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
June 18, 1999
Date of Report (Date of earliest event reported)
Macrovision Corporation
(Exact name of Registrant as specified in its charter)
Delaware 000-22023 77-0156161
(State of incorporation) (Commission file number) (I.R.S. Employer
Identification No.)
1341 Orleans Drive
Sunnyvale, California 94089
(Address of principal executive offices, including zip code)
(408) 743-8600
(Registrant's telephone number, including area code)
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ITEM 2: ACQUISITION OR DISPOSITION OF ASSETS
On June 18, 1999, Macrovision Corporation ("Macrovision"), acquired all of
the outstanding stock of C-Dilla, a privately held corporation headquartered in
the United Kingdom ("C-Dilla"), pursuant to an Agreement for Sale of Shares
dated as of June 18, 1999 among Macrovision and certain shareholders and
employees of C-Dilla (the "C-Dilla Shareholders"). Immediately prior to
Macrovision's acquisition of the outstanding stock of C-Dilla, Macrovision owned
approximately 19.8% of the outstanding stock of C-Dilla.
Macrovision purchased C-Dilla's outstanding stock directly from the C-Dilla
Shareholders in exchange for: (i) Macrovision's payment to the C-Dilla
Shareholders, as a group, a total of $12,327,245 in cash; and (ii) Macrovision's
issuance to certain C-Dilla Shareholders of a total of 109,199 shares of
Macrovision Common Stock. Macrovision used funds from its existing cash balances
to pay the cash portion of the purchase price.
C-Dilla was founded in 1991 and is engaged in the business of providing
copy protection and rights management technologies for CD-ROM and
Internet-delivered software products. Under a Software Marketing and License
Development Agreement that has been in place since February 1998, C-Dilla and
Macrovision have developed SafeDisc, a proprietary CD-ROM copy protection
technology, that is comprised of an authenticating digital signature on the
CD-ROM, encryption of the software content and authentication instructions that
preclude decryption unless the authentication digital signature is found.
C-Dilla will continue to do business as a wholly owned subsidiary of
Macrovision.
ITEM 7: FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements of Business Acquired.
It is impracticable for Macrovision to currently provide the required
financial statements for C-Dilla Limited called for by this Item 7(a). Pursuant
to paragraph (a)(4) of Item 7 of Form 8-K, the financial statements of C-Dilla
Limited required to be filed under paragraph (a) of this Item 7 will be filed as
soon as practicable, but not later than required by Item 7 of Form 8-K.
(b) Pro Forma Financial Information.
It is impracticable for Macrovision to currently provide the pro forma
financial information with respect to the acquisition of C-Dilla Limited by
Macrovision called for by this Item 7(b). Pursuant to paragraphs (b)(2) and
(a)(4) of Item 7 of Form 8-K, the pro forma financial statements required to be
filed under paragraph (b) of this Item 7 will be filed as soon as practicable,
but not later than required by paragraphs (b)(2) and (a)(4) of Item 7 of Form
8-K.
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(c) Exhibits
The following exhibit is filed herewith:
2.01 Agreement For Sale of Shares relating to C-Dilla Limited dated as of
June 18, 1999 by and among Registrant and the shareholders of C-Dilla
Limited. Pursuant to Item 601(b)(2) of Regulation of S-K, certain
schedules have been omitted but will be furnished supplementally to
the Commission upon request. **
** Confidential treatment has been requested with respect to certain portions
of this exhibit. Such portions have been omitted from this filing and have
been filed separately with the Securities and Exchange Commission.
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 thereunto duly authorized.
MACROVISION CORPORATION
By: /s/ Victor A. Viegas
-----------------------------
Date: July 2, 1999 Victor A. Viegas
Senior Vice President and
Chief Financial Officer
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Exhibit Index
Number Description
------ -----------
2.1 Agreement For Sale of Shares relating to C-Dilla Limited dated as of
June 18, 1999 by and among Registrant and the shareholders of C-Dilla
Limited. Pursuant to Item 601(b)(2) of Regulation of S-K, certain
schedules have been omitted but will be furnished supplementally to
the Commission upon request.**
** Confidential treatment has been requested with respect to certain
portions of this exhibit. Such portions have been omitted from this
filing and have been filed separately with the Securities and Exchange
Commission.
EXHIBIT 2.01
[*] = CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
DATED 18th June 1999
(1) PETER ALFRED NEWMAN
DR KEITH GEORGE WARREN
IPR INDUSTRIES LIMITED
COINSHIRE LIMITED
QUESTER VCT PLC
ABINGWORTH VENTURES LIMITED PARTNERSHIP
ABINGWORTH VENTURES LIMITED PARTNERSHIP "B"
ALTA-BERKELEY 111 C.V.
(2) COLIN NUNN
TOBY GAWIN
and
(3) MACROVISION CORPORATION
AGREEMENT FOR SALE OF SHARES
relating to
C-DILLA LIMITED
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THIS AGREEMENT is made the 1999
BETWEEN:-
(1) the persons whose names and addresses are set out in Column 1 of Schedule 1
Part 1 ("the Vendors");
(2) the persons whose names and addresses are set out in Schedule 1 Part 3 (the
"Warrantors"); and
(3) MACROVISION CORPORATION a Delaware Corporation whose registered office is
at 1341 Orleans Drive Sunnyvale California 94089 ("the Purchaser")
WHEREAS:-
(1) C-DILLA LIMITED ("the Company") (further details of which are set out in
Schedule 2) was incorporated on the 31st day of January 1992 under the
Companies Act 1985 with company number 2683202 and at the date hereof has
an authorised share capital and issued share capital as set out in Schedule
2.
(2) The Vendors are the legal and beneficial owners of the number and class of
shares (issued as fully paid or credited as fully paid) shown against their
respective names in Column 2 of Schedule 1 (constituting all of the
Company's issued share capital not already owned by the Purchaser) and
which said shares are hereinafter called "the Sale Shares".
(3) The Company is a private company.
(4) The Vendors have agreed to sell (each according to his aforesaid interest)
and the Purchaser has agreed to purchase all the Sale Shares upon the terms
and subject to the conditions hereinafter contained.
NOW IT IS HEREBY AGREED as follows:-
1. Definitions and Interpretation
IN this Agreement and in its Schedules the expressions defined below shall
(except where the context otherwise requires) have the following meanings:-
"the Accounts" the audited financial statements of the Company
comprising a balance sheet profit and loss account
notes and directors report as at and for the
period ended on the Balance Sheet Date
"Balance Sheet Date" 31st December 1998
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"Business" the design, development, production and marketing
of secure software products designed to prevent
the unauthorised use of digital media
"Business Day" a day on which the clearing banks in the City of
London are open for business
"the Cancellation
Agreements" the cancellation agreements in the Agreed Form to
be entered into by the Optionholders prior to the
Completion Date
"the Companies Act" the Companies Act 1985
"Completion" Completion in accordance with the provisions of
Clause 4
"Completion Date" the 18th June 1999
"Cash Consideration" the aggregate cash amount to be paid by the
Purchaser to the Vendors in part consideration for
the acquisition of the Sale Shares as set out
opposite their names in Clause 3
"Consideration" the Cash Consideration and the Consideration
Shares
"Consideration Shares" 109,199 shares of common stock, US$0.001 par
value, in the capital of the Purchaser to be
issued by the Purchaser to certain of the Vendors
as indicated in Clause 3 in part consideration for
the acquisition of such Vendors' Sale Shares as
set out in clause 3
"Covenantor" the persons named as such in Clause 6
"the Directors" those referred to as such in Schedule 2
"the Disclosure Letter" a letter of even date herewith from the Warrantors
to the Purchaser together with the documents
annexed to such letter
"Employees" all the employees of the Company at the Completion
Date particulars of which are set out in the
Disclosure Letter
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"Encumbrances" all and any lien, charge, encumbrance, mortgage,
pledge, security interest or other adverse
interest, right, equity or claim of any
description
"FRS" a financial reporting standard issued or adopted
by The Accounting Standards Board Limited
"Intellectual Property
Rights" any or all of the following (whether written or
unwritten) and all rights in, arising out of, or
associated therewith anywhere in the world: (i)
all United Kingdom, international and foreign
patents and applications therefor and all
reissues, continuations, divisionals, renewals and
extensions thereof; (ii) all inventions (whether
patentable or not), invention disclosures,
discoveries, secret processes, improvements, trade
secrets, proprietary information, know how,
technology, technical data and customer lists, and
all documentation relating to any of the
foregoing; (iii) all copyrights, copyright
registrations and applications therefor and all
mask works, mask work registrations and
applications therefor; (iv) all industrial designs
and registrations and applications therefor
throughout the world; (v) all trade names, logos,
trademarks and service marks; trademark and
service mark registrations and applications
therefor and all goodwill associated therewith
throughout the world; (vi) all databases and data
collections and all rights therein throughout the
world; and (vii) all computer software including
all source code, object code, firmware,
development tools, files, records and data,
specifications, all media on which any of the
foregoing is recorded, (viii) any similar,
corresponding or equivalent rights to any of the
foregoing and (ix) all manuals, instructions,
catalogues and other documentation related to any
of the foregoing
"Group" the Purchaser and each and any of its subsidiaries
from time to time
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"the Key Employees" [*]
"Management Accounts" the monthly management accounts of the Company for
the period from 1st January 1999 to 30th April
1999
"the Management
Accounts Date" 30th April 1999
"the Optionholders" the persons whose names and addresses are set out
in column 1 of Schedule 1 Part 2
"Outstanding Options" the outstanding options over or affecting unissued
shares in the capital of the Company held by the
Optionholders and set out in Schedule 1 Part 2
"the Properties" the properties short particulars whereof are set
out in Schedule 4 and includes any part or parts
thereof
"the Purchaser's
Solicitors" Messrs. Pitmans of 47 Castle Street Reading
Berkshire RG1 7SR (Ref. JCH)
"the Sale Shares" the shares of the Company specified in Column 2 of
Schedule 1
"SSAP" a statement of standard accounting practice
adopted by The Accounting Standards Board Limited
"Taxation" all forms of taxation, duties, imposts,
contributions, withholdings, charges, sums and
levies (including social security contributions)
whatsoever wherever and whenever imposed by a
Taxation Authority and whether or not primarily
payable by the Company or any other person and all
amounts recoverable by a Taxation Authority as if
they were Taxation and shall be deemed to include
the cost of removing any charge over assets
imposed by any Taxation Authority and in each case
including all charges, interest, fines penalties
and surcharges incidental or relating to the same
and "Tax" shall be construed accordingly
- ----------
[*] = CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
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"Taxation Authority" the Inland Revenue, HM Customs and Excise or any
other governmental, state, federal or other
fiscal, revenue customs or excise authority,
department, agency, body or office whether in the
United Kingdom or elsewhere in the world having
authority or jurisdiction in relation to the
Company for any Taxation purposes
"TA" the Income and Corporation Taxes Act 1988
"TCGA" the Taxation of Chargeable Gains Act 1992
"VATA" the Value Added Tax Act 1994
"the Vendors'
Solicitors" Messrs. SJ Berwin of 222 Grays Inn Road London
WC1X 8HB
"the Warranties" the warranties given by the Warrantors to the
Purchaser construed in accordance with Clause 5
1.2 References to statutory provisions shall be construed as references to
those provisions as respectively re-enacted from time to time (whether
before or after the date hereof) and shall include any provisions of
which they are re-enactments. Terms defined in Taxation statutes shall
bear the same meanings in Schedule 3 unless otherwise defined therein.
1.3 The expressions "the Vendors" and "the Warrantors" includes their
respective personal representatives.
1.4 Any document expressed to be "in the Agreed Form" means in a form
approved and for the purpose of identification signed by or on behalf
of the parties hereto.
1.5 The masculine gender shall include the feminine and neuter and the
singular number shall include the plural and vice versa.
1.6 References to persons shall include trustees bodies corporate
unincorporated associations partnerships states and governmental and
administrative entities.
1.7 Save as herein expressly provided otherwise expressions defined in the
TCGA the TA or in the Companies Act shall where used herein have the
meanings therein given to them.
1.8 The captions to clauses and sub-clauses or to paragraphs in Schedule 3
hereto and the summary notes appearing herein in brackets following
references to provisions of the taxation statutes are for the purposes
of information only and are not part of this
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Agreement and shall not be used in the construction of any part or the
whole of this Agreement.
1.9 References to clauses sub-clauses paragraphs sub-paragraphs and
schedules relate to the relevant provisions of this Agreement.
2. Sale and Purchase
2.1 SUBJECT to the terms of this Agreement each of the Vendors as legal
and beneficial owner and with full title guarantee shall sell the
number of Sale Shares set out opposite his name in column 2 of Part 1
of Schedule 1 free from Encumbrances and with all rights which are now
attached to the Sale Shares and the Purchaser (if the Vendors
simultaneously shall sell) shall purchase all of the Sale Shares .
2.2 Each Vendor waives any pre-emption rights which he may have relating
to the Sale Shares of which he is the registered holder whether
conferred by the Articles of Association of the Company or otherwise.
3. Consideration
3.1 THE Consideration for the transfer of the Sale Shares in accordance
with the terms of this Agreement shall be paid or satisfied as
follows:-
(a) the payment by the Purchaser to the Vendors of the Cash
Consideration on Completion which, as between the Vendors,
shall be divided between them in the amounts shown in column
3 of Schedule 1 Part 1; and
(b) the allotment and issue to certain of the Vendors of the
Consideration Shares credited as fully paid at a price of
US$51.62 per Consideration Share on Completion.
3.2 The Consideration Shares shall be apportioned between the Vendors as
set out in column 3 of Schedule 1 Part 1.
3.3 Each of the Vendors receiving Consideration Shares by execution hereof
represents and warrants to the Purchaser that such Vendor is not a
U.S. Person as defined in Regulation S under the U.S. Securities Act
of 1933 (as amended) ("the 1933 Act") and in particular is not:
(i) a natural person resident in the United States;
(ii) a partnership or corporation organized or incorporated under
the laws of the United States;
(iii) an estate of which any executor or administrator is resident
in the United States or incorporated under the laws of the
United States;
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(iv) a trust of which any trustee is resident in the United
States or incorporated under the laws of the United States;
(v) an agency or branch of a foreign entity located in the
United States;
(vi) a discretionary account or similar account held by a dealer
or other fiduciary organized, incorporated or resident in
the United States,
(vii) a non-discretionary account or similar account held by a
dealer or other fiduciary for the benefit or account of a
beneficiary resident in the United States or incorporated in
the United States; or
(viii) a non-U.S. partnership or corporation formed by a U.S.
person or entity principally for the purpose of investing in
securities not registered under the U.S. Securities Act of
1933.
3.4 Each of the Vendors receiving Consideration Shares acknowledges and
agrees that the Consideration Shares are being allotted and issued to
him or it in accordance with the exemption from registration under the
1933 Act provided by Regulation S and will be deemed to be "restricted
securities" as defined in Rule 144 under the 1933 Act. Each of such
Vendors also agrees that he or it will sell or transfer the
Consideration Shares only in accordance with the provisions of
Regulation S, pursuant to registration under the 1933 Act, or pursuant
to an available exemption from registration, including, without
limitation, Rule 144 and agrees not to engage in hedging transactions
with regard to the Consideration Shares unless in compliance with the
1933 Act. The parties hereto agree that the Purchaser has not agreed
to register any Consideration Shares at any time and will refuse to
register any transfer of the Consideration Shares made otherwise than
in accordance with the foregoing.
3.5 The parties agree that the certificate for the Consideration Shares
will bear the following legend:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT") WITH THE
UNITED STATES SECURITIES AND EXCHANGE COMMISSION, AND THE COMPANY DOES
NOT INTEND TO REGISTER THEM. PRIOR TO JUNE 18, 2000, THE SHARES MAY
NOT BE OFFERED OR SOLD (INCLUDING OPENING A SHORT POSITION IN SUCH
SECURITIES) IN THE UNITED STATES OR TO U.S. PERSONS AS DEFINED BY RULE
902(k) ADOPTED UNDER THE ACT, OTHER THAN TO DISTRIBUTORS UNLESS THE
SHARES ARE REGISTERED UNDER.THE ACT, OR AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE ACT IS AVAILABLE. PURCHASERS OF
SHARES PRIOR TO JUNE 18, 2000 MAY RESELL SUCH SECURITIES ONLY PURSUANT
TO AN EXEMPTION FROM REGISTRATION UNDER THE ACT OR OTHERWISE IN
ACCORDANCE WITH THE PROVISIONS OF REGULATION S OF THE ACT. HEDGING
TRANSACTIONS INVOLVING THE SECURITIES MAY NOT BE CONDUCTED UNLESS IN
COMPLIANCE WITH THE ACT. A HOLDER
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OF THE SECURITIES WHO IS A DISTRIBUTOR, DEALER, SUB UNDERWRITER OR
OTHER SECURITIES PROFESSIONAL, IN ADDITION, CANNOT PRIOR TO JUNE 18,
2000 RESELL THE SECURITIES TO A U.S. PERSON AS DEFINED BY RULE 902(k)
OF REGULATION S UNLESS THE SECURITIES ARE REGISTERED UNDER THE ACT OR
ANY EXEMPTION FROM REGISTRATION UNDER THE ACT IS AVAILABLE.
3.6 The Purchaser shall, upon request, instruct its transfer agent to
remove the legend referred to in clause 3.5 from the certificates for
any Consideration Shares to be sold:-
(a) pursuant to a current and effective registration statement;
or
(b) pursuant to Rule 144 or otherwise under any available
exemption from the Act
upon receipt of an undertaking that the relevant Vendor shall transfer
the Consideration Shares only pursuant to such registration statement,
Rule 144 or otherwise as provided in the legend set out in clause 3.5.
3.7 The Purchaser shall take all actions reasonably necessary to enable
holders of Consideration Shares to sell such securities without
registration under the 1933 Act within the limitations of the
exemptions provided by (i) Rule 144, or (ii) any similar rule or
regulation hereafter adopted by the U.S. Securities and Exchange
Commission (the "Commission") including, without limiting the
generality of the foregoing, filing on a timely basis all reports
required to be filed by the U.S. Securities Exchange Act of 1934, as
amended (the "Exchange Act"). Upon request of any holder of the
Consideration Shares, the Purchaser shall deliver to such holder a
written statement as to whether it has complied with such
requirements, a copy of the most recent annual or quarterly report of
the Purchaser and such other reports and documents so filed by the
issuer as the holder may reasonably request in complying with any rule
or regulation of the Commission allowing the holder to sell any such
securities without registration.
4. Completion
SUBJECT to the provisions of this Agreement Completion shall take
place at the offices of the Purchaser's Solicitors immediately
following exchange of this Agreement when and where:-
4.1 the Vendors will deliver or procure the delivery (where appropriate as
agent for the Company) to the Purchaser of:-
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(a) duly executed transfers of the Sale Shares in favour of the
Purchaser or its nominees together with the relevant share
certificates and any power of attorney under which any such
transfers are executed on behalf of any of the Vendors;
(b) letters of resignation in the Agreed Form executed as a Deed
from M J Brooke, N E V Martensson, P E N Martensson, P A
Newman and S Acland as Directors incorporating in each case
an acknowledgement that he has no claim whatsoever against
the Company;
(c) acknowledgements in the Agreed Form executed as a Deed by
each of the Vendors confirming that they have no claim
against the Company on any account whatsoever and that there
are no arrangements outstanding under which the Company has
or could have any obligation to them other than in relation
to those Vendors who are continuing in office in respect of
any ongoing obligations in relation to that office;
(d) powers of attorney in the Agreed Form executed by each of
the Vendors in favour of the Purchaser empowering the
Purchaser to exercise the Vendors' rights as shareholders of
the Company during the period prior to the stamping and
registration of the transfers referred to in paragraph (a)
above;
(e) the duly executed Cancellation Agreements;
(f) the Disclosure Letter duly executed by the Warrantors.
4.2 the Vendors will deliver to the Purchaser as agents for the Company or
otherwise make available at the Company's registered office all papers
documents records and accounts belonging to or in the possession or
under the control of the Company including:-
(a) the statutory and minute books of the Company duly made
up-to-date and the common seal and certificate of
incorporation thereof together with up-to-date prints of the
memorandum and articles of association and the share
certificate book together with all unissued or cancelled
share certificates of the Company;
(b) all books of account or reference as to customers and other
records and all insurance policies in any way relating to or
concerning the business of the Company;
(c) all deeds and documents of title to all assets and
properties including the Property of the Company;
(d) the bank cheque books and paying-in books of the Company and
current statements of all its bank accounts all fuel agency
cards and other credit cards issued to any
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Vendors in their capacity as Directors or Employees of the
Company who are not continuing in such capacity after
Completion;
(e) all employment and PAYE records, VAT records and service
agreements or hire purchase leasing or other agreements of
any kind entered into by the Company.
(f) certified copies of board resolutions of the Company in the
Agreed Form
(i) regarding the acceptance of the resignation from office of
those persons referred to in clause 4.1.(b) above;
(ii) approving (subject only to proper stamping) the transfers of
the Sale Shares;
(iii) approving the registration of the Purchaser or its nominees
as members of the Company subject to the production of duly
stamped and completed stock transfer forms;
(iv) amending all relevant bank mandates in accordance with the
Purchaser's instructions;
4.3 Subject to the above the Purchaser will:-
(a) procure the delivery by way of telegraphic transfer to the
Vendors' Solicitors for the account of the Vendors of the
aggregate amount of the Cash Consideration (the Vendors'
Solicitors are authorised by the Vendors to receive payment
of the Cash Consideration on the Vendors' behalf and the
receipt by the Vendors' Solicitors shall be a good and
sufficient discharge to the Purchaser); and
(b) allot and issue the Consideration Shares in accordance with
clause 3.1(b) and appropriate share certificates to the
relevant Vendors; and
(c) deliver to the relevant Optionholders option certificates
for the options granted to them as referred to in the
Cancellation Agreements and procure the delivery by way of
telegraphic transfer to the Vendors' Solicitors for the
account of the Vendors of the aggregate amount of the cash
entitlement (net of tax) of the Optionholders.
5. Warranties
5.1 SUBJECT to matters fairly disclosed in the Disclosure Letter the
Warrantors hereby severally warrant to the Purchaser contracting
itself and for any member of the Purchaser's Group from time to time
who is a successor in title to the Sale Shares that:-
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(a) in the case of [*] each of the statements made in Schedule 3
is true and correct in every particular at the date of this
Agreement;
(b) in the case of [*] each of the statements made in clauses 1
(other than sub-clauses 1.7, 1.15 and 1.16), 2, 3, 4, 5
(other than sub-clauses 5.7 and 5.8 which shall be given on
the basis of the last eighteen month period only rather than
last six year period), 6, 7, 8, 9, 12, 14, 15, 16 and 18 of
Schedule 3 is to the best of his knowledge information and
belief true and correct in every particular at the date of
this Agreement;
(c) in the case of [*] each of the statements made in Schedule 3
clauses 1 (other than sub-clauses 1.7, 1.15 and 1.16), 5
(other than sub-clauses 5.7 and 5.8 which shall be given on
the basis of the last eighteen month period only rather than
last six year period), 6, 7, 8, 9, 12, 15 and 18 of is to
the best of his knowledge information and belief true and
correct in every particular at the date of this Agreement;
(and so that none of the paragraphs of Schedule 3 shall be
limited or restricted by reference to or inference from the
terms of any other of those paragraphs) (and notwithstanding
any information the Purchaser may have received or been
given or have had as actual implied or constructive notice
prior to the signing hereof other than that fairly disclosed
in the Disclosure Letter).
5.2 Each of the Vendors (other than the Warrantors) hereby warrants to the
Purchaser contracting itself and for any member of the Purchaser's
Group from time to time who is a successor in title to the Sale Shares
that (on a several basis) in respect of the Sale Shares set out
opposite their respective names in column 2 of Schedule 1 Part 1 that
at the date of this Agreement each of the statements set out in
paragraphs1.7, 1.14, 1.15, 1.16 and 1.17 of Schedule 3 is true and
accurate in every particular at the date of this Agreement (and
notwithstanding any information the Purchaser may have received or
been given or have had as actual implied or constructive notice prior
to the signing hereof). The Vendors (other than the Warrantors)
acknowledge that the Purchaser is entering into this Agreement in
reliance on each of the said warranties and representations which have
been given with the intention of inducing the Purchaser to enter into
this Agreement.
5.3 If there shall be any breach of the terms of this Agreement by any of
the Vendors (including the Warrantors) the Purchaser shall be entitled
to compensation in respect of any loss resulting from such breach
subject (where relevant) to the limitations and
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[*] = CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
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restrictions in this Agreement. Provided Always that the provisions of
this clause 5.3 shall be without prejudice to any other remedy which
the Purchaser may have by reason of a breach of any such warranty or
representation. Notwithstanding the foregoing it is agreed that the
Purchaser shall have no right to rescind this Agreement.
5.4 If at any time on or after Completion there shall be any breach of any
of the Warranties given by the Warrantors then the Warrantors will pay
to the Purchaser an amount equal to the diminution thereby caused in
the value of the Sale Shares together with all costs (including
reasonable legal costs on an indemnity basis) and charges and expenses
incurred or payable by the Purchaser either before or after the
commencement of any action in connection therewith.
5.5 The benefit of the Warranties contained in this Clause 5 and Schedule
3 shall be assignable in whole or in part to any person entitled to
the benefit thereof pursuant to sub-clause 5.1 of this Clause 5.
5.6 Any liability to the Purchaser or any other person hereunder may in
whole or in part be released compounded or compromised or time or
indulgence given by the Purchaser or such other person in its
discretion as regards all or any of the Vendors (including the
Warrantors) under such liability without in any way prejudicing or
affecting the rights against any other or others of the Vendors
(including the Warrantors) under the same or a like liability whether
joint or several or otherwise.
5.7 Subject to clause 5.1 and the limitation set out in paragraph 1.9 of
Schedule 5 the Warranties contained in this Clause 5 and Schedule 3
shall continue in full force and effect after Completion and the
Purchaser shall be entitled on and after Completion to take action in
respect of any breach or non fulfilment of any of the representations
and warranties given by the Vendors and/or the Warrantors discoverable
by the Purchaser before Completion provided it was not actually known
to Victor Viegas, Bill Krepick, Brian Dunn or John Ryan and the rights
of the Purchaser shall not be affected by Completion, by any
investigations made by or on behalf of the Purchaser into the affairs
of the Company by the Purchaser failing to exercise or delaying in
exercising any right or remedy or by anything else except a specific
authorised written waiver or release and no single or partial exercise
of a right shall preclude a further or other exercise.
13
<PAGE>
5.8 None of the information supplied by the Company or their respective
professional advisers to the Vendors or the Warrantors or their
representatives or professional advisers in connection with this
Agreement or the documents referred to in it or in relation to the
Business and affairs of the Company shall be deemed to be a
representation to the Vendors or Warrantors (as the case may be) by
the Company of its accuracy and the Vendors and the Warrantors
undertake to the Purchaser that they will not make a claim against the
Company in respect thereof.
5.9 Any Warranty which refers to the knowledge information or belief of
the Warrantors or the awareness of the Warrantors or similar shall be
deemed to mean the knowledge, information or belief which the
Warrantors actually had or would have had if they had made full
enquiry into the subject matter of the Warranty and, in particular,
had made all reasonable enquiry with each of the Key Employees and
[*].
5.10 The maximum aggregate liability of each of the Warrantors for all
claims for breach of Warranty shall not exceed the amounts set out
opposite his name in column 2 of Schedule 1 Part 3
5.11 The liability of the Warrantors under the Warranties shall be limited
as set out in Schedule 5.
5.12 [*] shall not be liable for any claim for breach of the Warranties
unless and until the aggregate amount of all such claims exceeds the
total sum of ONE HUNDRED THOUSAND US DOLLARS (US$100,000) but if such
aggregate liability shall exceed that sum [*] shall be liable for the
whole amount of such claim or claims and not merely the excess. The
amount of such claim in US Dollars shall be based on the exchange rate
applicable at the date of the claim and it is agreed by the Purchaser
and [*] that if [*] fails to satisfy the claim or claims by way of a
cash payment to the Purchaser within 14 days of the claim or claims
being agreed or determined the Purchaser shall be entitled to withhold
from [*] or that [*] shall be required to surrender (without
compensation) such number of stock options over the common stock of
the Purchaser which are in existence at the date of the claim or which
the Purchaser has otherwise agreed to grant to [*] ("Macrovision
Options") as equates to the amount of the claim or claims. For the
purpose of this clause the value of each of the Macrovision Options
shall be the sum of THIRTY US DOLLARS (US$30).
5.13 [*] shall not be liable for any claim for breach of the Warranties
unless and until the aggregate amount of all such claims exceeds the
total sum of ONE HUNDRED THOUSAND US DOLLARS (US$100,000) but if such
aggregate liability shall exceed
- ----------
[*] = CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
14
<PAGE>
that sum [*] shall be liable for the whole amount of such claim or
claims and not merely the excess. The amount of such claim in US
Dollars shall be based on the exchange rate applicable at the date of
the claim and it is agreed by the Purchaser and [*] that if [*] fails
to satisfy the claim or claims by way of a cash payment to the
Purchaser within 14 days of the claim or claims being agreed or
determined that the Purchaser shall be entitled to withhold from [*]
or [*] shall be required to surrender (without compensation) such
number of stock options over the common stock of the Purchaser which
are in existence at the date of the claim or which the Purchaser has
otherwise agreed to grant to [*] ("Macrovision Options") as equates to
the amount of the claim or claims. For the purpose of this clause the
value of each of the Macrovision Options shall be the sum of THIRTY US
DOLLARS (US$30).
6. Restrictive Covenants
6.1 [*] ("Covenantor") undertakes to the Purchaser by way of further
consideration for the obligations of the Purchaser under this
Agreement that for the period of [*] years after Completion (unless
the Covenantor's employment with the Company is terminated during that
time otherwise than for cause in which case such period shall be
reduced to [*] years after Completion) he will neither on his own
account nor in conjunction with nor on behalf of any person firm or
company whether as an employee director consultant shareholder partner
agent or in any capacity whatsoever directly or indirectly:-
(a) solicit interfere with canvass induce or endeavour to
solicit entice or induce away from the Company any trade or
business of the type carried on by the Company in the period
of 12 months prior to the Completion Date ("the Relevant
Period") of any person firm or company who or which during
the Relevant Period was a client or customer of the Company
or a prospective client or customer with whom the Company
had entered into serious negotiations;
(b) solicit interfere with canvass induce or endeavour to
solicit entice or induce away from the Company any trade or
business of the type carried on by the Company in the
Relevant Period from any person firm or company who or which
during the Relevant Period was a supplier of the Company or
a prospective supplier with whom the Company had entered
into serious negotiations;
(c) render any services or supply any goods or products
competing or likely to compete with those of the Company to
any person firm or company who or which during the Relevant
Period was a client or customer of the Company or a
prospective client or customer with whom the Company had
entered into serious negotiations;
- ----------
[*] = CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
15
<PAGE>
(d) obtain any services or any goods or products competing or
likely to compete with those obtained by the Company from
any person firm or company who or which during the Relevant
Period was a supplier of the Company or a prospective
supplier with whom the Company had entered into serious
negotiations;
(e) take any action likely to result in any supplier of the
Company ceasing or reducing its trade with the Company;
(f) solicit entice or induce or endeavour to solicit entice or
induce away from the Company any director manager consultant
or senior employee (earning(pound)30,000 or more gross per
annum (subject to increase in accordance with the Retail
Prices Index)) employed by the Company at the Completion
Date or during the Relevant Period to leave the Company and
become employed or engaged by any person firm or company
which is in competition to any trade or business of the
Company as carried out in the Relevant Period whether or not
such person would commit any breach of contract by reason of
leaving and the Covenantor shall not approach any director
manager consultant or senior employee for such purpose or
authorise or knowingly approve the taking of any of the
aforesaid actions by any other person firm or company;
(g) offer or procure the offer of employment to any director
manager consultant or senior employee (earning (pound)30,000
or more gross per annum (subject to increase in accordance
with the Retail Price Index)) employed by the Company at the
Completion Date or during the Relevant Period whether or not
such person would commit any breach of contract by reason of
leaving and the Covenantor shall not approach any director
manager consultant or senior employee for such purpose or
authorise or knowingly approve the taking of any of the
aforesaid actions by any other person firm or company;
(h) engage in or be concerned or interested in, in competition
to the Company, any trade or business carried on by the
Company in the Relevant Period in respect of which the
Covenantor was engaged or concerned or interested during the
Relevant Period for the Company or in respect of which the
Covenantor had or has confidential information of the
Company anywhere within the United States;
(i) engage in or be concerned or interested in, in competition
to the Company, any trade or business carried on by the
Company in the Relevant Period in respect of which the
Covenantor was engaged or concerned or interested during the
Relevant Period for the Company or in respect of which the
Covenantor had or has confidential information of the
Company anywhere within the European Union and/or European
Free Trade Area;
16
<PAGE>
(j) engage in or be concerned or interested in, in competition
to the Company, any trade or business carried on by the
Company in the Relevant Period in respect of which the
Covenantor was engaged or concerned or interested during the
Relevant Period for the Company or in respect of which the
Covenantor had or has confidential information of the
Company anywhere within the world;
(k) engage in or be concerned or interested in, in competition
to the Company, any trade or business carried on by the
Company in the Relevant Period in respect of which the
Covenantor was engaged or concerned or interested during the
Relevant Period for the Company or in respect of which the
Covenantor had or has confidential information of the
Company anywhere within the United Kingdom;
(l) anywhere in the world for any purpose whatsoever use or
carry on or be engaged in any business firm or company using
any business name used by the Company or any name containing
"C-Dilla" or the logo of the Company or any colourable
imitation thereof.
6.2 Each of the Vendors undertakes henceforth not to divulge or use other
than for the benefit of the Company any confidential information of
the Company (including without limitation information concerning the
Business, the accounts or finances of the Company or its customers'
transactions or affairs of which it has knowledge) for a period of [*]
years from the date of acquiring such confidential information
otherwise than (i) to the professional advisers officers and employees
of the Company whose province it is to know the same and (ii) in the
case of the institutional Vendors each shall be at liberty from time
to time to make such disclosure to its partners, trustees,
shareholders, unit holders and other participants in relation to the
business affairs and financial position of the Company as is usual
practice in accordance with the business of such institutional Vendors
and undertakes to use its best endeavours to prevent the publication
or disclosure of any such confidential information save that this
clause shall not prevent any disclosure of confidential information
required by law or by any governmental or other authority or
regulatory body.
6.3 Each of the Vendors (other than the Covenantor) agrees that for a
period of [*] years from the Completion Date it shall not directly
solicit interfere with canvass induce or endeavour to solicit entice
or induce away from the Company any person who is then or was at
Completion a director manager consultant or senior employee of the
Company (as that term is defined by paragraph 6.1(f) above)
- ----------
[*] = CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
17
<PAGE>
6.4 The restrictions contained in the preceding sub-clauses are considered
reasonable by the parties (having taken independent legal advice) and
are considered to be reasonable and necessary for the protection of
the Company and accordingly the benefit of the covenants may be
assigned by the Purchaser and its successors in title without the
consent of the Vendors.
7. Further Assistance
7.1 Each of the Vendors undertakes to do execute and perform all such
further acts deeds documents or things as the Purchaser may reasonably
require effectively to vest legal and beneficial ownership of the Sale
Shares in the Purchaser or its nominees free from all Encumbrances
whatsoever and to give full effect to the terms of this Agreement.
7.2 Failing compliance by any Vendor with clause 7.1 such Vendor
irrevocably appoints any director of the Purchaser as its attorney
with full power and authority in its name and on its behalf to do
everything and to execute all documents which such attorney in his
absolute discretion considers necessary or desirable to give effect to
the provisions of clause 7.1.
8. Publicity
SAVE as may be required by law or by any governmental or other
authority or regulatory body none of the Vendors [or the Warrantors]
shall issue any information or statement to the press relating to the
transaction herein agreed to be effected or any part of it without the
prior written consent of the Purchaser.
9. Costs
EACH party shall pay its own costs and expenses (including the fees of
agents, representatives, solicitors, accountants and actuaries engaged
by them) in connection with the negotiation preparation and completion
of this Agreement and all incidental documents
10. Governing Law
THIS Agreement shall be governed by and construed in accordance with
English law and the parties agree to submit to the exclusive
jurisdiction of the English Courts.
11. Notices
11.1 ANY notice or communication to be given under this Agreement shall be
in writing and shall be delivered personally or sent by first class
pre-paid or registered or recorded delivery post to an address inland
or by first class air-mail post to an address overseas or by facsimile
transmission to (in the case of a corporation) its registered office
for the time
18
<PAGE>
being or (in the case of an individual) his last known address or (in
either case) the relevant facsimile number of the party to receive the
notice.
11.2 Communications to the Purchaser shall be marked for the urgent
attention of the Chief Financial Officer (or such other individual as
may be subsequently notified by the Purchaser for that purpose).
11.3 The notice shall be deemed to be given:-
(a) if delivered personally at the time of delivery; or
(b) if sent by inland post 2 Business Days after the notice
shall have been posted; or
(c) if sent by overseas post 4 Business Days after the notice
shall have been posted; or
(d) if sent by facsimile at the time of completion of
transmission by the sender, if received at least two hours
before the close of working hours on a Business Day and
otherwise on the next Business Day.
11.4 In proving service it shall be sufficient to prove that personal
delivery was made or that the envelope containing the notice was
properly addressed and delivered into the custody of the postal
authorities as a first class pre-paid or registered or recorded
delivery letter or that the facsimile was dispatched and a
confirmatory transmission report received.
11.5 For the purpose of this clause 11 "working hours" means between the
hours of 9.00 am and 5.00 pm (inclusive) local time to the recipient
of the notice.
12. Assignability
THE benefit of this Agreement (including without limitation the
Warranties) may be assigned by the Purchaser in whole or in part. None
of the rights of the Vendors under this Agreement shall be assigned
without the prior written consent of the Purchaser such consent not to
be unreasonably withheld or delayed.
19
<PAGE>
13. Waiver
NO failure to exercise nor any delay in exercising any right or remedy
hereunder by either party shall operate as a waiver thereof nor shall
any single or partial exercise of any right or remedy prevent any
further or other exercise thereof or the exercise of any other right
or remedy. The rights and remedies herein provided are cumulative and
not exclusive of any rights or remedies herein provided by law. In the
event that any matter falls within the scope of more than one of the
provisions of this Agreement nothing shall prevent the Purchaser from
enforcing against the Vendors the more (or most) stringent
requirement.
14. Severability
EACH of the obligations contained in the clauses and sub-clauses of
this Agreement shall be construed as separate and severable
obligations but if at any time any one or more of the obligations is
or becomes invalid illegal or unenforceable in any respect under law
but would be valid if some part thereof were deleted or the period or
area of application reduced such obligation shall apply with such
modification as may be necessary to make it valid and effective and in
any event the validity legality and enforceability of the remaining
clauses and sub-clauses hereof shall not in any way be affected or
impaired thereby.
15. Entire Agreement
This Agreement and the documents referred to in this Agreement
constitute the whole agreement between the parties in relation to the
subject matter covered. No oral explanation or oral information given
by any party shall alter the interpretation of this Agreement. It is
agreed that:
(a) no party has entered into this Agreement in reliance upon
any representation, warranty or undertaking which is not set
out or referred to in this Agreement;
(b) in the absence of fraud, no party will have any remedy in
respect of any untrue statement, made to it or its
representatives or agents, upon which it or they relied and
such party's only remedy will be for breach of contract or
as otherwise expressly provided by this Agreement; and
(c) this clause shall not exclude any liability for fraudulent
misrepresentation.
20
<PAGE>
16. Variation
NO alteration amendment or variation of this Agreement shall be of any
force or effect unless it is in writing and signed by (or by some
person duly authorised by) each of the parties.
17. Obligations
WHERE this Agreement is executed by or on behalf of two or more
parties together:-
17.1 this Agreement shall not be revoked or impaired as to any of such
parties by the incapacity or insolvency of the other(s); and
17.2 the Purchaser may release or discharge any party from its obligations
under this Agreement or accept any composition from or make any other
arrangements with any party without releasing or discharging the
other(s) or otherwise prejudicing or affecting the rights and remedies
of the Purchaser against the other(s).
18. Execution
18.1 THIS Agreement may be executed in any number of counterparts and by
the parties on different counterparts, but shall not be effective
until each party has executed at least one counterpart.
18.2 Each counterpart shall constitute an original of this Agreement but
all the counterparts shall together constitute one and the same
Agreement.
18.3 Delivery by facsimile by any party of a duly executed counterpart
shall be deemed to constitute delivery of an original counterpart of
this Agreement and such facsimile copy shall be capable of being
produced in evidence in court or for registration at any appropriate
Registry or otherwise as an original document by the party or parties
to this Agreement to whom such facsimile is transmitted.
IN WITNESS whereof this Agreement has been executed as a deed the date first
above written
21
<PAGE>
SCHEDULE 1
PART 1
DETAILS OF THE REGISTERED HOLDERS OF THE SALE SHARES
Column 1 Column 2 Column 3
Name and Address of Vendors No. and class of Shares held Consideration
- --------------------------- ---------------------------- -------------
Cash Shares
[*]
- ----------
[*] = CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
22
<PAGE>
PART 2
DETAILS OF THE OPTIONHOLDERS
Column 1 Column 2
Names of Optionholders Number Date Granted Option Price
- ---------------------- ------ ------------ ------------
[*]
- ----------
[*] = CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
23
<PAGE>
PART 3
DETAILS OF THE WARRANTORS
Column 1 Column 2
Name and Address of Warrantors Maximum cap on liability
- ------------------------------ ------------------------
[*]
- ----------
[*] = CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
24
<PAGE>
SCHEDULE 2
DETAILS OF THE COMPANY
1. Name:- C-Dilla Limited
2. Registered in England with limited liability under the Companies Act 1985
3. Date of Incorporation:- 31 January 1992
4. Registered Number:- 2683202
5. Authorised Share Capital:- (pound)1,326,000 divided into:- 28,847
"A" Ordinary Shares of 10 pence each;
150,000 "B" Ordinary Shares of 10 pence
each; 21,153 "C" Ordinary Shares of 10
pence each; 500,000 "D" Ordinary Shares
of 10 pence each; 1,562,500 "E" Ordinary
Shares of 2 pence each; 247,500 "F"
Ordinary Shares of 10 pence each; and
1,200,000 Preference Shares of (pound)1
each
6. Issued Share Capital:- "A" Ordinary Shares 28,847
"B" Ordinary Shares 150,000
"C" Ordinary Shares 21,153
"D" Ordinary Shares 500,000
"F" Ordinary Shares 247,500
Preference Shares 1,200,000
7. Registered Office:- Woodley House, Crockhamwell Road
Woodley Reading Berkshire RG5 3JP
8. Accounting Reference Date:- 31 December
9. Auditors:- Sheen Stickland
25
<PAGE>
10. Directors:-
Michael John Brooke
Peter Alfred Newman
Nils Erik Vilhelm Martensson
Simon Hugh Verdon Acland
Victor Viegas
William Krepick
Patrick Erik Nils Martensson
11. Secretary:- Colin Vincent Austin Nunn
26
<PAGE>
SCHEDULE 3
WARRANTIES
1. GENERAL
1.1 The information contained in the recitals to this Agreement and
Schedules 1, 2 and 4 is true complete and accurate in all respects and
not (whether by reason of any omission or otherwise) untrue or
misleading.
1.2 [intentionally left blank]
1.3 There is not outstanding any indebtedness or other liability (actual
or contingent) owing by the Company to the Warrantors or so far as the
Warrantors are aware to the Vendors or any Director of the Company or
any person connected with any of them.
1.4 None of the Warrantors or any person connected with them has nor so
far as the Warrantors are aware do any of the Directors have any
interest, direct or indirect, (i) in any business other than the
Business which is or so far as the Warrantors are aware is likely to
be or become competitive with the Business or any proposed business of
the Company or (ii) in any Intellectual Property Rights of the
Company.
1.5 Copies of the Memorandum and Articles of Association of the Company
which are annexed to the Disclosure Letter are true and complete in
all respects and the register of members and other statutory books of
the Company have been properly kept and contain a true, accurate and
complete record of the matters which should be dealt with therein and
no notice or allegation that any of the same is incorrect or should be
rectified has been received.
1.6 All returns, particulars, resolutions and other documents required to
be filed with or delivered to the Registrar of Companies by the
Company have been correctly and properly prepared and so filed or
delivered within the time limits contained, mentioned or referred to
in the Companies Act.
1.7 The number of Sale Shares set out in Schedule 1 Part 1 constitute the
whole of the issued share capital of the Company which is not already
owned by the Purchaser and such Sale Shares have been properly
allotted and issued and are absolutely and beneficially owned by the
Vendors as therein set out and (other than the Outstanding Options)
there is no option or warrant or convertible security over or
affecting, and there is no mortgage, charge, pledge, lien or other
form of security or encumbrance or pre-emption or refusal rights on,
over or affecting the Sale Shares or any unissued shares, debentures,
loan capital or other securities of the Company and there is no
agreement or commitment to
27
<PAGE>
give or create any of the foregoing and no claim has been made by any
person to be entitled to any of the foregoing.
1.8 The Outstanding Options set out in Schedule 1 Part 2 constitute the
only options over or affecting any unissued shares of the Company full
details of which are set out in the Disclosure Letter.
1.9 The Company has not at any time:-
(a) repaid or agreed to repay or redeem any shares of any class
of its share capital or otherwise reduced or agreed to
reduce its issued share capital or any class thereof; or
(b) capitalised or agreed to capitalise, in the form of shares,
debentures or other securities or in paying up any amounts
unpaid on any shares, debentures or other securities, any
profits or reserves of any class or description nor has it
passed or agreed to pass any resolution to do so.
1.10 So far as the Warrantors are aware no material breach of any of the
provisions of the Companies Act has been committed by the Company.
1.11 So far as the Warrantors are aware the Company has at all times
carried on its business and affairs in accordance with its Memorandum
and Articles of Association.
1.12 The Company has not given any power of attorney or any other authority
(express implied or ostensible) to any person to enter into any
contract or commitment or do anything on its behalf which is still
outstanding or effective (other than any authority of directors or
employees to enter into routine trading contracts in the normal course
of their duties).
1.13 The Company has not declared any dividends or other distributions.
1.14 The Vendors and the Warrantors (as the case may be) have full power
and authority and have taken all action necessary to execute and
deliver and to exercise their rights and perform their obligations
under this Agreement and each of the documents in the Agreed Form to
be executed on or before Completion which constitute valid and binding
obligations on each of the Vendors and the Warrantors (as the case may
be) in accordance with their terms.
1.15 The Vendors are entitled to sell and transfer the full legal and
beneficial ownership in the Sale Shares free from all Encumbrances or
other adverse claims to the Purchaser and such sale will not result in
any breach of or default under any agreement or other obligation
binding upon the Vendors or any of them or any of their respective
property.
28
<PAGE>
1.16 There is no litigation, arbitration, prosecution, administrative or
other legal proceedings or dispute in existence or threatened against
any of the Vendors in respect of the Sale Shares or the Vendors'
entitlement to dispose of the Sale Shares and the Vendors have not
been notified of any facts which might give rise to any such
proceedings or any such dispute.
1.17 The Company has not exercised nor purported to exercise or claim any
lien over the Sale Shares and no call on the Sale Shares is
outstanding and all the Sale Shares are fully paid up or credited as
fully paid up.
2. [intentionally left blank]
3. ACCOUNTS
3.1 The Accounts comply with the requirements of the Companies Act, all
other relevant statutes and all applicable SSAPs, FRSs, Consensus or
Statement of Recommended Practice issued by the Accounting Standards
Board in England and Wales or any committee of it or body recognised
by it in force on the Balance Sheet Date; have been prepared in
accordance with generally accepted accounting principles and on the
same basis as the corresponding accounts for the preceding three
financial years; are accurate in all material respects; and give a
true and fair view of the state of affairs of the Company at the
Balance Sheet Date and of the profits or losses for the period
concerned and as at that date make:
(a) proper provision for all actual liabilities;
(b) proper provision (or note in accordance with good
accountancy practice) for all deferred or contingent
liabilities (whether liquidated unliquidated or disputed);
(c) proper provision for all bad and doubtful debts;
(d) proper provision for all capital commitments;
(e) proper provision for all Tax liabilities;
3.2 Full provision or reserve has been made in the Accounts for Taxation
liable to be assessed on the Company or for which it is or may become
accountable in respect of:
(a) profits gains or income (as computed for Taxation purposes)
arising or accruing or deemed to arise or accrue on or
before the Balance Sheet Date;
29
<PAGE>
(b) any transactions effected on or before the Balance Sheet
Date or provided for in the Accounts; and
(c) distributions made or deemed to be made on or before the
Balance Sheet Date or provided for in the Accounts.
3.3 Proper provision or reserve for deferred taxation has been made in the
Accounts.
3.4 The profits or losses of the Company for the three financial years
ended on the Balance Sheet Date (as disclosed in the Accounts and in
the audited accounts of the Company for such previous periods) and the
trend of profits or losses thereby shown have not (except as therein
disclosed) been affected to a material extent by inconsistencies of
accounting practice, by the inclusion of non-recurring items of income
or expenditure by transactions entered into otherwise than on normal
commercial terms or by any other factor rendering such profits or
losses for all or any of such periods exceptionally high or low.
3.5 The Management Accounts have been prepared on a basis consistent with
the management accounts prepared in the year preceding the Balance
Sheet Date and give a reasonable view of the state of affairs, and
profit (or loss) of the Company as at and for the period in respect of
which they have been prepared.
4. CURRENT FINANCIAL AFFAIRS
4.1 The Company had no outstanding capital commitments at the Balance
Sheet Date and has not since then incurred or agreed to incur capital
expenditure or commitments or disposed of capital assets having a
market value in excess of (pound)11,000 per item or (pound)100,000 in
aggregate.
4.2 Since the Balance Sheet Date:
(a) the Company has not paid or declared any dividend or made
any payment or disposal which is or is treated as a
distribution for the purposes of TA;
(b) the Company has not repaid any indebtedness in advance of
its stated maturity and no event has occurred which would
entitle any third party to call for repayment of any part
thereof prior to its normal maturity date.
4.3 Save for the financial facilities and borrowings of the Company
details of which are set out in the Disclosure Letter, the Company has
no borrowings or obligations having the commercial effect of
borrowings.
30
<PAGE>
4.4 There are no debts owing by to the Company other than debts which have
arisen in the ordinary course of the Business, nor has the Company
lent any money which has not been repaid.
4.5 The Company is not a party to any option or pre-emption right, or a
party to any guarantee, suretyship, comfort letter or any obligation
(whatever called) to pay, provide funds or take action in the event of
default in the payment of any indebtedness of any other person or
default in the performance of any obligation of any other person.
4.6 The Company has not engaged in any borrowing or financing not required
to be reflected in the Accounts.
5. CURRENT TRADING AFFAIRS
5.1 Since the Balance Sheet Date:
(a) the Company has carried on its business in the ordinary
course so as to maintain the same as a going concern and has
not carried on any activity other than its usual business;
(b) the Company has not acquired any asset for a consideration
in excess of (pound)11,000.
5.2 So far as the Warrantors are aware the Company has at all times
conducted its business and affairs in all respects in accordance with
all applicable laws and regulations. The Company has obtained and
complied with all statutory municipal and other licences consents and
requirements applicable to its business as now carried on and all
terms and conditions of any licences and consents necessary or
desirable to the carrying on of such business have at all times been
observed and complied with and the Warrantors are not aware of any
intended or contemplated refusal to renew or terminate any such
licence or consent.
5.3 The Warrantors have not and so far as the Warrantors are aware neither
the Company nor the Directors have committed or done any breach of
contract or statutory duty or any other act which could lead to a
claim for compensation or damages specific performance injunction
set-off or any other civil or criminal claim of sanction being made or
brought against him or it as the case may be or which would otherwise
adversely affect the Business.
5.4 So far as the Warrantors are aware no substantial customer or supplier
of the Company (that is to say a supplier or customer whose supplies
to or purchases from the Company of goods or services have represented
more than ten per cent in value of all supplies to or purchases from
the Company during either or both of the calendar years 1997 and 1998)
has during the period of 12 months prior to this Agreement ceased to
trade with or
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substantially reduced the volume of its trade with the Company and
during such period the terms of trade of the Company with such
supplier or customer have not significantly changed to the detriment
of the Company and the Warrantors are not aware that any such
cessation or substantial reduction in trade or change in terms of
dealing is likely after Completion.
5.5 So far as the Warrantors are aware the Company has not sold or
supplied products which are, or were, or will become, unfit for the
purpose for which they were intended or which do not comply in any
material respect with any warranties or representations expressly or
impliedly made by the Company or with all applicable regulations,
standards and requirements in respect thereof.
5.6 The Company is not engaged either on its own account or vicariously in
any suit action litigation arbitration or tribunal proceedings or any
governmental or official investigation or inquiry and no such suit
action litigation arbitration or tribunal proceedings or investigation
or inquiry or other dispute is pending or threatened by or against the
Company and so far as the Warrantors are aware there are no
circumstances likely to lead to any such suit action litigation
arbitration or tribunal proceedings or governmental or official
investigation or inquiry or other dispute.
5.7 There is not now subsisting and has not at any time within the last
six years been any debt owing by the Company to any director or person
beneficially interested in any part of the share capital of the
Company or any person connected with any such person or associated
with any such person.
5.8 There is not now subsisting and has not at any time within the last
six years been any contract or arrangement (whether of the nature of a
loan or otherwise) to which the Company is or was a party in which any
director of or person beneficially interested in any part of the share
capital of the Company or any person connected with any such person or
associated with any such person was directly or indirectly interested.
6. ASSETS
6.1 All the undertaking of the Company and all assets included in the
Accounts or acquired by the Company since the Balance Sheet Date
(other than current assets subsequently sold or realised in the
ordinary course of business) and subject to the above all other assets
now used by the Company in the Business are absolutely owned by the
Company both legally and beneficially and are in its possession and
under its control and none is the subject of any mortgage, debenture,
charge, lien, pledge, option, factoring arrangement, hire purchase,
leasing, lease purchase or credit-sale agreement or any agreement for
conditional sale or sale by instalments or any other encumbrance
whatsoever (or any agreement to grant or create any of the same) nor
subject to any
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agreement or arrangement whereby the title to any goods or any rights
in the proceeds of sale of any goods is or may be reserved to the
seller of the goods or to any third party.
6.2 So far as the Warrantors are aware The Company is not a party to or
subject to any agreement, transaction, obligation, commitment,
understanding, arrangement or liability which:-
6.2.1 involves or is likely to involve obligations, restrictions,
expenditure or receipts of an unusual, onerous or exceptional nature
and not in the ordinary course of the Company's Business; or
6.2.2 is any way otherwise than in the ordinary course of the Company's
Business.
7. JOINT VENTURE AND PARTNERSHIPS
7.1 The Company is not, nor has agreed to become, a party to any joint
venture or consortium or partnership arrangement or agreement.
7.2 The Company does not conduct and has not conducted any part of the
Business through a branch agency or permanent establishment outside
the United Kingdom.
8. AGREEMENTS RESTRICTING BUSINESS
Other than in respect of the Material Contracts listed in Part C of
the Index to the Disclosure Letter the Company is not a party to any
agency, distributorship, marketing, purchasing, manufacturing or
licensing agreement or arrangement, or any restrictive trading or
other agreement or arrangement, pursuant to which any part of the
Business is carried on or which in any way restricts its freedom to
carry on the Business in such manner as it thinks fit or to use or
exploit any of the assets of the Company in any part of the world in
such manner as is thought fit.
9. GRANTS
There are no grants, subsidies and other similar payments which the
Company has received which (if repayable) have not been repaid in full
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10. ENVIRONMENTAL LIABILITIES
10.1 The Company has not received notice that it has failed to comply with,
or has inadequate facilities to continue to comply, with any
legislation (both primary and secondary) relating to the protection of
the environment as now in force.
10.2 So far as the Warrantors are aware the use of the Property and any
other properties which are currently occupied or otherwise used by the
Company in connection with the Business and all machinery and
equipment therein and the conduct of any Business therein complies in
all respects with the Factories Act 1961, the Offices, Shops and
Railway Premises Act 1963, the Fire Precautions Act 1971, the Health &
Safety at Work Act 1974 the Planning Acts, the COSHH Regulations, the
Control of Pollution Act 1974 and the Environmental Protection Act
1990 and with all rules, regulations and delegated legislation
thereunder and all necessary licences and consents required thereunder
have been obtained.
11. LICENCES AND CONSENTS
11.1 So far as the Warrantors are aware the Company has obtained all
necessary Open Individual Export Licences from the Department of Trade
and Industry and filter licence agreements and all other necessary
licences and consents required for the proper carrying on of the
Business in each case necessary for the performance of its Business as
contemplated by this Agreement and all of the foregoing licences and
consents are valid and subsisting.
11.2 The Company has not received notice that it is in breach of any of the
terms and conditions of any licences or consents; there are no factors
known to the Warrantors that might in any way prejudice the
continuation, or renewal, of any licence or consents.
11.3 The Company has not been notified that any agreement or arrangement
which it is a party to or directly or indirectly concerned with
(whether or not legally binding) or that any course of conduct which
it is pursuing is registerable under or prohibited by or capable of
giving rise to any investigation by the Director General of Fair
Trading or reference to the monopolies and merger commission (whether
pursuant to the Treaty of Amsterdam, The Fair Trading Act 1973, The
Resale Prices Act 1976, The Restrictive Trade Practices Acts 1976 and
1977, The Competition Acts 1980 and 1998, The Trade Descriptions Act
1968, The Consumer Credit Act 1974 or otherwise) or prohibited as
incompatible with the European Community legislation and in particular
Articles 85 and 86 of The Treaty of Amsterdam or with any other
anti-trust legislation.
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12. EMPLOYEES
12.1 The particulars shown in the Annexure of Employees annexed to the
Disclosure Letter show all remuneration payable and pension benefits
and other benefits provided which the Company is bound to provide
(whether now or in the future) to each officer, Employee or consultant
of the Company or any person connected with any such person and are
true and complete and include particulars of all profit sharing
incentive and bonus arrangements to which the Company is a party
whether legally binding on the Company or not. The Company's standard
terms of engagement of employees is contained in the Disclosure Letter
together with details of any changes (other than to salary) thereto.
12.2 No present Employee of the Company has given or received notice
terminating his agreement except as expressly contemplated under this
Agreement.
12.3 The Company has not given notice of any redundancies to any Employee.
12.4 The Warrantors are not aware of any outstanding claim against the
Company by any person who is now or has been an officer or Employee of
the Company or any dispute between the Company and a material number
or class of its Employees and no payments are due by the Company under
the provisions of the Employment Rights Act 1996.
13. INTELLECTUAL PROPERTY
13.1 Details of all Intellectual Property Rights registered or for which
application for registration has been made in the name of the Company
are set out in the Disclosure Letter. All such rights are solely and
beneficially owned by the Company, valid and enforceable, and (in
respect of the registered rights) all renewal and maintenance fees
have been paid and all steps necessary for the prosecution of
applications taken.
13.2 So far as the Warrantors are aware details of all licences (whether
exclusive or non-exclusive) granted by any third party in respect of
the Intellectual Property Rights of the Company (whether written or
oral, formal or informal, and including licences of software (other
than office software) and/or know-how, collaboration and research
agreements, and any Government or University funding arrangements) are
set out in the Disclosure Letter. There has been no breach (whether by
the Company or so far as the Warrantors is aware by such third party)
of the terms of any such licence or of any licence relating to office
software used by the Company or of any confidentiality agreements
entered into by the Company with any third party. Any licences granted
to third parties have been entered into in the ordinary course of the
Company's business.
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13.3 So far as the Warrantors are aware the Intellectual Property Rights
disclosed against warranties 13.1 and 13.2 constitute all such rights
required for the conduct of the Business as at the Completion Date.
13.4 The activities of the Company and its employees in the conduct of the
Business as now carried on and any products currently under
development or contemplated do not infringe the Intellectual Property
Rights of any third party, and there has been no actual or suspected
infringement by any third party of any of the Intellectual Property
Rights of the Company.
13.5 The Company has taken all reasonable steps required to protect the
Company's rights in confidential information and trade secrets of the
Company or provided by any third party to the Company.
13.6 There are no actual and the Warrantors have not received notice of
any potential challenges or disputes relating to the validity,
subsistence or ownership of any of the Intellectual Property Rights
of the Company, nor any opposition or claim for revocation or
rectification of any of the registered Intellectual Property Rights.
The Company has no liability to pay compensation to any person
pursuant to s.40 and s.41 Patents Act 1977 or any corresponding
legislation in any other jurisdiction.
13.7 So far as the Warrantors are aware the Company's products comply with
all regulations and standards relevant to their intended applications
in any territory in which the Company is specifically requested to
participate in marketing its products or where the Purchaser has
specifically drawn the Company's attention to requirements for
compliance with such regulations or standards.
14. TAXATION
14.1 Residence
14.1.1 The Company is and always has been resident in the United Kingdom for
the purposes of the TA.
14.1.2 The Company is not and has never been either a dual resident company
or a dual resident investment company within the meaning of the TA.
14.2 Returns
14.2.1 All returns computations and payments which should have been made or
given by the Company for the purposes of Taxation were made or given
within the requisite periods and have been correct and made on a
proper basis and all notices accounts and information which the
Company ought to have made have been made and none
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<PAGE>
of such returns or computations or information is disputed by the
Inland Revenue, H.M. Customs and Excise or other fiscal authority
concerned and so far as the Warrantors are aware there is no fact
which is likely to occasion of any dispute or of any claim for
Taxation in respect of any financial period down to and including the
Management Accounts Date not provided for in the Management Accounts
and the Warrantors is not aware of any matter which may lead to such
dispute.
14.2.2 The Company has complied in all material respects with all
requirements of the Corporation Tax Self Assessment legislation
contained in paragraphs 21 to 23 of Schedule 18 to the Finance Act
1998.
14.3 Close Companies
14.3.1 The Company has not since the Balance Sheet Date made and is not to be
regarded as having made or given any such loan or advance as is
mentioned in Section 420 421 or 422 of the TA nor has it released or
written off or agreed to release or write off the whole of any part of
any such loan or advance.
14.3.2 The Company is not and has never been a close investment holding
company within the meaning of Section 13A of the TA.
14.3.3 No distribution within Section 418 of the TA has ever been made by the
Company.
14.4 Penalties and Interest
Save as provided for in the Management Accounts the Company has duly
paid or fully provided for all Taxation for which it is liable and has
not since its incorporation paid or become liable to pay any penalty
or interest charged in respect of Taxation not duly paid and there are
no circumstances in which any such penalty or interest could be
charged against it in respect of any period prior to the Completion
Date.
14.5 Transactions involving clearance
The Company has not entered into or been a party to or otherwise
involved in any transaction scheme or arrangement to which any of the
following provisions have been or could be applied other than
transactions in respect of which all necessary clearances have
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<PAGE>
been obtained on the basis of full and accurate disclosure to the
Inland Revenue and/or the Special Commissioners of all facts and
considerations relating thereto material to be known to the Inland
Revenue and/or the Special Commissioners:
the TCGA Section 139
the TA Sections 703-709
the TA Section 776
the TCGA Sections 135-138
the TA Section 215
14.6 The Company has not made (and will not be deemed to have made) any
elections under Section 524 and 534 of the TA (lump sum receipts for
patent and copyright).
14.7 Employees and tax
14.7.1 Save as provided for in the Management Accounts all income tax
deductible and payable under the PAYE system has, so far as required
to be deducted, been deducted from all payments made by the Company
and all amounts due to be paid to the Inland Revenue prior to the date
hereof have been so paid.
14.7.2 all deductions and payments required to be made in respect of National
Insurance contributions (including employers' contributions) have been
so made.
14.7.3 Proper records have been maintained in respect of all such deductions
and payments and all regulations applicable thereto have been complied
with.
14.8 [intentionally left blank]
14.9 Value Added Tax
14.9.1 The Company is not and has not been for value added tax purposes a
member of any group of companies.
14.9.2 So far as the Warrantors are aware the Company has complied with all
legislation, regulations, notices orders and directions concerning
value added tax, including the making of all necessary returns and
payments required by law to H.M. Customs and Excise within the
prescribed time limits and has maintained up-to-date records, invoices
and other documentsas legally required to do so.
14.9.3 Save as provided in the Management Accounts the Company is not in
arrears with any payments or returns or notifications under such
legislation, regulations or notices or liable to any abnormal or
non-routine payment or any forfeiture penalty interest or surcharge or
to the operation of any penal provisions contained therein.
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14.10 [intentionally left blank]
14.11 Tax Avoidance
The Company has not entered into or been a party to any scheme or
arrangement or schemes or arrangements designed partly or wholly for
the purpose of illegally avoiding Taxation.
14.12 Inheritance Tax, Capital Transfer Tax and Capital Gains
14.2.1 There is no outstanding Inland Revenue Charge under Section 237 of the
Inheritance Tax Act 1984 over any of the assets of the Company or any
of the Sale Shares.
14.2.2 No person has by virtue of Section 212(1) of the Inheritance Tax Act
1984 any power of sale mortgage or charge in respect of any of the
assets of the Company or any of the Sale Shares.
14.13 [intentionally left blank]
14.14 Roll-over Relief
The Company has made no claim under Sections 152 to 156 (inclusive) or
Section 158 of the TCGA or Section 276 of the TA and no such claim has
been made by any other company which affects or could affect the
amount or value of the consideration for the acquisition of any asset
by the Company taken into account in calculating liability to
corporation tax on chargeable gains or any allowable loss on a
subsequent disposal.
14.15 [intentionally left blank]
14.16 Premiums
The Company has not effected or entered into any act transaction or
arrangement of any nature whereby it has incurred or may hereafter
incur any liability under or by virtue of Sections 34 35 36 and 37 of
the TA (treatment of premiums etc) and pending Completion will not
effect or enter into any such act transaction or arrangement.
14.17 No Taxation is or may become payable by the Company pursuant to
Section 190 of the TA in respect of any chargeable gain which accrued
or will accrue prior to Completion and the Company will at no time
within the two years ending at Completion have transferred any assets
other than trading stock to any company which at the time of disposal
was a member of the same group (as defined in Section 170 of the
TCGA).
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14.18 Company reconstruction or amalgamation
The Company has not been a party to or involved in any share for share
exchange nor any scheme of reconstruction or amalgamation such as are
mentioned in Sections 135 and 136 of the TCGA or Section 139 of the
TCGA under which shares or debentures have been issued or any transfer
of assets effected.
14.19 Chargeable Debts
No gain chargeable to corporation tax will accrue to the Company on
the disposal of any debt owing to the Company not being a debt on a
security.
14.20 Claims by the Company
The Company has made no claim in the last six years under any of the
following:-
14.20.1 Section 279 of the TCGA (foreign assets; delayed remittances);
14.20.2 Section 24 of the TCGA (assets of negligible value);
14.20.3 Section 280 of the TCGA (tax on chargeable gains payable by
instalments);
14.20.4 Section 584 of the TA (unremittable income arising outside the United
Kingdom) or Section 585 of the TA (relief from tax on delayed
remittances);
14.20.5 Section 140 of the TCGA (postponement of charge on transfer of assets
to non-resident company).
14.21 [intentionally left blank]
14.22 General
14.22.1 No liability of the Company to Taxation has arisen since the Balance
Sheet Date but prior to the Completion Date save for corporation tax
payable in respect of normal trading profits earned by it or income
tax deducted under PAYE regulations or national insurance
contributions or Value Added Tax or sickness pay for which it is
accountable to the Inland Revenue, Customs & Excise or other relevant
authority and which has where appropriate been deducted or charged and
where due paid to the Inland Revenue or such other relevant authority
where such liability arises from or in respect of any matter or thing
done outside the ordinary course of business of the Company as at
Completion.
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14.22.2. All documents in the possession of the Company or to the production of
which it is entitled and which attract stamp or transfer duty in the
United Kingdom or elsewhere have been properly stamped.
15. PROPERTIES
15.1 The Properties are occupied or used by right of ownership or under
lease or licence, the terms of which permit their occupation or use by
the Company as occupied or used at the Completion Date. The
information contained in the Disclosure Letter as to the tenure of
each of the Properties and the principal terms of the tenancies and
licences subject to and with the benefit of which the Properties are
held the rents currently payable and the dates of the next rent review
are accurate in all respects.
15.2 The Company has not received notice that any licences, consents and
approvals required from the landlords or any superior landlords under
any leases or licences of the Properties for the proper carrying on of
the Business have not been obtained or are otherwise than valid and in
full force and the covenants on the part of the tenant contained in
the licences, consents and approvals have been duly performed and
observed.
15.3 The Properties as described in Schedule 4 are the only properties
owned, controlled or occupied by the Company or in which the Company
has any interest (including rights under options, rights of
pre-emption or other contractual relationship).
15.4 The Company has in its possession or control all documents of title in
relation to the Properties which consist of original documents or
properly examined abstracts.
15.5 The Company has exclusive vacant possession and occupation of the
Properties free from material encumbrances or third party rights of
any kind whatever save as set out in the Disclosure Letter and all
covenants restrictions stipulations or other encumbrances have been
and are being properly performed and observed and complied with. All
rents, service charges insurance premiums and outgoings affecting the
Properties have been promptly paid and none are outstanding.
15.6 So far as the Warrantors are aware there are no covenants,
restrictions obligations conditions or stipulations affecting the
Properties or any part thereof which are of an onerous or unusual
nature which conflict with the present or proposed user thereof or the
user thereof for which planning permission has been obtained or sought
or which materially affect the value of the Properties of any part
thereof.
15.7 No sub-lease, tenancy or licence has been granted or agreed to be
granted to any third party in respect of the Properties or any part
thereof.
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15.8 All buildings or other erections on the Properties or any part thereof
are in good repair and condition and are fit for the purpose for which
they are at present used and there are no structural problems in
respect of the Properties and no deleterious substances not approved
by any relevant Code of Practice have been used in the construction of
the Properties and the Company has no liability for any clean-up or
removal costs in relation to environmental matters in relation to the
Properties.
15.9 The Company has not been the tenant of or a guarantor in respect of
any leasehold property other than the Properties.
15.10 There are no mortgages or charges legal or equitable specific or
floating affecting the Properties nor does any person have or claim
any lien on the Properties or the documents of title.
15.11 The Company has not received notice of any compulsory purchase orders
or resolutions affecting any of the Properties or any proposal for
such an order or resolution.
16. BORROWINGS AND FACILITIES
16.1 Full details of all limits on the Company's bank facilities and all
borrowings of the Company are set out in the Disclosure Letter and the
Company is not in breach of any of their terms and none of such
facilities or terms of borrowing will be terminated as a result of the
entry into this Agreement.
16.2 Full details of all Encumbrances granted by the Company or affecting
its undertaking or assets are set out in the Disclosure Letter.
17. INSOLVENCY
17.1 No administrator, administrative receiver, receiver, manager of
assets, liquidator or any other similar officer has ever been
appointed in respect of the whole or any part of the assets or
undertaking of the Company and no order has been made, petition
presented, resolution passed or meeting convened at which a resolution
will be proposed for the purpose of the making of any order in
relation to administration, administrative receivership, receivership,
liquidation, management of assets or any other similar situation of
the Company.
17.2 The Company is not insolvent nor stopped or suspended payment of its
debts nor become unable to pay its debts as they fall due (as such
expression is defined in either sub-section (1)(a) to (d) (inclusive)
or sub-section (2) of Section 123 of the Insolvency Act 1986).
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17.3 No voluntary arrangement (as referred to in the Insolvency Act 1986)
or scheme of arrangement as regards its creditors has been proposed by
the Directors or is in operation in relation to the Company.
17.4 No unsatisfied judgement order or award is outstanding against the
Company.
17.5 No written demand under Section 123(1)(a) of the Insolvency Act 1986
has been made against the Company.
17.6 No distress or execution has been levied on or other process commenced
against any asset of the Company.
17.7 The Company has not entered into any transaction nor been given a
preference to which sections 238, 239 or 423 of the Insolvency Act
1986 apply or which may otherwise be liable to be set aside or avoided
for any reason.
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SCHEDULE 4
THE PROPERTIES
Leasehold property known as second floor, Woodley House Crockhamwell Road,
Woodley held under a lease dated 1st November 1996 and made between Peel
Investmenets (North) Limited and the Company for a term of five years from [ ]
1996.
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SCHEDULE 5
LIMITATIONS ON LIABILITY
1.1 No claim may be made against the Warrantors for any breach of Warranty
(a "Claim") unless notice of such claim is served on the Warrantors in
writing, specifying in reasonable detail the nature of such claim and
the amount claimed as soon as reasonably practicable after the
Purchaser becomes aware thereof.
1.2 The Purchaser shall and shall procure that the Company shall promptly
reimburse to the Warrantors all amounts (not exceeding the aggregate
sum paid by the Warrantors (or the value of Macrovision options
surrendered pursuant to clauses 5.12 and 5.13 of this Agreement in
accordance with the valuations set out in those clauses) in respect of
any Claim less the Purchaser's costs and expenses in enforcing such
recovery and any Taxation thereon) paid by the Warrantors in respect
of any Claim which is subsequently recovered by the Purchaser or the
Company as the case may be from any insurance company or other third
party (other than another company in the Purchaser's Group) and the
Purchaser hereby undertakes to use and to procure that the Company
uses all reasonable endeavours to enforce any rights to recover such
sums from insurers or such other third parties subject to the
Warrantors indemnifying and securing the Purchaser and the Company (to
their reasonable satisfaction) against any reasonable costs and
expenses liabilities penalties and fines which may be incurred
thereby.
1.3 No Claim shall be made against the Warrantors:
(a) to the extent that the breach giving rise to a possible
Claim occurs or is increased by reason of the coming into
force of any legislation not in force at the date of this
Agreement or the withdrawal of any relief, allowance or
concession available at the date of this Agreement and
reliance on which by the Company has been notified to the
Purchaser in the Disclosure Letter (where such legislation
or withdrawal purports to be effective retrospectively in
whole or in part) or as a result of any retrospective
increase in any rate of Taxation or by reason of any change
occurring after the date of this Agreement in Revenue
practice or by reason of any change occurring after the date
of this Agreement in any principal of common law in each
case with retrospective effect;
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(b) based upon a liability which is contingent only unless and
until:-
(i) the Purchaser notifies the Warrantors of the claim in
accordance with paragraph 1.1 above;
(ii) if the claim is disputed by the Warrantors the
Purchaser obtains a written opinion from counsel of at least
10 years standing advising that the contingent liability is
likely to become an actual liability.
1.4 If any matter comes to the notice of the Purchaser or a member of the
Group the Purchaser shall and shall procure that each relevant member
of the Group shall:
(a) give written notice thereof to the Warrantors in accordance
with paragraph 1.1 ;
(b) (save where it is not reasonably practicable to consult with
the Warrantors or having made all reasonable attempts to
consult with the Warrantors, in the Purchaser's opinion the
Warrantors are unreasonably withholding or delaying
agreement) not make any admission of liability, agreement or
compromise to or with any person in relation thereto without
prior consultation with or the prior agreement in writing of
the Warrantors;
(c) give the Warrantors and their professional advisers (subject
to their execution of any confidentiality undertakings the
Purchaser may reasonably require) reasonable access during
normal business hours to the premises and personnel of the
Company (but without unreasonably disrupting the business of
the Group) and to any relevant chattels, accounts, documents
and records within the possession or control of the
Purchaser or the Group to enable the Warrantors and their
professional advisers to examine such chattels, accounts,
documents and records and to take copies and photographs
thereof at their own expense subject to the Warrantors
indemnifying and securing the Purchaser and the Company (to
their reasonable satisfaction) against any costs and
expenses liabilities penalties and fines which may be
incurred thereby;
(d) take such reasonable and appropriate action as the
Warrantors may reasonably request to avoid, dispute, resist,
compromise or defend any such claim .
1.5 Notwithstanding anything expressed or implied in this Agreement to the
contrary, any payment by the Vendors pursuant to a Claim shall be
treated for all purposes by the parties as a reduction in the
consideration payable for the Sale Shares and clause [3] shall be
modified accordingly.
1.6 The Purchaser shall only be entitled to recover once for the same loss
suffered as a result of a breach of one or more of the Warranties.
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1.7 The Purchaser shall procure that all reasonable steps are taken by it
and each member of the Group to mitigate any loss or liability
pursuant to its obligation existing at law generally which might give
rise to a false Claim.
1.8 The liability of the Warrantors under or in relation to the Warranties
shall determine on the second anniversary of the Completion Date
except in respect of any claim of which the Purchaser shall have given
written notice to the Warrantors prior to that date.
1.9 The Purchaser confirms that at the Completion Date other than in
relation to the matters set out in the Disclosure Letter it does not
have actual knowledge of any fact or matter which it believes or knows
(and without making further enquiry or linking together any two or
more different facts) constitutes a breach of any of the Warranties.
For the purposes of this paragraph 1.9 the "actual knowledge" of the
Purchaser shall be construed as meaning the actual knowledge of
William Krepick, Victor Viegas and Brian Dunn.
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SIGNED (but not delivered until the date )
hereof) as a DEED by the said )
PETER ARTHUR NEWMAN................. ) /s/ Peter Newman
in the presence of:- ) ----------------
WITNESS:
Name: /s/ illegible...............
----------------------------
Address: London WC1X.........
...........................
Occupation: Trainee Solicitor.......
SIGNED (but not delivered until the date )
hereof) as a DEED by the said )
DR KEITH GEORGE WARREN........... ) /s/ Keith Warren
in the presence of:- ) ----------------
WITNESS:
Name: /s/ illegible...............
----------------------------
Address: London WC1X................
.......................
Occupation: Trainee Solicitor......
EXECUTED (but not delivered until the )
date hereof) as a DEED by )
IPR INDUSTRIES LIMITED )
acting by )
Director: /s/ Nils Martensson...........
------------------------------
Director/Secretary: /s/ Patrick Martensson........
------------------------------
48
<PAGE>
EXECUTED (but not delivered until the )
date hereof) as a DEED by )
COINSHIRE LIMITED )
acting by )
Director: /s/ Mike Brooke...............
------------------------------
Director/Secretary: ..............................
EXECUTED (but not delivered until the )
date hereof) as a DEED by )
(QUESTER VCT PLC) )
acting by )
Director: /s/ Simon Acland............
------------------------------
Director/Secretary: /s/ James Abel..............
------------------------------
EXECUTED (but not delivered until the )
date hereof) as a DEED by )
ABINGTON VENTURES )
LIMITED PARTNERSHIP )
acting by its General Partner )
Abingworth Ventures (G.P.) Limited
Director: /s/ Stephen Bunting.........
------------------------------
Director/Secretary: /s/ David Leathers..........
------------------------------
EXECUTED (but not delivered until the )
date hereof) as a DEED by )
ABINGTON VENTURES )
LIMITED PARTNERSHIP "B" )
acting by its General Partner )
Abingworth Ventures (G.P.) Limited
acting by
Director: /s/ Stephen Bunting...........
------------------------------
Director/Secretary: /s/ David Leathers...........
------------------------------
49
<PAGE>
EXECUTED (but not delivered until the )
date hereof) as a DEED by ALTA-BERKELEY )
111 CV acting by Albert Van Herk )
)
Director: /s/ Albert Van Herk...........
------------------------------
Alta Berkeley Associates BV
General Partner
Director/Secretary: ..............................
SIGNED (but not delivered until the date )
hereof) as a DEED by the said )
COLIN NUNN............................... ) /s/ Colin Nunn................
in the presence of:- ) ------------------------------
WITNESS:
Name: /s/ illegible............
-------------------------
Address: London WC1X...............
...........................
Occupation Trainee Solicitor.......
SIGNED (but not delivered until the date )
hereof) as a DEED by the said )
TOBY GAWIN................................ ) /s/ Toby Gawin...............
in the presence of:- ) ------------------------------
WITNESS:
Name: /s/ illegible..............
---------------------------
Address: London WC1X.................
............................
Occupation: Solicitor...............
50
<PAGE>
EXECUTED (but not delivered until the )
date hereof) as a DEED by )
MACROVISION CORPORATION )
acting by )
Authorised Signatory: /s/ Victor Viegas............
-----------------------------
