Exhibit 10.1
CONFORMED COPY
DATED 22ND July 1999
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SHARE SALE AGREEMENT
re ITIS Technologies Limited
(1) X X XXXXXXX ESQ AND OTHERS
(2) TOUCAN GOLD CORPORATION INC
Kingsley Napley
Knights Quarter
00 Xx Xxxx'x Xxxx
Xxxxxx XX0X 0XX
Tel: 0000 000 0000
Ref: 0046CLN.DPM
INDEX
INDEX TO CLAUSES
----------------
1 Definitions and Interpretation .................................................. 2
2 Agreement for sale .............................................................. 5
3 Purchase consideration........................................................... 5
4 Completion ................................................................. 7
5 Warranties by the Warrantors..................................................... 9
6 Restrictive agreement............................................................ 9
7 General ................................................................. 10
Schedules
1 Vendors' holdings................................................................ 11
2 The Company ................................................................. 12
3 Warranties ................................................................. 13
4 The Software and the Trade Marks ................................................ 18
5 Deed of Indemnity................................................................ 19
6 Limitations ................................................................. 22
7 Disclosure Schedule.............................................................. 23
THIS AGREEMENT is made the 22nd day of July 1999
BETWEEN:-
(1) The Persons whose names and addresses are set out in column 1 of
Schedule 1 ("the Vendors"); and
(2) TOUCAN GOLD CORPORATION INC a public limited company incorporated under
the laws of the State of Delaware and whose Principal Executive offices
are situate at 0000 Xxxxxxx Xxxx Xxxxx 0000 Xxxxxx Xxxxx 00000 XXX
("the Purchaser")
NOW IT IS HEREBY AGREED as follows:-
1 DEFINITIONS AND INTERPRETATION
1.1 In this Agreement, including the Schedules the following words and
expressions shall have the meanings ascribed hereto
"agreed form" the form agreed between the parties on or prior to
the date of this agreement and initialled for the
purpose of identification only by their respective
solicitors
"the Assignment" means the Deed of Assignment of even date made
between X X Xxxxxxx & Others (1) the trustees (2)
Synergetics GB Limited (3) and the Company (4)
attached hereto marked 'A' pursuant to which all
the Intellectual Property Rights in the Software
have been assigned to the Company
"CA" Companies Xxx 0000
"Companies Acts" CA, the former Companies Acts (within the meaning
of CA s 735(1)) and the Companies Xxx 0000
"Company" ITIS Technologies Limited (Company Number 3302620)
"Completion" completion of the purchase of the Shares in
accordance with clause 4
"Consideration
Shares" the 4,680,375 shares of US$.01 each, credited as
fully paid, of the Purchaser to be allotted to the
Vendors pursuant to clause 4.9
"Deed of Indemnity" a deed in the form set out in Schedule 5
"Disclosure Bundle" the bundle of documents in the agreed form
"Disclosure
Schedule" the Schedule of disclosures against the Warranties
at Schedule 7
"the Executive
Agreements" the Executive Agreements in the agreed form to be
entered into at Completion between the Company and
each of Xx Xxxxxxxx and Commercial Technology
Limited (a company controlled by Xx XxXxxxx)
"FA" Finance Act
"FRS" a financial reporting standard issued by The
Accounting Standards Board Limited or an SSAP
"ICTA" Income and Corporation Taxes Xxx 0000
"Intellectual
Property Rights" patents, patent applications, know-how, trade
marks, trade xxxx applications, trade names, reg-
istered designs, copyright or other similar intel-
lectual or commercial rights
"Xx Xxxxxxxx" Xxxxxx Xxxxxxxx of Apartment B42 Roc Fleuri 0 Xxx
xx Xxxxx XX000000 Monaco
"Xx Xxxxx" Xxxxx Xxxxx of 00 Xx Xxxxx Xxxxx Xxxxxxxxx XX0 0XX
"Last Accounts
Date" 30th June 1999 (being the date to which the Prin-
cipal Accounts have been prepared)
"the Loan
Agreements" the Loan Agreements in the agreed form to be
entered into at Completion between the Company
and each of Messrs Xxxxxxxxxxx, Xxxxxxx and Xxxx
"Xx XxXxxxx" Xxx XxXxxxx of Xxx Xxx Xxxxxxx Xxxxxxxxx Xx
Xxxxxxxxx Xxxxx Xxxxxxxxx XX00 0XX
"NASDAQ" means the NASD OTC Bulletin Board
"Principal Accounts" the balance sheet as at the Last Accounts Date of
the Company and the directors= report and notes
a copy of which are annexed to the Disclosure
Schedule
"Purchaser's
Solicitors" Messrs Kingsley Napley Knights Quarter 00 Xx
Xxxxxx Xxxx Xxxxxx XX0X 0XX
"Purchaser's
Stockbrokers" Stockbrokers approved by the Purchaser from time
to time
"Securities Act" the Securities Act of 1933, as amended
"the Service
Agreements" the Service Agreements in the agreed form to be
entered into at Completion between the Company and
each of Messrs Blanchfield, Jackson, and Xxxx and
the engagement letter in the agreed form to be
entered into at Completion between CMM Ventures
Limited (a company under the control of Xx Xxxxx)
and the Company
"Shares" the 17,895 ordinary shares of 10 xxxxx each in the
capital of the Company comprising the whole of its
issued and allotted share capital
"the Software" means the Computer Software Programs detailed in
Part 1 of Schedule 4
"Subsidiary" a subsidiary as defined in CA, s 736
"Synergetics" Synergetics G B Limited a company under the
control of X X Xxxxxxx X X Xxxx and X Xxxxxxxxxxx
"Taxation" all forms of taxation duties imposts and levies
whatsoever and wherever and whenever imposed
"TCGA" Taxation of Chargeable Gains Xxx 0000
"TMA" Taxes Management Xxx 0000
"the Trade Marks" means the Trade Marks registered in the name of
the Company with regard to the Software under the
xxxx "Authoriszor" and domain names more particu-
larly detailed in Part 2 of Schedule 4
"VATA" Value Added Tax Xxx 0000
"Vendors'
Solicitors" Messrs Xxxxxxx Xxxxxxxx 0 Xxxx Xxxx Xxxxx XX0 0XX
"Warranties" the warranties of the Warrantors contained in
clause 5 and Schedule 3
"Warrantors" each of Xxxxx Xxxxxxxxxxx, Xxxxx Xxxxxxx and Xxxxx
Xxxx
1.2 Any reference to the Vendors includes, where appropriate, their personal
representatives
1.3 Except where the context otherwise requires words denoting the singular
include the plural and vice versa; words denoting any one gender include
all genders; words denoting persons include firms and corporations and vice
versa
1.4 Clause headings in this Agreement and in the Schedules are for ease of
reference only and do not affect the construction of any provision
2 AGREEMENT FOR SALE
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2.1 Subject to the terms and conditions of this agreement, the Vendors shall
each sell their respective holding of Shares as set out in Schedule 1 with
full title guarantee and the Purchaser shall purchase the Shares with all
rights attaching to them and with effect from the date of this Agreement
2.2 Each of the Vendors hereby waives any pre-emption rights he may have in
relation to any of the Shares under the articles of association of the
Company or otherwise
3 PURCHASE CONSIDERATION
----------------------
3.1 The purchase consideration for the Shares shall be the allotment at
Completion credited as fully paid, of the Consideration Shares to each
Vendor in the amounts set against each of their respective names in Column
(3) of Schedule 1
3.2 The Consideration Shares shall be issued on terms that they will rank pari
passu in all respects with the shares of the Purchaser in issue at the date
of allotment save:-
3.2.1 as regards any dividend declared or paid by reference to a record
date which is prior to Completion; and
3.2.2 in relation to any dividend in specie or other arrangement declared
or entered into by the Purchaser pursuant to which the
investment/interest of the Purchaser in Toucan Mining Limited or
another or successor entity (ATM@) is divested to the stockholders of
record of the Purchaser prior to Completion. The Vendors acknowledge,
accept and undertake to the Purchaser that the Consideration Shares
give them no entitlement to any investment/interest/involvement in TM
and to the extent that any resolution is put to them as stockholders
of the Purchaser to give effect to or otherwise authorise such
dividend or arrangement they shall vote in favour of such resolution.
In the event TM is sold to a third party rather than being divested
to the Purchaser's stockholders, the Vendors acknowledge accept and
undertake to the Purchaser that the Consideration Shares give them no
entitlement to any investment/interest in the proceeds of sale of TM
and shall execute any documents necessary or appropriate to reflect
that the Vendors have no such investment/interest in such proceeds
3.3. The Purchaser warrants to the Vendors that at Completion:-
3.3.1 the Consideration Shares will comprise no less than 34% of the
enlarged issued share capital of the Purchaser at Completion (prior
to the exercise of any warrants or options) and if less the Purchaser
will procure that such further equity shares comprising its share
capital are issued to the Vendors (in similar proportions to their
entitlement to Consideration Shares) to rectify any breach of this
warranty as soon as practicable;
3.3.2 the balance sheet of the Purchaser, on the assumption that the
Purchaser has divested or is deemed to have divested itself of its
interest in TM, will comprise cash, net current assets and quoted
shares of an amount in aggregate of not less than 1,000,000 (British
Pounds). For this purpose the value of the shares of Minmet plc
("Minmet") owned by the Purchaser shall be the average closing price
of Minmet shares on the London Stock Exchange for the ten day trading
period immediately preceding the second trading day prior to the date
of Completion as disclosed in the Financial Times notwithstanding any
restrictions on the sale of such shares applicable to the Purchaser
3.4 The Purchaser shall so far as it can comply with any necessary requirements
of NASDAQ so as to obtain listing for the Consideration Shares equivalent
to the Listing in respect of the Shares of the Purchaser in issue at the
date of allotment
3.5 Subject as set out in Clause 3.6 below and any additional
restrictions/requirements of NASDAQ each of the Vendors:
3.5.1 acknowledges that the Consideration Shares are restricted securities
under the Securities Act and that the Vendors:-
3.5.1.1 are acquiring the Consideration Shares for their own account
without a view to distribution within the meaning of the
Securities Act;
3.5.1.2 have received from the Purchaser its filings with the
Securities & Exchange Commission and all other information that
they have deemed necessary to make an informed investment
decision with respect to the Purchaser in general and the
Consideration Shares in particular;
3.5.1.3 are financially able to bear the economic risks of accepting
the Consideration Shares based upon the warranties given by the
Purchaser to the Vendors in Clause 3.3; and
3.5.1.4 have such knowledge and experience with respect to investments
of a nature similar to the Consideration Shares so as to be
capable by reason of such knowledge and experience of evaluating
the merits and risks of and making the informed business decision
with regard to the acceptance of the Consideration Shares under
the terms of this Agreement
3.5.2 undertakes that he will not for a period of one year after Completion
dispose of any of his allocation of the Consideration Shares or in
the period between 1 year and 4 years after Completion dispose of
more than 1/3 of his allocation of the Consideration Shares per year;
and
3.5.3 subject to Clause 3.7 below agrees that in relation to any such
disposal envisaged by Clause 3.5.2 or Clause 3.6 below, he will not
carry out such disposal other than through the Purchaser's
Stockbrokers and for the purposes of this Clause, any of the Vendors
shall be deemed to dispose of a share if he ceases in any
circumstances whatever (other than death or to the trustees of a
trust of which he is settlor and he or an immediate member of his
family is beneficiary) to be the absolute beneficial owner of it and
on his death or in a transfer to such a trust, this Clause shall con-
tinue to apply in relation to his personal representatives or
trustees
3.6 The Warrantors may each dispose of such number of Consideration Shares,
without restriction save as regards sale via the Purchaser's Stockbrokers
(subject as set out in Clause 3.7 below) and applicable securities laws, as
may be sufficient to meet a claim under the Warranties or the Deed of
Indemnity at the time such claim falls to be satisfied by the Warrantors
3.7 The Vendors shall not be obliged to make any sale of Consideration Shares
through the Purchaser's Stockbrokers unless such disposal is effected on
terms whereby the net proceeds of sale are not materially different than
the proceeds that could have been achieved through a Stockbroker of the
relevant Vendor's own choice
4 COMPLETION
----------
4.1 Completion shall take place on the date of this Agreement when, all the
transactions mentioned in the following sub-clauses shall take place
4.2 The Vendors shall deliver to the Purchaser:
4.2.1 duly completed and signed transfer documents transferring the Shares
to the Purchaser or as it may direct free of all liens encumbrances
and restrictions together with the relative share certificates;
4.2.2 the Deed of Indemnity duly executed by the Warrantors and the
Purchaser
4.2.3 the statutory books of the Company complete and up-to-date and the
certificate of incorporation and common seal;
4.2.4 the appropriate form to amend the mandate given by the Company to its
bankers
4.3 The Purchaser and the Vendors shall procure that the Company enter into the
Service Agreements with Messrs Xxxxxxxxxxx Xxxxxxx Xxxx and CMM Ventures
Limited
4.4 The Purchaser and the Vendors shall procure that the Company and the
Purchaser enter into the Executive Agreements with Xx Xxxxxxxx and
Commercial Technology Limited
4.5 A Board meeting of the Company shall be held at which:
4.5.1 Xx Xxxxxxxx and Xx XxXxxxx shall be appointed additional directors of
the Company;
4.5.2 the transfers referred to in clauses 4.2.1 and the Deed of Assignment
shall be approved (subject to stamping); and
4.5.3 the entering into the Service Agreements and the Executive Agreements
shall be approved
4.6 The Vendors shall procure that as soon as reasonably practicable after
Completion the Company insert prepares and delivers to the Purchaser
audited financial statements of the Company that are reasonably
satisfactory to the Purchaser and its independent public accountants. For
this purpose such audited financial statements shall not be satisfactory
unless they are in compliance with the accounting rules and regulations of
the United States Securities and Exchange Commission ("the SEC") and
Generally Accepted Accounting Principles applicable to the United States
including without limitation the financial statements required by the form
8-K required to be filed by the Purchaser with respect to the closing of
the transactions contemplated by this Agreement
4.7 Upon completion of the matters referred to in clauses 4.2 to 4.5 the
Purchaser shall deliver to the Vendors' Solicitors within twenty (20) days
following the date of Completion definitive share certificates in respect
of the Consideration Shares reflecting the restrictions on transfer
referred to in Clause 3.5 of this Agreement
4.8 The Purchaser shall procure that:-
4.8.1 the Company repays to Xx Xxxxxxx 10,000 (British Pounds) of the
indebtedness of the Company to him;
4.8.2 the Company and/or the Purchaser enters into the Loan Agreements with
Xx Xxxxxxxxxxx Xx Xxxxxxx and Xx Xxxx and makes such payments as are
required to Xx Xxxxxxxxxxx and Xx Xxxx as envisaged therein on
Completion
5 WARRANTIES BY THE WARRANTORS
----------------------------
5.1 The Warrantors jointly and severally warrant to the Purchaser that the
Warranties in Schedule 3 are true and accurate in all respects
5.2 Each of the Warrantors undertakes, in relation to any Warranty which refers
to the knowledge, information or belief of the Warrantors, that he has made
all reasonable enquiry into the subject matter of that Warranty
5.3 Each of the Warranties is without prejudice to any other Warranty and,
except where expressly stated otherwise, no clause of this Agreement shall
govern or limit the extent or application of any other clause
5.4 The rights and remedies of the Purchaser in respect of any breach of the
Warranties shall not be affected by Completion, by any investigation made
by it or on its behalf into the affairs of the Company, or failing to
exercise or delaying the exercise of any right or remedy, or by any other
event or matter, except a specific and duly authorised written waiver or
release, and no single or partial exercise of any right or remedy shall
preclude any further or other exercise
5.5 The Purchaser acknowledges that the Warranties are given subject to the
limitations in Schedule 6 and subject to the disclosures made in the
Disclosure Schedule
6 RESTRICTIVE AGREEMENT
---------------------
6.1 For the purpose of assuring to the Purchaser the full benefit of the
businesses and goodwill of the Company, each of the Warrantors undertakes
by way of further consideration for the obligations of the Purchaser under
this Agreement as separate and independent agreements that he will not:
6.1.1 at any time after Completion disclose to any person, or himself use
for any purpose any information concerning the business, accounts or
finances of the Company or any of its clients' or customers'
transactions or affairs of which he has knowledge (save as may be
required by law or regulation);
6.1.2 for 36 months after Completion either on his own account or for any
other person directly or indirectly solicit, interfere with or
endeavour to entice away from the Company any person who to his
knowledge is, or has during the past 12 months been, a licensor, a
client, customer or employee of, or in the habit of dealing with the
Company;
6.1.3 for 36 months after Completion, either alone or jointly with or as
manager, agent for or employee of any person, directly or indirectly
carry on or be engaged concerned or interested in the business of
computer software development marketing and sale of software products
that perform substantially a similar function to the Software
7 GENERAL
-------
7.1 No announcement shall be made in respect of the subject matter of this
Agreement or in relation to the technical specification of the Software
unless specifically agreed between the parties or it is an announcement
required by law or NASDAQ issued after prior consultation with the Vendors
or in relation to the technical specification of the Software a decision is
taken by the Board of the Company
7.2 This Agreement shall be binding upon each party's successors and assigns
and personal representatives (as the case may be) but, none of the rights
of the parties under this Agreement or the Warranties may be assigned or
transferred
7.3 All expenses incurred by or on behalf of the parties, including all fees of
agents, representatives, solicitors, accountants and actuaries employed by
any of them in connection with the negotiation, preparation or execution of
this Agreement, shall be borne solely by the party who incurred the
liability
7.4 Any notice required to be given by any of the parties under this Agreement
may be sent by post by courier or by facsimile transmission to the address
of the addressee as set out in this Agreement or to such other address as
the addressee may have notified for the purpose of this clause.
Communications sent by post shall be deemed to have been received
forty-eight hours after posting. In proving service by post it shall be
necessary to prove only that the communication was contained in an envelope
which was duly addressed and posted in accordance with this clause.
Communications sent by courier or by facsimile transmission shall be deemed
to have been given when received
7.5 This Agreement shall be governed by and construed in accordance with
English Law and the parties hereby submit to the non exclusive jurisdiction
of the English Courts
7.6 Any provision of this Agreement that is prohibited or unenforceable in any
jurisdiction shall in such jurisdiction be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provisions
in any other jurisdiction
7.7 This Agreement (including the Instruments between the parties referred to
herein and any waivers delivered pursuant hereto) constitutes the entire
agreement between the parties and supersedes all other prior agreements and
understandings both written and oral among the parties or any of them with
respect to the subject matter hereof
7.8 No supplement modification or amendment of this Agreement or waiver of any
provision of this Agreement will be binding unless executed in writing or
on behalf of all the parties to this Agreement. No waiver of any of the
provisions of this Agreement will be deemed or will constitute a waiver of
any other provision of this Agreement (regardless of whether similar) nor
will any such waiver constitute a continuing waiver unless otherwise
expressly provided
7.9 This Agreement may be executed in any number of counterparts each of which
shall be deemed to be an original but all of which together shall
constitute but one agreement
7.10 In consideration of the Purchaser today entering into this Agreement the
Warrantors hereby:-
7.10.1 confirm to the Purchaser that the Company has not entered into nor
is there subsisting at the date of this Agreement any liability of the
Company under a guarantee indemnity or suretyship entered into on
their behalf or any party or entity connected with any of them;
7.10.2 on their own behalf and as the participators of Synergetics
irrevocably and unconditionally release the Company from all and any
claims rights of action debts or other liabilities which exist or may
exist save for the liability of the Company under sub-clause 4.8.1 and
the debt due to Synergetics referred to in the Principal Accounts
IN WITNESS whereof the hands of the parties or their duly authorised
representatives the day and year first before written
SCHEDULE 1
Vendors' holdings
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Name and address No. of Ordinary Shares of 10 xxxxx No of Consideration Shares
(1) each (2) (3)
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XXXXX XXXX XXXXXXXXXXX 5000 1,307,733
00 Xxxxxxx Xxxx
Xxxxxxx
Xxxxxxxx
Xxxx Xxxxxxxxx
-------------------------------------------------------------------------------------------------------
XXXXX XXXXXXX XXXXXXX 5000 1,307,733
0 Xxxxxxxxx
Xxxxxxx Xxxxx
Xxxxx
Xxxxx Xxxxxxxxx
XX0 0XX
-------------------------------------------------------------------------------------------------------
XXXXX XXXXXX XXXX 5000 1,307,733
00 Xxx Xxxx Xxxx
Xxxxxxxxxx
Xxxxxxxx
Xxxx Xxxxxxxxx
-------------------------------------------------------------------------------------------------------
XXXXX XXXXX 263 68,786
00 Xx Xxxxx Xxxxx
Xxxxxxxxx
XX0 0XX
-------------------------------------------------------------------------------------------------------
XXX XXXXXXX 2632 688,390
Xxx Xxx Xxxxxxx
Xxxxxxxxx
Xx Xxxxxxxxx
Xxxxx Xxxxxxxxx
XX00 0XX
-------------------------------------------------------------------------------------------------------
SCHEDULE 2
The company
Company number: 3302620
Date of incorporation: 15th January 1997
Share capital: authorised: 100,000
issued: 17895 (British Pounds)
Registered office: 0 Xxxxxxxxx
Xxxxxxx Xxxxx
Xxxxx
Xxxxx Xxxxxxxxx
XX0 0XX
Directors: Xxxxx Xxxxxxxxxxx
Xxxxx Xxxxxxx Xxxxxxx
Xxxxx Xxxxxx Xxxx
Secretary: Xxxxx Xxxx Xxxxxx
SCHEDULE 3
Warranties
1 CORPORATE MATTERS
-----------------
1.1 The information relating to the Company contained in Schedule 2 is true and
accurate
1.2 The Shares constitute the whole of the issued and allotted share capital of
the Company
1.3 The Company does not have any Subsidiaries
1.4 There are no agreements or arrangements in force, other than this
Agreement, which grant to any person the right to call for the issue,
allotment or transfer of any share or loan capital of the Company
1.5 The register of members and other statutory books of the Company have been
properly kept and contain an accurate and complete record of the matters
with which they should deal; and no notice or allegation, that any of them
is incorrect or should be rectified, has been received
1.6 All returns, particulars, resolutions and documents required to be filed
with the Registrar of Companies in respect the Group Company have been duly
filed and were correct
2 ACCOUNTING MATTERS
------------------
2.1 The Principal Accounts:
2.1.1 accurately reflect the net assets and financial position of the
Company at the Last Accounts Date; and
2.1.2 comply with the requirements of the Companies Acts and other relevant
statutes and can be converted into financial statements (without
material variance) in accordance with GAAP and SEC accounting rules;
and
2.1.3 properly, to a materiality threshold of 2,000 (British Pounds)
reflect the liabilities of the Company as at Completion
2.2 All the financial accounts, books, ledgers and other records of the Company
are in its possession and comply with Section 221 of the Companies Act
3 FINANCIAL MATTERS
-----------------
The Company did not have any capital commitments outstanding at the Last
Accounts Date and the Company has not, since then, incurred or agreed to
incur any capital expenditure or commitments or disposed of any capital
assets.
4 TAXATION MATTERS
----------------
4.1 The Company does not have any Liability to Taxation
4.2 The execution or completion of this Agreement will not result in any profit
or gain deemed to accrue to the Company for Taxation purposes
5 TRADING MATTERS
---------------
5.1 The Company is not, nor has it agreed to become, a member of any joint
venture, consortium, partnership, corporation or other unincorporated
association
5.2 The Company is not engaged in any litigation or arbitration proceedings, as
plaintiff or defendant; there are no proceedings threatened, either by or
against the Company; and so far as the Warrantors are aware there are no
circumstances which are likely to give rise to any litigation or
arbitration
5.3 There is no dispute with any revenue or other official department in the
United Kingdom or elsewhere, in relation to the affairs of the Company, and
so far as the Warrantors are aware there are no facts which may give rise
to any dispute
5.4 There are no claims pending or threatened, or capable of arising, against
the Company, by an employee, in respect of any accident or injury, which
are not fully covered by insurance
5.5 No power of attorney given by the Company is in force.
5.6 All of the Software programs used in the operation of equipment by or for
the benefit of the Company are "Year 2000 Compliant". For purposes of this
clause "Year 2000 Compliant" means that the equipment will continue to
function and its functionality and accuracy (both logical and mathematical)
will not be affected as a result of the run date or the dates being
processed in the twentieth or twenty-first century, including the advent of
the Year 2000 or from the extra day occurring in any leap year
5.7 Neither the Company or any of the Vendors has employed any broker finder or
investment adviser on its behalf or incurred any liability for any
brokerage or finder's fees or commissions in connection with the
transaction contemplated hereunder
6 PROPERTY MATTERS
----------------
The Company does not own or have any occupational rights of any kind in any
freehold or leasehold property
7 EMPLOYMENT MATTERS
------------------
7.1 The Company does not have and has never had any employees
7.2 The Company is not bound or accustomed to pay any moneys other than in
respect of remuneration, or emoluments of employment, or pension benefits,
to, or for the benefit of, any officer or employee of the Company
7.3 The Company does not operate or contribute to a pension scheme
8 ASSET MATTERS
-------------
8.1 All third party software used or required by the Company in connection with
its business is the subject of a relevant licence from the owner of such
software. The Company has obtained all consents required by such licensor
required by the transaction contemplated by this Agreement
8.2 The Company is not in breach nor has there occurred any default by the
Company under any licence contract or other agreement relating to
Intellectual Property Rights
8.3 The Company is the sole beneficial owner of the Software and the Trade
Marks
8.4 All Intellectual Property Rights in relation to the Software have been
effectively vested in the Company pursuant to the Assignment
8.5 No right or licence has been granted to any person by the Company:-
8.5.1 to use in any manner or to do anything which would or might otherwise
infringe any of the Intellectual Property Rights in the Software;
8.5.2 in respect of the use or sale of the Software
8.6 The Company has not disclosed or permitted to be disclosed or undertaken or
arranged to disclose to any person other than the Purchaser any of its
know-how, trade secrets, source code, confidential information, price lists
or lists of customers or suppliers
8.7 The Company does not have any nor has it registered any domain name other
than those set out in Schedule 4, save for the word "Authoriszor" in the
context of the Trade Marks does not have or use or trade under any logos
SCHEDULE 4
Part 1
The Software
------------
Authoriszor Enterprise
Authoriszor Subscriber
Authoriszor O.E.M
Part 2
Trade Marks
-----------
Name Date of Resignation Class Number
Authoriszor 4th December 1998 9 and 16 2162596B
(Series No. 2)
Authoriszor 4th December 1998 9 and 16 2162596A
(Series No. 4)
Part 3
Domain Names
------------
xxxx://xxx.xxxxxxxxxxxxxxxx.xxx.xx
xxxx://xxx.xxxxxxxx.xxx
xxxx://xxx.xxxxxxxxxxxxxxxx.xxx
xxxx://xxx.xxxxxxxx.xxx
xxxx://xxx.xxxxxxxxxxxxxxxx.xxx
SCHEDULE 5
Deed of Indemnity
Date: 1999
Parties:
1 XXXXX XXXXXXXXXXX (1) XXXXX XXXXXXX XXXXXXX (2) and XXXXX XXXXXX XXXX (3)
(whose addresses are as set out in Schedule 1) ("the Covenantors")
2 TOUCAN GOLD CORPORATION INC a corporation incorporated under the laws of
the State of Delaware and whose Principal Executive offices are situate at
0000 Xxxxxxx Xxxx Xxxxx 0000 Xxxxxx Xxxxx 00000 XXX ("the Purchaser")
Recital:
This deed is entered into pursuant to an agreement made between the Covenantors
(1) and the Purchaser (2) relating to the sale of all the share capital of ITIS
Technologies Limited ("the Company") ("the Agreement")
Operative provisions
1 DEFINITIONS
In this deed the meanings of "The Principal Accounts", "The Last Accounts
Date" and "Taxation" shall be the same as in the Agreement
2 INDEMNITY
2.1 Subject as provided below, the Covenantors jointly and severally covenant
with the Purchaser to indemnify the Purchaser against:-
2.1.1 any liability for Taxation which arises wholly or partly in respect
of, or in consequence of, any acts, omissions or transactions
occurring or entered into on, or before, the date of this deed or
which results from, or is calculated by reference to, any income,
profits or gains earned, received or accrued, or deemed to have been
earned, received or accrued, on or before that date;
2.1.2 any resultant costs (including attorneys' and accountancy fees); and
2.1.3 any Taxation payable by the Company on or in respect of any payment
made under this deed
3 EXCLUSIONS
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3.1 The indemnity in clause 2.1 shall not apply to any liability:
3.1.1 to the extent that either an appropriate provision or reserve in
respect of the liability was made in the Last Accounts or the
liability was specifically referred to and quantified in the notes to
those Accounts;
3.1.2 for which the Company is, or may become, liable wholly, or primarily,
as a result of transactions in the normal course of its business after
the Last Accounts Date;
3.1.3 to the extent that the liability arises as a result only of the
appropriate provision or reserve in the Last Accounts being
insufficient by reason of any increase in rates of Taxation made after
the date of the Agreement;
3.1.4 to the extent limited or excluded by the provisions of Schedule 6;
3.1.5 arising as a result of any holdover election made by the Vendors and
the Company in relation to the sale and purchase referred to in the
Agreement
4 CONDUCT OF CLAIMS
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4.1 The Purchaser shall notify the Covenantors in writing of any information
which comes to its notice, whereby it appears that the Covenantors are, or
may become, liable under this deed
4.2 Subject to clause 4.3, the Purchaser shall, at the expense of the
Covenantors, take or procure the Company takes such action, to contest any
claim which could give rise to a liability under this deed, as the
Covenantors, or a majority of them, may reasonably require
4.3 The Covenantors shall, at the request of the Purchaser, provide, to the
reasonable satisfaction of the Purchaser and the Company indemnities in
respect of all the costs and expenses of any action taken pursuant to
clause 4.2
5 GENERAL
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5.1 This deed shall be binding on the Covenantors and their respective personal
representatives
5.2 The provisions of the Agreement relating to communications shall apply to
any communication to be given under, or in connection with, this deed
5.3 This Deed shall be governed by and construed in accordance with English Law
and the parties hereby submit to the non-exclusive jurisdiction of the
English Courts
SCHEDULE 6
Limitations
1.1 The Purchaser hereby acknowledges that except as provided in this Agreement
and in 1.9 hereof and without prejudice to any liability for fraudulent
representations or misrepresentations:
1.1.1 no reliance has been placed nor will at any time after execution of
this Agreement be placed by the Purchaser on any representation or
warranty or undertaking (whether express or implied and whether
written or oral) relating to the Company other than the Warranties;
and
1.1.2 the rights of recision, if any, of the Purchaser in relation to any
breach by any Vendor of this Agreement are hereby expressly excluded
as a remedy available to the Purchaser
1.2 The Purchaser shall not be entitled to make any claim under or pursuant to
the Warranties in relation to:
1.2.1 any matter disclosed to the Purchaser in this Agreement or the
Disclosure Schedule; or
1.2.2 any claim which would not have arisen but for a voluntary act or
omission performed or allowed to occur by the Purchaser or the Company
after Completion provided that this paragraph 1.2.2 shall not apply to
any act or transaction:
1.2.2.1 which is required to be carried out pursuant to law or
regulation; or
1.2.2.2 which is carried out in the ordinary course of business
1.3 The rights of the Purchaser in respect of any breach or non fulfilment or
any of the Warranties or the Deed of Indemnity shall only be enforceable if
written notice giving the amount and all material and specific details of a
claim shall have been given to the Warrantors on or before the expiration
of the period of eighteen months after the date of Completion and the
Warrantors shall cease to be liable in respect of such claim (which shall
be deemed to have been withdrawn) if legal proceedings are not issued and
service in respect of it within 3 months after written notice of it is
first served on the Warrantors pursuant to this paragraph
1.4 No payment shall be made in respect of any matter giving rise to a claim
under the Warranties or the Deed of Indemnity unless and until the amount
in respect of that claim (when aggregated with any other related or similar
claims) exceeds 5,000 (British Pounds)
1.5 If any payment is made by the Warrantors in or towards the settlement of
any claim under the Warranties or the Deed of Indemnity and the Purchaser
or the Company subsequently recovers or procures the recovery from a third
party of an amount which is referable to that claim the Purchaser shall
forthwith repay or procure repayment to the Warrantors of an amount equal
to whichever is the lesser of:
1.5.1 the amount recovered from the third party; and
1.5.2 the amount paid in or towards settlement of the claim
in each case after the deduction of any taxation incurred by either the
Company or the Purchaser in respect thereof, and after deduction of all
reasonable expenses of recovery
1.6 The Purchaser shall take all steps which may be reasonable to mitigate any
loss or damage in relation to any claim under the Warranties
1.7 The liability of the Warrantors under the Warranties and Deed of Indemnity
shall not:
1.7.1 exceed US$500,000 in aggregate; and
1.7.2 in respect of each Warrantor exceed 1/3 of the value of any claim, up
to an individual cap of US$166,666.66 per Warrantor
1.8 No claim shall be made under any Warranty if and to the extent that the
event giving rise to such claim has been the subject of a successful claim
under any other Warranty or the Deed of Indemnity, and the Warrantors shall
not be liable under the Deed of Indemnity if and to the extent that the
event giving rise to such claim has been the subject of a successful claim
under any of the Warranties
1.9 The limitations set forth in this Schedule 6 shall not apply to:-
1.9.1 title guarantees of Clause 2.1 of the Agreement;
1.9.2 Clause 3.5 of the Agreement; and
1.9.3 Warranties 1.2 and 1.4
SCHEDULE 7
Disclosure Schedule
The disclosures in this Disclosure Schedule shall be taken as being disclosed
against each and every Warranty, notwithstanding that a particular reference may
be made against a particular Warranty
1. There are generally disclosed to the Purchaser;
1.1 all matters apparent from the face of the Principal Accounts, a copy
of which are contained in the Disclosure Bundle;
1.2 all matters apparent from the records of the Company at Companies
House as at 21st July 1999;
1.3 all matters apparent from the face of the agreements with Hewlett
Packard and Microsoft, copies of which are contained in the Disclosure
Bundle; and
1.4 all matters apparent from the face of the documents contained in the
Disclosure Bundle
2. The Warrantors and the Company have been in negotiations with a third party
in Singapore with regards to such person being appointed an exclusive
distributor of the software product in Singapore. Some draft documentation
relating to such appointment has been sent to the third party, but no
agreement has been signed. Please refer to the documents in the Disclosure
Bundle
3. Contracts to appoint Turquoise Consulting Limited and Ashlawn Data Systems
Limited as selling agents of the Company have been signed, but to date, no
sales of the software product have been made though these agents, and their
appointment is terminable on 12 months notice. Discussions have also taken
place with Single Rapid Limited, to appoint them as selling agents, but no
contracts have yet been signed
4. The Company has been involved in a pilot scheme with the National Health
Service, in connection with the Service's establishment of electronic links
with GPs. No contract has been signed with the NHS, nor has any money been
paid either way
5. North East Lincs have paid 19,500 (British Pounds) (plus VAT) to the
Company (reflected in the Principal Accounts) for the installation of the
Software product. The product however has not yet been installed, and it is
not intended that such installation is completed prior to the filing of a
patent application in relation to the Software, by the Company
6. The Vendors and Company have, in the ordinary course of promoting their
product, to trade channels (not end users) with a view to setting up a
distribution network made the Software accessible to third parties for
demonstration purposes only and made available Sales literature (all non
technical in nature). Full technical disclosure of the Software has been
made to the Company's patent agents
7. Further liability not exceeding 1,000 (British Pounds) may have been
incurred by the Company in respect of business expenses which may take the
liabilities of the Company over and above the 2,000 (British Pounds)
threshold referred to in Warranty 2.1.3
SIGNED by the said )
XXXXX XXXXXXX XXXXXXX /s/ Xxxxx X Xxxxxxx ) XXXXX X XXXXXXX
in the presence of: )
X X XXXXXX
SOLICITOR
SIGNED by the said )
XXXXX XXXX XXXXXXXXXXX /s/ Xxxxx X Xxxxxxxxxxx ) X X XXXXXXXXXXX
in the presence of: )
X X XXXXXX
SOLICITOR
SIGNED by the said )
XXXXX XXXXXX XXXX /s/ Xxxxx X Xxxx ) X X XXXX
in the presence of: )
X X XXXXXX
SOLICITOR
SIGNED by the said )
XXXXX XXXXX /s/ Xxxxx Xxxxx ) B XXXXX
in the presence of: )
X X XXXXXX
SOLICITOR
SIGNED by the said )
XXX XXXXXXX /s/ Xxx XxXxxxx ) XXX XXXXXXX
in the presence of: )
X X XXXXXX
SOLICITOR
SIGNED by XXXXXX XXXXXXXX ) XXXXXX XXXXXXXX
Duly authorised for and on behalf of )
TOUCAN GOLD CORPORATION INC /s/ Xxxxxx Xxxxxxxx)
in the presence of: )
XXXXX X XXXX
SOLICITOR
