing interest at an annual rate of 12%. In May
1996, Mr. Brown converted $750,000 principal amount of the 12% note into an
equal principal amount of the Company's 15% Notes. The $250,000 principal
balance on the 12% note was payable in full on August 18, 1996. Mr. Brown agreed
to extend both of these debt obligations through the end of 1998.
During the nine months ended September 30, 1996, the Company's subsidiary, TAb
Australia, Pty. Ltd. borrowed an additional $915,000 on its collateralized loan
from the South Australian Minister for Primary Industries bearing interest at an
annual rate of 11%. As of September 30, 1996, the Company had outstanding draws
on this loan totaling $1,175,000.
In September 1996, the Company repaid a $500,000 principal amount promissory
note due to Lakewood Partners along with accrued interest to date.
5
<PAGE> 6
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The following discussion and analysis of the financial condition and
results of operations of the Company should be read in conjunction with the
financial statements and notes thereto. This discussion and analysis contains
both historical and forward looking information. The forward looking statements
are made pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. Forward looking statements may be significantly
impacted by certain risks and uncertainties described herein.
GENERAL
Since its inception, Therapeutic Antibodies Inc. ("TAb" or the
"Company") has been in the development stage, devoting its efforts and resources
to drug discovery and development programs relating to the development of highly
purified, polyclonal antibodies for the treatment of disease. Since inception
the Company's revenues have been from contract agreements with corporate
partners, product sales, grant income, interest income, and insurance and value
added tax recoveries. Net losses have been incurred each year since its
inception and the Company does not expect to realize positive cash flow from
operations during the next year due to continued spending on research, product
development and increasing requirements for process development, preclinical and
clinical testing, regulatory affairs, initial manufacturing activities and
administration. To fund these activities, the Company conducted additional
financings in the first nine months of 1996. See "Liquidity and Capital
Resources."
The Company conducts its operations from its headquarters in the United
States and through subsidiaries located in the United Kingdom, Australia and New
Zealand. International operations are primarily located in the United Kingdom.
Phase IIa clinical trials of CytoTAb(TM) for Sepsis have recently been
completed and the Company anticipates that the results of this study will be
released soon after this report is filed.
RESULTS OF OPERATIONS
Three Months Ended September 30, 1996 Compared to Three Months Ended September
30, 1995
Revenues for the third quarter ended September 30, 1996, increased by
132% to $824,000 from $355,000 for the third quarter ended September 30, 1995.
The increase in sales and contract revenue of 43% to $324,000 from $226,000 is
due to $173,000 in revenue from the Company's contractual agreement related to
the production of EchiTAb(TM). Interest income increased in the third quarter to
$294,000 from $18,000 due to additional cash holdings from the proceeds of the
initial public offering ("the UK Placement"). The proceeds were denominated in
British pounds, a portion of which was converted to U.S. dollars and the
remainder left in pounds. Therefore, foreign currency gains attributable to the
favorable exchange rates contributed to an increase in other income of 95% to
$195,000 from $100,000 for the third quarter ended September 30, 1996.
6
<PAGE> 7
Total expenses increased in the third quarter of 1996 by 50% to
$4,449,000 from $2,971,000 in the third quarter of 1995. The Company recorded
$165,000 as cost of sales and contract revenue during the third quarter of 1996
in relation to the Company's Nigerian EchiTAb(TM) contract, which resulted in a
total increase in cost of sales and contract revenue of 1336% to $210,000 from
$15,000 in third quarter of 1995. Research and development expenses increased in
the third quarter of 1996 by 56% to $2,665,000 from $1,713,000 in the third
quarter of 1995. This is largely a result of the progression to advanced levels
of clinical trials of CytoTAb(TM) for Sepsis and CroTAb(TM) as well as increased
clinical trial activity for DigiTAb(TM) and CytoTAb(TM) for malaria. The
associated clinical and regulatory activities have created the need for
additional personnel and the associated costs as well as additional clinical
product supplies. Management expects that research and development expenses will
continue to increase in the remaining quarter of 1996 as the Company's current
clinical trials progress.
General and administrative expenses increased in the third quarter of
1996 by 37% to $697,000 from $510,000 in the third quarter of 1995. The increase
is attributable to the hiring of new personnel in 1996 and the additional
associated costs required to support the expanding activities of the
subsidiaries.
Marketing and distribution expenses in the third quarter of 1996
decreased by 48% to $76,000 compared to $147,000 in the third quarter of 1995
due to a reduction in personnel and related salary expenses. It is expected that
the marketing department will hire additional personnel during the last quarter
of 1996 and in 1997.
Depreciation and amortization expense in the third quarter of 1996
increased by 16% to $374,000 from $321,000 compared to the third quarter of
1995. This increase is the result of the initial depreciation of the $4,000,000
capital expenditure relating to the expansion of the Welsh production facility
which was placed in service in December 1995.
Interest expense in the third quarter of 1996 increased by 62% to
$427,000 from $263,000 in the third quarter of 1995 as a result of increased
borrowing by the Company to fund working capital and operations, including the
issuance of $5,305,000 principal amount of the Company's 6% Convertible Notes
(the "6% Notes") in the fourth quarter of 1995 and $5,000,000 principal amount
of its 15% Subordinated Promissory Notes (the "15% Notes") in the second quarter
of 1996. The Company repaid $4,250,000 of its 15% Notes from the proceeds of the
UK placement. See "Liquidity and Capital Resources".
Nine Months Ended September 30, 1996 Compared to Nine Months Ended September 30,
1995
TAb's revenues for the first nine months of 1996 increased by 87% to
$1,215,000 from $649,000 for the same period of 1995. During the nine months
ended September 30, 1996, the Company received approximately $100,000 more in
contract revenue over the amount received in the nine months ended September 30,
1995, which increase was attributable primarily to the Company's Nigerian
EchiTAb(TM) contract. Interest income in the nine months ended September 30,
1996, increased 340% to $327,000 from $74,000 due to additional cash holdings
from the proceeds of the UK Placement. Foreign currency gains attributable to
favorable currency exchange rates between the British pound and the US dollar
produced an increase of 117% to $232,000 from $107,000 in other income. Grant
income for the nine months ended September 30, 1995, increased by 263% to
$108,000 from $30,000 in the nine months ended September 30, 1995. In June 1996
the Company received a $79,000 grant from the Economic Development Authority of
the Government of South Australia to assist the Company with the expansion of
its Australian operations.
7
<PAGE> 8
Expenses for the first three quarters of 1996 increased by 67% to
$11,905,000 from $7,115,000 for the same period in 1995. The Company recorded
approximately $165,000 as cost of sales during the third quarter of 1996 in
relation to the EchiTAb(TM) contract. Thus, cost of sales and contract revenue
increased 721% to $266,000 from $32,000 in the third quarter of 1995. Research
and development expenses during the same periods increased by 62% to $6,837,000
from $4,215,000 as a result of increased clinical trial activities for
DigiTAb(TM) and CytoTAb(TM) for malaria as well as the progression through the
more advanced trial phases for CytoTAb(TM) for Sepsis and CroTAb(TM). These
costs are related to manufacturing TAb's products for clinical trials,
conducting clinical trials and ensuring that the necessary quality control and
assurance procedures are in place. The cost of regulatory compliance has also
increased as the Company's products advance through the development stages.
Additionally, the Australian production facility has increased the number of
sheep in its flock at the end of September 30, 1996 compared to September 30,
1995 to meet the need for increased serum requirements for the clinical trials.
General and administrative expenses for the first three quarters of
1996 increased by 34% to $1,645,000 from $1,226,000 for the first three quarters
of 1995. This increase relates primarily to expanded staffing and related
overhead expenses by the expanding foreign subsidiaries.
Marketing and distribution expenses decreased in the first three
quarters of 1996 by 36% to $245,000 from $381,000 in the first three quarters of
1995 due to a reduction in marketing salary expenses. It is expected that the
marketing department will hire additional personnel during the last quarter of
1996 and 1997.
Depreciation and amortization expense in the nine month period ended
September 30, 1996, increased by 52% to $1,076,000 from $707,000 compared to the
nine month period ended September 30, 1995. This increase is the result of the
initial depreciation of the $4,000,000 capital expenditure relating to the
expansion of the Welsh production facility, which was placed in service in
December 1995.
Interest expense in the first three quarters of 1996 increased by 88%
to $1,035,000 from $550,000 in the first three quarters of 1995 due to increased
borrowings by the Company including the issuance of the 6% and 15% Notes. The
Company repaid certain of its debt obligations in the third quarter of 1996 and,
therefore, expects interest expense to decrease during the last quarter of 1996.
In the first quarter of 1996, the Company recorded a one-time debt
conversion expense of $801,597, relating to the conversion of an aggregate of
$2,565,105 of principal and interest on the Company's 6% Notes into shares of
Common Stock, which represents the difference between the stated conversion
price on the debt of $8.00 per share and the actual conversion price of $5.50.
The Company's net loss for the first nine months of 1996, was
$10,690,000 compared to a net loss of $6,466,000 for the first nine months of
1995. This increase was due to the one-time debt conversion expense and the
other increased expenses described above.
8
<PAGE> 9
LIQUIDITY AND CAPITAL RESOURCES
Since its inception, TAb has been in the development stage, devoting
its efforts and resources to drug discovery and development programs. Capital
resources have been used for the establishment and expansion of production
facilities, research and development, clinical testing and to meet TAb's
increased working capital needs in connection with such activities. Management
does not expect revenues from product sales to be a significant source of
funding until additional products receive regulatory approval. Future capital
requirements will depend on numerous factors, including the progress of its
research programs and clinical trials, the development of regulatory
submissions, the commercial viability of the Company's products, the development
of sales, distribution and marketing capabilities, and the terms of any new
licensing arrangements. Financing for the Company's operating and capital
requirements historically has been provided by the sale of equity, convertible
debt and through other financings.
At September 30, 1996, the Company had cash and cash equivalents
totaling $24,381,000. The Company's net cash used in operating activities during
the nine months ended September 30, 1996, totaled $8,764,000, an increase of 50%
from the nine months ended September 30, 1995. Capital expenditures of
$2,210,000 in the first nine months of 1996 related primarily to the expansion
of the Company's production facilities in Australia and Wales. TAb has
accelerated the expansion of its initial production facility in Australia and
has increased the total planned capital expenditures at such facility to
$1,600,000 from the original $750,000. These capital expenditures will be funded
through a loan from the South Australian Minister for Primary Industries
(discussed below).
On July 23, 1996, the Company completed an initial public offering of
4,190,477 shares of its Common Stock on the London Stock Exchange at (pound)5.25
($8.14) per share raising total proceeds of (pound)22,000,000 ($34,100,000). The
offering raised gross and net proceeds of approximately $34,000,000 and
$30,360,000, respectively, of which approximately $4,750,000 was used to repay
the Company's 15% Notes and certain other indebtedness. The remainder of the net
proceeds will be utilized to fund working capital, operations and capital
expenditures.
During the nine months ended September 30, 1996, TAb Australia Pty.
Ltd., the Company's Australian operating subsidiary ("TAb Australia"), made a
$915,000 draw on its collateralized loan from the South Australian Minister for
Primary Industries. Under this loan agreement, TAb Australia may draw up to
$1,580,000 to assist with construction and equipping of buildings at its
Turretfield location in South Australia. In the third quarter of 1996, the South
Australian Minister for Primary Industries agreed to increase this loan from
$1,180,000 to $1,580,000. The loan bears interest at an annual rate of 11%,
payable annually. Principal is to be repaid in ten equal annual installments. As
of September 30, 1996, the Company had outstanding draws of $1,175,000 on this
loan.
In June 1996, the Company completed a private placement of $5,000,000
principal amount of the Company's 15% Subordinated Promissory Notes due May 1,
1997 (the "15% Notes"), of which $4,250,000 were purchased for cash and $750,000
were issued upon conversion of indebtedness. Each $250,000 unit of the 15% Notes
was accompanied by a Stock Purchase Warrant to purchase 18,000 shares of Common
Stock at $8.00 per share. Warrants to purchase 360,000 shares of Common Stock
were issued in connection with the 15% Notes. On August 24, 1996, the Company
redeemed, for cash, $4,250,000 principal amount of the 15% Notes and accrued
interest thereon.
9
<PAGE> 10
In April 1996, Martin S. Brown loaned $1,000,000 to the Company in
exchange for a short-term unsecured note bearing interest at an annual rate of
12%. In May 1996, Mr. Brown converted $750,000 principal of the 12% note into an
equal principal amount of the Company's 15% Notes. The $250,000 principal
balance on the 12% note was payable in full, together with accrued interest, on
August 18, 1996. Mr. Brown has agreed to extend both of these debt obligations
through the end of 1998.
In September 1996, the Company repaid in full the outstanding $500,000
principal amount of a promissory note due to Lakewood Partners along with $3,400
accrued interest thereon.
10
<PAGE> 11
PART II
OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
<TABLE>
<CAPTION>
(a) Exhibits
Exhibit
Number Description of Exhibits
------ -----------------------
<C> <S>
10.1 Placing Agreement, dated July 15, 1996, between the
Company, Polyclonal Antibodies Limited, TAb Wales
Limited, TAb London Limited, the Directors named in
the agreement and
The British Linen Bank Limited
10.2 Agistment Agreement, dated August 29, 1996, between Martindale Holdings Pty Ltd. and TAb
Australia Pty Ltd.
11.1 Statement re: computation of per share earnings
27 Financial Data Schedule (SEC use only)
(b) Reports on Form 8-K.
</TABLE>
The Company has not filed any Current Reports on Form 8-K during the
third quarter of 1996.
11
<PAGE> 12
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be filed on its behalf by the
undersigned thereunto duly authorized.
Date: November 14, 1996 /s/ Martin S. Brown
-------------------------------
Martin S. Brown
Chairman of the Board
Chief Executive Officer
(Principal Executive Officer)
Date: November 14, 1996 /s/ Robert D. Brown
------------------------------
Robert D. Brown, CPA
Vice President Accounting & Controller
(Principal Accounting Officer)
12
<PAGE> 13
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Description of Exhibits Page
- ------ ----------------------- ----
<S> <C>
10.1 -- Placing Agreement, dated July 15, 1996, among the Company, Polyclonal Antibodies
Limited, TAb Wales Limited, TAb London Limited, the Directors named in the
agreement and The British Linen Bank Limited
10.2 Agistment Agreement, dated August 29, 1996, between Martindale Holdings Pty Ltd. and TAb
Australia Pty Ltd.
11.1 -- Statement re: computation of per share earnings
27 -- Financial Data Schedule (SEC use only)
</TABLE>
13
<PAGE> 1
CONFORMED COPY
15 JULY 1996
THERAPEUTIC ANTIBODIES INC.
POLYCLONAL ANTIBODIES LIMITED
TAB WALES LIMITED
TAB LONDON LIMITED
THE DIRECTORS
NAMED IN THIS AGREEMENT
THE BRITISH LINEN BANK LIMITED
------------------------------
AGREEMENT
RELATING TO THE PLACING
OF SHARES OF COMMON STOCK IN
THERAPEUTIC ANTIBODIES INC.
------------------------------
FRESHFIELDS
<PAGE> 2
CONTENTS
<TABLE>
<CAPTION>
CLAUSE PAGE
<S> <C>
1. DEFINITIONS AND INTERPRETATION ..................................... 2
2. CONDITIONS ......................................................... 5
3. APPOINTMENT OF BANK AS AGENT ....................................... 6
4. ALLOTMENT OF SHARES ............................................... 6
5. APPOINTMENT OF SPONSOR AND APPLICATION FOR ADMISSION ............... 7
6. DELIVERY AND REGISTRATION OF DOCUMENTS ............................. 7
7. THE PLACING ..................................................... 11
8. REGISTRATION ..................................................... 12
9. PAYMENT AND SETTLEMENT ........................................... 12
10. COMMISSIONS, FEES, COSTS AND EXPENSES ........................... 13
11. REPRESENTATIONS, WARRANTIES, UNDERTAKINGS AND CONFIRMATIONS ...... 15
12. WAIVER OF CLAIM AND INDEMNITY ................................... 17
13. REPRESENTATIONS, WARRANTIES, UNDERTAKINGS AND INDEMNITIES:
GENERAL PROVISIONS ............................................. 20
14. WITHHOLDING AND GROSSING-UP ..................................... 21
15. PUBLICITY ....................................................... 22
16. TERMINATION ..................................................... 23
17. EFFECT OF TERMINATION ........................................... 24
18. TIME OF THE ESSENCE ............................................. 24
19. NOTICES ......................................................... 24
20. GOVERNING LAW AND JURISDICTION ................................... 26
21. COUNTERPARTS ..................................................... 26
SCHEDULE 1 ............................................................... 27
</TABLE>
<PAGE> 3
<TABLE>
<S> <C>
Directors ....................................................... 27
SCHEDULE 2 ............................................................... 28
Documents ....................................................... 28
SCHEDULE 3 ............................................................... 29
Representations, warranties and undertakings ..................... 29
</TABLE>
<PAGE> 4
THIS AGREEMENT is made on 15 July 1996
BETWEEN
THERAPEUTIC ANTIBODIES INC. whose registered office is Corporation Trust Center,
1209 Orange Street, Wilmington, Delaware 19801, United States of America (the
COMPANY)
POLYCLONAL ANTIBODIES LIMITED whose registered office is at Blaenwaun Farm,
Ffrostrasol, Llandysul, Ceredigion SA44 5JT, Wales (PAL)
TAB WALES LIMITED whose registered office is at Blaenwaun Farm, Ffostrasol,
Llandysul, Ceredigion SA44 5JT, Wales (TAB WALES)
TAB LONDON LIMITED whose registered office is at Blaenwaun Farm, Ffostrasol,
Llandysul, Ceredigion SA44 5JT, Wales (TAB LONDON)
THE PERSONS whose names are set out in Part 1 of Schedule 1 (the EXECUTIVE
DIRECTORS)
THE PERSONS whose names are set out in Part 2 of Schedule 1 (the NON-EXECUTIVE
DIRECTORS)
THE BRITISH LINEN BANK LIMITED (incorporated in Scotland) whose registered
office is at 4 Melville Street, Edinburgh EH3 7NZ (BLB).
WHEREAS
(A) The Company was incorporated in the State of Delaware, USA with file
number 10305500 on 10 August 1984 as a corporation under the laws of the State
of Delaware, USA.
(B) The Company is the beneficial owner of the entire issued share capital
of each of PAL, TAb Wales and TAb London.
(C) At the date of this Agreement, the authorised share capital of the
Company is US$30,000 divided into 30,000,000 shares of common stock having a
par value of US$0.001 each (SHARES), of which 21,407,979 are in issue at the
date of this Agreement and are fully paid or credited as fully paid.
(D) The documents listed in Schedule 2 have been prepared in connection
with the Placing (as defined in Clause 1), such documents having been
initialled solely for the purpose of identification by Freshfields and Maxwell
Batley. References in this Agreement to such documents are to such versions
with such amendments as may be agreed by or on behalf of the Company and BLB
(for the purpose of its obligations under this Agreement).
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(E) The Company has applied through the Brokers (as defined in Clause 1.1)
to the London Stock Exchange for the Shares in issue at the date of this
Agreement and to be issued pursuant to the Placing (as defined in Clause 1.1)
to be admitted to the Official List.
(F) On the terms and subject to the conditions of, and in reliance upon
the representations, warranties and undertakings contained in this Agreement,
BLB has agreed, as agent for the Company, to arrange subscribers to subscribe
at the Placing Price (as defined in Clause 1.1) for 4,190,477 new Shares (the
PLACING SHARES) and to subscribe (or procure that its nominee shall subscribe)
at the Placing Price for any of the Placing Shares in respect of which
subscribers are not so arranged.
NOW IT IS HEREBY AGREED as follows:
DEFINITIONS AND INTERPRETATION
1.1 In this Agreement, including the Recitals, the following expressions
shall have the meanings set out below:
ADMISSION means the admission of all of the Shares, both those in issue and
those proposed to be issued pursuant to the Placing, to the Official List of
the London Stock Exchange becoming effective in accordance with the Listing
Rules;
ADVERSE INTEREST means any claim, equity, lien, charge or trust, any other
right or interest of any third party and any other encumbrance of any kind;
BROKERS means Panmure Gordon & Co. Limited of New Broad Street House, 35 New
Broad Street, London EC2M 1NH;
CERTIFICATED PROPERTIES means: (i) the freehold property at Gernos Farm,
Maesllyn and Blaenwaun Farm Ffostrasol; and (ii) Office A and Office B and "C"
and "D" at the Turretfield Research Centre, Adelaide, South Australia;
CERTIFICATES OF TITLE means the certificates of title dated 15 July 1996 given
by Maxwell Batley and Fisher Jeffries related to the Certificated Properties
and addressed to the Company and BLB;
CONDITIONS means the conditions contained in Clause 2.1;
DIRECTORS means the Executive Directors and the Non-Executive Directors;
EMPLOYEE OFFER means the offer made or to be made by the Company or any other
member of the Group to Group employees to subscribe at the Placing Price for up
to 50,000 Shares on Admission, as referred to in the section headed "Share
capital, warrants and arrangements for employee share ownership" in Part 1 of
the Prospectus;
FORMAL NOTICE means document C referred to in Schedule 2, being the formal
notice required by the Listing Rules in connection with the Placing;
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FSA means the Financial Services Act 1986;
GROUP means the Company and the Subsidiaries;
INTELLECTUAL PROPERTY RIGHTS means patents, inventions, trade marks, design
rights or design registrations, trade or business names, copyright (including
rights in computer software), rights in know-how and other intellectual
property rights, in each case whether registered or unregistered and including
applications for the grant of any of these and all rights or forms of
protection having equivalent or similar effect which may subsist anywhere in
the world;
LISTING RULES means the listing rules made by the London Stock Exchange
pursuant to Part IV of the FSA (as amended from time to time);
LOCK UP AGREEMENTS means (i) the agreement between certain of the Directors,
their associates (as defined therein), certain senior employees of the Company,
the Company and BLB of even date; and (ii) the agreement between Schroder
International Trust Company Limited, the Company and BLB also of even date,
pursuant to which those Directors, senior employees of the Company, those
associates and Schroder International Trust Company Limited have each agreed to
certain restrictions on the transfer and disposal of Shares following (and
conditionally upon) Admission;
LONDON STOCK EXCHANGE means London Stock Exchange Limited;
LONG FORM REPORT means the report in the agreed form dated 15 July 1996 being
document F referred to in Schedule 2, prepared by the Reporting Accountants
addressed to the Company and BLB containing information relating to the Group;
OFFICIAL LIST means the Official List of the London Stock Exchange;
PATENT ATTORNEYS means: (i) Eric Potter Clarkson; (ii) Carpmaels & Ransford;
and (iii) Finnegan, Henderson, Farabow, Garrett & Dunner LLP, further details
of which are set out in the Prospectus;
PLACING means the placing of the Placing Shares to be arranged by BLB, and any
subscription of Placing Shares by placees, BLB or its nominee pursuant to this
Agreement;
PLACING DOCUMENTS means documents A, B, C and D listed in Schedule 2;
PLACING LETTER means document B referred to in Schedule 2, to be sent by the
Brokers to prospective placees inviting them to apply for Placing Shares
pursuant to the Placing;
PLACING PRICE means 525p per Placing Share;
PLACING SHARES means the 4,190,477 new Shares which the Company has agreed to
allot and issue pursuant to the Placing;
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PRESS RELEASE means document D referred to in Schedule 2;
PROSPECTUS means document A referred to in Schedule 2, including any placing
proof of that document;
REGISTRARS means Bank of Scotland of Apex House, 9 Haddington Place, Edinburgh
EH7 4AL;
REPORTING ACCOUNTANTS means Coopers & Lybrand of Churchill House, Churchill Way,
Cardiff CF1 4XQ;
SDRT means United Kingdom Stamp Duty Reserve Tax;
STAMP DUTY means United Kingdom stamp duty;
SUBSIDIARIES means the UK Subsidiaries and all other companies which are
subsidiaries or subsidiary undertakings of the Company (as defined in,
respectively, sections 736 and 258 of the Companies Act 1985 as amended by the
Companies Act 1989);
UK SUBSIDIARIES means PAL, TAb Wales and TAb London;
TAXES ACT means the Income and Corporation Taxes Act 1988;
VAT means United Kingdom Value Added Tax;
VERIFICATION NOTES means document E referred to in Schedule 2, being the record
of questions prepared to verify that the Prospectus complies with the FSA and
the Listing Rules, with the answers to those questions and copies of all
evidence supporting those answers; and
WARRANTOR DIRECTORS means the Executive Directors and the Non-Executive
Directors other than Robin Baillie.
1.2 Any reference in this Agreement to a Recital, Clause or Schedule is to
a recital, clause or schedule of this Agreement except where the context
otherwise requires. The Schedules form part of this Agreement.
1.3 Headings in this Agreement shall not affect its interpretation.
1.4 Any reference to any specific Act of Parliament or to Acts of
Parliament in general or to any order, statutory provision or statutory
instrument shall be deemed to be a reference to such Act, Acts or order,
statutory provision or statutory instrument as amended, extended, re-enacted or
replaced from time to time and shall include any statute or statutory
instrument amending or extending the same and any statutory re-enactment or
consolidation thereof or replacement therefor and any by-laws, instruments,
orders, rules or regulations for the time being in force thereunder, provided
that, in any such case, the liability of any party hereunder shall not be
increased thereby.
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CONDITIONS
2.1 The obligations of BLB under this Agreement are conditional upon:
(a) the fulfilment by the Company of its obligations under Clause 6.1 by
the time specified therein;
(b) publication of the Press Release by not later than 8.30 a.m. on the
date of this Agreement (or such later time as BLB may agree);
(c) the Prospectus being approved as a prospectus by the London Stock
Exchange not later than 4.00 p.m. on the date of this Agreement (or
such later time as BLB may agree);
(d) the Prospectus being delivered to the Registrar of Companies in
accordance with Clause 6.2 and published as referred to in Clause 6.3
(or in such other manner as BLB may approve);
(e) any supplementary prospectus required pursuant to section 147 of the
FSA being prepared by the Company, approved by the London Stock
Exchange and published in accordance with the Listing Rules prior to
Admission; and
(f) Admission occurring not later than 23 July 1996 or such later date as
the Company and BLB may agree, but in any event not later than 6
August 1996.
2.2 If any of the Conditions is not fulfilled in accordance with its terms
or varied by written agreement between BLB and the Company or waived in the
absolute discretion of BLB by the time (if any) specified, the obligations of
BLB in this Agreement shall cease to have effect; however, until any of such
Conditions shall become incapable of being so fulfilled, each of the parties
hereto shall comply with the obligations on its part contained in this
Agreement.
2.3 Each of the Company, the UK Subsidiaries and the Executive Directors
undertakes to use all reasonable endeavours to procure that each of the
Conditions is fulfilled by the due time and BLB shall, at the request of the
Company, provide all reasonable assistance to each of them to enable them to
fulfil their obligations under this Clause 2.3 in respect of the conditions
contained in sub-paragraphs (b), (c) and (e) of Clause 2.1 above.
APPOINTMENT OF BANK AS AGENT
3.1 The Company hereby irrevocably and unconditionally appoints BLB as its
agent for the purpose of procuring subscribers for the Placing Shares at the
Placing Price and otherwise on the terms and subject to the conditions set out
or referred to in the Placing Documents and this Agreement, and BLB accepts
such appointment.
3.2 The Company undertakes that the appointment of BLB under Clause 3.1
confers on BLB and its agents (including for these purposes the Brokers) all
powers, authorities
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and discretions on behalf of the Company which are necessary for, or reasonably
incidental to, the Placing (including the giving of such instructions to the
Brokers which BLB or such agents consider necessary or advisable in connection
with the Placing and/or the Company's application for Admission) and the
Company agrees to ratify and confirm everything which BLB or such agents shall
do in the lawful exercise of such appointment, powers, authorities and
discretions.
3.3 BLB confirms to the Company that it has delivered either to the
Company or to the Brokers all letters required by the Listing Rules to be
signed by BLB in support of the application for Admission.
ALLOTMENT OF SHARES
4.1 The Company and the Directors agree with BLB that the Company shall
allot and issue the Placing Shares at the Placing Price to such persons as may
be nominated by BLB (after consultation with the Brokers and the Company) as
subscribers pursuant to the Placing or to BLB (or its nominee), and in such
proportions as BLB may determine, in accordance with the provisions of this
Agreement.
4.2 The Placing Shares shall be allotted and issued pursuant to this
Agreement free from all adverse interests and together with all rights
attaching to shares of common stock in the capital of the Company at the time
of Admission.
4.3 On or before 3.00 p.m. on the business day immediately preceding the
date of Admission, by or pursuant to resolutions of the board of Directors or a
duly authorised committee thereof, the Company shall:
(i) conditionally only upon Admission taking place on or before 23 July
1996, or such later date (not being later than 6 August 1996) as BLB
and the Company may agree, allot the Placing Shares to such persons
and in such proportions as may be nominated by BLB as subscribers
pursuant to the Placing or, to the extent that by 5.30 p.m. on the
business day prior to Admission there are Placing Shares in respect of
which BLB has not nominated a subscriber, to BLB or its nominee; and
(ii) deliver to BLB a certified copy of the minutes (in a form previously
approved by, or on behalf of, BLB) of the meeting of the board of
Directors (or a duly authorised committee thereof, together with the
resolution of the board of Directors appointing such committee) at
which the allotments referred to in sub-paragraph (i) above are made.
APPOINTMENT OF SPONSOR AND APPLICATION FOR ADMISSION
5.1 The Company hereby irrevocably and unconditionally appoints BLB as
sponsor of the application for Admission on the terms and subject to the
conditions set out in the Listing Rules and this Agreement, and BLB accepts
such appointment.
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5.2 The Company hereby confirms that the foregoing appointment confers on
BLB and its agents (including for these purposes the Brokers) all powers,
authorities and discretions on its behalf which are necessary for, or
reasonably incidental to, the application for Admission (including in relation
to the conduct of all communications or negotiations with, and the delivery of
documents to, the London Stock Exchange which BLB or such agents consider
necessary or advisable in connection with the application for Admission) and
the Company hereby agrees to ratify and confirm everything which BLB or such
agents shall do in the lawful exercise of such appointment, powers, authorities
and discretions.
5.3 The Company confirms to BLB that the Company has, through the Brokers,
formally applied to the London Stock Exchange for Admission. The Company, each
of the UK Subsidiaries and each of the Directors undertakes in favour of BLB to
execute or cause to be executed all such documents, to provide or cause to be
provided all such information and to do or cause to be done everything required
by, or necessary to comply with the requirements of, the London Stock Exchange
for the purposes of, or in connection with, such application and generally to
use all reasonable endeavours to procure that Admission occurs not later than
23 July 1996. In connection therewith, BLB undertakes to provide promptly to
the Company all such advice and assistance, as and when necessary, as should be
provided by BLB to the Company in its capacity as the Company's sponsor.
DELIVERY AND REGISTRATION OF DOCUMENTS
6.1 The Company shall, on or before the execution of this Agreement by the
parties (or such later time as BLB may agree), cause the following documents
(in the forms previously approved by, or on behalf of, BLB) to be delivered to
BLB:
(a) one original copy of the Verification Notes signed by or on behalf of
each Director and each other person responsible for the answers to any
of the questions they contain;
(b) a certified copy of the minutes of the meeting of the board of
Directors (or a duly authorised committee, together with the
resolution of the board of Directors appointing such committee)
approving the Placing Documents and the other documents referred to in
Schedule 2 and (where appropriate) elsewhere in this Agreement and
authorising the steps to be taken by the Company in connection with
the Placing, including the execution of this Agreement;
(c) one copy of a signed original responsibility letter, addressed to the
Company and BLB, and of a power of attorney, from each of the
Directors, together with a copy of a letter signed by every Director
in compliance with paragraph 5.5 of the Listing Rules;
(d) two signed originals of letter(s) in the agreed form addressed to the
Directors and BLB from the Reporting Accountants: (i) confirming the
accuracy of certain
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financial information in the Prospectus; (ii) confirming that there
has been no significant change in the financial or trading position of
the Group since 30 April 1996; (iii) reporting on the indebtedness
statement contained in the Prospectus; and (iv) commenting on and
giving comfort in relation to the working capital forecast of the
Directors;
(e) a signed letter addressed to the Directors and BLB from the Reporting
Accountants reporting on the Company's financial reporting procedures
and a signed letter from the Company to BLB in relation thereto;
(f) the business plan prepared by the Directors dated 8 July 1996
recording the funding requirements of the Group and the cash available
to it for the period ending on 31 December 1998;
(g) a signed original report by the Reporting Accountants addressed to the
Company and to BLB dated 15 July 1996 on the working capital and cash
flow forecasts of the Group for the period ending 31 December 1998;
(h) a signed original of each of the short form report and the Long Form
Report on the Company and its Subsidiaries, together with a statement
of adjustments, prepared by the Reporting Accountants;
(i) a signed original of the audited consolidated accounts of the Group
for the four month period ended 30 April 1996;
(j) signed original letters of representation from the Company to Coopers
& Lybrand dated 15 July 1996 in respect of the content of the Long
Form Report and other related matters;
(k) original letters addressed to BLB and signed by or on behalf of each
of the Company, the Reporting Accountants, Maxwell Batley, The
Wilkerson Group, the Patent Attorneys and the Brokers relating to the
matters referred to in paragraph 2.8 of the Listing Rules;
(l) a letter addressed to BLB signed by or on behalf of each of the
Directors of the Company in relation to the matters referred to in
paragraph 2.9 of the Listing Rules;
(m) a certified copy of the amended and restated Certificate of
Incorporation and the Bylaws of the Company as the same will be on
Admission, together with a certified copy of the Memorandum and
Articles of Association of each of the UK Subsidiaries and the
equivalent incorporation documents of the other Subsidiaries;
(n) a signed original of each Certificate of Title;
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(o) a signed original of a legal opinion in the agreed form addressed to
BLB relating to, inter alia, the authority of the Company to enter
into this Agreement and the enforceability of such Agreement against
it;
(p) a signed original of each of the Lock Up Agreements;
(q) a signed original of the report on the business of the Company
prepared by The Wilkerson Group and also of the report of the Patent
Attorneys;
(r) copies of the letters of consent referred to in paragraph 16 of Part 7
of the Prospectus; and
(s) original letters addressed to BLB and signed on behalf of the Company
pursuant to paragraphs 2.11 and 2.14 of the Listing Rules;
(t) an original letter from Lowndes Lambert dated 20 June 1996 reporting
on the adequacy of the Group's insurances;
(u) an original letter from IBM Corporation dated 20 June 1996 in relation
to The Wilkerson Group;
(v) original letters from each of The Wilkerson Group and Eric Potter
Clarkson dated 19 June 1996 and 8 July 1996 respectively in relation
to certain patents relevant to the Group; and
(w) certified copies of the minutes of the meetings of the board of
directors and the shareholders of each of PAL, TAb Wales and TAb
London approving the execution of this Agreement.
6.2 The Company shall, not later than 5.30 p.m. (or such later time as BLB
may agree) on the date of this Agreement, deliver to BLB a certified copy of
the receipt, in the usual form, from the Registrar of Companies, evidencing the
delivery of copies of the Prospectus to the Registrar of Companies for
registration in accordance with section 149(1) of the FSA.
6.3 In connection with the Placing, the Company shall and each of the
Executive Directors shall use all reasonable efforts to procure that:
(a) the Prospectus is published in accordance with the Listing Rules;
(b) the Press Release (document D) shall be delivered to the London Stock
Exchange for release not later than 8.30 a.m. (or such later time as
BLB may agree) on 15 July 1996;
(c) the Formal Notice (document C) shall be advertised in the Financial
Times on 16 July 1996 or, if not practicable, on such other date or
dates as may be agreed between the Company and BLB in accordance with
paragraph 8.7 of the Listing Rules;
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(d) sufficient copies of the Prospectus are made available at the
registered office of the UK Subsidiaries and the offices of Maxwell
Batley (and at such other place or places as may be required by the
London Stock Exchange) for a period of 14 days from the date of
publication of the Formal Notice, and at the Company Announcements
Office of the London Stock Exchange for a period of 2 business days
from that date, in accordance with the requirements of the London
Stock Exchange; and
(e) the documents referred to in the Prospectus as being available for
inspection shall be so available at the times and places specified in
the Prospectus.
6.4 Each of the Directors, the UK Subsidiaries and the Company agrees that
every SIGNIFICANT CHANGE or SIGNIFICANT NEW MATTER (in each case as referred
to, and in the case of SIGNIFICANT as defined in, sections 147(1) and (2) of
the FSA) which arises between the time when the Prospectus is published and the
time of Admission shall be dealt with in accordance with section 147 of the FSA
and the Listing Rules and, in particular, if the need arises, and in
consultation with BLB for the purpose of its obligations under this Agreement,
a supplementary prospectus or listing particulars will be published as required
by the London Stock Exchange. Each of the Directors undertakes to bring to the
notice of the Company and BLB any such significant change or significant new
matter of which he is, or becomes, aware and all other information of which he
becomes aware which may be necessary to enable the Company to comply with its
obligations under section 147 of the FSA.
6.5 The Company and each of the Directors shall, from time to time,
procure to be communicated or delivered to BLB all such information and
documents (signed by the appropriate person where so required) as BLB may
reasonably require to enable it to discharge its obligations hereunder and
pursuant to the Placing or as may be required to comply with the requirements
of the London Stock Exchange.
THE PLACING
7.1 Subject to the following occurring on the date of this Agreement or
such later time and date as BLB may agree:
(a) the delivery of the Press Release to the London Stock Exchange (as
referred to in Clause 2.1(b));
(b) BLB receiving satisfactory confirmation of the approval of the
Prospectus as a prospectus by the London Stock Exchange (as referred
to in Clause 2.1(c)); and
(c) BLB receiving satisfactory confirmation of delivery of the Prospectus
to the Registrar of Companies in accordance with section 149 of the
FSA (as referred to in Clause 2.1(d)),
and relying on the undertakings, indemnities, representations and warranties
contained in this Agreement, BLB shall, as agent for the Company, use its
reasonable endeavours to
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arrange, through the Brokers, the Placing of the Placing Shares on the basis of
the Placing Letter, with investors agreed between BLB and the Company who have
expressed an interest in applying for Placing Shares pursuant to the Placing,
in each case at the Placing Price, and on the basis of the information
contained in a placing proof of the Prospectus (the form of such placing proof
having been approved by or on behalf of the Company).
7.2 Subject to the terms and conditions of the Placing Documents, the
Brokers shall determine the identity of the proposed placees (after
consultation with BLB and the Company) and BLB shall determine in its absolute
discretion all other matters in respect of the Placing, including:
(a) the last time at which Placing Letters may be despatched and
acceptances pursuant thereto may be made; and
(b) the validity or otherwise of acceptances or applications received for
the Placing Shares;
provided that, insofar as placees are procured in sufficient numbers, BLB shall
exercise its discretion with a view to ensuring, so far as reasonably possible,
compliance with paragraphs 3.18 and 3.19 of the Listing Rules or otherwise as
may be agreed with the London Stock Exchange.
7.3 If by 5.30 p.m. on the business day before Admission, there are
Placing Shares for which no subscribers have been arranged pursuant to Clause
7.1, BLB agrees, subject to the fulfilment in all respects of the Conditions
and to this Agreement not being terminated before Admission, to subscribe (or
will procure that its nominee subscribes) for the remaining Placing Shares in
reliance on the undertakings, indemnities, representations and warranties
contained in this Agreement and otherwise on the terms and subject to the
Conditions and on the basis of the information contained in the Placing
Documents (other than such terms as relate to the time of payment).
REGISTRATION
8.1 BLB and the Company will use their respective best efforts to procure
that the Brokers provide the Registrars with a list containing the names of
each of the subscribers of Placing Shares pursuant to the Placing and the
numbers of shares to be subscribed by each of them. The Company will also use
best efforts to procure that, against production to the Registrars of that
list, the Registrars shall effect the prompt registration of the listed
subscribers as holders of the relevant Placing Shares without any charge.
8.2 The Company agrees to issue or cause the Registrars to issue
definitive share certificates in respect of the Placing Shares to the persons
entitled thereto on 23 July 1996 but in any event on or before 24 July 1996.
8.3 The Company and the Directors agree to provide the Registrars with all
necessary authorisations and information to enable them to perform their duties
as registrars in
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accordance with and as contemplated by the terms of the Placing Documents and
this Agreement.
PAYMENT AND SETTLEMENT
9. Subject to the fulfilment in all respects of the Conditions and to
this Agreement not being terminated before Admission, BLB shall, on the day of
Admission, cause to be paid for value that day to a bank account of the Company
(in England or Wales) previously notified in writing to BLB an amount equal to
the aggregate consideration received by BLB from subscribers of Placing Shares
pursuant to the Placing (including any amounts payable by BLB or its nominee
for any Placing Shares for which BLB or its nominee is required to subscribe
pursuant to Clause 7.3), less:
(a) the aggregate of the fee (subject to Clause 10.6) and the commissions
payable by the Company pursuant to Clause 10.1; and
(b) any fees and expenses payable by the Company pursuant to Clause 10.3
in respect of which BLB has either been invoiced or which have been
notified to BLB; and
(c) any amount (if any) in respect of VAT payable by the Company pursuant
to Clause 10.4; and
(d) the fees and expenses payable by the Company to the Brokers pursuant
to the engagement letter between the Brokers and the Company dated 21
June 1996, together with an amount in respect of any VAT (if any)
chargeable thereon,
and such payment by (or on behalf of) BLB to the account mentioned in this
Clause 9 shall constitute a complete discharge of BLB by the Company of its
obligations under this Clause 9.
COMMISSIONS, FEES, COSTS AND EXPENSES
10.1 In consideration of BLB's services under this Agreement, the Company
shall pay to BLB an amount equal to the aggregate of:
(a) an arrangement commission of two (2) per cent. on an amount equal to
the product of the Placing Price and the number of the Placing Shares;
(b) a commitment commission of one half of one (0.5) per cent. on an
amount equal to the product of the Placing Price and the number of the
Placing Shares; and
(c) the fee of L.150,000 referred to in paragraph 3(b) of the engagement
letter between BLB, the UK Subsidiaries and the Company dated 12 April
1996 (the ENGAGEMENT LETTER);
(together in each case with any VAT (if any) chargeable on such commissions and
fee) less any amounts received on account of the fee referred to in sub-clause
(c) above by BLB from the Company. The commissions and the fee referred to in
sub-clauses (a), (b)
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and (c) above shall not be payable unless each of the Conditions is satisfied
or waived by BLB, failing which the provisions of Clause 10.2 shall apply. If
each of the Conditions is satisfied or waived by BLB, such commissions shall be
payable in any event including, without limitation, whether or not any
allotment is made to BLB or to placees procured by it or on its behalf pursuant
to Clause 7. Payment of such commissions and fee (and any VAT chargeable
thereon) may be made by deduction of the amount of such commissions and fee
from the payments to be made by BLB to the Company under Clause 9.
10.2 If any of the Conditions is not satisfied or waived by BLB or BLB's
obligations under this Agreement are terminated pursuant to Clause 16.1 or the
Agreement is terminated pursuant to Clause 16.2, the Company shall forthwith
upon request by BLB pay to BLB the fees, commissions (if any) and expenses
payable in accordance with paragraph 3 of the Engagement Letter.
10.3 In addition to the commissions and fees referred to in this Clause 10,
the Company shall pay (whether or not BLB's obligations under this Agreement
become unconditional or are terminated) all fees and expenses incurred and
arising out of, or incidental to, the Placing and the arrangements referred to
or contemplated in this Agreement, including (but without limitation):
(i) all fees and expenses of the Brokers;
(ii) all fees and expenses payable in connection with Admission;
(iii) all fees and expenses of the Registrars;
(iv) printing and advertising expenses and postage; and
(v) all legal, accountancy and other professional fees and expenses
including the fees and expenses (together with any VAT (if any)
thereon) of BLB's legal advisers, Freshfields and Bass, Berry & Sims
(the aggregate amount of which shall have been agreed between the
Company and BLB on or before the date of this Agreement),
together with any further amounts payable pursuant to Clause 10.4 below. The
Company shall, within fourteen days of receipt of evidence that the relevant
cost, charge or expense has been incurred by (or on behalf of ) BLB, reimburse
to BLB the amount of any such costs, charges and expenses which BLB may have
paid. Without prejudice to the Company's obligation to pay all such costs,
charges and expenses, BLB is hereby authorised to deduct, in accordance with
Clause 9(b), the amount of such costs, charges and expenses payable by the
Company from the payment to be made by BLB to the Company under Clause 9.
10.4 Where, pursuant to Clauses 10.1, 10.2, 10.3 or Clause 17, a sum is
paid to BLB by the Company, the Company shall in addition pay to BLB in respect
of VAT:
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(a) where the payment (or any part of it) constitutes the consideration
(or any part thereof) for any supply of services by BLB to the
Company, such amount as equals any VAT properly chargeable thereon but
only on production of a valid VAT invoice; and
(b) (except where the payment falls within (c) below) such amount as
equals any amount in respect of VAT charged to or incurred by BLB as
part of any cost, charge or expense which gives rise to or is
reflected in the payment and which BLB certifies in good faith is not
recoverable by BLB by repayment or credit from HM Customs & Excise
(such certificate to be conclusive in the absence of manifest error);
and
(c) where the payment is in respect of costs or expenses incurred by BLB
as agent for the Company such amount as equals the amount included in
the costs or expenses in respect of VAT but only on production of a
valid VAT invoice in favour of the Company.
10.5 Notwithstanding that BLB is acting as agent for the Company in
connection with the Placing, it may retain for its own benefit any commissions,
fees or other amounts payable to it as referred to in this Agreement and any
other benefits for its own account, save where any of such amounts and benefits
are expressly referred to in this Agreement as being receivable by BLB or its
nominee on behalf of another person, and any Placing Shares which it is obliged
to subscribe may be retained or dealt in by BLB or its nominee for its own use
and benefit.
10.6 BLB shall have the option, exercisable in its sole discretion, to
subscribe for that number of Shares as shall have an aggregate value at the
Placing Price of up to L.75,000 in satisfaction of a corresponding amount of
the fee payable by the Company to BLB under Clause 10.1(c). If BLB wishes to
exercise its option pursuant to this Clause 10.6, it shall provide the Company
with notice in writing of the same, including the number of Shares required to
be issued, at any time prior to the date of Admission. On receipt of such
notice, the Company shall be obliged to issue such number of Shares to BLB at
the Placing Price as shall be specified in the notice, credited as fully paid,
within two days of receipt of such notice. No deduction shall be made by BLB,
pursuant to Clause 9(a), of any amount of the fee which is to be applied in
subscribing for Shares pursuant to this Clause, which amount shall instead be
applied by the Company in paying up in full such shares on their issue in
accordance with this Clause.
REPRESENTATIONS, WARRANTIES, UNDERTAKINGS AND CONFIRMATIONS
11.1 The Company and each of the UK Subsidiaries jointly and severally, and
each of the Warrantor Directors severally, represent, warrant and undertake to
BLB in the terms set out in Schedule 3 subject only to the limitations set out
in Clauses 11.2 and 13.5.
11.2 Each of the representations, warranties and undertakings in Schedule 3
(other than the representations and warranties set out in paragraphs 1, 2 and
3) thereof are made or
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given by each of the Warrantor Directors who is a Non-Executive Director to the
best of his knowledge, information and belief, having made due and careful
enquiry into the subject matter thereof.
11.3 Each Director hereby confirms to BLB in respect of himself that BLB
has been furnished in writing with all information which might reasonably be
considered material for disclosure in respect of himself in the Prospectus and
that all statements of fact in the Placing Documents relating to him are true
and accurate and each of the Warrantor Directors further confirms to BLB in
respect of himself that all statements of opinion, interest or expectation in
the Placing Documents expressed to be held by him (whether solely or jointly)
are truly and honestly held by him and have been made after due and careful
consideration by him.
11.4 Each of the Company, the UK Subsidiaries and the Warrantor Directors
hereby severally undertakes immediately to notify BLB if it or he becomes aware
at any time up to Admission that any of the representations, warranties or
undertakings set out in Schedule 3 is (or may be) untrue, inaccurate or
misleading in any material respect or ceases (or may have ceased) to be true
and accurate or becomes (or may have become) misleading in any material respect
or if it or he becomes aware of any circumstance which would or might cause any
of the said representations, warranties or undertakings to become untrue,
inaccurate or misleading in any material respect if they were repeated at any
time prior to Admission by reference to the facts subsisting at such time or if
it or he becomes aware, prior to Admission, that a matter has arisen which
might give rise to a claim under the indemnities in Clause 12.2.
11.5 If, at any time prior to Admission, BLB receives notification pursuant
to Clause 6.4 or Clause 11.4 or otherwise becomes aware that any of the
representations, warranties or undertakings set out or referred to in this
Clause 11 or Schedule 3 is or has become or is, in its reasonable opinion
having discussed the matter with the Company, likely to become untrue,
inaccurate or misleading in any material respect, (material in the context of
the Placing) BLB may (without prejudice to its right to terminate its
obligations under this Agreement pursuant to Clause 16) require the Company at
its own expense to make or cause to be made such announcement and/or despatch
such communication as BLB shall reasonably consider necessary after consulting
with the Company.
11.6 Wherever in Schedule 3 a warranty is qualified by the expression "to
the best of the knowledge, information and belief of the Warrantor Directors"
or "so far as the Warrantor Directors are aware" or any similar expression
qualifying a warranty by reference to the knowledge of the Warrantor Directors,
such statement shall be deemed to have been made after due and careful enquiry
into the subject matter thereof by each of the Warrantor Directors.
11.7 The Company undertakes to all holders of Shares (whether present or
future) and to BLB (in each case as a separate undertaking) that it shall not
sell Shares (or such other securities as are referred to in paragraph 3(I) of
Part 7 of the Prospectus, the text of
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which is set out below) in such a way as to cause the entitlements referred to
in such paragraph to arise.
Paragraph 3(I) of Part 7 of the Prospectus reads as follows:-
"(I) Certain purchasers in the Company's offering of Shares conducted
between 1993 and 1995 at an issue price of US$4.00 per Share may be entitled to
receive an additional number of Shares in the event that the Company sells
Shares (or securities exchangeable for or convertible into Shares, other than
Shares, or options to purchase Shares, issued pursuant to compensation plans of
the Company) at a price which is both (i) less than US$4.00 per Share and (ii)
less than the fair market value of such Shares, as determined by the Board of
Directors. The Company has undertaken that it will not sell Shares (or such
other securities) in such a way as to cause such entitlements to arise."
11.8 Each of the Company, the UK Subsidiaries and the Executive Directors
represents, warrants and undertakes to BLB that the Placing, the Employee Offer
and the issue of Shares pursuant to acceptance of the Employee Offer has been
(and will be) made in accordance with, and does not (nor will it) violate any
applicable legal and regulatory requirements of the United Kingdom, the United
States of America or Australia and, in particular, but without limitation:
(a) in the United Kingdom, the Employee Offer has only been made to
persons falling within article 6(2)(a) of the Financial Services Act
1986 (Investment Advertisements) (Exemptions) Order 1995 (SI
1995/1266);
(b) the Employee Offer and the issue of Shares pursuant to that offer are
exempt from registration under the United States of America Securities
Act of 1933, as amended (the SECURITIES ACT), and the Company has
taken, and will continue to take, all necessary steps to secure the
availability of, and compliance with, the relevant exemption or
exemptions therefrom;
(c) the Placing does not require registration under the Securities Act,
pursuant to Regulation S (promulgated under the Securities Act), nor
will the Employee Offer affect the continued availability of
Regulation S in relation thereto; and
(d) the Employee Offer will only be made in the United States of America
by way of a letter or similar offering memorandum to employees (and
which will accompany the Prospectus) which contains appropriate
disclaimers for the protection of BLB regarding the use of, and
reliance upon the information contained in, the Prospectus and such
letter or memorandum.
WAIVER OF CLAIM AND INDEMNITY
12.1 No claim shall be made by the Company, any of the UK Subsidiaries or
any Director against any member of the BLB Group (being BLB, its parent and
subsidiary and associated undertakings and each of their respective directors,
officers, advisers, partners, agents or employees) (BLB and each such member or
other person being, for
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the purposes of this Clause 12, an INDEMNIFIED PERSON) to recover any loss,
damage, cost, charge or expense (including legal fees) and taxes (including
stamp duty, SDRT and VAT) which the Company or any of the Subsidiaries, any of
their employees or agents, the Directors or any subscriber for Placing Shares
pursuant to the Placing or any subsequent purchaser or transferor thereof may
suffer or incur by reason of or arising out of the carrying out by BLB, or on
its behalf, of its obligations and services under this Agreement except to the
extent that such loss, damage, cost, charge, expense or tax arises from the
negligence or wilful default of an Indemnified Person, or from the breach by
BLB or any other Indemnified Person of its duties or obligations under the FSA
or the regulatory system (as defined in the Rules of The Securities and Futures
Authority).
12.2 The Company and each of the UK Subsidiaries jointly and severally, and
each of the Executive Directors severally, hereby undertake to BLB (for itself
and on behalf of each and every other Indemnified Person) to indemnify and keep
indemnified each Indemnified Person against all or any claims (whether or not
successful, compromised or settled), actions, liabilities, demands, proceedings
or judgments whatever (each a CLAIM) brought or established against any
Indemnified Person in any jurisdiction by any person including (but without
limitation) a subscriber for Placing Shares pursuant to the Placing or by any
subsequent purchaser or transferee thereof or by any governmental agency or
regulatory body or any other person whatsoever and against all losses, costs,
charges or expenses (including legal fees) and taxes (including stamp duty,
SDRT and VAT) (each an EXPENSE) which any Indemnified Person may reasonably
suffer or incur (including, but not limited to, all such Expenses reasonably
suffered or incurred in disputing or defending any Claim and/or in establishing
its right to be indemnified pursuant to this Clause 12.2 and/or in reasonably
seeking advice as to any Claim, or in any way related to or in connection with
this indemnity) and which in any such case arises, directly or indirectly, out
of or is attributable to or is in connection with the carrying out by BLB of
its obligations or services under or in connection with this Agreement and/or
the Placing including but not limited to:
(i) the Placing Documents or any of them not containing, or being alleged
not to contain, all information required to be stated therein or any
statement therein being or being alleged to be untrue, inaccurate,
incomplete, misleading or not based on reasonable grounds; and/or
(ii) the distribution, issue or approval of the Placing Documents
(including any pathfinder version or placing proof of the Prospectus)
or other documents or materials in connection therewith (including the
issue or approval by BLB for the purpose of section 57 of the FSA of
any investment advertisement relating to or in connection with the
Company and the Subsidiaries); and/or
(iii) any breach or alleged breach by the Company, any of the UK
Subsidiaries or any of the Directors of its or his obligations
hereunder or any breach or alleged breach by the Company, any of the
UK Subsidiaries or any of the Directors of the representations,
warranties or undertakings on their respective parts set out in this
Agreement; and/or
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(iv) any failure or alleged failure by the Company, any of the UK
Subsidiaries or any of the Directors or their respective agents,
employees or professional advisers to comply with the laws or
regulations of any country resulting from the proposed listing of
Shares on the London Stock Exchange, or the Placing, and/or
(v) the distribution of the Prospectus by the Company (or any member of
its Group) to any person, other than an institutional investor as part
of the Placing, including, without limitation, employees of any member
of the Group; and
(vi) the due performance by BLB of its role as agent of the Company in
connection with the Placing and in relation to the preparation of the
documentation connected therewith,
provided that neither BLB nor any Indemnified Person shall be entitled to any
indemnity under this Clause 12.2 to the extent that the Claim or Expense
concerned results from the negligence or wilful default of BLB or of any other
Indemnified Person, or any breach by BLB or any other Indemnified Person of its
duties or obligations under the FSA or the regulatory system (as defined in the
rules of The Securities and Futures Authority Limited).
12.3 BLB shall notify the Company as soon as reasonably practicable after
it becomes aware of any claim and shall provide such information as shall be
reasonably available to BLB of the facts or circumstances giving rise to such
claim (specifying BLB's estimate, on a without prejudice basis, of the amount
of the claim) to the Company and shall keep the Company reasonably informed on
the progress of any claim. BLB shall have due regard to (but not be bound to
comply with) any reasonable request which the Company may make in relation to
any claim including a request to participate in, but not control, any defence
or settlement of any claim, subject to the Company, each of the UK Subsidiaries
and the Executive Directors (and in the case of the Executive Directors
severally and insofar as such claim relates to him) indemnifying and securing
BLB in a manner reasonably satisfactory to BLB against any and all costs,
charges and expenses reasonably incurred by it in complying with any such
request.
12.4 Each of the Company, the UK Subsidiaries and the Executive Directors
agrees that, without BLB's prior written consent (such consent not to be
unreasonably withheld or delayed) it will not settle, compromise or consent to
the entry of any judgment in any pending or threatened claim, action or
proceeding in respect of which indemnification could be sought pursuant to this
Clause 12, whether or not BLB or any other Indemnified Person is an actual or
potential party to such claim, action or proceeding.
12.5 If multiple claims are brought against any Indemnified Person in any
proceedings, with respect to at least one of which indemnification is permitted
under applicable law and provided for under this agreement, the Company, the UK
Subsidiaries and the Executive Directors agree that any judgment or award will
be conclusively deemed to be based solely on a claim as to which
indemnification is permitted and provided for, except
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to the extent the judgment or award, or any portion thereof, is based solely on
a claim as to which indemnification is not available.
12.6 If the indemnification by the Company of an Indemnified Person
provided for in this Agreement is for any reason held unenforceable, the
Company agrees to contribute to the losses, claims, damages and liabilities for
which such indemnification is held unenforceable, (i) in such proportion as is
appropriate to reflect the relevant benefits to the Company on the one hand and
BLB on the other hand, of the transaction as contemplated (whether or not the
transaction is consummated) or (ii) if (but only if) the allocation provided
for in (i) is for any reason held unenforceable, in such proportion as is
appropriate to reflect not only the relevant benefits referred to in (i) but
also the relative fault of the Company (or any other member of the Group) on
the one hand and BLB on the other, as well as any other relevant equitable
considerations. The Company agrees that for the purposes of this Clause 12.6
the relative benefits to each of the Company and BLB of the transaction
contemplated in this Agreement shall be deemed to be in the same proportion
that the total value received by the Company, any other member of the Group or
any of the stockholders of the Company, as the case may be as a result,
directly or indirectly, of that transaction bears to the fees paid or liable to
be paid to BLB pursuant to this Agreement; provided however that, to the extent
permitted by applicable law, in no event will BLB be required to contribute an
aggregate amount in excess of the aggregate fees actually paid or liable to be
paid to BLB under this Agreement.
REPRESENTATIONS, WARRANTIES, UNDERTAKINGS AND INDEMNITIES: GENERAL PROVISIONS
13.1 Each of the representations, warranties and undertakings and the
indemnities set out or referred to in this Agreement shall remain in full force
and effect notwithstanding the completion of the subscription of the Placing
Shares or the Placing.
13.2 The indemnities set out or referred to in this Agreement shall be in
addition to and shall not be construed to limit, affect or prejudice any other
right or remedy available to any Indemnified Person.
13.3 No neglect, delay or indulgence on the part of BLB or any other
Indemnified Person in enforcing the representations, warranties and
undertakings or the indemnities set out or referred to in this Agreement or in
enforcing any other term or condition of this Agreement shall be construed as a
waiver thereof.
13.4 Notwithstanding any rule of law or equity to the contrary, any
release, waiver or compromise or any other arrangement of any kind whatsoever
which BLB or any other Indemnified Person may agree to or effect as regards one
or more of the Company or any of the UK Subsidiaries or the Directors in
connection with this Agreement and, in particular (but without limitation), the
representations, warranties and undertakings and the indemnities set out or
referred to in this Agreement shall not affect the rights of BLB or any other
Indemnified Person as regards any other of such parties.
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13.5 Without limiting or otherwise affecting the liability of the Company
or any of the UK Subsidiaries:
(i) no Warrantor Director shall be liable for claims under or pursuant to
any of the provisions of Clause 11 or Clause 12 unless he shall have
received written notice (in accordance with Clause 19) containing
details of the relevant claim no later than two years from the date of
this Agreement;
(ii) the aggregate liability of the Warrantor Directors for all claims
under or pursuant to the provisions of Clause 11 and all claims under
or pursuant to the provisions of Clause 12 shall not exceed
US$9,000,000 together with all reasonable costs and expenses
(including legal expenses) reasonably suffered or incurred by BLB in
pursuing, settling or otherwise dealing with such claims;
(iii) the total liability of each Warrantor Director in respect of the
aggregate of all claims under or pursuant to the provisions of Clause
11 and all claims under or pursuant to the provisions of Clause 12
shall not exceed, in the case of Martin Brown, US$2,000,000 and, in
the case of each of the other Warrantor Directors, US$1,000,000; and
(iv) no liability shall attach to the Warrantor Directors in respect of a
claim under Clause 11 if such claim arises as a result of the
retrospective imposition of taxation as a consequence of a change in
the law enacted after the date hereof.
13.6 BLB shall not be entitled to recover damages or obtain payment,
reimbursement, restitution or indemnity from any of the Company, the UK
Subsidiaries or the Warrantor Directors more than once in respect of the same
loss.
WITHHOLDING AND GROSSING-UP
14.1 All sums payable to BLB or any other Indemnified Person under this
Agreement shall be paid free and clear of all deductions or withholdings unless
the deduction or withholding is required by law, in which event the relevant
person shall pay such additional amount as shall be required to ensure that the
net amount received by BLB or such other person will equal the full amount
which would have been received by it had no such deduction or withholding been
made.
14.2 If the United Kingdom Inland Revenue or any other tax authority brings
into charge to tax (or into any computation of income, profit or gains for the
purposes of any charge to tax) any sum payable to BLB or any other Indemnified
Person under this Agreement (other than the fees and commissions due under
Clauses 10.1 or 10.2), then the person liable to make such payment shall pay
such additional amount as shall be required to ensure that the total amount
paid, less the tax chargeable thereon (or that which would be so chargeable but
for the availability of relief in respect of that charge to tax), is equal to
the amount that would otherwise be payable to BLB or such other person under
this Agreement (additional payments being made within fourteen days of demand
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by BLB subject to the production of evidence by BLB as to BLB having suffered
or incurred such tax).
PUBLICITY
15.1 Subject to Clause 15.2, each of the Company, the UK Subsidiaries and
the Directors hereby undertakes to BLB that it or he will not at any time
during the period from and including the date of this Agreement until the first
business day falling not less than thirty (30) days after Admission make any
public announcement, statement or communication regarding the Company or the
Placing or otherwise relating to the financial condition or trading or
financial prospects of the Group, whether in response to enquiries or
otherwise, without the prior written consent of BLB which shall not be
unreasonably withheld or delayed.
15.2 Each of the Company, the UK Subsidiaries and the Directors hereby
undertakes to BLB that none of them will at any time during the period ending
on the date of publication of the audited consolidated accounts of the Company
for the financial year ending 31 December 1997 make any public announcement,
statement or communication as is referred to in Clause 15.1 without first using
all reasonable endeavours to notify BLB as to the content, form and manner of
publication of such announcement, statement or communication.
15.3 The Company hereby undertakes to BLB that it will, and the Executive
Directors undertake to procure that the Company will, at all times during the
period from the date of this Agreement until publication of the audited
consolidated accounts of the Company for the financial year ending 31 December
1997, as soon as reasonably practicable use all reasonable endeavours to:
(a) notify BLB in advance of, and consult with BLB in respect of, both the
content and the timing and manner of making or despatch of any public
announcement or communication to stockholders of the Company
concerning the financial position or affairs of the Group in respect
of any financial period of the Company or part thereof and consult
with BLB in respect of any other information which is likely
materially to affect the general character or nature of the business
of the Group or may be necessary to be made known to the public in
order to enable the stockholders and the public to appraise the
position of the Group and to avoid the establishment of a false market
in the securities of the Company;
(b) forward to BLB for perusal all proofs of all documents to be sent to
stockholders (including, without prejudice to the generality of the
foregoing, notices of meetings, forms of proxy and the Directors'
report and annual accounts), documents relating to takeovers, mergers,
reorganisations or other schemes (including employee profit sharing
schemes or employee share schemes) and all press announcements in
relation to the foregoing; and
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(c) where reasonably practicable, notify BLB forthwith of any proposal
approved by the board of Directors of the Company to make any material
alteration, revision or release in respect of the terms and conditions
of employment of any of the Executive Directors and of any material
breach of any covenant, undertaking or warranty in any of them by any
such director and, where reasonably practicable in the circumstances,
consult with BLB prior to taking any action in respect of the
foregoing.
TERMINATION
16.1 If, at any time before Admission:
(a) any of the Directors, the UK Subsidiaries or the Company fails, in any
respect which BLB reasonably considers to be material in the context
of the Placing, to comply with any of their respective obligations
under this Agreement; or
(b) it comes to the notice of BLB that any statement contained in the
Prospectus was untrue, incorrect or misleading at the date of the
Prospectus in any respect which BLB reasonably considers to be
material in the context of the Placing; or
(c) it comes to the notice of BLB that any statement contained in the
Prospectus has become untrue, incorrect or misleading in any respect
material in the context of the Placing or that any matter which is
material in the context of the Placing has arisen which would, if the
Placing were made at that time, constitute a material omission
therefrom; or
(d) it comes to the notice of BLB that any of the representations,
warranties and undertakings contained or referred to in Clause 11 or
Schedule 3 was not at the date of this Agreement true and accurate in
any respect which BLB reasonably considers to be material in the
context of the Placing; or
(e) it comes to the notice of BLB that any of the representations,
warranties and undertakings contained or referred to in Clause 11 or
Schedule 3 has ceased to be true and accurate in any respect which BLB
reasonably considers to be material in the context of the Placing, or
(f) it comes to the notice of BLB that a matter has arisen which might
give rise to a claim under any of the indemnities in Clause 12 which
BLB reasonably considers to be material in the context of the Placing,
BLB may in its absolute discretion by notice in writing to the Company (for
itself and on behalf of the other parties to this Agreement) prior to Admission
terminate its obligations under this Agreement (save to the extent specified in
Clause 17).
16.2 If at any time prior to 5.30 p.m. on the date of this Agreement there
shall have occurred any significant adverse change in national or international
financial, market or industrial conditions which, in the reasonable opinion of
BLB arrived at in good faith
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after such consultation with the Company as shall in the circumstances be
practicable, is of such magnitude or severity as to be material in the context
of the Placing, BLB may by notice in writing to the Company (for themselves and
on behalf of the other parties to this Agreement) terminate this Agreement
(save to the extent specified in Clause 17).
EFFECT OF TERMINATION
17. If the obligations of BLB under this Agreement (save to the extent
specified in this Clause 17) shall cease and determine pursuant to Clause 2 or
be terminated pursuant to Clause 16, no party shall have any claim against any
other party hereto for compensation, costs, damages or otherwise, save that:
(a) the Company shall within fourteen days pay in accordance with Clause
10.2 to BLB the appropriate commissions, fees, costs and expenses save
to the extent that they have already been paid by the Company; and
(b) the provisions of Clauses 1, 11, 12, 13, 14, 15, 17, 18, 19, 20 and 21
shall continue to apply notwithstanding such termination.
TIME OF THE ESSENCE
18. Time shall be of the essence of this Agreement, both as regards the
times, dates and periods mentioned herein and as to any time, dates and periods
which may, by agreement in writing between the parties hereto, be substituted
for them.
NOTICES
19.1 Save as specifically otherwise provided in this Agreement, any notice,
demand or other communication to be served under this Agreement shall be in
writing and shall be served upon any party hereto only by posting by first
class post (airmail if overseas) or delivering the same to its or his address
given or referred to in this Clause 19 or sending the same by facsimile
transmission to the number given in this Clause 19 for such party or at such
other address or number as he or it may from time to time notify in writing to
the other parties hereto.
19.2 A notice or demand served by first class post shall be deemed duly
served forty-eight hours (disregarding Saturday, Sundays and Bank Holidays)
after posting or, in the case of intercontinental deliveries, four days after
posting and a notice or demand sent by facsimile transmission shall be deemed
to have been served at the time of transmission (save that if the transmission
occurs after 6 p.m. (local time) the notice or demand shall be deemed to have
been served at 8.30 a.m. (local time) on the next business day following
transmission) and in proving service of the same it will be sufficient to
prove, in the case of a letter, that such letter was left at or delivered to
the correct address of the party to be served as provided in this Agreement or
properly stamped or franked first class (or airmail), addressed to the address
of the party to be
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served given in this Clause 19 and placed in the post and, in the case of a
facsimile transmission, that such facsimile was duly transmitted to the number
of the party to be served given in this Clause 19 and an electronic
acknowledgement of transmission was received or at such other address or number
as he or it may from time to time notify in writing to the other parties
hereto.
19.3 All notices, demands or other communications given under this
Agreement, shall be given as follows:
If to the Company,
the UK Subsidiaries or the
Directors to: Therapeutic Antibodies Inc.
1500 21st Avenue
Suite 310
Nashville
Tennessee 37212
USA
Fax Number: 001 615 320 1212
For the attention of: the Chairman and
the Secretary
with a copy (for information Maxwell Batley
only) to: 27 Chancery Lane
London WC2A 1PA
Fax Number: 0171 242 7133
For the attention of: Mr Ian McIntyre
If to BLB to: The British Linen Bank Limited
4 Melville Street
Edinburgh EH3 7HZ
Fax Number: 0131 243 8324
For the attention of: The Company
Secretary.
with a copy (for information The British Linen Bank Limited
only) to: 8 Frederick's Place
London EC2R 8AT
Fax Number: 0171 601 6843
For the attention of Mr Anthony Brown
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GOVERNING LAW AND JURISDICTION
20.1 This Agreement shall be governed by and construed in accordance with
the laws of England.
20.2 This Agreement shall be binding upon each of the parties hereto and
its or his successors in title or legal personal representatives as the case
may be.
20.3 Each of the parties hereby irrevocably submits to the exclusive
jurisdiction of the courts of England. The Company and each of the Directors
(other than Robin Baillie, John Landon MD and Timothy Chard MD) hereby appoint
and agree at all times to maintain an authorised agent to receive service of
process in England on their behalf and to receive notices on their behalf
pursuant to this Agreement. Such agent shall initially be Maxwell Batley and
the Company and each of those directors hereby agree not to revoke the
authority of such agent without first appointing a successor agent in England
and notifying BLB forthwith of the change of agent.
COUNTERPARTS
21. This Agreement may be signed in any number of counterparts, each of
which, when signed and delivered, shall be an original, but all the
counterparts together shall constitute one and the same instrument.
IN WITNESS WHEREOF this Agreement has been duly executed as a deed by the
parties hereto or by their duly authorised attorneys the day and year first
above written.
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<PAGE> 29
SCHEDULE 1
DIRECTORS
PART 1: THE EXECUTIVE DIRECTORS
Martin Brown
Harry Browne MD
A J Kazimi
John Landon MD
Timothy Chard MD
PART 2: THE NON-EXECUTIVE DIRECTORS
Thomas Andrews
Robin Baillie
Robert Hilton
Steven Stroup MD
Joseph Williams
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<PAGE> 30
SCHEDULE 2
DOCUMENTS
DOCUMENT MARKED
Prospectus (comprising a prospectus or listing particulars A
relating to the Company)
Placing Letter B
Formal Notice C
Press Release D
Verification Notes E
Long Form Report F
Certificates of Title G
Lock Up Agreements H
The Long Form Report of the Wilkerson Group I
The Patent Attorneys' Report J
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<PAGE> 31
SCHEDULE 3
REPRESENTATIONS, WARRANTIES AND UNDERTAKINGS
PROSPECTUS
(1) All statements of fact contained in the Prospectus are true and
accurate in all material respects and not misleading in any material respect
and all expressions of opinion, intention or expectation contained therein are
truly and honestly held by the Warrantor Directors and have been made after due
and careful consideration and enquiry, and in particular:
(a) the statement relating to working capital in paragraph 17 of Part 7 of
the Prospectus represents the true and honest opinion of the Warrantor
Directors arrived at after due and careful consideration and enquiry;
(b) the statement relating to the Group's indebtedness as at 31 May 1996
is true and accurate;
(c) the interests of the Warrantor Directors in the share capital of the
Company and in contracts and arrangements with the Company or any of
its Subsidiaries are fairly and accurately described in the Prospectus;
(d) the sections headed REASONS FOR AND DETAILS OF THE PLACING, FINANCIAL
RECORD, CURRENT TRADING AND DIVIDEND POLICY, COMPETITION, INTELLECTUAL
PROPERTY, RISK FACTORS and PROSPECTS contained in the Prospectus
accurately represent the true and honest belief of the Warrantor
Directors arrived at after due and careful consideration and enquiry;
and
(e) the information contained in Part 4 headed ACCOUNTANTS' REPORT ON THE
GROUP is fairly presented and not misleading,
and there are no material facts or matters omitted from the Prospectus the
omission of which would make any statement therein, whether of fact or of
opinion, misleading in any material respect or which in the context of the
Placing are material for disclosure to BLB or to prospective subscribers (or
subsequent transferees) of any of the Placing Shares.
(2) The Prospectus contains all particulars and information required by,
and complies with, the FSA and the Listing Rules and all other relevant laws
and regulations of the United Kingdom and the United States of America.
(3) The Warrantor Directors have read the Verification Notes and have
prepared or approved all replies thereto, and all such replies are true and
accurate in all material respects and have been given in good faith and no
information has been knowingly withheld the absence of which would call into
question the accuracy of such replies.
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<PAGE> 32
(4) All information supplied by the Warrantor Directors, the Company
and/or its Subsidiaries to the Reporting Accountants for the purposes of the
Long Form Report and/or the short form report dated on or around 12 July 1996
was given in good faith and such information was when supplied true and
accurate in all material respects and no information has been withheld the
absence of which would make misleading the information so provided in any
material respect and the statements of fact contained in such reports were and
remain true and accurate in all material respects and are not misleading in any
material respect and no material fact or matter has been omitted; and neither
the Warrantor Directors nor the Company nor the UK Subsidiaries disagree in any
material respect with the statements of opinion contained in such reports and
the opinions attributed to the Warrantor Directors in those reports are
honestly held by the Warrantor Directors and are fairly based upon facts within
their knowledge and made on reasonable grounds.
(5) All statements made by or on behalf of the Company in connection with
any application to the London Stock Exchange for certain information to be
omitted from the Prospectus are true and accurate in all material respects and
are not misleading in any material respect and there are no facts which have
not been disclosed to the London Stock Exchange in connection therewith which
by their omission make any such statements misleading or are material for
disclosure to the London Stock Exchange in connection therewith and there are
no material matters (other than those disclosed in the Prospectus or otherwise
in writing to the London Stock Exchange) which should be taken into account by
the London Stock Exchange in considering the suitability for listing of the
Shares.
(6) The Company is satisfied, after making due and careful enquiry, that
the working capital available to the Group is sufficient for the two year
period following Admission.
FINANCIAL POSITION
(7) The audited balance sheets, the profit and loss accounts and the cash
flow statements of the Group for the three years ended 31 December 1995 and the
four month period to 30 April 1996 (including, in all cases, the notes thereon)
have been prepared in accordance with generally accepted accounting principles
consistently applied in the United States of America, and give a true and fair
view of the state of affairs of the Group as at the end of each of the relevant
periods and of the loss of the Group for each such period.
(8) Since 30 April 1996, save as disclosed in the Prospectus:
(a) each member of the Group has carried on its respective business in the
ordinary course, and there has been no material adverse change in the
financial or trading position or in the prospects of the Group taken
as a whole;
(b) no member of the Group has entered into or assumed or incurred any
contract, commitment, borrowing, indebtedness in the nature of
borrowing, guarantee,
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<PAGE> 33
liability (including contingent liability) or other obligation the
disclosure of which is required to prevent the Prospectus being
inaccurate or misleading in any material respect;
(c) no debtor has been released by the Company or any Subsidiary to an
extent which is material in relation to the Company or its
Subsidiaries on terms that he pays less than the book value of his
debt and no debt of such material amount owing to the Company or any
of its Subsidiaries has been deferred, subordinated or written off or
has proven irrecoverable to any material extent; and
(d) no member of the Group has been involved in any transaction which has
resulted or is likely to result in any material liability for tax on
the Company or any of its Subsidiaries other than a transaction in the
ordinary course of business.
(9) Since 1 July 1994, save as disclosed in the Prospectus:
(a) no contract or commitment (whether in respect of capital expenditure
or otherwise) has been entered into by the Company or any of its
Subsidiaries which is outside the ordinary course of its business or
is of a material nature or magnitude;
(b) no agreement or commitment has been entered into by the Company or any
of its Subsidiaries to acquire or dispose of any business or any other
material asset and there has been no assumption of any material
liabilities (including contingent liabilities), in each case,
otherwise than in the ordinary course of business; and
(c) neither the Company nor any of its Subsidiaries has been in default in
any material respect under any agreement or arrangement to which the
Company or any of its Subsidiaries is a party and which is or might be
material and there are no circumstances likely to give rise to such
default.
(10) Save as disclosed in the Prospectus no notice has been received by the
Company and no circumstances have arisen or are to the best of the knowledge,
information and belief of the Warrantor Directors about to arise such that any
person is, or would with the giving of notice and/or lapse of time become,
entitled to require payment of any indebtedness in respect of borrowed moneys
of any member of the Group before its stated maturity and so far as the
Warrantor Directors are aware no person who is owed any indebtedness in respect
of borrowed money of any member of the Group which is payable on demand or on
the occurrence of any event proposes to demand repayment of such indebtedness
at the present time, provided that BLB acknowledges that the Warrantor
Directors have no knowledge of the intentions of the Welsh Development Agency.
(11) The Warrantor Directors have given due consideration to the memorandum
prepared by Maxwell Batley entitled "Memorandum on the Duties and
Responsibilities of Directors of a Listed Company not resident in the United
Kingdom" and the references therein to the requirements of the Report of the
Committee on the Financial Aspect of
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<PAGE> 34
Governance (the Cadbury Report) and have established procedures to enable the
Company, following Admission, to comply with certain of the recommendations of
the Cadbury Report to the extent described in the Prospectus.
(12) The Directors have established procedures which provide a reasonable
basis for them to make a proper judgment as to the financial position and
prospects of the Company and its Subsidiaries.
BUSINESS
(13) Each member of the Group has been duly incorporated, has full corporate
power and authority to carry on its activities in the ordinary course of
business at the date of this Agreement and save to the extent not material has
obtained all licences, permissions, authorisations and consents required for
the carrying on of its business as currently conducted and such licences,
permissions, authorisations and consents are in full force and effect and there
are no circumstances, to the best of the knowledge, information and belief of
the Warrantor Directors, which indicate that any of such licences, permissions,
authorisations or consents which is material in the context of the Group as a
whole may be terminated, revoked or not renewed, in whole or in part, in the
ordinary course of events or as a result of the performance by the Company of
the terms of this Agreement; and each member of the Group has complied in all
material respects with all legal and other requirements applicable to its
business, including, without limitation, applicable requirements of the
Securities and Exchange Commission of the United States of America.
(14) The intellectual property rights used or enjoyed by the Group in or in
connection with its business at the date of this Agreement are either legally
and beneficially owned by the Company or a member of the Group, or licensed to,
or used under the authority of the owner by, the Company or a member of the
Group and, save as disclosed in the Prospectus, are not subject to any
mortgage, charge, lien or other security interest in favour of any third party.
(15) In the case of those intellectual property rights owned by the Group
and in respect of which application for registration shall have been made (THE
REGISTERED RIGHTS), all application, registration and renewal fees due to date
necessary to procure, register, record and maintain the registered rights have
been paid. None of the registered rights, including applications for these
rights, are subject to any actual or, so far as the Warrantor Directors are
aware, threatened challenge or attack by a third party or competent authority
other than, in the case of applications for registrations, examination and, so
far as the Warrantor Directors are aware, all applications for these rights are
being competently prosecuted, nor are there any facts or matters which might so
far as the Warrantor Directors are aware give rise to a successful such
challenge or attack.
(16) Each member of the Group has taken all steps which the Warrantor
Directors consider to be reasonably necessary to protect all intellectual
property rights currently in use by any of them which are material to their
respective businesses which are, or which
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<PAGE> 35
the Warrantor Directors honestly believe are, or could through registration
become, their property.
(17) Save as disclosed in the Prospectus no member of the Group nor any of
the Directors has received any claim or notice or is otherwise aware that the
processes and methods employed, the services provided, the businesses conducted
and the products developed, manufactured, used or dealt with by any member of
the Group have infringed, currently infringe or are likely to infringe any
third party's intellectual property rights, nor that they involve the
unlicensed use of confidential information.
(18) No member of the Group is aware of any unauthorised use or
infringement by any third party of the intellectual property rights or
confidential information used or held by the Group in connection with its
business.
(19) All material information supplied or made available (whether through
published sources or by the Group or its agents) to the Patent Attorneys in
connection with their assessment of the intellectual property rights of the
Group was supplied or made available in good faith, and was when supplied true
and accurate in all material respects and no information has been withheld
(including, without limitation, details of any prior art known to the Warrantor
Directors (after making due and careful enquiry)) the absence of which would
make misleading the information so provided in any material respect and the
statements of fact contained in such reports are true and accurate in all
material respects and are not misleading and no material fact has been omitted;
and neither the Warrantor Directors, the UK Subsidiaries nor the Company
disagree to any material extent with the statements of opinion contained in the
report of the Patent Attorneys set out in the Prospectus.
(20) All material information supplied or made available (whether through
published sources or by the Company or its agents) to The Wilkerson Group in
connection with their assessment of the Group's products, their development
programme, the risk factors relating thereto and the commercial potential of
such products was supplied or made available in good faith and was when
supplied true and accurate in all material respects and no information has been
withheld the absence of which would make misleading the information so provided
in any material respect and the statements of fact contained in such report are
true and accurate in all material respects and are not misleading and no fact
or matter has been omitted which would be material to such assessment, and
neither the Warrantor Directors, the UK Subsidiaries nor the Company disagree
to any material extent with the statements of opinion contained in the report
of The Wilkerson Group set out in the Prospectus or in the long form report
prepared by The Wilkerson Group.
PROPERTIES
(21) All deeds, documents and information have been delivered to Maxwell
Batley or Fisher Jeffries (as the case may be) for the purpose of preparing the
Certificates of Title and all such deeds, documents and information were
supplied in good faith and are complete and current in all material respects
and no further deeds, documents or
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<PAGE> 36
information have been withheld by any member of the Group which would make
misleading the deeds, documents or information supplied, and the statements of
fact or opinion by the Company or any member of the Group in the Certificates
of Title are at the date hereof true and accurate in all material respects.
(22) Save as disclosed in the Certificates of Title, the Company or one of
its Subsidiaries has good legal title to each of the Certificated Properties,
each of which are unencumbered and free from all liens, equities, mortgages,
charges or other similar rights and the Company or one of its Subsidiaries has
good legal title to each of the other freehold and leasehold properties owned,
occupied or leased by any member of the Group (together with the Certificated
Properties THE PROPERTIES) each of which are unencumbered and free from all
liens, equities, mortgages, charges or other similar rights.
(23) No member of the Group is actually or contingently liable as an
original contracting party to or as a guarantor of any party to, or otherwise
contractually liable in respect of, any lease or leasehold property or licence
connected therewith other than the leases of the Properties.
(24) No member of the Group has any material obligation or liability,
absolute or contingent, with respect to pollution, hazardous substances or
environmental matters and there are no circumstances likely to give rise to the
same.
(25) The businesses, undertakings, Certificated Properties and other assets
of each member of the Group are insured to levels which the Warrantor Directors
consider to be reasonable having regard to the businesses carried on by the
Company or the Subsidiaries and against all risks against which the Company or
the Subsidiaries might reasonably be expected to insure in the particular
circumstances of the businesses carried on by them and such insurances include
all the insurances which the Company or any of the Subsidiaries are required
under the terms of any leases or any contracts in respect of the Certificated
Properties, or by any professional regulatory or governmental body or agency in
respect of the business and undertaking of the Company and its Subsidiaries to
undertake and such insurances are in full force and effect and there are no
circumstances which could render any of such insurances void or voidable and
there is no material insurance claim made by or against any member of the Group
pending, threatened or outstanding and all due premiums in respect thereof have
been paid.
PROCEEDINGS
(26) There is no litigation, arbitration, prosecution or other legal
proceedings or any governmental or official investigation or inquiry in
progress nor pending or threatened against the Company or any of its
Subsidiaries or against any person for whom any member of the Group is or may
be liable vicariously or otherwise (including in relation to the use of
intellectual property rights) which in any such case, either individually or
collectively, may have or have had during the twelve month period ending with
the date of this Agreement a material effect on the financial position of any
member of the Group
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<PAGE> 37
in the context of the Group as a whole or may be of material importance and
there are no circumstances known or which ought, on reasonable enquiry, to be
known to the Company or any of the Warrantor Directors that are likely to give
rise to any such litigation, arbitration or similar proceedings.
(27) No member of the Group has taken any action, nor have any other steps
been taken or legal proceedings started or threatened against any member of the
Group for its winding-up or dissolution, or for it or any member of the Group
to enter into any arrangement or composition for the benefit of creditors, or
for the appointment of a receiver, administrative receiver, trustee or similar
officer of any such member or its respective interests, properties, revenues or
assets.
SHARE CAPITAL ETC.
(28) The Company has power under its Certificate of Incorporation and
Bylaws to issue the Placing Shares in the manner proposed. The Company has
power under its Certificate of Incorporation and Bylaws to pay the fees,
commissions, costs and expenses provided in this Agreement and to enter into
and perform this Agreement and all sanctions or consents by members of the
Company or any class of them and other authorisations, approvals, consents and
licences required for the issue of the Placing Shares and the entering into of
this Agreement by the Company have been obtained and remain in full force and
effect. Each other member of the Group has full power and authority to enter
into and perform its obligations under this Agreement and the obligations
hereunder constitute valid and binding obligations of each of them (save in
each case to the extent (if at all) that any of the same shall constitute the
provision of unlawful financial assistance for the purposes of the Companies
Act 1985).
(29) All sums due in respect of the issued share capital of the Company at
the date of this Agreement have been paid to and received by the Company and,
save as disclosed in the Prospectus, there are in force no options, warrants or
other agreements which require or may require, or confer any right to require,
the issue of any Shares or other securities (or rights of registration in
respect of the same) of any member of the Group now or at any time hereafter.
None of the owners or holders of any of the share capital of the Company shall,
with effect from Admission, have any rights, in his capacity as such, in
relation to any member of the Group other than as set out in the Certificate of
Incorporation and Bylaws of the Company.
(30) The allotment and issue of the Placing Shares, the Placing, the
distribution of the Placing Documents and any other document by or on behalf of
the Company in connection with the Placing and the admission of the Shares to
the Official List of the London Stock Exchange will comply with all agreements
to which any member of the Group is a party or by which any such member is
bound and will comply with all applicable laws and regulations of the United
Kingdom and/or the United States of America (including, without limitation, the
FSA and the Listing Rules) and will not exceed or infringe any restrictions or
the terms of any contract, obligation or commitment by or binding upon the
board of Directors of any member of the Group, or, save as
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<PAGE> 38
disclosed in the Prospectus, result in the imposition or variation of any
rights or obligations of any member of the Group.
(31) Save as set out in the Prospectus, the Company or one of its
Subsidiaries, or one of the Company's associates, is the beneficial owner free
from all encumbrances of the whole of the issued share capital of each of the
Subsidiaries of which details are provided in the Prospectus.
(32) Neither the Company nor any of its Subsidiaries has any Subsidiary
required by the Listing Rules to be disclosed in listing particulars which is
not listed in the Prospectus.
SHARE OPTIONS
(33) The particulars of the Stock Incentive Plan of the Company contained
in paragraph 8 of Part 7 of the Prospectus and, in particular, the information
as to the dates on which options may be exercised and the number (and price) of
options granted (conditionally or otherwise) on or before the date of this
Agreement are accurate and not misleading.
(34) Apart from the Stock Incentive Plan referred to in warranty 33 above,
neither the Company nor any of its Subsidiaries has any arrangements in force
capable of enabling shares in their respective share capital to be acquired or
disposed of by or for the benefit of employees, directors, officers or agents
of the Company or any of its Subsidiaries or any third party.
TAXATION
(35) No member of the Group is or has ever been a 51% or 75% subsidiary (as
defined in section 838 of the Taxes Act) of any company which is not a member
of the Group. BLB acknowledges that in excess of 51% of the issued share
capital of PAL was owned by Schroder International Trust Company Limited prior
to the acquisition of PAL by the Company.
(35A) PAL has not ceased to be a member of a group of companies in
circumstances in which a charge under sections 178 or 179 of the Taxation of
Chargeable Gains Act 1992 (deemed disposal of chargeable assets) has arisen or
could arise (other than as part of a merger to which section 181 of that Act
applies) or section 21 of the Development Land Tax Act 1976 (deemed disposal of
relevant interest) could apply.
(36) No member of the Group is or has been treated as a member of a group
for the purposes of VAT legislation with any company which is not a member of
the Group and has not applied for such treatment.
(37) Each member of the Group has duly made all returns, given all notices
and supplied all information required to be supplied to all relevant tax
authorities and all such returns were made, notices given or information
supplied within any appropriate time
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<PAGE> 39
limit or if made outside such appropriate time limits, the Group will not incur
any material liability in respect of any such late provision or supply; all
such information was and remains complete and accurate in all material respects
and all such returns and notices were and remain complete and accurate in all
material respects and were made on a proper basis; and no member of the Group
is involved in any material dispute or investigation with any tax authority and
there are no facts which are likely to cause any such material dispute or
investigation.
(38) Each member of the Group is and has at all times been resident for tax
purposes in its place of incorporation and (save for the branch of the Company
in the United Kingdom) is not and has not been treated as resident in any other
jurisdiction for any tax purpose (including any double taxation arrangement).
(39) Each member of the Group is, to the extent required, registered for
the purposes of VAT or any equivalent tax in any other relevant jurisdiction
and has complied in all material respects with the terms of legislation
relating to VAT or such equivalent tax.
(40) All documents which establish or are necessary to establish the title
of any member of the Group to any material asset have (where applicable) been
duly stamped and any stamp duties or similar duties, transfer taxes or charges
have been duly paid.
(41) No member of the Group other than PAL is, or at any time within the
previous six years has been, a close company as defined in section 414 of the
Taxes Act. PAL:
(a) has not made any transfers of value within section 94 of the
Inheritance Act 1984;
(b) is not and has not at any time been a close investment-holding company
as defined in section 13A of the Taxes Act: and
(c) has not since 25 May 1983 done anything so as to give rise to an
assessment or any charge to tax under section 419 (as extended by
section 422) of the Taxes Act (loans to participators and associates).
(42) All National Insurance contributions and sums payable to the Inland
Revenue under the P.A.Y.E. system and any amounts of a corresponding nature
payable to any foreign tax authority due and payable by any member of the Group
up to the date hereof have been paid and each Group member has made all
deductions and retentions as should have been made under sections 203 to 203I
of the Taxes Act and all regulations made thereunder or under any comparable
laws or regulations of any relevant foreign jurisdiction.
MISCELLANEOUS
(43) Each member of the Group has at all times and in all material respects
properly and accurately maintained all books, accounts and records required by
applicable law to be maintained and has filed with any regulatory or public
body in any jurisdiction all documents and other notifications required to be
filed by the laws or regulatory
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<PAGE> 40
requirements of any such jurisdiction, including, without limitation, with the
Securities and Exchange Commission of the United States of America and so far
as the Warrantor Directors are aware no fines or other penalties are payable or
may be imposed in respect of any late filing by any member of the Group.
(44) Upon Admission the Company will have no share capital other than the
Shares ranking equally in all respects and, save as disclosed in the Prospectus,
no other securities or other obligations of any kind.
(45) Each of the Company and the Subsidiaries has at all times complied in
all material respects with any rights of pre-emption or similar rights whether
arising pursuant to a written agreement or otherwise in respect of the Shares
or the shares in the capital of each Subsidiary or in respect of the issue of
any options, warrants or other rights in respect of any of the same.
(46) The statements of fact as set out in the recitals to this Agreement
are insofar as they relate to the Company true and accurate in all respects.
(47) The Directors are all the present directors of the Company.
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<PAGE> 41
EXECUTED AND DELIVERED )
as a DEED by THERAPEUTIC )
ANTIBODIES INC. )
acting by: )
Director Martin S Brown
Director Timothy Chard
EXECUTED AND DELIVERED )
as a DEED by POLYCLONAL )
ANTIBODIES LIMITED )
acting by )
Director Timothy Chard
Director A J Kazimi
EXECUTED AND DELIVERED )
as a DEED by TAB WALES )
LIMITED )
acting by )
Director Timothy Chard
Director A J Kazimi
EXECUTED AND DELIVERED )
as a DEED by TAB LONDON )
LIMITED )
acting by )
Director Timothy Chard
Director A J Kazimi
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<PAGE> 42
SIGNED as a DEED and )
DELIVERED by MARTIN BROWN ) Martin S Brown
in the presence of: )
Witness - Signature: Ian McIntyre
Name: Ian R. McIntyre
Address: ) 27 Chancery Lane
) London WC2A 1PA
SIGNED as a DEED and ) Harry Browne by
DELIVERED by HARRY BROWNE ) his attorney Martin S Brown
in the presence of: )
Witness - Signature: Ian McIntyre
Name: Ian R. McIntyre
Address: ) 27 Chancery Lane
) London WC2A 1PA
SIGNED as a DEED and ) A J Kazimi by his
DELIVERED by A J KAZIMI ) attorney Martin S Brown
in the presence of: )
Witness - Signature: Ian McIntyre
Name: Ian R. McIntyre
Address: ) 27 Chancery Lane
) London WC2A 1PA
SIGNED as a DEED and ) John Landon by his
DELIVERED by JOHN LANDON ) attorney Martin S Brown
in the presence of: )
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<PAGE> 43
Witness - Signature: Ian McIntyre
Name: Ian R. McIntyre
Address: ) 27 Chancery Lane
) London WC2A 1PA
SIGNED as a DEED and )
DELIVERED by TIMOTHY CHARD ) Timothy Chard
in the presence of: )
Witness - Signature: Ian McIntyre
Name: Ian R. McIntyre
Address: ) 27 Chancery Lane
) London WC2A 1PA
SIGNED as a DEED and ) Thomas Andrews
DELIVERED by THOMAS ) by his attorney
ANDREWS ) Martin S Brown
in the presence of: )
Witness - Signature: Ian McIntyre
Name: Ian R. McIntyre
Address: ) 27 Chancery Lane
) London WC2A 1PA
SIGNED as a DEED and ) Robin Baillie
DELIVERED by ROBIN BAILLIE )
in the presence of: )
Witness - Signature: Ian McIntyre
Name: Ian R. McIntyre
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<PAGE> 44
Address: ) 27 Chancery Lane
) London WC2A 1PA
SIGNED as a DEED and ) Robert Hilton
DELIVERED by ROBERT HILTON ) by his attorney
in the presence of: ) Martin S Brown
Witness - Signature: Ian McIntyre
Name: Ian R. McIntyre
Address: ) 27 Chancery Lane
) London WC2A 1PA
SIGNED as a DEED and ) Steven Stroup by
DELIVERED by STEVEN STROUP ) his attorney Martin S Brown
in the presence of: )
Witness - Signature: Ian McIntyre
Name: Ian R. McIntyre
Address: ) 27 Chancery Lane
) London WC2A 1PA
SIGNED as a DEED and ) Joseph Williams
DELIVERED by JOSEPH WILLIAMS ) by his attorney
in the presence of: ) Martin S Brown
Witness - Signature: Ian McIntyre
Name: Ian R. McIntyre
Address: ) 27 Chancery Lane
) London WC2A 1PA
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<PAGE> 45
EXECUTED AND DELIVERED )
as a DEED by )
THE BRITISH LINEN ) Anthony Brown
BANK LIMITED )
acting by its duly
authorised signatory )
Page 42
<PAGE> 1
AGISTMENT AGREEMENT dated 29th. August 1996
BETWEEN:
MARTINDALE HOLDINGS PTY LTD (ACN 007 936 834) of PO Box 24 Mintaro 5415 ("MH")
AND:
TAb AUSTRALIA PTY LTD (ACN 062 369 724) of 27 Old Belair Road, Belair 5052
("TAb")
INTRODUCTION
A. MH is the registered proprietor of land at Mintaro SA known as
Martindale.
B. TAb wishes to agist sheep at Martindale, during which time the sheep
will be immunised in preparation for bleeding as part of TAb's
antibody raising program.
C. MN agrees to agist TAb's sheep at Martindale on the terms of this
agreement.
TERMS
1. INTERPRETATION
In this agreement
1.1 singular includes plural and vice versa
1.2 headings do not affect interpretation
1.3 no rule of construction applies to the disadvantage of a party
because that party put forward this agreement or any portion
of it
1.4 the introduction is correct and forms part of this agreement.
2. AGISTMENT
2.1 MH will agist TAb's sheep at Martindale from 1 September 1996
to 31 May 1997 for the fees and upon the terms set out in this
agreement.
2.2 TAb may only agist wethers and ewes at Martindale.
2.3 TAb may only agist a maximum of 2500 sheep at Martindale.
3. FEES
3.1 TAb will pay MH and agistment fee of $1.50 per sheep per week
calculated on the maximum number of TAb's sheep agisted during
that week.
3.2 The agistment fee will be paid calendar monthly in arrears
upon invoice from MH.
3.3 TAb will pay each invoice within 28 days of receipt of the
invoice.
<PAGE> 2
4. LICENSE
MH grants a license during the term of this agreement for any TAb
employee or other person acting for TAb to enter Martindale at any reasonable
time for.
4.1 injecting and immunising the sheep;
4.2 providing veterinary services;
4.3 branding, stock checks, routine animal care, mustering,
droving, shearing and crutching to the extent that these
services are not provided by MH;
4.4 any other purpose in relation to this agreement.
5. PROPERTY
5.1 All sheep introduced by TAb to Martindale pursuant to this
agreement remain the property of TAb.
5.2 All wool taken from TAb sheep is the property of TAb.
6. ANIMAL CARE
6.1 TAb and MH will agree on methods for handling the sheep which
are designed to minimise the risk of illness and disease
during the term of this agreement. A preventative approach to
common diseases will be taken, including the use of
Footbathing, Ivomec drenching, 6-in-1 vaccination and lice
control.
6.2 TAb, in consultation with a nominated veterinarian, will take
all reasonable steps to meet MH requirements regarding the
introduction of animals onto Martindale.
6.3 Animals newly introduced to Martindale by TAb will be treated
for external parasites at the earliest opportunity after
shearing or, where shearing is not due for some time, will be
treated with a long wool treatment (eg. Vanquish).
6.4 TAb will advise MH of the health status and origin of animals
and, where possible, provide copies of any inspection
certification.
7. TAb'S OBLIGATIONS
7.1 TAb will deliver and collect its sheep from Martindale at its
own cost.
7.2 TAb will ensure as far as is practicable that its sheep are
free from illness and disease when delivered to Martindale.
7.3 TAb, at its cost, will engage veterinary and other specialist
services and farm labour to manage TAb's sheep to the extent
that such services are not provided by MH.
7.4 TAb will provide all materials (or reimburse MH at cost for
any materials) in relations to vaccination and other
veterinary care of TAb's sheep, including dips, drenches and
shearing requisites.
7.5 TAb, at its own cost and in consultation with MH, will provide
any plant and equipment in relation to handling TAb's sheep
not ordinarily provided as part of commercial sheep agistment.
<PAGE> 3
7.6 TAb is to obtain the following insurance and provide evidence
of such insurance to MH upon request:
7.61 livestock insurance in respect of TAb's sheep
at Martindale;
7.62 public liability insurance in respect of
TAb's sheep, property and personnel at
Martindale.
7.7 TAb will register a brand for TAb's sheep and
advise MH of this brand upon registration.
TAb will ensure that TAb's sheep are branded
with the registered brand.
8. MH'S OBLIGATIONS
8.1 MH will arrange, in consultation with TAb, and at TAb's cost
(but subject to clause 8.9):
8.1.1 for TAb's sheep to be shorn twice yearly (in
September and March);
8.1.2 for regular crutching of TAb's sheep.
8.2 MH will, at its cost, maintain adequate fencing and water
supplies in the paddocks in which TAb's sheep are agisted.
8.3 MH will maintain and repair its facilities and plant and
equipment at Martindale which are used for agisting TAb's
sheep unless such facilities or plant and equipment are
damaged by TAb's servants, agents or contractors in which case
TAb will bear the cost of repairing such facilities or plant
and equipment.
8.4 MH will seek to maintain TAb's sheep with a condition score of
3 to 3.5 and, once mature, at a live weight of greater than 75
kilograms. MH will, if necessary to fulfill this obligation
and at its cost, provide 3 months supplementary feeding per
calendar year. TAb will pay for any additional feeding at
cost.
8.5 MH will provide general pasture and a standard animal
husbandry necessary to comply with its obligations under this
agreement.
8.6 MH will comply with all reasonable protocols with respect to
the management and care of the sheep and schedules of animal
treatment as are determined by TAb after consultation with MH.
8.7 MH will follow all normal and recommended practices for
control of external and internal parasites and diseases in
consultation with TAb.
8.8 As far as practicable, MH will ensure that all rams are kept
away from any of TAb's ewes agisted pursuant to this
agreement.
8.9 MH will provide labour equivalent to half of one full time
employee in relation to TAb's sheep to conduct stock checks (5
days per week), routine animal care, mustering, droving,
shearing, cruitching and assisting on the immunising days plus
any other farm related miscellaneous activities. MH may, will
the approval of TAb and at TAb's cost, provide additional
labour to care for TAb's sheep. TAb will pay for any other
labour in relation to its sheep.
<PAGE> 4
8.10 MH will provide to TAb for no additional fee, on an as needs
basis and subject to mutual agreement (which will not be
unreasonably withheld by either party) limited access to
laboratory and office space at Martindale.
9. FORCE MAJEURE
A party is not liable for failure to perform this agreement to the
extend and for so long as its performance is prevented or delayed
because of circumstances outside the party's direct control and
without fault or negligence by the party, but only if that party
9.1 immediately gives written notice to the other party
9.2 does everything reasonable to remedy the cause quickly.
10. NO WAIVER
A party waives a right under this agreement only by written notice
that it waives that right.
11. AMENDMENT
This agreement can only be amended by written agreement of both
parties.
EXECUTED as an agreement
SIGNED by Robert George Edwards 29/8/96
- ------ -------------------------------------
for an on behalf of TAb Australia Pty Ltd
---------------------
SIGNED by Ian Leslie Bidstrup
- ------ -----------------------
for an on behalf of Martindale Holdings Pty Ltd
---------------------------
<PAGE> 1
THERAPEUTIC ANTIBODIES INC Exhibit 11
STATEMENT RE: COMPUTATION OF PER SHARE EARNINGS
<TABLE>
<CAPTION>
FOR THE CUMULATIVE
DEVELOPMENT STAGE
FOR THE NINE MONTHS ENDED FROM AUGUST 10, 1984
SEPTEMBER 30, (INCEPTION) THROUGH
1996 1995 SEPTEMBER 30, 1996
------------ ------------ ------------
<S> <C> <C> <C>
ACTUAL
Weighted average shares outstanding 17,782,690 14,936,563 8,626,653
============ ============ ============
Net loss $(10,690,257) $ (6,466,084) $(40,508,805)
============ ============ ============
Net loss per share $ (0.60) $ (0.43) $ (4.70)
============ ============ ============
PRIMARY
Weighted average shares outstanding 17,782,690 14,936,563 8,626,653
============ ============ ============
Dilutive effect of stock options and warrants 2,151,527 1,395,654 2,151,527
------------ ------------ ------------
19,934,216 16,332,217 10,778,180
============ ============ ============
Net loss $(10,690,257) $ (6,466,084) (40,508,805)
============ ============ ============
Net loss per share $ (0.54) $ (0.40) $ (3.76)
============ ============ ============
FULLY DILUTED
Weighted average shares outstanding 17,782,690 14,936,563 8,626,653
============ ============ ============
Dilutive effect of stock options and warrants 2,563,792 1,395,654 2,563,792
------------ ------------ ------------
20,346,482 16,332,217 11,190,445
============ ============ ============
Net loss $(10,690,257) $ (6,466,084) $(40,508,805)
============ ============ ============
Net loss per share $ (0.53) $ (0.40) $ (3.62)
============ ============ ============
</TABLE>
The dilutive effect of stock options and warrants is determined under the
treasury stock method utilizing fair values per share of $6.24 and $8.18 for
primary and fully diluted earnings per share in the nine months ended September
30, 1996, and a fair value per share of $4.00 for primary and fully diluted
earnings per share in the nine months ended September 30, 1995.
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> SEP-30-1996
<CASH> 24,380,702
<SECURITIES> 0
<RECEIVABLES> 229,269
<ALLOWANCES> 0
<INVENTORY> 195,037
<CURRENT-ASSETS> 25,352,505
<PP&E> 14,428,135
<DEPRECIATION> 3,015,493
<TOTAL-ASSETS> 37,484,127
<CURRENT-LIABILITIES> 3,491,799
<BONDS> 8,151,114
0
0
<COMMON> 21,522
<OTHER-SE> 25,340,411
<TOTAL-LIABILITY-AND-EQUITY> 37,484,127
<SALES> 547,965
<TOTAL-REVENUES> 1,214,722
<CGS> 266,137
<TOTAL-COSTS> 511,382
<OTHER-EXPENSES> 11,393,597
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,075,593
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 10,690,257
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 10,690,257
<EPS-PRIMARY> .53
<EPS-DILUTED> .53
</TABLE>
