EXHIBIT 10.12
STOCK PURCHASE AGREEMENT
(Principal Stockholders)
THIS STOCK PURCHASE AGREEMENT (this "Agreement") is dated as of
February 1, 1999 by and among Xxxxxx X. Xxxxxx International, Inc., a
Massachusetts corporation ("Buyer"), and (ii) Xxxx Xxxxxxxx, Xxxxx Xxxxxxx and
Xxxxxxx Way (collectively, the "Principal Stockholders").
WHEREAS, the Principal Stockholders own of record and beneficially an
aggregate of 1,200 "A" shares, one xxxxx each, and 4,626 "C" shares, one xxxxx
each, of the capital stock of Contactica Limited, a United Kingdom limited
company (the "Company") (said shares being referred to herein as the "Company
Shares");
WHEREAS, Xxxx Xxxxxxxx owns of record and beneficially six (6) ordinary
shares of the capital stock of Contactica Asia Limited, a Hong Kong limited
company (the "Hong Kong Company") (said shares being referred to herein as the
"Hong Kong Shares" and, together with the Company Shares, the "Shares");
WHEREAS, the Principal Stockholders desire to sell all of the Company
Shares and Xxxx Xxxxxxxx desires to sell all of the Hong Kong Shares to Buyer,
and Buyer desires to purchase all of the Company Shares and the Hong Kong
Shares; and
WHEREAS, pursuant to a Stock Purchase Agreement dated the date hereof
(the "AS Agreement") among Buyer and the additional stockholders of the Company
(other than Cambridge Consultants Limited) (the "Additional Stockholders" and
collectively with the Principal Stockholders, the "Selling Stockholders"), the
Additional Stockholders are selling all of their shares in the Company to Buyer.
NOW, THEREFORE, in order to consummate said purchase and sale and in
consideration of the mutual agreements set forth herein, the parties hereto
agree as follows:
ARTICLE 1. SALE OF SHARES AND PURCHASE PRICE.
1.1 Transfer of Shares. Subject to the terms and conditions set forth
in this Agreement, at the Closing, each Principal Stockholder shall sell with
full title guarantee to the Buyer the number of Shares set forth opposite his
name in Exhibit A and shall deliver or cause to be delivered to Buyer duly
executed stock transfer forms and certificates representing such Shares,
together with such other documents as may be reasonably required by Buyer to
effect a valid transfer of such Shares by such Principal Stockholder, free and
clear of any and all liens, encumbrances, charges or claims.
1.2 Purchase Price and Payment.
(a) Subject to the satisfaction of all of the conditions
contained herein, in consideration of the sale by the Principal Stockholders
to Buyer of the Shares and in reliance upon the representations and warranties
of the Principal Stockholders herein contained and made at the Closing, Buyer
will pay to the Principal Stockholders an aggregate of Two Million Four
Hundred Seventy-seven Thousand Four Hundred Fifty-two English Pounds
((pounds) 2,477,452) as set forth in this Section 1.2 (the "Purchase Price").
(b) At the Closing, Buyer will pay to the Principal
Stockholders an aggregate of fifty percent (50%) of the Purchase Price by
delivering to each Principal Stockholder the amount specified opposite such
Principal Stockholder's name in Exhibit A hereto by bank cashier check or by
wire transfer of immediately available funds.
(c) The remaining fifty percent (50%) of the Purchase Price
shall be paid in equal installments over a three year period on each of the
first three anniversary dates of the Closing, subject to the conditions set
forth in this paragraph (c). Such installments shall be paid pro rata to each
Principal Stockholder (in accordance with his percentage ownership of the
Company Shares) in a combination of cash and common stock of Xxxxxx X. Xxxxxx,
Inc. ("ADL"), provided that (x) such Principal Stockholder shall not have been
dismissed for gross misconduct (as defined in such Principal Stockholder's
employment agreement) as an employee of Buyer or another subsidiary of ADL on or
prior to such anniversary date; (y) such Principal Stockholder shall not have
voluntarily terminated his employment with Buyer or another subsidiary of ADL on
or prior to such anniversary date; and (z) with respect to the ten percent (10%)
portion of the Purchase Price to be paid in ADL stock to the Principal
Stockholders on the third anniversary date (the "Contingent Stock"), the
conditions of sub-clause (ii) below shall be met on such anniversary date.
(i) For the avoidance of doubt, a Principal
Stockholder shall not forfeit his right to receive any such
installment if such Principal Stockholder's employment with
Buyer or another subsidiary of ADL is terminated due to death
or permanent disability. For purposes of this Section 1.2(c),
"permanent disability" means that such Principal Stockholder
is incapable of any future continued employment with Buyer or
another subsidiary of ADL, the existence of such inability
being determined by an independent physician agreed to by
Buyer and such Principal Stockholder.
(ii) Each Principal Stockholder shall be paid his pro
rata share of the Contingent Stock if on the third anniversary
date (in addition to the requirements of clauses (x) and (y)
above being satisfied with respect to such Principal
Stockholder), ADL or any direct or indirect subsidiary thereof
(including the Company) shall continue to employ at least
fifty percent (50%) of the employees of the Company listed on
Schedule 1.2(c)(ii). For purposes of this sub-clause (ii),
employees who are hired to replace any employee listed on
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such Schedule shall be counted in order to determine whether
the foregoing requirement has been met. Prior to the third
anniversary of the date hereof, Buyer shall not, and shall
procure that no other subsidiary of ADL shall, make any
material change to the business of the Company, the result of
which shall materially adversely affect the Principal
Stockholders' opportunity to be paid the Contingent Stock.
(iii) The allocation of cash and stock (based on the
total Purchase Price) shall be as follows:
One Year Anniversary - ten percent (10%) cash and three and one-half
percent (3.5%) ADL stock
Two Year Anniversary - ten percent (10%) cash and three and one-half
percent (3.5%) ADL stock
Three Year Anniversary - ten percent (10%) cash and three percent (3%)
ADL stock
Three Year Anniversary - ten percent (10%) ADL stock (the Contingent
Stock)
The ADL common stock shall be valued at fair market value. For purposes of this
Section 1.2(c), "fair market value" shall be the average of the fair market
value per share of the ADL common stock established by the Trustees of the
Xxxxxx X. Xxxxxx, Inc. Employees MDT Retirement Plan and the Trustees of the
Xxxxxx X. Xxxxxx, Inc. Employee Stock Ownership Plan, respectively, as of the
June 30 or December 31 immediately preceding such anniversary date. The ADL
common stock to be issued to the Principal Stockholders shall be subject to the
terms and conditions of a plan to be established by ADL, substantially the same
in form and substance to the plan attached hereto as Exhibit B.
(d) If any accounts receivable or work in progress listed on
the Company's financial statements as of December 31, 1998 (other than accounts
receivable owed to the Company by ADL or any subsidiary thereof), with an
aggregate value in excess of five thousand English pounds (,5,000), is
uncollected within six (6) months after the Closing date, the Principal
Stockholders promptly shall pay such amount to Buyer. Notwithstanding the
foregoing, no such payment by the Principal Stockholders shall be required with
respect to any accounts receivable as to which the applicable creditor confirms
in writing to the Controller of Xxxxxx X. Xxxxxx International, Inc. or the
Company within one month after the Closing the amount of such receivable as of
December 31,1998 and such creditor's intent and ability to pay such receivable
in full. The obligation of the Principal Stockholders under this Section 1.2(d)
shall be joint and several.
1.3 Time and Place of Closing. The closing of the purchase and sale
provided for in this Agreement (herein called the "Closing") shall be held at
the offices of Cambridge Consultants Xxxxxxx, Xxxxxxx Xxxx, Xxxxxx Xxxx,
Xxxxxxxxx XX0 0XX on February 1, 1999 or at such other place or an earlier or
later date or time as may be mutually agreed upon by the parties.
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1.4 Further Assurances. The Principal Stockholders from time to time
after the Closing at the request and expense of Buyer and without further
consideration shall execute and deliver further instruments of transfer and
assignment and take such other action as Buyer may reasonably require to more
effectively transfer and assign to, and vest in, Buyer the Shares and all rights
thereto, and to fully implement the provisions of this Agreement.
ARTICLE 2. REPRESENTATIONS AND WARRANTIES OF THE PRINCIPAL STOCKHOLDERS
REGARDING THE COMPANY.
2.1 Making of Representations and Warranties. As a material inducement
to Buyer to enter into this Agreement and consummate the transactions
contemplated hereby, each of the Principal Stockholders jointly and severally
hereby make to Buyer the representations and warranties contained in this
Article 2; provided, however, that no Principal Stockholder shall have any right
of indemnity or contribution from the Company with respect to any breach of
representation or warranty hereunder.
2.2 Organization and Qualifications of the Company. The Company is a
limited company duly organized, validly existing and in good standing under the
laws of England with full corporate power and authority to own or lease its
properties and to conduct its business in the Manner and in the places where
such properties are owned or leased or such business is currently conducted or
proposed to be conducted. The copy of the Company's Articles of Association, as
amended to date, certified by the Secretary of the Company, and heretofore
delivered to Buyer, is complete and correct, and no amendments thereto are
pending. The Company is not in violation. of any term of its Articles of
Association. The Company is duly qualified to do business in the United Kingdom,
and it is not required to be licensed or qualified to conduct its business in
any other jurisdiction.
2.3 Capital Stock of the Company; Beneficial Ownership. The authorized
share capital of the Company is (pounds)250,000 divided into (i) 24,991,200 "A"
shares, one xxxxx per share, of which 1,200 shares are duly and validly issued
and fully paid, (ii) 400 "B" shares, one xxxxx per share, of which 400 shares
are duly and validly issued and fully paid, and (iii) 8,400 "C" shares, one
xxxxx per share, of which 6,810 shares are duly and validly issued and fully
paid. Except as set forth in Schedule 2.3(a) or in the Company's Articles of
Association, there are no outstanding options, warrants, rights, commitments,
preemptive rights or agreements of any kind for the issuance or sale of, or
outstanding securities convertible into, any additional shares of capital stock
of any class of the Company. None of the Company's capital has been issued in
violation of. any law. There are no voting trusts, voting agreements, proxies or
other instruments or undertakings with respect to the voting of the Company
Shares to which the Company or any of the Principal Stockholders or, to the
knowledge of any Principal Stockholder, any of the Additional Stockholders is a
party.
2.4 Subsidiaries. The Company's subsidiaries and investments in any
other corporation or business organization are listed in Schedule 2.4
(collectively, the "Subsidiaries" or individually, a "Subsidiary"). Except as
set forth in Schedule 2.4, each Subsidiary of the
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Company is a duly organized, validly existing corporation in good standing under
the laws of the country of its incorporation with full corporate power and
authority to own or lease its properties and to conduct its business in the
manner and in the places where such properties are owned or leased or such
business is currently conducted or proposed to be conducted. Except as disclosed
in Schedule 2.4, all of the outstanding shares of capital stock of each
Subsidiary are owned beneficially and of record by the Company free of any lien,
restriction or encumbrance and said shares have been duly and validly issued and
are outstanding, fully paid and non-assessable. The copies of each of the
Subsidiaries' Articles of Association (or comparable documents), as amended to
date, certified by an authorized officer of each jurisdiction in which such
Subsidiaries are organized, and heretofore delivered to Buyer, are complete and
correct, and no amendments thereto are pending. None of the Subsidiaries is in
violation of any term of its Articles of Association (or comparable document).
Each Subsidiary is duly qualified to do business in each jurisdiction where such
qualification is required and it is not required to be licensed or qualified to
conduct its business or own its property in any other jurisdiction. There are no
outstanding warrants, options or other rights to purchase or acquire any of the
shares of capital stock of any Subsidiary, or any outstanding securities
convertible into such shares or outstanding warrants, options or other rights to
acquire any such convertible securities. Except as disclosed in Schedule 2.4,
Contactica, Inc., the Company's United States subsidiary, is dormant and
currently has no assets or operations.
2.5 Authority of the Company. Any action required to be taken by the
Company in connection with the transactions contemplated by this Agreement has
been duly authorized by all necessary action of the Company and no other action
on the part of the Company or its stockholders is required in connection
therewith. The execution, delivery and performance by the Principal Stockholders
of this Agreement and each agreement, document and instrument contemplated
hereby:
(i) does not and will not violate any provision of
the Articles of Association of the Company;
(ii) does not and will not require the Company to
obtain any approval, consent or waiver of, or make any filing
with, any person or entity (governmental or otherwise) that
has not been obtained or made; and
(iii) does not and will not result in a breach of,
constitute a default under, accelerate any obligation under,
or give rise to a right of termination of any indenture or
loan or credit agreement or any other agreement, instrument,
lease, permit, authorization, order, judgment, injunction,
decree, determination or arbitration award to which the
Company is a party or by which the property of the Company is
bound or affected, or result in the creation or imposition of
any mortgage, pledge, lien, security interest or other charge
or encumbrance on any of the Company's assets or the Company
Shares.
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2.6 Real and Personal Property.
(a) Real Property. The Company does not own any freehold real
property. All of the leasehold real property leased by the Company or any of its
Subsidiaries is identified on Schedule 2.6(a) (collectively, the "Leased Real
Property"). True and complete copies of all leases with respect to the Leased
Real Property have been delivered to Buyer. Each of said leases has been duly
authorized and executed by the parties and is in full force and effect. Neither
the Company nor any of its Subsidiaries is in default under any of said leases,
nor, to the knowledge of any Principal Stockholder, has any event occurred
which, with notice or the passage of time, or both, would give rise to such a
default. To the knowledge of any Principal Stockholder, the other party to each
of said leases is not in default under any of said leases and there is no event
which, with notice or the passage of time, or both, would give rise to such a
default. Neither the Company nor any of its Subsidiaries has at any time
assigned or otherwise disposed of any property, leasehold or otherwise, in
respect of which it has a continuing liability (contingent or otherwise) for
payment of rent and/or any other liability. Except as set forth in Schedule
2.6(a), no consent or approval is required with respect to the transactions
contemplated by this Agreement from the other parties to any lease of Leased
Real Property or from any regulatory authority in the United Kingdom or Hong
Kong relating to the transfer of a leasehold interest in real property and no
filing with any such regulatory authority is required in connection therewith.
To the extent that any such consents, approvals or filings are required, the
Company or the Principal Stockholders will obtain or complete them before the
Closing.
(b) Personal Property. A complete description of the equipment
of the Company and each of its Subsidiaries is contained in Schedule 2.6(b)
hereto. Except as specifically disclosed in said Schedule or in the 1997
Financials (as hereinafter defined), the Company and each of its Subsidiaries
has good and marketable title to all of its personal property. None of such
personal property or assets is subject to any mortgage, pledge, lien or
encumbrance except as specifically disclosed in said Schedule or in the 1997
Financials. Except as otherwise specified in Schedule 2.6(b) hereto, all
leasehold improvements, furnishings and equipment of the Company and each of its
Subsidiaries are in good working order and substantially comply with all
applicable laws, ordinances and regulations.
2.7 Financial Statements.
(a) The Company has delivered to Buyer the following financial
statements:
(i) Balance sheet of the Company for its fiscal year
ending on December 31, 1995 and statements of income, retained
earnings and cash flows for the year then ended, audited by
Xxxxxx Xxxxxxxx & Xxxxx, chartered accountants;
(ii) Consolidated and consolidating (as applicable)
balance sheets of the Company and Contactica Inc. for its
fiscal year ending on December 31, 1996
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and statements of income, retained earnings and cash flows for
the year then ended, audited by Price Xxxxxx, chartered
accountants;
(iii) Balance sheet of Contactica Asia Limited for
the period ending on December 31, 1996 and statements of
income, retained earnings and cash flows for the period then
ended, audited by Y.Y. Chow & Co., certified public
accountants;
(iv) Balance sheet of the Company for its fiscal year
ending on December 31, 1997 and statements of income, retained
earnings and cash flows for the year then ended, audited by
Price Xxxxxx, chartered accountants.
(v) Balance sheet of Contactica Asia Limited for its
fiscal year ending on December 31, 1997 and statements of
income, retained earnings and cash flows for the year then
ended, audited by Y.Y. Chow & Co., certified public
accountants; and
(vi) Consolidated and consolidating unaudited balance
sheets of the Company and its Subsidiaries as of November 30,
1998 and statements of income, retained earnings and cash
flows for the period then ended, certified by the Company's
chief financial officer.
The financial statements referred to in clauses (i) through (v) above
have been prepared in accordance with generally accepted accounting principles
applied consistently during the periods covered thereby and present a true and
fair view of the financial condition of the Company and each of its Subsidiaries
at the dates of said statements and the results of its operations for the
periods covered thereby. The financial statements referred to in clause (vi)
above give a fair representation of the financial condition of the Company and
its Subsidiaries as of the date thereof. The financial statements referred to in
clauses (iv) and (v) above are referred to herein collectively as the "1997
Financials".
(b) As of the date of the 1997 Financials, neither the Company
nor any Subsidiary had any liabilities of any nature, whether accrued, absolute,
contingent or otherwise, asserted or unasserted, known or unknown (including
without limitation, liabilities as guarantor or otherwise with respect to
obligations of others, liabilities for taxes due or then accrued or to become
due, or contingent or potential liabilities relating to activities of the
Company or any Subsidiary or the conduct of their business prior to the date of
the 1997 Financials regardless of whether claims in respect thereof had been
asserted as of such date), except liabilities stated or adequately reserved
against on the 1997 Financials, or reflected in Schedules furnished to Buyer
hereunder as of the date hereof.
(c) As of the date hereof, neither the Company nor any
Subsidiary has had and will have any liabilities of any nature, whether accrued,
absolute, contingent or otherwise, asserted or unasserted, known or unknown
(including without limitation, liabilities as
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guarantor or otherwise with respect to obligations of others, or liabilities for
taxes due or then accrued or to become due or contingent or potential
liabilities relating to activities of the Company or any Subsidiary or the
conduct of their business prior to the date hereof, regardless of whether claims
in respect thereof had been asserted as of such date), except liabilities (i)
stated or adequately reserved against on the 1997 Financials or the notes
thereto, (ii) reflected in Schedules furnished to Buyer hereunder on the date
hereof, or (iii) incurred after the date of the 1997 Financials in the ordinary
course of business of the Company or any Subsidiary consistent with the terms of
this Agreement.
2.8 Taxes. The Company and each of its Subsidiaries have filed all tax
returns and reports which are required to be filed with any domestic or foreign
governmental authority or agency, and has paid, or made adequate provision for
the payment of, all assessments received and all taxes which have or may become
due under applicable domestic or foreign governmental law or regulations with
respect to all periods prior to the Closing Date. For each taxable period of the
Company and its Subsidiaries ended on or after December 31, 1993, the Company
has delivered to Buyer correct and complete copies of all domestic and foreign
income tax returns, examination reports and statements of deficiencies assessed
against or agreed to by the Company or any of its Subsidiaries. No governmental
authority is now asserting or, to the knowledge of any Principal Stockholder,
threatening to assert against the Company or any Subsidiary any deficiency or
claim for additional taxes. No claim has ever been made by an authority in a
jurisdiction where the Company or any Subsidiary does not file reports and
returns that the Company or such Subsidiary is or may be subject to taxation by
that jurisdiction. Except as set forth in Schedule 2.8 attached hereto, there
has not been any audit of any tax return filed by the Company or any Subsidiary,
no such audit is in progress, and neither the Company nor any Subsidiary has
been notified by any tax authority that any such audit is contemplated or
pending. Save as provided for in the 1997 Financials or incurred in the ordinary
course of business since the date thereof, there is no existing contingent or
deferred liability for taxes and no material changes in the assets and
liabilities as shown in the 1997 Financials have occurred, other than in the
ordinary course of business, since the date thereof which might result in any
such liability. Except as set forth on Schedule 2.8 hereto, the operations and
transactions for which the Company and its Subsidiaries will be subject to tax
for the period since the date of the 1997 Financials are, in all material
respects, similar in form and substance to the operations and transactions for
which the Company and its Subsidiaries were taxed for the year ended December
31, 1997. Neither the Company nor any of its Subsidiaries have entered into or
been engaged in or been a party to any transaction or series of transactions or
schemes or arrangements of which the main purpose or one of the main purposes
was the avoidance or deferral or reduction of tax liability and none of such
companies have entered into any transaction or arrangement in respect of which
the provisions of Section 770 of the United Kingdom Income and Corporation Taxes
Act 1988 ("Taxes Act") has been or could be applied.
2.9 Receivables from Affiliates. Except as disclosed on Schedule 2.9
hereto, neither the Company nor any Subsidiary has any accounts or loans
receivable from any person, firm or corporation which is affiliated with the
Company or any Subsidiary or from any
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director, officer or employee of the Company or any Subsidiary, and all accounts
and loans receivable from any such person, firm or corporation shall be paid in
cash prior to the Closing.
2.10 Absence of Certain Changes. Except as disclosed in Schedule 2.7
and 2.10 attached hereto, since the date of the 1997 Financials there has not
been:
(a) Any material adverse change in the financial condition,
prospects, properties, assets, liabilities, business or operations of the
Company or any of its Subsidiaries;
(b) Any contingent liability incurred by the Company or any of
its Subsidiaries as guarantor or otherwise with respect to the obligations of
others or any cancellation of any material debt or claim owing to, or waiver of
any material right of, the Company or any of its Subsidiaries;
(c) Any mortgage, encumbrance or lien placed on any of the
properties or assets of the Company or any of its Subsidiaries which remains in
existence on the date hereof or will remain on the Closing Date;
(d) Any obligation or liability of any nature, whether
accrued, absolute, contingent or otherwise, asserted or unasserted, known or
unknown (including without limitation liabilities for taxes due or to become due
or contingent or potential liabilities relating to products or services provided
by the Company or any of its Subsidiaries or the conduct of the business of the
Company or any of its Subsidiaries since the date of the 1997 Financials,
regardless of whether claims in respect thereof have been asserted), incurred by
the Company or any of its Subsidiaries other than obligations and liabilities
incurred in the ordinary course of business consistent with the terms of this
Agreement (it being understood that product or service liability claims shall
not be deemed to be incurred in the ordinary course of business);
(e) Any purchase, sale or other disposition, or any agreement
or other arrangement for the purchase, sale or other disposition, of any of the
properties or assets of the Company or any of its Subsidiaries other than in the
ordinary course of business;
(f) Any damage, destruction or loss, whether or not covered by
insurance, materially and adversely affecting the properties, assets or business
of the Company or any of its Subsidiaries;
(g) Any declaration, setting aside or payment of any dividend
by the Company or any of its Subsidiaries, or the making of any other
distribution in respect of the share capital of the Company or any of its
Subsidiaries, or any direct or indirect redemption, purchase or other
acquisition by the Company or any of its Subsidiaries of its own capital;
(h) Any labor trouble or claim of unfair labor practices
involving the Company or any of its Subsidiaries; any change in the compensation
payable or to become payable by the Company or any of its Subsidiaries to any of
its officers, employees, agents or
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independent contractors other than normal merit increases in accordance with its
usual practices; or any bonus payment or arrangement made to or with any of such
officers, employees, agents or independent contractors;
(i) Any change with respect to the officers or management of
the Company or any of its Subsidiaries;
(j) Any payment or discharge of a material lien or liability
of the Company or any of its Subsidiaries which was not shown on the 1997
Financials or incurred in the ordinary course of business thereafter;
(k) Any obligation or liability incurred by the Company or any
of its Subsidiaries to any of its officers, directors, stockholders or
employees, or any loans or advances made by the Company or any of its
Subsidiaries to any of its officers, directors, stockholders or employees,
except normal compensation and expense allowances payable to officers or
employees;
(l) Any change in accounting methods or practices, credit
practices or collection policies used by the Company or any of its Subsidiaries;
(m) Any other transaction entered into by the Company or any
of its Subsidiaries other than transactions in the ordinary course of business;
or
(n) Any agreement or understanding whether in writing or
otherwise, for the Company or any of its Subsidiaries to take any of the actions
specified in paragraphs (a) through (m) above.
2.11 Ordinary Course. Except as disclosed in Schedule 2.11, Since the
date of the 1997 Financials, the Company and each of its Subsidiaries has
conducted its business only in the ordinary course and consistently with its
prior practices.
2.12 Banking Relations. All of the arrangements which the Company or
any of its Subsidiaries has with any banking institution are accurately
described in Schedule 2.12 attached hereto, indicating with respect to each of
such arrangements the type of arrangement maintained (such as checking account,
borrowing arrangements, safe deposit box, etc.) and the person or persons
authorized in respect thereof.
2.13 Intellectual Property.
(a) All trademarks and trademark applications and
registrations which are owned by the Company or any of its Subsidiaries or used
or to be used by the Company or any of its Subsidiaries in their businesses as
presently conducted or contemplated are listed in Schedule 2.13(a). All of such
trademark registrations and trademark applications have been duly registered in,
filed in or issued by the appropriate governmental authorities as identified
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on said Schedule, and have been properly maintained and renewed in accordance
with all applicable provisions of law and administrative regulations of each
such governmental authority's jurisdiction. Neither the Company nor any of its
Subsidiaries owns or licenses any patents or patent applications.
(b) Neither the Company nor any of its Subsidiaries nor any
Principal Stockholder has received notice of any claim or demand pertaining to
copyright, trade secret, trademark, or other proprietary rights (collectively,
"Intellectual Property") used in the business of the Company or such Subsidiary
as presently conducted or contemplated and no proceedings have been instituted,
or are pending or, to the knowledge of any Principal Stockholder, threatened,
which challenge the rights of the Company or any Subsidiary in respect thereof.
(c) The Company has not licensed any Intellectual Property
from any third party (other than off-the-shelf computer software) and has not
granted rights to others in Intellectual Property owned by the Company or any
Subsidiary.
(d) The Company and each of its Subsidiaries has required all
professional and technical employees and other employees having access to
valuable non-public information of Company and its Subsidiaries, to execute
agreements under which such employees are required to convey to the Company or a
Subsidiary ownership of all inventions and developments conceived or created by
them in the course of their employment and to maintain the confidentiality of
all such information of Company and its Subsidiaries. No Principal Stockholder
has any knowledge of any infringement by others of any Intellectual Property
rights of the Company or any Subsidiary.
(e) Neither the Company nor any of its Subsidiaries nor any of
the Principal Stockholders has received any notice that the present and
contemplated business and activities of the Company and its Subsidiaries
infringe any Intellectual Property of any other person or that the Company or
any of its Subsidiaries is making unauthorized use of any confidential
information or trade secrets of any person, including without limitation, any
former employer of any past or present employee of Company or any of its
Subsidiaries. No proceeding charging the Company or any of its Subsidiaries with
infringement of any adversely held Intellectual Property has been filed and
served on the Company or any of its Subsidiaries or, to the knowledge of any
Principal Stockholder, has been filed or is threatened to be filed. Except as
set forth in Schedule 2.13(e), neither the Company or any Subsidiary nor, to the
knowledge of any Principal Stockholder, any of their employees have any
agreements or arrangements with any persons other than the Company or its
Subsidiaries restricting any such employee's ability to engage in business
activities of any nature. The activities of their employees on behalf of the
Company or any Subsidiary do not violate any such agreements or arrangements
known to any Principal Stockholder.
2.14 Contracts. Except for contracts, commitments, plans, agreements
and licenses described in Schedule 2.14 or any other schedule delivered pursuant
to this Agreement, neither the Company nor any of its Subsidiaries is a party to
or subject to:
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(a) any plan, contract or scheme providing for bonuses,
pensions, options, stock purchases, deferred compensation, retirement payments,
profit sharing, collective bargaining or the like, or any contract or agreement
with any labor union;
(b) any employment contract or contract for services which is
not terminable within 30 days by the Company or a Subsidiary without liability
for any penalty or severance or other payment;
(c) any contract or agreement for the purchase of any
commodity, material or equipment except purchase orders in the ordinary course
for less than (pounds)5,000 each, such orders not exceeding (pounds)50,000 in
the aggregate;
(d) any other contracts or agreements creating any obligations
of the Company or any of its Subsidiaries of ,10,000 or more with respect to any
such contract or agreement not specifically disclosed elsewhere under this
Agreement;
(e) any contract or agreement providing for the purchase of
all or substantially all of its requirements of a particular product from a
supplier;
(f) any contract or agreement which by its terms does not
terminate or is not terminable without penalty by the Company or a Subsidiary
within one year after the date hereof;
(g) any contract or agreement for the provision of services
not made in the ordinary course of business;
(h) any contract containing covenants limiting the freedom of
the Company or any of its Subsidiaries to compete in any line of business or
with any person or entity;
(i) any license agreement (as licensor or licensee), other
than off-the-shelf computer software;
(j) any indenture, mortgage, promissory note, loan agreement,
guaranty or other agreement or commitment for the borrowing of money; or
(k) any contract or agreement with any officer, employee,
director or stockholder of the Company or any of its Subsidiaries or with any
persons or organizations controlled by or affiliated with any of them.
Neither the Company nor any of its Subsidiaries is in default in any
material respect under any such contracts, commitments, plans, agreements or
licenses and no Principal Stockholder has any knowledge of conditions or facts
which with notice or passage of time, or both, would constitute a default.
12
2.15 Litigation. Except as set forth on Schedule 2.15 hereto, there is
no litigation or governmental or administrative proceeding or investigation
pending or, to the knowledge of any Principal Stockholder, threatened against
the Company or any of its Subsidiaries or their affiliates.
2.16 Compliance with Laws. The Company and each of its Subsidiaries is
in compliance with all applicable statutes, ordinances, orders, judgements,
decrees, rules and regulations promulgated by any domestic or foreign entity,
agency, court or other governmental authority which apply to the Company or any
Subsidiary or to the conduct of its business, and neither the Company nor any of
its Subsidiaries has received notice of a violation or alleged violation of any
such statute, ordinance, order, rule or regulation.
2.17 Insurance. The physical properties and assets of the Company and
each of its Subsidiaries are insured to the extent disclosed in Schedule 2.17
attached hereto and all such insurance policies and arrangements are disclosed
in said Schedule. Said insurance policies and arrangements are in full force and
effect, all premiums with respect thereto are currently paid, and the Company
and each of its Subsidiaries is in compliance in all material respects with the
terms thereof Said insurance is adequate and customary for the business engaged
in by the Company and each Subsidiary and is sufficient for compliance by the
Company and each Subsidiary with all requirements of law and all agreements and
leases to which the Company or any Subsidiary is a party.
2.18 Warranty or Other Claims. No claim has been asserted against the
Company or any of its Subsidiaries with respect to the provision of services by
any of them of services or their failure to meet any applicable warranties and,
to the knowledge of any Principal Stockholder, there are no facts upon which any
such claim could be based.
2.19 Powers of Attorney. Neither the Company, any Subsidiary or any
Principal Stockholder has any outstanding power of attorney.
2.20 Finder's Fee. Neither the Company nor any of its Subsidiaries has
incurred or become liable for any broker's commission or finder's fee relating
to or in connection with the transactions contemplated by this Agreement.
2.21 Permits. Schedule 2.21 lists all permits, registrations, licenses
(other than licenses for off-the-shelf computer software), franchises,
certifications and other approvals (collectively, the "Approvals") required from
domestic or foreign authorities in order for the Company and each of its
Subsidiaries to conduct its business. Except as disclosed in Schedule 2.21, the
Company and each of its Subsidiaries have obtained all such Approvals, which are
valid. and in full force and effect, and, to the knowledge of any Principal
Stockholder, is operating in compliance therewith. Such Approvals include, but
are not limited to, those required under domestic or foreign statutes,
ordinances, orders, requirements, rules, regulations, or laws pertaining to
environmental protection, public health and safety, worker health and safety,
buildings, highways or zoning.
13
2.22 Corporate Records, Copies of Documents. The corporate record books
of the Company and each of its Subsidiaries accurately record all corporate
action taken by their respective stockholders and board of directors and
committees. The Company has made available for inspection and copying by Buyer
true and correct copies of all documents referred to in this Section or in the
Schedules delivered to Buyer pursuant to this Agreement.
2.23 Transactions with Interested Persons. Except as set forth in
Schedule 2.23 hereto, neither the Company, any of its Subsidiaries, any
stockholder, officer, supervisory employee or director of the Company or any of
its Subsidiaries or, to the knowledge of any Principal Stockholder, any of their
respective spouses or family members, owns directly or indirectly on an
individual or joint basis any material interest in, or serves as an officer or
director or in another similar capacity of, any competitor or supplier of
Company or any of its Subsidiaries, or any organization which has a material
contract or arrangement with the Company or any of its Subsidiaries.
2.24 Employee Benefit Programs. Other than the Contactica Retirement
and Death Benefit Scheme dated August 25, 1994 (the "Pension Scheme"), there are
no pension or similar schemes or arrangements for any employees or directors of
the Company or any Subsidiary, and neither the Company nor any Subsidiary nor
any stockholder thereof has any obligation (whether legally binding or
established by custom) to pay any pension or make any other payment after
retirement or death or otherwise to provide "relevant benefits" or to make any
payment for the purpose of providing "relevant benefits" within the meaning of
Section 612 of the Taxes Act to or in respect of any such persons and are not
party to any scheme or arrangement having as its purpose or one of its purposes
the making of such payments or the provision of such benefits. The Principal
Stockholders have disclosed to Buyer details of all benefits payable or
prospectively payable under the Pension Scheme to or in respect of all active
members, pensioners and deferred pensioners, including any augmentations of
benefits and have supplied to Buyer true and correct copies of all trust deeds,
rules, resolutions, announcements, and booklets relating to the Pension Scheme.
The Pension Scheme complies with and has at all times complied with the
provisions of the Pensions Xxx 0000 and all other relevant legislation and the
requirements of the Pension Schemes Office and the Contributions Agency
affecting schemes approved under Chapter I of Part XIV of the Taxes Act and
contracted-out under the Xxxxxxx Xxxxxxx Xxx 0000. Except as disclosed in
Schedule 2.24 hereto, the Pension Scheme has been funded to the extent required
by the terms thereof and in accordance with any applicable agreements between
the Company and any of its employees. No employers other than the Company
participate in the Pension Scheme. There are no current submissions or referrals
to the Pensions Ombudsman or to the Occupational Pensions Advisory Service in
respect of the Company or any Subsidiary or the Pension Scheme and neither the
Company. the Trustees of the Pension Scheme nor the Pension Scheme is engaged in
any litigation or arbitration proceedings in respect of the Pension Scheme or
the provision of any relevant benefits (as defined in Section 612 of the Taxes
Act). There are no outstanding. payments or penalties payable or awarded against
the Company, the Trustees of the Pension Scheme or the Pension Scheme in respect
*of any determinations of the Occupational Pensions Regulatory Authority. No
retirement benefits scheme (as defined in Section 611 of the Taxes
14
Act) in which employees or former employees of the Company or any Subsidiary
participate or have participated has been or is in the process of being (or is
proposed to be) wound up (in whole or in part) or closed to new entrants (in
whole or in part). The Pension Scheme does not hold any employer-related
investments within the meaning of Section 40 of the Pensions > Xxx 0000. All
amounts due to the Pension Scheme or to any insurance company which are payable
by the Company or any employee in connection with it have been paid promptly.
2.25 Environmental Matters. Except as set forth in Schedule 2.25
hereto, (i) neither the Company nor any of its Subsidiaries has ever generated,
transported, used, stored, treated, disposed of, or managed any hazardous
material; (ii) to the knowledge of any Principal Stockholder, no hazardous
material has ever been or is threatened to be spilled, released, or disposed of
at, or has otherwise contaminated, any site presently or formerly owned,
operated, leased, or used by the Company or any of its Subsidiaries, or has ever
been located in the soil or groundwater at any such site during the period that
the Company or such Subsidiary leased or occupied such site; (iii) to the
knowledge of any Principal Stockholder, neither the Company nor any of its
Subsidiaries has any liability under, nor has it ever violated, any
Environmental Law (as defined below); and (iv) to the knowledge of any Principal
Stockholder, the Company and each of its Subsidiaries, any property owned,
operated, leased, or used by any of them, and any facilities and operations
thereon, are presently in compliance with all applicable Environmental Laws. For
purposes of this Section 2.25, "Environmental Law" shall mean any environmental
or health and safety-related law, regulation, rule, ordinance, or by-law at the
foreign, federal, state, or local level existing as of the date hereof.
2.26 List of Directors, Officers and Employees. Schedule 2.26 hereto
contains a true and complete list of all current directors, officers and
employees of the Company and each of its Subsidiaries. In each case, such
Schedule includes the current job title and aggregate annual compensation of
each such individual.
2.27 Backlog. As of the date hereof, the Company and each of its
Subsidiaries has a backlog of signed contracts or purchase orders for the
provision of services, for which revenues have not been recognized by the
Company or any Subsidiary, as set forth in Schedule 2.27. Notwithstanding the
foregoing, the Principal Stockholders make no representation that the amounts
set forth on such Schedule actually will be paid to the Company or any
Subsidiary.
2.28 Employees; Labor Matters. Neither the Company nor any of its
Subsidiaries is delinquent in payments to any of its employees for any wages,
salaries, commissions, bonuses or other direct compensation for any services
performed for it to the date hereof or amounts required to be reimbursed to such
employees. Upon termination of the employment of any of said employees, neither
the Company, any Subsidiary nor Buyer will by reason of the transactions
contemplated under this Agreement or anything done prior to the Closing be
liable to any of said employees for so-called "severance pay" or any other
payments, except, as regards statutory redundancy payments, as set forth in
Schedule 2.28. Neither the Company nor any Subsidiary has any policy, practice,
plan or program of paying any form of severance compensation in connection with
the termination of employment, except as set forth in said
15
Schedule. The Company and each of its Subsidiaries is in compliance with all
applicable laws and regulations respecting labor, employment, fair employment
practices, work place safety and health, terms and conditions of employment, and
wages and hours. There are no charges of employment discrimination or unfair
labor practices, nor are there any strikes, slowdowns, stoppages of work, or any
other concerted interference with normal operations which are existing, pending
or threatened against or involving the Company or any of its Subsidiaries. No
question concerning representation exists respecting any employees of the
Company or any of its Subsidiaries. There are no grievances, complaints or
charges that have been filed against the Company or any of its Subsidiaries, and
there is no arbitration or similar proceeding pending and no claim therefor has
been asserted. No collective bargaining agreement is in effect or is currently
being or is about to be negotiated by the Company or any of its Subsidiaries.
Neither the Company nor any of its Subsidiaries has received any information
indicating that any of its employment policies or practices is currently being
audited or investigated by any domestic or foreign government agency. Neither
the Company nor any Subsidiary has given notice of any redundancies to the
Secretary of State or started consultations with any independent trade union or
employees' representatives within the one year period prior to the date hereof.
No circumstances have arisen under which the Company or any Subsidiary is likely
to be required to pay damages for wrongful dismissal, to make any statutory
redundancy payment or make or pay any compensation in respect of unfair
dismissal, or make any other payment under any employment protection or other
employment statutes, treaties, regulations, by-laws, codes or orders, or to
reinstate or re-engage any former employee.
2.29 Customers, Contractors and Suppliers. No customer, contractor or
supplier has notified the Company or any Subsidiary during the last twelve
months that it will no longer purchase services from or provide services,
supplies or materials to the Company or any such Subsidiary and, to the
knowledge of any Principal Stockholder, no customer, contractor or supplier has
any plan or intention to do so.
2.30 Stock Repurchase. Neither the Company nor any Subsidiary has
redeemed or repurchased any of its capital stock.
ARTICLE 3. REPRESENTATIONS AND WARRANTIES OF STOCKHOLDERS.
As a material inducement to Buyer to enter into this Agreement and
consummate the transactions contemplated hereby, each Principal Stockholder
hereby severally makes to Buyer each of the representations and warranties set
forth in this Article 3 with respect to such Principal Stockholder. No Principal
Stockholder shall have any right of indemnity or contribution from the Company
or any Subsidiary with respect to the breach of any representation or warranty
hereunder.
3.1 Shares. Such Principal Stockholder owns of record and beneficially
the number of Shares set forth opposite such Principal Stockholder's name in
Exhibit A. Such Shares are, and when delivered by such Principal Stockholder to
Buyer pursuant to this Agreement will be,
16
duly and validly issued, fully paid and free and clear of any and all liens,
encumbrances, charges or claims.
3.2 Authority. Such Principal Stockholder has full right, authority,
power and capacity to enter into this Agreement and each agreement, document and
instrument to be executed and delivered by or on behalf of such Principal
Stockholder pursuant to this Agreement and to carry out the transactions
contemplated hereby and thereby. This Agreement and each agreement, document and
instrument executed and delivered by such Principal Stockholder pursuant to this
Agreement constitutes a valid and binding obligation of such Principal
Stockholder, enforceable in accordance with their respective terms, and such
Principal Stockholder has full power and authority to transfer, sell and deliver
his Shares to Buyer pursuant to this Agreement. The execution, delivery and
performance of this Agreement and each such agreement, document and instrument:
(i) does not and will not violate any laws of the
United Kingdom or other jurisdiction applicable to such
Principal Stockholder, or require such Principal Stockholder
to obtain any approval, consent or waiver from, or make any
filing with, any person or entity (governmental or otherwise)
that has not been obtained or made; and
(ii) does not and will not result in a breach of,
constitute a default under, accelerate any obligation under,
or give rise to a right of termination of, any indenture or
loan or credit agreement or any other agreement, instrument,
lease, permit, authorization, order, judgment, injunction,
decree, determination or arbitration award to which such
Principal Stockholder is a party or by which the property of
such Principal Stockholder is bound or affected, or result in
the creation or imposition of any mortgage, pledge, lien,
security interest or other charge or encumbrance on any assets
of the Company or any Subsidiary or on the Shares owned by
such Principal Stockholder.
3.3 Finder's Fee. Such Principal Stockholder has not incurred or become
liable for any broker's commission or finder's fee relating to or in connection
with the transactions contemplated by this Agreement.
3.4 Agreements. Such Principal Stockholder is not a party to any
non-competition, trade secret or confidentiality agreement with any party other
than the Company or a Subsidiary. There are no agreements or arrangements not
contained herein or disclosed in a Schedule hereto, to which such Principal
Stockholder is a party relating to the business of the Company or any Subsidiary
or to such Principal Stockholder's rights and obligations as a stockholder,
director or officer of the Company or any Subsidiary. Except as disclosed in
Schedule 2.23, such Principal Stockholder does not own, directly or indirectly,
on an individual or joint basis, any material interest in, or serve as an
officer or director of, any customer, competitor or supplier of the Company or
any Subsidiary, or any organization which has a contract or arrangement with the
Company or any Subsidiary. Such Principal Stockholder
17
has not at any time transferred any of the stock of the Company or any
Subsidiary held by or for such holder to any employee of the Company or any
Subsidiary, which transfer constituted or could be viewed as compensation for
services rendered to the Company or any Subsidiary by said employee. The
execution, delivery and performance of this Agreement will not violate or result
in a default or acceleration of any obligation under any contract, agreement,
indenture or other instrument involving the Company or any Subsidiary to which
such Stockholder is a party.
ARTICLE 4. COVENANTS OF THE PRINCIPAL STOCKHOLDERS.
4.1 Making of Covenants and Agreements. The Principal Stockholders
jointly and severally hereby make the covenants and agreements set forth in this
Article 4. No Principal Stockholder shall have any right of indemnity or
contribution from the Company or any Subsidiary with respect to the breach of
any covenant or agreement hereunder.
4.2 Non-competition. For a period of two (2) years after the date
hereof, each Principal Stockholder agrees that he will not, without the prior
written consent of Buyer, directly or indirectly, engage or participate in, be
employed by or assist in any manner or in any capacity, or have any interest in
or make any loan to any person, firm, corporation or business which engages in
any Competing Activity (as defined below) anywhere in the world that the Company
currently engages in business. For purposes of this Section 4.2, "Competing
Activity" shall mean any activity which is similar to or competitive with any
business in which the Company or any Subsidiary is engaged during such two year
period. The foregoing shall not prevent a Principal Stockholder from owning
beneficially or of record up to one percent of the outstanding securities of a
publicly-held corporation which engages in any Competing Activity. In addition,
during such period, each Principal Stockholder shall refrain from soliciting or
encouraging any employee of Buyer, the Company or any Subsidiary to terminate
his or her employment by Buyer, the Company or any Subsidiary and to become
employed by such Principal Stockholder, or any business or entity with which
such Principal Stockholder is affiliated as an owner, investor, lender or in any
other capacity. In addition, during such period, each Principal Stockholder
shall refrain from soliciting or encouraging any customer of Buyer, the Company
or any Subsidiary to terminate or alter its relationship with Buyer, the Company
or any Subsidiary.
4.3 Tax Returns. The Principal Stockholders shall cooperate with Buyer
to permit the Company and its Subsidiaries in accordance with applicable law to
promptly prepare and file on or before the due date or any extension thereof all
domestic and foreign tax returns required to be filed by the Company and its
Subsidiaries with respect to taxable periods ending on or before the Closing.
18
ARTICLE 5. REPRESENTATIONS AND WARRANTIES OF BUYER.
5.1 Making of Representations and Warranties. As a material inducement
to the Principal Stockholders to enter into this Agreement and consummate the
transactions contemplated hereby, Buyer hereby makes the representations and
warranties to the Principal Stockholders contained in this Article 5.
5.2 Organization of Buyer. Buyer is a corporation duly organized,
validly existing and in good standing under the laws of the Commonwealth of
Massachusetts with full corporate power to own or lease its properties and to
conduct its business in the manner and in the places where such properties are
owned or leased or such business is conducted by it.
5.3 Authority of Buyer. Buyer has full right, authority and power to
enter into this Agreement and each agreement, document and instrument to be
executed and delivered by Buyer pursuant to this Agreement and to carry out the
transactions contemplated hereby. The execution, delivery and performance by
Buyer of this Agreement and each such other agreement, document and instrument
have been duly authorized by all necessary corporate action of Buyer and no
other action on the part of Buyer is required in connection therewith. This
Agreement and each other agreement, document and instrument executed and
delivered by Buyer pursuant to this Agreement constitute, or when executed and
delivered will constitute, valid and binding obligations of Buyer enforceable in
accordance with their terms.
5.4 Litigation. There is no litigation pending or, to its knowledge,
threatened against Buyer which would prevent or hinder the consummation of the
transactions contemplated by this Agreement.
5.5 Finder's Fee. Buyer has not incurred or become liable for any
broker's commission or finder's fee relating to or in connection with the
transactions contemplated by this Agreement.
ARTICLE 6.
Intentionally omitted.
ARTICLE 7. CONDITIONS.
7.1 Conditions to the Obligations of Buyer. The obligation of Buyer to
consummate this Agreement and the transactions contemplated hereby are subject
to the fulfillment, prior to or at the Closing, of the following conditions
precedent:
(a) Certified Articles of Association. The Principal
Stockholders shall have delivered to Buyer a copy of the Company's Articles of
Association, as amended to date, certified by the Secretary of the Company.
19
(b) Consents. The Company or the Principal Stockholders shall
have made all filings with and notifications of governmental authorities,
regulatory agencies and other entities required to be made by the Company, its
Subsidiaries or the Principal Stockholders in connection with the execution and
delivery of this Agreement and the performance. of the transactions contemplated
hereby; and the Company, the Principal Stockholders and Buyer shall have
received all authorizations, waivers, consents and permits, in form and
substance reasonably satisfactory to Buyer, from all third parties, including,
without limitation, applicable governmental authorities, regulatory agencies,
lessors, lenders and contract parties, required to permit the consummation of
the transactions contemplated by this Agreement.
(c) Employment Agreements. Each of the Principal Stockholders
shall have executed and delivered to Buyer an Employment Agreement in
substantially the form of Exhibit C attached hereto.
(d) Releases. The Principal Stockholders shall have delivered
to Buyer general releases signed by each of the Selling Stockholders and by each
officer and Director of the Company and each Subsidiary of all claims which any
of them have against the Company and any Subsidiary in the form attached hereto
as Exhibit D.
(e) Options. the Principal Stockholders shall have delivered
to Buyer evidence satisfactory to Buyer that all outstanding options to purchase
stock of the Company shall have been canceled prior to the Closing Date or shall
be exercised immediately following the Closing.
(f) AS Agreement. The Principal Stockholders shall have
delivered to Buyer evidence satisfactory to Buyer that immediately following the
Closing, the Additional Stockholders shall execute and deliver the AS Agreement
to Buyer.
(g) Status of Subsidiaries. Prior to the Closing, (i) the
Company shall divest itself of any interest or ownership in Contactica-Axis
Limited, a United Kingdom limited company, and (ii) Contactica Asia Limited
shall divest itself of any interest or ownership in Contactica Dealing Room
System Limited. The Company shall structure such transactions such that, as a
result thereof, neither the Company nor Contactica Asia Limited shall have any
liabilities or obligations with respect to such divested entities, including but
not limited to liabilities for taxes or as guarantors. For the avoidance of
doubt, Buyer acknowledges the obligations of the Company to Contactica Axis
Limited pursuant to the License Agreement referred to in Schedule 2.23.
ARTICLE 8. COVENANT IN RESPECT OF TAX.
8.1 Construction of Terms. In this Article 8, unless the context
otherwise requires:
20
(a) "Accounts" means the Group's audited financial
statements, including the 1997 Financials;
(b) "event" includes (without limitation) any omission, event,
action or transaction, whether or not any member of the Group is a party
thereto, the death of any person, a change in the residence of any person for
any tax purpose, a failure to make sufficient dividend payments to avoid an
apportionment or deemed distribution of income;
(c) "Group" means the Company, together with its Subsidiaries;
(d) "relief" includes (without limitation) any relief,
allowance, credit, set off, deduction or exemption for any tax purpose;
(e) reference to income or profits or gains earned, accrued or
received shall include income or profits or gains deemed to have been or treated
as or regarded as earned, accrued or received for the purposes of any
legislation;
(f) reference to any tax liability shall include not only any
liability to make actual payments of or in respect of tax but shall also
include:
(i) the loss or reduction in the amount of, or the
setting off against income, profits or gains, or against any
tax liability for which no provision has been made in
preparing the Accounts, of any relief which would (were it not
for the said loss, reduction or setting off) have been
available to any member of the Group and which has been taken
into account in computing (and so eliminating or reducing) any
provision for deferred tax which appears (or which but for
such relief would have appeared) in the Accounts;
(ii) the loss or reduction in the amount of, or the
setting off against any tax liability for which no provision
has been made in preparing the Accounts, of a right to
repayment of tax which has been treated as an asset of any
member of the Group in preparing the Accounts; and
(iii) the loss or reduction in the amount of, or the
setting off against income, profits or gains earned, accrued
or received on or before the Closing or against any tax
liability of any relief which is not available before the
Closing but which arises in respect of an event occurring
after the Closing in circumstances where, but for such loss,
reduction or setting off, any member of the Group would have
had a tax liability in respect of which Buyer would have been
able to make a claim under this Article 8;
and in such a case the amount of tax which could otherwise be saved or relieved,
by the relief so lost, reduced or set off (calculated by reference to the rates
of tax in force at the date of this
21
Agreement) or the amount of repayment which would otherwise have been obtained
shall be treated as the amount of a tax liability which has arisen;
(g) reference to a payment in respect of tax includes (without
limitation) a payment for the surrender of losses or other amounts by way of
group relief (within the meaning of Section 402 of the Taxes Act) or for the
surrender of advance corporation tax or for the transfer of any other relief, a
repayment of any such payment and a payment by way of reimbursement, recharge,
indemnity or damages.
8.2 Covenant to Reimburse Buyer. The Principal Stockholders hereby
covenant with and undertake to pay to Buyer a sum equal to the amount of:
(a) any tax liability of any member of the Group resulting
from or by reference to any income, profits or gains earned accrued or received
on or before the Closing or any event before the Closing whether alone or in
conjunction with other circumstances and whether or not such tax is chargeable
against or attributable to any other person;
(b) any tax liability of any member of the Group that arises
after the Closing as a result of an act, omission or transaction by a person
other than any member of the Group and which liability to tax falls upon the
relevant member of the Group as a result of its having been in the same group
for tax purposes as that person at any time before the Closing; and
(c) all reasonable and proper professional costs and expenses
which are incurred by Buyer or any member of the Group in connection with any of
the matters referred to in this Article 8 or in taking or defending any action
under the covenants contained in this Article 8.
8.3 Exceptions. The covenants contained in Section 8.2 do not apply to
any liability:
(a) to the extent that provision or reserve in respect thereof
has been made in the Accounts or to the extent that payment or discharge of such
liability has been taken into account therein;
(b) in respect of which provision or reserve has been made in
the Accounts which is insufficient only by reason of any increase in rates of
tax made after the Closing with retrospective effect; and
(c) to the extent that the liability arises as the result of
transactions in the ordinary course of the Group's business since the date of
the 1997 Financials.
8.4 Notice, Action to be Taken. If Buyer shall become aware of any
assessment, notice, demand or other document issued or action taken by or on
behalf of any person, authority or body from which it appears that any member of
the Group has or may have a liability in respect of which a claim could be made
under this Article 8, it shall give written
22
notice thereof to the Principal Stockholders and shall (if the Principal
Stockholders shall indemnify and secure Buyer and the Group, as applicable, to
Buyer's reasonable satisfaction against any liabilities, costs, damages or
expenses which may be incurred thereby) take such action and procure that the
Group shall take such action as the Principal Stockholders may reasonably
request to dispute, resist or compromise the liability; provided that neither
any member of the Group nor Buyer shall be required to take any such action
unless the Principal Stockholders shall have produced to them the opinion of
counsel practicing in the relevant area of law that such act-ion is reasonable.
8.5 Term. The liability of the Principal Stockholders under this
Article 8 shall cease on the seventh anniversary of the Closing except in
respect of matters which have been the subject of a written claim made during
such period by Buyer to the Principal Stockholders unless the claim in question
has arisen by reason of fraud, willful concealment or dishonesty on the part of
any of the Principal Stockholders or, prior to the Closing, any member of the
Group or any of its officers or deliberate non disclosure on the part of any of
the Principal Stockholders, or, prior to the Closing, by any officer or
representative of any member of the Group in which event there shall be no
contractual limit on the time period within which such claim may be brought.
8.6 Time Period for Payments. The due date for the making of payments
under this Article 8 shall be:
(a) where the payment relates to a liability of any member of
the Group to make an actual payment of or in respect of tax, the date which is
seven (7) days before the date on which such actual payment is due to be made to
the relevant authority;
(b) where the payment relates to a matter covered by Section
8. 1 (f)(i) or (iii), the date which is seven (7) days after the Principal
Stockholders have been notified by Buyer, together with a copy of a certificate
from the Group's auditors (given at the request of Buyer or any member of the
Group), that the Principal Stockholders have a liability for a determinable
amount under Section 8.2;
(c) where the payment relates to a matter covered by Section
8.1(f)(ii), the date on which the repayment of tax would otherwise have been due
to be made; and
(d) in the case of costs and expenses covered by Section
8.2(c), the date on which such costs and expenses are incurred.
8.7 Further Assurances. The Principal Stockholders shall, at Buyer's
expense, give all such assistance and provide such information as Buyer shall
reasonably request from time to time for the purpose of enabling Buyer or any
member of the Group to make returns and provide information as required to any
tax authority and to negotiate any liability to tax.
23
ARTICLE 9. RIGHTS AND OBLIGATIONS SUBSEQUENT TO CLOSING.
9.1 Survival of Warranties. Each of the representations, warranties,
agreements, covenants and obligations herein or in any schedule, exhibit,
certificate or financial statement delivered by any party to the other party
incident to the transactions contemplated hereby are material, shall be deemed
to have been relied upon by the other party and shall survive the Closing
regardless of any investigation and shall not merge in the performance of any
obligation by either party hereto.
ARTICLE 10. INDEMNIFICATION AND OTHER CLAIMS.
10.1 Indemnification by the Principal Stockholders. Without restricting
the rights of Buyer or otherwise affecting the ability of Buyer to claim damages
on any other basis available to it, the Principal Stockholders jointly and
severally agree subsequent to the Closing to indemnify and hold the Company, the
Subsidiaries, Buyer and their respective subsidiaries and affiliates and persons
serving as officers, directors, partners or employees thereof (individually a
"Buyer Indemnified Party" and collectively the "Buyer Indemnified Parties")
harmless from and against any damages, liabilities; losses, taxes, fines,
penalties, costs, and expenses (including, without limitation, reasonable fees
of counsel) of any kind or nature whatsoever (whether or not arising out of
third-party claims and including all amounts paid in investigation, defense or
settlement of the foregoing) which may be sustained or suffered by any of them
arising out of or based upon any of the following matters:
(a) fraud or fraudulent misrepresentation by any Principal
Stockholder;
(b) any breach of Section 4.2 hereof; and
(c) the transactions described in Section 7.1(g) hereof.
10.2 Limitations on Liability of the Principal Stockholders.
Notwithstanding any provision in this Agreement to the contrary:
(a) No indemnification shall be payable pursuant to Sections
10.1(b) or (c) above to any Buyer Indemnified Party, and no damages shall be
payable to Buyer for any claim or claims for breach of any representation,
warranty or covenant made under this Agreement or in any certificate, schedule
or exhibit delivered pursuant hereto (each, a "Breach"), unless the total of all
such claims (together with any claims made pursuant to Article 8 or Section
10.1(a) hereof) shall exceed ,14,000 in the aggregate, whereupon the full amount
of such claims shall be recoverable in accordance with the terms hereof.
(b) The aggregate liability of the Principal Stockholders to
the Buyer Indemnified Parties with respect to claims for indemnification
pursuant to Sections 10.1(b) or (c) or to Buyer with respect to claims for
damages as the result of a Breach shall not exceed the amount of the Purchase
Price actually paid plus the amount of the Purchase Price set off in respect of
claims in accordance with Section 10.6.
24
(c) Except in respect of the obligations set forth in Article
8 and except in respect of indemnification claims made pursuant to Section l0.1
hereof, the Principal Stockholders shall have no liability in respect of claims
for indemnification or damages unless written notice of such claim, in
accordance with the provisions of Section 10.5, shall have been given to the
Principal Stockholders on or before the eighteen (18) month anniversary of this
Agreement.
(d) Any claim of which due notice is required and has been
given pursuant to the provisions of clause (c) above shall (if not previously
settled, satisfied or withdrawn) be deemed to have been withdrawn on the first
anniversary of such notice unless (i) proceedings in respect thereof have been
commenced by being both issued and served on the Principal Stockholders on or
before such anniversary; (ii) such claim is contingent on facts and
circumstances not wholly within Buyer's control; or (iii) Buyer and the
Principal Stockholders are continuing to engage in settlement discussions with
respect to such claim as of such anniversary.
(e) In the event of the Principal Stockholders having paid
Buyer an amount in respect of a claim for damages hereunder or pursuant to
Article 8 or having paid any Buyer Indemnified Party an amount in respect of a
claim for indemnification hereunder and, subsequent to the date of making such
payment, Buyer or such Buyer Indemnified Party recovers from a third party,
other than one of the Company's insurers, a sum which is paid in respect of the
same such claim and which would constitute a double recovery (in whole or in
part), then Buyer or such Buyer Indemnified Party shall forthwith repay or
procure the repayment to the Principal Stockholders of so much of the amount
paid by the third party as does not exceed the sum paid by the Principal
Stockholders to Buyer or such Buyer Indemnified Party in respect of such claim.
Upon request, Buyer shall provide to the Principal Stockholders or their
advisers such information as the Principal Stockholders may reasonably require
to determine whether or not any repayment is due to them under this clause (e).
(f) Except as provided in Section 10.1(a), the Principal
Stockholders shall not be liable in respect of any claim for indemnification or
damages to the extent that the specific facts giving rise to any such claim for
indemnification or damages were expressly disclosed to Xxxx Xxxxxx or Xxxx
X'Xxxxxxx at a meeting of the Board of Directors of the Company and such
disclosure was duly and accurately recorded in the minutes of such meeting.
(g) No indemnification or damages or amount pursuant to
Article 8 shall be payable to Buyer or any Buyer Indemnified Party with respect
to:
(i) any claim or liability for taxes to the extent
that such claim or liability arises or the amount thereof is
increased as a result of the making after the date hereof with
retrospective effect of: (1) any change in the basis or method
of calculation of or any increase in the rate or rates of
taxation; (2) any
25
other legislation regulation or change in the law (whether or
not in relation to taxation); or (3) any new form of taxation;
(ii) any claim for taxes if such claim would not have
arisen but for a voluntary act or omission carried out after
the Closing by the Company (1) with the actual knowledge (or
where Buyer ought reasonably to have known) that such act or
omission would give rise to a claim for taxes against the
Principal Stockholders, (2) other than in pursuance of a
decision or arrangement made, or duty, liability or obligation
entered into, by the Company on or before the Closing and (3)
otherwise than in the Company's ordinary course, of business;
(iii) any claim for taxes if such claim would not
have arisen but for a cessation after the date hereof of the
business of the Company.
(h) Where the Company is entitled to recover from its insurers
(in respect of insurance effected prior to the date hereof) any sum in respect
of any matter giving rise to a claim for damages hereunder or a claim under
Section 10.1, Buyer shall xxxxx its claim against the Principal Stockholders by
the amount (if any) actually recovered from such insurance, and Buyer shall
procure that the Company shall diligently pursue such claims against its
insurers.
(i) Any payment made pursuant to a claim or claims for
indemnification or damages or under Article 8 by any of the Principal
Stockholders to Buyer or any Buyer Indemnified Party shall reduce the aggregate
purchase consideration for the sale of the Shares by the extent of such payment
and shall be deemed for all purposes of this Agreement to have been such a
reduction.
10.3 Indemnification by Buyer. Buyer agrees to indemnify and hold the
Principal Stockholders harmless from and against any damages, liabilities.,
losses and expenses (including, without limitation, reasonable fees of counsel)
of any kind or nature whatsoever (whether or not arising out of third-party
claims and including all amounts paid in investigation, defense or settlement of
the foregoing) which may be sustained or suffered by any of them arising out of
or based upon any tax liability of Buyer, the Company or any Subsidiary for
which the Principal Stockholders are not responsible pursuant to Article 8
hereof.
10.4 Limitations on Liability of Buyer. Notwithstanding any provision
in this Agreement to the contrary:
(a) No claims for damages shall be payable by Buyer for any
Breach, unless the total of all such claims (together with any claims made
pursuant to Section 10.3) shall exceed (pounds)14,000 in the aggregate,
whereupon the full amount of such claims shall be recoverable in accordance with
the terms hereof.
26
(b) The aggregate liability of Buyer to the Principal
Stockholders with respect to claims for damages as the result of a Breach shall
not exceed the Purchase Price.
(c) Except in respect of indemnification claims made pursuant
to Section 10.3 hereof, Buyer shall have no liability in respect of claims for
indemnification or damages unless written notice of such claim, specifying the
circumstances giving rise to such claim and, to the extent reasonably possible,
the amount thereof, shall have been given to Buyer on or before the eighteen
(18) month anniversary of this Agreement.
(d) Any claim of which due notice is required and has been
given pursuant to the provisions of clause (c) above shall (if not previously
settled, satisfied or withdrawn) be deemed to have been withdrawn on the first
anniversary of such notice unless (i) proceedings in respect thereof have been
commenced by being both issued and served on Buyer on or before such
anniversary; (ii) the Principal Stockholders have notified Buyer that they are
continuing to investigate the circumstances of such claim or that such claim is
contingent on facts and circumstances not wholly within the Principal
Stockholders' control; or (iii) Buyer and the Principal Stockholders are
continuing to engage in settlement discussions with respect to such claim as of
such anniversary.
(e) In the event of Buyer having paid any Principal
Stockholder an amount in respect of a claim for indemnification or damages
hereunder and, subsequent to the date of making such payment, such Principal
Stockholder recovers from a third party a sum which is paid in respect of the
same such claim and which would constitute a double recovery (in whole or in
part), then such Principal Stockholder shall forthwith repay or procure the
repayment to Buyer of so much of the amount paid by the third party as does not
exceed the sum paid by Buyer to such Principal Stockholders in respect of such
claim. Upon request, the Principal Stockholders shall provide to Buyer or its
advisers such information as Buyer may reasonably require to determine whether
or not any repayment is due to them under this clause (e).
10.5 Notice; Defense of Claims. A party (including, for purposes of
this Section 10.5, a Buyer Indemnified Party) may make claims for
indemnification or damages hereunder by giving written notice thereof to the
responsible party within the period in which such claims can be made hereunder.
If indemnification or damages is sought for a claim or liability asserted by a
third party, the claiming party shall also give written notice thereof to the
responsible party promptly after it receives notice of the claim or liability
being asserted, but the failure to do so shall not relieve the responsible party
from any liability except to the extent that it is prejudiced by the failure or
delay in giving such notice. Such notice shall summarize the bases for the claim
and any claim or liability being asserted by a third party. Within 20 days after
receiving such notice the responsible party shall give written notice to the
claiming party stating whether it disputes the claim and whether it will defend
against any third party claim or liability at its own cost and expense. If the
responsible party fails to give notice that it disputes a claim within 20 days
after receipt of notice thereof, it shall be deemed to have accepted and agreed
to the claim, which shall become immediately due and payable. The responsible
party shall be entitled to direct the defense against a third party claim or
liability with counsel
27
selected by it (subject to the consent of the claiming party, which consent
shall not be unreasonably withheld) as long as the responsible party is
conducting a good faith and diligent defense. The claiming party shall at all
times have the right to fully participate in the defense of a third party claim
or liability at its own expense directly or through counsel; provided, however,
that if the named parties to the action or proceeding include both the
responsible party and the claiming party and the claiming party is advised that
representation of both parties by the same counsel would be inappropriate under
applicable standards of professional conduct, the claiming party may engage
separate counsel at the expense of the responsible party. If no such notice of
intent to dispute and defend a third party claim or liability is given by the
responsible party, or if such good faith and diligent defense is not being or
ceases to be conducted by the responsible party, the claiming party shall have
the right, at the expense of the responsible party, to undertake the defense of
such claim or liability (with counsel selected by the claiming party), and to
compromise or settle it, exercising reasonable business judgment. If the third
party claim or liability is one that by its nature cannot be defended solely by
the responsible party, then the claiming party shall make available such
information and assistance as the responsible party may reasonably request and
shall cooperate with the responsible party in such defense, at the expense of
the responsible party.
10.6 Satisfaction of Payment Obligations.
(a) In order to satisfy the payment obligations of the
Principal Stockholders arising under any provision of this Agreement, Buyer or a
Buyer Indemnified Party shall have the right (in addition to collecting directly
from the Principal Stockholders) to set off its indemnification and damages
claims against any and all amounts due to the Principal Stockholders pursuant to
Section 1.2(c) hereof. Any such setoff shall be pro-rated among the Principal
Stockholders. If any Principal Stockholder disputes the amount of any
indemnification or damages claim made by Buyer or a Buyer Indemnified Party and
Buyer or such Buyer Indemnified Party elects to exercise its right of set off
pursuant to this Section 10.6, then Buyer or such Buyer Indemnified Party shall
pay the amount of the claim (up to the amount then payable to such Principal
Stockholder) into an interest bearing escrow account at a London clearing bank
established by English solicitors appointed by the Principal Stockholders and
Buyer or the Buyer Indemnified Party, respectively, for such purpose (such
account requiring a signature of a partner of each such firm in respect of any
instructions or transaction) pending agreement or judicial determination of the
claim. Upon agreement or judicial determination of such claim, the amount of the
claim agreed or determined as payable to Buyer or a Buyer Indemnified Party
shall be paid to Buyer or such Buyer Indemnified Party within three (3) days of
the agreement or determination, together with interest actually earned thereon,
and subject to all claims being agreed or judicially determined and any amounts
being paid to Buyer or such Buyer Indemnified Party in accordance with this
Section 10.6, the balance on the account (including accrued interest) shall be
paid to the Principal Stockholders within three (3) days of the agreement or
determination of the last outstanding claim and the parties shall instruct their
respective solicitors accordingly.
28
(b) In the event that, due to an agreement or judicial
determination with respect thereto, a Principal Stockholder is obligated to pay
the amount of a claim to Buyer or a Buyer Indemnified Party and such obligation
arises prior to the date that all amounts payable to such Principal Stockholder
pursuant to Section 1.2(c) have been paid in accordance with the terms thereof,
such Principal Stockholder shall have the right to pay the prorated portion of
his claim into a joint escrow account established as provided above. The amounts
which such Principal Stockholder shall have the right to pay into the joint
escrow account shall not exceed the aggregate amount which has not yet been paid
to such Principal Stockholder pursuant to Section 1.2(c) hereof. Unless paid
earlier at the instruction of such Principal Stockholder, payments from such
account shall be paid to Buyer or such Buyer Indemnified Party at the same time
that Buyer pays to such Principal Stockholder the amounts payable to such
Principal Stockholder pursuant to Section 1.2(c) and in corresponding equal
amounts. The balance, if any, in such account, including all accrued interest,
shall be paid to Buyer or such Buyer Indemnified Party upon all amounts payable
to such Principal Stockholder pursuant to Section 1.2(c) having been paid in
accordance with the terms thereof.
(c) For the purposes of this Section 10.6, a claim shall be
"agreed" if the same has been agreed in writing between the Principal
Stockholders and Buyer, and a claim shall be "judicially determined" if the same
has been finally determined by a court of competent jurisdiction from whose
decision no right of further appeal lies.
ARTICLE 11. MISCELLANEOUS.
11.1 Fees and Expenses. Each of the parties will bear its own expenses
in connection with the negotiation and the consummation of the transactions
contemplated by this Agreement, and no expenses of the Company, any Subsidiary
or the Principal Stockholders relating in any way to the purchase and sale of
the Company Shares hereunder and the transactions contemplated hereby, including
without limitation legal, accounting or other professional expenses of the
Company or any Subsidiary or Principal Stockholder, shall be charged to or paid
by the Company, any Subsidiary or Buyer.
11.2 Governing Law. This Agreement shall be construed under and
governed by the internal laws of England without regard to its conflict of laws
provisions. Each of the Principal Stockholders hereby submits to the exclusive
jurisdiction of the courts of England.
11.3 Notices. Any notice, request, demand or other communication
required or permitted hereunder shall be in writing and shall be deemed to have
been given if delivered or sent by facsimile transmission, upon receipt, or if
sent by registered or certified mail, upon the sooner of the date on which
receipt is acknowledged or the expiration of three days after deposit in United
Kingdom or United States post office facilities properly addressed with postage
prepaid. All notices to a party will be sent to the addresses set forth below or
to such other address or person as such party may designate by notice to each
other party hereunder:
29
TO BUYER: Xxxx X. Xxxxx
Xxxxxx X. Xxxxxx International, Inc.
Xxxxx Xxxx
Xxxxxxxxx, XX 00000
With a copy to: Xxx Xxxxx, Esq.
Xxxxxx X. Xxxxxx, Inc.
Xxxxx Xxxx
Xxxxxxxxx, XX 00000
TO PRINCIPAL
STOCKHOLDERS: At the name and address set forth on Exhibit A
Any notice given hereunder may be given on behalf of any party by its counsel or
other authorized representatives.
11.4 Entire Agreement. This Agreement, including the Schedules and
Exhibits referred to herein and the other writings specifically identified
herein or contemplated hereby, is complete, reflects the entire agreement of the
parties with respect to its subject matter, and supersedes all previous written
or oral negotiations, commitments and writings. No promises, representations,
understandings, warranties and agreements have been made by any of the parties
hereto except as referred to herein or in such Schedules and Exhibits or in such
other writings; and all inducements to the making of this Agreement relied upon
by either party hereto have been expressed herein or in such Schedules or
Exhibits or in such other writings. Nothing in this clause shall operate to
exclude the liability of any party for fraudulent misrepresentation.
11.5 Assignability; Binding Effect. This Agreement shall only be
assignable by Buyer to a corporation or partnership controlling, controlled by
or under common control with Buyer upon written notice to the Principal
Stockholders, provided that this Agreement shall be reassigned to Buyer if such
assignee ceases to be controlling, controlled by or under common control with
Buyer. This Agreement may not be assigned by the Principal Stockholders without
the prior written consent of Buyer. This Agreement shall be binding upon and
enforceable by, and shall inure to the benefit of, the parties hereto and their
respective successors and permitted assigns.
11.6 Captions and Gender. The captions in this Agreement are for
convenience only and shall not affect the construction or interpretation of any
term or provision hereof. The use in this Agreement of the masculine pronoun in
reference to a party hereto shall be deemed to include the feminine or neuter,
as the context may require.
11.7 Execution in Counterparts. For the convenience of the parties and
to facilitate execution, this Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which shall
constitute one and the same document.
30
11.8 Amendments. This Agreement may not be amended or modified, nor may
compliance with any condition or covenant set forth herein be waived, except by
a writing duly and validly executed by each party hereto, or in the case of a
waiver, the party waiving compliance.
11.9 Interest. If any payment due to be made by any party under this
Agreement is not made within five (5) business days of the due date for payment
thereof, the same shall carry interest from such date until actual payment at
the rate of 3 percent above the base rate from time to time of National
Westminster Bank PLC, compounded on the last days of March, June, September and
December in each year.
31
IN WITNESS WHEREOF the parties hereto have caused this Agreement to be
executed as of the date set forth above by their duly authorized
representatives.
XXXXXX X. XXXXXX INTERNATIONAL, INC.
By:
------------------------------------
Name:
Title:
---------------------------------------
Xxxx Xxxxxxxx
---------------------------------------
Xxxxx Xxxxxxx
---------------------------------------
Xxxxxxx Xxx
00
List of Exhibits and Schedules
Exhibit A: List of Principal Stockholders, Holdings and Consideration to be
Paid
B: Form of ADL Stock Plan
C: Form of Employment Agreement
D: Form of Release
Schedule 1.2(c)(ii) Key Employees
2.3 Options, Preemptive Rights, etc.
2.4 Subsidiaries
2.6(a) Leased Real Property
2.6(b) Personal Property
2.7 Financial Statements
2.8 Tax Disclosures
2.9 Affiliated Receivables
2.10 Absence of Changes
2.12 Banking Arrangements
2.13(a) Trademarks
2.13(e) Noncompetition Arrangements
2.14 Contracts, etc.
2.15 Litigation
2.17 Insurance
2.21 Permits
2.23 Transactions with Interested Persons
2.24 Employee Benefit Programs
2.25 Environmental Matters
2.26 Directors, Officers and Employees
2.27 Backlog
2.28 Labor Matters
33
Exhibit A
List of Principal Stockholders, Holdings and Consideration to be Paid
-------------------------------------------------------------------------------------------------------------------
CONSIDERATION PAYABLE BY BUYER
-------------------------------------------------------------------------------------------------------------------
AGGREGATE CONSIDERATION PAYABLE
NAME AND ADDRESS OF PRINCIPAL CASH IN CASH/STOCK OVER FIRST THREE
STOCKHOLDER SHARES OWNED AT CLOSING ANNIVERSARIES
---------------------------------------------------------------------------------------------------------------------
Xxxx Xxxxxxxx 800 "A" COMPANY (pounds)559,493 (pounds)559,493
x/x 0000 Xxx Xxx Xxxxxxxx 000 "C" COMPANY
Wanchai 6 ORDINARY ASIA
Hong Kong
---------------------------------------------------------------------------------------------------------------------
Xxxxx Xxxxxxx 600 "A" COMPANY (pounds)339,616.50 (pounds)339,616.50
0 Xxxx Xxxxxx 0000 "X" XXXXXXX
Xxxxxxx, Xxxxxxx
Xxxxxxxxxxxxx, Xxxxxxx
---------------------------------------------------------------------------------------------------------------------
Xxxxxxx Way 600 "A" COMPANY (pounds)339,616.50 (pounds)339,616.50
Hill View, 1708 "C" COMPANY
Xxxxx Xxx Xxxx
Xxxxxxx Xxxxx
Xxxx Xxxxxxx
Xxxxxxxxxxxxxxx, Xxxxxxx
-------------------------------------------------------------------------------------------------------------------
34
