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EXHIBIT 2.4
DATED 14TH AUGUST 1998
(1) ▇▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇
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(2) ROMTECH, INC
AGREEMENT
FOR THE SALE AND PURCHASE OF THE
ENTIRE ISSUED SHARE CAPITAL OF
SOFTWARE PARTNERS PUBLISHING AND DISTRIBUTION LIMITED
EVERSHEDS
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TEL: ▇▇▇▇ ▇▇▇ ▇▇▇▇
FAX: ▇▇▇▇ ▇▇▇ ▇▇▇▇
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REF: AR/36
FINAL VERSION 11.08.98
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CONTENTS
1. Interpretation
2. Sale and purchase
3. Consideration
4. Warranties
5. Tax Covenant
6. Limitation of liability
7. Restrictive covenants
8. Completion
9. Issue of 2nd Tranche of Consideration Shares
10. Orderly Market Provisions
11. Announcements
12. Costs
13. Interest
14. Notices
15. General
SCHEDULE 1 The Vendors
SCHEDULE 2 Details of the Company
SCHEDULE 3 The Property
SCHEDULE 4 Warranties
AGREED FORM DOCUMENTS:
Directors' and Secretary's Resignations
Powers of Attorney (re. voting on shares)
Clean break deeds (clause 8.1.4)
Service Agreements: ▇▇▇▇▇▇▇▇ ▇▇▇▇ and ▇▇▇▇ ▇▇▇▇
Disclosure Letter
An Agreement to acquire Common Stock
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THIS AGREEMENT is made on 14th August 1998
BETWEEN
(1) The persons whose names and addresses are set out in Schedule 1 ("the
Vendors"); and
(2) ROMTECH, INC. a PENNSYLVANIA CORPORATION whose principal place of
business is at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
("the Purchaser")
OPERATIVE CLAUSES
1. INTERPRETATION
In this Agreement:-
1.1 the following expressions have the following meanings unless
inconsistent with the context:-
Expression Meaning
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"the Accounting Date" 31 May 1998
"the Accounts" The audited accounts
of the Company for
the financial year
which ended on the
Accounting Date,
comprising a balance
sheet, a profit and
loss account, notes
and directors' and
auditors' reports
"the Act" The Companies ▇▇▇
▇▇▇▇
"Business Day" Any day (other than
Saturday or Sunday)
on which Clearing
Banks are open for a
full range of
banking
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transactions and on
which banks in the
State of
Pennsylvania are
also open for a full
range of banking
transactions
"Clearing Bank" A bank which is a
member of CHAPS
Clearing Company
Limited
"the Company" Software Partners
Publishing and
Distribution Limited
registered number
2463167, whose
registered office is
at ▇▇▇▇ ▇, ▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
St Ives, ▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇
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"Completion" Completion of the
sale and purchase in
accordance with
clause 8
"Consideration Shares" The shares in the
capital of the
Purchaser to be
allotted pursuant to
clause 3
"Contract" Any agreement or
commitment whether
legally binding or
not
"the Disclosure Letter" The letter in the
agreed form having
the same date as
this Agreement from
the Vendors to the
Purchaser qualifying
the Warranties
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"Environment" Any air (including
air within natural
or man-made
structures above or
below ground); water
(including
territorial, coastal
and inland waters
and ground water and
water in drains and
sewers); and land
(including the
seabed or river bed
under any water),
surface land and
sub-surface land
"Environmental Authorisations" All or any permits,
consents, licences,
approvals,
certificates, and
other authorisations
required under
Environmental Law
and all terms and
conditions thereof
required under any
Environmental Law
for the operation of
the business of the
Company or the state
or use of any land
or premises in
relation to the
business of the
Company
"Environmental Law" All or any Laws
from time to time
with regard to the
pollution or
protection of the
Environment or harm
to or the protection
of human health and
safety or the health
of animals and
plants
"Environmental Liability" Criminal or civil
liability under
Environmental Law or
in relation to any
matter concerning in
any
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way the Environment
"ERA" The Employment
Rights Act 1996
"Event" Any event, fact or
circumstance
whatsoever,
including (but not
limited to) the
earning, receipt or
accrual of any
income, profits or
gains, the sale and
purchase of the
Shares pursuant to
this Agreement and
Completion
"Hazardous Substances" Any matter, whether
alone or in
combination with any
other matter capable
of causing harm to
man or any other
living organism or
damaging to the
Environment or
public health or
welfare, including
without limitation
radioactive matter,
ozone depleting
substances, and
genetically modified
organisms
"the Independent Accountant" The independent
chartered accountant
or firm of chartered
accountants
appointed pursuant
to clause 8.5
"Intellectual Property Rights" Patents, trade
marks, service
marks, registered
designs, design
rights, copyright,
know-how and all
other intellectual
property and any
applications for the
same
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"the July Sales Information" the sales figures
for the month of
July 1998 in the
agreed terms
"the Management Accounts" the unaudited
management accounts
of the Company for
the month ended on
the Management
Accounts Date
"the Management Accounts Date" 30 June 1998
"the Property" The property
specified in
Schedule 3 and each
and every part of
such property
"the Purchaser's UK Solicitors" Eversheds of ▇▇
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"Relief" Any relief,
deduction or credit
available from,
against or in
relation to Taxation
or in the
computation for any
Taxation purpose of
income, profits or
gains
"the Shares" All the issued
shares in the
capital of the
Company
"Stock" Stocks (as defined
in Statement of
Standard Accounting
Practice No. 9
adopted by the
Accounting Standards
Board) of the
Company
"Taxation" (a) Any tax, duty,
impost or levy of
the United Kingdom
or elsewhere
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whether national or
local and
(b) any fine, penalty,
surcharge, interest
or other imposition
relating to any
tax, duty, impost
or levy or to any
account, record,
form, return or
computation
required to be
kept, preserved,
maintained or
submitted for the
purposes of any
tax, duty, impost
or levy
"the Vendors' Solicitors" ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ of
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"the Warranties" The warranties set
out or referred to
in clause 4 and
Schedule 4;
1.2 references to any statutory provisions will be construed as including
references to any earlier or subsequent statutory provisions in force
at any time prior to Completion which they have, or by which they have
been, directly or indirectly amended or replaced;
1.3 all obligations entered into by two or more persons are (unless
otherwise expressly stated) joint and several;
1.4 references to clauses and Schedules are to clauses of and Schedules to
this Agreement, and references to paragraphs are to paragraphs in the
Schedule in which such references appear;
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1.5 the Schedules form part of this Agreement and will have the same effect
as if in the body of this Agreement;
1.6 the headings to clauses and paragraphs (save for headings in Schedules
1, 2 and 3) will not affect its construction;
1.7 where any document is stated as being in the agreed terms, it shall,
unless it is to be entered into contemporaneous with this Agreement be
in a form initialled for and on behalf of the Vendors and the Purchaser
2. SALE AND PURCHASE
2.1 Each of the Vendors will sell with full title guarantee, and the
Purchaser will buy, the number of the Shares specified opposite that
Vendor's name in Schedule 1.
2.2 Each of the Shares will be sold and bought free from any third party
right, and with all rights attached or accruing to it including all
rights to any dividends or other distributions paid after the execution
of this Agreement.
2.3 Each of the Vendors waives any rights of pre-emption over any of the
Shares.
2.4 The Purchaser will not be obliged to purchase any of the Shares unless
the purchase of all the Shares is completed simultaneously.
3. CONSIDERATION
3.1 The consideration for the sale of the Shares will be the issue to the
Vendors of 150,000 shares of unregistered common stock of the
Purchaser, subject to the provision of clauses 9 and 10.
3.2 The Purchaser warrants to the Vendors that the Consideration Shares
will rank equally in all respects (save that they will not be
registered) with the common stock of the Purchaser in issue at
Completion, and shall carry the
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right receive in full all dividends and other distributions declared,
made or paid after Completion.
3.3 The Purchaser undertakes to the Vendors that it shall use its
reasonable endeavours to ensure that (subject to the provisions of
clauses 9 and 10) the Consideration Shares shall be capable of being
dealt in on any stock exchange on which the common stock of the
Purchaser is listed at Completion.
4. WARRANTIES
4.1 The Vendors:-
4.1.1 warrant and represent to the Purchaser in the terms of the
Warranties, provided that the Purchaser will not be entitled
to claim that any fact or combination of facts constitutes a
breach of any of the Warranties to the extent fairly disclosed
in the Disclosure Letter, and agree that the Purchaser is
entering into this Agreement in reliance on each of the
Warranties (none of which will be construed restrictively, by
reference to any other Warranty or term of this Agreement);
4.1.2 will indemnify the Purchaser against any costs or expenses
(including legal costs) which it may incur, either before or
after the commencement of any action, directly or indirectly
as a result of any breach of any of the Warranties;
4.1.3 undertake that, if any claim is made against any of them in
connection with the sale of the Shares to the Purchaser, they
will not make any claim against the Company, or against any
director or employee of the Company, on which or on whom any
of them may have relied before agreeing to any provision of
this Agreement or the Disclosure Letter, but so that this
undertaking will not preclude any Vendor from claiming
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against any other Vendor under any right of contribution to
which such Vendor may be entitled.
4.2 Without restricting the rights of the Purchaser to claim damages on any
basis available to it, the Vendors undertake to the Purchaser that if
there is a breach of any of the Warranties and the value of any asset
of the Company is less, or the amount of any liability of the Company
is greater, than would have been the case in the absence of such
breach, then the Vendors will, forthwith on demand by the Purchaser,
pay to the Purchaser or the Company (as the Purchaser directs) the
amount of such diminution in the value of the asset or (as the case may
be) increase in the amount of the liability ("the Indemnified Amount")
but the Vendors shall be entitled to claim credit against any claim
under this provision for the amount by which they are able to
demonstrate that:-
4.2.1 the value of any current assets of the Company was understated
in the Accounts;
4.2.2 any liability shown in the Accounts has been fully discharged
or satisfied for a lesser amount;
4.2.3 any specific contingency or specific provision made in the
Accounts has been ascertained and proved to have been an over
provision.
4.3 In this Agreement, unless otherwise specified, where any Warranty
refers to the knowledge or awareness of the Vendors (or similar
expression), each Vendor will be deemed to have such knowledge or
awareness as such Vendor would have obtained had such Vendor made all
due and careful enquiries into the subject matter of that Warranty and
the knowledge and awareness of any one of the Vendors shall be imputed
to the remaining Vendors.
5. TAX COVENANT
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5.1 In this clause 5:-
5.1.1 references to Events include Events which are deemed to have
occurred for any Taxation purpose;
5.1.2 references to an Event which occurred on or before Completion
include the combined result of two or more Events, the first
of which occurred on or before Completion;
5.1.3 references to the loss of a Relief include the disallowance of
a Relief and the failure to obtain a Relief; and
5.1.4 references to a payment of Taxation which the Company is
liable to make include any stamp duty which is charged on any
document, or in the case of a document which is outside the
United Kingdom any stamp duty which would be charged on the
document if it were brought into the United Kingdom, which is
necessary to establish the title of the Company to any asset
or in the enforcement or production of which the Company is
interested, and any interest, fine or penalty relating to such
stamp duty.
5.2 Subject to clause 6, the Vendors covenant with the Purchaser to pay to
the Purchaser an amount equal to the amount of:-
5.2.1 any payment of, or in respect of, Taxation which the Company
has made or is liable to make as a result of, or in connection
with, any Event which occurred on or before Completion; and
5.2.2 any payment of Taxation which the Company would have been
liable to make as a result of, or in connection with, any
Event which occurred on or before Completion but for the use
of any Relief or the set-off of any right to repayment of
Taxation; and
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5.2.3 any payment of Taxation which the Company would not have been
liable to make but for the loss of any Relief (including a
Relief surrendered to the Company by another company) as a
result of, or in connection with, any Event which occurred on
or before Completion, on the basis of the rates of Taxation
current at the date of the loss, assuming for this purpose
that the Company had sufficient profits or was otherwise in a
position actually to use the Relief; and
5.2.4 any repayment of Taxation to which the Company would have had
the right but for the loss of such right as a result of, or in
connection with, any Event which occurred on or before
Completion; and
5.2.5 any costs, fees or expenses (including legal costs on a full
indemnity basis) incurred by the Company or the Purchaser in
connection with:-
5.2.5.1 any matter in respect of which the Vendors are or may
be liable under any of clauses 5.2.1 to 5.2.4
(inclusive); or
5.2.5.2 taking or defending any action (including but not
limited to legal proceedings) under this clause 5.
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5.3
5.3.1 Except as required by law all payments by the Vendors
under this clause 5 will be made free and clear of
all deductions and withholdings.
5.3.2 If any deduction or withholding is required to be
made from any payment by the Vendors under this
clause 5 or if (ignoring any available Relief or
right to repayment of Taxation) the Purchaser is
subject to Taxation in respect of any payment by the
Vendors under this clause 5, the Vendors covenant
with the Purchaser to pay to the Purchaser such
additional amount as is necessary to ensure that the
net amount received and retained by the Purchaser
(after taking account of such deduction or
withholding or Taxation) is equal to the amount which
it would have received and retained had the payment
in question not been subject to the deduction or
withholding or Taxation.
5.4 The Vendors shall not be liable under this clause 5 for any
payment of or in respect of Taxation:-
5.4.1 to the extent that either an appropriate provision or
reserve in respect of the liability for Taxation was
made in the Accounts, or the liability was
specifically quantified in the notes to the Accounts,
and specifically referred to in those notes as being
taken into account in making any general provision in
the Accounts;
5.4.2 to the extent that the liability arises as a result
only of the appropriate provision or reserve in the
Accounts being insufficient by reason of any increase
in rates of Taxation or variation in the method of
calculating the rate of Taxation, in either case made
after the date of this Agreement;
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5.4.3 to the extent that the liability would not have
arisen but for the Company being deemed to be
associated with the Purchaser and its group for the
purposes of section 13 of the Income & Corporation
Taxes ▇▇▇ ▇▇▇▇;
5.4.4 for which the Company is or may become liable as a
result of transactions in the ordinary course of its
business after the Accounting Date and before
Completion;
5.4.5 to the extent that it would not have arisen but for
the fact that the treatment of any assets or
liabilities, or of the Taxation attributable to
timing differences in future accounts of the Company
is different from the treatment in the Accounts save
where any changes made to the way the accounts of the
Company are prepared are required to comply with
generally accepted accounting practice for a UK
company at the current at the date of Completion;
5.4.6 to the extent of any recovery by the Purchaser under
the Warranties in respect of the same liability to
Taxation;
5.4.7 which would not have arisen but for a voluntary act,
omission or transaction carried out by the Company
after Completion or occurring after Completion,
otherwise than in the usual course of business, and
which the Purchaser knew or ought reasonably to have
known would cause the Taxation liability in question
to arise.
5.5 The Purchaser shall procure that the Company:-
5.5.1 gives notice within a reasonable period in writing to
the Vendors of any information which comes to its
notice, whereby it appears that the Vendors are or
may become liable under this clause 5; and
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5.5.2 takes such action (at the Vendor's expense) to
contest any claim which could give rise to a
liability under this clause 5 as the Vendors may
reasonably request; provided that the Vendors shall
(if reasonably so requested by the Purchaser or the
Company) provide security to the Purchaser's
reasonable satisfaction in respect of any costs or
expenses which the Company may incur in taking such
action and provided that the Purchaser shall not be
required to take any action which it reasonably
considers to be materially prejudicial to the
business affairs of the Company.
5.6 As between the Vendors (but without affecting the right of the
Purchaser to take action under this clause 5 against the
Vendors) if any liability for Taxation in respect of which the
Vendors are liable under this clause 5 is attributable to any
remuneration paid or benefit provided by the Company to or for
an individual Vendor, the liability shall be borne by the
Vendor in question and he or she shall indemnify the other
Vendors accordingly.
6. LIMITATION OF VENDORS' LIABILITY
6.1 In this clause, "Claim" means a claim for breach of the
Warranties, or a claim under clause 5, or both. The provisions
of this clause 6 shall have effect to limit the Vendors'
liability for any Claim.
6.2 The Vendors shall not be liable in respect of any Claim unless
written notice, containing sufficient information so as to
identify the nature and substance of the Claim) has been given
to the Vendors:-
6.2.1 in the case of any Claim relating to Taxation, the
seventh anniversary of Completion; or
6.2.2 in the case of any Claim relating to Warranties
contained in paragraph 14 of Schedule 4 or paragraph
17.7 of Schedule 4, on or by the date on which the
relevant statute of limitations
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would apply so as to prevent the making of the claim
which would give rise to the breach of the relevant
Warranty;
6.2.3 in the case of any other claim the second anniversary
of Completion;
and any claim for a breach of the Warranties (but not under
clause 5) shall (if it has not been previously satisfied,
settled or withdrawn) be deemed to have been withdrawn six
months after the expiry of the relevant period unless
proceedings in respect of the Claim have been commenced and
served on the Vendors.
6.3 The Vendors shall not be liable for any Claim unless the
total of all Claims exceeds (pound sterling) 15,000 but in
that event the Vendors shall be liable for the total amount
of the Claims and not merely the excess.
6.4 The total liability of the Vendors in respect of all Claims
shall be limited to (pound sterling) 132,026.00
6.5 If the Company has a right of action against any third party
in respect of the subject matter of any Claim, the Purchaser
shall procure that, on discharge or satisfaction of the Claim
by the Vendors, the Company:-
6.5.1 assigns to the Vendors all such rights of action; and
6.5.2 gives to the Vendors (at their expense) all such
assistance as they may reasonably request, to enable
the Vendors to pursue such rights of action against
any relevant third party
save that the Purchaser shall not be obliged to procure that
the Company takes such action as may otherwise be required
under clauses 6.5.1 and 6.5.2 if in the reasonable opinion of
the Purchaser the pursuance of such rights of action against
any relevant third party could have a materially prejudicial
effect on the goodwill of the Company.
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6.6 No Claim may be made against the Vendors to the extent that
the amount of such Claim is recoverable under any policy of
insurance effected by the Company, or would have been
recoverable under a policy of insurance if all the policies of
insurance in force immediately prior to Completion had been
maintained in force after Completion on a no less favourable
basis.
6.7 As between the Vendors (but without affecting the right of the
Purchaser to take action against any or all of the Vendors in
respect of any Claim) liability for any Claim shall be met be
the Vendors in proportion to their respective holdings of the
Shares; and each Vendor shall contribute to any Claim and
indemnify the others Vendors accordingly.
6.8 Notwithstanding any other provision of this Agreement, the
provisions of clauses 6.2 to 6.7 shall not apply to the extent
that any Claim arises by reason by of any fraudulent,
dishonest or wilful mis-statement or fraudulent, dishonest or
wilful omission on behalf of the Vendors or any of them.
7. RESTRICTIVE COVENANTS
7.1 In consideration for the Purchaser agreeing to buy the Shares
each of ▇▇▇▇▇▇▇▇ ▇▇▇▇ and ▇▇▇▇ ▇▇▇▇ severally covenants that
such Vendor will not, without the prior written consent of the
Purchaser, whether directly or indirectly and whether alone or
in conjunction with, or on behalf of, any other person and
whether as principal, shareholder, director, employee, agent,
consultant, partner or otherwise:-
7.1.1 for a period of 18 months from Completion canvass,
solicit or approach, or cause to be canvassed,
solicited or approached, for orders any person who at
any time during the 12 months immediately preceding
the date of Completion is or was negotiating with the
Company for the supply by the Company of goods or
services or is or was a client or customer of the
Company, where the orders relate to goods and/or
services which are competitive with or of the type
supplied by the
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Company at any time during the 12 months immediately
preceding the date of Completion;
7.1.2 for a period of 18 months immediately following
Completion, deal or contract with any person who at
any time during the 12 months immediately preceding
the date of Completion is or was negotiating with the
Company for the supply by the Company of goods or
services or a client or customer of the Company,
where the dealing or contracting relates to goods
and/or services which are competitive with or of the
type supplied by the Company at any time during the
12 months immediately preceding the date of
Completion;
7.1.3 for a period of 18 months immediately following
Completion, interfere, or seek to interfere, with the
continuance of supplies to the Company from any
supplier who has been supplying goods and/or services
to the Company at any time during the 12 months
immediately preceding the date of Completion if such
interference causes or would cause that supplier to
cease supplying, or materially reduce its supply of,
those goods and/or services to the Company;
7.1.4 for a period of 2 years immediately following
Completion, solicit or entice, or endeavour to
solicit or entice, away from the Company, or employ,
any person employed in a managerial, supervisory,
technical or sales capacity by, or who is or was a
consultant to, the Company at Completion or at any
time during the period of 1 month immediately
preceding the date of Completion;
7.1.5 for a period of 18 months and within the United
Kingdom immediately following Completion be engaged,
concerned or interested in any business which
supplies goods and/or services
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which are competitive with or of the type supplied by
the Company;
7.1.6 use in connection with any business any name which
includes the name of the Company or any colourable
imitation of it where such use infringes the goodwill
as at the date of this Agreement of the Company.
7.2 Further in consideration for the Purchaser agreeing to buy the
Shares, each of the Vendors severally covenants that such
Vendor will not, without the prior written consent of the
Purchaser, whether directly or indirectly and whether for
his/her own benefit or for the benefit of any other person at
any time after Completion make use of, disclose or cause
unauthorised disclosure to any person (except those authorised
by the Purchaser in writing to know), any secret or
confidential information relating to the Company which
includes confidential or secret information relating to the
trade secrets, know-how, ideas, business methods, finances,
prices, business plans, marketing plans, development plans,
manpower plans, sales targets, sales statistics, customer
lists, customer relationships, computer systems or computer
software.
7.3 The parties agree that each of the undertakings set out in
this clause 7 is separate and severable and, if any of such
undertakings or part of an undertaking is held to be against
the public interest or unlawful, the remaining undertakings or
part of the undertaking will continue in full force.
7.4 If this Agreement or any wider arrangement of which it forms
part constitutes an agreement, particulars of which are
required to be furnished to the Director General of Fair
Trading pursuant section 24 of the Restrictive Trade Practices
▇▇▇ ▇▇▇▇, then none of the parties shall give effect to or
enforce or purport to enforce any restriction by virtue of
which the Agreement (or wider arrangement) is subject to
registration until the day
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after relevant particulars have been duly furnished in
accordance with section 24 of that Act.
8. COMPLETION
The sale and purchase of the Shares will be completed at the offices of
the Purchaser's UK Solicitors immediately, when:-
8.1 the Vendors will deliver to the Purchaser:-
8.1.1 duly executed transfers of the Shares in favour of
the Purchaser (or as it will direct) together with
all relevant share certificates;
8.1.2 written resignations from ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ as a
director and ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ as the secretary of the
Company in the agreed terms;
8.1.3 a deed in the agreed terms acknowledging that neither
such Vendor nor any such spouse, child or company
controlled by such Vendor (as control is defined in
section 840, ICTA) has any claim against the Company
except as may be expressly disclosed in such deed and
that there is no agreement or arrangement under which
the Company has any actual, contingent or prospective
obligation (including, but not limited to, any
obligation under any guarantee entered into by the
Company) to such Vendor, spouse, child or controlled
company;
8.1.4 the certificate of incorporation, any certificate(s)
of incorporation on change of name, the common seal
and the statutory books and registers (all entered up
to date) of the Company;
8.1.5 all deeds and documents relating to the title of the
Company to the Property;
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8.1.6 all cheque books in current use of the Company;
8.1.7 bank statements in respect of each account of the
Company as at the close of business on the last
Business Day prior to Completion, together in each
case with a reconciliation statement to show the
position at Completion (listing unpresented cheques
drawn or received by the Company and standing orders
payable since the date of such bank statements);
8.1.8 all licences, certificates or other documents
previously specified by the Purchaser;
8.1.9 all keys, credit cards and other property (if any) of
the Company which are under the control of any person
who resigns as an officer of the Company in
accordance with this clause 8;
8.1.10 duly executed powers of attorney in the agreed terms;
8.1.11 an agreement to acquire Common Stock in the agreed
terms entered into by each of the Vendors relating to
the Consideration Shares;
8.2 each Vendor will repay, and will procure that any spouse or
child of such Vendor or any company of which such Vendor
(and/or any such spouse or child) has control (as defined in
section 840 Income and Corporation Taxes Act 1988) will repay,
all amounts owed by him, her or it to the Company, whether due
for payment or not;
8.3 the Vendors will procure that duly convened meetings are held
at which:-
8.3.1 the transfers referred to in clause 8.1.1 (subject to
stamping) are approved for registration in the books
of the Company;
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8.3.2 any persons nominated by the Purchaser are appointed
as additional directors and as secretary of the
Company; and
8.3.3 all existing instructions to the bankers of the
Company are revoked and new instructions given to
such bankers as the Purchaser may nominate, in such
form as the Purchaser directs;
8.4 ▇▇▇▇▇▇▇▇ ▇▇▇▇ and ▇▇▇▇ ▇▇▇▇ will enter into service agreements
with the Company in the agreed terms; and
8.5 the Purchaser will issue to each Vendor the number of
Consideration Shares set opposite that Vendor's name under the
heading "Tranche 1" in Schedule 1; and deliver to each Vendor
the relevant documents of title to such Consideration Shares.
9. ISSUE OF 2ND TRANCHE OF CONSIDERATION SHARES
9.1 Subject to the provisions of clause 9.2, the Purchaser shall
on the next Business Day falling after 90 days from Completion
("the Second Tranche Date") issue to the Vendors the number of
the Consideration Shares set opposite that Vendor's name under
the heading "Tranche 2" in Schedule 1 and deliver to each
Vendor the relevant documents of title to those Consideration
Shares.
9.2 Without prejudice to any other rights or remedies which the
Purchaser may have pursuant to any provision of this Agreement
or otherwise, in the event that the Purchaser discovers a
breach of the Warranties or the existence of a claim under
clause 5 prior to the Second Tranche Date then the number of
Consideration Shares which would otherwise fall to be issued
on the Second Tranche Date to the Vendors shall be reduced (on
a pro-rata basis) by such number as the Purchaser reasonably
believes to be equal in value to (in the case of an alleged
breach of the Warranties) the Indemnified Amount (as referred
to in clause 4.2) or (in the case of a claim under clause 5)
the value of the claim (assuming, for the purposes of this
clause, a value of (pound sterling) 0.88 per
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25
Consideration Share) and the Purchaser shall as soon as
practicable following the Second Tranche Date notify the
Vendors of the fact that it has withheld such Consideration
Shares specifying is reasonable detail the matter in respect
of which it believes has given rise to the alleged breach of
the Warranties or existence of a claim under clause 5. For the
avoidance of doubt, if the Purchaser reasonably believes that
the value of the Indemnified Amount or the value of the claim
under clause 5 exceeds the value of the Consideration Shares
which would otherwise fall to be issued on the Second Tranche
Date, then the Purchaser shall be entitled to withhold all
such Consideration Shares.
9.3 Without prejudice to any other rights or remedies which the
Purchaser may have pursuant to any other provisions of this
Agreement or otherwise, the number of Consideration Shares
which would otherwise fall to be issued on the Second Tranche
Date to the Vendors shall be reduced (on a pro-rata basis) by
such number as is equal (assuming, for the purposes of this
clause, a value of (pound sterling) 0.88 per Consideration
Share) to the value of any debts owing to the Company as at
Completion but which remain outstanding as at the Second
Tranche Date ("the Uncollected Debts") provided that:-
9.3.1 for the avoidance of doubt, if the value of the
Uncollected Debts exceeds the value of the
Consideration Shares which would otherwise fall to be
issued on the Second Tranche Date then the Purchaser
shall be entitled to withhold all such Consideration
Shares; and
9.3.2 for the avoidance of doubt, the Purchaser shall only
be entitled to being a warranty claim against the
Vendors pursuant to paragraph 5 of Schedule 4 to the
extent that it has not withheld Consideration Shares
which would otherwise fall to be issued on the Second
Tranche Date under this clause 9.3.
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9.4 If the Vendors believe that the Purchaser has in contravention
to clauses 9.2 or 9.3 withheld Consideration Shares which
would otherwise fall to be issued on the Second Tranche Date
acted then they shall within 14 days of the Second Tranche
Date serve notice on the Purchaser specifying that fact, and
setting out in reasonable detail its reasons for believing
that the Purchaser has so acted in contravention of clause 9.2
or 9.3.
9.5 Upon receipt by the Purchaser of a notice served by the
Vendors pursuant to clause 9.4 the Vendors and the Purchaser
shall for a period of 14 days endeavour to reach agreement on
whether the Purchaser was justified in withholding
Consideration Shares and, if so, the number of Consideration
Shares which it was justified in withholding. If the Vendors
and the Purchaser are unable so to agree within the aforesaid
period of 14 days then the matter shall be submitted to an
independent chartered accountant or firm of chartered
accountants mutually acceptable to the Vendors and the
Purchaser or in default of agreement between them within 7
days to be selected at the instance of either of them by the
President for the time being of the Institute of Chartered
Accountants in England and Wales. Such submission shall be in
the form of written statements of position by the Vendors and
the Purchaser as well as an opportunity to respond to such
written statements and any request for statements or
information from the Independent Accountant. The Vendor and
the Purchaser shall co-operate to procure that the Independent
Accountant is able to reach its decision as to whether the
Purchaser was justified in withholding Consideration Shares
and if so, how many.
9.6 If at any time after the Second Tranche Date:-
9.6.1 the Independent Accountant so determines; or
9.6.2 any Uncollected Debt has been collected; or
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9.6.3 the Purchaser's claim for breach of the Warranties or
under clause 5 has been quantified and found to be
less than the value of the Consideration Shares
withheld from the Vendors
the Purchaser shall immediately issue the appropriate number
of Consideration Shares to the Vendors, and deliver to them
the relevant documents of title.
9.7 The Purchaser shall procure that the Company shall take all
reasonable and proper steps in the ordinary course of business
(without resort to taking legal action) to collect any
Uncollected Debts.
9.8 If as a result of any claim for breach of the Warranties
and/or under clause 5 and/or under clause 9.2 any
Consideration Shares are permanently withheld (and, for the
purposes of this clause, Consideration Shares shall be deemed
to have been permanently withheld if not issued to the Vendors
prior to 31 March 1999 unless at that date a submission has
been made to the Independent Accountant pursuant to Clause 9.5
or the Independent Accountant has not made a decision, in
which case, Consideration Shares shall (if relevant) be deemed
to have been permanently withheld at such later date as the
Independent Accountant makes a decision) and not issued to the
Vendors, such withholding shall be treated as a reduction in
the purchase consideration for the Shares.
10. ORDERLY MARKET PROVISIONS
10.1 Each Vendor hereby agrees with and undertakes to the
Purchasers as follows:-
10.1.1 He or she will not offer to sell, sell or otherwise
dispose of any of the Consideration Shares for a
period of 12 months following Completion ("the First
Period");
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10.1.2 He or she will not offer to sell, sell or otherwise
dispose of more than 33% of the Consideration Shares
issued to him or her for a period of 6 months
immediately following the expiry of the First Period
("the Second Period");
10.1.3 He or she will not offer to sell, sell or otherwise
dispose of more than 33% of the Consideration Shares
issue to him or her for a period of 6 months
immediately following the expiry of the Second Period
("the Third Period"). 10.2 Each Vendors may,
following the expiry of the Third Period sell or
otherwise dispose of any Consideration Shares held by
him or her.
10.2 Each Vendors may, following the expiry of the Third period
sell or otherwise dispose of any Consideration Shares held by
him or her.
11. ANNOUNCEMENTS
No announcement concerning the transactions contemplated by this
Agreement will (save as required by law or any recognised investment
exchange ) be made by the Vendors except with the prior written
approval of the Purchaser or by the Purchaser except with the prior
written approval of any of the Vendors.
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12. COSTS
Each party to this Agreement will bear their own costs and expenses
relating to this Agreement, except where otherwise expressly stated
save that the Purchaser shall pay the Vendors' reasonable legal and
accounts and expenses, subject to an aggregate maximum amount of (pound
sterling) 8000 (inclusive of VAT).
13. INTEREST
If any Vendor becomes liable to pay any sum pursuant to this Agreement,
whether by way of damages or otherwise, and fails to pay such sum
within 10 Business Days of its becoming payable such Vendor will be
liable to pay interest on such sum from the due date for payment at the
annual rate of 4 per cent above the base lending rate from time to time
of National Westminster Bank plc, accruing on a daily basis until
payment is made, whether before or after any judgement.
14. NOTICES
14.1 Any demand, notice or other communication in connection with
this Agreement will be in writing and will, if otherwise given
or made in accordance with this clause 14, be deemed to have
been duly given or made as follows:-
14.1.1 if sent within the United Kingdom by prepaid first
class post to an address in the United Kingdom, on
the second Business Day after the date of posting; or
14.1.2 if sent from the United States of America to an
address within the United Kingdom by prepaid airmail,
on the sixth Business Day after the date of posting;
or
14.1.3 if sent from the United Kingdom to an address within
the United States of America by prepaid airmail, on
the sixth Business Day after the date of posting; or
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30
14.1.4 if delivered by hand, upon delivery at the address
provided for in this clause 14; or
14.1.5 if sent by facsimile, on the day of transmission
provided that a confirmatory copy is, on the same
Business Day that the facsimile is transmitted, sent
by pre-paid first class post in the manner provided
for in this clause 14,
provided that, if it is delivered by hand or sent by facsimile
on a day which is not a Business Day or after 4 p.m. on a
Business Day, it will instead be deemed given or made on the
next Business Day.
14.2 Any such demand, notice or other communication will, in the
case of service by post or delivery by hand, be addressed to
the recipient at the recipient's address stated in this
Agreement or such other address as may from time to time be
notified in writing by the recipient to the sender as being
the recipient's address for service and will, in the case of
service by facsimile, be sent using a facsimile number then
used by the recipient, provided that if given or made to the
Vendors' Solicitors, it will be treated as validly given or
made to all of the Vendors.
15. GENERAL
15.1 This Agreement will be binding on and enure for the benefit of
each party's successors, assigns and personal representatives.
15.2 Except insofar as they have been fully performed at
Completion, the provisions of this Agreement will continue in
full force and effect notwithstanding Completion.
15.3 The parties will do anything which may be required on or after
Completion to vest in the Purchaser legal and beneficial
ownership of the Shares and otherwise to give effect to the
terms of this Agreement.
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15.4 Failure or delay by any party in exercising any right or
remedy under this Agreement will not operate as a waiver of
it.
15.5 Any waiver of any breach of this Agreement will not be deemed
a waiver of any subsequent breach and will in no way affect
the other terms of this Agreement.
15.6 The formation, existence, construction, performance, validity
and all aspects whatsoever of this Agreement or of any term of
this Agreement (including, but not limited to, quantum of
damage for breach) shall be governed by English law. The
parties agree that, on the balance of convenience the English
Courts shall have exclusive jurisdiction to settle any
disputes which may arise out of or in connection with this
Agreement.
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SCHEDULE 1
THE VENDORS
NAME AND ADDRESS NUMBER OF ORDINARY SHARES OF FIRST TRANCHE SECOND TRANCHE
(POUND STERLING) 1 IN THE CAPITAL OF OF
OF THE COMPANY TO BE SOLD CONSIDERATION SHARES CONSIDERATION
SHARES
▇▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇ 6,050 81,675 9,075
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇ 1,000 13,500 1,500
▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇
▇▇▇▇▇
▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇ ▇ ▇▇▇▇ 1,000 13,500 1,500
Cambria House
127 Station Road
Walboys
Huntingdon
Cambs
PE17 2TH
▇▇▇▇ ▇▇▇▇ 950 12,825 1,425
▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇
▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ 1,000 13,500 1,500
▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇
▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇
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TOTAL 10,000 135,000 15,000
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SCHEDULE 2
DETAILS OF THE COMPANY
Name of Company : Software Partners Publishing and
Distribution Limited
Registered number : 2463167
Registered office : ▇▇▇▇ ▇, ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, St Ives, Huntingdon,
Cambridgeshire PE17 4LF
Date of incorporation : 25 January 1990
Place of incorporation : England and Wales
Status of Company : private limited company
Authorised share capital : (pound sterling) 25,000 divided into 25,000
ordinary shares of (pound sterling) 1 each
Issued share capital : (pound sterling) 10,000 divided into 10,000
ordinary shares of (pound sterling) 1 each
Directors' full names : ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇
Secretary's full name : ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Accounting reference date : 31 May
Auditors : ▇▇▇▇▇▇, Chartered Accountants, ▇▇ ▇▇▇▇▇▇▇
▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
Description of business : Software Consultancy and Supply
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SCHEDULE 3
THE PROPERTY
Short particulars of the Property (stating whether freehold or leasehold; in the
case of leasehold, giving brief details of the lease; and including short
particulars of any tenancy or licence affecting the title)
Property: ▇▇▇▇ ▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇, ▇▇ Ives,
Huntingdon, Cambridgeshire
Use: Warehouse and offices
Tenure: Leasehold, held on a lease dated 8 May 1997 made between (1)
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ and (2) the Company
for a term of 10 years from 8 May 1997.
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SCHEDULE 4
WARRANTIES
1. SCHEDULES 1 & 2; CAPITAL
1.1 The information contained in Schedules 1 and 2 is true and
complete in all respects.
1.2 The Shares are in issue fully paid and are beneficially owned
and registered as set out in Schedule 1 free from any third
party right.
1.3 No Contract has been entered into which requires or may
require the Company to allot or issue any share or loan
capital.
1.4 The Company has no interest in the share capital of any body
corporate.
2. INFORMATION SUPPLIED TO THE PURCHASER
2.1 The information given in the Disclosure Letter is true in all
respects and is not misleading because of any omission or
ambiguity.
2.2 The July Sales Information has been honestly prepared and is
true in all material respects.
3. THE ACCOUNTS AND THE MANAGEMENT ACCOUNTS
3.1 The Accounts:-
3.1.1 comply with the requirements of the Act and have been
prepared in accordance with all applicable accounting
standards (as that term is defined in section 256 of
the Act) and (to the extent that none are applicable)
with accounting principles and practices generally
accepted in the United Kingdom;
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3.1.2 have been prepared on bases and principles which are
consistent with those used in the preparation of the
audited statutory accounts of the Company for the
three financial years immediately preceding that
which ended on the Accounting Date;
3.1.3 show a true and fair view of the assets and
liabilities (including contingent, unquantified and
disputed liabilities) of the Company and of the state
of affairs of the Company as at the Accounting Date
and of the results of the Company for the financial
year ended on that date; and
3.1.4 are not affected (except as disclosed in the
Accounts) by any extraordinary or exceptional item.
3.2 The Management Accounts (a true copy of which is enclosed with
the Disclosure Letter):-
3.2.1 have been honestly prepared and on bases consistent
with those used in the preparation of the Company's
management accounts for the year ended on the
Accounting Date; and
3.2.2 show with reasonable accuracy the assets and
liabilities of the Company as at the Management
Accounts Date, and give a reasonably accurate view of
its income and expenditure during the year ended on
that date.
3.3 The accounting records of the Company are up to date and
contain complete and accurate details of all transactions of
the Company and comply with the provisions of sections 221 and
222 of the Act.
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ASSETS
4. UNENCUMBERED TITLE; POSSESSION
Each asset reflected in the Accounts (save for current assets disposed
of by the Company in the ordinary course of its business since the
Accounting Date) and each asset treated as an asset of the Company
and/or used by the Company at the date of this Agreement:-
4.1 is in the legal and beneficial ownership of the Company, free
from any third party right and from any Contract to grant the
same;
4.2 is situated at the Property; and
4.3 is not to any extent surplus to requirements.
5. DEBTORS
The Company has not factored or discounted any debt or agreed to do so.
All of the debts which are reflected in the Accounts as owing to the
Company (apart from bad and doubtful debts to the extent to which they
have been provided for in the Accounts) or which have subsequently been
recorded in the books of the Company have realised or will realise in
the normal course of collection and within three months of Completion
their full value as included in the Accounts or in the books of the
Company, and no such debt nor any part of it has been outstanding for
more than two months from its due date for payment.
6. STOCK
The Stock now held by the Company and not written off in the Accounts:-
6.1 is not obsolete, slow moving or likely to realise less than
its book value; and
6.2 so far as the Vendors are aware is fit for its intended
purpose and of satisfactory quality and accords with any other
representation or contractual
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term, express or implied, which has been given, or which would
in the normal course of its business be given, by the Company
in respect of it.
7. PLANT ETC.
The plant and machinery, vehicles, fixtures and fittings, furniture,
tools and other equipment used in connection with the business of the
Company have (where appropriate) been regularly serviced and maintained
and the Vendors are not aware that any such plant and machinery,
vehicles, fixtures and fittings, furniture, tools and other equipment
is not in a good and safe state of repair and condition and in
satisfactory working order.
8. PROPERTY
8.1 The particulars of the Property shown in Schedule 3 are
complete and correct. The use of the Property for the purpose
stated in Schedule 3 corresponds to the use to which it is in
fact put.
8.2 The Company has a good and marketable title to the Property
for the estate or interest stated in Schedule 3, free from any
defects, and has in its possession, or under its control, all
duly stamped deeds and documents necessary to prove title to
the Property.
8.3 The Company does not own, occupy or use any property other
than the Property.
8.4 The Company's interest in the Property is not affected by any
of the following:-
8.4.1 any easement, covenant, restriction, agreement or
other third party right;
8.4.2 any notice, order, proposal, dispute or complaint
relating to it or its present use; or
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40
8.4.3 outgoings (other than uniform business rates, water
charges utilities, and insurance premiums) whether or
not periodically recurring, and whether payable by
the owner or occupier of the Property.
8.5 There are no subsisting allegations of a breach of any
obligations, restrictions, conditions and covenants in any
lease relating to the Property or its present use.
8.6 The use of the Property for the purpose stated in Schedule 3
is the permitted user under the provisions of all relevant
legislation and regulations made under it and all
restrictions, conditions and covenants imposed by or pursuant
to such legislation have been observed and performed.
8.7 The replies given by the Vendors' Solicitors to the
Purchaser's Solicitors written enquiries concerning the
Property are complete and correct in all respects.
9. INTELLECTUAL PROPERTY
9.1 The Company has no interest in any Intellectual Property
Rights (whether registered or not) save for the Intellectual
Property Rights details of which are given in the Disclosure
Letter, all of which are (where applicable) registered in the
name of the Company and are beneficially owned by it.
9.2 The processes employed and the products and services dealt in
by the Company do not use, embody or infringe any Intellectual
Property Rights (whether registered or not) vested in any
other party and do not give rise (contingently or otherwise)
to payment by the Company of any royalty or of any sum.
9.3 The Company is not passing off any part of its business as and
for the business of any other person and, so far as the
Vendors are aware, no person is passing off its business as
and for any part of the Company's business.
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10. MILLENNIUM AND EURO COMPLIANCE
The Company's computer systems and other equipment will not require any
remedial work and/or replacement to enable any part of them:
10.1 to continue functioning satisfactorily and accurately
notwithstanding the change in year digits caused by the
beginning of the year 2000, either before, during or after 1
January 2000; or
10.2 to be capable of converting sterling into Euro (meaning the
single European currency) and vice versa on and after 1
January 1999.
11. REMUNERATION AND EMPLOYEES
11.1 Full particulars of the identities, dates of commencement of
employment (or appointment to office) and terms and conditions
of employment (including remuneration and any bonus,
commission or profit sharing arrangement) of all the employees
and officers of the Company are accurately set out in the
Disclosure Letter.
11.2 Since the Accounting Date, no change has been made in the
terms of employment of any of the Company's employees (and
there is no Contract to make any such change), and no employee
has been engaged by the Company; and during the three months
ending on the date of this Agreement no employee has ceased
(or given or received notice to cease) to be so employed.
11.3 There are no amounts owing to any present or former officers
or employees of the Company, and none of them is entitled to
accrued holiday pay other than in respect of the Company's
current holiday year.
11.4 There is no person previously employed by the Company who now
has or may have a right to return to work or a right to be
reinstated or re-engaged by the Company under the provisions
of the Employment Rights ▇▇▇ ▇▇▇▇.
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42
11.5 The Company has maintained adequate and suitable records
regarding the service of each of its employees and complied
with all agreements for the time being relating to them.
12. PENSIONS
12.1 There is not in existence, and no proposal has been announced
to establish, any retirement, death or disability benefit
scheme or obligation to present or former officers or
employees or their dependants pursuant to which the Company is
or may become liable to make payments.
12.2 The Company is not under any legal or moral obligation or
ex-gratia arrangement to pay pensions, gratuities or the like
to present or former officers or employees or their
dependants.
13. INSURANCE
13.1 All assets of the Company of an insurable nature are, and have
at all material times been, insured in amounts equal to their
full replacement or reinstatement value against fire and other
risks normally insured against by persons carrying on the same
classes of business as the Company and the Company is, and has
at all material times been, covered against employer's
liability, public liability, product liability and
professional indemnity liability.
13.2 All premiums due in relation to the Company's insurances have
been paid, and nothing has been done or omitted to be done
which would make any such insurances void or voidable or which
is likely to result in an increase in premium or which would
release any insurer from any of its obligations.
13.3 There is no insurance claim pending or outstanding and, as far
as the Vendors are aware, there are no circumstances likely to
give rise to any such claim.
13.4 Full particulars of all the Company's insurances are set out
in or enclosed with the Disclosure Letter.
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14. ENVIRONMENTAL MATTERS
14.1 ENVIRONMENTAL AUTHORISATIONS
To the best of the Vendors' knowledge information and belief,
the Company does not require any Environmental Authorisations
to carry on its business as now carried on.
14.2 COMPLIANCE WITH ENVIRONMENTAL LAW
14.2.1 So far as the Vendors are aware, the Company and its
officers agents and employees (where the Company
could be held liable for their actions) comply and
have at all times complied with Environmental Law.
14.2.2 The Company has not received any communication in any
form from any relevant authority from which it
appears that it may be or is alleged to be in breach
of any Environmental Law, or failure to comply with
which could constitute a breach of any Environmental
Law, or compliance with which could be secured by
further proceedings. There are no circumstances known
to the Vendors which might give rise to such a
communication being received and the Vendors are not
aware of any intention on the part of any such
authority to give such notice.
14.2.3 The Company has not received any communication in any
form whereby it appears that any proceedings or other
action, claim or investigation are or have been in
existence or pending or threatened against the
Company arising from or in relation to any
Environmental Authorisations or otherwise concerning
Environmental Law.
14.3 LIABILITY
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14.3.1 There are no facts or circumstances known to the
Vendors which may give rise to any actual or
potential Environmental Liability on the part of the
Company.
14.3.2 The Company has not received any notice or intimation
of any complaint or claim from any person in respect
of any matter concerning the Environment.
14.3.3 The Company is not and has not been engaged in any
action, litigation, arbitration or dispute resolution
proceedings relating to or concerning any actual or
potential Environmental Liability and the Vendors are
not aware of any such matters pending or being
threatened or of any circumstances or facts likely to
give rise to any such matters.
14.3.4 The Company is not and has not been subject to any
injunction or similar remedy or order by a court of
competent jurisdiction, or to any undertaking given
to such court in respect of any matters relating to
or concerning the Environment.
14.4 CONTAMINATION OF LAND
14.4.1 To the best of the Vendors' knowledge, and belief,
the Company has not contaminated any sites now or
formerly owned or occupied by the Company are free
from any Hazardous Substances which could give rise
(whether on the relevant site or elsewhere) to any
actual or potential Environmental Liability.
14.4.2 So far as the Vendors are aware, there are no
circumstances which may require expenditure (whether
by the Company or by any other person or authority)
in cleaning up or decontaminating or otherwise on any
sites now or formerly owned or occupied by the
Company in order to comply with
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Environmental Law or otherwise for the protection of
the Environment.
14.5 ENVIRONMENTAL INFORMATION
14.5.1 The Company has at all times properly supplied to the
competent authorities such information required by
Environmental Law to be supplied; all such
information given (whether under a legal obligation
or otherwise) was correct at the time the information
was supplied and all information contained on public
registers relating to such matters is correct.
14.5.2 The replies by the Vendors to the Environmental
Questionnaire dated 28 July 1998 are true complete
and accurate in all respects and there are attached
to such replies complete copies of all documents
referred to in such replies.
14.5.3 Full details of any remedial work carried out at any
sites now or formerly owned or occupied by the
Company and of any environmental assessment, audit,
review or investigation conducted by or on behalf of
the Company or otherwise in relation to any such
sites are contained in or annexed to the Disclosure
Letter.
15. TAXATION
15.1 All notices, returns, computations, registrations and payments
which should have been made by the Company for any Taxation
purpose have been made within the requisite periods and are
up-to-date, correct and on a proper basis and none of them is,
or is likely to be, the subject of any dispute with any
Taxation authority.
15.2 The Company has duly and properly made all Taxation claims,
disclaimers, elections and surrenders and given all notices
and consents and done all
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other things in respect of Taxation the making, giving or
doing of which was assumed to have been made for the purposes
of the balance sheet comprised in the Accounts.
15.3 The Company maintains complete, correct and up-to-date records
which are necessary for all Taxation purposes.
15.4 The Company is not involved in any dispute with any Taxation
authority concerning any matter likely to affect in any way
the liability of the Company to Taxation and there are no
circumstances known to the Vendors which are likely to give
rise to any such dispute.
15.5 The Company has not entered into or been a party to any
scheme, arrangement or transaction designed partly or wholly
or containing steps or stages designed partly or wholly for
the purpose of avoiding or deferring Taxation or reducing a
liability to Taxation.
15.6 If each of the capital assets of the Company owned at the
Accounting Date was disposed of for a consideration equal to
the book value of that asset in, or adopted for the purpose
of, the balance sheet comprised in the Accounts or, in the
case of assets acquired since the Accounting Date, equal to
the consideration given on acquisition, no liability to
corporation tax on chargeable gains or balancing charge under
the Capital Allowances Act 1990 would arise (and for this
purpose there will be disregarded any relief available to the
Company other than amounts falling to be deducted from the
consideration receivable under section 38 Taxation of
Chargeable Gains Act 1992).
15.7 Since the Accounting Date no event has occurred outside the
ordinary course of business of the Company which has given
rise or will or may give rise to any liability to Taxation on
the Company.
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15.8 The Company has no interest in any asset to which Part XV
Value Added Tax Regulations 1995 applies and has not made any
election under paragraph 2(1) Schedule 10 Value Added Tax ▇▇▇
▇▇▇▇.
16. FINANCING AND WORKING CAPITAL
16.1 Full and accurate details of all overdrafts, loans or other
financial facilities outstanding or available to the Company
are contained in the Disclosure Letter, and no person who
provides any such facility has given any indication that it
may be withdrawn or its terms altered.
16.2 The details contained in the Disclosure Letter of the credit
or debit balances on all the bank or deposit accounts of the
Company were correct at the date stated in the Disclosure
Letter and since such date there have been no payments out of
any such accounts except for routine payments and the balances
on such accounts are not now substantially different from the
balances shown in the Disclosure Letter.
16.3 The Company has, since the Accounting Date, paid its creditors
in accordance with their respective credit terms.
16.4 Having regard to existing bank and other facilities the
Company has sufficient working capital to enable it to perform
in accordance with their terms all Contracts which have been
entered into by it.
17. MATERIAL CONTRACTS
The Company is not, and has not since the Accounting Date been, a party
to or subject to any Contract which:-
17.1 involves agency, distributorship, franchising, partnership,
joint venture, consortium, or similar arrangements;
17.2 involves hire purchase, conditional sale, credit sale,
leasing, hiring or similar arrangements;
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17.3 commits the Company to capital expenditure;
17.4 is incapable of complete performance in accordance with its
terms within six months after the date on which it was entered
into;
17.5 is for the supply of goods and/or services by or to the
Company on terms under which retrospective or future discounts
or other financial incentives are given by or to the Company
dependent on the level of purchases or any other factor;
17.6 involves warranties, indemnities or representations given in
connection with a sale of shares or assets, or is a guarantee
or indemnity in respect of the obligations of a third party,
under which any liability or contingent liability is
outstanding;
17.7 involves the Company in any residual liability in respect of
any leasehold property at any time assigned or otherwise
disposed of by it;
17.8 is not on arm's length terms or is in any way not in the
ordinary and proper course of the Company's business; or
17.9 is with or for the benefit of any Vendor or a person connected
(within the meaning of section 839 Income and Corporation
Taxes Act 1988) with any Vendor.
18. OTHER BUSINESS MATTERS
During the 12 months ended on the date of this Agreement there has been
no substantial change in the basis or terms on which any person is
prepared to do business with the Company (apart from normal price
changes), and no substantial customer or supplier of the Company has
ceased or substantially reduced its business with the Company, and no
indication has been received by the Company or any of the Vendors that
there will or may be any such change, cessation or reduction.
19. COMPANY LAW MATTERS AND GENERAL COMPLIANCE
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19.1 Compliance has been made with all legal requirements in
connection with the formation of the Company and all issues
and grants of shares or other securities of the Company.
19.2 The copy of the memorandum and articles of association of the
Company enclosed with the Disclosure Letter is accurate and up
to date.
19.3 All returns and other documents relating to the Company
required to be filed with the Registrar of Companies have been
properly filed, and none has been so filed during the period
of 14 days ending with the date of this Agreement.
19.4 The statutory books (including all registers and minute books)
of the Company have been properly kept.
19.5 The Company has conducted its business in all material
respects in accordance with all applicable laws and
regulations of the United Kingdom.
19.6 No agreement, practice or arrangement to which the Company is
party is or ought to be (or ought to have been) registered
under or infringes any competition, anti-restrictive trade
practice or consumer protection legislation applicable in the
United Kingdom or elsewhere.
19.7 So far as the Vendors are aware, there is not pending, or in
existence, any investigation or enquiry by, or on behalf of,
any governmental or other body in respect of the affairs of
the Company.
20. LITIGATION
20.1 Neither the Company nor any person for whose acts or defaults
the Company may be liable is involved (whether as plaintiff,
defendant or any other party) in any civil, criminal, tribunal
or arbitration proceedings, and, so far as the Vendors are
aware there are no facts likely to give rise to any such
proceedings.
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20.2 There is no unsatisfied judgment or unfulfilled order
outstanding against the Company and the Company is not party
to any undertaking or assurance given to a court, tribunal or
any other person in connection with the determination or
settlement of any claim or proceedings.
21. DEFAULT
21.1 So far as the Vendors are aware, the Company has not sold,
supplied or provided any product or service which did not,
does not or will not comply fully with all applicable laws,
regulations or standards or which was, is or will be faulty,
defective or dangerous or not in accordance with any
representation, or contractual term, express or implied,
relating to it.
21.2 So far as the Vendors are aware, the Company is not in breach
of any Contract to which it is a party, and no other party to
any such Contract is in breach of it.
22. EVENTS SINCE THE ACCOUNTING DATE
Since the Accounting Date:-
22.1 there has been no reduction in the value of the net assets of
the Company determined in accordance with the same accounting
policies as those applied in the Accounts (and valuing no
asset at a figure greater than the value attributed to it in
the Accounts or, in the case of any asset acquired since the
Accounting Date, greater than cost);
22.2 other than Stock acquired in the ordinary course of business
the Company has not acquired, or agreed to acquire, any single
asset having a value in excess of (pound sterling) 10,000 or
assets having an aggregate value in excess of (pound sterling)
25,000;
22.3 the Company has not disposed of, or agreed to dispose of, any
asset other than finished goods;
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22.4 no dividend or other payment which is, or could be treated as,
a distribution for the purposes of Part VI ICTA or section 418
ICTA has been declared, paid or made by the Company;
22.5 the trade and business of the Company have been carried on in
the ordinary and normal course;
22.6 there has been no adverse change in the financial or trading
position or prospects of the Company;
22.7 no resolution of the shareholders of the Company has been
passed;
22.8 no management or similar charge has become payable or been
paid by the Company; and
22.9 no payment has been made by the Company to, or benefit
conferred by the Company on, any of the Vendors, save as
specified in the Disclosure Letter.
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23. EFFECTS OF THE AGREEMENT
This Agreement will not entitle any person to terminate or avoid any
Contract to which the Company is party or have any effect on any such
Contract.
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This Agreement has been executed as a deed and delivered on the date
stated at the beginning of this Agreement
SIGNED AS A DEED )
AND DELIVERED BY )
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ) ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
in the presence of:- )
Witness's signature: ▇▇▇▇▇▇ ▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Address: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇
Occupation: Solicitor
SIGNED AS A DEED )
AND DELIVERED BY )
▇▇▇▇▇ ▇▇▇▇▇ ) ▇▇▇▇▇ ▇▇▇▇▇
in the presence of:- ) (signed by her attorney
▇▇▇▇▇▇▇▇ ▇▇▇▇)
Witness's signature: ▇▇▇▇▇▇ ▇▇▇▇▇
Name:
Address:
Occupation:
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SIGNED AS A DEED )
AND DELIVERED BY )
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ) ▇▇▇▇▇▇▇▇ ▇▇▇▇
in the presence of:- )
Witness's signature: ▇▇▇▇▇▇ ▇▇▇▇▇
Name:
Address:
Occupation:
SIGNED AS A DEED )
AND DELIVERED BY )
▇▇▇▇ ▇▇▇▇ ) ▇▇▇▇ ▇▇▇▇
in the presence of:- )
Witness's signature: ▇▇▇▇▇▇ ▇▇▇▇▇
Name:
Address:
Occupation:
SIGNED AS A DEED )
AND DELIVERED BY )
▇▇▇▇▇▇ ▇▇▇▇ ) ▇▇▇▇▇▇ ▇▇▇▇
in the presence of:- )
Witness's signature: ▇▇▇▇▇▇ ▇▇▇▇▇
Name:
Address:
Occupation:
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ROMTECH, INC.
A PENNSYLVANIA CORPORATION
BY: _GERALD W ▇▇▇▇▇
▇▇▇▇▇▇ ▇ ▇▇▇▇▇
President and Chief Executive Officer
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