DATED 31st March 2001
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(1) VIZACOM INC.
(2) GW 313 LIMITED
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SHARE ACQUISITION AGREEMENT
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DATE: 31st March 2001
PARTIES:
(1) VIZACOM INC. a corporation incorporated in the state of Delaware whose
principal place of business is situated at ▇▇▇▇ ▇▇▇▇▇▇▇▇' ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ of America.
(2) GW 313 LIMITED, a company incorporated in England (company number: 4180821)
whose registered office is at ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇ ▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇
▇▇▇.
RECITALS:
(A) The Vendor owns the Shares.
(B) The Purchaser has agreed to purchase the Shares on the terms of this
Agreement.
NOW IT IS HEREBY AGREED as follows:-
1. DEFINITIONS
In this Agreement and the Schedules the following definitions will apply:-
"ACCOUNTS" means the audited financial statements of the
Company for the year ended on the Accounts Date;
"ACCOUNTS DATE" means 31 December 2000;
"AFFILIATE" means in relation to any body corporate, any
holding company or subsidiary undertaking
from time to time of such body corporate or
any subsidiary undertaking from time to time
of the holding company of such body corporate;
"AGREED FORM" means in a form agreed between the parties
and for the purposes of identification
initialled by or on behalf of the Vendor and
the Purchaser;
"BAA AGREEMENT" means the ▇▇▇▇ of Sale, Assignment and
Assumption Agreement in the Agreed Form to
be entered into on Completion by and between
the Vendor the Company and the Subsidiaries
concerning certain assets and liabilities
"BUSINESS DAY" means any day (other than a Saturday, Sunday
or public holiday) on which banks in the
City of London are generally open for business;
"COMPANY" means Serif (Europe) Limited (company number
2117968) further details of which are set out
in part 1 of Schedule 1;
"COMPLETION" means completion of this Agreement in accordance
with Clause 5;
"CONNECTED PERSON" has the same meaning as in Section 839 of the
Income and Corporation Taxes ▇▇▇ ▇▇▇▇;
"DIALOG 24" means Dialog 24 Limited (company no. 3910833)
being a wholly owned subsidiary of the Company
further details of which are set out in Part III
of Schedule 1;
"DISCLOSURE LETTER" means the letter of the same date of this
Agreement (including the 'agreed bundle' defined
therein) delivered by the Vendor to the
Purchaser which contains certain disclosures
against the Warranties;
"INTELLECTUAL PROPERTY
RIGHTS" means patents, trade marks, service marks,
registered designs, trade or business names,
know-how, copyright, design rights and other
intellectual property rights (or any
applications for any of such rights);
"INTER-COMPANY DEBT means the aggregate indebtedness of the
Company and the Subsidiaries to the Vendor on
the date of this Agreement;
"NEGATIVE PLEDGES" means the negative pledges to be issued by the
Company and Serif Inc. to the Vendor in the
Agreed Form;
"NEWCO SECURITY DOCUMENTS" means the guarantee and charge over shares to
be issued by the Purchaser to the Vendor in the
Agreed Form;
"OPTION LETTER" means the option letter in the Agreed Form to
be issued on Completion by the Vendor to
certain employees of the Company and Serif
Inc extending for the 12 month period
following Completion the latest option exercise
date of certain stock options held by such
employees in respect of common stock of the
Vendor;
"PRODUCTS" means the graphics software products of
the Company identified in Schedule 2;
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"PROMISSORY NOTE" means the promissory note in the principal
amount of $987,500 in the Agreed Form to be
issued on Completion by Serif Inc to the
Vendor.
"PURCHASE PRICE" means the consideration for the Shares as
set out in clause 4.1;
"PURCHASER" means GW 313 Limited, company number 3180821;
"PURCHASER'S SOLICITORS" means ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ of ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇ ▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇;
"RECOGNISED INVESTMENT
EXCHANGE" has the same meaning as in Section 207 of the
Financial Services ▇▇▇ ▇▇▇▇;
"RELEVANT DIRECTORS" means ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
and ▇▇▇▇▇ ▇▇▇▇▇▇▇ being certain directors of the
Purchaser;
"SERIF INC." means Serif Inc., being a wholly owned
subsidiary of the Company further details of
which are set out in Part II of Schedule 1;
"SERIF GMBH" means Serif GmbH a company incorporated in
Germany being a wholly owned subsidiary of the
Company further details of which are set out in
Part IV of Schedule 1;
"SHARES" means the 188,620 deferred ordinary shares of
BP1 each, the 2,327,903 ordinary shares of $1
each, the 188,620 ordinary shares of $0.0001
each the 21,460 deferred 8% preference
shares of BP1 each and the 21,460 8% preference
shares of $0.0001, in each case in the capital
of the Company;
"SOFTWARE LICENCE" means the software licence in the Agreed
Form to be granted by Software Publishing
Corporation to the Company on Completion in
respect of Harvard Graphics and other
Software Publishing Corporation software
products and including non-compete covenants
by Software Publishing Corporation;
"SUBSIDIARIES" means Dialog 24, Serif Inc. and Serif GmbH;
"TAXATION OR TAX" means all forms of tax, charge, rate, impost,
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duty, levy, liability or sum payable or formerly
payable in respect of income, profits,
distributions, gains, receipts turnover,
payroll or documents, the holding or
occupation of any land or interest in land or
otherwise at the instance of any revenue,
customs, excise, central state or local or
municipal government or other authority of
the United Kingdom, the United States of
America or elsewhere and all penalties charges
and interest relating to any liability
for or loss of relief from any of the foregoing;
"VENDOR" means Vizacom Inc.;
"VENDOR'S SOLICITORS" means ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ of ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇;
"Warranties" means the warranties set out in Schedule 3;
2. INTERPRETATION
2.1 The headings and table of contents in this Agreement are inserted for
convenience only and shall not affect its interpretation or construction.
2.2 References in this Agreement to Clauses and Schedules are, unless otherwise
stated, references to the Clauses of and Schedules to this Agreement.
References to paragraphs are references to the paragraphs of Schedules to
this Agreement.
2.3 The Schedules form part of this Agreement and shall have the same force and
effect as if expressly set out in the body of this Agreement.
2.4 Words and expressions defined in the Companies ▇▇▇ ▇▇▇▇ shall, unless they
are otherwise defined in this Agreement or the context otherwise requires,
bear the same meaning in this Agreement.
2.5 References to statutes shall include any statutory modification,
re-enactment or extension of such statute and any orders, regulations,
instruments or other subordinate legislation made pursuant to such statute
(in each case) on or before the date of this Agreement.
2.6 References in this Agreement to:-
2.6.1 the singular shall include the plural and vice versa; and
2.6.2 "persons" shall include bodies corporate, unincorporated
associations and partnerships.
3. SALE OF THE SHARES
3.1 The Vendor agrees to sell and the Purchaser agrees to buy the Shares free
from all liens, charges and encumbrances.
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3.2 The Shares are sold by the Vendor with full title guarantee.
4. CONSIDERATION
4.1 The consideration for the sale and purchase of the Shares shall be the
payment by the Purchaser to the Vendor of the sum of US $100 to be paid in
cash on Completion.
4.2 On Completion, the Purchaser shall also procure the repayment by Serif Inc.
to the Vendor in cash of US $150,000 of the Inter-Company Debt.
4.3 The Purchaser shall procure that Serif Inc. complies fully with the
provisions of the Promissory Note.
4.4 Save as set out in the Promissory Note, the balance of the Inter-Company
Debt shall have been capitalised by the Vendor prior to Completion. The
Vendor accordingly acknowledges that neither the Vendor nor any Affiliate
of the Vendor has any claim against the Company or Serif Inc. save as set
out in the Promissory Note or the BAA Agreement or the Software Licence.
4.5 Unless otherwise stated, the Vendor authorises the Purchaser to pay all
sums due under this Agreement to the Vendor's Solicitors. The receipt for
any moneys due under this Agreement by the Vendor's Solicitors will give a
full and valid discharge to the Purchaser.
4.6 Until the Promissory Note is repaid in full, the Vendor shall be entitled:-
4.6.1 if the Company is late in making at least one monthly payment under
the Promissory Note or in providing the information required under
clause 4.6.2 below, to examine the accounting records of the
Purchaser, the Company and Serif Inc, to the same extent as a
director of an English company; this right not to be exercised
more than once in any given year;
4.6.2 to receive monthly management accounts including a balance sheet,
profit and loss account and cash flow statement in respect of the
Company and Serif Inc. no later than 15 days after the end of the
month in question.
5. COMPLETION
5.1 The Purchaser shall not be required to complete the purchase of the Shares
unless all of the Shares are transferred at the same time and all of the
Vendor's obligations pursuant to Clauses 5.2 and 5.3 are satisfied in full.
Subject to this, the sale and purchase is to be completed at the offices
of the Purchaser's Solicitors immediately following exchange of this
aAgreement. On Completion:-
5.2 The Vendor shall deliver to the Purchaser:
5.2.1 duly executed transfers of the Shares in favour of the Purchaser (or
as it may direct) together with the share certificates for the
Shares;
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5.2.2 the common seal (if any), certificate of incorporation and
certificate of incorporation on change of name of the
Company and Serif Inc and Dialog24 Limited together with the
statutory books and minute books of those companies;
5.2.3 the written resignations in the Agreed Form of ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, and
▇▇▇▇ ▇▇▇▇▇▇▇ as directors and secretary of the Company. and the
Subsidiaries
5.2.4 the written resignations in the Agreed Form of Ernst & Young as
auditors of the Company and Dialog 24 Limited;
5.2.5 the BAA Agreement duly executed by the Vendor;
5.2.6 the Software Licence duly executed by Software Publishing
Corporation;
5.2.7 the Option Letter duly executed by the Vendor;
5.3 The Vendor and the Purchaser will then procure that a board meeting of the
Company and the Subsidiaries are held at which:-
5.3.1 such persons as the Purchaser may nominate are appointed as director
and secretary;
5.3.2 BDO ▇▇▇▇ ▇▇▇▇▇▇▇ are appointed as auditors;
5.3.3 all bank mandates and authorities are amended in such terms as the
Purchaser may require; and
5.3.4 in respect of the board meeting relating to the Company the
transfers referred to in Clause 5.2.1 are approved for registration
(subject only to stamping);
5.4 The Purchaser will then:-
5.4.1 pay or procure the payment of the amounts referred to in clauses 4.1
and 4.2 to the Vendor's Solicitors by means of banker's draft or
telegraphic transfer;
5.4.2 deliver to the Vendor the Software Licence, the Promissory Note and
the BAA Agreement duly executed by the Company and its Subsidiaries;
and
5.4.3 deliver to the Vendor the Newco Security Documents duly executed by
the Purchaser and the Negative Pledges duly executed by the Company
and Serif Inc.
5.5 Title to the Shares will pass to the Purchaser upon Completion.
6. WARRANTIES OF THE VENDOR
6.1 The Vendor warrants to the Purchaser in the terms set out in Schedule 3 as
at Completion.
6.2 The Warranties are given subject to:-
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6.2.1 those matters which are fairly disclosed in the Disclosure Letter;
and
6.2.2 any matters of which the Purchaser is aware on or before the date of
this Agreement. For this purpose, the knowledge of the Purchaser
shall be anything of which any Relevant Director is actually aware
or would have been aware if he had made enquiries of employees and
advisers of the Company into the subject matter of the Warranty.
6.3 The Vendor warrants to the Purchaser that the information contained in the
Disclosure Letter:
6.3.1 is true and accurate in all material respects; and
6.3.2 does not omit anything which would make such information untrue,
incorrect or misleading in any material respect.
6.4 Each of the Warranties gives rise to a separate and independent obligation;
the interpretation of each of the Warranties is not to be limited by
reference to any other Warranty or the provisions of this Agreement.
6.5 All Warranties which relate to the knowledge, information, belief or
awareness of the Vendor are given by it only based on the actual knowledge,
information and belief of the current officers of the Vendor.
6.6 Any payment required to be made by the Vendor pursuant to the Warranties is
to be paid in cash.
6.7 No claim may be made against the Vendor for breach of the Warranties (other
than the Warranties relating to Taxation) unless notice is served on the
Vendor within two years of Completion. Such notice shall provide sufficient
information to enable the Vendor to identify the subject matter of the
claim and, where practicable, an estimate of the amount of the claim.
6.8 No claim may be made against the Vendor for breach of the Warranties
relating to Taxation unless notice is served on the Vendor within 7 years
of Completion. Such notice shall provide sufficient information to enable
the Vendor to identify the subject matter of the claim and, where
practicable, an estimate of the amount of the claim.
6.9 The Vendor shall not be liable for any breach of the Warranties unless the
amount claimed by the Purchaser in respect of such breach or claim when
aggregated with all other claims for breach of the Warranties exceeds US
$25,000 in which case the Vendor will be liable only for the excess amount
of such claims.
6.10 The aggregate liability of the Vendor for all claims made for breach of the
Warranties shall not exceed US $400,000.
6.11 No claim may be made by the Purchaser for breach of the Warranties to the
extent to which the claim is covered by insurance or relates to any matter
provided for or included as a liability or disclosed in the Accounts or the
Financial Statements (as defined in
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Schedule 3) or to the extent that a claim arises as a result of any change
of law occurring after the date of this Agreement.
6.12 Any claim made by the Purchaser for breach of the Warranties shall take
into account the extent to which the Purchaser has previously recovered or
recovers compensation from a third party in relation to the subject matter
of the claim. The Purchaser shall use its best endeavours to prosecute
efficiently any such claims for recovery from third parties.
6.13 No claim may be made under the Warranties to the extent that the Purchaser
has previously made a claim and received compensation under the Warranties
in respect of the same breach or subject matter.
6.14 The Vendor shall not be liable under the Warranties in respect of any claim
based upon information provided to the Vendor or its advisers by any of the
Relevant Directors.
6.15 The Purchaser shall not be entitled to set-off any amounts due by the
Purchaser or the Company or Serif Inc. to the Vendor pursuant to the terms
of this Agreement or the Promissory Note against the amount of any claim
under the Warranties.
7. WARRANTIES OF THE PURCHASER
7.1 The Purchaser warrants to the Vendor that:-
7.1.1 the Purchaser is duly incorporated and validly existing under the
laws of the United Kingdom and has full corporate power to enter
into and complete this Agreement and the Newco Security Documents
and the Company and Serif Inc. have full corporate power and
authority to enter into and complete the Promissory Note, the
Software Licence, the Negative Pledges and the BAA Agreement;
7.1.2 the execution and delivery by the Purchaser of this Agreement and of
the Newco Security Documents, the performance by the Purchaser of
its obligations under this Agreement, and the execution by the
Company and Serif Inc. of the Promissory Note, the Software Licence,
the Negative Pledges and the BAA Agreement, has been duly and
validly authorised by the board of directors of the relevant
company;
7.1.3 this Agreement has been duly and validly executed by the Purchaser
and constitutes, and upon the execution and delivery by the
Purchaser and (as the case may be) the Company of the Newco Security
Documents, the Negative Pledges, Promissory Note, the Software
Licence and the BAA Agreement, this Agreement and such other
documents will contribute legal, valid and binding obligations
of (as the case may be) the Purchaser or the Company or Serif Inc.
enforceable in accordance with its terms; and
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7.1.4 the execution and delivery by the Purchaser of this Agreement and
of the Newco Security Documents and the execution by the
Company and Serif Inc. of the Promissory Note, the Software
Licences, the Negative Pledges and the BAA Agreement together with
the performance by the Purchaser or (as the case may be) the
Company of its obligations under this Agreement or under such other
documents, does not and will not conflict with or result in a
violation of any of the provisions of the constitutional documents
for the time being of the Purchaser or (as the case may be) the
Company
7.2 The maximum aggregate liability of the Purchaser in respect of all or any
claims made by the Vendor for breach of the warranties set out in this
clause 7 shall be limited to and shall not exceed $400,000.
8. RESTRICTIONS ON THE VENDOR
8.1 For the purpose of assuring to the Purchaser the full benefit of the
goodwill and business of the Company and in consideration of the agreement
of the Purchaser to purchase the Shares on the terms of this Agreement, the
Vendor hereby agrees and undertakes with and represents and warrants to the
Purchaser and its successors in title as separate agreements, undertakings,
representations and warranties that except insofar as it may be authorised
to do so by the Purchaser in writing, the Vendor shall not and the Vendor
shall procure that any Affiliate of the Vendor shall not:-
8.1.1 for the period of two years after Completion be either directly or
indirectly interested or engaged in any manner or capacity
whatsoever in the development or sale or in any other company or
business (except as the holder of not more than 5% in aggregate of
the issued share capital of a company where such shares are for
the time being listed or dealt with on any Recognised Investment
Exchange) which is engaged in the development or sale of any
graphics software products ("Competing Products") which are
competitive with any of the Products;
8.1.2 for the period of two years after Completion, directly sell to any
person any Competing Products or procure orders from or do business
with any person, firm or company which has at any time during the
period of 12 months prior to the date of this Agreement been a
customer of or done business with the Company or any of the
Subsidiaries provided that this shall not prohibit the procuring of
any order or commissions or the doing of business which in no way
concerns a Competing Product.
8.2 The Vendor acknowledges that the restrictions contained in this clause 8
are reasonable in all the circumstances but in the event that any such
restriction shall be found to be void but would be valid if some part
thereof was deleted or the period or
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area of application reduced, such restrictions shall apply with such
modification as may be necessary to make it valid and effective.
8.3 The Vendor acknowledges and agrees that the Purchaser, the Company and the
Subsidiaries shall be entitled to implement any convergence marketing (as
such term is defined in promotional literature of the Vendor) program which
it deems appropriate without any claims, liabilities, royalties or other
payments to the Vendor in respect thereof, so long as no Intellectual
Property Right of the Vendor or any of its Affiliates is used in connection
therewith.. The Vendor expressly waives any rights which it may have to
receive any royalties or payments in relation thereto.]
9. NAME AND GOODWILL
The Vendor undertakes to the Purchaser that it will not at any time after
Completion use the name "Serif" (whether as a corporate or trading name or
otherwise) or any other name which is identical to or liable to be confused
with such name.
10. ANNOUNCEMENTS
Save as may be required by law or the regulations of any Recognised
Investment Exchange, no announcement relating to the sale and purchase of
the Shares shall be made by either party without the prior written consent
of the other party.
11. FURTHER ASSURANCE
11.1 The Vendor and the Purchaser shall each do and execute all such further
acts, things, deeds and documents as may be necessary or reasonably
requested by the other to give effect to the terms of this Agreement and to
vest in the Purchaser title to the Shares.
11.2 The Purchaser shall use its best endeavours to procure that the employees
of the Company and the Subsidiaries shall co-operate as reasonably required
(including reasonable payment for expenses incurred) with regard to the
litigation or potential litigation between the Vendor and the former
shareholders of respectively Junction 15 Limited and Intermethods Limited
and in any way concerning all or any of the liabilities assumed by the
Vendor pursuant to the BAA Agreement.
11.3 The Vendor shall use its best endeavours to procure that the employees of
the Vendor and its Affiliates shall cooperate as reasonably required
(including reasonable payment for expenses incurred) in any way concerning
the assets to be transferred or liabilities to be assumed by the Company
and the Subsidiaries pursuant to the BAA Agreement.
11.4 Each of the parties shall deliver to the other any documents or records
held by it relating exclusively to the affairs of that other or that
other's Affiliates upon written request.
12. NOTICES
12.1 Any notice required to be given pursuant to this Agreement shall be in
writing signed by, or on behalf of, the person issuing the notice. Notices
may be served by personal
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delivery, recognised overnight courier service, recorded delivery post
or facsimile transmission:-
12.1.1 in the case of the Vendor, to the address set out at the beginning
of this Agreement or the principal business address of the Vendor
from time to time with a copy to ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ of 50 ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ Boulevard, ▇▇▇▇▇▇▇ Field, New York 11553, United States of
America for the attention of ▇▇▇▇ ▇▇▇▇▇▇▇; and
12.1.2 in the case of the Purchaser, to its registered office for the time
being.
12.2 Notices served in accordance with Clause 12.1 shall be deemed to have been
received:-
12.2.1 if delivered personally or by recognised overnight courier,, upon
delivery (unless such delivery takes place on a day which is not a
Business Day or after 5.00p.m. on a Business Day, in which case
notice will be deemed to have been received at 10.00a.m. on the next
Business Day);
12.2.2 if served by recorded delivery post, at the close of business on the
Business Day following the date of delivery; and
12.2.3 if served by facsimile transmission, upon receipt of confirmation
that the notice has been transmitted (unless such transmission takes
place on a day which is not a Business Day or after 5.00p.m. on a
Business Day, in which case notice will be deemed to have been
received at 10.00a.m. on the next Business Day).
12.3 In proving service by post it will be necessary only to prove that the
notice was properly stamped, addressed and posted. In proving service by
recognised overnight courier, it will be necessary only to prove that the
notice was property addressed and delivered to the overnight courier
13. ASSIGNMENT
No part, shall be entitled to assign this Agreement (or benefit or burden
of any part or parts of it) without the prior written consent of the other
party.
14. COUNTERPARTS
This Agreement may be executed in one or more parts, each of which when
executed shall be an original. All counterparts together shall constitute
one and the same agreement.
15. ENTIRE AGREEMENT AND VARIATIONS
15.1 This Agreement (together with the documents referred to in this Agreement)
constitutes the entire agreement between the parties with respect to all
matters referred to in it. [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
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warranty not contained in this Agreement unless such representation or
warranty was made fraudulently.
15.2 No variations to this Agreement shall be effective unless made in writing
and signed by all the parties.
16. COSTS
16.1 Each party shall bear the costs of its own financial accountancy and legal
advice in relation to this Agreement.
16.2 Stamp duties, documentary taxes, property transfer taxes and any other
taxes fees or charges which may be payable on or in respect of this
Agreement and any other document which should be brought into existence for
the purpose of giving effect hereto or on or in respect of any transaction
or transfer of property pursuant hereto shall save as otherwise expressly
agreed be performed by the party which would usually and customarily pay
the same which (for the avoidance of doubt) means the Purchaser in the case
of any stamp duty on the transfer of the Shares pursuant to this Agreement.
17. SURVIVAL OF CERTAIN PROVISIONS
This Agreement shall remain in full force and effect after Completion in
respect of any matters, covenants or conditions which shall not have been
fulfilled or performed prior to Completion and the Warranties and all other
obligations given or undertaken shall (except for any obligations fully
performed) continue in full force and effect notwithstanding Completion.
18. WAIVERS
No omission to exercise or delay in exercising on the part of any party to
this Agreement any right, power or remedy provided by law or under this
Agreement shall constitute a waiver of such right, power or remedy or any
other right, power or remedy or impair such right, power or remedy. No
single or partial exercise of any such right, power or remedy shall
preclude or impair any other or further exercise thereof or the exercise of
any other right, power or remedy provided by law or under this Agreement.
19. GOVERNING LAW
This Agreement shall be governed by and construed in accordance with
English law. The parties agree to submit to the non-exclusive jurisdiction
of the English Courts as regards any claim or matter arising under this
Agreement.
IN WITNESS of which the parties have executed this Agreement on the date set out
above.
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SCHEDULE 1
DETAILS OF THE COMPANY AND THE SUBSIDIARIES
PART I
SERIF (EUROPE) LIMITED
NAME: Serif (Europe) Limited
REGISTERED OFFICE: ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇
COMPANY NUMBER: 2117968
DATE OF INCORPORATION: 1 April 1987
AUTHORISED SHARE CAPITAL: 188,620 Deferred Ordinary Shares of
BP1 each, 2,327,903 Ordinary Shares
of $1 each, 188,620 Ordinary Shares
of $0.0001 each, 21,460 Deferrred 8%
Preference Shares of BP1 each and 21,460
8p Preference Shares of $0.0001 each
ISSUED SHARE CAPITAL: The Shares
DIRECTORS: ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇ and
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
SHAREHOLDER: Vizacom Inc.
CHARGES/MORTGAGES: Mortgage Debenture dated 9 October 1989
and Charge over Credit Balances dated 11
October 1994 in favour of National
Westminster Bank plc
PART II
NAME: Serif Inc
REGISTERED OFFICE: n/a
COMPANY NUMBER: n/a
DATE OF INCORPORATION: 28 January 1988
AUTHORISED SHARE CAPITAL: 1,000 Shares of Common Stock, no par
value
ISSUED SHARE CAPITAL: 121.405
DIRECTORS: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and ▇▇▇▇ ▇▇▇▇▇▇▇
SHAREHOLDER: Serif (Europe) Limited
13
CHARGES/MORTGAGES: See Disclosure Letter
PART III
DIALOG 24 LIMITED
NAME: Dialog24 Limited
REGISTERED OFFICE: ▇▇▇▇ ▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇
COMPANY NUMBER: 3910833
DATE OF INCORPORATION: 20 January 2000
AUTHORISED SHARE CAPITAL: BP1,000 divided into 1,000 Ordinary
Shares of BP2 divided into 2 Ordinary
Shares of BP1 each
ISSUED SHARE CAPITAL:
DIRECTORS: ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇
SHAREHOLDER: Serif (Europe) Limited
CHARGES/MORTGAGES: None.
PART IV
SERIF GMBH
NAME: Serif GmbH
REGISTERED OFFICE: Handelsregister Aachen
COMPANY NUMBER: HRB 8054
DATE OF INCORPORATION: 14 January 1999
AUTHORISED SHARE CAPITAL: 25,000 Euros
ISSUED SHARE CAPITAL: 25,000 Euros
DIRECTORS: ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
SHAREHOLDER: Serif (Europe) Limited
CHARGES/MORTGAGES: None
14
SCHEDULE 2
The Graphics Software Products
1. PagePlus Desk top publishing range
2. DrawPlus Graphics and illustration range
3. PhotoPlus Digital image editing range
4. 3DPlus Three dimensional graphic editing range
5. WebPlus Website authoring range
6. Clip art and stock photograph collections
15
SCHEDULE 3
WARRANTIES
1. INTERPRETATION
In this Schedule 3, the following expressions shall have the following
meanings:-
"COMPANY" notwithstanding the definition contained
in clause 1, the Company and each
of the Subsidiaries as if the Warranties
were set out in full in respect of each
such company save as expressly stated
otherwise in this Schedule;
"CONTRACT" any agreement, arrangement or
understanding whether legally binding
or not.
2. CAPACITY
The execution and delivery of and performance by the Vendor of its
obligations pursuant to this Agreement will not conflict with, or
result in a breach of:-
2.1 any contract or arrangement to which the Vendor is a party or subject; or
2.2 any order, judgement, ordinance, regulation or other restriction relating
to the Vendor imposed by a regulatory body or court having jurisdiction
over it.
3. THE SHARES
3.1 The Shares comprise the entire issued share capital of Serif (Europe)
Limited. So far as the Vendor is aware, no other person has been granted
any right or option to subscribe for any share or loan capital in the
Company whether exercisable now or at any time in the future.
3.2 There are no rights of pre-emption over or restrictions relating to the
sale of the Shares which might operate to restrict the sale of the Shares
to the Purchaser.
3.3 The information contained in Schedule 1 with respect to Serif Inc. is
complete and accurate in all respects.
4. THE ACCOUNTS AND FINANCIAL STATEMENTS
Attached hereto as Schedule 4 are the unaudited internal financial
statements of Serif Inc. (the "Financial Statements") for the calendar year
ended December 31, 2000.
4.1 For the relevant periods, the Financial Statements: (1) present fairly
the financial position of Serif Inc. at such dates and the results of
operations and cash flows for the respective periods ended on such
dates; and (2) were prepared on a basis consistent with the
consolidated financial statements of Vendor (which have been prepared
in accordance with United States generally
16
accepted accounting principles ("GAAP")), subject to normal
adjustments and do not contain footnotes that would be required by
GAAP. The Financial Statements are in accordance with the books and
records maintained by Serif Inc.
4.2 As at December 31, 2000, Serif Inc. had no liabilities, commitments or
obligations of any nature, not shown and adequately provided for in
the Financial Statements as of such date or in the Schedules to this
Agreement.
5 TAXATION
5.1 SERIF INC.
(a) True and correct copies of Serif Inc.'s New Hampshire state income tax
returns (unitary filing) for the years ended December 31, 1998 and
1999, have been delivered to Buyer. All tax returns (including
information returns) required by any jurisdiction to have been filed
by or with respect to Serif Inc. have been timely filed, except for
returns with respect to which extensions have been granted, and each
such return is true, correct and complete.
(b) Except as set forth in Schedule 4, all liabilities of Serif Inc. to
any jurisdiction for taxes of every kind and nature, including
interest thereon and penalties with respect thereto, (collectively
"Taxes") relating to any period prior to 31 December 2000 have been
timely paid by Serif Inc. or are accrued and provided for in the
Financial Statements for the period ended December 31, 2000. Any
liability for Taxes incurred by Serif Inc. since December 31, 2000 was
incurred in the ordinary course of business.
(c) Neither the Internal Revenue Service nor any state, local or other
taxing authority has proposed any additional taxes, interest or
penalties with respect to Serif Inc. or any of their operations or
business; there are no pending or threatened tax claims or
assessments; and there are no pending or threatened tax examinations
by any taxing authorities.
(d) Serif Inc. has not given any waivers of rights (which are currently in
effect) under applicable statutes of limitations with respect to the
federal income tax returns for any fiscal year. Serif Inc. has not
consented to the application of Section 341(f) of the Code.
(e) Since August 31, 1996, Serif Inc. has been a "C" corporation, as
defined in Section 1361(a) of the Code.
17
5.2 Serif Inc has available net operating loss carryforwards of at least
$6,300,000 for U.S. Federal income tax purposes, after giving effect to
projected losses in 2000.
5.3 SERIF (EUROPE) LIMITED
The Vendor has not received any notice, claim or correspondence from any
Taxation authority with regard to the Taxation affairs of Serif (Europe)
Limited which has not been copied to the Relevant Directors.
6. EVENTS SINCE THE ACCOUNTS DATE
6.1 Since the Accounts Date to the knowledge of the Vendor:-
6.1.1 Serif Inc. has carried on its business in the ordinary and usual
course without any material interruption or alteration in the nature,
scope or manner of its operation except pursuant to the transactions
contemplated by this Agreement;
6.1.2 Serif Inc. has not disposed of any assets or assumed any liabilities
otherwise than in the ordinary and normal course of carrying on its
business;
7. LITIGATION
7.1 So far as the Vendor is aware, Serif Inc. is not at present engaged whether
as plaintiff, defendant or otherwise in any material legal action,
proceedings or arbitration in connection with its business or otherwise.
7.2 So far as the Vendor is aware, there is no material claim, legal action,
litigation, arbitration or prosecution, pending, current or threatened by
or against Serif Inc. or to which Serif Inc. is or may become a party or in
respect of which Serif Inc. is or may become vicariously liable or liable
to indemnify any party concerned.
8. CONTRACTUAL COMMITMENTS
Neither the Vendor nor any Affiliate of the Vendor (other than the Company)
nor any of their respective officers or employees has committed the Company
to any Contract of which the Relevant Directors are not actually aware save
to the extent disclosed in the Disclosure Letter.
9. TITLE
So far as the Vendor is aware, Serif Inc. is the legal and beneficial owner
of all of the assets used by it in its business and none of its assets are
subject to any leasing, hire purchase, contract hire, rental, credit sale
or similar agreement or arrangement or any lien, charge or encumbrance or
other third party right save to the extent set out in the Disclosure
Letter.
18
10. INTELLECTUAL PROPERTY
10.1 Neither the Vendor nor any Affiliate of the Vendor (other than the Company)
has any interest or right in the Intellectual Property Rights which are
owned by or used in the business of the Company save for Intellectual
Property Rights licensed pursuant to the Software License.
10.2 No notice has been given by a third party to ▇▇▇▇ ▇▇▇▇▇▇▇ or ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ to the effect that the processes employed in the products,
computer software and services dealt in by the Company infringe any
Intellectual Property Rights (whether registered or not) vested in any
other party.
10.3 Neither the Vendor nor any Affiliate of the Vendor (other than the Company)
has transferred any of the Intellectual Property Rights owned by or used in
the business of the Company.
11. INSOLVENCY
11.1 No resolutions have been passed and so far as the Vendor is aware, no order
has been made or any other proceeding commenced in respect of the
insolvency of Serif Inc.
11.2 So far as the Vendor is aware, no distress, execution or other process
which remains undischarged has been levied on the assets of Serif Inc.
EXECUTED as a DEED by )
VIZACOM INC. acting by:- ) /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
)
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
EXECUTED as a DEED by GW 313 LIMITED )
acting by:- )
) Director /s/ ▇▇▇▇ ▇▇▇▇▇
) --------------------
)
) Director/Secretary /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
--------------------
19