Exhibit 10.2


 


Confidential Materials omitted and filed
separately with the


Securities and Exchange Commission.  Asterisks denote omissions.


 


 


2003


 


 


INVESTMENT
AGREEMENT


 


 


between


 


GENAISSANCE
PHARMACEUTICALS, INC.


 


PRELUDE
TRUST PLC


 


ABBEY
NATIONAL TREASURY SERVICES OVERSEAS HOLDINGS


 


and


 


SCIONA LIMITED


 

















 


TABLE
OF CONTENTS


 


	
  1

  	
  DEFINITIONS

  	
   

  
	
  2

  	
  INTERPRETATION

  	
   

  
	
  3

  	
  COMPLETION

  	
   

  
	
  4

  	
  INFORMATION RIGHTS

  	
   

  
	
  5

  	
  BUSINESS
  PLAN

  	
   

  
	
  6

  	
  EXECUTIVE COMMITTEE

  	
   

  
	
  7

  	
  WARRANTIES

  	
   

  
	
  8

  	
  RIGHT OF FIRST REFUSAL

  	
   

  
	
  9

  	
  ASSIGNMENT

  	
   

  
	
  10

  	
  NO
  PARTNERSHIP

  	
   

  
	
  11

  	
  SEVERAL OBLIGATIONS

  	
   

  
	
  12

  	
  FURTHER ASSURANCES

  	
   

  
	
  13

  	
  VARIATION OF AGREEMENT

  	
   

  
	
  14

  	
  INVALIDITY

  	
   

  
	
  15

  	
  EXCLUSION OF THIRD PARTY RIGHTS

  	
   

  
	
  16

  	
  COUNTERPARTS

  	
   

  
	
  17

  	
  NOTICES

  	
   

  
	
  18

  	
  ENTIRE AGREEMENT

  	
   

  
	
  19

  	
  APPLICABLE
  LAW

  	
   

  
	
  20

  	
  JURISDICTION

  	
   

  
	
  21

  	
  AGENT FOR SERVICE

  	
   

  
	
  SCHEDULE 1
  WARRANTIES

  	
   

  



 

















 


THIS AGREEMENT
is made on                               2003
between the following parties:


 


(1)                                  SCIONA LIMITED (registered number
4055554) whose registered office is at 79 George Street Ryde Isle of Wight PO33
2JF, further particulars of which are set out in Part 1 of Schedule 1 (the
“Company”);


 


(2)                                  GENAISSANCE PHARMACEUTICALS, INC. of
Five Science Park, New Haven, CT 06511, USA (“Genaissance”);


 


(3)                                  PRELUDE TRUST PLC (registered number
3285603) whose registered office is at Sycamore Studios, New Road, Over,
Cambridge CB4 5PJ (“Prelude”); and


 


(4)                                  ABBEY NATIONAL TREASURY SERVICES OVERSEAS HOLDINGS of 28 Dorset Square, London NW1 6QG (“Abbey”).


 


WHEREAS


 


(A)                                The parties to this Agreement (other than Genaissance) are party to
a subscription and shareholders’ agreement made on 25 February 2002
between (1) the Company, (2) the Executives (as defined therein) and (3) the
Investors (as defined therein) and (4) other shareholders of the Company (as
amended pursuant to a deed of amendment dated the same date as this Agreement)
(the “Subscription
Agreement”).


 


(B)                                Genaissance wishes to acquire shares in the Company in accordance
with the terms of this Agreement.


 


(C)                                The parties to this Agreement wish to agree certain provisions
governing the conduct of the Company in accordance with the terms of this
Agreement.


 


IT
IS AGREED as follows


 


1                                         DEFINITIONS


 


1.1                               Unless otherwise defined in this Agreement, words and expressions
used in this Agreement shall have the meaning ascribed to them in the
Subscription Agreement.


 


1.2                               In this Agreement each of the following words and expressions shall,
unless the context otherwise requires, have the meaning set opposite the
relevant word or expression:


 


	
  “Audited Accounts”

  	
   

  	
  the audited accounts of the Company for the financial year ending 31
  August 2002 (a copy of which are provided at section 1 to the bundle of documents attached to the
  Disclosure Letter);

  
	
   

  	
   

  	
   

  
	
  “Completion”

  	
   

  	
  completion of the subscription for Ordinary Shares in accordance with
  Clause 3.3;

  
	
   

  	
   

  	
   

  
	
  “Conditions”

  	
   

  	
  the
  conditions set out in Clause 3.1;

  
	
   

  	
   

  	
   

  
	
  “Disclosure Letter”

  	
   

  	
  the letter
  from the Company to Genaissance dated the date hereof and making certain
  disclosures

  



 


1

















 


	
   

  	
   

  	
  against the
  Warranties;

  
	
   

  	
   

  	
   

  
	
  “Fully Diluted Share Capital”

  	
   

  	
  all issued
  shares in the capital of the Company plus all unissued shares in the capital
  of the Company allocated to the employee option pool of the Company from time
  to time (whether or not options have been granted over such shares and in any
  event being not less than 50,408 Ordinary Shares) plus 44,444 A Ordinary
  Shares which may be issued in connection with the acquisition of Genostic
  Pharma Limited by the Company (whether or not such deferred consideration
  shares are actually issued);

  
	
   

  	
   

  	
   

  
	
  “Genostic Pharma Agreement”

  	
   

  	
  the share
  exchange agreement dated 22 February 2002 between the Company and the
  then shareholders of Genostic Pharma Limited;

  
	
   

  	
   

  	
   

  
	
  “Licence Agreement”

  	
   

  	
  the consumer
  genomics agreement entered into on the date hereof between the Company and
  Genaissance;

  
	
   

  	
   

  	
   

  
	
  “Management Accounts”

  	
   

  	
  the
  unaudited management accounts of the Company for the month August 2003
  (a copy of which are provided at section 2 to the bundle of documents
  attached to the Disclosure Letter);

  
	
   

  	
   

  	
   

  
	
  “New Articles”

  	
   

  	
  the articles
  of association of the Company from time to time and as amended by the
  Resolutions;

  
	
   

  	
   

  	
   

  
	
  “Party”

  	
   

  	
  a party to
  this Agreement, and “Parties” shall be construed accordingly;

  
	
   

  	
   

  	
   

  
	
  “Relevant Directors”

  	
   

  	
  the Investor
  Directors and the Director appointed by Genaissance (if any) pursuant to
  article 11.5 of the New Articles;

  
	
   

  	
   

  	
   

  
	
  “Resolutions”

  	
   

  	
  the
  resolutions of the Company, inter alia, (1) 
  increasing the share capital of the Company from £38,100 to £52,699 by
  the creation of 145,690 Ordinary Shares (2) authorising and empowering the
  Directors to allot Ordinary Shares in accordance with the terms of this
  Agreement in the aggregate nominal amount of £14,569 and disapplying
  pre-emption rights in respect of such allotment and (3) making certain
  amendments to the articles of association of the Company, in the Agreed Form;

  
	
   

  	
   

  	
   

  
	
  “Warranties”

  	
   

  	
  the
  warranties given pursuant to Clause 7 and Schedule 1; and

  
	
   

  	
   

  	
   

  
	
  “£”

  	
   

  	
  the lawful
  currency of the United Kingdom of Great Britain.

  



 


2

















 


2                                         INTERPRETATION


 


2.1                               References in this Agreement to any statute or statutory provision
shall be deemed to include references to any statute or statutory provision
which amends, extends, consolidates or replaces the same (other than any such
statute or statutory provision with retrospective effect to the extent that it
is retrospective) and except to the extent that any amendment or modification
enacted after the date of this Agreement would extend or increase the liability
of any party to any other party under this Agreement and, save as aforesaid, to
any order, regulation, instrument or other subordinate legislation made
thereunder.


 


2.2                               References to “Clauses” are to clauses to this Agreement.


 


2.3                               The headings in this Agreement and the index to this Agreement are
for convenience only and shall not affect its construction or interpretation.


 


2.4                               Wherever a document is referred to as being “in the Agreed Terms” or “in the
Agreed Form” it shall be in the form agreed between the Parties and
initialled for and on behalf of each of them for the purposes of identification
only.


 


2.5                               Unless the context otherwise requires:


 


2.5.1                                      words denoting the singular shall include the plural and vice versa;


 


2.5.2                                      words denoting a gender shall include all genders; and


 


2.5.3                                      references to persons shall include corporations and firms.


 


2.6                               General words shall not be given a restrictive meaning by reason of
their being preceded or followed by words indicating a particular class or
examples of acts, matters or things.


 


3                                         COMPLETION 


 


3.1                               Conditions


 


Completion is
conditional on:


 


3.1.1                                      the passing of the Resolutions in general meeting (or by way of
written resolution), without amendment, together with such separate class
resolutions as may be necessary to give effect to the same;


 


3.1.2                                      the Company and Genaissance having entered into a consumer genomics
agreement in the Agreed Terms (the “Consumer Genomics Agreement”);


 


3.1.3                                      the Board resolving that Kevin Rakin be appointed as a Director nominated by
Genaissance, subject to Completion;


 


3.1.4                                      the Board (including the Investor Directors) resolving to establish
the Executive Committee (as defined in Clause 6.1) in accordance with Clause 6,
subject to Completion;


 


3

















 


3.1.5                                      Genaissance having executed a deed of adherence in the Agreed Form
to the Subscription Agreement in accordance with the terms of the Subscription
Agreement; and


 


3.1.6                                      Paul Squires and Manuel Sanches-Felix each having delivered signed
stock transfer forms and share certificates (or indemnities in respect thereof
in a form acceptable to the Company in the event that such certificates have
been lost or destroyed) to the Company (Genaissance having paid the stamp duty
due thereon (being 0.5% of the consideration paid)) in respect of the Ordinary
Shares to be transferred by Paul Squires and Manuel Sanches-Felix to
Genaissance pursuant to Clause 3.3.2 and each such person having confirmed in
writing that such Ordinary Shares will be so transferred with full legal and
beneficial title free from all encumbrances, liens, charges and other third
party interests (such stock transfer forms and confirmations to be dated and
given effect at Completion).


 


3.2                               The Company and Genaissance shall use their respective reasonable
endeavours to ensure the satisfaction of each of the Conditions.


 


3.3                               Completion


 


3.3.1                                      Completion shall take place immediately following the satisfaction
of the Conditions, whereupon:


 


(a)                         Genaissance shall subscribe in cash for 145,690 new Ordinary Shares
for £[**] (Genaissance being deemed to have delivered to the Company an
application for such shares in such amounts) and shall pay in cleared funds the
subscription moneys due from it to the Company; and


 


(b)                         the Company shall allot and issue 145,690 Ordinary Shares credited
as fully paid together with share certificates in respect of such Ordinary
Shares issued to Genaissance (which Ordinary Shares shall on issue have the
rights set out in the New Articles the Company and rank pari passu with all
other Ordinary Shares comprised in the capital of the Company).


 


3.3.2                                      At Completion the Company shall register the following transfers of
Ordinary Shares to Genaissance:


 


	
  Transferor

  	
   

  	
  Transferee

  	
   

  	
  Number of

  Ordinary

  Shares

  	
   

  	
  Consideration

  
	
  Paul Squires

  	
   

  	
  Genaissance

  	
   

  	
  1,600

  	
   

  	
  £

  	
  [**]

  
	
  Manuel
  Sanches-Felix

  	
   

  	
  Genaissance

  	
   

  	
  5,000

  	
   

  	
  £

  	
  [**]

  



 


4

















 


4                                         INFORMATION RIGHTS


 


4.1                               If and for so long as Genaissance holds not less than 5% of the
Fully Diluted Share Capital, then the Company shall provide Genaissance with
the following information:


 


(a)                        within [**] days of the end of each [**], monthly management
accounts of the Company containing a balance sheet, profit and loss statement
and cash flow statement together with a commentary on the period in question;
and


 


(b)                        audited accounts of the Company within [**] months of the end of
each financial year of the Company.


 


4.2                               A Director appointed by Genaissance pursuant to article 11.5 of
the New Articles shall be permitted from time to time to disclose to
Genaissance and its professional advisers information concerning the business
and financial affairs of any Group Company. 
Genaissance shall procure that such Director and its professional
advisers shall not to divulge to any other person any trade secret or
information of a confidential nature concerning the business, finance or
affairs of the Company or any Group Company except to the minimum extent
required pursuant to any applicable statutory, regulatory or accounting
requirements at any time whether during the term of or following the
termination (for whatever reason) of this agreement (without limit of time).


 


4.3                               The obligations imposed on Genaissance pursuant to Clause 4.2 of
this Agreement and clause 10.1 of the Subscription Agreement shall continue in
full force and effect notwithstanding the termination or variation of any such
agreement (save to the extent that the Company, by written notice, expressly
releases Genaissance from any such obligation).


 


5                                         BUSINESS PLAN


 


5.1                               If and for so long as Genaissance holds not less than 5% of the
Fully Diluted Share Capital, then, not later than [**] calendar months before
the end of each of its financial years, the Company shall adopt detailed
operating budgets for the Company in a form approved by a majority in number of
the Relevant Directors in respect of the next financial year of the Company.


 


5.2                               The Investors agree that the provisions of paragraph 1.5 of part 1
of schedule 4 of the Subscription Agreement shall not apply if and for so
long as Genaissance holds not less than 5% of the Fully Diluted Share Capital.


 


6                                         EXECUTIVE COMMITTEE


 


6.1                               The Parties agree that, with effect from Completion, the Company
shall establish an executive committee (being a sub-committee of the Board)
(the “Executive
Committee”).


 


6.2                               The Executive Committee shall comprise:


 


6.2.1                                      the Director appointed by Genaissance pursuant to article 11.5
of the New Articles (if and for so long as such person holds office as a
Director, and in 


 


5

















 


his absence a Director nominated by the Board
(acting by simple majority vote));


 


6.2.2                                      the chief executive officer of the Company (and, until such time as
such chief executive officer is appointed, Melisse Shaban shall be appointed to
fill such vacancy on the Executive Committee); and


 


6.2.3                                      a further Director nominated by the Board (acting by simple majority
vote), and which person shall initially be Chris Martin.


 


6.3                               Without prejudice to the right of individual members of the
Executive Committee in their capacity as directors, the Executive Committee
shall have the following duties (and no other duties or authorities, save as
approved by the Board in accordance with the Subscription Agreement):


 


6.3.1                                      to advise and assist the management of the Company in devising and
proposing the draft operating budgets to be presented to the Board pursuant to
Clause 5.1;


 


6.3.2                                      to review and monitor the progress of the management of the Company
in implementing any operating budget approved pursuant to Clause 5.1;


 


6.3.3                                      to make recommendations to the Board concerning the appointment of
suitable persons to key management positions in connection with those
operations of the Group (including a chief executive officer and chairman of
the board of the Company, which persons shall have significant relevant
industry experience in the United States and global markets); and


 


6.3.4                                      to report to the Board on the matters referred to at Clauses 6.3.1
to 6.3.3.


 


6.4                               The Executive Committee shall have no authority to:


 


6.4.1                                      adopt any operating plan on behalf of the Company or approve any
operating plan on behalf of the Board; or


 


6.4.2                                      contract with any third party or enter into any agreement or
understanding in the name of the Company with any third party or to bind the
Company in any way whatsoever,


 


in each case, save as expressly authorised by the Board in accordance
with the Subscription Agreement (including, without limitation, the obtaining
of any Investor consent).


 


7                                         WARRANTIES


 


7.1                               The Company warrants to Genaissance in the terms of the Warranties
set out in Schedule 1 as at the date hereof.


 


7.2                               The Warranties are given subject to matters fairly disclosed in the
Disclosure Letter.


 


7.3                               Each of the Warranties shall be separate and independent and, save
as expressly provided to the contrary, shall not be limited by reference to any
other Warranty or 


 


6

















 


any other provision in this agreement and so that Genaissance shall
have a separate claim and right of action in respect of every breach of
Warranty.


 


7.4                               In the Warranties the term “so far as the Company is aware” or any
similar or equivalent word shall be construed to mean those matters within the
actual knowledge of the senior management of the Company and those matters
which would be apparent to such senior managers upon carrying our commercially
reasonable inquiries into such matters.


 


7.5                               All claims under the Warranties shall be made in writing to the
Company (specifying particulars of the claim in reasonable detail based on the
information in the possession of the party making the claim) no later than


 


(i)                                    the date [**] months after the date hereof; or


 


(ii)                                if earlier, the date on which the Genaissance ceases to hold shares
in the Company,


 


and any claim
made after such date shall be invalid and of no effect.


 


7.6                               Any claim under the Warranties shall (if it has not been previously
satisfied, settled or withdrawn) be, and be deemed to have been, withdrawn
unless legal proceedings in respect of it have been commenced by both being
issued and served on the Company within 3 months of notification of such claim
(unless otherwise agreed, from time to time, in writing between the parties).


 


7.7                               Save (i) in the case of fraud or wilful non-disclosure on the part
of any of the Company; or (ii) in respect of a claim for a breach of
that Warranty set out at paragraph 13 of Schedule 1:


 


7.7.1                                      no claim or claims shall be made in respect of any breach or
breaches of the Warranties unless and until the aggregate amount of that claim
or those claims, together with all other claims, shall exceed $50,000 but so
that once this aggregate amount has been exceeded Genaissance shall be entitled
to make a claim in respect of the whole of the aggregate amount and not just
the excess over that amount; and


 


7.7.2                                      the liability of the Company for breach of the Warranties (inclusive
of all costs, interest and expenses payable by the Company to Genaissance in
connection with any such claim) shall be limited to $1,000,000 in aggregate.


 


7.8                               The Company shall have no liability whatsoever in respect of any
claim under the Warranties to the extent that the matter giving rise to the
claim is for an amount for which Genaissance has recovered from, or have been
indemnified by, any person (other than the Company) whether under any provision
of applicable law, an insurance policy or otherwise.


 


7.9                               Genaissance acknowledges that, not withstanding any other provision
of this Agreement or the Licence Agreement, its only remedy for breach of the
Warranties shall be to claim damages and, in particular, Genaissance shall have
no right to 


 


7

















 


terminate or rescind this Agreement and/or the Subscription Agreement
as a consequence of any breach of the Warranties.


 


7.10                        The Company shall not be liable in respect of any claim brought
under the Warranties to the extent that such claim is attributable to, or such
claim is increased as a result of any change in the nature of the trade or
business of the Company, any legislation not in force at the date hereof or to
any change of law, regulation, directive, requirement or administrative practice
or any change in the basis or, method of calculation of, or increase in the
rates of taxation or practices of any relevant tax authority, which in each
case is not in force as at the date hereof and which takes effect
retrospectively.


 


7.11                        The Company shall not be liable in respect of any claim brought
under the Warranties to the extent that such claim arises, or such claim
otherwise having arisen, is increased as a result of any change made after the
date hereof in any accounting or taxation policies or practice, or the length
of any accounting period, of any person.


 


7.12                        Nothing in this Agreement shall in any way restrict or limit the
general obligation at law of Genaissance to mitigate any loss or damage which
it may suffer in consequence of any fact, matter, event or circumstance giving
rise to a claim under the Warranties.


 


7.13                        A breach of Warranty which is capable of remedy shall not entitle
Genaissance to compensation unless the Company have been given written notice
of such breach and such breach is not remedied within [**] days after the date
on which such notice is served on the Company.


 


8                                         RIGHT OF FIRST REFUSAL


 


8.1                               Notwithstanding anything to the contrary in the Company’s articles
of association, if and for so long as Genaissance holds not less than 5% of the
Fully Diluted Share Capital, the Company and the Investors shall each advise
Genaissance promptly upon such Party receiving notice of an offer or proposal
(the terms of which offer or proposal satisfy the requirements of Clause 8.2)
(a “Purchase
Offer”) to acquire the entire issued share capital of the Company
and/or the whole (or substantially the whole) of the business and assets of the
Company .


 


8.2                               To constitute a Purchase Offer the terms of an offer or proposal to
acquire the entire issued share capital of the Company and/or the whole (or
substantially the whole) of the business and assets of the Company must:


 


8.2.1                                      be reasonably firm, clear and precise – for example, by way of term
sheet;


 


8.2.2                                      identify the shares, business and/or assets the subject of the
offer/proposal; and


 


8.2.3                                      identify the form and amount (or means by which such amount will be
calculated) of consideration payable in respect of the shares, business and/or
assets the subject of the offer/proposal.


 


In the absence
of the Purchase Offer expressly setting out the terms of any representation,
warranty, indemnity or other obligation or liability to be imposed on


 


8

















 


the Company
and/or its directors, officers, managers, employees or shareholders, no such
obligation or liability shall be implied.


 


8.3                               Each Investor agrees that it will not (other than with the written
consent of Genaissance):


 


8.3.1                                      accept any Purchase Offer relating to a sale of shares in the
Company; or


 


8.3.2                                      provide any consent sought under the terms of the Subscription
Agreement in relation to the acceptance by the Company of any Purchase Offer
relating to the sale of the whole (or substantially the whole) of the business
and assets of the Company,


 


in each case,
within the period of [**] days from the date on which Genaissance was first
advised of such Purchase Offer pursuant to Clause 8.1.


 


8.4                               The Company agrees that it will not (other than with the written
consent of Genaissance) accept any Purchase Offer relating to a sale of the
whole (or substantially the whole) of the business and assets of the Company
within the period of [**] days from the date on which Genaissance was first
advised of such Purchase Offer pursuant to Clause 8.1.


 


8.5                               During the period of [**] days from the date on which Genaissance
was first advised of a Purchase Offer pursuant to Clause 8.1 Genaissance shall
have the right to match the terms of such Purchase Offer.  Genaissance shall within such [**] day
period confirm to the Company and each other Party (in writing) whether or not
Genaissance elects to match the terms of such Purchase Offer.


 


If Genaissance
fails to notify the Company and each other Party (in writing) within such 30
day period that Genaissance elects to match the terms of the Purchase Offer,
then the rights of Genaissance to match such Purchase Offer pursuant to this
Clause 8 shall lapse and the Company may be free to accept a Purchase Offer
free of the provisions of this Clause 8.


 


If Genaissance
elects to match the terms of such Purchase Offer (by way of written notice
served on the Company and each other Party) within such [**] day period, then:


 


8.5.1                                      the Company and the Investors shall not accept the third party
Purchase Offer; and


 


8.5.2                                      the Company and the Investors shall (subject to the right of
Genaissance to retract such election in accordance with Clause 8.6) have the
right to require that Genaissance conclude the transaction proposed in the
Purchase Offer on the terms set out therein (save that Genaissance is
substituted in place of the relevant third party offeror).


 


8.6                               In the event that the terms of the Purchase Offer are not
sufficiently detailed to enable the proposed transaction to be completed
pursuant to Clause 8.5.2, the Parties shall use best endeavours to agree and
enter into in legally binding documents implementing all such outstanding
terms, which terms shall be fair and reasonable.


 


9

















 


8.7                               If the Parties are unable to agree the terms of a transaction
pursuant to Clause 8.6 and have not entered into legally binding documents to
implement such transaction within [**] days from the date on which Genaissance
first gave notice of its election to match the relevant Purchase Offer pursuant
to Clause 8.5, then the provisions of this Clause 8 shall lapse in respect of
such Purchase Offer and all future Purchase Offers


 


9                                         ASSIGNMENT 


 


No Party shall be entitled to assign or otherwise transfer its rights
or obligations under this Agreement (save to any person to whom such Party has
assigned or otherwise transferred rights or obligations under the Subscription
Agreement in accordance with the terms thereof).


 


10                                  NO PARTNERSHIP


 


Nothing in this Agreement shall be deemed to constitute a partnership
between the parties hereto.


 


11                                  SEVERAL OBLIGATIONS


 


All covenants, warranties and other obligations given or entered into
by more than one party herein are given or entered into severally except as
otherwise expressly provided by this Agreement.


 


12                                  FURTHER ASSURANCES


 


The Parties shall (and shall procure that their respective nominees
shall) do and execute and perform all such further deeds, documents,
assurances, acts and things as may reasonably be required to give effect to the
terms of this Agreement.


 


13                                  VARIATION OF AGREEMENT


 


If any Party (or its nominees) ceases to hold shares in the capital of
the Company then as from the date of such cessation this Agreement may be
terminated or varied without reference to (or the need for the signature of any
relevant document by) that Party provided that (for the avoidance of doubt)
such variation shall not give rise to any new or increased liability of that
Party (or its nominees).


 


14                                  INVALIDITY


 


If any of the provisions of this Agreement are or become invalid, illegal
or unenforceable in any respect under any law, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired.


 


15                                  EXCLUSION OF THIRD PARTY RIGHTS


 


A person who is not a party to this Agreement has no rights under the
Contracts (Rights of Third Parties) Act 1999 or otherwise to enforce any term
of this Agreement but this does not affect any right or remedy of a third party
which exists or is available apart from that Act.


 


10

















 


16                                  COUNTERPARTS


 


This Agreement may be executed in any number of counterparts, all of
which taken together shall constitute one and the same agreement.


 


17                                  NOTICES


 


17.1                        Any notice or other document to be served or given under this
Agreement may be delivered or sent by first class post (or equivalent postal
service in jurisdictions outside England) or facsimile process or electronic
mail (“e-mail”)
to the relevant Party at his or its address appearing on page 1 of this
Agreement or at such other address, facsimile number or e-mail address as that
Party may have notified to the other Parties in accordance with this Clause or
which such Party habitually uses for communications with the other Parties.


 


17.2                        Any notice or document shall be deemed to have been served:


 


17.2.1                               if delivered, at the time of delivery; or


 


17.2.2                               if sent by facsimile transmission, if delivered between 9 a.m. and
5.30 p.m., two hours after transmission or failing that, on the next Business
Day; or


 


17.2.3                               if posted, at 10 a.m. on the second Business Day after the time of
despatch, if despatched before 3 p.m. on any Business Day, and in any other
case at 10 a.m. on the Business Day following the date of despatch.


 


17.3                        In proving service it shall be sufficient to prove that delivery was
made or that either (i) the envelope containing the notice or document was
properly addressed and posted as a prepaid first class letter (or equivalent
postal service in jurisdictions outside England) or (ii) that the facsimile message
was properly addressed and despatched and receipt acknowledged by the recipient
to whom it was addressed or facsimile machine to which it was despatched or
(iii) that the e-mail message was properly addressed and despatched and receipt
acknowledged by the recipient to whom it was addressed or computer server to
which it was despatched.


 


18                                  ENTIRE AGREEMENT


 


18.1                        This Agreement, the New Articles and the Shareholders Agreement
constitutes the whole and only understanding and agreement between the parties
relating to the subject matter of this Agreement.


 


18.2                        Save to the extent repeated in any of the documents referred to in
Clause 18.1, this Agreement, the New Articles and the Shareholders Agreement
supersede and extinguish any prior term sheets, draft agreements, undertakings,
representations, warranties and arrangements of any nature whatsoever, whether
or not in writing, relating to the subject matter of this Agreement.


 


18.3                        Each party acknowledges that in entering into this Agreement it is
not acting in reliance on any agreement, undertaking, representation, warranty,
promise, assurance or arrangement made or given by any other party or any other
person, whether or not in writing, at any time before the execution of this
Agreement which is not expressly set out therein.


 


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18.4                        Nothing in this Clause 18 shall operate to limit or exclude any
liability for fraud or fraudulent misrepresentation.


 


19                                  APPLICABLE LAW


 


This Agreement shall be governed by and construed in accordance with
English law.


 


20                                  JURISDICTION 


 


The courts of England are to have non-exclusive jurisdiction to settle
any dispute arising out of or in connection with this Agreement. Any
proceeding, suit or action arising out of or in connection with this Agreement
(in each case, “Proceedings”) may therefore be brought in the English courts.
Each party agrees that this Clause 20 is irrevocable and that it is for the
benefit of each of the parties to this Agreement. Nothing in this Clause 20 shall
limit the right of any party to take Proceedings against any other party in any
other court or in the courts of more than one jurisdiction at the same time, to
the extent permitted by the law of such other jurisdiction.


 


21                                  AGENT FOR SERVICE


 


21.1                        Genaissance agrees that process by which any Proceedings (as defined
in Clause 20) are begun in England may be served on Genaissance by being
delivered to:


 


Reynolds
Porter Chamberlain


Chichester
House 278/282


High Holborn


London


WC1V 7HA


 


Attention: Tim
Anderson


 


With
copy to Genaissance.


 


21.2                        If the appointment of the person mentioned in Clause 21.1 ceases to
be effective or such person ceases for any reason to act as process agent for
Genaissance, then Genaissance shall immediately appoint a replacement process
agent for the purposes of this Clause and forthwith shall notify each other
Party of the change in accordance with Clause 17 and, failing such appointment
within 10 Business Days thereof, any other Party may appoint a replacement
process agent to accept service of process on behalf of Genaissance by notice
to Genaissance.  This Clause does not
affect the right to serve process in any other manner permitted by law.


 


12

















 


SCHEDULE 1


 


WARRANTIES


 


Due incorporation and
capacity


 


1                                         The Company is duly incorporated and validly existing under English
law.


 


2                                         The Company has the requisite power and authority to enter into and
perform its obligations under this Agreement and the Subscription Agreement.


 


3                                         This Agreement and the Subscription Agreement constitute lawful,
valid and binding obligations of the Company in accordance with their
respective terms.


 


Effect of this
Agreement and the Subscription Agreement


 


4                                         The execution and delivery of this Agreement, and the issue of
Shares at Completion pursuant to this Agreement, will not (subject to the
passing of the Resolutions):


 


(a)                                  result in a breach of any provision of the New Articles; or


 


(b)                                  result in a breach of any order, judgement or decree of any court of
competent jurisdiction or governmental agency, or any agreement, to which the
Company is a party or otherwise bound.


 


Commissions


 


5                                         No person is entitled to receive a brokerage, finder’s fee or
commission from the Company in connection with the issue of Shares by the
Company at Completion.


 


Records


 


6                                         The records, statutory books, registers, minute books and books of
account of the Company are duly entered up and maintained in all material
respects in accordance with all legal requirements applicable thereto and so
far as the Company is aware, contain true and accurate records of all matters
required by law to be dealt with therein. 
All such books and all records and documents (including documents of
title) which are its property are in the Company’s possession or under its
control and all accounts, documents and returns have been duly and correctly
delivered or made in all material respects.


 


Accounts


 


7                                         The Audited Accounts:


 


(a)                                  were prepared in accordance with the requirements of the Companies
Act 1985 and 1989;


 


(b)                                  were prepared in accordance with generally accepted accounting
principles and practices in the United Kingdom (which principles and practices
have


 


13

















 


were consistently applied by the Company in the preparation of the
Audited Accounts); and


 


(c)                                  give a true and fair view of the assets and liabilities (including
contingent liabilities whether for taxation or otherwise) of the Company and
state of affairs of the Company as at 31 August 2002 respectively and of
the profits and losses of the Company for the financial year of the Company
ending on 31 August 2002.


 


8                                         The Management Accounts show with reasonable accuracy the financial
position of the Company as at 31 August 2003 (including the material debts
and liabilities of the Company at such date) and, save as set out in the
Disclosure Letter, since 31 August 2003 the Company has not incurred any
further debt or liability prior to the Effective Date except for debts and
liabilities that are not material in amount and which debts and liabilities
were incurred in the ordinary course of business.


 


Litigation


 


9                                         The Company is not engaged in or about to initiate any litigation,
whether civil or criminal, arbitration or administrative proceedings and the Company
has not received written notice from any third party threatening any
litigation, arbitration or administrative proceedings against it or that any
litigation, arbitration or administrative proceeding is pending against it.


 


10                                  There is no outstanding judgement, order, decree or award or
decision of a court, tribunal, arbitrator or other governmental or regulatory
authority against, the Company.


 


11                                  So far as the Company is aware, it is not the subject of any
investigation, inquiry or enforcement proceedings or process by any
governmental, administrative or regulatory body nor, so far as the Company is
aware, is there anything that is likely to give rise to any such investigation,
inquiry, proceedings or process.


 


Shares


 


12                                  (a)                                  The fully diluted share capital of the Company immediately prior to
Completion is as set out in document 3 of the bundle of documents attached to
the Disclosure Letter (the “Disclosure Bundle”).


 


(b)                                  None of the Shares of the Company in issue immediately prior to the
date of this Agreement have the benefit of any rights not conferred by law or
expressly provided for in the New Articles, this Agreement or the Subscription
Agreement.


 


(c)                                  The rights attaching to Ordinary Shares comprised in the capital of
the Company, are the same as the rights attaching to A Ordinary Share comprised
in the share capital of the Company, as a class, save that:


 


(A)                               the Ordinary Shares and A Ordinary Shares constitute separate
classes of share (for the purposes of article 5 of the New Articles); and


 


14

















 


(B)                               A Ordinary Shares may be converted into Ordinary Shares pursuant to
article 4.2(c) of the New Articles.


 


13                                  The Ordinary Shares to be transferred by Paul Squires and Manuel
Sanches-Felix to Genaissance pursuant to Clause 3.3.2 will be so transferred
with full legal and beneficial title free from all encumbrances, liens, charges
and other third party interests.


 


14                                  Except as set out in the Disclosure Letter (and the documents
contained in the bundle attached thereto, and in particular the New Articles,
the Subscription Agreement and the Genostic Pharma Agreement):


 


(a)                                  no person is entitled or has claimed to be entitled to require the
Company to issue any share or loan capital either now or at any future date,
whether contingently or not;


 


(b)                                  the Company has not received notice of any option, right or
pre-emption, right to acquire, mortgage, charge, pledge, lien, or other form of
security or encumbrance having been granted by any shareholder or other third
party on, over or affecting any of the issued shares in the Company or uncalled
capital of the Company, and the Company has not received notice of any
commitment given to give or create any of the foregoing; and


 


(c)                                  the Company has not granted any option, right or pre-emption, right
to acquire, mortgage, charge, pledge, lien, or other form of security or
encumbrance on, over or affecting any of the issued shares in the Company or
uncalled capital of the Company nor has the Company agreed to give or create
any of the foregoing.


 


15                                  The entire issued share capital of the Company has been validly
issued and allotted and is fully paid or credited as fully paid.


 


Licences, permissions
and consents


 


16                                  So far as the Company is aware, the Company has obtained all
material licences (including, without limitation, in respect of intellectual
property rights), permissions and consents (being licences, permissions and
consents the absence of which would have a material and adverse effect on the
business of the Company) necessary to carry on its business as conducted as at
the date of this Agreement.


 


17                                  No notice has been received by the Company, the subject matter of
which notice is current and outstanding, that any material licence (as referred
to in paragraph 16 above) is, or is reasonably likely to be, suspended,
cancelled, revoked, qualified or not renewed in the ordinary and usual course.


 


18                                  The Company has not been engaged in any litigation alleging that the
operations of the Company infringe the intellectual property rights of any
third party.


 


19                                  So far as the Company is aware, no third party is infringing any
material intellectual property right owned by the Company.


 


15

















 


Security interests


 


20                                  No mortgages, charges, liens, encumbrances or other security
interests subsist over the undertaking or any material asset of the Company
save for charges and liens arising in the ordinary course of business.


 


Winding up


 


21                                  The Company has not taken any corporate action nor, so far as the
Company is aware, have any steps been taken or legal proceedings been started
or threatened against it for the winding up, dissolution or reorganisation or
for the appointment of a receiver or administrative receiver or any
administrator, trustee or similar officer in respect of the Company and its
assets, and, so far as the Company is aware, there are no grounds on which any
such order or petition for the winding up of the Company could be made or
presented.


 


16

















 


SIGNATURE PAGE


 


IN WITNESS whereof
this Agreement has been executed on the date written at the beginning of this
document.


 


SIGNED
by SCIONA
LIMITED acting

by its duly authorised signatory:


 


	
  Signatory

  	
   

  
	
  Signature

  	
  :/s/ Christopher J.
  Martin

  
	
  Name

  	
  :Christopher J.
  Martin

  



 


SIGNED
by ABBEY
NATIONAL

TREASURY SERVICES OVERSEAS

HOLDINGS acting by its duly

authorised signatory:


 


	
  Signatory

  	
   

  
	
  Signature

  	
  :/s/ D. Atterbury

  
	
  Name

  	
  :D. Atterbury

  



 


SIGNED
and by PRELUDE
TRUST

PLC acting by its duly authorised

signatory:


 


	
  Signatory

  	
   

  
	
  Signature

  	
  :/s/ A. Allars

  
	
  Name

  	
  :A. Allars

  



 


SIGNED
and by GENAISSANCE

PHARMACEUTICALS, INC. acting by its

duly authorised signatory:


 


	
  Signatory

  	
   

  
	
  Signature

  	
  :/s/ Kevin Rakin

  
	
  Name

  	
  :Kevin Rakin

  



 


17