Exhibit 2.1
STOCK PURCHASE AGREEMENT
by and among
TSI INTERNATIONAL SOFTWARE LTD
and
THE STOCKHOLDERS OF BRAID GROUP LIMITED
March 18, 1999
TABLE OF CONTENTS
ARTICLES
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ARTICLE I PURCHASE AND SALE OF THE SHARES 1
ARTICLE II WARRANTIES OF THE WARRANTORS 5
ARTICLE III FURTHER WARRANTIES OF THE COMPANY STOCKHOLDERS 33
ARTICLE IV WARRANTIES OF THE BUYER 34
ARTICLE V RESTRICTIVE COVENANTS 36
ARTICLE VI INDEMNIFICATION AND WARRANTY LIMITATIONS 38
ARTICLE VII POST CLOSING COVENANTS 43
ARTICLE VIII DEFINITIONS and INTERPRETATION 45
ARTICLE IX GENERAL PROVISIONS 47
SCHEDULE I 52
Part 1 The Warrantors 52
Part 2 Other Sellers 52
SCHEDULE II 54
Part 1 Cash Payments to the Company Stockholders 54
Part 2 Calculation of the number of Initial Shares of the Buyer Common Stock 55
Part 3 Additional Consideration 56
SCHEDULE III Stock Options 59
SCHEDULE IV 60
Part 1 Details of the Company 60
Part 2 Details of the Subsidiaries 61
SCHEDULE V List of Employees 69
SCHEDULE VI 70
Part 1 Details of the English Properties 70
Part 2 Details of the Foreign Properties 71
AGREED TERMS DOCUMENTS
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Registration Rights Agreement
Written Resolution of Company Stockholders
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (the "Agreement") is entered into as of March 18,
1999 (the "Agreement Date") by and among TSI International Software Ltd, a
Delaware corporation (the "Buyer"), with its principal place of business at 00
Xxxxxxx Xxxx, Xxxxxx, Xxxxxxxxxxx 00000-0000, XXX; the persons whose names and
addresses are set forth in Part 1 of Schedule I hereto (the "Warrantors"), and
the persons whose names and addresses are set out in Part 2 of Schedule I (the
"Other Sellers"). The Warrantors and the Other Sellers are together referred to
herein as the "Company Stockholders". The Buyer, the Warrantors and the Other
Sellers are referred to collectively herein as the "Parties."
Preliminary Statement
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1. The issued share capital of Braid Group Limited, a Bermuda corporation
(Registered No. 24200) whose registered office is at Xxxxxxxxx Xxxxx, Xxxxxx
Xxxxxx, Xxxxxxxx XX00, Xxxxxxx, ("xxx Company"), is $6,161,721 divided into
6,161,721 shares of US$1.00 each. Further particulars of the Company are set
out in Part 1 of Schedule IV.
2. The Buyer desires to purchase, and the Company Stockholders desire to
sell or procure the sale of 6,161,721 shares of US$1.00 each in the capital of
the Company being the entire issued share capital of the Company at Closing (as
hereinafter defined), (the "Shares") for the consideration set forth below
subject to the terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the warranties and covenants contained
herein and other good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the Parties agree as follows:
ARTICLE I
PURCHASE AND SALE OF THE SHARES
1.1 Purchase of the Shares from the Company Stockholders.
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Upon and subject to the terms and conditions of this Agreement, at the
closing of the transactions contemplated by this Agreement (the "Closing"), the
Company Stockholders shall sell or procure the sale of and transfer to the
Buyer, and the Buyer shall purchase, acquire and accept from each Company
Stockholder, with full title guarantee (other than Fiscal Services International
Limited as trustee of the Little No 1 Trust and as nominee of Xxxxxxx Xxxxxx
(the "Trustee") and Xxxx Xxxxxx as trustee of 8,660 Shares for Xxxxxx Xxxxxx who
shall sell with limited title guarantee) all legal and beneficial interest in
the Shares free from all liens, charges, encumbrances and equities of any
description together with all rights now or hereafter attaching thereto. At the
Closing each Company Stockholder shall deliver or procure delivery to the Buyer
of certificates evidencing the Shares accompanied by duly executed transfers of
all the Shares in favour of the Buyer. Each of the Company Stockholders hereby
waives and undertakes to procure the waiver of all pre-emption and similar
rights over the Shares or any of them to which he or any other person may be
entitled under the Bye-Laws of the Company, or otherwise in relation to the sale
and purchase of the same hereunder.
1.2 The Closing.
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The Closing shall take place at the offices of Xxxxxxx Xxxxx Xxxxxx in
New York or elsewhere as the parties shall agree immediately after the signing
and exchange of this Agreement.
1.3 Actions at Closing.
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At Closing:
(a) the Company Stockholders will produce and deliver to the Buyer:
(i) duly executed transfers of the Shares in favour of the Buyer
(or as it will direct) together with all relevant share certificates ("the
Certificates" (or in the case of any lost certificate an indemnity satisfactory
to the Buyer in relation to it) and together also with such waivers and consents
as may be required to enable the Buyer and its nominee(s) to be registered as
the holders of the Shares;
(ii) if requested by the Buyer written resignations from all or
any directors and the secretary of each Subsidiary and the Company by whose name
an asterisk appears in Schedule IV in the agreed terms;
(iii) a Registration Rights Agreement in the agreed form to be
made between the parties hereto and executed by them;
(iv) if requested by the Buyer duly executed powers of attorney
from any or all of the Company Stockholders granted to the Buyer in the agreed
terms in respect of the Shares pending registration; and
(v) a written resolution of the Company Stockholders in the
agreed terms:
(1) altering the Bye-Laws of the Company to remove the pre-
emption rights on transfer contained therein; and
(2) approving the transfers referred to in Article 1.3(a)(i)
for registration in the books of the Company.
(b) the Company Stockholders will procure that:
(i) any persons nominated by the Buyer are appointed as
additional directors of the Company (subject to any maximum number of directors
imposed by the relevant articles of association), and any person nominated by
the Buyer is appointed as secretary of the Company; and
(ii) a resolution of the directors of the Company is passed
effecting the exchange of options referred to in Section 1.4 below.
(c) the Buyer shall deliver to each Company Stockholder or their
respective nominees a global certificate for the number of Initial Shares (as
defined in Section 1.4 below) and shall pay to the Stockholders' Representative
on behalf of the Company Stockholders that part of the Cash Payment payable to
them (in accordance with Section 1.4 below) by wire transfer in immediately
available funds to the account stated in Section 1.6 below. The Warrantors will
indemnify and hold harmless the Buyer from any claims or demands made by any
Company Stockholders relative to the allocation, distribution or non-
distribution of Additional Consideration by Stockholders' Representative to the
Company Stockholders.
(d) the Company Stockholders will deliver to the Buyer an opinion in a
form satisfactory to the Buyer from Xxxxx Xxxxxxx.
(e) the Company Stockholders will deliver to the Buyer an opinion in a
form satisfactory to the Buyer from Xxxxxxx Xxxx.
1.4 Purchase Price.
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The aggregate purchase price to be paid by the Buyer for the Shares
shall be (i) $30,000,000 (Thirty Million Dollars) in cash (the "Cash Payment")
payable to the Company Stockholders in the amounts set out in Part 1 of Schedule
II, (ii) 1,103,629 shares of common stock, $0.01 par value per share, ("Buyer
Common Stock") of the Buyer (the "Initial Shares") and (iii) cash and/or shares
of common stock of the Buyer payable in accordance with Part 3 of Schedule II
("Additional Consideration").
The Buyer shall also issue options over the Buyer Common Stock in
exchange for existing options over shares of the Company as follows. At Closing
the board of Directors of the Company shall effect an exchange of the share
options held by the officers, employees and consultants of the Company
identified in Schedule V and the Buyer shall enable the officers, employees and
consultants of the Company identified in Schedule V to participate in its
employee stock option plan and shall grant stock options in accordance with the
terms of such plan to such persons on the basis shown in Schedule V.
Buyer Common Stock representing the Initial Shares shall be issued at
Closing to the Company Stockholders or their respective nominees.
The number of shares of the Buyer Common Stock issuable as the
Additional Consideration and/or on exchange of options referred to in this
Section 1.4 shall be subject to equitable and appropriate adjustment in the
event of any stock split, stock dividend, reverse stock split or the merger or
consolidation of the Buyer which is to another Business Entity as a result of
which the Buyer Common Stock is converted into or exchanged for the right to
receive cash or other property or any exchange of shares of the Common Stock of
the Buyer for cash securities or other property pursuant to a statutory share
exchange transaction or similar event affecting the Buyer Common Stock between
the Agreement Date and the date when such stock is to be issued in accordance
with this Agreement.
1.5 Exchange of Shares.
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At Closing each Company Stockholder shall surrender or procure the
surrender to the Buyer of the Certificates and the Stockholders' Representative
on behalf of each Company Stockholder shall be entitled to receive in exchange
therefor his respective proportion of the Cash Payment and the Initial Shares
issuable pursuant to Section 1.4 above. No holder of Certificates shall be
entitled to receive the consideration to which he would otherwise be entitled
until his Certificates are properly surrendered.
1.6 Stockholders' Representative
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(a) In order to administer efficiently the receipt of the Cash
Payment, Additional Consideration and certificates for the Buyer Common Stock,
the Company Stockholders hereby designate Xxxxxxx Xxxxxx as their representative
(the "Stockholders' Representative").
(b) The Company Stockholders hereby authorize the Stockholders'
Representative to receive the Cash Payment and the certificates for the Buyer
Common Stock due to them at Closing under the terms of this Agreement and to
give a valid receipt on their behalf for such monies and certificates (which
receipt shall be an absolute discharge to the Buyer in respect of its obligation
to satisfy the Cash Payment and delivery of such certificates). The Buyer shall
be under no obligation to enquire as to the allocation of the Cash Payment and
certificates amongst the Company Stockholders who shall have no claim against
the Buyer as a result of the acts or omissions of the Stockholders'
Representative made or purported to be made pursuant to this Section 1.6. The
Cash Payment shall be paid into the following bank account:
Bank: Chase Manhattan Bank, NYC
Bank or Sort Code: 021 000 021
Account No: 066-198038
For further credit to:
Account No: 309-79513-1-7-051
Name: Xxxxxxx Xxxxxx Special
(c) The Additional Consideration, (if any) shall be paid to the
Stockholders' Representative in the case of cash to the bank account set out
above or in the case of certificates for the Buyer Common Stock by delivery to
the Stockholders' Representative (whose receipt shall be an absolute discharge
to the Buyer in respect of its obligation to satisfy the Additional
Consideration). The Buyer shall be under no obligation to enquire as to the
allocation of the Additional Consideration amongst the Company Stockholders who
shall have no claim against the Buyer as a result of the acts or omissions of
the Stockholders Representative made or purported to be made pursuant to this
Section 1.6. The Company Stockholders hereby authorize the Stockholders'
Representative to distribute the Additional Consideration (if any) amongst them
or any of them in such proportions or amounts as the Stockholders'
Representative and the Warrantors in their absolute discretion consider
appropriate.
1.7 Resale Restrictions on Initial Shares
-------------------------------------
The Company Stockholders agree that they will not, without the prior
written consent of the Buyer, for a period of twelve (12) months following the
Closing Date, directly or indirectly offer, sell, contract to sell or otherwise
dispose of or otherwise transfer (a "Disposition") the economic risk of
ownership of 50% of the Initial Shares (as such number may be adjusted to
reflect stock splits, stock dividends, recapitalizations and similar
transactions) and the Buyer may place legends on the share certificates and stop
transfer restrictions to reflect this restriction.
ARTICLE II
WARRANTIES OF THE WARRANTORS
Subject to the provisions of Article VI, the Warrantors jointly and
severally warrant to the Buyer that the statements contained in this Article II
(the "Warranties") are true and correct except as fully and fairly disclosed in
the disclosure letter of even date herewith attached hereto from the Warrantors
to the Buyer disclosing exceptions to the Warranties (the "Disclosure Letter").
The Disclosure Letter shall be initialled by each of the Warrantors and shall be
arranged in paragraphs corresponding to the numbered and lettered paragraphs
contained in this Article. For the avoidance of doubt, the tax covenant in
section 2.8(b) is
not a Warranty and as such shall not be subject to any provision that relates to
the Warranties. In this Agreement, unless otherwise specified, where any
Warranty refers to the knowledge, information, belief and/or awareness of the
Warrantors (or similar expression), each Warrantor will be deemed to have such
knowledge, information, belief or awareness as such Warrantor would have
obtained had such Warrantor made all reasonable enquiries of (i) the
professional advisers of the Company and its Subsidiaries (ii) the directors of
Braid Systems Limited who shall be employed by any company within the Group, and
(iii) the other Warrantors into the subject matter of that Warranty and the
knowledge, information, belief and awareness of any one of the Warrantors shall
be imputed to the remaining Warrantors. In this Article II the expression "the
Company" shall (except in Sections 2.1 and 2.2(a) and where the context
otherwise requires) mean each Company within the Group except the companies
whose status is stated to be "dormant" in Schedule IV Part 2 so that each
Warranty shall apply to each such company separately.
2.1 Organization, Qualification and Corporate Power.
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Each of the Company and the Subsidiaries is a private company limited
by shares incorporated in the jurisdiction set out against that company's name
in Schedule IV. The details set out in Schedule IV are true and accurate. Each
of the Company and the Subsidiaries has all requisite corporate power and
authority to carry on the businesses in which it is engaged and to own and use
the properties owned and used by it. The Company has furnished to the Buyer
true and complete copies of the Company's and each of the Subsidiaries' Bye-
Laws and Charters, each as amended and as in effect on the Agreement Date, in
the case of the Company certified by a duly authorized officer of the Company.
Each of the Company and the Subsidiaries has at all times complied in all
material respects with, and is not in default under or in violation of, any
material provision of its Charter and Bye-Laws. Any and all shareholder and
board approvals required by the Company and the Subsidiaries by all relevant
laws with respect to this Agreement and the transaction contemplated hereby have
been duly and timely obtained.
2.2 Capitalization.
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(a) The authorized share capital of the Company consists of 12,000,000
shares of US$1.00 par value per share, of which 6,161,721 shares are issued and
all of which shares are beneficially owned by the Company Stockholders other
than those shares held by the Trustee. Schedule I sets forth a complete and
accurate list of all stockholders of the Company, indicating the number of
Shares held by each stockholder. All of the issued Shares are duly authorized,
validly issued and fully paid, non-assessable and not subject to any right of
rescission.
(b) There are no outstanding or authorized options, warrants, rights,
agreements, arrangements, understandings, calls, conversion privileges or
commitments in relation to the Company to which the Company is a party or which
are binding upon the Company providing for the issuance, disposition, exchange ,
acquisition or transfer of any of the Company's share capital. No person has
any right to call for the issue of any debenture,
or share or loan capital of the Company under any other agreement or other
arrangement presently in force. Save as set out in the Company's Bye-Laws, there
are no pre-emptive or other rights or agreements outstanding to purchase any of
the Company's authorized but unissued capital stock or any securities
convertible into or exchangeable for shares of Company Stock or obligating the
Company to grant, extend, or enter into any such option, warrant, call, right,
commitment, conversion privilege or other right or agreement, and there is no
liability for dividends accrued but unpaid. There are no voting agreements,
rights of first refusal or other restrictions (other than normal restrictions on
transfer under all applicable US, non-US, federal or state securities laws
applicable to any of the Company's outstanding securities).
2.3 Non-contravention.
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Subject to compliance with the applicable requirements of the United
States Securities Act of 1933, as amended (the "Securities Act") and any
applicable state or non-US securities laws, neither the execution and delivery
by the Company Stockholders of this Agreement, nor the consummation of the
transactions contemplated hereby or thereby, will (a) conflict with or violate
any provision of the Charter or Bye-Laws of the Company, (b) require on the part
of the Company or, so far as the Warrantors are aware, any Company Stockholder
any filing with, or any permit, authorization, consent or approval of, any
court, arbitrational tribunal, administrative agency or commission or other
governmental or regulatory authority or agency (a "Governmental Entity") or to
the extent that any such consent or approval is required of the Governmental
Entity, it has been obtained, (c) result in the imposition of any Security
Interest upon any assets of the Company or on the Shares, or (d) violate any
order, writ or injunction applicable to the Company or any of its properties or
assets, or (e) conflict with, result in material breach of, constitute (with or
without due notice or lapse of time or both) a material default under, result in
the material acceleration of, create in any party any material legal right to
accelerate, terminate, modify or cancel, or require any notice, consent or
waiver under, any contract, lease, sublease, license, sublicense, franchise,
permit, indenture, agreement or mortgage for borrowed money, instrument of
indebtedness, Security Interest or other arrangement to which the Company is a
party or by which the Company is bound (collectively "Company Contracts"). For
the purposes of this Agreement, "Security Interest" means any mortgage, pledge,
security interest, encumbrance, transfer restriction, charge or other lien
(whether arising by contract or by operation of law). To the Warrantors'
knowledge, neither the Company nor any Company Stockholder nor any third party
is in material breach of any Company Contract which breach could reasonably be
expected to have a material adverse effect on the Company.
2.4 Subsidiaries.
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Details of the Subsidiaries are set out in Part 2 of Schedule IV. The
Company does not control directly or indirectly or have any direct or indirect
equity interest in any Business Entity that is not a Subsidiary. The Company
owns all of the issued and outstanding shares of capital stock of the
Subsidiaries free from all liens, charges and encumbrances and there exist no
options, warrants or other rights to purchase the shares of or
to convert any securities into the shares of any of the Subsidiaries. For the
purposes of this Agreement, "Subsidiaries" means any corporation, partnership,
limited liability company or other form of business association (a "Business
Entity") with respect to which the Company, directly or indirectly, owns or has
the power to vote or direct the voting of sufficient securities to elect a
majority of the directors or others authorized to manage or direct the affairs
of such Business Entity.
2.5 Financial Statements.
--------------------
The Company has previously furnished to the Buyer complete and
accurate copies of its audited balance sheets and profit and loss accounts and
related statements of income, retained earnings, stockholders' equity and cash
flows for each of the Subsidiaries for the years ended 31st July 1996, 31st July
1997 and 31st July 1998 (31st July 1998 hereinafter referred to as the "Balance
Sheet Date"). The foregoing financial statements (the "Financial Statements")
have been prepared in accordance with generally accepted accounting principles
in the United Kingdom ("UK GAAP") applied on a consistent basis throughout the
periods covered thereby (except as may be indicated therein or in the notes
thereto) and present a true and fair view of the financial condition, results of
operations and cash flows of the Company as of the respective dates thereof and
for the periods referred to therein. The interim consolidated financial
statements of the Group for the six month period ended 31st January 1999 (the
"Interim Financial Statement") prepared on the same accounting principles and
bases as the Financial Statements have been delivered to the Buyer and
reasonably reflect in all material respects the profit and losses of the Company
over the period for which it has been prepared. The Company's revenue
recognition practice and the record keeping practice underlying the same and the
Company's practice in estimating reserves for warranty returns, obsolete
inventory, and doubtful accounts all conform in all material respects to all
applicable UK GAAP requirements as now existing.
2.6 Undisclosed Liabilities.
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The Company has no material liability or obligation (whether known or
unknown, whether accrued, absolute, contingent or otherwise, whether liquidated
or unliquidated and whether due or to become due) that is not reflected or
reserved against in the Financial Statements or the Interim Financial Statements
except for those that may have been incurred after the date of the Financial
Statements or the Interim Financial Statements in the ordinary course of its
business consistent with past practice ("Ordinary Course of Business").
2.7 Absence of Certain Changes.
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Since the Balance Sheet Date:
(a) the Company has not acquired, or agreed to acquire, any tangible
asset, interest in any single Intellectual Property Right or investment having a
value in excess
of ,100,000 or tangible assets (excluding Stock), interests in Intellectual
Property Rights or investments having an aggregate value in excess of $500,000;
(b) the Company has not disposed of, or agreed to dispose of, any
tangible asset (excluding Stock), interest in any single Intellectual Property
Right or investment either having a value reflected in the Financial Statements
in excess of $50,000;
(c) no loan other than season ticket loans to employees made by the
Company which remains outstanding has become due and payable in whole or in part
to the Company;
(d) the Company has not borrowed or raised any money or taken up any
financial facilities;
(e) no dividend or other payment which is, or could be treated as, a
distribution for the purposes of Part VI ICTA or section 418 ICTA has been
declared, paid or made by the Company;
(f) there has been no adverse change in the financial or trading
position of the Company, including, but not limited to, any adverse change in
respect of turnover, profits, margins of profitability, liabilities (actual or
contingent) or expenses (direct or indirect) of the Company;
(g) no resolution of the shareholders of the Company has been passed;
(h) the Company's accounting reference date has not been changed;
(i) no payment has been made by the Company to, or benefit conferred
(directly or indirectly) by the Company on any of the Company Stockholders; and
(j) the trade and business of the Company has been carried on in the
ordinary and normal course.
2.8 Taxation
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(a) For the purposes of this Agreement:
(i) references to "Taxation" means all taxes, charges, fees,
levies, duties, imposts or other similar assessments or liabilities, including
without limitation, income, corporation, capital gains, value added, customs,
gross receipts, ad valorem, premium, excise, real property, personal property,
sales, use, transfer, stamp, transfer gains, inheritance, withholding,
employment, payroll and franchise taxes imposed by any domestic or foreign
government (including without limitation the US, UK, Bermuda, Hong Kong,
Singapore, Australia, Philippines and each other country in which the Company
carries on business) or any state, local, county or municipal subdivision
thereof, or any other political
subdivision of or any such government, or any agency of any of the foregoing,
and any interest, fines or penalties to tax resulting from, attributable to or
incurred in connection with any tax or any contest or dispute thereof;
(ii) references to "Event" means any event, fact or circumstance
whatsoever, including but not limited to, the earning, receipt or accrual for
any Taxation purpose of any income, profit or gain, and includes an Event which
is deemed to have occurred for any Taxation purpose;
(iii) references to an Event which occurred on or before Closing
includes the combined result of two or more Events, the first of which occurred
on or before Closing;
(iv) references to "Relief" means any relief, allowance,
exemption, set-off, deduction or credit available from, against or in relation
to Taxation in the computation for any Taxation purpose of income, profits or
gains, and any right to a repayment of Taxation, and the loss of a Relief
includes the loss of, disallowance or failure to obtain any Relief; and
(v) references to a payment of Taxation which the Company or any
of its Subsidiaries is liable to make includes any stamp
duty which is charged on any document, or in the case of a
document which is outside the United Kingdom any stamp duty
which would be charged on the document if it were brought
into the United Kingdom, which is necessary to establish the
title to any asset or in the enforcement or production of
which the Company or any of its Subsidiaries is interested,
and any interest, fine or penalty relating to such stamp
duty.
(b) Tax Covenant
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The Warrantors covenant with the Buyer to pay to the Buyer an
amount equal to the amount of:
(i) any payment of, or in respect of, Taxation which the Company
has made or is liable to make as a result of, or in connection with, any Event
which occurred on or before Closing; and
(ii) any payment of Taxation which the Company would have been
liable to make as a result of, or in connection with, any Event which occurred
on or before Closing but for the use of any Relief; and
(iii) any payment of Taxation which the Company would not have
been liable to make but for the loss of any Relief (including a Relief
surrendered to the Company by another company) as a result of, or in connection
with, any Event which occurred on or before Closing, on the basis of the rates
of Taxation current at the date of the loss, assuming for this purpose that the
Company had sufficient profits or was otherwise in a position actually to use
the Relief; and
(iv) any repayment of Taxation to which the Company would have
had the right but for the loss of such right as a result of, or in connection
with, any Event which occurred on or before Closing; and
(v) any reasonable costs, fees or expenses (including legal
costs on a full indemnity basis) incurred by the Company or the Buyer in
connection with:
(1) any matter in respect of which the Warrantors are or may
be liable under any of paragraphs (i) to (iv) (inclusive); or
(2) taking or defending any action (including but not
limited to legal proceedings) under this Section 2.8.
The Warrantors shall not be liable to make a payment under this
Section 2.8(b) to the extent that:
(i) the Taxation has been paid prior to Closing and has been
reflected in the Financial Statements;
(ii) the Taxation is specifically provided, allowed or reserved
for in the Financial Statements and/or the Interim Financial Statements;
(iii) the same liability has already been recovered by the Buyer
under a claim for breach of a Warranty;
(iv) the Taxation has arisen in respect of actual (but not
deemed) profits earned since the date of the Interim Financial Statements in the
Ordinary Course of Business of the Company or its Subsidiaries;
(v) a provision made in the Financial Statements in respect of
Taxation is insufficient only by reason of any increase in rates of Taxation or
change in law or published practice of any Taxation authority after Closing;
(vi) it is Taxation which would not have arisen but for
a voluntary act or transaction carried out by the Buyer (or persons deriving
title from it) or the Company or any of its Subsidiaries after Closing otherwise
than in the Ordinary Course of Business and in respect of which the Buyer knew
or ought to have known would give rise to the Taxation in question;
(vii) such Taxation arises as a result of the non availability
for setting off against profits, income or gains made, earned or accrued after
Closing of the Company or any of its Subsidiaries of any losses incurred by the
Company or its Subsidiaries before Closing;
(viii) the liability would not have arisen or would not have been
reduced but for the fact that the treatment of any assets or liabilities or of
the Taxation attributable to timing differences (including capital allowances)
in future accounts of the Company is different from the treatment in the
Financial Statements or Interim Financial Statements unless the change in
treatment is necessary for the accounts to comply with generally accepted
accounting practices in the country of incorporation for the relevant Subsidiary
or in the case of the Company, UK GAAP;
(ix) such liability occurs, arises wholly or partly out of any
transaction or omission whatsoever authorised by or carried out at the written
request of the Buyer; and
(x) the liability would not have arisen or would have been
reduced or eliminated but for a failure or omission after Closing on the part of
the Company to make any claim, election, surrender or disclaimer relating to
Taxation the making, giving or doing of which was taken into account in
computing the provision for Taxation in the Financial Statements or Interim
Financial Statements and the Buyer has been informed of which by the Warrantors
prior to Closing.
(c) No withholding
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(i) Except as required by law all payments by the Warrantors
under this Section 2.8 will be made free and clear of all deductions and
withholdings.
(ii) If any deduction or withholding is required to be made
from any payment by the Warrantors under this Section 2.8 or if (ignoring any
available Relief or right to repayment of Taxation) the Buyer is subject to
Taxation in respect of any payment by any of the Warrantors under this Section
2.8, the Warrantors covenant with the Buyer to pay to the Buyer such additional
amount as is necessary to ensure that the net amount received and retained by
the Buyer (after taking account of such deduction or withholding or Taxation) is
equal to the amount which it would have received and retained had the payment in
question not been subject to the deduction or withholding or Taxation provided
that nothing in this Section 2.8(c) shall entitle any person deriving title from
the Buyer to recover under this Section 2.8(c) any amount greater than the
amount which would have been payable to the Buyer if the Buyer had been entitled
to make a claim under this Section 2.8(c) .
(d) Investigations and Disputes.
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(i) The Company is not involved in any dispute with any
Taxation authority concerning any matter likely to
affect in any way the liability of the Company to
Taxation and there are no circumstances which are
likely to give rise to any such dispute.
(ii) The Taxation affairs of the Company have never been
the subject of any investigation or enquiry by any
Taxation authority (other than routine questions), no
Taxation authority has indicated that it intends to
investigate the Taxation affairs of the Company and
there are no circumstances which are likely to give
rise to any such investigation.
(e) Distributions and Payments.
--------------------------
(i) The Company has deducted and properly accounted to the
appropriate Taxation authority for all amounts which
it has been obliged to deduct in respect of Taxation.
(ii) The Company has no outstanding liability to account
for advance corporation tax or any other Taxation
required to be paid in respect of a dividend or any
other form of distribution made by any of the Company
and there is no amount of advance corporation tax or
such Taxation which has not been utilised in reduction
of a tax liability of the Company that would otherwise
have arisen.
(f) Employee Benefits.
-----------------
(i) The Company has properly operated the Pay As You Earn
system or any similar system requiring tax to be paid
and/or deducted by the Company in respect of employee
remuneration, by making deductions or payments, as
required by the applicable Taxation legislation from
or in respect of all payments made, or treated as
made, to its directors, employees or officers or
former directors, employees or officers or any
persons required to be treated as such and accounting
to the appropriate Taxation authority for all
Taxation so deducted and for all Taxation chargeable
on the Company on benefits provided for its
directors, employees or officers, or former
directors, employees or officers.
(ii) The Disclosure Letter contains full details,
including the rules, of all share incentive and
remuneration schemes operated by the Company,
including but not limited to, share option schemes
and any profit-related pay schemes.
(iii) The Company has complied fully with all obligations
and liabilities in respect of social security matters
including, but not limited to, Class 1 and Class 1A
National Insurance Contributions both primary and
secondary in the United Kingdom.
(g) Group Transactions and Gifts.
----------------------------
(i) The Company has not at any time acquired any asset
from a company which at the time of the acquisition
was a member of the same group of the Company in
circumstances where a Taxation liability may arise in
respect of that asset as a result of this Agreement
being entered into or completed.
(ii) The Company has not entered into any agreement and is
not under any obligation, whether statutory or
otherwise, to accept or make a surrender of any form
of tax relief or tax losses or tax credit from or to
any other company and the Company has no liability
(contingent or otherwise) to make a payment in
respect of any such surrender.
(iii) The Company has not at any time been a party to any
reconstruction or re-organisation to which a
liability to Taxation could arise as consequence of
the combination of event or events occurring one or
more of which may occur after Closing.
(iv) There are no circumstances by virtue of which the
Company could be, assessed or charged to Taxation as
a result of the entering into, or Closing of, this
Agreement.
(v) There are no circumstances by virtue of which the
Company could be assessed to Taxation primarily
payable by another person.
(vi) The Company has not at any time acquired or disposed
of any asset or entered into any transaction or
arrangement whatsoever otherwise than by way of
bargain at arm's length or in respect of which there
may be substituted for the actual consideration
given or received by the Company a different
consideration for any Taxation purpose.
(vii) There is no outstanding charge in respect of
inheritance tax, estate or gift duty over any asset
of the Company or over any of its shares.
(viii) The Company has not received any asset by way of
gift.
(h) Tax Avoidance.
-------------
(i) The Company has not entered into or been party to
any scheme, arrangement or transaction which could
be challenged by any Taxation authority under any
statutory authority relating to the avoidance of
Taxation, including but not limited to, a general
anti-avoidance provision, or by any principles
established by case law, as being entered into or
been a party to for the purpose of partly or wholly
avoiding Taxation.
(ii) In respect of all transactions and arrangements as a
result of which the Company may be liable to suffer
an adjustment of profits, losses, income or
expenditure or otherwise under any transfer pricing
provision (including in respect of the United
Kingdom but not limited to the provisions of
sections 770-773 ICTA), the Company has obtained the
approval of the relevant Taxation authority or has
sufficient and appropriate evidence to justify the
pricing policy that has been implemented.
(i) Allowances.
----------
(i) There are set out in the Disclosure Letter details
of all capital allowances and/or depreciation
allowances claimed in respect of the accounting
period of the Company ending on the Accounting Date
in respect of each asset or pool of assets in
respect of which separate computations for such
capital allowances or tax deductible depreciation
expenses are required to be made or, as a result of
any election, are made.
(ii) Nothing has occurred since the date of the Financial
Statements, as a result of which the Company could
not claim capital allowances or depreciation
allowances in the current accounting period on the
same basis and in the same manner as those claimed
in respect of the accounting period of the Company
ended on the date of the Financial Statements.
(iii) The Company has not incurred any expenditure on any
fixed assets on which capital allowances or
depreciation allowances could not be claimed or made
in the future.
(j) Value Added Tax.
---------------
(i) The Company is duly registered and is a taxable
person for the purposes of value added tax and any
other similar turnover tax and such registrations
are not subject to any conditions imposed by or
agreed with any Taxation authority.
(ii) The Company has complied in all respects with all
statutory requirements, orders, provisions,
directions or conditions relating to value added tax
or such other similar turnover tax, and are not in
arrears with any payment or returns that are
required to be made to the Taxation authority.
(iii) Neither the Company nor the Warrantors have been or
have applied for treatment as a member of a group
for the purposes of value added tax or such other
similar turnover tax.
(iv) The Company is not, and has not agreed to become, an
agent, manager or factor for the purposes of value
added tax or any such similar turnover tax of any
person who is not resident in the country in which
the Company is based.
(v) All supplies of goods and services made by the
Company are taxable supplies for the purposes of the
legislation relating to value added tax or any such
similar turnover taxes and the Company has not been
and will not be denied credit for any value added
tax or any other such similar turnover tax in
respect of supplies of goods and services made to
the Company.
(vi) Neither the Company nor any relevant associate has
made an election to waive exemption from value added
tax in respect of any land in, over or in respect of
which the are Company has any interest, right or
licence to occupy and are not aware of any intention
to make such an election.
(k) Stamp Duty and Stamp Duty Reserve Tax.
-------------------------------------
(i) All documents which are liable for stamp duty and
which confer any right upon the Company has been
duly stamped and no such document which is located
in one country would attract stamp duty if it were
brought into another country and there is no
liability to any penalty in respect of such duty or
circumstances which may give rise to such a penalty.
(ii) The Company has never incurred or otherwise been
under a liability to stamp duty reserve tax in the
United Kingdom or other similar tax in any other
country and there are no circumstances which may
result in the Company or any of its Subsidiaries
being so liable.
(l) Residence and Offshore Interests.
--------------------------------
(i) The Company is and has at all times been resident in
the country in which it is incorporated for the
purposes of all Taxation legislation and has not at
any time been resident outside the country in which
it has been incorporated for the purposes of any
Taxation legislation or any double taxation
arrangements.
(ii) The Company has not at any time been subject to
Taxation in any jurisdiction outside the country in
which it has been incorporated or had a branch
outside that country or any permanent establishment
(as that expression is defined in the respective
double taxation relief orders current at the date of
this Agreement) outside the country in which it is
incorporated.
(iii) The Company does not own and has not at any time
owned any interest in a controlled foreign company
whose activities could give rise to a liability to
Taxation for the Company in the country in which the
Company has been incorporated.
(m) Tax Returns
-----------
All notices, returns, computations, registrations and
payments which should have been made by the Company for any Taxation purpose
have been made
within the requisite periods and are up-to-date, correct and on a proper basis
and none of them is the subject of any dispute with any Taxation authority.
2.9 Assets
------
(a) The Company owns or leases all tangible assets necessary for
the conduct of its business as presently conducted and as presently proposed to
be conducted. Such tangible assets, in the aggregate, are free from material
defects, have been maintained in the Ordinary Course of Business of the Company
and, in accordance with normal industry practice, and are suitable for the
purposes for which they presently are used.
(b) No asset of the Company (tangible or intangible) is subject to
any Security Interest.
2.10 Owned Real Property.
-------------------
The Company does not own any freehold property.
2.11A Supplier and Customer Relationships.
-----------------------------------
The Company has good commercial working relationships with its
customers and since the Balance Sheet Date no customer or supplier, accounting
for five percent (5%) or more of the Company's gross sales revenues or purchases
of supplies in the financial year ended on the Balanced Sheet Date, has
cancelled or otherwise terminated its relationship with the Company, decreased
or limited materially its purchases or materials supplied to the Company from
the previous financial year of the Company, or, to the Warrantors' knowledge,
threatened to take any such action.
2.11B. Product and Inventory Status. Product Quality, Warranty Claims.
---------------------------- --------------------------------
All products manufactured, sold, licensed, leased or delivered by
the Company and all services provided by the Company, to customers on or prior
to the Closing Date conform to in all material respects to all applicable
contractual commitments, express and validly non-disclaimed implied warranties,
published product specifications and published quality standards. The Company
has no existing unsatisfied contractual obligation for replacement, repair,
modification or upgrade of any Company product, except as expressly set forth in
those contracts with customers copies of which have been provided to the Buyer.
No product sold, leased or delivered by the Company, and no service provided by
the Company, to customers on or prior to the Closing Date is subject to any
express guaranty, express warranty or other indemnity (including without
limitation as to product reliability, security, interoperability, compatibility
(forward and backward), upgrade path or upgrade timing) except as expressly set
forth those contracts and side indemnity letters with customers copies of which
have been provided to the Buyer.
2.12 (a) Intellectual Property Rights.
----------------------------
(i) The Disclosure Letter contains a complete and accurate
list of all United States and foreign: (i) patents;
(ii) copyright registrations; (iii) trademarks
registrations and trademark intent-to-use
registrations; (iv) registered user licenses; (v) all
applications, provisional applications or other filings
for or to obtain any of the foregoing, and (vi) any
other similar registrations or applications for
Intellectual Property Rights (as defined below), if
any, owned by, or filed by or on behalf of, the Company
anywhere in the world (all of the foregoing, "Company
Registered Intellectual Property").
(ii) The Disclosure Letter contains a complete and accurate
list of all material software programs and other
products sold or licensed by the Company.
(iii) All Intellectual Property Rights are owned free and
clear of any Security Interest and are not subject to
any outstanding judgment, order, decree stipulation or
injunction.
(iv) The Company owns or has the right to use, sell or
license such Intellectual Property Rights (as defined
below) as are necessary or required for the conduct of
its business as presently conducted (such Intellectual
Property Rights being hereinafter collectively referred
to as the "Company IP Rights") and such ownership or
rights to use, sell or license are to the Warrantor's
knowledge reasonably sufficient for such conduct of its
business.
(v) The execution, delivery and performance of this
Agreement and the consummation of the transactions
contemplated hereby will not constitute a material
breach of any material instrument or material agreement
in respect of any Intellectual Property Rights licensed
by or to the Company (the "Company IP Rights
Agreements"), will not cause the forfeiture or
termination or give rise to a right of forfeiture or
termination of any material Company IP Right or
materially impair the right of the Company to use, sell
or license any material Company IP Right or portion
thereof. Neither the Company nor, to the knowledge of
the Warrantors, any other party to any of the Company
IP Rights Agreements is in material breach or default
thereof, and no event has occurred which with notice or
lapse of time would constitute a material breach or
default or permit termination, modification or
acceleration thereunder.
(vi) There are no royalties, honoraria, fees or other
payments payable by the Company to any person by reason
of the ownership, use, licence, purchase, sale,
disposition or acquisition of the Company IP Rights
(other than as set forth in the contracts listed in the
Disclosure Letter and produced to the Buyer).
(vii) To the Warrantors' knowledge, no third party is
infringing or misappropriating any Intellectual
Property Rights, including Company Registered
Intellectual Property, owned by the Company.
(viii) Neither the production, marketing, licence, sale nor
the intended use of any product currently licensed or sold by the Company or
currently under development by the Company violates any licence or agreement
between the Company and any third party or infringes or constitutes a
misappropriation of any patent, copyright or, to the Warrantors' knowledge,
other Intellectual Property Right of any other party; and there is not pending
or, to Warrantors' knowledge, threatened claim or litigation contesting the
validity, ownership or right to use, sell, licence or dispose of any Company IP
Right, nor has the Company received any notice asserting that any Company IP
Right or the proposed use, sale, licence or disposition thereof or of any
Company product conflicts or will conflict with the rights of any other party,
nor is there to Warrantors' knowledge any basis for any such assertion; and
(ix) The Company has not granted any licence pursuant to
which the Company has granted to any third party rights with respect to any
Company Intellectual Property Right (excluding licenses of the Company software
products granted in the Ordinary Course of Business). The Disclosure Letter sets
forth and summarizes each Intellectual Property Right that a third party owns
and that the Company uses pursuant to a licence, sublicense, agreement or other
permission (other than commercially available "off the shelf" software with a
purchase price of under $2,500 per copy, but this exclusion shall not apply to
the ELAN licence disclosed to the Buyer). With respect to each Intellectual
Property Right required to be identified in the Disclosure Letter: (i) the
licence, sublicense, agreement or permission will continue to be legal, valid,
binding, enforceable and in full force and effect on identical terms to the
Company's benefit immediately following the Closing and all consents to the
assignment of any thereof that are needed to enable the Company to have such
continued right have been obtained; (ii) the licence, sublicense, agreement or
permission does not restrict the Company's ability to do business in any
jurisdiction or with respect to any market or industry; (iii) the Company is not
in material breach or default of any such licence, sublicense, agreement or
permission, and no event has occurred which, with notice or lapse of time or
both, would constitute a material breach or default of, or permit termination,
modification or acceleration of, any such licence, sublicense agreement or
permission; (iv) to Warrantors' knowledge, the underlying Intellectual Property
Rights are not subject to any outstanding order or charge; (v) to
Warrantor's knowledge no action, suit, proceeding, hearing, investigation,
charge, complaint, claim, or demand is pending or, to Warrantors' knowledge, is
threatened which challenges the legality, validity or enforceability of any such
licence, sublicense, agreement or permission or any Intellectual Property Right
governed thereby. No person other than the Group Company holds any licence or
other right to produce, modify, distribute or market any of the Group Company's
products except as specified on the Disclosure Schedule. No person holds or has
been granted access to any copy of source code of any Company software unless
such person has agreed in writing (i) to hold such source code in confidence and
take reasonable steps to preserve the secrecy of such source code; and (ii) not
to use such source code for any purpose except upon breach of the Company's
support obligations to support such person's internal use of such source code or
to modify such source code solely for the purpose of internally using such
modifications.
(x) Other than as set forth in the Disclosure Letter and
in the list of bugs disclosed to the Buyer, there are no known material
deficiencies in the Company's current software products. To Warrantor's
knowledge, the Disclosure Letter contains a fair summary of the general subject
matter of all material customer complaints received by the Company concerning
the Company's current software products. Each of the Company's products complies
with the specifications set out in any disclosure materials provided by the
Company to the Buyer and conforms in all material respects to express
representations made and express warranties given by the Company to its
customers. The Company product, technical and marketing materials supplied by
the Company to the Buyer contain no material misstatements or omissions
regarding the state of development or completion, capabilities, features,
relative competitiveness or development status of any Company products that
collectively would have a material adverse effect on the Company. The Warrantors
know of no reason making it reasonably possible, as to the Company products in
development, that (i) the currently scheduled first customer ship dates thereof,
as represented in writing to the Buyer or as contractually committed to as to
any Company customer, will be materially delayed; or (ii) the aggregate
development costs therefor will materially exceed those currently projected in
the Company's current year operating plan.
(xi) The Company has taken reasonable steps, consistent
with industry standards, to protect the secrecy and confidentiality of all the
Company products and all data relating to Company Intellectual Property Rights.
The Company has also taken all other reasonable and practicable steps designed
to safeguard and maintain the secrecy and confidentiality of, and its
proprietary rights in, all material trade secrets or other confidential
information constituting Company IP Rights. To the Warrantors' knowledge, no
current or prior officers, employees or consultants of the Company claim an
ownership interest in any Company IP Rights as a result of having been involved
in the development of such property while employed by or consulting to the
Company or otherwise. All employees and contractors of the Company who have been
involved in the development of the Company's software products have assigned
their Intellectual Property Rights to the Company.
(xii) All of the Company's products, as such are currently
marketed, are Millennium Compliant as that term is defined in the Disclosure
Letter. The software sold
or licensed by the Company is also Euro Compliant (as such term is defined in
the Disclosure Letter) and to Warrantors' knowledge is fully compliant and
compatible with the CREST automated securities settlement system.
(xiii) To Warrantors' knowledge, no third party is in
possession of any material confidential information of the Company, except
pursuant to a written confidentiality agreement. The Company has not knowingly
taken or knowingly failed to take any action that, directly or indirectly, has
caused any of the Company's Intellectual Property Rights to enter the public
domain, or has in any way affected its absolute and unconditional ownership
thereof.
(xiv) None of the Company software licence agreements with
customers copies of which have not been provided to the Buyer ("the Undisclosed
licenses"):
(a) contain any warranties or indemnities as to
Millenium Compliance that are materially less favourable to the Company than
those contained in the Company software licence agreements with, or in the other
agreements and indemnity letters to, customers copies of which have been
provided to the Buyer ("the Disclosed licenses");
(b) are otherwise generally on terms that are in
all material respects at least as favourable to the Company as those in the
Disclosed licenses; or
(c) contain terms the effect of which is to impair
the Company's title to its Intellectual Property Rights in the Company software
covered by such Undisclosed licenses.
As used herein, the term "Intellectual Property Rights" shall mean all
industrial, intellectual property or other similar rights of a person in, to, or
arising out of: (i) any United States or other patent or any application
therefor and any and all reissues, divisions, continuations, renewals,
extensions and continuations-in-part thereof; (ii) inventions (whether
patentable or not in any country), invention disclosures, industrial designs,
improvements, trade secrets, proprietary information, know-how, technology and
technical data; (iii) copyrights, mask works, copyright registrations, mask work
registrations, and applications therefor in the United States or any other
country, and all other rights corresponding thereto throughout the world; (iv)
United States or other registered or common law trademarks, service marks, trade
dress, trade names, logos, intent-to-use registrations or notices, and
applications to register or use any of the foregoing anywhere in the world; and
(v) any other proprietary rights in technology, including software, all source
and object code, algorithms, architecture, structure, display screens, layouts,
inventions, development tools and all documentation and media constituting,
describing or relating to the above, including, without limitation, manuals,
memoranda, records, business information, or trade marks, trade dress or names,
anywhere in the world.
2.13 [DELIBERATELY LEFT BLANK]
2.14 Property
--------
(a) In this Article 2.14 references to the "English Properties"
shall be references to those properties listed in Part I of Schedule VI or to
any one or more of them as the context requires references to the "Foreign
Properties" shall be references to those Properties listed in Part II of
Schedule VI or to any one or more of them as the context requires references to
the Property shall be references to the English Properties and Foreign
Properties and references to the Leases shall be references to the leases of the
Property vested in the Tenant details of which are set out in Schedule VI.
(b) The particulars of the Property and the Leases shown in
Schedule VI are true and correct. The use of the Property for the purpose stated
in Schedule VI corresponds to the use to which it is in fact put or (where the
Property is not presently in use) to the use to which it was last in fact put.
(c) The Company has a good title to the Property for the estate or
interest stated in Schedule VI, free from any material defects.
(d) The Company is not in occupation of or entitled to any estate
or interest in any land or premises save the Property.
(e) The Company is not liable as an original tenant or as an
assignee (having given direct covenants to a landlord) or as a surety or
guarantor in respect of any property or premises or agreement in respect of the
same other than the Property.
(f) The Company requires the use or occupation of no other property
or premises to conduct its business other than the Property.
(g) The Company holds the original of all Leases which have been in
the case of the English Leases properly stamped and in the case of the Foreign
Leases subject to the payment of all appropriate taxes and levies and
formalities.
(h) Where any of the Leases are underleases such Leases where
granted with (where required) the prior written consent of any Superior
Landlord.
(i) Where underleases have been granted to third parties out of the
Leases the consent (where required) of the Superior Landlord was obtained prior
to the grant of such underleases.
(j) Save as contained in the Leases, the Property is not materially
affected by any of the following matters:
(i) any reservation, covenant, restriction, stipulation,
condition, exception, easement, wayleave, licence, lien, franchise, option,
right to acquire, mortgage,
charge, encumbrance overriding interest or other third party right, or any
contract to create, or claim made by any person to be entitled to, any of the
foregoing;
(ii) any matter which is of an onerous or unusual nature, or
which conflicts with the present use of the Property, or which would otherwise
restrict its continued possession and enjoyment, or which affects its value;
(iii) any outstanding breach or alleged breach of covenant or
of any other restriction or condition, or any dispute or complaint within the
three years prior to the date of this Agreement, whether actual or threatened,
with any neighbour, tenant, landlord or other person relating to the extent,
use, enjoyment or occupation of the Property or with regard to any actual or
alleged agreement, easement, right, covenant, liability or other matter
affecting or relating to the Property;
(iv) any outstanding notice, order, demand, resolution,
proposal, complaint or requirement issued or made, or to the knowledge of the
Company intended to be issued or made, by any local or other competent authority
or body concerning any of the following: compulsory acquisition, clearance,
demolition or closing, the carrying out of any work the modification of any
planning permission, enforcement of any breach or alleged breach of planning
control or the discontinuance of any use; or
(v) any outgoings (other than uniform business rates, water
charges and other standard payments including, without limitation, insurance
premiums) whether of a periodically recurring nature or otherwise, and whether
payable by the owner or occupier of the Property.
(k) The existing uses of the Property are lawful uses for the
purposes of all relevant legislation and any statutory consents for the use of
the Property are not temporary or personal in nature or subject to onerous or
unusual conditions.
(l) In respect of the English Properties the use of the Property
(and the use of plant and machinery in connection with it) and the construction
and layout of the Property (including any alteration carried out to it) are the
permitted user under and comply in all material respects with the provisions of
all relevant legislation (including but not limited to the Offices Shops and
Railway Premises Xxx 0000, the Town and Country Planning Xxx 0000, the Public
Health Acts 1936 to 1961, the Fire Precautions Xxx 0000, the Health and Safety
at Work etc. Xxx 0000, the Control of Pollution Xxx 0000, the Water Xxx 0000,
the Environmental Protection Xxx 0000, the Planning (Listed Buildings and
Conservation Areas) Xxx 0000, the Planning (Hazardous Substances) Xxx 0000, the
Planning (Consequential Provisions) Xxx 0000 and the Planning and Compensation
Act 1991) and regulations made under such legislation and are in accordance with
the requirements of the local planning, environmental health, building control,
fire and all other competent authorities and all restrictions, conditions and
covenants imposed by or pursuant to such legislation have been observed and
performed in all material respects.
(m) There are appurtenant to the Property all rights and easements
necessary for its present use and enjoyment, and in particular:
(i) save as contained in the Leases, none of the facilities
necessary for the enjoyment and use of the Property for its current use is
enjoyed on terms entitling any person to terminate or curtail its use; and
(ii) there is pedestrian and vehicle access to the Property
which is adequate for its present use and enjoyment and no restriction on use of
such access by anyone whom the Company may authorise to use the same.
(n) The Property is in a reasonable state of repair and condition
and fit for the purposes for which it is presently used.
(o) The copy Leases and other supplemental documentation (if any)
disclosed to the Buyer are true complete and accurate copies of the Leases and
other supplemental documentation and the Leases have not been varied in any way
whether by Deed or correspondence.
(p) In respect of the Leases:
(i) all rents, insurance premiums, service charges and other
amounts payable or (as the case may be) receivable by the Company, are fully
paid up to date, and any agreement or arrangement relating to any review or
variation of any such amount or to the timing of any payment of any such amount
has been completed and disclosed to the Buyer;
(ii) all tenant's covenants including (without limitation)
covenants as to use, alterations, repairs, decoration, sharing of facilities,
assignment, underletting, parting with or sharing possession, and termination
have been complied with in all material respects;
(iii) they are not subject to any unusual or onerous
restrictions, covenants or other provisions other than as disclosed or contained
in the Leases;
(iv) there is no material breach or alleged breach of any
material covenant or other provision nor any exercise or purported or threatened
exercise of any right of distraint, forfeiture or entry whether by the Company
or any other party; and
(v) where required the Company has obtained all necessary
licenses, consents, waivers or approvals in respect of any covenant or other
obligation contained in the Leases;
(q) All rents and other sums presently due under the Leases under
which the Company hold the Property have been paid.
(r) No Landlord of the Leases under which the Company holds the
Properties has refused to accept rent or other monies due under such leases
by means of an alleged breach of covenant by the Company.
(s) In respect of the English Properties no notices have been
served by the Company or by any landlord of the leases under which the Company
holds the Properties pursuant to the Landlord and Xxxxxx Xxx 0000.
2.15 Contracts.
---------
(a) The Buyer has been supplied with the following written
agreements to which the Company is a party:
(i) continuing contracts for the future purchase, sale or
manufacture of products, material, supplies, equipment or services requiring
payment to or from the Company of an amount in excess of $100,000 per annum;
(ii) each contract providing for the development of
technology for the Company which technology is used or incorporated in any
products currently distributed by the Company or is anticipated to be used or
incorporated in any planned products of the Company or which requires the
Company to perform specified development work for a third party;
(iii) each joint venture contract or agreement or other
agreement which have involved, or are reasonably expected to involve, a sharing
of profits or losses in excess of $25,000 per annum with any other party;
(iv) each indenture, mortgage, promissory note, loan
agreement, guarantee or other agreement or commitment
for the borrowing of money, for a line of credit (other
than in the Ordinary Course of Business) or for a
leasing transaction (other than equipment leases entered
into in the Ordinary Course of Business pursuant to
which payments by the Company do not exceed $100,000 in
the aggregate) or any other written agreement under
which the Company has created, incurred, assumed or
guaranteed (or may create, incur, assume or guarantee)
indebtedness (including capitalized lease obligations)
involving more than $100,000 for in the aggregate;
(v) each lease or other agreement under which the Company is
lessee of or holds or operates any items of tangible personal property or real
property owned by any third party and under which payments to such third party
exceed $50,000 per annum;
(vi) each agreement or arrangement for the sale of any
assets, properties or rights having a value in excess of
$100,000, other than in the Ordinary Course of Business
of the Company ;
(vii) each agreement which restricts the Company from engaging
in any aspect of its business or competing in any line
of business in any geographic area (including any
agreement pursuant to which the Company has granted
exclusive rights to a third party);
(viii) each Company IP Rights Agreement (as defined above),
other than standard form licence agreements with end
users (copies of which have been delivered to the Buyer
or its counsel), and, in any event, any agreement that
grants rights or access to any source code included in
the Company IP Rights;
(ix) each agreement between or among the Company or any
Company Stockholder regarding inter company loans,
revenue or cost sharing, ownership or licence of Company
IP Rights, inter company royalties or dividends or
similar matters; or
(x) each agreement granting distribution or resale right
with respect to any Company product.
The Disclosure Letter further includes details of the outstanding
maintenance and support obligations to be performed by the Company pursuant to
any contract or other arrangement, including a description of such obligations,
the names of the customers for whom such obligations must be performed, the
expiration date of such obligations and the fees payable to the Company in
respect of performance of such obligations.
(b) So far as the Warrantors are aware, there are no material
agreements to which the Company is a party which would not continue to be in
full force and effect immediately following the Closing in accordance with the
terms thereof as in effect prior to the Closing.
2.16 Powers of Attorney.
------------------
The Company is not, and has not since the Balance Sheet Date been, a
party to any agreement which involves delegation of any power under a power of
attorney or authorisation of any person (as agent or otherwise) to bind or
commit the Company to any obligation.
2.17 Insurance.
---------
A summary of current insurance policies (including fire, theft,
casualty, general liability, workers compensation, business interruption,
environmental, product liability and automobile insurance policies and bond and
surety arrangements) to which the Company is a party, a named insured, or
otherwise the beneficiary of coverage is attached to the Disclosure Letter; and
in relation thereto (i) each such insurance policy is in full force and effect;
(ii) the Company has not received any notice from the insurer disclaiming
coverage or reserving rights with respect to a particular claim or such policy
in general.
2.18 Litigation.
----------
(a) There is no action, suit, proceeding or investigation to which
the Company is a party (either as a plaintiff or defendant) pending or, so far
as the Warrantors are aware, threatened before any court, Governmental Entity or
arbitrator; (b) the Company has not been permanently or temporarily prevented or
enjoined by any order, judgment or decree of any court or Governmental Entity
from engaging in or continuing to conduct the business of the Company.
2.19 Remuneration and Employees.
---------------------------
(a) Full particulars of the identities, dates of commencement of
employment (or appointment to office) and terms and conditions of employment
(including remuneration and any bonus, commission or profit sharing arrangement)
of all the employees, consultants and officers of the Company are fully and
accurately set out in the Disclosure Letter. Save where it is expressly
disclosed to the contrary, all employees consultants and officers are engaged on
the standard terms and conditions of employment as set out in the Disclosure
Letter.
(b) There are no amounts owing to any present or former officers or
employees of the Company whose salary exceeds $100,000 per annum, other than
remuneration accrued (but not yet due for payment) in respect of the calendar
month in which this Agreement is executed or for reimbursement of business
expenses incurred during such month, and none of them is entitled to accrued
holiday pay other than in respect of the Company's current holiday year. There
are no bonus or commission payments outstanding or due to any employees,
consultants or officers save for such unpaid bonus or commission accrued by the
employees in the calendar month of this Agreement.
(c) No employee earning more than $80,000 per annum has been
engaged by the Company since the Balance Sheet Date and no person employed by
the Company at
or since the Balance Sheet has ceased, or given or received notice to cease, to
be so employed.
(d) There is no person previously employed by the Company who now
has a right to return to work or a right to be re-instated or re-engaged by the
Company under the provisions of the Employment Rights Act 1996 ("ERA") or
otherwise.
(e) The Company has not recognised, or done any act which might be
construed as recognition of, a trade union and the Company is not a party to any
collective agreement with any trade union or organisation of workers.
(f) The Company is not involved, and have not during the 12 months
prior to the date of this Agreement been involved, in any strike, lock-out,
industrial or trade dispute or any negotiations with any trade union or body of
employees.
(g) The Company neither has introduced nor has indicated to any
employee that it intends to introduce any share incentive scheme or arrangement,
share option scheme or arrangement or any other scheme or arrangement relating
to the acquisition of any interest in any shares in the Company for all or any
of its directors or employees.
(h) The Company neither has introduced nor has indicated to any
employee that it intends to introduce any short time working scheme or any
redundancy scheme under which payments greater than those required by statute
are payable.
(i) None of the products or services supplied by the Company are
produced or provided by outworkers, agency or other self-employed persons,
contracted labour or agents.
(j) All contracts of employment between the Company and its
directors and employees are terminable by the Company without compensation
(except under the ERA) by giving the applicable minimum period of notice
specified in section 86 ERA.
(k) There are no job share arrangements, flexible arrangements or
early retirement schemes applicable to any employees of the Company. There are
no schemes or programmes for the employment or training of people by the Company
other than under the Company's full control.
(l) The Company has in relation to all present and former employees
complied with all statutes, regulations, orders and codes of conduct relating to
employment and relations with employees and trade unions and has maintained
adequate and suitable records regarding the service of each of its employees and
complied with all agreements for the time being having effect as regards such
relations or the conditions of service of their employees (whether collectively
or individually).
(m) The Company has not granted any share options other than those
identified in Schedule V.
2.20 Environmental Matters.
---------------------
(a) The Company has complied in all material respects with all
applicable Environmental Laws (as defined below) relating to environmental
matters. There is no pending or, so far as the Warrantors are aware, threatened
civil or criminal litigation, written notice of violation, formal administrative
proceeding, or investigation, inquiry or information request by any Governmental
Entity, relating to any Environmental Law involving the Company. For purposes
of this Agreement, "Environmental Law" means any national, federal, state or
local law, statute, rule or regulation or the common law relating to the
environment or occupational health and safety, including without limitation any
statute, regulation or order pertaining to (i) treatment, storage, disposal,
generation and transportation of industrial, toxic or hazardous substances or
solid or hazardous waste; (ii) air, water and noise pollution; (iii) groundwater
and soil contamination; (iv) the release or threatened release into the
environment of industrial, toxic or hazardous substances, or solid or hazardous
waste, including without limitation emissions, discharges, injections, spills,
escapes or dumping of pollutants, contaminants or chemicals; (v) the protection
of wild life, marine sanctuaries and wetlands, including without limitation all
endangered and threatened species; (vi) storage tanks, vessels and containers;
(vii) underground and other storage tanks or vessels, abandoned, disposed or
discarded barrels, containers and other closed receptacles; (viii) health and
safety of employees and other persons; and (ix) manufacture, processing, use,
distribution, treatment, storage, disposal, transportation or handling of
pollutants, contaminants, chemicals or industrial, toxic or hazardous substances
or oil or petroleum products or solid or hazardous waste.
(b) To the knowledge of the Warrantors, there have been no releases
of any chemicals, pollutants or contaminants, hazardous substances, solid wastes
and hazardous wastes, toxic materials, oil or petroleum and petroleum products
into the environment at any parcel of real property or any facility formerly or
currently owned, operated or controlled by the Company.
(c) The Company has carried out no environmental reports,
investigations or audits (whether conducted by or on behalf of the Company or a
third party, and whether done at the initiative of the Company or directed by a
Governmental Entity or other third party) relating to premises currently or
previously owned or operated by the Company.
2.21 Legal Compliance.
----------------
The Company and the conduct and operations of its business are and
have been in material compliance with all laws (including rules and regulations
thereunder) of any federal, state, national or local government, or any
Governmental Entity, that (a) affects or relates to this Agreement or the
transactions contemplated hereby or (b) is applicable to the Company or its
business.
2.22 Certain Business Relationships With Affiliates.
----------------------------------------------
No Company Stockholder or any Affiliate of any Company Stockholder
(a) owns any property or right, tangible or intangible, which is used in the
business of the Company, (b) has any claim or cause of action against the
Company, (c) is a party to any contract or other arrangement, written or verbal,
with the Company, or (d) owes any money to the Company or is owed any money by
the Company (the agreements, arrangements and relationships described in this
sentence are hereinafter referred to as "Related Party Transactions").
2.23 Books and Records.
-----------------
The statutory and minute books and other similar records of the
Company contain up-to-date and accurate records of actions taken at any meetings
of the Company's stockholders, Board of Directors or any committee thereof and
of all written consents executed in lieu of the holding of any such meeting.
The books and records of the Company have been maintained in accordance with
good business and bookkeeping practices.
2.24 Fair Trading.
------------
(a) So far as the Warrantors are aware, no agreement, transaction,
practice or arrangement carried on or proposed to be carried on
by the Company (or by any person for whose acts or defaults the
Company may be liable), whether unilaterally or with others, or
to which the Company (or any such person) is or proposes to
become a party, and no state of affairs applicable to the
Company (or any such person):
(i) contravenes the provisions of the Resale Prices Xxx 0000
or is or has been the subject of any enquiry,
investigation or proceeding under any such legislation;
(ii) is or has been the subject of an enquiry, investigation,
reference or report under the Fair Trading Act 1973 (or
any other legislation relating to monopolies or mergers)
or the Competition Xxx 0000;
(iii) infringes or falls within the scope of Article 85 of the
Treaty establishing the European Union, or constitutes
an abuse of dominant position contrary to Article 86 of
the said Treaty, or infringes or falls within the scope
of any regulation or other enactment made under Article
87 of the said Treaty, or is or has been the subject of
any enquiry, investigation or proceeding in respect of
any thereof;
(iv) infringes or falls within the scope of any other
competition, anti-restrictive trade practice, anti-trust
or consumer protection law or legislation applicable in
the United Kingdom or elsewhere and not specifically
mentioned in this Section 2.24; or
(v) contravenes the provisions of the Trade Descriptions Xxx
0000.
(b) The Company has not made or threatened to make any complaint
against any other person to any relevant authority under any law or legislation
referred to in this Section 2.24.
(c) The Company has not given any assurance or undertaking to the
Restrictive Practices Court, the Director General of Fair Trading, the Secretary
of State for Trade and Industry, the Commission or Court of First Instance or
Court of Justice of the European Union, or any other similar court, person or
body.
(d) The Company has complied with all federal and state antitrust,
unfair competition and consumer protection laws of the United States and all
other countries in which it carries on business in all material respects, and no
agency charged with enforcing such laws has any open or pending investigation of
the Company's compliance with such laws.
2.25 Debtors.
-------
(a) The Company has not made, or entered into any agreement or
commitment whether conditional or unconditional and whether by deed, under hand,
oral or otherwise, and any arrangement or understanding whether legally binding
or not to make, any loan to, or other arrangement with, any person as a result
of which it is or may be owed any money other than trade debts incurred in the
Ordinary Course of Business and cash at bank.
(b) The Company is not entitled to the benefit of any debt
otherwise than as the original creditor and has not factored or discounted any
debt or agreed to do so.
(c) All of the debts which are reflected in the Interim Financial
Statements as owing to the Company (apart from bad and doubtful debts to the
extent to which they have been provided for in the said Interim Financial
Statements) or which have subsequently been recorded in the books of the Company
have realised or will realise in the normal course of collection their full
value as included in the said management accounts or in the books of the
Company, and no such debt nor any part of it has been or will be outstanding for
more than three months from its due date for payment.
2.26 Pensions
--------
(a) Save for The Braid Systems Limited Group Personal Pension Plan
("the Plan") and the WSO Directors Pension Scheme in respect of Xxxxx
Xxxxxxxxxxx ("the Executive Scheme") full particulars of which are attached to
the Disclosure Letter (together "the Pension Schemes") no agreement or
arrangement made by the Company exists for the provision of any relevant
benefits (as defined in section 612(1) ICTA) for any person employed or formerly
employed by the Company or for any person claiming through any such person and
except pursuant to the Pension Scheme the Company has not paid, provided or
contributed towards any relevant benefits for or in respect of any such person.
(b) The Company is not providing nor has customarily provided any
ex-gratia relevant benefits or other like payments for any person employed or
formerly employed by the Company or any person claiming through any such person.
(c) No undertaking or assurance has been given to all or any of the
persons employed or formerly employed by the Company as to the continuance,
introduction, increase or improvement of any retirement, death or disability
benefits or other like payments (whether or not there is a legal obligation to
do so).
(d) True and complete copies of the documentation currently
governing the Pension Schemes, and full particulars of the benefits and
entitlements under the Pension Schemes and the contributions payable to it have
been delivered to the Buyer in the form of inter alia:
(i) all announcements to employees of the Company relating
to pension matters in respect of benefit improvements or other amendments not
yet incorporated into the documentation of the Pension Schemes;
(ii) all explanatory booklets issued to employees of the
Company who are members of the Pension Schemes; and
(iii) membership summary (including names dates of birth
current salary length of service and contribution rates).
(e) All information made available to the Buyer or its advisers in
connection with the Pension Schemes is true and accurate in all material
respects and there is no omission therefrom.
(f) Braid Systems Limited has duly complied with its obligations
under the Pension Schemes and the Pension Schemes have at all times been
properly administered in accordance with the provisions of its governing
documentation and in compliance with the provisions of all relevant law,
legislation and governmental rules and regulations. The Company has not
conducted investment advice in breach of the Financial Services Xxx 0000.
(g) There is not in respect of the Pension Schemes or the benefits
thereunder any claims or actions in progress, pending or threatened (other than
routine claims for benefits) before (inter alia) the Courts, any Ombudsman, the
Occupational Pensions Regulatory Authority or the Occupational Pensions Advisory
Service.
(h) The Pension Schemes are approved as an exempt approved scheme
(within the meaning of Chapters I and IV of Part XIV of ICTA) and nothing has
been done which will or may result in the Pension Schemes ceasing to be approved
as an exempt approved scheme.
(i) All death in service benefits provided by the Company are fully
insured and all premiums by way of insurance which are payable have been duly
paid to the relevant insurance company and each member has been covered by such
insurance by the insurance company at its normal rates and on its normal terms.
(j) All taxes and expenses relating to the Pension Schemes which
have fallen due for payment have been paid. No services have been rendered in
respect of which an account or other invoice has not been rendered.
(k) All benefits under the Pension Schemes (other than those which
are fully insured) are determined by the value of the contributions paid in
respect of the members and there is no obligation (other than in the case of
those benefits which are fully insured) to provide any specified level of
benefits.
(l) There have been no claims brought by an employee or any former
employee of the Company or the spouse or dependant of any such person, in
respect of discrimination (whether direct or indirect) in the provision of
benefits on retirement or for life assurance (including claims made by a part
time employee in respect of having been denied such benefits or access to such
benefits) arising out of employment up to and including the date of Closing.
(m) The Warrantors have disclosed to the Buyer a statement of the
basis on which the Company has undertaken to contribute to the Pension Schemes
and the rate and the amount of contributions in respect of each member of such
scheme made since the commencement of the Pension Schemes. The Warrantors
confirm that all contributions and
costs payable by the Company in respect of the Pension Schemes as at Closing
have been paid.
(n) No assurance promise or guarantee (whether oral or written) has
been made or given to any member of the Pension Schemes of any particular level
or amount of benefits to be provided for or in respect of him under the Pension
Schemes on retirement death or leaving service. The Company may terminate any
obligation it may have to contribute to the Pension Schemes without incurring
any liability to any member of the Pension Schemes under any agreement or
arrangement with the member.
(o) Neither the Company nor any Subsidiary other than Braid Systems
Limited is participating or has participated in the Executive Scheme.
2.27 Dormant Subsidiaries
--------------------
None of the companies whose status is stated to be "dormant" in
Schedule IV Part 2 has any asset or liability (actual or contingent) or is under
any outstanding obligation to any person.
2.28 Information Memorandum
----------------------
To the Warrantors' knowledge, the information contained in the
Information Memorandum describing the Group and its business produced to the
Buyer (the "Information Memorandum") is materially in accordance with the facts
and does not omit anything materially likely to affect the import of such
information and expressions of opinion and belief contained therein are honestly
held and projections contained therein are based upon reasonable assumptions.
2.29 Third Party Consents
--------------------
Copies of all third party consents necessary to consummate the
transaction or permit the Company to continue using its rights under all the
Company Contracts (as defined above) notwithstanding the transaction hereby
contemplated are attached to the Disclosure Letter.
2.30 Insolvency etc
--------------
(a) No petition has been presented, no order has been made and no
resolution has been passed for the winding-up of the Company, no administrative
receiver, receiver and/or manager has been appointed of the whole or any part of
the property of the Company, no administration order has been made appointing an
administrator in respect of the Company, no petition has been presented for an
administration order in respect of the Company and no similar or equivalent step
or action has been taken in a jurisdiction other than the United Kingdom in
relation to the Company.
(b) No voluntary arrangement has been approved under Part I
Insolvency Act 1986 and no compromise or arrangement has been sanctioned under
section 425 of the Act in respect of the Company and no similar or equivalent
arrangement or compromise has been approved or sanctioned in a jurisdiction
other than the United Kingdom in which the Company were incorporated.
(c) No distress, execution or other process which remains
undischarged has been levied on the assets of the Company, the Company has not
stopped the payment of its debts or received written demands pursuant to section
123(1) (a) Insolvency Xxx 0000 and is not unable to pay its debts within the
meaning of section 123 Insolvency Act 1986 nor could it be deemed to be unable
to pay its debts within the meaning of section 123 Insolvency Xxx 0000, and no
similar or equivalent circumstance in respect of the payment of the Company's
debts has been encountered in a jurisdiction other than the United Kingdom in
which the Company were incorporated.
(d) No disqualification order has at any time been made pursuant to
the provisions of the Company Directors Disqualification Xxx 0000 against any
officer or employee of the Company or any person who is now such an officer or
employee, and no similar or equivalent order has been made in any other
jurisdiction relevant to the Company was incorporated outside the United
Kingdom.
2.31 Cash in Bank
------------
The net cash in bank of all the companies in the Group as at 28
February 1999 as stated in the books of those companies was not less than
US$2,265,000.
ARTICLE III
FURTHER WARRANTIES
OF THE COMPANY STOCKHOLDERS
3.1 Ownership of Stock; Authority.
-----------------------------
Each Company Stockholder severally acknowledges and warrants to the
Buyer as follows:
(a) He or she has legal and save for the Trustee and Xxxx Xxxxxx in
respect of the 8,660 shares held as trustee for Xxxxxx Xxxxxx beneficial title,
free and clear of any and all Security Interests, to all of the Shares listed on
Schedule I as being owned by him or her and such shares are fully paid and non-
assessable. He or she has the full right, power and authority to transfer,
convey and sell to the Buyer at the Closing the Shares to be sold by him or her
and, upon consummation of the purchase contemplated hereby, the Buyer will
acquire from him or her full legal and beneficial title to such Shares (and save
as provided for in the Bye-Laws of the Company), free and clear of all
covenants, conditions, restrictions, voting trust arrangements, proxies,
agreements, liens, charges, encumbrances, options and adverse claims or rights
of whatsoever nature.
(b) He or she has all requisite power and authority to execute and
deliver this Agreement and to perform his or her obligations hereunder. This
Agreement has been duly and validly executed and delivered by him or her or
their respective attorney pursuant to a valid and enforceable power of attorney,
and constitutes a valid and binding obligation of him or her.
(c) Neither the execution and delivery of this Agreement by him or
her, nor the consummation by him or her of the transactions contemplated
thereby, will (i) conflict with, result in a breach of, constitute (with or
without due notice or lapse of time or both) a default under, or require any
notice, consent or waiver under, any instrument, contract, agreement or
arrangement to which he or she is a party or by which he or she is bound, (ii)
result in the imposition of any Security Interest upon the Shares owned by him
or her, or (iii) violate any order, writ, injunction or decree applicable to
him or her or to the Shares.
(d) He or she has no claim in respect of any actual or contingent
liability or other obligation against the Company or any Subsidiary (save in
respect of his or her rights under any employment contract with any such
Company).
(e) He or she is not as at the date hereof a citizen of the United
States of America and is at such date not resident in the United States of
America for US tax purposes.
3.2 Xxxxxxx Xxxxxx, being one of the Company Stockholders, hereby
acknowledges and warrants to the Buyer that Fiscal Services International has
full right, power and authority to transfer, convey and sell to the Buyer at the
Closing the Shares to be sold by it free and clear of any and all Security
Interest, and upon consummation of the purchase contemplated hereby the Buyer
will acquire from it full legal and beneficial title to such Shares (and save as
provided for in the Bye-laws of the Company) free and clear of all covenants,
conditions, restrictions, voting trust arrangements, proxies, agreements, liens,
charges, encumbrances, options and adverse claims or rights of whatsoever
nature.
ARTICLE IV
WARRANTIES OF THE BUYER
The Buyer represents and warrants to each Company Stockholder as follows:
4.1 Organization.
------------
The Buyer is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware. The Buyer is an Accredited
Investor within the meaning of Schedule D to the Securities Act.
4.2 Authorization of Transaction.
----------------------------
The Buyer has all requisite power and authority to execute and deliver this
Agreement and to perform its obligations hereunder, including, without
limitation to issue the Buyer Common Stock to be issued by it in accordance with
this Agreement. The execution and delivery of this Agreement by the Buyer and
the performance thereof and the consummation of the transactions contemplated
thereby by the Buyer have been duly and validly authorized by all necessary
corporate action on the part of the Buyer. This Agreement has been duly and
validly executed and delivered by the Buyer and constitutes a valid and binding
obligation of the Buyer, enforceable against it in accordance with its terms,
except as to the effect if any of (a) applicable bankruptcy and other similar
laws affecting the rights of creditors generally and (b) rules of law governing
specific performance, injunctive relief and other equitable remedies.
4.3 Non-contravention.
-----------------
The execution and delivery of this Agreement by the Buyer and the
consummation by the Buyer of the transactions contemplated hereby will not (a)
conflict with or violate any provision of the charter or By-laws of the Buyer,
(b) require on the part of the Buyer any filing with, or permit, authorization,
consent or approval of, any Governmental Entity other than those already
obtained and other than filings in accordance with the applicable requirements
of the Securities Act and any applicable state securities laws, (c) to Buyer's
knowledge, in any material respect, conflict with, result in material breach of,
constitute (with or without due notice or lapse of time or both) a material
default under, any material instrument, contract or other arrangement to which
the Buyer is a party or by which the Buyer is bound, the effect of which would
be to enable a third party to enjoin the transactions hereby contemplated or to
materially impair the Company's ability to perform its obligations under this
Agreement, or (d) violate any order, writ, injunction, decree, statute, rule or
regulation applicable to the Buyer or any of its properties or assets.
4.4 Disclosure.
----------
The Buyer has made available to counsel to Company Stockholders complete
and accurate copies, as amended or supplemented, of (a) the Buyer's most recent
annual report on Form 10-K and (b) all Forms 10-Q and 8-K filed by Buyer with
the United States Securities and Exchange Commission (the "SEC") under Section
13 or 15 of the Securities Exchange Act of 1934 (as amended, the "Exchange Act")
since the end of its most recent fiscal year and up to the date of this
Agreement and all proxy materials distributed to Buyer's stockholders since the
most recent fiscal year end and up to the date of this Agreement ("Buyer
Reports"). As of their respective dates, the Buyer Reports did not contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
4.5 Litigation.
----------
(a) There is no material action, suit, proceeding or investigation
to which the Buyer is a party (either as a plaintiff or defendant) pending or,
so far as the Buyer is aware, overtly threatened, before any court, Governmental
Entity or arbitrator;
(b) The Buyer has not been permanently or temporarily enjoined by
any order, judgment or decree of any court or Governmental Entity from engaging
in or continuing to conduct the business of the Buyer, which in either case (a)
or (b) would have a material adverse effect on Buyer's ability to perform its
obligations under this Agreement, except in each case (a) or (b) for litigation
disclosed in the Buyer's Reports, if any.
4.6 Investment Representation.
-------------------------
The Buyer is acquiring the Shares from each Company Stockholder for its own
account for investment and not with a view to, or for sale in connection with,
any distribution thereof.
4.7 Brokers' Fees.
-------------
Except as to fees or commissions payable by the Buyer to Bear Xxxxxxx &
Co., the Buyer has no liability or obligation to pay any fees or commissions to
any broker, finder or agent with respect to the transactions contemplated by
this Agreement.
4.8 Survival.
--------
The foregoing representation of Buyer shall expire on July 1, 2000. Buyer
shall have no liability for breach of these Warranties in this Section 4 unless
the aggregate damage for all such breaches exceeds $500,000.
ARTICLE V
RESTRICTIVE COVENANTS
5.1 For the purpose of assuring to the Buyer the full benefit of each of
the Company and the Subsidiaries and in consideration for the Buyer agreeing to
buy the Shares on the terms of this Agreement, each of the Warrantors undertakes
to the Buyer that such Warrantor will not, without the prior written consent of
the Buyer whether directly or indirectly and whether alone or in conjunction
with, or on behalf of, any other person and whether as principal, shareholder,
director, employee, agent, consultant, partner or otherwise:
(a) for a period of three years immediately following the Closing
Date canvass, solicit or approach, or cause to be canvassed, solicited or
approached, for orders for goods or services competitive with those supplied by
the Company or any Subsidiary any person who at any time during the twelve
months immediately preceding the date of the Closing Date is or was:
(i) a client or customer of any of the Company or any
Subsidiary; or
(ii) in the habit of dealing with any of the Company or any
Subsidiary,
where the orders relate to goods and/or services which are competitive with or
of the type supplied by any of the Company or any Subsidiary at any time during
the twelve months immediately preceding the Closing Date;
(b) for a period of three years immediately following the Closing
Date, contract with any person who at any time during the twelve months
immediately preceding the Closing Date is or was:
(i) a client or customer of any of the Company or any
Subsidiary; or
(ii) in the habit of dealing with any of the Company or any
Subsidiary, in relation to goods and/or services which
are competitive with or of the types supplied by the
Company or any Subsidiary at any time during the twelve
months immediately preceding the Closing Date;
(c) for a period of three years immediately following the Closing
Date, interfere, or seek to interfere, with the continuance of supplies to any
of the Company or any Subsidiary from any supplier who has been supplying goods
and/or services to the Company or any Subsidiary at any time during the twelve
months immediately preceding the date of the Closing Date if such interference
causes or would cause that supplier to cease supplying, or materially reduce its
supply of, those goods and/or services;
(d) for a period of three years immediately following the Closing
Date solicit or entice, or endeavour to solicit or entice, away from any of the
Company or any Subsidiary, or employ, any person employed in a managerial,
supervisory, technical or sales capacity by, or who is or was a consultant to,
any of the Company or the Subsidiaries at the Closing Date or at any time during
the period of one month immediately preceding the date of the Closing Date;
(e) within (i) each of the countries in which the Company or any
Subsidiary has an office and (ii) each other country in which the Company or any
Subsidiary has sold goods and/or services in the period of one year immediately
prior to the Closing Date, for a period of three years immediately following the
Closing Date, be engaged, concerned or interested in, or provide technical,
commercial or professional advice to, in competition to the Company or the
Subsidiaries any other business which supplies goods and/or services which are
competitive with and of the type supplied by any of the Company or the
Subsidiaries at the Closing Date; provided that this restriction does not apply
to prevent any of the Warrantors from holding shares or other securities in any
company which are quoted, listed or otherwise dealt in on a recognised stock
exchange or other securities market and which confer not more than 3 per cent of
the votes which could be cast at a general meeting of such company; or
(f) use in connection with any business any name which includes the
name of any of the Company or the Subsidiaries or any colourable imitation of
it.
5.2 Each of the Warrantors acknowledges that such Warrantor has
information in respect of the business and financing of the Company or the
Subsidiaries and their dealings, transactions, affairs, plans and proposals, all
of which information is, or may be, secret or confidential and important to such
of the Company or the Subsidiaries. In this Article V such information is
called "Confidential Information" and includes, without limitation, confidential
or secret information relating to each of the Company's or the Subsidiaries'
trade secrets, know-how, ideas, business methods, finances, prices, business
plans, marketing plans, development plans, manpower plans, sales targets, sales
statistics, customer lists, customer relationships, computer systems and
computer software. Each of the Warrantors further acknowledges that the
disclosure of Confidential Information (whether directly or indirectly) to
actual or potential competitors of the Company or the Subsidiaries would place
that of the Company or the Subsidiaries at a competitive disadvantage and would
do damage (whether financial or otherwise) to its business. Each of the
Warrantors accordingly agrees to enter into the restrictions contained in
Section 5.3.
5.3 Each of the Warrantors undertakes that such Warrantor will not at any
time after Closing Date:
(a) disclose to any person except to those authorised by the relevant
company to know;
(b) use for the Warrantor's own purposes or for any purposes other
than those of the relevant Company or the Subsidiaries; or
(c) through any failure to exercise all due care and diligence cause
or permit any unauthorised disclosure of,
any Confidential Information of the Company or the Subsidiaries
provided that these restrictions on each Warrantor will cease to apply to
information which (otherwise than through the default of such Warrantor )
becomes available to the public generally.
5.4 The Parties agree that each of the undertakings set out in this
Article V is separate and severable and enforceable accordingly and if any one
or more of such undertakings or part of an undertaking is held to be against the
public interest or unlawful or in any way an unreasonable restraint of trade,
the remaining undertakings or remaining part of the undertakings will continue
in full force and effect and will bind each of the Warrantors.
ARTICLE VI
INDEMNIFICATION AND WARRANTY LIMITATIONS
6.1 Indemnification
---------------
Subject to the provisions of this Article VI, the Warrantors shall jointly
and severally indemnify the Buyer and shall hold the Buyer harmless against any
and all losses, claims, and monetary damages, fines, penalties and expenses and
costs suffered by the Buyer resulting from or relating to any breach of the
Warranties given to the Buyer provided that such indemnity shall not render the
Warrantors liable to the Buyer for any loss suffered by the Buyer in excess of
the diminution in value of the Shares resulting from any breach of Warranty,
together with any costs incurred in connection therewith and any interest
awarded on any judgment in respect thereof. The indemnity given in this Section
shall in the absence of fraud be the Buyer's sole remedy in relation to any such
breach and (without prejudice to its rights under the indemnity contained in
this Article 6.1) the Buyer shall be entitled upon the occurrence of any such
breach to require the Warrantors to pay to the Company the amount of any loss,
claim, monetary damages, fines, penalties, expenses and costs suffered or
incurred by the Company and/or any Subsidiary which would not have been so
suffered or incurred had there been no such breach.
6.2 Method of Asserting Claims.
--------------------------
(a) All claims for indemnification under Section 6.1 for breach of
Warranty or for payment under Section 2.8(b) ("Claim") by the Buyer pursuant to
this Article VI shall be made in accordance with the provisions of this Section
6.2.
(b) The Buyer shall give prompt written notification to the Warrantors
of the commencement of any action, suit or proceeding relating to a third party
claim in respect of which a Claim may be made under any of the Warranties.
Within 20 days after delivery of such notification and before taking any action
the Buyer shall consult with the Warrantors as to the defence of such action,
suit or proceeding. The Buyer shall keep the Warrantors advised of the status
of such action, suit or proceeding and the defence thereof and shall consider in
good faith recommendations made by the Warrantors with respect thereto. The
Buyer shall not agree to any settlement of such action, suit or proceeding
without the prior written consent of the Warrantors such consent not to be
unreasonably withheld or delayed Provided that where a Claim as aforesaid is
made against the Warrantors or any of them and the Warrantors accept liability
for such Claim then:
(i) if Xxxxxxx Xxxxxx shall not be a director of the Buyer at
such time; or
(ii) if the Claim is made pursuant to Section 2.12
within 20 days after delivery of the notification referred to above, the
Warrantors may (unless the relevant action, suit or proceeding involves a claim
for injunctive relief against any company in the Group) upon written notice
thereof to the Buyer assume control of the defence and upon so doing shall
consult with the Buyer as to the defence of such action, suit
or proceeding. The Warrantors shall keep the Buyer advised of the status of such
action, suit and proceeding and to the defence thereof and shall consider in
good faith recommendations made by the Buyer with respect thereto. The
Warrantors shall not agree to any settlement or the entry of a judgement in any
relevant action, suit or proceeding without the prior written consent of the
Buyer, such consent not to be unreasonably withheld or delayed. In deciding
whether any consent hereunder is being withheld unreasonably all relevant
circumstances shall be taken into account including primarily the requirement to
maintain the goodwill of any relevant customer, and the strength of the defence
of the relevant Company in the Group.
6.3 (a) No Warrantor shall have any liability under or in respect of a
Claim unless the aggregate amount of all such liabilities shall exceed the sum
of US$500,000 (in which event the liability shall be for the full amount and
shall not be limited to the amount of the excess); and the Warrantors shall not
be liable for an individual Claim if the amount thereof shall be less than
US$10,000 (and a Claim of less than US$25,000 shall not count in determining
whether the said sum of US$500,000 shall have been exceeded);
(b) The total aggregate liability of the Warrantors:
(i) under or in respect of all and any Claims shall be limited to
97.35% of the aggregate of the total consideration due to the Company
Stockholders under this Agreement, which shall be calculated as the aggregate of
the following:
(i) US$30m;
(ii) the lower of:
(1) $60m and
(2) the value of the 1,103,629 shares of Buyer Common
Stock issued as the Initial Shares calculated at the date upon which a Claim is
due to be settled; and
(iii) the amount of the Additional Consideration if paid in
cash or, if the Additional Consideration is satisfied by an issue of Buyer
Common Stock, the lower of:
(1) the cash value of the Additional Consideration,
and;
(2) the value of the number of shares of Buyer Common
Stock issued as the Additional Consideration calculated at the date upon which a
Claim is due to be settled.
and for this purpose the value of shares of Buyer Common Stock shall be the mid
market closing price on the relevant day on the Nasdaq National Market and
appropriate adjustments
shall be made applying the principles set out in Section 1.4 if any of the stock
split of similar events therein mentioned occur between issue of such shares and
the date upon which the relevant valuation is to be made.
(ii) notwithstanding Section 6.3(b)(i) (above) under or in
respect of all and any Claims under Section 2.8 shall be limited to
US$12,000,000 unless they arise in respect of the reorganisation of the Group
referred to in paragraph 10 of the Disclosure Letter (when, for the avoidance of
doubt, the limit in Section 6.3(b)(i) shall apply); and
(iii) notwithstanding Section 6.3(b)(i) (above), under or in
respect of all and any Claims other than any Claims under Section 2.8 or Section
2.12 (when, for the avoidance of doubt, the limit in Section 6.3(b)(i) shall
apply) shall be limited to US$12,000,000.
(c) No Company Shareholder shall have any liability under or in
respect of any Claim unless written particulars thereof (giving full details of
the specific matters in respect of which such Claim or Claims is made so far as
then known to the Buyer) shall have been given to the Warrantors:
(i) in relation to a Claim for breach of the Warranties other
than those given in Sections 2.8 and 2.12 prior to July 2000;
(ii) in relation to a Claim for breach of the Warranties given
in Section 2.8 and any claim under Section 2.8(b) prior to July 2005; and
(iii) in relation to a Claim for breach of the Warranties in
Section 2.12 prior to the third anniversary of the Closing Date,
and unless legal proceedings in respect thereof have where
practicable been commenced within six months of the date of service of such
written particulars.
(d) The Buyer admits that it has not entered into this Agreement in
reliance upon any representation, warranty or promise other than those expressly
incorporated in this Agreement.
(e) The Buyer shall not be entitled to recover damages or otherwise
obtain reimbursement or restitution more than once in respect of the same loss
whether under the Warranties set out herein or otherwise under this Agreement.
(f) Any amount paid by a Warrantor to the Buyer in respect of a
Claim shall be treated as a reduction pro tanto in the consideration paid to
that Warrantor.
(g) No Warrantor shall be liable for any Claim:
(i) to the extent that the Claim or such claim or the subject
matter of it is provided for in the Financial Statements or the Interim
Financial Statements; or
(ii) to the extent that it arises as a result of any
alteration enactment or re-enactment of any statute, statutory instrument or
other legislative or quasi legislative act or any change of law or published
administrative practice or practice of any taxation authority which occurs after
the Closing (including but without limitation any alteration in the rates of
taxation); or
(iii) to the extent that it is based upon a liability which is
contingent only unless and until such contingent liability becomes an actual
liability and is due and payable; or
(iv) to the extent that it arises or is increased as a result
of any change in the accounting policies or accounting practices of the Company
or any Group Company after Closing; or
(v) to the extent that it arises as a result of or is
otherwise attributable to any voluntary act or omission (other than in the
ordinary course of business) after Closing of the Buyer or the Company or any
Group Company in circumstances in which the Buyer knew or ought reasonably to
have known that such act or omission would occasion a Claim.
(h) If a Warrantor pays to the Buyer or the Company or a Group
Company an amount pursuant to a Claim and the Buyer or the Company or a Group
Company subsequently recovers by way of cash payment, discount, credit or
otherwise from a third party an amount in respect of a Claim which would have
reduced or eliminated the amount payable in respect of that Claim had it been
received before the payment by the Warrantor, then the Buyer shall forthwith
repay to that Warrantor so much of the amount paid by that Warrantor as is equal
to the amount (less the expenses, costs and fees incurred by the Buyer or the
Company or the Group Company in recovering the amount from such third party) by
which such Claim would have been reduced or if a Claim is eliminated the full
amount (less the expenses, costs and fees incurred by the Buyer or the Company
or the Group Company in recovering the amount from such third party so paid).
(i) The sole remedy of the Buyer for breach of the Warranties shall
be in damages or pursuant to the indemnity contained in Section 6.1 and the
Buyer shall not be entitled to rescind this Agreement.
(j) Where a Claim arises under Section 2.12(a)(xii) as a result of
a claim by a customer of a Subsidiary the amount claimed shall not cover the
costs to the Buyer and/or the relevant Subsidiary in rectifying the defect
giving rise to the Claim but shall extend to further or other amounts of which
the relevant Subsidiary shall be liable in law to the customer in question but
such further or other amounts shall be reduced by the amount of the licence fee
paid to the Group by such customer.
(k) None of the limitations contained in Section 6.2 or this
Section 6.3 shall apply to:
(i) any Claim arising under Section 2.8, except the
limitations contained in Sections 6.3(b) and 6.3(c)(ii); or
(ii) any Claim or claim for payment under Section 2.8(b)
which results from the fraud of any of the Company Stockholders or the
deliberate or wilful withholding of information by any of the Warrantors from
the Disclosure Letter.
(l) Nothing disclosed in the Disclosure Letter shall qualify or
otherwise affect the liability of the Warrantors under or pursuant to Section
2.8(b).
(m) No Warrantor shall be liable under Article II or Section 6.1
for any amount in excess of the value of the total consideration due to him
under this Agreement and, for this purpose only, the amount due to Fiscal
Services International shall be deemed to be due to Xxxxxxx Xxxxxx (and the
value of the consideration due to a Warrantor shall be determined by applying
the principles mutatis mutandis set out in Section 6.3(b)(i)).
(n) Where it falls to be determined whether a Claim exists by
reference to either (i) an amount specified in sterling or US$ in Article II, or
(ii) a limitation in liability based on a US$ amount contained in Section 6.3(a)
or (b) and the matter which does or may give rise to the Claim falls to be
measured in a currency different from sterling or US$ in the case of the
application of paragraph (i) or US$ in the case of the application of paragraph
(ii), then the amount in question shall be converted at the exchange rate
appearing in the Financial Times for the relevant currency and sterling and/or
US$ (as the case may be) on the date upon which the Claim is made upon the
Warrantors.
6.4 Survival.
--------
(a) Unless otherwise specified in this Section 6.4 or elsewhere in
this Agreement, all provisions of this Agreement shall survive the Closing and
the consummation of the transactions contemplated hereby and shall continue in
full force and effect in accordance with their terms. Nothing contained in this
Agreement shall release the Buyer from its common law duty to mitigate loss.
(b) The warranties of the Warrantors set forth in Articles II and
III above and the indemnification obligations set forth in this Article VI shall
survive the Closing and the consummation of the transactions contemplated hereby
of the Closing Date (in the case of all other warranties and the indemnification
obligations relating to the foregoing provisions).
(c) The date on which any particular warranty or indemnification
obligation of each of the Warrantors terminates shall be referred to herein as
the
"Termination Date." If a notice of a claim is given in accordance with the
notice provisions of this Agreement before the Termination Date, then
(notwithstanding the occurrence of the Termination Date) the representation,
warranty or indemnification obligation applicable to such claim shall survive
until, but only for purposes of, the resolution of such claim.
(d) The warranties of the Buyer set forth in Article IV above (i)
shall survive the Closing and the consummation of the transactions contemplated
hereby and (ii) shall not be affected by any examination made for or on behalf
of the Warrantors or the knowledge of any of the Warrantors.
6.5 Set-off.
-------
The Buyer shall be entitled to set-off against the Additional
Consideration due to be paid following Closing any amounts due to the Buyer in
respect of any claim under the Warranties or the indemnities contained in this
Article VI (subject to the limitations contained in this Article VI) which has
not been previously paid or satisfied by the Warrantors in accordance with the
terms of this Agreement.
ARTICLE VII
POST CLOSING COVENANTS
7.1 Director Appointment.
--------------------
As soon as is reasonably practicable following Closing, Xxxxxxx Xxxxxx
shall be appointed to the board of directors of the Buyer.
7.2 Operation of the Company Post-Closing.
-------------------------------------
During the Applicable Period (as defined in Part 3 of Schedule II
below) the Buyer shall conduct the business diligently and shall make all
business decisions and actions impacting on the Additional Consideration in good
faith and not for the intended or primary purpose of reducing the amount of the
Additional Consideration. In no event shall any decision or actions taken for
clearly legitimate business reasons that are approved in good faith by the
Buyer's board of directors or CEO after consultation with Xxxxx Xxxxxx or the
Stockholders' Representative (or in the case of an action that is reasonably
likely to have a significant adverse effect on the Additional Consideration,
after agreement with Xxxxx Xxxxxx or the Stockholders' Representative), or which
Xxxxx Xxxxxx or the Stockholders' Representative does not object in writing
within 30 days of such consultation, be deemed to have been taken in violation
of the preceding covenant. In the event that such a timely objection is made,
however, and it can be shown that the action or decision was taken during
the Applicable Period in violation of the preceding covenant, then the
Applicable Licensing Revenues (as defined in Part 3 of Schedule II below) shall
be adjusted to add to the Applicable Licensing Revenues those revenues that
would have been Applicable Licensing Revenues had such actions or decisions not
been taken by the Buyer. Absent agreement on such adjustment, either party may
apply for an Independent Accountant to resolve such dispute in the same manner
as contemplated by Section 9.8 of the Agreement. There shall be no other
limitations or restrictions on the Buyer's freedom of business activity
following the Closing other than as expressly set out above or otherwise
contained in this Agreement. The Buyer further covenants that during the
Applicable Period the Company Stockholders shall be entitled to nominate and
maintain one director on the board of directors of the Buyer and of any or all
of the former Company Subsidiaries (Xxxxxxx Xxxxxx being the first such nominee
appointee to the board of directors of the Buyer in accordance with Section
7.1.)
7.3 Transfer Restriction on Additional Consideration.
------------------------------------------------
If the Additional Consideration is to any extent paid in shares of
common stock of the Buyer, then each Company Stockholder or assignee thereof
receiving same from the Stockholders' Representative shall not resell in any
calendar month more than 1/3 of the aggregate number of such shares received by
such Company Stockholder or assignee. The Buyer may place legends and transfer
instructions reflecting such restriction. Such shares of common stock of the
Buyer shall be registered as provided in the Registration Rights Agreement
attached to this Agreement.
7.4 Adjustment of Additional Consideration.
--------------------------------------
Each Company Stockholder hereby irrevocably authorizes the
Stockholders' Representative to attend to all matters pertaining to the
Additional Consideration, including without limitation making any and all
determinations required to be made on behalf of the Company Stockholders as to
such Additional Consideration, settling any disputes with respect to the
determination of the amount, if any, of Additional Consideration due, and
negotiating with the Buyer any changes to Schedule II Part 3 that Stockholders'
Representative deems equitable or appropriate, and agreeing with the Buyer on
any point of interpretation regarding Schedule II Part 3. Each Company
Stockholder hereby irrevocably releases Stockholders' Representative from any
and all liability for so acting.
7.5 Payment of Additional Consideration.
-----------------------------------
The Buyer shall pay the Additional Consideration in accordance with
Part 3 of Schedule II.
ARTICLE VIII
DEFINITIONS and INTERPRETATION
8.1 Definitions.
------------
For purposes of this Agreement, each of the following defined terms is
defined in the Section of this Agreement indicated below.
Defined Term Section
----------------------------------------------- ------------------------
Additional Consideration 1.4
Affiliate 8.2(f)
Agreement Introduction
Agreement Date Introduction
Balance Sheet Date 2.5
Braid Subsidiaries 2.4
Business Entity 2.4
Buyer Introduction
Buyer Common Stock 1.4
Buyer Reports 4.4
Cash Payment 1.4
Certificates 1.3(a)
Claim 6.2(a)
Closing 1.1
Closing Date 1.3
Company Preliminary Statement
Company Registered Intellectual Property 2.10
Company IP Rights 2.10
Company IP Rights Agreement 2.10
Company Stockholders Introduction
Confidential Agreement 5.2
Disclosure Letter Article II
Dollars/$ 8.2(e)
Employees 2.17(a)
Employment Agreements 6.2(f)
Environmental Law 2.17(a)
ERA 2.19(d)
Exchange Act 4.4
Event 2.7
Executive Scheme 2.26
Financial Statements 2.5
Governmental Entity 2.3
Independent Accountant 8.2(f)
Group Company 9.8
Initial Shares 1.4
Intellectual Property 2.10(a)
Intellectual Property Rights 2.10
Interim Financial Statements 2.5
in the agreed form 8.2(a)
Liabilities 2.10
Ordinary Course of Business 2.6
Other Sellers Introduction
Other 5.2
Parties Introduction
Pension Schemes 2.26
Plan 2.26
Pounds/$ 8.2(e)
Purchase Price Adjustment 1.4
Related Party Transactions 2.22
Relief 2.7
SEC 4.4
Securities Act 2.3
Security Interest 2.3
Shares Preliminary Statement
Software 7.3
Stockholder's Representative 1.6
Stock Options 2.2
Stock Value Schedule II, Part 2
Subsidiaries 2.4
Tax Returns 2.8
Taxation 2.7
Taxes 2.8
Termination Date 6.4(c)
Total Initial Shares Schedule II, Part 2
Trustee 1.1
UK GAAP 2.5
Warranties Article II
Warrantors Introduction
8.2 Interpretation
--------------
Except where the context otherwise requires:
(a) References to documents "in the agreed form" shall be in the form
of the document initialled by each of the parties hereto or by their respective
legal advisers for the purposes of identification only.
(b) References to Sections, subsections and schedules in this
Agreement are references to Section, subsections and schedules of this
Agreement.
(c) References to statutory provisions shall be construed as
references to those provisions as respectively amended or re-enacted or the
provisions by which they have been replaced (before the date hereof) and shall
include any provisions of which they are re-enactments (whether with or without
modification) and any orders, regulations, instruments or other subordinate
legislation made from time to time under the statute concerned before the date
hereof.
(d) References to the masculine shall include a reference to the
feminine and/or neuter and vice versa and references to the singular shall
include the plural and vice versa.
(e) References in this Agreement to "$," or "Pounds" shall mean pounds
sterling and references to "$" or "Dollars" shall mean the lawful currency of
the United States.
(f) References to "Group Company" shall mean the Company and its
Affiliates. In this Agreement, the term "Affiliates" shall mean (A) in the case
of an individual, the members of the immediate family (including parents,
siblings and children) of (i) the individual and (ii) his or her spouse and
(iii) any Business Entity that directly or indirectly, through one or more
intermediaries controls, or is controlled by, or is under common control with
any of the foregoing individuals, or (B) in the case of a Business Entity,
another Business Entity or a person that directly or indirectly, through one or
more intermediaries controls, or is controlled by, or is under common control
with the Business Entity.
(g) References to Charters and Bye-Laws shall include a reference to
the relevant constitutional documents of each of the Group Companies.
ARTICLE IX
GENERAL PROVISIONS
9.1 Press Releases and Announcements.
--------------------------------
No party to this Agreement shall issue any press release, public
statement or announcement relating to the subject matter of this Agreement
without the prior written approval of the Buyer and the Warrantors (such
approval not to be unreasonably, withheld or
delayed) provided, however, that any Party may make any public disclosure it
believes in good faith is required by law or regulation (in which case the
disclosing Party shall advise the other Parties and provide them with a copy of
the proposed disclosure prior to making the disclosure).
9.2 No Third Party Beneficiaries.
----------------------------
This Agreement shall not confer any rights or remedies upon any person
other than the Parties and their respective successors and permitted assigns.
9.3 Entire Agreement.
----------------
This Agreement and the exhibits and schedules attached hereto and any
other agreements entered into pursuant to this Agreement, by and between the
Buyer and the Company Stockholders, constitute the entire agreement among the
Parties and supersede any prior understandings, agreements, or representations
by or among the Parties, written or oral, that may have related in any way to
the subject matter of this Agreement.
9.4 Succession and Assignment.
-------------------------
This Agreement shall be binding upon and inure to the benefit of the
Parties named herein and their respective successors and permitted assigns. No
Party may assign either this Agreement or any of its rights, interests, or
obligations hereunder without the prior written approval of the other Parties.
9.5 Counterparts.
------------
This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original but all of which together shall constitute one
and the same instrument.
9.6 Headings.
--------
The section headings contained in this Agreement are inserted for
convenience only and shall not affect in any way the meaning or interpretation
of this Agreement.
9.7 Notices.
-------
All notices, requests, demands, claims and other communications
hereunder shall be in writing. Any notice, request, demand, claim, or other
communication hereunder shall be deemed duly delivered three business days after
it is sent by registered or certified mail, return receipt requested, postage
prepaid, or one business day after it is sent via a reputable nationwide
overnight courier service, in each case to the intended recipient as set forth
below:
If to the Company Stockholders: Copy to:
------------------------------ -------
Xxxxxxx Xxxxxx Xxxxxxx Xxxx and Xxxx
c/o Messrs Xxxxxxx Xxxx & Xxxxxxx International
Clarenden House Xxxxxxxxx Xxxxx
0, Xxxxxx Xxxxxx 00 Xxxxxxxxxxx
Xxxxxxxx XX00 Xxxxxx XX0X 0XX
Bermuda
Attn: Xxxxx Xxxxxxxxx
If to the Buyer: Copy to:
--------------- -------
TSI International Software Fenwick & West
00 Xxxxxxx Xxxx Two Palo Alto Square
Wilton Palo Alto
Connecticut 00000-0000 XX 00000
XXX XXX
Attn: Xxxxxx Xxxxxx Attn: Xxxxx Xxxxx
Any Party may give any notice, request, demand, claim or other
communication hereunder by personal delivery or telescopy, but no such notice,
request, demand, claim or other communication shall be deemed to have been duly
given unless and until it actually is received by the Party for whom it is
intended. Any Party may change the address to which notices, requests, demands,
claims and other communications hereunder are to be delivered by giving the
other Parties notice in the manner herein set forth.
9.8 Independent Accountant.
----------------------
If there is any dispute as to the calculation of the equitable
adjustment to the number of the Buyer Shares to be issued as Additional
Consideration or pursuant to the exchange of Option referred to in Section 1.6
then where provided for by and in accordance with those provisions that dispute
shall be referred to an independent firm of accountants based in London (the
"Independent Accountants"). Within 10 days of such notice the Buyer and the
Company Stockholders shall designate in writing the Independent Accountants to
resolve the dispute, provided that if the appointment cannot be agreed by the
Buyer and the Company Stockholders the Independent Accountants shall be selected
by the President for the time being of the Institute of Chartered Accountants of
England and Wales on the application of either party. The Independent
Accountants shall act as expert and not as arbitrator and their decision shall,
in the absence of manifest error, be final and binding on the parties. The costs
of the Independent Accountants shall be paid by the Company and the Parties
agree to give all reasonable co-operation and, to the extent relevant and
necessary,
full access to their books, records, property and personnel and those of the
Company and the Subsidiaries for such purpose.
9.9 [DELIBERATELY LEFT BLANK]
9.10 Governing Law.
-------------
Save as provided in Section 9.8 above, any controversy or claim of
whatever nature arising out of or relating to this Agreement or breach thereof
shall be governed by and construed in accordance with the laws of England and
Wales and the parties hereto irrevocably agree to submit to the non-exclusive
jurisdiction of the courts of England and Wales.
9.11 Amendments and Waivers.
----------------------
The Parties may mutually amend any provision of this Agreement at any
time by a written instrument signed by all of the Parties. No waiver by any
Party of any default, misrepresentation, or breach of warranty or covenant
hereunder, whether intentional or not, shall be deemed to extend to any prior or
subsequent default, misrepresentation, or breach of warranty or covenant
hereunder or affect in any way any rights arising by virtue of any prior or
subsequent such occurrence.
9.12 Expenses.
--------
The Buyer shall bear its own costs and expenses (including fees and
expenses of their respective legal, accounting and financial advisors) incurred
in connection with this Agreement and the transactions contemplated hereby. The
Buyer shall pay an amount equal to the costs and expenses of the Company
Stockholders (including fees and expenses of their respective legal, accounting
and financial advisers) properly incurred by them in connection with this
Agreement and the transaction contemplated hereby at Closing up to a maximum
amount of US$2,265,000.
9.13 Construction.
------------
The language used in this Agreement shall be deemed to be the
language chosen by the Parties hereto to express their mutual intent, and no
rule of strict construction shall be applied against any Party. Any reference to
any federal, state, local, or foreign statute or law shall be deemed also to
refer to all rules and regulations promulgated thereunder, unless the context
requires otherwise.
9.14 Incorporation of Exhibits and Schedules.
---------------------------------------
The Exhibits and Schedules identified in this Agreement are
incorporated herein by reference and made a part hereof.
9.15 Further Assurance
-----------------
The parties agree that they will do all such acts and things and
execute all such documents as may be required on or subsequent to Closing to
vest in the Buyer legal and beneficial ownership of the Shares, to vest in the
Stockholders Representative the Buyer Common Stock and the Additional
Consideration in accordance with this Agreement and otherwise to give effect to
its terms.
9.16 Appointment of Agent for Service
--------------------------------
(a) The Warrantors irrevocably appoint in the case of each of them,
Xxxxxxx Xxxxxx, x/x Xxxxxx Xxxxx, 00 Xxxxxxxxxxxxx, Xxxxxx XX0X 0XX to be their
agent for the service of process in England. Each Warrantor agrees that any
document may be effectively served on them in connection with proceedings in
England and Wales by service on their agent and submit to the non-exclusive
jurisdiction of the courts of England and Wales.
(b) The Buyer hereby irrevocably appoints Excellet Investments Limited,
c/o Eversheds, Senator House, 00 Xxxxx Xxxxxxxx Xxxxxx, Xxxxxx XX0X 0XX to be
its agent for the service of process in England. The Buyer agrees that any
document that may be effectively served on it in connection with proceedings in
England and Wales by service on its agent and submits to the non-exclusive
jurisdiction of the Courts of England and Wales.
SCHEDULE 1
Part 1
The Warrantors
Name Address Company Common Stock
---- ------- --------------------
Xxxxxxx Xxxxxx c/o Conyers Xxxx & Xxxxxxx
Xxxxxxxxx Xxxxx
0, Xxxxxx Xxxxxx
Xxxxxxxx XX00
Xxxxxxx
Xxxxx Xxxxxx 00 Xxxxxxx Xxxxxx 682,192
Xxxxxx X0 0XX
Xxxxxxx Xxxxxxx 0 Xxxxxx Xxxx 000,000
Xxxxxx X00 0XX
Part 2
Other Sellers
Name Address Company Common Stock
---- ------- --------------------
Fiscal Services International XX Xxx 000 2,205,825
as Trustees of the Little No. Queens House
1 Don Road
Trust St Helier
Jersey JE4 0TH
Fiscal Services International XX Xxx 000 2,457,924
as Nominee for Xxxxxxx Xxxxxx Xxxxxx Xxxxx
Xxx Xxxx
Xx Xxxxxx
Xxxxxx XX0 0TH
Mr Xxxxxx Xxxxx c/o Braid PTE Ltd 10,220
12-04 Xxxx Xxxx Tower
000 Xxxxx Xxxxxx
Xxxxxxxxx
000000
Xx Xxxxx Xxxxxx 8 Wilderness Mount 25,200
Sevenoaks
Kent XX00 0XX
Xx Xxxxx Xxxx Merrilies Cottage 25,900
Xxxxxxxx Xxxx
Xxxxxxx
Xxxxxx XX00 0XX
Xx Xxxxxx Xxxxxx 0 Xxxxxxx Xxxx 9,800
Xxxxxxxxx
Xxxx XX0 0XX
Xx Xxxx Xxxxxx 00 Xxxxxxx Xxxxxx 0,000
Xxxxxxx Xxxxx
Xxxxxx X00 0XX
Xx Xxxxxxxx Xxxxxxxx 00 Xxxxxx Xxxx 11,200
Chesham Bois
Bucks. XX0 0XX
Xx Xxxxxx Xxxxxxx Xxxxx Xxxxxxx House 61,600
Xxxxxx Xxxxxxx Xxxxx
Xxxxxx Xxxxxxxxx
Xxxxx.
XX00 0XX
Xx Xxxx Xxxxxxx Dandilions 9,800
0 Xxxxxx Xxxx
Xxxxxxxxx
Xxxxxx XX00 0XX
SCHEDULE II
-----------
Part 1
Cash Payments to Company Stockholders
Name Amount
---- ------
Fiscal Services International US$10,739,654
as Trustees of the Little No. 1 Trust
Fiscal Services International US$13,967,737
as Nominee for Xxxxxxx Xxxxxx
Xxxxx Xxxxxx US$1,320,767
Xxxxxxx Xxxxxxx US$3,176,383
Xxxxxx Xxxxxxx Xxxxx Xxxxxx US$299,916
Xxxxx Xxxxxx US$122,693
Xxxxx Xxxx US$126,101
Xxxxxx Xxxxx US$49,759
Xxxx Xxxxxx US$47,032
Xxxxxxxx Xxxxxxxx US$54,530
Xxxx Xxxxxxx US$47,714
Xxxxxx Xxxxxx US$47,714
Part 2
Initial Shares
Name Number of Buyer Common Stock
---- ----------------------------
Fiscal Services International 395,086
as Trustees of the Little No.1 Trust
Fiscal Services International 433,648
as Nominee for Xxxxxxx Xxxxxx
Xxxxx Xxxxxx 128,779
Xxxxxxx Xxxxxxx 116,853
Xxxxxx Xxxxxxx Xxxxx Xxxxxx 11,033
Xxxxx Xxxxxx 4,514
Xxxxx Xxxx 4,639
Xxxxxx Xxxxx 1,831
Xxxx Xxxxxx 1,730
Xxxxxxxx Xxxxxxxx 2,006
Xxxx Xxxxxxx 1,755
Xxxxxx Xxxxxx 1,755
Part 3
Additional Consideration
The Additional Consideration shall consist of the following, at Buyer's sole
option: (i) cash in the amount of the Designated Value (as defined below) and/or
(ii) such whole number of shares of common stock of the Buyer as is as near as
may be equal in value to the Designated Value and for this purpose the value of
a share of Buyer Common Stock shall be the average closing price of the Buyer
Common Stock on The NASDAQ Stock Market for the fourteen (14) trading days
ending on the business day five calendar days prior to the date upon which the
Additional Consideration is paid in the case of cash or delivered in the case of
stock under the terms of this Part 3, or in some combination of cash or such
stock aggregating in value to the Designated Value, with the value of the stock
consideration determined as set out above.
The Additional Consideration shall, if due hereunder, be paid to the
Stockholders' Representative in accordance with Section 1.6c of the Agreement no
later than the date that Buyer files its quarterly report on Form 10-Q for the
period ended March 31, 2000.
In the event that the Applicable Licensing Revenues (as defined below) for the
Applicable Period (as defined below) (plus the increase in deferred Applicable
Licensing Revenues from that at February 28, 1999 to that at March 31, 2000, if
any) (collectively the "Credited Revenues") are equal to or greater than 90% of
the Braid Operating Plan Revenue Amount (as defined below) the Designated Value
shall be equal to US$20,000,000 (Twenty Million Dollars); in the event that the
Credited Revenues are less than or equal to 50% of the Braid Operating Plan
Revenue Amount, the Designated Value shall be equal to $0.00; and in the event
that the Credited Revenues are less than 90% of the Braid Operating Plan Revenue
Amount but are greater than 50% of the Braid Operating Plan Revenue Amount, the
Designated Value shall be equal to $500,000 (1/40th of US$20,000,000 (Twenty
Million Dollars)) multiplied by the number of percentage points (including
partial percentage points) that the Credited Revenues exceed 50% of the Braid
Operating Plan Revenue Amount. For example, if the Credited Revenues are 50.9%
of the Braid Operating Plan Revenue Amount the Designated Value shall be
$450,000.00 (.9 x $500,000); if the Credited Revenues are 51% of the Braid
Operating Plan Revenue Amount the Designated Value shall be $500,000 (1 x
$500,000); if the Credited Revenues are 89% of the Braid Operating Plan Revenue
Amount the Designated Value shall be $19,500,000 (39 x $500,000); and if the
Credited Revenues are equal to or above 90% of the Braid Operating Plan Revenue
Amount the Designated Value shall be $20,000,000.
Notwithstanding the foregoing, in the event that (a) Buyer is acquired in a
business combination (whether accomplished by merger, tender offer, share
exchange or purchase of substantially all Buyer assets or stock) and following
the closing thereof ("Closing") the shareholders of Buyer collectively hold less
than a majority interest in the acquiring entity or the parent thereof ("Change
of Control Transaction"), (b) such acquiring entity or parent or
subsidiary thereof is prior to Closing in the business of offering products that
compete with the Company Software, (c) the date of the Closing of the Change of
Control Transaction ("Closing Date") occurs prior to March 31, 2000; and (d) the
Applicable Licensing Revenues for the portion of the Applicable Period ending on
the Closing Date (plus the increase in deferred Applicable Licensing Revenues
from that at February 28, 1999 to that at the Closing Date, if any) exceeds the
Predicted Braid Operating Plan Revenue Amount (as defined below), then the
Designated Value shall be equal to US$20,000,000 (Twenty Million Dollars) and
the Additional Consideration shall be paid to the Stockholders' Representative
in accordance with Section 1.6c of the Agreement no later than the date that
Buyer or the acquiror or parent thereof files its report on Form 10-Q for the
period including the Closing Date. If the Applicable Licensing Revenues for the
portion of the Applicable Period ending on the Closing Date (plus the change in
deferred Applicable Licensing Revenues from that as February 28, 1999 to that at
the Closing Date, if any) do not exceed the predicted Braid Operating Plan
Revenue Amount then the above provisions of this paragraph shall not apply and
the Designated Value shall be calculated and payable in accordance with the
remaining provisions of this Schedule. If payment of the Designated Value is
made under this paragraph, then no further payments shall be payable under any
other paragraph in this Schedule.
Notwithstanding anything in Section 9.3 of the Agreement to the contrary, for
the purpose of this Part 3, the following terms shall have the indicated
meanings:
The Applicable Period shall be that thirteen (13) month period beginning on
March 1, 1999 and ending on March 31, 2000.
The Braid Operating Plan Revenue Amount shall mean the sum of $15,121,000.
Predicted Braid Operating Plan Revenue Amount shall mean the revenue predicted
in the Information Memorandum for the period after March 1, 1999 to the Closing
Date (including the pro rata revenue for any quarter not completed).
The Company Software shall mean the products known as "Braid Messenger",
"Freeway", "Gemini" and "Nimbus" and successor products. "Successor Products"
shall mean any computer program, source code (high-level language version of any
item or component of computer software in a form in which the program logic is
easily deduced by a human being) or object code (computer executable version of
any item or component of software) which contains any of the source code of the
Company Software whether or not it was developed by or on behalf of the Company,
the Subsidiaries, the Buyer or any of their Affiliates.
The Financial Services Division shall mean all people employed by the Company or
any of the Subsidiaries at the date of this Agreement and their successors (the
"Braid Team") and new people employed to work as part of the Braid Team together
with persons employed from time to time by the Buyer or its Subsidiaries engaged
in the sale of the company software.
Applicable Licensing Revenue shall mean all software licensing revenue (whether
from Company Software or other Buyer software), as determined under U.S. GAAP
and incorporated into the Company's revenues as reported in consolidated
financial statements filed with Company's 1934 Act Reports, generated by the
activities of the Financial Services Division or resulting from the licensing of
Company Software, subject to adjustment as provided in Section 9.3 of the
Agreement. For the avoidance of doubt, (i) revenue from consulting services or
maintenance or support services and (ii) revenue attributable to term use
contracts for the Buyer's KEY/master products, shall not be deemed to be
software licensing revenue. In the event of any restructuring of the Buyer or
the Financial Services Division by the addition or the elimination of a material
number of personnel (by that restructuring or by a series of restructurings)
other than as contemplated in the mutually agreed Braid Operating Plan for the
Applicable Period, or in the event of the acquisition of any company or business
affecting the Financial Services Division, or in the event that the Buyer takes
another business decision that is materially likely to result in a material
reduction in the Additional Consideration and that is not taken to address a
material failure of the Financial Services Division to be on plan, Buyer and
Stockholders' Representative will in good faith discuss an equitable adjustment
to this Part 3 so as to achieve as nearly as is possible the intended purpose of
the foregoing provisions in the new or changed circumstances. Absent agreement
on such adjustment, either party may apply for an Independent Accountant to
resolve such dispute in the same manner as is contemplated in Section 9.8 of the
Agreement.
Buyer shall have the discretion to pay the Additional Consideration in full at
any time before it becomes due in accordance with this Schedule.
SCHEDULE III
------------
[DELIBERATELY LEFT BLANK]
SCHEDULE IV
-----------
Part 1
Details of the Company
Name: Braid Group Limited
Registered Office: Xxxxxxxxx Xxxxx, 0 Xxxxxx Xxxxxx, Xxxxxxxx XX, Xxxxxxx
Registered Number: EC 24200
Authorised Share Capital: US$12,000,000 divided into 12,000,000 Ordinary Shares of $1.00 each
Issued Share Capital: US$6,161,721
Directors: Xxxxxxx Xxxxxx
Xxxxx X Xxxxx
Secretary: Xxxxxxxxx Xxxxxxx
Xxxxx X Xxxx (Assistant)
Charges: None
Auditors: PricewaterhouseCoopers
Part 2
Details of the Subsidiaries
Name: Braid Systems Limited
Registered Office: 000 Xxxxxxxxx Xxx, Xxxxxx XX0X 0XX
Registered Number: 01293378
Authorised Share Capital: $100,000 divided into 1,000,000 Ordinary Shares of ,0.10 each
Issued Share Capital: $14,128.20 divided into 141,282 Ordinary Shares of $0.10 each
Directors: Xxxxxxxx Chick
Xxxxx Xxxxxx
Xxxxxxx Xxxxxx
Xxxxx Xxxxxx
Xxxxxxx Xxxxxxx
Xxxxx Xxxxx
Xxxxx Xxxxx
Xxxxx Xxxxxx
Non-executive Director: Xxxxxx Xxxxxx
Secretary: Xxxxxxx Xxxxxxx
Charges: Midland Bank - Fixed Charge over Book Debts and other debts created 3
December 1997
Auditors: PricewaterhouseCoopers
Status Active
Part 2
Details of the Subsidiaries
Name: Braid Limited
Registered Office: 000 Xxxxxxxxx Xxx, Xxxxxx XX0X 0XX
Registered Number: 1996102
Authorised Share Capital: $100 divided into 100 Ordinary Shares of $1.00 each
Issued Share Capital: $2 divided into 2 Ordinary Shares of $1.00 each
Directors: Xxxxx Xxxxxx
Xxxxxxx Xxxxxx
Secretary: Xxxxxxx Xxxxxxx
Charges: None
Status Dormant
Part 2
Details of the Subsidiaries
Name: Braid Limited
Registered Office: Nine Xxxxx'x Xxxx, Xxxxx 000-0, Xxxxxxx, Xxxx Xxxx
Registered Number: 535764
Authorised Share Capital: HK$10,000 divided into 10,000 Ordinary Shares of HK$1.00 each
Issued Share Capital: HK$10,000 divided into 10,000 Ordinary Shares of HK$1.00 each
Directors: Africa Services Limited
Europe Services Limited
Secretary: ICS Corporate Secretaries Limited
Charges: None
Auditors: P. L. Au & Co.
Status Active
Part 2
Details of the Subsidiaries
Name: Braid PTE Ltd
Registered Office: 000 Xxxxxx Xxxx, #00-00/00 Xxxxxxx Xxxxxxxx, Xxxxxxxxx
Registered Number: 199604745W
Authorised Share Capital: S$100,000 divided into 100,000 Ordinary Shares of S$1.00
Issued Share Capital: S$50,000 divided into 50,000 Ordinary Shares of S$1.00 each
Directors: Xxxxxxx Xxxxxx
Xxx Xxxxxxx
Secretary: Xxxx Yhui Kong
Low Kow Poo
Charges: None
Auditors: PricewaterhouseCoopers
Status Active
Part 2
Details of the Subsidiaries
Name: Braid Systems PTY Ltd
Registered Office: x/x XxxxxxxxxxxxxxxXxxxxxx, 0xx Xxxxx, 000 Xxxxxx Xxxxxx, Xxxxxxxxx,
Xxxxxxx 0000, Xxxxxxxxx
Registered Number: 000 000 000
Authorised Share Capital: A$10,000,000 divided into 10,000,000 Ordinary Shares of A$1.00 each
Issued Share Capital: $100 divided into 100 Ordinary Shares of A$1.00 each
Officers: Xxxxxxx Xxxxxx
Xxxxx Xxxxxx
Nigel Xxxx Xxxxxx
Charges: None
Auditors: PricewaterhouseCoopers
Status Active
Part 2
Details of the Subsidiaries
Name: Braid Inc
Registered Office: Corporation Trust Center, 0000 Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxxx,
Xxxxxxxx 00000, XXX
Federal Tax ID: 00-0000000
State ID: 423084
Authorised Share Capital: US$10 divided into 1,000 shares of Common Stock
Issued Share Capital: US$10
Directors:
Secretary:
Charges:
Status Active
Part 2
Details of the Subsidiaries
Name: Braid Systems, Inc
Registered Office: Company Corporation
Registered Number:
Authorised Share Capital: US$10 divided into 1,000 shares of Common Stock
Issued Share Capital: US$10
Directors:
Secretary:
Charges:
Status Dormant
Part 2
Details of the Subsidiaries
Name: Braid Limited
Jurisdiction of Incorporation Bahamas
Registered Office: Nine Xxxxx'x Xxxx, Xxxxx 000-0, Xxxxxxx, Xxxx Xxxx
Registered Number: 59,162 B
Authorised Share Capital: US$5,000 divided into 5,000 Ordinary Shares of US$1.00 each
Issued Share Capital: US$2 divided into 2 Ordinary Shares of US$1.00 each
Directors: Orient Investments Limited, Pacific Investments Limited
Secretary: ICS Secretaries Limited
Charges: None
Status Dormant
SCHEDULE V
----------
Share Option Exchange Details
Name Stock Option
---- ------------
SCHEDULE VI
Part I - Details of English Properties and Leases
Property Address Details of Lease Disclosure Use
---------------- ---------------- ---------- ---
Bundle
------
Ref.
----
1. Buckingham House Lease dated 21 October 1998 between Section B Offices
00/00 Xxxxx Xxxxxx Starlight Investments Limited (1) and Braid Tab 2.7
Xxxxxx XX0 Systems Limited (2) relating to the Lower
Ground and Ground Floor Offices
2. 000-000 Xxxxxxxxx Xxx Lease dated 17 December 1998 between Bail Section B Offices
and 1 Willow Place Investments S.A. (1) and Braid Systems Tab 2.7
Xxxxxx XX0 Limited (2) relating to the First Floor
Assignment of Lease dated 15 October 1998 Section B Offices
between Xxxx Xxxxx Recruitment Limited (1) Tab 2.7
and Braid Systems Limited (2) relating to
the Second Floor
Lease dated 3 August 1990 between Notcharrow Section B Offices
Limited (1) and Braid Systems Limited (2) Tab 2.7
relating to the Third and Fourth Floors
Lease dated 3 August 1990 between Notcharrow Section B Offices
Limited (1) and Braid Systems Limited (2) Tab 2.7
relating to the Fifth Floor
SCHEDULE VI
Part II - Details of Foreign Properties and Leases
Property Address Details of Lease Disclosure Use
---------------- ---------------- ---------- ---
Bundle
------
Ref.
----
1. 24th Floor Lease dated May 1997 between Madison Section C Offices
000 Xxxxxxx Xxxxxx 40 Associates, L.P. (1) and Braid, Tab 2.4
Manhattan Inc. (2)
New York
U.S.A.
2. 12th Floor Lease dated 8 April 1997 between Xxxx Section E Offices
000 Xxxxx Xxxxxx Seng Tower Pte Ltd (1) and Braid Pte Tab 2.4
#12-04 Xxxx Xxxx Tower Ltd (2)
Singapore
3. 6th Floor Lease dated 7 July 1997 between Asian Section F Offices
492 St Kilda Road Pacific Building Corporation Pty Ltd Tab 2.4
Melbourne (1) and Braid Systems Pty Ltd (2)
Australia
Sub-Let Agreements for 6 and 12 Section F Offices
months from 15 July 1997 between Tab 2.4
Braid Systems Ltd (1) and MaxTrak
Technology Pty. Ltd (2) relating to
parts of the 6th Floor
Sub-Let Agreement for 12 months from Section F Offices
10 August 1997 between Braid Systems Tab 2.4
Ltd (1) and Rok Technology Pty. Ltd
(2) relating to part of the 6th Floor
Suite 4 Lease dated 29 June 1998 between Section F Offices
Level 12 N.E.C. (Constructions) Pty Limited Tab 2.4
000 Xxxxxx Xxxxxx (1) and Braid Systems Pty Limited (2).
North Sydney
Australia
TSI INTERNATIONAL
SOFTWARE LIMITED.
By:
Title:
Signed by XXXXXXX XXXXXX
Signed by XXXXX XXXXXX
Signed by XXXXXXX XXXXXXX
Signed by GEOFF CHICK
Signed by XXXXXX XXXXXX
Signed by XXXX XXXXXX
Signed by XXXXXX XXXXX
Signed by XXXXXXXX XXXXXXXX
Signed by XXXXX XXXXXX
Signed by XXXXXX XXXXXXX XXXXX XXXXXX
Signed by XXXXX XXXX
Signed by XXXXXX XXXXXX
Signed by XXXX XXXXXXX
