1
EXHIBIT 10.1
AGREEMENT
between
(1) The persons whose names and addresses are set out in Column (1) of Part
I of the Schedule ("THE VENDORS");
and
(2) HYCOR BIOMEDICAL INC., a corporation organised under the laws of the
State of Delaware, U.S. and having its principal place of business at
00000 Xxx Xxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxx 00000-0000, U.S. ("THE
PURCHASER")
WHEREAS -
(A) COGENT DIAGNOSTICS LIMITED is a company incorporated under the
Companies Acts with registered number SC122739 and having its
registered office at Orchard Brae House, 30 Queensferry Road,
Edinburgh, EH4 2HG, U.K. ("THE COMPANY"), further details of the
Company being set out in Part II of the Schedule;
(B) The Vendors are the registered holders and beneficial owners of the
numbers of Ordinary Shares of 25p each in the capital of the Company
shown opposite their respective names in Column (2) of Part I of the
Schedule;
(C) The persons named in Part II of the Schedule as the directors and
secretary are the only directors and the secretary respectively of the
Company;
(D) The Company has no subsidiaries or subsidiary undertakings; and
(E) The Vendors have agreed to sell and the Purchaser has agreed to
purchase the number of shares in the capital of the Company listed in
Column (2) of Part I of the Schedule on the terms and conditions set
out in this Agreement.
NOW THEREFORE IT IS HEREBY AGREED as follows:-
1. INTERPRETATION
1.1 In this Agreement the following expressions shall, unless otherwise
specified or the context otherwise requires, have the meanings set
opposite them respectively:
"Accounting Date" 31 March 1997
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"Accounts" the audited balance sheet of the Company as
at the Accounting Date, the audited profit
and loss account of the Company for the
accounting period ended on the Accounting
Date and the directors' and auditors'
reports and the notes to such accounts
"Associate" (a) in relation to an individual, any
spouse, brother, sister or lineal ascendant
or descendant and any company which is, or
may be, directly or indirectly, controlled
(within the meaning of section 840 of the
Taxes Act 1988) by any one or more of the
foregoing; and
(b) in relation to a company, any subsidiary
or subsidiary undertaking or holding company
of such company and any other subsidiary or
subsidiary undertaking of any holding
company of such company
"Business" the business carried on by the Company at
the Completion Date being the developing,
manufacturing, marketing and selling of
tests/kits for diagnosis of auto-immune
disease
"business day" a day, other than a Saturday or a Sunday, on
which clearing banks are open for business
in both Edinburgh and London
"Claim for Taxation" any notice, demand, assessment, letter or
other document issued or action taken
whereby the Company is liable or may become
liable to make any payment of or in respect
of Taxation (whether or not the Company is
primarily liable to pay same and whether or
not the Company has or may have any right of
relief or reimbursement against any other
person or persons) and includes, but is not
limited to:-
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(a) the loss or counteracting or reduction
in the amount of, or setting off against
profits of, any relief, allowance,
exemption or credit, which would
otherwise have been available to the
Purchaser and/or the Company;
(b) the loss, reduction in the amount of,
cancellation or set off of any right to
repayment of Taxation or payment or
credit which would otherwise have been
available; and
(c) the setting off against income, profits
or gains or against any Taxation (in
either case in respect of which, but for
such setting off, the Company would have
had a liability to Taxation in respect
of which the Vendors would be liable to
make a payment to the Purchaser under
the Taxation Undertaking) of any relief,
allowance, exemption or credit not
available before Completion but which
arises in respect of any event occurring
after Completion;
and reference to any Claim for Taxation
shall include any Claim for Taxation whether
made before or after Completion and whether
satisfied or unsatisfied at Completion
"Cogent Investments" Cogent Investments Limited (Company No.
SC076851), one of the Vendors
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"Companies Acts" the 1985 Act, the Business Names Xxx 0000,
the Companies Securities (Insider Dealing)
Xxx 0000, the Companies Consolidation
(Consequential Provisions) Xxx 0000 and the
Company Directors Disqualification Act 1986
, together
"Completion" completion of the sale and purchase of the
Sale Shares by virtue of the performance by
the Vendors and the Purchaser of the
obligations assumed by them respectively
under Clause 5
"Completion Date" the day on which Completion takes place
being 21 July, 1997 or such later date as
the Vendors and the Purchaser may agree in
writing but not being a date later than 30
July, 1997
"Confidential Information" all information which is at the Completion
Date confidential in relation to the
Business, including, for the avoidance of
doubt, all confidential business, financial,
operational, customer and marketing
information and trade secrets in relation to
the Business
"Consideration" the considerable payable by the Purchaser
for the Sale Shares as specified in Clause
4.1
"Deposit" (pound)50,000 paid by the Purchaser to the
Vendors' Solicitors to be held on behalf of
the Vendors and to be set-off against the
Consideration payable by the Purchaser at
Completion
"Directors" Xxxxxxx Xxxxx Xxxxxx, Xxxxxxx Xxxx Xxxxxxx,
Xxxxx Xxxxxx and Xxxxxxx Xxxxxx, each of
whom is a director of the Company and a
Vendor
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"Disclosure Letter" a letter from the Vendors addressed to the
Purchaser, disclosing matters for the
purpose of Clauses 6.1 and 6.2 and delivered
to, and accepted in writing with specific
reference to this Agreement by, the
Purchaser or the Purchaser's Solicitors (on
behalf of the Purchaser) prior to the
Purchaser's execution hereof
"Employees" Xxxxx Xxxxx, Xxxxxx Xxxxx, Xxxxx Xxxxx,
Xxxxxxxx Xxxxxx, Xxxxxx Xxxxx and Xxxxx
Xxxxxx, each of whom is an employee of the
Company and a Vendor
"Environment" all, or any, of the following media, namely
land, water (including, but not limited to,
coastal and inland waters, surface waters
and ground waters and water in drains and
sewers) and the air (and the medium of air
includes but is not limited to the air
within buildings and the air within other
natural or man-made structures above or
below ground)
"in the agreed terms" with reference to any document, that it
shall be in the form of a draft agreed by
the relevant parties, prior to the
Purchaser's execution hereof
"Intellectual Property" such of the following as may be owned, used
or enjoyed by the Company:-
patents, trade marks, service marks,
registered designs, trade names, business
names and applications for any of the
foregoing; the right to apply for
registration of any of the foregoing in any
part of the world; any similar or analogous
rights in any country; copyrights, design
rights or any similar or analogous right in
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any country, inventions, know-how,
confidential knowledge or experience
available to the Company; all business and
agreements relating to any of the foregoing
to which the Company is entitled; drawings,
blueprints, plans, specifications, formulas,
data and descriptive materials, technical
files and reports, designs and the benefit
of all research, development and design
work;
including, without prejudice to the
foregoing generality, the patents and trade
marks listed in Part IV of the Schedule
"Leasehold Property" the property at Pentlands Science Park,
Penicuik held by the Company pursuant to the
Missives
"LIBOR" the percentage rate per annum for sterling
deposits which appears on the display
designated as page "LIBP" on the Xxxxxx
Monitor Money Rate Service as at or about
11am on the business day immediately prior
to the Completion Date
"Loan Notes" the Loan Notes to be issued, pursuant to
Clause 4.2(b), by the Purchaser in part
satisfaction of the Consideration, and being
in the agreed terms to provide, inter alia,
for repayment over a three year period (in
equal yearly installments) with interest at
LIBOR
"Missives" the missives entered into at or prior to
Completion relating to the Leasehold
Property comprising an offer of let, by Tods
Xxxxxx XX, on behalf of The Moredun
Foundation as landlord of the Leasehold
Property and an acceptance of such offer, by
the Vendor's Solicitors, on behalf of the
Company, a brief description of the
principal terms of the missives being set
out in Part III of the Schedule
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"l985 Act" the Companies Acts 1985 and 1989
"Purchaser's Solicitors" XxXxxxxx Xxxxxx, Xxxxxxx Xxxxx, 00-00 Xxxxx
Xxxxxx, Xxxxxxxxx, XX0 0XX
"Sale Shares" the 89,775 Ordinary Shares of 25p each in
the capital of the Company
"SSAP" Statement of Standard Accounting Practice
"Taxation" all forms of taxation, duties, imposts,
charges, withholdings, contributions,
impositions and levies whatsoever in the
nature of taxation and whenever imposed and
whether of the United Kingdom or elsewhere
and but is not limited to:-
(a) income tax, corporation tax, advance
corporation tax, petroleum revenue tax,
capital gains tax, inheritance tax,
stamp duty, stamp duty reserve tax,
rates, value added tax, customs and
other import duties, national insurance
and social security contributions; and
(b) any payment whatsoever which the Company
may be or become bound to make to any
person, revenue, customs or fiscal
authority or any other body or authority
as a result of any enactment relating to
taxation and any other taxes, duties,
levies or imposts supplementing or
replacing any of the foregoing; and
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(c) all costs, charges, interest, fines,
penalties and expenses incidental or
relating to any of the foregoing or
relating from a failure to comply with
the provision of any enactment relating
to taxation
"Taxation Undertaking" the undertaking and indemnities given by the
Vendors pursuant to Clause 7
"Tax Warranties" the Warranties as to the matters stated in
paragraph 5 of Part V of the Schedule
"Vendors' Solicitors" Xxxx Ireland WS, Xxxxxxx Xxxx Xxxxx,
Xxxxxxxxxxx Xxxx, Xxxxxxxxx, XX0 0XX
"U.S." United States of America
"Warranties" the statements set out in Part V of the
Schedule
1.2 In this Agreement, unless otherwise specified or the context otherwise
requires:-
(a) reference to this Agreement shall include the Recitals and the
Schedule annexed and executed as relative hereto;
(b) words importing any gender shall include the other genders; words
importing natural persons shall include corporations and vice
versa; and words importing the singular only shall include the
plural and vice versa; and
(c) reference to any statute, regulation, directive, treaty or part
thereof shall be construed as reference thereto as amended or
re-enacted or as the application thereof is modified by other
provisions from time to time (whether before or after the last date
of execution of this Agreement), shall be construed as including
references to any provision of which they are re-enactments
(whether with or without modification) and shall be construed as
including references to any order, instrument, regulation or other
subordinate legislation made pursuant thereto.
1.3 Where there appears a reference in this Agreement to any information,
fact or matter having been "disclosed" such reference shall (except
where otherwise expressly provided herein) be deemed to refer to, but
be restricted only to, such information, facts or matters of which full
and accurate details are contained in the Disclosure Letter.
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1.4 In construing this Agreement the ejusdem generis rule shall not apply
and accordingly the interpretation of general words shall not be
restricted by being preceded by words indicating a particular class of
acts, matters or things or being followed by particular examples.
1.5 In this Agreement the headings to Clauses and Parts of the Schedule are
inserted for convenience only and shall not affect the construction of
this Agreement.
2. CONDITION PRECEDENT
2.1 This Agreement is conditional, in all respects, on the Company entering
into new service contracts with each of Xxxxx Xxxxxx and Xxxxxxx Xxxxxx
prior to Completion.
2.2 If the condition specified in Clause 2.1 is not satisfied, or waived in
writing by the Purchaser at or prior to Completion the Purchaser may
give written notice of withdrawal from this Agreement.
3. SALE AND PURCHASE
3.1 With effect from Completion, each Vendor shall sell, and the Purchaser
shall purchase, the number of Sale Shares set opposite the name of the
relevant Vendor in Column (2) of Part I of the Schedule.
3.2 The Sale Shares shall be sold free from any option, lien, charge or
encumbrance and with all rights attached thereto.
3.3 Each of the Vendors hereby waives or agrees to procure the waiver of
any pre-emption rights which may exist in relation to the Sale Shares
pursuant to the Articles of Association of the Company or otherwise.
3.4 The Purchaser shall not be obliged to complete the purchase of any of
the Sale Shares unless the purchase of all the Sale Shares is completed
simultaneously but completion of the purchase of some of the Sale
Shares shall not affect the rights of the Purchaser with respect to the
others.
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4. CONSIDERATION
4.1 The consideration ("the Consideration") payable for the Sale Shares
shall be (pound)1,795,500 in aggregate, which shall be divided equally
amongst the Sale Shares of which (pound)858,000 shall be payable in
cash and (pound)937,500 by the issue of Loan Notes.
4.2 The Consideration shall be met, at Completion, by:
(a) in the case of the Employees and Xxxxxxx Xxxxxx, the payment to
each of them (in accordance with Clause 5.5(a)) of the monetary
amounts set out opposite their respective names in Column (3) of
Part 1 of the Schedule; and
(b) in the case of Cogent Investments and the Directors (other than
Xxxxxxx Xxxxxx), the payment to each of them (in accordance with
Clause 5.5(a)) of the monetary amount set opposite their respective
names in Column (3) of Part 1 of the Schedule, and the issue to
each of them of Loan Notes in the monetary amount set opposite
their respective names in Column (3) of Part 1 of the Schedule.
4.3 The Vendors' Solicitors are hereby irrevocably authorised to receive
the Consideration and their receipt(s) therefore shall be a full
discharge to the Purchaser who shall not be concerned with the
distribution thereof to and among the Vendors.
5. COMPLETION
5.1 Completion of the sale and purchase of the Sale Shares shall take place
at the offices of the Purchaser's Solicitors on the Completion Date.
5.2 At Completion the Vendors shall deliver to the Purchaser:-
(a) duly executed transfers of the Sale Shares in favour of the
Purchaser, or such nominee of the Purchaser as the Purchaser may
nominate, together with the definitive certificates in respect
thereof;
(b) any power of attorney under which this Agreement or any document
referred to herein or executed in pursuance hereof is executed on
behalf of any of the Vendors and such other evidence as the
Purchaser may require of the authority of any person executing on
behalf of any of the Vendors;
(c) such waivers, consents or documents which may be required by the
Purchaser to vest in the Purchaser the full beneficial ownership of
the Sale Shares and enable the Purchaser to procure them to be
registered in the name of the Purchaser or its nominees;
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(d) a written waiver in the agreed terms from each Vendor in respect of
any claims which such Vendor may have against the Company as at
Completion;
(e) the certificate of incorporation, any certificate of incorporation
on change of name, common seal (if any), statutory and minute and
other record books (written up to the Completion Date) and share
certificate books of the Company together with all unused forms of
share certificates of the Company;
(f) a statement from the Company's bankers as at a date not more than
two business days prior to the Completion Date confirming the sums
due to the bank and that such sums do not exceed any debt levels
permitted by the bank;
(g) the Lease and all deeds and documents under the Company's control
relating to the Leasehold Property;
(h) a written resignation in the agreed terms from all the directors of
the Company and Queensferry Secretaries Limited as secretary of the
Company;
(i) a letter in the agreed terms from the auditors of the Company
confirming they shall, on request of the Purchaser or the Company,
resign as auditors and confirming that as at Completion no sums are
due to the auditors by the Company in respect of outstanding
invoices or in respect of work carried out but not invoiced; and
(j) the service contracts entered into between the Company and each of
Xxxxx Xxxxxx and Xxxxxxx Xxxxxx pursuant to Clause 2.1.
5.3 At or prior to Completion the Vendors shall repay to the Company all
moneys owing as at Completion by the Vendors and/or their Associates to
the Company whether or not such sums are due for repayment, including
any amount which may be unpaid in respect of any of the Sale Shares.
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5.4 At Completion the Vendors shall procure transaction of the following
business to the Purchaser's satisfaction at a meeting of the board of
directors of the Company or by written resolution:-
(a) approval for registration of the transfers (subject only to their
being re-presented duly stamped) in respect of the Sale Shares and
the entry in the register of members of the Company of the
transferees;
(b) revocation of all existing mandates for the operation of bank
accounts and the issue of new mandates giving authority to persons
nominated by the Purchaser;
(c) appointment of such directors, secretary and auditors as the
Purchaser may nominate; and
(d) change of the registered office of the Company to Xxxxxxx Xxxxx,
Xxxxxxxxx Xxxxxxx Xxxx, Xxxxxxxx, Xxxxxxxxxx, XX00 0XX
5.5 At Completion the Purchaser shall, subject to compliance by the Vendors
with the obligations incumbent on them under Clauses 5.2, to 5.4
(inclusive);
(a) pay the Vendors' Solicitors by telegraphic transfer of funds
to:-
Bank: Bank of Scotland, 00 Xx Xxxxxx'x Xxxxxx,
Xxxxxxxxx
Sort Code: 80-31-20
Account Number: 00000000
Account Name: Xxxx Ireland Client Account
the sum of (pound)808,000 and authorise the release of the
Deposit of (pound)50,000, to the Vendor's Solicitors, being in
aggregate, that cash part of the Consideration due pursuant to
Clauses 4.2(a) and (b) for the purchase of the Sale Shares;
and
(b) issue the Loan Notes to each of Cogent Investments and the
Directors (other than Xxxxxxx Xxxxxx) (the Vendors' Solicitors
being irrevocably authorised to receive same in terms mutatis
mutandis as contained in Clause 4.3) in part satisfaction of
the Consideration due pursuant to Clause 4.2(b) for the
purchase of the Sale Shares.
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6. WARRANTIES, INDEMNITIES AND UNDERTAKINGS
6.1 Cogent Investments and each of the Employees severally warrants to the
Purchaser that, subject only to the matters disclosed in the Disclosure
Letter, each of the Warranties contained in paragraphs 1.1 to 1.5
(inclusive) of Part V of the Schedule is and will at Completion be true
and accurate .
6.2 The Directors warrant to the Purchaser that, subject only to the
matters disclosed in the Disclosure Letter, each of the Warranties is
and will at Completion be true and accurate.
6.3 The Directors agree that the Warranties shall (mutatis mutandis) apply
to any business of the Company carried on outside the United Kingdom
and for the purpose of construction the references to any statutory
provision enacted, or accounting principles applying, in the United
Kingdom shall include references to any corresponding provision in the
local legislation and (where relevant) to generally accepted accounting
principles, and the references to any governmental or administrative
authority or agency shall include references to the equivalent local
governmental or administrative authority or agency.
6.4 If after the Purchaser shall have complied with the provisions of
Clause 5.5 it shall be found that any of the Warranties was when given
not true and accurate then, subject to Clause 8 (Limitation of
Liability), Cogent Investments, the Employees and the Directors (as the
case may be), shall, on demand, pay the Purchaser:-
(a) the amount necessary to put the Company and/or the Purchaser, as
the case may be, into the position which would have existed had the
Warranty been true and accurate; and
(b) all costs and expenses incurred by the Company and the Purchaser as
a result of the Warranty not being true and accurate (including,
without limitation, all costs and expenses of enforcing any
Warranty claim) and any other loss or damage suffered by them as a
result thereof.
6.5 Where any of the Warranties are qualified by the expression "to the
best of the knowledge, information and belief of the Directors" or "so
far as the Directors are aware" or any similar expressions, that
Warranty shall be deemed to include additional statements that the
knowledge, information and belief or awareness of any one Director
shall be the knowledge, information and belief or awareness of all the
Director together, that it has been made after due, diligent and
careful enquiry.
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7. TAXATION UNDERTAKING
7.1 The Directors undertake, subject to Clause 8 (Limitation of Liability),
to pay the Purchaser, on demand:-
(a) the amount of each and every liability for Taxation payable by the
Company arising in respect of or as a consequence of any Claim for
Taxation or any depletion in the assets of the Company as a result
of any Claim for Taxation or any settlement of any Claim for
Taxation; and
(b) all costs, charges and expenses reasonably incurred by the Company
or the Purchaser in relation to or resulting from any demands,
actions, proceedings or claims in respect of any Claim for
Taxation.
7.2 For the purposes of Clauses 7.1(a) and (b):-
(a) if a loss or counteracting of any relief, allowance, exemption or
credit treated as an asset or taken into account in computing
liabilities in any statutory accounts of the Company in respect of
any financial year (and not subsequently reversed in any such
statutory accounts prior to the Accounts or in the Accounts) which
would otherwise have been granted or been available to the Company
results in the Company suffering a liability to Taxation during its
current or succeeding accounting periods that liability shall
itself be a Claim for Taxation; and
(b) if there is a nullifying, cancellation or set-off of a right to
repayment of Taxation treated as an asset or taken into account in
computing liabilities in any statutory accounts of the Company in
respect of any financial year (and not subsequently reversed in any
such statutory accounts prior to the Accounts or in the Accounts)
which would otherwise have been available to the Company then the
amount of the repayment which is lost as a result shall be a Claim
for Taxation.
7.3 The undertaking contained in Clause 7.1 should apply only where such
Claim for Taxation:-
(a) is made wholly in respect of any acts, omissions or transactions
whatsoever of the Directors or the Company occurring or entered
into on or before Completion or, where the acts or omissions or
transactions of the Directors or the Company occur or are entered
into after Completion but are pursuant to the binding obligation of
a Director or the Company arising on or before Completion; or
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(b) is made in respect of or results from, or is calculated by
reference to, any actual or deemed income, profits or gains earned,
received or accrued, or deemed to have been earned, received or
accrued, on or before Completion; or
(c) is made by reference to or results from any dividend or
distribution paid or made, or deemed to have been paid or made,
prior to Completion.
7.4 The undertaking contained in Clause 7.1 shall not apply to any Claim
for Taxation to the extent that provision or reserve in respect thereof
was made in Accounts.
7.5 In respect of any payment due from the Vendors under the undertaking
contained in Clause 7.1 if the same will be or has been subject to
Taxation, the Purchaser may demand from the Vendors such amount as will
ensure that the net receipt, after such Taxation, to the Purchaser in
respect of such payment is the same as it would have been were the
payment not subject to such Taxation.
8. LIMITATION OF LIABILITY
8.1 The liability of the Vendors under or in respect of the Warranties
and/or the Taxation Undertaking shall be limited as follows:
(a) the amount of any successful claim against the Vendors under the
Warranties and/or the Taxation Undertaking shall be deemed to
constitute a reduction in the Consideration;
(b) the aggregate amount of all claims against the Vendors under the
Warranties and/or the Taxation Undertaking shall be limited, in
each case, to the actual amount of the Consideration received by
that Vendor;
(c) notwithstanding the provisions of Clause 8.1(b) the aggregate
liability of the Directors under the Warranties (save in respect of
the Tax Warranties ) shall not exceed (pound)500,000 and shall be
limited in the case of each individual Director by prorating each
claim made under the Warranties (save the Tax Warranties) among the
Directors in the following proportions: Xxxxxxx Xxxxx Xxxxxx
40.45%; Xxxxxxx Xxxx Xxxxxxx 40.45%; Xxxxx Xxxxxx 17.15%; and
Xxxxxxx Xxxxxx 1.95%;
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(d) notwithstanding the provisions of Clause 8.1(b) the aggregate
liability of the Directors under the Tax Warranties and the
Taxation Undertaking shall not exceed the aggregate Consideration
received by them and shall be limited in the case of each
individual Director by prorating each claim made under the Tax
Warranties and the Taxation Undertaking in the proportions
contained in Clause 8.1(c);
(e) the Directors shall have no liability under the Warranties unless
and until the aggregate liability of the Directors in respect of
claims under the Warranties exceeds (pound)5,000 in which event the
Directors shall be liable for and the Purchaser shall be entitled
to the whole amount and not merely the excess over (pound)5,000.
For the avoidance of doubt, this limit shall apply on an "all
claims" basis and not on an "each and every claim" basis;
(f) the Directors shall not be liable in respect of any single claim
under the Warranties where the liability in respect of that claim
does not exceed (pound)1,000; provided that for this purpose claims
arising out of the same set of circumstances shall be aggregated;
(g) no claim shall be brought by the Purchaser under or in respect of
any breach of the Warranties (other than the Tax Warranties) unless
notice in writing of such claim has been given to the Vendors not
later than 21 July 1999. Any such claim shall (if it has not been
previously satisfied, settled or withdrawn) be deemed to have been
withdrawn at the expiration of a period of six months from the
giving of such notice unless court proceedings in respect of it
have commenced by being both issued and served on the Vendors save
that in respect of a claim based on a liability which is a
contingent liability or which is otherwise subject to some
contingency such time limit of six months shall not start to run
until such contingent liability or other contingency has
crystallised;
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(h) no claim (except in the case of a claim involving fraud, in respect
of which no time limit shall apply) shall be brought by the
Purchaser under or in respect of any breach of the Tax Warranties
or the Taxation Undertaking unless notice in writing of such claim
has been given to the Vendors not later than 21 July 2003. Any such
claim shall (if it has not been previously satisfied, settled or
withdrawn) be deemed to have been withdrawn at the expiration of a
period of six months from the giving of such notice unless court
proceedings in respect of it have commenced by being both issued
and served on the Directors save that in respect of a claim based
on a liability which is a contingent liability or which is
otherwise subject to some contingency such time limit of six months
shall not start to run until such contingent liability or other
contingency has crystallised;
(i) the Vendors shall have no liability under the Warranties to the
extent that provision, reserve, or allowance has been made in
respect of the matter to which such liability relates in the
Accounts; and
(j) the Vendors shall have no liability under the Warranties or the
Taxation Undertaking;
(i) if such liability would not have arisen but for a voluntary
act, transaction or omission of the Purchaser and/or the
Company on or after the date of Completion where such act,
transaction or omission is outside the ordinary course of
business of the Company; or
(ii) to the extent that such breach or claim arises as a result of
any change in the accounting bases or policies in accordance
with which the Company values its assets or calculates its
liabilities or any other change in accounting practice (other
than a change necessary to bring such bases, policies or
practices into line with generally accepted accounting
practice); or
(iii) in respect of any matter or thing done in consequence of the
execution and performance of this Agreement.
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8.2 The Purchaser shall or shall procure that the Company shall reimburse
the Vendors an amount equal to any sum paid by the Vendors under the
Warranties and/or the Taxation Undertaking which is subsequently
recovered by the Purchaser or the Company from any third party.
8.3 If any matter comes to the notice of the Purchaser and/or the Company
which may result in a claim under the Warranties, the Purchaser shall:
(a) give written notice thereof to the Vendors as soon as reasonably
practicable specifying the nature of the claim in reasonable detail
including details of the event or matter of default which gives
rise to the claim, the breach that results and the amount claimed;
(b) shall keep the Vendors reasonably informed of all matters relating
to such claim and not settle or make any admission or agreement in
relation to or compromise such claim without first consulting the
Vendors.
8.4 Nothing in this Agreement or the Taxation Undertaking shall affect the
Purchaser's duty to mitigate its or the Company's loss.
9 POST-COMPLETION UNDERTAKINGS
9.1 Each of the Directors severally undertakes to the Purchaser, and the
Company with the intent of securing to the Purchaser the full benefit
and value of the goodwill, know-how and connections of the Company and
as an essential part of the agreement for the purchase and sale of the
Sale Shares, that:
(a) he will not during the period of two years after Completion (or, if
shorter, for so long as the Purchaser, its subsidiaries, or any
member of the Purchaser's group, including the Company, shall
continue the Business as a going concern) either solely or jointly
or in partnership or association with or as director, manager,
agent, employee, consultant, servant or representative of or for
any other person, firm or company directly or indirectly carry on
or be engaged or concerned or interested in any business competing
with the Business provided that nothing contained in this Clause
9.1(a) shall preclude any Vendor from holding any shares or loan
capital (not exceeding 3% of the shares or loan capital of the
class concerned then in issue) in any company competing with the
Business whose shares are listed or dealt in on a recognised
investment exchange;
Page 18 of 47
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(b) he will not during the period of two years from Completion (or, if
shorter, for so long as the Purchaser, its subsidiaries or any
member of the Purchaser's group, including the Company, shall
continue the Business as a going concern) directly or indirectly
canvass, solicit or interfere with or endeavour to canvass, solicit
or interfere with, either on his own behalf or for any other
person, firm, company or other undertaking competing with the
Business the custom of any person, firm, company or other
undertaking who at any time during the period of twelve months
prior to the Completion Date was a customer of the Company;
(c) he will not during the period of two years from Completion (or, if
shorter, for so long as the Purchaser, its subsidiaries or any
member of the Purchaser's group, including the Company, shall
continue the Business as a going concern) either on his own behalf
or for any other person, firm, company or other undertaking
directly or indirectly solicit or endeavour to entice away from the
Company any person who is an employee, director, officer, agent or
consultant of the Company at the Completion Date;
(d) he will not following the Completion Date, directly or indirectly,
divulge or make use of any Confidential Information, unless ordered
to do so by a court of competent jurisdiction or in the proper
performance of his duties as an employee of the Company; and
(e) save in respect of Xxxxx Xxxxxx and Xxxxxxx Xxxxxx he shall not
following the Completion Date represent himself as being in any way
connected with the Company or the Business.
9.2 Each of the Employees and Cogent Investments severally undertakes to
the Purchaser, and the Company with the intent of securing to the
Purchaser the full benefit and value of the goodwill, know-how and
connections of the Company and as an essential part of the agreement
for the purchase and sale of the Sale Shares, that, he will not,
following the Completion Date, directly or indirectly, divulge or make
use of any Confidential Information, unless ordered to do so by a court
of competent jurisdiction or in the proper performance of his duties as
an employee of the Company. Cogent Investments further undertakes to
the Purchaser and the Company that it will not following the Completion
Date represent itself as being in any way connected with the Company or
the Business.
Page 19 of 47
20
9.3 The Vendors acknowledge that in view of the value of the assets of the
Company as stated in the Accounts, the level of Consideration is
payable principally in respect of the goodwill and business connections
and the Intellectual Property rights of and know-how and experience
available to the Company and has been calculated, by the Purchaser, to
reflect (a) the value, to the Purchaser, of the Intellectual Property
rights and know-how and experience available to the Company and (b) an
amount payable to the Vendors for agreeing to be bound, to the fullest
extent, by the restrictions contained in Clauses 9.1 and 9.2. Each of
the Vendors considers the restrictions contained in Clauses 9.1 and 9.2
to be reasonable and necessary to secure to the Purchaser the full
benefit and value of the goodwill and business connections and the
Intellectual Property rights of and know-how and experience available
to the Company.
9.4 The Vendors hereby jointly and severally agree at the reasonable
request and at the cost of the Purchaser to enter into any further
deeds and/or documents and do all such further acts or things as may be
necessary to give effect to the said restrictions .
10 ANNOUNCEMENTS
10.1 The Vendors shall, on Completion, make such announcements to the
employees, agents, customers and suppliers of the Company as the
Purchaser may reasonably require.
10.2 Subject to the provisions of Clause 10.1, neither the Purchaser nor the
Vendors shall make any press or media announcement or issue any press
or media statement or press or media release with respect to this
Agreement or any matter contained herein without obtaining the prior
written agreement of the other party to the contents thereof and the
manner and timing of its presentation and publication.
10.3 The provisions of Clause 10.2 shall not apply to any announcement or
circular required to be made or issued by the Purchaser so as to comply
with its obligations as a public company in the U.S.
11 ASSIGNATION AND TRANSFER
11.1 The Purchaser shall be entitled, without the consent of or notice to
the Vendors, to assign or transfer in whole or in part the benefit
and/or burden of this Agreement or any right and/or obligation of the
Purchaser under this Agreement to any other company which at the time
of the assignation or transfer is the holding company of the Purchaser
or a subsidiary of the Purchaser or a subsidiary of the holding company
of the Purchaser.
11.2 Save as provided in Clause 11.1, neither party shall be entitled
without the prior written consent of the other to assign or transfer
either the benefit or burden of this Agreement or any right and/or
obligation under this Agreement.
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11.3 This Agreement shall be binding on, and shall enure for the benefit, of
any person to whom any right and/or obligation is assigned or
transferred pursuant to Clauses 11.1 and/or 11.2.
12 POST-COMPLETION EFFECT
12.1 Notwithstanding Completion each and every right and obligation of the
Purchaser and the Vendors under this Agreement shall, except in so far
as fully performed at Completion, continue in full force and effect.
12.2 Any provision of this Agreement which is expressed or intended to have
effect on, or to continue in force after, the termination of this
Agreement shall have such effect, or, as the case may be, continue in
force, after such termination.
12.3 This Agreement shall be binding on the Vendors and their respective
executors, personal representatives and successors whomsoever and,
unless the context otherwise requires, references to the Vendors shall
include references to such executors, personal representatives and
successors.
13 ANCILLARY UNDERTAKING
The Vendors jointly and severally undertake to the Purchaser that the
Vendors shall from time to time after Completion execute such further
documents and do such further acts and things as the Purchaser may
require for the purpose of vesting in it the Sale Shares and the full
benefit of this Agreement.
14 CONSENTS
Any consent given by a party under any provision of this Agreement
shall be effective only in the instance and for the purpose for which
it is given and the giving of any such consent in respect of any act or
thing shall not operate as a waiver of any requirement on the party to
whom the consent is given not to do that or any other act or thing at
any time in the future without such consent.
15 ILLEGALITY, DELAY
15.1 If any provision of this Agreement shall to any extent be invalid,
illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired
thereby and each of the provisions of this Agreement shall be valid,
legal and enforceable to the fullest extent permitted by law.
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15.2 No failure on the part of any party to exercise, and no delay on its
part in exercising, any right or remedy under this Agreement will
operate as a waiver thereof, nor will any single or partial exercise of
any right or remedy preclude any other or further exercise thereof or
the exercise of any other right or remedy.
16 RIGHTS OF ACTION
16.1 The rights of the Purchaser in respect of a breach of any provision of
this Agreement shall not be affected by the giving of any time or other
indulgence by the Purchaser to any person nor by the Purchaser
rescinding or not rescinding this Agreement nor by any other cause
whatsoever except a specific waiver or release by the Purchaser in
writing and any such waiver or release shall not prejudice or affect
any remaining rights of the Purchaser.
16.2 Notwithstanding any rule of law to the contrary, any right of
rescission available to the Purchaser shall be in addition to and
without prejudice to all other rights and remedies available to it,
including, without limitation, the right to claim for monetary damages
in the event of any breach of the terms of this Agreement by the
Vendors.
16.3 The rights and remedies of the Purchaser under this Agreement are
cumulative and not exclusive of each other or of any other right or
remedy.
17 COSTS AND STAMP DUTY
17.1 The Purchaser and the Vendors shall each pay their own costs and
outlays in connection with the preparation, execution and carrying into
effect of this Agreement.
17.2 The Purchaser shall be responsible for payment of all stamp duty in
respect of this Agreement and the carrying into effect thereof.
18 ENTIRE AGREEMENT AND VARIATIONS
18.1 This Agreement (together with any documents referred to in this
Agreement to which the Purchaser and the Vendors are parties)
constitutes the entire agreement between the parties with respect to
the subject matter hereof and expressly excludes any warranty,
condition or other undertaking implied at law or by custom and
supersedes all previous agreements and understandings between the
parties with respect thereto and each of the parties acknowledges and
confirms that it does not enter into this Agreement in reliance on any
representation, warranty or other undertaking not fully reflected in
the terms of this Agreement (or in one of such documents).
Page 22 of 47
23
18.2 No variation of this Agreement shall be effective unless made in
writing and duly executed by both the Purchaser and the Vendors.
19 GOVERNING LAW
19.1 This Agreement shall be governed by and construed in accordance with
the law of Scotland.
19.2 The parties hereto submit to the non-exclusive jurisdiction of the
Court of Session as regards any claim, dispute or matter arising out of
or relating to this Agreement and its implementation or effect.
20 NOTICES
20.1 Any notice or other communication to be given by one party to another
under, or in connection with the matters contemplated by, this
Agreement shall be communicated as follows:-
(a) if to the Purchaser, to:-
Hycor Biomedical Inc.
00000 Xxx Xxxxxx Xxxxxx
Xxxxxx
Xxxxxxxxxx 00000-0000
U.S.
Facsimile no: 000-000-000 2220
Attention: Mr R Xxxxx
and copied to:-
XxXxxxxx Xxxxxx
Xxxxxxx Xxxxx
00-00 Xxxxx Xxxxxx
Xxxxxxxxx XX 0 4NF
Facsimile no: 0000-000 0000
Attention: Xx X X Xxx
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(b) if to the Vendors, to:-
Xxxx Ireland, WS
Xxxxxxx Xxxx Xxxxx
Xxxxxxxxxxx Xxxx
Xxxxxxxxx XX0 0XX
Facsimile no: 0000-000 0000
Attention: Ms M Radcliffe
or in either case to such other address and/or facsimile number and/or
marked for such other attention as may from time to time be specified
by the relevant party to the other, by notice given in accordance with
this Clause 20, for the purposes of this Clause 20.
20.2 Any notice or other communication to be given by one party to another
under, or in connection with the matters contemplated by, this
Agreement shall be in writing and shall be given by letter delivered by
hand or sent by first class prepaid recorded delivery or registered
post or by facsimile, and shall be deemed to have been received:-
(a) in the case of delivery by hand prior to 5 p.m. on a business day,
when delivered and in any other case on the business day following
the day of delivery; or
(b) in the case of first class prepaid recorded delivery or registered
post, on the second business day following the day of posting; or
(c) in the case of facsimile where the transmission occurs prior to 5
p.m. on a business day, on acknowledgement by the addressee's
facsimile receiving equipment and in any other case on the business
day following the day of acknowledgement by the addressee's
facsimile receiving equipment.
IN WITNESS WHEREOF these presents consisting of this and the 23 preceding pages
are, together with the Schedule, executed, in duplicate, as follows:-
SIGNED by XXXXXXX XXXXX XXXXXX
at
on the day of July 1997
in the presence of
Witness .................................... .........................
Full name...................................
Address.....................................
Page 24 of 47
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SIGNED by Xxxxxxx XXXX XXXXXXX
at
on the day of July 1997
in the presence of
Witness..................................... ........................
Full name...................................
Address.....................................
SIGNED by XXXXX XXXXXX
at
on the day of July 1997
in the presence of
Witness.................................... ........................
Full name..................................
Address....................................
SIGNED by XXXXXXX XXXXXX
at
on the day of July 1997
in the presence of
Witness.................................... ........................
Full name..................................
Address....................................
SIGNED by XXXXX XXXXX
at
on the day of July 1997
in the presence of
Witness.................................... ........................
Full name..................................
Address....................................
Page 25 of 47
26
SIGNED by XXXXXX XXXXX
at
on the day of July 1997
in the presence of
Witness.................................... ...........................
Full name..................................
Address....................................
SIGNED by XXXXX XXXXX
at
on the day of July 1997
in the presence of
Witness.................................... ...........................
Full name..................................
Address....................................
SIGNED by XXXXXXXX XXXXXX
at
on the day of July 1997
in the presence of
Witness.................................... ..........................
Full name..................................
Address....................................
SIGNED by XXXXXX XXXXX
at
on the day of July 1997
in the presence of
Witness.................................... ..........................
Full name..................................
Address....................................
SIGNED by XXXXX XXXXXX
at
on the day of July 1997
in the presence of
Witness.................................... ..........................
Full name..................................
Address....................................
Page 26 of 47
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SUBSCRIBED on behalf of COGENT INVESTMENTS
LIMITED
at
on the July 1997 by
Director/ Attorney in the presence of:-
Witness................................. ..............................
Full name...............................
Address.................................
SUBSCRIBED on behalf of HYCOR BIOMEDICAL, INC
at
on the July 1997 by
Director in the presence of:-
Witness................................. ..............................
Full name...............................
Address.................................
Page 27 of 47
28
THIS IS THE SCHEDULE REFERRED TO IN THE FOREGOING SHARE PURCHASE AGREEMENT
BETWEEN (1) THE VENDORS (AS DEFINED THEREIN) AND (2) HYCOR BIOMEDICAL INC.
PART I
THE VENDORS
(1) (2) (3)
NAMES AND ADDRESS OF NUMBER OF SALE SHARES CONSIDERATION (IN
CASH/LOAN VENDORS NOTES)
(A) DIRECTORS
XXXXXXX XXXXX XXXXXX 25.650 L231,750 cash
Belmont House L281,250 Loan Notes
Xxx Xxxxxxxx
Xxxxxxxx XX00 0XX
XXXXXXX XXXX XXXXXXX 25,650 L231,750 cash
00 Xxxxx Xxxxx L281,250 Loan Notes
Dunblane FK15 9HD
XXXXX XXXXXX 10,875 L 98,250 cash
7 Princes Xxxx Xxxxx L119,250 Loan Notes
Xxxxxxxxxx
Xxxx Xxxxxxx XX00 0XX
XXXXXXX XXXXXX 1,237 L 24,740 cash
00 Xxxxxx Xxxxx
Xxxxxxxxx
(X) COGENT INVESTMENTS
COGENT 23,324 L210,730 cash
INVESTMENTS L255,750 Loan Notes
LIMITED
Xxxxxxx Xxxx Xxxxx
00 Xxxxxxxxxxx Xxxx
Xxxxxxxxx XX0 0XX
(C) EMPLOYEES
XXXXX XXXXX 1,012 L 20,240 cash
00 Xxxxxxx Xxxx
Xxxxxxxxx
Clydebank
Page 28 of 47
29
XXXXXX XXXXX 1,069 L 21,380 cash
00 Xxxxxxx Xxxxx
Xxxxx Xxxxxxxxxxx
Xxxxxxxxx
XXXXX XXXXX 393 L 7,860 cash
(3F1) 00 Xxxxxxx Xxxxxxx
Xxxxxxxxx
XXXXXXXX XXXXXX 227 L 4,540 cash
0 Xxxxxxx
Xxxxxxxxxx
Xxxx Xxxxxxx
XX00 0XX
XXXXXX XXXXX 169 L 3,380 cash
0/00 Xxxxxx Xxxxx
Xxxxxxxxx
XXXXX XXXXXX 169 L 3,380 cash
0 Xxxxxxxxx Xxxxx Xxxxx
Xxxxxxxxx
---------------- -----------------
89,775 L1,795,500
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PART II
THE COMPANY
Date of incorporation: 5 February 1990
Registered number: SC 122739
Registered office: Xxxxxxx Xxxx Xxxxx
00 Xxxxxxxxxxx Xxxx
Xxxxxxxxx XX0 0XX
Authorised share capital: (pound)40,000, comprising 100,000 Ordinary shares of 25p each and
15,000 10% Cumulative Redeemable Preference Shares of (pound)1 each
Issued share capital: (pound)22,500 comprising 90,000 Ordinary Shares of 25p each
Directors: Xxxxxxx Xxxxx Xxxxxx, Xxxxxxx Xxxx Xxxxxxx, Xxxxx Xxxxxx and
Xxxxxxx Xxxxxx
Secretary: Queensferry Secretaries Limited
Auditors: KPMG
Xxxxxxx Xxxxx
00 Xxxxxx Xxxxxxx
Xxxxxxxxx XX0 0XX
Accounting reference date: 31 March
Latest accounts filed: 31 March 1997
Date of latest annual return: 5 February 1997
Extant registered charges: Floating Charge dated 27 April 1993 and
registered 14 May 1993 in favour of the
Clydesdale Bank plc over the whole
undertaking and all property and assets,
present and future, of the Company,
including uncalled capital, in security
of all sums due and to become due.
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31
PART III
THE LEASEHOLD PROPERTY
Leasehold
Property:
Xxxxxxx Xxxxx
Xxxxxxxxx Xxxxxxx Xxxx
Xxxxxxxx
Xxxxxxxxxx
XX00 0XX
Landlord: The Moredun Foundation
Tenant: The Company
Date of Commencement: 1 April, 1997
Term of Lease: 14 1/2 years
Date of Break Options: at 4 1/2years (30 September 2001) and 10 years (31 March 2007)
Rent: Year 1(pound)25,769
Year 2(pound)51,538
Year 3(pound)54,769
Year 4(pound)54,769
Year 5(pound)58,000
Rent Reviews: at 4 1/2 years (30 September 2001) and 10 years (31 March 2007)
Use: Use Classes 2(b) and 4(a) or (b) of the Town and Country Planning
(Use Classes) (Scotland) Order 1989 being uses related to life
sciences
Page 31 of 47
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PART IV
INTELLECTUAL PROPERTY
A. PATENTS
(1) European Application Number: 88307819.8
European Patent Number: 0306206
Priority Date: 27 August 1987
Application Date: 24 August 1988
Granted: 16 June 1993
Title: Assay Device and Method
States in which Patent is live: Germany
Spain
France
Italy
Luxembourg
Renewal Fees Due (National): 31 August 1997
(2) European Application Number: 94308091.1
European Publication Number: 0651249
Priority Date: 3 November 1993
Application Date: 2 November 1994
Title: Analytical Device
Status: Pending Application - the Search report
has just been issued
Designated States: Germany
Spain
Italy
France
United Kingdom
Next Renewal Due (EPO): 30 November 1997
(3) European Application Number: 85301058.5
European Patent Number: 0162533
Priority Date: 20 February 1984
Application Date: 18 February 1985
Granted: 11 September 1991
Title: The Detection of Human Cytomegalovirus
Specific IGM
Designated States: Austria
Belgium
Switzerland
Germany
France
Italy
Luxembourg
Netherlands
Renewal Date: 18 February 1998
Page 32 of 47
33
(4) Patent Number: 2154609
Title: HCMV Monocolonal Antibodies and their use
in infection of HCMV injection and HCMV
Specific IGM, methods of detect ING viral
antigens
Country: United Kingdom
Next Renewal Due: 18 February 1998
(5) Patent Number: 4716104
Application Number: 703,535
Filed: 20 February 1985
Date of Patent: 29 December 1987
Country: United States of America
Title: Detecting presence of HCMV - Specific IGM
B. TRADE MARKS
(1) Registration Number: 1397839
Application Date: 8 September 1989
Status: Registered
Next Renewal Due: 8 September 2006
Xxxx: AUTOSTAT
Class 1
Goods: Chemical and biological reagents; all
included in Class 1 and for use in
connection with diagnostic kits and
analytical kits
(2) Registration Number: 1396548
Application Date: 8 September 1989
Status: Registered
Next Renewal Due: 8 September 2006
Xxxx: AUTOSTAT
Class 10
Goods: Apparatus for use in diagnosis; lasers;
ultrasonic apparatus and instruments; gas
detectors; all being surgical, medical,
therapeutic, opthalmic, dental or
veterinary apparatus; parts and fittings
for all the aforesaid goods: all included
in Class 10
Page 33 of 47
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PART V
THE WARRANTIES
1. THE VENDORS
1.1 Each Vendor has full power and authority to enter into and perform
the Agreement and the Agreement when executed will constitute binding
obligations on each Vendor.
1.2 The Vendors are entitled to sell and transfer to the Purchaser the
full legal and beneficial ownership of the Sale Shares free from all
liens, charges and encumbrances on the terms of the Agreement,
without the consent of any third party.
1.3 The Vendors, and their Associates, do not have any rights or
interests, directly or indirectly, in any businesses other than those
now carried on by the Company which are or are likely to be, or
become, competitive with the business of the Company, save as the
registered holder or beneficial owner of any class of securities of
any company which is dealt in on a recognised investment exchange (as
defined in section 207(1) of the Financial Services Act 1986) and in
respect of which a Vendor, with his Associates, holds and is
beneficially interested in less than 3 per cent of any single class
of the securities in that company.
1.4 There is no outstanding indebtedness of any Vendor, or his
Associates, to the Company.
1.5 There is no outstanding indebtedness of the Company to any Vendor or
his Associates.
2 CORPORATE MATTERS
2.1 The information relating to the Company in the recitals to the
Agreement and Part II of the Schedule is true in all respects.
2.2 The Sale Shares constitute the whole of the issued and allotted share
capital of the Company.
2.3 There are no agreements or arrangements in force, whether legally
binding or not, which grant to any person the right to call for the
issue, allotment or transfer of any share or loan capital of the
Company.
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2.4 There is not, nor is there any agreement or arrangement to create,
any pledge, lien, charge or encumbrance on, over or affecting any of
the Sale Shares.
2.5 The register of members, register of applications and allotments,
minute book and other statutory books of the Company have been
properly kept and contain an accurate and complete record of the
matters with which they should deal and no notice or allegation, that
any of them is incorrect or should be rectified, has been received.
2.6 All returns, particulars, resolutions and documents required by the
Companies Acts, to be filed with the Registrar of Companies in
respect of the Company have been duly filed and are correct in all
material respects.
2.7 A copy of the Memorandum and Articles of Association of the Company
is attached to the Disclosure Letter and is accurate and complete in
all respects.
2.8 The Company:
(a) is not the holder or beneficial owner of, nor has it agreed to
acquire, any share of loan capital of any other company (whether
incorporated in the United Kingdom or elsewhere); and
(b) does not have outside the United Kingdom, any branch, agency or
place of business or any permanent establishment.
3 ACCOUNTING MATTERS
3.1 The Accounts have been prepared in accordance with the historical
cost convention and the bases and policies of accounting, adopted for
the purpose of preparing the Accounts, are the same as those adopted
in preparing the audited accounts of the Company in respect of the
last three preceding accounting periods apart from changes required
to conform to current financial reporting standards.
3.2 The Accounts:-
(a) give a true and fair view of the assets, liabilities (including
contingent, unqualified or undisputed liabilities) and
commitments of the Company at the Accounting Date and the profits
for the financial period ended on that date;
Page 35 of 47
36
(b) comply with the requirements of the Companies Acts and other
relevant statutes;
(c) comply with all current SSAP's and statements issued by, or with
the approval of, the Accounting Standards Board applicable to a
United Kingdom company;
(d) properly reflect the financial position of the Company as at that
date and disclose all assets of the Company to the extent
required by the Companies Acts, applicable SSAPs and other
relevant statutes and accounting principles and practices in the
United Kingdom; and
(e) to the extent required by the Companies Acts, applicable SSAPs
and other relevant statutes and accounting principles and
practices in the United Kingdom make proper and adequate
provision or reserve for all liabilities and capital commitments
of the Company outstanding at the Accounting Date, including
contingent, unquantified or disputed liabilities.
3.3 All the accounts, books, ledgers, financial and other records of
whatsoever kind, of the Company are in its possession, have been
fully, properly and accurately kept and completed and give a true and
fair view of its financial position.
4 FINANCIAL MATTERS
4.1 Save as disclosed in the Accounts, the Company did not have any
capital commitments outstanding at the Accounting Date and the
Company has not, since then, other than in the ordinary and normal
course of business, incurred or agreed to incur any capital
expenditure or commitments or disposed of or agreed to dispose of any
capital assets.
4.2 Since the Accounting Date the Company has not paid, made or declared
any dividend or other distribution.
4.3 The Company has not, since the Accounting Date, repaid or become
liable to repay any indebtedness in advance of its stated maturity.
4.4 There are no liabilities (including contingent liabilities) which are
outstanding on the part of the Company other than those liabilities
disclosed in the Accounts or incurred in the ordinary and proper
course of trading.
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4.5 None of the facilities available to the Company (full and accurate
details of which are set out in the Disclosure Letter) is dependent
on the guarantee or indemnity of, or any security provided by, third
party.
4.6 So far as the Directors are aware, the amounts due from trade debtors
as at Completion (less the amount of any relevant provision or
reserve, determined on the same basis as that applied in the Accounts
and disclosed in the Disclosure Letter) will be recoverable in full
in the ordinary course of business.
4.7 No part of the amounts included in the Accounts as owing by any
debtors is overdue by more than 60 days or has been released on terms
that any debtor pays less that the full book value of his debt.
4.8 There is not now outstanding, in respect of the Company, any
guarantee or agreement for indemnity or for suretyship, given by, or
for the benefit of, the Company.
4.9 The Company does not have outstanding, nor has it agreed to create or
issue, any loan capital, nor has it factored any of its debts, or
engaged in financing of a type which would not be required to be
shown or reflected in the Accounts.
4.10 The Company has not received notice from any lender requiring
repayment by the Company or intimating the enforcement of any
security which it may hold over any assets of the Company and, so far
as the Directors are aware, there are no circumstances likely to give
rise to any such notice.
4.11 The Disclosure Letter contains full details of any grant, subsidy or
financial assistance from any government department or agency or
other authority and, so far as the Directors are aware, the Company
has not done, nor omitted to do any act or thing which is likely to
result in all, or part, of any such grant, subsidy or financial
assistance becoming repayable, or being forfeited or withheld, in
whole or in part.
5 TAXATION MATTERS
5.1 There has not been any transaction, arrangement, event or omission
occurring after the Accounting Date:-
(a) which has caused, or will cause, any expenditure (including any
payment of Taxation) incurred or deemed to have been incurred for
Taxation purposes by the Company not to qualify for all or part
of any relief, allowance, credit or deduction for Taxation
purposes which might be expected by the Purchaser to be available
to the Company; or
Page 37 of 47
38
(b) which has given rise, or will give rise (i) to income or gains
being deemed to arise to, or supplies being deemed to be made by,
the Company for Taxation purposes, and/or (ii) to any Taxation
otherwise being assessable or chargeable on the Company when the
relevant income or gains do not, in fact, accrue to or the
relevant supplies are not in fact made by, the Company; or
(c) the Taxation treatment of which is or may become the subject of
any dispute with the Taxation authority.
5.2 The Company has not, within the last six years:-
(a) been the subject of any investigation by the Inland Revenue, or
any other relevant Taxation authority; or
(b) been the subject of any discovery by the Inland Revenue, or any
other relevant Taxation authority; and
the Directors are unaware of any facts or matters which are likely to
or may lead to any such investigation or discovery.
5.3 The Accounts make full provision or reserve for all Taxation
(including deferred Taxation) for which liability is known or could
reasonably be estimated for any period up to and including the period
ending on the Accounting Date.
5.4 All returns, computations and payments which should be or should have
been, made by the Company for any Taxation purpose have been made
within the requisite periods and are up-to-date, correct and on a
proper bases and none of them is, or so far as the Directors are
aware likely to be, the subject of any dispute with the Inland
Revenue or other Taxation authorities.
5.5 The Company has duly deducted and accounted for all amounts which it
has been obliged to deduct in respect of Taxation and, in particular,
has properly operated the PAYE system, by deducting tax as required
by law, for all payments made, or treated as made, to its employees
or former employees, and accounting to the Inland Revenue for all tax
so deducted and for all tax chargeable on benefits provided for its
employees or former employees.
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5.6 So far as the Directors are aware there are no facts or circumstances
which would adversely affect the entitlement of the Company to relief
from, credit for or right of set-off against, Taxation.
5.7 All expenditure incurred by the Company or which it may incur under
any subsisting commitment on the provision of machinery or plant has
qualified or will qualify (if not deductible as a trading expense of
a trade carried on by the Company) for writing down allowances under
the Capital Allowances Act 1990 Part II (Machinery and Plant).
5.8 The Company has not, nor has it ever been, a member of any group for
Taxation purposes.
5.9 The Company has duly registered and is a taxable person for the
purposes of value added tax and the Company has complied, in all
material respects, with all statutory provisions and regulations
relating to value added tax and has duly paid or provided for all
amounts of value added tax for which it is liable.
5.10 The Company has never made any transfer of the kind described in
Taxation of Chargeable Gains Xxx 0000 Section 125 (transfer of assets
at undervalue).
5.11 No income has arisen in a territory outside the United Kingdom in
respect of which any claim under the Income and Corporation Taxes Xxx
0000 Section 584 (unremittable overseas income) has been made or is
available to the Company.
5.12 The Company has not redeemed, repaid or repurchased or agreed to
redeem, repay or repurchase any of its shares.
6 TRADING MATTERS
6.1 Since the Accounting Date the business of the Company has been
continued in the ordinary and normal course, and there has been no
deterioration in its turnover, or its financial or trading position.
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6.2 The Company is not, nor has it agreed to become, a member of any
joint venture, consortium, partnership or other unincorporated
association.
6.3 The Company is not engaged in any litigation or arbitration
proceedings, as pursuer or defender, and the Company has received no
intimation or notification of any such proceedings pending or
threatened, either by or against the Company and so far as the
Directors as aware, there are no circumstances which are likely to
give rise to any litigation or arbitration.
6.4 There is no dispute with any revenue, or other official department in
the United Kingdom or elsewhere in relation to the affairs of the
Company and, so far as the Directors as aware, there are no
circumstances which are likely to give rise to any such dispute.
6.5 There are no claims pending or intimated or served, or so far as the
Directors are aware, capable of arising, against the Company by an
employee or xxxxxxx or third party in respect of any accident or
injury, which are not fully covered by insurance.
6.6 So far as the Directors are aware, the Company has conducted, and is
conducting, its business in all respects in accordance with all
applicable laws and regulations whether of the United Kingdom or
elsewhere, holds all necessary licences or consents necessary for the
carrying on of its business (short particulars of which are contained
in the Disclosure Letter) and the Directors have no reason to believe
that such licences or consents may be revoked or not renewed.
6.7 No power of attorney given by the Company is in force.
6.8 There are no outstanding authorities (express or implied) by which
any third party may enter into any contract or commitment to do
anything on behalf of the Company other than the ostensible or
implied authority of directors or employees to enter into contracts
in the normal course of their duties.
6.9 So far as the Directors are aware, the Company has not manufactured
or sold or supplied products which are, or were, or have become, in
any respect faulty or defective, or which do not comply in any
material respect with any warranties or representations, expressly or
impliedly made by it, or with all applicable regulations, standards
and requirements in respect thereof.
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6.10 The Company is not subject to any liability or obligation (save as
may be implied by law) to service, repair, maintain, take back, or
otherwise do or not do anything in respect of any goods that have
been, or are hereafter pursuant to an existing obligation, delivered
by it.
6.11 The Company is not a party to, nor have its profits or financial
position during the three years prior to the last date of execution
hereof by the Directors been affected by, any contract or arrangement
which is not of an entirely arm's length nature.
6.12 So far as the Directors are aware, the Company has not committed, or
omitted to do, any act or thing which could give rise to any fine or
penalty in terms of, nor is the Company a party to any agreement,
practice or arrangement which contravenes, any legislation, whether
of the United Kingdom or elsewhere, relating to unfair or restrictive
trade practices.
6.13 The Company is not a party to any contracts or agreements which are
under notice of termination and, so far as the Directors are aware,
there are no circumstances which may justify the serving of a notice
of termination.
6.14 Details of all agency, distributorship, marketing, purchasing,
manufacturing or licencing agreements or arrangements, or any
restrictive trading or other agreement or arrangments which the
Company is a party are disclosed in the Disclosure Letter and all
such agreements are in full force and effect.
6.15 No diligence has been executed against the Company which remains
undischarged, nor so far as the Directors are aware, is there any
unfulfilled or unsatisfied decree or other court order outstanding
against the Company.
6.16 No order has been made or petition presented or resolution passed for
the winding-up of the Company, no order has been made, or so far as
the Directors are aware, applied for, for the appointment of an
administrator to the Company and no receiver or administrative
receiver has been appointed to the Company and, so far as the
Directors are aware, no person has taken any steps to enforce any
charge or security interest against the Company.
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6.17 The Company is not a party to any contract, transaction, arrangement
or liability, which:
(a) is outside the ordinary and proper course of business; or
(b) is incapable of termination in accordance with its terms, by the
Company, on thirty days notice or less without payment of
compensation by the Company.
6.18 So far as the Directors are aware, the Company is not engaged in any
disputes, discussions or negotiations with any customers or suppliers
of the Company which are likely to result in such customers or
suppliers ceasing to be customers or suppliers of the Company or
materially altering their terms and conditions or contracts or usual
dealings with the Company and, so far as the Directors are aware,
there are no circumstances which are likely to give rise to any such
disputes, negotiations or discussions.
7 PROPERTY MATTERS
7.1 The Missives are in full force and effect and no notice of
termination has been issued or served and, so far as the Directors
are aware, there are no circumstances which may give rise to a notice
of termination being issued.
7.2 The Company has in its possession, or under its control, all deeds
and documents (duly stamped if so required) which are necessary to
prove title to the Leasehold Property.
7.3 The Company has no interest in any other land or premises other than
the Leasehold Property.
7.4 There is no option, or agreement for sale, mortgage, whether fixed or
floating, charge, lien, lease agreement or lease, condition,
restrictive covenant, or other encumbrance in respect of the
Leasehold Property.
7.5 The Company has timeously performed all of its obligations under the
Missives, including, without limitation, the obligation to pay rent
and the maintenance obligations.
7.6 The Company has duly and punctually performed and observed all
obligations and conditions, agreements, statutory requirements,
planning consents, by-laws, orders and regulations affecting the
Leasehold Property and no notice of any breach of any such matter has
been received.
7.7 No repairs notices have been issued in respect of the Leasehold
Property by the landlord or any local authority and, so far as the
Directors are aware, none are expected.
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7.8 The use of the Leasehold Property is the permitted use for the
purposes of the Lease and the Town and Country Planning (Scotland)
Acts.
7.9 There are no compulsory purchase notices, orders or resolutions
affecting the Leasehold Property.
8 EMPLOYMENT MATTERS
8.1 Full particulars of each employee and officer of the Company,
(including, without limitation, profit sharing, commission or
discretionary bonus arrangements and period of notice) are fully and
accurately set out in the Disclosure Letter.
8.2 No negotiations for any increase in the remuneration or benefits of
any officer or employee of the Company are current or imminent.
8.3 Since the Accounting Date no officer of the Company, or employee, has
given notice of his intention to resign, or is under notice of
dismissal.
8.4 The Company has not incurred any liability or received any claim in
respect of any breach of any contract of service, for redundancy
payment or for compensation for wrongful dismissal or unfair
dismissal in respect of which any claim is outstanding and the
Company has not received any claim in respect of such matters and the
Directors are not aware of any circumstances which may give rise to
such a claim.
8.5 The Company is not bound or accustomed to pay monies other than in
respect of remuneration, or emoluments of employment, to or for the
benefit of any officer or employee of the Company or any Associate of
any such person.
8.6 Save as set out in the Disclosure Letter, the Company is not a party
to and does not participate in or contribute to any scheme or
arrangement for the provision of any pension, retirement, death,
incapacity, sickness, disability, accident or health care benefits or
any gratuities or ex-gratia arrangements or promises, allowances or
other similar benefits to or for the benefit of any of its present or
former employees, officers or any Associate of any such person.
8.7 There are no agreements or any other arrangements between the Company
and any Trade Union or other body representing employees.
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9 ASSET MATTERS
9.1 The Company owned, at the Accounting Date, and has good and
marketable title to, and (except for stock subsequently sold or
realised in the ordinary course of business) still owns and has valid
title to, all the assets included in the Accounts and to all assets
acquired since the Accounting Date and not subsequently sold or
realised as aforesaid.
9.2 The Company has not created or granted, or agreed to create or grant,
any security or any other encumbrance in respect of any of the assets
included in the Accounts or acquired, or agreed to be acquired, since
the Accounting Date.
9.3 The Company has adequate reserves of stocks of raw materials,
packaging materials and finished goods in relation to its current and
expected trading requirement.
9.4 The stock in trade of the Company is in good condition and is capable
of being sold by it in the ordinary course of business in accordance
with its normal prices.
9.5 The plant, machinery, equipment, vehicles and other equipment used in
connection with Business:
(a) are (subject to normal wear and tear) in good and safe state of
repair and condition and satisfactory working order and, so far
as the Directors are aware, have been regularly and properly
maintained in accordance with the manufacturer's guidelines;
(b) are the absolute property of the Company, save for those items
subject of hire purchase, leasing or rental agreements listed in
the Disclosure Letter;
(c) are all capable of doing the work for which they were designed or
purchased.
9.6 All stock in trade, and the assets and undertakings of the Company of
an insurable nature are, and have at all time been, insured in
amounts representing their full replacement or reinstatement value
against fire and other risks normally insured against by persons
carrying on the same business as that carried on by the Company.
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9.7 The Company is now, and has at all times been, adequately covered
against accidence, damage, insurance, third party loss (including
product liability) loss of profits and other risks normally insured
by persons carrying on the same business as that carried on by the
Company.
9.8 All insurances are currently in full force and effect, and so far as
the Directors are aware, nothing has been done or omitted to be done
which could make any policy of insurance void or voidable, or which
will result in an increase in premium.
9.9 No claim is outstanding under any of the insurance policies and so
far as the Directors are aware, no circumstances exist which will
give rise to such a claim.
10 ENVIRONMENTAL MATTERS
10.1 So far as the Directors are aware, the Directors, in relation to the
Leasehold Property and/or the Business and the Company have complied,
at all times and in all respects with all statutes and subordinate
legislation, all European Community regulations and directives all
common law and other national and local laws so far as applicable to
the Business, all regulations, order, guidance notes, codes of
conduct or practice, by-laws or directions of any court of competent
authority insofar as any of the foregoing relate to health and
safety, waste and the pollution or protection of the Environment.
10.2 All licences, permits, consents, authorisations, registrations,
specifications, approvals, certificates or qualifications required at
the Leasehold Property or for the carrying on of the Business have
been obtained by the Company and are in full force and effect.
10.3 There have been no environmental audits and/or assessments
commissioned by the Directors and/or the Company for or in relation
to the Business of the Company and/or the Leasehold Property.
10.4 So far as the Directors are aware neither the Leasehold Property nor
any neighbouring property is likely to become listed or referred to
in a register of contaminated land.
11 INTELLECTUAL PROPERTY MATTERS
11.1 All rights in respect of the Intellectual Property used or required
by the Company in connection with its Business and which are required
to carry on the Business are in full force and effect and are vested
in, and beneficially owned by the Company, and no rights or licences
have been granted by the Company in respect of Intellectual Property.
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11.2 The Company is the sole beneficial owner of the Intellectual Property
and in the case of the Patents and Trade Marks the Company has been
and is registered as the sole proprietor; and said rights in respect
of such an Intellectual Property are valid, subsisting and
enforceable and none of them is being used, claimed, opposed or
attacked by any other person.
11.3 The details contained in Part IV of the Schedule in respect of the
patents and trade marks owned by the Company are true and accurate in
all respects.
11.4 No right or licence has been granted to any person by the Company to
use or embody, in any manner, or do anything which would or might
otherwise infringe any of the Intellectual Property; and no act has
been done or omission permitted, by the Company whereby the
Intellectual Property rights or any of them have ceased or might
cease to be valid or enforceable.
11.5 So far as the Directors are aware, the business of the Company (and
of any licencee under a licence granted by the Company) as now
carried on, does not, and is not likely to, infringe any Intellectual
Property of any other person (or would not do so if the same were
valid) or give rise to a liability to pay compensation pursuant to
the Patents Acts 1977, Sections 40 and 41 and all licences held by
the Company in respect of any such protection are in full force and
effect and no claim has been made against the Company in respect of
any infringement whatsoever.
11.6 The Company has not (save in the ordinary and normal course of
business) disclosed or permitted to be disclosed or undertaken or
arranged to disclose to any person other than the Purchaser any of
its know-how, trade secrets, confidential information, price lists or
lists of customers or suppliers.
11.7 The Company is not a party to any secrecy agreement or agreement
which restricts the use or disclosure of information.
11.8 So far as the Directors are aware nothing has been done or omitted by
the Company which would enable any agreement or licence granted in
respect of the Intellectual Property to or by the Company to be
terminated, or which may constitute a breach of the terms of any such
agreement or licence where such termination or breach would have an
adverse effect on the Business of the Company. So far as the
Directors are aware, all such agreements or licences granted by the
Company are in full force and effect, do not contravene any statutes,
regulations or directives, and the Company has complied with all its
obligations under such agreements and licences.
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12 EFFECT OF TRANSACTION
12.1 So far as the Directors are aware and save as provided in the
Agreement, after Completion (whether by reason of an existing
agreement or arrangement or otherwise) or as a result of the proposed
acquisition of the Sale Shares by the Purchaser:
(a) no supplier of the Company will cease, or be entitled to cease,
suppling the Company or may substantially reduce its supplies to
the Company solely as a result of the sale of the Sale Shares to
the Purchaser; and
(b) no customer of the Company shall cease, or be entitled to cease
solely as a result of the sale of the Sale Shares to the
Purchaser, to deal with the Company or may substantially reduce
its existing level of business with the Company.
12.2 Compliance with the terms of this Agreement does not and will not, so
far as the Directors are aware, relieve any person from any
obligation to the Company, (whether contractual or otherwise) or
enable any person to determine any such obligation, or any right or
benefit enjoyed by the Company, or to exercise any right, whether
under an agreement with, or otherwise in respect of, the Company.
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