DATED 14 DECEMBER 1998
SHARE SALE AND PURCHASE AGREEMENT
relating to the entire issued share capital
of ▇▇▇▇▇▇▇▇ Telecommunications Limited
PANTON MANAGEMENT LIMITED and
NORTHERN MANAGEMENT LIMITED (1)
▇▇▇▇▇▇▇ ▇▇▇▇▇ (2)
▇▇▇▇▇▇ ▇▇▇▇▇ (3)
SYMPOSIUM TELECOM CORPORATION (4)
TABLE OF CONTENTS
PARTIES 3
INTRODUCTION 3
OPERATIVE PROVISIONS 4
1 INTERPRETATION 4
2 SALE AND PURCHASE OF THE SHARES 10
3 CONSIDERATION 10
4 COMPLETION 15
5 POSITION PENDING COMPLETION 19
6 WARRANTY 22
7 RESTRICTIONS 24
8 USE OF NAME 26
9 GENERAL PROVISIONS 26
ATTESTATIONS 46
DATED
14 DECEMBER 1998
PARTIES
(1) The companies whose names and addresses appear in column 1 of Schedule 1
("the Vendors"); and
(2) ▇▇▇▇▇▇▇ ▇▇▇▇▇ of Apartment 107, Parc Saint Roman, ▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇,
▇▇▇▇▇▇, ▇▇▇▇▇
(3) ▇▇▇▇▇▇ ▇▇▇▇▇ of Apartment 211, Parc Saint Roman, ▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇▇; and
(4) Symposium Telecom Corporation of ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇ ("the Purchaser").
INTRODUCTION
(A) The Company was incorporated in Ireland under the name of Verity
International Limited on 10th December 1995 and is registered under number
239381 as a company limited by shares. It has at the date of this
Agreement an authorised share capital of L100,000 divided into 100,000
ordinary shares of L1 each of which only the Shares have been issued and
are fully paid or credited as fully paid and the Vendors are the legal and
beneficial owners of the Shares in the proportions shown in column 2 of
Schedule 1 and as such have the right, power and authority to sell and
transfer the Shares free from any claims, charges, liens, encumbrances or
equities.
(B) The business of the Company is that of providing international audiotext
services and a billing mechanism for international audiotext services.
(C) The Vendors are willing to sell and the Purchaser is willing to purchase
the Shares on the terms and subject to the conditions of this Agreement.
(D) The Vendors have delivered or arranged for the delivery to the Purchaser of
a true and up-to-date copy of the Memorandum and Articles of Association of
the Company and of the Accounts.
OPERATIVE PROVISIONS
1 INTERPRETATION
1.1 In this Agreement (including the Introduction and Schedules), except where
a different interpretation is necessary in the context, the following
expressions shall have the following meanings:
the Accounts the balance sheet of the Company as at
the Accounts Date and the profit and
loss account of the Company for the year
ended on the Accounts Date together with
the directors' reports and other
documents required by law to be annexed
thereto
the Accounts Date 30 June 1998
ACT Advance Corporation Tax
Admission the date a broker/dealer initiates
quotations for Purchaser Common Stock in
the OTC Bulletin Board Service or a
comparable medium
Associated Company Any company which at the relevant time
is:-
(a) a holding company of the Company or
of the Purchaser; or
(b) a subsidiary or subsidiary
undertaking of the Company or of
the Purchaser; or
(c) a subsidiary or subsidiary
undertaking (other than the Company
itself) of any such holding
company.
Automatic Communications Limited a company no. 76494B registered in the
Bahamas
Business Day any day on which the Stock Exchange is
open for business
Board the board of directors for the time
being of the Purchaser and of the
Company as specifically referred to
the BT Amount as referred to in clause 3.8
the Company ▇▇▇▇▇▇▇▇ Telecommunications Limited of
which short particulars are set out in
Schedule 2
the Company's Auditors ▇▇▇▇▇▇▇▇ Croydon of ▇▇▇▇▇▇▇ House, ▇▇-▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇ ▇▇▇
Completion completion of the acquisition of the
Shares in accordance with the terms of
clause 4
Conditions the condition precedents to Completion
set out in clause 3.7
Consideration the maximum sum of US$17,500,000, being
the aggregate of the Initial
Consideration and the Deferred
Consideration
Consideration Shares shares of Purchaser Common Stock to be
allotted to the Vendors pursuant to
clause 3
the Consultancy Agreements the consultancy agreements in the form
derived from the agreed proforma
consultancy agreement attached as
Annexure E to be entered into on
Completion between the Purchaser and
each of the Vendors and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
the Deed of Covenant the deed of covenant in the form
attached as Annexure D
Deferred Consideration the aggregate sum determined pursuant to
clause 3 and Schedule 4
the Directors the persons specified as directors of
the Company in Schedule 2 (the
expression "Director" meaning any of
them)
the Disclosure Letter a letter bearing the same date as this
Agreement from the Vendors or the
Vendors' Solicitors to the Purchaser
together with the documents annexed to
such letter
Final Audited Accounts the financial statements of the Company
at and for the year ended 30 June 1999
prepared in accordance with the terms of
Schedule 4
ICTA the Income and Corporation Taxes Act
1988
IHTA the Inheritance Tax ▇▇▇ ▇▇▇▇
Initial Consideration the aggregate sum of US$11,500,000
referred to in clause 3
the Initial Issue Price as defined in clause 3.2(b)
Intellectual Property copyrights, trade and service marks,
trade names, rights in logos and get-up,
inventions, confidential information,
trade secrets and know-how, registered
designs, design rights, letters patent,
utility models, semi-conductor
topographies, all rights of whatsoever
nature in computer software and data,
all rights in plant varieties, all
rights of privacy and all intangible
rights and privileges of a nature
similar to any of the foregoing, in
every case in any part of the world and
whether or not registered; and including
all granted registrations and all
applications for registration in respect
of any of the same
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ of Apartment 107, Parc
Saint Roman, ▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇▇
NASDAQ National Association of Securities
Dealers Automated Quotation System
OTC Bulletin Board Service a service operated by the National
Association of Securities Dealers
providing an electronic quotation medium
to reflect market making interest in
eligible securities
the Permitted Business the business of providing international
audiotext services and a billing
mechanism for international audiotext
and internet services as carried on or
to be carried on by Automatic
Communications Limited
the Purchaser's Auditors a firm of auditors to be determined by
the board of directors of the Purchaser
Purchaser Common Stock common stock with a par value of
US$0.001 per share of the Purchaser
the Purchaser's Solicitors ▇ ▇ ▇▇▇▇▇▇ & Co of ▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
Regulation S Regulation S under the Securities
Exchange Act of 1933, as amended
Relevant Receipts as referred to in clause 3.8
Relief the same meaning as in the Deed of
Covenant
Relevant Profits such profits of the Company as are
determined in accordance with the
provisions of clause 3.5 and Schedule 4
Restricted Activities the business carried on by the Company
as at today's date as described in
paragraph (B) of the Introduction
▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ of Apartment 211 Parc Saint
Roman, ▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇▇
Securities Act the United States Securities Act of 1933
(as amended)
the Shares the 2 issued ordinary shares of L1 each
in the capital of the Company
Stock Exchange London Stock Exchange Limited
Taxation, Taxing Authority the same respective meanings as in the
Deed of Covenant
Taxation Liability the same meaning as in the Deed of
Covenant
TCGA the Taxation of Chargeable Gains ▇▇▇
▇▇▇▇
VAT Value Added Tax
VATA the Value Added Tax ▇▇▇ ▇▇▇▇
the Vendor's Auditors Messrs ▇▇▇▇▇▇▇▇ Croydon
the Vendors' Solicitors ▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇ of ▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇
the Warranty the warranty, representation and
undertaking given in clause 3
Warranty Claim a claim made by the Purchaser on the
breach by the Vendors of any of the
Warranty Statements
the Warranty Statements the statements set out in Schedule 3
US$ or US Dollars the legal currency of the United States
of America
1.2 All references to statutory provisions or enactments shall include
references to any amendment, modification or re-enactment of any such
provision or enactment (whether before or after the date of this
Agreement) to any previous enactment which has been replaced or
amended and to any regulation or order made under such provision or
enactment.
1.3 The term "holding company" shall have the meaning attributed to it in
section 736 and 736A of the Companies ▇▇▇ ▇▇▇▇ (as amended) and a
company or other entity shall be a "subsidiary" for the purposes of
this Agreement if it falls within any of the meanings attributed to a
"subsidiary" in such sections or the meaning attributed to the term
"subsidiary undertaking" in section 258 of such Act, and the terms
"subsidiaries" and "holding companies" are to be construed
accordingly.
1.4 References to those of the parties who are individuals include
references to their respective legal personal representative(s).
1.5 References to documents "in the agreed form" are to documents in terms
agreed between the parties and signed (for the purpose of
identification only) by the Vendors' Solicitors and the Purchaser's
Solicitors.
1.6 References in this Agreement and the Schedules to the parties, the
Introduction, Schedules and clauses are references respectively to the
parties, the Introduction and Schedules to and clauses of this
Agreement.
1.7 Save where the context specifically requires otherwise, words
importing one gender shall be treated as importing any gender, words
importing individuals shall be treated as importing corporations and
vice versa, words importing the singular shall be treated as importing
the plural and vice versa, and words importing the whole shall be
treated as including a reference to any part thereof.
1.8 Clause and paragraph headings are inserted for ease of reference only
and shall not affect construction.
1.9 Section 839 ICTA is to apply to determine whether a person is
connected with another for the purposes of this Agreement.
2 SALE AND PURCHASE OF THE SHARES
2.1 The Vendors with full title guarantee shall sell with effect from
Completion the number of the Shares set out opposite their names in
column 2 of Schedule 1 and the Purchaser relying on the
representations, warranties and undertakings herein contained shall
purchase subject to clause 2.2 all of the Shares with any dividends,
distributions and rights declared, paid, created or arising and free
from all claims, charges, liens, encumbrances, options, rights of
pre-emption or equities.
2.2 The Purchaser shall not be obliged to complete the purchase of any of
the Shares unless the purchase of all the Shares is completed
simultaneously in accordance with this Agreement.
3 CONSIDERATION
3.1 In consideration of the sale of the Shares in accordance with the
terms of this Agreement, the Purchaser shall pay to the Vendors in the
proportions set out in columns 3 and 4 of Schedule 1 the aggregate of
the Initial Consideration and, to the extent payable in accordance
with the terms of this Agreement, the Deferred Consideration subject
to the provisions of Clause 3.6 below, without set-off or other
deduction of any kind whatsoever..
3.2 The Initial Consideration in the aggregate sum of US$11,500,000 shall
(subject to the provisions of this clause 3) be paid and satisfied by:
(a) the payment of US$5,750,000 ("the Initial Cash Consideration");
and
(b) by the issue and allotment, free of any lien, option, charge or
other encumbrance whatsoever and credited as fully paid to the
Vendors in the proportions set out opposite their respective
names in column 3 of Schedule 1, of such number of shares of
Purchaser Common Stock as shall have an aggregate value of
US$5.75 million calculated by reference to the market price at
which dealings in Purchaser Common Stock commenced on the OTC
Bulletin Board Service ("the Initial Issue Price") such price to
be certified in writing to the Vendors by the principal
broker/dealer of the Purchaser Common Stock ("the Initial
Consideration Shares").
3.3 The Consideration Shares will rank pari passu in all respects with the
other outstanding Purchaser Common Stock in issue as at the date of
Admission and any Purchaser Common Stock to be issued in the future.
3.4.1 Each of the Vendors agrees not to offer, sell, transfer, assign,
pledge, hypothecate or otherwise dispose of (collectively, "Transfer")
any of the Consideration Shares except pursuant to an effective
registration statement under the Securities Act, the provisions of
Regulation S or pursuant to an exemption from registration under the
Securities Act. As a further condition to any such Transfer, except
in the event that such Transfer is made pursuant to an effective
registration statement under the Securities Act, if in the reasonable
opinion of the Company's advisers any Transfer of the Shares to the
contemplated transferee thereof would not be exempt from the
registration and prospectus delivery requirements of the Securities
Act, the Company may require the contemplated transferee to furnish
the Company with an investment letter setting forth such information
and agreements as may be reasonably requested by the Company to ensure
compliance by such transferee with the Securities Act.
3.4.2 Each certificate evidencing the Consideration Shares will bear the
following legend:
"THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER
THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT
BE OFFERED, SOLD, TRANSFERRED, PLEDGED, ASSIGNED, HYPOTHECATED OR
OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION AND OTHERWISE IN ACCORDANCE WITH THE TERMS OF AN
AGREEMENT BETWEEN THE ISSUER AND THE ORIGINAL ALLOTTEE OR
PURCHASER OF THE SECURITIES, A COPY OF WHICH IS ON FILE AT THE
PRINCIPAL EXECUTIVE OFFICE OF THE ISSUER".
The Purchaser shall have no obligation to register any purported
Transfer of any of the Consideration Shares in violation of this
Agreement on its stock transfer records, and any such Transfer shall
be null, void and of no force and effect.
3.4.3. Each Vendor agrees not to engage in any hedging transactions with
regard to the Consideration Shares except in compliance with the
Securities Act.
3.4.4 The Purchaser agrees not to issue or sell any shares of capital stock
without imposing on the purchaser/allottee restrictions substantially
similar to those imposed under clauses 3.4.1 and 3.4.2 of this
Agreement until the satisfaction of the Deferred Consideration.
3.5.1 The Deferred Consideration shall:
(i) be a sum calculated by deducting from the Relevant Profits for
the accounting period of the Company ended on 30 June 1999 the
Relevant Profits for the accounting period of the Company ended
on 30 June 1998 and multiplying the result by five but in the
event that the result shall produce a minus figure then the
Deferred Consideration shall be deemed to be nil;
(ii) be subject to a maximum aggregate amount so that when it is added
to the Initial Consideration the aggregate equals US$17,500,000
3.5.2 The Deferred Consideration shall be satisfied by:
(a) the payment within 60 days of the determination and agreement of
the Final Audited Accounts of a sum in US Dollars equal to 50 per
cent. of the Deferred Consideration due ("the Deferred Cash
Consideration"); and
(b) the issue and allotment to the Vendors on or within 60 days after
the determination and agreement of the Final Audited Accounts of
such numbers of shares of Purchaser Common Stock, free of any
lien, option, charge or other encumbrance whatsoever and credited
as fully paid as shall be ascertained by dividing 50 per cent. of
the Deferred Consideration by the Initial Issue Price such shares
to rank pari passu with the outstanding Purchaser Common Stock
("the Deferred Consideration Shares").
3.6 If prior to payment of the Deferred Consideration or any part thereof
the Purchaser shall become entitled to assert any claim against any of
the Vendors pursuant to the terms of this Agreement or the Deed of
Covenant, the Purchaser shall be entitled to pay from the amount of
the Deferred
Consideration otherwise payable to the Vendors into a joint client
deposit account at The Royal Bank of Scotland plc ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ (▇▇▇ opened in their names) and not release to the
Vendors such amount as represents the value of such of its outstanding
claims against the Vendors (pending determination of such claims).
Upon any determination in the Purchaser's favour there shall be paid
to the Purchaser the amount as so determined which shall be deemed to
have been set off against the Deferred Consideration and the
Purchasers' Solicitors and Vendors' Solicitors by notice in writing
shall (following receipt of suitable evidence of any such
determination) transfer to the Purchaser from the joint client
deposit account a sum equal to such amounts determined to be due to it
and the balance (if any) of any Deferred Consideration determined not
to be due to the Purchaser, and not subject to any other such claim,
shall be paid to the Vendors and the interest earned on the said
account shall be apportioned between the Vendors and the Purchaser in
the same proportions as the amounts of principal paid to them
respectively from the joint client deposit account.
3.7.1 This Agreement is conditional upon:
3.7.1.1 a broker/dealer initiating quotations for Purchaser Common
Stock in the OTC Bulletin Board Service, (if no such
quotation has been initiated prior to the signing of this
Agreement); and
3.7.1.2 the Purchaser raising sufficient funds to satisfy the amount
of the Initial Cash Consideration.
3.7.2 In the event that the Conditions set out in 3.7.1.1 and 3.7.2.1 shall
not have been satisfied within a period of 6 months from the date of
this Agreement, then the Vendors and the Purchaser shall have the
right to serve 7 days Notice in writing upon the other party and in
the event that the Conditions shall still not have been satisfied by
the expiration of such period of 7 days, this Agreement shall be of no
further effect but without prejudice to the rights of either party
against the other in respect of any antecedent breach of this
agreement.
3.7.3 The Purchaser shall use reasonable endeavours to procure the
initiation of the quotations referred to in 3.7.1.1 and the raising of
the funds referred to in 3.7.1.2.
3.8 (i) In the event that any amounts of money or other valuable
consideration are received by the Company being monies or any
other valuable consideration due to the Company in relation to
trading up to close of business on the date of Completion
("Relevant Receipts"), the Purchaser shall pay or transfer to
the Vendors in the proportions set out in column 4 of Schedule 1
by way of further consideration sums equivalent to such amounts
or other valuable consideration as are so received from time to
time (a) by the Company or by any third party on its behalf or
(b) by any third party (not on its behalf) in the event that
payment or transfer of such other valuable consideration shall
be made to such a third party due to any act or default on the
part of the Company. The Purchaser shall within 7 days of the
end of each calendar month following Completion send to each of
the Vendors by Recorded Delivery Post or equivalent a
declaration as to the relevant amounts or other valuable
consideration received by the Company during that month. Such
declarations shall be posted to each of the Vendors within 14
days of the end of the relevant calendar month accompanied by a
remittance for the amount or other valuable consideration shown
in such declaration.
(ii) The Purchaser shall make available on prior written notice to
the Vendor and/or the Vendors' Accountants and/or Solicitors for
inspection and if necessary copying all the Company's books of
account and papers and other information (including such
information as is in machine readable form).
(iii) For the avoidance of doubt, the proceeds of the amount owing by
Bezeq International and/or by British Telecom Plc ("the BT
Amount") shall be deemed to be one of the Relevant Receipts
payable to the Vendors in accordance with clause 3.8.(i) above.
3.8.1 The Vendors understand that an investment in the Consideration Shares
involves a high degree of risk; the Vendors have such knowledge and
experience in financial and business matters that they are capable of
evaluating the merits and risks of the investment in the Consideration
Shares and in protecting their interests in connection with the
transaction.
3.8.2 The Vendors understand that the Consideration Shares have not been
registered under the Securities Act. The Vendors are familiar with
the provisions of the Securities Act and Regulation S
thereunder and understand that the restrictions on transfer of the
Consideration Shares prevent the Vendors, and any transferee of the
Vendors, from publicly selling the Shares in the United States for
one year from receipt.
3.8.3 The Vendors are acquiring the Consideration Shares for their own
account, and not as a nominee or agent for others, and not with a view
to resale or distribution of any part thereof in violation of the
Securities Act.
3.8.4 The Purchaser has made available to the Vendors and their advisers and
counsel the opportunity to ask questions of, and to receive answers
from, the Purchaser and its officers and directors concerning the
Purchaser and its business and the Purchaser has given access to
information, documents, financial statements, records and books (i)
relating to the Purchaser and its business and an investment in the
Purchaser, and (ii) necessary to verify the accuracy of any
information furnished to the Vendors.
3.8.5 The Purchaser shall use all reasonable endeavours to obtain a full
listing of the Consideration Shares on NASDAQ, within 16 months of the
date of this Agreement.
4 COMPLETION
4.1 Completion shall take place at the offices of the Vendor's Solicitors
(or any other location agreed upon by the Vendors and the Purchaser)
within 14 Business Days of the satisfaction of the Conditions
following which the Purchaser shall immediately serve notice in
writing on the Vendors that Completion can occur.
4.2 At Completion the Vendors shall deliver to the Purchaser:
(a) transfers in respect of the Shares duly executed by the
registered holders thereof in favour of the Purchaser or as it
may direct;
(b) certificates for the Shares (or an indemnity in the form
attached as Annexure C) duly signed if such certificates are
missing) and any other documents which may be required to give
good title to the Shares and to enable the Purchaser to procure
registration of the same in its name or as it may direct;
(c) the Deed of Covenant, and the deed containing the restrictions
contained in clauses 7.2, 7.3 and 7.4 of this Agreement duly
executed by the Vendors;
(d) an irrevocable power of attorney in the form attached at
Annexure A executed by the Vendors to enable the Purchaser
(during the period prior to the registration of the transfer of
the Shares) to exercise all voting and other rights attaching to
the Shares;
(e) any necessary waivers and consents in the agreed form signed by
all members of the Company to enable the Purchaser or its
nominee to be registered as the holder of the Shares (each of
the Vendors hereby irrevocably waiving all and any rights of
pre-emption to which it may be entitled under any articles of
association, agreement, law or otherwise in respect of the
transfer of the Shares delivered under this Agreement) and a
release of liabilities executed by each of the Vendors, ▇▇▇▇▇▇
▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇▇ in the form attached as Annexure B;
(f) the counterparts of the Consultancy Agreements duly executed by
each party to them (other than the Purchaser);
(g) a certified copy of any power of attorney under which any
document required to be delivered under this clause 4.2 has been
executed;
(h) a form of revocation (in a form reasonably satisfactory to the
Purchaser) in respect of a general power of attorney dated 9
November 1998 given by the Company in favour of ▇▇▇▇▇▇ ▇▇▇▇▇;
(i) certified copies of board resolutions of the Company and the
Vendors (as applicable) in the agreed form:
(i) approving in anticipation of Completion of (subject only
to proper stamping) the transfers of the Shares
delivered under this Agreement;
(ii) approving in anticipation of Completion of the placing
on the register of members of the Company of the names
of the transferees for registration in
accordance with the share transfer forms referred to
above and authorising the issue of appropriate share
certificates; and
(iii) approving the execution of the Deed of Covenant and the
Consultancy Agreements.
4.3.1 When the Vendors have complied with the terms of clause 4.2 the
Purchaser shall procure the delivery:
(a) to the Vendors' Solicitors US Dollar Clients account at The Royal
Bank of Scotland International Limited, Jersey or to such other
bank account as they may designate for the account of the Vendors
of a telegraphic transfer in favour of the Vendors' Solicitors
for the amount of the Initial Cash Consideration; the Vendors'
Solicitors are authorised by the Vendors to receive payment of
the Consideration on the Vendors' behalf and the receipt of the
Vendors' Solicitors shall be a sufficient discharge for the
Purchaser;
(b) to the Vendors of certificates for the Initial Consideration
Shares registered in the name of the Vendors and any other
documents which may be required to give good title to the Initial
Consideration Shares;
(c) to the Vendors of the counterparts of the Deed of Covenant and
the deed required pursuant to Clause 7 duly executed by the
Purchaser; and
(d) to the Vendors of the Consultancy Agreements duly executed by the
Purchaser.
Provided That in the event that the Vendors' Solicitors give
notice in writing prior to Completion to the Purchasers'
Solicitors, the following provisions shall have effect:-
(i) On Completion all documents shall be held in escrow and
shall constitute escrows pending receipt of payment pursuant
to sub-clause (ii) of this proviso and;
(ii) the Purchasers or their Solicitors shall immediately
following completion of all other matters to be done on
Completion in accordance with this clause 4 send
the Initial Cash Consideration by Swift to Barclays
Bank Plc, Monaco Branch as to 50 per cent. for the account
of Panton Management Limited and the balance for the account
of Northern Management Limited. On receipt by such bank of
the Initial Cash Consideration the condition of the escrows
shall be deemed to have been satisfied (and the relevant
documents shall no longer be deemed to be the subject of any
escrow and shall thereupon have full effect).
4.3.2 On Completion the Vendors shall procure that the Company delivers to
the Vendors irrevocable authorities addressed to Messrs Yussifoff
▇▇▇▇▇ & Co of ▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, (Israeli
Advocates) and also to Bezeq International and to British Telecom Plc
to pay to the US Dollar Clients account of the Vendors' Solicitors at
The Royal Bank of Scotland Plc (as referred to in clause 4.3.1(a) or
to such other Bank account as the Vendors' Solicitors may from time to
time designate) in respect of the BT Amount.
4.4.1 The parties agree that at any time on or after the date of Completion,
any party, being ready and willing to fulfil its own outstanding
obligations pursuant to this Agreement, may (without prejudice to any
other right or remedy available to it) give to the other parties
notice in writing requiring completion of this Agreement in conformity
with this clause.
4.4.2 Upon the service of such notice as stated in Clause 4.4.1, it shall
become and be a term of this Agreement in respect of which time shall
be of the essence thereof, that the parties to whom the notice is
given shall complete this Agreement within fourteen Business Days
after service of the notice (exclusive of the date of service) but
this condition shall operate without prejudice to any right of each
party to rescind this Agreement in the meantime.
4.5 If for any reason the provisions of clause 4.2 are not fully complied
with, the Purchaser (following the delivery of the notice referred to
in clause 4.4.1 by the Purchaser) shall be entitled (in addition and
without prejudice to any other right or remedy available to it) to
elect:
(a) to rescind this Agreement in which case the Purchaser shall
not be obliged to purchase any of the Shares or pay any of
the Consideration; or
(b) to fix a new date for Completion: or
(c) to proceed to Completion so far as practicable, the Vendors
then being obliged to use their best endeavours to perform
or procure the performance of any of the outstanding
provisions of clause 4.2.
5 POSITION PENDING COMPLETION
5.1 The Vendors hereby covenant with and undertake to the Purchaser that
they will use their reasonable endeavours to procure that neither one
of them nor the Company shall at any time prior to Completion without
the prior written consent of the Purchaser (not to be unreasonably
withheld or delayed) do allow or procure any act or omission which
would (or would be likely to) cause, constitute or result in a breach
of the Warranty if the same were to be expressly repeated at
Completion or which would make any of Warranty Statements untrue,
incorrect, inaccurate or misleading if they were expressly repeated at
Completion.
5.2 Without prejudice to clause 5.1, the Vendors hereby covenant with and
undertake to the Purchaser that the Company shall not at any time
prior to Completion without the prior written consent of the Purchaser
(not to be unreasonably withheld or delayed):
(a) permit or cause to be proposed any alteration to its share
capital (including any increase thereof) or the rights attaching
to its shares;
(b) create, allot, issue, redeem, consolidate, convert or sub-divide
any share or loan capital or grant or agree to grant any options
for the issue of any share or loan capital;
(c) subscribe or otherwise acquire, or dispose of any shares in the
capital of any company;
(d) acquire or dispose of the whole or part of it's undertaking;
(e) cease to carry on its business or so far as practicable be wound
up or enter into receivership, administrative receivership or any
other form of judicial management or administration of its assets
or;
(f) so far as possible permit or suffer any of its insurances to
lapse or do anything which would make any policy of insurance of
it null or voidable;
(g) apply or permit its directors to apply to petition to the Court
for an administration order or similar order to be made in
respect of it;
(h) make any change to its auditors, its bankers or the terms of the
mandate given to such bankers in relation to its account(s), or
its accounting reference date;
(i) enter into or vary any transaction or arrangement with, or for
the benefit of any of its directors or shareholders or any other
person who is a "connected person" (within the meaning of Section
286 of the Taxation Of Chargeable Gains Act 1992 with any of its
directors or shareholders;
(j) enter into or give or permit or suffer to subsist any guarantee
of or indemnity or contract of suretyship for or otherwise commit
itself in respect of the due payment of money or the performance
of any contract, engagement or obligation of any other person or
body;
(k) propose or pay any dividend or propose or make any other
distribution (other than any payments to the Vendors by way of
consultancy payments);
(l) enter into any partnership or joint venture;
(m) dispose of any asset of a capital nature with a book or market
value in excess of US$20,000;
(n) engage any employee on terms that either his contract cannot be
terminated by six months' notice or less or his emoluments and/or
commissions or bonuses are or are likely to be at the rate of
US$50,000 per annum or more or increase the emoluments and/or
commissions or bonuses or any employee to more than US$50,000 per
annum or vary the terms of employment of any employee earning (or
so that after such variation he will, or is likely to earn) more
than US$50,000 per annum;
(o) vary the terms of employment and service of any officer or an
employee or increase the salary by more than ten per cent. or
vary other benefits of any such officer or employee, or appoint
or unless reasonably necessary dismiss any officer or such
employee;
(p) mortgage or charge or permit the creation of or suffer to subsist
any mortgage or charge over the whole or any part of its assets
or redeem any of the foregoing;
(q) make any loan or give any credit (other than normal trade credit)
or acquire any loan capital of any corporate body (wherever
incorporated);
(r) surrender or agree to any material change in the terms of any
substantial supply or distribution agreement to which it is from
time to time a party;
(s) enter into any unusual or onerous contract or any other material
or major or long term contract;
(t) make any change in its business or do any act or thing outside
the ordinary course of the business carried on by it;
(u) conduct any material litigation (save in respect of any breach of
any contract or for the collection of debts arising in the
ordinary course of business) or settle or compromise any claim or
dispute; or
(v) enter into any contract or non-binding commitment to do any of
the acts or matters referred to in this clause 5.2.
5.3 The Vendors hereby covenant with and undertake to the Purchaser that
the Vendors shall not at any time prior to Completion:
(a) dispose or attempt to dispose of any interest in the Shares or
grant any option over, or mortgage, charge or otherwise encumber
or dispose of any of the Shares;
(b) enter into discussions with any persons as regards any possible
sale of the business or a material part of the business of the
Company.
5.4 The Vendors hereby covenant with and undertake to the Purchaser that
the Vendors will procure that between the date of this Agreement and
Completion:
(a) the Company will continue to pay it's creditors in the ordinary
course of business or within the usual terms of payment of such
creditors; or
(b) the Vendors will use all reasonable endeavours to maintain the
trade and trade connection of the business of the Company and
will not by any action, omission, neglect or default knowingly
damage or risk damage to the same.
5.5 Pending Completion the Vendors shall procure that the Purchaser and
its agents and representatives are given full access to the Vendors'
properties and to the books and to the records of the Company and of
its subsidiaries and the Vendors shall upon request furnish such
information regarding the businesses and affairs of the Company as the
Purchaser may reasonably require.
6 WARRANTY
6.1 The Vendors hereby:
(a) acknowledge that the Purchaser has been induced to enter into
this Agreement and to purchase the Shares on the basis of the
Warranty and the agreements in the agreed form; and
(b) jointly and severally warrant, represent and undertake to the
Purchaser that each and every Warranty Statement is true, correct
and accurate in all material respects and not misleading at the
date of this Agreement and undertake to the Purchaser that each
and every Warranty Statement will continue to be accurate and not
misleading throughout the period from the date of this Agreement
up to and including Completion, subject only to:
(i) the matters stated in the Disclosure Letter save that the
Disclosure Letter shall not reduce in any way the Vendors'
liability pursuant to the Deed of Covenant in respect of any
Taxation Liability arising out of or associated with the
migration of the Company from the UK; and
(ii) any exceptions for which express provision is made pursuant
to this Agreement specifically limiting the operation of any
disclosure.
6.2 The Warranty is a separate and independent warranty, representation
and undertaking in relation to each of the Warranty Statements and no
Warranty Statement shall be limited by reference to any other Warranty
Statement.
6.3 The rights and remedies of the Purchaser in respect of any breach of
the Warranty shall not be affected by Completion but shall take effect
subject only to the matters specifically disclosed by the Vendors or
the Vendors' Solicitors in writing or in the Disclosure Letter.
6.4 The Vendors shall not do nor permit to occur any act or omission at or
before Completion which would constitute a breach of the Warranty so
far as within their powers to prevent the same.
6.5 If prior to the Completion any of the material Warranty Statements is
found to be untrue, incorrect, inaccurate or misleading in any
material respect the Purchaser shall be entitled to rescind this
Agreement by notice to the Vendors' Solicitors. The right to rescind
under this clause shall be in addition and without prejudice to any
rights and remedies which would have been available to the Purchaser
had this Agreement not been rescinded and failure to rescind shall not
constitute a waiver of any other rights the Purchaser may have under
this Agreement or the Deed of Covenant.
6.6 The Vendors shall immediately give written notice to the Purchaser of
the occurrence of any event which results or may result in any of the
Warranty Statements being untrue, incorrect, inaccurate or misleading
giving sufficient details of the event.
6.7 Any information supplied by the Company, its officers or employees to
the Vendors, their agents, representatives or advisers in connection
with, or to form the basis of, the Warranty or a Warranty Statement or
any matter covered in the Disclosure Letter, or for any other reason,
shall be deemed not to include or have included a representation,
warranty or guarantee of its accuracy to the Vendors and shall not
constitute a defence to the Vendors to any claim made by the
Purchaser. The Vendors waive any and all claims against the Company,
its officers or employees in respect of any information so supplied.
6.8 References to the awareness or knowledge of the Vendors in a Warranty
Statement in Schedule 3 shall only limit that Warranty Statement by
the Vendors awareness or knowledge if each of the
Vendors has made all due and careful enquiries to ascertain if the
relevant information is true, accurate, correct and not misleading.
6.9 Each of the paragraphs in Schedule 3 shall be interpreted as being
deemed to include all references to the foreign equivalent of terms
used, statutes and regulations referred to and concepts applied where
the Company is incorporated in, does business in or is affected by the
laws or regulations of a country outside England and Wales.
6.10 The Vendors hereby jointly and severally undertake to indemnify the
Purchaser from and against all debts and liabilities (including legal
costs and expenses) in connection with any claim made against the
Company by Kol Haolam or any person connected with Kol Haolam.
6.11 For the avoidance of doubt, the parties agree that all existing
arrangements to pay consultancy fees and related payments to ▇▇▇▇▇▇
▇▇▇▇▇ or ▇▇▇▇▇▇▇ ▇▇▇▇▇ (or the Vendors) will cease from the date of
the appointment of the Vendors under the Consultancy Agreements.
6.12 Any Warranty Claim or claim under the Deed of Covenant may be
satisfied by the Vendors as to 50 per cent. in cash and the balance of
the Warranty Claim satisfied by transferring to the Purchaser or as it
may direct, Purchaser Common Stock valued at the price at which shares
in Purchaser Common Stock were allotted to the Vendors or in the event
of there having been allotments at two different striking prices, then
at the average of such striking prices.
6.13 The provisions of Schedule 6 shall have effect.
7 RESTRICTIONS
7.1 The Vendors, ▇▇▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇ will on Completion deliver
to the Purchaser a deed of covenant (in a form to be agreed between
the parties) containing the restrictions contained within the
following Clauses 7.2, 7.3 and 7.4.
7.2.1 To ensure that the Purchaser receives the full benefit of the goodwill
of the business of the Company, each of the Vendors, ▇▇▇▇▇▇▇ ▇▇▇▇▇ and
▇▇▇▇▇▇ ▇▇▇▇▇ hereby represent and undertake that they will not either
alone or for, together with or as agent, officer or employee of any
other person, firm or company or through the medium of any company
directly or indirectly:
(a) for a period of 3 years from Completion:
(i) solicit, interfere with or attempt to entice away from the
Company any person who is at the date hereof or was within
the previous 12 months an employee or agent of any of the
Company, or who is reasonably considered by the Company to
be or have been a regular client or customer of or supplier
to the Company on the date of this Agreement or during the
12 months immediately preceding the date of this Agreement;
or
(ii) interfere or attempt to interfere with the supply or
continued supply of goods or services to or by the Company;
or
(b) for a period of 18 months from Completion carry on or be engaged,
concerned, interested or hold shares or other securities in any
company or businesses which compete with the Restricted
Activities at the date of this Agreement.
7.2.2 Provided that nothing in this clause 7.2 shall prevent the Vendors,
▇▇▇▇▇▇▇ ▇▇▇▇▇ or ▇▇▇▇▇▇ ▇▇▇▇▇ being interested in the Permitted
Business.
7.3 Each of the restrictions contained in each paragraph of clause 7.2.1
it is a separate and distinct restriction and is to be construed
separately from the other restrictions. Each of the Vendors
acknowledges that the restrictions are reasonable when taken together
as well as individually, that the duration, extent and application of
each restriction are no greater than is necessary for the protection
of the goodwill of the businesses of the Company and that the
consideration paid by the Purchaser for the Shares takes into account
and provides adequate compensation for the restraints and restrictions
imposed. Should any restriction be found to be void or unenforceable
without the deletion of some part of it or the reduction in area or
duration specified, that restriction shall apply with such
modification as may be necessary to make it valid.
7.4 The parties agree that the benefit of the covenants and undertakings
given in this clause shall be assignable in whole or in part by the
Purchaser to and become enforceable by the Company or the person which
from time to time is the holder of the Shares or to which any part of
the business(es) of the Company has been transferred.
7.5 It is declared for the avoidance of doubt that any projections which
may have been prepared by the Vendors' auditors were prepared in good
faith but that no responsibility for any of the same is accepted by or
placed upon such auditors or upon any other party to this Agreement
since the same were intended for illustration purposes only.
8 USE OF NAME
The Purchaser shall as between the Purchaser and the Vendors, be
entitled from Completion to the exclusive use of the names "▇▇▇▇▇▇▇▇
Telecommunications" and "Verity International" as part of the
Company's names and in the Company's business dealings and the Vendors
undertake not without the prior written consent of the Purchaser, to
use as a corporate or trading name any name which is or might be
confused with "▇▇▇▇▇▇▇▇ 'Telecommunications" or "Verity
International".
9 GENERAL PROVISIONS
9.1 The Purchaser undertakes not to issue preferred stock without the
approval of ▇▇▇▇▇▇ ▇▇▇▇▇ or ▇▇▇▇▇▇▇ ▇▇▇▇▇ except in connection with
obtaining any financing required to complete this Agreement provided
that the Purchaser's obligations pursuant to this clause shall
terminate upon the earliest to occur of:
(a) the satisfaction of the Deferred Consideration; and
(b) the date the capital stock of the Purchaser becomes listed on NASDAQ.
9.2 Each of the Vendors shall be jointly and severally liable in the event
of any breach of the warranties, representations, indemnities,
covenants, agreements and obligations of the Vendors under this
Agreement provided that the Purchaser may release or compromise the
liability of one of the Vendors hereunder or grant to one of the
Vendors time or other indulgence without affecting the liability of
the other Vendor hereunder.
9.3 Until such time as all of the consideration has been paid to the
Vendors and for so long as either of the Consultancy Agreements in
favour of Panton Management Limited and Northern Management Limited
shall subsist, the Purchaser shall procure that no one shall be
appointed a Director of the Company (or of ACL following completion of
the purchase of all the issued shares in ACL in the
event that such completion takes place) without the written consent
of Panton Management Limited, Northern Management Limited, ▇▇▇▇▇▇
▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇▇.
9.4.1 Without prejudice to any right or remedy available to the Purchaser
pursuant to clause 6 or otherwise, the Vendors shall be liable on an
indemnity basis for all costs, claims and expenses reasonably incurred
by the Purchaser in connection with any claim arising out of any
warranty, representation, undertaking or indemnity contained in this
Agreement (or any breach thereof) or any of the agreements in the
agreed form provided that the relevant claim is successful or settled
in favour of the Purchaser.
9.4.2 Without prejudice to any right or remedy available to the Vendors
pursuant to this Agreement, the Purchaser shall be liable on an
indemnity basis for all costs, claims and expenses reasonably incurred
by the Vendors in connection with any claim arising out of any
warranty, representation, undertaking or indemnity contained in this
Agreement (or any breach thereof) or any of the agreements in the
agreed form provided that the relevant claim is successfully resisted
by the Vendors.
9.5 The waiver by either party of any right or breach, default or omission
by another party of any of the terms of this Agreement or any of the
agreements in the agreed form shall not take effect unless in writing
and shall not constitute a continuing waiver of the right waived or
apply to, or operate as a waiver of, any other breach, default or
omission and any forbearance in enforcing any right shall not
constitute a waiver.
9.6 Neither the Purchaser nor the Vendors may assign whether in whole or
in part the benefit of this Agreement.
9.7 No party shall divulge to any third party (other than their respective
professional advisers or insurers) the fact that this Agreement or any
of the documents in the agreed form has been entered into or any
information regarding its terms or any matters contemplated by this
transaction or make any announcement relating to it without the prior
agreement (not to be unreasonably withheld or delayed) of the other
parties unless any such relevant information or announcement is
required by the Inland Revenue and/or a court of competent
jurisdiction or by any other relevant regulatory
body in which event the other parties shall (if practicable) be given
prior written notice of any such intended announcement. Any
announcement shall in any event be made or issued only in a form
approved by the Purchaser and with the consent of the Vendors (not to
be unreasonably withheld or delayed).
9.8.1 The Vendors shall ensure that the Purchaser, its agents, advisers
(including legal advisers or insurers) and representatives are given
promptly on request full access to all accounting, taxation and other
records of the Companies and any other facilities and information
regarding the business, assets, liabilities, contracts and
arrangements of the Companies which it may request and which are
within the possession or the control of the Vendors and the Vendors
hereby undertake to retain all such information in their possession
and control for a period of six years following the date hereof.
9.8.2 The Purchaser shall ensure that the Vendors, their agents, advisers
(including legal advisers and insurers) and representatives are given
promptly on request full access to all accounting, taxation, and other
records of the Company and Automatic Communications Limited and any
other facilities and information regarding the business, assets and
liabilities, contracts and arrangements of the Company and Automatic
Communications Limited which they may request and which are within the
possession or control of the Purchaser, for so long as any of the
Consultancy Agreements remain in effect or the Deferred Consideration
remains payable pursuant to this Agreement.
9.9 Subject as mentioned in clause 9.4 each party shall pay its own legal,
accountancy and other costs, charges and expenses incurred in
connection with this Agreement.
9.10 It is hereby agreed that the negotiations concerning the migration of
the Company from the UK (including any appeals) and the finalisation
of the tax computations for the accounting periods ending 30 June 1997
and with the migration, shall continue to be dealt with by Messrs
▇▇▇▇▇▇▇▇ Croydon or Messrs ▇▇▇▇▇▇▇ Gainsford, unless the parties
otherwise agree.
9.11.1 This Agreement and the documents referred to in this Agreement
constitute the whole agreement between the parties in relation to the
subject matter covered. No oral explanation or oral information given
by any party shall alter the interpretation of this Agreement. It is
agreed that:
(a) no party has entered into this Agreement in reliance upon any
representation, warranty or undertaking which is not set out or
referred to in this Agreement save for information relating to
the Purchaser supplied to the Vendors' Solicitors by Troop,
Steuber, Pasich, ▇▇▇▇▇▇▇ & ▇▇▇▇▇ of ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇-▇▇▇▇, ▇▇▇ and save for the information supplied
in writing by the Vendors or the Vendors' Solicitors or Vendors'
Accountants to the Purchaser or any professional advisers of the
Purchaser;
(b) in the absence of fraud, no party will have any remedy in respect
of any untrue statement, made to it or its representatives or
agents, upon which it or they relied and such party's only remedy
will be for breach of contract; and
(c) this clause shall not exclude any liability for fraudulent
misrepresentation.
9.11.2 No acquisitions of any other company or business or undertaking shall
be made by the Purchaser, unless the same shall have been approved
unanimously by all the members of the Board of the Purchaser and (for
so long as the Consultancy Agreements remain in effect) ▇▇▇▇▇▇ ▇▇▇▇▇
or ▇▇▇▇▇▇▇ ▇▇▇▇▇ nor shall the Company make any acquisition of any
asset or series of assets the value of which exceeds US$50,000 without
such approval.
9.12 The parties hereby undertake with each other to do or procure to be
done all such further acts and things and execute or procure to be
executed all such further deeds and documents as may be necessary or
desirable fully and effectively to give full effect to the terms of
this Agreement and the agreements entered into in the agreed form and,
following Completion, pending such vesting, the Vendors shall hold
such Shares and benefits in trust for the Purchaser and shall receive
all monies in connection therewith as trustee of the Purchaser and
shall account to the Purchaser forthwith on receipt.
9.13 Any notice:
9.13.1 (a) must be in writing and must be given:
(i) to a company which is a party at its registered office or to
such other address as may have been notified to the other
party; and
(ii) to any individual who is a party at the address of that
individual given at the beginning of this Agreement; and
(b) will be effectively served:
(i) on the day of receipt where any hand-delivered letter,
telefax message is received on a Business Day before or
during normal working hours; or
(ii) on the following Business Day, where any hand-delivered
letter or, telefax message is received either on a
Business Day after normal working hours or on any other
day; or
(iii) on the second Business Day following the day of posting
from within the United Kingdom of any letter sent by post
office inland first class mail postage prepaid.
9.13.2 Each of the Vendors hereby appoint ▇▇▇, ▇▇▇▇▇▇▇ and ▇▇▇▇▇ of ▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇ (marked for the attention of ▇▇▇▇▇
▇▇▇ or ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇) as their authorised agent for the purpose of
accepting service of process and notices for all purposes in
connection with this Agreement.
9.13.3 The Purchaser hereby appoints ▇ ▇ ▇▇▇▇▇▇ & Co of ▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇, (marked for the attention of ▇▇▇▇▇▇ ▇▇▇▇▇▇ or ▇▇▇▇▇
▇▇▇▇▇▇) as it's authorised agent for the purpose of accepting service
of process and notices for all purposes in connection with this
Agreement.
9.14 This Agreement and all documents supplemental thereto are governed by
and are to be construed in accordance with English law.
9.15 The parties accept the non-exclusive jurisdiction of the appropriate
court of law in England in relation to all matters, claims and
disputes arising out of or in connection with this Agreement, any of
the documents in the agreed form or any document supplemental thereto.
9.16 Any provisions of this Agreement shall, so far as they are capable of
being performed or observed, continue in full force and effect
notwithstanding Completion except in respect of those matters already
performed.
9.17 This Agreement may be executed in several counterparts (whether
original or facsimile counterparts) and upon the execution of all such
counterparts by one or more parties, each counterpart shall be deemed
to be an original hereof.
SCHEDULE 1
The Vendors
Column 1 Column 2 Column 3 Column 4
-------- -------- -------- --------
Proportion of
Initial
Consideration
(including Proportion of
Consideration Deferred
Name and Address Shareholdings Shares) Consideration
---------------- ------------- ------- -------------
Panton Management Limited 2 ordinary shares jointly 50 per cent. 50 per cent.
(no. 39307B held by the Vendors
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇ ▇▇▇ ▇-▇▇▇▇
Nassau
Bahamas
50 per cent. 50 per cent.
Northern Management Limited
(no. 71490B)
Providence House
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇ ▇▇▇ ▇-▇▇▇▇
Nassau
Bahamas
SCHEDULE 2
Particulars of the Company
Number: 239381
Status: Private company limited by shares
Registered Office: ▇▇/▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇, ▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇
Authorised share capital: L100,000 divided into 100,000 ordinary shares of L1 each
Issued share capital: L2 divided into 2 ordinary shares of L1 each
Shareholders and shareholdings: Two ordinary shares of L1 each held jointly by the Vendors
Directors: ▇▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇▇
Secretary: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Charges: None.
SCHEDULE 3
Warranty Statements
1 All information contained or referred to in the Disclosure Letter and all
other information given by any of the Vendors of any of the directors,
officials or professional advisers of the Company to any of the directors,
officials or professional advisers of the Purchaser is accurate in all
material respects.
2 All requirements applicable to the continuance in existence, management,
property or operations of the Company have been complied with, the
Company's books of accounts and other records are complete and accurate and
the Company has not committed any illegal or unlawful act and is not liable
for any breach of covenant, consent, licence, permission, contract or
statutory duty (all requisite or necessary consents, licences and
permissions having been obtained).
3 The Accounts and the accounting records of the Company having been prepared
in accordance with the applicable requirements and in accordance with
generally accepted accountancy principles and are true, complete and
accurate in all material respects, and show a true and fair view of the
state of affairs and assets and liabilities of the Company as at the
Accounts Date and the profits or losses of the Company for the period
concerned.
4 The Accounts make full provision for and disclose and take into account as
at the Accounts Date, all assets, liabilities (actual, contingent or
disputed), all capital commitments (actual or contingent) and all bad and
doubtful debts.
5 Since the Accounts Date no dividend or other distribution (save for
payments made by way of consultancy fees to the Vendors) has been declared
or paid on, and no capital distribution made or agreed to be made in
respect of, any share capital of the Company and all amounts received by
the Company have been paid into its account and appear in the Company's
books of account.
6 Since the Accounts Date the Company has carried on in the ordinary and
usual course the business carried on by it at that date.
7 Since the Accounts Date there has been no material adverse change in the
Company's financial position or prospects, the value of the Company's net
assets as at the date of this Agreement only is not less than the value of
its net assets at the Accounts Date and no material liabilities (actual,
contingent or disputed) have arisen, provided that for the avoidance of
doubt there will/may be no cash in hand at the bank on Completion.
8 Subject to the provisions of clause 3.8 of this Agreement all the book and
other debts of the Company outstanding at Completion are the absolute
property of the Company and will (save insofar as a specific provision has
been made in the Accounts therefor and save for the BT Amount) be good and
collectable in the ordinary course of business
9 All information contained or referred to in the Disclosure Letter and all
information supplied by the Vendors' Solicitors to the Purchaser's
Solicitors (including without limitation the information referred to in
paragraphs (A), (B) and (D) of the Introduction and Schedules 1 and 2), is
true, complete, accurate and not misleading in any material respects.
10 The Vendors are together the beneficial owners of the Shares (which
represent the entire issued share capital of the Company, there being no
other share or loan capital in the Company or any share or loan capital
under option to purchase or subscribe) and will at Completion have the
right and power to sell and transfer unencumbered, the entire legal and
beneficial ownership of the Shares with full title guarantee free of all
options, liens, charges or other encumbrances and together with all
dividends, distributions, (save for payments made by way of consultancy
fees to the Vendors rights declared, paid, credited or arising to the
Purchaser in accordance with the provisions of this Agreement.
11 As at the date of this Agreement none of the Vendors is aware of any
material fact or matter not disclosed in writing to the Purchaser, the
disclosure of which might reasonably affect the willingness of a reasonable
Purchaser to acquire the Shares on the terms of this Agreement.
12 The Company is not a party to any material or onerous contract and has not
guaranteed any other person's liabilities or is a party to any contract
with a Vendor or director, employee, consultant of a Vendor or any persons
connected with any of them not disclosed in the Disclosure Letter.
13 All the assets of the Company are prudently insured and all insurance
policies of the Company are in full force and effect and all premiums have
been paid and there are no insurance claims or possible insurance claims by
the Company in existence.
14 The Company is the owner of and has good and marketable title to all the
assets used in its business and has all assets necessary to carry on its
business and the Company will not prior to
Completion without the prior written consent of the Purchaser (not to be
unreasonably withheld or delayed) acquire any assets on lease purchase or
by leasing agreement.
15 The Company does not have outstanding any commitment for capital
expenditure or any agreement or arrangement not on an arm's length basis.
There is not outstanding any mortgage or charge on the whole or any part of
the undertaking, property or assets of the Company.
16 Neither the Company nor any of the Vendors has any reason to believe that
the sale of the Shares will result in either loss of business with any of
the Company's present suppliers or customers or a breach of any contract,
covenant or licence or an employee handing in notice.
17 Otherwise than as disclosed in writing to the Purchaser's Solicitors or in
the Disclosure Letter the Company does not own, licence or use any
intellectual property or require to own, licence or use any intellectual
property in order to operate its business and the Company is not in breach
of any other person's intellectual property rights and the Company will not
prior to Completion without the prior written consent of the Purchaser (not
to be unreasonably withheld or delayed) acquire or take any licence in
respect of any intellectual property.
18 Full provision or reserve has been made in the Accounts for all Taxation
liable to be assessed on the Company or for which it is or may become
accountable in respect of the period ended on the Accounts Date.
19 The Company has within the required period duly and properly made, given or
delivered all information, returns, notices, accounts and computations
which ought to have been made for the purposes of Taxation and all such
information, returns, notices, accounts and computations supplied to any
Taxing Authority for any purpose have been made on a consistent basis.
20 Save as disclosed in the Disclosure Letter, there is no dispute or question
with any Taxing Authority and the Company has not been the subject of any
review, audit or investigation by any Taxing Authority and there is no fact
or circumstance known to the Vendors, ▇▇▇▇▇▇ ▇▇▇▇▇ or ▇▇▇▇▇▇▇ ▇▇▇▇▇ which
might give rise to any such dispute, audit, review or question.
21 No clearances and consents are or have been required to be obtained from
any Taxing Authority .
22 The Company has duly and punctually paid all Taxation for which it is
liable to the appropriate Taxing Authority and whether or not such
liability to Taxation is or could be the subject of an appeal.
23 The Company is under no liability to pay any penalty, interest, supplement,
fine, default surcharge or other payment in connection with any Taxation.
24 The Company has deducted or withheld all Taxation required to be deducted
or withheld from any payments made by the Company and the Company has duly
and punctually complied with any obligation to account for any such
Taxation deducted or withheld to the appropriate Taxing Authority.
25 There have been disclosed to the Purchaser in the Disclosure Letter, copies
of all notifications (if any) from the Inland Revenue that any payment may
be made gross or at a reduced rate of withholding which otherwise should
have been made net of Taxation.
26 The Company is not the owner of:
(a) any shares to which Sections 249-251 ICTA could apply; or
(b) any qualifying corporate bonds within Sections 116 and 117 TCGA or any
qualifying convertible securities within Schedule 10 to the Finance
▇▇▇ ▇▇▇▇.
27 The Company has not issued and is not the owner of:
(a) any securities in relation to which payments might fall within Section
209(2)(d) and/or (e) ICTA;
(b) any deep discount securities within the meaning of Schedule 4 ICTA; or
(c) any deep gain securities within the meaning of Schedule 11 to the
Finance ▇▇▇ ▇▇▇▇.
28 The Company has not been concerned or agreed to be concerned in any
transaction involving an exempt distribution within Sections 213-18 ICTA.
29 Within the four years prior to Completion there will have been no major
change in the nature or conduct of any trade or business of the Company
within the meaning of Section 245 or 768 ICTA whether or not arising as a
result of the transfer of assets directly or indirectly by the Company to
the Vendor or to any other company under the control of the Vendor or to a
connected person of any of them, and no arrangements exist whereby, after
Completion, any such major change shall occur.
30 At no time prior to Completion will the activities in a trade carried on by
the Company or the scale of activities in a trade or business carried on by
the Company become negligible or small and no
arrangements exist whereby, after the date of Completion, any such
activities shall cease or the scale of any such activities shall become
small or negligible.
31 The Company is not and has never at any time been registered for the
purposes of VATA.
32 As at the date of this Agreement, other than as disclosed in the Accounts
the Company is not involved in any litigation, prosecution, arbitration or
any other proceedings for the enforcement of rights or settlement of
disputes and no act, omission or event has occurred which has given rise to
a threat of such proceedings or which is likely to result in the Company
being involved in any such proceedings.
33 The Company has no liability whatsoever (whether legally binding or not) to
make any payment to or for the benefit of any employee, officer,
consultant, independent contractor or agent in respect of past service,
pension or the termination of the employment or engagement of that or any
other person (including, without limitation, payments for wrongful or
unfair dismissal, loss of office or redundancy) and the Company has no
superannuation fund, retirement benefit or other pension schemes or
arrangements.
34 Full details of all employment, engagement, remuneration and notice terms
of all employees, directors, consultants, independent contractors or agents
of the Company are set out in the Disclosure Letter and all remuneration
due to them up to Completion has been paid and all of their employment,
engagement and office terms can be terminated by the Company on less than
three months' notice.
35 There is no outstanding commitment (whether legally binding or not) to
increase the remuneration of any officer, employee, consultant, independent
contractor or agent of the Company beyond any remuneration presently
payable.
36 As at the date of this Agreement, the Company has no bank overdraft
facilities nor any borrowings.
37 Other than as disclosed to the Purchaser in writing or in the Disclosure
Letter there are no existing contracts (including, without limitation,
customer and supply contracts) to which the Company is a party and in which
any of the Vendors' Group or any director or shareholder of the Company or
any person connected with any of them is interested (and for the purposes
of this paragraph a person shall be deemed to be interested in a contract
in accordance with the provisions of Section 317 of the Companies Act
1985).
38 The Company:
(a) is not party to any contract other than those described in Schedule 5
hereto or disclosed in the Disclosure Letter;
(b) is not a party to any contract, arrangement or commitment (whether in
respect of capital expenditure or otherwise) which was entered into
otherwise than on terms determined on an arms' length basis, or
outside the ordinary course of business;
(c) has not delegated any powers under a power of attorney (other than as
an incidental part of a larger transaction) which remains in effect
and has appointed any agent under an authority which has not been
revoked and other than any ostensible or implied authorities to
directors or employees and consultants to enter into routine contracts
in the normal course of their duties;
(d) has not, by reason of its default, become bound, and no person has
become entitled (or with the giving of notice and/or the issue of a
certificate will become entitled) to require it, to repay prior to its
stipulated due date any loan capital or other debenture, redeemable
preference share capital or borrowed money and no notice has been
received since the Accounts Date of such liability having arisen for
any other reason;
(e) has not entered into and is not bound by any guarantee or indemnity
under which any liability or contingent liability is outstanding;
(f) has not at any time acquired, assigned or otherwise disposed of any
leasehold property in such a way that it retains any residual
liability;
(g) save as disclosed in the Disclosure Letter is not and has never been
party to any joint venture, consortium, partnership or profit sharing
arrangement or agreement; and
(i) to the best of the Vendors' knowledge is not in default under any
written agreement or covenant to which it is a party, nor under any
other written obligation binding on it being a default which would
have a materially adverse affect.
39 The Company does not own or have any interest in any land or building other
than as disclosed in the Disclosure Letter and the Company has not entered
into any legally binding agreement for the purchase of any such interest.
40 Neither of the Vendors is a U.S. Person as defined in Regulation S of the
United States Securities and Exchange Commission (the "SEC") under the
Securities Act, a copy of which definition has been provided to the
Vendors.
SCHEDULE 4
RELEVANT PROFITS
1 The Relevant Profits will be determined by reference to the net profits
of the Company as shown by the financial statements of the Company as
at 30th June 1998 ("the 1998 Accounts") and those to be prepared and
audited as at 30th June 1999 ("the Final Audited Accounts"). The Final
Audited Accounts shall be prepared and audited by the Company's
Auditors applying accounting policies and principles on a basis
consistent with generally accepted accounting policies and practises
applied on a basis consistent with those used in preparing the 1998
Accounts and in particular full provision will be made for all actual,
and contingent liabilities of the Company.
In order to arrive at the Relevant Profits there shall be deducted in
each case the amount of Taxation payable by the Company as shown in the
relevant accounts or as otherwise determined and the relevant net
profits shall be subject to the following adjustments (if not already
taken into account in the profit and loss accounts):
A Adding back:
(i) Taxation shown by the audited Profit and Loss Account of the
Company or as otherwise determined;
(ii) Any payments:
(a) not made at arms length;
(b) made to any other company within the Group of which the
Company forms part, including in particular the
Purchaser including any management fees or other charges
paid to any other such company;
(c) made in connection with anything not in the Company's
normal course of business;
(iii) All payments made to any of the following:-
(a) Panton Management Limited;
(b) Northern Management Limited;
(c) ▇▇▇▇▇▇ ▇▇▇▇▇; and
(d) ▇▇▇▇▇▇▇ ▇▇▇▇▇;
and any expenses payable to them, whether under any Consultancy
Agreement or otherwise howsoever;
(iv) any depreciation charged in respect of any items which
would normally fall to be depreciated;
(v) any rents, licence fees or outgoings in respect of any
premises occupied or shared by the Company.
B So as to negate any profits or losses on the revaluation of any
assets or any adjustment arising on the translation into US
Dollars of assets and liabilities denominated in currencies other
than US Dollars;
C Adding back any extraordinary items as described in Financial
Reporting Standard 3 (FRS3) not deriving from the ordinary
activities of the Company and any Associated Company of the
Company; and
D So as to exclude profits or losses of a capital nature.
2 The Purchaser and the Vendors agree to procure that the Company's auditors
are instructed to prepare the Final Audited Accounts.
3.1 The Purchaser shall instruct the Purchaser's Auditors to review the Final
Audited Accounts within 7 business days of the Company's Auditors issuing
the Final Audited Accounts with a view to confirming to the Vendors and the
Purchaser within 28 days of the date on which the Final Audited Accounts
are approved by the Board of Directors of the Purchaser either that they
approve the Final Audited Accounts or that they propose that adjustments
should be made to the Final Audited Accounts. If the Purchaser's Auditors
do not approve the Final Audited Accounts in their entirety, the
Purchaser's Auditors shall be instructed to discuss the adjustments
suggested by the
Purchaser's Auditors with a view to reaching agreement with the Company's
Auditors on the final form of the Final Audited Accounts within 14 days of
the end of the above 28 day period. If they fail to reach agreement, the
matter shall be referred to a firm of accountants of international repute
chosen by the Vendors and the Purchaser, provided if they fail to agree on
their choice within seven days of the end of such 14 day period, such firm
shall be chosen by the President of the Institute of Chartered Accountants
(the "Independent Firm") on the application of either party. The
Independent Firm shall determine what adjustments (if any) may be required
to the Final Audited Accounts in order for them to comply with this
Schedule 4. The Company's Auditors shall, if requested give the
Purchaser's Auditors and the Independent Firm access to their working
papers.
3.2 In the event that the Purchaser does not instruct the Purchaser's Auditors
within the period referred to in paragraph 3.1 of this Schedule 4, or in
the event that the Purchaser's Auditors fail to notify the Company's
Auditors that they do not approve the Final Audited Accounts in their
entirety within a further period of fourteen days then the Final Audited
Accounts shall be deemed to have been agreed inter alia for the purposes of
paragraph 3.1 of this Schedule 4.
4 For the purposes of the matters described in this Schedule, the Independent
Firm shall be deemed to act as expert and not as an arbitrator. In the
absence of manifest error, the determination of the Independent Firm shall
be conclusive and binding and the Purchaser and each of the Vendors agrees
to be bound by such determination.
SCHEDULE 5
CONTRACTS
1 Service agreement dated 1996 entered into between the Company and Sierre
Leone Telecommunications Company Limited
2 Service agreement dated 15 January 1998 between the Company and Cable &
Wireless Panama SA.
3 Audiotext termination agreement between Teleglobe International Inc. and
the Company dated 3 September 1997.
4 Service agreement dated 11 November 1998 between Automatic Communications
Limited and the Company.
5 Master Contract Hire Agreement dated 22 July 1998 between (1) Network
Vehicles Limited and (2) Verity International Limited.
6 Hire Agreement dated 22 July 1998 re: Volkswagen Polo between same
parties.
7 Lease Purchase Agreement dated July 1998 re: Range Rover registration
number N708 JLT between the same parties.
SCHEDULE 6
VENDORS' PROTECTION PROVISIONS
1 The liability of the Vendors in relation to the Warranty Statements shall
cease on the expiration of the accounting reference period of the Company
ended on 30 June 2000 (or if the accounting reference period of the Company
is altered, then 30 June 2000) save as regards any alleged specific breach
of which notice in writing (containing details of the event or circumstance
giving rise to the breach, the basis upon which the Purchaser is making a
claim against the Vendors and the total amount of liability which results)
has been given to the Vendors prior to that anniversary.
2 The Vendors shall not be liable for any Warranty Claim unless their
aggregate liability (or what would be their liability apart from this
paragraph) exceeds US$50,000 in which case the Vendors shall be liable for
both the initial US$50,000 and the excess.
3 The total liability of the Vendors under the Warranties and the Deed of
Indemnity shall not in any event exceed the value of the Consideration
received by the Vendors.
4 In the event of any Warranty Claim being established, the Vendors shall be
entitled to set off against the amount of any depletion in or reduction in
the value of the assets of the Group Companies giving rise to the Warranty
Claim the amount by which (after adjustment where appropriate for Taxation
in respect of revenue items) the position of the Group Companies (taken as
a whole) in respect of any other matter is established to be better than as
so warranted (after adjustments where appropriate for Taxation).
5 The Vendors shall not be liable for any Warranty Claim to the extent that
the subject matter of the Warranty Claim is taken into account in
determining an adjustment to the Consideration.
6 If the Purchaser and the Company, or either of them, are entitled to make a
claim in respect of any act, event or default both under the Warranty
Statements and under the Deed of Covenant, the claim shall be made first
under the Warranty Statements and any amount payable to the Purchaser or
any Group Company under the Deed of Covenant shall be reduced to the extent
of the claim.
ATTESTATIONS
FOR AND ON BEHALF OF
SYMPOSIUM
TELECOM CORPORATION
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇-▇▇▇▇▇
.......................................
FOR AND BEHALF OF
PANTON
MANAGEMENT LIMITED
▇▇▇▇▇▇ ▇▇▇▇▇
.......................................
FOR AND ON BEHALF OF
NORTHERN
MANAGEMENT LIMITED
▇▇▇▇▇▇▇ ▇▇▇▇▇
.......................................
Signed by
▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇
.......................................
Signed by
▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇
.................................................
ANNEXURE A
POWER OF ATTORNEY
We PANTON MANAGEMENT LIMITED of ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, PO Box
N-3944, Nassau, Bahamas and NORTHERN MANAGEMENT LIMITED of ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, PO Box N-3944, Nassau, Bahamas being members of
▇▇▇▇▇▇▇▇ Telecommunications Limited (no. 239381) ("the Company") hereby
irrevocably and unconditionally jointly appoint Symposium Telecom
Corporation of ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ("the
Purchaser") to be our true and lawful attorney (with full power to appoint
substitutes) pending registration of the Purchaser as the legal owner of
the shares in the capital of the Company held by us jointly ("the Shares")
and in our name or otherwise and on our behalf and as our act and deed to
do exercise and perform any of the acts and things to be done and performed
or that may be done and performed by us and to execute any documents
necessary to be or, if the Purchaser deems desirable, that may be completed
or executed by us as our attorney shall think to do and perform and execute
in connection with the legal or beneficial ownership of all or any of the
Shares as if it were the legal and beneficial owner of the Shares and in
particular but without limitation:
(a) to do and perform any of the acts and things and to approve and
execute any document or documents necessary to be completed or
executed by us for transferring our legal or beneficial interest in
all or any of the Shares into the name of the Purchaser or its
nominee(s) or other person(s) nominated by the Purchaser or any
person(s) purchasing all or any of the Shares from the Purchaser; and
(b) to receive or accept service of or agree to waive all or any notices
or to agree to accept short notice for and to attend and vote and
demand and vote on a poll or otherwise at all or any meetings or class
meetings of the holders of shares or securities in the Company;
in all cases as amply and effectually as we could do if this Power of
Attorney had not been made and no sale of any legal or beneficial ownership
of the Shares had taken place by us.
We hereby undertake, pending registration of the transfer of the Shares, to
ratify whatever our attorney shall lawfully do or cause to be done
hereunder.
This Power of Attorney is irrevocable and is given to secure the
proprietary interest of the Purchaser in the Shares.
Dated
Executed as a deed by )
PANTON MANAGEMENT LIMITED )
by the signature of: )
Director
Director/Secretary
Executed as a deed by )
NORTHERN MANAGEMENT LIMITED )
by the signature of: )
Director
Director/Secretary
ANNEXURE B
RELEASE OF LIABILITIES
To: The Directors of ▇▇▇▇▇▇▇▇ Telecommunications Limited ("the Company")
We hereby irrevocably and unconditionally release the Company and all of
its subsidiaries, subsidiary undertakings and associated companies and all
of their respective officers and employees from all and any claims or
liabilities, whether present or future, actual, contingent or otherwise,
which the Company, such other companies and any of such officers or
employees may have to me/us on any account whatsoever at the date hereof
and I/we hereby waive all and any rights or claims which I/we may have in
respect of any such liabilities. I/We also hereby confirm that there is
nothing owing between me/us and the Company, such other companies or any
such officers or employees.
Dated
Executed as a deed by )
[ ] )
in the presence of: )
ANNEXURE C
LOST SHARE CERTIFICATE INDEMNITY
To: ▇▇▇▇▇▇▇▇ Telecommunications Limited ("the Company")
The original certificates of title issued to us relating to 2 shares of L1
each fully paid of the Company have been lost or destroyed.
Neither the securities nor the certificates of title thereto have been
transferred, charged, lent, deposited or dealt with in any manner affecting
the absolute title thereto and we are the persons entitled to be on the
register in respect of such securities.
We request you to register a transfer of such shares to Symposium Telecom
Corporation without production of the said original certificates and in
consideration of you doing so undertake to jointly and severally indemnify
the Company against all actions, losses, costs, charges, expenses, claims and
demands which may be sustained or incurred by or brought or made against you
or any of you in consequence of you complying with this request and of the
Company permitting at any time hereafter a transfer of the said securities,
or any part thereof, without the production of the said original certificates.
We undertake to deliver to the Company for cancellation the lost certificates
should the same ever be recovered.
Dated 1998
Executed as a Deed by )
PANTON MANAGEMENT LIMITED )
in the presence of: )
Director )
)
Director/Secretary )
Executed as a Deed by )
NORTHERN MANAGEMENT )
LIMITED )
in the presence of: )
Director )
)
Director/Secretary )
ANNEXURE D
THE DEED OF COVENANT
DATED
DEED OF COVENANT
DATE
PARTIES
(1) The companies whose names and addresses appear in the Schedule to this
Deed ("the Vendors").
(2) Symposium Telecom Corporation of ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ("the Purchaser").
(3) ▇▇▇▇▇▇▇▇ International Limited (a company incorporated in the Republic of
Ireland with registered number 239381) whose registered office is at
▇▇/▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇, ▇▇▇▇▇▇▇▇ of Ireland ("the
Company").
INTRODUCTION
(A) This Deed is supplemental to an agreement of even date herewith ("the
Agreement") made between the Vendors and the Purchaser, whereby (inter
alia) the Purchaser agreed to purchase the shares in the Company from the
Vendors.
(B) Pursuant to the Agreement, the Vendors are required on Completion to
deliver to the Purchaser a duly executed deed of covenant in the form of
this Deed.
INTERPRETATION
(1) In this Deed, unless the context otherwise requires, words and
expressions not expressly defined in paragraph (2) below shall have the
respective meanings given to them in the Agreement, and the rules of
interpretation contained in clause 1 of the Agreement shall apply to this
Deed as if the same had been set out herein with references to the
Agreement being references to this Deed.
(2) The following expressions shall have the following meanings:
Demand any notice, demand, assessment, letter or other
document issued, or action taken, by or on behalf
of any Taxing Authority (including the imposition
of any withholding) from which it appears that a
Taxation Liability is or may be imposed which may
give rise to a claim under this Deed;
the Parties the parties to this Deed, the expression "Party"
meaning any of the Parties;
Taxation all forms of taxation, duties, rates, levies,
contributions, withholdings, deductions, liabilities
to account, charges and
imposts whether imposed in the United Kingdom or
elsewhere in the world, including but not limited to:
(a) in the United Kingdom, income tax to which
the "pay as you earn" system applies, ACT, any
liability arising under Sections 419 or 601
ICTA, national insurance contributions, VAT and
input tax within the meaning of Section 24 VATA;
and
(b) all penalties, charges, costs and interest
relating thereto or otherwise imposed by any
Taxing Authority;
Taxing Authority the Inland Revenue, H M Customs & Excise and any other
governmental, state, federal, provincial, local
governmental or municipal authority, body or
official whether of the United Kingdom or elsewhere
in the world;
Transaction any transaction, act, circumstance, omission,
agreement, arrangement or event whatsoever
(including, but not limited to, entering into the
Agreement, Completion, any change in the residence
of any person or the death, winding up or
dissolution of any person);
unavailability in relation to a Relief, means the loss, reduction,
nullification, non-existence, modification,
claw-back, counteraction, denial, disallowance,
cancellation of or failure to obtain that Relief
and "unavailable" shall be construed accordingly.
(3) In this Deed, references to a "Taxation Liability" mean not only any
payment or a liability to make any payment (or increased payment) of or
in respect of Taxation (whether or not such payment is primarily payable
by the Purchaser or the Company and whether or not the Purchaser or the
Company has or may have any right of reimbursement from any other person)
but also include:
(a) the enforcement or exercise of any mortgage, charge or power of sale
over any of the shares in or assets of the Company in connection with
the payment of any amount of Taxation.
(4) The Taxation Liability referred to in paragraph (3)(a) above shall be
treated as being equal to the amount of Taxation which is or is liable
to be paid out of the proceeds of enforcement or exercise of the
mortgage, charge or power of sale together with the
amount of any costs or expenses incurred in connection with such
enforcement or exercise which are liable to be paid out of those
proceeds.
(5) In this Deed:
(a) any reference to any form of Taxation or Relief in the United Kingdom
shall include a reference to the equivalent or substantially
equivalent form of Taxation or Relief in any other relevant taxing
jurisdiction;
(b) any reference to the occurrence of a Transaction on or before a
particular date (including without limitation, Completion) shall
include Transactions which are for the purposes of any Taxation
deemed to have been or treated or regarded as having occurred or
existed at or before that date; and
(c) any reference to income, profits or gains arising, earned, accrued
or received on or before a particular date (including without
limitation, Completion) or in respect of a particular period shall
include income, profits or gains which are for the purposes of any
Taxation deemed to have been or treated or regarded as arising,
earned, accrued or received on or before that date or in respect
of that period.
OPERATIVE PROVISIONS
1 COVENANT TO PAY
1.1 Subject as provided in this Deed, the Vendors agree to pay to the
Purchaser, or at the option of the Purchaser to the Company from time to
time an amount equal to:
(a) any Taxation Liability of the Company:
(i) which would not have arisen but for any Transaction or
Transactions occurring on or before the date of Completion;
or
(ii) arising in respect of or by reference to or in consequence
of any income, profits or gains arising, earned, accrued or
received on or before Completion;
(b) any Taxation Liability which is also a Taxation Liability of another
person and which is payable by the Company by virtue of
(c) the other person failing to discharge such a liability to Taxation;
any Taxation Liability of the Company arising under
Sections 154(2)(b) or 179 TCGA which would not have arisen but for a
Transaction or Transactions occurring on or before the date of
Completion;
(d) any Taxation Liability as specified in paragraph (3)(a) of the
Interpretation Section of this Deed falling on or to be met or paid
by the Purchaser or the Company and arising as specified in
paragraph (a) above;
(e) any Taxation Liability of the Company arising as a result of or in
respect of it ceasing to be resident for the purposes of tax in the
United Kingdom;
(f) any contractual liability of the Company entered into prior to
Completion to make a payment by way of reimbursement, recharge,
indemnity, covenant, guarantee or damages in respect of or arising
from another person's liability to Taxation; and
(g) all costs and expenses reasonably and properly incurred and payable
by the Purchaser or the Company in relation to any demand claim or
proceeding in respect of any Taxation Liability which is likely to
give rise to a claim under this Deed (taking into account clause
1.4).
1.2 Any amount paid to the Purchaser pursuant to this Deed shall be deemed
to constitute a reduction in the Consideration.
1.3 The Vendors shall be under no liability under this clause 1 and the
other provisions of this Deed in respect of any Taxation liability to
the extent that provision for such Taxation liability has been made in
the Accounts or such Taxation Liability was discharged prior to
Completion.
1.4 The Covenant in clause 1 shall not apply to any Taxation Liability
to the extent that
1.4.1 the provision or reserve made in the Accounts is
insufficient by reason of any increase in the rates of
taxation announced after the date of this Agreement, or
1.4.2 it would not have arisen but for a voluntary act or
transaction carried out by the Company after the date of
this Deed, otherwise than in the ordinary course of business
or at the request or with the consent of the Vendors, and
which the Purchaser knew or ought reasonably to have known
would give rise to such increased liability; or
1.4.3 it arises out of a Transaction undertaken after the Accounts
Date but before Completion by the Company in the ordinary
course of its business and for which the Company is
primarily liable; for the purpose of this Clause 1.4.3, a
Transaction undertaken outside the ordinary course of
business of the Company shall include, but not be limited
to, the following:
(i) anything which involves, or leads directly or
indirectly to the receipt by the Company of a Demand
in respect of any Taxation Liability of, or properly
attributable to, another person (other than the
Company);
(ii) anything which relates to or involves a Transaction
which is not entered into at arm's length (including,
but not limited to, the acquisition or disposal of an
asset or the supply of services or the lending of
money or the hiring or licensing of tangible or
intangible property);
(iii) anything which relates to or involves a distribution
for Taxation purposes, the creation, cancellation or
reorganisation of share or loan capital, the
creation, cancellation or repayment of any
intra-group debt or any company becoming or ceasing
or being treated as ceasing to be a member of a group
of companies or as becoming or ceasing to be
associated or connected with any other company for
any Taxation purposes; or
(iv) any failure to deduct and/or account for Taxation; or
(v) any Transaction which gives rise to a Taxation
Liability in respect of deemed (as opposed to actual)
income, profits or gains; or
(vi) any Transaction which gives rise to a Taxation
Liability under Sections 124 to 129 (inclusive) of
the Finance ▇▇▇ ▇▇▇▇ (change of residence and
non-residents) or Sections 203F, 203FA or 203FB of
ICTA (PAYE); or
(vii) any fine, penalty, surcharge, interest or other
imposition arising as a result of a failure by the
Company duly to deduct, charge, recover and/or
account for Taxation.
1.4.4 the Company has recovered (less any costs of recovery and any tax on
the recovery) an amount in respect of such Taxation from a person or
persons other than the Vendors or the Purchaser.
1.5 The Purchaser shall not be entitled to recover any sum pursuant to
this Deed if and to the extent that the same subject matter has
given rise to a claim for breach of any of the Warranty Statements
and that claim has been satisfied and vice versa.
2 GROSSING-UP OF PAYMENTS
2.1 All sums payable by the Vendors to any person pursuant to this Deed shall
be paid free of any rights of counterclaim or set off and without any
deductions or withholdings whatsoever, save only as may be required by
any applicable law.
2.2 If any deductions or withholdings are required by law to be made from any
of the sums payable pursuant to this Deed (other than interest payable
pursuant to clause 3.2 thereof), the Vendors shall be obliged to pay to
the relevant person such sum as will, after the deduction or withholding
has been made, leave that person with the same amount as it would have
been entitled to receive
in the absence of any such requirement to make a deduction or
withholding provided that if the relevant person obtains a credit for
the deduction or witholding in calculating its Taxation liability it
shall promptly account to the Vendors for such proportion of any credit
obtained as shall leave the relevant person in no better or worse
position than if no such deduction or withholding had been required.
2.3 If Taxation is payable on any sum paid by the Vendors to any person
pursuant to this Deed or the Agreement, (other than interest payable
pursuant to clause 3.2 thereof) the sum otherwise so payable shall be
grossed up by such amount as will ensure that, after payment of any
Taxation charged on or in respect of such payment, there shall be left a
sum equal to that which would otherwise be payable pursuant to this Deed
or the Agreement.
3 DATE FOR PAYMENT
3.1 Without prejudice to clauses 1.3 and 1.4 of this Deed, Where the Vendors
become liable to make any payment pursuant to this Deed, the due date for
the making of that payment shall be:
(a) where that payment relates to a liability on the part of the
Purchaser or the Company to pay an amount of or in respect of
Taxation, the fifth Business Day prior to the date on which that
amount must be paid to the Taxing Authority concerned in order to
avoid incurring a liability to interest or a charge or penalty in
respect of such Taxation; and
(b) in any case under 1.1(f) or (g), the date falling five Business Days
after the date when the Vendors have been notified by the Purchaser
or the Company that the Vendors have a liability for a determinable
amount pursuant to this Deed.
3.2 If any payment required to be made by the Vendors pursuant to this Deed
is not made by the due date then the amount payable shall carry interest
from the due date until the date when payment is actually made at the
rate of 2% above the base rate from time to time of Barclays Bank PLC.
4 PURCHASER'S UNDERTAKING
4.1 The Purchaser agrees to pay to the Vendors an amount equal to any
liability of the Vendors for corporation tax arising pursuant to Section
767A ICTA as a result of the Company failing to pay any corporation tax
assessed on it.
4.2 The Purchaser shall not be liable under clause 4.1 for any corporation
tax:
(a) to the extent that the Purchaser would (but for such corporation tax
having been satisfied by the Vendors or such other person falling
within Section 767A(2) ICTA by virtue of a relationship which he has
with the Vendors) have had a claim under clause 1; or
(b) to the extent that it has been recovered (otherwise than from the
Vendors or ▇▇▇▇▇▇ ▇▇▇▇▇ or ▇▇▇▇▇▇▇ ▇▇▇▇▇) under Section 767B(2) ICTA
(and the Vendors shall procure that no such recovery is sought to
the extent that payment is made hereunder).
4.3 Clause 3 shall apply to the covenant contained in this clause 4 as it
applies to the covenant contained in clause 1, replacing references to
the Vendors with references to the Purchaser (and vice versa) and making
any other necessary modifications.
5 RIGHT TO REIMBURSEMENTS
5.1 If the Purchaser or the Company is or becomes entitled to recover
(whether by operation of law contract or otherwise including by way of
indemnity) from some other person (not being the Company or any member of
the Purchaser's Group or any employee of any of them) any amount in
respect of a Taxation Liability which has resulted in a payment by the
Vendors to the Purchaser under this Deed, then the Purchaser shall
promptly notify the Vendors of the said entitlement and, if so required
by the Vendors and at the cost of the Vendors the Purchaser and the
Company shall take all reasonable steps as the Vendors may reasonably
require to enforce that recovery (keeping the Vendors fully informed of
progress) and shall apply the same in accordance with Clause 5.2.
5.2 If the Purchaser or the Company receives a recovery as mentioned in
Clause 5.1 then the Purchaser shall promptly pay to the Vendors an amount
equal to so much of the benefit received or sum recovered (less any tax
payable by the recipient in respect thereof and less any costs and
expenses incurred by the Purchaser or the Company) as does not exceed the
amount which the Vendors have previously paid under this Deed in respect
of the relevant Taxation Liability (together with so much of any interest
or repayment supplement paid to the recipient of the recovery or
corresponding benefit in respect thereof as corresponds to the
proportions of the recovery or benefit accounted for under this Clause
5.2, less any tax thereon).
6 RELIEFS AND CORRESPONDING SAVINGS
6.1 Where:
(a) an amount of tax paid by the Company has resulted in a Relief which
would not otherwise have arisen (and which has not been taken into
account in computing any liability of the Covenantor under the
Warranty Statements or has not been taken into account in computing
any over-provision pursuant to Clause 6.1(b)) (a "Relevant Relief")
and the Vendors have made a payment to the Purchaser in respect of
such amount of Taxation under this deed; or
(b) any provision for tax in the Accounts has proved to be an
over-provision (except to the extent that such over-provision
results from the utilisation of a Relief arising in relation to any
period after Completion or by reason of a Relief already taken into
account in
computing any payment under the warranties or this Deed or for the
purposes of Clause 6.1(a) above) ("Over-provision");
an amount equal to the amount by which the Company's liability to Tax is
reduced as a result of utilisation of a Relevant Relief or Over-provision
(as determined and certified by the auditors for the time being of the
Company at the expense of the Vendors) shall be dealt with in accordance
with clause 6.2 below.
6.2 Where pursuant to clause 6.1 any amount ("the Relevant Amount") is to be
dealt with in accordance with this sub-clause:-
(a) the relevant amount shall first be set off against any payment then
due from the Vendors under this Deed or any provision of the
Agreement relating to Taxation;
(b) to the extent there is an excess after set off in accordance with
clause 6.2(a) a refund shall be made to the Vendors of any previous
payment or payments made by it under this Deed in respect of such
Tax Liability and not previously refunded under this sub-clause up
to the amount of such excess; or
(c) to the extent of any remaining excess, the same shall be set against
further payment under this Deed or any provision of the Agreement
relating to Taxation until exhausted.
6.3 For the purposes of clause 6.1(a) no Relevant Relief shall be treated
as having arisen until it has been realised by the Company either by
way of repayment or by reduction in tax which would otherwise have been
due and payable and in particular nothing in this clause shall require
the Purchaser to procure that the Company utilises a Relevant Relief
prior to any relief which became available to the Company after
Completion.
7 CONTESTING OF ANY DEMAND
7.1 If any Demand is received by or comes to the notice of the Purchaser or
the Company, the Purchaser shall as soon as reasonably practicable give
or procure to be given to the Vendors written notice of that Demand.
Such notice shall be accompanied by a copy of the Demand (if made in
writing).
7.2 If so requested in writing by the Vendors and subject to the Purchaser
and the Company being indemnified and secured in such manner as the
Purchaser may reasonably require against all losses, Taxation, additional
Taxation, costs, damages and expenses which may be incurred, the
Purchaser and the Company shall take such action (at the cost of the
Vendors) as the Vendors may reasonably request in writing to avoid,
dispute, resist, appeal, compromise or defend the Demand PROVIDED THAT
neither the Purchaser nor the Company shall be required to make a formal
appeal to any court, appellate body or judicial authority unless the
Vendors at their own expense and after disclosure of all relevant
information and documents obtain and deliver to the
Purchaser an opinion from Counsel who has specialised in Taxation
matters for a minimum of five years advising that in his opinion an
appeal against the Demand would on the balance of probabilities be
likely to succeed.
7.3 The Vendors hereby acknowledge that neither the Purchaser nor the Company
shall be obliged to comply with any of the provisions of clause 7.2 if in
the opinion of the auditors of the Company at the time of such
determinationany such compliance would adversely affect the future
liability of the Company to Taxation without the approval of the
Purchaser or the Company such approval not to be unreasonably withheld or
delayed.
7.4 The Purchaser or the Company shall, without reference to the Vendors, be
entitled to admit, compromise, settle, discharge or otherwise deal with a
Demand on such terms as it thinks fit and without prejudice to any right
or remedy under this Deed if:
(a) the Vendors have not made the request referred to in clause 7.2 by
the earlier of the following dates:
(i) the date occurring 21 days after the date on which notice of
that Demand was given pursuant to clause 7.1; and
(ii) the date occurring two clear Business Days prior to the last
date on which an appeal may be made against the Taxation
Liability to which the Demand relates; or
(b) the Purchaser or the Company shall not at any time be indemnified
and secured as provided in clause 7.2; or
(c) Counsel shall advise (on the balance of probabilities pursuant to
clause 7.2) that an appeal against the relevant Demand is not likely
to succeed; or
(d) the Vendors shall have made the request referred to in clause 7.2,
but shall subsequently fail to make a further request or requests
within 21 days of the Purchaser requesting the same in writing from
the Vendors; or
(e) it appears to the Purchaser or the Company that while the Company
was under the control of the Vendors there was any act or failure to
act by the Company or the Vendors which might constitute fraud in
relation to any Taxation Liability.
7.5 For the purposes of this clause 7, the Vendors shall appoint from amongst
their number a representative who may make or authorise the making of
requests as to any action to be taken ("the Vendors' Representative") and
the Vendors may by not less than seven days' written notice to the
Purchaser signed by all the Vendors withdraw the authority of one
representative and appoint another in his place. The Purchaser and the
Company shall be entitled to have regard
only to the requests made or authorised by the said Vendors'
Representative from time to time and shall not be responsible for the
consequences of or incur any liability to any of the Vendors by acting
in accordance with such instructions.
8 GENERAL
8.1 The liability of the Vendors under this Deed shall be joint and several.
8.2 Any liability to the Purchaser under this Deed may be released,
compounded or compromised in whole or in part and time or indulgence may
be given by the Purchaser in its absolute discretion as regards the
Vendors or any of them under such liability without in any way
prejudicing or affecting its rights against the Vendors or any of them in
respect of any other liability under this Deed or against any other
Vendor under the same or a like liability.
8.3 The rights under this Deed of the Vendors, Purchaser and the Company
shall be without prejudice to their respective rights and remedies under,
pursuant to or resulting from the Agreement and shall continue to be of
full force and effect notwithstanding Completion.
8.4 The provisions of clauses 9.12 (Notices and Acceptance of Process), 9.13
(Governing Law), 9.14 (Jurisdiction) and 9.16 (Execution in Counterparts)
of the Agreement shall apply to this Deed as if the same had been set out
herein with references to the Agreement being references to this Deed.
SCHEDULE
(the Vendors)
1. Panton Management Limited (no. 39307B) whose registered office is at
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, PO Box N-3944, Nassau, Bahamas.
2. Northern Management Limited (no. 71490B) whose registered office is
at ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, PO Box N-3944, Nassau,
Bahamas.
EXECUTED and DELIVERED )
as a DEED by SYMPOSIUM )
TELECOM CORPORATION )
---------------------------
Director
---------------------------
Director/Secretary
EXECUTED and DELIVERED )
as a DEED by PANTON )
MANAGEMENT LIMITED )
---------------------------
Director
---------------------------
Director/Secretary
EXECUTED and DELIVERED )
as a DEED by NORTHERN )
MANAGEMENT LIMITED )
---------------------------
Director
---------------------------
Director/Secretary
ANNREXURE E
CONSULTANCY AGREEMENT
DATED
CONSULTANCY AGREEMENT
SYMPOSIUM TELECOM CORPORATION (1)
[-] (2)
MR/MRS [-] (3)
DATE
[ ]
PARTIES
(1) SYMPOSIUM TELECOM CORPORATION of ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ 1022 ("the Company");
(2) [ ] of [-] ("the Consultant"); and
(3) [ ] of [-] ("Mr/Mrs ").
DEFINITIONS
(A) In this Agreement, unless the context otherwise requires, the following
words and expressions bear the meanings shown:
"ACL" Automatic Communications Limited (a company
incorporated in the Bahamas)
"the Appointment" the appointment of the Consultant on the terms
of this Agreement
"the Board" the board of directors for the time being of the
Company (excluding Mr /[ ])
"the Business" the business of providing international and
audiotext services, and a billing mechanism
for international audiotext services carried
on by ▇▇▇▇▇▇▇▇ and in the case of ACL the
same and also internet services
"the Commencement Date" the date of Completion of the acquisition
of the entire issued share capital of
▇▇▇▇▇▇▇▇ by the Company
"Confidential Information" all information which may be imparted in
confidence or be of a confidential nature
relating to the Business or prospective
business, current or projected plans or
internal affairs of the Company or any
Group Company and, in particular, but not
limited to all Know-how, Marketing
Information, trade secrets, unpublished
information relating to the Company's or
any Group Company's intellectual property
and any other commercial, financial or
technical information relating to the
business or prospective business of the
Company or any Group Company or to any
customer or potential customer or supplier
or potential supplier, licensee, officer or
employee of the Company or any Group
Company or to any member or person
interested in the share capital of the
Company or any Group Company
"Documents" documents, disks, memory, notebooks, tapes
or any other medium, whether or not
eye-readable, on which information (whether
confidential or otherwise) may from time to
time be referred to, written or recorded
"the Group" the Company, any company which is for the
time being the ultimate holding company of
the
67
Company, all subsidiaries for the time
being of the Company or of such holding
company and any company at least 65 per
cent. of the equity share capital of which
is owned directly or indirectly by the
Company or by such holding company
"▇▇▇▇▇▇▇▇" ▇▇▇▇▇▇▇▇ Telecommunications Limited a company
incorporated in the Irish Republic
"holding company and the same meanings as are respectively
subsidiary" attributed to such expressions by Section
736 of the Companies ▇▇▇ ▇▇▇▇
"the Initial Period" the initial period of the Appointment as
described in clause 1.1
"Know-how" information (including without limitation
that comprised in formulae, specifications,
designs, drawings, component lists,
databases, software (or pre-cursor
documents), databases, manuals,
instructions and catalogues) held in
whatever form relating to the creation,
production or supply of any products or
services by the Company or any Group
Company, or by or to any of the suppliers,
customers, partners or joint venturers of
such company
"Marketing Information" information relating to the current or
prospective marketing or sales of any
products or services of the Company or any
Group Company, including lists of customers'
and suppliers' names,
68
addresses and contacts, sales targets and
statistics, market share and pricing
statistics, marketing surveys, research and
reports and advertising and promotional
material
"Net Profit" the net profit of the Company in each
financial year as determined pursuant to the
Schedule
"Permitted Business" the business of providing international
audiotext services and internet services and
a billing mechanism for international
audiotext services as carried on/or to be
carried on by Automatic Communications
Limited
"Relevant Profits" as set out in the Schedule
(B) References to any enactment shall be construed as references thereto as
from time to time amended or re-enacted and to any previous enactment
consolidated therein and to any regulation or order made thereunder.
(C) References to clauses and the parties are respectively to clauses of and
the parties to this Agreement.
OPERATIVE PROVISIONS
1 APPOINTMENT
1.1 Subject to the terms and conditions hereof the Company hereby
agrees to appoint the Consultant and the Consultant hereby agrees
to make available to the Company the services of Mr/Mrs [ ] as
a consultant of the Company for a fixed period of two years from
the Commencement Date ("the Initial Period") and thereafter
unless or until terminated by either the Company or the
Consultant giving to the other not less than four months' notice
in writing to expire at or at any time after the end of the
Initial Period (unless in the meantime notice has been given
pursuant to clause 1.2).
69
1.2 If on the second anniversary of the Commencement Date the
Appointment is continuing, the Consultant may extend the Initial
Period by one year from the date on which it would otherwise have
expired by giving notice in writing to the Company at any time
during the three months immediately preceding that anniversary in
which case the provisions of this clause 1.2 shall no longer
apply.
1.3 The Company (and any relevant Group Company) shall not be obliged
to provide work to the Consultant at any time after notice of
termination of the Appointment shall have been given by either
party under any of the provisions of this Agreement and the
Company may, in its discretion, take any one or more of the
following steps in respect of all or part of an unexpired period
of notice:
(a) require the Consultant to comply with such reasonable
conditions as it may specify in relation to attending at,
or remaining away from, the place(s) of business of the
Company and the Group Companies;
(b) assign the Consultant to other duties; or
(c) withdraw any powers vested in, or duties assigned to, the
Consultant.
1.4 [R Green only]. The Company agrees to appoint and, subject to
the approval of the shareholders of the Company and provided that
the Company is not required to make any disclosures in relation
to ▇▇ ▇▇▇▇▇ under Section 401(d) of Regulation S-B, to maintain,
▇▇ ▇▇▇▇▇ as a director of the Company and agrees that subject to
the resolution of the shareholders of the Company at the annual
general meetings of the Company he shall be entitled to remain
such a director so long as his services continue to be provided
hereunder.
1.5 [R Green, M ▇▇▇▇▇] The Company agrees that if not already
appointed as such [R Green and M ▇▇▇▇▇] shall be appointed and
will be entitled to remain a director of ▇▇▇▇▇▇▇▇ for so long as
the services of [R Green and M ▇▇▇▇▇] are provided under the
terms of this Agreement [F ▇▇▇▇▇▇ also] and in the event of the
Company acquiring ACL, as a director of ACL. The Company shall
procure at all times and maintain Directors or Officers Indemnity
Insurance for his/her benefit.
70
1.6 [R Green only] The Company and [R Green] agree to enter into an
Indemnification Agreement, substantially in the same form as that
attached to this Agreement as Annexure A.
1.7 [M ▇▇▇▇▇ and F ▇▇▇▇▇▇ alternative] the Company and [M ▇▇▇▇▇ and F
▇▇▇▇▇▇] agree to enter into an Indemnification Agreement on terms
to be agreed (or if they cannot be agreed then as determined by
an independent solicitor appointed by the parties by agreement or
in the absence of agreement by the President of the Law Society
of England and Wales (on the application of any party)) as soon
as is reasonably possible following the date of the Appointment
(if not entered into on the execution of this Agreement).
2 DUTIES
2.1 During the continuance of the Appointment the Consultant shall
and shall procure that Mr/Mrs [ ] shall:
(a) provide such services and exercise such powers in relation
to the Business as the Company may reasonably request from
time to time including (without prejudice to the generality
of the foregoing);
(i) advising the Company on all matters relating to the
promotion, development and conduct of the Business;
(ii) being responsible to the Board and performing such
duties and exercising such powers as may from time
to time be assigned to or vested in it or Mr/Mrs
[ ] by the Board;
(iii) making itself and [himself/herself] available, at
reasonable times and upon reasonable notice, to the
Company for the purpose of consultation and advice,
attending such meetings with representatives of the
Company as the Board may reasonably specify and, in
that connection, making such visits as the Board
may reasonably request from time to time;
(iv) [▇▇▇▇▇▇ ▇▇▇▇▇ and M ▇▇▇▇▇ only] acting as joint
managing director of ▇▇▇▇▇▇▇▇ and (if acquired by
the Company) ACL.
71
(b) throughout the Appointment procure that Mr/Mrs [ ]
devote as much time as [he/she] reasonably considers necessary
for his/her part of the management of ▇▇▇▇▇▇▇▇ (and ACL in the
event of the Company acquiring all the issued shares in ACL)
unless prevented by ill health or other circumstances beyond its
or his/her control.
3 FEES AND EXPENSES
3.1 The Company shall pay to the Consultant for the proper
performance of its and Mr/Mrs [ ]'s duties under this
Agreement:
(a) a fixed fee at the rate of [US$250,000/F ▇▇▇▇▇▇ -
US$100,000] per annum (or such higher rate as the Company
may from time to time notify in writing to the Consultant)
("the ▇▇▇▇▇▇▇▇ Fixed Fee");
[Green/▇▇▇▇▇]
Provided that in the event that the Company acquires all or any
of the issued share capital of ACL, the Company shall pay to the
Consultant an additional fixed fee of [R Green and M ▇▇▇▇▇ -
US$250,000 and F F ▇▇▇▇▇▇ - US$125,000 per annum] ("the ACL Fixed
Fee") unless the Relevant Profits of ACL exceed US$15,000,000 in
any relevant year in which case, the ACL Fixed Fee shall be
multiplied by two. Provided that
(aa) until the Relevant Profits of ACL for the relevant year
shall have been ascertained in the manner described in Part
BB of the Schedule the ACL Fixed Fee shall be paid at the
rate of [$250,000] [$125,000] per annum;
(bb) within seven working days of the signing off of the
relevant ACL Accounts in the event that Relevant Profits of
ACL exceed $15,000,000 the Company shall pay to the
Consultant the further sum of [$250,000] [$125,000] but in
the event that payment shall not have been made by such
date then the Company shall, in addition, pay to the
Consultant interest at the rate of 5% per annum over
Barclays Bank Plc's Base Rate for the time being (as well
after as before any judgement) for the period commencing on
the due date and ending on the day on which payment is made
in cleared funds.
72
(cc) in the event that the result is a minus figure, it shall be
deemed to be zero and shall accordingly not reduce the
fixed fee; and
(dd) in the event that the adjustment to the fixed fee requires
to be carried out at any time other than the end of any
accounting period, then the adjustment shall be made for
the relevant number of months commencing with the beginning
of the first month of the relevant period and ending on the
last day of such period.
and
(b) a bonus of an amount equal to 12 percent of Relevant
Profits in respect of each financial year of ▇▇▇▇▇▇▇▇ and
ACL (in the event that the Company acquires ACL) subject to
deduction from the Relevant Profits:
(i) in respect of ▇▇▇▇▇▇▇▇ of L4,228,000 for the
accounting period ended 30 June 1999 and L6,000,000
in respect of the accounting period ended 30 June
2000 and for all subsequent accounting periods such
an amount as shall be agreed from time to time
between the Board and the Consultant as the
projected profits of ▇▇▇▇▇▇▇▇; and
(ii) (in the event that the Company acquires ACL) of
ACL, less such amounts as shall be agreed between
the Board and the Consultant from time to time as
the projected profits of ACL for all relevant
accounting periods.
Relevant Profits shall be determined in accordance with and
subject to the terms of the Schedule and payable (if at
all) within 14 days of its determination. [Provided that
the bonus shall not in any financial year exceed US$100,000
- ▇▇▇▇▇▇▇ ▇▇▇▇▇▇].
3.2 The fixed fees of the Consultant will:
(a) accrue from day to day subject to the proviso to clause
3.1(b) and be payable by equal monthly instalments in
arrears by not later than the last working day of each
month;
73
(b) notwithstanding anything to the contrary contained in the
Certificate of Incorporation or Bye Laws of the Company or
of any other Group Company, be inclusive of any other fees
or remuneration of any description (but for the avoidance
of doubt not any dividends) which the Consultant or Mr/Mrs
[ ] may be entitled to receive from the Company or
any Group Company or any other company or association in
which he/she holds office as a nominee or representative of
the Company or any Group Company (and the Consultant or
Mr/Mrs [ ] shall, at the discretion of the Board,
either waive his right to any such remuneration or account
to the Company for the same forthwith upon receipt) of the
fee;
(c) be paid by credit transfer to the account nominated by the
Consultant from time to time; and
(d) be capable of set off by the Company from time to time
against any liability of the Consultant to the Company.
3.3 The Consultant hereby authorises the Company to deduct from any
remuneration accrued and due to it under the terms of this
Agreement (whether or not actually paid during the Appointment)
or from any pay in lieu of notice any overpayment of fee or
expenses or payment made to the Consultant by mistake or through
any misrepresentation.
3.4 The Consultant shall be reimbursed by the Company for all
expenses reasonably and properly incurred by Mr/Mrs [ ] and
the Consultant in the performance of their duties hereunder
subject to the provision of satisfactory vouchers and receipts or
other evidence of actual payment of such expenses (air travel to
be at least Business Class or equivalent).
3.5 [M ▇▇▇▇▇ only]Until termination of the Appointment and subject to
▇▇▇ ▇▇▇▇▇ holding and continuing to hold a full driving licence
the Company shall at its own expense provide or procure that the
Consultant is provided with the use for ▇▇▇ ▇▇▇▇▇ of a motor car
of an appropriate standard, quality and make for the purpose of
enabling ▇▇▇ ▇▇▇▇▇ to discharge the Consultant's duties hereunder
being at least of a cost approximately equivalent to a Range
Rover.
[3.5 for R Green (alternative form)
74
[The Company shall throughout the continuation of this Agreement
pay to Panton Management Limited the sum equivalent to the cost
of the lease purchase agreement relating to a Range Rover
presently used by Mrs M ▇▇▇▇▇ and in addition all running costs
of a car of similar standard including in particular insurance
premiums, maintenance, repairs, fuel and oil.]
4 UNDERTAKINGS
4.1 The Consultant hereby undertakes with the Company to indemnify
the Company and keep the Company at all times fully and
effectively indemnified from and against all and any taxation
(including in particular but without limitation all and any PAYE
or National Insurance Contributions) assessed on the Company by
reason of the Appointment.
4.2 The Consultant hereby warrants and undertakes to the Company that
it is free to enter into this Agreement and to perform all its
obligations and procure the performance of all the obligations of
Mr/Mrs [ ] hereunder.
5 CONFIDENTIALITY AND RESTRICTIONS
5.1 Neither during the continuance of the Appointment, other than in
the proper course of its duties and for the benefit of the
Company, nor after the termination date of the appointment for
any reason whatsoever, shall the Consultant nor Mr/Mrs [ ]:
(a) use, disclose or communicate to any person any Confidential
Information which he/she shall have come to know or have
received or obtained at any time (before or after the date
of this Agreement) by reason of or in connection with its
and his/her service with the Company; or
(b) copy or reproduce in any form or by or on any media or
device save as reasonably necessary or allow others access
to or to copy or reproduce Documents containing or
referring to Confidential Information.
5.2 The Consultant acknowledges that all Documents containing or
referring to Confidential Information at any time in his control
or possession are and shall at all times remain the absolute
75
property of the Company and the Consultant undertakes, both
during the Appointment and after the termination of the
Appointment:-.
(a) to exercise due care and diligence to avoid any
unauthorised publication, disclosure or use of Confidential
Information and any Documents containing or referring to
it;
(b) at the direction of the Board, on or following the
termination of this Agreement to deliver up any
Confidential Information (including all copies of all
Documents whether or not lawfully made or obtained) or to
delete Confidential Information from any re-usable medium;
and
(c) to do such things and sign such documents at the expense of
the Company as shall be reasonably necessary to give effect
to this Clause and/or to provide evidence that it has been
complied with.
5.3 The restrictions in Clause 5.1:
(a) will not restrict the Consultant from disclosing (but only
to the proper recipient) any Confidential Information which
the Consultant is required to disclose by law or any order
of the court or any relevant regulatory body, provided that
the Consultant shall in so far as practicable give prior
written notice to the Company of the requirement and of the
information to be disclosed and insofar as it is
practicable allow the Company an opportunity to comment on
the requirement before making the disclosure; and
(b) will not apply to Confidential Information which is or
which comes into the public domain otherwise than as a
result of an unauthorised disclosure by the Consultant.
5.4 The Consultant agrees that the restrictions set out in this
Clause 5 are without prejudice to any other duties of
confidentiality owed to the Company whether express or implied
and are to survive the termination of the Appointment.
5.5 Save as permitted under Clause 5.6, the Consultant and Mr/Mrs
[ ] shall not during the Appointment carry on or be
concerned, engaged or interested directly or indirectly (whether
as
76
principal, shareholder, partner, employee, officer, agent or
otherwise) in any trade or business which in any way competes
with that of the Company.
5.6 The Consultant and Mr/Mrs [ ] may have an interest in the
Permitted Business.
5.7 The Consultant and Mr/Mrs [ ] shall not during the Appointment
or for a period of 3 years following termination of the
Appointment either on his own behalf or on behalf of any person,
firm or company solicit or endeavour to entice away from the
Company an actual employee, or discourage from being employed by
the Company any person who, to the knowledge of the Consultant,
is an employee or a prospective employee of the Company; or
5.8 The Consultant and Mr/Mrs [ ] shall not, save in respect of
an interest permitted by clause 5.6 or with the prior written
consent of the Board (which shall not be unreasonably withheld),
for a period of 12 months from the termination of the Appointment
("the Period") within the United States of America or anywhere
else the Company does business to a material extent ("Restricted
Area") carry on or be concerned or engaged or interested directly
or indirectly (whether as principal, shareholder, partner,
employee, officer, agent or otherwise) in any part of any trade
or business which competes with any part of any trade or business
carried on by the Company.
5.9 The Consultant and Mr/Mrs [ ] shall not for a period of 12
months from the date of termination of the Appointment either on
its or his/her own behalf or on behalf of any person, firm or
company in relation to the business activities of the Company in
which the Consultant has been engaged or involved, directly or
indirectly:
(a) solicit, approach or offer services to or entice away from
the Company any person, firm or company who was a client or
customer of the Company during the period of this Agreement
and with whom the Consultant has been actively engaged or
involved by virtue of his duties with such customer
hereunder ("the Period"); or
(b) deal with or accept custom from any person, firm or company
who was a client or customer of the Company with whom the
Consultant has been actively engaged or involved by virtue
of his duties hereunder during the Period; or
77
(c) solicit or approach or offer services to or entice away
from the Company any person, firm or company who was a
supplier, agent or distributor of the Company during the
Period with whom the Consultant has been actively engaged
or involved by virtue of his duties hereunder during the
Period; or
(d) deal with or interfere with any person, firm or company who
was a supplier, agent or distributor of the Company during
the Period and in each case with whom the Consultant has
been actively engaged or involved by virtue of his duties
hereunder during the Period;
PROVIDED THAT nothing contained in these paragraphs (a) to (d)
shall prohibit the Consultant from carrying out any activities
which are not in competition with any part of the Business.
5.10 The Consultant shall not, at any time after the Termination of
the Appointment, either on its own behalf or on behalf of any
other person, firm or company directly or indirectly interfere or
seek to interfere with the continuance, or any of the terms, of
the supply of services to the Company.
5.11 The restrictions contained in clauses 5.1 - 5.10 are separate and
distinct and are to be construed separately from every other
restriction contained in this sub-clause. The above restrictions
are considered reasonable by the parties but in the event that
any such restrictions shall be found to be void but would be
valid if some part thereof were deleted or the scope or period
reduced such restrictions shall apply with such modification as
may be necessary to make it valid and effective.
6 TERMINATION OF THE APPOINTMENT
6.1 If Mr/Mrs [ ] shall at any time become ill or be unable
properly to perform his/her duties hereunder by reason of ill
health, accident or other incapacity (thereby preventing the
Consultant from discharging in full its duties hereunder) either
for a period of or for periods aggregating not less than 180 days
in any period of twelve consecutive calendar months, the Company
may by one month's notice in writing to the Consultant forthwith
terminate the Appointment, but no such notice shall be given by
the Company to the Consultant by reference to any period or
periods of incapacity after the expiration of one calendar month
from the end of the period or the last of the periods of
incapacity taken into account for the purpose of such notice.
78
6.2.1 If the Consultant or Mr/Mrs [ ] shall (as the case may
be):
(a) materially fail or neglect to discharge its duties
hereunder or otherwise to observe or perform the provisions
of this Agreement in any material respect (otherwise than
by reason of ill health, accident or other incapacity) and
which failure or neglect is not remedied within a period of
28 days from the receipt of written notice from the Company
to this effect; or
(b) be adjudicated bankrupt; or
(c) be placed in voluntary liquidation otherwise than for the
purpose of reconstruction or amalgamation or if any order
is made for its compulsory liquidation; or
(d) shall have an administrator or receiver or other
encumbrancer appointed over the whole or any part of its
assets or undertaking or otherwise become subject to the
insolvency laws of any jurisdiction in which it carries on
business so that the services to be performed hereunder
cannot be performed to a reasonable standard; or
(d) be guilty of serious misconduct; or
(e) commit any act of fraud or dishonesty (whether or not
connected with the appointment); or
(f) act in any way which may bring the Company or any member of
the Group into disrepute; or
(g) become of unsound mind (as defined in section 112 or
section 145 of the Mental Health Act 1983); or
(h) be convicted of a criminal offence (other than an offence
under the Road Traffic Acts for which a penalty of
imprisonment is not imposed); or
(i) in the event that Mr/Mrs [ ] becomes deceased.
79
the Company may (without prejudice to any other rights or
remedies of the Company in respect thereof) by notice in writing
to the Consultant forthwith terminate the Appointment.
6.3 On termination of the Appointment under clause 6.1 or 6.2 the
Consultant shall be paid any accrued fixed fees to the date of
termination.
6.4 Upon the expiry or termination of the Appointment (howsoever
caused) each of the Consultant and Mr/Mrs [ ] shall
deliver up to the Company any motor car provided hereunder and
all correspondence, notes, customer lists, plans, drawings,
documents, papers, records (including machine-readable records),
credit cards, Confidential Information, Documents or property
belonging to the Company or any other member of the Group which
may have been made by it or him/her or have come into its or
his/her possession and shall not retain any copies, notes,
extracts or records (including machine-readable records) of any
such items.
7 ROLE OF MR/MRS [ ]
The Consultant hereby covenants with the Company to the best of
its ability to procure the performance and observance by Mr/Mrs
[ ] of all his obligations hereunder and to procure that
Mr/Mrs [ ] carries out on behalf of the Consultant all
duties of the Consultant hereunder and hereby acknowledges that
any breach by Mr/Mrs [ ] shall constitute a separate
breach by the Consultant of its obligations hereunder.
8 GENERAL
8.1 This Agreement is personal to the Consultant and Mr/Mrs
[ ], neither of whom shall be entitled to assign any of their
respective rights hereunder or sub-contract or otherwise delegate
any of their respective obligations hereunder to any third party.
8.1 Until such time as all of the consideration has been paid to
Panton Management Limited and Northern Management Limited ("the
Vendors") pursuant to a share sale and purchase agreement of even
date entered into between the Vendors (1), ▇▇▇▇▇▇▇ ▇▇▇▇▇ (2),
▇▇▇▇▇▇ ▇▇▇▇▇ (3) and the Company (4) and for so long as either of
the Consultancy Agreements in favour of Panton Management Limited
and Northern Management Limited shall subsist, the Purchaser
shall procure
80
that no one shall be appointed a Director of ▇▇▇▇▇▇▇▇ (or of ACL
following completion of the purchase of all the issued share
capital of ACL by the Company, in the event that such completion
takes place) without the written consent of Panton Management
Limited, Northern Management Limited, ▇▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇▇.
8.2 This Agreement represents the entire understanding between the
parties in relation to the subject matter and shall take effect
on and from the Commencement Date, as from which date all other
agreements or arrangements between the Company and the Consultant
and/or Mr/Mrs [ ] relating to the services of the
Consultant and/or Mr/Mrs [ ] shall be deemed to have been
cancelled.
8.3 The Consultant and Mr/Mrs [ ] undertake not to disclose or
communicate any terms of the Appointment to any other employee of
any Group Company save insofar as may be necessary (or to any
third party save for the purpose of obtaining professional
advice.
8.4 The expiry or termination of the Appointment (howsoever caused)
shall not prejudice any claim which any party may have against
another in respect of any antecedent breach of any provision
hereof nor shall it prejudice the continuance in force of any
provision hereof which is expressly or by implication intended to
come into or continue in force on or after such expiry or
termination.
8.5 The terms of this Agreement shall not be varied or amended except
in writing signed by the parties.
8.6 Nothing in this Agreement shall constitute or create or be deemed
to constitute or create a partnership or the relationship of
principal and agent or employer and employee between the parties
and neither the Consultant nor Mr/Mrs [ ] shall bind or
otherwise commit the Company to any third party without the prior
consent of the Board.
8.7.1 Any notice or communication under or in connection with this
Agreement shall be in writing and shall be delivered personally
or by post fax or cable to the respective addresses of the
parties given in this Agreement or to such other address as the
intended recipient may have notified to the other party in
writing. Proof of posting or despatch shall be deemed to be
proof of receipt:
81
(a) in the case of a letter posted to a destination within the
country of posting, three business days after posting;
(b) in the case of a letter posted to a destination outside the
country of posting, ten business days (being business days
in both relevant countries) after posting; and
(c) in the case of a fax or cable, on the date of despatch if
sent during business hours on a business day in the country
of the intended recipient and otherwise on the next
business day in the country of the intended recipient.
8.7.1 Each of the Consultant and Mr/Mrs [ ] hereby appoint ▇▇▇
▇▇▇▇▇▇▇ & ▇▇▇▇▇ of ▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇ (marked
for the attention of ▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇) as their
authorised agents for the purpose of accepting service of process
and notices for all purposes in connection with this Agreement).
8.7.2 The Company hereby appoints ▇ ▇ ▇▇▇▇▇▇ & Co of ▇▇▇ ▇▇▇▇▇ ▇▇▇
▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ (marked for the attention of ▇▇▇▇▇▇ ▇▇▇▇▇▇
or ▇▇▇▇▇ ▇▇▇▇▇▇) as its authorised agent for the purpose of
accepting service of process and notices for all purposes in
connection with this Agreement.
8.8 The clause headings in this Agreement are for ease of reference
only and in no way affect the construction hereof.
8.9 This Agreement shall be governed by and construed in accordance
with the laws of England.
8.10 The parties accept the non-exclusive jurisdiction of the
appropriate court of law in England in relation to all matters,
claims and disputes arising out of or in connection with this
Agreement, any of the documents in the agreed form or any
document supplemental thereto.
82
SCHEDULE
THE BONUS PAYABLE TO THE CONSULTANT - CLAUSE 3.1(b)
▇▇ ▇▇▇▇▇▇▇▇:
1 The Company shall within 14 days after the audited accounts of
▇▇▇▇▇▇▇▇ have been approved by the Board of Directors of ▇▇▇▇▇▇▇▇
deliver to the Consultant a statement showing the amount of the
Relevant Profits for the financial year to which such accounts
relate and the amount (if any) of the bonus payable to the
Consultant which (less any sum or sums paid to the Consultant on
account thereof under paragraph (3) of Part AA of this Schedule)
shall become due and payable 14 days thereafter.
The Relevant Profits will be determined by reference to the Net
Profit of ▇▇▇▇▇▇▇▇ as shown by such audited accounts.
In order to arrive at the Relevant Profits the relevant Net
Profit shall be subject to the following adjustments (if not
already taken into account in the Profit and Loss Accounts):
A By adding back
(i) taxation shown by the audited Profit and Loss
Account of ▇▇▇▇▇▇▇▇ or otherwise payable;
(ii) any payments:
(a) not made at arms length;
(b) made to any other company within the Group of
which ▇▇▇▇▇▇▇▇ forms part, including in
particular the Purchaser including any
management fees or other charges paid to any
other such company;
(c) made in connection with anything not in
▇▇▇▇▇▇▇▇'▇ normal course of business;
83
(iii) all payments made to any of the following:-
(a) Panton Management Limited;
(b) Northern Management Limited;
(c) ▇▇▇▇▇▇ ▇▇▇▇▇; and
(d) ▇▇▇▇▇▇▇ ▇▇▇▇▇;
and any expenses payable to them, under Consultancy
Agreements including bonuses payable thereunder;
(iv) any depreciation charged in respect of any items
which would normally fall to be depreciated;
(v) any rents, licence fees or outgoings in respect of
any premises occupied or shared by ▇▇▇▇▇▇▇▇.
B by deducting a reasonable contribution (to be agreed
between the parties) to the general administrative costs of
Symposium insofar as the same are attributable to ▇▇▇▇▇▇▇▇;
C so as to negate any profits or losses on the revaluation of
any assets or any adjustment arising on the translation
into US Dollars of assets and liabilities denominated in
currencies other than US Dollars;
D adding back any extraordinary items as described in
Financial Reporting Standard 3 (FRS3) not deriving from the
ordinary activities of ▇▇▇▇▇▇▇▇;
E so as to exclude profits or losses of a capital nature.
2 In respect of any financial year during which the Appointment is
terminated the Company shall produce a statement showing the
amount of the Relevant Profits for such year in accordance with
paragraph 1 of Part AA of this Schedule and the Consultant shall
be entitled to the whole of the
84
bonus attributable to that financial year notwithstanding that
the Appointment shall have been terminated during that financial
year (unless this Agreement shall be terminated pursuant to any of
the provisions of clause 6.2.1 in which case the Consultant shall
only be entitled to that proportion of the bonus attributable to the
period prior to the termination of the Appointment) (less any sum or
sums paid to the Consultant on account thereof under paragraph 3 of
Part AA of this Schedule).
3 The Board shall during the course of any financial year of
▇▇▇▇▇▇▇▇ make payments to the Consultant on account of the bonus
payable to it at the rate to be agreed between the Consultant and
the Board. If the amount of the bonus payable is less than the
amount(s) received by the Consultant on account thereof during
the financial year in question it shall refund the shortfall to
the Company 14 days after the delivery to it of the statement
referred to in paragraphs 1 or 2 of Part AA of this Schedule (as
the case may be) and the Company shall be entitled to deduct the
amount of the refund from any fixed salary or fee otherwise
payable to the Consultant.
4 In the event of a dispute as to the amount of the Relevant
Profits for any financial year or as to any amount payable or
deductible in relation to the bonus, the matter in dispute shall
be referred to the decision of the auditors for the time being of
▇▇▇▇▇▇▇▇ ("the Auditors"). The certificate of the Auditors as to
such amounts shall be final and binding on the Company and on the
Consultant (or his personal representatives as the case may be)
and in giving the same the Auditors shall be deemed to be acting
as experts and not as arbitrators.
BB ACL:
1 The Company shall within 14 days after the audited accounts of
ACL have been approved by the Board of Directors of ACL deliver
to the Consultant a statement showing the amount of the Relevant
Profits for the financial year to which such accounts relate and
the amount (if any) of the bonus payable to the Consultant which
(less any sum or sums paid to the Consultant on account thereof
under paragraph (3) of Part BB of this Schedule) shall become due
and payable 14 days thereafter.
The Relevant Profits will be determined by reference to the Net
Profit of ACL as shown by such audited accounts.
85
In order to arrive at the Relevant Profits the relevant Net
Profit shall be subject to the following adjustments (if not
already taken into account in the Profit and Loss Accounts):
A By adding back
(i) taxation shown by the audited Profit and Loss
Account of ACL or otherwise payable;
(ii) any payments:
(a) not made at arms length;
(b) made to any other company within the Group of
which ACL forms part, including in particular
the Purchaser including any management fees
or other charges paid to any other such
company;
(c) made in connection with anything not in ACL's
normal course of business;
(iii) all payments made to any of the following:-
(a) Panton Management Limited;
(b) Northern Management Limited;
(c) Mediterranean Telecommunications Limited;
(d) ▇▇▇▇ ▇▇▇▇▇▇ Limited;
(e) ▇▇▇▇▇▇ ▇▇▇▇▇;
(f) ▇▇▇▇▇▇▇ ▇▇▇▇▇;
(g) ▇▇▇▇▇▇▇ ▇▇▇▇▇▇; and
(h) ▇▇▇▇ ▇▇▇▇▇▇
86
and any expenses payable to them, under Consultancy
Agreements including bonuses payable thereunder;
(iv) any depreciation charged in respect of any items
which would normally fall to be depreciated;
(v) any rents, licence fees or outgoings in respect of
any premises occupied or shared by ▇▇▇▇▇▇▇▇.
B by deducting a reasonable contribution (to be agreed between
the parties) to the general administrative costs of
Symposium insofar as the same are attributable to ACL;
C so as to negate any profits or losses on the revaluation of
any assets or any adjustment arising on the translation into
US Dollars of assets and liabilities denominated in
currencies other than US Dollars;
D adding back any extraordinary items as described in
Financial Reporting Standard 3 (FRS3) not deriving from the
ordinary activities of ACL;
E so as to exclude profits or losses of a capital nature.
2 In respect of any financial year during which the Appointment is
terminated the Company shall produce a statement showing the
amount of the Relevant Profits for such year in accordance with
paragraph 1 of Part BB of this Schedule and the Consultant shall
be entitled to the whole of the bonus attributable to that
financial year notwithstanding that the Appointment shall have
been terminated during that financial year (unless this Agreement
is terminated pursuant to any of the provisions of clause 6.2.1
in which case the Consultant shall only be entitled to that
proportion of the bonus attributable to the period prior to the
termination of the Appointment) (less any sum or sums paid to the
Consultant on account thereof under paragraph 3 of Part BB of
this Schedule).
3 The Board shall during the course of any financial year of
▇▇▇▇▇▇▇▇ make payments to the Consultant on account of the bonus
payable to it at the rate to be agreed between the Consultant and
the Board. If the amount of the bonus payable is less than the
amount(s) received by the Consultant on account thereof during
the financial year in question it shall refund the shortfall to
the
87
Company 14 days after the delivery to it of the statement referred
to in paragraphs 1 or 2 of Part BB of this Schedule (as the case may
be) and the Company shall be entitled to deduct the amount of the
refund from any fixed salary or fee otherwise payable to the
Consultant.
4 In the event of a dispute as to the amount of the Relevant
Profits for any financial year or as to any amount payable or
deductible in relation to the bonus, the matter in dispute shall
be referred to the decision of the auditors for the time being of
ACL ("the Auditors"). The certificate of the Auditors as to such
amounts shall be final and binding on the Company and on the
Consultant (or his personal representatives as the case may be)
and in giving the same the Auditors shall be deemed to be acting
as experts and not as arbitrators.
88
ATTESTATIONS
EXECUTED as a DEED by )
SYMPOSIUM TELECOM )
CORPORATION by: )
Director
Director/Secretary
EXECUTED as a DEED by )
[-] )
by: )
Director
Director/Secretary
EXECUTED as a DEED and )
delivered by [-] )
in the presence of: )
Name of Witness:
Address:
Occupation:
89
ANNEXURE A
Indemnification Agreement
90
DATED: FEBRUARY 22, 1999
(1) PANTON MANAGEMENT LIMITED
AND
NORTHERN MANAGEMENT LIMITED
AND
(2) ▇▇▇▇▇▇▇ ▇▇▇▇▇
AND
(3) ▇▇▇▇▇▇ ▇▇▇▇▇
AND
(4) SYMPOSIUM TELECOM CORPORATION
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DEED OF VARIATION
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▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Ref: BJ.SG.26045
Tel: ▇▇▇▇-▇▇▇ ▇▇▇▇
THIS DEED is made the 22nd day of February 1999 BETWEEN (1) PANTON MANAGEMENT
LIMITED (No: 89307B), ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, P O Box N-3944,
Nassau, Bahamas and NORTHERN MANAGEMENT LIMITED (No: 71490B) of Providence House
aforesaid ("the Vendors") (2) ▇▇▇▇▇▇▇ ▇▇▇▇▇ of Apartment 107, Parc Saint Roman,
▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ (3) ▇▇▇▇▇▇ ▇▇▇▇▇ of Apartment 211, Parc
Saint Roman, aforesaid and (4) SYMPOSIUM TELECOM CORPORATION of ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇, ▇▇▇ ("the Purchaser").
RECITALS
A. This Deed is supplemental to an Agreement dated 14th December 1998 and made
between the parties hereto and in the same order in relation to the sale
and purchase of the entire issued share capital of ▇▇▇▇▇▇▇▇
Telecommunications Limited ("the Agreement").
B. The parties desire to vary the Agreement as set out in this Deed.
1. OPERATIVE PROVISIONS
1.1 INTERPRETATION - In this Agreement (including the Recitals and any
Schedules) except where a different interpretation is necessary in the
context, words and expressions not expressly defined shall have the
respective meanings given to them in the Agreement and the Rules of
Interpretation contained in clause 1 of the Agreement shall apply to this
Deed as if the same had been set out herein with references to the
Agreement being references to this Deed.
1.2 "THE PARTIES" - means the Parties to this Agreement.
2. VARIATIONS
The Agreement shall be varied as follows:-
2.1 Schedule 1 - there shall be deleted "two Ordinary Shares jointly held by
the Vendors", and there shall be substituted against the name of each of
the Vendors "one Ordinary Share".
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2.2 Schedule 2 - there shall be deemed to be deleted from Shareholders and
Shareholdings "each held jointly by the Vendors"
Directors - There shall be deemed to be deleted ▇▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇▇▇
▇▇▇▇▇ and substituted ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ of "La Collenette", Sark,
via Guernsey, British Channel Islands, and ▇▇▇▇▇ ▇▇▇▇▇ Elmont of The
Stables, La Fregondee, Sark, aforesaid.
Secretary - There shall be deemed to be deleted the name of ▇▇▇▇▇▇▇ ▇▇▇▇▇
and substituted SCF Secretaries Limited Liability Company ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇. and clause 9.3 of the Agreement
shall be deemed to be amended accordingly.
2.3 Interpretation - the definition of "the Initial Issue Price" shall be
deemed to be deleted.
2.4 Clause 3.2(b) shall be deemed to be deleted and there shall be substituted
for the same the following:
"by the issue and allotment free of any lien, option, charge or other
encumbrance whatsoever and credited as fully paid to the Vendors in the
proportions set opposite their respective names in column 3 of Schedule
1 1,642,857 shares of Purchaser Common Stock ("the Initial Consideration
Shares")
2.5 Clause 3.5.1(ii) shall be deemed to be deleted and there shall be
substituted for the same the following :
"be subject to a maximum aggregate amount of US$3,000,000 in cash and
857,143 shares of Purchaser Common Stock".
2.6 Clause 3.5.2(b) shall be amended by deleting in line 5 "the Initial Issue
Price" and substituting for the same "US$3.50".
2.7 There shall be deemed to be deleted from the Agreement clause 4.2(h).
2.8 There shall be deemed to be added a new clause 9.12 (and clauses 9.12 to
9.17 inclusive shall be deemed to be renumbered) :-
"in the event that either of the Consultancy Agreements to be made between
in the one case:- (1) the Purchaser (2) Northern Management Limited and
(3) ▇▇▇▇▇▇▇ ▇▇▇▇▇ and in the other case between (1) the Purchaser
(2) Panton Management Limited and (3) ▇▇▇▇▇▇ ▇▇▇▇▇ either terminating by
effluxion of
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time or being properly terminated, then the parties shall take all such
steps as shall be in their respective power to revoke any Power of Attorney
in respect of any General Power of Attorney then in force given by the
Company in favour of in the first case, ▇▇▇▇▇▇▇ ▇▇▇▇▇ and in the second
case ▇▇▇▇▇▇ ▇▇▇▇▇".
3.1 The parties hereby undertake with each other to do or procure to be done,
all such further acts and things and execute or procure to be executed all
such further deeds and documents as may be necessary or desirable fully and
effectively to give full effect to the terms of this Agreement.
3.2 The terms of the Agreement shall continue to have full force and effect as
varied or amended by this Agreement and the parties hereby undertake to do
all such acts or things and execute or procure to be executed all such
further deeds and documents as may be necessary or desirable fully and
effectively to give fully effect to the terms of the Agreement as so varied
or amended.
4 This Agreement is governed by and is to be construed in accordance with
English Law.
IN WITNESS whereof this document has been executed as a Deed the day and year
first before written
EXECUTED as a Deed by PANTON )
MANAGEMENT LIMITED )
by: )
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇
----------------
Director
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EXECUTED as a Deed by NORTHERN )
MANAGEMENT LIMITED )
by: )
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
-----------------
Director
EXECUTED as a Deed by )
▇▇▇▇▇▇▇ ▇▇▇▇▇ )
in the presence of : )
Witness Signature ..../s/.......................................................
Name ..............................................................
Address ..............................................................
..............................................................
Occupation ..............................................................
EXECUTED as a Deed by )
▇▇▇▇▇▇ ▇▇▇▇▇ )
in the presence of : )
Witness Signature .../s/........................................................
Name ..............................................................
Address ..............................................................
..............................................................
Occupation ..............................................................
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EXECUTED as a Deed by SYMPOSIUM )
TELECOM CORPORATION )
by: )
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇-▇▇▇▇▇
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Director
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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Director/Secretary
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