Exhibit 10.32
DATED 21 OCTOBER 2002
(1) THOSE PERSONS SET OUT IN SCHEDULE ONE
-AND-
(2) ARTHROCARE CAYMAN LIMITED
-AND-
(3) ARTHROCARE CORPORATION
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SHARE PURCHASE AGREEMENT
relating to
the entire issued share capital of
Atlantech Medical Devices Limited
and
Atlantech Medical Devices (UK) Limited
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[LOGO OF XXXXXX & XXXXXXX]
London
00 Xxxxxxxxxxx
Xxxxxx XX0X 0XX
(00) 000 0000 0000 (Tel)
(00) 000 0000 0000 (Fax)
xxx.xx.xxx
Confidential treatment has been requested for portions of this exhibit. The copy
filed herewith omits the information subject to the confidentiality request.
Omissions are designated as * * *. A complete version of this exhibit has been
filed separately with the Securities and Exchange Commission.
THIS AGREEMENT is made the 21st day of October 2002.
BETWEEN:
(1) THOSE PERSONS SET OUT AT SCHEDULE ONE (the "Vendors");
(2) ARTHROCARE CAYMAN LIMITED a company incorporated under the laws of the
Cayman Islands with offices at c/o Chartered Trust Services, Ltd., One
Capital Place, Xxxxxxx Road, P.O. Box 1034 GT, Grand Cayman, Cayman
Islands (the "Purchaser"); and
(3) ARTHROCARE CORPORATION a company incorporated under the laws of the
State of California, USA with offices at 000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000-0000. XXX (the "Guarantor").
WHEREAS:
(A) Atlantech Medical Devices Limited ("Atlantech"), a company registered
in England with number 3071270, has at the date of this Agreement an
authorised share capital of (pound)50,000 divided into 39,000 ordinary
A shares of (pound)1 each and 11,000 ordinary B shares of (pound)1
each of which 15,678 of the said ordinary A shares and 4,221 of the
said ordinary B shares are issued and fully paid or credited as fully
paid and are owned by the Vendors in the proportions set out in
schedule 1.
(B) Atlantech Medical Devices (UK) Limited ("Atlantech UK"), a company
registered in England with number 3156447, has at the date of this
Agreement an authorised share capital of (pound)200 divided into 200
ordinary shares of (pound)1 each of which 160 of the said ordinary
shares are issued and fully paid or credited as fully paid and are
owned by the Vendors in the proportions set out in schedule 1 (each of
those companies mentioned at Recitals (A) and (B) being a "Company"
and together, the "Companies").
(C) The Vendors have agreed to sell the Shares to the Purchaser (a wholly
owned subsidiary of the Guarantor) and the Purchaser has agreed to
purchase the Shares in reliance (inter alia) upon the warranties and
undertakings in this Agreement, for the consideration and otherwise
upon and subject to the terms and conditions of this Agreement.
WHEREBY IT IS AGREED as follows:
1. DEFINITIONS AND INTERPRETATION
1.1 In this Agreement the following words and expressions have the
meanings set opposite them:
"Accounts" the audited balance sheet as at the
Balance Sheet Date and the audited
profit and loss account for the last
accounting reference period ended on the
Balance Sheet Date of each Company and
the notes, reports, statements and other
documents which are required by law to
be annexed to the Accounts of the
company concerned and to be sent or made
available to members for such Financial
Year, a copy of each of which is
enclosed in the Disclosure Documents;
"Accounting Standards" statements of standard accounting
practice (including financial reporting
standards) issued pursuant to section
256, CA 85 by the ASB;
1
"Additional Consideration" the consideration payable for the Shares
as specified in clause 3.3;
"Additional Revenue consideration payable for the Shares as
Related Consideration" specified in clause 3.4;
*** ***
"ASB" Accounting Standards Board Limited (no.
2526824) or such other body prescribed
by the Secretary of State from time to
time pursuant to section 256, CA 85;
"Affiliate" in relation to any body corporate, any
Holding Company or subsidiary
undertaking of such body corporate or
any subsidiary undertaking of a Holding
Company of such body corporate;
"Agreement" this Agreement including its recitals
and the schedules but not the Tax Deed;
"Associated a company in which a Company or
Company" any Subsidiary holds shares conferring
the right to exercise 20% or more of the
votes which could be cast on a poll at a
general meeting of such company and
which is not a subsidiary of any of the
companies in the Group and which is more
particularly listed in schedule 2 under
the heading "The Associated Companies";
"Atlantech Products" means those products: (a) available for
purchase by third parties from either of
the Companies immediately prior to the
date of this Agreement; or (b) made
available for purchase to third parties
from either of the Companies on or
following the date of this Agreement
which have been developed or otherwise
acquired by either of the Companies or
any of the Warrantors in each case
without material assistance from the
Purchaser or any member of the
Purchaser's Group PROVIDED THAT
"Atlantech Products" shall not under any
circumstances include any products
manufactured or developed by the
Purchaser or any Affiliate of the
Purchaser (other than, following
Completion, the Companies) or by either
of the Companies or any of the
Warrantors with material assistance from
the Purchaser or the Purchaser's Group;
"Balance Sheet Date" in the case of (i) Atlantech Medical
Devices Limited 31 December 2001 and
(ii) Atlantech Medical Devices (UK)
Limited 30 September 2001;
__________
*** Certain information on this page has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
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"Business" collectively the business of the sale of
medical devices carried on by the
Companies and each of the Subsidiaries
at the date hereof;
"Business Day" a day (other than a Saturday or Sunday)
when banks are open for business in
London;
"CA 85" Companies Xxx 0000;
"CAA" Capital Allowances Xxx 0000;
"Change of Control" shall be deemed to occur where any
person acquires after Completion more
than fifty (50) percent. of the issued
share capital (or voting rights attached
to such share capital) of the Purchaser,
any Holding Company of the Purchaser,
either Company or the Guarantor
entitling the holder thereof to attend
and vote on all matters in general
meeting provided that a Change of
Control shall not include an internal
reorganisation of the Purchaser's Group,
re-capitalisation or management buy-out
of the Guarantor or any of its
subsidiary companies provided that the
management personnel to whom the
Warrantors report remains the same
immediately following such
reorganisation, re-capitalisation or
management buy-out as immediately prior
thereto;
"Claim" any claim by the Purchaser in connection
with the Warranties;
"Companies Acts" as defined in section 744, CA 85
together with the Companies Xxx 0000;
"Competent Authority" means any person or legal
entity (including any government or
government agency) having regulatory
authority under Environmental Laws
and/or any court of law or tribunal;
"Completion" completion of the sale and purchase of
the Shares pursuant to this Agreement;
"Completion Accounts" the accounts referred to in clause
6.1.2, prepared in accordance with
schedule 5;
"Confidential Information" all information received or
obtained as a result of entering into or
performing, or supplied by or on behalf
of a party in the negotiations leading
to, this Agreement and which relates to:
(i) either Company or any of the
Subsidiaries and their respective
Affiliates;
(ii) any aspect of the Business;
(iii) the provisions of this Agreement;
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(iv) the negotiations relating to this
Agreement;
(v) the subject matter of this
Agreement; or
(vi) the Purchaser;
"Connected Person" a person connected with the Vendors or
the Directors (or any former director of
either Company or any of the
Subsidiaries) within the meaning of
section 839, ICTA 1988;
"Consideration" the aggregate consideration for the
Shares set out in clauses 3 and 6;
"Contingent Claim Amount" an amount in respect of a Claim or claim
under or pursuant to the Tax Deed by the
Purchaser against the Warrantors not
being a liability of the Warrantors
determined or quantified in accordance
with the terms of sub-clause 7.5.2 and
being a bona fide estimate of the
quantum of such liability by the
Purchaser;
"Copyright" copyright, design rights, topography
rights and database rights whether
registered or unregistered (including
any applications for registration of any
such thing) and any similar or analogous
rights to any of the foregoing whether
arising or granted under the law of
England or of any other jurisdiction;
"Directors" the directors of each of the Companies
named in schedule 2;
"Disclosed" fairly disclosed by the Disclosure
Documents or fairly disclosed by the
disclosures contained in the Disclosure
Letter and "Disclosure" shall be
construed accordingly;
"Disclosure Documents" the Disclosure Letter and the two
identical bundles of documents collated
by or on behalf of the Warrantors, the
outside covers of each of which have
been signed for identification by or on
behalf of the Warrantors and the
Purchaser;
"Disclosure Letter" the letter described as such of even
date herewith addressed by the
Warrantors to the Purchaser;
"Encumbrance" any interest or equity of any person
(including any right to acquire, option
or right of pre-emption) or any
mortgage, charge, pledge, lien,
assignment, hypothecation, security
interest, title retention or any other
security agreement or arrangement;
"Environment" any and all organisms (including man),
ecosystems, property and the following
media: air (including the air within
buildings and the air within other
natural
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or man-made structures whether above or
below ground); water (including water
under or within land or in drains or
sewers and coastal and inland waters);
and land (including land under water);
"Environmental Laws" any and all laws, whether civil,
criminal or administrative, which have
as a purpose or effect the protection of
the Environment, and/or the mitigation,
abatement, containment or prevention of
Harm and/or the provision of remedies in
respect of Harm; statutes and
subordinate legislation; regulations,
orders, ordinances; Permits, common law,
local laws and bye-laws; judgments,
notices, orders of any Competent
Authority;
"Environmental Liability" liability (including liability in
respect of Remedial Action) on the part
of either Company and/or any
of their directors or officers or
shareholders under Environmental Laws;
"ERA" Employment Rights Xxx 0000;
"Event" any payment, transaction, act, omission
or occurrence of whatever nature whether
or not either Company or the Purchaser
is a party thereto and including:
the execution of this Agreement and
completion of the sale of the Shares to
the Purchaser; and
the death of any person;
and references to an Event occurring on
or before Completion shall include an
Event deemed, pursuant to any Taxation
Statute, to occur or be treated or
regarded as occurring on or before
Completion;
"FA" Finance Act;
"FRSs" a financial reporting standard adopted
or issued by the ASB;
"Financial Year" a financial year within the meaning
ascribed to such expression by section
223, CA 85;
"Group" together the Companies and the
Subsidiaries (but for these purposes not
including Atlantech Italia Srl);
"Hardware" any and all computer, telecommunications
and network equipment;
"Harm" harm or damage to or other interference
with the Environment;
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"Hazardous Matter" any and all matter (whether alone or in
combination with other matter) including
electricity, heat, vibration, noise or
other radiation which may or is liable
to cause Harm;
"Holding Company" a holding company within the meaning
ascribed to such expression by sections
736 and 736A, CA 85;
"ICTA 1988" Income and Corporation Xxxxx Xxx 0000;
"Indemnities" the indemnities given by the Vendors in
clause 9;
"Intellectual Property" Patents, design rights, moral rights,
registered designs, Know-How, Copyright
(including rights in Software), Trade
Marks and rights arising in domain
names;
"Intellectual Property agreements or arrangements relating to
Agreements" the Proprietary Intellectual Property or
Third Party Intellectual Property;
"Investments" the companies listed in schedule 2 under
the heading "Investments";
"IT Contracts" any agreements or arrangements with
third parties relating to IT Systems or
IT Services, including all hire purchase
contracts or leases of Hardware used by
either Company or any of the
Subsidiaries, licences of Software used
by each Company or any of the
Subsidiaries, and other IT procurement;
"IP Materials" all documents, records, tapes, discs,
diskettes and any other
materials whatsoever containing
Copyright works, Know-How or Software;
"IT Services" any services provided by a third party
relating to the IT Systems or to any
other aspect of either Company's or any
of the Subsidiaries' data processing or
data transfer requirements, including
facilities management, bureau services,
hardware maintenance, software
development or support, consultancy,
source code deposit, recovery and
network services;
"IT Systems" Hardware and/or Software owned or used
by each Company;
"ITA" Inheritance Tax Xxx 0000;
"Know-How" trade secrets and confidential business
information including confidential
details of supply arrangements, customer
lists and pricing policy; sales targets,
sales statistics, market share
statistics, marketing surveys and
reports; marketing research; unpatented
technical and other information
including
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inventions, discoveries, processes and
procedures, ideas, concepts, formulae,
specifications, procedures for
experiments and tests and results of
experimentation and testing; information
comprised in Software; together with all
common law or statutory rights
protecting the same including by any
action for breach of confidence and any
similar or analogous rights to any of
the foregoing whether arising or granted
under the law of England or any other
jurisdiction;
"Legal and Beneficial Title" full and unrestricted title with the
benefit of quiet possession and free
from lawful interruption and
disturbance;
*** ***
"Minority Vendors" ***
*** ***
"Management Accounts" means the management accounts of each of
the Companies for the period from the
relevant Balance Sheet Date to 31 August
2002, copies of which are annexed to the
Disclosure Letter;
"Net Assets" in relation to each Company, its fixed
assets plus its current assets less its
liabilities as more fully described at
Part I of schedule 5 as at Completion
and as set out in the Audited Completion
Accounts;
"Patents" patents and applications for a patent in
the UK or any other jurisdiction;
"Permits" any and all licences, consents, permits,
authorisations or the like, made or
issued pursuant to or under, or required
by, Environmental Laws in relation to
the carrying on of the Business;
"Proceedings" any proceeding, suit or action arising
out of or in connection with this
Agreement;
"Properties" the properties of which short
particulars are set out in Part 1 of
schedule 4 and the expression "Property"
shall mean, where the context so admits,
any one or more of such properties and
any part or parts thereof;
"Proprietary Intellectual Intellectual Property owned by the
Property" Company;
"Provisional Consideration" the consideration payable for the Shares
as specified in clause 3.1;
__________
*** Certain information on this page has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
7
"Purchaser's Accountants" PricewaterhouseCoopers, LLP;
"Purchaser's Group" the Purchaser and its Affiliates;
"Purchaser's Solicitors" Xxxxxx & Xxxxxxx of 00 Xxxxxxxxxxx,
Xxxxxx XX0X 0XX;
"Registered Proprietary Proprietary Intellectual Property listed
Intellectual Property" in Part 1 of schedule 7;
"Remedial Action" (i) preventing, limiting, removing,
remedying, cleaning-up, abating or
containing the presence or effect of any
Hazardous Matter in the Environment
(including the Environment at the
Property); or (ii) carrying out
investigative work and obtaining legal
and other professional advice as is
reasonably required in relation to (i);
"RTPA" Restrictive Trade Practices Xxx 0000;
"Service Agreements" the service agreements in
the agreed terms between each of
Xxxxxxxx Xxxxx, Xxxxx Xxxx-Xxxxx,
Xxxxxxxx Xxxxxx and Xxxxx Xxxxxx;
"Shareholders' Agreements" *** Xxxxx Xxxx-Xxxxx, Xxxxxxxx Xxxx
Xxxxx, Xxxxxxxx Xxxxxxx Xxxxxx *** Xxxxx
Xxxxxx *** Xxxxx Xxxx-Xxxxx, Xxxxxxxx
Xxxx Xxxxx, Xxxxxxxx Xxxxxxx Xxxxxx,
Simon Xxxxx Xxxxxx ***
"Shares" all of the issued shares in the capital
of Atlantech and all of the issued
shares in the capital of Atlantech UK;
"Software" any and all computer programs in both
source and object code form, including
all modules, routines and sub-routines
thereof and all source and other
preparatory materials relating thereto,
including user requirements, functional
specifications and programming
specifications, ideas, principles,
programming languages, algorithms, flow
charts, logic, logic diagrams,
orthographic representations, file
structures, coding sheets, coding and
including any manuals or other
documentation relating thereto and
computer generated works;
"SSAP" a statement of standard accounting
practice or financial reporting standard
in force at the date hereof as issued by
the Institute of Chartered Accountants
in England and Wales and adopted by the
ASB as an Accounting Standard;
__________
*** Certain information on this page has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
8
*** ***
"subsidiary" a subsidiary within the meaning ascribed
to such expression by sections 736 and
736A, CA 85;
"subsidiary undertaking" a subsidiary undertaking within the
meaning ascribed to such expression by
section 258, CA 85;
"Subsidiary" the subsidiary of Atlantech named in
schedule 2 under the heading "The
Subsidiary";
"Taxation" or "Tax" as defined in the Tax Deed;
"Taxation Authority" as defined in the Tax Deed;
"Tax Deed" the deed in the agreed terms of even
date herewith containing certain
taxation covenants and indemnities
between the Covenantors (as defined
therein) and the Purchaser;
"Taxation Statute" any directive, statute, enactment, law
or regulation, wheresoever enacted or
issued, coming into force or entered
into providing for or imposing any
Taxation and shall include orders,
regulations, instruments, bye-laws or
other subordinate legislation made under
the relevant statute or statutory
provision and any directive, statute,
enactment, law, order, regulation or
provision which amends, extends,
consolidates or replaces the same or
which has been amended, extended,
consolidated or replaced by the same;
"Tax Warranties" the warranties set out in Part 2 of
schedule 3;
"TCGA" Taxation of Chargeable Gains Xxx 0000;
"Third Party means all Intellectual Property licensed
Intellectual Property" to the Company by a third party;
"TMA" Taxes Management Xxx 0000;
"Trade Marks" trade or service xxxx applications or
registered trade or service marks,
registered protected designations of
origin, registered protected geographic
origins, refilings, renewals or reissues
thereof, unregistered trade or service
marks, get-up and company names in each
case with any and all associated
goodwill and all rights or forms of
protection of a similar or analogous
nature including rights which protect
goodwill whether arising or granted
under the law of England or of any other
jurisdiction;
"Trade Union" as defined in section 1, TULRCA;
__________
*** Certain information on this page has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
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"TULRCA" Trade Union and Labour Relations
(Consolidation) Xxx 0000;
"TUPE" Transfer of Undertakings (Protection of
Employment) Regulations 1981 as amended;
"UK GAAP" applicable accounting standards,
principles and practices generally
accepted in the United Kingdom;
"Unregistered Proprietary Proprietary Intellectual Property other
Intellectual Property" than Registered Proprietary Intellectual
Property;
"US GAAP" applicable accounting standards,
principles and practices generally
accepted in the United States of
America;
"US Property" the property, brief particulars of which
are set out in part 2 of schedule 4;
"VAT" value added tax;
"VATA" Value Added Tax Xxx 0000;
"Vendors' Accountants" Xxxxx Xxxxxx of Yorkshire Bank Xxxxxxxx,
Xxxxxxxxx Xxxxxx, Xxxxx, Xxxx Xxxxxxxxx,
XX0 0XX;
"Vendors' Solicitors" DLA of Victoria Xxxxxx Xxxxx, Xxxxxxxx
Xxxxxx, Xxxxxxxxxx X0 0XX;
"Warranties" the warranties set out in clause 7 and
schedule 3;
"Warrantors" means each of Xxxxxxxx Xxxxx, Xxxxx
Xxxx-Xxxxx, Xxx. Xxxxxxxx Xxxxxx and
Xxxxx Xxxxxx whose addresses are set out
in schedule 1 provided that Xxxxx Xxxxxx
shall only give Warranties relating to
Atlantech UK and shall only be a
Warrantor for such purposes;
"in the agreed terms" in the form agreed between the Vendors
and the Purchaser and signed for the
purposes of identification by or on
behalf of each party.
1.2 The table of contents and headings in this Agreement are inserted for
convenience only and shall not affect its construction.
1.3 Unless the context otherwise requires words denoting the singular
shall include the plural and vice versa, references to any gender
shall include all other genders and references to persons shall
include bodies corporate, unincorporated associations and
partnerships, in each case whether or not having a separate legal
personality. References to the word "include" or "including" are to be
construed without limitation.
1.4 References to recitals, schedules and clauses are to recitals and
schedules to and clauses of this Agreement unless otherwise specified
and references within a schedule to paragraphs are to paragraphs of
that schedule unless otherwise specified.
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1.5 Save to the extent by which the liability of any party would thereby
be extended or increased, references in this Agreement to any statute,
statutory provision or EC Directive include a reference to that
statute, statutory provision or EC Directive as amended, extended,
consolidated or replaced from time to time (whether before or after
the date of this Agreement) and include any order, regulation,
instrument or other subordinate legislation made under the relevant
statute, statutory provision or EC Directive.
1.6 Words and expressions defined in the Tax Deed shall to the extent not
inconsistent bear the same meanings in this Agreement.
1.7 References to any English legal term for any action, remedy, method of
judicial proceeding, legal document, legal status, court, official or
any legal concept, state of affairs or thing shall in respect of any
jurisdiction other than England be deemed to include that which most
approximates in that jurisdiction to the English legal term.
1.8 Any reference to "writing" or "written" includes faxes and any
non-transitory form of visible reproduction of words.
1.9 Any agreement, covenant, representation, warranty, undertaking or
liability arising under this Agreement on the part of two or more
persons shall be deemed to be made or given by such persons jointly
and severally, unless otherwise expressly agreed.
1.10 In schedule 3, references to the Company shall be deemed to include a
reference to each of Atlantech and Atlantech UK and each of them
severally.
1.11 References to times of the day are to London time and references to a
day are to a period of 24 hours running from midnight.
2. SALE AND PURCHASE
2.1 Obligation to sell and purchase
Subject to the terms of this Agreement, each of the Vendors severally
shall sell, with full title guarantee, the number of Shares set
opposite his name in column (B) and/or (C), as appropriate, of
schedule 1 and the Purchaser shall purchase such interests in the same
together with all rights attaching thereto at the date of this
Agreement.
2.2 Dividends and distributions
The Purchaser shall be entitled to receive all dividends and
distributions declared, paid or made by the Company on or after the
date of this Agreement.
2.3 Sale of all Shares
The Purchaser shall not be obliged to complete the purchase of any of
the Shares unless the purchase of all the Shares is completed
simultaneously.
2.4 Declaration of Trust
Each of the Vendors severally acknowledge and undertake that pending
registration of the transfers of his shares (referred to in clause 2.1
above), he holds such Shares on trust for the Purchaser.
2.5 Power of Attorney
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Each Vendor hereby severally and irrevocably appoints the Purchaser as
his attorney for the purpose of exercising any rights, privileges or
duties attaching to his shares (as referred to in clause 2.1 above)
including receiving of notices of and attending and voting at all
meetings of the members of the Company from Completion to the day on
which the Purchaser or its nominee is entered in the register of
members of the Company as the holder of such shares, in each case in
such manner as the Purchaser shall in its discretion decide.
2.6 Specific Authorisation
For the purpose of sub-clause 2.5, each Vendor severally authorises:
2.6.1 the Company to send any notices in respect of his share
holdings (as referred to in clause 2.1 above) to the
Purchaser;
2.6.2 the Purchaser to complete and return proxy cards, consents
to short notice and any other document required or permitted
to be signed by such Vendor as a member.
3. CONSIDERATION
The aggregate consideration payable by the Purchaser to the Vendors
(or, in the case of the *** and Additional Revenue Related
Consideration, to the Warrantors only) for the purchase of the Shares
shall be:
3.1 Provisional Consideration
The sum of *** which shall be apportioned between the Vendors in the
amounts set out opposite their respective names in column (E) of
schedule 1 (subject to adjustment as provided in clause 6.2).
3.2 ***
***
3.3 Additional Consideration
***
(each such payment being an "Additional Consideration Payment" and
each such date being a "Payment Date")
in each case subject to the terms of clauses 7.5 and 9 and payable to
each of the Vendors in cash on the relevant Payment Date in an amount
equal to their pro rata entitlement as set out opposite their
respective names in column (D) of schedule 1 ("Pro Rata Entitlement")
to such Additional Consideration Payment PROVIDED THAT no Additional
Consideration shall become payable to a Defaulting Vendor and the
relevant Additional Consideration Payment shall be reduced by an
amount equal to the aggregate of any Defaulting Vendors' Pro Rata
Entitlement to the relevant Additional Consideration Payment and the
balance of the Additional Consideration Payment shall be payable to
the remaining Vendors.
For the purpose of this clause 3.3 a Vendor shall be a "Defaulting
Vendor" if:
(a) *** or
__________
*** Certain information on this page has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
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(b) in the case of each of *** on or prior to the relevant Payment
Date circumstances exist which ***;
(c) FURTHER PROVIDED THAT where at any time any of *** shall be
subject to and calculated in accordance with the following
calculation:
(A + B + C) x X = Y
where:
A = the relevant applicable reduction *** applicable in the event of
the further proviso above being relevant to ***
B = the *** applicable in the event of the further proviso above being
relevant to ***
C = the *** applicable in the event of the further proviso above being
relevant to ***
X = the applicable proposed Additional Consideration Payment
Y = the amount of the total aggregate deduction to be deducted from
the applicable Additional Consideration Payment
and for the avoidance of doubt this calculation shall be made on each
subsequent Payment Date taking into account each of A, B and C as
appropriate. For example, where A is applicable to that Payment Date
set out at sub-clause 3.2.1 it shall also be applied in relation to
Payment Dates applicable to sub-clauses 3.2.2 and 3.2.3.
The resulting Additional Consideration Payment (if any) on the
relevant Payment Date shall be paid by the Purchaser by way of
electronic transfer for same day value to the Vendors' Solicitors who
are irrevocably authorised to receive the same and whose receipt shall
be an effective discharge of the Purchaser's obligation to pay such
sum and the Purchaser shall not be concerned to see to the application
or be answerable for the loss or misapplication by the Vendors'
Solicitors of such sum. The Vendors' Solicitors shall distribute any
Additional Consideration Payment to the Vendors *** in amounts
calculated by reference to their Pro Rata Entitlement recalculated to
disregard the Pro Rata Entitlement of any Defaulting Vendor *** in the
circumstances referred to;
3.4 Additional Revenue Related Consideration
further additional payments on the following terms:
3.4.1 in the event that *** to be apportioned among the Warrantors
in the *** set out opposite their respective names
in column (G) of schedule 1 ("***") PROVIDED THAT if the ***
then the aggregate amount payable to the Warrantors shall be
calculated as follows:
***
***For the avoidance of doubt where *** no additional
payment shall be payable to the Warrantors (or repayable by
the Warrantors) under this sub-clause 3.4.1; and
__________
*** Certain information on this page has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
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3.4.2 in the event that *** the Warrantors shall be entitled to
further consideration in the amount of *** to be apportioned
among the Warrantors in their Warrantor Percentages PROVIDED
THAT if the ***, provided that, in the event that this
results in a negative amount no additional payment shall be
made to (or be payable or repayable by) the Warrantors under
this sub-clause 3.4.2.
The parties agree and shall each use reasonable endeavours
to procure that at least *** constituting the *** PROVIDED
THAT where there shall be less than such percentage actually
achieved an amount equal to the *** shall be added to ***
for the purposes of calculation of further consideration
under this sub-clause 3.4.2.
3.4.3 in the case of sub-clauses 3.4.1 and 3.4.2 calculations of
***:
(a) by the Chief Financial Officer of the Guarantor based
upon information prepared by the Company auditors such
officer to issue to the Purchaser and the Warrantors a
certificate evidencing the same as soon as practicable
following 31 December in each relevant year and in any
event not later than 28 February next following. The
Purchaser and the Warrantors shall have 30 days
following receipt of the certificate within which to
notify each other in writing of any disagreement or
difference of opinion relating to the auditor's
certificate (a "***") and the provisions of sub-clauses
6.1.4, 6.1.5, 6.1.6 and 6.1.7 shall apply mutatis
mutandis save that references to "***" shall be treated
as references to "***" and the reference in sub-clause
6.1.7 to "clause 6" shall be treated as a reference to
"clause 3.4". Failing such notice, the parties shall be
deemed to have accepted the auditor's certificate as
final and binding; and
(b) in accordance with US GAAP;
3.4.4 Payments (if any) to be made to the Warrantors under this
sub-clause 3.4 shall be made (subject always to the terms of
clause 7.5) on the earlier of *** as the case may be, or on
the next following Business Day should such date not fall on
a Business Day; and (ii) the date 10 Business Days following
acceptance, deemed acceptance or determination by the
Independent Accountant of the certificate of the Guarantor's
Chief Financial Officer in accordance with sub-clause
3.4.3(a) above. Any such payments shall be made by the
Purchaser by way of electronic transfer for same day value
to the Vendors' Solicitors who are irrevocably authorised to
receive the same and whose receipt shall be an effective
discharge of the Purchaser's obligation to pay such sum and
the Purchaser shall not be concerned to see to the
application or be answerable for the loss or misapplication
by the Vendors' Solicitors of such sum. Unless otherwise
paid by the Purchaser on or prior to 1 February in any
relevant year interest shall be calculated on the amount so
certified by the Chief Financial Officer as being *** (and
not more than such amount) from such date to the date of
payment at the rate of 1% above the base lending rate from
time to time of Barclays Bank plc.
3.5 In the event of a Change of Control at any time prior to ***, the
Vendors shall (subject always (i) in relation to payments of ***, to
the provisos at clause 3.3 on the facts as at the date of the Change
of Control, and (ii) to the terms of clauses 7.5 and 9) be ***.
__________
*** Certain information on this page has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
14
3.6 *** the Additional Revenue Related Consideration for the Shares
pursuant to clause 3.4 is to be determined) the future conduct of the
Business will have an effect on the *** for each of the calendar years
*** (the "Consideration Years"). Accordingly, the Purchaser
undertakes with each Warrantor that during the Consideration Years it
will not *** Additional Revenue Related Consideration.
3.7 Each of the Vendors hereby: (i) confirms and acknowledges to each of
the parties to this Agreement his agreement that the Consideration to
be paid to him for the shares set opposite his name in column (B)
and/or (C), as appropriate, of schedule 1 being sold pursuant to
clause 2 above is, as between each of the Vendors, fair and
reasonable; and (ii) irrevocably waives any and all claims which he
may have against any party to this Agreement for a different
allocation of the Consideration.
3.8 Where any reorganisation, amalgamation, reconstruction, merger or
other transaction in relation to the business of either Company shall
have (or is likely to have) the effect of making the ***, the
Purchaser and the Warrantors agree to consult in good faith with a
view to formulating (and shall use best endeavours to agree in good
faith) such arrangements or treatment as shall be reasonably necessary
to resolve such effect.
4. WAIVERS OF PRE-EMPTION
4.1 Each of the Vendors hereby severally waives all rights of pre-emption
or other rights over any of the Shares conferred on him either by the
articles of association of the Company or under either Shareholders'
Agreement or in any other way.
4.2 Each of the Vendors hereby severally agrees that as at and with effect
from Completion each Shareholders' Agreement shall terminate without
further liability of any party thereto without prejudice to any
outstanding claims at Completion not being claims against either of
the Companies. For the avoidance of doubt, each party releases each
Company (as applicable) from all and any liability whatsoever under or
pursuant to the Shareholders' Agreements with immediate effect from
Completion.
5. COMPLETION
5.1 Warrantors' obligations
At Completion:
5.1.1 the Warrantors shall deliver to the Purchaser each of the
documents listed in Part 1 of schedule 6; and
5.1.2 the Warrantors shall procure that all necessary steps are
taken properly to effect the matters listed in Part 2 of
schedule 6 at board meetings of each Company and the
Subsidiary and shall deliver to the Purchaser duly signed
minutes of all such board meetings.
5.2 Purchaser's obligations
Subject to the Warrantors complying with their obligations under
sub-clause 5.1 above the Purchaser shall at Completion:
5.2.1 pay the Provisional Consideration *** together with *** in
respect of its liability pursuant to clause 16.1.2 and ***
in respect of the repayment of loans to Atlantech
__________
*** Certain information on this page has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
15
from the directors by way of electronic transfer for same
day value to the Vendors' Solicitors who are irrevocably
authorised to receive the same and whose receipt shall be an
effective discharge of the Purchaser's obligation to pay
such sum and the Purchaser shall not be concerned to see to
the application or be answerable for the loss or
misapplication by the Vendors' Solicitors of such sum; and
5.2.2 ***and
5.2.3 deliver to the Warrantors a counterpart Tax Deed duly
executed by the Purchaser.
Within 2 Business Days following Completion the Purchaser shall
deliver to the Warrantors a copy of the minutes of a meeting of the
directors of the Purchaser and Guarantor authorising the execution by
the Purchaser and Guarantor of this Agreement, Tax Deed and any other
documents in the agreed terms executed by the Purchaser and Guarantor
(such copy minutes being certified as correct by the secretary of the
Purchaser and Guarantor).
5.3 Company records
Forthwith following Completion each Warrantor severally shall, and
shall procure that any other Vendor shall, without delay send to the
Purchaser at its registered office for the time being, all records,
correspondence, documents, files, memoranda and other papers relating
to the Companies and each of the Subsidiaries or the Business which
are in their possession or control and not kept at any of the
Properties, save for those required for the purpose of preparing the
Completion Accounts which shall be sent to the Purchaser with the
Completion Accounts in accordance with clause 6.1.1.
6. COMPLETION ACCOUNTS
6.1 Preparation of Completion Accounts
6.1.1 Prior to or on 30 November 2002, the Warrantors shall
procure that the Vendors' Accountants shall provide to the
Purchaser and the Purchasers' Accountants the Completion
Accounts together with all relevant schedules and relevant
information and working papers supporting the balances in
the individual Company accounts as set out in the Completion
Accounts. Prior to or on 1 February 2003, the Chief
Financial Officer of the Guarantor shall prepare and issue
to the Warrantors a certificate, evidencing and based upon
the review carried out by the Purchaser's Accountants,
setting out a closing balance sheet audit of the Completion
Accounts (the "Audited Completion Accounts"). The Warrantors
shall cooperate with and provide (or otherwise procure) all
information and documents reasonably requested by the said
officer and/or Purchaser's Accountants in connection with
the preparation of the Audited Completion Accounts. ***
6.1.2 The Completion Accounts shall consist of a balance sheet for
each Company as at the close of business on the date of
Completion and shall be prepared in accordance with the form
and principles set out in schedule 5.
6.1.3 The Warrantors shall have 30 Business Days after receipt of
the Audited Completion Accounts pursuant to sub-clause 6.1.1
within which to notify the Purchaser in writing of their
agreement or any disagreement or difference of opinion
relating to the Audited Completion Accounts. Failing any
such notice, the parties shall be deemed
__________
*** Certain information on this page has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
16
to have accepted such accounts as accurate and such accounts
shall be deemed final and binding.
6.1.4 If within the period of 30 Business Days referred to in
sub-clause 6.1.3 above the Warrantors notify the Purchaser
of any disagreement or difference of opinion relating to the
Audited Completion Accounts ("Notice of Disagreement") and
if the parties are able to resolve such disagreement or
difference of opinion within 10 Business Days of the Notice
of Disagreement, the parties shall be deemed to have
accepted such accounts (as agreed) as accurate.
6.1.5 If the Purchaser and Warrantors are unable to reach
agreement within 10 Business Days of the Notice of
Disagreement, the matter in dispute shall be referred to an
independent chartered accountant (the "Independent
Accountant") to be appointed (in default of nomination by
agreement between the Warrantors and the Purchaser within 15
Business Days of the date of the Notice of Disagreement) by
the President for the time being of the Institute of
Chartered Accountants in England and Wales.
6.1.6 The Independent Accountant shall act as an expert and not as
an arbitrator, the Arbitration Xxx 0000 shall not apply and
his decision shall (in the absence of manifest error) be
final and binding on the Vendors and the Purchaser for all
the purposes of this Agreement. The costs of the Independent
Accountant shall be apportioned between the Vendors and the
Purchaser as the Independent Accountant shall decide but
each party shall be responsible for its own costs of
presenting its case to the Independent Accountant.
6.1.7 Each of the Warrantors and the Purchaser shall, and shall
direct that their respective advisors shall, give all
assistance and access to all additional information to each
other that they may reasonably require to assist them to
make decisions and resolve any disputes under this clause 6
expeditiously.
6.2 Adjustment of Provisional Consideration
The Provisional Consideration shall be adjusted after Completion in
accordance with the following provisions of this sub-clause 6.2.
6.2.1 ***
6.2.2 Any amounts to be paid under sub-clause 6.2.1 shall:
(a) be paid within 15 Business Days after the date on which
the Audited Completion Accounts have been agreed or
settled (whether under sub-clause 6.1.3 or 6.1.4 or by
virtue of a decision of the Independent Accountant or
otherwise) together with interest on the amount to be
paid calculated at the rate of *** from 1 February 2003
until the date of actual payment; and
(b) be made to the Vendors' Solicitors or the Purchaser's
Solicitors (as the case may be) who are irrevocably
authorised to receive the same and whose receipt shall
be an effective discharge of the Vendor's or
Purchaser's obligation to pay such sum and the Vendors
or Purchaser (as the case may be) shall not be
concerned to see to the application or be answerable
for the loss or misapplication of such sums by the
Vendors' Solicitors or the Purchaser's Solicitors, as
the case may be.
__________
*** Certain information on this page has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
17
7. WARRANTIES
7.1 Extent of Warranties
In consideration of the Purchaser agreeing to purchase the Shares on
the terms contained in this Agreement, each of the Warrantors hereby
in relation to each of (a) the Companies and (b) the Subsidiary and
Atlantech Italia Srl, jointly and severally warrants and undertakes to
the Purchaser in the terms set out in Schedule 3 and Schedule 9
respectively.
7.2 Obligation to make enquiries
Where any of the Warranties is made or given "so far as the Warrantors
are aware", such Warranty shall be deemed to be given to the best of
the knowledge, information and belief of each of Xxxxxxxx Xxxxx, Xxxxx
Xxxx-Xxxxx, Xxxxxxxx Xxxxxx and, in relation to Atlantech UK only,
Xxxxx Xxxxxx.
7.3 Information supplied by the Companies and Subsidiaries
Any information supplied by or on behalf of any of the Companies or on
behalf of any of the Subsidiaries (or by any officer, employee or
agent of any of them) to the Warrantors or their advisers in
connection with the Warranties, the Indemnities or the Tax Deed or the
information Disclosed in the Disclosure Documents shall not constitute
a warranty, representation or guarantee as to the accuracy of such
information in favour of the Warrantors and each of the Warrantors
hereby undertake to the Purchaser to waive irrevocably any and all
claims which it might otherwise have against the Companies or any of
the Subsidiaries or against any officer, employee or agent of any of
them in respect of such claims other than in the case of fraud.
7.4 Separate and independent warranties
Each of the Warranties set out in the separate paragraphs of schedule
3 shall be separate and independent and save as expressly otherwise
provided shall not be limited by reference to any other such Warranty
or by anything in this Agreement, the Disclosure Documents or the Tax
Deed.
7.5 Set-off by Purchaser
7.5.1 The Purchaser shall (without prejudice to its other rights
hereunder) be entitled in its discretion to set off against
any amount otherwise due and payable to each Warrantor under
any of the provisions of clauses 3.3, 3.4 or 6.2 any amount
due by such Warrantor to the Purchaser (a) under clause 6.2
or clause 9 of this Agreement; (b) under the Tax Deed;
and/or (c) pursuant to a Claim in respect of (i) any
liability which has been finally determined in accordance
with sub-clause 7.5.2 below, and/or (ii) any applicable
Contingent Claim Amount provided that the Purchaser has
provided the Warrantor with an opinion of counsel of at
least 10 years' call that, were such Claim to be the subject
of judicial proceedings, the Purchaser would have a
reasonable prospect of success in respect thereof. The
Purchaser agrees that where it determines to exercise its
rights of set-off under this sub-clause 7.5 it shall (save
in respect of any sum due to the Purchaser under the Tax
Deed or clause 6.2 of this Agreement and without prejudice
to its right (as set out above) to set off against any
payment due to the Warrantor under sub-clause 6.2) first
apply such rights against payment of consideration otherwise
due to the Warrantor pursuant to sub-clauses 3.3.3, 3.3.2
and 3.3.1 respectively and in such order of priority.
18
7.5.2 For the purposes of sub-clause 7.5.1 a liability of a
Warrantor shall be deemed to be finally determined when
either (i) judgement has been given by a court of competent
jurisdiction and the time limit for appeal has expired, or
(ii) final appellate judgement has been given with no
further right of appeal or (iii) the claim has been settled
by agreement in writing between the Purchaser and the
(including, in relation to any payment due by the Warrantor
to the Purchaser under sub-clause 6.2.1. as determined
pursuant to sub-clause 6.1.3, 6.1.4 or by virtue of a
decision of the Independent Accountant).
7.5.3 If a claim in respect of which the Purchaser has set off a
Contingent Claim Amount is finally determined in accordance
with sub-clause 7.5.2 for a lesser amount than the
Contingent Claim Amount, the balance of the Contingent Claim
Amount in excess of the amount payable as finally determined
shall be paid within 5 Business Days to the relevant
Warrantor.
7.6 Reliance
The Purchaser has entered into this Agreement upon the basis of and in
reliance upon the Warranties and the Indemnities.
7.7 Payments by Warrantors
Any payment made by the Warrantors in respect of a breach of any
Warranties or payment made under the Indemnities or the Tax Deed, or
any other payment made pursuant to this Agreement, shall be and shall
be deemed to be pro tanto a reduction in the price paid for the Shares
under this Agreement.
7.8 Minority Vendor Warranties
7.8.1 Each of the Minority Vendors severally warrants and
undertakes to the Purchaser that:
(a) he or she has full power to enter into and perform this
Agreement and this Agreement constitutes binding
obligations on him/her in accordance with its terms;
(b) there is no Encumbrance or any form of agreement
(including conversion rights and rights of pre-emption)
on, over or affecting the Shares held by him/her and
there is no agreement or commitment to give or create
any of the foregoing. No claim has been made by any
person to be entitled to any of the foregoing; and
(c) he/she is entitled to sell and transfer the Shares held
by him/her to the Purchaser with full title guarantee
and otherwise on the terms set out in this Agreement.
7.8.2 ***
7.8.3 ***
7.9 The only warranties (including the Warranties) given in relation to
intellectual property, real property, information technology and
telecommunications, and environmental matters are
__________
*** Certain information on this page has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
19
those warranties contained in paragraphs 18, 8, 19 and 9 respectively
of part 1 of schedule 3 and no other warranties (including the
Warranties) shall be given in relation to the same.
7.10 Purchaser's and Guarantor's warranties
The Purchaser and the Guarantor each severally warrant to each Vendor
that it has full power and capacity to enter into and perform this
Agreement, the Tax Deed and each of the documents in the agreed terms
to which it is a party and this Agreement constitutes, and the Tax
Deed and each other document in agreed terms to which it is a party
when executed will constitute binding obligations on it in accordance
with their terms.
8. LIMITATION OF WARRANTORS' LIABILITY
8.1 Limitations on liability
The liability of the Warrantors:
8.1.1 in respect of any claim under the Warranties shall be
limited as provided in schedule 8
but so that the limitations on the liability of the Warrantors under
this sub-clause 8.1 and schedule 8 shall not apply in relation to the
Warranties set out in paragraphs 1.2 and 2.4.1 of schedule 3.
8.2 Exclusions from clause 8
Notwithstanding any other provision of this Agreement, the provisions
of this clause 8 and schedule 8 shall not apply to any claim:
8.2.1 made against the Warrantors in the case of any fraud,
dishonesty, wilful misstatement or wilful omission by or on
behalf of the Warrantors provided that the Warrantors shall
be solely responsible for their own fraudulent, dishonest
acts or omissions or wilful misstatements or omissions; or
8.2.2 made under the Indemnities, other than paragraphs 6.3 and
6.5 of part 2 of schedule 8 which shall apply thereto.
8.3 The parties agree that rescission shall not be available as a remedy
for any breach of this Agreement and agree not to claim this remedy.
9. INDEMNITY
9.1 The Warrantors undertake to indemnify and keep the Purchaser
indemnified (contracting for itself and as trustee for its officers,
directors, agents and employees) from and against and in respect of
*** which may be suffered or incurred by the Purchaser or the
Companies PROVIDED THAT in the event that *** is less than *** add
such amount to the Additional Consideration Payment due on such date.
Without prejudice to the Warrantors' obligation under this indemnity,
the Purchaser agrees that any amount due and payable hereunder from
the Warrantors to the Purchaser shall first (to the full extent
possible) be set off and deducted from any amount payable to the
Warrantors under sub-clauses 3.3.3, 3.3.2 and 3.3.1 and in such order
of priority.
__________
*** Certain information on this page has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
20
9.2 Any amount payable under the provisions of clause 9.1 shall be made to
the Vendors' Solicitors or the Purchaser's Solicitors (as the case may
be) who are irrevocably authorised to receive the same and whose
receipt shall be an effective discharge of the Vendor's or Purchaser's
obligation to pay such sum and the Vendors or Purchaser (as the case
may be) shall not be concerned to see to the application or be
answerable for the loss or misapplication of such sums.
9.3 For the purpose of clause 9.1 the ***.
9.4 For the avoidance of doubt, the provisions of clause 8 and schedule 8
shall not apply to this clause 9, other than paragraphs 6.3 and 6.5 of
part 2 of schedule 8, which shall apply.
9.5 The Purchaser agrees and undertakes to the Warrantors to *** and
further agrees in good faith to ***.
10. PROTECTION OF GOODWILL
10.1 Covenants
As further consideration for the Purchaser agreeing to purchase the
Shares on the terms contained in this Agreement and with the intent of
assuring to the Purchaser the full benefit and value of the goodwill
and connections of the Group and as a constituent part of the sale of
the Shares, each of Xxxxxxxx Xxxxx, Xxxxx Xxxx-Xxxxx, Xxxxxxxx Xxxxxx
and Xxxxx Xxxxxx (the "Covenantors") hereby undertake to the Purchaser
(contracting for itself and on behalf of each Company and of each of
the Subsidiaries) that (except whilst an employee of the Group acting
in that capacity or with the written consent of the Purchaser) they
shall not whether on their own behalf or with or on behalf of any
person and whether directly or indirectly by any person or business
controlled by them or any Connected Person:
10.1.1 in the period from Completion to the date falling three
years after Completion, carry on or be employed, engaged,
concerned, interested or in any way assist within the United
Kingdom in any business which may in any way be in
competition with all or part of the Business provided that
nothing in this sub-clause 10.1.1 shall prevent the
Covenantors from holding for investment purposes only any
units of an authorised unit trust and/or not more than five
(5) per cent. of any class of the issued share or loan
capital of any company quoted on a recognised investment
exchange (as defined in the Financial Services and Markets
Act 2000);
10.1.2 in the period from Completion to the date falling three
years after Completion, canvass, solicit or approach or
cause to be canvassed, solicited or approached (in relation
to a business which may in any way compete with all or part
of the Business) the custom of any person who at any time
during the 12 months preceding Completion shall have been a
client or customer of the Company or of any of the
Subsidiaries;
10.1.3 in the period from Completion to the date falling three
years after Completion, interfere or seek to interfere or
take such steps as may interfere with supplies to the
Company and/or any of the Subsidiaries from any suppliers
who shall have been supplying goods or services to the
Company or to any of the Subsidiaries for use in connection
with the Business at any time during the period of 12 months
prior to the date of Completion;
__________
*** Certain information on this page has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
21
10.1.4 in the period from Completion to the date falling three
years after Completion, offer employment to or employ or
offer to conclude any contract of services with senior
employees of the Company or of any of the Subsidiaries
employed in the capacity of director or manager of any
technical, IT, financial, sales, marketing, business
development or other managerial role with a view to using
the knowledge or skills of such person in connection with
any business which is intended to be competitive with the
Business or procure or facilitate the making of such an
offer by any person, firm or company or entice or endeavour
to entice any such employees of the Company or of any of the
Subsidiaries to terminate their employment with the Company
or any of the Subsidiaries;
10.1.5 at any time after Completion use as a trade or business name
or xxxx or carry on a business under a title containing the
word "Atlantech" or any other word(s) which is deliberately
calculated to resemble the same; or
10.1.6 at any time after Completion disclose to any person
whatsoever or use to the detriment of the Company or any
Subsidiary or otherwise make use of, or through any failure
to exercise all due care and diligence cause any
unauthorised use of, any Confidential Information including
Know-How relating or belonging to the Company or to any of
the Subsidiaries or in respect of which the Company or any
of the Subsidiaries is bound by an obligation of confidence
to a third party save as required by law or by any court of
competent jurisdiction.
Each undertaking contained in this sub-clause 10.1 shall be read and
construed independently of the other undertakings herein as an
entirely separate and severable undertaking.
10.2 Severability of covenants
Whilst the undertakings in sub-clause 10.1 are considered by the
parties to be reasonable in all the circumstances, if any one or more
should for any reason be held to be invalid but would have been held
to be valid if part of the wording thereof was deleted or the period
thereof reduced or the range of activities or area covered thereby
reduced in scope, the said undertakings shall apply with the minimum
modifications necessary to make them valid and effective.
10.3 Information in the public domain
The restriction contained in sub-clause 10.1.6 shall not extend to any
confidential or secret information which may come into the public
domain otherwise than through the default of the Warrantors.
11. ANNOUNCEMENTS
11.1 Restrictions on announcements
Each Vendor severally agrees that no press conference, announcement or
other communication concerning Confidential Information or the
transactions referred to in this Agreement, or in connection with the
Group or otherwise relating to the financial condition or trading or
financial prospects of the Group, shall be made or despatched by such
Vendor or his agents, employees or advisers to any third party without
the prior written consent of the Purchaser save as may be required by
any:
11.1.1 law; or
11.1.2 existing contractual arrangements;
22
provided such communication shall be made only after consultation with
the Purchaser.
11.2 Time limit
The restrictions contained in this clause 11 shall continue to apply
after Completion without limit in time.
12. FURTHER ASSURANCE
The Warrantors shall, from time to time on being required to do so by
the Purchaser, now or at any time in the future, do or procure the
doing of all such acts and/or execute or procure the execution of all
such documents in a form satisfactory to the Purchaser as the
Purchaser may reasonably consider necessary for giving full effect to
this Agreement and securing to the Purchaser the full benefit of the
rights, powers and remedies conferred upon the Purchaser in this
Agreement.
13. ASSIGNMENT
13.1 Limited assignment
No party may assign the benefit of this Agreement whether absolutely
or by way of security except (in the case of the Purchaser only) by
way of an absolute assignment to an Affiliate, provided always that
(a) such assignee executes a deed of adherence to this Agreement in a
form reasonably satisfactory to the Warrantors, (b) if such assignee
ceases to be an Affiliate of the Purchaser it shall forthwith execute
an assignment to an Affiliate of the Purchaser and (c) the Vendors'
liabilities under this Agreement are not thereby increased; save that
a party may assign such benefit absolutely or by way of security to a
person (other than to an Affiliate of the Purchaser as aforesaid) with
the prior consent in writing of the other parties, such consent not to
be unreasonably withheld or delayed and any purported assignment in
contravention of this clause shall be ineffective.
13.2 Successors in title
Subject to sub-clause 13.1, this Agreement shall be binding upon and
enure for the benefit of the personal representatives and assigns and
successors in title of each of the parties and references to the
parties shall be construed accordingly.
14. ENTIRE AGREEMENT: REMEDIES
14.1 Entire agreement
This Agreement and the documents referred to herein as being in the
agreed terms constitutes the whole and only agreement between the
parties relating to the subject matter hereof and supersedes and
extinguishes any prior drafts, previous agreements, undertakings,
representations, warranties and arrangements of any nature whatsoever,
whether or not in writing between the parties, in connection with the
subject matter hereof.
14.2 Remedies
The rights of any party under this Agreement are, except where
otherwise stated, independent, cumulative and without prejudice to all
other rights available to it whether as a matter of common law,
statute, custom or otherwise.
23
14.3 Non-exclusion of fraud
Nothing in this Agreement, the Tax Deed or in any other document
referred to herein shall be read or construed as excluding any
liability or remedy as a result of fraud.
15. WAIVER, VARIATION AND RELEASE
15.1 No waiver by omission, delay or partial exercise
No omission to exercise or delay in exercising on the part of any
party to this Agreement any right, power or remedy provided by law or
under this Agreement shall constitute a waiver of such right, power or
remedy or any other right, power or remedy or impair such right, power
or remedy. No single or partial exercise of any such right, power or
remedy shall preclude or impair any other or further exercise thereof
or the exercise of any other right, power or remedy provided by law or
under this Agreement.
15.2 Specific waivers to be in writing
Any waiver of any right, power or remedy under this Agreement must be
in writing and may be given subject to any conditions thought fit by
the grantor. Unless otherwise expressly stated, any waiver shall be
effective only in the instance and only for the purpose for which it
is given.
15.3 Variations to be in writing
No variation to this Agreement shall be of any effect unless it is
agreed in writing and signed by or on behalf of each party.
16. COSTS AND EXPENSES
16.1 Payment of costs
16.1.1 Subject to clause 16.1.2 and save as otherwise stated in
this Agreement, each party shall pay its own costs and
expenses in relation to the negotiation, preparation,
execution and carrying into effect of this Agreement and
other agreements forming part of the transaction.
16.1.2 The Purchaser shall, upon delivery of copy invoices to
demonstrate the amount of fees incurred by the Warrantors in
connection with the transaction contemplated by this
Agreement,***.
16.2 Company and Subsidiaries to pay no costs
For the avoidance of doubt, neither the Company nor any of the
Subsidiaries shall pay any legal or other professional charges and
expenses in connection with any investigation of the affairs of the
Group or the negotiation, preparation, execution and carrying into
effect of this Agreement.
17. PAYMENTS
Save as envisaged in clause 7.5, all payments to be made under this
Agreement shall be made in full without any set-off or counterclaim
and free from any deduction or withholding save as
__________
*** Certain information on this page has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
24
may be required by law in which event such deduction or withholding
shall not exceed the minimum amount which it is required by law to
deduct or withhold and the payer will simultaneously pay to the payee
such additional amounts as will result in the receipt by the payee of
a net amount equal to the full amount which would otherwise have been
receivable had no such deduction or withholding been required save
that in the case of a payment by a Warrantor or Vendor in respect of a
Claim any such deduction or withholding shall be treated as having
already been taken into account in the quantification of damages
pursuant to such Claim and provided always that in any event each
Warrantor's and each Vendor's liability in respect of this clause,
when aggregated with all other payments made by that Warrantor or
Vendor under this Agreement and the Tax Deed, will not exceed the
amount of Provisional Consideration received by him/her as set out
opposite his/her name in column (E) of schedule 1.
18. NOTICES
18.1 Form of notices
Any communication to be given in connection with the matters
contemplated by this Agreement shall except where expressly provided
otherwise be in writing and shall either be delivered by courier post
or facsimile transmission.
18.2 Address and facsimile
Such communication shall be sent to the address of the relevant party
referred to in this Agreement or the facsimile number set out below or
to such other address or facsimile number as may previously have been
communicated to the other party in accordance with this clause. Each
communication shall be marked for the attention of the relevant
person.
(a) Vendors /Warrantors- facsimile number ***. For the attention of
Xxxxxxxx Xxxxx (copied to DLA on facsimile number *** for the
attention of Xxxxx Xxxxxx).
(b) Purchaser - facsimile number 001 408 530 9143. For the attention
of the General Counsel.
(c) Guarantor - facsimile number 001 408 530 9143. For the attention
of the General Counsel.
And in the case of each of (b) and (c) above, copies to Xxxxxx &
Xxxxxxx, attention Xxxx Xxxx of facsimile number 001 650 463 2600.
18.3 Deemed time of service
A communication shall be deemed to have been served:
18.3.1 if delivered by courier at the address referred to in
sub-clause 18.2, at the time of delivery; and
18.3.2 if sent by facsimile to the number referred to in sub-clause
18.2, at the time of completion of transmission by the
sender.
If a communication would otherwise be deemed to have been delivered
outside normal business hours (being 9:30 a.m. to 5:30 p.m. on a
Business Day) in the time zone of the
___________
*** Certain information on this page has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
25
territory of the recipient under the preceding provisions of this
clause, it shall be deemed to have been delivered at the next opening
of such business hours in the territory of the recipient.
18.4 Proof of service
In proving service of the communication, it shall be sufficient to
show that delivery by courier was made or that the facsimile was
despatched and a confirmatory transmission report received.
18.5 Change of details
A party may notify the other parties to this Agreement of a change to
its name, relevant person, address or facsimile number for the
purposes of sub-clause 18.1 provided that such notification shall only
be effective on:
18.5.1 the date specified in the notification as the date on which
the change is to take place; or
18.5.2 if no date is specified or the date specified is less than
five clear Business Days after the date on which notice is
deemed to have been served, the date falling five clear
Business Days after notice of any such change is deemed to
have been given.
18.6 Non-applicability to Proceedings
For the avoidance of doubt, the parties agree that the provisions of
this clause 18 shall not apply in relation to the service of any writ,
summons, order, judgment or other document relating to or in
connection with any Proceedings.
19. COUNTERPARTS
19.1 Execution in counterparts
This Agreement may be executed in any number of counterparts and by
the parties on different counterparts, but shall not be effective
until each party has executed at least one counterpart.
19.2 One agreement
Each counterpart shall constitute an original of this Agreement but
all the counterparts shall together constitute one and the same
agreement.
20. INVALIDITY
Each of the provisions of this Agreement is severable. If any such
provision is or becomes illegal, invalid or unenforceable in any
respect under the law of any jurisdiction, the legality, validity or
enforceability in that jurisdiction of the remaining provisions of
this Agreement shall not in any way be affected or impaired thereby.
21. AGREEMENT TO CONTINUE IN FULL FORCE AND EFFECT
This Agreement together with the Tax Deed shall, to the extent that it
remains to be performed, continue in full force and effect
notwithstanding Completion.
22. CONFIDENTIALITY
22.1 Prohibition on disclosure
26
The Warrantors each hereby undertake with the Purchaser that they
shall both during and after the term of this Agreement preserve the
confidentiality of, and not directly or indirectly reveal, report,
publish, disclose or transfer or use for their own or any other
purposes Confidential Information except:
22.1.1 in the circumstances set out in sub-clause 22.2 below;
22.1.2 to the extent otherwise expressly permitted by this
Agreement; or
22.1.3 with the prior consent in writing of the party to whose
affairs such Confidential Information relates.
22.2 Permitted disclosures
The circumstances referred to in sub-clause 22.1.1 above are:
22.2.1 where the Confidential Information, before it is furnished
to the Warrantors, is in the public domain;
22.2.2 where the Confidential Information, after it is furnished to
the Warrantors, enters the public domain otherwise than as a
result of (i) a breach by the Warrantors of their
obligations in this clause 22 or (ii) a breach by the person
who disclosed that Confidential Information of a
confidentiality obligation and the Warrantors are aware of
such breach;
22.2.3 if and to the extent the Warrantors makes disclosure of the
Confidential Information to any person in compliance with
any requirement of law provided that any such information
disclosable shall be disclosed only to the extent required
by law and only after consultation with the Purchaser.
22.3 No time limit
The restrictions contained in this clause shall continue to apply
after Completion without limit in time.
22.4 The Purchaser agrees and undertakes that, in so far as it is able
under law, it shall, in circumstances where public disclosure of this
Agreement is required under regulation, endeavour to limit any
disclosure of and keep confidential provisions of this Agreement
relating to ***.
23. GUARANTEE
23.1 In consideration of the Vendors' obligations under this Agreement, the
Guarantor unconditionally and irrevocably guarantees to the Vendors
the due and punctual performance by the Purchaser of the Purchaser's
obligations under or pursuant to this agreement and the Tax Deed
("Guaranteed Obligations") and agrees to indemnify the Vendors against
all losses, damages, costs and expenses (including reasonable legal
costs and expenses) which the Vendors may suffer or incur arising
directly from any breach by the Purchaser of the Guaranteed
Obligations.
23.2 The Guarantor shall not in any way or to any extent be released from
its obligations under this agreement by reason of any time or other
indulgence, waiver, release or discharge granted by
__________
*** Certain information on this page has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
27
the Vendors to the Purchaser or to any third party or by the
acceptance of any composition from or the making of any arrangement
with the Purchaser or any third party or any circumstances or any
provision or rule of law, whether statutory or otherwise, affecting or
preventing recovery from the Purchaser of any sum due or rendering any
debt, obligation or liability of the Purchaser void or unenforceable
and which but for this provision might operate to exonerate or
discharge the Guarantor from its obligations to the Vendors under this
agreement and/or the Tax Deed, and this guarantee shall continue in
force until the Purchaser or the Guarantor on its behalf shall have
fully performed and discharged all the Guaranteed Obligations. Any
settlement or discharge between the Vendors and the Purchaser shall be
subject to the condition that no security or payment to the Vendors by
the Purchaser or any third party shall be avoided or reduced by virtue
of any provision or enactment relating to bankruptcy, insolvency or
liquidation for the time being and from time to time in force.
23.3 Without prejudice to the rights of the Vendors against the Purchaser
as principal debtor, the Guarantor shall as between the Vendors and
the Guarantor be deemed principal debtor in respect of the Guaranteed
Obligations and not merely a surety and accordingly it shall not be
necessary for the Vendors before seeking to enforce this guarantee to
seek to enforce any security or lien they may hold from the Purchaser
or any third party or otherwise to take any steps or proceedings
against the Purchaser.
24. GOVERNING LAW AND JURISDICTION
24.1 English law
This Agreement shall be governed by and construed in accordance with
English law.
24.2 Courts of England and Wales
24.2.1 The parties to this Agreement irrevocably agree that the
courts of England shall have non-exclusive jurisdiction to
settle any dispute which may arise out of or in connection
with this Agreement and that accordingly any Proceedings may
be brought in such courts.
24.2.2 The submission to the jurisdiction of the English courts
referred to in clause 24.2.1 above shall not (and shall not
be construed so as to) limit the right of any party to take
any action or proceedings which may arise out of or in
connection with this Agreement in any other court of
competent jurisdiction (including without limitation in the
United Sates of America) nor shall the taking of proceedings
in the English courts preclude the taking of any such action
or proceedings in any other court of competent jurisdiction
(whether concurrently or not) if and to the extent permitted
by applicable law.
24.3 The Purchaser and the Guarantor hereby appoint Xxxxxx & Xxxxxxx (Attn:
Xxxxxxx Xxxx) of 00 Xxxxxxxxxxx, Xxxxxx XX0X 0XX to accept service on
their behalf of any proceedings which may be commenced pursuant to
this clause in the courts of England.
24.4 Each of the parties hereby irrevocably waives any objection which they
might now or hereafter have to the courts referred to in this clause
24 being nominated as the forum to hear and determine any proceedings
and to settle any disputes and agree not to claim that any such court
is not a convenient or appropriate forum.
24.5 A person who is not a party to this Agreement shall have no right
under the Contracts (Right of Third Parties) Xxx 0000 to enforce any
of its terms.
28
EXECUTED AS A DEED by the hands of the parties or their duly
authorised representatives on the date first appearing at the head of
this Agreement.
29
SCHEDULE 1
THE VENDORS
-----------------------------------------------------------------------------------------------------------------------------
(A) (B) (C) (D) (E) (F) (G)
VENDOR *** *** *** Provisional *** ***
Consideration
[Pound]
-----------------------------------------------------------------------------------------------------------------------------
*** *** *** *** *** *** ***
-----------------------------------------------------------------------------------------------------------------------------
*** *** *** *** *** *** ***
-----------------------------------------------------------------------------------------------------------------------------
*** *** *** *** *** *** ***
-----------------------------------------------------------------------------------------------------------------------------
Xxx. X. Xxxxxx *** *** *** *** *** ***
***
-----------------------------------------------------------------------------------------------------------------------------
*** *** *** *** *** *** ***
-----------------------------------------------------------------------------------------------------------------------------
*** *** *** *** *** *** ***
-----------------------------------------------------------------------------------------------------------------------------
Xx. XX Xxxx-Xxxxx *** *** *** *** *** ***
***
-----------------------------------------------------------------------------------------------------------------------------
Xxxxxxxx Xxxxx *** *** *** *** *** ***
***
-----------------------------------------------------------------------------------------------------------------------------
Xxxxx Xxxxxx *** *** *** *** *** ***
***
-----------------------------------------------------------------------------------------------------------------------------
*** *** *** *** *** *** ***
-----------------------------------------------------------------------------------------------------------------------------
*** *** *** ***
-----------------------------------------------------------------------------------------------------------------------------
__________
*** Certain information on this page has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
30
SCHEDULE 2
THE COMPANIES
A. ATLANTECH MEDICAL DEVICES LIMITED
Registered Number: 3071270
Registered Office: Atlantech House, Freemans Way,
Xxxxxxxxx Xxxxxxxx Xxxx, Xxxxxxxxx,
Xxxxx Xxxxxxxxx XX0 0XX
Date and place of incorporation: 22 June 1995, UK
Secretary: Xxxxxxxx Xxxxxxx Xxxxxx
VAT Number: 664743216
Tax District and Reference Number: 318/A624 Harrogate
Accounting Reference Date: 31 December
Auditors: Xxxxx Xxxxxx, Yorkshire Bank Xxxxxxxx,
Xxxxxxxxx Xxxxxx, Xxxxx XX0 0XX
Solicitors: DLA, Xxxxxxxx Xxxxxx Xxxxx,
Xxxxxxxx Xxxxxx,
Xxxxxxxxxx X0 0XX
Authorised Share Capital: (pound)50,000
Issued and fully paid-up Share Capital: (pound)19,899 consisting of 15,678
ordinary "A" shares of (pound)1 each
and 4,221 ordinary "B" shares of
(pound)1 each
Loan Capital: None
Directors: Xxxxxxxx Xxxxxx
***
Xxxxx Xxxx-Xxxxx
***
Xxxxxxxx Xxxxx
***
*** Certain information on this page has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
31
B. ATLANTECH MEDICAL DEVICES (UK) LIMITED
Registered Number: 3156447
Registered Office: Atlantech House, Freemans Way,
Xxxxxxxxx Xxxxxxxx Xxxx, Xxxxxxxxx,
Xxxxx Xxxxxxxxx XX0 0XX
Date and place of incorporation: 1 February 1996, UK
Secretary: Xxxxxxxx Xxxxxxx Xxxxxx
VAT Number: 664813713
Tax District and Reference Number: 318/A648 Harrogate
Accounting Reference Date: 30 September
Auditors: Xxxxx Xxxxxx, Yorkshire Bank Xxxxxxxx,
Xxxxxxxxx Xxxxxx, Xxxxx XX0 0XX
Solicitors: DLA, Xxxxxxxx Xxxxxx Xxxxx, Xxxxxxxx
Xxxxxx,Xxxxxxxxxx X0 0XX
Authorised Share Capital: (pound)200
Issued and fully paid-up Share Capital: (pound)160 consisting of 160 ordinary
shares of (pound)1 each
Loan Capital: None
Directors: Xxxxxxxx Xxxxxx
***
Xxxxx Xxxxxx
***
Xxxxx Xxxx-Xxxxx
***
Xxxxxxxx Xxxxx
***
THE SUBSIDIARY
A. Atlantech Medical Devices, (USA) Inc.
Registered Number: P01000052983 Registered office: c/o Xxxxx Xxxxxxxxx,
Atlas Xxxxxxxx, P.A., 000 Xxxx Xxx Xxxx Xxxxxxxxx, Xxxxx 0000, Xxxx
Xxxxxxxxxx, Xxxxxxx 00000
Date and place of incorporation: Florida, 29 May 2001
Authorised share capital: $100 (divided into 100,000 shares of $0.001 each).
Issued and fully paid-up share capital: $100
Directors: Xxxxxxxx Xxxxx, Xxxxxxxx Xxxxxx and Xxxxx Xxxx-Xxxxx
***Certain information on this page has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
32
THE ASSOCIATED COMPANIES
A. Atlantech Italia Srl
Registered number: 03207310966
Registered office: Xxx X. Xxxxxx, 0, 00000 Xxxxxxxxx (XX), Xxxxx
Date and place of incorporation: Monza, Milan on 26 July 2002
***
***
Directors: Dr Pier Xxxxx Xxxxxxx Cavazzoni (sole director)
B. Atlantech Medizinsche Produckte GmbH
Registered number: FN 182571
Registered office: Xxxxxxxxxxxxxxx 00, 0000 Xxxxxxxxx
Date and place of incorporation: Innsbruck, 3 May 1999
***
Directors: Xxxxxx Xxxx, Xxxxx Xxxx-Xxxxx
INVESTMENTS
A. ***
B. ***
__________
***Certain information on this page has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
33
SCHEDULE 3
THE WARRANTIES
Note that under clause 1.10 references in this schedule 3 to the
Company shall be deemed to apply to each of the Companies and each of
them severally.
PART 1
GENERAL WARRANTIES
1. Preliminary
1.1 Information
The facts set out in the recitals and schedules 1, 2 and 4 and all
information contained in the Disclosure Documents are true and
accurate and not misleading. There is no fact or matter which has not
been disclosed which renders any such information untrue, inaccurate
or misleading in any material respect.
1.2 Power to contract
Each Warrantor has full power to enter into and perform this Agreement
and the Tax Deed respectively and this Agreement constitutes, and the
Tax Deed when executed will constitute, binding obligations on each
Warrantor in accordance with their terms.
2. The Company
2.1 Memorandum and articles of association
The copy of the memorandum and articles of association of the Company
which is comprised in the Disclosure Documents is true and complete in
all respects and has embodied in it or annexed to it a copy of every
such resolution and agreement as is referred to in section 380(4), CA
85 and the Company has at all times carried on its business and
affairs in all material respects in accordance with its memorandum and
articles of association and all such resolutions and agreements.
2.2 Statutory returns
The Company has complied in all material respects with the provisions
of the Companies Acts and all returns, particulars, resolutions and
other documents required to be filed with or delivered to the
Registrar of Companies or to any other applicable regulatory or
governmental authority by the Company have been correctly and properly
prepared in all material respects and so filed or delivered.
2.3 Share capital
2.3.1 The Shares constitute the whole of the issued share capital
of the Company. There is no Encumbrance or any form of
agreement (including conversion rights and rights of
pre-emption) on, over or affecting the Shares or any
unissued shares, debentures or other securities of the
Company and there is no agreement or commitment to give or
create any of the foregoing. No claim has been made by any
person to be entitled to any of the foregoing and no person
has the right (exercisable now or in the future and whether
contingent or not) to call for the issue of any share or
loan capital of the Company under any of the foregoing. The
Warrantors are entitled to sell and
34
transfer the Shares to the Purchaser with full title
guarantee and otherwise on the terms set out in this
Agreement.
2.3.2 The Company has not at any time:
(a) repaid, redeemed or purchased (or agreed to repay,
redeem or purchase) any of its own shares, or otherwise
reduced (or agreed to reduce) its issued share capital
or any class of it or capitalised (or agreed to
capitalise) in the form of shares, debentures or other
securities or in paying up any amounts unpaid on any
shares, debentures or other securities, any profits or
reserves of any class or description or passed (or
agreed to pass) any resolution to do so; or
(b) directly or indirectly provided any financial
assistance for the purpose of the acquisition of shares
in the Company or any holding company of the Company or
for the purpose of reducing or discharging any
liability incurred in such an acquisition whether
pursuant to sections 155 and 156, CA 85 or otherwise.
2.4 Solvency
The Company has not stopped payment and is not insolvent nor unable to
pay its debts according to section 123, Insolvency Xxx 0000. No order
has ever been made or petition presented or resolution passed for the
winding up of the Company and no distress, execution or other process
has ever been levied on any of its assets. No administrative or other
receiver has been appointed by any person over the business or assets
of the Company or any part thereof, nor has any order been made or
petition presented for the appointment of an administrator in respect
of the Company.
3. Connected business
3.1 Subsidiaries, Associated Companies and Investments
3.1.1 The shares in the Subsidiaries, the Associated Companies and
Investments are held by Atlantech (or, in the case of
Biocomposites, by Grindco 268 Limited) free from all
Encumbrances and with all rights now or hereafter attaching
thereto.
3.1.2 No Group company is under any obligation of any kind to
further acquire or subscribe shares or securities in any
company or other entity or make any funding or financial
contribution to any company or other entity nor is it party
to any agreement or arrangement (written or oral) in
relation to any other Group company, other than in the
ordinary course of business.
3.2 Connected transactions
The Company:
3.2.1 is not and has not agreed to become the holder or other
owner of any class of any shares, debentures or other
securities of any other body corporate (whether incorporated
in the United Kingdom or elsewhere) other than the
Subsidiaries and the Associated Companies or Investments;
3.2.2 has not agreed to become a subsidiary of any other body
corporate or under the control of any group of bodies
corporate or consortium;
35
3.2.3 is not and has not agreed to become a member of any
partnership, joint venture, consortium or other
unincorporated association other than a recognised trade
association or agreement or arrangement for sharing
commissions or other income;
3.2.4 has no branch, place of business or substantial assets
outside England and Wales or any permanent establishment (as
that expression is defined in any relevant Order in Council
made pursuant to section 788, ICTA 1988) in any country
outside the United Kingdom; and
3.2.5 save as otherwise disclosed pursuant to paragraphs 3.2.1 to
3.2.4, does not have any interest, legal or beneficial, in
any shares or other capital or securities or otherwise
howsoever in any other firm, company, association, venture
or legal person or entity.
4. Accounts
4.1 General
The Accounts:
4.1.1 were prepared in accordance with the requirements of all
relevant statutes, with good accounting principles and
practices generally accepted at the date hereof in the
United Kingdom (including the Accounting Standards) on a
basis consistent with the two preceding accounting periods
of the Company;
4.1.2 disclose a true and fair view of the assets, liabilities and
state of affairs of the Company as at the relevant Balance
Sheet Date and of its profits for the financial year ended
on such date;
4.1.3 to the extent required by the CA 85 and the relevant FRSs,
contain provision or reserve for bad and doubtful debts,
obsolescent or slow-moving stocks and for depreciation on
fixed assets, which provision or reserve was when made
adequate;
4.1.4 to the extent required by CA 85 and the relevant FRSs,
contain a note of all capital commitments of the Company at
the Balance Sheet Date, which note was when made adequate,
fair and not misleading;
4.1.5 to the extent required by CA 85 and the relevant FRSs,
disclose, note or provide for all material liabilities of
the Company which were known, actual or contingent
(including material contingent liabilities to customers and
contingent liabilities for Taxation);
4.1.6 the amount included in the Accounts in respect of
work-in-progress and stock-in trade is reasonable and has
been determined in accordance with SSAP 9; and
4.1.7 to the extent required by CA 85 and all relevant FRSs,
reflect all the fixed and loose plant and machinery,
equipment, furniture, fittings and vehicles used by the
Company at the Balance Sheet Date and none has been acquired
for any consideration in excess of its net realisable value
at the date of such acquisition or otherwise than by way of
a bargain at arm's length.
4.2 Stock-in-trade and work-in-progress
The basis of valuation for stock-in-trade and work-in-progress has
remained in all material respects consistent with that adopted for the
purpose of the Company's audited accounts in
36
respect of the beginning and end of each of the accounting periods of
the Company for the previous two financial years.
4.3 Profits
The profits of the Company for the three years ended on the Balance
Sheet Date as shown by the Accounts and by the audited accounts of the
Company for the previous two years delivered to the Purchaser and the
trend of profits shown by them have not (except as disclosed in them)
been affected to a material extent by inconsistencies of accounting
practices, by the inclusion of non-recurring items of income or
expenditure, by transactions entered into otherwise than on normal
commercial terms or by any other factors rendering such profits for
all or any of such periods exceptionally high or low.
4.4 Books of account
All accounts, books, ledgers, financial and other necessary records of
whatsoever kind of the Company (including all invoices and other
records required for VAT purposes):
4.4.1 have been properly maintained in accordance with applicable
law;
4.4.2 do not as far as the Warrantors are aware contain or reflect
any material inaccuracies or discrepancies.
4.5 Management Accounts of the Companies
The Management Accounts have been prepared in accordance with
accounting policies consistent with those used in preparation of the
Accounts with all due care and on a basis consistent with the
management accounts of the relevant Company prepared in the preceding
year. The cumulative profits, assets and liabilities of the relevant
Company stated in the Management accounts have not been knowingly or
wilfully misstated.
5. Post-Balance Sheet Date events
5.1 Since the Balance Sheet Date, the Company:
5.1.1 has carried on its business in the ordinary and usual course
and without entering into any transaction, assuming any
liability or making any payment not provided for in the
Accounts which is not in the ordinary course of business and
without any interruption or material alteration in the
nature, scope or manner of its business;
5.1.2 has not experienced any material deterioration in its
financial position or turnover or suffered any diminution of
its assets by the wrongful act of any person and the Company
has not had its business or profitability materially and
adversely affected by the loss of any important customer or
source of supply;
5.1.3 has not acquired or disposed of or agreed to acquire or
dispose of any material assets or assumed or incurred or
agreed to assume or incur any material liabilities (actual
or contingent) otherwise than in the ordinary course of
business;
5.1.4 has not declared, made or paid any dividend, bonus or other
distribution of capital or income (whether a qualifying
distribution or otherwise) and (excluding fluctuations in
overdrawn current accounts with bankers) no loan or loan
capital of the Company has been repaid in whole or in part
or has become due or is liable to be declared due by reason
of either service of a notice or lapse of time or otherwise
howsoever;
37
5.1.5 has not made any change to the remuneration, terms of
employment, emoluments or pension benefits of any present or
former director, officer or employee of the Company who on
the Balance Sheet Date was entitled to remuneration in
excess of (pound)15,000 per annum and has not appointed or
employed any additional director, officer or employee
entitled as aforesaid;
5.1.6 has received payment in full of all debts owing to the
Company shown in the Accounts (subject to any provision for
bad and doubtful debts made in the Accounts), has not
released any debts in whole or in part and has not written
off debts in an amount exceeding (pound)15,000 in the
aggregate;
5.1.7 has not entered into contracts involving capital expenditure
in an amount exceeding(pound)20,000 in the aggregate;
5.1.8 has not become aware that any event has occurred which would
entitle any third party to terminate any contract or any
benefit enjoyed by it or call in any money before the normal
due date therefor;
5.1.9 has paid its creditors in accordance with the normal
practice of the Company and no claims have been made or are
pending under the Late Payment of Commercial Debts
(Interest) Act 1998 and does not have any debts outstanding
which are overdue for payment by more than eight weeks;
5.1.10 has not borrowed or raised any money or taken any financial
facility (except such short term borrowings from bankers as
are within the amount of any overdraft facility which was
available to the Company at the Balance Sheet Date) or since
the Balance Sheet Date renegotiated or received any notice
from any banker that such banker wishes to renegotiate any
overdraft facility available to the Company at the Balance
Sheet Date;
5.1.11 has not made any change to its accounting reference date and
no accounting period of the Company has ended since the
Balance Sheet Date;
5.1.12 (including any class of its members) has not passed any
shareholders' resolution whether in general meeting or
otherwise.
6. Transactions with the Vendors, Directors and Connected Persons
6.1 Loans and debts
There is not outstanding:
6.1.1 any indebtedness or other liability (actual or contingent)
owing by the Company to any Vendors or Director or any
Connected Person or owing to the Company by any Vendors or
Director or any Connected Person; or
6.1.2 any guarantee or security for any such indebtedness or
liability as aforesaid.
6.2 Arrangements with Connected Persons
6.2.1 There is not outstanding, and there has not at any time
during the last six years been outstanding, any agreement,
arrangement or understanding (whether legally enforceable or
not) to which the Company is a party and in which any
Vendors, Affiliate of any Vendors, Director or former
director of the Company or any Connected Person is or has
been interested whether directly or indirectly.
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6.2.2 The Company is not a party to nor has its profits or
financial position during the last six years been affected
by any agreement or arrangement which is not entirely of an
arm's length nature.
6.3 Competitive interests
6.3.1 No Warrantors, Affiliate of any Warrantors, Director, former
director of the Company nor any Connected Person, either
individually, collectively or with any other person or
persons, has any estate, right or interest, directly or
indirectly, in any business other than that now carried on
by the Company which is or is likely to be or become
competitive with any aspect of the Business of the Company
save as registered holder or other owner of any class of
securities of any company if such class of securities is
listed on any recognised investment exchange (as defined in
the Financial Services and Markets Act 2000) and if such
person (together with Connected Persons and Affiliates)
holds or is otherwise interested in less than five % of such
class of securities.
6.3.2 None of the Warrantors either individually, collectively or
with any other person or persons is interested in any way
whatsoever in any Intellectual Property used and not wholly
owned by the Company.
6.4 Benefits
No Connected Person of any Vendors, Director or former director of the
Company is entitled to or has claimed entitlement to any remuneration,
compensation or other benefit from the Company.
7. Finance
7.1 Borrowings
Particulars of all money currently borrowed by the Company have been
Disclosed. The total amount borrowed by the Company from any source
does not exceed any limitation on its borrowing contained in the
articles of association of the Company or in any debenture or loan
stock trust deed or instrument or any other document executed by the
Company and the amount borrowed by the Company from each of its
bankers does not exceed the overdraft facility agreed with such
banker. The Company has no outstanding loan capital.
7.2 Debts owed to the Company
None of the Company nor the Warrantors considers any of the debts
owing to the Company (but which are not yet due) to be irrecoverable
in whole or in part. The Company does not own the benefit of any debt
(whether present or future) other than debts which have accrued to it
in the ordinary course of business.
7.3 Bank accounts
7.3.1 Particulars of the balances on all the Company's bank
accounts as at a date not more than three days before the
date of this Agreement have been Disclosed and the Company
has no other bank accounts. Since the date of such
particulars there have been no payments out of any such bank
accounts except for routine payments which have been
Disclosed.
39
7.3.2 All unpresented cheques drawn by the Company have been
Disclosed and there are no such unpresented cheques drawn
otherwise than in the normal course of business.
7.4 Financial facilities
The Warrantors have Disclosed full details and true and correct copies
of all documents relating to all debentures, acceptance lines,
overdrafts, loans or other financial facilities outstanding or
available to the Company and any Encumbrances provided for by such
documents. As far as the Warrantors are aware, neither the Warrantors
nor the Company have done anything whereby the continuance of any such
facility or Encumbrance in full force and effect might be affected or
prejudiced.
7.5 Grants
Full details of all grants made to the Company in the last six years
have been Disclosed. No act or transaction has been effected in
consequence whereof the Company is or so far as the Warrantors are
aware may be held liable to refund in whole or in part any investment
grant, building grant or other such grant or loan received by virtue
of any statute or in consequence whereof any such grant or loan for
which application has been made by it will not or may not be paid or
will or may be reduced.
7.6 Options and guarantees
7.6.1 The Company is not responsible for the indebtedness of any
other person nor party to any option or pre-emption right or
any guarantee, suretyship or any other obligation (whatever
called) to pay, purchase or provide funds (whether by the
advance of money, the purchase of or subscription for shares
or other securities or the purchase of assets or services or
otherwise) for the payment of, or as an indemnity against
the consequence of default in the payment of, any
indebtedness of any other person.
7.6.2 No person other than the Company or a Subsidiary has given
any guarantee of or security for any overdraft, loan or loan
facility granted to the Company or any Subsidiary.
8. The Properties
8.1 General
8.1.1 The Properties comprise all the land and premises owned,
controlled, used or occupied by the Company and all the
rights or interests vested in the Company relating to any
land and premises at the date hereof and the particulars set
out in schedule 4 are true and accurate in all material
respects and not misleading.
8.1.2 The Company is not the original lessee of any land or
premises other than the Properties and has not given a
guarantee or entered into any direct covenant with a
landlord or assignor of any land or premises other than the
Properties.
8.1.3 The Company has legal and beneficial title to each of the
Properties.
8.1.4 The Company has in its possession or unconditionally held to
its order all the documents of title and other documents and
papers relating to each of the Properties.
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8.1.5 The Properties, title deeds and documentation relating
thereto, and all tenant's fixtures and fittings and plant,
equipment and other chattels on the Properties, are not
subject to any Encumbrance nor, so far as the Warrantors are
aware, any overriding interest (as defined in section 70,
Land Registration Act 1925) nor is there any person in
possession or occupation of or who has or claims any right
of any kind in respect of any of the Properties adversely to
the estate, interest, right or title therein of the Company;
8.1.6 So far as the Warrantors are aware, there are no rights,
interests, covenants, restrictions, reservations, licences
or easements or any disputes or outstanding notices (whether
given by a landlord, a local authority or any other person)
which adversely affect the Properties or the proper use and
enjoyment of any of the Properties for the purpose of the
business now being carried on at the Properties by the
Company.
8.1.7 There has been no dealing with any of the Properties
otherwise than at arm's length and in particular no dealing
at an undervalue which may give rise to a claim for improper
stamping or setting aside.
8.1.8 None of the Properties is subject to the payment of any
outgoings other than the usual rates and taxes and the
payments referred to in the lease or licence under which the
Properties are held and all sums due to date in respect
thereof have been paid.
8.1.9 Each of the Properties:
(c) enjoys access and egress over roads and footpaths
which, so far as the Warrantors are aware, have been
adopted by the appropriate highway authority and are
maintainable at the public expense;
(d) drains foul sewage and surface water to public sewers,
is served by water, electricity, gas and telephone
utilities and either the pipes, sewers, wires, cables,
conduits and other conducting media serving the
Properties connect directly to the mains without
passing through land in the occupation or ownership of
any third party or, if they do not, so far as the
Warrantors are aware, each of the Properties has the
benefit of all necessary easements and rights for the
maintenance and use thereof and such rights are held on
terms which do not entitle any person to terminate or
curtail the same; and
(e) so far as the Warrantors are aware, has the benefit of
all other easements and rights necessary for its proper
use and enjoyment for the purposes of the business now
being carried on at the Properties by the Company and
such easements and rights are held on terms which do
not entitle any person to terminate or curtail the
same.
8.1.10 The Company has not entered into any commitment (whether
legally binding or not) and the Company is not party to any
subsisting agreement with any person or company whereby a
fee (including but not limited to an abort fee) will be paid
to such person or company in respect of the management, use,
development, letting or sale of any of the Properties.
8.1.11 So far as the Warrantors are aware, there are no unpaid
charges for the construction or adoption of any road or
sewer or other service serving the Property.
8.2 Planning
41
8.2.1 In relation to each of the Properties, its existing use is
set out in Part 1 of schedule 4 ("Existing Use").
8.2.2 So far as the Warrantors are aware, there are no lawfully
enforceable restrictions or prohibitions contained in any
planning permission for the Existing Use which restrict or
prohibit the Existing Use of any of the Properties.
8.2.3 So far as the Warrantors are aware, the Existing Use of each
of the Properties is the permitted use under the Town and
Country Planning legislation (which term includes the Town &
Country Planning Xxx 0000, the Planning (Listed Buildings
and Conservation Areas) Xxx 0000, the Planning (Hazardous
Substances) Xxx 0000 and the Planning (Consequential
Provisions) Act 1990) and is not a temporary or personal
use.
8.2.4 So far as the Warrantors are aware, all development carried
out in relation to each of the Properties has been lawful
and all necessary consents and permissions have been
obtained for such development.
8.2.5 So far as the Warrantors are aware, the consents and
permissions referred to in paragraph 8.2.4 are valid,
subsisting and unimpeachable and are also either
unconditional or subject only to conditions which have been
satisfied so that nothing further remains to be done
thereunder.
8.2.6 The Company has not received notice of any resolution,
proposal or order made or contemplated for the compulsory
acquisition of any of the Properties by the local or any
other authority nor any outstanding order, notice or other
requirement of any such authority that affects the Existing
Use of any of the Properties or involves expenditure in
compliance with it.
8.2.7 No compensation has been received consequent upon a refusal
of any planning permission affecting any of the Properties
or the imposition of any restrictions in any such planning
permission and no such planning permission is suspended.
8.3 Leasehold Properties
8.3.1 Where any of the Properties is leasehold, particulars of
each lease vested in the Company are set out in Part 3 of
schedule 4 and in relation to each such lease:
(a) any consent necessary for the grant of the lease has
been obtained and a copy of the consent is with the
title deeds to the Property to which the lease relates;
(b) no rent reviews are or should be currently under
negotiation or the subject of a reference to an expert
or arbitrator or the courts;
(c) the receipt for the payment of rent which fell due
immediately prior to the date hereof is unqualified;
(d) no notices of breaches of any covenants or conditions
contained in the lease have been given or received on
the part of either the landlord or the Company and the
landlord has not refused to accept rent or made any
complaint of breach of covenant;
(e) no alterations, improvements or additions have been
made to the Property to which the lease relates since
the grant of the lease or in respect of all such
42
alterations, improvements or additions made all
necessary consents and approvals have first been
obtained; and
(f) VAT is not chargeable on the rent or any other payment
to be made under the lease and no election has been
made by the landlord to waive exemption from VAT in
respect of the lease.
8.4 Inferior leases
The Company is in actual occupation of each of the Properties and no
other person is or will be entitled to occupy or use any part or any
of the Property.
8.5 Statutory compliance/environmental issues
The Company has not received notice of any breach or allegation of any
breach of the requirements of:
the Shops Xxx 0000 and 1965
the Clean Air Xxx 0000
the Construction (Design and Management) Regulations 1995
the Xxxxxxxxx Xxx 0000
the Offices, Shops and Railway Premises Act 1963
the Fire Precautions Xxx 0000
the Health and Safety at Work etc. Xxx 0000
the Control of Pollution Xxx 0000
the Food and Environmental Protection Xxx 0000
the Planning (Hazardous Substances) Xxx 0000
the Environmental Protection Xxx 0000
the Water Resources Xxx 0000 the Water Industry Xxx 0000
the Radioactive Substances Xxx 0000
or the Public Health Acts or other legislation concerning
health, safety or environmental matters or any regulations,
orders, notices or directions made under any of such
legislation which in any such case affect any of the
Properties.
8.5.1 Where required, a fire certificate has been issued in
respect of each of the Properties and so far as the
Warrantors are aware, each of the Properties complies in all
respects with current fire regulations.
9. Environmental
9.1 Compliance with Environmental Law
So far as the Warrantors are aware, at all times during the period of
occupation by the Company the Property (other than the premises at 00
Xxxxxxxxxx Xxxxxx, Xxxxxxxxxxx) has been used, and at all times the
Business has been conducted thereon, in all material respects in
compliance with Environmental Law.
9.2 Environmental Liability
There are no events, states of affairs, conditions, circumstances,
activities, practices, incidents, or actions (including the
generation, use, treatment, storage, transport, deposit, disposal,
discharge or management of Hazardous Matter) which, so far as the
Warrantors are aware, have occurred or are occurring or have been or
are in existence at, in, under or about the Property (other than the
premises at 00 Xxxxxxxxxx Xxxxxx, Xxxxxxxxxxx) at all times
43
during the period of occupation of the Property by the Company or in
or about the conduct of the Business by the Company which will give
rise to Environmental Liability.
9.3 Notice of claims
At no time has the Company received any notice, claim or other
communication alleging any actual or potential Environmental
Liability.
10. Other assets
10.1 Title
10.1.1 The Company has Legal and Beneficial Title to all assets of
the Company which are included in the Accounts or have
otherwise been represented as being the property of the
Company or which were at the Balance Sheet Date used or held
for the purposes of its business and (except for assets
disposed of or realised by the Company in the ordinary
course of business) the Company retains such title to all
such assets free from any Encumbrance, hire or hire purchase
agreement or leasing agreement or agreement for payment on
deferred terms and all such assets are in the possession and
control of the Company and are sited within the United
Kingdom.
10.1.2 The Company has not acquired or agreed to acquire any
material asset on terms that title to such asset does not
pass to the Company until full payment is made.
10.2 Encumbrances
The Company has Legal and Beneficial Title to all assets which have
been acquired by the Company since the Balance Sheet Date and (except
for assets disposed of or realised by the Company in the ordinary
course of business) the same are in the possession and control of the
Company and none is the subject of any Encumbrance nor has the Company
created or agreed to create any Encumbrance or entered into any
factoring arrangement, hire-purchase, conditional sale or credit sale
agreement which has not been Disclosed and in respect of any such
Encumbrance, arrangement or agreement so Disclosed there has been no
default by the Company in the performance or observance of any of the
provisions thereof.
10.3 Condition of assets
The plant and machinery (including fixed plant and machinery) and all
vehicles and office and other equipment shown in the Accounts or
acquired since the Balance Sheet Date or otherwise used in connection
with the Business which have not been disposed of in the ordinary
course of business:
10.3.1 are in reasonable repair and condition having regard to
their age (and subject to fair wear and tear) and are
regularly maintained and in satisfactory working order;
10.3.2 are each capable of doing the work for which they were
designed and/or purchased and so far as the Warrantors are
aware will each be so capable (subject to fair wear and
tear) during the period of time over which the value of such
assets will be written down to nil in the accounts of the
Company;
and the vehicles owned by the Company are roadworthy and duly licensed
for the purposes for which they are used.
10.4 Condition of stock
44
The Company's stock-in-trade is in good condition and is capable of
being sold by the Company in the ordinary course of business in
accordance with its current price list without rebate or allowance to
a purchaser.
10.5 Rental payments
Rentals payable by the Company under any leasing, hire-purchase or
other similar agreement to which it is a party are set out in the
Disclosure Documents and have not been and as far as the Warrantors
are aware are not likely to be increased.
11. Insurance
11.1 Extent of insurance
The Company is and has at all material times been, in the reasonable
opinion of the Warrantors, adequately covered against all legal
liability and risks normally insured against by such companies
(including liability to employees or third parties for personal injury
or loss or damage to property, product liability and loss of profit).
11.2 Premiums and claims
Particulars of all policies of insurance of the Company now in force
have been Disclosed and such particulars are true and correct and all
premiums due on such policies have been duly paid and all such
policies are valid and in force. So far as the Warrantors are aware
there are no circumstances which might lead to any liability under
such insurance being avoided by the insurers or the premiums being
increased. There is no claim outstanding under any such policies and
so far as the Warrantors are aware there are no circumstances likely
to give rise to a claim.
12. Litigation
12.1 Litigation and arbitration proceedings
12.1.1 Save as plaintiff in the collection of debts (not exceeding
(pound)5,000 in the aggregate) arising in the ordinary
course of business, the Company is not now engaged in any
litigation, arbitration or criminal proceedings and, so far
as the Warrantors are aware, there are no lawsuits or
arbitration proceedings pending or threatened by or against
the Company or any person for whose acts or defaults the
Company may be vicariously liable.
12.1.2 The Company has not, in the last three years preceding the
date of this Agreement, been involved in any litigation,
arbitration, criminal proceedings or material dispute with
any person who is or was a supplier or customer of
importance to the Company or the Business, or where such
litigation, arbitration, proceedings or dispute resulted in
adverse publicity or loss of goodwill.
12.1.3 So far as the Warrantors are aware, there is no matter or
fact in existence which might give rise to any legal
proceedings or arbitration involving the Company including
any which might form the basis of any criminal prosecution
against the Company.
12.2 Injunctions, etc.
No injunction or order for specific performance has been granted
against the Company.
45
12.3 Orders and judgments
The Company is not subject to any order or judgment given by any court
or governmental agency which is still in force and has not given any
undertaking to any court or to any third party arising out of any
legal proceedings.
13. Licences
13.1 General
The Company has all necessary licences (including statutory licences),
permits, consents and authorities (public and private) for the proper
and effective carrying on of the Business and in the manner in which
the Business is now carried on and all such licences, permits,
consents and authorities are valid and subsisting and the Warrantors
know of no reason why any of them should be suspended, cancelled or
revoked whether in connection with the sale to the Purchaser or
otherwise and, so far as the Warrantors aware, there are no factors
that might in any way prejudice the continuance or renewal of any of
those licences, permits, consents or authorities and the Company is
not restricted by contract from carrying on any activity in any part
of the world.
13.2 Data Protection Xxx 0000
13.2.1 Those members of the Group which are required to register
under the Data Protection Act 1998 have registered or
applied to register themselves under the Data Protection Xxx
0000 in respect of all registrable personal data held by
them, and all due and requisite fees in respect of such
registrations have been paid.
13.2.2 The details contained in such registrations or applications
are correct, proper and suitable for the purpose(s) for
which the Company holds or uses the personal data which are
the subject of them.
13.2.3 So far as the Warrantors are aware, all personal data held
by each member of the Group has been held in accordance with
the data protection principles and there has been no
unauthorised disclosure of such personal data.
14. Trading
14.1 Tenders, etc.
No offer, tender or the like is outstanding (the value of which to the
Company could exceed (pound)50,000 in any year) which is capable of
being converted into an obligation of the Company by an acceptance or
other act of some other person.
14.2 Delegation of powers
There are in force no powers of attorney given by the Company other
than to the holder of an encumbrance solely to facilitate its
enforcement nor any other authority (express, implied or ostensible)
given by the Company to any person to enter into any contract or
commitment or do anything on its behalf other than any authority of
employees to enter into routine trading contracts in the normal course
of their duties.
14.3 Consequence of acquisition of Shares by Purchaser
The acquisition of the Shares by the Purchaser or compliance with the
terms of this Agreement will not:
46
14.3.1 so far as the Warrantors are aware, cause the Company to
lose the benefit of any right or privilege it presently
enjoys or cause any person who normally does business with
the Company not to continue to do so on the same basis as
previously;
14.3.2 relieve any person of any obligation to the Company (whether
contractual or otherwise) or legally entitle any person to
determine any such obligation or any right or benefit
enjoyed by the Company or to exercise any right whether
under an agreement with or otherwise in respect of the
Company;
14.3.3 conflict with or result in the breach of or constitute a
default under any of the terms, conditions or provisions of
any agreement or instrument to which the Company is now a
party or any loan to or mortgage created by the Company or
of its memorandum or articles of association;
14.3.4 result in any present or future indebtedness of the Company
becoming due and payable or capable of being declared due
and payable prior to its stated maturity; or
14.3.5 entitle any person to receive from the Company any finder's
fee, brokerage or other commission.
14.4 Guarantees and warranties
The Company has not given any guarantee or warranty or made any
representation in respect of articles or trading stock, sold or
contracted to be sold by it, save for any warranty or guarantee
implied by law and (save as aforesaid) has not accepted any liability
or obligation to service, maintain, repair, take back or otherwise do
or not do anything in respect of any articles or stock that would
apply after any such article or stock has been delivered by it.
14.5 Fair trading, etc.
So far as the Warrantors are aware, the Company is not and has not
been party to or directly or indirectly concerned in any agreement,
arrangement, understanding or practice (whether or not legally
binding) or in the pursuit of any course of conduct which is:
14.5.1 registrable under the RTPA or notifiable under the
Competition Xxx 0000 or capable of giving rise to an
investigation by the Director General of Fair Trading or a
reference to the Monopolies and Mergers Commission;
14.5.2 in contravention or breach of the EC Treaty, the Fair
Trading Xxx 0000, the Consumer Credit Xxx 0000, the Resale
Prices Xxx 0000, the Trade Descriptions Xxx 0000, the RTPA,
the Competition Xxx 0000, the Consumer Protection Xxx 0000,
the Competition Xxx 0000 or any regulations, orders, notices
or directions made thereunder; or
14.5.3 is otherwise registrable, unenforceable or void or renders
the Company or any of its officers liable to administrative,
civil or criminal proceedings under any anti-trust, trade
regulation or similar legislation in any jurisdiction where
the Company carries on business.
14.6 Restrictions on trading
The Company is not and has not been a party to any agreement,
arrangement, understanding or practice restricting the freedom of the
Company to provide and take goods and services by such means and from
and to such persons and into or from such place as it may from time to
time think fit.
47
14.7 Possession of records
14.7.1 The Company does not have any of its records, systems,
controls, data or information recorded, stored, maintained,
operated or otherwise wholly or partly dependent on or held
by any means (including any electronic, mechanical or
photographic process whether computerised or not) which
(including all means of access thereto and therefrom) are
not under the exclusive ownership and direct control of the
Company.
14.8 Business names
The Company does not use on its letterhead, books or vehicles or
otherwise carry on the Business under any name other than its
corporate name.
15. Contracts
15.1 Onerous contracts
There are no long term contracts (that is, contracts not terminable by
the Company without penalty on six months' notice or less) or onerous
or unusual or abnormal contracts (that is, contracts for material
capital commitments or contracts differing from those in the ordinary
course of business) binding upon the Company and no expenses or
liabilities of a material amount have been incurred before the date of
this Agreement by the Company otherwise than for the purpose of the
Company's business.
15.2 Material contracts
All contracts to which the Company is a party as are material have
been Disclosed and the Company is not a party to or subject to any
agreement, transaction, obligation, commitment, understanding,
arrangement or liability which:
15.2.1 other than in the case of ongoing sales and/or distribution
agreements, is incapable of complete performance in
accordance with its terms within six months after the date
on which it was entered into or undertaken;
15.2.2 was, at the time of entering into, known by the Warrantors
or by the Company to be likely to result in a loss to the
Company on completion of performance;
15.2.3 cannot readily be fulfilled or performed by the Company on
time and without undue or unusual expenditure of money and
effort;
15.2.4 involves obligations, restrictions, expenditure or receipts
of an unusual, onerous or exceptional nature and not in the
ordinary course of business;
15.2.5 involves or is likely to involve the supply of goods by or
to the Company (other than supplies from Atlantech to
Atlantech UK) the aggregate sales value of which will
represent in excess of five % of the turnover of the Company
for the year ended on the Balance Sheet Date;
15.2.6 requires the Company to pay any commission, finder's fee,
royalty or the like; or
15.2.7 is in any way otherwise than in the ordinary course of the
Company's business.
15.3 Performance of contracts
48
15.3.1 The terms of all contracts of the Company have been complied
with by the Company in all material respects and, so far as
the Warrantors are aware, by the other parties to the
contracts in all material respects and there are no
circumstances likely to give rise to a default by the
Company or, so far as the Warrantors are aware, by the other
parties under any such contract.
15.3.2 There are no outstanding claims, separately or in the
aggregate, of material amounts, against the Company on the
part of customers or other parties in respect of defects in
quality or delays in delivery or completion of contracts or
deficiencies of design or performance or otherwise relating
to liability for goods or services sold or supplied by the
Company and no such claims are threatened or anticipated
and, as far as the Warrantors are aware, there is no matter
or fact in existence in relation to goods or services
currently sold or supplied by the Company which might give
rise to the same.
15.3.3 The Company has no knowledge of the invalidity of or grounds
for rescission, avoidance or repudiation of any agreement or
other transaction to which the Company is a party and has
received no notice of any intention to terminate, repudiate
or disclaim any such agreement or other transaction.
16. Employees
16.1 Particulars of employees
The particulars shown in the schedule of employees comprised in the
Disclosure Documents are true and complete in all material respects
and show in respect of each Director, officer and employee of the
Company his date of birth, the date on which he commenced continuous
employment with the Company for the purposes of ERA and all
remuneration payable and other benefits provided or which the Company
is bound to provide (whether now or in the future) to each such person
and include full particulars of all remuneration arrangements
(particularly profit sharing, incentive and bonus arrangements to
which the Company is a party whether binding or not) and each
Director, officer and employee of the Company is listed therein.
16.2 Service contracts
There is no contract of service in force between the Company and any
of its Directors, officers or employees which is not terminable by the
Company without compensation (other than any compensation payable
under Parts X and XI, ERA) on 12 weeks' notice given at any time or
otherwise in accordance with section 86, ERA other than as Disclosed.
There are no consultancy or management services agreements in
existence between the Company and any other person, firm or company,
and there are no agreements or other arrangements (binding or
otherwise) between the Company or any employers' or trade association
of which the Company is a member and any Trade Union. There are no
outstanding pay negotiations with any employees or Trade Unions.
16.3 Benefits
There are no amounts owing to present or former directors, officers or
employees of the Company other than not more than one month's arrears
of remuneration accrued or due or for reimbursement of business
expenses incurred within a period of three months preceding the date
of this Agreement and no moneys or benefits other than in respect of
remuneration or emoluments of employment are payable to or for the
benefit of any present or former director, officer or employee of the
Company, nor any dependant of any present or former director, officer
or employee of the Company.
49
16.4 Liabilities and payments
Save to the extent (if any) to which provision or allowance has been
made in the Accounts:
16.4.1 no liability is currently outstanding or, so far as the
Warrantors are aware is anticipated, by the Company for
breach of any contract of employment or for services or for
severance payments or for redundancy payments or protective
awards or for compensation for unfair dismissal or for
failure to comply with any order for the reinstatement or
re-engagement of any employee or for sex or race
discrimination or for any other liability accruing from the
termination or variation of any contract of employment or
for services;
16.4.2 no gratuitous payment is currently outstanding from the
Company in connection with the actual or proposed
termination, suspension or variation of any contract of
employment or for services of any present or former
director, officer or any dependant of any present or former
director, officer or employee of the Company; and
16.4.3 the Company has not agreed to make any payment to or
provided or agreed to provide any benefit for any present or
former director, officer or employee of the Company, which
is currently outstanding.
16.5 Relevant legislation
16.5.1 The Company has in relation to each of its employees (and so
far as relevant to each of its former employees) complied
with:
(g) all obligations imposed on it by all relevant statutes,
regulations and codes of conduct and practice
(including, without limitation, Health and Safety at
Work etc. Xxx 0000 and the Working Time Regulations
1998) affecting its employment of any persons and all
relevant orders and awards made thereunder and has
maintained all necessary records regarding the service,
terms and conditions of employment of each of its
employees; and
(h) all collective agreements, recognition agreements and
customs and practices for the time being affecting its
employees or their conditions of service.
16.5.2 There is no liability or claim against the Company
outstanding or anticipated under the Equal Pay Xxx 0000, the
Sex Discrimination Acts 1975 and 1986, the Race Relations
Xxx 0000, the ERA, TUPE, TULRCA or the Trade Union Reform
and Employment Rights Xxx 0000.
16.6 Termination of employment
No present director, officer or employee of the Company has given or
received notice terminating his employment and Completion of this
Agreement will not entitle any employee to terminate his employment or
trigger any entitlement to a severance payment or liquidated damages.
16.7 Share and other schemes
The Company does not have in existence nor is it proposing to
introduce, and none of its directors, officers or employees
participate in (whether or not established by the Company) any
employee share trust, share incentive scheme, share option scheme or
profit sharing scheme for the benefit of all or any of its present or
former directors, officers or employees or
50
the dependants of any of such persons or any scheme whereunder any
present or former director, officer or employee of the Company is
entitled to a commission or remuneration of any other sort calculated
by reference to the whole or part of the turnover, profits or sales of
the Company or any other person, firm or company including any
profit-related pay scheme established under Chapter III, Part V, ICTA
1988.
16.8 Disputes and claims
16.8.1 No dispute exists (nor are the Warrantors aware of any
circumstances which may lead to any dispute) between the
Company and a material number or category of its employees
or any Trade Union(s) or Works Council and so far as the
Warrantors are aware there are no wage or other claims
outstanding against the Company by any person who is now or
has been a director, officer or employee of the Company.
16.8.2 The Company has not had during the last three years any
strike, work stoppages, slowdown or work-to-rule by its
employees or lock-out, nor, so far as the Warrantors are
aware, is any anticipated, which has caused, or is likely to
cause, the Company to be materially incapable of carrying on
its business in the normal and ordinary course.
16.9 Transfer of undertakings
The Company has not been a party to any relevant transfer as defined
in TUPE nor has the Company failed to comply with any duty to inform
and consult any Trade Union under the said regulations within the
period of one year preceding the date of this Agreement.
16.10 Agreements with Trade Unions
The Company is not a party to any agreement or arrangement with or
commitment to any trade unions or staff association nor are any of its
employees members of any trades union or staff association.
17. Pension Schemes
17.1 Save for the Atlantech Medical Devices Limited Retirement Benefits
Scheme ("the SSAS") and the Clerical Medical Group Stakeholder Pension
Plan ("the Stakeholder"), there is not in operation any arrangement
for the provision of, and the Companies are not paying or contributing
towards, nor are they under any moral or legal liability or contingent
liability to pay or secure, any pension or other benefit on
retirement, resignation, dismissal, death, sickness or disability or
on the attainment of a specified age or the completion of a specified
number of years of service for the benefit of any of the Employees or
any dependant of an Employee; and the Companies have not undertaken to
make any ex gratia payment to or in respect of any of the Employees.
17.2 As regards the SSAS:
17.2.1 complete and accurate details of the SSAS (including all
documentation, benefit structures, augmentations and funding
details) have been Disclosed;
17.2.2 all benefits under the SSAS (other than those which are
fully insured) are provided on a money purchase basis and
there is no obligation (other than in the case of those
benefits which are fully insured) to provide any specified
level of benefits;
51
17.2.3 the identities of those of the Employees who are members of
the SSAS or of persons who have any rights under the SSAS in
respect of any of the Employees have been Disclosed;
17.2.4 as at Completion, all contributions due to be paid in
respect of the SSAS by the Companies have been duly paid;
17.2.5 all premiums by way of insurance which are payable in
respect of the SSAS by the Companies or by the trustees or
other administrators of the SSAS have been duly paid and
full details of the insurance policies or contracts
concerned have been Disclosed;
17.2.6 all benefits (other than refunds of contributions) payable
under the SSAS on the death of any person or during periods
of sickness or disability are as at Completion fully insured
under a policy effected with an insurance company of good
repute and there is no reason why the relevant policies
cannot be continued on the same terms following Completion;
17.2.7 all consultancy, legal and other fees, charges or expenses
in relation to the SSAS have been paid and no services have
been rendered in respect of which an account or other
invoice has not been rendered;
17.2.8 no legal proceedings in connection with the SSAS are
pending, threatened or expected (including any complaint to
the Pensions Ombudsman) and there is no fact or circumstance
likely to give rise to any such proceedings;
17.2.9 the SSAS has been administered in accordance with the
provisions of the SSAS and has been administered in
accordance with and comply with all applicable legislation,
regulatory requirements and the general requirements of
trust law, and (without limitation to the foregoing) -
(a) the SSAS does not and has not directly or indirectly
discriminated between male and female employees as
regards eligibility, the rate of contributions or the
benefits to be provided in any way which is contrary to
Article 141 of the Treaty of Rome or any UK Statute;
and
(b) neither the trustees of the SSAS nor the Companies have
engaged or currently engage in any activity in relation
to the SSAS which would require any of them to be
authorised for the purposes of the Financial Services
and Markets Xxx 0000;
17.2.10 the SSAS is an exempt approved scheme within the meaning of
Chapter IV Part I of the Income and Corporation Taxes Act
1988 and there is no reason why such approval may be
withdrawn; and
17.2.11 a contracting out certificate under the Xxxxxxx Xxxxxxx Xxx
0000 is in force covering the employments of all Employees
who are members of the SSAS and there is no reason why such
a certificate may be cancelled.
17.3 As regards the Stakeholder:
17.3.1 all benefits under the Stakeholder (other than those which
are fully insured) are provided on a money purchase basis
and there is no obligation (other than in the case of those
benefits which are fully insured) to provide any specified
level of benefits. Contributions made by the Companies in
respect of the Stakeholder do not
52
exceed the permitted maximum as defined in section 638 of
the Income and Corporation Taxes Act;
17.3.2 the Companies have at all times complied with all the
provisions of the Stakeholder which apply to it and section
3 of the Welfare Reform and Pensions Xxx 0000 (the "1999
Act"). The Stakeholder complies with the 1999 Act, the
Stakeholder Pension Schemes Regulations 2000 and any other
applicable legislation and regulations;
17.3.3 the identities of those of the Employees who are members of
the Stakeholder have been Disclosed and the level of both
employee and employer contributions payable in respect of
each member has been Disclosed and the Companies shall not
before Completion take any steps affecting the level of
employer contributions;
17.3.4 as at Completion, all contributions, premiums and expenses
due to be paid in respect of the Stakeholder by the
Companies have been duly paid;
17.3.5 no legal proceedings in connection with the Stakeholder are
pending, threatened or expected (including any complaint to
the Pensions Ombudsman) and there is no fact or circumstance
likely to give rise to any such proceedings;
17.3.6 the Stakeholder does not and has not directly or indirectly
discriminated between male and female employees as regards
eligibility, the rate of contributions or the benefits to be
provided in any way which is contrary to Article 141 of the
Treaty of Rome or any UK Statute;
17.3.7 the Companies have not engaged and do not currently engage
in any activity in relation to the Stakeholder which would
require them to be authorised for the purposes of the
Financial Services and Markets Xxx 0000; and
17.3.8 the Stakeholder is an exempt approved scheme within the
meaning of Chapter IV Part XIV of the Income and Corporation
Taxes Act 1988 and there is no reason why such approval may
be withdrawn.
18. Intellectual Property
18.1 Ownership and rights
18.1.1 Parts 1 and 2 of schedule 7 respectively contain particulars
of all Registered Proprietary Intellectual Property and
material Unregistered Proprietary Intellectual Property.
18.1.2 The Company is either the sole beneficial owner of or is
licensed to use all Intellectual Property required for the
Company to carry on its business as of the date of
Completion.
18.2 Enforcement
18.2.1 So far as the Warrantors are aware, the Proprietary
Intellectual Property is valid and subsisting and none of
the Proprietary Intellectual Property is the subject of
outstanding or threatened disputes, claims or proceedings
for cancellation, revocation, opposition, interference,
rectification or contested ownership.
18.2.2 Details of Patents owned by the Company are set out in
schedule 7.
53
18.2.3 All Registered Proprietary Intellectual Property has been
maintained and all renewal fees have been paid on time.
18.2.4 All Know-How owned, used or exploited by the Company has
been kept secret and confidential and has, as far as the
Warrantors are aware, not been disclosed to third parties
other than as required in the normal course of business
subject to confidentiality undertakings being obtained by
the Company.
18.2.5 Nothing has been done to diminish or otherwise affect the
reputation of unregistered Trade Marks, owned, used or
otherwise exploited by the Company.
18.3 Intellectual Property Agreements
18.3.1 Parts 3 and 4 of schedule 7 respectively contain particulars
of all Intellectual Property Agreements whereby:
(a) the Company uses or exploits any Third Party
Intellectual Property ("Licences-In"); or
(b) the Company has authorised or otherwise permitted,
expressly or by implication, any use whatsoever of any
Proprietary Intellectual Property, or granted to any
third party any right or interest in respect of any
Proprietary Intellectual Property ("Licences-Out").
18.3.2 Save as set out in schedule 7, none of the Proprietary
Intellectual Property has been charged, mortgaged, licensed
or otherwise encumbered.
18.3.3 So far as the Warrantors are aware, all Intellectual
Property Agreements are valid and binding and none has been
the subject of any breach or default by any party or of any
event which with notice or lapse of time or both would
constitute a default.
18.3.4 No member of the Group has received notice of any dispute,
claim or proceeding arising out of or relating to the
Intellectual Property Agreements and the Warrantors are not
aware of any circumstances which are reasonably likely to
lead to any such dispute, claim or proceeding arising.
18.3.5 No Intellectual Property Agreement will terminate or become
capable of termination or otherwise be adversely affected by
the execution and completion of this Agreement.
18.4 Infringement
18.4.1 The Company has not infringed and, as far as the Warrantors
are aware, does not infringe any Intellectual Property of a
third party as a result of the Company's use or exploitation
of the Intellectual Property in the conduct of the Business
involving the use and exploitation of the Proprietary
Intellectual Property or the Third Party Intellectual
Property, nor, as far as the Warrantors are aware, will such
use or exploitation give rise to any infringement dispute,
claims or proceedings against the Company.
18.4.2 So far as the Warrantors are aware, there are not and have
not been any disputes, claims or proceedings threatened or
in existence in any court or tribunal in respect of any
Intellectual Property used or exploited by the Company in
the conduct of the Business.
54
18.4.3 So far as the Warrantors are aware, there has been and is no
current or anticipated infringement by any third party of
any Proprietary Intellectual Property or Third Party
Intellectual Property.
19. Information technology and telecommunications
19.1 Ownership
19.1.1 All IT Systems are owned by the Company or leased under
written lease agreements, and are not wholly or partly
dependent on any facilities or services not under the
exclusive ownership and/or control of the Company.
19.1.2 So far as the Warrantors are aware, all the IT Contracts are
valid and binding and none of the IT Contracts has been the
subject of any breach or default, or of any event which
(with notice or lapse of time or both) would constitute a
default, or is liable to be terminated or otherwise
adversely affected by the transaction contemplated by this
Agreement.
19.2 Computer operation and maintenance
19.2.1 All IT Systems are in satisfactory working order and have
been and are being properly and regularly maintained and
replaced. No part of the IT Systems has materially failed to
function at any time during the twelve months prior to the
date hereof.
19.2.2 All IT Services are being and have been provided materially
in accordance with the relevant IT Contract.
19.2.3 The Company has full and unrestricted access to and use of
the IT Systems, and no third party agreements or consents
are required to enable the Company to continue such access
and use following completion of the transaction contemplated
by this Agreement.
19.2.4 So far as the Warrantors are aware it is not necessary for
the Company to incur as at the date of Completion any
further material expenditure on the modification,
development, expansion or (save in the normal course of
business) replacement of the IT Systems in order to carry on
its Business as at the date of Completion; and
19.2.5 The Company has not suffered material loss as a result of
any virus or other extraneously-induced malfunction, and so
far as the Warrantors are aware, no person has had
unauthorised access to the IT Systems or any data stored
thereon. The Company operates a documented procedure to
minimise the risk of such infections and unauthorised
access.
19.2.6 All data processed using the IT Systems and/or the IT
Services has been regularly archived in hard copy form. Such
hard copies have been properly stored and catalogued.
19.2.7 The Company has taken all steps reasonably necessary to
ensure that its business can continue in the event of a
failure of the IT Systems (whether due to natural disaster,
power failure or otherwise).
19.3 Euro compliance
The IT Systems accept payment, process payments and produce invoices
in Euros.
55
20. Legislation
The Company has not received notice of and is not aware of any
allegation of breach of the requirements of any legislation which is
applicable to it.
56
PART 2
TAXATION WARRANTIES
21. Taxation
21.1 General
21.1.1 Notices and returns
All notices, returns, computations and registrations of the
Company for the purposes of Taxation have been made
punctually on a proper basis and are correct and none of
them is, or so far as the Warrantors are aware is likely to
be, the subject of any dispute with any Taxation Authority.
21.1.2 All information supplied by the Company to a Tax Authority
for the purposes of Taxation was when supplied and remains
complete and accurate in all material respects.
21.1.3 Payment of Tax due
All Taxation which the Company is liable to pay prior to
Completion has been or will be so paid prior to Completion.
21.1.4 Penalties or interest on Tax
The Company is not liable to pay any penalty, fine,
surcharge or interest charged by virtue of the provisions of
the TMA or any other Taxation Statute.
21.1.5 Compliance with PAYE, national insurance contribution and
Tax collection obligations
(c) All income tax deductible and payable under the PAYE
system has, so far as is required to be deducted, been
deducted from all payments made or treated as made by
the Company and all amounts due to be paid to the
Inland Revenue prior to the date of this Agreement have
been so paid, including all Tax chargeable on benefits
provided for directors, employees or former employees
of the Company or any persons required to be treated as
such.
(d) All deductions and payments required to be made under
any Taxation Statute in respect of national insurance
and social security contributions (including employer's
contributions) have been so made.
(e) All payments by the Company to any person which ought
to have been made under deduction of Tax have been so
made and the Company (if required by law to do so) has
accounted to the Inland Revenue for the Tax so
deducted.
(f) Proper records have been maintained in respect of all
such deductions and payments and all applicable
regulations have been complied with.
(g) The Disclosure Documents contain details so far as they
affect the Company of all current dispensations agreed
with the Inland Revenue in relation to PAYE and all
notifications given by the Inland Revenue under section
166, ICTA 1988.
57
21.1.6 Investigations
The Company has not been subject to any visit, audit,
investigation, discovery or access order by any Taxation
Authority (other than those that are routinely carried out
by a Taxation Authority) and so far as the Warrantors are
aware there are no circumstances existing which make it
likely that a visit, audit, investigation, discovery or
access order will be made.
21.1.7 Residence
The Company is and always has been resident for Taxation
purposes only in the jurisdiction in which it is
incorporated and does not and has not undertaken any
business or owned any assets in any other jurisdiction.
21.1.8 Tax provision
Full provision or reserve has been made in the Accounts
prepared in accordance with the standard accounting practice
applicable to the Company for all Taxation assessed or
liable to be assessed on the Company or for which it is
accountable in respect of income, profits or gains earned,
accrued or received or deemed to be earned, accrued or
received on or before the Balance Sheet Date, including
distributions made down to such date or provided for in the
Accounts and proper provision has been made in the Accounts
for deferred Taxation in accordance with generally accepted
accounting principles.
21.1.9 Concessions and arrangements
The amount of Taxation chargeable on the Company during any
accounting period ending on or within the six years before
the Balance Sheet Date has not depended on any concessions,
agreements or other formal or informal arrangements with any
Taxation Authority.
21.1.10 Section 765, ICTA 1988
The Company has not without the prior consent of the
Treasury carried out or agreed to carry out any transaction
under section 765, ICTA 1988 which would be unlawful in the
absence of such consent and has, where relevant, complied
with the requirements of section 765A(2), ICTA 1988 (supply
of information on movement of capital within the EU) and any
regulations made or notice given thereunder.
21.1.11 Transactions requiring clearance or consent
All particulars furnished to any Taxation Authority in
connection with an application for clearance or consent by
the Company or on its behalf or affecting the Company has
been made and obtained on the basis of full and accurate
disclosure to the relevant Taxation Authority of all
relevant material facts and considerations; and any
transaction for which clearance or consent was obtained has
been carried into effect only in accordance with the terms
of the relevant clearance or consent.
21.1.12 Calculation of Taxation liability
The Company has sufficient records relating to past events
to permit accurate calculation of the Taxation liability or
relief which would arise upon a disposal or realisation or
supply on completion of each asset owned by the Company at
the
58
Balance Sheet Date or acquired by the Company since that
date but before Completion.
21.1.13 Claims and disclaimers
The Company has duly submitted all claims and disclaimers
the making of which has been assumed for the purposes of the
Accounts.
21.2 Corporation tax, including corporation tax on chargeable gains
21.2.1 Base values and acquisition costs
If each of the capital assets of the Company were disposed
of on the date hereof for a consideration equal to the book
value of that asset in, or adopted for the purposes of, the
Accounts or, in the case of assets acquired since the
Balance Sheet Date, equal to the consideration given upon
its acquisition, no liability to corporation tax on
chargeable gains or balancing charges under the CAA would
arise and for the purpose of determining the liability to
corporation tax on chargeable gains there shall be
disregarded any relief and allowances available to the
Company other than amounts falling to be deducted under
section 38, TCGA.
21.2.2 Short life assets
The Company has not made any election under section 37, CAA
nor is it taken to have made such an election under section
37(8)(c), CAA.
21.2.3 Long life assets
The Company does not own and has not owned a long life asset
(within the meaning of section 38A, CAA) in respect of which
any claim for capital allowances would be subject to the
provisions of section 38E-38G, CAA.
21.2.4 Industrial buildings
None of the assets of the Company expenditure on which has
qualified for a capital allowance under Part I, CAA has at
any time been used otherwise than as an industrial building
or structure.
21.2.5 Distributions
No distribution within the meaning of sections 209, 210 and
211, ICTA 1988 has been made (or will be deemed to have been
made) by the Company after 5th April, 1965 except dividends
shown in its audited accounts and the Company is not bound
to make any such distribution.
21.2.6 Demergers
The Company has not been engaged in nor been a party to any
of the transactions set out in sections 213 to 218
inclusive, ICTA 1988 nor has it made or received a
chargeable payment as defined in section 218(1), ICTA 1988.
21.2.7 Issues of securities
No securities (within the meaning of section 254(1), ICTA
1988) issued by the Company and remaining in issue at the
date of this Agreement were issued in such circumstances
that the interest payable thereon falls to be treated as a
distribution
59
under either sections 209(2)(d), 209(2)(da) or 209(2)(e),
ICTA 1988, nor has the Company agreed to issue such
securities in such circumstances.
21.2.8 Capital distributions
The Company has not received any capital distribution to
which the provisions of section 189, TCGA could apply.
21.2.9 Land sold and leased back
The Company has not entered into any transaction to which
the provisions of section 779 or 780, ICTA 1988 have been or
could be applied.
21.2.10 Non-deductible payments
No rents, interest, annual payments or other sums of an
income nature paid or payable by the Company or which the
Company is under an existing obligation to pay in the future
under current law and practice are or may be wholly or
partially disallowable as deductions in computing trading
profits, management expenses or charges in computing profits
for the purposes of corporation tax.
21.2.11 No unremittable income or gains
No claim has been made by the Company under sections 584,
585 or 723 ICTA 1988 or under section 279, TCGA.
21.2.12 Payments to directors, officers or employees
The Company has not agreed to make any payment to or agreed
to provide any benefit for any Director or former director,
officer or employee of the Company, whether as compensation
for loss of office, termination of employment or otherwise,
which is not allowable as a deduction in calculating the
profits of the Company for Taxation purposes whether up to
or after the Balance Sheet Date.
21.2.13 Transfer pricing
The Company is not a party to any transaction or arrangement
under which it will be required to pay for any asset or any
services or facilities of any kind an amount which is in
excess of the market value of that asset or those services
or facilities, neither is or was the Company a party to any
transaction or arrangements to which the provisions of
section 770A and schedule 28 AA, ICTA 1988 will apply and
nor will the Company receive any payment for an asset or any
services or facilities of any kind that it has supplied or
provided or is liable to supply or provide which is less
than the market value of that asset or those services or
facilities.
21.2.14 Transactions not at arm's length
The Company has not disposed of or acquired any asset in
circumstances falling within section 17 or 19, TCGA nor
given or agreed to give any consideration to which section
128(1)(2), TCGA will apply.
21.2.15 Transactions between connected persons
No allowable loss has accrued to the Company to which
section 18(3), TCGA will apply.
60
21.2.16 Depreciatory transactions
(h) No allowable loss which might accrue on the disposal by
the Company of any share in or security of any company
is so far as the Warrantors are aware likely to be
reduced by virtue of the provisions of sections 176 and
177, TCGA.
(i) The Company has not been a party to any scheme or
arrangement whereby the value of an asset has been
materially reduced as set out in sections 30-34, TCGA.
21.2.17 Other claims made by the Company
The Company has made no claim under section 280, TCGA (tax
on chargeable gains payable by instalments).
21.2.18 Gifts
The Company has not received any assets by way of gift as
mentioned in section 282, TCGA and the Company has not held,
and does not hold, shares in a company to which section 125,
TCGA could apply.
21.2.19 Non-resident companies
(j) There has not accrued or arisen any income, profit or
gain in respect of which the Company may be liable to
corporation tax by virtue of the provisions of section
13, TCGA or Chapter IV of Part XVII, ICTA 1988.
(k) The Company has not been served with a notice in
respect of the unpaid corporation tax liability of any
company pursuant to section 191, TCGA.
21.2.20 Controlled foreign companies
No notice of the making of a direction under section 747,
ICTA 1988 has been received by the Company and so far as the
Warrantors are aware no circumstances exist which would
entitle the Inland Revenue to make such a direction or to
apportion any profits of a controlled foreign company to the
Company pursuant to section 752, ICTA 1988.
21.2.21 Agent for non-residents
The Company has not been a party to any transaction or
arrangement whereby it is or may hereafter become liable for
Taxation under or by virtue of section 42A, ICTA 1988 or
regulations made thereunder or section 126, FA 1995.
21.2.22 Loan relationships
(l) All interests, discounts and premiums payable by the
Company in respect of its loan relationships (within
the meaning of section 81, FA 1996) are eligible to be
brought into account by the Company as a debit for the
purposes of Chapter II of Part IV, FA 1996 at the time
and to the extent that such debits are recognised in
the statutory accounts of the Company.
(m) The Disclosure Documents contain full particulars of
any debtor relationship (within the meaning of section
103, FA 1996) of the Company which relates to a
relevant discounted security (within the meaning of
paragraph 3 of
61
schedule 13, FA 1996) to which paragraph 17 or 18 of
schedule 9, FA 1996 applies.
(n) The Company has not been a party to a loan relationship
which had an unallowable purpose (within the meaning of
paragraph 13 of schedule 9, FA 1996).
(o) The Disclosure Documents contain full particulars of:
(i) any loan relationships to which the Company is
a party to which paragraph 8 of schedule 15, FA
1996 has applied or will apply on the
occurrence of a relevant event (within the
meaning of paragraph 8(2) of schedule 15, FA
1996);
(ii) 2the amount of any deemed chargeable gain or
deemed allowable loss that has arisen or will
arise on the occurrence of such relevant event;
and
(iii) any election made pursuant to paragraph 9 of
schedule 15, FA 1996.
(p) The Company has not entered into any transaction to
which paragraph 11 of schedule 9, FA 1996 applies.
21.3 Close companies
21.3.1 Close company status
The Company has at all times been a close company within the
meaning of sections 414 and 415, ICTA 1988.
21.3.2 Close investment-holding company status
The Company has not in any accounting period beginning after
31st March, 1989 been a close investment-holding company as
defined in section 13A, ICTA 1988.
21.3.3 Distributions
No distribution within section 418, ICTA 1988 has ever been
made by the Company.
21.3.4 Loans to participators
Any loans or advances made or agreed to be made by the
Company within sections 419 and 420 or 422, ICTA 1988 have
not been released or written off or agreed to release or
write off the whole or any part of any such loans or
advances.
21.4 Inheritance tax
21.4.1 No transfers of value and associated operations
The Company has made no transfers of value within sections
94 and 202, ITA nor has the Company received a transfer of
value such that liability might arise under section 199, ITA
nor has the Company been party to associated operations in
relation to a transfer of value as defined by section 268,
ITA.
21.4.2 Inland Revenue charge
62
There is no unsatisfied liability to inheritance tax
attached to or attributable to the Shares or any asset of
the Company and none of them are subject to an Inland
Revenue charge as mentioned in section 237 and 238, ITA.
21.4.3 Power of sale, mortgage or charge
No asset owned by the Company nor the Shares are liable to
be subject to any sale, mortgage or charge by virtue of
section 212, ITA.
21.5 VAT
21.5.1 Returns and payments
The Company is a taxable person duly registered for the
purposes of VAT.
21.5.2 VAT groups
The Company is not and has not been a member of a group for
VAT purposes.
21.5.3 Transactions between connected persons
The Company has not been or agreed to be party to any
transaction or arrangement in relation to which a direction
has been or could be made under paragraph 1 of schedule 6,
VATA or to which paragraph 2(3A) of schedule 10, VATA
applied.
21.5.4 Charge to VAT as agent or representative
The Company is not and has not agreed to become liable for
VAT by virtue of sections 47 and 48, VATA.
21.5.5 VAT and Properties
The Company or its relevant associate for the purposes of
paragraph 3(7) of schedule 10, VATA has exercised the
election to waive exemption from VAT (pursuant to paragraph
2 of schedule 10, VATA) only in respect of those Properties
listed (as having been the subject of such an election) in
the Disclosure Documents and:
(q) neither the Company nor its relevant associate has any
obligation to exercise such an election in respect of
any other of the Properties;
(r) any notification of the election and information
required by paragraph 3(6) of schedule 10, VATA has
been given and any permission required by paragraph
3(9) of schedule 10, VATA has been properly obtained;
(s) so far as the Warrantors are aware no election has or
will be disapplied or rendered ineffective by virtue of
the application of the provisions of paragraph 2 (3AA)
of schedule 10, VATA;
(t) the Company has not agreed to refrain from making an
election in relation to any of the Properties.
21.5.6 Capital goods scheme
63
The Company does not own and has not at any time within the
period of ten years preceding the date hereof owned any
assets which are capital items subject to the Capital Goods
Scheme under Part XV of the VAT Regulations 1995.
21.6 Stamp duty
21.6.1 Stamp duty
All stampable documents wheresoever executed (other than
those which have ceased to have any legal effect) to which
the Company is a party as a purchaser, transferee, assignee,
lessee or mortgagee and which are required to prove the
Company's right, title or interest in an asset beneficially
owned by the Company on Completion have been duly stamped or
stamped with a particular stamp denoting that no stamp duty
is chargeable.
64
SCHEDULE 4
PART 1
UK PROPERTIES
(1) (2) (3) (4) (5)
DESCRIPTION OF TENURE REGISTERED OR TITLE NUMBER AND EXISTING USE
PROPERTY UNREGISTERED GRADE OF TITLE (IF
REGISTERED)
Unit 38 Harrogate Leasehold Unregistered N/A Offices and storage
Business Park,
Wetherby Road,
Harrogate
Unit 2 Back Gladstone Licence Unregistered N/A Storage
Street,
Harrogate
Premises at 19 Verbal agreement Unregistered N/A Offices and storage
Greenfield Avenue,
Stourbridge
PART 2
US PROPERTIES
(1) (2) (3) (4) (5)
DESCRIPTION OF TENURE REGISTERED OR TITLE NUMBER AND EXISTING USE
PROPERTY UNREGISTERED GRADE OF TITLE (IF
REGISTERED)
Premises at Leasehold N/A N/A Offices and storage
Xxxxxxxx Xxxxxx
Xxxx, Xxxxx
Xxxxxxx
Xxxxxxxxx, Xxxxxx
Xxxx, Xxxxxxx
65
PART 3
LEASES/LICENCES
(1) (2) (3) (4) (5)
DESCRIPTION OF DATE TERM PARTIES CURRENT YEARLY RENT
PROPERTY
Unit 38 Harrogate 14/07/2000 5 year from and D S Estates Limited ***
Business Park, including 03/04/2000 (1)
Wetherby Road,
Harrogate
Atlantech Medical
Devices Limited (2)
Unit 2 Back 05/06/2001 Until determined by Pelican Marketing ***
Gladstone Street, one month's written Limited (1)
Harrogate notice
Atlantech Medical
Devices Limited (2)
19 Greenfield May 2000 Until determined by Xxxxxx Xxxxxx (1) ***
Avenue reasonable notice
Stourbridge Atlantech UK (2)
__________
*** Certain information on this page has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
66
SCHEDULE 5
PART I
BASIS FOR PREPARATION OF THE COMPLETION ACCOUNTS
The Completion Accounts shall consist of the following as at the close of
business on the date of Completion:
(i) ***
(ii) ***
The Completion Accounts shall be prepared in accordance with the accounting
policies and principles adopted by each Company to the extent consistent with US
GAAP and otherwise accordance with the applicable standards under US GAAP.
***
(i) ***
(ii) ***
For the avoidance of doubt, at Completion Atlantech will repay outstanding loans
from directors, which in aggregate total ***. A corresponding equivalent amount
will appear in the Completion Accounts as an inter-company loan from the
Purchaser.
The Completion Accounts shall include a schedule listing the full and accurate
details of all claims, elections, surrenders, disclaimers, notices or consents,
the adjustment to or revision of making, giving or doing of which in each case
was taken into account in computing the provision or reserve for Tax in the
Completion Accounts.
__________
*** Certain information on this page has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
67
SCHEDULE 6
COMPLETION
PART 1
1. Warrantors' obligations
On Completion, the Warrantors shall deliver to the Purchaser:
1.1 statements from each of the banks at which each Company and each of
the Subsidiaries maintains an account of the amount standing to the
credit or debit of all such bank accounts as at the close of business
no earlier than three Business Days prior to Completion;
1.2 the cash book balances of the Company and each of the Subsidiaries as
at Completion with statements reconciling such cash book balances and
the relevant cheque books with the balances on the bank accounts of
the Company and each of the Subsidiaries as shown by the statements
referred to in paragraph 1.1;
1.3 the cheque books relating to all the bank accounts of the Company and
each of the Subsidiaries together with confirmation that no cheques
have been written by the Company or any of the Subsidiaries since
preparation of the statements referred to in paragraph 1.2;
1.4 the (i) Tax Deed duly executed by each of the Warrantors, and (ii)
Service Agreements in the agreed terms duly executed by each of
Xxxxxxxx Xxxxx, Xxxxx Xxxx-Xxxxx, Xxxxxxxx Xxxxxx and Xxxxx Xxxxxx;
1.5 transfers of the Shares duly executed by the registered holders
thereof in favour of the Purchaser or its nominee(s) together with the
relevant original share certificates in the names of such registered
holders or appropriate deeds of indemnity;
1.6 such waivers, consents or other documents (including any power of
attorney under which any document required to be delivered under Part
1 of this schedule has been executed) in the agreed terms to enable
the Purchaser and its nominee(s) to be registered as the holders of
the Shares;
1.7 original certificates in respect of all issued shares in the capital
of each of the Subsidiaries;
1.8 the statutory registers and minute books (properly written up to the
time immediately prior to Completion), the common seal (if any), the
certificate of incorporation and (if applicable) any certificate of
incorporation on change of name of the Company and each of the
Subsidiaries;
1.9 the documents of title to the Properties;
1.10 the written resignations in the agreed terms of all the Directors
(except Xxxx Xxxxx and Xxxxx Xxxx-Xxxxx) from their respective
offices, such resignations to take effect from Completion;
1.11 the written resignation of the auditors of the Company and of each of
the Subsidiaries in the agreed terms to take effect from Completion
containing the statements referred to in section 394(1), CA 85 that
they consider there are no such circumstances as are mentioned in that
section and confirming that they have deposited or shall deposit that
statement in accordance with section 394(2), CA 85 at the respective
registered offices of the Company and each of the Subsidiaries; and
68
2. Purchaser's obligations
On completion, the Purchaser shall deliver to each Warrantor:
2.1 a counterpart of the Tax Deed duly executed by the Purchaser;
2.2 a counterpart of each Service Agreement duly executed by the relevant
Company; and
2.3 a counterpart of a *** agreement for each Warrantor in the agreed
terms duly executed by the Guarantor.
__________
*** Certain information on this page has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
69
PART 2
On Completion, the Warrantors shall cause a board meeting of the
Company and of each of the Subsidiaries to be held at which:
1. in the case of each Company only, the said transfers of the Shares
shall be passed for registration and registered (subject to the same
being duly stamped, which shall be at the cost of the Purchaser);
2. the resignations referred to in paragraphs 1.10 and 1.11 of Part 1
shall be tendered and accepted so as to take effect at the close of
the meeting;
3. persons nominated by the Purchaser (in the case of directors subject
to any maximum number imposed by the relevant articles of association)
shall be appointed additional directors;
4. Messrs. PricewaterhouseCoopers LLP shall be appointed auditors.
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SCHEDULE 7
INTELLECTUAL PROPERTY
A - PART 1 REGISTERED PROPRIETARY INTELLECTUAL PROPERTY
***
__________
*** Certain information on this page has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the portions.
71
B - TRADE XXXX PORTFOLIO
COUNTRY OF
NAME OF TRADE XXXX REGISTRATION CLASSES REGISTERED TRADE XXXX NUMBER
-------------------------------------------------------------------------------------
*** *** *** ***
-------------------------------------------------------------------------------------
*** *** ***
-------------------------------------------------------------------------------------
*** ***
-------------------------------------------------------------------------------------
*** ***
-------------------------------------------------------------------------------------
__________
*** Certain information on this page has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
72
PART 2 UNREGISTERED PROPRIETARY INTELLECTUAL PROPERTY
UNREGISTERED RIGHT DETAILS
--------------------------------------------------------------------
*** ***
--------------------------------------------------------------------
*** ***
--------------------------------------------------------------------
Unregistered trade names PED
Endoflip
Cobra
Revolution
Arthroclear
Pathfinder
Barracuda
Xxxxxx
Manta 1
Swordfish
Beluga
Piranha
Jaws
Tiger Shark
Hammerhead
--------------------------------------------------------------------
__________
*** Certain information on this page has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
73
PART 3 LICENCES IN
***
__________
*** Certain information on this page has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
74
PART 4 LICENCES OUT
***
__________
*** Certain information on this page has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
75
SCHEDULE 8
LIMITATION OF WARRANTORS' LIABILITY
PART 1
GENERAL LIMITATIONS
1. Notwithstanding the provisions of Clause 6, the Vendors shall not be
liable in respect of a breach of any of the Warranties if and to the
extent that the loss occasioned thereby has been recovered under the
Indemnities or the Tax Deed.
2. The Warrantors shall not be liable under the Warranties:
2.1 to the extent that the facts which might result in a Claim or possible
Claim were Disclosed;
2.2 to the extent that the subject of the Claim is allowed or provided for
or reserved in the Accounts, the Management Accounts or the Completion
Accounts or was specifically referred to in the notes to any such
accounts in respect thereof; or
2.3 to the extent that a Claim arises or is increased:
2.3.1 wholly or partly from an act or omission compelled by law;
2.3.2 as a result of any increase in rates of Taxation since the
date of this Agreement; or
2.3.3 wholly or partly as a result of the passing or coming into
force of or any change in any enactment, law, regulation,
directive, requirement or any practice of any government,
government department or agency or regulatory body
(including but not limited to extra-statutory concessions of
the Inland Revenue) after the date of this Agreement whether
or not having retrospective effect; or
2.4 if and to the extent that a Claim is increased due to the Purchaser or
the Guarantor failing to act in all material respects in accordance
with the provisions of paragraph 5 of this schedule; or
2.5 to the extent that such liability occurs or arises as a result of or
is otherwise attributable to any voluntary act, transaction or
omission of either Company or the Subsidiary or the Purchaser or the
Guarantor or any member of the Purchaser's Group on or after
Completion; or
2.6 to the extent that such liability occurs or arises wholly as a result
of any act or omission carried out by the Warrantors at the specific
request of the Purchaser or the Guarantor after Completion; or
2.7 to the extent that the income, profits or gains in respect of which
the liability arises were actually earned, accrued or received by
either Company or the Subsidiary but were not reflected in the
Accounts or the Management Accounts or Completion Accounts; or
2.8 to the extent that any Claim by the Purchaser or the subject matter
thereof has been or is made good or is otherwise compensated for
(otherwise than by the Purchaser or any member of the Purchaser's
Group); or
2.9 to the extent that the matter to which it relates
76
2.9.1 is or, but for this Agreement, is recoverable by either
Company or the Subsidiaries from insurers and the amount is
so recovered; or
2.9.2 is in respect of lost goodwill or possible business
following Completion where such loss is unrelated to a
Claim.
3. The Purchaser agrees for itself and on behalf of every member of the
Purchaser's Group with the Warrantors that in respect of any matter
which may give rise to a Claim which relates to both Companies:
3.1 no loss, damage, cost, expense or other liability shall be met more
than once;
3.2 such Claim shall for the purposes of paragraph 6 of this schedule
shall be separate identifiable and quantifiable in respect of each
Company.
4.
4.1 Where the Purchaser and/or either Company and/or the Subsidiary is/are
at any time entitled to recover from some other person (including any
Tax Authority) any sum in respect of any matter giving rise to a Claim
the Purchaser shall and shall procure that the relevant Company or the
Subsidiary shall take all reasonable steps to enforce such recovery
prior to issuing proceedings against the Warrantors (but, for the
avoidance of doubt, without prejudice to its right to take action
against the Warrantors including the right to serve a notice of claim
on the Warrantors in accordance with paragraph 6.6 of Part 2 and/or
Part 3 of this Schedule), and in the event that the Purchaser or the
Company or the Subsidiary shall recover any amount from such other
person the amount of the Claim against the Warrantors shall be reduced
by the amount recovered less all costs, charges and expenses
reasonably incurred by the Purchaser or the Company or the Subsidiary
in recovering that sum from such other person.
4.2 If the Warrantors pay at any time to the Purchaser or to either
Company or to a Subsidiary an amount pursuant to a Claim and the
Purchaser or the Company or a Subsidiary subsequently becomes entitled
to recover from some other person any sum in respect of any matter
giving rise to such Claims the Purchaser shall and shall procure that
the relevant Company or the Subsidiary shall take all reasonable steps
to enforce such recovery and shall, if successful in such recovery,
forthwith repay to the Warrantors so much of the amount paid by them
to the Purchaser or the relevant Company or the Subsidiary as does not
exceed the sum recovered from such other person less all costs,
charges and expenses reasonably incurred by the Purchaser or the
relevant Company or the Subsidiary in recovering that sum from such
other person.
4.3 If any amount is repaid to the Warrantors by the Purchaser or either
Company or the Subsidiary pursuant to paragraph 4.2 above an amount
equal to the amount so repaid shall be deemed never to have been paid
by the Warrantors for the purposes of Part 2 of this schedule and
accordingly shall not be treated as an amount in respect of which any
liability has been incurred.
5.
5.1 If the Purchaser or either Company or a Subsidiary become aware of a
matter which is reasonably likely to give rise to a Claim:
5.1.1 the Purchaser shall (or shall procure that the relevant
Company or the Subsidiary concerned shall) as soon as
reasonably practicable give written notice to each Warrantor
of the matter and shall consult with each Warrantor with
respect to such
77
matter but such notice shall not be a condition precedent to
the liability of the Warrantors;
5.1.2 the Purchaser shall (and shall procure that the Company or
Subsidiary concerned shall) provide to each Warrantor and
his advisers reasonable access to premises and personnel and
to relevant assets, documents and records within the
Purchaser's Group for the purposes of investigating the
matter and enabling the Warrantors to take the action
referred to in paragraph 5.1.4;
5.1.3 each Warrantor (at his cost) may take copies of the
documents or records, and photograph the premises or assets,
referred to in paragraph 5.1.2;
5.1.4 subject to paragraph 5.1.5 below and the Warrantors
accepting unconditionally in writing to the Purchaser
liability for a relevant Claim the Purchaser shall (i) (and
shall procure that the Company or Subsidiary concerned
shall) take such action as the Warrantors may reasonably
request in writing to negotiate, avoid, dispute, resist,
mitigate, compromise, defend or appeal against any such
Claim and any adjudication with respect thereto which shall
include (without limitation) the Company or Subsidiary
applying to postpone (so far as legally possible) the
payment of any taxation and (ii) shall not, and shall ensure
that no member of the Purchaser's Group will admit liability
in respect of, or compromise, or settle, the matter without
the prior written consent of the Warrantors (such consent
not to be unreasonably withheld or delayed);
5.1.5 the Warrantors shall indemnify and secure the Purchaser and
the relevant Company and Subsidiary to their reasonable
satisfaction against all losses, damages and expenses
including interest on overdue tax and reimburse to the
Purchaser and the relevant Company and Subsidiary all
out-of-pocket expenses reasonably incurred by them in
complying with their obligations under this paragraph 5;
PART 2
LIMITATIONS UNDER THE WARRANTIES/TAX DEED
6. The liability of the Warrantors in respect of any claim under the
Warranties or claim under the Tax Deed (and any claim pursuant to
clause 9 of this Agreement with respect to paragraphs 6.3 and 6.5
below):
6.1 shall not arise unless and until the amount of such claim when
aggregated with other claims based on essentially the same or similar
facts exceeds *** in respect of any single item;
6.2 shall not arise unless and until the amount of such claim when
aggregated with the amount of any other such claim made against the
Warrantors under this Agreement or the Tax Deed or which would have
been made but for the operation of this paragraph 6.2 exceeds *** in
which event all of such claim or claims shall be recoverable hereunder
(and not just the excess);
6.3 in respect of such claims in connection with Atlantech shall not (when
aggregated with the amount of all other such claims together with any
claim pursuant to clause 9 of this Agreement) exceed *** and
__________
*** Certain information on this page has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
78
6.4 in respect of such claims in connection with Atlantech UK shall not
(when aggregated with the amount of all other such claims) exceed ***
and
6.5 shall not (when aggregated with the amount of all other such claims
together with any claim pursuant to clause 9 of this Agreement) exceed
*** and
6.6 shall cease on the date falling eighteen (18) months after the date of
this Agreement with respect to claims under the Warranties (other than
Tax Warranties), except in respect of matters which have been the
subject of a bona fide written claim which is made before the relevant
date by or on behalf of the Purchaser to the Vendors giving reasonable
details of all material aspects of the Claim including the Purchaser's
bona fide estimate of the amount thereof. Any such claim shall (if it
has not previously been satisfied, settled or withdrawn) be deemed to
have been withdrawn unless legal proceedings in respect of it have
been commenced by both being issued and served within six months of
such notification to the Warrantors,
provided always that in the case of each Warrantor his /her liability in
aggregate shall never exceed an amount equal to the amount of Provisional
Consideration received by him at Completion as set out opposite his name in
Column (E) of Schedule 1 (or, in the case of Xxxxx Xxxxxx ***.
PART 3
TIME LIMITATIONS UNDER THE TAX WARRANTIES AND THE TAX DEED
The liability of the Warrantors in respect of any Claim or any claim
under the Tax Deed shall cease on the date falling seven (7) years
after the date of this Agreement except in respect of matters which
have been the subject of a bona fide written claim which is made
before the relevant date by or on behalf of the Purchaser to the
Warrantors giving reasonable details of all material aspects of the
claim including the Purchaser's bona fide estimate of the amount
thereof. Any such claim shall (if it has not previously been
satisfied, settled or withdrawn) be deemed to have been withdrawn
unless legal proceedings in respect of it have been commenced by both
being issued and served within six months of such notification to the
Warrantors.
__________
*** Certain information on this page has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
79
SCHEDULE 9
SUBSIDIARY WARRANTIES
PART A
ATLANTECH MEDICAL DEVICES (USA) INC.
In this Part A the following words shall have the following meanings:
"Accounts" means the unaudited monthly management accounts of the
Subsidiary for the sixteen month period ended on the Accounts Date
comprising the unaudited balance sheet and profit and loss account as
at and for the period ended on the Accounts Date;
"Accounts Date" means 31 August 2002.
1. The facts set out under the heading "The Subsidiary" in Schedule 2 are
accurate in all material respects and not misleading.
2. Atlantech is the legal and beneficial owner of the shares in the
Subsidiary set out under the heading "The Subsidiary" opposite
Atlantech's name in Schedule 2. Such shares constitute the whole of
the allotted and issued share capital of the Subsidiary, have been
properly allotted and issued and there is no agreement, arrangement or
obligation requiring the creation, allotment, issue, transfer,
redemption or repayment of, or the grant to any person of the right
(whether conditional or not) to require the allotment, issue,
transfer, redemption or repayment of, any shares in the capital of the
Subsidiary (including, without limitation, an option or right or
pre-emption or conversion).
3. There is no litigation, arbitration, prosecution, administrative or
other legal proceedings or dispute in existence or threatened against
Atlantech Medical Devices Limited in respect of the shares in the
Subsidiary and there are no facts known to the Warrantors or any of
them which might give rise to any such proceedings or any such
dispute.
4. There is no encumbrance on, over or affecting any of the issued or
unissued shares in the capital of the Subsidiary and there is no
agreement or commitment to give or create any encumbrance or
negotiations which may lead to such an agreement or commitment and no
claim has been made by any person to be entitled to an encumbrance in
relation thereto.
5.
5.1 The Accounts disclose all the material assets and liabilities of the
Subsidiary as at the Accounts Date.
5.2 The Accounts have been prepared in accordance with accounting policies
consistent with US GAAP with all due care. The cumulative profits,
assets and liabilities of Atlantech Medical Devices (USA) Inc stated
in the US Accounts have not been knowingly or wilfully misstated.
6. Since the Accounts Date the Subsidiary has not (other than as
disclosed in the Accounts):
6.1 acquired any material assets (namely, any asset of a value in excess
(in aggregate) of US$10,000);
6.2 incurred any material liability (namely, any liability of a value in
excess (in aggregate) of US$10,000); or
80
6.3 entered into any material contract (written or otherwise) outside the
ordinary course of business.
7. All the property and assets which are described and included in the
Accounts or which are used in connection with the business of the
Subsidiary are:
7.1 legally and beneficially owned by the Subsidiary or used by the
Subsidiary with the consent of the legal and beneficial owner;
7.2 in the possession or under the control of the Subsidiary;
7.3 free from all encumbrances and there is not any agreement or
commitment to give or create, and no claim has been made by any person
entitled to; any encumbrance; and
7.4 are situated in the United States of America.
8. So far as the Warrantors are aware, at all times during the period of
occupation by the Company the U.S. Property has been used, and at all
times the Business has been conducted thereon, in all material
respects in compliance with Environmental Law.
9. Details of all insurance policies effected by the Subsidiary or by any
other person in relation to any of the Subsidiary's assets are annexed
to the Disclosure Letter and all such details are accurate in all
material respects and all such insurance policies are currently in
force.
10. All the accounts, books, registers, ledgers and financial and other
material records of whatsoever kind of the Subsidiary (including all
invoices and other records required for customs and excise purposes)
are materially up to date, in its possession or under its control and
have been properly and accurately kept and compiled in all material
respects.
11. The Subsidiary does not own any material Intellectual Property and so
far as the Warrantors are aware has not disclosed any Confidential
Information to any third party (other than the Companies).
12. Copies of the employment agreements for all employees of the
Subsidiary are annexed to the Disclosure Letter and these contain all
material terms of employment with respect to such individuals.
13. There is not outstanding any claim against, nor are there (or have
there been) any litigation, arbitration or administrative proceedings
involving, the Subsidiary and no dispute exists between the Subsidiary
and any customer or supplier thereof nor are there any circumstances
of which the Warrantors are aware and which are believed by the
Warrantors to be likely to give rise to any such dispute or claim.
14. Save as disclosed in the Accounts, the Subsidiary does not have
outstanding any borrowing nor any encumbrance or any obligation to
create an encumbrance.
15. So far as the Warrantors are aware, neither the Subsidiary nor any of
its officers (during the course of their duties in relation to the
business of the Subsidiary) has committed or omitted to do any act or
thing the commission or omission of which is in contravention of any
statutory obligation or any other federal law of the United States of
America or law of the state of Florida.
16. The Subsidiary has not since its incorporation had any subsidiary or
subsidiary undertaking.
81
17. The copy of the articles of incorporation of the Subsidiary annexed to
the Disclosure Letter is accurate and complete.
18. The lease with respect to the premises at South Semoran Boulevard,
Winter Park, Florida annexed to the Disclosure Letter is accurate in
all material respects and the Subsidiary does not own or have any
other interest in any real estate.
19. The Subsidiary does not operate any pension scheme for its employees
nor is liable or under any obligation to contribute to any pension
scheme.
PART B
ATLANTECH ITALIA SRL
1. Atlantech is the legal and beneficial owner of 80% shares in Atlantech
Italia Srl. So far as the Warrantors are aware, such shares constitute
80% of the allotted and issued share capital of Atlantech Italia Srl,
have been properly allotted and issued and there is no agreement,
arrangement or obligation requiring the creation, allotment, issue,
transfer, redemption or repayment of, or the grant to any person of
the right (whether conditional or not) to require the allotment,
issue, transfer, redemption or repayment of, any shares in the capital
of Atlantech Italia Srl (including, without limitation, an option or
right or pre-emption or conversion).
2. There is no litigation, arbitration, prosecution, administrative or
other legal proceedings or dispute in existence or threatened against
Atlantech Medical Devices Limited in respect of the shares in
Atlantech Italia Srl and there are no facts known to the Warrantors or
any of them which might give rise to any such proceedings or any such
dispute.
3. So far as the Warrantors are aware, there is not outstanding any claim
against, nor are there (or have there been) any litigation,
arbitration or administrative proceedings involving, Atlantech Italia
Srl *** and no dispute exists between Atlantech Italia Srl and any
customer or supplier thereof nor are there any circumstances of which
the Warrantors are aware and which are believed by the Warrantors to
be likely to give rise to any such dispute or claim.
*** Certain information on this page has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
82
SIGNED AS A DEED by ) _______________________
Director
for and on behalf of )
ARTHROCARE CORPORATION ) _______________________
Director/Secretary
SIGNED AS A DEED by ) _______________________
Director
for and on behalf of )
ARTHROCARE CAYMAN LIMITED ) _______________________
Director/Secretary
SIGNED AS A DEED by XXXXXXXX XXXXXX
acting as Attorney for
XXXXXXXX XXXXX
in the presence of:
________________________________
Name
________________________________
Address
________________________________
________________________________
________________________________
Occupation
SIGNED AS A DEED by XXXXXXXX XXXXXX
acting as Attorney for
XXXXX XXXX-XXXXX
in the presence of:
________________________________
Name
________________________________
Address
________________________________
________________________________
________________________________
Occupation
83
SIGNED AS A DEED by
XXXXXXXX XXXXXX
in the presence of:
________________________________
Name
________________________________
Address
________________________________
________________________________
________________________________
Occupation
SIGNED AS A DEED by XXXXXXXX XXXXXX
acting as Attorney for
***
in the presence of:
________________________________
Name
________________________________
Address
________________________________
________________________________
________________________________
Occupation
SIGNED AS A DEED by XXXXXXXX XXXXXX
acting as Attorney for
***
in the presence of:
________________________________
Name
________________________________
Address
________________________________
__________
*** Certain information on this page has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
84
________________________________
________________________________
Occupation
SIGNED AS A DEED by XXXXXXXX XXXXXX
acting as Attorney for
***
in the presence of:
________________________________
Name
________________________________
Address
________________________________
________________________________
________________________________
Occupation
SIGNED AS A DEED by XXXXXXXX XXXXXX
acting as Attorney for
***
in the presence of:
________________________________
Name
________________________________
Address
________________________________
________________________________
________________________________
Occupation
SIGNED AS A DEED by XXXXXXXX XXXXXX
acting as Attorney for
***
in the presence of:
__________
*** Certain information on this page has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
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________________________________
Name
________________________________
Address
________________________________
________________________________
________________________________
Occupation
SIGNED AS A DEED by XXXXXXXX XXXXXX
acting as Attorney for***
in the presence of:
________________________________
Name
________________________________
Address
________________________________
________________________________
________________________________
Occupation
SIGNED AS A DEED by XXXXXXXX XXXXXX
acting as Attorney for
***
in the presence of:
__________
*** Certain information on this page has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
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