November 26, 1998
(1) XXXXXX XXXXXXX XXXXXXXX, XXXXXX XXXXX XXXXXXXX
XXXXXXX XXXXX & XXX XXXXX
AND THE OTHER PARTIES NAMED IN SCHEDULE 1
(2) TIER TECHNOLOGIES, INC.
AGREEMENT
For the sale and purchase of the
entire issued share capital of
Midas Computer Software Limited
EVERSHEDS
S O L I C I T O R S
Senator House, 00 Xxxxx Xxxxxxxx Xxxxxx
Xxxxxx XX0X 0XX
Tel: 0000 000 0000 Fax: 0000 000 0000
CONTENTS
1. Interpretation........................................................1
2. Sale and purchase.....................................................6
3. Consideration For A Shares and C Shares...............................6
4. Consideration For B Shares............................................8
5. US Securities Laws...................................................11
6. Warranties/Indemnity.................................................13
7. Restrictive covenants................................................15
8. Management of Midas..................................................18
10. Announcements........................................................22
11. Costs................................................................22
12. Interest.............................................................22
13. Notices..............................................................23
14. General..............................................................23
SCHEDULE 1
Part 1 - The Sellers of the A Shares.................................25
Part 2 - The Sellers of the C Shares.................................26
Part 3 - The Sellers of the B Shares.................................27
Part 4 - Consideration For The B Shares..............................28
SCHEDULE 2
Details of Midas.....................................................30
SCHEDULE 3
The Properties.......................................................31
SCHEDULE 4
Non-Taxation Warranties..............................................32
SCHEDULE 5
Taxation.............................................................51
SCHEDULE 6
Provisions regarding Retention Fund..................................73
SCHEDULE 7
Adjustment of Consideration..........................................75
SCHEDULE 8
Warrantors' Limitations..............................................77
SCHEDULE 9
Form Of Loan Notes...................................................82
THIS AGREEMENT is made on November 26, 1998
BETWEEN
(1) The persons whose names and addresses are set out in Schedule 1 ("the
Sellers"), and
(2) TIER TECHNOLOGIES, INC. a Company incorporated in California, whose
principal place of business is at 0000 Xxxxx Xxxx., Xxxxxx Xxxxx,
Xxxxxxxxxx ("the Buyer")
OPERATIVE CLAUSES
1. Interpretation
--------------
In this Agreement:
1.1 the following expressions have the following meanings unless
inconsistent with the context:
Expression Meaning
---------- -------
"A Shares" The A shares of 1p each in the
capital of Midas
"the Accounting Date" 28 February 1998
"Accounting Standards" The statements of standard
accounting practice referred
to in section 256 of the Act
issued by the Accounting
Standards Board or such other
body as may be prescribed
thereunder by the Secretary of
State from time to time,
including, without limitation,
the statements of standard
accounting practice formerly
issued by the Accounting
Standards Committee and since
adopted by the Accounting
Standards Board and any
financial reporting standards
issued by the Accounting
Standards Board or such other
body as aforesaid
"the Accounts" The audited accounts
of Midas for the financial
year which ended on the
Accounting Date, comprising a
balance sheet, a profit and
loss account, notes and
directors' and auditors'
reports
"the Act" The Companies Act 1985
"Auditors" The auditors for the time
being of the Buyer
"B Shares" The B shares of 1p each in the
capital of Midas
1
"Business Day" Any day (other than Saturday
or Sunday) on which Clearing
Banks are open for a full
range of banking transactions
"Buyer's Solicitors" Eversheds of Senator House, 00
Xxxxx Xxxxxxxx Xxxxxx, Xxxxxx
XX0X 0XX
"C Shares" The C shares of 1p each in the
capital of Midas
"Clearing Bank" A UK bank which is a member of
CHAPS Clearing Company Limited
"Completion" Completion of the sale and
purchase in accordance with
clause 9
"the Completion Statement" The balance sheet prepared in
accordance with Schedule 7 and
if appropriate, any
replacement balance sheet
adopted under paragraph 4 of
such schedule
"Computer Systems" All computer hardware,
software, microprocessors and
firmware and any other items
that connect with any or all
of them which in each case are
used in Midas' business
"Contract" Any legally binding agreement
or commitment whether
conditional or unconditional
and whether by deed or under
hand
"Covenantors" Xxxxxx Xxxxxxxx, Xxxxxx
Xxxxxxxx, Xxxxxxx Xxxxx and
Xxx Xxxxx
"Disclosure Letter" The letter having the same
date as this Agreement from
the Warrantors to the Buyer's
Solicitors qualifying the
Warranties
"EBIT" Earnings before interest and
tax
"Effective Date" The opening of business on
30th November 1998 or such
earlier date as may be agreed
in writing between the Buyer
and Xxxxxx Xxxxxxxx on behalf
of the Sellers, from which
date the Buyer and Sellers
acknowledge and agree that the
Buyer shall assume effective
control and management of
Midas
"ERA" The Employment Rights Act 1996
2
"First Year" The financial year of Midas
ending on 30th November 1999
"ICTA" Income and Corporation Taxes
Xxx 0000
"Insider" Any Seller, any past or
present Director of Midas,
and/or any person who is or
was at the relevant time
connected with any Seller or
any such Director
"Intellectual Property Rights" Any and all patents, trade
marks, service marks,
copyright, moral rights,
rights in a design, know-how,
confidential information and
all or any other intellectual
or industrial Property rights
whether or not registered or
capable of registration and
whether subsisting in the
United Kingdom or any other
part of the world together
with all or any goodwill
relating or attached thereto
"Laws" All or any applicable law
(whether criminal, civil or
administrative), common law,
judgment, court order,
statute, statutory instrument,
regulation, Directive,
European Community decision
(insofar as legally binding),
bye-law, treaty, government
circular, code of practice and
guidance notes, or instruction
or decision of any competent
regulatory body in force at
Completion
"Loan Notes" Loan Notes to be issued by the
Buyer in accordance with
clause 4
"Midas" Midas Computer Software
Limited, registered number
03168419, whose registered
office is c/o Xxxxx Xxxxxxxx,
Enterprise House, 000 Xxxxxx
Xxxxxx, Xxxxxxxxxx X0 0XX
"Millennium Compliant" The meaning set out or
referred to in paragraph 15.1
of Schedule 4
"Nasdaq National Market" The Nasdaq National Market of
the United States of America
"Net Assets" The issued share capital of
Midas plus or minus the amount
standing to the credit of or
debited to reserves (including
profit and loss account), as
shown in the Completion
Statement
3
"Oracle" Oracle Corporation UK Limited
"Pension Schemes" The Midas Computer Software
Limited Group Personal Pension
Plan provided by Standard life
and the Exsel Plus Executive
Pension Plan provided by
Scottish Equitable
"Properties" The properties specified in
Schedule 3 and each and every
part of such properties
"Retention Fund" The monies described as such
in Clause 3.1.2
"R Xxxxxxxx No 1 Trust" The Xxxxxx Xxxxxxx Xxxxxxxx
Discretionary Settlement No 1
dated with today's date and
made between Xxxxxx Xxxxxxxx
(1) and Xxxxxx Xxxxxxxx and
Xxxxxx Xxxxxxxx (2)
"R Xxxxxxxx No 2 Trust" The Xxxxxx Xxxxxxx Xxxxxxxx
Discretionary Settlement No 2
dated with today's date and
made between Xxxxxx Xxxxxxxx
(1) and Xxxxxx Xxxxxxxx and
Xxxxxx Xxxxxxxx (2)
"R Xxxxxxxx No 3 Trust" The Xxxxxx Xxxxxxx Xxxxxxxx
Discretionary Settlement No 3
dated with today's date and
made between Xxxxxx Xxxxxxxx
(1) and Xxxxxx Xxxxxxxx and
Xxxxxx Xxxxxxxx (2)
"Xxxxxx Xxxxxxxx" Xxxxxx Xxxxxxx Xxxxxxxx
"Xxxxxx Xxxxxxxx" Xxxxxx Xxxxx Xxxxxxxx
"Second Year" The financial year of Midas
ending on 30th November 2000
"Sellers' Solicitors" Wragge & Co. of 00 Xxxxxxx
Xxx, Xxxxxxxxxx, X0 0XX
"Service Contracts" The service contracts in the
agreed terms to be entered
into between Midas and Xxxxxx
Xxxxxxxx, Xxxxxx Xxxxxxxx,
Xxxxxxx Xxxxx, Xxx Xxxxx and
Xxxx Bressey
"the Shares" All the issued shares in the
capital of Midas
"Stock" Stocks (as defined in
Statement of Standard
Accounting Practice No. 9
adopted by the
4
Accounting Standards Board) of
Midas including but not
limited to raw materials,
components, finished goods and
consumables;
"Tax Covenant" The Covenant contained in Part
2 of Schedule 5
"Tier Shares" Class B Common Stock shares in
Tier Technologies Inc.
"Third Year" The financial year of Midas
ending on 30th November 2001
"The Trusts" The R Xxxxxxxx No 1 Trust, the
R Xxxxxxxx No 2 Trust and the
R Xxxxxxxx No 3 Trust
"Warranties" The warranties set out or
referred to in clause 6,
Schedule 4 and Part 3 of
Schedule 5;
"Warrantors" Xxxxxx Xxxxxxxx and Xxxxxx
Xxxxxxxx both in their
individual capacities and in
their capacity as trustees of
the Trusts and the other A
Sellers;
"Work in Progress" Work done pursuant to a client
contract but not yet billed
1.2 references to any statute or statutory provisions will, unless the
context otherwise requires, be construed as including references to any
earlier statute or the corresponding provisions of any earlier statute,
whether repealed or not, directly or indirectly amended, consolidated,
extended or replaced by such statute or provisions, or re-enacted in
such statute or provisions, and to any subsequent statute or the
corresponding provisions of any subsequent statute in force at any time
prior to Completion directly or indirectly amending, consolidating,
extending, replacing or re-enacting the same, and will include any
orders, regulations, instruments or other subordinate legislation made
under the relevant statute or statutory provisions prior to Completion;
1.3 references to persons will be construed so as to include bodies
corporate, unincorporated associations and partnerships;
1.4 references to a document being "in the agreed terms" will be construed
as references to that document in the form agreed and initialled by or
on behalf of the Sellers and the Buyer;
1.5 save where expressly stated to be made severally but not jointly, all
covenants, agreements, undertakings, indemnities, representations and
warranties on the part of two or more persons are given or made by such
persons jointly and severally;
1.6 references to clauses and Schedules are to clauses of and Schedules to
this Agreement, and references to paragraphs are to paragraphs in the
Schedule in which such references appear;
5
1.7 the Schedules form part of this Agreement and will have the same force
and effect as if expressly set out in the body of this Agreement; and
1.8 the headings to the clauses of this Agreement and to the paragraphs of
the Schedules will not affect its construction.
2. Sale and purchase
-----------------
2.1 Each of the Sellers will sell with full title guarantee, and the Buyer
will buy, the number of the Shares specified opposite that Seller's
name in Schedule 1.
2.2 Each of the Shares will be sold and bought free from any claim, charge,
lien, encumbrance, equity or third party right, and with all rights
attached or accruing to it including all rights to any dividends or
other distributions declared, made or paid after the Effective Date.
2.3 Each of the Sellers waives all rights of pre-emption over any of the
Shares conferred by the articles of association of Midas or otherwise.
2.4 The Buyer will not be obliged to complete the purchase of any Share
unless the purchase of all the Shares is completed simultaneously.
2.5 The effective date of the sale and purchase shall be the Effective
Date.
3. Consideration For A Shares and C Shares
---------------------------------------
3.1 The consideration for the sale of the A Shares will, subject to
adjustment after Completion as provided in Schedule 7 and as
hereinafter provided, be:-
3.1.1 the sum of (pound)1,250,000 (One million two hundred and
fifty thousand Pounds) which shall be allocated between the
relevant Sellers as shown in Part 1 of Schedule 1 and paid on
Completion and
3.1.2 the sum of(pound)200,000 (two hundred thousand Pounds - the
"Retention Fund") which shall be dealt with in accordance
with Schedule 6.
3.2 If the EBIT for the period from the Effective Date to 31 December 1998
(both dates inclusive - which shall be calculated in accordance with
Clause 4.3) is more than (pound)50,000, the consideration payable for
the A Shares shall be increased in aggregate by (pound)1 for every
(pound)1 of the excess and such additional consideration shall be
allocated amongst the relevant Sellers pro rata to the amounts set out
in Part 1 of Schedule 1.
3.3 The consideration for the sale of the C Shares will, subject to
adjustment after Completion as provided in Schedule 7 and as
hereinafter provided, be the issue on Completion of such number of Tier
Shares as is equal to the sum of (pound)400,000 divided by the average
US dollar closing price of the Tier Shares on the Nasdaq National
Market for the five trading days immediately preceding today's date
(the "Issue Price") converted
6
into Pounds Sterling using the closing exchange rate quoted by Lloyds
Bank plc for transactions of a similar size for the day immediately
preceding today's date, which shall be allocated between the relevant
Sellers in the ratios set out in Part 2 of Schedule 1 (save that
fractional entitlements shall be ignored).
Provided, that if on the third anniversary of Completion, any of the
Sellers named in Part 2 of Schedule 1 (or his or her family members or
related trusts) still owns any of such Tier Shares as are issued to him
or her (and/or any replacement shares following any reorganisation of
the Buyer's share capital and/or any shares resulting from a stock
split or stock dividend), and if the average US dollar closing price of
a Tier Share (and/or any replacement share following any reorganisation
of the Buyer's share capital and/or any shares resulting from a stock
split) on the Nasdaq National Market (or on any other stock exchange on
which they are then listed, if Tier Shares (and/or such other shares)
are not then listed on the Nasdaq National Market) for the twenty
trading days immediately preceding such third anniversary, (or if
earlier the date on which Tier Shares (and/or such other shares ceased
to be listed on any stock exchange), (the "New Issue Price") is less
than twice the Issue Price (any such shortfall being described below as
the "Value Deficit"), the Buyer shall, within 20 Business Days of such
third anniversary, either:
(1) issue to each such Seller such number of additional Tier
Shares as together have a value (at the New Issue Price)
equal to the aggregate of the Value Deficits on each such
Tier Share (and any replacement shares following any
reorganisation of the Buyer's share capital and/or any shares
resulting from a stock split or stock dividend) as are still
owned by such Seller (or his or her family members or related
trusts) on the third anniversary of Completion; or at its
election
(2) pay all or any portion of the aggregate of such Value
Deficits in cash
Provided further that if there is any consolidation or subdivision,
capitalisation, rights or similar issue of Tier Shares, the Issue Price
for such Tier Shares (and any bonus or replacement shares) shall be
adjusted in such way as is agreed between the Buyer and Xxxxxx Xxxxxxxx
(on behalf of the relevant Sellers and who is irrevocably appointed by
them for this purpose) and failing agreement in such way as may be
determined by an independent accountant appointed in the manner set out
in clause 4.5.1 to give effect to the intention of this clause 3.3.
3.4 Any cash sum payable to any of the Sellers under clause 3.1 shall be
paid by way of (either) a CHAPS transfer from a Clearing Bank to the
client account of the Sellers' Solicitors with Lloyds Bank Plc, Colmore
Row, Birmingham, sort code 30 00 03, account number 0000000 or by such
other method as may be agreed between the parties. The Sellers'
Solicitors are authorised to receive the Consideration on behalf of the
Sellers and payment to them will be a good and sufficient discharge to
the Buyer and the Buyer will not be further concerned as to the
application of the moneys so paid.
7
3.5 If any of the Retention Fund shall become payable to the Buyer in
accordance with Schedule 6, or if any sum is payable to the Buyer under
Schedule 7, the consideration for the A Shares shall be abated by the
amount so payable, but without prejudice to the right of the Buyer to
recover any excess not recovered out of the Retention Fund. If the
amount repayable exceeds the consideration for the A Shares the balance
shall be repaid by the Sellers named, and in the proportions set out,
in Part 2 of Schedule 1 by way of abatement in the consideration for
the C Shares.
4. Consideration For B Shares
--------------------------
4.1 Within 90 days of the end of each of the First Year, Second Year and
Third Year (or if later within 7 days of the date on which the relevant
calculations under clause 4.3 become binding) and subject to
achievement of both the minimum revenue and EBIT targets set out in
Part 4 of Schedule 1 for that year (as adjusted from time to time in
accordance with clause 4.6, if applicable), the Buyer shall pay
additional consideration for the B Shares (in the form of Loan Notes
and Tier Shares) as set out in such Part 4, which shall be allocated
amongst the relevant Sellers (the "B Sellers") as shown in Part 3 of
Schedule 1
Provided that the Buyer shall have the option to issue Loan Notes
instead of all or any of such Tier Shares on a (pound)1 for (pound)1
basis And Provided Further that it shall do so as regards any Tier
Shares then due for issue if at any anniversary date specified in Part
4 of Schedule 1 Tier Shares are not listed on any stock exchange,
unless the delisting was referable to an acquisition of the Buyer or a
merger of it with another company and the acquiring or surviving
company is itself quoted on a stock exchange, in which case the Buyer
shall instead have the option to satisfy the relevant consideration
either in Loan Notes or by procuring the issue of shares in the
acquiring or surviving company having the same value (calculated on the
basis above) as the amount otherwise payable in Tier Shares.
In addition, if the Maximum Over Achievement Targets set out in Part 4
of Schedule 1 (as adjusted from time to time in accordance with clause
4.6, if applicable) are achieved in each year, the amount of Loan Notes
and Tier Shares to be issued in respect of the third year shall each be
increased by (pound)231,250 (Two hundred and thirty one thousand two
hundred and fifty Pounds) worth.
The number of Tier Shares (or shares in an acquiring or surviving
Company as appropriate) issued as additional consideration shall be
calculated by dividing the Tier Shares amount specified in Part 4 of
Schedule 1 (converted to U.S. dollars using the exchange rate quoted by
Lloyds Bank plc for transactions of a similar size for the day
immediately preceding today's date) by the average closing price of a
Tier Share (or other share as appropriate) on the Nasdaq National
Market (or if the Tier Shares or other shares are not listed on such
market any other stock exchange on which they are listed) for the five
trading days immediately preceding the relevant anniversary date.
Fractional entitlements shall be ignored.
8
4.2 In addition to the additional consideration (if any) payable under
clause 4.1 for any year, the Buyer shall pay an amount equal in
aggregate to 0.01%(one one hundredth of one per cent) of EBIT for the
relevant year to the B Sellers. Such amount shall be allocated between
them in the ratios set out in such Part 3 by the issue of Loan Notes.
4.3 Subject to clause 4.6, the EBIT and revenue for the purposes of any
relevant period under clauses 3.2 and 4.2 shall mean the profits (less
losses) before interest and taxes and the revenue respectively shown by
the profit and loss account of Midas (agreed or certified in accordance
with clause 4.5) for that period, which shall be prepared in accordance
with the same bases and policies of accounting applied for the purposes
of the Accounts insofar as they are not inconsistent with accounting
principles generally accepted in the United Kingdom, including
Accounting Standards, and with such accounting principles where they
are inconsistent, provided that they shall be adjusted so far as
necessary to take account of the following matters:
4.3.1 no deduction shall be made for taxation on profits;
4.3.2 no deduction shall be made for any interest or other fee for
the provision of any working capital provided by the Buyer up
to levels consistent with the revenue and EBIT targets in
Part 4 of Schedule 1 (as adjusted from time to time in
accordance with clause 4.6, if applicable); or for any other
charge levied by the Buyer to the extent (if at all) that it
is not made on arm's length terms;
4.3.3 profits and losses shall be calculated after exceptional
items and before extraordinary items (as defined in Financial
Reporting Standard number 3 adopted by the Accounting
Standards Board) and the proceeds of any keyman insurance
policy taken out under clause 7.6 and the costs of the same
shall be disregarded;
4.3.4 any profit or loss on the disposal of any fixed assets
(including without limitation any Intellectual Property
Rights (as defined in Schedule 4) or any interest in the
Property) shall be excluded;
4.3.5 the effects of any increased depreciation charges resulting
from any revaluation of any fixed assets due to this
transaction shall be excluded;
4.3.6 any expenses for which Midas is liable but which are
gratuitously met by any of the Sellers shall be deducted;
4.3.7 profits and losses from the Buyer's other business operations
that may be consolidated into Midas shall be excluded;
4.3.8 any costs incurred by Midas (with the Buyer's approval) in
relation to the preparation of the Completion Statement or
the preparation of any revenue or EBIT statements required
under this clause or as referred to under clause 9.4 shall be
disregarded (except in the latter case for any part of such
costs as would anyway have been incurred in relation to the
annual audit of Midas' accounts).
9
4.4 The B Sellers irrevocably confirm that any consent or approval given by
Xxxxxx Xxxxxxxx or his survivor for the purposes of any calculation
under this clause shall be binding on all of them.
4.5 The Buyer shall procure that:
4.5.1 as soon as reasonably practicable following the end of each
of the First Year, the Second Year and the Third Year, and in
any event within 60 Business Days thereof, a calculation of
the EBIT and revenue for that year is prepared in accordance
with the foregoing and delivered to Xxxxxx Xxxxxxxx or his
survivor. Such calculations shall be binding on the B Sellers
unless Xxxxxx Xxxxxxxx gives written notice to the Buyer of a
disputed amount within 30 Business Days after the delivery of
the relevant calculations to Xxxxxx Xxxxxxxx or his survivor,
requiring such figures to instead be certified by a single
independent chartered accountant or an independent firm of
chartered accountants to be agreed upon between the relevant
parties or (in default of such agreement) to be selected (at
the instance of any of them) by the President for the time
being of the Institute of Chartered Accountants in England
and Wales. Any such chartered accountant or firm of chartered
accountants (whose costs shall be paid as he or they shall
direct) shall act as expert (and not as arbitrator) in
connection with the giving of such certificate, which shall
be binding
Provided Always that any notice in respect of a disputed
amount involving less than (pound)10,000 shall only be valid
if it would result in additional consideration being payable
(where none would otherwise have been payable) or an increase
in the level of additional consideration, if the objection is
upheld.
4.5.2 Xxxxxx Xxxxxxxx (as representative of the B Sellers) and his
professional advisers shall have such access to the books and
accounts of Midas and such other relevant information as
shall be reasonably requested by him to enable him to assess
the calculations referred to in clause 4.5.1.
4.6 If the Buyer takes any action in respect of Midas which materially
adversely impairs Midas' ability to generate revenue or EBIT during the
periods up to 30th November 2001 and Xxxxxx Xxxxxxxx (as representative
of the B Sellers), gives written notice to the Buyer within 30 days of
becoming aware of the taking of such action, or that such action might
materially adversely impair Midas' ability to generate revenue or EBIT,
indicating that he believes that an adjustment to the targets set out
in Part 4 of Schedule 1 is appropriate in consequence, the parties
shall seek to negotiate an adjustment to such targets. If no adjustment
is agreed within 30 days of the giving of such notice, either the Buyer
or Xxxxxx Xxxxxxxx may require the matter to be referred to a single
independent chartered accountant or an independent firm of chartered
accountants to be selected as provided in clause 4.5.1. Any such
chartered accountant or firm of chartered accountants (whose costs
shall be paid as he or they shall direct) shall act as expert (and not
as arbitrator) and his or its decision on whether an adjustment or
adjustments is/are
10
appropriate and if so what that adjustment (or those adjustments)
should be shall be binding on the parties.
4.7 Any Loan Notes issued by the Buyer under this clause shall be issued in
the form set out in Schedule 9 subject to such amendments as the Buyer
may reasonably propose as required under the US Securities Act or other
relevant laws or regulations and shall be guaranteed from the date of
issue for a period of 7 years by a Clearing Bank or by any other bank
reasonably acceptable to the B Sellers on such terms as may be
reasonably acceptable to Xxxxxx Xxxxxxxx on behalf of the B Sellers.
4.8 Notwithstanding any other provision of this Agreement, the obligation
of the Buyer to issue any Loan Notes or Tier Shares to Xxxxxx Xxxxxxxx
and Xxxxxx Xxxxxxxx in their capacity as Trustees of the R Xxxxxxxx No
1 and No 3 Trusts or their successors in title in relation to any
consideration from time to time due to such Trusts or anybody acquiring
title from them shall be subject to the precondition that they shall
first have indemnified Midas or any relevant associated Company of the
Buyer to the Buyer's reasonable satisfaction from and in respect of all
sums which are or may become payable by Midas or any such associate or
for which it may be or become accountable in respect of Schedule E
income taxation and/or national insurance contributions (and/or any
similar taxes and imposts) in relation to any appropriation or
distribution already made or which may thereafter be made by them, to
or in favour of any person who at any relevant time is or has been
employed by Midas or any such associate or who is or has been a
Director of Midas or such associate. The obligation to pay any amounts
due under any such Loan Notes shall be similarly qualified.
4.9 Xxxxxx Xxxxxxxx and Xxxxxx Xxxxxxxx hereby agree that no distribution
shall be made out of the R Xxxxxxxx No 1 and No 3 Trusts at any time
after the expiry of 180 days following the end of the Third year in
favour of any person who at any relevant time is or has been employed
by Midas or any associated Company of the Buyer or who is or has been a
Director of Midas or any such associate and further agree with the
Buyer (as trustee for Midas and its associated companies) that they
will indemnify Midas and such associates against any Schedule E income
taxation and/or national insurance contributions (and/or any similar
taxes and imposts) payable by it or any of them as described in clause
4.7 to the extent that they have not been reimbursed under that clause.
5. US Securities Laws
------------------
5.1 Under applicable securities laws, any Tier Shares issued as
consideration for the B Shares or the C Shares shall be restricted and
non-transferrable at issue but may become transferable once certain
conditions under the Securities Act of the United States are satisfied.
5.2 The Sellers of the B Shares and the C Shares understand and acknowledge
that the Tier Shares and the Loan Notes issued under this Agreement
(the "Securities") will not be registered under the US Securities Act
on the grounds that the offering and issuance of the Tier Shares and
Loan Notes are exempt from registration pursuant to Regulation S of the
Securities Act of 1993, as amended and that the Buyer's reliance upon
such
11
exemption is predicated upon the truth and accuracy of representations
given by each of such Sellers in this clause 5.
5.3 The Sellers of the B shares and C shares severally but not jointly
represent that each is not a US Person and is not acquiring the
Securities for the account or benefit of a US Person (as defined in
Regulation S promulgated under the Securities Act ("Regulation S"), has
signed this Agreement outside the United States and has received the
offer to purchase and completed the purchase of the Securities outside
of the United States.
5.4 Each relevant Seller understands and acknowledges that (i) the
Securities have not been registered under the Securities Act and may
not be offered or sold in the United States or to, or for the account
or benefit of, any US Person unless such securities are registered
under the Securities Act or such offer or sale is made pursuant to an
exemption from the registration requirements of the Securities Act and
(ii) the Securities are being distributed by the Buyer pursuant to the
terms of Regulation S, which permits securities to be sold to non-US
Persons in "offshore transactions" (as defined in Regulation S),
subject to certain terms and conditions.
5.5 Each relevant Seller acknowledges that for a period of one year
following Completion ("the Restricted Period") each relevant Seller
shall not (i) engage in any activity for the purpose of, or which may
reasonably be expected to have the effect of, conditioning the market
in the United States for the Securities or (ii) unless such Securities
are registered under the Securities Act or an exemption from the
registration requirements of the Securities Act is available, offer,
sell or transfer the Securities in the United States or to, or for the
account or benefit of a US Person. Each relevant Seller understands
that the Securities or any interest therein are only transferable on
the books and records of the transfer agent and registrar of the Buyer.
Each relevant Seller further understands that such transfer agent and
registrar will not register any transfer of the Securities during the
Restricted Period which the Buyer reasonably believes violates the
restrictions set forth in this paragraph (c), and that the Buyer acting
in good faith may place stop transfer orders with its transfer agent
with respect to certificates representing the Securities to reflect the
restrictions set forth in this clause 5.5.
5.6 Unless the Securities shall first have been registered under the
Securities Act any proposed offer, sale or transfer during the
Restricted Period of any of the Securities shall be subject to the
condition that each Relevant Seller must deliver the Buyer (i) a
written certification that neither record nor beneficial ownership of
the Securities has been offered or sold in the United States to, or for
the account or benefit of any US Person (ii) a written certification of
the proposed transferee that such transferee (or any account for which
such transferee's own account (or an account over which he or she has
investment discretion), and that such transferee is knowledgeable of
and agrees to be bound by the restrictions on, re-sale set forth in
this section and Regulation S during the Restricted Period, and (iii) a
written opinion of United States counsel, in form and substance
reasonably satisfactory to the Buyer, to the effect that the offer,
sale and transfer of such Securities are exempt from registration under
the Securities Act.
12
5.7 Each relevant Seller agrees that for the duration of the Restricted
Period and until such time thereafter as the Buyer shall have received
a written opinion of United States counsel, in form and substance
reasonably satisfactory to the Buyer, to the effect that the Securities
are no longer "restricted securities" within the meaning of Rule
144(a)(5) of the Securities Act, the stock certificate representing the
Securities shall bear any legend required by the Securities Act of
1993, as amended, the Commissioner of Corporations of the State of
California or required pursuant to any state, local or foreign law
governing such Securities, without limitation the certificates shall
bear the following legend:
The Securities represented by this certificate may not be
offered, sold or transferred except in accordance with the
provisions of Regulations S (Rule 901 through Rule 905, and
the Preliminary Notes) under the Securities Act of 1933, as
amended (the "Securities Act"), pursuant to registration
under the Securities Act or pursuant to an available
exemption from registration.
5.8 The Buyer warrants that the Tier Shares to be issued hereunder have
been duly authorised and that when issued and delivered in accordance
with the terms hereof they will be validly issued, fully paid and non
assessable and free of pre-emptive rights and will rank for dividends
and distributions and the Loan Notes when issued will be validly
issued.
6. Warranties/Indemnity
--------------------
6.1 The Warrantors:
6.1.1 warrant to the Buyer as at today's date in the terms of the
Warranties, provided however that the Buyer will not be
entitled to claim that any fact or combination of facts
constitutes a breach of any of the Warranties if and to the
extent that such fact or combination of facts has been fairly
disclosed in the Disclosure Letter;
6.1.2 agree that the Buyer is entering into this Agreement in
reliance on each of the Warranties and that save as provided
in clause 6.1.1 no information of which the Buyer has
knowledge (actual or constructive) will prejudice any claim
made by the Buyer in respect of the Warranties or will
operate to reduce any amount recoverable in respect of any
breach of any of the Warranties or will operate to prevent
any claim being made by the Buyer for any breach by the
Warrantors of the covenants implied by the Law of Property
(Miscellaneous Provisions) Xxx 0000;
6.1.3 undertake that, in the event of any claim being made against
any of them whether under the Warranties or otherwise in
connection with the sale of the Shares to the Buyer, they
will not make any claim against Midas, or against any
Director or employee of Midas, on which or on whom any of
them may have relied before agreeing to any term of this
Agreement or authorising any statement in the Disclosure
Letter, but so that this undertaking will not preclude any
Warrantor from claiming against any other Warrantor under any
right of contribution or indemnity to which such Warrantor
may be entitled.
13
6.2 Without restricting the rights of the Buyer or the ability of the Buyer
to claim damages on any basis available to it, the Warrantors undertake
to the Buyer that in the event of a breach of paragraph 10.3 of
Schedule 4 the Warrantors will, forthwith on demand by the Buyer, pay
to the Buyer or Midas (as the Buyer directs) in cash an amount equal to
the aggregate of the sums (if any) which remain outstanding in respect
of the debts which are the subject of the Warranty in paragraph 10.3 of
Schedule 4 (or if less the amount included in the Completion Statement
in respect of such debts) provided that, upon such payment by the
Warrantors, the Buyer will, if requested so to do, procure the
assignment of such debts (to the extent to which sums remain
outstanding in respect of them) to the Warrantors or such one or more
of them as will have made payment to the Buyer or Midas in accordance
with this clause 6.2 (the costs and expenses relating to such
assignment being borne by the assignee(s)).
6.3 Each of the Warranties will be construed as a separate Warranty and
will not be limited or restricted by reference to, or inference from,
the terms of any other Warranty or any other term of this Agreement.
6.4 In this Agreement, unless otherwise specified, where any Warranty
refers to the knowledge, information, belief 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
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.
6.5 The Warrantors shall indemnify Midas against any liability arising
after the Effective Date in respect of the Property known as Xxxx Xxxx
Xxxxx, 00-00 Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxxx and against any
liability and any associated costs in connection with any claim made
against Midas by Xxxxx Xxxxxxx in connection with the matter described
in the Disclosure Letter against Warranty 26.1.
6.6 Notwithstanding any other provision of this Agreement, the liability of
the Warrantors in respect of the Warranties shall be limited in
accordance with Schedule 8.
6.7 The Buyer acknowledges that:
6.7.1 this Agreement and the documents referred to in it set forth
the entire agreement between the parties with respect to the
subject matter covered by it and supersede and replace all
prior communications, drafts, representations, warrants
stipulations, undertakings and agreements of whatsoever
nature, whether oral or written between the parties relating
thereto;
6.7.2 it does not enter into this Agreement in reliance on any
warranty, representation, undertaking, stipulation or
agreement other than those contained in this Agreement;
14
6.7.3 its only remedies with respect to the subject matter covered
by this Agreement are for breach of contract;
6.7.4 it has no right to rescind this Agreement either for breach
of contract or for negligent or innocent misrepresentation;
6.7.5 without prejudice to the generality of the foregoing, the
Buyer waives any right or remedy it may have against the
Sellers, in respect of any statement (whether oral or
written) of fact or opinion whatsoever. including any untrue
or misleading statement, warranty or representation express
or implied, made to the Buyer or its agents, officers or
employees during the negotiation of or otherwise in
connection with this Agreement save for any warranty
representation, undertaking, stipulation or agreement
expressly contained in this Agreement;
Provided that the provisions of this clause 6.7 will not
exclude any liability which any of the Sellers would
otherwise have to the Buyer or any right which the Buyer may
have to rescind this Agreement in respect of any fraud by any
of the Sellers prior to the execution of this Agreement.
6.8 The Buyer warrants to the Warrantors that it is not aware of any matter
having read the draft report prepared for the Buyer by Price
WaterhouseCoopers for the purpose of the proposed acquisition of the
Shares which (on the basis of the information currently known to it)
would enable it to make a claim under the Warranties.
6.9 The Buyer will indemnify the Sellers or any of them for any liabilities
under any guarantees given by them to secure finance or the use of
assets by Midas except to the extent the liability of Midas should
properly have been provided for in the Completion Statement.
7. Restrictive covenants
---------------------
7.1 For the purpose of assuring to the Buyer, the full benefit of Midas and
in consideration for the Buyer agreeing to buy the Shares on the terms
of this Agreement, each of Xxxxxx Xxxxxxxx and Xxxxxx Xxxxxxxx
undertakes to the Buyer that he/she 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 within the United Kingdom during the period of 3
years immediately following Completion, be engaged, concerned or
interested in, or provide technical, commercial or professional advice
to, any other business which supplies goods and/or services which are
competitive with or of the type supplied by Midas at Completion;
provided that this restriction shall not apply to prevent either Xxxxxx
Xxxxxxxx or Xxxxxx Xxxxxxxx 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 1 per cent of the votes which could be cast at a general
meeting of such Company.
15
7.2 For the purpose of assuring to the Buyer, the full benefit of Midas and
in consideration for the Buyer agreeing to buy the Shares on the terms
of this Agreement, each of Xxxxxxx Xxxxx and Xxx Xxxxx undertakes to
the Buyer that he will not, without the prior written consent of the
Buyer, 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 within the United Kingdom during the period of 1 year
immediately following Completion, be engaged, concerned or interested
in, or provide technical, commercial or professional advice to, any
other business which is in direct competition with Midas in the
business environment in which Midas operates at Completion; provided
that this restriction shall not apply to prevent either Xxxxxxx Xxxxx
and Xxx Xxxxx 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 1
per cent of the votes which could be cast at a general meeting of such
Company.
7.3 For the purpose of assuring to the Buyer the full benefit of Midas and
in consideration for the Buyer agreeing to buy the Shares on the terms
of this Agreement, each of the Covenantors undertakes to the Buyer that
during the period of three years immediately following Completion,
he/she 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:
7.3.1 canvass, solicit or approach, or cause to be canvassed,
solicited or approached, for orders any person who at any
time during the 12 months immediately preceding the date of
Completion is or was:-
7.3.1.1 negotiating with Midas for the supply by Midas of goods or
services; or
7.3.1.2 a client or customer of Midas; or
7.3.1.3 in the habit of dealing with Midas,
where the orders relate to goods and/or services which are
competitive with or of the type supplied by Midas at any time
during the 12 months immediately preceding the date of
Completion;
7.3.2 deal or contract with any person who at any time during the
12 months immediately preceding the date of Completion is or
was:-
7.3.2.1 negotiating with Midas for the supply by Midas of goods or
services; or
7.3.2.2 a client or customer of Midas; or
7.3.2.3 in the habit of dealing with Midas,
16
where the dealing or contracting relates to goods and/or
services which are competitive with or of the type supplied
by Midas at any time during the 12 months immediately
preceding the date of Completion;
7.3.3 solicit or entice, or endeavour to solicit or entice, away
from Midas, or employ, any person employed by, or who is or
was a consultant to, Midas at Completion or at any time
during the period of 6 months immediately preceding the date
of Completion (provided that this clause shall not prevent
the making of routine advertisements in the trade and
national press if it is clear that they are not aimed
specifically at employees or consultants of Midas);
7.3.4 use in connection with any business any name which includes
the name of Midas or any colourable imitation of it.
7.4 Each of the Covenantors acknowledges that he/she has information in
respect of the business and financing of Midas and its dealings,
transactions, affairs, plans and proposals, all of which information
is, or may be, secret or confidential and important to Midas. In this
clause 7 such information is called "Confidential Information" and
includes, without limitation, confidential or secret information
relating to Midas' 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 Covenantors further acknowledges that the disclosure of
Confidential Information (whether directly or indirectly) to actual or
potential competitors of Midas would place it at a competitive
disadvantage and would do damage (whether financial or otherwise) to
its business. Each of the Covenantors accordingly agrees to enter into
the restrictions contained in clause 7.5.
7.5 Each of the Covenantors undertakes that he/she will not at any time
after Completion:
7.5.1 disclose to any person except to those authorised by Midas to
know;
7.5.2 use for his/her own purposes or for any purposes other than
those of Midas; or
7.5.3 through any failure to exercise all due care and diligence
cause or permit any unauthorised disclosure of, any
Confidential Information, provided that these restrictions on
each Warrantor will cease to apply to information which
(otherwise than through the default of any Warrantor) becomes
available to the public generally.
7.6 The parties agree that each of the undertakings set out in this clause
7 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 Covenantors.
17
7.7 If this Agreement or any wider arrangement of which it forms part
constitutes an agreement, particulars of which are required to be
furnished to the Director General of Fair Trading pursuant to section
24 of the Restrictive Trade Practices Xxx 0000, then none of the
parties shall give effect to or enforce or purport to enforce any
restriction by virtue of which the Agreement (or wider arrangement) is
subject to registration until the day after relevant particulars have
been duly furnished in accordance with section 24 of that Act.
7.8 The covenantors shall cease to be bound by the foregoing provisions of
this clause 7:
7.8.1 if an order shall be made or a resolution passed for the
winding up of the Buyer (except for a voluntary members'
winding-up approved in writing by the Covenantors);
7.8.2 if an encumbrancer takes possession or a receiver is
appointed of the whole or the substantial part of the assets
or undertaking of the Buyer or if distress or execution is
levied or enforced upon or against the whole or the
substantial part of the assets of the Buyer and is not
discharged, paid out, withdrawn or removed within 28 days;
7.8.3 if the Buyer is deemed for the purposes of section 123
Insolvency Act 1986 (or its US equivalent) to be unable to
pay its debts or compounds or proposes or enters into any
re-organisation or special arrangement with its creditors
generally;
7.8.4 if default shall be adjudged or agreed such agreement not to
be unreasonably withheld or delayed to have been made by
Midas or the Buyer in the performance or observance of any
material covenant, condition or provision binding on it under
this Agreement and Midas or the Buyer (as appropriate) shall
fail to perform fully or make good the breach of such
covenant, condition or provision within 28 days from receipt
of notice in writing from a Covenantor requiring it to do so.
8. Management of Midas
-------------------
During the period of three years following Completion:
8.1 Xxxxxx Xxxxxxxx shall, so long as he still a full time employee of
Midas under the terms of his Service Contract, have day to day
operational control of Midas and shall report to the Chief Executive
Officer or such other senior executive of the Buyer as such Chief
Executive Officer shall designate;
8.2 The Buyer shall have ultimate managerial control over Midas but shall
not unreasonably interfere in the management of Midas. Midas shall be
treated as a separate profit centre of the Buyer. The Buyer shall
direct the administrative and financial functions of Midas.
18
8.3 The growth of the Buyer's business in the United Kingdom relating to
Oracle computer software programs and technical support services shall
be through Midas.
8.4 Each of the Covenantors shall facilitate and cooperate fully with the
timely preparation of audited accounts of Midas, pro forma statements
and other reports as are required to be prepared by the Buyer under US
securities laws, including the execution of a management representation
letter to the Buyer's auditors in relation to such audits or reports in
standard terms.
8.5 Xxxxxx Xxxxxxxx and Xxxxxx Xxxxxxxx shall indemnify Midas for all costs
associated with the Exsel Plus Executive Pension Plan provided by
Scottish Equitable (save for contributions due to such plan by Midas
for the benefit of the members of such plan) and if so requested by the
Buyer at any time, Xxxxxx Xxxxxxxx and Xxxxxx Xxxxxxxx will look at way
to arrange for the plan to be wound up at no cost to Midas and for its
assets to be transferred into personal pension plans for them. In the
event that such plan is wound up any pension contributions subsequently
required from Midas under the service agreements of Xxxxxx Xxxxxxxx and
Xxxxxx Xxxxxxxx shall thereafter be paid into such personal plans.
9. Completion
----------
9.1 The Covenantors shall procure that between the time of the execution of
this Agreement and Completion, Midas will carry on business in the
ordinary course and will not do anything which is not of a routine
unimportant nature without the prior written consent of the Buyer. The
Buyer shall assume effective control and management of Midas at the
Effective Date. The following acts by Midas, or any agreement by Midas
to do any of the following acts, shall, but without limitation, be
deemed not to be of a routine unimportant nature:
9.1.1 incurring any expenditure exceeding(pound)10,000 on capital
account or entering into any commitment to do so;
9.1.2 disposing of any part of its assets except Stock in the
ordinary course of trading;
9.1.3 borrowing any money except under its existing overdraft
facilities from its bankers or making any payments out of or
drawings on its bank account other than routine payments;
9.1.4 entering into any guarantee or indemnity;
9.1.5 entering into any unusual or abnormal Contract or commitment;
9.1.6 granting any lease or third party right in respect of the
Property or assigning or otherwise disposing of the same (or
any part thereof);
9.1.7 making any loan;
19
9.1.8 entering into any leasing, hire purchase or other agreement
or arrangement for payment on deferred terms;
9.1.9 declaring, making or paying any dividend or other
distribution;
9.1.10 granting any security;
9.1.11 appointing any additional Director;
9.1.12 taking on new employees or terminating the employment of any
employees or making any change in the terms or conditions of
employment or pension benefits of any employees;
9.1.13 permitting any insurance to lapse or doing anything which
would make any policy of insurance void or voidable;
9.1.14 creating or issuing any class of share or loan capital; and
9.1.15 making any change in its business structure or organisation.
9.2 The sale and purchase of the Shares will be completed at the offices of
the Buyer's Solicitors on 4 December 1998 or such earlier date as may
be agreed in writing between the Buyer and Xxxxxx Xxxxxxxx (on behalf
of the Sellers), whereupon
9.2.1 the Sellers will produce and deliver to the Buyer:
9.2.1.1 duly executed transfers of the Shares in favour of the Buyer
(or as it will direct) together with all relevant share
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 the Buyer may
require to enable the Buyer and its nominee(s) to be
registered as the holders of the Shares;
9.2.1.2 [this clause has been intentionally deleted];
9.2.1.3 the written resignation of Xxxxx Xxxxxxxx as auditors of
Midas accompanied by the statement referred to in section 392
of the Act;
9.2.1.4 the certificate of incorporation, any certificate(s) of
incorporation on change of name, the common seal and the
statutory books and registers (all entered up to date) of
Midas;
9.2.1.5 all deeds and documents relating to the title of Midas to the
Property;
9.2.1.6 all cheque books in current use of Midas;
20
9.2.1.7 bank statements in respect of each account of Midas as at the
close of business on the last Business Day prior to today's
date (and updated to the Effective Date), together in each
case with a reconciliation statement prepared by the Sellers
to show the position as at today and the Effective Date
(listing unpresented cheques drawn or received by Midas and
standing orders payable since the date of such bank
statements);
9.2.1.8 all licences, certificates or other documents previously
specified by the Buyer;
9.2.1.9 all papers, books, records, keys, credit cards and other
Property (if any) of Midas which are in the possession or
under the control of the Sellers; and
9.2.1.10 duly executed powers of attorney in the agreed terms;
9.2.2 each Seller will:
9.2.2.1 repay, and procure that any spouse or child of such Seller or
any Company of which such Seller (and/or any such spouse or
child) has control (as defined in section 840 Income and
Corporation Taxes Act 1988) will repay, all amounts owed by
him, her or it to Midas, whether due for payment or not;
9.2.2.2 deliver to the Buyer a deed in the agreed terms acknowledging
that neither such Seller nor any such spouse, child or
Company has any claim against Midas (save for unpaid salary
and expenses for the month of December) and that there is no
agreement or arrangement (other than the relevant Seller's
service agreement) under which Midas has any actual,
contingent or prospective obligation (including, but not
limited to, any obligation under any guarantee entered into
by Midas) to or in respect of any of them; and
9.2.2.3 in respect of any such agreement or arrangement as is
referred to in clause 9.2.2.2 which previously existed
deliver to the Buyer evidence of the release or termination
of it in form satisfactory to the Buyer;
9.2.3 the Sellers will procure that duly convened meetings are held
at which:
9.2.3.1 the transfers referred to in clause 9.2.1.1 (subject to
stamping if not previously effected) are approved for
registration in the books of Midas;
9.2.3.2 the accounting reference date of Midas is changed to 30
September;
9.2.3.3 any persons nominated by the Buyer are appointed as
additional directors of Midas and any person nominated by the
Buyer is appointed as secretary of Midas; and
9.2.3.4 all existing instructions to the bankers of Midas are revoked
and new instructions given to such bankers as the Buyer may
nominate, in such form as the Buyer directs;
21
9.2.4 the Sellers will procure that Xxxxxx Xxxxxxxx, Xxxxxx
Xxxxxxxx, Xxxxxxx Xxxxx, Xxx Xxxxx and Xxxx Bressey enter
into and Midas and the Buyer will enter into the Service
Contracts;
9.2.5 the Buyer will pay in accordance with clause 3, that part of
the Consideration which is payable to the Sellers on
Completion and issue the Tier Shares due for issue under such
clause (and share certificates in respect thereof within a
further 10 days) and the Buyer and the Sellers shall take all
such steps and give all such written instructions as are
necessary or desirable or give effect to the provisions of
Schedule 6.
9.3 The Covenantors shall procure that management accounts of Midas for the
period to 30th November 1998 are delivered to the Buyer on or before
10th December 1998 in such form as it may reasonably require for the
purposes of compliance with the requirements of the Nasdaq National
Market and US securities laws.
9.4 The Covenantors shall procure that Xxxxx Xxxxxxxx shall deliver a
letter in the agreed terms to the Buyer. The Buyer and the Covenantors
agree that if Xxxxx Xxxxxxxx charge Midas and/or the Buyer for their
consent for the future use of historical financial statements of Midas
which the Buyer may reasonably require for the purposes of compliance
with the requirements of the Nasdaq National Market and US securities
laws, then such costs shall be borne:
9.4.1 as to be the first (pound)25,000, by the Buyer;
9.4.2 as to be the second (pound)25,000, by the Covenantors; and
9.4.3 as to any further sums, equally by the Buyer (as to 50%) and
the Covenantors (as to 50%).
9.5 As soon as reasonably practicable following signature of this Agreement
Xxxxxx Xxxxxxxx shall take such steps as the Buyer shall reasonably
request to enable the Buyer or Midas to buy keyman insurance (which
shall be for the exclusive benefit of the Buyer or Midas as
appropriate) in respect of him.
10. Announcements
-------------
No announcement concerning the transactions contemplated by this
Agreement or any matter ancillary to it and no disclosure of the terms
of this Agreement will be made by the Sellers except with the prior
written approval of the Buyer or by the Buyer (save as required by law
or the regulations of the Securities Exchange Commission or the Nasdaq
National Market) except with the prior written approval of any of the
Sellers.
22
11. Costs
-----
Each party to this Agreement will bear such party's own costs and
expenses relating to the preparation and completion of this Agreement,
except where otherwise expressly stated.
12. Interest
--------
If any Seller becomes liable to pay the Buyer or Midas any sum pursuant
to this Agreement, whether a liquidated sum or by way of damages or
otherwise, such Seller will be liable to pay interest on such sum from
the due date for payment at the annual rate of 3 per cent above the
base lending rate from time to time of Lloyds Bank PLC, accruing on a
daily basis until payment is made, whether before or after any
judgment.
13. Notices
-------
13.1 Any demand, notice or other communication given or made under or in
connection with this Agreement will be in writing.
13.2 Any such demand, notice or other communication will, if otherwise given
or made in accordance with this clause 13, be deemed to have been duly
given or made as follows:
13.2.1 if sent by prepaid first class post, on the second Business
Day after the date of posting or on the seventh Business Day
in the case of a notice to the Buyer; or
13.2.2 if delivered by hand, upon delivery at the address provided
for in this clause 13; or
13.2.3 if sent by facsimile, on the day of transmission provided
that a confirmatory copy is, on the same Business Day that
the facsimile is transmitted, sent by pre-paid first class
post in the manner provided for in this clause 13, provided
however that, if it is delivered by hand or sent by facsimile
on a day which is not a Business Day or after 4 p.m. on a
Business Day, it will instead be deemed to have been given or
made on the next Business Day.
13.3 Any such demand, notice or other communication will, in the case of
service by post or delivery by hand, be addressed (subject as provided
in this clause 13) to the recipient at the recipient's address stated
in this Agreement or at such other address as may from time to time be
notified in writing by the recipient to the sender as being the
recipient's address for service, provided that if it is given or made
to the Sellers' Solicitors, it will be treated as validly given or made
to all of the Sellers.
13.4 Any such demand, notice or other communication will, in the case of
service by facsimile, be sent to the recipient or to any person service
on whom (in accordance with the foregoing provisions of this clause 13)
is deemed to be service on the recipient, using a facsimile number then
used by the recipient or (as the case may be)
23
such other person at an address which (in accordance with such
provisions) could have been used for service by post.
13.5 The provisions of this clause 13 will not apply, in the case of service
of process relating to any proceeding, suit or action, to the extent
that such provisions are inconsistent with the Rules of the Supreme
Court 1965.
14. General
-------
14.1 This Agreement will be binding on and will enure for the benefit of
each party's successors, assigns and personal representatives (as the
case may be).
14.2 Except insofar as the same have been fully performed at Completion,
each of the agreements, covenants, obligations, warranties, indemnities
and undertakings contained in this Agreement will continue in full
force and effect notwithstanding Completion.
14.3 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
Completion to vest in the Buyer legal and beneficial ownership of the
Shares in accordance with this Agreement and otherwise to give effect
to its terms.
14.4 Failure or delay by any party in exercising any right or remedy under
this Agreement will not in any circumstances operate as a waiver of it,
nor will any single or partial exercise of any right or remedy in any
circumstances preclude any other or further exercise of it or the
exercise of any other right or remedy.
14.5 Any waiver of any breach of, or any default under, any of the terms of
this Agreement will not be deemed a waiver of any subsequent breach or
default and will in no way affect the other terms of this Agreement.
14.6 The Buyer may release or compromise the liability of, or grant time or
any other indulgence to, any person who is a party to this Agreement
without in any way prejudicing or affecting the liability (whether
joint and several or otherwise) of any other person who is a party to
this Agreement.
14.7 In the event of any claim being made against the Sellers under the
Warranties or Part 2 of Schedule 5, the Sellers shall not plead against
such claim the Xxxxxxx xx Xxxxxxxxxxx Xxx 0000 or any other statute
(present or future) directly or indirectly consolidating, extending,
replacing or re-enacting the same, or any other rule of law relating to
limitation of time in which an action can be brought or claim made;
provided that this clause 14.7 is without prejudice to any express
provision of this Agreement regarding time limits for notifying or
making claims.
14.8 The rights and remedies expressly provided for by this Agreement will
not exclude any rights or remedies provided by law.
24
14.9 This Agreement may be executed in any number of counterparts, and by
the parties on separate counterparts, each of which so executed and
delivered will be an original, but all the counterparts will together
constitute one and the same agreement.
14.10 The formation, existence, construction, performance, validity and all
aspects whatsoever of this Agreement or of any term of this Agreement
shall be governed by English law. The English Courts shall have
jurisdiction to settle any disputes which may arise out of or in
connection with this Agreement.
25
SIGNED by Xxxxxx Xxxxxxx Xxxxxxxx ) /s/ Xxxxxx Xxxxxxx Xxxxxxxx
in the presence of: X X Xxxxxxxx )
Witness' signature: /s/ X X Xxxxxxxx
Name: Wragge Co.
Address: Birmingham
Occupation: Solicitor
SIGNED by Xxxxxx Xxxxx Xxxxxxxx ) /s/ Xxxxxx Xxxxx Xxxxxxxx
in the presence of: X X Xxxxxxxx )
Witness' signature: /s/ X X Xxxxxxxx
Name: Wragge Co.
Address: Birmingham
Occupation: Solicitor
SIGNED by Xxxxxxx Xxxxx ) /s/ Xxxxxxx Xxxxx
in the presence of: X X Xxxxxxxx )
Witness' signature: /s/ X X Xxxxxxxx
Name: Wragge Co.
Address: Birmingham
Occupation: Solicitor
SIGNED by Xxxxxxx Xxxxx ) /s/ Xxxxxxx Xxxxx
in the presence of: X X Xxxxxxxx )
Witness' signature: /s/ X X Xxxxxxxx
Name: Wragge Co.
Address: Birmingham
Occupation: Solicitor
26
SIGNED by Xxxx Xxxxx ) /s/ Xxxx Xxxxx
in the presence of: X X Xxxxxxxx )
Witness' signature: /s/ X X Xxxxxxxx
Name: Wragge Co.
Address: Birmingham
Occupation: Solicitor
SIGNED by Xxxxxx Xxxxxxxx ) /s/ Xxxxxx Xxxxxxxx
in the presence of: X X Xxxxxxxx )
Witness' signature: /s/ X X Xxxxxxxx
Name: Wragge Co.
Address: Birmingham
Occupation: Solicitor
SIGNED by Nicola Hitchin ) /s/ Nicola Hitchin
in the presence of: X X Xxxxxxxx )
Witness' signature: /s/ X X Xxxxxxxx
Name: Wragge Co.
Address: Birmingham
Occupation: Solicitor
27
SIGNED by Xxx Xxxxx ) /s/ Xxx Xxxxx
in the presence of: X X Xxxxxxxx )
Witness' signature: /s/ X X Xxxxxxxx
Name: Wragge Co.
Address: Birmingham
Occupation: Solicitor
SIGNED by Xxxxxxx Xxxx Xxxxx ) /s/ Xxxxxxx Xxxx Xxxxx
in the presence of: X X Xxxxxxxx )
Witness' signature: /s/ X X Xxxxxxxx
Name: Wragge Co.
Address: Birmingham
Occupation: Solicitor
SIGNED by Xxxxxx Xxxxxxxx Xxxxx ) /s/ Xxxxxx Xxxxxxxx Xxxxx
in the presence of: X X Xxxxxxxx )
Witness' signature: /s/ X X Xxxxxxxx
Name: Wragge Co.
Address: Birmingham
Occupation: Solicitor
28
SIGNED by Xxxxxx Xxxxxxx Xxxxxxxx ) /s/ Xxxxxx Xxxxxxx Xxxxxxxx
as Trustee of the R Xxxxxxxx No 1 )
Trust, the R Xxxxxxxx No 2 Trust )
and the R Xxxxxxxx No 3 Trust )
in the presence of: X X Xxxxxxxx )
Witness' signature: /s/ X X Xxxxxxxx
Name: Wragge Co.
Address: Birmingham
Occupation: Solicitor
SIGNED by Xxxxxx Xxxxx Xxxxxxxx ) /s/ Xxxxxx Xxxxx Xxxxxxxx
as Trustee of the R Xxxxxxxx No 1 )
Trust, the R Xxxxxxxx No 2 Trust )
and the R Xxxxxxxx No 3 Trust )
in the presence of: X X Xxxxxxxx )
Witness' signature: /s/ X X Xxxxxxxx
Name: Wragge Co.
Address: Birmingham
Occupation: Solicitor
SIGNED by Xxxxx Xxxxxxx ) /s/ Xxxxx Xxxxxxx
in the presence of: X X Xxxxxxxx )
Witness' signature: /s/ X X Xxxxxxxx
Name: Wragge Co.
Address: Birmingham
Occupation: Solicitor
SIGNED by Xxxxx Xxxxxxx ) /s/ Xxxxx Xxxxxxx
in the presence of: X X Xxxxxxxx )
Witness' signature: /s/ X X Xxxxxxxx
Name: Wragge Co.
Address: Birmingham
Occupation: Solicitor
29
SIGNED by Xxxxx Xxxxxxxx ) /s/ Xxxxx Xxxxxxxx
in the presence of: X X Xxxxxxxx )
Witness' signature: /s/ X X Xxxxxxxx
Name: Wragge Co.
Address: Birmingham
Occupation: Solicitor
SIGNED by Xxxxx X. Xxxxxxx ) /s/ Xxxxx X. Xxxxxxx
duly authorised to sign for and on )
behalf of Tier Technologies Inc. )
in the presence of: Xxxxx X. Xxxxxxx )
Witness' signature: /s/ Xxxxx X. Xxxxxxx
Name: Xxxxx X. Xxxxxxx
Address: 0 Xxxxxxxx Xxx.
Xxxxxxxxxx, XX 00000
Occupation: Housewife
30
