Dated 18th January 2003
(1) XXXXX XXX XXXXXXXX and others
(2) AUTO DATA NETWORK INC
________________________________
SHARE SALE AGREEMENT
relating to MAM Software Limited
________________________________
McFaddens
City Tower- Level Four
00 Xxxxxxxxxx Xxxxxx
Xxxxxx XX0X 0XX
Tel: 000 0000 0000
Fax: 000 0000 0000
SHARE SALE AGREEMENT
Date: 18th
January 2003
Parties:
1. XXXXX XXX XXXXXXXX of Hillsgate, Chapel Lane, Penistone,
South Yorkshire S30 6AQ, XXXXXXXX XXXXXXX XXXXXXXX of 00
Xxxxxxx Xxxx, Xxxxxxxxxxxx, Xxxxx Xxxxxxxxx S30 3HS, XXXX
XXXXX of 00 Xxxxxxxxx Xxxx Xxxxxx, Xxxxxxxxxxxx XX0 0XX and
XXXXXX XXXXXX of 00 Xxxxxx Xxxxx, Xxxxx, Xxxxxxxxxxx XX0
0XX (together the "Vendors"); and
2. AUTO DATA NETWORK INC, a corporation incorporated under the
laws of the state of Delaware, USA whose registered office
is at 00 Xxx Xxxxxxx Xxxx, Xxxxx, Xxxxxxxx 00000 XXX and
whose principal office is at Suite 0000, Xxx Xxxxxxxxxxx
Xxxxx, Xxx Xxxx, XX 00000, XXX (the "Purchaser").
Operative provisions:
1. Interpretation
In this Agreement the following words and expressions have
the following meanings:
" Accounts" means the balance sheet and profit and loss
account of the Company as at 30th June 2002;
" Accounts Date" means the date of the Accounts;
"Agreed Form" means the form agreed between the parties
on or prior to the date of this Agreement and
initialled for the purpose of identification by the
respective parties;
"Business Day" means a day (other than a Saturday or a
Sunday) on which banks generally are open for business
in London;
"CA" means the Companies Act 1985;
"Cash Payment" means the payment of the sum of
GBP2,500,000 pursuant to Clause 3.1.2;
"Companies Acts" means the CA, the former Companies
Acts (within the meaning of CAs 735 (1) and the
Companies Act 1989;
"Company" means MAM Software Limited, Company No
1797213;
"Completion" means the taking by each Party of the
action to be taken by that Party pursuant to Clause 4;
"Completion Accounts" means the audited accounts of
the Company prepared by the Vendors as at the
Completion Date;
"Completion Date" means a day not later than 28 days
after the date of this Agreement;
"Consideration Shares" means shares in the Purchaser
valued at GBP2,500,000 calculated at the price of $2
per share and an exchange rate of US$1.6 = GBP1;
"Disclosure Documents" the bundle of documents
initialled on behalf of the Vendors and the Purchaser
for the purposes of identification and delivered with
the letter referred to in the definition of "Disclosure
Letter";
"Disclosure Letter" means the letter of even date
herewith from the Vendors to the Purchaser specifying
exceptions to the Warranties and the Disclosure
Documents;
"Encumbrance" means any (other than by virtue of this
Agreement) interest or equity of any person (including
any right to acquire, option or right of pre-emption)
or any mortgage, charge, pledge, lien, assignment,
hypothecation, security interest, title retention or
any other security agreement or arrangement;
"FA" means a Finance Act;
"ICTA" means the Income and Corporation Taxes Act 1988;
"Intellectual Property" means any patent, patent
application, know-how, trade mark, trade mark
application, trade name, registered design, copyright
or other similar industrial or commercial right;
"MAM USA" means MAM Software North America Inc, a
corporation organised and existing under the laws of
the State of California USA and having its principal
office at 00000 Xxxxxxx Xxxx., Xxxxx 00, Xxx Xxxxx,
Xxxxxxxxxx, XXX;
"Purchaser's Solicitors" means McFaddens, City Tower
Level Four, 00 Xxxxxxxxxx Xxxxxx, Xxxxxx XX0X 0XX;
"Service Agreement" means the employment agreement
between Xxxxx Xxx Xxxxxxxx and the Company to be
entered into on Completion;
"Shares" means the entire issued share capital in the
Company as set out in Schedule 1;
"subsidiary" shall have the meaning assigned to it in
CA s. 736;
"Tax Deed" means the Deed in the agreed form concerning
taxation liabilities to be made between the Vendors and
the Purchaser;
"Taxation" means all forms of taxation, duties, imposts
and levies whatsoever, and wherever or whenever
imposed;
"Warranties" means the warranties and representations
by the Vendors in Clause 6 and Schedule 2;
1.2 All references in this Agreement to a statutory
provision shall be construed as including references to:
1.2.1 any statutory modification, consolidation or re-
enactment (whether before or after the date of
this Agreement) for the time being in force;
1.2.2 all statutory instruments or orders made pursuant
to a statutory provision; and
1.2.3 any statutory provisions of which a statutory
provision is a consolidation, re-enactment or
modification.
1.3 Any reference in this Agreement to the Vendors includes
their respective personal representatives.
1.4 A reference in this Agreement to SSAP shall be a
reference to a statement of standard accounting practice
adopted by the Accounting Standards Board Limited.
1.5 Clause headings in this Agreement are for ease of
reference only and do not affect the construction of any
provision.
2 Agreement for sale
Subject to the terms and conditions of this Agreement the
Vendors shall sell or procure the sale with full title guarantee
and the Purchaser shall purchase the Shares, free from all
liens, charges and encumbrances and with all rights attaching to
them, with effect from the Completion Date.
3 Purchase consideration
3.1 The purchase consideration for the Shares shall be:
3.1.1 the issue by the Purchaser to the Vendors on the
Completion Date of the Consideration Shares;
3.1.2 the payment of GBP2,500,000 on the date
falling six months after the Completion Date, or
if the same is not a Business Day, then the next
following Business Day together with interest
calculated at 1% over the Citibank base rate as
the same shall be in force from day to day during
the period from the Completion Date until the
actual date of payment. The Purchaser shall be
entitled to prepay this amount at two business
days notice.
3.2 The Consideration Shares shall be fully paid, non
assessable shares of common stock of the Purchaser and
shall rank pari passu with all other common stock of the
Purchaser in issue at the date of issue of those
Consideration Shares save as regards any dividend declared
or paid by reference to a record date which is prior to the
applicable issue date, being the Consideration Date or the
first anniversary thereof, as the case may be.
3.3 Each of the Vendors severally agrees with the
Purchaser:
3.3.1 that he will not dispose of any of his
Consideration Shares other than in accordance with SEC
Regulations and any other laws and regulations applicable
to the trading of such shares; and
3.3.2 that he will not dispose of any shares in the
Purchaser issued pursuant to this Agreement within one year
of the date of issue thereof
3.4 Notwithstanding the terms of this Clause 3 any obligation
on the Purchaser in this Clause 3 to make payments or issue
shares to the Vendors shall be discharged by making such payment
to or issuing such shares to the Vendors (or as the Vendors may
otherwise direct) as to 70% to Murdo Xxx Xxxxxxxx, as to 20% to
Xxxxxxxx Bootham Xxxxxxxx, as to 5% to Xxxx Xxxxx and as to 5%
to Xxxxxx Xxxxxx.
4 Completion
4.1 Completion shall take place at the offices of the
Purchaser's Solicitors on the Completion Date.
4.2 At Completion the Vendors shall deliver to the Purchaser:
4.2.1 duly completed and signed transfers in favour of
the Purchaser or as it may direct of the Shares
together with the relative share certificates;
4.2.2 the resignation of Xxxxxxxx Xxxxxxx Xxxxxxxx as
company secretary of the Company;
4.2.3 the Disclosure Letter;
4.2.4 the Tax Deed duly completed;
4.2.5 the statutory books and Certificate of
Incorporation of the Company;
4.2.6 the Service Agreement duly signed by Xxxxx Xxx
Xxxxxxxx; and
4.2.7 the Vendors shall repay all monies then owing by
each of them to the Company, if any, whether due for
payment or not.
4.3 At Completion a board meeting of the Company
shall be held at which:
4.3.1 such persons as the Purchaser may nominate shall
be appointed additional directors and company
secretary with immediate effect;
4.3.2 the transfers referred to in clause 4.2.1 shall
be approved (subject to stamping);
4.3.3 the registered office of the Company shall be
changed to The Forsyth Centre, Century Place, Lamberts
Road, Tunbridge Xxxxx TN2 3EH; and
4.3.4 the Service Agreement shall be approved.
4.4.1 The Vendors shall within 42 days of the Completion Date
deliver the Completion Accounts to the Purchaser.
4.4.2 Within 14 days of receipt of the Completion Accounts,
the Purchaser will agree their terms with the
Vendors. In the absence of such agreement, either party
may refer the Completion Accounts to an independent firm of
chartered accountants of repute who shall be asked to
decide as experts and not as arbitrators on the final
version of the Completion Accounts.
If the net assets as shown by the Completion Accounts are
more than GBP150,000 below the net assets as shown in the
Accounts, the difference between such amounts shall be due
from the Vendors to the Purchaser within 180 days of the
agreement or decision, as the case may be, under Clause
4.4.2
4.5 Conduct pending Completion
Each of the Vendors hereby undertakes to the Purchaser that
in the period prior to Completion:
4.5.1 the business of the Company and MAM USA will be
carried on as a going concern in the normal course;
4.5.2 no physical assets of the Company or MAM USA
shall be removed from the premises of the Company or
MAM USA, as the case may be, save in the ordinary
course of normal day to day trading;
4.5.3 it will use its best endeavours to maintain the
trade and trade connections of the Company and MAM
USA;
4.5.4 all debts which the Company or MAM USA incurs in
the normal course of the business will be settled
within the applicable periods of credit;
4.5.5 it shall promptly give to the Purchaser full
details of any material changes in the business,
financial position and/or assets of the Company and
MAM USA;
4.5.6each of the Company and MAM USA shall maintain in
force policies of insurance with limits of indemnity
at least equal to, and otherwise on terms no less
favourable than, those policies of insurance currently
maintained by them;
4.5.7 no amendment shall be made to any pension
arrangements;
4.5.8 neither the Company nor MAM USA shall:
(a) enter into, modify or agree to terminate
any material contract (other than in the
ordinary course of business) or incur any
capital expenditure in excess of GBP10,000 on
any individual item;
(b) appoint or employ any new employees,
workers or consultants at an annual salary or
rate of remuneration in excess of GBP20,000;
(c) alter materially, or agree to alter
materially, the terms and conditions of
employment (including benefits) of any of its
employees or workers, nor dismiss any of its
employees or workers and the Vendors shall
not directly or indirectly induce or
endeavour to induce any of such employees or
workers to terminate their employment prior
to Completion;
(d) dispose of any material assets used or
required for the operation of the business of
the Company or MAM USA (otherwise than in the
ordinary course of business) or enter into
any other transaction otherwise than in the
ordinary course of business;
(e) issue or dispose of or create any rights
over or agree to do any of the foregoing over
any shares in MAM USA;
(f) create any Encumbrance over any of its
assets or its undertaking nor, otherwise than
in the ordinary course of business, give any
guarantees or indemnities in respect of any
third party;
(g) institute, settle or agree to settle any
legal proceedings relating to the business of
the Company or MAM USA, as the case may be,
save for debt collection in the ordinary
course of business;
(h) grant or modify or agree to terminate any
rights or enter into any agreement relating
to Intellectual Property or otherwise permit
any of its rights relating to Intellectual
Property to lapse;
(i) incur any liabilities to the Vendors and
the Vendors shall not incur any liabilities
to the Company or MAM USA, as the case may
be, other than trading liabilities incurred
in the ordinary course of business; or
provided that the Vendors and the Company and MAM USA shall be
entitled to do any of the things specified in sub-clause 4.5.8
with the prior written consent of the Purchaser.
5 Warranties by the Vendors
5.1 The Vendors severally warrant to the Purchaser that, save
as disclosed in the Disclosure Letter, the Warranties set
out in Schedule 2 are true and accurate in all material
respects and that all facts contained in the Disclosure
Letter in such respect are true and there are no material
facts known to the Vendors which are inconsistent with any
Warranty and which have not been disclosed by the Vendors
in the Disclosure Letter.
5.2 The Vendors shall have no liability to the extent that the
circumstances, facts or events giving rise to any claim are
set out or referred to in or annexed to this Agreement, the
Accounts or the Disclosure Letter.
5.3 Each of the Warranties is without prejudice to any
other Warranty.
5.4 The rights and remedies of the Purchaser in respect of
any breach of the Warranties shall not be affected by
completion of the purchase of the Shares, by any
failure to exercise or delay in exercising any right
or remedy unless a specific and duly authorised
written waiver or release shall have been given by the
Purchaser.
5.5 The Vendors shall have no liability in respect of any
claims in respect of the Warranties unless the total
loss sustained in respect of all of those claims (when
aggregated with any losses sustained any under
previous claims) shall exceed GBP75,000 and in computing
such aggregate, any claim under which the loss
sustained does not exceed GBP5,000 shall be ignored.
5.6 The Purchaser shall not make any claim in respect of
the Warranties against the Vendors unless made in
writing in reasonably detailed form within twelve
months after the Completion Date, except in the case
of fraud.
5.7 The aggregate liability of the Vendors in respect of
all claims in respect of the Warranties shall not in
any event exceed GBP2,500,000.
5.8 The Vendors shall have no liability to the extent that
allowance, provision or reserve was made in the
Accounts in respect of the matters to which such
liability relates or such matter was taken into
account in computing the amount of any such allowance,
provision or reserve or such matter was specifically
referred to in the notes to the Accounts.
5.9 The Vendors shall be under no liability in respect of
any matters resulting from a change in accounting or
in Taxation policy or practice of the Purchaser or any
Company including the method of submission of Taxation
returns introduced, or the making of any claim,
election, surrender, disclaimer notice or consent,
since or having effect after Completion.
5.10 If the Purchaser or any Company shall receive any
claim ("a Third Party Claim") which shall be made by
a third party against any Company, which might
constitute or give rise to a liability pursuant to
this Agreement, the Purchaser shall (subject to being
indemnified and secured to its reasonable satisfaction
against all reasonable costs and expenses for which it
or any Company may become liable):
5.10.1 take such action as the Vendors may
reasonably request to avoid, dispute, resist, appeal,
compromise or defend or mitigate any such Third Party
Claims;
5.10.2 not make any admission of or settle or
compromise any liability which the Company may have
in relation to the Third Party claim without the
prior written consent of the Vendors, such consent
not to be unreasonably withheld or delayed;
5.11 The Purchaser acknowledges that it is entering into
this Agreement in reliance on no warranty,
representation or undertaking save as specifically set
out in this Agreement.
5.12 The amount of any successful claim against the Vendors
shall be deemed to constitute a reduction in the
Consideration.
6 Warranties by The Purchaser
6 The Purchaser warrants to the Vendors that:
6.1 The Purchaser will prior to the issue of the
Consideration Shares duly authorise the issue of
the Consideration Shares;
6.2 The Purchaser is an corporation duly organised
and validly existing and in good standing under
the laws of the State of Delaware and has power
and authority and all material licences and
permits necessary to carry on its business and to
own its assets. The Purchaser has all requisite
legal and corporate power, and has taken all
requisite corporate action to execute and deliver
this Agreement and to carry out and perform all
of its obligations under this Agreement and will
by the relevant issue date have taken all
requisite corporate action necessary to issue the
Consideration Shares to be issued on such issue
date in accordance with this Agreement. This
Agreement constitutes the legal, valid and
binding obligations of the Purchaser, enforceable
in accordance with its terms, except (i) as may
be limited by applicable bankruptcy, insolvency
or similar laws relating to or affecting the
enforcement of creditors' rights generally and
(ii) as limited by equitable principles
generally. The execution and delivery of this
Agreement does not, and the performance of this
Agreement and the compliance with the provisions
hereof, and the issue of the Consideration Shares
by the Purchaser will not conflict with, or
result in a breach or violation of the terms,
conditions or provisions of, or constitute a
default under, or result in the creation or
imposition of any lien pursuant to the terms of,
the Certificate Incorporation or Bylaws of the
Purchaser or any indenture, mortgage, lease or
other material agreement or instrument of the
Purchaser or so far as it is aware but without
prejudice to any other provision of this
Agreement any statute, law, rule or regulation or
any state or federal order, judgement or decree.
6.3 the Consideration Shares when issued in
compliance with the provisions of this Agreement,
will be validly issued, fully paid and
nonassessable. The issue and delivery of the
Consideration Shares is not subject to pre-
emptive or any other similar rights of the
stockholders of the Purchaser or any liens of
encumbrances. The issue and delivery of the
Consideration Shares and the compliance by the
Purchaser with its obligations under this
Agreement will be in compliance with the
Securities Act of 1933, as amended, and the rules
and regulations promulgated thereunder and the
Securities Exchange Act of 1934 as amended and
the rules and regulations promulgated thereunder
and with the rules and regulations of any stock
market on which its common stock may be listed.
6.4 No consent, approval, order or authorisation of,
or registration, qualification, designation,
declaration or filing with, any federal, state,
local, governmental authority inside or outside
the United States of America on the part of the
Purchaser is required in connection with the
consummation of the transactions contemplated by
this Agreement; and
6.5 The Purchaser has done and will do all such
things, and has not failed to do and will not
omit to do anything, including, without
limitation, in relation to compliance with filing
and other duties under the Securities and
Exchange Act 1934 and rules and regulations
thereunder, as may be necessary to enable the
Purchaser to comply with its obligations under
this Agreement and to enable the issue and
delivery and sale of the Consideration Shares in
accordance with the Agreement.
6.6 The Purchaser shall within 30 days of the
Completion Date enter into an underwriting
agreement and file the same with the SEC in
respect of at least US$5,000,000. If it shall
fail to do so or if such underwriting agreement
shall fail or be withdrawn at any time prior to
the making of the Cash Payment, the Purchaser
shall promptly arrange the issue of a guarantee
or standby letter of credit issued by a third
party institution in favour of the Vendors in
respect of the Cash Payment.
7 Restrictive Agreement
7 For the purpose of assuring to the Purchaser the full
benefit of the business and goodwill of the Company, the Vendors
undertake by way of further consideration for the obligations of
the Purchaser under this Agreement as separate and independent
agreements that none of them will:
7.1 at any time after the Completion Date disclose to any
person or himself use for any purpose, and shall use all
reasonable endeavours to prevent the publication or
disclosure of, any information concerning the business,
accounts or finances of the Company or any of its
clients' or customers' transactions or affairs which may,
or may have, come to his knowledge;
7.2 for a period of two years after the Completion Date
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 now or has during the twelve months preceding
the date of this Agreement been a client, customer or
employee of, or in the habit of dealing with, the Company.
7.3 for a period of two years after the Completion Date
either on its own account or for any other person be
engaged in any business which competes with the business
carried on the Company at the Completion Date provided
that this Clause shall not prohibit an investment of less
than 5% in the shares of any company whose shares are
listed on a recognised stock exchange.
8 General
8.1 No announcement of any kind shall be made in respect of the
subject matter of this Agreement unless specifically agreed
between the parties. Any announcement by either party shall in
any event be issued only after prior consultation with the other
party.
8.2 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.
8.3 Save where expressly otherwise provided, all expenses
incurred by or on behalf of the parties, including all fees
or 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 and the Company shall not have any liability in
respect of them.
8.4 Time shall be of the essence of this Agreement, both
as regards the dates and periods specifically mentioned and
as to any dates and periods which may by agreement in
writing between or on behalf of the Vendors and the
Purchaser be substituted for them.
8.5 Any notice required to be given by any of the parties under
this Agreement may be sent by first class post (or air mail
if overseas) to the address of the addressee as set out in
this Agreement or to such other address as the addressee
may from time to time have notified for the purpose of this
clause. Communications sent by airmail postage shall be
deemed to have been received six Business Days after
posting. In proving service by post it shall only be
necessary to prove that the communication was contained in
an envelope which was duly addressed and posted in
accordance with this clause.
8.6 The Purchaser hereby irrevocably appoints the
Purchaser's Solicitors as its agent for service of process
in England in relation to any matter arising out of this
Agreement or any other agreement or undertaking entered
into pursuant to or in connection with this Agreement.
8.7 This Agreement shall be governed by English law and
the parties hereby submit to the non-exclusive jurisdiction
of the English courts.
AS WITNESS the hands of the parties hereto or their duly
authorised representatives on the date set out above.
SIGNED by XXXXX XXX )
XXXXXXXX in the presence of: )
SIGNED by XXXXXXXX )
BOOTHAM XXXXXXXX in the )
presence of: )
SIGNED by XXXX XXXXX )
in the presence of: )
SIGNED by XXXXXX XXXXXX )
in the presence of: )
for and on behalf of AUTO DATA )
NETWORK INC in the presence of :- )
SCHEDULE 1
Details of MAM Software Limited
Company number: 1797213
Date of incorporation: 5th March 1984
Share capital:
Authorised: GBP100 divided into 100 Ordinary Shares of GBP1 each
Issued: GBP100 Ordinary Shares of GBP1
Shareholders: Xxxxx Xxx Xxxxxxxx 70 Ordinary Shares of GBP1 each
Xxxxxxxx Bootham Xxxxxxxx 20 Ordinary Shares of GBP1 each
Xxxx Xxxxx 5 Ordinary Shares of GBP1 each
Xxxxxx Xxxxxx 5 Ordinary Shares of GBP1 each
Registered office: Grangewood
Chapel Lane
Penistone
Sheffield S30 6AQ
Directors: Murdo Xxx Xxxxxxxx
Xxxxxx Xxxxxx
Xxxx Xxxxx
Xxxxxxxx Bootham Xxxxxxxx
Secretary: Xxxxxxxx Xxxxxxx Xxxxxxxx
Subsidiaries: MAM USA
None others
Details of MAM Software North America Inc
Company number:
Date of incorporation:
Share capital:
Authorised: 5,000,000 shares of $0.01 each
Issued: 4,700,000 shares of $0.01 each
Shareholders: MAM 2,650,000 shares
Registered office: San Ramon, California, USA
Directors: Xxxxx Xxx Xxxxxxxx
Secretary:
Subsidiaries: None
SCHEDULE 2
Warranties
1. Corporate Matters
1.1 The information relating to the Company and MAM
USA contained in Schedule 1 is true.
1.2 The Shares constitute the entire issued and
allotted share capital of the Company.
1.3 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 or MAM USA.
1.4 Save for immaterial errors the register of members
and other statutory books of the Company and MAM
USA 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.
1.5 All returns, particulars, resolutions and
documents required by the Companies Act 1985 to be
filed with the Registrar of Companies in respect
of the Company and documents similarly required in
respect of MAM USA in the United States have been
duly filed and were correct.
2. Accounting Matters
2.1 The Accounts have been prepared in accordance
with the historical cost convention.
2.2 The Accounts:
2.1.1 give a true and fair view of the
assets, liabilities (including contingent,
unquantified or disputed liabilities) and
commitments of the Company at the Accounts
Date and its profits for the financial
period ended on that date;
2.1.2 and are not affected by any extraordinary,
exceptional or non-recurring item.
2.3 All the accounts, books, ledgers, and other
financial records of the Company are in its
possession and have been maintained.
3. Financial Matters
3.1 Neither the Company nor MAM USA has any capital
commitments outstanding.
3.2 Neither the Company nor MAM USA has paid or
declared any dividend or made any other payment
which is, or is treated as, a distribution for the
purposes of ICTA Part VI and Chapter II.
3.3 Neither the Company nor MAM USA has repaid, or
become liable to repay, any indebtedness in
advance of its stated maturity.
3.4 There are no liabilities (including contingent
liabilities) which are outstanding on the part of
the Company or MAM USA other than those incurred
in the ordinary course of trading.
3.5 None of the facilities available to the Company or
MAM USA is dependent on the guarantee or indemnity
of, or any security provided by, a third party.
3.6 There is not now outstanding in respect of the
Company or MAM USA any guarantee, or agreement for
indemnity or for suretyship, given by, or for the
accommodation of, the Company or MAM USA.
3.7 The amounts now due from debtors will be
recoverable in full in the ordinary course of business,
and in any event not later than twelve weeks from the
date of this Agreement.
3.8 There is not now outstanding in respect of the
Company or MAM USA any guarantee, or agreement for
indemnity or for suretyship, given by, or for the
accommodation of, the Company or MAM USA.
4. Taxation Matters
4.1 All returns, computations and payments which
should be, or should have been, made by the
Company or MAM USA for any Taxation purpose have
been made within the requisite periods and are up-
to-date, correct and on a proper basis and none of
them is, or is likely to be, the subject of any
dispute with the Inland Revenue or other Taxation
authorities.
4.2 Each of the Company and MAM USA has duly deducted
and accounted for all amounts which it has been
obliged to deduct in respect of Taxation and, in
particular, the Company has properly operated the
PAYE system, by deducting tax, as required by law,
from all payments made, or treated as made, to its
employees or former employees, and accounted to
the Inland Revenue for all tax so deducted and for
all tax chargeable on benefits provided for its
employees or former employees.
4.3 Neither the Company nor MAM USA will, nor will
become, liable to pay, or make reimbursement or
indemnity in respect of, any Taxation (or amounts
corresponding thereto) in consequence of the
failure by any other person (not being a group
company) to discharge that Taxation within any
specified period or otherwise, where such Taxation
relates to a profit, income or gain, transaction,
event, omission or circumstance arising, occurring
or deemed to arise or occur (whether wholly or
partly) on or prior to the date of this Agreement.
4.4 Neither the Company nor MAM USA has incurred or
is, or has become, liable to incur expenditure
which will not be wholly deductible in computing
its taxable profits except for expenditure on the
acquisition of an asset to be held otherwise than
as stock-in-trade.
4.5 The Company has not made or agreed to make, a
surrender of, or claim for, group relief pursuant
to ICTA Pt X Ch IV (group relief) or is liable to
make or entitled to receive a payment for group
relief otherwise than to or from another group
company.
4.6 The execution or completion of this Agreement will
not result in any profit or gain deemed to accrue
to the Company or MAM USA for Taxation purposes.
4.7 Neither the Company nor MAM USA has in the six
years ending on the date of this Agreement carried
out, or been engaged in, any transaction or
arrangement in respect of which there may be
substituted for the consideration given or
received by the Company or MAM USA a different
consideration for Taxation purposes.
4.8 The Company has duly registered and is a taxable
person for the purpose of value added tax and has
not applied for treatment as a member of a group.
5. Trading Matters
5.1 The business of the each of the Company and MAM
USA has been continued in the ordinary and normal
course.
5.2 Neither the Company nor MAM USA is, nor has agreed
to become, a member of any joint venture,
consortium, partnership or other unincorporated
association.
5.3 Neither the Company nor MAM USA is engaged in any
litigation or arbitration proceedings, as claimant
or defendant; there are no such proceedings
pending or threatened, either by or against the
Company or MAM USA.
5.4 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 or MAM USA, and there are no facts which
may give rise to any such dispute.
5.5 There are no claims pending or threatened, or
capable of arising, against the Company or MAM
USA, by an employee or xxxxxxx or third party, in
respect of any accident or injury, which are not
fully covered by insurance.
5.6 Each of the Company and MAM USA has conducted and
is conducting its business in all material
respects in accordance with all applicable laws
and regulations, whether of the United Kingdom or
elsewhere.
5.7 No power of attorney given by the Company or MAM
USA is in force.
5.8 Neither the Company nor MAM USA is a party to any
contract or arrangement which is not of an
entirely arm's length nature.
5.9 There are no outstanding authorities (express or
implied) by which any person may enter into any
contract or commitment to do anything on behalf of
the Company or MAM USA.
5.10 Neither the Company nor MAM USA is nor will with
the lapse of time become, in default in respect of
any obligation or restriction binding upon it.
6 Employment Matters
6.1 Full particulars of the identities, dates of
commencement of employment, or appointment to
office, and terms and conditions of employment of
all the employees and officers of the Company and
MAM USA, including without limitation profit
sharing, commission or discretionary bonus
arrangement have been advised to the Purchaser.
6.2 Neither the Company nor MAM USA is bound or
accustomed to pay any monies 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 or MAM USA.
6.3 Neither the Company nor MAM USA is under any legal
or moral liability or obligation, or a party to
any ex-gratia arrangement or promise, to pay
pensions, gratuities, superannuation allowances,
or the like, or otherwise to provide 'relevant
benefits' within the meaning of ICTA s 612, to or
for any of its past or present officers or
employees or their dependants; and there are no
retirement benefit, or pension or death benefit,
or similar schemes or arrangements in relation to,
or binding on, the Company or MAM USA or to which
the Company or MAM USA contributes.
7. Asset Matters
7.1 Each of the Company and MAM USA owns and has good
and marketable title to all assets purported to be
held by it.
7.2 The plant, machinery, equipment, vehicles and
other equipment used in connection with the
business of the Company and MAM USA:
7.2.1 are in a good and safe state of repair and
condition and satisfactory working order and
have been regularly and properly maintained;
7.2.2 are the absolute property of the Company or
MAM USA, as the case may be, save for those
items in respect of which the outstanding
payments do not exceed GBP5,000;
7.2.3 are not expected to require replacements or
additions at a cost in excess of GBP10,000
within six months from the date of this
Agreement;
7.2.4 are all capable, and (subject to normal wear
and tear) will remain capable, throughout the
respective periods of time during which they
are each written down to a nil value in the
accounts of the Company or MAM USA, as the
case may be, (in accordance with the normal
recognised accountancy principles
consistently applied prior to the date of
this Agreement), of doing the work for which
they were designed or purchased.
7.3 All the stock-in-trade of each of the Company and
MAM USA, and those of its other assets and
undertakings which are of an insurable nature,
are, and have at all material times been, insured
in amounts representing their full replacement or
reinstatement value against fire and other risks
normally insured against by persons carrying on
the same business as that carried on by the
Company or MAM USA, as the case may be.
7.4 Each of the Company and MAM USA is now, and has at
all material times been, adequately covered
against accident, damage, injury, third party loss
(including product liability) loss of profits and
other risks normally insured against by persons
carrying on the same business as that carried on
by the Company or MAM USA, as the case may be.
7.5 All insurances are currently in full force and
effect, and nothing has been done or omitted to be
done which could make any policy or insurance void
or voidable, or which is likely to result in an
increase in premium.
7.6 No claim is outstanding, or may be made, under any
of the insurance policies and no circumstances
exist which are likely to give rise to a claim.
8. Property Matters
8.1 Each of the Company and MAM USA has good and
marketable title to all of its properties which
comprise all the estate or interests of the
Company or MAM USA, as the case may be, in any
land or premises.
8.2 Each of the Company and MAM USA has in its
possession or under its control all duly stamped
deeds and documents which are necessary to prove
title to each of such properties.
8.3 Each of the Company and MAM USA has duly and
punctually performed and observed all covenants,
conditions, agreements, statutory requirements,
planning consents, by-laws, orders and regulations
affecting any of such properties, and no notice of
any breach of any such matter has been received.
8.4 The use of each of such properties is the
permitted use for the purposes of the Town &
Country Planning Acts or analogous legislation in
the USA.
8.6 Such properties have at all times been held by the
Company or MAM USA, as the case may be, as
investments and not trading stock.
9. Intellectual Property Rights and Trade Secrets
9.1 All Intellectual Property rights used or acquired
by the Company or MAM USA, as the case may be, in
connection with its business are in full force and
effect and are vested in and beneficially owned by
it.
9.2 No right or licence has been granted to any person
by the Company or MAM USA to use in any manner or
to do anything which would or might otherwise
infringe any of the Intellectual Property rights
referred to above; and no act has been done or
omission permitted by the Company or MAM USA, as
the case may be, whereby they or any of them have
ceased or might cease to be valid and enforceable.
9.4 The business of each of the Company and MAM USA
(and of any licensee under a licence granted by
either of them) as now carried on does not and is
not likely to infringe any Intellectual Property
right of any other person (or would not do so if
the same were valid) or give rise to a liability
to pay compensation pursuant to the Patents Act
1977 Sections 40 and 41 and all licences to the
Company or MAM USA, as the case may be, in
respect of any such Right are in full force and
effect.
9.5 Neither the Company nor MAM USA has (otherwise
than in the ordinary and normal course of
business) 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, confidential information,
price lists or lists of customers or suppliers.
9.6 Neither the Company nor MAM USA is a party to any
secrecy agreement or agreement which may restrict
the use of disclosure of information.
9.7 Nothing has been done or omitted by the Company or
MAM USA which would enable any licensee under a
licence granted by the Company or MAM USA, as the
case may be, to be terminated or which in any way
constitutes a breach of terms of any licence.
10. General Matters
10.1 So far as the Vendors are aware, all information
given by the Vendors, or the Vendors' accountants
to the Purchaser, or the Purchaser's accountants
relating to the business, activities, affairs, or
assets or liabilities of the Company or MAM USA,
as the case may be, was, when given, and is now
accurate and comprehensive in all respects.
10.2 To the best of the Vendors' knowledge, there are
no material facts or circumstances, in relation to
the assets, business or financial condition of the
Company or MAM USA, as the case may be, which have
not been fully and fairly disclosed in writing to
the Purchaser and which, if disclosed, might
reasonably have been expected to affect the
decision of the Purchaser to enter into this
Agreement.
