EXHIBIT 10.10
Option Agreement, dated April 9, 1996, relating to the purchase of
East West Herbs Limited, Re: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and Others (defined
therein) and Registrant and East West Herbs Limited
DATED April 9, 1996
R E ▇▇▇▇▇▇ and others
-and-
PARACELSIAN INC
-and-
EAST WEST HERBS LIMITED
O P T I O N A G R E E M E N T
relating to purchase of East West Herbs Limited
Linnells
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇ ▇▇▇
(Ref:COMP.sharesal)
THIS AGREEMENT is made the 9th day of April, 1996
BETWEEN:-
(1) "The Vendors" THE SEVERAL PERSONS whose names and
addresses are set out in Schedule 1
(2) "The Purchaser" PARACELSIAN INCORPORATED (a company
incorporated under the laws of
Delaware) whose principal office is
at 222 Langmuir Laboratories Cornell
Technology Park Ithaca New York
14850 USA
(3) "The Company" EAST WEST HERBS LIMITED (company
registration number 2241037) whose
registered office is at ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇
WHEREAS
A. The Company is a private company with limited liability of which
short particulars are contained in Part I of Schedule 2
B. The Vendors wish to grant to the Purchaser an option to purchase
all the Shares of the Company on the terms and conditions
hereinafter mentioned
NOW IT IS HEREBY AGREED as follows:-
1. INTERPRETATION
In this Agreement and in the Schedules unless the context otherwise
requires the following words and expressions shall bear the following
meanings:-
1.1 "the Accounts" the audited balance sheet as at the
Accounts Date and the audited profit
and loss account for the period
ended on the Accounts Date of each
Group Company including in the case
of the Company the audited
consolidated balance sheet as at
that date and the notes and
Auditors' and Directors' Reports in
relation thereto
1.2 "the Accounts Date" the 31st day of March 1995
1.3 "the Business Plan" means a memorandum prepared by or on
behalf of the Company a copy of
which is annexed to the Disclosure
Letter at Section 2 of the Agreed
Bundle (as such expression is
defined in the Disclosure Letter
1.4 "the Management Accounts" means the balance sheet of the
Company made up as at 29th February
1996 and the trading and profit and
loss account of the Company for the
period of 11 months ended on that
date
1.5 "the Auditors" Messrs ▇▇▇▇▇ ▇▇▇▇ of ▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇
1.6 "CA 1985" the Companies ▇▇▇ ▇▇▇▇
1.7 "Completion" the completion of the sale and
purchase of the Shares
1.8 "Condition" the condition precedent to
Completion set out in Clause 5
1.9 "Consideration Shares" the shares to be issued to the
Vendors on Completion pursuant to
Clause 4.2.2
1.10 "the Directors" the persons listed as such in Part
I of Schedule 2
1.11 "Disclosure Letter" the letter of even date herewith
from the Vendors to the Purchaser
(or their respective Solicitors) in
the agreed terms
1.12 "the Gains Tax Act" the Taxation of Chargeable Gains Tax
▇▇▇ ▇▇▇▇
1.13 "Group Company" or
"Group Companies" means in relation to the Company,
the Company and its Subsidiary or
Subsidiaries for the time being (if
any) and, in relation to the
Purchaser, the Purchaser and its
subsidiaries or holding company (as
such terms are defined in section
736 of CA 1985) or another
subsidiary of such holding company
1.14 "Indemnities" the indemnities given by the Vendors
to the urchaser pursuant to Clause
7.1.1 in respect of the liabilities
costs claims and expenses referred
to in Schedule 3
1.15 "Issue Price" means the value ascribed to each of
the Consideration Shares pursuant to
Clause 4.2.2
1.16 "▇▇ ▇▇▇▇▇▇" ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ of ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇, ▇▇▇ ▇▇▇
1.17 "Notice" means notice exercising the Option
served pursuant to Clause 2.3
hereof
1.18 "Option" means the right granted pursuant to
Clause
1.19 "Option Period" means the period of twelve months
commencing on the date hereof and
ending at 17.00 on the day which is
the first anniversary of the date
hereof
1.20 "Price" the consideration for the Shares to
be sold pursuant to this Agreement
1.21 "the Properties" the properties described in
Schedule 5
1.22 "the Purchaser's Solicitors" Messrs Linnells of ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇
1.23 "the Vendors' Solicitors" Messrs ▇▇▇▇ and ▇▇▇▇ of ▇▇▇▇▇▇ ▇▇▇▇▇
▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇
1.24 "Service Agreement" the Service Agreement between ▇▇
▇▇▇▇▇▇ and the Company in the agreed
terms
1.25 "the Shares" all of the issued Ordinary Shares of
pounds sterling 1 each in the capital of the
Company comprising at the date of
this Agreement 150,000 Ordinary
Shares of pounds sterling 1 each in the
capital of the Company of which 74,100 are
fully paid and 75,900 are nil paid
and all of which are beneficially
owned by and registered in the names
of the Vendors together with any
further shares stock or other
securities in the Company or in any
other company which are derived from
such Shares or which are distributed
by the Company in respect of such
Shares and any shares stock and
other securities for the time being
representing the same by reason of
any alteration in the share capital
of the Company or any amalgamation
reorganisation or reconstruction of
the Company
1.26 "Subsidiary" or
Subsidiaries" a subsidiary or subsidiaries of the
Company as defined in Section 736 of
CA 1985 and East West Herbs Pty
Limited brief particulars of which
are given in Part II of Schedule 2"
1.27 "Taxation" all taxes howsoever called and
includes (without limitation)
corporation tax, income tax, surtax,
supertax, special charge, special
contribution, profit tax, excess
profits tax, excess profits duty,
capital gains tax, betterment levy,
development gains tax, land tax,
development land tax, value added
tax, purchase tax, customs and other
import duties, capital duty, stamp
duty, stamp duty reserve tax, estate
duty, capital transfer tax, inheritance tax,
petroleum revenue tax, licence royalties,
national insurance contributions, social
security contributions, selective
employment tax, general uniform
business and water rates and
any payment whatsoever which the
Company may be or become bound to
make to any person (whether in
respect of the liability of the
Company or of any other person) as a
result of the operation of any
enactment in relating to taxation
and all penalties, charges and
interest relating to any claim or
assessment for taxation levied,
assessed or imposed by governmental
(whether central or local)
authorities and other agencies or
bodies having lawful authority in
whatever country so to do
1.28 "Taxes ▇▇▇ ▇▇▇▇" Income and Corporation Taxes Act 1988
1.29 "the Warranties" the warranties undertakings and
representations contained in
Schedule 4
1.30 "the Warrantors" ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇▇
1.31 References to statutory provisions shall be construed as
references to any statutory modification or re-enactment thereof
(whether before on or after the date hereof) for the time being in
force and to any former statutory provision replaced (with or
without modification) by the provision referred to and shall
include all statutory instruments or orders from time to time made
pursuant thereto
1.32 References to persons shall include references to unincorporated
associations to the singular shall include references to the
plural and to the masculine shall include references to the
feminine and vice versa
1.33 Agreements undertakings or covenants given by two or more persons
together shall be deemed to be given by such persons jointly and
severally, save as otherwise stated
1.34 References to a document being "in the agreed terms" means in the
form of a draft agreed between the parties hereto and signed for
the purposes of identification by their respective Solicitors and
a list of documents "in the agreed terms" is set out in Schedule 8
1.35 References to Clauses and Schedules are to Clauses of and
Schedules to this Agreement
1.36 The headings in this Agreement and the use of underlining are
included for convenience only and shall not affect the
interpretation or construction of this Agreement
1.37 Words and expressions defined in CA 1985 bear the same meaning in
this Agreement
1.38 The expressions "the Vendors" and "the Warrantors" includes the
personal representatives of any of the Vendors or any of the
Warrantors respectively
1.39 Where the context admits "the Company" includes each Group
Company so that this Agreement shall apply to each Group Company
as if it were the Company and without prejudice to the generality
of the foregoing the Warranties shall apply to and shall be given
in respect of each of the Subsidiaries
2. OPTION
2.1 In consideration of the sum of Twenty Thousand US dollars
($20,000) paid by the Purchaser to the Vendors (the receipt of
which the Vendors hereby acknowledge) the Vendors hereby grant to
the Purchaser the right exercisable at any time during the Option
Period to purchase the Shares in consideration of the Price upon
the terms and subject to the conditions of this Agreement
2.2 The Option shall be exercisable only in respect of all the Shares
2.3 The Option shall be exercisable at any time during the Option
Period by a Notice in writing served upon the Vendors and if un-exercised
at the end of the Option Period the Option shall lapse
2.4 If the Option is exercised as herein provided the sum referred to
in Clause 2.1 hereof shall be deemed to have been paid on account
of the Price
2.5 The sum referred to in Clause 2.1 shall be paid to the Vendors
absolutely and shall be refundable to the Purchaser only in
accordance with the provisions of Clause 7.7
2.6 If any offer is made by the Company or by any third party to all
or any of the Vendors prior to the exercise or expiry of the
Option to purchase any or all of the Shares the Purchaser shall be
entitled to exercise the Option at any time up to the last
business day before the expiration of the offer and the Vendors
shall immediately upon the offer being made give written notice
to the Purchaser of the offer
2.7 Time shall be of the essence for the purposes of this Clause
3. SALES OF SHARES
3.1 If the Option is duly exercised each of the Vendors shall with
full title guarantee sell and the Purchaser shall purchase free
from all liens charges rights of pre-emption encumbrances and
equities and together with all dividends interest bonuses
distributions or other rights attaching thereto the number of
Shares in the capital of the Company set opposite his name in
Schedule 1
3.2 The Purchaser shall not be obliged to complete the purchase of
any of the Shares unless the purchase of all the Shares is
completed simultaneously
3.3 Before Completion the Vendors shall exercise their powers as
directors and/or shareholders of the Company so far as they are
able to procure that East West Herbs Pty Limited (registered in
Australia) shall become a wholly owned subsidiary of the Company
4. CONSIDERATION
4.1 The Price for the sale of the Shares shall be the sum of Three
Million One Hundred and Eighty Thousand US dollars ($3,180,000)
payable to the Vendors in the amounts set out opposite their
respective names in Schedule 1 hereto
4.2 The Price shall be satisfied by:-
4.2.1 the payment by the Purchaser to the Vendors on Completion
of the sum of Seven Hundred and Eighty Thousand US dollars
($780,000) in cash and
4.2.2 the issue to the Vendors by the Purchaser on Completion of
the Consideration Shares, being that number of fully paid
shares of $0.01 each in the Common Stock of the Purchaser
rounded to the nearest whole number as shall have the
value on Completion of Two Million Four Hundred Thousand
US dollars ($2,400,000) on the basis that the the Issue
Price shall be $2.75 or if greater the average of the bid
and asked closing price of such Common Stock as reported
on the NASDAQ small cap market arithmetically averaged
over each of the 15 trading days prior to Completion
4.3 Each of the Vendors acknowledges and represents to the Purchaser
that he or she:-
4.3.1 is acquiring the Consideration Shares for such Vendor's
own account with the intention of holding the
Consideration Shares for investment with no present
intention of allowing others to participate in such
investment or of reselling such Consideration Shares;
4.3.2 shall not make any sale transfer or other disposition of
the Consideration Shares without registration under the
United States of America Securities Act of 1933 as amended
("▇▇▇ ▇▇▇▇ ▇▇▇") and applicable state securities laws
unless an exemption from registration is available under
those laws;
4.3.3 understands that none of the Consideration Shares has been
registered under the 1933 Act or any state securities laws
in reliance on exemptions therefrom and that the
Consideration Shares cannot be resold or otherwise
disposed of unless they are subsequently registered under
the 1933 Act and applicable state securities laws or an
exemption from registration is available
4.3.4 The certificate(s) representing the Consideration Shares
will bear the following legend until either (i) such
securities have been registered under the 1933 Act and
effectively disposed of in accordance with such
registration statement or (ii) in the opinion of counsel
reasonably satisfactory to the Purchaser such
Consideration Shares may be sold without registration
under the 1933 Act:-
"The Securities represented by this Certificate have
not been registered under the Securities Act of 1933
as amended ("the Act") or applicable state securities
laws and may not be offered sold transferred pledged
hypotheticated or otherwise disposed of except
pursuant to an effective registration statement under
the Act or in a transaction which, in the opinion of
Counsel to the holder hereof in form and substance
satisfactory to Counsel to the Corporation, is exempt
from registration under the Act and any applicable
state security laws"
4.4 The Purchaser warrants that the Consideration Shares when issued
will be duly authorised validly issued fully paid and non-assessable and
that all corporate action necessary for the
issuance of the Consideration Shares will have been duly and
properly taken and that no consents or waivers (including the
consent of the shareholders of the Purchaser) are required in
connection with the issuance of the Consideration Shares
5. CONDITION
The sale and purchase of the Shares is conditional upon:-
5.1 the Purchaser exercising the Option
5.2 the Purchaser delivering to the Vendors on or before Completion a
Registration Rights Agreement in the agreed terms duly executed by
the Purchaser
6. RESTRICTIONS
The Vendors shall procure that until the exercise or expiry of the
Option the Company shall not without the Purchaser's consent:-
6.1 issue cancel sub-divide reclassify purchase redeem grant any
option over or register the transfer of any share made other than
in accordance with Clause 7.4.1 in or increase or reduce the
capital or capitalise any amount standing to the credit of the
Company
6.2 declare any dividend bonus or distributions
6.3 cause or permit any alteration to the Articles of Association of
the Company or any regulations or resolutions inconsistent with
them to be adopted
6.4 make any substantial change in the nature of its business
6.5 pass any resolution for the voluntary winding up of the Company
6.6 enter into any transaction that is not in the normal and ordinary
course of conducting its business or enter into any transaction
which is not at arms length or on arms length terms
6.7 cease to trade or change the nature or character of the business
or transfer its business or undertaking or any part thereof to any
other person
6.8 change its auditor
6.9 charge its undertaking and assets or any part thereof
6.10 borrow any money or undertake any obligation except in the usual
and ordinary course of the business of the Company and except for
further bank borrowing of up to pounds sterling 300,000
6.11 appoint any person to hold the office of director of the Company
other than a person retiring by rotation or other than to fill a
vacancy
6.12 pay any remuneration or bonus to the Directors or the Vendors
except in the usual and ordinary course of the business of the
Company
7. WARRANTIES
7.1 Subject to the exceptions limitations provisions and restrictions
in this Clause the Warrantors:-
7.1.1 covenant with the Purchaser to indemnify and keep
indemnified the Purchaser and its successors and assigns
free from all liability in respect of the liabilities
claims costs and expenses referred to but subject as
mentioned in Schedule 3 and
7.1.2 save as fairly and accurately disclosed in the Disclosure
Letter undertake with and warrant and represent to and for
the benefit of the Purchaser that the Warranties in
Schedule 4 are true and accurate in all respects at the
date of this Agreement
7.2 The benefit of the Warranties may not be assigned by the Purchaser
except after Completion to a Group Company provided that on any
such assignee ceasing to be a Group Company the Purchaser shall
procure that the benefit of the Warranties is assigned to the
Purchaser or another Group Company
7.3 The Purchaser is entering this Agreement and will exercise the
Option in reliance upon each of the Warranties which the
Warrantors acknowledge (but on no other representations or
warranties made by the Warrantors or on their behalf to the
Purchaser)
7.4 Each of the Vendors hereby undertakes represents and warrants to
the Purchaser that:-
7.4.1 he shall not prior to the exercise or expiry (whichever is
the sooner) of the Option transfer dispose of charge
pledge or encumber in any way his interest in any of the
Shares except by a transfer of the entire legal and
beneficial interest therein in which case the Vendor in
question will procure that before any person (other than
an existing shareholder) is registered as a holder of any
share in the company such person shall enter into a Deed
of Adherence in the agreed terms and the Shares shall upon
Completion be sold free of any liens charges or
encumbrances
7.4.2 he will procure that he shall not, and shall exercise his
votes as a member and/or director of the Company to
procure so far as he is able that the Company shall not
before Completion knowingly do any act or make any
omission which would constitute a breach of any of the
Warranties if the same were repeated at Completion
7.4.3 he will forthwith notify the Purchaser in writing of any
matter or thing which may arise after the date hereof and
prior to Completion which is to his knowledge (or would
after the lapse of time become) a breach of the Warranties
7.5 Each of the Warrantors hereby undertakes represents and warrants
to the Purchaser that in relation to any of the Warranties which
are qualified by the expression "so far as the Warrantors are
aware" or which refer to the knowledge information or belief of
the Warrantors that he has made all reasonable enquiries into the
subject matter of that Warranty
7.6 If there shall be any material breach of the Warranties before
Completion other than a breach fairly and accurately disclosed in
the Disclosure Letter or if there is any material breach or
non-fulfilment before Completion of any of the provisions on the
part of the Vendors contained in this Agreement which (being
capable of remedy) is not remedied prior to Completion then (in
addition and without prejudice whatever to any other rights or
remedies available to the Purchaser in respect thereof) the
Purchaser shall be at liberty without any liability whatever to
the Vendors to terminate this Agreement and (after the exercise
of the Option) not to complete the purchase of the Shares by
giving notice to that effect to the Vendors' or their Solicitors
7.6 If this Agreement is terminated pursuant to Clause 7.6 hereof by
reason of any matter or thing arising or known to the Warrantors
or any of them on or prior to the date of this Agreement the
Vendors shall forthwith repay to the Purchaser the sum referred to
in Clause 2.1 hereof
7.7 From Completion the Disclosure Letter shall be read and construed
as if any further disclosure made in writing by the Vendors or the
Warrantors to the Purchaser on or prior to Completion in respect
of any matter or thing arising or known to the Warrantors or any
of them after the date of this Agreement had been made on the date
of this Agreement and for the avoidance of doubt the Purchaser
shall be bound by such disclosure if it shall choose not to
exercise any right to terminate this Agreement (and not to
complete the purchase of the Shares) under Clause 7.6
7.9 The Purchaser undertakes with the Warrantors that if it receives
any information in writing (save from its professional advisers)
whereby the Warranties are not true and accurate in all material
respects it will as soon as reasonably practicable provide the
Warrantors with a copy of such information and subject thereto no
information of which the Purchaser may have notice actual
constructive or implied) other than that fairly and accurately
disclosed in the Disclosure Letter shall prejudice any claim by
the Purchaser under the Warranties or operate to reduce any amount
recoverable by the Purchaser
7.10 The Warranties shall remain in full force and effect after
Completion
7.11 Each of the Warranties shall be construed as a separate and
independent warranty and shall not be limited by reference to any
other
7.12 The Warrantors undertake that in the event of the Purchaser making
any claim against the Warrantors in respect of the Warranties the
Warrantors will not make any claim against the Company or any of
its officers or employees in connection therewith (other than any
such officer or employee who is named herein as a Vendor)
7.13 If the sale and purchase of the Shares is completed then in
respect of any breach of any of the Warranties the Warrantors
hereby agree with the Purchaser to pay to the Purchaser:
7.13.1 the amount necessary to put the Company and each of the
Subsidiaries into the position which would have existed
if the Warranties had been true when given; and
7.13.2 all reasonable costs and expenses incurred in connection
therewith by the Company or each of the Subsidiaries
7.14 The liability of the Warrantors under this Agreement shall not be
affected by the transfer of any of the Shares held by them at the
date hereof
8. LIMITATION ON WARRANTY LIABILITIES
8.1 Notwithstanding anything in this Agreement to the contrary the
Warrantors shall not be liable for any claim or claims under the
Indemnities or in respect of a breach of the Warranties by the
Warrantors unless:
8.1.1 written particulars thereof giving full details of the
specific matters in respect of which such claim is made
shall have been given to the Warrantors within a period of
six years after Completion in respect of claims relating
to the Indemnities and twelve months after Completion in
respect of claims relating to the Warranties; and
8.1.2 the amount of all claims brought in accordance with the
foregoing shall exceed US$70,000 in aggregate in which
event all of such amount shall be subject to such claims
8.1.3 the amount of each individual claim exceeds $3,000
8.2 The maximum aggregate liability of the Warrantors in respect of
all claims in relation to the Warranties and under the Indemnities
(including any such claim made by the Company) shall not exceed a
sum equal to the total consideration received under Clause 4 by
the Warrantors and/or by any person to whom the Warrantors may
have transferred any of the Shares pursuant to Clause 7.4.1
8.3 The total liability of each Warrantors shall not in any event
exceed the amount of the consideration received under Clause 4 by
that Warrantor and/or by any person to whom that Warrantor may
have transferred any of the Shares pursuant to Clause 7.4.1
8.4 In the event that the liability of a Warrantor exceeds the amount
of cash consideration received by that Warrantor under Clause
4.2.1 and/or by any person to whom that Warrantor may have
transferred any of the Shares pursuant to Clause 7.4.1 the balance
shall be satisfied, at the election of the Warrantor, either in
cash or by the transfer by the Warrantor to the Purchaser of that
number of Consideration Shares as shall have a value equivalent to
the value of the balance of the liability outstanding against that
Warrantor on the basis that the value of each Consideration Share
shall be deemed to be the Issue Price
8.5 Any sums expended by the Warrantors in satisfaction of any claim
for breach of Warranty or a claim made under the Indemnities shall
be deemed to be paid as a reduction in the Price
8.6 The Warranties are given subject to matters fairly and accurately
disclosed in the Disclosure Letter
8.7 The Warrantors shall not be liable for any claim under the
Indemnities or in respect of a breach of the Warranties
8.7.1 where a claim is in respect of any liability for Taxation
which arises out of the ordinary course of trading of the
Company since the Accounts Date;
8.7.2 which arises or to the extent that any such claim is
increased as a result only of any increase in rates of
Taxation or any other change in the law made after the
date hereof with retrospective effect;
8.7.3 where the claim would not have arisen but for a voluntary
act or omission which could have been avoided made by the
Purchaser or any of its subsidiaries or the Company after
Completion otherwise than in the ordinary course of
business and which the Purchaser ought reasonably to have
been aware could give rise to a claim;
8.7.4 where an amount payable in respect of a claim is increased
by reason of the Purchaser or the Company failing after
due warning to act in accordance with the written
instructions or request of the Warrantors in respect of
that claim to the extent of such increase;
8.7.5 where the claim is in respect of stamp duty or stamp duty
reserve tax on the transfer of the Shares to the Purchaser
pursuant to this Agreement;
8.7.6 where a claim would not have arisen but for any change in
the accounting policy or practice of the Purchaser or the
Company introduced or having effect after the Accounts
Date;
8.7.7 to the extent that the amount by which any provisions for
Taxation (including deferred tax), bad or doubtful debts
or contingent or other liabilities contained in the
Accounts or the Management Accounts has proved at the
date of the relevant claims to be in excess of the matter
for which such provision was made; or
8.7.8 to the extent that the amount by which any Taxation for
which the Company is or may be liable to be assessed or
accountable is reduced or extinguished as a result of the
matter giving rise to such claim
8.7.9 to the extent that a specific provision or reserve
therefor has been made in the Accounts or the Management
Accounts
8.8 If the Purchaser shall make a claim under this Agreement and under
the Indemnities in respect of the same liability the Purchaser
may not recover more than the full amount of such liability
8.9 Notification of claims by the Purchaser shall be made to the
Warrantors as soon as reasonably practicable after the facts
giving rise to any such claim come within the knowledge of the
Purchaser and in any event in respect of a claim under the
Indemnities no later than seven days from the date of receipt of
any notice or other communication from the Inland Revenue by the
Purchaser or the Company
8.10 The Purchaser shall procure that the Company shall observe the
terms of this Clause as if it were a party hereto
8.11 Where the Purchaser or the Company has any claim against any third
party in relation to any matter in respect of which there shall
have been a breach or alleged breach of the Warranties or the
Indemnities or where the Purchaser or the Company receives any
claim from a third party which may result in the Purchaser having
a claim against the Warrantors in respect of the Warranties or the
Indemnities:-
8.11.1 the Warrantors shall be entitled (subject to providing the
Purchaser or the Company such security for costs as they
shall reasonably require) to take any action and require
the Purchaser and the Company to take any action they may
reasonably request to prosecute or resist such claim as
the case may be in the name of the Purchaser or the
Company (as appropriate) but at the expense of the
Warrantors and the Warrantors shall further be entitled
at their own expense to have the conduct of any appeal
dispute application for deferment and other forms of
objection compromise or defence thereof and of any
incidental negotiations and the Purchaser shall and shall
procure that the Company shall give the Warrantors all
co-operation access and assistance for the purpose of
considering prosecuting or resisting as the case may be
such claims as they may reasonably require
8.11.2 The amount of any liability of the Warrantors shall be
reduced by the amount recovered from the said third party
in respect of the claim against it
8.12 In the event of the Warrantors or any of them having paid to the
Purchaser an amount in respect of a claim under the Warranties or
Indemnities and subsequent to the date of making such payment the
Purchaser or the Company receives from a third party a sum which
is directly referable to that payment then the Purchaser shall
forthwith repay or procure the repayment by the Company to the
relevant Warrantors of so much of the amount paid by the third
party (less the reasonable costs of recovery of such sum,
including any related liability to Taxation) as does not exceed
the sum paid in cash by the Warrantors or any of them to the
Purchaser
8.13 Where a breach of any of the Warranties or Indemnities shall be in
respect of a matter where the Company shall be insured against any
loss or damage arising therefrom, neither the Company nor the
Purchaser shall make any claim against the Warrantors or any of
them under the Warranties or Indemnities without first procuring
that the Company shall make a claim against its insurers for
compensation for such loss or damage suffered and thereafter any
claim against the Warrantors shall be limited (in addition to all
other limitations on the Warrantors' liability elsewhere referred
to herein) to the amount by which the amount of the loss or damage
suffered by the Purchaser or the Company as a result of such
breach shall exceed the compensation paid by the said insurers to
the Company or the Purchaser together with such amount as may be
necessary to compensate the Purchaser for any increase in the
costs of obtaining and/or maintaining insurance for the Company in
consequence of such claim having been made. For the avoidance of
doubt the provisions of this Clause 8.13 shall not preclude the
Purchaser giving notice of any matters to which this Clause
relates under Clause 8.1 hereof prior to such insurance claim
being made or resolved
8.14 The Purchaser undertakes to retain or to procure the retention by
the Company of all such books records accounts correspondence and
other papers of the Company as are likely to be material in the
context of the liability of the Warrantors under the Warranties or
the Indemnities during the subsistence of the liability of the
Warrantors under the Warranties or (as the case may be) the
Indemnities
8.15 Any payments made to the Company in respect of the Indemnities
shall be inclusive of Value Added Tax
8.16 If the Inland Revenue brings into charge to tax any sum paid to
the Purchaser and/or the Company in respect of a breach of the
Warranties or pursuant to a claim made under the Indemnities then
the sum so paid shall be grossed up by such amount as is necessary
to ensure that the amount of the sum so paid shall after deduction
of any tax so chargeable equal the sum otherwise payable
8.17 If the Purchaser is entitled to make a claim in respect of any
act event or default both under the Warranties and under the
Indemnities the claim shall first be made under the Warranties and
any amount payable to the Purchaser under the Indemnities shall be
reduced to the extent of the claim
9. REMEDIES
9.1 Save as expressly provided in this Agreement any breach by the
Warrantors and/or the Vendors of any terms of this Agreement shall
give rise only to an action for damages and shall not entitle the
Purchasers to rescind this Agreement
9.2 The Purchaser may release or compromise the liability of any of
the Vendors hereunder or grant to any of the Vendors time or
other indulgence and it shall not thereby be under any obligation
to make any such release compromise or grant in relation to the
remaining Vendors
9.3 No failure to exercise and no delay in exercising on the part of
any party to this Agreement any right or remedy in respect of any
part of this Agreement or the Indemnities shall operate as a
waiver of such rights or remedy nor shall a single or partial
exercise of such rights or remedy prejudice the exercise of any
other right or remedy
10 . VENDORS' UNDERTAKINGS PENDING COMPLETION
From the exchange of this Agreement until Completion the Vendors shall
exercise their powers as directors and/or shareholders of the Company
so far as they are able to procure that the Company shall carry on its
business in the normal and ordinary course and as a going concern and
(without prejudice to the generality of the foregoing) in particular
shall procure that the Company will:-
10.1 maintain its trade and trade connections;
10.2 maintain its policies of insurance;
10.3 not purchase or acquire nor sell or dispose of any asset otherwise
than in the ordinary course of business;
not enter into any agreement or other commitment otherwise than
in the ordinary course of business; and
10.4 not declare or pay any dividend or other distribution nor pay or
agree to pay any management fees (whether or not in the ordinary
course of business) without the consent in writing of the
Purchaser
11. COMPLETION
11.1 In the event that the Condition is fulfilled Completion shall take
place at the offices of the Purchaser's Solicitors 28 days after
the date of service of the Notice (or on the next succeeding
business day if Completion would not otherwise fall on a business
day)
11.2 At Completion the Vendors shall procure the delivery to the
Purchaser of:
11.2.1 duly executed transfers in favour of the Purchaser or its
nominee of all the Shares;
11.2.2 the share certificates representing the Shares (or an
express indemnity in a form satisfactory to the Purchaser
in the case of any found to be missing);
11.2.3 the Registration Rights Agreement in the agreed terms duly
executed by the Vendors
11.2.4 the Certificates of Incorporation Common Seals Minute
Books Statutory Registers and Share Certificate Books of
the Company each duly made up to date;
11.2.5 the resignation of the Auditors containing the statement
referred to in Section 394 CA 1985 confirming that there
are no circumstances connected with their resignation
which they consider should be brought to the notice of the
members or creditors of the Company;
11.2.6 duly executed transfers in favour of the Purchaser or
its nominee of all the issued shares of each of the
Subsidiaries not registered in the name of the Company;
11.2.7 the share certificates representing the shares referred
to in Clause 11.2.5 (or an indemnity in a form
satisfactory to the Purchaser in the case of any found to
be missing);
11.2.8 the title deeds to the Properties which the Purchaser
shall hold as agent for the Company
11.3 The Vendors shall procure that a Board meeting of the Company
shall be held at which it shall be resolved that:-
11.3.1 if so required by the Purchaser prior to Completion ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇ shall resign her office as Secretary of the
Company and ▇▇▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇ shall
each resign their offices as Directors and each shall
deliver to the Purchaser an acknowledgement executed as a
deed in the agreed terms that he has no claim against the
Company for loss of office
11.3.2 such persons as the Purchaser shall nominate prior to
Completion shall be appointed officers of the Company;
11.3.3 the registered office of the Company shall be changed to
such place as the Purchaser may nominate prior to
Completion
11.3.4 the transfers referred to in Clause 11.2.1 shall (subject
only to the same being duly stamped) be approved for
registration and that the Purchaser and its nominees (if
any) be entered in the Company's Register of Members as
the holders of the Shares;
11.3.5 all authorities to the bankers of the Company shall be
revoked or amended (as the Purchaser directs) and
authority shall be given to such persons as the Purchaser
may nominate to operate the Company's bank accounts; and
11.3.6 the resignation of the Auditors shall be accepted
11.4 The Vendors shall procure that a board meeting of each of the
Subsidiaries is held dealing with the matters specified in Clause
11.3 as if references therein to "the "Company" were to the
Subsidiary but on the basis that the reference in Clause 11.3.4 to
Clause 11.2.1 were to Clause 11.2.5 (transfer of shares in the
Subsidiaries)
11.5 ▇▇ ▇▇▇▇▇▇ shall enter into the Service Agreement
11.6 Upon completion of all the matters referred to in Clauses 11.2 to
11.5 inclusive (failing which the Purchaser shall not be obliged
to complete this Agreement) the Purchaser shall
11.6.1 deliver to the Vendors' Solicitors (as agents for the
Vendors) a banker's draft for US$780,000
11.6.2 satisfy the balance of the Price by complying with the
provisions of Clause 4.2.2 and by delivering share
certificates duly issued and authorised fully paid and
non-assessable
and the receipt of the Vendors' Solicitors shall be a sufficient
discharge to the Purchaser therefor
12. LOANS AND UNPAID SHARES
12.1 At or before Completion the Vendors will discharge all
indebtedness and pay all uncalled share capital due from the
Vendors (or any firm company or business in which any of the
Vendors is interested) to the Company (with the exception of any
trade debts incurred in the ordinary course of business which
shall be satisfied in accordance with the terms stated in the
Disclosure Letter or if none are so stated within 30 days of
invoice)
12.2 The Purchaser shall procure that at or before Completion all
indebtedness due from the Company to the Vendors (full particulars
whereof have been provided to the Purchaser in writing prior to
the date hereof) shall be discharged (with the exception of any
trade debts which will be dealt with in accordance with Clause
12.1)
12.3 The Purchaser shall procure that within 30 days after Completion
it shall lend to the Company on such terms as may be agreed
between the Company and the Purchaser the sum of pounds sterling 300,000
by way of additional working capital
13. RELEASES
13.1 The Vendors shall procure that prior to or at Completion the
Company shall be released from all guarantees and indemnities
given by it of which full details are set out in the Disclosure
Letter in respect of obligations of the Vendors and pending such
release the Vendors shall indemnify the Company against all
liabilities in respect thereof
13.2 The Purchaser will use all reasonable endeavours to procure that
with effect from Completion the Vendors shall be released from all
guarantees and indemnities given by the Vendors in respect of
obligations of the Company and of which full details have been
notified to the Purchaser or the Purchaser's solicitors in writing
prior to the date hereof and pending such release shall indemnify
the Vendors against all liabilities in respect thereof
13.2 The Purchaser shall use all reasonable endeavours to procure that
with effect from Completion ▇▇ ▇▇▇▇▇▇ is released from all
liability to the Landlord of Units 21 and ▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ under a lease dated 26 February 1991 made
between Turngallant Limited (1) and the Company and ▇▇ ▇▇▇▇▇▇ (2)
and pending such release shall indemnify ▇▇ ▇▇▇▇▇▇ against all
liabilities in respect thereof
14. RESTRICTIONS ON VENDORS
14.1.1 ▇▇ ▇▇▇▇▇▇ hereby undertakes and covenants with the
Purchaser (for the benefit of the Purchaser and as trustee
for the benefit of the Company and its successor in title
to the business) that he shall not:-
14.1.1 for a period of three years from Completion be directly or
indirectly interested or concerned in or assist in
carrying on any business undertaking company or firm
carrying on business in (the United Kingdom) or any part
thereof for the import and export and sale of herbs or any
business which is otherwise competitive with any of the
respective businesses carried on by the Company at the
date hereof provided that nothing herein contained shall
prevent him from:-
(a) being the holder of or from being beneficially
interested in any class of securities in any company
if such class of securities is listed and dealt in on
the Stock Exchange or any other recognised investment
exchange where ▇▇ ▇▇▇▇▇▇ (together with his spouse and
children) neither holds nor is beneficially interested
in more than a total of five per centum of any single
class of the securities in that company
(b) continuing to carry on or be interested or concerned
in any other business which is at the date hereof
carried on by him or in which he is concerned or
interested
14.1.2 for a period of three years from Completion (other than on
behalf of the Company) either on his own account or on
behalf of any other person firm or company solicit orders
or contracts for goods of similar type to those being
manufactured or dealt in or for services similar to those
being provided by the Company at the date hereof from any
person firm or company who or which is at Completion or
has been at any time within the twelve months prior to
Completion a customer of or supplier to the Company; or
14.1.3 for a period of three years from Completion either on his
own account or on behalf of any other person firm or
company solicit the employment for the purposes of a
similar business to that carried on by the Company at
Completion of any person who is at Completion or who has
within the six months prior to Completion been an officer
or employee of the Company (provided that the placement by
▇▇ ▇▇▇▇▇▇ of any advertisement for staff in any newspaper
or magazine shall not of itself be treated as a breach of
this Clause 14.1.3); or
14.1.4 at any time hereafter in relation to a trade or business
competitive or likely to be competitive with that carried
on by the Company at Completion use or (insofar as he can
reasonably do so) allow to be used (other than by the
Company) any trade name used by the Company at Completion
or any other name intended or likely to be confused
therewith
14.2 ▇▇▇▇▇▇▇ ▇▇▇▇▇ (in this Clause referred to as "▇▇ ▇▇▇▇▇") hereby
undertakes and covenants with the Purchaser (for the benefit of
the Purchaser and as trustee for the benefit of the Company and
its successor in title to the business) that he shall not for a
period of one year from Completion (other than on behalf of the
Company) either on his own account or on behalf of any other
person firm or company solicit orders or contracts for goods of
similar type to those being manufactured or dealt in or for
services similar to those being provided by the Company at the
date hereof from any person firm or company who or which is at
Completion or has been at any time within the twelve months prior
to Completion a customer of or supplier to the Company other than
a customer in Italy, Spain or Portugal or a supplier who is listed
in Schedule 9 and save in the case of suppliers, with the previous
written consent of the Purchaser, such consent not to be
unreasonably withheld or delayed
14.3 The Vendors hereby undertake and covenant with the Purchaser (for
the benefit of the Purchaser and as trustee for the benefit of the
Company and its successor in title to the business) that they
shall not at any time hereafter make use of or disclose or divulge
to any third party (other than as required by law or to his
professional advisers) any information of a secret or confidential
nature relating to any business of the Company save insofar as
they may prove the same has become a matter of public knowledge
(otherwise than by reason of a breach by any of them of this
Clause)
14.4 The restrictions contained in Clause 14.1 Clause 14.2 and 14.3
have been carefully considered by the covenantors who accept that
they are reasonable and necessary for the proper protection of the
goodwill of the businesses of the Company and of the Purchaser but
in the event that any such restriction shall be found to be
unenforceable for whatever reason but would be valid if some part
thereof were deleted or the period or area of application reduced
such restriction shall apply with such modification as may be
necessary to make it valid and effective and the remaining
restrictions shall continue to bind the relevant covenantor
15. FURTHER ASSURANCE
15.1 The Vendors shall do all necessary acts within their power for
effectively vesting the Shares in the Purchaser or its nominees
from Completion and shall each exercise their powers as directors
and/or shareholders to procure the convening of all such meetings
and the giving or passing of all such waivers and shall do or
procure all such other acts and things as shall be necessary
under CA 1985 or the Articles of Association of the Company or
otherwise to give effect to the provisions of this Agreement
15.2 The Purchaser shall do all necessary acts within their power for
effectively vesting the Consideration Shares in the Vendors or
their nominees from Completion
15.3 In consideration of each of the other Vendors entering into this
Agreement each of the Vendors hereby waives all rights of
pre-emption which he may have (whether under the Company's
Articles of Association or otherwise) in respect of the transfer
to the Purchaser or its nominees of the Shares or any of them
16. CONTINUING OBLIGATIONS AND ASSIGNMENTS
16.1 The Warranties and each of the obligations undertaken or given by
the Warrantors and the Vendors respectively pursuant to this
Agreement excluding any obligation fully performed at Completion
shall continue in full force and effect notwithstanding Completion
taking place and be binding on the estates and personal
representatives of the Warrantors and the Vendors
16.2 If the Shares shall at any time be sold or transferred by the
Purchaser to a Group Company of the Purchaser the benefit of each
of the said obligations shall be assignable to the purchaser or
transferee of the Shares and such purchaser or transferee shall be
entitled to enforce each of the Warranties against the Warrantors
and each of the obligations against the Vendors as if it were
named herein as the Purchaser provided that on any such assignee
ceasing to be a Group Company of the Purchaser the Purchaser shall
procure that the benefit of the Warranties and the said
obligations is assigned to the Purchaser or another Group Company
of the Purchaser
16.3 Save as aforesaid none of the rights or obligations hereunder may
be assigned or transferred to any other person without the consent
of all the parties to this Agreement
17. ANNOUNCEMENTS
No announcement concerning this sale and purchase or any ancillary
matter shall be made before or after Completion by any party hereto
other than as required by law without the prior written approval of the
other parties (such approval not to be unreasonably withheld)
18. COSTS
Each party hereto shall pay the costs and expenses incurred by him in
connection with the entering into and completion of this Agreement
19. NOTICES
19.1 Any notice or other document to be given hereunder shall be
delivered or sent by first class post (or if outside the United
Kingdom Air Mail) or telex or facsimile transmission to the party
to be served at the party's registered office or last known
address or such other address as the party shall notify in
accordance herewith
19.2 Any notice or other communication given by or to any party in
accordance with this Agreement may be given by or to that party's
solicitors in accordance with the provisions of the preceding
sub-clause of this Agreement
19.3 Any such notice or document shall be deemed to have been served if
delivered at the time of delivery or if posted at the expiration
of 48 hours (108 hours if sent to or from an address outside the
United Kingdom) after the envelope containing the same shall have
been put into the post or if sent by telex or facsimile
transmission at the expiration of 12 hours after receipt of the
same has been automatically acknowledged to the sender thereof and
in proving such service it shall be sufficient to prove that
delivery was made or that the envelope containing such notice or
document was properly addressed and posted as a prepaid first
class or air mail letter or that the telex or facsimile
transmission was properly addressed and posted as a prepaid first
class or air mail letter or that the telex or facsimile
transmission was properly addressed and acknowledged as the case
may be provided that a copy of such telex or facsimile
transmission is delivered or sent by post in manner aforesaid
within twenty four hours of such telex or facsimile being
automatically acknowledged
20. PROPER LAW
This Agreement shall be governed by and construed in accordance with
English Law and the parties hereby submit to the non-exclusive
jurisdiction of the English courts
21. REGISTRATION
No provisions of this Agreement or any agreement or arrangement of
which it forms part which is subject to registration (if such be the
case) under the Restrictive Trade Practices Acts 1976 and 1977 shall
take effect until the day after particulars of such agreement have been
furnished to the Director General of Fair Trading pursuant to Section
24 of the Restrictive Trade Practices Act 1976 which (if necessary)
the parties shall furnish within 3 months of the date hereof
22. WHOLE AGREEMENT
This Agreement (together with the documents referred to in this
Agreement) constitutes the whole agreement between the parties hereto,
each of whom acknowledges that there are no representations,
agreements, terms or conditions relating to the sale of the Sale Shares
save as are contained in this Agreement or in any documents referred to
in this Agreement and no variations to this Agreement shall be
effective unless made in writing and signed by all the parties.
23. COUNTERPARTS
This Agreement may be executed in any number of counterparts.
IN WITNESS whereof the parties to this Agreement have executed it under
hand on or before the date first before written and have given
authority to their respective Solicitors to date and deliver the same
and (if appropriate) a duplicate or counterpart thereof such dating
being conclusive proof of delivery on the date first before written
SCHEDULE 1
(The Vendors)
Name Address Number Consider-
of ation
Shares US $
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ Old Clock Cottage, 92,728 1,965,833.60
▇▇▇▇▇▇▇▇, ▇▇▇▇,
▇▇▇ ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇,▇▇▇ 271,360.00
Cascais 2765
Portugal
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ The Old House, 7,000 148,400.00
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇ ▇▇▇▇▇▇ ▇▇▇▇ 1,000 21,200.00
▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ Barn Cottage, 35 500 10,600.00
▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ 15,000 318,000.00
Galitzine ▇▇▇▇▇▇ ▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, 1,500 31,800.00
▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇
▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇ 5,100 108,120.00
▇▇▇▇▇▇ ▇▇▇▇,▇▇
▇▇▇▇▇, ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ Old Clock Cottage, 12,872 272,886.40
▇▇▇▇▇▇▇▇, ▇▇▇▇,
▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ 10,600.00
Chipping ▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Cedarhurst, Wyck 1,000 21,200.00
Beacon, Bourton on
the ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇
---------- ---------------
150,000 3,180,000.00
SCHEDULE 2
PART 1
(Details of the Company)
Registered Number 2241037
Date of Incorporation 6th April 1988
Registered Office ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Directors ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ S ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
Secretary ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
Accounting Reference Date 31st March
Auditors ▇▇▇▇▇ ▇▇▇▇ of ▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Bankers ▇▇▇▇▇▇ & Co of ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
VAT registration number GB 448 6730 19
Tax District and Reference Oxford 2, Reference 185 11850
26524
PART II
(Details of the Subsidiaries)
Name :East West Herbs Pty Limited
Australian Company Number :066444148
Date of Incorporation :16 March 1995
Registered Office :Phipson Nominees Pty
Limited, 10th Floor,
National Mutual Centre, 15
London Circuit, Canberra,
Australian ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇▇
Directors :▇▇▇▇▇ A ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
Auditors :None
Bankers :None
Authorised Share Capital :$10,000,000
Issued Share Capital :$2
Shareholders :▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
VAT Number :Not applicable
Tax District and Reference :Not applicable
Name :East West Herbs (USA) Limited
Employer Identification Number :13 - 3846274
Date of Incorporation :13th February 1995
Registered ▇▇▇▇▇▇ :▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Directors :▇▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇▇
Secretary :▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Accounting Reference Date :
Auditors :
Bankers :▇▇▇▇▇ Fargo
Authorised Share Capital :$30
Issued Share Capital :$0.01
Shareholder :East West herbs Limited
VAT Number :N/A
Tax District and Reference :N/A
SCHEDULE 3
(The Indemnities - Clause 7.1.1 )
1. Tax
Any claim for Taxation or settlement of or any depletion in the value
of the assets of the Company in connection with any claim for Taxation
in respect of any act omission or event before Completion
2. Penalties and Costs
All penalties imposed and costs and expenses incurred by the Company
and the Purchaser or any of them in connection with any claim relating
to the matters in paragraph 1 of this Schedule or any of them and in
the event of the Purchaser becoming aware of any claim relevant for the
purpose of this Schedule of which the Vendors may not be aware the
Purchaser shall procure that notice thereof is given to the Vendors and
as regards any relevant claim the Purchaser shall or shall procure that
the Company at the request of the Vendors takes such action as the
Vendors may reasonably require to avoid dispute resist appeal
compromise or defend the claim and any adjudication in respect thereof
but subject to the Purchaser being fully and effectually indemnified
and secured by the Vendors against all losses (including any interest
and additional taxation) costs damages and expenses which may be
thereby incurred.
SCHEDULE 4
(Warranties and Undertakings - Clause 7.1.2)
GENERALLY
1. The Accounts
1.1 The Accounts:-
1.1.1 show a true and fair view of the state of affairs profit
and loss and assets and liabilities of the Company as at
the Accounts Date and
1.1.2 have been prepared in accordance with current accounting
standards and practices; make proper provision for all
actual and contingent liabilities including without
limitation tax and bad or doubtful debts as at the Accounts Date
1.1.3 are not affected by any extraordinary exceptional or non-recurring
item
1.2 Since the Accounts Date there has been no material reduction in
the net assets position of the Company as represented by the
Accounts or in the share capital
1.3 The Company has at all times kept and maintained and will prior to
the completion of this Agreement keep and maintain in accordance
with the requirements of the Companies Act and good business
practice and proper accounting principles and current standard
accounting practices proper books of account and accounting
records
1.4 All accounting information records documents books and papers
relating to the business and affairs of the Company are and will
remain until completion of this Agreement in the possession of the
Company
2. Management Accounts
True copies of the Management Accounts prepared by the Company in
respect of the business carried on by the Company since the Accounts
Date and annexed hereto have been prepared in accordance with
generally accepted accounting principles and to the best of the
Warrantors' knowledge and belief reflect the state of affairs of the
business of the Company in all material respects and adequately
disclose all assets and liabilities of the Company at the relevant
balance sheet date to which they relate and apply bases and policies of
accounting which have been consistently applied in the Accounts save
that such Management Accounts have not been audited by the Auditors
3. Business Plan
So far as the Warrantors are aware all facts stated in the Business
Plan were as at its date and remain true and accurate in all material
respects. All estimates, opinions and projections contained therein
were as at such date and remain honestly made or held and fairly based
upon facts which were and are within the knowledge of the Warrantors or
which they reasonably believe to be true and were and are bona fide and
reasonably arrived at on the basis of proper and reasonable assumptions
and so far as the Warrantors are aware there were and are no other
material facts the omission of which would or might make misleading any
statement therein whether of fact or opinion or the disclosure of which
could reasonably be expected to affect the decision of the Purchaser to
enter into the Option Agreement.
4. Assets
4.1 The method of valuing stock and work in progress and the basis of
depreciation adopted by the Company in respect of each of the
fixed assets of the Company shown in the Accounts and the
Management Accounts was the same as that adopted in the balance
sheets for the two financial years preceding the Accounts Date and
the rate of depreciation shown in the Accounts and the Management
Accounts for each such asset is sufficient to write down the value
of such asset to nil not later than the end of its useful working
life
4.2 The stock of raw materials packaging materials and finished goods
now held are not excessive and are adequate in relation to the
current trading requirements of the businesses of the Company and
none of such stock is obsolete unusable or unmarketable in
relation to the current business of the Company and no contracts
are outstanding which are likely to result in the foregoing not
being true
4.3 The stock-in-trade of the Company is in reasonably good condition
and is capable of being sold by the Company in the ordinary course
of its business in accordance with its current price list without
rebate or allowance to a purchaser
4.4 The plant machinery equipment vehicles and other equipment used
in connection with the business of the Company:
4.4.1 are in a reasonably good and safe state of repair and
condition and satisfactory working order and have been
properly maintained
4.4.2 are not expected to require replacements or additions at
a cost in excess of pounds sterling 5,000 within twelve months from
the date of this Agreement
4.5 All the stock-in-trade of the Company and those of its other
assets and undertakings which are of an insurable nature are and
have at all material times been insured in amounts representing
their full replacement or reinstatement value against fire and
other risks normally insured against by persons carrying on the
same business as that carried on by the Company
4.6 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
insured against by persons carrying on the same business as that
carried on by the Company
4.7 All insurances are currently in full force and effect and nothing
has been done or omitted to be done which could make any policy of
insurance void or voidable or so far as the Warrantors are aware
which is likely to result in an increase in premium
4.8 No claim is outstanding or may be made under any of the insurance
policies and so far as the Warrantors are aware no circumstances
exist which are likely to give rise to a claim
5. Shares
5.1 No person has the right to call for the issue of any shares in the
capital of the Company
5.2 None of the Shares is subject to any charge lien encumbrance
option claim or title adverse to that of the Vendors and the
Vendors have the complete interest right power and authority to
sell and transfer the Shares
5.3 The Company has not repaid or agreed to repay or redeemed or
agreed to redeem or capitalised or agreed to capitalise any
shares and has not been engaged in any demerger within or as
referred to in section 213 of the Taxes Act
6. Title and Value of Assets
6.1 Neither the Company nor the Vendors have done or omitted to do or
are aware of anything save as disclosed in the Disclosure Letter
which would materially reduce the value of the assets of the
Company or any of them as contained or referred to in the Accounts
and the Management Accounts and
6.2 The Company has absolute title free from any adverse claim to such
assets and does not have any assets subject to any lien charge
claim encumbrance letting rental lease purchase hire purchase or
other agreement other than those mentioned in Schedule 7 to this
Agreement
6.3 All the assets of the Company are free from any defect except only
fair wear and tear
7. Contracts
7.1 An Agreement dated the 2nd November 1994 made between the Company
(1) and ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇.▇▇ (Nanjing) (2) for the production
and distribution of 36 herbal products is in full force and effect
and the Company is not in default of any of the provisions thereof
and the Warrantors know of no circumstance likely to give rise to
such a default
7.2 The Company has not entered into any long term or abnormal
contract or undertaken any obligations whatsoever except such as
are usual and necessary in the ordinary and proper course of its
business or except as hereinafter referred to or as are referred
to in the Accounts or the Management Accounts
8. Trading matters
8.1 The Company is not or has not agreed to become a member of any
joint venture consortium partnership or other unincorporated
association
8.2 There are no claims pending or threatened or so far as the
Warrantors are aware capable of arising against the Company by an
employee or ▇▇▇▇▇▇▇ or third party in respect of any accident or
injury which are not fully covered by insurance
8.3 No power of attorney given by the Company is in force
8.4 Save for the Directors there are no outstanding authorities
(express or implied) by which any person may enter into any
contract or commitment to do anything on behalf of the Company
8.5 The Disclosure Letter contains accurate particulars of all
subsisting contracts to which the Company is a party at the date
of this Agreement
8.6 The Company is not or will not by reason simply of the lapse of
time become in default in respect of any obligation or restriction
binding upon it
8.7 So far as the Warrantors are aware the Company has not
manufactured sold or supplied products which are or were or will
become in any material respect faulty or defective or which do
not comply in any material respect with any warranties or
representations expressly or impliedly made by it or with all
applicable regulations and standards in respect thereof
8.8 The Company is not subject to any liability or obligation (save
as may be implied by law) to service repair maintain take back or
otherwise do or not do anything in respect of any goods or
products that have been or are hereafter delivered by it
8.9 The Company is not a party to nor has its profits or financial
position during the three years prior to the date hereof been
affected by any contract or arrangement which is not of an
entirely arm's length nature
8.10 The Company is not a party to or subject to any agreement
transaction obligation commitment understanding arrangement or
liability which:-
8.10.1 will require the Company to pay any commission finder's
fees royalty or similar payment or
8.10.2 in any way restricts the Company's freedom to carry on the
whole or any part of its business in any part of the
United Kingdom or elsewhere in such manner as it thinks fit
8.11 There are no arrangements and understandings (whether legally
enforceable or not) between the Company and any person who is a
director or shareholder or the beneficial owner of any interest in
the Company
9. Employees
9.1 There are no employees of the Company at the date hereof other
than:-
9.1.1 those whose main terms and conditions of employment are
mentioned in Schedule 6, and
9.1.2 casual workers at 3 ▇▇▇▇'▇ Yard none of whom (so far as
the Warrantors are aware) have been continuously employed
by the Company for more than six months
9.2 Full particulars of all subsisting contracts of employment and
service agreements and other terms and conditions and statements
of employment have been disclosed to the Purchaser
9.3 There is not outstanding any claim in respect of dismissal or
redundancy of any employee of the Company
9.4 There has not been any increase in any fees commission emoluments
or payments paid or payable to any officer or servant or agent of
the Company since the Accounts Date
9.5 The Company does not employ any person except only as disclosed as
aforesaid and there are no consultancy agreements or arrangements
with anyone
10. Pension Scheme
The Company is not under any legal or moral liability or obligation or
a party to any ex-gratia arrangement or promise to pay pensions
gratuities superannuation allowances or the like or otherwise to
provide 'relevant benefits' within the meaning of Taxes Act 1988 s 612
to or for any of its past or present officers or employees or their
dependants; and there are no retirement benefit or pension or death
benefit or similar schemes or arrangements in relation to or binding on
the Company or to which the Company contributes
11. Debts
11.1 The Company has no outstanding debts or liabilities (contingent or
otherwise other than trade debts incurred in the ordinary course
of business) contracts or engagements otherwise than as provided
in the Accounts and/or the Management Accounts or disclosed to the
Purchaser
11.2 There are no liabilities of the Company (including contingent
liabilities) incurred since the date of the Management Accounts
which are outstanding on the part of the Company in excess of
$10,000
12. Financial position
12.1 Save for such changes as have arisen in the ordinary course of
business or by reason of fluctuations in market values of
investments or changes in market conditions or disclosed in the
Management Accounts the Vendors have no reason to believe that the
aggregate trading results of the Company as disclosed in the
Accounts have deteriorated since the Accounts Date
12.2 The Company does not have any estate or interest in land other
than the Properties
12.3 So far as the Warrantors are aware and subject to the Company
using reasonable endeavours therefor the debtors of the Company
will meet their obligations in ordinary and due course within the
terms of trade of the Company free from any counterclaim deduction
or set-off
12.4 No expenditure has been incurred by the Company which will not be
wholly deductible against corporation tax
12.5 The Company has at all times been a trading company
12.6 The Company has conducted its trade only in the United Kingdom
12.7 Save for the Subsidiaries the Company has not had at any time any
subsidiary within the meaning of Section 736 of the Companies Act
and has never been a member of any group of companies
12.8 The Company has not been entitled whether as legal or beneficial
owner at any time to any shares in any other company
12.9 The purchase of the Company by the Purchaser will not so far as
the Warrantors are aware cause any person who normally does
business with the Vendor not to continue to do so on substantially
the same basis as previously
13. Capital transactions
The Company has not entered into any capital transactions involving
more than $15,000 in aggregate except as provided in the Management
Accounts or as expressly referred to in this Schedule or as disclosed
to the Purchaser either as vendor or purchaser since the Accounts Date
14. Returns, documents and legislation
All returns particulars resolutions and other documents statutorily
required to be delivered by the Company to the Registrar compliance of
Companies have been duly delivered to such Registrar and the Directors
have kept all statutory registers minutes and records fully and
effectually in accordance with the Companies Act and there are no
omissions therefrom and there has not been any default in connection
with any such documents or records so far as the Warrantors are aware
and the Company has complied with all Acts of Parliament and
legislation thereunder affecting the Company its employees assets and
the business and is not in breach of any provision thereof
15. Notices
There are no outstanding notices served on the Company materially and
adversely affecting its assets or any of them
16. Litigation
16.1 The Company is not engaged in any litigation industrial dispute or
arbitration proceedings except as already disclosed and no
proceedings or prosecutions are pending or threatened and so far
as the Warrantors are aware there are no facts or matter
(including but without limitation Completion) likely to give rise
thereto and the Company is not in default in respect of any
material obligation whether contractual statutory or municipal
16.2 The Company is not the subject of any investigation or enquiry
pending or threatened nor has it given any agreement or
undertaking in connection with any such matter as aforesaid and so
far as the Warrantors are aware the Company is free to carry on
the business without any restriction or adverse claim except only
as applicable generally by statute and has so far as the
Warrantors are aware obtained all licences consents permissions
and agreements relevant to carrying on the business
17. Tax returns
The Company will not submit a draft of any tax return or agree any tax
computation or computation intended to be made or agreed with the
Inland Revenue to the Purchaser before making or submitting the same as
aforesaid and will not make any tax return after the date hereof
without the consent in writing of the Purchaser
18. Disclosures
The Vendors will forthwith disclose in writing to the Purchaser any
matter which may arise and become known to them between the date hereof
and Completion which is inconsistent with any of the warranties or
indemnities contained or referred to in this Agreement and which is
material to be known by a transferee for value of any share in the
Company
TAXATION
19. Provisions
19.1 Full provision or reserve has been made in the Accounts for all
tax liable to be assessed on the Company or for which it is
accountable in respect of income profits or gains earned accrued
or received on or before the Accounts Date or any event giving
rise to taxation on or before the Accounts Date including
distributions made down to such date or provided for in the
Accounts
19.2 Proper provision has been made in the Accounts for deferred
taxation in accordance with current standard accounting practices
and generally accepted accountancy principles
19.3 The Company has not at any time been engaged in any transaction
the main or only purpose of which was the avoidance or reduction
of any liability to tax or could lead to the cancellation of any
tax advantage or could be claimed to be an artificial transaction
for tax purposes
20. Returns
The Company has properly and punctually made all returns (subject to
paragraph 17 of this Schedule) and provided all information required
for tax purposes since incorporation until the Accounts Date as to
which there are no outstanding requirements from the Inland Revenue or
other taxation authority and none of such returns is the subject of any
back dating claim appeal or dispute by the Inland Revenue or any other
authority concerned and the Vendors are not aware that any dispute is
likely
21. Payment of tax
The Company has duly and punctually paid all tax which it has become
liable to pay and is not under any liability to make any reimbursement
or indemnity in respect of any taxation or to pay any penalty or
interest in connection with any claim for tax
22. PAYE
The Company has properly operated the Pay As You Earn system deducting
tax as required by law from all payments to or treated as made to
employees and ex-employees of the Company prior to the date hereof and
accounted to the Inland Revenue for all tax so deducted and all tax
chargeable on benefits provided for persons employed at any time by the
Company
23. Payments under deduction
All payments by the Company to any person which as far the Warrantors
are aware ought to have been made under deduction to tax have been so
made and the Company has (if required by law so to do) accounted to the
Inland Revenue for the tax so deducted
24. Migration
The Company has not without the prior consent of the Treasury entered
into any of the transactions specified in Section 765 of the Taxes Act
or changed its residence whereby it is liable for any charge to tax or
unrealised gains.
25. Group income
25.1 Particulars of any elections made in respect of the Company under
Section 47 of the Taxes Act have been disclosed to the Purchaser
and any such elections are now in force
25.2 The Company has not paid any dividend without advance corporation
tax or made any payment without deduction of income tax in the
circumstances specified in sub-section (4) of that Section
26. Group relief
Particulars of any arrangement and agreements relating to group relief
(as defined by the Taxes Act Section 402) to which the Company is or
has been a party have been disclosed to the Purchaser and the Company
has received all payments due to it under any such arrangement or
agreement for surrender of group relief made by it and any claim for
relief whether for any losses or otherwise or for any allowances as
deductions or repayment has not been and will not be made by any
company which was at any time or is the holding company of or connected
with the Company pursuant to Sections 240 and 402 to 412 of the Taxes
Act or otherwise without limitation so as to affect the Company
27. Surrender of Advance Corporation Tax
There has been disclosed to the Purchaser particulars of all
arrangements and agreements to which the Company is or has been a party
relating to the surrender of advance corporation tax made or received
by the Company under Section 240 of the Taxes Act and:-
27.1 the Company has not paid nor is liable to pay for the benefit of
any advance corporation tax which is or may become incapable of
set-off against the Company's liability to corporation tax and
27.2 the Company has received all payments due to it under such
arrangements or agreements for all surrenders of advance
corporation tax made by it
28. Shortfall
28.1 The Company is not a close investment holding company as defined
by Section 13A of the Taxes Act
28.2 The Company has never received any intimation pursuant to
paragraphs 13 to 17 in Schedule 19 to the Taxes Act that the
Inland Revenue intends to make any apportionments for any
accounting reference period ending on or before the date of the
Accounts and any information and particulars supplied to the
Inland Revenue under the said paragraphs were such as to make full
and accurate disclosure of all facts and considerations material
to be known by the Inland Revenue
29. Base values
If each of the capital assets of the Company were disposed of for a
consideration equal to the book value of that asset in or adopted for
the purpose of the Accounts or the Management Accounts no liability to
corporation tax on chargeable gains or balancing charge in connection
with the Capital ▇▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ or Section 810(4)(b) of the Taxes
Act would arise (and for this purpose there shall be disregarded any
relief and allowances available to the Company other than amounts
falling to be deducted from the considerations receivable under Section
38 of the Gains Tax Act and all capital allowances available to the
Company have or will be made prior to the date hereof and there is no
reason for any such allowances to be reduced postponed or disallowed
30. Roll-over
The Company has not made any claim under Sections 152 to 161 of the
Gains Tax Act and no such claim has been made by any other Company
which affects or could affect the amount or value of the consideration
for the acquisition of any asset by the Company taken into account in
calculating liability to corporation tax on chargeable gains on a subsequent
disposal
31. Depreciatory transactions
No loss which might accrue on the disposal by the Company of any share
in or security of any company is liable to be reduced by virtue of any
depreciatory transaction within the meaning of Sections 280 and 281 of
the Income and Corporation Taxes Act 1970 nor is any expenditure on any
shares or security liable to be reduced under Section 125 of the Gains
Tax Act
32. Straightline growth and chargeable debts
No asset owned by the Company is subject to paragraphs 16 19 20 or 21
in Schedule 2 of the Gains Tax Act and no gain chargeable to
corporation tax will accrue to the Company on the disposal of any debt
owing to the Company not being a debt on a security
33. Chargeable policies
The Company has not acquired benefits under any policy of assurance
otherwise than as original beneficial owner
34. Claims by the company
The Company has not made any claim under any of the following:-
34.1 Section 279 of the Gains Tax Act (assets situated outside the
United Kingdom)
34.2 Section 280 of the Gains Tax Act (tax on chargeable gains payable
by instalments)
34.3 Section 242 of the Taxes Act (surplus franked investment income)
34.4 Section 584 of the Taxes Act (unremittable income arising outside
the United Kingdom)
34.5 Section 24 of the Gains Tax Act (assets of negligible value)
34.6 Section 48 of the Gains Tax Act (contingent consideration becoming
irrecoverable)
and the Company has not made any claim for or received the benefit of
any deduction reduction set-off exemption repayment allowance relief
benefit or payment in respect of any tax under any statutory provision
or other concession without limitation as to the statutory provisions
or any of them mentioned in this Agreement which could or might be
effectively withdrawn postponed restricted or otherwise lost as a
result of any cost omission event or circumstances arising at any time
after Completion and details of all claims for relief as to trading
stock prior to the coming into operation of Section 48 of the Finance
▇▇▇ ▇▇▇▇ have been disclosed to the Purchaser
35. Stamp duty
The Company has not obtained relief from Stamp Duty relief under
Section 55 of the Finance ▇▇▇ ▇▇▇▇ (reconstruction and amalgamations)
or under Section 42 of the Finance ▇▇▇ ▇▇▇▇ (relief between associated
companies) or under paragraph 10 of the 19th Schedule to the Finance
▇▇▇ ▇▇▇▇ or Sections 75 76 and 77 of the Finance ▇▇▇ ▇▇▇▇
36. First business loans etc.
The Company has not expended or applied any sum liable to be regarded
as income available for distribution pursuant to paragraphs 8 or 9 in
Schedule 19 to the Taxes Act and is not bound (contingently or
otherwise) to expend or apply any such sum
37. Tax losses carry forward
There has not been any major change in the business of and the Company
within the meaning of Section 245 or 768 of the Taxes Act
38. Gifts
38.1 The Company has not been engaged in any transaction not being at
arm's length within Section 770 of the Taxes Act or Sections 125
or 282 of the Gains Tax Act and the Company is not liable to be
assessed to corporation tax on chargeable gains or to capital
transfer tax as donor or donee of any gift or transferor or
transferee of value
38.2 The Company has not been a party to associated operations in
relation to a transfer of value within the meaning of Section 268
of the Inheritance Tax ▇▇▇ ▇▇▇▇.
38.3 No asset owned by the Company is liable to be subject to any sale
mortgage or charge by virtue of Section 212(l) of the Inheritance
Tax ▇▇▇ ▇▇▇▇.
38.4 There are no circumstances which could give rise to any claim for
estate duty payable by the Company
39. Intra group transfer
The Company has not acquired any asset (past or present) from any other
company then belonging to the same group of companies as the Company
within the meaning of Section 272 of the Income and Corporation Taxes
Act 1970 as applied in Section 347(5) of the Taxes Act
40. Loans to participators
The Company has not and will not be deemed to have made any loan or
advance to a participator or an associate of a participator so as to
become liable to make any payment under Sections 419 or 422 of the
Taxes Act
41. Distributions
Subject as hereinafter provided no distribution within the meaning of
Sections 209 to 211 or 254 of the Taxes Act has or is deemed to have
been made by the Company except dividends shown in its audited accounts
nor is the Company bound to make any such distribution provided always
that in respect of any qualifying distribution made to the Company
since the Accounts Date and prior to Completion the Company will be
entitled to a full set-off of its corresponding payment of ACT under
either Section 239(l) of the Taxes Act or Section 239(3) thereof
insofar as there is no set-off under the said Section 239(l) or any
such set-off is restricted
42. Payment to employees
The Company has not made any payment to or provided any benefit for any
officer or employee or ex-officer or ex-employee of the Company which
is not allowable as a deduction in calculating the profits of the
Company for taxation purposes and interest has not been paid to any
director or other officer so as to result in any liability under
Section 187 of the Taxes Act
43. National insurance etc.
The Company has paid all national insurance and graduated pension
contributions for which it is liable and has kept proper books and
records relating to the same
44. Value added tax
The Company:-
44.1 has complied with all statutory provisions and regulations
relating to Value Added Tax ▇▇▇ ▇▇▇▇ for which the Company is
liable and has not been required to give any security therefor
44.2 is not and has not been for value added tax purposes a member of a
group of companies
45. Companies stamp duty
The Company has complied with the provisions of the Finance ▇▇▇ ▇▇▇▇
relating to stamp duty and has duly paid all stamp duty which it was
liable to pay
AS TO THE PROPERTIES
46. Title
46.1 The Company has a good and marketable title to each of the
Properties free from all charges encumbrances wayleaves profits a
prendre easements exceptions reservations options and adverse
interests whatsoever and has not agreed to grant or create any
such things as aforesaid save as disclosed in the Disclosure
Letter
46.2 The information relating to the Properties contained in Schedule 5
is true and complete in all respects
47. Leases
47.1 The Company has taken all necessary action to secure the
rights available to it in respect of the Properties under
Part II of the Landlord & ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇
47.2 The Company has paid the rent and observed and performed
the covenants on the part of the tenant and the conditions
contained in any leases (which expressions in this Clause
48 includes underleases) under which the Properties are
held, and the last demand (or receipts for rent if issued)
were unqualified, and all the leases are valid and in full
force
47.3 All licences, consents and approvals required from the
landlords and any superior landlords under any leases of
the Properties have been obtained and the covenants on the
part of the tenant contained in the licences, consents and
approvals have been duly performed and observed
47.4 There are no rent reviews under the leases of the
Properties held by the Company in progress
47.5 No obligation necessary to comply with any notice or other
requirement given by the landlord under any leases of the
Properties is outstanding and unobserved or unperformed
47.6 There is no obligation to reinstate any of the Properties
by removing or dismantling any alteration made to it by
the Company or any predecessor in title to the Company
48. Compliance
Save as disclosed in the Disclosure Letter the Company and every person
in possession or occupation with of the Properties has complied with
all restrictions covenants restrictions agreements stipulations
declarations and conditions affecting the Properties and every part
thereof and the Company is not aware of any breach thereof
49. Possession
The Company has not at any time agreed to part with any estate or
interest or the possession of the Properties or any part thereof and
there are no subsisting claims thereto or any notices affecting the
same with which the Company has not complied and on Completion the
Company will have vacant possession of the whole of the Properties save
as disclosed in the Disclosure Letter
50. Registration of title
The title to the Properties are not registered at HM Land Registry
51. Outgoings
The Properties are not subject to any outgoings monetary claims charges
or liabilities other than non-domestic business and water rates except
as disclosed to the Purchaser
52. User
52.1 The use of each of the Properties is the permitted use under the
Town and Country Planning ▇▇▇ ▇▇▇▇ as amended
52.2 Planning Permission has been obtained or is deemed to have been
granted for the purpose of the Town and Country Planning Act 1990
as amended with respect to the development of the Properties and
no permission has been suspended or called in and no application
for planning permission is awaiting decision
52.3 The Company has complied and is complying with
52.3.1 all permissions orders and regulations applicable to the
Properties
52.3.2 all agreements under Section 106 of the Town and Country
Planning ▇▇▇ ▇▇▇▇
52.4 Consent has been obtained under the Building Regulations for all
works alterations and improvements to the Properties
52.5 All fire regulations local and other bye laws and Section 38 of
the Highways Act 1980 and the Public Health Acts the Factory Acts
and the Offices Shops and Railway Premises Act 1963 have been
fully complied with
52.6 So far as the Warrantors are aware, the Company has complied with,
and the Warrantors are aware of no previous breach of, any
legislation and common law relating to environmental matters,
including (but without limitation):
52.6.1 waste;
52.6.2 contaminated land;
52.6.3 discharges to (i) land (ii) ground and surface water and
(iii) sewers;
52.6.4 emissions to air;
52.6.5 noise;
52.6.6 dangerous, hazardous or toxic substances and materials;
52.6.7 nuisance;
52.6.8 health and safety;
and the Warrantors are not aware of any actions, claims or
proceedings nor have they any other reason to believe that the
Company has any liability in relation to such matters.
53. Listing
There are no buildings on the Properties or any part thereof which are
listed as being of special historic or architectural importance and
none of the Properties are located in a Conservation Area or subject to
any rights of common or affected by any past or present mining
operations
54. Utilities
The buildings and other structures on the Properties are supplied with
gas water electricity and drainage directly to or into mains as the
case may be without crossing any land other than the Properties and so
far as the Warrantors are aware the buildings and all other structures
on the Properties do not include any high alumina cement blue asbestos
calcium chloride accelerator wood wool slabs used as permanent
shuttering or other poisonous or noxious or harmful or deleterious
material
55. Other property
The Company has never been a tenant or licensee of any property
whatsoever or held any interest under any lease or assignment thereof
of an estate or interest in land
SCHEDULE 5
(The Properties)
Premises Date of Term Current Next Current Insurance Repairs
Lease Rent Rent Service
(pounds Reviews Charge
sterling)
(1) Units 21 26.2.1991 11 years 1.12.1993 and As defined Landlord Tenant
& 22 from every third in Lease insures repairs
▇▇▇▇▇▇▇▇ 1.12.1989 anniversary (none Tenant interior and
Priory Mews thereof demanded) reimburses service charge
Kingham in respect of
Oxfordshire external parts
(2) Unit 25 27.4.1995 from 3,000 pa 1.12.1996 and as defined Landlord
and Units 27.4.1995 to (Unit 25) 1.12.1999 in lease insures
7 - 10 30.11.2000 6,000 pa (none Tenant
▇▇▇▇▇▇▇▇ (Units 7- demanded) reimburses
▇▇▇▇▇▇ ▇▇▇▇ ▇▇)
▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇
(3) 3 ▇▇▇▇'▇ 31.5.1994 3 years from none 1,000 per
Yard 13 September annum
▇▇▇▇▇▇ ▇▇▇ 1992
SCHEDULE 6
(Employees)
Date
Name/Location Date of Employ- Annual Benefits
Birth/Age ment Salary
Commenced (British
pounds)
▇▇▇▇▇▇▇▇ Priory ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ 29.09.50 06.04.88 72,000
▇▇▇▇▇▇▇ ▇▇▇▇▇ 21.05.57 18.07.94 3,600
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 02.02.26 18.07.94 Nil
▇▇▇▇▇ ▇▇▇▇▇ 16.06.65 05.05.87 11,115
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 20.03.64 02.01.88 11,115
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 09.10.47 01.08.90 8,951.28
▇▇▇▇ ▇▇▇▇▇▇▇▇ 18.03.54 10.09.90 9,590.88
▇▇▇▇▇ ▇▇▇▇▇▇▇ 20.05.39 08.04.91 11,115
▇▇▇▇▇▇▇ ▇▇▇▇▇ 06.11.90 16.09.91 8,268
▇▇▇ ▇▇▇▇▇▇ 10.08.55 21.09.92 8,268
▇▇▇▇▇▇ ▇▇▇▇▇▇ 06.01.50 02.01.90 11,368.50
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 19.04.43 23.06.88 4,694.52
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ 18.10.43 05.12.91 19,848 27 per week travel allowance
Yu Hongwen 23.05.53 24.08.92 15,714 27 per week travel allowance
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ 19.07.63 05.01.94 15,900
3 ▇▇▇▇'▇ Yard
Yu ▇▇▇ ▇▇▇▇ 53 21.02.92 12,987 36 per week travel allowance
▇▇▇▇▇▇ ▇▇▇▇▇▇ 26 05.01.94 12,250
▇▇▇▇ ▇▇▇▇ 04.01.94 4.24 per hour
▇▇▇▇▇ ▇▇▇▇▇▇▇ 30 06.07.94 4.24per hour
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 23 21.08.94 4.24per hour*
▇▇ ▇▇▇▇▇ 25 19.08.94 6.25 per hour
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ 43 09.95 $42,984
▇▇▇▇▇ ▇▇▇▇▇▇▇ 25 09.95 $21,000
▇▇▇▇▇▇ ▇▇▇▇▇▇ 24 01.96 $21,000
* or 6.25 per hour if working on the second floor of the shop
SCHEDULE 7
(Leasing/Hiring and other Agreements)
Date of Vehicle/ Rental
Agreement Owner/Lessor Equipment (exclusive of
VAT)
28.06.94 Neopost Limited Scare and 353.60 per
Equipment quarter
17.01.95 Anglo Leasing plc Sharp Copier SF2022 513.43 per
plus equipment quarter
05.01.96 Pallas Services Sharp Copier SF2022 1,776.81 per
Limited plus equipment and quarter
bin sorter
27.01.95 Pallas Services Sharp Fax F04800 357 per
Limited quarter
24.04.95 Anglo Leasing plc Bin Sorter 77.82 per
quarter
09.02.94 GE Capital Motor Subaru Inipreza 266.63 /month
Finance Limited Reg. No. L669 TKV including VAT
01.12.94 United Dominions Subaru Legacy 381.28 /month
Trust Limited Reg. No. M496 6HP including VAT
SCHEDULE 8
(Documents in The Agreed Terms)
1. Disclosure Letter
2. Service Agreement
3. Resignations
4. Deed of Adherence
5. Registration Rights Agreement
SCHEDULE 9
(List of Suppliers with whom ▇▇▇▇▇▇▇ ▇▇▇▇▇ deals direct)
Supplier Goods Supplied
Helio Medical Supplies Acupuncture Needles
Gourmet Mushrooms Medicinal Mushrooms
Mycoherb Medicinal Mushrooms
Evergreen Inc Red Algae
SIGNED as a deed and DELIVERED )
)
by the said ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ )
)
in the presence of )
SIGNED as a deed and DELIVERED )
)
by the said ▇▇▇▇▇▇▇ ▇▇▇▇▇ )
)
in the presence of )
SIGNED as a deed and DELIVERED )
)
by the said ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ )
)
▇▇▇▇▇▇▇▇ in the presence of )
SIGNED as a deed and DELIVERED )
)
by the said ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ )
)
in the presence of )
SIGNED as a deed and DELIVERED )
)
by the said ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ )
)
in the presence of )
SIGNED as a deed and DELIVERED )
)
by the said ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ )
)
GALITZINE in the presence of )
SIGNED as a deed and DELIVERED )
)
by the said ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ )
)
in the presence of )
SIGNED as a deed and DELIVERED )
)
by the said ▇▇▇▇▇▇ S )
)
▇▇▇▇▇▇▇▇ in the presence of )
SIGNED as a deed and DELIVERED )
)
by the said ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ )
)
in the presence of )
SIGNED as a deed and DELIVERED )
)
by the said ▇▇▇▇▇ ▇▇▇▇▇ )
)
in the presence of )
SIGNED as a deed and DELIVERED )
)
by the said ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ )
)
in the presence of )
THE COMMON SEAL of EAST WEST )
)
HERBS LIMITED )
)
was hereunto affixed in the )
)
presence of:- )
Director
Secretary
EXECUTED as a Deed by PARACELSIAN )
)
INCORPORATED )
)
acting by its President and Vice-President )