EXHIBIT 2.1
DATED APRIL 1999
---------------------------
THE SELLERS
AND
VUMAN LIMITED
AND
CYBEROPTICS CORPORATION
AND
3i GROUP PLC
-------------------------------
AGREEMENT
FOR THE SALE AND PURCHASE OF THE
ENTIRE ISSUED SHARE CAPITAL OF
KESTRA LIMITED
-------------------------------
XXXXXX & XXXXXXX
XXXXXXX XXXXX
000 XXXXXXXX XXXXXXXX
XXXXXX XX0X 0XX
TEL: 0000 000 0000
AGREEMENT FOR SALE AND PURCHASE OF SHARES
DATE APRIL 1999
PARTIES
(1) The several persons listed in Schedule 1 other than 3i Group Plc (the
"SELLERS");
(2) CYBEROPTICS CORPORATION incorporated under the laws of Minnesota the
principal place of business is at 0000 Xxxxxx Xxxxx Xxxxx, Xxxxxxxxxxx,
XX, 00000, XXX (the "PURCHASER");
(3) VUMAN LIMITED (incorporated under company number 1594344) whose
registered office is situate at Xxxxxxx House, Manchester Science Xxxx,
Xxxxx Xxxxxx, Xxxxxxxxxx X00 0XX ("Guarantor"); and
(4) 3i GROUP PLC (incorporated under company number 1142830) registered
office 00 Xxxxxxxx Xxxx, Xxxxxx XX0 0XX ("3i").
IT IS AGREED AS FOLLOWS:
1 DEFINITIONS
1.1 GENERAL DEFINITIONS
In this agreement, the following definitions apply:
"3i SHARES"
those Shares in the capital of the Company set out opposite 3i
in Schedule 1;
"ACCOUNTS"
the audited balance sheet and profit and loss account of each
of the Company and the Subsidiary as at and for the period
ended on the Accounts Date together with the notes director's
and auditor's reports for that year being Warranted Document
"Sup 37 and 38";
5
"ACCOUNTS DATE"
31st July, 1998;
"ACCOUNTING STANDARDS"
the statements of standard accounting practice referred to in
Section 256 of the Companies Act issued by the Accounting
Standards Board Limited or such other body as may prescribed
thereunder prior to the date hereof by the Secretary of State
from time to time including (without limitation) the
statements of standard accounting practice issued by the
Accounting Standards Committee and since adopted by the
Accounting Standards Board Limited and any financial reporting
statements issued prior to the date hereof by the Accounting
Standards Board or such other body as aforesaid;
"ACQUIRED INTELLECTUAL PROPERTY"
the New Grey Modelling software assigned to the Company under
the Software Agreement (and as defined therein);
"AGREED FORM"
in a form agreed by and initialled by or on behalf of the
relevant parties;
"'A' ORDINARY SHARES"
means the 'A' ordinary shares of (pound)1.00 each in the
capital of the Company;
"AUDITORS"
KPMG, Chartered Accountants, Xx. Xxxxx Xxxxxx, Xxxxxxxxxx X0
0XX;
"'B' ORDINARY SHARES"
means those "B" Ordinary Shares of (pound)1.00 each in the
capital of the Company;
"BUSINESS"
the development of products (including software) to Inspect
Industrial Assemblies;
"BUSINESS DAY"
a day other than Saturday, Sunday or a public holiday or bank
holiday in England and Wales or the United States of America;
6
"BUSINESS REPORTS"
means the Restricted Product Report and the Intellectual
Property Report;
"CLAIM"
a Warranty Claim and/or a Tax Deed Claim;
"CLOSING BALANCE STATEMENT"
means the statement of the net liabilities of the Company and
VDL prepared by the Sellers immediately prior to Completion;
"COMPANIES ACT"
the Companies Xxx 0000;
"COMPANY"
Kestra Limited, details of which are set out in PART 1 of
SCHEDULE 2;
"COMPLETION"
completion of the sale and purchase of the Shares in
accordance with CLAUSE 6;
"COMPLETION DATE"
the time and date originally set for Completion pursuant to
CLAUSE 6 or if the Completion is deferred pursuant to that
CLAUSE 6 the time and date to which Completion is deferred;
"COMPROMISE AGREEMENT"
means the Compromise Agreement between the Company and Xxxx
Xxxxxxx dated 6 April 1999;
"CONNECTED PERSON"
a connected person as defined in section 839 of the Taxes Act;
7
"CONSIDERATION"
the aggregate amount of US$9,040,012.21 (converted to
(pound)5,628,899.26) being the cash payable by the Purchaser
to the Sellers and 3i for the Shares;
"CONSULTANCY AGREEMENTS"
the consultancy agreements in the Agreed Form to be entered
into at Completion between the Company and each of Xx. Xxxxxx
and Xxxxxxxxx Xxxxxx;
"CONTRIBUTION AGREEMENT"
a contribution agreement dated 1 April 1999 and made between
the Warrantors and certain of the Sellers;
"COVENANTORS"
each of Xxxxxxx Xxxxx, Xxxx Xxxxxxx, Xxxxxxxxxxx Xxxxx Xxxxxxx
and MTD;
"DIRECTORS"
the persons listed as directors of the Company at the date of
this agreement in PART 1 of SCHEDULE 2;
"DISCLOSED"
fairly and clearly disclosed to the Purchaser in the
Disclosure Letter and for the purpose of this definition the
expression "FAIRLY AND CLEARLY" means that a matter shall be
disclosed only to the extent that it has been disclosed with
sufficient particularity to enable a purchaser to have a
reasonable understanding of the nature of the matters
disclosed and of the qualifications to the Warranties thereby
made;
"DISCLOSURE LETTER"
a letter of the same date as this Agreement in the Agreed Form
from the Warrantors to the Purchaser qualifying the
Warranties;
"ENVIRONMENT"
all or any of the air, water and land including air within
buildings and other natural or man-made structures above or
below ground;
"ENVIRONMENTAL LAW"
8
all statutes, statutory instruments, common law, directly
applicable provisions of treaties, regulations, directives (to
the extent that they have been implemented by legislation) and
other national and local laws (including part IIA of the
Environmental Protection Act 1990); all codes of practice and
guidance notes having mandatory effect and issued by any
supranational, national or local governmental authority; all
judgements, orders, instructions or awards of any court of
competent authority, in each case relating to the Environment
or the health of humans, animals or plants, as the same are in
force at the date of this Agreement but including for the
avoidance of doubt, Part IIA of the Environmental Protection
Act, 1990 as if the same was fully in force at the date
hereof;
"ENVIRONMENTAL PERMITS"
any permits, licenses, consents or other authorisations
required under Environmental Law for the carrying on of each
Group Company's operations and the occupation and use of the
Properties by the Group;
"ENVIRONMENTAL REPORTS"
all surveys, audits, investigations and reports relating to
the Properties and/or the Group's compliance with
Environmental Law and Environmental Permits;
"ESCROW RELEASE DATE"
the first anniversary of Completion;
"FRS"
a Financial Reporting Standard adopted or issued by the
Accounting Standards Board Limited;
"GROUP"
the Company and the Subsidiary;
"GROUP COMPANY"
any company within the Group;
"GROUP INTELLECTUAL PROPERTY"
the New Intellectual Property and the Acquired Intellectual
Property;
9
"GUARANTEED LOAN NOTES"
means the guaranteed loan notes (in the agreed terms) for an
aggregate principal amount of (pound)[ ] UK to be issued
by the Purchaser to certain of the Sellers;
"HEALTH AND SAFETY LAWS"
all statutes, statutory instruments, common law, directly
applicable provisions of treaties, regulations, directives (to
the extent that they have been implemented by legislation) and
other national and local laws (including the Health and Safety
at Work etc. Xxx 0000, the Management of Health Safety and
Welfare Regulations 1992); all codes of practice and guidance
notes having mandatory effect and issued by any supranational,
national or local government authority; all judgements,
orders, instructions or awards of any court or competent
authority, in each case relating to the health and safety of
those working for any Group Company (whether as employees or
otherwise or visiting the Property or being otherwise affected
by any Group Company or its servants or agents) as the same
are in force at the date of this Agreement;
"INITIAL CASH PAYMENT"
means the cash payment of $7,942,835.22 US to be made to the
Sellers on account of the Consideration pursuant to the
provisions of clause 4.1;
"INSPECT INDUSTRIAL ASSEMBLIES"
the examination of an article by means of analysis of energy
reflected from or transmitted through the article (or
examination of an article by substantially similar means)
which article is produced in a factory, workshop or similar
manufacturing facility;
"INTELLECTUAL PROPERTY"
patents, trade marks, rights in design (registered and
unregistered) copyright (including rights in computer
software), business or trade names and all other industrial or
intellectual property or other rights or forms of protection
of a similar nature or having similar effect in any part of
the world and rights in and in relation to them and, where
appropriate, applications for any of them and the right to
apply for any of them;
"INTELLECTUAL PROPERTY REPORT"
means the report on Intellectual Property prepared by the
Sellers Solicitors dated 1 April 1999;
10
"INVESTMENT AGREEMENTS"
those investment agreements dated 30th December 1996, 20th May
1998 and 2nd November 1998 made between the Company, 3i and
the Sellers;
"INVESTORS"
a holder of securities listed on a recognised stock exchange
(as defined in section 82(1) of the Income and Corporation
Taxation Act 1988) or of shares allotted under a prospectus
issued pursuant to the Business Expansion Scheme, provided
that such holding does not exceed five (5) per cent of any
class of securities of which the sound holding forms part;
"JOINT ACCOUNT"
the Joint interest bearing US dollar account in the joint
names of the Sellers' Solicitors and the Purchaser's
Solicitors to be dealt with in accordance with CLAUSE 5;
"KEY EMPLOYEE"
any director, officer, executive or senior manager of, or
other Senior Employee responsible for devising new products or
services or having regular access to trade secrets or
confidential information;
"KNOW HOW"
all inventions, designs, techniques and other processes and
information and know-how owned by the Sellers and/or used by
any member of the Group in connection with the Business;
"LEASE"
in relation to the Property the lease under which it is held
and any documents which are supplemental to that lease;
"LICENSED INTELLECTUAL PROPERTY"
University Software and any other Intellectual Property which
is licensed to a Group Company;
11
"LTCA"
the Landlord and Tenant (Covenants) Xxx 0000;
"MANAGEMENT ACCOUNTS"
the management accounts of each of the Company and the
Subsidiary dated 1 September 1998 to 28 February 1999;
"MTD"
Manchester Technology Developments Limited (registered number
3108263) whose registered office is a Xxxxxxx Xxxxx,
Xxxxxxxxxx Xxxxxxx Xxxx, Xxxxx Xxxxxx Xxxxx X00 0XX;
"NEW INTELLECTUAL PROPERTY"
means all Intellectual Property devised or created or acquired
by the Group since 31st December 1996;
"PENSION FUND"
the trustees of the pension fund of Victoria University of
Manchester;
"PROJECT TEAM"
the Purchaser's project team being each of Xxxxx Xxxxx, Xxxx
Xxxxx, Xxxxx Xxxxxx, Xxxxx Xxxxxx, Xxx Xxxxxxx, Xxxx
Xxxxxxxxx, Xxxxxx Xxxxxxxxx, Xxxxx Xxxx, Xxxxxxx Xxxx, and Xxx
Xxxx plus the Purchaser's Solicitors and
PriceWaterhouseCoopers;
"PROPOSED PRODUCTS"
the automated visual inspection system currently being
developed by the Company;
"PROPERTY"
the property listed in SCHEDULE 3;
12
"PURCHASER'S GROUP"
the Purchaser and its subsidiaries from time to time
including, after Completion, the Group;
"PURCHASER'S GROUP COMPANY"
any company within the Purchaser's Group;
"PURCHASER'S SOLICITORS"
Messrs. Xxxxxx & Whitney of Pillsbury Centre South, 000 Xxxxx
Xxxxx Xxxxxx, Xxxxxxxxxxx, XX 00000-0000;
"RELATED PERSONS"
the Sellers other than the Warrantors and the Pension Fund;
"RESTRICTED PERSONS"
those persons who are the Warrantors and/or Vuman;
"RESTRICTED PRODUCTS"
products of a type which up to the Completion Date have been
or are in the process of being designed, produced, marketed
and/or sold or otherwise dealt with in by or on behalf of the
Group in the ordinary course of the Business;
"RESTRICTED PRODUCT REPORT"
means the report in respect of the capabilities of the
restricted products dated 24 March 1999 and prepared by M A
Xxxxx and X X Xxxxxxx;
"RTPA"
the Restrictive Trade Practices Acts 1976 and 1977;
"SELLERS' ACCOUNTANTS"
KPMG, Xx Xxxxx Xxxxxx, Xxxxxxxxxx X0 0XX;
"SELLERS' REPRESENTATIVE"
13
Messrs. Eversheds Solicitors, Cloth Xxxx Xxxxx, Xxxxxxxxx
Xxxxxx, Xxxxx, XX0 0XX;
"SELLERS' SOLICITORS"
Messrs. Eversheds Solicitors, Cloth Xxxx Xxxxx, Xxxxxxxxx
Xxxxxx, Xxxxx, XX0 0XX;
"SENIOR EMPLOYEE"
an employee whose basic exceeds (pound)25,000;
"SERVICES"
services of a type which within the 24 months up to the
Completion Date have been provided and/or marketed by the
Sellers and/or Group Company in the ordinary course of the
Business carried on by the Company or the Subsidiary;
"SERVICE AGREEMENTS"
the service agreements in the Agreed Form to be entered into
at Completion between the Company and each of X. Xxxxx, X. X.
Xxxxxxx, Xxxxxx Xxxx, Xxxxxx Xxxxxx, Xxxxxx Xxxxxxxx and
Xxxxxx Xxxxx;
"SHARES"
1,217,052 Preference Shares of (pound)0.01 each,
62,815 "A" Ordinary Shares of (pound)1.00 each,
52,632 "B" Ordinary Shares of (pound)1.00 each,
and 32,895 Ordinary Shares of (pound)1.00 each
issued in the capital of the Company;
"SHARE OWNERSHIP WARRANTIES"
the warranties contained in paragraph 17 of Schedule 4;
"SOFTWARE AGREEMENT"
the Software Agreement dated 30 December 1996 entered between
(1) Victoria University of Manchester (2) Manchester
Technology Developments Limited (3) Visual Automation Limited
(4) the Company (as amended by a supplemental agreement);
"SSAP"
14
a Statement of Standard Accounting Practice issued by the
Accounting Standards Committee and adopted by the Accounting
Standards Board Limited;
"SUBSIDIARY"
the company, details of which are set out in PART 2 of
SCHEDULE 2;
"UNIVERSITY SOFTWARE"
the Software licensed by the Company from the University under
the Software Agreement;
"WARRANTIES"
the warranties made by the Warrantors in CLAUSE 7 in relation
to the statements set out in SCHEDULE 4;
"WARRANTORS"
each of the Covenantors (jointly and severally);
"WARRANTORS REPRESENTATIVE"
Xxxxxxx Xxxxx or such other person nomianted by the Warrantors
from time to time in writing to the Purchaser;
"WARRANTY CLAIM"
any claim which would (disregarding the provisions of CLAUSE
8) be capable of being made by the Purchaser against the
Warrantors for breach of any of the Warranties;
"WARRANTED DOCUMENTS"
means the documents referred to in paragraph 2.2 of Part 1 of
Schedule 4.
1.2 TAX DEFINITIONS
"EVENT"
an event as defined in the Tax Deed;
15
"FA"
the Finance Xxx 0000;
"TAX" OR "TAXATION"
tax or taxation as defined in the Tax Deed;
"TAX AUTHORITY"
a tax authority as defined in the Tax Deed;
"TAX DEED"
the tax deed to be entered into the Agreed Form;
"TAX DEED CLAIM"
a claim under the Tax Deed which would(disregarding the
provisions of Clause 8 of this Agreement or Clause 4 of the
Tax Deed) be capable of being made against the Covenantors
under the terms of the Tax Deed;
"TAXES ACT"
the Income and Corporation Taxes Xxx 0000;
"TGGA"
the Taxation of Chargeable Gains Xxx 0000;
"VAT"
United Kingdom value added tax;
"VATA"
the Value Added Tax Xxx 0000.
2 INTERPRETATION
2.1 IN THIS AGREEMENT:
2.1.1 the contents and clause headings are for convenience only and do not
affect its construction;
16
2.1.2 words denoting the singular include the plural and vice versa;
2.1.3 words denoting one gender include each gender and all genders.
2.2 In this Agreement, unless otherwise specified or the context otherwise
requires, a reference to:
2.2.1 a person is to be construed to include a reference to any individual,
firm, partnership, company, corporation, association, organisation or
trust (in each case whether or not having a separate legal
personality);
2.2.2 a document, instrument or agreement (including, without limitation,
this agreement) is a reference to any such document, instrument or
agreement as modified, amended, varied, supplemented or novated from
time to time;
2.2.3 a clause or schedule is a reference to a clause of or schedule to this
agreement and a reference to this agreement includes its schedules;
2.2.4 a paragraph is a reference to a paragraph of the schedule in which the
reference appears;
2.2.5 a statutory provision is to be construed as a reference to such
provision as amended, consolidated or re-enacted from time to time and
to any orders, regulations, instruments or other subordinate
legislation (and relevant codes of practice) made under the relevant
statute except to the extent that any amendment, consolidation or
re-enactment coming into force after the date of this agreement would
increase or extend the liability of any party to this agreement to any
other party;
2.2.6 any statement qualified by the expression "to the best of the
knowledge, information and belief of the Warrantors" or "so far as the
Warrantors are aware" or any similar expression shall be deemed to
include an additional statement that it has been made after due and
careful enquiry by each of the Warrantors of each other and of Xxxx
Xxxxxxx, Xxxxxxxxxxx Xxxxxx, Xxxxxx Xxxxxxxx, Xxxxxx Xxxxx, Xxxxx
Xxxxxxxxx, Xxxxxx Xxxx, the Seller's Solicitors and the Seller's
Accountants but no further persons; and
2.2.7 all obligations entered into by two or more persons are joint and
several unless expressly stated to the contrary.
3 SALE AND PURCHASE
3.1 Each of the Sellers and 3i shall sell and the Purchaser shall purchase
the Shares (shown opposite the respective Sellers and 3i's name in
Schedule 1) with effect from Completion.
3.2 Each of the Sellers severally covenants with the Purchaser that:
17
3.2.1 the full legal and beneficial interest in his Shares will be
transferred to the Purchaser at Completion on the terms set out in this
Agreement;
3.2.2 his Shares will be sold free from all claims, liens, charges, equities,
encumbrances and adverse rights of any description and together with
all rights attached to them at the date of this agreement or
subsequently becoming attached to them;
3.2.3 he shall (and shall each procure that any necessary third party shall)
at his own expense, do, execute and perform all such further acts,
deeds, documents and things as the Purchaser may reasonably request to
vest all of his shares in the Purchaser and as may be reasonably
requested from time to time in order to implement the provision of this
Agreement.
3.3 Each of the Sellers waive irrevocably (and shall each procure the
waiver of) all restrictions on transfer (including pre-emption rights)
which may exist in relation to their Shares or the shares in any other
Group Company under the articles of association of any Group Company or
otherwise.
3.4 The Purchaser shall not be obliged to complete the purchase of any of
the Shares unless the Sellers and 3i shall at the same time complete
the sale of all of the Shares but completion of the purchase of some of
the Shares will not affect the rights of the Purchaser with respect to
the purchase of the other Shares.
3.5 3i agrees with the Purchaser that:
3.5.1 the full legal and beneficial interest in the 3i Shares will be
transferred to the Purchaser at Completion on the terms set out in this
Agreement;
3.5.2 the 3i Shares will be sold free from all claims, liens, charges,
equities, encumbrances and adverse rights of any description and
together with all rights attached to them at the date of this
agreement;
3.5.3 3i waives irrevocably all restrictions on transfer (including
pre-emption rights) which may exist in relation to the Shares.
4 CONSIDERATION
4.1 The Consideration for the sale of the Shares shall be the sum of
US$9,040,012.21:
4.2 At Completion the Purchaser shall on account of the Consideration:-
4.2.1 pay the Initial Cash Payment which shall be apportioned between the
Sellers and 3i in the proportions set out opposite their names in
Schedule 1;
18
4.2.2 issue to the Sellers the number of Guaranteed Loan Notes set out
opposite the name of the relevant Seller in Schedule 1;
4.2.3 pay the Retention Fund into the Joint Account pursuant to the
provisions of clause 5.
The Initial Cash Payment shall be payable to the Sellers and 3i (as
appropriate) in the amounts set out next to each of their names in
Schedule 1. These sums shall be paid by telegraphic transfer to the
account in the name of the Seller's Solicitors with the National
Westminster Bank Plc, sort code 60-60-05 Eversheds Clients Account No
140/00/00000000, the Sellers' Solicitor's Account (receipt for such
amount being an absolute discharge to the Purchaser of its obligation
to pay such amount).
4.3 The Purchaser shall also subscribe for ordinary shares in the capital
of the Company to the value of UK(pound)1,471,748, with the intention
that the Company use this subscription monies to repay all principal
and interest outstanding to 3i and also pay a dividend to the
preference share holders. The subscription by the Purchaser shall at
all times be condition upon Completion.
5 RETENTION AND ESCROW ACCOUNT
5.1 As security for the Warrantors' obligations under the Warranties and
the Tax Deed, the Sellers hereby agree with the Purchaser that out of
the cash consideration payable pursuant to CLAUSE 4.1 the Purchaser
shall pay in aggregate the sum of US$407,881.80 ("RETENTION FUND") such
Retention Fund representing the aggregate amount of each of the sums
contributed to the Retention Fund by the Sellers as set out opposite
their names in Schedule 1, into a joint interest bearing deposit
account ("JOINT ACCOUNT") with an agreed bank in the United States, (or
elsewhere as the Warrantors and the Purchaser may agree) opened in the
names of the Sellers' Solicitors and the Purchaser's Solicitors.
Pending the opening of such account, the Retention Fund shall be held
by the Seller's Solicitors. The Retention Fund shall be dealt with in
accordance with CLAUSE 5.2.
5.2 The Sellers and the Purchaser hereby irrevocably instruct their
respective Solicitors (and acknowledge that their solicitors may rely
upon and act on such instruction) to make payment out of the Joint
Account:
5.2.1 to the Purchaser of any sums which may be due to it as a result of any
Claim by the Purchaser under or arising out of or in connection with
this Agreement (or pursuant to clause 5.6 below), the Warranties or the
Tax Deed having been Settled in favour of the Purchaser (as defined in
CLAUSE 5.3) within 7 days of such matter having been Settled, together
with interest accrued on the monies so paid to the Purchaser. Any sums
paid pursuant to this clause 5.2.1 shall be made to the Purchasers
Solicitors Trust Account at US Bank National Association, 000 0xx
Xxxxxx Xxxxx, Xxxxxxxxxx, XX 00000, ABA Routing Number 000000000;
Account name Xxxxxx & Whitney Trust Account; Account Number
1602-3010-8765; marked "Ref:
19
310473/41:T Xxxxxx"; or by such other method as may be agreed between
the parties. If made to the Purchasers Solicitors, and marked as
aforesaid, such payments will be a good and sufficient discharge to the
Sellers who will not be further concerned as to the application of
monies so paid;
5.2.2 (Subject to CLAUSE 5.2.4) on the next Business Day following the Escrow
Release Date to the Sellers' Solicitors at the Sellers' Solicitors
Account or such other account nominated by the Sellers' Solicitors in
writing to the Purchaser on behalf of such of the Sellers as are
entitled thereto the balance if any, standing to the credit of such
Retention Fund together with interest accrued on the monies so paid to
the Sellers' Solicitors;
5.2.3 to the Sellers' Solicitors of any sums being the subject of any Claim
by the Purchaser under or arising out of or in connection with this
Agreement, the Warranties or the Tax Deed which is Settled in favour of
the Warrantors on or after to the Escrow Release Date, together with
interest accrued on such monies;
5.2.4 in the event that the Purchaser makes a claim or claims under or
arising out of or in connection with this Agreement the Warranties or
the Tax Deed and a writ is issued in respect of such claim or claims
("the Notice Date") then any specific amount or amounts claimed under
an issued writ ("the Initial Claim Amount" or "the Final Claim Amount"
if different) shall be retained in the Retention Fund (subject to
clause 5.2.5) until the matter in respect of which the writ was issued
has been Settled PROVIDED THAT in the event that such a writ is issued,
but no statement of claim is filed on or before the date six months
after the Escrow Release Date, then the specific amounts claimed under
the writ issued shall be released to such of the Warrantors as are
entitled thereto in accordance with CLAUSE 5.2.3 but such release of
funds in the Joint Account shall be without prejudice to the
Purchaser's rights against the Warrantors for breach of any of the
Warranties;
5.2.5 If within 21 Business Days of the Notice Date (i) the Warrantors
Representative has given written notice to the Purchaser that the
Initial Claim Amount is not acceptable to the Warrantors (the
"Warrantor Notification Date") and (ii) the Warrantors and the
Purchaser have not agreed a mutually acceptable Initial Claim Amount,
the Purchaser and the Warrantors shall seek a written opinion (the
"Opinion") from a mutually acceptable counsel on the amount which he
considers the Purchaser would be awarded by a competent court in
respect of such claim (the "Final Claim Amount"). The Opinion shall be
binding on the Purchaser and Warrantors, in relation to the
determination of the amount to be retained in the Retention Fund, and
shall be given by the relevant counsel as an expert and not as an
arbitrator. The costs and disbursements of such counsel in preparing
the Opinion shall be borne equally by each of the Warrantors and the
Purchaser. If no agreement can be reached on a mutually acceptable
counsel within 14 Business Days of the Warrantor Notification Date in
accordance with this clause 5.2.5, the matter shall be referred to the
President of the law Society of England and Wales, on the application
of either party, who shall appoint a suitably qualified counsel.
20
5.2.6 a Claim shall be regarded as "Settled" if either:
(a) the Warrantors and the Purchaser (or their respective
Solicitors) shall so agree in writing, such written agreement
not to be unduly withheld or delayed following any oral
agreement between the parties; or
(b) a Court has awarded judgement in respect of the claim and
either no right of appeal lies in respect of such judgement or
the parties are debarred whether by passage of time or
otherwise from exercising any such right of appeal or the
parties in whose favour the right of appeal subsists fails to
lodge such appeal within 28 days of such judgement;
5.3 The Warrantors and the Purchaser shall as and when necessary give such
further instructions to their respective Solicitors as may be required
in order to procure compliance with CLAUSE 5.2 hereof;
5.4 Where the Purchaser has a Claim which has been Settled (as defined
above) in its favour then the Purchaser shall be entitled to require
payment of the full sum due to it from the Warrantors, from the
Retention Fund and such payment shall be made in accordance with CLAUSE
5.2.1 without having regard to any individual monetary limitations on
the Warrantors financial liability.
5.5 In the event that the moneys in the Retention Fund are insufficient to
pay in full any moneys due to the Purchaser, the Purchaser shall be
entitled to pursue the Warrantors jointly or severally for the balance
of the moneys due to it.
5.6 In the event that any sum due to the Company from Xxxx Xxxxxxx pursuant
to Clause 5.2. of the Compromise Agreement remains unpaid 30 days after
the Company has given written notice to Xxxx Xxxxxxx that such sum is
due, then the Purchaser shall be entitled to discharge Xxxx Xxxxxxx'x
liability to the Company (by making a corresponding payment to the
Company) and recover the amount so paid to the Company out of the
Retention Fund from the monies contributed to the Retention Fund by
Xxxx Xxxxxxx and Xxxx Xxxxxxx. For the avoidance of doubt nothing in
this Clause 5.6 shall in anyway increase the total amount of the
liability which Xxxx Xxxxxxx would have under Clause 5.2 of the
Compromise Agreement.
6 COMPLETION
6.1 TIME AND PLACE OF COMPLETION
Completion shall take place at either the offices of the Purchaser's
Solicitors or the Seller's Solicitors immediately after signing of this
Agreement, where the matters set out in SCHEDULE 5 shall apply.
21
6.2 FAILURE TO COMPLY
If the Sellers shall fail fully to comply with any of their obligations
under SCHEDULE 5 on the date fixed for Completion pursuant to CLAUSE
5.1, the Purchaser shall, without prejudice to any other rights or
remedies which it may have, be entitled to:
6.2.1 defer Completion with respect to some or all of the Shares to a date
not more than 28 days after that date (in which case the provisions of
this CLAUSE 6.2 shall also apply to Completion as so deferred); or
6.2.2 rescind this Agreement; or
6.2.3 proceed to Completion so far as is practicable.
7 WARRANTIES
7.1 The Warrantors jointly and severally warrant and represent, to the
Purchaser (for itself and as trustee for each Group Company) in the
terms of the statements set out in SCHEDULE 4 as at the Completion Date
with reference to the facts which then exist.
7.2 3i hereby warrants to the Purchaser in the terms of and the warranties
set out in paragraph 17.4 of Schedule 4.
7.3 The Sellers acknowledge that the Purchaser in entering into this
Agreement has relied on the Warranties and the Purchaser acknowledges
to the Sellers and 3i that no reliance has been placed by it on any
other warranty or representation.
7.4 The Sellers agree with the Purchaser (for itself and as trustee for
each Group Company) (in the absence of fraud) to waive any right or
remedy which the Sellers may have against any Group Company or (save in
respect of the Contribution Agreement) any present or former director,
employee or agent of any Group Company in connection with any
representation, warranty, agreement or statement by any such person in
relation to this Agreement and any other document to be executed in
connection with it.
7.5 Each of the Warranties shall be construed as a separate and independent
provision.
7.6 Save in the event of fraud none of the parties shall be entitled to
rescind the Agreement after Completion.
7.7 Save as otherwise provided in this Agreement, no claim in respect of or
arising out of the Warranties or any other provision of this Agreement
shall be limited or otherwise affected and no amount recoverable in
respect of any breach shall be reduced by any knowledge (actual or
constructive) which the Purchaser has or is deemed to have in relation
to any Group Company.
22
7.8 The Purchaser warrants to each of the Sellers and 3i that:
7.8.1 the Purchaser has and has duly exercised all power and authority
necessary for it to enter into and perform its obligations under this
Agreement, to constitute, issue and perform its obligations under or in
respect of the Tax Deed and every other document or obligation to be
entered into or performed by it under or pursuant to this Agreement;
7.8.2 it does not require (or has obtained) the consent of any person to
enter into and perform the matters referred to in the preceding CLAUSE
7.8.1;
7.8.3 it has in all other respects taken all action necessary to authorise
the execution, delivery and performance of this Agreement, the Tax Deed
(subject to completion taking place) by it under or pursuant to this
Agreement and all the same to, or will when executed, constitute
lawful, valid obligations binding upon the Purchaser in accordance with
their respective terms;
7.8.4 the execution, delivery and performance of or compliance with the
provisions of this Agreement and the Tax Deed, will not cause or
constitute any breach or default of or under any constitutional
documents of the Purchaser or of any agreement relating to any
borrowing of any kind or of any security instrument issued or granted
by the Purchaser;
7.9 The liabilities of the Warrantors hereunder shall be limited in
accordance with the provisions of Clause 8;
7.10 The Purchaser confirms to the Warrantors, that having made reasonable
enquiry of the Project Team only, it is not actually aware of any
matter which would at the date of this Agreement give rise to an actual
Claim.
8 WARRANTY LIMITATIONS
8.1 MAXIMUM AMOUNT OF LIABILITY
8.1.1 The aggregate liability of the Warrantors (save in relation to Xxxx
Xxxxxxx) for all Claims shall be limited to the aggregate consideration
received by such Warrantors (other than MTD) and each of the Related
Persons and MTD (in respect of the sale of its Ordinary Shares only)
pursuant to this Agreement. Xxxx Xxxxxxx shall only be liable in
relation to a Claim for an amount up to the consideration received by
him and Xxxx Xxxxxxx as set out opposite their names in Schedule 1.
8.1.2 Where the Trustees of the Pension Fund of Victoria University are
trustees and are selling shares in such capacity, then their respective
aggregate liability in respect of all claims under this Agreement shall
be limited (so far as such liability would otherwise arise in
consequence of the sale of such shares) to the amount of the relevant
trust fund or estate for the time being
23
in their hands and available to them to satisfy such liability. The
Trustees shall be discharged from all liability under this Agreement if
any continuing trustee or personal representative appointed in their
place has entered or enters into a direct covenant with the Purchaser
may reasonably require to be bound by an observe and perform the terms
of this Agreement.
8.2 MINIMUM AMOUNT OF LIABILITY
The Warrantors shall not have to make a payment in respect of a Claim
unless the aggregate liability in respect of such Claim (when
aggregated with the Warrantors' liability in respect of all other
Claims made by the Purchaser or which would have been made but for the
provisions of this Clause 8.2) (but excluding related interest and
costs) in respect of all Claims exceeds (pound)50,000, provided that if
such aggregate liability exceeds that amount, then the Warrantors shall
be liable for the whole of the liability and not just the excess of
such aggregate liability above the sum of (pound)50,000.
8.3 TIME LIMITS
No claim shall be made against the Warrantors unless notice in writing
is given to the Sellers' Representative by the Purchaser (giving
reasonable details (having regard to information available to Purchaser
at the time when the notice is given) of the specific matter in respect
of which such Claim is made):-
8.3.1 on or before 31 December 2001 in respect of a Warranty Claim (other
than in respect of a Warranty Claim relating to Taxation); or
8.3.2 on or before the date falling 6 years after the end of the current
accounting period of the Company in respect of a Warranty Claim
relating to Taxation or a Tax Deed Claim and in each case unless legal
proceedings in respect of such Claim are commenced and served upon the
Warrantors within nine months after such written particulars have been
given to the Warrantors;
or if a Claim is contingent, then if later within nine months after
such Claim ceases to be contingent.
8.4 EXCLUSION OF CLAIMS
The Warrantors shall have no liability in respect of any Warranty Claim
to the extent arising from any matter, act, omission or circumstance
Disclosed in the Disclosure Letter or in the documents annexed to it.
For the avoidance of doubt, nothing in the Disclosure Letter shall, or
shall be deemed to, be disclosed against warranty 2.4 of Part 1 of
Schedule 4.
8.5 NON-APPLICABILITY IN THE EVENT OF FRAUD
24
The exclusions and limitations set out in this CLAUSE 8 shall not apply
in relation to Claims which are the consequence of fraud, or wilful
concealment by the Sellers.
8.6 None of the limitations set out in this CLAUSE 8 shall apply in respect
of any Claim by the Purchaser for breach of the Share Ownership
Warranties.
8.7 The Warrantors shall have no liability in respect of any Warranty Claim
relating to any matter to the extent that the Accounts or Management
Accounts make a specific provision or reserve for the matter giving
rise to the Warranty Claim.
8.8 Where the same fact or circumstances could give rise to more than one
Warranty Claim or a Tax Deed Claim, the Purchaser shall not be entitled
to recover more than once for the same loss, so that, in calculating
the amount payable for breach of any of the Warranties or in respect of
the Tax Deed account shall be taken of any amount paid under the other
Warranties, or in respect of a Tax Deed Claim in respect of the same
facts or circumstances.
8.9 The Warrantors shall not be liable in respect of any Warranty Claim if
and to the extent that:
(a) such breach or Claim occurs or increases as a result of the
passing of, or changing, after the date of this Agreement, any
legislation with retrospective effect; or
(b) such liability would not have arisen but for a change after
Completion in the Accounting Policies used in the Accounts
PROVIDED THAT this limitation shall not apply where such
change is necessary to conform with UK generally accepted
accounting policies; or
(c) such liability would not have arisen but for the voluntary act
or omission of the Purchaser after Completion which (i) is
outside the ordinary course of trade of the Group as carried
on at Completion (and is not required pursuant to a legally
binding commitment entered into prior to Completion or any
requirement of law); and (ii) which the Purchaser actually
knew or on the basis of the information Disclosed ought
reasonably to have known would rise to a Warranty Claim;
(d) to the extent that it relates to any loss for which the
Purchaser or any Group Company (as the case may be) actually
recovered from an insurer;
(e) which would not have arisen but for anything expressly done or
provided to be done or omitted to be done pursuant to this
Agreement or which is otherwise done or omitted to be done at
the specific written request or with the written consent of
the Purchaser provided that the Purchaser should on the basis
of information Disclosed, have been aware that this would (or
would be likely to) have arisen;
25
(f) to the extent that it relates to the Intellectual Property
except only for such Claim as the Purchaser may have in
consequence of any breach by the Warrantors of the Warranty
contained in paragraphs 2.2, 10.3, 11 or 13 of Part 1 of
Schedule 4;
8.10 Notwithstanding the provisions of this Agreement, the Warrantors shall
not be liable in respect of any Warranty Claim arising under the
Warranties at Part 2 of Schedule 4 to this Agreement to the extent
provided in paragraphs 4.1.1 to 4.1.14 inclusive of the Tax Deed.
8.11 In relation to any Warranty Claim, and without prejudice to the
validity of the Warranty Claim, the Purchaser shall allow the
Warrantors and their professional advisers (at the Warrantors' own
cost) to investigate the matter or circumstance alleged to give rise to
the Warranty Claim and the Purchaser shall at the request and cost of
the Warrantors give such assistance as the Warrantors or their
professional advisers may reasonably request for the purposes of such
investigation, including upon reasonable notice and in normal business
hours, access to and copies of any documents or other information in
the possession of the Purchaser and (at reasonable times and upon
reasonable notice) to enable the Sellers and/or their professional
advisers to interview relevant personnel PROVIDED ALWAYS THAT any such
rights of access and/or copying of documentation shall be limited to
information concerning the Warranty Claim and shall not, for the
avoidance of doubt, extend to any access to personnel, information or
documentation the subject of legal or other privilege or which would
otherwise not be subject to the Rules of the Supreme Court in respect
of discovery.
8.12 Any amount recovered by the Purchaser from the Warrantors pursuant to
Claim shall be treated as a reduction in the price received by the
Warrantors for the Shares held by them and/or as a reduction received
in consideration of giving the Warranties or covenants given by them as
the case may be.
8.13 CONTINGENT CLAIMS
The Warrantors shall not be liable for any Claim to the extent that it
relates to a Claim based on a contingency until the contingency has
become actual save that such a Claim, if made as a contingent claim
prior to the expiry date of the relevant time limited contained in
Clause 8.3, shall survive until the earlier of the date upon which the
contingency becomes actual and the seventh anniversary of Completion.
8.14 RECOVERY AGAINST THIRD PARTIES
If the Warrantors have paid to the Purchaser any amount in respect of a
Warranty Claim and the Company or the Purchaser subsequently receives
or recovers from a third party (including an insurer) a sum which is
directly referable to such Warranty Claim, the Purchaser shall, as soon
as reasonably practicable following such recovery, repay to the
Warrantors as have made such payment to the Purchaser the lesser of the
amount received from that Warrantor and the
26
amount received from the third party in respect of such Warranty Claim,
in each case less all reasonable costs incurred by the Purchaser in
making such recovery.
8.15 CONDUCT OF WARRANTY CLAIMS
8.15.1 If the Purchaser receives notice of a claim by a third party ("Third
Party Claim") against the Company, the Subsidiary or the Purchaser
which constitutes or which the party obtaining notice of such matter,
fact or circumstance ought reasonably to have known is likely to give
rise to a Warranty Claim on the basis of information Disclosed the
party receiving such notice shall notify the other(s) as soon as
reasonably practicable, and not make any admission of liability,
agreement or compromise in respect of such claim, without consultation
with the other parties and the Purchaser shall, subject to the
indemnity referred to in CLAUSE 8.15.2 below take all such steps as the
Warrantors' Representative may reasonably require to resist, defend or
otherwise compromise such Third Party Claim(including the appointment
of solicitors nominated by the Warrantors) PROVIDED ALWAYS nothing in
this CLAUSE 8.15.1 shall require the Purchaser to take or omit to take
any action which, in the case of a, b or c below, following an opinion
of Counsel (as set forth in this clause), is deemed to be or have (as
appropriate):
(a) frivolous;
(b) vexatious;
(c) on the balance of probabilities has less than a 50% change of
success; or
(d) in the Purchaser's reasonable opinion, would or would be
likely to prejudice or materially interfere with the carrying
on of the business of the Group or prejudice or materially
interfere with the Group or the Purchaser's relationship with
any tax authority;
by reference in (a), (b) or (c) above, to an opinion obtained from a
reputable Counsel of not less than five years standing practicing in
London. In obtaining such opinion the Warrantors Representative and the
Purchaser shall agree upon the identity of the barrister to be
instructed (or in default of agreement to be appointed by the President
of the Bar Council of England and Wales) and shall in addition agree
upon the instructions to be provided.
8.15.2 The Warrantors shall indemnify and keep indemnified the Purchaser
against and in respect of all costs incurred, charges, expenses,
liabilities and damages for which the Purchaser or the relevant member
of the Purchaser's Group becomes liable in respect of any action which
is required to be taken by the Warrantors (or any of them) under CLAUSE
8.15.1.
8.15.3 The Purchaser shall keep the Warrantors' Representative informed of the
progress and the defence of any Third Party Claim and shall consult
with and (subject always to the proviso in CLAUSE 8.15.1 above) shall
take such action as the Warrantors' Representative may reasonably
require in accordance with CLAUSE 8.15.1 above.
27
8.16 The Purchaser acknowledges that nothing in this Agreement shall take
away from its common law duty of mitigation.
9 RESTRICTIVE COVENANTS
9.1 RESTRICTIONS
Each of the Restricted Person(s) other than Xxxx Xxxxxxx severally
undertakes to and covenants with the Purchaser that he will not either
on his own account or jointly with, or as manager, agent, officer or
otherwise on behalf of, any other person, directly or indirectly:
9.1.1 for a period of 24 months from Completion carry on or be engaged or
interested in any business in the United Kingdom, Europe, North
America, Latin America, or the rest of the world which competes with
the Business save that it may hold (alone or when aggregated with the
holdings of any other Connected Person of the Restricted Persons) for
investment up to 5 percent in aggregate of any class of securities
listed or traded on a recognised investment exchange;
9.1.2 (without limiting the generality of CLAUSE 9.1.1) for a period of 24
months from Completion canvass, solicit or approach on behalf of a
business which competes with the Business any person for the purpose of
offering to that person Restricted Products or supply on behalf of a
business which competes with the Business to any person who was:
(a) provided with Restricted Products (including without
limitation Restricted Products provided for alpha or beta
testing or evaluation purposes) by the Company or any other
Group Company at any time during the 24 months up to and
including Completion; and
(b) negotiating with the Company or any other Group Company for
the supply of Restricted Products (including without
limitation Restricted Products provided for alpha or beta
testing or evaluation purposes) at any time during the year up
to and including Completion;
9.1.3 (without Limiting the generality of CLAUSES 9.1.1 and 9.1.2) for a
period of 24 months from Completion solicit or entice away or endeavour
to solicit or entice away from the Company or any other Group Company
any Senior Employee and/or any Key Employee with a view to inducing
that person to leave such employment and to act for another employer
which competes with (or intends to compete with) the Company or any
Group Company;
9.1.4 at any time from Completion use the name "Kestra" or any similar name
or any variation of it which is likely to be confused with it in
connection with any business which competes with the Business;
28
9.1.5 at any time after Completion disclose (save to the extent required by
law) or use, for his own benefit or that of any other person, any
confidential information which is in his possession concerning the
business or affairs of the Company or any other Group Company or of any
person having dealings with the Company or any other Group Company.
9.1.6 at any time after Completion use the colour purple in conjunction with
any product which is or could reasonably be construed as being a
colourable imitation of any of Restricted Products.
9.2 REASONABLENESS
The restrictions in CLAUSE 9.1 are considered to be reasonable by the
parties for the legitimate protection of the business and goodwill of
the Company and each Group Company but each of them is distinct and
severable from the others and if at any time one or more of such
restrictions is determined to be unenforceable (whether wholly or to
any extent) the enforceability of the remaining restrictions (or the
same restrictions to any other extent) shall not in any way be affected
or impaired.
9.3 The restrictions in CLAUSE 9.1 are given to the Purchaser for itself
and as trustee for the Company and each other Group Company and each of
the Restricted Persons agrees that he will at the request and cost of
the Purchaser enter into a further agreement with the Company and/or
any relevant Group Company pursuant to which the Restricted Persons
will accept restriction corresponding to the restriction to this
Agreement (or such of them as the Purchaser in its absolute discretion
shall deem appropriate). In exercising any right as trustee for the
Company (or any other Group Company) under this Agreement, the
Purchaser shall be entitled to limit the action it takes to such action
as it may, in its absolute discretion, consider reasonable.
9.4 Each of the Restricted Persons other than Xxxx Xxxxxxx severally
undertakes with the Purchaser that he will for a period of 30 months
after Completion as soon as practicable refer to the Purchaser all
enquiries which it receives from customers relating to the Business.
10 INFORMATION AND CONFIDENTIALITY
Each of the Sellers severally undertakes to the Purchaser:
10.1 that he will at any time and from time to time after Completion at the
reasonable request of the Purchaser give to the Purchaser on request
all information in his possession concerning the dealings, transactions
or affairs of the Company and each member of the Group and all Know-
How; and
10.2 that he will not at any time after the date hereof take away, or
(directly or indirectly) make use of or disclose or permit to be
disclosed to any person (except as may be necessary to comply with any
statutory obligation or order of any court or statutory tribunal of
competent
29
jurisdiction, and only insofar as is strictly required by any such
statutory obligation or order) any of the Know How, or any confidential
information in any way relating to any clients, products, customers,
suppliers, agents or any other persons who have or have had any
dealings with the Group in relation to the Business ("CUSTOMER
INFORMATION") and each Seller shall take all reasonable measures to
ensure that no person make use of or disclose to any other person any
of the Know How or Customer Information unless:
10.2.1 such Know-How or Customer Information has entered the public domain
otherwise than by reason of the act or default of the Seller; or
10.2.2 such Know-How or Customer Information is provided after Completion to
the Sellers or 3i by any third party who is under no obligation of
confidentiality to the Purchaser or any member of the Purchaser's Group
or the Group.
11 GUARANTEE
GUARANTEE BY GUARANTOR
The provisions of Schedule 7 will take effect as if set out herein.
12 ANNOUNCEMENTS
Each of the parties undertakes that it shall not make any announcement
or issue any circular or other publicity relating to the existence or
subject matter of this Agreement without it being approved in writing
by the Purchaser and the Warrantors' Representative as to its consent,
form and manner of publication (such approval not to be unreasonably
withheld or delayed).
13 OTHER PROVISIONS
13.1 COSTS
Each of the parties shall pay its own costs and expenses (including
legal fees and VAT (if any)) incurred by it in connection with the
negotiation, preparation and execution of this Agreement and the
completion of the transactions contemplated by this Agreement.
13.2 POST-COMPLETION
This Agreement shall remain in full force and effect after Completion
in respect of all obligations, agreements, covenants and undertakings
contained in or implied by this agreement which have not been done,
observed or performed at or prior to Completion and in respect of all
warranties, representations and indemnities contained in this
Agreement.
13.3 VARIATION
30
No variation of this Agreement shall be effective unless agreed in
writing by or on behalf of each of the parties.
13.4 ENTIRE AGREEMENT
This Agreement and any documents referred to in it contain the entire
Agreement and understanding between the parties in relation to the
matters contemplated by this Agreement and supersede all previous
agreements between the parties in relation to such matters provided
that the provisions of this clause 13.4 and clause 8 shall not exclude
any liability which the Sellers or 3i would otherwise have to the
Purchaser or any right which the Purchaser may have to rescind this
Agreement in respect of any statements made fraudulently by the Sellers
or 3i prior to the execution of this Agreement.
13.5 WAIVERS AND REMEDIES
13.5.1 Save as provided in Clause 8 no failure or delay to exercise, or other
relaxation or indulgence granted in relation to, any power, right or
remedy under this Agreement of any party shall operate as a waiver of
it or impair or prejudice it nor shall any single or partial exercise
or waiver of any power, right or remedy preclude its further exercise
or the exercise of any other power, right or remedy.
13.5.2 All rights of each of the parties contained in this Agreement are in
addition to all rights vested or to be vested in it pursuant to common
law or statute.
13.6 SEVERABILITY
Each of the provisions of this Agreement is distinct and severable from
the others and if at any time one or more of such provisions is or
becomes invalid, unlawful or unenforceable (whether wholly or to any
extent), the validity, lawfulness and enforceability of the remaining
provisions (or the same provision to any other extent) shall not in any
way be affected or impaired.
13.7 SUCCESSORS
This Agreement shall be binding on and enure to the benefit of each
party and its lawful successors and permitted assigns.
13.8 ASSIGNMENT
This Agreement and the rights and obligations set out herein shall not
be assignable in whole or in part save that the Purchaser may assign
any of its rights ("the Rights") to any company associated with the
Purchaser
31
PROVIDED THAT:-
13.8.1 before such assignee ceases to be associated with the Purchaser it will
first reassign the Rights to the Purchaser or any other company
associated with the Purchaser and the Rights shall cease to be
enforceable by such assignee with effect from the date it ceases to be
associated with the Purchaser; and
13.8.2 the liability of the Sellers in respect of the Rights which are
assigned shall be no greater than would have been the case had no such
assignment taken place.
13.9 COUNTERPARTS
This Agreement may be executed in any number of counterparts, each of
which shall be deemed to be an original and which shall together
constitute one and the same Agreement.
14 NOTICES
14.1 Each party may give any notice or other communication under or in
connection with this Agreement by letter or facsimile transmission
addressed to any other party. Any notice which the Purchaser gives to
the Sellers' Representative shall be deemed to have been given to each
Seller. The address for service of each party shall be the address set
out in CLAUSE 14.3 or such other address within the United Kingdom for
service as the addressee may from time to time notify to the other
parties for the purposes of this clause.
14.2 Any such communication will be deemed to be served:
14.2.1 if personally delivered, at the time of delivery and, in proving
service, it shall be sufficient to produce a receipt for the notice
signed by or on behalf of the addressee;
14.2.2 if by letter, at noon on the Business Day after such letter was posted
(or, in the case of airmail, 5 Business Days after such letter was
posted) and, in providing service, it shall be sufficient to prove that
the letter was properly stamped first class (or airmail), addressed and
delivered to the postal authorities; and
14.2.3 if by facsimile transmission the Business Day following the day of
transmission and provided that a copy of the fax is also sent to the
other party by first class pre-paid recorded delivery post (or airmail)
by way of confirmation and, in proving service, it shall be sufficient
to produce a transmission report from the sender's facsimile machine
indicating that the facsimile was sent in its entirety to the
recipient's facsimile number.
14.3 Details of each party for service of notice are as follows:
14.3.1 THE PURCHASER
32
c/o THE PURCHASER'S SOLICITORS With copy to:
Name: Xxxxxx & Xxxxxxx Cyberoptics Corporation
Address: Veritas House, 125 Finsbury Address: 0000 Xxxxxx Xxxxx Xxxxx
Xxxxxxxx, Xxxxxxxxxxx, XX 00000, XXX
Xxxxxx XX0X 0XX
Fax No: 0000-000-0000
Tel No: 0000-000-0000 Tel: 000 000 000 0000
Attention: J.R. Xxxxx/A. Rimmington Attention: X. Xxxxx/X. Xxxxx
14.3.2 THE SELLERS
c/o THE SELLERS' REPRESENTATIVE With copy to:
Name: Eversheds the Warrantor's Representatives
Address: Cloth Hall Court, Address: Kent Xxxxx Xxxxxxx
Xxxxxxxxx Xxxxxx, Xxxxxxxxx Xxxx
Xxxxx XX0 0XX North Rigton LS17 0DS
Fax No: 0000 000 0000
Tel No: 0000 000 0000 Tel: 00000 000 000
Attention: Xxxx Shinwell (Ref: C.JDS) Attention: Xxxx Xxxxx
14.3.3 3i Group Plc
Name: The Regional Director
Address: Xxxxxxx Xxxxx, 00 Xxxxxx Xxxxxx, Xxxxxxxxxx, X0 0XX
Fax No: 0000 000 0000
Tel No: 0000 000 0000
15 LAW AND JURISDICTION
15.1 This Agreement, and all disputes or claims arising out of or in
connection with it, shall be governed by and construed in accordance
with English law.
33
15.2 The parties irrevocably and unconditionally agree that the High Court
of Justice in England shall have non-exclusive jurisdiction over all
disputes or claims arising out of or in connection with this Agreement.
15.3 The Purchaser agrees that any legal action or proceedings against it
arising out of or in connection with this Agreement, the Tax Deed or
any other document entered into pursuant to the terms of this
Agreement, including any writs, summonses, judgments or other notices
of or in any legal process, shall be sufficiently served upon it if
delivered to either (a) the Purchaser at the address listed on page 1
of this Agreement; or (b) any person for the time being held out as
being a partner within the London office of the Purchaser's Solicitors;
and anything so served shall be deemed to be served immediately the
same is so delivered.
15.4 The Sellers' jointly and severally, and 3i for its own part only, agree
that any legal action or proceedings against them arising out of or in
connection with this Agreement, the Tax Deed or any other document
entered into pursuant to the terms of this Agreement, including any
writs, summonses, judgments or other notices of or in any legal
process, shall be sufficiently served upon it if delivered to either
(a) the Sellers and 3i at the addresses listed on in Schedule 1 to this
Agreement; or (b) in respect of the Sellers only any person for the
time being held out as being a partner within the Leeds office of the
Sellers' Solicitors; and anything so served shall be deemed to be
served immediately the same is so delivered.
IN WITNESS of which this Agreement has been duly signed and delivered on the
date written at the beginning of this Agreement.
34
Schedules of names and allocation among selling shareholder, property and
company locations will be submitted supplementally to the Securities & Exchange
Commission upon request
35
SCHEDULE 4
PART 1
GENERAL WARRANTIES
16 INTERPRETATION
In Part 1 of this Schedule 4 the following expressions shall have the
following meanings unless inconsistent with the context:
"the Company" Notwithstanding the definition contained in the other
parts of this Agreement, this definition shall be deemed
to include a reference to the Subsidiary (individual
details of which are set out in Schedule 2), as if the
provisions of Part 1 of this Schedule were set out in
full in respect the Subsidiary also.
17 INFORMATION SUPPLIED AND CAPACITY OF VENDORS
17.1 All information contained in Schedules 1, 2 and 3 of this Agreement is
true and accurate.
17.2 The copy documents contained in the bundle of documents labelled and
initialled for the purposes of identification by the Sellers'
Solicitors and the Purchaser's Solicitors (the "WARRANTED DOCUMENTS")
and described in the index to the Warranted Documents annexed to
Disclosure Letter are complete and true copies of the originals.
17.3 Each of the Sellers has full power and authority to enter into and
perform this Agreement and the Tax Deed and all other documents in the
Agreed Form without requiring the consent of any person, and this
Agreement and the Tax Deed and all other documents in the Agreed Form
when executed, will constitute valid and binding obligations on each of
the Sellers in accordance with the respective terms thereof.
17.4 The responses to the Purchaser's due diligence questionnaire annexed to
the Disclosure Letter are true and accurate in all material respects.
18 ACCOUNTS AND RECORDS
18.1 So far as the Warrantors are aware the Company has at all times
properly maintained all books, accounts and records of whatever kind
required by law to be maintained and so far as the Warrantors are aware
such books, accounts and records properly record all matters required
by law to be entered therein and accurately present and reflect all
matters necessary to comply with the provisions of the Companies Xxx
0000.
18.2 The Accounts:
36
18.2.1 complied with the requirements of the Companies Act and other relevant
statutes and generally accepted accounting principles, SSAPs and FRSs,
have been prepared on bases and principles consistent with those used
in the preparation of the audited statutory accounts of the Company for
the 3 financial years immediately preceding that which ended on the
Accounts Date and gave a true and fair view of the state of affairs of
the Company as at the Accounts Date and of its profit and loss and cash
flow, and there has been no change in such policies in any of the
accounting periods;
18.2.2 adequately disclosed all assets and made proper provision or reserve
for all assets and liabilities (whether or not quantified or disputed)
and properly provide for (or disclose by way of note) all contingent
liabilities and capital commitments at the Accounts Date;
18.2.3 made proper provision for depreciation of the fixed assets of the
Company having regard to their original cost and estimated life in
accordance with SSAP 12; and
18.2.4 The Accounts made proper provision or reserve for all bad and doubtful
debts of the Company at the Accounts Date;
18.3 The copy of the Management Accounts annexed to the Disclosure Letter is
a true and complete copy and so far as the Warrantors are aware, the
Management Accounts:
18.3.1 have been prepared on bases and in accordance with practices, policies
and principles consistent with those adopted in preparing the previous
management accounts of the Group in the period from 31 July 1997 to 28
February 1999 ("the Period") and are prepared on a cumulative basis for
the Period; and
18.3.2 have been carefully prepared in good faith and fairly state the assets,
liabilities and state of affairs of the Group for the period since 31
July 1998 to 28 February 1999 and made provision for the payment of
(pound)39,000 on the sale of motor vehicles used by the Group, payable
to Co-Operative Bank pursuant to the terms of leasing arrangements
between the Group and Co-Operative Bank.
19 BUSINESS SINCE THE ACCOUNTS DATE
19.1 Since the Accounts Date:
19.1.1 each Group Company has carried on its business in the ordinary and
usual course both as regards the nature, scope and manner of conducting
the same and so as to maintain the same as a going concern;
19.1.2 each Group Company has paid its creditors within the times agreed with
such creditors and there are no debts outstanding by such Group Company
which have been due for more than six weeks and the Closing Balance
Statement contains a list of all debts outstanding as at the date
immediately prior to the Completion Date;
37
19.1.3 no Group Company has acquired, or agreed to acquire, on capital account
any single asset having a value in excess of (pound)5,000 or assets
having an aggregate value in excess of (pound)10,000;
19.1.4 no Group Company has disposed of, or agreed to dispose of, any asset
having a value in excess of (pound)5,000;
19.1.5 no resolution of the shareholders of any Group Company has been passed;
19.1.6 no payment has been made to, or benefit conferred by any Group Company
on any of the Sellers, save as specified in the Disclosure Letter
pursuant to the terms of shareholders' employment or office;
19.1.7 no distribution of capital or income (including for the avoidance of
doubt, any dividend) has been declared, made or paid or agreed or
resolved to be declared, made or paid by any Group Company;
19.1.8 other than pursuant to the terms of this Agreement no loans have been
made or repaid by any Group Company and no loan capital or loan has
been or has become liable to be repaid by any Group Company in whole or
in part;
19.1.9 none of the fixed assets of the Group shown in the Accounts and none
acquired by any Group Company since the Accounts Date have been lost,
materially damaged or destroyed;
19.2 no cash at hand or at bank or other fixed or current asset has been
used to discharge indebtedness of the Group to 3i Group plc.
20 TRADING AND CONTRACTUAL ARRANGEMENTS
20.1 So far as the Warrantors are aware none of the contracts or obligations
entered into by any Group Company is ultra xxxxx the relevant Group
Company or exceeds the powers of the directors to bind the relevant
Group Company and so far as the Warrantors are aware, the relevant
Group Company is not in default under any such contracts or
obligations.
20.2 No Group Company is a party to any contract, transaction, obligation,
commitment or liability which, whether by reason of its nature, term,
scope, price or otherwise is or (so far as the Warrantors are aware)
may be material in relation to its business, profits or assets and
which in any case:
20.2.1 is in any way otherwise than in the ordinary course of the relevant
Group Company's business of an unusual or abnormal nature, or not fully
on an arm's length basis;
20.2.2 is of a long-term nature (that is to say incapable of performance in
accordance with its terms within twelve months after the date on which
it was entered into or undertaken);
38
20.2.3 cannot readily be fulfilled or performed by the relevant Group Company
on time without undue or unusual expenditure of money or effort;
20.2.4 involves agency, distributorship, franchising, marketing rights,
information sharing, manufacturing rights, servicing, maintenance;
partnership, joint venture, consortium, or similar arrangements;
20.2.5 commits the relevant Group Company to capital expenditure in excess of
(pound)10,000 in aggregate;
20.2.6 involves warranties, indemnities or representations given in connection
with a sale of shares or a sale of undertaking, or is a guarantee or
indemnity in respect of the obligations of a third party, under which
any liability or contingent liability is outstanding.
20.3 Except pursuant to their terms of employment no sums of whatever nature
are owing by any Group Company to any of the Sellers or any of the
Directors or any person being a Connected Person of any of the Sellers
or the Directors or any of them respectively.
20.4 So far as the Warrantors are aware, no Group Company has been a party
to any transaction to which any of the provisions of sections 320
(substantial property transactions involving Directors, etc.), 322
(liability arising from contravention of section 320), or 330 (general
restrictions on loans, etc. to Directors and persons connected with
them) of the Companies Act may apply.
20.5 None of the Sellers nor any person being a Connected Person in relation
to any Seller has any direct or indirect interest with any business
which has a close trading relationship with that of any Group Company
or which is or is likely to become competitive with the business of any
Group Company.
20.6 There are no outstanding arrangements or understandings (whether
legally binding or not) between any Group Company and any person who is
a shareholder (or the beneficial owner or any interest in the relevant
Group Company or in any company in which the relevant Group Company is
interested) or any person who is a Connected Person of any such person
relating to the management of the relevant Group Company's business, or
the appointment or removal of the Directors, or the ownership or
transfer of ownership, or the letting of any of the assets of the
relevant Group Company, or the provision, supply, purchase or finance
of goods, services or other facilities to, by or from the relevant
Group Company or otherwise howsoever in relation to the Company's
affairs.
20.7 No person is entitled to receive from the Company or any member of the
Group any finders fee, brokerage or commission in connection with the
sale of the Shares to the Purchaser, but to the extent any such person
is entitled to such a fee, brokerage or commission, the Sellers and 3i
shall discharge such liability and hold the Company harmless is in
respect of the same.
39
21 ASSETS (OTHER THAN THE PROPERTY)
21.1 The Company was at the Accounts Date the owner with good legal and
beneficial title to all the assets included in the Accounts and now so
owns and has in its possession and under its control all such assets
(save for current assets subsequently disposed of in the ordinary
course of its business) and all assets acquired by it after the
Accounts Date and all such assets are the sole and absolute property of
the Company free from any charge, lien, encumbrance or equity and no
other person has or claims any rights in relation to such assets or any
of them and in particular all such assets are free from any hire
purchase, leasing or rental agreement or agreement for payments on
deferred terms or xxxx of sale.
21.2 In relation to any assets held by the Company which is the subject of
any hire purchase, conditional sale, chattel leasing or retention of
title agreement or otherwise belonging to a third party, so far as the
Warrantors are aware no event has occurred which entitles or which upon
intervention or notice by any third party may entitle any such third
party to repossess the asset concerned, or terminate the agreement, or
any licence in respect of the same.
21.3 Save in respect of the Subsidiary, the Company is not and has never
been the holder or beneficial owner of nor has it agreed to acquire any
share or loan capital of any other company (whether incorporated in the
United Kingdom or elsewhere).
21.4 The Company is not entitled to the benefit of any debt otherwise than
as the original creditor and is not and has not agreed to become a
party to any factoring or discounting arrangement.
21.5 None of the debts due as at the Accounts Date remain unpaid at the date
of this Agreement nor has any debt which has subsequently become due to
the Company (or any part of any such debt) remained unpaid for more
than two months after the due date for payment or been released or
written off or proved to be irrevocable, nor is any such debt regarded
as irrevocable and so far as the Warrantors are aware all the debts
owing to the Company at Completion will be paid in full in the ordinary
course of business and in any event not later than three months after
Completion.
21.6 The assets owned or used by each Group Company comprise all the assets
used by the relevant Group Company to carry out its business in the
ordinary and usual course of trade.
22 EMPLOYEES AND AGENTS
22.1 Particulars of the identities, date of commencement of employment (or
appointment of office) and terms and conditions of employment or office
(including remuneration confidentiality and non-compete undertakings
and any loan, bonus, commission, share incentives or profit sharing
arrangement) of all the employees and officers of the Company are
Disclosed in the Disclosure Letter.
22.2 The Company is not under any legal or moral liability or obligation to
pay bonuses, pensions, gratuities, superannuation, allowances or the
like to any of its past or present officers or
40
employees or their dependents nor is it a party to any arrangement or
promise to make or in the habit of making ex gratia or voluntary
payments by way of bonus, pension, gratuity, superannuation, allowance
or the like to any such persons and there are no schemes or
arrangements for payment of retirement pension or death benefit or
similar schemes or arrangements in operation or contemplated in
relation to the Company.
22.3 No change has been made since the Accounts Date in the terms of
employment of any person employed by the Company at the date of this
Agreement, and the Company is not party to any contract or
understanding to make any such change.
22.4 Save in respect of remuneration and expenses Disclosed in the
Disclosure Letter in respect of the period since 31 July 1998 there are
no amounts owing to any present or former officers or employees of the
Company, and none of them is entitled to accrued holiday pay other than
in respect of the Company's current holiday year.
22.5 No employee has been engaged by the Company on a salary of more than
(pound)25,000 per annum since the Accounts Date and no person employed
by the Company at or since the Accounts Date has ceased, or given or
received notice to cease, to be so employed.
22.6 The Company has maintained suitable records regarding the service of
each of its employees and complied with all agreements for the time
being relating to them.
22.7 Since the Accounts Date and save to the extent (if any) to which
provision or allowance has been made in the Accounts no actual
liability has been incurred by the Company to make any redundancy
payments or any protective awards or to pay damages or compensation for
wrongful or unfair dismissal or for failure to comply with any order
for the reinstatement or re- engagement of any employee and no
gratuitous payment has been made or promised by the Company in
connection with the actual or proposed termination or suspension of
employment or variation of any contract of employment of any present or
former director or employee.
22.8 The Company has not recognized any trade union or association of trade
unions or any other organization of employees in respect of its
employees or any of them.
23 INSURANCE
23.1 Copies of all the Company's insurances are attached to the Disclosure
Letter and so far as the Warranties are aware there are no outstanding
claims or circumstances likely to give rise to a claim thereunder and
(so far as the Warrantors are aware) nothing has been done or omitted
to be done which has made or could make any policy of insurance void or
voidable or whereby the premiums are likely to be increased.
24 FINANCE AND WORKING CAPITAL
41
24.1 Full and accurate details of all cash balances, overdrafts loans or
other financial facilities outstanding or available to the Company are
contained in the Closing Balance Statement; and no person who provides
any such facility has given any indication to any of the Warrantors
that it may be withdrawal or its terms altered.
24.2 The details contained in the Disclosure Letter of the credit or debit
balances on all the bank or deposit accounts of the Company were
correct at the date stated in the Disclosure Letter and since such date
there have been no payments out of any such accounts (including,
without limitation, payments to discharge indebtedness of the Group to
3i Group plc) and the balances on such accounts are not now
substantially different from the balances shown in the Disclosure
Letter.
24.3 Save in respect of any sums owing in the ordinary course of the
Business to 3i Group Plc which sums are to be repaid on Completion the
Company has no borrowings.
25 PROPOSED PRODUCTS
25.1 So far as the Warrantors are aware, the Restricted Products (including
without limitation "KESTRA PCB") comply fully with all applicable laws,
regulations or standards in each case in their current form, and such
Restricted Products are not faulty, defective or dangerous or not in
accordance with any representation or contractual term, express or
implied, relating to them.
25.2 The Company has not received any written complaint from any actual or
potential customer undergoing evaluation of the Restricted Products,
nor has the Company issued any credit note for an amount in excess of
(pound)1,000.
25.3 The Business Reports have been prepared with due skill and care and all
factual information contained within them was when given and is at the
Completion Date true and accurate in all material respects (and
supercede all earlier information about the Companies Products which
may be contained in other Warranted Documents). All statements of
opinion contained or referred to in the Business Reports have been
honestly and reasonably made and are fair and reasonable in the
circumstances. None of the Warrantors are aware of any fact or matter
not disclosed with the Business Reports which may render such
information untrue, incorrect or misleading in any material respect.
26 LITIGATION
26.1 Save for proceedings instituted by the Company for collection of monies
owing to it in the ordinary course of business neither the Company nor
any person for whose acts or omissions it may be vicariously liable is
engaged in or subject to any civil, criminal or arbitration proceedings
and, so far as any of the Warrantors are aware, there are no such
proceedings pending or threatened by or against the Company or against
any such person and there are no facts or existing circumstances likely
to give rise to any such proceedings.
42
26.2 There is no unsatisfied judgment or unfulfilled order outstanding
against the Company and the Company is not party to any undertaking or
assurance given to a court, tribunal or any other person in connection
with the determination or settlement of any claim or proceedings.
27 INSOLVENCY
27.1 No order has been made or resolution passed or petition presented for
the winding-up of the Company and there is not outstanding:
27.1.1 any order or Petition for the winding-up of the Company;
27.1.2 any appointment of a receiver over the whole or any part of the
undertaking or assets of the Company;
27.1.3 any order or petition for the administration of the Company
27.1.4 any voluntary arrangement between the Company and any of its creditors;
27.1.5 any distress or execution or other process levied in respect of the
Company, which remains undischarged;
27.1.6 any unfulfilled or unsatisfied judgement or court order against the
Company.
27.2 The Company is not deemed unable to pay its debts within the meaning of
section 123 of the Insolvency Xxx 0000.
28 INTELLECTUAL PROPERTY
28.1 Details of all Registered Group Intellectual Property are set out in
the Disclosure Letter. Each registration of any Group Intellectual
Property is so far as the Warrantors are aware valid and subsisting and
the Warrantors have not received any notice opposing or challenging any
of them by any person. All registration and renewal fees in respect of
such registered Group Intellectual Property have been paid on time and
none are currently due.
28.2 The Group is the sole legal and beneficial owner of all Group
Intellectual Property required for, or used in, developed for use in or
necessary to the conduct of the Business as now conducted or exploited
in, the operation of the Business, free from all liens, charges,
equities and encumbrances.
28.3 All licenses relating to Licenced Intellectual Property to which each
Group Company is a party are in full force and effect and so far as the
Warrantors are aware the Group holds valid licences to use any third
party Intellectual Property required for or used in the Business and
nothing has been done and no event has occurred, by reason of which any
such licenses or
43
agreements may prematurely be terminated, and so far as the Warrantors
are aware none of such licenses is liable to be determined (whether
automatically or at the desire of any party thereto) by reason of the
execution or performance of this Agreement. Particulars of all other
written agreements relating to the Licenced Intellectual Property are
set out in the Disclosure Letter.
28.4 The Company has not received any notice from any person that the
operations including without limitation the use of the University
Software carried on by any Group Company infringe any Intellectual
Property of any other person, constitute passing-off, unfair
competition, or breach of confidentiality or give rise to any payment
(or payment obligation) by any Group Company of any royalty, fee, or
other payment of any description whatsoever.
28.5 No Group Company has, in designing, developing or manufacturing any
products, exactly, wholly or substantially (directly or indirectly)
copied or reproduced any products, designs or copyright works (or any
part thereof) in which any third party owns rights.
28.6 No third party is making or (so far as the Warrantors are aware)
threatening, or during the last 3 years has made or threatened, in
relation to any Group Intellectual Property, any infringing use or
exploitation or any claim or challenge. So far as the Warrantors are
aware, no person is doing or threatening any thing, has done any thing,
which constitutes passing-off, unfair competition or breach of
confidentiality actionable by any Group Company.
28.7 The Disclosure Letter sets forth all products marketed or that have
been marketed by the Company within the past two years.
28.8 The Disclosure Letter describes all Group Intellectual Property which
has been licensed to third parties (other than license to end-users in
accordance with a software license in the ordinary course of business).
28.9 All of the Group Intellectual Property Rights will remain the Group
Intellectual Property after the consummation of the transactions
contemplated by this Agreement, without the requirement that any
consent to assignment be obtained or any payment be made.
28.10 The Company has taken such action to protect the Group Intellectual
Property as the Company deems necessary for the Company to use such
rights in its business as currently conducted or currently contemplated
without the payment of royalties or penalties.
28.11 Without limiting the generality of the foregoing all employees,
contract workers, consultants and other agents of the Company have
executed agreements sufficient to vest in the Company ownership or the
right to use the Group Intellectual Property on which they have
performed services in the business of the Company as currently
conducted without the payment of royalties or penalties.
28.12 So far as the Warrantors are aware no third party has acquired any
rights in relation to any of the Group Intellectual Property nor have
they asserted any moral rights (as provided for in
44
Sections 77 and 80 of the Copyright, Designs and Patents Act 1988)
against any Group Company.
28.13 The Intellectual Property Report is true and accurate and complete in
all material facts and is not misleading.
28.14 YEAR 2000 COMPLIANCE
28.14.1 All current and past products offered by the Company (including any
predecessor in interest) and all enhancements, upgrades,
customizations, modifications, maintenance and the like are, Year 2000
Compliant.
28.14.2 The Company has not received notice of any claim, action, proceeding or
investigation concerning the Year 2000 Compliance of its products,
services or operations, and there is no basis for any such regulatory
action, investigation or proceeding.
28.14.3 The Warrantors Disclosed true, correct and complete copies of any
customer agreements or other materials in which the Company has
furnished (or could be deemed to have furnished) assurances as to the
Year 2000 Compliance of its products or services, including any
responses to surveys or requests for certification of Year 2000
Compliance and letters of assurance to customers.
28.14.4 So far as the Warrantors are aware, all of the Company's facilities in
all locations (including mechanical systems, lifts, security systems,
fire suppression systems, telecommunications systems, fax machines,
photocopy machines, and equipment) are Year 2000 Compliant whether or
not owned by the Company.
28.14.5 For purposes of this Agreement, "Year 2000 Compliant" shall mean the
capabilities of the relevant item to perform the functions defined in
the British Standards Institute document referenced Disc PD 2000 before
during or after 1 January 2000.
28.14.6 The Warrantors have Disclosed all internal investigations, memoranda,
budget plans, forecasts or reports concerning the Year 2000 Compliance
of the products, services, operations, systems, supplies, and
facilities of the Company and the Company's vendors, to the extent any
shall have been prepared or delivered prior to the date hereof.
29 COMPLIANCE
29.1 So far as the Warrantors are aware all necessary licenses, consents,
permits and authorities (public and private) have been obtained by the
Company to enable the Company to carry on its business effectively in
the places and in the manner in which such business is now carried on
and all such licenses, consents, permits and authorities are valid and
subsisting and none of the Warrantors know of any reason why any of
them should be suspended, cancelled or revoked or should not be renewed
upon the expiry of their existing term.
45
29.2 The Company has conducted its business in accordance with all
applicable laws and regulations of the United Kingdom and any relevant
foreign country in which the business is conducted.
29.3 No agreement, practice or arrangement to which the Company is party is
or ought to be or ought to have been registered under, or infringes,
any competition, anti-restrictive trade practice or consumer protection
legislation applicable in the United Kingdom or elsewhere.
29.4 There is not in existence or (so far as the Warrantors are aware)
pending any investigation or enquiry by, or on behalf of, any
governmental or other body in respect of the affairs of the Company.
30 CHARGES
30.1 No debenture, fixed charge, floating charge or other incumbrance over
the assets and undertaking has been created by the Company which is
still subsisting.
31 DIRECTORS AND OFFICERS
The Directors are the only directors of the Company and no person is a
shadow director (within the meaning of section 741 of the Companies
Act) of the Company.
32 CAPITAL OF THE COMPANY
32.1 The authorised and issued share capital of the Company is as set out in
SCHEDULE 2.
32.2 Save as provided in clause 8.1.2 the Sellers are the beneficial owners
and registered holders of the Shares which have been issued in proper
legal term and are fully paid or credited as fully paid.
32.3 There is not now outstanding any loan capital of the Company nor any
agreement, arrangement or option under which any person may now or at
any time hereafter call for the creation, allotment, issue, sale or
transfer of any loan or share capital of the Company or require any
loan or share capital of the Company to be put under option.
32.4 3i is the beneficial owner and registered holder of 62815 A Ordinary
Shares of (pound)1.00 each and 105 3947 Preference Shares of
(pound)0.01 each which are fully paid and it is entitled as beneficial
owner to sell such of the Shares as set out opposite its name in column
2 of Schedule 1 free from all claims, charges, liens, encumbrances,
equities and adverse rights of any description and together with all
rights attached or accruing thereto.
33 EFFECTS OF AGREEMENT
This Agreement will not entitle any person to terminate or avoid any
contract to which the Company is party.
46
SCHEDULE 4
PART 2
TAXATION WARRANTIES
1 GENERAL
1.1 Each Group Company has no liability for Tax (whether actual, deferred
or contingent) in respect of any financial period down to and including
the Accounts Date or referable to profits (including income and gains)
made or deemed to have been made on or before the Accounts Date which
has not been provided for or disclosed in the Accounts and each Group
Company has duly paid all Tax which it has become liable to pay.
1.2 Each Group Company has not since the Account Date paid nor is it liable
to pay any interest, penalty, fine or default surcharge in connection
with any Tax nor is any such liability likely to arise. In addition, no
Group Company's affairs have been or (so far as the Warrantors are
aware) are likely to be the subject of any dispute, investigation or
discovery by or with any Tax Authority.
1.3 Each Group Company has within the requisite period properly made all
returns and supplied all notices, accounts and information for the
purposes of Tax required to have been made or supplied to any Tax
Authority and, none of the returns, notices, accounts and information
has been or is the subject of any dispute, investigation or discovery
(other than routine questions and audit visits) by or with any Tax
Authority.
1.4 During the six years preceding the date of this Agreement, no Group
Company has entered into or been a party to any transaction, scheme or
arrangement containing steps inserted for no commercial purpose other
than avoiding Tax.
1.5 During the six years preceding the date of this Agreement, no Group
Company has been a party to any transaction to which any of the
following provisions have been, or could be, applied, other than where
all necessary consents or clearances have been obtained on the basis of
full and accurate disclosure to the relevant Tax Authority and where
the transaction has been carried out in accordance with the terms of
such consent or clearance: sections 703 to 709 (inclusive) of the Taxes
Act (cancellation of tax advantages from certain transactions in
securities); sections 765 to 767 (inclusive) of the Taxes Act
(migration etc. of companies); section 776 of the Taxes Act
(transactions in land: taxation of capital gains); and sections 135 to
139 (inclusive) of the TCGA (company reconstructions and
amalgamations).
1.6 No Group Company has made any election under section 37 of the Capital
Allowances Act 1990 nor has it or could it be taken to have made such
an election under section 37(8)(c) (election for assets to be treated
as short-life assets).
47
1.7 No Group Company has incurred any capital expenditure on the provision
of machinery or plant for leasing under chapter V of Part II of the
Capital Allowances Xxx 0000.
1.8 No Group Company has made any distribution prior to Completion within
the meaning of section 418 of the Taxes Act (and for the purposes of
this Warranty "distribution' includes certain expenses of close
companies).
1.9 No Group Company is or has been a close investment holding company
within the meaning of section 13A of the Taxes Act.
1.10 No Group Company has made any loans or advances within the meaning of
section 419 (as extended by section 422) of the Taxes Act (loans to
participators etc).
1.11 No transfer of value (as defined in section 3 of the Inheritance Tax
Act 1984) has ever been made by any Group Company so that the
provisions of section 94 of the Inheritance Tax Act 1984 (charge on
participators) could not apply.
1.12 During the six years preceding the date of this Agreement, no Group
Company has made nor has it been entitled to make any claim under any
of the following provisions of the TCGA: section 23 (compensation and
insurance proceeds applied to replace or restore asset); section 24(2)
(assets lost or destroyed or whose value becomes negligible); sections
48 and 280 (consideration due after time of disposal); section 247
(roll-over relief on compulsory acquisition of land); sections 152 to
154 (roll-over relief on business assets); and section 161(3)
(appropriation to trading stock).
1.13 No Group Company has disposed of any asset in circumstances such that
section 17 of the TCGA could apply (disposals and acquisitions treated
as made at market value).
1.14 No Group Company is entitled to a capital loss to which sections 18(3)
and (4) of the TCGA is applicable (disposals to a connected person).
1.15 No Group Company has acquired shares on a reorganisation within the
meaning of section 126 of the TCGA to which the second proviso to
section 128(2) of the TCGA could apply (restriction on deductibility of
expenditure where transaction not at arm's length).
1.16 No gain chargeable to corporation tax will accrue to any Group Company
on the disposal of any debt owed to the relevant Group Company not
being a debt on a security.
1.17 No Group Company has acquired benefits under any policy of assurance
which would on disposal give rise to a chargeable gain under section
210 of the TCGA (disposals by a person other than the original
beneficial owner).
1.18 No Group Company has received any assets by way of gift and as
mentioned in section 282 of the TCGA (recovery of tax from donee).
48
1.19 No Group Company owns any debts on a security or shares to which
sections 182 and 183 of the TCGA could apply on their disposal and has
not made any such disposal since 15th March 1988.
1.20 No Group Company is deemed to have made a disposal of any assets under
section 186 of the TCGA (assets ceasing to be within the charge to UK
tax) nor has any Group Company made any claim or election under section
187 of the TCGA (postponement of gains relating to foreign trades).
1.21 No Group Company owns any assets which are wasting assets within
section 44 of the TCGA and which do not qualify for capital allowances.
1.22 No Group Company has made any distributions within the meaning of
sections 209 and 210 of the Taxes Act since 5th April 1965 except for
dividends shown in its audited accounts nor is any Group Company bound
to make any such distributions.
1.23 No Group Company has issued any security within the meaning of section
254 the interest or other consideration given in respect of which falls
to be taxed under section 209.
1.24 During the six years preceding the date of this Agreement, no Group
Company has redeemed, repaid or purchased any of its own shares or
agreed to redeem, repay or purchase any of its own shares or converted
or agreed to convert its share capital or capitalised or agreed to
capitalise in the form of redeemable shares or debentures any profits
or reserves of any class or description. In addition, during these six
years no Group Company has been a party to an exempt distribution
within the meaning of sections 213 to 218 (inclusive) of the Taxes Act
within the last 6 years (demergers - exempt distributions).
1.25 No Group Company has issued any share capital to which the provisions
of section 249 of the Taxes Act (stock dividends treated as income)
could apply nor does it own any such share capital (shares carrying the
right to bonus share capital).
1.26 Each Group Company has duly paid and accounted for all sums payable to
the Inland Revenue in respect of income assessable to income tax under
schedule E (including any sums payable in respect of benefits provided
to the relevant Group Company's employees or former employees) under
section 203 of the Taxes Act and all regulations made under it and has
duly paid and accounted for all National Insurance contributions
required of it under the provisions of the Social Security
Contributions and Benefits Act 1992 (as amended) and regulations made
under it.
1.27 Each Group Company has correctly operated a statutory sick pay scheme
in accordance with the provisions of the Social Security and
Contributions and Benefits Xxx 0000 and the regulations made under it;
a statutory maternity pay scheme in accordance with the provisions of
the relevant UK or European community Legislation.
49
1.28 Each Group Company has where necessary complied with the provisions of
section 85 of the Finance Xxx 0000 (duty to furnish returns where
person acquires shares in a company in certain circumstances).
1.29 No Group Company has declared or paid a dividend.
1.30 Each Group Company is and has at all times been resident in the United
Kingdom for Tax purposes.
1.31 No Group Company has agreed to surrender or claim any amount by way of
group relief under the provisions of sections 402 to 413 (inclusive) of
the Taxes Act (group relief).
1.32 Since the Accounts Date no Group Company has made any payment either
alone or in aggregate with any other payments of a similar nature which
exceed (pound)6,000 which will not be deductible for the purposes of
corporation tax in computing the taxable profits or losses of the
relevant Group Company.
1.33 So far as the Warrantors are aware, there are no circumstances where
any Group Company will be obliged to pay or repay any amount of
consideration for relief surrendered pursuant to an agreement made on
or before Completion.
1.34 There has been no change in the ownership of any Group Company or major
change in the nature or conduct of a trade or business carried on by
any Group Company and no event or series of events which might cause
the disallowances of the carry forward of losses or excess charges
under the provisions of Section 768, 768B or 768C of the Taxes Act.
1.35 So far as the Warrantors are aware, there are no circumstances nor is
it likely that any Group Company will be obliged to pay by way of
reimbursement or indemnity any Tax under a covenant or indemnity
entered into on or before Completion.
2 STAMP DUTY AND STAMP DUTY RESERVE TAX
2.1 All documents in the enforcement of which a Group Company may be
interested have been properly stamped or marked as appropriate that no
stamp duty is payable and the appropriate stamp duty has been paid and
no such documents which are outside the United Kingdom would attract
stamp duty if they were brought into the United Kingdom.
2.2 No Group Company has made any claim for relief from stamp duty under
section 42 of the Finance Xxx 0000 or section 151 of the Finance Xxx
0000.
2.3 No Group Company has had transferred to it any chargeable securities
(as defined in section 99 of the Finance Act 1986) in circumstances
which have given rise to or which may give rise to a liability for
stamp duty reserve tax.
3 VALUE ADDED TAX
50
3.1 Each Company is a taxable person for the purposes of VAT and has duly
registered with its local Customs and Excise Office.
3.2 Each Group Company has at all times issued correct tax invoices to all
persons properly requiring the same in respect of its taxable supplies
either by way of goods or of services and has likewise requested and
received all appropriate tax invoices from its suppliers and others and
has kept in all material respects, the records and documents required
to complete and verify its quarterly VAT returns and has in all
material respects complied with the VAT legislation and all
regulations, notices, orders, provisions, directions and conditions
relating to VAT.
3.3 No Group Company is in arrears with any payments or returns under
legislation relating to VAT or liable to any abnormal or non-routine
payment of VAT or any forfeiture, penalty, interest or surcharge or to
the operation of any penal, interest or surcharge provisions contained
in such legislation.
3.4 As far as the Warrantors are aware, no Group Company is partially
exempt for the purposes of VAT.
3.5 No Group Company has been required by the Commissioners of HM Customs
and Excise to give security. Since the date of its incorporation no
Group Company has received a surcharge liability notice under section
59 of VATA (default surcharge) or a penalty liability notice under
section 64 of VATA (persistent misdeclaration resulting in
understatements or overclaims).
3.6 There is not nor has there at any time been in force a group or similar
election for Section 43 VATA purposes in relation to any Group Company
and no Group Company has been the subject of an application for group
registration.
3.7 No Group Company is or has agreed to become agent, manager or factor
(for the purposes of section 47 of VATA) of any person who is not
resident in the United Kingdom.
3.8 No Group Company nor any relevant associate of any Group Company
(within the meaning of paragraph 3(7) of schedule 10 to VATA) has made
an election under paragraph 2 of schedule 10 to VATA (election to waive
exemption), in respect of any land in, over or in respect of which any
Group Company has any interest right or licence to occupy.
3.9 No Group Company is bound nor has agreed to become bound by any lease,
tenancy or licence in or over land under the terms of which it is or is
likely to become liable to pay an amount in respect of VAT.
3.10 No Group Company owns any assets which are or could be subject to the
Capital Goods Adjustment Scheme pursuant to part XV Value Added Tax
Regulations 1995 (SI 1995.2518).
51
4 GROUP PROVISIONS
4.1 The Group forms a group for the purposes of section 402 of the Taxes
Act and there are no arrangements in existence within the meaning of
section 410 of the Taxes Act which would preclude a Group Company from
being registered as a member of the Group.
4.2 The provisions of sections 413(7) and (8) of the Taxes Act as
supplemented by the provisions of schedule 18 to the Taxes Act do not
apply and the Vendors is not aware of any reason as to why they may
apply (restriction of group relief).
4.3 No Group Company owns any asset which it has acquired from another
company which was at the time a member of the Group and which owned
that asset other than as trading stock within the meaning of section
173 of the TCGA.
4.4 No Group Company has ceased to be a member of a group of companies in
circumstances in which a charge under sections 178 and 179 of the TCGA
has arisen.
4.5 No Group Company has made a claim under section 175 of the TCGA
(replacement of business assets by a member of a group) or sections 247
and 152 to 154 (inclusive) TCGA.
4.6 Copies of all elections made pursuant to section 247 of the Taxes Act
(claim to have dividends and interest paid gross) are set out in the
Disclosure Letter.
4.7 No Group Company has paid any dividend without advance corporation tax
or paid any payment without deduction of income tax in the
circumstances specified in section 247(6) of the Taxes Act.
5 LOAN RELATIONSHIPS
5.1 Each Group Company which is a party to a loan relationship (within the
meaning of section 81 of the FA (meaning of "loan relationship" etc.))
uses, in respect of the loan relationship in its statutory accounts, a
basis of accounting which is or equates to an authorised accounting
method under section 85 of the FA (authorised accounting methods).
5.2 No Group Company has, in respect of a loan relationship within the
meaning of section 81 of the FA (meaning of "loan relationship" etc),
applied:
5.2.1 an authorised accounting method inconsistently or otherwise in a
materially different way in successive accounting periods; or
5.2.2 used a different authorised accounting method for the same or
successive accounting periods;
as provided by section 89 of the FA (inconsistent application of
accounting methods).
52
5.3 No Group Company is required to use an authorised accruals basis of
accounting in respect of a creditor relationship by virtue of section
87 of the FA (accounting method where parties have a connection).
5.4 No Group Company has received a payment of interest on which it has
borne income tax by deduction and in relation to which interest a
credit has been brought into account for the purposes of chapter 2 of
the FA (loan relationship) for an accounting period ending more than 2
years before the date of the receipt.
5.5 No Group Company is subject to a restriction as to the amount of the
loss that it may bring into account in respect of a loan relationship
by virtue of paragraph 10 of the schedule 9 to the FA (imported losses
etc).
5.6 No Group Company has acquired or disposed of rights or liabilities in
respect of a loan relationship where the company from which it made the
acquisition, or to which it made the disposal, was a member of the same
group of companies within the meaning of paragraph 12 of schedule 9 to
the FA (continuity of treatment: groups etc).
5.7 No Group Company has been a party to a loan relationship which has an
unallowable purpose within the meaning of paragraph 13 of schedule 9 to
the FA (loan relationships for unallowable purposes).
SCHEDULE 4
PART 3
PROPERTY WARRANTIES
1 The particulars of the Property described in Schedule 3 Part I are true
complete and accurate.
2 Save as Disclosed in the Disclosure Letter the Property is not subject
to any occupation (whether permitted or otherwise) of any third party.
3 There is no mortgage, charge or lien (whether legal or equitable, fixed
or floating) or other right in the nature of security over the
Company's interest in the Property nor any agreement or commitment to
create any of the same.
53
4 So far as the Warrantors are aware there is no outstanding agreement
for sale, estate contract, option or right of pre-emption affecting the
Property.
5 No application by the Company for planning permission relating to the
Property awaits determination and no planning decision or deemed
refusal is the subject of any appeal.
6 No notice or requirement materially affecting any Property or to use
has been given or received by the Company and the Warrantors are not
aware of any circumstance which might lead to such a notice or
requirement being given or received.
7 The Property is not affected by any transitional arrangements or appeal
in respect of the uniform business rate.
54
SCHEDULE 4
PART 4
ENVIRONMENTAL AND HEALTH AND SAFETY WARRANTIES
1 So far as the Warrantors are aware each Group Company complies in all
material respects with all conditions, limitations, obligations,
prohibitions and requirements contained in or imposed by any
Environmental Law;
2 No Environmental Permits have been obtained and as far as the
Warrantors are aware no Group Company is required to have any
Environmental Permits;
3 No Group Company nor any person for whose acts or omissions it may be
vicariously liable is engaged in or subject to any civil, criminal or
arbitration proceedings pending or threatened by or against any Group
Company or against such person and there are no facts or circumstances
likely to give rise to any such proceedings;
4 The Company has not had any Environmental Reports prepared and so far
as the Warrantors are aware no environmental audits or investigations
have been carried out or commissioned by any Group Company in relation
to the Properties and/or the Group's compliance with Environmental Law;
5 So far as the Warrantors are aware all records and data required to be
maintained by any Group Company under the provisions of any
Environmental Law regarding the operation of the business of the Group
including any processes carried on at or emissions and discharges from
the Properties is complete and accurate in all material respects.
6 So far as the Warrantors are aware, no Group Company has breached any
material provision of Health and Safety Law.
55
SCHEDULE 4
PART 5
PENSION WARRANTIES
1 DEFINITIONS
In this Part 5 of this Schedule:-
"1988 Act" means the Income and Corporation Xxxxx Xxx 0000;
"1993 Act" means the Pension Schemes Act of 1993;
"1995 Act" means the Pensions Xxx 0000.
2 NO PENSION SCHEME
2.1 Neither Group Company operates a defined contribution, money purchase
or occupational pension scheme within the meaning of the 1993 Act
and/or the 0000 Xxx.
2.2 Both of the Group Companies have complied in full with their moral
and/or contractual applications to employees to make contributions
towards pension plans nominated by the employees from time to time.
2.3 There is no unfunded liability on the part of the Company to make
contributions into any pension scheme for the benefit of (i) all
employees generally; or (ii) individual employees (as the case may be).
3 DISPUTES
There are no pending claims for incapacity or ill-health pensions and
there are no current disputes concerning such benefits.
56
SCHEDULE 5
COMPLETION REQUIREMENTS
1
1.1 SELLERS' DELIVERY OBLIGATIONS
At completion, the Sellers shall deliver (or procure to be delivered)
to the Purchaser:
1.1.1 duly executed transfers of the Sellers and 3i's Shares to the Purchaser
and/or its nominee(s) together with the definitive share certificates
in respect of such Shares in the names of the relevant transferors;
1.1.2 evidence to the Purchaser's reasonable satisfaction of the authority of
any person executing this Agreement or any document to be executed
pursuant to it on behalf of the Sellers and 3i;
1.1.3 duly executed voting powers of attorney in the Agreed Form in favour of
the Purchaser executed by each of the registered holders of the Shares
and a letter from 3i agreeing to vote the 3i Shares as the Purchaser
directs;
1.1.4 written resignations as officers of each Group Company from X.X. Xxxxx
and X.X. Xxxxx;
1.1.5 a statement from the Auditors of the Company confirming that they have
no claims against any Group Company for unpaid fees or expenses'
1.1.6 the statutory registers and other books of each Group Company made up
to date, the certificates of incorporation and certificates of
incorporation on change of name, the common seals and copies of the
memorandum and articles of each Group Company;
1.1.7 all original leases relating to the Property;
1.1.8 copies of all bank mandates of each Group Company and statements
showing the balances on all bank accounts of each Group Company at the
close of business on a date no earlier than 2 Business Days before the
Completion Date, together with a reconciliation statement prepared by
the Sellers to show the position at Completion listing all amounts
lodged but not cleared and unpresented cheques which when cleared would
be debited or credited to such accounts and standing orders payable
since the date of the statements;
1.1.9 a letter in the Agreed Form from each of the Sellers and 3i executed as
a deed irrevocably and unconditionally releasing and discharging each
Group Company and each director for the time being of each Group
Company from all obligations, indebtedness or liabilities to each of
the Sellers and 3i including without limitation pursuant to any of the
following:
57
(a) Investment Agreement between Kestra Limited, M.A. Xxxxx, X.X.
Xxxxxxx, X. Xxxxxxx and 3i Group Plc dated 20 May 1998;
(b) Deed of Guarantee and Indemnity between Visual Developments
Limited to 3i Group Plc dated 20 May 1998;
(c) Investment Agreement between Kestra Limited, the Promoters,
Manchester Technology Developments Limited, Vuman Limited,
Xxxxxx Xxxxxxxx and others and 3i Group Plc.
(d) Investment Agreement dated 2 December 1998 between X. Xxxxx
Esq., X.X. Xxxxxxx Esq. And others and 3i Group Plc; and
1.1.10 the Tax Deed duly executed as a deed by the Covenantors;
1.1.11 the Service Agreements duly executed by Messrs Dr M Xxxxx, X X Xxxxxxx,
A Hill, S Xxxxxxxx, A Ratter and A Xxxxx;
1.1.12 the Consultancy Agreements duly executed by Messrs Coote and Xxxxxx;
1.1.13 A memorandum of Satisfaction from 3i in the agreed form;
1.1.14 audited accounts of each Group Company signed by the Board of each
Group Company for the year ended 31st July 1998;
1.1.15 evidence in terms satisfactory to the Purchaser that Co-Operative Bank
has provided written waiver of its right to terminate any leases with
the Company upon change of control;
1.1.16 a Compromise Agreement in the agreed form, duly executed by Xxxx
Xxxxxxx;
1.1.17 the Supplemental Agreement to the Software Agreement in the agreed
form, duly executed by the Parties thereto.
1.2 SELLERS' PERFORMANCE OBLIGATIONS
At Completion, the Sellers shall:
1.3 procure that a meeting of the directors of the Company shall be held at
which it is resolve to:
(a) approve the transfers of the Shares and (subject to them being
duly stamped) the registration of the Purchaser and/or its
nominee(s) as members in respect of the Shares;
(b) revoke all existing bank mandates and to issue such new
mandates to banks as the Purchaser may require;
58
(c) appoint such persons as the Purchaser may nominate as auditors
of the Company with immediate effect;
(d) appoint such persons as the Purchaser may nominate as
directors and secretary of the Company with immediate effect;
(e) change the registered office of the Company to such place as
the Purchaser may nominate;
(f) change the accounting reference date of the Company to such
date as the Purchaser may nominate;
(g) approve and authorise the execution by the Company of the
Service Agreements; and
(i) to call an Extraordinary General Meeting of the Company to
approve the revocation of the existing Articles of Association
of the Company and to approve new Articles of Association in
the form approved by the Purchaser, in substitution therefor
and to change the name of the Company to Cyberoptics Limited.
1.4 procure that, immediately following the meeting of directors and
shareholders referred to in PARAGRAPH 1.2.1, a meeting of the directors
of the Subsidiary is held to give effect to such of the matters
referred to in PARAGRAPH 1.1 and to pass such other resolutions as the
Purchaser may reasonably require including (without limitation) to
adopt new Articles of Association and to change the name of the
Subsidiary to Kestra Limited.
1.5 Procure that the Seller's Solicitors deliver a duly executed Escrow
Instruction Letter.
1.6 PURCHASER'S OBLIGATIONS
Upon completion of all the matters referred to in PARAGRAPHS 1.1 and
1.2, the Purchaser shall:
1.6.1 pay the Initial Consideration and pay the Retention Fund into the Joint
Account details of which are set out in Clause 4.1.4;
1.6.2 deliver to the Sellers' Representative:
(a) the Tax Deed duly executed by the Purchaser;
(b) the Service Agreements duly executed by the Company;
(c) the Consultancy Agreements duly executed by the Company;
(d) produce and deliver an authority (in the form of [a duly held
board meeting of the Purchaser]) confirming that the person
signing this Agreement and all other documentation on its
behalf to affect Completion in duly authorised by the
Purchaser;
59
(e) a duly executed Escrow Instruction Letter;
(f) the Loan Note Certificate duly executed;
(g) (signing authority from the Bank providing the guarantee under
the Loan Notes];
1.6.3 pay the Retention Fund into the Joint Account.
SCHEDULE 6
AGREED FORM DOCUMENTS
1. Tax Deed
2. Power of attorney to vote pending registration of the transfer of the
Shares
3. Service Agreements
4. Letter of release from third parties including 3i Group plc of
obligations and indebtedness
5. Completion board minutes of the Company and the Subsidiary
6. Indemnity for lost share certificate
7. Written resignations and releases of directors and secretary (as
appropriate)
8. Consultancy Agreements
9. Closing Balance Statement
10. Business Report
11. Compromise Agreement (Xxxx Xxxxxxx)
12. Supplemental Agreement to the Software Agreement
13. 3i Memorandum of Satisfaction
60
SCHEDULE 7
VUMAN GUARANTEE
1 Guaranteed Obligations
1.1 If MTD fails to comply with any of the provisions of this Agreement on
the due date, following a failure by MTD to comply with demand by the
Purchaser to do so, then the Guarantor guarantees that it shall (on
first demand by the Purchaser)following a failure by MTD to comply with
a demand by the Purchaser to do so, immediately perform and discharge
the obligations of MTD under those provisions.
2 Guarantee Continuing and Additional to Any Other Rights
The guarantee set out in Paragraph 1 (Guaranteed Obligations):
(a) is a continuing guarantee and shall remain in force and effect
until MTD has performed and discharged all of its obligations
under this Agreement; and
(b) is additional to (and not in substitution for) any other
security or guarantee which is or may be held by the Purchaser
from time to time in respect of the obligations of MTD under
this Agreement save that, prior to the Escrow Release Date, no
claim shall be made on the Guarantor until such time as the
funds held in the Joint Account have been exhausted.
3 Liability
The Guarantor's liability under Paragraph 1 (Guaranteed Obligations)
shall not be affected by any concession, time, indulgence or release
granted by the Purchaser to MTD or any other person or by any payment
or other dealing or anything else which would, but for this Paragraph 3
operate to discharge or reduce that liability.
4 Primary Obligor
If anything (including any legal limitation, disability, liquidation or
other incapacity on the part of MTD) or any disclaimer by a liquidator
or trustee in bankruptcy causes any of MTD's obligations under this
Agreement and/or the guarantee set out in Paragraphs 1 (Guaranteed
Obligations) to be or become invalid or unenforceable, then the
Guarantor shall perform and discharge all of MTD's obligations under
this Agreement as if they were the primary obligations of the
Guarantor.
5 No Deduction or Withholding
The Guarantor shall make any payments due from it under this Schedule 7
in full, without any deduction or withholding in respect of any claim
(whether by way of set-off, counterclaim or otherwise) asserted from
time to time by it under this Agreement or in respect of any other
matter or thing.
61
6 Postponement of the Guarantor's Ability to Exercise Rights
The Guarantor shall not exercise any rights which it may have against
MTD arising from or otherwise relating to its guarantee under Paragraph
1 (Guaranteed Obligations) or its other obligations under this Schedule
7 unless and until all of the obligations of MTD and the Guarantor
under this Agreement have been performed and discharged.
7 Enforcement
The Purchaser may only claim under the guarantee set out in Paragraph 1
(Guaranteed Obligations) after first making demand of MTD but is not
required to take any action to claim under or enforce any other right,
security or other guarantee which it may hold from time to time in
respect of the other parties' obligations under this Agreement.
8 Obligations Unconditional and Irrevocable
The Guarantor's obligations under this Clause, including its guarantee
under Paragraph 2 (Guaranteed Obligations), are unconditional and
irrevocable, but for the avoidance of doubt cease at such time as the
obligations of MTD under the Agreement cease and shall not give rise to
any greater liability to the Guarantor than the liability where MTD has
under the Agreement.
62
EXECUTED and DELIVERED as a DEED )
by ) ........................................
in the presence of
Witness
Signature:
Name:
Address:
Occupation:
63
