EXHIBIT 10.3
DATED 2001
SIMON XXXXXXXXXXX XXXXX ALLSO
AND
WARMINSTER SYSTEMS LIMITED
AND
XXXXXX XXXX XXX XXX
AGREEMENT FOR SALE OF SHARES IN
GRIDLOC LIMITED
FOX HAYES
TABLE OF CONTENTS
Subject Page number
Parties 3
Definitions 3
Share Sale 5
Completion 6
Warranties and Obligations 8
General 10
Warranties 12
Schedule Warranties 13
Ownership of shares 13
Corporate Details 13
Finance 13
Trading and Contracts 13
Assets 13
Disclosures 13
Execution page 13
Annex Loan Agreement
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THIS AGREEMENT is made 2001 BETWEEN
the vendor Simon Xxxxxxxxxxx Xxxxx Allso of 2 Cardinal Mews, Xxxxxx Xxxxx,
Xxxxxxx XX00 0XX, Xxxxxx Xxxxxxx
the purchaser Warminster Systems Limited of 00 Xxxxxxxx Xxxxxxx Xxxxxx,
Xxxxxxxxxx, Xxxxxxxxx, XX00 0XX
the guarantor Xxxxxx Xxxx Xxx Xxx c/o Warminster Systems Limited of 55
Xxxxxxxx Xxxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxxx, XX00 0XX
1. DEFINITIONS
In this agreement the following expressions shall have the meanings
stated namely
1.1. ASSOCIATE means
1.1.1. in relation to an INDIVIDUAL
1.1.1.1. any spouse brother sister parent or other issue
1.1.1.2. any company which is or may be directly or indirectly controlled by any
of the foregoing or by any two or more of them
1.1.2. in relation to a COMPANY
1.1.2.1. any subsidiary or holding company of such company and any subsidiary of
any holding company of such company; and 'holding company' bears the
meaning given in CA s.736
1.2. AUDITORS : means the auditors for the time being of the company.
1.3. AUTO-Q SHARES means 1,538,461 restricted shares of common stock in
Auto-Q USA
1.4. AUTO-Q USA means Auto-Q International, Inc. a Delaware company
1.5. BUSINESS DAY : means a day (not being a Saturday and a Sunday) on which
banks generally are open for business in the United Kingdom and the
Republic of Cyprus
1.6. CA means Companies Xxx 0000
1.7. COMPANIES ACTS : CA and previous Companies Acts (within the meaning of
CA s735(1)) Companies Consolidation (Consequential Provisions) Xxx 0000
and Companies Xxx 0000 and subsequent legislation
1.8. COMPANY : means Gridloc Limited incorporated on 2 March 2001 as a
private company limited by shares under the Cyprus Companies Law with
number 118653 which has an authorised share capital of 10,000 Cyprus
pounds divided into 10,000
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shares of 1.00 Cyprus pound each of which 10,000 have been issued
1.9. COMPLETION : means completion of the transfer of the Gridloc shares
1.10. CONTINGENT LIABILITY : shall not be restricted to an actual liability
present or future but shall include any liability liquidated or
unliquidated which may arise or fall to be met after completion in
consequence wholly or partly of any event occurring or subsisting at or
before that date and without prejudice to the generality of this
provision shall include any other circumstances which under good
accounting practice would be considered to give rise to a contingent
liability
1.11. CYPRUS COMPANIES LAW: means the Cyprus Companies Law, Chapter 113 of
the Laws of Cyprus
1.12. DATE FIXED FOR COMPLETION : means ***
1.13. DISCLOSURE LETTER : means the disclosure letter of even date herewith
from the vendor to the purchaser and the purchaser to the vendor
1.14. GRIDLOC SHARES: means 2,000 shares of 1.00 Cyprus pound each in Gridloc
Limited registered in the name of the vendor
1.15. INDUSTRIAL PROPERTY RIGHTS : means any patent application know-how
trade xxxx trade xxxx application business name trade name registered
design copyright or other similar industrial intellectual or commercial
right
1.16. LOAN AGREEMENT : means the loan agreements between the purchaser and
the company of 19 June 2001 for L50,000 and of today's date whereby the
purchaser loans the company the aggregate sum of L150,000 pounds
sterling to be made available to the company on the terms and
conditions set out therein
1.17. PURCHASER'S ACCOUNTANTS : means Xxxxxx & Xxxxxxx of 0 Xxxxxx Xxxxx
Xxxxx Xxxx Xxxxxxxxxx Xxx XX00 0XX United Kingdom
1.18. PURCHASER'S SOLICITORS : means Fox Hayes of Bank House 000 Xxxxxxxx
Xxxx Xxxxx XX0 0XX
1.19. STATEMENT OF ASSETS AND LIABILITIES : means the statement of assets and
liabilities as at today prepared for the company and the purchaser by
the vendor and Xxxxxx & Xxxxxxx, the auditors of the purchaser
1.20. STATEMENT OF ASSETS AND LIABILITIES DATE : means today
1.21. SUBSIDIARY : means a subsidiary as defined in CA s.736
1.22. STOCK : includes work in progress
1.23. THE STOCK EXCHANGE: means The International Stock Exchange of the
United Kingdom and The Cyprus Stock Exchange
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1.24. VENDOR'S SOLICITORS: means Andreas Neocleous & Co of XX Xxx 00000
Xx-0000 Xxxxxxxx Xxxxxx
1.25. WARRANTIES: means all and any of the agreements obligations warranties
representations and undertakings of the vendor and purchaser contained
in this agreement including the warranties set out in the schedule
2. SHARE SALE
2.1. The vendor with full title guarantee hereby agrees to transfer the
Gridloc shares to the purchaser and the purchaser hereby agrees to
accept the Gridloc shares from the vendor free of all options liens
charges and encumbrances and together with all rights now or hereafter
attaching thereto with effect from the date of this agreement
2.2. The vendor hereby waives any pre-emption rights he may have in relation
to any of the Gridloc shares under the articles of association of the
company or otherwise
2.3. The purchase price is:-
2.3.1 the allotment and delivery to the vendor of the Auto-Q shares
encumbrance free and credited as fully paid and
2.3.2 the sum of L10,000 pounds sterling per month payable to the vendor or
as the vendor shall direct on the first business day of each
consecutive month for a period of ten months commencing on 1 August
2001
2.4 The Auto-Q shares shall rank pari passu with the common stock of Auto-Q
USA
2.5 If prior to settlement of any purchase price instalment as provided for
in clause 2.3.2 which may become due to the vendor hereunder the
purchaser shall notify the vendor in writing of any prima facie claim
or claims in respect of warranties undertakings representations or
indemnities on the part of the vendor contained herein the purchaser
may set off the aggregate amount claimed by the purchaser in such claim
or claims against any subsequent instalments but any such set off in or
towards satisfaction of any claim made by the purchaser shall in no way
prejudice or affect any other rights or remedies of the purchaser for
the purpose of recovering any amount due to the purchaser from the
vendor nor, for the avoidance of doubt, shall it prejudice or affect
the rights of the vendor to seek recovery of such amounts set off,
withheld or not paid by the purchaser pursuant to the purchaser's
obligations in this agreement.
2.6 All of the terms and conditions in this agreement which are not fully
performed by completion shall survive and remain in full effect beyond
completion but any information supplied by the company prior to the
date hereof to the vendor or his servants agents or professional
advisers in connection with the matters disclosed to the purchaser in
relation to the business and affairs of the company shall not be deemed
a representation warranty or guarantee of the accuracy thereof by the
company to the vendor and the vendor hereby waives any and all claims
against the company in respect thereof. This clause 2.6 shall also be
read and construed in its entirety, with "completion" being substituted
by "allotment of the Auto-Q
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shares", "company" being substituted by "Auto-Q USA", and "vendor"
being substituted by "purchaser" and vice versa
2.7 The vendor hereby agrees with the purchaser that he will not dispose of
any of the Auto-Q shares nor create or dispose of or agree to create or
dispose of any interest therein to or in favour of any other person
until they are allotted to him pursuant to this agreement. For the
purpose of this clause the vendor shall be deemed to dispose of a share
if he ceases in any circumstances whatsoever to be the absolute
beneficial owner thereof free from all liens charges encumbrances or
third party rights of any description
2.8 The purchaser guarantees that the average ask price of one Auto Q share
quoted on the NASDAQ OTC bulletin board for the 14 days prior to their
actual allotment to the vendor of Auto-Q shares will be not less than
US $ 1 and if not the purchaser will make up the shortfall in cash
2.9 The purchaser or the vendor shall be entitled to rescind this agreement
by notice in writing to the other or the other's solicitors if prior to
completion or the allotment of the Auto-Q shares, as the case may be,
it appears that any of the warranties is not or was not true and
accurate in all respects or if any act or event occurs which had it
occurred on or before the date of this agreement would have constituted
a breach of any of the warranties or if there is any material breach or
non-fulfilment of any of the warranties which (being capable of remedy)
is not remedied prior to completion
3 COMPLETION
3.1 Provided that this agreement has not been rescinded by either party the
purchase and sale of the Gridloc shares shall be completed on the date
fixed for completion at the offices of the vendor's solicitors
3.2 The vendor shall procure that on or before the date fixed for
completion:-
3.2.2 A director nominated by the purchaser shall be appointed to the Gridloc
board and he will not be removed while the purchaser owns the Gridloc
shares
3.2.3 The vendor shall waive any pre-emption rights in respect of the Gridloc
shares conferred upon him by the articles of association of the company
3.3 On the date of completion:
3.3.1 the vendor shall deliver to the purchaser:-
- Copies of all bank statements
- Definitive share certificate(s) for the Gridloc shares
- Instrument of transfer of the Gridloc shares duly executed by
the vendor in favour of the purchaser or as it may direct
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- Any other document required for the purpose of registration of
the transfer of ownership of the Gridloc shares with the
relevant authorities as may be necessary under applicable law
- The loan agreement
- Written confirmation from the vendor that there are no
subsisting guarantees given by the company in his favour and
confirmation that the vendor is not indebted to the company or
vice versa
3.3.2 the purchaser shall deliver to the vendor's solicitors, in escrow, a
blank instrument of transfer of the Gridloc shares duly executed by the
purchaser, together with the purchaser's written irrevocable authority
to the company to deliver to the vendor's solicitors the definitive
share certificate(s) for the Gridloc shares issued to the purchaser, to
be held by the vendor's solicitors in escrow.
3.4 The vendor shall join with the purchaser in procuring the registration
of the transfer of the Gridloc shares and issue of definitive
certificates for these shares to the purchaser or as it may direct
3.5 Subject to:
3.5.1 the vendor having complied with his obligations under this agreement
3.5.2 the condition in clause 1.5 of the loan agreement of today's date being
satisfied
the purchaser and the guarantor jointly and severally covenant to
procure the allotment and delivery of the Auto-Q shares to the vendor
encumbrance free and credited as fully paid
3.6 The purchaser shall not be obliged to complete the transfer of any of
the Gridloc shares unless the purchase of all the Gridloc shares is
completed in accordance with this agreement but may instead rescind
this agreement without prejudice to any other remedy it may have.
3.7 Until such time as the vendor may freely dispose of the Auto-Q shares
or otherwise create or dispose of any interest in the Auto-Q shares,
the purchaser agrees with the vendor that it will not dispose of any of
the Gridloc shares to be transferred to it pursuant to this agreement
nor create or dispose of or agree to create or dispose of any interest
therein to or in favour of any other person. For the purpose of this
clause the purchaser shall be deemed to dispose of a share if it ceases
in any circumstances whatsoever to be the absolute beneficial owner
thereof free from all liens charges encumbrances or third party rights
of any description.
3.8 In the event the Auto-Q shares are not fully and effectually allotted
and delivered to the vendor or transferred by the guarantor to the
vendor encumbrance free and credited fully paid within twelve months
after the listing of Auto-Q USA on NASDAQ then :-
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3.8.1 the vendor's solicitors shall release from escrow and deliver to the
vendor the instrument of transfer of shares and the share
certificate(s) referred to in clause 3.3.2
3.8.2 the vendor may complete and put into effect the purchaser's blank
executed instrument of transfer of shares and do all other acts things
and execute all documents necessary and desirable to effect a
retransfer of the Gridloc shares to the vendor
3.8.3 the purchaser shall and shall be deemed to have unconditionally and
irrevocably waived and abandoned in favour of the vendor all
pre-emption rights under the articles of association of the company and
all rights of ownership (legal and beneficial) in and to the Gridloc
shares and all claims entitlements interest and receivables in to or
deriving from the Gridloc shares
3.8.4 the purchaser shall procure the immediate resignation of all directors
appointed by the purchaser to the Gridloc board
3.8.5 the Purchaser irrevocably appoints the vendor as its duly authorised
attorney on its behalf and in its name to do all acts and things and
execute all documents which the purchaser could do itself to facilitate
and materialise the matters set out in this clause 3.8
3.8.6 upon the matters referred to in Clauses 3.8.1 to 3.8.5 taking place the
purchaser is released from its obligations under this agreement and in
particular the purchaser is not obliged to allot Auto-Q USA shares to
the vendor
3.8.7 for the purpose of clause 3.3.2 and this clause 3.8 "purchaser" shall
include any third party or parties to whom the legal and/or beneficial
ownership of the Gridloc shares are transferred by the vendor at the
purchaser's direction
3.9 Until such time as the Auto-Q shares are allotted to the vendor in the
terms of this agreement the purchaser waives and abandons all and any
entitlements to dividends, distributions, bonuses and other benefits
receivable in respect of the Gridloc shares except insofar as the
vendor ultimately receives similar benefits in respect of the Auto-Q
USA shares duing the same time period
4 WARRANTIES AND OBLIGATIONS
4.1 Where the terms "company" and "vendor" are used in the warranties set
out in the schedule following these shall also mean "Auto-Q USA" and
the "purchaser", respectively and the warranties accordingly given by
the vendor in respect of the company and by the purchaser in respect of
Auto-Q USA shall be read and construed accordingly.
4.2 The vendor and purchaser give to each other the warranties set out in
the schedule following and undertake with each other that the
warranties and representations therein contained are as at the date
hereof and shall to the extent mentioned in the
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schedule be at completion (in the case of the company) and at the
allotment of the Auto-Q shares (in the case of Auto-Q USA) true and
accurate in all respects and are not to be affected or limited by any
previous or other disclosures express or implied to the purchaser the
vendor their officers or representatives or professional advisers
except as expressly provided in the disclosure letter of even date
herewith
4.3 The warranties and other obligations of the vendor and the purchaser
under this agreement shall bind the personal representatives and other
successors in title and assigns of the vendor and the purchaser
respectively and shall not be affected by completion or by either of
them rescinding or failing to rescind this agreement or failing to
exercise or delaying the exercise of any right or remedy or by any
other event or matter except a specific and duly authorised written
waiver or release and no single or partial exercise of any right or
remedy shall preclude any further or other exercise
4.4 The purchaser and the vendor shall be entitled to treat each obligation
(whether a warranty or other obligation) as a condition of this
agreement
4.5 Unless expressly indicated to the contrary conditions in this agreement
are imposed for the benefit of the purchaser and the vendor and where
conditions are for the benefit of a particular party they may be waived
by that party . The vendor and the purchaser both undertake that
disclosures of qualifications to the above mentioned warranties are so
expressed as to ensure that the effect of such disclosures on the
purchaser and the vendor respectively is clear. Each warranty which is
set out in a separate paragraph or which could be treated as a separate
warranty shall be construed as a separate warranty independently of any
other to the intent that the rights of the purchaser and the vendor
respectively under and the meaning given to any one such warranty shall
not be restricted by reference to or the meaning given to any other
warranty. There are no other matters which have not been disclosed and
which may render the disclosures incomplete inaccurate or misleading
4.6 The vendor warrants to the purchaser that:
4.6.1 the Gridloc shares will at completion constitute 20 per cent of the
issued and allotted share capital of the company;
4.6.2 there is and at completion will be no pledge, lien or other encumbrance
on, over or affecting the Gridloc shares and there is and at completion
will be no agreement or arrangement to give or create any such
encumbrance and no claim has been or will be made by any person to be
entitled to any of the foregoing;
4.6.3 subject to any approval required by any government authority in Cyprus
the vendor will be entitled to transfer the full legal and beneficial
ownership of the Gridloc shares to the purchaser on the terms of this
agreement without the consent of any third party
5 NON COMPETITION
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5.1 For the purpose of assuring to the purchaser the full benefit of the
business and goodwill of the company the vendor hereby agrees with the
purchaser in further consideration of this agreement as separate and
independent agreement that he will not:-
5.1.1 at any time before or after completion disclose to any person or
himself use for any purpose and shall use his best endeavours to
prevent the publication or disclosure of any information concerning
this agreement the business accounts or finances of the company or any
of its or their clients' or customers' transactions or affairs which
may or may have come to his knowledge (except in confidence to his or
the company's professional advisers) save where otherwise required by
applicable law or where the company may be required to do so by
existing or future contractual obligations
5.2 for a period of five years after completion either on his own account
or for any other person other than for the company directly or
indirectly deal with solicit interfere with or endeavour to entice away
from the company for the time being any person who to his knowledge is
now or has during the two years preceding today's date been a supplier
client customer or employee of or in the habit of dealing with the
company and
5.3 for a period of five years after completion without the purchaser's
prior written consent (such consent not to be unreasonably withheld or
delayed) either alone or jointly with or as manager or agent for any
person directly or indirectly carry on or be engaged or concerned or
interested
5.3.1 in the area of the universe in the business of vehicle tracking and
information systems or
5.3.2 in any other business similar to any business carried on by the company
at today's date
5.4 at any time before or after the date of completion directly or
indirectly carry on a business similar to any part of the business at
present carried on by the company under a title containing the word
"gridloc" or any other word colourably resembling the same and he will
at all times procure that any company or organisation controlled by him
will not carry on any such business under such name or names.
5.5 The vendor records that he considers the above restrictions are
reasonable. If any of these restrictions is held not to be valid as
going beyond what is reasonable for the protection of the interests of
the purchaser but would be valid if part of the wording were deleted or
its extent reduced or modified then such restriction shall apply with
such modification as may be necessary to make it enforceable
6 GENERAL
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6.1 The vendor shall procure the passing of such resolutions execute such
documents and waivers and generally do everything further required by
the purchaser effectively to comply with his obligations under this
agreement and to vest the beneficial and legal ownership of the Gridloc
shares in the purchaser or as it may direct free from any option lien
charge or encumbrance and irrevocably appoints the purchaser as his
agent to do all such things on the vendor's behalf
6.2 The purchaser shall procure the passing of such resolutions execute
such documents and waivers and generally do everything further required
by the vendor effectively to comply with its obligations under this
agreement and to vest the beneficial and legal ownership of the Auto-Q
shares in the vendor free from any option lien charge or encumbrance
and irrevocably appoints the vendor as its agent to do all such things
on the purchaser's behalf
6.3 The vendor shall both before and after completion give the purchaser
such information relating to the company as the purchaser may
reasonably require and shall afford the purchaser such facilities as it
may reasonably require to satisfy itself as to the accuracy of the
warranties given and representations made by the vendor
6.4 References to statutory provisions shall be construed as references to
those provisions as amended or re-enacted (whether with or without
modification) or as their application is modified by other provisions
(whether before or after the date hereof) from time to time and shall
include references to any statutory provision of which they are
re-enactments (whether with or without modification)
6.5 This agreement (together with any documents referred to herein)
constitutes the whole agreement between the parties and no variation
shall be effective unless it is recorded in a document signed by the
vendor and the purchaser
6.6 This agreement supersedes any previous agreement between the parties in
relation to the acquisition of the Gridloc shares or any of them and
the parties acknowledge that no claim shall arise in respect of any
agreement so superseded
6.7 Time shall be of the essence of any obligation to be performed by the
vendor and the purchaser under this agreement.
6.8 This agreement shall be construed according to and governed by the law
of England; the vendor and the purchaser submit to the exclusive
jurisdiction of the English courts; and the vendor irrevocably
authorises and instructs [nominate english solicitor] and the purchaser
irrevocably instructs Fox Hayes of 000 Xxxxxxxx Xxxx, Xxxxx, XX0 0XX to
accept service of any proceedings
6.9 The vendor and purchaser record that this agreement has been concluded
on the basis that the purchaser and the vendor are relying on the
accuracy of the representations by the other party and of the
warranties as set out in this agreement and that the vendor or the
purchaser as the case may be will either rectify any breach or
compensate the other party therefor. No claim by the purchaser and the
vendor shall be prejudiced or reduced in consequence of any information
relating to the company or Auto-Q USA as the case may be (other
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than information expressly set out in this agreement) which may before
or after the date of this agreement have come to the knowledge of the
purchaser or the vendor and it shall not be a defence to any claim
against one party that the other knew or ought to have known or had
constructive knowledge of any information (other than information
expressly set out in this agreement) relating to the circumstances
giving rise to such claim
6.10 No notice to either party shall be valid unless a copy thereof shall be
given to their respective solicitors
6.11 Any notice required to be given by either party hereto to the other
shall be deemed validly served if served on the solicitors mentioned
above or such other address as may from time to time be notified for
this purpose and any notice so served shall be deemed to have been
served 48 hours after the time at which it was posted and in proving
such service it shall be sufficient to prove that the notice was
properly addressed and posted
6.12 No announcement of any kind shall be made by the vendor or the
purchaser in respect of the subject matter of this agreement unless
specifically agreed in writing by the other party
6.13 This agreement shall be binding upon each party's successors and
assigns and personal representatives (as the case may be)
6.14 All expenses incurred by or on behalf of the parties including all fees
of agents representatives solicitors accountants and actuaries employed
by any of them in connection with the negotiation preparation or
execution of this agreement shall be borne solely by the party who
incurred the liability
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SCHEDULE
1. WARRANTIES
1.1. TAXATION
1.1.1 The company has not incurred liability for taxation.
1.2. PROPERTY
1.2.1 The company does not own any immovable property.
1.3. AUTHORITY AND CAPACITY OF VENDOR
1.3.1 The vendor has full power and authority to enter into and perform this
agreement which constitutes a binding obligation on the vendor.
1.4. OWNERSHIP OF GRIDLOC SHARES
1.4.1. The Gridloc shares will at completion constitute 20 per cent of the
issued and allotted share capital of the company and will then be fully
paid or credited as fully paid
1.4.2. There is not now nor is there any agreement or arrangement to create
any pledge lien charge or encumbrance on over or affecting any of the
shares of the company and no claim has been made by any person to be
entitled to any of the foregoing
1.4.3. The vendor is entitled to sell and transfer to the purchaser the full
legal and beneficial ownership of the Gridloc shares free from all
liens charges and encumbrances on the terms of this agreement without
the consent of any third party save for any necessary approval required
by any government authority in Cyprus
1.5. DETAILS OF THE COMPANY
1.5.1. The information relating to the company is true and complete in all
respects
1.5.2. DIRECTORS AND SHADOW DIRECTORS
1.5.2.1. The board of directors of the company does not exceed 3 directors
1.5.2.2. No person is a shadow director (within the meaning of CA s 741) of the
company but is not treated as one of its directors for all the purposes
of the Companies Acts
1.5.3. SUBSIDIARIES ASSOCIATIONS AND BRANCHES
1.5.3.1. The company has not and has not agreed to acquire any share or loan
capital of any other company (whether incorporated in the Republic of
Cyprus or elsewhere).
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1.5.3.2. The company has not outside the Republic of Cyprus any branch agency or
place of business or any permanent establishment (as that expression is
defined in the relevant double taxation relief orders current at the
date of this agreement)
1.5.4. OPTIONS OVER THE CAPITAL OF THE COMPANY
Save as provided in this agreement there are no agreements or
arrangements in force which call for the present or future issue or
allotment of or grant to any person the right (whether conditional or
otherwise) to call for the issue allotment or transfer of any share or
loan capital of the company (including any option or right of
pre-emption or conversion)
1.5.5. NEW ISSUES OF CAPITAL
Save as provided in this agreement no share or loan capital has been
issued or allotted or agreed to be issued or allotted by the company
since the statement of assets and liabilities date
1.5.6. COMMISSIONS
No one is entitled to receive from the company any finder's fee
brokerage or other commission in connection with the sale and purchase
of the Gridloc shares under this agreement
1.5.7. MEMORANDUM AND ARTICLES OF ASSOCIATION STATUTORY BOOKS AND RESOLUTIONS
1.5.7.1. The copy of the memorandum and articles of association of the company
attached to the disclosure letter is accurate and complete in all
respects and has embodied in it or annexed to it a copy of every such
resolution as is referred to in section 137 of the Cyprus Companies Law
1.5.7.2. The register of members and other statutory books of the company have
been properly kept and contain an accurate and complete record of the
matters with which they should deal
1.5.7.3. No notice or allegation that any of the foregoing is incorrect or
should be rectified has been received
1.5.7.4. Since the statement of assets and liabilities date no alteration has
been made to the memorandum or articles of association of the company
and no resolution of any kind of the company has been passed and
pending completion no such resolution shall be passed without the prior
written consent of the purchaser
1.5.8. DOCUMENTS FILED
1.5.8.1. All returns particulars resolutions and documents required by the
Cyprus Companies Law or any other legislation to be filed with the
registrar of Cyprus companies or any other authority in respect of the
company have been duly filed within statutory time limits and were
correct; and due compliance has been made
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with all the provisions of the Cyprus Companies Law and other legal
requirements in connection with the formation of the company the
allotment or issue of shares debentures and other securities the
payment of dividends and the conduct of its business
1.5.8.2. All charges in favour of the company have (if appropriate) been
registered in accordance with the provisions of section 90 et seq. of
the Cyprus Companies Law
1.5.9. POSSESSION OF DOCUMENTS
All title deeds relating to the assets of the company and an executed
copy of all agreements to which the company is a party and the original
copies of all other documents which are owned by or which ought to be
in the possession of the company are in the possession of the company
or its advisors
1.5.10. INVESTIGATIONS
There are not pending or in existence any investigations or enquiries
by or on behalf of any governmental or other body in respect of the
affairs of the company
1.5.11. INFORMATION DISCLOSED TO PURCHASER CORRECT
1.5.11.1. All information given by the vendor and the purchaser or their
respective professional advisors to the other party relating to the
business activities affairs or assets or liabilities of that party was
when given and is now accurate and comprehensive in all respects
1.5.11.2. There are no material facts or circumstances in relation to the assets
business or financial condition of the company or the purchaser which
have not been fully and fairly disclosed in writing to the other party
or its professional advisors and which if disclosed might reasonably
have been expected to affect the decision of the purchaser or the
vendor to enter into this agreement
1.5.11.3. The company has not at any time purchased or redeemed or repaid any
share capital or given any financial assistance in connection with any
such acquisition of share capital as would fall within section 53 of
the Cyprus Companies Law
1.6. ACCOUNTS
1.6.1 The company has not prepared any accounts
1.7. FINANCE
1.7.1. CAPITAL COMMITMENT
The company has not made or agreed to make any capital expenditure or
incurred or agreed to incur any capital commitments nor has it disposed
of or realised any capital assets or any interest therein otherwise
than may have been incurred in the ordinary course of its business.
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1.7.2. DIVIDENDS AND DISTRIBUTIONS
1.7.2.1 The company has not declared a dividend or other distribution
1.7.3. BANK AND OTHER BORROWINGS
1.7.3.1. Full details of all limits on and other terms and conditions of the
company bank overdraft facilities are accurately set out in the
disclosure letter
1.7.3.2. The total amount borrowed by the company from its bankers does not
exceed its respective overdraft facilities
1.7.3.3. The total amount borrowed by the company (as determined in accordance
with the provisions of the relevant instrument) does not exceed any
limitation on its borrowing powers contained in its articles of
association or in any debenture or other deed or document binding upon
it
1.7.3.4. The company has not outstanding nor has agreed to create or issue any
loan capital; nor has it factored any of its debts or engaged in
financing of a type which would not require to be shown or reflected in
the last accounts or borrowed any money which it has not repaid save
for borrowings not exceeding the amounts shown in the last accounts
1.7.3.5. The company has not since the last accounts date repaid or become
liable to repay any loan or indebtedness in advance of its stated
maturity
1.7.3.6. The company has not received notice (whether formal or informal) from
any lenders of money to any group company requiring repayment thereof
or intimating the enforcement by any such lender of any security which
it may hold over any assets of any group company; and there are no
circumstances likely to give rise to any such notice
1.7.4. LOANS BY AND DEBTS DUE TO THE COMPANY
The company has not lent any money which has not been repaid to it or
owns the benefit of any debt (whether or not due for payment) other
than debts which have arisen in the ordinary course of its business;
and the company has not made any loan or quasi-loan contrary to the
Cyprus Companies Law
1.7.5. LIABILITIES
There are no liabilities (including contingent liabilities) which are
outstanding on the part of the company other than those liabilities
disclosed in the statement of assets and liabilities or incurred in the
ordinary and proper course of trading since the statement of assets and
liabilities date.
1.7.6. BANK ACCOUNTS
1.7.6.1. A statement of the bank accounts of the company and of the credit or
debit balances thereon has been supplied to the purchaser
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1.7.6.2. Since such statement there have been no payments out of any such
accounts and the balances on current accounts are not substantially
different from the balances shown on such statements
1.7.7. WORKING CAPITAL
Having regard to existing bank and other facilities the company has
sufficient working capital for the purposes of continuing to carry on
its business in its present form and at its present level of turnover
for the period of three months after completion and the purposes of
executing carrying out and fulfilling in accordance with their terms
all orders projects and contractual obligations which are binding upon
the company and remain outstanding
1.7.8. GOVERNMENT GRANTS
1.7.8.1. The company has not applied for or received any grant subsidy or
financial assistance from any government department or agency or any
local or other authority
1.7.8.2. The company has not done or omitted to do any act or thing which could
result in all or any part of any investment grant employment subsidy
or other similar payment made or due to be made to it becoming
repayable or being forfeited or withheld in whole or in part
1.8. TRADING AND CONTRACTS
1.8.1. CHANGES IN BUSINESS ACTIVITIES AND FINANCIAL POSITION SINCE
INCORPORATION
1.8.1.1 Since incorporation
1.8.1.1.1 the business of the company has been continued in the ordinary and
normal course;
1.8.1.1.2 there has been no deterioration in either the turnover or the
financial or trading position or prospects of the company
1.8.1.1.3 the company has not by doing or omitting to do anything prejudiced its
goodwill;
1.8.1.1.4 no part of the business of the company has been affected by any
abnormal factor not affecting similar businesses to a like extent;
1.8.1.1.5 the company has paid its creditors in accordance with their respective
credit terms; and there are no amounts owing by the company which have
been due for more than six weeks
1.8.1.1.6 no transaction of any material importance has been entered into by the
company which if it had taken place prior to the preparation of a set
of accounts would have required to be disclosed or reflected in the
accounts
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1.8.1.1. The trading prospects of the company have not been adversely affected
as a result of any event or circumstance
1.8.2. VENDOR'S OTHER INTERESTS AND LIABILITIES TO THE COMPANY
1.8.2.1. The vendor and his associates do not have any rights or interests
directly or indirectly in any businesses other than those now carried
on by the company which are or are likely to be or become competitive
with the businesses of the company save as registered holder or
beneficial owner of any class of securities of any company which is
listed on the stock exchange or dealt in on the unlisted securities
market and in respect of which the vendor with his associates holds and
is beneficially interested in less than 5 per cent of any single class
of the securities in that company
1.8.2.2. There is no outstanding indebtedness of the vendor or his associates to
the company
1.8.3. EFFECT OF SALE OF GRIDLOC SHARES
1.8.3.1. Compliance with the terms of this agreement does not and will not:
1.8.3.2. 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 a party or any provision of the
memorandum or articles of association of the company or any encumbrance
lease contract order judgment award injunction regulation or other
restriction or obligation of any kind or character by which or to which
any asset of the company is bound or subject;
1.8.3.3 relieve any person from any obligation to the company (whether
contractual or otherwise) or enable any person to determine any such
obligation or any right or benefit enjoyed by the company or to
exercise any right whether under an agreement with or otherwise in
respect of the company;
1.8.3.4 result in the creation imposition crystallisation or enforcement of any
encumbrance whatsoever on any of the assets of the company;
1.8.3.5 result in any present or future indebtedness of the company becoming
due or capable of being declared due and payable prior to its stated
maturity
1.8.4 JOINT VENTURES AND PARTNERSHIPS
The company is not nor has agreed to become a member of any joint
venture consortium partnership or other unincorporated association; and
the company has not agreed to become a party to any agreement or
arrangement for sharing commissions or other income
1.8.5 AGREEMENTS RELATING TO THE MANAGEMENT AND BUSINESS
There are no arrangements or understandings (whether legally
enforceable or not) between the company and any person who is a
shareholder or the beneficial owner
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of any interest in such company or in any company in which the company
is interested or any associate of any such person relating to the
management of the company its business or the appointment or removal of
directors of the company or the ownership or transfer of ownership or
the letting of any of the assets of the company or the provision supply
or purchase of finance goods services or other facilities to by or from
the company or otherwise howsoever relating to its affairs
1.8.6 AGENCY AGREEMENTS AND AGREEMENTS RESTRICTING BUSINESS
1.8.6.1 The company is not a party to any agency distributorship marketing
purchasing manufacturing or licensing agreement or arrangement or any
restrictive trading or other agreement or arrangement pursuant to which
any part of its business is carried on or which in any way restricts
its freedom to carry on the whole or any part of its business in any
part of the world in such manner as it thinks fit
1.8.6.2 The company is not a party to any undertaking or assurances given to
any court or governmental agency which is still in force
1.8.7 LITIGATION DISPUTES AND WINDING UP
1.8.7.1 The company is not engaged in any litigation arbitration or tribunal
proceedings as plaintiff or defendant; there are no such proceedings
pending or threatened or any disputes either by or against the company;
and there are no circumstances which are likely to give rise to any
litigation arbitration or tribunal proceedings
1.8.7.2 There is no dispute with any revenue or other official department in
the Republic of Cyprus or elsewhere in relation to the affairs of the
company nor has there been any since the company's incorporation and
there are no facts which may give rise to any such dispute
1.8.7.3 No order has been made or petition presented or resolution passed for
the winding-up of the company; nor has any distress execution or other
process been levied in respect of the company which remains
undischarged; nor is there any unfulfilled or unsatisfied judgment or
court order outstanding against the company
1.8.8 COMPLIANCE WITH STATUTES
1.8.8.1 The company has not and none of its officers agents or employees
(during the course of their duties in relation to the company) has
committed or omitted to do any act or thing the commission or omission
of which is or could be in contravention of any act order regulation or
the like (whether of the Republic of Cyprus or elsewhere) giving rise
to any fine penalty default proceedings or other liability on the part
of the company
1.8.8.2 The company has conducted and is conducting its business in all
respects in accordance with all applicable laws and regulations whether
of the Republic of Cyprus or elsewhere
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1.8.8.3 The company has not carried on nor carries on (nor has at any time when
not an authorised person under chapter III Financial Services Xxx 0000
carried on) investment business in the United Kingdom within the
meaning of the Financial Services Xxx 0000 s 1
1.8.9 DOCUMENTS STAMPED
All documents which in any way affect the right title or interest of
the company in or to any of its property undertaking or assets or to
which the company is a party and which attract stamp duty have been
duly stamped within the requisite period for stamping
1.8.10 BUSINESS NAMES
The company does not use a name for any purpose other than its full
corporate name
1.8.11 TRANSACTIONS INVOLVING DIRECTORS
The company has not been a party to any transaction to which any of the
provisions of sections 181 et seq. of the Cyprus Companies Law may
apply
1.8.12 POWER OF ATTORNEY AND AUTHORITY
1.8.12.1 No power of attorney has been given by the company
1.8.12.2 There are not outstanding any authorities (express or implied) by which
any person may enter into any contract or commitment to do anything on
behalf of the company
1.8.13 LICENCES AND CONSENTS
1.8.13.1 The company has obtained all necessary licences and consents from any
person authority or body for the proper carrying on of its business and
all such licences and consents are valid and subsisting
1.8.13.2 The company is not in breach of any of the terms or conditions of any
such licences or consents; and there are no factors that might in any
way prejudice the continuation or renewal of any of such licences or
consents
1.8.14 SUBSISTING CONTRACTS
1.8.14.1 The disclosure letter contains accurate particulars of all the
contracts and other engagements whether written or oral to which the
company is a party at the date of this agreement
1.8.14.2 The company is not a party to any contract transaction arrangement or
liability which:
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1.8.14.2.1 is of an unusual or abnormal nature or outside the ordinary and
proper course of business;
1.8.14.2.2 is of a loss-making nature (that is known to be likely to result in a
loss to the company on completion of performance);
1.8.14.2.3 cannot readily be fulfilled or performed by the company on time
without undue or unusual expenditure of money effort or personnel;
1.8.14.2.4 involves payment by the company by reference to fluctuations in the
index of retail prices or any other index or in the rate of exchange
for any currency;
1.8.14.2.5 involves an aggregate outstanding expenditure by the company of more
than L1,000 sterling
1.8.14.2.6 is a contract for hire or rent hire purchase or purchase by way of
credit sale or periodical payment;
1.8.14.2.7 involves or is likely to involve obligations or liabilities which by
reason of their nature or magnitude ought reasonably to be made known
to an intending purchaser of the Gridloc shares
1.8.15 DEFAULTS UNDER AGREEMENTS BY THE COMPANY
1.8.15.1 The company is not nor will it with the lapse of time become:
1.8.15.1.1 in default under any agreement or covenant to which it is a party or
in respect of any other obligations or restrictions binding upon it;
1.8.15.1.2 in default under any obligations existing by reason of membership of
any association or body;
1.8.15.1.3 liable in respect of any representation or warranty (whether express
or implied) or any matter giving rise to a duty of care on the part
of the company
1.8.15.2 No threat or claim of default under any agreement instrument or
arrangement to which the company is a party has been made and is
outstanding against the company; and there is nothing whereby any
such agreement instrument or arrangement may be prematurely
terminated or rescinded by any other party or whereby the terms
thereof may be worsened
1.8.16 OTHER PARTIES' DEFAULTS
No party to any agreement with or under an obligation to the company
is in default thereunder being a default which would be material in
the context of the financial or trading position of the company; and
there are no circumstances likely to give rise to such a default
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1.8.17 OUTSTANDING OFFERS
No offer tender or the like is outstanding which is capable of being
converted into an obligation of the company by acceptance or other act
of some other person firm or company
1.8.18 DEFECTIVE PRODUCTS
The company has not manufactured sold or supplied products which are or
were or will become in any material respect faulty or defective or
which do not comply in any material respect with any warranties or
representations expressly or impliedly made by the company or with all
applicable regulations standards and requirements in respect thereof
1.8.19 GUARANTEES AND INDEMNITIES
There is not now outstanding in respect of the company or the vendor
any guarantee or agreement for indemnity or for suretyship given by or
for the accommodation of the company
1.8.20 INSIDER CONTRACTS
1.8.20.1 There is not outstanding and there has not at any time since the
company's incorporation been outstanding any contract or arrangement to
which the company is a party and which the vendor or any associate of
his or any director of the company or any associate of any such
director is or has been interested whether directly or indirectly
1.8.20.2 The company is not a party to nor have its profits or financial
position since the company's incorporation been affected by any
contract or arrangement which is not of an entirely arm's-length nature
1.8.21 MANAGEMENT REPORTS
There have been no reports concerning the company by financial or
management consultants since the company's incorporation
1.8.22 POLLUTION
The company has complied and has adequate facilities to continue to
comply with all legislation relating to the disposal of industrial
effluent and has no liability in respect of contaminative land
1.8.23 RESIDUAL LIABILITY UNDER LEASES
The company has no residual liability under leases
1.9 EMPLOYMENT
1.9.1 The company has no employees and there are no claims by former
employees against the company
1.10 ASSETS
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1.10.1 OWNERSHIP OF ASSETS
1.10.1.1 The company owned at the statement of assets and liabilities date and
had good and marketable title to and (except for current assets
subsequently sold or realised in the ordinary course of business) still
owns and has good and marketable title to all the assets included in
the statement of assets and liabilities and to all assets acquired
since the statement of assets and liabilities date and not subsequently
sold or realised as aforesaid.
1.10.1.2 The company has not created or granted or agreed to create or grant any
security interest or other encumbrances in respect of any of the fixed
assets included in the statement of assets and liabilities or acquired
or agreed to be acquired since the statement of assets and liabilities
date save in the ordinary course of its business.
1.10.1.3 Save as described in the statement of assets and liabilities none of
the property assets undertaking or goodwill of the company is subject
to any option charge lien or encumbrance or any agreement or commitment
to give or create any of the foregoing and the same are the sole
unencumbered absolute property of such company.
1.10.2 ASSETS SUFFICIENT FOR THE BUSINESS
1.10.2.1 The assets owned by the company together with any assets held under the
agreements listed in the disclosure letter comprise all assets
necessary for the continuation of the business of such company as now
carried on.
1.10.2.2 The fixed assets are materially the same as those held at the statement
of assets and liabilities date.
1.10.3 RETENTION OF TITLE
The company has not purchased any stock goods or materials from any of
its suppliers on terms that property in it does not pass until full
payment is made or all indebtedness discharged.
1.10.4 INDUSTRIAL PROPERTY RIGHTS AND TRADE SECRETS
1.10.4.1 All industrial property rights used or required by the company in
connection with its business are in full force and effect and are
vested in and beneficially owned by the company.
1.10.4.2 The company is the sole beneficial owners of the industrial property
rights listed in the disclosure letter and (where registration is
possible) the company has been and is registered as proprietor and each
of such rights is valid and enforceable and none of them is being used
claimed opposed or attacked by any other person.
1.10.4.3 No right or licence has been granted to any person by the company to
use in
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any manner or to do anything which would or might otherwise infringe
any of the said industrial property rights; and no act has been done or
omission permitted by the company whereby they or any of them have
ceased or might cease to be valid and enforceable.
1.10.4.4 The business of the company (and of any licensee under a licence
granted by the company) as carried on as at the date hereof does not
and is not likely to infringe any industrial property right of any
other person (or would not do so if the same were valid) or give rise
to a liability to pay compensation pursuant to Patents Xxx 0000 ss 40
and 41 and all licences to the company in respect of any such
protection are in full force and effect.
1.10.4.5 The company has not (save in the ordinary and normal course of
business) disclosed or permitted to be disclosed or undertaken or
arranged to disclose to any person other than the purchaser any of its
know-how trade secrets confidential information price lists or lists of
customers or suppliers.
1.10.4.6 Nothing has been done or omitted by the company which would enable any
licensee under a licence granted by the company to be terminated or
which in any way constitutes a breach of the terms of any such licence.
1.10.5 PROPERTY
The company does not own and has never owned any freehold or leasehold
property
1.11 DISCLOSURES
The disclosures contained in any disclosure letter are accurate in all
respects and fully clearly and accurately disclose every matter to
which they relate and the warranties which are affected; and there are
no other matters which have not been disclosed and which may render
such disclosures incomplete inaccurate or misleading.
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SIGNATURE PAGE
OF
AGREEMENT FOR SALE OF SHARES
Simon Xxxxxxxxxxx Xxxxx Allso
and
Warminster Systems Limited
and
Xxxxxx Xxxx Xxx Xxx
IN WITNESS whereof the parties hereto have executed this agreement the day and
year first before written
SIGNED by
Simon Xxxxxxxxxxx Xxxxx Allso
In the presence of:-
SIGNED by the authorised
Representative of
Warminster Systems Limited
in the presence of:-
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ANNEXURES:
Shareholders agreement
Loan agreement
Statement of assets and liabilities (page 4)
Gridloc bank statements (page 6)
No subsisting guarantees (page 6)
Disclosure letter
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[Simon Allso's address]
RE: SIMON ALLSO TO WARMINSTER SYSTEMS LIMITED
Agreement for sale of shares Gridloc Limited
This is the statement of assets and liabilities referred to on page 4 of the
above agreement.
I certify that Gridloc Limited does not have at todays date liabilities in
excess of L50,000 sterling.
I confirm that at todays date there are no subsisting guarantees by Gridloc
Limited in my favour and I am not indebted to the company or vice versa.
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