DATED 26 November 1996
(1) XXXXXXX XXXXXXX and XXXXXXXX XXXXX XXXXXXX
- and -
(2) XXXXXXX XXXXXXX & CO
(3) SITEINPUT LIMITED
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AGREEMENT
for the sale and purchase of shares in
PDM Communications Limited
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R A K I S O N S
S O L I C I T O R S
00 Xxxxxxxx Xxxx, Xxxxxx XX0X 0XX
TELEPHONE: 0000-000 0000
FAX: 0000-000 0000
REF: JMP\11714\xxxxxxx0.xxx
DATED: 26 November 1996
PARTIES:
1 "Vendors": the persons who names and addresses are set out in column 1
of the Schedule
2 "LM": Xxxxxxx Xxxxxxx & Co, a sole trader of Xxxxx Xxxxx, Xxxxxx Xxxx,
Xxxxxxx, Xxxxxx, XX00 0XX
3 "Xxxxxx": Siteinput Limited (registered in England under company
number 3113109) whose registered office is at 0 Xxxxxx Xxxxxx,
Xxxxxxx, Xxxxxxxxx XX0 0XX
OPERATIVE PROVISIONS:
1 Definitions
1.1 In this agreement the following words and expressions have the
meanings stated:
"agreed form"
a form agreed between the parties, a copy of which has been initialled
for the purposes of identification by or on behalf of the parties;
"Company"
PDM Communications Limited (registered in England under number
1324588);
"Completion"
completion of the purchase of the Shares in accordance with clause 4;
"Guarantee"
the guarantee given by Xx Xxxxxxx to Midland Bank plc in respect of
the Company's indebtedness;
"Loan Account"
the loan account opened by the Company in the name of Xx Xxxxxxx on
which Xx Xxxxxxx owes to the Company (pound)14,616.58 as at the date
of this agreement;
"Shares"
27 ordinary shares of (pound)1 each in the Company;
1
"Warranties"
the warranties and representations by the Vendors set out in clause 5.
1.2 Clause headings in this agreement are for ease of reference only and
do not affect the construction of any provision.
2 Agreement for sale
Subject to the terms and conditions of this agreement the Vendors
shall sell with full title guarantee and Xxxxxx shall purchase the
Shares, free from all liens, charges and encumbrances and with all
rights attaching to them, with effect from the date of this agreement.
3 Purchase consideration
The purchase consideration for the Shares shall be the aggregate sum
of (pound)12,600 (of which (pound)10,000 has been paid as a deposit in
advance of this agreement) and the balance of which shall be satisfied
on Completion in the amounts set opposite the respective names of the
Vendors in columns 3 and 4 of the Schedule.
4 Completion
4.1 Completion shall take place at the offices of Milton on the execution
of this agreement.
4.2 The Vendors shall deliver to Xxxxxx:
4.2.1 duly completed and signed transfers in favour of Xxxxxx, or as it may
direct, of the Shares;
4.2.2 service and employment agreements in the agreed forms duly executed by
each of them;
4.2.3 an invoice addressed to the Company from LM in the sum
of (pound)12,000 (excluding VAT);
4.2.4 a resignation as director and the secretary of the Company from Xxx
Xxxxxxx with a written acknowledgment from her, executed as a deed in
such form as Xxxxxx requires, that she has no claim against the
Company on any grounds whatsoever.
4.3 The parties to this agreement shall take or cause to be taken the
following steps at a board meeting of the Company:
2
4.3.1 the approval of the transfers (subject to stamping) referred to in
clauses 4.2.1;
4.3.2 the submission and acceptance of the resignation referred to in clause
4.2.4;
4.3.3 the appointment of Xxxxxxx Xxxxxx Xxxxxx and Xxxxxx Xxxx Xxxxxxxx as
additional directors of the Company;
4.3.4 the appointment of Xxxxxx Xxxx Xxxxxxxx as secretary of the Company;
4.3.5 the changing of the Company's registered office to 0 Xxxxxx Xxxxxx,
Xxxxxxx, Xxxxxxxxx XX0 0XX;
4.3.6 the convening of an extraordinary general meeting of the Company on
short notice to adopt new articles of association of the Company in
the agreed form.
4.4 Upon completion of the matters referred to in clauses 4.2 and 4.3
Xxxxxx shall or shall procure:
4.4.1 the partial satisfaction of the Loan Account by the sum shown in
column 4 of the Schedule;
4.4.2 the delivery to each of the Vendors of their respective service
agreements in the agreed forms duly executed by the Company;
4.4.3 the payment of the invoice referred to in clause 4.2.3;
4.5 The Purchaser shall use all reasonable endeavours to procure the
release of the Guarantee as soon as practicable following Completion.
5 Warranties and indemnity by the Vendors
5.1 The Vendors jointly and severally warrant to Xxxxxx that the
warranties set out below are true and accurate in all material
respects and are not misleading at the date of this agreement:
5.1.1 each of the Vendors has full power and authority to transfer the
Shares with full title guarantee to Xxxxxx free from any lien, charge
or encumbrance whatsoever;
5.1.2 the Vendors have full power to enter into and perform this agreement
and this agreement constitutes binding obligations on each of them in
accordance with the terms of this agreement;
5.1.3 there are no agreements or arrangements in force, other than this
agreement, which grant to any person other than Xxxxxx the right to
call for the issue, allotment or transfer of any share or loan capital
of the Company;
3
5.1.4 Xxxxx Kinally of Xxxxxxxxxx, Xxxxxxxx Xxxx, Xxxxxxx, Xxxxxx, XX0 0XX
has no claim whatsoever against the Company.
5.2 Xx Xxxxxxx shall indemnify and keep indemnified on a continuing basis
Xxxxxx and the Company from and against all losses, costs, damages,
liabilities, fines, judgments, expenses, proceedings and demands which
Xxxxxx and/or the Company may suffer, incur or pay as a result of any
claim (including, but not limited to, claims for redundancy payments,
protective awards, or compensation for unfair dismissal but excluding
damages for wrongful dismissal) by Xxx Xxxxxxx as an employee of the
Company.
6 Limitation of Warranty liability
6.1 The provisions of this paragraph shall operate to limit the liability
of the Vendors under or in connection with the Warranties and
references to "such liabilities" shall be construed accordingly. The
parties agree as follows:
6.1.1 no such liabilities shall attach to the Vendors unless the aggregate
amount of such liabilities shall exceed the total sum of (pound)1,000
but if such liabilities shall exceed that sum the Vendors shall be
liable for the whole of such liabilities and not merely for the
excess;
6.1.2 the aggregate amount of such liabilities shall not exceed
(pound)24,600;
6.1.3 claims against the Vendors in relation to the Warranties shall be
wholly barred and unenforceable unless written particulars of such
claims (giving reasonable details of the specific matter or claim in
respect of which such claims are made so far as then known to Xxxxxx)
shall have been given to the Vendors prior to the first anniversary of
this agreement; and
6.1.4 if the Vendors make any payment by way of damages for breach of the
Warranties and within twelve months of the making of the relevant
payment the Company or Xxxxxx receives any benefit otherwise than from
the Vendors which would not have been received but for the
circumstances giving rise to the claim in respect of which the damages
payment was made, Xxxxxx shall, once it or the Company, as the case
may be, has received such benefit, forthwith repay to the Vendors an
amount equal to the lesser of (a) the amount of such benefit and (b)
the damages payment in question.
4
7 No other representations
Xxxxxx admits that it has not entered into this agreement in reliance
upon any representation or promise other than those incorporated in
this agreement.
8 Loan facility to XX
Xxxxxx agrees to procure that the Company provides an interest free
loan of up to (pound)5,000 to LM for the purpose of payment of taxes
incurred by Xx Xxxxxxx subject to the production by him of such
evidence (as Xxxxxx may from time to time reasonably require) of a
demand or requirement for payment by LM of income tax, capital gains
tax or value added tax and provided that any loan shall be subject to
the provisions of the Companies Xxx 0000 and dependent on the relevant
circumstances may be reduced by the Company in its entire discretion
to such amount as is permissible to be loaned to a director
accordingly.
9 Put and call options
9.1 For the purposes of this clause the following words and expressions
shall have the meanings stated:
"Business Day"
a day on which banks in the City of London are open for business other
than a Saturday or Sunday;
"Gross Income"
Sales Revenues less Sales Costs;
"Option Period"
the period commencing on the date of this agreement and expiring at
close of business on the second anniversary of this agreement or, if
the latter is not a Business Day, close of business on the Business
Day immediately following such anniversary;
"PDM Shares"
28 ordinary shares of (pound)1 each in the Company;
5
"Personnel Costs"
the aggregate cost to the Company of employing or engaging staff in
the operation of its business from the date of this agreement as shown
in the Company's management accounts;
"Prescribed Price"
(i) if the Xxxxxx Put Option is exercised, 18.5% of Gross Income; and
(ii) if the Xxxxxx Call Option is exercised, 25% of Gross Income;
"Sales Costs"
the aggregate expenditure of the Company excluding Personnel Costs and
overheads from the date of this agreement as shown in the Company's
management accounts;
"Sales Revenue"
the aggregate income of the Company from the date of this agreement as
shown in the Company's management accounts;
9.2 In consideration of the sum of (pound)1 (receipt of which Xxxxxx
acknowledges) Xxxxxx grants to Xx Xxxxxxx the right to require Xxxxxx
(or as it may direct) ("Moreton Put Option") to purchase all (but not
some only) of the PDM Shares.
9.3 In consideration of the sum of (pound)1 (receipt of which Xx Xxxxxxx
acknowledges) Xx Xxxxxxx grants to Xxxxxx the right for Xxxxxx (or as
it may direct) ("Xxxxxx Call Option") to purchase all (but not some
only) of the PDM Shares.
9.4 The Moreton Put Option and Xxxxxx Call Option are either or both known
as the "P/C Option".
9.5 The Moreton Put Option may be exercised at any time during the Option
Period provided that the Sales Revenue exceeds the aggregate of the
Sales Costs and the Personnel Costs at the date of the latest
published management accounts.
9.6 The Xxxxxx Call Option shall be exercisable at any time (and in the
case of clauses 9.6.2 and 9.6.3, prior to any of those events) if:
9.6.1 Xx Xxxxxxx ceases to be employed by the Company for whatever reason;
9.6.2 the sale or other disposal of the undertaking of the Company or Xxxxxx
or its holding company;
6
9.6.3 the equity share capital of Xxxxxx or its holding company being
admitted to a listing or quotation on any stock exchange (including,
without, limitation, the Alternative Investment Market and NASDAQ).
9.7 The P/C Option shall be exercised by the delivery of a written notice
(in the case of the Xxxxxx Put Option) by Xx Xxxxxxx on Milton or (in
the case of the Xxxxxx Call Option) by Milton on Xx Xxxxxxx stating
that the relevant option is being exercised.
9.8 If the P/C Option is exercised, Xxxxxx and Xx Xxxxxxx shall determine
the Prescribed Price as soon as practicable. Completion of the sale
and purchase of the PDM Shares shall take place within three months of
the Prescribed Price having been determined when Xx Xxxxxxx shall
deliver to Xxxxxx a duly executed transfer of all of the PDM Shares in
favour of Xxxxxx (or as it may direct) and Xxxxxx shall pay to Xx
Xxxxxxx the Prescribed Price in full.
9.9 Xx Xxxxxxx and Xxxxxx shall do all such acts as are required by the
articles of association of the Company to ensure the registration of
the transfer of the PDM Shares and each of Xx Xxxxxxx and Xxxxxx
hereby authorises any director of the Company to do all such acts on
his behalf.
9.10 Xx Xxxxxxx shall not create or allow to be created over any of the PDM
Shares any lien, charge or encumbrance whatsoever so that any transfer
made by him pursuant to this clause 9 shall be made with full title
guarantee.
9.11 The Company shall prepare monthly management accounts in accordance
with standard accounting practice and such management accounts shall
be conclusive in determining Sales Revenue, Sales Costs and Personnel
Costs.
10 Confidentiality, non-competition and non-solicitation
10.1 To assure to Xxxxxx the full benefit of the business and goodwill of
the Company generated by the Vendors, the Vendors undertake by way of
further consideration for the obligations of Xxxxxx under this
agreement, as separate and independent agreements, that they will not:
10.1.1 disclose to any person, or use for any purpose, and shall use all
reasonable endeavours to prevent the publication or disclosure of,
information concerning the business, accounts or finances of the
Company or its clients or customers' transactions or affairs, of which
he has knowledge;
7
10.1.2 for the later of six months from the date of this agreement and six
months after the termination of their respective employments with the
Company, either on their own account or for another person, directly
or indirectly solicit, interfere with or endeavour to entice away from
the Company a person who, to their knowledge, is, or has during the
previous two years been, a client, customer or employee of, or in the
habit of dealing with, the Company;
lO.1.3 for the later of six months from the date of this agreement and six
months after the termination of their respective employments with the
Company, either alone or jointly with, or as manager, agent for or
employee of, another person, directly or indirectly carry on or be
engaged, concerned or interested in the area of 75 miles radius of the
head office of the Company from time to time (a) in the business of
advertising, sales promotion and direct marketing; or (b) in any other
business similar to any business now carried on by the Company in
which he shall have been actively involved in the previous twelve
months.
10.2 The Vendors agree that the covenants and undertakings contained in
clause 10.1 are reasonable and are entered into for the purpose of
protecting the goodwill of the business of the Company and that
accordingly the benefit of the covenants and undertakings may be
assigned by Xxxxxx and its successors in title without the consent of
the Vendors.
10.3 Each covenant and/or undertaking contained in clause 10.1 shall be
construed as a separate covenant or undertaking. If one or more of the
covenants and/or undertakings is held to be against the public
interest or unlawful or in any way an unreasonable restraint of trade,
the remaining covenants and undertakings shall continue to bind the
Vendors.
10.4 If any covenant or undertaking contained in clause 10.1 were void but
would be valid if the period of application were reduced or if some
part of the covenant or undertaking were deleted, the covenant or
undertaking in question shall apply with such modification as is
necessary to make it valid.
8
11 Communications
11.1 All communications between the parties with respect to this agreement
shall be delivered by hand or sent by post. The address for service of
each party shall be the address as stated in this agreement or such
address as the addressee may from time to time have notified in
writing for the purpose of this clause.
A notice shall be deemed to have been served:
l1.1.1 if personally delivered: at the time of delivery;
ll.1.2 if posted: at the expiration of 24 hours.
11.2 In proving service it shall be necessary only to prove that the
communication was contained in an envelope which was duly addressed
and posted in accordance with clause 11.1
12 General
12.1 All expenses incurred by or on behalf of the parties, including all
fees of representatives, solicitors and accountants 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 and the Company shall have no liability in respect of them.
12.2 The construction, validity and performance of this agreement shall be
governed by the laws of England.
13 Announcements
No announcement shall be made in respect of the subject matter of this
agreement, except as specifically agreed between the parties, unless
an announcement is required by law.
14 Working capital
Xxxxxx undertakes with the Vendors to use its best endeavours to
assure that the Company is provided with at least (pound)60,000
working capital provided that this undertaking shall lapse in the
event of:
9
l4.1 any distress, execution. sequestration, or other process being levied
or enforced upon or sued against the Company's property which is not
discharged within 10 days; or
14.2 the Company being unable to pay its debts in the normal course of
business; or
14.3 the Company ceasing or threatening to cease wholly or substantially to
carry on its business or the making of an order or the passing of a
resolution for its winding-up, being in any of these cases otherwise
than for the purpose of a reconstruction or amalgamation, without
insolvency; or
14.4 an encumbrancer taking possession of, or a receiver or trustee being
appointed over the whole or any part of the Company's undertaking,
property or other assets.
EXECUTED by the parties as a deed on the date of this agreement.
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SCHEDULE
Vendors names, address and shareholdings
Consideration in
Vendor's name and address Number of Cash Repayment of Loan
Shares Account
Xxxxxxx Xxxxxxx 14 (pound)6,533 Nil
("Xx Xxxxxxx")
Xxxxx Xxxxx Xxxxxx Xxxx
Xxxxxxx Xxxxxx XX00 ONT
Xxxxxxxx Xxxxx Xxxxxxx 13 (pound)3,700 (pound)2,367
("Xxx Xxxxxxx")
South Croft aforesaid
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SIGNED and DELIVERED )
by XXXXXXX XXXXXXX in his )
personal capacity and on behalf of ) /s/ X. Xxxxxxx
XXXXXXX XXXXXXX & CO )
as a deed in the presence of: )
Witness signs: /s/ X. Xxxxxx
Print name: X. XXXXXX
Address: 00 Xxxxxxxxx Xxxxx
Xxxxxxxxx
Xxxxxx
XXX 0XX
Occupation: Marketing Consultant
SIGNED and DELIVERED )
by XXXXXXXX XXXXX XXXXXXX ) /s/ X.X. Xxxxxxx
as a deed in the presence of: )
Witness signs: /s/ X. Xxxxxx
Print name: X. XXXXXX
Address: 00 Xxxxxxxxx Xxxxx
Xxxxxxxxx
Xxxxxx
XXX 0XX
Occupation: Marketing Consultant
12
EXECUTED as a deed by )
SITEINPUT LIMITED )
Director /s/ X. Xxxxxx
Director Secrerary /s/ XX Xxxxxxxx
13
