Exhibit
10.1
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ACQUISITION AGREEMENT AND PLAN OF MERGER
dated as of August 25, 2006
by and among
GARDANT PHARMACEUTICALS, INC.
SWITCH PHARMA LIMITED
and
GARDANT PHARMACEUTICALS ACQUISITION CORPORATION
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TABLE OF CONTENTS
Page
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1.
DEFINITIONS
......................................................................................
2
2. THE
MERGER
.......................................................................................
4
2.1 The Merger
..............................................................................
4
2.2 Effective
Time; Closing
.................................................................
4
2.3 Effect of
the Merger
....................................................................
4
2.4
Certificate of Incorporation; By-laws
................................................... 4
2.5 Directors
and Officers
..................................................................
4
2.6 Conversion
of Securities
................................................................
5
2.7 Employee
Stock Options, Company Warrants, Company Preferred Stock and Other
Securities .. 5
2.8 Exchange
of Certificates
................................................................
6
2.9 Appraisal
Rights
........................................................................
7
2.10
Stock Transfer Books
....................................................................
8
2.11
Shares Not Registered; Transfer Restrictions
............................................ 8
3.
CERTAIN MATTERS PERTAINING TO EPRESENTATIONS AND WARRANTIES OF
COMPANY ........................... 8
3.1 Warranties
by Company
...................................................................
8
3.2 Limitation
on Liability
.................................................................
8
3.3 Each
Warranty Separate
..................................................................
8
3.4
No Responsibility for
Certain Changes ...................................................
8
3.5 No Other
Representations or Warranties
.................................................. 8
4.
REPRESENTATIONS OF PURCHASER
.....................................................................
8
4.1
Authorization of Merger Shares
..........................................................
8
4.2 Corporate
Existence and Power; Enforceability; No Conflict
.............................. 8
4.3 Issuance
of Merger Shares
...............................................................
9
4.4 Consents
and Approvals
..................................................................
9
5.
COVENANTS PRIOR TO CLOSING
.......................................................................
9
5.1 Access and
Cooperation; Due Diligence
................................................... 9
5.2 Conduct of
Business Pending Closing
..................................................... 10
5.3 Prohibited
Activities
...................................................................
10
5.4 Newco
...................................................................................
11
5.5 Further
Assurances
......................................................................
12
5.6 Listing of
Common Stock of Purchaser for Trading
........................................ 12
6.
CONDITIONS PRECEDENT TO OBLIGATIONS OF COMPANY
................................................... 12
6.1
Representations and Warranties; Performance of Obligations
.............................. 12
6.2 No
Litigation
...........................................................................
12
6.3 Consents
and Approvals
..................................................................
12
6.4
Secretary's Certificate
.................................................................
12
6.5 Other
Closing Conditions
................................................................
12
6.6
Shareholder Consent
.....................................................................
12
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7.
CONDITIONS PRECEDENT TO OBLIGATIONS OF PURCHASER AND NEWCO
....................................... 13
7.1
Representations and Warranties; Performance of Obligations
.............................. 13
7.2 No
Litigation
...........................................................................
13
7.3 Consents
and Approvals
..................................................................
13
7.4 No
Material Adverse Effect
..............................................................
13
7.5
Secretary's Certificate
.................................................................
14
7.6 Other
Closing Conditions
................................................................
14
7.7
Shareholder Consent
.....................................................................
14
7.8 Exemption
from Registration
.............................................................
14
8.
SURVIVAL OF REPRESENTATIONS AND WARRANTIES
.......................................................
14
8.1 Survival of Representations and Warranties
................................................... 14
9.
TERMINATION OF AGREEMENT
.........................................................................
14
9.1
Termination
.............................................................................
14
9.2
Liabilities in Event of Termination
..................................................... 15
10. COVENANTS
POST-CLOSING
...........................................................................
15
10.1
Payment of Taxes
........................................................................
15
10.2
Cooperation on Tax Matters
..............................................................
15
11. GENERAL
15
11.1
Cooperation
.............................................................................
15
11.2
Successors and Assigns
..................................................................
16
11.3
Entire Agreement
........................................................................
16
11.4
Counterparts
............................................................................
16
11.5
Brokers and Agents
......................................................................
16
11.6
Expenses
................................................................................
16
11.7
Notices
.................................................................................
16
11.8
Governing Law
...........................................................................
16
11.9
Jurisdiction and Venue
..................................................................
16
11.10
Survival of Representations and Warranties
.............................................. 17
11.11
Exercise of Rights and Remedies
.........................................................
17
11.12 Time
....................................................................................
17
11.13
Reformation and Severability
............................................................
17
11.14
Remedies Cumulative
.....................................................................
17
11.15
Captions
................................................................................
17
11.16
Representation by Counsel
...............................................................
18
11.17
Amendments; Waivers
.....................................................................
18
11.18
Public Announcements
....................................................................
18
11.19
Transfer Restrictions; Compliance with Securities Laws
.................................. 18
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<PAGE>
ACQUISITION AGREEMENT AND PLAN OF MERGER
THIS
ACQUISITION AGREEMENT AND PLAN OF MERGER (the "Agreement") is made
as
of August 25 2006 by and among Gardant Pharmaceuticals, Inc., a
corporation
incorporated under the laws of the State of Nevada with offices at
Savannah
House, 11-12 Charles II Street, London, England SW1Y 4QU ("Company"
or
"Surviving Corporation"), Switch Pharma Limited, a corporation
incorporated
under the laws of England & Wales whose registered office is at
Kent Science
Park, Wood Stock House, Winch Road, Sittingbourne, Kent, ME9 8AG
("Purchaser" or
"SPL"), and Gardant Pharmaceuticals Acquisition Corporation, a
corporation
to-be-formed under the laws of the State of Nevada and which shall
be a
wholly-owned subsidiary of Purchaser ("Newco" or "Merger Sub").
RECITALS
WHEREAS,
Newco is a corporation-to-be-formed under the laws of the State
of Nevada for the purpose of being merged with and into Company
(the "Merger"),
with Company being the Surviving Corporation in the Merger;
WHEREAS,
Newco, upon formation and at the time of the Merger, shall be a
wholly-owned subsidiary of Purchaser;
WHEREAS,
the parties hereto desire for Newco to merge with and into the
Company, with the Company being the Surviving Corporation in the
Merger, in
accordance with the Nevada Revised Statutes, as amended
("NRS");
WHEREAS,
the Board of Directors of the Company has (i) determined that
the
Merger is fair to the holders of shares of the Company ("Shares")
and is in the
best interests of such stockholders and (ii) approved this
Agreement and all of
the transactions contemplated hereby (the "Company Board Approval")
and
unanimously has recommended that the stockholders of the Company
adopt this
Agreement and approve the Merger, and such approval and
recommendation have not
been amended or rescinded;
WHEREAS,
the Board of Directors of Purchaser has approved and adopted
this
Agreement and the transactions contemplated hereby and such
approval (the
"Purchaser Board Approval") has not been amended or rescinded;
WHEREAS,
actions by written consent of shareholders of the Company
owning
outstanding Shares carrying the right to cast a majority of the
votes which may
be cast by all shares of each class of the Company's outstanding
securities in
any election of directors are binding as the vote of shareholders
of the
Company; and
WHEREAS,
shareholders of the Company owning outstanding shares of the
Company carrying the right to cast a majority of the votes which
may be cast by
all shares of each class of the Company's outstanding securities in
any election
of directors have agreed by written consent (the "Company
Shareholders Written
Consent") to approve this Acquisition Agreement and the Merger and
such consent
has not been amended or rescinded;
<PAGE>
NOW,
THEREFORE, in consideration of the premises and of the mutual
agreements, representations, warranties, provisions and covenants
herein
contained, the parties hereto hereby agree as follows:
1. DEFINITIONS
Unless the
context otherwise requires, capitalized terms used in this
Agreement or in any schedule attached hereto and not otherwise
defined shall
have the following meanings for all purposes of this Agreement:
"Affiliate" means, with respect to any Person, any Person that
directly,
or indirectly through one or more intermediaries, controls, is
controlled by, or
is under common control with, such Person.
"Business
Day" means any day other than a Saturday or a Sunday) on which
commercial banks are open for banking operations in both New York,
New York and
London, England.
"CA" means
the Companies Act 1985.
"Companies
Acts" means the CA, the former Companies Acts (within the
meaning of CAs 735 (1) and the Companies Act 1989.
"Company"
means Gardant Pharmaceuticals, Inc, a Nevada Corporation.
"Disclosure Documents" the bundle of documents initialled on behalf
of the
Company and the Purchaser for the purposes of identification and
delivered with
the letter referred to in the definition of "Disclosure
Letter".
"Disclosure Letter" means the letter of even date herewith from
the
Company to the Purchaser specifying exceptions to the Warranties
and the
Disclosure Documents.
"Encumbrance" means any (other than by virtue of this Agreement)
interest
or equity of any person (including any right to acquire, option or
right of
pre-emption) or any mortgage, charge, pledge, lien, assignment,
hypothecation,
security interest, title retention or any other security agreement
or
arrangement.
"GAAP"
means generally accepted accounting principles as used in the
applicable national jurisdiction, applied on a consistent
basis.
"ICTA"
means the Income and Corporation Taxes Act 1988.
"Intellectual Property" means any patent, patent application,
know-how,
trade mark, trade mark application, trade name, registered design,
copyright or
other similar industrial or commercial right.
2
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"Knowledge" means the actual knowledge of the officers of the
applicable
party.
"Laws"
shall mean all laws, common laws, rules, regulations,
ordinances,
codes, judgments, injunctions, orders, decrees, permits, policies
and other
requirements of the United States and other jurisdictions to which
any party to
this Agreement, as applicable, or its respective properties, assets
or
businesses, are subject.
"Liability" or "Liabilities" means liabilities or obligations of
any kind,
character or description, whether accrued, absolute, secured or
unsecured,
contingent or otherwise, unless otherwise specified.
"Material
Adverse Effect" means, with respect to any Person, a material
adverse effect on the business, operations, properties, assets,
condition
(financial or otherwise) or results of operations of such Person,
taken as a
whole.
"Merger
Consideration" means 81,914,283 shares in the Purchaser.
"Permitted
Encumbrances" means (i) any lien for Taxes not yet due or
delinquent or Taxes being contested in good faith by appropriate
proceedings and
properly reserved for in accordance with GAAP, (ii) any statutory
lien arising
in the ordinary course of business by operation of law with respect
to an
obligation or liability that is not yet due or delinquent, and
(iii) any minor
imperfection of title or similar lien or encumbrance which
individually or in
the aggregate with other imperfections of title, liens or
encumbrances could not
reasonably be expected to have a Material Adverse Effect on the
applicable
Person.
"Person"
means an individual or a corporation, limited partnership,
general partnership, limited liability company, trust,
unincorporated
association, joint venture, association or government or any
agency,
instrumentality or political subdivision thereof, or any other
entity.
"Record"
means information that is inscribed on a tangible medium or
that
is stored in an electronic or other medium and is retrievable in
perceivable
form.
"Securities Act" means the Securities Act of 1933, as amended, and
the
rules and regulations promulgated thereunder by the United States
Securities and
Exchange Commission (the "SEC").
"Shares"
means the entire issued share capital in the Company as set out
in Schedule 1;
"Subsidiary" means, as to any Person, any Person other than an
individual,
50% or more of the shares of voting stock (or in the case of such a
Person which
is not a corporation, 50% or more of the equity interests that
provide the power
to manage, elect the management or direct the management of such
Person) of
which is at the time any determination is being made, owned or
controlled,
directly or indirectly, by such Person and its wholly owned
Subsidiaries.
3
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2. THE MERGER
2.1 The
MergerIn accordance with the NRS and subject to and upon the
terms
and conditions of this Agreement, at the Effective Time (as
hereinafter
defined), Newco shall be merged with and into the Company. As a
result of the
Merger, the separate corporate existence of Newco shall cease and
the Company
shall continue as the surviving corporation of the Merger (the
"Surviving
Corporation").
2.2
Effective Time; ClosingOn the Closing Date (as defined below),
the
parties hereto shall cause the Merger to be consummated by filing a
certificate
of merger (the "Certificate of Merger") with the Secretary of State
of the State
of Nevada, in such form as is required by, and executed in
accordance with, the
relevant provisions of the NRS (the date and time of such filing
being the
"Effective Time").
(a) The consummation of the transactions contemplated by this
Agreement (the "Closing") shall take place on September 29, 2006,
or as promptly
thereafter as the conditions to the Closing have been satisfied or
waived by the
appropriate Person or Persons not later than October 31, 2006 or
such other date
as may be mutually agreed by the parties to this Agreement (the
"Closing Date"),
at such office as Purchaser shall designate.
2.3 Effect
of the MergerAt the Effective Time, the effect of the Merger
shall be as provided in this Agreement, the Certificate of Merger
and the
applicable provisions of the NRS. Without limiting the generality
of the
foregoing, and subject thereto, at the Effective Time, all the
property, rights,
privileges, powers and franchises of Company and Newco shall vest
in the
Surviving Corporation, and all debts, liabilities, obligations,
restrictions,
disabilities and duties of Company and Newco shall become the
debts,
liabilities, obligations, restrictions, disabilities and duties of
the Surviving
Corporation.
2.4
Certificate of Incorporation; By-laws
(a) At the Effective Time, the certificate of incorporation of
Company, as in effect immediately prior to the Effective Time,
shall be the
certificate of incorporation of the Surviving Corporation until
thereafter
amended as provided by the NRS and such certificate of
incorporation.
(b) At the Effective Time, the by-laws of Company, as in effect
immediately prior to the Effective Time, shall be the by-laws of
the Surviving
Corporation until thereafter amended as provided by the NRS, the
certificate of
incorporation of the Surviving Corporation and such by-laws.
2.5
Directors and Officers(a) The directors of Company immediately
prior
to the Effective Time shall be the initial directors of the
Surviving
Corporation, each to hold office in accordance with the certificate
of
incorporation and by-laws of the Surviving Corporation, and the
officers of
Company immediately prior to the Effective Time shall be the
initial officers of
the Surviving Corporation, in each case until their respective
successors are
duly elected or appointed and qualified or until their earlier
death,
resignation or dismissal.
4
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2.6
Conversion of SecuritiesAt the Effective Time, by virtue of the
Merger
and without any action on the part of Purchaser, Newco, Company or
the holders
of any of their respective securities:
(a) Subject to Section 2.9, each share of Company's common
stock
(the "Company Common Stock" or the "Shares"), issued and
outstanding at the
Effective Time (other than shares canceled pursuant to Section
2.6(b), if any),
shall be exchanged and converted automatically into the right to
receive the
number of whole shares of Purchaser's common shares, (the
"Purchaser Common
Stock") which is the quotient obtained by dividing the number
81,914,283 by the
sum of all Shares issued and outstanding at the Effective Time, all
such shares
of Purchaser Common Stock being the "Merger Consideration," and
each share of
Purchaser Common Stock constituting a part of the Merger
Consideration being
sometimes hereinafter referred to as a "Merger Share."
(i) Notwithstanding the foregoing, the number 81,914,283 in
the calculation above was established on the assumption that shares
of Purchaser
Common Stock shall be trading for at least $1.03 per share at the
first day of
trading of Purchaser Common Stock on a London market on or after
the Closing
Date. If and to the extent that shares of Purchaser Common Stock do
not trade
for at least $1.03 per share on the first day on which such shares
trade on a
London market on or after the Closing Date, the number 81,914,283
shall be
adjusted upwards by the same percentage as the shortfall from $1.03
per share
represents as a percentage of $1.03. In such event, any such
additional shares
shall be delivered as soon as practical after the Closing in a
fashion
consistent with this Agreement as additional adjusted Merger
Consideration and
shall be deemed to be part of the Merger Consideration.
(b) Each share of capital stock held in the treasury of Company
and
each share of capital stock of Company, if any, otherwise owned by
any
Subsidiary of Company immediately prior to the Effective Time, by
virtue of the
Merger and without any action on the part of the holder thereof,
shall be
canceled without any conversion thereof and no payment or
distribution shall be
made with respect thereto; and
(c) Each share of common stock of Newco issued and outstanding
immediately prior to the Effective Time shall, by virtue of the
Merger and
without any action on the part of the holder thereof, be converted
into and
exchanged for one validly issued, fully paid and nonassessable
share of common
stock of the Surviving Corporation.
2.7
Employee Stock Options, Company Warrants, Company Preferred Stock
and
Other Securities
(a) At the Effective Time, each outstanding option to purchase
Shares under any Company stock option, stock purchase, restricted
stock, phantom
stock or similar plan (the "Company Stock Option Plans") not
exercised prior to
the Closing Date will terminate. Prior to the Closing Date, Company
shall take
any corporate action necessary to effectuate the foregoing and
Company shall
give any required notice to participants in the Company Stock
Option Plans of
the cancellation of the plan, and that each participant shall have
the right to
exercise his or her outstanding option(s) under the plan in full
prior to the
Closing Date.
5
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(b) On or prior to the Effective Time, Company shall take all
action
that may be necessary (under the plans pursuant to which any
Company options or
similar instruments or rights are outstanding and otherwise) to
effectuate the
provisions of this Section 2.7 and to ensure that, from and after
the Effective
Time, holders of such securities shall have no rights in connection
with the
Merger with respect thereto other than those specifically provided
in this
Section 2.7.
(c) At the Effective Time, each outstanding option to purchase
Shares under any warrant to purchase Company securities (the
"Company
Warrants"), if any, that is not exercised on or prior to the
Closing Date, will
terminate. Prior to the Closing Date, Company shall take any
corporate action
necessary to effectuate the foregoing and Company shall give any
required notice
to holders of Company Warrants of the cancellation of such Company
Warrants, and
each holder shall have the right to exercise his or her Company
Warrant in full
prior to the Closing Date.
(d) On or prior to the Effective Time, Company shall take any
and
all corporate action necessary to cause each outstanding share of
Company
preferred stock, if any, and any other security, right or other
instrument or
agreement to acquire, directly or indirectly, any security of
Company, whether
by acquisition, exchange, exercise, conversion or otherwise, which
has not
converted into shares of the Company Common Stock on or prior to
the Closing
Date, to terminate or otherwise cease to be outstanding, without
any monetary or
other claim against Company or its assets or Purchaser or Newco, as
of the
Closing Date, and all such securities shall be cancelled and shall
cease to be
outstanding as of the Effective Time.
2.8
Exchange of Certificates
(a) Exchange Procedures. As promptly as practicable after the
Effective Time, Purchaser shall mail to each holder of a
certificate or
certificates which immediately prior to the Effective Time
represented
outstanding Shares (the "Certificates") (i) a letter of transmittal
(which shall
specify that delivery shall be effected, and risk of loss and title
to the
Certificates shall pass, only upon proper delivery of the
Certificates to
Purchaser, and shall be in customary form) and (ii) instructions
for use in
effecting the surrender of the Certificates in exchange for the
right to receive
the Merger Consideration. Upon surrender to Purchaser of a
Certificate for
cancellation, together with such letter of transmittal, duly
executed, and such
other documents as may be reasonably required pursuant to such
instructions
under applicable securities laws, the holder of such Certificate
shall be
entitled to receive in exchange therefor the whole shares of the
Merger
Consideration, in accordance with Section 2.6, which such holder
has the right
to receive in respect of the Shares formerly represented by such
Certificate
(after taking into account all Shares then held by such holder),
but no
fractional shares shall be issued and no cash or other
consideration shall be
issued or delivered in respect of any such fractional share
interests, and the
Certificate so surrendered shall forthwith be cancelled. In the
event of a
transfer of ownership of Shares that is not registered in the
transfer records
of Company, the Merger Consideration such holder has the right to
receive in
respect of the Shares may be issued/distributed to a transferee if
the
Certificate representing such Shares is presented to Purchaser,
accompanied by
all documents required to evidence and effect such transfer and by
evidence that
any applicable stock transfer taxes have been paid. Until
surrendered as
contemplated by this Section 2.8, each Certificate shall be deemed
at any time
after the Effective Time to represent only the right to receive
upon such
surrender the Merger Consideration which such holder has the right
to receive in
respect of the Shares formerly represented by such Certificate.
6
<PAGE>
(b) Distributions with Respect to Unexchanged Shares of
Purchaser
Securities. No dividends or other distributions declared or made
after the
Effective Time with respect to Merger Shares with a record date
after the
Effective Time shall be paid to the holder of any unsurrendered
Certificate with
respect to Merger Shares represented thereby until the holder of
such
Certificate shall surrender such Certificate. Subject to the effect
of escheat,
tax or other applicable laws, following surrender of any such
Certificate, there
shall be paid to the holder of the certificates representing whole
shares of
Merger Shares issued in exchange therefor, without interest, (i)
promptly, the
amount of dividends or other distributions with a record date after
the
Effective Time, if any, and theretofor paid with respect to such
whole shares of
Merger Shares, and (ii) at the appropriate payment date, the amount
of dividends
or other distributions, with a record date after the Effective
Time, if any, but
prior to surrender and a payment date occurring after surrender,
payable with
respect to such whole shares of Merger Shares.
(c) No Further Rights in Company Common Stock. All shares of
Merger
Shares issued upon conversion of the Shares shall be deemed to have
been issued
in full satisfaction of all rights pertaining to such Shares.
(d) No Fractional Shares. No certificates or scrip representing
fractional shares of Merger Shares shall be issued upon the
surrender for
exchange of Certificates, and such fractional share interests will
not entitle
the owner thereof to vote or to any other rights of a stockholder
of Purchaser.
No cash or other consideration shall be paid for any fractional
share issuance
to which such holder would otherwise be entitled.
(e) No Liability. Neither Purchaser nor the Company sha
