CONFORMED COPY
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------------------------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported) May 22, 1997
Unidigital Inc.
---------------
(Exact Name of Registrant as Specified in Charter)
Delaware 0-27664 13-3856672
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(State or Other Jurisdiction (Commission File Number) (IRS Employer
of Incorporation) Identification No.)
20 West 20th Street, New York, New York 10011
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(Address of Principal Executive Offices) (zip code)
(212) 337-0330
----------------------------------------------
(Registrant's telephone number, including
area code)
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(Former Name or Former Address, if Changed Since Last Report)
<PAGE>
Item 2. Acquisition or Disposition of Assets.
On May 22, 1997, Unidigital Inc. (the "Company"), through its wholly-owned
subsidiary, Elements (UK) Limited ("Elements"), consummated the acquisition of
Libra City Corporate Printing Limited, a London-based financial printer (the
"Seller"). The Seller provides printing services to the London financial
community. The Company intends to continue such line of business. The Company,
through Elements, acquired all of the issued and outstanding capital stock of
the Seller and its subsidiaries. The purchase price included cash payments of
(pound)1,823,750 (approximately $2,972,700) and a potential earn-out payment of
up to (pound)500,000 (approximately $815,000) payable by March 31, 1998. In
determining the purchase price, the Company considered, among other factors, (i)
the composition of the Seller's assets, in particular, its cash position and the
strength of the Seller's balance sheet; (ii) the business, operations and
prospects of the Seller; (iii) the financial statements and other relevant
financial and operating data of the Seller; (iv) the historical and projected
financial information prepared by the management of the Seller; and (v) the past
and projected revenues generated from the customers of the Seller.
The Company funded the purchase price from the proceeds of five-year loans
in the aggregate principal amount of $2,600,000 and a line of credit of up to
$400,000 from Lloyds of London. The lenders under the $2,600,000 loans have a
put option after one year. In connection with such loans, the Company granted
five-year warrants to the lenders to purchase up to an aggregate amount of
260,000 shares of the Company's Common Stock at an exercise price of $4.00 per
share. In addition, the Company granted "piggyback" registration rights, subject
to certain limitations, to such lenders. Included among the lenders, were David
Wachsman and Harvey Silverman, directors of the Company. Such directors loaned
an aggregate of $300,000 to the Company and received warrants to purchase an
aggregate of 30,000 shares of the Company's Common Stock.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(a) Financial Information of Business Acquired.
To be filed by amendment. The Company believes that it is impracticable to
provide such financial information as of the date hereof. Such information shall
be filed with the Commission no later than August 5, 1997.
(b) Pro Forma Financial Information (unaudited).
To be filed by amendment. The Company believes that it is impracticable to
provide such financial information as of the date hereof. Such information shall
be filed with the Commission no later than August 5, 1997.
<PAGE>
(c) Exhibits.
Exhibit No. Description of Exhibit
----------- ----------------------
4.1 Form of Promissory Note dated May 21,
1997, together with Schedule of
Holders.
4.2 Form of Warrant dated May 21, 1997,
together with Schedule of Holders.
4.3 Form of Registration Rights Agreement
dated May 21, 1997, together with
Schedule of Holders.
10.1 Share Purchase Agreement by Way of Deed
dated May 22, 1997 by and among
Unidigital Inc., Elements (UK) Limited,
Libra City Corporate Printing Limited,
Francis Allen, Robin Bishop, Kenneth
Dellow, Edward Tylee, Invesco English and
International Trust, and Baronsmead
Investment Trust.
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<PAGE>
SIGNATURES
----------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, hereunto duly authorized.
Unidigital Inc.
By: /s/ William E. Dye
--------------------------------
William E. Dye, President and
Chief Executive Officer
(Principal Executive Officer)
By: /s/ Michael Brown
--------------------------------
Michael Brown, Vice President
and Chief Financial Officer
(Principal Financial and
Accounting Officer)
Date: June 6, 1997
EXHIBIT 4.1
<PAGE>
PROMISSORY NOTE
$_____________ May 21, 1997
FOR VALUE RECEIVED, the undersigned, Unidigital Inc., a Delaware
corporation (the "Obligor"), hereby promises to pay to the order of _________
(the "Holder"), the principal sum of __________ Dollars ($_________) payable
as set forth below. The Obligor also promises to pay to the order of the
Holder interest on the principal amount hereof at a rate per annum equal to
(i) ten percent (10%) for the six-month period commencing on the date hereof;
(ii) eleven percent (11%) for the six-month period commencing on the day
immediately following the six-month anniversary of the date hereof; and (iii)
twelve percent (12%) commencing on the day immediately following the first
anniversary of the date hereof, which interest shall be payable at such time
as the principal is due hereunder. Interest shall be calculated on the basis
of a year of 365 days and for the number of days actually elapsed. Any
amounts of interest and principal not paid when due shall bear interest at
the maximum rate of interest allowed by applicable law. The payments of
principal and interest hereunder shall be made in coin or currency of the
United States of America which at the time of payment shall be legal tender
therein for the payment of public and private debts.
This Note shall be subject to the following additional terms and
conditions:
1. Payments.Principal shall be payable on the earlier of (i) May 22,
2002 or (ii) the date on which the Obligor consummates an
underwritten public offering in an amount sufficient to pay all
amounts due and owing to the Holder under this Note. In the event
that any payment to be made hereunder shall be or become due on a
Saturday, Sunday or any other day which is a legal bank holiday
under the laws of the State of New York, such payment shall be or
become due on the next succeeding business day.
2. Prepayment. The Obligor shall have the right at any time to prepay the
principal hereof in whole or in part, without premium or penalty,
provided that interest on the principal hereof to be so prepaid,
accrued to the date of such prepayment, shall be paid concurrently
therewith.
3. Put Option. At any time after the first anniversary of the date
hereof, the Holder shall have the right and option (but not the
obligation) to require that the Obligor repay the principal hereof in
whole, together with all interest accrued thereon, without premium or
penalty (the "Put Option"). In the event that the Holder exercises the
Put Option, the Obligor shall pay all amounts due and owing to the
Holder under this Note within thirty (30) days of receipt of notice
that the Holder has exercised the Put Option.
4. No Waiver. No failure or delay by the Holder in exercising any right,
power or privilege under this Note shall operate as a waiver thereof
nor shall any single or partial exercise thereof preclude any other or
further exercise thereof or the exercise of any other right, power or
privilege. The rights and remedies herein
<PAGE>
provided shall be cumulative and not exclusive of any rights or
remedies provided by law. No course of dealing between the Obligor and
the Holder shall operate as a waiver of any rights by the Holder.
5. Waiver of Presentment and Notice of Dishonor. The Obligor and all
endorsers, guarantors and other parties that may be liable under this
Note hereby waive presentment, notice of dishonor, protest and all
other demands and notices in connection with the delivery, acceptance,
performance or enforcement of this Note.
6. Place of Payment. All payments of principal of this Note and the
interest due thereon shall be made at ______________________ or at
such other place as the Holder may from time to time designate in
writing.
7. Events of Default. The entire unpaid principal amount of this Note and
the interest due thereon shall, at the option of the Holder exercised
by written notice to the Obligor, forthwith become and be due and
payable, without presentment, demand, protest or other notice of any
kind, all of which are hereby expressly waived, if any one or more of
the following events (herein called "Events of Default") shall have
occurred (for any reason whatsoever and whether such happening shall
be voluntary or involuntary or come about or be effected by operation
of law or pursuant to or in compliance with any judgment, decree or
order of any court or any order, rule or regulation of any
administrative or governmental body) and be continuing at the time of
such notice, that is to say:
a) if default shall be made in the due and punctual payment of the
principal of this Note and the interest due thereon when and as
the same shall become due and payable, whether at maturity, or by
acceleration or otherwise, and such default shall have continued
for a period of five days;
b) if the Obligor shall:
(i) admit in writing its inability to pay its debts generally as
they become due;
(ii) file a petition in bankruptcy or a petition to take
advantage of any insolvency act;
(iii) make an assignment for the benefit of creditors;
(iv) consent to the appointment of a receiver of the whole or any
substantial part of his property;
(v) on a petition in bankruptcy filed against him, be
adjudicated a bankrupt; or
(vi) file a petition or answer seeking reorganization or
arrangement under the Federal bankruptcy laws or
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<PAGE>
any other applicable law or statute of the United States of
America or any State, district or territory thereof;
(c) if a court of competent jurisdiction shall enter an order,
judgment, or decree appointing, without the consent of the
Obligor, a receiver of the whole or any substantial part of
Obligor's property, and such order, judgment or decree shall not
be vacated or set aside or stayed within 90 days from the date of
entry thereof; and
(d) if, under the provisions of any other law for the relief or aid
of debtors, any court of competent jurisdiction shall assume
custody or control of the whole or any substantial part of
Obligor's property and such custody or control shall not be
terminated or stayed within 90 days from the date of assumption
of such custody or control.
8. Remedies. In case any one or more of the Events of Default specified
in Section 7 hereof shall have occurred and be continuing, the Holder
may proceed to protect and enforce its rights either by suit in equity
and/or by action at law, whether for the specific performance of any
covenant or agreement contained in this Note or in aid of the exercise
of any power granted in this Note, or the Holder may proceed to
enforce the payment of all sums due upon this Note or to enforce any
other legal or equitable right of the Holder.
9. Severability. In the event that one or more of the provisions of this
Note shall for any reason be held invalid, illegal or unenforceable in
any respect, such invalidity, illegality or unenforceability shall not
affect any other provision of this Note, but this Note shall be
construed as if such invalid, illegal or unenforceable provision had
never been contained herein.
10. Governing Law. This Note and the rights and obligations of the Obligor
and the Holder shall be governed by and construed in accordance with
the laws of the State of New York.
11. Unsecured Obligations. The Holder hereby acknowledges that the
obligations of the Obligor hereunder are unsecured.
IN WITNESS WHEREOF, the undersigned has caused this Note to be executed and
delivered on the date first written above.
UNIDIGITAL INC.
By:
----------------------
William E. Dye
President
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<PAGE>
SCHEDULE OF HOLDERS
-------------------
Principal Number of
Holder Amount of Note Warrants
------ -------------- --------
Lawrence & Company Inc. $1,000,000 100,000
Trans Euro Investments Ltd. 500,000 50,000
Alcamin Anstalt Vaduz 300,000 30,000
I. Michael Goodman/Agis Associates L.L.C. 200,000 20,000
Henry Harris 200,000 20,000
David Wachsman 150,000 15,000
Harvey Silverman 150,000 15,000
Douglas Schwarzwaelder 100,000 10,000
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TOTAL: $2,600,000 260,000
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EXHIBIT 4.2
<PAGE>
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS AND NEITHER THE
SECURITIES NOR ANY INTEREST THEREIN MAY BE TRANSFERRED, PLEDGED OR OTHERWISE
DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM UNDER
SAID ACT OR SUCH LAWS AND THE RULES AND REGULATIONS THEREUNDER.
WARRANT TO PURCHASE SHARES OF COMMON
STOCK OF UNIDIGITAL INC.
Warrant Certificate Number: W 00 Dated: 5/21/97
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This certifies that ________________ (the "Holder"), for value received is
entitled, subject to the terms set forth below, to purchase from UNIDIGITAL
INC., a Delaware corporation (the "Company"), ____ fully paid and nonassessable
shares of the Company's Common Stock, par value $0.01 per share (the "Stock") at
a price of $4.00 per share (the "Stock Purchase Price") at any time or from time
to time but not earlier than the Commencement Date (as defined below) or later
than 5:00 p.m. (New York Time) on the Expiration Date (as defined below), upon
surrender to the Company at its principal office at 20 West 20th Street, New
York, New York 10011, Attention: President (or at such other location as the
Company may advise Holder in writing) of this Warrant properly endorsed with the
form of Subscription Agreement attached hereto duly completed and signed and,
unless the Conversion Right (as defined below) set forth in Section 1(c) is
exercised, upon payment in cash or cashier's check of the aggregate Stock
Purchase Price for the number of shares for which this Warrant is being
exercised determined in accordance with the provisions hereof. The Stock
Purchase Price and the number of shares purchasable hereunder are subject to
adjustment as provided in Section 3 of this Warrant. This Warrant and all rights
hereunder, to the extent not exercised in the manner set forth herein shall
terminate and become null and void on the Expiration Date (as defined below).
"Commencement Date" shall mean the date of this Warrant. "Expiration Date" shall
mean the fifth anniversary of the Commencement Date.
This Warrant is subject to the following terms and conditions:
1. Exercise; Issuance of Certificates; Payment for Shares; Conversion
Right.
(a) This Warrant is exercisable in the manner set forth above at the
option of Holder at any time or from time to time but not earlier than the
Commencement Date or later than 5:00 p.m. (New York Time) on the Expiration Date
for all or a portion of the shares of Stock which may be purchased hereunder.
The Company agrees that the shares of Stock purchased under this Warrant shall
be and are deemed to be issued to Holder as the record owner of such shares as
of the close of business on the date on which this Warrant shall have been
surrendered and payment made for such shares (unless the Conversion Right is
exercised). Subject to the provisions of Section 2, certificates for the shares
of Stock so purchased shall be delivered to Holder by
<PAGE>
the Company's transfer agent at the Company's expense within a reasonable time
after the rights represented by this Warrant have been exercised. Each
stock certificate so delivered shall be in such denominations of Stock as may be
requested by Holder and shall be registered in the name of Holder or such other
name as shall be designated by Holder, subject to the limitations contained in
Sections 1(b) and 2. If, upon exercise of this Warrant, fewer than all of the
shares of Stock evidenced by this Warrant are purchased prior to the Expiration
Date of this Warrant, one or more new warrants substantially in the form of, and
on the terms in, this Warrant will be issued for the remaining number of shares
of Stock not purchased upon exercise of this Warrant.
(b) No shares of Stock will be issued pursuant to the exercise of this
Warrant unless such issuance and such exercise shall comply with all relevant
provisions of law and the requirements of any stock exchange or automated
quotation system upon which the Stock may then be listed. Assuming such
compliance, for income tax purposes the Stock shall be considered transferred to
the Holder on the date on which this Warrant is exercised with respect to such
Stock.
(c) In lieu of the payment of the Stock Purchase Price, the Holder shall
have the right (but not the obligation), to require the Company to convert this
Warrant, in whole or in part, into shares of Stock (the "Conversion Right") as
provided for in this Section 1(c). Upon exercise of the Conversion Right, the
Company shall deliver to the Holder (without payment by the Holder of any of the
Stock Purchase Price) that number of shares of Stock equal to the quotient
obtained by dividing (x) the value of the Warrant at the time the Conversion
Right is exercised (determined by subtracting the aggregate Stock Purchase Price
in effect immediately prior to the exercise of the Conversion Right from the
aggregate Market Value (as defined in Section 1(e) below), for the shares of
Stock issuable upon exercise of the Warrant immediately prior to the exercise of
the Conversion Right) by (y) the Market Value of one share of Stock immediately
prior to the exercise of the Conversion Right.
(d) The Conversion Right may be exercised by the Holder on any business
day between (i) the Commencement Date and (ii) the Expiration Date by delivering
the Warrant Certificate with a duly executed Subscription Agreement in the form
attached hereto with the conversion section completed to the Company, exercising
the Conversion Right and specifying the total number of shares of Stock the
Holder will purchase pursuant to such conversion.
(e) For the sole purpose of determining the number of shares of the
Stock which shall be delivered to the Holder by the Company pursuant to the
Conversion Right as set forth in Section 1(c) above, Market Value shall mean the
average of the daily high and low price of a share of the Stock as listed on the
Nasdaq National Market (or such other exchange or quotation system on which the
Stock may then be listed) for the ten (10) days of trading immediately preceding
the date of exercise of such Conversion Right.
2. Shares to Be Fully Paid; Reservation of Shares. The Company covenants
and agrees that all shares of Stock which may be issued upon the exercise of
this Warrant (the "Warrant Shares") and all shares of common stock issuable upon
conversion of the Warrant Shares (the
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<PAGE>
"Conversion Shares") will, upon issuance, be duly authorized, validly issued,
fully paid and nonassessable and free from all preemptive rights of any
stockholder and free of all taxes (other than income taxes which may be
applicable to Holder), liens and charges with respect to the issue thereof. The
Company covenants that it will reserve and keep available a sufficient number of
shares of its authorized but unissued Stock for such exercise and sufficient
shares of common stock for such conversion. The Company will take all such
reasonable action as may be necessary to assure that such shares of Stock may be
issued as provided herein without violation of any applicable law or regulation,
or of any requirements of any domestic securities exchange or automated
quotation system upon which the Stock may be listed.
3. Adjustment of Stock Purchase Price and Number of Shares. The Stock
Purchase Price and, in some cases, the number of shares purchasable upon the
exercise of this Warrant shall be subject to adjustment from time to time upon
the occurrence of certain events described in this Section 3.
3.1 Subdivision or Combination of Stock and Stock Dividend. In case the
Company shall at any time subdivide its outstanding shares of Stock into a
greater number of shares or declare a dividend upon its Stock payable solely in
shares of Stock, the Stock Purchase Price in effect immediately prior to such
subdivision or declaration shall be proportionately reduced, and the number of
shares issuable upon exercise of the Warrant shall be proportionately increased.
Conversely, in case the outstanding shares of Stock of the Company shall be
combined into a smaller number of shares, the Stock Purchase Price in effect
immediately prior to such combination shall be proportionately increased, and
the number of shares issuable upon exercise of the Warrant shall be
proportionately reduced.
3.2 Notice of Adjustment. Promptly after adjustment of the Stock
Purchase Price or any increase or decrease in the number of shares purchasable
upon the exercise of this Warrant, the Company shall give written notice
thereof, by first class mail, postage prepaid, addressed to the Holder at the
address of such Holder as shown on the books of the Company. The notice shall be
signed by an authorized officer of the Company and shall state the effective
date of the adjustment and the Stock Purchase Price resulting from such
adjustment and the increase or decrease, if any, in the number of shares
purchasable at such price upon the exercise of this Warrant, setting forth in
reasonable detail the method of calculation and the facts upon which such
calculation is based.
3.3 Other Notices. If at any time:
(a) the Company shall declare any cash dividend upon its Stock;
(b) the Company shall declare any dividend upon its Stock payable in
stock (other than a dividend payable solely in shares of Stock) or make any
special dividend or other distribution to the holders of its Stock;
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<PAGE>
(c) there shall be any consolidation or merger of the Company with
another corporation, or a sale of all or substantially all of the Company's
assets to another corporation; or
(d) there shall be a voluntary or involuntary dissolution, liquidation
or winding-up of the Company;
then, in any one or more of said cases, the Company shall give, by certified or
registered mail, postage prepaid, addressed to the registered holder of this
Warrant at the address of such holder as shown on the books of the Company, (i)
at least 10 days' prior written notice of the date on which the books of the
Company shall close or a record shall be taken for such dividend, distribution
or subscription rights or for determining rights to vote in respect of any such
dissolution, liquidation or winding-up, (ii) at least 10 days' prior written
notice of the date on which the books of the Company shall close or a record
shall be taken for determining rights to vote in respect of any such
reorganization, reclassification, consolidation, merger or sale, and (iii) in
the case of any such reorganization, reclassification, consolidation, merger,
sale, dissolution, liquidation or winding-up, at least 10 days' written notice
of the date when the same shall take place. Any notice given in accordance with
clause (i) above shall also specify, in the case of any such dividend,
distribution or option rights, the date on which the holders of Stock shall be
entitled thereto. Any notice given in accordance with clause (iii) above shall
also specify the date on which the holders of Stock shall be entitled to
exchange their Stock for securities or other property deliverable upon such
reorganization, reclassification, consolidation, merger, sale, dissolution,
liquidation or winding-up, as the case may be. If the Holder of the Warrant does
not exercise this Warrant prior to the occurrence of an event described above,
except as provided in Sections 3.1 and 3.4, the Holder shall not be entitled to
receive the benefits accruing to existing holders of the Stock pursuant to such
event.
3.4 Changes in Stock. In case at any time prior to the Expiration Date,
the Company shall be a party to any transaction (including, without limitation,
a merger, consolidation, sale of all or substantially all of the Company's
assets or recapitalization of the Stock) in which the previously outstanding
Stock shall be changed into or exchanged for different securities of the Company
or common stock or other securities of another corporation or interests in a
noncorporate entity or other property (including cash) or any combination of any
of the foregoing (each such transaction being herein called the "Transaction"
and the date of consummation of the Transaction being herein called the
"Consummation Date"), then, as a condition of the consummation of the
Transaction, lawful and adequate provisions shall be made so that each Holder,
upon the exercise hereof at any time on or after the Consummation Date, shall be
entitled to receive, and this Warrant shall thereafter represent the right to
receive, in lieu of the Stock issuable upon such exercise prior to the
Consummation Date, the highest amount of securities or other property to which
such Holder would actually have been entitled as a stockholder upon the
consummation of the Transaction if such Holder had exercised such Warrant
immediately prior thereto. The provisions of this Section 3.4 shall similarly
apply to successive Transactions.
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<PAGE>
4. Investment Representations.
(a) By receipt of this Warrant, by its execution and by its exercise in
whole or in part, the Holder represents to the Company the following:
(i) the Holder understands that this Warrant and any Stock purchased
upon its exercise are securities, the issuance of which requires compliance with
federal and state securities laws;
(ii) the Holder is aware of the Company's business affairs and
financial condition and has acquired sufficient information about the
Company to reach an informed and knowledgeable decision to acquire such
securities;
(iii) the Holder is acquiring these securities for investment for the
Holder's own account only and not with a view to, or for resale in connection
with, any "distribution" thereof within the meaning of the Securities Act of
1933, as amended (the "Act");
(iv) the Holder acknowledges and understands that the securities
constitute "restricted securities" under the Act and must be held indefinitely
unless they are subsequently registered under the Act or an exemption from such
registration is available. The Holder further acknowledges and understands that
the Company is under no obligation hereunder to register the securities (other
than pursuant to the Registration Rights Agreement (as defined below));
(v) the Holder has such knowledge and experience in financial and
business matters as to be capable of evaluating the merits and risks of the
undersigned's investment in this Warrant;
(vi) the Holder has received all of the information the Holder has
requested from the Company and considers necessary or appropriate for deciding
whether to purchase this Warrant;
(vii) the Holder has the ability to bear the economic risks of his
prospective investment;
(viii) the Holder is able, without materially impairing his financial
condition, to hold this Warrant for an indefinite period of time and to suffer
complete loss on his investment;
(ix) the Holder understands and agrees that (A) he may be unable to
readily liquidate his investment in this Warrant and that the Warrant Shares and
the Conversion Shares must be held indefinitely unless a subsequent disposition
thereof is registered or qualified under the Act and applicable state securities
or Blue Sky laws or is exempt from such registration or qualification, and that
the Company is not required to register the same or to take any action or
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<PAGE>
make such an exemption available except to the extent provided pursuant
to the Registration Rights Agreement and (B) the exemption from registration
under the Act afforded by Rule 144 promulgated by the Securities and Exchange
Commission ("Rule 144") depends upon the satisfaction of various conditions by
the undersigned and the Company and that, if applicable, Rule 144 affords the
basis for sales under certain circumstances in limited amounts, and that if such
exemption is utilized by the undersigned, such conditions must be fully complied
with by the undersigned and the Company, as required by Rule 144; and
(x) the Holder either (A) is familiar with the definition of and the
Holder is an "accredited investor" within the meaning of such term under Rule
501 of Regulation D promulgated under the Act, or (B) is providing
representations and warranties reasonably satisfactory to the Company and its
counsel, to the effect that the sale and issuance of Warrant may be made without
registration under the Act or any applicable state securities and Blue Sky laws.
(b) The Holder agrees, in connection with any underwritten public
offering of the Company's securities, (1) not to sell, make short sale of, loan,
grant any options for the purchase of, or otherwise dispose of any shares of
Stock of the Company held by Holder (other than those shares included in such
registration or any other effective registration) without the prior written
consent of the Company or the underwriters managing such underwritten public
offering of the Company's securities for six months from the effective date of
such registration, and (2) further agrees to execute any agreement reflecting
the obligation of the Holder set forth in (1) above as may be requested by the
underwriters at the time of the public offering.
5. Issue Tax. The issuance of certificates for shares of Stock upon the
exercise of the Warrant shall be made without charge to the holder of the
Warrant for any issue tax in respect thereof; provided, however, that the
Company shall not be required to pay any tax which may be payable in respect of
any transfer involved in the issuance and delivery of any certificate in a name
other than that of the then holder of the Warrant being exercised.
6. No Voting or Dividend Rights; Limitation of Liability. Nothing
contained in this Warrant shall be construed as conferring upon the holder
hereof the right to vote or to consent or to receive notice as a stockholder in
respect of meetings of stockholders for the election of directors of the Company
or any other matters or any rights whatsoever as a stockholder of the Company.
Except for the adjustment to the Stock Purchase Price pursuant to Section 3.1 in
the event of a dividend on the Stock payable in shares of Stock, no dividends or
interest shall be payable or accrued in respect of this Warrant or the interest
represented hereby or the shares purchasable hereunder until, and only to the
extent that, this Warrant shall have been exercised. No provisions hereof, in
the absence of affirmative action by the holder to purchase shares of Stock, and
no mere enumeration herein of the rights or privileges of the holder hereof,
shall give rise to any liability of such holder for the Stock Purchase Price or
as a stockholder of the Company whether such liability is asserted by the
Company or by its creditors.
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<PAGE>
7. Restrictions on Transferability of Securities; Compliance With
Securities Act.
7.1 Restrictions on Transferability. The Warrant Shares and the
Conversion Shares shall not be transferable in the absence of the effectiveness
of a registration statement with respect to such securities under the Act, or an
exemption therefrom. This Warrant may not be transferred in any manner other
than by will or by the laws of descent or distribution and may be exercised
during the lifetime of the Holder only by the Holder. The terms of this Warrant
shall be binding upon the executors, administrators, heirs, successors and
assigns of the Holder.
7.2 Restrictive Legend. In the absence of the effectiveness of
registration under the Act or an exemption therefrom as contemplated by Section
7.1, each certificate representing the Warrant Shares, the Conversion Shares or
any other securities issued in respect of the Warrant Shares or the Conversion
Shares upon any stock split, stock dividend, recapitalization, merger,
consolidation or similar event, shall be stamped or otherwise imprinted with a
legend substantially in the following form (in addition to any legend required
under applicable state securities laws):
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED ("ACT"), OR
ANY STATE SECURITIES LAWS AND NEITHER THE SECURITIES NOR
ANY INTEREST THEREIN MAY BE TRANSFERRED, PLEDGED OR
OTHERWISE DISPOSED OF IN THE ABSENCE OF REGISTRATION OR AN
EXEMPTION THEREFROM UNDER SAID ACT OR SUCH LAWS AND THE
RULES AND REGULATIONS THEREUNDER.
8. Registration Rights. The Warrant Shares and the Conversion Shares are
subject to the rights and obligations set forth in that certain Registration
Rights Agreement by and between the Company and the Holder of even date herewith
(the "Registration Rights Agreement").
9. Modification and Waiver. This Warrant and any provision hereof may be
changed, waived, discharged or terminated only by an instrument in writing
signed by the party against which enforcement of the same is sought.
10. Notices. Any notice, request or other document required or permitted
to be given or delivered to the holder hereof or the Company shall be delivered
or shall be sent by certified or registered mall, postage prepaid, to each such
holder at its address as shown on the books of the Company or to the Company at
the address indicated therefor in the first paragraph of this Warrant.
11. Descriptive Headings and Governing Law. The descriptive headings of
the several sections and paragraphs of this Warrant are inserted for convenience
only and do not constitute a part of this Warrant. This Warrant shall be
construed and enforced in accordance with, and the rights of the parties shall
be governed by, the laws of the State of New York without reference to the
principles of conflicts of laws.
-7-
<PAGE>
12. Lost Warrants or Stock Certificates. The Company represents and
warrants to Holder that upon receipt of evidence reasonably satisfactory to the
Company of the loss, theft, destruction or mutilation of any Warrant or stock
certificate representing the Warrant Shares or the Conversion Shares and in the
case of any such loss, theft, destruction or mutilation, upon receipt of an
indemnity and, if requested, bond reasonably satisfactory to the Company, or in
the case of any such mutilation, upon surrender and cancellation of such Warrant
or stock certificate, the Company at its expense will make and deliver a new
Warrant or stock certificate, of like tenor, in lieu of the lost, stolen,
destroyed or mutilated Warrant or stock certificate.
13. Fractional Shares. No fractional shares shall be issued upon exercise
of this Warrant. The Company shall, in lieu of issuing any fractional share pay
the holder entitled to such fraction a sum in cash equal to the fair market
value of any such fractional interest as it shall appear on the public market,
or if there is no public market for such shares, then as shall be reasonably
determined by the Company.
* * * * * * * * * *
-8-
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Warrant to be executed
by its officer, thereunto duly authorized as of the date first written above.
UNIDIGITAL INC.
By:
----------------------------------
William E. Dye
President and Chief Executive
Officer
-9-
<PAGE>
FORM OF SUBSCRIPTION AGREEMENT
(To be signed and delivered
upon exercise of Warrant)
UNIDIGITAL INC.
20 West 20th Street
New York, New York 10011
Attention: President
The undersigned, the holder of the within Warrant (Warrant Certificate
Number __________), hereby irrevocably elects to exercise the purchase right
represented by such Warrant for, and to purchase thereunder,_______________
shares of Common Stock, par value $0.01 per share (the "Stock"), of UNIDIGITAL
INC. (the "Company") and subject to the following paragraph, herewith makes
payment of ___________________ Dollars ($________) therefor and requests that
the certificates for such shares be issued in the name of, and delivered to,
_____________ whose address is _____________________________________________.
The undersigned does/does not (circle one) request the exercise of the
within Warrant pursuant to the cashless exercise right set forth in Section 1(c)
of the Warrant.
If the exercise of this Warrant is not covered by a registration statement
effective under the Securities Act of 1933, as amended (the "Securities Act"),
the undersigned represents that:
(i) the undersigned is acquiring such Stock for investment for his own
account, not as nominee or agent, and not with a view to the distribution
thereof and the undersigned has not assigned or otherwise arranged for the
selling, granting any participation in, or otherwise distributing the same;
(ii) the undersigned has such knowledge and experience in financial and
business matters as to be capable of evaluating the merits and risks of the
undersigned's investment in the Stock;
(iii) the undersigned has received all of the information the
undersigned has requested from the Company and considers necessary or
appropriate for deciding whether to purchase the shares of Stock;
(iv) the undersigned has the ability to bear the economic risks of his
prospective investment;
<PAGE>
(v) the undersigned is able, without materially impairing his financial
condition, to hold the shares of Stock for an indefinite period of time and to
suffer complete loss on his investment;
(vi) the undersigned understands and agrees that (A) he may be unable to
readily liquidate his investment in the shares of Stock and that the shares
must be held indefinitely unless a subsequent disposition thereof is registered
or qualified under the Securities Act and applicable state securities or Blue
Sky laws or is exempt from such registration or qualification, and that the
Company is not required to register the same or to take any action or make such
an exemption available except to the extent provided in the within Warrant and
(B) the exemption from registration under the Securities Act afforded by Rule
144 promulgated by the Securities and Exchange Commission ("Rule 144") depends
upon the satisfaction of various conditions by the undersigned and the Company
and that, if applicable, Rule 144 affords the basis for sales under certain
circumstances in limited amounts, and that if such exemption is utilized by the
undersigned, such conditions must be fully complied with by the undersigned and
the Company, as required by Rule 144;
(vii) the undersigned either (A) is familiar with the definition of and
the undersigned is an "accredited investor" within the meaning of such term
under Rule 501 of Regulation D promulgated under the Securities Act, or (B) is
providing representations and warranties reasonably satisfactory to the Company
and its counsel, to the effect that the sale and issuance of Stock upon exercise
of such Warrant may be made without registration under the Securities Act or any
applicable state securities and Blue Sky laws; and
(viii) the address set forth below is the true and correct address of
the undersigned's residence.
DATED: _______________
------------------------------------
(Signature must conform in all
respects to name of holder as
specified on the face of the Warrant)
------------------------------------
------------------------------------
(Address)
-2-
<PAGE>
SCHEDULE OF HOLDERS
-------------------
Principal Number of
Holder Amount of Note Warrants
------ -------------- --------
Lawrence & Company Inc. $1,000,000 100,000
Trans Euro Investments Ltd. 500,000 50,000
Alcamin Anstalt Vaduz 300,000 30,000
I. Michael Goodman/Agis Associates L.L.C. 200,000 20,000
Henry Harris 200,000 20,000
David Wachsman 150,000 15,000
Harvey Silverman 150,000 15,000
Douglas Schwarzwaelder 100,000 10,000
---------- -------
TOTAL: $2,600,000 260,000
========== =======
EXHIBIT 4.3
<PAGE>
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made and entered
into as of the 21st day of May 1997 by and between UNIDIGITAL INC., a
Delaware corporation (the "Company"), and ________________________ (the
"Holder").
R E C I T A L S
---------------
A. The Holder and the Company are parties to that certain Promissory
Note of even date herewith (the "Promissory Note") pursuant to which the Holder
has agreed to extend a loan to the Company.
B. In partial consideration of the extension of the loan by the Holder
to the Company pursuant to the Note, the Company has issued to the Holder a
five-year warrant to purchase shares of common stock of the Company, par value
$0.01 per share ("Common Stock") on the terms and conditions set forth in that
certain Warrant between the Company and the Holder of even date herewith (the
"Warrant").
C. The Company desires to grant to the Holder the registration rights
set forth herein with respect to the shares of Common Stock for which may be
issued to the Holder pursuant to the Warrant.
1. REGISTRATION RIGHTS.
1.1 Definitions. For purposes of this Section 1:
(a) Registration. The terms "register," "registered," and
"registration" refer to a registration effected by preparing and filing a
registration statement in compliance with the Securities Act of 1933, as amended
(the "Securities Act"), and the declaration or ordering of effectiveness of such
registration statement.
(b) Registrable Securities. The term "Registrable Securities" means:
any shares of Common Stock of the Company issued or issuable to the Holder
pursuant to the Warrant; provided, however, that with respect to any particular
Registrable Security, such security shall cease to be a Registrable Security
when, as of the date of determination, (i) it has been effectively registered
under the Securities Act of 1933, as amended (the "Securities Act") and disposed
of pursuant thereto, (ii) registration under the Securities Act is no longer
required for the immediate public distribution of such security or (iii) it has
ceased to be outstanding. The term "Registrable Securities" means any and/or all
of the securities falling within the foregoing definition of a "Registrable
Security." In the event of any merger, reorganization, consolidation,
recapitalization or other change in corporate structure affecting the Common
Stock, such
<PAGE>
adjustment shall be made in the definition of "Registrable Security"
as is appropriate in order to prevent any dilution or enlargement of the rights
granted pursuant to the Agreement.
(c) SEC. The term "SEC" or "Commission" means the U.S. Securities and
Exchange Commission.
1.2 Registrations.
(a) Piggyback Registration Rights. The Company shall notify the
Holder in writing at least twenty (20) days prior to filing any registration
statement under the Securities Act for purposes of effecting a public offering
of securities of the Company (including, but not limited to, registration
statements relating to secondary offerings of securities of the Company, but
excluding registration statements relating to a merger, an acquisition or
pursuant to Form S-8 or successor form, collectively the "Excluded
Registrations") and will afford the Holder an opportunity to include in such
registration statement all or any part of the Registrable Securities then held
by the Holder. If the Holder desires to include in any such registration
statement all or any part of the Registrable Securities held by the Holder, it
shall, within twenty (20) days after receipt of the above-described notice from
the Company, so notify the Company in writing, and in such notice shall inform
the Company of the number of Registrable Securities the Holder wishes to include
in such registration statement. If the Holder decides not to include all of its
Registrable Securities in any registration statement thereafter filed by the
Company, the Holder shall nevertheless continue to have the right to include any
Registrable Securities in any subsequent registration statement or registration
statements as may be filed by the Company with respect to offerings of its
securities (other than with respect to Excluded Registrations), all upon the
terms and conditions set forth herein.
(b) Underwriting. If a registration statement under which the Company
gives notice under Section 1.2(a) is for an underwritten offering, then the
Company shall so advise the Holder in writing. In such event, the right of the
Holder to have its Registrable Securities included in a registration pursuant to
this Section 1.2(b) shall be conditioned upon the Holder's participation in such
underwriting and the inclusion of the Holder's Registrable Securities in the
underwriting to the extent provided herein. Notwithstanding any other provision
of this Agreement, if the managing underwriter or underwriters determine(s) in
good faith that marketing factors require a limitation of the number of shares
to be underwritten, then the managing underwriter(s) may exclude shares
(including Registrable Securities) from the registration and the underwriting,
and the number of shares that may be included in the registration and the
underwriting shall be allocated, first, to the Company in full, and second, to
the Holder and to any other security holders of the Company whose securities are
being offered for sale pursuant to such registration statement or whose
securities are required to be included in such registration statement pursuant
to registration rights granted to such security holders by the Company
(collectively, the "Other Holders") pro-rata based on the total number of shares
of Common Stock originally requested to be sold by the Holder and
2
<PAGE>
the Other Holders pursuant to such registration statement. If the
Holder disapproves of the terms of any such underwriting, the Holder may elect
to withdraw therefrom by written notice to the Company and the underwriter,
delivered at least ten (10) business days prior to the effective date of the
registration statement. Any Registrable Securities excluded or withdrawn from
such underwriting shall be excluded and withdrawn from the registration. The
Holder hereby agrees that, in connection with any underwritten offering by the
Company, if requested by the managing underwriter, it will not sell any of its
Registrable Securities pursuant to a registration statement in which it is not
included pursuant to this Section 1.2, for a period of up to six months from the
effective date of any such registration statement, without the prior written
consent of the managing underwriter, if any, of the public offering to which
such registration statement may relate. Further, in connection with any
underwritten public offering of Common Stock by the Company, the Holder shall
enter into an underwriting agreement in customary form with the managing
underwriter or underwriters selected for such underwriting.
(c) Expenses. All expenses incurred in connection with a registration
pursuant to Section 1.2(a) (excluding underwriters' and brokers' discounts and
commissions), including, without limitation all federal and "blue sky"
registration and qualification fees, printers' and accounting fees, fees and
disbursements of counsel for the Company and reasonable fees and disbursements
of counsel for the Holder, shall be borne by the Company. The Holder shall bear
its proportionate share (based on the total number of shares sold in such
registration) of all discounts, commissions or other amounts payable to
underwriters or brokers in connection with such registration.
1.3 Obligations of the Company. Whenever required to effect the
registration of any Registrable Securities under this Agreement, the Company
shall, as expeditiously as reasonably possible:
(a) Prepare and file with the SEC a registration statement with
respect to such Registrable Securities and use its best efforts to cause such
registration statement to become effective, and, upon the request of the Holder,
keep such registration statement effective for up to ninety (90) days.
(b) Prepare and file with the SEC such amendments and supplements to
such registration statement and the prospectus used in connection with such
registration statement as may be necessary to comply with the provisions of the
Securities Act with respect to the disposition of all securities covered by such
registration statement.
(c) Furnish to the Holder such number of copies of a prospectus,
including a preliminary prospectus, in conformity with the requirements of the
Securities Act, and such other documents as the Holder may reasonably request in
order to facilitate the disposition of the Registrable Securities owned by the
Holder that are included in such registration.
3
<PAGE>
(d) Use its best efforts to register and qualify the securities
covered by such registration statement under such other securities or Blue Sky
laws of such jurisdictions as shall be reasonably requested by the Holder,
provided that the Company shall not be required in connection therewith or as a
condition thereto to qualify to do business or to file a general consent to
service of process in any such states or jurisdictions.
(e) In the event of any underwritten public offering, enter into and
perform its obligations under an underwriting agreement, in usual and customary
form, with the managing underwriter(s) of such offering.
(f) Notify the Holder at any time when a prospectus relating to such
registration statement is required to be delivered under the Securities Act of
the happening of any event as a result of which the prospectus included in such
registration statement, as then in effect, includes an untrue statement of a
material fact or omits to state a material fact required to be stated therein or
necessary to make the statements therein not misleading in the light of the
circumstances then existing.
(g) Furnish, at the request of the Holder, on the date that its
Registrable Securities are delivered to the underwriters for sale, if such
securities are being sold through underwriters, or, if such securities are not
being sold through underwriters, on the date that the registration statement
with respect to such securities becomes effective, (i) an opinion, dated as of
such date, of the counsel representing the Company for the purposes of such
registration, in form and substance as is customarily given to underwriters in
an underwritten public offering and reasonably satisfactory to the Holder,
addressed to the underwriters, if any, and to the Holder, and (ii) a "comfort"
letter dated as of such date, from the independent certified public accountants
of the Company, in form and substance as is customarily given by independent
certified public accountants to underwriters in an underwritten public offering
and reasonably satisfactory to the Holder, addressed to the underwriters, if
any, and to the Holder requesting registration of Registrable Securities.
1.4 Furnish Information. It shall be a condition precedent to the
obligations of the Company to take any action pursuant to Section 1.2 that the
Holder shall furnish to the Company such information regarding the Holder, the
Registrable Securities held by it, and the intended method of disposition of
such securities as shall be required to timely effect the registration of its
Registrable Securities.
1.5 Delay of Registration. The Holder shall not have any right to
obtain or seek an injunction restraining or otherwise delaying any such
registration as the result of any controversy that might arise with respect to
the interpretation or implementation of this Section 1.
4
<PAGE>
1.6 Indemnification. In the event any Registrable Securities are
included in a registration statement under Section 1.2:
(a) By the Company. To the extent permitted by law, the Company shall
indemnify and hold harmless the Holder or any underwriter (as defined in the
Securities Act) for the Holder and each person, if any, who controls the Holder
or underwriter within the meaning of the Securities Act or the Securities
Exchange Act of 1934, as amended (the "1934 Act") (collectively, "Indemnitees"),
against any losses, claims, damages, or liabilities (joint or several) to which
they may become subject under the Securities Act, the l934 Act or other federal
or state law, insofar as such losses, claims, damages, or liabilities (or
actions in respect thereof) arise out of or are based upon any of the following
statements, omissions or violations (collectively, a "Violation"):
(i) any untrue statement or alleged untrue statement of a
material fact contained in such registration statement, including
any preliminary prospectus or final prospectus contained therein
or any amendments or supplements thereto;
(ii) the omission or alleged omission to state therein a
material fact required to be stated therein, or necessary to make
the statements therein not misleading, or
(iii) any violation or alleged violation by the Company of
the Securities Act, the 1934 Act, any federal or state securities
law or any rule or regulation promulgated under the Securities
Act, the 1934 Act or any federal or state securities law in
connection with the offering covered by such registration
statement;
and the Company will reimburse each of the Indemnitees for any legal or other
expenses reasonably incurred by them, as incurred, in connection with
investigating or defending any such loss, claim, damage, liability or action;
provided, however, that the indemnity agreement contained in this subsection
1.6(a) shall not apply to amounts paid in settlement of any such loss, claim,
damage, liability or action if such settlement is effected without the consent
of the Company (which consent shall not be unreasonably withheld), nor shall the
Company be liable in any such case for any such loss, claim, damage, liability
or action to the extent that it arises out of or is based upon a Violation which
occurs in reliance upon and in conformity with any information furnished
expressly for use in connection with such registration by any Indemnitee,
including without limitation, any information furnished by the Holder to the
Company pursuant to Section 1.4 hereof.
5
<PAGE>
(b) By the Holder. To the extent permitted by law, the Holder will
indemnify and hold harmless the Company, each of its directors, each of its
officers who have signed the registration statement, and each person, if any,
who controls the Company within the meaning of the Securities Act or the 1934
Act (collectively, "Company Indemnitees"), against any losses, claims, damages
or liabilities (joint or several) to which the Company or any such Company
Indemnitee may become subject under the Securities Act, the 1934 Act or other
federal or state law, but only, insofar as such losses, claims, damages or
liabilities (or actions in respect thereto) arise out of or are based upon any
Violation, in each case to the extent (and only to the extent) that such
Violation occurs in reliance upon and in conformity with written information
furnished by the Holder, and known by the Holder to be furnished, expressly for
use in connection with such registration, including without limitation any
information furnished by the Holder to the Company pursuant to Section 1.4
hereof; and the Holder will reimburse any legal or other expenses reasonably
incurred by the Company or any such Company Indemnitee as incurred in connection
with investigating or defending any such loss, claim, damage, liability or
action; provided, however, that the indemnity agreement contained in this
subsection 1.6(b) shall not apply to amounts paid in settlement of any such
loss, claim, damage, liability or action if such settlement is effected without
the consent of the Holder which consent shall not be unreasonably withheld; and
provided further, that the total amounts payable in indemnity by the Holder
under this Section 1.6(b) in respect of any Violation shall not exceed the net
proceeds received by the Holder in the registered offering out of which such
Violation arises.
(c) Notice. Promptly after receipt by an indemnified party under this
Section 1.6 of notice of the commencement of any action (including any
governmental action), such indemnified party will, if a claim in respect thereof
is to be made against any indemnifying party under this Section 1.6, deliver to
the indemnifying party a written notice of the commencement thereof and the
indemnifying party shall have the right to participate in, and, to the extent
the indemnifying party so desires, jointly with any other indemnifying party
similarly noticed, to assume the defense thereof with counsel mutually
satisfactory to the parties; provided, however, that an indemnified party shall
have the right to retain its own counsel, with the fees and expenses to be paid
by the indemnifying party, if representation of such indemnified party by the
counsel retained by the indemnifying party would be inappropriate due to actual
or potential conflict of interests between such indemnified party and any other
party represented by such counsel in such proceeding. The failure to deliver
written notice to the indemnifying party within a reasonable time of the
commencement of any such action, if prejudicial to its ability to defend such
action, shall relieve such indemnifying party of any liability to the
indemnified party under this Section 1.6, but the omission so to deliver written
notice to the indemnifying party will not relieve it of any liability that it
may have to any indemnified party otherwise than under this Section 1.6.
(d) Defect Eliminated in Final Prospectus. The foregoing indemnity
agreements of the Company and the Holder are subject to the condition that,
insofar as they relate to any Violation made in a preliminary prospectus but
eliminated or remedied in the
6
<PAGE>
amended prospectus on file with the SEC at the time the registration
statement in question becomes effective or the amended prospectus filed with the
SEC pursuant to SEC Rule 424(b) (the "Final Prospectus"), such indemnity
agreement shall not inure to the benefit of any person if a copy of the Final
Prospectus was furnished to the indemnified party and was not furnished to the
person asserting the loss, liability, claim or damage at or prior to the time
such action is required by the Securities Act.
(e) Survival. The obligations of the Company and the Holder under
this Section 1.6 shall survive the completion of any offering of Registrable
Securities in a registration statement, and otherwise.
1.7 Rule 144 Reporting. With a view to making available the benefits
of certain rules and regulations of the Commission which may at any time permit
the sale of the Registrable Securities to the public without registration, the
Company agrees to make and keep public information available, as those terms are
understood and defined in Rule 144 under the Securities Act, and to use its best
efforts to file with the Commission in a timely manner all reports and other
documents required of the Company under the Securities Act and the 1934 Act.
2. ASSIGNMENT AND AMENDMENT.
2.1 Assignment. The registration rights granted to the Holder shall not
be assignable to any subsequent holder of the Registrable Securities.
2.2 Amendment of Rights. Any provision of this Agreement may be
amended and the observance thereof may be waived (either generally or in a
particular instance and either retroactively or prospectively), only with the
written consent of the Company and the Holder.
2.3 Notices. Unless otherwise provided, any notice required or
permitted under this Agreement shall be given in writing and shall be deemed to
have been delivered when delivered personally (including by means of telex,
telecopier or telefax systems), or the day following delivery to a reputable
overnight courier service which guarantees delivery within 24 hours, charges
prepaid (or upon the date mailed, if sent certified mail, postage prepaid,
return receipt requested, and delivery is refused or returned as undeliverable)
to the parties to this Agreement as follows:
(a) If to the Company: Unidigital Inc.
20 West 20th Street
New York, New York 10011
Attn: William E. Dye, President
7
<PAGE>
with a copy to: David J. Sorin, Esquire
Buchanan Ingersoll
500 College Road East
Princeton Forrestal Center
Princeton, NJ 08540
(b) If to the Holder:
---------------------------------
---------------------------------
---------------------------------
---------------------------------
with a copy to:
---------------------------------
---------------------------------
---------------------------------
or at such other address as any party may designate by giving ten (10) days
advance written notice to the other party.
2.4 Entire Agreement. This Agreement constitutes and contains the
entire agreement and understanding of the parties with respect to the subject
matter hereof and supersedes any and all prior negotiations, correspondence,
agreements, understandings, duties or obligations between the parties respecting
the subject matter hereof.
2.5 Governing Law. This Agreement shall be governed by and construed
exclusively in accordance with the internal laws of the State of New York
without regard to any law relating to conflict of laws and choice of law.
2.6 Severability. If one or more provisions of this Agreement are
held to be unenforceable under applicable law, then such provision(s) shall be
excluded from this Agreement and the balance of this Agreement shall be
interpreted as if such provision(s) were so excluded and shall be enforceable in
accordance with its terms.
2.7 Third Parties. Nothing in this Agreement, express or implied, is
intended to confer upon any person, other than the parties hereto and their
successors and assigns, any rights or remedies under or by reason of this
Agreement.
2.8 Captions. The captions to sections of this Agreement have been
inserted for identification and reference purposes only and shall not be used to
construe or interpret this Agreement.
8
<PAGE>
2.9 Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
2.10 Costs And Attorneys' Fees. In the event that any action, suit or
other proceeding is instituted concerning or arising out of this Agreement or
any transaction contemplated hereunder, the prevailing party shall recover all
of such party's costs and attorneys' fees incurred in each such action, suit or
other proceeding, including any and all appeals or petitions therefrom.
* * * * * *
9
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
THE COMPANY: THE HOLDER:
UNIDIGITAL INC. [ ]
By:________________________ By:_________________________
Title:_____________________ Title:______________________
10
<PAGE>
SCHEDULE OF HOLDERS
Principal Number of
Holder Amount of Note Warrants
------ -------------- --------
Lawrence & Company Inc. $1,000,000 100,000
Trans Euro Investments Ltd. 500,000 50,000
Alcamin Anstalt Vaduz 300,000 30,000
I. Michael Goodman/Agis Associates L.L.C. 200,000 20,000
Henry Harris 200,000 20,000
David Wachsman 150,000 15,000
Harvey Silverman 150,000 15,000
Douglas Schwarzwaelder 100,000 10,000
---------- -------
TOTAL: $2,600,000 260,000
========== =======
EXHIBIT 10.1
<PAGE>
DATED 22nd MAY 1997
FRANCIS EDWARD ALLEN
AND OTHERS
- and -
ELEMENTS (UK) LIMITED
- and -
LIBRA CITY CORPORATE PRINTING LIMITED
- and -
UNIDIGITAL INC.
SHARE PURCHASE AGREEMENT
BY WAY OF DEED
relating to the acquisition by
Elements (UK) Limited
of the entire issued share capital
of Libra City Corporate Printing Limited
WILDE SAPTE
LONDON
<PAGE>
TABLE OF CONTENTS
No Clause Page No.
1. INTERPRETATION....................................................2
2. SALE AND PURCHASE................................................10
3. CONDITIONS PRECEDENT.............................................10
4. CONSIDERATION....................................................11
5. COMPLETION.......................................................15
6. DELIVERY TO SOLICITORS...........................................19
7. WARRANTIES.......................................................19
8. WARRANTIES IN RELATION TO SUBSIDIARIES...........................21
9. LIMITATION OF WARRANTORS' LIABILITY..............................21
10. RESTRICTIVE COVENANTS............................................24
11. POWER OF ATTORNEY................................................25
12. GUARANTEE OF PURCHASER'S OBLIGATIONS.............................26
13. WAIVERS..........................................................26
14. POST-COMPLETION OPERATION........................................27
15. COSTS AND WITHHOLDINGS...........................................27
16. ASSIGNMENT.......................................................28
17. ANNOUNCEMENTS....................................................28
18. JURISDICTION.....................................................29
19. NOTICES..........................................................29
20. INVALIDITY.......................................................30
21. FURTHER ASSURANCE................................................30
22. ENTIRE AGREEMENT.................................................30
23. COUNTERPARTS.....................................................31
SCHEDULE 1 - The Vendors..................................................32
SCHEDULE 2 Part 1 - The Company and the Subsidiaries......................33
SCHEDULE 2 Part 2 - The Subsidiaries......................................34
SCHEDULE 3 - Confirmation of no Claims....................................39
SCHEDULE 4 - The Warranties...............................................42
SCHEDULE 5 - The Property.................................................77
<PAGE>
Agreed Form Documents...... Clause reference
Deed of Tax Covenant Clause 5.2.3
Disclosure Letter Clause 5.2.11
Service Agreement(s) Clause 5.2.12
Waiver of pre-emption rights Clause 3.1.1
Board minutes of the Company and Subsidiaries Clause 5.3
Stock Transfer Forms and any Powers of Attorney
required to transfer the Shares Clause 5.2.1
<PAGE>
THIS DEED is made the day of 1997
BETWEEN:
(1) THE SEVERAL PERSONS whose names and addresses are set out in
Schedule 1 (together the "Vendors");
(2) ELEMENTS (UK) LIMITED a company incorporated in England and
Wales with registered number 02888039 and having its
registered office at 48 Margaret Street, London WIN 7D (the
"Purchaser");
(3) LIBRA CITY CORPORATE PRINTING LIMITED a company incorporated
in England and Wales with registered number 2339001 and having
its registered office at Truscott House, 32-32 East Road,
London N1 6AD further information about which is contained in
Schedule 2 (the "Company"); and
(4) UNIDIGITAL INC. is a Delaware corporation having its principal
place of business at 20 West 20th Street, New York, NY 10011,
United State of America (the "Guarantor").
WHEREAS:
(A) The Vendors are together the beneficial owners of the whole of
the issued and allotted share capital in the Company and each
of the Vendors is the beneficial owner of the number of shares
in the Company set against his name in Schedule 1.
(B) The Purchaser is a wholly owned subsidiary of the Guarantor.
(C) The Vendors have now agreed to sell and the Purchaser has
agreed to buy the whole of the issued and allotted share
capital in the Company on the terms and conditions hereinafter
contained.
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NOW IT IS HEREBY AGREED as follows:
1. INTERPRETATION
In this Deed (including the Recitals and Schedules), unless the context
otherwise requires or except as otherwise expressly provided:
1.1 Definitions
"1996 Accounts" means the consolidated audited accounts of the Company and
its Subsidiaries for the period to 31st December 1996;
"1996 Turnover Figure" means the sum shown in the 1996 Accounts as the
turnover as defined therein of the Company and the Subsidiaries during the
period to which the 1996 Accounts relate, generated on sales on an arm's
length basis to third party customers and which, for the avoidance of doubt,
was (pound)3,964,753;
"1997 Turnover Figure" means the sum for all turnover of the Company and its
Subsidiaries, stated on the same basis as the 1996 Turnover Figure, for the
period from 1st January to 31st December 1997 save that such turnover as is
attributable to (a) sales to any company within the Unidigital Group, (b)
sales to any new customers introduced to the Company and/or the Subsidiaries
by any member of the Unidigital Group, or (c) sales attributable to any new
employees of the Company and/or its Subsidiaries (other than a new
international sales executive and new employees replacing existing employees
of the Company and/or its Subsidiaries after Completion) shall be excluded
for the purpose of calculating of the 1997 Turnover Figure;
"1997 Statement" means the statement to be issued by the Accountants
indicating the 1997 Turnover Figure;
"Accounts" means the consolidated audited financial statements of the
Company and the Subsidiaries including without limitation the Balance Sheet,
an audited profit and loss account (including any notes thereto) for the
financial year ended on the Last Accounts Date and all reports. accounts,
consolidated accounts and other documents required by law to be included in
or attached thereto;
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"Accountants" means Ernst & Young, Rolls House. 7 Rolls Buildings, Fetter
Lane, London EC4A 1NH;
"Agreed Form" means in a form approved by the Parties and initialed for
identification by the Vendors' Solicitors and the Purchaser's Solicitors;
"Allen Shares" means the 7,263 ordinary shares in the capital of the Company
held by Mr. Allen;
"Auditors" means Moore Stephens of St. Paul's House, London, EC4P 4BN;
"Balance Sheet" means a consolidated audited balance sheet of the Company
and the Subsidiaries as at the Last Accounts Date (including the notes
thereto);
"Baronsmead" means Baronsmead Investment Trust plc of Princes Court, 7
Princes Street, London EC2R 8AQ;
"Bishop Shares" means the 704 ordinary shares in the capital of the Company
held by Mr. Bishop;
"Business" means the business of the Company as carried on up to the
Completion Date;
"Business Day" means any day (other than a Saturday or a Sunday) which is
not a public or bank holiday in England;
"Claim" means any claim brought by the Purchaser against the Vendors (or any
of them) pursuant to the warranties and indemnities given by the Vendors to
the Purchaser and contained in Clause 7 and Schedule 4 to this Deed, the
Deed of Covenant (Tax) and all other provisions of this Deed and all deeds
and documents entered into pursuant to this Deed and "Claims" shall be
construed accordingly;
"Chase Shares" means the 4,569 ordinary shares in the capital of the Company
held by Chase Nominees on behalf of Invesco;
"Chase Nominees" means Chase Nominees Limited of Woolgate House, Coleman
Street, London EC2P 2HD;
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"Companies Act" means the Companies Act 1985 as amended from time to time;
"Completion" means the completion of the sale and purchase of the Shares in
accordance with Clause 5;
"Completion Accounts" means the Completion Balance Sheet and the unaudited
profit and loss account of the Company for the period ending on 30th April
1997 to be prepared by the existing management of the Company and to be
reviewed by the Auditors and the Accountants in accordance with Clause 4.3;
"Completion Balance Sheet" means the unaudited balance sheet (including the
notes thereto) of the Company ant its Subsidiaries as at 30th April 1997 to
be prepared in accordance with Clause 4 ant, if such balance sheet shall be
adjusted pursuant to the provisions of Clause 4, means such balance sheet as
so adjusted;
"Completion Date" means the date hereof;
"Conditions Precedent" means the conditions set out in Clause 3;
"Deed of Tax Covenant" means a deed of covenant in the Agreed Form to be
executed by the Vendors and delivered on Completion in accordance with
Clause S.2.3;
"Dellow Shares" means the 312 ordinary shares in the capital of the Company
held by Mr. Dellow;
"Disclosure Letter" means the letter of even date herewith in the Agreed
Form expressly referring to Clause 7 and which is delivered to the Purchaser
by or on behalf of the Vendors before the signing of this Deed;
"Group" means a holding company and its subsidiaries as the same are defined
in section 736 of the Companies Act 198S;
"Intellectual Property Rights" means all patents, trade marks and service
marks (whether registered or not), registered design rights, utility models,
applications for any of the foregoing and the right to apply for any of the
foregoing in any part of the world, copyright, design rights, inventions,
confidential information, trade secrets, know-how, production data, business
or trade names and any other
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intellectual property rights or similar rights situated in any country and
the benefit (and burden) of any and all licenses in connection with any of
the foregoing;
"Invesco" means Invesco English and International Trust plc of 11 Devonshire
Square, London EC2M 4YR;
"Investors" means Baronsmead and Invesco;
"Last Accounts Date" means 31st December 1996;
"Lease" means the lease of the Property dated 24th January 1994 between ( 1)
the Haberdashers Company (Governors of Robert Aske's Charity) and (2) Libra
City Corporate Printing Limited;
"Libra Group" means the Group of companies of which the Company is the
holding company;
"MIMDC" means Baronsmead Ventures Nominees Limited (previously MIMDC
Nominees Limited and Invesco Ventures Nominees Limited) of Princes Court, 7
Princes Street, London EC2R 8AQ;
"MIMDC Shares" means the 2,538 ordinary, shares in the capital of the
Company held by MIMDC on behalf of Baronsmead;
"Mr. Allen" means Francis Edward Allen of The Croft High Road, Wilmington,
Kent DA2 7EG;
"Mr. Bishop" means Robin David Bishop of Mallard Cottage, The Street,
Corpusty, Norfolk NR11 6QP;
"Mr. Dellow" means Kenneth Dellow of 55 Saville Road, Chadwell Heath,
Romford, Essex RM6 6DS;
"Mr. Tylee" means Edward David Tylee of 5 Hotham Close, Sutton at Hore,
Dartford, Kent DA4 9ET;
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"Net Asset Value" means the aggregate of the value of the assets of the
Company (after the deduction of the amount of any dividend paid pursuant to
Clause 3.4 of this Agreement including all taxes payable by the Company in
respect thereof) and the Subsidiaries less the aggregate of the value of its
liabilities (whether actual, contingent or deferred) as at 30th April 1997
as calculated in accordance with Clause 4 and as shown in the Completion
Balance Sheet;
"Property" means the property short details of which are set out in Schedule
5;
"Purchaser" means Regent Communications (UK) Limited or its successors in
title and assigns (as the case may be);
"Purchaser's Solicitors" means Wilde Sapte of 1 Fleet Place, London EC4M
7WS;
"Relevant Percentage" means in relation to each Vendor. the following
percentage:
100% x A
---
B
Where:
A is the consideration to be paid to that Vendor as listed in Clause 4.1;
and
B is the total consideration to be paid to the Vendors as listed in Clause
4.1;
"Restricted Period" means, in the case of Mr. Allen the period commencing on
the date hereof and ending two (2) years from the date hereof and in all
other cases the period commencing on the date hereof and ending one (1) year
from the date hereof;
"Review" means the review required to be given by the Auditors and the
Accountants pursuant to Clause 4.3 and. if such review shall be adjusted
pursuant to the provisions of Clause 4 means such review as so adjusted;
"Service Agreements" means the service agreements in the Agreed Form to be
executed by the Company and Mr. Bishop and Mr. Dellow together with the side
letter to the Service Agreement between the Company and Mr. Allen dated 18th
July 1989 in the Agreed Form to be executed by the Company and Mr. Allen,
all of which are to be delivered on Completion in accordance with Clause 5.
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"Shares" means the Allen Shares, the Bishop Shares, the Chase Shares, the
Dellow Shares, the MIMDC Shares and the Tylee Shares;
"Statement" means the statement to be prepared jointly by the Accountants
and the Auditors in accordance with Clause 4.4;
"Subsidiaries" means the companies listed in Part 2 of Schedule 2;
"Tax" includes all present and future taxes, charges, imposts, duties,
levies, deductions, withholdings or fees of any kind whatsoever, or any
amount payable on account of or as security for any of the foregoing,
payable at the instance of or imposed by any statutory, governmental,
international, state, federal, provincial, local or municipal authority,
agency, body or department whatsoever or European Union institution, in each
case whether in the United Kingdom or elsewhere, together with any
penalties, additions, fines. surcharges or interest relating thereto, and
"Taxation" and cognate expressions shall be construed accordingly;
"Taxes Act" means the Income and Corporation Taxes Act 1988;
"TCGA 1992" means the Taxation of Chargeable Gains Act 1992;
"Tylee Shares" means the 234 ordinary shares in the capital of the Company
held by Mr. Tylee;
"Unidigital Group" means the group of companies of which the Guarantor is
the holding company;
"United Kingdom" means England, Wales, Scotland and Northern Ireland as
defined in Schedule 1 to the Interpretation Act 1978 and includes the
territorial sea of the United Kingdom and any area designated by Order in
Council under sub-section 1(7), Continental Shelf Act 1964;
"VAT" means value added tax as provided for in VATA 1994 and legislation (or
purported legislation and whether delegated or otherwise) supplemental
thereto and any tax similar or equivalent to value added tax imposed by any
country other than the United Kingdom and any similar or turnover tax
replacing or introduced in addition to any of the same;
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"VATA 1994" means the Value Added Tax Act 1994;
"Vendors" means the several persons whose names and addresses are set out in
Schedule 1 or their respective personal representatives and estates;
"Vendors' Solicitors" means Brough Skerrett of One Dyers Buildings, London
EC 1 N 2S X;
"Warranties" means the representations, warranties and understandings
referred to in Clause 7.1 and set out in Schedule 4;
"Warrantors" means Mr. Allen, Mr. Bishop, Mr. Dellow and Mr. Tylee.
1.2 Interpretation
1.2.1 any reference to the provisions of any statute or subordinate
legislation or of any rule made by a local authority and having the effect
of law shall be deemed to refer to:
1.2.1.1 the same as in force (including any amendment or re-enactment
or consolidation before or after the date hereof) for the time
being; and
1.2.1.2 the provisions of any earlier statute or subordinate
legislation or of any rule made by a local authority of which
the said reference is itself an amendment or re-enactment or
consolidation;
1.2.2 any reference to a person being "connected with" another person means:
1.2.2.1 any person connected with such other person (and "connected
with" bears the meaning set out in section 839 of the Taxes
Act); and/or
1.2.2.2 any company under the control of such other person (and
"control" bears the meaning set out in section 840 of the
Taxes Act);
1.2.3 words and expressions defined in the Companies Act 1985 and/or the
Companies Act 1989 shall bear the same meanings herein;
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1.2.4 words denoting one gender include all genders, words denoting individuals
or persons include corporations and trusts and vice versa, words denoting
the singular include the plural and vice versa, and words denoting the
whole include a reference to any part thereof;
1.2.5 clause and paragraph headings are inserted for ease of reference only and
shall not affect construction;
1.2.6 references to Recitals, Clauses, Paragraphs and Schedules are to the
recitals, clauses, paragraphs and schedules of and to this Deed;
1.2.7 references to this Deed mean this Deed together with its Recitals and
Schedules and reference to this Deed or any document or agreement includes
references to such document or agreement as amended, novated,
supplemented, varied or replaced from time to time with the agreement of
the Parties;
1.2.8 references to a Party means a party to this Deed and shall include that
person's permitted assigns, transferees or successors in title in
accordance with the teens of this Deed;
1.2.9 the words "including", "include" and "in particular" shall be construed as
being by way of illustration only and shall be construed as limiting the
generality of any foregoing words;
1.2.10 references to any English legal term any action, remedy, method of
judicial proceeding, legal document, legal status, court, official or any
other legal concept shall, in respect of any jurisdiction other than
England, be deemed to include the legal concept which most nearly
approximates in that jurisdiction to the English legal term; and
1.2.11 any reference to an amount in pounds sterling shall include the
equivalent in any other currency or combination of currencies.
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2. SALE AND PURCHASE
2.1 Each of the Vendors shall sell or procure the sale with full title guarantee
with effect from Completion the number of the Shares set out opposite his or
her name in Schedule 1 and the Purchaser relying on the representations,
warranties and undertakings herein contained and the covenants contained in
Clause 10 but subject to Clause 2.2 shall buy the Shares together with all
dividends, distributions and rights declared, paid, created or arising after
the Completion Date or attaching thereto and free from all claims, charges,
liens, encumbrances, options, equities, rights of pre-emption or other third
party rights.
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 Deed.
2.3 The covenants implied herein pursuant to the Law of Property (Miscellaneous
Provisions) Act 1994 ("LP(MP)A") shall apply:
2.3.1 as modified or extended by the express terms of the Warranties;
2.3.2 as if the covenant set out in section 3(1) of LP(MP)A ended after the
word "parties"; and
2.3.3 as if section 6(2) of LP(MP)A did not apply.
3. CONDITIONS PRECEDENT
3.1 Completion of the sale and purchase of the Shares shall be conditional upon
the following conditions having been fulfilled:
3.1.1 the delivery to the Purchaser of the waivers in the Agreed Form by
each of the Vendors (and by any nominee of any of the Vendors) of all
and any rights of pre-emption to which he (or any nominee) may be
entitled under the Articles of Association of the Company, by
agreement, by statute or otherwise in respect of and transfer of
Shares contemplated by this Deed;
3.1.2 the repayment of all sums (if any) owing to the Company by (a) the
Vendors or the directors of the Company or any of them or (b) by any
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person connected with any of the Vendors or director or any company
directly or indirectly controlled by such persons or any of them or
(c) any partnership in which such persons or company is a partner and
whether or not such sums are due for repayment including but not
limited to the repayment of all sums (if any) outstanding in respect
of the director's loan account;
3.1.3 the release of the Company (without payment of compensation) from any
debenture, charge, guarantee, cross-guarantee, indemnity,
counter-indemnity, bond, security, assurance or other contingent
liability of whatsoever nature or other similar obligation which
relates or could be made to relate in whole or in part to debts or
other liabilities or obligations, whether actual or contingent and
whether now or hereinafter incurred, of any other person; and
3.1.4 the release of the Company ( without payment of compensation) from all
agreements and arrangements (other than as required by the Purchaser
and other than those entered into with the Investors in the ordinary
course of business) between the Company on the one hand, and any
Vendor or person connected with any of the Vendors on the other hand.
3.2 Each of the Vendors undertakes to use his reasonable endeavours to ensure
that the Conditions Precedent are fulfilled as soon as reasonably
practicable and, in any event, by Completion.
3.3 The Purchaser shall be entitled in its absolute discretion, by written
notice to the Vendors, to waive any or all of the Conditions Precedent
either in whole or in part.
3.4 The Company shall be entitled to make a pre-completion dividend of an amount
not totalling more than (pound)70,000 provided that such dividend shall only
be paid in accordance with the provisions of the Companies Act and all other
applicable legislation.
4. CONSIDERATION
4.1 Subject to the remaining provisions of this Clause 4 the consideration for
the Shares shall be as follows:
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4.1.1 in respect of the Allen Shares, the payment to Mr. Allen of an amount
equal to the sum of (pound)807,213;
4.1.2 in respect of the Bishop Shares, the payment to Mr. Bishop of an
amount equal to the sum of (pound)85,635;
4.1.3 in respect of the Chase Shares, the payment to lnvesco of an amount
equal to the sum of (pound)555,768;
4.1.4 in respect of the Dellow Shares, the payment to Mr. Dellow of an
amount equal to the sum of (pound)37,951,
4.1.5 in respect of the MIDMC Shares, the payment to Baronsmead of an amount
equal to the sum of (pound)308,719; and
4.1.6 in respect of the Tylee Shares, the payment to Mr. Tylee of an amount
equal to the sum of (pound)28,464.
4.2 The Purchaser shall procure that the Accountants issue to the Purchaser and
the Vendors the 1997 Statement, stating the 1997 Turnover Figure, by 31st
March 1998. Thereafter:
4.2.1 the Vendors shall have the right within one month of receipt of the
1997 Statement to require the Auditors to consider the 1997 Statement
and the Vendors shall notify the Purchaser's Solicitors in writing
within such one month period if they wish to exercise their right
contained in this Clause 4.2.1. The Purchaser shall instruct the
Accountants to make available to the Vendors and the Auditors all
papers, documents and other information necessary to enable the
Auditors properly to consider the 1997 Statement.
4.2.2 If the Auditors and the Accountants shall disagree as to the 1997
Turnover Figure but shall be able to resolve their difference or
dispute concerning the same prior to the appointment of an expert
pursuant to Clause 4.2.3, then in such event the Auditors and the
Accountants shall jointly certify the 1997 Turnover Figures.
4.2.3 If the Auditors and the Accountants shall be unable to agree as to the
1997 Turnover Figure, the Vendors or the Purchaser shall be entitled,
on five (5) Business Days' notice in writing to the other of its
intention to do so, at
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any time after one month following notification by the Vendors to the
Purchaser's Solicitors of its wish to exercise its right contained in
Clause 4.2.1 and before the Auditors and the Accountants shall have
jointly certified the amounts of the 1997 Turnover Figure pursuant to
Clause 4.2.2, to refer the matter to an independent chartered
accountant (who shall act as expert and not as arbitrator) appointed
for the purpose jointly by the Parties or, in the absence of agreement
as to the appointment of such independent chartered accountant within
ten (10) Business Days, on the application by either Party, by the
President for the time being of the Institute of Chartered Accountants
in England and Wales, and who shall be instructed to settle the
differences between the Auditors and the Accountants relating to 1997
Turnover Figure. The costs of such independent chartered accountant
shall be borne by the Vendors and the Purchaser in such proportions as
the said independent chartered accountant shall direct at his sole
discretion.
4.2.4 The said independent chartered accountant shall be requested to
certify the amount of the 1997 Turnover Figure to the Parties, which
certificate shall be final and binding on the Parties for the purposes
of this Clause 4.2.
4.2.5 In addition to the consideration set out in Clause 4.1, if the 1997
Turnover Figure (as finally determined pursuant to Clauses 4.2.1 to
4.2.4 above) is greater than (pound)3,250,000, the Purchaser will pay
to the Vendors a further sum of up to (pound)500,000 as additional
consideration for the Shares in accordance with the following formula:
(pound)500,000 x X - (pound)3,250,000
--------------------
(pound) 650,000
where:
X = the 1997 Turnover Figure
4.2.6 Any payment to be made pursuant to this Clause 4.2 by the Purchaser to
the Vendors shall be made within 10 Business Days of the final
determination of the 1997 Turnover Figure to Clauses 4.2.1 to 4.2.4
above.
4.3 The Vendors shall procure as soon as possible following Completion and in
any event by the date that is three (3) months after the Completion Date the
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preparation by the Company of accounts of the Company as at 30th April 1997
and for the period from the Last Accounts Date to 30th April 1997 and the
review by the Auditors and the Accountants of such accounts which shall be
prepared in accordance with the accounting policies, principles and
practices on which the Accounts and the accounts of the Company and the
Subsidiaries for each of the two immediately preceding financial years of
the Company and the Subsidiaries were prepared (without any reevaluation of
assets). In particular, the Completion Accounts shall include accruals for
any holiday pay, pension or bonus entitlement and any other sums or rights
to which any employee of the Company may be entitled as at 30th April 1997.
For the purposes of preparing such accounts a valuation of the
stock-in-trade held by the Company and the Subsidiaries as at Completion for
use in the operation of its business shall be made at or immediately
following 30th April 1997 by the Parties jointly such valuation to be agreed
by the Parties on the basis that:
4.3.1 the value of each item of stock and each item of work-in-progress
shall be the lower of cost (on a first in, first out valuation) or net
realisable value; and
4.3.2 all redundant, obsolete, used, damaged or unsaleable stock and
irrecoverable work-in-progress costs shall be given no value.
4.4 The Vendors shall procure that, if the Auditors and Accountants agree the
Review and the Net Asset Value. the Auditors and the Accountants shall, as
soon as possible following completion of the preparation of the Completion
Accounts pursuant to Clause 4.3 and in any event by the date that is three
(3) months after the Completion Date, jointly produce a statement
stipulating:
4.4.1 the amount of the Net Asset Value after the deduction of the amount of
any dividend (including all taxes payable by the Company in respect
thereof) paid pursuant to Clause 3.4; and
4.4.2 that the Completion Accounts have been prepared in accordance with
Clause 4.3.
4.5 If the Auditors and the Accountants shall disagree as to the Net Asset Value
but shall be able to resolve their difference or dispute concerning the same
prior to the appointment of an expert pursuant to Clause 4.6, then in such
event the Auditors and the Accountants shall jointly certify, the amounts of
the Net Asset Value.
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4.6 If the Auditors and the Accountants shall be unable to agree as to the Net
Asset Value, the Vendors or the Purchaser shall be entitled, on five (5)
Business Days' notice in writing to the other of its intention to do so, at
any time after the expiry of the three (3) month period referred to in
Clause 4.3 and before the Auditors and the Accountants shall have jointly
reported the amounts of the Net Asset Value pursuant to Clause 4.5, to refer
the matter to an independent chartered accountant (who shall act as expert
and not as arbitrator) appointed for the purpose jointly by the Parties or,
in the absence of agreement as to the appointment of such independent
chartered accountant within ten (10) Business Days, on the application by
either Party, by the President for the time being of the Institute of
Chartered Accountants in England and Wales, and who shall be instructed to
settle the differences between the Auditors and the Accountants relating to
Net Asset Value. The costs of such independent chartered accountant shall be
borne by the Vendors and the Purchaser in such proportions as the said
independent chartered accountant shall direct at his sole discretion.
4.7 The said independent chartered accountant shall be requested to certify the
amount of the Net Asset Value to the Parties, which certificate shall be
final and binding on the Parties for the purposes of this Clause 4.7.
4.8 On the day which falls ten (10) Business Days after the Net Asset Value has
been finally agreed in accordance with the above provisions of Clause 4, if
the Net Asset Value is less than (pound)823,750 the Vendors shall pay to the
Purchaser the amount by which the Net Asset Value is less than
(pound)823,750 which shall be treated as a reduction in the consideration.
4.9 Any payment to be made pursuant to Clause 4.2 by the Purchaser to the
Vendors shall be effected by the payment by the Purchaser to each of the
Vendors of that Vendor's Relevant Percentage of the total sum to be paid.
4.10 Any payment to be made pursuant to Clause 4.8 by the Vendors to the
Purchaser shall be effected by payment to the Purchaser by each of the
Vendors of that Vendor's Relevant Percentage of the total sum to be paid.
5. COMPLETION
5.1 Completion shall take place on the date hereof at the offices of the
Purchaser's Solicitors (or as otherwise agreed between the Parties).
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5.2 At Completion the Vendors shall deliver (where appropriate as agent for the
Company and the Subsidiaries) to the Purchaser:
5.2.1 transfers in Agreed Form in respect of the Shares duly executed by the
registered holders thereof in favour of the Purchaser or its nominees;
5.2.2 certificates for the Shares (or an indemnity, in a form acceptable to
the Purchaser, for any lost certificate in respect thereof) and any
other documents (including any necessary waivers or consents) 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;
5.2.3 the Deed of Tax Covenant duly executed by each of the Warrantors;
5.2.4 the Disclosure Letter duly executed by or on behalf of the Warrantors;
5.2.5 the resignations under seal of all the directors and the secretary of
the Company and the Subsidiaries substantially in the form set out in
Part I of Schedule 3 and confirmation under seal by each of the
Vendors in the form set out in Part 2 of Schedule 3 that they have no
claims against the Company or any of the Subsidiaries;
5.2.6 cheque books in respect of all bank accounts operated by the Company
and the Subsidiaries together with bank balances as at the close of
business on 21st May 1997 relating to such accounts and a
reconciliation of such bank statements to the cash books of the
Company and the Subsidiaries;
5.2.7 the certificate of incorporation, certificate of incorporation on
change of name, common seal, statutory register, minute book, share
certificate book and all other books of the Company (all duly written
up to date save for matters relating to the sale and purchase referred
to herein);
5.2.8 all title deeds and documents relating to the Property which comprises
the Lease and copy Court Order preceding it;
5.2.9 the resignation of the Auditors in the form set out in Part 3 of
Schedule 3 together with a duplicate thereof;
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5.2.10 the Service Agreements duly executed by Messrs. Allen. Bishop and
Dellow;
5.2.11 any power of attorney under which any document required to be
delivered under this Clause 5 has been executed.
5.3 The Vendors shall procure that resolutions of the Board of Directors of the
Company and each of the Subsidiaries arc passed and the Vendors shall
deliver to the Purchaser certified copies of such board resolutions, in the
Agreed Form, at Completion:
5.3.1 authorising the execution of and the performance by the Company and
each of the Subsidiaries of its obligations under each of the
documents to be executed by it;
5.3.2 recording acceptance of the migration from office of all the directors
and the secretary and the auditors of the Company and each of the
Subsidiaries;
5.3.3 revoking all existing authorities in respect of all bank accounts
operate by the Company and each of the Subsidiaries and approving the
opening of such new bank accounts at such banks as the Purchaser shall
nominate and the transfer of such funds to such new accounts from
existing bank accounts of the Company and each of the Subsidiaries as
the Purchaser shall specify;
5.3.4 approving (subject only to proper stamping) the transfers of the
Shares delivered hereunder and any shares in the Subsidiaries;
5.3.5 approving (subject only to proper stamping) the placing on the
register of members of the Company and the Subsidiaries (as the case
may be) of the names of the transferees for registration in accordance
with the share transfer forms referred to above and authorizing the
issue of appropriate share certificates;
5.3.6 recording the appointment of such persons as the directors (within the
maximum number permitted by the articles of association of the
relevant company), secretaries and auditors of the Company and the
Subsidiaries as the Purchaser shall nominate;
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5.3.7 changing the situation of the registered office of the Company and the
Subsidiaries to such place as the Purchaser may direct; and
5.3.8 adopting a new accounting reference date of the Company and the
Subsidiaries.
5.4 Provided that the Vendors comply with all their obligations under Clauses
5.1, 5.2 and 5.3 (subject only to the Purchaser fulfilling its obligations
under this Clause 5.4) the Purchaser shall at Completion:
5.4.1 pay to each of the Vendors the sums set out in Clause 4.1 as
consideration for the Shares held by that Vendor, such payment to be
made either by way of a banker's draft in favour of or by way of
telegraphic transfer to the client account of the Vendor's Solicitors
and provided that such payment shall be subject to the provisions of
Clause 4.8;
5.4.2 deliver to the Vendors duplicates of the Deed of Tax Covenant
executed by the Purchaser and the Company;
5.4.3 deliver to each of Messrs. Allen, Bishop and Dellow a duplicate of
the relevant Service Agreement duly executed by the Company.
5.5 If for any reason the provisions of Clauses 5.1 to 5.3 are not fully
complied with the Purchaser shall be entitled (in addition and without
prejudice to any other right or remedy available to it) to elect:
5.5.1 to rescind this Deed without any liability on the part of the
Purchaser; or
5.5.2 to fix a new date for Completion in which event the provisions of
this Clause 5.5 shall apply, mutatis mutandis, if the Vendors fail or
are unable to perform any such obligations on such other date; or
5.5.3 to proceed to Completion so & 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 Clauses 5.1 and
5.3 by such later date as is specified by the Purchaser.
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6. DELIVERY TO SOLICITORS
The solicitors to any Party are authorized to take delivery on behalf of
such Party of any items hereunder and their receipt shall be a good
discharge therefor to the Party and the solicitors to the Party making
delivery.
7. WARRANTIES
7.1 The Warrantors hereby jointly and severally represent to, warrant to and
undertake with the Purchaser that, save for and to the extent that any
relevant fact, matter, event or circumstance giving rise to a claim under
the relevant Warranty was fairly and accurately disclosed in the Disclosure
Letter in respect thereof. or was done or omitted to be done at the written
request of the Purchaser, each of the Warranties is as at Completion true
and correct and not misleading and so that:
7.1.1 each Warranty shall be, and shall be construed as. a separate
representation, warranty and undertaking by each of the Warrantors to
and with the Purchaser and (save as expressly provided to the
contrary) shall not be limited or restricted by reference to or
inference from the terms of any other Warranty or any other terms of
this Deed the Deed of Tax Covenant and the Disclosure Letter other
than the factual disclosure letter;
7.1.2 each Warranty is a fundamental condition of this Deed on the basis
of, and in reliance upon, which the Purchaser has entered into its
obligations hereunder;
7.1.3 to the extent that any Warranty relates to present or past matters of
fact the Warrants shall be deemed to constitute a representation on
the faith of, and in reliance upon, which the Purchaser has entered
into this Deed;
7.1.4 the rights and remedies of the Purchaser in respect of the Warranties
and the liability of the Warrantors under the Warranties shall not be
confined to breaches discovered before Completion, or in any way
affected, modified or discharged by Completion.
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7.2 Where any statement in the Warranties is qualified by the expression "to the
best of the knowledge, information and belief of the Warrantors" or "so far
as the Warrantors are aware" or any similar expression:
7.2.1 each Warrantor shall be deemed to have knowledge of:
(a) anything of which any of the other Warrantors has knowledge, or
is deemed by Clause 7.2.1 (b) to have knowledge of;
(b) where applicable, anything of which he ought reasonably to have
knowledge given his responsibilities to the Company; and
(c) anything of which he would have had knowledge had he made due and
careful enquiry immediately before giving the Warranties; and
7.2.2 such expression shall be construed as a separate warranty that each
Warrantor shall have made full and proper enquiries as to the
accuracy, completeness and correctness of that statement.
7.3 The Investors hereby severally represent to, warrant to and undertake with
the Purchaser that each of the Warranties contained in paragraphs 2.1 and 3
of Part 1 of Schedule 4 so far as they relate to their own shareholding is
as at Completion true and correct and not misleading and so that:
7.3.1 each such Warranty shall be, and shall be construed as, a separate
representation, warranty and undertaking by each of the Investors to
and with the Purchaser and (save as expressly provided to the
contrary) shall not be limited or restricted by reference to or
inference from the terms of any other Warranty or any other terms of
this Deed the Deed of Tax Covenant and the Disclosure Letter other
than the factual disclosure letter;
7.3.2 each such Warranty is a fundamental condition of this Deed on the
basis of, and in reliance upon, which the Purchaser has entered into
its obligations hereunder;
7.3.3 to the extent that any such Warranty relates to present or past
matters of fact the Warranty shall be deemed to constitute a
representation on the faith of, and in reliance upon, which the
Purchaser has entered into this Deed;
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7.3.4 the rights and remedies of the Purchaser in respect of such
Warranties and the liability of the Investors under the Warranties
shall not be confined to breaches discovered before Completion, or in
any way affected, modified or discharged by Completion.
8. WARRANTIES IN RELATION TO SUBSIDIARIES
In addition to and without prejudice to the Warranties referred to in
Clauses 7.1 and 7.2 and set out in Schedule 4, the Warrantors further
jointly and severally represent to. warrant to and undertake with the
Purchaser in respect of each of the Subsidiaries as if Clauses 7.1 and 7.2
and Schedule 4 had been set out herein in full for each of the Subsidiaries
but with the substitution therein of the name of the relevant Subsidiary in
place of the words "the Company" wherever the same appear.
9. LIMITATION OF WARRANTORS' LIABILITY
9.1 The liability of the Warrantors for breach of or under any of the Warranties
shall be limited as follows:
9.1.1 no claim may be made against the Warrantors in respect of any such
liability unless notice of such claim is served on the Warrantors in
writing specifying in reasonable detail the nature of the claim as
soon as reasonably practicable after the Purchaser becomes aware that
circumstances giving rise to such claim have arisen and in any event
before 31st December 1998 (or with respect to any Warranty relating to
Tax within six years of Completion);
9.1.2 the Warrantors shall not be liable to the extent that the amount of
the claim or claims against them in respect of any such liability
exceeds (or would when aggregated with the amount of all previous
claims against any of the Warrantors in respect of any such
liabilities exceed) the total consideration received by them pursuant
to this Deed for the Shares;
9.1.3 the Warrantors shall not in any event be liable to the Purchaser
unless a claim or claims can be validly made against them exceeding in
aggregate
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the sum of (pound)15,000 but, in the event such sum is exceeded, the
Warrantors shall be liable for the entire amount thereof and not only
for the excess; and
9.1.4 the Purchaser shall promptly reimburse to the relevant Warrantor(s)
an amount equal to any sum paid by such Warrantor(s) in respect of any
such liability which is subsequently recovered by the Purchaser or the
Company (as the case may be) from any third party.
9.2 No liability of the Warrantors in respect of any breach of or claim in
respect of any Warranty or Indemnity shall arise to the extent the subject
matter of the claim is taken into account in computing any payment to be
made to the Warrantors (or any of them) pursuant to Clause 4.2 or any
adjustment in the consideration to be paid for the Shares pursuant to Clause
4.10.
9.3 If the Purchaser is entitled to make a claim against the Warrantors in
respect of a matter by reason of the Warranties. undertakings.
representations and obligations contained in this Deed and a claim may be
made in respect of the same matter under the Deed of Tax Covenant, it is
agreed that to the extent that recovery in respect of that matter may be
obtained under this Deed a claim shall be made only under the terms of this
Deed and not under the Deed of Tax Covenant.
9.4 The Purchaser and the Company shall not be entitled to recover the same sum
or for the same loss more than once in respect of any claim under or breach
of any of the Warranties or Deed of Tax Covenant and shall not otherwise
obtain reimbursement or restitution more than once in respect of any cause
of action giving rise to any breach of the Warranties or claim under the
Deed of Tax Covenant.
9.5 Notwithstanding anything expressed or implied in this Deed to the contrary,
any payment by the Warrantors pursuant to this Deed or the Deed of Tax
Covenant shall be treated for all purposes by the Parties as a reduction in
the consideration payable for the Shares and Clause 4 shall be modified
accordingly.
9.6 Each of the Warrantors shall be jointly and severally liable in the event of
any breach of the warranties. representations, undertakings, indemnities,
covenants, agreements and obligations of the Warrantors under this Deed
provided that the Purchaser may release or compromise the liability of any
of the Warrantors hereunderor grant to any of the
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Warrantors time or other indulgence without affecting the liability of any
other of the Warrantors hereunder.
9.7 As soon as reasonably practicable after becoming aware of a claim or a
matter or circumstance comes to the attention of the Purchaser for which
the Warrantors ma' be liable under the Warranties, the Purchaser shall
notify the Warrantors in writing and provide them with all reasonably
available supporting documentation and evidence relating to such claim and
shall allow the Warrantors to inspect the files and records of the Company
relating to the same and to take copies of relevant documents. Subject to
the Warrantors first providing the Company and the Purchaser with
satisfactory security or indemnity in respect of all costs, losses, damages
or claims which may thereby be incurred, the Purchaser and/or the Company
shall take such action as the Warrantors may reasonably request to avoid,
dispute, resist, compromise, defend or appeal against such claim including
(without prejudice to the generality of the foregoing) instructing
professional advisers nominated by the Warrantors to act in the name of or
on behalf of the Purchaser and/or the Company but in accordance with the
instructions of the Warrantors so that such action shall be delegated
entirely to the Warrantors, save that the Warrantors shall not pay or
settle or appeal any such claim against an ongoing customer of the Company
without the prior written consent of the Purchaser (such consent not to be
unreasonably withheld or delayed), and provided always that if following
intimation of any such claim by the Purchaser, the Warrantors shall fail to
pursue the defense thereof with prompt dispatch, the Purchaser shall be
free to pay or settle same on such terms and conditions as they think fit,
and to recover the amount of such claim and relative expenses from the
Warrantors.
9.8 The Warrantors shall not be liable for any claim which would not have
arisen but for an act or omission or transaction of the Company or the
Purchaser occurring after the Completion Date, otherwise than in the
ordinary course of business.
9.9 The Warrantors shall not be liable for any claim which would not have
arisen but for legislation passed after Completion which is retrospective
in effect.
9.10 The amount of any claim shall take into account any tax benefit accruing to
the Purchaser or the Company or the amount of any relief from or deduction
available to the Purchaser or the Company in respect of Taxation directly
or specifically arising by virtue of the loss and damage in respect of
which the claim is made.
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10. RESTRICTIVE COVENANTS
10.1 Each of the Warrantors save in respect of Clauses 10.1. I to 10.1.3
inclusive which shall relate only to Mr Allen hereby covenants with the
Purchaser and the Company that he will not, either alone or jointly with
others, whether as principal, agent, director, shareholder, independent
contractor, employee or in any other capacity, whether directly or
indirectly through any other person, firm or company and whether for his
own benefit or that of others:
10.1.1 for the Restricted Period within fifty (50) miles of the City of
London be engaged in or carry on or be interested in or concerned
in (except as the holder together with any connected persons of not
more than three (3) per cent. in aggregate of any class of
securities of a company which class is listed or dealt in on a
recognized stock exchange in the United Kingdom or elsewhere) any
business in competition with the Business unless previously agreed
in writing between the relevant Vendor and the Purchaser;
10.1.2 for the Restricted Period solicit for a business similar to or
competing with the Business the custom or business of any person,
firm or company from whom the Company has within two (2) years
before the date received an order for goods or services and who has
for that purpose had contact with any of the Vendors nor attempt to
discourage any such person, firm or company from whom the Company
has within two (2) years before Completion received an order for
services from dealing with the Company;
10.1.3 for the Restricted Period solicit or entice away any officer or
employee of the Company or do any act whereby any such officer or
employee is encouraged to leave the employ of the Company, whether
or not such officer or employee would by reason of leaving the
service of the Company, commit a breach of his contract of
employment;
10.1.4 at any time after the date hereof use the names "Libra City
Corporate Printing", "Libra City Printers", "Libra City Printers
(International)", "Libra City (Annual Reports)", "Cityset",
"Cityset Communications" or "Cityset Print" or any colourable
imitation thereof or any name likely to cause confusion therewith
in the minds of members of the public for the purposes of a
business similar to or competing with the Business whether by using
such name as part of a corporate name or otherwise;
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10.1.5 at any time after the date hereof make use of or disclose any
secret or confidential information relating to the Company or to
the Business which may have been acquired by him in his capacity as
a shareholder, officer or employee of the Company; or
10.1.6 at any time after the date hereof do or say anything harmful to
the reputation of the Business or which leads or may lead any
person, firm or company to cease to do business with the Company on
substantially equivalent terms to those previously offered or not
to engage in business with the Company,
save that nothing contained in this Clause 10.1 shall prevent any of the
Warrantors from performing his duties under any service agreement with the
Company for so long as such service agreement remains in force.
10.2 Each of the Vendors will provide promptly such information within his
knowledge, possession or control as the Purchaser or the Company may
reasonably require in relation to the Business or the activities of any
person, firm or company competing with the Business.
10.3 Each of the covenants contained in Clause 10.1 shall be a separate covenant
by each of the Vendors and shall be enforceable by the Purchaser and by the
Company independently of any right to enforce any other covenant or
obligation howsoever arising.
10.4 Each of the restrictions contained in Clause 10.1 is considered reasonable
by the Parties for the legitimate protection of the Business and goodwill
of the Company, but in the event that any such restriction shall be found
to be void but would be valid if some part thereof was deleted or the
scope, period or area of application were reduced, such restriction shall
apply with the deletion of such words or such reduction of scope, period or
area of application as may be required to limit such restrictions to what
is required for the legitimate protection of such Business and goodwill.
11. POWER OF ATTORNEY
11.1 Each of the Vendors hereby irrevocably and unconditionally appoints the
Purchaser or any director of the Purchaser as the Purchaser shall direct as
his attorney `with full powers of substitution in his name and on his
behalf (and to the
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complete exclusion of any rights he may have in such regard) lawfully to
exercise all voting and other rights and receive all benefits and
entitlements which may now or at any time hereafter attach to the Shares
of which he is the beneficial owner and to transfer and deal with such
Shares and such rights, benefits and entitlements and execute such
documents under hand or under seal and do such acts and things in
connection with the foregoing as the Purchaser shall from time to time
think fit in all respects as if the Purchaser were the absolute legal
and beneficial owner thereof.
11.2 Each of the Vendors hereby undertakes to the Purchaser to ratify everything
that the Purchaser shall lawfully do or purport to do pursuant to this
Clause 11.
12. GUARANTEE OF PURCHASER'S OBLIGATIONS
12.1 The Guarantor hereby guarantees to the Vendors the due performance by the
Purchaser (notwithstanding any legal limitation on or incapacity of or
other circumstances relating to the Purchaser) of the obligations on the
part of the Purchaser in Clause 4.2 of this Deed and if the Purchaser shall
make any default in any such obligation the Guarantor will indemnify the
Vendors against all losses, damages, costs and expenses which may be
incurred by the Vendors by reason of such default.
12.2 The Guarantor hereby acknowledges that it shall not be released by time or
indulgence being given to or any arrangements or alterations of terms being
made with the Purchasers or by any release or dealing by the Purchaser or
by the invalidity of any such undertaking, agreement or other obligation.
12.3 The guarantee and indemnity contained in this Clause 12 shall be a
continuing and irrevocable guarantee and indemnity provided always that the
Guarantor shall only be obliged to pay to the Vendors up to a maximum
aggregate amount of (pound)500,000.
13. WAIVERS
13.1 Each of the Vendors hereby irrevocably waives, for the benefit of the
Purchaser and the Company, all and any rights to which he may be entitled
in respect of any misrepresentation, inaccuracy or omission in or from any
information or advice supplied or given by the Company or by any present or
former officer, employee or adviser of the Company with a
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view to (a) enabling or inducing such Vendor orVendor (as the case may
be) to give the representations, warranties and undertakings set out or
referred to in Clause 7 and Schedule 4 or make any statement set out in
the Disclosure Letter; or (b) upon which such Vendor or Vendor (as the
case may be) may have relied in agreeing to any term of this Deed or
making any statement set out in the Disclosure Letter and each Vendor
and/or Vendor irrevocably undertakes not to make any claim in respect of
any such matter.
13.2 The granting by any Party of any time or indulgence in respect of any
breach of any term of this Deed by the other(s) shall not be deemed a
waiver of such breach. The waiver by any Party of any breach of any term of
this Deed by the other(s) shall not prevent the subsequent enforcement of
that term (save to the extent of the express waiver in question) and shall
not be cleaned a waiver of any subsequent breach.
13.3 Any date or period mentioned in any Clause of this Deed may be extended by
mutual written agreement of the Vendors and the Purchaser, but as regards
any date or period (whether or not extended as aforesaid) time shall be of
the essence in this Deed (unless the Vendors and Purchaser determine
otherwise on agreeing to such extension).
14. POST-COMPLETION OPERATION
The provisions of this Deed shall continue in full force and effect and
be binding on the Parties in accordance with its terms notwithstanding
Completion.
15. COSTS AND WITHHOLDINGS
15.1 Each Party shall bear its own costs of and incidental to the negotiation,
making and fulfilment of this Deed and the transactions contemplated
hereby.
15.2 All sums payable under this Deed shall be paid free and clear of all
deductions or wiithholdings whatsoever save only as may be required by law.
If any such deduction or withholding is required by law the Party making
the payment shall be obliged to pay such sums as will after deduction or
withholding has been made leave the same amount as the receiving Party
would have been entitled to receive in the absence of any such requirement
to make a deduction or withholding. If any sum payable to the Purchaser
under this Deed shall otherwise be subject
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to Tax in the hands of the Purchaser the same obligation to make an
increased payment shall apply n relation to such sums as if it were a
deduction or withholding required by law.
16. ASSIGNMENT
16.1 This Deed shall be binding on and enure to the benefit of the personal
representatives and estates of the Vendors.
16.2 The Purchaser may assign in whole or in part the benefit of any provision
of this Deed to any member of the Purchaser's Group, but otherwise only
with the prior written consent of the Vendors such consent not to be
unreasonably withheld or delayed.
17. ANNOUNCEMENTS
17.1 Subject to Clause 17.2, no announcement shall be made by any Party relating
to the transactions referred to in this Deed and no Party shall disclose to
any third party any information concerning the terms or subject matter
hereof.
17.2 Any Party may make an announcement or disclose information which would
otherwise be required hereunder to be treated as confidential if and to the
extent:
17.2.1 required by the law of any relevant jurisdiction;
17.2.2 required by any securities exchange or regulatory or governmental
body to which such Party is subject or submits, wherever situated,
whether or not the requirement for information has the force of law;
17.2.3 necessary to enable such Party to obtain the full benefit of its
rights under this Deed in accordance with the terms hereof;
17.2.4 disclosed on a confidential basis to the professional advisers,
auditors and bankers of any Party;
17.2.5 the information has come into the public domain through no fault of
that Party; or
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17.2.6 the other Parties have given prior written approval to the
disclosure, such approval not to be unreasonably withheld or delayed,
provided that any such information be disclosed pursuant to Clauses
17.2.1 or 17.2.2 of this Clause shall be disclosed only after
consultation with the other Parties.
18. JURISDICTION
18.1 This Deed shall be governed by and construed in accordance with English
law.
18.2 The Parties agree that the English courts shall have non exclusive
jurisdiction in relation to any dispute arising out of or in respect of
this Deed and that any judgment or order of an English court made in this
respect shall be conclusive and binding on them and may be enforced against
them. Nothing in this Clause 17 limits the rights of the Parties to bring
proceedings in any other court of competent jurisdiction or concurrently in
more than one jurisdiction.
18.3 Each of the Vendors hereby irrevocably appoints the Vendors' Solicitors as
his agent to accept service of notices and legal proceedings in connection
with all matters arising out of this Deed and the transactions hereby
contemplated.
19. NOTICES
19.1 Save as specifically otherwise provided in this Deed any notice, to be
given pursuant to this Deed shall be delivered by hand, sent by prepaid
post sent first class (for inland mail) or airmail (for overseas mail) or
shall be transmitted by facsimile addressed to the Party to be served in
the case of:
19.1.1 a company at its registered office for the time being; and
19.1.2 an individual to the address specified in Schedule 1
or at such other address or number in the United Kingdom as any such
Party may from time to time notify the other Parties in writing as being
their address for service hereunder.
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19.2 Notices delivered by hand shall be deemed served at the time of delivery,
notices sent by post shall be deemed served on the second Business Day (for
inland mail) or the fifth Business Day (for overseas mail) after the date
of posting and any notice sent by facsimile transmission shall be deemed
served on the Business Day following the date of transmission.
20. INVALIDITY
If any provision of this Deed is held to be invalid or unenforceable.
such a provision shall (so far as invalid or unenforceable) be given no
effect and shall be deemed to be excluded from this Deed, but without
invalidating any of the remaining provisions of this Deed. The Parties
shall use all reasonable endeavours to replace the invalid or
unenforceable provision by a valid provision, the effect of which is as
close as possible to the intended effect of the provision so excluded.
21. FURTHER ASSURANCE
21.1 The Vendors shall do or procure to be done all such further acts or things,
and execute or procure the execution of all such other documents as the
Purchaser may from time to time reasonably require, whether on or after
Completion, for the purpose of giving to the Purchaser the full benefit of
all the provisions of this Deed.
21.2 The Vendors shall procure that there is made available to the Purchaser
(subject, prior to Completion, to compliance by the Purchaser with the
terms of any undertaking as to confidentiality which may have been given or
entered into) at such time(s) and place(s) as the Purchaser may reasonably
direct all information in the possession or under the control of the
Vendors which the Purchaser may from time to time reasonably require.
whether before or after Completion, in relation to the business and affairs
of the Company.
22. ENTIRE AGREEMENT
22.1 This Deed and the documents referred to herein together with a letter of
even date herewith from the Guarantor to Mr Allen and headed "CGT
Indemnity" comprise the entire agreement between the Parties relating to
the subject matter hereof and each of the Parties
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acknowledges that he has not entered into this Deed relying upon any
representation. statement or agreement, whether oral or in writing made
by any other of the Parties other than those expressly incorporated or
referred to in this Deed or such documents.
22.2 No variation or amendment of this Deed shall be valid unless it is
evidenced in writing, and signed by or on behalf of each of the Parties.
23. COUNTERPARTS
This Deed may be executed in any number of counterparts each of which
when executed shall constitute an original, but all the counterparts
shall together constitute one and the same Deed.
AS WITNESS this Deed has been entered into on the date first stated
above.
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