1
Exhibit 10.24
DATED 4TH FEBRUARY 1997
-----------------------
(1) THE O'GARA COMPANY
- AND -
(2) XXXXXX XXXXX XXXXXXX XXXXX
- AND -
(3) XXXXXXXXX XXXXX XXXXXXX XXXXX
- AND -
(4) XXXX XXXXX XXXXX
-----------------------------------------
AGREEMENT
FOR THE ACQUISITION OF SHARES IN
NEXT DESTINATION LIMITED
-----------------------------------------
XXXXXXX & CO
000 XXXXXX
XXXXXX
XX0X 0XX
REF: LJF/JMH
2
CONTENTS
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PROVISION/CLAUSE NO.
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Parties and Recitals
1. Definitions
2. Interpretation
3. Sale of Shares
4. Consideration
5. Completion
6. Operation of the Company and its Business Pending Completion
7. Warranties
8. Purchaser's Obligations
9. Restrictions on the Vendors
10. Survival of Provisions
11. Costs
12. Entire Agreement
13. Waivers
14. Assignment
15. Further Assurance
16. Invalidity
17. Counterparts
18. Notices
19. Governing Law and Process Agent
20. Rights of Access
Schedule 1
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Part 1: The Company
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Part 2: Directors
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Part 3: Particulars of Shares etc.
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Part 4: Provisions applying to the Consideration Shares
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Part 5: Provisions applicable to the Loan Notes
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Schedule 2
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The Properties
Schedule 3
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The Warranties
Schedule 4
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Documents in the agreed terms
Schedule 5
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Prospectus issued by the Purchaser dated 12 November 1996
3
THIS AGREEMENT is made on 4th February 0000
X X X X X X N:-
(1) THE O'GARA COMPANY a company incorporated in Ohio, whose registered
office is at 0000 Xx Xxxxx Xxxxx, Xxxxxxxxx, Xxxx 00000, X.X.X. (the
"Purchaser");
(2) XXXXXX XXXXX XXXXXXX XXXXX of 00 Xxxxx Xx Xxxx, 00000 Le Coudray,
Macouard, France ("X. Xxxxx");
(3) XXXXXXXXX XXXXX XXXXXXX XXXXX of The Old Chapel, Xxxxxxx Xxxx, Zeals,
Xxxxxxxxxx, Xxxxxxxxx, XX00 0XX ("X. Xxxxx"); and
(4) XXXX XXXXX XXXXX of Evergreen Cottage, Wittensford Brook, Lyndhurst,
Hampshire SO43 7JA ("X. Xxxxx").
RECITALS
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(A) The Vendors wish to sell and the Purchaser wishes to purchase the
entire issued share capital of Next Destination Limited (the "Company")
upon the terms and conditions of this Agreement.
(B) The Company was incorporated in England with registered number 2856264
and has an authorised share capital of (pound)10,000 divided into
10,000 ordinary shares of (pound)1 all of which have been issued and
are fully paid or credited as fully paid.
(C) Each of the Vendors is the registered and beneficial owner of the
shares in the Company shown against his name in column (2) of Part 3 of
Schedule 1.
(D) The Company has no subsidiaries.
(E) Details of the Company are set out in Part 1 of Schedule 1.
IT IS AGREED as follows:
1. DEFINITIONS
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1.1 In this Agreement (including the Schedules), except where the
context otherwise requires, the words and phrases set out
opposite to them in the first column have the meanings set out
in the second column:-
ACCOUNTS the unaudited management accounts in
the agreed terms relating to the
Company for the financial period
ended on 31st December 1996;
ACCOUNTS DATE 31 August 1996;
ACT the Companies Xxx 0000, as amended
by the Companies Xxx 0000;
4
AGREED TERMS any document, the terms of which
have been agreed between the parties
to this Agreement and which, for the
purposes of identification, has been
initialled by them or on their
behalf (a list of documents in the
agreed terms being set out in
Schedule 4);
AUDITED ACCOUNTS the audited balance sheet of the
Company as at the Accounts Date and
the audited profit and loss account
of the Company for the financial
year of the Company ended on the
Accounts Date, the notes to the
accounts, the relative directors'
report and auditor's report and all
other documents annexed to such
accounts or which are or would be
required by law to be annexed to
them;
AUDITORS Langdowns Chartered Accountants of 0
Xxxxx Xxxx, Xxxxxx Xxxxxx, Xxxxxx,
Xxxxxxxxx;
BUSINESS DAY any day (other than a Saturday or a
Sunday) on which the London clearing
banks are open for business;
COMPLETION completion of the sale and purchase
of the shares pursuant to Clause 5;
CONSIDERATION the aggregate amount payable to the
Vendors by the Purchaser in
accordance with Clause 4;
CONSIDERATION SHARES the shares of common stock of 1 cent
each in the Purchaser to be allotted
to the Vendors in accordance with
Clause 4 which, without limitation,
shall be subject to the provisions
set out in Part 4 of Schedule 1;
DEED OF INDEMNITY the tax deed of indemnity in the
agreed terms to be entered into
pursuant to this Agreement;
DIRECTORS the persons whose names are set out
in Part 2 of Schedule 1 and who are
the only directors of the Company;
DISCLOSURE LETTER the letter in the agreed terms dated
the same date as this Agreement from
the Vendors to the Purchaser;
EMG AGREEMENT the agreement dated the same date as
this Agreement between Euro Marine
Group Limited and O'Gara Satellite
Networks, Inc. in the agreed terms;
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INTELLECTUAL PROPERTY registered trade and service marks,
letters patent,
RIGHTS utility models, registered designs,
unregistered trade and service
marks, trade and business names
(including rights in any get-up or
trade dress), copyright,
unregistered design rights and all
other similar proprietary rights
which may subsist in any part of the
world (but excluding Know-How)
including any registration of any
such rights and applications and any
rights to make applications for any
of the foregoing;
KNOW-HOW all industrial and commercial
information and techniques which is
or are not in the public domain
including (but not limited to) that
information concerned with the
operation of any process; the
manufacture, design or development
of any products; the marketing of
any products or services (including
customer and supplier lists, sales
statistics, survey reports and
market share data); the selection
and purchase of any component, part
or raw materials and the
construction, repair or maintenance
of any product, plant or equipment
existing in whatever form; and any
engineering and chemical data,
specification, formulae, experience,
drawings, manuals, component lists,
instructions, designs and circuit
diagrams;
LOAN NOTES the 6% subordinated Loan Stock 2000
of the Purchaser to be constituted
by the loan note instrument in the
agreed terms and which shall
incorporate, without limitation, the
provisions set out in Part 5 of
Schedule 1;
NASDAQ NATIONAL MARKET National Association of Securities
Dealers Automated Quotations System;
PROPERTIES the properties referred to in
Schedule 2;
PROPERTY any one of the Properties;
PURCHASER'S GROUP any of:
(i) the Purchaser;
(ii) any holding company of the
Purchaser;
(iii) any subsidiary of the
Purchaser or of any such
holding company;
6
and "holding company" and
"subsidiary" shall have the
meanings respectively given by
Section 736 of the Act;
PURCHASER'S SOLICITORS Xxxxxxx & Co of 000 Xxxxxx, Xxxxxx
XX0X 0XX;
SHARES the 10,000 issued ordinary shares
of(pound)1 each in the Company;
TAX has the meaning given to it in the
Deed of Indemnity;
TAXATION AUTHORITY has the meaning given to it in the
Deed of Indemnity;
1988 TAXES ACT the Income and Corporation Taxes Xxx
0000;
1970 TAXES ACT the Income and Corporation Taxes Xxx
0000;
TCGA the Taxation of Chargeable Gains Xxx
0000;
VAT United Kingdom Value Added Tax;
VATA Value Added Tax Xxx 0000;
VENDORS' SOLICITORS Xxxxxx Xxxxxxxx & Co, Market
Xxxxxxxx, 00X Xxxxxx Xxxxx, Xxxxxx,
Xxxxxxxxx;
WARRANTIES the representations, warranties and
undertakings on the part of the
Vendors which are set out in Clause
7 and Schedule 3 and all
representations, covenants and
acknowledgements on the part of the
Vendors which are set out in Clause
4.5 and Part 4 of Schedule 1.
2. INTERPRETATION
--------------
2.1 MODIFICATION OF ENACTMENTS
--------------------------
Any reference to an enactment (or subordinate legislation or
any rule made by any authority and having the effect of law)
is a reference to it as amended or re-enacted from time to
time and includes a reference to any repealed statutory
provision which it may re-enact with or without amendment.
2.2 SUBORDINATE LEGISLATION
-----------------------
Any reference to a statutory provision shall include any
subordinate legislation made from time to time under that
provision.
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2.3 INTERPRETATION AND REFERENCES
-----------------------------
2.3.1 Xxx Xxxxxxxxxxxxxx Xxx 0000 shall apply to this
Agreement in the same way that it applies to an
enactment.
2.3.2 References to this Agreement shall include any
Schedules to it and references to Recitals, Clauses,
sub-clauses and Schedules are to Recitals, Clauses and
sub-clauses of, and Schedules to, this Agreement.
2.3.3 A reference to a English legal term for a legal
concept or thing (including, without limitation, any
action, remedy, method of judicial proceeding or legal
document) shall, in respect of a jurisdiction other
than England, be deemed to include the concept or
thing in that jurisdiction which most closely
resembles the relevant English legal term.
2.3.4 All obligations given or undertaken by more than one
person are given or undertaken by them jointly and
severally.
2.4 HEADINGS
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The headings in this Agreement shall not affect its
interpretation.
2.5 COMPANIES XXX 0000
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The words "company", "subsidiary", "holding company" and
"subsidiary undertaking" shall have the same meanings in this
Agreement as in the Act.
2.6 SSAP AND FRS
------------
A reference to a "SSAP" means a statement of standard
accounting practice as published by The Institute of Chartered
Accountants of England and Wales and a reference to a "FRS"
means a financial reporting standard issued by the Accounting
Standards Board.
2.7 INFORMATION
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A reference to any information or to any books, ledgers,
accounts, records, documents or other material or materials
shall include that information or those books/ledgers,
accounts, records, documents and material(s) in whatever form
or media held.
3. SALE OF SHARES
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3.1 SALE AND PURCHASE
-----------------
Each of the Vendors with full title guarantee, shall sell, or
procure the sale of, and the Purchaser shall purchase, the
full legal and beneficial interest in the number of Shares
shown opposite that Vendor's name in column (3) of Part 3 of
Schedule 1.
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3.2 NO LIENS ETC.
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The Purchaser shall acquire good title to the Shares free from
all charges, liens, encumbrances, equities and claims of any
kind and together with all rights which now are or at any time
after the date of this Agreement may become attached to them
including any dividend or other distribution declared, paid,
made or created after 1st September 1996 save for the
dividends declared on 31 August 1995 of (pound)80,000 (net) in
total and 31 August 1996 of (pound)50,000 (net) in total.
3.3 PRE-EMPTION RIGHTS
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Each of the Vendors hereby waives all rights of pre-emption
under the Articles of Association of the Company or otherwise
in respect of the transfer of the Shares to the Purchaser or
its nominees under this Agreement (or shall procure that all
such rights are waived).
4. CONSIDERATION
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4.1 AMOUNT OF CONSIDERATION
-----------------------
The total consideration for the purchase of the Shares shall
be US$3,500,000 which shall be satisfied in accordance with
the following provisions of this Clause.
4.2 DIVISION OF CONSIDERATION
-------------------------
4.2.1 US$1,750,000 of the Consideration shall be satisfied
by the allotment and issue to each Vendor of that
number of Consideration Shares (excluding fractions)
whose value, ascertained as set out in clause 4.3,
shall be nearest to the amount set out opposite such
Vendor's name in column (4) of Part 3 of Schedule 1.
The Consideration Shares shall be subject to the
provisions set out in Part 4 of Schedule 1.
4.2.2 The balance of the consideration (being the sum of
US$1,750,000) shall be satisfied by the issue on
Completion to each Vendor of Loan Notes, credited as
fully paid, with nominal value as set out opposite
such Vendor's name in column (5) of Part 3 of Schedule
1 and on the terms referred to in Part 5 of Schedule
1.
4.3 VALUE OF CONSIDERATION SHARES
-----------------------------
The value attributed to each Consideration Share shall be the
sum equal to the average closing price of the shares of common
stock of 1 cent of the Purchaser on the NASDAQ National Market
as listed in the Wall Street Journal during the five Business
Days ending on the Business Day which is four Business Days
Prior to Completion.
4.4 ADJUSTMENT TO CONSIDERATION
---------------------------
The parties agree that any payment by any party pursuant to
Clause 7 shall be made by way of an adjustment to the
Consideration.
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4.5 PROVISIONS RELATING TO CONSIDERATION
------------------------------------
The parties agree that the provisions set out in Parts 4 and 5
of Schedule 1, including all acknowledgements, representations
and covenants set out therein, shall apply as if set out in
the main body of this Agreement.
5. COMPLETION
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5.1 DATE AND PLACE
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The sale and purchase of the Shares shall be completed at the
offices of the Purchaser's Solicitors or at such other place
and/or on such other date as may be agreed prior to such date
between the Vendors and the Purchaser.
5.2 VENDORS' OBLIGATIONS
--------------------
At Completion each of the Vendors will deliver (or procure the
delivery of) or make available to the Purchaser or the
Purchaser's Solicitors:-
5.2.1 duly executed transfers into the name of the Purchaser
(or its nominee or as the Purchaser may direct) in
respect of such of the Shares as are shown opposite
such Vendor's name in column (3) of Part 3 of Schedule
1 together with definitive certificates for them (or
an express indemnity in a form satisfactory to the
Purchaser in the case of any certificate found to be
missing);
5.2.2 an engrossment of the Deed of Indemnity executed by
such Vendor or on such Vendor's behalf;
5.2.3 any other documents which may be required to give good
title to the Shares or otherwise to give effect to the
terms of this Agreement (including all waivers or
consents and all irrevocable powers of attorney which
may be reasonably necessary to enable the Purchaser to
exercise all rights incidental to ownership of the
Shares or under which any document required to be
delivered under this Clause has been executed or
signed, in each case in such form as the Purchaser may
reasonably require);
5.2.4 the certificate of incorporation, the certificate of
incorporation on change of name, the common seal (if
any), all minute books, share registers, share
certificate books (with any unissued share
certificates) and other statutory books (duly written
up to date) and cheque books and other books and
records of the Company;
5.2.5 all deeds and documents (including plans and consents
and certificates of title acceptable to the Purchaser)
relating to the Properties and up to date rent and
service charge receipts in respect of any leasehold
Property and all other documents of title relating to
all investments of the Company;
5.2.6 all the financial and accounting books and records of
the Company;
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5.2.7 letters signed on behalf of the Company to its bankers
varying in such manner as the Purchaser may specify
all existing bank mandates and authorities;
[5.2.8 Deleted]
5.2.9 written confirmation in the agreed terms to the
Purchaser that the agreements between (i) the Company
and Euro Marine Group Limited relating to the
provision of the consultancy services of Xxxx Xxxxx
and Xxxxxxxxx Xxxxx; (ii) the Company and Vision
Navigation Systems Limited; (iii) the Company and
Intersat France S.a.r.l. have all been terminated;
5.2.10 written letters of resignation in the agreed terms
from each of X. Xxxxx and X. Xxxxx resigning from
their directorships in and all other offices and
positions with the Company (save for X. Xxxxx who
shall remain employed as sales manager following
Completion), with effect from Completion and
confirming that they have no claim against the
Company;
5.2.11 a written letter of resignation from the auditors of
the Company resigning from their position with effect
from Completion, confirming that they have no claim
against the Company and containing the statement
referred to in section 394 of the Act to the effect
that there are no circumstances connected with their
resignation which they consider should be brought to
the notice of the members or creditors of the Company;
5.2.12 a service agreement in agreed terms duly executed by
X. Xxxxx;
5.2.13 an agreement with Vision Navigation Systems Limited
upon agreed terms and conditions satisfactory to the
Purchaser pursuant to which the Company will with
effect from Completion become the exclusive
distributor of all products manufactured or sold by
Vision Navigation Systems Limited during the term of
such agreement;
5.2.14 an agreement with Intersat France S.a.r.l. upon agreed
terms and conditions satisfactory to the Purchaser
pursuant to which Intersat France S.a.r.l. will with
effect from Completion become the exclusive agent of
the Company's products in France and other French
speaking territories.
5.2.15 three Standby and Subordination Agreements in the
agreed terms between The Fifth Third Bank, the
Purchaser, X'Xxxx-Xxxx Xxxxxxxxxx Armoring Company,
O'Gara Satellite Networks, Inc, O'Gara Satellite
Networks, Ltd and each of the Vendors;
5.2.16 three Subordinated Stock Pledge Agreements on the
agreed terms between the Purchaser and each of the
Vendors.
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5.3 DIRECTORS' RESOLUTIONS
----------------------
On Completion, the Vendors shall procure that resolutions are
passed by the Directors of the Company:-
5.3.1 approving for registration the transfers mentioned in
Clause 5.2.1 (subject only to their being duly
stamped);
5.3.2 approving and authorising the signing of the letters
to the bankers referred to in Clause 5.2.7;
5.3.3 approving the Deed of Indemnity and authorising the
execution of the same;
5.3.4 accepting the resignations of the directors X. Xxxxx
and X. Xxxxx referred to in Clause 5.2.10 and
appointing Xx Xxxxxxx X'Xxxx and Xx Xxxx Xxxxxx
instead;
5.3.5 accepting the resignation referred to in Clause 5.2.11
and appointing Xxxxxx Xxxxxxxx instead;
5.3.6 approving the agreements referred to in Clause 5.2.12,
5.2.13 and 5.2.14 above; and
5.3.7 changing the accounting reference date of the Company
to 31st December;
and the Vendors shall deliver to the Purchaser certified
copies of all such resolutions passed in accordance with the
preceding provisions of this Clause 5.3.
5.4 PURCHASER'S OBLIGATIONS
-----------------------
5.4.1 At Completion the Purchaser will deliver (or procure
the delivery of) to the Vendors or the Vendors'
Solicitors a copy of the Purchaser's resolutions
authorising the allotment and issue of the
Consideration Shares.
5.4.2 Within 10 Business Days of Completion the Purchaser
will deliver (or procure the delivery of) to the
Vendors the Share Certificates in respect of the
Consideration Shares.
5.4.3 At Completion the Purchaser will procure that O'Gara
Satellite Networks, Inc. enters into the EMG
Agreement.
5.5 SATISFACTION OF CONSIDERATION
-----------------------------
The Purchaser shall, against compliance with the preceding
provisions, on Completion satisfy the Consideration in the
manner specified in Clause 4.
6. INDEMNITIES
-----------
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6.1 The Vendors jointly and severally covenant to hold the
Purchaser indemnified against any liability, claim, or for any
costs or expenses incurred or that become payable by the
Company or the Purchaser in connection with any failure by the
Company to comply with the provisions of the Data Protection
Xxx 0000 and all regulations made under it in respect of any
matter or act done or omitted to be done prior to Completion.
6.2 The Vendors agree to jointly and severally indemnify and keep
indemnified the Purchaser in respect of all liabilities, costs
and expenses arising out of any claim made by any of the
employees of the Company:
(a) where such claim relates to a term of any of the
Company's employees' contracts of employment, whether
express or implied, which term had not been notified
to the Purchaser by the Vendors in the Disclosure
Letter at Completion; or
(b) where such claim relates to a failure by the Vendors
to supply full and proper written particulars of
employment to such employees.
6.3 The Vendors jointly and severally covenant to hold the
Purchaser indemnified against any loss, liability or claim and
any costs or expenses that may be incurred or become payable
by the Company or the Purchaser in relation to:-
(i) any inaccuracies or discrepancies or errors in any of
the Company's accounts, books, ledgers, financial and
other records including the Company's statutory books
or in respect of the stamping or failure or delay in
stamping any documents relating to the transfer of
any shares in the Company or any other documents
relating to the business or assets of the Company;
(ii) any claim made by or in relation to any employees of
or persons engaged in the business of Intersat
S.a.r.l. and, in particular but without limitation,
any claim that may arise in relation to national
insurance and/or social security costs that are or
become payable in relation to those employees or
persons in any country;
(iii) any information relating to the Company which has
been supplied to the Commissioners of Inland Revenue
by or on behalf of the Vendors or the Company in
their applications made for the purposes of section
703 of the 1988 Taxes Act and section 137 (1) of the
TCGA being inaccurate, untrue, incomplete or
misleading in any respect;
(iv) any claim made by any taxation authority in France or
in any French speaking territory against Intersat
France S.a.r.l. or the Company;
(v) any omission by the Company or Intersat France
S.a.r.l. or any of their respective agents,
consultants or employees, in the course of the
business of the Company or Intersat France S.a.r.l.
to comply with all legal and regulatory requirements
in any country.
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6.4 For the purposes of Clauses 6.1, 6.2 and 6.3 the maximul
liability of the vendors shall not exceed in aggregate the
value of the consideration.
7. WARRANTIES
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7.1 WARRANTIES
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The Vendors jointly and severally warrant and represent to and
undertake with the Purchaser (which is for this purpose
contracting for itself and as a trustee for the Company and
any successors in title or assignees of the Purchaser or of
the Company) on the terms of this Agreement and acknowledge
that they have done so with the intention of inducing the
Purchaser to enter into this Agreement. The Vendors further
acknowledge that the Purchaser has entered into this Agreement
in full reliance upon, (amongst other things) the Warranties.
7.2 UPDATING TO COMPLETION
----------------------
The Warranties shall be deemed made at Completion with
reference to the facts then existing.
7.3 QUALIFICATIONS
--------------
The Warranties are given subject to:-
7.3.1 the information expressly disclosed in the Disclosure
Letter; and
7.3.2 any matter expressly referred to in the Audited
Accounts or expressly provided for under the terms of
this Agreement.
7.4 WARRANTIES TO BE SEPARATE
-------------------------
Each of the Warranties shall be separate and independent and
(save where expressly provided otherwise) shall not be limited
or restricted by reference to or inference from any other
Warranty or any other provision of this Agreement or the Deed
of Indemnity. Subject to the preceding provisions of this
Clause, claims may be made whether or not the Purchaser, prior
to signing this Agreement, could have discovered (whether by
any investigation made by it or on its behalf or otherwise)
that any Warranty had not been complied with or carried out or
was otherwise untrue or misleading.
7.5 KNOWLEDGE, INFORMATION AND BELIEF
---------------------------------
Where any of the Warranties is qualified by the expression "to
the best of the knowledge, information and belief of the
Vendors" or "so far as the Vendors are aware" or any similar
expression, that Warranty is deemed to include an additional
statement that it has been made after due, diligent and
careful enquiry.
14
7.6 CLAIMS AGAINST OFFICERS
-----------------------
7.6.1 Any information supplied at any time before Completion
by or on behalf of the Company to the Vendors or their
agents or accountants, solicitors or other advisers in
connection with the Warranties and the Deed of
Indemnity or the exceptions and information disclosed
in the Disclosure Letter or otherwise in relation to
the business and affairs of the Company shall not
constitute a representation, warranty or guarantee by
the Company or any of its officers or employees, other
than any of the Vendors, of its accuracy.
7.6.2 Each of the Vendors hereby waives and releases any
claims which such Vendor might have against the
Company or any of its officers or employees, other
than the other Vendors, in respect of any information
supplied at any time before Completion to the
Purchaser and or its agents, accounts, solicitors or
other advisers in connection with this Agreement, the
Deed of Indemnity or the Disclosure Letter and the
Purchaser hereby accepts such release for itself and
as trustee for the Company and its officers and
employees but so that such release shall not apply in
any case of fraud or deliberate deception. Each of the
Vendors agrees with the Purchaser for itself and as
trustee for the Company and its respective officers,
employees and agents to assign to the Purchaser any
rights or claims which such Vendor may have in respect
of any misrepresentation in or omission from any
information or advice supplied or given by the Company
or its officers, employees or agents, other than the
other Vendors, and on which the Vendors, or any of
them, have relied in giving the Warranties, preparing
the Disclosure Letter and entering into the Deed of
Indemnity.
7.6.3 This Clause 7.6 shall not restrict or limit in any way
Clause 7.5.
7.7 POTENTIAL BREACH
----------------
If any of the Vendors acquires any knowledge of any event or
matter (whether or not occurring or existing before the
signing of this Agreement) which is or might be or might
reasonably be expected to lead to a breach of, or be
inconsistent with, any of the Warranties or might give rise to
a claim under the Deed of Indemnity or which results or might
result in any of the Warranties being unfulfilled, incorrect,
untrue or misleading or which would or might entitle the
Purchaser to rescind this Agreement or claim damages under it,
such Vendor shall at once disclose in writing to the Purchaser
all that such Vendor knows about the event or matter in
question. The Vendors shall make any investigations concerning
the event or matter which the Purchaser may require.
7.8 LIMITATION OF LIABILITY
-----------------------
The Vendors shall not be liable in respect of any breach of
the Warranties if and to the extent that the loss caused by or
arising from such breach has been recovered under any other
provision of this Agreement or the Deed of Indemnity.
15
7.9 In the event that any Vendor is liable to the Purchaser (or
any person to whom the Purchaser has assigned the benefit of
this Agreement, including the Warranties given to it, pursuant
to the terms of Clause 13, and/or the Deed of Indemnity (an
"Assignee")) in respect of a claim under the Warranties or any
other provision of this Agreement or the Deed of Indemnity
then:
7.9.1 at the option of the Purchaser, a sum equal to the
amount payable by such Vendor in respect of such
claim, or any part of such amount, shall be offset by
the Purchaser against the Loan Notes then in issue
(as extinguished or reduced pursuant to their terms)
and held by the relevant Vendor; or
7.9.2 to the extent, if any, that such sum has not been off
set against the Loan Notes pursuant to sub-clause
7.9.1 above, such Vendor shall pay to the Purchaser
or such Assignee a sum in cash equal to the
outstanding amount payable by such Vendor in respect
of such claim; and
7.9.3 to the extent that a Vendor does not satisfy (whether
by payment in cash or by way of set-off under the
Loan Stock pursuant to sub-clauses 7.9.1 and 7.9.2
above) any liability to the Purchaser under this
Agreement and the Deed of Indemnity, such sum or any
part of such sum, may be satisfied, at the option of
the Purchaser, pursuant to the following provisions,
provided that the Purchaser shall not be under an
obligation to elect that such sum shall be so
satisfied:-
(a) if the Purchaser so elects, the Purchaser
shall calculate the number of Consideration
Shares which would be required to be
transferred to the Purchaser to satisfy the
amount, or any part of such amount, payable
to the Purchaser by such Vendor in respect
of such claim and shall notify the Vendor
that it requires the sum, or part of such
sum, to be satisfied by the repurchase or
cancellation by the Purchaser of the
relevant number of Consideration Shares held
by such Vendor to satisfy such claim, in
whole or in part; provided that the
Purchaser may only repurchase or cancel
Consideration Shares that have not be
registered under the United States
Securities Act of 1933, as amended with the
US Securities and Exchange Commission. For
the purpose of this sub-clause 7.9.3(a) the
transfer value of a Consideration Share
shall be deemed to be US$10.28 per
Consideration Share (the "Consideration
Share Price"); and
(b) if and to the extent that any payment is to
be offset against the Loan Notes pursuant to
the provisions of this Clause, the Vendors
and the Purchaser shall take such action as
may be required pursuant to the terms of the
Loan Notes to record the extent to which
such sum is offset against the Loan Notes;
and
(c) to the extent that the Purchaser elects for
the whole or any part of any sums payable
under this Agreement or the Deed of
16
Indemnity by a Vendor to be satisfied
pursuant to sub-clause 7.9.3 above, such
Vendor shall deliver (or procure the
delivery of) such documentation to the
Purchaser as may be required for the
Purchaser to repurchase or cancel the
required number of Consideration Shares.
Provided that no provision of this Agreement
shall require the Purchaser to repurchase or
cancel the Consideration Shares in breach of
any laws or regulations (including
compliance with the rules or codes of
practice of any securities exchange).
7.10 The Purchaser shall not have any claim insofar as it relates
to the Warranties if, and to the extent that, the subject
matter of the claim is fairly disclosed in the Disclosure
Letter.
7.11 The Vendors shall not be liable for any claim:
7.11.1 unless they have received written notice from the
Purchaser giving reasonable details of the claim and,
if practicable, the Purchaser's estimate of the
amount involved on or before 30 June 2000 or, in the
case of any claim relating to Tax, not later than 6
years from the end of the Company's current
accounting period and proceedings in respect of such
claim are issued and served on the Vendors no later
than 9 months after the date of such notice;
7.11.2 unless the amount of the claim, when aggregated with
all other claims made on the same occasion or
previously, is equal to or exceeds (pound)35,000 (in
which case the Vendors shall be liable for the whole
amount and not simply the excess);
7.11.3 unless the amount of any individual claim is equal to
or exceeds (pound)7,500 (in which case the Vendors
shall be liable for the whole amount and not simply
the excess);
7.11.4 to the extent that:
(i) it exceeds the Consideration;
(ii) the Purchaser has actual knowledge of any
matter which could give rise to a claim on
or before Completion;
(iii) an allowance, provision or reserve in
respect of any liability the subject of such
claim was made or taken into account, or
payment or discharge of which was taken into
account, in or in preparing the Audited
Accounts;
(iv) it is attributable to or arises as a result
of:
(a) any voluntary act or omission of
the Purchaser (or any person
deriving title from it) after
Completion outside the ordinary
course of business and other than
pursuant to a legally binding
obligation entered into by the
Company before Completion;
17
(b) the retrospective imposition of Tax
or any increase in rates of
Taxation or by a change in the law
(whether retrospectively or not)
occurring after Completion or the
withdrawal after Completion of any
published concession or general
practice previously made by a
Taxation Authority;
(c) any change after Completion in the
bases upon which the audited
accounts of the Company are
prepared or any change in
accounting practice or principles
unless such change is made to
rectify a breach of the Warranty
contained in paragraph 2 (Accounts)
of Schedule 3; or
(d) any change after Completion in the
date to which the Company makes up
its audited accounts;
(v) the Purchaser is indemnified against any
loss or damage suffered by it under the
terms of any insurance policy for the time
being in force.
7.12 The Purchaser shall not be entitled to reimbursement or
restitution more than once in respect of any one claim.
8. PURCHASER'S OBLIGATIONS
-----------------------
8.1 PURCHASER'S WARRANTIES
----------------------
The Purchaser warrants to the Vendors that:-
8.1.1 it has full power and authority to enter into and
perform this Agreement and the Deed of Indemnity and
the provisions of this Agreement and the Deed of
Indemnity;
8.1.2 the execution and delivery of, and the performance by
the Purchaser of its obligations under, this
Agreement and the Deed of Indemnity will neither:-
(a) result in a breach of any provision of its
Articles of Incorporation or Code of
Regulation; nor
(b) result in a breach of any order, judgement
or decree of any court or of any
governmental agency to which the Purchaser
is a party or by which the Purchaser is
bound;
8.1.3 the information contained in the Prospectus issued by
the Purchaser dated 12 November 1996, a copy of which
is annexed to this Agreement as Schedule 5, was
accurate as at 12 November 1996.
8.2 The Purchaser acknowledges that it has entered into this
Agreement in reliance only upon the representations,
warranties or promises incorporated in this Agreement the
Disclosure Letter and the Deed of Indemnity and that it
18
is not aware of any matter which may give rise to a claim,
and, save as expressly set out in this Agreement and the Deed
of Indemnity the Vendors shall have no liability in respect of
any other representation, warranty or promise made prior to
the date of this Agreement unless it was made fraudulently or
with intent to wilfully deceive.
8.3 NO RELIANCE ON REPRESENTATIONS OF PURCHASER ETC.
------------------------------------------------
Each of the Vendors confirms that it has not relied on any
warranty, representation, covenant or undertaking or
inducement of any kind of the Purchaser or its directors,
officers or employees other than the warranties given by the
Purchaser to the Vendors in this Clause.
9. RESTRICTIONS ON VENDORS
-----------------------
9.1 RESTRICTIONS
------------
X. Xxxxx undertakes with the Purchaser as trustee for itself
and the Company that he will not, during the period from the
date of this Agreement to the third anniversary of Completion
(the "Restraint Period"), whether alone or jointly with
another and whether directly or indirectly, carry on, be
engaged or concerned in, or (except as the owner for
investment of securities dealt in on a recognised stock
exchange which do not exceed three per cent. in nominal value
of the securities of that class) be interested in, any
business which competes with any business now carried on by
the Company.
9.2 NO SOLICITATION OF CUSTOMERS
----------------------------
X. Xxxxx shall not before the expiry of the Restraint Period,
whether on his own account or otherwise and whether directly
or indirectly, solicit or entice the custom (in relation to
any goods or services supplied by the Company) of any person
with whom he had dealings or who was a customer of or in the
habit of dealing with the Company at any time during the
period ending on the third anniversary of Completion.
9.3 NO SOLICITATION OF EMPLOYEES
----------------------------
X. Xxxxx shall before the expiry of the Restraint Period
directly or indirectly solicit or endeavour to entice away,
offer employment to or employ, or offer or conclude any
contract for services with, any person who was employed by the
Company at the date of this Agreement.
9.4 NO DISCLOSURE OF CONFIDENTIAL INFORMATION
-----------------------------------------
Except so far as may be required by law, none of the Vendors
shall at any time disclose to any person any confidential
information of a technical, trade or any other character which
he has acquired in the course of or as a result of his
employment by, or directorship of, the Company or his
ownership of the Shares.
9.5 NO USE OF CONFIDENTIAL INFORMATION
----------------------------------
19
None of the Vendors shall at any time use to the detriment of
the Company any confidential information of a technical, trade
or other character which he has acquired in the course of or
as a result of his employment by or directorship of the
Company or his ownership of the Shares.
9.6 NO HOLDING OUT
--------------
After Completion, none of the Vendors shall in any way hold
himself out or permit himself to be held out as being
interested in or in any way connected with the Company save
pursuant to their contracts of employment or Service
Agreements with the Company.
9.7 REASONABLENESS OF RESTRICTIONS
------------------------------
Each of the Vendors acknowledges that:-
9.7.1 each of the preceding sub-clauses of this Clause
constitutes an entirely separate and independent
restriction on him; and
9.7.2 the duration, extent and application of each of the
restrictions are no greater than is necessary for the
protection of the goodwill of the businesses of the
Company and the value of the Shares.
9.8 MODIFICATIONS
-------------
If any of the restrictions contained in this Clause are found
to be void but would be valid if some part were deleted or the
period or area of application reduced, that restriction shall
apply with any modification necessary to make it valid and
effective.
9.9 RESTRICTIVE TRADE PRACTICES ACT
-------------------------------
Notwithstanding any other provision of this Agreement, no
provision of this Agreement which might make this Agreement
liable to registration under the Restrictive Trade Practices
Act 1976 shall take effect until the day after that on which
particulars of it have been furnished to the Director General
of Fair Trading pursuant to that Act. For the purposes of this
Clause 9.9, the term "Agreement" shall include every other
agreement which forms part of the same arrangement.
10. SURVIVAL OF PROVISIONS
----------------------
Notwithstanding Completion, the provisions of this Agreement and the
Deed of Indemnity shall, except insofar as then implemented or
performed, remain in full force and effect and shall continue to bind,
and to be enforceable by, the Purchaser or its successors or assigns
or, as the case may be, the Vendors and shall not be extinguished or
affected by any other event or matter except a specific and duly
authorised written waiver or release from the Purchaser or, as the case
may be, the Vendors.
20
11. COSTS
-----
EACH PARTY TO BEAR OWN COSTS
----------------------------
Each of the parties shall pay its own legal and accountancy and other
costs, charges and expenses connected with the negotiation, preparation
and implementation of this Agreement and the Deed of Indemnity. The
Purchaser shall pay all stamp duty on the transfer of the Shares and
the agreed fees of J. Xxxxxxx Xxxxxxx & Company..
12. ENTIRE AGREEMENT
----------------
12.1 WHOLE AGREEMENT
---------------
This Agreement, when taken together with any document in the
agreed terms (or the executed engrossments of them) and any
other documents to be entered into pursuant to this Agreement,
constitutes the entire agreement and understanding between the
parties with respect to all matters referred to in this
Agreement, to the exclusion of any terms implied by law which
may be excluded by contract.
12.2 VARIATION
---------
No variation of this Agreement or of any document in the
agreed terms or any other documents to be entered into
pursuant to this Agreement shall be effective unless it is in
writing and signed by or on behalf of each of the parties.
13. WAIVERS
-------
13.1 RELEASE AND INDULGENCE BY PURCHASER
-----------------------------------
Notwithstanding any rule of law or equity to the contrary, the
Purchaser may at its absolute discretion waive, release,
compromise or allow any time or other indulgence in respect of
any liability or obligation of any Vendor without thereby
prejudicing or in any way affecting its rights in respect of
either any other liability or obligation of that Vendor or any
liability or obligation, whether of a similar or a different
kind, of any other of the Vendors and whether or not such
liabilities or obligations are joint and several. Any act or
omission of the Purchaser pursuant to this Clause shall in no
way prejudice any rights which one of the Vendors may have
against any other of the Vendors, whether in relation to joint
and several liability or otherwise.
13.2 NO WAIVER
---------
No failure of the Purchaser to exercise, and no delay by it in
exercising, any right, power or remedy in connection with this
Agreement will operate as a waiver of the same, nor will any
single or partial exercise of any such right, power or remedy
preclude any other or further exercise of the same or of any
other such right, power or remedy. Any express waiver of any
breach of this Agreement shall not be deemed to be a waiver of
any subsequent breach.
21
14. ASSIGNMENT
----------
The Purchaser may assign all its rights, and causes of action arising,
under or pursuant to this Agreement to any other company within the
Purchaser's Group and, after any such assignment, this Agreement will
be binding on and will continue for the benefit of such Company within
the Purchaser's Group. Accordingly references in this Agreement (or in
any document entered into pursuant to this Agreement) to the Purchaser
shall, following any such assignment and unless the context otherwise
requires, mean the assignee or assignees for the time being. If the
Purchaser wishes to assign such rights, the other parties shall, on
request, execute a deed in favour of the assignee substantially in the
terms of the draft deed in the agreed terms.
15. FURTHER ASSURANCE
-----------------
At any time (whether before or after Completion) the Vendors shall (at
their cost and expense) do and execute or procure to be done and
executed all necessary acts, documents and things reasonably requested
of all or any of them by the Purchaser to give effect to this Agreement
and the transactions contemplated in or by it and to take any action
(if requested to do so by the Purchaser) which may be reasonably
considered necessary by the Purchaser to rectify any acts or omissions
of the Company, its officers, directors or shareholders prior to
Completion.
16. INVALIDITY
----------
If any provision in this Agreement is held to be illegal, invalid or
unenforceable, in whole or in part, under any enactment or rule of law,
such provision or part shall, to that extent, be deemed not to form
part of this Agreement but the legality and enforceability of the
remainder of this Agreement shall not be affected.
17. COUNTERPARTS
------------
This Agreement may be entered into in any number of counterparts, all
of which taken together shall constitute one and the same instrument.
Any party may enter into this Agreement by signing any such
counterpart.
18. NOTICES
-------
18.1 NOTICE IN WRITING
-----------------
Any notice, claim or demand to be given in connection with or
under this Agreement shall be in writing and signed by or on
behalf of the party giving it (a "Notice").
18.2 SERVICE OF NOTICE
-----------------
A Notice may be served by letter or fax; each letter
containing such Notice shall be left or sent by pre-paid
recorded delivery or registered post or by courier:-
18.2.1 in the case a notice to all of the Vendors, at or to
the Vendor's Solicitors on behalf of all the Vendors;
and
22
18.2.2 in the case of a notice to an individual Vendor at or
to such Vendor at his or her address shown in
Schedule 1 or any other address in England which he
or she shall have notified in writing to the
Purchaser; and
18.2.3 in the case of the Purchaser, at or to its registered
office for the time being.
18.3 TIME OF SERVICE
---------------
A Notice sent by personal delivery, by post or by courier
shall be deemed to have been duly served upon delivery at the
address of the relevant party, and in proving such service, it
shall be sufficient to prove that the notice was properly
addressed and a Notice sent by fax shall be deemed served when
despatched.
18.4 DEATH OF INDIVIDUAL
-------------------
If any individual Vendor dies, until the party giving a Notice
has received notice in writing of the grant of probate of his
will or letters of administration of his estate (or
equivalent) any Notice given to such individual Vendor in
accordance with the provisions of this Clause shall be as
effective as if he were still living.
19. GOVERNING LAW AND PROCESS AGENT
-------------------------------
19.1 This Agreement and (save as expressly stated in) any document
to be entered into pursuant to this Agreement shall be
governed by and construed in accordance with English law and
the parties irrevocably submit to the non-exclusive
jurisdiction of the English courts to settle any disputes
which may arise out of or in connection with this Agreement or
any such document.
19.2 PROCESS AGENT
-------------
The Vendors irrevocably appoint the Vendors' Solicitors of
Market Xxxxxxxx, 00X Xxxxxx Xxxxx, Xxxxxx, Xxxxxxxxx as the
agent for each Vendor to accept service of process in England
in any legal action or proceedings arising out of or in
connection with this Agreement or any document to be entered
into pursuant to this Agreement, service upon whom shall be
deemed completed whether or not forwarded to or received by
each of the Vendors. If such process agent ceases to be able
to act as such or to have an address in England, the Vendors
irrevocably agree to appoint a new process agent in England
acceptable to the Purchaser and to deliver to the Purchaser
within fourteen days a copy of a written acceptance of
appointment by the process agent.
The Purchaser irrevocably appoints the Purchaser's Solicitors
of 000 Xxxxxx, Xxxxxx, XX0X 0XX as the agent for the Purchaser
to accept service of process in England in any legal action or
proceedings arising out of or in connection with this
Agreement or any document to be entered into pursuant to this
Agreement, service upon whom shall be deemed completed whether
23
or not forwarded to or received by such party. If such process
agent ceases to be able to act as such or to have an address
in England, the Purchaser irrevocably agrees to appoint a new
process agent in England acceptable to the Vendors and to
deliver to the Vendors within fourteen days a copy of a
written acceptance of appointment by the process agent.
Nothing in this Agreement shall affect the right to serve
process in any manner permitted by law.
20 RIGHTS OF ACCESS
----------------
20.1 PURCHASER'S ACCESS
------------------
Until the sixth anniversary of Completion, each of the Vendors
shall permit and allow, upon reasonable notice and during
business hours, the Purchaser and/or its agents, accountants
and other professional advisers access to all books, records
and documents in the possession or under the control of such
Vendor insofar as they concern or deal with the Company in
respect of the period prior to Completion and the right to
inspect and make copies of the same (at the Purchaser's
expense). Each of the Vendors shall procure that all such
books, records and documents are preserved until the sixth
anniversary of Completion.
20.2 ACCESS TO INFORMATION
---------------------
If any information or book, ledger account, record, document
or other material or materials is or are not held, kept or
stored in printed form, the party required or requested to
produce or allow access to or copies of the same must do so in
a form or media which:-
20.2.1 is reasonably convenient to the party requiring or
requesting the same;
20.2.2 does not require that party to incur unreasonable
expense; and
20.2.3 will permit that party to see, have access to, read
and, where appropriate, to make copies of the same.
This Agreement was signed by the parties or their duly authorised
representatives on the date set out at the beginning of this Agreement.
24
SCHEDULE 1
----------
PART 1
------
(THE COMPANY)
THE COMPANY
-----------
Name of Company: Next Destination Limited
Registered Number: 2856264
Authorised Share Capital: (pound)10,000 divided into 10,000 ordinary shares of (pound)1 each
Issued Share Capital: 10,000 ordinary shares of (pound)1 each, fully paid or credited
as fully paid
Date and Place of Incorporation: 00xx Xxxxxxxxx 0000, Xxxxxxx
Registered Office: 0 Xxxxx Xxxx, Xxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxx XX00 0XX
Directors: Xxxxxx Xxxxx Xxxxxxx Xxxxx
Xxxxxxxxx Xxxxx Xxxxxxx Xxxxx
Xxxx Xxxxx Xxxxx
Secretary: Xxxxxxxxx Xxxxxxxxx Xxxxx
Members: Xxxxxx Xxxxx Xxxxxxx Xxxxx, Xxxxxxxxx Xxxxx Xxxxxxx
Xxxxx, Xxxx Xxxxx Xxxxx
Accounting Reference Date: 31 August
VAT Number: 631688817
Tax District and Reference No: Southampton 5 Ref No. 6741251324447
Auditors: Langdowns Chartered Accountants, 0 Xxxxx Xxxx, Xxxxxx
Xxxxxx, Xxxxxx, Xxxxxxxxx
25
SCHEDULE 1
----------
PART 2
------
(DIRECTORS)
Full name Usual address
--------- -------------
Xxxxxx Xxxxx Xxxxxxx Xxxxx 00 Xxxxx Xx Xxxx
00000 Xx Xxxxxxx
Xxxxxxxx
Xxxxxx
Xxxxxxxxx Xxxxx Xxxxxxx Xxxxx The Old Chapel
Xxxxxxx Xxxx
Zeals
Xxxxxxxxxx
Xxxxxxxxx
XX00 0XX
Xxxx Xxxxx Xxxxx Xxxxxxxxx Xxxxxxx
Xxxxxxxxxxx Xxxxx
Xxxxxxxxx
Xxxxxxxxx
XX00 0XX
26
SCHEDULE 1
----------
PART 3
------
(PARTICULARS OF SHARES ETC.)
(1) (2) (3) (4) [(5)]
Names and No. of No. of Value in US$ and Value in US$
addresses of Ordinary Shares held Ordinary Shares to number of of Loan Notes
Vendors in the Company be sold Consideration to be received
Shares to be
received
-----------------------------------------------------------------------------------------------------------------
Xxxxxx Xxxxx Xxxxxxx Xxxxx, 714 714 Value: US$125,000 124,995.20
00 Xxxxx Xx Xxxx, No of Shares:
49260 Le Coudray, 12,160
Macouard,
France
Xxxxxxxxx Xxxxx 714 714 Value: US$125,000 124,995.20
Xxxxxxx Xxxxx, No of Shares:
The Old Chapel, 12,160
Xxxxxxx Xxxx,
Xxxxx,
Xxxxxxxxxx,
Xxxxxxxxx XX00 0XX
Xxxx Xxxxx Xxxxx, 8,572 8,572 Value: 1,500,004.08
Xxxxxxxxx Xxxxxxx, XXx0,000,000
Wittensford Brook, No of Shares:
Lyndhurst, 145,914
Xxxxxxxxx XX00 0XX
27
SCHEDULE 1
----------
PART 4
------
(PROVISIONS APPLYING TO THE CONSIDERATION SHARES)
1.1 U.S. Securities Law Restrictions
--------------------------------
The Purchaser and each of the Vendors acknowledge and represent to each
other that the shares of stock of the Purchaser issued pursuant to
Clause 4.2.1. ("Consideration Shares") have not been registered under
the United States Securities Act of 1933, as amended (the "1933 Act"),
or under the securities law of any other jurisdiction, and that the
issue of the Consideration Shares is being made in reliance upon and in
compliance with an exemption from registration provided by the 0000
Xxx.
1.2 Vendors' Representations
------------------------
Each of the Vendors covenants and agrees with the Purchaser and
represents and warrants to the Purchaser as follows:
1.2.1 Foreign Laws
------------
The country of origin and current principal place of business
of each Vendor is either the United Kingdom or France and the
Vendors' acquisition of, and the Purchaser's issue to the
Vendors of, the Consideration Shares does not violate any laws
of the United Kingdom or France.
1.2.2 Access to Information
---------------------
Each of the Vendors acknowledge that the Vendors have been
provided with and have reviewed copies of the Prospectus dated
12 November, 1996 (annexed hereto as Schedule 5), for the
Purchaser's initial public offering and quarterly report on
Form 10-Q for the period ended 30 September, 1996; that the
Vendors have been supplied with such additional information
concerning Purchaser and the Consideration Shares as Vendors
have reasonably requested; and that, by reason of each of the
Vendor's business and financial experience, the Vendors have
the capacity to evaluate the merits and risks of an investment
in the Consideration Shares.
1.2.3 Investment Intent
-----------------
The Vendors are acquiring the Consideration Shares for their
own account as an investment and not with a view to, or for
resale in connection with, any distribution or public
offering, and the Vendors have no agreement, understanding or
arrangement to sell, assign or transfer any portion of the
Consideration Shares to any other person or entity.
28
1.2.4 Restrictions on Resale
----------------------
The Consideration Shares are "restricted securities" as
defined in Rule 144 under the 1933 Act. The Vendors will not
offer, sell, transfer, assign, exchange or otherwise dispose
of any of the Consideration Shares at any time unless the
Consideration Shares are (i) registered under the 1933 Act or
(ii) offered, sold or otherwise disposed of in compliance with
an exemption from the registration requirements of the 1933
Act (as evidenced by an opinion of counsel satisfactory to the
Purchaser that such an exemption is available to the Vendors).
1.2.5 Legended Shares
---------------
The Vendors understand and agree that the certificates for the
Consideration Shares will bear a restrictive legend stating
that the transfer of the Consideration Shares is prohibited
except in accordance with the provisions of this Agreement and
that Purchaser is entitled to refuse to register any transfer
of the Consideration Shares not made in accordance with the
provisions of this Agreement.
1.3 Piggyback Rights
----------------
If the Purchaser registers any additional shares of its common stock
for sale subsequent to Completion, pursuant to the 1933 Act, and if (i)
any shares of the current shareholders of the Company ("Current
Shareholders") which are then restricted as to holding period, or
volume of sale under the U.S. Securities and Exchange Commission Rule
144 are included in the registration, and (ii) the resale of the
Consideration Shares by any of the Vendors are then restricted as
holding period, or volume of sale under U.S. Securities and Exchange
Act Rule 144, then the Purchaser will accord to each of the Vendors the
opportunity, on a pro rata basis with the other selling shareholders,
to include in such registration statement Consideration Shares of the
Purchaser, on the same terms and conditions and subject to the same
limitations as shall apply to the selling shareholders. Notwithstanding
the foregoing, the number of shares that any of the Vendors shall be
entitled to register shall not exceed the greatest number of shares
registered by any of the selling shareholders.
29
SCHEDULE 1
----------
PART 5
------
(PROVISIONS APPLICABLE TO THE LOAN NOTES)
-----------------------------------------
1. The Loans Notes shall bear interest at the rate of 6 per cent per
annum, such interest shall be payable annually.
2. The principal amount of the Loan Notes shall be repaid on 31st January
2000.
3. The Purchaser agrees that it shall procure that the Company shall not
declare or pay any dividend until the earlier of:
(i) the principal amount of the Loan Notes being repaid in full,
to the extent that they have not been extinguished or reduced
pursuant to their terms and the provisions of this Agreement,
together with all interest due thereon at the date of such
repayment; and
(ii) the date on which the net assets of the Company are increased
to (pound)184,857.00 provided that the payment of any dividend
so declared will not, at the date of payment, cause the net
assets of the Company to reduce below (pound)184,857.00.
30
SCHEDULE 2
----------
(THE PROPERTIES)
----------------
LEASEHOLDS
----------
Property Parties Current rent and Current tenant Length of term
-------- ------- ---------------- -------------- --------------
review dates (including options
------------ ------------------
to break and renew
------------------
Lease of 25, The Parford Estates (pound)13,750 pa the Company 5 years from
Clarendon Centre, (Epsom) Limited and 24.6.1996. Tenant
Salisbury Business the Company has option to break
Park, Salisbury 24.6.1999 on 23.6.1999
XX0 0XX
Underlease of Xxxx 0, Xxxxxxxxx Xxxxxxx (xxxxx)0,000 pa the Company 3 years from
Ground Floor, Barnack Group Limited and 1.8.1995. Tenant
Business Centre, the Company has option to
Xxxxxx Road, No review determine on
Xxxxxxxxx, XX0 0XX 31.7.1997
31
SCHEDULE 3
----------
(WARRANTIES)
Index to Warranties
-------------------
1. Disclosure of Material Facts
2. Accounts
3. Properties
4. Other Assets
5. Intellectual Property Rights
6. Insurances
7. Directors, Employees and Pensions
8. Borrowings
9. Commercial Arrangements
10. Arrangements with Connected Person
11. Litigation and Offences
12. Licences and Fair Trading
13. Subsidiaries and Associates
14. Corporate Organisation
15. Insolvency
16. The Agreement
17. Business since Accounts Date
18. Tax
32
1. DISCLOSURE OF MATERIAL FACTS
----------------------------
1.1 Accuracy and Adequacy of Information
------------------------------------
All the information contained in this Agreement (including the recitals
and Schedules) and in the Disclosure Letter and all other information
which has been given by or on behalf of any one or more of the Vendors
or by any of the directors or officials of the Company or any of their
respective professional advisers to the Purchaser or any of the
directors or officials or professional advisers of the Purchaser in the
course of the negotiations leading to this Agreement was, when given,
true, complete and accurate and, after making due and careful
enquiries, none of the Vendors is aware of any fact, matter or
circumstance not disclosed in writing which renders any such
information untrue, misleading or inaccurate or the disclosure of which
might reasonably affect the willingness of the Purchaser to purchase
the Shares or the price or terms on which the Purchaser would be
willing to purchase them.
1.2 Disclosure Letter
-----------------
There are fully and accurately disclosed in the Disclosure Letter all
matters, information and documents which are or could on reasonable
enquiry be known to the Vendors or any of them and:-
1.2.1 which are necessary to qualify the following paragraphs of
this Schedule in order for such statements when so qualified
to be fair, accurate and not misleading; or
1.2.2 which might materially or adversely affect the present or
future value of the Shares.
2. ACCOUNTS
--------
2.1 General
-------
The Audited Accounts (complete and accurate copies of which have been
initialled by or on behalf of the Vendors for the purpose of
identification):-
2.1.1 give a true and fair view of the state of affairs of the
Company as at the Accounts Date and of the profits and losses
for the financial period ended on that date;
2.1.2 have been prepared in accordance with good accounting
principles and practice (including all applicable SSAP's)
generally accepted at the date of this Agreement in the United
Kingdom and on a basis consistent with that used in preparing
the audited accounts for the Company for all financial periods
preceding that ended on the Accounts Date;
2.1.3 comply with the requirements of all relevant laws; and
2.1.4 are not affected by any extraordinary, exceptional or
non-recurring item.
33
2.2 Provision for Liabilities etc.
------------------------------
2.2.1 The Audited Accounts make full provision for all actual
liabilities and make proper provision for (or note in
accordance with good accountancy practice) or otherwise
disclose all unquantified or disputed liabilities and capital
commitments of the Company outstanding at the Accounts Date
(including contingent liabilities and any deferred Taxation)
and make adequate provision or reserve for all bad or doubtful
debts.
2.2.2 No amount included in the Audited Accounts in respect of any
asset, whether fixed or current, exceeds its purchase price or
production cost or (in the case of current assets) its net
realisable value on the Accounts Date.
2.3 Profits
-------
2.3.1. The profits shown in the Audited Accounts and in audited
accounts of the Company for each of the financial periods
immediately preceding the period ended on the Accounts Date
have not (except as disclosed in any such accounts) to a
material extent been affected by any extraordinary,
exceptional or non-recurring item or by any other factor
rendering such profits for all or any of such periods
unusually high or low.
2.3.2 The net loss of the Company for the period between the
Accounts Date and 31 December 1996, after charging
depreciation and all expenses but] charging or providing for
any Taxation and any extraordinary item(s), will not be
greater than (pound)27,000 (Twenty Seven Thousandpounds).
2.4 Stock Valuation
---------------
The Company's stock in trade and work in progress has been valued in
accordance with the relevant SSAP and on a basis in all respects
consistent with the methods and bases of valuation adopted in the
audited accounts of the Company for all financial periods ended on the
Accounts Date. All redundant or obsolete stock has been wholly
written-off and the value attributed to the remaining stock does not
exceed the lower of cost or net realisable value as at the Accounts
Date.
2.5 Management Accounts
-------------------
A true copy of the Accounts for the period ended on 31 December 1996 is
annexed to the Disclosure Letter. The Accounts have been prepared in
accordance with the Company's normal practice and with accounting
policies consistent with those used in preparing the Audited Accounts.
The Vendors do not consider them misleading and are not aware of any
fact or circumstance which might render them misleading.
2.6 Provisions
----------
THE ALLOWANCES PROVISIONS AND RESERVES SPECIFIED IN THE DOCUMENT IN THE
DISCLOSURE LETTER ENTITLED "PROVISIONS INCLUDED IN THE ACCOUNTS AS AT
31ST AUGUST 1996" ARE THE ONLY SUCH ALLOWANCES, PROVISIONS AND RESERVES
MADE OR TAKEN INTO ACCOUNT IN OR IN PREPARING THE AUDITED ACCOUNTS.
3. PROPERTIES [ AWAITING PROPERTY DEPARTMENT COMMENTS]
---------------------------------------------------
34
3.1 Title to the Properties
-----------------------
3.1.1 The Properties are the only properties in which the Company
has any right, title or interest or which the Company uses or
occupies.
3.1.2 Title to each Property is properly constituted by documents of
title which are in the possession or under the control of the
Company and which are properly stamped and (where appropriate)
adjudicated. The Company has a good and marketable title to
the whole of each Property and to all the proceeds of sale of
each such Property.
3.2 Matters affecting the Properties
--------------------------------
3.2.1 The Properties and their relative proceeds of sale are free
from any exceptions, reservations, mortgages, charges, liens,
leases, tenancies, licences or other rights of occupation,
from any options, rights of pre-emption, covenants,
restrictions, stipulations, easements, rights, privileges or
any other encumbrances (including encumbrances arising under
statutory powers and overriding interests) and from any
agreement or commitment to grant, create or give any of the
same.
3.2.2 The Properties and all buildings, fixtures and fittings on
them are in good repair and condition and fit for the purposes
for which they are presently used.
3.2.3 Each Property is occupied exclusively by the Company and the
Company occupies and uses that Property for the purpose of
conducting its business only.
3.2.4 Access to each Property is over roads which are maintainable
at the public expense. Each Property drains into a public
sewer and is served by water, electricity and gas utilities.
3.2.5 The Company has complied with all covenants, conditions and
obligations binding upon it in relation to each Property. The
Company has received no notice or complaint which remains
outstanding in respect of any breach or alleged breach of any
such covenant, condition or obligation.
3.2.6 There are no outstanding actions, disputes, claims or demands
between the Company and any third party or any local authority
affecting any Property or any neighbouring property.
3.2.7 All policies of insurance relating to tenants fixtures and
fittings and contents in each Property are current and valid
and are not subject to any special or unusual terms or
restrictions. The Company has not done or omitted to do
anything which would make any such policy void or voidable.
35
3.3 Consents and User
-----------------
The present user of each Property is its permanent and unconditional
permitted user under the Town and Country Planning Acts and all
regulations, orders or bylaws made under them.
3.4 Notices etc.
------------
3.4.1 No notice that may affect any Property or the rights of the
Company in relation to any Property has been served by any
individual or company or by any government or governmental
agency or any local or public authority; no circumstances
exist which are or would on reasonable enquiry be known to the
Company by virtue of which the service of such a notice is
warranted or likely.
3.4.2 So far as each of the Vendors is aware, no proposals or orders
exist or are contemplated (whether statutory or other
proposals) whereby the value of any Property or its use by the
Company might be prejudiced.
3.5 Matters Affecting Leasehold Properties
--------------------------------------
3.5.1 Each leasehold Property is held under a legal tenancy which is
in full force and effect and has not become void or voidable.
The Company has complied with the terms of such tenancy and
has not received any complaint from the landlord of any breach
of those terms
3.5.2 All rents and other sums reserved by the lease under which a
leasehold Property is vested in the Company have been fully
paid up to date and unqualified receipts are held by the
Company for the most recent of those payments. No landlord has
refused to accept rent.
3.5.3 The Company is not actually or contingently liable as
guarantor of an original contracting party to any lease of
property.
4. OTHER ASSETS
------------
4.1 Title
-----
The Company is the sole beneficial owner of, has in its
possession or under its control, and has good and marketable
title with full title guarantee to, all the assets (other than
the Properties) included in the Audited Accounts (including
all book debts owed to the Company) and to all other such
assets acquired by the Company since the Accounts Date and to
all other assets used by the Company, free from any option,
charge, lien, encumbrance, equity, factoring agreements, xxxx
of sale, leasing agreement, hire purchase agreement, agreement
for payment on deferred terms or conditional or credit sale
agreement or rental agreement.
4.2 Plant and Machinery etc.
------------------------
36
4.2.1 All the plant, machinery, equipment and vehicles of,
or used in connection with the business of, the
Company are in a good state of repair and working
order and have been regularly and properly maintained
and, where appropriate, will on Completion be
adequately licensed and insured.
4.2.2. The assets listed in the [accounts depreciation
schedule] referred to in the Disclosure Letter
contains a complete and accurate record of each asset,
other than the Properties, owned or possessed or used
by the Company which has a value of (pound)1,000 or
more and there are no outstanding commitments for
capital expenditure in excess of (pound)5,000 in
aggregate other than replacements and normal purchases
of plant and equipment in the ordinary course of
business.
4.3 Net Asset Value
---------------
The net tangible assets of the Company, other than the
Properties, as at 31st December 1996 valued on the same basis
as that adopted in the Audited Accounts will not be less than
(pound)96,000.
4.4 Debts
-----
4.4.1 No debt included in the Audited Accounts, or which has
subsequently arisen, has been outstanding for more
than three months from the due date for payment, has
arisen other than in the normal course of business or
is for more than (pound)100,000.
4.4.2 No debtor has been released by the Company on terms
that such debtor pays less than the book value of his
debt and no debt owing to the Company has been
deferred, subordinated or written off or has proved
irrecoverable.
4.5 Stock
-----
The Company's stock-in-trade is in good condition and there
have been no abnormal losses in the stock of the Company
through theft, breakages, damage or otherwise. All stock has
been stored in suitable conditions for stock of its kind and
not left outside or exposed to the weather and the Company's
stock-in-trade is capable of being sold by the Company in the
ordinary course of its business in accordance with its current
price list without rebate or allowance to a purchaser.
4.6 Sufficiency of Assets
---------------------
The assets owned or leased by the Company comprise all the
assets necessary or convenient for the carrying on of business
(as presently conducted) of the Company.
37
5. INTELLECTUAL PROPERTY RIGHTS
----------------------------
5.1 Ownership etc.
--------------
The Company does not have any legal or beneficial ownership of
any Intellectual Property Rights or Know-How now used by, or
likely to be used by, the Company in its business.
5.2 No Royalties etc.
-----------------
The Company does not pay any royalty or other payment to any
third party (whether pursuant to sections 40 and 41 of the
Patents Xxx 0000 or otherwise) or require the permission of
any third party in relation to the sale of any product or the
use of any process or the provision of any service and those
processes and products or services do not use, embody or
infringe any Intellectual Property Rights or Know-How of any
third party.
5.3 No Breach of Confidentiality
----------------------------
The Company is not in breach of any duty of confidentiality
owed to any person through its ownership or use of any
Intellectual Property Rights.
5.4 No Disputes Affecting Licences
------------------------------
All Intellectual Property Rights used or likely to be used by
the Company in its business are used under licences or other
authorities which are in full force and effect and are not
subject to any notice of termination nor has there been any
default under such licences or authorities. The transactions
contemplated by this Agreement will not crystallise any right
of termination of or under such licences or other authorities
and there are no disputes, current or reasonably foreseeable,
in respect of any of them. True and complete copies of all
such licences and other authorities have been supplied to the
Purchaser.
6. INSURANCES
----------
6.1 Adequacy of Insurances
----------------------
The Company has at the date of this Agreement, and, at all
material times has had, valid, adequate and proper insurances
in respect of its assets and business against all risks
(including, without limitation, loss of 12 months' profits)
which are normally insured against by other companies owning
or possessing similar assets or carrying on similar businesses
for the full replacement value of such assets and, in respect
of its business, for amounts that would, in the circumstances,
be prudent for those other companies. The Company is at the
date of this Agreement, and has at all material times been,
adequately covered against accident, third party injury and
other risks normally covered by insurance by such companies.
6.2 Validity of Insurances
----------------------
On Completion, the Company will be the beneficiary under and
will have in full force and effect the policies of insurance
(details of which, together with
38
details of all premiums payable or paid and any special or
unusual terms or restrictions, have been delivered to the
Purchaser). The Company has not done or omitted to do or
suffered anything to be done or not to be done which has or
might render any policies of insurance taken out by it void or
voidable, there are no current claims under any of those
insurances and, to the best of the knowledge, information and
belief of each of the Vendors, there are no circumstances
which would or might give rise to any claim under any of those
policies. Pending Completion the Company shall effect all
additional insurances which the Purchaser may reasonably
request.
7. DIRECTORS, EMPLOYEES AND PENSIONS
---------------------------------
7.1 General
-------
The employees named in the Disclosure Letter are all the
employees engaged by the Company.
7.2 Terms and Conditions
--------------------
7.2.1 Complete and accurate details of all remuneration and
expenses and other benefits payable to each director,
officer and employee of the Company, and their job
titles, terms of employment, length of service and
notice periods are set out in the Disclosure Letter.
There have been no increases in the emoluments payable
to any director or other employee of the Company and
there have been no changes in the terms of service of
any director or other employee of the Company and no
changes have been proposed since the Accounts Date. No
notice terminating their contract of employment has
been given to any directors or employees of the
Company and no employee has left employment of his own
accord or indicated his intention of so doing.
7.2.2 Full details of all consultancy arrangements with the
Company are set out in the Disclosure letter and all
such arrangements can be terminated by three months'
notice or less without giving rise to a claim for
damages or compensation.
7.3 Disputes
--------
7.3.1 Neither the Company nor any of its employees is
involved in any industrial or trade dispute and there
are no facts known to the Vendors which might suggest
that there may be any trade union or industrial
dispute involving the Company or that the sale of the
Shares may lead to any trade union or industrial
dispute.
7.3.2 The Company has not recognised any trade union nor
entered into any kind of collective agreement or
arrangement and no trade union has a level of
membership among any employees of the Company likely
to entitle that trade union to recognition (of any
kind) by the Company.
39
7.4 Legislation and Regulations Affecting Employees
-----------------------------------------------
7.4.1 The Company has complied in all material respects with
all laws, regulations and codes of conduct and
practice, collective agreements and customs and
practices including, but not limited to, each of the
Employment Rights Act 1996 (as amended), the Equal Pay
Xxx 0000, the Sex Discrimination Xxx 0000, the Race
Relations Xxx 0000, Article 119 of the Treaty of Rome
and all applicable European Community Directives. So
far as each of the Vendors is aware, there are no
circumstances which could reasonably be expected to
give rise to a claim against the Company under any of
those statutes, the treaty or any applicable European
Community Directive.
7.4.2 No orders or recommendations have been made by the
Equal Opportunities Commission, any industrial
tribunal or any court under the Equal Pay Xxx 0000,
the Sex Discrimination Xxx 0000 the Race Relations Xxx
0000 or the Disability Discrimination Xxx 0000 which
directly or indirectly involve the Company, nor have
any investigations under those Acts been carried out
nor, so far as each of the Vendors is aware, are any
pending into the affairs of the Company nor, so far as
each of the Vendors is aware, are any complaints or
proceedings pending against the Company under any of
those Acts.
7.5 Redundancy
----------
The Company has no liability to any of its employees the
length of whose employment for the purposes of redundancy
payments would include any employment by any other person,
firm or company before their employment by the Company. In the
twelve months' period ending with the date of this Agreement,
the Company has not given notice of any redundancies.
7.6 Pensions
--------
The Company does not operate a pension scheme and is under no
legal or moral obligation to make any payment to any Vendor,
officer or employee of the Company or to any other person in
respect of pension arrangements for any such Vendor, officer
or employee.
7.7 Leaving the Company
-------------------
No senior employee of the Company has ceased to be employed by
the Company during the twelve months before the date of this
Agreement and none of the Vendors has any reason to believe
that any senior employees intend or are likely to leave their
employment otherwise than through normal retirement within the
twelve months following Completion.
7.8 Commissions, Liabilities etc.
-----------------------------
7.8.1 There are no agreements, arrangements or schemes in
operation by or in relation to the Company under which
any of its employees or officers is entitled to shares
or a commission or remuneration of any
40
kind calculated by reference in whole or in part
to turnover, profits or sales.
7.8.2 The Company does not have in existence and is not
proposing to introduce any share incentive scheme,
share option scheme or profit sharing scheme for all
or any of its directors or employees.
7.8.3 The Company is not liable to pay any industrial
training levy nor has outstanding any undischarged
liability to pay any governmental or regulatory
authority in any jurisdiction any taxation,
contribution or other impost arising in connection
with the employment or engagement by it of employees
or directors or consultants.
7.8.4 No present, future or contingent liability has been
incurred by the Company for breach of any employment
contract, consultancy agreement or contract for
services or for redundancy payments, payments in
compensation for (or in connection with) unlawful,
wrongful or unfair dismissal or for the actual or
proposed termination, suspension or a variation of the
terms, of any employment, office, consultancy or
contract for services in respect of any present or
former director or employee and no sums in respect of
any such liability have been paid since the Accounts
Date.
7.8.5 No gratuity payment has been made by the Company in
connection with the sale of the Shares. Except in
respect of normal accruals of remuneration or
emoluments of employment, no sum is payable to or for
the benefit of any employee or director.
7.9 Loans to Employees
The Vendors have not made any loan or advance to any officer
or employee or any future officer or employee which is
outstanding.
8. BORROWINGS
----------
8.1 Bank Accounts
-------------
A statement of all the bank accounts of the Company and of the
credit or debit balances on those accounts as at a date not
more than 7 days before the date of this Agreement is annexed
to the Disclosure Letter. The Company has no other bank or
deposit accounts (whether in credit or overdrawn) and, since
that statement, there have been no payments out of any of
those accounts except for routine payments and the balances on
current account are not now substantially different to the
balances shown on those statements.
8.2 Borrowings
----------
The amounts borrowed by the Company do not exceed any
limitation on its borrowing contained in its Articles of
Association or in any debenture or other document binding upon
it. The Company has not engaged in financing or borrowing of a
type which would not require to be shown or reflected in
41
audited accounts. Details of all borrowings or indebtedness in
the nature of borrowings are contained or referred to in the
Disclosure Letter.
8.3 Repayment
---------
The Company has received no notice to repay under any
agreement relating to any of its borrowing or indebtedness in
the nature of borrowing which is repayable on demand and there
has not occurred any event of default under any agreement
relating to any other borrowing or indebtedness in the nature
of borrowing by the Company or any event which, with the
giving of notice and/or the lapse of time and/or any relevant
determination, would constitute an event of default. The
change in ownership of the Company which will result from this
Agreement will not permit any lender to the Company to
withdraw any lending or change any terms and conditions
applicable to such lending.
9. COMMERCIAL ARRANGEMENTS
-----------------------
9.1 Material Contracts
------------------
The Company has not entered into any contracts, transactions
or commitments which are unusual, of more than one year's
duration or involve obligations of a nature or magnitude
calling for special mention.
9.2 Material Capital Commitments
----------------------------
The Company has no capital commitments involving capital
expenditure of over (pound)5,000.
9.3 Other Contracts
---------------
9.3.1 In relation to the Company, there is not outstanding:-
(a) any option, right to acquire, mortgage,
charge, pledge, lien, encumbrance or equity
on the whole or any part of its undertaking,
property or assets or any agreement or
commitment to give or create any of the
foregoing nor has any claim been made by any
person to be entitled to any of the same;
(b) any sale or purchase option or similar
agreement or arrangement by which it is bound
affecting any assets owned by or used by it;
(c) any agreement or arrangement where it is a
party to any joint venture, consortium or
partnership or profit or income sharing
arrangement or agreement;
(d) any liability or obligation (statutory or
otherwise) of it to any person who is or has
been a director or employee;
42
(e) any contract for hire or rent, hire-purchase
or purchase by way of credit sale or
periodical payment in respect of its movable
or personal property;
(f) any guarantee, indemnity, performance bond,
suretyship or comfort (whether or not legally
binding), whether entered into by the Company
in respect of any debt, liability or
obligation of any Director, Vendor, officer,
employee or any other person or by any
Director, Vendor, officer employee or any
other person in respect of the Company's
obligations;
(g) any contract for agency or any
distributorship, marketing, manufacturing,
purchasing or licensing agreement or
arrangement;
(h) any agreement, contract or arrangement
entered into by it otherwise than by way of
bargain at arm's length;
(i) any agreement, contract or arrangement
entered into by it which cannot be fulfilled
or performed, in accordance with its terms,
more than 12 months after the date on which
it was entered into or undertaken or which
cannot be terminated in accordance with its
terms, by the Company on 60 days' notice or
less; or
(j) any security or arrangement similar to
security given by or binding upon the Company
or any of its assets, present or future.
9.3.2 No party with whom the Company has entered into any
agreement or arrangement is in default under such
agreement or arrangement and there are no
circumstances which are likely to give rise to such a
default.
9.4 Powers of Attorney
------------------
There are not outstanding any powers of attorney given by the
Company or any other authority (express, implied or
ostensible) which is still outstanding or effective to any
person to enter into any contract or commitment or do anything
on its behalf.
9.5 Substantial Customers and Suppliers
-----------------------------------
9.5.1 All outstanding agreements and arrangements between
the Company and any material supplier of the Company
are set out or referred to in the Disclosure Letter.
There are no disputes between the Company and any
material supplier or customer of the Company.
10. ARRANGEMENTS WITH CONNECTED PERSONS
-----------------------------------
There is not outstanding:-
43
10.1 any loan made by the Company to, or debt owing to the Company
by, any of the Vendors or any Director or any officer or
employee of the Company or any person connected with any of
them as described in section 839 of the 1988 Taxes Act or any
security for any such loans or debts; or
10.2 any agreement or arrangement (whether legally binding or not)
to which the Company is a party and in which any of the
Vendors or any Director or officer or employee or any person
connected with any of them, as mentioned in paragraph 10.1
above, is interested.
11. LITIGATION AND OFFENCES
-----------------------
11.1 General
-------
11.1.1 Apart from normal debt collection, the Company is not
engaged in any litigation or arbitration or
administrative proceedings which are in progress nor
are any such litigation, arbitration or administrative
proceedings threatened or pending by or against or
likely to involve the Company or any of its assets and
none of the Vendors is aware of any facts which are
likely to give rise to any litigation or arbitration
or administrative proceedings in which the Company
might become involved.
11.1.2 Neither the Company nor any of its officers or
employees by any act or default has committed:-
(a) any criminal or unlawful act in connection
with the business of the Company other than
minor road traffic offences;
(b) any breach of trust in relation to the
business or affairs of the Company; or
(c) any breach of contract or statutory duty or
any tortious act which could entitle any
third party to terminate any contract to
which the Company is party or could lead to a
claim against the Company for damages or an
injunction.
11.2 Conduct of Business
-------------------
The Company has carried on and is carrying on its business in
all respects in accordance with all applicable laws,
regulations and other requirements of the United Kingdom and
any relevant foreign country. No governmental or official
investigation or enquiry concerning the Company is in progress
or threatened and, so far as each of the Vendors is aware,
there are no circumstances which are likely to give rise to
any such investigation or enquiry.
44
12. LICENCES AND FAIR TRADING
-------------------------
12.1 General
-------
All licences, permissions and consents required for the
carrying on of the business of the Company have been obtained
and are in full force and effect and all conditions applicable
to any such licence, permission or consent have been and are
being complied with. None of the Vendors is aware of any
circumstances indicating that any of those licences,
permissions or consents are likely to be suspended, modified,
revoked or not renewed.
12.2 Fair Trading
------------
12.2.1 The Company is not concerned in any arrangement which
infringes or which has or should have been registered
or notified under the Monopolies and Mergers Acts, the
Restrictive Trade Practices Acts 1956 and 1976, the
Fair Trading Xxx 0000, Consumer Credit Xxx 0000, the
Resale Prices Xxx 0000, the Competition Xxx 0000 or
Article 85 or Article 86 of the Treaty of Rome or any
regulation or other enactment giving effect to either
Article or any other anti-trust, fair trading,
consumer protection or similar legislation and the
Company is not in default under or in contravention of
the provisions of any of those Acts or treaties,
regulations, enactments or legislation.
12.2.2 The Company has not received (nor has any director or
officer received) any process, notice or
communication, formal or informal, by or on behalf of
the Office of Fair Trading or the European Commission
or any other authority of any country or union, or any
political or administrative subdivision of the same,
having jurisdiction in anti-trust matters in relation
to any aspect of any business of the Company, or any
agreement, arrangement or concerted practice to which
the Company is, or is alleged to be, a party. So far
as each of the Vendors is aware, neither the Company
nor any Director or officer is likely to receive any
such process, notice or communication.
13. SUBSIDIARIES AND ASSOCIATES
---------------------------
13.1 General
-------
Since the date of its incorporation, the Company has had no
subsidiaries and has never been a subsidiary of any other
company. The Company does not own, nor has it agreed to
acquire, any shares or stock in the capital of, or any
beneficial interest in, any other company or business
organisation. The Company does not control or take part (nor
has it agreed to control or take part) in the management of
any other company or business organisation nor is the Company
(nor has it agreed to become) a member of any partnership or
unincorporated company or association.
13.2 Management fees etc.
--------------------
The Company is not under any obligation or liability (whether
legally binding or not) to pay to any of the Vendors any fee,
commission or charge for or in
45
connection with the provision, supply or purchase of finance,
goods, services or other facilities to, by or from the Company
or for or generally in relation to its affairs. No amounts are
due from the Company to or by any of the Vendors or any other
person otherwise than in the ordinary course of trading and on
normal commercial terms.
14. CORPORATE ORGANISATION
----------------------
14.1 Share Capital
-------------
Part 1 of Schedule 1 contains true particulars of the
authorised and issued share capital of the Company and all
shares shown there as issued are in issue, fully paid, and are
beneficially owned and registered as set out, free from any
claim, charge, lien, equity or encumbrance. The Shares
constitute the whole of the issued share capital of the
Company and there is no option, right to acquire, mortgage,
charge, pledge, lien or other form of security or encumbrance
over the Shares nor any agreement to create any of the same.
14.2 Options etc.
------------
No person has the right (whether exercisable now or in the
future and whether contingent or not) to call for the
allotment, issue, sale or transfer of any share or loan
capital of the Company or any other security giving rise to a
right over the capital of the Company under any option or
other agreement (including conversion rights and rights of
pre-emption).
14.3 Memorandum and Articles
-----------------------
The copy of the memorandum and articles of association of the
Company annexed to the Disclosure Letter is true, accurate and
complete in all respects and has embodied in it or annexed to
it a copy of every resolution or agreement referred to in
section 380 of the Act and neither the Company nor any class
of its members has passed any resolution other than
resolutions relating to ordinary business at annual general
meetings.
14.4 Company Accounts and Records
----------------------------
14.4.1 All accounts, books, ledgers, financial and other
records, including the fixed assets register of the
Company:-
(a) have been fully, properly and accurately
maintained and are up to date, in the
possession of the Company and contain true
and accurate records of all matters required
by law to be entered in them; and
(b) give a true and fair view of matters which
ought to appear in them and do not contain or
reflect any material inaccuracies or
discrepancies.
14.4.2 The Company has received no notice or allegation that
any of its accounts, books, ledgers, financial and
other records is incorrect or should be rectified.
46
14.4.3 Where any of the records are kept on computer, the
Company is owner of all hardware and all software
licences necessary to enable it to use the records as
they have been used in the business prior to the date
of this Agreement and the Company does not share any
hardware or software relating to those records with
any person.
14.5 General
-------
The Company:-
14.5.1 does not use on its stationery or vehicles, or
otherwise carry on business under, any name other than
its corporate name; and
14.5.2 does not have any branch or place of business outside
England or any permanent establishment outside the
United Kingdom.
14.6 Returns
-------
The Company has complied with the provisions of the Act and
the Xxxxxxxx Xxxxxxxxxxx Xxx 0000 and all returns,
particulars, resolutions and other documents required under
any legislation to be delivered by or on behalf of the Company
to the Registrar of Companies or to any other authority have
been properly made and/or delivered.
15. INSOLVENCY
----------
15.1 Winding-Up Petition etc.
------------------------
No order has been made, petition presented, resolution passed
or meeting convened for the winding-up of the Company nor has
any distress, execution or other process been levied against
the Company or action taken to repossess goods in the
Company's possession. The Company has not stopped any payment
nor is insolvent or unable to pay its debts for the purposes
of the Insolvency Xxx 0000. No petition has been presented for
an administration order to be made in relation to the Company
nor has any such order been made.
15.2 Receivership and Administration
-------------------------------
No receiver (including an administrative receiver), trustee or
administrator has been appointed of the whole or any part of
the assets or undertaking of the Company and none of the
Vendors is aware of any circumstances likely to give rise to
the appointment of any such receiver, trustee or
administrator.
15.3 Transactions At An Undervalue
-----------------------------
The Company has not been a party to any transaction with any
third party or parties which would, if any such third party
went into liquidation or had a bankruptcy or administration
order made in relation to it, constitute (in whole or in part)
a transaction at an undervalue, preference or invalid floating
47
charge or otherwise would or might constitute any other
transaction or transfer at an undervalue or involving an
unauthorised reduction of capital.
16. THE AGREEMENT
-------------
16.1 Capacity
--------
Each of the Vendors has full power and authority to enter into
and perform their respective obligations under this Agreement
and the Deed of Indemnity and this Agreement constitutes, and
the Deed of Indemnity when executed will constitute, valid and
binding obligations on each Vendor in accordance with their
respective terms.
16.2 Compliance
----------
Compliance with the terms of this Agreement will not and does
not:-
16.2.1 relieve any person of any obligation owed to the
Company or enable any person to determine any such
obligation or result in the creation, imposition,
crystallisation or enforcement of any encumbrance on
any asset of the Company; or
16.2.2 contravene any agreement or arrangement entered into
or binding on the Company or give any third party the
right of termination or any option so to terminate; or
16.2.3 result in any present or future indebtedness of the
Company becoming due and payable prior to its stated
maturity; or
16.2.4 result in a breach of any order, judgement or decree
of any court or governmental agency to which any or
all of the Vendors is a party or by which any of the
Vendors or their respective assets are bound."
16.3 No Consents Required
--------------------
Each of the Vendors is entitled to sell and transfer to the
Purchaser the full legal and beneficial ownership of the
Shares set opposite such Vendor's name in column (3) of Part 3
of Schedule 1 on the terms of this Agreement without the
consent of any third party.
16.4 Finder's Fees
-------------
No person is entitled to receive from the Company any finder's
fees, brokerage or other commission in connection with the
purchase of the Shares.
16.5 all consents, authorisations, orders, grants, confirmations,
permissions and approvals necessary for or in respect of the
acquisition contemplated by this Agreement have been obtained
from all relevant or appropriate governments or governmental,
supranational or trade agencies or regulatory bodies without
the imposition of any conditions or restrictions, and such
consents, authorisations, orders, grants, confirmations,
permissions and approvals remain in full force and effect;
48
17. BUSINESS SINCE ACCOUNTS DATE
----------------------------
Since the Accounts Date:-
17.1 the Company has carried on business in the ordinary and usual
course [without entering into any transaction, assuming or
incurring any liability or making any payment which is not in
the ordinary course of its business and without any
interruption or alteration in the nature, scope or manner of
conducting its business and so as to maintain the same as a
going concern];
17.2 the Company has not borrowed or lent any money or taken any
financial facility;
17.3 the Company has not entered into, or agreed to enter into, any
unusual, long term or onerous contracts or commitments;
17.4 the Company has not allotted or issued, or agreed to allot or
issue, any share or loan capital or any other security giving
a right over any such capital;
17.5 the Company has not declared or paid out any dividend or other
distribution and no distribution of capital within the meaning
of sections 209, 210 or 418 of the 1988 Taxes Act has been
made or agreed to be made in respect of any of its share
capital;
17.6 no management charge has been or is to be levied against the
Company;
17.7 no loan (otherwise than in the ordinary course of day to day
business) or loan capital has been repaid in whole or in part
and no payment for group relief has been made by the Company;
17.8 the Company has not redeemed or purchased, nor agreed to
redeem or purchase, any of its share capital; and
17.9 there has been no material adverse change in the Company's
financial or trading position or prospects.
18. TAX
---
18.1 Returns, Claims and Disputes
----------------------------
18.1.1 The Company has properly and punctually made, or
caused to be made, all computations and returns, given
all notices, supplied all relevant information
required to be supplied and submitted all claims and
disclaimers assumed to have been made for the purposes
of the Audited Accounts (including for this purpose
the accounts for any earlier financial period) to the
relevant Taxation Authority.
18.1.2 All such information, computations, returns and
notices were and remain complete and accurate in all
material respects.
49
18.1.3 There is no dispute, or any facts or circumstances
likely to give rise to any dispute, with any Taxation
Authority as regards either the liability to Tax
(whether actual or contingent and including the amount
of any fine, penalty or interest) of the Company or
the availability of any relief or right to repayment
of Tax to the Company.
18.1.4 The Company retains sufficient records to calculate
the Tax liability or relief arising on any disposal or
realisation of any asset owned at the Accounts Date or
acquired since that date.
18.1.5 To the best of the knowledge of each of the Vendors,
no event has occurred or is likely to occur which
could give rise to a claim under the Deed of
Indemnity.
18.1.6 the Company has not nor is it liable to incur any
expenditure or pay any rent, interest, annual payment
or other sum which is not wholly deductible in
computing the taxable profits of the Company.
18.2 Penalties and Interest
----------------------
18.2.1 The Company has duly and punctually paid all Tax for
which it is liable and is under no liability to pay
any fine, penalty, interest or other charge in
connection with any non-payment or claim for Tax.
18.2.2 The Company has not made any claim or application to
pay any Tax by instalments or to defer payment of any
Tax.
18.3 Capital Duty, Stamp Duty and Stamp Duty Reserve Tax
---------------------------------------------------
18.3.1 All documents in the possession or control of the
Company or in respect of which the Company has any
interest have been duly and properly stamped.
18.3.2 The Company has not made any claim for relief from
Stamp Duty under section 55 Finance Xxx 0000, section
42 Finance Xxx 0000, section 78 Finance Xxx 0000 or
sections 75 to 77 Finance Xxx 0000 or for capital duty
relief under Part III Schedule 19 Finance Xxx 0000.
18.3.3 The Company has not entered into any agreement whereby
it is or may become liable to Stamp Duty Reserve Tax.
18.3.4 The Company has promptly and duly paid all capital
duty and loan capital duty for which it is liable.
18.4 VAT
---
18.4.1 The Company is a registered and taxable person for the
purpose of VATA and has fully complied with all
provisions, regulations, orders and directions
relating to VAT. So far as the Vendors are aware all
input VAT incurred by the Company is fully recoverable
by The Company.
50
18.4.2 The Company has neither applied nor been treated as
belonging to a group of companies for the purpose of
section 43 VATA.
18.4.3 There are no outstanding notices from the
Commissioners of Customs and Excise in respect of any
late submission of VAT returns or late payment of VAT
by the Company.
18.4.4 All VAT and duties payable in respect of any assets
(including trading stock) imported or owned by the
Company have been paid in full.
18.4.5 Full particulars have been disclosed in the Disclosure
Letter of any claim by the Company for bad debt relief
under section 22 of the Value Added Tax Xxx 0000 or
section 36 VATA and the regulations pursuant to the
same.
18.4.6 No circumstances exist whereby the Company would or
might become liable for VAT as an agent or otherwise
under section 47 VATA.
18.4.7 The Company has not been required to give security
under paragraph 4 Schedule 11 VATA.
18.4.8 The Company has not made an election under paragraph 2
Schedule 10 VATA in respect of any property nor has
the Company received notice of such an election from
the holder or any interest immediately superior to
that held by the Company in respect of any property.
18.4.9 Since 1 April 1989, the Company has not occupied or
otherwise had any interest in a building or civil
engineering works within the meaning of paragraph (a)
Item 1 Group 1 Part II Schedule 9 VATA.
18.4.10 There are no circumstances in which the provisions of
paragraph 6 Schedule 10 VATA or the provisions of the
Value Added Tax (General Amendment) (No. 4)
Regulations 1989 may apply to the Company.
18.5 Income Tax and Withholding Tax
------------------------------
18.5.1 The Company has complied promptly and in full with all
legislation and regulations relating to PAYE and the
taxation of employee benefits including (without
limitation) income tax in relation to sub-contractors
tax deduction scheme and casual labour and relating to
National Insurance Contributions (including employers
contributions).
18.5.2 The Company has made in full all deductions in respect
of any Tax from any payments made by it which it is
obliged or entitled to make and has accounted in full
to the appropriate Taxation Authority in respect of
the same.
51
18.6 Capital Gains
-------------
18.6.1 The Company has not acquired any asset otherwise than
at market value as at the time of acquisition and
there are no circumstances in which the Company has
incurred or may incur loss or liability pursuant to
sections 17, 30, 31, 32, 176 or 177 TCGA.
18.6.2 The Company has not made any claim or election under:-
(a) section 24 TCGA (assets of negligible value);
(b) section 279 TCGA (assets situated outside the
United Kingdom);
(c) section 162 TCGA (transfer of a business to a
company);
(d) section 152 or 153 TCGA (replacement of
business assets).
18.6.3 The Company has not been a party to any transaction
involving securities or shares to which section 106
TCGA applies or may apply.
18.7 Groups and Reorganisations
--------------------------
18.7.1 Full particulars have been disclosed in the Disclosure
Letter of any claim, election or surrender made by the
Company under any of the following:-
(a) section 247 1988 Taxes Act (dividends paid by
one member of a group to another);
(b) section 152 or 153 TCGA (replacement of
business assets);
(c) section 239 or 240 1988 Taxes Act (set-off of
surplus ACT);
(d) section 402 1988 Taxes Act (surrender of
relief);
(e) section 171 TCGA (groups of companies).
18.7.2 The Company has not been a party to any transactions
falling within sections 135, 136, 139, 140, 171 or 000
XXXX or sections 116, 395 or 410 1988 Taxes Act.
18.7.3 The Company has not ceased to be a member of a group
of companies for the purposes of section 178 or 179
TCGA (otherwise than as part of a merger to which
section 181 TCGA applies).
18.8 Losses
------
18.8.1 Full details have been disclosed in the Disclosure
Letter of:-
(a) all losses (whether trading or capital
losses) carried forward by the Company; and
52
(b) all unrelieved advance corporation tax or
excess franked investment income available to
the Company.
18.8.2 During the period since incorporation of the Company:-
(a) there has been no major change in the nature
or conduct of a trade carried on by the
Company; or
(b) the scale of activities of any trade carried
on by the Company has not been small or
negligible within the meaning of sections 245
or 768 ICTA.
18.9 Close Companies
---------------
18.9.1 The Company is not liable to Tax under sections 419 or
422 1988 Taxes Act in respect of any loan to a
participator and there is no loan outstanding to the
Company on which any interest paid would be a
distribution.
18.9.2 The Company is not, nor has been, a close investment
company within the meaning of section 13A 1988 Taxes
Act.
18.10 Capital Allowance
-----------------
18.10.1 Full disclosure has been made to the Purchaser of all
capital expenditure qualifying for capital allowances
and all balancing adjustments pursuant to the Capital
Xxxxxxxxxx Xxx 0000 in respect of any accounting
period (as defined in section 12 1988 Taxes Act) of
the Company ended on or before the Accounts Date.
18.10.2 Save as disclosed in the Audited Accounts, since the
end of the last such accounting period referred to in
paragraph 18.10.1, the Company has not done, omitted
to do, agreed to do or permitted to be done any act as
a result of which there may be made either a balancing
charge in respect of such capital expenditure or any
recovery of excess relief within the provisions of the
Capital Allowances Xxx 0000.
18.10.3 On the disposal by the Company of any asset owned by
it at the date of this Agreement at the value at which
that asset is stated in the Audited Accounts, neither
a chargeable gain nor a balancing charge under the
Capital Allowances Act 1990 would arise (and for the
purpose of this paragraph 18.10.3 any relief or
allowance available to the Company, other than a sum
falling to be deducted under section 38 TCGA, shall be
disregarded).
18.11 Distributions
-------------
18.11.1 The Company has not made any distribution within the
meanings of sections 209, 210 or 418 1988 Taxes Act
save as provided in its audited accounts.
53
18.11.2 The Company has not made a capital distribution within
the meaning of section 122(5) TCGA or to which section
189 TCGA applies.
18.12 Inheritance Tax
---------------
18.12.1 The Company has not made any transfer of value within
the meaning of sections 94 or 99 Inheritance Tax Xxx
0000.
18.12.2 No person has by virtue of section 212 Inheritance Tax
Act 1984 any power of sale, mortgage or charge in
respect of any share in or asset of the Company.
18.12.3 There is no outstanding Inland Revenue charge under
section 237 Inheritance Tax Act 1984 over the assets
or the shares in the Company.
18.13 Miscellaneous
-------------
18.13.1 The Company has not been a party to any transaction to
which section 56 1988 Taxes Act applies or may apply.
18.13.2 The Company has not issued nor acquired any deep
discount securities as defined by Schedule 4 paragraph
1(1) 1988 Taxes Act or disposed of a corporate bond in
circumstances to which sections 64(5) or 64(6) Finance
Xxx 0000 applies or may apply.
18.13.3 The Company is not entitled to the benefit of any debt
other than as original creditor.
18.13.4 The Company has not lost nor will it lose any
entitlement to relief under sections 37, 87 or 399
1988 Taxes Act.
18.13.5 The Company has not made any claim under sections 584
or 585 1988 Taxes Act.
18.13.6 The Company has not received nor knows of any
circumstances under which it may receive payment of
any enterprise allowance within the meaning of section
127 1988 Taxes Act.
18.13.7 Full details have been disclosed of any charities
payroll deduction scheme within the meaning of section
202 1988 Taxes Act or any qualifying donation within
the meaning of section 339 1988 Taxes Act operated or
made by the Company.
18.14 Residency
---------
18.14.1 The Company does not have dual residency for Tax
purposes.
18.14.2 No event has occurred which could give rise to the
Company suffering a liability under sections 765 to
767 or 770 1988 Taxes Act.
54
18.15 Anti Avoidance
--------------
18.15.1 The Company has not been a party to or otherwise
involved in any scheme or arrangement designed wholly
or mainly for the purpose of avoiding or deferring Tax
liability.
18.15.2 The Company has not been concerned in any transaction
in which any of the following provisions have been or
could be applied except where all applicable
clearances (based on the full disclosure of all
material facts) have been obtained and disclosed in
the Disclosure Letter:-
(a) sections 35 to 36 1988 Taxes Act;
(b) sections 213 to 218 1988 Taxes Act;
(c) sections 219 to 229 1988 Taxes Act;
(d) section 703 1988 Taxes Act;
(e) sections 729 to 745 1988 Taxes Act;
(f) sections 757 to 760 1988 Taxes Act;
(g) sections 774 to 776 1988 Taxes Act;
(h) sections 779 to 786 1988 Taxes Act;
(i) sections 135 to 137 TCGA; and
(j) section 192 TCGA.
55
SCHEDULE 4
----------
(DOCUMENTS IN THE AGREED TERMS)
1 Service agreement between the Company and X. Xxxxx.
2 Subordinated Loan Stock Instrument.
3 Exclusive distributor agreement between the Company and Vision
Navigation Systems Limited.
4. Accounts.
5. Disclosure Letter.
6. EMG Agreement.
7. Agreement with Intersat France S.a.r.l.
8. Subordinated Stock Pledge Agreement.
9. Standby and Subordination Agreement.
10. Personal Guaranty.
11. Memorandum of Deposit.
56
Signed by )
for and on behalf of )
THE O'GARA COMPANY )
in the presence of )
Signed by XXXXXX XXXXX )
XXXXXXX XXXXX in the )
presence of:- )
..................................................
Name:
Address:
..................................
..................................
Occupation:..................................
57
Signed by ALEXANDER )
XXXXX XXXXXXX WHITE )
in the presence of:- )
..................................................
Name:
Address:
..................................
..................................
Occupation:..................................
Signed by XXXX XXXXX )
WHITE in the presence of:- )
..................................................
Name:
Address:
..................................
..................................
Occupation:..................................
