XXXXXXXX XXXX
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[GRAPHIC
OMITTED][GRAPHIC OMITTED]
DATED 15 February 2001
(1) XXX XXXXX AND OTHERS
(2) LIGHTSEEK LIMITED
and
(3) VERTICALBUYER INC.
----------------------------------------
SHARE SALE AGREEMENT
-----------------------------------------
00 Xxxxxxx Xxxxxx
Xxxxxx X0X 0XX
Tel: 000 0000 0000
Fax: 000 0000 0000
Index to Clauses
1 Interpretation
2 Agreement for sale
3 Purchase consideration
4 Completion
5 Warranties by the vendors
6 Communications
7 Governing Law and Jurisdiction
8 General
Schedule 1 Vendors' holdings and consideration
Schedule 2 Details of the Company
Schedule 3 Warranties
Schedule 4 Deed of Indemnity
Schedule 5 Employees
Schedule 6 The Purchase Consideration
Schedule 7 Intellectual Property
1
SHARE SALE AGREEMENT
Date: 2001
Parties:
'The Vendors': the persons whose names and addresses are set out in column 1
of Schedule 1.
'The Purchaser': Lightseek Limited (registered no 03770168) whose registered
office is at 7 Xxxxx House, 00 Xxxx Xxxxxx, Xxxxxxxx Xxxx Xxxxxx, Xxxxxx XX0
0XX.
"VerticalBuyer": VerticalBuyer Inc. of 000 Xxxx 00xx Xxxxxx, 00X Xxx Xxxx,
XX 00000 incorporated under the laws of Delaware
OPERATIVE PROVISIONS:
1 Interpretation
1.1 In this agreement the following words and expressions have the
following meanings:
'CA' Companies Xxx 0000
'COMPANIES ACTS' CA, the former Companies Acts (within the meaning of
CA s 735(1)) and the Companies Xxx 0000
'COMPANY' Litech Limited (registered no 03529690) whose registered
office is at 00 Xxxxxxx Xxxx Xxxxxx XX0.
'DEED OF INDEMNITY' a deed in the form set out in Schedule 4
'DEFERRED PURCHASE CONSIDERATION' means the consideration payable in
accordance with paragraphs 2.1.2 of Schedule 6
'DISCLOSURE LETTER' the disclosure letter, of the same date as this
agreement, from the Vendors to the Purchaser
'EMPLOYEES' the persons listed in Schedule 5 who are employed by the
Company
'FA' Finance Act
'GROUP' means the Company and all its Subsidiaries
'ICTA' Income and Corporation Taxes Act 1988
'INITIAL PURCHASE CONSIDERATION' means the consideration payable in
accordance with paragraphs 2.1.1 of Schedule 6
'INTELLECTUAL PROPERTY' the intellectual property listed in Schedule 7.
2
'LAST ACCOUNTS' the audited balance sheet, as at the Last Accounts
Date, and audited profit and loss account for the year ended on the
Last Accounts Date of each Group Company, including in the case of the
Company the audited consolidated balance sheet as at such date and the
audited consolidated profit and loss account for such period, and the
directors' report and notes
'LAST ACCOUNTS DATE' 31 March 2000 (being the date to which the Last
Accounts have been prepared)
"PURCHASE CONSIDERATION" means the sum of the Initial Purchase
Consideration and the Deferred Purchase Consideration calculated and
paid in accordance with Schedule 6;
'SHARES' the 10,000 issued Ordinary Shares of(pound)1 each in the
capital of the Company
'SUBSIDIARY' a subsidiary as defined in CA s 736
'TAXATION' all forms of taxation, duties, imposts and levies
whatsoever, and wherever or whenever imposed
'WARRANTIES' the warranties and representations by the Vendors in
clause 5 and Schedule 3.
1.2 All references in this agreement to a statutory provision shall be
construed as including references to:
1.2.1 any statutory modification, consolidation or re-enactment
(whether before or after the date of this agreement) for the time
being in force;
1.2.2 all statutory instruments or orders made pursuant to a statutory
provision; and
1.2.3 any statutory provisions of which a statutory provision is a
consolidation, re-enactment or modification.
1.3 Any reference in this agreement to the 'Vendors' includes their
respective personal representatives.
1.4 A reference in this agreement to FRS shall be a reference to a
statement of standard accounting practice issued or adopted by The
Accounting Standards Board Limited.
1.5 Clause headings in this agreement are for ease of reference only and
do not affect the construction of any provision.
2 Agreement for sale
2.1 Subject to the terms and conditions of this agreement the Vendors shall
sell as with full title guarantee and the Purchaser shall purchase the
Shares, with all rights attaching to them and with effect from the date
of this agreement.
2.2 In consideration of the promises herein contained, VerticalBuyer Inc
agrees to pay the Deferred Purchase Consideration to the Vendors on the
terms herein contained.
3 Purchase consideration
3
3.1 The purchase consideration for the Shares shall be the Initial Purchase
Consideration and the Deferred Purchase Consideration calculated and
paid in accordance with the provisions of Schedule 6.
3.2 The Vendors shall be entitled to the purchase consideration in the
amounts set out in Schedule 1. For the avoidance of doubt the Vendors
shall be entitled to equal proportions of the Deferred Purchase
Consideration.
4 Completion
4.1 Completion of the purchase of the Shares shall take place at the
offices of the Purchaser immediately after the signing of this
agreement.
4.2 The Vendors shall deliver to the Purchaser:
4.2.1 duly completed and signed transfers in favour of the Purchaser
or as it may direct of the Shares together with the relative
share certificates; and
4.2.2 the Deed of Indemnity duly executed by the Vendors and the
Company.
4.3 There shall be delivered or made available to the Purchaser:
4.3.1 the seal and certificate of incorporation of the Company;
4.3.2 the statutory books of the Company, complete and up-to-date;
4.3.3 the appropriate forms to amend the mandates given by the Company
to its bankers.
4.4 The Vendors shall repay all monies then owing by them to the Company,
whether due for payment or not.
4.5 Board Meetings of the Company shall be held at which:
4.5.1 such persons as the Purchaser may nominate shall be appointed
additional directors; and
4.5.2 the transfers referred to in clauses 4.2.1 shall be approved
(subject to stamping).
4.6 Upon completion of the matters referred to in clauses 4.2 to 4.5 the
Purchaser shall deliver to the Vendors the Initial Purchase
Consideration.
5 Warranties by the Vendors
5.1 Each of the Vendors severally warrants to the Purchaser and to
VerticalBuyer that, save as stated in the Disclosure Letter, the
Warranties set out in Schedule 3 are true and accurate in all respects
and that the contents of the Disclosure Letter, and of all accompanying
documents, are true and accurate in all respects and fully, clearly and
accurately disclose every matter to which they relate.
5.2 Each of the Warranties is without prejudice to any other warranty or
undertaking and, except where expressly stated, no clause contained in
this agreement governs or limits the extent or application of any other
clause.
5.3 The rights and remedies of the Purchaser in respect of any breach of
the Warranties shall not be affected by completion of the purchase of
the Shares, by any investigation made by or on behalf of the Purchaser
into the affairs of the Company, by any failure to exercise or delay in
exercising any right or remedy or by any other event or matter
whatsoever, except a specific and duly authorised written waiver or
release.
4
5.4 The liability of each of the Vendors under both the Warranties and the
Deed of Indemnity shall be limited to the amount of the Purchase
Consideration hereunder actually received by each of the Vendors. The
liability of the Vendors to the Purchaser and to VerticalBuyer under the
Warranties shall, in the absence of fraud, expire unless notice providing
in reasonable detail the nature of the claim is served on the Vendors by
30 June 2002 and the liability of the Vendors under the Deed of Indemnity
shall, in the absence of fraud, expire on the sixth anniversary of the
date of this Agreement.
6 Communications
6.1 All communications between the parties with respect to this agreement
shall be delivered by hand or sent by post to the United Kingdom address
of the addressee as set out in this agreement or to such other address in
the United Kingdom as the addressee may from time to time have notified
for the purpose of this clause.
6.2 Communications addressed to the Purchaser shall be marked for the
attention of Xx X. Xxxx.
6.3 Communications addressed to VerticalBuyer shall be marked for the
attention of Xx X. Xxxxx with a copy to Xx Xxxxx X. Xxxxx, Xxxxxx
Gottbetter & Xxxxxxxx LLP, 000 Xxxxx Xxxxxx, Xxx Xxxx, XX 00000 (fax
number 000 000 0000).
6.4 In proving service by post it shall only be necessary to prove that the
communication was contained in an envelope which was duly addressed and
posted in accordance with this clause.
7 Governing Jurisdiction
This Agreement shall be governed by English law and the parties hereby
irrevocably submit to the non-exclusive jurisdiction of the English
Courts.
8 General
This agreement shall be binding upon each party's successors and assigns
and personal representatives (as the case may be) but, except as
expressly provided, none of the rights of the parties under this
agreement or the Warranties may be assigned or transferred.
IN WITNESS WHEREOF this Agreement has been duly executed by the parties as a
deed the day and year first before written.
5
SIGNED and DELIVERED as a Deed by /s/ XXXXXXX XXXXX
XXXXXXX XXXXX in the presence of:
/s/ XXXX XXXXXXX
SIGNED and DELIVERED as a Deed by /s/ XXXXXX XXXX
XXXXXX XXXX in the presence of:
/s/ XXXX XXXXXXX
SIGNED and DELIVERED as a Deed by /s/ XXXXXX XXXXXX
XXXXXX XXXXXX in the presence of:
/s/ XXXX XXXXXXX
EXECUTED as a Deed by
LIGHTSEEK LIMITED acting by:
Director /s/ XXXXXXX XXXXX
Director/Secretary /s/ XXXXXX XXXX
EXECUTED as a Deed by
VERTICALBUYER INC. acting by:
Director /s/ XXXXXXX XXXXX
Director/Secretary /s/ XXXXXX XXXX
6
SCHEDULE 1
Vendors' holdings and consideration
Vendor's name Holding of shares Amount of Amount of
and address Initial Purchase Deferred Purchase
Consideration Consideration
Xxxxxxx Xxxxx 3,333 (pound)0.50 One third of the
The Granary consideration specified
Xxxxxxx Xxxx in paragraph 2.1.2 of
Woresh Schedule 6
Surrey
XX0 XXX
Xxxxxx Xxxx 3,333 (pound)0.50 One third of the
Winton Lodge consideration specified
Xxxxxx Xxxx in paragraph 2.1.2 of
Stockbridge Schedule 6
Hertfordshire
Xxxxxx Xxxxxx 3,334 500,000 shares in One third of the
0 Xxxxxxxxxxx Xxxxx VerticalBuyer Inc. consideration specified
Springfield Road commonstock of $0.001 in paragraph 2.1.2 of
Xxxxxxxx-xxxx-Xxxxxx xxx xxxxx xxxx Xxxxxxxx 0
Xxxxxx
XX0 0XX
7
SCHEDULE 2
Details of the Company
Part 1: The Company
Company number: 03529690
Date of incorporation: 18 March 1998
Share capital:
Authorised (pound)10,000
Issued (pound)10,000
Registered office: 00 Xxxxxxx Xxxx, Xxxxxx XX0
Directors: Xxxxxx Xxxxxx
Xxxxxxx Xxxxx
Xxxxxx Xxxx
Secretary: Xxxxxx Xxxx
8
SCHEDULE 3
Warranties
1 Corporate matters
1.1 The information relating to the Company contained in Schedule 2 is true
and complete in all respects.
1.2 The Shares constitute the whole of the issued and allotted share
capital of the Company.
1.3 The Company has no subsidiaries.
1.4 There are no agreements or arrangements in force, other than this
agreement, which grant to any person the right to call for the issue,
allotment or transfer of any share or loan capital of the Company.
1.5 The register of members and other statutory books of the Company have
been properly kept and contain an accurate and complete record of the
matters with which they should deal; and no notice or allegation, that
any of them is incorrect or should be rectified, has been received.
1.6 All returns, particulars, resolutions and documents required to be filed
with the Registrar of Companies in respect of the Company have been duly
filed and were correct.
2 Accounting matters
2.1 The Last Accounts have been prepared in accordance with the historical
cost convention; and the bases and policies of accounting, adopted for
the purpose of preparing the Last Accounts, are the same as those adopted
in preparing the audited accounts of each Group Company in respect of the
three last preceding accounting periods.
2.2 The Last Accounts:
2.2.1 give a true and fair view of the assets, liabilities (including
contingent, unquantified or disputed liabilities) and commitments
of the Company at the Last Accounts Date and its profits for the
financial period ended on that date;
2.2.2 comply with the requirements of the Companies Acts and other
relevant statutes;
2.2.3 comply with all current FRSs applicable to a United Kingdom
company;
2.2.4 are not affected by any extraordinary, exceptional or non-recurring
item;
2.2.5 properly reflect the financial position of the Company as at their
date.
2.3 All the accounts, books, ledgers, financial and other records, of
whatsoever kind, of the Company are in its possession and give a true and
fair view of its financial position.
3 Financial matters
9
3.1 The Company does not have any capital commitments outstanding at the Last
Accounts Date and the Company has not, since then, incurred or agreed to
incur any capital expenditure or commitments or disposed of any capital
assets.
3.2 Since the Last Accounts Date the Company has not paid or declared any
dividend or made any other payment which is, or is treated as, a
distribution for the purposes of ICTA Part VI Chapter II.
3.3 The Company has not, since the Last Accounts Date, repaid, or become
liable to repay, any indebtedness in advance of its stated maturity.
3.4 There are no liabilities (including contingent liabilities) which are
outstanding on the part of the Company other than those liabilities
disclosed in the Last Accounts or incurred, in the normal course of
trading, since the Last Accounts Date.
3.5 Having regard to existing facilities, full details of which are set out
in the Disclosure Letter, the Company has sufficient working capital for
the purposes of continuing to carry on its business, in its present form
and at its present level of turnover, for a period of twelve months after
the date of this agreement.
3.6 None of the facilities available to the Company is dependent on the
guarantee or indemnity of, or any security provided by, a third party.
3.7 The amounts now due from debtors will be recoverable in full in the
normal course of business, and in any event not later than twelve weeks
from the date of this agreement.
3.8 No part of the amounts included in the Last Accounts as owing by any
debtors remains unpaid or has been released on terms that any debtor pays
less than the full book value of his debt.
3.9 The Company has, since the Last Accounts Date, paid its creditors in
accordance with their respective credit terms; and there are no amounts
owing by the Company which have been due for more than six weeks.
3.10 No guarantee, or agreement for indemnity or for suretyship, given by, or
for the accommodation of, the Company is outstanding.
4 Taxation matters
4.1 The Last Accounts make full provision or reserve for all Taxation
(including deferred Taxation) which is liable to be or could be assessed
on the Company, or for which it may be accountable, in respect of the
period ended on the Last Accounts Date.
4.2 All returns, computations and payments which should be, or 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, or is likely to be, the subject of any dispute with
the Inland Revenue or other Taxation authorities.
4.3 The Company has duly deducted and accounted for all amounts which it has
been obliged to deduct in respect of Taxation and, in particular, has
properly operated the PAYE system, by deducting tax, as required by law,
from all payments made, or treated as made, to its employees or former
employees, and accounting to the Inland Revenue for all tax so deducted
and for all tax chargeable on benefits provided for its employees or
former employees.
10
4.4 The Company is not, nor will become, liable to pay, or make reimbursement
or indemnity in respect of, any Taxation (or amounts corresponding
thereto) in consequence of the failure by any other person to discharge
that Taxation within any specified period or otherwise, where such
Taxation relates to a profit, income or gain, transaction, event,
omission or circumstance arising, occurring or deemed to arise or occur
(whether wholly or partly) on or prior to the date of this agreement.
4.5 The Company has not, since the Last Accounts Date, incurred or is, or has
become, liable to incur after that Date expenditure which will not be
wholly deductible in computing its taxable profits except for expenditure
on the acquisition of an asset to be held otherwise than as
stock-in-trade, details of which are set out in the Disclosure Letter.
4.6 The execution or completion of this agreement will not result in any
profit or gain deemed to accrue to the Company for Taxation purposes.
4.7 The Company has not in the past six years carried out, or been engaged
in, any transaction or arrangement in respect of which there may be
substituted for the consideration given or received by the Company a
different consideration for Taxation purposes.
4.8 If each of the capital assets of the Company were disposed of for a
consideration equal to the book value of that asset in, or adopted for
the purpose of, the Last Accounts, no liability to corporation tax on
chargeable gains or balancing charge under the Capital Xxxxxxxxxx Xxx
0000 would arise.
4.9 The Company has duly registered and is a taxable person for the purposes
of value added tax and has not applied for treatment nor is treated as a
member of a Group.
5 Trading matters
5.1 Since the Last Accounts Date the business of the Company has been
continued in the ordinary and normal course, and there has been no
deterioration in its turnover, or its financial or trading position or
prospects.
5.2 The Company is not, nor has agreed to become, a member of any joint
venture, consortium, partnership or other unincorporated association.
5.3 The Company is not engaged in any litigation or arbitration proceedings,
as plaintiff or defendant; there are no proceedings pending or
threatened, either by or against the Company; and there are no
circumstances which are likely to give rise to any litigation or
arbitration.
5.4 There is no dispute with any revenue or other official department in the
United Kingdom or elsewhere, in relation to the affairs of the Company,
and there are no facts which may give rise to any dispute.
5.5 There are no claims pending or threatened, or capable of arising, against
the Company, by an employee or xxxxxxx or third party, in respect of any
accident or injury, which are not fully covered by insurance.
5.6 The Company has conducted and is conducting its business in all respects
in accordance with all applicable laws and regulations, whether of the
United Kingdom or elsewhere.
5.7 No power of attorney given by the Company is in force.
11
5.8 There are no outstanding authorities (express or implied) by which any
person may enter into any contract or commitment to do anything on behalf
of the Company.
5.9 The Disclosure Letter contains accurate particulars of all subsisting
contracts to which the Company is a party at the date of this agreement.
5.10 The Company is not nor will with the lapse of time become in default in
respect of any obligation or restriction.
5.11 The Company is not a party to, and its profits or financial position
during the past three years have not been affected by, any contract or
arrangement which is not of an entirely arm's length nature.
6 Property matters
The Company has no interest or liability (whether actual or contingent)
of any nature whatsoever in (or arising out of its occupation of) any
freehold or leasehold property.
7 Intellectual Property Rights
7.1 The Intellectual Property comprises all the Intellectual Property owned
or used by the Company in connection with its business.
7.2 All rights in all Intellectual Property owned or used by the Company
(whether or not included in the Intellectual Property) are vested in or
validly granted to the Company and are not restricted in any way.
7.3 The Company has not granted nor is obliged to grant any licence,
sub-licence or assignment in respect of any Intellectual Property owned
or used by it and has not disclosed nor is obliged to disclose any
know-how, computer know-how, business information or marketing
information to any person other than its employees for the purpose of
carrying on its business.
7.4 The Company is not in breach of any licence, sub-licence or assignment
granted to it in respect of any Intellectual Property or of any agreement
under which any know-how, computer know-how, business information or
marketing information was or is to be made available to it;
7.5 The processes and methods employed the services provided, the businesses
conducted and the products manufactured, used or dealt in by the Company
do not and at the time of being employed, provided, conducted,
manufactured, used or dealt in did not infringe the rights of any other
person in any intellectual property, know-how, computer know-how,
business information or marketing information.
7.6 There is no unauthorised use by any person of any of the Intellectual
Property of the Company or of any infringement of its rights therein.
7.7 The Company is not a party to any confidentiality agreement or any
agreement which restricts the free use or disclosure of any information.
8 Employment matters
8.1 Full particulars of the identities, dates of commencement of employment,
or appointment to office, and terms and conditions of employment of all
the employees and officers of the Company, including without limitation
profit sharing, commission or discretionary bonus arrangements, are fully
and accurately set out in Schedule 5.
12
8.2 Since the Last Accounts Date or (where employment or holding of office
commenced after that date) since the commencing date of the employment or
holding of office, no change has been made in the rate of remuneration,
emoluments or pension benefits, of any officer, ex-officer or senior
executive of the Company (a senior executive being a person in receipt of
remuneration in excess of (pound)15,000 per annum).
8.3 The Company is not bound or accustomed to pay any moneys other than in
respect of remuneration, or emoluments of employment, or pension
benefits, to, or for the benefit of, any officer or employee.
8.4 Apart from the pension scheme referred to in the Disclosure Letter ('the
Scheme'), the Company is not under any legal or moral liability or
obligation, or a party to any ex-gratia arrangement or promise, to pay
pensions, gratuities, superannuation allowances or the like, or otherwise
to provide 'relevant benefits' within the meaning of ICTA s 612, to or
for any of its past or present officers or employees or their dependants;
and there are no retirement benefit, or pension or death benefit, or
similar schemes or arrangements in relation to, or binding on, the
Company or to which the Company contributes.
8.5 Full particulars of the Scheme are contained in, or annexed to the
Disclosure Letter, including without limitation true copies of the trust
deeds and latest actuarial report and full and accurate details of the
assets, funding arrangements and current membership.
8.6 The assets, investments or policies held by the trustees of the Scheme
are sufficient to satisfy the liabilities and obligations (both current
and contingent) which the Scheme has to its members.
8.7 The Scheme is an exempt approved scheme within the meaning of ICTA s592
and there is no reason why approval may be withdrawn.
9 Insurances
9.1 The Company is now, and has at all material times been, adequately
covered against accident, damage, injury, third party loss (including
product liability), loss of profits and other risks normally insured
against by persons carrying on the same business as that carried on by
it.
9.2 All insurances are currently in full force and effect, and nothing has
been done or omitted to be done which could make any policy of insurance
void or voidable, or which is likely to result in an increase in premium.
9.3 No claim is outstanding, or may be made, under any of the insurance
policies and no circumstances exist which are likely to give rise to
a claim.
10 General matters
10.1 All information given by any of the Vendors, the Vendors' Solicitors or
the Vendors' accountants to the Purchaser, the Purchaser's Solicitors or
the Purchaser's accountants relating to the business, activities,
affairs, or assets or liabilities of the Company was, when given, and is
now accurate and comprehensive in all respects.
10.2 There are no material facts or circumstances, in relations to the assets,
business or financial condition of the Company, which have not been fully
and fairly disclosed in writing to the Purchaser or the Purchaser's
Solicitors, and which, if disclosed, might reasonably have been expected
to affect the decision of the Purchaser to enter into this agreement.
13
SCHEDULE 4
Deed of indemnity
Date: 2001
Parties:
1 "The Covenantors": the persons whose names and addresses are set out
in the Schedule.
2 "The Company" : Litech Limited (registered no 03529690) whose
registered office is at 00 Xxxxxxx Xxxx Xxxxxx XX0.
Recital:
This deed is entered into pursuant to an agreement made between the Covenantors
(1), Lightseek Limited ("the Purchaser") (2) VerticalBuyer Inc.
("VerticalBuyer") and relating to the sale of all the share capital of the
Company ("the Agreement").
Operative provisions
1 Definitions
In this deed the meanings of 'THE LAST ACCOUNTS', 'COMPLETION',
'THE LAST ACCOUNTS DATE' and 'TAXATION' shall be the same as in the
Agreement.
2 Indemnity
2.1 Subject as provided below, each of the Covenantors severally covenant
with the Company to indemnify the Company against:
2.1.1 any liability for Taxation which arises wholly or partly in
respect of, or in consequence of, any acts, omissions or
transactions occurring or entered into on, or before, the date of
this deed or which results from, or is calculated by reference
to, any income, profits or gains earned, received or accrued, or
deemed to have been earned, received or accrued, on or before
that date;
2.1.2 any resultant costs; and
2.1.3 any Taxation payable by the Company on or in respect of any
payment made under this deed.
3 Exclusions
3.1 The indemnity in clause 2.1 shall not apply to any liability:
3.1.1 to the extent that either an appropriate provision or reserve in
respect of the liability was made in the Last Accounts or the
liability was specifically referred to and quantified in the
notes to those Accounts;
3.1.2 for which the Company is, or may become, liable wholly, or
primarily, as a result of transactions in the normal course of
its business after the Last Accounts Date;
3.1.3 to the extent that the liability arises as a result only of the
appropriate provision or reserve in the Last Accounts being
insufficient by reason of any increase in rates of Taxation made
after the date of the Agreement;
14
3.2 The liability of each of the Covenantors hereunder shall be limited to
the amount of the Purchase Consideration actually received by each of the
Vendors pursuant to the provisions of the Share Sale Agreement of even
date. In the absence of fraud, the liability of each of the Covenantors
shall expire on the sixth anniversary of the date hereof.
4 Conduct of claims
4.1 The Company shall notify the Covenantors in writing of any information
which comes to its notice, whereby it appears that the Covenantors are,
or may become, liable under this deed.
4.2 Subject to clause 4.3, the Company shall, at the expense of the
Covenantors, take or procure the Company to take such action, to contest
any claim which could give rise to a liability under this deed, as the
Covenantors, or a majority of them, may reasonably require.
4.3 The Covenantors shall, at the request of the Company, provide, to the
reasonable satisfaction of the Company, security or indemnities, or both,
in respect of all the costs and expenses of any action taken pursuant to
clause 4.2 but subject always to clause 3.2.
5 General
5.1 This deed shall be binding on the Covenantors and their respective
personal representatives.
5.2 The provisions of the Agreement relating to communications shall apply
to any communication to be given under, or in connection with, this deed.
SCHEDULE
T.N.D. Xxxxx
X. X. Xxxx
X. Xxxxxx
15
SCHEDULE 5
Employees
X. Xxxxxx
M. Care
X. Xxxxxxx
16
SCHEDULE 6
The Purchase Consideration
1 Interpretation
In this Schedule, where the context admits:
'After Tax Profits' means the profit on ordinary activities of the
Company after extraordinary and exceptional items, fees, commissions and
other similar costs, expenses and charges interest and similar amounts
and after Taxation in respect of each relevant period commencing on 1
January and ending 31 December;
'Company's Auditors' means Kingston Xxxxx, Devonshire House, 00 Xxxxxxx
Xxxx, Xxxxxx XX0X 0XX
'SSAP' means Statement of Standard Accounting Practice in force at the
date hereof;
and references to a paragraph or sub-paragraph are to paragraphs of
sub-paragraphs of this Schedule.
2 Calculation of Consideration
2.1 The Purchase Consideration for the transfer of the Shares shall consist
of:
2.1.1 Initial Purchase Consideration of:
2.1.1.1 (pound)1 for the transfer of all of the shares in the
Company held by Xxxxxx Xxxx and Xxxxxxx Xxxxx; and
2.1.1.2 500,000 shares in VerticalBuyer common stock of $0.001
par value per share for the transfer of all of the shares
in the Company held by Xxxxxx Xxxxxx; and
2.1.2 Deferred Purchase Consideration payable in equal amounts to each
of the Vendors by VerticalBuyer of:
2.1.3 six times the average of the total of the After-Tax Profits of
the Company for each of the 3 years ending 31 December 2001, 2002
and 2003 as certified by the Company's Auditors, to be paid in
shares in VerticalBuyer common stock of $0.001 par value per
share. Each share of common stock of $0.001 par value per share
shall be valued at $1.00 per share for the purposes of
calculating the number of shares to be issued to the Vendors
hereunder provided however that the $1.00 shall be appropriately
adjusted to reflect any stock splits, reverse stock splits or
stock dividends.
2.2 The Purchase Consideration shall be paid:
2.2.1 as to the Initial Purchase Consideration, on Completion; and
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2.2.2 as to the Deferred Purchase Consideration, VerticalBuyer shall
deliver to the Vendors duly signed share certificates to the
value of the Deferred Purchase Consideration calculated in
accordance with paragraph 2.1.2 of this Schedule 6 no later
than 60 days after the filing of the audited annual accounts
for the year ending 31 December 2003.
2.3 The Purchaser and VerticalBuyer agree not to sell all of the shares or
the business of the Company until the Deferred Purchase Consideration
has been paid to the Vendors.
2.4 If:
(i) before the payment in full of the Deferred Purchase
Consideration; or
(ii) in the event that the Company fails to achieve six times
After-Tax Profits of at least $1 million in each of the years
ended 31 December 2001, 31 December 2002 or 31 December 2003;
or
(iii) before 31 March 2004:
either the Purchaser or the VerticalBuyer shall go or threaten to go into
liquidation, receivership or administration, become unable to pay its
debts within the meaning of Section 123 Insolvency Act 1986 or any court
order is made or applied for with respect to the same or any other
insolvency proceedings are brought against either the Purchaser or
VerticalBuyer or either the Purchaser or VerticalBuyer suffers any other
act of insolvency in any applicable jurisdiction, the Vendors shall have
the option exercisable immediately to repurchase the Shares for the same
consideration actually received by them hereunder.
2.5 The Purchaser shall be entitled to withhold from any payment to be made
hereunder a genuine and reasonable estimate of monies due to the
Purchaser from the Vendors pursuant to the Warranties or the Deed of
Indemnity. Such payments shall be released to the Vendors if and only to
the extent that the amount so retained exceeds the amount of any such
claim(s) which are agreed or which are found due by a Court of competent
jurisdiction.
2.6 The Deferred Purchase Consideration (less any amount withheld pursuant to
clause 2.5 above) shall be paid by way of bankers' draft to the Vendors
whose receipt shall be a good and sufficient discharge therefor.
3 Experts
Any role discharged by the Company's Auditors hereunder shall be
discharged as expert and not as arbitrator. Any certificate provided by
the Company's Auditors pursuant to clause 2 shall in the absence of fraud
or manifest error be binding upon the parties hereto.
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SCHEDULE 7
Intellectual Property
Application for patent and trademark for Litech Cascade.
Designs, copyright, know how and confidential information
relating to the Litech business.
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