THIS AGREEMENT is made on March 9, 2000
PARTIES
(1) THE PERSONS whose names and addresses are set out in Schedule 1
(2) VIZACOM, INC. A Delaware corporation of Glenpointe Center East, 000 Xxxxx
X Xxxx Xxxxxxxxx, Xxxxxxx, XX 00000
1. INTERPRETATION
In this Agreement :-
1.1 the following expressions have the following meanings unless
inconsistent with the context :-
Expression Meaning
---------- -------
"the Accounts" the audited accounts of the Company for
the financial period which ended on the
Accounting Date, comprising a balance
sheet, a profit and loss account,
notes and directors and auditors'
reports
"the Accounting Date" 31 December 1999
"the Act" the Companies Xxx 0000
"Business Day" any day (other than Saturday or Sunday)
on which clearing banks in London are
open for a full range of banking
transactions
"the Company" Junction 15 Limited, registered number
3113286
"Completion" completion of the sale and purchase in
accordance with clause 6
"the Consideration" the consideration for the sale of the
Shares as stated in clause 3.1
"the Consideration Shares" 681,818 shares at $3.300 per share of
the common stock of the Purchaser with a
par value of US $0.001 per share
"the Disclosure Letter" the letter having the same date as this
Agreement from the Vendors' Solicitors
to the Purchasers' Solicitors qualifying
the Warranties
"the Employment Agreements" the agreements in the agreed terms to be
entered into between the Company and
each of the Managers
"the Lock-Up Agreement" the agreement in the agreed terms
between the Vendors and Purchaser
governing the sale of the Consideration
Shares
"the Managers" Xxx XxXxxxx and Xxxx Xxxxxxx
"NASDAQ" The NASDAQ Stock Market, Inc.
"the Property" the property specified in Schedule 3
(and, if more than one, each such
property) and each and every part of
such property
"the Purchaser" Vizacom, Inc., and its successors and
assigns
"the Purchaser's Solicitors" Eking Xxxxxxx of 00 Xxx Xxxxxxxx,
Xxxxxxxxxx, XX0 0XX
"the Registration Rights
Agreement" the agreement in the agreed terms
between the Purchaser and the Vendors
governing the registration rights in
respect of the Consideration Shares
"the Shares" all the issued shares in the capital of
the Company
"the Trustees" Court Services Limited being the
trustees of the XxXxxxx Settlement
"the Vendors" those persons whose names and addresses
are set out in Schedule 1 together
(where appropriate) with their
respective successors, assigns and
personal representatives (and "Vendor"
shall be construed accordingly)
-2-
"the Vendors' Solicitors" Xxxxxx Xxxxxxxx Innocent of 000 Xxxxx
Xxxxxxxx Xxxxxx, Xxxxxx, X0X 0XX
"the Warranties" the warranties, representations and
undertakings set out or referred to in
clause 4, Schedule 4 and Part III of
Schedule 5
"the Warrantors" the Managers and the Trustees
1.2 reference to any statute or statutory provisions will, unless the
context otherwise requires, be construed as including references to any earlier
statute or the corresponding provisions of any earlier statute, whether repealed
or not, directly or indirectly amended, consolidated, extended or replaced by
such statute or provisions, or re-enacted in such provisions, and to any
subsequent statute or the corresponding provisions of any subsequent statute
directly or indirectly amending, consolidating, extending, replacing or
re-enacting the same, and will include any orders, regulations, instruments or
other subordinate legislation made under the relevant statute or statutory
provisions which are in force prior to Completion
1.3 references to persons will be construed so as to include bodies
corporate, unincorporated associations and partnerships
1.4 references to a document being "in the agreed terms" will be construed
as references to that document in the form agreed and initialled by or on behalf
of the Vendors and the Purchaser
1.5 all covenants, agreements, undertakings, indemnities, representations
and warranties on the part of two or more persons are given or made by such
persons jointly and severally
1.6 references to clauses and Schedules are to clauses of and Schedules to
this Agreement, and references to paragraphs are to paragraphs in the Schedule
in which such references appear, and
1.7 the Schedules form part of this Agreement and will have the same force
and effect as if expressly set out in the body of this Agreement
2. SALE AND PURCHASE
2.1 Each of the Vendors will sell, and the Purchaser will buy, the number
of the Shares specified opposite that Vendor's name in Schedule 1
2.2 Each of the Shares will be sold and bought with full title guarantee
free from any claim, charge, lien, encumbrance, equity or third party right, and
with all rights attached or accruing to it including all rights to any dividends
or other distributions declared, made or paid after the execution of this
Agreement
-3-
2.3 Each of the Vendors waives all rights of pre-emption over any of the
Shares conferred by the articles of association of the Company or otherwise
2.4 The Purchaser will not be obliged to complete the purchase of any of
the Shares unless the purchase of all the Shares is completed simultaneously
3. CONSIDERATION
3.1 The consideration for the sale by the Vendor of the Shares shall be US
$2,500,000 to be satisfied as follows:-
3.1.1 as to US $250,000 (two hundred and fifty thousand dollars) to be
satisfied by the payment of 156,250 in cash at Completion
3.1.2 as to US $2,250,000 (two million two hundred and fifty thousand
dollars) by the allotment and issue to the Vendors of the Consideration Shares
credited as fully paid and each of the Vendors who would otherwise be entitled
to a fraction of a Consideration Share (after aggregating all fractional shares
of the Consideration Shares to be received by such Vendor) shall receive from
the Purchaser an amount of cash (rounded to the nearest whole cent) equal to the
product of (i) such fraction multiplied by (ii) $3.30
3.2 Each of the Vendors will be entitled to receive the sum and number of
Consideration Shares specified opposite that Vendor 's name in Schedule 1
3.3 The Consideration payable under clause 3.1.1 will be paid in cash on
Completion by way of a CHAPS transfer from a Clearing Bank to the client account
of the Vendors' Solicitors with Royal Bank of Scotland, London Belgravia Branch,
00 Xxxxxxxxx Xxxxx, Xxxxxx, XX0X 0XX, sort code 16-00-16, account number
00000000 or by such other method as may be agreed between the parties.
3.4 The Vendors' Solicitors are authorised to receive the Consideration
payable under clause 3.1.1 on behalf of the Vendors and payment to them will be
a good and sufficient discharge to the Purchaser and the Purchaser will not be
further concerned as to the application of the moneys so paid
4. WARRANTIES
4.1 The Warrantors severally:-
4.1.1 warrant, represent and undertake to the Purchaser in the terms
of the Warranties, provided however that the Purchaser will not be entitled to
claim that any fact or combination of facts constitutes a breach of any of the
Warranties if and to the extent that such fact
-4-
or combination of facts has been fully and fairly disclosed in the Disclosure
Letter and any matter specifically identified in the Accounts;
4.1.2 agree that the Purchaser is entering into this Agreement in
reliance on each of the Warranties and agree that save as provided in clause
4.1.1 no information of which the Purchaser has knowledge (actual or
constructive) will prejudice any claim made by the Purchaser in respect of the
Warranties or will operate to reduce any amount recoverable in respect of any
breach of any of the Warranties;
4.1.3 will indemnify the Purchaser against any reasonable costs or
expenses (including reasonable legal costs) which it may incur, either before or
after the commencement of any action, directly or indirectly as a result of any
breach of any of the Warranties;
4.1.4 undertake to disclose immediately to the Purchaser anything
which comes to the notice of any of them which is or may be a breach of any of
the Warranties; and
4.1.5 undertake that, in the event of any claim being made against any
of them whether under the Warranties or otherwise in connection with the sale of
the Shares to the Purchaser, they will not make any claim against the Company,
or against any director, officer or employee of the Company, on which or on whom
any of them may have relied for advice or information before agreeing to any
term of this Agreement or authorising any statement in the Disclosure letter,
but so that this undertaking will not preclude any Warrantor from claiming
against any other Warrantor under any right of contribution or indemnity to
which such Warrantor may be entitled
4.2 In the event of any claim being made against the Warrantors under the
Warranties or the Tax Covenant ("Relevant Claim") the Warrantors may each elect
(by giving notice to the Purchaser within 3 months of the Relevant Claim being
notified to the Warrantors pursuant to clause 4.5.3.1 or under the Tax Covenant
as the case may be) to satisfy their liability in respect of the Relevant Claim
by delivery to the Purchaser of a promissory note in the agreed terms ("the
Note") in which event the following provisions shall apply:-
4.2.1 The restrictions in the Lock Up Agreement on such Consideration
Shares shall be lifted with respect to such number of Consideration Shares as
shall have the market value equal to 110% of the value of the Warranty Claim
4.2.2 The principal amount of the Note shall be the value of the
Relevant Claim and the Note shall not carry interest (at the rate otherwise
provided for in clause 11 below) unless or until such time as the Consideration
Shares referred to in clause 4.2.1 above are registered for resale under the
Securities Act of 1933
4.2.3 The relevant Warrantor(s) shall do execute and carry out all
acts documents and things in the power necessary or desirable to satisfy the
Note and in the event that they fail to do so within 7 days of notice given by
the Purchaser, the Purchaser shall be entitled as attorney for
-5-
the relevant Warrantor(s) to do execute or carry out the relevant matter on
their behalf (including without limitation execution of any transfer or sale
document in respect of the Consideration Shares).
4.3 Each of the Warranties will be construed as a separate Warranty
and will not be limited or restricted by reference to, or inference from, the
terms of any other Warranty or any other term of this Agreement, provided that a
disclosure against one warranty shall be deemed to apply to all the Warranties
4.4 In this Agreement, unless otherwise specified, where any Warranty
refers to the knowledge, information, belief or awareness of the Warrantors (or
similar expression), each Warrantor will be deemed to have such knowledge,
information, belief or awareness as such Warrantor would have obtained had such
Warrantor made all due and careful enquiries into the subject matter of that
Warranty and the knowledge, information, belief and awareness of any one of the
Warrantors shall be imputed to the remaining Warrantors
4.5 In this clause 4.5 and clause 4.6 "claim" means any claim which would
(disregarding the provisions of this clause 4.5) be capable of being made
against the Warrantors (or any of them) for breach of the Warranties.
Notwithstanding the foregoing provisions of clause 4 and subject to clauses 11
and 12 below :-
4.5.1 the aggregate liability of the Warrantors in respect of all
claims will be limited to US $ 250,000 plus the lower of the value of the
Consideration Shares on Completion (such value being the average closing price
quoted by NASDAQ over the 20 Business Days prior to such date) and the fair
market value of the Consideration Shares on the first day that the Warrantors
are lawfully and contractually able to sell the same having regard to the effect
that such sale will have on the market price for the Consideration Shares
4.5.2 that part of the cash consideration of $250,000 referred to in
clause 3.1.1 received by him plus the lower of the value of the Consideration
Shares received by him on Completion (determined in accordance with clause
4.5.1) and the fair market value of such Consideration Shares again as
determined in accordance with clause 4.5.1;
4.5.3 subject to the provisions of clause 4.5.2 above the aggregate
liability of the Trustees under the Warranties shall be limited to the net value
from time to time of the assets of the trust subject to which they now hold
those of the Shares registered in their names, such value to be as at the date a
claim is made by the Purchaser under the Warranties, after deduction of sums due
to the Inland Revenue and costs and fees properly chargeable against the capital
of the said trust, and the Trustee hereby undertakes with the Purchaser that
they will not distribute any of the assets of the said trust, other than for
payment of such sums, costs and fees, whilst a claim under the Warranties is
outstanding or prior to the expiration of any time limit for the making of a
claim unless:
-6-
4.5.3.1 an undertaking in favour of the Purchaser is obtained
from a beneficiary, in a form reasonably satisfactory to the Purchaser, whereby
the beneficiary accepts liability to the extent of the value of the
distribution; and
4.5.3.2 the distribution would not be prejudicial to the
Purchaser's rights and ability to recover the amount of any claim.
4.5.4 the Warrantors will be under no liability to make any payment in
respect of any claim unless the amount of the claim exceeds US$5,000 and the
amount of their liability in respect of such claim is (when aggregated with
their liability in respect of any other claim or claims made by the Purchaser or
which would have been made but for the provisions of this clause 4.5.2) in
excess of US $20,000, in which event the Warrantors will (subject to the other
provisions of this clause 4.5) be liable for the whole amount of such liability
and not merely for the excess;
4.5.5 the Warrantors will be under no liability to make any payment
in respect of any claim unless :-
4.5.5.1 written particulars of the claim (giving details of the
specific matter in respect of which such claim is made) are given to the
Warrantors; and
4.5.5.2 such particulars are given within a period of seven years
from the date of this Agreement or (in the case only of any claim not relating
to Taxation (as defined in Schedule 5)) 18 months from the date of this
Agreement; and
4.5.6 The Warrantors will have no liability in respect of any claim:-
4.5.6.1 to the extent that it relates to any loss for which the
Purchaser or the Company is indemnified by insurance; or
4.5.6.2 to the extent that it relates to any matter provided
for, or included as a liability or disclosed, in the Accounts (as defined in
Schedule 4) of the Company
4.6 Notwithstanding any other provision of this Agreement, the provisions
of clause 4.5 or clause 4.8 shall not apply to exclude or limit the liability of
the Warrantors to the extent that any claim arises by reason of any fraud,
dishonesty, or wilful misstatement or omission by or on behalf of the Warrantors
or any of them
4.7 The Purchaser shall take such reasonable steps and give such reasonable
assistance to avoid or mitigate any losses which in the absence of such steps
might give rise to a liability in respect of any claim under this Agreement
other than any claim under the Tax Covenant.
-7-
4.8 The Purchaser acknowledges to the Vendors that it has purchased the
shares on the basis of the Warranties and not on the basis of any other
representation whether oral or in writing by the Vendors or Warrantors
4.9 The Trustees hereby covenant with the Purchaser that if they or any of
them retire or are discharged from any of the Trusts subject to which they now
hold the Shares, they will procure that their successors as trustee of the
Trusts enter into a deed of novation with the Purchaser by which the new trustee
accepts the liability of the retiring Trustee on the same terms as set out in
this clause 11 and thereupon the retiring Trustee shall be discharged from
liability under the Warranties
4.10 Any payment made to the Purchaser under the Warranties shall be
treated as a reduction of the Consideration.
5. TAX COVENANT
With effect from Completion the Warrantors covenant to the Purchaser as set
out in Part II of Schedule 5 and the parties agree to give effect to those
provisions
6. WARRANTIES AND REPRESENTATION OF THE PURCHASER
The Purchaser represents and warrants to each Vendor as follows except to
the extent disclosed in the Purchaser's filings with the US Securities and
Exchange Commission:-
6.1 The Purchaser is a corporation duly incorporated and validly existing
under the laws of the State of Delaware and has full corporate power and
authority to carry on its business as it is now being conducted. The Purchaser
has prior to the execution of this Agreement delivered to the Vendors true and
complete copies of the certificate of incorporation and by-laws of the Purchaser
as in effect on the date hereof.
6.2 The authorised common stock of the Purchaser consists solely of
60,000,000 (sixty million) shares of Stock, par value $0.001 per share of which
approximately 7,900,000 shares are outstanding as at 29 February 2000. All of
the Purchaser's issued and outstanding shares of capital stock are duly
authorised, validly issued, outstanding, fully paid and nonassessable.
6.3 The execution and delivery by the Purchaser of this Agreement and any
other document to which it is a party, and the performance by the Purchaser of
its obligations hereunder and thereunder, have been duly and validly authorised
by the Board of Directors of the Purchaser. This Agreement has been duly and
validly executed and delivered by the Purchaser and constitutes, and upon the
execution and delivery by the Purchaser of any other agreement to which it is a
party, such other Agreement will constitute, legal, valid and binding
obligations of the Purchaser enforceable against the Purchaser in accordance
with their terms.
-8-
6.4 The execution and delivery by the Purchaser of this Agreement, the
execution and delivery by the Purchaser of any other agreements to be executed
by it pursuant to or in connection with this Agreement, the performance by the
Purchaser of its obligations under this Agreement and such other agreements do
not:-
(a) conflict with or result in a violation or breach of any of the
terms, conditions or provisions of the certificate of incorporation and by-laws
of the Purchaser;
(b) conflict with or result in a violation or breach of any term or
provision of any law or order applicable to the Purchaser or any of its assets
and properties; or
(c) (i) conflict with or result in a violation or breach of;
(ii) constitute (with or without notice or lapse of time or both)
a default under;
(iii) require the Purchaser to obtain any consent, approval or
action of, make any filing with or give any notice to any person as a result or
under the terms of; or
any contract to which the Purchaser is a party;
(d) result in the creation or imposition of any encumbrance upon the
Purchaser or any of is assets or properties.
6.5 So far as the Purchaser is aware, no consent, approval or action of,
filing with or notice to any Government or Regulatory Authority on the part of
the Purchaser is required in connection with the execution, delivery or
performance of this Agreement or the performance of the transactions
contemplated hereby or thereby.
6.6 There are no actions or proceedings pending or, so far as the Purchaser
is aware, threatened against, relating to or affecting the Purchaser or any of
its assets and properties which could reasonably be expected to result in the
issuance of an order restraining, enjoining or otherwise prohibiting or making
illegal the performance of any of the transactions contemplated by this
Agreement or any other agreement executed pursuant to this Agreement.
6.7 The Purchaser is in material compliance with all laws and orders
applicable to it and its properties and assets. The Purchaser has not received
any notification that it is in violation of any such laws or orders and no such
violation exists that would have a material adverse effect on the Purchaser.
-9-
7. RESTRICTIVE COVENANTS
7.1 For the purpose of assuring to the Purchaser the full benefit of the
Company and in consideration for the Purchaser agreeing to buy the Shares on the
terms of this Agreement, each of the Managers undertakes to the Purchaser that
such Manager will not for a period (except in the case of clause 7.1.7) of one
year following termination (for whatever reason) of the Employment Agreement
with such Manager ("the Restricted Period"), without the prior written consent
of the Purchaser, whether directly or indirectly and whether alone or in
conjunction with, or on behalf of, any other person and whether as principal,
shareholder, director, employee, agent, consultant, partner or otherwise (except
in the case of the Managers in the course of their duties for the Purchaser or
the Company pursuant to the Employment Agreements):-
7.1.1 for the Restricted Period canvass, solicit or approach, or cause
to be canvassed, solicited or approached, for orders any person who at any time
during the twelve months immediately preceding the date of Completion is or
was:-
7.1.1.1 negotiating with any the Company for the supply by the
Company of goods or services; or
7.1.1.2 a client or customer of the Company; or
7.1.1.3 in the habit of dealing with the Company,
where the orders relate to goods and/or services which are
competitive with or of the type supplied by the Company at any time during the
twelve months immediately preceding the date of Completion;
7.1.2 for the Restricted Period deal or contract with any person who
at any time during the twelve months immediately preceding the date of
Completion is or was:-
7.1.2.1 negotiating with the Company for the supply by the
Company of goods or services; or
7.1.2.2 a client or customer of the Company; or
7.1.2.3 in the habit of dealing with the Company,
where the dealing or contracting relates to goods and/or services
which are competitive with or of the type supplied by the Company at any time
during the twelve months immediately preceding the date of Completion;
7.1.3 for the Restricted Period interfere, or seek to interfere, with
the continuance of supplies to the Company from any supplier who has been
supplying goods and/or services to the
-10-
Company at any time during the twelve months immediately preceding the date of
Completion if such interference causes or would cause that supplier to cease
supplying or materially reduce its supply of, those goods and/or services to
the Company;
7.1.4 for the Restricted Period solicit or entice, or endeavour to
solicit or entice, away from the Company, or employ, any person employed in a
managerial, supervisory, technical, sales or administrative capacity by, or who
is or was a consultant to, the Company at Completion or at any time during the
period of [one month] immediately preceding the date of Completion;
7.1.5 within the United Kingdom for the Restricted Period of be
engaged, employed by, concerned or interested in, or provide technical,
commercial or professional advice to, any other business which supplies goods
and/or services which are competitive with or of the type supplied by the
Company at Completion; provided that this restriction does not apply to prevent
any of the Managers from holding shares or other securities in any company which
are quoted, listed or otherwise dealt in on a recognised stock exchange or other
securities market and which confer not more than 3% of the votes which could be
cast at a general meeting of such company;
7.1.6 within the United Kingdom for the Restricted Period be engaged,
concerned or interested in any business which has at any time during the twelve
months immediately preceding the date of Completion supplied any goods and/or
services to, or is a client or customer of, the Company if such engagement,
concern or interest causes or would cause the supplier to cease or materially
reduce its supplies to the Company or (as the case may be) the client or
customer to cease or materially reduce its orders or contracts with the Company;
or
7.1.7 at any time after Completion use in connection with any business
any name which includes the name of the Company or any colourable imitation of
it
7.2 The parties agree that each of the undertakings set out in clause 7.1
is separate and severable and enforceable accordingly and if any one or more of
such undertakings or part of an undertaking is held to be against the public
interest or unlawful or in any way an unreasonable restraint of trade, the
remaining undertakings or remaining part of the undertakings will continue in
full force and effect and will bind each of the Vendors
7.3 Each of the Vendors acknowledges that such Vendor has information in
respect of the business and financing of the Company and their dealings,
transactions, affairs, plans and proposals, all of which information is, or may
be, secret or confidential and important to the Company. In this clause 7.3 and
in clause 7.4 such information is called "Confidential Information" and
includes, without limitation, confidential or secret information relating to the
Company's trade secrets, know-how, , business methods, finances, prices,
business plan, marketing plans, development plans, manpower plans, sales
targets, sales statistics, customer lists, customer relationships, computer
systems and computer software. Each of the Vendors further acknowledges that the
disclosure of Confidential Information (whether directly or indirectly) to
actual or potential competitors of the Company would place the Company at a
competitive disadvantage and would do
-11-
damage (whether financial or otherwise) to its business. Each of the Vendors
accordingly agrees to enter into the restrictions contained in clause 7.4
7.4 Each of the Vendors undertakes that such Vendor will not at any time
after Completion:-
7.4.1 disclose to any person except to those authorised by the
Company to know;
7.4.2 use for the Vendor's own purposes or for any purposes other
than those of the Company; or
7.4.3 through any failure to exercise all due care and diligence
cause or permit any unauthorised disclosure of,
any Confidential Information of the Company, provided that these
restrictions on each Vendor will cease to apply to information which (otherwise
than through the default of such Vendor) becomes available to the public
generally
8. COMPLETION
The sale and purchase of the Shares will be completed at the offices of the
Purchaser's Solicitors immediately after the signing and exchange of this
Agreement when:-
8.1 the Vendors will produce and deliver to the Purchaser:-
8.1.1 duly executed transfers of the Shares in favour of the Purchaser
(or as it will direct)
8.1.2 share certificates in respect of the Shares (or in the case of
any lost certificate an indemnity satisfactory to the Purchaser in relation to
it) and together also with such waivers and consents as the Purchaser may
require to enable the Purchaser and its nominee(s) to be registered as the
holders of the Shares;
8.1.3 written resignations from all directors (other than the
Managers) and the secretary of the Company in the agreed terms;
8.1.4 the written resignation of Messrs Silver Xxxxxx as auditors of
the Company accompanied in each case by the statement section 394 of the Act
stating that there are no such circumstances as are mentioned in that section;
8.1.5 the certificate of incorporation, any certificate(s) of
incorporation on change of name, the common seal and the statutory books and
registers (all entered up to date) of the Company;
-12-
8.1.6 the lease of the Property and all other deeds and documents
relating to the title of the Company to the Property held by the Company.;
8.1.7 all cheque books in current use of the Company together with
all unused cheques;
8.1.8 bank statements in respect of each account of the Company as at
the close of business on the last Business Day prior to Completion, together in
each case with a reconciliation statement prepared by the Vendors to show the
position at Completion (listing unpresented cheques drawn or received by the
Company and standing orders payable since the date of such bank statements);
8.1.9 (at the Property) all papers, books, records, keys, credit cards
and other property (if any) of the Company which are in the possession or under
the control of the Vendors, any other person who resigns as an officer of the
Company in accordance with this clause 8 or any person connected with them;
8.1.10 the Lock-Up Agreement and the Registration Rights Agreement
duly executed by the Vendors
7.1.11 duly executed powers of attorney regarding the rights attaching
to the Shares in the agreed terms; and
8.1.12 the Disclosure Letter duly executed by the Vendors' Solicitors
8.2 each Vendor will :-
8.2.1 repay, and will procure that any spouse or child of such Vendor
or any company ("controlled company") of which such Vendor (and/or any such
spouse or child) has control (as defined in section 840 Income and Corporation
Taxes Act 1988) will repay, all amounts owed by him, her or it to the Company,
whether due for payment or not;
8.2.2 deliver to the Purchaser a deed in the agreed terms
acknowledging that neither such Vendor nor any such spouse, child or controlled
company has any claim against the Company and that there is no agreement or
arrangements under which the Company has or could have any actual, contingent or
prospective obligation (including, but not limited to, any obligation under any
guarantee entered into by the Company) to or in respect of any of them; and
8.2.3 in respect of any such agreement or arrangement as is referred
to in clause 8.2.2 which previously existed deliver to the Purchaser evidence of
the release or termination of it in form satisfactory to the Purchaser;
-13-
8.3 the Vendors will procure that duly convened meetings are held at
which:-
8.3.1 the transfers referred to in clause 8 .1 (subject to stamping if
not previously effected) are approved for registration in the books of the
Company;
8.3.2 the resignations variously specified in clause 8.1 are accepted
by the Company;
8.3.3 Xxxx Xxxxxxxxx, Xxxxxx Xxxxxxxxx and Xxxx Xxxxxxx are appointed
as additional directors of the Company (subject to any maximum number of
directors imposed by the relevant articles of association), and Xxxxx Xxxxxxxxx
is appointed as secretary of the Company;
8.3.4 Ernst & Young are appointed as auditors of the Company; and
8.4 the Managers will enter into the Employment Agreements with the Company
in the agreed terms;
8.5 the Purchaser will:-
8.5.1 pay the Consideration payable under clause 3.1.1
8.5.2 duly allot and issue the Consideration Shares to the Vendors
8.5.3 deliver to the Vendors' solicitors a certified copy of the
resolution of the board of the Purchaser issuing the Consideration Shares and
the stock certificates for the Consideration Shares
8.5.4 the Lock-Up Agreement and the Registration Rights Agreement
duly executed by the Purchaser, the Employment Agreements duly executed by
the Company
8.5.5 a deed of guarantee duly executed by the Purchaser in respect of
each of the Managers guaranteeing (inter alia) the obligations of the Company
pursuant to the Employment Agreements
[8.5.6 letters concerning the share options to be granted to the
Vendors by the Purchaser]
8.6 a letter shall be produced from HSBC Bank confirming that each of the
Managers shall be released from the terms of their personal guarantees to HSBC
Bank
-14-
9. ANNOUNCEMENTS
No announcement concerning the transactions contemplated by this Agreement
or any matter ancillary to it and no disclosure of the terms of this Agreement
will (save as required by law or the regulations of NASDAQ) be made by the
Vendors or the Company except with the prior written approval of the Purchaser
10. COSTS
10.1 Each party to this Agreement will bear such party's own costs and
expenses relating to the preparation and completion of this Agreement, except
where otherwise expressly stated
10.2 The Vendors shall procure that no claim or account (for fees brokerage
commission disbursement or otherwise) in respect of the Vendors is submitted to
the Company by any broker or adviser who are or have been advisers to or brokers
for any of them or any Group Member and the Vendors hereby indemnify the
Purchaser accordingly
11. INTEREST
If any Warrantor becomes liable to pay the Purchaser any sum pursuant to
this Agreement, whether a liquidated sum or by way of damages or otherwise such
Warrantor will be liable to pay interest on such sum from the due date for
payment at the annual rate of 2 per cent above the base lending rate from time
to time of National Westminster Bank plc, accruing on a daily basis until
payment is made, whether before or after any judgment
12. NOTICES
12.1 Any demand, notice or other communication to be given or made under or
in connection with this Agreement shall be in writing
12.2 Any such demand, notice or other communication shall be addressed as
provided in this clause 12and if so addressed will be deemed to have been duly
given or made as follows :-
12.2.1 if sent by prepaid first class post, on the second Business Day
after the date of posting; or
12.2.2 if delivered by hand, upon delivery at the address provided for
in this clause 12, unless such delivery occurs on a day which is not a Business
Day or after 4 p.m. on a Business Day, in which case it will be deemed to have
been given or made at 9 a.m. on the next Business Day
12.3 Any such demand, notice or other communication shall be addressed
(subject as provided in this clause 12) to the recipient at the recipient's
address stated in this Agreement or
-15-
at such other address as may from time to time be notified in writing by
the recipient to the sender as being the recipient's address for service,
provided however that in the case of a company it may instead (at the option of
the sender) be addressed to its registered office for the time being
12.4 Any such demand, notice or other communication, and any service
of process, pleadings or similar documents relating to any proceeding, suit or
action arising out of or in connection with this Agreement, will be validly
given or made to the Vendors if given or made to the Vendors' Solicitors
12.5 Any demand, notice or other communication will be deemed to have
been validly given if given to the personal representatives of a deceased
Vendor, notwithstanding that no grant of representation has been made in respect
of such Vendor's estate, if the notice is addressed either :-
12.5.1 to the deceased Vendor by name or
12.5.2 to the deceased Vendor's personal representatives by title
at the Vendor's address in accordance with clause 12.3 or at such other address
as may have been notified by them in writing to the sender as being their
address for service
and is otherwise served in accordance with the foregoing provisions
13. GENERAL
13.1 This Agreement will be binding on and will enure for the benefit of
each party's successors, assigns and personal representatives (as the case may
be)
13.2 Except insofar as the same have been fully performed at Completion,
each of the agreements, covenants, obligations, warranties, indemnities and
undertakings contained in this Agreement will continue in full force and effect
notwithstanding Completion
13.3 The parties agree that they will do all such acts and things and
execute all such documents as may be required on or subsequent to Completion to
vest in the Purchaser legal and beneficial ownership of the Shares in accordance
with this Agreement and otherwise to give effect to its terms
13.4 Failure or delay by any party in exercising any right or remedy under
this Agreement will not in any circumstances operate as a waiver of it, nor will
any single or partial exercise of any right or remedy in any circumstances
preclude any other or further exercise of it or the exercise of any other right
or remedy
-16-
13.5 Any waiver of any breach of, or any default under, any of the terms of
this Agreement will not be deemed a waiver of any subsequent breach or default
and will in no way affect the other terms of this Agreement
13.6 The Purchaser may release or compromise the liability of, or grant
time or any other indulgence to, any person who is a party to this Agreement
without in any way prejudicing or affecting the liability (whether joint and
several or otherwise) of any other person who is a party to this Agreement
13.7 In the event of any claim being made against the Warrantors under the
Warranties relating to Taxation (as defined in Schedule 5) or Part II of
Schedule 5, the Warrantors shall not plead against such claim the Xxxxxxx xx
Xxxxxxxxxx Xxx 0000 or any other statute (present or future) directly or
indirectly consolidating, extending, replacing or re-enacting the same, or any
other rule of law relating to limitation of time in which an action can be
brought or claim made; provided that this clause 13.7 is without prejudice to
any express provision of this Agreement regarding time limits for notifying or
making claims
13.8 The headings to the clauses of this Agreement and to the paragraphs of
the Schedules (save for the headings in Schedules 1, 2 and 3) will not affect
its construction
13.9 The rights and remedies expressly provided for by this Agreement will
not exclude any rights or remedies provided by law
13.10 This Agreement may be executed in any number of counterparts, and by
the parties on separate counterparts, each of which so executed and delivered
will be an original, but all the counterparts will together constitute one and
the same agreement
13.11 The formation, existence, construction, performance, validity and all
aspects whatsoever of this Agreement or of any term of this Agreement shall be
governed by English law. The English Courts shall have jurisdiction to settle
any disputes which may arise out of or in connection with this Agreement. The
parties agree to submit to the said jurisdiction
13.12 This Agreement contains the entire agreement and understanding
between the Purchaser and the Vendors concerning the transactions contemplated
by this Agreement. The Purchaser irrevocably and unconditionally waives any
right it may have to claim damages for any misrepresentation not contained in
this Agreement or breach of any warranty not contained in this Agreement unless
such representation or warranty was made fraudulently
-17-
SCHEDULE 1
The Vendors
Name and address Number and class of Amount of Number of
Shares to be sold Consideration Consideration
payable in cash () Shares
Xxxxxxx Xxxxxx Xxxxxxx 450 'C' Ordinary - 7,305
West Cottage, Best Beech Shares of BP0.10 each
Hill, Wandhurst, East
Sussex, TN5 6JR
Xxxxxx Xxxx Langelot
Price 1,120 'C' Ordinary - 18,182
Braemer Shares of BP0.10 each
Xxxxxxxxx Xxxx
Xxxxxxxxxx
Xxxxxx XX00 0XX
Xxxxx Xxxxxxx Street 1,810 'C' Ordinary - 29,383
Windrush, 26 Linksway, Shares of BP0.10 each
Xxxxx, Xxxxxxx, Xxxxxxxx
XX0 0XX
Xxxx Xxxxxxxxxx Xxxxx 760'C' Ordinary - 12,338
00 Xxxxxxxxx Xxxx, Xxxxxx Shares of BP0.10 each
XX00 0XX
Ian Xxxxxxx Xxxxxx XxXxxxx 620 'A' Ordinary - 10,065
00 Xxxxxxxxxxxxx Xxxx, Shares of BP0.10 each
Xxxxxx, XX00 0XX
Xxx Xxxxxxx Wiper 450 'C' Ordinary - 7,305
Xxxxxx House, Shares of BP0.10 each
Xxxxxx Xxxx
Xxxxxxxx, Xxxxxx
Xxxxx XX0 0XX
-18-
Xxxxxx Xxxx Xxxxxx 450 'C' Ordinary - 7,305
The Conifers, Old Saw Mill, Shares of BP0.10 each
Xxxxxxx, Xxxxxxx,
Xxxxxxxxxxxxxx, XX00 0XX
Xxxxx Xxxxxx 450 'C' Ordinary - 7,305
000 Xxxxx Xxx, Shares of BP0.10 each
Gloucester, XX0 0XX
Xxxx Xxxx Xxxxxxx 9140 'B' Ordinary BP39,714 148,377
29Downside Road, Shares of BP0.10 each
Xxxxxxxxxx, Xxxxxx,
XX0 0XX
Xxxxx Xxxxxxxx Xxxxx 450 'C' Ordinary - 7,305
Xxxxxx House, Shares of BP0.10 each
Xxxxxx Xxxx
Xxxxxxxx, Xxxxxx
Xxxxx XX0 0XX
Xxxxxx Darrant 100 'C' Ordinary - 1,623
[41-43 Stoke Nevington Shares of BP0.10 each
Xxxxxx Xxxx
Xxxxxx X00 0XX
Court Services Limited 26,200 'A' Ordinary BP116,536 425,325
Heritage Court Shares of BP0.10 each
00 Xxxxx Xxxxxx (being Bearer Shares)
Xxxxxxx
Isle of Man IM99 1HN
As trustees of the XxXxxxx Settlement
-19-
SCHEDULE 2
Details of the Company
Name of Company : JUNCTION 15 LIMITED
Registered number : 3113286
Registered office : 00 Xxxxxx Xxxxxx
Xxxxxx
X0X 0XX
Date of incorporation : 13 October 1995
Place of incorporation : England
Status of company : private limited company
Authorised share capital : BP1,000,000 divided into 100,000 'A'
Ordinary shares of BP0.10 each, 100,000 'B'
Ordinary shares of BP0.10 each, 100,000 'C'
Ordinary shares of BP0.10 each and 700,000
Ordinary shares of BP0.10 each
Issued share capital : BP4,200 divided into 26820 'A' Ordinary
shares of BP0.10p each, 9140 'B' Ordinary
shares of BP0.10 each and 6040 'C' Ordinary
shares of BP0.10 each
Directors' full names : Ian Xxxxxxx Xxxxxx XxXxxxx Xxxx Xxxx Xxxxxxx
Secretary's full name : Xxxxxx Registrars Limited
Accounting reference date : 31 December
Auditors : Silver Xxxxxx
Bankers : HSBC Bank plc
Description of business : A general commercial company
-20-
Status : The Company is not and has not been at any
time in the last 10 years a Company to which
the City Code on Takeovers and Mergers
applies
-21-
SCHEDULE 3
THE PROPERTY
Short particulars of the Property
(stating whether freehold or leasehold;
in the case of leasehold, giving brief
details of the lease; and including short
particulars of any tenancy or licence
affecting the title) Title holder Use
-------------------- ------------ ---
Leasehold property known as The Company Offices
Xxxx 0, 00 Xxxxxxxx Xxxx, Xxxxxx, XX00
held under a lease dated 11 January 1999
made between Thames Housing Association
Limited (1) the Company (2) for a term of
three years from 4 January 1999 to
3 January 2002
-22-
SCHEDULE 4
NON-TAXATION WARRANTIES
1. INTERPRETATION
In this Schedule 4 the following expressions have the following meanings :-
Expression Meaning
---------- -------
"the Accounting Date" 31 December 1999
"the Accounts" The audited accounts of the Company for
the financial year which ended on the
Accounting Date, comprising a balance
sheet, a profit and loss account, notes
and directors' and auditors' reports
"Contract" Any agreement, arrangement or under-
standing whether legally binding or
not
"the Environmental Legislation" All statutes subordinate legislation
regulations codes of practice guidance
notes and the like from time to time
in force on or before Completion
concerning the protection of human
health or the environment or the
conditions of the work place or the
generation transportation storage
treatment or disposal of Hazardous
Items including in particular EPA
1990, Environment Xxx 0000, Water
Resources Xxx 0000 and Health and
Safety at Work etc Xxx 0000 and all
subordinate legislation regulations
codes of practice and guidance
notes made thereunder
"EPA 1990" Environmental Protection Xxx 0000
"Hazardous Items" Any waste (as defined in EPA 1990) of
any kind noise vibration smell fumes
smoke soot ash dust grit pollution
chemicals leachate petroleum products
ground water noxious radioactive
inflammable explosive dangerous or
offensive gasses or materials and
any other
-23-
substances of whatever nature which may
cause harm to the health of living
organisms or to the environment or to
public health or welfare "Intellectual
Property Rights"Patents, trade marks,
registered designs, design rights,
copyright, know how and all other
intellectual property (of whatever
nature) in any jurisdiction and any
applications for the same
"Stock" Stocks (as defined in Statement of
Standard Accounting Practice No.9
adopted by the Accounting Standards
Board) of the Company
2. SCHEDULES 1 & 2; CAPITAL
2.1 The information contained in Schedules 1 and 2 is complete and
accurate in all respects
2.2 The shares of the Company are in issue fully paid and are beneficially
owned and registered as set out in Schedules 1 and 2 free from any third party
right
2.3 No Contract has been entered into which requires or may require the
Company to allot or issue any share or loan capital
2.4 The Company has no interest in the share capital of any body corporate
3. INFORMATION SUPPLIED TO PURCHASER
3.1 The information given in the Disclosure Letter is complete and accurate
in all material respects and is not misleading because of any omission
3.2 All information contained in any document or written communication
supplied to the Purchaser or any of its advisers by or on behalf of the Vendors
or the Company in the course of the negotiations leading to the execution of
this Agreement is complete and accurate in all material respects and is not
misleading because of any omission or ambiguity
4. ACCOUNTS AND RECORDS
4.1 The Accounts :-
4.1.1 comply with the requirements of the Act and have been prepared
in accordance with all applicable accounting standards (as that term is defined
in section 256 of the Act) and (to the extent that no such accounting standards
are applicable) with the accounting
-24-
principles and practices of UK GAAP 4.1.2 have been prepared on bases and
principles which are consistent with those used in the preparation of the
audited statutory accounts of the Company for the three financial years
immediately preceding that which ended on the Accounting Date
4.1.3 show a true and fair view of the assets and liabilities
(including contingent, unquantified and disputed liabilities) of the Company and
of the state of affairs of the Company as at the Accounting Date and of the
results of the Company for the financial year ended on that date, and
4.1.4 are not affected (except as disclosed in the Accounts) by any
extraordinary or exceptional item
4.2 The accounting records of the Company are up to date and contain
complete and accurate details of all transactions of the Company and comply with
the provisions of sections 221 and 222 of the Act
5. UNENCUMBERED TITLE
Each asset reflected in the Accounts (save for current assets disposed of
by the Company in the ordinary course of its business since the Accounting Date)
and each asset treated as an asset of the Company and/or used by the Company:-
5.1 is in the legal and beneficial ownership of the Company, free from any
third party right and from any Contract to grant the same
5.2 is situated at the Property, and
5.3 is not to any extent surplus to requirements
6. ARRANGEMENTS INVOLVING THIRD PARTIES
No substantial part of the Company's activities are operated under the
agreement or consent of a third party, nor is there any agreement (whether or
not in respect of Intellectual Property Rights) which restricts the manner or
fields in which the activities of the Company have been operated or in which the
Purchaser may operate the Company's activities following Completion
7. DEBT FACTORING
The Company has not factored or discounted any debt or agreed to do so
8. DEBTORS
-25-
All of the debts which are reflected in the Accounts as owing to the
Company (apart from bad and doubtful debts to the extent to which they have been
provided for in the Accounts) or which have subsequently been recorded in the
books of the Company have realised or will realise in the normal course of
collection and within three months of Completion their full value as included in
the Accounts or in the books of the Company, and no such debt or any part of it
has been outstanding for more than two months from its due date for payment
9. PLANT ETC
The plant and machinery, vehicles, fixtures and fittings, furniture, tools
and other equipment used in connection with the business of the Company are in a
good and safe state of repair and condition and satisfactory working order
10. PROPERTY
10.1 The Company is not in occupation of or entitled to any estate or
interest in any land or premises other than the Property
10.2 The Warrantors are not aware of any adverse matters affecting the
Property which may cause loss or damage to the Company
11. INTELLECTUAL PROPERTY RIGHTS
11.1 Validity
11.1.1 The Disclosure Letter contains true, complete and accurate
lists of all Intellectual Property Rights registered or sought to be registered
in any jurisdiction which are held or beneficially owned by the Company. The
Company is the sole legal owner of such Intellectual Property Rights which are
all Intellectual Property Rights required in the operation of the business of
the Company as carried on at the date hereof.
11.1.2 So far as the Warrantors are aware no act has been done or
omitted to be done and no event has occurred or is likely to occur which may
render any of such Intellectual Property Rights subject to revocation,
compulsory licence, cancellation or amendment or may prevent the grant or
registration of a valid Intellectual Property Right pursuant to a pending
application.
11.2 Charges
The Intellectual Property Rights which are owned or otherwise used by the
Company are not subject to any security interest (of whatever nature).
11.3 Infringement
-26-
11.3.1 None of the operations of the Company infringe, any rights held
by any third party or involve the unauthorised use of confidential information
disclosed to the Company in circumstances which might entitle a third party to
make a claim against the Company.
11.3.2 No claim has been made by any third party which alleges any
infringing act or process which would fall within sub-clause 11.3.1 above or
which otherwise disputes the right of the Company to use any Intellectual
Property Rights relating to its business and the Warrantors are not aware of any
circumstances (including any act or omission to act) likely to give rise to such
a claim
11.3.3 There exists no actual or threatened infringement by any third
party of any Intellectual Property Rights held or used by the Company (including
misuse of confidential information) or any event likely to constitute such an
infringement nor has the Company acquiesced in the unauthorised use by any third
party of any such Intellectual Property Rights.
11.4 Employee Claims
No claims have been made or threatened by employees or ex-employees to
receive any payment or right in respect of any Intellectual Property Rights used
by the Company.
11.4 Intellectual Property Licences
11.4.1 Details of all licences granted to or by the Company in respect
of Intellectual Property Rights are set out in the Disclosure Letter including
details of any limit as to time or right of termination affecting the use of the
Intellectual Property Right.
11.4.2 The Company is not in default under any licence, sub-licence or
assignment granted to it in respect of any Intellectual Property Rights used by
the Company.
11.6 Loss of Rights
No Intellectual Property Rights owned or used by the Company and no licence
of Intellectual Property Rights of which the Company has the benefit will be
lost, or rendered liable to any right of termination or cessation by any third
party, by virtue of the performance of the terms of this Agreement .
11.7 Confidential Information
Where information of a confidential nature has been developed or acquired
by a Company for the purposes of its business in the two (2) year period prior
to the date of this Agreement, such information (except insofar as it has fallen
into the public domain through no fault of a member of the Company) has been
kept strictly confidential and has not been disclosed otherwise than subject to
an obligation of confidentiality being imposed on the person to whom the
information was
-27-
disclosed. The Warrantors are not aware of any breach of such
confidentiality obligations by any third party.
11.8 Records and Software
11.8.1 All the accounting records and systems (including but not
limited to computerised accounting systems) of the Company are recorded, stored,
maintained or operated or otherwise held by a Company and are not wholly or
partly dependent on any facilities or systems which are not under the exclusive
ownership or control of the Company.
11.8.2 The Company is licensed to use all software necessary to enable
it to continue to use its computerised records for the foreseeable future in the
same manner in which they have been used prior to the date of this Agreement and
does not share any user rights in respect of such software with any other
person.
11.8.3 All software and hardware used by the Company is covered by a
maintenance agreement which, so far as the Warrantors are aware, is fully
enforceable and the terms of all such maintenance agreements are contained in
the Disclosure Letter;
11.8.4 Neither the hardware nor the software owned and/or used by the
Company has been affected by any defects or faults which have caused any
material interruption to the Company's business at any time during the 12 months
prior to the date of this Agreement;
11.8.5 So far as the Warrantors are aware the software and hardware
used by each Company in the carrying on of its business permits it to do so in a
proper and efficient manner, is fully functional and there is no reason why such
software and hardware should require modification, replacement or enhancement to
permit such Company to carry out its business in a proper and efficient manner
over the next 12 months.
11.9 Data Protection
The Company has not received any notice and has not been engaged in any
correspondence with the Data Protection Registrar relating directly or
indirectly to the activities of the Company or the Company and its compliance
with the Data Protection Xxx 0000 or the Data Protection Xxx 0000 (the "DATA
PROTECTION ACTS"). Each Company has taken all necessary steps to comply with and
is in full compliance with the provisions of the Data Protection Acts.
11.10 Year 2000
11.10.1 To the best of the Warrantors' knowledge and belief each item
of equipment and software program used by the Company in the course of its
business (a "COMPANY SYSTEM"):
-28-
11.10.1.1 has been produced or amended in a manner which ensures that
a change of, reference to or use of a date after 31 December 1999 in the
operation of that Company System, whether alone or in conjunction with each
other Company System, will not have a material adverse effect on, nor give rise
to an increased inconvenience in, the operation of that Company System;
11.10.1.2 which exchanges date information with any item of equipment
and software program under the control of a third party (a "THIRD PARTY SYSTEM")
in the course of such Company member's business so exchanges in a manner which
ensures that the inclusion of a date or dates after 31 December 1999 in the date
consistent, clearly defined and apparent to the user.
12. EMPLOYEES
12.1 Full particulars of the identities, date of birth, date of
commencement of employment (or appointment to office) and terms and conditions
of employment (including remuneration and any bonus, commission, share
incentives or profit sharing arrangement) of all the employees and officers of
the Company are enclosed with the Disclosure Letter
12.2 The terms of the engagements of all directors and employees of the
Company are such that they may be terminated at not more than the minimum period
of notice required by statute and without any liability for payment of
compensation damages or otherwise other than payments provided for by employment
legislation
12.3 No change has been made since the Accounting Date in the terms of
employment of any person currently employed by the Company, and the Company is
not party to any Contract to make any such change
12.4 There are no amounts owing to any present or former officers or
employees of the Company and none of them is entitled to accrued holiday pay
other than in respect of the Company's current holiday year
12.5 No employee has been engaged by the Company since the Accounting Date
and no person employed by the Company at or since the Accounting Date has
ceased, or given or received notice to cease, to be so employed
12.6 No dispute has arisen between the Company and a material number or
category of its employees and so far as the Warrantors are aware there are no
present circumstances known which are likely to give rise to any such dispute
and there is no contract agreement or arrangement between the Company and any
trade union or other body representing employees of the Company
12.7 The Company has maintained adequate and suitable records regarding the
service of each of its employees and complied with all agreements for the time
being relating to them
-29-
13. PENSIONS
13.1 There is not in existence, and no proposal has been announced to
establish, any retirement, death or disability benefit scheme obligation or
arrangement (whether legally enforceable or not) for the benefit of any present
or former officers or employees of the Company or their dependants
13.2 No undertaking or assurance has been given as to the continuance or
introduction, or increase or improvement of any pension rights or entitlements
which the Company would be required to implement in accordance with good
industrial relations practice, whether or not there is any legal obligation to
do so
14. INSURANCE
14.1 So far as the Warrantors are aware all assets of the Company of an
insurable nature are, and have at all material times been, insured in amounts
equal to their full replacement or reinstatement value against fire and other
risks normally insured against by persons carrying on the same classes of
business as the Company. The Company is, and has at all material times been,
adequately covered against employer's liability, public liability, product
liability and professional indemnity liability
14.2 All premiums due in relation to the Company's insurances have been
paid, and nothing has been done or omitted to be done which would make any
policy of insurance of the Company void or voidable or which is likely to result
in an increase in premium or which would release any insurer from any of its
obligations under any policy of insurance of the Company
14.3 There is no insurance claim pending or outstanding by or against the
Company and, as far as the Vendors are aware, there are no circumstances likely
to give rise to any such claim
14.4 All insurances effected by the Company are renewable annually and not
on any longer term contract
14.5 Full particulars of all the Company's insurances are given in the
Disclosure Letter
15. FINANCIAL AND WORKING CAPITAL
15.1 Full and accurate details of all overdrafts, loans or other financial
facilities outstanding or available to the Company are contained in the
Disclosure Letter, and so far as the Warrantors are aware no person who provides
any such facility has given any indication that it may be withdrawn or its terms
altered
-30-
15.2 The details contained in the Disclosure Letter of the credit or debit
balances on all the bank or deposit accounts of the Company were correct at the
date stated in the Disclosure Letter and since such date there have been no
payments out of any such accounts except for routine payments and the balances
on such accounts are not now substantially different from the balances shown in
the Disclosure Letter
15.3 No person other than the Company has given any guarantee of or
security for any overdraft loan or loan facility granted to the Company
15.4 The Company has, since the Accounting Date, paid its creditors in
accordance with their respective credit terms
15.5 Having regard to existing bank and other facilities the Company has
sufficient working capital to enable it to perform in accordance with their
terms all Contracts which have been entered into by it
16. MATERIAL CONTRACTS
The Company is not, and has not since the Accounting Date been, a party to
or subject to any Contract which:-
16.1 involves agency, distributorship, franchising, marketing rights,
information sharing, manufacturing rights, servicing or maintenance
16.2 involves partnership, joint venture, consortium or similar
arrangements
16.3 involves hire purchase, conditional sale, credit sale, leasing, hiring
or similar arrangements
16.4 commits the Company to capital expenditure
16.5 is incapable of complete performance in accordance with its terms
within six months after the dat e on which it was entered into or at a cost to
the Company in excess of $5,000
16.6 cannot readily be fulfilled or performed by the Company on time and
without undue or unusual expenditure of money or effort
16.7 is for the supply of goods and/or services by or to the Company on
terms under which retrospective or future discounts, price reductions or other
financial incentives are given by or to the Company dependent on the level of
purchases or any other factor
-31-
16.8 involves warranties, indemnities or representations given in
connection with a sale of shares or assets, or is a guarantee or indemnity in
respect of the obligations of a third party, under which any liability or
contingent liability is outstanding
16.9 involves the Company in any residual liability in respect of any
property at any time assigned or otherwise disposed of by it
16.10 is not on arm's length terms or is in any way otherwise than in the
ordinary and proper course of the Company's business
16.11 any other party shall by reason of any change in the beneficial
ownership of the Shares be entitled to terminate earlier than it would otherwise
have been entitled to do so or which restricts the Company's ability to conduct
business
16.12 a connected person (as defined by section 346 of the Act) or an
employee is a party to or has an interest in save for the contracts of
employment disclosed
17. OTHER BUSINESS MATTERS
17.1 During the last 12 months there has been no substantial change in the
basis or terms on which any person is prepared to do business with the Company
(apart from normal price changes), and no substantial customer or supplier of
the Company has ceased or substantially reduced its business with the Company,
and no indication has been received by the Company or any of the Vendors that
there will or may be any such change, cessation or reduction
17.2 Save for any guarantee or warranty implied by law the Company has not
given any guarantee or warranty or made any representation in respect of goods
sold or contracted to be sold by it and has not accepted any liability or
obligation to service repair maintain take back or otherwise do or not do
anything in respect of any goods that would apply after the goods have been
delivered by it
17.3 A copy of the Company's current standard conditions of trading are
enclosed with the Disclosure Letter
17.4 The Company is not a party to any consultancy or management agreement
17.5 The Company does not use on its letterhead books circulars
advertisements or vehicles nor otherwise carry on business under any name other
than its corporate name
18. COMPANY LAW MATTERS AND GENERAL COMPLIANCE
18.1 Compliance has been made with all legal requirements in connection
with the formation of the Company and all issues and grants of shares or other
securities of the Company
-32-
18.2 The copy of the memorandum and articles of association of the Company
enclosed with the Disclosure Letter is true and complete
18.3 All returns, particulars, resolutions and other documents required to
be filed with or delivered to the Registrar of Companies by the Company have
been properly filed, and none has been so filed or delivered within 14 days of
the date of this Agreement
18.4 The statutory books (including all registers and minute books) of the
Company have been properly kept
18.5 The Company has conducted its business in accordance with all relevant
applicable laws and regulations of the United Kingdom and any relevant foreign
country
18.6 So far as the Warrantors are aware, no agreement, practice or
arrangement to which the Company is party is or ought to be or ought to have
been registered under, or infringes, the Treaty of Rome or any employment,
competition, anti-restrictive trade practice or consumer protection legislation
applicable in the United Kingdom or elsewhere
18.7 So far as the Warrantors are aware, there is not pending, or in
existence, any investigation or enquiry by, or on behalf of, any governmental or
other body in respect of the affairs of the Company
18.8 The Company has obtained all licences authorisations and consents
(private or statutory) required for the carrying on of its business or in
respect of any activities processes and substances from time to time carried on
held or stored by it and copies of the same are enclosed with the Disclosure
Letter
18.9 All such licences authorisations and consents are in full force and
effect, there are no circumstances which may give rise to them being modified,
suspended or revoked or not renewed in the ordinary course and all conditions
attached to such licences authorisations and consents have in all material
respects been complied with
19. ENVIRONMENTAL LEGISLATION
The Company has at all times complied with the Environmental Legislation
and there is nothing in on over or under the Property the presence existence or
condition of which constitutes a breach of the Environmental Legislation nor is
any manufacturing storage generation servicing treatment disposal or other
process carried on at the Property in such a way as to amount to a breach of the
same
-33-
20. LITIGATION
20.1 Neither the Company nor any person for whose acts or defaults it may
be liable is engaged in any capacity (whether as claimant or defendant or
otherwise) in any litigation, arbitration, prosecution or other legal
proceedings (whether civil or criminal) or in any proceedings or hearing before
any statutory or Governmental body, tribunal, department, board or agency
20.2 No such proceedings are so far as the Company is aware pending or
threatened and the Company is not aware of any facts or circumstances likely to
give rise to any such proceedings
20.3 There is no unsatisfied judgment or unfulfilled order outstanding
against the Company and the Company is not party to any undertaking or assurance
given to a court, tribunal or any other person in connection with the
determination or settlement of any claim or proceedings
21. DEFAULT
21.1 The Company has not sold, supplied or provided any product or service
which did not, does not or will not comply fully with all applicable laws,
regulations or standards or which was, is or will be faulty, defective or
dangerous or not in accordance with any representation or contractual term,
express or implied, relating to it
21.2 The Company is not in breach of any Contract to which it is a party,
and no other party to any such Contract is in breach of it
22. EVENTS SINCE THE ACCOUNTING DATE
Since the Accounting Date :-
22.1 there has been no reduction in the net asset value of the Company
except in the ordinary course of business determined in accordance with the same
accounting policies as those applied in the Accounts (and valuing no asset at a
figure greater than the value attributed to it in the Accounts or, in the case
of any asset acquired since the Accounting Date, greater than cost)
22.2 the Company has not acquired, or agreed to acquire, any single asset
having a value in excess of 2000 or assets having an aggregate value in excess
of BP5000
22.3 the Company has not disposed of, or agreed to dispose of, any asset or
incurred, or agreed to incur, any debts or liability (including contingent
liabilities) other than in the ordinary course of business
22.4 the trade and business of the Company has been carried on in the
ordinary and normal course
-34-
22.5 there has been no material adverse change in the financial or trading
position or prospects of the Company
22.6 no dividend or other payment which is, or could be treated as, a
distribution for the purposes of Part VI ICTA or section 418 ICTA has been
declared, paid or made by the Company
-35-
SCHEDULE 5
TAXATION
PART I - INTERPRETATION
1. Interpretation
In this Schedule 5 :-
"Accounts" and "Accounting shall have the meanings given in Schedule
Date 4
"Actual Liability to Taxation" Any liability of the Company to make an
actual payment of (or of an amount in
respect of) Taxation
"Bearer Shares" The 26,200 "A" Ordinary Shares of BP0.10 each in the
capital of the Company being bearer
shares or bearer share warrants
"Event" Any event whatsoever including (without
limitation) any transaction, action
or omission (whether or not the Company
is party thereto), the earning, accrual
or receipt of any income, profits or
gains, the declaration, payment or
making of any dividend or other
distribution and Completion
"ICTA" Income and Corporation Taxes Act 1988
"Liability to Taxation" (a) Any Actual Liability to Taxation
(and, for the purposes of paragraph
2.1, the amount of such a Liability
to Taxation shall be the amount of
the actual payment of Taxation or the
payment in respect of Taxation which
the Company is liable to make); or
(b) The loss by the Company (in
whole or in part) of any Purchaser's
Relief (and, for the purposes of
paragraph 2.1, if the Purchaser's
Relief lost was a deduction
-36-
from or a set-off against Taxation,
the amount of such a Liability to
Taxation shall be the amount of the
relief lost, or, if the Purchaser's
Relief lost was a deduction from or
set-off against income profits or
gains, the amount of such a Liability
to Taxation shall be the amount of
Taxation which would have been
saved but for the loss of the
Purchaser's Relief on the basis of
rates of Taxation current at the date
of the loss); or
(c) The set-off of any Purchaser's
Relief against any Actual Liability
to Taxation in respect of which the
Vendors would, but for such set-off,
have been liable under paragraph 2.1,
or against any income, profits or
gains of the Company earned, accrued
or received on or before Completion
or in respect of a period ended on or
before Completion in circumstances
where, but for such set-off, the
Company would have suffered an Actual
Liability to Taxation in respect of
which the Vendors would have been
liable under paragraph 2.1 (and, for
the purposes of paragraph 2.1 the
amount of such a Liability to
Taxation shall be the amount of the
Purchaser's Relief set-off against an
Actual Liability to Taxation or the
amount of Taxation saved as a result
of the set-off of the Purchaser's
Relief against income, profits or
gains, as the case may be); or
"Purchaser's Relief" Any Relief which:-
(a) was treated as an asset of the
Company in the Accounts; or
(b) was taken into account in
computing any provision for deferred
tax which appears in the Accounts or
would have appeared in the Accounts
but for the presumed availability or
such Purchaser's Relief; or
(c) arises wholly or mainly as a
result of any Event which has
occurred or occurs after the
Accounting Date
-37-
"Relief" Any relief, allowance, exemption,
set-off deduction or credit available
from, against or in relation to
Taxation or in the computation of
income, profits or gains for any
Taxation purpose
"Taxation" Any tax, duty, impost or levy, past
or present, of the United Kingdom or
elsewhere, whether governmental, or
state, provincial, local governmental
or municipal (including without
prejudice to the foregoing
obligations in respect of the Pay As
You Earn system, national insurance
contributions, VAT and stamp duty)
and any fine, penalty, charge or
interest relating to any such tax,
duty impost or levy or to any form
or return required to be submitted
to any competent authority for the
purposes of any such tax duty, impost
or levy
"Taxation Authority" Any taxing or other authority
competent to impose any Liability to
Taxation
"VAT" Value Added Tax
"VATA" Value Added Tax Xxx 0000
PART II - TAX COVENANT
2. TAX COVENANT
2.1 Subject as hereinafter provided the Vendors covenant with the Purchaser
to pay to the Purchaser an amount equal to:-
2.1.1 any Liability to Taxation which has arisen or may arise wholly
or by reason of or in connection with any Event occurring, or
deemed for any Taxation purpose to have occurred, on or before
Completion, whether or not in any such case the Taxation in
question is primarily chargeable against or attributable
wholly or partly to or recoverable wholly or partly from any
other person,
2.1.2 any Liability to Taxation which the Purchaser or the Company is
or may be or become required to pay after Completion arising
on or with respect to the creation conversion or repatriation
by the Purchaser from the Isle of Man of the Bearer Shares after
Completion other than any stamp duty or stamp duty reserve tax
arising solely from the purchase of the Bearer Shares by the
Purchaser pursuant to this Agreement
-38-
2.1.3 any costs, fees or expenses incurred by the Company or the
Purchaser in connection with any Liability to Taxation mentioned
in paragraphs 2.1.1 or 2.1.2 or with any claim by any Taxation
Authority relating to any such Liability to Taxation or with
taking or defending any action under this paragraph 2.1
2.2 The covenant contained in paragraph
2.1 shall not apply in respect of a Liability to Taxation to the
extent to which:-
2.2.1 provision, allowance or reserve for such Liability to Taxation
has been made in the Accounts, or
2.2.2 such Liability to Taxation was discharged on or before the
Accounting Date and the discharge of such Liability to
Taxation was recognised in the Accounts, or
2.2.3 such Liability to Taxation would not have arisen but for any
Event which occurred in the ordinary course of business of
the Company after the Accounting Date and on or before
Completion
2.3 The due date for the making of a payment under this paragraph 2 shall
be the date falling five Business Days after the Purchaser has served
notice on the Vendors demanding such payment.
2.4 All payments by the Vendors under this Part II of this Schedule
5 will be treated as repayments by the Vendors of the
consideration paid for the Shares pursuant to this Agreement, provided
that this paragraph 2.4 will not operate in any way to limit the
liability of the Vendors under this Part II of this Schedule 5
2.5 The Vendors shall not be liable to the Purchaser in respect of any
breach of the covenant contained in paragraph 2.1 unless written
notice of such breach shall be served on any of the Vendors within
seven years of the date hereof
PART III - TAX WARRANTIES
3. RETURNS, DISPUTES AND CLEARANCES
3.1 All notices, returns, computations, registrations and payments
which should have been made by the Company for any Taxation
purpose have been made within the requisite periods and are
up-to-date, correct and on a proper basis and none of them is, or is
likely to be, the subject of any dispute with any Taxation Authority
3.2 The Company is not involved in any dispute with any Taxation
Authority concerning any matter likely to affect in any way the
liability of the Company to Taxation and there are no circumstances
which are likely to give rise to any such dispute
-39-
4. TAXATION CLAIMS, LIABILITIES AND RELIEFS
4.1 The Company has duly and properly made all Taxation claims,
disclaimers, elections and surrenders and given all notices and
consents and done all other things required in respect of Taxation and
all such claims, disclaimers, elections, surrenders, notices, consents
and other things have been accepted as valid by the relevant Taxation
Authorities and none has been revoked or otherwise withdrawn
4.2 The Company is not, and will not become, liable to pay, or
make reimbursement or indemnity in respect of, any Taxation (or
amounts corresponding to any Taxation) payable by or chargeable on or
attributable to any other person, whether in consequence of the
failure by that person to discharge that Taxation within any specified
period or otherwise, where such Taxation relates to a profit, income
or gain, transaction, event, omission or circumstance arising,
occurring or deemed to arise or occur (whether wholly or partly) on or
prior to Completion
5. DISTRIBUTIONS AND PAYMENTS
5.1 The Company has deducted and properly accounted to the
appropriate Taxation Authority for all amounts which it has been
obliged to deduct in respect of Taxation in respect of any dividend or
other distribution, has complied fully with all reporting requirements
relating to all such amounts and has (where required) duly provided
certificates of deduction of tax to the recipients of payments from
which deductions have been made
5.2 The Company has not since the Accounting Date made any
payment to, or provided any benefit for, any present or former
director, employee or officer which is wholly or partially
disallowable as a deduction in computing the profits of the Company
for the purposes of corporation tax, and is under no obligation to
make any such payment or provide such benefit
6. EMPLOYEE BENEFITS
6.1 Without prejudice to the generality of the foregoing the
Company has properly operated the Pay As You Earn system, by making
deductions, as required by the applicable Taxation Statute, from all
payments made, or treated as made, to its directors, employees or
officers or former directors, employees or officers or any persons
required to be treated as such, and accounted to the Inland Revenue
for all Taxation so deducted and for all Taxation chargeable on the
Company on benefits provided for its directors, employees or officers,
or former directors, employees or officers
6.2 The Company has complied fully with all its obligations
relating to Class 1 and Class 1A National Insurance Contributions,
both primary and secondary
-40-
7. TAX AVOIDANCE
The Company has not entered into or been a party to any scheme,
arrangement or transaction designed partly or wholly or containing steps or
stages designed partly or wholly for the purpose of avoiding or deferring
Taxation or reducing a liability to Taxation and in particular, but without
limitation, has not entered into or been a party to any scheme, arrangement
or transaction to which the provisions of any of sections 34 to 37
(inclusive), 56 and 398, 395, 399, 703 to 709 (inclusive), 713, 714, 729 to
737 (inclusive), 770, 775, 776, 779 to 786 (inclusive), 787 and 798 ICTA
could apply
8. VAT: GENERAL
8.1 The Company:-
8.1.1 is duly registered and is a taxable person for the purposes of
VAT and such registration is not subject to any conditions
imposed by or agreed with the Commissioners of Customs
& Excise;
8.1.2 has complied in all respects with all statutory requirements,
orders, provisions, directions or conditions relating to VAT;
8.1.3 maintains complete, correct and up-to-date records for the
purposes of all legislation relating to VAT;
8.1.4 is not in arrears with any payment or returns under
legislation relating to VAT or excise duties, or liable to any
abnormal or non-routine payment of VAT, or any forfeiture or
penalty, or to the operation of any penal provisions;
8.2 All supplies of goods and services made by the Company are
taxable supplies for the purposes of the VATA and the Company has not
been and will not be denied credit for any input tax by reason of the
operation of section 26 VATA or otherwise
9. POST-ACCOUNTING DATE
Since the Accounting Date:-
9.1 no event has occurred which has given rise or will or may
give rise to a Liability to Taxation on the Company in respect of
deemed (as opposed to actual) income, profits or gains or which has
resulted or will or may result in the Company becoming liable to
Taxation directly or primarily chargeable against or attributable to
another person;
9.3 the Company has not entered into any transaction which has
given rise or may give rise to a Liability to Taxation on a chargeable
gain; and
-41-
9.4 no event has occurred as a result of which the Company could
be required to bring a disposal value into account or suffer a
balancing charge for the purposes of capital allowances a withdrawal
of first year allowances or a recovery of excess relief in respect of
capital allowances
SIGNED by A R Xxxxxxx ) /s/ AR Xxxxxxx
in the presence of:- )
Witness's signature: /s/
Name:
Address:
Occupation:
SIGNED by D J L Price ) /s/ DJL Price
in the presence of:- )
Witness's signature: /s/
Name:
Address:
Occupation:
SIGNED by D L Street ) /s/ DL Street
in the presence of:- )
Witness's signature: /s/
Name:
Address:
Occupation:
-42-
SIGNED by X X Xxxxx ) /s/ XX Xxxxx
in the presence of:- )
Witness's signature: /s/
Name:
Address:
Occupation:
SIGNED by I C N XxXxxxx ) /s/ ICN XxXxxxx
in the presence of:- )
Witness's signature: /s/
Name:
Address:
Occupation:
EXECUTED by Court Services Limited ) /s/ GAC Xxxxx
as Trustees of the XxXxxxx Settlement )
acting by:- )
Director
/s/ XX Xxxxx
Director/Secretary
SIGNED by I G Wiper ) /s/ IG Wiper
in the presence of:- )
Witness's signature: /s/
Name:
Address:
-43-
Occupation:
SIGNED by X X Xxxxxx ) /s/ XX Xxxxxx
in the presence of:- )
Witness's signature: /s/
Name:
Address:
Occupation:
SIGNED by L Xxxxxx ) /s/ X. Xxxxxx
in the presence of:- )
Witness's signature: /s/
Name:
Address:
Occupation:
SIGNED by X X Xxxxxxx ) /s/ XX Xxxxxxx
in the presence of:- )
Witness's signature: /s/
Name:
Address:
Occupation:
-44-
SIGNED by X X Xxxxx ) /s/ XX Xxxxx
in the presence of:- )
Witness's signature:
Name: /s/
Address:
Occupation:
SIGNED by A Darrant ) /s/ A. Darrant
in the presence of:- )
Witness's signature:
Name:
Address:
Occupation:
SIGNED by )
for and on behalf of Vizacom, Inc. ) /s/ Xxxx X. Xxxxxxxxx
in the presence of:- )
Witness's signature: /s/
Name:
Address:
-45-
