-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, CiwVooOiLFiYFHvD/uqKkM8mMjdqUkzdaw+mLhMrfl68R64CkEwXPePOsLStac7s gG/e17naUAk8yh9fWbQ5Mw== 0000892569-97-001987.txt : 19970805 0000892569-97-001987.hdr.sgml : 19970805 ACCESSION NUMBER: 0000892569-97-001987 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19970721 ITEM INFORMATION: Acquisition or disposition of assets ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19970804 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: HYCOR BIOMEDICAL INC /DE/ CENTRAL INDEX KEY: 0000719447 STANDARD INDUSTRIAL CLASSIFICATION: IN VITRO & IN VIVO DIAGNOSTIC SUBSTANCES [2835] IRS NUMBER: 581437178 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-11647 FILM NUMBER: 97650658 BUSINESS ADDRESS: STREET 1: 7272 CHAPMAN AVE CITY: GARDEN GROVE STATE: CA ZIP: 92641 BUSINESS PHONE: 7148959558 MAIL ADDRESS: STREET 2: 18800 VON KARMAN AVE CITY: IRVINE STATE: CA ZIP: 92715-1517 FORMER COMPANY: FORMER CONFORMED NAME: HYBRIDOMA SCIENCES INC DATE OF NAME CHANGE: 19860813 8-K 1 CURRENT REPORT AS REPORTED ON 07/21/1997 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ---------------------- FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OF 15(D) OF THE SECURITIES ACT OF 1934 Date of Report (Date of earliest event reported): July 21, 1997 -------------------------- HYCOR BIOMEDICAL INC. - -------------------------------------------------------------------------------- (Exact name of registrant as specified in charter) Delaware 0-11647 58-1437178 - -------------------------------------------------------------------------------- (State or other jurisdiction (Commission (IRS employer of incorporation) file no.) identification no.) 18800 Von Karman Avenue, Irvine, California 92612-1517 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (714) 440-2000 --------------------------- 2 ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS On July 21, 1997, Hycor Biomedical Inc. ("Hycor") acquired from unrelated third parties all of the outstanding stock of Cogent Diagnostics Limited ("Cogent"). Cogent is based in Edinburgh, Scotland. The aggregate consideration paid by Hycor for the shares was $3,025,000, which consisted of $1,450,000 paid in cash at the closing and the issuance by Hycor of secured promissory notes with a total principal amount of $1,575,000. The cash portion of the purchase price was paid for by Hycor from cash on hand and by borrowing approximately $1,000,000 under Hycor's revolving credit facility with Tokai Bank, which credit facility was established in July 1997. The notes issued by Hycor bear interest at 6.85% per year and may be prepaid by Hycor without penalty after January 21, 1998. Accrued interest under the notes is payable quarterly commencing October 21, 1997 and principal is payable in three annual installments of $525,000 each, commencing July 21, 1998. Hycor's obligations under the notes are secured by Hycor's pledge of the acquired Cogent shares in favor of the selling shareholders. Cogent develops, manufactures and markets a broad line of test kits for diagnosis of autoimmune disease. Hycor intends to continue to utilize the assets of Cogent for the same purposes. Copies of the Share Purchase Agreement, form of Secured Loan Notes and form of Shares Pledge between Hycor and selling shareholders of Cogent are attached to this Form 8-K as exhibits and are incorporated herein. ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS (a) Financial Statements of Business Acquired. Not required. (b) Pro Forma Financial Information. Not required. -2- 3 (c) Exhibits. The following exhibits are filed with this report: 10.01 Share Purchase Agreement between the Vendors (as defined therein) and Hycor Biomedical Inc. 10.02 Form of Secured Loan Notes issued by Hycor Biomedical Inc. 10.03 Form of Shares Pledged by Hycor Biomedical Inc. in favor of the selling shareholders SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. HYCOR BIOMEDICAL INC. a Delaware corporation Dated: August 4, 1997 By: /s/ Armando Correa ---------------------------- Armando Correa Director of Finance (Mr. Correa is the Principal Accounting Officer and has been duly authorized to sign on behalf of the registrant.) -3- 4 HYCOR BIOMEDICAL INC. CURRENT REPORT ON FORM 8-K EXHIBIT INDEX Exhibit - ------- 10.01 Share Purchase Agreement between the Vendors (as defined therein) and Hycor Biomedical Inc. 10.02 Form of Secured Loan Notes issued by Hycor Biomedical Inc. 10.03 Form of Shares Pledge by Hycor Biomedical Inc. in favor of the selling shareholders -4- EX-10.1 2 SHARE PURCHASE AGREEMENT 1 EXHIBIT 10.1 AGREEMENT between (1) The persons whose names and addresses are set out in Column (1) of Part I of the Schedule ("THE VENDORS"); and (2) HYCOR BIOMEDICAL INC., a corporation organised under the laws of the State of Delaware, U.S. and having its principal place of business at 18800 Von Karman Avenue, Irvine, California 92612-1517, U.S. ("THE PURCHASER") WHEREAS - (A) COGENT DIAGNOSTICS LIMITED is a company incorporated under the Companies Acts with registered number SC122739 and having its registered office at Orchard Brae House, 30 Queensferry Road, Edinburgh, EH4 2HG, U.K. ("THE COMPANY"), further details of the Company being set out in Part II of the Schedule; (B) The Vendors are the registered holders and beneficial owners of the numbers of Ordinary Shares of 25p each in the capital of the Company shown opposite their respective names in Column (2) of Part I of the Schedule; (C) The persons named in Part II of the Schedule as the directors and secretary are the only directors and the secretary respectively of the Company; (D) The Company has no subsidiaries or subsidiary undertakings; and (E) The Vendors have agreed to sell and the Purchaser has agreed to purchase the number of shares in the capital of the Company listed in Column (2) of Part I of the Schedule on the terms and conditions set out in this Agreement. NOW THEREFORE IT IS HEREBY AGREED as follows:- 1. INTERPRETATION 1.1 In this Agreement the following expressions shall, unless otherwise specified or the context otherwise requires, have the meanings set opposite them respectively: "Accounting Date" 31 March 1997 Page 1 of 47 2 "Accounts" the audited balance sheet of the Company as at the Accounting Date, the audited profit and loss account of the Company for the accounting period ended on the Accounting Date and the directors' and auditors' reports and the notes to such accounts "Associate" (a) in relation to an individual, any spouse, brother, sister or lineal ascendant or descendant and any company which is, or may be, directly or indirectly, controlled (within the meaning of section 840 of the Taxes Act 1988) by any one or more of the foregoing; and (b) in relation to a company, any subsidiary or subsidiary undertaking or holding company of such company and any other subsidiary or subsidiary undertaking of any holding company of such company "Business" the business carried on by the Company at the Completion Date being the developing, manufacturing, marketing and selling of tests/kits for diagnosis of auto-immune disease "business day" a day, other than a Saturday or a Sunday, on which clearing banks are open for business in both Edinburgh and London "Claim for Taxation" any notice, demand, assessment, letter or other document issued or action taken whereby the Company is liable or may become liable to make any payment of or in respect of Taxation (whether or not the Company is primarily liable to pay same and whether or not the Company has or may have any right of relief or reimbursement against any other person or persons) and includes, but is not limited to:- Page 2 of 47 3 (a) the loss or counteracting or reduction in the amount of, or setting off against profits of, any relief, allowance, exemption or credit, which would otherwise have been available to the Purchaser and/or the Company; (b) the loss, reduction in the amount of, cancellation or set off of any right to repayment of Taxation or payment or credit which would otherwise have been available; and (c) the setting off against income, profits or gains or against any Taxation (in either case in respect of which, but for such setting off, the Company would have had a liability to Taxation in respect of which the Vendors would be liable to make a payment to the Purchaser under the Taxation Undertaking) of any relief, allowance, exemption or credit not available before Completion but which arises in respect of any event occurring after Completion; and reference to any Claim for Taxation shall include any Claim for Taxation whether made before or after Completion and whether satisfied or unsatisfied at Completion "Cogent Investments" Cogent Investments Limited (Company No. SC076851), one of the Vendors Page 3 of 47 4 "Companies Acts" the 1985 Act, the Business Names Act 1985, the Companies Securities (Insider Dealing) Act 1985, the Companies Consolidation (Consequential Provisions) Act 1985 and the Company Directors Disqualification Act 1986 , together "Completion" completion of the sale and purchase of the Sale Shares by virtue of the performance by the Vendors and the Purchaser of the obligations assumed by them respectively under Clause 5 "Completion Date" the day on which Completion takes place being 21 July, 1997 or such later date as the Vendors and the Purchaser may agree in writing but not being a date later than 30 July, 1997 "Confidential Information" all information which is at the Completion Date confidential in relation to the Business, including, for the avoidance of doubt, all confidential business, financial, operational, customer and marketing information and trade secrets in relation to the Business "Consideration" the considerable payable by the Purchaser for the Sale Shares as specified in Clause 4.1 "Deposit" (pound)50,000 paid by the Purchaser to the Vendors' Solicitors to be held on behalf of the Vendors and to be set-off against the Consideration payable by the Purchaser at Completion "Directors" William David Neilly, Charles John Fairley, James Weston and Michael Gordon, each of whom is a director of the Company and a Vendor Page 4 of 47 5 "Disclosure Letter" a letter from the Vendors addressed to the Purchaser, disclosing matters for the purpose of Clauses 6.1 and 6.2 and delivered to, and accepted in writing with specific reference to this Agreement by, the Purchaser or the Purchaser's Solicitors (on behalf of the Purchaser) prior to the Purchaser's execution hereof "Employees" Wanda Black, Nadine Grant, Angus Brown, Danielle Knight, Andrew Boyle and Moira Bisset, each of whom is an employee of the Company and a Vendor "Environment" all, or any, of the following media, namely land, water (including, but not limited to, coastal and inland waters, surface waters and ground waters and water in drains and sewers) and the air (and the medium of air includes but is not limited to the air within buildings and the air within other natural or man-made structures above or below ground) "in the agreed terms" with reference to any document, that it shall be in the form of a draft agreed by the relevant parties, prior to the Purchaser's execution hereof "Intellectual Property" such of the following as may be owned, used or enjoyed by the Company:- patents, trade marks, service marks, registered designs, trade names, business names and applications for any of the foregoing; the right to apply for registration of any of the foregoing in any part of the world; any similar or analogous rights in any country; copyrights, design rights or any similar or analogous right in Page 5 of 47 6 any country, inventions, know-how, confidential knowledge or experience available to the Company; all business and agreements relating to any of the foregoing to which the Company is entitled; drawings, blueprints, plans, specifications, formulas, data and descriptive materials, technical files and reports, designs and the benefit of all research, development and design work; including, without prejudice to the foregoing generality, the patents and trade marks listed in Part IV of the Schedule "Leasehold Property" the property at Pentlands Science Park, Penicuik held by the Company pursuant to the Missives "LIBOR" the percentage rate per annum for sterling deposits which appears on the display designated as page "LIBP" on the Reuter Monitor Money Rate Service as at or about 11am on the business day immediately prior to the Completion Date "Loan Notes" the Loan Notes to be issued, pursuant to Clause 4.2(b), by the Purchaser in part satisfaction of the Consideration, and being in the agreed terms to provide, inter alia, for repayment over a three year period (in equal yearly installments) with interest at LIBOR "Missives" the missives entered into at or prior to Completion relating to the Leasehold Property comprising an offer of let, by Tods Murray WS, on behalf of The Moredun Foundation as landlord of the Leasehold Property and an acceptance of such offer, by the Vendor's Solicitors, on behalf of the Company, a brief description of the principal terms of the missives being set out in Part III of the Schedule Page 6 of 47 7 "l985 Act" the Companies Acts 1985 and 1989 "Purchaser's Solicitors" McGrigor Donald, Erskine House, 68-73 Queen Street, Edinburgh, EH2 4NF "Sale Shares" the 89,775 Ordinary Shares of 25p each in the capital of the Company "SSAP" Statement of Standard Accounting Practice "Taxation" all forms of taxation, duties, imposts, charges, withholdings, contributions, impositions and levies whatsoever in the nature of taxation and whenever imposed and whether of the United Kingdom or elsewhere and but is not limited to:- (a) income tax, corporation tax, advance corporation tax, petroleum revenue tax, capital gains tax, inheritance tax, stamp duty, stamp duty reserve tax, rates, value added tax, customs and other import duties, national insurance and social security contributions; and (b) any payment whatsoever which the Company may be or become bound to make to any person, revenue, customs or fiscal authority or any other body or authority as a result of any enactment relating to taxation and any other taxes, duties, levies or imposts supplementing or replacing any of the foregoing; and Page 7 of 47 8 (c) all costs, charges, interest, fines, penalties and expenses incidental or relating to any of the foregoing or relating from a failure to comply with the provision of any enactment relating to taxation "Taxation Undertaking" the undertaking and indemnities given by the Vendors pursuant to Clause 7 "Tax Warranties" the Warranties as to the matters stated in paragraph 5 of Part V of the Schedule "Vendors' Solicitors" Fyfe Ireland WS, Orchard Brae House, Queensferry Road, Edinburgh, EH4 2HG "U.S." United States of America "Warranties" the statements set out in Part V of the Schedule 1.2 In this Agreement, unless otherwise specified or the context otherwise requires:- (a) reference to this Agreement shall include the Recitals and the Schedule annexed and executed as relative hereto; (b) words importing any gender shall include the other genders; words importing natural persons shall include corporations and vice versa; and words importing the singular only shall include the plural and vice versa; and (c) reference to any statute, regulation, directive, treaty or part thereof shall be construed as reference thereto as amended or re-enacted or as the application thereof is modified by other provisions from time to time (whether before or after the last date of execution of this Agreement), shall be construed as including references to any provision of which they are re-enactments (whether with or without modification) and shall be construed as including references to any order, instrument, regulation or other subordinate legislation made pursuant thereto. 1.3 Where there appears a reference in this Agreement to any information, fact or matter having been "disclosed" such reference shall (except where otherwise expressly provided herein) be deemed to refer to, but be restricted only to, such information, facts or matters of which full and accurate details are contained in the Disclosure Letter. Page 8 of 47 9 1.4 In construing this Agreement the ejusdem generis rule shall not apply and accordingly the interpretation of general words shall not be restricted by being preceded by words indicating a particular class of acts, matters or things or being followed by particular examples. 1.5 In this Agreement the headings to Clauses and Parts of the Schedule are inserted for convenience only and shall not affect the construction of this Agreement. 2. CONDITION PRECEDENT 2.1 This Agreement is conditional, in all respects, on the Company entering into new service contracts with each of James Weston and Michael Gordon prior to Completion. 2.2 If the condition specified in Clause 2.1 is not satisfied, or waived in writing by the Purchaser at or prior to Completion the Purchaser may give written notice of withdrawal from this Agreement. 3. SALE AND PURCHASE 3.1 With effect from Completion, each Vendor shall sell, and the Purchaser shall purchase, the number of Sale Shares set opposite the name of the relevant Vendor in Column (2) of Part I of the Schedule. 3.2 The Sale Shares shall be sold free from any option, lien, charge or encumbrance and with all rights attached thereto. 3.3 Each of the Vendors hereby waives or agrees to procure the waiver of any pre-emption rights which may exist in relation to the Sale Shares pursuant to the Articles of Association of the Company or otherwise. 3.4 The Purchaser shall not be obliged to complete the purchase of any of the Sale Shares unless the purchase of all the Sale Shares is completed simultaneously but completion of the purchase of some of the Sale Shares shall not affect the rights of the Purchaser with respect to the others. Page 9 of 47 10 4. CONSIDERATION 4.1 The consideration ("the Consideration") payable for the Sale Shares shall be (pound)1,795,500 in aggregate, which shall be divided equally amongst the Sale Shares of which (pound)858,000 shall be payable in cash and (pound)937,500 by the issue of Loan Notes. 4.2 The Consideration shall be met, at Completion, by: (a) in the case of the Employees and Michael Gordon, the payment to each of them (in accordance with Clause 5.5(a)) of the monetary amounts set out opposite their respective names in Column (3) of Part 1 of the Schedule; and (b) in the case of Cogent Investments and the Directors (other than Michael Gordon), the payment to each of them (in accordance with Clause 5.5(a)) of the monetary amount set opposite their respective names in Column (3) of Part 1 of the Schedule, and the issue to each of them of Loan Notes in the monetary amount set opposite their respective names in Column (3) of Part 1 of the Schedule. 4.3 The Vendors' Solicitors are hereby irrevocably authorised to receive the Consideration and their receipt(s) therefore shall be a full discharge to the Purchaser who shall not be concerned with the distribution thereof to and among the Vendors. 5. COMPLETION 5.1 Completion of the sale and purchase of the Sale Shares shall take place at the offices of the Purchaser's Solicitors on the Completion Date. 5.2 At Completion the Vendors shall deliver to the Purchaser:- (a) duly executed transfers of the Sale Shares in favour of the Purchaser, or such nominee of the Purchaser as the Purchaser may nominate, together with the definitive certificates in respect thereof; (b) any power of attorney under which this Agreement or any document referred to herein or executed in pursuance hereof is executed on behalf of any of the Vendors and such other evidence as the Purchaser may require of the authority of any person executing on behalf of any of the Vendors; (c) such waivers, consents or documents which may be required by the Purchaser to vest in the Purchaser the full beneficial ownership of the Sale Shares and enable the Purchaser to procure them to be registered in the name of the Purchaser or its nominees; Page 10 of 47 11 (d) a written waiver in the agreed terms from each Vendor in respect of any claims which such Vendor may have against the Company as at Completion; (e) the certificate of incorporation, any certificate of incorporation on change of name, common seal (if any), statutory and minute and other record books (written up to the Completion Date) and share certificate books of the Company together with all unused forms of share certificates of the Company; (f) a statement from the Company's bankers as at a date not more than two business days prior to the Completion Date confirming the sums due to the bank and that such sums do not exceed any debt levels permitted by the bank; (g) the Lease and all deeds and documents under the Company's control relating to the Leasehold Property; (h) a written resignation in the agreed terms from all the directors of the Company and Queensferry Secretaries Limited as secretary of the Company; (i) a letter in the agreed terms from the auditors of the Company confirming they shall, on request of the Purchaser or the Company, resign as auditors and confirming that as at Completion no sums are due to the auditors by the Company in respect of outstanding invoices or in respect of work carried out but not invoiced; and (j) the service contracts entered into between the Company and each of James Weston and Michael Gordon pursuant to Clause 2.1. 5.3 At or prior to Completion the Vendors shall repay to the Company all moneys owing as at Completion by the Vendors and/or their Associates to the Company whether or not such sums are due for repayment, including any amount which may be unpaid in respect of any of the Sale Shares. Page 11 of 47 12 5.4 At Completion the Vendors shall procure transaction of the following business to the Purchaser's satisfaction at a meeting of the board of directors of the Company or by written resolution:- (a) approval for registration of the transfers (subject only to their being re-presented duly stamped) in respect of the Sale Shares and the entry in the register of members of the Company of the transferees; (b) revocation of all existing mandates for the operation of bank accounts and the issue of new mandates giving authority to persons nominated by the Purchaser; (c) appointment of such directors, secretary and auditors as the Purchaser may nominate; and (d) change of the registered office of the Company to Douglas House, Pentlands Science Park, Penicuik, Midlothian, EH26 0PZ 5.5 At Completion the Purchaser shall, subject to compliance by the Vendors with the obligations incumbent on them under Clauses 5.2, to 5.4 (inclusive); (a) pay the Vendors' Solicitors by telegraphic transfer of funds to:- Bank: Bank of Scotland, 38 St Andrew's Square, Edinburgh Sort Code: 80-31-20 Account Number: 00285809 Account Name: Fyfe Ireland Client Account the sum of (pound)808,000 and authorise the release of the Deposit of (pound)50,000, to the Vendor's Solicitors, being in aggregate, that cash part of the Consideration due pursuant to Clauses 4.2(a) and (b) for the purchase of the Sale Shares; and (b) issue the Loan Notes to each of Cogent Investments and the Directors (other than Michael Gordon) (the Vendors' Solicitors being irrevocably authorised to receive same in terms mutatis mutandis as contained in Clause 4.3) in part satisfaction of the Consideration due pursuant to Clause 4.2(b) for the purchase of the Sale Shares. Page 12 of 47 13 6. WARRANTIES, INDEMNITIES AND UNDERTAKINGS 6.1 Cogent Investments and each of the Employees severally warrants to the Purchaser that, subject only to the matters disclosed in the Disclosure Letter, each of the Warranties contained in paragraphs 1.1 to 1.5 (inclusive) of Part V of the Schedule is and will at Completion be true and accurate . 6.2 The Directors warrant to the Purchaser that, subject only to the matters disclosed in the Disclosure Letter, each of the Warranties is and will at Completion be true and accurate. 6.3 The Directors agree that the Warranties shall (mutatis mutandis) apply to any business of the Company carried on outside the United Kingdom and for the purpose of construction the references to any statutory provision enacted, or accounting principles applying, in the United Kingdom shall include references to any corresponding provision in the local legislation and (where relevant) to generally accepted accounting principles, and the references to any governmental or administrative authority or agency shall include references to the equivalent local governmental or administrative authority or agency. 6.4 If after the Purchaser shall have complied with the provisions of Clause 5.5 it shall be found that any of the Warranties was when given not true and accurate then, subject to Clause 8 (Limitation of Liability), Cogent Investments, the Employees and the Directors (as the case may be), shall, on demand, pay the Purchaser:- (a) the amount necessary to put the Company and/or the Purchaser, as the case may be, into the position which would have existed had the Warranty been true and accurate; and (b) all costs and expenses incurred by the Company and the Purchaser as a result of the Warranty not being true and accurate (including, without limitation, all costs and expenses of enforcing any Warranty claim) and any other loss or damage suffered by them as a result thereof. 6.5 Where any of the Warranties are qualified by the expression "to the best of the knowledge, information and belief of the Directors" or "so far as the Directors are aware" or any similar expressions, that Warranty shall be deemed to include additional statements that the knowledge, information and belief or awareness of any one Director shall be the knowledge, information and belief or awareness of all the Director together, that it has been made after due, diligent and careful enquiry. Page 13 of 47 14 7. TAXATION UNDERTAKING 7.1 The Directors undertake, subject to Clause 8 (Limitation of Liability), to pay the Purchaser, on demand:- (a) the amount of each and every liability for Taxation payable by the Company arising in respect of or as a consequence of any Claim for Taxation or any depletion in the assets of the Company as a result of any Claim for Taxation or any settlement of any Claim for Taxation; and (b) all costs, charges and expenses reasonably incurred by the Company or the Purchaser in relation to or resulting from any demands, actions, proceedings or claims in respect of any Claim for Taxation. 7.2 For the purposes of Clauses 7.1(a) and (b):- (a) if a loss or counteracting of any relief, allowance, exemption or credit treated as an asset or taken into account in computing liabilities in any statutory accounts of the Company in respect of any financial year (and not subsequently reversed in any such statutory accounts prior to the Accounts or in the Accounts) which would otherwise have been granted or been available to the Company results in the Company suffering a liability to Taxation during its current or succeeding accounting periods that liability shall itself be a Claim for Taxation; and (b) if there is a nullifying, cancellation or set-off of a right to repayment of Taxation treated as an asset or taken into account in computing liabilities in any statutory accounts of the Company in respect of any financial year (and not subsequently reversed in any such statutory accounts prior to the Accounts or in the Accounts) which would otherwise have been available to the Company then the amount of the repayment which is lost as a result shall be a Claim for Taxation. 7.3 The undertaking contained in Clause 7.1 should apply only where such Claim for Taxation:- (a) is made wholly in respect of any acts, omissions or transactions whatsoever of the Directors or the Company occurring or entered into on or before Completion or, where the acts or omissions or transactions of the Directors or the Company occur or are entered into after Completion but are pursuant to the binding obligation of a Director or the Company arising on or before Completion; or Page 14 of 47 15 (b) is made in respect of or results from, or is calculated by reference to, any actual or deemed income, profits or gains earned, received or accrued, or deemed to have been earned, received or accrued, on or before Completion; or (c) is made by reference to or results from any dividend or distribution paid or made, or deemed to have been paid or made, prior to Completion. 7.4 The undertaking contained in Clause 7.1 shall not apply to any Claim for Taxation to the extent that provision or reserve in respect thereof was made in Accounts. 7.5 In respect of any payment due from the Vendors under the undertaking contained in Clause 7.1 if the same will be or has been subject to Taxation, the Purchaser may demand from the Vendors such amount as will ensure that the net receipt, after such Taxation, to the Purchaser in respect of such payment is the same as it would have been were the payment not subject to such Taxation. 8. LIMITATION OF LIABILITY 8.1 The liability of the Vendors under or in respect of the Warranties and/or the Taxation Undertaking shall be limited as follows: (a) the amount of any successful claim against the Vendors under the Warranties and/or the Taxation Undertaking shall be deemed to constitute a reduction in the Consideration; (b) the aggregate amount of all claims against the Vendors under the Warranties and/or the Taxation Undertaking shall be limited, in each case, to the actual amount of the Consideration received by that Vendor; (c) notwithstanding the provisions of Clause 8.1(b) the aggregate liability of the Directors under the Warranties (save in respect of the Tax Warranties ) shall not exceed (pound)500,000 and shall be limited in the case of each individual Director by prorating each claim made under the Warranties (save the Tax Warranties) among the Directors in the following proportions: William David Neilly 40.45%; Charles John Fairley 40.45%; James Weston 17.15%; and Michael Gordon 1.95%; Page 15 of 47 16 (d) notwithstanding the provisions of Clause 8.1(b) the aggregate liability of the Directors under the Tax Warranties and the Taxation Undertaking shall not exceed the aggregate Consideration received by them and shall be limited in the case of each individual Director by prorating each claim made under the Tax Warranties and the Taxation Undertaking in the proportions contained in Clause 8.1(c); (e) the Directors shall have no liability under the Warranties unless and until the aggregate liability of the Directors in respect of claims under the Warranties exceeds (pound)5,000 in which event the Directors shall be liable for and the Purchaser shall be entitled to the whole amount and not merely the excess over (pound)5,000. For the avoidance of doubt, this limit shall apply on an "all claims" basis and not on an "each and every claim" basis; (f) the Directors shall not be liable in respect of any single claim under the Warranties where the liability in respect of that claim does not exceed (pound)1,000; provided that for this purpose claims arising out of the same set of circumstances shall be aggregated; (g) no claim shall be brought by the Purchaser under or in respect of any breach of the Warranties (other than the Tax Warranties) unless notice in writing of such claim has been given to the Vendors not later than 21 July 1999. Any such claim shall (if it has not been previously satisfied, settled or withdrawn) be deemed to have been withdrawn at the expiration of a period of six months from the giving of such notice unless court proceedings in respect of it have commenced by being both issued and served on the Vendors save that in respect of a claim based on a liability which is a contingent liability or which is otherwise subject to some contingency such time limit of six months shall not start to run until such contingent liability or other contingency has crystallised; Page 16 of 47 17 (h) no claim (except in the case of a claim involving fraud, in respect of which no time limit shall apply) shall be brought by the Purchaser under or in respect of any breach of the Tax Warranties or the Taxation Undertaking unless notice in writing of such claim has been given to the Vendors not later than 21 July 2003. Any such claim shall (if it has not been previously satisfied, settled or withdrawn) be deemed to have been withdrawn at the expiration of a period of six months from the giving of such notice unless court proceedings in respect of it have commenced by being both issued and served on the Directors save that in respect of a claim based on a liability which is a contingent liability or which is otherwise subject to some contingency such time limit of six months shall not start to run until such contingent liability or other contingency has crystallised; (i) the Vendors shall have no liability under the Warranties to the extent that provision, reserve, or allowance has been made in respect of the matter to which such liability relates in the Accounts; and (j) the Vendors shall have no liability under the Warranties or the Taxation Undertaking; (i) if such liability would not have arisen but for a voluntary act, transaction or omission of the Purchaser and/or the Company on or after the date of Completion where such act, transaction or omission is outside the ordinary course of business of the Company; or (ii) to the extent that such breach or claim arises as a result of any change in the accounting bases or policies in accordance with which the Company values its assets or calculates its liabilities or any other change in accounting practice (other than a change necessary to bring such bases, policies or practices into line with generally accepted accounting practice); or (iii) in respect of any matter or thing done in consequence of the execution and performance of this Agreement. Page 17 of 47 18 8.2 The Purchaser shall or shall procure that the Company shall reimburse the Vendors an amount equal to any sum paid by the Vendors under the Warranties and/or the Taxation Undertaking which is subsequently recovered by the Purchaser or the Company from any third party. 8.3 If any matter comes to the notice of the Purchaser and/or the Company which may result in a claim under the Warranties, the Purchaser shall: (a) give written notice thereof to the Vendors as soon as reasonably practicable specifying the nature of the claim in reasonable detail including details of the event or matter of default which gives rise to the claim, the breach that results and the amount claimed; (b) shall keep the Vendors reasonably informed of all matters relating to such claim and not settle or make any admission or agreement in relation to or compromise such claim without first consulting the Vendors. 8.4 Nothing in this Agreement or the Taxation Undertaking shall affect the Purchaser's duty to mitigate its or the Company's loss. 9 POST-COMPLETION UNDERTAKINGS 9.1 Each of the Directors severally undertakes to the Purchaser, and the Company with the intent of securing to the Purchaser the full benefit and value of the goodwill, know-how and connections of the Company and as an essential part of the agreement for the purchase and sale of the Sale Shares, that: (a) he will not during the period of two years after Completion (or, if shorter, for so long as the Purchaser, its subsidiaries, or any member of the Purchaser's group, including the Company, shall continue the Business as a going concern) either solely or jointly or in partnership or association with or as director, manager, agent, employee, consultant, servant or representative of or for any other person, firm or company directly or indirectly carry on or be engaged or concerned or interested in any business competing with the Business provided that nothing contained in this Clause 9.1(a) shall preclude any Vendor from holding any shares or loan capital (not exceeding 3% of the shares or loan capital of the class concerned then in issue) in any company competing with the Business whose shares are listed or dealt in on a recognised investment exchange; Page 18 of 47 19 (b) he will not during the period of two years from Completion (or, if shorter, for so long as the Purchaser, its subsidiaries or any member of the Purchaser's group, including the Company, shall continue the Business as a going concern) directly or indirectly canvass, solicit or interfere with or endeavour to canvass, solicit or interfere with, either on his own behalf or for any other person, firm, company or other undertaking competing with the Business the custom of any person, firm, company or other undertaking who at any time during the period of twelve months prior to the Completion Date was a customer of the Company; (c) he will not during the period of two years from Completion (or, if shorter, for so long as the Purchaser, its subsidiaries or any member of the Purchaser's group, including the Company, shall continue the Business as a going concern) either on his own behalf or for any other person, firm, company or other undertaking directly or indirectly solicit or endeavour to entice away from the Company any person who is an employee, director, officer, agent or consultant of the Company at the Completion Date; (d) he will not following the Completion Date, directly or indirectly, divulge or make use of any Confidential Information, unless ordered to do so by a court of competent jurisdiction or in the proper performance of his duties as an employee of the Company; and (e) save in respect of James Weston and Michael Gordon he shall not following the Completion Date represent himself as being in any way connected with the Company or the Business. 9.2 Each of the Employees and Cogent Investments severally undertakes to the Purchaser, and the Company with the intent of securing to the Purchaser the full benefit and value of the goodwill, know-how and connections of the Company and as an essential part of the agreement for the purchase and sale of the Sale Shares, that, he will not, following the Completion Date, directly or indirectly, divulge or make use of any Confidential Information, unless ordered to do so by a court of competent jurisdiction or in the proper performance of his duties as an employee of the Company. Cogent Investments further undertakes to the Purchaser and the Company that it will not following the Completion Date represent itself as being in any way connected with the Company or the Business. Page 19 of 47 20 9.3 The Vendors acknowledge that in view of the value of the assets of the Company as stated in the Accounts, the level of Consideration is payable principally in respect of the goodwill and business connections and the Intellectual Property rights of and know-how and experience available to the Company and has been calculated, by the Purchaser, to reflect (a) the value, to the Purchaser, of the Intellectual Property rights and know-how and experience available to the Company and (b) an amount payable to the Vendors for agreeing to be bound, to the fullest extent, by the restrictions contained in Clauses 9.1 and 9.2. Each of the Vendors considers the restrictions contained in Clauses 9.1 and 9.2 to be reasonable and necessary to secure to the Purchaser the full benefit and value of the goodwill and business connections and the Intellectual Property rights of and know-how and experience available to the Company. 9.4 The Vendors hereby jointly and severally agree at the reasonable request and at the cost of the Purchaser to enter into any further deeds and/or documents and do all such further acts or things as may be necessary to give effect to the said restrictions . 10 ANNOUNCEMENTS 10.1 The Vendors shall, on Completion, make such announcements to the employees, agents, customers and suppliers of the Company as the Purchaser may reasonably require. 10.2 Subject to the provisions of Clause 10.1, neither the Purchaser nor the Vendors shall make any press or media announcement or issue any press or media statement or press or media release with respect to this Agreement or any matter contained herein without obtaining the prior written agreement of the other party to the contents thereof and the manner and timing of its presentation and publication. 10.3 The provisions of Clause 10.2 shall not apply to any announcement or circular required to be made or issued by the Purchaser so as to comply with its obligations as a public company in the U.S. 11 ASSIGNATION AND TRANSFER 11.1 The Purchaser shall be entitled, without the consent of or notice to the Vendors, to assign or transfer in whole or in part the benefit and/or burden of this Agreement or any right and/or obligation of the Purchaser under this Agreement to any other company which at the time of the assignation or transfer is the holding company of the Purchaser or a subsidiary of the Purchaser or a subsidiary of the holding company of the Purchaser. 11.2 Save as provided in Clause 11.1, neither party shall be entitled without the prior written consent of the other to assign or transfer either the benefit or burden of this Agreement or any right and/or obligation under this Agreement. Page 20 of 47 21 11.3 This Agreement shall be binding on, and shall enure for the benefit, of any person to whom any right and/or obligation is assigned or transferred pursuant to Clauses 11.1 and/or 11.2. 12 POST-COMPLETION EFFECT 12.1 Notwithstanding Completion each and every right and obligation of the Purchaser and the Vendors under this Agreement shall, except in so far as fully performed at Completion, continue in full force and effect. 12.2 Any provision of this Agreement which is expressed or intended to have effect on, or to continue in force after, the termination of this Agreement shall have such effect, or, as the case may be, continue in force, after such termination. 12.3 This Agreement shall be binding on the Vendors and their respective executors, personal representatives and successors whomsoever and, unless the context otherwise requires, references to the Vendors shall include references to such executors, personal representatives and successors. 13 ANCILLARY UNDERTAKING The Vendors jointly and severally undertake to the Purchaser that the Vendors shall from time to time after Completion execute such further documents and do such further acts and things as the Purchaser may require for the purpose of vesting in it the Sale Shares and the full benefit of this Agreement. 14 CONSENTS Any consent given by a party under any provision of this Agreement shall be effective only in the instance and for the purpose for which it is given and the giving of any such consent in respect of any act or thing shall not operate as a waiver of any requirement on the party to whom the consent is given not to do that or any other act or thing at any time in the future without such consent. 15 ILLEGALITY, DELAY 15.1 If any provision of this Agreement shall to any extent be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby and each of the provisions of this Agreement shall be valid, legal and enforceable to the fullest extent permitted by law. Page 21 of 47 22 15.2 No failure on the part of any party to exercise, and no delay on its part in exercising, any right or remedy under this Agreement will operate as a waiver thereof, nor will any single or partial exercise of any right or remedy preclude any other or further exercise thereof or the exercise of any other right or remedy. 16 RIGHTS OF ACTION 16.1 The rights of the Purchaser in respect of a breach of any provision of this Agreement shall not be affected by the giving of any time or other indulgence by the Purchaser to any person nor by the Purchaser rescinding or not rescinding this Agreement nor by any other cause whatsoever except a specific waiver or release by the Purchaser in writing and any such waiver or release shall not prejudice or affect any remaining rights of the Purchaser. 16.2 Notwithstanding any rule of law to the contrary, any right of rescission available to the Purchaser shall be in addition to and without prejudice to all other rights and remedies available to it, including, without limitation, the right to claim for monetary damages in the event of any breach of the terms of this Agreement by the Vendors. 16.3 The rights and remedies of the Purchaser under this Agreement are cumulative and not exclusive of each other or of any other right or remedy. 17 COSTS AND STAMP DUTY 17.1 The Purchaser and the Vendors shall each pay their own costs and outlays in connection with the preparation, execution and carrying into effect of this Agreement. 17.2 The Purchaser shall be responsible for payment of all stamp duty in respect of this Agreement and the carrying into effect thereof. 18 ENTIRE AGREEMENT AND VARIATIONS 18.1 This Agreement (together with any documents referred to in this Agreement to which the Purchaser and the Vendors are parties) constitutes the entire agreement between the parties with respect to the subject matter hereof and expressly excludes any warranty, condition or other undertaking implied at law or by custom and supersedes all previous agreements and understandings between the parties with respect thereto and each of the parties acknowledges and confirms that it does not enter into this Agreement in reliance on any representation, warranty or other undertaking not fully reflected in the terms of this Agreement (or in one of such documents). Page 22 of 47 23 18.2 No variation of this Agreement shall be effective unless made in writing and duly executed by both the Purchaser and the Vendors. 19 GOVERNING LAW 19.1 This Agreement shall be governed by and construed in accordance with the law of Scotland. 19.2 The parties hereto submit to the non-exclusive jurisdiction of the Court of Session as regards any claim, dispute or matter arising out of or relating to this Agreement and its implementation or effect. 20 NOTICES 20.1 Any notice or other communication to be given by one party to another under, or in connection with the matters contemplated by, this Agreement shall be communicated as follows:- (a) if to the Purchaser, to:- Hycor Biomedical Inc. 18800 Von Karman Avenue Irvine California 92612-1517 U.S. Facsimile no: 001-714-440 2220 Attention: Mr R Jones and copied to:- McGrigor Donald Erskine House 68-73 Queen Street Edinburgh EH 2 4NF Facsimile no: 0131-226 7700 Attention: Mr A A Orr Page 23 of 47 24 (b) if to the Vendors, to:- Fyfe Ireland, WS Orchard Brae House Queensferry Road Edinburgh EH4 2HG Facsimile no: 0131-343 3166 Attention: Ms M Radcliffe or in either case to such other address and/or facsimile number and/or marked for such other attention as may from time to time be specified by the relevant party to the other, by notice given in accordance with this Clause 20, for the purposes of this Clause 20. 20.2 Any notice or other communication to be given by one party to another under, or in connection with the matters contemplated by, this Agreement shall be in writing and shall be given by letter delivered by hand or sent by first class prepaid recorded delivery or registered post or by facsimile, and shall be deemed to have been received:- (a) in the case of delivery by hand prior to 5 p.m. on a business day, when delivered and in any other case on the business day following the day of delivery; or (b) in the case of first class prepaid recorded delivery or registered post, on the second business day following the day of posting; or (c) in the case of facsimile where the transmission occurs prior to 5 p.m. on a business day, on acknowledgement by the addressee's facsimile receiving equipment and in any other case on the business day following the day of acknowledgement by the addressee's facsimile receiving equipment. IN WITNESS WHEREOF these presents consisting of this and the 23 preceding pages are, together with the Schedule, executed, in duplicate, as follows:- SIGNED by WILLIAM DAVID NEILLY at on the day of July 1997 in the presence of Witness .................................... ......................... Full name................................... Address..................................... Page 24 of 47 25 SIGNED by Charles JOHN FAIRLEY at on the day of July 1997 in the presence of Witness..................................... ........................ Full name................................... Address..................................... SIGNED by JAMES WESTON at on the day of July 1997 in the presence of Witness.................................... ........................ Full name.................................. Address.................................... SIGNED by MICHAEL GORDON at on the day of July 1997 in the presence of Witness.................................... ........................ Full name.................................. Address.................................... SIGNED by WANDA BLACK at on the day of July 1997 in the presence of Witness.................................... ........................ Full name.................................. Address.................................... Page 25 of 47 26 SIGNED by NADINE GRANT at on the day of July 1997 in the presence of Witness.................................... ........................... Full name.................................. Address.................................... SIGNED by ANGUS BROWN at on the day of July 1997 in the presence of Witness.................................... ........................... Full name.................................. Address.................................... SIGNED by DANIELLE KNIGHT at on the day of July 1997 in the presence of Witness.................................... .......................... Full name.................................. Address.................................... SIGNED by ANDREW BOYLE at on the day of July 1997 in the presence of Witness.................................... .......................... Full name.................................. Address.................................... SIGNED by MOIRA BISSET at on the day of July 1997 in the presence of Witness.................................... .......................... Full name.................................. Address.................................... Page 26 of 47 27 SUBSCRIBED on behalf of COGENT INVESTMENTS LIMITED at on the July 1997 by Director/ Attorney in the presence of:- Witness................................. .............................. Full name............................... Address................................. SUBSCRIBED on behalf of HYCOR BIOMEDICAL, INC at on the July 1997 by Director in the presence of:- Witness................................. .............................. Full name............................... Address................................. Page 27 of 47 28 THIS IS THE SCHEDULE REFERRED TO IN THE FOREGOING SHARE PURCHASE AGREEMENT BETWEEN (1) THE VENDORS (AS DEFINED THEREIN) AND (2) HYCOR BIOMEDICAL INC. PART I THE VENDORS
(1) (2) (3) NAMES AND ADDRESS OF NUMBER OF SALE SHARES CONSIDERATION (IN CASH/LOAN VENDORS NOTES) (A) DIRECTORS WILLIAM DAVID NEILLY 25.650 L231,750 cash Belmont House L281,250 Loan Notes The Crescent Dunblane FK15 0DW CHARLES JOHN FAIRLEY 25,650 L231,750 cash 15 Grant Drive L281,250 Loan Notes Dunblane FK15 9HD JAMES WESTON 10,875 L 98,250 cash 7 Princes Mary Place L119,250 Loan Notes Haddington East Lothian EH41 3NQ MICHAEL GORDON 1,237 L 24,740 cash 27 Ulster Drive Edinburgh (B) COGENT INVESTMENTS COGENT 23,324 L210,730 cash INVESTMENTS L255,750 Loan Notes LIMITED Orchard Brae House 30 Queensferry Road Edinburgh EH4 2HG (C) EMPLOYEES WANDA BLACK 1,012 L 20,240 cash 45 Russell Road Duntocher Clydebank
Page 28 of 47 29 NADINE GRANT 1,069 L 21,380 cash 43 Echline Grove South Queensferry Edinburgh ANGUS BROWN 393 L 7,860 cash (3F1) 15 Lochrin Terrace Edinburgh DANIELLE KNIGHT 227 L 4,540 cash 9 Fairway Haddington East Lothian EH41 4EW ANDREW BOYLE 169 L 3,380 cash 9/11 Calder Drive Edinburgh MOIRA BISSET 169 L 3,380 cash 5 Gilmerton Dykes Drive Edinburgh ---------------- ----------------- 89,775 L1,795,500
Page 29 of 47 30 PART II THE COMPANY Date of incorporation: 5 February 1990 Registered number: SC 122739 Registered office: Orchard Brae House 30 Queensferry Road Edinburgh EH4 2HG Authorised share capital: (pound)40,000, comprising 100,000 Ordinary shares of 25p each and 15,000 10% Cumulative Redeemable Preference Shares of (pound)1 each Issued share capital: (pound)22,500 comprising 90,000 Ordinary Shares of 25p each Directors: William David Neilly, Charles John Fairley, James Weston and Michael Gordon Secretary: Queensferry Secretaries Limited Auditors: KPMG Saltire Court 20 Castle Terrace Edinburgh EH1 2EG Accounting reference date: 31 March Latest accounts filed: 31 March 1997 Date of latest annual return: 5 February 1997 Extant registered charges: Floating Charge dated 27 April 1993 and registered 14 May 1993 in favour of the Clydesdale Bank plc over the whole undertaking and all property and assets, present and future, of the Company, including uncalled capital, in security of all sums due and to become due.
Page 30 of 47 31 PART III THE LEASEHOLD PROPERTY Leasehold Property: Douglas House Pentlands Science Park Penicuik Midlothian EH26 0PZ Landlord: The Moredun Foundation Tenant: The Company Date of Commencement: 1 April, 1997 Term of Lease: 14 1/2 years Date of Break Options: at 4 1/2years (30 September 2001) and 10 years (31 March 2007) Rent: Year 1(pound)25,769 Year 2(pound)51,538 Year 3(pound)54,769 Year 4(pound)54,769 Year 5(pound)58,000 Rent Reviews: at 4 1/2 years (30 September 2001) and 10 years (31 March 2007) Use: Use Classes 2(b) and 4(a) or (b) of the Town and Country Planning (Use Classes) (Scotland) Order 1989 being uses related to life sciences
Page 31 of 47 32 PART IV INTELLECTUAL PROPERTY A. PATENTS (1) European Application Number: 88307819.8 European Patent Number: 0306206 Priority Date: 27 August 1987 Application Date: 24 August 1988 Granted: 16 June 1993 Title: Assay Device and Method States in which Patent is live: Germany Spain France Italy Luxembourg Renewal Fees Due (National): 31 August 1997 (2) European Application Number: 94308091.1 European Publication Number: 0651249 Priority Date: 3 November 1993 Application Date: 2 November 1994 Title: Analytical Device Status: Pending Application - the Search report has just been issued Designated States: Germany Spain Italy France United Kingdom Next Renewal Due (EPO): 30 November 1997 (3) European Application Number: 85301058.5 European Patent Number: 0162533 Priority Date: 20 February 1984 Application Date: 18 February 1985 Granted: 11 September 1991 Title: The Detection of Human Cytomegalovirus Specific IGM Designated States: Austria Belgium Switzerland Germany France Italy Luxembourg Netherlands Renewal Date: 18 February 1998
Page 32 of 47 33 (4) Patent Number: 2154609 Title: HCMV Monocolonal Antibodies and their use in infection of HCMV injection and HCMV Specific IGM, methods of detect ING viral antigens Country: United Kingdom Next Renewal Due: 18 February 1998 (5) Patent Number: 4716104 Application Number: 703,535 Filed: 20 February 1985 Date of Patent: 29 December 1987 Country: United States of America Title: Detecting presence of HCMV - Specific IGM B. TRADE MARKS (1) Registration Number: 1397839 Application Date: 8 September 1989 Status: Registered Next Renewal Due: 8 September 2006 Mark: AUTOSTAT Class 1 Goods: Chemical and biological reagents; all included in Class 1 and for use in connection with diagnostic kits and analytical kits (2) Registration Number: 1396548 Application Date: 8 September 1989 Status: Registered Next Renewal Due: 8 September 2006 Mark: AUTOSTAT Class 10 Goods: Apparatus for use in diagnosis; lasers; ultrasonic apparatus and instruments; gas detectors; all being surgical, medical, therapeutic, opthalmic, dental or veterinary apparatus; parts and fittings for all the aforesaid goods: all included in Class 10
Page 33 of 47 34 PART V THE WARRANTIES 1. THE VENDORS 1.1 Each Vendor has full power and authority to enter into and perform the Agreement and the Agreement when executed will constitute binding obligations on each Vendor. 1.2 The Vendors are entitled to sell and transfer to the Purchaser the full legal and beneficial ownership of the Sale Shares free from all liens, charges and encumbrances on the terms of the Agreement, without the consent of any third party. 1.3 The Vendors, and their Associates, do not have any rights or interests, directly or indirectly, in any businesses other than those now carried on by the Company which are or are likely to be, or become, competitive with the business of the Company, save as the registered holder or beneficial owner of any class of securities of any company which is dealt in on a recognised investment exchange (as defined in section 207(1) of the Financial Services Act 1986) and in respect of which a Vendor, with his Associates, holds and is beneficially interested in less than 3 per cent of any single class of the securities in that company. 1.4 There is no outstanding indebtedness of any Vendor, or his Associates, to the Company. 1.5 There is no outstanding indebtedness of the Company to any Vendor or his Associates. 2 CORPORATE MATTERS 2.1 The information relating to the Company in the recitals to the Agreement and Part II of the Schedule is true in all respects. 2.2 The Sale Shares constitute the whole of the issued and allotted share capital of the Company. 2.3 There are no agreements or arrangements in force, whether legally binding or not, which grant to any person the right to call for the issue, allotment or transfer of any share or loan capital of the Company. Page 34 of 47 35 2.4 There is not, nor is there any agreement or arrangement to create, any pledge, lien, charge or encumbrance on, over or affecting any of the Sale Shares. 2.5 The register of members, register of applications and allotments, minute book and other statutory books of the Company have been properly kept and contain an accurate and complete record of the matters with which they should deal and no notice or allegation, that any of them is incorrect or should be rectified, has been received. 2.6 All returns, particulars, resolutions and documents required by the Companies Acts, to be filed with the Registrar of Companies in respect of the Company have been duly filed and are correct in all material respects. 2.7 A copy of the Memorandum and Articles of Association of the Company is attached to the Disclosure Letter and is accurate and complete in all respects. 2.8 The Company: (a) is not the holder or beneficial owner of, nor has it agreed to acquire, any share of loan capital of any other company (whether incorporated in the United Kingdom or elsewhere); and (b) does not have outside the United Kingdom, any branch, agency or place of business or any permanent establishment. 3 ACCOUNTING MATTERS 3.1 The Accounts have been prepared in accordance with the historical cost convention and the bases and policies of accounting, adopted for the purpose of preparing the Accounts, are the same as those adopted in preparing the audited accounts of the Company in respect of the last three preceding accounting periods apart from changes required to conform to current financial reporting standards. 3.2 The Accounts:- (a) give a true and fair view of the assets, liabilities (including contingent, unqualified or undisputed liabilities) and commitments of the Company at the Accounting Date and the profits for the financial period ended on that date; Page 35 of 47 36 (b) comply with the requirements of the Companies Acts and other relevant statutes; (c) comply with all current SSAP's and statements issued by, or with the approval of, the Accounting Standards Board applicable to a United Kingdom company; (d) properly reflect the financial position of the Company as at that date and disclose all assets of the Company to the extent required by the Companies Acts, applicable SSAPs and other relevant statutes and accounting principles and practices in the United Kingdom; and (e) to the extent required by the Companies Acts, applicable SSAPs and other relevant statutes and accounting principles and practices in the United Kingdom make proper and adequate provision or reserve for all liabilities and capital commitments of the Company outstanding at the Accounting Date, including contingent, unquantified or disputed liabilities. 3.3 All the accounts, books, ledgers, financial and other records of whatsoever kind, of the Company are in its possession, have been fully, properly and accurately kept and completed and give a true and fair view of its financial position. 4 FINANCIAL MATTERS 4.1 Save as disclosed in the Accounts, the Company did not have any capital commitments outstanding at the Accounting Date and the Company has not, since then, other than in the ordinary and normal course of business, incurred or agreed to incur any capital expenditure or commitments or disposed of or agreed to dispose of any capital assets. 4.2 Since the Accounting Date the Company has not paid, made or declared any dividend or other distribution. 4.3 The Company has not, since the Accounting Date, repaid or become liable to repay any indebtedness in advance of its stated maturity. 4.4 There are no liabilities (including contingent liabilities) which are outstanding on the part of the Company other than those liabilities disclosed in the Accounts or incurred in the ordinary and proper course of trading. Page 36 of 47 37 4.5 None of the facilities available to the Company (full and accurate details of which are set out in the Disclosure Letter) is dependent on the guarantee or indemnity of, or any security provided by, third party. 4.6 So far as the Directors are aware, the amounts due from trade debtors as at Completion (less the amount of any relevant provision or reserve, determined on the same basis as that applied in the Accounts and disclosed in the Disclosure Letter) will be recoverable in full in the ordinary course of business. 4.7 No part of the amounts included in the Accounts as owing by any debtors is overdue by more than 60 days or has been released on terms that any debtor pays less that the full book value of his debt. 4.8 There is not now outstanding, in respect of the Company, any guarantee or agreement for indemnity or for suretyship, given by, or for the benefit of, the Company. 4.9 The Company does not have outstanding, nor has it agreed to create or issue, any loan capital, nor has it factored any of its debts, or engaged in financing of a type which would not be required to be shown or reflected in the Accounts. 4.10 The Company has not received notice from any lender requiring repayment by the Company or intimating the enforcement of any security which it may hold over any assets of the Company and, so far as the Directors are aware, there are no circumstances likely to give rise to any such notice. 4.11 The Disclosure Letter contains full details of any grant, subsidy or financial assistance from any government department or agency or other authority and, so far as the Directors are aware, the Company has not done, nor omitted to do any act or thing which is likely to result in all, or part, of any such grant, subsidy or financial assistance becoming repayable, or being forfeited or withheld, in whole or in part. 5 TAXATION MATTERS 5.1 There has not been any transaction, arrangement, event or omission occurring after the Accounting Date:- (a) which has caused, or will cause, any expenditure (including any payment of Taxation) incurred or deemed to have been incurred for Taxation purposes by the Company not to qualify for all or part of any relief, allowance, credit or deduction for Taxation purposes which might be expected by the Purchaser to be available to the Company; or Page 37 of 47 38 (b) which has given rise, or will give rise (i) to income or gains being deemed to arise to, or supplies being deemed to be made by, the Company for Taxation purposes, and/or (ii) to any Taxation otherwise being assessable or chargeable on the Company when the relevant income or gains do not, in fact, accrue to or the relevant supplies are not in fact made by, the Company; or (c) the Taxation treatment of which is or may become the subject of any dispute with the Taxation authority. 5.2 The Company has not, within the last six years:- (a) been the subject of any investigation by the Inland Revenue, or any other relevant Taxation authority; or (b) been the subject of any discovery by the Inland Revenue, or any other relevant Taxation authority; and the Directors are unaware of any facts or matters which are likely to or may lead to any such investigation or discovery. 5.3 The Accounts make full provision or reserve for all Taxation (including deferred Taxation) for which liability is known or could reasonably be estimated for any period up to and including the period ending on the Accounting Date. 5.4 All returns, computations and payments which should be or should have been, made by the Company for any Taxation purpose have been made within the requisite periods and are up-to-date, correct and on a proper bases and none of them is, or so far as the Directors are aware likely to be, the subject of any dispute with the Inland Revenue or other Taxation authorities. 5.5 The Company has duly deducted and accounted for all amounts which it has been obliged to deduct in respect of Taxation and, in particular, has properly operated the PAYE system, by deducting tax as required by law, for all payments made, or treated as made, to its employees or former employees, and accounting to the Inland Revenue for all tax so deducted and for all tax chargeable on benefits provided for its employees or former employees. Page 38 of 47 39 5.6 So far as the Directors are aware there are no facts or circumstances which would adversely affect the entitlement of the Company to relief from, credit for or right of set-off against, Taxation. 5.7 All expenditure incurred by the Company or which it may incur under any subsisting commitment on the provision of machinery or plant has qualified or will qualify (if not deductible as a trading expense of a trade carried on by the Company) for writing down allowances under the Capital Allowances Act 1990 Part II (Machinery and Plant). 5.8 The Company has not, nor has it ever been, a member of any group for Taxation purposes. 5.9 The Company has duly registered and is a taxable person for the purposes of value added tax and the Company has complied, in all material respects, with all statutory provisions and regulations relating to value added tax and has duly paid or provided for all amounts of value added tax for which it is liable. 5.10 The Company has never made any transfer of the kind described in Taxation of Chargeable Gains Act 1992 Section 125 (transfer of assets at undervalue). 5.11 No income has arisen in a territory outside the United Kingdom in respect of which any claim under the Income and Corporation Taxes Act 1988 Section 584 (unremittable overseas income) has been made or is available to the Company. 5.12 The Company has not redeemed, repaid or repurchased or agreed to redeem, repay or repurchase any of its shares. 6 TRADING MATTERS 6.1 Since the Accounting Date the business of the Company has been continued in the ordinary and normal course, and there has been no deterioration in its turnover, or its financial or trading position. Page 39 of 47 40 6.2 The Company is not, nor has it agreed to become, a member of any joint venture, consortium, partnership or other unincorporated association. 6.3 The Company is not engaged in any litigation or arbitration proceedings, as pursuer or defender, and the Company has received no intimation or notification of any such proceedings pending or threatened, either by or against the Company and so far as the Directors as aware, there are no circumstances which are likely to give rise to any litigation or arbitration. 6.4 There is no dispute with any revenue, or other official department in the United Kingdom or elsewhere in relation to the affairs of the Company and, so far as the Directors as aware, there are no circumstances which are likely to give rise to any such dispute. 6.5 There are no claims pending or intimated or served, or so far as the Directors are aware, capable of arising, against the Company by an employee or workman or third party in respect of any accident or injury, which are not fully covered by insurance. 6.6 So far as the Directors are aware, the Company has conducted, and is conducting, its business in all respects in accordance with all applicable laws and regulations whether of the United Kingdom or elsewhere, holds all necessary licences or consents necessary for the carrying on of its business (short particulars of which are contained in the Disclosure Letter) and the Directors have no reason to believe that such licences or consents may be revoked or not renewed. 6.7 No power of attorney given by the Company is in force. 6.8 There are no outstanding authorities (express or implied) by which any third party may enter into any contract or commitment to do anything on behalf of the Company other than the ostensible or implied authority of directors or employees to enter into contracts in the normal course of their duties. 6.9 So far as the Directors are aware, the Company has not manufactured or sold or supplied products which are, or were, or have become, in any respect faulty or defective, or which do not comply in any material respect with any warranties or representations, expressly or impliedly made by it, or with all applicable regulations, standards and requirements in respect thereof. Page 40 of 47 41 6.10 The Company is not subject to any liability or obligation (save as may be implied by law) to service, repair, maintain, take back, or otherwise do or not do anything in respect of any goods that have been, or are hereafter pursuant to an existing obligation, delivered by it. 6.11 The Company is not a party to, nor have its profits or financial position during the three years prior to the last date of execution hereof by the Directors been affected by, any contract or arrangement which is not of an entirely arm's length nature. 6.12 So far as the Directors are aware, the Company has not committed, or omitted to do, any act or thing which could give rise to any fine or penalty in terms of, nor is the Company a party to any agreement, practice or arrangement which contravenes, any legislation, whether of the United Kingdom or elsewhere, relating to unfair or restrictive trade practices. 6.13 The Company is not a party to any contracts or agreements which are under notice of termination and, so far as the Directors are aware, there are no circumstances which may justify the serving of a notice of termination. 6.14 Details of all agency, distributorship, marketing, purchasing, manufacturing or licencing agreements or arrangements, or any restrictive trading or other agreement or arrangments which the Company is a party are disclosed in the Disclosure Letter and all such agreements are in full force and effect. 6.15 No diligence has been executed against the Company which remains undischarged, nor so far as the Directors are aware, is there any unfulfilled or unsatisfied decree or other court order outstanding against the Company. 6.16 No order has been made or petition presented or resolution passed for the winding-up of the Company, no order has been made, or so far as the Directors are aware, applied for, for the appointment of an administrator to the Company and no receiver or administrative receiver has been appointed to the Company and, so far as the Directors are aware, no person has taken any steps to enforce any charge or security interest against the Company. Page 41 of 47 42 6.17 The Company is not a party to any contract, transaction, arrangement or liability, which: (a) is outside the ordinary and proper course of business; or (b) is incapable of termination in accordance with its terms, by the Company, on thirty days notice or less without payment of compensation by the Company. 6.18 So far as the Directors are aware, the Company is not engaged in any disputes, discussions or negotiations with any customers or suppliers of the Company which are likely to result in such customers or suppliers ceasing to be customers or suppliers of the Company or materially altering their terms and conditions or contracts or usual dealings with the Company and, so far as the Directors are aware, there are no circumstances which are likely to give rise to any such disputes, negotiations or discussions. 7 PROPERTY MATTERS 7.1 The Missives are in full force and effect and no notice of termination has been issued or served and, so far as the Directors are aware, there are no circumstances which may give rise to a notice of termination being issued. 7.2 The Company has in its possession, or under its control, all deeds and documents (duly stamped if so required) which are necessary to prove title to the Leasehold Property. 7.3 The Company has no interest in any other land or premises other than the Leasehold Property. 7.4 There is no option, or agreement for sale, mortgage, whether fixed or floating, charge, lien, lease agreement or lease, condition, restrictive covenant, or other encumbrance in respect of the Leasehold Property. 7.5 The Company has timeously performed all of its obligations under the Missives, including, without limitation, the obligation to pay rent and the maintenance obligations. 7.6 The Company has duly and punctually performed and observed all obligations and conditions, agreements, statutory requirements, planning consents, by-laws, orders and regulations affecting the Leasehold Property and no notice of any breach of any such matter has been received. 7.7 No repairs notices have been issued in respect of the Leasehold Property by the landlord or any local authority and, so far as the Directors are aware, none are expected. Page 42 of 47 43 7.8 The use of the Leasehold Property is the permitted use for the purposes of the Lease and the Town and Country Planning (Scotland) Acts. 7.9 There are no compulsory purchase notices, orders or resolutions affecting the Leasehold Property. 8 EMPLOYMENT MATTERS 8.1 Full particulars of each employee and officer of the Company, (including, without limitation, profit sharing, commission or discretionary bonus arrangements and period of notice) are fully and accurately set out in the Disclosure Letter. 8.2 No negotiations for any increase in the remuneration or benefits of any officer or employee of the Company are current or imminent. 8.3 Since the Accounting Date no officer of the Company, or employee, has given notice of his intention to resign, or is under notice of dismissal. 8.4 The Company has not incurred any liability or received any claim in respect of any breach of any contract of service, for redundancy payment or for compensation for wrongful dismissal or unfair dismissal in respect of which any claim is outstanding and the Company has not received any claim in respect of such matters and the Directors are not aware of any circumstances which may give rise to such a claim. 8.5 The Company is not bound or accustomed to pay monies other than in respect of remuneration, or emoluments of employment, to or for the benefit of any officer or employee of the Company or any Associate of any such person. 8.6 Save as set out in the Disclosure Letter, the Company is not a party to and does not participate in or contribute to any scheme or arrangement for the provision of any pension, retirement, death, incapacity, sickness, disability, accident or health care benefits or any gratuities or ex-gratia arrangements or promises, allowances or other similar benefits to or for the benefit of any of its present or former employees, officers or any Associate of any such person. 8.7 There are no agreements or any other arrangements between the Company and any Trade Union or other body representing employees. Page 43 of 47 44 9 ASSET MATTERS 9.1 The Company owned, at the Accounting Date, and has good and marketable title to, and (except for stock subsequently sold or realised in the ordinary course of business) still owns and has valid title to, all the assets included in the Accounts and to all assets acquired since the Accounting Date and not subsequently sold or realised as aforesaid. 9.2 The Company has not created or granted, or agreed to create or grant, any security or any other encumbrance in respect of any of the assets included in the Accounts or acquired, or agreed to be acquired, since the Accounting Date. 9.3 The Company has adequate reserves of stocks of raw materials, packaging materials and finished goods in relation to its current and expected trading requirement. 9.4 The stock in trade of the Company is in good condition and is capable of being sold by it in the ordinary course of business in accordance with its normal prices. 9.5 The plant, machinery, equipment, vehicles and other equipment used in connection with Business: (a) are (subject to normal wear and tear) in good and safe state of repair and condition and satisfactory working order and, so far as the Directors are aware, have been regularly and properly maintained in accordance with the manufacturer's guidelines; (b) are the absolute property of the Company, save for those items subject of hire purchase, leasing or rental agreements listed in the Disclosure Letter; (c) are all capable of doing the work for which they were designed or purchased. 9.6 All stock in trade, and the assets and undertakings of the Company of an insurable nature are, and have at all time been, insured in amounts representing their full replacement or reinstatement value against fire and other risks normally insured against by persons carrying on the same business as that carried on by the Company. Page 44 of 47 45 9.7 The Company is now, and has at all times been, adequately covered against accidence, damage, insurance, third party loss (including product liability) loss of profits and other risks normally insured by persons carrying on the same business as that carried on by the Company. 9.8 All insurances are currently in full force and effect, and so far as the Directors are aware, nothing has been done or omitted to be done which could make any policy of insurance void or voidable, or which will result in an increase in premium. 9.9 No claim is outstanding under any of the insurance policies and so far as the Directors are aware, no circumstances exist which will give rise to such a claim. 10 ENVIRONMENTAL MATTERS 10.1 So far as the Directors are aware, the Directors, in relation to the Leasehold Property and/or the Business and the Company have complied, at all times and in all respects with all statutes and subordinate legislation, all European Community regulations and directives all common law and other national and local laws so far as applicable to the Business, all regulations, order, guidance notes, codes of conduct or practice, by-laws or directions of any court of competent authority insofar as any of the foregoing relate to health and safety, waste and the pollution or protection of the Environment. 10.2 All licences, permits, consents, authorisations, registrations, specifications, approvals, certificates or qualifications required at the Leasehold Property or for the carrying on of the Business have been obtained by the Company and are in full force and effect. 10.3 There have been no environmental audits and/or assessments commissioned by the Directors and/or the Company for or in relation to the Business of the Company and/or the Leasehold Property. 10.4 So far as the Directors are aware neither the Leasehold Property nor any neighbouring property is likely to become listed or referred to in a register of contaminated land. 11 INTELLECTUAL PROPERTY MATTERS 11.1 All rights in respect of the Intellectual Property used or required by the Company in connection with its Business and which are required to carry on the Business are in full force and effect and are vested in, and beneficially owned by the Company, and no rights or licences have been granted by the Company in respect of Intellectual Property. Page 45 of 47 46 11.2 The Company is the sole beneficial owner of the Intellectual Property and in the case of the Patents and Trade Marks the Company has been and is registered as the sole proprietor; and said rights in respect of such an Intellectual Property are valid, subsisting and enforceable and none of them is being used, claimed, opposed or attacked by any other person. 11.3 The details contained in Part IV of the Schedule in respect of the patents and trade marks owned by the Company are true and accurate in all respects. 11.4 No right or licence has been granted to any person by the Company to use or embody, in any manner, or do anything which would or might otherwise infringe any of the Intellectual Property; and no act has been done or omission permitted, by the Company whereby the Intellectual Property rights or any of them have ceased or might cease to be valid or enforceable. 11.5 So far as the Directors are aware, the business of the Company (and of any licencee under a licence granted by the Company) as now carried on, does not, and is not likely to, infringe any Intellectual Property of any other person (or would not do so if the same were valid) or give rise to a liability to pay compensation pursuant to the Patents Acts 1977, Sections 40 and 41 and all licences held by the Company in respect of any such protection are in full force and effect and no claim has been made against the Company in respect of any infringement whatsoever. 11.6 The Company has not (save in the ordinary and normal course of business) disclosed or permitted to be disclosed or undertaken or arranged to disclose to any person other than the Purchaser any of its know-how, trade secrets, confidential information, price lists or lists of customers or suppliers. 11.7 The Company is not a party to any secrecy agreement or agreement which restricts the use or disclosure of information. 11.8 So far as the Directors are aware nothing has been done or omitted by the Company which would enable any agreement or licence granted in respect of the Intellectual Property to or by the Company to be terminated, or which may constitute a breach of the terms of any such agreement or licence where such termination or breach would have an adverse effect on the Business of the Company. So far as the Directors are aware, all such agreements or licences granted by the Company are in full force and effect, do not contravene any statutes, regulations or directives, and the Company has complied with all its obligations under such agreements and licences. Page 46 of 47 47 12 EFFECT OF TRANSACTION 12.1 So far as the Directors are aware and save as provided in the Agreement, after Completion (whether by reason of an existing agreement or arrangement or otherwise) or as a result of the proposed acquisition of the Sale Shares by the Purchaser: (a) no supplier of the Company will cease, or be entitled to cease, suppling the Company or may substantially reduce its supplies to the Company solely as a result of the sale of the Sale Shares to the Purchaser; and (b) no customer of the Company shall cease, or be entitled to cease solely as a result of the sale of the Sale Shares to the Purchaser, to deal with the Company or may substantially reduce its existing level of business with the Company. 12.2 Compliance with the terms of this Agreement does not and will not, so far as the Directors are aware, relieve any person from any obligation to the Company, (whether contractual or otherwise) or enable any person to determine any such obligation, or any right or benefit enjoyed by the Company, or to exercise any right, whether under an agreement with, or otherwise in respect of, the Company. Page 47 of 47 EX-10.2 3 FORM OF SECURED LOAN NOTES 1 EXHIBIT 10.02 SECURED LOAN NOTE between (1) HYCOR BIOMEDICAL INC., a Corporation organised under the Laws of the State of Delaware, U.S., and having its principal place of business at 18800 Von Karmen Avenue, California 92612-1517, U.S. ("THE COMPANY"); and (2) [ ] ("THE NOTEHOLDER") WHEREAS: The Company and the Noteholder are parties to the Share Purchase Agreement (as defined herein) pursuant to which the Company has undertaken to issue Secured Loan Notes as herein set forth. NOW THEREFORE IT IS HEREBY AGREED as follows: 1. INTERPRETATION 1.1 In this Loan Note, the following expressions shall, unless otherwise specified or the context otherwise requires, having the meanings set opposite them respectively: "business day" a day, other than a Saturday or Sunday, on which clearing banks are open for business in both Edinburgh and London; "Principal Sum" the sum of [ ] due by the Company to the Noteholder and any balance or part(s) thereof from time to time outstanding; "Share Purchase Agreement" the Share Purchase Agreements entered into between the Company, the Noteholder and other shareholders of Cogent Diagnostics Limited (Company No: SC122739) pursuant to which the Company purchased and the Noteholder and other shareholders sold shares in the capital of Cogent Diagnostics Limited; "Shares Pledge" the Share Pledge to be executed of even date herewith and be granted by the Company in favour of the Noteholder in security of the Company's obligation under this Loan Note. Page 1 of 6 2 1.2 In this Loan Note, unless otherwise specified, or the context otherwise requires: (a) where as importing any gender shall include the other genders; words importing natural persons shall include corporations and vice versa; and words importing the singular only shall include the plural and vice versa; (b) reference to any statute, regulation, directive, treaty or part thereof shall be construed as reference thereto as amended or re-enacted or as the application thereof is modified by other provisions from time to time (whether before or after the date of this Loan Note), shall be construed as including references to any provision of which they are re-enactments (whether with or without modification) and shall be construed as including references to any order, instrument, regulation or other subordinated legislation made pursuant thereto. 2. AMOUNT OF THE LOAN NOTE The nominal aggregate amount of this Loan Note is limited to [ ] which the Company undertakes to repay to the Noteholder on the terms and conditions herein set forth. 3. INTEREST Interest at [ ]% per annum shall be due on the nominal amount of the balance of the Principal Sum from time to time outstanding, shall accrue from day-to-day and be computed on the basis of a 365 day year. Accrued interest shall be payable quarterly in arrears on 21 October, 21 January, 21 April and 21 July of each year until repayment of the Principal Sum in full. 4. REPAYMENT OF THE PRINCIPAL SUM 4.1 The Principal Sum shall be repaid by the Company to the Noteholder, without any requirement of notice or demand by the Noteholder as follows: REPAYMENT DATE: REPAYMENT AMOUNT: 21 July 1998 [ ] 21 July 1999 [ ] 21 July 2000 [ ] 4.2 Accrued interest shall also be paid by the Company to the Noteholder on each of the Repayments Dates specified in Clause 4.1. Page 2 of 6 3 5. ACCELERATED PAYMENT The Company shall be entitled to repay the Principal Sum at any time after 21 January, 1998, in whole or in part, together with interest accrued thereon to the date of repayment, without penalty. 6. SET-OFF If, at any time, any sums become due by the Noteholder to the Company and/or Cogent Diagnostics Limited under the Share Purchase Agreement (including, without limitation, any sums due in respect of a claim under the Warranties (as defined in the Share Purchase Agreement) or a claim under the Taxation Undertaking (as defined in the Share Purchase Agreement)) then such sums may, whether or not the said [ ] is the then Noteholder, be set-off and deducted from any amount, principal or interest due by the Company to the Noteholder under this Loan Note and to the extent that the Principal Sum is thereby reduced, it shall be deemed to have been repaid and redeemed by the Company. 7. REGISTER OF LOAN NOTES 7.1 The Company shall keep a register showing the nominal amount of the Loan Note held by the Noteholder, together with the Noteholder's name and address and all subsequent transfers and changes of ownership to which the Noteholder shall be entitled to have access upon giving reasonable notice thereof to the Company. 7.2 Save in the case of fraud or manifest error the register shall be the definitive record of this Loan Note in the event of any dispute between the Company and the Noteholder. 8. EVENTS OF DEFAULT The Principal Sum, and accrued interest, shall, provided that the Noteholder has served notice of default on the Company specifying the breach referred to and such breach if remediable, has not been remedied within a period of 30 days of receipt of the notice (or such longer period as may be stated in the notice), become payable on the occurrence of any of the following events of default: (a) if the Company shall fail to make payment, within 30 business days of the due date, of any principal or interest on this Loan Note; or (b) if, pursuant to or within the meaning of the United States Bankruptcy Code or any other federal or state law relating to insolvency or relief of debtors (a "Bankruptcy Law"), the Company shall (i) commence a voluntary case or proceedings; (ii) consent to the entry of an order for relief against it in an involuntary case; (iii) consent to the appointment of a trustee, receiver, assignee, liquidator or similar official; (iv) make an assignment for the benefit of its creditors; or (v) admit in writing its inability to pay its debts as they become due; or Page 3 of 6 4 (c) if a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that (i) is for relief against the Company in an involuntary case; (ii) appoints a trustee, receiver, assignee, liquidator or similar official for the Company or substantially all of the Company's assets; or (iii) orders the liquidation of the Company, and in each case the order or decree is not dismissed within 120 days; or (d) if the Company shall commit a material breach of its obligations under the Shares Pledge. 9. TRANSFERS 9.1 The Noteholder may transfer the whole (but not part thereof) of this Loan Note. 9.2 Any transfer shall be made in writing or in the usual common form and shall be signed by the transferor and transferee. The transferor shall be deemed to remain the owner of this Loan Note until the name of the transferee is entered in the Register in respect thereof. 9.3 Every instrument of transfer must be delivered to the Chief Financial Officer or Secretary of the Company, accompanied by this Loan Note and such other evidence (if any) as the Company may require to provide the title of the transferor or his right to transfer the Loan Note and upon receipt of such instrument of transfer and evidence of title as aforesaid the transfer shall be registered.. 10. REGISTRATION OF SUCCESSORS IN TITLE Any person becoming entitled to this Loan Note in consequence of the death or bankruptcy of any Noteholder or, in the case of a company, in consequence of a winding-up of any Noteholder, may upon producing such evidence of his title as the Company shall acting reasonably think sufficient, he registered himself as the holder of such of the Loan Note or, subject to Clause 9 may transfer the Loan Note. 11. GOVERNING LAW 11.1 This Loan Note shall be governed by in accordance with the law of Scotland. 11.2 The parties hereto submit to the non-exclusive jurisdiction of the Court of Session as regards any claim, dispute or matter arising out of or in relation to this Loan Note and its implementation or effect. Page 4 of 6 5 12. NOTICES 12.1 Any notice or other communication to be given by one party to the other under, or in connection with this Loan Note, shall be communicated as follows:- (a) If to the Company, to:- Hycor Biomedical Inc 18800 Von Karman Avenue Irvine California 92612-1517 U.S. Facsimile Number: 001-714-440-2220 Attention: Mr R Jones (b) If to the Noteholder, to:- [ ]; or (c) in either case, to such other address and/or facsimile number and/or marked for such other attention as may from time to time be specified by the relevant party. 12.2 Any notice or other communication to be given by one party to the other under, or in connection, with this Loan Note shall be in writing and shall be given by letter delivered by hand or sent by first class pre-paid recorded delivery or registered post or by facsimile, and shall be deemed to have been received:- (a) in the case of delivery by hand prior to 5.00pm on a business day, when delivered and on any other case on the business day following the day of delivery; or (b) in the case of first class pre-paid recorded delivery or registered post, on the second business day following the day of posting; or (c) in the case of facsimile when the transmission occurs prior to 5.00pm on a business day, on acknowledgement on the addressee's facsimile receiving equipment and on any other case on the business day following the day of acknowledgement by the addressee's facsimile receiving equipment. Page 5 of 6 6 IN WITNESS WHEREOF, these present consisting of this and the five preceding pages are executed in duplicate as follows:- SUBSCRIBED for an on behalf of HYCOR BIOMEDICAL INC at on the day of July 1997 by , Director ............................... in the presence of Director Witness ..................................... Full Name ................................... Address ..................................... ............................................. SUBSCRIBED by [ ] ................................ at on the day of July 1997 in the presence of: Witness ..................................... Full Name ................................... Address ..................................... ............................................. Page 6 of 6 EX-10.3 4 FORM OF SHARES PLEDGE 1 EXHIBIT 10.03 SHARES PLEDGE between HYCOR BIOMEDICAL INC., a corporation under the laws of the State of Delaware, U.S. and having its principal place of business at 18800 Von Karmen Avenue, Irvine, California 92612-1517, United States ("HYCOR") and [ ] ("THE PLEDGEE") WHEREAS:- (A) Hycor and the Pledgee are parties to a Loan Note dated of even date herewith and Hycor has agreed, in security of its obligations to make payment under the Loan Note, to grant this Shares Pledge. (B) The Board of Directors of Hycor is satisfied that entering into this Shares Pledge is to the benefit of Hycor and for the purpose of its business. 1. DEFINITIONS AND INTERPRETATION 1.1 In this Shares Pledge the following expressions shall, unless the context otherwise requires, have the meaning set opposite them respectively:- "Cogent" Cogent Diagnostics Limited, a company incorporated under the Companies Acts with registered number SC122739 "Default" is deemed to occur (a) should the Secured Liabilities Liabilities not be repaid (subject to any applicable grace period) pursuant to the Loan Note or (b) in the event of material default in Hycor's obligations hereunder or under the Loan Note which default, if remediable, has not been so remedied within a period of 30 days (or such longer period as may be stated in the notice) of service of notice of default by the Pledgee specifying (in reasonable detail) the default and the action required to remedy same "Loan Note" the loan note for the principal sum of [ ] between Hycor and the Pledgee dated of even date with this Shares Pledge Page 1 of 5 2 "Secured Liabilities" all sums of capital and relative interest, or the outstanding balance from time to time or relative interest thereon, which may be due or become due by Hycor to the Pledgee in terms of the Loan Note "Pledged Securities" [ ] Ordinary Shares of 25p each in the capital of Cogent which are to be held subject to the terms and conditions of this Shares Pledge (and all other shares, benefits or rights accruing pursuant to Clause 4.1(c)) 1.2 In this Shares Pledge, where the context so admits any reference to a person shall include a body corporate, reference to the singular shall include the plural and vice versa, the use of the masculine provision shall include the feminine and reference to a Clause shall mean a reference to a Clause of this Shares Pledge. 2. TRANSFER IN SECURITY 2.1 Hycor, as security for the Secured Liabilities:- (a) hereby assigns to the Pledgee its whole right, title, interest and benefit in and to the Pledged Securities; and (b) undertakes to deliver to the Pledgee forthwith a duly executed share transfer form in respect of the Pledged Securities made out in favour of the Pledgee together with the relevant Share Certificate and to procure the registration of the Pledgee in the Register of Members of Cogent in respect of the Pledged Securities. 2.2 The Pledgee hereby acknowledges that, notwithstanding any transfer or delivery to it ex facie absolutely of the Pledged Securities and any registration of the Pledged Securities in the name of the Pledgee or any person holding to the order of the Pledgee, the Pledged Securities are and shall truly be held by it as security for the payment of the Secured Liabilities on the terms and conditions of this Shares Pledge. 3. WARRANTIES Hycor hereby warrants (a) the Pledged Securities are not charged to any other person, and (b) Hycor has not sold, transferred or assigned, or agreed to sell, transfer, or assign, any interest in the Pledged Securities to anyone other than the Pledgee. Page 2 of 5 3 4. DEFAULT 4.1 So long as no Default shall have occurred:- (a) Hycor shall be entitled to exercise any and all voting rights and other powers pertaining to the Pledged Securities or any part thereof (and, if required, so direct the registered holder of the Pledged Securities) for any purpose not inconsistent with the terms of this Shares Pledge; (b) Subject to Clause 7 hereof Hycor shall be entitled to receive and retain any and all dividends and interest paid in respect of the Pledged Securities (and the Pledgee agrees to execute such documents as it may from time to time consider to be appropriate to give effect thereto); and (c) the Pledgee shall be entitled to receive and retain in security any and all allotments, rights and benefits whatsoever at any time issued by Cogent and accruing or arising in respect of Pledged Securities and all stocks, shares, rights, money or property accruing thereto or offered at any time by way of conversion, bonus, option or otherwise in respect thereof, but so that the Pledgee shall not in any circumstances incur any liability whatsoever in respect of any calls, instalments or otherwise in connection therewith. 4.2 After the occurrence of a Default, and in satisfaction of the Secured Liabilities: (a) all rights of Hycor to exercise the voting rights and other powers which they would otherwise be entitled to exercise pursuant to Clause 4.1 (a) and to receive the dividends and interest payments which they would otherwise be authorised to receive and retain pursuant to Clause 4.1 (b) shall cease, and, if and so long as the Pledgee is, or is entitled to be, registered as the holder of the Pledged Securities in the register of members of the Company all such rights shall become vested in the Pledgee which shall have the sole right to exercise such voting rights and to receive such dividends and interest payments; (b) all dividends and interest payments which are received by Hycor contrary to the provisions of Clause 4.2 (a) shall, if, and for so long as the Pledgee is or is entitled to be, registered as the holder of the Pledged Securities in the register of members of Cogent, be received in trust for the benefit of the Pledgee, shall be segregated from other funds of Hycor and shall be forthwith paid over to the Pledgee; Page 3 of 5 4 (c) Hycor shall on demand execute and do all such transfers, assurances and things which the Pledgee may from time to time reasonably require for perfecting its title to any Pledged Securities; and (d) the Pledgee may sell or convert into money all or any part of the Pledged Securities for such consideration as the Pledgee may think fit and Hycor hereby waives any pre-emption rights it may have in respect of any transfer thereof whether under the Articles of Cogent or otherwise. 5. RECONVEYANCE Upon Hycor irrevocably ceasing to be under any liability to the Pledgee in respect of the Secured Liabilities, or in the event of the Pledgee agreeing to release the Pledged Securities for any other reason, the Pledgee shall transfer to Hycor and Hycor shall accept the transfer of, all Pledged Securities then held by the Pledgee and the Pledgee shall co-operate (and sign all such transfers, assurances and things reasonably required) in procuring the registration of such Pledged Securities in the name of Hycor or as Hycor shall direct. 6. FURTHER ASSURANCE Hycor shall on demand execute and do all such transfers, assurances and things which the Pledgee may reasonably require with a view to, or in connection with, ensuring the validity, binding effect and enforceability of the security hereby constituted or intended to be constituted. 7. RESTRICTIONS Hycor agrees that, save with the prior written consent of the Pledgee, it will procure that, during the period in which the Secured Liabilities are outstanding: (a) there will be no increase, reduction, consolidation sub-division or variation in the authorised or issued share capital of Cogent; (b) there will be no variation or abrogation of the rights attached to any class or shares in the capital of Cogent; (c) no other options, warrants or rights to subscribe for or be allotted shares in Cogent, shall be granted by Hycor or Cogent; (d) no amendment will be made to the Memorandum or Articles of Association of Cogent; Page 4 of 5 5 (e) there will be no disposal of or fixed charge granted over the whole, or any substantial part, of the business, undertaking or assets (particularly any patent, trademark or the standard operating procedures or quality manual) of Cogent, whether by a single transaction or a series of transactions (except in the ordinary course of business); (f) no resolution shall be passed or petition granted by Hycor or Cogent for the winding-up of Cogent or the appointment of any receiver or any application made by Hycor or Cogent for administration or any similar order in respect of Cogent; (g) there will be no declaration or payment of any dividend or other distribution by Cogent; and (h) Cogent will continue to trade in the normal course. 8. INDEMNITY Hycor will indemnify the Pledgee in respect of all liabilities and expenses incurred by it in good faith in the execution of any rights, powers or discretions vested in it pursuant hereto as a result of being the registered holder of the Pledged Securities or as bearer thereof. 9. GOVERNING LAW This Agreement shall be governed by and construed in accordance with the law of Scotland and Hycor herby irrevocably prorogates and submits to the jurisdiction of the Court of Session in Scotland. IN WITNESS WHEREOF these presents consisting of this, the preceding five pages are executed as follows:- SUBSCRIBED for and on behalf of HYCOR BIOMEDICAL INC at on the day of July 1997 ................................ by Director Director in the presence of:- Witness ................................ Full Name .............................. Address ................................ ........................................ Page 5 of 5 -----END PRIVACY-ENHANCED MESSAGE-----