EXHIBIT 10.43
DATED 28TH MAY 2002
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(1) The Vendors
(2) The Guarantors
(3) IVP Technology Corporation
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A G R E E M E N T
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For the sale and purchase of the entire issued
share capital of Ignition Entertainment Limited
EVERSHEDS
0 Xxxxx Xxxxxxxx Xxxxx
Xxxxxxxxxx
XX0 0XX
Tel: 0000 000 0000
Fax: 0000 000 0000
CONTENTS
Clause Page
1 INTERPRETATION.....................................................2
2 SALE AND PURCHASE..................................................7
3 CONSIDERATION......................................................7
4 EARN-OUT SECURITIES................................................8
5 WARRANTIES........................................................10
6 TAX COVENANT......................................................12
7 LIMITATION OF LIABILITY...........................................14
8 RESTRICTIVE COVENANTS.............................................17
9 COMPLETION........................................................19
10 GUARANTEE.........................................................23
11 ANNOUNCEMENTS.....................................................24
12 COSTS.............................................................24
13 INTEREST..........................................................24
14 NOTICES...........................................................25
15 ORDERLY MARKET....................................................25
16 GENERAL...........................................................25
SCHEDULES
1 Part I - The Vendors..............................................27
1 Part II - Guarantors..............................................27
2 Details of the Company............................................29
2 Details of other Group Members....................................30
3 The Property......................................................32
4 Warranties........................................................33
5 Accounting information............................................36
1
THIS AGREEMENT is made on 28th May 2002
BETWEEN
(1) The persons whose names and addresses are set out in Part I of SCHEDULE
1 ("the Vendors");
(2) The persons whose names and addresses are set out in Part II of SCHEDULE
1 ("the Guarantors") and
(3) IVP TECHNOLOGY CORPORATION (a corporation registered under the laws of
the State of Nevada, USA) whose principal office is at Xxxxx 000-0000
Xxxxxxxxx Xxxxxxxxx Xxxx, Xxxxxxx, Xxxxxxx X0X 0X0 ("the Purchaser")
OPERATIVE PROVISIONS
1. INTERPRETATION
In this Agreement:
1.1 the following expressions have the following meanings unless
inconsistent with the context:
"THE A XXXXXXX AGREEMENT" an asset sale agreement dated on or about
the date of this Agreement made between
(1) Xxxxxx Xxxxxx Xxxxxxx and (2) the
Company relating to the Assets (as
defined therein);
"THE ACCOUNTING INFORMATION" the accounts (if any) and other financial
information listed in SCHEDULE 5
"THE ACQUISITIONS" the business and/or share acquisitions
effected by the Acquisition Agreements or
any of them
"THE ACQUISITION AGREEMENTS" together, the 3R Agreement, the A Xxxxxxx
Agreement, the Alternative Sources
Agreement, the I-Wish Agreement and the
Awesome Assignment
"THE ACT" the Companies Xxx 0000
2
"THE ALTERNATIVE SOURCES an asset sale agreement dated on or
AGREEMENT about the date of this Agreement made
between (1) Alternative Sources Limited
and (2) the Company relating to the
business of a wholesaler of computer
video games carried on by Alternative
Sources Limited as described therein;
"AUDITORS" the auditors for the time being of the
Company
"THE AWESOME ASSIGNMENT" an assignment of worldwide intellectual
property dated on or about the date of
this Agreement and made between Awesome
Developments Limited and 3R Learning
Limited
"BUSINESS(ES)" the business(es) specified in SCHEDULE 5
"BUSINESS DAY" any day (other than Saturday or Sunday)
on which Clearing Banks are open for a
full range of banking transactions
"THE COMPANY" Ignition Entertainment Limited,
registered number 4293817 whose
registered office is at Xxxxxxx Xxxxx,
Xxxxxxxxx Xxxx, Xxxxx XX0 0XX
"COMPLETION" Completion of the sale and purchase in
accordance with CLAUSE 9
"CONSIDERATION" the consideration for the sale of the
Shares as stated in CLAUSE 3.1
"CONSIDERATION SECURITIES" 15,000,000 shares in the Common Stock of
the Purchaser and 3,500,000 Convertible
Preferred Shares of the Purchaser
"CONTRACT" any agreement or commitment whether
legally binding or not
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"CONVERTIBLE PREFERRED the 3,500,000 Convertible Preferred
SHARES Shares of the Purchaser comprised in the
Consideration Securities and the
1,500,000 Convertible Preferred Shares
comprised in the Earn-out Securities,
each such Convertible Preferred Share
being convertible into 10 shares of
Common Stock of the Purchaser and having
the rights and being subject to the
conditions specified by the board of
directors of the Purchaser
"THE DISCLOSURE LETTER" the letter from the Vendors to the
Purchaser qualifying the Warranties in a
form reasonably satisfactory to the
Purchaser to be delivered by the Vendors
to the Purchaser pursuant to CLAUSE 9.7
"EARN-OUT SECURITIES" The 1,500,000 Convertible Preferred
Shares of the Purchaser to be issued
subject to attainment of certain revenue
and profit targets as set out in CLAUSE 4
and to be released pursuant to the Escrow
Agreement
"ESCROW AGREEMENT" The escrow agreement in a form reasonably
satisfactory to the Purchaser to be
delivered by the Vendors to the Purchaser
pursuant to CLAUSE 9.7 and to be entered
into between the Vendors and the
Purchaser and relating to the issue of
the Consideration Securities and the
Earn-out Securities
"EVENT" any event, fact or circumstance
whatsoever, including (but not limited
to) the earning, receipt or accrual of
any income, profits or gains, the sale
and purchase of the Shares pursuant to
this Agreement and Completion
"FINANCE ARRANGEMENT" the agreement in a form reasonably
satisfactory to the Purchaser to be
entered into between the Company and DCD
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Factors, in relation to the commitment of
certain facilities and the issue of the
Potters Securities
"THE GROUP" together the Company and each other
company details of which are set out in
SCHEDULE 2
"GROUP MEMBER" any company which is a member of the
Group and, in the case of any business
acquired by any Group Member, shall
include where the context so admits any
predecessor in that business
"INDEPENDENT ACCOUNTANT" a single independent chartered accountant
or an independent firm of chartered
accountants to be agreed upon between the
Vendors and the Purchaser or (in default
of such agreement) to be selected (at the
instance of either of them) by the
President for the time being of the
Institute of Chartered Accountants in
England and Wales
"INTELLECTUAL PROPERTY patents, trade marks, service marks,
RIGHTS" registered designs, design
rights, copyright, software know-how and
all other intellectual property and any
applications for the same
"THE I-WISH AGREEMENT" an asset sale agreement dated on or about
the date of this Agreement made between
(1) I-Wish (Games) Limited and (2) the
Company relating to the business of a
computer video games developer and
publisher carried on by I-Wish (Games)
Limited as described therein
"LETTER OF INTENT" The letter of intent agreed between the
Purchaser and the Vendors
"PERIOD ONE" the period of 12 months commencing on the
date of Completion
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"PERIOD TWO" the period of 24 months commencing on the
date of Completion
"PERIOD THREE" the period of 36 months commencing on the
date of Completion
"POTTERS SECURITIES" the 5,000,000 shares in the Common Stock
of the Purchaser to be issued to Potters
Limited pursuant to the Finance
Arrangement
"PROFITS" the profits of the Group for a Period
determined in accordance with CLAUSE 4
"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'S SOLICITORS" Eversheds of 0 Xxxxx Xxxxxxxx Xxxxx,
Xxxxxxxxxx XX0 0XX
"THE 3R AGREEMENT" a share purchase agreement dated on or
about the date of this Agreement made
between (1) Xxxxxx Xxxxxx Xxxxxxx and (2)
the Company relating to 3R Learning
Limited;
"RELIEF" any relief, deduction or credit available
from, against or in relation to Taxation
or in the computation for any Taxation
purpose of income, profits or gains
"SEC" the US Securities and Exchange Commission
"THE SHARES" all the issued shares in the capital of
the Company
"TAXATION" (a) any tax, duty, impost or levy of
the United Kingdom or elsewhere
whether national or local; and
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(b) any fine, penalty, surcharge,
interest or other imposition
relating to any tax, duty, impost
or levy or to any account, record,
form, return or computation
required to be kept, preserved,
maintained or submitted for the
purposes of any tax, duty, impost
or levy
"TURNOVER" the gross turnover of the Group for a
Period determined in accordance with
CLAUSE 4
"THE VENDORS' SOLICITORS" Blacks of Hanover House, 00 Xxxxxxxxx
Xxxx, Xxxxx XX0 0XX
"THE WARRANTIES" The warranties set out or referred to in
CLAUSE 5 and SCHEDULE 4;
1.2 references to any statutory provisions will be construed as including
references to any earlier or subsequent statutory provisions in force at
any time prior to Completion which they have, or by which they have
been, directly or indirectly amended or replaced;
1.3 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;
1.4 the Schedules form part of this Agreement and will have the same effect
as if in the body of this Agreement;
1.5 the headings to clauses and paragraphs (save for headings in SCHEDULES
1, 2 and 3) will not affect its construction; and
1.6 references to documents being in "agreed terms" or in the "agreed form"
mean in the form initialled by or on behalf of the parties hereto on
today's date.
2. SALE AND PURCHASE
2.1 Each of the Vendors will sell with full title guarantee, and the
Purchaser will buy, the number of the Shares specified opposite that
Vendor's name in SCHEDULE 1.
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2.2 Each of the Shares will be sold and bought free from any third party
right, and with all rights attached or accruing to it including all
rights to any dividends or other distributions paid after the execution
of this Agreement.
2.3 Each of the Vendors waives any rights of pre-emption over any of the
Shares.
2.4 The Purchaser will not be obliged to purchase any of the Shares unless
the purchase of all the Shares is completed simultaneously.
3. CONSIDERATION
3.1 The consideration for the sale of the Shares will be the allotment to
the Vendors of the Consideration Securities pursuant to the Escrow
Agreement (and accordingly each of the Vendors will be entitled, subject
to the terms and conditions of the Escrow Agreement, to such number of
the total number of Consideration Shares as the Vendors shall agree from
time to time and notify to the Purchaser in writing).
3.2 The provisions of the Escrow Agreement shall apply in relation to the
issue and release of the Consideration Securities and the Earn-out
Securities.
4. EARN-OUT SECURITIES
4.1 If Turnover for Period One exceeds US$13,000,000 and Profits for Period
One exceed US$1,000,000 ("THE FIRST TARGET") the Purchaser shall allot
500,000 of the Earn-out Securities ("THE FIRST TRANCHE") in accordance
with the Escrow Agreement.
4.2 If Turnover for Period Two exceeds US$26,000,000 and Profits for Period
Two exceed US$5,000,000 ("THE SECOND TARGET") the Purchaser shall allot
500,000 of the Earn-out Securities ("THE SECOND TRANCHE") in accordance
with the Escrow Agreement and the Purchaser shall also allot the First
Tranche if this has not already been allotted by reason of the fact that
the First Target was not met in Period One.
4.3 If Turnover for Period Three exceeds US$45,000,000 and Profits for
Period Three exceed US$15,000,000 ("THE THIRD TARGET") the Purchaser
shall allot 500,000 of the Earn-out Securities ("THE THIRD TRANCHE") in
accordance with the Escrow Agreement and the Purchaser shall also allot
the First Tranche and/or the Second Tranche if these shall not already
have been allotted by reason of the fact that the First Target and/or
the Second Target respectively were not met in Period One and/or Period
Two respectively.
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4.4 For the avoidance of doubt, if none of the First Target, the Second
Target or the Third Target shall have been met in respect of Period One,
Period Two and Period Three respectively, none of the Earn-out
Securities shall be allotted or issued.
4.5 Turnover for a Period shall mean gross revenue as shown by the
consolidated profit and loss account of the Company for the relevant
Period (agreed or reported in accordance with CLAUSE 4.9 such profit and
loss account ("THE PROFIT AND LOSS ACCOUNT") to be prepared in
accordance with CLAUSE 4.7.
4.6 The Profits for a Period shall mean the consolidated net profits after
interest but before tax as shown by the Profit and Loss Account for the
relevant Period.
4.7 The Profit and Loss Account shall be prepared in accordance with the
accounting policies and principles applied by the Purchaser in its
accounts and subject thereto in accordance with accounting principles
generally accepted in the United States, provided that they shall be
adjusted so far as necessary to take account of the following matters:
4.7.1 any taxation on profits shall not be deducted;
4.7.2 profits and losses shall be calculated after exceptional items
and before extraordinary items (as defined in Financial Reporting
Standard number 3 adopted by the Accounting Standards Board);
4.7.3 in respect of any transaction between the Purchaser and any Group
Member which is not at arm's length, there shall be substituted
terms which are at arm's length and "transaction" shall include
without limitation:
(a) the lending or borrowing of money, and/or being party to any bank
netting arrangement for the purposes of calculating interest;
(b) the payment of remuneration or fees to any person who does not
work full-time on the affairs of any Group Member;
(c) the granting of assistance and facilities, including the
secondment of employees and the sharing or leasing of premises;
4.7.4 any expenses for which any Group Member is liable but which are
gratuitously met by any of the Vendors (or any person who is
connected with such Vendor as defined in section 839 ICTA) shall
be deducted;
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4.7.5 any management charges made by the Purchaser shall not be
deducted;
4.7.6 any other adjustment as may be agreed in writing between the
Vendors and the Purchaser shall be made.
4.8 The conversion rate to be used for the purposes of determining whether
or not any of the Targets specified in this CLAUSE 4 has been met shall
be the rate at which conversion takes place for consolidation into the
Purchaser's accounts on an ongoing basis.
4.9 The Purchaser shall procure that:
4.9.1 as soon as reasonably practicable but, in any event, by the end
of the month following the last month of each Period the Auditors
will prepare and deliver to the Vendors and the Purchaser a
calculation of the Turnover and Profits for the relevant Period
showing the application of the foregoing provisions of this
CLAUSE 4. The Vendors and the Purchaser will then endeavour in
good faith to agree in writing the amount of Turnover and
Profits. The Vendors will have the right to consult the Vendors'
nominated accountant in relation to the calculation of the
Turnover and Profits for the relevant Period and the reasonable
costs of the Vendors' nominated accountant in checking each such
calculation will be borne by the Purchaser. In the absence of
agreement between the Vendors and the Purchaser as aforesaid
within 7 Business Days after the Auditors' delivery of each such
calculation, either the Purchaser or the Vendors may by notice in
writing to the other(s) require the Turnover and/or Profits for
the relevant Period to be reviewed and reported upon by the
Independent Accountant (whose costs shall be paid as he or they
shall direct and who shall act as expert (and not as arbitrator)
in connection with the giving of such report, which shall be
binding except in the case of manifest error);
4.9.2 the Vendors and the Vendors' professional advisers shall have the
right to such access to and copies (at their own expense) of the
books and accounts of each Group Member and such other relevant
information as will be requested by the Vendors to enable them to
assess the calculations referred to in CLAUSE 4.9.1.
4.10 The Earn-out Securities in respect of any Period will be allotted in
accordance with the Escrow Agreement.
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5. WARRANTIES
Subject to CLAUSE 7:
5.1 Each of Barnoose Ltd, Komori Ltd and Starpath Ltd severally warrants in
the terms of the Warranties as defined in the I-Wish Agreement as if
those Warranties were set out in full in this Agreement provided that
the Purchaser will not be entitled to claim that any fact or combination
of facts constitutes a breach of any of the Warranties as defined in the
I-Wish Agreement to the extent fairly disclosed in the Disclosure
Letter, and each of Barnoose Ltd, Komori Ltd and Starpath Ltd agrees
that the Purchaser is entering into this Agreement in reliance on each
of the said Warranties (none of which will be construed restrictively,
by reference to any other Warranty or term of the I-Wish Agreement).
5.2 Each of Barnoose Ltd, Komori Ltd and Starpath Ltd severally warrants in
the terms of the Warranties as defined in the Alternative Sources
Agreement as if those Warranties were set out in full in this Agreement
provided that the Purchaser will not be entitled to claim that any fact
or combination of facts constitutes a breach of any of the Warranties as
defined in the Alternative Sources Agreement to the extent fairly
disclosed in the Disclosure Letter, and each of Barnoose Ltd, Komori Ltd
and Starpath Ltd agrees that the Purchaser is entering into this
Agreement in reliance on each of the said Warranties (none of which will
be construed restrictively, by reference to any other Warranty or term
of the Alternative Sources Agreement).
5.3 Garnoose Ltd severally warrants in the terms of the Warranties as
defined in the 3R Agreement as if those Warranties were set out in full
in this Agreement provided that the Purchaser will not be entitled to
claim that any fact or combination of facts constitutes a breach of any
of the Warranties as defined in the 3R Agreement to the extent fairly
disclosed in the Disclosure Letter or the disclosures set out in
schedule 5 to the 3R Agreement and the Agreed Bundle as defined therein,
and Garnoose Ltd agrees that the Purchaser is entering into this
Agreement in reliance on each of the said Warranties (none of which will
be construed restrictively, by reference to any other Warranty or term
of the 3R Agreement).
5.4 Garnoose Ltd severally warrants in the terms of the Warranties as
defined in the A Xxxxxxx Agreement as if those Warranties were set out
in full in this Agreement provided that the Purchaser will not be
entitled to claim that any fact or combination of facts constitutes a
breach of any of the Warranties as defined in the A Xxxxxxx Agreement to
11
the extent fairly disclosed in the Disclosure Letter or in the
Disclosures set out in schedule 2 to the A Xxxxxxx Agreement and the
Agreed Bundle as defined therein, and Garnoose Ltd agrees that the
Purchaser is entering into this Agreement in reliance on each of the
said Warranties (none of which will be construed restrictively, by
reference to any other Warranty or term of the A Xxxxxxx Agreement).
5.5 Garnoose Ltd severally warrants in the terms of the warranties set out
in clause 4 of the Awesome Assignment as if those warranties were set
out in full in this Agreement provided that the Purchaser will not be
entitled to claim that any fact or combination of facts constitutes a
breach of any of the said warranties in the Awesome Assignment to the
extent fairly disclosed in the Disclosure Letter, and Garnoose Ltd
agrees that the Purchaser is entering into this Agreement in reliance on
each of the said warranties (none of which will be construed
restrictively, by reference to any other warranty or term of the Awesome
Assignment).
5.6 Subject to CLAUSE 7, the Vendors, jointly and severally:
5.6.1 warrant to the Purchaser in the terms of the Warranties set out
in SCHEDULE 4, provided that the Purchaser will not be entitled
to claim that any fact or combination of facts constitutes a
breach of any of those Warranties to the extent fairly disclosed
in the Disclosure Letter, and agree that the Purchaser is
entering into this Agreement in reliance on each of the
Warranties (none of which will be construed restrictively, by
reference to any other Warranty or term of this Agreement);
5.6.2 will indemnify the Purchaser against any reasonable costs or
expenses (including 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;
5.6.3 undertake that, if any claim is made against any of them in
connection with the sale of the Shares to the Purchaser, they
will not make any claim against any Group Member, or against any
director or employee of any such Group Member, on which or on
whom any of them may have relied before agreeing to any provision
of this Agreement or the Disclosure Letter, but so that this
undertaking will not preclude any Vendor from claiming against
any other Vendor under any right of contribution to which such
Vendor may be entitled.
12
5.7 In this Agreement, unless otherwise specified, where any Warranty refers
to the knowledge or awareness of the Vendors (or similar expression),
each Vendor will be deemed to have such knowledge or awareness as such
Vendor would have obtained had such Vendor made all due and careful
enquiries into the subject matter of that Warranty and, where any of the
Warranties set out in SCHEDULE 4 so refers, the knowledge and awareness
of any one of the Vendors will be imputed to the remaining Vendors.
6. TAX COVENANT
6.1 In this CLAUSE 6:
6.1.1 references to Events include Events which are deemed to have
occurred for any Taxation purpose;
6.1.2 references to an Event which occurred on or before Completion
include the combined result of two or more Events, the first of
which occurred on or before Completion;
6.1.3 references to the loss of a Relief include the disallowance of a
Relief and the failure to obtain a Relief; and
6.1.4 references to a payment of Taxation which a Group Member is
liable to make include any stamp duty which is charged on any
document, or in the case of a document which is outside the
United Kingdom any stamp duty which would be charged on the
document if it were brought into the United Kingdom, which is
necessary to establish the title of the Group Member to any asset
or in the enforcement or production of which the Group Member is
interested, and any interest, fine or penalty relating to such
stamp duty.
6.2 Subject to CLAUSE 7, Garnoose Ltd covenants with the Purchaser to pay to
the Purchaser an amount equal to the amount of:
6.2.1 any payment of, or in respect of, Taxation which 3R Learning
Limited has made or is liable to make as a result of, or in
connection with, any Event which occurred on or before
Completion; and
6.2.2 any payment of Taxation which 3R Learning Limited would have been
liable to make as a result of, or in connection with, any Event
13
which occurred on or before Completion but for the use of any
Relief or the set-off of any right to repayment of Taxation; and
6.2.3 any payment of Taxation which 3R Learning Limited would not have
been liable to make but for the loss of any Relief (including a
Relief surrendered to 3R Learning Limited by another company) as
a result of, or in connection with, any Event which occurred on
or before Completion, on the basis of the rates of Taxation
current at the date of the loss, assuming for this purpose that
3R Learning Limited had sufficient profits or was otherwise in a
position actually to use the Relief; and
6.2.4 any repayment of Taxation to which 3R Learning Limited would have
had the right but for the loss of such right as a result of, or
in connection with, any Event which occurred on or before
Completion; and
6.2.5 any costs, fees or expenses (including reasonable and proper
legal costs) incurred by 3R Learning Limited or the Purchaser in
connection with:
(a) any matter in respect of which Garnoose Ltd is or may be liable
under any of CLAUSES 6.2.1 TO 6.2.4 (inclusive); or
(b) taking or defending any action (including but not limited to
legal proceedings) under this CLAUSE 6.
6.3 Except as required by law all payments by Garnoose Ltd under this CLAUSE
6 will be made free and clear of all deductions and withholdings.
6.4 If any deduction or withholding is required to be made from any payment
by Garnoose Ltd under this CLAUSE 6 or if (ignoring any available Relief
or right to repayment of Taxation) the Purchaser is subject to Taxation
in respect of any payment by Garnoose Ltd under this CLAUSE 6, Garnoose
Ltd covenants with the Purchaser to pay to the Purchaser such additional
amount as is necessary to ensure that the net amount received and
retained by the Purchaser (after taking account of such deduction or
withholding or Taxation) is equal to the amount which it would have
received and retained had the payment in question not been subject to
the deduction or withholding or Taxation.
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7. LIMITATION OF LIABILITY
7.1 In this CLAUSE 7, save where expressly provided, "warranty claim" means
any claim which would (but for this CLAUSE 7) be capable of being made
against the Vendors (or any of them) for breach of the Warranties and
"tax claim" means any claim which would (but for this CLAUSE 7) be
capable of being made against the Vendors (or any of them) for breach of
the covenant in CLAUSE 6.
7.2 Except to the extent that any warranty claim or tax claim arises by
reason of any fraud or dishonest or wilful misstatement or omission by
or on behalf of (in the case of any of the warranties referred to in
CLAUSES 5.1 TO 5.5 (INCLUSIVE)) the relevant Vendor warrantor or (in the
case of any of the warranties set out in SCHEDULE 4) any one of the
Vendors, the liability of the Vendors in respect of any warranty claim
or tax claim will be limited as follows:
7.2.1 subject to CLAUSES 7.2.2 AND 7.2.3, the aggregate liability of
the Vendors in respect of all warranty claims and tax claims will
be limited to the aggregate value of the Consideration Securities
receivable by the Vendors, the aggregate value of the Vendor's
Consideration Securities for these purposes being their value as
at the date of exchange of this Agreement or the date of claim,
whichever is the lesser;
7.2.2 subject to CLAUSES 7.2.3, the aggregate liability of the Vendors
in respect of all warranty and tax claims relating to tax
warranties and covenants in relation to corporation tax on
trading income will be limited to (pound)10,000;
7.2.3 the aggregate liability of each of the individual Vendors in
respect of all warranty claims and tax claims will not exceed the
value of the Consideration Securities receivable by such Vendor
valued at the date of exchange of this Agreement or the date of
claim, whichever is the lesser;
7.2.4 the Vendors will be under no liability to make any payment unless
their aggregate liability in respect of all warranty claims and
tax claims is in excess of (pound)10,000, in which event the
Vendors will (subject to the other provisions of this CLAUSE 7.2)
be liable for the whole amount of such liability and not merely
for the excess;
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7.2.5 no warranty claim shall be brought against the Vendors unless and
then to the extent that written particulars thereof (specifically
identifying in reasonable detail the specific matters in respect
of which the claim is made) shall have been notified in writing
to the Vendors within 18 months of the date of Completion. Any
such claim shall (if it has not previously been satisfied settled
or withdrawn) be deemed to have been withdrawn 6 months after
notification under this clause unless proceedings in respect of
the claim shall have been commenced by being both issued and
served on the Vendors by such date;
7.2.6 in the event that the Purchaser is entitled to recover any sum
(whether by payment, discount, credit or otherwise) from any
third party in respect of any matter for which a warranty claim
could be made against the Vendors, upon the Vendors indemnifying
and securing the Purchaser to the Purchaser's satisfaction
against all costs or other liabilities, the Purchaser shall, or
procure that the Company shall, take all reasonable steps to
recover such sum before making the claim except where it is
necessary to make a warranty claim to protect the Purchaser's
position having regard to the provisions of the preceding
sub-clause hereof and any sum recovered will reduce the amount of
the warranty claim; and, in the event of the recovery from the
third party being delayed until after the warranty claim has been
satisfied by the Vendors, the Purchaser shall account to the
Vendors in respect of any amount so recovered (after deduction of
all reasonable costs and expenses of the recovery) up to the
amount of the warranty claim;
7.2.7 in the event that a warranty claim against the Vendors arises as
a result of or in connection with a liability to or a dispute
with any third party, the Purchaser shall forthwith give written
notice of it to the Vendors and, upon the Vendors indemnifying
and securing the Purchaser to the Purchaser's satisfaction
against all costs or other liabilities, it shall procure that
there be taken such action as the Vendors may reasonably request
to avoid, dispute, resist, appeal, compromise or defend such
liability or dispute and adjudication in respect of it and
(again, subject to being similarly indemnified and secured
against all costs or other liabilities) the Purchaser shall
instruct such solicitors or other professional advisors as the
Vendors may nominate to act on behalf of the Purchaser or the
Company but in accordance with the Vendors' instructions to the
intent that the conduct of the dispute shall be delegated
entirely to the Vendors. The Purchaser shall procure that the
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Vendors and their professional advisers are given reasonable
access to the records and personnel of the Company and shall
supply all information reasonably requested by or on behalf of
the Vendors;
7.2.8 no liability shall attach to the Vendors in respect of any
warranty claim to the extent that it relates to any loss for
which the Purchaser or the Company is indemnified by insurance;
7.2.9 no liability shall attach to the Vendors in respect of any
warranty claim or tax claim ("a Claim"):
(a) if such Claim would not have arisen but for a change in the rate
of Taxation or a change in legislation made after the date hereof
or a change by the relevant taxing authority in the method of
applying or calculating the rate of Taxation after the date
hereof or a change in any statutory concession or practice
previously made by the Inland Revenue (whether or not such change
purports to be effective retrospectively in whole or in part) or
if such claim would not have arisen but for any judgment of any
court delivered after the date hereof;
(b) to the extent that such Claim would not have arisen but for a
change in the treatment of any assets or liabilities or of the
Taxation attributable to timing differences in future accounts of
the Company or but for any other change in the accounting basis
upon which the Company prepares its future accounts;
(c) to the extent that the amount thereof corresponds to an increase
in the value of the assets of the Company or the Purchaser
resulting from a reduction in its liability to Taxation except in
so far as such increase is attributable to any decrease in rates
of Taxation, or variation by the relevant taxing authority in the
method of applying or calculating the rate of Taxation, made
after Completion;
(d) to the extent that such Claim would not have arisen but for an
omission or a voluntary act of the Purchaser or the Company or
transaction occurring after Completion outside the ordinary
course and which the Purchaser or the Company (as the case may
be) knew or ought reasonably to have known would give rise to a
Claim;
(e) to the extent to which the Taxation assessed on the Company would
not have been so assessed had the Company not rendered itself by
17
virtue of some act or event occurring on or after Completion
unable to setoff against the profits or gains so taxable any tax
losses incurred by the Company prior to Completion;
(f) to the extent that it is made on the basis that it appears that
the Company is wholly or in part deprived or is sought to be
deprived of any relief or allowance or credit or exemption or
right to repayment of tax or suffers any depletion reduction or
loss of any relief allowance credit exemption or right to
repayment of tax provided however that if any such deprivation
depletion reduction or loss results in the Company thereby
suffering a liability to make a payment in respect of tax then
the amount of such liability shall itself give rise to a tax
claim.
7.3 The Vendors will not be liable in respect of any tax or warranty claim
if and to the extent that the loss occasioning it has been recovered
pursuant to any other tax or warranty claim.
8. RESTRICTIVE COVENANTS
8.1 In consideration for the Purchaser agreeing to buy the Shares each of
the Vendors and the Guarantors (together "Covenantors") covenants that
such Covenantor will not, 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:
8.1.1 for a period of 12 months immediately following Completion
canvass, solicit or approach, or cause to be canvassed, solicited
or approached, for orders any person who at any time during the
12 months immediately preceding the date of Completion is or was
negotiating with any Group Member for the supply by any Group
Member of goods or services or is or was a client or customer of
any Group Member, where the orders relate to goods and/or
services which are competitive with or of the type supplied by
any such Group Member at any time during the 12 months
immediately preceding the date of Completion;
8.1.2 for a period of 12 months immediately following Completion, deal
or contract with any person who at any time during the 12 months
immediately preceding the date of Completion is or was
negotiating with any Group Member for the supply by any Group
Member of goods or services or is or was a client or customer of
any Group Member, where the dealing or contracting relates to
18
goods and/or services which are competitive with or of the type
supplied by any such Group Member at any time during the 12
months immediately preceding the date of Completion;
8.1.3 for a period of 12 months immediately following Completion,
interfere, or seek to interfere, with the continuance of supplies
to any Group Member from any supplier who has been supplying
goods and/or services to any Group Member at any time during the
12 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 any such Group Member;
8.1.4 for a period of 12 months immediately following Completion,
solicit or entice, or endeavour to solicit or entice, away from
any Group Member, or employ, any person employed in a managerial,
supervisory, technical, programming or sales capacity by, or who
is or was a consultant to, any Group Member at Completion or at
any time during the period of 12 months immediately preceding the
date of Completion;
8.1.5 within the UK, Europe and North America for a period of 12 months
immediately following Completion be engaged, concerned or
interested in any business which supplies goods and/or services
which are competitive with or of the type supplied by any Group
Member;
8.1.6 at anytime immediately following Completion use in connection
with any business which is competitive with the business of any
Group Member any name (in whatever form) which includes the name
of any Group Member or any trading style or get up which is
confusingly similar to that used by any Group Member as at the
date of Completion; or
8.1.7 at any time after Completion make use of, disclose or cause
unauthorised disclosure to any person (except those authorised by
the Purchaser in writing to know), any secret or confidential
information relating to any Group Member which includes
confidential or secret information relating to its trade secrets,
know-how, ideas, business methods, finances, prices, business
plans, marketing plans, development plans, manpower plans, sales
targets, sales statistics, customer lists, customer
relationships, computer systems or computer software.
19
8.2 The parties agree that each of the undertakings set out in this CLAUSE 8
is separate and severable and, if any of such undertakings or part of an
undertaking is held to be against the public interest or unlawful, the
remaining undertakings or part of the undertaking will continue in full
force.
8.3 The undertakings set out in this CLAUSE 8 shall not apply to the extent
that any of the Covenantors are working as an employee or consultant to
any Group Company.
9. COMPLETION
The sale and purchase of the Shares will be completed at the offices of
the Purchasers' Solicitors immediately, when:
9.1 the Vendors will deliver to the Purchaser (or as it may otherwise
agree):
9.1.1 duly executed transfers of the Shares in favour of the Purchaser
(or as it will direct) together with all relevant share
certificates;
9.1.2 transfers of all shares in any Group Member not held in the name
of the Company or another Group Member duly executed in favour of
the Purchaser (or as it will direct) together with all relevant
share certificates;
9.1.3 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 each
Group Member;
9.1.4 all deeds and documents relating to the title of any Group Member
to the Property;
9.1.5 all cheque books in current use of each Group Member;
9.1.6 bank statements in respect of each account of each Group Member
as at the close of business on the last Business Day prior to
Completion, together in each case with a reconciliation statement
to show the position at Completion (listing unpresented cheques
drawn or received by the relevant Group Member and standing
orders payable since the date of such bank statements);
9.1.7 all licences, certificates or other documents previously
specified by the Purchaser;
20
9.1.8 duly executed powers of attorney in the agreed terms;
9.1.9 duly executed deeds of waiver in the agreed terms executed by all
the Vendors.
9.2 each Vendor will repay, and will procure that any spouse or child of
such Vendor or any 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 any
Group Member, whether due for payment or not;
9.3 the Vendors will procure that duly convened meetings are held at which:
9.3.1 the transfers referred to in CLAUSE 9.1 (subject to stamping) are
approved for registration in the books of the relevant Group
Member;
9.3.2 any persons nominated by the Purchaser (including for the
avoidance of doubt Xxxxx XxxXxxxxx) are appointed as additional
directors and as secretary of specified Group Members; and
9.3.3 all existing instructions to the bankers of each Group Member are
revoked and new instructions given to such bankers as the
Purchaser may nominate, in such form as the Purchaser directs;
9.4 Xxxxxx Xxxxxx Xxxxxxx, Xxxxxx Xxxxx Monnickendam, Xxxxx Xxxxx
Xxxxxx and Xxxx Xxxxx Xxxxxx will enter into service agreements
with the Company in the agreed terms;
9.5 The Purchaser and the Vendors will enter into the Escrow Agreement; and
9.6 The Purchaser shall procure that Xxxxxx Xxxxx and Xxxxxx Xxxxxxxx are
appointed to the board of the Purchaser.
9.7 Without prejudice to the provisions of the Escrow Agreement, the
Purchaser shall not be obliged to allot or issue or release the
Consideration Securities or the Earn-out Securities unless and until the
following conditions have satisfied (or waived by the Purchaser) on or
before the date falling 45 calendar days after the date of this
Agreement:
9.7.1 the delivery to the Purchaser of the following documents in a
form reasonably satisfactory to the Purchaser, (where applicable)
duly executed by or on behalf of the Vendors and/or the
Guarantors as the relevant documents may require:-
(a) all of the original counterparts of this Agreement;
21
(b) the Disclosure Letter (including any annexures thereto) (for the
avoidance of doubt, but without prejudice to the foregoing, the
Disclosure Letter must not disclose any material matter or
matters not previously brought to the Purchaser's attention at
the date of this Agreement);
(c) the Accounting Information;
(d) the Escrow Agreement (provided that the Purchaser shall have
provided to the Vendors' Solicitors a first draft of the same
within 14 calendar days after the date of Completion);
(e) a legal opinion in respect of each of the Vendors to the effect
that the Vendor in respect of which the opinion is given has full
power to enter into and perform this Agreement and this Agreement
constitutes obligations binding on such Vendor in accordance with
its terms;
(f) certified copies of the executed Acquisition Agreements;
(g) certified copies of all of the disclosure letters and agreed
bundles referred to in the Acquisition Agreements;
(h) certified copies of any and all releases and/or consents
necessary to transfer the assets and/or shares transferred
thereby;
(i) certified copies of all of the ancillary and other documents
referred to in the Acquisition Agreements;
(j) certified copies of the service agreements referred to in CLAUSE
9.4;
(k) certified copies of the all matters or documents required to be
delivered pursuant to CLAUSE 9.1 which the Purchaser reasonably
believes have not been dealt with;
(l) certified copies of the declarations of existing business
interests given to the Company by each of M D Monnickendam, X X
Xxxxxx and A K Xxxxxx;
(m) certified copies of the deed of indemnity entered into between
the Company and Awesome Developments Limited;
22
(n) a certified copy of the Consultancy Agreement entered into
between the Company and Montpelier (Search and Selection)
Limited;
(o) certified copies of the letters of indemnity relating to the
I-Wish Agreement from M Monnickendam, A K Xxxxxx and X X Xxxxxx
to the Company;
(p) a certified copy of the supplemental agreement entered into
between the I-Wish (Games) Limited and the Company relating to
the I-Wish Agreement;
(q) a certified copy of the termination agreement entered into
between 3R Learning Limited, Awesome Developments Limited, A D
Xxxxxxx, M D Monnickendam, X X Xxxxxx and A K Xxxxxx;
(r) a certified copy of the letter of resignation from Katharine
Xxxxxxxxx Xxxxxxxx to 3R Learning Limited; and
(s) a certified copy of the letter of appointment of Xxxxx X.
XxxXxxxxx as non-executive director of the Company;
(t) members' resolutions in the agreed terms.
9.8 Without prejudice to the provisions of the Escrow Agreement, the
Purchaser shall not be obliged to allot or issue or release the Potters
Securities unless and until the Purchaser is reasonably satisfied with
the Finance Arrangement.
9.9 Without prejudice to the generality of CLAUSE 9.7, the Escrow Agreement
shall cover, inter alia but without limitation, the following matters:-
9.9.1 the terms and conditions on which the Consideration Securities
and the Earn-out Securities and the Potters Securities will be
issued and released in accordance with the phasing proposals set
out in the Letter of Intent;
9.9.2 the right for the Purchaser to set-off from the Consideration
Securities and/or the Earn-out Securities any claims it may have
under this Agreement; and
9.9.3 the right for the Purchaser to set-off from the Consideration
Securities and/or the Earn-out Securities any taxation for which
either the Purchaser or any Group Member is liable arising out of
the allocation of those Securities, including without limitation
any PAYE and National Insurance contributions payable in respect
of Securities allotted to employees.
23
9.10 The Escrow Agreement shall be negotiated and agreed by the Purchaser and
Xxxxxx Xxxxx who shall each use their reasonable endeavours to agree the
form of the Escrow Agreement within the time limits referred to in
CLAUSE 9.7.
9.11 In the event of the Purchaser failing to provide a draft of the Escrow
Agreement within the timescale set out in CLAUSE 9.7.1 (D) above, or in
the event of the Escrow Agreement not being executed by the Purchaser
within the period set out in CLAUSE 9.7 above, then the Purchaser shall
immediately upon the expiry of those timescales be obliged to allot the
Consideration Securities and the Earn-out Securities in favour of the
Vendors without restriction. Time shall be of the essence in connection
with these requirements.
10. GUARANTEE
10.1 In consideration of the Purchaser entering into this Agreement each
Guarantor irrevocably and unconditionally guarantees to the Purchaser
the full and due performance by his Guaranteed Vendor of all its
obligations under or arising out of this Agreement including, without
limitation, any liability or obligation to pay damages or other
compensation for any breach of any of the Warranties or to pay sums due
under CLAUSE 6.
10.2 Each Guarantor:
10.2.1 agrees to indemnify and keep indemnified the Purchaser against
all losses, claims, liabilities, costs and expenses (including
legal costs) which may be incurred by the Purchaser by reason of
any default on the part of his Guaranteed Vendor to pay, observe
or perform any of the obligations referred to in CLAUSE 10.1 when
due; and
10.2.2 undertakes that, in the event of any claim being made against
that Guarantor, that Guarantor will not make any claim against
any Group Member or any directors or employee of any Group Member
on which or on whom his Guaranteed Vendor or that Guarantor may
have relied before agreeing to any term of this Agreement or
authorising any statement in the Disclosure Letter
subject to the Purchaser having first taken all reasonable steps to
recover the said monies from the relevant Guaranteed Vendor.
24
10.3 It is hereby agreed that any amendment to or variation of this Agreement
or any granting of time or other indulgence to or compromise with or
agreement not to xxx any Vendor, any Guarantor or any other person or
any other act, omission or circumstances which but for this CLAUSE 10.3
might operate to prejudice, affect or otherwise diminish the liability
of any Guarantor will not release, prejudice, diminish or affect in any
way the liabilities of any Guarantor or the remedies conferred on the
Purchaser under this CLAUSE 10.
10.4 This CLAUSE 10 is for each Guarantor a continuing guarantee and will
remain in force until all the liabilities and obligations referred to in
CLAUSE 10.1 have been irrevocably paid and satisfied in full.
10.5 Without prejudice to the Purchaser's rights against the Vendors as
principal debtor, each Guarantor agrees that any liabilities or
obligations referred to in CLAUSE 10.1 which may not be recoverable on
the footing of a guarantee or which are or become illegal, void,
voidable, unenforceable, discharged by any insolvency or irrecoverable
will nevertheless be recoverable from and enforceable against that
Guarantor as sole or principal debtor and will be paid or performed by
that Guarantor on demand.
10.6 In this clause reference to "his Guaranteed Vendor" means in respect of
each Guarantor the Vendor listed against his or her name in PART II of
SCHEDULE 1.
11. ANNOUNCEMENTS
No announcement concerning the transactions contemplated by this
Agreement will (save as required by law) be made by the Vendors except
with the prior written approval of the Purchaser or by the Purchaser
except with the prior written approval of any of the Vendors. For the
avoidance of doubt, the Vendors hereby consent to the Purchaser making
such announcement in respect of this Agreement as shall be required by
SEC.
12. COSTS
Each party to this Agreement will bear their own costs and expenses
relating to this Agreement, except where otherwise expressly stated.
13. INTEREST
If any Vendor becomes liable to pay any sum pursuant to this Agreement,
whether by way of damages or otherwise, such Vendor will be liable to
pay interest on such sum from the due date for payment at the annual
25
rate of 4 per cent above the base lending rate from time to time of
Royal Bank of Scotland plc, accruing on a daily basis until payment is
made, whether before or after any judgment.
14. NOTICES
14.1 Any demand, notice or other communication in connection with this
Agreement will be in writing and will, if otherwise given or made in
accordance with this CLAUSE 14, be deemed to have been duly given or
made as follows:
14.1.1 if sent by prepaid first class post, on the second Business Day
after the date of posting; or
14.1.2 if delivered by hand, upon delivery at the address provided for
in this CLAUSE 14; or
14.1.3 if sent by facsimile, on the day of transmission provided that a
confirmatory copy is, on the same Business Day that the facsimile
is transmitted, sent by pre- paid first class post in the manner
provided for in this CLAUSE 14,
provided that, if it is delivered by hand or sent by facsimile on a day
which is not a Business Day or after 4.00pm on a Business Day, it will
instead be deemed given or made on the next Business Day.
14.2 Any such demand, notice or other communication will, in the case of
service by post or delivery by hand, be addressed to the recipient at
the recipient's address stated in this Agreement or 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 and will, in the
case of service by facsimile, be sent using a facsimile number then used
by the recipient, provided that if given or made to any one of the
Vendors (or his or her personal representatives) or to the Vendors'
Solicitors, it will be treated as validly given or made to all of the
Vendors.
15. ORDERLY MARKET
The Vendors hereby undertake not to dispose of any of the Consideration
Securities or the Earn-out Securities (without the prior written consent
of the Purchaser) unless such disposal is executed through the
Purchaser's brokers designated in writing by the Purchaser from time to
time and in keeping with the rules of the SEC.
26
16. GENERAL
16.1 This Agreement will be binding on and enure for the benefit of each
party's successors, assigns and personal representatives.
16.2 Except insofar as they have been fully performed at Completion, the
provisions of this Agreement will continue in full force and effect
notwithstanding Completion.
16.3 The parties will do anything which may be required on or after
Completion to vest in the Purchaser legal and beneficial ownership of
the Shares and otherwise to give effect to the terms of this Agreement.
16.4 Failure or delay by any party in exercising any right or remedy under
this Agreement will not operate as a waiver of it.
16.5 Any waiver of any breach of this Agreement will not be deemed a waiver
of any subsequent breach and will in no way affect the other terms of
this Agreement.
16.6 The formation, existence, construction, performance, validity and all
aspects whatsoever of this Agreement or of any term of this Agreement
will be governed by English law. The English Courts will have
jurisdiction to settle any disputes which may arise out of or in
connection with this Agreement. The jurisdiction agreement contained in
this CLAUSE 16.6 is made for the benefit of the Purchaser only, which
accordingly retains the right to bring proceedings in any other court of
competent jurisdiction. The parties agree to submit to the said
jurisdiction.
16.7 The parties to this Agreement do not intend that any of its terms will
be enforceable by virtue of the Contracts (Rights of Third Parties) Xxx
0000 by any person not a party to it.
27
SCHEDULE 1
PART I - THE VENDORS
NUMBER AND CLASS OF SHARES TO BE SOLD
NAME AND ADDRESS
ORDINARY 2P SHARES (POUND)1 PREFERENCE
SHARES
Barnoose Ltd 126,316 136,184
Komori Ltd 378,947 322,158
Starpath Ltd 126,316 86,395
Garnoose Ltd 126,316 Nil
Potters Limited 221,053 1,634,210
PART II - GUARANTORS
NAME AND ADDRESS GUARANTEED VENDOR
Xxxxxx Xxxxx Monnickendam Barnoose Ltd
Beech House
00 Xxxxxxxx Xxxxxxxx
Xxxxxxxx
Xxxxx XX00 0XX
Xxxxx Xxxxx Chadha Komori Ltd
0 Xxxxxxx Xxxxx
Xxxxxxxx
Xxxxxx X00 0XX
Xxxx Xxxxx Xxxxxx Starpath Ltd
00 Xxxxxxx Xxxx Xxxxx
Xxxxxxx
Xxxxxxxxxxx XX00 0XX
Xxxxxx Xxxxxx Xxxxxxx Garnoose Ltd
Xxxxx Xxx
Xxxxxx Xxxxx
Xxxxxxxxxxxx
Xxxxxxxxxxxxxxxx XX00 0XX
28
SCHEDULE 2
DETAILS OF THE COMPANY
Name of Company : Ignition Entertainment Limited
Registered number : 4293817
Registered office : Xxxxxxx Xxxxx, 00 Xxxxxxxxx Xxxx,
Xxxxx XX0 0XX
Date of incorporation : 26 September 2001
Place of incorporation : England and Wales
Status of Company : Private limited company
Authorised share capital (pound)4,000,000 divided into 75,000,000
: shares of 2 xxxxx each and 2,500,000
redeemable preference shares of (pound)1.00
each
Issued share capital : (pound)19576.96 divided into 978,948
ordinary shares of 2 xxxxx each and
(pound)2,178,947 divided into 2,178,947
preference shares of (pound)1.00 each
Directors' full names : Xxxxxx Xxxxx Monnickerdam, Xxxxx Xxxxx
Xxxxxx, Xxxx Xxxxx Xxxxxx, Xxxxx Xxxx
Xxxxxxxx, Xxxxxx Xxxxx, Xxxxxx Xxxxx
Randeree and Tariq Xxxxxx Xxxxxxx
Secretary's full name : Xxxxx Xxxxxx Xxxxxxx
Accounting reference date : 30 September
Description of business : Development, publishing and distribution of
computer games
29
DETAILS OF OTHER GROUP MEMBERS
Name of Group Member : 3R Learning Limited
Registered number : 4117514
Registered office : X/x Xxxxx & Xx, 0 Xxxxxxxxxx Xxxx, Xxxx
Xxxxx, Xxxxxxxxxx XX00 0XX
Date of incorporation : 30 November 2000
Place of incorporation : England and Wales
Status : private limited company
Authorised share capital : (pound)100 divided into 100 ordinary shares
of(pound)1 each
Issued share capital : (pound)1 divided into 1 ordinary share
of(pound)1
Beneficially owned by the : the whole of the issued share capital
Company
Registered shareholders : Name and address Number and class
of shares held
Ignition Entertainment 1 ordinary share
Limited whose registered of (pound)1
office is at Xxxxxxx
Xxxxx, Xxxxxxxxx Xxxx,
Xxxxx XX0 0XX
Directors' full names : Xxxxxx Xxxxxx Xxxxxxx
Secretary's full name : Xxxxxxxxx Xxxxxxxxx Xxxxxxxx
Accounting reference date : 30 November
30
Auditors : None
Bankers : None
Description of business : Ownership and exploitation of certain
intellectual property in computer games,
interactive entertainment and educational
products
31
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
Licence to occupy 000-000 Xxxxxxx xxxxxxx
Xxxx, Xxxxxxx Xxxxx, Xxxxx
Proposed premises:
The White House, Banbury
(use: offices)
32
SCHEDULE 4
WARRANTIES
1. SCHEDULES 1 & 2; CAPITAL
1.1 The information contained in SCHEDULES 1 and 2 is true and complete in
all respects.
1.2 The Shares and the shares shown in SCHEDULE 2 of the Group Members
(other than 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.
1.3 No Contract has been entered into which requires or may require any
Group Member to allot or issue any share or loan capital.
1.4 No Group Member has any interest in the share capital of any body
corporate.
2. INFORMATION SUPPLIED TO THE PURCHASER
2.1 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 a Group Member in the course of the negotiations leading to
the execution of this Agreement is so far as the Vendors are aware true
in all respects and is not misleading because of any omission or
ambiguity save as amended in subsequent correspondence between those
parties.
2.2 The Vendors are not aware of any fact or matter concerning any Group
Member and/or its business and affairs which could reasonably have been
expected to influence the decision of the Purchaser to enter into this
Agreement.
3. FINANCE ARRANGEMENT
The Company has entered into the Finance Arrangement.
4. THE ACQUISITIONS
4.1 Each of the Acquisition Agreements has been completed in accordance with
its terms as supplied to the Purchaser or its advisers by the Vendors'
Solicitors.
4.2 Each of the Vendors or the Sellers (as the case may be), as defined in
the Acquisition Agreements, had full power to enter into and perform the
Acquisition Agreement to which he or it is a party and the sell the
business(es) and/or assets and/or shares agreed to be sold thereby, and
33
the Acquisition Agreements were duly authorised by all necessary acts of
the Vendors or the Sellers (as the case may be) and constitute valid and
binding obligations on the Vendors and the Sellers party to them in
accordance with their terms.
4.3 Each of the Acquisitions was made for a fair value and was and is
lawful.
4.4 The Company has no assets or liabilities other than those acquired or
assumed pursuant to (a) the Acquisition Agreements, (b) the Finance
Arrangement or (c) acquired or assumed in the ordinary course of trade
since the date of the Acquisition Agreements.
4.5 Each Group Member has carried on its business and traded in the ordinary
course since the date of completion of each of the Acquisition
Agreements and did not trade prior to completion of the same.
5. INSOLVENCY
In respect of each of the Group Members, the Vendors and the Guarantors,
and also in respect of each of the Vendors and the Sellers (as defined
in the Acquisition Agreements):-
5.1 no petition has been presented and no order has been made for its
bankruptcy (in the case of an individual) or for its winding-up and no
trustee in bankruptcy or administrative receiver, receiver and/or
manager (as appropriate) has been appointed of the whole or any part of
any of its property;
5.2 (in the case of a corporate entity) no administration order has been
made appointing an administrator in respect of it and no petition has
been presented for an administration order in respect of it;
5.3 (in the case of an individual) no interim order has been made and no
voluntary arrangement has been approved under Part VIII Insolvency Act
1986 in respect of it;
5.4 (in the case of a corporate entity) no voluntary arrangement has been
approved under Part I Insolvency Act 1986 and no compromise or
arrangement has been sanctioned under section 425 of the Act in respect
of it;
5.5 no distress, execution or other process which remains undischarged has
been levied on any of its assets and it has not stopped the payment of
its debts or (in the case of a corporate entity) received a written
34
demand pursuant to section 123(1)(a) Insolvency Xxx 0000 and it is not
unable to pay its debts within the meaning of section 123 Insolvency Act
1986 nor could it be deemed to be unable to pay its debts within the
meaning of section 123 Insolvency Xxx 0000;
5.6 (in the case of an individual) no receiver or interim receiver has been
appointed over any part of its property;
5.7 (in the case of a corporate entity) no disqualification order has at any
time been made pursuant to the provisions of the Company Directors
Disqualification Xxx 0000 against any officer or employee of that entity
or any person who is now such an officer or employee;
5.8 there are no facts known to any of the Vendors or the Guarantors which
could give rise to any of the events or circumstances referred to in
this PARAGRAPH 5.
35
SCHEDULE 5
ACCOUNTING INFORMATION
-------------------------------------------------------------------------------
GROUP MEMBER BUSINESS ACCOUNTING INFORMATION ACCOUNTING
REFERENCE DATE
-------------------------------------------------------------------------------
The Company I Wish (Games) The profit and loss 19.07.2001
account for I-Wish
(Games) Limited for the
period from 21 June
2001 to 31 March 2002
and the balance sheet
for that company as at
31 March 2002 copies of
which are annexed to
the Disclosure Letter
Alternative Sources The profit and loss 21.06.2001
account for Alternative
Sources Limited for the
period from 19 July
2001 to 31 March 2002
and the balance sheet
for that company as at
31 March 2002 copies of
which are annexed to
the Disclosure Letter.
Xxxxxx Xxxxxxx None N/A
3R Learning None 30.11.2000
Limited
36
SIGNED by Xxxxxx Xxxxx Monnickendam )
in the presence of: )
Witness signature:
Name:
Address:
Occupation:
SIGNED by Xxxxx Xxxxx Xxxxxx )
in the presence of: )
Witness signature:
Name:
Address:
Occupation:
SIGNED by Xxxx Xxxxx Xxxxxx )
in the presence of: )
Witness signature:
Name:
Address:
Occupation:
SIGNED by Xxxxxx Xxxxxx Xxxxxxx )
in the presence of: )
Witness signature:
Name:
Address:
Occupation:
SIGNED by Xxxxx Xxxxx Xxxxxx )
duly authorised to sign for )
and on behalf of )
BARNOOSE LTD )
in the presence of: )
Witness signature:
Name:
Address:
Occupation:
SIGNED by Xxxxx Xxxxx Xxxxxx )
duly authorised to sign for )
and on behalf of )
KOMORI LTD )
in the presence of: )
Witness signature:
Name:
Address:
Occupation:
37
SIGNED by Xxxxx Xxxxx Xxxxxx )
duly authorised to sign for )
and on behalf of )
STARPATH LTD )
in the presence of: )
Witness signature:
Name:
Address:
Occupation:
SIGNED by Xxxxx Xxxxx Xxxxxx )
duly authorised to sign for )
and on behalf of )
GARNOOSE LTD )
in the presence of: )
Witness signature:
Name:
Address:
Occupation:
SIGNED by Xxxxx Xxxxx Xxxxxx )
duly authorised to sign for )
and on behalf of )
POTTERS LIMITED )
in the presence of: )
Witness signature:
Name:
Address:
Occupation:
SIGNED by Xxxxx Xxxxx Xxxxxx )
duly authorised to sign for )
and on behalf of )
IVP TECHNOLOGY CORPORATION )
in the presence of: )
Witness signature:
Name:
Address:
Occupation:
38
