MASTER
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DATED February 24,2000
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P XXXXXXX AND OTHERS (1)
AND
GREAT PLAINS SOFTWARE, INC. (2)
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AGREEMENT
for the sale and purchase of the entire issued
share capital of PWA GROUP LIMITED
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[LOGO]
XXXXXX & WHITNEY
Xxxxxxx Xxxxx
000 Xxxxxxxx Xxxxxxxx
Xxxxxx
XX0X 0XX
Tel: + 00 000 000 0000
Fax: + 00 000 000 0000
THIS AGREEMENT is dated February 24, 2000 and is made BETWEEN:
(1) the persons whose names and addresses are stated in Schedule 1
(together the "VENDORS"); and
(2) GREAT PLAINS SOFTWARE, INC. whose principal place of business is
situated at 0000 00xx Xxxxxx Xxxxxxxxx, Xxxxx, Xxxxx Xxxxxx 00000 ("THE
PURCHASER").
WHEREAS
(A) The Company (as defined below) is a private company limited by shares.
(B) The Vendors have agreed to sell and the Purchaser has agreed to
purchase the Company Shares (as defined below) upon the terms and
subject to the conditions of this Agreement.
NOW IT IS HEREBY AGREED as follows:
1 DEFINITIONS AND INTERPRETATION
1.1 In this Agreement unless the context otherwise requires:
"ACCOUNTS" means the Company's draft audited annual accounts (as defined in
section 262 CA 1985) , for the financial year ended on the Accounts Date,
including the notes to those accounts and the associated directors' and
auditors' reports and any profit and loss account omitted in reliance on section
230(3) CA 1985;
"ACCOUNTS DATE" means 30th September 1999;
"THE AUDITORS" means the auditors of the Company namely Xxxxxx Xxxxxxxx;
"BUSINESSDAY" means a day (excluding Saturdays and Sundays) on which clearing
banks are ordinarily open for the transaction of normal banking
business in the City of London;
"CASH CONSIDERATION" means L3,524,832;
"CA 1985" means the Companies Xxx 0000;
"CLAIM" means any claim under the Warranties;
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"THE COMPANY" means PWA Group Limited (Co. No. 3679633) whose registered office
is at Xxxxxxxxx Xxxxx, Xxxxxx Xxxx, Xxxxxx, Xxxxxxxxxxxxxxx XX0 0XX;
"COMPLETION" means completion of the sale and purchase of the Company Shares by
the performance by the parties of their respective obligations under
clause 2 and 5;
"COMPLETION ACCOUNTS" means the accounts prepared in accordance with clause 8;
"COMPLETION DATE" means the date of the Agreement;
"CONFIDENTIAL INFORMATION" means all proprietary financial, business and
technical information relating to the business of the Company together
with all trade secrets and information equivalent to them (including
but not limited to formulae, processes, methods, knowledge and
Know-how) in connection with the products and services manufactured,
produced, distributed and/or sold by the Group;
"CONSIDERATION SHARES" means 302,986 shares of the Purchaser's Common Stock;
"DISCLOSURE LETTER" means the letter of the same date as this Agreement in the
Agreed Form from the Warrantors to the Purchaser disclosing certain
matters in relation to the Warranties which has been delivered to the
Purchaser prior to the execution of this Agreement together with the
Disclosure Folder (as therein defined);
"ENVIRONMENT" means any land, natural or man-made structures, water and air
(including without limitation air within buildings and other natural or
man-made structures above or below ground);
"ENVIRONMENTAL LAWS" means all or any applicable law, common law, statute,
statutory instrument, regulation or directive (including laws made
thereunder) with regard to the pollution or protection of the
Environment or harm to or the protection of human health or the health
of animals or plants or otherwise relating to the manufacture,
processing, use, treatment, storage, distribution, disposal, transport,
or handling of such substances or wastes;
"GROUP" means together the Company and the Subsidiaries;
2
"GROUP COMPANY" means each and any body corporate in the Group;
"HOLDING COMPANY" shall bear the meaning given to that expression in section 736
CA 1985;
"ICTA 1988" means the Income and Corporation Taxes Xxx 0000;
"INTELLECTUAL PROPERTY" means all the Intellectual Property Rights used by the
any Group Company prior to the date of this Agreement;
"INTELLECTUAL PROPERTY RIGHTS" means patents, registered designs, trade marks
and service marks (whether registered or not), copyright, design
rights, and all similar property rights, including those subsisting (in
any part of the world) in inventions, designs, drawings, computer
programs, semiconductor topographies, plant varieties, business or
brand names, goodwill or the style of presentation of goods or services
and in applications for protection thereof;
"KNOW-HOW" means all industrial and commercial information and techniques,
accounts, records and information (wherever situate) pertaining to the
activities of the Group;
"LONDON STOCK EXCHANGE" means London Stock Exchange Limited;
"MANAGEMENT ACCOUNTS" means the management accounts as of 31st January 2000 a
copy of which is attached to the Disclosure Letter;
"ORDINARY SHARES" means the issued ordinary shares of L0.10 each in the capital
of the Company as referred to in column (3) of Schedule 1;
"PROHIBITED AREA" means the United Kingdom and the Republic of Ireland;
"PROPERTIES" means the and the leasehold properties details of which are
respectively set out in Schedule 4;
"PURCHASER'S SOLICITORS" means Xxxxxx & Whitney, Veritas House, 000 Xxxxxxxx
Xxxxxxxx, Xxxxxx XX0X 0XX
3
"RELATED COMPANY" in relation to any company means any subsidiary or holding
company of that company or any subsidiary of any such holding company;
"RELIEF" means any loss, relief, allowance, exemption, set-off, deduction,
credit, right to payment or other relief available in relation to Tax
or to the computation of income profits or gains for the purposes of
Tax;
"RESTRICTED PRODUCTS" means:
(a) all products which are or have been manufactured, produced,
distributed or sold by any Group Company at any time during
the twelve month period immediately preceding the Completion
Date); and
(b) any other products which are of a type similar to and
competing with any of the products referred to in (a) above;
"RETENTION ACCOUNT" means an interest bearing deposit account to be opened in
the joint names of the Purchaser's Solicitors and the Vendors'
Solicitors at BarclaysBank Plc as provided in clause 5.3.1 and Schedule
9;
"RETENTION ACCOUNT INSTRUCTION LETTER" means the letter in the agreed form from
the Warrantors and the Purchaser to the Purchaser's Solicitors and the
Vendors' Solicitors regarding conduct of the Retention Account;
"RETENTION SUM" means the sum of L1,250,000;
"COMPANY SHARES" means the Ordinary Shares;
"SECURITY INTEREST" means a mortgage, lien, pledge, charge, hypothecation,
debenture, assignment or other security interest (or an agreement or
commitment to create any of them);
"SUBSIDIARIES" means the companies specified in Schedule 3;
"SUBSIDIARY" means a subsidiary (as defined by sections 736 and 736A CA 1985) or
a subsidiary undertaking (as defined by section 258 CA 1985);
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"TAX" has the meaning set out in the Tax Deed;
"TAX AUTHORITY" has the meaning set out in the Tax Deed;
"TAX DEED" means the tax deed of indemnity in the form attached hereto as
Attachment `A';
"TAX LEGISLATION" means any statute, enactment, law or regulation providing
for the imposition of Tax;
"TAX WARRANTIES" means the Warranties as to the matters stated in Part B of
Schedule [__];
"TCGA 1992" means the Taxation of Chargeable Gains Xxx 0000;
"VATA 1994" means the Value Added Tax Xxx 0000;
"VENDORS' SOLICITORS" means Shoosmiths, Xxxxxxx Xxxx, Xxxxx Xxxxxx, Xxxxxxx XX0
0XX;
"VENDORS' SOLICITORS BANK ACCOUNT" means its client account at Barclays Bank
Plc, 000 Xxxxxxxxxxxxxx Xxxx, Xxxxxxxxxxxx, A/C Number 20804266, Sort
Code 20-16-52;
"WARRANTIES" means the warranties contained in clause 7.1 and Schedule 8;
"WARRANTORS" means Mr Xxxx Xxxxxxx and Xx Xxxxxxxx Xxxxx;
1.2 a document expressed to be "IN THE AGREED FORM" means a document in a
form which has been agreed by the parties contemporaneously with or
before the execution of this Agreement and which has, for the purposes
of identification, been initialled by them or on their behalf;
1.3 references to a clause or Schedule are to a clause of, or a Schedule
to, this Agreement, references to this Agreement include its schedules
and references in a Schedule or part of a Schedule to a paragraph are
to a paragraph of that Schedule or that part of that Schedule;
5
1.4 references to this Agreement or any other document or to any specified
provision of this Agreement or any other document are to this
Agreement, that document or that provision as in force for the time
being and as amended from time to time in accordance with the terms of
this Agreement or that document or, as the case may be, with the
agreement of the relevant parties;
1.5 words importing the singular include the plural and vice versa, words
importing a gender include every gender and references to persons
include corporations, partnerships and other unincorporated
associations or bodies of persons;
1.6 he contents table and the descriptive headings to clauses, schedules
and paragraphs (and summaries in parentheses of the scope of any
statutory provisions in the Tax Warranties) are inserted for
convenience only, have no legal effect and shall be ignored in the
interpretation of this Agreement;
1.7 all agreements, obligations and liabilities (whether under warranties,
representations, indemnities or otherwise) on the part of any two or
more of the Vendors are joint and several and on the part of any two or
more of the Executive Directors are joint and several and shall be
construed accordingly;
1.8 the words and phrases "other", "including" and "in particular" shall
not limit the generality of any preceding words or be construed as
being limited to the same class as the preceding words where a wider
construction is possible;
1.9 a person is connected with another person if he is so connected within
the meaning of section 839 ICTA 1988;
1.10 Reference to an Event occurring on or before any date shall be deemed
to include:
(a) any combination of two or more Events only the first or some
of which shall have occurred before that date; and
(b) any Event which is treated or deemed to occur on or before
that date for the purposes of any Tax;
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1.11
(a) "ENACTMENT" means any statute or statutory provision (whether
of the United Kingdom or elsewhere), subordinate legislation
(as defined by section 21(1) Interpretation Act 1978) and any
other subordinate legislation made under any such statute or
statutory provision;
(b) a reference to any enactment shall be construed as including a
reference to:
(i) any enactment which that enactment has directly or
indirectly replaced (whether with or without
modification), and
(ii) that enactment as re-enacted, replaced or modified
from time to time, whether before, on or after the
date hereof;
provided that this clause 1.11 shall not increase the
liability of any party above that which exists immediately
following this Agreement coming into effect.
2. SALE OF THE COMPANY SHARES
2.1 The Vendors shall sell to the Purchaser and the Purchaser (relying, as
the Vendors hereby acknowledge, on the representations, warranties,
undertakings and indemnities of the Vendors (or any of them) referred
to or contained in this Agreement) shall purchase from the Vendors the
Company Shares.
2.2 The Vendors shall sell and transfer the Company Shares held by them
free from all claims, liens, charges, encumbrances and equities and
other rights exercisable by third parties and with full title
guarantee.
2.3 Title to, beneficial ownership of, and any risk attaching to, the
Company Shares shall pass on Completion and the Company Shares shall be
sold and purchased together with all rights and benefits attached or
accruing to them at Completion (including without limitation the right
to receive all dividends, distributions or any return of capital
declared, payable or made by the Company on or after Completion).Each
of the Vendors hereby waives any rights of pre-emption conferred on him
by the Articles of Association of the Company or otherwise over Company
Shares hereby agreed to be sold by the other Vendors.
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2.4 The Purchaser shall not be obliged to complete the purchase of any of
the Company Shares unless the purchase of all the Company Shares is
completed simultaneously.
3 CONSIDERATION
3.1 Subject to clauses 5.4, 7.9 and 8, the consideration for the Company
Shares shall be:
3.1.1 the payment on Completion by the Purchaser to the Vendors of
the Cash Consideration in the amounts set opposite their names
in Schedule 1, Part B and:
3.1.2 the issue by the Purchaser to the Vendors on Completion the
Consideration Shares in the amounts set opposite their names
in Schedule 1, Part B.
4 PURCHASER'S WARRANTIES
4.1 The Purchaser warrants to the Vendors as follows:-
4.1.1 The Consideration Shares, when issued in accordance with this
Agreement, shall be duly authorised, validly issued, fully paid and
nonassessable and shall be free and clear of all security interests,
liens, claims, pledges, options, rights of first refusal, charges and
other encumbrances of any nature whatsoever, except as may be created
by the Vendors. No person has any pre-emptive rights with respect to
the Consideration Shares.
4.1.2 The Consideration Shares have been registered pursuant to a
registration statement on Form S-4 (333-92857) including any prospectus
forming a part thereof, the "Registration Statement") filed with the
U.S. Securities and Exchange Commission (the "SEC"). The Registration
Statement is effective in accordance with the provisions of the
Securities Act of 1933, as amended (the "Securities Act") and shall
remain effective through Completion. No stop order suspending the
effectiveness of the Registration Statement has been issued by the SEC
and no proceedings for that purpose have been initiated or, to the
knowledge of the Purchaser, threatened by the SEC. All necessary state
securities or blue sky authorisations have been received. The
Consideration Shares are listed on the Nasdaq National Market.
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4.1.3 None of the information included or incorporated by reference in the
Registration Statement contains any untrue statement of a material fact
or omits to state any material fact required to be stated therein or
necessary in order to make the statements therein not misleading.
Purchaser has filed all required documents with the SEC since January
1, 1999 (the "SEC Documents"). The SEC Documents complied in all
material respects with the requirements of the Securities Act or, as
applicable, the Securities Exchange Act of 1934; as amended (the
"Exchange Act"), as of their respective dates, and none of the SEC
Documents contains any untrue statement of a material fact or omits to
state any material fact required to be stated therein or necessary in
order to make the statements therein not misleading.
4.1.4 Purchaser shall file all reports required under the Exchange Act for a
period of two years following Completion.
5 COMPLETION
5.1 Completion shall take place at the offices of the Company (or at such
other place as the parties may agree) on the Completion Date when all
(but not part only unless the parties shall so agree) of the following
business shall be transacted:
5.1.1 the Vendors shall deliver to the Purchaser or make available
for collection by the Purchaser or its authorised
representatives:
5.1.1.1 transfers in respect of the Company Shares duly
executed and completed in favour of the Purchaser or
as it may direct or have directed, together with the
certificates therefor and the duly executed powers of
attorney or other authorities under which any of the
transfers have been executed authorising the sale of
the Company Shares held by those Vendors and the
execution of the transfers in respect of them;
5.1.1.2 such other documents as may be required to give a
good title to the Company Shares and to enable the
Purchaser or its nominees to become the registered
holders thereof;
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5.1.1.3 (as agents for each Group Company) all its statutory
and minute books written up to date) and their Common
Seal, Certificate of Incorporation, any Certificate
or Certificates of Incorporation on Change of Name
and copies of its Memorandum and Articles of
Association;
5.1.1.4 duly executed transfers (in favour of such person or
persons as the Purchaser may direct or have directed)
of all shares or other interests in the Subsidiaries
not registered in the name of the Company or any
other Group Company together with the certificates
therefor; and
5.1.1.5 letter of non-crystallisation from Lloyds Bank plc.
5.2 the Vendors shall:
5.2.1 cause the transfers mentioned in clause 5.1.1.1 to be resolved
to be registered in the Register of Members of the Company's
statutory books notwithstanding any provision to the contrary
in the Articles of Association of the Company;
5.2.2 cause the persons named in part A of Schedule 6 to be validly
appointed as additional Directors of the Company and PWA
Personnel Systems; and
5.2.3 repay to each Group Company, or procure the repayment thereto
of, all indebtedness outstanding at Completion from the
Vendors or any of them;
5.2.4 procure that all the Group Companies shall repay all loans
made to [it/them] by the Vendors as disclosed in the
Disclosure Letter and outstanding at Completion.
5.3 the Purchaser shall:
5.3.1 pay US$[ ] of the Cash Consideration by electronic funds
transfer for value to the Vendors' Solicitors Bank Account and
payment into such account shall constitute a good discharge to
the Purchaser in respect of such sum and the Purchaser shall
have no obligation as to the distribution or allocation of the
Cash Consideration between the Vendors;
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5.3.2 pay to the Purchaser's Solicitors by electronic transfer
of funds the Retention Sum to be deposited in the Retention
Account whereupon the provision of Schedule 9 shall apply to
the sum so deposited.
5.4 the parties shall join in procuring that:
5.4.1 all existing bank mandates in force for all Group Companies
shall be altered (in such manner as the Purchaser shall at
Completion require) to reflect the resignations and
appointments referred to above;
5.4.2 the Purchaser's Solicitors and the Vendors' Solicitors are
instructed in the terms of the Retention Account Instruction
Letter;
5.4.3 service agreements (in the agreed form) shall be entered into
between the Company and the persons named in part E of
Schedule 6.
5.5 the parties shall enter into the Tax Deed.
5.6 Each of the Vendors (including 3i) agree with the other Vendors that
they shall respectively waive their rights, if any, against one another
under the terms of an Investment Agreement dated 12th February 1999 and
made between PWA Group Limited, Xxxx Xxxxxxx, Xxxxxxxx Xxxxx and 3i
Group plc, under the Articles of Association of the Company adopted as
of 12th February 1999 including, without limitation, any class rights
or rights of pre-emption.
6 POST-COMPLETION MATTERS
6.1 Each of the Vendors hereby declares that for so long as they remain the
registered holder of any of the Company Shares after Completion they
will:
6.1.1 hold the Company Shares and the dividends and other
distributions of profits or surplus or other assets declared,
paid or made in respect of them after Completion and all
rights arising out of or in connection with them in trust for
the Purchaser and its successors in title; and
6.1.2 deal with and dispose of the Company Shares and all such
dividends, distributions and rights as are described in clause
6.1 as the Purchaser or any such successor may direct.
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6.2 The Vendors shall execute or, so far as each is able, procure that any
necessary third party shall execute all such documents and/or do or, so
far as each is able, procure the doing of such acts and things as the
Purchaser shall after Completion reasonably require in order to give
effect to this Agreement and any documents entered into pursuant to it
and to give to the Purchaser the full benefit of all the provisions of
this Agreement.
7 WARRANTIES
7.1 In consideration of the Purchaser entering into this Agreement :
7.1.1 the Warrantors hereby jointly and severally warrant to the
Purchaser in the terms set out in Schedule 8; and
7.1.2 3i hereby warrants to the Purchaser in the terms of the
Limited Warrantors;
7.2 Any statement in Schedule 8 which is qualified as being made "so far as
the Warrantors are aware" or "to the best of the knowledge, information
and belief of the Warrantors" or any similar expression has been so
qualified after all due and proper enquiries by the Warrantors of each
of Xxxxx Xxxxxxx, Xxxxx Xxxx, Xxxxxx-Xxx Xxxxxxxx, Xxxx Xxxxxx,
Xxxxxxxx Xxxxxx, Xxxxx Xxxxxx, the Vendors' Solicitors and the auditors
of the Company and its Subsidiaries.
7.3.
7.3.1 The Warranties are qualified to the extent, but only to the
extent, of those matters fairly disclosed in the Disclosure
Letter and for this purpose "fairly disclosed" means disclosed
in such manner and in such detail as to enable a reasonable
purchaser to make proper, accurate and not misleading
assessment of the matter concerned.
7.3.2 All references in Schedule 8 to the Company shall unless the
context otherwise requires be construed as references to each
and every Group Company.
7.3.3 Each of the paragraphs in Schedule 8:
12
7.3.4 shall be construed as a separate and independent
representation and/or warranty; and
7.3.5 save as expressly otherwise provided in this Agreement, shall
not be limited by reference to any other paragraph in Schedule
8 or by any other provision of this Agreement;
and the Purchaser shall have a separate claim and right of
action in respect of every claim of each such representation
or warranty.
7.4 The rights and remedies conferred on the Purchaser under this Agreement
are cumulative and are additional to, and not exclusive of, any rights
or remedies provided by law or otherwise available at any time to the
Purchaser in respect of any claim (including but not limited to
injunctive relief, specific performance and the right to damages for
any loss or additional loss suffered by the Purchaser).
7.5 The Warranties shall not in any respect be extinguished or affected by
Completion.
7.6 Each of the Warrantors agrees with the Purchaser (for itself and as
trustee for each Group Company):
7.6.1 that the giving by any Group Company and/or any of its
directors, employees, agents or advisers to any of the
Warrantors or their agents or advisers of any information or
opinion in connection with the Warranties or the Tax Deed or
the Disclosure Letter or otherwise in relation to the business
or affairs of any Group Company or in connection with the
negotiation and preparation of this Agreement or the
Disclosure Letter shall not be deemed a representation,
warranty or guarantee to the Warrantors of the accuracy of
such information or opinion;
7.6.2 to waive any right or claim which they may have against any
Group Company and/or any of its directors, employees agents or
advisers for any error, omission or misrepresentation in any
such information or opinion; and
7.6.3 that any such right or claim shall not constitute a defence to
any claim by the Purchaser under or in relation to this
Agreement (including the Warranties or the Tax Deed).
13
7.7 The Warrantors and 3i shall not be liable in respect of any Claim
unless:
7.7.1 they receive from the Purchaser written notice setting out in
reasonable detail a summary of the Claim and a bona fide
estimate of the amount of the Claim;
7.7.2 in the case of a Claim under the Tax Covenant or the Tax
Warranties, on or before the seventh anniversary of
Completion; and
the Purchaser has instigated proceedings in respect of the Claim within
six (6) months of the date of the written notice of the Claim in
question.
7.8 Save for a Claim for a breach of a Limited Warranty and subject to the
provisions of clause 7.9:
7.8.1 the aggregate liability of the Warrantors and 3i together for
all Claims shall not exceed [US$2,000,000], together with
reasonable costs and expenses incurred by the Purchaser
specifically in successfully pursuing valid Claims under this
Agreement;
7.8.2 the Warrantors and 3i together shall note be liable unless the
aggregate amount of all individual Claims exceeds [US$500,000]
in which event the Warrantors and 3i shall be liable for [the
whole amount and not merely] the excess [only];
7.8.3 the Warrantors and 3i together shall not be liable for any
individual Claim unless the amount of the liability in
question exceed [US$50,000];.
7.9 The aggregate individual liabilities of the Warrantors and 3i is as
follows for all Claims of:
7.9.1 Xxxx Xxxxxxx Xxxxxxx shall not exceed L[ ]; and
7.9.2 Xxxxxxxx Xxxxxxx Xxxxx shall not exceed L[ ]; and
7.9.3 3i plc shall not exceed L[ ].
7.10 The Warrantors and 3i shall not be liable for any Claim to the extent
that the Claim arises or is increased as a result of any legislation or
government regulation or any administrative judicial decisions not in
force at the date of this Agreement;
14
7.11 The Purchaser shall not be entitled to recover damages or obtain
payment, reimbursement, restitution or indemnity more than once in
respect of the same loss, damage or deficiency.
7.12 Nothing in this Agreement shall be deemed to relieve the Purchaser from
any common law duty to mitigate any loss or damage incurred by the
Purchaser or any member of the Purchaser's Group.
7.13 The Purchaser acknowledges that no representations, undertakings or
warranties, express or implied, are given by the Warrantors or 3i in
relation to the subject matter of this Agreement, other than those
expressly contained in the Agreement.
7.14 If any Claim under the Warranties arises which, at the time such Claim
is notified to the Warrantors, is contingent only or otherwise not
capable of being quantified, then the Warrantors shall not be under any
obligation to make any payment in respect of such Claim unless and
until such liability ceases to be contingent or becomes capable of
being quantified, as the case may be. So long as such Claim shall have
been notified to the Warrantors in accordance with clause 12 (Notices)
below, then the provisions of clause 7.7.1 shall be amended in relation
to such Claim so as to require that proceedings be issued and served
within six (6) months from the date on which the said liability ceased
to be contingent or becomes capable of being quantified, as the case
may be, in order for the liability of the Warrantors (or any of them)
not to determine.
7.15 Any amount paid by the Warrantors or 3i in respect of any Claims shall
be deemed to reduce the consideration paid by the Purchaser to the
Vendors under this Agreement.
7.16 In relation to the Accounts and Management Accounts no Claim under the
Warranties shall be valid and effective to the extent that any of the
following may be used or applied so as to cancel or reduce for
liability to which such Claim relates:
7.16.1 specific provision in the Accounts or the Management Accounts;
or
[7.16.2 a revaluation in respect of a an asset understated in the
Accounts [or the Management Accounts] or any liabilities
overstated in the Accounts [or the Management Accounts as the
case may be.]
15
7.17 Where the Warrantors or 3i have paid an amount in discharge of a Claim
to the Purchaser (or at its discretion) and the Purchaser or any member
of the Purchaser's Group following Completion subsequently makes every
recovery from a third party (whether by reason of insurance or
otherwise), the Purchaser shall, as soon as is reasonably practicable,
repay to the relevant Warrantors or 3i an amount equal to the sum paid
by the relevant Warrantors or 3i in settlement of the relevant Claim,
less all reasonable costs and expenses of recovery (including insurance
premiums).
8 CASH CONSIDERATION ADJUSTMENT
8.1 The Purchaser and Vendors shall procure that Completion Accounts shall
be prepared as at the Completion Date.
8.2 The Completion Accounts shall comprise the consolidated balance sheet
of the Company Group as at the Completion Date and the consolidated
profit and loss account of the Company Group for the period commencing
on the Accounts Date and ending on the Completion Date together with
such explanatory notes relating thereto as shall be required to support
them.
8.3 The Completion Statement shall be prepared in accordance with all
applicable Financial Reporting Standards and under UK Generally
Accepted Accounting Procedures and subject thereto on the basis of the
accounting policies and practices adopted in the Company's audited
Accounts (see attached) and then adjusted (if and to the extent that
the following adjustments have not already been applied) to take
account of the following matters:-
8.3.1 any National Insurance paid or accrued by the Company in
respect of the issue of options under the Staff Share Scheme;
8.3.2 any amortised goodwill;
8.3.3 any fees considered to be exceptional and resulting from the
pursuance of the sale to Great Plains Software Inc. (likely to
include the costs of the visit of certain PWA directors to
Great Plains Software Inc. and the costs of tax advice to the
Company on the issue and rollover of share options);
16
8.3.4 trading in February being normalised to take account of any
sales slippage due to management focus on the sale to Great
Plains Software Inc.;
8.3.5 any other fees or expenses or adjustments charged to the Group
Company on the instruction of Great Plains Software Inc.
8.4 The Purchaser shall be entitled to require that, within 30 days of
receipt of such Completion Statement, such Completion Statement shall
be audited by the Purchaser or its Auditor for the purpose of
ascertaining the Net Asset Value and may be revised with the agreement
of the Purchaser and the Vendor as a result thereof and will then be
the Signed Completion Accounts.
8.5 Not later than five (5) Business Days after the issue of the signed
Completion Accounts:
8.5.1 the Vendor shall pay to the Purchaser the amount (if any) by
which the Net Assets as shown in the Completion Statement are
less than [amount in words] pounds [US$ ];
8.5.2 the Vendor shall pay to the Purchaser the amount (if any) by
which the Working Capital as at the Completion Date falls
short of [amount in words] pounds [(US$ )]
and the Cash Consideration shall be deemed to have been adjusted
accordingly.
8.6 The Purchaser shall, if the Vendor fails to make payment in accordance
with the provisions of clause 8.3 be entitled to set off the amount due
to the Purchaser against any amounts payable by it under clause 3.1.
9 RESTRICTIVE COVENANTS
9.1 Each of the Vendors jointly and severally undertakes with the Company
and the Purchaser that without the prior consent in writing of the
Purchaser they will not directly or indirectly, whether by themselves,
their employees or agents and whether
17
on their own behalf or on behalf of any other person, firm or company
or otherwise howsoever, for a period of 2 years from the Completion
Date:
9.1.1 (subject to clause 9.3) carry on, be employed or otherwise
engaged, concerned or interested in any capacity (whether for
reward or otherwise) in, or in any way assist any business
which is or is about to be engaged in the manufacture,
production, distribution or sale of the Restricted Products or
any of them [in the Prohibited Area] in competition with the
Company or any other Group Company;
9.1.2 in relation to the Restricted Products or any of them solicit
or canvass, accept orders from or otherwise deal with any
person, firm, company or other organisation who:
9.1.2.1 was a customer of any other Group Company at any time
during the 2 years prior to the Completion Date; or
9.1.2.2 at the Completion Date was in the process of
negotiating or contemplating doing business with any
other Group Company;
9.1.3 solicit or entice away from any Group Company any employed or
otherwise engaged by that Group Company on the Completion
Date, whether or not that person would commit any breach of
his contract of employment by reason of his leaving the
service of that Group Company.
9.2 The restriction in Clause 8.1.1 above shall not prohibit the holding
(directly or through nominees) of investments listed on the London
Stock Exchange or in respect of which dealing takes place in the
Alternative Investment Market on the London Stock Exchange or any
recognised Stock Exchange or provided that not more than 5 per cent of
the issued shares or other securities of any class of any one company
shall be so held without the prior sanction of a resolution of the
board of the Purchaser.
9.3 Each of the Vendors severally undertakes with the Purchaser that they
will not at any time after Completion directly or indirectly, whether
by themselves, their employees or agents or otherwise howsoever:
18
9.3.1 engage in any trade or business or be associated with any
person firm or company engaged in any trade or business using
the name PWA Personnel Systems Limited or any name
incorporating the words PWA Personnel Systems Limited or any
similar name or names or any colourable imitation thereof;
9.3.2 in the course of carrying on any trade or business, claim,
represent or otherwise indicate any present association with
any Group Company or, for the purpose of obtaining or
retaining any business or custom, claim, represent or
otherwise indicate any past association with any Group
Company;
9.3.3 (subject to clause (9.5)) without the consent of the Company
or the Purchaser use, whether on his own behalf or on behalf
of any third party, or divulge to any third party, any of the
Confidential Information.
9.4 Subject to clause 9.5 each of the Vendors severally undertakes with the
Purchaser that, if any Group Company shall have obtained any of the
Confidential Information from any third party under an agreement
including any restriction on disclosure known to them, they will not at
any time without the consent of the Company or the Purchaser infringe
that restriction.
9.5 The restriction in clause 9.3.2 shall not operate to prohibit any of
the Vendors who continues in the employment of any Group Company after
Completion from claiming, representing or indicating his association in
that capacity with that Group Company during the continuance of that
employment and in accordance with the terms of his service agreement.
9.6 The restrictions in clause 9.3.3 shall not apply:
9.6.1 in respect of any of the Confidential Information which is in
or becomes part of the public domain, other than through a
breach of the obligations of confidentiality set out in this
Agreement; or
9.6.2 to any of the Vendors to the extent that they are required to
disclose Confidential Information by any applicable law,
governmental order, decree or regulation having the force of
law or pursuant to the regulations of any
19
securities exchange or regulatory or governmental body to
which they are subject.
9.7 Each of the Vendors agrees with the Purchaser that the restrictive
covenants in clauses 0 to 9.4 inclusive are reasonable and necessary
for the protection of the value of the Company Shares and the Company
and that, having regard to that fact those covenants do not work
harshly on them.
10 ANNOUNCEMENTS
Save as (but only to the extent) expressly required by law or by the
London Stock Exchange or other recognised investment exchange, all
announcements or circulars by, of or on behalf of any of the parties
hereto and relating to the sale and purchase hereunder shall be in
terms to be approved in writing by the parties in advance of issue.
11 RELEASES, WAIVERS ETC., BY THE PURCHASER
11.1 Subject to the provisions of Schedule 9, the Purchaser may, in its
discretion, in whole or in part release, compound or compromise, or
waive its rights or grant time or indulgence in respect of, any
liability to it under this Agreement and may do so as regards any one
or more of the Vendors, Warrantors or Warrantors under that liability
without in any way prejudicing or affecting the liability of or its
rights against any other of the Vendors, Warrantors or Warrantors in
respect of the same or a like liability, whether joint and several or
otherwise.
11.2 Subject to clause 11.3, neither the single or partial exercise or
temporary or partial waiver by the Purchaser of any right, nor the
failure by the Purchaser to exercise in whole or in part any right or
to insist on the strict performance of any provision of this Agreement,
nor the discontinuance, abandonment or adverse determination of any
proceedings taken by the Purchaser to enforce any right or any such
provision shall (except for the period or to the extent covered by any
such temporary or partial waiver) operate as a waiver of, or preclude
any exercise or enforcement or (as the case may be) further or other
exercise or enforcement by the Purchaser of, that or any other right or
provision.
20
11.3 All references in clause 11.2 to:
11.3.1 any right shall include any power, right or remedy conferred
by this Agreement on, or provided by law or otherwise
available to, the Purchaser; and
11.3.2 any failure to do something shall include any delay in doing
it.
11.4 The giving by the Purchaser of any consent to any act which by the
terms of this Agreement requires such consent shall not prejudice the
right of the Purchaser to withhold or give consent to the doing of any
similar act.
12 NOTICES
12.1 Except as otherwise provided in this Agreement, every notice
under this Agreement shall be in writing and shall be deemed
to be duly given if it (or the envelope containing it)
identifies the party to whom it is intended to be given as the
addressee and:
12.1.1 it is delivered by being handed personally to the addressee
(or, where the addressee is a corporation, any one of its
directors or its secretary); or
12.1.2 it is delivered by being left in a letter box or other
appropriate place for the receipt of letters at the
addressee's authorised address; or
12.1.3 the envelope containing the notice is properly addressed to
the addressee at his authorised address and duly posted by the
recorded delivery service (or by airmail registered post if
overseas);
and, in proving the giving or service of such notice, it shall be
conclusive evidence to prove that the notice was duly given within the
meaning of this clause 12.1.
12.2 A notice sent by post (or the envelope containing it) shall not be
deemed to be duly posted for the purposes of clause 12.1.3 unless it is
put into the post properly stamped or with all postal or other charges
in respect of it otherwise prepaid.
12.3 For the purposes of this clause 12 the authorised address of each of
the Vendors shall be the address of the relevant Vendor shown in
Schedule 1 or as notified to the Purchaser from time to time and the
authorised address of (respectively) the Purchaser
21
and the Company and [each of] the Subsidiary[ies] shall be the address
of its registered office for the time being or (in the case of notices
transmitted by facsimile transmission) its facsimile number at that
address.
12.4 Any notice duly given within the meaning of clause 12.1 shall be deemed
to have been both given and received:
12.4.1 if it is delivered in accordance with clause 12.1.1 or
12.1.2, on such delivery;
12.4.2 if it is duly posted or transmitted in accordance with
clause 12.1.3 by any of the methods therein specified, on the
second (or, when sent airmail, fifth) business day after the
day of posting.
12.5 For the purposes of this clause12 "notice" shall include any request,
demand, instruction, communication or other document.
13 ENTIRE AGREEMENT
This Agreement and the documents in agreed form referred to in this
Agreement constitute the entire agreement between the parties in
relation to the subject matter covered and supersede any previous
agreement between the parties in relation to such matters which shall
cease to have any further effect
14 ALTERATIONS
No purported alteration of this Agreement shall be effective unless it
is in writing, refers specifically to this Agreement and is duly
executed by each party hereto.
15 SEVERABILITY
15.1 Each provision of this Agreement is severable and distinct from the
others. The parties intend that every such provision shall be and
remain valid and enforceable to the fullest extent permitted by law. If
any such provision is or at any time becomes to any extent invalid,
illegal or unenforceable under any enactment or rule of law, it shall
to that extent be deemed not to form part of this Agreement but (except
to that extent in the case of that provision) it and all other
provisions of this Agreement shall continue in full force and effect
and their validity, legality and enforceability shall not
22
be thereby affected or impaired, provided that the operation of this
clause would not negate the commercial intent and purpose of the
parties under this Agreement.
15.2 If any provision of this Agreement is illegal or unenforceable as a
result of any period specified herein being in excess of that permitted
by a relevant authority, that provision shall take effect with the
substitution of a shorter period acceptable to the relevant authority
subject to it not negating the commercial intent of the parties under
this Agreement.
16 COUNTERPARTS
This Agreement may be entered into in the form of two or more
counterparts each executed by one or more of the parties but, taken
together, executed by all and, provided that all the parties so enter
into the Agreement, each of the executed counterparts, when duly
exchanged or delivered, shall be deemed to be an original, but, taken
together, they shall constitute one instrument.
17 PAYMENT OF COSTS
Each of the parties shall be responsible for their or its respective
legal and other costs incurred in relation to the negotiation,
preparation and completion of this Agreement and all ancillary
documents, save that the Vendors shall be jointly and severally liable
to pay any and all stamp duty levied upon either party as a consequence
of the Completion of this Agreement.
18 SUCCESSORS AND ASSIGNS
18.1 This Agreement shall be binding on and shall enure for the benefit of
the successors in title and personal representatives of each party.
18.2 Subject always to clause 18.3 none of the parties hereto shall be
entitled to assign the benefit of any rights under this Agreement
without the prior written consent of the other parties.
18.3 The parties hereby agree that the Purchaser is entitled to assign the
whole or part of its rights and obligations hereunder to any Group
Company thereof.
23
19 APPLICABLE LAW AND SUBMISSION TO JURISDICTION
This Agreement shall be governed by and construed in accordance with
English law and the parties hereby submit to the non-exclusive
jurisdiction of the High Court of Justice in England for the purpose of
hearing and determining any suit, action or proceedings which may arise
out of or in connection with this Agreement.
IN WITNESS whereof this Agreement has been entered into the day and year first
above written.
24
SCHEDULE 1, PART A
THE VENDORS
-------------------------------- --------------------------- --------------- ---------------------------
(1) (2) (3)(a) (3)(b)
NAME ADDRESS NUMBER OF THE NUMBER OF PREFERENCE SHARES
ORDINARY
SHARES HELD
================================ =========================== =============== ===========================
3i PLC Apex Plaza, Corbury Road, NIL 325,000
Reading, Berks
-------------------------------- --------------------------- --------------- ---------------------------
Xxxx Xxxxxxx Xxxxxxx Littlestead Green Farm, Row 000,000 XXX
Xxxx, Xxxxxxx, Xxxxxxx
-------------------------------- --------------------------- --------------- ---------------------------
Xxxxxxxx Xxxxxxx Xxxxx Xxxxx, Berks 128,788 NIL
-------------------------------- --------------------------- --------------- ---------------------------
FM Trust Corporation Limited X/x 00 Xxx xxx Xxxxxx, 0000 000,000 XXX
Xxxxxxxx, Xxxxxxxxxxx
-------------------------------- --------------------------- --------------- ---------------------------
25
SCHEDULE 1, PART B
VENDORS' SHARE OF CONSIDERATION
--------------------------------- ----------------- ------------
NAME CASH (US $) SHARES
--------------------------------- ----------------- ------------
3i plc
--------------------------------- ----------------- ------------
Xxxx Xxxxxxx Xxxxxxx
--------------------------------- ----------------- ------------
Xxxxxxxx Xxxxxxx Xxxxx
--------------------------------- ----------------- ------------
FM Trust Corporation Limited
--------------------------------- ----------------- ------------
26
SCHEDULE 2
THE COMPANY
Date and place of incorporation: 7th December 1998, Cardiff
Registered number: 3679633
Registered office: Courtyard House, Xxxxxx Road, Marlow, Bucks
Authorised share capital: L100,000 divided into [ ] Ordinary Shares of
L0.10 each and [ ] `A' Ordinary Shares of
L0.10 each
Issued share capital: 566,000 Ordinary Shares [fully paid]
325,000 `A' Ordinary Shares [fully paid]
Directors: Xxxxx Xxxx Xxxxxxx
Xxxxx Xxxxxx Xxxx
Xxxx Xxxxxxx Xxxxxxx
Xxxx Xxxxxxx Xxxx
Secretary: Xxxxx Xxxx Xxxxxxx
Auditors: [ ]
Accounting reference date: 30th September
27
SCHEDULE 3
THE SUBSIDIARIES
Name:
Date and place of Incorporation:
Registered number:
Registered office:
Authorised share capital:
Issued share capital:
Shareholder:
Directors:
Secretary:
Auditors:
Accounting reference date:
28
SCHEDULE 4
THE PROPERTIES
LEASEHOLD PROPERTIES
======== ============= ============ =============== ============ ================= =============
Number Description Proprietor Date of Lease Parties to Term and Occupier(s)
Lease rent
[Review dates?]
======== ============= ============ =============== ============ ================= =============
-------- ------------- ------------ --------------- ------------ ----------------- -------------
======== ============= ============ =============== ============ ================= =============
29
SCHEDULE 5
TAX DEED
[AS ATTACHED]
30
SCHEDULE 6
DIRECTORS AND EMPLOYEES
PART A - ADDITIONAL DIRECTORS
PART B - NEW SECRETARY
PART C - RETIRING DIRECTORS
PART D - RETIRING SECRETARY
PART E - PERSONS TO RECEIVE SERVICE AGREEMENTS
31
SCHEDULE 7
[PENSION ARRANGEMENTS]
32
SCHEDULE 8
MATTERS REPRESENTED AND WARRANTED
PART A - GENERAL WARRANTIES
1. INFORMATION SUPPLIED TO THE PURCHASER
1.1 The statements of fact contained in Schedules 1, 4 and 6 of this
Agreement are true and accurate in all respects and the documents
annexed to the Disclosure Letter are complete and accurate copies of
the documents of which they purport to be copies.
1.3 So far as the Warrantors are aware, the factual information contained
in the Information Memorandum dated [ ] which relates to the Company or
any member of the Group or any of their business, assets or liabilities
is true and accurate.
1.4 The Disclosure Letter contains details of any person (other than the
Purchaser and its advisors) to whom the Warrantors have in the past two
years supplied any confidential information concerning any member of
the Group with a view to their evaluation whether or not to acquire the
Company or any member of the Group or any of their businesses.
2 THE WARRANTORS
2.1 Each of the Warrantors has full power to enter into and perform this
Agreement which constitutes binding obligations on the Vendors in
accordance with its terms.
2.2 All the Company Shares are fully paid or are properly credited as fully
paid and each of the Vendors is the sole legal and beneficial owner of
the number of Company Shares set opposite that Vendor's name in column
3 of Schedule 1 free from all Security Interests.
3. ACCOUNTS
3.1 The Accounts comply with CA 1985 and all other relevant legislation and
have been prepared in accordance with generally accepted accounting
conventions, policies,
33
principles and practices consistently applied. The accounting
conventions, policies, principles and practices in the United Kingdom
which have been (including methods of valuation) adopted for the
Accounts are the same as those adopted in preparing the audited
accounts of the Company for its three preceding accounting reference
periods.
3.2 The Accounts give a true and fair view of the assets and liabilities
and state of affairs of the Company as at the Accounts Date and of the
profits and losses of the Company for the financial period to which the
Accounts relate.
3.3 The accounting reference date of the Company is 30th September.
3.4 The Management Accounts have been honestly and prudently prepared on a
basis consistent with the preparation of prior management accounts of
the Company during the three immediately preceding accounting periods
and are not misleading.
4. POSITION SINCE THE ACCOUNTS DATE
4.1 Since the Accounts Date, the Company has not:
4.1.1 agreed to acquire any business; or
4.1.2 disposed of any of its assets except in the ordinary and normal course
of business; or
4.1.3 incurred any capital commitment or series of related capital
commitments in excess of L50,000; or
4.1.4 agreed to purchase stocks in quantities or at prices materially greater
than was the practice of the Company prior to the Accounts Date.
4.2 All payments, receipts and invoices of the Company since the Accounts
Date have been properly recorded in the books of the Company.
5. DEBTORS AND CREDITORS
5.1 The Company is not owed any moneys other than trade debts incurred in
the course of business.
5.2 The Company has not factored or discounted any of its debts.
34
5.3 The Company has not given any guarantee or indemnity other than
disclosed.
5.4 The Company is not in default under the terms of any borrowing made by
it.
5.5 None of the debts due to the Company in excess of L5,000 as at the
Accounts Date remain unpaid as at the date of this Agreement, nor has
any debt in excess of L5,000 which has subsequently become due to the
Company or any member of the Group (or any part of such debt) remained
unpaid for more than one month after the due date for payment or been
released or written off or proven to be irrecoverable, nor so far as
the Warrantors are aware is any such debt now regarded as
irrecoverable.
6. SUBSIDIARIES
6.1 The Company:
(a) has never had any subsidiary other than the Subsidiaries;
(b) directly owns free from encumbrances the whole of the issued
share capital of the Subsidiaries except as detailed in
Schedule 3;
(c) has not since its incorporation been a subsidiary of any other
company; and
(d) holds no shares in the capital of any other company other than
the Subsidiaries.
7. PROPERTY
7.1 The Company does not use or occupy or have any interest, and has not
used, occupied or had any interest, in any land and/or buildings for
the purposes of its business other than the Properties.
7.2 Replies to enquiries given by the Company or the Company's Solicitors
to enquiries raised by the Purchaser or the Purchaser's Solicitors in
respect of the Properties are true and accurate in all material
respects.
7.3 The Company has not received notice of breach of any of the provisions
or covenants of any of the leases of any of the Properties.
35
7.4 The Company has not received notice of breach of any Environmental
Laws, and, so far as the Warrantors are aware, there are not
circumstances which will lead to any such notice being received.
8. ASSETS
8.1 Apart from leases over motor vehicles, computer hardware and software
used in the ordinary course of business, all tangible assets used in
connection with the business of the Company belong to the Company free
from any Security Interest.
8.2 All assets of or used in connection with the business of the Company
are in the possession of under the control of the Company.
8.3 The assets owned by the Company comprise all the assets necessary for
the effective continuation of the Company's business as carried on at
Completion.
8.4 All plant, machinery, vehicles and equipment currently owned or used by
the Company are in good condition and working order, and have been
regularly and property maintained.
8.5 As at Completion, the total assets (less current liabilities) of the
Company shall be not less than six (6) million, which does not include
any accrued and unpaid dividends or management or other fees paid or
payable by or on behalf of the Company to 3i
9. INSURANCES
9.1 Appropriate levels of insurance cover for a business similar to that of
the Company has been put and remains in place and has been properly
maintained by the Company and all such insurances are and have at all
material times been in force.
9.2 No claims in excess of L15,000 have been made by the Company on its
insurers within two years prior to the date of this Agreement nor so
far as the Warrantors are aware are any such claims contemplated or
outstanding.
36
10. BANK ACCOUNTS
10.1 The Disclosure Letter contains full details of all of the Company's
investment, deposit and bank accounts and of the banks and other
financial institutions at which they are kept.
10.2 Details of all overdraft, loan and other financial facilities available
to the Company are disclosed and no person who provides any of those
facilities has given any indication that they are considering
withdrawing or altering any of such facilities.
10.3 So far as the Warrantors are aware, neither the Vendors nor the Company
have done or omitted to do anything whereby the continuance of the
facilities referred to in paragraph 10.2 above may be prejudiced or
affected.
10.4 The Company has no outstanding borrowings or other indebtedness.
10.5 So far as the Warrantors are aware, there are no unpresented cheques of
an amount in excess of L5,000 drawn by the Company.
11. CONDUCT OF BUSINESS
11.1 The Company is not now, nor has it been during the period of twelve
months prior to the date of this Agreement, a party to any contracts or
transactions which are, or involve obligations, which are outside the
ordinary course of business of the Company or which are unusual or of a
long term nature. For the purpose of this paragraph 11.1, "LONG TERM"
means not terminable on 3 months notice or less.
11.2 So far as the Warrantors are aware, the Company has not received notice
that any event or omission has occurred which would entitle any third
party to terminate prematurely any material contract to which the
Company is a party. For the purpose of this paragraph 10.2, "material"
shall mean any contract having a value in excess of L25,000.
11.3 There is no claim against and, so far as the Warrantors are aware,
there are no circumstances which may lead to a claim against the
Company for defective goods, supplied by the Company.
37
11.4 The Company has obtained all licences, permissions and consents
required for the carrying on of its business and, so far as the
Warrantors are aware, there are no circumstances which indicate that
any of such licences, permissions or consents are likely to be revoked
or not renewed in the ordinary course.
11.5 The Company has no branch, place of business or substantial assets
outside the United Kingdom or any permanent establishment (as that
expression is defined in any relevant Order in Council made pursuant to
section 788 ICTA 1988) in any country outside the United Kingdom.
12. DIRECTORS AND EMPLOYEES
12.1 There are not in existence:
(a) any service agreements or other contracts with directors or
employees of the Company which cannot be terminated by twelve
months' notice or less without giving rise to any claim for
damages or compensation (other than compensation for unfair
dismissal under the Employment Rights Act 1996); or
(b) any other contracts between the Company and existing or former
directors or employees of the Company and the Company
including contracts or arrangements for any benefit or
payments of any nature to or for the benefit of any existing
or former directors or employees or any of their dependants;
or
(c) any consultancy agreements between the Company and any other
person firm or company; or
(d) any arrangements by which any person has the use of any credit
or charge card or account for which the Company is
responsible.
12.2 There are no arrangements to which the Company is a party involving
share options profit sharing or bonus, incentive or other similar
payments for employees other than disclosed.
12.3 There is no dispute involving sums greater than L25,000 between the
Company and any of its employees or a material number or category of
its employees.
38
12.4 There have been no strikes or industrial action short of strike action
(official or unofficial) by any of the Company's employees during the
period of six years immediately prior to the date of this Agreement and
there is no written agreement or arrangement between the Company and
any trade union or other body representing employees of the Company in
relation either to recognition of the trade union or other body or to
collective terms and conditions or representation.
12.5 So far as the Warrantors are aware the Company has in relation to each
of its employees complied with:
(a) obligations imposed on it by all statutes and regulations
relevant to the relations between it and its employees or any
trade union or employee representatives;
(b) all collective agreements recognition agreements for the time
being dealing with such relations or the conditions of service
of its employees; and
(c) all relevant orders and awards made under any relevant statute
or regulation affecting the conditions of service of its
employees.
12.6 Particulars of the terms and conditions of employment of the directors
and employees of the Company are contained in the Disclosure Letter and
since the Accounts Date no change has been made nor agreed to be made
in such terms and conditions of employment by the Company of any
person.
13. PENSIONS
13.1 In this paragraph 13 "Schemes" means the defined contributions schemes
as set out in Company employee service contracts and as agreed with
Xxxx Xxxxxxx and Xxxxxxxx Xxxxx.
13.2 Apart from the Schemes, there are no pensions arrangements (including
personal pension) or any similar schemes or arrangements in respect of
which the Company or the Subsidiaries has or may have any liability to
contribute or an obligation to any of its past or present officers or
employees or their spouses, children or dependants or to the trustees
of any such scheme or arrangement.
39
13.3 Apart from the Schemes, the Company and its Subsidiaries are not under
any legal or moral liability or obligation or a party to any ex-gratia
arrangement or promise to pay pensions, gratuities, superannuation
allowances in respect of sickness, accident or disability or any
similar arrangements or promises or otherwise to provide "relevant
benefits" within the meaning of Section 612 of the Taxes Act to or for
any of its past or present officers or employees or their spouses,
children or dependents.
13.4 In relation to the Company's obligations under the Schemes in respect
of their respective members and of those persons who are spouses,
children and dependants of members ("Members"):
13.4.1 no person has during the past two years been excluded from membership
of the Scheme on the basis of his being a part-time employee;
13.4.2 all contributions in relation to the Schemes due as at Completion in
accordance with such of those Schemes or any insurance company have
been paid;
13.4.3 no legally enforceable undertakings or assurances have so far as the
Warrantors are aware been given to the Members as to the introduction,
continuance, increase or improvement of any retirement, death or
disability benefits;
13.4.4 no discretion has so far as the Warrantors are aware have been
exercised under the Schemes to admit to membership of the Schemes an
officer or employee who would not otherwise have been eligible for
admission to membership or to provide a benefit which would not
otherwise already be provided for under the Schemes and no power to
augment or provide new or additional benefits has been exercised;
13.4.5 where applicable, all lump sum benefits payable on the death of a
Member whilst in employment (other than a return of the Member's own
contributions and contributions paid in respect of him) are (to the
extent that they are linked to earnings at or before death) fully
insured with an insurance company of repute and so far as the
Warrantors
40
are aware each Member has been covered for such insurance at normal
rates and on normal terms for persons in good health.
14. UNISSUED CAPITAL
14.1 There are no agreements or instruments in force which require or confer
the right (conditionally or unconditionally) to require the issue of
any share or loan capital of the Company now or at any time in the
future nor are there any agreements restrictions or obligations entered
into by or binding on the Company as to its unissued share or loan
capital.
15. INTELLECTUAL PROPERTY
15.1 The Company owns or has the right to use under royalty free licence
paid up licence, online implied by the sale of a product, all
Intellectual Property Rights relating to products manufactured by it or
on its behalf or used by it in connection with its business.
15.2 So far as the Vendors are aware, the registration of all the registered
Intellectual Property owned by the Company including the Trade Marks
attached to the Disclosure Letter is valid and in full force and effect
and all relevant renewal or other fees in relation thereto have been
paid.
15.3 There are no existing contracts under which the Company grants to any
third party any rights in or over the Intellectual Property owned by
the Company.
15.4 The Company does not require any Intellectual Property Rights other
than the Intellectual Property in order to use all the processes
employed by it in its business as presently constituted nor to
manufacture, use and sell the products which result from those
processes nor otherwise to carry on its business.
15.5 So far as the Warrantors are aware:
(a) the Company has not and no person for whose acts or omissions
the Company is vicariously liable has infringed the
Intellectual Property Rights of any other person, firm or
company;
41
(b) no other party has claimed that any infringement by the
Company or any such person has occurred.
16. LITIGATION, OFFENCES AND PROCESSES
16.1 Apart from routine debt collection the Company is not engaged in any
litigation (whether criminal or civil), arbitration or any alternative
dispute resolution process and so far as the Warrantors are aware there
are no facts or circumstances likely to give rise to such litigation,
arbitration, or any alternative dispute resolution process.
16.2 No injunction has been granted against the Company and the Company has
given no undertaking to any Court or to any third party arising out of
any legal proceedings.
16.3 No order has been made or petition served or resolution passed for the
winding up of the Company nor so far as the Warrantors are aware has
any person threatened to present such a petition or convened or
threatened to convene a meeting of the Company to consider a resolution
to wind up the Company; no distress execution or other process has been
levied on any asset of the Company nor has any person threatened any
such distress, execution or other process; no person has appointed or
threatened to appoint a receiver of the Company's business or assets or
any part thereof.
17. GRANTS
17.1 Full details of all investment, regional selective assistance, local
government or other grant or other subsidy or similar payment made or
due to be made by the Company have been fairly and accurately disclosed
in the Disclosure Letter.
17.2 Neither the Vendors nor the Company have not done or omitted to do or
agreed to do or to omit to do anything as a result of which all or any
part of any investment or other grant or employment subsidy or similar
payment made or due to be made to the Company is or may be liable to be
repaid, forfeited or withheld in whole or in part.
18. TRANSACTIONS WITH SHAREHOLDERS OR DIRECTORS
18.1 No monies are owed by the Company to any director of the Company or to
the Vendors or to any person connected with any such director or the
Vendors.
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18.2 The Company has no debts owed to it by its directors or any of them or
by the Vendors or by a person connected with any such director or the
Vendors.
19. ADMINISTRATION
19.1 There are attached to the Disclosure Letter true and accurate copies of
the Memorandum and Articles of Association of the Company incorporating
all amendments made up to and including the date hereof.
19.2 The register of members of the Company contains a true and accurate
record of the members and all former members of the Company and their
holdings of shares in the capital of the Company.
19.3 No direction has been given to the Company under section 28 CA 1985.
19.4 All returns, particulars, resolutions and other documents required to
be filed with or delivered to the Registrar of Companies and the
Department of Trade and Industry by the Company have been correctly and
properly prepared, filed or delivered.
19.5 All the accounts books ledgers and financial and other material records
of whatsoever kind of the Company are held or stored in means which are
under the exclusive ownership and control of the Company and have at
all times been properly and accurately kept and completed in all
material respects.
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Part B - Tax Warranties
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1 All accounts computations returns notices or information ("RETURNS")
required to be made submitted or given to any Tax Authority by the
Company (including, without limitation, all Returns in respect of PAYE
and National Insurance) have been properly and duly prepared and
punctually made submitted or given and are up-to-date and correct in
all material respects.
2 The Company is not (and in the last three years has not been) in
dispute with or subject to any investigation by any Tax Authority other
than standard visits or audits and so far as the Vendors are aware
there are no facts or circumstances likely to give rise to or be the
subject of any such dispute or investigation.
3 The Company has (to the extent required by law) preserved and retained
in its possession complete and materially accurate records relating to
Tax and the Company has sufficient records relating to past events to
calculate for Tax purposes the profit gain loss balancing charge or
balancing allowance which would arise on the disposal or realisation of
any assets owned at the Accounts Date or acquired since that date but
before Completion.
4 The Company has paid to the relevant Tax Authority all Tax including
deductions or withholdings required to be deducted under the PAYE and
National Insurance systems and in respect of any Tax chargeable on
benefits provided for its employees or former employees and is not
liable to pay any interest, penalty, fine or surcharge in respect of
any such Tax.
5 No balancing charge in respect of capital allowances claimed or given
and no chargeable gain (disregarding any relief or allowance available
to the Company other than amounts allowable under section 38 TCGA 1992)
would arise if any of the assets of the Company (or, where the assets
are in a capital allowances pool, all the assets in that pool) were to
be realised on the date hereof for an amount equal to the book value
thereof as shown in the Accounts or, in respect of assets acquired
since the Accounts Date, for an amount equal to the consideration given
for their acquisition.
6 The Company is registered for VAT, is a taxable person, does not make
any exempt supplies and has complied in all material respects with the
requirements of VATA
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1994 and all applicable regulations and orders in respect of VAT and
has not acquired any assets to which Article 5(1) VAT (Special
Provisions) Order 1995 applies.
7 The Company has not at any time made any election to waive exemption
under the provisions of VATA 1994 Schedule 10 for value added tax in
respect of any land or buildings currently within its ownership.
8 All documents required to prove the title of the Company to any assets
owned at Completion have been duly stamped.
9 So far as the Vendors are aware there is no unsatisfied liability to
inheritance tax attached or attributable to any shares in the Company
or any of the assets of the Company and neither such shares or assets
are subject to an Inland Revenue charge.
10 The Company is and has always been resident only in the United Kingdom
for Tax purposes and is not and never has been a close company ad
defined in ICTA 1988 s414.
11. The Company owns no asset to which the Capital Goods Scheme applies.
12. The Company has no branch, agency, place of business or permanent
establishment outside the United Kingdom.
13. [There are no circumstances which might cause a disallowance of the
carry forward of losses, expenses of management, debits in respect of
loan relationships or excess charges under ICTA 1988 ss393, 768, 768B
or 768C or the carry back of losses under s768A].
14. The Company is not an investment company as defined by ICTA 1988 s130.
15. The Company is not party to a loan relationship either as a debtor or
creditor as defined in FA 1996 s103.
16. No asset of the Company shall be deemed under TCGA 1992 s179 to have
been disposed of and re-acquired by virtue of or in consequence of the
entering into or performance of this Agreement or any other event since
the Accounts Date.
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17. The Company has not been a party to or otherwise involved in any
transaction to which any of the following provisions could apply (other
than transactions in respect of which all Inland Revenue clearances
have been obtained after disclosure of all material facts):
Sections 29, 30, 31, 32, 33, 34, 135, 136 or 139 TCGA 1992;
Paragraphs 5-10, Schedule 12 to the Finance Xxx 0000;
Sections 116-118, 213-218, 219, 399, 703, 776 of ICTA 1988;
Sections 729-746 or ss774-778 of Part XVII of ICTA 1988.
18. The Company has not been involved in any transaction or series of
transactions which, or any part of which, may for any tax purposes be
disregarded or reconstructed by reason of any motive to avoid, reduce
or delay a possible liability to tax.
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SIGNED by )
in the presence of: )
SIGNED by )
in the presence of: )
SIGNED by )
for and on behalf of )
LIMITED/PLC )
in the presence of: )
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