EXHIIBT 2.1
DATED 2002
BETWEEN:
(1) Authoriszor Inc.
(2) R ▇▇▇▇▇▇▇▇
G ▇▇▇▇▇▇
Zalcany Limited
Noblepoint Limited
-and-
(3) Authoriszor Holdings Limited
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INVESTMENT AGREEMENT
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SHULMANS
SOLICITORS
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Tel: ▇▇▇▇ ▇▇▇ ▇▇▇▇
Fax: ▇▇▇▇ ▇▇▇ ▇▇▇▇
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THIS AGREEMENT is made the day of July 2002
PARTIES:
(1) AUTHORISZOR INC of ▇ ▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇ (`the
Founder');
(2) THE PERSONS whose names and addresses are set out in Schedule 1 (`the
Investors');
(3) AUTHORISZOR HOLDINGS LIMITED a company registered in England under Number
3873915 whose registered office is at ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇ (`the Company').
RECITALS:
(A) The Company is a private company limited by shares incorporated on 9th
November 1999 under the Companies ▇▇▇ ▇▇▇▇ and has at the time of
execution of this Agreement an authorised share capital of
(pound)10,500,000 divided into 200,000 Ordinary Shares of (pound)1 each
and 10,300,000 Redeemable Shares of (pound)1 each of which 100,000
Ordinary Shares and all of the Redeemable Shares have been issued and
are fully paid or credited as fully paid. Further particulars relating
to the Company are set out in Schedule 2.
(B) The Founder is the registered holder and beneficial owner (free of any
Encumbrance (as hereinafter defined)) of all of the issued shares
referred to in Recital (A) in the capital of the Company.
(C) The persons specified as directors in Schedule 2 are the only directors
of the Company at the date hereof.
(D) The Founder has agreed that on Completion (as hereinafter defined) the
Founder will sign a written resolution of the Company to pass, as a
special resolution of the Company, the resolution set out in the
Written Resolution (as hereinafter defined) for, amongst other things,
the increase in the authorised share capital of the Company and the
reorganisation thereof and the adoption of new articles of association;
and upon the passing and implementation thereof the authorised share
capital of the Company will be divided into 10,500,000 Ordinary Shares
of (pound)1 each and 220,000 Preferred Ordinary Shares of (pound)1
each.
(E) The Investors have agreed to subscribe for 192,306 Preferred Ordinary
Shares in the increased and reorganised share capital of the Company
upon the terms and conditions hereinafter contained.
(F) The Founder and the Investors have agreed to enter into this Agreement
for the purpose of regulating their relationship with each other and
certain aspects of the affairs of and their dealings with the Company.
(G) The Subsidiaries (as hereinafter defined) are the only subsidiaries of
the Company at the date hereof.
NOW IT IS HEREBY AGREED as follows:
1 Definitions and interpretation
In this Agreement (which expression shall be deemed to include the Schedules
hereto):
(1) unless there be something in the subject or context inconsistent
therewith the following expressions have the following meanings:
`agreed form' means in the form previously agreed by or on
behalf of the parties to this Agreement and
signed for the purposes of identification by
or on behalf of the parties or in the form
attached to this Agreement;
`the Articles' means the articles of association from time
to time of the Company (and any reference to
an `Article' shall be a reference to that
article of the said articles of
association);
`associate' has the meaning given by Section 435 of the
Insolvency ▇▇▇ ▇▇▇▇;
`the Auditors' means the auditors from time to time of the
Company;
`the Board Minutes' means the minutes of a meeting of the board
of directors of the Company in the form set
out in Schedule 4;
`the Business Plan' means the business plan of the Company
prepared by ▇▇▇▇▇▇ ▇▇▇▇▇▇ in the agreed
form;
`the Companies Act' means the Companies ▇▇▇ ▇▇▇▇;
`Completion' means the performance by the parties of the
obligations assumed by them respectively
under Clause 3;
`Deed of Adherence' means a deed in the form set out in Schedule
9 or a deed in such other form as the
Shareholders may agree;
`the Directors' means the directors of the Company from time
to time;
`Emoluments' means emoluments of every description
including, without limitation, salaries,
directors' fees, bonuses, commissions,
profit shares under any incentive scheme,
pension contributions payable by any member
of the Group and benefits in kind as
quantified for income tax purposes;
`Encumbrance' means and includes any interest or equity of
any person (including, without prejudice to
the generality of the foregoing, any right
to acquire, option or right of pre-emption)
or any mortgage, charge, pledge, lien or
assignment or any other encumbrance priority
or security interest or arrangement of
whatsoever nature over or in the relevant
property;
`group' means, in relation to a company, that
company and any company which is from time
to time a holding company of that company or
a subsidiary of that company or of such
holding company;
`the Group' means the Company and its subsidiaries from
time to time;
`the New Articles' means the new articles of association in the
agreed form to be adopted by the Company on
Completion;
`the Nominated Directors' means the directors of the Company appointed
by the Investors pursuant to Article 18 and
holding office from time to time and, unless
otherwise stated, includes their duly
appointed alternates; the first Nominated
Director shall be ▇▇▇ ▇▇▇▇▇▇▇;
`Ordinary Shares' means the ordinary shares in the capital of
the Company (and which are not Preferred
Ordinary Shares) having the rights and
obligations attaching to such shares as set
out in the New Articles;
`the parties hereto' means the Shareholders and the Company;
`Preferred Ordinary Shares' means the preferred ordinary shares in the
capital of the Company having the rights and
obligations attaching to such shares as set
out in the New Articles;
`the Shareholders' means all those persons holding shares in
the capital of the Company and who are
parties to this Agreement from time to time
(and the expression `Shareholder' shall be
construed accordingly);
`share' means a share in the capital of the Company
of whatever class;
`the Subscription Shares' means the 192,306 Preferred Ordinary Shares
to be subscribed by the Investors as
mentioned herein;
`the Subsidiaries' means the subsidiaries of the Company at the
date hereof, particulars of which are set
out in Schedule 3;
`Tax' has the meaning given to it in Schedule 8;
`Tax Covenant' has the meaning given to it in Schedule 8;
`the Warranted Information' means all the information (including for the
avoidance of doubt all supporting schedules
and other information, whether or not such
supporting schedules or other information is
required to be filed) relating to the
Company that has been or will be reported in
The Securities and Exchange Commission form
10-QSB quarterly report under Section 13 or
15 (d) of the Securities Exchange Act of
1934 for the Founder dated 31st March 2002,
which has been filed or will be filed on or
after the date of this Agreement (and which
is or will be substantially in the form
attached to this Agreement);
`the Warranties' means the warranties, representations and
undertakings referred to in Clause 5;.
`the Written Resolution' means the written resolution of the Company
in the form set out in Schedule 5.
(2) reference to any statute or statutory provision includes a reference to
that statute or statutory provision as from time to time amended,
extended or re-enacted.
(3) subject as herein otherwise expressly defined, words and phrases
defined in the Companies Act (but excluding any statutory modification
thereof not in force on the date of this Agreement) and in the Articles
bear the same respective meanings.
(4) where the context admits, references to a `subsidiary' include
references to a `subsidiary undertaking' and references to a `holding
company' include references to a `parent undertaking'.
(5) unless otherwise specified, words importing the singular include the
plural, words importing any gender include every gender, and words
importing persons include bodies corporate and unincorporate; and (in
each case) vice versa.
(6) reference to Clauses and other provisions are references to Clauses and
other provisions of this Agreement and any reference to a sub-provision
is, unless otherwise stated, a reference to a sub-provision of the
provision in which the reference appears.
(7) the headings shall not affect the interpretation of this Agreement.
(8) the expressions `hereunder', `hereto', `herein', `hereof' and similar
expressions relate to this entire Agreement and not to any particular
provision thereof.
(9) any undertaking by any of the parties hereto not to do any act or thing
shall be deemed to include an undertaking not to permit or suffer the
doing of that act or thing.
(10) references to this Agreement or any other document shall, where
appropriate, be construed as references to this Agreement or such other
document as varied, supplemented, novated and/or replaced in any manner
from time to time.
(11) references to any English legal or accounting term for any action,
remedy, method of judicial proceeding, insolvency proceeding, event or
incapacity, legal or accounting document, legal or accounting status,
court, governmental or administrative authority or agency, accounting
body, official or any legal or accounting concept practice or principle
or thing shall in respect of any jurisdiction other than England be
deemed to include what most approximates in that jurisdiction to the
English legal or accounting term concerned.
(12) The Schedules to this Agreement form part of and are deemed to be
incorporated into this Agreement.
2 Subscription
The Investors, in full reliance upon the Warranties and the Tax Covenant, shall
subscribe for192,306 Preferred Ordinary Shares upon the terms and conditions
hereinafter contained.
3 Completion
(1) Completion shall take place at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇ ▇▇▇
immediately after the execution of this Agreement.
(2) On Completion:
(a) The Founder shall execute the Written Resolution in order to
increase and reorganise the share capital of the Company, to
grant the Directors authority to allot shares as specified in
the special resolution, and to adopt the New Articles:
(b) The Investors shall subscribe for the Subscription Shares in
the number of shares and for the total consideration appearing
against their respective names in column (4) of Schedule 1
(and the balance paid in respect of each share over and above
(pound)1 shall be regarded as premium) and shall accordingly
complete, sign and deliver to the Company an application form
(in the form set out in Schedule 6) accompanied by a cheque
for either the total consideration or if a concession of a
part-payment on the shares has been agreed such part-payment
as may be shown against their respective names in column (5)
of Schedule 1 in favour of the Company in payment therefor.
(c) The Founder shall procure the following to be done:
(i) a meeting of the directors shall be held at which the
business referred to in the Board Minutes shall be
transacted and all documents and forms referred to
therein shall be executed and signed;
(ii) the register of members of the Company shall be
written up to reflect the subscription referred to in
paragraph (b) and a definitive certificate in respect
of the Subscription Shares shall be issued in favour
of and delivered to each of the Investors;
(iii) each of the new directors referred to in part 2 of
Schedule 12 shall be appointed as directors of the
relevant company(y)(ies) set out opposite their
respective name in that part of the Schedule and
shall enter into an undertaking with the Company and
the Investors in the form set out in Schedule 10 and
executed copies thereof shall be delivered to the
Investors;
(iv) ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Shingles shall enter into an
undertaking with the Company and the Investors in the
form set out in Schedule 10 and an executed copy
thereof shall be delivered to the Investors;
(v) the persons referred to in part 1 of Schedule 12
shall resign as officers of the relevant
company(y)(ies) set out opposite their respective
name in that part of the Schedule;
(vi) ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ shall be appointed as company
secretary of the Company, WRDC Limited, Authoriszor
Limited, Logsys Limited and PAD (London) Limited;
(vii) that ▇▇▇▇▇▇ ▇▇▇▇▇▇ shall vary his service contract
formally in writing with Authoriszor Limited to
incorporate the following terms;
(i) basic salary(pound)100,000 per annum
(ii) car allowance(pound)1,000 per month
(iii) company pension contribution - 5% of basic
salary
(iv) bonus payable quarterly in arrears
calculated at 20% NPBT per quarter
or(pound)25,000 per quarter whichever is the
lesser.
(d) The Founder shall subscribe for 41,592 Ordinary Shares for the
total consideration of (pound)41,592 by way of converting its
loan to the Company in the sum of (pound)41,592 to share
capital and shall accordingly complete, sign and deliver to
the Company an application form (in the form set out in
Schedule 11).
(e) The obligation of the Investors to subscribe for the
Subscription Shares shall be conditional upon the provisions
of paragraphs (a), (c) and (d) being fully complied with and
until such time the cheques referred to in paragraph (b) shall
be held to the order of the Investors. If any of the said
provisions are not fully complied with within 6 hours after
the execution hereof any of the Investors may rescind this
Agreement by giving notice in writing to the Company.
(3) The Founder shall procure that within the time limits prescribed by
statute those documents and forms referred to in the Board Minutes
which require filing with the Registrar of Companies shall be so filed.
4 Warranties
(1) The Founder warrants and represents to and undertakes with the
Investors that:
(a) in relation to the Company, each of the provisions of Schedule
7 (other than those, if any, expressed to relate to any of the
Subsidiaries) is true and correct in every particular or (as
the case may be) has been wholly performed in every
particular; and
(b) in relation to each of the Subsidiaries, each of the
provisions of Schedule 7 (other than those which, expressly or
by implication, relate only to the Company or to another of
the Subsidiaries) if repeated in full with the substitution of
the Subsidiary's name for the Company therein (and in any
expressions used therein and which are defined elsewhere in
this Agreement), and those provisions of the same Schedule
which expressly relate to that Subsidiary or to the
Subsidiaries generally is true and correct in every particular
or (as the case may be) has been wholly performed in every
particular.
(2) The Warranties shall continue in full force and effect notwithstanding
Completion and notwithstanding the Founder ceasing to be a shareholder
in the Company.
(3) In the event of a breach of any of the Warranties the Founder shall at
the option of the Investors who hold a majority in nominal value of the
Preferred Ordinary Shares (but without prejudice to any other right or
remedy which the Investors may have in respect of the breach) make good
to the Group the amount (`the Claim Amount') necessary to put the Group
into the position which would have existed if there had not been a
breach of the Warranties by a payment in cash to the Company.
In addition the Founder shall pay to the Investors all costs and
expenses incurred by the Investors as a result of such breach.
(4) The Company hereby covenants with the Investors that any sum which the
Company may receive pursuant to sub-clause (3) shall be applied by it
in a proper and efficient manner and for its own benefit.
(5) None of this information supplied by the Company or its subsidiaries or
their or its professional advisers on or prior to the date of this
Agreement to the Founder or its agents, representatives or advisers in
connection with the Warranties, or otherwise in relation to the
business or affairs of the Company or its subsidiaries, shall be deemed
a representation, warranty or guarantee of its accuracy by the Company
or its subsidiaries to the Founder and shall not constitute a defence
to any claim by the Investors under the Warranties, and the Founder
waives any and all claims which it might otherwise have against the
Company and its subsidiaries its and their officers and employees.
5 Management of the Company
(1) The Company undertakes with the Investors that (save as otherwise
provided or contemplated in this Agreement or in the Business Plan) it
will (and it will procure that each of the other members of the Group
will):
(a) carry on and conduct its business and affairs in a proper and
efficient manner and for its own benefit and in accordance
with the Business Plan;
(b) transact all its business on arm's length terms;
(c) not enter into any agreement or arrangement restricting its
competitive freedom to provide and take goods and services by
such means and from and to such persons as it may think fit;
(d) ensure that its business, other than routine day to day
business, shall be undertaken and transacted by the Directors;
(e) carry on its business pursuant to policies laid down from time
to time by the Directors;
(f) maintain with a well established and reputable insurer
adequate insurance against all risks usually insured against
by companies carrying on the same or a similar business
(g) allot and issue its shares and other securities at the best
price reasonably obtainable in the circumstances;
(h) not acquire, dispose of, hire, lease, license or receive
licences of any assets, goods, rights or services otherwise
than at the best price reasonably obtainable in the
circumstances;
(i) keep the Investors fully informed as to all material
developments regarding its financial and business affairs and
will notify the Investors forthwith upon becoming aware of any
significant litigation affecting or likely to affect any
member of the Group;
(j) keep proper books of account and therein make true and
complete entries of all its dealings and transactions of and
in relation to its business;
(k) prepare its accounts on an historical cost basis and shall
adopt such accounting policies as may from time to time be
generally accepted in England and Wales;
(l) if it requires any approval, consent or licence for the
carrying on of its business in the places and in the manner in
which it is from time to time carried on or proposed to be
carried on it will use its best endeavours to maintain the
same in full force and effect.
(2) The Company undertakes with the Investors that (save to the extent
expressly authorised or described in the Business Plan or as otherwise
provided or contemplated in this Agreement) it will not (and it will
procure that none of the other members of the Group will) without the
prior written consent of Investors holding a majority in nominal value
of the Preferred Ordinary Shares:
(a) issue, allot, redeem, purchase or grant options over any of
its shares or other securities or reorganise its share capital
in any way except as contemplated by clause 4 hereof;
(b) pay or make any dividend or other distribution ;
(c) pass any resolution (whether pursuant to Part II of the
Companies Act or otherwise) whereby its classification or
status may be changed;
(d) alter the provisions of its memorandum or articles of
association or pass any resolution for winding up;
(e) acquire or make any investment in another company or business
or incorporate any subsidiary;
(f) appoint any new director or senior employee (meaning an
employee whose rate of gross base salary is (pound)75,000 per
annum or more) or vary the Emoluments of any of its directors
or of any associate of a director or pay any bonuses to any of
its directors or any associate of a director outside any
limits which may be pre-agreed with Investors holding the
majority in nominal value of the Preferred Ordinary Shares;
(g) enter into any new service agreement with any employee or
director which is not terminable without payment of
compensation on not more than 3 months' notice;
(h) enter into or vary any contract or arrangement (whether
legally binding or not) with any of its directors or with any
associate of a director;
(i) give any guarantee, indemnity or security in respect of the
obligations of any other person;
(j) create or allow to subsist any Encumbrance over any of its
assets;
(k) lend any money to any person (otherwise than by way of deposit
with a bank or other institution the normal business of which
includes the acceptance of deposits) or grant any credit to
any person (except to its customers in the normal course of
business);
(l) incur any material expenditure or liability of a capital
nature (including, for this purpose, the acquisition of any
asset under lease or hire purchase) save in respect of office
machinery and equipment reasonably required in the ordinary
course of its business; "material expenditure" for these
purposes shall mean more than (pound)50,000 in any single
transaction;
(m) sell, transfer, lease, license or in any way dispose of its
business, undertaking or freehold or leasehold property or
shares held in any Subsidiary or any associated company or any
part thereof or interest therein or (except in the ordinary
course of business) do any of the foregoing with any other of
its assets or any interest therein;
(n) pay any remuneration or expenses to any person other than as
proper remuneration for work done or services provided or as
proper reimbursement for expenses incurred in connection with
its business;
(o) without prejudice to the generality of any of the other
provisions of this clause 6 lend any money to the Founder, or
discharge any liability of the Founder, or give any guarantee,
indemnity or security in respect of the obligations of the
Founder, or agree to or pay any management charge or make any
other payment to the Founder.
(3) The Founder undertakes with the Investors to use all reasonable and
proper means in its power to maintain, improve and extend the business
of the Group and to further the reputation and interests of the Group.
(4) The parties shall procure that the Company shall issue up to 25,100 new
Preferred Ordinary Shares ("New Shares") to such person or persons and
in such numbers as Investors holding a majority in nominal value of the
Preferred Ordinary Shares shall by written notice to the Company
request provided that:
(a) the subscription price (including premium) for the New Shares
shall not be less than(pound)2.99 per share;
(b) such written notice shall be given within 6 calendar months of
the date of this Agreement; and
(c) the subscribers for the New Shares shall enter into a Deed of
Adherence in the same way as under the provisions of Clause 7
(2) below.
The parties hereby waive any rights they may have to be offered any New
Shares which are to be issued in accordance with this Clause whether
under the Articles, the general law, this Agreement or otherwise.
(6) The Founder undertakes with the Investors if requested by the Investors
to take all necessary action required to reduce the share capital of
the Company as requested by Investors holding a majority in value of
the Preferred Ordinary Shares (whether by court order or otherwise)
provided that the interests of the Founder are not thereby prejudiced.
6 Directors
(1) The board of directors of the Company shall consist of not more than
four persons (including the two Nominated Directors).
(2) Unless otherwise agreed by Investors who hold a majority in nominal
value of Preferred Ordinary Shares in any particular case, every
meeting of the directors shall be held at the Company's registered
office from time to time.
(3) The Shareholders shall procure that any person who is hereafter
appointed as a director (other than a Nominated Director) shall enter
into an undertaking with the Company and the Investors in the form set
out in Schedule 10 and shall deliver an executed copy thereof to the
Investors within 14 days of his appointment.
7 Transfers and new members
(1) None of the Shareholders shall transfer or dispose of any interest in
or create any Encumbrance over any of his shares except:
(a) by a transfer of the entire legal and beneficial interest
therein free from Encumbrances; and
(b) in accordance with, as permitted by and subject to the
provisions of the Articles and this Agreement.
(2) The parties hereto shall procure that before any person (other than a
person who is already a Shareholder) is registered as a holder of any
share in the Company such person shall enter into a Deed of Adherence
covenanting with the parties to this Agreement from time to time to
observe, perform and be bound by all the terms of this Agreement which
are capable of applying to such person (other than the warranties) and
which have not then been performed. The Company shall not register any
such person as the holder of any share until such a deed has been
executed. Upon being so registered that person shall be deemed to be a
party to this Agreement.
(3) The parties hereto will co-operate and will do and execute all other
acts, deeds and things necessary to give effect to the provisions of
this Agreement and the Articles concerning transfers of shares and the
Shareholders will (so far as it is within their capacity to do so)
procure that a meeting of the board of directors of the Company is duly
convened to approve and register each transfer of shares permitted or
required by any provision of this Agreement or the Articles (subject to
the same being duly stamped or adjudicated or certified nil duty
payable).
8 Investors' consent
(1) Where this Agreement provides that any particular transaction or matter
requires the consent, approval or agreement of the Investors or,
Investors who hold a majority in nominal value of Preferred Ordinary
Shares such consent, approval or agreement may be given subject to such
terms and conditions as such Investors may impose and any breach of
such terms and conditions by any person subject thereto shall ipso
facto be deemed to be a breach of the terms of this Agreement.
(2) If the consent, approval or agreement of the Investors or is required
under more than one provision of this Agreement for any one transaction
or matter then any consent, approval or agreement given in relation to
that transaction or matter by such Investors shall be deemed to cover
all consents, approvals or agreements required for that transaction or
matter unless otherwise specified by such Investors.
9 The Articles
(1) If, during the continuance of this Agreement, there shall be any
conflict between the provisions of this Agreement and the provisions of
the Articles then, during such period, the provisions of this Agreement
shall prevail as between the Shareholders over the Articles and in the
event of such conflict the Shareholders shall procure at the request of
any of the Shareholders such modification to the Articles as shall be
necessary to cure such conflict.
(2) Each of the parties hereto undertakes with each of the others to fully
and promptly observe and comply with the provisions of the Articles to
the intent and effect that each and every provision thereof shall be
enforceable by the parties hereto inter se and in whatever capacity.
(3) Nothing contained in this Agreement shall be deemed to constitute an
amendment of the Articles or of any previous articles of association of
the Company.
10 Parties bound
(1) The Company undertakes with each of the Shareholders to be bound by and
comply with the terms and conditions of this Agreement insofar as the
same relate to the Company and to act in all respects as contemplated
by this Agreement.
(2) The Founder shall at all times exercise its powers in relation to the
Company so as to ensure that the Company fully and promptly observes,
performs and complies with its obligations under this Agreement and the
Articles.
(3) The Founder undertakes with each of the other parties hereto that
whilst it remains a party to this Agreement it will not (except as
expressly provided for in this Agreement) agree to cast any of the
voting rights exercisable in respect of any of the shares held by it in
accordance with the directions, or subject to the consent of, any other
person (including another Shareholder).
11 Confidentiality
(1) Each of the Shareholders undertakes to each of the other Shareholders
and the Company that he will not at any time hereafter use or divulge
or communicate to any person other than to officers or employees of the
Group whose province it is to know the same or on the instructions of
the Directors any confidential information concerning the business,
accounts, finance, contractual arrangements or intellectual property
(whether owned or licensed by the Group) or other dealings,
transactions affairs or property of the Group which shall come to his
knowledge and he shall use all reasonable endeavours to prevent the
publication or disclosure of any confidential information concerning
such matters and so that these obligations shall continue to apply
after that Shareholder shall cease to be a party to this Agreement or
otherwise involved in the affairs of the Group without limit in point
of time but shall cease to apply to information which shall come into
the public domain other than by a breach of this Clause or which for
any other reason, other than through the default of that Shareholder,
shall have ceased to be confidential.
(2) Each of the parties hereto shall use all reasonable endeavours to
procure that the Company and each other member of the Group observes
and ensures that the officers, employees and agents of each of them
observe a corresponding obligation of confidence to that set out in
sub-clause (1) in relation to the Shareholders themselves.
(3) No announcement or publicity concerning the terms of this Agreement or
the interests of any Shareholder in the Company shall be made or issued
by any of the parties hereto other than as required by law or by the
rules of any regulatory organisation to which any of the parties hereto
is subject (in which case the Shareholders shall consult with each
other on the form of the announcement).
12 Enforcement of the Company's rights
(1) If it appears that the Founder or any associate of the Founder (in
whatever capacity) is in breach of any obligation which it owes to the
Company (whether under this Agreement or otherwise) or has misapplied
or retained or become liable or accountable for any money or property
of the Company, or has been guilty of any misfeasance or breach of any
fiduciary or other duty in relation to the Company or is under any
obligation to indemnify the Company against any liability then it is
agreed that the prosecution of any right of action of the Company in
respect thereof shall be passed to the Nominated Directors or the
Nominated Director (if only one has been appointed) (or to a committee
of Directors selected by Investors who hold a majority in nominal value
of the Preferred Ordinary Shares) who shall have full authority on
behalf of the Company to negotiate, litigate and settle any claim
arising thereout and the Founder shall take all steps within its power
to give effect to the provisions of this sub-clause.
(2) The Company hereby covenants with each of the Shareholders that any
monies or property which the Company may recover or receive as a result
of the operation of the foregoing provisions of this Clause shall be
applied by it in a proper and efficient manner and for its own benefit.
13 Tax
The provisions of Schedule 8 (Tax Covenant) shall apply to this
Agreement.
14 General
(1) Costs
The Founder, the Investors and the Company shall each pay their own costs and
disbursements incurred in relation to the negotiation, preparation and
implementation of this Agreement and for the avoidance of doubt the costs of
Shulmans solicitors in preparing this document on behalf of the Company shall be
borne by the Company.
(2) Notices
All notices which are required to be given hereunder shall be in writing and
shall be sent to the address of the recipient set out in this Agreement or in
any Deed of Adherence or such other address as the recipient may designate by
notice given in accordance with the provisions of this sub-clause. Any such
notice may be delivered personally or by first class prepaid letter or facsimile
transmission and shall be deemed to have been served if by personal delivery
when delivered if by first class post 48 hours after posting and if by facsimile
transmission when dispatched.
(3) Successors bound
This Agreement shall be binding on and shall enure for the benefit of the
successors and assigns and personal representatives (as the case may be) of each
of the parties hereto.
(4) Assignment
Save as otherwise herein expressly provided neither the Company nor the Founder
shall be entitled to assign or otherwise transfer any of its or his rights or
obligations in whole or in part hereunder without the prior written consent of
the Investors who hold a majority in nominal value of the Preferred Ordinary
Shares. The Investors may assign the benefit of the Agreement to any transferee
of its shares.
(5) Continuing agreement
All provisions of this Agreement shall so far as they are capable of being
performed and observed continue in full force and effect notwithstanding
Completion except in respect of those matters then already performed.
(6) Good faith
Each of the parties hereto undertakes with each of the others to do all things
reasonably within his power which are necessary or desirable to give effect to
the spirit and intent of this Agreement and the Articles.
(7) Further assurance
The parties hereto shall, and shall use their respective reasonable endeavours
to procure that any necessary third parties shall, do, execute and perform all
such further deeds, documents, assurances, acts and things as any of the parties
hereto may reasonably require by notice in writing to the others to carry the
provisions of this Agreement and the Articles into full force and effect.
(8) Time of the essence
Any date or period mentioned in this Agreement may be extended by agreement
between the parties hereto failing which, as regards any such date or period,
time shall be of the essence of this Agreement.
(9) Entire agreement
This Agreement supersedes any previous agreement between the parties hereto in
relation to the matters dealt with herein, represents (together with the
documents referred to herein) the entire agreement between the parties hereto in
relation to such matters and may not be varied except by a written instrument
signed by all the parties hereto. Each of the parties hereto hereby acknowledges
that in entering into this Agreement it has not relied on any representation or
warranty save as expressly set out herein or in any document referred to herein.
(10) Law
This Agreement shall be governed by and construed in accordance with English law
and the parties hereto irrevocably submit to the exclusive jurisdiction of the
English Courts in respect of any dispute or matter arising out of or connected
with this Agreement.
(11) Waiver
The Investors may release or compromise the liability of the Founder under this
Agreement or grant to the Founder time or other indulgence without affecting the
liability of the Founder under this Agreement. No waiver by the Investors of any
of the requirements hereof or of any of its rights hereunder shall release the
Founder or the Company from full performance of their remaining obligations
stated herein. The rights and remedies provided in this Agreement are cumulative
and not exclusive of any right or remedies otherwise provided by law.
(12) No partnership
Nothing in this Agreement shall constitute or be deemed to constitute a
partnership between any of the parties hereto and none of them shall have any
authority to bind the others in any way.
(13) Severability
(a) Notwithstanding that the whole or any part of any provision of
this Agreement may prove to be illegal or unenforceable, the
other provisions of this Agreement and the remainder of the
provision in question shall continue in full force and effect.
In relation to any illegal or unenforceable part of this
Agreement, the parties hereto agree to amend such part in such
manner as may be requested from time to time by any of the
parties hereto provided that such proposed amendment is legal
and enforceable and to the maximum extent possible carries out
the original intent of the parties in relation to that part.
(b) If any part of this Agreement or the Articles shall be held by
any court of competent jurisdiction to be unenforceable
against or by the Company, such part shall be treated as being
severable from the remainder of this Agreement or, as the case
may be, the Articles and the Shareholders shall promptly
exercise their powers in relation to the Company to procure
(insofar as they have the power lawfully to do so) that the
severable part is nevertheless put into or given effect in
accordance with, or to the maximum extent possible in
accordance with, the original intent of the parties hereto in
relation to that part.
(14) Exercise of powers
Where any of the parties hereto is required under this Agreement to exercise his
or its powers in relation to any company in the Group to procure a particular
matter or thing, such obligation shall be deemed to include an obligation to
exercise his or its powers both as a shareholder and as a director (where
applicable) of such company and to procure that any nominee of his or it or any
director appointed by him shall procure such matter or thing but, in each case,
only insofar as the person in question can lawfully do so.
EXECUTED as a deed the day and year first before written.
SCHEDULE 1
(Particulars of the Investors)
(1) (2) (3) (4) (5)
Name Address Number of Preferred Ordinary Total Total
amount to be
paid on
completion in(pound)'s
▇▇▇ ▇▇▇▇▇▇▇▇ Armscote Manor 33,444 99,997.56 99,997.56
▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇▇ 75,250 224,997.50 75,000.00
Ilkley
West Yorkshire
Zalcany
Limited (company ▇▇▇▇▇▇▇ House 50,168 150,002.32 150,002.32
number 2397965) ▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇ ▇▇▇
Noblepoint Limited ▇▇▇▇▇▇▇ House 33,444 99,997.56 99,997.56
(company number ▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇) ▇▇▇▇▇▇
▇▇▇ ▇▇▇ --------- ------------
192,306 (pound)574,994.94
--------- ------------
SCHEDULE 2
(Particulars of the Company)
Directors: ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Shingles
Secretary: ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Nature of business: Intermediate Holding Company
Accounting reference date: 30 June
Auditors: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Leeds
SCHEDULE 3
(The Subsidiaries)
Part I
1 Name WRDC Limited
2 Number 2945379
3 Place of incorporation United Kingdom
4 Date of incorporation 4 July 1994
5 Authorised share capital (pound)36,400
Issued share capital (pound)32,292
6 Beneficial owners and registered holders of the issued share capital Authoriszor Holdings Ltd
542,500 Ordinary A shares one ▇▇▇▇▇
542,500 Ordinary B shares one ▇▇▇▇▇
2,144,168 Ordinary D shares one ▇▇▇▇▇
7 Registered office ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇
8 Directors ▇. ▇. ▇▇▇▇▇▇
B. J ▇▇▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇
9 Secretary ▇. ▇▇▇▇▇▇▇▇
10 Nature of business Software Consultancy
11 Accounting reference date 30 June
12 Auditors ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Leeds
Part II
1 Name Authoriszor Ltd
2 Number 03302620
3 Place of incorporation ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇
4 Date of incorporation 15 January 1997
5 Authorised and issued share capital 10,300,000(pound)1 redeemable
33,500,000 10p ordinary
Issued share capital 10,300,000 redeemable
30,705,845 10p ordinary
6 Beneficial owners and registered holders of Authoriszor Holdings Ltd
the issued share capital
7 Registered office ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇
8 Directors
▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
9 Secretary ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
10 Nature of business Software Design Consultancy and Supply
11 Accounting reference date 30 June
12 Auditors ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Leeds
Part III
1 Name Logsys Limited
2 Number 1452614
3 Place of incorporation United Kingdom
4 Date of incorporation 5 October 1979
5 Authorised share capital 5,000,000 10p ordinary
Issued share capital 780,020 10 ordinary
6 Beneficial owners and registered holders of Authoriszor Holdings Ltd
the issued share capital
7 Registered office Logsys House, ▇▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇
8 Directors
▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
9 Secretary ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
10 Nature of business Software Development Services and Products to Defense and Commercial
Market Places
11 Accounting reference date 30 June
12 Auditors ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Leeds
Part IV
1 Name PAD (London) Limited
2 Number 4103450
3 Place of incorporation United Kingdom
4 Date of incorporation 2 November 2000
5 Authorised share capital (pound)1,000 ordinary shares of(pound)1 each
Issued share capital (pound)300 ordinary shares of(pound)1 each
6 Beneficial owners and registered holders of ▇▇▇▇▇ ▇▇▇▇▇▇▇ - 36 shares
the issued share capital ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ - 36 shares
WRDC Limited - 228 shares
Total: 300
7 Registered office ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇
8 Directors A. L ▇▇▇▇▇▇▇▇
▇. ▇. ▇▇▇▇▇▇▇
▇. ▇. ▇▇▇▇▇▇
9 Secretary
10 Nature of business Internet Services and Solutions
11 Accounting reference date 30 June
12 Auditors ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Leeds
Part V
1 Name WRDC AG
2 Number CH-020.3.024.937-1
3 Place of incorporation Zurich, Switzerland
4 Date of incorporation 15 August 1981
5 Authorised and issued share capital Both - 100 shares at CHF 1000 each
(CHF 100,000)
6 Beneficial owners and registered holders of WRDC Limited- 85 shares
the issued share capital ▇▇▇ ▇▇▇▇▇▇▇▇ - 15 shares
These shares are currently being transferred to WRDC Ltd
and are held on behalf of WRDC Limited
7 Registered office ▇▇▇▇▇▇▇▇▇▇▇▇▇. ▇, ▇▇▇▇ ▇▇▇▇▇▇
8 Directors ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
9 Secretary ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
10 Nature of business IT Consultancy
11 Accounting reference date 31 December
12 Auditors ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Leeds
SCHEDULE 4
(Board Minutes)
AUTHORISZOR HOLDINGS LIMITED
MINUTES of a meeting of the Board of Directors held at on the day of 2002
at am/pm
Present:
In attendance:
1 Mr took the Chair, noted that a quorum was present and
declared the meeting open
2 Investment agreement and ancillary documents
The following documents were laid on the table:
(1) an Investment Agreement proposed to be entered into on the date of the
meeting between (1) Authoriszor Inc (2) Various proposed investors in
the share capital of the Company (`the Investors') and (3) the Company
(`the Investment Agreement');
(2) a print of the new articles of association of the Company proposed to
be adopted on the date of this meeting;
IT WAS REPORTED that the existing members of the Company had agreed the terms
upon which the Investors would subscribe for 192,306 Preferred Ordinary Shares
in the Company. The directors considered that it was in the best interests of
the Company that the Company co-operate in giving effect to such arrangements.
IT WAS RESOLVED that each of the documents tabled be noted, approved or, as the
case may be, adopted and that:
(1) any director be authorised to execute on behalf of the Company any such
document which required to be so executed;
(2) any such document as required execution as a deed by the Company be so
executed;
(3) all steps to be taken by the Company pursuant to any of the documents
tabled be taken forthwith.
3 Adjournment and resumption of meeting
The meeting was thereupon adjourned. On the resumption of the meeting it was
reported that the Investment Agreement had been so executed by the Company.
4 Written Resolution
There was produced to the meeting a draft written resolution for the sole member
of the Company for the following purposes:
(a) to convert the existing 10,300,000 issued Redeemable Shares
of(pound)1 each in the capital of the Company into 10,300,000
Ordinary Shares of(pound)1 each;
(b) to increase the authorised share capital of the Company
from(pound)10,500,000 to [(pound)10,720,000] by the creation
of [220,000] Preferred Ordinary Shares of(pound)1 each;
(c) to adopt new articles of association;
(d) to authorise the directors to issue up to 220,000 Preferred
Ordinary Shares of(pound)1 each;
(e) to specifically authorise the directors to issue 41,592
Ordinary Shares of (pound)1 each in the capital of the Company
to Authoriszor Inc in connection with the conversion of the
loan of (pound)41,592 owed by the Company to Authoriszor Inc
to Ordinary Share capital.;
(f) to change the name of the Company to WRDC Logsys Limited.
IT WAS NOTED that the Auditors of the Company had recovered a copy of the
proposed written resolution.
5 Adjournment and resumption of meeting
The meeting was thereupon briefly adjourned. On the resumption of the meeting it
was reported that the written resolution had been duly signed by the sole member
of the Company and the Resolution passed as a special resolution.
6 Conversion of Authoriszor Inc loan
There was produced to the meeting a letter signed on behalf of Authoriszor Inc
applying for the issue to it of 41,592 Ordinary Shares of (pound)1 each in the
capital of the Company at par value and requesting that the entire Authoriszor
Inc loan to the Company, in the sum of (pound)41,592, be credited against the
subscription price of the said Ordinary Shares so that the said loan shall have
been deemed to have been repaid in full and the funds immediately repaid by
Authoriszor Inc to the Company as payment in full for the subscription price of
the shares.
IT WAS RESOLVED that such Ordinary Shares be allotted to Authoriszor Inc in
accordance with the application, that the appropriate entries be made in the
register of members and that a share certificate be issued in favour of
Authoriszor Inc in respect of the shares allotted.
7 Subscription for shares
It was reported that subscription application forms had been received from the
Investors in respect of a total of 192,306 Preferred Ordinary Shares of (pound)1
each in the Company together with cheques for a total of [(pound)*] being
payment for such shares including premium. IT WAS RESOLVED that such shares be
allotted to the Investors in accordance with such applications, that the name of
the Investors be entered in the register of members and that a share certificate
be issued in favour of each of the Investors in respect of the shares allotted.
8 Adjournment and resumption of meeting
The meeting was thereupon adjourned. On the resumption of the meeting it was
reported that the said certificates for the allotments referred to under
paragraphs 6 and 7 had been issued and the Register of Members amended
accordingly.
9 Nominated director
There was produced to the meeting a Notice of Appointment dated [?] 2002 from
Investors who hold a majority in nominal value of the Preferred Ordinary Shares
appointing ▇▇ ▇▇▇ ▇▇▇▇▇▇▇ as a director of the Company pursuant to Article 18 of
the Company's new articles of association.
10 Notices, etc to Registrar of Companies
IT WAS RESOLVED that the secretary be instructed to deliver the following to the
Registrar of Companies:
(1) A copy of the special resolution passed as a Written Resolution;
(2) A copy of the new articles of association;
(3) Return of Allotments (Form G88(2));
(4) Notice of Increase of Capital (Form G123);
(5) Form G122.
(6) Forms 228(a) and (b).
11 There being no further business the meeting terminated
These minutes were then read and signed
-------------------------------
CHAIRMAN
SCHEDULE 5
WRITTEN RESOLUTION
AUTHORISZOR HOLDINGS LIMITED
Authoriszor Inc which is the only member of the Company (at the date of this
Resolution) entitled to receive notice of and attend and vote at a general
meeting of the Company hereby agrees, pursuant to section 381 of the Companies
▇▇▇ ▇▇▇▇, to the following Written Resolution (which would otherwise be required
to be passed as a Special Resolution) and confirms that such Written Resolution
shall be valid and effective as if it had been passed at an Extraordinary
General Meeting of the Company duly convened and held:-
SPECIAL RESOLUTION
THAT:
(1) The 10,300,000 Redeemable Shares of (pound)1 each in the capital of the
Company which at the time of the passing of this resolution are in
issue be and are hereby converted into 10,300,000 Ordinary Shares of
(pound)1 each, such shares having the rights and being subject to the
restrictions attaching thereto under the new articles of association of
the Company adopted pursuant to paragraph (4) of this resolution.
(2) The authorised share capital of the Company be increased from
(pound)10,500,000 to [(pound)10,720,000] by the creation of [220,000]
Preferred Ordinary Shares of (pound)1 each, such shares having the
rights and being subject to the restrictions attaching thereto under
the new articles of association of the Company adopted pursuant to
paragraph (3) of this resolution.
(3) The regulations contained in the document produced to the meeting and
signed for identification by the chairman be adopted as the articles of
association of the Company in substitution for and to the entire
exclusion of the existing articles of association.
(4) The directors be generally and unconditionally authorised pursuant to
Section 80 of the Companies ▇▇▇ ▇▇▇▇ to allot and issue up to [220,000]
Preferred Ordinary Shares within five years of the date of this
resolution (on the expiration of which this authority shall expire) and
the directors shall have the power to exercise the authority hereby
conferred upon them to allot such shares to such persons and on such
conditions as they may in their discretion determine as if Section
89(1) of the Companies Act 1985 did not apply thereto.
(5) The directors be specifically authorised pursuant to the Companies ▇▇▇
▇▇▇▇ to allot and issue 41,592 Ordinary Shares within 28 days of the
date of this resolution (on the expiration of which this authority
shall expire) to Authoriszor Inc.
(6) That the name of the Company be changed from "Authoriszor Holdings
Limited" to "WRDC Logsys Limited".
Authoriszor Inc confirms that a copy of the Written Resolution set out
herein was supplied to the Auditors of the Company prior to the date
hereof.
Name of Shareholder Signature
Authoriszor Inc. ....................................
duly authorised to sign on behalf
of the Shareholder
Date of signature being the date of the Written Resolution
_________________________2002
SCHEDULE 6
(Subscription Application Form)
To: The Secretary,
Authoriszor Holdings Limited
▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
Dated 2002
Dear Sir,
AUTHORISZOR HOLDINGS LIMITED
I of hereby apply for [] Preferred Ordinary Shares of (pound)1 each
in the above company at a total price (including premium) for all such shares of
(pound)[ ] and attach a cheque for the sum of (pound)[ ] in payment therefor in
full/part.
I agree to take such shares subject to the company's memorandum and new articles
of association and to the terms of an investment agreement of even date herewith
made between (1) Authoriszor Inc. (2) various investors including
myself/company/my trust and (3) the company and request you to enter my/our name
in the Company's register of members as the holder of such shares.
Yours faithfully,
[ ]
SCHEDULE 7
1. Warranted Information
(1) The Warranted Information is true and accurate in all respects and
gives a true and fair view of the assets, liabilities (including
contingent, unquantified or disputed liabilities) and commitments of
the Company at 31st March 2002 and its profits for the accounting
reference period ended on that date, have been prepared in accordance
with generally accepted accounting principles, were not affected by any
extraordinary, exceptional or non-recurring item which were not
reported and comply with the requirements of all applicable legislation
and Financial Reporting Standards and other accounting standards
applicable to a United Kingdom company; and no changes in the basis of
accounting were made during the said accounting reference period or
have been made since 31st March 2002.
(2) Since 31st March 2002:
(a) no dividend or other distribution has been declared, paid or
made by the Company;
(b) there has been no material change in the assets and
liabilities of the Company as shown in the Warranted
Information;
(c) except as previously disclosed to ▇▇▇ ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇
▇▇▇▇▇▇ or except as contemplated by this Agreement there has
been no material adverse change in the financial or trading
position or prospects of the Company;
(d) except as previously disclosed to ▇▇▇ ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇
▇▇▇▇▇▇ or except as contemplated by this Agreement there has
been no reduction in the value of the net tangible assets of
the Company on the basis of the valuations adopted in the
Warranted Information; and
(e) the business of the Company has been carried on in the
ordinary course and so as to maintain the same as a going
concern.
(3) All proper and necessary books of account, minute books, registers and
records have been maintained by the Company, are in its possession and
contain accurate information in accordance with generally accepted
principles relating to all transactions to which the Company has been a
party.
2. Shares
(1) The information contained in the recitals and the Schedules in this
Agreement is true and accurate in all respects.
(2) The 10,300,000 Redeemable Shares and the 100,000 Ordinary Shares
referred to in Recital (A) constitute the whole of the issued and
allotted share capital of the Company and are beneficially owned, with
full title guarantee, by the Founder free from all Encumbrances or
interests in favour of or claims made by or which could be made by any
other person.
(3) WRDC Limited, Authoriszor Limited and Logsys Limited are all wholly
owned subsidiaries of the Company.
3. Inter company debt
(1) No member of the Group is indebted in any way to the Founder except
that Authoriszor Holdings Limited owes(pound)43,946.99 and Authoriszor
Limited owes(pound)256,053.01 in each case to Authoriszor Inc.
(2) No member of the Group has entered into any guarantee or indemnity in
relation to any liability of the Founder or accepted or is liable for
or may become liable for any liability of the Founder.
(3) No member of the Group has given any security in relation to the
obligations of the Founder.
4. Salaries
(1) The appendix of salaries and the bonus arrangements for ▇▇ ▇▇▇▇▇▇ and
▇▇ ▇▇▇▇▇▇ attached to this Agreement is true and accurate.
SCHEDULE 8
TAX
Part 1 - Definitions and Interpretation
1 DEFINITIONS
In this Schedule the following words and expressions (except where the
context otherwise requires) have the following meanings:
"ACT" means advance corporation tax.
"CAA" means the Capital Allowances Act 2001 (and for the avoidance of
doubt includes all former legislation as amended, modified or
re-enacted relating to capital allowances).
"Claim for Tax" includes any assessment, notice, demand, letter or
other document issued by or action taken by or on behalf of any person
from which it appears that the Founder is or may be liable under this
Schedule.
"Effective Tax Liability" has the meaning given to it in paragraph 2.2
of Part 1 of this Schedule.
"Event" includes any transaction, arrangement, act, failure or omission
(including the execution and performance of this Agreement) and any
distribution, failure to distribute, acquisition, disposal, transfer,
payment, loan or advance, the expiry of any time period, membership of
or ceasing to be a member of any group or partnership or any change in
the residence of any person for Tax purposes.
"Group Relief" means any of the following:
(a) relief surrendered or claimed pursuant to Chapter IV Part X
Taxes Act;
(b) ACT surrendered or claimed pursuant to section 240 Taxes Act
(set off of company's surplus ACT against subsidiary's
liability to corporation tax);
(c) a tax refund relating to an accounting period as defined by
section 102(3) Finance ▇▇▇ ▇▇▇▇ (surrender of company tax
refund etc within group) in respect of which a notice has been
given pursuant to section 102(2) of that statute.
"Liability to Tax" means any matter giving rise to a claim under the
Tax Covenant.
"Non-availability" means loss, reduction, modification, cancellation,
non-availability or non-existence.
"PAYE" means the mechanism prescribed by the Tax Statutes for the
collection of tax and sums to which sections 203 to 203L Taxes Act (pay
as you earn) and regulations made thereunder apply and Class 1 and
Class 1A contributions referred to in section 1(2) Social Security
Contributions and Benefits ▇▇▇ ▇▇▇▇ (outline of contributory system).
"Payment of Tax" means any payment of or in respect of Tax (whether or
not the same is primarily payable by the Group and whether or not the
Group has, or may have, any right of reimbursement against any other
person or persons) and includes any payment of Tax which would have
been due to be made but for the utilisation of any Relevant Relief or
any Post Completion Relief.
"Post Completion Relief" means any Relief which arises after
Completion.
"Relevant Relief" means:
(a) any Relief which is taken into account in computing and so
reducing or eliminating any provision for Tax (including
deferred tax and recoverable input VAT) which appears or would
have appeared in the Warranted Information; or
(b) any Relief which is treated as an asset in the Warranted
Information.
"Relief" includes any loss, allowance, credit, relief, deduction,
exemption or set-off from or against or in respect of Tax or any right
to a repayment of Tax.
"Tax" means all forms of tax, charge, duty, impost, withholding,
deduction, rate, levy and governmental charge (whether national or
local) in the nature of tax whatsoever and whenever created, enacted or
imposed, and whether of the United Kingdom or elsewhere, and any amount
whatever payable to any Tax Authority or any other person as a result
of any enactment relating to tax, together with all related fines,
penalties, interest, costs, charges and surcharges.
"Tax Authority" means any statutory or governmental authority or body
(whether in the United Kingdom or elsewhere) involved in the collection
or administration of Tax including the Board of Inland Revenue, the
Contributions Agency and the Commissioners of Customs and Excise.
"Tax Covenant" means the covenant set out in Part 2 of this Schedule.
"Tax Statutes" means any primary or secondary statute, instrument,
enactment, order, law, by-law or regulation making any provision for or
in relation to Tax.
"Taxes Act" means the Income and Corporation ▇▇▇▇▇ ▇▇▇ ▇▇▇▇.
"TCGA" means the Taxation of Chargeable Gains ▇▇▇ ▇▇▇▇.
"TMA" means the Taxes Management ▇▇▇ ▇▇▇▇.
"VAT" means value added tax within the meaning of the VATA.
"VATA" means the Value Added Tax ▇▇▇ ▇▇▇▇.
2 INTERPRETATION
2.1 In this Schedule "Effective Tax Liability" means the following:
(a) the Non-availability in whole or in part of any Relevant
Relief;
(b) the utilisation or set-off of any Post Completion Relief or
any Relevant Relief against any Tax or against income, profits
or gains in circumstances where but for such utilisation or
set-off a Payment of Tax would have arisen in respect of which
the Founder would have been liable to the Investors under this
Schedule.
2.2 The value of an Effective Tax Liability is as follows:
(a) where the Effective Tax Liability involves the
Non-availability of any Relevant Relief:
(i) if the Relevant Relief is a right to repayment of
Tax, the amount of the right which is not available;
and
(ii) in any other case, the amount of Tax which would have
been saved but for the Non-availability of the
Relevant Relief on the assumption that the Company
would have been able to fully utilise that Relevant
Relief in the accounting period during which
Completion falls; and
(b) where the Effective Tax Liability involves the utilisation or
set-off of a Post Completion Relief or a Relevant Relief the
amount of Tax saved by such utilisation or set-off.
2.3 Reference in this Schedule to the result of any Event on or before
Completion includes the combined result of any two or more Events the
first or some or part of which took place on or before Completion.
2.4 Reference in this Schedule to income, profits or gains earned, accrued
or received on or before Completion includes income, profits or gains
which are deemed to be or are treated or regarded as earned, accrued or
received on or before Completion for any Tax purpose.
2.5 Without limiting the generality of the expression, reference in this
Schedule to anything "in the ordinary course of business" does not
include:
(a) an Event which results in the Target becoming liable for Tax
for which it is not primarily liable;
(b) the acquisition, disposal or supply or deemed acquisition,
disposal or supply of any asset, goods, service or facility
(including a loan of money or the letting, hiring or licensing
of tangible or intangible property) in a transaction which is
not entered into at arm's length;
(c) the making of a distribution or deemed distribution for Tax
purposes;
(d) the creation, cancellation or reorganisation of any share or
loan capital or any company becoming or ceasing to be a member
of a group of companies for any Tax purpose;
(e) the failure by the Target to deduct, charge, recover or
account for Tax;
(f) the acquisition or disposal (including any deemed disposal) of
a capital asset;
(g) an Event giving rise to a liability or potential liability
under Part XVII Taxes Act (tax avoidance), section 29 or
section 36 or Part VIIII TMA (charges on non-residents) or
schedule 9A VATA (anti-avoidance provisions: groups);
(h) a transaction or arrangement which includes, or a series of
transactions or arrangements which includes, any step or steps
having no commercial or business purpose apart from the
deferral, reduction or avoidance of a liability to Tax; and
(i) any Event which gives rise to any interest, fine, penalty,
charge or surcharge in connection with Tax.
Part 2 - Tax Covenant
1 COVENANT
1.1 Subject as provided in this Schedule the Founder in relation to the
Company and each Group company covenants with and undertake to the
Investors to pay to the Investors an amount equal to:
(a) any Payment of Tax which arises directly or indirectly, and
whether before, on or after Completion, by reference to an
Event occurring (or deemed to occur for the purposes of any
Tax) or income profits or gains received on or before
Completion;
(b) the value of any Effective Tax Liability;
(c) any inheritance tax which is unpaid at Completion and in
respect of which the Board of Inland Revenue has a charge on
any of the shares or assets of the Company or any Group
company, or which gives rise to a power to sell, mortgage or
charge any of the shares or assets of the Company or any Group
company or which after Completion becomes a charge on or gives
rise to a power to sell, mortgage or charge any of the shares
or assets of the Company or any Group company, being a
liability in respect of inheritance tax payable as a result of
the death of any person within seven years after a transfer of
value (or a deemed transfer of value) if a charge on or power
to sell, mortgage or charge any such shares or assets existed
at Completion or would have existed at Completion, if the
death had occurred immediately before Completion and the
inheritance tax payable as a result thereof had not been paid
provided that any right to pay by instalments shall be
disregarded;
(d) any liability of the Company or any Group company to make a
payment by way of reimbursement, recharge, indemnity, damages
for breach of contract or management charge connected with or
representing Tax where such Tax results from, or is calculated
by reference to, any income, profits or gains earned, received
or accrued by the Target on or before Completion or which
results from or is calculated by reference to any Event which
occurred on or before Completion or was deemed to occur on or
before Completion for the purposes of any Tax;
(e) any Payment of Tax which arises as a result of the application
of section 189 (capital distribution of chargeable gains:
recovery of tax from shareholder) or section 190 (tax
recoverable from another group company or controlling
director) TCGA or paragraph 75A schedule 18 Finance ▇▇▇ ▇▇▇▇
(assessment on other claimant companies) or section 767A or
section 767AA Taxes Act (change in company ownership:
corporation tax) where such Tax arises by reference to any
Event occurring prior to Completion or by reference to any
non-payment of Tax by a person who falls within the criteria
set out in the statutory provisions referred to in this
paragraph;
(f) any liability to repay in whole or in part any payment
received or receivable by the Company or any Group company or
a liability of the Company or any Group company to make any
payment for the surrender of Group Relief pursuant to any
arrangement or agreement entered into on or before Completion;
(g) the loss in whole or in part of the right of the Company or
any Group company to receive any payment for Group Relief from
any company pursuant to any arrangement or agreement entered
into on or before Completion;
(h) any costs or expenses incurred by the Investor or the Company
or any Group company in connection with or in consequence of
any of the matters referred to at paragraphs 1.1(a) to 1.1(g)
or in pursuing any Claim for Tax or in taking or defending any
action under this Schedule.
Part 3 - Limitations and Procedure
1 LIMITATIONS
1.1 The Founder shall not be liable in respect of any Liability to Tax
under this Schedule to the extent that:
(a) specific provision, reserve or allowance was made for such
Liability to Tax in the Warranted Information but only to the
extent that the specific provision, reserve or allowance
relates to the period before Completion;
(b) such Liability to Tax arises in the ordinary course of
business of the Company as carried since 31st March 2002;
(c) such Liability to Tax arises or is increased only as a result
of any increase in rates of Tax made after Completion with
retrospective effect or of any change in law occurring after
Completion with retrospective effect; or
(d) such Liability to Tax arises or is increased as a result of
any change after Completion in the bases, methods or policies
of accounting of the Target save where such change is made to
comply with generally accepted accounting practice, the
published practice of any Tax Authority or the law or rule of
any regulating authority or body in force at Completion.
2 DATE FOR PAYMENT
2.1 A payment to be made by the Founder under this Schedule shall be made
in cleared funds on the following dates:
(a) in the case of an amount under paragraphs
1.1(a),1.1(c),1.1(e),1.1(f) or 1.1(g) of Part 2 of this
Schedule on or before the later of:
(i) seven days after written demand for such payment; and
(ii) seven days before the date on which the Tax is
finally due to the Tax Authority demanding the same
(or would have been due but for the utilisation of
any Relevant Relief);
(b) in the case of an amount under paragraph 1.1(b) of Part 2 of
this Schedule on or before the later of:
(i) seven days after written demands for such payment;
and
(ii) seven days before the date on which Tax becomes
payable which would not have been payable if no
liability had arisen under paragraph 1.1(b) of Part 2
of this Schedule or, in the case of a repayment of
Tax, the date on which such repayment would have been
made;
(c) in the case of an amount under paragraph 1.1(d) of Part 2 of
this Schedule the later of:
(i) seven days after a written demand; and
(ii) seven days before the date on which the payment
giving rise to the liability falls due;
(d) in the case of an amount under paragraph 1.1(h) of Part 2 of
this Schedule within seven days of the Investors giving
written notice of the costs and expenses to the Founder;
2.2 Where the Founder fails to make a payment in satisfaction of a
liability under this Schedule by the due date for payment, the
liability of the Founder shall be increased to include interest on such
sum from the date on which the Founder become liable to make payment to
the date of actual payment at a rate per annum being four per cent
above the base rate from time to time of Barclays Bank plc compounded
monthly (such interest to accrue after as well as before judgement).
3 WITHHOLDING AND TAX
3.1 With reference to any payments made by the Founder under this Schedule:
(a) all payments so made by the Founder shall be made gross, free
of any rights of counterclaim or set-off and without any
deductions or withholdings of any nature save for such
deductions or withholdings as are required by law;
(b) if the Founder is required by law to make any deduction or
withholding from any payment it shall do so and the sum due in
respect of such payment shall be increased to the extent
necessary to ensure that after the making of such deduction or
withholding the Investor receive and retain (free of any
liability in respect of any such deduction or withholding) a
net sum equal to the sum which they would have received and
retained had no such deduction or withholding been required to
be made;
(c) if any payment is subject to Tax in the hands of the Investors
the Founder shall within seven days of notice in writing being
served on it by the Investors pay to the Investors such
further amount or amounts as shall ensure that the net amount
received in respect of such payment after such Tax is the same
as it would have been were the payment not subject to such
Tax.
4 RELEASE
4.1 Any liability of the Founder under this Schedule may in whole or in
part be released, compounded or compromised by the Investors in their
absolute discretion or time or indulgence may be given by the Investors
in their absolute discretion as regards the Founder without in any way
prejudicing or affecting its rights against the Founder under the same
or a like liability.
4.2 No delay or omission of the Investors in exercising any right, power or
privilege under this Schedule shall impair such right, power or
privilege or be construed as a waiver of such right, power or privilege
and any single or partial exercise of any such right, power or
privilege shall not preclude the further exercise of any right, power
or privilege.
SCHEDULE 9
(Deed of Adherence)
THIS DEED OF ADHERENCE is made the day of 20 by
of (hereinafter called `the Covenantor')
SUPPLEMENTAL to a shareholders' agreement dated the 20 and made between (1)
[*]as modified by [here set out the details of any instrument modifying the
original agreement]] (`the Shareholders' Agreement')
WITNESSETH as follows:
1 The Covenantor hereby confirms that [he] [it] has been supplied with a
copy of the Shareholders' Agreement and hereby covenants with each of
the other parties to the Shareholders' Agreement from time to time to
observe, perform and be bound by all the terms of the Shareholders'
Agreement (other than Clause 5 thereof) which are capable of applying
to the Covenantor and which have not been performed at the date hereof
to the intent and effect that the Covenantor shall be deemed with
effect from the date on which the Covenantor is registered as a member
of the Company to be a party to the Shareholders' Agreement and to be
[a Founder] [an Investor] (as defined in the Shareholders' Agreement)
2 This Deed shall be governed by and construed in accordance with the
laws of England.
EXECUTED as a deed the day and year first before written.
SCHEDULE 10
(Director's Undertaking)
To: [CURRENT SHAREHOLDERS]
and
Authoriszor Holdings Limited (`the Company') {amend as appropriate to
cover subsidiaries]
From: [DIRECTOR]
Dated: 20
I hereby confirm that I have been supplied with a copy of the shareholders'
agreement made between [ ] dated 2002 [(as modified by [insert the
details of any instrument modifying the original agreement])] (`the
Shareholders' Agreement') and undertake to the Company and separately with each
of the other parties to the Shareholders' Agreement from time to time that:
(1) I will, so far as may be permitted by law and so long as I remain a
director of the Company, be bound by and comply with the terms and
conditions of the Shareholders' Agreement (as the same may hereafter be
amended from time to time) insofar as the same relate to me and act in
all respects as contemplated thereby, and will (so far as aforesaid) do
all within my power as a director to ensure that the Company complies
with its obligations thereunder;
(2) If I am at any time an employee of the Company I agree that compliance
with this deed shall be a term of service with the Company material
breach of which will entitle the Company to terminate my employment
summarily.
EXECUTED and DELIVERED
as a deed by the said
in the presence of:
SCHEDULE 11
(Authoriszor Inc. Subscription Application Form)
To: The Secretary,
Authoriszor Holdings Limited
▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
Dated 2002
Dear Sir,
AUTHORISZOR HOLDINGS LIMITED
Authoriszor Inc. confirms that it wishes to convert its loan to the above
company in the sum of (pound)41,592 (the "Loan") to Ordinary Shares in the
capital of the company, and therefore applies for 41,592 Ordinary Shares of
(pound)1 each in the above company at a total price for all such shares of
(pound)41,592.
Authoriszor Inc. requests that the entire Loan be credited against the
subscription price of the said Ordinary Shares so that the Loan shall have been
deemed to have been repaid in full and the funds immediately repaid by
Authoriszor Inc to the company as payment in full for the subscription price of
the shares.
Yours faithfully
For and on behalf of Authoriszor Inc
SCHEDULE 12
Part 1
Resigning Officers
Name Position Company Name
------------------------- ------------------------------- ----------------------
------------------------- ------------------------------- ----------------------
------------------------- ------------------------------- ----------------------
Part 2
New Directors
Name Position Company Name
-------------------------- ---------------------- ------------------------------
▇▇▇ ▇▇▇▇▇▇▇ director Authoriszor Holdings Ltd
-------------------------- ---------------------- ------------------------------
-------------------------- ---------------------- ------------------------------
SIGNED (but not delivered until )
the date hereof) as a DEED by )
AUTHORISZOR INC. )
acting by ______________________ )
and __________________________ ) ________________________
Director
________________________
Director/Secretary
SIGNED (but not delivered until )
the date hereof) as a DEED by )
AUTHORISZOR HOLDINGS LIMITED )
acting by _______________________ )
and ___________________________ ) ________________________
Director
________________________
Director/Secretary
SIGNED (but not delivered until )
the date hereof) as a DEED by )
ZALCANY LIMITED )
acting by _______________________ )
and ____________________________ ) ________________________
Director
________________________
Director/Secretary
SIGNED (but not delivered until )
the date hereof) as a DEED by )
NOBLEPOINT LIMITED )
acting by ________________________ )
and _____________________________ ) ________________________
Director
________________________
Director/Secretary
SIGNED (but not delivered until )
the date hereof) as a DEED )
by ▇▇▇ ▇▇▇▇▇▇▇▇ in the presence of: )
Witness Name: ____________________________
Witness Address: ____________________________
____________________________
Witness Occupation:___________________________
SIGNED (but not delivered until )
the date hereof) as a DEED )
by ▇▇▇▇▇▇ ▇▇▇▇▇▇ in the presence of: )
Witness Name: ____________________________
Witness Address: ____________________________
____________________________
Witness Occupation:___________________________
APPENDIX
1. Salaries and bonuses of ▇. ▇▇▇▇▇▇ & ▇. ▇▇▇▇▇▇
------------------------------------------------
G ▇▇▇▇▇▇
Basic salary(pound)100,000 per annum
Car allowance(pound)1,000 per month
Company pension contribution - 5% of basic salary
Bonus payable quarterly in arrears calculated at 20% NPBT per quarter or
(pound)25,000 per quarter whichever is the lesser.
P ▇▇▇▇▇▇
Basic salary(pound)70,000 per annum
Car Allowance (pound)550 per month
Bonus payable quarterly in arrears calculated at 10% NPBT per quarter or
(pound)10,000 per quarter whichever is the lesser.
2. 10 - QSB