EXHIBIT 10.1 Warthog PLC Acquisition Agreement
THIS AGREEMENT is dated the day of 2004 and made
BETWEEN:
(1) WARTHOG PLC a company registered in England & Wales under company number
04066354 whose registered office is at 00 Xxxx Xxxxx, Xxxxxxx, Xxxxxxxx
XX0 0XX (the "Seller");
(2) TIGER TELEMATICS INC a company registered in the USA under company number
0001065581 whose registered office is at 00000 Xxxxxxxxx Xxxxxxx Xxxxx,
Xxxxx 000, Xxxxxxxxxxxx, XX 00000, Xxxxxxx, XXX (the "Buyer"); and
(3) THOSE PERSONS named in Part II of SCHEDULE 1, being the directors of the
Seller at Completion (the "Directors")
WHEREAS:
The Seller wishes to sell and the Buyer wishes to acquire the entire issued
share capital of the Companies and the Transferred WGL Indebtedness on and
subject to the terms of this Agreement.
IT IS AGREED as follows:
1. DEFINITIONS AND INTERPRETATION
1.1. Definitions
In this Agreement, unless the context otherwise requires, the following
words and expressions shall have the meanings set opposite them:
"AB" means 42-Bit-AB, brief details of
which are set out in Part I of
SCHEDULE 2;
"Affiliate" means:
(a) in respect of any body corporate,
a body corporate which is its
subsidiary or holding company, or
a body corporate which is a
subsidiary of that holding
company (and each such body
corporate); and
(b) in respect of any individual, any
person connected with that
individual;
"Audited Accounts" means the audited consolidated balance
sheet of the Warthog Group made up as
at the Balance Sheet Date and the
audited consolidated profit and loss
account of the Warthog Group in
respect of the financial year ended on
the Balance Sheet Date including, in
each case, the notes, reports,
statements and other documents which
are, or would be required by law to
be, annexed to them and to be sent or
made available to members for that
financial year, complete and accurate
copies of all of which are annexed to
the Disclosure Letter;
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"Balance Sheet Date" means 31 March 2004;
"Business Day" means a day (other than a Saturday or
Sunday) on which banks are open for
ordinary banking business in London;
"the Buyer's Accountants" means Xxxxx & Xxxxxxxxxx Limited of 0
Xxxxxxx Xxxxx, Xxxxxxxx, Xxxxxx XX0
0XX or such other firm of chartered
accountants nominated by the Buyer;
"Buyer's Group" means the Buyer and each of its
Affiliates;
"Buyer's Solicitors" means Xxxxxxx XXX, Xxxxxxx Xxxxx, 00
Xxxxxxx, Xxxxxx XX0X 0XX;
"Cash Deposit" means the sum of 150,000 GBP to be
transferred by the Buyer into the
Escrow Account in accordance with
Clause 4.3.2;
"Companies" means those companies, brief details
of which are set out in Part I of
SCHEDULE 2; and "Company" means any
one of them;
"Companies Acts" means statutes from time to time in
force concerning companies including
(without limitation) the Companies Xxx
0000, the Companies Xxx 0000, Part V
of the Criminal Justice Xxx 0000 and
the Companies Consolidation
(Consequential Provisions) Xxx 0000;
"Companies' Directors" means the persons named in Part I of
SCHEDULE 2 as directors of the
Companies;
"Completion" means completion of the sale and
purchase of the Sale Shares and the
Transferred WGL Indebtedness in
accordance with Clause 4;
"Completion Date" means the date of this Agreement;
"Consideration Stock" means the common stock at $0.01 in the
Buyer to be issued in accordance with
Clause 3.1.2.b);
"Continuing Directors" means the persons named in Part 1 of
SCHEDULE 2 as continuing directors
following completion;
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"Contracts Assignment" means the agreement in the agreed form
between the Seller and WGL under which
the Seller agrees to transfer to WGL
the benefit and burden of certain
contracts;
"Determination Date" means the date falling 14 days
following the expiry of the enquiry
period open to the Inland Revenue in
relation to the tax computations for
the relevant accounting period;
"Disclosure Letter" means the letter in agreed form dated
the same date as this Agreement and
written and delivered by the Seller to
the Buyer;
"Documentation" means all the user documentation,
manuals and/or written product
specifications for a Game;
"Dormant Companies" means Phatfish Limited, Warthog
Property Limited, Warthog
Entertainment Limited and Roadhog
Games Limited;
"Employees" has the meaning given in Paragraph
16.2.1 of SCHEDULE 3;
"Encumbrance" includes (without limitation) 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 (including any created by
law), title retention or other
security agreement or arrangement or
any rental, hire purchase, credit sale
or other agreement for payment on
deferred terms;
"ERA 1996" means the Employment Rights Xxx 0000;
"Escrow Account" means an interest bearing deposit
account in the joint names of the
Seller's Solicitors and the Buyer's
Solicitors to be opened in accordance
with Clause 7;
"Existing Banking Facilities" means the facilities made available to
the Warthog Group by HSBC Bank Plc
pursuant to the letters from HSBC Bank
Plc dated 19 October 2004 and 21
October 2004 namely (i) a loan
of 100,000 GBP made available to the
Seller; (ii) a forward exchange
contract and currency option facility
made available to WGL and Zed Two in
the sum of 600,000 GBP; (iii) a
business card facility made available
to the Seller, WGL and Zed Two; and
(iv) a facility to utilise HSBC's
Electronic Banking service, Hexagon,
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for supplier payments and payment of
salaries; "FPSI" means Fever Pitch
Studios Inc, brief details of which
are set out in Part I of SCHEDULE 2;
"Games Content" means without limitation those
copyrightable aspects of a particular
Game that may be perceived by the
user, including, without limitation,
artwork, sound, graphic and/or music
files, audio visual elements and
displays, user interface, logos,
trademarks, characters and names,
dialogue, story line and data;
"Games" means all those entertainment video
games that have been or are at
Completion in the process of being
developed by the Seller and/or the
Companies and that are identified in
Part II of SCHEDULE 2;
"Health and Safety Law" means all or any applicable EC,
national or local law including all
statutes, statutory instruments,
regulations, common law, treaties,
European directives, codes of
practice, circulars or guidance notes
concerning the health and safety of
those who work for the Company whether
as employees or otherwise, visit the
Properties or are in any way affected
by the activities of the Company or by
persons working for the Company
including (but without limitation) the
Xxxxxxxxx Xxx 0000, the Offices, Shops
and Railway Premises Xxx 0000, the
Fire Precautions Xxx 0000, the Health
and Safety at Work etc Xxx 0000 and
the Construction (Design and
Management) Regulations 1994;
"Information Systems" means any computer hardware, software,
operating systems, information
systems, network and telecommunication
systems used by the Company in the
business carried on by it immediately
prior to Completion and which is
material to the carrying on of such
business;
"Intellectual Property means agreements or arrangements in
Agreements" which Intellectual Property Rights are
licensed, assigned, mortgaged or
charged, or any options are conferred
for such things, or which otherwise
govern or affect the ownership,
validity or use of any Intellectual
Property Rights or the disclosure or
use of any confidential information or
know how;
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"Intellectual Property Rights" Means the Games Content and all
patents, copyright (including, but not
limited to, ownership rights in all
titles, computer code, themes,
objects, characters, character names,
stories, dialogue, catch phrases,
locations, concepts, artwork,
animation, sounds, musical
compositions, audio-visual effects and
methods of operation, and any related
documentation), trade marks, design
rights, registered designs, utility
models, plant variety rights, database
rights, rights in trade or business
names, semiconductor topography
rights, domain names, moral rights,
rights in performances, rights
protecting confidential information
and know how, rights protecting
goodwill and reputation and all
similar or analogous rights or forms
of protection anywhere in the world,
and all applications and rights to
register any of those rights;
"IPR Assignment" means the agreement in the agreed form
between the Seller and WGL under which
the Seller agrees to transfer to WGL
certain Intellectual Property Rights;
"Issue Price" means the average closing price of the
Consideration Stock during the 14 days
prior to Completion;
"ITEPA" means the Income Tax (Earnings and
Xxxxxxxx) Xxx 0000;
"Listed Intellectual Property means the Intellectual Property
Agreements" Agreements set out in the list annexed
to the Disclosure Letter;
"Listed Intellectual Property means the Intellectual Property Rights
Rights" referred to in the list annexed to the
Disclosure Letter;
"London Stock Exchange" means London Stock Exchange plc;
"Management Accounts" means the management accounts of the
Warthog Group for the period from the
Balance Sheet Date to 30 September
2004, complete and accurate copies of
which are annexed to the Disclosure
Letter;
"Marketing Information" means all information relating to the
marketing of any products or services
including customer names and lists,
sales targets, sales statistics,
market share statistics, marketing
surveys and reports, marketing
research and any advertising or other
promotional materials;
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"Product Liability" means a liability arising out of
death, personal injury or damage to
property caused by a defective product
or defective services sold, supplied
or provided by the Company in the
course of its business on or prior to
the date of this Agreement;
"Properties" means those properties briefly
described in SCHEDULE 7 and, where the
context admits, "Property" means any
one or more of such properties and
includes any part or parts of any of
them;
"Provisional Consideration" has the meaning given in SCHEDULE 5;
"Recognised Investment Exchange" has the meaning given in section 285
of the Financial Services and Markets
Xxx 0000;
"Release Date" means the date falling on the first
anniversary of Completion;
"Repaid WGL Indebtedness" means the sum of 202,000 GBP to be
repaid by WGL to the Seller in
accordance with Clause 4.3.3
constituting part repayment of the
indebtedness due by WGL to the Seller;
"Restricted Business" has the meaning given in Clause 8.1;
"Sale Documentation" means this Agreement, the Tax Deed,
the Disclosure Letter, the Transferred
WGL Indebtedness Agreement and the IPR
Assignment;
"Sale Shares" means the shares, and in the case of
FPSI, the common stock to be bought
and sold pursuant to Clause 2.1, being
all of the issued shares in the
capital of the Companies (as set out
in SCHEDULE 2);
"Seller's Solicitors" means Halliwells LLP, Xx Xxxxx'x
Xxxxx, Xxxxx Xxxxxx, Xxxxxxxxxx X0
0XX;
"Staff Members" means Xxxxx Xxxx and Xxxxxx Xxxxxx;
"Stock Escrow" means those stock certificates
representing the Consideration Stock
to be held in escrow in accordance
with clause 6;
Stock Escrow Agent means the Buyer's Solicitors;
"Taxation" and "Tax" includes (without limitation)
corporation tax, advance corporation
tax, the charge under section 419 of
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the Taxes Xxx 0000, income tax,
capital gains tax, the charge under
section 601(2) of the Taxes Xxx 0000,
Value Added Tax, excise duties, the
charge to tax under Schedule 9A of the
VATA 1994, customs and other import
duties, inheritance tax, stamp duty,
stamp duty reserve tax, capital
duties, national insurance
contributions, foreign taxation and
duties, all Swedish applicable taxes
concerning 42 Bit AB and all US
applicable taxes concerning Fever
Pitch Studios Inc., and any payment
whatsoever which the Company may be or
become bound to make to any person as
a result of the operation of any
enactment relating to any such taxes
or duties and all penalties, charges
and interest relating to any of the
foregoing or resulting from a failure
to comply with the provisions of any
enactment relating to taxation;
"Tax Deed" means the deed of covenant in agreed
form relating to Taxation between the
Seller and the Buyer;
"Taxes Act 1988" means the Income and Corporation Xxxxx
Xxx 0000;
"TCGA 1992" means the Taxation of Chargeable Gains
Xxx 0000;
"Transferred WGL Indebtedness" means the indebtedness due at
Completion by WGL to the Seller in the
sum of $6,039,993 to be transferred to
the Buyer under the terms of the
Transferred WGL Indebtedness
Agreement;
"Transferred WGL means the agreement in the agreed form
Indebtedness Agreement" between the Seller and the Buyer under
which the Seller agrees to transfer to
the Buyer the Transferred WGL
Indebtedness;
"Tusk Facilitation Tool" means a cross-platform games
development system consisting of a
runtime engine, tools and utilities
designed to facilitate the process of
games development as more particularly
defined in the TUSK proprietary
components explanatory manual annexed
to this Agreement;
"UK Companies" means WGL, Zed Two Limited, Phatfish
Limited, Roadhog Games Limited,
Warthog Property Limited and Warthog
Entertainment Limited, brief details
of which are set out in Part I of
SCHEDULE 2;
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"UK Listing Authority" means the Financial Services Authority
acting in its capacity as the
competent authority for the purposes
of Part VI of the Financial Services
and Markets Xxx 0000;
"UK Property" means the property at which the
Warthog Group carries on its business
in the UK as detailed in SCHEDULE 7;
"Value Added Tax" and "VAT" mean value added tax as provided for
in the VATA 1994 and legislation
supplemental thereto or replacing,
modifying or consolidating it;
"VATA 1994" means the Value Added Tax Xxx 0000;
"Waived Indebtedness" means that indebtedness owed by WGL
and Zed Two to the Seller to be waived
by the Seller immediately prior to
completion under the terms of the
Waived Indebtedness Letter;
"Waived Indebtedness Letter" means the letter in the agreed form
from the Seller addressed to WGL and
Zed Two confirming that all
indebtedness due immediately prior to
Completion by WGL and Zed Two to the
Seller (other than the Repaid WGL
Indebtedness and the Transferred WGL
Indebtedness) has been waived;
"Warranties" means the warranties, representations
and indemnities set out or referred to
in Clause 9, in SCHEDULE 3, in
SCHEDULE 4 and in SCHEDULE 6 (and
"Warranty" means any one of them);
"Warrantor" means the Seller;
"Warthog Group" means the Seller and the Companies;
"WGL" means Warthog Games Limited brief
details of which are set out in Part I
of SCHEDULE 2; and
"Zed Two" means Zed Two Limited, brief details
of which are set out in Part I of
SCHEDULE 2.
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1.2. Interpretation
In this Agreement, unless the context otherwise requires:
1.2.1. references to:
a) any statute or statutory provision shall be construed as
including a reference to:
(i) any statute or statutory provision which it
re-enacts (whether with or without
modification);
(ii) that statute or statutory provision as amended,
extended, consolidated or replaced by other
provisions from time to time (whether before or
after the date of this Agreement but in respect
of any statutory provision as amended, extended,
consolidated or replaced after the date of this
Agreement (other than U.S. securities laws) save
to the extent that it would impose any
additional or greater obligations or liabilities
on any party to this Agreement); and
(iii) any order, regulation, instrument or other
subordinate legislation (as defined in section
21(1) of the Interpretation Act 1978) made under
it.
b) Clauses and Schedules are references to clauses of and
schedules to this Agreement; references to Sub-Clauses
or Paragraphs are, unless otherwise stated, references
to sub-clauses of the Clause or paragraphs of the
Schedule in which the reference appears; references to
Sub-Paragraphs are, unless otherwise stated, references
to sub-paragraphs of the Paragraph in which the
reference appears; and references to this Agreement
include the Schedules;
c) the "parties" are references to the parties to this
Agreement and "party" shall be construed accordingly;
d) a "person" includes any individual, firm, body
corporate, unincorporated association, partnership,
government or state (whether or not having a separate
legal personality);
e) any document being in "agreed form" are to that document
in the form signed or initialled by or on behalf of the
parties for identification;
f) "indemnify" and "indemnifying" any person against any
circumstance include indemnifying and keeping him
harmless from all actions, claims and proceedings from
time to time made against him and all loss or damage and
all payments, costs or expenses (including, without
limitation, legal expenses) made or incurred by that
person as a consequence of or which would not have
arisen but for that circumstance;
g) any statute, statutory instrument, regulation, bye-law
or other requirement of English law and 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;
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1.2.2. any question whether a person is connected with another
shall be determined in accordance with section 839 of
the Taxes Xxx 0000 (subject to the deletion of the words
from "Except" to "arrangements" in sub-section (4) of
that section);
1.2.3. words in the singular include the plural and vice versa
and words in one gender include any other gender;
1.2.4. words and phrases the definitions of which are contained
or referred to in Part XXVI of the Companies Xxx 0000
shall be construed as having the same meanings
attributed to them; and
1.2.5. where any statement is qualified by the expression "so
far as the Seller is aware" or "to the best of the
Seller`s knowledge and belief" or any similar
expression, that statement shall be deemed to include an
additional statement that it has been made after due and
careful enquiry of the Directors and Xxxxxxx Xxxxxx and
it shall not be a defence that the Seller did not
appreciate the relevance of any particular matter.
1.3. Headings
The headings and sub-headings are inserted for convenience only
and shall not affect the construction of this Agreement.
1.4. Schedules
The Schedules form part of this Agreement and have the same
force and effect as if set out in the body of this Agreement.
2. SALE OF THE SALE SHARES AND THE TRANSFERRED WGL INDEBTEDNESS
2.1. Sale and Purchase
Subject to the terms of this Agreement, the Seller with full
title guarantee shall sell, and the Buyer shall purchase, the
Sale Shares and the Transferred WGL Indebtedness free from all
Encumbrances and together with all rights attaching to the Sale
Shares and the Transferred WGL Indebtedness now or at any time
after the date of this Agreement.
2.2. No Sale of Part Only
The Buyer shall not be obliged to complete the purchase of any
of the Sale Shares and/or any of the Transferred WGL
Indebtedness unless the purchase of all the Sale Shares and all
the Transferred WGL Indebtedness is completed simultaneously.
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3. CONSIDERATION
3.1. Consideration
3.1.1. The consideration for the sale of the Sale Shares and
the Transferred WGL Indebtedness shall be the sum of
$7,750,000 apportioned in the amounts set out in
SCHEDULE 1, but subject to adjustment as provided in
SCHEDULE 5.
3.1.2. The consideration for the Sale Shares and the
Transferred WGL Indebtedness shall be paid as follows:-
a) as to US$750,000 (or its spot equivalent in pounds
sterling on Completion) in cash which shall include the
Cash Deposit; and
b) as to US$7million by way of the issue to the Seller at
the Issue Price of the Consideration Stock in accordance
with clause 6.2.
3.1.3. In addition to the consideration payable under clauses
3.1.1 and 3.1.2 the Buyer shall pay on the Determination
Date after the end of each of the accounting periods of
the Companies following Completion, a sum equal to 50%
of the amount by which the liability of the Buyer's
Group to make any payment of taxation in that financial
period is reduced by the losses of the Companies which
as at 30 September 2004 were available for carrying
forward for tax purposes. For these purposes:-
a) any losses of the Companies (including losses arising
after completion) shall be deemed to be applied in
reducing any taxable profits in the reverse order in
which they arise on a last in, first out basis;
b) the amount of any payment to be made pursuant to this
clause 3.1.3 shall (following a review by the Seller's
accountants) be certified in writing by the Buyer's
accountants (acting as experts and not arbitrators) and
the Buyer shall deliver a copy of such certificate
together with a copy of the relevant tax computations
and reasonable supporting evidence to the Seller within
seven days of the closure of the enquiry period open to
the Inland Revenue in relation to the relevant tax
computations by the Inland Revenue;
c) if losses are applied to relieve or mitigate a tax
liability pursuant to the Tax Deed or the tax Warranties
they shall not be taken into account in calculating any
consideration due under this clause 3.1.3; and
d) the additional consideration payable under this clause
shall be allocated between the Companies in the same
proportion as set out in Part I of SCHEDULE 1 in respect
of the consideration payable under clause 3.1.1.
3.2. Rights attaching to the Consideration Stock
The Consideration Stock shall be treated in the same manner as
all other common stock in the Buyer with respect to dividends,
distributions, share splits, reverse splits, pre-emption, rights
issues and any other event which may affect the common stock in
the Buyer generally.
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4. COMPLETION
4.1. Date and Place of Completion
Completion shall take place on the Completion Date at the
offices of the Buyer's Solicitors immediately following
execution of this Agreement.
4.2. Seller`s Obligations
On Completion the Seller shall:
4.2.1. deliver to the Buyer transfers of the Sale Shares duly
executed by the registered holders thereof in favour of
the Buyer or its nominee(s) together with the relative
share certificates;
4.2.2. procure that each of the Companies' Directors (other
than the Continuing Directors) and each of the secretary
or secretaries of the Companies resign from all their
offices and employments with the Companies, each
delivering to the Buyer a deed (in agreed form) made out
in favour of the respective Company acknowledging that
he has no claim outstanding for compensation or
otherwise and is not entitled to any payment or
compensation under the ERA 1996;
4.2.3. deliver to the Buyer as agent for each of the Companies:
a) all the statutory and other books (duly written up to
date) of each of the UK Companies and its certificate of
incorporation, any certificates of incorporation on
change of name and common seals;
b) the title deeds to the Properties other than in respect
of those Properties which are disclosed in the
Disclosure Letter as being charged and the title deeds
as being held by the chargee; and
c) evidence of satisfaction of the legal mortgage dated 29
November 2002 over the UK Property;
d) all credit and charge cards held for the account each of
the Companies and all cheque books and debit cards
relating to the bank accounts of each of the Companies;
e) bank statements in respect of each account of each of
the Companies as at the close of business on the last
Business Day prior to Completion, together in each case
with a reconciliation statement prepared by the Seller
showing the position at Completion (including details of
unpresented cheques drawn or received by the relevant
company and standing orders payable since the date of
such bank statements);
f) all such other items as the Buyer shall have requested.
4.2.4. deliver the Tax Deed duly executed by the covenantors
named therein;
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4.2.5. deliver the Transferred WGL Indebtedness Agreement duly
executed by the Seller;
4.2.6. deliver the Waived Indebtedness Letter duly executed by
the Seller;
4.2.7. deliver the IPR Assignment duly executed by the Seller;
4.2.8. deliver the Contracts Assignment duly executed by the
Seller;
4.2.9. deliver a sale agreement in relation to AB in the agreed
form;
4.2.10. procure that a board meeting of each of the Companies be
held at which there shall be:
a) passed a resolution to approve the transfers of the Sale
Shares and (subject only to due stamping) to register,
in the register of members, the transferee as the holder
of the shares concerned and the execution of the Sale
Documentation;
b) appointed as directors and/or secretary of the Company
such persons as the Buyer may nominate;
c) tendered and accepted the resignations and
acknowledgements of the respective Companies' Directors
and secretaries referred to in Clause 4.2.2 each such
acceptance to take effect at the close of the relevant
meeting; and
d) revoked all existing authorities to banks and new
authorities shall be given to such banks and on such
terms as the Buyer may direct.
4.2.11. deliver to the Buyer, certified as correct by the
secretary of each of the Companies, the minutes of each
such board meeting;
4.2.12.
a) repay, all amounts owed by it to each of the Companies,
whether due for payment or not;
b) deliver to the Buyer a deed in agreed form duly executed
by the Seller acknowledging that it has no claim against
any of the Companies and that there is no agreement or
arrangement under which any of the Companies has any
actual, contingent or prospective obligation (including
but not limited to any obligation under any guarantee or
like obligation entered into by any of the Companies) to
or in respect of any of them; and
c) in respect of any such agreement or arrangement as is
referred to in Clause 4.2.12.b) which previously
existed, deliver to the Buyer evidence of the release or
termination of it in agreed form.
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4.3. Buyer's Obligations
On Completion the Buyer shall:
4.3.1. satisfy the consideration for the Sale Shares and the
Transferred WGL Indebtedness as provided by clause 3,
any payment in cash to be made in sterling in
immediately available funds to the Seller at:
Bank: Royal Bank of Scotland Plc
Sort Code: 16-00-01
Account Name: Halliwells Client Account
Account Number: 00000000
4.3.2. transfer the Cash Deposit to the Escrow Account in
accordance with clause 7;
4.3.3. procure the repayment by WGL to the Seller of the Repaid
WGL Indebtedness;
4.3.4. deliver to the Stock Escrow Agent a certificate
registered in the name of the Seller representing the
Consideration Stock; and
4.3.5. deliver to the Seller counterparts of the Tax Deed, the
Transferred WGL Indebtedness Agreement and the Waived
Indebtedness Letter.
5. POST COMPLETION OBLIGATIONS
5.1. The Seller shall as soon as reasonably practicable after
Completion and in any event not later than two months after
Completion (at its own expense):
5.1.1. convene an EGM to approve the change of name of the
Seller so as to omit the word "Warthog" or any other
confusingly similar word or name; and
5.1.2. cease in any manner whatsoever to use or display any
trade or service words, trade or service names, domain
names or logos used or held by the Companies or
confusingly similar words domain names or logos.
5.2. The Buyer shall assist for a period not exceeding three months
following Completion in the preparation of the half-yearly
report and accounts of the Seller in respect of the period to 30
September 2004 and in assisting in the collation of accounting
information about the Seller and the Companies. For these
purposes the assistance shall take the form of access to the
Staff Members in each case for a period not exceeding ten days
in aggregate, taking account of the following points:
5.2.1. the needs of the Buyer in terms of the services of the
Staff Members must at all times be paramount;
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5.2.2. the Staff Members must not be put into any potential
conflict of interest situation;
5.2.3. a reasonable arms length daily fee (not to exceed 000
XXX (plus VAT) per day in aggregate) shall be payable to
the Buyer for the services of the Staff Members;
5.2.4. neither of the Staff Members will be asked to assist in
reviewing any accounting information referable to the
period following Completion other than in relation
solely to the Seller's accounting information; and
5.2.5. no liability will arise either for the Staff Members or
the Buyer in relation to any services provided.
5.3. The Buyer shall deliver to the Seller the annual accounts of
Fever Pitch Studios Inc and Zed Two within three months of the
end of the financial period ended 31 March 2005 in respect of
the financial period ended on such date to enable the Seller to
fulfil its obligations to issue additional consideration, if
any, to the vendors of such companies in accordance with the
terms of their acquisition.
5.4. The Buyer agrees to introduce as soon as practicable following
Completion an incentive package for the senior management and
staff of the Warthog Group on a basis to be agreed. The Buyer
has currently offered the management team and staff an incentive
package involving the vesting over a period of time of up to
$2million in aggregate of the Buyer's stock. The Buyer will
agree to any equivalent package for the management team and
staff which achieves these objectives in a manner which is more
tax efficient for the management team and staff provided that
the overall cost to the Buyer is not thereby increased.
5.5. The Seller undertakes that for so long as it remains the
registered holder of any of the Sale Shares after Completion it
will:
5.5.1. hold the Sale Shares and the dividends and other
distributions of profits or surplus or other assets
declared, paid or made in respect of them after
completion and all rights arising out of or in
connection with them in trust for the Buyer;
5.5.2. deal with and dispose of the Sale Shares and all such
dividends, distributions and rights as the Buyer may
direct;
5.5.3. vote at all meetings which it shall be entitled to
attend as the registered holder of the Sale Shares in
such manner as the Buyer shall direct; and
5.5.4. execute all instruments of proxy or other documents
which the Buyer may require to enable the Buyer to
attend and vote at any such meeting.
5.6. The Buyer agrees to use all reasonable endeavours to assume as
soon as practicable following Completion the liabilities of the
Seller under the Existing Banking Facility if and to the extent
that such liabilities relate to facilities provided to the
Companies and to obtain the release of the Seller from such
liabilities under the Existing Banking Facility. The Seller
agrees to co-operate with the Buyer to enable the Buyer to
facilitate these arrangements. As part of these arrangements,
15
the Seller agrees to use its reasonable endeavours to procure
the release as soon as practicable following Completion of the
Companies from any guarantees provided by them to any third
party in relation to any liabilities of the Seller.
6. STOCK ESCROW
6.1. The Seller agrees to abide by the "private placement" exemption
regulations for US security law purposes and in particular
acknowledges that the Consideration Stock will be subject to
sale restrictions for a minimum period of 12 months following
Completion and that it is not acquiring the Consideration Stock
with a view towards its distribution to third parties. The
Seller agrees that the Consideration Stock shall not be sold,
distributed or otherwise transferred except in accordance with a
sale under Rule 144 of the United States securities laws. In any
event no shares of Consideration Stock that are "Restricted
Securities" within the meaning of Rule 144 shall be distributed
or otherwise transferred to any of the Seller's shareholders.
6.2. The certificates representing the Consideration Stock issued in
the name of the Seller shall be delivered to the Stock Escrow
Agent and held in the Stock Escrow subject to adjustment based
on:
6.2.1. any reduction or increase of the Consideration Stock
pursuant to SCHEDULE 5; and
6.2.2. any claims agreed or finally determined under the
Warranties or the Tax Deed pursuant to the Tax Deed
but not otherwise;
6.3. For the purposes of any set-off under the Stock Escrow, the
Consideration Stock shall be valued at the higher of the Issue
Price and the average closing price of the Stock during the 14
days preceding the date of the relevant determination under
SCHEDULE 5 or (as the case may be) the date of settlement of any
claim.
6.4. All of the Consideration Stock less any amounts deducted under
the terms of this clause shall be held in the Stock Escrow and
released on the Release Date by transfer of the Consideration
Stock to the Seller.
6.5. If any claim under the Warranties remains outstanding on the
Release Date, Consideration Stock to a value equal to the amount
of the claim shall be retained in the Stock Escrow until the
matter has been finally determined by a court of competent
jurisdiction and for these purposes the Consideration Stock to
be retained within the Stock Escrow shall be valued by the
Buyer's Accountants (acting as experts and not arbitrators) at
the higher of the Issue Price and the average closing price of
the Stock during the 14 days preceding the Release Date.
6.6. The Stock Escrow arrangements will be structured in such a way
that the Stock Escrow Agent, on behalf of the Seller shall be
free to exchange the Consideration Stock held in the Stock
Escrow upon the take-over of the Buyer for stock in the offeror
on the same terms as those offered to all other holders of the
Buyer's Stock of the same class or if the other is a cash offer
procure that there is paid to or for the benefit of the Seller
such amount of the cash as the Seller would have been entitled
16
to had the Consideration stock been unrestricted (subject always
to any ongoing restrictions applicable to the Consideration
Stock under the Stock Escrow and any United States securities
laws).
6.7. Subject to clause 6.2, and the Stock Escrow, the Buyer shall at
the request of Seller agree to use all reasonable endeavours to
facilitate the Seller's sale of the Consideration Stock on the
first anniversary of Completion pursuant to Rule 144 under US
securities laws.
7. CASH DEPOSIT
7.1. The Cash Deposit shall be held in the Escrow Account on the
terms of a letter to be addressed to the Seller's Solicitors and
the Buyer's Solicitors from the Seller and the Buyer in the
agreed form.
7.2. The Cash Deposit shall be held on terms that the Buyer shall
only be entitled to deduct from any balance of the Cash Deposit
held in the Escrow Account any sum relating to the following:
7.2.1. the amount (not exceeding 150,000 GBP plus VAT) which is
currently being retained from the purchase price of the
UK Property as a result of planning defects and which
WGL fails to recover; and
7.2.2. any finally determined claims under the Warranties.
7.3. Any balance of the Cash Deposit in the Escrow Account on the
first anniversary of Completion shall be released to the Seller.
8. RESTRICTION OF SELLER
8.1. Restricted Business
In this Clause, "Restricted Business" means the development of
interactive software games (which includes but is not limited to
production and character creation, concept development, writing
and programming) and which directly or indirectly competes with
the business of any of the Companies as carried on at the date
of this Agreement.
8.2. Covenants
The Seller undertakes with the Buyer (as trustee for itself and
the Company) and its successors in title that it will not:
8.2.1. for the period of five years after the date of this
Agreement, either on its own account or in conjunction
with or on behalf of any person carry on or be engaged,
concerned or interested (directly or indirectly and
whether as principal, shareholder, director, employee,
agent, consultant, partner or otherwise) in carrying on
any Restricted Business (other than as a holder of less
than five (5) per cent of any class of shares or
debentures listed on any Recognised Investment
Exchange);
8.2.2. for the period of five years after the date of this
Agreement, either on its own account or in conjunction
with or on behalf of any person, solicit or endeavour to
entice away from any of the Companies any person who at
the date of this Agreement is (or who within a period of
17
one year prior to the date of this Agreement has been)
an officer or employee of or consultant to any of the
Companies whether or not such person would commit a
breach of contract by reason of leaving service or
office;
8.2.3. for the period of five years after the date of this
Agreement, either on its own account or in conjunction
with or on behalf of any person, employ or engage any
person who at the date of this Agreement is (or who
within a period of one year prior to the date of this
Agreement has been) an officer or employee of or
consultant to any of the Companies whether or not such
person would commit a breach of contract by reason of
leaving service or office;
8.2.4. for the period of five years after the date of this
Agreement, either on its own account or in conjunction
with or on behalf of any person in connection with any
Restricted Business deal with, solicit the custom of or
endeavour to entice away from any of the Companies any
person who at the date of this Agreement is (or who
within a period of one year prior to the date of this
Agreement has been) a customer of any of the Companies
whether or not such person would commit a breach of
contract by reason of transferring business;
8.2.5. for the period of five years after the date of this
Agreement, either on its own account or in conjunction
with or on behalf of any person in connection with any
Restricted Business endeavour to entice away from any of
the Companies any person who at the date of this
Agreement is (or who within a period of one year prior
to the date of this Agreement has been) a supplier of
any of the Companies whether or not such person would
commit a breach of contract by reason of transferring
business; and
8.2.6. Subject to clause 5.1.1 at any time after the date of
this Agreement, directly or indirectly, use or attempt
to use in the course of any business on its own account
or in conjunction with or on behalf of any person any
trade or service xxxx, trade name, design or logo
(whether registered or not and including any of the
Listed Intellectual Property Rights) used in the
business of any of the Companies or any other name,
logo, trade or service xxxx or design which is or might
be confusingly similar to them.
8.3. Seller to Procure Compliance
The Seller undertakes to take all such steps as shall from time
to time be necessary to ensure compliance with the terms of
Clause 8.2 by employees and agents of the Seller or any of their
Affiliates.
8.4. Separate Covenants
Each of the undertakings in Clauses 8.2 and 8.3 shall be
construed as a separate and independent undertaking and, if one
or more of the undertakings is held to be void or unenforceable,
the validity of the remaining undertakings shall not be
affected.
18
8.5. Reasonableness
The Seller agrees that the restrictions and undertakings
contained in Clauses 8.2 and 8.3 are reasonable and necessary
for the protection of the Buyer's legitimate interests in the
goodwill of the Company, but if any such restriction or
undertaking shall be found to be void or voidable but would be
valid and enforceable if some part or parts of the restriction
or undertaking were deleted, such restriction or undertaking
shall apply with such modification as may be necessary to make
it valid and enforceable.
8.6. Void or Unenforceable Restrictions
Without prejudice to Clause 8.5, if any restriction or
undertaking is found by any court or other competent authority
to be void or unenforceable the parties shall negotiate in good
faith to replace such void or unenforceable restriction or
undertaking with a valid provision which, as far as possible,
has the same legal and commercial effect as that which it
replaces.
8.7. Confidential Information concerning the Companies
Neither the Seller nor any of its officers or employees nor any
of its Affiliates shall make use of or divulge to any third
party (other than to the Seller`s professional advisers for the
purpose of this Agreement in which case the Seller shall use all
reasonable endeavours to procure that such advisers keep such
information confidential on terms equivalent to this Sub-Clause)
any confidential information relating to the Company save only:
8.7.1. insofar as the same has become public knowledge
otherwise than, directly or indirectly, through the
Seller`s breach of this Clause 8.7 or the failure of the
officers, employees or professional advisers referred to
above to keep the same confidential; or
8.7.2. to the extent required by law or by any supervisory or
regulatory body.
9. WARRANTIES
9.1. General
9.1.1. In consideration of the Buyer agreeing to purchase the
Sale Shares and the Transferred WGL Indebtedness and
acknowledging and accepting that the Buyer is entering
into this Agreement in reliance upon each of the
Warranties the Seller warrants to and undertakes with
the Buyer that each of the Warranties is true and
accurate in all respects and not misleading at the date
of this Agreement.
9.2. Buyer's Knowledge
9.2.1. The Warranties are given subject to matters fairly
disclosed in this Agreement or in the Disclosure Letter,
but no other information relating to the Company of
which the Buyer has knowledge (actual or constructive)
shall prejudice any claim made by the Buyer under the
Warranties or operate to reduce any amount recoverable.
19
9.2.2. The covenants implied under the Law of Property
(Miscellaneous Provisions) Xxx 0000 by the words "with
full title guarantee" in Clause 2.1 are limited to the
covenants that would be implied if the words
"reasonably" in section 2(1)(b), "other than any
charges, incumbrances or rights which that person does
not and could not reasonably be expected to know about"
in section 3(1) and the whole of section 6(2) of that
Act were omitted.
9.3. Separate and Independent Warranties
Each of the Warranties shall be separate and independent and,
save as expressly provided, shall not be limited by reference to
any other Warranty or anything in this Agreement.
9.4. Indemnity
The Seller hereby indemnifies the Buyer in respect of any
claims, losses or costs which arise as a result of:
9.4.1. the Companies not obtaining title to the Games, the
Games Content, the Documentation and the Tusk Porting
Facilitation Tool;
9.4.2. 42 Bit AB not being able to obtain a release of the
outstanding floating charge on its assets; and
9.4.3. any claims made against any of the Companies by persons
who have ceased to be employed by one of the Companies
in the period of 6 months prior to the date of this
Agreement.
9.5. Claims
Notwithstanding any other provisions of this Agreement, any
claim made by the Buyer under the Warranties shall be subject to
the provisions of SCHEDULE 8.
9.6. Waiver of Claims
The Seller undertakes to the Buyer that it will not make or
pursue any claim which it has or may have against the Company or
any of the Employees in respect of or arising out of the
Warranties or any information supplied by them to or on behalf
of the Seller or its professional advisers or agents on or prior
to the date of this Agreement.
10. CONFIDENTIALITY
10.1. Confidentiality
Subject to Clause 10.2 and to Clause 11 and without prejudice to
Clause 8.7, each party:
10.1.1. shall treat as strictly confidential information
obtained or received by it as a result of entering into
or performing its obligations under this Agreement and
relating to the negotiations concerning, or the
provisions or subject matter of, this Agreement or the
other party ("Confidential Information"); and
20
10.1.2. shall not, except with the prior written consent of the
other party (which shall not be unreasonably withheld or
delayed), publish or otherwise disclose to any person
any Confidential Information.
10.2. Permitted Disclosures
Clause 10.1 shall not apply if and to the extent that the party
proposing to make such disclosure can demonstrate that:
10.2.1. such disclosure is required by law or by any securities
exchange or regulatory or governmental body having
jurisdiction over it (including the Financial Services
Authority, the London Stock Exchange, the Panel on
Take-overs and Mergers or the Serious Fraud Office) and
whether or not the requirement has the force of law;
10.2.2. the Confidential Information was lawfully in its
possession prior to its disclosure by the other party
(as evidenced by written records) and had not been
obtained from that other party; or
10.2.3. the Confidential Information has come into the public
domain other than through its fault or the fault of any
person to whom the Confidential Information has been
disclosed.
10.3. Continuance of Restrictions
The restrictions contained in this Clause 10 on the part of the
Seller shall survive Completion.
11. ANNOUNCEMENTS
11.1. Restriction
Subject to Clause 11.2, no party to this Agreement shall make
any announcement, whether to the public, to the customers or
suppliers of the Company, or to all or any of the employees of
the Company, concerning the subject matter of this Agreement
without the prior written approval of the other parties (which
shall not be unreasonably withheld or delayed).
11.2. Permitted Announcements
Clause 11.1 shall not apply if and to the extent that such
announcement is required by law or by any securities exchange or
regulatory or governmental body having jurisdiction over it
(including the Financial Services Authority, the London Stock
Exchange, the Panel on Take-overs and Mergers and the Serious
Fraud Office) and whether or not the requirement has the force
of law and provided that any such announcement shall be made
only after reasonable consultation with the other party (given
the timescale within which it is required to be released or
despatched).
21
11.3. Continuance of Restrictions
The restrictions contained in this Clause 11 on the part of the
Seller and the Warrantors shall survive Completion.
12. PROVISIONS RELATING TO THIS AGREEMENT
12.1. Assignment and Third Party Rights
12.1.1. This Agreement shall be binding upon and inure for the
benefit of the successors of the parties but shall not
be assignable, save that the Buyer may at any time
assign all or any part of its rights and benefits under
this Agreement, including the Warranties and any cause
of action arising under or in respect of any of them, to
any transferee of the share capital of the Company, or
to any Affiliate of the Buyer which may enforce them as
if it had also been named in this Agreement as the
Buyer.
12.1.2. A person who is not a party (a "Third Party") has no
right under the Contracts (Rights of Third Parties) Xxx
0000 to enforce any term of this Agreement but this does
not affect any right or remedy of a Third Party which
exists or is available apart from that Act (including,
without limitation, any rights arising pursuant to
Clause 12.1.1).
12.2. Whole Agreement
12.2.1. This Agreement, together with any documents referred to
in it, constitutes the whole agreement between the
parties relating to its subject matter and supersedes
and extinguishes any prior drafts, agreements,
undertakings, representations, warranties, assurances
and arrangements of any nature, whether in writing or
oral, relating to such subject matter.
12.2.2. The Buyer acknowledges that it has not been induced to
enter into this Agreement by any representation,
warranty, promise or assurance by the Seller or any
other person save for those contained in this Agreement
and in the Disclosure Letter. The Buyer agrees that
(except in respect of fraud) it shall have no right or
remedy in respect of any other representation, warranty,
promise or assurance save for those contained in this
Agreement.
12.2.3. No variation of this Agreement shall be effective unless
made in writing and signed by each of the parties.
12.3. Agreement Survives Completion
The Warranties and all other provisions of this Agreement, in so
far as the same shall not have been performed at Completion,
shall remain in full force and effect notwithstanding
Completion.
22
12.4. Rights etc Cumulative and Other Matters
12.4.1. The rights, powers, privileges and remedies provided in
this Agreement are cumulative and are not exclusive of
any rights, powers, privileges or remedies provided by
law or otherwise.
12.4.2. No failure to exercise nor any delay in exercising any
right, power, privilege or remedy under this Agreement
shall in any way impair or affect the exercise of it or
operate as a waiver of it in whole or in part.
12.4.3. No single or partial exercise of any right, power,
privilege or remedy under this Agreement shall prevent
any further or other exercise of it or the exercise of
any other right, power, privilege or remedy.
12.5. Further Assurance
At any time after the date of this Agreement, the Seller shall,
at the request of the Buyer, execute or procure the execution of
such documents and do or procure the doing of such acts and
things as the Buyer may reasonably require for the purpose of
vesting the Sale Shares in the Buyer or its nominee(s) and
giving to the Buyer the full benefit of all the provisions of
this Agreement.
12.6. Invalidity
If any provision of this Agreement shall be held to be illegal,
void, invalid or unenforceable under the laws of any
jurisdiction, the legality, validity and enforceability of the
remainder of this Agreement in that jurisdiction shall not be
affected, and the legality, validity and enforceability of the
whole of this Agreement in any other jurisdiction shall not be
affected.
12.7. Payment to the Seller
Any payment falling to be made to the Seller (or any of them)
under any provision of this Agreement may be made to the
Seller's Solicitors whose receipt shall be an absolute
discharge.
12.8. Counterparts
This Agreement may be executed in any number of counterparts,
which shall together constitute one Agreement. Any party may
enter into this Agreement by signing any such counterpart.
12.9. Costs
Each party shall bear its own costs arising out of or in
connection with the preparation, negotiation and implementation
of this Agreement.
12.10. Notices
12.10.1. Any notice or other communication required to be given
under this Agreement or in connection with the matters
contemplated by it shall, except where otherwise
specifically provided, be in writing in the English
language and shall be addressed as provided in Clause
12.10.2 and may be:
23
a) personally delivered, in which case it shall be deemed
to have been given upon delivery at the relevant
address; or
b) if within the United Kingdom, sent by first class
pre-paid post, in which case it shall be deemed to have
been given two (2) Business Days after the date of
posting; or
c) if from or to any place outside the United Kingdom,
sent by pre-paid priority airmail, in which case it
shall be deemed to have been given seven (7) Business
Days after the date of posting; or
d) sent by fax, in which case it shall be deemed to have
been given when despatched, subject to confirmation of
uninterrupted transmission by a transmission report
provided that any notice despatched by fax after 17.00
hours (at the place where such fax is to be received)
on any day shall be deemed to have been received at
09.00 on the next Business Day.
12.10.2. The addresses and other details of the parties referred
to in Clause 12.10.1 are, subject to Clause 12.10.3:
Name: Tiger Telematics Inc
For the attention of: Xxxx Xxxxxxxxx
Address: 00000 Xxxxxxxxx Xxxxxxx Xxxxx,
Xxxxx 000,
Xxxxxxxxxxxx, XX00000,
Xxxxxxx, XXX
Fax number: 001 904 2799242
Name: Warthog Plc
For the attention of: Xxx Xxxxxxxxx
Address: The Stables, 00 Xxxxxx Xxxx,
Xxxxxxxx, Xxxxxxxx XX0 0XX
Name: Directors
For the attention of: Xxxxxx Xxx
Address: c/o WGL, 00 Xxxx Xxxxx, Xxxxxxx
Xxxxxxxx, XX0 0XX
Fax number: 0161 610 3033
12.10.3. Any party to this Agreement may notify the other party
of any change to its address or other details specified
in Clause 12.10.2, provided that such notification
shall be effective only on the date specified in such
notice or five (5) Business Days after the notice is
given, whichever is later.
13. LAW AND JURISDICTION
13.1. English Law
This Agreement shall be governed by, and construed in accordance
with, English law.
24
13.2. Jurisdiction
In relation to any legal action or proceedings to enforce this
Agreement or arising out of or in connection with this Agreement
("proceedings") each of the parties irrevocably submits to the
exclusive jurisdiction of the English courts and waives any
objection to proceedings in such courts on the grounds of venue
or on the grounds that the proceedings have been brought in an
inappropriate forum.
13.3. Process Agent
The Buyer appoints Gizmondo Europe Limited of 0 Xxxxxx Xxxx
Xxxxxx, Xxxxxxxxxxx Business Park, Xxxxxxxxxxx, Xxxxxxxxx, XX00
0XX (for the attention of the company secretary) as its process
agent to receive on its behalf service of process in any
proceedings in England. If for any reason the process agent
ceases to be able to act as process agent, or no longer has an
address in England, the Buyer irrevocably agrees to appoint a
substitute process agent with an address in England and to
deliver to the Seller a copy of the substitute process agent's
acceptance of that appointment.
AS WITNESS the hands of the duly authorised representatives of the
parties on the date first before written.
25
SCHEDULE 1
PART I
THE SELLER
----------------------------- --------------------------- -------------------- ---------------
(1) (2) (3) (4)
Seller Relevant Sale Cash Consideration Amount of
Name and address Shares/Transferred WGL Allocation ($) Consideration
Indebtedness Stock
----------------------------- --------------------------- -------------------- ---------------
Warthog Plc Warthog Games Limited
(Co No: 04066354) 4,999,100 Ordinary shares 240,000 21,337
whose registered office is
at 00 Xxxx Xxxxx, Xxxxxxx,
Xxxxxxxx, XX0 0XX
----------------------------- --------------------------- -------------------- ---------------
Zed Two Limited
620 A Ordinary shares; 2 -
380 B Ordinary shares
----------------------------- --------------------------- -------------------- ---------------
Phatfish Limited 2 -
2 Ordinary shares
----------------------------- --------------------------- -------------------- ---------------
Roadhog Games Limited 2 -
2 Ordinary shares
----------------------------- --------------------------- -------------------- ---------------
Warthog Property Limited 2 -
2 Ordinary shares
----------------------------- --------------------------- -------------------- ---------------
Warthog Entertainment 2 -
Limited
2 Ordinary shares
----------------------------- --------------------------- -------------------- ---------------
Fever Pitch Studios Inc 240,000 21,337
1,000,000 common stock
----------------------------- --------------------------- -------------------- ---------------
42 Bit AB 269,990 25,605
1,000 shares
----------------------------- --------------------------- -------------------- ---------------
Transferred WGL - 429,587
Indebtedness
----------------------------- --------------------------- -------------------- ---------------
TOTAL: 750,000 497,866
----------------------------- --------------------------- -------------------- ---------------
26
PART II
THE DIRECTORS
------------------------------- ------------------------------------------------
Name Address
------------------------------- ------------------------------------------------
Xxxxxx Xxx 00 Xxxx Xxxx, Xxxxxxx, Xxxxx, Xxxxxxxx XX0 0XX
------------------------------- ------------------------------------------------
Xxxxx Xxxx 000 Xxx Xxxx Xxxx, Xxxxxxxx Xxxxxxxx XX0 0XX
------------------------------- ------------------------------------------------
Xxxxxx Xxxx 00 Xxxxx Xxxx Xxxx, Xxxxxxx, Xxxxx, Xxxxxxxx
XX0 0XX
------------------------------- ------------------------------------------------
Xxxxxx Xxx Xxxxxxxxx The Stables, 00 Xxxxxx Xxxx, Xxxxxxxx,
Xxxxxxxx XX0 0XX
------------------------------- ------------------------------------------------
Xxxxx Xxxxxxxx 00 Xxxxxxxx, Xxxxxxxx, Xxxxxxxx XX0 0XX
------------------------------- ------------------------------------------------
27
SCHEDULE 2
THE COMPANY
PART I
THE COMPANIES
Name: Warthog Games Limited
Number: 03346048
Registered Office: 00 Xxxx Xxxxx, Xxxxxxx, Xxxxxxxx, XX0 0XX
Authorised Capital: 8,000,000 Ordinary shares of 0.01 GBP each
Issued Capital: 4,999,100 Ordinary shares
Directors: Xxxxx Xxxx
Xxxxxx Xxxx
Xxxxxx Xxx
Xxxxx Xxxxxxxx
Secretary: H L Secretaries Limited
Accounting Reference Date: 31 March
Auditors: Xxxxx Xxxxx
Continuing Directors: Xxxxx Xxxx
Xxxxxx Xxxx
Xxxxxx Xxx
28
Name: Zed Two Limited
Number: 03333019
Registered Office: 00 Xxxx Xxxxx, Xxxxxxx, Xxxxxxxx, XX0 0XX
Authorised Capital: 620 A Ordinary shares of 1 GBP each
380 B Ordinary shares of 1 GBP each
Issued Capital: 620 Ordinary A shares
000 Xxxxxxxx X shares
Directors: Xxxxx Xxxx
Xxxxxx Xxx
Secretary: H L Secretaries Limited
Accounting Reference Date: 31 March
Auditors: Xxxxx Xxxxx
Continuing Directors: Xxxxx Xxxx
Xxxxxx Xxx
29
Name: Phatfish Limited
Number: 03747845
Registered Office: 00 Xxxx Xxxxx, Xxxxxxx, Xxxxxxxx, XX0 0XX
Authorised Capital: 100 Ordinary shares of 1 GBP each
Issued Capital: 2 Ordinary shares of 1 GBP each
Directors: Xxxxx Xxxx
Xxxxxx Xxxx
Xxxxxx Xxx
Secretary: H L Secretaries Limited
Accounting Reference Date: 31 March
Auditors: Xxxxx Xxxxx
Continuing Directors: Xxxxx Xxxx
Xxxxxx Xxxx
Xxxxxx Xxx
30
Name: Roadhog Games Limited
Number: 04111584
Registered Office: 00 Xxxx Xxxxx, Xxxxxxx, Xxxxxxxx, XX0 0XX
Authorised Capital: 100 Ordinary shares of 1 GBP each
Issued Capital: 2 Ordinary shares
Directors: Xxxxx Xxxx
Xxxxxx Xxx
Secretary: H L Secretaries Limited
Accounting Reference Date: 31 March
Auditors: Xxxxx Xxxxx
Continuing Directors: Xxxxx Xxxx
Xxxxxx Xxx
31
Name: Warthog Property Limited
Number: 04119664
Registered Office: 00 Xxxx Xxxxx, Xxxxxxx, Xxxxxxxx, XX0 0XX
Authorised Capital: 100 Ordinary shares of 1 GBP each
Issued Capital: 2 Ordinary shares
Directors: Xxxxx Xxxx
Xxxxxx Xxx
Secretary: H L Secretaries Limited
Accounting Reference Date: 31 March
Auditors: Xxxxx Xxxxx
Continuing Directors: Xxxxx Xxxx
Xxxxxx Xxx
32
Name: Warthog Entertainment Limited
Number: 04119667
Registered Office: 00 Xxxx Xxxxx, Xxxxxxx, Xxxxxxxx, XX0 0XX
Authorised Capital: 100 Ordinary shares of 1 GBP each
Issued Capital: 2 Ordinary shares
Directors: Xxxxx Xxxx
Xxxxxx Xxx
Secretary: H L Secretaries Limited
Accounting Reference Date: 31 March
Auditors: Xxxxx Xxxxx
Continuing Directors: Xxxxx Xxxx
Xxxxxx Xxx
33
Name: Fever Pitch Studios Inc
Number: 01621000
Registered Office: 0000 Xxxx Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, XX 00000-0000 XXX
Authorised Capital: 10,000,000
Issued Capital: 1,000,000
Directors: Xxxx Xxxxxxxx
Xxxxxx xxx
Xxxxx Xxxx
Xxxxxx Xxxx
Secretary:
Accounting Reference Date: 31st March
Auditors: Xxxxxx and Xxxxxxx
Continuing Directors: Xxxx Xxxxxxxx
Xxxxxx xxx
Xxxxx Xxxx
Xxxxxx Xxxx
34
Name: 42 Bit AB
Number: 556622-9810
Registered Office: Xxxxxxxxxxxxx 0, 000 00 Xxxxxxxxxxx, Xxxxxx
Authorised Capital: SEK 100,000 - SEK 400,000
Issued Capital: 1,000 Ordinary shares of SEK 100 each
Directors (including office held Xxxxxxxxxxx Xxxxxxx
and other directorships): Xxxxxx Xxx
Simon Xxxx
Xxxxxx Liljetoft (deputy member)
Secretary: ________
Accounting Reference Date: 31 March
Auditors: Xxxxx Xxxx, KPMG
Continuing Directors: Xxxxxxxxxxx Xxxxxxx
Xxxxxx Xxx
Simon Xxxx
Xxxxxx Liljetoft (deputy member)
35
PART II
THE GAMES
o Sticky Balls;
o Momma, Can I Mow the Lawn?
o Milo & the Rainbow Nasties;
o Furious Phil;
o Future Tactics;
o Fallen Kingdoms;
o Xxxxxx Whatever;
o Wrath and Skeller;
o Bloodbowl;
o Conquest 2;
36
SCHEDULE 3
WARRANTIES AND REPRESENTATIONS
INTERPRETATION
(a) Where, in this Schedule, a term is defined in and for the purposes of a
particular Paragraph or Sub-Paragraph, the relevant definition shall
apply, unless the context otherwise requires, for all other purposes of
this Schedule where it is used as a defined term.
(b) In this Schedule references to the "Company" include, unless otherwise
specified, each of the Companies.
1. INVESTMENT WARRANTIES
1.1. The Seller is an "accredited investor" as defined in Rule 501
of Regulation D promulgated under the United States Securities
Act of 1933.
1.2. The Seller acknowledges and agrees that:
1.2.1. the shares of Consideration Stock issued to the
Seller are being acquired by the Seller solely for
its own account for investment purposes only and not
for resale, subdivision, transfer, assignment, pledge
or other disposition; and
1.2.2. it does not have any present plan or intention to
sell, subdivide, transfer, assign, pledge or
otherwise dispose of any part of the Consideration
Stock issued to the Seller or to enter into any
contract or other undertaking or arrangement with
respect thereto.
1.3. The Seller has such knowledge and experience in financial and
business matters that the Seller is capable of evaluating the
merits and risks of an investment in the Consideration Stock
and the Seller can bear the economic risk of such investment.
1.4. The Seller acknowledges and agrees that the Buyer has made
available to the Seller and its attorneys and other
representatives all agreements, documents, records and books
that the Seller has requested relating to its investment in
the Consideration Stock. The Seller further acknowledges and
agrees that it has had an opportunity to ask questions of, and
to receive answers from, individuals acting on behalf of the
Buyer concerning the Buyer and the terms and conditions of the
Seller's investment in the Consideration Stock hereunder, and
answers have been provided to all of such questions to the
full satisfaction of the Seller.
1.5. The Seller has relied only upon such advice as may have been
received from tax, accounting, legal and financial advisors.
The Seller has not received any assurances or representations
from any person associated with the Buyer or its affiliates as
to the benefits, economic, tax or otherwise, likely to result
from its investment in the Consideration Stock.
1.6. The Seller understands that there are substantial restrictions
on the transferability of the Consideration Stock and,
accordingly, the Seller will need to bear the economic risk of
its investment and will not be readily able to liquidate its
investment in case of emergency.
37
1.7. The Seller understands that the shares of Consideration Stock
are restricted securities under the Securities Act and that
they may not be resold, subdivided, transferred, assigned,
pledged or otherwise disposed of unless they are first
registered under the United States federal securities laws or
unless an exemption from such registration is available.
1.8. The Seller understands that save as provided in this Agreement
the Buyer has no obligation to register the Consideration
Stock.
1.9. The Seller understands that the Buyer is relying on the
representations and warranties set forth in this paragraph 1
in issuing the Consideration Stock to the Seller.
2. THE COMPANY AND THE SELLER
2.1. Capacity
The Seller:
2.1.1. has full power and authority to enter into and
perform the Sale Documentation; and
2.1.2. may execute and deliver the Sale Documentation and
perform its obligations under the Sale Documentation
without requiring or obtaining the consent of its
shareholders or of any other person, authority or
body
and the Sale Documentation constitute valid and binding
obligations on the Seller in accordance with its terms.
2.2. Ownership of Sale Shares
The Seller is the registered and sole beneficial owner of the
Sale Shares and the Sale Shares:
2.2.1. comprise the whole of the issued and allotted share
capital of the Companies;
2.2.2. are fully paid up;
2.2.3. were not allotted at a discount;
2.2.4. are free from any Encumbrances and there is no
commitment to give or create, and no person has
claimed to be entitled to, any Encumbrance over all
or any of the Sale Shares; and
2.2.5. have not been the subject of a transfer at an
undervalue (within the meaning of section 238 or
section 339 of the Insolvency Act 1986) within the
past five years.
38
2.3. Ownership of the Transferred WGL Indebtedness
The Seller is the sole beneficial owner of the Transferred WGL
Indebtedness and the Transferred WGL Indebtedness is free from
all Encumbrances.
2.4. Other Securities and Options etc
2.4.1. Other than the Sale Shares, there are no securities
of the Company of any description allotted or in
issue.
2.4.2. Other than pursuant to this Agreement, no person has
or has claimed to have the right (whether exercisable
now or in the future and whether contingent or not)
to call for the allotment, issue, sale, transfer or
conversion of any share or loan capital or other
securities of the Company under any option or other
agreement or arrangement (including conversion rights
and rights of pre-emption).
2.5. Liabilities Owing to or by the Seller
There is not outstanding any indebtedness or other liability
(actual or contingent) owing by the Company to the Seller or
to any Director or to any person connected with any of them,
nor is there any indebtedness owing to the Company by any such
person, and no promise, warranty or representation has been
made to the Seller in connection with the Warranties, the Tax
Deed or the Disclosure Letter in respect of which the Company
might be liable.
2.6. Competing Interests
The Seller has no interest, direct or indirect, in any
business other than that now carried on by the Company which
is or is likely to be or become competitive with the business
or any proposed business of the Company.
3. THE DORMANT COMPANIES
Each of the Dormant Companies has not traded and has no assets,
contracts or employees and has not incurred any indebtedness or other
liabilities (whether actual or contingent, qualified or unqualified,
disputed or undisputed or otherwise).
4. THE COMPANY AND THE LAW
4.1. Compliance with Laws etc
4.1.1. The Company has conducted its business and affairs in
all material respects in accordance with all
applicable laws and regulations of:
a) the United Kingdom; and
b) any relevant foreign country or authority
and in accordance with its memorandum and articles of
association and all other documents to which it is,
or has been, a party.
39
4.1.2. There is no order, decree or judgment of any court or
tribunal or any governmental or other competent
authority or agency of:
a) the United Kingdom; or
b) any foreign country
outstanding against the Company or any person for
whose acts the Company is vicariously liable which
may have a material adverse effect upon the assets or
business of the Company.
4.1.3. The Company has not been notified that it is the
subject of any investigation, inquiry or enforcement
proceedings or process by any governmental,
administrative or regulatory body nor is the Seller
aware of anything which is likely to give rise to any
such investigation, inquiry, proceedings or process.
5. THE COMPANY'S ACCOUNTS AND RECORDS
5.1. Books and records
All accounts, books, ledgers, financial and other records of
whatever kind ("Records") of the Company:
5.1.1. have been, properly and accurately maintained in all
material respects on a consistent basis and will at
Completion be up to date and are in the possession
and control of the Company and contain true, complete
and accurate records of all matters required by law
to be entered in them;
5.1.2. do not contain or reflect any material inaccuracies
or discrepancies; and
5.1.3. give and reflect a fair view of the financial,
contractual and trading position of the Company and
of its fixed and current assets and liabilities
(actual and contingent) and debtors and creditors (as
appropriate) and all other matters which ought or
would normally be expected to appear in them
and no notice or allegation that any of the Records is
incorrect or should be rectified has been received.
5.2. Audited Accounts
The Audited Accounts:
5.2.1. were prepared in accordance with the requirements of
all relevant statutes and regulations and accounting
practices generally accepted in the United Kingdom at
the time they were audited and commonly adopted by
companies carrying on business similar to that of the
Warthog Group (including, without limitation, the
requirements of the Companies Acts and all relevant
Financial Reporting Standards and Statements of
Standard Accounting Practice and Urgent Issues Task
Force Abstracts issued by the Accounting Standards
Board);
40
5.2.2. show a true and fair view of the assets and
liabilities of the Warthog Group as at, and the
profits of the Warthog Group for the accounting
reference period ended on, the Balance Sheet Date;
5.2.3. are not affected by any unusual or non-recurring
items;
5.2.4. apply bases and policies of accounting which have
been consistently applied in the audited financial
statements of the Warthog Group for the three
accounting reference periods ended on the Balance
Sheet Date.
5.3. Provision for Liabilities
Full provision has been made in the Audited Accounts for all
actual liabilities of the Warthog Group outstanding at the
Balance Sheet Date and proper provision (or note) in
accordance with generally accepted accounting principles in
the United Kingdom at the time they were audited has been made
therein for all other liabilities of the Warthog Group then
outstanding whether contingent, quantified, disputed or not
including (without limitation):
5.3.1. the cost of any work or material for which payment
has been received or credit taken;
5.3.2. any future loss which may arise in connection with
uncompleted contracts; and
5.3.3. any claims against the Warthog Group in respect of
completed contracts.
5.4. Valuation of Stock and Work in Progress
5.4.1. For the purposes of the Audited Accounts:
a) all stock in trade was valued at the lower of cost
and net realisable value; and
b) all work in progress was valued on a basis excluding
profit, including proper provision for losses which
are or could reasonably be anticipated.
5.4.2. None of the stock in trade of the Warthog Group is
obsolete, redundant (being out of fashion or demand),
unsaleable, deteriorated, slow moving or likely to
realise less than its book value.
5.4.3. The respective amounts of raw materials, work in
progress, finished goods, packaging and promotional
material held or on order by the Warthog Group are
appropriate and normal for its present level of
business.
5.5. Management Accounts
5.5.1. The Management Accounts have been carefully prepared:
41
a) on a basis consistent with the management accounts
prepared in the preceding year.
5.5.2. The cumulative profits, assets and liabilities of the
Warthog Group stated in the Management Accounts have
not been materially misstated and are not materially
inaccurate and the Seller does not consider the
Management Accounts to be misleading.
5.6. Returns
5.6.1. The Company has complied with the provisions of the
Companies Acts (or in the case of FPSI and AB, its
equivalent legislation) and all returns, particulars,
resolutions and other documents required under any
legislation to be delivered on behalf of the Company
to the Registrar of Companies (or its equivalent in
the case of FPSI and AB) or to any other authority
whatsoever have been properly made and duly
delivered.
5.6.2. All such documents delivered to the Registrar of
Companies (or its equivalent in the case of FPSI and
AB) or to any other authority whatsoever, whether or
not required by law, were true and accurate when so
delivered and the Company has not received
notification of the levy of any fine or penalty for
non-compliance by the Company or any officer of the
Company.
5.7. Accounting Reference Date
The accounting reference date of the Company for the purposes
of section 224 of the Companies Xxx 0000 (or in the case of AB
and FPSI its equivalent act) is and always has been that
specified in SCHEDULE 2.
5.8. Reports
No financial or management consultants or similar advisers
have, within the past three years, given a report in relation
to the Company.
6. CASH FLOW FORECAST
The Cash Flow Forecasts for the combined Companies as prepared by the
Buyer from information provided by the Seller and annexed to this
Agreement have been honestly and reasonably prepared in accordance with
accepted UK accounting practice, are based on reasonable assumptions
and the Seller does not consider the cash flow forecast to be
misleading.
7. INTELLECTUAL PROPERTY RIGHTS
7.1. The Listed Intellectual Property Rights comprises a complete
list of all Intellectual Property Rights of which the Company
is the registered proprietor or applicant for registration.
Save as may appear from the Listed Intellectual Property
Agreements, all the Intellectual Property Rights used by the
Company which are material to the carrying on of the business
as carried on by the Company immediately prior to Completion
("Business IPR") are legally and beneficially owned solely by
42
the Company or used by the Company under licence from a third
party, and the Company does not use any Intellectual Property
Rights in respect of which any third party has any right,
title or interest.
7.2. So far as the Seller is aware, none of the Listed Intellectual
Property Rights is being claimed, applied for, opposed,
challenged or attacked by any other person.
7.3. All the Intellectual Property Rights owned by the Company are
valid and enforceable, and, so far as the Seller is aware,
nothing has been done, omitted or permitted whereby any of
them has ceased or might cease to be enforceable.
7.4. The Listed Intellectual Property Agreements are all the
Intellectual Property Agreements to which the Company is a
party, or which affect the use by the Company of any Business
IPR or the use by any third party of any Intellectual Property
Rights owned or formerly owned by the Company, and each of
them is valid, subsisting and binding and neither the Company
nor, so far as the Seller is aware, any third party is in
breach of any of the provisions of such agreements.
7.5. So far as the Seller is aware none of the processes, products
or activities of the Company infringes any Intellectual
Property Rights of any other person or involves the
unauthorised use of confidential information disclosed to the
Company by any person in circumstances which might entitle
that person to make a claim against the Company.
7.6. The Seller is not aware of any infringement by any third party
of any Intellectual Property Rights owned by the Company.
7.7. There are no claims outstanding or threatened against the
Company for infringement of any Intellectual Property Rights
and no such claims have been settled by the giving of any
undertakings which remain in force. The Company has not
received any actual or threatened claim that any of the Listed
Intellectual Property Rights is invalid, nor is the Company
aware of any reason why any patents forming part of the Listed
Intellectual Property Rights should be amended.
7.8. All confidential information used by the Company is kept
strictly confidential, and the Company operates and fully
complies with procedures which maintain such confidentiality.
The Seller is not aware of any such confidentiality having
been breached. The Company has not permitted or authorised the
disclosure of (except in the ordinary course of its business
pursuant to legally binding confidentiality agreements) any of
its confidential know-how, trade secrets or lists of customers
to any other person.
7.9. All application and renewal fees, costs, charges, taxes and
other steps required for the maintenance or protection of the
Listed Intellectual Property Rights have been duly paid on
time or taken and so far as the Seller is aware none of those
rights are subject to any existing challenge or attack by a
third party or competent authority.
7.10. All persons retained, engaged or employed by the Company who,
in the course of their work for the Company, will or might
reasonably be expected to bring into existence Business IPR
are, so far as is reasonably practicable, individually bound
by agreements with the Company whereby all Intellectual
Property Rights which such persons may bring into existence
during their work for the Company vest in the Company (so far
as this is permitted by applicable law) and all such
agreements contain terms which, so far as is reasonably
43
practicable, prevent such persons disclosing any confidential
information about the Company and its business.
7.11. Other than in respect of any unregistered design rights which
by operation of law are subject to a licence of rights, none
of the Intellectual Property Rights owned or used by the
Company is subject to compulsory licensing or the granting of
any licences of right.
7.12. No employee or former employee of the Company has made, or
indicated an intention to make, any claim against the Company
for compensation relating to any invention owned or used by
the Company, nor, so far as the Seller is aware, are there
valid grounds for any such claim.
7.13. So far as the Seller is aware all current advertising,
marketing and sales promotions by the Company comply with all
applicable codes of practice and self-regulatory schemes. The
Company has not been disciplined under any scheme or code in
respect of any such advertising, marketing or sales promotion
and no complaint has been made against it in respect thereof
and there are no outstanding complaints or disciplinary
proceedings against the Company in respect thereof.
7.14. The details appearing in the Company's entry on the Data
Protection Register adequately describe all the processing of
personal data undertaken by or on behalf of the Company and
the Company has not received any notice that it is in or has
breached any provision of the Data Protection Xxx 0000.
8. MISCELLANEOUS
8.1. All Material Matters Disclosed
All information contained or referred to in this Agreement
(including the documents in agreed form) and in the Disclosure
Letter or in any annexure thereto on or prior to the date of
this Agreement is true and accurate in all material respects
and the Warrantors are not aware of any other fact or matter
which renders any such information misleading because of any
omission, ambiguity or for any other reason.
9. THE COMPANY'S CONSTITUTION
9.1. Memorandum and Articles
The copy of the memorandum and articles of association of the
Company or (in the case of FPSI or AB) the equivalent
constitutional document annexed to the Disclosure Letter is
accurate and complete and has embodied in or annexed to it a
copy of every resolution or agreement as is required by law to
be embodied in or annexed to it, and sets out completely the
rights and restrictions attaching to each class of authorised
share capital of the Company.
44
9.2. Company Resolutions
Neither the Company nor any class of its members has passed
any resolution (other than resolutions relating to business at
annual general meetings which was not special business).
9.3. Statutory Books
The register of members and other statutory books and
registers of the Company have been properly kept and no notice
or allegation that any of them is incorrect or should be
rectified has been received.
9.4. Power to carry on business
The Company has the power and is duly qualified to carry on
business in all jurisdictions in which it carries on business.
10. THE COMPANY AND THE LAW
10.1. Licences etc.
10.1.1. So far as the Seller is aware all necessary licences,
consents, permits, approvals and authorisations
(public and private):
a) have been obtained by the Company to enable the
Company to own and operate its assets and to carry on
its business effectively in the places and in the
manner in which such business is now carried on; and
b) are in full force and effect and are not limited in
duration or subject to onerous conditions
and copies of all such licences, consents, permits,
approvals and authorisations as are in the possession
of the Seller are annexed to the Disclosure Letter.
10.1.2. All reports, returns and information required by law
or as a condition of any licence, consent, permit,
approval or other authorisation to be made or given
to any person or authority in connection with the
Company's business have been made or given to the
appropriate person or authority.
10.1.3. So far as the Seller is aware the utilisation of any
of the assets of the Company or the carrying on of
any aspect of the Company's business or any business
now being carried on at any of the Properties is not
in breach of any of the terms and conditions of any
of such licences, consents, permits, approvals and
authorisations and so far as the Seller is aware
there is:
a) no circumstance which indicates that any such
licence, consent, permit, approval or authorisation
is likely to be modified, suspended, cancelled or
revoked;
b) no reason why any of them should expire within a
period of one year from the date of this Agreement;
or
45
c) no circumstance that might prejudice the continuation
or renewal of any of them on the same terms as
currently in force.
10.1.4. At and after Completion there will be no restriction
on the right of the Company to carry on its business
which does not now apply to the Company.
10.2. Breach of Legislative Provisions
Neither the Company, nor any of its officers, agents or
employees (during the course of their duties in relation to
the Company) have committed, or omitted to do, any act or
thing the commission or omission of which is, or could be, in
contravention of any statute, order, regulation or the like or
any other law or legal requirement in the United Kingdom or
elsewhere which is punishable by fine or other penalty,
liability or sanction and no notice or communication has been
received with respect to any alleged, actual or potential
violation of or failure to comply with any such statute,
order, regulation or the like or any other law or legal
requirement.
10.3. Litigation
10.3.1. Neither the Company nor any its officers, agents or
employees is engaged in or the subject of any
litigation, arbitration, administrative or criminal
proceedings whether as claimant, defendant or
otherwise, which adversely affects or is likely to
have an adverse effect on the Company's business
and/or the ability of the Company or any buyer to
carry on the Company's business in the same manner
and to the same extent as carried on at the date of
this Agreement.
10.3.2. No litigation or arbitration or administrative or
criminal proceedings are pending or threatened or
expected by or against the Company or any such
officer, agent or employee and so far as the Seller
is aware there are no facts or circumstances likely
to give rise to any such litigation or arbitration or
administrative or criminal proceedings.
10.3.3. Neither the Company nor any member of the Warthog
Group nor any officer, agent or employee thereof has
been a party to any undertaking or assurance given to
any court or governmental agency or the subject of
any injunction which is still in force.
10.4. Fair Trading and Competition Law
10.4.1. No agreement, practice, arrangement or course of
conduct carried on by the Company or to which the
Company is or has in the six years prior to the date
of this Agreement been a party:
a) was or ought to have been registered in accordance
with the provisions of the Restrictive Trade
Practices Acts 1976 and 1977 or was the subject of
any enquiry, complaint, investigation or proceeding
under that Act;
b) is or has been the subject of an enquiry, complaint,
investigation, reference or report under the Fair
Trading Act 1973 or the Competition Xxx 0000;
46
c) infringes any other competition, restrictive trade
practice, anti-trust, fair trading or consumer
protection law or legislation applicable in any
jurisdiction in which the Company has assets or
carries on or intends to carry on business or in
which the activities of the Company may have an
effect; or
d) is void or unenforceable (whether in whole or in
part) or may render the Company liable to proceedings
under any such legislation as is referred to in
paragraphs 10.4.1 (a) to (e) above.
10.4.2. The Company is not nor has it in the six years prior
to the date of this Agreement been, a party to any
agreement or arrangement or been involved in any
practice or course of conduct in respect of which:
a) any request for information, statement of objections
or similar matter has been received from any court,
tribunal, governmental, national or supra-national
authority;
b) an application for negative clearance or exemption
has been made to the Commission of the European
Communities; or
c) an application for early guidance has been made under
the Competition Xxx 0000 to the Office of Fair
Trading.
10.5. Health and Safety
10.5.1. The Company complies with all conditions,
limitations, obligations, prohibitions and
requirements contained in any Health and Safety Law
and there are no facts or circumstances which may
lead to any breach of any Health and Safety Law.
10.5.2. There have been no claims, investigations or
proceedings against or threatened against the Company
or any of its directors, officers or employees in
respect of accidents, injuries, illness, disease or
any other harm to the health and safety of employees,
contractors or any other persons caused by breaches
of Health and Safety Law or otherwise in respect of
the Company and there are no facts or circumstances
which may lead to any such claims, investigations or
proceedings.
10.5.3. The Company has adequate employers liability and
public liability insurance cover having regard to the
activities carried out by the Company. No claims in
respect of health and safety have been made or are
contemplated under such insurance policies.
10.6. Inducements
So far as the Seller is aware no officer, agent or employee of
the Company has paid any bribe (monetary or otherwise) or used
any of the Company's assets unlawfully to obtain an advantage
for any person.
47
11. THE COMPANY'S AND THE SELLER'S SOLVENCY
11.1. Winding Up
No order has been made, petition presented or resolution
passed for the winding up of the Company and no meeting has
been convened for the purpose of winding up the Company.
11.2. Administration and Receivership
No steps have been taken for the appointment of an
administrator or receiver (including an administrative
receiver) in respect of the Company or in respect of all or
any part of the Company's assets or undertaking.
11.3. Compositions
The Company has not made or proposed any arrangement or
composition with its creditors or any class of its creditors.
11.4. Insolvency
The Company is not insolvent, is not unable to pay its debts
within the meaning of section 123 of the Insolvency Act 1986
(the references in that section to proving to the satisfaction
of the court being disregarded) and has not stopped or
suspended payment of its debts as they fall due.
11.5. Unsatisfied Judgments
No distress, execution or other process has been levied
against the Company or any of its assets or action taken to
repossess goods in the Company's possession. No unsatisfied
judgment, order or award is outstanding against the Company.
11.6. Floating Charges
No floating charge created by the Company has crystallised
and, so far as the Seller is aware, there are no circumstances
likely to cause such a floating charge to crystallise.
11.7. Vulnerable Antecedent Transactions
The Company has not been party to any transaction which could
be avoided in a winding up and/or pursuant to or as a result
of which an asset owned, purportedly owned or otherwise held
by the Company is liable to be transferred or re-transferred
to another person or which gives, or so far as the Seller is
aware may give, rise to a right of compensation or payment in
favour of another person.
11.8. Analogous and Potential Events
No event analogous to any of the foregoing has occurred in or
outside England and no circumstance has arisen which may
entitle any person to take any action, appoint any person,
commence proceedings or obtain any order of the type mentioned
in paragraphs 11.1 to 11.7 above.
48
11.9. Events affecting the Seller
No event, matter or thing referred to in paragraphs 11.1 to
11.7 inclusive has occurred in relation to the Seller.
12. THE COMPANY AND ITS INVESTMENTS
12.1. Particulars of the Company
12.1.1. The particulars of the Company set out in SCHEDULE 2
are accurate and complete.
12.2. Investments, Associations and Branches
The Company:
12.2.1. is not the holder or beneficial owner of, and has not
agreed to acquire, any shares or other securities of
whatever nature of any other company or corporation
(whether incorporated in the United Kingdom or
elsewhere);
12.2.2. is not, and has not agreed to become, a member of any
partnership, joint venture, consortium or other
unincorporated association, body or undertaking in
which it is to participate with any other person in
any business or investment; and
12.2.3. has no branch, agency or place of business outside
its place of incorporation.
12.3. City Code
During the ten years prior to the date of this Agreement, the
Company has not:
12.3.1. had at any time any equity share capital listed on
the London Stock Exchange;
12.3.2. had any dealings and/or prices at which persons were
willing to deal in its equity share capital published
in a newspaper, electronic price quotation system or
otherwise on a regular basis for a continuous period
of at least six months;
12.3.3. had at any time any equity share capital subject to a
marketing arrangement as described in section
163(2)(b) of the Companies Xxx 0000; or
12.3.4. filed a prospectus with the Registrar of Companies
for the issue of any equity share capital.
13. THE COMPANY'S BUSINESS AND THE EFFECT OF SALE
13.1. Business Since the Balance Sheet Date
Since the Balance Sheet Date:
13.1.1. the Company has carried on its business in the
ordinary and usual course so as to maintain it as a
going concern and without any interruption or
alteration in the nature, scope or manner of its
business;
49
13.1.2. the Company has not entered into any unusual contract
or commitment or otherwise departed from its ordinary
and usual course of trading;
13.1.3. there has been no deterioration in the financial or
trading position, prospects or turnover of the
Company;
13.1.4. there has been no significant event or occurrence
(including, but not limited to the loss of any
significant customer or supplier) which has had or
may following Completion have a material adverse
affect on the Company's business or its value,
profitability or prospects;
13.1.5. the Company has not borrowed or raised any money or
taken any form of financial facility (whether
pursuant to a factoring arrangement or otherwise);
13.1.6. the Company has paid its creditors in accordance with
their respective credit terms and there are no debts
outstanding by the Company which have been due for
more than four weeks and no claims have been made or
are pending against the Company under the Late
Payment of Commercial Debts (Interest) Act 1998 (or
in the case of AB and FPSI its equivalent act);
13.1.7. the Company has not entered into, or agreed to enter
into, any capital commitments;
13.1.8. no share or loan capital has been issued or agreed to
be issued by the Company; and
13.1.9. no distribution of capital or income has been
declared, made or paid in respect of any share
capital of the Company and (excluding fluctuations in
overdrawn current accounts with bankers) no loan or
share capital of the Company has been repaid in whole
or part or has become liable to be repaid in whole or
part.
13.2. Commission
No one is entitled to receive from the Company any finder's
fee, brokerage, or other commission in connection with this
Agreement or the sale and purchase of shares in the Company.
13.3. Consequence of Share Acquisition by the Buyer
The acquisition of the Sale Shares and the Transferred WGL
Indebtedness by the Buyer or compliance with the terms of this
Agreement will not:
13.3.1. So far as the Seller is aware cause the Company to
lose the benefit of any right or privilege it
presently enjoys or relieve any person of any
obligation to the Company (whether contractual or
otherwise) or enable any person to vary or determine
any such obligation or any contractual right or
benefit enjoyed by the Company or to exercise any
right whether under an agreement with the Company or
otherwise;
50
13.3.2. result in any present or future indebtedness of the
Company becoming due or capable of being declared due
and payable prior to its stated maturity;
13.3.3. result in the creation or imposition of any
Encumbrance on any of the property or assets of the
Company;
13.3.4. give rise to or cause to become exercisable any right
of pre-emption;
13.3.5. result in a breach of, or constitute a default under,
any provision of the memorandum or articles of
association of the Company (or equivalent documents);
13.3.6. result in a breach of, or constitute a default under
any order, judgment or decree of any court or
government agency or any other restriction of any
kind or character by which the Company or the Seller
is bound or subject; or
13.3.7. result in a breach of, or constitute a default under
the terms, conditions or provisions of, any
agreement, understanding, arrangement or instrument
(including, but not limited to, any contract to which
the Company is party);
13.3.8. and, to the best of the knowledge and belief of the
Seller, the Company's relationships with clients,
customers, suppliers and employees will not be
adversely affected thereby and the Seller is not
aware of any circumstances (whether or not connected
with the Buyer and/or the sale of the Sale Shares)
indicating that, nor has it been informed or is it
otherwise aware that, any person who now has business
dealings with the Company would or might cease to do
so or reduce such business dealings for any reason
after Completion.
13.4. Grants etc
Full particulars of all grants, subsidies or other financial
assistance received from any supranational, national or local
authority or government agency (and all applications for any
such grants, subsidies or other financial assistance) are
given in the Disclosure Letter and there are no circumstances
(including the sale of the Sale Shares) which might lead to
the whole or part of any such grants, subsidies or other
financial assistance becoming repayable or forfeited or
withheld.
13.5. Insurances
13.5.1. Details of all the insurance policies (including,
without limitation, the limit and basis of cover
under each policy and the amount of any applicable
excess) in which the Company has an interest (the
"Company's Insurances") are given in the Disclosure
Letter. The Company's Insurances afford the Company
adequate cover against fire and such other risks as
companies carrying on a similar business to the
Company commonly cover by insurance and in particular
(but without limitation):
51
a) the assets and undertaking of the Company are and
have at all material times been insured in their full
replacement or reinstatement value;
b) the Information Systems are insured for all
foreseeable risks to their full replacement value,
together with incidental expenses, including, without
limitation, costs and expenses of data recovery and
reconstruction; and
c) the Company is now, and has at all material times
been, fully covered against accident, damage, injury,
third party loss (including Product Liability), loss
of profits and other risks normally insured against
by companies carrying on a similar business.
13.5.2. All the Company's Insurances are in full force and
effect and will be maintained in full force without
alteration pending Completion. In relation to the
Company's Insurances:
a) So far as the Seller is aware there are no
circumstances which might lead to any liability under
any of the Company's Insurances being avoided by the
insurers or the premiums being increased;
b) there are no special or unusual terms, restrictions
or rates of premium and all premiums have been paid
on time; and
c) So far as the Seller is aware there is no claim
outstanding under any of the Company's Insurances nor
is the Seller aware of any circumstances likely to
give rise to a claim nor (if the Seller was to renew
the Company's Insurances) is the Seller aware of any
reason why the relevant insurers would or might
refuse to renew them.
13.6. Trading Name
The Company does not trade under any name other than its
corporate name.
13.7. Trade Associations
Full particulars of all trade or business associations of
which the Company is a member are set out in the Disclosure
Letter and:
13.7.1. the Company is now and has been at all material times
in compliance with the regulations or guidelines laid
down by any such trade or business association; and
13.7.2. all reports, comments and recommendations made by any
such association during the six years prior to the
date of this Agreement are annexed to the Disclosure
Letter.
13.8. Assets and Charges
13.8.1. Except for current assets disposed of by the Company
in the ordinary and usual course of its business, the
52
Company is the owner legally and beneficially of and
has good marketable title to all assets included in
the Audited Accounts and all assets which have been
acquired by the Company since the Balance Sheet Date
and such assets represent all of the assets used or
useable in connection with the business of the
Company.
13.8.2. No Encumbrance is outstanding nor is there any
agreement or commitment to give or create or allow
any Encumbrance over or in respect of the whole or
any part of the Company's assets, undertaking,
goodwill or uncalled capital and no claim has been
made by any person that he is entitled to any such
Encumbrance.
13.8.3. Since the Balance Sheet Date, save for disposals in
the ordinary and usual course of its business, the
assets of the Company have been in the possession of,
or under the control of, the Company.
13.8.4. No asset is shared by the Company with any other
person and the Company does not depend for the
purposes of its business upon any assets, premises,
facilities or services owned or supplied by the
Seller or any other member of the Seller's Group.
13.8.5. The Company owns, or has a contractual right to use,
all of the assets necessary for the continuation of
its business as carried on at the date of this
Agreement.
13.8.6. The Disclosure Letter contains true and complete
details of all charges in favour of the Company and
no charge in favour of the Company is void or
voidable for want of registration.
13.9. Debts
13.9.1. Save to the extent of any provision or reserve
therefor contained or reflected in the Completion
Accounts, any debts owed to the Company as recorded
in the Company's Records are good and collectable in
the ordinary and usual course of business and will
realise their full face value (plus any accrued
interest) within six months of Completion.
13.9.2. The rights of the Company in respect of such debts
are valid and enforceable and are not subject to any
defence, right of set-off or counterclaim,
withholding or other deduction and no act has been
done or omission permitted whereby any of them has
ceased or might cease to be valid and enforceable in
whole or in part.
13.9.3. No amount included in the Audited Accounts as owing
to the Company at the Balance Sheet Date has been
released for an amount less than the value at which
it was included in the Audited Accounts or is now
regarded by the Seller as irrecoverable in whole or
in part.
13.9.4. The Company has not factored or discounted any of its
debts or other receivables or agreed to do so.
53
13.9.5. There are no debts owing by or to the Company other
than debts which have arisen in the ordinary and
usual course of business, nor has the Company lent
any money which has not been repaid.
13.10. Title Retention
The Company has not acquired or agreed to acquire any asset on
terms that property in that asset does not pass until full
payment is made.
13.11. Information Systems
13.11.1. All of the Information Systems have been maintained
and supported and have the benefit of appropriate
maintenance and support agreements which are not
terminable by the supplier on less than 24 months'
notice.
13.11.2. The Company has the benefit of appropriate licence
agreements for the supply and use of any software and
data used by or on behalf of the Company and which is
not owned by the Company, and none of those licences
is terminable by the supplier.
13.11.3. So far as the Seller is aware the Information Systems
have adequate capability and capacity for the
projected requirements of the Company for the
processing and other functions required to be
performed for the purposes of the business of the
Company.
13.11.4. Disaster recovery plans and business contingency
agreements are in effect and are adequate to ensure
that the Information Systems can be replaced or
substituted without material disruption to the
business of the Company.
13.11.5. Save where that person is the person owning (as
between it and the Company) any of the Intellectual
Property Rights in the Information Systems concerned,
in the event that any person providing maintenance or
support services for any of the Information Systems
ceases or is unable to do so, the Company has all
necessary rights, materials and information to
procure the carrying out of such services by
employees or by a third party without undue expense
or delay.
13.11.6. The Company has for the purposes of the business
carried on by it immediately prior to completion,
sufficient technically competent and trained
employees to handle, operate, monitor and use of the
Information Systems.
13.11.7. The Company has adequate procedures with regard to
internal and external security of the Information
Systems and all information, data, software and files
residing on them, and all back-up copies of the same,
including (without limitation) procedures for
preventing unauthorised access, preventing the
introduction of a virus or other disabling or
corrupting device, taking and storing on-site and
off-site back-up copies of software and data.
54
13.11.8. The Company has the right to obtain from the creator
of the same updated versions of all standard non
bespoke software is used by it in the business
carried on by it immediately prior to completion and
which is material to the carrying on of such
business.
13.11.9. The Company owns, and is in possession and control
of, copies of all manuals, guides, instruction books
and technical documents (including those relating to
any corrections and updates) required to operate
effectively the Information Systems.
13.11.10.The Information Systems have no defects or problems
in operation which detrimentally affect to a material
extent the Company's ability to operate its business.
13.12. Marketing Information
13.12.1. All Marketing Information used by the Company is
owned by or is the subject of a valid grant of rights
to the Company and is not subject to any restriction
which materially and adversely affects the Company's
ability to use it for the purposes of its business.
13.12.2. The Company has not disclosed nor is it obliged to
disclose any Marketing Information of a confidential
nature to any person other than its employees.
13.12.3. The Company is not in breach of any agreement under
which Marketing Information was or is to be made
available to it.
13.13. Properties
13.13.1. Title to Properties
a) The particulars of the Properties shown in SCHEDULE 7
are true and correct. Except as shown in SCHEDULE 7
the Company has no other interest in land and does
not occupy any other property and has not entered
into any agreement to acquire or dispose of any land
or premises or any interest therein which has not
been completed.
b) The owner of each Property shown in SCHEDULE 7 is
solely legally and beneficially entitled to and has
good and marketable title to and exclusive occupation
of such Property.
c) Each Property is held free from any mortgage or
charge (whether legal or equitable, fixed or
floating) or other Encumbrance, or any lease,
sub-lease, tenancy, licence or right of occupation,
rent charge, exception, reservation, easement,
quasi-easement or privilege (or agreement for any of
the same) in favour of a third party.
d) The lease, sub-lease, tenancy or agreement for any of
the same under which any of the Properties are held
is valid and subsisting against all persons,
including any person in whom any superior estate or
interest is vested.
55
e) There are appurtenant to each Property all rights and
easements necessary for its current use and enjoyment
(without restriction as to time or otherwise) and the
access for each of the Properties is over roads
adopted by the local authority and maintained at
public expense.
f) The Company has not entered into any positive
covenants or personal obligations nor does it have
any personal rights under which it has any subsisting
liability (whether actual or contingent).
13.13.2. Matters Affecting Properties
a) No Property or any part thereof is affected by any of
the following matters or so far as the Seller is
aware likely to become so affected:
(i) any outstanding dispute, notice or complaint
or any exception, reservation, right,
covenant, restriction or condition which is
of an unusual nature or which affects or
might in the future affect the use of any of
the Properties for the purpose for which it
is now used (the "current use") or which
affects or might in the future affect the
value of any of the Properties;
(ii) any notice, order, demand, requirement or
proposal of which the owner has notice or of
which the Seller is aware made or issued by
or on behalf of any government or statutory
authority, department or body for
acquisition, clearance, demolition or
closing, the carrying out of any work upon
any building, the modification of any
planning permission, the discontinuance of
any use or the imposition of any building or
improvement line, the alteration of any road
or footpath or which otherwise affects any
of the Properties or their current use or
value;
(iii) any compensation received as a result of any
refusal of any application for planning
consent or the imposition of any
restrictions in relation to any planning
consent;
(iv) any commutation or agreement for the
commutation of rent or payment of rent in
advance of the due dates of payment thereof;
(v) any outstanding claim or liability
(contingent or otherwise) whether under the
Planning Acts (as defined in the Town and
Country Planning Act 1990) or otherwise;
(vi) any outgoings except uniform business rates
and water rates; or
(vii) the requirement of consent from any third
party to the charging of the Properties or
any of them.
56
b) Each of the Properties is in a good state of repair
and condition and fit for the current use and no
deleterious material (including, without limitation,
high alumina cement, woodwool, calcium chloride, sea
dredged aggregates or asbestos material) was used in
the construction, alteration or repair thereof or of
any of them and there are no development works,
redevelopment works or fitting out works outstanding
in respect of any of the Properties.
c) All restrictions, conditions and covenants (including
any imposed by or pursuant to any lease, sub-lease,
tenancy or agreement for any of the same and whether
the Company is the landlord or tenant thereunder and
any arising in relation to any superior title)
affecting any of the Properties have been observed
and performed and no notice of any breach of any of
the same has been received or so far as the Seller is
aware likely to be received.
d) The current use of the Properties and all machinery
and equipment therein and the conduct of any business
therein complies in all respects with all relevant
statutes and regulations including, without prejudice
to the generality of the foregoing, the Xxxxxxxxx Xxx
0000, the Offices Shops and Railway Premises Xxx
0000, the Fire Precautions Xxx 0000, the Health and
Safety at Work etc, Xxx 0000, the Betting, Gaming and
Xxxxxxxxx Xxx 0000 and with all rules, regulations
and delegated legislation thereunder and all
necessary licences and consents required thereunder
have been obtained.
e) There are no restrictive covenants or provisions,
legislation or orders, charges, restrictions,
agreements, conditions or other matters which
preclude or limit the current use of any of the
Properties and the current user is the permitted user
under the provisions of the Planning Acts (including,
without limitation, section 52 of the Town and
Country Xxxxxxxx Xxx 0000; section 106 of the Town
and Country Xxxxxxxx Xxx 0000; or section 278 of the
Highways Act 1980) and regulations made thereunder
and is in accordance with the requirements of the
local authorities and all restrictions, conditions
and covenants imposed by or pursuant to the Planning
Acts have been observed and performed and no
agreements have been entered into with any public
authority or statutory authority in respect of any of
the Properties whether pursuant to the Planning Acts
or otherwise.
f) All necessary planning permissions, listed building
consents, bye-law consents, building regulation
consents and other permissions and approvals (whether
or not required by statute) for the construction,
extension and alteration of the Properties have been
obtained and complied with, and none of those
permissions, consents and approvals has been given on
a temporary or personal basis nor does it require the
removal at any time of the works so authorised.
g) Any necessary or appropriate action to protect the
interests of the Company has been taken under the
Landlord and Xxxxxx Xxx 0000 and in relation to rent
review provisions in relation to any lease,
sub-lease, tenancy or agreement for any of the same
57
and whether the Company is the landlord or the tenant
thereunder and all appropriate time limits have been
complied with and no rent reviews are outstanding at
the date hereof or exercisable prior to Completion.
h) In relation to any lease, sub-lease, tenancy or
agreement for any of the same under which the Company
is the landlord:
the rents collected by the Company have not exceeded
the sums lawfully recoverable;
(i) no forfeiture proceedings have been taken or
are contemplated;
(ii) no notice has been served by the Company
which is still outstanding;
(iii) no works have been carried out which could
give rise to a claim against the Company for
compensation or which would have to be
disregarded on any rent review;
(iv) all consents and conditions contained
therein have been observed and performed to
date; and
(v) brief details of such leases, sub-leases,
tenancies or agreements for any of the same
are set out in SCHEDULE 7 and such details
are true and correct.
i) None of the Properties is used for any purpose other
than the use specified for such Property in SCHEDULE
7.
j) Where the interest of the Company in a Property is
leasehold, there is no right for the landlord to
determine the lease except in the event of
non-payment of rent or other breach of covenant by
the tenant.
k) All replies by or on behalf of the Seller or the
Company to enquiries relating to any of the
Properties made by or on behalf of the Buyer were
when given and are now true and correct.
13.13.3. Outstanding Property Liabilities
Except in relation to the Properties, the Company has
no liabilities (actual or contingent) arising out of
the conveyance, transfer, lease, tenancy, licence,
agreement or other document relating to land or
premises or an interest in land or premises,
including, without limitation, leasehold premises
assigned or otherwise disposed of.
14. THE COMPANY'S CONTRACTS
14.1. No Other Contracts
There are not in force in relation to the Company's business,
assets or undertaking any agreements, undertakings,
understandings, arrangements or other engagements, whether
58
written or oral, to which the Seller is a party or has the
benefit of or is otherwise subject, the benefit of which would
be required to be assigned to or otherwise vested in the
Company to enable the Company to carry on its business and/or
enjoy all the rights and privileges attaching thereto and/or
to any of its assets and undertaking in the same manner and
scope and to the same extent and on the same basis as the
Company has carried on business or enjoyed such rights and
privileges prior to the date of this Agreement.
14.2. The Company's Contracts
Each of the contracts to which the Company is a party are
valid and binding and no notice of termination of any such
contract has been received or served by the Company and the
Seller is not aware of the invalidity of, or of any grounds
for determination, rescission, avoidance or repudiation of any
such contracts.
14.3. Contractual Arrangements
The Company is not a party to or subject to any agreement,
transaction, obligation, commitment, understanding,
arrangement or liability (whether in writing or otherwise)
which:
14.3.1. is:
a) of six months or greater duration;
b) for an indefinite term which is incapable of
termination by the Company in accordance with its
terms on not more than 60 days notice;
c) incapable of complete performance in accordance with
its terms within six months after the date on which
it was entered into or undertaken; or
d) otherwise of a length that is greater than is
customary in businesses of a similar nature to the
business of the Company;
14.3.2. is known or suspected by the Seller or by the Company
to be likely to result in a loss to the Company on
completion of performance;
14.3.3. is of an onerous nature or cannot readily be
fulfilled or performed by the Company on time and
without undue or unusual expenditure of money and
effort;
14.3.4. involves or is likely to involve obligations,
restrictions, expenditure or receipts of an unusual,
onerous or exceptional nature;
14.3.5. is a contract for services (other than a contract for
the supply of utility or other normal office
services);
14.3.6. requires the Company to pay any commission, finder's
fee, royalty or the like;
14.3.7. involves liabilities which may fluctuate in
accordance with an index or rate of currency
exchange;
59
14.3.8. is a contract for the supply of assets to the Company
on hire, lease, hire purchase, conditional sale,
credit or deferred payment terms;
14.3.9. is dependent on the guarantee or covenant of or
security provided by any other person;
14.3.10. is an agency, distributorship, marketing, purchasing,
manufacturing or licensing agreement or arrangement;
14.3.11. in any way restricts the Company's freedom to carry
on the whole or any part of its business in any part
of the world in such manner as it thinks fit;
14.3.12. relates to the acquisition or disposal of any shares,
businesses or assets under which any contingent or
actual liability still remains;
14.3.13. can be terminated as a result of any change in the
underlying ownership or control of the Company, or
would be materially affected by any such change;
14.3.14. confers (or is capable of giving rise to) rights of
enforcement in favour of any person who is not a
party thereto pursuant to the Contracts (Rights of
Third Parties) Xxx 0000; or
14.3.15. is in any way otherwise than in the ordinary and
usual course of the Company's business.
14.4. Substantial or significant contracts
No agreement, transaction, obligation, commitment,
understanding, arrangement or liability (whether in writing or
otherwise) entered into or undertaken by the Company and now
outstanding or unperformed involves any of the following:
14.4.1. obligations on the part of the Company which will
cause or are likely to cause the Company to incur
expenditure or an obligation to pay money in excess
of 20,000 GBP;
14.4.2. obligations on the part of the Company to purchase
any specified minimum quantity or any specified
minimum percentage of its total requirement or other
stock in trade from any one supplier; or
14.4.3. the supply by the Company of its products or services
whether by way of lease or outright sale or otherwise
to any one customer (or person connected with them)
such that the value of such supplies exceeds or is
likely to exceed 5 per cent of the total turnover of
the Company in the financial year ending 31 March
2005 or in any subsequent year.
14.5. Defaults
14.5.1. So far as the Seller is aware neither the Company nor
any other party to any agreement with the Company is
in default thereunder, and the Company is not aware
60
of any invalidity or grounds for termination,
avoidance, rescission or repudiation of any agreement
to which the Company is a party nor (so far as the
Seller is aware) are there any circumstances likely
to give rise to any such event.
14.5.2. Full details of any customers (or any other persons
to whom the Company in the course of business has
supplied services in the twelve months ending on the
date of this Agreement) who have defaulted in the
payment when due of any monies to the Company are
specified in the Disclosure Letter and no other such
customers or persons are believed by the Company to
be likely so to default.
14.6. Sureties etc
14.6.1. The Company is not a party to nor has it given any
guarantee, warranty, indemnity, suretyship, comfort
letter or any other obligation (whatever called) to
pay, provide funds or take action in the event of
default in the payment of any indebtedness of any
other person or in the performance of any obligation
of any other person and there is not now outstanding
in respect of the Company any guarantee, warranty,
agreement for indemnity or for suretyship, comfort
letter or similar obligation given for the
accommodation of the Company or in respect of the
Company's business.
14.6.2. Without prejudice to the generality of Paragraph
14.6.1, neither the Seller nor any person connected
with any of them nor any person connected with it nor
any third party has given any guarantee of or
security for, any overdraft loan, loan facility or
off-balance sheet financing granted to the Company
nor has the Company given any guarantee of or
security for any overdraft loan, loan facility or
off-balance sheet financing granted to the Seller or
any person connected with it or any third party.
14.7. Powers of Attorney
14.7.1. No powers of attorney or other authorities (express
or implied) given by the Company are now in force.
14.7.2. No person, as agent or otherwise, is entitled or
authorised to bind or commit the Company to any
obligation not in the ordinary and usual course of
the Company's business, and the Seller is not aware
of any person purporting to do so.
14.8. Insider Contracts
14.8.1. There is not outstanding, and there has not at any
time during the last six years been outstanding, any
agreement or arrangement to which the Company is a
party and in which
a) the Seller;
b) any person beneficially interested in the Company's
share capital;
61
c) any Director; or
d) any person connected with any of the above
is or has been interested, whether directly or
indirectly.
14.8.2. The Company is not a party to, nor have its profits
or financial position during such period as is
mentioned in Paragraph 14.8.1 been affected by, any
agreement or arrangement which is not entirely of an
arm's length nature.
14.8.3. All costs incurred by the Company have been charged
to the Company.
14.8.4. The Seller nor any person connected with it is a
party to any outstanding agreement or arrangement for
the provision of finance, goods, services or other
facilities to or by the Company or in any way
relating to the Company or its affairs.
14.9. Liabilities
The Company has no outstanding liabilities (including
contingent liabilities) other than the liabilities disclosed
in the Audited Accounts or incurred, in the ordinary and usual
course of business, since the Balance Sheet Date.
14.10. Options and Pre-emption Rights
The Company is not a party to any option or pre-emption right.
14.11. Tenders, etc
No offer, tender, or the like is outstanding which is capable
of being converted into an obligation of the Company by an
acceptance or other act of some other person and the Company
is not in negotiations with, nor has it put proposals forward
or entered into discussions with any customer or supplier for
the renewal of any existing business or acquisition of any new
business.
14.12. Documents
All title deeds and agreements to which the Company is a party
and other documents owned by or which ought to be in the
possession or control of the Company are in the possession or
control of the Company and are properly stamped and are free
from any Encumbrance.
15. THE COMPANY AND ITS FINANCIAL FACILITIES
15.1. Borrowings
15.1.1. The total amount borrowed by the Company from its
bankers does not exceed its facilities.
15.1.2. The total amount borrowed by the Company from
whatsoever source does not exceed any limitation on
borrowing contained in its articles of association or
in any debenture or loan stock deed or other
instrument.
62
15.2. Continuance of Facilities
15.2.1. Full and accurate details of all overdrafts, loans or
other financial facilities of whatever nature and
from whatever source outstanding or available to the
Company ("Facilities") are given in the Disclosure
Letter and true and complete copies of all documents
relating thereto are annexed to the Disclosure
Letter.
15.2.2. There has been no contravention of, or non-compliance
with, the terms of the Facilities and no steps for
the early repayment of sums outstanding under the
Facilities or enforcement of any security taken in
respect of any of the Facilities have been commenced
or threatened and no circumstances have occurred
which give rise to an obligation to make, or would
permit the calling for, any such early repayment or
enforcement of security.
15.2.3. Neither the Seller nor the Company has done or
omitted to do anything whereby the continuance of any
of the Facilities in full force and effect might be
affected or prejudiced.
15.3. Off-Balance Sheet Financing
The Company has not engaged in any borrowing or financing not
required to be reflected in the Audited Accounts.
15.4. Bank Accounts
15.4.1. Full and accurate particulars of all the bank and
deposit accounts of the Company and of the credit or
debit balances on such accounts as at a date (the
"Statement Date") not more than seven days before the
date of this Agreement are given in the Disclosure
Letter and the Company does not have any other bank
or deposit account (whether in credit or overdrawn).
15.4.2. Since the Statement Date:
a) there have been no payments out of any such accounts
except for routine payments in the ordinary and usual
course of the Company's business; and
b) the balances on such accounts are not now
substantially different from the balances shown as at
the Statement Date.
16. THE COMPANY AND ITS EMPLOYEES
16.1. Directors
SCHEDULE 2 shows the full names and offices held by each
person who is a director of the Company and no other person is
a director or shadow director of the Company.
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16.2. Employees
16.2.1. The individuals, details of whom are annexed to the
Disclosure Letter (the "Employees"), are all employed
by the Company at the date of this Agreement.
16.2.2. The particulars set out in the Disclosure Letter show
true and complete details of the dates of birth and
lengths of continuous service of each of the
Employees and, by reference to each of the Employees,
remuneration payable and other benefits provided or
which the Company is bound to provide (whether now or
in the future) to each category of the Employees at
Completion or any person connected with any such
person and (without limiting the generality of the
foregoing) include particulars of all profit sharing,
incentive, bonus, commission arrangements and any
other benefit to which any such category of the
Employees is entitled or which is regularly provided
or made available to them (including details of their
notice period and their entitlement to holiday) in
any case whether legally binding on the Company or
not.
16.2.3. None of the Employees has given notice terminating
his contract of employment.
16.2.4. Other than the Employees, there are no individuals
employed at the date of this Agreement by the
Company.
16.2.5. There are no subsisting contracts for the provision
by any person of any consultancy services to the
Company and no person is engaged as a contractor by
the Company to perform any services for the Company.
16.2.6. There are no persons employed or engaged to work in
the Company through any employment business or
agency.
16.2.7. All contracts of service of any of the Employees (and
of any officer of the Company) are terminable on not
more than three months' notice without compensation
(except for compensation payable in accordance with
employment legislation).
16.2.8. During the period of six months ending on the date of
this Agreement, none of the Employees has been
redeployed or re-engaged by the Company.
16.2.9. During the period of six months ending on the date of
this Agreement, the Company has not terminated the
employment or engagement of any person employed or
engaged by the Company.
16.2.10. During the period of six months ending on the date of
this Agreement, no person employed or engaged by the
Company has terminated his employment or engagement.
16.2.11. There is no plan, scheme, commitment, custom or
practice relating to redundancy affecting any of the
Employees more generous than the statutory redundancy
requirements.
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16.2.12. All plans for the provision of benefits to the
Employees comply in all respects with all relevant
statutes, regulations or other laws and all
governmental filings in relation to such plans have
been made.
16.2.13. There are no loans owed by any of the Employees or
any officer of the Company to the Company.
16.2.14. Since the last review date, no change has been made
or promised in (i) the rate of remuneration, or the
emoluments or pension benefits or other contractual
benefits, of any officer of the Company or any of the
Employees or (ii) the terms of engagement of any such
officer or any of the Employees.
16.2.15. Except for the Pension Scheme (as defined in SCHEDULE
6) the Company is not under any present or future
liability to pay to any of the Employees or to any
other person who has been in any manner connected
with the Company or with any person who has been
employed by the Company any pension, superannuation
allowance, death benefit, retirement gratuity or like
benefit or to contribute to any life assurance
scheme, medical insurance scheme, or permanent health
scheme and the Company has not made any such payments
or contributions on a voluntary basis nor is it
proposing to do so.
16.2.16. The normal retirement age for each of the Employees
is [60] years. None of the Employees has been
retained beyond the normal retirement date and the
Company has not agreed to extend the employment of
any Employee beyond the normal retirement date.
16.2.17. There is no occupational sick pay scheme or
arrangement whether contractual or discretionary in
addition to Statutory Sick Pay.
16.2.18. There are no Employees who have been absent from work
due to illness or injury during the period of twelve
months ending on the date of this Agreement for a
period in excess of ten Business Days.
16.2.19. So far as the Seller is aware, no Employee is a
disabled person as defined in the Disability
Discrimination Xxx 0000.
16.2.20. There are no training schemes, arrangements or
proposals whether past or present in respect of which
a levy may henceforth become payable by the Company
under the Industrial Training Act 1982 (as amended by
the Employment Act 1989).
16.2.21. There is no Employee who is entitled to take time off
work for study and training in accordance with
sections 63A-C of the ERA 1996.
16.2.22. There is no Employee whose employment by the Company
is subject to the Company being obliged to obtain a
work permit.
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16.2.23. There is no Employee whose employment by the Company
is dependent upon the immigration status of any other
person.
16.2.24. All Employees have waived rights under the Working
Time Regulations 1998.
16.2.25. The Company has not become the employer of any of the
Employees on a relevant transfer (as defined in the
Transfer of Undertakings (Protection of Employment)
Regulations 1981).
16.2.26. There is no outstanding undischarged liability of the
Company to pay to any governmental or regulatory
authority in any jurisdiction any contribution,
Taxation or other duty (including interest, penalties
and gross-up) arising in connection with the
employment or engagement of any person.
16.2.27. None of the Employees will become entitled to any
enhancement in or improvement to their remuneration,
benefits or terms and conditions of service only by
reason of completion of the sale and purchase under
or pursuant to this Agreement.
16.2.28. The Company has not in the last twelve months,
entered into any informal or formal agreement to
amend or change the terms and conditions of
employment of any of the Employees (whether such
amendment or change is to take effect before or after
Completion).
16.2.29. The Company has issued its Equal Opportunities Policy
(a copy of which is annexed to the Disclosure Letter)
to each of the Employees.
16.2.30. There are no persons employed by the Company who are
absent from work on maternity leave at the date of
this Agreement and no Employee has given notice to
the Company that she intends to take maternity leave
which will start after the date of this Agreement.
16.2.31. The Company does not operate any maternity leave,
maternity pay or parental leave or paternity pay
scheme more generous than the statutory provisions.
16.2.32. Full details of the entitlement of each Employee to
parental leave (in accordance with the Maternity and
Parental Leave etc Regulations 1999), including any
application to take leave received before the date of
this Agreement, are set out in the Disclosure Letter.
16.3. Disputes with Employees
16.3.1. There is no outstanding or threatened claim by any
person who is now or has been an employee of the
Company or any dispute outstanding with any such
persons or with any trade union or any other body
representing all or any of such persons in relation
to their employment by the Company nor, so far as the
Seller is aware, are there any circumstances likely
to give rise to any such dispute.
66
16.3.2. There is no industrial action involving any Employee,
whether official or unofficial, currently occurring
or threatened.
16.3.3. There is no industrial relations matter affecting the
Company which has been referred to ACAS or any
similar governmental agency in the applicable
jurisdiction for advice, conciliation or arbitration.
16.3.4. None of the Employees is subject to any unexpired
verbal or written warning in relation to his
employment.
16.3.5. There is no liability outstanding to any Employee or
any other person who has been employed or engaged by
the Company except for remuneration or other benefits
accruing due and no such remuneration or other
benefit which has fallen due for payment has not been
paid.
16.4. Industrial Relations
16.4.1. The Company does not recognise an independent trade
union for the purposes of collective bargaining and
none of the Employees belongs or has belonged at any
material time to an independent trade union
recognised by the Company.
16.4.2. The Company has not received a request for
recognition for the purposes of collective bargaining
from any independent trade union under the provisions
of the Trades Union and Labour Relations
(Consolidation) Xxx 0000 or otherwise.
16.4.3. There are no employee representatives representing
all or any of the Employees.
16.4.4. The Company has complied with all of its statutory
obligations to inform and consult appropriate
representatives as required by law.
16.4.5. The Company is not obliged to, and has not,
established a European Works Council.
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SCHEDULE 4
TAXATION WARRANTIES AND REPRESENTATIONS
1. INTERPRETATION
1.1. In this Schedule references to:
1.1.1. income or profits or gains earned, accrued or
received shall include income or profits or gains
treated as earned, accrued or received for the
purposes of any legislation; and
1.1.2. the "Company" includes each of the Companies in
Clause 2, 3.2, 10.2 and 11 below and includes each of
the Companies other than Fever Pitch Studios Inc and
42-Bit-AB in the remaining Clauses of this Schedule.
2. GENERAL TAXATION MATTERS
2.1. Residence
The Company is and always has been resident for Taxation
purposes only in the jurisdiction in which it is incorporated.
2.2. Tax Provisions
Full provision or reserve has been made in the Audited
Accounts for all Taxation liable to be assessed on the Company
or for which it is accountable in respect of income, profits
or gains earned, accrued or received on or before the Balance
Sheet Date or any event on or before the Balance Sheet Date
including distributions made down to such date or provided for
in the Audited Accounts and full provision has been made in
the Audited Accounts for deferred Taxation calculated in
accordance with generally accepted accounting principles.
2.3. Returns
The Company has properly and punctually made all returns and
in all material respects provided all information required for
Taxation purposes and none of such returns is disputed by the
Inland Revenue or any other authority concerned (in the United
Kingdom or elsewhere) and the Seller is not aware that any
dispute is likely, or that any event has occurred which would
or might give rise to a payment under the Tax Deed.
2.4. Payment of Tax
The Company has duly and punctually paid all Taxation which it
has become liable to pay and is under no liability to pay any
penalty or interest in connection with any claim for Taxation.
2.5. Audits
The Company has not in the last three years received any
audit, visit or inspection from any Taxation authority and
neither the Seller nor the Company is aware of any such audit,
visit or inspection planned for the next twelve months.
68
2.6. Special Arrangements and Concessions
2.6.1. Details of any special arrangements and concessions
which relate to or affect the Company and which have
been made with any Tax authority, in either case
within the last three years, are set out in the
Disclosure Letter.
3. DISTRIBUTIONS AND PAYMENTS
3.1. Distributions
3.1.1. In the last six years, no distribution within the
meaning of sections 209 or 210 of the Taxes Act 1988
has been made by the Company except dividends shown
in its audited accounts nor is the Company bound to
make any such distribution.
3.1.2. No securities (within the meaning of section 254(1)
of the Taxes Act 1988) issued by the Company and
remaining in issue at the date hereof were issued in
such circumstances that the interest payable thereon
falls to be treated as a distribution under section
209(2)(d), (da) or (e) of the Taxes Xxx 0000.
3.1.3. The Company has not made or received any distribution
which is an exempt distribution within section 213 of
the Taxes Xxx 0000.
3.1.4. The Company has not received any capital distribution
to which the provisions of section 189 of the TCGA
1992 could apply.
3.1.5. The Company has not issued any share capital, nor
granted options or rights to any person which
entitles that person to require the issue of any
share capital, to which the provisions of section 249
of the Taxes Xxx 0000 could apply.
3.1.6. The Company has not, at any time after 6 April 1965,
repaid or agreed to repay or redeemed or agreed to
redeem or purchased or agreed to purchase or granted
an option under which it may become liable to
purchase any shares of any class of its issued share
capital.
3.1.7. The Company has not, at any time after 6 April 1965,
capitalised or agreed to capitalise in the form of
shares or debentures any profits or reserves of any
class or description or otherwise issued or agreed to
issue any share capital other than for the receipt of
new consideration (within the meaning of Part VI of
the Taxes Act 1988) or passed or agreed to pass any
resolution to do so.
3.2. Payments Under Deduction
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 has (if required by law to do so) provided
certificates of deduction to such person and accounted to the
Inland Revenue for the Tax so deducted.
69
3.3. Payments and Disallowances
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 obligation to pay in the future are wholly or
partially disallowable as deductions or charges in computing
profits for the purposes of corporation tax by reason of the
provisions of sections 74, 125, 338, 577, 577A, 779 to 784,
and 787 of the Taxes Xxx 0000 or otherwise.
4. CAPITAL ALLOWANCES
4.1. Balancing Charges
4.1.1. No balancing charge under the Capital Allowances Act
2001 (or other legislation relating to capital
allowances) would be made on the Company on the
disposal of any pool of assets (that is to say all
those assets expenditure relating to which would be
taken into account in computing whether a balancing
charge would arise on a disposal of any other of
those assets) or of any asset not in such a pool, on
the assumption that the disposals are made for a
consideration equal to the book value shown in or
adopted for the purposes of the Audited Accounts for
the assets in the pool or (as the case may be) for
the asset.
4.1.2. No event has occurred since the Balance Sheet Date
otherwise than in the ordinary course of business by
reason of which any balancing charge may fall to be
made against or any disposal value may fall to be
brought into account by the Company under the Capital
Allowances Act 2001 (or other legislation relating to
capital allowances).
5. CLOSE COMPANIES
5.1. Close Company
5.1.1. The Company is a close company.
5.1.2. No distribution within section 418 of the Taxes Act
1988 has been made by the Company.
5.1.3. The Company does not have and has not in the last
three years had (and will not be deemed to have or
have had in the last three years) outstanding any
loan or advance to a participator or an associate of
a participator so as to become liable to make any
payment under section 419 of the Taxes Xxx 0000.
5.1.4. The Company is not, and has not since 31 March 1989
been, a close investment holding company within the
meaning of section 13A of the Taxes Xxx 0000.
6. ANTI-AVOIDANCE
6.1. Section 765 of the Taxes Act 1988
Within the last six years, the Company has not without the
prior consent of the Treasury been a party to any transaction
for which consent under section 765 of the Taxes Xxx 0000 was
70
required. Where such consent would have been required but for
the provisions of section 765A(1) of the Taxes Xxx 0000, the
Company has complied in full with the requirements of The
Movements of Capital (Required Information) Regulations 1990
and a copy of the notification required pursuant thereto is
annexed to the Disclosure Letter.
6.2. Controlled Foreign Companies
6.2.1. The Disclosure Letter contains full details of any
company, in the share capital of which the Company
has an interest, which is not resident in the United
Kingdom for Taxation purposes (or which is treated
for the purposes of any double taxation convention as
not being so resident) which is controlled by persons
resident in the United Kingdom for Taxation purposes
and in which the Company has 10 per cent or more of
the voting rights (a "controlled foreign company").
6.2.2. No enquiries have been made by the Inland Revenue in
respect of any controlled foreign company.
6.2.3. No direction has been made by the Board of Inland
Revenue under section 747 of the Taxes Xxx 0000 in
respect of any controlled foreign company.
6.2.4. Section 748(1) of the Taxes Act 1988 applies to each
controlled foreign company.
6.3. Tax Avoidance
6.3.1. So far as the Seller is aware, the Company has not
been a party to or otherwise involved in any
transaction to which any of the following provisions
apply:
Section 29 to section 34 of the TCGA 1992;
Section 730, section 739 or section 774 to section
787 in Part XVII of the Taxes Xxx 0000.
6.3.2. So far as the Seller is aware, the Company has not
been a party to any transaction to which any of the
following provisions apply (other than transactions
in respect of which all Inland Revenue clearances
have been obtained after disclosure of all material
facts and are attached to the Disclosure Letter):
Section 139 of the TCGA 1992;
Section 135 or section 136 of the TCGA 1992;
Section 140A or section 140C of the TCGA 1992;
Section 213 to section 218 of the Taxes Xxx 0000 and
section 192 of the TCGA 1992;
Section 219 of the Taxes Xxx 0000;
Section 703 of the Taxes Xxx 0000;
Section 776 of the Taxes Xxx 0000.
6.4. Transactions between Persons under Common Control
No transactions or arrangements involving the Company have
taken place or are in existence which are such that any of the
provisions of section 770 to section 773 of the Taxes Act 1988
have been or could be applied to them.
71
6.5. Pension Scheme Refunds
No payment has been made to the Company to which section 601
of the Taxes Xxx 0000 applies.
7. CAPITAL ASSETS
7.1. Base Values
7.1.1. The Disclosure Letter contains full and accurate
particulars of:
a) the extent to which the book value of an asset or a
particular class of assets as shown in the Audited
Accounts is in excess of the amount falling to be
deducted under section 38 of the TCGA 1992 from the
consideration receivable on a disposal of that asset;
and
b) the extent to which provision for Taxation in respect
of such excess has been made in the Audited Accounts.
7.2. Roll-over and Hold-over Relief
The Disclosure Letter contains, in relation to any asset owned
by the Company on or after the Balance Sheet Date, full and
accurate particulars of all claims made by the Company under
section 23, sections 152 to 158, section 161, section 162,
section 165, sections 242 to 245, section 247 or section 248
of the TCGA 1992 and no such claim or other claim has been
made by any other person (in particular pursuant to section
165 or section 175 of the TCGA 1992) which affects or could
affect the amount or value of the consideration for the
acquisition of any asset by the Company taken into account in
calculating liability to corporation tax on chargeable gains
on a subsequent disposal.
7.3. Pre-entry Losses
The Disclosure Letter contains details of all pre-entry losses
falling within paragraph 1(2)(a) of Schedule 7A to the TCGA
1992 which have, or will have, accrued to the Company prior to
Completion and details of all assets which, if disposed of on
Completion, would give rise to an allowable loss.
7.4. Connected Party and Intra Group Transactions
7.4.1. The Company has not disposed of or acquired any asset
to or from any person connected with it within
section 839 of the Taxes Act 1988 or in circumstances
such that the provisions of section 17 of the TCGA
1992 could apply to such disposal or acquisition.
7.4.2. The Company has not acquired any asset (past or
present) from any other company then belonging to the
same group of companies as the Company within the
meaning of section 170(2) to (14) of the TCGA 1992.
72
7.5. Gains Accruing to Non-resident Companies or Trusts
There has not accrued any gain in respect of which the Company
may be liable to corporation tax on chargeable gains by virtue
of the provisions of section 13 or section 87 of the TCGA
1992.
7.6. Overseas Interests
7.6.1. There are no circumstances pursuant to which the
Company may become liable to Tax pursuant to section
185 (Deemed disposal of assets on company ceasing to
be resident in UK), section 187 (Postponement of
charge on deemed disposal) of the TCGA 1992 or
section 132 (Liability of other persons for unpaid
tax) of the Finance Xxx 0000.
7.6.2. The Company has not made any transfer to which
section 723 of the Taxes Xxx 0000 could apply.
8. CLAIMS, ELECTIONS AND CLEARANCES
8.1. Claims by the Company
The Company has made no claim under any of the following:
8.1.1. section 279 of the TCGA 1992 (assets situated outside
the United Kingdom);
8.1.2. section 280 of the TCGA 1992 (tax on chargeable gains
payable by instalments);
8.1.3. section 584 of the Taxes Xxx 0000 (unremittable
income arising outside the United Kingdom).
8.2. Elections
The Disclosure Letter contains full particulars of all
elections made by the Company under sections 524 and 527 of
the Taxes Act 1988 (lump sum receipts for patents and
copyright).
9. LOAN RELATIONSHIPS
9.1. The Company applies an authorised accruals method of
accounting (as that term is defined in section 85 of the
Finance Act 1996) in respect of all loan relationships (as
that term is defined in section 81 of the Finance Act 1996) to
which it is a party.
9.2. The Disclosure Letter contains full and accurate particulars
of any loan relationship to which the Company is a party,
whether as debtor or creditor, where any other party to that
loan relationship is connected with the Company for the
purposes of Chapter II of Part IV of the Finance Xxx 0000.
9.3. The Disclosure Letter contains particulars of any loan
relationship to which the Company is a party and to which
section 92 or section 93 of the Finance Xxx 0000 applies.
73
9.4. The Disclosure Letter contains particulars of any debtor
relationship (as that term is defined in section 103 of the
Finance Act 1996) of the Company which relates to a relevant
discounted security (as that term is defined in paragraph 3 of
Schedule 13 to the Finance Act 1996) to which paragraph 17 or
paragraph 18 of Schedule 9 to the Finance Xxx 0000 applies.
9.5. The Company has not entered into any transaction to which
paragraph 11(1) of Schedule 9 to the Finance Xxx 0000 applies.
9.6. The Company has not been, and is not entitled to be, released
from any liability which arises under a debtor relationship of
the Company.
10. TAXATION OF EMPLOYEES AND AGENTS
10.1. PAYE
In all material respects, the Company has properly operated
the Pay As You Earn system deducting Tax as required by law
from all payments to or treated as made to employees and
ex-employees of the Company and punctually accounted to the
Inland Revenue for all Tax so deducted and all returns
required pursuant to Part 11 of ITEPA and regulations made
thereunder have been punctually made and are accurate and
complete in all material respects.
10.2. Dispensations and PAYE Audits
The Disclosure Letter contains full details of all
dispensations obtained by the Company and all details of any
visit from the Audit Office of the Inland Revenue within the
last six years including full details of any settlement made
pursuant thereto.
10.3. Benefits for Employees
10.3.1. The Company has not issued any shares in the
circumstances described in Part 7 of ITEPA, and has
made all returns required in that Part.
10.3.2. The Company has not made any payment to which
sections 225 or 226 of ITEPA applies.
10.4. Slave Companies
Any payment made to or for the direct or indirect benefit of
any person who is or might be regarded by any Taxation
authority as an employee of the Company is made to such person
direct and is not made to any company or other entity
associated with that person.
10.5. Sub-Contractors
The Company has properly operated the sub-contractors' scheme
deducting Tax as required by law from all payments made to
sub-contractors of the Company and punctually accounted to the
Inland Revenue for all Tax so deducted.
74
10.6. National Insurance
The Company has paid all national insurance contributions for
which it is liable and has kept proper books and records
relating to the same and has not been a party to any scheme or
arrangement to avoid any liability to account for primary or
secondary national insurance contributions.
11. STAMP DUTIES
11.1. Stamp Duty
The Company has duly paid or has procured to be paid all stamp
duty on documents to which it is a party or in which it is
interested and which are liable to stamp duty.
11.2. Stamp Duty Reserve Tax
The Company has made all returns and paid all stamp duty
reserve tax in respect of any transaction in securities to
which it has been a party or in respect of which it is liable
to account for stamp duty reserve tax.
12. VALUE ADDED TAX
12.1. Registration
The Company is duly registered for the purposes of Value Added
Tax with quarterly prescribed accounting periods.
12.2. VAT Group
The Company is not and has never been treated for Value Added
Tax purposes as a member of any group of companies and there
has been no transfer of business as a going concern in respect
of which the Company could become, or has at any time since
the Balance Sheet Date been, liable under section 44 of the
VATA 1994 or any supply of goods or services by the Company in
respect of which section 43(1) of the VATA 1994 is or has been
disapplied by either sub-sections (1A) or (2A) of that
section. The Company is not of such a description that section
43(1AA) of the VATA 1994 has been, or could be, applied to a
supply to the representative member. No application under
section 43(5) involving the Company has been refused by HM
Customs & Excise under sub-section (5A) for the protection of
the revenue. No direction has been given under paragraph 1 of
Schedule 9A to the VATA 1994 either to the Company or in
circumstances where the Company may be liable for any Value
Added Tax assessed by that direction.
12.3. Secondary Liability
No act or transaction has been effected in consequence of
which the Company is or may be held liable for any Value Added
Tax under section 47, section 48 or section 55 of the VATA
1994 (agents etc., tax representatives and customer
accounting) or section 29 of the VATA 1994 (self-billing) and
no direction affecting the Company has been given under
paragraph 2 of Schedule 6 to the VATA 1994.
75
12.4. Compliance
The Company has in the last three years and in all material
respects complied with all statutory provisions, rules,
regulations, orders and directions concerning Value Added Tax
including the making on time of accurate returns and payments
and the proper maintenance and preservation of records and the
Company has not been given any penalty liability notice within
section 64 of the VATA 1994, any surcharge liability notice
within section 59 of that Act, or any written warning within
section 76(2) of that Act.
12.5. Exemption
The Company is not and has not been partially exempt in its
current or preceding Value Added Tax year and, so far as the
Seller is aware, there are no circumstances by reason of which
the Company might not be entitled to credit for all Value
Added Tax chargeable on supplies received and imports and
acquisitions made (or agreed or deemed to be received or made)
by it since the beginning of its earliest Value Added Tax year
to include a period since the Balance Sheet Date and there are
no circumstances by reason of which Regulation 107 of the
Value Added Tax Regulations 1995 might apply (or has since the
Balance Sheet Date applied) to the Company.
12.6. Valuation
No direction has been or could have been made to the Company
under paragraph 1 of Schedule 6 or paragraph 1 of Schedule 7
to the VATA 1994.
12.7. Security
The Company has not at any time been required to give security
under paragraph 4 of Schedule 11 to the VATA 1994.
12.8. Option to Charge VAT on Supplies by the Company
The Disclosure Letter contains full particulars of all
elections to waive exemption made or agreed to be made under
Schedule 10 to the VATA 1994 by (i) the Company or (ii) any
person in relation to which the Company is a relevant
associate as defined in paragraph 3(7) of that Schedule.
12.9. Capital Goods Scheme
In the case of each capital item (if any) within the meaning
of Part XV of the Value Added Tax Regulations 1995 ("Part XV")
in relation to which a liability under Part XV has arisen or
could in the future arise on the Company, the Disclosure
Letter sets out:
12.9.1. particulars of past adjustments under Part XV; and
12.9.2. particulars of all matters to date which could be
relevant in determining the future adjustments under
Part XV.
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12.10. Ability to Opt to Tax
There is no land or building in which the Company has an
interest and in relation to which any exempt supply has been
made or agreed to be made by it such that paragraph 3(9) of
Schedule 10 to the VATA 1994 could require it to obtain
permission before making an election to waive exemption and
there is no land or building in which the Company has an
interest where any election to waive exemption is ineffective
by virtue of paragraph 2(3A) of that Schedule or is or may
become ineffective by virtue of paragraph 2(3AA) of that
Schedule.
12.11. Interest and Repayment Supplement
The Disclosure Letter contains full particulars of all claims
which have been made by the Company under section 78 or
section 79 of the VATA 1994. There are no circumstances by
virtue of which an assessment under section 78A of the VATA
1994 has been or could be made on the Company.
12.12. Bad Debt Relief
The Disclosure Letter contains full particulars of all claims
which have been made under section 36 of the VATA 1994 and
there are no existing circumstances by virtue of which any
refund of Tax obtained or claimed may be required to be
repaid. There are no circumstances by virtue of which there
could be a clawback of input tax from the Company under
section 36(4A) of the VATA 1994.
13. INHERITANCE TAX AND GIFTS
13.1. Powers of Sale for Inheritance Tax Purposes
There are not in existence any circumstances whereby any such
power as is mentioned in section 212 of the Inheritance Tax
Act 1984 could be exercised in relation to any shares in,
securities of, or assets of, the Company.
13.2. Gifts
13.2.1. The Company is not liable to be assessed to
corporation tax on chargeable gains or to inheritance
tax as donor or donee of any gift or transferor or
transferee of value.
13.2.2. The Company has not been a party to associated
operations in relation to a transfer of value within
the meaning of section 268 of the Inheritance Tax Xxx
0000.
13.2.3. No Inland Revenue charge (as defined in section 237
of the Inheritance Tax Act 1984) is outstanding over
any asset of the Company or in relation to any shares
in the capital of the Company.
13.3. Recovery of Tax
13.3.1. The Company has not received any asset as mentioned
in section 282 of the TCGA 1992.
77
SCHEDULE 5
ADJUSTMENT OF CONSIDERATION
1. INTERPRETATION
In this Schedule, unless the context otherwise requires, the following
words and expressions shall have the meanings set opposite them:
"Actual Net Asset Value" means the Net Asset Value of the
Companies at 31st October 2004
calculated in accordance with the
Completion Accounts;
"Actual Net Indebtedness" means the Net Indebtedness calculated
in accordance with the Completion
Accounts;
"AROC" means the amounts recoverable on
contracts;
"Completion Accounts" means the consolidated accounts for
the Companies prepared and agreed (or,
as the case may be, determined) in
accordance with the provisions of this
Schedule;
"Estimated Net Asset Value" means the sum of 882,000 GBP being the
estimated Net Asset Value of the
Companies at 31st October 2004;
"Estimated Net Indebtedness" means the sum of 202,000 GBP being the
estimated net indebtedness of the
Seller at 31st October 2004;
"Net Asset Value" means the aggregate value of all fixed
and current assets of the Companies at
31st October 2004 (excluding goodwill,
patents, trade marks and other
intangible assets) minus the aggregate
value of all liabilities and
provisions (in accordance with
paragraph 89 of Schedule 4 to the
Companies Xxx 0000 and SSAP 18 in
respect of contingent liabilities) and
excluding any reserves or capital
created by the upward revaluation of
assets subsequent to the Balance Sheet
Date;
"Net Indebtedness" means the net indebtedness of the
Seller at 31st October 2004 including
creditors and accruals;
"Provisional Consideration" means the consideration for the Sale
Shares and the Transferred WGL
Indebtedness of $7,750,000 stated in
clause 3.1; and
78
"SSAP" means Statement of Standard Accounting
Practice in force at the date of this
Agreement.
2. COMPLETION ACCOUNTS
2.1. Preparation
The Buyer shall use its reasonable endeavours to procure as
soon as practicable, and in any event not later than 60
Business Days after the Completion Date, that Completion
Accounts of the Companies be prepared in accordance with this
Schedule and the parties shall use their best endeavours to
secure compliance with this Schedule by their respective
accountants. The Seller shall promptly supply all such
information and provide access to all such records and
personnel as the Buyer shall reasonably require for such
purpose.
2.2. Description
The Completion Accounts shall consist of a consolidated
balance sheet of the Companies as at the close of business on
31st October 2004 and a consolidated profit and loss account
of the Companies in respect of the period from the day
following the Balance Sheet Date to 31st October 2004 (both
dates inclusive) and which shall be substantially in the form
of the pro forma accounts in agreed form.
2.3. General Requirements
Subject to the specific requirements of paragraph 2.4 which
shall take priority over the general requirements set out
below, the Completion Accounts shall:
2.3.1. make full provision for all actual, future and
contingent liabilities of the Companies as at 31st
October 2004;
2.3.2. be prepared under the historic cost convention and in
accordance with the requirements of all relevant
statutes and generally accepted accounting practices
and principles, SSAPs and Financial Reporting
Standards;
2.3.3. show a true and fair view of the state of affairs of
the Companies at 31st October 2004 and the profits
(or loss) of the Companies for the period from the
Balance Sheet Date to 31st October 2004;
2.3.4. apply and adopt the same bases and policies of
accounting as applied or adopted for the purposes of
the Audited Accounts.
2.4. Specific Requirements
In preparing the Completion Accounts:
2.4.1. no value shall be attributed to goodwill or any other
intangible asset;
79
2.4.2. other fixed assets shall be included at the value at
which they were included in the Audited Accounts,
(or, if acquired after the Balance Sheet Date, their
cost) on a pro rata basis at the rates used in the
Audited Accounts and, in each case, less provisions
for damage or impairment on the same basis used in
preparing the Audited Accounts;
2.4.3. AROC shall be valued on the same basis as used in the
Audited Accounts (details of which are described in
the Disclosure Letter) and full provision will be
made where any part of the AROC balance is considered
to be irrecoverable except that in the case of the
Animaniacs development contract no provision will be
made where any part of the AROC balance attributable
to that contract is considered to be irrecoverable
except to the extent that such provision would exceed
170,000 GBP;
2.4.4. no value shall be attributed to any assets (including
in particular any prepayment or debt) except to the
extent that (following Completion) the Buyer will
have the benefit of the same;
2.4.5. full provision shall be made for rebates or discounts
that will fall due and fees and commissions that will
become payable after Completion in either case in
respect of sales or other transactions that took
place before Completion;
2.4.6. no provision shall be made in respect of the proposed
claim for a research and development tax credit not
exceeding 200,000 GBP;
2.4.7. full provision shall be made in respect of the cost
of making good dilapidations and/or wants of repair
on or to the Properties;
2.4.8. full provision shall be made for any debts due in the
ordinary course of trading outstanding and
uncollected at Completion for a period of more than
60 days past the due date and proper provision or
reserve shall be made for all other bad or doubtful
debts included in the Completion Accounts;
2.4.9. save where applicable under general accounting
principles full provision shall be made for
liabilities disclosed in the Disclosure Letter; and
2.4.10. provision shall be made for deferred Tax in
accordance with normal accounting principles.
3. PROCEDURE
3.1. Submission of Completion Accounts
3.1.1. As soon as the Completion Accounts shall have been
prepared (and, in any event, within the period
specified in paragraph 2.1), the Buyer shall send a
copy to the Seller together with such working papers
used in connection with the preparation of the same
as it considers necessary or appropriate to
understand the Completion Accounts and shall in
addition, at the same time, send to the Seller its
calculation of the Actual Net Asset Value and the
Actual Net Indebtedness.
80
3.2. Information and Explanations
The Buyer and the Buyer's Accountants shall provide such
information and explanations relating to the Completion
Accounts and their preparation as the Seller shall reasonably
require.
4. ADJUSTMENT OF PROVISIONAL CONSIDERATION
4.1. The Completion Accounts shall become final and binding on the
parties upon receipt of the Completion Accounts by the Seller
and adjustments in the Provisional Consideration shall occur
in the following circumstances:
4.1.1. if the Estimated Net Asset Value is greater than the
Actual Net Asset Value the Consideration Stock held
in the Stock Escrow shall be reduced by 1 GBP for
every 1 GBP by which the Actual Net Asset Value is
less than the Estimated Net Asset Value; and
4.1.2. if the Estimated Net Indebtedness is greater than the
Actual Net Indebtedness:
a) the Seller will repay to the Buyer the difference in
cash; and
b) the Consideration Stock held in the Stock Escrow
shall be increased by $2.5 for every 1 GBP by which
the Estimated Net Indebtedness is greater than the
Actual Net Indebtedness (subject to a maximum
increase of Consideration Stock of $500,000). For
these purposes the number of Consideration Stock to
be issued shall be calculated by reference to the
Issue Price.
81
SCHEDULE 6
PENSIONS
1. INTERPRETATION
1.1. Definitions
In this Schedule, where the context admits:
"Companies" means the Companies or such one or more
of them as the context requires;
"Pension Scheme" means Scheme A and Scheme B (or such one
or other of them as the context
requires);
"Relevant Employee" means any past or present employee of
the Companies or of any predecessor to
all or part of its business;
"Scheme A" means the retirement benefits scheme
known as the Group Personal Pension Plan
(Version 8 Shape 4 scheme) provided by
Scottish Equitable for the English
Companies; and
"Scheme B" means the retirement benefits scheme
provided by 42 Bit AB .
1.2. Employees
References in this Schedule to employees includes directors.
2. WARRANTIES AND REPRESENTATIONS
The Seller hereby warrants and represents to and for the benefit of the
Buyer in the following terms:
2.1. No Other Arrangements
Save for the Pension Scheme and provision of permanent health
insurance, death in service and health assurance as provided
in the employment arrangements for the Employees details of
which are contained in the Disclosure Letter, the Company is
not a party to nor participates in nor contributes to any
scheme, agreement or arrangement (whether legally enforceable
or not) for the provision of any pension, retirement, death,
incapacity, sickness, disability, accident or other like
benefits (including the payment after cessation of employment
with the Company of medical expenses) for any Relevant
Employee or for the widow, widower, child or dependant of any
Relevant Employee.
82
2.2. Details Disclosed
The details relating to the Pension Scheme contained in or
annexed to the Disclosure Letter are true, accurate and not
misleading.
2.3. Membership
Every person who has at any time had the right to join, or
apply to join, the Pension Scheme has been properly advised of
that right. No Relevant Employee has been excluded from
membership of the Pension Scheme or from any of the benefits
thereunder in contravention of Art 119 of the Treaty of Rome,
the Xxxxxxxx Xxx 0000 or other applicable laws or requirements
or the provisions of the Pension Scheme or otherwise.
2.4. Contributions and Expenses
Contributions to the Pension Scheme are not paid in arrear and
all contributions and other amounts which have fallen due for
payment other than that payment due on 19 October 2004 which
was collected from salaries paid in September 2004 have been
paid punctually. No fee, charge or expense relating to or in
connection with the Pension Scheme has been incurred but not
paid. If any such fee, charge or expense has been paid by any
person other than the Pension Scheme the Pension Scheme has
reimbursed that person if and to the extent that The Pension
Scheme is or may become liable so to do.
2.5. Companies' Obligations
The Companies:
2.5.1. have observed and performed those provisions of the
Pension Scheme which apply to it;
2.5.2. may (without the consent of any person or further
payment) terminate its liability to contribute to the
Pension Scheme at any time subject only to giving
such notice (if any) as is expressly provided for in
the documentation containing the current provisions
governing the Pension Scheme.
2.6. No Other Employer
The Companies (and in relation to the Directors only, the
Seller) are the only employer for the time being participating
in the Pension Scheme. No employer which has previously
participated in the Pension Scheme has any claim under the
Pension Scheme and in respect of any such employer the period
of participation has been terminated and benefits have been
provided in accordance with the provisions of the Pension
Scheme.
2.7. Administration
All documentation and records in respect of the Pension Scheme
are up to date and so far as the Seller is aware complete and
accurate in all material respects.
83
SCHEDULE 7
PARTICULARS OF PROPERTIES
1. Leasehold Properties
--------------- ------------ -------------------- ------------- ------------- -------------------------------------- ---------------
Authorised
Address Date Parties Term User Current Rental Rent Reviews
--------------- ------------ -------------------- ------------- ------------- -------------------------------------- ---------------
00 Xxxx Xxxxx, 06/09/04 (1) Xxxxxx Xxxxxx, Six months Offices The premium paid by the Lessor for Not Applicable
Cheadle, Xxxxx Xxxxxx, from and the purpose of insuring the Demised
Xxxxxxxxx, XX0 Xxxxxx Xxxx and including Premises (as defined in the Lease)
1AT Xxxx Xxxxxxx (the 03/09/04
"Lessor"); and
(2) Warthog Plc
(the "Lessee")
--------------- ------------ -------------------- ------------- ------------- -------------------------------------- ---------------
2130 South Lease date (1) 2130 S. 64 months General $10,875.000 per month subject to the See Previous
Congress 19/12/03 Congress Holdings from the Office increases as follows: Column
Avenue, Austin, Ltd. (the Commencement Xxxxxxxx,
Xxxxx, 00000 Start date "Landlord"); and Date (i.e. Software (1) 01/01/04 to 31/01/04 $0;
01/01/04 01/01/04) Development (2) 01/02/04 to 31/01/05 $10,875.00;
(2) Fever Pitch Services (3) 01/02/05 to 31/01/06 $11,250.00;
Studios Inc (dba and (4) 01/02/06 to 31/01/07 $11,625.00;
Warthog Texas) Activities (5) 01/02/07 to 30/04/07 $0.00;
(the "Tenant") Related (6) 01/05/07 to 30/04/08 $12,000.00;
thereto (7) 01/05/08 to 30/04/09 $12,375.00
--------------- ------------ -------------------- ------------- ------------- -------------------------------------- ---------------
Gasverksgatan 9, 31/12/04 (1) Nordvastra 3 Years
252 00 Xxxxxx (xxxx
Xxxxxxxxxxx, Xxxxxxxxxxxx (xxx) 30/12/07)
Sweden Service Ab; and
(2) 42 - Bit -AB
--------------- ------------ -------------------- ------------- ------------- -------------------------------------- ---------------
84
SCHEDULE 8
SELLER`S PROTECTION
1. GUARANTEES
The Buyer shall use its reasonable endeavours to secure the release of
the Seller from the guarantees and other contingent liabilities listed
in the Disclosure Letter for the purpose of this Paragraph (offering
its own covenant in substitution if requested by the Seller) and shall
in the meantime indemnify the Seller and keep the Seller indemnified
against any liability thereunder or which may be incurred in relation
thereto.
2. LOAN ACCOUNTS
At Completion the Buyer shall procure that the Company shall repay to
the Seller the amounts owing to them as specified in the Disclosure
Letter.
3. LIMITATION OF LIABILITY
3.1.1. The following Paragraphs of this Schedule shall
operate to limit the liability of the Warrantor under
or in connection with the Tax Deed, the Warranties
and the Disclosure Letter and accordingly, in this
Schedule, "Relevant Claim" means any claim under or
in connection with the Warranties, the Tax Deed or
the Disclosure Letter.
3.1.2. No Relevant Claim shall be brought by the Buyer
against the Seller other than by exercise of set off
against:
a) the balance standing to the credit of the Escrow
Account;
b) the Consideration Stock held in the Stock Escrow; and
c) in the case of a Relevant Claim under the tax
Warranties or under the Tax Deed, against any
additional consideration payable under Clause 3.1.3.
4. FINANCIAL LIMITS
4.1. Aggregate limit
The aggregate liability of the Seller in respect of Relevant
Claims shall be limited to the aggregate of the balance
standing to the credit of the Escrow Account and from the
Consideration Stock held in the Escrow Account and (in the
case of any Relevant Claim under the tax Warranties or the Tax
Deed) any additional consideration payable in accordance with
Clause 3.1.3.
4.2. Thresholds
The Warrantors shall not be liable in respect of a Relevant
Claim unless:
4.2.1. the liability of the Warrantors in respect of that
Relevant Claim (and all other Relevant Claims arising
out of or related to the same or similar subject
matter) exceeds 7,500 GBP; and
85
4.2.2. the aggregate liability of the Warrantors in respect
of all Relevant Claims (excluding any for which
liability is excluded by Paragraph 4.2.1) exceeds
20,000 GBP in which case the Warrantors shall be
liable for the whole amount and not merely the excess
over 20,000 GBP.
5. TIME LIMITS
5.1. Notice to the Warrantor
A Warrantor shall have no liability in respect of any Relevant
Claim unless the Buyer shall have given notice in writing to
him of such claim specifying (in reasonable detail) the matter
which gives rise to the claim, the nature of the claim and the
amount claimed in respect thereof not later than:
5.1.1. in the case of a Relevant Claim under or in
connection with or any of the Warranties contained in
SCHEDULE 4 or under or in connection with any of the
covenants contained in the Tax Deed the expiry of the
period of six (6) months following the end of the
accounting reference period of the Company in which
the sixth anniversary of Completion falls; or
5.1.2. in any other case, 30 June 2006.
6. RECOVERY FROM THIRD PARTIES
6.1. Accounting to the Warrantor
If Warrantors pay to or for the benefit of the Buyer an amount
in respect of any Relevant Claim and any of the Buyer or any
of the Companies subsequently receives from any other person
any payment in respect of the matter giving rise to the
Relevant Claim, the Buyer shall thereupon pay to the
Warrantors an amount equal to the payment received (or, to the
extent that this exceeds the payment made by the Warrantors,
an amount equal to that payment), after having taken into
account any cost, liability (including tax liability) or
expense in respect thereof and except to any extent that the
liability of the Warrantors in respect of the Relevant Claim
was reduced to take account of such payment.
7. NO DUPLICATION OF RECOVERY
7.1. No Double Recovery
The Buyer shall not be entitled to recover damages or
otherwise obtain reimbursement or restitution more than once
in respect of the same loss.
7.2. Claims under Warranties or Tax Deed
In the event that the Buyer is entitled to claim under the Tax
Deed or under the Warranties contained in SCHEDULE 4 in
respect of the same subject matter, the Buyer may claim under
either or both but payments under the Tax Deed shall pro tanto
satisfy and discharge any claim which is capable of being
brought under the Warranties contained in SCHEDULE 4 in
respect of the same subject matter and vice versa.
86
8. RELEVANCE OF LIMITATIONS IN CIRCUMSTANCES OF FRAUD ETC
The provisions of Paragraph 4 and Paragraph 5 shall not apply in
respect of any Relevant Claim or any claim under the Tax Deed if it is
(or the delay in the discovery of which is) the consequence of fraud,
wilful misconduct or wilful concealment by any of the Warrantors.
87
SIGNED by )
duly authorised for and on )
behalf of WARTHOG PLC )
SIGNED by )
duly authorised for and on )
behalf of TIGER TELEMATICS INC )
SIGNED by Xxxxxx Xxx )
SIGNED by Xxxxx Xxxx )
SIGNED by Xxxxxx Xxxx )
SIGNED by )
Xxxxxx Xxx Xxxxxxxxx )
SIGNED by Xxxxx Xxxxxxxx )
88
DATED 2004
-----------------------------
(1) WARTHOG PLC
(2) TIGER TELEMATICS INC
(3) THE PERSONS NAMED IN PART II OF SCHEDULE 1
--------------------------------------------------
A G R E E M E N T
for the Sale and Purchase of
the entire issued share capital of
the Companies and the Transferred WGL Indebtedness
--------------------------------------------------
[MANCHES LOGO OMITTED]
Xxxxxxx XXX
Xxxxxxx Xxxxx
00 Xxxxxxx
Xxxxxx XX0X 0XX
Tel x00 (0)00 0000 0000
Fax x00 (0)00 0000 0000
DX 00 Xxxxxxxx Xxxx
xxx.xxxxxxx.xxx
Ref: CMO/226763
89
CONTENTS
--------
1. DEFINITIONS AND INTERPRETATION........................................1
2. SALE OF THE SALE SHARES AND THE TRANSFERRED WGL INDEBTEDNESS.........10
3. CONSIDERATION........................................................11
4. COMPLETION...........................................................12
5. POST COMPLETION OBLIGATIONS..........................................14
6. STOCK ESCROW.........................................................16
7. CASH DEPOSIT.........................................................17
8. RESTRICTION OF SELLER................................................17
9. WARRANTIES...........................................................19
10. CONFIDENTIALITY......................................................20
11. ANNOUNCEMENTS........................................................21
12. PROVISIONS RELATING TO THIS AGREEMENT................................22
13. LAW AND JURISDICTION.................................................24
SCHEDULE 1....................................................................26
PART I 26
THE SELLER....................................................................26
SCHEDULE 2....................................................................28
SCHEDULE 3....................................................................37
WARRANTIES AND REPRESENTATIONS................................................37
1. INVESTMENT WARRANTIES................................................37
2. THE COMPANY AND THE SELLER...........................................38
3. THE DORMANT COMPANIES................................................39
4. THE COMPANY AND THE LAW..............................................39
5. THE COMPANY'S ACCOUNTS AND RECORDS...................................40
6. CASH FLOW FORECAST...................................................42
7. INTELLECTUAL PROPERTY RIGHTS.........................................42
8. MISCELLANEOUS........................................................44
9. THE COMPANY'S CONSTITUTION...........................................44
10. THE COMPANY AND THE LAW..............................................45
11. THE COMPANY'S AND THE SELLER'S SOLVENCY..............................48
12. THE COMPANY AND ITS INVESTMENTS......................................49
13. THE COMPANY'S BUSINESS AND THE EFFECT OF SALE........................49
14. THE COMPANY'S CONTRACTS..............................................58
15. THE COMPANY AND ITS FINANCIAL FACILITIES.............................62
16. THE COMPANY AND ITS EMPLOYEES........................................63
SCHEDULE 4....................................................................68
TAXATION WARRANTIES AND REPRESENTATIONS.......................................68
1. INTERPRETATION.......................................................68
2. GENERAL TAXATION MATTERS.............................................68
3. DISTRIBUTIONS AND PAYMENTS...........................................69
4. CAPITAL ALLOWANCES...................................................70
5. CLOSE COMPANIES......................................................70
6. ANTI-AVOIDANCE.......................................................70
7. CAPITAL ASSETS.......................................................72
8. CLAIMS, ELECTIONS AND CLEARANCES.....................................73
9. LOAN RELATIONSHIPS...................................................73
10. TAXATION OF EMPLOYEES AND AGENTS.....................................74
11. STAMP DUTIES.........................................................75
12. VALUE ADDED TAX......................................................75
13. INHERITANCE TAX AND GIFTS............................................77
SCHEDULE 5....................................................................78
ADJUSTMENT OF CONSIDERATION...................................................78
1. INTERPRETATION.......................................................78
2. COMPLETION ACCOUNTS..................................................79
3. PROCEDURE............................................................80
4. ADJUSTMENT OF PROVISIONAL CONSIDERATION..............................81
SCHEDULE 6....................................................................82
PENSIONS 82
1. INTERPRETATION.......................................................82
2. WARRANTIES AND REPRESENTATIONS.......................................82
SCHEDULE 7....................................................................84
PARTICULARS OF PROPERTIES.....................................................84
1. Leasehold Properties.................................................84
SCHEDULE 8....................................................................85
SELLER`S PROTECTION...........................................................85
1. GUARANTEES...........................................................85
2. LOAN ACCOUNTS........................................................85
3. LIMITATION OF LIABILITY..............................................85
4. FINANCIAL LIMITS.....................................................85
5. TIME LIMITS..........................................................86
6. RECOVERY FROM THIRD PARTIES..........................................86
7. NO DUPLICATION OF RECOVERY...........................................86
8. RELEVANCE OF LIMITATIONS IN CIRCUMSTANCES OF FRAUD ETC...............87
