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SHARE PURCHASE AGREEMENT
DATED MAY 16 2001
BY AND BETWEEN
PARADIGM GEOPHYSICAL LIMITED
AND
XXXXX XXXXX XXXX
REGARDING
THE PURCHASE OF THE ENTIRE ISSUED SHARE CAPITAL OF SYSDRILL LIMITED
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Amended - Masons - 15/5/01
SHARE PURCHASE AGREEMENT
DATED the 16th. day of May 2001
BY AND BETWEEN
PARADIGM GEOPHYSICAL LIMITED
a corporation incorporated under the laws of the State of Israel
Company number: 00-000000-0
(the "PURCHASER")
- and -
XXXXX XXXXX XXXX,
a Scottish citizen and resident
(the "SELLER")
RECITALS:
WHEREAS, the Company is engaged in the development, marketing, sale
and support of, and services related to, software drilling
solutions for the oil and gas industry;
WHEREAS, the Seller owns the entire issued share capital of the
Company, which shares Seller wishes to sell to the Purchaser
and the Purchaser wishes to buy such shares from Seller, all
on the terms hereinafter set forth;
NOW THEREFORE, in consideration of the representations,
warranties, promises and mutual agreements and benefits
herein contained and to be derived and for other good and
valuable consideration (the receipt and sufficiency of which
are acknowledged by each party), the parties hereto agree as
follows:
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ARTICLE 1
INTERPRETATION
1.1 DEFINITIONS
In this Agreement, except as otherwise expressly provided, capitalised
words or expressions shall have the meanings set out below:
"Agreed Form" means a form agreed between the parties and for the
purposes of identification, initialed by or on behalf of the parties;
"Agreement" means this agreement, including the Schedules and the
Disclosure Letter which forms an integral part of the agreement between
the Purchaser and the Seller for the sale and purchase of the Company;
"Business" means the business of the Company as at the Completion
Date;
"Business Day" means a day (other than a Saturday) on which banks are
open for the transaction of normal banking in the City of London;
"Company" means Sysdrill Limited brief details of which appear in
Schedule 1;
"Completion Accounts" means the Completion Balance Sheet and profit and
loss account prepared as at close of business on the Completion Accounts
Date;
"Completion Balance Sheet" means the balance sheet of the Company
prepared in accordance with Schedule 2 as at the Completion Accounts
Date;
"Completion Accounts Date" means Tuesday 15 May 2001;
"Company Board" means the board of directors of the Company from time
to time;
"Companies Act" means the Companies Xxx 0000 as amended by the
Companies Xxx 0000;
"Completion Date" means 16 May 2001 or such earlier or later date as may
be agreed by the parties;
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"Company Intellectual Property" means any Intellectual Property
Rights used or owned by the Company;
"Company Related Party" Each of the following shall be deemed to be a
"Company Related Party":
(i) any Entity (other than the Company) in which any one of the
Persons referred to in sub-clauses, (ii) or (iii) below holds (or
in which more than one of such individuals collectively hold),
beneficially or otherwise, a controlling voting, proprietary or
equity interest;
(ii) each individual who is, or who has at any time been, a director
and/or officer of the Company but excluding the secretary of the
Company immediately prior to Completion; and
(iii) any Connected Person of any of the individuals referred to in
clause (ii) above;
"Completion" means the completion of the sale and purchase of the
shares in accordance with Article 6;
"Contract" means any contract, agreement, obligation, promise,
commitment or other undertaking (written or oral), which is legally
binding;
"Connected Person" shall have the meaning ascribed to it in section
839 (2) of the Taxes Xxx 0000;
"Disclosed" means fairly and specifically disclosed to the Purchaser
in the Disclosure Letter;
"Disclosure Letter" means the letter (together with the documents
referred in and attached to the Schedule thereto and included in the
bundle of disclosed documents) in the Agreed Form from the Seller to the
Purchaser;
"Employee Benefit Plan" means any pension or benefit plan established by
the Company existing at the Completion Date or prior thereto, to which
the Company contributes or has contributed or under which any employee
(whether past or present) or any beneficiary thereof is covered, or is
eligible for coverage;
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"Encumbrance" shall mean an encumbrance or security interest of any kind
whatsoever including (without limitation) any lien, pledge,
hypothecation, charge, mortgage, security interest, encumbrance, trust,
equitable interest, option, right of first refusal, pre-emptive right,
conversion right, third party right or interests, right of set-off or
counterclaim or any other type of preferential agreement (such as a
retention of title arrangement) having similar effect but excluding any
pre-emption rights on the transfer of shares arising under the Articles
of Association of the Company.
"Entity" shall mean any corporation (including, without limitation, any
not-for-profit entity), general partnership, limited partnership,
limited liability partnership, joint venture, company (including,
without limitation, any limited liability company).
"Escrow Agent" shall have the meaning set out in the Escrow Agreement.
"Escrow Agreement" shall mean the Security Escrow Agreement dated the
date hereof between the Seller, the Purchaser and Escrow Agent.
"Financial Statements" means the audited financial statements of the
Company as of December 31, 1998 and December 31, 1999 (comprising an
audited profit and loss account and a balance sheet) all prepared in
accordance with GAAP consistently applied;
"GAAP" means generally accepted accounting principles in Great
Britain;
"Governmental Authority" means any government department or agency or
local or other authority in the United Kingdom;
"Governmental Authorisation" means any approval, consent, permit,
ruling, waiver, exemption or other authorisation (including the lapse,
without objection, of a prescribed time under a statute or regulation
that states a transaction may be implemented if a prescribed time lapses
following the giving of notice without an objection being made) issued,
granted, given or otherwise made available by or under the authority of
any Governmental Authority or pursuant to any Law;
"Halmar Investment" means the investment of the Company in Halmar
Sp.z.oo, a company registered in Poland;
"Intellectual Property Rights" any and all patents, trade marks, service
marks (registered or unregistered), trade dress, and all applications
and registrations in
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any jurisdiction pertaining to the foregoing and any good will
associated therewith; patentable inventions, discoveries, improvements,
ideas, formula methodology, processes, technology, computer programs and
software (including, except where otherwise indicated, the source code
and object code), and all applications and patents in any jurisdiction
pertaining to the foregoing; registered designs, unregistered design
rights, copyrights in writings, designs, mask works or other works,
(including copyright in any designs and computer software), and all
applications and registrations in any jurisdiction for the foregoing;
internet web sites, domain names, and all applications and registrations
pertaining thereto; licenses relating to the foregoing; inventions,
trade secrets, know-how, business names, trading names, brand names and
rights of a similar character in any part of the world and all
applications and rights to apply for protection of any of the same;
claims or causes of action arising out of or related to infringement or
misappropriation of the foregoing;
"Laws" means all applicable laws, statutes, regulations, statutory
instruments, ordinances, rules, orders, directives or other requirements
whether of the UK or the European Union or of any Governmental
Authority;
"Legal Requirement" shall mean the requirement of any statute, statutory
provision regulations or any subordinated or delegated legislation
including (without limitation) any statutory instruments, rules,
regulations, orders or subordinate or delegated legislation made
pursuant to any of the foregoing in force at the date of this Agreement;
"Loan Notes" shall mean the guaranteed loan notes in the Agreed Form in
the principal amount of L2,900,000, increased or decreased in accordance
with the provisions of paragraph 1.1 of Schedule 2 to this Agreement ;
"Management Accounts" the unaudited management accounts of the
Company to 15 May 2001 as Disclosed;
"Material Company Contract" shall have the meaning ascribed to it in
Article 3.11;
"Net Assets" means the net assets of the Company as shown in the
Completion Balance Sheet and determined in accordance with the
provisions of Schedule 2;
"Order" means any (i) order, judgement or determination of any court,
administrative agency or other Governmental Authority or any arbitrator
or arbitration panel; or (ii)
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Contract with any Governmental Authority that is or has been entered
into in connection with any Proceeding;
"Ordinary Course of Business" means any action taken by the Company
which is recurring in nature, is consistent with any of the Company's,
past practices, and is taken in the ordinary course of the Company's,
normal day-to-day operations;
"Organisational Documents" means the Memorandum and Articles of
Association as the same may be amended, supplemented or otherwise
modified from time to time;
"Paradigm Shares" means 200,000 ordinary shares par value NIS 0.5 of
the Purchaser;
"Party" means the Seller or the Purchaser or, as the context
requires, either one of them;
"Pension Scheme" means the Sysdrill Directors SSAS established by
Definitive Trust Deed dated 23, May 1996 and referred to in Article
11.1;
"Person" includes an individual, corporation, partnership, trustee,
trust, unincorporated association, executor, administrator or other
legal or personal representative and pronouns have a similarly extended
meaning;
"Personal Pension Scheme" has the meaning given in section 630 of the
Taxes Act;
"Pounds" means the legal currency of the United Kingdom;
"Proceeding" shall mean any litigation, arbitration or proceedings in
any tribunal or any dispute resolution process;
"Property" means the Mackenzie Building, 000 Xxxxx Xxxxxx, Xxxxxxxx XX00
0XX disposed of by the Company to the Seller or an affiliate of the
Seller prior to Completion;
"Purchase Price" shall mean the sum of L3,500,000, increased or
decreased in accordance with the provisions of paragraph 1.1 of Schedule
2 to this Agreement; (payable in cash and by the issue of Loan Notes)
and in addition the issue and allotment to the Seller of the Paradigm
Shares;
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"Purchaser Group Company" means any subsidiary or holding company of the
Purchaser or any subsidiary of any such holding company;
"Purchaser's Accountants" means Xxxx, Xxxxx & Xxxxx, an affiliate of
Ernst & Young of 0 Xxxxxxxx Xxxxxx, Xxx Xxxx 00000, Xxxxxx;
"Registered Intellectual Property" means registered patents and
trademarks;
"Returns" shall mean all reports, estimates, declarations of estimated
tax, information statements and returns relating to, or required to be
filed in connection with, any Tax, including information returns or
reports with respect to withholding and other payments to third parties;
"Seller's Knowledge" or "knowledge of the Seller" shall mean the
knowledge of the Seller after due and careful inquiry and consultation
with Xxxxxx Xxxx, the General Manager of the Company, and Xxxx Xxx, the
administrator of the Company.
"Seller's Accountants" means Deloitte & Touche of 0 Xxxxx'x Xxxxxxx,
Xxxxxxxx, XX00 0XX;
"Seller's Loan" shall have the meaning ascribed to it in Article 6.4;
"Shares" means the one ordinary share of the Company par value L1 per
share of the Company, constituting the entire issued share capital of
the Company;
"Tax" or "Taxation" shall have the meaning given in the Tax Deed of
Covenant;
"Taxation Authority" shall have the meaning in the Tax Deed of
Covenant;
"Tax Deed of Covenant" means the covenant given by the Seller to the
Purchaser in the form set out in Schedule 3 to this Agreement;
"Taxes Act" means the Income and Corporation Taxes Xxx 0000;
"Transactional Agreements" shall mean the Agreement and all other
agreements, certificates and instruments specifically referred to in
this Agreement;
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"Transactions" means the execution and delivery of this Agreement and
the other Transactional Agreements and all the transactions contemplated
by this Agreement and the other Transactional Agreements to be performed
at Completion; and
"Warranties" means the warranties and representations set out in Article
3 of this Agreement.
1.2 CONSTRUCTION
In this Agreement:
1.2.1 words denoting the singular include the plural and vice versa
and words denoting any gender include all genders;
1.2.2 the word "including" shall mean "including without limitation";
1.2.3 any reference to a statute or statutory provision shall mean:
(a) any statutory modification or re-enactment thereof
(whether before or on or after the date hereof) for the
time being in force;
(b) all statutory instruments or orders made pursuant
thereto; and
(c) any statutory provisions of which that statutory
provision is a re-enactment or modification,
but provided always that no such modification or re-enactment
after the Completion Date shall cause any additional liability on
any Party or extend the liability of any Party under this
Agreement;
1.2.4 the use of headings is for convenience of reference only and
shall not affect the construction of this Agreement;
1.2.5 when calculating the period of time within which or following
which any act is to be done or step taken, the date which is the
reference day in calculating such period shall be excluded and
if the last day of such period is not a Business Day, the period
shall end on the next Business Day;
1.2.6 references to Articles or Schedules or paragraphs of Schedules
are to Articles, Schedules or paragraphs to this Agreement;
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1.2.7 any word or phrase defined in the Companies Act or the Taxes Act
shall have that meaning in this Agreement. ARTICLE 2
PURCHASE AND SALE OF PURCHASED ASSETS
2.1 PURCHASE AND SALE
Subject to the terms and conditions of this Agreement, on the Completion
Date, the Purchaser will purchase and the Seller will, with full title
guarantee to the Shares, sell to the Purchaser the Shares in
consideration of the Purchase Price.
2.2 PAYMENT OF PURCHASE PRICE
The Purchase Price shall be satisfied as follows:
(a) by the payment of L300,000 to the Seller in cash on Completion
(payable by electronic bank transfer to the account specified by
the Seller for this purpose) and the deposit on Completion of
L300,000 with the Escrow Agent pursuant to the Escrow Agreement;
(b) by the issue and allotment to the Seller of the Paradigm Shares;
(c) by the issue to the Seller by Paradigm of the Loan Notes.
2.3 The Purchase Price shall be adjusted in accordance with the
provisions of Schedule 2.
2.4 STAMP DUTY
The Purchaser shall pay all stamp duty payable in respect of the
transfer of the Shares.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE SELLER
Except as Disclosed the Seller represents and warrants to Purchaser as set out
in Articles 3.1 to 3.25 below. For purposes of this Agreement, the disclosure of
any matter with sufficient particularity in the Disclosure Letter shall serve as
sufficient disclosure for purposes of all of the representations and warranties
contained in this Article 3 as to which the
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descriptive nature of the disclosure provides sufficient notice of the
materials, facts or items described therein:3.
3.1 ORGANISATION
3.1.1 The Company is a company duly incorporated and validly existing
under the laws of the Scotland and has not been dissolved.
3.1.2 The Company has the requisite corporate power and authority to
conduct the Business.
3.1.3 The Company has all requisite corporate power and authority to
own and operate its properties and assets, to execute and
deliver this Agreement and the other Transactional Agreements to
be executed and delivered by it, and to carry out the provisions
hereof and thereof, and to carry on Business as presently
conducted.
3.1.4 The details in the Disclosure Letter with respect to the
incorporation details of the Company, its directors, secretary,
auditors and bankers are complete and accurate in all material
respects.
3.1.5 No order has been made or resolution passed or petition
presented for the liquidation or the winding up or cessation of
the Company's business or affairs, nor has any order been made
or meeting held to consider placing the Company into
receivership or for an administrator to be appointed. No notice
has been received by the Company relating to it being struck off
the register of companies or dissolved.
3.1.6 The Company has no subsidiaries and has never owned,
beneficially or otherwise, any shares or other securities of,
or any other direct or any other indirect interest of any
nature in, any Entity other than the Halmar Investment.
3.2 CERTIFICATE OF INCORPORATION MEMORANDUM AND ARTICLES OF ASSOCIATION;
RECORDS.
3.2.1 The Company has delivered to Purchaser with the Disclosure Letter
accurate and complete copies of:
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(a) the Company's Certificate of Incorporation, Certificate of
Incorporation on Change of Name, the Memorandum and
Articles of Association, including all amendments thereto,
as presently in effect;
(b) the Register of Members of the Company as at the date
of this Agreement; and
(c) the minutes and other records of the meetings and other
proceedings (including any actions taken by written
consent or otherwise without a meeting) of the members of
the Company, the Company Board and all committees of the
Company Board.
3.2.2 All existing minutes of proceedings of the members of the Company
or the Company Board, or any committee of the Company Board in
which any action has been approved or taken have been Disclosed
3.2.3 Save as Disclosed, the Company has never conducted any business
under or otherwise used, for any purpose or in any jurisdiction,
any trade name or other business name other than "Sysdrill
Limited".
3.2.4 The books of account, register of members, minute books and other
corporate, financial and business records of the Company are
accurate, up-to-date and complete in all material respects, and
are as of the date of this Agreement in accordance with sound and
prudent business practices for companies registered in the United
Kingdom carrying on the same activities as the Company in all
material respects.
3.2.5 Save as Disclosed, all the records of the Company are in the
actual possession or direct control of the Company. The Company
has been administered, and the Company's corporate records have
been maintained, in all material respects at all times in
accordance with the Companies Act.
3.3 CAPITALISATION.
3.3.1 The authorised share capital of the Company as at the date of
this Agreement consists of 100 ordinary shares of L1 each of
which one ordinary share is currently issued. No other shares are
issued. All issued shares of the Company have been duly
authorised and validly issued, are
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fully paid and have been issued in accordance with the
Companies Act and the Company's Organisational
Documents.
3.3.2 Except as Disclosed there is no:
(a) outstanding subscription, option, call, warrant or right
(whether or not currently exercisable) to acquire any
shares or other securities of the Company;
(b) outstanding security, instrument or obligation that is
or may become convertible into or exchangeable for any
shares or other securities of the Company; or
(c) to the knowledge of the Seller, condition or
circumstance that may directly or indirectly give rise
to or provide a basis for a claim by any Person to the
effect that such Person is entitled to acquire or
receive any shares or other securities of the Company.
3.4 AUTHORITY; BINDING NATURE OF AGREEMENTS
3.4.1 Each of the Seller and the Company has the absolute and
unrestricted right, power and authority to enter into and to
perform its obligations under this Agreement and the other
Transactional Agreements to which it is to be a party, and the
execution, delivery and performance by the Seller and the
Company of this Agreement and such Transactional Agreements
have been duly authorised by all necessary action on the part
of the Company, the Seller and the Company Board and
shareholders of the Company, to the extent required.
3.4.2 This Agreement and the other Transactional Agreements
constitute, or upon execution and delivery will constitute, the
legal, valid and binding obligations of each of the Company and
the Seller, enforceable against the Company and the Seller in
accordance with their respective terms.
3.5 NON-CONTRAVENTION; CONSENTS.
3.5.1 The execution and delivery of this Agreement and other
Transactional Agreements, and the performance of the Agreement
and the Transactional Agreements by the Company and the Seller
will not, directly or indirectly:
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(a) contravene, conflict with or result in a violation of
(i) any provisions of the Company's Memorandum of
Association or Articles of Association as at the date
hereof, or (ii) any resolution adopted by the Company
Board, or any committee thereof or the shareholders of
the Company passed prior to the date hereof;
(b) contravene, conflict with or result in a violation of
any Legal Requirement by which the Seller or the Company
is bound as at the date of this Agreement, or give any
Governmental Authority or other Person the right to
challenge any of the Transactions or to exercise any
remedy or obtain any relief under, any Legal Requirement
or any Order to which the Company or any assets owned or
used by it are subject;
(c) to the Seller's Knowledge, cause any assets owned or
used by the Company to be reassessed or revalued by any
Taxation Authority or other Governmental Authority;
(d) in any material way, contravene, conflict with or result
in a violation of any of the terms or requirements of,
or give any Governmental Authority the right to revoke,
withdraw, suspend, cancel, terminate or modify, any
Governmental Authorisation that is held by the Company
or any of its employees or that otherwise relates to the
Company or to any of the assets owned or used by the
Company;
(e) contravene, conflict with or result in a violation or
breach of, or default under, any material provision of
any Contract or Order by which the Company or the Seller
is subject or bound;
(f) give any Person the right to (i) declare a default or
exercise any remedy under any contract, agreement or
undertaking by which the Company is bound, (ii)
accelerate the maturity or performance of any Material
Company Contract, or (iii) cancel, terminate or modify
any Material Company Contract;
(g) give any Person the right to any payment by the Company
or give rise to any acceleration or change in the grant,
vesting or determination of options, warrants, rights,
severance payments or other contingent obligations of
any nature whatsoever of the
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Company in favour of any Person (other than those of the
nature referred to in (c) above), in any such case as a
result of the change in control of the Company or
otherwise resulting from the Transactions; or
(h) result in the imposition or creation of any Encumbrance
upon or with respect to any asset owned or used by the
Company, except any Encumbrances imposed due to any
actions on the part of the Purchaser or any Purchaser
Group Company whether before or after Completion.
3.5.2 Except as Disclosed or set out in this Agreement or the
Transactional Agreements, the Company will not be required to
make any filing with or give any notice to, or obtain any
Consent from, any Person in connection with the execution and
delivery of this Agreement and the other Transactional
Agreements or performance of any of the Transactions.
3.5.3 As of the Completion Date, all required filings, notices and
Consents in accordance with the Companies Act, requirements of
the Inland Revenue and HM Customs and Excise and the
Competition Xxx 0000 with respect to the Transactional
Documents have been duly made, given or obtained and are in
full force and effect other than those which by their nature
are required to be made, given or obtained after the
Completion.
3.6 [RESERVED]
3.7 INTELLECTUAL PROPERTY; PROPRIETARY RIGHTS AND INFORMATION.
3.7.1 Part 3.7 of the Disclosure Letter sets forth a description of
all the Company Intellectual Property which are material and
are specific to the Company's business.
(a) To the Seller's Knowledge, the operation of the business
of the Company as currently conducted including the use
of the Company Intellectual Property in connection
therewith, does not infringe, misappropriate or
otherwise violate the Intellectual Property Rights of
any third party, no claim is pending or, to the Seller's
knowledge, threatened against the Company alleging any
of the foregoing.
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(b) Save as Disclosed, the Company is either the exclusive
owner of the entire and unencumbered right, title and
interest in and to each item of the Company
Intellectual Property which is owned by it or, to the
extent that the Company Intellectual Property Rights
used in the Business are not owned by the Company, the
Company is licensed to use all such Intellectual
Property Rights that are necessary to the conduct of
the business of Company as is presently conducted.
Save as Disclosed, the Intellectual Property Rights
used or owned by the Company are free and clear of any
Encumbrances, claims, restrictions or obligation to pay
any royalties to any Person or Entity.
(c) Save as Disclosed, to the Seller's Knowledge, the
Company owns or is licensed to use all Intellectual
Property Rights used in or necessary to the conduct of
Company's business as it currently is conducted and
there are no other Intellectual Property Rights that
are material to the conduct of such business. To the
Seller's Knowledge, the licenses relating to
Intellectual Property Rights used by the Company in the
business as at the date hereof are subsisting, valid
and enforceable and have not been adjudged invalid or
unenforceable in whole or in part.
(d). Save as Disclosed, no legal proceedings have been
asserted, are pending or, to the Seller's Knowledge,
threatened against the Company (i) based upon or
challenging or seeking to deny or restrict the use by
the Company of any Intellectual Property Rights owned
or used by the Company, (ii) alleging that any services
provided by, processes used by, or products
manufactured or sold by the Company or the use of the
Company Intellectual property by the Company in the
present conduct of its business, infringe or
misappropriate any Intellectual Property Right of any
third party, or (iii) alleging that any of the licenses
Disclosed as held by the Company conflict with the
terms of any license or other agreement. To the
knowledge of the Seller, no basis for any such legal
proceedings exists.
(e) Save as Disclosed, to the Seller's Knowledge, no
Company Intellectual Property Right owned or used by
the Company is
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subject to any Order or Proceeding that restricts, or
that is reasonably expected to restrict in any manner,
the use, transfer or licensing of any Company
Intellectual Property Rights used or owned by the
Company or that may affect the validity, use or
enforceability of any such Company Intellectual Property
Rights, nor does any current or former shareholder,
employee, officer, director or consultant of the Company
have any rights in or to the Company Intellectual
Property.
(f) Save as Disclosed, to the Seller's Knowledge, (i) no
Person is engaging in any activity that infringes or
misappropriates the Intellectual Property Rights owned
by the Company, (ii) the completion and performance of
this Agreement and the Transaction Agreements will not
result in the termination or impairment of any right for
the Company to use the Company Intellectual Property
Rights currently used in the Business.
(g) Save as Disclosed, the Company has not transferred or
licensed any Intellectual Property Rights to any third
party, other than in the Ordinary Course of Business.
(h) The Disclosure Letter lists all Registered Intellectual
Property and lists any proceedings or actions pending,
or to Seller's Knowledge, threatened as of the date
hereof before any court, tribunal or patent office or
authority, anywhere in the world, related to any of the
Registered Intellectual Property. Each item of
Registered Intellectual Property is valid and
subsisting, and all necessary registration, maintenance,
and renewal fees, annuity fees and taxes in connection
with such Registered Intellectual Property have been
paid and all necessary documents and certificates in
connection with such Registered Intellectual Property
have been filed with the relevant patent, copyright,
trademark or other authorities for the purpose of
maintaining such Registered Intellectual Property.
(i) The Disclosure Letter lists all actions that would have
been taken by Company were it not for the change of
control within 90 days from the date hereof in respect
of Registered Intellectual Property if Completion of the
transactions set out in this Agreement had not taken
place, including the payment of any
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registration, maintenance, or renewal fees for the
purposes of maintaining or renewing any Registered
Intellectual Property.
(j) Save as Disclosed, in each case in which the Company has
acquired ownership of any Intellectual Property Rights
from any Person the Company has obtained a valid and
enforceable assignment sufficient to irrevocably
transfer all rights in such Intellectual Property Rights
and where applicable the Company has recorded each such
assignment of Registered Intellectual Property with the
relevant Governmental Authority (including applicable
patent offices).
(k) Save as Disclosed, any inventions, trade secrets,
proprietary information or other Intellectual Property
Rights created by any of the Company's employees or
arising during their employment are owned by the
Company.
(l) Any inventions, trade secrets, proprietary information
or other Intellectual Property created or obtained by
any of the Company's employees in the course of their
employment or by the founders prior to their employment
by the Company, which are necessary in the Company's
business, have been assigned to the Company.
(m) To the Seller's Knowledge, no employee, contractor or
consultant of the Company is subject to any agreement
(including licences, covenants or commitments of any
nature) or subject to any order judgement, decree of any
court or of an administrative agency, or any Legal
Requirement or restriction that would interfere with the
use of his or her best efforts to carry out his or her
duties for the Company, or promote the best interests of
the Company, or that would conflict with the Company's
business as currently conducted.
(n) Neither the execution nor delivery of this Agreement,
will result in a breach of the terms, conditions or
provisions of, constitute a default under, or trigger a
condition precedent to any rights under any Company
Contract, including any contract or agreement with
employees, contractors or consultants of the Company.
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(o) Save as Disclosed, the Company has taken what it
reasonably believes to be all reasonable steps to protect
its rights in confidential information and trade secrets
and to protect information provided by any other Person to
the Company under a duty of confidentiality consistent
with industry practice.
(p) Except as Disclosed, to the Seller's Knowledge at no
time during the conception of or reduction to practice
of any of the Intellectual Property Rights was any
developer, inventor or other contributor to such
Intellectual Property Rights operating under any grants
from any governmental entity or agency, performing
research sponsored by any governmental entity or agency
or private source, other than the Company. To the
Seller's Knowledge at no time during the conception of
or reduction to practice of any of the Intellectual
Property Rights, no such developer, inventor or other
contributor was operating or subject to any employment
agreement with a third party, any invention assignment
in favour of a third party, any non disclosure
agreement in favour of a third party or other
obligation that is likely to adversely affect the
rights of the Company in such Intellectual Property
Rights.
(q) To the knowledge of the Seller and save as Disclosed, all
software purchased or licensed by the Company from a third
party is fit for the purpose for which it was so purchased
or licensed.
(r) To the knowledge of the Seller, as at the date of this
Agreement, all significant bugs or defects reported by
clients of the Company are recorded in the helpdesk system
used for the purpose of recording such bugs and defects
and are set out in the Disclosure Letter.
(s) To the knowledge of the Seller, as at the date of this
Agreement and save as disclosed there are no significant
bugs or defects recorded for any software sold and
licensed by the Company to a third party which makes such
software unsuitable for the purposes for which it is sold
and licensed.
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(t) Save as Disclosed, the Company is not required to pay any
royalties, license fees or other payments for the use of
any Intellectual Property Right, except payments for use
of boxed-packaged/off-the-shelf software licensed by the
Company.
3.8 PROCEEDINGS; ORDERS.
3.8.1 Save as Disclosed, there is no pending Proceeding against the
Company, and, to the Seller's Knowledge, no Person has threatened
to commence any Proceeding:
(a) that involves the Company or its assets; or
(b) that challenges, or that may have the effect of
preventing, delaying, making illegal or otherwise
interfering with, any of the Transactions or the ability
of the Company and/or the Seller to comply with or perform
its obligations and covenants under the Transactional
Agreements;
and to the Seller's Knowledge no event has occurred, and no
claim, dispute or other condition or circumstance exists, that
might directly or indirectly give rise to or serve as a basis for
the commencement of any such Proceeding.
3.8.2 No Proceedings involving or relating to the Company are current
(other than actions by the Company for the recovery of sums owing
to it in the Ordinary Course of Business).
3.8.3 Save as Disclosed, there is no Order to which the Company, or any
of the assets owned or used by the Company, is subject.
3.8.4 No director or secretary of the Company or, to the Seller's
Knowledge, employee of the Company is subject to any Order that
prohibits such director, secretary or employee from engaging in
or continuing any conduct, activity or practice relating to the
Company's business.
3.8.5 To the Seller's Knowledge, there is no proposed Order that, if
issued or otherwise put into effect, (i) is reasonably likely to
have a material adverse effect on the Company's business,
condition, assets, liabilities, operations, financial
performance, net income or prospects (or on any aspect or
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portion thereof) or on the ability of the Company to comply with
or perform any covenant or obligation under this Agreement and the
other Transactional Agreements, or (ii) may have the effect of
preventing, delaying, making illegal or otherwise interfering with
any of the Transactions.
3.9 FINANCIAL STATEMENTS.
The Financial Statements are true and accurate in all material respects,
and present fairly the financial position of the Company as of the dates
thereof and have been prepared in accordance with the Companies Act and
GAAP, consistently applied. Except as set forth in the Financial
Statements and in the Disclosure Letter, there are no material fixed or
contingent liabilities, asserted or unasserted (and, to the Seller's
Knowledge, there is no basis for any present or future action, suit,
proceeding, investigation, charge, claim, or demand giving rise to any
such liability), including without limitation such liabilities arising
out of any injury to individuals or property as a result of the
ownership, possession or use of any product manufactured, sold, leased
or delivered by the Company with respect to any claim for the breach of
any express or implied product warranty on any other similar claim with
respect to any of such products.
3.10 TITLE TO ASSETS.
3.10.1 The Company owns, and has good, valid and marketable title to,
all assets material to the business of the Company purported to
be owned by it, free and clear of any Encumbrances.
3.10.2 The Disclosure Letter annexes a list of all equipment,
furniture, fixtures, improvements and other tangible assets
with a current value equal to or greater than One Thousand
Pounds (L1,000) owned by the Company (the "ASSET LIST").
3.10.3 Save as Disclosed, each asset identified in the Asset List:
(a) is free of material defects and deficiencies and in good
condition and repair, consistent with its age and intended
use (ordinary wear and tear excepted);
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(b) complies in all respects and is being operated and
otherwise used in full compliance with all applicable Legal
Requirements; and
(c) is in the Seller's reasonable opinion adequate for the uses
to which it is being put.
In the Seller's reasonable opinion the assets identified in the
Assets List are adequate for the conduct of the Company's business
in the manner in which such business is currently being conducted.
3.10.4 The Company does not own any real property or any interest in
real property, except for the leaseholds interests detailed in
the Disclosure Letter (the "Leased Premises").
3.10.5 The Disclosure Letter identifies all assets with a current
value equal to or greater than Ten Thousand Pounds (L10,000)
that are leased or licensed to the Company.
3.10.6 All leases pursuant to which the Company leases real or
personal property are valid and effective in accordance with
their respective terms, and to the knowledge of the Seller
there exists no default thereunder or occurrence or condition
that could result in a default thereunder or termination
thereof.
3.10.7 The Company's buildings, equipment and other tangible assets
are in good operating condition and are useable in the Ordinary
Course of Business, and the Company owns, or has valid
leasehold interests in, all assets necessary for the conduct of
its business as presently conducted.
3.11 CONTRACTS.
3.11.1 The Disclosure Letter contains a complete and accurate list of
all the following Contracts which are in effect to which the
Company is a party and under which such Company has any
material obligations or liabilities continuing as of the date
hereof:
(a) loan agreements, security agreements and other written
arrangements relating to the borrowing of money or for
lines of credit;
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(b) agreements and other arrangements with customers providing
for the installation, configuration and maintenance of any
computer software products licensed to third parties with
a value of over L20,000 per annum or which are not on
standard terms and conditions ("Licensing Agreements");
(c) agreements and other servicing or maintenance of any
computer software products licensed to a third party
pursuant to a Licensing Agreement following the
expiration of the standard warranty period (it being
agreed that a Contract shall be deemed to be a
Licensing Agreement hereunder only if a Company has any
continuing obligations thereunder to deliver, install,
configure or maintain during standard warranty periods
any computer software products licensed to third
parties) with a value of over L20,000 per annum or
which are not at standard terms and conditions;
(d) agreements and other arrangements for the sale of any
assets or properties for a sale price in excess of L50,000
in any one case or for the grant of any options or
guarantees or similar written arrangements pursuant to
which the Company guarantees the obligations of any third
party;
(e) contracts or commitments restricting the Company from
engaging in or competing in any line of business or
with any other Person;
(f) partnership agreement or joint venture agreements;
(g) lease agreements in respect of the Leased Premises;
(h) research and development agreements;
(i) distribution agreements;
(j) agreements with Governmental Authorities;
(k) agency agreements;
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(l) profit sharing agreements, cost sharing agreement,
loss sharing agreement or similar contract;
(m) consultancy agreements;
(n) any agreement with a third party or the Seller
pursuant to which the Company is obliged to pay
royalties or any other payment for the use of
Intellectual Property Right, other than agreements
for boxed packaged/off-the-shelf software purchased
by or licensed to the Company; and
(o) any other contract or agreement material to the
businesses of the Company (taken as a whole) made
other than in the Ordinary Course of Business
pursuant to which annual payments in excess of
L50,000 may reasonably be expected to be made by or
to the Company including the agreement to acquire CSD
from with Pride A/S;
(the foregoing Contracts being referred to collectively as the
"Material Company Contracts" and individually as a "Material
Company Contract").
3.11.2 Save as Disclosed, none of the Material Company Contracts by
its terms entitles the counter-party to terminate, or to modify
or accelerate any obligations or rights under such Material
Company Contract solely by reason of a change of control, the
Company has not received or given written notice that the
Company or any other party to the relevant contract is in
material default under any Material Company Contract, which
default remains unremedied as at the date hereof.
3.11.3 Save as Disclosed, the Company has or has caused to be
delivered to Purchaser with the Disclosure Letter accurate and
complete copies of all Material Company Contracts identified
including all amendments thereto.
3.11.4 Each Material Company Contract is valid and in full force and
effect, and to the knowledge of the Seller, is enforceable by
the Company in accordance with its terms.
3.11.5 The Company is not in default under any Material Company
Contract, and
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(a) to the Seller's Knowledge, no Person has violated or
breached, or declared or committed any default under
any Material Company Contract;
(b) to the Seller's Knowledge, no event has occurred, and
no circumstance or condition exists, that might (with
or without notice or lapse of time):
(i) result in a violation or breach of any of
the provisions of any Material Company
Contract,
(ii) give any Person the right to declare a
default or exercise any remedy under any
Material Company Contract, or
(iii) give any Person the right to accelerate the
maturity or performance of any Material
Company Contract or to cancel, terminate or
modify any Material Company Contract; and
(iv) the Company has not waived any of its rights
under any Material Company Contract. 3.11.6
To the Seller's Knowledge, each Person
against which the Company has or may acquire
any rights under any Material Company
Contract is (i) able to pay its debts as
they fall due and (ii) able to satisfy all
such Person's obligations and liabilities to
the Company.
3.11.7 To the Seller's Knowledge, the performance of the Material
Company Contracts will not result in any violation of or
failure to comply with any Legal Requirement.
3.11.8 Save as Disclosed, no Person is renegotiating, or has the right
to renegotiate, any amount paid or payable to the Company under
any Material Company Contract or any other term or provision of
any Material Company Contract.
3.11.9 Save as Disclosed, no party to any Material Company Contract
has notified the Company, or made a claim to the effect that
the Company has failed to perform an obligation thereunder. To
the Seller's Knowledge,
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there is no plan, intention or indication of any contracting
party to any Material Company Contract to cause the
termination, cancellation or modification of such Material
Company Contract or to reduce or otherwise change its activity
thereunder so as to materially adversely affect the benefits
derived or expected to be derived therefrom by the Company.
3.11.10 The Disclosure Letter contains details of each and every loan,
line of credit or similar indebtedness that has been incurred
by the Company and which is now outstanding (other than credit
owing in the normal course of trading).
3.11.11 The repurchase of shares in the Company from Xxxxx Xxxx Xxxxx
was in all respects in accordance with the relevant provisions
of the Companies Act and any stamp duty in respect thereof was
duly paid.
3.12 EMPLOYEES; EMPLOYEE BENEFITS.
3.12.1 Annexed to the Disclosure Letter there is a list of all
employees of the Company, their respective length of service,
age, job titles and yearly salaries, accumulated benefits
unpaid but which are due for payment by the Company and annual
benefit package not paid out in cash annually, if any, and any
written contracts, agreements or commitments they may have with
the Company.
3.12.2 Annexed to the Disclosure Letter is a list of individuals who
are currently performing services for the Company and are
classified as "consultants" or "independent contractors," and
the respective compensation of each such "consultant" or
"independent contractor". The Disclosure Letter also provides a
brief description of said "consultant's" or "independent
contractor's" current assignment. The Seller warrants that the
contracts with the consultant and/or independent contractor are
in compliance with UK law and that the consultants and/or
independent contractors are not employees of the Company.
3.12.3 Save as Disclosed, the Company does not have and has not in the
past had in effect any bonus, profit sharing, Employee Benefit
Plan, deferred compensation or similar plan or agreement for
the benefit of any of its past or present employees or officers
(or the dependents of any such employee or officer) and the
Company has fully complied with all its obligations,
responsibilities and undertakings towards, and has fully
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funded all payments required to be made with respect to, all
such plans and arrangements.
3.12.4 Save as Disclosed, the Company has no collective bargaining
agreements, union Contracts or similar Contracts with any of
its employees. There is no labour union organising activity
pending or, to the Seller's knowledge, threatened with respect
to the Company.
3.12.5 The Disclosure Letter sets out the termination notice period
for each employee of the Company.
3.12.6 To the Seller's Knowledge, no employee of the Company, nor any
consultant with whom the Company has contracted, is in material
violation of any term of any employment contract, consultancy
agreement or any other agreement relating to the right of any
such individual to be employed by, or to contract with, the
Company because of the nature of the business to be conducted
by the Company, and to the Seller's Knowledge, if Completion
did not occur the continued employment by the Company of their
present employees, and the performance of the Company's
contracts with their independent contractors, will not result
in any such violation. The Company has not received any notice
(written or otherwise) alleging that any such violation has
occurred.
3.12.7 Save as Disclosed, no employee or former employee of the
Company has been granted the right to continued employment by
the Company or to any material compensation following
termination of employment with the Company.
3.12.8 To the Seller's Knowledge, no officer or key employee, or any
group of employees, has tendered notice of their resignation or
intends to terminate his or their employment with the Company
and to the Seller's Knowledge no employee of the Company has
received an offer to join a business that is or likely would be
competitive with the Company's business.
3.12.9 The Company has no present intention to terminate the
employment of any officer, key employee or group of employees.
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3.12.10 The Seller is not aware of any outstanding claim by any
employee or former employee and there are no present
circumstances likely to give rise to any dispute.
3.12.11 There is set out in or annexed to the Disclosure Letter a
statement of the basis (including the rate and amount of
contributions) on which the Company is liable to contribute to
any Personal Pension Scheme (a "DISCLOSED PERSONAL PENSION
SCHEME") for any past or present officer or employee, or for
the dependent of any such person.
3.12.12 No agreements have been made, or undertakings or assurances
given by or on behalf of the Company to any member of any
Disclosed Personal Pension Scheme as to any particular level or
amount of benefits to be provided for in respect of him under a
Disclosed Personal Pension Scheme.
3.12.13 All amounts due from the Company to a Disclosed Personal
Pension Scheme have been paid.
3.12.14 The Pension Scheme is approved as an exempt approved scheme for
the purposes of Chapter I Part XIV Income and Corporation Taxes
Act 1988 and as far as the Seller is aware nothing has been
done or omitted to be done which will or may result in the
Pension Scheme ceasing to be exempt approval.
3.12.15 The only persons entitled to benefit under the Pension Scheme
are the Seller and Mr David Xxxx Xxxxx (the managing trustees
of the Pension Scheme) and any persons who may be contingently
entitled to benefit under the Pension Scheme on the death of
the Seller or the death of the said Xxxxx Xxxx Xxxxx as the
case may be.
3.12.16 There are no amounts due to the Pension Scheme from the
Company, or any of its employees whether currently,
prospectively, or contingently.
3.12.17 The full provisions of the Pension Scheme are set out in the
definitive trust deed and rules dated 23 May 1996 a copy of
which is Disclosed.
3.12.18 All of the pension benefits under the Pension Scheme are money
purchase benefits as defined in section 181 of the Xxxxxxx
Xxxxxxx Xxx 0000.
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3.12.19 With regard to the Pension Scheme and each Disclosed Personal
Pension Scheme the Company has complied with all its
obligations under Article 141 of the Treaty of Rome.
3.12.20 The investments of the Pension Scheme do not include any
employer related investments (as defined in section 40 of the
Pensions Act 1995).
3.13 MAJOR SUPPLIERS
The Disclosure Letter provides:
3.13.1 an accurate and complete breakdown and ageing of the Company's
existing debts payable as at the Completion Accounts Date in
excess of L20,000 for each account payable;
3.13.2 an accurate and complete breakdown of all customer deposits and
other deposits held by the Company accompanied by a brief
description of the companies liability vis a vis each deposit
as of the Completion Date; and
3.13.3 an accurate and complete breakdown of the Company's long-term
borrowings as of the Completion Date.
3.14 COMPLIANCE WITH LEGAL REQUIREMENTS.
3.14.1 Save as Disclosed the Company is in full material compliance
with each Legal Requirement that is applicable to it or to the
conduct of its business or the ownership or use of any of their
assets.
3.14.2 Save as Disclosed, no event has occurred, and to the Seller's
Knowledge, no condition or circumstance exists, that might
(with or without notice or lapse of time) constitute or result
directly or indirectly in a violation by the Company of, or
failure on the part of the Company to materially comply with,
any Legal Requirement.
3.14.3 To the Seller's Knowledge the Company has not received, at any
time, any notice or other communication (in writing or
otherwise) from any Governmental Authority or any other Person
regarding (aa) any possible or potential violation of, or
failure to comply with, any Legal Requirement by the Company,
or (bb) any actual, or potential obligation on the part of
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the Company to undertake, or to bear all or any portion of the
cost of, any cleanup or any remedial, corrective or response
action of any nature.
3.15 GOVERNMENTAL AUTHORISATIONS; GOVERNMENTAL GRANTS
3.15.1 The Disclosure Letter contains a list and summary of:
(a) each Governmental Authorisation held by the Company
and, save as Disclosed, such Governmental
Authorisations are all that are required to operate the
business, and
(b) the Company has delivered to Purchaser accurate and
complete copies of all such Governmental Authorisations
including all renewals thereof and all amendments
thereto.
3.15.2 Each Governmental Authorisation identified in the Disclosure
Letter is valid and in full force and effect.
3.15.3 To the Seller's Knowledge, the Governmental Authorisations
identified in the Disclosure Letter constitute all the
Governmental Authorisations necessary (i) to enable the Company
to conduct its business in the manner in which its business is
currently being conducted, and (ii) to permit the Company to
own and use its assets in the manner in which they are
currently owned and used.
3.15.4 The Company has not applied for or received or has any pending
or outstanding grants, tax benefits, incentives or subsidies
(collectively, "Grants") from any State of Israel Governmental
Authority, or from any other Governmental Authority.
3.16 TAX MATTERS.
3.16.1 Returns Filed and Taxes Paid. All Returns required to be filed
by the Company have been duly filed on a timely basis and such
Returns are in all material respects true, complete and
correct. All Taxes shown to be payable on the Returns or on
subsequent assessments with respect thereto have been paid in
full on a timely basis, and no other Taxes are payable by the
Company with respect to items or periods covered by such
Returns (whether or not shown on or reportable on such Returns)
or with respect to any period prior to the date of this
Agreement. The Company
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has withheld and paid over all Taxes required to have been
withheld and paid over, and complied with all information
reporting and withholding requirements, including maintenance
of required records with respect thereto, in connection with
amounts paid or owing to any employee, creditor, independent
contractor, or other third party. There are no liens on any of
the assets of the Company with respect to Taxes, other than
liens for Taxes not yet due and payable or for Taxes that the
Company is contesting in good faith through appropriate
proceedings and for which appropriate reserves have been
established and any such liens have been disclosed in the
Disclosure Letter. There are no requests for rulings or
determinations in respect of any Taxes pending between the
Company and any Taxation or Governmental Authority. The Company
is not currently the beneficiary of any extension of time
within which to file any Return.
3.16.2 Returns Furnished. Purchaser has been furnished by the Company
with true and complete copies of the accounts and Tax returns
of the Company for the last three years.
3.16.3 Tax Deficiencies; Audits; Statutes of Limitations. No audit by
a Taxation Authority or other Governmental Authority has
resulted in a material Tax charge on the Company and no
Taxation Authority has indicated that it intends to investigate
the Tax affairs of the Company. All information, notices,
computations and returns submitted to the Inland Revenue, HM
Customs & Excise and any other Taxation Authorities are true
and accurate and are not the subject of any material dispute
nor so far as the Seller is aware are likely to become the
subject of any material dispute with such authority.
3.16.4 Tax Sharing Agreements. The Company is not (nor has it ever
been) a party to any Tax sharing agreement, and Tax indemnity
agreement or any Tax Covenant and has not assumed the Tax
liability of any other person under contract.
3.16.5 The Company is not, and has not in the three years ending on
the date of this Agreement been, liable to pay a penalty,
surcharge, fine or interest in connection with Taxation or the
submission or failure to submit any returns.
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3.16.6 The Company is in possession of sufficient information or has
reasonable access to such information to enable it to compute
its liability to Taxation in so far as it depends on any Event
(as defined in the Tax Deed) occurring on or before the
Completion Date.
3.16.7 All Taxation liabilities of the Company (including contingent
and deferred liabilities) as at the Accounting Date are
provided for or reserved in the Financial Statements in
accordance with GAAP.
3.16.8 The Disclosure Letter sets out full particulars of any special
agreement or arrangement (other than generally available
concessions and published practices) currently in place between
the Company and any Taxation Authority as a result of which the
Company is permitted not to comply with its statutory
obligations.
3.16.9 All rents, interest, annual payments and other sums of an
income nature paid by the Company during or in respect of the
six years prior to the date of this Agreement or which the
Company is under an obligation to pay in the future were and
are wholly allowable as deductions or charges on income in
computing profits for the purposes of corporation tax.
3.16.10 No notice has been given to the Company or enquiry made nor are
there grounds for any such notice or enquiry to be made in
future nor has the Company been engaged in any transaction or
arrangement in respect of which there ought to have been or
ought to be substituted for the consideration given or received
by the Company a different consideration for Taxation purposes
pursuant in each case to Section 770, Section 770A or Schedule
28AA Taxes Act.
3.16.11 There are set out in the Disclosure Letter particulars of all
matters relating to Taxation in respect of which the Company
(either alone or jointly with any other person) has, or at the
Completion Date will have an outstanding entitlement in
relation to any accounting period commencing prior to the
Completion Date to make any appeal or further appeal against an
assessment to Taxation; and such particulars are sufficient to
enable the Purchaser to ensure that any time limit expiring
within one month of the Completion Date can be met.
3.16.12 The Company has at all times in its current accounting period
complied with Section 13A(2)Taxes Act.
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3.16.13 No distribution falling within Section 418 Taxes Act has been
made by the Company, and no loan or advance within Section 419
Taxes Act has ever been made by the Company.
3.16.14 The Company has not failed to treat as a distribution any
amount which ought to have been so treated for Taxation
purposes.
3.16.15 The Company has not at any time after 5 April 1965 made a
repayment of share capital to which Section 210 Taxes Act
(bonus issue following repayment of share capital) applies or
issued share capital as paid up other than by the receipt of
new consideration within the meaning of Part VI Taxes Act
(company distributions, tax credit etc.).
3.16.16 The Disclosure Letter sets out details of all the Company's
loan relationships within section 81 Finance Xxx 0000.
3.16.17 The Company has been resident for Tax purposes in the United
Kingdom and nowhere else at all time since its incorporation
and will be so resident at Completion.
3.16.18 The Company has never been a member of any group for any
Taxation purpose.
3.16.19 If each of the assets (other than trading stock) of the Company
was disposed of for a consideration equal to the book value of
that asset in, or adopted for the purpose of, the Financial
Statements, no liability to Taxation, not fully provided for in
the Financial Statements, would arise; and, for the purpose of
determining whether any such Taxation would arise there shall
be disregarded any relief or allowance available to the
Company, other than amounts falling to be deducted in
calculating the amount liable to Taxation.
3.16.20 The Company has not disposed of or acquired any asset in
circumstances such that Section 17 TCGA 1992 did or could apply
to determine the consideration deemed to be given on such
disposal or acquisition.
3.16.21 No balancing charge in respect of any capital allowances
claimed by or given to the Company would arise if any of the
assets of the Company or the plant and machinery taken as a
whole were to be realised for a
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consideration equal to the amount of their book value as shown
or included in the Financial Statements.
3.16.22 To the Seller's Knowledge, all necessary conditions for all
capital allowances (as defined in Section 832(1) Taxes Act)
claimed by the Company in relation to its assets were at all
material times satisfied.
3.16.23 All payroll Tax (including without limitation income tax under
the Pay As You Earn (PAYE) system in Sections 203 to 203L Taxes
Act and regulations made thereunder) and payments due in
respect of employees' social security contributions (including
without limitation National Insurance Contributions) have been
deducted in accordance with law from all payments made or
treated as made by the Company and have been duly paid by the
Company to the relevant Taxation Authority in the appropriate
manner, and the Company has complied with all its reporting
obligations in connection with all payment to and benefits
provided for employees and directors of the Company. The
Company has accounted to the relevant Taxation Authority, as
required by law, for all social security contributions payable
by an employer (including without limitation secondary Class 1
and Class 1A National Insurance contributions).
3.16.24 The Company is registered for the purposes of the law relating
to VAT.
3.16.25 The Company has complied in all respects with the law relating
to VAT and has made and maintained at the date hereof full
complete correct and up-to-date records invoices and other
documents appropriate or requisite for the purpose of such law
and has at all times punctually paid and made all payments and
returns required under the law relating to VAT.
3.16.26 The Company is not in arrears with any payment or return due
under the law relating to VAT and is not liable to any penalty,
interest or surcharge for late payment of VAT or non-compliance
with the law relating to VAT.
3.16.27 The Company has not been partially exempt for any VAT
accounting period at any time in the three years prior to
Completion and has not in that period been denied credit for
any input tax.
3.16.28 The Company has not elected to waive exemption under paragraph
2 Schedule 10 VATA 1994 in relation to any land except as
disclosed in the
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Disclosure Letter and any election so disclosed is valid, has
effect, was notified to Customs and has not been revoked.
3.16.29 All documents in the possession or under the control of the
Company to which it has been a party or which form part of the
title of the Company to any asset and which attract stamp duty
or stamp duty reserve tax have been properly stamped, no such
document is currently subject to adjudication of claims for
exemption or relief. The Company has no outstanding liability
to stamp duty reserve tax.
3.16.30 The Company has made no transfer of value within Section 94 or
99 IHTA 1984.
3.16.31 No person has or may as a result of any event occurring on or
before Completion have the power under Section 212 IHTA 1984 to
raise any capital transfer tax or inheritance tax by the sale
of or charge over any of the Company's assets.
3.16.32 There is no unsatisfied liability to capital transfer tax or
inheritance tax attached or attributable to the assets of the
Company or the shares in the Company, and neither the assets
nor the shares are subject to any Inland Revenue charge as is
mentioned in Section 237 IHTA 1984.
3.17 FINDERS AND BROKERS; FEES.
Neither the Company nor any person acting on behalf of the Company has
negotiated with any finder, broker, intermediary or any similar person in
connection with the Transactions contemplated herein.
3.18 ENVIRONMENTAL LIABILITIES
3.18.1 The Company is in material compliance with all applicable Laws
relating to the pollution or the protection of the environment
("Environmental Laws") except where failure to so comply could
not reasonably be expected to have a material adverse effect.
3.18.2 To the knowledge of Seller, the Company has not received any
written communication that alleges that the Company is not in
material compliance with all applicable Environmental Laws.
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3.18.3 The Company has all material Governmental Authorisations
required to be obtained by it pursuant to Environmental Laws
(the "Environmental Permits") for the conduct of its business
as presently conducted, and all such Environmental Permits are
in full force and effect, except where failure to obtain or
maintain any such Environmental Permit could not reasonably be
expected to have a material adverse effect.
3.18.4 There is no claim or Proceeding based on an alleged violation
of the Environmental Laws (an "Environmental Claim") pending
or, to the knowledge of Seller, threatened in writing against
or involving the Company or against any person or entity whose
liability for any Environmental Claim the Company has retained
or assumed either contractually or by operation of law which
could reasonably be expected to have a material adverse effect.
3.18.5 No work, repair or capital expenditure is planned nor, to the
knowledge of Seller, is any work, repair or capital expenditure
required in respect of the properties and assets (including
real property) of the Company pursuant to or to comply with any
Environmental Law, where the failure to undertake such work,
repair or capital expenditure could reasonably be expected to
result in an Environmental Claim having a material adverse
effect.
3.19 INSURANCE
3.19.1 The Disclosure Letter sets forth, with respect to each
insurance policy maintained by or at the expense of, or for the
direct or indirect benefit of, the Company:
(a) the name of the insurance carrier that issued such
policy and the policy number of such policy;
(b) whether such policy is a "claims made" or an
"occurrences" policy;
(c) a description of the coverage provided by such policy;
(d) the annual premium payable with respect to such
policy, and the cash value (if any) of such policy;
and
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(e) a description of any claims pending, and any claims
that have been asserted in the past, with respect to
such policy.
3.19.2 The Disclosure Letter also identifies each application for
insurance that has been submitted by or on behalf of the
Company that is currently pending.
3.19.3 Copies of all of the insurance policies Disclosed (including
all renewals thereof and endorsements thereto and all pending
applications for insurance) are annexed to the Disclosure
Letter. Such policies are in full force and effect as of the
date hereof.
3.19.4 Each of the policies identified in the Disclosure Letter is
valid, enforceable and in full force and effect, and has been
issued by an insurance carrier that, to the Seller's Knowledge,
is reputable. All of the information contained in the
applications submitted in connection with said policies was (at
the times said applications were submitted) accurate and
complete, and all premiums and other amounts owing with respect
to said policies have been paid in full on a timely basis.
3.19.5 Each of the policies Disclosed will continue in full force and
effect following the Completion and the Company has paid all
premiums due to be paid prior to the Completion Date, and has
otherwise performed all of its obligations, under each policy
to which it is a party or that provides coverage to it or any
of its directors or officers in connection with their
performance of services to the Company.
3.19.6 There is no pending claim under or based upon any of the
policies disclosed and to the knowledge of the Seller, no event
has occurred, and no condition or circumstance exists, that
might (with or without notice or lapse of time) directly or
indirectly give rise to or serve as a basis for any such claim.
3.19.7 Save as Disclosed, the Company has not received:
(i) any notice or other communication (in writing or to
which the Company or Seller otherwise has knowledge)
regarding the actual or possible cancellation or
invalidation of any of the policies identified the
Disclosure Letter or regarding any actual
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or possible adjustment in the amount of the premiums
payable with respect to any of said policies;
(ii) any notice or other communication (in writing or to
which the Seller otherwise has knowledge) regarding
any actual or possible refusal of coverage under, or
any actual or possible rejection of any claim under,
any of the policies identified in the Disclosure
Letter; or
(iii) any indication that the issuer of any of the policies
identified in the Disclosure Letter may be unwilling
or unable to perform any of its obligations
thereunder.
3.20 COMPANY RELATED PARTY TRANSACTIONS.
3.20.1 Except as Disclosed, no Company Related Party has, or has at
any time since January 1, 2000 had, any direct or indirect
interest of any nature in any asset used in or otherwise
relating to the business of the Company.
3.20.2 Except as Disclosed, no Company Related Party is, or has at any
time since January 1, 2000 been, indebted to the Company for an
amount, individually or in the aggregate, in excess of Ten
Thousand Pounds (L10,000) (all of which amounts have been paid
in full as of the date hereof).
3.20.3 Since January 1, 2000, no Company Related Party has entered
into, or has had any direct or indirect financial interest in,
any Contract, transaction or business dealing of any nature
involving the Company.
3.20.4 No Company Related Party is competing, or has at any time since
January 1, 2000 competed, directly or indirectly, with the
Company in any market served by the Company.
3.20.5 To the Seller's Knowledge, no Company Related Party has any
claim or right against the Company.
3.20.6 To the Seller's Knowledge, no event has occurred, and no
condition or circumstance exists, that might (with or without
notice or lapse of time) directly or indirectly give rise to or
serve as a basis for any claim or right in favour of any
Company Related Party against the Company.
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3.21 [RESERVED]
3.22 BANK ACCOUNTS.
The Disclosure Letter sets forth the following details which are accurate in all
material respects, with respect to each account maintained by or for the benefit
of the Company at any bank or other financial institution:
3.22.1 the name and location of the institution at which such account
is maintained;
3.22.2 the name in which such account is maintained and the account
number of such account;
3.22.3 a description of such account and the purpose for which such
account is used;
3.22.4 the current balance in such account as at close of business on
the Completion Accounts Date;
3.22.5 the rate of interest being earned on the funds in such account
as at close of business on the Completion Accounts Date; and
3.22.6 the names of all individuals authorised to draw on or make
withdrawals from such account.
3.23 FULL DISCLOSURE.
3.23.1 There is no fact within the knowledge of the Seller which may
prevent the Seller or the Company from complying with or
performing any covenant or obligation under this Agreement or
any of the other Transactional Agreements to which it is a
party, or which may have the effect of preventing, delaying,
making illegal or otherwise interfering with any of the
Transactions.
3.23.2 All the information set forth in the Disclosure Letter, and all
other information (including copies of documents) regarding or
relating to the Company and its condition, assets, liabilities,
operations, financial performance or net income that has been
furnished to Purchaser or any of its representatives by or on
behalf of the Company or any of
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its representatives, is accurate and complete in all material
respects.
3.24 [RESERVED]
3.25 SECURITIES ACT MATTERS
3.25.1 The Seller is acquiring the Paradigm Shares for its own
account, for investment purposes only, and not with a view to
the resale or distribution of any part thereof in violation of
any applicable securities law. The Seller understands that the
Paradigm Shares have not been registered under the U.S.
Securities Act of 1933, as amended (the "Securities Act"), or
under the securities laws of the various states of the United
States, by reason of an exemption from the registration
provisions thereunder. The Seller acknowledges that his
representations and warranties contained in this Section are
being relied upon by the Purchaser as a basis for the exemption
of the issuance of the Paradigm Shares hereunder from the
registration requirements of the Securities Act and any
applicable state securities laws. The Seller understands that
all certificates for the Paradigm Shares issued to the Seller
shall bear a legend in substantially the following form:
"THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED. THE SECURITIES MAY NOT BE OFFERED,
SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF WITHOUT SUCH
REGISTRATION OR THE DELIVERY TO THE ISSUER OF AN OPINION OF
COUNSEL, REASONABLY ACCEPTABLE TO THE ISSUER, OR OTHER EVIDENCE
REASONABLY ACCEPTABLE TO THE ISSUER, THAT SUCH DISPOSITION WILL
NOT REQUIRE REGISTRATION OF SUCH SECURITIES UNDER THE SECURITIES
ACT OF 1933, AS AMENDED."
3.25.2 In order to allow the Seller to sell the Paradigm Shares
commencing twelve months following the Date of Completion, the
Purchaser shall undertake to make publicly available and
available to the Seller pursuant to Rule 144 of the United
States Securities Act of 1933, such information as is necessary
to enable the Seller to make sales of the Paradigm Shares
pursuant to that Rule and the Purchaser shall comply with the
public information
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requirements of Rule 144. The Purchaser will also direct counsel
to the Purchaser to provide promptly an opinion, at the
Purchaser's expense, to the Purchaser's transfer agent to the
extent required to facilitate resale of the Paradigm Shares
pursuant to Rule 144.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
4.1 The Purchaser hereby makes the following representations and
warranties:
(a) DUE INCORPORATION OF PURCHASER. Purchaser is a corporation
incorporated, validly existing and in good standing under the laws of
the State of Israel and has not been dissolved.
(b) AUTHORISATION OF AGREEMENT. This Agreement has been duly authorised,
executed and delivered by the Purchaser.
(c) ENFORCEABILITY AGREEMENT. This Agreement constitutes a valid and
binding obligation of the Purchaser, enforceable against it in
accordance with its terms.
(d) VALIDITY OF TRANSACTIONS. Neither the execution and delivery of this
Agreement by the Purchaser, the consummation of the transactions
contemplated hereby nor the fulfilment by the Purchaser of the terms,
conditions and provisions hereof will contravene or violate or result in
the breach (with or without the giving notice or lapse of time, or both)
or acceleration of any obligations of the Purchaser under:
(i) any law applicable to the Purchaser,
(ii) any judgement, order, writ, injunction or decree of any court or
of any governmental official, agency or instrumentality which is
presently applicable to the Purchaser,
(iii) the memorandum or articles of association (or other
constitutional documents) of the Purchaser or any amendments
thereto or restatements thereof, or
(iv) the provisions of any agreement, arrangement or understanding to
which the Purchaser is a party or by which it is bound.
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ARTICLE 5
5. COVENANTS OF THE SELLER
5.1 DISCLOSURE OF TRANSACTION
No public announcement concerning the transactions contemplated in
this Agreement or any matter ancillary to it and no disclosure of the
terms of this Agreement shall be made by the Seller or the Purchaser
(and the Purchaser shall procure that neither the Company, its
agents, employees nor officers shall make such an announcement of
disclosure of such terms) unless such disclosure is approved in
advance, in the case of an announcement or disclosure by the Seller,
in writing by Purchaser and, in the case of an announcement or
disclosure by the Purchaser, the Company, its agents, employees or
officers, in writing by the Seller, provided that in the case of an
announcement required by law or other regulatory basis the relevant
party such written consent shall not be necessary but each of the
Purchaser and the Seller agrees in such circumstances to provide a
draft of the relevant announcement or disclosure to the other party
prior to its release and to the extent possible within the
legislatory or regulatory requirement to take account of the
legitimate concerns of the other party in the wording of such
announcement provided that such concerns are conveyed in writing to
the other party within forty-eight (48) hours of receipt of the
relevant announcement.
5.2 LOCK UP OF PARADIGM SHARES
During the twelve-month period commencing on the Completion Date, the
Seller shall not sell or otherwise dispose of, or enter into any
agreement to sell or dispose of, any of the Paradigm Shares without
the prior written authorisation of Paradigm.
ARTICLE 6
COMPLETION PROCEDURE
6.1 PROCEDURE
Completion of the sale and purchase of the Shares shall take place at
the offices of the Seller's solicitors on the signing of this
Agreement on the Completion Date upon satisfaction of all the
conditions set out in Article 6.1 (a) to (p) which have not been
waived by the Purchaser and subject thereto the Purchaser shall make
payment of
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the Purchase Price in accordance with Article 2. The conditions
referred to above are the delivery by the Seller (or by the Company)
to the Purchaser of:
(a) a duly executed transfer of the Shares in favour of the
Purchaser together with the relevant share certificate(s)
(or in the case of any lost share certificate an indemnity
satisfactory to the Purchaser in relation to it);
(b) the certificates of incorporation, statutory books
(including minute books), common seal and all books of
account and other records of the Company complete and
(where appropriate) written up to date;
(c) certified documentation evidencing that the Property has
been sold by the Company and that the Company has actually
received the purchase price therefor in the amount of
L1,125,000;
(d) the Tax Deed of Covenant duly executed by the Seller;
(e) certificates from the Company's bankers certifying the
current and deposit account balances of the Company at the
close of business on the Completion Accounts Date;
(f) appropriate forms to amend the mandates given by the
Company to its bankers;
(g) written confirmation in the Agreed Form from the Seller
that there are no subsisting guarantees given by the
Company in his favour and that the Seller will not be
indebted to the Company or vice versa other than in
respect of the Seller's Loan and any sums owed by the
Company to Bureausite in respect of the Lease of the
Property;
(h) original certificates of all registered trademarks,
patents and designs and the originals of all licences
obtained by or issued to the Company or any other person
in connection with the business carried on by it;
(i) a Non-Competition Agreement between the Company and the
Seller in the form annexed hereto as Exhibit "A";
(j) the Service Agreement between Paradigm and the Seller, in
the form annexed hereto as Exhibit "B";
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(k) a lease of premises comprising the first and second floors
at the Property between the Company and the Seller in the
form annexed hereto as Exhibit "C";
(l) copies of any shareholders' resolutions necessary to
approve the Transaction or any matters relating thereto
and third party consents required to the transaction (if
any);
(m) a copy of a compromise agreement with Xxxxx Xxxx Xxxxx and
an executed consultancy agreement between the Company and
Mountwest Limited;
(n) proof that the Halmar Investment by the Company has been
transferred out of the Company with no actual or potential
liability to the Company, together with a translation
thereof; and
(o) Deed of Undertaking in relation to the Property in the
form annexed hereto in Exhibit D; and
(p) a promissory note in respect of Seller's Loan.
6.2 The Seller will procure that a duly convened board meeting is held at
which the share transfer referred to at Article 6.1(a) is approved
for registration (subject to stamping).
6.3 The Completion shall take place at the offices of Seller's Solicitors
or at such other place as may be agreed upon by the Purchaser and the
Company.
6.4 The parties agree that following Completion the sum of L191,383 owed
by the Seller (the "SELLER'S Loan") to the Company shall remain
outstanding and shall not be repayable by the Seller until all the
amount owed by the Purchaser to the Seller under the Loan Notes has
been repaid. For the avoidance of doubt, no interest shall be payable
at any time on the Seller's Loan except as provided in the Promissory
Note. The Purchaser agrees that the Seller's Loan will not be
assigned to any person without the Seller's consent, which will not
be unreasonably withheld.
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ARTICLE 7
SURVIVAL
7.
7.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES.
The Warranties of the Seller and the Purchaser contained in this
Agreement shall survive the Completion for the benefit of the
Purchaser subject always to the provisions of Article 9 (Limitation
on Seller's Liability) until:
(a) in the case of the Warranties set out in Article 3.16 for
a period of 6 years from the end of the last accounting
period commencing prior to Completion; and
(b) in the case of all other Warranties until eighteen (18)
months following the Completion Date, unless a bona fide
notice of claim shall have been given in writing before
the expiration of that period, in which case the Warranty
to which such notice applies shall survive in respect of
that claim until the final determination or settlement of
that claim.
7.2 SELLER AND PURCHASER PROTECTION
The provisions of Article 9 shall apply in respect of claims made in
respect of the Representations and Warranties set out in this
Agreement against the Seller and, where applicable, to the Purchaser.
7.3 SURVIVAL OF PURCHASER'S REPRESENTATIONS AND WARRANTIES
The representations and warranties of the Purchaser contained in this
Agreement or any document or certificate given pursuant to this
Agreement shall survive the Completion for the benefit of the Company
for eighteen (18) months following the Completion Date, unless a bona
fide notice of a claim shall have been given in writing before the
expiration of that period, in which case the representation and
warranty to which such notice applies shall survive in respect of
that claim until the final determination or settlement of that claim.
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7.4 SURVIVAL OF COVENANTS
Except as otherwise provided in this Agreement, all covenants of the
Seller and the Purchaser, as the case may be, contained in this
Agreement shall survive the Completion for the benefit of the
Purchaser or the Seller, as the case may be, indefinitely.
7.5 ACCESS FOR THE SELLER TO THE COMPANY'S INFORMATION
The Purchaser agrees to give the Seller and his professional advisers
reasonable access to the Company's documents, records and Xxxxxx
Xxxx, Xxxx Xxx and Xxxxxx Xxxxx in the presence of a representative
of the Purchaser in accordance with clause 5.3 of the Escrow
Agreement and in respect of any matter in respect of which the
Purchaser is making any claim for indemnification or otherwise
against the Seller under this Agreement or the Tax Deed of Covenant.
ARTICLE 8
INDEMNIFICATION
8.1 The Seller covenants and agrees to indemnify and keep indemnified and
hold the Purchaser harmless, from and against any claims, demands,
actions, cause of action, damage, losses, costs, liabilities or
expenses (including reasonable legal and other professional fees
reasonably incurred) which may be made or brought against the
Purchaser or the Company or which the Purchaser or the Company may
suffer or incur, in respect of, or arising out of:
(a) the purchase by the Company of shares in the capital of
the Company from Xxxxx Xxxx Xxxxx on 3 May 2000;
(b) any liability of the Company incurred as a result of the
termination of employment and/or directorship of the
Seller; or
(c) any liability, claim, cost or expense relating to the
Pension Scheme;
and any such indemnity shall be made on an after Tax basis which
means that the amount of such payment shall be increased by such
amount as will ensure that after deduction of any Tax which is
payable by the recipient (or would be payable but for the
availability of loss relief or capital allowances or any other form
of relief) on or in respect of or by reference to such increased
amount at the highest marginal
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rate of Tax payable by the recipient there shall be left in the hands
of the recipient a sum equal to the amount that would have been
payable had such payment not been subject to Tax in the hands of the
recipient. Any payment made by the Seller to the Purchaser under this
clause 8.1 shall operate to reduce the purchase price paid by the
Purchaser to the Seller for the Shares. This Clause 8.1 shall only
apply if the Inland Revenue withdraw or do not apply Extra Statutory
Concession D22.
8.2 The Seller will not be liable to any other party for indirect or
consequential damages.
8.3 PROCEDURE FOR INDEMNIFICATION
8.3.1 Claims Other Than Third Party Claims. Following receipt from the
Purchaser of a written notice of a claim for indemnification, the
Seller shall have 30 days to make such investigation of the claim as
the Seller considers necessary or desirable. For the purpose of such
investigation, the Purchaser shall make available to the Seller the
information relied upon by the Purchaser to substantiate the claim.
If the Seller and the Purchaser agree at or prior to the expiration
of such 30 day period (or any mutually agreed upon extension thereof)
to the validity and amount of the claim, the Seller shall immediately
pay to the Purchaser the full agreed upon amount of the claim. In the
absence of agreement, the claim shall be in dispute and may be
pursued by either party by such means as it shall think including
instituting proceedings against the other in respect thereof.
8.3.2 Third Party Claims. The Purchaser shall notify the Seller in writing
as soon as is reasonably practicable after being informed in writing
that facts exist which may result in a claim originating from a
Person other than the Purchaser (a "Third Party Claim") and in
respect of which a right of indemnification given pursuant to this
Article 8 may apply. The Seller shall have the right to elect
(subject to the other provisions of this clause), by written notice
delivered to the Purchaser within 10 days of receipt by the Seller of
the notice from the Purchaser in respect of the Third Party Claim, at
the sole expense of the Seller, to participate in or assume control
of the negotiation, settlement or defence of the Third Party Claim,
provided that:
(a) such will be done at all times in a diligent and bona fide
matter;
(b) the Seller acknowledges in writing its obligation to
indemnify the Purchaser in accordance with the terms
contained in this Agreement in respect of that Third Party
Claim; and
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(c) the Seller shall pay all reasonable third party expenses
reasonably incurred by the Indemnified Party as a result
of such participation or assumption.
If the Seller elects to assume such control, the Purchaser shall
co-operate with the Seller and its counsel and shall have the right
to participate in the negotiation, settlement or defence of such
Third Party Claim at its own expense. If the Seller does not so elect
or, having elected to assume such control, thereafter fails to
proceed with the settlement or defence of any such Third Party Claim,
the Purchaser shall be entitled to assume such control. In such case,
the Seller shall co-operate where necessary with the Purchaser and
its counsel in connection with such Third Party Claim and the Seller
shall be bound by the results obtained the Purchaser with respect to
such Third Party Claim.
If a Third Party Claim is made in connection with the purchase by the
Company of its own shares referred to in clause 8.1(a) (a "Xxxxx
Third Party Claim") then the Seller shall, without prejudice to
requirements of 8.3.2(a), (b) (c) above, be deemed to have elected to
assume control of the negotiation, settlement or defence of the Xxxxx
Third Party Claim unless the Seller has notified the Purchaser within
10 days of receipt by the Seller of the notice from the Purchaser in
respect of the Xxxxx Third Party Claim that he does not wish to
assume control of the negotiation, settlement or defence of the Xxxxx
Third Party Claim.
8.4 ADDITIONAL RULES AND PROCEDURES
The obligation of the Seller to indemnify the Purchaser pursuant to
this Article 8 shall also be subject to the following:
8.4.1 the Purchaser shall only be entitled to make a claim for
indemnification pursuant to Article 8.1(b), if written
notice containing reasonable particulars of such claim is
delivered to the Seller within thirty (30) months from the
Completion Date;
8.4.2 with respect to claims relating to amounts owing to
Purchaser (other than a claim relating to the Pension
Scheme under Article 8.1(c), no claim for indemnification
may be made by the Purchaser until the aggregate value of
all such claims exceed L30,000. Notwithstanding the
foregoing, this L30,000 constitutes a deductible and the
Seller shall be liable to indemnify the Purchaser only for
those amounts claimed in excess of L30,000;
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8.4.3 with respect to claims relating to amounts owing to the
Purchaser in respect of the Pension Scheme in accordance
with Article 8.1(c), no claim for indemnification may be
made by the Purchaser until the aggregate value of all
such claims exceeds L5,000. Notwithstanding the foregoing,
this L5,000 constitutes a deductible and the Seller shall
be liable to indemnify the Purchaser only for those
amounts claimed in excess of L5,000;
8.4.4 in the absence of fraud or fraudulent misrepresentation or
dishonesty on the party of the Seller, in no event may the
aggregate amount of all claims for indemnification and/or
under the Warranties and/or the Tax Deed by the Purchaser
exceed the Purchase Price;
8.4.5 if any Third Party Claim is of a nature such that the
Purchaser is required by applicable law to make a payment
to any Person (a "Third Party") with respect to such Third
Party Claim before the completion of settlement
negotiations or related legal proceedings, the Purchaser
may make such payment and the Seller shall, forthwith
after demand by the Purchaser, reimburse the Purchaser for
any such payment. If the amount of any liability under the
Third Party Claim in respect of which such a payment was
made, as finally determined, is less than the amount which
was paid by the Seller to the Purchaser, the Purchaser
shall, forthwith after receipt of the difference from the
Third Party, pay such difference to the Seller;
8.4.6 except in the circumstances contemplated by Section 8.4.5
above, and whether or not the Seller assumes control of
the negotiation, settlement or defence of any Third Party
Claim, the Purchaser shall not settle or compromise any
Third Party Claim except with the prior written consent of
the Seller (which consent shall not be unreasonably
withheld). A failure by the Seller to respond in writing
to a written request by the Purchaser for consent for a
period of five Business Days or more, shall be deemed a
consent by the Seller to such request;
8.4.7 the Purchaser and the Seller shall provide each other on
an ongoing basis with all information which may be
relevant to the other's liability hereunder and shall
supply copies of all relevant documentation promptly as
they become available.
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8.5 CUMULATIVE RIGHTS
The rights of indemnification contained in this Article 8 are
cumulative and are in addition to every other right or remedy of the
parties contained in this Agreement or otherwise.
ARTICLE 9
LIMITATION OF LIABILITY
9.1 The provisions of this Article shall operate to limit the aggregate
liability of the Seller and the Purchaser where this is expressly
stated under the Warranties notwithstanding anything contained in
this Agreement. Where expressly stated to do so, the provisions of
this Article shall also operate to limit the liability of the Seller
under the Tax Deed of Covenant.
9.2 Each of the Purchaser and the Seller hereby confirms that it has not
relied on any representation warranty or undertaking of the other or
any other persons save as expressly set out in this Agreement.
9.3 Subject to Article 9.23, this Agreement shall constitute the entire
understanding and agreement between the parties hereto and no
representation warranties or undertakings expressed or implied
statutory or otherwise made by or on behalf of the Seller or the
Purchaser in connection with or arising out of the sale of the Shares
and which are not contained in this Agreement shall give rise to any
liability on the part of the maker or makers thereof.
9.4 Notwithstanding anything in this Agreement to the contrary, neither
Party (the "Claiming Party") shall be liable (by way of damages or
otherwise howsoever) in respect of any breach of the Warranties
unless the other party (the "Other Party") shall have been given
written notice by the Claiming Party prior to the date specified in
Article 7.1 specifying the breach or claim in question and containing
the Claiming Party's best estimate of the aggregate amount of such
claim and quantifying to the extent that such information is
available to the Purchaser or the Company the Claiming Party's loss
and the Other Party shall cease to be under any liability to the
Claiming Party in respect of any breach of the Warranties or claim
under the Indemnities unless the Claiming Party shall have served a
statement of claim on the Other Party within six months of the giving
of such notice as aforesaid.
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9.5 The aggregate liability of the Seller in respect of all claims for
breach of any of the warranties or claims under the Tax Deed of
Covenant (or the indemnities referred to in Article 8.1) shall not in
any event exceed an amount equal to the aggregate consideration paid
to the Seller by the Purchaser less L1,125,000.
9.6 No liability shall in any event arise in respect of any claim for
breach of the Warranties or under the Tax Deed of Covenant unless the
liability arising from such claim together with the aggregate of all
claims (other than those referred to in Article 9.7) arising from a
breach of the Warranties or a claim under the Tax Deed of Covenant
(other than a claim made under the Tax Deed of Covenant with respect
to the transfer of the Property by the Company prior to Completion)
amounts to L50,000 or more and then the Seller's liability shall only
be in respect of the excess over L50,000.
9.7 Single claims in respect of the Warranties or claims under the Tax
Deed of Covenant of L5,000 or less shall be disregarded for all
purposes.
9.8 Each of the Purchaser and the Seller agrees that it shall reimburse
to the other or to such of them as shall have made the relevant
payment an amount equal to any sum paid by the other under any of the
Warranties which is subsequently recovered by or paid to it by a
third party together with any interest thereon (but after deducting
costs or expenses of recovery including tax payable) provided that
the limitation in this Article 9.8 shall not apply in respect of any
sums owing by the Seller to the Company as at the date of Completion
which the Purchaser has agreed will remain outstanding until 31 May
2002 and which shall, for the avoidance of doubt, be interest free.
9.9 In the event that the Purchaser shall be in receipt of any claim from
a third party which might constitute or give rise to a breach of any
of the Warranties the Purchaser shall forthwith notify the Seller
giving full details as far as practicable and shall not settle or
compromise any such claim or make any admission of liability without
the prior written consent of the Seller and, if so requested by the
Seller, the Purchaser shall take all reasonable steps to avoid,
resist, appeal, compromise or defend any claim and any adjudication
in respect thereof and for this purpose take all appropriate
proceedings in the name of the Company and the Seller shall be
allowed to have the conduct of any negotiations proceedings or
appeals incidental to any claim against the Seller which might
constitute a breach of any of the Warranties or other provisions of
this Agreement.
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9.10 Where following the Completion Date the Purchaser has or may have a
claim against a third party in relation to any matter which may give
rise to a claim under the Warranties the Purchaser shall procure that
it (or as the case may be the Company) takes reasonable measures to
recover any amounts due from any such third party as soon as
reasonably practicable and shall, if the Seller has already paid sums
to the Purchaser, in respect of the subject matter of the claim
forthwith upon such recovery reimburse the Seller in respect of the
amount so recovered (net of the costs of recovery including Taxation)
up to the amount paid by the Seller in respect of any such breach of
Warranty.
9.11 Each Party shall, so far as reasonably practicable, preserve all
material documents, records, correspondence, accounts and other
information relating to any matter which has given rise, or which it
is aware may give rise, to a claim under this Agreement or the Tax
Deed of Covenant.
9.12 The amount of any claim for breach of Warranties or under the Tax
Deed of Covenant paid by the Seller under this Agreement shall be
deemed to constitute a reduction in the Purchase Price to the extent
permitted by law or Inland Revenue practice.
9.13 Where a breach of any of the Warranties shall be in respect of a
matter where the Company shall be insured against any loss or damage
arising therefrom the Purchaser shall not make any claim against the
Seller for breach of any such warranty representation or undertaking
without first procuring that the Company shall make a claim against
its insurers for compensation for the loss or damage suffered and
thereafter any claim against the Seller shall be limited (in addition
to the limitation on the Seller' liability elsewhere referred to
herein) to damage suffered by the Purchaser as a result of such
breach shall exceed the compensation paid by the said insurers to the
Company.
9.14 If any claim arising under the Warranties shall arise by reason of
some liability of the Company which at the time the breach is
notified to the Seller is contingent only then the Seller shall not
be under any obligation to make any payment to the Purchaser
hereunder until such time as the contingent liability ceases to be
contingent, however for the purposes of the time limitation specified
in Article 7.1, it will be sufficient that Purchaser gave Seller
notice of such contingent claim prior to the date specified in
Article 7.1.
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9.15 The Purchaser shall take or procure that the Company shall take all
reasonable steps necessary to mitigate any loss in relation to any
claim against the Company which might constitute a breach of any of
the Warranties.
9.16 No liability shall attach to the Seller in respect of a claim for
breach of the Warranties to the extent that:
9.16.1 such claim has been or is compensated by the discharge of
any liability giving rise to such claim for an amount less
than that provided for in the Financial Statements or the
Completion Accounts;
9.16.2 any such breach or claim is directly attributable (wholly
or mainly) to or directly arises from any voluntary act,
omission, transaction or arrangement outside the ordinary
course of business of or carried out by any of the
Purchaser or the Company, a company within the Purchaser's
group of companies or their respective successors in title
from time to time or any subsidiary or associated company
of any of the foregoing at any time after Completion which
the Purchaser knew would give rise to the liability in
question;
9.16.3 any over provisions allowance or reserve was made in the
Financial Statements or is made in the Completion Accounts
in respect of any such liability;
9.16.4 allowance, provision or reserve has been made in the
Financial Statements or Completion Accounts in respect of
the matter to which such liability relates; and
9.16.5 any Taxation for which the Company is or may be liable to
be assessed or accountable is reduced or extinguished as a
result of any such claim or liability or to the extent
that relief arising wholly before Completion and not taken
into account or otherwise reflected in the Completion
Accounts is utilised to reduce such liability to Taxation;
9.17 No liability to attach to the Seller or the Purchaser in respect of
any breach of the Warranties to the extent that any such breach or
claim occurs as a result of any legislation not in force at the
Completion Date which takes effect retrospectively or occurs as a
result of any increase in the rate of Taxation or an alteration in
the published practice and custom of the Inland Revenue or other
Taxation Authority from that in force at the date hereof;
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9.18 All amounts available for set-off or otherwise liable to be deducted
pursuant to Article 9.16 or 9.17 shall first be taken into account
for the purpose of determining the amount of loss sustained in
connection with the de minimis limits referred to this Article 9.
9.19 Neither the Purchaser nor the Company shall be entitled to claim that
any fact or circumstance constitutes a breach of any of the
Warranties if such fact or circumstances has been clearly disclosed
in this Agreement in the Financial Statements, the Management
Accounts or in or in the Disclosure Letter or in any other letter
document or communication expressly referred to in this Agreement or
in any of the schedules hereto or to the Disclosure Letter.
9.20 Neither the Purchaser nor the Company nor the Seller, shall be
entitled to recover any sum in respect of any claim for breach of any
of the Warranties or claim under the Tax Deed of Covenant or
otherwise obtain reimbursement or restitution more than once in
respect of any one liability nor shall they be entitled to utilise
any saving, recovery, set-off or relief more than once to reduce any
liability for breach of any of the Warranties or amount of any claim
under the Tax Deed of Covenant.
9.21 Any breach of the Warranties, or mis-statement of fact shall not give
rise to a right on the part of the Purchaser to rescind or terminate
this Agreement following Completion.
9.22 Nothing in this Article or contained in the Warranties shall be
deemed to relieve the Purchaser or the Company or the Seller from any
common law duty to mitigate any loss or damage incurred by them.
9.23 Nothing in this Article or this Agreement or the Tax Deed of Covenant
shall seek to limit the Seller's liability or the Purchaser's
liability in respect of fraud or fraudulent misrepresentation or
other dishonest conduct.
ARTICLE 10
CONDITIONS OF COMPLETION IN FAVOUR OF THE SELLER
10.1 OBLIGATIONS OF THE COMPANY
The obligation of the Seller to sell the Shares is contingent upon
the fulfilment, performance and satisfaction of each of the
conditions set forth below. The
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Purchaser acknowledges that the following conditions are for the
exclusive benefit of the Seller.
(i) REPRESENTATIONS AND WARRANTIES. All representations and
warranties of the Purchaser made in or pursuant to this
Agreement shall be true and correct at the Completion
Date. The Completion of the transaction provided for in
this Agreement shall not be nor be deemed to be a waiver
of the representations and warranties contained in this
Agreement, which representations and warranties shall
continue in full force and effect for the benefit of the
Seller as provided in Article 4.
(ii) PERFORMANCE OF COVENANTS. The Purchaser shall have
performed or complied with, in all respects, all the
obligations, covenants and agreements in this Agreement to
be performed or complied with by the Purchaser at or prior
to the Completion Date. The Purchaser shall not be in
breach of any covenant on its part contained in this
Agreement.
(iii) NO ACTION TO RESTRAIN. No action or proceeding shall be
pending or threatened by any governmental or regulatory
agency or authority or any other Person (including a party
hereto) to restrain or prohibit the Completion of the
transaction contemplated by this Agreement.
10.2 WAIVER
If any of the conditions set forth in any this Article have not been
fulfilled, performed or satisfied at or prior to the Completion Date
(or delay thereof determined by the Purchaser), the Seller may, by
written notice to the Purchaser, terminate all of its obligations
hereunder and the Seller shall be released from all its obligations
under this Agreement. Any of these conditions may be waived in whole
or in part by the Seller by instrument in writing, without prejudice
to any of its rights of termination in the event of non-performance
of any other condition, obligation or covenant in whole or in part,
and without prejudice to its right to complete the transaction of
purchase and sale contemplated by this Agreement and claim damages
for breach of representation, warranty or covenant.
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ARTICLE 11
PENSION SCHEME
11.1 Subject to Article 11.2 the Purchaser and the Seller agree to use all
reasonable endeavours to procure that within six months of Completion
a company nominated by the Seller will replace the Company as
principal employer for the purpose of the Pension Scheme.
11.2 The Purchaser agrees to procure that while the Company remains the
principal employer of the Pension Scheme the Company will exercise
any power or discretion vested in it under the Pension Scheme in
accordance with directions given to it in writing by the majority of
the trustees except that the Company shall not be required to
exercise any discretion or power (or to concur with any action
proposed or decision made by the trustees of the Pension Scheme as
the case may be) if to exercise that power or discretion (or to agree
to or concur with that action or decision as the case may be) would
impose any liability or obligation on the Company in addition to
those which applied to it at the date of this Agreement.
11.3 The Purchaser agrees to procure also that after Completion the
Company will if so requested by the Seller while the Company remains
the principal employer of the Pension Scheme do all such things as
may reasonably be required by the Seller in respect of the Pension
Scheme to ensure that the Pension Scheme retains approval as an
exempt approved scheme for the purposes of Chapter I of Part XIV of
the Income and Corporation Taxes Act 1988 including without
limitation if so expressly required by the Inland Revenue the
provisions required by the Inland Revenue to take account of the
requirements of Chapter I of Part IV of the Welfare Reform and
Pensions Xxx 0000.
11.4 The Seller in his capacity as trustee of the Pension Scheme agrees
not to make any claim against the Company under any right or power
which he may have as trustee of the Pension Scheme except for the
purposes of Article 11.2 or 11.3.
ARTICLE 12
GENERAL
12.1 NOTICE
All notices required or permitted by this Agreement shall be in
writing and delivered by hand or sent by telecopier to:
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the Purchaser:
Address: Gav-Yam Centre Xx. 0
0 Xxxxxxx Xxxxxx
XX Xxx 0000
Xxxxxxx B 00000
Xxxxxx
Attn: Xxxxx Xxxxxx, CFO
Fax Number: 000-0-0000000
With a copy (which will not constitute notice) to:
Efrati, Galili & Co.
0 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxxxxx
Attn: Xxx Xxxxxxxxx, Adv.
Fax Number: 000-0-0000000
the Seller Address:60 Xxxxxxxx Xxx Xxxxx, Xxxxxxxx XX00 0XX, Xxxxxxxx
or at such other address or fax number of which the addressee may
from time to time have notified the addressor. A notice shall be
deemed to have been sent and received on the day it is delivered by
hand or on the day on which transmission is confirmed, if telecopied.
If such day is not a Business Day or if the notice is received after
ordinary office hours (time of place of receipt), the notice shall be
deemed to have been sent and received on the next Business Day.
12.2 COSTS
Except as otherwise provided in this Agreement, each party shall be
responsible for its own fees, expenses, and other costs incurred in
connection with negotiation and execution of this Agreement and the
purchase and sale of the Shares.
12.3 TIME OF THE ESSENCE
Time is of the essence to every provision of this Agreement.
Extension, waiver or variation of any provision of this Agreement
shall not be deemed to affect this provision and there shall be no
implied waiver of this provision.
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12.4 FURTHER ACTS
The parties acknowledge that their co-operation is required to
facilitate the Completion. The parties shall do or cause to be done
all such further acts and things as may be necessary or desirable to
give full effect to this Agreement.
12.5 AMENDMENT
This Agreement may be amended only by written agreement of the
parties.
12.6 WAIVER
No waiver of any provision of this Agreement shall be binding unless
it is in writing. No indulgence or forbearance by a party shall
constitute a waiver of such party's right to insist on performance in
full and in a timely manner of all covenants in this Agreement.
Waiver of any provision shall not be deemed to waive the same
provision thereafter, or any other provision of this Agreement at any
time.
12.7 ENTIRE AGREEMENT
This Agreement and the documents referred to in it contain the whole
agreement between the parties relating to the transactions
contemplated by this Agreement and the documents referred to in it
and supersede all previous documents between the parties relating to
these transactions.
12.8 SEVERABILITY
If any provision of this Agreement is invalid or unenforceable, such
provision shall be severed and the remainder of this Agreement shall
be unaffected thereby and shall continue to be valid and enforceable
to the fullest extent permitted by law.
12.9 COUNTERPARTS
This Agreement may be executed in one or more counterparts (by
original or facsimile signature) which, together, shall constitute
one and the same Agreement. This Agreement shall not be binding upon
any party until it has been executed by each of the parties and
delivered to all other parties.
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12.10 ASSIGNMENT
Neither this Agreement nor any rights or obligations hereunder may be
assigned, directly or indirectly, by any party without the prior
written consent of the other parties, except that Purchaser may
assign all or part of its rights or obligations hereunder to a direct
or indirect subsidiary. Any assignment without such consent shall be
null and void.
12.11 ENUREMENT AND BINDING EFFECT
This Agreement shall enure to the benefit of and be binding upon the
parties hereto and their respective successors, heirs, executors,
administrators, personal representatives and permitted assigns.
12.12 GOVERNING LAW AND JURISDICTION
This Agreement (other than the lease of the Leased Premises, which
shall be subject to Scots law) shall be governed by and considered in
accordance with English law and the Parties submit to the
non-exclusive jurisdiction of English Courts.
AS WITNESS the signatures of the Parties or their duly authorised
representatives the day and year first before written.
---------------------------------------
PARADIGM GEOPHYSICAL LIMITED
By:
-----------------------------------
Title:
--------------------------------
---------------------------------------
XXXXX XXXXX XXXX
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SCHEDULE 1
PARTICULARS OF THE COMPANY
Name: Sysdrill Limited
Company Registration No: SCO 86248
Registered Office 00 Xxxxx Xxxxxx
Xxxxxxxx
XX00 0XX
Date of Incorporation: 16 January 1984
Country of Incorporation: Registered in Scotland
Accounting Reference Date: 31 December
Directors: Xxxxx Xxxxx Xxxx
Secretary: Esslemont and Cameron
Authorised Share Capital: 100 Ordinary Share of L1.00
Issued Share Capital: 1 Ordinary Share of L1.00
Charges: None
Auditors: Deloitte and Touche
Tax Residence: UK
Nature of Business: Software Consultancy, development and supply
Bankers: Barclays Bank PLC
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SCHEDULE 2
PREPARATION OF THE COMPLETION ACCOUNTS AND ADJUSTMENT OF THE PURCHASE PRICE
1. ADJUSTMENT OF PURCHASE PRICE
1.1 ADJUSTMENT CRITERIA. The Purchase Price is based on the
audited balance sheet of the Company as of December 31,
1999 attached hereto as EXHIBIT "E" (the "AUDITED
VALUATION BALANCE SHEET"). The final Purchase Price will
be determined according to the Completion Balance Sheet
and shall be increased or decreased according to the
following:
a) any change in the Net Assets, in the audited
Completion Balance Sheet compared to the
Audited Valuation Balance Sheet but excluding
cash at bank and in hand, and buildings,
computer hardware and office equipment, loans
and investments, term loans and directors loan
account and assuming, prior to Completion Date,
the sale and/or transfer out of the Company of
freehold land and buildings and investments
held as fixed assets, and
b) any amount by which the cash at bank and in
hand is greater or less than L300,000, in
accordance with the audited Completion Balance
Sheet, and
c) increased by:
i. the indebtedness of the Company to one of the
Purchaser's UK subsidiaries in the amount of
L54,720,
ii L130,000 representing the agreed value of the
Company's contribution to the Purchaser's
products,
iii the balance of the Seller's loan account with
the Company in accordance with the audited
Completion Balance Sheet, such balance to
include sums due to the Company from the Seller
for the acquisition of investments held as
fixed assets,
iv the gross proceeds of sale of the freehold land
and buildings held as cash at bank or in hand
at Completion Date.
2. PREPARATION AND DELIVERY OF COMPLETION FINANCIAL
STATEMENTS.
2.1 The parties shall instruct the Seller's Accountants to
prepare, as soon as reasonably practicable and by no later
than sixty (60) days after the date hereof, the draft
closing balance sheet (the "DRAFT COMPLETION BALANCE
SHEET") as at the Completion Accounts Date together with
the related
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audited statement of profit and loss of the Company
(collectively the "DRAFT COMPLETION ACCOUNTS") for the
period ended on such date, in accordance with GAAP and as
adjusted in accordance with paragraph 1 of this Schedule 2
for those assets or liabilities that are no longer
included in the Company's assets or liabilities as a
result of having been sold, transferred or otherwise
disposed of, as agreed between the parties, before
Completion Date. The costs of the Seller's Accountants in
the preparation of the Draft Completion Accounts shall be
borne equally by the Seller and the Purchaser.
2.2 The Purchaser shall (and shall procure that the Company
shall) ensure that the Seller's Accountants are provided
with all reasonable access to the premises of the Company
and to the accounting and other relevant books and records
of the Company as needed in connection with the
preparation and audit of the audited Draft Completion
Accounts and each of the Seller and the Purchaser shall
(and the Purchaser shall procure that the Company shall)
provide explanations and assistance to the Seller's
Accountants as required.
2.3 As soon as reasonably practicable after completion of the
draft Completion Accounts, the Seller shall procure
delivery of
(a) a copy of the Draft Completion Accounts; and
(b) a certificate (the "DRAFT ADJUSTMENT
CERTIFICATE"), setting forth in reasonable
detail the Seller's Accountants' computation of
the amount of the required adjustment, if any,
required by paragraph 1 above.
2.3 On receipt of the documents referred to in paragraph 2.2
above, the Purchaser shall instruct the Purchaser's
Accountants to review the Draft Completion Accounts and
Draft Adjustment Certificate as soon as possible.
2.4 The Purchaser shall within 20 Business Days from the
deliver to the Purchaser of the Draft Completion Accounts
and the Draft Adjustment Certificate deliver to the Seller
a statement or any and all adjustments which the
Purchaser's Accountants to be made to the Draft Completion
Accounts and the Draft Adjustment Certificate pursuant to
their review
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thereof in order to establish that that the Draft
Completion Accounts and the Draft Adjustment Certificate
reflect the principles set out in the Agreement, together
with the working papers and calculations relating to such
adjustments. If the Purchaser shall not within the said
period deliver a statement of adjustments then it shall be
deemed to have accepted the Draft Completion Accounts and
Draft Adjustment Statement which shall be final and
binding on the Purchaser and shall be conclusive proof of
the amount of the adjustment to be made to the Purchase
Price.
2.5 If within 20 Business Days from the delivery of the
adjustments and related documents referred to in paragraph
2.4 the Seller shall not have given notice to the
Purchaser disputing the statement of adjustments prepared
by the Purchaser's Accountants then the Draft Completion
Accounts and Draft Adjustment Certificate as adjusted by
the Purchaser's Accountants shall be deemed to be agreed
and thereupon shall become final and binding on the Seller
and shall be conclusive proof of the amount of the
adjustment to be made to the Purchase Price.
2.6 The Seller shall be entitled by written notice to the
Purchaser given within [20] Business Days from the
delivery of the Purchaser's Accountants' adjustments to
dispute the statement of adjustments and the amount stated
in the amended Draft Adjustment Certificate and to require
that a dispute concerning such statement of adjustments be
referred for final decision to an independent chartered
accountant (the "EXPERT") agreed upon by the Seller and
the Purchaser of, failing agreement, nominated for this
purpose on the application of either party by the
President for the time being of the Institute of Chartered
Accountants in England and Wales.
2.7 The Seller and the Purchaser shall each be entitled to
make representations to the Expert concerning the dispute
through their respective accountants and/or other
nominated adviser.
2.8 The Expert shall decide the dispute and in so doing shall
be deemed to act as an expert and not as an arbitrator and
shall certify the Draft Completion Accounts and the amount
of the Draft Adjustment Certificate as determined by him
and his decision shall, in the absence of manifest error,
be final and binding on the parties.
2.9 The costs of the Expert shall be payable as the Expert
shall direct.
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2.10 The Draft Completion Accounts and the Draft Adjustment
Certificate as certificate by the Expert (if the reference
to the Expert is invoked) shall constitute the Completion
Accounts and Adjustment Certificate.
2.11 Once the final Completion Accounts and Adjustment
Certificate have been agreed (or deemed to be agreed) in
accordance with the provisions of this paragraph 2, the
adjustment of the Purchase Price will be made by way of an
automatic adjustment of the principal amount payable under
the Loan Notes.
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SCHEDULE 3
TAX DEED OF COVENANT
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