Exhibit 2.18
DATED 2002
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P.A. BACHE & OTHERS
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DOVEBID UK LIMITED
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DOVEBID, INC.
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SALE AND PURCHASE AGREEMENT
relating to
the business and assets of
the partnership under the name
BACHE XXXXXXXX
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XXXXXX XXXXXXX XXXXXXX
Xxxxxxxxx
00 Xxxxxxxx Xxxxxxxxxx
Xxxxxxxxxxx
Xxxxxx XX0X 0XX
Tel: x00 (0)00 0000 0000
Fax: x00 (0)00 0000 0000
DX 41 London
Final
15/5/02
Ref: DRP/PSP
Index
Clause No. Page No.
1. Definitions and Interpretation ................................ 3
2. Agreement to sell and purchase ................................ 11
3. Retained Assets ............................................... 12
4. Liabilities ................................................... 13
5. Consideration ................................................. 14
6. Closing Balance Sheet ......................................... 15
7. Deferred Consideration ........................................ 16
8. Value Added Tax ............................................... 19
9. Closing ....................................................... 20
10. Warranties .................................................... 22
11. Purchaser's remedies .......................................... 23
12. Limitations to the Warranties ................................. 23
13. The Premises .................................................. 25
14. The Transferring Employees .................................... 28
15. The Business Contracts ........................................ 30
16. Apportionments and receipts after Closing ..................... 31
17. Obligations after Closing ..................................... 32
18. Investment Warranties and Covenants ........................... 33
19. Restrictive Covenants ......................................... 38
20. Confidentiality ............................................... 39
21. Announcements and publicity ................................... 39
22. Notices and other Communications .............................. 39
23. Miscellaneous ................................................. 41
24. Law and Jurisdiction .......................................... 42
25. Guarantee ..................................................... 42
THIS AGREEMENT is made on the day of May 2002
BETWEEN
(1) XXXXX XXXXXXXXX XXXXX of 00 Xxxxxxxx Xxxx, Xxxxxxxxx, Xxxxxxxxxx, X00 0XX;
XXXXXXX X XXXXXXX of 000 Xxxxxx Xxxx, Xxxxxxx Xxxxx, Knowle, Xxxxxxxx, Xxxx
Xxxxxxxx, X00 0XX;
XXXXXXXX X XXXXXXX of 00 Xxxxx Xxxx, Xxxxxxx, Xxxxxxxx, Xxxx Xxxxxxxx, X00
0XX;
XXXXX X XXXX of 0 Xxxxxxxxxxx Xxxx, Xxxxxxxx, Xxxxxxx Xxxxx, Xxxxxxxxxxxxx,
XX0 0XX;
XXXXX X XXXX of 0 Xxxxxxxxx Xxxxx, Xxxxxxxx, Xxxxx, XX00 0XX;
all of whom carry on business in partnership under the name BACHE XXXXXXXX
whose principal place of business is at Peat House, 00 Xxxxxx Xxxxxx,
Xxxxxxxxxx, Xxxxxx Xxxxxxx, X0 0XX (the "Vendors");
(2) DOVEBID UK LIMITED (registered in England and Wales under company number:
04236459) whose registered office is at 0 Xxxxxxxx Xxxxx, Xxxxxxx Xxxxxx,
Xxxxxxxx, Xxxx Xxxxxxxx, XX0 0XX (the "Purchaser"); and
(3) DOVEBID, INC. (a company incorporated in Delaware, USA), whose principal
office is at 0000, X. Xxxxxxxxx Xxxxxxxxx Xxxxxx Xxxx, XX 00000, XXX
("DoveBid").
AGREED TERMS
1. Definitions and Interpretation
1.1 In this agreement including its introduction and Schedules, unless the
context requires otherwise, the following words shall have the following
meanings:
"Accounting Date" means 30 April 2001;
"Accounts" means the accounts relating to the Business for the accounting
period ended on the Accounting Date comprising a balance sheet, profit and
loss account, and statements of capital and current accounts a copy of
which is annexed to the Disclosure Letter;
"Accounts Period" means the accounting period from 1 May 2000 to 30 April
2001;
"Applicable Proportion(s)" means, in relation to a Vendor, the proportion
set out against his name in the last column of Schedule 1;
"Assets" means the assets of the Business agreed to be sold and purchased
pursuant to this agreement as set out in clause 2.1;
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"Assumed Liabilities" has the meaning given to that term at clause 4.2;
"Business" means the business of providing surplus asset management
services, including surveying, valuing and auctioneering services including
on-line services carried on by the Vendors at the Closing Date;
"Business Contracts" means the Customer Contracts, Supplier Contracts, the
Leasing/Hire Agreements and the Licences;
"Business Day" means any day other than a Saturday, Sunday or any day which
is a bank or public holiday in England and Wales or in the United States of
America;
"Business Intellectual Property" means:
(a) all inventions (whether or not patentable), business names, brand
names, trade marks (whether in fancy script or otherwise), devices,
logos, get up and signs (and whether or not registered or applied for)
owned and used by the Vendors in connection with the Business together
with all goodwill associated with or symbolised by any of the
foregoing;
(b) all technical, commercial and other confidential information and
techniques owned, required for or used by the Vendors in relation to
the Business and Assets including (without prejudice to the generality
of the foregoing) all know-how of any nature, drawings, formulae,
processes, specifications, trade secrets, test reports, operating and
testing procedures, practices, instruction manuals, tables of
operating conditions, lists and particulars of customers and
suppliers, marketing methods, pricing, credit and payment policies,
profit margins, discounts and rebates, business plans or forecasts or
planning information relating to business development or the sale or
marketing of any products manufactured and/or sold or services
rendered by the Vendors in connection with the Business including but
not limited to sales and marketing share statistics and reports on
research other than information in the public domain (the "Business
Confidential Information");
(c) all copyright, database rights, moral rights or rights in the nature
of copyright in relation to or comprised in the products or any
materials or Software owned by, required for or used by the Vendors in
relation to the Business;
(d) all Intellectual Property currently or previously owned by or licensed
to the Vendors and/or the Partnership and used in connection with the
Business;
(e) the internet domain names listed in Schedule 5;
"Business Name" means Bache Xxxxxxxx;
"Closing" means the Closing of the sale and purchase of the Business and
the Assets in accordance with clause 9;
"Closing Date" means the date of this agreement;
"Computer Hardware" means the various items of computer equipment specified
in part A of Schedule 6 and all other computer hardware and equipment and
ancillary equipment used by the Vendors in connection with the Business;
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"Computer System" means all Computer Hardware, Software and any accessories
and networks owned or used by the Vendors in connection with the Business;
"Connected" means connected as defined in section 839, Income and
Corporation Xxxxx Xxx 0000;
"Consideration" means the Initial Consideration and the Deferred
Consideration, being the total purchase price payable by the Purchaser to
the Vendors for the Business and Assets as set out in clause 5, as adjusted
pursuant to clause 6, and the assumption of the Assumed Liabilities by the
Purchaser;
"Consideration Shares" means the 374,531 shares of DoveBid Common Stock to
be issued to the Vendors pursuant to clause 5;
"Creditors" means all trade and other debts, accrued charges and all other
amounts owing by the Vendors and/or the Partnership in connection with the
Business on the Closing Date which have been properly incurred in the
ordinary course of the Business but for the avoidance of doubt, excluding
the Retained Liabilities;
"Customer Cash" means all client account balances and other cash sums
belonging or referable to customers or potential customers of the Business
which are held by or deposited with the Partnership and/or the Vendors as
deposits for, or advance or instalment payments in relation to, any
Business Contract or so held or deposited in relation to any future
contract or order which any such customer may place with the Business in
the future;
"Customer Contracts" means all those engagements, contracts, arrangements
or orders entered into on or prior to the Closing Date by or on behalf of
the Partnership with customers or clients for the provision of services by
the Partnership in connection with the Business which at the Closing Date
remain to be performed in whole or in part by the Partnership including but
not limited to all those contracts particulars of which are set out in
Schedule 2;
"Deferred Consideration" has the meaning given to that term at clause 7;
"Disclosed" means fairly disclosed to the Purchaser expressly for the
purposes of this agreement in the Disclosure Letter and for the purposes of
this definition the expression "fairly" means that a matter shall be
disclosed only if it has been disclosed with sufficient particularity to
enable the Purchaser to assess the financial and commercial impact on the
Business of the matter disclosed;
"Disclosure Letter" means the letter of today's date from the Vendors to
the Purchaser in the agreed form executed and delivered immediately before
the signing of this agreement;
"DoveBid" means DoveBid, Inc., a Delaware corporation and the parent
company of the Purchaser;
"DoveBid Common Stock" means common stock of DoveBid, par value US$0.001
per share;
"Draft Closing Balance Sheet" means the balance sheet of the Partnership as
at the Closing Date showing all its assets and liabilities as at that date
together with supporting notes and schedules a copy of which is set out in
Schedule 15;
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"EBITDA" has the meaning given to that term in Schedule 16;
"Earn Out Calculation(s)" means where the context requires, each and all of
the First Year Earn Out Calculations the Second Year Earn Out Calculations
and the Third Year Earn Out Calculations agreed or determined in accordance
with Schedule 16;
"EBITDA Base Level" means the EBITA base level sum calculated in accordance
with Schedule 16;
"Encumbrance" means any mortgage, charge, security interest, lien, pledge,
hypothecation, assignment by way of security, claim, right of pre-emption,
option, first covenant, restriction, reservation, trust, title defect
(including retention of title claim), or any other third party right or
encumbrances (legal or equitable) (whether or not perfected);
"Environment" means all or any of the following media: land (including
without limitation any building, structure or receptacle in, over or on
it); water (including without limitation surface coastal and groundwaters);
air (including without limitation the atmosphere within any natural or
man-made structure or receptacle above or below ground); and living
organisms (including, without limitation, plants, human beings and
terrestrial and aquatic life forms);
"Environmental Liability" means Liability (whether actual, contingent or
prospective) in relation to any matter affecting, or which may affect, the
Environment including (without limitation) all or any of noise, vibration,
discharges or emissions into the Environment; matters adversely affecting
human health and/or the health of other living organisms; the generation,
processing, refinement, recycling, use, ownership, possession, storage,
handling, manufacture, transfer, transport, disposal, discharge,
displacement, spillage, release, emission or threat of release of any
hazardous substance;
"Equipment" means all equipment, plant and machinery wherever situate
belonging to the Vendors and used in connection with the Business
including, but not limited to, all those items particulars of which are set
out in Schedule 7;
"Excluded Contracts" means those contracts, arrangements or orders entered
into on or prior to the Closing Date by or on behalf of the Vendors and or
the Partnership particulars of which are set out in Schedule 11;
"Excluded Premises" means the premises and car parking spaces details of
which are set out in Part C of Schedule 10;
"Final Closing Balance Sheet" means the balance sheet of the Partnership as
at the Closing Date showing all the assets and liabilities as at that date
prepared and agreed in accordance with clause 6;
"First Revenue Measurement Period" means the period from Closing to the
date of the first anniversary of Closing;
"First Year Earn Out Calculations" means the calculations relating to
EBITDA and Gross Profit for the First Revenue Measurement Period agreed or
determined in accordance with Schedule 16;
"Fixed Assets" means all tangible assets used or held for use in connection
with the Business other than the Equipment, the Premises and the
Transferring Motor Vehicles
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including, (i) all furniture, fixtures (including leasehold improvements),
furnishings, office equipment, machinery, vehicles, equipment, computers,
servers, spare parts or other tangible assets (including workstations and
personal computers, the third-party software programs and data stored
therein and the licences thereto, logbooks, notebooks, furniture, file
cabinets, white boards, personal office supplies and equipment) owned by
the Vendors that at any time are or were held for use primarily by the
Vendors and/or employees or consultants of Vendors in the conduct of the
Business, including, without limitation those items listed at Schedule 8;
"Goodwill" means the goodwill of the Vendors in connection with the
Business together with the exclusive right for the Purchaser to represent
itself as carrying on the Business in succession to the Vendors and under
the name Bache Xxxxxxxx together with the benefit of (but subject to the
burden of) the Business Contracts but excluding that goodwill transferred
to the Purchaser as part of any transfer to the Purchaser of the legal and
beneficial title and interest in and to any of the Business Intellectual
Property;
"Governmental Entity" means any governmental department, bureau, agency,
public board, public or self-regulatory body or authority, court
administrative agency or commission or other governmental authority or
instrumentality;
"Governmental Permit" means all material permits, licences and approvals
from Governmental Entities and quasi-Governmental Entities that are
necessary for the Vendor to conduct the Business without violation of any
applicable law or regulation;
"Gross Profit" has the meaning given that term in Schedule 16;
"Gross Profit Base Level" means the Gross Profit base level sum calculated
in accordance with Schedule 16;
"Initial Consideration" has the meaning give that term at clause 5.1;
"Intellectual Property" means all patents, registered designs, know-how,
rights in trade secrets and confidential information; registered or
unregistered trade marks, service marks and applications therefor and all
other business names, brand names, internet domain names, devices, logos,
get up and signs (and whether or not registered or applied for) with all
the goodwill associated with or symbolised by any of the foregoing; all
other inventions (whether or not capable of protection by patent or other
form of registration); all copyright, rights in the nature of copyright,
sui generis rights, design rights, semi-conductor topography rights, moral
rights, database rights and all other like rights in all parts of the world
whether present or vested future or contingent in any work however embodied
or recorded; all other intellectual property rights throughout the world
for the full term of the rights concerned and including: all registrations
and pending registrations relating to any such rights and the benefit of
any pending applications for any such registrations; all reversions,
extensions and renewals of such rights; and all accrued rights of action in
relation to such rights (including the right to xxx for and recover damages
for past infringements);
"Leases" means the leases of the Premises, details of which are set out in
part A of Schedule 10;
"Leasing/Hire Agreements" means all those contracts, arrangements or orders
entered into on or prior to the Closing Date by or on behalf of the Vendors
and/or the Partnership in relation to the leasing, lease purchase or hire
of goods or equipment for use in the Business which on the Closing Date
remain to be performed in whole or in
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part including but not limited to all those contracts particulars of which
are set out in Schedule 4;
"Liabilities" means all debts, liabilities and obligations, whether accrued
or fixed, absolute or contingent, matured or unmatured, determined or
determinable, known or unknown, including those arising under any law,
action or governmental order and those arising under any contract,
agreement, arrangement, commitment or undertaking;
"Licences" means the licences, agreements, contracts, permissions,
undertakings and understandings listed in part B of Schedule 5 being all
the legal arrangements pursuant to which the Vendors and/or the Partnership
are entitled to utilise any Intellectual Property owned by any third party;
"Licensors" means the licensors under the Licences;
"Losses" means losses, liabilities, damages, costs (including legal costs),
in each case of any nature whatsoever;
"Management Accounts" means the unaudited management accounts of the
Partnership comprising a balance sheet as at 31 March 2002 and a profit and
loss account for the period which commenced on 1 May 2001 and ended on 31
March 2002, a copy of which is annexed to the Disclosure Letter;
"Motor Vehicles" means those motor vehicles details of which are set out in
Schedule 9;
"Net Assets" means the aggregate of assets less liabilities of the
Partnership as at the Closing Date, as determined in accordance with clause
6;
"Net Current Assets" means the aggregate of current assets less current
liabilities as at the Closing Date, as determined in accordance with clause
6;
"New Premises" means the premises details of which are set out in Part B of
Schedule 10;
"Partnership" means the partnership through which the Business has been
conducted immediately prior to this agreement by the Vendors under the name
Bache Xxxxxxxx;
"Pending Invoices" means the invoices pending verification details of which
are set out in Schedule 19;
"Premises" means the premises details of which are set out in part A of
Schedule 10;
"Purchaser Group" means the Purchaser, its holding company and all
companies and undertakings which now or in the future become subsidiaries
or subsidiary undertakings of the Purchaser or of any such holding company;
"Purchaser's Solicitors" means Xxxxxx Xxxxxxx Xxxxxxx of Carmelite, 00
Xxxxxxxx Xxxxxxxxxx, Xxxxxxxxxxx, Xxxxxx XX0X 0XX;
"Purchaser's Warranties" means the warranties on the part of the Purchaser
set out in Schedule 14;
"Records" means all documents, papers and records (however stored) relating
to the Business, Assets and the Transferring Employees including but not
limited to books,
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accounts, copy invoices, copy orders, costings produced by suppliers,
agreements, contracts, drawings, product, design and advertising literature
and material, catalogues, specifications, quotations, lists of customers
and suppliers, credit reports, price lists, cost records and VAT records of
the Business kept or required to be kept by the Partnership and/or Vendors;
"Receivables" means all accounts receivable, notes receivable and other
receivables, accounts due or owing to the Vendor in relation to the
Business prior to the Closing Date, including pre-payments and including
without limitation those items listed in Schedule 18;
"Relevant Dismissal" means a dismissal which is agreed or determined to be
unfair for the purposes of the Employment Rights Act 1996 (or would be so
were the employee to have been continuously employed for more than 12
months) but excluding a constructive dismissal;
"Retained Assets" means the assets referred to in clause 3 as being
excluded from the sale and purchase pursuant to this agreement;
"Retained Liabilities" has the meaning given that term at clause 4.3;
"Retained Motor Vehicles" means those motor vehicles details of which are
set out in Part B of Schedule 9;
"Second Revenue Measurement Period" means the period from the date of the
first anniversary of Closing to the date of the second anniversary of
Closing;
"Second Year Earn Out Calculations" means the calculations relating to
EBITA and Gross Profit for the Second Revenue Measurement Period agreed or
determined in accordance with Schedule 16;
"Securities Act" means the Securities Xxx 0000, as amended, of the United
States of America;
"Security Interest" means and includes any encumbrance, mortgage, charge,
assignment for the purpose of security, pledge, lien, right of set-off,
retention of title or hypothecation for the purpose, or which has the
effect, of granting a security interest of any kind whatsoever and any
agreement, whether conditional or otherwise, to create any of the
foregoing;
"Software" means the computer programs listed in part B of Schedule 6 and
all other computer programs used by the Vendors in connection with the
Business;
"Supplier Contracts" means all those contracts, arrangements or orders
entered into on or prior to the Closing Date by or on behalf of the Vendors
and/or the Partnership for the supply or sale of goods or services to the
Partnership in connection with the Business which at the Closing Date
remain to be performed in whole or in part including, but not limited to,
all those contracts particulars of which are set out in Schedule 3;
"Tax" or "Taxation" means all forms of taxation, charges, duties, imposts,
levies and rates whenever imposed and whether of the United Kingdom or
elsewhere and whether chargeable directly or primarily against or
attributable directly or primarily to the company or to any other person,
including without limitation income tax (including income tax or amounts
equivalent to or in respect of income tax required to be
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deducted or withheld from or accounted for in respect of any payment),
withholding taxes, corporation tax, advance corporation tax (including
amounts corresponding to or representing advance corporation tax), capital
gains tax, capital transfer tax, inheritance tax, rates, uniform business
rates, water rates, value added tax, custom duties, capital duty, excise
duties, betterment levy, community charges, insurance premium tax, landfill
tax, stamp duty, stamp duty reserve tax, national insurance, social
security or other similar contributions, and generally any tax, duty,
impost, levy or rate or other amount and any interest, penalty or fine in
connection therewith;
"Third Revenue Measurement Period" means the period from the date of the
second anniversary of Closing to the date of the third anniversary of
Closing;
"Third Year Earn Out Calculations" mans the calculations relating to EBITDA
and Gross Profit for the Third Revenue Measurement Period determined in
accordance with Schedule 16,
"Transfer Regulations" means the Transfer of Undertakings (Protection of
Employment) Regulations 1981 (as amended);
"Transferring Employees" means the persons employed by the Vendors and/or
the Partnership in the Business at the date of this agreement (whose names
and addresses are set out in Schedule 13 together with certain particulars
of their respective employments);
"Transferring Motor Vehicles" means those motor vehicles details of which
are set out in Part A of Schedule 9;
"US$" means the lawful currency of the United States of America;
"U.S. Person" means any of the following: (i) any natural person resident
in the United States; (ii) any partnership or corporation organized or
incorporated under the laws of the United States; (iii) any estate of which
any executor or administrator is a U.S. Person; (iv) any trust of which any
trustee is a U.S. Person; (v) any agency or branch of a foreign entity
located in the United States; (vi) any non-discretionary account or similar
account (other than an estate or trust) held by a dealer or other fiduciary
for the benefit or account of a U.S. Person; (vii) any discretionary
account or similar account (other than an estate or trust) held by a dealer
or other fiduciary organized, incorporated or (if an individual) resident
in the United States; and (viii) any partnership or corporation if: (A)
organized or incorporated under the laws of any foreign jurisdiction; and
(B) formed by a U.S. Person principally for the purpose of investing in
securities not registered under the Securities Act, unless it is organized
or incorporated, and owned, by accredited investors (as defined in Rule
501(a) under the Securities Act) who are not natural persons, estates or
trusts;
"United States" as used in clause 18 includes the territories and
possessions of the United States, any State of the United States and the
District of Columbia;
"VAT" means Value Added Tax chargeable under the Value Added Tax Xxx 0000
(the "VAT Act") or under any legislation replacing the same or under any
legislation which the VAT Act replaced and shall further mean Value Added
Tax at the rate in force when the relevant supply is made and any tax of a
similar nature which is introduced in substitution for or as an addition to
such tax from time to time and any penalties or fines in relation thereto;
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"Vendors' Pension Scheme" means the Group Pension Plan operated for
employees of the Business and insured with National Provident Institution;
"Vendors' Solicitors" means Xxxxxxx Xxxxxxx of Xxxxxxx Xxxxx, 0 Xxxxxx Xxx,
Xxxxxxxxxx X0 0XX;
"Warranties" means the warranties and representations set out in Schedules
12 and clauses 10 and 19;
"Web Site" means the web sites operated by the Vendor in connection with
the Business on the internet and accessible at xxx.xxxxx-xxxxxxxx.xx.xx and
xxx.xxxxx.xx.xx ; and
"Work in Progress" means the work in progress in connection with the
Business Contracts as at the Closing Date.
1.2 In this agreement and the recitals and the Schedules:
(a) reference to any statute or statutory provision includes a reference
to that statute or statutory provision as amended, extended or
re-enacted and to any regulation, order, instrument or subordinate
legislation under the relevant statute or statutory provision;
(b) reference to the singular includes a reference to the plural and vice
versa;
(c) reference to any recital, clause or Schedule is to a recital, clause
or Schedule (as the case may be) of or to this agreement and a
reference to this agreement includes a reference to the Schedules;
(d) reference to any gender includes a reference to all other genders;
(e) references to persons include bodies corporate, unincorporated
associations and partnerships and any reference to any party who is an
individual is also deemed to include their respective legal personal
representative(s);
(f) references to documents "in the agreed form" are to documents in the
form of the draft agreed between the parties on or prior to today's
date and initialled by either the parties or the Vendors' Solicitors
and the Purchaser's Solicitors for the purposes of identification;
(g) references to the Vendor include (where the context admits) each of
the Vendors; and
(h) references to the wording "includes" or "including" shall mean without
limitation.
2. Agreement to sell and purchase
2.1 Subject to clause 13 and Schedule 10 the Vendors shall sell and transfer or
procure the sale and transfer (which expression shall where appropriate
include an assignment) with full title guarantee and the Purchaser (relying
on the Warranties, representations and undertakings in this agreement)
shall purchase with effect from the Closing Date the Business as a going
concern and the following assets:
(a) the benefit (subject to the burden) of the Business Contracts;
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(b) the Business Intellectual Property;
(c) the Computer System;
(d) the Vendors' rights over the Customer Cash (if any);
(e) the Equipment;
(f) the Fixed Assets;
(g) the Goodwill;
(h) the Transferring Motor Vehicles;
(i) the Vendors' leasehold interests in the Premises;
(j) the Records;
(k) the Work in Progress;
(l) all the Vendors' rights in connection with the Business against third
parties including all rights, claims, credits, causes of action or
rights of set-off whether liquidated or unliquidated, fixed or
contingent and all rights under any warranties, conditions, guarantees
or indemnities or under the Sale of Goods Xxx 0000 relating to any of
the Assets and the benefit of all sums to which the Vendor is entitled
from third parties or insurers in respect of damage to the Assets; and
(m) all (if any) other assets, property or rights of the Vendors relating
to or connected with or belonging to or required for or used in the
Business or in or on the Premises and which are not described in the
above paragraphs of clause 2.1 but excluding the Retained Assets.
2.2 All the Assets shall be sold free of all options, liens, charges, claims,
equities and Encumbrances and together with the benefit of all rights and
advantages belonging to or accruing on the Assets as at and from the
Closing Date.
2.3 Subject to clause 13 and Schedule 10 title to and risk in each of the
Assets will pass to the Purchaser on Closing.
2.4 Subject to the Purchaser's rights under clause 9.2 and subject also to
clause 13 and Schedule 10, the sale and purchase of each of the Assets is
interdependent and shall be completed simultaneously.
2.5 Subject to clause 13 and Schedule 10 at Closing the Purchaser shall be
deemed to have assumed responsibility for the Creditors and other Assumed
Liabilities and shall discharge its obligations relating thereto in
accordance with the provisions of clause 17.11.
3. Retained Assets
The following Retained Assets are expressly excluded from the sale and
purchase of the Business and the Assets:
(a) the Excluded Contracts;
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(b) all the Vendors' cash in hand or at a bank or at any other financial
institution other than Customer Cash as at the Closing Date;
(c) any amount due or recoverable in respect of Tax relating to the
Business attributable to periods or transactions completed before
the Closing Date;
(d) the Receivables;
(e) the Vendors' leasehold interests in
(i) Xxxx 0 Xxxxxxxxxx Xxxxxxxxxx Xxxx (formerly known as Unit 4):
and
(ii) the Excluded Premises;
(f) debentures relating to the Rugby Football Union in the name of any
of the Vendors and/or the Partnership;
(g) any interest of the Vendors in Xxxxxxxx Xxxxx, 00 Xxxxxx Xxxxxx,
Xxxxxxxxxx; and
(h) the Retained Motor Vehicles
4. Liabilities
4.1 Other than as expressly set out in this agreement, no Liability, shall pass
to the Purchaser, or shall be construed as having been accepted by the
Purchaser.
4.2 The Assumed Liabilities are the Vendors' liabilities and obligations under
or in respect of:
4.2.1 all the Customer Cash deposits, if any, to the extent delivered to
the Purchaser at the Closing Date;
4.2.2 the accrued rights as at the Closing Date of the Transferring
Employees in relation to compensation and in relation to holiday
entitlement;
4.2.3 VAT in respect of carrying on the Business for the VAT period(s)
from 30 April 2001 to Closing Date, but not any amount
exceeding (Pounds)90,000;
4.2.4 the liability of the Vendors in respect of income tax and national
insurance contributions under PAYE in respect of the Transferring
Employees for the period from 30 April 2001 to Closing Date, but not
any amount exceeding (Pounds)55,000; and
4.2.5 the Creditors;
4.2.6 but excluding any liabilities which are expressly stated to be
Retained Liabilities.
4.3 The Vendors shall remain liable for and shall pay, perform and discharge
all of the Retained Liabilities. The Retained Liabilities are all
Liabilities of the Vendors in relation to the Business other than the
Assumed Liabilities. Further and without limitation, the Retained
Liabilities shall include the Vendors' Liabilities and obligations now or
hereafter arising under or in respect of:
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4.3.1 Taxation other than VAT and PAYE as provided in clause 4.2.2 and
4.2.3;
4.3.2 any Business Contract which cannot be effectively and fully assigned
to the Purchaser at Closing (including without limitation as regards
all related guarantees and other security);
4.3.4 any of the Retained Assets;
4.3.5 any claims or legal, administrative or arbitration proceedings of
any nature by third parties (whether made or commenced before or
after the Closing Date) in relation to the conduct of the Business
prior to the Closing Date, whether any such claims arise or arose
before, on or after the Closing Date or otherwise;
4.3.6 this agreement;
4.3.7 the negotiation, preparation and execution of this agreement;
4.3.8 any indebtedness for money borrowed, including (without limitation)
indebtedness secured by any of the Assets or any liability or
obligation arising from being a guarantor, indemnifier, surety or
accommodation party of any other person;
4.3.9 any Environmental Liability;
4.3.10 any liability relating to a claim by Elderstreet Xxxxxxx VCT plc or
any other party concerning the valuation of assets of Rushden
Playsafe Limited by the Vendors and/or the Partnership;
4.3.11 any liability relating to the Retained Motor Vehicles; and
4.3.12 any contingent liability.
4.4 On becoming aware of any such claim or proceedings as referred to in clause
4.3.5 the Vendor shall promptly give notice of it to the Purchaser and
shall not take any steps which would damage or could be reasonably expected
to damage the commercial interests of the Purchaser without the prior
written consent of the Purchaser.
4.5 The Purchaser shall with effect from Closing undertake to assume, perform
and discharge the Assumed Liabilities.
4.6 The Purchaser shall indemnify the Vendor in respect of any Losses incurred
or suffered by the Vendor in relation to the Assumed Liabilities.
4.7 The Vendor shall indemnify the Purchaser in respect of any Losses incurred
or suffered by the Purchaser in relation to the Retained Liabilities.
4.8 If following agreement or determination of the Final Closing Balance Sheet
there is any doubt as to whether a liability or obligation is an Assumed
Liability, it shall only be so to the extent that provision was made for it
in the Draft Closing Balance Sheet.
5. Consideration
5.1 The Initial Consideration shall be US$7,395,322, as adjusted pursuant to
clause 6, and shall be satisfied by the Purchaser at Closing by:-
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(a) payment by the Purchaser of the sum of US$4,176,960 by electronic
transfer to the account of the Vendors' Solicitors at Bank of
Scotland plc, 00 Xxxxx Xxxx, Xxxxxxxxx XX0 0XX, sort code 12-08-81,
account number 00000000; and
(b) the issue and delivery to the Vendors of 401,793 shares of DoveBid
Common Stock credited as fully paid up rounded down to the nearest
whole share (without any payment of fractional shares).
5.2 The Initial Consideration shall be apportioned between the Assets as
set out in Schedule 17.
5.3 The Vendors shall be entitled to the Initial Consideration and the
DoveBid Common Stock in the Applicable Proportions set out in Schedule
1.
6. Closing Balance Sheet and Adjustments
6.1 The Draft Closing Balance Sheet is set out in Schedule 15.
6.2 The Purchaser shall procure the preparation of the Final Closing
Balance Sheet in accordance with the accounting policies, principles
and practices applied for the purposes of the Accounts and deliver to
the Vendors the Final Closing Balance Sheet within one year of the
Closing Date.
6.3 The Vendors shall review the Final Closing Balance Sheet delivered by
the Purchaser under clause 6.2 and shall within 14 days of its receipt
deliver to the Purchaser a report setting out any matters of
disagreement. In the absence of the Vendors delivering a report to the
Purchaser within that period, the Final Closing Balance Sheet shall be
deemed to be agreed by the parties.
6.4 If, within 14 days of the delivery to the Purchasers of the report
referred to in clause 6.3, there remains an outstanding dispute with
respect to the Final Closing Balance Sheet, any party may refer the
dispute to a firm of independent chartered accountants, nominated
jointly by the Vendors and the Purchaser or, failing nomination within
seven days after request by either the Vendors or the Purchaser,
nominated at the request of either party by the president of the
Institute of Chartered Accountants in England and Wales. The firm shall
be instructed to prepare as soon as practicable (and in any event
within 21 days of their nomination) a determination of the Final
Closing Balance Sheet and report referred to above (and without
re-opening any matters which are agreed as between the Vendors and the
Purchaser). The firm shall act as experts and not as arbitrators and
their decision (in the absence of manifest error) shall be final and
binding on the parties. Their fees shall be payable by the Vendors
and/or the Purchaser in such proportions as the firm shall in their
absolute discretion determine (and the Purchaser shall be entitled to
deduct the fees from any payment to be made by the Purchaser to the
Vendors under this agreement).
6.5 Each of parties shall (and shall use their best endeavours to procure
that their respective auditors shall) give all reasonable assistance to
the other and their representatives in connection with the production
and review of the Final Closing Balance Sheet under this clause 6,
including by making available all applicable books, records, working
papers and personnel.
6.6 If the amount of the Net Assets set out in the Final Closing Balance
Sheet (as agreed or determined by this clause 6) is less than negative
three thousand pounds sterling (Pounds)(3,000), the Vendors shall pay
in cash to the Purchaser within 14 days of the
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agreement or determination of the Final Closing Balance Sheet the
shortfall of the Net Assets on a pound for pound basis.
6.7 If the amount of the Net Current Assets set out in the Final Closing
Balance Sheet (as agreed or determined by this clause 6) is less than
negative two hundred and six thousand pounds sterling
(Pounds)(206,000), the Vendors shall pay in cash to the Purchaser
within 14 days of the agreement or determination of the Final Closing
Balance Sheet the amount of the shortfall of the Net Current Assets on
a pound for pound basis.
6.8 If the amount received by the Purchaser in relation to each of the
Pending Invoices is less than the amount of each invoice listed in
Schedule 19, the Vendors shall pay in cash to the Purchaser within 60
days of the Closing Date the shortfall on a pound for pound basis.
7. Deferred Consideration
7.1 The Deferred Consideration shall comprise the following further cash
payments made by the Purchaser to the Vendors, in the Applicable
Proportions, in the amounts and on the dates set out below, subject to
Xxxxx Xxxxx being in the employment of the Purchaser on the relevant
date that a payment is due (unless such employment is terminated by a
Relevant Dismissal) together with any further amounts paid pursuant to
clause 7.2 and clause 7.6 below:
(a) US$500,000, payable on the first anniversary of Closing;
(b) US$500,000, payable on the second anniversary of Closing; and
(c) US$500,000 payable on the third anniversary of Closing.
7.2 Subject in each case below to clause 7.3 and to Xxxxx Xxxxx remaining
in the employment of the Purchaser for the whole of the applicable
relevant measurement period (unless such employment is terminated by a
Relevant Dismissal) and on the date in which any payment below is
payable, the Purchaser shall:
7.2.1 within five Business Days of the First Year Earn Out
Calculations being agreed or otherwise determined in accordance
with Schedule 16, if:-
(A) each of the First Year Earn Out Calculations relating to
EBITDA is equal to or greater than the 115% of the EBITDA
Base Level and the First Year Earn Out Calculation relating
to Gross Profit is greater than or equal to 115% of the
Gross Profit Base Level (the "First Year Major Targets"),
pay to those Vendors who remain in the employment of the
Purchaser on such date their Applicable Proportion of
US$500,000;
(B) each of the First Year Earn Out Calculations do not equal
or exceed the First Year Major Targets set out in clause
7.2.1(A), but each of the First Year Earn Out Calculation
relating to EBITA is greater than or equal to 110% of the
EBITDA Base Level and the First Year Earn Out Calculation
relating to Gross Profit is greater than or equal to 110%
of the Gross Profit Base Level (the "First Year Minor
Targets"), pay to those Vendors who remain in the
employment of the Purchaser on such date their Applicable
Proportion of US$250,000;
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(C) either of the First Year Earn Out Calculations does not
exceed or equal each of the First Year Minor Targets set
out in clause 7.2.1(B), not make any payment to the
Vendors; and
7.2.2 within five Business Days of the Second Year Earn Out
Calculations being agreed or otherwise determined in accordance
with Schedule 16, if:-
(A) each of the Second Year Earn Out Calculations are equal to
or greater than 115% of each of the First Year Major
Targets set out in clause 7.2.1(A) or equal to or greater
than 115% of each of the First Year Earn Out Calculations,
(whichever is the greater) (the "Second Year Major
Targets"), pay to those Vendors who remain in the
employment of the Purchaser on such date their Applicable
Proportion of US$500,000; or
(B) each of the Second Year Earn Out Calculations does not
equal or exceed the Second Year Major Targets set out in
clause 7.2.2(A), but each of the Second Year Earn Out
Calculations is equal to or greater than 110% of each of
the First Year Major Targets set out in clause 7.2.1(A) or
equal to or greater than 110% of each of the First Year
Earn Out Calculations (whichever is the greater) (the
"Second Year Minor Targets"), pay those Vendors who remain
in the employment of the Purchaser on such date their
Applicable Proportion of US$250,000; or
(C) either of the Second Year Earn Out Calculations does not
exceed or equal each of the Second Year Minor Targets set
out in clause 7.2.2(B), not make any payment to the
Vendors.
7.2.3 within five Business Days of the Third Year Earn Out
Calculations being agreed or otherwise determined in
accordance with Schedule 16, if:-
(A) each of the Third Year Earn Out Calculations is equal to or
greater that 115% of each of the Second Year Major Targets
set out in clause 7.2.2(A) or equal to or greater than 115%
of each of the Second Year Earn Out Calculations (whichever
is the greater) (the "Third Year Major Targets"), pay those
Vendors who remain in the employment of the Purchaser on
such date their Applicable Proportion of US$500,000; or
(B) each of the Third Year Earn Out Calculations does not equal
or exceed the Third Tear Major Targets set out in clause
7.2.3(A), but each of the Third Year Earn Out Calculations
is equal to or greater than 110% of each of the Second Year
Major Targets set out in clause 7.2.2(A) or equal to or
greater than 110% of each of the Second Year Earn Out
Calculations (whichever is the greater) (the "Third Year
Minor Targets"), pay those Vendors who remain in the
employment of the purchaser their Applicable Proportion of
US$250,000; or
(C) either of the Third Year Earn Out Calculations does not
exceed or equal each of the Third Year Minor Targets set
out in clause 7.2.3(B), not make any payment to the
Vendors.
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7.3 The Earn Out Calculations shall in each case be such amounts as are
agreed or determined in accordance with the provisions of Schedule 16
calculated in US Dollars using an exchange rate of 1.4635 US Dollars to
each one British Pound.
7.4 Subject to clause 7.5, in the event that any Vendor is not entitled to
receive a share of any payment made pursuant to this clause 7.2 by
virtue of cessation of his employment, the remaining Vendors shall not
be entitled to receive payment of such sum in his place.
7.5 In the event of the death of Xxxxx Xxxxx during any applicable revenue
measurement period, 50 % of any payment that is due to Xxxxx Xxxxx
under clause 7.2 (if he were to be alive) shall be payable to the
remainder of the Vendors in equal proportions provided that each
remaining Vendor who receives payment under this clause 7.5 is employed
by the Purchaser on the date on which such payment to Xxxxx Xxxxx would
have been payable.
7.6 In addition to the cash payments set out in clause 7.1 and payments to
be determined in accordance with clause 7.2, the Deferred Consideration
shall also comprise the following cash payments by the Purchaser to the
Vendors, in the Applicable Proportions, in the amounts and on the dates
set out below:
(a) in relation to any initial first phase fee paid by or on behalf of
Opus Land Limited or its affiliate to the Purchaser within 3 months
of the Closing Date for work conducted by the Partnership and/or
the Purchaser under file no: A0985F relating to the acquisition of
the site known as Xxxxxx Xxxx, the Purchaser shall pay to those
Vendors who remain in the employment of the Purchaser at the time
of such payment in the Applicable Proportion, 80% of any initial
first phase fee received from Opus Land Limited within 30 Business
Days of receipt; and
(b) in relation to any initial first phase fee paid by or on behalf of
IMI plc or its affiliate to the Purchaser within 9 months of the
Closing Date for work conducted by the Partnership and/or the
Purchaser under file no: 98/373F relating to the site known as
Aston, Birmingham, the Purchaser shall pay to those Vendors who
remain in the employment of the Purchaser at the time of such
payment in the Applicable Proportion, 60% of any initial first
phase fee received from IMI plc within 30 Business Days of receipt.
7.7 If prior to settlement of any amount of the Deferred Consideration, the
Purchaser makes any claim under the Warranties or any indemnity in this
agreement then the Purchaser may set-off the amount(s) agreed or
determined by the courts to be due in respect of such claim (but not
any other amount) in or towards satisfaction of any such claim(s)
against the Deferred Consideration but any such set-off made by the
Purchaser shall in no way prejudice the rights and remedies of the
Purchaser for the purpose of recovering any amount due from the Vendors
save to the extent of the amount of such set-off. If prior to
settlement of any amount of the Deferred Consideration a Vendor has
received any advance payment of bonus under his Service Agreement which
is not subsequently earned in the relevant financial year, the
Purchaser may set-off the amount(s) of such unearned but paid bonus
against the Deferred Consideration.
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8. Value Added Tax
8.1 It is intended that the Business shall be transferred to the Purchaser
as a going concern for VAT purposes and that the provisions of Article
5 of the Value Added Tax (Special Provisions) Order 1995 (SI 1995/1268)
shall apply to such transfer and the sale and purchase of the Assets
and each party shall use its reasonable endeavours to procure that the
sale of the Business and the Assets is treated as neither a supply of
goods nor a supply of services under that article.
8.2 The Vendors and the Purchaser shall if and to the extent required by
law give notice of such transfer to the appropriate office of H.M.
Commissioners of Customs and Excise in the agreed form.
8.3 The Purchaser undertakes to the Vendors that:
(a) after Closing the Business will be carried on by it as a going
concern and the Assets will be used by it in carrying on the
Business or a business of the same kind; and
(b) the Purchaser is already or will as a result of such transfer of
the Business immediately on Closing become a taxable person (as
defined in section 3 of the Value Added Tax Act 1994).
8.4 The Consideration is exclusive of VAT and in the event that H.M.
Commissioners of Customs and Excise determine that any VAT is payable
on the sale of the Business or the Assets, following receipt of a valid
VAT invoice, the Purchaser shall pay to the Vendors an amount equal to
the VAT payable either five Business Days prior to the date on which
the Partnership is due to account for the same to H.M. Commissioners of
Customs and Excise or, if later, five Business Days following the
receipt of the tax invoice.
8.5 VAT payable in respect of goods and services supplied or deemed to be
supplied by the Partnership prior to the Closing Date and all interest
payable and penalties attributable to such VAT shall be paid to H.M.
Commissioners of Customs and Excise by the Vendors.
8.6 The Vendors and the Purchaser intend that section 49 of the Value Added
Tax Act 1994 shall apply to the transfer of the Business under this
agreement and accordingly:
(a) on Closing the Vendors shall deliver to the Purchaser all records
referred to in such section 49;
(b) the Vendors shall not make any request to H M Customs & Excise for
the records referred to in clause 8.6(a) to be preserved by the
Vendor rather than the Purchaser; and
(c) the Purchaser shall preserve the records referred to in clause
8.6(a) for such period as may be required by law and during that
period permit the Vendors reasonable access on prior notice and
during working hours to such records for the purpose of inspection
or copying (at the Vendors' expense).
8.7 If Part XV of the Value Added Tax Regulations 1995 (SI 1995/2518) is
applicable to any of the Assets the parties agree that, as against the
Vendors, the Purchaser shall take the benefit of, and the Vendors agree
to indemnify the Purchaser against the burden of, any deductions and
payments under such Part XV which relate to intervals subsequent
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to that ending under regulation 114 of such Part XV on the day of the
transfer of the relevant asset under this agreement, and accordingly:
(a) the Vendors shall promptly account to the Purchaser for any such
deduction received by it (whether by payment or credit) from H M
Customs & Excise;
(b) the Vendors agree to fully indemnify and keep indemnified the
Purchaser in respect of any such payment due to H M Customs &
Excise; and
(c) the Vendors shall, on request (and at the Vendor's cost (if any)),
promptly make available to the Purchaser information, and allow the
Purchaser reasonable access to any documents in the Vendors'
possession or control, reasonably required to establish whether and
when a deduction arises and the amount of such deduction or any
payment.
8.8 The Vendors agree to fully indemnify and keep indemnified the Purchaser
(for itself and as trustee for all other persons allocated with the
registration number previously allocated to the Vendors) in respect of
any VAT payable in relation to goods and services supplied or deemed to
be supplied prior to the Closing Date and all interest payable and
penalties attributable to such VAT.
9. Closing
9.1 Subject to clause 13 and Schedule 10 Closing will take place in
accordance with the provisions of this clause 9 at the offices of the
Purchaser's Solicitors (or at such other place as the parties may
agree) on the Closing Date.
9.2 If on the Closing Date the Vendors fail or have failed to comply in any
respect with the provisions of clauses 9.3 or 9.4 or of clauses 10 or
11 the Purchaser may:
(a) proceed to Closing so far as practicable but without prejudice to
its rights hereunder; or
(b) rescind this agreement.
9.3 On Closing the Vendors shall deliver to or procure delivery to the
Purchaser of:
(a) physical possession of all the Assets capable of passing by
delivery and title and risk in such Assets shall pass by and upon
such delivery;
(b) duly executed conveyances, transfers, assignments and other
documents in the agreed form necessary to vest title in the
Premises in the Purchaser or as the Purchaser shall direct;
(c) the Leases relating to the Premises and all invoices, policies,
premiums receipts, maintenance contracts and other documents and
accounts relating to the Premises;
(d) duly executed agreements in the agreed form for the assignment or
novation of the benefit of the Business Contracts to the Purchaser,
or as the Purchaser shall direct, and all requisite consents and
licences therefor;
(e) duly executed assignments in the agreed form to vest the Goodwill
in the Purchaser or as the Purchaser shall direct;
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(f) duly executed assignments and licences in the agreed form of the
Business Intellectual Property;
(g) all documents of title, certificates, deeds, licences, agreements
and other documents relating to the Business Intellectual Property
in the Vendors' possession or control or which should be in the
Vendors' possession or control and all manuals, drawings, plans,
documents and other materials and media on which the Business
Confidential Information is recorded;
(h) the registration documents, logbooks and test certificates of the
Transferring Motor Vehicles;
(i) the originals of the Business Contracts and all documents and
agreements in the Vendors' possession or control or which should
be in the Vendors' possession or control (including documents of
title and certificates for lawful operation and use and all
service documents) relating to the Assets referred to in clause
9.3(a), where relevant, duly written up to the Closing Date;
(j) releases duly executed by the chargee in a form acceptable to the
Purchaser in respect of all Security Interests on or affecting any
of the Assets;
(k) the Records;
(l) all National Insurance and PAYE records fully completed in respect
of the Transferring Employees and showing that payments are up to
date;
(m) a written acknowledgement executed as a deed from the Vendors
that all financial and other arrangements to which any of the
Vendors is a party and which affect the Business or Assets have
been cancelled by mutual agreement and without any compensation or
damages being payable by either party to the other;
(n) the duly executed Disclosure Letter;
(o) service agreements in the agreed form duly executed by each of the
Vendors; and
(p) a representation letter in the agreed form from each of the
Vendors completed and duly executed in favour of DoveBid.
9.4 The Vendors shall give the Purchaser vacant possession of the Premises
on Closing.
9.5 The Vendors shall give the required notice to The Royal Institution of
Chartered Surveyors of the transfer of the Business and the change of
name of the Business pursuant to the terms of this agreement.
9.6 On Closing and against compliance by the Vendors with their obligations
under clauses 9.3 and 9.4 the Purchaser shall:
(a) satisfy the Initial Consideration in accordance with clause 5.1;
(b) deliver to the Vendors counterparts of the documents referred to
in clauses 9.3(d) to (g) duly executed by the Purchaser; and
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(c) deliver to the Vendors a copy of the minutes of a meeting of the
directors of the Purchaser in the agreed form approving and
authorising the execution by the Purchaser of this agreement and
of any other documentation referred to in this agreement or that
may be necessary or desirable arising out of or in connection
with this agreement or the transaction contemplated thereby and
appointing the relevant signatory or signatories to sign this
agreement and any such other documentation on its behalf endorsed
with a certificate by the company secretary of the Purchaser that
such copy minutes are a true and accurate record of the relevant
meeting and that the authority conferred remains valid and
outstanding as at Closing.
9.7 On Closing and against compliance by the Vendors with their obligations
under clauses 9.3 and 9.4 DoveBid shall:
(a) allot and issue the shares referred to in clause 5.1 to the Vendor
in the Applicable Proportions credited as fully paid up; and
(b) deliver to the Vendors duly executed share certificates for such
shares.
10. Warranties
10.1 In consideration of the Purchaser entering into this agreement at the
request of the Vendors, the Vendors hereby warrant to the Purchaser in
the knowledge that the Purchaser relies upon the accuracy of each of
the Warranties in entering into this agreement and that they form the
basis of this agreement, that (subject only to the limitations
contained in clause 12) the Warranties are at the date of this
agreement be true and accurate in all respects.
10.2 The benefit of the Warranties may be assigned upon notification in
writing to each of the Vendors in whole or in part and without
restriction by the person for the time being entitled to them.
10.3 Each of the Warranties shall be construed as a separate and independent
warranty and (save where expressly provided to the contrary) shall not
be governed, limited or restricted by reference to or inference from
any other terms of this agreement or any other Warranty.
10.4 Any payments made by the Vendors to the Purchaser in respect of claims
under the Warranties shall be treated by the parties as a reduction in
the Consideration.
10.5 Where any of the Warranties is qualified by the expression "so far as
the Vendors are aware" or any similar expression, the Vendors shall be
deemed to have such awareness as the Vendors would have after having
made all due, diligent and careful enquiry.
10.6 It shall not be a defence to any claim under the Warranties that the
Purchaser ought to have known about the matter which is the subject of
the claim by reason of any investigation or enquiry carried out by the
Purchaser or its professional advisors prior to Closing, and the
Purchaser shall only be treated as being aware of any fact or
information Disclosed and the rights and remedies of the Purchaser in
respect of any breach of this agreement shall not be affected by any
investigation made by or on behalf of the Purchaser into the Business
and Assets nor by any other event or matter whatsoever, except a
specific and duly authorised written waiver or release given by the
Purchaser.
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10.7 The Purchaser confirms that, at the date of this agreement, it is not
aware of any circumstances that it has recognised will give rise to a
claim under the Warranties.
10.8 The Vendors hereby agree with the Purchaser to waive any right which
they may have in respect of any misrepresentation, inaccuracy or
omission in or from any information or advice supplied or given by any
of the Transferring Employees in enabling the Vendors to give the
Warranties, to prepare the Disclosure Letter and to enter into this
agreement.
10.9 In the event that the Purchaser shall recover any amount from any
person in respect of any matter giving rise to a claim under the
Warranties, the amount of the claim under the Warranties shall be
reduced by the amount so recovered less all reasonable costs, charges
and expenses properly incurred by the Purchaser in recovering that sum
from such other person.
10.10 The Purchaser shall provide the Vendors with all reasonable assistance
and information reasonably required by the Vendors in any circumstances
where the Vendors take any action, institute any proceedings, seek to
enforce any contract, or make any claim against a third party in
relation to any matter which may give rise to a claim under the
Warranties.
11. Purchaser's remedies
11.1 If there shall be a breach of any of the Warranties or if any Warranty
is untrue or inaccurate in any respect then, without prejudice to the
right of the Purchaser to claim damages on any basis available to it or
to any other rights or remedy available to the Purchaser, the Vendors
agree to indemnify the Purchaser in respect of all Losses suffered or
incurred by the Purchaser or any member of the Purchaser Group as a
result of such breach of Warranty or of any such Warranty being untrue
or inaccurate.
11.2 All sums payable by the Vendors to the Purchaser for breach of any of
the Warranties shall be paid free and clear of all deductions or
withholdings whatsoever, save only as may be required by law.
11.3 If any deduction or withholding in respect of Tax or otherwise is
required by law to be made from any of the sums payable as mentioned in
clause 11.2, the Vendors shall be obliged to pay to the Purchaser such
greater sum as will, after such deduction or withholding as is required
to be made has been made, so as to leave the Purchaser with the same
amount as it would have been entitled to receive in the absence of any
such requirement to make a deduction or withholding less any tax credit
or other benefit to the Purchase arising from such deduction or
withholding.
11.4 If any sum (the "first sum") payable by the Vendor to the Purchaser as
mentioned in clause 11.2 shall be subject to Tax in the hands of the
Purchaser then the Vendors shall pay to the Purchaser (as often as
shall be necessary) such additional sum or sums as will after such Tax
(and any Tax on such additional sums or sums) leave the Purchaser with
an amount equal to the first sum.
12. Limitations to the Warranties
Fraud
12.1 Notwithstanding any other provision of this agreement, no limitations
of any kind whatsoever (including, without prejudice to the generality,
the limitations provided in this clause on making claims within
particular time periods or limiting claims or
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aggregates of claims to any particular sums of money) shall apply to
any claim under this agreement against the Vendors when it can be
proved that such claim is based on any dishonest or fraudulent act or
dishonest or fraudulent omission, concealment or misrepresentation of,
or by, the Vendors prior to Closing.
Time limits
12.2 Save in respect of the Warranties contained in part A Schedule 12 which
shall not be subject to any time limits, the rights of the Purchaser in
respect of any breach or non-fulfilment of any of the Warranties (other
than the Warranties contained in part E of Schedule 12) shall only be
enforceable if notice in writing (giving in so far as may then be
practicable the amount and details of the claim) shall be given to the
Vendor on or before the expiry of a period of two years from Closing.
12.3 The rights of the Purchaser in respect of any breach or non-fulfilment
of any of the Warranties contained in part E of Schedule 12 shall only
be enforceable if notice in writing (giving insofar as may then be
practicable the amount and details of the claim) shall be given to the
Vendors on or before the expiry of a period of seven years from
Closing.
Basket
12.4 Save in respect of the Warranties contained in part A of Schedule 12
which shall not be subject to any de minimis limits, the Vendors shall
not be liable in respect of any claim under the Warranties unless and
to the extent that the aggregate cumulative liability of the Vendors in
respect of all such claims exceeds (Pounds)50,000, and in such event
the Vendors shall be liable for the whole of such liability and not
merely for the excess of such liability over (Pounds)50,000.
Maximum claims
12.5 Save in respect of the Warranties contained in part A of Schedule 12,
which shall not be subject to any cap, the Purchaser shall not be
entitled to recover from any of the Vendors under the Warranties any
sum in excess of the Consideration passing under this agreement
together with the amount of any interest and costs in respect of such
recovery.
12.6 Without prejudice to clause 12.5, the liability of each of the Vendors
in respect of any claim under the Warranties shall be limited to the
proportion of the aggregate amount of such claim which is equal to his
Applicable Proportion.
12.7 The Vendors shall have no liability in respect of any breach of the
Warranties to the extent that:-
12.7.1 such breach or claim occurs as a result of any legislation not
in force at the Closing Date which takes effect
retrospectively or occurs or is increased as a result of any
increase in the rates of taxation after the Closing Date;
12.7.2 such breach or claim would not have arisen but for any
voluntary act, omission, transaction or arrangement after the
Closing Date by the Purchaser otherwise than in the ordinary
course of business and which the Purchaser knew or ought
reasonably to have known could give rise to a claim under the
Warranties;
12.7.3 such claim arises only as a result of any changes after the
Closing Date in the accounting bases policies or methods used
by the Purchaser in accounting for
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the Business, so long as the change is not reasonably required in
order to bring such bases, policies or methods into conformity
with generally accepted accounting principles or to correct
errors, inaccuracies or misstatements in the accounts or records
of the Business.
12.8 The Purchaser acknowledges to and agrees with the Vendors that it has
not entered into this agreement in reliance upon any representations,
warranties or undertakings other than the Warranties and any
indemnities given by the Vendors in this agreement.
12.9 Nothing contained in this agreement shall diminish the Purchaser's
common law obligation to mitigate its loss.
Third Party Rights
12.10 No term of this agreement is enforceable under the Contracts (Rights of
Third Parties) Xxx 0000 by a person who is not a party to this
agreement.
Disclosure Letter
12.11 The Vendors shall be under no liability under the Warranties in respect
of any matter Disclosed.
13. The Premises
13.1 The Premises are sold subject to the conditions and other provisions
set out in Part D of Schedule 10.
13.2 Subject to obtaining any mortgagee's consent required to the same,
which the Vendors shall take all reasonable steps to obtain as soon as
reasonably practicable, the Vendors agree to lease Xxxx 0 Xxxxxxxxxx
Xxxxxxxxxx Xxxx ("Unit 8") to the Purchaser subject to:
(a) such terms as they shall jointly agree both acting in good faith
PROVIDED THAT such terms shall be those which are fair and
reasonable in the open market;
(b) the Purchaser, acting reasonably, being satisfied that the Vendors
have a good and marketable title to Xxxx 0 free from adverse
encumbrances, third party interests of whatsoever nature,
restrictive covenants, leases to any third party and any other
adverse matters; and
(c) the Purchaser receiving results to its usual pre-contract searches
and enquiries which are satisfactory to it (acting reasonably)
including without limitation those relating to planning.
13.3 If either the said mortgagee's consent has not been granted or if the
parties have not completed the said lease within 6 months of the date
of this agreement then in either case either party may serve written
notice upon the other terminating their obligations under this clause
13.2 and 13.5 but without prejudice to any antecedent breach by either
party.
13.4 Until the earlier of:
(a) the date the Purchaser leases or takes some other interest in an
alternative warehouse property to Unit 8 upon terms satisfactory
to the Purchaser;
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(b) the date the Purchaser is prevented from occupying or is no longer
permitted to occupy Unit 8; or
(c) the date of termination in accordance with clause 13.4 (vii);
the Purchaser may occupy Unit 8 from the Closing Date as licensee of
the Vendors and the Vendors shall hold Unit 8 upon trust for the
Purchaser subject to the following provisions:
(i) notwithstanding the capacity of the Purchaser as licensee
of the Vendors in respect of its occupation of Unit 8 the
Purchaser may carry on business at Unit 8 for its own
account;
(ii) for the period of its occupation only the Purchaser shall
be responsible for and comply with the lessee's covenants
and conditions contained in the Vendors' Lease of the
Premises dated 25 March 1984 made between Xxxxx St Modwen
Properties Limited (1) Xxxxxx Xxxxxx Xxxxxx and Xxxxxxxx
Xxxxxx (2) ("the Unit 8 Lease") including payment of all
rates water rates insurance premiums and other outgoings of
any annual or recurring nature (apportioned on a day to day
basis) and also for all gas and electricity consumed on
Unit 8 but excluding any covenant against parting with
possession without landlord's consent in relation to the
occupation by the Purchaser and/or DoveBid only PROVIDED
THAT the Purchaser shall not be obliged to put Unit 8 into
any better state of repair than it is in as at the Closing
Date or be liable for subsequent fair wear and tear;
(iii) for the period of its occupation only the Purchaser shall
be responsible for the prompt and punctual payment of the
rents and other outgoings due to the Landlord under the
Unit 8 Lease during that period;
(iv) the Vendors shall not exercise any rights to terminate
contained in the Unit 8 Lease;
(v) the Vendors shall if required by the Purchaser apply for
any consent or licence required under the Unit 8 Lease but
not otherwise;
(vi) the Vendors shall not without the consent of the Purchaser
surrender or vary the Unit 8 Lease; and
(vii) the licence shall be terminable by the Purchaser giving the
Vendors two week's prior written notice.
13.5 Subject to obtaining any mortgagee's consent required to the same,
which the Vendor shall take all reasonable steps to obtain as soon as
reasonably practicable, the Vendors agree to procure that GW3113
Limited shall lease the first and part of the second floors, Xxxxxxxx
Xxxxx, 00 Xxxxxx Xxxxxx to the Purchaser subject to:
(a) such terms as GW3113 Limited and the Purchaser shall jointly agree
both acting in good faith PROVIDED THAT such terms shall be those
which are fair and reasonable in the open market;
(b) the Purchaser, acting reasonably, being satisfied that the Vendors
have a good and marketable title to such property and is free from
adverse encumbrances,
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third party interests of whatsoever nature, restrictive covenants,
leases to any third party and any other adverse matters; and
(c) the Purchaser receiving results to its usual pre-contract searches
and enquiries which are satisfactory to it (acting reasonably)
including without limitation those relating to planning.
13.6 If either the said mortgagee's consent has not been granted or if the
parties have not completed the said lease within 6 months of the date of
this agreement either party to this agreement may serve written notice
upon the other terminating their obligations under clause 13.4 and 13.7
but without prejudice to any antecedent breach by either party.
13.7 Until the earlier of:
(a) the date the Purchaser leases or takes some other interest in an
alternative property to the Excluded Premises upon terms
satisfactory to the Purchaser (which Property may include without
limitation the Cornwall House Property referred to above but shall
not include Unit 8);
(b) the date the Purchaser is prevented from occupying or is no longer
permitted to occupy the Excluded Premises; or
(c) 31 July 2002,
the Purchaser may occupy the Excluded Premises from the Closing Date as
licensee of the Vendors and the Vendors shall hold the Excluded Premises
upon trust for the Purchaser subject to the following provisions:
(i) notwithstanding the capacity of the Purchaser as licensee of
the Vendors in respect of its occupation of the Excluded
Premises the Purchaser may carry on business at the Excluded
Premises for its own account;
(ii) for the period of its occupation only the Purchaser shall be
responsible for and comply with the lessee's covenants and
conditions contained in the Supplemental Lease and Car Park
Licence referred to in Part C of this Schedule 10 ("the
Excluded Lease Documents") including payment of all rates
water rates insurance premiums and other outgoings of any
annual or recurring nature (apportioned on a day to day
basis) and also for all gas and electricity consumed on the
Excluded Premises but excluding any covenant against parting
with possession without landlord's consent in relation to the
occupation by the Purchaser and/or DoveBid or any liability
in respect of fair wear and tear since the date of the
schedule of condition annexed to the said Supplemental Lease;
(iii) for the period of its occupation only the Purchaser shall be
responsible for the prompt and punctual payment of the rents
and other outgoings due to the Landlord under the Excluded
Premises Documents during that period;
(iv) the Vendors shall not exercise any rights to terminate
contained in the Excluded Premises Documents;
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(v) the Vendors shall if required by the Purchaser apply for any
consent or licence required under the Excluded Premises
Documents but not otherwise; and
(vi) the Vendors shall not without the consent of the Purchaser
surrender or vary any of the Excluded Lease Documents.
14. The Transferring Employees
14.1 The parties acknowledge and agree that the sale and purchase pursuant
to this agreement will constitute a relevant transfer for the purposes
of the Transfer Regulations and that it will not operate so as to
terminate any of the contracts of employment of the Transferring
Employees and such contracts shall be transferred to the Purchaser
pursuant to the Transfer Regulations with effect from the Closing Date.
14.2 The Vendors undertake to the Purchaser (for itself and as trustee for all
other owners for the time being of the whole or any part of the Business
and the Assets):
(a) to perform and observe, pending Closing, all the Partnership and/or
the Vendors' obligations and those of any of its predecessors
(whether arising under common law, statute, equity or otherwise)
under or in connection with the contracts of employment of the
Transferring Employees (or any of the said obligations the
Partnership and/or the Vendors would have had under or in connection
with the said contracts but for the Transfer Regulations);
(b) to pay to the Transferring Employees all sums to which they are
entitled up to and including the Closing Date (whether arising under
common law, statute, equity or otherwise) including, without
limitation, all wages and salaries, sick pay, maternity pay, any
liability to taxation, expenses, commission and other sums which are
payable in respect of any period up to the Closing Date;
(c) to comply in all respects with Regulation 10 of the Transfer
Regulations (and to provide to the Purchaser such information that
the Purchaser may request in writing in order to verify such
compliance);
(d) not to alter (whether to take effect prior to, on or after Closing)
any of the terms of employment or engagement of any of the
Transferring Employees;
(e) not to make any deduction from the salary or other wages due to any
of the Transferring Employees (otherwise than in respect of PAYE and
National Insurance contributions) unless such deduction shall
previously have been approved in writing by such of the Transferring
Employees;
(f) not to terminate or take any steps to terminate the contract of
employment of, nor to dismiss (constructively or otherwise), any of
the Transferring Employees;
(g) not to transfer or move or redeploy any of the Transferring Employees
from working within the Business, or induce any such Transferring
Employee to resign his employment from the Business or to agree to
transfer or move or be redeployed from the Business (without the
prior written consent of the Purchaser);
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(h) fully to indemnify and keep indemnified the Purchaser against all
Losses, which the Purchaser or any of such owners may suffer,
sustain, incur, pay or be put to by reason or on account of or
arising from:
(i) any failure by the Partnership and/or the Vendors to comply
with its/their obligations under clause 14.2;
(ii) any claim or other legal recourse by all or any of the
Transferring Employees in respect of any fact or matter
concerning or arising from employment with the Partnership
and/or the Vendors prior to the Closing Date;
(iii) any claim or other legal recourse by any trade union or staff
association recognised by the Partnership and/or the Vendors
or employee representatives in respect of all or any of the
Transferring Employees arising from or connected with the
failure by the Partnership and/or the Vendors to comply with
its their obligations to such trade union or staff association
or employee representatives;
(iv) the employment or termination of employment of any agent or
contractor or employee of the Partnership and/or the Vendors
(other than the Transferring Employees) whose employment is
transferred to the Purchaser by the Transfer Regulations;
(v) any act or omission done or omitted to be done by the
Partnership and/or the Vendors prior to the Closing Date in
relation to the Transferring Employees or any other employee
of the Partnership and/or the Vendors which by virtue of the
Transfer Regulations is deemed to be an act or omission of the
Purchaser; and
(vi) without prejudice to clause 14.2(h)(v) above, any claim or
demand or other legal recourse against the Purchaser by any
other person or agent or employee or contractor of the
Partnership and/or the Vendors who claims (whether correctly
or not) that the Purchaser has inherited liability from the
Partnership and/or the Vendors in respect of them by virtue of
the Transfer Regulations.
14.3 If any contract of employment or collective agreement not Disclosed to
the Purchaser shall have effect as if originally made between the
Purchaser and any person (including the Transferring Employees) or a
trade union as a result of the provisions of the Transfer Regulations:
(a) the Purchaser may, upon becoming aware of the application of the
Transfer Regulations to any such contract of employment or collective
agreement, immediately terminate such contract or agreement; and
(b) the Vendors shall indemnify and shall keep indemnified the Purchaser
against all Losses which the Purchaser may suffer, incur, sustain,
pay or be put to by reason or on account of or arising out of such
termination or arising from such contracts of employment or
collective agreement before and after Closing if such is not
terminated by the Purchaser.
14.4 Without prejudice to the other provisions of this clause 14, the Vendors
shall, at their own expense, give the Purchaser such assistance as the
Purchaser may reasonably
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request to contest any claim by any person employed in the Business at or
prior to Closing resulting from or in connection with this agreement.
14.5 The Vendors will, upon request by the Purchaser and at the Vendors'
expense, provide to the Purchaser such information or documents as the
Purchaser may reasonably request relating to the terms and conditions
of employment, pension and life assurance arrangements, health, welfare
or any other matter concerning any of the Transferring Employees or
relating to collective agreements, or collective or individual
grievances in the period prior to Closing.
15. The Business Contracts
15.1 Subject to Closing taking place, the Purchaser shall with effect from
the Closing Date assume the obligations and become entitled to the
benefits of the Vendor under the Business Contracts and the Purchaser
undertakes to carry out and perform and complete all the obligations
and liabilities created by or arising under the Business Contracts
(except for any obligations or liabilities attributable to a breach on
the part of the Vendors or the Partnership or its employees, agents or
sub-contractors) and shall indemnify the Vendors and keep them fully
indemnified against all Losses incurred by the Vendors in respect of
the non-performance or defective or negligent performance by the
Purchaser of the Business Contracts after the Closing Date save to the
extent that such non-performance or defective or negligent performance
is caused or contributed to by any act or omission of any of the
Vendors or any employee or agent of the Partnership acting outside the
direction of the Purchaser.
15.2 The Vendors undertake with effect from the Closing Date to assign to
the order of the Purchaser or to procure the assignment to the order of
the Purchaser all the Business Contracts which are capable of
assignment without the consent of other parties.
15.3 In so far as any of the Business Contracts are not assignable to the
Purchaser without the agreement of or novation by or consent to the
assignment from another party and no such agreement, novation or
consent shall have been obtained prior to Closing this agreement shall
not constitute an assignment or attempted assignment if such assignment
or attempted assignment would constitute a breach of such Business
Contracts. In the event that consent or novation is required to such
assignment:
(a) the Vendors at the Purchaser's request shall use all reasonable
endeavours with the co-operation of the Purchaser to procure such
novation or assignment as aforesaid;
(b) unless and until any such Business Contract shall be novated or
assigned as aforesaid the Vendors shall hold such Business Contract
and any moneys, goods or other benefits received thereunder as agent
of and in trust for the Purchaser and its successors in title
absolutely and the Purchaser shall (if such sub-contracting is
permissible and lawful under the Business Contract in question) as
the Vendors' sub-contractor perform all the obligations of the
Vendors under such Business Contract;
(c) unless and until any such Business Contract shall be novated or
assigned the Vendors will (so far as they lawfully may) give all
such assistance to the Purchaser as the Purchaser may reasonably
request to enable the Purchaser to enforce its rights under such
Business Contract and (without limitation) will provide access to
all relevant books, documents and other information in
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relation to such Business Contract as the Purchaser may require from
time to time.
15.4 If such consent or novation is refused or otherwise not obtained on terms
reasonably satisfactory to the Purchaser within 60 Business Days of the
Closing Date the Purchaser shall be entitled at its sole discretion to
require the Vendor to serve proper notice to terminate that Business
Contract and the Vendors shall indemnify and keep indemnified the
Purchaser from and against all Losses which the Purchaser may suffer,
sustain, incur, pay or be put to by reason or on account of or arising
from the termination of such Business Contract.
15.5 The Vendors shall indemnify the Purchaser and keep it fully indemnified
against all, Losses incurred by the Purchaser in respect of the
non-performance or defective or negligent performance by the Vendors
and/or the Partnership of the Business Contracts up to and including the
Closing Date.
16. Apportionments and receipts after Closing
16.1 All charges and outgoings relating to and payable in respect of the
Business or any of the Assets and Leases, excluding amounts due to
Creditors and Assumed Liabilities, which relate to a period commencing
before or on and ending after the Closing Date shall be apportioned on a
time basis (save that all charges and outgoings specifically referable to
the extent of the use of any property or rights shall be apportioned
according to the extent of such use) so that such part of such charges and
outgoings as is attributable to the period up to and including the Closing
Date shall be borne by the Vendors and each part of such charges and
outgoings as is attributable to the period commencing on the day
immediately after the Closing Date shall be borne by the Purchaser.
16.2 The Vendors shall within 20 Business Days of Closing prepare and deliver
to the Purchaser a Schedule (the "Apportionment Schedule") setting out the
items referred to in clause 16.1 and their apportionment and a statement
as to the net amount due from the Purchaser to the Vendors or from the
Vendors to the Purchaser (as the case may be). If the Vendors and the
Purchaser do not agree the Apportionment Schedule within 10 Business Days
from its delivery to the Purchaser then the determination of the
Apportionment Schedule shall be referred to an independent chartered
accountant selected by agreement between the Vendors and the Purchaser or,
failing agreement between the Vendors and the Purchaser as to such
independent chartered accountant, nominated by the President for the time
being of the Institute of Chartered Accountants in England and Wales on
the application of either the Vendors or the Purchaser. Such independent
chartered accountant shall act as expert not as arbitrator and his
determination of the Apportionment Schedule shall, in the absence of
manifest error, be final and binding on the Vendors and the Purchaser. The
independent chartered accountant shall be instructed by the Vendors and
the Purchaser to issue within 20 Business Days of being so instructed a
certificate showing the net amount owing by the Vendors to the Purchaser
or by the Purchaser to the Vendors (as the case may be) in respect of the
items referred to in clause 16.1. Within 5 Business Days of the agreement
of the Apportionment Schedule by the Vendors and the Purchaser or the
issue of the certificate by the independent chartered accountant in
accordance with this clause 16.2 the Vendors shall pay to the Purchaser or
vice versa (as the case may be) the net amount due.
16.3 Any payment made to the Vendors in respect of the Business Contracts after
Closing or otherwise in respect of amounts owed to the Purchaser shall be
received by the
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Vendors as agent and trustee for the Purchaser, shall be credited by the
Vendors in a separate bank account identifying its status as a trust for
the Purchaser and shall within 5 Business Days of receipt be recorded
separately in the Vendors' books and shall be paid by the Vendors to the
Purchaser.
16.4 Any payment made to the Purchaser after Closing in respect of the
Receivables or other amounts owed to the Vendors shall be received by the
Purchaser as agent and trustee for the Vendors and shall within 5 Business
Days of receipt be paid by the Purchaser to the Vendors.
17. Obligations after Closing
17.1 The Vendors and the Purchaser shall issue a joint statement in the agreed
form to the customers, clients, suppliers of the Business and any other
third parties informing them of the transfer of the Business to the
Purchaser.
Obligations of the Vendors
17.2 The Vendors undertake to pass to the Purchaser immediately upon receipt
any correspondence, information, documents, orders or enquiries in
relation to the Business or the Assets which any of them may receive at
any time after Closing.
17.3 On and at any time after Closing the Vendors will give or procure to be
given to the Purchaser all such information and other assistance
(including, without limitation, particulars of customers, suppliers and
others who have dealt with the Vendors in connection with the Business) as
the Purchaser may reasonably require for the conduct of the Business and
for the purpose of implementing the provisions of this agreement.
17.4 The Vendors will, if so required by the Purchaser on or at any time after
Closing, send a circular (in a form provided by the Purchaser) to persons
who have had dealings with the Partnership in connection with the Business
announcing the transfer to the Purchaser of the Business.
17.5 Not later than two Business Days after the Closing Date the Vendors shall
send to each of the Transferring Employees a letter in the agreed form
explaining that his employment has been transferred to the Purchaser
pursuant to the Transfer Regulations.
17.6 The Vendors will deliver up promptly upon request to the Purchaser any
books, accounts, records and returns of the Vendors relating to or in
connection with the Business not delivered to the Purchaser on Closing as
the Purchaser may require (including the right to take copies and extracts
on reasonable advance notice) and will keep them in good order.
17.7 Save for the Assumed Liabilities, the Vendors shall indemnify the
Purchaser and keep it indemnified against all Losses of whatever nature
relating to and payable in respect of the Business or the Assets which are
attributable to the period up to and including the Closing Date and
including (but without limitation) any act or omission on the part of the
Partnership and/or any of the Vendors in relation to the Business
Contracts or any defects in, or alleged defects in, goods supplied or
services provided prior to the Closing Date and in particular any claim
under any warranty or under the Sale of Goods Xxx 0000 or the Sale and
Supply of Goods Xxx 0000.
17.8 The Vendors shall promptly notify the Purchaser of any claims against the
Vendors brought by any third party in respect of any goods manufactured or
services supplied
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by the Partnership and the Vendors shall retain conduct of such claim
but shall not without the Purchaser's prior written consent take any
other steps in relation to such claims which might reasonably be
expected to damage the commercial interests of the Purchaser.
17.9 The Vendors shall (at their own expense) provide that:
(a) the Vendors shall give the Purchaser such assistance that the
Purchaser may reasonably request, for the adoption by the Purchaser
of any business name or trade xxxx including either or both of the
words Bache Xxxxxxxx;
(b) after Closing the Partnership and each of the Vendors shall cease
in any manner whatsoever to use or display any trade or service
marks, trade or service names, domain names or logos used or held
by the Business or any confusingly similar marks, domain name, name
or logo.
17.10 During the period of six years after Closing (and without prejudice to
any of the Warranties) if any Business Confidential Information is not
in the possession of the Purchaser or readily discoverable by the
Purchaser but is in the possession or under the control of or available
to the Vendors the Vendors shall procure that such Business
Confidential Information is provided to the Purchaser promptly on
request.
Obligations of the Purchaser
17.11 The Purchaser shall be responsible for and shall pay or discharge the
Assumed Liabilities in accordance with the usual practice of the
Business at the date of this agreement save that the Purchaser shall
not be obliged to pay or discharge any Assumed Liability where the
amount in question is the subject matter of a genuine dispute.
17.12 The Purchaser will for a period of six years keep safely all such
books, records, files, papers and other documents relating to the
Business as the Vendors shall transfer or cause to be transferred to
the Purchaser and shall afford the Vendors reasonable access thereto
during working hours and on prior notice for so long as shall be
necessary to enable the Vendors to deal with its taxation and other
liabilities in respect of the period up to the Closing Date and will
permit the Vendors and its servants, agents and professional advisers
upon reasonable notice to take copies at the Vendors' expense of such
books, records, files, papers and other documents for the purpose of
answering any query raised or disposing of any dispute in relation
thereto.
18. Investment Warranties and Covenants
The Vendors warrant and represent to the Purchaser in the following
terms:
Offering Restrictions
18.1 Vendors understands that DoveBid is issuing the Consideration Shares
without registering them under the Securities Act, pursuant to
Regulation S thereunder ("Regulation S"), which provides a limited
exemption for certain offers and sales of securities that are deemed
thereunder to "occur outside of the United States". DoveBid's agreement
to issue the Consideration Shares pursuant to Regulation S is
conditioned upon, and DoveBid is relying on, the truth of the
representations and warranties set forth in this agreement and in the
representation letters to be delivered
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by Vendors at the Closing. Vendors intend DoveBid to rely on such
representations and warranties for such purpose.
Purchase for Own Account
18.2 The Consideration Shares issuable to the Vendors hereunder shall be
acquired for investment for the Vendors' own account, not as a nominee
or agent, and not with a view to the public resale or distribution
thereof within the meaning of the Securities Act, and the Vendors have
no present intention of selling, granting any participation in, or
otherwise distributing the same.
Disclosure of Information
18.3 The Vendors have received or have had full access to all of the
information they consider necessary or appropriate to make an informed
investment decision with respect to the Consideration Shares to be
acquired by the Vendors under this agreement. The Vendors further have
had an opportunity to ask questions and receive answers from the
Purchaser and DoveBid regarding the terms and conditions of the
offering of the Consideration Shares and to obtain additional
information (to the extent the Purchaser or DoveBid possessed such
information furnished to the Vendors or to which the Vendors had access
or could acquire it without unreasonable effort or expense) necessary
to verify any information.
Investment Experience
18.4 The Vendors understand that the purchase of the Consideration Shares
involves substantial risk. The Vendors acknowledge that the Vendors are
able to fend for themselves, that the Vendors can bear the economic
risk of the Vendors' investment in the Consideration Shares and that
the Vendors are capable of evaluating the merits and risks of this
investment in the Consideration Shares and protecting their own
interests in connection with this investment. The Vendors understand
that no public market now exists for any of the Consideration Shares
either in the United States or elsewhere and that it is uncertain that
a public market shall ever exist for the Consideration Shares.
"Offshore Transaction" under the Securities Act
18.5 The offer to each of the Vendors to acquire the Consideration Shares
was not made to any person within the United States, and, at the time
each Vendor executed this agreement and at the Closing, Vendors were
and will be outside the United States. Each of the Partners
individually certifies that he is not a U.S. Person. Vendors certify
that the Partnership is not a U.S. Person, in that it is not organized
under the laws of the United States, and has not been organized
primarily for the purpose of acquiring the Consideration Shares. None
of the Vendors are acquiring the Consideration Shares for the account
or benefit of any U.S. Person.
No Directed Selling Efforts
18.6 None of the Vendors is aware of any Directed Selling Efforts with
regard to the offer and sale of the Consideration Shares to Vendors
under the agreement. "Directed Selling Efforts" means any activity
initiated for the purpose, or which could reasonably be expected to
have the effect, of conditioning the market in the United States for
the Consideration Shares, including the placement of any advertisement
in a publication of general circulation in the United States that
refers to the offer of the Consideration Shares.
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Resale Restrictions under Regulation S
18.7 The Vendors understand that during the one-year period beginning on the
date of the Closing (the "Restriction Period"): (i) Vendors may resell
the Consideration Shares only in accordance with the provisions of
Regulation S, pursuant to registration under the Securities Act or
pursuant to an available exemption from the registration requirements
of the Securities Act (including Rule 144 described below); (ii)
Vendors may not engage in hedging transactions with regard to the
Consideration Shares prior to the end of the Restriction Period; and
(iii) that any resale pursuant to Regulation S must comply with all of
the following conditions: (A) the Vendors' resale offer of the
Consideration Shares is not made to any person within the United
States, (B) so long as the Consideration Shares are not traded in a
designated securities market overseas (as defined in Regulation S), at
the time purchaser initiated his order to buy the Consideration Shares
in the resale transaction, purchaser must be outside the United States
and (C) Selling Vendor and none of his or its affiliates can make any
Directed Selling Efforts in the United States. Additional restrictions
on resale pursuant to Regulation S resale may apply.
Restrictions on Resale in the United States
18.8 Vendors further understand that the Consideration Shares are
characterized as "restricted securities" under the Securities Act
inasmuch as they are being acquired from DoveBid in a transaction not
involving a public offering, and that under the Securities Act and
applicable regulations thereunder, the Consideration Shares may be
resold in the United States without registration under the Securities
Act only in certain limited circumstances. DoveBid is under no
obligation to register any of the Consideration Shares for resale and
has not present plans to do so.
Rule 144 Not Currently Available
18.9 Vendors are familiar with Rule 144 under the Securities Act and
understand that Rule 144, which would provide a limited exemption from
registration under the Securities Act for resale of the Consideration
Shares in the United States, is not presently available with respect to
the Consideration Shares. Furthermore, Rule 144 requires that the
Consideration Shares be held for a minimum of one (1) year, and may
then be resold only if "current public information" about DoveBid (as
defined in Rule 144) is available. "Current public information" will
generally be available only if an issuer is a reporting company under
the Securities Exchange Act of 1934, as amended, and files periodic
reports (such as Quarterly and Annual Reports) as required under that
statute. DoveBid is not currently a reporting company. Vendors further
understands that, so long as "current public information" is not
available, the Consideration Shares will have to be held for a minimum
of two (2) years before they may be resold under Rule 144 and may have
to be held indefinitely by a Vendor during any period when such Vendor
is an "affiliate" of DoveBid and "current public information" is not
publicly available.
Further Limitations on Disposition
18.10 Without in any way limiting the representations set forth above, the
Vendors further agree not to make any disposition of all or any
proportion of the Consideration Shares unless and until:
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(a) there is then in effect a registration statement under the
Securities Act covering such proposed disposition and such
disposition is made in accordance with such registration statement;
or
(b) the Vendors shall have notified DoveBid of the proposed disposition
and shall have furnished DoveBid with a statement of the
circumstances surrounding the proposed disposition, and, at the
expense of the relevant Vendor or its transferee, with an opinion
of legal counsel, satisfactory to DoveBid acting reasonably, that
such disposition shall not require registration of such securities
under the Securities Act.
Notwithstanding the provisions of paragraphs (a) and (b) above, no such
registration statement or opinion of legal counsel shall be required
for any transfer of any portion of the Consideration Shares in
compliance with Securities and Exchange Commission Rule 144, Rule 144A
and Rule 145; provided, that in each of the foregoing cases the
transferee agrees in writing to be subject to the terms of this clause
19 to the same extent as if the transferee were a Vendor hereunder.
Market Stand Off Agreement
18.11 Notwithstanding any other provision of this Agreement, each Vendor
hereby agrees that, during the period specified by DoveBid and an
underwriter of common stock or other securities of DoveBid (which
period shall not exceed 180 days), following the effective date of a
registration statement filed with the U.S. Securities Exchange
Commission to register DoveBid's securities to be issued and sold in an
initial public offering, such Vendor shall not, to the extent requested
by DoveBid or such underwriter, directly or indirectly sell, offer to
sell, contract to sell (including any short sale), grant any option to
purchase or otherwise transfer or dispose of (other than to donees who
agree to be similarly bound) any securities of DoveBid held by such
Vendor at any time during such period.
Legends
18.12 Each Vendor consents to the placement of the following legends, in
substantially the form below, on each certificate representing the
Consideration Shares to be received by such Vendor, in addition to any
other legends required by applicable law or by an agreement between the
Purchaser or DoveBid, on the one hand, and such Vendor, on the other
hand:
(a) The legend regarding the Securities Act in the following form:
(i) THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND THE COMPANY DOES NOT INTEND TO REGISTER
THEM. THE SHARES MAY NOT BE OFFERED, TRANSFERRED OR SOLD
EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF REGULATION S
PROMULGATED UNDER THE SECURITIES ACT, PURSUANT TO REGISTRATION
UNDER THE SECRUITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION
FROM THE REGISTRATION REQUIRMENTS OF THE SECURITIES ACT.
HEDGING TRANSACTIONS INVOLVING THE SHARES MAY NOT BE CONDUCTED
UNLESS IN COMPLIANCE WITH THE SECURITIES ACT.
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(ii) The legend set forth in paragraph (a) above shall be removed
by DoveBid from any certificate evidencing Consideration
Shares upon delivery to DoveBid of an opinion by legal
counsel, reasonably satisfactory to DoveBid, that a
registration statement under the Securities Act is at that
time in effect with respect to the legended security or that
such security can be freely transferred in a public sale
without such registration statement being in effect and that
such transfer shall not jeopardize the exemption or exemptions
from registration pursuant to which DoveBid issued the
Consideration Shares.
(b) The legend regarding the Market-Stand-off Agreement in clause 19.11
in the following form:
(i) THE SECURITIES REPRESENED HEREBY ARE SUBJECT TO A MARKET
STAND-OFF RESTRICTION AS SET FORTH IN AN ASSET PURCHASE
AGREEMENT BETWEEN THE ISSUER AND THE ORIGINAL HOLDER OF THESE
SECURITIES, A COPY OF WHICH MAY BE OBTAINED AT THE PRINCIPAL
OFFICE OF THE ISSUER. AS A RESULT OF SUCH AGREEMENT, THESE
SECURITIES MAY NOT BE TRADED PRIOR TO THE EXPIRATION OF SUCH
STAND OFF PERIOD AFTER THE EFFECTIVE DATE OF THE REGISTRATION
STATEMENT RELATED TO THE INITIAL PUBLIC OFFERING OF THE COMMON
STOCK OF THE ISSUER HEREOF. SUCH RESTRICTION IS BINDING ON
TRANSFEREES OF THESE SECURITIES.
Stop-Transfer Instructions
18.13 The Vendors agree that to ensure compliance with the restrictions
imposed by this agreement, DoveBid may issue appropriate
"stop-transfer" instructions to its transfer agent, if any, and if
DoveBid transfers its own securities, it may make appropriate notations
to the same effect in its own records.
Refusal to Transfer
18.14 DoveBid shall not be required to (i) transfer on its books any
Consideration Shares or other securities that have been sold or
otherwise transferred in violation of any of the provisions of this
agreement, or (ii) treat as owner of such Consideration Shares, or to
accord the right to vote or pay dividends, to any purchaser or other
trustee to whom such Consideration Shares or other securities have been
so transferred.
No Other Negotiations
18.15 Since December 12, 2001, neither any of the Vendors nor any of their
officers, directors, stockholders, employees, affiliates, attorneys,
financial advisers or other agents or representatives has, directly or
indirectly, solicited, initiated, sought, entertained, encouraged,
facilitated or supported any inquiry, proposal or offer from, furnished
any information to, or participated in any discussions or negotiations
with, any person (other than the Purchaser or DoveBid) regarding (i)
any acquisition of the Business, (ii) any merger or consolidation with
or involving the Vendors, or (iii) any sale or acquisition of any
material portion of the stock or assets of the Vendors, including the
Assets (each an "Acquisition Transaction"). The Vendors are not party
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to any agreement (other than with the Purchaser or DoveBid) that
restricts the Vendors' ability to solicit, initiate, seek, entertain,
encourage, facilitate or support any inquiry, proposal or offer from,
furnish any information to, or participate in any discussions or
negotiations with, any person regarding any Acquisition Transaction.
19. Restrictive Covenants
19.1 Each of the Vendors severally covenant with the Purchaser that he will
not either on his own account or in conjunction with or on behalf of
any person or persons whether directly or indirectly, including an
ownership interest in a third party, for the period of:
(a) in relation to Xxxxx Xxxxx two years from Closing and in relation
to the remainder of the Vendors nine months from Closing, supply
products to or provide services for any person, firm or company who
or which was either at Closing or during the period of twelve
months prior to Closing a client or customer of the Business where
such goods or services are the same as or compete with products
sold to or services provided by the Business to that person, firm
or company at or during the period of twelve months prior to
Closing;
(b) in relation to Xxxxx Xxxxx two years from Closing and in relation
to the remainder of the Vendors nine months from Closing, solicit
or endeavour to solicit the custom of any person, firm or company
who or which was either at Closing or during the period of twelve
months prior to Closing had been a client or customer of the
Business, for the supply of products or the provision of services
which are the same as or compete with those products sold or
services provided by the Business to that person, firm or company
at or during the period of twelve months prior to Closing;
(c) in relation to Xxxxx Xxxxx two years from Closing and in relation
to the remainder of the Vendors nine months from Closing, solicit
or entice away or endeavour to solicit or entice away from the
Purchaser any officer or employee (save for persons performing the
function of junior administrative or secretarial employees) who was
either at Closing or during the period of six months prior to
Closing engaged in the Business whether or not such person would
commit a breach of his contract of employment by reason of leaving
the service of the Purchaser;
(d) in relation to Xxxxx Xxxxx two years from Closing and in relation
to the remainder of the Vendors nine months from Closing, carry on
or be engaged, concerned or interested in England in the any
business which competes with the Business as the same was carried
on at Closing (other than as a holder of securities listed on a
recognised stock exchange or provided that such holding shall not
exceed one per cent of the class of securities of which the said
holding forms part).
19.2 Each of the Vendors hereby acknowledges and declares that the
restrictions in clause 19.1 are reasonable in all the circumstances as
at today's date; that such restrictions are integral to the terms on
which the Purchaser has agreed to purchase the Business; and that each
of such restrictions shall be construed and take effect independently
of the others.
19.3 If any breach or violation of the provisions of clause 19.1 occurs, the
Vendors and the Purchaser agree that damages alone are likely not to be
sufficient compensation and
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that injunctive relief is reasonable and is likely to be essential to
safeguard the interests of the Purchaser and that injunctive relief (in
addition to any other remedies afforded by a court of equity) may
(subject to the discretion of the courts) be obtained. No waiver of any
breach or violation shall be implied from forbearance or failure by the
Purchaser to take action.
20. Confidentiality
20.1 The Vendors undertakes to keep confidential and not at any time to
disclose or make known to anyone whatsoever or use for their own or any
other person's benefit all Business Confidential Information, except as
may be required by any legal or regulatory authority to which the
Vendors are subject.
20.2 From the execution of this agreement through the Closing, the Purchaser
shall keep confidential and not disclose or make known to any third
party whatsoever nor use for its or any other person's benefit any
Business Confidential Information (as such expression is defined in
clause 1.1) which may have been disclosed to the Purchaser or which may
otherwise have come to the attention of the Purchaser and which relates
only to the business or affairs of the Vendors, except as may be
required by any legal or regulatory authority to which the Purchaser is
subject.
20.3 The obligations imposed by the provisions of clauses 20.1 and 20.2
shall not apply to the extent that the Business Confidential
Information or Business Confidential Information in question:
(a) is or comes into the public domain without fault on the part of the
party to whom the same was disclosed, or to whose attention the
same has come;
(b) was already known to the relevant party at the time the same, was
disclosed to it or came to its attention; or
(c) has been lawfully disclosed to the relevant party by a third party.
21. Announcements and publicity
No announcement or circular or other publicity in connection with the
existence or subject matter of this agreement (other than as permitted
by this agreement) shall be made prior to or after Closing by or on
behalf of any of the Vendors without the approval of the Purchaser as
to its content, form and manner of publication (such approval not to be
unreasonably withheld or delayed) save that any announcement, circular
or other publicity required to be made or issued by the Vendors or the
Purchaser pursuant to any legal or regulatory authority may be made or
issued by the Vendors or the Purchaser without such approval. The
parties shall consult together upon the form of any such announcement,
circular or other publicity and the other party shall promptly provide
such information and comment as the party issuing any such
announcement, circular or other publicity may from time to time
reasonably request.
22. Notices and other Communications
22.1 Where this agreement provides for the giving of notice or the making of
any other communication, such notice or communication shall not (unless
otherwise expressly provided) be effective unless given or made in
writing in English in accordance with the following provisions of this
clause.
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22.2 Any notice or communication to be given or made under or in connection
with this agreement may be:
(a) delivered or sent by post to:
the Vendors: Xxxxx Xxxxx,
Peat House,
00 Xxxxxx Xxxxxx,
Xxxxxxxxxx X0 0XX
Xxxxxx Xxxxxxx
the Purchaser: General Counsel
DoveBid UK Limited
1 Copthall House
Xxxxxxx Xxxxxx
Xxxxxxxx
Xxxx Xxxxxxxx
XX0 0XX
Xxxxxx Xxxxxxx
DoveBid General Counsel
DoveBid, Inc.
0000 X. Xxxxxxxxx Xxxxxxxxx
Xxxxxx Xxxx
XX 00000
Xxxxxx Xxxxxx
(such addresses being referred to below as the "Postal Address" of
the relevant party); or
(b) sent by fax to:
the Vendors x00 0000 000 0000
the Purchaser x0 000 000 0000
DoveBid x0 000 000 0000
and shall be marked in the case of the Vendors for the attention of
Xxxxx Xxxxx and in the case of the Purchaser for the attention of
General Counsel and in the case of DoveBid for the attention of
General Counsel.
22.3 Any notice or other communication so delivered or sent shall be deemed
to have been served when received except that if it is received between
5.30 p.m. on a Relevant Day and 9.00 a.m. on the next Relevant Day it
shall be deemed to have been served at 9.00 a.m. on the second of such
Relevant Days.
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22.4 Where any party has given notice to the other of any different address
or number to be used for the purposes of this clause then such
different address or number shall be substituted for that shown above.
For the purposes of this clause:
(a) "Relevant Day" means any day other than a Saturday, Sunday or a day
which is a public holiday at the Postal Address of the receiving
party; and
(b) any reference to a time is to the time at the Postal Address of the
receiving party;
23. Miscellaneous
Costs
23.1 Except where expressly stated otherwise, each party shall bear its own
costs incurred in the negotiations leading up to and in the preparation
of this agreement and of matters incidental to this agreement. The
Purchaser shall bear any stamp duty payable in respect of the sale
hereby agreed.
Successors and assigns
23.2 This agreement shall be binding upon and endure for the benefit of each
party's successors and shall be assignable by the Purchaser to the
intent that the rights and benefits under this agreement shall endure
for the benefit of the Purchaser's assigns. Save as aforesaid, this
agreement shall not be assignable.
Variation
23.3 No variation of this agreement shall be effective unless made in
writing and signed by or on behalf of each of the parties.
Severance
23.4 If at any time any provision of this agreement is or becomes invalid or
illegal in any respect, such provision shall be deemed to be severed
from this agreement but the validity, legality and enforceability of
the remaining provisions of this agreement shall not be affected or
impaired thereby.
Further assurance
23.5 The Vendors shall do, execute and perform and shall procure to be done,
executed and performed all such further acts, deeds, documents and
things as the Purchaser may reasonably request from time to time
effectively to vest the beneficial ownership of the Assets in the
Purchaser or as it directs free from all Encumbrances or adverse rights
or interests of any kind and otherwise to give to the Purchaser the
full benefit of this agreement.
Waivers
23.6 A failure by any party to exercise and any delay, forbearance or
indulgence by any party in exercising any right, power or remedy under
this agreement shall not operate as a waiver of that right, power or
remedy or preclude its exercise at any subsequent time or on any
subsequent occasion. The single or partial exercise of any right, power
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or remedy shall not preclude any other or further exercise of that
right, power or remedy. No custom or practice of the parties at
variance with the terms of this agreement shall constitute a waiver of
the rights of any party under this agreement. The rights, powers and
remedies provided in this agreement are cumulative and not exclusive of
any rights, powers or remedies provided by law.
23.7 Entire agreement
(a) This agreement and all documents entered into on or after the date
of this agreement in connection with it (the "Agreed Documents"):
(i) constitute the entire agreement between the parties about the
subject matter of this agreement; and
(ii) (in relation to such subject matter) supersede all earlier
discussions, understandings and agreements between any of the
parties and all earlier representations by any party.
(b) This clause shall not exclude the liability of any party for
fraudulent misrepresentation or concealment or any resulting right
to rescind this agreement.
Counterparts
23.8 This agreement may be executed in any number of counterparts, each of
which shall be deemed to be an original, and which together shall
constitute one and the same agreement. Unless otherwise provided in
this agreement, this agreement shall become effective and be dated (and
each counterpart shall be dated) on the date on which this agreement
(or a counterpart of this agreement) is signed by the last of the
parties to execute this agreement or, as the case may be, a counterpart
thereof.
Post Closing effect
23.9 This agreement shall remain in full force and effect after and
notwithstanding Closing in respect of all obligations, agreements,
covenants, undertakings or conditions contained in or implied by this
agreement which have not been done, observed or performed at or prior
to Closing and all Warranties, representations and indemnities
contained in or implied by this agreement shall continue in full force
and effect after and notwithstanding Closing and the parties may take
action for any breach of non-fulfilment of any of them either before or
after Closing (whether or not such breach or non-fulfilment may have
been known to or discoverable by the party taking action prior to
Closing).
24. Law and Jurisdiction
24.1 This agreement shall be governed by and construed in accordance with
English law and each of the parties submits to the non exclusive
jurisdiction of the English courts.
25. Guarantee
25.1 In consideration of the Vendor entering into this agreement with the
Purchaser at the request of DoveBid, DoveBid hereby guarantees as a
continuing guarantee the due performance and discharge by the Purchaser
of its obligations under this agreement including the payment when due
of the Deferred Consideration.
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25.2 The liability of DoveBid under clause 25.1 shall not in any way be
discharged diminished or affected by:-
25.2.1 the granting of time or indulgence to the Purchaser;
25.2.2 the failure of the Vendor to give DoveBid notice of any default
by the Purchaser;
25.2.3 any variation made in the terms of this agreement which are
agreed between the Vendor and the Purchaser;
25.2.4 anything which would not have released discharged or affected
DoveBid's liability if DoveBid had been a principal debtor
therefor.
25.3 The liability of DoveBid under clause 25.1 shall in no circumstances
exceed the liability of the Purchaser under this agreement.
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The parties to this agreement have signed and entered into this agreement on the
date and year first written above.
SIGNED by )
XXXXX XXXXXXXXX XXXXX )
in the presence of: )
SIGNED by X X XXXXXXX )
in the presence of: )
SIGNED by X X XXXXXXX )
in the presence of: )
SIGNED by X X XXXX )
in the presence of: )
SIGNED by X X XXXX
in the presence of: )
SIGNED by )
for and on behalf of )
DOVEBID UK LIMITED )
in the presence of: )
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SIGNED by )
for and on behalf of )
DOVEBID, INC. )
in the presence of: )
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