CONFORMED COPY
DATED 16th January 1998
(1) X.X. XXXXXXXX and OTHERS
(2) XXXXXXXXXX GRAPHICS INC
AGREEMENT
FOR THE SALE AND PURCHASE
OF THE ENTIRE ISSUED SHARE CAPITAL
OF RODA LIMITED
XXXXXXX XxXXXXX
Xxxxx Xxxxx,
000 Xxxxxxxxxx Xxxxxx
Xxxxxx XX0X 0XX
T +44(0)171-367 3000
F +44(0)171-367 2000
CDE Box 724
(50177353.06)
THIS AGREEMENT is made the 16th day of January 1998
BETWEEN:-
(1) THE SEVERAL PERSONS whose respective names and addresses are set out in
column (1) of schedule 1 (the "Vendors");
(2) XXXXXXXXXX GRAPHICS INC, a corporation organised under the laws of the
State of New Jersey, USA (the "Purchaser").
WHEREAS:-
(A) Roda Limited (the "Company"), a company registered in England with number
3243754, has at the date of this Agreement an authorised share capital of
(pound)1,000,000 divided into 200,000 A Ordinary Shares of (pound)0.50 each
and 1,800,000 B Ordinary Shares of (pound)0.50 each of which 200,000 of the
said A Ordinary Shares and 200,000 of the said B Ordinary Shares are issued
and fully paid or credited as fully paid and are owned by the Vendors in
the proportions shown opposite their respective names in column (2) of
schedule 1.
(B) The Vendors have agreed to sell the Shares to the Purchaser and the
Purchaser has agreed to purchase the Shares in reliance upon the
representations, warranties and undertakings in this Agreement, for the
consideration and otherwise upon and subject to the terms and conditions of
this Agreement.
WHEREBY IT IS AGREED as follows:-
1. Definitions and Interpretation
1.1 In this Agreement the following words and expressions have the meanings
set opposite them:
"Accounts" the audited balance sheet as at the Balance
Sheet Date and the audited profit and loss
account for the last two accounting
reference periods ended on the Balance Sheet
Date of the Subsidiary and the notes,
reports, statements and other documents
which are or would be required by law to be
annexed to the Accounts of the company
concerned and to be laid before such company
in general meeting for such Financial Year,
a copy of each of which has been initialled
by or on behalf of each of the parties for
the purpose of identification;
"Accounting Standards" statements of standard accounting practice
(including financial reporting standards)
issued pursuant to section 256, CA 85 by the
ASB;
"Affiliate" in relation to any body corporate, any
Holding Company or subsidiary of such body
corporate or any subsidiary of a Holding
Company of such body corporate;
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"Agreed Extracts" as defined in clause 7.9;
"Agreement" this Agreement including its recitals and
the schedules hereto but not the Deed of Tax
Covenant;
"A Ordinary Shares" the 200,000 issued A Ordinary Shares
of(pound)0.50 each in the capital of the
Company;
"ASB" Accounting Standards Board Limited (no.
2526824) or such other body prescribed by
the Secretary of State from time to time
pursuant to section 256, CA 85;
"Balance Sheet Date" 31 December 1996;
"B Ordinary Shares" the 200,000 issued B Ordinary Shares
of(pound)0.50 each in the capital of the
Company;
"Business" collectively the businesses of the Company
and the Subsidiary at the date hereof;
"Business Day" a weekday (other than a Saturday) when banks
are open for business in London;
"CA 85" Companies Xxx 0000;
"CAA" Capital Allowances Xxx 0000;
"Claim" any claim by the Purchaser in connection
with the Vendors' Warranties or the Vendors
in connection with the Purchaser's
Warranties (as the case may be);
"Companies Acts" as defined in section 744, CA 85 together
with the Companies Xxx 0000;
"Competent Authority" means any person or legal entity (including
any government or government agency) having
regulatory authority and/or any court of law
or tribunal, or any local or national
agency, authority, department, inspectorate,
minister, ministry, official or public or
statutory person (whether autonomous or not)
of, or the government of, the United Kingdom
or the European Community;
"Completion" completion of the sale and purchase of the
Shares pursuant to this Agreement;
"Conditions" the conditions referred to in clause 2.1;
"Confidential Information" all information received or obtained as a
result of entering into or performing, or
supplied by or on behalf of a party in the
negotiations leading to, this Agreement and
the Deed of Tax Covenant and which relates
to:-
(i) the Company and the Subsidiary;
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(ii) the Business;
(iii) the provisions of this Agreement and
the Deed of Tax Covenant;
(iv) the negotiations relating to this
Agreement and the Deed of Tax
Covenant;
(v) the subject matter of this Agreement
and the Deed of Tax Covenant; or
(vi) the Purchaser and its Affiliates.
"Connected Person" a person connected with any of the Vendors
or the Directors (or any former director of
the Company or any of the Subsidiaries)
within the meaning of section 839, TA 88;
"Consideration Shares" the 169,739 shares of common stock, no par
value of the Purchaser to be issued at
Completion in accordance with clause 4 as
part of the consideration for the Shares.
"Copyright" copyright, design rights, topography rights
and database rights whether or not the same
are registered or unregistered (including
any applications for registration of any
such thing) and rights under licences and
consents in relation to any such thing) and
any similar or analogous rights to any of
the foregoing whether arising or granted
under the law of England or of any other
jurisdiction;
"Deed of Tax Covenant" the deed in the agreed terms containing
certain taxation covenants and indemnities
between the Vendors, the Company, each of
the Subsidiaries and the Purchaser;
"Directors" the directors of the Company and the
Subsidiaries named in schedule 2;
"Disclosed" fairly disclosed by the Disclosure Documents
or by the general disclosures specifically
referred to in the Disclosure Letter and
"Disclosure" shall be construed accordingly;
"Disclosure Documents" the Disclosure Letter, the documents on the
property disclosure list referred to therein
and the two identical bundles of documents
collated by or on behalf of the Vendors the
outside covers of each of which have been
signed for identification by or on behalf of
the Vendors and the Purchaser;
"Disclosure Letter" the letter described as such of even date
herewith addressed by the Vendors to the
Purchaser;
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"Encumbrance" any interest or equity of any person
(including any right to acquire, option or
right of pre-emption) or any mortgage,
charge, pledge, lien, assignment,
hypothecation, security interest, title
retention or any other security agreement or
arrangement;
"Environment" any and all organisms (including without
limitation man and his senses), ecological
systems, property and the following media:
air (including without limitation, the air
within buildings and the air within other
natural or man-made structures made whether
above or below ground); water (including
without limitation, water under or within
land or in drains or sewers and coastal and
inland waters); and land (including without
limitation, land under water);
"Environmental Agreements" any and all leases or licences or other
agreements which are binding upon the
Company or any of the Subsidiaries but only
to the extent that they relate, either
wholly or in part, to the protection of the
Environment, and/or the prevention of Harm
or Damage;
"Environmental Laws" any and all laws including European
Community or European Union regulations,
directives and decisions; statutes and
subordinate legislation; regulations,
orders, ordinances, Permits, codes of
practice, circulars, guidance notes and the
like; common law, local laws and byelaws;
judgments, notices, orders, directions,
instructions or awards of any Competent
Authority applicable to the Property and/or
conduct of the Business and which have as a
purpose or effect the protection of the
Environment, and/or prevention of Harm or
Damage and/or the provision of remedies in
respect of Harm or Damage;
"Environmental Liability" liability (including liability in respect of
Remedial Action) on the part of the Company
or any of the Subsidiaries and/or any of
their directors or officers or shareholders
under Environmental Laws;
"EPCA" the Employment Protection (Consolidation)
Xxx 0000;
"Escrow Agreement" the escrow agreement to be made between the
Vendors, the Purchaser, Mundays and Xxxxxxx
XxXxxxx in the agreed terms;
"Event" any payment, transaction, act, omission or
occurrence of whatever nature whether or not
the Company or the Purchaser is a party
thereto and including:-
(a) the execution of this Agreement and
completion of the sale of the Shares
to the Purchaser; and
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(b) the death of any person being a
Vendor or connected with a Vendor;
and references to an Event occurring on or
before Completion shall include an Event
deemed, pursuant to any Taxation Statute, to
occur or be treated or regarded as occurring
on or before Completion;
"FA" Finance Act;
"Filing Date" each date on which a registration statement
or an amendment thereto is filed by the
Purchaser with the SEC, and including the
date on which the registration statement is
declared effective by the SEC and the date
of Completion;
"Financial Year" a Financial Year within the meaning ascribed
to such expression by section 223, CA 85;
"GAAP" Accounting Standards, the legal principles
set out in schedules 4 and 4A to CA 85,
rulings and abstracts of the urgent issues
task force of the ASB and guidelines,
conventions, rules and procedures of
accounting practice in the United Kingdom
which are regarded as permissible by the
ASB;
"Group" together the Company and the Subsidiary;
"Harm or Damage" harm or damage to or other interference with
the Environment;
"Hazardous Matter" any and all matter (whether alone or in
combination with other matter) which may or
is liable to cause Harm or Damage;
"Holding Company" a Holding Company within the meaning
ascribed to such expression by sections 736
and 736A, CA 85;
"Intellectual Property" Patent Rights, Know How, Copyright, Trade
Marks, Software and IP Materials;
"Intellectual Property
Agreements" agreements or arrangements relating to
Intellectual Property owned, used or
exploited by the Company or any of the
Subsidiaries;
"IP Materials" all documents, records, tapes, discs,
diskettes and any other materials whatsoever
containing Copyright works, Know How or
Software;
"ITA" the Inheritance Tax Xxx 0000;
"Know How" trade secrets and confidential business
information including customer lists and
pricing policy; sales targets, sales
statistics, market share statistics,
marketing surveys and reports; marketing
research; unpatented technical and other
information including
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inventions, discoveries, processes and
procedures, ideas, concepts, formulae,
specifications, procedures for experiments
and tests and results of experimentation and
testing; information comprised in Software;
together with all common law or statutory
rights protecting the same including by any
action for breach of confidence and any
similar or analogous rights to any of the
foregoing whether arising or granted under
the law of England or any other
jurisdiction;
"Loan Notes" the (pound)850,000 nominal convertible
secured loan notes issued by the Company as
constituted by a deed dated 21st October
1996;
"Losses" actions, proceedings, losses, damages,
liabilities, claims, costs and expenses
including fines, penalties, clean-up costs,
legal and other professional fees;
"Management Accounts" the management accounts of the Company as
at, and for the nine month period ended on,
30 September 1997, a copy of which has been
signed for identification purposes on behalf
of the Vendors and the Purchaser;
"Nasdaq" the Nasdaq National Market System or the
Nasdaq Small Cap Market in the United
States;
"Offer Price" the price per share, at which shares of
common stock of the Purchaser are sold by
the Company pursuant to the Public Offering;
"Patent Rights" patent applications or patents, author
certificates, inventor certificates, utility
certificates, improvement patents and models
and certificates of addition including any
divisions, renewals, continuations,
refilings, confirmations-in-part,
substitutions, registrations, confirmations,
additions, extensions or reissues thereof
and any similar or analogous rights to any
of the foregoing whether arising or granted
under the law of England or any other
jurisdiction;
"Permits" any and all licences, consents, permits,
authorisations or the like, made or issued
pursuant to or under, or required by,
Environmental Laws in relation to the
carrying on of the Business at the Property;
"Preference Shares" the 'A' preference shares of (pound)1 each
and the 'B' preference shares of (pound)1
each in the capital of the Subsidiary;
"Proceedings" any proceeding, suit or action arising out
of or in connection with this Agreement;
"Properties" the properties of which short particulars
are set out in schedule 3 and the expression
"Property" shall mean,
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where the context so admits, any one or more
of such properties and any part or parts
thereof;
"Public Offering" the proposed initial public offering by the
Purchaser of shares of its common stock in
the United States
"Purchaser's Group" the Purchaser and its Affiliates;
"Purchaser's Solicitors" Xxxxxxx XxXxxxx of Xxxxx Xxxxx, 000
Xxxxxxxxxx Xxxxxx, Xxxxxx XX0X 0XX;
"Purchaser's Warranties" the warranties set out in clause 8 and
schedule 6;
"Remedial Action" (i) preventing, limiting, removing,
remedying, cleaning-up, abating, containing
or ameliorating the presence or effect of
any Hazardous Matter in the Environment
(including without limitation the
Environment at the Property and/or at the
Further Property) or (ii) carrying out
investigative work and obtaining legal and
other professional advice as is reasonably
required in relation to (i);
"RTPA" Restrictive Trade Practices Xxx 0000;
"Service Agreements" the service agreements to be entered into by
each of Xxxxx Xxxxxxxx, Xxxxx Xxxxxx, Xxxx
Xxxxxx and Xxxxx Xxxxxxx and the Company in
the agreed terms;
"Service Document" a writ, summons, order, judgment or other
process issued out of the courts of England
and Wales in connection with any
Proceedings;
"SEC" the US Securities and Exchange Commission;
"Shares" together the A Ordinary Shares and the B
Ordinary Shares;
"Software" any and all computer programs in both source
and object code form, including all modules,
routines and sub-routines thereof and all
source and other preparatory materials,
relating thereto including user
requirements, functional specifications and
programming specifications, ideas,
principles, programming languages,
algorithms, flow charts, logic, logic
diagrams, orthographic representations, file
structures, coding sheets, coding and
including any manuals or other documentation
relating thereto and computer generated
works;
"SSAP" a statement of standard accounting practice
or financial reporting standard in force at
the date hereof as issued by the Institute
of Chartered Accountants in England and
Wales and adopted by the ASB as an
Accounting Standard;
"Stock Exchange" the London Stock Exchange Limited;
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"subsidiary" a subsidiary within the meaning ascribed to
such expression by sections 736 and 736A, CA
85;
"Subsidiary" the subsidiary of the Company named in part
2 of schedule 4;
"TA 88" the Income and Corporation Taxes Xxx 0000;
Taxation" (a) all forms of taxation including and
without any limitation any charge,
tax, duty, levy, impost, withholding
or related liability wherever
chargeable imposed for support of
national, state, federal, municipal
or local government and whether of
the UK or any other jurisdiction; and
(b) any penalty, fine, surcharge,
interest, charges or costs payable in
connection with any taxation within
(a) above;
"Taxation Authority" the Inland Revenue, Customs & Excise,
Department of Social Security and any other,
governmental, or other authority whatsoever
competent to impose any Taxation whether in
the United Kingdom or elsewhere;
"Taxation Statute" any directive, statute, enactment, law or
regulation wheresoever enacted or issued,
coming into force or entered into providing
for or imposing any Taxation and shall
include orders, regulations, instruments,
bye-laws or other subordinate legislation
made under the relevant statute or statutory
provision and any directive, statute,
enactment, law, order, regulation or
provision which amends, extends,
consolidates or replaces the same or which
has been amended, extended, consolidated or
replaced by the same;
"Tax Warranties" the warranties set out in part 2 of schedule
5;
"TCGA" the Taxation of Chargeable Gains Xxx 0000;
"TMA" the Taxes Management Xxx 0000;
"Trade Marks" trade or service xxxx applications or
registered trade or service marks,
registered protected designations of origin,
registered protected geographic origins,
refilings, renewals or reissues thereof,
unregistered trade or service marks, get up
and company names in each case with any and
all associated goodwill and all rights or
forms of protection of a similar or
analogous nature including rights which
protect goodwill whether arising or granted
under the law of England or of any other
jurisdiction;
"Trade Union" as defined in section 1, TULRCA;
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"TULRCA" the Trade Union and Labour Relations
(Consolidation) Xxx 0000;
"TUPE" the Transfer of Undertakings (Protection of
Employment) Regulations 1981;
"VAT" value added tax;
"VATA" the Value Added Tax Xxx 0000;
"Vendor's Accountants" Xxxxxxx Xxxxxxx of Xxxx Xxxxx, 0-0 Xxxxxx
Xxxxx Xxxx, Xxxxxx, Xxxxxx;
"Vendors' Solicitors" Mundays of Xxxxx Xxxxx, Xxxxxx Xxxx,
Xxxxxxxx, Xxxxx, Xxxxxx XX00 0XX;
"Vendors' Warranties" the warranties set out in clause 7 and
schedule 5;
"in the agreed terms" in the form agreed between the Vendors'
Solicitors and the Purchaser's Solicitors
and signed for the purposes of
identification by or on behalf of each
party.
1.2 Unless the context otherwise requires words denoting the singular shall
include the plural and vice versa, references to any gender shall include
all other genders and references to persons shall include bodies
corporate, unincorporated associations and partnerships in each case
whether or not having a separate legal personality. References to the
word "include" or "including" are to be construed without limitation.
1.3 References to recitals, schedules and clauses are to recitals and
schedules to and clauses of this Agreement, unless otherwise specified
and references within a schedule to paragraphs are to paragraphs of that
schedule unless otherwise specified.
1.4 References in this Agreement to any statute, statutory provision or EC
Directive include a reference to that statute, statutory provision or EC
Directive as amended, extended, consolidated or replaced from time to
time (whether before or after the date of this Agreement) and include any
order, regulation, instrument or other subordinate legislation made under
the relevant statute, statutory provision or EC Directive.
1.5 References to any English legal term for any action, remedy, method of
judicial proceeding, legal document, legal status, court, official or any
legal concept or thing shall in respect of any jurisdiction other than
England be deemed to include that which most approximates in that
jurisdiction to the English legal term.
1.6 Any reference to "writing" or "written" includes faxes and any
non-transitory form of visible reproduction of words.
1.7 References to the Vendors are to each of them severally.
1.8 In schedule 5, (save for paragraph 4.1), references to the Company shall
be deemed to include a corresponding reference to the Subsidiary to the
intent that (save as aforesaid) the Vendors' Warranties are given in
respect of the Subsidiary as well as the Company.
1.9 References to times of the day are to London time and references to a day
are to a period of 24 hours running from midnight to midnight.
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2. Condition
2.1 Subject to clause 2.3, this Agreement is subject to and conditional
upon:-
2.1.1 the closing of the Public Offering;
2.1.2 either: (a) the grant of a lease of the property situate at 00-00
Xxxxxxxx Xxxxx, Xxxxxx, XX00, 0XX to a company to be formed by the
Vendors and the grant of an underlease for a term of five years
from Completion to the Company; or (b) the grant to the Company of
a lease of the said property for a term of five years from the
date of Completion, and such underlease or lease as referred to in
sub-clauses (a) and (b) of this clause 2.1.2 shall be in the
agreed terms (subject to such variations as shall be agreed by the
parties hereto), provided that if an underlease is granted to the
Company the Company shall be under no obligation to the superior
landlord of the said property to observe and perform obligations
any more onerous then those contained in the underlease and shall
not be required to enter into any direct covenants with the
superior landlord and the Vendors hereby undertake (if such an
underlease is to be granted) to obtain by Completion the
unqualified consent and licence of the superior landlord to the
grant of such underlease and each of the parties hereto shall use
all reasonable endeavours to obtain by Completion an order of the
relevant County Court authorising the exclusion of the provisions
of sections 24 to 28 inclusive of the Landlord and Xxxxxx Xxx 0000
in relation to the said lease or underlease;
2.1.3 each of the persons referred to in schedule 10 providing
certificates in the form requested by schedule 10 and a director
of the Company providing the certificates required on each Filing
Date pursuant to clause 7.9 (with the certificate to be provided
on the date of Completion to be in the same form as the
certificate provided on the date on which the Purchaser's
registration statement has declared effective);
2.1.4 the Preference Shares having been acquired by the Company for a
nominal sum and all dividends Disclosed as payable in respect of
such shares having been paid;
2.1.5 the termination of service agreements or consultancy agreements
with Xxxxx Xxxxxxxx, Xxxxx Xxxxx and Xxxxxx Xxxxxx without any
payment of compensation other than payments in accordance with the
terms of such agreements as Disclosed, and each such person having
confirmed that they have no outstanding claims against the
Company;
2.1.6 the repayment to Xxxxx Xxxxxxx (together with all accrued interest
thereon) of all amounts outstanding on the loan notes issued to
him by the Company in October 1996;
2.1.7 the production to the Purchaser of evidence reasonably
satisfactory to the Purchaser that the matters identified in the
report of BPIF dated 8 January 1998 have been corrected at a cost
to the Group not exceeding (pound)5,000.
2.2 If the conditions in clause 2.1 have not been fulfilled or waived by 30
April 1998 (or by such later date as may be agreed in writing between the
Vendors and the Purchaser):
2.2.1 this Agreement (except for clauses 1, 2, 16 and 21) shall
thereupon become null and void; and
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2.2.2 none of the parties shall have any rights against any other party
hereunder except in respect of any antecedent breach of any of the
provisions of this agreement listed in clause 2.3.
2.3 Notwithstanding clause 2.1, clauses 2, 3, 4.4, 5.1, 5.7, 6, 7, 8, 9, 10,
12, 15, 16, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28 and 29 inclusive
shall come into force on the execution and exchange of this agreement and
the remainder of this agreement shall come into force on the fulfilment
and/or waiver of all conditions stated in clause 2.1, provided that the
Vendor shall have no liability in respect of the Vendor's Warranties, and
the Purchaser shall have no liability in respect of the Purchaser's
Warranties, if Completion does not occur.
2.4 The Vendors shall procure that, in fulfilling the conditions set out in
clauses 2.1.2, 2.1.4, 2.1.5, 2.1.6 and 2.1.7, the Company and the
Subsidiary shall incur no cost, expense or liability save as expressly
envisaged therein, any cost, expense or liability not so envisaged
(including any liability to the landlord of 00-00 Xxxxxxxx Xxxxx, Xxxxxx
XX00 in respect of the period prior to Completion save for rent and other
normal outgoings payable in accordance with the terms of the draft lease
disclosed to the Vendor and payments in respect of dilapidations not
exceeding (pound)12,300) being an "Unanticipated Liability". The Vendors
shall use all reasonable endeavours (without incurring undue expense) to
procure that each of such conditions is satisfied.
3. Sale and purchase
3.1 Subject to the terms of this Agreement, each of the Vendors shall
severally sell with full title guarantee, that number of Shares set
opposite his name in column (2) of schedule 1 and the Purchaser shall
purchase such shares together with all rights attaching thereto as at
Completion.
3.2 The Purchaser shall be entitled to receive all dividends and
distributions declared, paid or made by the Company with effect from
Completion.
3.3 The Purchaser shall not be obliged to complete the purchase of any of the
Shares unless the purchase of all the Shares is completed simultaneously.
4. Consideration
4.1 The consideration for the sale of the Shares shall be the sum of
USD8,147,500 (Eight million one hundred and forty six thousand five
hundred US dollars) to be satisfied:
4.1.1 by the issue to the Vendors of the Consideration Shares (credited
as fully paid); and
4.1.2 as to the balance of the consideration (being the sum of
USD8,147,500 less an amount equal to the Offer Price multiplied by
the number of Consideration Shares), by a payment in cash to the
Vendors.
4.2 The total consideration receivable by each Vendor, and the number of
Consideration Shares to be issued pursuant to clause 4.1.1 to each
Vendor, shall be as set opposite their respective names in columns 3 and
4 of schedule 1. The cash sum payable to each Vendor pursuant to clause
4.1.2 shall be his total consideration as set out in column 3 of schedule
1 less the value, at the Offer Price, of the Consideration Shares to be
issued to him as set out in column 4 of schedule 1.
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4.3 Any payment made by the Vendors in respect of a breach of any of the
Vendors' Warranties or payment under the Deed of Tax Covenant or
otherwise under clause 11 shall be and shall be deemed to be pro tanto a
reduction in the price paid for the Shares under this Agreement.
4.4 Each of the Vendors hereby waives all rights of pre-emption or other
rights over any of the Shares conferred on him either by the articles of
association of the Company or in any other way.
5. Completion
5.1 Subject as provided in clause 5.4, Completion shall take place at the
offices of the Purchaser's Solicitors (or as otherwise agreed between the
parties) immediately following fulfilment of the Conditions or at such
other place and/or on such other date as may be agreed in writing between
the Purchaser and the Vendors time being of the essence.
5.2 At Completion:-
5.2.1 the Vendors shall deliver to the Purchaser each of the documents
listed in part 1 of schedule 7;
5.2.2 the Vendors shall procure that all necessary steps are taken
properly to effect the matters listed in part 2 of schedule 7 by
resolutions of the Board of Directors of the Company and the
Subsidiary and shall deliver to the Purchaser duly signed written
resolutions or Board Minutes as appropriate.
5.3 Subject to the Vendors complying with their obligations under clause 5.2
the Purchaser shall at Completion:-
5.3.1 pay the cash element of the consideration for the Shares (being
the sum payable pursuant to clause 4.1.2) (less the amounts to be
deducted and paid pursuant to clause 11.1) by way of electronic
transfer for same day value to such account as may be notified to
the Purchaser by the Vendors at least 3 business days prior to
Completion, and payment to such account shall be an effective
discharge of the Purchaser's obligation to pay such sum and the
Purchaser shall not be concerned to see to the application or be
answerable for the loss or misapplication of such sums;
5.3.2 deliver to the Vendors a counterpart Deed of Tax Covenant duly
executed by the Purchaser;
5.3.3 deliver to Xxxxx Xxxxxxxx, Xxxxx Xxxxxx, Xxxx Xxxxxx and Xxxxx
Xxxxxxx a counterpart Service Agreement duly executed by the
Company;
5.3.4 cause a board meeting or a meeting of a duly authorised committee
of the Purchaser to be held at which the Consideration Shares
shall be issued to the relevant Vendors, or to such persons as the
Vendors shall direct, in accordance with clause 4, credited as
fully paid up, and the Vendors entered in the register of members
as the holders thereof and the Purchaser shall cause to be
delivered to the Vendors' Solicitors definitive certificates in
respect of the Consideration Shares.
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5.4 If in any respect material to the Purchaser the provisions of clause 5.2
and schedule 7 are not complied with on the date of Completion applicable
under clause 5.1, the Purchaser shall not be obliged to complete this
Agreement and may:-
5.4.1 defer Completion to a date not more than twenty-eight days after
the date set by clause 5.1 (and so that the provisions of this
clause 5.4 shall apply to Completion as so deferred); or
5.4.2 proceed to Completion so far as practicable and without prejudice
to its rights under this Agreement; or
5.4.3 rescind this Agreement without prejudice to its rights and
remedies under this Agreement; or
5.4.4 waive all or any of the requirements contained in clause 5.2 at
its discretion.
5.5 If on or prior to Completion the Purchaser becomes aware that either the
revenues or the post-tax profits (having added back any provision for
taxation relating to the payment of (pound)200,000 to Xx Xxxxxxx'x
pension scheme in October 1996) of the Company for the five month period
from 1 October 1997 to 28 February 1998 (inclusive) are at least 17.5%
less than the amount projected for revenues or (as the case may be)
post-tax profits for such five month period (as contained in the
Projections in the agreed terms), the Purchaser shall not be obliged to
complete this Agreement and may rescind this Agreement.
5.6 The Vendors shall indemnify the Purchaser and keep the Purchaser
indemnified against any Losses it may suffer or incur as a result of any
document delivered to it pursuant to this clause 5 or schedule 7 being
unauthorised, invalid or for any other reason ineffective for its
purpose.
5.7 The Purchaser shall give to the Vendors as much advance notice of the
date on which the Public Offering is expected to close as is practicable.
A pre-closing meeting shall be held on such date (not being earlier than
7 days prior to the expected closing date) as the Purchaser may request
by not less than 2 business days' notice in order to demonstrate to the
reasonable satisfaction of the Purchaser that the Conditions (other than
the condition relating to the Public Offering) and the obligations at
Completion of the Vendors have been or will at Completion be fulfilled.
6. Conduct of Business pending Completion
6.1 Each of the Vendors hereby undertakes to the Purchaser that in the period
prior to Completion:-
6.1.1 the Business will be carried on as a going concern in the normal
course;
6.1.2 no physical assets of the Company or of the Subsidiary shall be
removed from any of the Properties save in the ordinary course of
normal day to day trading;
6.1.3 they will use their best endeavours to maintain the trade and
trade connections of the Group;
6.1.4 all debts which the Company or the Subsidiary incurs in the normal
course of the business will be settled within the usual periods of
credit normally taken by the Company;
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6.1.5 it shall promptly give to the Purchaser full details of any
material changes in the Business, financial position and/or assets
of the Group;
6.1.6 the Company and the Subsidiary shall maintain in force policies of
insurance with limits of indemnity at least equal to, and
otherwise on terms no less favourable than, those policies of
insurance currently maintained by the Company and the Subsidiary;
6.1.7 neither the Company nor the Subsidiary shall:-
(a) enter into, modify or agree to terminate any contract, lease
or long term commitment (other than in the ordinary course of
business or as envisaged by the Company's existing budget)
which involves expenditure in money or money's worth in excess
of (pound)25,000 on any such individual contract, lease or
long-term commitment;
(b) incur any capital expenditure (other than expenditure
envisaged by the Company's existing budget) in excess of
(pound)25,000 on any individual item;
(c) appoint or employ any new employees at an annual salary or
rate of remuneration in excess of (pound)50,000 or appoint any
new consultants whatsoever or revise any existing arrangements
with consultants already appointed by the Company;
(d) alter materially, or agree to alter materially, the terms and
conditions of employment (including benefits) of any of its
employees, and no Vendor shall induce or endeavour to induce
any of such employees to terminate their employment prior to
Completion;
(e) dispose of any material assets used or required for the
operation of the Business (otherwise than in the ordinary
course of business) or enter into any other transaction
otherwise than in the ordinary course of business;
(f) create any Encumbrance over its assets or undertaking nor,
otherwise than in the ordinary course of the Business, give
any guarantees or indemnities in respect of any third party;
(g) institute, settle or agree to settle any legal proceedings
relating to the Business, save for debt collection in the
ordinary course of business;
(h) pay any fee or other amount to any Vendor, save for salary,
related benefits and other payments made in accordance with
existing contractual agreements which have been Disclosed;
(i) incur any liabilities to any Vendor and no Vendor shall incur
any liabilities to the Company or the Subsidiary, other than
liabilities incurred in the ordinary course of trading
pursuant to existing contractual agreements which have been
Disclosed;
provided that the Vendors and the Group shall be entitled to do
any of the things specified in this clause 6.1 with the prior
written consent of the Purchaser such consent not to be
unreasonably withheld or delayed and provided further that if
within 14 days of being required to give its written consent in
respect of any matters specified in clauses 6.1.7(a) and 6.1.7(b)
the
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Purchaser does not notify the Vendors in writing of its
disagreement to such matters, the Purchaser shall be deemed to
have consented to the Vendors undertaking such matters.
6.2 The Vendors shall:-
6.2.1 procure that in the period prior to Completion the Company and the
Subsidiary shall provide the Purchaser and its representatives
with full access to all records of the Business (and to such other
information and records as the Purchaser may reasonably require in
connection with the Public Offering); and
6.2.2 procure the Vendor's solicitors and the Vendor's Accountants to
co-operate with the Purchaser and to provide such information to
the Purchaser as may be reasonably requested it being acknowledged
that the Purchaser will be required by the rules of the SEC to
incorporate information regarding the Company, the Subsidiary and
the Business in any registration statement(s) or prospectus(es)
filed or published in connection with the Public Offering.
Any costs incurred by the Company in connection with clause 6.2.2 shall
be disregarded for all purposes related to the Vendors' Warranties and
for purposes of the calculations for clause 5.5.
6.3 Each Vendor shall provide the Purchaser with such information as it may
reasonably require from such Vendor to satisfy legal or regulatory
requirements for inclusion in any such registration statement(s) or
prospectus(es) to be filed or published by the Purchaser.
6.4 The Vendors shall appoint, with effect from such date as may be specified
by the Purchaser until Completion or earlier termination of this
Agreement, such person as may be nominated by the Purchaser to act as an
additional accountant of the Company (the "Financial Accountant"). The
Purchaser shall procure that the Financial Accountant shall remain the
employee of the Purchaser during such period, and all reasonable costs
incurred by the Company in connection with the employment of the
Financial Accountant shall be met in full by the Purchaser.
6.5 The Vendors shall procure that the Group shall use all reasonable
endeavours to correct the issues referred to in clause 2.1.7 as soon as
practicable after the date hereof.
7. Vendors' Warranties
7.1 In consideration of the Purchaser agreeing to purchase the Shares on the
terms contained in this Agreement each of the Vendors hereby severally:-
7.1.1 in relation to the Company and the Subsidiary warrants, represents
and undertakes to the Purchaser (contracting for itself and as
trustee for any successor in title to the Shares) in the terms set
out in schedule 5;
7.1.2 undertakes so far as he is able that (save only as may be
necessary to give effect to this Agreement) he shall not, and
shall procure (as far as they can) that the Company and the
Subsidiary shall not, prior to Completion, do any act or thing or
omit to do any act or thing the commission or omission of which
would constitute a breach of any of the Vendors' Warranties if
they were given at Completion or which would make any of the
Vendors' Warranties untrue or inaccurate or misleading if they
were so given on the
-15-
basis that a reference to the actual time of Completion were
substituted for any express or implied reference to the time of
this Agreement, provided that no Vendor shall be required to
prevent any Director of the Company or the Subsidiary from
performing properly his obligations as a Director of such company;
7.1.3 further undertakes to the Purchaser that upon his becoming aware
prior to Completion of the impending or threatened occurrence or
non-occurrence of any matter event or circumstance (including any
omission to act) which would or might reasonably be expected to
cause or constitute a breach (or which would have caused or
constituted a breach had such event occurred or been know to any
of them prior to the date of this Agreement) of any of the
Vendors' Warranties or which would or might make any of the
Vendors' Warranties inaccurate or misleading or which would or
might give rise to a claim under the Deed of Tax Covenant (whether
or not then executed) he will promptly given written notice of
such event to the Purchaser and if so requested by the Purchaser
use his reasonable endeavours promptly to prevent or remedy the
same if:-
(a) the event in question could not reasonably have been avoided
or prevented by the Vendors or any of them; and
(b) the occurrence of the event in question was duly notified in
accordance with the foregoing provisions of this clause 7.1.3.
7.1.4 warrants, represents and undertakes to the Purchaser (contracting
for itself and as trustee for any successor in title to the
Shares) that as at each Filing Date, the factual or historical
information relating to the Company and the Subsidiary as set out
in the Agreed Extracts will be accurate in all material respects
and will not omit to state any material fact necessary in order to
make any of such information not misleading.
7.2 Where any of the Vendors' Warranties are made or given "so far as the
Vendors are aware", the knowledge, information and belief of each of the
Vendors and the knowledge, information and belief of any one of the
Vendors shall be imputed to the remaining Vendors.
7.3 None of the Vendors' Warranties or the Deed of Tax Covenant shall be
deemed in any way modified or discharged by reason of any investigation
or inquiry made or to be made by or on behalf of the Purchaser, and no
information relating to the Company or to the Subsidiary of which the
Purchaser has knowledge (actual or constructive) other than by reason of
its being Disclosed shall prejudice any claim which the Purchaser shall
be entitled to bring or shall operate to reduce any amount recoverable by
the Purchaser under this Agreement. The benefit conferred upon the
Purchaser by the foregoing provisions of this clause shall be deemed to
be also conferred upon the Company and upon the Subsidiary.
7.4 Any information supplied by or on behalf of the Company or on behalf of
the Subsidiary (or by any officer, employee or agent of any of them) to
the Vendors or their advisers in connection with the Vendors' Warranties,
the Deed of Tax Covenant or the information Disclosed in the Disclosure
Documents shall not constitute a warranty, representation or guarantee as
to the accuracy of such information in favour of the Vendors and the
Vendors hereby undertake to the Purchaser to waive any and all claims
which they might otherwise have against the Company or the Subsidiary or
against any officer, employee or agent of any of them in respect of such
claims but so
-16-
that this shall not preclude any Vendor from claiming against any other
Vendor under any right of contribution or indemnity to which he may be
entitled.
7.5 Each of the Vendors' Warranties set out in the separate paragraphs of
schedule 5 shall be separate and independent and save as expressly
otherwise provided shall not be limited by reference to any other such
Warranty.
7.6 The Purchaser has entered into this Agreement upon the basis of and in
reliance upon the Vendors' Warranties and the same together with any
provision of this Agreement or the Deed of Tax Covenant when executed
which shall not have been fully performed at Completion shall remain in
force notwithstanding that Completion shall have taken place.
7.7 If it is found on or prior to Completion that any of the Vendors'
Warranties as given pursuant to clause 7.1.1 (but subject to paragraph
2.1 of schedule 8) are in any material respect untrue, misleading,
incorrect or unfulfilled or if the Purchaser becomes aware of any
material matter or thing which is inconsistent with the same (each, a
"Material Claim") or that the Vendors are in material breach of any other
term of this Agreement which is material in the context of this sale
(including without limitation the provisions of clause 6.1), the
Purchaser shall be entitled by notice in writing to the Vendors to
rescind this Agreement at any time prior to Completion but failure by the
Purchaser to exercise this right shall not constitute a waiver of any
such Material Claim or any other rights of the Purchaser arising by
reason of any breach of any Vendors' Warranty provided that if the amount
of such Material Claim or Claims exceeds (pound)500,000, the Vendors
shall be entitled by notice in writing to the Purchaser to rescind this
Agreement.
7.8 If it is found on or prior to Completion that any of the Vendors'
Warranties, if given on the basis set out in clause 7.1.2, would be in
any material respect untrue, misleading, incorrect or unfulfilled or if
the Purchaser becomes aware of any material matter or thing which would
be inconsistent with the same if given on such basis, and that such
matter or thing does not constitute a Material Claim (a "Subsequent
Claim"), the Purchaser shall be entitled by notice in writing to the
Vendors to rescind this Agreement at any time prior to Completion
provided that failure by the Purchaser to exercise this right shall
constitute a waiver of any other rights of the Purchaser arising by
reason of any such Subsequent Claim.
7.9 For the purposes of clause 7.1.4:
(a) the Purchaser undertakes to provide the directors of the Company
(on behalf of the Vendors) with an appropriate opportunity to
review in draft form those sections of any registration statement
(or any amendment thereto) which contain information relating to
the Company and the Subsidiary, and to make such amendments to
those sections as such directors may reasonably require;
(b) the Vendors undertake to provide comments on such draft sections
promptly after receipt thereof;
(c) for purposes of identification, a director of the Company shall on
each Filing Date deliver a certificate in the agreed terms
attaching such sections (incorporating any such amendments) and
confirming their accuracy, and such sections shall constitute the
"Agreed Extracts".
-17-
8. Purchaser's Warranties and Undertakings
8.1 As an inducement for the Vendors to enter into this Agreement, the
Purchaser represents, warrants to and undertakes to the Vendors in the
terms set out in schedule 6.
8.2 If it is found on or prior to Completion that any of the Purchaser's
Warranties are in any material respect untrue, misleading, incorrect or
unfulfilled or if the Vendors become aware of any material matter or
thing which is inconsistent with the same or that the Purchaser is in
material breach of any other term of this Agreement which is material in
the context of this sale, the Vendors shall be entitled collectively by
notice in writing to the Purchaser to rescind this Agreement at any time
prior to Completion but failure to exercise this right shall not
constitute a waiver of the Vendors rights in respect thereof or any other
rights of the Vendors arising by reason of any breach of any Purchaser's
Warranty, provided that if the amount of the Vendor's claim in respect of
such matters exceeds (pound)500,000, the Purchaser shall be entitled by
notice in writing to rescind this Agreement.
8.3 If it is found on or prior to Completion that any of the Purchaser's
Warranties, if given as at Completion, would be in any material respect
untrue, misleading, incorrect or unfulfilled or if the Vendors become
aware of any material matter or thing which would be inconsistent with
the same if given on such basis and that such matter or thing does not
fall within Clause 8.2, the Vendors shall be entitled by notice in
writing to the Purchaser to rescind this Agreement at any time prior to
Completion provided that failure by the Vendors to exercise this right
shall constitute a waiver of any other rights of the Vendors arising by
reason of any such matter.
8.4 If any claim is made against any of the Vendors under s.135 Finance Xxx
0000 or any subsequent amending legislation or otherwise the Purchaser
shall indemnify and keep indemnified the Vendors against any costs claims
demands taxation penalties fines or otherwise in relation to such claim.
8.5 As at the date hereof the Purchaser (for itself and its advisors) hereby
confirms that, after review of the Disclosure Documents, it is not
actually aware of any breach of any of the Vendors' Warranties or of
grounds to make a claim under the Vendors' Warranties.
9. Limitation of Vendors' Liability
9.1 The liability of the Vendors:-
9.1.1 in respect of any claim under the Vendors' Warranties save for the
Tax Warranties shall be limited as provided in parts 1 and 2 of
schedule 8; and
9.1.2 in respect of any claim under the Tax Warranties shall be limited
as provided in parts 1 and 3 of schedule 8.
9.2 Notwithstanding any other provisions of this Agreement, the provisions of
this clause 9 and schedule 8 (other than paragraph 3.1 of schedule 8)
shall not apply to any claim made against the Vendors in the case of any
knowing misstatement, knowing omission, fraud or dishonesty by or on
behalf of all or any of the Vendors provided that each Vendor shall be
solely responsible for his own fraudulent, dishonest acts or omissions or
knowing misstatements or omissions.
-18-
9.3 The rights of the Purchaser in respect of a breach of any of the Vendors'
Warranties shall not be affected by Completion.
10. Limitation of Purchaser's Liability
10.1 The liability of the Purchaser in respect of any claim under the
Purchaser's Warranties shall be limited as provided in schedule 9;
10.2 Notwithstanding any other provision of this Agreement, the provisions of
this clause 10 and schedule 9 shall not apply to any claim made against the
Purchaser in the case of any fraud, dishonesty, knowing misstatement or
knowing omission by or on behalf of the Purchaser.
10.3 The rights of the Vendors in respect of a breach of any of the
Purchaser's Warranties shall not be affected by Completion.
11. Retention
11.1 Each Vendor undertakes to the Purchaser that the amount specified against
their name in column 6 of schedule 1, being part of the consideration
which he receives pursuant to clause 4, shall be placed in a deposit
account especially established for the purposes of this clause 11.1 in
the joint names of the Purchaser's Solicitors and the Vendor's Solicitors
(the "Retention Account"). The Purchaser shall accordingly deduct from
the consideration otherwise payable by it at Completion such amount in US
dollars as is necessary at then current exchange rates to make such
payment into such Account, and shall deposit it accordingly . The sum so
deposited shall not be withdrawn from the Retention Account or used for
any other purpose until the expiry of the first anniversary of this
Agreement. Upon the first anniversary of this Agreement, each of the
Vendors shall be entitled to receive their Agreed Proportion of the
monies in the Retention Account unless any Retention Claims have been
made by the Purchaser prior to that date in which event an amount not
exceeding the amount of any such Retention Claims shall be retained in
the Retention Account until such Retention Claims are agreed or adjudged
(whether by determination by the Court or agreement by the parties). As
and when the amount of any such Retention Claim is finally agreed or
adjudged, the relevant amount shall be paid to the Purchaser. The balance
of the moneys held in the Retention Account shall be released to the
Vendors in the Agreed Proportions to the extent that the same are not
required in relation to outstanding Retention Claims. Any interest
accruing or monies in the Retention Account shall be apportioned in the
same manner as the principal to which it relates and shall be paid to the
relevant Vendor and/or Purchaser at the time at which it receives such
principal sum from the Retention Account.
11.2 For purposes of this Clause 11:
11.2.1 the "Agreed Proportion" of any Vendor is the proportion which his
initial deposit into the Retention Account bears to the aggregate
of all moneys so deposited; and
11.2.2 a "Retention Claim" means any Claim, any claim under the Deed of
Tax Covenant or any claim under the covenant in clause 11.3 below.
11.3 Each Vendor covenants to pay to the Purchaser on demand an amount equal
to its Agreed Proportion of:
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(a) any liability on the part of the Company or the Subsidiary in respect
of dilapidations in respect of the Xxxxxxx Xxxx, 0 Xxxxxxxxxx Xxxxxxx
Xxxxxx to the extent that such liability exceeds (pound)1,000;
(b) any Unanticipated Liability (as defined in clause 2.4 above);
(c) any liability on the part of the Company or the Subsidiary arising out
of:
(i) the discharge (at any time prior to Completion) of waste water
into surface water or foul water sewage systems to the extent
that such discharge has been made otherwise than in compliance
with applicable Environmental Laws;
(ii) any failure on the part of the Company (at any time prior to
Completion) to comply with the Control of Substances Hazardous to
Health Regulations 1994;
(d) any liability on the part of the Company or the Subsidiary to Dawnay
Day Corporate Finance Limited incurred since 31st December 1996 and up
to Completion;
(e) any liability which has been or may be incurred by the Company in
connection with the occupation by Redex of the Company's premises at
Xxxx 0, Xxxxx Xxxxxxx;
and any reference in this clause 11.3 to a liability shall extend to any
liability, loss or expense (including reasonable legal expenses) provided
that such liability shall be reduced by the amount of any tax credit
arising to the Company or the Subsidiary by reason of such liability.
11.4 At Completion, each of the Vendors and the Purchaser shall enter into the
Escrow Agreement, and use reasonable endeavours to require their
respective solicitors also to enter into it.
12. Protection of goodwill
12.1 As further consideration for the Purchaser agreeing to purchase the
Shares on the terms contained in this Agreement and with the intent of
assuring to the Purchaser the full benefit and value of the goodwill and
connections of the Group each of Xxxxx Xxxxxxxx and Xxxxxx Xxxxxx hereby
undertakes (binding himself and each of his Affiliates) to the Purchaser
(contracting for itself and on behalf of the Company and of each of the
Subsidiaries and for any successor in title to the Shares or to part or
all of the Business) that (except as directors or employees of the
Purchaser, the Company or of any of the Subsidiaries or with the written
consent of the Purchaser) neither he nor his Affiliates shall whether on
their own behalf or with or on behalf of any person and whether directly
or indirectly by any or person or business controlled by him or any
Connected Person:-
12.1.1 for a period of three years from Completion carry on or be
employed, engaged, concerned, interested or in any way assist
within the United Kingdom in any business which may in any way be
in competition with the Business provided that nothing in this
clause 12.1.1 shall prevent such Vendors nor any of their
Affiliates or Connected Persons from holding for investment
purposes only any units of an authorised unit trust and/or not
more than three per cent of any class of the issued share or loan
capital of
-20-
any company quoted on a recognised investment exchange (as defined
in the Financial Services Act 1986);
12.1.2 for a period of three years from Completion canvass, solicit or
approach or cause to be canvassed, solicited or approached (in
relation to a business which may in any way compete with the
Business) the custom of any person who at any time during the
twelve months preceding Completion shall have been a client or
customer of the Company or of any of the Subsidiaries;
12.1.3 for a period of three years from Completion interfere or seek to
interfere or take such steps as may interfere with supplies to the
Company and/or any of the Subsidiaries from any suppliers who have
been supplying goods or services to the Company or to any of the
Subsidiaries for use in connection with the Business at any time
during the period of twelve months prior to the date of
Completion;
12.1.4 for a period of three years from Completion offer employment to or
employ or offer to conclude any contract of services with
employees of the Company or of any of the Subsidiaries or procure
or facilitate the making of such an offer by any person, firm or
company or entice or endeavour to entice any employees of the
Company or of any of the Subsidiaries to terminate their
employment with the Company or any of the Subsidiaries;
12.1.5 at any time after Completion use as a trade or business name or
xxxx or carry on a business under a title containing the word(s)
"Roda" or any other word(s) colourably resembling the same; or
12.1.6 at any time after Completion disclose to any person whatsoever or
use to the detriment of the Company or any Subsidiary or otherwise
make use of, or through any failure to exercise all due care and
diligence cause any unauthorised use of, any Confidential
Information including Know How relating or belonging to the
Company or to any of the Subsidiaries or in respect of which the
Company or any of the Subsidiaries is bound by an obligation of
confidence to a third party save as required by the Stock Exchange
or by law or by any court of competent jurisdiction provided that
such restriction shall not extend to any confidential or secret
information which may come into the public domain otherwise than
through the default of the Vendor.
Each undertaking contained in this clause 12.1 shall be read and
construed independently of the other undertakings herein as an entirely
separate and severable undertaking.
12.2 In respect of Xxxxx Xxxxxxxx, the restricted periods contained in clauses
12.1.1 to 12.1.4 shall be substituted by the following restricted
periods:-
12.2.1 in the event that Xxxxx Xxxxxxxx'x employment under his Service
Agreement (as amended from time to time) is terminated by reason
of the Company serving notice on Xxxxx Xxxxxxxx (otherwise than a
notice to terminate in circumstances entitling the Company to
terminate summarily), the restricted period shall be three years
from Completion, and
12.2.2 in all other circumstances, the restricted period shall be five
years from Completion.
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12.3 Notwithstanding the provisions of clause 12.2, Xxxxx Xxxxxxxx shall, if
he has ceased to be an employee of the Company in the circumstances set
out in clause 12.2.1 and a period of at least two years has elapsed from
Completion be entitled to seek the written consent of the Purchaser to
carry on or be employed, engaged, concerned, interested or in any way
assist within the United Kingdom in any business which may in any way be
in competition with the Business and such consent shall not be
unreasonably withheld or delayed.
12.4 As further consideration for the Purchaser agreeing to purchase the
Shares on the terms contained in this Agreement and with the intent of
assuring to the Purchaser the full benefit and value of the goodwill and
connections of the Group Xxxxx Xxxxx hereby undertakes to the Purchaser
(contracting for itself and on behalf of the Company and of each of the
Subsidiaries and for any successor in title to the Shares or to part or
all of the Business) that he will not directly or indirectly:
12.4.1 for the period of twelve months after Completion hold any interest
in any business which is or shall be wholly or partly in
competition with the Business;
12.4.2 for the period of twelve months after Completion seek or accept in
any capacity whatsoever orders for products or services similar to
those provided by the Company or the Subsidiary at any time during
the period of twelve months prior to such termination: or
12.4.3 for the period of twelve months after Completion solicit or seek
to entice away from the Company or the Subsidiary any person who
is at the date of termination employed by the Company or the
Subsidiary as a Director, Manager or Sales Person;
12.4.4 at any time after Completion disclose to any person whatsoever or
use to the detriment of the Company or any Subsidiary or otherwise
make use of, or through any failure to exercise all due care and
diligence cause any unauthorised use of, any Confidential
Information including Know How relating or belonging to the
Company or to any of the Subsidiaries or in respect of which the
Company or any of the Subsidiaries is bound by an obligation of
confidence to a third party save as required by the Stock Exchange
or by law or by any court of competent jurisdiction provided that
such restriction shall not extend to any confidential or secret
information which may come into the public domain otherwise than
through the default of the Vendor.
Each undertaking contained in this clause 12.4 shall be read and
construed independently of the other undertakings herein as an entirely
separate and severable undertaking.
12.5 As further consideration for the Purchaser agreeing to purchase the
Shares on the terms contained in this Agreement and with the intent of
assuring to the Purchaser the full benefit and value of the goodwill and
connections of the Group each of the Vendors (other than Xxxxx Xxxxxxxx,
Xxxxxx Xxxxxx and Xxxxx Xxxxx) hereby undertakes (binding himself and
each of his Affiliates who is a director of the Company) to the Purchaser
(contracting for itself and on behalf of the Company and of each of the
Subsidiaries and for any successor in title to the Shares or to part or
all of the Business) that (except as directors or employees of the
Purchaser, the Company or of any of the Subsidiaries or with the written
consent of the Purchaser) neither he nor such Affiliates (if any) shall:-
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12.5.1 for a period of three years from Completion become a director of,
or undertake any other direct personal involvement in the
management of, any business in the United Kingdom which is in
competition with the Business;
12.5.2 for a period of three years from Completion canvass, solicit or
approach or cause to be canvassed, solicited or approached (in
relation to a business which may in any way compete with the
Business) the custom of any person who at any time during the
twelve months preceding Completion shall have been a client or
customer of the Company or of any of the Subsidiaries;
12.5.3 for a period of three years from Completion interfere or seek to
interfere or take such steps as may interfere with supplies to the
Company and/or any of the Subsidiaries from any suppliers who have
been supplying goods or services to the Company or to any of the
Subsidiaries for use in connection with the Business at any time
during the period of twelve months prior to the date of
Completion;
12.5.4 for a period of three years from Completion offer employment to or
employ or offer to conclude any contract of services with
employees of the Company or of any of the Subsidiaries or procure
or facilitate the making of such an offer by any person, firm or
company or entice or endeavour to entice any employees of the
Company or of any of the Subsidiaries to terminate their
employment with the Company or any of the Subsidiaries;
12.5.5 at any time after Completion use as a trade or business name or
xxxx or carry on a business under a title containing the word(s)
"Roda" or any other word(s) colourably resembling the same; or
12.5.6 at any time after Completion disclose to any person whatsoever or
use to the detriment of the Company or any Subsidiary or otherwise
make use of, or through any failure to exercise all due care and
diligence cause any unauthorised use of, any Confidential
Information including Know How relating or belonging to the
Company or to any of the Subsidiaries or in respect of which the
Company or any of the Subsidiaries is bound by an obligation of
confidence to a third party save as required by the Stock Exchange
or by law or by any court of competent jurisdiction provided that
such restriction shall not extend to any confidential or secret
information which may come into the public domain otherwise than
through the default of the Vendor.
Each undertaking contained in this clause 12.5 shall be read and
construed independently of the other undertakings herein as an entirely
separate and severable undertaking.
12.6 Whilst the undertakings in this clause 12 are considered by the parties
to be reasonable in all the circumstances, if any one or more should for
any reason be held to be invalid but would have been held to be valid if
part of the wording thereof was deleted or the period thereof reduced or
the range of activities or area covered thereby reduced in scope, the
said undertakings shall apply with such modifications as may be necessary
to make them valid and effective.
13. Loan Notes
13.1 Each of the Vendors hereby undertakes to the Purchaser (to the extent
such Vendor holds Loan Notes) that it shall not in the period prior to
Completion nor in the period
-23-
following Completion as specified in Clause 13.2 transfer, convert or
redeem its Loan Notes (whether in whole or part); and agrees to waive
(and to the extent received, to repay) any sums paid or payable by way of
default interest in respect of interest on the Loan Notes not paid on the
due date.
13.2 The Purchaser agrees that it shall procure that within 28 days from the
date of Completion the Company shall redeem at par (together with accrued
interest) all the Loan Notes held by the Vendors as set opposite their
respective names in column 5 of schedule 1.
14. Power of Attorney
Each of the Vendors hereby, with effect from Completion, irrevocably and
unconditionally appoint the Purchaser or any director of the Purchaser as
the Purchaser shall direct as the attorney of such Vendor with full
powers of substitution in such Vendor's name and on behalf of such Vendor
(and to the complete exclusion of any rights such Vendor may have in such
regard) lawfully to exercise all voting and other rights and receive all
benefits and entitlements which at any time after Completion attach to
the Shares of which such Vendor is the registered holder and to transfer
and deal with such Shares and such rights, benefits and entitlements and
execute such documents under hand or under seal and do such acts and
things in connection with the foregoing as the Purchaser shall from time
to time fit in all respects as if the Purchaser were the absolute legal
and beneficial owner thereof, provided that such power of attorney shall
terminate upon registration of the shares in the name of the Purchaser or
its nominee and the Purchaser shall use all reasonable endeavours to
effect such registration promptly after Completion.
15. RTPA
15.1 If there is any provision of this Agreement, or of any agreement or
arrangement of which this agreement forms part, which causes or would
cause this Agreement or that agreement or arrangement to be subject to
registration under the RTPA, then that provision shall not take effect
until the day after particulars of this Agreement or of that agreement or
arrangement (as the case may be) have been furnished to the Director
General of Fair Trading pursuant to section 24, RTPA.
15.2 The Purchaser undertakes to furnish such particulars as are referred to
in clause 15.1 as soon as is reasonably practicable after the date of
this Agreement and within the time limits specified in the RTPA.
16. Announcements
16.1 No press conference, announcement or other communication concerning
Confidential Information or the transactions referred to in this
Agreement, or in connection with the Purchaser or otherwise relating to
the financial condition or trading or financial prospects of the
Purchaser, shall be made or despatched by the Vendors or their agents,
employees or advisers to any third party without the prior written
consent of the Purchaser save as may be required by any:-
16.1.1 law;
16.1.2 existing contractual arrangements; or
-24-
16.1.3 the Stock Exchange or the Panel on Takeovers and Mergers or any
other applicable regulatory authority within England or any other
jurisdiction to which the Vendors or the Purchaser (as the case
may be) are subject where such requirement has the force of law
provided such communication shall be made only after consultation with
the other party. The Purchaser hereby consents to notification of the
sale of the Company to the employees, suppliers and customers of the
Business in the agreed terms
16.2 The restrictions contained in this clause shall continue to apply after
Completion without limit in time.
16.3 Without prejudice to the provisions of clause 6.2, the Purchaser and each
of the Vendors undertake to provide all such information known to him or
it or which on reasonable enquiry ought to be known to him or as may
reasonably be required by the Vendors or the Purchaser for the purpose of
complying with the requirements of law or of any applicable regulatory
authority to which either party is subject where such requirement has the
force of law.
17. Implied covenants for title and further assurance
17.1 The Law of Property (Miscellaneous Provisions) Xxx 0000 ("LPMPA") applies
to all dispositions of property made under or pursuant to this Agreement.
17.2 In addition to clause 17.1, the Vendors shall, from time to time on being
required to do so by the Purchaser, now or at any time in the future, do
or procure the doing of all such acts and/or execute or procure the
execution of all such documents in a form satisfactory to the Purchaser
as the Purchaser may reasonably consider necessary for giving full effect
to this Agreement and securing to the Purchaser the full benefit of the
rights, powers and remedies conferred upon the Purchaser in this
Agreement at the cost and expense of the Vendors.
18. Assignment
No party may assign the benefit of this Agreement whether absolutely or
by way of security except in the case of an assignment of all or part to
an Affiliate of the Purchaser and provided and so long as it remains an
Affiliate (failing which the benefit of this Agreement shall no longer be
available to such assignee nor to any assignor) save that a party may
assign such benefit absolutely or by way of security to a person other
than an Affiliate of the Purchaser with the prior consent in writing of
the other such consent not to be unreasonably withheld or delayed and any
purported assignment in contravention of this clause shall be
ineffective. Without prejudice to the generality of the foregoing, if a
new company is established as the holding company of the Purchaser with
the intention that the Public Offering be undertaken by such new company
in place of the Purchaser, the Purchaser shall be entitled to assign the
benefit and the burden of this Agreement to such new company whereupon
such company shall thenceforth be treated for all purposes as the
Purchaser hereunder, subject to (i) such new company executing a deed of
adherence undertaking to be bound by this Agreement in place of the
assignor; and (ii) a copy of such deed together with evidence of the
establishment of such new company being given to the Vendors.
-25-
19. Remedies cumulative: entire agreement
19.1 The rights, powers and remedies provided in this Agreement or expressly
referred to herein are cumulative and do not exclude any rights, powers
or remedies provided by law or by any other document other than this
Agreement.
19.2 This Agreement together with any documents referred to herein constitutes
the whole and only agreement between the parties relating to and
supersedes and extinguishes any prior drafts, previous agreements,
undertakings, representations, warranties and arrangements of any nature
whatsoever, whether or not in writing between the parties, in connection
with the subject matter hereof. In particular, except for paragraph 1.2
of the Vendors' Warranties, any warranties or representations relating to
or connected with any forecasts or projections provided to the Purchaser
by the Vendors of the Group are expressly withdrawn and shall have no
effect.
19.3 Each of the parties acknowledges that in entering into this Agreement on
the terms set out in this Agreement it has not relied on or been induced
to enter into this Agreement by any representation, warranty,
undertaking, promise or assurance made or given by any other party or any
other person, whether or not in writing, at any time prior to the
execution of this Agreement other than those expressly set out in this
Agreement or the Deed of Tax Covenant.
20. Waiver, variation and release
20.1 Save as expressly provided herein, no omission to exercise or delay in
exercising on the part of any party to this Agreement any right, power or
remedy provided by law or under this Agreement shall constitute a waiver
of such right, power or remedy or any other right, power or remedy or
impair such right, power or remedy. No single or partial exercise of any
such right, power or remedy shall preclude or impair any other or further
exercise thereof or the exercise of any other right, power or remedy
provided by law or under this Agreement.
20.2 Any waiver of any right, power or remedy under this Agreement must be in
writing and may be given subject to any conditions thought fit by the
grantor. Unless otherwise expressly stated any waiver shall be effective
only in the instance and only for the purpose for which it is given.
20.3 No variation to this Agreement shall be of any effect unless it is agreed
in writing and signed by or on behalf of each party.
20.4 Any liability to the Purchaser under this Agreement may in whole or in
part be released, compounded or compromised or time or indulgence given
by the Purchaser in its absolute discretion as regards any of the Vendors
under such liability without in any way prejudicing or affecting its
rights against any other or others of the Vendors under the same or like
liability.
21. Costs and expense
Each party shall pay its own costs and expenses in relation to the
negotiation, preparation, execution and carrying into effect of this
Agreement and other agreements forming part of the transaction. For the
avoidance of doubt, the Company shall pay all fees of Mundays properly
payable by the Company in respect of work undertaken for the Company
(excluding work in respect of the matters referred to in Clause 2.1.2
other than the negotiation of the terms of the 5 year lease).
-26-
22. Payments
All payments to be made under this Agreement shall be made in full
without any set-off or counterclaim and free from any deduction or
withholding save as may be required by law in which event such deduction
or withholding will not exceed the minimum amount which it is required by
law to deduct or withhold and in cases where the payee does not receive a
credit for such deduction the payer will simultaneously pay to the payee
such additional amounts as will result in the receipt by the payee of a
net amount equal to the full amount which would otherwise have been
receivable had no such deduction or withholding been required.
23. Notices
23.1 Any communication to be given in connection with the matters contemplated
by this Agreement shall except where expressly provided otherwise be in
writing and shall either be delivered by hand or sent by first class
pre-paid post. Delivery by courier shall be regarded as delivery by hand.
23.2 Such communication shall be sent to the address of the relevant party
referred to in this Agreement or to such other address as may previously
have been communicated to the other party in accordance with this clause.
Each communication shall be marked for the attention of the relevant
person.
23.3 A communication shall be deemed to have been served:-
23.3.1 if delivered by hand at the address referred to in clause 23.2, at
the time of delivery;
23.3.2 if sent by first class pre-paid post to the address referred to in
clause 23.2, at the expiration of two clear days after the time of
posting.
If a communication would otherwise be deemed to have been delivered
outside of normal business hours (being 9:30 a.m. to 5:30 p.m. on a
Business Day) in the time zone of the territory of the recipient under
the preceding provisions of this clause, it shall be deemed to have been
delivered at the opening of business on the next Business Day.
23.4 In proving service of the communication, it shall be sufficient to show
that delivery by hand was made or that the envelope containing the
communication was properly addressed and posted as a first class pre-paid
letter.
23.5 A party may notify the other parties to this Agreement of a change to its
name, relevant person, or address for the purposes of 23.2 PROVIDED THAT
such notification shall only be effective on:-
23.5.1 the date specified in the notification as the date on which the
change is to take place; or
23.5.2 if no date is specified or the date specified is less than five
clear Business Days after the date on which notice is deemed to
have been served, the date falling five clear Business Days after
notice of any such change is deemed to have been given.
-27-
23.6 For the avoidance of doubt, the parties agree that the provisions of this
clause shall not apply in relation to the service of Service Documents,
but that any notice given in the manner provided by clause 28 shall be
deemed to be notice to all of the Vendors.
23.7 Any notice to be given by the Vendors shall be sufficiently given on
behalf of them all by at least (but no less than) a majority by numbers
thereof and the rights of the Vendors shall be sufficiently exercised or
waived on behalf of them if exercised or waived by at least (but no less
than) a majority by numbers thereof.
24. Time of the essence
Time shall be of the essence of this Agreement as regards any time, date
or period mentioned herein. If any such time, date or period (or
variation of any of them) is varied in accordance with the provisions of
this Agreement, such varied time, date or period shall be of the essence.
25. Counterparts
25.1 This Agreement may be executed in any number of counterparts and by the
parties on different counterparts.
25.2 Each counterpart shall constitute an original of this Agreement but all
the counterparts shall together constitute one and the same Agreement.
26. Agreement to continue in full force and effect
This Agreement shall, to the extent that it remains to be performed,
continue in full force and effect notwithstanding Completion.
27. Confidentiality
27.1 Each of the Vendors hereby undertakes with the Purchaser that it shall
both during and after the term of this Agreement preserve the
confidentiality of, and not directly or indirectly reveal, report,
publish, disclose or transfer or use for its own or any other purposes
Confidential Information except:-
27.1.1 in the circumstances set out in 27.2 below; or
27.1.2 to the extent otherwise expressly required or permitted by this
Agreement; or
27.1.3 with the prior consent in writing of the party to whose affairs
such Confidential Information relates.
27.2 The circumstances referred to in clause 27.1.1 above are:-
27.2.1 where the Confidential Information, before it is furnished to the
Vendor, is in the public domain; or
27.2.2 where the Confidential Information, after it is furnished to the
Vendor enters the public domain otherwise than as a result of (i)
a breach by the Vendor of its obligations in this clause 27 or
(ii) a breach by the person who disclosed that Confidential
Information of his confidentiality obligation and the Vendor is
aware of such breach; or
-28-
27.2.3 if and to the extent the Vendor makes disclosure of the
Confidential Information to any person:
(a) in compliance with any requirement of law; or
(b) in response to a requirement of the Stock Exchange or the
Panel on Take-overs and Mergers or any other applicable
regulatory authority to which the Vendor is subject where
such requirement has the force of law; or
(c) in order to obtain tax or other clearances or consents from
the Inland Revenue or other relevant taxing or regulatory
authorities; or
27.2.4 to the employees, directors, agents, consultants and professional
advisers of the Vendor, in each case on the basis that such
disclosee is made fully aware of the obligation of confidence and
that such Vendor is responsible for such disclosee's compliance
with such obligation;
PROVIDED THAT any such information disclosable pursuant to paragraphs (a),
(b) or (c) shall be disclosed to the extent permitted by law and only after
consultation with the other party.
27.3 The restrictions contained in this clause shall continue to apply after
the Completion without limit in time.
28. Agent for service
28.1 Each Vendor irrevocably agrees that any Service Document may be
sufficiently and effectively served on it in connection with Proceedings
in England and Wales by service on the Vendors' Solicitors, if no
replacement agent has been appointed and notified to the Purchaser
pursuant to clause 28.4. or on the replacement agent if one has been
appointed and notified to the Purchaser.
28.2 Any Service Document served pursuant to this clause shall be marked for
the attention of:-
28.2.1 the Vendors' Solicitors at their address specified in this
Agreement or such other address within England and Wales as may be
notified to the Purchaser by the Vendors; or
28.2.2 such other person as is appointed as agent for service pursuant to
clause 28.4 at the address notified pursuant to clause 28.4.
28.3 Any document addressed in accordance with clause 28.2 shall be deemed to
have been duly served if:-
28.3.1 left at the specified address, when it is left; or
28.3.2 sent by first class post, two clear Business Days after the date
of posting.
28.4 If the agent referred to in clause 28.1 (or any replacement agent
appointed pursuant to this clause 28.4) at any time ceases for any reason
to act as such, the applicable Vendor shall appoint a replacement agent
to accept service having an address for service in England and Wales and
shall notify the Purchaser of the name and address of the
-29-
replacement agent; failing such appointment and notification, the
Purchaser shall be entitled by notice to the Vendor to appoint such a
replacement agent to act on the Vendor's behalf.
28.5 A copy of any Service Document served on an agent pursuant to this clause
shall be sent by post to the Vendor at its address for the time being for
the service of notices and other communications under clause 23, but no
failure or delay in so doing shall prejudice the effectiveness of service
of the Service Document in accordance with the provisions of clause 28.1.
29. Governing law and jurisdiction
29.1 This Agreement shall be governed by and construed in accordance with
English law.
29.2 The parties to this Agreement irrevocably agree that the courts of
England shall have jurisdiction to settle any dispute which may arise out
of or in connection with this Agreement and that accordingly any
Proceedings may be brought in such courts.
29.3 For the avoidance of doubt, the Vendors expressly and specifically agree
and accept the terms of this clause and sign below in recognition of this
fact.
AS WITNESS the hands of the parties or their duly authorised representatives on
the date first appearing at the head of this Agreement.
-30-
Schedule 1
The Vendors
(1) (2) (3) (4) (5) (6)
Name and Number of Total Number of Par Value of Retention
Address Shares held Consideration Consideration Loan Notes Account
(USD) Shares held ((pound)) ((pound))
'A' Ordinary 'B' Ordinary
X X Xxxxxxxx 180,000 -- 3,910,800 128,323 -- 132,000
Xxxxxx Xxxx
Xxxxxxxxxx
Xxxx Xxxxxx
XX00 0XX
X X Xxxxx -- 952 87,292 624 4,048 2946
0 Xxxxxxxxxx Xxxxxxxx
Xxxxxxxxxx Xxxxxx
Xxxxxx
X0X 0XX
Stelby Holdings Limited -- 30,000 559,896 3,999 127,500 18,898
X.X. Xxx 000
1 Xxxxxx Place
St. Helier
Jersey
-31-
Central Investments Limited -- 134,286 2,506,208 17,901 570,714 84,591
La Motte Xxxxxxxx
La Motte Street
St. Helier
Jersey
The Naggar Family Pension -- 30,000 559,896 3,999 127,500 18,898
Scheme
x/x 00 Xxxxxxxxx Xxxxxxx
Xxxxxx XX0X 0XX
X X Xxxxxxxxxxx -- 3,810 71,107 508 16,190 2,400
0 Xxxxxxx Xxxxxx
Xxxxxx XX0
M D Xxxxxxxx ) -- 382 7,130 51 4,048 241
Mrs J Xxxxxxxx ) 570 10,638 76 -- 359
both of
00 Xxxxxxxx Xxxxxxx
Xxxxxxxxx Xxxx
Xxxxxx
X00 0XX
G Xxxxxx 20,000 ___--__ 434,533 14,258 -- 14,667
Xxxxxx Xxxxxx & Associates
Limited
Xxxxxxxxx Xxxxx
Xxxxxxx Xxxxxx
Xxxxxx XX0X 0XX
TOTAL 200,000 200,000 8,147,500 169,739 850,000 275,000
-32-
Schedule 2
Directors of the Company and the Subsidiaries
---------------------------------------------
Company
-------
Names of Directors
------------------
X.X. Xxxxxxxx
X. Xxxxxx
G.A. Xxxxxx
X.X. Xxxxx
Xxxx Print Concepts Limited
---------------------------
Names of Directors
------------------
X.X. Xxxxxxxx
X. Xxxxxx
G.A. Naggar
X.X. Xxxxx
-33-
Schedule 3
The Properties
Part 1
Freeholds
None
Part 2
Leases
1. Property: Xxxx 0 Xxxxx Xxxxxxx Xxxxxxxxxx Xxxxxx, Xxxxxxx
Date of Lease: 24 October 1997
Parties to Lease: (1) Xxxxxxx Management Ltd
(2) Roda Print Concepts Ltd
Existing Use: Storage
Rent: (pound)15,000 p.a.
2. Property: 00-00 Xxxxxxxx Xxxxx, Xxxxxxx
Date of Lease: not yet completed
Parties to Lease: (1) Mr. R X. Xxxxx, Xx. X. Xxxxxxx and Fairmont Trustee
Services Ltd
(2) Roda Print Concepts Ltd
Existing Use: Printing Works
Rent: (pound)36,000 p.a.
Inferior Lease: 28 October 1960 to The London Electricity Board for 37
years from 21 June 1960
3. Property: Xxxxxxx Xxxx 0 Xxxxxxxxxx Xxxxxxx Xxxxxx, Xxxxxx XX00
Date of Lease: 26 January 1990
Parties to Lease: (1) London & Brighton Estates Ltd
(2) Roda Financial Print Ltd
-34-
(3) Xx. X. Xxxxxxx and Xx. X. X. Xxxxx
Existing Use: Storage
Rent: Not applicable (lease expired)
Part 3
Other
None
-35-
Schedule 4
Part 1
The Company
Full Name : Roda Limited
Company No: : 03243754
Registered Office: : 00/00 Xxxxxxxx Xxxxx, Xxxxxx XX00 0XX
Secretary : Xxxxx Xxxxxxx
Auditors : Ernst & Young
Tax District and Reference : Xxxxxxxx 0 Xxxxxxxx Ref: 019 80190 27930
Part 2
The Subsidiaries
Full Name : Roda Print Concepts Limited
Company No: : 0237 3618
Registered Office: : 00/00 Xxxxxxxx Xxxxx, Xxxxxx, XX00 0XX
Secretary : Xxxxx Xxxxxxx
Auditors : Ernst & Young
Authorised Share Capital :
Issued Share Capital and (pound)20,000 divided into: 10,000 A ordinary shares of (pound)1 each
9,946 B ordinary shares of (pound)1 each
27 A preference shares of (pound)1 each
27 B preference shares of (pound)1 each
Shareholders : Roda Limited 100 A ordinary shares
46 B ordinary shares
Xxxxx Xxxxx 14 A preference shares
14 B preference shares
Xxxxxxxx Xxxxx 13 A preference shares
13 B preference shares
Tax District and Reference : Xxxxxxxx 0 Xxxxxxxx Ref: 623 17924 07625
-36-
Schedule 5
The Vendors' Warranties
Part 1
1. Preliminary
1.1 The facts set out in the recitals and the schedules and all information
contained in the Disclosure Documents are true and accurate in all
material respects and not misleading and all information which has been
given in writing to the Purchaser or its representatives or professional
advisers by the Vendors or by any Director, officer or other official of
the Company or by their respective professional advisers or other agents
in the course of the negotiations leading to this Agreement was when
given and is now true and accurate in all material respects and not
misleading.
1.2 The forecasts for 1998 in the agreed terms were prepared in good faith
and on the basis of assumptions which were considered with due care by
Xxxxx Xxxxxxxx and Xxxxx Xxxxx at the time the forecasts were made, and
which have been fully disclosed to the Purchaser.
1.3 So far as the Vendors are aware, having made due and careful enquiry,
there is no fact or matter which has not been disclosed which renders any
such information untrue, inaccurate or misleading or the disclosure of
which might reasonably affect the willingness of a willing purchaser to
purchase the Shares on the terms of this Agreement.
1.4 Each Vendor and Covenantor (as defined in the Deed of Tax Covenant) on
his own behalf only confirms that he has full power to enter into and
perform this Agreement and the Deed of Tax Covenant respectively and this
Agreement and the Deed of Tax Covenant constitute binding obligations on
him in accordance with their terms.
2. The Company
2.1 The particulars of the Company and the Subsidiary set out in the recitals
and schedule 4 are true and complete.
2.2 The copy of the memorandum and articles of association of the Company
which is comprised in the Disclosure Documents is true and complete in
all respects and has embodied in it or annexed to it a copy of every such
resolution and agreement as is referred to in section 380(4), CA 85 and
the Company has at all times carried on its business and affairs in all
respects in accordance with its memorandum and articles of association
and all such resolutions and agreements.
2.3 So far as the Vendors are aware, having made due and careful enquiry, the
Company has complied with the provisions of the Companies Acts and all
returns, particulars, resolutions and other documents required to be
filed with or delivered to the Registrar of Companies or to any other
authority whatsoever by the Company have been correctly and properly
prepared and so filed or delivered.
2.4 The Shares constitute the whole of the issued share capital of the
Company. Each Vendor (for himself only) confirms that there is no
Encumbrance or any form of agreement (including conversion rights and
rights of pre-emption) on, over or affecting
-37-
his Shares or any unissued shares, debentures or other securities of the
Company and there is no agreement or commitment to give or create any of
the foregoing. No claim has been made by any person to be entitled to any
of the foregoing and no person has the right (exercisable now or in the
future and whether contingent or not) to call for the issue of any share
or loan capital of the Company under any of the foregoing. The shares of
the Subsidiary are held and owned as shown in part 2 of schedule 4 free
from all encumbrances.
2.5 The Company has not at any time:-
2.5.1 repaid, redeemed or purchased (or agreed to repay, redeem or
purchase) any of its shares, or otherwise reduced (or agreed to
reduce) its issued share capital or any class of it or capitalised
(or agreed to capitalise) in the form of shares, debentures or
other securities or in paying up any amounts unpaid on any shares,
debentures or other securities, any profits or reserves of any
class or description or passed (or agreed to pass) any resolution
to do so; or
2.5.2 directly or indirectly provided any financial assistance for the
purpose of the acquisition of shares in the Company or any holding
company of the Company or for the purpose of reducing or
discharging any liability incurred in such an acquisition whether
pursuant to sections 155 and 156, CA 85 or otherwise.
2.6 The Company has not stopped payment and is not insolvent nor unable to
pay its debts according to section 123, Insolvency Xxx 0000. No order has
been made or petition presented or resolution passed for the winding up
of the Company and no distress, execution or other process has been
levied on any of its assets. No administrative or other receiver has been
appointed by any person over the business or assets of the Company or any
part thereof, nor has any order been made or petition presented for the
appointment of an administrator in respect of the Company.
2.7 No order has been made or petition presented or resolution passed for the
winding up of the Company and no distress, execution or other process has
been levied on any of its assets.
2.8 Insofar as the Loan Notes have been issued, the same are owned by and
registered in the name of the Vendors as indicated in column (5) of
schedule 1.
3. Connected Business
3.1 The Company:-
3.1.1 is not and has not agreed to become the holder or other owner of
any class of any shares, debentures or other securities of any
other company (whether incorporated in the United Kingdom or
elsewhere) other than the Subsidiary;
3.1.2 has not agreed to become a subsidiary of any other company or
under the control of any group of companies or consortium;
3.1.3 is not and has not agreed to become a member of any partnership,
joint venture, consortium or other unincorporated association
other than a recognised trade association or agreement or
arrangement for sharing commissions or other income;
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3.1.4 has no branch, place of business or substantial assets outside
England and Wales or any permanent establishment (as that
expression is defined in any relevant Order in Council made
pursuant to section 788, Taxes Act) in any country outside the
United Kingdom.
4. Accounts
4.1 The Accounts:-
4.1.1 were prepared in accordance with the requirements of all relevant
statutes, with good accounting principles and practices generally
accepted at the date hereof in the United Kingdom (including the
Accounting Standards) for companies carrying on a similar business
to the Business and on a basis consistent with preceding
accounting periods of the Subsidiary and are true and fair in all
material respects;
4.1.2 disclose a true and fair view of the assets, liabilities and state
of affairs of the Subsidiary at the Balance Sheet Date and of its
profits for the financial year ended on such date;
4.1.3 contain full provision or reserve for bad and doubtful debts and
for depreciation on fixed assets, which provision or reserve was
when made and is now adequate;
4.1.4 contain proper and adequate reserves or provision for all
Taxation, including deferred taxation as defined in SSAP 15
(sufficient provision being made in a deferred taxation account
for any corporation tax on chargeable gains and balancing charges
that would arise on the sale of all fixed assets at the values
attributed to them in the Accounts);
4.1.5 disclose, note or provide for all liabilities of the Subsidiary
which were known, actual or contingent (including contingent
liabilities to customers and contingent liabilities for Taxation);
4.1.6 reflect all the fixed and loose plant and machinery, equipment,
furniture, fittings and vehicles used by the relevant company at
the Balance Sheet Date and (apart from depreciation in the
ordinary course of business) their aggregate value is not less
than at the Balance Sheet Date and none has been acquired for any
consideration in excess of its net realisable value at the date of
such acquisition or otherwise than by way of a bargain at arm's
length.
4.2 The basis of valuation for work-in-progress of the Company has remained
in all material respects consistent with that adopted for the purpose of
the audited accounts of the Subsidiary in respect of the beginning and
end of each of the accounting periods of each such company for the last
three financial years.
4.3 The Management Accounts:
4.3.1 have been prepared with due care and on a basis consistent with
the accounting principles and practice used in the preparation of
the Accounts;
4.3.2 fairly reflect the assets and liabilities of the Company at, and
its profits for the nine month period ended on, 30 September 1997.
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4.4 The profits of the Company for the two years ended on the Balance Sheet
Date as shown by the Accounts, the Management Accounts and by the audited
accounts for previous periods delivered to the Purchaser and the trend of
profits shown by them have not (except as Disclosed in them) been
affected to a material extent by inconsistencies of accounting practices,
by the inclusion of non-recurring items of income or expenditure, by
transactions entered into otherwise than on normal commercial terms or by
any other factors rendering such profits for all or any of such periods
exceptionally high or low.
4.5 All accounts, books, ledgers, financial and other necessary records of
whatsoever kind of the Company (including all invoices and other records
required for VAT purposes) have been fully, properly and accurately
maintained, are in the possession of the Company and contain true and
accurate records of all matters including those required to be entered in
them by the Companies Acts and no notice or allegation that any of the
same is incorrect or should be rectified has been received.
5. Post-Balance Sheet Date events
5.1 Since the Balance Sheet Date, the Company:-
5.1.1 has carried on its business in the ordinary and usual course and
nothing has been done which would be likely to prejudice the
interests of the Purchaser as a prospective purchaser of the
Shares;
5.1.2 has not experienced any deterioration in its financial position or
turnover or suffered any material diminution of its assets by the
wrongful act of any person and the Company has not had its
business or profitability adversely affected by the loss of any
important customer or source of supply or by any abnormal factor
not affecting similar businesses to a like extent and there are no
facts which are likely to give rise to any such effects;
5.1.3 has not acquired or disposed of or agreed to acquire or dispose of
any assets or assumed or incurred or agreed to assume or incur any
liabilities (actual or contingent) otherwise than in the ordinary
course of business;
5.1.4 has not declared, made or paid any dividend, bonus or other
distribution of capital or income (whether a qualifying
distribution or otherwise), and (excluding fluctuations in
overdrawn current accounts with bankers) no loan or loan capital
of the Company has been repaid in whole or in part or has become
due or is liable to be declared due by reason of either service of
a notice or lapse of time or otherwise howsoever;
5.1.5 has not made any change to the remuneration, terms of employment,
emoluments or pension benefits of any present or former director,
officer or employee of the Company who on the Balance Sheet Date
was entitled to remuneration in excess of (pound)50,000 per annum,
has not appointed or employed any additional director, officer or
employee entitled as aforesaid and has not appointed any new
consultant or revised the existing arrangements of any consultants
already appointed by the Company;
5.1.6 has received payment in full of all debts owing to the Company
shown in the Accounts (subject to any provision for bad and
doubtful debts made in the Accounts), has not released any debts
in whole or in part and has not written off debts;
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5.1.7 has not entered into contracts involving capital expenditure in an
amount exceeding (pound)25,000 in the aggregate;
5.1.8 has not become aware that any event has occurred which would
entitle any third party to terminate any contract or any benefit
enjoyed by it or call in any money before the normal due date
therefor;
5.1.9 has paid its creditors within the times agreed with such creditors
and does not have any debts outstanding which are overdue for
payment by more than four weeks;
5.1.10 has not borrowed or raised any money or taken any financial
facility (except such short term borrowings from bankers as are
within the amount of any overdraft facility which was available to
the Company at the Balance Sheet Date) or since the Balance Sheet
Date renegotiated or received any notice from any banker that such
banker wishes to renegotiate any overdraft facility available to
the Company at the Balance Sheet Date;
5.1.11 has not made any change to its accounting reference date and no
accounting period of the Company has ended since the Balance Sheet
Date;
5.1.12 has not made a payment or incurred an obligation to make a payment
which will not be deductible in computing trading profits for the
purposes of corporation tax or as a management expense of the
Company.
6. Transactions with the Vendors, Directors and Connected Persons
6.1 There is not outstanding:-
6.1.1 any indebtedness or other liability (actual or contingent) owing
by the Company to any Vendor or Director or any Connected Person
or owing to the Company by any Vendor, or Director or any
Connected Person; or
6.1.2 any guarantee or security for any such indebtedness or liability
as aforesaid.
6.2 There is not outstanding, and there has not at any time during the last
six years been outstanding, any agreement, arrangement or understanding
(whether legally enforceable or not) to which the Company is a party and
in which any Vendor, Director or former director of the Company or any
Connected Person is or has been interested whether directly or
indirectly.
6.3 The Company is not a party to nor has its profits or financial position
during the last six years been affected by any agreement or arrangement
which is not entirely of an arm's length nature.
6.4 No Connected Person of any Vendor, Director or former director of the
Company is entitled to or has claimed entitlement to any remuneration,
compensation or other benefit from the Company.
7. Finance
7.1 Particulars of all money borrowed by the Company have been Disclosed. The
total amount borrowed by the Company from any source does not exceed any
limitation on its borrowing contained in the articles of association of
the Company or in any
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debenture or loan stock trust deed or instrument or any other document
executed by the Company and the amount borrowed by the Company from each
of its bankers does not exceed the overdraft facility agreed with such
banker. The Company has no outstanding loan capital other than the Loan
Notes.
7.2 All debts owing to the Company are collectable in the ordinary course of
business and each such debt will realise in full its face value within
three months of its due date for payment. The debts owing to the
Subsidiary shown in the Accounts (subject to any provision for bad or
doubtful debts made in the Accounts) were paid in full on their due
dates.
7.3 Particulars of the balances on all the Company's bank accounts as at a
date not more than three days before the date of this Agreement have been
Disclosed and the Company has no other bank accounts. Since the date of
such particulars there have been no payments out of any such bank
accounts except for routine payments which have been Disclosed.
7.4 All unpresented cheques drawn by the Company have been Disclosed and
there are no such unpresented cheques drawn otherwise than in the normal
course of business.
7.5 Having regard to its existing banking and other facilities, so far as the
Vendors are aware, the Company has sufficient working capital for the
purpose of continuing to carry on its business in its present form and
for the purposes of executing, carrying out and fulfilling in accordance
with their terms all orders, projects and contractual obligations which
have been placed with or undertaken by the Company.
7.6 The Vendors have Disclosed full details and true and correct copies of
all documents relating to all debentures, acceptance lines, overdrafts,
loans or other financial facilities outstanding or available to the
Company and all Encumbrances to which any asset of the Company is
subject. Neither the Vendors nor the Company has done anything whereby
the continuance of any such facility or Encumbrance in full force and
effect might be affected or prejudiced.
7.7 No grants have been made to the Company in the last six years.
7.8 The Company is not responsible for the indebtedness of any other person
and no person other than the Company or a Subsidiary has given any
guarantee of or security for any overdraft, loan or loan facility granted
to the Company or any Subsidiary.
8. Property
8.1 The Properties comprise all the land and premises owned, controlled, used
or occupied at any time by the Company and/or the Subsidiary and all the
rights or interests vested in the Company and/or the Subsidiary relating
to any land and premises at the date hereof and the particulars set out
in schedule 3 are true and accurate and not misleading.
8.2 The Company has not:-
8.2.1 surrendered any lease, licence or tenancy to the landlord without
first satisfying itself that the landlord had good title to accept
such surrender and without receiving from the landlord an absolute
release from all liability arising under such lease, licence or
tenancy;
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8.2.2 assigned, or otherwise disposed of, any lease, licence or tenancy
without receiving a full and effective indemnity from the assignee
or transferee in respect of its liability under such lease,
licence or tenancy;
8.2.3 been a guarantor of a tenant's liability under any lease, licence
or tenancy;
8.2.4 assigned or otherwise disposed of any leasehold property in such a
way that it retains any other residual liability in respect
thereof.
8.3 The Subsidiary has a good title to each of the Properties and has Legal
and Beneficial Title to the same.
8.4 The Company has in its possession or unconditionally held to its order
all the leases relating to each of the Properties, and there are no
material ancillary documents and papers.
8.5 The Properties, the title deeds and documentation relating thereto, and
all fixtures and fittings and plant, equipment and other chattels on the
Properties, are not to the Vendors' knowledge having made all due
searches and enquiries subject to any Encumbrance or overriding interest
(as defined in section 70, Land Registration Act 1925) nor is there any
person in possession or occupation of or who has or claims any right of
any kind in respect of any of the Properties adversely to the estate,
interest, right or title therein of the Subsidiary ;
8.6 So far as the Vendors are aware having made all due searches and
enquiries there are no rights, interests, covenants, restrictions,
reservations, licences or easements nor any disputes or outstanding
notices (whether given by a landlord, a local authority or any other
person) nor (without prejudice to the generality of the foregoing) any
other matters or things which adversely affect the value of the
Subsidiary's interest in any of the Properties or the proper use and
enjoyment of any of the Properties for the purpose of the business now
being carried on at the Properties by the Company and/or the Subsidiary.
8.7 There has been no dealing with any of the Properties otherwise than at
arm's length and in particular no dealing at an under-value which may
give rise to a claim for improper stamping or setting aside.
8.8 None of the Properties is subject to the payment of any outgoings other
than the usual rates and taxes and all sums due to date in respect
thereof have been paid.
8.9 No proposal relating to the rateable value of any of the Properties has
been determined by the Valuation and Community Charge Tribunal or Land
Tribunal and there is no subsisting proposal to challenge the rateable
value of any of the Properties.
8.10 Each of the Properties:-
8.10.1 enjoys access and egress over roads and footpaths which have been
adopted by the appropriate highway authority and are maintainable
at the public expense;
8.10.2 drains foul sewage and surface water to public sewers, is served
by water, electricity, gas and telephone utilities; and
8.10.3 so far as the Vendors are aware having made all due searches and
enquiries has the benefit of all other easements and rights
necessary for its proper use and enjoyment for the purposes of the
business now being carried on at the
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Properties by the Company and such easements and rights are held
on terms which do not entitle any person to terminate or curtail
the same.
8.11 Where the Company or any predecessor in title has sold off or has agreed
to sell off land adjoining or near to any of the Properties there were or
will be excepted and reserved to the Company all necessary and
appropriate easements and other rights for the benefit of the Properties.
8.12 The Company has not entered into any commitment (whether legally binding
or not) and the Company is not party to any subsisting agreement with any
person or company whereby a fee (including but not limited to an abort
fee) will be paid to such person or company in respect of the management,
use, development, letting or sale of any of the Properties.
8.13 There are no unpaid charges for the construction or adoption of any road
or sewer or other service serving the Property.
8.14 In relation to each of the Properties its existing use is set out in Part
I of schedule 3 ("Existing Use").
8.15 To the Vendors' knowledge having made all due searches and enquiries
there are no lawfully enforceable restrictions or prohibitions which
restrict or prohibit the Existing Use of any of the Properties.
8.16 The Existing Use of each of the Properties is believed by the Vendors
(having made all due searches and enquiries) to be the permitted use
under the Town and Country Planning legislation (which term includes the
Town and Country Planning Xxx 0000, the Planning (Listed Buildings and
Conservation Areas) Xxx 0000, the Planning (Hazardous Substances) Xxx
0000 and the Planning (Consequential Provisions) Act 1990) and not to be
a temporary or personal use.
8.17 Any development (as defined by section 5.5 Town and Country Planning Act
1990) carried out in relation to each of the Properties has been lawful
and all necessary consents and permissions have been obtained for such
development.
8.18 The consents and permissions referred to in paragraph 8.17 are valid,
subsisting and are also either unconditional or subject only to
conditions which have been satisfied so that nothing further remains to
be done thereunder.
8.19 The Company is not aware of any resolution, proposal, order or act made
or contemplated for the compulsory acquisition of any of the Properties
by the local or any other authority nor any outstanding order, notice or
other requirement of any such authority that affects the Existing Use of
any of the Properties or involves expenditure in compliance with it nor
any other circumstances which may result in any such order or notice
being made or served or which may otherwise affect any of the Properties.
8.20 No compensation has been received consequent upon a refusal of any
planning permission affecting any of the Properties or the imposition of
any restrictions in any such planning permission and no such planning
permission is suspended.
8.21 None of the buildings or other structures or erections on any of the
Properties have been listed under section 1, Planning (Listed Buildings
and Conservation Areas) Xxx 0000 ("PLBCA") nor so far as the Vendors are
aware having made all due searches and enquiries has the relevant local
authority authorised the service of any building preservation notice
under section 3, PLBCA or any repairs notice under section 48, PLBCA in
respect of any of the Properties or any building structure or erection
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thereon nor so far as the Vendors are aware having made all due searches
and enquiries has the relevant local authority made or resolved to make
any noise abatement zone order under section 63, Control of Pollution Xxx
0000 for any of the areas in which any of the Properties are included.
8.22 To the Vendors' knowledge having made all due searches and enquiries,
none of the Properties is within an area of archaeological importance nor
is any building or erection on any of the Properties a scheduled monument
within the meaning set out in the Ancient Monuments and Xxxxxxxxxxxxxx
Xxxxx Xxx 0000.
8.23 Where any of the Properties is leasehold, particulars of each lease
vested in the Subsidiary are set out in Part 2 of schedule 3 and in
relation to each such lease:-
8.23.1 the Vendors believe that having regard to the title to the
relevant property the landlord and all superior landlords had good
title to grant the lease and any superior leases respectively;
8.23.2 the Vendors believe that having regard to the title to the
relevant property any consent necessary for the grant of the lease
has been obtained;
8.23.3 no rent reviews are or should be currently under negotiation or
the subject of a reference to an expert or arbitrator or the
Courts;
8.23.4 the receipt for the payment of rent which fell due immediately
prior to the date hereof is unqualified;
8.23.5 no notices of any material breaches of any covenants or conditions
contained in the lease have been given or received on the part of
either the landlord or the Subsidiary and the landlord has not
refused to accept rent or made any complaint of breach of
covenant;
8.23.6 no material alterations, improvements or additions have been made
to the Property to which the lease relates since the grant of the
lease or in respect of all such material alterations, improvements
or additions made all necessary consents and approvals have first
been obtained;
8.23.7 sections 24 to 28, Landlord and Xxxxxx Xxx 0000 have not been
excluded;
8.23.8 no surety has been released either expressly or by implication;
8.23.9 VAT is not chargeable on the rent or any other payment to be made
under the lease and no election has been made by the landlord to
waive exemption from VAT in respect of the lease.
8.24 The Company holds each of the Properties subject to any inferior leases
referred to in paragraph 8.25 but is otherwise in actual occupation of
each of the Properties and no other person is or will be entitled to
occupy or use any part of any of the Properties.
8.25 Particulars of each lease, underlease or licence deriving immediately or
otherwise out of the interest of the Company are set out in Part 2 of
schedule 3 (each such lease, underlease or licence being referred to as
an "Inferior Lease"):-
8.26 No part of any of the Properties which are the subject of an inferior
lease and intended for occupation is vacant.
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8.27 The Company is not aware (having made all due searches and enquiries) of
any material breach or allegation of material breach of the requirements
of:-
the Shops Xxx 0000 and 1965
the Clean Air Xxx 0000
the Construction (Design and Management) Regulations 1995
the Radioactive Substances Xxx 0000
the Xxxxxxxxx Xxx 0000
the Offices Shops and Railway Premises Act 1963
the Fire Precautions Xxx 0000
the Health and Safety at Work etc Xxx 0000
the Control of Pollution Xxx 0000
the Food and Environmental Protection Xxx 0000
the Planning (Hazardous Substances) Xxx 0000
the Environmental Protection Xxx 0000
the Water Resources Xxx 0000
the Water Industry Xxx 0000 or
the Public Health Acts
or other legislation concerning health, safety or environmental matters
or any regulations, orders, notices or directions made under any of such
legislation which in any such case affect any of the Properties or any
property in the vicinity thereof or anything due thereon.
8.28 Where required a fire certificate has been issued in respect of each of
the Properties and, so far as the Vendors are aware (having made due
enquiry of appropriate employees of the Group), each of the Properties
complies in all respects with current fire regulations and the current
requirements of the insurers of the Properties.
8.29 So far as the Vendors are aware, there are no latent or patent defects in
the buildings and structures on or comprising Xxxx 0 Xxxxx Xxxxxxx and in
the construction of the buildings and its structures on or comprising
Xxxx 0 Xxxxx Xxxxxxx or any alterations thereto none of the following
materials were used:-
8.29.1 high alumina cement in structural elements;
8.29.2 wood wool slabs in permanent formwork to concrete or in structural
elements;
8.29.3 calcium chloride in admixtures for use in reinforced concrete;
8.29.4 asbestos or asbestos containing products as defined in the
Asbestos Regulations 1969 and 1987;
8.29.5 naturally occurring aggregates for use in reinforced concrete
which do not comply with British Standard Specification 882: 1983
and naturally occurring aggregates for use in concrete which do
not comply with the provisions of British Standard Specification
8110: 1985;
8.29.6 urea formaldehyde foam or materials which may release formaldehyde
in quantities which may be hazardous with reference to the limits
set from time to time by the Health and Safety Executive;
8.29.7 materials which are generally comprised of mineral fibres either
man-made or naturally occurring which have a diameter of 3 microns
or less or which
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contain fibre not sealed or otherwise stabilised to ensure that
fibre migration is prevented; or
8.29.8 any other materials not in accordance with good design standards
and good building practice at the time of construction of any such
buildings.
9. Environmental
9.1 The information contained in the environmental review of the Subsidiary
which has been Disclosed is accurate and not misleading.
9.2 All Permits which have been disclosed to the Purchaser are in full force
and effect and their terms and conditions have been complied with.
9.3 So far as the Vendors are aware, the Company has not during its
occupation of the Properties or of any other properties occupied by it
acted in material breach of Environmental Law and so far as the Vendors
are aware no work, repairs, remedy, construction, or capital expenditure
is required under any Environmental Law or in order to carry on lawfully
the Business at the Property.
9.4 So far as the Vendors are aware, having made due enquiry of relevant
employees of the Company, the Company has not received any notice claim
or other communication alleging any actual or potential Environmental
Liability.
10. Other assets
10.1 The Company has legal and beneficial title to all assets of the Company
which are included in the Accounts or the Management Accounts or have
otherwise been represented as being the property of the Company or which
were at the Balance Sheet Date used or held for the purposes of its
business and (except for assets disposed of or realised by the Company in
the ordinary course of business) the Company retains such title to all
such assets free from any Encumbrance, hire or hire purchase agreement or
leasing agreement or agreement for payment on deferred terms and all such
assets are in the possession and control of the Company and are sited
within the United Kingdom.
10.2 The Company has legal and beneficial title to all assets which have been
acquired by the Company since the Balance Sheet Date and the same are in
the possession and control of the Company and none is the subject of any
Encumbrance nor has the Company created or agreed to create any
Encumbrance or entered into any factoring arrangement, hire-purchase,
conditional sale or credit sale agreement which has not been disclosed
and in respect of any such Encumbrance, arrangement or agreement so
disclosed there has been no default by the Company in the performance or
observance of any of the provisions thereof.
10.3 The plant and machinery (including fixed plant and machinery) and all
vehicles and office and other equipment shown in the Accounts or acquired
since the Balance Sheet Date or otherwise used in connection with the
Business which have not been disposed of in the ordinary course of
business:-
10.3.1 are in good repair and condition and are regularly maintained,
fully serviceable and in satisfactory working order; and
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10.3.2 are each capable of doing the work for which they were designed
and/or purchased and will each be so capable (subject to fair wear
and tear) during the period of time over which the value of such
assets will be written down to nil in the accounts of the Company.
11. Insurance
11.1 All the assets of the Company which are of an insurable nature are and
have at all material times been fully insured to their full replacement
value with a well established and reputable insurer against fire and all
other risks normally insured against by companies carrying on similar
businesses or owning property of a similar nature to those of the Company
and the Company is and has at all material times been adequately covered
against all legal liability and risks normally insured against by such
companies (including liability to employees or third parties for personal
injury or loss or damage to property, product liability and loss of
profit).
11.2 Particulars of all policies of insurance of the Company now in force have
been disclosed and such particulars are true and correct and all premiums
due on such policies have been duly paid and all such policies are valid
and in force. So far as the Vendors are aware there are no circumstances
which might lead to any liability under such insurance being avoided by
the insurers or the premiums being increased. There is no claim
outstanding under any such policies and there are no circumstances likely
to give rise to a claim.
12. Litigation
12.1 The Company is not now engaged in any litigation or arbitration
proceedings and there are no lawsuits or arbitration proceedings
threatened by or against the Company or any person for whose acts or
defaults the Company may be vicariously liable.
12.2 There is no matter or fact in existence known to the Vendors having made
due and careful enquiry of the directors of and senior management of the
Company which might give rise to any legal proceedings or arbitration
involving the Company including any which might form the basis of any
criminal prosecution against the Company.
12.3 The Company has not been notified of any injunction order or judgment
given by any court or governmental agency which is still in force and has
not given any undertaking to any court or to any third party arising out
of any legal proceedings.
13. Licences
13.1 The Company has all necessary licences (including statutory licences),
permits, consents and authorities (public and private) for the proper and
effective carrying on of the Business and in the manner in which the
Business is now carried on and all such licences, permits, consents and
authorities are valid and subsisting and the Vendors know of no reason
why any of them should be suspended, cancelled or revoked whether in
connection with the sale to the Purchaser or otherwise.
13.2 The Company has registered or applied to register all registrable
personal data held by it and all due and requisite fees in respect of the
Company's registrations under the Data Protection Act 1984 have been
paid. The details contained in such registrations or applications to
register are correct, proper and suitable for the purpose(s) for which
the Company holds or uses the personal data which are the subject of such
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registrations or applications to register, and the contents of all such
registrations or applications to register have been made available to the
Purchaser. All personal data held by the Company has been held in
accordance with the data protection principles and there has been no
unauthorised disclosure of personal data held by the Company. There are
no outstanding enforcement, deregistration or transfer prohibition
notices or any other nature of notice under the Data Protection Xxx 0000
currently outstanding against the Company, nor is there any outstanding
appeal against such notices nor is the Company aware of any circumstances
which may give rise to the giving of any such notices to the Company.
There are no unsatisfied requests to the Company made by data subjects in
respect of personal data held by the Company, nor any outstanding
applications for rectification or erasure of personal data. There are no
outstanding claims for compensation for inaccuracy, loss or unauthorised
disclosure of personal data nor is any personal data held by the Company
inaccurate nor has the Company lost or made any unauthorised disclosure
of any such data. Without prejudice to the specific provisions above, the
Company and its employees have complied in all respects with the
requirements of the Data Protection Xxx 0000.
14. Trading
14.1 There are in force no powers of attorney given by the Company other than
to the holder of an encumbrance solely to facilitate its enforcement nor
any other authority (express, implied or ostensible) given by the Company
to any person to enter into any contract or commitment or do anything on
its behalf other than any authority of employees to enter into routine
trading contracts in the normal course of their duties.
14.2 The acquisition of the Shares by the Purchaser or compliance with the
terms of this Agreement will not:-
14.2.1 so far as the Vendors are aware cause the Company to lose the
benefit of any right or privilege it presently enjoys or cause any
person who normally does business with the Company not to continue
to do so on the same basis as previously;
14.2.2 relieve any person of any obligation to the Company (whether
contractual or otherwise) or legally entitle any person to
determine any such obligation or any right or benefit enjoyed by
the Company or to exercise any right whether under an agreement
with or otherwise in respect of the Company;
14.2.3 conflict with or result in the breach of or constitute a default
under any of the terms, conditions or provisions of any agreement
or instrument to which the Company is now a party or any loan to
or mortgage created by the Company or of its memorandum or
articles of association;
14.2.4 result in any present or future indebtedness of the Company
becoming due and payable or capable of being declared due and
payable prior to its stated maturity;
14.2.5 so far as the Vendors are aware cause any director, officer or
senior employee of the Company to leave employment;
14.2.6 conflict with, violate or result in a breach of any law,
regulation, order, decree or writ applicable to the Company, or
entitle any person to receive from the Company any finder's fee,
brokerage or other commission;
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and so far as the Vendors are aware the attitude or actions of
clients, customers and suppliers with regard to the Company will
not be prejudicially affected thereby.
14.3 The Company is not and has not been party to or directly or indirectly
concerned in any agreement, arrangement, understanding or practice
(whether or not legally binding) or in the pursuit of any course of
conduct which is:-
14.3.1 registrable under the RTPA or capable of giving rise to an
investigation by the Director-General of Fair Trading or a
reference to the Monopolies and Mergers Commission;
14.3.2 in contravention or breach of The Treaty of Rome 1957, the Fair
Trading Xxx 0000, the RTPA, the Competition Xxx 0000, or any
regulations, orders, notices or directions made thereunder; or
14.3.3 is otherwise registrable, unenforceable or void or renders the
Company or any of its officers liable to administrative, civil or
criminal proceedings under any anti-trust, trade regulation or
similar legislation in any jurisdiction where the Company carries
on business.
14.4 The Company is not and has not been a party to any agreement,
arrangement, understanding or practice restricting the freedom of the
Company to provide and take goods and services by such means and from and
to such persons and into or from such place as it may from time to time
think fit.
14.5 All title deeds and agreements to which the Company is a party and all
other documents owned by, or which ought to be in the possession of, or
held unconditionally to the order, of the Company are in the possession
of the Company.
14.6 The Company does not have any of its records, systems, controls, data or
information recorded, stored, maintained, operated or otherwise wholly or
partly dependent on or held by any means (including any electronic,
mechanical or photographic process whether computerised or not) which
(including all means of access thereto and therefrom) are not under the
exclusive ownership and direct control of the Company.
14.7 The Company does not use on its letterhead, books or vehicles or
otherwise carry on the Business under any name other than its corporate
name or a shortened version thereof.
14.8 Neither the Company nor any officer has been prosecuted for any criminal,
illegal or unlawful act connected with the Company.
15. Contracts
15.1 There are no long term contracts (i.e. contracts not terminable by the
Company without penalty on six months' notice or less) or onerous or
unusual or abnormal contracts (i.e. contracts for capital commitments or
contracts differing from those necessitated by the ordinary course of
business) binding upon the Company, nor is the Company a party to any
contract which contains any onerous or other provision material for
disclosure to an intending purchaser of the Shares.
15.2 All contracts to which the Company is a party as are material have been
disclosed and the Company is not a party to or subject to any agreement,
transaction, obligation, commitment, understanding, arrangement or
liability which:-
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15.2.1 is incapable of complete performance in accordance with its terms
within six months after the date on which it was entered into or
undertaken;
15.2.2 is likely to result in a loss to the Company on completion of
performance;
15.2.3 cannot readily be fulfilled or performed by the Company on time
and without undue or unusual expenditure of money and effort;
15.2.4 is a contract for the supply of goods or services (other than
contracts for the supply of electricity or normal office services)
in excess of (pound)25,000 per individual contract;
15.2.5 requires the Company to pay any commission, finder's fee, royalty
or the like; or
15.2.6 is in any way otherwise than in the ordinary and proper course of
the Company's business.
15.3 The terms of all contracts of the Company have been complied with by the
Company and by the other parties to the contracts in all respects and
there are no circumstances likely to give rise to a default by the
Company or (so far as the Vendors' are aware) by the other parties under
any such contract.
15.4 The Company has no knowledge of the invalidity of or grounds for
rescission, avoidance or repudiation of any agreement or other
transaction to which the Company is a party and has received no notice of
any intention to terminate, repudiate or disclaim any such agreement or
other transaction.
15.5 The Company is not a party to any subsisting agency or distributorship
agreement.
16. Employees
16.1 The particulars shown in the schedule of employees comprised in the
disclosure Documents are true and complete and show in respect of each
Director, officer and employee of the Company his date of birth, the date
on which he commenced continuous employment with the Company for the
purposes of the EPCA and all remuneration payable and other benefits
provided or which the Company is bound to provide (whether now or in the
future) to each such person and include full particulars of all
remuneration arrangements (particularly profit sharing, incentive and
bonus arrangements to which the Company is a party whether binding or
not) and each director, officer and employee of the Company is listed
therein.
16.2 There is no contract of service in force between the Company and any of
its directors, officers or employees which is not terminable by the
Company without compensation (other than any compensation payable under
Parts V and VI, EPCA) on one month's notice given at any time or
otherwise in accordance with section 49, EPCA. There are no consultancy
or management services agreements in existence between the Company and
any other person, firm or company.
16.3 There are no amounts owing to present or former directors, officers or
employees of the Company other than not more than one month's arrears of
remuneration accrued or due or for reimbursement of business expenses
incurred within a period of three months preceding the date hereof and no
moneys or benefits other than in respect of remuneration or emoluments of
employment are payable to or for the benefit of any
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present or former director, officer or employee of the Company, nor any
dependant of any present or former director, officer or employee of the
Company.
16.4 Save to the extent (if any) to which provision or allowance has been made
in the Accounts:-
16.4.1 no liability has been incurred or is anticipated by the Company
for breach of any contract of employment or for services or for
severance payments or for redundancy payments or protective awards
or for compensation for unfair dismissal or for failure to comply
with any order for the reinstatement or re-engagement of any
employee or for sex or race discrimination or for any other
liability accruing from the termination or variation of any
contract of employment or for services;
16.4.2 the Company has not made or agreed to make any payment to or
provided or agreed to provide any benefit for any present or
former director, officer or employee of the Company.
16.5 The Company has in relation to each of its employees (and so far as
relevant to each of its former employees) complied with:-
16.5.1 all obligations imposed on it by all relevant statutes,
regulations and codes of conduct and practice affecting its
employment of any persons and all relevant orders and awards made
thereunder and has maintained current, adequate and suitable
records regarding the service, terms and conditions of employment
of each of its employees; and
16.5.2 all collective agreements, recognition agreements and customs and
practices for the time being affecting its employees or their
conditions of service.
16.6 No present director, officer or employee of the Company has given or
received notice terminating his employment except as expressly
contemplated under this Agreement and Completion of this Agreement will
not entitle any employee to terminate his employment and/or trigger any
entitlement to a severance payment or liquidated damages.
16.7 The Company has complied with all recommendations made by the Advisory
Conciliation and Arbitration Service and with all awards and declarations
made by the Central Arbitration Committee in respect of its employees.
16.8 The Company does not have in existence nor is it proposing to introduce,
and none of its directors, officers or employees participate in (whether
or not established by the Company), any employee share trust, share
incentive scheme, share option scheme or profit sharing scheme for the
benefit of all or any of its present or former directors, officers or
employees or any of such persons dependants or any scheme whereunder any
present or former director, officer or employee of the Company is
entitled to a commission or remuneration of any other sort calculated by
reference to the whole or part of the turnover, profits or sales of the
Company or any other person, firm or company including (without
limitation) any profit related pay scheme established under Chapter III,
Part V, Taxes Act.
16.9 The Company has not been a party to any relevant transfer as defined in
TUPE nor has the Company failed to comply with any duty to inform and
consult any Trade Union under the said regulations within the period of
one year preceding the date of this Agreement.
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16.10 The Company is not a party to any agreement or arrangement with or
commitment to any trade unions or staff association nor are any of its
employees members of any trades union or staff association.
17. Pension Schemes
17.1 Other than the Roda Print Concepts Limited Pension Plan (the "Pension
Scheme"), the company is not nor has been a party to any agreement or
arrangement for the provision of pensions, allowances, lump sums or other
like benefits on retirement, death or long term ill health for the
benefit of any current or former employee of the Company (or the
dependants of such persons) nor has the Company provided or promised to
provide any ex-gratia pensions, lump sums or like benefits for any
current or former employee of the Company or their dependants. In
particular, there is no obligation to pay contributions to any personal
pension scheme in respect of any employee.
17.2 Full particulars of the Pension Scheme have been disclosed, such
particulars being true, complete and not misleading in any way. The
particulars include a copy of the trust deed and rules, booklets and any
subsequent announcements to scheme members, details of members including
contributions payable by members and employer, details of current
investments, latest scheme accounts and schedule of contributions
complying with Section 87 of the Pensions Xxx 0000.
17.3 All contributions to the Pension Scheme which are due have been paid by
the due date for payment. In respect of any employee who is covered for
lump sum death benefits, those benefits are fully insured with an
insurance company of good repute on normal terms and all premiums payable
have been paid.
17.4 The Pension Scheme is approved by the Board of Inland Revenue for the
purposes of Chapter 1 of Part XIV of the Taxes Act and has at all times
and in all respects complied with the provisions of all relevant
statutes, regulations and requirements.
17.5 The Pension Scheme is a money purchase scheme within the meaning of
Section 181 of the Xxxxxxx Xxxxxxx Xxx 0000.
17.6 There are no claims or actions in progress or pending, nor any reason for
such claims or actions, in respect of any pension arrangement. There are
no unresolved disputes under the Pension Scheme's internal dispute
resolution procedure.
18. Intellectual Property
18.1 The Disclosure Documents contain particulars of all Intellectual Property
owned, used or exploited by the Company. The Company is the sole
beneficial owner of such Intellectual Property.
18.2 The Disclosure Documents contain particulars of all Intellectual Property
Agreements and all Intellectual Property Agreements are valid and binding
and none has been the subject of any breach or default by any party or of
any event which with notice or lapse of time or both would constitute a
default.
18.3 The Company has not infringed and does not infringe any Intellectual
Property of a third party as a result of the Company's use or
exploitation of the Intellectual Property owned, used or exploited by the
Company nor will such use or exploitation give rise to any such dispute
claims or proceedings against the Company.
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18.4 There are and have not been any disputes, claims or proceedings
threatened or in existence in any court of tribunal in respect of any of
the Intellectual Property as such owned, used or exploited by the Company
or in respect of any use or exploitation of the Intellectual Property
owned, used or exploited by the Company. There has been and is no current
or anticipated infringement by any third party of any of the Intellectual
Property owned, used or exploited by the Company.
19. Legislation
The Company is not aware, having made enquiries of its directors and
employees, that it is in material breach of, or that it has received
notice of breach of, or of any allegation of breach of, the requirements
of any legislation which is applicable to it.
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Part 2
20. Taxation
20.1 General
20.1.1 Notices and returns
All notices, returns, computations and registrations of the
Company for the purposes of Taxation have been made punctually on
a proper basis and are correct and none of them is, or is likely
to be, the subject of any dispute with any Taxation Authority.
20.1.2 Payment of Tax due
All Taxation which the Company is liable to pay prior to
Completion has been or will be so paid prior to Completion.
20.1.3 Penalties or interest on Tax
The Company has not within the period of six years ending on the
date of this Agreement paid or since the Balance Sheet Date become
liable to pay any penalty, fine, surcharge or interest charged by
virtue of the provisions of the TMA or any other Taxation Statute.
20.1.4 Compliance with PAYE, national insurance contribution and Tax
collection obligations
(a) All income tax deductible and payable under the PAYE system
and/or any other Taxation Statute has, so far as is
required to be deducted, been deducted from all payments
made or treated as made by the Company and all amounts due
to be paid to the Inland Revenue prior to the date of this
Agreement have been so paid, including all Tax chargeable
on benefits provided for directors, employees or former
employees of the Company or any persons required to be
treated as such.
(b) All deductions and payments required to be made under any
Taxation Statute in respect of national insurance and
social security contributions (including employer's
contributions) have been so made.
(c) All payments by the Company to any person which ought to
have been made under deduction of Tax have been so made and
the Company (if required by law to do so) has accounted to
the Inland Revenue for the Tax so deducted.
(d) Proper records have been maintained in respect of all such
deductions and payments and all applicable regulations have
been complied with.
(e) The Disclosure Documents contain details so far as they
affect the Company of all current dispensations agreed with
the Inland Revenue in relation to PAYE and all
notifications given by the Inland Revenue under section
166, TA 88.
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20.1.5 Investigations
The Company has not been subject to any visit, audit,
investigation, discovery or access order by any Taxation
Authority and that there are no circumstances existing which
make it likely that a visit, audit, investigation, discovery or
access order will be made.
20.1.6 No liability under section 23, TA 88
The Company has not received a notice from the Collector of
Taxes under the provisions of section 23, TA 88 which has not
been complied with.
20.1.7 Tax provision
Full provision or reserve has been made in the Accounts for all
Taxation assessed or liable to be assessed on the Company or for
which it is accountable in respect of income, profits or gains
earned, accrued or received or deemed to be earned, accrued or
received on or before the Balance Sheet Date, including
distributions made down to such date or provided for in the
Accounts.
20.1.8 Concessions and arrangements
The amount of Taxation chargeable on the Company during any
accounting period ending on or within the six years before the
Balance Sheet Date has not depended on any concessions,
agreements or other formal or informal arrangements with any
Taxation Authority.
20.1.9 Anti-avoidance provisions
The Company has not entered into or been a party to any scheme
or arrangement of which the main purpose, or one of the main
purposes, was the avoidance of or the reduction in liability to
Taxation.
20.1.10 Section 765, TA 88
The Company has not without the prior consent of the Treasury
carried out or agreed to carry out any transaction under section
765, TA 88 which would be unlawful in the absence of such
consent and has, where relevant, complied with the requirements
of section 765A(2), TA 88 (supply of information on movement of
capital within the EU) and any regulations made or notice given
thereunder.
20.1.11 Transactions requiring clearance or consent
All particulars furnished to any Taxation Authority in
connection with an application for clearance or consent by the
Company or on its behalf or affecting the Company has been made
and obtained on the basis of full and accurate disclosure to the
relevant Taxation Authority of all relevant material facts and
considerations; and any transaction for which clearance or
consent was obtained, has been carried into effect only in
accordance with the terms of the relevant clearance or consent.
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20.1.12 Calculation of taxation liability
The Company has sufficient records relating to past events to
permit accurate calculation of the Taxation liability or relief
which would arise upon a disposal or realisation on completion
of each asset owned by the Company at the Balance Sheet Date or
acquired by the Company since that date but before Completion.
20.1.13 Claims and disclaimers
The Company has duly submitted all claims and disclaimers the
making of which has been assumed for the purposes of the
Accounts.
20.1.14 Outstanding claims, elections and appeals
The Disclosure Documents contain full particulars of all matters
relating to Taxation in respect of which the Company is or at
Completion will be entitled:
(a) to make any claim, (including a supplementary claim)
disclaimer or election for relief under any Taxation
Statute;
(b) to appeal against any assessment or determination relating
to Taxation;
(c) to apply for a postponement of Taxation.
20.2 Corporation tax, including corporation tax on chargeable gains
20.2.1 Base values and acquisition costs
If each of the capital assets of the Company was disposed of on
the date hereof for a consideration equal to the book value of
that asset in, or adopted for the purposes of, the Accounts or,
in the case of assets acquired since the Balance Sheet Date,
equal to the consideration given upon its acquisition, no
liability to corporation tax on chargeable gains or balancing
charges under the CAA would arise and for the purpose of
determining the liability to corporation tax on chargeable gains
there shall be disregarded any relief and allowances available
to the Company other than amounts falling to be deducted under
section 38, TCGA.
20.2.2 Capital allowances
All expenditure which the Company has incurred or may incur
under any subsisting commitment on the provision of machinery,
plant or buildings has qualified or will qualify (if not
deductible as a trading expense for trade carried on by the
Company) for writing-down allowances or industrial building
allowances (as the case may be) under the CAA and where
appropriate notices have been given to the Inland Revenue under
section 118, Finance Xxx 0000.
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20.2.3 Leased assets
The Company has not made any claim for capital allowances in
respect of any asset which is leased to or from or hired to or
from the Company and no election affecting the Company has been
made or agreed to be under sections 53 or 55, CAA in respect of
such assets.
20.2.4 Short life assets
The Company has not made any election under section 37, CAA nor
is it taken to have made such an election under section
37(8)(c), CAA.
20.2.5 Industrial buildings
None of the assets of the Company expenditure on which has
qualified for a capital allowance under Part I, CAA has at any
time been used otherwise than as an industrial building or
structure.
20.2.6 Distributions
(a) No distribution within the meaning of sections 209, 210 and
211, TA 88 has been made by the Company after 5th April,
1965 except dividends shown in its audited accounts and the
Company is not bound to make any such distribution.
(b) No elections have been made pursuant to Section 246A, TA 88
in respect of any dividends.
20.2.7 Repayments of share capital
The Company has not any time after 6th April, 1965 repaid,
redeemed or repurchased or agreed to repay, redeem or repurchase
or granted an option under which it may become liable to
purchase any shares of any class of its issued share capital nor
has the Company after that date capitalised or agreed to
capitalise in the form of shares or debentures any profits or
reserves of any class or description or otherwise issued or
agreed to issue any share capital other than for the receipt of
new consideration (within the meaning of Part VI, TA 88) or
passed or agreed to pass any resolution to do so.
20.2.8 Demergers
The Company has not been engaged in nor been a party to any of
the transactions set out in sections 213 to 218 inclusive, TA 88
nor has it made or received a chargeable payment as defined in
section 218(1), TA 88.
20.2.9 Issues of securities
No securities (within the meaning of section 254(1), TA 88)
issued by the Company and remaining in issue at the date of this
Agreement were issued in such circumstances that the interest
payable on than falls to be treated as a distribution under
either sections 209(2)(d), 209(2)(da) or 209(2)(e), TA 88.
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20.2.10 Capital Distributions
The Company has not received any capital distribution to which
the provisions of section 189, TCGA could apply.
20.2.11 Land sold and leased back
The Company has not entered into any transaction to which the
provisions of section 779 or 780, TA 88 have been or could be
applied.
20.2.12 Foreign loan interest
The Company has not since 31st March, 1982 received any foreign
loan interest in respect of which double taxation relief will or
may be restricted under section 798, TA 88.
20.2.13 Non-deductible payments
No rents, interest, annual payments or other sums of an income
nature paid or payable by the Company or which the Company is
under an existing obligation to pay in the future are or may be
wholly or partially disallowable as deductions, management
expenses or charges in computing profits for the purposes of
corporation tax by reason of the provisions of sections 74, 79,
125, 338, 339, 779 to 784 inclusive, 787 or 788, TA 88 or any
other statutory provision or otherwise.
20.2.14 Rent payable to connected persons
No rent is or has been payable by the Company to which the
provisions of sections 33A and 33B, TA 88 will apply or have
applied.
20.2.15 No unremittable income or gains
No claim has been made by the Company under sections 584 or 585,
TA 88 or under section 279, TCGA.
20.2.16 Payments to directors, officers or employees
The Company has not made or agreed to make any payment to or
provided or agreed to provide any benefit for any Director or
former director, officer or employee of the Company, whether as
compensation for loss of office, termination of employment or
otherwise, which is not allowable as a deduction in calculating
the profits of the Company for Taxation purposes whether up to
or after the Balance Sheet Date.
20.2.17 Disallowance of trading losses and advance corporation tax carry
forward
No change of ownership of the Company has taken place in
circumstances such that section 768 (change in ownership of
company: disallowance of trading losses) or section 245, TA 88
(change in ownership of company: calculation and treatment of
advance corporation tax) has or may be applied to deny relief
for a loss or losses incurred by the Company and within the
period of three years ending with the date of this Agreement
there has been no major change in the nature or conduct of any
trade or business (as defined in section 768 and section 245, TA
88) carried on by the Company.
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20.2.18 Transfer pricing
The Company is not a party to any transaction or arrangement
under which it may be required to pay for any asset or any
services or facilities of any kind an amount which is in excess
of the market value of that asset or those services or
facilities nor will the Company receive any payment for an asset
or any services or facilities of any kind that it has supplied
or provided or is liable to supply or provide which is less than
the market value of that asset or those services or facilities.
20.2.19 Transactions not at arm's length
The Company has not disposed of or acquired any asset in
circumstances falling within section 17, TCGA nor given or
agreed to give any consideration to which section 128(1)(2),
TCGA could apply.
20.2.20 Transactions between connected persons
No allowable loss has accrued to the Company to which section
18(3), TCGA will apply.
20.2.21 Chargeable debts
The Company is not owed a debt, other than a debt on a security,
on the disposal or satisfaction of which a liability to
corporation tax on chargeable gains will arise by reason of
section 251, TCGA.
20.2.22 Relief for loans to traders and qualifying corporate bonds
No claim for relief has been allowed to the Company pursuant to
sections 253 and 254, TCGA in respect of any loan and no
chargeable gain has or is likely to arise pursuant to section
253 (5), (6), (7) or (8) or section 254 (9) or (10), TCGA.
20.2.23 Chargeable policies
The Company has not acquired benefits under any policy of
assurance otherwise than as the original holder of legal and
beneficial title.
20.2.24 Transfer of overseas trade
The Company has not transferred a trade carried on by it outside
the United Kingdom through a branch or agency to a company not
resident in the United Kingdom in such circumstances that a
chargeable gain may be deemed to arise at a date after such
transfer under section 140, TCGA.
20.2.25 Depreciatory transactions
(a) No allowable loss which might accrue on the disposal by the
Company of any share in or security of any company is
likely to be reduced by virtue of the provisions of
sections 176 and 177, TCGA.
(b) The Company has not been a party to any scheme or
arrangement whereby the value of an asset has been
materially reduced as set out in sections 30-34, TCGA.
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20.2.26 Restriction of straight-line growth
No asset owned by the Company is subject to a deemed disposal
and re-acquisition under schedule 2, TCGA so as to restrict the
extent to which the gain or loss over the period of ownership
may be apportioned by reference to straight-line growth.
20.2.27 Other claims made by the Company
The Company has made no claim under any of the following:-
(a) section 280, TCGA (tax on chargeable gains payable by
instalments);
(b) section 24(2), TCGA (assets of negligible value); or
(c) section 242(2), TCGA (small part disposals of land).
(d) section 139, Finance Xxx 0000 (deferral of unrealised
exchange gains).
20.2.28 Gifts
The Company has not received any assets by way of gift as
mentioned in section 282, TCGA and the Company has not held, and
does not hold, shares in a company to which section 125, TCGA
could apply.
20.2.29 Non-resident companies
(a) There has not accrued or arisen any income, profit or gain
in respect of which the Company may be liable to
corporation tax by virtue of the provisions of section 13,
TCGA or Chapter IV of Part XVII, TA 88.
(b) The Company has not been served with a notice in respect of
the unpaid corporation tax liability of any company
pursuant to section 191, TCGA.
20.2.30 Controlled foreign companies
No notice of the making of a direction under section 747, TA 88
has been received by the Company and no circumstances exist
which would entitle the Inland Revenue to make such a direction
or to apportion any profits of a controlled foreign company to
the Company pursuant to section 752, TA 88.
20.2.31 Charges on non-residents
The Company has not been a party to any transaction or
arrangement whereby it is or may hereafter become liable for
Taxation under or by virtue of Part VIII, TMA.
20.2.32 Profit related pay
No scheme registered under Chapter III of Part V, TA 88 applies
to the Company or any of its employees and no application for
registration of a scheme so applying has been made.
20.2.33 Payment from pension funds
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The Company has not received a payment out of funds held for the
purposes of an exempt approved scheme in respect of which an
amount is recoverable by the Inland Revenue under section 601, TA
88.
20.2.34 Claims and elections
(a) The Disclosure Documents contain full particulars of all
claims and elections made (or assumed to be made) under
sections 23, 152-162 or 000, 000, 000, 000, XXXX insofar as
they could affect the chargeable gain or allowable loss
which would arise in the event of a disposal by the Company
of any of its assets, and indicates which assets (if any)
so affected would not on a disposal give rise to relief
under Schedule 4, TCGA.
(b) The Disclosure Documents contain full particulars of
elections made under
(i) Regulation 10 of The Exchange Gains and Losses
(Alternative Method of Calculating of Gain or Loss)
Regulations 1994 and whether or not such elections
have been varied
(ii) Regulation 10 of the Local Currency Elections
Regulations 1994 and such election is still valid.
20.3 Corporation tax - groups of companies
20.3.1 Group relief
The Disclosure Documents contain full particulars of all
arrangements and agreements relating to group relief (as defined
by section 402, TA 88 ) to which the Company is or has been a
party and:-
(a) all claims by the Company for group relief were when made
and are now valid and have been or will be allowed by way
of relief from corporation tax;
(b) the Company has not made nor is liable to make any payment
under any arrangement or agreement save in consideration
for the surrender of group relief allowable to the Company
by way of relief from corporation tax; and
(c) the Company has received all payments due to it under any
arrangement or agreement for any surrender of group relief
made by it and the payments are not liable to be refunded
in whole or in part.
20.3.2 Surrender of advance corporation tax
The Disclosure Documents contain full particulars of all
arrangements and agreements to which the Company is or has been a
party relating to the surrender of advance corporation tax made or
received by the Company under section 240, TA 88 and:-
(a) the Company has not paid nor is liable to pay for the
benefit of any advance corporation tax which is or may
become incapable of set-off against the Company's liability
to corporation tax; and
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(b) the Company has received all payments due to it under any
arrangement or agreement for any surrender of advance
corporation tax made by it and the payments are not liable
to be refunded in whole or in part.
20.3.3 Acquisitions from group members
No tax has been or may be assessed on the Company pursuant to
section 190, TCGA in respect of any chargeable gain accrued prior
to the date of this Agreement and the Company has not at any time
within the period of six years ending with the date of this
Agreement transferred any asset other than trading stock including
without limitation any transfer by way of share exchange within
section 135, TCGA to any company which at the time of disposal was
a member of the same group as defined in section 170, TCGA.
20.3.4 Leaving the group
The execution or completion of this Agreement or any other event
since the Balance Sheet Date will not result in any chargeable
asset being deemed to have been disposed of and re-acquired by the
Company for Taxation purposes pursuant to section 178 or 179, TCGA
or as a result of any other Event since the Balance Sheet Date.
20.3.5 Group income
The Disclosure Documents contain full particulars of all elections
made by the Company under section 247, TA 88 and all such
elections are now in force and the Company has not paid any
dividend without advance corporation tax or made any payment
without deduction of income tax in the circumstances specified in
section 247(6), TA 88 and no assessment has been made on the
Company in respect of advance corporation tax which ought to have
been paid or income tax which ought to have been deducted.
20.3.6 Capital losses
The Company has no capital losses the set-off of which are or may
be restricted by Xxxxxxx 000X, XXXX.
20.4 Close companies
20.4.1 Close company status
The Company has not at any time during the six years ended at the
Balance Sheet Date been a close company within the meaning of
sections 414 and 415, TA 88.
20.4.2 Close investment-holding company status
The Company has not in any accounting period beginning after 31st
March, 1989 been a close investment-holding company as defined in
section 13A, TA 88.
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20.4.3 Distributions
No distribution within section 418, TA 88 has ever been made by
the Company.
20.4.4 Loans to participators
Any loans or advances made or agreed to be made by the Company
within sections 419 and 420 or 422, TA 88 have been disclosed and
the Company has not released or written off or agreed to release
or write off the whole or any part of any such loans or advances.
20.5 Inheritance tax
20.5.1 No transfers of value and associated operations
The Company has made no transfers of value within sections 94 and
202, ITA nor has the Company received a transfer of value such
that liability might arise under section 199, ITA nor has the
Company been party to associated operations in relation to a
transfer of value as defined by section 268, ITA.
20.5.2 Inland Revenue charge
There is no unsatisfied liability to inheritance tax attached to
or attributable to the Shares or any asset of the Company and none
of them are subject to an Inland Revenue charge as mentioned in
section 237 and 238, ITA.
20.5.3 Power of sale, mortgage or charge
No asset owned by the Company nor the Shares are liable to be
subject to any sale, mortgage or charge by virtue of section 212,
ITA.
20.6 VAT
20.6.1 Returns and payments
(a) The Company is a taxable person duly registered for the
purposes of VAT.
(b) The Company has complied with all statutory provisions,
rules, regulations, orders and directions in respect of
VAT, has promptly submitted accurate returns, and the
Company maintains full and accurate VAT records, has never
been subject to any interest, forfeiture, surcharge or
penalty nor been given any notice under sections 59 or 64,
VATA nor been given a warning within section 76(2), VATA
nor has the Company been required to give security under
paragraph 4 of Schedule 11, VATA.
(c) VAT has been duly paid or provision has been made in the
Accounts for all amounts of VAT for which the Company is
liable.
20.6.2 Taxable supplies and input tax credit
All supplies made by the Company are taxable supplies and the
Company has not been and will not be denied full credit for all
input tax by reason of the
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operation of sections 25 and 26, VATA and regulations made
thereunder or for any other reasons and no VAT paid by the Company
is not input tax as defined in section 24, VATA and regulations
made thereunder.
20.6.3 VAT groups
The Company is not and has not been for VAT purposes a member of
any group of companies other than the Group and no act or
transaction has been effected in consequence whereof the Company
is or may be held liable for any VAT arising from supplies made by
another company.
20.6.4 Transactions between connected persons
The Company has not been or agreed to be party to any transaction
or arrangement in relation to which a direction has been or could
be made under paragraph 1 of Schedule 6, VATA or to which
paragraph 2(3A) of Schedule 10, VATA applies.
20.6.5 Charge to VAT as agent or representative
The Company is not and has not agreed to become liable for VAT by
virtue of section 47 and 48, VATA.
20.6.6 VAT and Properties
The Company or its relevant associate for the purposes of
paragraph 3(7) of Schedule 10, VATA has exercised the election to
waive exemption from VAT (pursuant to paragraph 2 of schedule 10,
VATA) only in respect of those Properties listed (as having been
the subject of such an election) in the Disclosure Documents and
neither the Company nor its relevant associate has any intention
or obligation to exercise such an election in respect of any other
of the Properties.
20.6.7 Capital goods scheme
The Company does not own and has not at any time within the period
of ten years preceding the date hereof owned any assets which are
capital items subject to the Capital Goods Scheme under Part XV of
the VAT Regulations 1995.
20.6.8 Bad debt relief
The Company has not made any claim for bad debt relief under
section 36, VATA and details of any claim it could make have been
disclosed.
20.6.9 Self billing
The Company has not entered into any self billing arrangement in
respect of supplies made by any other person nor has it at any
time agreed to allow any such person to make out VAT invoices in
respect of supplies made by the Company.
20.7 Stamp duty
20.7.1 Stamp duty
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All stampable documents wheresoever executed (other than those
which have ceased to have any legal effect) to which the Company
is a party have been duly stamped. Since the Balance Sheet Date
there have been and are no circumstances or transactions to which
the Company is or has been a party such that a liability to stamp
duty or any penalty in respect of such duty will arise on the
Company.
20.7.2 Stamp duty reserve tax
Since the Balance Sheet Date the Company has not incurred any
liability to or been accountable for any stamp duty reserve tax
and there has been no agreement within section 87(1), Finance Xxx
0000 which could lead to the Company incurring such a liability or
becoming so accountable.
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Schedule 6
The Purchaser's Warranties
1. The balance sheet of the Purchaser and its subsidiaries as at 30 September
1997 and the profit and loss account of the Purchaser for the nine months
ending on such date give a true and fair view of its assets, liabilities,
reserves and profits as at such date and give a true and fair view of the
state of affairs of the Purchaser as at such date there has been no
material adverse change in the Purchaser's financial position since that
date;
2. The Purchaser will at Completion have all necessary power and authority to
allot and issue the Consideration Shares in the manner proposed without any
sanction or consent by the shareholders of the Purchaser or any class
thereof and there will at Completion be no consents for the allotment and
issue of the Consideration Shares which have not been unconditionally
obtained;
3. The Purchaser has full power and has obtained all applicable governmental,
statutory, regulatory, or other consents, licences, waivers or exemptions
required to empower it to enter into and to perform its obligations under
this Agreement and the other documents to be executed by it as contemplated
herein and each such document shall upon execution and delivery be valid
and binding upon the Purchaser;
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Schedule 7
Completion
Part 1
1. Vendors' obligations
On Completion, the Vendors shall deliver to the Purchaser:-
1.1 a resolution in writing signed by all of the holders of the Loan Notes in
the agreed terms (the "Stockholders' Resolution);
1.2 a copy of the minutes of a meeting of the directors of each of the Vendors
that is a body corporate authorising the execution by that Vendor of this
Agreement, the Deed of Tax Covenant and the Stockholders' Resolution (such
copy minutes being certified as correct by the secretary of that Vendor);
1.3 certificates from each of the banks at which the Company and the Subsidiary
maintains an account of the amount standing to the credit or debit of all
such accounts as at the close of business on the last Business Day prior to
Completion;
1.4 the cash book balances of the Company and the Subsidiary as at Completion
with statements reconciling such cash book balances and the relevant cheque
books with the balances on the bank accounts of the Company and each of the
Subsidiaries as shown by the certificates referred to in paragraph 1.3;
1.5 the cheque books relating to all the bank accounts of the Company and the
Subsidiary together with confirmation that no cheques have been written by
the Company or the Subsidiary since preparation of the statements referred
to in paragraph 1.4;
1.6 evidence in the agreed terms that all debts and accounts between any member
of the Group (of the one part) and the Vendors and any Connected Person or
Affiliate of any of the Vendors (of the other part) have been fully paid
and settled;
1.7 the Deed of Tax Covenant duly executed under seal by the Vendors and the
Service Agreements duly executed by Xxxxx Xxxxxxxx, Xxxxx Xxxxxx, Xxxx
Xxxxxx and Xxxxx Xxxxxxx;
1.8 a signed copy (appropriate for filing at the Companies Registry) of a
special resolution to adopt new articles of association of the Company in
such form as the Purchaser may require together with a copy (appropriate
for filing) of such articles;
1.9 transfers of the Shares duly executed by the registered holders thereof in
favour of the Purchaser or its nominee(s) together with the relevant share
certificates in the names of such registered holders;
1.10 such waivers, consents or other documents (including any power of attorney
under which any document required to be delivered under Part 1 of this
schedule has been executed) in the agreed terms to enable the Purchaser and
its nominee(s) to be registered as the holders of the Shares;
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1.11 certificates in respect of all issued shares in the capital of the
Subsidiary and duly executed transfers of all shares in the Subsidiary held
by any nominee for the Company in favour of such persons as the Purchaser
shall direct;
1.12 irrevocable powers of attorney in the agreed terms executed by each of the
holders of the Shares in favour of the Purchaser or its nominee(s) to
enable the beneficiary (pending registration of the transfers of the
Shares) to exercise all voting and other rights attaching to the Shares and
to appoint proxies for this purpose;
1.13 the statutory registers and minute books (properly written up to the time
immediately prior to Completion), the common seal, the certificate of
incorporation and (if applicable) any certificate of incorporation on
change of name of the Company and the Subsidiary;
1.14 the documents of title to the Properties;
1.15 the written resignations in the agreed terms of all the Directors (except
Xxxxx Xxxxxxxx) of the Company and the Subsidiary from their respective
offices such resignations to take effect from Completion;
1.16 unless the auditors are Ernst & Young, the written resignation of the
auditors of the Company and the Subsidiary in the agreed terms to take
effect from Completion containing the statements referred to in section
394(1), CA 85 that they consider there are no such circumstances as are
mentioned in that section and confirming that they have deposited or shall
deposit that statement in accordance with section 394(2), CA 85 at the
respective registered offices of the Company and each of the Subsidiaries;
1.17 a deed of waiver in a form reasonably acceptable to the Purchaser under
which Xxxxx Xxxxxxxx waives payment of an amount of salary equal to the
bonuses payable to Xxxx Xxxxxx and Xxxxx Xxxxxx in connection with the sale
of the Company, duly executed by Xxxxx Xxxxxxxx.
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Part 2
On Completion, the Vendors shall cause board resolutions of the Company and of
the Subsidiary to be passed so that:
1. in the case of the Company only, the said transfers of the Shares shall be
passed for registration and registered (subject to the same being duly
stamped which shall be at the cost of the Purchaser);
2. in the case of the Company only, the Service Agreements shall be approved
and entered into;
3. the resignations referred to in paragraphs 1.15 of Part 1 shall be tendered
and accepted so as to take effect after the passing of the resolutions;
4. persons nominated by the Purchaser (in the case of directors subject to any
maximum number imposed by the relevant articles of association) shall be
appointed additional directors and appointed secretaries;
5. all existing instructions and authorities to bankers shall be revoked and
shall be replaced with alternative instructions, mandates and authorities
in such form as the Purchaser may require;
6. the registered office shall be changed to such place in England as the
Purchaser may require;
7. Messrs. Ernst & Young shall be appointed auditors if not already so
appointed;
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Schedule 8
Limitation of Vendors' liability
Part 1
General limitations
1. Notwithstanding the provisions of clause 7 the Vendors shall not be liable
in respect of a breach of any of the Vendors' Warranties if and to the
extent that the loss occasioned thereby has been recovered under the Deed
of Tax Covenant.
2. The Vendors shall not be liable under the Vendors' Warranties:-
2.1 to the extent that the facts which might result in a Claim or possible
Claim were fairly disclosed in the Disclosure Documents.
2.2 to the extent that the subject of the Claim is allowed or provided for or
reserved in the Accounts or has been included in calculating creditors or
deducted in calculating debtors in the Accounts and (in the case of
creditors or debtors) is identified in the records of the Company or to the
extent such matter was specifically referred to in the notes to the
Accounts;
2.3 to the extent that a Claim arises or is increased:-
2.3.1 wholly or partly from an act or omission occurring at the request
of or with the written consent of the Purchaser or (on or after
the date hereof) the Company or any of their directors, other
officers, employees or agents or by a change in the accounting
principles, bases, policies and methods adopted by the Company
from those used in the Accounts (save insofar as the change is
required to comply with the Warranties on the assumption that
they applied to the Company or its accounts in the relevant
period);
2.3.2 as a result of any increase in rates of taxation since the
Balance Sheet Date;
2.3.3 wholly or partly as a result of the passing or coming into force
of or any change in any enactment, law, regulation, directive,
requirement or any practice of any government, government
department or agency or regulatory body (including but not
limited to extra-statutory concessions of the Inland Revenue)
after the date hereof whether or not having retrospective effect;
2.4 to the extent that the amount of a Claim is recovered under a policy of
insurance validly in force at the date hereof.
3.1 The liability of each of the Vendors in respect of any Claim or any claim
under the Tax Deed (each, a "Relevant Claim") is several and limited to his
proportionate part of the Claim, save where such Relevant Claim constitutes
a claim against a single Vendor in respect of a Vendor's Warranty which is
given for each Vendor separately. "Proportionate part" means the proportion
of the Claim which is the same as the proportion which the Consideration
shown in Column 3 of Schedule 1 received by each Vendor bears to the total
of such Consideration received by all the Vendors.
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3.2 The liability of each Vendor in respect of Relevant Claims shall be limited
to the aggregate of:
(a) the cash paid to such Vendor at Completion pursuant to clause
4.1.2; and
(b) the lower of the value at the relevant time of the Consideration
Shares then held by such Vendor and their value at the Offer
Price (and, to the extent any Consideration Shares have been sold
since Completion by such Vendor, the cash proceeds realised from
such sale).
3.3 No liability on the part of any Vendor in respect of any Relevant Claim
(other than a claim under clause 2.5 of the Deed of Tax Covenant) shall
arise unless and until the amount shall arise unless and until the amount
of such Relevant Claim when aggregated with the amount of any other such
Relevant Claim made against the Vendors under this Agreement exceeds
(pound)50,000 in which event all of such Relevant Claim or Claims shall be
recoverable, provided that this limitation shall not affect any claim in
respect of the Pension Tax Liability.
Part 2
Limitations under the Warranties
(other than Tax Warranties)
3.4 The liability of each Vendor in respect of claims shall cease two years
after the date hereof, except in respect of matters which have been the
subject of a bona fide written claim which is made before such date by or
on behalf of the Purchaser to the Vendors giving details of the claim
including the Purchaser's bona fide estimate of the amount thereof. Any
such Claim shall (it has not previously been satisfied, settled or
withdrawn) be deemed to have been withdrawn unless legal proceedings in
respect of its have been commenced by both being issued and served within 6
months of such notification to the Vendors.
Part 3
Limitations under the Tax Warranties
4. The liability of the Vendors in respect of any Claim shall cease six years
after the date hereof, except in respect of matters which have been the
subject of a bona fide written claim which is made before the relevant date
by or on behalf of the Purchaser to the Vendors giving sufficient details
of all material aspects of the claim including the Purchaser's bona fide
estimate of the amount thereof. Any such claim shall (if not previously
been satisfied, settled or withdrawn) be deemed to have been withdrawn
unless legal proceedings in respect of it have been commenced by both being
issued and served within 6 months of such notification to the Vendors.
Part 4
Special Limitations
5. In assessing the amount recoverable by the Purchaser for any Claim under
the Warranties there shall be taken in account:
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5.1 any benefit accruing to the Purchaser or the Company as a consequence of
such breach; and
5.2 the amount of any provision made in the Accounts to the extent that payment
or discharge of such matter or liability was taken into account in those
Accounts.
6. To the extent that any breach of Warranty is capable of remedy, the Vendors
shall not be liable under the Vendors' Warranties unless the Vendors are
given written notice of such breach of warranty and such breach of warranty
is not remedied within 30 days following the date of receipt of such
notice.
7. If after the Vendors have paid any sum in respect of a Claim the Purchaser
or the Company becomes entitled or has a claim to recover any sum from any
person in respect of the subject matter of that Claim, the Purchaser shall,
upon receipt of such sums from such person, pay to the Vendors a sum equal
to the lesser of the amount recovered by the Purchaser or the Company (less
any tax, where applicable) from such person and the amount paid by the
Vendors in respect of such Claim.
8. The amount of any liability arising in respect of any Claim for breach of
any of the Warranties or under the Deed of Tax Covenant shall be discharged
by reduction of the consideration for the Shares.
9. If any matter or circumstance which gives rise to a Claim comes to the
attention of the Purchaser, the Purchaser shall take all steps that the
Vendors reasonably request to avoid, dispute, resist, compromise or defend
any matter which may otherwise result in a Claim subject to the Vendors
indemnifying the Purchaser to its reasonable satisfaction against any costs
or liabilities incurred and providing security reasonably satisfactory to
it in respect of such Indemnity.
10. It is acknowledged by the Purchaser that any Claim may entitle the Company
to make a claim under the acquisition agreement dated 21 October 1996.
Accordingly, if any matter or circumstance which may give rise to a Claim
comes to the attention of the Purchaser, it shall as soon as reasonably
practicable give written notice to the Vendors setting out the particulars
known to the Purchaser and shall make or procure to be made available to
the Vendors and their duly authorised agents on reasonable notice during
normal business hours all relevant books of account records and
correspondence for the purpose of enabling the Vendors to ascertain or
extract any information relevant to such Claim.
11. The Vendors shall be entitled in order to mitigate any claim for breach of
any of the Warranties to institute or continue any proceedings against or
negotiations with any third party and to have the conduct of the same at
its own expense but in the name of the Company subject to the Company being
indemnified against all reasonable costs and disbursements of and in
relation to any legal proceedings which may be instituted in respect
thereof and the Purchaser shall not and it shall procure that the Company
shall not accept, pay or compromise any claim which may give rise to a
Claim in respect of the Warranties or under the Deed of Tax Covenant
without giving the Vendors an adequate opportunity to resist such claim
pursuant hereto.
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Schedule 9
Limitation of Purchaser's Liability
1. The Purchaser's shall not be liable under the Purchaser's Warranties:-
1.1 to the extent that the facts which might result in a Claim or possible
Claim were fully, fairly and accurately disclosed;
1.2 to the extent that the subject of the Claim is allowed or provided for or
reserved in the audited accounts of the Purchaser or has been included in
calculating creditors or deducted in calculating debtors in the audited
accounts of the Purchaser and (in the case of creditors or debtors) is
identified in the records of the Company or to the extent such matter was
specifically referred to in the notes to the audited accounts of the
Purchaser;
1.3 to the extent that a Claim arises or is increased:-
1.3.1 wholly or partly from an act or omission occurring at the request
of or with the written consent of any Vendor or (on or after the
date hereof) the Company or any of their directors, other
officers, employees or agents;
1.3.2 wholly or partly from an act or omission compelled by law;
1.3.3 as a result of any increase in rates of taxation since the
balance sheet date of the Purchaser being 30 September 1997;
1.3.4 wholly or partly as a result of the passing or coming into force
of or any change in any enactment, law, regulation, directive,
requirement or any practice of any government, government
department or agency or regulatory body (including but not
limited to extra-statutory concessions of the Inland Revenue)
after the date hereof whether or not having retrospective effect.
2. The liability of the Purchaser in respect of any Claim:-
2.1 shall not arise unless and until the amount of such Claim when
aggregated with the amount of any other such Claim made against the
Purchaser under this Agreement exceeds (pound)50,000 in which event
all of such Claim or Claims shall be recoverable hereunder;
2.2 shall not (when aggregated with the amount of all other Claims) exceed
the value at the Offer Price of the Consideration Shares; and
2.3 shall cease fourteen days after the publication of the first audited
statutory accounts of the Purchaser following Completion, except in
respect of matters which have been the subject of a bona fide written
claim which is made before the relevant date by or on behalf of the
Vendor to the Purchaser giving sufficient details of all material
aspects of the claim including the Vendors' bona fide estimate of the
amount thereof. Any such claim shall (it has not previously been
satisfied, settled or withdrawn) be deemed to have been withdrawn
unless legal proceedings in respect of its have been commenced by both
being issued and served within 6 months of such notification to the
Purchaser.
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Schedule 10
1. Each Vendor receiving Consideration Shares shall deliver a certificate
dated the date of Completion containing the following representations and
warranties, namely that:
1.1 he understands that the Purchaser is relying upon the following statements
in determining whether the Purchaser may issue shares to the Vendor under
applicable securities laws of the United States;
1.2 he understands that neither the offer nor the sale of the Consideration
Shares is being registered under the Securities Act of 1933, as amended
(the "Securities Act"), and that the Consideration Shares are being offered
and sold in reliance on an exemption from the registration requirements
under the Securities Act for a transaction not involving any public
offering;
1.3 he has been afforded the opportunity to ask questions of and receive
answers from, directors and executive officers of the Purchaser concerning
the Purchaser and the terms and conditions of the offering of the
Consideration Shares;
1.4 the Consideration Shares are being acquired by the Vendor for the Vendor's
own account for investment and not for distribution or resale within the
meaning of the Securities Act other than in compliance therewith or in
accordance with an exemption therefrom;
1.5 he acknowledges that the Purchaser and its officers and agents have made no
representations or warranties, whether orally or in writing, or express or
implied, as to the financial condition, assets, operations, business,
prospects or condition of the Purchaser, other than the certificate of the
Purchaser to be delivered pursuant to paragraph 4 below with respect to the
prospectus (the "Prospectus") which forms part of the Purchaser's
registration statement on Form S-1, No. 333- ____, filed with the
Securities and Exchange Commission (the "SEC"), as the same has been
declared effective by the SEC.
2. Each Vendor receiving Consideration Shares shall execute and deliver an
undertaking dated the date of Completion in favour of the underwriters of
the Consideration Shares in the agreed terms.
3. The Purchaser shall deliver to the Vendors a certificate dated the date of
Completion containing a representation and warranty that the Prospectus
does not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading; provided that representation or warranty
is made as to information contained in or omitted from the Prospectus in
relation to the Company and/or the Subsidiary.
SIGNED by X.X. XXXXXXXX ) X. Xxxxxxxx
SIGNED by X.X. XXXXX ) X. Xxxxx
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SIGNED by ) Xxxxxxx Xxxxxxx
for and on behalf of STELBY )
HOLDINGS LIMITED )
SIGNED by ) X. Xx Xxxxxxxx
for and on behalf of CENTRAL ) Director
INVESTMENTS LIMITED )
SIGNED by ) Xxxxx Xxxxx
for and on behalf of THE NAGGAR ) as attorney for G.A. Naggar
FAMILY PENSION SCHEME ) Xxxxx Xxxxx
SIGNED by X.X. XXXXXXXXXXX ) Xxxx Xxxxxxxxxxx
SIGNED by M.D. XXXXXXXX ) By his attorney Xxxxx Xxxxx
SIGNED by X. XXXXXXXX ) By her attorney Xxxxx Xxxxx
SIGNED by X. XXXXXX ) W.G.B. Xxxxxx
SIGNED by ) Xxxxxxx X. Xxxxxxxxxx
for and on behalf of XXXXXXXXXX )
GRAPHICS INC. )
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