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EXHIBIT 99.1
DATED 1997
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THE MANAGERS (1)
TIMELINE, INC. (2)
▇▇▇▇ ▇▇▇▇▇▇ (3)
TIMELINE EUROPE LIMITED (4)
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SUBSCRIPTION AGREEMENT
RELATING TO AN
INVESTMENT
IN
TIMELINE EUROPE LIMITED
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Tel: (▇▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇▇) ▇▇▇-▇▇▇▇
DX: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
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CONTENTS
1. Definitions and Interpretation
2. Conditions
3. Completion
4. Warranties
5. Board Meetings And Financial Information
6. Undertakings
7. Investor Director
8. Subscription for Shares alter Completion
9. Restrictive Covenants
10. Obligation to Reveal Consideration
11. General Provisions
12. Notices
13. Governing Law And Jurisdiction
14. Set Off
Schedule 1: Managers
Schedule 2: The Company
Schedule 3: Warranties
Schedule 4: Directors' Resignation Letter
Schedule 5: Supplemental Deed
Schedule 6: Property
Schedule 7: Warranty Limitations
Agreed Form Documents
Financial Projections
Management Accounts
New Articles (and related shareholder resolutions)
Service Agreements
Distributorship and Source Code License Agreement
Debenture
Charge on Shares
Deed of Acknowledgment
Tax Indemnity
Managers' Acknowledgments
AGREEMENT made the ___________________ day of ____________________1997.
BETWEEN:
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(1) THE PERSONS whose names and addresses are set out in schedule 1 (together
the "Managers" which expression shall extend to and include any of their
respective personal representatives);
(2) TIMELINE INC a company incorporated in Washington and whose registered
office is at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇
▇▇▇▇▇ ("T.I.")
(3) ▇▇▇▇ ▇▇▇▇▇▇ of ▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇, Staffordshire ▇▇▇▇ ▇▇▇
("the Investor" which expression shall include her successors in title to
the A Ordinary Shares)
(4) TIMELINE EUROPE LIMITED details of which are set out in Schedule 2 ("the
Company")
Background
This Agreement has been entered into for the purpose of the Investor,
the Managers and T.I. making an investment in the Company upon the terms and
subject to the conditions contained in this Agreement and contains certain
undertakings and warranties made to induce the Investor to make such
investment.
IT IS AGREED as follows:
1. Definitions and Interpretation
1.1 In this Agreement, unless the context otherwise requires, the
following expressions shall have the following meanings:
"ACT" the Companies Act 1985(as amended)
"ACKNOWLEDGMENT" the acknowledgment to be entered into by T.I.
and the Company in the Agreed Form
"AGREED FORM" in the form of the draft agreed on behalf of
each of the Managers, T.I. and the Investor and
initialed on behalf of each of them for the
purposes of identification;
"THIS AGREEMENT" this Agreement (including any schedule or
annexure to it and any document in the Agreed
Form) as varied from time to time pursuant to
its terms;
"A" ORDINARY SHARES" "A" ordinary shares of L. 1 each in the capital
of the Company the fights of which are set out
in the New Articles;
"BOARD" in relation to each Group Company, its board of
directors from time to time;
"BUSINESS DAY" a day (other than a Saturday) on which banks are
open for the transaction of all normal sterling
business in the City of London
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"CHARGE ON SHARES" the charge over the shares in the Company held
by T.I. in the Agreed Form to be granted in
favour of the Investor by T.I.
"COMPLETION" completion of the subscription for Shares in
accordance with clause 3;
CONTROLLING INTEREST" an interest (within the meaning of schedule 13
part 1 and section 324 of the Act) in shares
conferring in aggregate 50% or more of the total
voting rights conferred by all the shares in the
equity share capital of the Company for the time
being in issue;
"DEBENTURE" the debenture in the agreed form to be granted
by the Company in favour of T.I.
"DEFERRED SHARES" deferred shares of L.1.00 each in the capital of
the Company, the rights of which are set out in
the New Articles
"DISCLOSURE LETTERS" the letters of the same date as this Agreement
from T.I. and the Managers to the Investor and
the Company, together with any attachments,
disclosing matters fiat are exceptions to the
Warranties;
"DISTRIBUTORSHIP AND the distributorship and source code license
SOURCE CODE LICENSE agreement in the Agreed Form to be entered into
AGREEMENT" between T.I. and the Company;
"FINANCIAL the financial projections for the Company in the
PROJECTIONS" Agreed Form;
"GROUP" the Company and every company which is from lime
to time a subsidiary or holding company of the
Company or a subsidiary of any such holding
company and "Group Company" means any one of
them;
"ICYA" the Income and Corporation Taxes ▇▇▇ ▇▇▇▇;
"INDEX" the General Index of Retail Prices for all items
which is published in the United Kingdom in the
Monthly Digest of Statistics by the Office for
National Statistics or any replacement thereof;
"INVESTOR" the Investor and any person who is designated by
a Supplemental Deed to be an Investor pursuant to
this Agreement;
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"INVESTOR DIRECTOR" any director appointed as a director of the
Company in accordance with clause 7 and/or
pursuant to regulation 22 of the New Articles;
"INVESTOR'S ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ of ▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇" ▇▇▇ ▇▇▇;
"MANAGEMENT ACCOUNTS" the unaudited management accounts of the Company
for the period from 1 April 1997 to 31 May 1997
in the Agreed Form;
"NEW ARTICLES" the new articles of association of the
Company in the Agreed Form to be adopted by the
Company on or prior to Completion;
"ORDINARY SHARES" ordinary shares of L.1 each in the capital of
the Company the fights of which are set out in
the New Articles;
"PARTIES" the parties to this Agreement and "Party" shall
mean any one of them;
"PROPERTY" the property brief details of which are set out
in schedule 5;
"RELEVANT PERIOD" the period of time during which the Investor
shall be the registered holder of any Shares in
the Company,
"RESTRICTED the development marketing or supply of on-line
ACTIVITIES" analytical processing or any activities which
are competitive therewith;
"SERVICE AGREEMENTS" the service agreements between the Company and
each of the Managers other than ▇. ▇▇▇▇▇▇, I
▇▇▇▇▇▇▇▇-▇▇▇▇▇ and T Ellesmere in the Agreed
Form;
"SHARES" the "A" Ordinary Shares, Ordinary Shares and
Deferred Shares;
"SUPPLEMENTAL DEED" a deed substantially in the form of the draft
contained in schedule 5;
"TAX INDEMNITY" the indemnity in respect of taxation in the
Agreed Form to be given by T.I. in favour of the
Company and the Investor
"WARRANTIES" the statements set out in schedule 3 and
"WARRANTY" means any one of them;
"WARRANTY CLAIM" a claim under the Warranties or Tax Indemnity
supported by notice to the party receiving the
claim giving reasonable details which arc
relevant to such claim and accompanied by
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the opinion of Counsel of not less than
2 years standing as to the value of
such claim
1.2 In this Agreement, unless the context otherwise requires:
(a) references to:
(i) "PERSON" shall be construed to include any
individual, firm, body corporate, government
or sure, association or partnership (whether
or not having a separate legal personality);
(ii) any statute or statutory provisions will,
unless the, context otherwise requires, be
construed as including references to any
earlier statute or the corresponding
provisions of any earlier statute, whether
repealed or not, directly or indirectly
amended, consolidated, extended or replaced
by such statute or provisions, or re-enacted
in such statute or provisions, and to any
subsequent statute or the corresponding
provisions or any subsequent statute in
force at any time prior to Completion
directly or indirectly mending,
consolidating, extending, replacing or
re-enacting the same, and will include any
orders, regulations, instruments or other
subordinate legislation made under the
relevant statute or statutory provisions
which are in force prior to Completion; and
(iii) clauses and schedules are to clauses and
schedules of this Agreement and references to
sub-clauses and paragraphs are to subclauses
and paragraphs of the clause or schedule in
which they appear;
(b) except as set out in sub-clause 1.1, words and
expressions defined in the Act or the New Articles
shall have the same meaning when used in this
Agreement;
(c) the index and the headings are for convenience only
and shall not affect the construction of this
Agreement;
(d) general words shall not be given a restrictive
meaning:
(i) if they are introduced by the word "other" by
reason of the fact that they are preceded by
words indicating a particular class of act,
matter or thing; or
(ii) by reason of the fact that they are followed
by particular examples intended to be
embraced by those general words;
(e) all covenants, agreements, undertakings,
representations and warranties by more than one
person are given jointly and severally; and
(f) the masculine gender shall include the feminine and
neuter and the singular number shall include the
plural and vice versa.
2. CONDITIONS
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2.1 Save for the provisions of clauses 1, 2, 11 and 12, this
Agreement is conditional upon the following matters being
fulfilled to the satisfaction of the Investor (or being waived
in writing by the Investor):
(a) T.I. have duly passed resolutions of the Company in
the Agreed Form to adopt the New Articles and to
increase the share capital and authorize the
directors to allot shares to be subscribed for by the
Investor, T.I. and the Managers pursuant to clause
3.1 and having delivered to the Investor a certified
copy of them;
(b) the Investor being satisfied with:
(i) the terms and extent of the disclosures in
the Disclosure Letters; and
(ii) the insurance cover of the Group;
(c) receipt by the Investor of the Financial Projections
in terms satisfactory to the Investor.
2.2 Each of the Managers, T.I. and the Company shall use his or
its reasonable endeavors to ensure fulfillment of all the
conditions precedent in sub-clause 2.1.
3. Completion
3.1 Immediately after fulfillment (or waiver) of the conditions
precedent in sub-clause 2.1:
(a) the Investor shall apply and subscribe for 65,500 "A"
Ordinary Shares at a total price of L.[194,999 and
deliver that consideration to the Company on or
before 8th July 1997 or as the Parties shall
otherwise agree;
(b) T.I. shall execute and deliver to the Company and the
Investor the Charge on Shares
(c) T.I. shall execute and deliver to the Company the Tax
Indemnity
(d) The Company shall, and the managers shall procure
that the Company shall, allot the shares subscribed
for by the Investor credited as nil paid free from
any lien, charge or encumbrance, enter the name of
the Investor in the register of members of the
Company as the holder of such shares and issue and
deliver to the Investor share certificates in respect
of such shares;
(e) Subject to the consent of the Company's existing
bankers being obtained, the Company shall execute and
deliver the Debenture to T.I.
(f) T.I. shall procure that ▇▇▇▇ ▇▇▇▇▇▇▇ resigns as a
director of the Company and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ resigns
as director and secretary of the Company and that
each such person delivers a letter to the Company in
the form set out in Schedule 4.
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(g) the accounting reference date of the Company shall be
changed so that the current accounting reference
period of the Company shall end on 30 June 1998 and
each subsequent period shall end on 30 June in each
year
(h) the Company shall pay to T.I. the aggregate sum of
L.91,299.00 representing the first installment of the
amounts owing under the Acknowledgment and the mount
of L.42,868.98 outstanding on current account
(i) the Managers shall apply and subscribe for 22,000
Ordinary Shares at a price of [L.11.68] per Ordinary
Share in the proportions set out in Schedule 1 and
deliver the consideration to the Company by cheque at
the times specified opposite each Managers name in
column [ ] of Schedule 1 or as the parties shall
otherwise agree;
(j) T.I. shall apply and subscribe for 12,499 Ordinary
Shares at a price of L.[ ] per Ordinary Share the
consideration for which will be the capitalization of
the sum of L.[ ] owed by the Company to T.I;
(k) the Company and the relevant Managers having entered
into the Service Agreements;
(l) T.I. and the Company shall execute and deliver to the
Investor the Acknowledgment;
(m) T.I. and the Company shall enter into the
Distributorship and Source Code License Agreement;
(n) ▇▇▇▇ ▇▇▇▇▇▇ shall be appointed an additional director
of the Company.
(o) T.I. and the Managers shall deliver the Disclosure
Letters to the Investor.
(p) The Managers shall deliver acknowledgments in the
Agreed Form to the Investor.
3.2 T.I. and each of the Managers undertakes to the Investor that
he will exercise all rights, authorities, powers and votes as
a shareholder to disapply any preemption fights on the issue
of shares to the Investor pursuant to sub-clause 3.1(d) and
clause 8.
3.3 The allotment of shares to a Manager is conditional upon:
3.3.1 payment or satisfaction of the subscription price for
the share in question;
3.3.2 the Manager executing and delivering this Agreement
to the other parties.
3.3.3 in the case of ▇▇▇▇▇▇ ▇▇▇▇▇▇ her entering into her
Service Agreement and delivering an acknowledgment in
the Agreed Form to the Investor.
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3.4 If a Manager ("the Absent Manager") does not enter into this
Agreement within seven days of the date hereof then he shall
be excluded from the references to the Managers hereunder and:
3.4.1 the remaining Managers shall be entitled by payment
of the subscription price for those shares which were
to be allotted to the Absent Manager within 21 days
of the date hereof, to be allotted with such shares
in proportion to the Ordinary Shares held by them;
and
3.4.2 to the extent any of the subscription price for the
ordinary shares which were to be allotted to the
Absent Manager remains unpaid on the expiry of such
21 day period, the Investor shall be entitled on
payment of the subscription price to the allotment of
such shares.
3.5 Notwithstanding the failure to execute this Agreement by one
or more of the Managers on the date hereof, those Managers who
do execute the Agreement agree to be bound by the provisions
of this Agreement as between them and the other parties.
4. Warranties
4.1 For the purposes of this clause 4 only the expression "the
Managers" shall not include ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Ian
▇▇▇▇▇▇▇▇-▇▇▇▇▇, ▇▇▇▇▇ Ellesmere and ▇▇▇▇▇ ▇▇▇▇▇▇.
4.2 T.I; and each of the Managers jointly and severally
represents, warrants and undertakes to the Investor and the
Company that, at the date of this Agreement, each of the
Warranties is true and accurate and acknowledges that the
Investor has entered into this Agreement on the basis of and
in full reliance upon the Warranties.
4.3 The Company represents warrants and undertakes to the Investor
that, at the date of this Agreement, each of the Warranties is
true and accurate and acknowledges that the Investor has
entered into this Agreement on the basis of and in full
reliance upon the Warranties.
4.4 Each of the Warranties is separate and independent and shall
not be limited or restricted by reference to any other
Warranty or any term of this Agreement and the Investor shall
have a separate claim and right of action in respect of every
breach save that payment of any claim shall to the extent of
such payment, satisfy and preclude any other claim or claims
which is or are capable of being made in respect of the same
facts or circumstances.
4.5 The Warranties are given subject only to those matters fully,
fairly and clearly disclosed in the Disclosure Letters and the
limitations set out in sub-clause 4.12 and Schedule 7.
4.6 The remedies of the Investor in respect of any breach of the
Warranties shall continue to subsist notwithstanding
Completion.
4.7 Save as provided in sub-clause 4.5, T.I, the Company and the
Managers agree that the rights and remedies of the Investor in
relation to any of the Warranties shall not be affected by any
investigation made by or on behalf of the Investor nor shall
any
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information of which the Investor has knowledge (actual or
constructive) prejudice any claim made by the Investor in
respect of the Warranties or operate to reduce any amount
recoverable in respect of any claim under any of the
Warranties.
4.8 If T.I., the Company or a Manager becomes aware at any time of
any matter or circumstance which would or might constitute a
claim under any of the Warranties, T.I. the Company and/or the
relevant Manager (as the case may be) shall procure that
written notice and all reasonable particulars thereof are
given as soon as reasonably practicable to the Investor. For
the avoidance of doubt, neither the Company nor any of the
Managers shall be liable under this clause 4.8 for failure to
give notice of a matter or circumstances of which T.I. was
aware but neither the Company nor any of the Managers were
aware.
4.9 Without prejudice to any rights of contribution existing
between the Warrantors (as defined in Schedule 3) T.I., and
each of the Managers and the Company agrees with the Investor
to waive any right which he or it may have against any officer
or employee of the Company (save where such officer or
employee has acted fraudulently or willfully concealed
information) on which or on whom he or it may have relied
before agreeing to any term of this Agreement or authorizing
any statement in the Disclosure Letter. T.I. and each of the
Managers agrees with the Investor that he has, and will have,
no right of contribution from the Company in relation to any
claim brought against him for breach of any of the Warranties,
whether or not such claim shall also be brought against the
Company.
4.10 Where any Warranty refers to the knowledge, information,
belief or awareness (or similar qualifications), it shall be
deemed to include an additional statement that it has been
made after due and careful inquiry of:
4.10.1 in the ease of the Managers:
(a) each Manager; and
(b) the officers and senior managers of the
Company; and
(c) the professional advisors of the Company.
4.10.2 in the case of T.I.:
(a) each Manager; and
(b) the officers and senior managers of the
Company and T.I.; and
(c) the professional advisors of the Company and
T.I.
4.11 Interest shall accrue on any amount due and payable by T.I., a
Manager or the Company to the Investor in respect of any claim
under the Warranties, from the date which is the due date for
payment until payment of such amount, at the rate of three per
cent annum
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over the base rate of National Westminster Bank PLC from time
to time as well after as before judgment.
4.12 Save for claims in respect of any breach of the Warranties
arising (or any delay in the discovery of which arises) as a
result of fraud or willful non-disclosure:
(a) none of the Managers or the Company or T.I. shall be
liable in respect of any claim or claims for breach
of any of the Warranties unless:
(i) the aggregate liability for all such claims
shall exceed the stun of L.10,000 whereupon
the Company, T.I. and the Managers shall be
liable for the whole of such liability and
not merely the excess; and
(ii) he or it shall have been given written notice
thereof (giving information regarding the
specific matter in respect of which such
claim is made) on or before (in the case of
T.I.) the third anniversary of Completion
(and in the case of the Managers) the date
falling three months after the adoption of
the accounts of the Company for the year
ended 30 June 1999;
(b) the liability of the Company, T.I. and the Managers
for all claims pursuant to the Warranties shall not
exceed:
(i) in the case of each of the Managers, the
amount listed opposite the Manager's nature
under the heading "Warranty Cap" in Schedule
1 (but in the event that J ▇▇▇▇▇▇ does not
execute and deliver this Agreement to the
Investor within 7 days of the date hereof,
the maximum liability of the other Managers
for all claims pursuant to the Warranties
shall be increased by the amount set opposite
her name in column 5 of Schedule 1, such
liability being apportioned between the other
Managers m the proportions to which the
amount specified opposite their names in
column 5 of Schedule 1 bears to the maximum
amount of liability of the Managers for all
claims pursuant to the warranties).
(ii) in the case of the Company, L.1,000,000; and
(iii) in the case of T.I., L.1,000,000
4.13 It is agreed between the Parties that (without prejudice to
any rights accruing to the Investor pursuant to any of the
provisions of this Agreement and the other provisions of this
clause 4) in the event of there being a Warranty Claim for
which a Warrantor is liable, the Investor may (at its option)
either require T.I. the Managers and/or the Company (as the
case may be):
(a) to pay to the Company or, in the case of a liability
to another person which has not been discharged, the
person to whom the liability has been incurred, (i)
an amount equal to any deficiency or liability of the
Company which is greater than warranted and (ii) the
amount by which any asset is worth less than as
warranted; or
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(b) to pay to the Investor an amount equal to the
difference in the value of its shares subscribed for
pursuant to this Agreement on the assumption there
had been no breach of warranty and the actual value
of her shares.
4.14 Where the Company and the Investor have a claim under the
Warranties in respect of the same subject matter, the Investor
shall have an absolute discretion to decide whether the claim
should be brought in the name of the Company or the Investor.
5. Board Meetings and Financial Information
5.1 The Managers and the Company shah procure that during the
Relevant Period:
(a) meetings of the Board of each Group Company are held
not less frequently than once every two calendar
months (or at such lesser frequency as the Investor
may agree in writing) and:
(i) not less than seven days' notice of all
meetings of the Board (or a committee of the
directors) specifying the business to be
transacted at the meeting together with all
written materials and other information given
to directors in connection with such
meetings; and
(ii) not later than fourteen days after all
meetings of the Board (or of a committee of
the directors), a copy of the minutes of such
meetings duly signed by the Chairman,
are given to the Investor and, if appointed, the
Investor Director;
(b) each Group Company keeps proper and up to date
accounting, financial and other records in relation
to its business and affairs, produces its accounts
according to accounting policies agreed with the
Investor and that such records shall be available at
the principal place of business of the Company at all
reasonable times and, upon giving reasonable notice,
for inspection by the Investor;
(c) the budget for the period to 30 June 1998 shall
(unless otherwise agreed by T.I. the Managers and the
Investor) be that contained in the Financial
Projections;
(d) not later than twenty-eight days before the
commencement of the financial year commencing on 1st
July 1998 and each subsequent financial year, a draft
budget detailing forecast profit and loss account,
cash flow and balance sheet information (broken down
in each case into monthly periods and as to the
assumptions behind the said budget and cash-flow
forecast) for the Group for the ensuing financial
year is supplied to the Investor and the Board For
approval by the Investor pursuant to clause 6.1(q);
(e) the Investor and, if appointed, the Investor Director
are supplied, within seven days of adoption by the
Board, with the budget and cashflow forecasts for the
Group;
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(f) the following shall be provided to the Investor and,
if appointed, the Investor Director:
(i) as soon as practicable (and in any event
within twenty-one days of the end of each
month) monthly management accounts of the (on
a consolidated and individual, company basis)
which shall consist of a balance sheet,
profit and loss account and cashflow
statement;
(ii) (as soon as practicable) the audited
consolidated and individual company accounts
of the Croup, together with the notes thereto
and the directors and auditors reports
thereon and any auditors management letter
given to any Group Company in respect of such
accounts; and
(iii) (as soon as practicable) such other
information as to the financial affairs and
business of each Group Company as the
Investor may reasonably request from time to
time and in particular (but without prejudice
to the generality of the foregoing) to
explain any variations between the budgeted
and actual figures of that Group Company for
any period;
(iv) prompt notice of any breach of this
Agreement, the New Articles, or the Service
Agreements of which they become aware.
5.2 If the Company or the Managers shall fail in any material
respect to provide any of the information referred to in
clause 5.1, the Investor may (without prejudice to any other
rights it may have in respect of such breach) appoint an
independent firm of accountants to produce such information or
investigate the affairs of any Group Company at the Company's
expense. The Company and the Managers shall procure that each
Group Company shall afford or shall procure that there shall
be afforded by any necessary third party or to any such firm
such assistance (including unrestricted access to the books
0L. account of any Group Company) as such L. n-m may
reasonably request.
6. Undertakings
6.1 T.I. and each of the Managers, and (so far as it may lawfully
do so) the Company undertakes to the Investor to use its/his
respective rights and powers, whether as shareholder, director
or otherwise to procure so far as he/it is able that during
the Relevant Period, except with the prior consent of the
Investor no Group Company shall (save where required in
accordance with the New Articles):
(a) create, allot or issue any further shares or any loan
stock convertible into shares;
(b) grant or agree to grant to any person any option or
right to subscribe for, or otherwise require the
allotment or issue of, any shares or any loan stock
convertible into shares;
(c) purchase, redeem, consolidate, reduce, sub-divide or
convert any of its shares (issued or unissued,
present or future) nor contract to do so save as
contemplated by their respective articles of
association;
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(d) replace or amend its memorandum or articles of
association;
(e) change its auditors, accounting reference date (save
as contemplated herein) or the accounting policies,
principles, practices or bases used in the
preparation of its accounts unless a change is
required by virtue of a new Financial Reporting
Standard or other generally recognized accountancy
standard or deviate from generally accepted
accounting policies;
(f) effect a members voluntary winding-up or otherwise
take any steps to have itself wound up;
(g) appoint a director to office or remove a director
from office or any Group Company;
(h) declare or pay any dividend or other distribution or
make or allow to be made any distribution to
shareholders (as defined in ICTA) except for any
dividends payable on the "A" Ordinary Shares in
accordance with the New Articles and, (save where the
Investor holds inexcess of 40% of the Equity Shares
(as defined in the New Articles)) the Ordinary
Shares, in accordance with the New Articles;
(i) acquire the whole or any significant part of the
business or undertaking or the whole or any
significant part of the shares in the capital of a
company;
(j) make any material change e (including cessation) in
the nature of its business as at Completion or in the
case of a Group Company acquired or a business
purchased after Completion, at the ▇▇▇▇ of such
acquisition;
(k) (save as contemplated in the budget et for the
relevant period agreed in writing with the investor)
effect any expansion, development or evolution of its
business (whether to be conducted as part of or in
connection with its main business or ancillary to it)
otherwise than through another Group Company;
(l) sale, transfer, lease, license, assign or otherwise
dispose of (or agree so to do) the whole of its
undertaking or any significant part of its assets
whether by a single transaction or a series of
transactions;
(m) create or permit to arise or continue any mortgage,
charge, debenture or lien (except any lien arising in
the ordinary course of trading) over the whole or any
part of its assets, property or undertaking (other
than those existing at Completion) or acquire by any
means any assets which are already subject to any
mortgage, charge, debenture or any such lien;
(n) make any loan or advance or provide any credit other
than in the ordinary course of business or enter into
any guarantee, collateral mortgage charge, debenture
or other security (including any letter of set-off
or postponement of obligations of any person or body
or make a payment (other than in respect of approved
employee expenses) on behalf of any body or person;
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15
(o) enter into any lease, license, tenancy, hire purchase
agreement, credit sale agreement, conditional sale
agreement, equipment leasing agreement, factoring
agreement, or agreements to discount invoices
(together the "finance agreements") or otherwise
borrow (including amounts raised by loan or
overdraft) so that the total amount of the value of
the finance agreements and/or the total amount of the
borrowings of the Group exceeds the amount of credit
or borrowings (as the case may be) provided for in
the annual budget for that financial year approved by
the Investor or, if no borrowings are shown in such
budget. L.20,000;
(p) incur capital expenditure, whether or not in the
ordinary course of business, in respect of a single
item (or related series of item), or in any one
financial year of an aggregate amount, in excess of
ten per cent (10%) of the amount of such single or
aggregate capital expenditure (as the case may be)
provided for in the annual budget for that financial
year approved by the Investor for the purposes of
this sub-clause;
(q) approve any budget or business plan or make any
material changes to any budget or business plan
previously approved by the Investor (whether annual,
six monthly, quarterly or relating to longer periods
or otherwise);
(r) vary the terms of the Service Agreements (other than
to comply with legislative requirements) or increase
the emoluments payable to any of the Managers (other
than any indexation increases permitted by the
Service Agreements) or any senior employee (being an
employee whose emoluments exceeds L.25,000 per annum)
or any employee who is a connected person (within the
meaning of section 839 ICTA) with a Manager;
(s) institute or adopt any share incentive, share option,
▇▇▇▇, profit sharing, bonus, pension or retirement
benefits scheme or arrangements for its employees
generally or any of them or save in accordance with
their Service Agreements, grant options or make, pay
or procure benefits to any of the Managers under any
such schemes or arrangements;
(t) pay any compensation for loss of office to a
director, save pursuant to a decision or order of a
court of competent jurisdiction or an industrial
tribunal;
(u) enter into any transaction, arrangement or agreement
with or for the benefit of any director or any person
connected with him in any way whatsoever or agree to
amend or vary the same, whether such variation or
amendment is made in accordance with the terms of the
same or otherwise;
(v) enter into any contract or commitment:
(i) (save for maintenance contracts entered into
in the ordinary course of business) which is
incapable of complete performance in
accordance with its terms within six months
after the date on
which it was entered into;
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16
(ii) which cannot readily be fulfilled or
performed by the Group Company without undue
or unusual expenditure of money or effort;
(iii) which involves expenditure or anticipated
income equal to or in excess of ten percent
(10%) (save for the grant by the Company of
software licenses/distribution agreements
where the applicable limit shall be 25%) of
the total anticipated expenditure or total
anticipated income of the Group for the
financial year in question (as determined by
reference to the budget for that financial
year approved as such under this Agreement);
(iv) otherwise than in the ordinary course of
business and on arm's length terms;
(w) fail adequately to insure and keep insured the
relevant Group Company and all of its property and
assets against all risks as are usually insured by
prudent companies carrying on similar businesses;
(x) commence any litigation or other legal proceedings
(other than actions to recover debts in the ordinary
course of business);
(y) pass any special or elective resolutions;
(z) sell transfer or otherwise dispose of any shares or
any interest therein save in accordance with the New
Articles.
(aa) make any determination or pass any resolution
pursuant to Article [10.5] of the New Articles or
agree any value for any shares pursuant to Article
[10.1] of the New Articles;
(bb) appoint any committee of its Board; or
(cc) appoint any new employee whose emoluments exceed
L.25,000 per annum;
(dd) enter into any contract or arrangement with T.I. or
pay any monies to T.I. (except as provided in the
Acknowledgment and under the New Articles the
Distributorship and Source Code License Agreement and
the Debenture);
(ee) agree any profit targets for the purposes of bonus
payments payable under the Service Agreements.
6.2 T.I. and each of the Managers undertakes to the Investor not
without the prior written consent of the Inventor to charge
dispose of or agree to charge or dispose of in whole or in
part any interest (legal or beneficial) in any share in the
Company for the time being held by him except a transfer
permitted pursuant to the New Articles.
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17
6.3 T.I. and each of the Managers shall use their respective
rights and powers, 14 whether as shareholder, director or
otherwise, to procure so far as he is able that the Company
shall, during the Relevant Period:
(a) make any necessary management or service charges on
any Group Company and procure that such Group Company
shall, to the extent permitted by law and the terms
of its banking facilities (in so far as the same has
been approved in writing by the Investor), pay
dividends, management and service charges and make
such distributions to the Company to give the Company
sufficient distributable profits to pay dividends and
redeem any shares falling due for redemption in
accordance with the New Articles;
(b) notify the Investor forthwith upon the Managers or
any of them becoming aware of any offer for shares in
the capital of the Company constituting a Controlling
Interest;
(c) maintain "Keyman" insurance policies on the lives of
the following Managers for the amounts specified
opposite each Manager's name below:
▇▇▇▇▇▇▇ ▇▇▇▇▇ L. 500,000
▇▇▇▇ ▇▇▇▇▇▇ L. 150,000
▇▇▇▇ ▇▇▇▇ L. 150,000
▇▇ ▇▇▇▇▇▇ L. 150,000
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ L. 150,000
▇▇▇▇ ▇▇▇▇▇▇ L. 150,000
(d) if required by the Investor, pursue all and any
claims it may have against T.I. under this Agreement
and against the Managers under their Service
Agreements and this Agreement and shall not, without
the prior written consent of the Investor, release,
compound or compromise any liability to the Company
by any party to such agreements or give time or
indulgence to any such party.
6.4 The Investor undertakes to the Managers that whilst she is the
holder of over 50% of the Equity Shares, she will not vote in
favour of any resolution to increase the authorized share
capital or allot or issue shares in the capital of the Company
(other than as contemplated in this Agreement) without the
consent of the holders of at least 51% of the Ordinary Shares.
6.5 The holders of 51% of those Ordinary Shares held by the
Managers at the date of this Agreement shall be entitled by
notice in writing served on the Company to appoint a Director
to the board of the Company and to dismiss such Director and
appoint another in his/her place. The Investor undertakes not
to use her rights or powers as a shareholder and (where not
herself a director) to procure that the Investor Director does
not use his rights or powers as a director to remove such
appointee.
6.6 If a Manager ("the Departing Manager") is dismissed at the
written direction of the Investor and the other Managers do
not acquire the Departing Manager's shares under the New
Articles and any of such shares are acquired by the Investor,
the Investor agrees that upon payment to the Investor of the
purchase price paid for such shares by the
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Investor plus 10% of such price, to transfer those shares to
an employee of the Company in a senior capacity nominated by
the Managers within a period of six months of the date of
dismissal of the Departing Manager provided that such employee
is reasonably acceptable to the Investor (such acceptance not
to be unreasonably withheld or delayed).
7. The Investor Director
7.1 During the Relevant Period the Investor may at any time by
notice in writing served on any Group Company nominate an),
one person to be a non-executive director of that company and
may similarly require the removal from office of any such
person and appoint another person in his or her place.
Forthwith upon service of any such notice the Company, T.I.
and the Managers will procure the appointment or removal (as
the case may be) of the Investor Director who is the subject
of such notice with effect from the date of receipt by that
company of the notice.
7.2 For so long as any Investor Director holds office as a
director of any Group Company, the Company undertakes to the
Investor to pay to the Investor Director a reasonable fee to
be agreed between the Company and the Investor (taking into
account the level of fees payable to institutional board
appointees in similar circumstances) (but in any event not more
than (at rates applicable on the date hereof) L.10,000 Index
linked) calculated on a daily basis in respect of the time and
work carried out by him or her together with an amount
equivalent to the reasonable out-of-pocket expenses properly
and necessarily incurred by him or her whilst engaged on any
Group Company's business (including expenses incurred in
connection with attendances at any meeting).
7.3 The fee payable under sub-clause 7.2 shall be payable monthly
in arrears on the last day of each calendar month. For
subsequent years the fee payable shall be at the rate agreed
for the first year as increased to reflect any increase in the
index over the twelve month period ending, on the anniversary
of the appointment.
7.4 Whether or not an Investor Director shall have been appointed
the Investor shall at all times during the Relevant Period be
entitled to send a representative to attend and to address
board meetings of any Group Company.
7.5 The Investor Director shall be entitled to disclose to the
Investor all such information concerning the Group as he may
receive subject to such disclosure being compatible with his
duties as a director of the Company.
8. Subscription for shares after Completion
8.1 Subject to clauses 8.2 to 8.5 and the Distributorship and
Source Code License Agreement still subsisting (which
condition may be waived by the Investor), the agrees to
subscribe for, and the Company agrees to allot:
8.1.1 (subject to the losses of the Company for the period
from 1 July 1997 to 30 September 1997 being no more
than [L.90,489.60 (L.75,408 x 120%)], unless such
condition is waived by the Investor), 1 Deferred
Share at a price of [L.241,999.00] less the amount by
which the losses for that period exceed L.75,408.00,
such subscription monies to be payable on 31 October
1997;
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19
8.1.2 (subject to the losses of the Company for the period
1 July 1997 to 31 December 1997 being no more than
[L.201,084.00 (L.167,570.00 x 120%)] unless such
condition is waived by the Investor), l Deferred
Share at a price off 141,999.00 less the amount by
which the losses for the period 1 October 1997 to 31
December 1997 exceed L.92,162.00, such subscription
monies to be payable on 31 January 1998,
8.1.3 (subject to the losses of the Company for the period
1 July 1997 to 31 March ▇▇▇▇("▇▇▇ ▇▇▇▇▇▇▇▇▇ Period")
being no more than [L.217,773.00 (L.181,478 x 120%)]
unless such condition is waived by the Investor), 1
Deferred Share at a price of L.141,999.00 less the
amount by which the losses for the period 1 January
1998 to 31 March 1998 exceeds L.13,908.00 plus (up to
a maximum subscription price for the allotment of all
Deferred Shares pursuant to this clause 8.1 of
L.525,997.00) any amount by which the losses for the
Aggregate Period are less than L.181,478.00, such
subscription monies to be payable on 30 April 1998;
8.2 The Investor shall be entitled to deter the subscription of
any Deferred Shares:
8.2.1 to the extent of and for so long as the Investor has
any outstanding Warranty Claim or other claim under
this Agreement against the Company, T.I. or the
Managers or the Company has any outstanding claim
against T.I. under the Distributorship and Source
Code License Agreement;
8.2.2 until such time as the management accounts have been
prepared in order to calculate the losses of the
Company for the purposes of this clause 8 and have
been agreed or determined in accordance with clause
8.4;
8.2.3 until such time as the technology transfer referred
to in clause 3 (a) of the Distributorship and Source
Code License Agreement has been completed.
8.3 The subscription price for the Deferred Shares to be allotted
to the Investor shall be reduced to the extent of any
liability of the Company, T.I. or the Managers as a result of
a Warranty Claim or other claim under this Agreement, or any
liability of T.I. to the Company under the Distributorship
Source Code License Agreement
8.4 The amount of the losses of the Company for the purposes of
this clause 8 shall exclude losses incurred prior to
Completion and shall be calculated by reference to the
management accounts of the Company for the relevant period.
The management accounts shall be prepared by the Company in
accordance with the accounting policies and principles applied
in the preparation of the Accounts (as defined in schedule 3)
and shall make reasonable provision for all costs and
liabilities (both actual and contingent) of the Company. If
the Investor is not satisfied with the management accounts
then the preparation of the management accounts may be
referred to an independent accountant selected by agreement
between T.I., the Manager and the Investor or, failing such
agreement, nominated by the President for the time being of
the Institute of Chartered Accountants for England and Wales
at the request of any of T.I., the Managers or the
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Investor. The Accountant shall act as expert and not as
arbitrator and his costs shall be borne by the Company.
8.5 For the avoidance of doubt the Investor shall be entitled to
subscribe for the three Deferred Shares retorted to in this
clause 8 for an aggregate subscription price of up to
L.525,997.00 notwithstanding that any conditions referred to
in this clause 8 have not been satisfied. If the Investor
wishes to pay an amount in excess of the subscription price
calculated in accordance with this clause 8 payable for those
Deferred Shares then she must elect to do so within three
months after the adoption of the Accounts for the financial
year ended 30 June 1998.
8.6 The Managers undertake to the Investor and the Company to pay
the subscription price for the shares to be allotted to them
in the amounts and on the dales specified opposite each
Managers name in column 4 of Schedule 1.
8.7 The Company shall defer the allotment of an Ordinary Share to
a Manager until such time as that Manager has paid the
subscription price for the share in question. For the
avoidance of doubt, such number of shares as is equal to the
aggregate subscription price for all shares to be acquired by
that Manager divided by the subscription price actually paid
shall be allotted to him in accordance with clause 3.1(i) upon
such payment being made.
8.8 If a Manager ("the Defaulting Manager") does not pay the
subscription price for an Ordinary Share to be allotted to him
under this Agreement by the due date for payment, the Company
shall not allot the Ordinary Share to the Defaulting Manager
and:
8.8.1 the Managers (other than the Defaulting Manager)
shall be entitled by payment of the subscription
price for the Ordinary Share in question to the
Company within fourteen days after the due date for
payment to the allotment of such Ordinary Share in
the proportions in which they hold Ordinary Shares in
the capital of the Company subscribed for by them;
and
8.8.2 to the extent the price for any of the Ordinary
Shares which were to be allotted to the Defaulting
Manager remains unpaid within such period of fourteen
days, the Investor shall be entitled on payment of
the appropriate price to the allotment of the
Ordinary Share in question.
9. Restrictive covenants
9.1 In order to protect the value of the Investor's investment in
the Company and also the Group's legitimate business
interests, T.I. and each of the Managers (excluding ▇▇▇
▇▇▇▇▇▇▇▇-▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇ Ellesmere) undertakes
with the Investor that, without the prior written consent of
the Investor:
(a) it or he will not for a period of three years from
the date hereof directly or either solely or jointly
with any other person:
(i) [(in the case of the Managers only)] within
the United Kingdom be engaged, concerned or
interested (except as holder of a beneficial
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21
interest in shares of less than three percent
(3%) in nominal value of any class of shares
or debentures quoted on a recognized stock
exchange) in any of the Restricted
Activities;
(ii) [(in the case of the Managers only)] canvass
or solicit or accept orders form any person
for any goods or services competing with any
goods or services which have been
manufactured or supplied to such person in
the normal course of the business of any
member of the Group at any time during the
twelve month period prior to the date hereof
or induce any such person to cease being a
customer of the Group;
(iii) canvass or solicit for employment or employ
any person who is, or has at any time during
the twelve month period prior to the date
hereof been, an employee of the Group
employed in a senior or management position
or endeavor to induce any such person to
cease being an employee of the Group; or
(iv) interfere or seek to interfere with the
continuance of supplies to any Group Company
from any supplier who has been supplying
goods and/or services to the Group Company at
any time during the twelve month period prior
to the date hereof, if such interference
causes or would cause that supplier to cease
supplying or materially to reduce its
supplies of those goods and/or services to
the relevant Group Company;
(b) he (in the case of the Managers) will whilst he
remains an executive director or employee of the
Company devote substantially the whole or his working
time to the business of the Group; and
(c) neither he nor it shall at any time, except during
the course of acting on or about the business of the
Company, directly or indirectly, or solely or jointly
with any other person:
(i) use the name of any Group Company or any
presentation or application of the same,
whether in terms of packaging, get-up or
otherwise or anything similar to it or
capable of being confused with it; or
(ii) make use of or disclose any confidential
information which he may possess appertaining
to the business or affairs of any Group
Company.
9.2 Each of the undertakings contained in this clause 9 is a
separate and independent undertaking by each of the Managers
and T.I. and in the event that any restraint comprised in any
such undertaking shall be found to be void or unenforceable
but would be valid if part of the wording was deleted or the
period or area of application was reduced, that restriction
shall apply with such modifications as may be necessary to
make it valid and effective.
9.3 T.I. and each of the Managers hereby acknowledges and accepts
that, having taken independent professional advice, the
undertakings contained in this clause 9 are fair and
reasonable and do not go beyond what is necessary to protect
the legitimate interests of
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the Investor in the light of its investment in the Company on
the terms of this Agreement.
9.4 The restrictions contained in clause 9.1 shall not apply in
the case of a Manager, after the termination of his employment
in circumstances where he has been wrongfully dismissed at the
written direction of the Investor.
10. Obligation To Reveal Consideration
10.1 Each of the Managers hereby undertakes to the investor that on
any transfer of a Controlling Interest he will at the request
of the Investor forthwith fully reveal to the Investor in
relation to such transfer the details of all agreements,
arrangements and understandings relating to the consideration
he has received or will receive from whatever source as a
result of such transfer of control.
10.2 Each of the Managers and the Company acknowledges and accepts
that on any disposal or proposed disposal of shares in the
Company by the Investor the Investor shall not be obliged to
give any warranty, undertaking, representation or indemnity to
any purchaser of such shares, other than a warranty that the
Investor has an unencumbered title to such shares, has
capacity to transfer the same with full title guarantee and
further that the Investors liability under such warranty shall
be capped to the mount received by the Investor for such
shares.
11. General Provisions
11.1 Entire Agreement
This Agreement and documents to be entered into pursuant to it
sets out the entire agreement and understanding between the
Parties in respect of the subject matter of this Agreement and
the other documents aforesaid and T.I. and each the Managers
acknowledge that they have not relied on any warranties
representations or conditions on the part of the Investor in
entering into this agreement (except this clause shall not
exclude liability for fraudulent representations).
11.2 Assignment
This Agreement shall be binding upon and shall enure for the
benefit of the Investor and its successors but shall not be
assignable by any of the parties save in connection with a
permitted transfer of shares pursuant to the New Articles and
clause 11.12.
11.3 Variation
No purported variation of this Agreement shall be effective
unless it is in writing and signed by or on behalf of each of
the Parties.
11.4 Effect of Completion
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Except to the extent already performed, all provisions of this
Agreement shall, so far as they are capable of being performed
or observed, continue ill full force and effect
notwithstanding Completion.
11.5 Invalidity
If any part of this Agreement is found by any court or
competent authority to be invalid, unlawful or unenforceable
in any jurisdiction, then that part shall be deemed not to be
a part of this Agreement, and the enforceability of the
remainder of this Agreement shall not be affected, neither
shall it affect the validity, lawfulness or enforceability of
that provision in any other jurisdiction.
11.6 Releases
Any liability to the Investor under this Agreement may in
whole or in part be released, compounded, compromise or
postponed by the Investor in its absolute discretion without
in any way prejudicing or affecting its rights against any
other person under the same or a like liability or in respect
of that liability not so waived, released, compounded,
compromised or postponed.
No delay in exercising any right, power or remedy by any
Investor shall, unless otherwise agreed in writing by the
Investor, constitute a waiver by the Investor of, or impair or
preclude any further exercise of, any right, power or remedy
arising under this Agreement or otherwise.
11.7 Counterparts
This Agreement may be executed in any number of counterparts
and by the Parties on separate counterparts, but shall not be
effective until each Party has executed at least one
counterpart and each counterpart, when executed, shall be an
original of this Agreement and all counterparts shall together
constitute one and the same instrument.
11.8 Restrictive Trade Practices 1976
No provision of this Agreement, or of any agreement or
arrangement of which it forms part, which causes the Agreement
or such agreement or arrangement to be subject to registration
under the Restrictive Trade Practices Act 1976 shall take
effect until the day after particulars of this Agreement, and
any agreement or arrangement of which it forms part have been
supplied to the Director-General of Fair Trading under section
24, Restrictive Trade Practices Act 1976 and the Parties agree
to do all acts and things including, if necessary, executing
documents to ensure that a valid and effective furnishing is
made and that all restrictions in this Agreement, and in any
agreement or arrangement of which it forms part, are fully
enforceable.
11.9 Conflict with New Articles
In the event of any conflict between the provisions of this
Agreement and the New Articles, as between the Parties (other
than the Company) the provisions of this
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Agreement shall prevail and the Parties shall, if so required
by the Investor, procure that the New Articles be amended so
as to remove such conflict.
11.10 Reimbursement of fees
Where the giving of any consent pursuant to the provisions of
this Agreement involves the Investor incurring any legal costs
or expenses, the Company shall (if the Investor so requires
and in so far aa is lawful or is capable of being made lawful)
be responsible for any such costs which are reasonably and
properly incurred by the Investor for the purpose of giving
such consent and shall pay the same within seven days of the
presentation by the Investor or its solicitors of a valid
invoice for such costs.
11.11 Confidentiality
(a) The terms of this Agreement shall be confidential to
the Parties and none of the Parties shall, without
the prior consent of the others (such consent not to
be unreasonably withheld or delayed), publicize the
terms of this Agreement save as required to comply
with any relevant statute or regulatory authority of
competent jurisdiction.
(b) The Investor shall be entitled and authorized to
consult fully with the bankers and auditors to, and
any investors or proposed investors in, any Group
Company as to its affairs and to exchange information
whether oral or written in such manner as the
Investor and the said bankers, auditors or any other
investors or proposed investors shall deem necessary.
This authority shall also extend to any disclosures
which the Investor is required to make to any
regulatory body to which it or any member of its
group is subject.
11.12 Supplemental Deed
Notwithstanding any provision of this Agreement or the New
Articles to the contrary, no allotment, renunciation or
transfer of any Share or any interest therein shall be made or
entered into or registered unless or until the proposed
allotee, renouncee or transferee (as the case may be), if not
a party to this Agreement, has entered into a Supplemental
Deed.
12. Notices
12.1 Any notice to a Party under this Agreement shall be in writing
signed by or on behalf of the Party giving it and shall,
unless delivered to a Party personally, be left at, or sent by
prepaid first-class post, prepaid recorded delivery or
facsimile to the address of the Party as set out in this
Agreement or as otherwise notified from time to time.
12.2 A notice shall be deemed to have been served:
(a) at the time of delivery if delivered personally
during normal business hours;
(b) except as referred to in sub-clause 12.3:
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(i) 5 business days after posting in the case of
an address in the United Kingdom and
ninety-six hours after posting for any other
address;
(ii) two hours after transmission if served by
facsimile during normal business hours of the
recipient.
If such deemed time of service is not during normal business hours in
the country of receipt, the notice shall be deemed served at the opening of
business on the next business day of that country.
12.3 The deemed service provisions set out in sub-clause 12.2 do
not apply to:
(a) a notice served by post, if there is a national or
local suspension, curtailment or disruption of postal
services which affects the collection of the notice
or is such that the notice cannot reasonably be
expected to be delivered within forty-eight hours
after posting; and
(b) a notice served by facsimile if, before the time at
which the notice would otherwise be deemed to have
been served, the receiving Party informs the sending
Party that the notice has been received in a form
which is unclear in any material respect, and, if it
informs the sending party by telephone, it also
dispatches a confirmatory facsimile within two hours.
12.4 In proving service it will be sufficient to prove:
(a) in the case of personal service, that it was handed
to the Party or delivered to or left at its address;
(b) in the case of a letter sent by post, that the letter
was properly addressed, stamped and posted;
(c) in the case of facsimile, that it was properly
addressed and dispatched to the number of the Party,
12.5 A Party shall not attempt to prevent or delay the service on
it of a notice connected with this Agreement.
13. Governing Law And Jurisdiction
13.1 This Agreement shall be governed by and construed in
accordance with English law.
13.2 Each of the Parties irrevocably submits for all purposes in
connection with this Agreement to the non-exclusive
jurisdiction of the courts of England.
14. Set Off
The Company shall be entitled to set off or withhold payment of any
monies due from time to time from the Company to T.I. (including
without limitation any monies due under the Articles, the
Acknowledgment or the Distributorship and Source Code License
Agreement) against any liability of T.I. to the Company or (at the
direction of the Investor and subject to the Investor if
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26
she so requires being paid an amount equal in value to the benefit of
the set off or withholding by the Company) the Investor or in respect
of any claim of the Company or (at the direction of the Investor and
subject to the Investor if she so requires being paid an amount equal
in value to the benefit of the set off or withholding by the Company)
the Investor against T.I.
IN WITNESS whereof this document has been executed as a deed the day and year
first before written.
-25-
27
SCHEDULE 1
MANAGERS
No. of Ordinary Shares Total Terms of
Name and Address Subscribed for Subscription Price Payment of Price Warranty Cap
---------------- -------------- ------------------ ---------------- ------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ 4,232 50,000(1) L.26,000 113,500
▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇ ▇▇▇ (2) L.24,000
in 9 months
▇▇▇▇ ▇▇▇▇▇▇ 2,115 25,000 L.500 40,500
▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇ on Completion
Church ▇▇▇▇▇▇▇▇ L.24,500
Fleet in 90 days
▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇ 2,115 25,000 L.1,000 40,500
▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ L.24,000
in 90 days
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 2,115 25,000 L.15,000 n/a
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ on Completion
▇▇▇ ▇▇▇▇▇▇ ▇.▇▇,▇▇▇
▇▇▇▇▇▇ ▇▇▇ ▇▇▇ in 90 days
▇▇▇ ▇▇▇▇▇▇▇▇-▇▇▇▇▇ 2,115 25,000 All within 90 days n/a
▇▇▇▇▇ ▇▇▇▇▇▇ 2,115 25,000 L.15,000 n/a
on Completion
L.10,000
in 90 days
▇▇▇▇▇▇ ▇▇▇▇▇▇ 1,240 15,000 All within 90 days 24,500
▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 2,115 25,000(3) All on Completion 40,500
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ 2,115 25,000 L.1,000 40,500
30 The Cloisters on Completion
Frimley ▇.▇▇,▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ in 9 months
▇▇▇▇▇ Ellesmere 1,693 20,000 All on Completion n/a
--------------------------------------------------------------------------------------
22,999 260,000 300,000
-26-
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Notes: (1) L.26,000 debt from Company to M ▇▇▇▇▇ is being capitalized for
same value of shares at subscription price.
(2) L.25,000 deferred for 9 months after Completion.
(3) L.25,000 of debt from Company to C ▇▇▇▇▇▇ is being capitalized
for same value of shares at subscription price.
-27-
29
SCHEDULE 2
TIMELINE EUROPE LIMITED
1. Registered Number: 3081037
2. Date of Incorporation: 18 July 1995
3. Place of Incorporation: England and Wales
4. Address of Registered Office: ▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇ ▇▇▇
5. Class of Company: Private Limited
6. Authorized Share Capital: L.100 divided into 100 shares
of L.1 each
7. Issued Share Capital: 1 share of L.1
8. Directors: ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇ - ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇
▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇ - ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇
9. Secretary: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
(as above)
10. Accounting Reference Date: 31 March
11. Auditors: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
12. Tax Residence: United Kingdom
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SCHEDULE 3
WARRANTIES
In this Schedule 3 the following expressions have the following
meanings:
"ACCOUNTS" the Company's audited balance sheet as
at the end of, and the profit and loss
account for the financial year ended
on, the Accounts Date together with the
director's report, the auditors report,
cash flow statements and notes.
"ACCOUNTS DATE" 31st March 1997
"CAA 1990" Capital Allowances ▇▇▇ ▇▇▇▇;
"INSIDER" the Managers, T.I., any past or present
director of the Company or T.I. or any
person who is or was connected with
such person.
"INTELLECTUAL PROPERTY RIGHTS" patents, trade marks, service marks,
registered designs, design rights,
copyright, know how and all other
intellectual property (of whatever
nature) and any applications for
the same;
"MANAGEMENT ACCOUNTS" the Company Management Accounts [ ];
"SHARE" the ordinary share of L.1 in the
Company held by T.I.
"STOCK" Stocks (as defined in Statement of
Standard Accounting Practice No. 9
adopted by the Accounting Standards
Board) of the Warranted Company;
"TAXATION" any tax, duty, impost or levy, at any
time, of the United Kingdom or
elsewhere, whether governmental, state,
provincial, local governmental or
municipal, and any fine, penalty,
charge or interest relating to any such
tax, duty, impost or levy;
"TAXATION AUTHORITY" any taxing or other authority competent
to impose any liability to Taxation;
"TAXATION STATUTE" any statute (and all regulations
whatsoever made under it) enacted or
coming into force on or before the date
of this Agreement relating to Taxation;
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"TCGA" Taxation of Chargeable Gains ▇▇▇ ▇▇▇▇;
"WARRANTORS" T.I. and each of the Managers
"ACCOUNTING STANDARDS" all statements of Standard Accounting
Practice adopted and all Financial
Reporting Standards issued by the
Accounting Standards Board or such body
as may be prescribed under Section
256(1) of the Act.
"ICTA" Income and Corporation Taxes Act 1988
"PLANNING ACTS" every law for the time being in force
in England and Wales and (in the case
of any law applying to particular
localities) having application to the
locality of the Property in relation to
Town & Country Planning and development
control
"VATA" Value Added Tax ▇▇▇ ▇▇▇▇
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1. SCHEDULES 1 & 2; CAPITAL
1.1 The information contained in Schedule 2 is true, complete and
accurate in all respects.
1.2 The Share is the only share in issue and is fully paid.
1.3 Save in accordance with this Agreement, there are no
agreements or arrangements in force which grant to any person
any right to call for the allotment or issue of any share or
loan capital of the Comply or to convert any stock or security
into share capital of the Company.
1.4 The Company does not have any interest, nor at any time in the
period of six years ended on the date of this Agreement has it
had any interest, in the share or loan capital of any body
corporate.
1.5 There is not, nor is there any agreement or arrangement to
create, any encumbrance affecting the Share, and no claim has
been made by any person to be entitled to any of the
foregoing.
1.6 None of the Managers, T.I. or the Company has received any
application or notice of any intended application for the
rectification of the register of members of the Company.
2. The Accounts
2.1 The Accounts:
2.1.1 comply with the Companies Act save for the fact that
they are not audited or adopted by the Company;
2.1.2 have been prepared in accordance with the historical
cost convention, with generally accepted accounting
principles and practices in the United Kingdom and
all applicable Accounting Standards and all
applicable abstracts issued by the Urgent Issues Task
Force Committee of the Accounting Standards Board;
2.1.3 show a true and fair view of the state of affairs of
the Company as at the Accounts Date and of its
results for the financial year ended on the Accounts
Date;
2.1.4 either make full provision or reserve for, or make
full disclosure in the notes of, all material
liabilities (including future and contingent) and
financial commitments of the Company outstanding or
accrued as at the Accounts Date;
2.1.5 fully provide for all bad debts as at the Accounts
Date and adequately provide for all doubtful debt as
at that date;
2.1.6 attribute a value to the Stocks which does not exceed
the lower of cost or net realizable value as at the,
Accounts Date, after wholly writing off all redundant
and obsolete Stocks and writing down appropriately
any damaged or slow moving Stocks; and
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2.1.7 are not affected by any extraordinary or exceptional
item (save as disclosed in the Accounts).
2.2 The Management Accounts have been prepared in good faith and
with due diligence and on bases and principles consistent with
those used in the preparation of the Accounts and accurately
reflect, in all material respects, the financial position of
the Company for the period to which they relate.
3 Capacity
The Warrantors have the necessary power and authority to enter into
and perform this Agreement and this Agreement constitutes valid and
binding obligations of the Warrantors in accordance with its terms.
4. Insiders' Interests
4.1 There is not outstanding and there has not at any time during
the period of three years ended on the date of this Agreement
been:
4.1.1 any loan, guarantee or indemnity given by the Company
in favour of any Insider or in favour of any other
person in respect of any liability of any Insider;
4.1.2 any loan, guarantee or indemnity given by any Insider
in favour of the Company or in favour of any other
person in respect of any liability of the Company; or
4.1.3 any other contract to which the Company is or was a
party and in which any Insider is or was interested
in any way whatsoever (excluding any contract of
employment between the Company and any of its
directors).
4.2 No Insider has any interest, direct or indirectly in any trade
or business which competes or is likely to compete with the
Company's business.
5. Information Supplied
5.1 The information contained in the Disclosure Letter and in any
documents annexed to or referred to in it is true, complete
and accurate in all respects, and is not misleading whether
because of any omission or ambiguity or for any other reason.
5.2 All information contained in any written document or
communication supplied to the Investor or any of its advisers
by or on behalf of Warrantors or any of their advisors or by
or on behalf of the Company is true complete and accurate in
all material respects and is not misleading whether because of
any omission or ambiguity or for any other reason.
5.3 To the knowledge, information and belief of the Warrantors
there is no fact or circumstance relating to the affairs of
the Company which has not been disclosed in writing to the
Investor and which, if disclosed, might reasonably be expected
to have materially affected the decision of a reasonable
Investor to enter into this Agreement.]
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5.4 The Financial Projections have been prepared in good faith, or
reasonable and proper bases and after making due and careful
inquiry of the subject matter.
6. Records
6.1 The accounting records of the Company are up to date as at 31
May 1997.
6.2 The Company's records systems and information, and the means
of access to them, are exclusively owned by it and under its
direct control.
7. Debtors
7.1 None of the debts recorded in the books of the Company have
been outstanding for more than three months from its due date
of payment.
7.2 None of the debts of the Company have been the subject of any
factoring by the Company and the Company is not entitled to
the benefit of any debt otherwise than as the original
creditor.
8. Stocks
8.1 The amount of Stocks held by the Company:-
8.1.1 is not abnormally high or low in relation to the
current trading requirements of the Company; and
8.1.2 is adequate for the Company's present requirements.
8.2 The Stocks
8.2.1 are not obsolete or slow moving, except to the extent
it is written off in the Accounts;
8.2.2 are in good condition and fit for its purpose;
8.2.3 insofar as they consist of finished goods and
packaging, comply and will on sale comply with all
representations and warranties, whether express or
implied, including those as to their specification,
conformity with description and fitness for purpose;
8.2.4 insofar as they consist of finished goods, comply and
will on sale comply with all legal and regulatory
requirements, including those of the United Kingdom
and the European Union;
8.2.5 are in the beneficial ownership of the Company free
from any encumbrance;
8.2.6 do not include goods which have been returned by a
customer; and
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8.2.7 do not include goods, or components for goods, which
are not sold in the ordinary course of the Company's
business.
8.3 Since the Accounts Date
8.3.1 the amount of Stocks has not abnormally increased or
decreased;
8.3.2 there have been no price reductions or discounts on
the sale of Stocks; and
8.3.3 Stocks have not been realized at less than they were
reflected in the Accounts and shall make reasonable
provision for all costs and liabilities of the
Company (both actual and contingent).
9 Plant and Computers
9.1 The plant, machinery, tools, vehicles, equipment and furniture
used in connection with the business of the Company:
9.1.1 are in a good and safe state of repair and condition
and satisfactory working order and have been
regularly and properly maintained;
9.1.2 are not surplus to the requirements of the Company's
business;
9.1.3 are capable and will (subject to normal wear and
tear) remain capable throughout the respective
periods of time during which they are each written
down to a nil value (in accordance with the rates of
depreciation adopted in the Accounts)of meeting the
needs for which they were designed or purchased;
9.1.4 are legally and beneficially owned by the Company
free from any Encumbrance;
9.1.5 are not the subject of any agreement for lease, hire,
hire purchase or sale on deferred terms;
9.1.6 are in the possession or under the control of the
Company;
9.1.7 are situated in the United Kingdom; and
9.2 All the computers and computer systems owned by the Company or
used by or on behalf of the Company (including software,
peripherals, communication links and storage media) are in
full operating order and are fulfilling the purposes for which
they were acquired or established in an efficient manner
without material downtime or errors.
10. Intellectual Property
10.1 All Intellectual Property Rights used or required by the
Company in connection with its business are in full force and
effect and are vested in and beneficially owned by it.
10.2 As regards the Intellectual Property Rights owned by the
Company:
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10.2.1 they are in the sole beneficial ownership of the
Company;
10.2.2. each of them is valid and enforceable; and
10.2.3 where registerable, the Company is registered as the
sole proprietor.
10.3 So far as the Warranties are aware the Company has not carried
on and does not carry on its business in such a way as to
infringe any Intellectual Property Rights or moral rights of
any person.
10.4 None of the Intellectual Property Rights owned or licensed by
the Company are being (or are threatened to be) used, claimed,
opposed or attacked by any person or are subject to any claim
or potential claim for compensation pursuant to sections 40
and 41 of the Patents ▇▇▇ ▇▇▇▇ or otherwise.
10.5 No right or license has been granted (or agreement to grant
right or license made) under which any person is or will be
permitted to use in any manner or do anything which would or
might otherwise infringe any of the Intellectual Property,
Rights owned by the Company.
10.6 All Licenses and other agreements relating to Intellectual
Property Rights to which the Company is a party are valid,
subsisting and enforceable in accordance with their terms and
the Company is not in breach of any of their if provisions.
10.7 The Company is not aware of any, nor to the information,
knowledge and belief of any of the Warrantors is there any
breach of any of the agreements referred to at paragraph 10.6
by any of the other parties thereto.
11. Property
11.1 The Property comprises all the properties owned, occupied or
otherwise used by the Company and the particulars of the
Property shown in Schedule 6 are true, complete and accurate
in all material respects.
11.2 The Company is the legal and beneficial owner of the Property
and the Company has a good and marketable title to the
Property to the estate and interest stated in Schedule 6 and
has vacant possession of the Property.
11.3 There is not and, for so long as the Company has had an
interest in the Property has not been in relation to the
Property in force any policy relating to defective title or
restrictive covenant indemnity and to the knowledge,
information and belief of the Warrantors no such policy has
been in force prior to the Company having had an interest in
the Property.
11.4 The Property and its deeds are free from any mortgage,
debenture, charge, rent-charge, lien or other encumbrance
securing the repayment of monies or other obligation or
liability of any person.
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11.5 The Property is not subject to any outgoings other than
uniform business rates, water rates and insurance premiums and
(where appropriate,) rent and service charges.
11.6 The rateable value of the Property and any relevant phasing
provisions with regard to any increase or decrease in the
rateable value are contained in the Disclosure Letter.
11.7 there are no current proposals for any increase in the
rateable value of the Property and no appeal has been lodged
or is pending in respect of the rateable value.
11.8 The Property is not affected by:
11.8.1 any covenants, reservations, conditions, exceptions,
stipulations, casements, profits a prendre,
wayleaves, licenses, franchises, grants,
restrictions, overriding interests, rights of common
or other rights vested in third parties or any
contract to create or claim made by any person to be
entitled to any of the foregoing; and
11.8.2 any matter which is of an onerous or unusual nature
or which conflicts with the present use of the
Property or which would otherwise restrict their
continued possession and enjoyment or which affects
their value.
11.9 There, is not any outstanding breach or alleged breach of any
such matter referred to in paragraph 11.8.1.
11.10 There is not, nor has there been within the 3 years prior to
the date of this Agreement any dispute or complaint whether
actual or threatened with any neighbor, tenant, landlord or
other person relating to the extent, use, enjoyment or
occupation of the Property or with respect to boundary walls
and fences or any means of access to the Property or with
regard to any actual or alleged agreement, or other matter
described in paragraph 11.8.1 affecting or relating to the
Property.
11.11 The Property is not subject to any option, right of preemption
whether exercisable by the Warrantors, the Company, a tenant
of the Property or otherwise and the Property is not subject
to any contract to dispose of any interest therein which has
not been completed.
11.12 The use of the Property for the purposes stated in Schedule 6
corresponds to the use to which it is in fact put or (where
the Property is not presently in use) to the use to which it
was last in fact put.
11.13 The Company is not in breach of any planning permissions in
respect of the use of Property.
11.14 Compliance is being made and has at all times been made in all
respects with planning permissions, orders, and regulations
issued under the Planning Acts and building regulation
consents and by-laws for the time being in force with respect
to the Property.
11.15 All development charges, monetary claims and liabilities under
the Planning Acts or other such legislation have been
discharged and no such liability contingent or otherwise is
outstanding.
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38
11.16 All necessary Industrial Development Certificates have been
obtained with respect to the Property.
11.17 There are no agreements under Section 52 Town and Country
▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ or Section 106 Town and Country Planning ▇▇▇
▇▇▇▇, affecting the Property.
11.18 There are no agreements made under section ▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇, section 18 Public Health ▇▇▇ ▇▇▇▇ or section ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ with respect to the Property.
11.19 Compliance has been made with all applicable statutory and
by-law requirements with respect to the Property including
without limitation with the requirements as to fire
precautions, under Public Health Acts 1936-1961, Control of
Pollution ▇▇▇ ▇▇▇▇, regulations made under the Health and
Safety at Work etc ▇▇▇ ▇▇▇▇, the Highways ▇▇▇ ▇▇▇▇, the
▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ and the Water Industry ▇▇▇ ▇▇▇▇.
11.20 There is no outstanding and unobserved or unperformed
obligation with respect to the Property necessary to comply
with the requirements (whether formal or informal of any
competent body exercising statutory or delegated powers.
11.21 The Property is not affected by any requirement relating to it
or its use which although not registered in the Register of
Local Land Charges is capable of registration in that
Register.
11.22 There are not in force or required to be in force any
licenses, whether under the Licensing ▇▇▇ ▇▇▇▇ or otherwise,
which apply to the Property.
11.23 There are no compulsory purchase notices, orders or
resolutions affecting the Property nor are there any
circumstances likely to lead to any being made.
11.24 There are no closing, demolition or clearance orders,
enforcement notices or stop notices affecting the Property nor
are there any circumstances likely to lead to any being made.
11.25 The Property is not:
11.25.1 listed as being of special historic or
architectural importance or located in an area
which is designated as a Conservation Area under
section 69 Planning (Listing Buildings and
Conservation Areas) ▇▇▇ ▇▇▇▇;
11.25.2 located in an area or subject to circumstances
rendering it particularly susceptible to
flooding;
11.25.3 located in an area affected by mining, clay
working, brine pumping subsidence or limestone
mining subsidence;
11.25.4 located in an area affected by underground
railways and is not bounded by overground
railways; and
11.25.5 bounded or crossed by any river, stream, canal or
drain.
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39
11.26 There are appurtenant to the Property all rights and easements
necessary for their present use and enjoyment and in
particular:
11.26.1 every means of access to the Property is obtained
directly from roads which have been taken over by
the local or other highway authority and which
are maintainable at the public expense and no
means of access to any of the Property is shared
with any other party nor subject to restriction
nor to rights of determination by any other
party; and
11.26.2 the Property is served by water, drainage,
electricity and gas services all of which are
connected to the mains by media located entirely
on or under the Property the passage and
provision of such services is uninterrupted and
there is no likely interruption of such passage
or provision.
11.27 The Property is in good and substantial condition and is fit
for the purposes for which it is presently used and no
building or structure on the front has at any time been
affected by structural damage or electrical defects or by
timber infestation or disease and in particular but without
limitation the Company has not incurred any liability for
dilapidations in respect of any of the Property which is
leasehold.
11.28 So far as the Warrantors are aware the Property is insured at
normal premium rates in its full reinstatement value and
against third party and public liabilities to an adequate
extent, no additional premiums are payable or anticipated and
there are no unusual exclusions, excesses or conditions imposed
upon such policies.
11.29 So far as the Warrantors are aware all premiums payable in
respect of insurance policies relating to the Property which
have become due have been duly paid and no circumstances have
arisen which would vitiate or permit the insurers to avoid
such policies or alter the terms on which such policies are
issued or to increase the premiums payable and there are no
interests noted on such policies.
11.30 There are no leases, tenancies or other rights of occupation
in respect of the Property whether granted by or to the
Company and any contract to grant the same except as disclosed
in Schedule 6.
11.31 In respect of such leases, tenancies or other rights of
occupation as referred to in paragraph 11.30:
11.31.1 all rents, insurance premiums, service charges
and other amounts payable by or (as the case may
be) receivable by the Company are fully paid up
to date;
11.31.2 there is no provision requiring the lessee to
trade or continue to trade or carry on its
business at the Property;
11.31.3 there are no unusual or onerous restrictions,
covenants or other provisions;
11.31.4 there is no breach or alleged breach of any
covenant or other provision nor any exercise of
any right of restraint, forfeiture or entry
whether by any of the Warrantors the Company or
any other party;
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40
11.31.5 no obligation necessary to comply with any notice
or other requirements given by the landlord
under any leases of the Property is outstanding
and unobserved or unperformed:
11.31.6 the provisions of section 24-28 Landlord and
▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ are not excluded and there is no
other Order trader section 38(4) of that Act
relating to the Property;
11.31.7 the provisions for any review or variation of
rent are on commercial terms acceptable to the
Company as landlord or as tenant (as the case may
be) and no unusual arguments or claims have been
raised on any review of rent pursuant to the
provisions of any lease; and
11.31.8 there are no rent reviews under any of the leases
or tenancies in progress.
11.32 The Company has not at completion any actual, contingent or
future ascertained or unascertained liability to any person
firm or company in respect of or relating to any lease and/or
license of any of the Property.
11.33 The Company has not at any time assigned or otherwise disposed
of any property comprised in a lease which is not a New
Tenancy for the purposes of the Landlord and Tenant
(Covenants) ▇▇▇ ▇▇▇▇.
11.34 The Company is not a guarantor under the terms of an
Authorized Guarantee Agreement entered into pursuant to the
Landlord and Tenant (Covenants) ▇▇▇ ▇▇▇▇.
11.35 Since 1st January 1996 whenever the Company has assigned or
otherwise disposed of any reversionary interest in a leasehold
property a release from the landlord covenants has been
obtained from the tenant or tenants pursuant to the Landlord
and Tenant (Covenants) ▇▇▇ ▇▇▇▇.
12. Employees
12.1 The Company has no employees (other than the Managers or the 4
consultants/salesmen whose remuneration does not exceed
L.40,000 per annum each) who do or may be entitled to earn in
excess of L.20,000 per annum and the total number of employees
is 11.
12.2 No amounts are owing to any present or former officers or
employees of the Company except for salary which has accrued
in respect of the calendar month in which this Agreement is
executed or for business expenses incurred during the same
month.
12.3 There are no agreements or other arrangements (whether or not
legally binding) between the Company and any trade union or
other body representing employees and the Company has not
entered into any recognition agreement with a trade union nor
has it done any act which might be construed as such.
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12.4 There is no agreement or understanding (contractual or
otherwise) (in the case of employees other than the Manager of
a material nature) between the Company and any employee or
ex-employee with respect to:
12.4.1 his or her employment;
12.4.2 ceasing to be employed; or
12.4.3 retirement
which is not included in the written terms of the employee's
employment or previous employment (as the case may be).
12.5 During the period to which the Accounts relate and since the
Accounts Date, no material change (here meaning less than
L.1,000 in value) has been made in the terms of employment of
any employee of any employee or officer of the Company.
12.6 No negotiations for any increase in the emoluments or benefits
of any officer or employee of the Company are current.
12.7 All subsisting contracts of Service to which the Company is a
party are terminable by the Company without compensation
(other than under the Employment Protection (Consolidation)
Act 1978) by giving the minimum period of notice specified in
section 49 of that Act.
12.8 The Company is not, and has not within the twelve months
preceding the date of this Agreement been, involved in any
industrial dispute and there are no facts which suggest that
there may be an industrial dispute involving the Company.
12.9 So far as the Warrantors are aware no past or present employee
or officer of the Company has any claim against the Company
for loss 0L. office or arising out of the termination of his
of office or employment (including any redundancy payment) and
so far as the Warrantors are aware, there is no event which
would or might give rise to any such claim.
12.10 No claims have been made in the two years prior to the date of
this Agreement for compensation for alleged injury or illness
caused in the course of employment with the Company are set
out in the Disclosure Letter.
12.11 The Company has not established, nor is intending or
negotiating to establish any share or share option scheme or
arrangement, or profit sharing bonus, commission, or other
incentive scheme for all or any of its employees.
12.12 There is no early retirement scheme applicable to any employee
of the Company.
12.13 The Company has neither introduced nor intends to introduce
any short time working scheme or any redundancy scheme under
which payments greater than those required by statute may be
payable.
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12.14 None of the products or services supplied by the Company are
produced or provided by outworkers.
12.15 The Company has not acquired any undertaking or part of one
such that the Transfer of Undertakings (Protection of
Employment) Regulations 1981 apply, or may apply, thereto.
12.16 The Company has in relation to each of its employees (and, so
far as is relevant, to each of its former employees)?
12.16.1 complied with the requirements of all statutes,
regulations, codes of conduct and collective
agreements;
12.16.2 maintained adequate and suitable records.
13. Pensions
13.1 There are no agreements, arrangements, customs or practices
(whether legally enforceable or not) in operation at the date
of this Agreement for the payment of or contribution towards
any pensions, allowances, lump sums or other like benefits on
retirement or on death or during periods of sickness or
disablement for the benefit of any Insider or employee or
former employee of the Company or for the benefit of the
dependents of any such persons nor has any proposal been
announced to establish any such agreement or arrangement other
than the Disclosed Pension Scheme (which expression means any
such agreement or arrangement referred to in 13.1 as have been
disclosed).
13.2 In relation to each Disclosed Scheme
13.2.1 No discretion or power has been exercised under the
Pension Scheme in respect of employees or director,
former employees or directors, former directors of
the Company to:
(a) augment benefits;
(b) admit to membership a director or employee
who would not otherwise have been eligible
for admission to membership;
(c) provide in respect of a member a benefit
which would not otherwise be provided in
respect of such member; or
(d) pay a contribution into it which would not
otherwise have been paid.
13.2.2 The Disclosed Scheme holds no securities issued
by, properties leased to or occupied by and has
made no loans which are at the date of this
Agreement outstanding to, the Company or any
Insider.
13.2.3 There has been no breach of the trusts of the
Disclosed Scheme and there are no actions,
suits or claims (other than routine claims for
benefits)
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outstanding pending or threatened against the
trustees or administrator of the Disclosed Scheme
or against any of the Warrantors or the Company
or any other employer which participates in the
Disclosed Scheme in respect of any act, event
omission or other matter arising out of or in
connection with the Disclosed Scheme and to the
knowledge, information and belief of the
Warrantors there are no circumstances which may
give rise to any such claim.
13.2.4 All contributions which are payable by the
Company in accordance with the provisions of the
Disclosed Scheme and all contributions due from
its members have been duly made and the Company
has fulfilled all its obligations under it; and
13.2.5 In the case of a Disclosed Scheme which is not a
defined benefit scheme the benefits which are
prospectively and contingently payable under the
provisions of the Disclosed Scheme are solely
such as can be provided by the funds available
for each of its members.
13.2.6 The Disclosed Scheme is not a defined benefit scheme
13.2.7 The Disclosed Scheme has been administered in
accordance with:
(a) the preservation requirements within the
meaning of section ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇;
(b) the equal access requirements within the
meaning of section ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇; and
(c) all relevant provisions of the law of the
European Communities.
14. Material Contracts and Customers
14.1 The Company is not, and has not been since the Accounts Date,
a party to any contract, transaction, or arrangement which:
14.1.1 is of an unusual or abnormal nature, or outside
the ordinary and proper course of business;
14.1.2 is otherwise than by way of bargain at arm's
length;
14.1.3 is of a long-term nature (that is, unlikely to
have been fully performed, in accordance with its
terms, more than six months after the date on
which it was entered into or undertaken);
14.1.4 is considered by the Warrantors to be likely to
result in a loss to the Company;
14.1.5 cannot readily be fulfilled or performed by the
Company on time or without undue or unusual
expenditure of money or effort;
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14.1.6 involves payment by or to the Company by
reference to fluctuations in the index of retail
prices, or any other index, or in the rate of
exchange for currency;
14.1.7 provides for payment to or by the Company in any
currency other than Sterling;
14.1.8 is a forward contract or option for the sale or
purchase of any commodity or currency;
14.1.9 (other than maintenance contracts or the
maintenance element of supply contracts) involves
or is likely to involve an aggregate
consideration payable by the Company in excess of
L.10,000 or involves the supply of goods and
services by the Company with a net sales value in
excess of L.50,000;
14.1.10 restricts its freedom to engage in any activity
or business or confines its activity or business
to a particular place;
14.1.11 is a guarantee or contract of indemnity by virtue
of which it is trader any actual or contingent
liability;
14.1.12 by reason of any provision of this Agreement,
gives any other contracting party the right to
terminate or vary the contract or create or
increase any obligation or liability of the
Company;
14.1.13 means that the Company is, or has agreed to
become, a member of any joint venture, consortium
or partnership or other unincorporated
association;
14.1.14 involves the Company in any actual or contingent
liability in respect of property which it has
previously occupied or in which it had an
interest including without limitation in respect
of any leasehold land assigned or disposed of by
it; or
14.2 The Company is not party to any contract where:
14.2.1 notice of termination has been given or received
by the Company or which the Company has reason to
believe may be terminated (or not renewed on any
renewal date or the expiry of a fixed term) by
any other party to it; and
14.2.2 the liability or prospective liability of the
Company is guaranteed by any person.
14.3 No offer, quote or tender given or made, by the Company on or
before the date of this Agreement is capable of giving rise to
a contract by the unilateral act of a third party.
14.4 In the period of twelve months prior to the date of this
Agreement, no substantial customer of the Company:
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14.4.1 has ceased to trade with the Company;
14.4.2 has materially reduced the amount of business
which it carries on with the Company; or
14.4.3 has materially changed the terms on which it
carries on business with the Company,
and no indication has been received by the Company or the
Warrantors that there will or may be any such cessation,
reduction or change.
15. Insurance
15.1 The policies of insurance which are maintained by the Company
afford the Company adequate cover against such risks as
companies carrying on the same type of business as the Company
commonly cover by insurance and, in particular, insure the
assets of the Company against fire in their full replacement
value. The Company is and has at all material times been
adequately covered against employer's liability, public
liability and professional indemnity liability.
15.2 The Company is now, and has at all material times been,
adequately covered against accident, damage, injury, third
party loss (including product liability), loss of profits and
other risks normally covered by insurance and has at all times
effected such insurances as are required by law.
15.3 All premiums due in relation to the Company's insurances have
been paid and there are no circumstances of which the
Warrantors are aware which might lead to any liability under
such insurance being avoided by the insurers or the premiums
being increased.
15.4 There is no claim outstanding under any policy of insurance
nor to the knowledge, information and belief of any of the
Warrantors are there circumstances likely to give rise to a
claim.
16. Finance and Working Capital
16.1 The total amount borrowed by the Company from its bankers does
not exceed its facilities and the total amount borrowed by the
Company from whatsoever source does not exceed any limitation
on its borrowing contained in its articles of association, or
in any debenture or loan stock, trust deed or other document.
16.2 Full and accurate details of all overdrafts, loans or other
financial facilities outstanding or available to the Company
are set out in the Disclosure Letter. Nothing has been done so
far as the Warrantors are aware whereby the continuance of any
such facilities in full force and effect might be affected or
prejudiced.
16.3 The Disclosure Letter contains a statement of all the bank
accounts of the Company and of the credit or debit balances on
such accounts at the date stated in the Disclosure Letter.
Since that date there have been no payments out of any such
accounts except for
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routine payments and the balances on current account are not
now substantially different from the balances shown on such
statement.
16.4 No circumstances have arisen which could, with the giving of
notice or lapse of time or both, entitle a provider of finance
to the Company (other than on a normal overdraft facility) to
call in the whole or any part of the monies advanced or to
alter the terms of a facility or to enforce a security and no
provider of finance to the Company on overdraft facility has
demanded repayment or indicated that the existing facility
will be withdrawn or reduced or not renewed or that any terms
thereof will be altered to the disadvantage of the Company.
16.5 The Company has not engaged in any borrowing or financing
transaction or arrangement which does not appear as borrowings
in its statutory accounts.
16.6 No grants, subsidies and allowances have been applied for or
received by the Company from any government, authority, body
or agency (whether supra national, national, regional or
local) which may at any time be repaid or repayable.
17. Company Law and Authorities
17.1 The register of members and the other statutory books of the
Company are up to date, have been properly kept and contain an
accurate and complete record of the matters with which they
should deal and no notice that any of them is incorrect or
should be rectified has been received.
17.2 All such resolutions, returns and other documents required to
be delivered to the Registrar of Companies have been duly
delivered and are true and accurate and no such resolutions,
returns or other documents have been filed in the period of 14
days prior to the date of this Agreement.
17.3 None of the activities of the Company is ultra rites the
Company.
17.4 No person is or has been a shadow director, as defined by the
Companies Act, of the Company for any period who has not for
all purposes been a director throughout the same period.
17.5 No power of attorney given by the Company is in force.
18 Insolvency, etc.
18.1 No order has been made or petition presented or resolution
passed for the winding up of the Company or for an
administration order in respect of the Company.
18.2 No administrative receiver and/or manager has been appointed
to the Company's business or assets or any part thereof.
18.3 No distress, execution or other process which remains
undischarged has been levied on the assets of the Company.
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18.4 The Company has not stopped payment to its creditors and is
not insolvent within the meaning of section 123 of the
Insolvency ▇▇▇ ▇▇▇▇ and the Company has not received a written
demand in accordance with section 123(1)(a) of the Insolvency
▇▇▇ ▇▇▇▇.
18.5 No voluntary arrangement has been approved under Part l of the
Insolvency ▇▇▇ ▇▇▇▇ and no compromise or arrangement has been
sanctioned under section 425 of the Companies Act in respect
of the Company.
18.6 No disqualification order has at any time been made pursuant
to the provisions of the Company Directors Disqualification
Act 1986 against any officer of the Company or any person who
is not such an officer who takes part in the management of the
Company.
18.7 The Company has not been a party to any transaction at an
undervalue for the purpose of section 238 of the Insolvency
▇▇▇ ▇▇▇▇ nor has it given or received any preference for the
purposes of section 239 of the Insolvency ▇▇▇ ▇▇▇▇, in either
case within a period of 2 years ending on the date of this
Agreement.
18.8 There are no facts known to any of the Warrantors which could
give rise to any of the events or circumstances referred to in
paragraphs 18.1 to 18.7.
19. Legal Compliance
19.1 Neither the Company, nor any of its officers, agents or
employees (during the course of their duties in relation to
the Company) have committed, or omitted to do, any act or
thing the commission or omission of which is, or could be, in
contravention of any act, order, regulation or the like in the
United Kingdom or elsewhere.
19.2 Without limiting the generality of the foregoing, the Company
has not done or omitted to do any act or thing in
contravention of the provisions of the Restrictive Trade
Practices Acts 1976 and 1977, the Fair Trading ▇▇▇ ▇▇▇▇, the
Competition ▇▇▇ ▇▇▇▇, Articles 85 and 86 of the Treaty of
Rome, the Resale Prices ▇▇▇ ▇▇▇▇, the Trade Descriptions ▇▇▇
▇▇▇▇, the Consumer Credit ▇▇▇ ▇▇▇▇, the Consumer Protection
▇▇▇ ▇▇▇▇, the Companies Act, the Financial Services ▇▇▇ ▇▇▇▇,
the Banking ▇▇▇ ▇▇▇▇ and the Food Safety ▇▇▇ ▇▇▇▇ and all
statutory, municipal and other like requirements (including
orders and regulations affecting businesses carried on in
member states of the European Union) applicable to the
business of the Company have been complied with.
20. Licenses
20.1 The Company has all licenses and consents required for the
carrying on of its business and is not in breach of the terms
or conditions of such licenses and consents and so far as the
Warrantors are aware, there are no pending or threatened
proceedings which might in any way affect such licenses and
consents. To the knowledge, information and belief of the
Warrantors there is no reason why any of them should be
suspended, threatened or revoked or be invalid.
20.2 There has not been within the six years prior to the date of
this Agreement and there is not pending or in existence any
investigation or inquiry by, or on behalf of any governmental
or other body into the affairs of the Company.
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21. Default
21.1 The Company has not manufactured, sold or supplied or agreed
to manufacture sell or supply any products and/or services
which were, or will be, in any respect faulty, defective or
dangerous, or which did not or will not comply in any respect
with any warranties or representations, expressly or impliedly
made by it, or with customers' specifications or with all
applicable statutes, regulations, orders or standards.
22. Litigation
22.1 Neither the Company nor any person for whose acts or defaults
in the matter it may be contractually or vicariously liable is
involved in any civil criminal or arbitration proceeding and
to the knowledge, information and belief of the Warrantors no
such proceeding is pending or threatened against the Company
or any such person and there are no facts likely to give rise
to such proceeding.
22.2 There is no unsatisfied judgment or unfulfilled order
outstanding against the Company and the Company is not party
to any undertaking or assurance given to a court, tribunal or
any other person in connection with the determination or
settlement of any claim or proceedings.
22.3 The Company is not in breach of any contract to which it is a
party, and so far as the Warrantor are aware, no other party
to any such contract is in breach of it. All agreements,
rights, commitments, obligations, arrangements and
understandings to which the Company is a party are valid and
enforceable. To the knowledge, information and belief of the
Warrantors there are no grounds for the termination,
rescission, avoidance or repudiation of any contract by the,
Company or any other party to any such contract.
23. Events Since the Accounts Date
Since the Accounts Date:
23.1 the business of the Company has been carried on in the
ordinary and usual course and in the same manner, including
nature and scope, as in the financial year ended on the
Accounts Date;
23.2 there has been no material adverse change in the financial or
trading position or prospects of the Company including,
without limitation, any decrease in turnover (whether by value
or by volume) or in the gross or net profits margins, or in
liabilities (actual or contingent) or expenses (direct or
indirect) of the Company; 23.3 there has been no material
reduction (which for this purpose means L.5,000) in the value
of the net assets of the Company determined in accordance with
the same accounting policies as those applied in the Accounts
(on the basis that each of the assets of the Company is valued
at a figure no greater than the value attributed to it in the
Accounts or, in the case of any of the said assets acquired by
the Company after the Accounts Date, at a figure no greater
than cost);
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23.4 the business has not been adversely affected by the loss of
any contract or customer or source or supply or by any other
factor not affecting similar businesses to a like extent;
23.5 the Company has not acquired, or agreed to acquire, any
tangible asset, single Intellectual Property Right or
investment having a value in excess of L.10:000 or intangible
assets (excluding Stocks), Intellectual Property Rights, or
investments having an aggregate value in excess of L.10,000;
23.6 the Company has not disposed of, or agreed to dispose of, any
tangible asset (excluding Stocks), any single Intellectual
Property Right or investment either having a value reflected
in the Accounts in excess of L.10,000 or acquired since the
Accounts Date;
23.7 the Company has not borrowed any money or raised any money in
the nature of borrowings save in accordance with its overdraft
facilities.
23.8 no distributions within the meaning of section 209 ICTA have
been declared paid or made save as provided for in the
Accounts;
23.9 no debtor has been released by the Company on terms that the
debtor pays less than the face value of the debt, no debt has
been subordinated, written down or written off, provided
against (in whole or in part), factored or assigned, the
Company has not agreed to do any of the foregoing and no debt
in excess of L.5000 has proved to be irrecoverable;
23.10 no provision or reserve included in the Accounts has proved to
be inadequate in the light of subsequent circumstances and
there are no circumstances which indicate that any such
provision or reserve may prove to be inadequate;
23.11 the Company has not changed its accounting reference date; and
23.12 other than payments of salary and benefits to directors and
employees of the Company no payment has been made by the
Company to, or benefit conferred (directly or indirectly) on,
any of the Warrantors or any Insider, save as specified in the
Disclosure Letter.
24. Effects of this Agreement
24.1 To the knowledge, information and belief of the Warrantors
(but without having made, any inquiry of such persons) the
investment by the investor will not affect the Company's
relationship with its suppliers and customers.
24.2 Neither the customers nor the suppliers of the Company have
been informed as to the proposed investment by the Investor in
the Company.
25. Taxation
Returns, deductions disputes
25.1 The Company has paid all Taxation which it has become liable
to pay and is under no liability to pay any penalty, interest,
surcharge or fine in connection with any Taxation.
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25.2 The Company has within any applicable time limits made all
such returns, carried out all necessary registrations,
provided all information requested by any Taxation Authority
by means of full and accurate disclosure of all facts and
material circumstances and maintained all such records in
relation to Taxation as are required to be made or provided or
maintained by the Company.
25.3 The Company has property operated any and all systems of
deduction of Taxation on remuneration which it has given or
has been treated as having given to its employees and payment
of National Insurance contributions and social security
contributions and has complied with all its reporting
obligations to all taxation or other appropriate authorities
in all jurisdictions and in connection with the benefits
provided for existing or former officers employees and
directors of the Company.
25.4 The Company is not involved in any dispute in relation to
Taxation and there are no circumstances likely to give rise to
such dispute.
25.5 No Taxation Authority has investigated the Company or given
notification that it intends to commence investigation and
there are no circumstances likely to give rise to an
investigation.
25.6 The Company has made all deductions in respect of or on
account or any Taxation from any payments made by it
which it is obliged to make and has accounted in full (where
payment has already become due) to the relevant Taxation
Authority for all amounts so deducted.
Base Values, Capital Gains
25.7 The Company has sufficient records relating to past events to
calculate the liability to Taxation or relief which would
arise on any disposal or on the realization of any asset owned
at the Accounts Date or acquired since that date but before
Completion.
25.8 The value attributed to each asset of the Company in, or for
the purposes of the Accounts as at the Accounts Date is
such that on any disposal thereof for a consideration equal to
such value (and disregarding any right to claim any allowance
or relied no liability to Taxation in respect of any gain
(including any gain deemed to arise for taxation purposes)
will arise.
25.9 No liability to Taxation will arise on the disposal by the
Company of any asset acquired since the Accounts Date for a
consideration equal to the consideration actually given for
the acquisition.
25.10 The Company has not made a claim under Sections 152-158,
175,247 TCGA.
Stamp Duty
25.11 All stamp registration and transfer taxes and other similar
types of duty and levy which are due or which by virtue of
acts of the Company prior to the date hereof may become
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due from the Company or which are required to be paid on
documents which give the Company rights have been duly paid.
25.12 In any case where any documents which give the Company rights
are required to be stamped the documents concerned have been
duly stamped.
Group Transactions
25.13 The Disclosure Letter contains full details of all claims for
group or consortium relief or under Part X Ch IV ICTA for the
six years preceding the Accounts Date where the Company was
either "the surrendering company" or the "claimant company,"
as these terms are defined in Section 402 ICTA, and the
Company is not liable to make any payment for any such relief
surrendered or otherwise made available to it.
25.14 Since the Accounts Date the Company has not made or agreed or
arranged to make a surrender of or a claim for group or
consortium relief and has not made or received and is not
liable to make or entitled to receive a payment for group
relief.
25.15 The Company has not at any time:
25.15.1 acquired any asset from any company which at the
time of the acquisition was a member of the same
group of companies as defined in Section 170
TCGA;
25.15.2 acquired an asset as trading stock from a member
of the same group where the asset did not form
part of the trading stock of any trade carried on
by the other member, as mentioned in Section
173(1) TCGA, or disposed of an asset which formed
part of the trading stock of any trade carried on
by the Company to another member of the same
group which acquired the asset otherwise than as
trading stock of a trade carried on by the other
member, as mentioned in Section 173(2) TCGA;
25.15.3 been, and is not liable to be, assessed or
charged to corporation tax by virtue of the
provisions of Section 190 TCGA and is not
entitled to recover or liable to have recovered
from it any sums paid pursuant to that section
under the provisions of subsection (3) of that
section;
25.15.4 ceased to be a member of a group of companies in
such circumstances that a profit or gain was
deemed to accrue to the Company by virtue of
Section 178 or 179 TCGA and neither the execution
of this Agreement nor Completion, will result in
any profit or gain being deemed to accrue to the
Company for any Taxation purpose whether pursuant
to Section 178 or 179 TCGA or otherwise.
Taxation Liabilities and Reliefs
25.16 Other than as provided for or noted in the Accounts no event
transaction act or omission has occurred which could result in
the Company becoming liable to pay or to bear or to make
reimbursement or indemnity in respect of any Taxation which is
primarily or
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52
directly chargeable against or attributable to any person firm
or company other than the Company.
25.17 The Company has not been party to any transaction or
arrangement which could give rise to a liability to Taxation
where the consideration received or given by the Company was
or, in respect of any transaction or arrangement entered into
before the date of this Agreement, will be greater or less
than that which would have been received or given if the
transaction had been carried out on an arm's length basis.
25.18 The Company is not liable to Taxation (and has not been and
will not be denied any relief) by reason of any interest or
other payment by the Company being treated by any Taxation
Authority as a distribution or other such similar payment.
25.19 The Disclosure Letter contains full details of all claims for
the set-off of the Company's advance corporation tax ("ACT")
against the Company's liability to corporation tax made within
the last six years and the Company is not liable to make any
payment for ACT surrendered or otherwise made available to it.
25.20 The Company has not:
25.20.1 been a party to, involved in, or connected with
any exchange of securities whether or not (by
virtue of section 13 5 TCGA) Section 127 TCGA
applied to the exchange;
25.20.2 carried out or been involved in or connected with
any reorganization or scheme of reconstruction or
amalgamation whether or not (by virtue of Section
126 or 136 TCGA Section 127 TCGA applied to such
reorganization or scheme of reconstruction or
amalgamation;
25.20.3 carried out or been involved in or connected with
any scheme of reconstruction or amalgamation
involving a transfer of business assets whether
or not Section 139 TCGA applied to the transfer;
25.20.4 made or received any exempt distribution within
the meaning of Section 213 ICTA and has at no
time been a relevant company in relation to an
exempt distribution for the purposes of that
Section or concerned in an exempt distribution
for the purposes of Section 214 ICTA; or
25.20.5 made a purchase of its own shares to which
Section 219(1) applies.
Value Added Tax
25.21 The Company is registered for the purposes of value added tax
and has not been required by the Commissioners of Customs &
Excise to give security under paragraph 4 (Power to require
security and production of evidence) of Schedule 11
(Administration collection and enforcement)VATA..
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25.22 The Company has not at any time been treated as a member of
any group of companies for the purposes of Section 43 (Group
Companies) VATA and has not applied for treatment as such a
member.
25.23 The Company has not within three years ending on the Accounts
Date been in default in respect of any accounting period as
the terms "default" and "accounting period" are used in
sub-section (1) of Section 19 (the default surcharge) Finance
▇▇▇ ▇▇▇▇.
25.24 Full details of any claim for bad debt relief under Section 11
(Refund of tax in cases of bad debts) Finance ▇▇▇ ▇▇▇▇ made by
the Company are set out or annexed to the Disclosure Letter.
25.25 The Company is not and has not agreed to become an agent,
manager or factor for the purposes of Section 34 VATA of any
person who is not resident in the United Kingdom.
25.26 The Company has not incurred any liability in respect of value
added tax (whether to H.M. Customs and Excise or to any other
person) by reason of the provisions of paragraph 2(1) Schedule
10 VATA and there are no circumstances whereby the Company
could become so liable as a result of a person making an
election under that paragraph.
25.27 Neither the Company nor any relevant associate (within the
meaning of paragraph 3(7) Schedule 10 VATA) has made any
election under paragraph 2(1) Schedule 10 VATA in respect of
any land in, over or in respect of which the, Company has any
interest, right or license to occupy and the Company is not
aware of any intention to make such an election.
Gifts
25.28 There is no unsatisfied liability to capital transfer tax or
inheritance tax attached or attributable to the assets of the
Company or the shares of the Company and neither the assets
nor the shares are subject to any inland Revenue charge as
mentioned in Section 237 Inheritance Tax ▇▇▇ ▇▇▇▇.
25.29 No person has the power under Section 212 Inheritance Tax Act
1984 to raise any capital transfer tax or inheritance tax by
the sale or mortgage of or by a terminable charge on any of
the Company's assets terminable charge on any of the Company's
assets.
Capital Allowances
25.30 There are set out in the Disclosure Letter details of all
capital allowances claimed in respect of the accounting period
of the Company ended on the Accounts Date in respect of each
asset or pool of assets for which separate computations of
capital allowances are required to be made or, as a result of
any election, are made.
25.31 The book value of each of the assets or pool of assets of the
Company in or adopted for the purpose of the Accounts does not
exceed the written down value of such asset or pool of assets
for the purposes of CAA 1990.
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25.32 No balancing charge pursuant to CAA 1990 (or other legislation
relating to any capital allowances) will be made on the
Company on any disposal of any or all such assets for a
consideration equal to or less than the value of such asset or
assets in the Accounts.
25.33 The Company has not incurred any expenditure on the provision
of any capital allowance bearing asset for leasing.
25.34 The Company has not made any election under Section 37 CAA
1990 nor is it taken to have made any such election under
Section 37(8)(c) CAA 1990.
25.35 No transaction has been entered into by virtue of which
Sections 75 or 157 CAA 1990 are applicable.
25.36 None of the assets for which a capital allowance has been or
is capable of being made to the Company has been disposed of
or ceased to be used for the purpose of its trade since the
Accounts Date.
25.37 None of the assets, expenditure on which has qualified for a
capital allowance under the CAA 1990 Part I (industrial
buildings), has at any time since such expenditure was
incurred been used otherwise than as an industrial building or
structure as defined in Section 18 CAA 1990.
General
25.38 The Company has not since the Accounts Date entered into or
been a party to any transaction which will or may give rise to
a liability to Taxation other than any Taxation arising in the
ordinary, course of business;
25.39 The Company is not under any obligation to make any payment of
interest or other similar type of payment which will not be
wholly allowable as a deduction in computing its taxable
profits in the accounting period (or other relevant period) in
which such amount is treated as an expense in the accounts of
the Company or (if earlier) in which such amount is paid.
25.40 The Company is not liable and has not been liable to Taxation
in any jurisdiction other than the United Kingdom.
25.41 The Company is and at all times has been resident in the
United Kingdom for the purposes of Taxation and has not been
resident outside the United Kingdom for any double Taxation
arrangements.
25.42 The Company has not made any repayment of share capital or
issued any share capital as paid up otherwise, than by the
receipt of new consideration,
25.43 The Company has no outstanding liability for any form of
Taxation in respect of any salary, remuneration, benefits or
expenses paid to any of the Managers prior to Completion.
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SCHEDULE 4
FORM OF RESIGNATION OF DIRECTOR/SECRETARY
To: The Directors
[NAME] Limited
Dear Sirs:
[ ] Limited ("the Company")
I hereby resign from my office as Director/the Secretary of the
Company and acknowledge that I have no claim whatsoever against the Company in
respect of loss of office, redundancy or unfair dismissal and that I have no
other claim or right of action against the Company whatsoever.
SIGNED BY [NAME]
AS A DEED
in the presence of:
Witness's Signature:
Name:
Address:
Occupation:
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SCHEDULE 5
SUPPLEMENTAL DEED
This SUPPLEMENTAL DEED is made the ____________, 19___ between:
1. ________________________ of _________________________________
(the "Transferee"); and
2. Timeline Europe Limited (Company Number: ________) whose
registered office is at __________________________________________ (the
"Company"); and
3. All the parties to the Subscription Agreement (as hereinafter
defined) including any person who has entered into a Supplemental Deed pursuant
to the Subscription Agreement.
BACKGROUND
A. Under the terms of an agreement dated ______________, 1997
(the "Subscription Agreement") and entered into between the Managers (as
defined therein) (1) Timeline Inc., (2) the Investor (as defined therein), and
(3) the Company, (4) [and to which ___________________ of
_________________________ is a party by virtue of a Supplemental Deed dated
___________ [NAME OF TRANSFEROR]] (the "Transferor") has sold and transferred
to the Transferee [insert number and type of shares] subject to the Transferee
entering into this Supplemental Deed.
B. The Transferee wishes to accept such shares subject to such
condition and to enter into this Supplemental Deed pursuant to the Subscription
Agreement.
IT IS AGREED as follows:
1. Expressions defined in the Subscription Agreement shall
(unless the context otherwise requires) have the same meaning when used in this
Supplemental Deed.
2. The Transferee hereby undertakes to and covenants with all the
parties hereto and to the Subscription Agreement (including any person who has
entered into a Supplemental Deed pursuant to the Subscription Agreement) to
comply with the provisions of and to perform all the obligations in the
Subscription Agreement so far as they may remain to be observed and performed
as if the Transferee had been a party to the Subscription Agreement [as a
Manager] [as T.I.] [as an Investor] in place of the Transferor. Subject to
Clause 3, the Transferor shall be released from the provisions of the
Subscription Agreement, which shall be construed and shall apply accordingly.
3. Nothing herein contained shall as between the Transferor and
the Investor amount to a waiver of nor in any way affect the rights of the
Investor arising from any breach prior to the date hereof any of the
Transferor's obligations under the Subscription Agreement or from any breach of
the Warranties.
4. The Transferee shall have no liability for any costs, claims,
damages or liabilities arising from the Subscription Agreement by reason of an
act or omission prior to the date hereof.
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5. The Transferee, for the avoidance of doubt, is hereby
acknowledged not to be represented in the terms of the Warranties.
This document is executed as a deed and is delivered on the date
stated at the beginning of this deed.
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SCHEDULE 6
PROPERTIES
Description Use Tenure/Class of Title
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ Offices License terminable on 6 months
▇▇▇▇▇▇ ▇▇ ▇▇▇ notice.
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SCHEDULE 7
1. No claim shall be made against the Warrantors or any of them in
respect of a breach of a warranty or representation other than those
contained in this Agreement and the documents contemplated by or
relating to this Agreement and the investor confirms that she has not
relied on any representation or warranty or undertaking of any person
which is not contained in this Agreement or the documents contemplated
by or relating to this Agreement.
2. The Warrantors shall not be liable, under the Warranties to the extent
that any breach thereof or liability thereunder occurs or arises as a
result of or is otherwise attributable to any legislation not in force
at the date hereof or any change in law or Governmental practice which
takes effect retroactively or occurs as a result of any increase in
the rates of taxation in force at the date hereof or occurs as a
result of or is otherwise attributable to the Company or any Group
Company after Completion disclaiming any part of the benefit of
capital allowances against taxation claimed or proposed to be claimed
on or before the date hereof.
3 The Investor shall not be entitled to claim that any Fact or matter or
circumstance constitutes a misrepresentation or breach of any of the
Warranties to the extent that such fact, matter or circumstance:
(a) has been specifically disclosed in the Accounts or;
(b) would be disclosed by a search against the Company or any
Group Company at the Companies Registry as at the date hereof
4. liability shall attach to the Warrantors in respect of a
misrepresentation or breach of any of the Warranties to the extent
that:
(a) specific provision or specific reserve in respect thereof has
been made in ale Accounts; or
(b) the amount of such liability is covered by a policy of
insurance effected by the Company or Group Company which is
validly in force at Completion.
5. A breach of any Warranty which is remediable shall not entitle the
Investor to compensation if the breach is remedied in full within 30
days of the Investor notifying the Warrantors of the relevant facts.
6. The Warrantors shall be entitled to require the Investor or the
Company at the expense of the Warrantors to take all such reasonable
steps as the Warrantors may reasonably consider necessary in order to
mitigate any claim for breach of any of the Warranties provided that
the Investor shall not be required to wind up the Company or commence
any litigation and the Investor shall procure (to the extent she is
able) that the Company shall act in accordance with any such
reasonable requirements of the Warrantors subject to the Investor
and/or the Company and/or Group Company being indemnified and secured
by the Warrantors against the Warranty claim and all liabilities,
costs and expenses incurred in connection therewith.
7. If any of the Warrantors pays to the Investor or the Company or a
Group Company an amount in respect of a breach of any of the
Warranties and the Investor or the Company or Group Company
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60
subsequently recovers from a third party a sum which compensates the
Investor or the Company for that breach of Warranty the Investor shall
(where the Warrantor have made payment to the Investor) forthwith
repay or (where the Warrantors have made payment to the Company)
procure so far as she is able the repayment by the Company or Group
Company to the Warrantors in proportion to the amount so paid by them
so much of the amount paid by the Warrantors as does not exceed the
sum recovered from such third party less all costs and expenses
incurred by the Investor and the Company and any Group Company in
obtaining that payment and in recovering that sum from such third
party.
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EXECUTED as a deed by ) /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ )
in the presence of: )
EXECUTED as a deed by ) /s/ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ )
in the presence of: )
EXECUTED as a deed by ) /s/ ▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇ )
in the presence of: )
EXECUTED as a deed by ) /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ )
in the presence of: )
EXECUTED as a deed by ) /s/ ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇-▇▇▇▇▇ )
in the presence of: )
EXECUTED as a deed by ) /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ )
in the presence of: )
EXECUTED as a deed by ) /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ )
in the presence of: )
EXECUTED as a deed by ) /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ )
in the presence of: )
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62
EXECUTED as a deed by ) /s/ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ )
in the presence of: )
EXECUTED as a deed by ) /s/ ▇▇▇▇▇ Ellesmere
▇▇▇▇▇ ELLESMERE )
in the presence of: )
EXECUTED as a deed by ) /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇, Director
TIMELINE EUROPE LIMITED )
acting by ) /s/ ▇▇▇▇ ▇▇▇▇▇▇, Secretary
EXECUTED as a deed by ) /s/ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ )
in the presence of: )
EXECUTED as a deed by ) /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
TIMELINE INC acting by ) President and Chief Executive
its duly authorized attorney ) Officer
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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