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EXHIBIT 10.37
Dated 29 January 1999
NEXTERA ENTERPRISES, INC.
and
THE VENDORS
AGREEMENT
RELATING TO THE SALE AND PURCHASE
OF THE WHOLE OF THE ISSUED SHARE CAPITAL OF
THE ALEXANDER CORPORATION LIMITED
LINKLATERS & PAINES
ONE ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
TEL:(▇▇▇) ▇▇▇ ▇▇▇ ▇▇▇▇
REF: MSM/AXXL
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AGREEMENT FOR PURCHASE OF SHARES
THIS AGREEMENT is made on 29 January 1999
BETWEEN:
(1) THE SEVERAL PERSONS named in Part 1 of Schedule 1 and whose
addresses are set out in Part 4 of Schedule 1 (the "VENDORS" which
expression shall include the legal personal representatives of any
such persons); and
(2) NEXTERA ENTERPRISES, INC., a Delaware corporation, whose registered
office is at ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ of
America (NEXTERA or the PURCHASER).
IT IS AGREED as follows:
1 INTERPRETATION
In this Agreement, including its Schedules, the headings shall not affect
its interpretation and, unless the context otherwise requires, the
provisions in this Clause 1 apply:
1.1 DEFINITIONS
AGREED TERMS or AGREED FORM means in relation to any document such
document in the terms or form agreed between the parties and signed by or
on behalf of the Purchaser's Solicitors and the Vendors' Solicitors for
the purposes of identification;
AUDITED ACCOUNTS means the audited accounts of the Company for the
financial period ended on the Balance Sheet Date;
BALANCE SHEET DATE means the balance sheet of the Company for the period
ended 31 December 1998;
BUSINESS DAY means a day on which banks are open for business in England
(excluding Saturdays, Sundays and public holidays);
CHARGE AGREEMENT means the Charge of Shares Agreement in the agreed form
to be entered into between the Purchaser and the Vendors;
COMPANY or Alexander means The Alexander Corporation Limited details of
which are contained in Part 3 of Schedule 1;
COMPANY'S CUMULATIVE PROFIT BEFORE TAX means the profit on ordinary
activities of the Company before taxation over the Earn-Out Period in
accordance with Clause 4;
COMPANY'S CUMULATIVE REVENUE means all revenue earned by the Company over
the Earn-Out Period as calculated in accordance with Clause 4;
COMPLETION ACCOUNTS means the accounts prepared in accordance with 7.2
COMPLETION DATE means the date hereof;
CONSIDERATION SHARES means 150,000 Nextera Shares credited as fully paid
as consideration pursuant to Clause 3;
COMPLETION means the completion of the sale and purchase of the Shares
pursuant to Clause 4;
COMPLETION ACCOUNTS means the accounts prepared in accordance with Clause
7;
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DISCLOSURE LETTER means the letter of even date herewith from the Vendors to the
Purchaser disclosing:
(i) information constituting exceptions to the Warranties; and
(ii) details of other matters referred to in this Agreement;
DISCLOSURE BUNDLE means the bundle of documents provided with the Disclosure
Letter;
EARN-OUT PERIOD means the period commencing on Completion and ending three years
later;
EARN-OUT STATEMENT means the statement to be delivered pursuant to Clause 4.8.1
setting forth the Company's Cumulative Revenue, the Company's Cumulative Profit
Before Tax and the Vendors Deferred Consideration, if any, payable to the
Vendors;
ENCUMBRANCE means any claim, charge, mortgage, security, lien, option, equity,
power of sale or hypothecation;
GAAP means generally accepted accounting principles in the UK on the date of
this Agreement;
INITIAL CASH CONSIDERATION means L300,000;
LOAN NOTES means the loan notes to be issued by Nextera to the Vendors as
Vendors Deferred Consideration pursuant to Clause 4.8, the aggregate value of
which will be calculated in accordance with Clause 4.8 and Schedule 7 and which
will be constituted by the Loan Note Instrument;
LOAN NOTE INSTRUMENT means the instrument constituting the Loan Notes in the
agreed terms;
NET WORKING CAPITAL means current assets less current liabilities;
NEXTERA STOCKHOLDERS AGREEMENT means the agreement entitled "Stockholders
Agreement" dated 31 August 1998 between Nextera Enterprises L.L.C., Nextera
Enterprises, INC and the individuals and other parties listed in Schedule A to
that agreement;
NEXTERA SHARES means units of class A common stock of US$0.001 each in the
capital of the Purchaser;
PENSION SCHEME means the Alexco Pension Plan being the pension scheme to which
Alexander currently makes contributions for and on behalf of certain of its
employees;
PROFIT AND LOSS STATEMENTS means the profit and loss statement for the Company
for the period ending 31 December 1998;
PROPERTY means the property brief details of which are set out in of Schedule 4
and Property means any one of them;
PURCHASER'S GROUP means the Purchaser, any subsidiary of the Purchaser, any
holding company of the Purchaser and any subsidiary of any such holding company;
PURCHASER'S SOLICITORS means Linklaters & Paines of ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇;
REPORTING ACCOUNTANTS means a firm of Chartered Accountants independent of the
Vendors and of the Purchaser to be agreed by the Vendors' Representative on
behalf of the Vendors and the Purchaser within 7 days of a notice by one to the
other requiring such agreement or, failing such agreement, to be nominated on
the application of either of them by or on behalf of the President for the time
being of the Institute of Chartered Accountants in England and Wales;
SECURITY ACCOUNT has the meaning given in the Charge Agreement;
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SERVICE AGREEMENTS means the service agreements to be entered into in
accordance with Clause 4.3 in the agreed terms;
SHARES means 1000 Ordinary Shares of L1 each in the capital of the
Company, being the whole of the issued share capital of the Company;
SIBSON means Sibson International LLC, a Delaware limited liability
company;
SUPPLEMENT TO THE STOCKHOLDERS AGREEMENT means the agreement in the
agreed form to be signed by the Vendors by which the Vendors will become
parties to the Stockholders Agreement;
TAX DEED OF COVENANT means the deed of covenant against Taxation in the
agreed terms to be entered into at Completion;
TAXATION and TRANSACTION bear the meanings respectively given to them in
the Tax Deed of Covenant;
VENDORS' ACCOUNTANTS means BDO ▇▇▇▇ ▇▇▇▇▇▇▇ of ▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇
▇▇▇;
VENDORS DEFERRED CONSIDERATION means that number of Loan Notes as is
calculated in accordance with Schedule 6 hereof and paid in accordance
with Clause 4.8 hereof;
VENDORS' REPRESENTATIVE means ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ or such other person with
an address in the United Kingdom as Vendors selling between them
thereunder a majority of the Shares shall for this purpose notify to the
parties hereto by not less than 10 business days' prior written notice
with express reference to this Agreement;
VENDORS' SOLICITORS means Gouldens of ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇;
WARRANTIES means, in respect of the Vendors, the warranties set out in
Schedule 2 and WARRANTY means any one of them and, in respect of the
Purchaser, the warranties set out in Schedule 3 and means any of them.
1.2 SUBORDINATE LEGISLATION
Any reference to a statutory provision shall include any subordinate
legislation made from time to time under that provision.
1.3 MODIFICATION ETC. OF STATUTES
Any reference to a statutory provision shall include such provision as
from time to time modified or re-enacted or consolidated whether before
or after the date of this Agreement so far as such modification,
re-enactment or consolidation applies or is capable of applying to any
transactions entered into under this Agreement prior to Completion and
(so far as liability thereunder may exist or can arise) shall also
include any past statutory provision (as from time to time modified,
re-enacted or consolidated) which such provision has directly or
indirectly replaced.
1.4 CONNECTED PERSONS
A person shall be deemed to be connected with another if that person is
connected with such other within the meaning of Section 839 of the
Income and Corporation Taxes Act 1988 as in force at the date hereof.
1.5 ACCOUNTS
Any reference to ACCOUNTS shall include the directors' and auditors'
reports, relevant balance sheets and profit and loss accounts and
related notes together with all documents which are or would be
required by law to be annexed to the accounts of the company concerned
to be laid before that company in general meeting in respect of the
accounting reference period in question.
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1.6 COMPANIES ▇▇▇ ▇▇▇▇
The words SUBSIDIARY and HOLDING COMPANY shall have the same meaning in
this Agreement as their definitions in the Companies ▇▇▇ ▇▇▇▇ as in force
at the date hereof.
1.7 INTERPRETATION ▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ shall apply to this Agreement in the same way
as it applies to an enactment.
1.8 SSAPS ETC.
A reference to SSAP means a statement of standard accounting practice as
adopted by the Accounting Standards Board and published by the Institute
of Chartered Accountants of England and Wales.
1.9 SCHEDULES ETC.
References to this Agreement shall include any Schedules to it and
references to Clauses and Schedules are to Clauses of and Schedules to
this Agreement.
1.10 INFORMATION
Any reference to books, records or other information means books, records
or other information in any form including paper, electronically stored
data, magnetic media, film and microfilm.
1.11 HEADINGS
Headings shall be ignored in construing this Agreement.
2 AGREEMENT TO SELL THE SHARES
2.1 SALE OF SHARES
The Vendors, relying (on amongst other things) the Warranties,
representation and undertaking on the part of the Purchaser contained in
this Agreement, (each as to those of the Shares specified against his
name in Part 1 of Schedule 1) shall sell and the Purchaser, relying on
(amongst other things) the Warranties, representations and undertakings
on the part of the Vendors contained in this Agreement, shall purchase
the Shares free from all Encumbrances and together with all rights and
privileges now and hereafter attaching thereto.
2.2 RIGHTS OF PRE-EMPTION
The Vendors hereby waive irrevocably any and all rights of pre-emption
over the Shares conferred either by the Articles of Association or other
equivalent document of the Company or in any other way.
3 CONSIDERATION
3.1 AMOUNT
The consideration for the purchase of the Shares shall be:
3.1.1 the Initial Cash Consideration (subject to adjustment in
accordance with Clause 7);
3.1.2 the Vendors Deferred Consideration; and
3.1.3 the allotment and issue of the Consideration Shares.
which shall be paid or issued in accordance with the provisions of Clause
4.
3.2 RANKING OF CONSIDERATION SHARES
The Consideration Shares shall rank in all respects pari passu with the
existing issued fully paid shares in the capital of the Purchaser.
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4 COMPLETION
4.1 DATE AND PLACE
4.1.1 Completion shall take place on the date hereof at the offices
of the Purchaser's Solicitors, or at such other place or on
such other date as may be agreed between the Purchaser and on
behalf of the Vendors.
4.1.2 If the Vendors comply with all of their obligations under
this Clause 4 which must be complied with at or before
Completion, then after Completion the Purchaser shall have no
right to rescind this Agreement.
4.2 VENDORS' OBLIGATIONS ON COMPLETION
On Completion the Vendors shall deliver or make available to the
Purchaser:
4.2.1 duly executed transfers of the Shares in favour of the
Purchaser or as it may direct accompanied by the relative
share certificates (or an express indemnity in a form
satisfactory to the Purchaser in the case of any certificate
found to be missing);
4.2.2 the written resignations of each of the directors and
secretary of the Company from his office as a director or
secretary to take effect on the date of Completion with
acknowledgments signed by each of them in agreed terms to the
effect (subject as therein mentioned) that he has no claim
against the Company for compensation for loss of office or
termination of employment (whether contractual, statutory or
otherwise), redundancy or otherwise in respect of the
resignation from such offices;
4.2.3 the written resignations of the auditors of the Company to
take effect on the date of Completion, with acknowledgments
signed by each of them in a form satisfactory to the
Purchaser to the effect that they have no claim against the
Company and containing the statement referred to in Section
394 of the Companies ▇▇▇ ▇▇▇▇ to the effect 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;
4.2.4 the Supplement to the Stockholders Agreement duly executed;
4.2.5 the certificates of incorporation, corporate seals (if any),
and statutory books of the Company (duly written up-to-date);
4.2.6 the Tax Deed of Covenant duly executed by the Covenantors
named in it;
4.2.7 possession of all the financial and accounting books and
records of the Company and all documents of title relating to
the Properties;
4.2.8 evidence satisfactory to the Purchaser that the provisions of
paragraph 5.2 of Schedule 2 ("Arrangements with Connected
Persons etc.") have been duly complied with insofar as they
require certain matters to be dealt with prior to Completion.
4.2.9 bank statements of all bank accounts of the Company as at the
close of business on a Business Day not more than two days
prior to the date of Completion.
4.3 SERVICE AGREEMENTS
On Completion the Vendors shall procure that the key employees party
thereto shall enter into the Service Agreements with the Company.
4.4 BOARD RESOLUTIONS OF THE COMPANY
On Completion the Vendors shall procure the passing of Board Resolutions
of the Company inter alia:
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4.4.1 amending existing authorities to bankers in respect of the
operation of its bank accounts as requested by the Purchaser and
giving authority in favour of such persons as the Purchaser may
nominate in relation to such accounts;
4.4.2 accepting the resignations referred to in Clause 4.2.2 and
appointing ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ and ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ as
directors and ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ as secretary;
4.4.3 approving the registration of the share transfers referred to in
Clause 4.2.1 subject only to their being duly stamped;
4.4.4 accepting the resignations referred to in Clause 4.2.3 and
appointing Ernst & Young as auditors of the Company;
4.4.5 approving the Service Agreements,
and shall hand to the Purchaser duly certified copies of such
Resolutions.
4.5 INITIAL CASH CONSIDERATION
4.5.1 The Initial Cash Consideration, being the sum of 300,000 pounds
(subject to adjustment in accordance with Clause 7), will be paid
on Completion against compliance by the Vendors with the foregoing
provisions of this Clause 4 in cash by the Purchaser to the
Vendors' Solicitors.
4.5.2 Any sum payable to the Vendors either on Completion or out of the
Charged Assets under the Charge Agreement shall be paid to the
Vendors' Solicitors who are authorised to receive the same on
behalf of the Vendors and whose receipt shall be a good discharge
to the Purchaser provided that if any amount by way of
compensation or indemnity shall become payable to the Purchaser
out of the Charged Assets in accordance with the provisions of the
Charge Agreement, the amount which would otherwise have been due
to the Vendors shall be reduced by the amount so payable and any
right of the Purchaser to such compensation or indemnity shall
also be reduced by such amount but without prejudice to the right
of the Purchaser to recover the excess of any compensation or
indemnity or any costs or expenses from the Vendors.
4.6 CONSIDERATION SHARES
Against compliance by the Vendors with the foregoing provisions of this
Clause 4, on Completion the Purchaser shall:
4.6.1 allot and issue to certain Vendors the number of shares listed in
column (3) of Part 1 of Schedule 1, being a total of 150,000 of
the Consideration Shares; and deliver certificates in respect of
those of them not to be charged under the Charge Agreement to the
Vendors' Solicitors;
4.6.2 issue but itself retain certificates for the balance of the
Consideration Shares pursuant to and in accordance with the Charge
Agreement;
4.6.3 deliver to the Vendors' Solicitors an engrossment of each of the
Charge Agreement and Tax Deed of Covenant duly executed by the
Purchaser together with evidence that the Security Account
referred to in the Charge Agreement has been duly opened in
accordance with the instruction letter in agreed terms;
4.6.4 deliver to the Vendors' Solicitors an engrossment of the
Supplement to the Stockholders Agreement duly executed by Nextera;
and
4.6.5 deliver to the Vendors' Solicitors a certified true copy of
resolutions of the Board of the Purchaser authorising its entry
into and implementation of this Agreement, the issue of
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the options and consideration shares are referred by this
agreement and the constitution of the Loan Notes.
4.7 VENDORS COMPETENT TO ACQUIRE SHARES
4.7.1 Each Vendor who is receiving Consideration Shares has substantial
experience in evaluating and investing in private placement
transactions of securities in companies similar to the Purchaser
so that he is capable of evaluating the merits and risks of
acquiring the Consideration Shares as partial consideration for
sale of the Shares and has the capacity to protect his own
interests. Each Vendor must bear the economic risk of holding the
Consideration Shares indefinitely unless such securities are
registered pursuant to the US Securities Act of 1933 (the
SECURITIES ACT), or an exemption from registration is available
for the disposition thereof. The relevant Vendor understands that
there is no assurance that any exemption from registration under
the Securities Act will be available. The relevant Vendor is an
"accredited investor" as defined in Rule 501 under the Securities
Act.
4.7.2 Each Vendor receiving Consideration Shares is acquiring the
Consideration Shares for such Vendor's own account for investment
only, and not with the view to, or for resale in connection with,
any distribution thereof. The Vendor understands that the
Consideration Shares acquired have not been, and will not be,
registered under the Securities Act by reason of a specific
exemption from the registration provisions of the Securities Act,
the availability of which depends upon, among other things, the
bona fide nature of the investment intent and the accuracy of the
statements made in this Clause 4.7.
4.8 VENDORS DEFERRED CONSIDERATION
4.8.1 The Vendors' Deferred Consideration shall be calculated by Sibson,
in accordance with Schedule 6 and Clause 10 and applying GAAP on a
basis consistent with the Audited Accounts, who will deliver to
the Vendors, within three months of the end of the Earn-Out Period
the Earn-Out Statement showing calculations of the Earn
Out amounts.
4.8.2 Subject to Clause 4.8 and Clause 10 the amount of any Vendors
Deferred Consideration shall be paid to the Vendors in Loan Notes
within 5 Business Days of delivery of the Earn-Out Statement.
4.8.3 Any objections to the calculation of the Vendors Deferred
Consideration shall be resolved in accordance with the following
provisions of this Clause.
4.8.4 If the Vendors disagree with the amount determined by Sibson to be
the Vendors Deferred Consideration, the Company's Cumulative
Revenue or the Company's Cumulative Profit Before Tax, they or the
Vendors' Representative shall notify the Purchaser in writing of
such disagreement within ten business days of their receipt of the
Earn-Out Statement.
4.8.5 The Purchaser shall pay any undisputed amount of the Vendors
Deferred Consideration, in accordance with Clause 4.8.2. The
Purchaser and the Vendors shall use their best efforts for a
period of thirty (30) days following the notice of disagreement to
resolve any disagreement. If at the end of such period, the
Purchaser and the Vendors are unable to resolve the disagreement,
the Reporting Accountants shall be retained to make a final and
binding determination of the relevant part of the Vendors Deferred
Consideration, if any. For this purpose, the provisions of Clauses
7.3.1 to 7.3.12 (inclusive) (as far as relevant) shall apply to
such appointment.
4.8.6 The Purchaser agrees and undertakes that throughout the Earn-Out
Period unless otherwise agreed with the Vendors' Representative,
the Purchaser's Group will act in
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good faith with respect to the operation of the Company and
shall not take any actions with the aim of diminishing or which
could reasonably be expected unfairly to reduce the Company's
Cumulative Profit Before Tax or the Company's Cumulative
Revenue.
4.8.7 The Vendors Deferred Consideration shall be divided amongst
the Vendors in proportion to the number of Shares to be sold by
them as set out in column (2) of Part 1 of Schedule 1.
4.8.8 If any of the Vendors who are also employees of the Company
work on projects within the Nextera Group but outside Alexander,
an amount for the work of that person as agreed between that
member of the Nextera Group and Alexander will be added to the
Company's Cumulative Revenue and will contribute to the
Company's Cumulative Profit Before Tax for the purposes of
calculating the Vendors Deferred Consideration.
4.8.9 Other than in respect of the Company's share of the Sibson
Group overhead charge (a charge shared by members of the Sibson
Group), if the Company pays any management fee to any company in
the Nextera Group, that amount will not be taken into account in
determining the Company's Cumulative Revenue or the Company's
Cumulative Profit Before Tax. It is, however, envisaged that the
Company will share and purchase some goods or services from
members of the Nextera Group. If the Company pays any amounts to
any member of the Nextera Group for goods or services the
Company has ordered, those amounts shall be included to the
extent fair and reasonable in determining the Company's
Cumulative Revenue or the Company's Cumulative Profit Before
Tax.
4.8.10 In the calculation of the Company's Cumulative Revenue and
Cumulative Profit Before Tax, any dividend paid by the Company
to another member of the Nextera Group shall not be taken into
account and the Company's Cumulative Revenue and Cumulative
Profit Before Tax shall be calculated as if those amounts had
not been paid.
4.8.11 If the Company or the business undertaken at Completion by
the Company is sold or transferred by the Purchaser (whether to
a purchaser who is not a member of the Nextera Group or
otherwise), the Purchaser must, without prejudice to its primary
obligations in respect thereof, ensure that the purchaser is
bound by the provisions of this Agreement relating to the
Vendors Deferred Consideration throughout the remaining Earn-Out
Period.
4.9 If before the end of the Earn Out Period Nextera is wound up or goes
into receivership or administration or is dissolved or becomes the
subject of analogous proceedings in any jurisdiction, the maximum
Vendors Deferred Consideration shall be deemed to have become
immediately due and payable and the Purchaser shall be obliged to
satisfy the same by the issue of Loan Notes to the Vendors accordingly.
4.10 NO FINANCIAL ASSISTANCE
Nothing in this Clause 4 shall require the Purchaser or any member of
the Purchaser's Group to incur any liability or provide any finance or
financial support by way of guarantee, indemnity, security or otherwise
for or to the Company.
4.11 EMPLOYEE OPTION PLAN
4.11.1 Nextera shall procure that 40,000 options for Nextera Shares are
granted during 1999 to employees of the Company in accordance
with and subject to the 1998 Equity Participation Plan.
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4.11.2 At Completion Nextera shall grant options for 300,000 Nextera
Shares to the Vendors in the proportions agreed between the
Parties. These options shall be granted pursuant to the 1998
Equity Participation Plan of Nextera.
4.11.3 Following any IPO of Nextera, Nextera shall file an S-8
Registration Statement in relation to any Nextera shares to
be issued under the above options.
4.12 DELIVERY OF DOCUMENTS OF TITLE
Delivery of share certificates and loan stock certificates for the
Consideration Shares or Vendors Deferred Consideration shall be made to
the Vendors' Solicitors who are authorized to receive the same on behalf
of the Vendors and delivery to whom shall be a good discharge to the
Purchaser.
4.13 CHARGE AGREEMENT
On Completion the Vendors and the Purchaser shall enter into the Charge
Agreement.
5 WARRANTIES
5.1 INCORPORATION OF SCHEDULE 2
5.1.1 The Vendors jointly and severally (except in the case of the
Warranties set out at paragraphs 1.5 or 1.6 of Schedule 2, which
warranties will be given by each Vendor severally and in respect
of himself only) warrant to the Purchaser and its successors in
title in the terms set out in Schedule 2 subject only to:
(i) any matter which is fairly disclosed in the Disclosure
Letter: and
(ii) any matter expressly provided for under the terms of this
Agreement,
including, without prejudice to the generality of the foregoing,
the limitations and qualifications contained in Clause 5.2 and
any matter or thing hereafter done or omitted to be done
pursuant to this Agreement or otherwise at the request in
writing or with the approval in writing of the Purchaser.
5.1.2 The Vendors acknowledge that the Purchaser has entered into this
Agreement in reliance upon, amongst other things, the Warranties
and on the undertakings contained in Clause 9. Save as expressly
provided, the Warranties shall be separate and independent and
shall not be limited by reference to any other paragraph of
Schedule 2 or by anything in this Agreement or the Tax Deed of
Covenant.
Subject to Clause 5.1.1. claims may be made whether or not the
Purchaser, prior to signing this Agreement, could have
discovered (whether by any investigation into the affairs of the
Company or otherwise) that any Warranty has not been complied
with or carried out or is otherwise untrue or misleading.
5.1.3 The Vendors agree that if any claim, which could otherwise be
made by the Purchaser under any Warranty, is precluded or
debarred on the ground of the Purchaser having knowledge or
deemed knowledge of the matter to which such claim relates and
details of that matter are not contained in the Disclosure
Letter and/or its accompanying documents, then there shall be a
reduction in the consideration of an amount equal to the amount
which the Purchaser would have been able to claim under such
Warranty if such claim had not been precluded or debarred on the
grounds set out above, and the Vendors shall be obliged
immediately after such amount is agreed or determined to pay
such amount to the Purchaser.
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5.2 LIMITATION OF LIABILITY
5.2.1 Notwithstanding the provisions of Clause 5.1 the Vendors shall not
be liable, under the Warranties:
(i) in respect of any claim, unless notice of such claim is given
in writing by the Purchaser to the Vendors specifying in
reasonable detail (so far as known to the Purchaser) the
matters in respect of which the claim is made, in the case of
the Warranties, within 18 months of the date hereof and, in
the case of the Tax Deed of Covenant the period specified in
the Tax Deed;
(ii) if in respect of any claim, notice of which has been given
under Clause 5.2.1(i) which has not been previously settled,
satisfied or withdrawn, within twelve months of that notice
proceedings in respect thereof have not been issued and
served on the Vendors;
(iii) to the extent of any matter which would not have occurred but
for a voluntary act, omission, transaction or arrangement
after Completion by the Company or any member of the
Purchaser's Group which is outside the ordinary course of
business of the Company;
(iv) to the extent that the Company or the Purchaser is entitled
to claim indemnity against any loss or damage suffered by
the Company or the Purchaser and actually receives
compensation in respect of such loss or damage arising out of
any such claim under the terms of any insurance policy of the
Company;
(v) in respect of any claim unless the aggregate amount of all
claims for which the Vendors would otherwise be liable under
this Agreement exceeds L50,000 but if the aggregate liability
in respect of all such claims exceeds that figure then,
subject as provided elsewhere in this Clause 5, all claims,
including claims previously notified, shall accrue against
and be recoverable from the Vendors;
(vi) to the extent that any breach or claim in respect thereof
arises from any act, matter or thing done or omitted to be
done by the Vendors or any of them at the written request of
or with the written approval of the Purchaser, its authorized
representatives or professional advisers;
(vii) to the extent that a provision or reserve is made in the
Completion Accounts in respect of the matter to which such
liability relates save, for the avoidance of doubt, to the
extent that such provision or reserve was insufficient or to
the extent that even if it was provided for in the Completion
Accounts the Net Working Capital would still have exceeded
L365,000;
(viii) to the extent that a liability arose due to a change of the
accounting reference date of the Company or any change in the
accounting policies and principles used by the Company after
Completion, except insofar as the change was made in order
properly to comply with a mandatory legal or accounting
standard; and
(ix) to the extent that the Vendors' liability is increased by
reason of any breach by the Purchaser of its obligations
under this Agreement or the Tax Deed of Covenant.
5.2.2 Except to the extent that the liability of the Vendors is expressed
to be personal and several under any particular Warranties or under
any specific provision of the Tax Deed of Covenant, the Vendors
shall be jointly and severally liable for amounts falling due under
the Warranties or the Tax Deed of Covenant, PROVIDED THAT as between
themselves and without affecting the rights of the Purchasers, the
Vendors hereby mutually agree with each other that where they are
jointly and severally liable aforesaid
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each Vendor shall bear only his appropriate part of any liability
which may arise in relation to the claim concerned and any related
fees and expenses to be borne or suffered by the Vendors in
connection therewith, where for this purpose the appropriate part
shall mean:-
(i) the case of any liability which is fairly attributable to or
which arises by reason of income or benefits received by that
Vendor or a particular number of Vendors or his or their act or
default, the whole of such liability; and
(ii) in any other case, that proportion of the total liability
specified beside the names of the respective Vendors in column
(5) of Part 1 of Schedule 1
and each of the Vendors shall indemnify and contribute to each other
accordingly.
5.2.3 None of the limitations contained in this Clause 5.2 shall apply to
any Vendor in respect of any claim (i) which arises or is increased,
or to the extent to which it arises or is increased, as the
consequence of, or which is delayed as a result of, fraud, wilful
misconduct or wilful concealment by that Vendor; or (ii) which
concerns the failure, or alleged failure, of that Vendor to
transfer good title to his Shares to the Purchaser.
5.2.4 If a liability of the Purchaser or Company which gives rise to a
claim under the Warranties or under the Tax Deed of Covenant is
contingent, then the Vendors shall not be liable in respect thereof
unless and until such time as the contingent liability ceases to be
contingent and becomes actual PROVIDED THAT the foregoing provisions
of this paragraph shall not operate to avoid a claim made in respect
of a contingent liability within the time limits set out in Clause
5.2.1 above or Clause 3.1.9 of the Tax Deed of Covenant (as
appropriate) even if such liability does not become an actual
liability until after expiry of the relevant period and, in the case
of such a claim duly notified within the relevant period referred to
above, the period of twelve months referred to in Clause 5.2.1 above
or Clause 3.1.9 of the Tax Deed of Covenant shall commence on the
date such liability becomes actual liable.
5.3 MITIGATION OF LOSS
The Purchaser or the Vendors, as the case may be, shall procure that all
reasonable steps are taken and all reasonable assistance is given to avoid
or mitigate their loss which in the absence of mitigation might give rise
to a liability in respect of any claim arising under this Agreement or the
Tax Deed of Covenant.
5.4 EFFECT OF COMPLETION
The Warranties and all other provisions of this Agreement and the Tax Deed
of Covenant, insofar as the same shall not have been performed at
Completion, shall not be extinguished or affected by Completion, or by any
other event or matter whatsoever, except by a specific and duly authorized
written waiver or lease by the Purchaser and Vendors respectively.
5.5 INDEMNIFICATION
Subject to the limitations contained in Clause 5.2, the Vendors jointly
and severally agree to indemnify and hold the Purchaser and each company
in the Purchaser's Group, harmless from and against any damages,
liabilities, losses, taxes, fines, penalties, reasonable costs and legal
expenses (including, without limitation, reasonable fees of counsel) which
may be sustained or suffered by any of them arising out of or based upon
any breach of Warranty set out in Schedule 2.
5.6 LIMITATION OF LIABILITY
Subject to clause 5.2.3, the maximum aggregate liability of all Vendors
for claims against the Warranties is half of the total purchase
consideration. The maximum liability of each Vendor
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under the Warranties is limited to his pro rata proportion of the total
purchase consideration previously paid to him. For these purposes the
Shares shall be valued at the fair market value at the time an amount
becomes due and payable, or where the shares have been sold, that value.
5.7 CLAIMS TO BE NOTIFIED
Without prejudice to the right of the Purchaser to claim for breach of
Warranty, within a reasonable time after it becomes aware of any claim made
or threatened by any third party or other circumstances which give or are
likely to give rise to a claim under the Warranties (being such time, so
far as is practicable, as will allow the Vendors a reasonable opportunity
to exercise their rights under this Clause 5.6) the Purchaser shall notify
the Vendors of the relevant third party claim or circumstances (indicating,
to the extent then within the knowledge of the Purchaser, the nature of the
allegations being made or circumstances concerned) and shall thereafter:
5.7.1 use its best endeavours to ensure that no binding admission of
liability or agreement or compromise in relation to such claim is
made without prior written approval of the Vendors' Representative
(such approval not to be unreasonably withheld or delayed) and the
Vendors having the opportunity to request information and make
requests and seek to influence events as provided below;
5.7.2 keep the Vendors informed of the progress of and developments
relating to the claim or circumstances concerned;
5.7.3 provide the Vendors, at the Vendors' expense, with copies of such
documentation relating to the claim or circumstances as the Vendors
may reasonably request and provide the Vendors and their
professional advisers such access to the Properties and personnel of
the Purchaser as they may reasonably request (provided that such
access is on reasonable notice and does not unreasonably disrupt the
conduct of the business of the Purchaser or the Company) and offer
them such opportunity as they may reasonably request to examine any
relevant documents and records in the possession of the Company
provided that the Vendors shall treat, and shall procure that their
professional advisers shall treat, all information and documents to
which they have access hereunder as confidential and shall not
disclose it to any third party (other than professional advisers or
as required by law) without the prior written consent of the
Purchaser and shall use it only for the purposes of dealing with the
relevant claim or circumstances;
5.7.4 subject to being indemnified to its reasonable satisfaction by the
Vendors on an after tax basis against all costs, charges, losses,
expenses and other liabilities which may as a result be reasonably
incurred by the Purchaser and subject always to the requirements of
any relevant insurer, take and procure the Company to take such
action as the Vendors may reasonably request to resist the claim
and/or deal with the relevant circumstances and/or pursue any
related rights of recovery of the Company against any third party
provided that the Purchaser shall not be obliged to take or omit to
take any action which, in its reasonable opinion, would damage the
goodwill, reputation or business of the Company and provided that
the Purchaser shall be free to take such action as it may reasonably
think fit, in relation to any claim unless it receives timely
instructions from the Vendors as to the action which they require to
be taken in accordance with this sub-Clause;
provided that nothing in this Clause 5.7 shall require the Purchaser to
provide the Vendors with a copy of any document which it in good faith
considers to be privileged in the context of any litigation connected with
the claim.
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5.8 DOUBLE CLAIMS
The Purchaser shall not be entitled to recover from the Vendors under
this Agreement or the Tax Deed of Covenant more than once in respect of
the same damage suffered, and accordingly the Vendors shall not be
liable in respect of any breach of the Agreement if and to the extent
that the losses are or have been included in a claim under the Tax Deed
of Covenant which has been satisfied, nor shall the Vendors be liable in
respect of a claim under the Tax Deed of Covenant if and to the extent
that the losses are or have been included in a claim for breach of the
Agreement which has been satisfied.
5.9 SATISFACTION OF CLAIMS
Any valid claim by the Purchaser against any Vendor for breach of any of
the Warranties, or under the Tax Deed of Covenant shall, be satisfied as
follows:
5.9.1 first, against the Cash and then the Consideration Shares charged
under the Charge Agreement by that Vendor, such Shares being
valued, for such purpose, at fair market value at the time of
satisfaction of the relevant claim; and
5.9.2 secondly, by that Vendor.
5.10 ELECTION BY VENDORS
Notwithstanding the provisions of Clause 5.9, a Vendor may elect to
satisfy a claim for breach of Warranty and/or under the Tax Deed of
Covenant which would otherwise be satisfied by realisation of Shares
belonging to him pursuant to the Charge Agreement by making a cash
payment to the Purchaser equivalent to the sum for which those of his
Shares that would have been otherwise so realised, in which event the
Shares concerned shall forthwith be released from the provisions of the
Charge Agreement and redelivered to the Vendor concerned.
5.11 SUBSEQUENT RECOVERY
If the Vendors or any of them make payment in respect of a claim under
the Warranties and the Company or any member of the Purchaser's Group or
any agent on its or their behalf subsequently recovers or receives from
a third party a sum or benefit which is directly referable to the
subject matter of such claim, the Purchaser shall within ten business
days after the receipt of such sum or benefit pay to the Vendors
originally settling the claim a sum equal to the net amount received
(after deducting any costs and expenses reasonably and properly incurred
by the recipient(s) in recovering such sum or benefit from the third
party and any taxation liability referable to such receipt, to the
extent in any such case not already reimbursed by the Vendors) but not
in any event exceeding the amount originally paid by the Vendors in
respect of the claim concerned.
5.12 EXCLUSION OF OTHER WARRANTIES
Except in the case of a fraudulent misrepresentation, no Vendor shall be
liable in respect of any representations, warranties, covenants,
agreements, undertakings or other obligations express, implied,
statutory or otherwise, which are made or assumed or deemed to have been
made or assumed by him in relation to or in connection with the subject
matter hereof which are not contained and expressly given or assumed by
him in this Agreement or any document in agreed terms entered into
pursuant hereto and the Purchaser hereby confirms that it has not
entered into this Agreement or assumed any other obligation in
connection herewith in reliance on any such representation, warranty,
covenant, agreement, undertaking or other obligation.
5.13 Each Vendor selling Shares hereunder that he acquired on exercise of
options either granted under the Alexander Corporation Executive Share
Option Scheme or grant by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ or granted by ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
shall within 14 days of Completion pay to the Company or to the
Purchaser's Solicitors the sum specified alongside his name in column
(6) of Part 1 of Schedule
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on account of the PAYE tax liability referable to the grant and/or
exercise of his option(s). To the extent such sums are so paid:
(i) the Purchaser shall procure that they are applied in meeting
the tax liability to which they relate as promptly after
payment as is required to ensure that no penalties or fines
arise on such tax liability as a result of the Purchaser's or
the Company's delay;
(ii) no provision for that tax liability shall be made when
determining the Net Working Capital; and
(iii) the Vendors shall not be liable for such tax liability under
the Warranties and/or Tax Deed of Covenant.
6 WARRANTIES FROM THE PURCHASER
6.1 The Purchaser hereby warrants and represents to the Vendors and their
successors in title in the terms set our in Schedule 3 subject only to:
(i) any matter which is fairly disclosed in the Purchaser
Disclosure Letter; and
(ii) any matter expressly provided for under the terms of this
Agreement.
6.2 INDEMNIFICATION
Subject to the limitations contained in Clause 6.3, the Purchaser agrees
to indemnify and hold the Vendors harmless from and against any damages,
liabilities, losses, taxes, fines, penalties, reasonable costs, legal
expenses (including, without limitation, reasonable fees of counsel) which
may be sustained or suffered by any of them arising out of or based upon
any breach of Warranty set out in Schedule 3.
6.3 LIMITATION OF LIABILITY
6.3.1 Notwithstanding the provisions of Clause 6.1 the Purchaser shall not
be liable, under the Warranties set out in Schedule 3:
(i) in respect of any claim, unless notice of such claim is given
in writing by the Vendors to the Purchaser specifying in
reasonable detail (so far as known to the Vendors) the matters
in respect of which the claim is made, within 18 months of the
date hereof;
(ii) If in respect of any claim, notice of which has been given
under Clause 6.3.1(i) which has not been previously settled,
satisfied or withdrawn, within twelve months of that notice
proceedings in respect thereof have not been issued and served
in the Purchaser;
(iii) to the extent that the Vendors or the relevant member(s) of
the Purchasers Group are entitled to claim indemnity against
any loss or damage suffered by the Vendors or the relevant
member(s) of the Purchasers Group and actually receive
compensation in respect of such loss or damage arising out of
any such claim under the terms of any insurance policy;
(iv) in respect of any claim unless the aggregate amount of all
claims for which the Purchaser would otherwise be liable under
this Agreement exceeds L50,000 but if the aggregate liability
in respect of all such claims exceeds that figure then,
subject as provided elsewhere in this Clause 6, all claims,
including claims previously notified, shall accrue against and
be recoverable from the Purchaser;
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(v) to the extent that any breach or claim in respect thereof
arises from any act, matter or thing done or omitted to be
done by the Purchaser at the written request of or with the
written approval of the Vendors Representative or their
professional advisers acting on behalf of all the Vendors;
6.4 MITIGATION OF LOSS
The Purchaser or the Vendors, as the case may be, shall procure that all
reasonable steps are taken and all reasonable assistance is given to
avoid or mitigate loss to the Purchaser or any member of the Purchaser's
Group which in the absence of mitigation might give rise to a liability
in respect of any claim arising under this Agreement.
6.5 LIMITATION OF LIABILITY
The maximum aggregate liability of the Purchaser for claims against the
Warranties is half of the total purchase consideration. For these
purposes the Shares shall be valued at the fair market value at the time
an amount becomes due and payable, or where the shares have been sold,
that value.
6.6 CLAIMS TO BE NOTIFIED
Without prejudice to the right of the Vendors to claim for breach of
Warranty, within a reasonable time after they become aware of any claim
made or threatened by any third party or other circumstances which give
or are likely to give rise to a claim under the Warranties (being such
time, so far as is practicable, as will allow the Purchaser a reasonable
opportunity to exercise their rights under this Clause 6.4) the Vendors
shall notify the Purchaser of the relevant third party claim or
circumstances (indicating, to the extent then within the knowledge of the
Vendors, the nature of the allegations being made or circumstances
concerned) and shall thereafter:
6.6.1 use their best endeavours to ensure that no binding admission of
liability or agreement or compromise in relation to such claim is
made without prior written approval of the Purchaser (such
approval not to be unreasonably withheld or delayed) and the
Purchaser having the opportunity to request information and make
requests and seek to influence events as provided below;
6.6.2 keep the Purchaser informed of the progress of and developments
relating to the claim or circumstances concerned;
6.6.3 provide the Purchaser, at the Purchaser's expense, with copies of
such documentation relating to the claim or circumstances as the
Purchaser may reasonably request;
provided that nothing in this Clause 6.6 shall require the Vendors to
provide the Purchaser with a copy of any document which it in good faith
considers to be privileged in the context of any litigation connected
with the claim.
7 COMPLETION ACCOUNTS/ADJUSTMENT TO CONSIDERATION
7.1 ESTIMATED WORKING CAPITAL
The amount of the Initial Cash Consideration to be paid by the Purchaser
to the Vendors at Completion is premised upon the Company having at least
L365,000 of Net Working Capital, determined in accordance with GAAP, at
Completion (such amount being referred to as the MINIMUM WORKING
CAPITAL).
7.2 THE COMPLETION ACCOUNTS
The Vendors shall procure that as soon as practicable following
Completion there shall be drawn up a balance sheet and a profit and loss
statement of the Company as at Completion (the COMPLETION ACCOUNTS) and that
the same are reviewed by the Vendors' Accountants. The Completion Accounts
shall be drawn up in accordance with GAAP and (so far as not inconsistent
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therewith) in accordance with the principles, methods and bases adopted
in drawing up the Audited Accounts and so as to comply with the
Companies ▇▇▇ ▇▇▇▇.
7.3 PREPARATION
7.3.1 The Completion Accounts shall be delivered to the Purchaser by the
Vendors as soon as is practicable following Completion and, in any
event, not later than 60 days after Completion. Prior to such
delivery, the Vendors shall so far as is practicable consult with
the Purchaser with a view to reducing the potential areas of
future disagreement.
7.3.2 If the Purchaser does not within 30 days of presentation to it of
the Completion Accounts give notice to the Purchaser that it
disagrees with the Completion Accounts or any item thereof such
notice stating the reasons for the disagreement in reasonable
detail (the PURCHASER'S DISAGREEMENT NOTICE), the Completion
Accounts shall be final and binding on the parties for all
purposes. If the Purchaser gives a valid Purchaser's Disagreement
Notice within such 30 days, the parties shall attempt in good
faith to reach agreement in respect thereof and, if they are
unable to do so within 21 days of such notification, either party
may by notice to the other (or, in the case of the Vendors, the
Vendors' Representative acting on behalf of the Vendors) require
that the Completion Account be referred to the Reporting
Accountants (an APPOINTMENT NOTICE).
7.3.3 Within 21 days of the giving of an Appointment Notice, the Vendors
may by notice to the Purchaser indicate that, in the light of the
fact that the Purchaser has not accepted the Completion Accounts
in its entirety, they wish the Reporting Accountants to consider
matters relating to the Completion Accounts in addition to those
specified in the Purchaser Disagreement Notice, such notice
stating in reasonable detail the reasons why and in what respects
the Vendors believe that the Completion Accounts should be altered
(the VENDOR DISAGREEMENT NOTICE).
7.3.4 The Reporting Accountants shall be engaged jointly by the parties
on the terms set out in this Clause 7.3 and otherwise on such
terms as shall be agreed; provided that neither party shall
unreasonably (having regard, inter alia, to the provisions of this
Clause 7.3) refuse its agreement to terms proposed by the
Reporting Accountants or by the other party. If the terms of
engagement of the Reporting Accountants have not been settled
within 45 days of their identity having been determined (or such
longer period as the parties may agree) then, unless one party is
unreasonably refusing its agreement to those terms, those
accountants shall be deemed never to have become the Reporting
Accountants and new Reporting Accountants shall be selected in
accordance with the provisions of this Agreement.
7.3.5 Except to the extent that the parties agree otherwise, the
Reporting Accountants shall determine their own procedure but:
(i) apart from procedural matters and as otherwise set out in
this Agreement, shall determine only:
(a) whether any of the arguments for an alteration to
the Completion Accounts put forward in the
Purchaser's Disagreement Notice or the Vendors'
Disagreement Notice is correct in whole or in part;
and
(b) if so, what alterations should be made to the
Completion Accounts in order to correct the relevant
inaccuracy in it;
(ii) shall make their determination pursuant to Clause 7.3.5(i)
above as soon as is reasonably practicable;
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(iii) the procedure of the Reporting Accountants shall:
(a) give the parties a reasonable opportunity to make
written and oral representations to them;
(b) require that the parties supply each other with a copy
of any written representations at the same time as they
are made to the Reporting Accountants;
(c) permit each party to be present while oral submissions
are being made by any other party; and
(d) for the avoidance of doubt, the Reporting Accountants
shall not be entitled to determine the scope of their
own jurisdiction.
7.3.6 The determination of the Reporting Accountants pursuant to Clause
7.3.5(i) shall (i) be made in writing and made available for
collection by the parties at the offices of the Reporting
Accountants at such time as they shall determine and notify the
parties hereto in writing and (ii) unless otherwise agreed by the
parties include reasons for each relevant determination.
7.3.7 The Reporting Accountants shall act as experts and not as
arbitrators and their determination of any matter falling within
their jurisdiction shall be final and binding on the parties save
in the event of manifest error (when the relevant part of their
determination shall be void and the matter shall be remitted to the
Reporting Accountants for correction). In particular, without
limitation:
(i) their determination shall be deemed to be incorporated into
the Completion Accounts, which shall then be final and
binding on the parties save as aforesaid;
(ii) their determination of any fact which they have found it
necessary to determine for their determination pursuant to
Clause 7.3.5(i) shall be final and binding on the parties for
the purposes of finalisation of the Completion Accounts.
7.3.8 The expenses of the Reporting Accountants shall be borne as they
shall direct at the time they make any determination under Clause
7.3.5(i) or, failing such direction, equally between the Purchaser,
on the one hand, and the Vendors, on the other.
7.3.9 The parties shall co-operate with the Reporting Accountants and
comply with their reasonable requests made in connection with the
carrying out of their duties under this Agreement. In particular,
without limitation, the Purchaser shall keep up to date and,
subject to reasonable notice, make available to the Vendors'
representatives, the Vendors' accountants and the Reporting
Accountants, its books and records relating to the businesses of
the Company during normal office hours during the period from the
appointment of the Reporting Accountants down to the making of the
relevant determination.
7.3.10 Subject to Clause 7.3.11, nothing in this Clause 7.3 shall entitle
a party or the Reporting Accountants access to any information or
document which is protected by legal professional privilege, or
which has been prepared by the other party or its accountants and
other professional advisers with a view to assessing the merits of
any claim or argument.
7.3.11 A party shall not be entitled by reason of Clause 7.3.10 to refuse
to supply such part or parts of documents as contain only the facts
on which the relevant claim or argument is based.
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7.3.12 Each party and the Reporting Accountants shall, and shall
procure that its accountants and other advisers shall, keep
all information and documents provided to them pursuant to
this Clause 7.3 confidential and shall not use the same for
any purpose, except for disclosure or use in connection with
the preparation of the Completion Accounts, the proceedings of
the Reporting Accountants or another matter arising out of
this Agreement or in defending any claim or argument or
alleged claim or argument relating to this Agreement or its
subject matter.
7.4 ADJUSTMENT OF CONSIDERATION
7.4.1 The Net Working Capital of the Company as at the Completion
Date and as derived from the Completion Accounts is referred
to herein as the COMPLETION WORKING CAPITAL.
7.4.2 Within 14 days of either the Completion Accounts becoming
final and binding under Clause 7.3.2 or the determination of
the Reporting Accountants being made available for collection
by the parties pursuant to Clause 7.3.6 or in the case of
(ii) below 7 April 1999 if later than these dates,
(i) if the Net Working Capital at Completion is less than
the Minimum Working Capital the Vendors shall pay to
the Purchaser the amount of the shortfall or
(ii) if the Net Working Capital at Completion is more than
the Minimum Working Capital the Purchaser will cause
the Company to pay to the Vendors' Solicitors on behalf
of the Vendors by way of dividend on the Shares an
amount equal to the excess (but net of taxes required
by law to be deducted therefrom or payable by the
Purchaser in respect thereof) PROVIDED that the Company
would not have had to borrow funds (directly or
indirectly) to pay any part of the dividend payment
immediately prior to Completion and (the money
currently on deposit by the Company on the money
market shall be treated as immediately available funds
for these purposes). If the Company would have had to
borrow funds to satisfy any such part of the dividend
payment, the payment of such amount will be delayed
until such time as the Company does not have to borrow
such funds.
8 RESTRICTIONS ON THE SALE OF THE CONSIDERATION SHARES
8.1 The Vendors agree to comply with any restrictions on the sale of the
Consideration Shares held by them following Completion as are set out in
the Nextera Stockholders Agreement.
9 RESTRICTIONS ON THE VENDORS
9.1 RESTRICTIONS
Each Vendor severally undertakes with the Purchaser and its successors in
title as trustee for the Purchaser and the Purchaser's Group that the
Vendor will not and will procure that no person, firm or company carrying
on with the consent or privity of the Vendor any business with the Vendor
in competition with the Purchaser or the Purchaser's Group will in any
Relevant Capacity during the Restricted Period:
9.1.1 canvass or solicit the custom of any person, firm or company
who has within two years prior to Completion been a Client of
Alexander; or
9.1.2 induce or seek to induce any present employee of the Nextera
Group to become employed whether as employee, consultant or
otherwise by any of the Vendors or any undertaking or company
associated with or controlled by a Vendor.
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9.2 REASONABLENESS OF RESTRICTIONS
Each Vendor agrees that he considers that the restrictions contained in
this Clause are no greater than is reasonable and necessary for the
protection of the interest of the Purchaser and the Purchaser's Group
but if any such restriction shall be held to be void but would be valid
if deleted in part or reduced in application, such restriction shall
apply with such deletion or modification as may be necessary to make it
valid and enforceable.
9.3 INTERPRETATION
The following terms shall have the following meanings respectively in
this Clause 9:
9.3.1 RESTRICTED PERIOD means two years commencing on Completion;
9.3.2 RELEVANT CAPACITY means for his own account or for that of any
person, firm or company (other than the Company or the
Purchaser's Group) or in any other manner and whether through
the medium of any company controlled by him (for which purpose
there shall be aggregated with its or his shareholding or
ability to exercise control the shares held or control exercised
by any person connected with him) or as principal, partner,
director, employee, consultant or agent.
10 RESTRICTIONS ON THE PURCHASER
10.1 During the Earn Out Period, the Purchaser shall procure, subject to
Clauses 10.2 and 10.3 below:
10.1.1 that no member of the Purchaser's Group will solicit or
endeavour to entice away or offer employment to or offer to
engage under any contract for services any of the employees of
the Company engaged in an executive or managerial or technical
capacity (except where those employees themselves are recruited
for the Company by a member of the Purchaser's Group after the
date hereof); and
10.1.2 that no member of the Purchaser's Group will (except in the
ordinary course of its business or to the extent required by law
or where the same has come into the public domain through no
default of the Purchaser's Group) disclose to any third party
any (not being a member of the Purchaser's Group) confidential
information relating to the business of the Company or its
customers or clients.
10.2 BREACH OF THIS AGREEMENT
The provisions of Clause 10.1 above shall not prevent any member of the
Purchaser's Group from doing anything which is necessary to remedy the
effects of any breach by the Vendors of their obligations under this
Agreement and/or the Tax Deed of Covenant which the Vendors themselves
have not remedied within a reasonable period time after written notice
from the Purchaser.
10.3 WAIVER
Nothing in Clause 10.1 above shall prevent the Purchaser or any member
of the Purchaser's Group from taking any action which the Vendors'
Representative has specifically agreed to in writing on behalf of the
Vendors with express reference to this Clause.
10.4 INSPECTION
Each of the Vendors and the Vendors' Representatives shall be permitted
at all reasonable times to inspect the books, papers and financial
records of the Company (but only to the extent necessary to verify due
performance by the Purchaser with its obligations in relation to the
Earn Out Period and/or proper calculation of the Vendors Deferred
Consideration) of the Purchaser's Group and to take copies of the same
or extracts therefrom and shall also during the Earn Out period and to
the extent aforesaid be entitled to be provided with such other
financial and
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business information in relation to the Company as he shall from time
to time reasonably require, subject always to his maintaining any such
confidential information as confidential in accordance with the
provisions of the Agreement.
10.5 ADJUSTMENT
If the Purchaser is in breach of Clause 10.1 above then (and as the
Vendors sole remedy) any adverse effect the subject matter of the
breach has on the Company's Cumulative Revenue and/or the Company's
Cumulative Profit Before Tax shall be reversed and suitably adjusted
when determining the Vendors Deferred Consideration and any dispute of
the amount which shall be reversed or adjusted shall be referred to the
Reporting Accountant in accordance with clause 7.3.4.
11 VENDORS' REPRESENTATIVE
11.1 Any consent or agreement or direction or waiver given or made by the
Vendors' Representative or Vendors' Solicitors for the purposes of this
Agreement shall be binding upon all of the Vendors.
11.2 Delivery of any document or payment required to be made to the Vendors
or any of them hereunder may be made to the Vendor's Solicitors (REF
ACG/752614) whose receipt for such delivery or payment shall be an
absolute discharge of the Purchaser who shall not be concerned with the
application thereof.
11.3 The Vendors' Representative is hereby authorized by the Vendors to act
in the way contemplated by this Agreement and to take such decisions as
he shall at his entire discretion determine and, provided he acts in
good faith, the Vendors' Representative shall have and accepts no
liability to any of the Vendors or to any other person other than the
Purchaser in connection with or as a result of anything which such
Vendors' Representative does or refrains from doing or neglects or
omits to do in connection with any matter relating to this Agreement.
11.4 As between the Vendors, the Vendors' Representative shall not be
required to expend any of his own money on or in relation to matters
referred to in this Agreement and, without prejudice to the generality
of the foregoing, may decline to take any steps in relation to any
claim under Warranties or Tax Deed of Covenant unless he has been
indemnified or secured (if and to the extent he so requires) to his
full satisfaction by the Vendors he represents in respect of the
maximum amount of the expenses and other liabilities of any kind which
he reasonably considers that he will or may incur in connection with or
as a result of such proceedings and such indemnities or securities
shall be such as to ensure that the Vendors' Representative has
immediate access to all such funds as he may require in order to meet
all such expenses or other liabilities as they fall PROVIDED THAT the
Vendors' Representative shall be obliged to pay his appropriate
proportion of such expenses and liabilities.
12 OTHER PROVISIONS
12.1 LIABILITY
Except where provision is specifically made to the contrary, the
liability of each of the Vendors under or pursuant to any of the
provisions of this Agreement shall be several. Any liability to a party
under this Agreement may in whole or in part be released, compounded or
compromised, or time or indulgence given by the party to whom it is
owed in its absolute discretion as regards any party under such
liability without in any way prejudicing or affecting its rights
against any other or others of the parties under the same or a like
liability whether joint and several or otherwise.
12.2 ANNOUNCEMENTS
No public announcement (excluding announcements (not disclosing the
amount of the consideration paid hereunder) to employees, customers and
suppliers of the Company)
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concerning the transactions contemplated by, or the terms of, this
Agreement shall (save as required by law or by the United States
securities authorities) be made by either party, unless the written
consent of the other has been obtained and the terms of the announcement
have been agreed in advance which consent shall not be unreasonably
withheld. In the case of the Vendors any such consent shall be given by
the Vendors' Representative on their behalf.
12.3 SUCCESSORS AND ASSIGNS
12.3.1 The Vendors agree that the benefit of every provision in this
Agreement is given to the Purchaser for itself and its
successors in title and assigns. Accordingly, the Purchaser (and
its successors and permitted assigns) may, without the consent
of the Vendors, assign the benefit of all or any of the Vendors'
obligations under this Agreement, and/or any benefit arising
under or out of this Agreement to any entity which is its
subsidiary, holding company or a subsidiary of any such holding
company.
12.3.2 The Vendors may not assign the benefit of all or any of the
Purchaser's obligations under this Agreement except with the
written consent of the Purchaser, however the vendors may
transfer their shares in Nextera by way of Qualified Transfer
under the Nextera Stockholders Agreement.
12.4 VARIATIONS
No variation of this Agreement shall be effective unless in writing and
signed by or on behalf of each of the parties to this Agreement.
12.5 TIME OF THE ESSENCE
Any time, date or period referred to in any provision of this Agreement
may be extended by mutual agreement between the parties but as regards
any time, date or period originally fixed or any time, date or period so
extended time shall be of the essence.
12.6 FURTHER ASSURANCE
At any time after the date of this Agreement each Vendor shall and shall
use his best endeavours to procure that any necessary third party shall
execute such documents and do such acts and things as the Purchaser may
reasonably require for the purpose of perfecting the transfer of his
shares to the Purchaser PROVIDED THAT nothing in this Agreement shall
oblige a Vendor to bear any stamp duty, or stamp duty reserve tax
attributable to the sale or transfer of his Shares hereunder.
12.7 COSTS
The Vendors shall bear all legal, accountancy and other costs and
expenses incurred by them in connection with this Agreement, the Tax
Deed of Covenant and the sale of the Shares. The Purchaser shall bear
all such costs and expenses incurred by it.
12.8 INTEREST
If the Vendors or the Purchaser default in the payment when due of any
sum payable under this Agreement or the Tax Deed of Covenant (whether
determined by agreement or pursuant to an order of a court or otherwise)
the liability of the Vendors or the Purchaser (as the case may be) shall
be increased to include interest on such sum from the date when such
payment is due until the date of actual payment (as well after as before
judgment) at a rate per annum of one per cent above the base rate from
time to time of Midland Bank PLC. Such interest shall accrue from day to
day.
12.9 SPECIFIC PERFORMANCE
The parties agree that it would be difficult to measure damages which
might result from a breach of this Agreement by the either and that
money damages would be an inadequate remedy for such a breach.
Accordingly, if there is a breach or proposed breach of any provision of
this
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Agreement by any party to this agreement shall be entitled, in addition
to any other remedies which it may have, to an injunction or other
appropriate equitable relief to restrain such breach without having to
show or prove actual damage.
12.10 NOTICES
12.01.1 Any notice or other communication requiring to be given or
served under or in connection with this Agreement shall be in
writing and shall be sufficiently given or served if delivered
or sent,
In the case of any of the Vendors, to the Vendors' Solicitors
at:
Address: Gouldens
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇ ▇▇▇
Fax: ▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇ (FILE 752614)
In the case of the Purchaser to Nextera Enterprises, Inc. at:
Address: Nextera Enterprises, Inc.
c/o Sibson UK Limited
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▇▇▇▇▇▇ ▇▇▇▇▇
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Fax: ▇▇▇▇▇ ▇▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
with a copy to:
Address: Nextera Enterprises, Inc.
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▇▇ ▇▇▇▇▇
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Fax: ▇▇▇▇▇ ▇▇▇ ▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇
and a copy to:
Address: Maron & Sandler
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Attention: ▇▇▇ ▇▇▇▇▇
Either party may by notice in writing under this clause change
the required address or reference to which notices must be sent.
12.10.2 Any such notice or other communication shall be delivered by
hand or sent by courier, fax or prepaid first class post
(airmail if sent to or from the United Kingdom). If sent by
courier or fax such notice or communication shall conclusively
be deemed to have been given or served at the time of dispatch,
in case of service in the United Kingdom, or on the following
Business Day in the case of international service. If sent by
post such notice or communication shall conclusively be deemed
to have been received two Business Days from the time of
posting, in the case of inland mail in the United Kingdom or
three Business Days from the time of posting in the case of
international mail.
12.11 SEVERANCE
If any term or provision in this Agreement is held to be illegal or
unenforceable, in whole or in part, under any enactment or rule of law,
such term or provision or part shall to that extent be deemed not to
form part of this Agreement but the enforceability of the remainder of
this Agreement shall not be affected.
12.12 COUNTERPARTS
This Agreement may be executed in any number of counterparts each of
which shall be deemed an original, but all the counterparts shall
together constitute one and the same instrument.
12.13 GOVERNING LAW AND SUBMISSION TO JURISDICTION
This Agreement and the documents to be entered into pursuant to it,
save as expressly referred to therein, shall be governed by and
construed in accordance with English law and all the parties
irrevocably agree that (save as expressly referred to therein) the
courts of England are to have exclusive jurisdiction to settle any
disputes which may arise out of or in connection with this Agreement and
such documents Provided that nothing in this clause shall prevent the
Vendors or any of them from enforcing any judgment or order of such
Court against the Purchaser or its assets in any jurisdiction or affect
any related rights of the Vendors.
12.14 APPOINTMENT OF PROCESS AGENT
The Purchaser irrevocably appoints Sibson UK Limited as its agent to
accept service of process in England in any legal action or proceedings
arising out of or in connection with this Agreement, service upon whom
shall be deemed completed whether or not forwarded to or received by
the Purchaser. If such process agent ceases to be able to act as such
or to have an address in England, the Purchaser irrevocably agrees to
appoint a new process agent in England acceptable to the other Parties
and to deliver to the other Parties within 14 days a copy of a written
acceptance of appointment by the process agent. Nothing in this
Agreement shall effect the right to serve process in any other manner
permitted by law.
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SCHEDULE 1
PART 1
PARTICULARS OF VENDORS, SHARES SOLD ETC.
(1) (2) (3) (4) (5) (6)
NAMES AND SHARES CONSIDERATION INITIAL CASH WARRANTY/ PAYE
ADDRESSES OF SOLD SHARES CONSIDERATION TAX CLAIM LIABILITY
VENDORS ORDINARY (L) % L
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ 504 78,100 L142,921 50.4% 0
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 121 18,750 L34,313 12.1% 0
▇▇▇▇▇▇ ▇▇▇▇▇▇ 73 11,311 L20,700 7.3% L4,591
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 121 18,750 L34,313 12.1% L20,160
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ 123 19,060 L34,880 12.3% L20,559
▇▇▇ ▇▇▇▇▇ 26 4,029 L7,373 2.6% L1,397
▇▇▇▇▇▇ ▇▇▇▇▇▇* 24 L19,000 2.4% L1,397
▇▇▇▇ ▇▇▇▇▇* 8 L6,500 0.8% L1,597
* non accredited investors
PART 2
PARTICULARS OF DIRECTORS OF THE COMPANY
FULL NAMES USUAL ADDRESS
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PART 3
PARTICULARS OF THE COMPANY
Registered Number: 2204495
Registered Office: ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Date and place of incorporation: 10 December, 1987, Cardiff
Secretary: ▇▇▇▇▇▇ ▇▇▇▇▇
Accounting Reference Date: 31 October
Auditors: BDO ▇▇▇▇ ▇▇▇▇▇▇▇
Solicitors: Gouldens
Authorized Share Capital: L1,000 divided into 1,000 ordinary
shares of L1 each
Issued and fully paid-up Share 1,000 Ordinary Shares of L1 each
Capital:
PART 4
ADDRESSES OF VENDORS
Vendor Address
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SCHEDULE 2
WARRANTIES GIVEN BY THE VENDORS UNDER CLAUSE 5
1 AUTHORITY AND CAPACITY OF THE VENDORS
1.1 The Company is a company duly incorporated and validly existing under
the laws of England and Wales.
1.2 No person has the right (whether exercisable now or in the future and
whether contingent or not) to call for the allotment, conversion, issue,
sale or transfer of any share or loan capital or any other security
giving rise to a right over the capital of the Company under any option
or other agreement (including conversion rights and rights of
pre-emption) and there are no Encumbrances on the Shares of the Company
or any arrangements or obligations to create any Encumbrances.
1.3 The execution and delivery of, and the performance by the Vendors of
their obligations under, this Agreement and the Tax Deed of Covenant and
any other documents to be executed by the Vendors pursuant to or in
connection with this Agreement will not:
1.3.1 result in a breach of any provision of the memorandum or
articles of association of or the Company; or
1.3.2 result in a material breach of or give any third party a right
to terminate or modify, or result in the creation of any
Encumbrance under any material agreement, license or other
instrument or result in a breach of any order, judgment or
decree of any Court, governmental agency or regulatory body to
which the Company is a party or by which the Company is bound.
1.4 The Shares comprise the whole of the allotted and issued share capital
of the Company, have been properly and validly allotted and issued and
are each fully paid.
1.5 The relevant Vendor is entitled to sell and transfer to the Purchaser
the full legal and beneficial ownership of the Shares set opposite his
name in Part 1 of Schedule 1 on the terms of this Agreement without the
consent of any third party and without breaching any order, judgement or
decree of any court, governmental agency or regulatory body by which
that Vendor is bound.
1.6 The relevant Vendor has the legal right and full power and authority to
enter into and perform this Agreement and the Tax Deed of Covenant and
any other documents to be executed by such Vendor pursuant to or in
connection with this Agreement which when duly and validly executed and
delivered by all the parties thereto will constitute valid and binding
obligations on such Vendor, in accordance with their respective terms.
2 ACCURACY AND ADEQUACY OF INFORMATION DISCLOSED TO THE PURCHASER
All information contained in this Agreement and the Disclosure Letter
and Disclosure Bundle has been supplied by the Vendors in good faith in
the honest belief that the information contained in it is correct in all
material respects.
None of the Vendors is aware of any fact or matter or circumstances not
disclosed in writing to the Purchaser which renders any such information
untrue, inaccurate or misleading in any material respect.
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3 ACCOUNTS AND RECORDS
3.1 LATEST ACCOUNTS
The Audited Accounts and the financial statements of the Company for the
year ended 31 October 1996 have been prepared in accordance with
applicable law and in accordance with accounting principles, standards
and practices generally accepted at the date they were prepared in the
United Kingdom and, subject thereto, on a basis consistent with that
adopted in preparing the audited accounts for the previous two financial
periods so as to give a true and fair view of the assets, liabilities and
state of affairs of the Company at the Balance Sheet Date and 31 October
1996 respectively and of the profits or losses for the period concerned
and as at that date make:
3.1.1 full provision for all actual liabilities;
3.1.2 proper provision (or note in accordance with good accountancy
practice) for all contingent liabilities which would normally be
provided for or noted; and
3.2 EXCEPTIONAL ITEMS
The combined profits of the Company for the two years ended on the Balance
Sheet Date as shown by the Audited Accounts and by the audited accounts of
the Company for previous periods delivered to the Purchaser and the trend
of profits thereby shown have not (except as fairly disclosed in such
accounts) been materially affected by changes or inconsistencies in
accounting practices, by the inclusion of non-recurring items of income or
expenditure, by transactions of an abnormal or unusual nature or entered
into otherwise that on normal commercial terms or by any other factors
rendering such profits for all or any of such periods exceptionally high or
low.
3.3 DEBTS
No debts aggregating more than L15,000 and shown in the Audited Accounts as
receivable or due to the Company have been outstanding for more than three
months from their due date for payment and the Vendors are not aware of any
reason why the debts owing to the Company as shown in the Audited Accounts
will not realise in the normal course of collection 95% or greater their
value as included in the Audited Accounts.
3.5 ACCOUNTING AND OTHER RECORDS
The statutory books, books of account and other records of whatsoever kind
of the Company are up-to-date and maintained in accordance with all
applicable legal requirements on a proper and consistent basis and reflect
all matters required to be dealt with in such books and all such books and
records and all other documents (including documents of title and copies
of all subsisting agreements to which the Company is a party) which are
the property of the Company or ought to be in its possession are in its
possession (or under its control) and no notice or allegation that any is
incorrect or should be rectified has been received. All accounts and other
material, documents and returns required by law to be delivered or made to
the Registrar of Companies or any other authority have been duly and
correctly delivered or made.
3.6 CHANGES SINCE BALANCE SHEET DATE
Since the Balance Sheet Date as regards the Company:
3.6.1 there has been no material adverse change in its business or
trading results or, financial conditions;
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3.6.2 its business has been carried on in the ordinary course, without
any material interruption or alteration in its nature, scope or
manner, and so as to maintain the same as a going concern;
3.6.3 it has not entered into any material transaction or assumed or
incurred any material liabilities (including contingent
liabilities) or made any material payment not provided for in the
Audited Accounts otherwise than in the ordinary course of carrying
on its business;
3.6.4 its profits have not been materially affected by changes or
inconsistencies in accounting treatment, by any non-recurring items
of income or expenditure, by transactions of an abnormal or
unusual nature or entered into otherwise than on normal commercial
terms or by any other factors rendering such profits exceptionally
high or low;
3.6.5 to the extent of knowledge of the Vendors its business has not been
materially and adversely affected by the loss of any important
customer or source of supply or by any abnormal factor not
affecting similar businesses to a like extent and there are no
facts which are likely to give rise to any such effects;
3.6.6 no dividend or other distribution has been declared, made or paid
to its members except as provided for in the relevant balance sheet;
3.6.7 no share or loan capital or any other security giving rise to a
right over the capital has been allotted or issued or agreed to be
allotted or issued;
3.6.8 it has not redeemed or purchased or agreed to redeem or purchase
any of its share capital;
3.6.9 it has not made or received any surrender relating to group relief
or the benefit of advance corporation tax;
3.6.10 no insurance claims have been refused or settled below the amount
claimed;
3.6.11 all trade creditors have been paid in the ordinary course of
business and in accordance with the Company's usual practice and
credit terms and such terms have not been substantially varied; and
3.6.12 all debts owed to the Company in the ordinary course of business
have been subject to the Company's usual collection practice and
credit terms and the Company has not extended the terms on which
any trade debtor would normally be required to pay debts due to the
Company.
3.7 1998/1999 RESULTS
The projected operating results for the Company for the years ended 31
October 1998 and 1999 provided to the Purchaser by the Company were
prepaid in good faith and on the basis of assumptions of the Company
which the Vendors believe were reasonable at the time of the preparation
of such projected results and believe still reasonable at the date hereof.
4 LEGAL MATTERS
4.1 COMPLIANCE WITH LAWS
The Company has carried on and is carrying on its business and operations
so that there have been no material breaches of applicable laws,
regulations and bye laws in each country in which they are carried on and
there have not been and are not any material breaches by the Company of
its constitutional documents and there has not been and is no
investigation or enquiry by, or
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order, decree, decision or judgment of, any court, tribunal, arbitrator,
governmental agency or regulatory body outstanding or anticipated by the
Vendors against the Company or any person for whose acts or defaults it
may be vicariously liable, nor any notice or other communication (official
or otherwise) from any court, tribunal, arbitrator, governmental agency or
regulatory body with respect to an alleged actual or potential violation
and/or failure to comply with any such applicable law, regulation, bye law
or constitutional document, or requiring it/them to take or omit any
action.
4.2 LICENCES, CONSENTS ETC.
All licences, consents, authorisations, orders, warrants, confirmations,
permissions, certificates, approvals and authorities (LICENCES) necessary
or desirable for the carrying on of the businesses and operations of each
of the Company have been obtained, are not limited in duration, nor
subject to onerous conditions, are in full force and effect and have been
and are being complied with in all material respects. There is no
investigation, enquiry or proceeding outstanding or anticipated by the
Vendors which they believe is likely to result in the suspension,
cancellation, modification or revocation of any of such Licences. So far
as the Vendors are aware, none of such Licences has been breached or is
likely to be suspended, cancelled, refused, modified or revoked (whether
as a result of the entry into or completion of this Agreement or
otherwise).
4.3 LITIGATION
4.3.1 Since the Balance Sheet Date no claim for damages has been made
against the Company.
4.3.2 The Company (or any person for whose acts or defaults the Company
may be vicariously liable) is not involved whether as plaintiff or
defendant or other party in any claim, legal action, proceeding,
suit, litigation, prosecution, investigation, enquiry or
arbitration (other than as plaintiff in the collection of debts
arising in the ordinary course of its business up to an aggregate
amount of L20,000) and no such claim, legal action, proceeding,
suit, litigation, prosecution, investigation, enquiry or
arbitration is pending or threatened by or against the Company (or
any person for whose acts or defaults the Company may be
vicariously liable).
4.3.3 There are no investigations, disciplinary proceedings or (so far as
the Vendors are aware) other circumstances likely to lead to any
such claim or legal action, proceeding, suit, litigation,
prosecution, investigation, enquiry or arbitration.
4.4 INSOLVENCY ETC.
4.4.1 No order has been made, petition presented, resolution passed or
meeting convened for the winding up (or other process whereby the
business is terminated and the assets of the company concerned are
distributed amongst the creditors and/or shareholders or other
contributories) of the Company and there are no cases or proceedings
under any applicable insolvency, reorganisation or similar laws in
any jurisdiction concerning the Company and (so far as the Vendors
are aware) no events have occurred which, under applicable laws,
would justify any such cases or proceedings.
4.4.2 No petition has been presented or other proceedings have been
commenced for an administration order to be made (or any other
order to be made by which during the period it is in force, the
affairs, business and assets of the company concerned are managed
by a person appointed for the purpose by a Court, governmental
agency or similar body) in relation to the Company, nor has any
such order been made.
4.4.3 No receiver (including an administrative receiver), liquidator,
trustee, administrator, custodian or similar official has been
appointed in any jurisdiction in respect of the
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whole or any part of the business or assets of the Company and no
step has been taken for or with a view to the appointment of such a
person.
4.4.4 The Company is not insolvent nor unable to pay its debts as they
fall due.
5 TRADING AND CONTRACTUAL ARRANGEMENTS
5.1 CAPITAL COMMITMENTS
There are no capital commitments entered into or proposed by the Company.
5.2 ARRANGEMENTS WITH CONNECTED PERSONS ETC.
5.2.1 Except for salary and other employment benefits and reasonable
expenses incurred in the ordinary course of business, there is no
indebtedness (actual or contingent) nor any indemnity, guarantee or
security arrangement between the Company or the Vendors and any
current or former employee, current or former director or any
current or former consultant of the Company or any person known by
the Vendors to be connected with any of such persons.
5.2.2 Except for employment or consultancy agreements in the ordinary
course of this Company's business or for its Articles of
Association, the Company is not nor has it been party to any
material contract or, arrangement with any current or former
employee, current or former director or any current or former
consultant of the Company or any person known by the Vendors to be
connected with any of such persons, or in which any such person as
aforesaid is known by the Vendors to be interested (whether directly
or indirectly).
5.2.3 Except for its Articles of Association there are no existing
contracts or arrangements between or involving the Company and any
of the Vendors and/or any director of the Company and/or any person
known by the Vendors to be connected with any of them (other than
employment and/or service contracts and/or Consulting Agreements).
5.3 CONTRACTS
5.3.1 The Company is not, nor since the Balance Sheet Date has it been,
party to any unusual, long-term or materially onerous commitments,
contracts or arrangements or any such not wholly on an arm's length
basis in the ordinary course of business.
5.3.2 THE COMPANY
(i) is not party to any commitment, contract or arrangement
which is of a loss-making nature (that is, known by the
Vendors to be likely to result in a material loss on
completion of performance) or which cannot readily be
fulfilled or performed on time without undue or unusual
expenditure of money or effort;
(ii) is not party to any agency, distributorship, marketing,
purchasing, manufacturing or licensing agreement or
arrangement or any agreement or arrangement which restricts
its freedom to carry on its business in any part of the
world in such manner as it thinks fit; or
(iii) is not, and has not agreed to become, a member of any joint
venture, consortium, partnership or other unincorporated
association.
5.4 COMPLIANCE WITH AGREEMENTS
All the material contracts, leases, tenancies, licenses, concessions and
agreements of whatsoever nature to which the Company is a party are so far
as the Vendors are aware valid, binding obligations of the parties thereto
and the terms thereof have been complied with by the Company and by all the
other parties thereto in all material respects and so far as the Vendors are
--------------------------------------------------------------------------------
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aware there are no grounds for rescission, avoidance or repudiation of
any of the contracts or such leases, tenancies, licences, concessions
or agreements and no notice of termination or of intention to terminate
has been received by the Vendors in respect of any thereof.
5.5 ANTI-TRUST
The Company is not a party to any agreement, arrangement or concerned
practice or is carrying on any practice which in whole or in part
contravenes or is invalidated by any anti-trust, fair trading, consumer
protection or similar legislation in any jurisdiction or in respect of
which any filing, registration or notification is required or is
advisable pursuant to such legislation (whether or not the same has in
fact been made).
5.6 GUARANTEES ETC.
Save as disclosed in the Audited Accounts, there is not outstanding any
guarantee, indemnity, suretyship or comfort (whether or not legally
binding) given by or for the benefit of the Company.
6 EMPLOYEES ETC.
6.1 EMPLOYEES AND TERMS OF EMPLOYMENT
6.1.1 There are no employees employed in the Company other than those
whose details are set out in the Disclosure Letter.
6.1.2 There is not in existence any written contract of employment
with any director or employee of the Company, nor any
consultancy agreements with the Company, which cannot be
terminated by three months' notice or less without giving rise
to any claim for damages or compensation (other than a
statutory redundancy payment or statutory compensation for
unfair dismissal).
6.1.3 The Disclosure Letter contains full details, in relation to the
Company, of:
(i) the total number of employees (including those who are
on maternity or paternity leave or absent on the
grounds of disability or other long-term leave of
absence, and have or may have a statutory or
contractual right to return to work in the Company);
(ii) the name, date of commencement of employment, period of
continuous employment, location, salary and other
material benefits, grade and age of each employee;
(iii) where any employee is continuously absent from work for
a period in excess of one month, the reason for the
absence;
(iv) the terms of the contract of employment of each
employee (excluding those who will enter into new
Service Agreements pursuant to Clause 4 of this
Agreement) entitled to salary at a rate in excess of
L25,000 a year;
(v) the terms of all material consultancy agreements;
(vi) the standard terms and conditions (if any) which apply
to employees of the Company; and
(vii) any written personnel policies of the Company,
including any employee handbook and any announcements
varying their contents.
6.1.4 Except for the resignation of the directors and secretary of
the Company pursuant to Clause 4.2.2 of this Agreement, there
are no proposals of the Company to terminate the employment or
consultancy of any employees or consultants of the Company or
to vary
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or amend their terms of employment or consultancy (whether to
their detriment or benefit).
6.1.5 No employee of the Company has been given notice terminating his
contract and so far as the Vendors are aware no employee intends
to leave his employment with the Company.
6.1.6 There are no terms of employment for employees of the Company or
consultancy agreements with the Company or terms of appointment
for directors of the Company which provide that a change in
control of the Company (however change in control may be defined
in the said document, if at all) shall entitle the said employee,
consultant or director to treat the change in control as amounting
to a breach of the contract or entitling him to any payment or
benefit whatsoever or entitling him to treat himself as redundant
or dismissed or released from any obligation.
6.1.7 The Company has made no promises to increase the salary or
benefits of any of its employees or directors and (except for
those contemplated by this Agreement) no changes have been
proposed by the Company to any of the terms of employment of its
employees.
6.2 PAYMENTS ON TERMINATION
Except as disclosed in the Audited Accounts:
6.2.1 no liability has been or may be incurred by the Company for breach
of any contract of employment or consultancy with any employee or
consultant including, without limitation, redundancy payments,
protective awards, compensation for wrongful dismissal or unfair
dismissal or for failure to comply with any order for the
reinstatement or re-engagement of any employee; and
6.2.2 the Company has not made or agreed to make any payment or provided
or agreed to provide any benefit to any employee or former
employee of the Company or any dependent of any such employee or
former employee in connection with the proposed termination or
suspension of employment or variation of any contract of
employment of any such employee or former employee.
6.3 TRADE DISPUTES
The Company is not involved in, and (so far as the Vendors are aware)
there are no circumstances likely to give rise to, any industrial or
trade dispute or any dispute or negotiation regarding a claim of material
importance with any trade union or other body (in either case recognised
by the Company for collective bargaining or other negotiating purposes)
representing any of the employees.
6.4 INCENTIVE SCHEMES
There is not in existence nor is it proposed to introduce any share
incentive, share option, profit sharing, bonus or other incentive
arrangements for or affecting any employees or former employees.
6.5 PENSIONS
6.5.1 The Pension Scheme is the only scheme to which the Company makes
or could become liable to make payments for providing retirement,
death, disability or life assurance benefits. No proposal has been
announced to establish any other scheme for providing any such
benefits and the Company does not provide and has not promised to
provide any such benefits except under the Pension Scheme.
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6.5.2 The Pension Scheme is an exempt approved scheme within the meaning
of Chapter I Part XIV of the Income and Corporation Taxes Act 1988
(ICTA 1988). Members of the Pension Scheme are not contracted-out of
the State Earnings Related Pension Scheme. The Pension Scheme
complies, and has been managed in accordance, with all applicable
laws, regulations and requirements.
6.5.3 There are attached to the Disclosure Letter copies of:
(i) all the trust deeds and rules of the Pension Scheme
(including any draft amendments);
(ii) all explanatory booklets and announcements relating to the
Pension Scheme; and
(iii) all benefit projections for any members of the Pension Scheme.
These documents contain full details of all benefits payable under
the Pension Scheme. No power to increase those benefits or to
provide different benefits has been exercised, and there are no
circumstances in which there is a practice of exercising such a
power under the Pension Scheme. In particular, the Company has
never undertaken and there is no obligation under the Pension
Scheme to provide a minimum level of benefits in respect of any
person.
6.5.4 The Vendors have notified the Purchaser in the Disclosure Letter of
the rate at which contributions to the Pension Scheme are being
paid and the basis on which they are calculated, and whether they
are paid in advance or in arrear. All amounts due to the Pension
Scheme have been paid.
7 TAXATION MATTERS
7.1 RETURNS AND INFORMATION
7.1.1 All returns, computations, notices and information which are or
have been required to be made or given by the Company for any
Taxation purpose (i) have been made or given within the requisite
periods and on a proper basis and are up-to-date and correct in
all material respects and (ii) none of them is, or is believed by
the Vendors to be likely to be, the subject of any dispute with the
Inland Revenue or other Taxation authorities.
7.1.2 The Company is in possession of sufficient information or has
reasonable access to such information to enable it to compute its
liability to Taxation insofar as it depends on any Transaction
occurring on or before Completion.
7.2 TAXATION CLAIMS, LIABILITIES AND RELIEFS
7.2.1 There are set out in the Disclosure Letter, with express reference
to this paragraph, particulars of all matters relating to Taxation
in respect of which the Company (either alone or jointly with any
other person) has, or at Completion will have, an outstanding
entitlement to make:
(i) any claim (including a supplementary claim) for relief;
(ii) any election, including an election for one type of relief,
or one basis, system or method of Taxation, as opposed to
another;
(iii) any appeal or further appeal against an assessment to
Taxation;
(iv) any application for the postponement of, or payment by
instalments of, Taxation; or
(v) or to disclaim or require the postponement of any allowance
or relief.
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Such particulars are sufficient to enable the Purchaser to procure
that any time limit to such entitlement expiring after Completion
can be met.
Neither the Company nor any director or officer of the Company has in the
period of three (3) years prior to Completion paid, or become liable to
pay, any fine, penalty or interest charged by virtue of the Taxes
Management ▇▇▇ ▇▇▇▇ or the Value Added Tax ▇▇▇ ▇▇▇▇ or any other
statutory provision relating to Taxation.
8 ASSETS (OTHER THAN THE PROPERTIES)
8.1 SUBSIDIARIES
The Company has no subsidiaries or investments in any other corporation
or business organisation.
8.2 TITLE TO ASSETS
All assets (other than the Properties) of the Company including all debts
due to the Company which are included in the Audited Accounts or have
otherwise been represented as being the property of or due to the Company
or at the Balance Sheet Date used or held for the purposes of its business
were at the Balance Sheet Date the absolute property of the Company and
(save for those subsequently disposed of or realised in the ordinary
course of trading) all such assets and all assets and debts which have
subsequently been acquired or arisen are the absolute property of the
Company and none is the subject of any assignment or Encumbrance
(excepting only liens arising by operation of law in the normal course of
trading) or the subject of any factoring arrangement, hire-purchase,
conditional sale or credit sale agreement.
8.3 SUFFICIENCY OF ASSETS
The property, rights and assets owned or leased by the Company comprise
all the property, rights and assets which the Vendors reasonably believe
are necessary for the carrying on of the business of the Company in the
manner and to the extent to which it is presently conducted.
8.4 INSURANCE
All material details of the present insurances of the Company are set out
in the Disclosure Letter and in respect of all such insurances:
8.4.1 all premiums have been duly paid to date;
8.4.2 so far as the Vendors are aware all the policies are in full force
and effect and no act, omission, misrepresentation or non-disclosure
by or on behalf of the Company has occurred which makes any of these
policies voidable, nor so far as the Vendors are aware have any
circumstances arisen which would render any of these policies void
or unenforceable for illegality or otherwise, nor so far as the
Vendors are aware has there been any breach of the terms, conditions
and warranties of any of the policies that would entitle insurers to
decline to pay all or any part of any claim made under the policies;
8.4.3 there are no special or unusual limits, terms, exclusions or
restrictions in any of the policies and the premiums payable are not
in excess of the normal rates and no circumstances exist which are
likely to give rise to any increase in premiums; and
8.4.4 details of all claims made during the period of three years
preceding the date of this Agreement are contained in the Disclosure
Letter and so far as the Vendors are aware no circumstances exist
which are likely to give rise to any
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8.5 PLANT AND MACHINERY ETC.
The plant, machinery, vehicles and all other equipment owned or used in
connection with the business of the Company are in good repair and
condition (fair wear and tear excepted) and satisfactory working order
and has been maintained and are not dangerous, obsolete, inefficient or
surplus to requirements.
8.6 INTELLECTUAL PROPERTY
8.6.1 All intellectual property rights including trade marks, service
marks, trade names, logos, get-up, patents, inventions, registered
and unregistered design rights, copyrights, semi-conductor
topography rights, rights of extraction relating to databases,
know-how and other confidential information and all other similar
proprietary rights which may subsist in any part of the world
(whether registered or not), and all pending applications therefor,
which are used in the business of the Company are (or, where
appropriate in the case of pending applications, will be):
(i) legally and beneficially owned by, licensed to or used under
the authority of the owner by the Company. Brief details of
all such material licenses and authorities are set out in
Part 3 of Schedule 5 excluding any shrink-wrap licenses for
computer software;
(ii) so far as the Vendors are aware valid and enforceable;
(iii) so far as the Vendors are aware not being infringed or
attacked or opposed by any person;
(iv) not subject to any license or authority granted by the
Company in favour of another;
and so far as the Vendors aware no claims have been made and no
applications are pending, which if pursued or granted might be
material to the truth and accuracy of any of the above.
8.6.2 The processes employed and the products and services dealt in by
the Company do not use, embody or infringe any intellectual
property rights of the type listed in paragraph 8.6.1 above of
third parties (other than those belonging to or licensed to the
Company and referred to in Schedule 5) and no claims of
infringement of any such intellectual property rights have been
made by any third party.
8.6.3 There are no outstanding or potential claims against the Company
under any contract or under Section 40 of the Patents ▇▇▇ ▇▇▇▇ for
employee compensation in respect of any intellectual property
rights.
8.6.4 So far as the Vendors are aware there has been and is no misuse of
know-how by the Company and no moral rights have been asserted
which would materially and adversely affect the use of any of the
intellectual property rights.
8.7 ABSENCE OF UNDISCLOSED LIABILITIES
There are no material liabilities of the Company other than (i)
liabilities disclosed or provided for in the Audited Accounts and/or the
Completion Accounts; (ii) liabilities incurred in the ordinary course of
business since the Balance Sheet Date, none of which is material; or
(iii) liabilities disclosed elsewhere in this Agreement.
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9 LEASEHOLD PROPERTY
9.1 LEASEHOLD PROPERTIES
The interest of the Company in the Property is leasehold and the requisite
details have been completed in Schedule 4 and:
9.1.1 There is no material subsisting breach, nor any material
non-observance of any covenant, condition or agreement contained in
the Lease on the part of either the relevant landlord so far as the
Vendors are aware or the Company and no landlord has refused to
accept rent or made any complaint or objection.
9.1.2 No alterations have been made to the Property at the expense of the
Company without all necessary consents and approvals and all such
alterations to the Property are to be disregarded on rent reviews
and do not have to be reinstated at the expiry of the term.
9.1.3 Sections 24 to 28 of the Landlord and ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ have not been
excluded in relation to the tenancy created by the Lease.
9.1.4 All steps in rent reviews have been duly taken and no rent reviews
are or should be currently under negotiation or the subject of a
reference to an expert or arbitrator or the Courts.
9.1.5 There are no other premises or land owned or leased by the Company
other than as stated in this Agreement.
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SCHEDULE 3
WARRANTIES GIVEN BY THE PURCHASER UNDER CLAUSE 6
1 AUTHORITY AND CAPACITY OF THE PURCHASER
1.1 Nextera is a company duly incorporated, validly existing and in good
standing under the laws of the State of Delaware of the United States of
America.
1.2 As of the date of this Agreement, the authorized capital stock of Nextera
consists solely of 50,000,000 shares of Class A Common Stock, par value
US$0.001 per share (the "Nextera Class A Common Stock"), of which
16,811,740 shares were issued and outstanding as of such date; of
4,300,000 shares of Class B Common Stock, par value US$0.001 per share
(the "Nextera Class B Common Stock"), of which 4,274,630 shares were
issued and outstanding as of such date; and of 10,000,000 shares of
Preferred Stock"), of which no shares were issued and outstanding as of
such date. As of the date of this Agreement, other than:
(i) options to purchase 3,043,000 shares of Nextera Class A Common
Stock which have been issued to employees pursuant to
Nextera's 1998 Equity Participation Plan and not yet
exercised;
(ii) options for 581,760 shares of Class A Common Stock which have
been issued to certain employees of Lexecon Inc. and not yet
exercised;
(iii) 1,450,240 shares of Class A Common Stock reserved for issuance
to certain former shareholders of Lexecon Inc. under certain
circumstances set forth in that certain Contribution Agreement
pursuant to which the Lexecon stock was acquired;
(iv) 197,813 shares of Class A Common Stock reserved for issuance
to certain former shareholders of Sibson Canada in exchange
for shares currently owned by such shareholders in Sibson
Canada Co.;
(v) a warrant to acquire 250,000 shares of Class A Common Stock
held by Knowledge Universe, Inc.;
(vi) the right of the holders of certain debt obligations of
Nextera to convert such debt into preferred stock under
certain circumstances there are no shares of the Nextera Stock
authorized and reserved for issuance, and Nextera has no
commitment to authorize, issue, or sell shares of Nextera
Stock of any class or series, or any right or option to
purchase shares of any class or series, except pursuant to
this Agreement and the Stockholders Agreement.
1.3 Other than as aforesaid no person has the right (whether exercisable now
or in the future and whether contingent or not) to call for the allotment,
conversion, issue, sale or transfer of any share or loan capital or any
other security giving rise to a right over the capital of Nextera under
any option or other agreement (including conversion rights and rights of
pre-emption) and there are no Encumbrances on the shares of Nextera or any
arrangements or obligations to create any Encumbrances.
1.4 The execution and delivery of, and the performance by Nextera of its
obligations under, this Agreement and the Tax Deed of Covenant and any
other documents to be executed by Nextera pursuant to or in connection
with this Agreement will not:
1.4.1 result in a breach of any provision of its memorandum or articles of
association bylaws or other constitutional documents; or
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1.4.2 result in a breach of or default under or give any third party a
right to terminate or modify, or result in the creation of any
Encumbrance under any agreement, licence or other instrument or
result in a breach of any order, judgment or decree of any Court,
governmental agency or regulatory body to which any of Nextera or
the Company is a party or by which any of Nextera or any of its
respective assets or the Company is bound.
1.6 The Nextera Shares to be issued pursuant to this Agreement, when issued in
accordance with the terms of this Agreement, will be duly authorized,
validly issued, fully paid and non-assessable shares of Nextera's Class A
Common Stock, par value US$0.001 per share, and will not be issued in
violation of any pre-emptive rights.
2 AUTHORITY
The Purchaser has full right, authority and power to enter into this
Agreement and each agreement, document and instrument to be executed and
delivered by the Purchaser pursuant to this Agreement and, to carry out
the transactions contemplated hereby.
The execution, delivery and performance by the Purchaser of this Agreement
and each such other agreement, document and instrument have been duly
authorised by all necessary organisational action of the Purchaser and no
other action on the part of the Purchaser is required.
This Agreement and each other agreement, document and instrument executed
and delivered by the Purchaser pursuant to this Agreement constitutes, or
when executed and delivered will constitute, valid and binding obligations
of the Purchaser, as applicable, enforceable in accordance with their
terms, subject to the effect of any applicable bankruptcy, reorganisation,
insolvency, moratorium or similar laws affecting creditors' rights
generally and subject to the effect of general principles of equity,
including, without limitation, the possible unavailability of specific
performance or injunctive relief, regardless of whether considered in a
proceeding in equity or at law. The execution, delivery and performance by
the Purchaser of this Agreement and each such agreement, document and
instrument:
(i) does not and will not violate any provision of the formation
documents of the Purchaser;
(ii) does not and will not violate any laws of England or any
other jurisdiction applicable to the Purchaser or require the
Purchaser to obtain any approval, consent or waiver of, or
make any filing with, any person or entity (governmental or
otherwise) which has not been obtained or made; and
(iii) does not and will not result in a breach of, constitute a
default under, accelerate any obligation under, or give rise
to a right of termination of any indenture, loan or credit
agreement, or other agreement mortgage, lease, permit, order,
judgment or decree to which the Purchaser is a party and which
is material to the business and financial condition of the
Purchaser.
3 LITIGATION
There is no litigation pending or, to its knowledge, threatened against
the Purchaser which would or could reasonably be expected to prevent or
hinder the completion of the transactions contemplated by this Agreement
which could reasonably be expected to have a material adverse effect on
the Purchaser. There have been no claims made or threatened by a client or
customer of the Purchaser nor, to the knowledge of the Purchaser, are
there any such claims that may be asserted, which in any of the foregoing
cases could reasonably be expected to have a material adverse effect on
the Purchaser.
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4 ABSENCE OF CERTAIN CHANGES
Except as disclosed to the Vendors' Representative in writing since 30
June 1998, there has not been:
4.1 Any change in the business, properties, assets, results of operations,
financial condition, liabilities, or prospects of the Purchaser, which
change by itself or in conjunction with all other such changes, whether
or not arising in the ordinary course of business, has been or could
reasonably be expected to be materially adverse with respect to the
Purchaser;
4.2 Any material contingent liability incurred by the Purchaser as
guarantor or otherwise with respect to the obligations of others or any
cancellation of any material debt or claim owing to, or waiver of any
material right of, the Purchaser;
4.3 Any mortgage, encumbrance or lien placed on any of the properties of
the Purchaser which remains in existence on the date hereof or will
remain on the date of the Closing;
4.4 Any material obligation or liability of any nature, whether accrued,
absolute or contingent incurred by the Purchaser other than obligations
and liabilities incurred in the ordinary course of business (it being
understood that product or service liability claims shall not be deemed
to be incurred in the ordinary course of business);
4.5 Any purchase, sale or other disposition, or any agreement or other
arrangement for the purchase, sale or other disposition, of any of the
properties or assets of the Purchaser other than in the ordinary course
of business;
4.6 Any damage or destruction whether or not covered by insurance,
materially and adversely affecting the properties, assets or business
of the Purchaser;
4.7 Any declaration, setting aside or payment of any dividend by the
Purchaser, or the making of any other distribution in respect of the
membership interests of the Purchaser, or any direct or indirect
redemption, purchase or other acquisition by the Purchaser of its
respective membership interests;
4.8 Any labour trouble or claim of unfair labour practices involving the
Purchaser, any change in the compensation payable or to become payable
by the Purchaser to any of its officers, employees, agents or
independent contractors other than normal merit increases in accordance
with its usual practices, or any bonus payment or arrangement made to
or with any of such officers, employees, agents or independent
contractors;
4.9 Any material change with respect to the officers or management of the
Purchaser;
4.10 Any material obligation or liability incurred by the Purchaser to any
of its officers, directors, members or employees, or any loans or
advances made by the Purchaser to any of its officers, directors,
members or employees, except normal compensation and expense allowances
and advances payable to officers or employees;
4.11 Any change in accounting methods or practices, credit practices or
collection policies used by the Purchaser;
4.12 Any other transaction entered into by the Purchaser other than
transactions in the ordinary course of business (other than as
disclosed); or
4.13 Any agreement or understanding whether in writing or otherwise, for the
Purchaser to take any of the actions specified in paragraphs (5.1)
through to (5.12) above.
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5 COMPLIANCE WITH LAWS
The Purchaser is in compliance with all applicable statutes, ordinances,
orders, judgments, decree, rules and regulations promulgated by any
federal, state, municipal entity, agency, court or other governmental
authority which apply to the Purchaser or to the conduct of its
business, except where non-compliance with such statute, ordinance,
order, judgment, decree, rule or regulation would not have a material
adverse effect on the Purchaser, and the Purchaser has not received
notice of a violation or alleged violation of any such statute,
ordinance, order, rule or regulation.
6 INITIAL PUBLIC OFFERING
6.1 NEXTERA IS IN THE PROCESS OF REGISTERING WITH THE US SECURITIES AND
EXCHANGE COMMISSION FOR AN INITIAL PUBLIC OFFERING: The Purchaser has
provided or made available to the vendors copies of Nextera's
Registration Statement on Form S-1, as filed with the United States
Securities and Exchange Commission (the "SEC") on September 18, 1998, as
the same has been amended or supplemented up to the date hereof (as so
amended or supplemented, the "Registration Statement").
6.2 Nextera is in a jurisdiction which will allow it to proceed to undertake
an initial public offering.
6.3 The Vendors have been provided with a true copy of the accounts of
Nextera for the financial period ended 31st December 1997 and of the
unaudited pro forma combined financial statements of Nextera as at 30th
June 1998 each of which (subject as fairly disclosed therein) gives a
true and fair view of the state of affairs of Nextera and its relevant
subsidiaries as at the date to which they are prepared and of their
results over the periods to which they relate.
6.4 The Vendors have been provided with a true copy of each Stockholders
Agreement to which all Nextera shareholders are party and of the
constitutional documents of Nextera and of all documents governing any
stock or similar option incentive shares of Nextera and/or any of its
subsidiaries.
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SCHEDULE 4
LEASEHOLD PROPERTIES - PARTICULARS OF LEASES
Address of Property: ▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇
▇▇▇▇▇▇▇▇: ▇▇▇▇▇▇ ▇▇▇▇▇ International Limited
Current tenant and guarantor: The Alexander Corporation Limited
Term: 8 years from 28/9/92 expires 27/9/2000
Current Rent: L41,600 per annum payable quarterly in
advance on quarter days.
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SCHEDULE 5
INTELLECTUAL PROPERTY
Copyright and moral rights subsisting in the written and other materials
produced by Alexander for use in client work.
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SCHEDULE 6
VENDORS DEFERRED CONSIDERATION
The aggregate value of Loan Notes to be issued as Vendors Deferred Consideration
will be equal to the Relevant Percentage of L300,000 rounding up any fractional
Loan Note entitlement to the nearest L1.
The RELEVANT PERCENTAGE is that percentage in the table set out below, which
corresponds to the Company's Cumulative Revenue and the Company's Cumulative
Profit Before Tax (values between the figures shown being calculated using
interpolation):
RELEVANT PERCENTAGE
Company's >11.4 0 70 90 100
Cumulative 10.26 0 60 75 90
Revenue 9.12 0 50 65 80
(LMM) <9.12 0 0 50 65
------------------------------------
<1.74 1.74 1.95 >2.17
Company's Cumulative Profit Before tax
(LMM)
Example: If the Company's Cumulative Revenue is L10.26 MM and the Company's
Cumulative Profit Before Tax is L1.74 MM the Relevant Percentage would be 60%;
">" means greater than; and
"<" means less than.
In calculating the Company's Cumulative Profit Before Tax no account shall be
taken of and there shall be added back any amounts paid to or to be paid to
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ and/or ▇▇▇▇▇▇ ▇▇▇▇▇▇ under the Supplementary Deferred
Consideration Agreement of even date entered into between them and the
Purchaser.
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In witness whereof this Agreement has been duly executed.
SIGNED by NEXTERA
ENTERPRISES INC. by ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
, Chief Financial
Officer
SIGNED as an AGREEMENT by
the said ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
in the presence of: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇.
SIGNED as an AGREEMENT by
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
for and on behalf of
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
by power given under power of
attorney dated 25 January 1999
in the presence of:
▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇.
SIGNED as an AGREEMENT by
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
for and on behalf of
▇▇▇▇▇▇ ▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
by power given under power of
attorney dated 20 January 1999
in the presence of:
▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇.
SIGNED by an AGREEMENT by
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
for and on behalf of
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
by power given under power of
attorney dated 26 January 1999
in the presence of:
▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇.
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SIGNED as an AGREEMENT by
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
for and on behalf of
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
by power given under power of /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
attorney dated 25 January 1999
in the presence of:
▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇
SIGNED as an AGREEMENT by
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
for and on behalf of
▇▇▇ ▇▇▇▇▇
by power given under power of /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
attorney dated 15 January 1999
in the presence of:
▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇
SIGNED as an AGREEMENT by
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
for and on behalf of
▇▇▇▇▇▇ ▇▇▇▇▇▇
by power given under power of /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
attorney dated 27 January 1999
in the presence of:
▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇
SIGNED as an AGREEMENT by
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
for and on behalf of
▇▇▇▇ ▇▇▇▇▇
by power given under power of /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
attorney dated 17 January 1999
in the presence of:
▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇
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