EXHIBIT 4.7(E)
THE CONFIDENTIAL PORTIONS OF THIS EXHIBIT HAVE BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A CONFIDENTIAL TREATMENT REQUEST
IN ACCORDANCE WITH RULE 24B-2 OF THE SECURITIES AND EXCHANGE ACT OF 1934, AS
AMENDED. REDACTED PORTIONS OF THIS EXHIBIT ARE MARKED BY AN ***.
RIGHT PURCHASE AGREEMENT
(FOR THE PURCHASE OF A RIGHT TO ACQUIRE
CLASS C PREFERENCE SHARES)
THIS AGREEMENT is made on the 18th day of November, 2005,
BETWEEN:
CHIESI FARMACEUTICI S.P.A, a corporation incorporated under the
laws of Italy
("VENDOR")
-and-
VERNALIS PLC, a corporation incorporated under the laws of
England and Wales, with company number 2304992
("Vernalis")
-and-
Vernalis (Canada) Inc., a corporation incorporated under the laws
of New Brunswick
(the "PURCHASER")
RECITALS:
A. The Vendor and Cita Neuropharmaceuticals Inc. (the "CORPORATION") have
entered into a licence agreement, dated 14 March 2005, concerning the
CNP1512 compound, pursuant to which the Vendor has the right to acquire
(the "PURCHASED RIGHT") *** Class C Preference shares in the capital of the
Corporation.
B. Certain holders of warrants, conversion rights and options to acquire Class
A Preference Shares, Class D Preference Shares and common shares (the
"PRINCIPAL SHAREHOLDERS") in the capital of the Corporation, the Purchaser,
Vernalis and the
1
Corporation have entered into a share purchase agreement in the form set
out in Schedule 1 to this Agreement (the "PRINCIPAL PURCHASE AGREEMENT")
dated the same date as this Agreement whereby the Principal Shareholders
have agreed to sell to the Purchaser all of their shares in the capital of
the Corporation, including those issuable upon exercise of warrants,
conversion rights, options and other rights to acquire shares or securities
of the Corporation or to exchange certain options to acquire shares in the
capital of the Corporation (the "PRINCIPAL SHAREHOLDERS' SECURITIES").
C. The Vendor wishes to sell and assign, and the Purchaser wishes to purchase,
the Purchased Right, on and subject to the terms and conditions of this
Agreement.
D. The Purchaser is also entering into separate agreements with holders of
shares in the capital of the Corporation and holders of warrants,
conversion rights, options and other rights to acquire shares in the
capital of the Corporation to acquire all such shares and/or rights, in
each case other than the Principal Shareholders.
NOW THEREFORE in consideration of the mutual covenants and agreements contained
in this Agreement and other good and valuable consideration (the receipt and
sufficiency of which are acknowledged), the parties to this Agreement agree as
follows:
ARTICLE 1
INTERPRETATION
1.1 DEFINITIONS
In this Agreement,
1.1.1 "ADMISSION" means the admission of the Chiesi Vendor Placing Shares and
the Chiesi Non-Vendor Placing Shares to the Official List and admission of the
Chiesi Vendor Placing Shares and the Chiesi Non-Vendor Placing Shares to trading
on the London Stock Exchange plc;
1.1.2 "AGGREGATE NET PROCEEDS" has the meaning attributed to such term in
section 2.3.2;
1.1.3 "AGREEMENT" means this agreement and all schedules attached to this
agreement, in each case as they may be amended or supplemented from time to
time; and unless otherwise indicated, references to Articles and sections are to
articles and sections in this agreement;
1.1.4 "BANK" means ▇▇▇▇▇ ▇▇▇▇▇▇▇ Limited;
1.1.5 "BUSINESS DAY" means any day, other than Saturday, Sunday or any statutory
holiday in London, England;
2
1.1.6 "CASH REALISATION AGREEMENT" means the agreement between the Bank and the
Vendor in the form set out in Schedule 3 to this Agreement and to be dated the
same date as this Agreement;
1.1.7 "CHARGE" means any security interest, lien, charge, pledge, encumbrance,
mortgage, adverse claim or title retention agreement of any nature or kind;
1.1.8 "CHIESI LICENCE AGREEMENTS" has the meaning attributed to such term in the
Principal Purchase Agreement;
1.1.9 "CHIESI GROSS PROCEEDS" means the proceeds from the Vendor Placing related
to the Chiesi Vendor Placing Shares being the product of the total number of
Chiesi Vendor Placing Shares multiplied by the Placing Price;
1.1.10 "CHIESI NON-VENDOR PLACING SHARES" means *** Vernalis Shares to be
allotted and issued in accordance with section 2.3.1.1(a), but subject to
adjustment in accordance with section 2.3.5;
1.1.11 "CHIESI VENDOR PLACING" means the placing of all of the Chiesi Vendor
Placing Shares to certain placees nominated by the Bank and in accordance with
the terms of the Placing Agreement and/or the Subscription Agreements as the
case may be;
1.1.12 "CHIESI VENDOR PLACING SHARES" means *** Vernalis Shares to be allotted
and issued in accordance with section 2.3.1.1(b) and the Placing Agreement, but
subject to adjustment in accordance with section 2.3.5;
1.1.13 "CLOSING" means the completion of the sale and purchase of the Purchased
Right pursuant to this Agreement at the Time of Closing;
1.1.14 "FSMA" means the Financial Services and Markets ▇▇▇ ▇▇▇▇ (as amended);
1.1.15 "GROUP" means in relation to an undertaking, any parent undertaking
thereof or any subsidiary undertaking in respect of any of the above (as such
terms are used in the Companies Act 1985);
1.1.16 "LICENCE FEE WITHHOLDING TAX" has the meaning attributed to such term in
section 2.8.1;
1.1.17 "OFFICIAL LIST" means the official list maintained by the UKLA in
accordance with section 74(l) of FSMA;
1.1.18 "PERSON" means any individual, partnership, limited partnership, joint
venture, syndicate, sole proprietorship, company or corporation with or without
share capital, unincorporated association, trust, trustee, executor,
administrator or other legal personal representative, regulatory body or agency,
government or governmental agency, authority or entity however designated or
constituted;
3
1.1.19 "PLACING AGREEMENT" means the placing and open offer agreement between
Vernalis and the Bank in respect of, among other things, the placing of the
Chiesi Vendor Placing Shares, substantially in the form set out in Schedule 2 to
this Agreement;
1.1.20 "PLACING PRICE" has the meaning attributed to such expression in the
Placing Agreement;
1.1.21 "POUNDS STERLING" or "L" means lawful currency of the United Kingdom;
1.1.22 "PRESERVED RIGHTS" has the meaning attributed to such term in section
1.4;
1.1.23 "PROSPECTUS" means the combined prospectus and shareholder circular of
Vernalis intended to be issued by Vernalis on the date of this Agreement
substantially in the form initialed for the purposes of identification by or on
behalf of the parties;
1.1.24 "PROSPECTUS RULES" means the rules and regulations made by the Financial
Services Authority pursuant to section 84(l) of FSMA for the purposes of Part VI
of FSMA in relation to offers of securities to the public and admission of
securities to trading;
1.1.25 "PURCHASE PRICE" has the meaning attributed to such term in section 2.2;
1.1.26 "SUBSCRIPTION AGREEMENTS" means the subscription agreements in the form
set out at Schedule 4 to this Agreement to be entered into by Vernalis and
certain placees nominated by the Bank in connection with the Chiesi Vendor
Placing;
1.1.27 "TIME OF CLOSING" means such time on such date as determined pursuant to
the Principal Purchase Agreement;
1.1.28 "UKLA" means the Financial Services Authority, acting as UK Listing
Authority;
1.1.29 "UNITED STATES" or "US" means the United States of America, its
territories and possessions, any State of the United States and the District of
Columbia;
"US PERSON" means any Person (whether in the US or otherwise) who has the
benefit of or who is subject to any rights, powers or obligation under any
legislation or regulation in the United States applicable in relation to the
issue by Vernalis or the Bank (or any agents of either of them) of the
Prospectus, the US Private Placement Memorandum or any document supplemental to
either of them, or the marketing by Vernalis or the Bank (or any agents of
either of them) of the Chiesi Vendor Placing Shares;
1.1.30 "US PRIVATE PLACEMENT MEMORANDUM" has the meaning attributed to such term
in the Placing Agreement;
1.1.31 "VENDOR'S COMMISSION" means L*** per Chiesi Vendor Placing Share, being
the blended average amount of fees and commissions per Vernalis Share payable by
4
Vernalis to the Bank in respect of all Vernalis Shares (including the Chiesi
Vendor Placing Shares) placed pursuant to the Placing Agreement;
1.1.32 "VENDOR PLACING" has the meaning attributed to such term in the Principal
Purchase Agreement;
1.1.33 "VENDOR PLACING SHARES" has the meaning attributed to such term in the
Principal Purchase Agreement; and
1.1.34 "VERNALIS SHARES" means the ordinary shares of L0.05 each in the capital
of Vernalis.
1.2 HEADINGS
The inclusion of headings in this Agreement is for convenience of reference only
and shall not affect the construction or interpretation of this Agreement.
1.3 GENDER AND NUMBER
In this Agreement, unless the context otherwise requires, words importing the
singular include the plural and vice versa, words importing gender include all
genders or the neuter, and words importing the neuter include all genders.
1.4 ENTIRE AGREEMENT
1.4.1 Save for the matters set out in the Chiesi Licence Agreements, the
Prospectus and in the Cash Realisation Agreement, any statutory rights
granted to or statutory obligations imposed upon the parties (including,
for the avoidance of doubt, any liabilities of Vernalis pursuant to the
Financial Services and Markets ▇▇▇ ▇▇▇▇ (Official Listing of Securities)
Regulations 2001 and the right to compensation pursuant to section 90 of
FSMA in each case in relation to the issue of the Prospectus and the issue
of the Chiesi Non-Vendor Placing Shares) (the "PRESERVED RIGHTS"), this
Agreement:
(a) constitutes the entire agreement between the parties pertaining to the
purchase of the Purchased Right;
(b) supersedes all prior arrangements and understandings, whether written
or oral, relating to such subject matter in any way; and
(c) contains all warranties, conditions, or representations and there are
no agreements in connection with such subject matter except as
specifically set forth or referred to in this Agreement.
Save in respect of the Preserved Rights, no reliance is placed on any warranty,
representation, opinion, advice or assertion of fact made either prior to,
contemporaneous with, or after entering into this Agreement, or any amendment or
supplement to this Agreement, by either party to this Agreement or its
directors, officers, employees or
5
agents, to the other party to this Agreement or its directors, officers,
employees or agents, except to the extent that the same has been reduced to
writing and included as a term of this Agreement or as part of any of the
Preserved Rights, and neither of the parties to this Agreement has been induced
to enter into this Agreement or any amendment or supplement by reason of any
such warranty, representation, opinion, advice or assertion of fact save for in
each and every case any statutory rights granted to or statutory obligations
imposed upon the parties. Accordingly, there shall be no liability, either in
tort or in contract, assessed in relation to any such warranty, representation,
opinion, advice or assertion of fact, except to the extent contemplated above.
1.5 WAIVER, AMENDMENT
Except as expressly provided in this Agreement, no amendment or waiver of this
Agreement shall be binding unless executed in writing by the party to be bound
by such amendment or waiver. No waiver of any provision of this Agreement shall
constitute a waiver of any other provision nor shall any waiver of any provision
of this Agreement constitute a continuing waiver unless otherwise expressly
provided.
1.6 GOVERNING LAW
This Agreement shall be governed by and construed in accordance with English
law.
1.7 JURISDICTION
The parties each agree that the courts of England and Wales shall have
non-exclusive jurisdiction to settle any dispute between the parties whether
arising in connection with this agreement or otherwise. The parties to this
agreement irrevocably submit to the jurisdiction of the English Courts and
waives any objection to it, on the ground of inconvenient forum or otherwise. No
party shall oppose the recognition or enforcement of a judgment, order or
decision of those courts in respect of any such claim or dispute by the courts
of any state which, under the laws and rules applicable in that state, are
competent or able to grant such recognition. The Vendor appoints ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Process Service Limited of Carmelite, ▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ as its agent to receive on its behalf in England, service of any
proceedings in respect of this Agreement. The Purchaser appoints Vernalis as its
agent for service of process in respect of this Agreement. No document or
process shall be validly served on ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Process Service Limited unless
a copy is within 3 Business Days served on the Vendor in accordance with the
provisions of section 4.6.
6
ARTICLE 2
PURCHASE AND SALE
2.1 AGREEMENT TO PURCHASE AND SELL
Simultaneously with the completion of the purchase from the Principal
Shareholders of the Principal Shareholders' Shares pursuant to the Principal
Purchase Agreement, and subject to all the other terms of this Agreement, at the
Time of Closing the Vendor shall sell and assign, and the Purchaser shall (and
Vernalis shall procure that the Purchaser shall) purchase the Purchased Right.
The Purchaser shall not be obligated to purchase and the Vendor shall not be
obligated to sell or assign the Purchased Right in accordance with this
Agreement unless the sale or exchange of all of the Principal Shareholders'
Securities is completed simultaneously in accordance with the Principal Purchase
Agreement. Neither Vernalis nor the Purchaser shall agree to waive the Admission
Condition (as defined in the Principal Purchase Agreement) without the prior
approval of the Vendor.
2.2 PURCHASE PRICE
The aggregate purchase price (the "PURCHASE PRICE") to be paid by the Purchaser
to the Vendor for the Purchased Right shall be satisfied:
2.2.1 as to L*** by way of the allotment and issue by Vernalis to the Vendor (or
its nominee) of the Chiesi Non-Vendor Placing Shares; and
2.2.2 by way of the allotment and issue of the Chiesi Vendor Placing Shares to
such Persons (other than the Vendor) as the Bank shall nominate or, in
certain circumstances, failing such nomination, to the Bank with the net
proceeds thereof payable in each case in accordance with section 2.3.2.
2.3 SATISFACTION OF THE PURCHASE PRICE
2.3.1 Closing shall take place at the Time of Closing subject to:
2.3.1.1 the Purchase Price being satisfied by the Purchaser (or by Vernalis
on behalf of and at the direction of the Purchaser):
(a) allotting and issuing to the Vendor (or its nominee) the Chiesi
Non-Vendor Placing Shares, credited as paid in full, and
delivering to the Vendor (or its nominee) a share certificate in
respect of such Chiesi Non-Vendor Placing Shares and a copy of
the minutes of a meeting of the board of Vernalis evidencing, the
issue of such shares subject only to Admission to the Vendor (or
its nominee);
(b) allotting and issuing the Chiesi Vendor Placing Shares, credited
as paid in full, and delivering such Chiesi Vendor
7
Placing Shares to such Persons (other than the Vendor) as are
specified in section 2.2.2 above;
2.3.1.2 the Vendor delivering to the Purchaser a certificate issued
pursuant to section 116 of the Income Tax Act (Canada) on account of
the Purchase Price, provided that if such certificate is not delivered
at the Time of Closing and notwithstanding section 2.3.1.1, the
Closing shall still occur but:
(a) where the Aggregate Net Proceeds do not exceed the sum of L***
(the "WITHHOLDING AMOUNT"), the Purchase Price shall not be
satisfied in cash, or by the issue of the Chiesi Non-Vendor
Placing Shares, until the delivery by the Vendor to the Purchaser
of the certificate issued pursuant to section 116 of the Income
Tax Act (Canada) at which point (to the extent that by the time
of such delivery, the Withholding Amount has not been paid to the
Receiver General of Canada pursuant to and in accordance with
section 2.8.2):
(A) the Chiesi Non-Vendor Placing Shares shall, as soon as
practicable following such delivery, be allotted and issued
to the Vendor (or its nominee) credited as paid in full, and
a share certificate in respect thereof delivered to the
Vendor (or its nominee);
(B) the Purchaser and Vernalis shall procure that a sum equal to
the Withholding Amount is, as soon as practicable following
such delivery, paid to the Vendor by electronic funds
transfer to the account specified in section 2.3.3,
provided always that if at the time of delivery by the Vendor to
the Purchaser of the relevant certificate or its availability to
the Vendor, the Withholding Amount has been paid to the Receiver
General of Canada pursuant to section 2.8.2, the balance of the
Chiesi Non-Vendor Placing Shares and cash remaining after the
remittance of such Withholding Amount shall be so allotted,
issued and/or paid to the Vendor;
(b) where the Aggregate Net Proceeds exceed the Withholding Amount,
the Purchase Price shall be satisfied in part by the issue to the
Vendor (or its nominee) of the Chiesi Non-Vendor Placing Shares
credited as paid in full and the delivery of a share certificate
in respect thereof to the
8
Vendor (or its nominee) at the Time of Closing and the payment to
the Vendor in cash at the Time of Closing of an amount equal to
the difference between the Aggregate Net Proceeds and the
Withholding Amount, and the Withholding Amount shall be retained
by the Purchaser or Vernalis until the earlier of:
(A) the date of delivery by the Vendor to the Purchaser of the
certificate issued pursuant to section 116 of the Income Tax
Act (Canada) at which time the Withholding Amount shall be
paid to the Vendor as soon as practicable following such
delivery; and
(B) the date upon which the Purchaser or Vernalis is required
(taking into account any extension as referred to in section
2.8.2) to remit the Withholding Amount to the Receiver
General of Canada pursuant to section 2.8.2, at which time,
such Withholding Amount shall, subject to section 2.8.2, be
so remitted.
2.3.2 The Vendor hereby confirms and authorises the Purchaser and Vernalis (or
the Bank, as appropriate) that out of the Chiesi Gross Proceeds, they are
entitled to deduct and retain the Vendor's Commission. Subject to section
2.3.5 of this Agreement, the proceeds of the Chiesi Vendor Placing payable
by the Bank and/or Vernalis to the Vendor shall be L*** per Chiesi Vendor
Placing Share, being the proceeds per Chiesi Vendor Placing Share in Pounds
Sterling (net of Vendor's Commission) and being an aggregate net sum of
L*** (the "AGGREGATE NET PROCEEDS"). Of the Aggregate Net Proceeds:
2.3.2.1 subject to section 2.3.5, Vernalis shall pay (and the Purchaser
shall procure the payment by Vernalis of) the sum of L0.00 being an
amount equal to the net proceeds attributable to the Chiesi Vendor
Placing Shares to be issued and allotted pursuant to the Subscription
Agreements; and
2.3.2.2 it is acknowledged that the Bank is obliged to pay the balance of
such Aggregate Net Proceeds (in case of the remaining Chiesi Vendor
Placing Shares) to the Vendor under the Cash Realisation Agreement,
in each case in cash to the Vendor (or its nominee) and within 3 Business
Days of the Time of Closing in respect of proceeds under section 2.3.2.2
but otherwise within banking hours on the day of Closing (or in either case
at such later date as provided for in section 2.3.1.2) by electronic funds
transfer to account of the Vendor's solicitors as follows:
9
Bank: National Westminster Bank
Law Courts
Temple Bar Branch
▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
Sort code: ***
Client account number: ***
2.3.3 The Purchaser shall cause Vernalis to deliver the Chiesi Non-Vendor
Placing Shares to the Vendor in accordance with section 2.3.1.1(a) and the
Chiesi Vendor Placing Shares to Persons nominated by the Bank, or to the
Bank, as applicable, in accordance with section 2.2.2 and the Subscription
Agreements.
2.3.4 The Vendor hereby undertakes to (and the Purchaser and Vernalis undertake
to procure that the Bank will) enter into, execute and/or deliver, on the
date of this Agreement the Cash Realisation Agreement.
2.3.5 To the extent that placees do not subscribe for all of the Chiesi Vendor
Placing Shares, and where the Bank has no obligation under the Placing
Agreement to subscribe for such remaining Chiesi Vendor Placing Shares
itself, the Vendor and the Purchaser shall procure that in so far as
Vernalis Shares are subscribed for by placees under the Vendor Placing
(whether under the Subscription Agreements or in connection with the
Placing Agreement) or by the Bank under the Placing Agreement, they shall
be attributed first in respect of up to the number of the Chiesi Vendor
Placing Shares not otherwise placed or subscribed for and therefore the
Vendor and the Purchaser shall procure that the net proceeds therefrom
shall be due and paid first to the Vendor (or its nominee). If after having
given effect to such priority there remain any Chiesi Vendor Placing Shares
that shall not have been subscribed for, then any such balance of Chiesi
Vendor Placing Shares shall be deemed to be additional Chiesi Non-Vendor
Placing Shares and will be allotted and issued to the Vendor, in accordance
with section 2.3.1.1(a), and the net proceeds payable to the Vendor (or its
nominee) in accordance with section 2.2 and 2.3.2 shall be reduced
accordingly.
2.4 TERMS OF PLACING OF CHIESI VENDOR PLACING SHARES
Vernalis covenants that subject to section 2.3, the terms on which any Vernalis
Shares are to be placed with placees (as described in the Prospectus) in
connection with the Principal Purchase Agreement and the basis of placing of
such Vernalis Shares shall not be in any material respect different from the
terms and the basis of the placing of the Chiesi Vendor Placing Shares provided
always that Vernalis and the Purchaser shall procure that the Chiesi Vendor
Placing Shares shall be placed (whether under the Subscription Agreements or the
Placing Agreement) or otherwise underwritten by the Bank in accordance with the
Placing Agreement in priority to any other Vendor Placing Shares.
10
2.5 RESALE RESTRICTIONS ON CHIESI NON-VENDOR PLACING SHARES
The Chiesi Non-Vendor Placing Shares allotted and issued to the Vendor shall be
entitled to be sold in accordance with applicable securities law requirements,
provided however in order to ensure the maintenance of an orderly market in
Vernalis Shares after the Time of Closing, the Vendor, if issued and allotted in
excess of *** Chiesi Non-Vendor Placing Shares, covenants, subject to clause
2.6, not to dispose of those shares on or before the announcement by Vernalis of
the results of the pivotal efficacy study for the Purchaser's Frovatriptan MRM
prophylaxis development programme (the "LOCK-IN PERIOD"), except:
2.5.1 with the prior approval of Vernalis (such approval not to be
unreasonably withheld or delayed) and provided that such sale takes
place through Vernalis' designated brokers in London and that such
brokers are able to sell such shares on commercially reasonable terms
in accordance with applicable regulatory requirements;
2.5.2 a sale of fewer than *** Chiesi Non-Vendor Placing Shares in any
given five day trading period by the Vendor;
2.5.3 a disposal pursuant to a court order or in acceptance of an offer by
Vernalis to buy back its own shares; or
2.5.4 to accept a general offer made for all of the outstanding Vernalis
Shares (other than Vernalis Shares held by the offeror and/or Persons
acting in concert with the offeror), or to execute an irrevocable
commitment to accept such a general offer, or a disposal or agreement
to dispose of shares to a Person who has made or announced his
intention to make, or has a bona fide intention to make, such an
offer.; or
2.5.5 to another member of the Vendor Group ("CHIESI COMPANY") provided
that equivalent restrictions to these contained in sections 2.5 and
2.6 apply to such Chiesi Company.
2.6 The Vendor shall be free to sell its Chiesi Non-Vendor Placing Shares
without reference to the restrictions set forth in sections 2.5.1 to 2.5.5
inclusive at any time after the earlier of:
2.6.1 an announcement by Vernalis of the results of the pivotal efficacy
study for Vernalis' Frovatriptan MRM prophylaxis development
programme; and
2.6.2 30 June 2006.
2.7 WITHDRAWAL RIGHTS
11
The Vendor shall not exercise, or attempt to exercise, any right or
entitlement which may be applicable to, or enforceable by, it under section
87(Q) of the FSMA. The Vendor acknowledges that the issue of Vernalis
Shares to it under this Agreement is by way of a bilateral contract and as
such section 87(Q) does not entitle it to withdraw in the event that
Vernalis publishes a supplementary prospectus. The Vendor further covenants
in favour of Vernalis that, in the event it is so entitled to withdraw, by
signing this Agreement it is confirming its acceptance of the offer of
Vernalis Shares contained in this Agreement on the same terms immediately
after such withdrawal.
2.8 UNPAID WITHHOLDING TAXES
2.8.1 Vernalis and the Purchaser jointly and severally undertake to procure
that, as soon as practicable following (and in any event within 14 days of)
the Time of Closing, the Corporation shall remit to the Receiver General
for Canada the Canadian Dollar equivalent of the sum of US$ *** in respect
of all due but unpaid withholding tax liabilities arising on account of the
payment of licence fees by the Corporation to the Vendor pursuant to the
Chiesi Licence Agreements (the "LICENCE FEE WITHHOLDING TAX") together with
a further amount equal to all penalties, fines and interest arising as a
consequence of the late payment of any of the Licence Fee Withholding Tax.
Simultaneously with such payment (or as soon as reasonably practicable
thereafter) Vernalis and the Purchaser shall procure that the Corporation
delivers to the Vendor a certificate of payment of the Licence Fee
Withholding Tax from the relevant taxation authority in relation to that
payment and shall further procure the delivery to the Vendor of such other
documentation as the Vendor may reasonably require from time to time to
enable it to file for and obtain tax credits in respect of the payment of
the Licence Fee Withholding Tax.
2.8.2 Without prejudice to the other obligations of Vernalis and the Purchaser
pursuant to this section 2.8 and subject to section ▇.▇.▇.▇:
2.8.2.1 the Purchaser or Vernalis shall be entitled to deduct or withhold
from any consideration payable to the Vendor, and remit such amount to
the Receiver General for Canada, the Withheld Amount (being the amount
which may be required to be deducted or withheld under applicable law
as a consequence of the non-delivery at or prior to the Time of
Closing of the certificate referred to in section 2.3.1.2) provided
that neither of them shall actually remit the Withheld Amount to the
Receiver General for Canada prior to the time at which such action is
legally required to be taken, taking into account any extension of
time granted by the Canada Revenue Agency, whether indicated in any
letter from the Canada Revenue Agency (in a form to the reasonable
satisfaction of the Purchaser) (the "REVENUE COMFORT LETTER")
confirming that the Withheld Amount need not be remitted for the
period referred to in the Revenue Comfort Letter, or otherwise;
12
2.8.2.2 in the event that the Purchaser or Vernalis is legally required to
remit the Withheld Amount to the Receiver General for Canada as a
consequence of the non-delivery at or prior to the Time of Closing of
the certificate referred to in section 2.3.1.2 and in the absence of
any extension of time for payment granted by the Receiver General of
Canada in any Revenue Comfort Letter or otherwise, then simultaneously
with such payment (or as soon as reasonably practicable thereafter)
Vernalis or the Purchaser shall deliver to the Vendor a certificate of
payment of the Withheld Amount from the relevant taxation authority in
relation to that payment and shall further procure the delivery to the
Vendor of such other documentation as the Vendor may reasonably
require from time to time to enable it to file for and obtain tax
credits in respect of the payment of the Withheld Amount.
2.8.3 The Purchaser and Vernalis confirm that, save as specified in section
2.3.1.2, they are not aware of any additional requirement or entitlement to
deduct or withhold any amount from the Purchase Price under any applicable
law. Subject to the provisions of section 2.3.1.2, to the extent that any
such deduction or withholding in respect of the Purchase Price is required
to be made under any applicable law by any of the Purchaser, Vernalis, the
Corporation or the Bank, the Purchaser and Vernalis shall promptly pay (or
procure the payment of) the amount deducted or withheld to the relevant
taxation authority and deliver (or procure the delivery) to the Vendor of a
certificate of payment from the relevant taxation authority in relation to
that payment. The Purchaser and Vernalis shall further deliver (or procure
the delivery) to the Vendor of such other documentation as the Vendor may
reasonably require from time to time to enable it to file for and obtain
tax credits in respect of such payment.
ARTICLE 3
REPRESENTATIONS, WARRANTIES AND INDEMNITY
3.1 VENDOR'S REPRESENTATIONS AND WARRANTIES
The Vendor hereby represents and warrants to each of the Purchaser and Vernalis
and the Vendor acknowledges that each of the Purchaser and Vernalis is relying
upon the following representations and warranties in connection with the
purchase of the Purchased Right, that as at the date of this Agreement the
following statements are true and accurate (and such representations and
warranties shall be deemed to be repeated at the Time of Closing):
3.1.1 INCORPORATION. It is duly incorporated and validly existing under the
laws of its jurisdiction of incorporation.
3.1.2 CAPACITY AND DUE AUTHORIZATION. It has the corporate power and
capacity to enter into, and to perform its obligations under, this
Agreement.
13
3.1.3 ENFORCEABILITY. This Agreement has been duly authorized, executed and
delivered by it and is valid and binding obligation, enforceable against it
in accordance with its terms, subject to the nature of the remedies
available in the English courts, the acceptance by such courts of
jurisdiction, the powers of such courts to stay proceedings and other
principles of law and equity of general application and all limitations
resulting from the laws of bankruptcy, insolvency, liquidation or other
laws affecting generally the enforcement of creditors rights.
3.1.4 TITLE TO, AND RIGHT TO, SELL PURCHASED RIGHT. It is the owner of the
Purchased Right and has not created any Charges over the Purchased Right.
It is not the registered or beneficial owner of any shares or securities of
the Corporation nor is it party to or entitled to any agreements, options,
warrants, conversion rights or other rights to acquire shares or securities
of the Corporation other than pursuant to the Purchased Right. The Vendor
has not entered into any agreement or restriction which in any way limits
or restricts the transfer to the Purchaser of the Purchased Right nor are
there any shareholders agreements, pooling agreements, voting trusts or
other agreements or understandings to which the Vendor is party and by
which it may be bound with respect to the voting of its Purchased Right or
the Class C Preference shares issuable upon exercise of the Purchased
Right.
3.1.5 NO CONTRAVENTION. None of the entering into of this Agreement nor the
performance by it of any of its obligations under this Agreement will
contravene, breach or result in any default under its articles, by-laws,
constating documents or other organizational documents, if applicable, or
under any mortgage, lease, agreement, other legally binding instrument,
licence, permit, statute, regulation, order, judgment, or decree or law to
which it is a party or by which it may be bound subject always to the
compliance by the Purchaser with its obligations pursuant to this
Agreement.
3.1.6 CONSENTS AND APPROVALS. No authorization, consent or approval of, or
filing with or notice to, any governmental agency, regulatory body, court
or other Person is required in connection with the execution, delivery or
performance by the Vendor of this Agreement or the sale by it of the
Purchased Right under this Agreement.
3.1.7 U.S. SECURITIES LAWS. It is not located or resident in the United
States for securities law purposes.
3.2 PURCHASER'S AND VERNALIS' REPRESENTATION AND WARRANTIES
The Purchaser and Vernalis each jointly and severally represents and warrants to
the Vendor and acknowledges that the Vendor is relying upon the following
representations and warranties in connection with its sale of the Purchased
Right, that as at the date of this Agreement, the following statements are true
and accurate (and such representations and warranties shall be deemed to be
repeated at the Time of Closing):
14
3.2.1 INCORPORATION AND STATUS. The Purchaser is duly incorporated and
validly existing under the laws of New Brunswick. Vernalis is duly
incorporated and existing under the laws of England and Wales.
3.2.2 CORPORATE POWER AND DUE AUTHORIZATION. The Purchaser and Vernalis
each has the corporate power and capacity to enter into, and to perform its
obligations under, this Agreement, subject to the approval of the
shareholders of Vernalis, publication of the Prospectus, and Admission.
This Agreement has been duly authorized by the board of directors of each
of the Purchaser and Vernalis. This Agreement has been duly executed and
delivered by each of the Purchaser and Vernalis.
3.2.3 ENFORCEABILITY. This Agreement is a valid and binding obligation of
the Purchaser and Vernalis, enforceable in accordance with its terms,
subject to the nature of the remedies available in the English courts, the
acceptance by such courts of jurisdiction, the powers of such courts to
stay proceedings and other principles of law and equity of general
application and all limitations resulting from the laws of bankruptcy,
insolvency, liquidation or other laws affecting generally the enforcement
of creditors rights..
3.2.4 NO CONTRAVENTION. None of the entering into of this Agreement nor the
performance by the Purchaser nor Vernalis of any of its obligations under
this Agreement will contravene, breach or result in any default under its
articles, by-laws, constating documents or other organizational documents
or under any mortgage, lease, agreement, other legally binding instrument,
licence, permit, statute, regulation, order, judgment, decree or law
including without limitation the relevant provisions of the Companies ▇▇▇
▇▇▇▇, the FSMA and the Prospectus Rules, to which it is a party or by which
it may be bound.
3.2.5 CONSENTS AND APPROVALS. No authorization, consent or approval of, or
filing with or notice to, any governmental agency, regulatory body, court
or other Person is required in connection with the execution, delivery or
performance by the Purchaser nor Vernalis of this Agreement nor the
performance by it of any of its obligations, subject to shareholder and
regulatory approvals and requirements and filings in connection with the
issue of Vernalis Shares as contemplated in section 2.2.2.
3.2.6 COMMERCIAL MATTERS AND SHARES..
3.2.6.1 The Chiesi Vendor Placing Shares and the Chiesi Non-Vendor
Placing Shares will be allotted and on issue will rank pari passu in
all respects with the Vernalis Shares in issue at the date of this
Agreement and application will be made for Admission prior to the Time
of Closing.
3.2.6.2 Subject to the issue after the date of this Agreement of any
supplementary prospectus, all statements of fact contained in the
15
Prospectus are true and accurate in all material respects and are not
misleading and there are no other facts known (or which on reasonable
enquiry could be known to Vernalis) the omission of which would make
any statement relating to Vernalis in the Prospectus misleading or
which would be required to be disclosed to investors in Vernalis
Shares for the purpose of enabling such investors to make an informed
assessment of the assets and liabilities, financial position, profits
and losses and prospects of Vernalis and the rights attaching to the
Vernalis Shares
3.2.6.3 The issue of the Prospectus, any supplementary prospectus and
the allotment and issue of the Chiesi Vendor Placing Shares and the
Chiesi Non-Vendor Placing Shares will comply in all respects with the
Companies ▇▇▇ ▇▇▇▇ (and in particular, with sections 103 to 108
(inclusive) thereof), the Financial Services and Markets ▇▇▇ ▇▇▇▇, the
Prospectus Rules, Directive 2003/71/EC of the European Parliament and
of the Council, Commission Regulation (EC) No 809/2004 and CESR's
recommendations for the consistent implementation of the European
Commission's Regulation on Prospectus No 809/2004 and all other
applicable laws, rules and regulations of the United Kingdom and with
all agreements and obligations to which the Purchaser is a party or by
which it or any of its property is bound.
3.3 INDEMNITY
3.3.1 Vernalis and the Purchaser hereby jointly and severally indemnify the
Vendor and each of the members of its Group (together with their
respective directors, officers and employees) (each being a "CHIESI
PERSON") against any loss, damage, liability, fine, penalty, charge
and any other cost and expense (including costs of recovery on an
indemnity basis) arising directly or indirectly as a result of any
claim brought by any US Person against any Chiesi Person in respect of
the issue by Vernalis or the Bank (or any agents of either of them) in
the US or to a US Person of the Prospectus, the US Private Placement
Memorandum or any document supplemental to either of them, or the
marketing by Vernalis or the Bank (or any agents of either of them) in
the US or to a US Person of the Chiesi Vendor Placing Shares, provided
that such third party claim is made and notified to the Purchaser
prior to the first anniversary of the Time of Closing.
3.3.2 The provisions of this section 3.3.2 shall apply to any claim by a
third party against the Vendor in respect of a matter which has given
or could reasonably be expected to give rise to a claim pursuant to
the indemnity set out in section 3.3.1 (in each case a "RELEVANT
CLAIM"). The Vendor shall:
16
3.3.2.1 as soon as reasonably practical give written notice of the
Relevant Claim to Vernalis and, thereafter, keep Vernalis
informed of all material developments relating to the same;
3.3.2.2 take all steps as Vernalis may reasonably require to pursue,
litigate, defend, resist or compromise the Relevant Claim, and
for this purpose to allow Vernalis (if requested in writing by
Vernalis) to have the conduct of the Relevant Claim or at
Vernalis' option to take all reasonable steps to pursue,
litigate, defend, resist or compromise the Relevant Claim,
subject in every case to Vernalis indemnifying the Vendor for all
losses, reasonable costs, expenses and charges incurred or
suffered by it thereby;
3.3.2.3 preserve all relevant documents in relation to the Relevant
Claim and allow Vernalis access on reasonable notice and during
normal business hours in Italy (at Vernalis' cost and expense),
to inspect and take copies of all such documents (save for any
documents which are privileged from production to Vernalis) and
to relevant Chiesi Persons to investigate the Relevant Claim; and
3.3.2.4 not make any admission of liability or fault nor settle or
compromise any Relevant Claim without the prior written consent
of Vernalis, such consent not to be unreasonably withheld or
delayed.
3.3.3 Where Vernalis requires the Vendor pursuant to this section 3.3, to
take any action in respect of the conduct of a Relevant Claim, the
costs, expenses and charges incurred by the Vendor in complying with
such requirement shall in all respects constitute reasonable costs and
expenses for the purposes of this section 3.3.
ARTICLE 4
GENERAL MATTERS
4.1 CONFIDENTIALITY
Without prejudice to the Chiesi Licence Agreements (as defined in the Principal
Purchase Agreement), the Vendor shall not, and the Purchaser or Vernalis shall
not directly or indirectly use for its own purposes or disclose to any other
Person any confidential or proprietary information, including know-how and data,
technical or non-technical, relating to the business of Vernalis (in the case of
the Vendor) and the business of the
17
Vendor (in the case of the Purchaser or Vernalis) which becomes known to the
Vendor or the Purchaser or Vernalis, respectively, its accountants, legal
advisers or representatives as a result of Vernalis or the Vendor respectively
making the same available in connection with the transaction contemplated by
this Agreement.
4.2 PUBLIC NOTICES
No press release or other public announcement concerning the transaction
contemplated by this Agreement shall be made by the Vendor without the prior
written consent of Vernalis, such consent not to be unreasonably withheld or
delayed.
4.3 EXPENSES
The Vendor, the Purchaser and Vernalis shall be responsible for the expenses
(including fees and expenses of legal advisers, accountants and other
professional advisers) incurred by them, respectively, in connection with the
negotiation and settlement of this Agreement and the completion of the
transaction contemplated by this Agreement.
4.4 TERMINATION
Save in respect of any accrued rights existing at the time of termination, this
Agreement shall terminate and the obligations and covenants of the parties
hereunder, other than those set out in sections 1, 3.3 and 4, shall (in the
absence of agreement between the parties in writing to the contrary) terminate
upon the earlier of (a) the termination of the Principal Purchase Agreement; and
(b) 4 January 2006, but shall not terminate prior thereto in any circumstances.
4.5 ASSIGNMENT
Except as provided in this section, no party may assign its rights or benefits
under this Agreement. The Purchaser or Vernalis may, at any time after the Time
of Closing and from time to time, assign its rights and benefits under this
Agreement, in whole or in part, to any member of its Group or to any Person who
acquires all or substantially all of the assets or shares of the Corporation The
Vendor may, at any time after the Time of Closing and from time to time, assign
its rights and benefits under this Agreement in whole or in part, to any member
of its Group who acquires all of the Chiesi Non-Vendor Placing Shares or to any
Person who acquires all or substantially all of the assets or shares of the
Vendor.
4.6 NOTICES
Any notice or other communication required or permitted to be given under this
Agreement shall be in writing, in English, and shall be given by prepaid mail,
by facsimile or by hand-delivery as provided in this section 4.6. Any such
notice or other communication, if mailed by prepaid mail at any time other than
during a general discontinuance of postal service due to strike, lockout or
otherwise, shall be deemed to have been received on the seventh Business Day
after the post-marked date of the notice, or if sent by facsimile, shall be
deemed to have been received on the Business Day
18
following the sending, or if delivered by hand shall be deemed to have been
received at the time it is delivered to the applicable address noted below
either to the individual designated below or to an individual at such address
having apparent authority to accept deliveries on behalf of the addressee.
Notice of change of address shall also be governed by this section 4.6. In the
event of a general discontinuance of postal service due to strike, lock-out or
otherwise, notices or other communications shall be delivered by hand or sent by
facsimile and shall be deemed to have been received in accordance with this
section 4.6. Notices and other communications shall be addressed as follows:
(a) if to the Vendor:
Chiesi Farmaceutici S.p.A.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇/▇
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Copy to: Legal Director
Telecopier number: 00 39 0521 774 468
With a copy to the Vendor's counsel at:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Carmelite
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇ ▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Telecopier Number: + 44 207 300 7100
(b) if to the Purchaser or Vernalis:
Vernalis plc
▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇
RG 41 5UA
Attention: ▇▇▇▇ ▇▇▇▇▇▇
Telecopier number: + 44 118 989 9300
with a copy to the Purchaser's counsel at:
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ West
19
▇▇▇ ▇▇▇, ▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇-▇▇▇▇▇▇
Telecopier number: (▇▇▇) ▇▇▇-▇▇▇▇
and to:
▇▇▇▇▇ & ▇▇▇▇▇ LLP
▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇
Telecopier number: + 44 20 7330 9999
The failure to send or deliver a copy of a notice to the Purchaser's
counsel or the Vendor's counsel shall not invalidate any notice given
under this section 4.6.
4.7 TIME OF ESSENCE
Time is of the essence of this Agreement.
4.8 FURTHER ASSURANCES
Each of the parties shall promptly do, make, execute, deliver, or cause to be
done, made, executed or delivered, all such further acts, documents and things
as the other party may reasonably require from time to time for the purpose of
giving effect to this Agreement and shall use reasonable efforts and take all
such steps as may be reasonably within its power to implement to their full
extent the provisions of this Agreement.
4.9 COUNTERPARTS
This Agreement may be signed in counterparts and each such counterpart shall
constitute an original document and such counterparts, taken together, shall
constitute one and the same instrument.
4.10 JOINT AND SEVERAL LIABILITY
For the avoidance of doubt, any obligation, undertaking, warranty,
representation, confirmation and covenant entered into, made or given by the
Purchaser pursuant to this Agreement shall be deemed to have been entered into,
made or given also by Vernalis jointly and severally with the Purchaser.
20
THE PARTIES HAVE EXECUTED THIS AGREEMENT ON THE DATE APPEARING ON THE FIRST
PAGE.
CHIESI FARMACEUTICI S.P.A.
Acting by:
-----------------------------
Name:
----------------------------------
Title:
---------------------------------
VERNALIS PLC
Acting by:
-----------------------------
Name:
----------------------------------
Title:
---------------------------------
VERNALIS (CANADA) INC
Acting by:
-----------------------------
Name:
----------------------------------
Title:
---------------------------------
----------------------------------------