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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-SB/A-1
GENERAL FORM FOR REGISTRATION OF SECURITIES
OF SMALL BUSINESS ISSUERS UNDER SECTION 12(b)
OR 12(g) OF THE SECURITIES ACT OF 1934
INTEGRITY HOLDINGS, LTD
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(Exact name of Small Business Issuers in Its Charter)
NEVADA 84-1424647
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
Camden Lock, Dublin 4, Ireland
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(Address of principal executive offices) (Zip code)
001-3531-667-7727
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(Issuer's Telephone Number)
Securities registered under Section 12(b) of the Exchange Act:
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Title of Each Class Name of Each Exchange on Which
to be so Registered Each Class is to be Registered
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n/a n/a
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Securities registered under Section 12(g) of the Exchange Act:
Common Equity, Par Value $.001
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(Title of Class)
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INTEGRITY HOLDINGS, LTD.
FORM 10-SB
TABLE OF CONTENTS
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NO. TITLE PAGE NO.
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PART I
Item 1. Description of Business.........................................................................3
Item 2. Management's Discussion and Analysis or Plan of Operations.....................................18
Item 3. Description of Property........................................................................24
Item 4. Security Ownership of Certain Beneficial Owners and
Management.....................................................................................25
Item 5. Directors, Executive Officers, Promoters and Control Persons;..................................26
Item 6. Executive Compensation.........................................................................27
Item 7. Certain Relationships and Related Transactions.................................................29
Item 8. Description of Securities......................................................................29
PART II
Item 1. Market Price of and Dividends on the Registrant's Common
Equity and Other Shareholder Matters...........................................................29
Item 2. Legal Proceedings..............................................................................30
Item 3. Changes in and Disagreements with Accountants..................................................30
Item 4. Recent Sales of Unregistered Securities........................................................31
Item 5. Indemnification of Directors and Officers......................................................32
PART F/S
Financial Statements...........................................................................32
PART III
Item 1. Index to Exhibits..............................................................................34
Item 2. Description of Exhibits........................................................................34
Signatures.....................................................................................35
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PART I
ITEM 1. DESCRIPTION OF BUSINESS.
Integrity Holdings Limited ("Integrity" or the "Registrant") was
incorporated under the laws of the State of Nevada on July 27, 1977 with the
name of Culver City Studio Records, Inc.
The Registrant had been in the development stage since its inception
and had been engaged in the activity of developing mining properties until 1980
after which the Registrant was inactive. The Registrant came out of its
development stage in 1998 with its acquisition of the Wyse Group PLC.
On December 9, 1997, the Registrant changed its name to Birds Eye, Inc.
At this stage the Registrant was still inactive.
On July 13, 1998, 10,000,000 shares were issued to the founders of
Integrity for $0.01 per share and share options for 6,279,500 shares with an
exercise price of $1.00 per share were also granted to the founders in order to
raise capital.
On July 13, 1998, the Registrant changed its name to Integrity
Holdings, Ltd. The Registrant is now a holding company and operates solely
through its wholly owned subsidiaries. The Registrant operates in the computer
and information technology sector providing software, consulting, web
technologies, networking solutions, hardware supplies and maintenance and
financial services to various industrial sectors in international markets. The
Registrant currently owns software in general accounting, credit union,
veterinary, clearing management, veterinary practice management software and
print and packaging. The Registrant is also involved in the provision of
financial services to its user base. The Registrant maintains its principal
place of business at Integrity House, Camden Lock, South Dock Road, Dublin 4,
Ireland.
The Registrant has currently four (4) subsidiaries operating offering
products and services to the following sectors: print and packing, credit
unions, veterinary, veterinary practice management and cleaning management.
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The Registrant is involved in an ongoing program of seeking additional
acquisition opportunities that fall within the profile of owning it's own
mission critical software having large user bases and significant recurring
income. The Registrant will also seek acquisitions which will have synergies
with the Registrant's other subsidiaries and operations.
As the Registrant acquires more software businesses, it intends to take
full advantage of the ten percent (10%) rate of corporation tax by locating,
where possible, the software development work in Ireland.
During the past twelve (12) months the Registrant has made four (4)
major acquisitions. As a result of these acquisitions, the total revenues of the
Registrant have grown to $10,403,131 for the twelve (12) months to December 31,
1998 and $25,857,760 for the nine (9) months ended September 30th, 1999.
The Registrant owns all of the issued and outstanding stock of the
Wyse Group PLC. ("Wyse"), Saracen Computer Systems Limited
("Saracen"), Information Support Limited ("ISL") and the Premier Computer
Group ("Premier").
The Registrant and its subsidiaries employ a total of 208 employees of
which 170 are full time. These are employed in the following areas:
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AREA NUMBER
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1. Sales 80
2. Administration 30
3. Engineering and Support 60
4. R & D 38
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The Registrant's common stock is publicly traded on the OTC Bulletin
Board under the symbol INTY.
The financial statements have been prepared on the basis that The Wyse
Group PLC. is the predecessor entity (the only entity with operations at the
time of its acquisition on July 13, 1998). As such, the balance sheet as at
December 31, 1997 is that of The Wyse Group PLC. The statement of operations for
the years ended December 31, 1996,1997 and period to June 30, 1998 are the
operating results of The Wyse Group PLC.
The accompanying consolidated balance sheet as at December 31, 1998 and
consolidated statements of operations for the period ended December 31, 1998
include the accounts of Integrity Holdings, Ltd. and
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each of its wholly owned subsidiaries. The Un-audited Interim consolidated
balance sheet as at September 30, 1999 and statements of operations for the nine
(9) months ended also include the accounts of Integrity Holdings Ltd. and each
of its subsidiaries. Inter-company transactions have been eliminated. The
financial statements have been prepared in conformity with U.S. generally
accepted accounting principles.
RECENT DEVELOPMENTS
Beginning in July 1998, the Registrant has made four (4) major
acquisitions of businesses via share purchases or share exchanges or the
purchase of business assets. They include:
SHARE PURCHASE/EXCHANGE
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BUSINESS ACTIVITY AT EFFECTIVE DATE
NAME AND LOCATION THE TIME OF ACQUISITION OF ACQUISITION
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1. The Wyse Group PLC. Computer and Information July 13, 1998
United Kingdom Technology Leasing
Brokerage
2. Saracen Computer Software applications October 3, 1998
Systems Limited for industrial cleaning
United Kingdom management
3. Information Support Computer Maintenance October 12, 1998
Limited and networking services
United Kingdom
4. Premier Computer Software applications for December 23, 1998
Group Limited credit unions, veterinary
Ireland and print and packaging
sectors
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On July 13, 1998, the Registrant made a share exchange of 100% of the
issued and outstanding shares of The Wyse Group PLC. ("Wyse PLC."), a computer
leasing brokerage company with four offices in the UK. Wyse has been operating
profitably in the UK since 1989 and has over 4,000 customers. Wyse was
established in 1989 and since then has grown to be a market leader in office and
technology finance a total 183,375 shares were issued to acquire 100% of the
issued and outstanding shares of The Wyse Group Limited.
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On October 3, 1998, the Registrant acquired via a combination of a cash
payment and the issuance of Integrity common stock for all of the issued and
outstanding shares of Saracen. The purchase price for Saracen was $1,485,000
cash and 10,562 shares of restricted common stock. The Registrant financed the
acquisition of Saracen by way of a private placement of its shares.
Saracen has been operating profitably in the UK since 1984, and has
over 100 customers. Saracen is engaged in the design and supply of management
information systems in the cleaning management industry.
On October 12, 1998, the Registrant acquired for cash all of the issued
and outstanding shares of ISL, a major computer support services business based
in Wokingham, England with regional support centers throughout the UK. The total
consideration paid for ISL was $561,000. The Registrant financed this
acquisition with the funds raised in it's private placement.
ISL has been operating profitably in the UK since 1991 and has over
4,000 customers. The Registrant is engaged in providing maintenance services and
networking solutions to industry. ISL is one of the largest resellers of Acer
computer systems in the United Kingdom.
On December 23, 1998, the Registrant acquired via a combination of cash
payment and the issuance of Integrity common stock, all of the issued and
outstanding shares of Premier. The consideration paid for Premier was $1,227,620
in cash and 147,672 of the Registrant restricted common stock.
The gross revenues in Premier for the year to December 31, 1998 were in
excess of US $7.5 million. The cost of the acquisition was financed with funds
raised from the sale of the Registrant's stock and cash generated from
operations. Premier provides software services to the Credit Union, printing and
packaging and veterinary management sectors. Premier owns the intellectual
property rights to the software it provides to these customers.
On March 26, 1999, after the end of the reporting period, Progress
Systems Limited (a wholly owned subsidiary of the Premier Computer Group which
is a wholly owned subsidiary of the Registrant) purchased the customer base and
software rights to five different software products from Axon Veterinary Limited
("Axon"). Axon supplied software and related information technology services to
the veterinary practices in the United Kingdom and Ireland. Axon has in excess
of 800 customers. The
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consideration for Axon was $445,500 in cash. The acquisition was funded
from cash generated from operations.
On July 16, 1999, Premier Software Limited (a wholly owned subsidiary
of the Premier Computer Group which is a wholy owned subsidiary of the
Registrant) purchased 100% of the share capital of Datasoft Limited
("Datasoft"). Datasoft supplies accounting and distribution software to 110
customers throughout Ireland and the United Kingdom.
The consideration for Datasoft was $303,750 cash and 150,000
Integrity Holdings Ltd. Stock. The cash element of the acquisition was
funded from cash generated from operations.
On July 16, 1999, Premier Software Limited (a wholly owned subsidiary
of the Premier Computer Group which is a wholly owned subsidiary of the
Registrant) purchased the assets of Flick Switch Limited ("Net.Results") which
owns the IPR and assets of the product called Net.Results an internet
connectivity product.
The consideration for Net.Results was $270,000 cash and 125,000
Integrity Holdings Ltd. Stock. The cash element of the acquisition was
funded from cash generated from Operations.
MAJOR OPERATING SUBSIDIARIES
THE WYSE GROUP PLC.
Wyse is a United Kingdom leasing brokerage business specializing in
lease brokerage to the information technology industry. Its main location is in
Chesham, England and it has four other regional offices in Northampton,
Sheffield and Somerset all in the United Kingdom.
Wyse is a lease brokerage firm in the UK with over 4,000 current
clients. It has major alliances with large finance houses throughout the UK
providing it with the ability to broker leasing deals, which give the best
advantage to the customer as well as ensure that Wyse is a profitable
organization.
The inclusion of Wyse as part of the Registrant's group has major
benefits as it allows the other companies within the Group to provide a
financial solution to its clients as well as the information technology
solution. This ensures that the group gains from not only the sale of the
information technology solution, but also the financial solution.
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Wyse's main competition in the United Kingdom is the larger financial
institutions that provide leasing services directly to the client. Some of these
competitors may have greater financial, technical and/or marketing resources
than Wyse and could at some stage in the future pose a significant competitive
threat. Wyse competes on the basis of its high quality service, excellent staff
and building of its customer loyalty. Wyse currently employs 23 People of which
21 are full time.
Wyse is dependent on its well motivated and trained sales teams. Wyse
continually invests in training and morale building with its entire staff to
ensure they remain competitive and focused. Wyse is currently setting up an
office in Dublin Ireland where it intends to provide similar services in the
information technology industry through, initially, a partnership arrangement
with the Premier Computer Group a subsidiary recently acquired by the
Registrant.
In it's own right, Wyse has a large customer base and with the
potential of the group synergies, Wyse will benefit from introduced group
business.
SARACEN COMPUTER SYSTEMS LIMITED
Saracen is a United Kingdom information technology company located in
Uttoxetter, United Kingdom. Saracen provides comprehensive information
technology solutions to the cleaning management industry in the United Kingdom
and Ireland.
Saracen's products and services are primarily provided to clients
utilizing client/server architecture for their information technology solutions.
Client/server architecture utilized multiple terminals and workstations linked
to larger computers and specialized hardware. The systems may also include
internet and intranet solutions. This architecture is generally used by larger
businesses with multiple locations.
Saracen's systems include fifteen separate modules designed
specifically for the cleaning management industry. Saracen's business systems
provide complete integration of all business activities into a single computer
system which can be linked to a third party accounting software system giving
full integration. Saracen is a provider of information technology solutions to
the cleaning management industry both in the United Kingdom and Ireland.
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Saracen's main competitors are other smaller software houses with
single products for specific sections of the industry and in house information
technology departments which develop their own systems.
Saracen's markets are characterized by rapid technology advances and
frequent introductions of new products and enhancements of existing products.
Therefore, new competitors may enter the market at any time. Some of these
competitors may have greater financial, technical and/or marketing resources
than the Registrant, and could pose a significant competitive threat. New
competitors could implement a significant marketing and product development
drive, which could compete with Saracen's products. Saracen competes on the
basis of its high quality systems, its lower costs due to economies of scale and
its superior customer support.
Saracen's software products are frequently refined and improved to
remain competitive and to integrate enhancements provided by new technology
advances. Saracen continues to investigate opportunities to acquire additional
specialty products and expand into additional markets in Europe and the US.
Saracen currently employ's 12 people, all of whom are full time.
INFORMATION SUPPORT LIMITED (ISL)
ISL is a United Kingdom company, located in Wokingham, England. ISL
specializes in hardware, remote management support and networking support for
mid to high end users on mainly client/server architecture. It has 4,000
corporate users.
Support services are provided for desktop management, networks,
operating systems, data security, disaster recovery and training. ISL has
developed a very high level of skills in these areas and is one of the market
leaders in providing such services in the United Kingdom. ISL is currently
supplying these services to over 4,200 clients in the United Kingdom and
Ireland.
ISL has several partnerships with Value Added Resellers (VAR's) for the
supply of maintenance and networking solutions to their clients. Such
partnerships provide ISL with additional selling opportunities and revenues. In
such arrangements ISL provides the hardware and networking solution and the VAR
provides the software solutions to the end user.
ISL's markets are characterized by rapid technology advances and
frequent introductions of new products and enhancements of existing
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products. Competition in this market area is very strong and any change in
marketing and distribution of products from the suppliers or manufacturers could
have an adverse effect on the business of ISL. In addition, new competitors may
enter the market at any time. Some of these competitors may have greater
financial, technical and/or marketing resources than the Registrant, and could
pose a significant competitive threat. ISL competes on the basis of its quality
systems, its lower costs due to economies of scale and its customer support.
The products which ISL sells and maintains are constantly being refined
and improved to cope with technology improvements. As a result, staff training
is a very important part of the operation of ISL and will continue to be in
order to ensure ISL can maintain a competitive edge in this market. ISL employ's
eighty four (84) people, all of whom are full-time.
ISL continues to expand its business by way of investigating more
opportunities to acquire customer bases and develop other partnerships within
its market.
PREMIER COMPUTER GROUP
Premier is an Irish company which is located in Dublin, Ireland
specializing in providing of both software and hardware solutions for the credit
union, veterinary and print, and packing industries. Premier provides
comprehensive solutions for clients from the client's information system
requirements through sales of hardware, software and provision of
implementation, support and training services.
Premier's products and services are primarily provided to clients
utilizing client/server architecture for their information technology solutions.
Client/server architecture utilizes multiple terminals and workstations linked
to larger computers and specialized hardware. The systems may also include
internet and intranet solutions. This architecture is generally used by larger
businesses with multiple locations. Premiers systems provide complete
integration of all business activities into a single computer system.
Premier has successfully established itself as one of the leading
software suppliers to its specific markets in Ireland and the United Kingdom.
Premier's main competition in Ireland is companies of a similar size with
product ranges. However, Premier has established itself as the leading supplier
of credit union and big ticket print and packing software in Ireland.
Premier's markets are characterized by rapid technology advances and
frequent introductions of new products and enhancements of existing
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products. In each of the markets that Premier is involved in, there are
competitors, which are as big as premier and with technology, which is similar.
Therefore, competitors may enter the market at any time. Some of these
competitors may have greater financial, technical and/or marketing resources
than Premier, and could pose a significant competitive threat. Premier competes
on the basis of its quality systems, its lower costs due to economies of scale
and its customer support.
Premier's software products are constantly being refined and improved
to remain competitive and to integrate enhancements provided by new technology
advances. Premier currently employs seventy six (76) people, all of which are
full time. Premier is currently looking at other opportunities to develop its
products and customer base with particular focus on acquisitions in its current
markets.
PROPRIETARY RIGHTS
The Registrant and its subsidiaries rely on a combination of copyright,
trade secret and trademark laws, and non-disclosure and other contractual
provisions to protect their various proprietary products and technology have.
These safeguards may not prevent competitors from imitating the Registrant's
products and services, especially in foreign countries where legal protection of
intellectual property may not be as strong or consistent as in the United
States.
Because the Registrant's business segments are characterized by rapid
technological change, the Registrant believes that factors such as the
technological and creative skills of its personnel, name recognition, market
penetration and reliable customer service and support are more important to
establishing and maintaining a competitive position in its markets than the
various legal protections of its proprietary developments.
The Registrant believes that its proprietary rights do not infringe the
proprietary rights of third parties. There can be no assurance however that
third parties will not assert such infringement by the Registrant with respect
to current or future products, software, trade names or services. Any such
claim, with or without merit, could be time consuming, result in costly
litigation and cause product release delays, and might require the Registrant to
enter into royalty or licensing agreements or cease distribution of certain
products or services. Such royalty or licensing agreements, if required, may not
be available on terms acceptable to the Registrant.
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RISK FACTORS
The securities of the Registrant are speculative in nature and involve
a high degree of risk. In addition to the other information contained in this
report, shareholders should carefully consider the following risk factors:
POSSIBLE FLUCTUATIONS IN OPERATING RESULTS
There can be no assurance that the Registrant's operating subsidiaries
will continue to operate profitably, or that prior trends will be indicative of
future results of operations. The Company expects that its operating results
will fluctuate in the future as a result of factors such as increases in
competition, significant acquisitions, currency fluctuations, political changes,
overall domestic and international economic conditions, and other circumstances
that may not be foreseeable at this time. The Registrant will have no control or
influence over many of these factors.
MANAGEMENT OF GROWTH
The Registrant has experienced, and is currently experiencing, a period
of rapid growth which has placed, and could continue to place, a significant
strain on the resources of the company. In order to support the growth of its
business, the Registrant plans to significantly expand its level of operations
during 1999. If the Registrant's management is unable to manage growth
effectively, the Registrant's operating results could be adversely affected.
RISKS ASSOCIATED WITH POTENTIAL ACQUISITIONS
In connection with the Registrant's plan to grow its existing markets
and expand into new markets, the Registrant intends to acquire existing
companies and convert or integrate such companies' existing operations and
products with the Registrant's operations and products. If the Registrant does
enter into any such acquisition transactions, the Registrant does not intend to
seek shareholder approval. Therefore, the shareholders of the Registrant may not
have the ability to review the financial statements of the acquisition candidate
or to vote on the acquisition. Any such acquisition could substantially dilute
the ownership interest of the existing shareholders.
The Registrant may compete for acquisition and expansion opportunities
with companies that have significantly greater financial and other resources.
There can be no assurance that the Registrant will be able to locate or acquire
suitable acquisition candidates, or that any operations that are acquired can be
effectively and profitably integrated into the
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Registrant's existing operations. Additionally, although acquisitions will be
designed to increase the Registrant's long-term profitability, they may
negatively impact the Registrant's operating results, particularly during the
periods immediately following an acquisition, as a result of capital funding
requirements, the dedication of management resources that may temporarily
detract attention from other operations, difficulties of combining research and
development and sales and marketing efforts, the necessity of coordinating
geographically separated organizations, and difficulties integrating personnel
with disparate business backgrounds and combining different corporate cultures.
COMPETITION
The information technology industry is highly competitive. The industry
includes major domestic and international companies, many of which have
financial, technical, marketing, sales, distribution and other resources
substantially greater than those of the Registrant and its subsidiaries.
Although the Registrant generally competes in specialty sectors of the
information technology industry where competition is currently less intense, the
Registrant expects competition in each of these sectors to increase. As
competition increases, competitors can be expected to aggressively price their
products and offer new products and services not currently offered by the
Registrant or its subsidiaries. Emergence of new competitors, particularly those
offering lower cost products, enhancements and/or additional features, may
impact margins and intensify competition in new markets.
DEPENDENCE ON KEY PERSONNEL
The Registrant's success depends to a significant degree upon the
continuing contributions of its key management, sales, marketing, R&D and
manufacturing personnel, many of whom would be difficult to replace. In
particular, the Registrant's success depends on the executive management of
Wyse, Saracen, ISL and Premier. The Registrant does not have employment
contracts with most of its key personnel. The Registrant believes that its
future success will depend in part upon its ability to attract and retain highly
skilled hardware and software engineers, and management, sales and marketing
personnel. Competition for such personnel is intense, and there can be no
assurance that the Registrant will be successful in attracting and retaining
such personnel. Failure to attract and retain key personnel could have a
material adverse effect on the Registrant's business, operating results and
financial condition.
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NO ASSURANCE OF PUBLIC MARKET; POTENTIAL VOLATILITY OF STOCK PRICE
There currently exists only a limited public trading market for the
Registrant's common stock. Price and volume quotations are currently reported on
the OTC Bulletin Board, but there can be no assurance that an active trading
market will be sustained. The market price of the common stock could be subject
significant fluctuations in response to operating results and other factors,
many of which are not within the control of the Registrant. In addition, in
recent years the stock market in general, and the market for shares of small
capitalization stocks in particular, have experienced extreme price and volume
fluctuations that often have been unrelated or disproportionate to the operating
performance of affected companies. These fluctuations, as well as general
economic and market conditions, may adversely affect the market price of the
common stock.
EFFECTS OF POSSIBLE ISSUANCE OF PREFERRED STOCK
The Registrant's Articles of Incorporation do not presently authorize
the issuance of preferred stock. The rights of the holders of common stock will
be subject to, and may be adversely affected by the rights of the holders of any
preferred stock that may be authorized and issued in the future. The Registrant
has no present plans to authorize and issue any shares of preferred stock. Any
issuance of preferred stock would make it more difficult for a third party to
acquire, or could discourage a third party from acquiring, a majority of the
outstanding voting stock of the Registrant.
RISKS OF INTERNATIONAL BUSINESS
The Registrant through its subsidiaries currently has significant
operations abroad and plans to expand its foreign operations. Although senior
management of the Registrant and its subsidiaries have significant experience
managing international operations, the Registrant has limited experience in some
of the foreign markets in which its subsidiaries operate. International
expansion efforts may strain the Registrant's management and other resources.
Any failure of the Registrant to expand in an efficient manner or to manage its
dispersed organization could have a material adverse impact on the Registrant's
business and financial results. Other risks that will be faced by the Registrant
in its international business include potentially costly regulatory
requirements; unexpected changes in regulatory requirements; application of
foreign law; fluctuations in currency exchange rates (which could materially and
adversely affect the Registrant's results of operation and, in addition, may
have an adverse effect on demand for the Registrant's products abroad); tariffs
or other barriers; difficulties in staffing and managing foreign operations;
political and economic instability;
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difficulties in accounts receivable collection; extended payment terms; and
potentially negative U.S. and foreign tax consequences. These factors could have
an adverse impact on the Registrant's business and financial results in the
future or require the Registrant to modify its current business practices.
The Registrant does transact all of its business in foreign currencies
and the conversions are accounted for in the financial statements.
SUBSTANTIAL FUTURE CAPITAL NEEDS; NO FUNDING COMMITMENTS
Expansion of the Registrant's business, including acquisitions, may
require a commitment of substantial funds. To the extent that the internally
generated funds are insufficient to fund the Registrant's expansion, it may be
necessary for the Registrant to seek additional funding, either through
collaborative arrangements or through public or private financing. The
Registrant has no current commitments or arrangements with respect to, or
readily available sources of, additional funding. There can be no assurance that
additional funds are raised by issuing equity securities, dilution to the
existing shareholders will likely result. If adequate funds are not available,
the Registrant's business could be adversely affected.
DEPENDENCE ON PROPRIETARY TECHNOLOGY; LACK OF PATENTS AND
PROPRIETARY PROTECTION; RISKS OF THIRD PARTY INFRINGEMENT CLAIMS
The Registrant and its subsidiaries presently have no patents with
respect to their proprietary technologies. Instead, the Registrant and its
subsidiaries currently rely upon copyright and trademark laws, trade secrets,
confidentiality procedures and contractual provisions to protect their
proprietary products. All of these afford only limited protection. Accordingly,
there can be no assurance that the Registrant's measures to protect its current
proprietary rights will be adequate to prevent misappropriation of such rights
or that the Registrant's competitors will not independently develop or patent
technologies that are substantially equivalent or superior to the Registrant's
technologies. Additionally, although the Registrant believes that its products
and technologies do not infringe upon the proprietary rights of any third
parties, there can be no assurance that third parties will not assert
infringement claims against the Registrant. Similarly, infringement claims could
be asserted against products and technologies which the Registrant licenses, or
has the rights to us, from third parties. Any such claims, if proved, could
materially and adversely affect the Registrant's business and results of
operations. In addition, though any such claims may ultimately prove to be
without merit, the necessary management attention to, and legal costs associated
with,
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litigation or other resolution of such claims could materially and adversely
affect the Registrant's business and results of operations.
RAPID OBSOLESCENCE AND TECHNOLOGICAL CHANGE
The market for information technology products and services is
characterized by rapidly changing technology, frequent introductions of new
products and evolving industry standards which result in product obsolescence
and short product life cycles. Accordingly, the Registrant's success is
dependent upon its ability to anticipate technological changes in the industry
and to continually identify, obtain and successfully market new products and
services that satisfy evolving technologies, customer preferences and industry
requirements.
There can be no assurance that competitors will not market products and
services which have perceived advantages over those of the Registrant and its
subsidiaries or which render products and services to be offered by the
Registrant and its subsidiaries obsolete or less marketable.
NO DIVIDENDS ON COMMON STOCK
The Registrant has not previously paid any cash or other dividends on
its common stock and does not anticipate payment of any dividends for the
foreseeable future. The Registrant anticipates retaining its earnings to finance
its operations, growth and expansion.
CERTAIN UNITED STATES FEDERAL INCOME TAX RISKS
It is possible that based on stock ownership and/or types of income,
the Registrant may be classified as a passive foreign investment company, a
controlled foreign corporation, a foreign personal holding company or a personal
holding company for United States federal income tax purposes. Under the special
rules that apply to such companies, United States residents may be required to
include certain amounts in income before it is actually distributed to them.
Although the Registrant intends, to the extent consistent with its other
business goals, to operate in a manner that will minimize the adverse effects of
such provisions, if applicable, no assurance of such a result can be given.
Therefore, each shareholder should consult his or her own tax advisor with
respect to the tax consequences to him or her of the ownership and disposition
of the Registrant's common stock, including the applicability and effect of
federal, state, local and foreign tax laws and of changes in applicable tax
laws.
- 16 -
<PAGE>
YEAR 2000 SOFTWARE COMPLIANCE ("MILLENNIUM BUG")
Many currently installed computer systems and software products are
coded to accept only two digit entries in the date code field and cannot
distinguish 21st century dates from 20th century dates. As a result, many
software and computer systems, including machines controlled by microprocessors,
may need to be upgraded or replaced in order to comply with such "Year 2000"
requirements.
In general, the Registrant's operating subsidiaries are reliant on
software developed internally. The Registrant utilized third-party equipment and
software that may not be Year 2000 compliant. For this reason, the Registrant
has implemented a four step plan to address its Year 2000 issues, consisting of
(i) assessing Year 2000 readiness; (ii) remediating non-compliant hardware and
software; (iii) testing remediated hardware and software; and (iv) certifying
Year 2000 compliance. Personnel from each operating subsidiary have been
involved in the process. Senior management of the Registrant is coordinating the
effort. Communications with customers and suppliers to determine their Year 2000
issues are an integral part of the program. The Registrant has reviewed all
vendor contracts and has requested written certification from each vendor that
its products are Year 2000 complaint.
Assessment activities are estimated at approximately 95% complete.
Assessment data is continuously updated as new information becomes available.
Overall remediation efforts are estimated at 90% complete.
Because the assessment process is not yet complete, the Registrant
cannot yet accurately estimate the costs and risks that will be associated with
Year 2000 assessment and remediation. As of the date of this report, the
Registrant has not identified any costs associated with the necessary corrective
efforts. It is probable that costs may materialize as the Registrant collects
further assessment data. Costs for Year 2000 compliance are not being accounted
for separately. Much of the cost is being accounted for as part of normal
operating budgets. Overall, the costs are not expected to have a significant
effect on the Company's consolidated financial position or results of
operations.
In the event that any of the Registrant's significant suppliers or
customers do not successfully and timely achieve Year 2000 compliance, the
Registrant's business or operations could be adversely affected. This could
result in system failures or generation of erroneous information and could cause
significant disruption of business activities. In the event the Registrant does
not fully identify and correct all Year 2000 problems in the
- 17 -
<PAGE>
products marketed by its subsidiaries, those subsidiaries could become subject
to warranty claims or returns, which could have an adverse effect on financial
performance. Moreover, the Registrant's subsidiaries could become subject to
warranty claims, with or without merit, returns and/or increased customer
support expenses if the computer systems of customers are not able to properly
integrate the Registrant's products due to customers' internal Year 2000
problems. Finally, Year 2000 problems could have a ripple effect through world
economies which could adversely affect the demand for some or all of the
Registrant's products and services.
The Registrant intends as part of the certification process to have
each of its operating subsidiaries perform a Year 2000 "dry run," where the
dates on all computers and microprocessor-controlled equipment are set ahead to
a date within the year 2000, and the Registrant hopes that such dry runs will
identify all remaining internal Year 2000 issues before problems occur. The
company will perform the dry run on a subsidiary by subsidiary basis and will be
completed before the end of October, 1999. These procedures will not, however,
identify external Year 2000 problems, and they will not provide any information
as to how Year 2000 problems throughout world economies may affect the
Registrant. The Registrant intends to create a contingency plan to address these
latter types of risks, but it has not yet done so.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS.
The Registrant is involved in the computer software and related
activities and provides comprehensive, individually tailored services including
software, hardware, networking and financial solutions to its large user base.
The Registrant has large recurring income and plans to increase this income
through an aggressive acquisition policy.
The financial settlements have been prepared on the basis that The Wyse
Group PLC. is the predecessor entity (the only entity with operations at the
time of its acquisition on July 13, 1998). As such, the balance sheet as at
December 31, 1997 is that of The Wyse Group plc. The statement of operations for
the years ended December 31, 1996 and 1997 and period to June 30, 1998 are the
operating results of The Wyse Group PLC.
The Registrant's growth over the last ten (10) months has been through
acquisition. For the period from July 1, 1998 to April 30, 1999, the Registrant
has made five major acquisitions with estimated gross annualized revenues of $20
million. Given the timing of each acquisition the results of the company, as set
out below, do not reflect the total activity of the Registrant as it currently
stands. Only that part of each subsidiary results
- 18 -
<PAGE>
that refer to the post acquisition period are reflected in the results of the
company.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
Certain statements contained in this report regarding matters that are
not historical facts are forward-looking statements. Because such forward-
looking statements include risks and uncertainties, actual results may differ
materially from those expressed in or implied by such forward-looking
statements. Factors that could cause actual results to differ materially
include, but are not limited to, competition, fluctuations in currency exchange
rates, the demand for the Registrant's products and services internationally,
especially in the United Kingdom and Ireland, and other risk factors identified
from time to time in the Registrant's filings with the Securities and Exchange
Commission. The Registrant urges readers to review the risk factors listed in
this report on Page 13.
The Registrant undertakes no obligation to release publicly any
revisions to forward-looking statements to reflect events or circumstances after
the date of this report or to reflect the occurrence of unanticipated events.
YEAR TO DECEMBER 31, 1998
The following table sets out the results for the period covered, the
relative percentages that certain income and expense items bear to revenues:
<TABLE>
<CAPTION>
1998 1997 1996
---- ---- ----
AMOUNT % AMOUNT % AMOUNT %
------ - ------ - ------ -
<S> <C> <C> <C> <C> <C> <C>
Net Sales 10,403,131 100 2,002,210 100 2,726,278 100
Cost of Sales 7,527,519 72 1,256,510 63 2,129,607 78
Gross Profit 2,875,612 28 745,700 37 596,680 22
Selling, general
and administration
expenses 2,118,646 20 681,785 34 482,667 18
Other income 72,205 1 3,677 0 (1,581) (.06)
Income before
</TABLE>
- 19 -
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
taxes 829,171 6 67,592 3 112,432 4
Income tax
provision 242,912 2 22,121 1 39,204 1
INCOME FORM
CONTINUING
OPERATIONS 586,259 4 45,471 2 73,228 2.9
BASIC
EARNINGS PER 0.14 0.08 0.12
SHARE
DILUTED
EARNINGS PER
SHARE 0.06 0.08 0.12
</TABLE>
The Registrant reported a consolidated net income of $586,259 for the
year ended December 31, 1998 as compared with $45,471 in 1997 and $73,228 in
1996. The significant increase in net income is because of the acquisitions of
ISL and Saracen in October 1998 and Premier in December 1998.
REVENUES
Net sales for the twelve (12) months were $10,403,131 as compared with
$2,002,210 in 1997 and $2,726,287 in 1996. In 1997 and 1996 the net sales
related only to Wyse. The 208% increase in net sales from 1997 to 1998 reflects
the inclusion of net sales from the three acquisitions made during the year of
ISL, Saracen and Premier.
COST OF GOODS SOLD
Cost of goods sold was $7,527,519 or 72% of sales. This is compared
with $1,256,510 or 63% of sales in 1997 and $2,129,607 or 86% of sales in 1996.
The inclusion of the figures for ISL, Saracen and Premier account for the
increase in the level of cost of sales and in the increased percentage as
against net sales.
OPERATING EXPENSES
Marketing, Selling, General and Administration expenses were $2,118,646
or 20% of sales as against $681,785 or 34% of sales in 1997 and $482,667 or 18%
of sales. With the inclusion of the ISL, Saracen and
- 20 -
<PAGE>
Premier during 1998, the operating expenses increased by 42% on 1997 and 79% on
1996.
EARNINGS PER SHARE
Basic earnings per share was $.14 for the year ended December 31, 1998.
All of which was derived from normal operations. Diluted earnings per share was
$.06.
LIQUIDITY AND CAPITAL RESOURCES
At December 31, 1998, the company had cash of $1,070,492. During the
period to December 31, 1998, the company raised through sales of its own stock
$2,605,848. It acquired Saracen for $1,485,000 cash, ISL for $561,000 cash and
Premier for $1,375,292 of which $245,000 was paid as a deposit and the balance
of $932,620 was paid after the year end.
NINE MONTHS TO SEPTEMBER 30, 1999
The following table sets out the results for the period covered, the
relative percentages that certain income and expense items bear to revenues:
<TABLE>
<CAPTION>
UNAUDITED AUDITED
1999 1998
AMOUNT % AMOUNT %
------ - ------ -
<S> <C> <C> <C> <C>
Net Sales 25,857,760 100 7,802,348 100
Cost of Sales 13,562,498 52 5,645,639 72
Gross Profit 12,295,262 48 2,156,709 28
Selling, general
and administration
expenses 9,182,651 36 1,533,073 20
Goodwill write off 510,099 2 -0-
Exceptional gain on
Disposal 297,000 1 -0-
Income before
taxes 2,899,512 13 621,848 8
</TABLE>
- 21 -
<PAGE>
<TABLE>
<S> <C> <C> <C> <C>
Income tax
provision 623,545 2 6,806 .04
INCOME FORM
CONTINUING
OPERATIONS 2,275,967 9 439,664 6
BASIC
EARNINGS PER
SHARE 0.17 0.11
DILUTED
EARNINGS PER
SHARE 0.13 0.05
</TABLE>
The Registrant reported a consolidated net income of $2,275,967 for the
nine months ended September 30, 1999 as compared with $439,664 in the same
period for 1998. The significant increase in net income is because the net
income in the quarter ended March 1998 contains only the income of Wyse.
REVENUES
Net sales for the nine (9) months were $25,857,760 as compared with
$7,802,348 in the same period for 1998. In 1998 the net sales related only to
Wyse.
COST OF GOODS SOLD
Cost of goods sold was $13,562,498 or 52% of sales. This is compared
with $5,645,639 or 72% of sales in the same period for 1998. The inclusion of
the figures for ISL, Saracen and Premier account for the increase in the level
of cost of sales and in the decrease percentage as against net sales reflecting
the higher gross margins obtained for the sale of software products and related
services.
OPERATING EXPENSES
Marketing, Selling, General and Administration expenses were $9,182,651
or 36% of sales as against $1,533,073 or 20% of sales in the same period for
1998.
- 22 -
<PAGE>
EXCEPTIONAL GAIN
This profit of $297,000 arose on the sale of a software product owned
by Premier. The product revenues in 1999 were $25,500 and in 1998 were $37,680.
This product did not form a material part of the Premier portfolio.
EARNINGS PER SHARE
Basic earnings per share was $0.17 for the nine months to September 30,
1999. $0.13 of which was derived from normal operations and $0.04 was derived
for the exceptional gain. Diluted earnings per share was $.13.
LIQUIDITY AND CAPITAL RESOURCES
At September 30, 1999, the company had cash of $344,467. During the
nine months to September 30, 1999, the Registrant raised through sales of its
own stock, $500,000 the balance of $982,620 for the acquisition of Premier.
Management believes that current internal cash flows together with
available cash, available credit facilities or, if needed, the proceeds from the
sale of additional equity, will be sufficient to support anticipated capital
spending and other working capital requirements for the foreseeable future.
The Registrant expects to continue its strategy of seeking acquisition
opportunities within its target profile of companies with significant recurring
revenues, market leadership in a mission critical area of information technology
and large user bases. There can be no assurance that any such acquisition
opportunities will be available on terms acceptable to the Registrant, or that
any such acquisitions will ultimately be consummated. If any such acquisitions
are consummated, they could result in the issuance of significant amounts of
equity securities that would dilute the interests of existing shareholders. Such
acquisitions could also cause the Registrant to incur commitments for capital
expenditures in excess of its cash in hand, either for the purchase price or for
the target's operational needs, or both. The Company has not at this time
identified any source for such capital if it were to be required.
IMPACT OF RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
SFAS No. 133, "Accounting for derivative instruments and Hedging
Activities" requires companies to record derivatives on the balance sheet as
assets or liabilities, measured at fair market value. Gains or losses results
from changes in the values of those derivatives are accounted for depending
- 23 -
<PAGE>
on the use of the derivative and whether it qualifies for hedge accounting. The
key criterion for hedge accounting is that the hedging relationship must be
highly effective in achieving offsetting changes in fair value or cash flows.
SFAS No. 133 is effective for fiscal years beginning after June 15, 1999.
Management believes that the adoption of SFAS No. 133 will have no material
effect on its financial statements.
SOP 98-5, "Reporting on the Cost of Start-Up Activities," requires that
the costs of start-up activities, including organization costs, be expensed as
incurred. This statement is effective for financial statements issued for fiscal
years beginning after December 15, 1998. Management believes that the adoption
of SOP 98-5 will have no material effect on its financial statements.
ITEM 3. DESCRIPTION OF PROPERTY.
The Registrant's principal office is located at Camden Lock, South Dock
Road, Dublin 4, Ireland which is also the principal office of the Premier
Computer Group, a company acquired by the Registrant in December 1998. The
office is a modern leasehold building and the Registrant occupies building of
7,000 square feet. The lease expires in June 2028 with an exit clause in 2004
and every five (5) years from then without penalty. The quarterly payments are
$31,725 and escalate at 5 year intervals. The next review is due in 2003.
The Registrant owns a property in Uttoxetter, England from where
Saracen operates. This is a listed building that has ben recently modernized and
converted into offices. Saracen Computer services uses the full building of
5,000 square feet. There is no mortgage on this building.
Details of other leased properties are as follows:
<TABLE>
<CAPTION>
SUBSIDIARY PROPERTY EXPIRATION DATE LEASE TERMS
- ---------- -------- --------------- -----------
<S> <C> <C> <C>
Wyse Group PLC. Chiltern Court June 2002 $12,375 per
Chesham, England quarter
Information Crown House, June 2000 $28,050 per
Support Limited Toutley Road quarter
Reading, England
Premier Vet Dublin Lane, One month renewable $4,950
Edinbrough, for the following monthly
Scotland month
</TABLE>
- 24 -
<PAGE>
<TABLE>
<S> <C> <C> <C>
Premier Computer 62 Heather Road 2004 $25,650 per
Group Hardware Sandyford year payable
Division Industrial Estate quarterly in
Dublin, Ireland advance
</TABLE>
All leased and owned space is considered adequate for the operation of
Integrity Holdings business, and no difficulties are foreseen in meeting any
future space requirements.
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The following table sets forth information as to the shares of common
stock owned as of June 1, 1999:
I Each person who in so far as the Registrant has been able to
ascertain beneficially owns more than five percent (5%) of the
outstanding 12,356,311 shares of the Registrant.
II Each director.
III Each of the officers named in the summary compensation table.
IV All the directors and officers as a group.
Unless otherwise indicated in the footnotes below on the table as
subject to community property laws where applicable, the persons as to whom the
information is given has sole investment power over the shares of common stock
shown as beneficially owned.
<TABLE>
<CAPTION>
NAME NUMBER PERCENT
---- ------ -------
<S> <C> <C>
1. Paul B. Nagle 5,231,902 42.34%
2. David P. Nagle 4,698,500 38.03%
3. Paul C. Carroll 605,000(1) 4.9%
4. Kenneth F. Butler 200,000(2) 1.6%
5. Jeremy Hall 60,000 .05%
6. Michael Foley 50,000 .6%
</TABLE>
- 25 -
<PAGE>
(1) Includes 380,000 shares of common stock subject to options, which are
exercisable within 70 days of the date hereof.
(2) Includes 175,000 shares of common stock subject to options, which are
exercisable within 70 days of the date hereof.
ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS.
<TABLE>
<CAPTION>
SERVED
NAME AGE POSITION TERM SINCE
---- --- -------- ---- -----
<S> <C> <C> <C> <C>
1. Kenneth Butler 59 President and Director 1 yr. 07/98
2. Paul B. Nagle 40 Chief Executive 1 yr. 06/99
Officer and Director
3. Paul C. Carroll 38 Chief Financial 1 yr. 07/98
Officer/Secretary
and Director
4. Michael Foley 58 Chief Development Officer
and Director 1 yr. 07/98
5. Jeremy Hall 34 Director 1 yr. 10/98
</TABLE>
KENNETH BUTLER
Mr. Butler, age 59, gained over 35 years of experience in computer
software development throughout his career with the Powell Duffryn Group where,
during his twenty years on the Board, he was also involved in the acquisition,
development and disposal of companies, both in the United Kingdom and overseas.
In addition to his role as Chairman of Integrity Holdings, he is currently with
Kvaerner, where he holds a Board position involved with business system
development for the Kvaerner Construction Group, based in the United Kingdom,
but operating worldwide. Mr. Butler has held this position for in excess of 2
years.
PAUL B. NAGLE
Mr. Nagle, age 40, has been involved in the IT services industry at an
executive level for many years in Ireland, UK and South Africa. He was managing
director of Multisoft South Africa, specializing in identifying and
restructuring target computer software businesses. He was also managing director
of Brilliant Business Systems, part of a large technology group listed
- 26 -
<PAGE>
on the Johannesburg stock exchange. He has extensive international
experience both in financial services and software services.
PAUL C. CARROLL
Mr. Carroll, age 38, has run his own accountancy and international
business consultancy practice for the past 15 years during which time he
has gained considerable experience in mergers and acquisitions, particularly
in the computer industry. Mr. Carroll has worked on financial projects
throughout the world including, Europe, USA, Russia and the former Soviet
Union. Prior to the commencement of Mr. Carroll's accountancy practice, he
was the Chief Financial Officer of a leading finance house in Dublin, Ireland.
Mr. Carroll was educated in Dublin, Ireland, qualified as a Chartered Certified
Accountant (FCCA) in 1984, is an Associate of the Institute of Arbitrators
and a Fellow of the Institute of Directors. Mr. Carroll sold his accountancy
practice in 1998 to take up the CFO position with Integrity Holdings.
MICHAEL FOLEY
Mr. Foley, age 58, has in excess of 35 years experience as a member of
the senior management team with IDA Ireland and IDI Ireland in company
acquisitions and development of new companies. Since 1997, he has been retained
by OECD to provide policy advice and technical assistance in the area of
investment promotion. He has also been an advisor to the Saudi Arabian
Government on inward investment. Mr. Foley was educated in Galway, Ireland and
he earned a Bachelor of Arts and a Bachelor of Commerce from University College
Galway in 1961 and a Masters degree from University College Dublin in 1982.
JEREMY HALL
Mr. Hall studied for a degree in Accountancy and Financial Control at
Sheffield Hallam University in 1983 before going to work for a major software
manufacturer for two and one half years. He started Wyse at the age of 24 and
has been at the company since then.
ITEM 6. EXECUTIVE COMPENSATION.
Mr. Paul B. Nagle, the Chief Executive Officer and Mr. Paul C. Carroll,
the Chief Financial Officer are the only full time executives of the Registrant
and in receipt of a salary. Mr. Jeremy Hall is the Chief Executive Officer of
the Wyse Group PLC. and receives a salary from that company.
- 27 -
<PAGE>
Both Kenneth Butler and Michael Foley are non-executive officers and
attend quarterly board meetings and are paid their direct expenses for attending
these meetings. They receive no other compensation in their capacity as officers
of the company.
SUMMARY COMPENSATION TABLE
There was no executive or director who received compensation in excess
of $100,000 for the year December 31, 1998, 1997 or 1996.
The following sets forth information concerning all cash and non-cash
compensation to be awarded to the companies officers of the company in excess of
$100,000 for the year to December 31, 1999:
<TABLE>
<CAPTION>
OTHER ANNUAL
OFFICER SALARY COMPENSATION
------- ------ ------------
<S> <C> <C>
1. Paul B. Nagle $120,000(3) -0-
2. Paul C. Carroll 115,500 14,400
</TABLE>
(3) Employment commenced on June 1, 1999.
OFFICER SHARE OPTIONS DETAILS
<TABLE>
<CAPTION>
EXERCISE EXPIRATION
OFFICER OPTIONS % OF TOTAL PRICE DATE
------- ------- ---------- ----- ----
<S> <C> <C> <C> <C>
1. Paul B. Nagle -0- -0- -0- -0-
2. Paul C. Carroll 600,000 12.7% $1.00/Share 6/03
</TABLE>
OFFICER SHARE OPTIONS VALUE
<TABLE>
<CAPTION>
NO. OF VALUE AT QUOTED
OUTSTANDING MARKET PRICE AS
OPTIONS AS OF OF DECEMBER 31,
NO. OF DECEMBER 31 1998
OPTIONS VALUE 1998 EXERCISABLE/ EXERCISABLE/
OFFICER EXERCISED REALIZED UN-EXERCISABLE UN-EXERCISABLE
------- --------- -------- -------------- --------------
<S> <C> <C> <C> <C>
1. Paul B. Nagle -0- -0- -0- -0-
2. Paul C. Carroll 220,000 $1,265,000 380,000/-0- $2,185,000/-0-
</TABLE>
- 28 -
<PAGE>
Mr. Carroll has entered into an employment contract with the
Registrant with an annual compensation package of $129,900.
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
There were no transactions during the last two years, or proposed
transaction, to which the small business issuer was or is to be a party, in
which any director, executive officer, nominee for directorship, security-
holder or immediate family member had a direct or indirect material interest as
defined by Rule 404 of Regulation S-B.
ITEM 8. DESCRIPTION OF SECURITIES.
(a) COMMON STOCK: At August 24, 1999, the Registrant had 12,996,509
shares of the common stock outstanding. Registrant's Certificate of Amendment of
Articles of Incorporation, filed December 8, 1997, authorized the issuance of up
to 100,000,000 of Registrant's common equity shares with a par value of $0.001.
Holders of shares of the common stock are entitled to one vote for each share on
all matters to be voted on by the stockholders. Holders of common stock have no
cumulative voting rights. Holders of shares of common stock are entitled to
share ratably in dividends, if any, as may be declared from time to time by the
Board of Directors in its discretion, from funds legally available therefor.
In the event of a liquidation, dissolution or winding up of the Registrant,
the holders of shares of common stock are entitled to share pro rata all assets
remaining after payments in full of all liabilities. Holders of common stock
have no preemptive rights to purchase the Registrant's common stock. All of the
outstanding shares of common stock are fully paid and non-assessable.
(b) PREFERRED STOCK: The Registrant does not have any authorized or
issued preferred stock.
PART II
ITEM 1. MARKET PRICE AND DIVIDENDS ON REGISTRANT'S COMMON EQUITY
AND OTHER STOCKHOLDER MATTERS.
(a) MARKET INFORMATION: The Registrant's common stock trades on the OTC
Bulletin Board under the symbol INTY. The Registrant's common stock price at
close of business on June 1, 1999 was $5.25 per share.
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<PAGE>
(b) PRICE RANGE: The following is the range of the high and low bids
for the Registrant's common stock for each quarter within the last two fiscal
years as determined by over-the-counter market quotations. These quotations
reflect inter-dealer prices, without retail mark-up, mark-down or commission and
may not represent actual transactions.
<TABLE>
<CAPTION>
1998 1997
---- ----
QUARTER HIGH BID LOW BID HIGH BID LOW BID
- ------- -------- ------- -------- -------
<S> <C> <C> <C> <C>
March -0- -0- -0- -0-
June -0- -0- -0- -0-
Sept. 7.75 5 -0- -0-
Dec. 10.75 7 -0- -0-
</TABLE>
(c) HOLDERS: The Registrant has approximately 173 common stock
shareholders.
(d) DIVIDENDS: The Registrant has never paid a cash dividend. It is the
present policy of the Registrant to retain any extra profits to finance growth
and development of the business. Therefore, the Registrant does not anticipate
paying cash dividends on its common stock in the foreseeable future.
ITEM 2. LEGAL PROCEEDINGS.
The Registrant is not involved in legal proceedings that would have a
material adverse effect on the Registrant's financial conditions or results of
the operations.
ITEM 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS.
The accountant has not resigned, declined to stand for re-election nor
were they dismissed. The principal accountant's report on the financial
statements for the past two years contains no adverse opinion or disclaimer of
opinion, nor were they modified as to uncertainty, audit scope, or accounting
principles. There have been no disagreements with any former accountants on any
matter of accounting principles or practices, financial statement disclosure, or
auditing scope or procedure.
- 30 -
<PAGE>
ITEM 4. RECENT SALES OF UNREGISTERED SECURITIES.
(a) RECENT SALES: The Registrant had the following stock issuances and
granting of stock options on the July 13, 1998 to the founders of the
Registrant. All such shares were sold by the officers and directors of the
Registrant and no underwriters were utilized.
1. 10,000,000 share of common stock at $.01 per share pursuant to a
Phase I, Regulation D, Rule 504 Offering.
2. 6,029,500 share options at an exercise price of $1.00 over the
period of the option.
3. 183,375 shares of restricted common stock for the acquisition of
Wyse.
4. 10,562 shares of restricted common stock for the acquisition of
the share in Saracen Computer Systems Limited.
The Registrant had the following stock issuances on August 20, 1998.
All of these shares were also sold by the officers and directors of the
Registrant and no underwriters were utilized.
5. 450,000 shares of common stock at $2.00 per share to a Phase II,
Regulation D, Rule 504 Offering.
6. 626,257 shares of Regulation S restricted common stock at $2.80
per share.
(b) EXEMPTIONS FROM REGISTRATION: With respect to the issuance of the
10,000,000 common shares listed at Item 12(a)1 and the 450,000 common shares
listed at Item 12(a)4, such issuances were made in reliance on the private
placement exemptions provided by Section 4(2) of the Securities Act of 1933 as
amended, (the "Act"), SEC Regulation D, Rule 504 of the Act ("Rule 504") and
Nevada Revised Statutes Sections 78.211, 78.215, 73.3784, 78.3785 and 78.3791
(collectively the "Nevada Statutes").
With respect to the issuance of the 183,375 common shares listed at
Item 12(a)3 and the 10,562 common shares listed at Item 12(a)4, such issuances
were made in reliance upon the private placement exemptions provided by the Act
and the Nevada Statutes.
The issuance of the 626,257 common shares listed at Item 12(a)6 was
made in reliance upon the private placement exemption provided by
- 31 -
<PAGE>
Regulation S of the Act which limits such issuances to "non-U.S. persons"
and the Nevada Statutes.
In each instance, each of the share purchasers had access to sufficient
information regarding the Registrant so as to make an informed investment
decision. More specifically, each purchaser signed a written subscription
agreement with respect to their financial status and investment sophistication
wherein they warranted and represented, among other things, the following:
1. That he had the ability to bear the economic risks of investing
in the shares of the Registrant.
2. That he had sufficient knowledge in financial, business, or
investment matters to evaluate the merits and risks of the
investment.
3. That he had a certain net worth sufficient to meet the suitability
standards of the Registrant.
4. That the Registrant has made available to him, his counsel and his
advisors, the opportunity to ask questions and that he has been
given access to any information, documents, financial statements,
books and records relative to the Registrant and an investment in
the shares of the Registrant.
ITEM 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Articles of Incorporation and Bylaws of the Registrant provide for
indemnification of the Registrant's officers and directors for liabilities
arising due to certain acts performed on behalf of the Registrant that are
not a result of any act or omission on any such director or officer;
provided, however, that the foregoing provision shall not eliminate or limit
the liability of a director or officer (i) for acts or omissions which
involve intentional misconduct, fraud or a knowing violation of law, or (ii)
the payment of dividends in violation of Section 78.300 of the Nevada Revised
Statutes. Although the state statues allow for indemnification of officers
and directors, the SEC rules however, prohibit indemnification of officers
and directors of publicly held companies.
PART F/S
The following financial statements are submitted pursuant to the
information required by Item 310 of Regulation S-B:
- 32 -
<PAGE>
FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
NO. DESCRIPTION
--- -----------
<S> <C>
FS-1 Integrity Holdings Limited Consolidated
Financial Statements Year Ended
December 31, 1998
FS-2 Integrity holdings Limited Unaudited
Proforma Condensed Combined Financial
statements Year ended December 31,
1998
FS-3 Integrity Holdings Limited Unaudited
Interim Financial Statements Period ended
September 30 1999
FS-4 Premier Computer Group Limited
Directors' Report and Consolidated
Financial Statements For the year ended
31 December 1998
FS-5 Saracen Computer Systems Limited
Directors' Report And Financial
Statements For The Year Ended 31st
October 1997
FS-6 Saracen Computer Systems Limited
Directors' Report And Financial
Statements For The Year Ended 31st
October 1996
FS-7 Information Support Ltd. Financial
Statements 31st March 1998
FS-8 Information Support Limited Report and
Accounts Year Ended 31st March 1997
FS-9 ISL Software Solutions Limited Financial
Statements 31st March 1998
FS-10 Datasoft Limited Directors' Report and
Financial Statements For the year ended
31 December 1998
</TABLE>
- 33 -
<PAGE>
<TABLE>
<S> <C>
FS-11 Datasoft Limited Financial statements For
The Year Ended 31 December 1997
FS-12 Datasoft Limited Directors' Report and
Financial Statements For the period ended
16 July 1999
</TABLE>
PART III
ITEM 1. INDEX TO EXHIBITS.
The exhibits listed and described below in Item 2 are filed herein as
part of this Registration Statement.
ITEM 2. DESCRIPTION OF EXHIBITS.
The following documents are filed herein as Exhibit Numbers 2, 3, 5, 6
and 7 as required by Part III of Form 1-A:
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
----------- -----------
<S> <C>
2 Charter and By-Laws
2.1 Certificate of Amendment of Articles of
Incorporation of Birds Eye, Inc. - Name
Change to Integrity Holdings, Ltd.
2.2 Certificate of Amendment of Articles of
Incorporation of Culver City Studio
Records, Inc.
2.3 Articles of Incorporation of Culver City
Studio Records, Inc.
2.4 By-Laws - Culver City Studio Records,
Inc.
None Instruments Refining the Rights of
Security Holders
None Voting Trust Agreements
6 Material Contracts
</TABLE>
- 34 -
<PAGE>
<TABLE>
<S> <C>
6.1 Share Exchange Agreement between
Jeremy S. Hall, The Wyse Group PLC and
Integrity Holdings, Ltd.
6.2 Share Sale Agreement between David
Meyrick Billings, Deidre Jennifer Swingler,
John David Swingler and Integrity
Holdings, Ltd.
6.3 Business Exchange Agreement between
Business Data Systems Limited,
Information Support Limited and ISL
Software Solutions Limited
6.4 Premier Computer Group Limited and
Integrity Holdings, Ltd.
6.5 Common Stock Options Agreement
(Sample)
6.6 Employment Agreement with Paul Carroll
27 Financial Data Schedule
</TABLE>
SIGNATURES
In accordance with Section 12 the Securities and Exchange Act of 1934 the
Registrant caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized.
INTEGRITY HOLDINGS, LTD.
DATED: December 14, 1999 BY: /s/ Kenneth Butler
---------------------------
KENNETH BUTLER
President
- 35 -
<PAGE>
FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
NO. DESCRIPTION
- --- -----------
<S> <C>
FS-1 INTEGRITY HOLDINGS LIMITED
CONSOLIDATED FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31, 1998
FS-2 INTEGRITY HOLDINGS LIMITED
UNAUDITED PROFORMA CONDENSED
COMBINED FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31, 1998
FS-3 INTEGRITY HOLDINGS LIMITED
UNAUDITED INTERIM FINANCIAL
STATEMENTS PERIOD ENDED
SEPTEMBER 30 1999
FS-4 PREMIER COMPUTER GROUP LIMITED
DIRECTORS' REPORT AND CONSOLIDATED
FINANCIAL STATEMENTS FOR THE YEAR
ENDED 31 DECEMBER 1998
FS-5 SARACEN COMPUTER SYSTEMS LIMITED
DIRECTORS' REPORT AND FINANCIAL
STATEMENTS FOR THE YEAR ENDED
31ST OCTOBER 1997
FS-6 SARACEN COMPUTER SYSTEMS LIMITED
DIRECTORS' REPORT AND FINANCIAL
STATEMENTS FOR THE YEAR ENDED
31ST OCTOBER 1996
FS-7 INFORMATION SUPPORT LTD. FINANCIAL
STATEMENTS 31ST MARCH 1998
FS-8 INFORMATION SUPPORT LIMITED REPORT
AND ACCOUNTS YEAR ENDED 31ST
MARCH 1997
</TABLE>
<PAGE>
<TABLE>
<S> <C>
FS-9 ISL SOFTWARE SOLUTIONS LIMITED
FINANCIAL STATEMENTS 31ST MARCH
1998
FS-10 DATASOFT LIMITED DIRECTORS' REPORT
AND FINANCIAL STATEMENTS FOR THE
YEAR ENDED 31 DECEMBER 1998
FS-11 DATASOFT LIMITED FINANCIAL
STATEMENTS FOR THE YEAR ENDED 31
DECEMBER 1997
FS-12 DATASOFT LIMITED DIRECTORS' REPORT
AND FINANCIAL STATEMENTS FOR THE
PERIOD ENDED 16 JULY 1999
</TABLE>
<PAGE>
EXHIBIT FS-1
INTEGRITY HOLDINGS LIMITED CONSOLIDATED
FINANCIAL STATEMENTS YEAR ENDED
DECEMBER 31, 1998
<PAGE>
INTEGRITY HOLDINGS LIMITED
CONSOLIDATED FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31, 1998
<PAGE>
INTEGRITY HOLDINGS LIMITED
CONSOLIDATED FINANCIAL STATEMENTS FOR THE
YEAR ENDED DECEMBER 31, 1998
TABLE OF CONTENTS Page
Company Information 2
Report of Independent Public Accountants 3
Consolidated Statement of Operations 4
Consolidated Balance Sheet 5
Consolidated Statement of Changes in Stockholders' Equity 7
Consolidated Statement of Cash Flows 9
Notes forming part of the Consolidated Financial Statements 10
1
<PAGE>
INTEGRITY HOLDINGS LIMITED
COMPANY INFORMATION
DIRECTORS (AS AT 1 JULY 1999) Ken Butler (Chairman)
Paul Nagle (President/Chief Executive Officer)
Michael Foley (Chief Development Officer)
Paul Carroll (Chief Financial Officer/Secretary)
Jeremy Hall
SECRETARY Paul Carroll
REGISTERED OFFICE Suite 333,
3838 Camino Del Rio North,
San Diego, California 92108 - 1789,
U.S.A.
MAIN BANKERS Ulster Bank Limited,
Coolock,
Dublin,
Ireland.
INDEPENDENT AUDITORS BDO International,
Chartered Accountants,
& Registered Auditors,
Simpson Xavier Court,
20 Merchants Quay,
Dublin 8.
SPECIAL SECURITIES COUNSEL Carmine Bua,
Suite 333,
3838 Camino Del Rio North,
San Diego, California 92108 -1789,
U.S.A.
2
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
TO THE SHAREHOLDERS OF INTEGRITY HOLDINGS LIMITED
We have audited accompanying balance sheet of Integrity Holdings Limited as of
December 31, 1998 and 1997 and the related statement of operations, statement
of changes in stockholders' equity and cashflows for each of the three years in
the period ended December 31, 1998 which have been prepared under the accounting
policies as set out on pages 12 to 16.
RESPECTIVE RESPONSIBILITIES OF DIRECTORS AND AUDITORS
The company's management are responsible for the preparation of the financial
statements. It is our responsibility to form an independent opinion, based on
our audit, on those statements and to report our opinion to you.
BASIS OF OPINION
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. An audit includes an examination, on a test
basis, of evidence relevant to the amounts and disclosures in the financial
statements. It also includes an assessment of the significant estimates and
judgements made by the directors in the preparation of the financial statements,
and of whether the accounting policies are appropriate to the company's
circumstances, consistently applied and adequately disclosed.
We planned and performed our audit so as to obtain all the information and
explanations which we considered necessary in order to provide us with
sufficient evidence to give reasonable assurance that the financial statements
are free from material misstatements, whether caused by fraud or other
irregularity or error. In forming our opinion we also evaluated the overall
adequacy of the presentation of information in the financial statements.
OPINION
In our opinion, the financial statements referred to above present fairly, in
all material aspects, the financial position of Integrity Holdings Limited at
December 31, 1998 and 1997 and the results of their operations and their cash
flows for each of the three years in the period ended December 31, 1998, in
conformity with generally accepted accounting principles in the United States of
America.
30 JUNE 1999 BDO INTERNATIONAL
SIMPSON XAVIER COURT,
20 MERCHANTS QUAY,
DUBLIN 8
3
<PAGE>
INTEGRITY HOLDINGS LIMITED
CONSOLIDATED STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
NOTE YEAR ENDED YEAR ENDED YEAR ENDED
DECEMBER 31 DECEMBER 31 DECEMBER 31
1998 1997 1996
US$ US$ US$
<S> <C> <C> <C> <C>
NET SALES 10,403,131 2,002,210 2,726,287
Cost of sales 7,527,519 1,256,510 2,129,607
---------- --------- ---------
GROSS PROFIT 2,875,612 745,700 596,680
OPERATING EXPENSES
Administrative expenses (1,651,318) (489,070) (342,694)
Marketing (43,416) (12,858) (9,653)
Research and development (19,307) (5,718) (4,820)
Depreciation (61,516) (31,745) (27,946)
Maintenance and repairs (15,607) (21,963) (13,532)
Goodwill Amortization (58,551) - -
Selling and distribution costs (268,931) (120,431) (84,022)
---------- --------- ---------
TOTAL OPERATING EXPENSES (2,118,646) (681,785) (482,667)
OPERATING PROFIT 756,966 63,915 114,013
Other income (expenses)
Management fee income 74,589 - -
Interest income 9,616 4,260 1,498
Interest expense and debt costs (12,000) (583) (3,079)
---------- --------- ---------
OTHER INCOME 72,205 3,677 (1,581)
PROFIT BEFORE INCOME TAX EXPENSE 829,171 67,592 112,432
Income tax expense 6 (242,912) (22,121) (39,204)
---------- --------- ---------
NET INCOME 586,259 45,471 73,228
---------- --------- ---------
EARNINGS PER SHARE 14 US$ US$ US$
Basic 0.14 0.08 0.12
Diluted 0.06 0.08 0.12
Weighted Average number of
shares outstanding:
- - Basic 4,132,132 594,450 594,450
- - Diluted 9,514,561 594,450 594,450
</TABLE>
4
<PAGE>
INTEGRITY HOLDINGS LIMITED
CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
NOTE AS AT As at
DECEMBER 31 December 31
1998 1997
US$ US$
<S> <C> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents 1,070,492 91,473
Receivables 5,875,636 499,530
Inventories 8 207,016 -
Income tax refund receivable 37,215 4,113
---------- --------
TOTAL CURRENT ASSETS 7,190,359 595,116
PROPERTY AND EQUIPMENT AT COST 9
Computer Equipment 227,324 21,726
Office Equipment 497,865 -
Motor Vehicles 392,447 89,091
Improvements to premises 13,750 -
Land & Buildings 306,127 11,803
---------- --------
1,437,513 122,620
Less, accumulated depreciation and amortisation (145,000) (83,484)
---------- --------
Net property and equipment 1,292,513 39,136
Goodwill 7 5,495,209 -
---------- --------
TOTAL ASSETS 13,978,081 634,252
---------- --------
</TABLE>
5
<PAGE>
INTEGRITY HOLDINGS LIMITED
CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
AS AT As At
DECEMBER 31 December 31
1998 1997
LIABILITIES AND STOCKHOLDERS' EQUITY US$ US$
<S> <C> <C>
CURRENT LIABILITIES
Current instalments on capital leasing 191,025 -
Bank loan and overdraft 140,410 14,210
Accounts payable 3,102,411 177,381
Other creditors 380,436 149,342
Accruals and deferred income 3,161,856 32,495
Other taxes and social welfare 711,221 47,722
Taxation 301,635 22,212
Amount due for subsidiary acquisition 3 968,620 -
---------- -------
TOTAL CURRENT LIABILITIES 8,957,614 443,362
---------- -------
LONG TERM CAPITAL LEASE 206,058 -
SHAREHOLDERS' EQUITY
Common stock
1998: 100,000,000 shares authorised, at
$0.001 par value; issued and outstanding
12,451,405 12,357 -
( 1997: 594,450 shares authorised at
US$0.001 par value; issued and
outstanding 594,450) - 594
Capital in excess of par value 4,453,064 75,966
Accumulated net income 673,911 104,452
Accumulated other comprehensive income 167,077 9,878
Receivable from exercise of stock options (492,000) -
---------- -------
4,814,409 190,890
---------- -------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY 13,978,081 634,252
---------- -------
</TABLE>
6
<PAGE>
INTEGRITY HOLDINGS LIMITED
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
YEARS ENDED DECEMBER 31, 1996, 1997 AND 1998
<TABLE>
<CAPTION>
CAPITAL ACCUMULATIVE
COMMON STOCK IN EXCESS TRANSLATION ACCUMULATED COMPREHENSIVE
ISSUED PAR AMOUNT OF PAR VALUE ADJUSTMENT INCOME INCOME
US$ US$ US$ US$ US$
<S> <C> <C> <C> <C> <C> <C>
BALANCE AS AT JANUARY 1, 1996 50,000 76,560 - - 2,139 -
Net income for the year ended
December 31, 1996 - - - - 73,228 73,228
Currency translation adjustment - - - 4,943 - 4,943
---------
COMPREHENSIVE INCOME 78,171
---------- --------- --------- ----------- ---------- ---------
BALANCE AS AT DECEMBER 31, 1996 50,000 76,560 - 4,943 75,367
---------- --------- --------- ----------- ----------
Net income for the year ended
December 31, 1997 - - - - 45,471 45,471
Currency translation adjustment - - - 4,935 - 4,935
Dividend declared - - - - (16,386)
Recapitalization to Integrity Holdings
Ltd 544,450 (75,966) 75,966 ---------
COMPREHENSIVE INCOME - - - - - 50,406
---------- --------- --------- ----------- ---------- ---------
BALANCE AS AT DECEMBER 31,1997 594,450 (594) 75,966 9,878 104,452
---------- --------- --------- ----------- ----------
</TABLE>
7
<PAGE>
INTEGRITY HOLDINGS LIMITED
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (CONTINUED)
YEARS ENDED DECEMBER 31, 1996, 1997 AND 1998
<TABLE>
<CAPTION>
US $ US $
US $ CAPITAL ACCUMULATED
COMMON PAR IN EXCESS TRANSLATION US $ US $
STOCK AMOUNT OF PAR ADJUSTMENT ACCUMULATED COMPREHENSIVE
ISSUED VALUE INCOME INCOME
<S> <C> <C> <C> <C> <C> <C>
Issuance of common stock for acquisition of The
Wyse Group PLC shares on July 13th, 1998 for
US $1.00 183,375 183 183,192 - - -
Issuance of common stock for cash at $0.01 on
August 28, 1998 10,000,000 10,000 90,000 - - -
Issuance of common stock for cash at $2.00 on
October 23, 1998 450,000 450 899,550 - - -
Issuance of common stock for acquisition of
Saracen Computer Systems Ltd on October 13,
1998 at a fair value of US $7.00 10,562 11 73,923 - - -
Issuance of common stock for acquisition of
Premier Group Limited on December 23, 1998 at
a fair value of US $7.00 147,672 148 1,033,556 - - -
Issuance of common stock on December 7 1998
for cash at $2.80 573,346 479 1,605,369 - - -
Net operating profit for the year ended
December 31, 1998 - - - 586,259 586,259
Exercise of stock options 492,000 492 491,508
Dividend declared - - - - (16,800) -
Currency translation adjustment - - - 157,199 - 157,199
-------
COMPREHENSIVE INCOME - - 743,458
---------- -------- --------- ------- ------- -------
BALANCE AT DECEMBER 31, 1998 12,451,405 12,357 4,453,064 167,077 673,911
---------- -------- --------- ------- -------
</TABLE>
8
<PAGE>
INTEGRITY HOLDINGS LIMITED
CONSOLIDATED STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
YEAR YEAR YEAR
ENDED ENDED ENDED
DECEMBER 31 DECEMBER 31 DECEMBER 31
1998 1997 1996
US$ US$ US$
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Operating profit 586,259 45,471 73,228
NET CASH PROVIDED BY (USED FOR) OPERATING ACTIVITIES:
Amortisation of goodwill 58,551 - -
Loss on sale of fixed assets - 3,436 18,746
Depreciation 61,516 31,745 27,946
CHANGES IN CURRENT ASSETS AND LIABILITIES EXCLUDING
EFFECTS OF ACQUISITIONS
(Increase) in accounts receivable (1,763,961) (153,421) (64,759)
Increase/(decrease) in accounts payable 1,333,725 (1,279,687) 1,297,740
Decrease in inventories - - 16,747
Increase in tax refund due - (4,113) -
------------ ------------ ------------
Net cash generated /(used) from operational activities 276,090 (1,356,569) 1,369,648
------------ ------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES
Capital Expenditure (73,789) (12,832) (44,396)
Proceeds from Sale of property and equipment 34,149 - 7,880
Acquisitions of businesses, net of cash acquired (1,984,650) - -
------------ ------------ ------------
Net cash used in investing activities (2,024,290) (12,832) (36,516)
------------ ------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES
Increase in Loans 49,149 13,038 (25,351)
Proceeds from Common stock issued 2,605,848 - -
Dividends Paid (16,800) (16,368) -
Increase in Bank overdraft 77,051 - -
------------ ------------ ------------
Net cash provided/(used) by financing activities 2,715,248 (3,330) (25,351)
Foreign exchange rate on cash 11,971 (45,898) -
------------ ------------ ------------
NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS 979,019 (1,418,629) 1,348,566
------------ ------------ ------------
Net cash and cash equivalents at beginning of year 91,473 1,510,102 161,536
NET CASH AND CASH EQUIVALENTS AT END OF YEAR 1,070,492 91,473 1,510,102
------------ ------------ ------------
SUPPLEMENTAL INFORMATION
INTEREST PAID (12,000) (583) (3,079)
TAXES PAID (45,511) - -
</TABLE>
9
<PAGE>
INTEGRITY HOLDINGS LIMITED
NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS
1. ORGANISATION
The Company was incorporated under the laws of the State of Nevada on
July 27,1977 with authorised common stock of 100,000 shares at US$0.25
par value with the name of Culver City Studios Records, Inc.
On December 9, 1997 the name of the Company was changed to Birds Eye,
Inc. and the authorised capital stock was increased to 100,000,000
shares with a par value of US$0.001.
On July 13, 1998 10,000,000 shares were issued to the founders of
Integrity for $0.01 per share and 6,279,500 share options with an
exercise price of $1 per share were also granted to the founders in
order to raise capital to purchase the outstanding stock, 594,450
shares of Birds Eye Inc. an inactive public shell with no assets.
The Company has been in the development stage since its inception and
has been engaged in the activity of developing mining properties until
1980 after which the Company was inactive. The company came out of its
development stage in 1998 with its acquisition of the Wyse Group PLC.
On July 13, 1998 the company changed its name to Integrity Holdings
Limited. Integrity Holdings Limited is engaged in the acquisition of
software development and computer services companies.
Beginning in July 1998 the company has made four major acquisitions of
businesses or purchase of business assets. These are:
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------
NAME AND LOCATION BUSINESS ACTIVITY AT THE TIME OF EFFECTIVE DATE OF
ACQUISITION AQUISITION
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C>
The Wyse Group Plc, Computer and Information July 13th, 1998
United Kingdom Technology Leasing Brokerage
- ------------------------------------------------------------------------------------------------------------
Saracen Computer Systems Limited Software applications for October 13th, 1998
United Kingdom industrial cleaning management
- ------------------------------------------------------------------------------------------------------------
Information Support Limited Computer support and hardware October 12th, 1998
United Kingdom maintenance services
- ------------------------------------------------------------------------------------------------------------
Premier Computer Group Limited Software applications for credit December 23rd, 1998
Ireland unions, veterinary and print and
packaging sectors
- ------------------------------------------------------------------------------------------------------------
</TABLE>
2. BASIS OF PRESENTATION OF FINANCIAL STATEMENTS
The financial statements have been drawn up on the basis that The Wyse
Group plc is the predecessor entity (the only entity with operations at
the time of its acquisition on July 1, 1998). As such the balance sheet
as at December 31, 1997 is that of The Wyse Group p1c. The statement of
operations for the years ended December 31, 1996 and 1997 are the
operating results of The Wyse Group p1c.
10
<PAGE>
INTEGRITY HOLDINGS LIMITED
NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS
2. BASIS OF PRESENTATION OF FINANCIAL STATEMENTS (CONTINUED)
The accompanying consolidated balance sheet as at December 31, 1998 and
consolidated statements of operations for the period ended December 31,
1998 include the accounts of Integrity Holdings Limited and each of
it's wholly owned subsidiaries. Inter company transactions have been
eliminated. The financial statements have been prepared in conformity
with U.S. generally accepted accounting principles.
3. ACQUISITIONS
On July 13, 1998 the company acquired Wyse Group plc ('Wyse') a leading
computer leasing company with four offices in the UK and one in
Ireland. Prior to this Integrity Holdings Limited had been a
development stage company. The business combination has been accounted
for under the purchase method. The acquisition cost of $234,000 was
based on the fair value of the assets acquired and was funded by way of
the issue of shares in Integrity Holdings Limited.
On October 13, 1998 the company acquired all of the issued and
outstanding shares of Saracen Computer Systems Limited ("Saracen") a
leading computer software company based in Uttoxeter in the UK. The
business combination has been accounted for under the purchase method.
The results of the company from October 13, 1998 have been included in
the consolidated income statement. The cost of acquisition $1,558,934
was funded by way of a cash payment of $1,485,000 and issue of 10,562
shares in Integrity Holdings Limited at at fair value $7.00 based on
the quoted market price of the company's shares on the date of
acquisition. The goodwill arising on the transaction of $1,229,645 is
being amortised over 10 years.
On October 12, 1998 the company acquired all of the issued and
outstanding shares of Information Support Limited ("ISL") a major
computer support services business based in Wokingham in England with
regional support centres throughout the UK. The ISL is engaged in
providing maintenance services to the computer industry and also
engages in reselling of computer systems. The business combination has
been accounted for under the purchase method. The results of ISL from
October 12, 1998 have been included in the consolidated income
statement. The cost of acquisition was $561,000 which was funded by way
of a cash payment. The goodwill arising on the transaction of
$1,918,717 is being amortised over 10 years.
On December 23, 1998 the company acquired the Dublin based Premier
Computer Group ("Premier") Premier currently comprises of six companies
employing in excess of 250 people in Ireland and in the UK, which
provides software services to the Credit Union, printing and packaging,
cleaning and construction management sectors. The business combination
has been accounted for using the purchase method. The results of
Premier from December 23, 1998 have been included in the consolidated
income statement. The cost of acquisition was $2,261,324 and was funded
by way of a cash payment of $1,227,620 and the issue of 147,672 shares
in Integrity Holdings Limited at at fair value $7.00 based on the
quoted market price of the company's shares on the date of acquisition.
The balance of the purchase price outstanding at December 31, 1998 of
US$ 968,620 has been raised as a liability. The goodwill of $2,405,398
arising on the transaction is being amortised over 10 years.
11
<PAGE>
INTEGRITY HOLDINGS LIMITED
NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS
3. ACQUISITIONS (CONTINUED)
A summary of the acquisitions is as follows:
<TABLE>
<S> <C>
Net Liabilities Assumed (938,502)
Purchase consideration 4,615,258
GOODWILL ARISING 5,553,760
</TABLE>
There were no significant adjustments between fair values and the net
assets acquired.
4. SIGNIFICANT ACCOUNTING POLICIES
ACCOUNTING ESTIMATES
The preparation of consolidated financial statements in conformity with
generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets
and liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements, and the reported amounts of
revenues and expenses during the reported period. Actual results could
differ from those estimates.
REVENUE RECOGNITION
Revenue arising from the sale of hardware products represents invoiced
sales during the period, net of valued added taxation and is recognised
as the products are shipped. Revenue arising from annual maintenance,
support and software contracts is recognised over the period of the
contract.
Deferred income arises when either a portion of a contract period, for
which an invoice has been issued in advance, falls after the year end
or where work invoiced has not been completed.
INVENTORIES
Inventories are stated at the lower of cost or market value using the
first-in first-out (FIFO) convention.
12
<PAGE>
INTEGRITY HOLDINGS LIMITED
NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS
4. SIGNIFICANT ACCOUNTING POLICIES - (CONTINUED)
TANGIBLE FIXED ASSETS
Depreciation is provided at the following annual rates in order to
write off each asset over its estimated useful life:
<TABLE>
<CAPTION>
<S> <C>
Office Equipment 20% on cost
Motor vehicles 25% on cost
Computer equipment 33% on cost
Improvements to premises 20% on cost
</TABLE>
The Land & Buildings are not depreciated as it is considered that the
residual value and life of the property is such that the depreciation
would be immaterial.
INTANGIBLE FIXED ASSETS
The Company classifies as goodwill the cost in excess of fair value of
the net assets acquired in purchase transactions. The company has
adopted the Statement of Financial Accounting Standards No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to be Disposed of".
This statement requires the long-lived assets and certain identifiable
assets to be held and used be reviewed for impairment whenever events
or changes in circumstances indicate the carrying amount of such
assets may not be recoverable. The carrying value of long-term assets
is periodically reviewed by management, and impairment loss, if any,
are recognized when the expected non-discounted future operating cash
flow derived from such assets are less than their carrying value. An
impairment loss is measured by the difference between the carrying
amount of the asset and the fair value of the long lived asset. The
adoption of SFAS No.121 did not have any impact on the financial
position, results of operations, or cash flows of the company.
Goodwill is being depreciated over 10 years.
RESEARCH AND DEVELOPMENT
Research and development costs are expensed as incurred.
13
<PAGE>
INTEGRITY HOLDINGS LIMITED
NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS
4. SIGNIFICANT ACCOUNTING POLICIES - (CONTINUED)
DEFERRED TAXES
The company accounts for its income tax on the liability method, under
which deferred taxes are determined based on the difference between the
financial statements and tax bases of assets and liabilities, using
enacted tax rates in effect for the year in which the difference are
expected to reverse. Valuation allowances are established when
necessary to reduce the deferred tax assets to the amount expected to
be realised.
EARNINGS PER SHARE
Basic earnings per share includes no dilution and is computed by
dividing income available to common shareholders by the weighted
average number of common shares outstanding for the period. Diluted
earnings per share reflect, in periods in which they have a dilutive
effect, the effect of common shares issuable upon exercise of common
stock options.
FOREIGN CURRENCY TRANSLATION
The functional currencies of the Company's foreign subsidiaries are
their local currencies, and accordingly, the assets and liabilities of
these foreign subsidiaries are translated at the rate of exchange at
the balance sheet date. Revenues and expenses have been translated at
the average rate of exchange in affect during the periods. To date, the
Company has not entered into hedging transactions to protect against
changes in foreign currency exchange rates. Other comprehensive income
represents the translation difference arising when the asset and
liabilities, of the company's foreign subsidiaries are translated from
their functional currencies to US$.
STOCK-BASED COMPENSATION
The company applies Accounting Principles Board Opinion ("APB") 25,
"Accounting for Stock Issued to Employees," and related Interpretations
in accounting for all stock option plans. Under APB 25, compensation
cost is recognised for stock options granted at prices below market
price of the underlying common stock on date of grant.
SFAS No. 123, "Accounting for Stock Based Compensation." requires the
Company to provide pro forma information regarding net income as if
compensation cost for the Company's stock options plans had been
determined in accordance with the fair value method prescribed in SFAS
No. 123
14
<PAGE>
INTEGRITY HOLDINGS LIMITED
NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS
4. SIGNIFICANT ACCOUNTING POLICIES - (CONTINUED)
COMPREHENSIVE INCOME
The Company has adopted SFAS No. 130,"Reporting Comprehensive
Income." Comprehensive Income is comprised of net income and all
changes to the statement of stockholders' equity, except those due to
investment by stockholders, changes is paid in capital and
distributions to stockholders.
IMPACT OF RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
SFAS No. 133, "Accounting for derivative instruments and Hedging
Activities" requires companies to record derivatives on the balance
sheet as assets or liabilities, measured at fair market value. Gains or
losses results from changes in the values of those derivatives are
accounted for depending on the use of the derivative and whether it
qualifies for hedge accounting. The key criterion for hedge accounting
is that the hedging relationship must be highly effective in achieving
offsetting changes in fair value or cash flows. SFAS No. 133 is
effective for fiscal years beginning after June 15, 1999. Management
believes that the adoption of SFAS No. 133 will have no material effect
on its financial statements.
SOP 98-5, "Reporting on the Cost of Start-Up Activities," requires that
the costs of start-up activities, including organization costs, be
expensed as incurred. This statement is effective for financial
statements issued for fiscal years beginning after December 15, 1998.
Management believes that the adoption of SOP 98-5 will have no material
effect on its financial statements.
15
<PAGE>
INTEGRITY HOLDINGS LIMITED
NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS
4. SIGNIFICANT ACCOUNTING POLICIES - (CONTINUED)
STATEMENT OF CASH FLOWS
For the purpose of the statements of cash flow, the Company considers
all highly liquid debt instruments and other short-term investments
with an initial maturity of three months or less to be cash
equivalents.
5. UNAUDITED PROFORMA RESULTS OF OPERATIONS
The summarised unaudited pro-forma results of operations as set forth
below for the years ended December 31, 1997 and 1998 assume that the
acquisitions in 1998 occurred as of January 1, 1997.
<TABLE>
<CAPTION>
YEAR ENDED Year ended
DECEMBER 31 December 31
1998 1997
US$ US$
(UNAUDITED) (Unaudited)
<S> <C> <C>
Revenue 22,981,482 15,480,039
Net Income/(loss) (1,428,343) 64,680
Earnings/(loss) Per Share - Basic & Diluted (0.33) 0.07
Weighted Average
Number of Shares in issue 4,379,414 936,059
</TABLE>
16
<PAGE>
INTEGRITY HOLDINGS LIMITED
NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS
6. TAXATION
<TABLE>
<CAPTION>
YEAR ENDED Year ended Year ended
DECEMBER 31 December 31 December 31
1998 1997 1996
US$ US$ US$
<S> <C> <C> <C>
Taxation on the Wyse Group PLC
only at 32% (1997:33%;1996:35%) 242,912 22,121 39,204
------- ------ ------
</TABLE>
The taxation charges represent UK corporation taxation on the results
of the Wyse Group PLC only for each of the three years ended December
31, 1998, 1997 & 1996. No charge to taxation arises for any of the
other companies due to losses incurred. Deferred taxation has not been
provised as management believe it will not crystalise.
7. GOODWILL
<TABLE>
<CAPTION>
DECEMBER 31 December 31
1998 1997
US$ US$
<S> <C> <C>
At beginning of year - -
Goodwill arising on acquisition of
subsidiaries (see note 3) 5,553,760 -
Amortised during the year (58,551) -
-------- ----------
At end of year 5,495,209 -
-------- ----------
</TABLE>
8. INVENTORIES
<TABLE>
<CAPTION>
DECEMBER 31 December 31
1998 1997
US$ US$
<S> <C> <C>
Consumable stocks 9,468 -
Work in progress 2,646 -
Finished goods 188,227 -
Computer equipment 6,675 -
-------- ----------
207,016 -
-------- ----------
</TABLE>
17
<PAGE>
INTEGRITY HOLDINGS LIMITED
NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS
9. TANGIBLE ASSETS
<TABLE>
<CAPTION>
LAND & IMPROVEMENTS OFFICE MOTOR COMPUTER TOTAL
BUILDINGS TO PREMISES EQUIPMENT VEHICLES EQUIPMENT
US$ US$ US$ US$ US$
<S> <C> <C> <C> <C> <C> <C>
Cost
At December 31, 1997 - - 11,803 89,091 21,726 122,620
Additions for the year 306,127 13,750 486,062 303,356 205,598 1,314,893
------- ------ ------- ------- ------- ---------
At December 31, 1998 306,127 13,750 497,865 392,447 227,324 1,437,513
------- ------ ------- ------- ------- ---------
Depreciation
At December 31, 1997 - - 4,583 67,029 11,872 83,484
Charge for the year - - 29,322 18,929 13,265 61,516
------- ------ ------- ------- ------- ---------
At December 31, 1998 - - 33,905 85,958 25,137 145,000
------- ------ ------- ------- ------- ---------
Net Book Value
At December 31, 1998 306,127 13,750 463,960 306,489 202,187 1,292,513
------- ------ ------- ------- ------- ---------
At December 31, 1997 - - 7,220 22,062 9,854 39,136
------- ------ ------- ------- ------- ---------
</TABLE>
18
<PAGE>
INTEGRITY HOLDINGS LIMITED
NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS
11. STOCK OPTIONS
The company does not have a stock option plan. Various stock options
were granted to the founders/promoters of the company on July 14, 1998.
The total number of shares authorised under these various agreements
amounted to 6,279,500. Each option agreement expires on July 13, 2002:
the vesting period is 4 years.
Statement of Financial Accounting Standards ("SFAS") No. 123,
Accounting for Stock-Based Compensation, requires companies to either
(a) record an expense related to its stock option plans based on the
estimated fair value of stock options as of the date of the grant or
(b) disclose pro forma net income and earnings per share data as if the
company had recorded an expense, beginning with options granted in
1995.
The fair value of each option as of the date of grant was computed
using the Black-Scholes pricing model and the following weighted
average assumptions: expected volatility 59%, no dividend, risk free
interest rate of 5% and expected life of four years. The compensation
expense, as computed was nominal and there was no affect on net loss
per share. The options are vested with the founders/promoters on issue
subject to a maximum of 1/3 within 12 months of date of issue; 2/3rd
within 24 months of date of issue, the balance being available
thereafter until the fourth anniversary of date of issue.
A summary of the status of the Company's stock option plans as of
December 31, 1998, 1997 and 1996, and changes during the years ending
on those dates is presented below:
<TABLE>
<CAPTION>
SHARES IN THOUSANDS 1998 1997 1996
------------------- -------------------- ----------------------
WEIGHTED WEIGHTED WEIGHTED
AVERAGE AVERAGE AVERAGE
EXERCISE EXERCISE EXERCISE
SHARES PRICE SHARES PRICE SHARES PRICE
<S> <C> <C> <C> <C> <C> <C>
Beginning of year - $nil - - - -
Granted 6,279 $ 1.00 - - - -
Exercised (492) $ 1.00 - - - -
Outstanding
at end of year 5,787 $ 1.00 - - - -
Exercisable
- at end of year 1,601 $ 1.00 - - - -
- thereafter 4,186 $ 1.00 - - - -
</TABLE>
19
<PAGE>
INTEGRITY HOLDINGS LIMITED
NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS
12. OPERATING SEGMENTS AND GEOGRAPHIC INFORMATION
At December 31, 1998, the Company adopted Statement of Financial
Accounting Standards ("SFAS") No. 131, "Disclosures about Segments of
an Enterprise and Related Information." Prior-period amounts have been
restated in accordance with the requirements of SFAS 131. Segment
accounting policies are the same as policies described in note 1.
BASIS FOR PRESENTATION
The Company operates in the computer and information technology sector
providing services to various industrial sectors in international
markets. The Company is also involved in the provision of financial
services to its user base. The Company has currently four major
subsidiaries operating offering products and services to the following
sectors: print and packing, credit unions, construction and cleaning
management.
The Company manages its businesses based on the nature of products
provided.
The Company evaluates the performance of its businesses based on direct
contribution margin. Direct contribution margin includes R&D,
marketing, and administrative expenses directly attributable to the
segment and excludes certain expenses which are managed outside the
reportable segment. Costs excluded from segment profit are indirect
operating expenses, primarily consisting of selling and corporate
expenses, and income taxes.
The company divides its operations into four operating segments:
Computer and Information Technology Leasing Brokerage (Segment A)
Software applications for industrial cleaning management (Segment B)
Computer support and hardware maintenance services (Segment C)
Software Operations for credit unions, construction and print &
packaging sectors (Segment D)
As the financial statements have been drawn up on the basis that The
Wyse Group plc is the predecessor entity (which operates solely in
Segment A), the income statements for the year ended December 31, 1997
and 1996 solely disclose information for this operating segment.
Segment D relates to Premier Computer Group which was acquired on
December 23, 1998 and as stated in note 3, is consolidated from this
date.
20
<PAGE>
INTEGRITY HOLDINGS LIMITED
NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS
12. OPERATING SEGMENTS AND GEOGRAPHIC INFORMATION (CONTINUED)
Summary operating segment information for the year ended December 31,
1998 is as follows:
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------
SEGMENT SEGMENT SEGMENT SEGMENT AS PER
A B C D FINANCIAL
US $ US $ US $ US $ STATEMENTS
US $
<S> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------
NET SALES 7,943,045 333,030 2,127,056 - 10,403,131
- ------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------
DIRECT CONTRIBUTION 1,808,212 309,368 758,032 - 2,875,612
MARGIN
- ------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------
FIXED ASSET
ADDITIONS 208,364 38,062 437,838 630,629 1,314,893
- ------------------------------------------------------------------------------------------------------------
TOTAL ASSETS 2,220,910 994,740 2,646,405 2,401,989 13,978,081*
- ------------------------------------------------------------------------------------------------------------
</TABLE>
The Company closely monitors the credit worthiness of its customers,
adjusting credit policies and limits as deemed necessary. No single
customer comprised 10% or more of the Company's net sales in 1998, 1997
and 1996.
An analysis of the geographical breakdown indicates :
<TABLE>
<CAPTION>
IRELAND UK ELIMINATED ON CONSOLIDATED
CONSOLIDATION
US$ US$ US$ US$
YEAR ENDED DECEMBER 31, 1998
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------
NET SALES - 10,403,131 - 10,403,131
- ----------------------------------------------------------------------------------------
OPERATING PROFIT - 756,966 - 756,966
- ----------------------------------------------------------------------------------------
NET INCOME - 586,259 - 528,329
- ----------------------------------------------------------------------------------------
IDENTIFIABLE ASSETS - 9,015,650 (532,778) 8,482,872
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
</TABLE>
* The total asset of US$13,978,081 includes goodwill of US$5,495,209
and other assets held by the Parent Company of US$218,828 which have
not been included in the total assets of the reported segments.
All of the activity for the fiscal years ended December 31, 1996 and
1997 occurred in the United Kingdom as these periods represent the
activities of the Wyse Group PLC only (i.e. Segment A)
21
<PAGE>
INTEGRITY HOLDINGS LIMITED
NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS
13. INTERESTS IN SHARES
The directors had interests in the company's shares as follows at
December 31, 1998:
<TABLE>
<CAPTION>
ISSUED SHARES OF
COMMON STOCK AT
US$0.001 EACH
<S> <C>
Paul Carroll 150,000
Ken Butler 25,000
</TABLE>
14. EARNINGS PER COMMON SHARE
The weighted average number of shares used in the diluted 1998
earnings per share calculation has been arrived at as follows:
<TABLE>
<S> <C>
Weighted average number of shares for basic EPS 4,132,132
Adjustment for stock options 5,382,429
WEIGHTED AVERAGE NUMBER OF SHARES FOR DILUTED EPS 9,514,561
</TABLE>
15. COMMITMENTS UNDER OPERATING LEASES
AS AT DECEMBER 31, 1998
<TABLE>
<CAPTION>
US$ US$
Land & Other
Buildings Items
<S> <C> <C>
Operating leases which expire:
Within one year 115,988 238,054
Within 2 to 5 years 48,329 194,079
------- -------
164,317 432,133
------- -------
</TABLE>
The rent expense of the company for the year amounted to US $193,467
(1997 : US $35,531; 1996 :US $22,166)
22
<PAGE>
INTEGRITY HOLDINGS LIMITED
NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS
16. POST BALANCE SHEET EVENTS
ISSUE OF COMMON STOCK
The company made the following additional stock issuances since the
year end
- 125,000 common shares issued on February 12, 1999 at $1.00
per share as per option exercise agreement.
- 366,666 common shares issued on February 26, 1999 at $1.00 per
share as per option exercise agreement
ACQUISITIONS
On March 26 1999, Progress Computer Systems (a wholly owned subsidiary
of the Premier Computer Group which is a wholly owned subsidiary of the
Company) acquired the customer base and software rights of Axon
Veterinary Limited.
Axon supplied software and related information technology services to
the veterinary practices in the United Kingdom and Ireland. Axon has in
excess of 800 customers.
The consideration for Axon was $445,500 in cash. The acquisition was
funded from cash generated from operations.
17. APPROVAL OF CONSOLIDATED FINANCIAL STATEMENTS
These consolidated financial statements were approved by the directors
on 30 June 1999.
23
<PAGE>
EXHIBIT FS-2
INTEGRITY HOLDINGS LIMITED UNAUDITED PROFORMA
CONDENSED COMBINED FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31, 1998
<PAGE>
Integrity Holdings Limited
Unaudited Proforma Condensed Combined
Financial Statements
Year ended December 31, 1998
<PAGE>
INTEGRITY HOLDINGS LIMITED
UNAUDITED PROFORMA CONDENSED COMBINED FINANCIAL STATEMENTS FOR THE YEAR ENDED
DECEMBER 31, 1998
<TABLE>
<CAPTION>
TABLE OF CONTENTS PAGE
<S> <C>
Company Information 1
Basis of Unaudited Proforma Condensed Combined Financial Statements 2
Unaudited Proforma Condensed Combined Statement of Operations for the year ended
December 31, 1998 3
Notes forming part of the Unaudited Proforma Condensed
Combined Financial Statements 4
</TABLE>
<PAGE>
INTEGRITY HOLDINGS LIMITED
COMPANY INFORMATION
<TABLE>
<S> <C>
DIRECTORS Ken Butler (Chairman)
Paul Nagle (President/Chief Executive Officer)
Michael Foley (Chief Development Officer)
Paul Carroll (Chief Financial Officer/Secretary)
Jeremy Hall
SECRETARY Paul Carroll
REGISTERED OFFICE Suite 333,
3838 Camino Del Rio North,
San Diego, California 92108 - 1789.
U.S.A.
BANKERS Ulster Bank Limited,
Coolock,
Dublin,
Ireland.
AUDITORS BDO International,
Chartered Accountants,
& Registered Auditors,
Simpson Xavier Court,
20 Merchants Quay.
Dublin 8.
SPECIAL SECURITIES COUNSEL Carmine Bua
Suite 333,
3838 Camino Del Rio North.
San Diego, California 92108 - 1789.
U.S.A.
</TABLE>
1
<PAGE>
INTEGRITY HOLDINGS LIMITED
UNAUDITED PROFORMA CONDENSED COMBINED FINANCIAL STATEMENTS
The following unaudited proforma condensed combined statements of operations
for the year ended December 31, reflects the proforma condensed combined
statement of operations of Integrity Holdings limited (Integrity or the
Company) giving effect to the proforma adjustments described herein giving
effect to the acquisition of Saracen Limited, Information Support Limited and
The Premier Group which have been accounted for under the purchase method of
accounting.
The unaudited proforma condensed combined income statements give effect to the
transactions as if they had occurred on January 1, 1998. The unaudited
proforma condensed combined statement of operations combine the results of
operations of Integrity, Saracen Limited, Information Support limited and The
Premier Group for the year ended December 31, 1998.
The unaudited proforma combined statements of operations data for Integrity
have been prepared in conformity with US generally accepted accounting
principles.
The unaudited proforma condensed combined financial statements should be read
in connection with the notes thereto and the historical financial statements
of Integrity Holdings Limited together with the related notes thereto included
elsewhere herein as well as the historical financial statements of Saracen
Limited, Information Support Limited and The Premier Group together with the
related notes thereto included elsewhere herein.
The proforma condensed combined statement of operations is not necessarily
indicative of operating results that would have been achieved had the
acquisition of the entire share capital of Saracen Limited, Information
Support Limited and The Premier Group actually been consummated as of the
assumed date, (i.e. January 1, 1998) and should be construed as indicative of
future operations.
2
<PAGE>
INTEGRITY HOLDINGS LIMITED
UNAUDITED PROFORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
PERIOD FROM JANUARY 1, 1998 TO DECEMBER 31, 1998.
<TABLE>
<CAPTION>
INTEGRITY SARACEN LIMITED INFORMATION THE PREMIER NOTE PROFORMA
HOLDINGS LTD SUPPORT LIMITED GROUP ADJUSTMENTS
US$ US$ US$ US$ US$
<S> <C> <C> <C> <C> <C> <C>
TURNOVER 10,403,131 1,165,889 5,915,782 5,376,667 -
Cost of sales (7,527,519) (447,607) (4,579,109) (2,494,089) -
GROSS PROFIT 2,875,612 718,282 1,336,673 2,882,578 -
Administrative expenses (2,118,646) (781,792) (2,394,966) (3,130,331) 1 (1,579,345)
Other operating income 84,205 - 49,791 - -
Exceptional cost - - - (497,809)
OPERATING PROFIT/(LOSS) 841,171 (63,509) (1,008,503) (745,562) (1,579,345)
Interest payable (12,000) (5,768) (26,841) (24,161) -
PROFIT/(LOSS) ON ORDINARY 829,171 (69,277) (1,035,344) (769,723) (1,579,345)
ACTIVITIES BEFORE TAXATION
Tax on profit/(loss) on ordinary (242,912) 237 (11,778) - -
activities
PROFIT/(LOSS) FOR THE FINANCIAL 586,259 (69,040) (1,047,122) (769,723) (1,579,345)
PERIOD AFTER TAXATION AND
DIVIDENDS
BASIC EPS US$0,142 US$(13.81) US$(0.45) US$(346.72) -
WEIGHTED AVERAGE NUMBER OF 4,132,132 5.000 2,318,842 2.220 -
SHARES
</TABLE>
<TABLE>
<CAPTION>
COMBINED
OPERATIONS
US$
<S> <C>
TURNOVER 22,861,469
Cost of sales (15,048,324)
GROSS PROFIT 7,813,145
Administrative expenses (10,005,080)
Other operating income 133,996
Exceptional cost (497,809)
OPERATING PROFIT/(LOSS) (2,555,748)
Interest payable (68,770)
PROFIT/(LOSS) ON ORDINARY (2,624,518)
ACTIVITIES BEFORE TAXATION
Tax on profit/(loss) on ordinary (254,453)
activities
PROFIT/(LOSS) FOR THE FINANCIAL (2,878,971)
PERIOD AFTER TAXATION AND
DIVIDENDS
BASIC EPS US$(0.70)
WEIGHTED AVERAGE NUMBER OF 4,132,132
SHARES
</TABLE>
3
<PAGE>
INTEGRITY HOLDINGS LIMITED
NOTES FORMING PART OF THE UNAUDITED PROFORMA CONDENSED COMBINED FINANCIAL
STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 1998
NOTE 1-THE PRO FORMA ADJUSTMENTS TO THE CONDENSED CONSOLIDATED STATEMENT OF
INCOME ARE AS FOLLOWS:
The Pro Forma Consolidated statement of Operations reflects the
adjustments for the Acquisitions as if such events had occurred as of I
January 1998. The adjustment reflects the following:
<TABLE>
<CAPTION>
YEAR
TO
DECEMBER 31, 1998
US$
<S> <C>
The impact of purchase accounting adjustments 1,579,345
(i.e. depreciation of set up in basis for equipment)
</TABLE>
4
<PAGE>
EXHIBIT FS-3
INTEGRITY HOLDINGS LIMITED UNAUDITED INTERIM
FINANCIAL STATEMENTS PERIOD ENDED SEPTEMBER 30 1999
<PAGE>
INTEGRITY HOLDINGS LIMITED
UNAUDITED INTERIM FINANCIAL STATEMENTS
PERIOD ENDED SEPTEMBER 30 1999
<PAGE>
INTEGRITY HOLDINGS LIMITED
INTERIM FINANCIAL STATEMENTS FOR THE PERIOD ENDED SEPTEMBER 30 1999
<TABLE>
<CAPTION>
TABLE OF CONTENTS PAGE
<S> <C>
Company Information 1
Unaudited Statement of Operations for the nine months ended
September 30 1999 2
Unaudited Consolidated Balance Sheet as at September 30 1999 3 - 4
Notes forming part of the Unaudited Interim Financial Statements
For the nine months ended September 30 1999. 5
</TABLE>
<PAGE>
INTEGRITY HOLDINGS LIMITED
COMPANY INFORMATION
DIRECTORS Ken Butler (Chairman)
Paul Nagle (President/Chief Executive Officer)
Michael Foley (Chief Development Officer)
Paul Carroll (Chief Financial Officer/Secretary)
Jeremy Hall
SECRETARY Paul Carroll
REGISTERED OFFICE Suite 333,
3838 Camino Del Rio North,
San Diego, California 92108-1789,
U.S.A.
BANKERS Ulster Bank Limited,
Coolock,
Dublin,
Ireland.
AUDITORS BDO International, Chartered Accountants,
& Registered Auditors, Simpson Xavier
Court, 20 Merchants Quay, Dublin 8.
SPECIAL SECURITIES COUNSEL Carmine Bua,
Suite 333,
3838 Camino Del Rio North,
San Diego, California 92108-1789.
U. S. A.
- 1 -
<PAGE>
UNAUDITED INTERIM STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30 1999
<TABLE>
<CAPTION>
NOTES SEPTEMBER SEPTEMBER
30 1999 30 1998
US$ US$
<S> <C> <C> <C>
NET SALES 25,857,760 7,802,348
Cost of Sales (13,562,498) (5,645,639)
----------- ----------
GROSS PROFIT 12,295,262 2,156,709
OPERATING EXPENSES:
Administration expenses 7,184,668 1,168,095
Marketing 270,180 47,042
Research and Development 103,500 14,480
Depreciation 250,404 46,140
Maintenance and Repairs 461,141 11,705
Goodwill Amortisation 510,099 43,913
Selling and Distribution Costs 907,641 201,698
----------- ----------
TOTAL OPERATING EXPENSES 9,687,633 1,533,073
----------- ----------
OPERATING PROFIT 2,607,629 623,636
Other Income (expenses):
Profit on sale of subsidiary 297,000 -
Interest expenses and debt costs (5,117) (1,788)
----------- ----------
Total other income 291,883 (1,788)
----------- ----------
PROFIT BEFORE INCOME TAX EXPENSE 2,899,512 621,848
Income tax expense (623,545) (182,184)
----------- ----------
NET INCOME 2,275,967 439,664
=========== ==========
EARNINGS PER SHARE 2
Basic 0.17 0.20
Diluted 0.12 0.06
Weighted average number of
shares:
- Basic 13,472,464 2,208,686
- Diluted 18,253,029 7,591,115
</TABLE>
-2-
<PAGE>
UNAUDITED INTERIM BALANCE SHEET FOR THE
NINE MONTHS ENDED SEPTEMBER 30 1999.
<TABLE>
<CAPTION>
NOTES SEPTEMBER
30 1999
US$
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and Cash Equivalents 344,467
Receivables 9,168,971
Inventories 470,512
Income Tax refund receivable -
----------
TOTAL CURRENT ASSETS 9,983,950
PROPERTY AND EQUIPMENT AT COST:
Computer Equipment 414,363
Office Equipment 650,539
Motor Vehicles 428,931
Improvements to premises 13,750
Land & Buildings 306,127
Less accumulated Depreciation & Amortisation (395,404)
----------
Net Property and Equipment 1,418,306
Goodwill 8,579,995
----------
TOTAL ASSETS 19,982,251
==========
</TABLE>
-3-
<PAGE>
UNAUDITED INTERIM BALANCE SHEET FOR THE
NINE MONTHS ENDED SEPTEMBER 30 1999
<TABLE>
<CAPTION>
NOTES SEPTEMBER
30 1999
U$$
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current instalments on capital leasing 48,234
Bank loan and overdraft 289,205
Accounts payable 3,851,888
Other creditors 1,756,598
Accruals and Deferred Income 1,537,023
Other Taxes and Social Welfare 1,097,874
Taxation 783,364
----------
TOTAL CURRENT LIABILITIES 9,364,186
Long-term Capital Lease 45,588
SHAREHOLDERS' EQUITY:
Common Stock 3 13,469
Capital in excess of par value 7,912,902
Accumulated net income 2,948,878
Accumulated other comprehensive income 1 19,678
Receivable from exercise of Stock Options (422,450)
----------
10,572,477
----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY 19,982,251
==========
</TABLE>
-4-
<PAGE>
INTEGRITY HOLDINGS LIMITED
NOTES TO THE ACCOUNTS
1. ACCOUNTING POLICIES
BASIS OF PREPARATION
The consolidated condensed interim financial statements included herein
have been prepared by Integrity Holdings limited (Integrity), without
audit, pursuant to the rules and regulations of the Securities and Exchange
Commission. Certain information and footnote disclosures normally included
in the financial statements prepared in accordance with generally accepted
accounting principles, have been condensed or omitted pursuant to such
rules and regulations, although Integrity believes that the disclosures are
adequate to make the information presented not misleading.
These statements reflect all adjustments, consisting of normal recurring
adjustments, which in the opinion of management are necessary for fair
presentation of the information contained therein. It is suggested that
these consolidated condensed financial statements be read in conjunction
with the financial statements and notes thereto included in the Integrity's
financial statements for the year ended 31st December 1998. Integrity
follows the same accounting policies in preparation of interim reports.
Results of operations for the interim periods may not be indicative of
annual results.
2. EARNINGS PER COMMON SHARE
The weighted average number of shares used in the diluted 1999 and 1998
earnings per share calculation has been arrived at as follows:
<TABLE>
<CAPTION>
SEPTEMBER 30 September 30
1999 1998
<S> <C> <C>
Weighted average number of shares for basic EPS 13,472,464 2,208,686
Adjustment for stock options issued (not exercised) 4,780,565 5,382,489
WEIGHTED AVERAGE NUMBER OF SHARES FOR DILUTED EPS 18,253,029 7,591,115
</TABLE>
3. COMMON STOCK
AS AT SEPTEMBER 30 1998 AND AS AT SEPTEMBER 30 1999
<TABLE>
<CAPTION>
SEPTEMBER 30 September 30
1999 1998
US$ US$
<S> <C> <C>
Common stock - US$0.001 par value
100,000,000 authorised 100,000 100,000
------- -------
13,469,000 shares issued 13,469 10,777
------- -------
</TABLE>
-5-
<PAGE>
INTEGRITY HOLDINGS LIMITED
4. INTERESTS IN SHARES
At the September 30 1999, the Directors had interests in the company's
shares as follows:
<TABLE>
<CAPTION>
ISSUED SHARES OF
COMMON STOCK AT
US$ 0.001 EACH
<S> <C>
Paul Carroll 300,000
Ken Butler 25,000
Jeremy Hall 60,000
Paul Nagle 5,321,902
</TABLE>
5. APPROVAL OF CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS
These consolidated condensed interim combined financial statements were
approved by the directors on
-6-
<PAGE>
EXHIBIT FS-4
PREMIER GROUP LIMITED - DIRECTORS REPORT
AND CONSOLIDATED FINANCIAL STATEMENTS FOR
THE YEAR ENDED 31 DECEMBER 1998
<PAGE>
PREMIER COMPUTER GROUP LIMITED
DIRECTORS' REPORT AND CONSOLIDATED FINANCIAL
STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 1998
<PAGE>
PREMIER COMPUTER GROUP LIMITED
CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 1998
<TABLE>
<S> <C>
CONTENTS
Directors and other information 2
Directors' report 3
Auditors' report 6
Consolidated profit and loss account 7
Consolidated balance sheet 8
Company balance sheet 9
Consolidated cashflow statement 10
Notes forming part of these consolidated financial statements 11
</TABLE>
1
<PAGE>
PREMIER COMPUTER GROUP LIMITED
DIRECTORS AND OTHER INFORMATION
DIRECTORS Brian Kearney (resigned 23/12/98)
Mark Howell
William Reid
Leo McCarthy (appointed 1/5/98)
Paul Carroll (appointed 23/12/98)
SECRETARY Mark Howell
REGISTERED OFFICE 13/16 Dame Street,
Dublin 2.
BANKERS Allied Irish Bank plc.,
24 Arran Quay,
Dublin 7.
AUDITORS BDO Simpson Xavier,
Chartered Accountants
and Registered Auditors,
Simpson Xavier Court,
Merchants Quay,
Dublin 8.
SOLICITORS Patrick Donaghy & Company,
Solicitors,
13/16 Dame Street,
Dublin 2.
2
<PAGE>
PREMIER COMPUTER GROUP LIMITED
DIRECTORS' REPORT
The directors submit their report together with the audited financial statements
of the group for the year ended 31 December 1998.
PRINCIPAL ACTIVITIES AND REVIEW OF THE BUSINESS
The principal activity of the group throughout the year under review was the
manufacture, sale and support of software and the sale and support of computer
systems.
The entire share capital of the company was acquired by Integrity Holdings
Limited on the 23 December 1998.
RESULTS FOR THE YEAR
The consolidated profit and loss account and consolidated balance sheet for the
year ended 31 December 1998 are set out on pages 7 and 8. The operating loss for
the year before taxation is stated in the profit and loss account on page 7.
RESEARCH AND DEVELOPMENT
The group has been involved in the development of software products during the
year.
POST BALANCE SHEET EVENTS
The company has agreed in principle to the disposal of one of its subsidiaries
Techsonix Limited in May 1999.
3
<PAGE>
PREMIER COMPUTER GROUP LIMITED
DIRECTORS' REPORT - continued
YEAR 2000
The directors are currently implementing plans regarding the year 2000. These
plans should be operational by July 1999.
EURO
The directors are currently implementing plans for the euro change over. These
plans should be operational by July 1999.
FUTURE DEVELOPMENT
There are no future material changes anticipated in the business of the group at
this time. The directors are confident that turnover will be increased further
during the coming year, through the establishment of new markets and the
expansion of the range of software products.
HEALTH AND SAFETY
It is the policy of the relevant group companies to ensure the health and
welfare of employees by maintaining a safe place and system of work. This policy
is based on the requirements of the Safety, Health and Welfare at Work Act,
1989.
DIRECTORS AND DIRECTORS' INTERESTS
The names of the persons who were directors at any time during the year ended 31
December 1998 are set out on page 2. Except where indicated they served as
directors for the entire year.
In accordance with the Articles of Association, the directors are not required
to retire by rotation.
The beneficial interests of the directors of the company, their families and
nominees in the share capital of the company as they appear in the register of
shareholders are as follows:
<TABLE>
<CAPTION>
AT 31 DECEMBER 1998 AT 31 DECEMBER 1997
ORDINARY SHARES ORDINARY SHARES
NO NO
<S> <C> <C>
PAUL CARROLL - -
MARK HOWELL - 46
WILLIAM REID - 89
</TABLE>
4
<PAGE>
PREMIER COMPUTER GROUP LIMITED
DIRECTORS' REPORT - continued
DIRECTORS' RESPONSIBILITIES
Company law requires the directors to prepare financial statements for each
financial year which give a true and fair view of the state of affairs of the
company and of the profit or loss of the company for that period. In preparing
those financial statements, the directors are required to:
- - select suitable accounting policies and then apply them consistently;
- - make judgements and estimates that are reasonable and prudent;
- - prepare the financial statements on the going concern basis unless it is
inappropriate to presume that the company will continue in business.
The directors are responsible for keeping proper accounting records which
disclose with reasonable accuracy at any time the financial position of the
company and to enable them to ensure that the financial statements comply with
the Companies Acts, 1963 to 1990. They are also responsible for safeguarding the
assets of the company and hence for taking reasonable steps for the prevention
and detection of fraud and other irregularities.
SUBSIDIARY UNDERTAKINGS
Information in the subsidiary undertakings is set out in note 23 to the
financial statements.
AUDITORS
Grant Thornton resigned as auditors during the year and the directors appointed
BDO Simpson Xavier to fill the vacancy.
The auditors, BDO Simpson Xavier, Charted Accountants & Registered Auditors have
indicated their willingness to continue in the office in accordance with the
provisions of section 160(2) of the Companies Act, 1963.
SECTION40 (1) COMPANIES ACT, 1983
The Balance Sheet on page 8 discloses that the net assets of the group are less
than half the issued share capital. Accordingly the directors have decided to
convene an Extraordinary General Meeting of the company immediately after the
close of the Annual General Meeting to review its financial situation.
Mark Howell
- -------------------
Director
Paul Carroll
- -------------------
Director
1 May 1999
- -------------------
Date
5
<PAGE>
[LETTERHEAD]
TO THE MEMBERS OF PREMIER COMPUTER GROUP LIMITED
We have audited the financial statements on pages 7 to 24 which have been
prepared under the historical cost convention and the accounting policies set
out on pages 11 and 12.
RESPECTIVE RESPONSIBILITIES OF DIRECTORS AND AUDITORS
As described on page 4, the company's directors are responsible for the
preparation of the financial statements. It is our responsibility to form an
independent opinion, based on our audit, on those statements and to report our
opinion to you.
BASIS OF OPINION
We conducted our audit in accordance with Auditing Standards issued by the
Auditing Practices Board. An audit includes an examination, on a test basis, of
evidence relevant to the amounts and disclosures in the financial statements. It
also includes an assessment of the significant estimates and judgements made by
the directors in the preparation of the financial statements, and of whether the
accounting policies are appropriate to the company's circumstances, consistently
applied and adequately disclosed.
We planned and performed our audit so as to obtain all the information and
explanations which we considered necessary in order to provide us with
sufficient evidence to give reasonable assurance that the financial statements
are free from material misstatements, whether caused by fraud or other
irregularity or error. In forming our opinion we also evaluated the overall
adequacy of the presentation of information in the financial statements.
OPINION
In our opinion, the financial statements give a true and fair view of the state
of the company's and the group's affairs as at 31 December 1998 and of its loss
for the year then ended and have been properly prepared in accordance with the
Companies Acts, 1963 to 1990.
In our opinion, the information given in the directors' report on pages 3 to 5
is consistent with the financial statements.
In our opinion, there did exist at 31 December 1998 a financial situation which,
under Section 40(1) of the Companies (Amendment) Act 1983, does require the
convening of an extraordinary general meeting of the company.
We have obtained all the information and explanations we considered necessary
for the purposes of our audit. In our opinion, proper books of account have been
kept by the company. The financial statements are in agreement with the books of
account.
1 May 1999 BDO Simpson Xavier
Chartered Accountants
& Registered Auditors
<PAGE>
PREMIER COMPUTER GROUP LIMITED
CONSOLIDATED PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31 DECEMBER 1998
<TABLE>
<CAPTION>
Note 1998 1997
IRL IRL
<S> <C> <C> <C>
TURNOVER - CONTINUING OPERATIONS 2 3,775,749 3,056,218
------------ -----------
GROSS PROFIT 2,024,282 1,960,171
Operating costs (2,198,266) (1,773,455)
Exceptional costs (349,585) (53,370)
------------ -----------
OPERATING LOSS/PROFIT - CONTINUING OPERATIONS (523,569) 133,346
Interest receivable 6 - 7,484
Interest payable and similar charges 7 (16,967) (30,254)
------------ -----------
LOSS/PROFIT BEFORE TAXATION 3 (540,536) 110,576
Taxation 8 - (3,382)
------------ -----------
LOSS/PROFIT AFTER TAXATION (540,536) 107,194
Minority interests (3,415) (6,525)
------------ -----------
LOSS/PROFIT FOR THE YEAR (543,951) 100,669
Redemption of shares - (114,196)
Transfer to capital redemption reserve fund - (9,149)
------------ -----------
Retained loss for the financial year (543,951) (22,676)
Balance at beginning of year 397,716 420,392
------------ -----------
BALANCE AT END OF YEAR (146,235) 397,716
------------ -----------
</TABLE>
All recognised gains and losses have been included in the profit and loss
account. The notes on pages 11 to 24 form part of these financial statements.
Mark Howell Paul Carroll
- ----------------------------- -------------------------
Director Director
1 May 1999
- -----------------------------
Date
7
<PAGE>
PREMIER COMPUTER GROUP LIMITED
CONSOLIDATED BALANCE SHEET AS AT 31 DECEMBER 1998
<TABLE>
<CAPTION>
NOTES 1998 1997
ASSETS EMPLOYED IRL IRL
<S> <C> <C> <C>
FIXED ASSETS
Tangible assets 9 287,253 147,396
Financial assets 10 - 149,585
Intangible assets 11 - 83,774
--------- ----------
287,253 380,755
CURRENT ASSETS
Stocks 12 58,875 220,867
Debtors 13 996,587 718,782
Bank 277,514 208,751
--------- ----------
1,332,976 1,148,400
CREDITORS (amounts falling due
within one year) 14 (1,658,948) (982,458)
--------- ----------
NET CURRENT (LIABILITIES)/ASSETS (325,972) 165,942
--------- ----------
TOTAL ASSETS LESS CURRENT LIABILITIES (38,719) 546,697
CREDITORS (amounts falling due
after more than one year) 15 (58,464) (91,095)
--------- ----------
(97,183) 455,602
--------- ----------
CAPITAL AND RESERVES
Called up share capital 16 2,220 2,220
Share premium 17 199,267 199,267
Profit and loss account (146,235) 397,716
Other reserves 18 (152,435) (140,071)
--------- ---------
Shareholders' funds (97,183) 459,132
Minority interest 19 - (3,530)
--------- ---------
(97,183) 455,602
--------- ---------
</TABLE>
The notes on pages 11 to 24 form part of these financial statements.
Mark Howell Paul Carroll
- ------------------------ ----------------------------
Director Director
1 May 1999
- ------------------------
Date
8
<PAGE>
PREMIER COMPUTER GROUP LIMITED
COMPANY BALANCE SHEET AS AT 31 DECEMBER 1998
<TABLE>
<CAPTION>
NOTE 1998 1997
IRL IRL
<S> <C> <C> <C>
ASSETS EMPLOYED
FIXED ASSETS
Financial assets 10 100,490 100,490
-------- --------
CURRENT ASSETS
Debtors 13 238,381 238,381
Cash at bank 6,727 6727
-------- --------
245,108 245,108
CREDITORS (amounts failing due
within one year) 14 (107,577) (107,577)
-------- --------
NET CURRENT ASSETS 137,531 137,531
-------- --------
TOTAL ASSETS LESS CURRENT LIABILITIES 238,021 238,021
-------- --------
CAPITAL AND RESERVES
Called up share capital 16 2,220 2,220
Share premium 17 199,267 199,267
Capital redemption reserve fund 18 34,149 34,149
Profit and loss account 2,385 2,385
-------- --------
Shareholders Funds 238,021 238,021
-------- --------
</TABLE>
The notes on pages 11 to 24 form part of these financial statements.
Mark Howell
- ------------------------------------------
Director
Paul Carroll
- ------------------------------------------
Director
1 May 1999
- ------------------------------------------
Date
9
<PAGE>
PREMIER COMPUTER GROUP LIMITED
CASH FLOW STATEMENT FOR THE YEAR ENDED 31 DECEMBER 1998
<TABLE>
<CAPTION>
NOTE 1998 1997
IRL IRL
<S> <C> <C> <C>
NET CASH INFLOW FROM OPERATING ACTIVITIES 25 496,077 378,044
------------ -----------
RETURNS ON INVESTMENT AND SERVICING OF FINANCE
Interest paid (16,946) (30,255)
Interest received - 7,484
------------ -----------
NET CASH OUTFLOW FROM RETURNS ON INVESTMENTS AND (16,946) (22,771)
SERVICING OF FINANCE
------------ -----------
TAXATION
Corporation tax paid (8,667) (763)
------------ -----------
CAPITAL EXPENDITURE
Purchase of tangible assets (292,828) (15,198)
Sale of tangible assets 5,038 36,770
Expenditure on intangible fixed assets - (61,134)
Purchase of financial asset - (149,585)
------------ -----------
NET CASH OUTFLOW FROM CAPITAL EXPENDITURE (287,790) (189,147)
------------ -----------
NET CASH INFLOW BEFORE FINANCING 182,674 165,363
------------ -----------
FINANCING
Capital element of finance lease rental payments 26,772 (57,797)
Bank Loans (36,448) (81,277)
Redemption of Ordinary Share Capital - (123,345)
Unsecured loan (51,844) 50,000
------------ -----------
NET CASH OUTFLOW FROM FINANCING (61,520) (212,419)
------------ -----------
INCREASE/(DECREASE) IN CASH 26 121,154 (47,056)
------------ -----------
</TABLE>
10
<PAGE>
PREMIER COMPUTER GROUP LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1. ACCOUNTING POLICIES
a) BASIS OF PREPARATION
These financial statements have been prepared under the historical
cost convention.
b) TURNOVER
Turnover on systems sales are recognised when the systems are
commissioned and the customers billed.
c) DEPRECIATION
Depreciation is calculated to write off the cost of tangible
assets over their expected useful lives at the following annual
rates:
<TABLE>
<S> <C>
Improvements to premises 20% straight line
Fixtures and fittings 20% straight line
Equipment 20% straight line
Software 20% straight line
Motor vehicles 20%-33.3% straight line
</TABLE>
d) LEASED ASSETS
Assets held under leasing arrangements that transfer substantially
all the risks and rewards of ownership ("finance leases") to the
company are capitalised. The capital element of the related rental
obligations is included in creditors. The interest element of the
rental obligations is charged to the profit and loss account so as
to produce a constant periodic rate of charge. Rebates of rentals
received on disposal of leased assets are treated as proceeds on
disposal.
All other leases are operating leases and the annual rentals are
charged to the profit and loss account.
e) STOCKS
Stocks are valued at the lower of cost and net realisable value.
Cost comprises invoice cost exclusive of value added tax, together
with freight and carriage costs incurred.
Net realisable value comprises the actual or estimated selling
price (net of trade discounts) less all further costs to be
incurred in marketing, selling and distribution.
11
<PAGE>
PREMIER COMPUTER GROUP LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
f) FOREIGN CURRENCIES
Monetary assets and liabilities denominated in foreign
currencies are translated at the exchange rates ruling at the
balance sheet date and revenues, costs and nonmonetary assets at
the exchange rates ruling at the dates of the transactions.
Profits and losses arising from foreign currency translations
and on settlement of amounts receivable and payable in foreign
currency are dealt with through the profit and loss account.
g) PENSIONS
Amounts paid to fund defined contribution schemes are charged
to the profit and loss account as incurred.
h) SOFT,ARE RESEARCH AND DEVELOPMENT COSTS
Research expenditure is written off to the profit and loss
account in the year in which it is incurred. Development
expenditure is written off in the same year unless the
directors are satisfied as to the technical, commercial and
financial viability of individual projects. In this situation,
the expenditure is deferred and amortised over the period from
which the company is expected to benefit.
12
<PAGE>
PREMIER COMPUTER GROUP LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2. TURNOVER
The turnover of the company for the period has been derived from its
principle activity.
<TABLE>
<CAPTION>
1998
IRL
<S> <C>
Republic of Ireland. 3,473,214
United Kingdom. 302,535
----------
3,775,749
----------
</TABLE>
3. LOSS/PROFIT BEFORE TAXATION
The Loss/profit before taxation has been arrived at after charging the
following items;
<TABLE>
<CAPTION>
1998 1997
IRL IRL
<S> <C> <C>
Auditors' remuneration 24,992 7,808
Depreciation 144,608 99,691
Amortisation of intangible assets 83,019 59,794
Exceptional costs 349,585 53,370
--------- --------
</TABLE>
Exceptional cost in the current year relate to provisions in respect
of the group's financial asset IRL 149,585 (see note 10), IRL 100,000
regarding the recovery of monies advanced to a company related and
controlled by former directors and IRL 100,000 covering the write off of
obsolete stock
13
<PAGE>
PREMIER COMPUTER GROUP LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
4. EMPLOYEES AND REMUNERATION
The average number of persons (including directors) employed by the
group during the financial year was 45 (1997: 39) and is analysed
into the following categories;
<TABLE>
<CAPTION>
1998 1997
IRL IRL
<S> <C> <C>
Sales 6 5
Administration 9 10
Technical 30 24
----------- ---------
45 39
----------- ---------
<CAPTION>
Staff costs comprised: 1998 1997
IRL IRL
<S> <C> <C>
Wages and salaries 1,113,821 858,311
Social welfare costs 97,643 90,751
Pension costs 25,468 11,769
----------- ---------
1,236,932 960,831
----------- ---------
</TABLE>
5 DIRECTORS' EMOLUMENTS
<TABLE>
<CAPTION>
1998 1997
IRL IRL
<S> <C> <C>
Remuneration and other emoluments 225,064 112,393
Pension costs 14,829 8,743)
---------- ---------
239,892 121,136
---------- ---------
</TABLE>
6 INTEREST RECEIVABLE
<TABLE>
<CAPTION>
1998 1997
IRL IRL
<S> <C> <C>
Interest received and receivable -- 7,484
---------- ---------
</TABLE>
14
<PAGE>
PREMIER COMPUTER GROUP LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
7. INTEREST PAYABLE AND SIMILAR CHARGES
<TABLE>
<CAPTION>
1998 1997
This interest was in respect of: IRL IRL
<S> <C> <C>
Borrowings wholly repayable within five years
- bank loan and overdraft 11,855 20,743
- finance lease 5,111 9,512
--------- -------
16,967 30,255
--------- -------
</TABLE>
8. TAXATION
<TABLE>
<CAPTION>
1998 1997
IRL IRL
<S> <C> <C>
Corporation tax principally at 10% -- 9,000
Overprovision in prior year -- (5,168)
--------- -------
-- 3,382
--------- -------
</TABLE>
No tax liability arises in the current year due to loss relief.
15
<PAGE>
PREMIER COMPUTER GROUP LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
9. TANGIBLE ASSETS
GROUP
<TABLE>
<CAPTION>
IMPROVEMENTS FIXTURES EQUIPMENT SOFTWARE MOTOR TOTAL
TO PREMISES & VEHICLES
FITTINGS
IRL IRL IRL IRL IRL IRL
<S> <C> <C> <C> <C> <C> <C>
COST
At I January 1998 33,194 341,667 238,352 133,731 40,951 787,895
Additions -- 3,037 168,315 36,273 85,215 292,840
Disposals -- (6,029) -- -- (14,240) (20,269)
Translation adjustments -- (9,627) (3,034) -- (1,349) (14,010)
------------ --------- ---------- ---------- --------- ---------
AT 31 DECEMBER 1998 33,194 329,048 403,633 170,004 110,577 1,046,456
------------ --------- ---------- ---------- --------- ---------
DEPRECIATION
At 1 January 1998 17,427 327,114 168,131 109,529 18,298 640,499
Charge for year 6,492 889 97,004 22,223 18,000 144,608
Disposals -- -- -- -- (13,053) (13,053)
Translation adjustments -- (9,207) (3,045) -- (599) (12,851)
------------ --------- ---------- ---------- --------- ---------
At 31 December 1998 23,919 318,796 262,090 131,752 22,646 759,203
------------ --------- ---------- ---------- --------- ---------
NET BOOK VALUE
AT 31 DECEMBER 1998 9,275 10,252 141,543 38,252 87,931 287,253
------------ --------- ---------- ---------- --------- ---------
At 1 January 1998 15,767 14,553 70,221 24,202 22,653 147,396
------------ --------- ---------- ---------- --------- ---------
</TABLE>
Tangible assets with a net book amount of IRL 102,051 (1997: IRL 47,014) are
held by the group under finance leases. The depreciation charge on these assets
amounts to IRL 38,459 (1997: IRL 21,032).
16
<PAGE>
PREMIER COMPUTER GROUP LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
10 FINANCIAL ASSETS
<TABLE>
<CAPTION>
GROUP 1998 1997
IRL IRL
<S> <C> <C>
Leasehold interest - 149,585
------- -------
The directors have decided to make a full provision against the value
of this investment due to doubt over group's legal ownership of the
lease hold interest.
COMPANY
Investment in subsidiaries (note 23) 100,490 100,490
------- -------
11 INTANGIBLE ASSETS
GROUP
SOFTWARE
DEVELOPMENT
COSTS
IRL
COST
At 1 January 1998 362,689
Translation adjustments (3,128)
--------
AT 31 DECEMBER 1998 359,561
--------
DEPRECIATION
At 1 January 1998 278,915
Charge for year 83,019
Translation adjustments (2,373)
--------
At 31 December 1998 359,561
--------
NET BOOK AMOUNT -
AT 31 DECEMBER 1998
--------
At 1 January 1998 83,774
--------
</TABLE>
17
<PAGE>
PREMIER COMPUTER GROUP LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
12. STOCKS
<TABLE>
<CAPTION>
1999 1997
IRL IRL
<S> <C> <C>
Goods for resale 58,875 215,297
Other stock - 5,570
---------- ---------
58,875 220,867
---------- ---------
In the opinion of the directors, the replacement cost of stock does not
differ significantly from the figures shown above.
13 DEBTORS (amounts falling due within one year)
1998 1997
GROUP IRL IRL
Trade debtors and prepayments 996,587 718,782
---------- ---------
COMPANY 1998 1997
IRL IRL
Amounts due by subsidiary companies (note 15) 238,381 238,381
---------- ---------
</TABLE>
18
<PAGE>
PREMIER COMPUTER GROUP LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
14. CREDITORS (amounts falling due within one year)
<TABLE>
<CAPTION>
1998 1997
GROUP IRL IRL
<S> <C> <C>
Trade creditors 714,095 360,908
Bank overdraft 42,738 95,129
Corporation tax 333 9,000
PAYE/PRSI 56,115 20,955
VAT 92,026 53,698
Accruals and deferred income 692,969 353,207
Obligations under finance leases 60,672 37,717
Unsecured loan - 50,000
Secured loan - 1,844
--------- ---------
1,658,948 982,458
--------- ---------
The bank overdraft is secured by fixed and floating charges over the fixed
assets of Techsonix Limited.
1998 1997
COMPANY IRL IRL
Amounts due to subsidiary companies 107,577 57,577
--------- ---------
15. CREDITORS (amount falling due after more than one year)
GROUP
1998 1997
IRL IRL
Bank loan - 36,448
Finance leases - repayable within five years 58,464 54,647
--------- ---------
58,464 91,095
--------- ---------
</TABLE>
19
<PAGE>
PREMIER COMPUTER GROUP LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
16. SHARE CAPITAL
<TABLE>
<CAPTION>
1998 1997
IRL IRL
<S> <C> <C>
AUTHORISED
100,000 ordinary shares of IRL 1 each 100,000 100,000
--------- ---------
ALLOTTED, CALLED UP AND FULLY PAID
Equity Shares
2,220 ordinary shares of IRL 1 each 2,220 2,220
--------- ---------
</TABLE>
17. SHARE PREMIUM
<TABLE>
<CAPTION>
1998 1997
IRL IRL
<S> <C> <C>
At 31 December 1998 and 31 December 1997 199,267 199,267
--------- ---------
</TABLE>
18 OTHER RESERVES
<TABLE>
<CAPTION>
GOODWILL TRANSLATION CAPITAL TOTAL
WRITE-OFF RESERVES REDEMPTION IRL
RESERVE IRL RESERVE
IRL IRL
<S> <C> <C> <C> <C>
At 1 January 1998 (175,885) 1,665 34,149 (140,071)
Translation differences arising
during the year - (399) - (399)
Goodwill on acquisition (11,965) - - (11,965)
---------- ----------- ---------- ---------
AT 31 DECEMBER 1998 (187,850) 1,266 34,149 (152,435)
---------- ----------- ---------- ---------
</TABLE>
19 MINORITY INTEREST
<TABLE>
<CAPTION>
1998 1997
IRL IRL
<S> <C> <C>
At 1 January 1998 (3,530) (8,810)
Share of profit after taxation (4,644) 6,525
Foreign currency translation 115 (1,245)
Acquisition of minority interest by holding company (8,059)
---------- ---------
At 31 December 1998 - (3,530)
---------- ---------
</TABLE>
20
<PAGE>
PREMIER COMPUTER GROUP LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
20. FINANCIAL COMMITMENTS
At 31 December 1998 the Group had annual commitments of IRL 5,076
(1997: IRL 5,076) under non-cancellable operating leases. These leases
were due to expire in the following periods after 31 December:
<TABLE>
<CAPTION>
1998 1997
IRL IRL
<S> <C> <C>
Within one year 1,128 1,692
Between two and five years 2,256 3,384
------- -------
3,384 5,076
------- -------
</TABLE>
21 CONTROLLING PARTY
As from 23 December 1998 the company was controlled by Integrity
Holdings Limited, a company incorporated in the U.S.A. and operating in
Europe.
22 RELATED PARTY TRANSACTIONS
The company has availed of the exemptions under FRS 8 (Related Party
Disclosure) which allows non disclosure of transactions with other
group companies.
21
<PAGE>
PREMIER COMPUTER GROUP LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
23 GROUP UNDERTAKINGS
Premier Computer Group Limited had the following subsidiary
undertakings at 31 December 1998:
<TABLE>
<CAPTION>
COMPANY %HELD REGISTERED OFFICE PRINCIPLE ACTIVITY
<S> <C> <C> <C>
INCORPORATED IN THE
REPUBLIC OF IRELAND
Premier Information Systems 100% (a) Modification, sale and
Ltd. support of computer
systems and software
Premier Software Ltd. 100% (a) Manufacture and sale
of software
Progress Systems Ltd. 100% (a) Manufacture, sale and
support of computer
systems and software
Premier Services Ltd. 100% (a) Dormant
Premier Distribution Ltd. 100% (a) Dormant
COMPANY % HELD REGISTERED OFFICE PRINCIPLE ACTIVITY
INCORPORATED IN THE UNITED
KINGDOM
Ravplot Ltd 100% (b) Investment holding
company
Techsonix Ltd 100% (b) Supply of computer
based cost and
management
information systems,
together with
associated training and
support services to the
construction industry
</TABLE>
(a) 13/16 Dame Street, Dublin 2, Ireland
(b) 5 Ashted Lock, Dartmouth Middleway, Birmingham, B7 4AZ
22
<PAGE>
PREMIER COMPUTER GROUP LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
24 CAPITAL COMMITMENTS.
The company does not have any capital commitments at 31 December 1998.
25. RECONCILIATION OF OPERATING PROFIT TO NET CASH INFLOW FROM OPERATING
ACTIVITIES
<TABLE>
<CAPTION>
1998 1997
IRL IRL
<S> <C> <C>
Operating (loss)/profit (523,569) 133,346
Depreciation 144,608 99,691
Amortisation of intangible assets 83,019 59,794
Provision for loss on investment 149,585 -
Profit on sale of asset 3,656 -
Translation adjustment (11,827) -
Decrease/(increase) in stocks 161,992 (29,218)
(Increase)/decrease in debtors (277,805) 29,426
Increase in creditors 766,418 85,005
---------- ----------
Net cash inflow/(outflow) from operating activities 496,077 378,044
---------- ----------
</TABLE>
26. RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBT
<TABLE>
<CAPTION>
1998 1997
IRL IRL
<S> <C> <C>
Increase/(decrease) in cash in the year 121,154 (47,056)
Cash inflow from decrease in debt and lease finance 121,251 40,277
-------- --------
Change in debt resulting from cash flow 242,405 (6,779)
Effect of foreign exchange movements (5,860)
New finance leases (59,702) (59,156)
-------- --------
Movement in net debt in the year 182,703 (71,795)
Net debt at 1 January 1998 (67,063) 93,053
-------- --------
Net debt at 31 December 1998 115,640 21,258
-------- --------
</TABLE>
23
<PAGE>
PREMIER COMPUTER GROUP LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
27 ANALYSIS OF NET DEBT
<TABLE>
<CAPTION>
1/1/98 CASH FLOW OTHER NON-CASH 31/12/98
IRL IRL CHANGES IRL
IRL
<S> <C> <C> <C> <C>
Cash at bank 208,751 68,763 - 277,514
Bank overdrafts (95,129) 52,391 - (42,738)
Finance lease (92,394) 32,960 (59,702) (119,136)
Loans (88,291) 88,291 - -
-------- ------- -------- --------
(67,063) 242,405 (59,702) 115,640
-------- ------- -------- --------
</TABLE>
28 APPROVAL OF FINANCIAL STATEMENTS
The financial statements were approved by the board on 1 May 1999.
24
<PAGE>
EXHIBIT FS-5
SARACEN COMPUTER SYSTEMS LIMITED DIRECTORS'
REPORT AND FINANCIAL STATEMENTS FOR
THE YEAR ENDED 31ST OCTOBER 1997
<PAGE>
SARACEN COMPUTER SYSTEMS LIMITED
DIRECTORS'REPORT
AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED
31ST OCTOBER 1997
CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
1 Directors and officers
2 Directors' report
3 Directors' responsibilities
4 Auditors' report
5 Profit and loss account
6 Balance sheet
7-12 Notes to the financial
statements
13 Reconciliation between
UK and US Accounting Principles
</TABLE>
-------------------------------------
Moore Stephens
Chartered Accountants
Birmingham
<PAGE>
- 1 -
SARACEN COMPUTER SYSTEMS LIMITED
DIRECTORS
J. D. Swingler
Mrs. D. J. Swingler
D. M. Billinge
A. P. Stephens
SECRETARY
Mrs. D. J. Swingler
AUDITORS
Moore Stephens, Chartered Accountants,
Charterhouse, 165 Newhall Street,
Birmingham B3 1SW
BANKERS
Barclays Bank plc, 15 Market Square,
Stafford ST16 2BE
REGISTERED OFFICE
St. Mary's House, Church Street,
Uttoxeter, Staffordshire ST14 8AG
Company number : 1930247
<PAGE>
- 2 -
SARACEN COMPUTER SYSTEMS LIMITED
REPORT OF THE DIRECTORS
The directors present their report and audited financial
statements for the year ended 31st October 1997
REVIEW OF ACTIVITIES
The principal activities of the company have continued to be the design and
supply of computer systems for the laundry industry.
RESULTS AND DIVIDENDS
The balance sheet of the company as at 31st October 1997 together with the
profit and loss account for the year ended on that date are attached.
The payment of a dividend of (POUND)90000 is proposed.
RESEARCH AND DEVELOPMENT
The company undertakes research and development to enhance its existing
products and maintain its standard in this field.
DIRECTORS AND DIRECTORS' INTERESTS
The directors who held office during the year and their interests in the
shares of the company at the beginning and end of the year were as
follows:-
<TABLE>
<CAPTION>
Ordinary shares of
(pound)1 each
1997 1996
<S> <C> <C>
J. D. Swingler 2500 2500
Mrs. D. J. Swingler 2000 2000
D. M. Billinge 500 500
A. P. Stephens - -
</TABLE>
BY ORDER OF THE BOARD
Mrs. D. J. Swingler
SECRETARY
15th January 1998
<PAGE>
- 3 -
SARACEN COMPUTER SYSTEMS LIMITED
STATEMENT OF DIRECTORS' RESPONSIBILITIES
Company law requires the directors to prepare financial statements for each
financial year which give a true and fair view of the state of affairs of the
company and of the profit or loss of the company for that period. In preparing
those financial statements, the directors are required to:
- select suitable accounting policies and then apply them consistently.
- make judgments and estimates that are reasonable and prudent.
- prepare the financial statements on the going concern basis unless it
is inappropriate to presume that the company will continue in
business.
The directors are responsible for keeping proper accounting records which
disclose with reasonable accuracy at any time the financial position of the
company and to enable them to ensure that the financial statements comply with
the Companies Act 1985. They are also responsible for safeguarding the assets of
the company and hence for taking reasonable steps for the prevention and
detection of fraud and other irregularities.
<PAGE>
- 4 -
AUDITORS'REPORT TO THE MEMBERS OF
SARACEN COMPUTER SYSTEMS LIMITED
We have audited the financial statements on pages 5 to 12 which have been
prepared under the historical cost convention and the accounting policies set
out on page 7.
RESPECTIVE RESPONSIBILITIES OF DIRECTORS AND AUDITORS
As described on page 3 the company's directors are responsible for the
preparation of financial statements. It is our responsibility to form an
independent opinion, based on our audit, on those statements and to report our
opinion to you.
BASIS OF OPINION
We conducted our audit in accordance with Auditing Standards issued by the
Auditing Practices Board. An audit includes examination, on a test basis, of
evidence relevant to the amounts and disclosures in the financial statements. It
also includes an assessment of the significant estimates and judgements made by
the directors in the preparation of the financial statements, and of whether the
accounting policies are appropriate to the company's circumstances, consistently
applied and adequately disclosed.
We planned and performed our audit so as to obtain all the information and
explanations which we considered necessary in order to provide us with
sufficient evidence to give reasonable assurance that the financial statements
are free from material misstatement, whether caused by fraud or other
irregularity or error. In forming our opinion we also evaluated the overall
adequacy of the presentation of information in the financial statements.
OPINION
In our opinion the financial statements give a true and fair view of the state
of the company's affairs at 31st October 1997 and of its profit for the year
then ended and have been properly prepared in accordance with the Companies Act
1985.
MOORE STEPHENS
CHARTERED ACCOUNTANTS
AND REGISTERED AUDITOR
CHARTERHOUSE
165 NEWHALL STREET
BIRMINGHAM B3 1SW
15TH JANUARY 1998
ADDENDUM
These financial statements have been altered by the inclusion, on page 5, of
unaudited results for the trading period 1st November 1997 to 3rd October 1998.
MOORE STEPHENS
CHARTERED ACCOUNTANTS
27TH OCTOBER 1999
<PAGE>
- 5 -
SARACEN COMPUTER SYSTEMS LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED
31ST OCTOBER 1997
<TABLE>
<CAPTION>
Unaudited
figures
1/11/97 to
NOTES 3/10/98 1997 1996
(pound) (pound) (pound)
<S> <C> <C> <C> <C>
TURNOVER 1 848200 1063160 970374
Cost of sales 325640 417434 371818
------ ------ ------
GROSS PROFIT 522560 645726 598556
Administrative expenses 568764 520724 509393
------ ------ ------
OPERATING PROFIT/(LOSS) 4 ( 46204) 125002 89163
Interest payable 5 4196 5472 5986
------ ------ ------
PROFIT/LOSS ON ORDINARY ACTIVITIES
BEFORE TAXATION ( 50400) 119530 83177
Taxation 6 ( 141) 25462 22845
------ ------ ------
PROFIT/(LOSS) FOR THE FINANCIAL YEAR ( 50259) 94068 60332
Proposed dividends - 90000 -
------ ------ ------
TRANSFER TO RESERVES 15 ( 50259) 4068 60332
====== ====== ======
</TABLE>
There are no recognised gains or losses other than those included in the profit
and loss account.
<PAGE>
- 6 -
SARACEN COMPUTER SYSTEMS LIMITED
BALANCE SHEET
31ST OCTOBER 1997
<TABLE>
<CAPTION>
NOTES 1997 1996
(pound) (pound)
<S> <C> <C> <C>
FIXED ASSETS
Intangible assets 7 54824 9964
Tangible assets 8 313893 305161
------ ------
368717 315125
CURRENT ASSETS
Stock 9 20570 35825
Debtors 10 222647 158348
Taxation 11 22500 -
Directors loans 25000 -
Cash at bank and in hand 200 15
------ ------
290917 194188
------ ------
CREDITORS: AMOUNTS FALLING DUE
WITHIN ONE YEAR
Bank loans and overdrafts (Secured) 12 58503 48431
Creditors 13 203890 180690
Dividends payable 90000 -
Taxation 49500 17290
------ ------
401893 246411
------ ------
NET CURRENT LIABILITIES (110976) (52223)
------ ------
TOTAL ASSETS LESS CURRENT
LIABILITIES 257741 262902
CREDITORS: AMOUNTS FALLING DUE
AFTER MORE THAN ONE YEAR 13 13771 23000
------ ------
243970 239902
====== ======
CAPITAL AND RESERVES
Share capital 14 5000 5000
Profit and loss account 15 238970 234902
------ ------
243970 239902
====== ======
</TABLE>
These financial statements were approved by the Board on 15th January 1998.
J. D. SWINGLER DIRECTOR
<PAGE>
- 7 -
SARACEN COMPUTER SYSTEMS LIMITED
NOTES TO THE
FINANCIAL STATEMENTS
FOR THE YEAR ENDED
31ST OCTOBER 1997
1. PRINCIPAL ACCOUNTING POLICIES
BASIS OF ACCOUNTING
The financial statements have been prepared in accordance with applicable
accounting standards and under the historical cost convention.
TURNOVER
Turnover represents the invoiced value of services and goods supplied
excluding value added tax.
FIXED ASSETS AND DEPRECIATION
Fixed assets are depreciated over their estimated useful lives using the
following rates:-
<TABLE>
<S> <C>
Freehold property Nil
Office equipment 10% Straight line
Motor vehicles 25% Straight line
Computers 20% Straight line
Research and development Nil
</TABLE>
Freehold property is not depreciated as it is considered that the residual
value and life of the property is such that depreciation would not be
material.
RESEARCH AND DEVELOPMENT
Research and development expenditure is charged against profit in the year
in which it is incurred, except insofar as it relates to a clearly defined
project and the benefits therefrom can reasonably be regarded as assured.
Expenditure so deferred is limited to the value of future benefits and is
amortised through the profit and loss account on a systematic basis over
the period expected to benefit from the project.
STOCKS
Stocks have been consistently valued at the lower of cost and net
realisable value.
DEFERRED TAXATION
Deferred taxation is calculated under the liability method. Taxation
deferred or accelerated by reason of material timing differences is
accounted for if such liability is expected to arise in the foreseeable
future. Advance corporation tax is carried forward to the extent that it is
expected to be recovered.
<PAGE>
- 8 -
SARACEN COMPUTER SYSTEMS LIMITED
NOTES TO THE
FINANCIAL STATEMENTS
FOR THE YEAR ENDED
31ST OCTOBER 1997
<TABLE>
<CAPTION>
2. DIRECTORS AND EMPLOYEES 1997 1996
(pound) (pound)
<S> <C> <C>
DIRECTORS' EMOLUMENTS
Aggregate emoluments 193218 173937
Company pension contributions to
money purchase schemes 21493 51140
------ ------
214711 225077
====== ======
</TABLE>
The number of directors to whom retirement benefits are accruing under the
following schemes are:-
<TABLE>
<CAPTION>
Number Number
------ ------
<S> <C> <C>
Money purchase schemes 4 4
====== ======
</TABLE>
STAFF
Staff costs, including directors, during the year were as follows:-
<TABLE>
<CAPTION>
(pound) (pound)
<S> <C> <C>
Wages and salaries 308729 296350
Social security costs 32932 30587
Other pension costs 21493 51140
------ ------
363154 378077
====== ======
</TABLE>
The average number of persons employed by the company in the year was:-
<TABLE>
<CAPTION>
Number Number
<S> <C> <C>
Creative 7 6
Administration 2 2
Directors 4 4
-- --
13 12
== ==
</TABLE>
<TABLE>
<CAPTION>
3. TURNOVER 1997 1996
(pound) (pound)
<S> <C> <C>
Geographical analysis:
United Kingdom 888680 666372
Rest of Europe 122640 295937
South Africa 51840 8065
------- ------
1063160 970374
======= ======
</TABLE>
<PAGE>
- 9 -
SARACEN COMPUTER SYSTEMS LIMITED
NOTES TO THE
FINANCIAL STATEMENTS
FOR THE YEAR ENDED
31ST OCTOBER 1997
<TABLE>
<CAPTION>
4. OPERATING PROFIT 1997 1996
(pound) (pound)
<S> <C> <C>
Operating profit is stated after charging:
Depreciation and amounts written
off tangible fixed assets 45461 39441
(Profit) on disposal of assets (5289) (1548)
Research and development
Current year's expenditure - 4249
Directors' emoluments (note 2) 214711 225077
Auditors' remuneration 3000 3000
====== ======
</TABLE>
<TABLE>
<CAPTION>
5. INTEREST PAYABLE 1997 1996
(pound) (pound)
<S> <C> <C>
Bank loans and overdrafts 3054 3447
Finance lease charges 2418 2539
---- ----
5472 5986
==== ====
</TABLE>
<TABLE>
<CAPTION>
6. TAXATION ON ORDINARY ACTIVITIES 1997 1996
(pound) (pound)
<S> <C> <C>
Corporation tax at 24% (1996 25%) 27000 23000
Under/(over)provision for previous years (1538) (155)
----- -----
25462 22845
===== =====
</TABLE>
7. INTANGIBLE FIXED ASSETS
<TABLE>
<CAPTION>
Research &
Development
(pound)
<S> <C>
COST
At 31st October 1996 9964
Additions 44860
-----
At 31st October 1997 54824
=====
</TABLE>
<PAGE>
- 10 -
SARACEN COMPUTER SYSTEMS LIMITED
NOTES TO THE
FINANCIAL STATEMENTS
FOR THE YEAR ENDED
31ST OCTOBER 1997
8. TANGIBLE FIXED ASSETS
<TABLE>
<CAPTION>
FREEHOLD OFFICE MOTOR
PROPERTY EQUIPMENT VEHICLES COMPUTERS TOTAL
COST (pound) (pound) (pound) (pound) (pound)
<S> <C> <C> <C> <C> <C>
31st October 1996 183281 77967 87469 152052 500769
Additions 1800 2234 38814 13470 56318
Disposals - - (20414) - (20414)
------ ----- ------ ------ ------
31st October 1997 185081 80201 105869 165522 536673
------ ----- ------ ------ ------
AMOUNTS WRITTEN OFF
31st October 1996 - 30656 57422 107530 195608
Disposal adjustment - - (18289) - (18289)
Charge for the year - 7800 23194 14467 45461
------ ----- ------ ------ ------
31ST OCTOBER 1997 - 38456 62327 121997 222780
------ ----- ------ ------ ------
NET BOOK VALUE
31st October 1997 185081 41745 43542 43525 313893
====== ===== ===== ===== ======
31ST October 1996 183281 47311 30047 44522 305161
====== ===== ===== ===== ======
</TABLE>
The net book value includes an amount of (pound)37301 (1996 (pound)25625)
in respect of assets held under finance leases. The depreciation charge for
the year was (POUND)5109 (1996 (pound)14868) in respect of these assets.
The cost of depreciable assets included above is (POUND)351592.
<TABLE>
<CAPTION>
9. STOCKS 1997 1996
(pound) (pound)
Stocks comprise:
<S> <C> <C>
Consumable stock 8024 24000
Work in progress 4850 5375
Computer equipment 7696 6450
----- -----
20570 35825
===== =====
</TABLE>
<PAGE>
- 11 -
SARACEN COMPUTER SYSTEMS LIMITED
NOTES TO THE
FINANCIAL STATEMENTS
FOR THE YEAR ENDED
31ST OCTOBER 1997
<TABLE>
<CAPTION>
10. DEBTORS 1997 1996
(pound) (pound)
<S> <C> <C>
Trade debtors 212054 151420
Prepayments and accrued income 10593 6928
------ ------
222647 158348
====== ======
</TABLE>
11. TAXATION
Advance corporation tax of (POUND)22500 is recoverable in more than one
year.
12. BANK LOANS AND OVERDRAFTS
Bank loans and overdrafts are secured by a fixed and floating charge on the
assets of the company.
<TABLE>
<CAPTION>
13. CREDITORS AMOUNTS FALLING
DUE WITHIN ONE YEAR
1997 1996
(pound) (pound)
<S> <C> <C>
Trade creditors 153731 149736
Other taxation and social security payable 20899 16123
Hire purchase 10423 9929
Accruals and deferred income 18837 4902
------ ------
203890 180690
====== ======
</TABLE>
<TABLE>
<CAPTION>
AMOUNTS FALLING DUE AFTER
MORE THAN ONE YEAR
1997 1996
(pound) (pound)
<S> <C> <C>
Hire purchase 13771 3000
Other creditors - 20000
----- -----
13771 23000
===== =====
</TABLE>
<PAGE>
- 12 -
SARACEN COMPUTER SYSTEMS LIMITED
NOTES TO THE
FINANCIAL STATEMENTS
FOR THE YEAR ENDED
31ST OCTOBER 1997
<TABLE>
<CAPTION>
14. CALLED UP SHARE CAPITAL 1997 1996
(pound) (pound)
<S> <C> <C>
Ordinary shares of(pound)1 each:-
Authorised 100000 100000
====== ======
Allotted, called up and fully paid 5000 5000
====== ======
</TABLE>
<TABLE>
<CAPTION>
15. PROFIT AND LOSS ACCOUNT 1997 1996
(pound) (pound)
<S> <C> <C>
At 31st October 1996 234902 174570
Transfer for the year 4068 60332
------ ------
At 31st October 1997 238970 234902
====== ======
</TABLE>
16. PENSION SCHEMES
The company operates defined contribution pension schemes for the directors
by way of payments to insurance companies. The pension cost charge
represents contributions payable by the company to the funds and amounted
to (POUND)21493 (1996 (pound)51140).
17. TRANSACTIONS WITH DIRECTORS
During the year non-interest bearing loans, repayable on demand were made
to the following directors:-
<TABLE>
<CAPTION>
J.D. Swingler Mrs. D.J. Swingler
(pound) (pound)
<S> <C> <C>
Amount at beginning of year - -
----- -----
Amount at end of year 12000 13000
----- -----
Maximum amount in the year 12000 18000
----- -----
</TABLE>
18. CONTROL OF COMPANY
The company was controlled throughout the current and previous period by
J. D. Swingler and Mrs. D. J. Swingler by virtue of them holding a majority
of the issued ordinary share capital of the company.
19. CASH FLOW STATEMENT
The company is not required to produce a cash flow statement under the
provisions of Financial Reporting Standard No. 1.
<PAGE>
- 13 -
SARACEN COMPUTER SYSTEMS LIMITED
RECONCILIATION BETWEEN UK AND US ACCOUNTING PRINCIPLES
The financial statements of the Company set out on pages 5 to 12 have been
prepared in accordance with generally accepted accounting principles applicable
in the United Kingdom ("UK GAAP") which differ in certain significant respects
from those applicable in the US ("US GAAP"). The material differences as they
apply to the Company's financial statements are as follows:
INTANGIBLE FIXED ASSETS - RESEARCH AND DEVELOPMENT
Under UK GAAP research development expenditure is charged against profit in the
year in which it is incurred, except insofar as it relates to a clearly defined
project and the benefits therefrom can reasonably be regarded as assured.
Expenditure so deferred is limited to the value of future benefits and is
amortised through the profit and loss account on a systematic basis over the
period expected to benefit from the project. Development costs are expensed as
incurred, under US GAAP.
The following is a summary of the material adjustments to profit and
shareholders' equity which would be required had the financial statements
been prepared with US GAAP:
<TABLE>
<CAPTION>
(i) EFFECT ON RETAINED PROFIT 1997 1996
(pound) (pound)
<S> <C> <C>
Profit/(loss) as stated under UK GAAP 94068 60332
US GAAP adjustments
Research and development cost (44860) (1754)
------ -----
Net income as stated under US GAAP 49208 58578
===== =====
</TABLE>
<TABLE>
<CAPTION>
(ii) EFFECT ON SHAREHOLDERS' EQUITY 31st OCT. 31ST OCT.
1997 1996
(pound) (pound)
<S> <C> <C>
Shareholders Equity as stated under UK GAAP 243970 239902
US GAAP adjustments
Research and development ( 54824) ( 9964)
------- ------
Shareholders' Equity as stated under US GAAP 189146 229938
====== ======
</TABLE>
<PAGE>
EXHIBIT FS-6
SARACEN COMPUTER SYSTEMS LIMITED DIRECTORS'
REPORT AND FINANCIAL STATEMENTS FOR
THE YEAR ENDED 31ST OCTOBER 1996
<PAGE>
SARACEN COMPUTER SYSTEMS LIMITED
DIRECTORS' REPORT
AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED
31ST OCTOBER 1996
CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
1 Directors and officers
2 Directors' report
3 Directors' responsibilities
4 Auditors' report
5 Profit and loss account
6 Balance sheet
7-12 Notes to the financial
statements
13 Reconciliation between
UK and US Accounting Principles
</TABLE>
-------------------------------
Moore Stephens
Chartered Accountants
Birmingham
<PAGE>
- 1 -
SARACEN COMPUTER SYSTEMS LIMITED
DIRECTORS
J. D. Swingler
Mrs. D. J. Swingler
D. M. Billinge
A. P. Stephens
SECRETARY
Mrs. D. J. Swingler
AUDITORS
Moore Stephens, Chartered Accountants,
Charterhouse, 165 Newhall Street,
Birmingham B3 1SW
BANKERS
Barclays Bank plc, 15 High Street,
Uttoxeter, Staffordshire ST14 7HR
REGISTERED OFFICE
St. Mary's House, Church Street,
Uttoxeter, Staffordshire ST14 8AG
Company number: 1930247
<PAGE>
- 2 -
SARACEN COMPUTER SYSTEMS LIMITED
REPORT OF THE DIRECTORS
The directors present their report and audited financial
statements for the year ended 31st October 1996
REVIEW OF ACTIVITIES
The principal activities of the company have continued to be the design and
supply of computer systems for the laundry industry.
RESULTS AND DIVIDENDS
The balance sheet of the company as at 31st October 1996 together with the
profit and loss account for the year ended on that date are attached.
The directors do not recommend the payment of a dividend.
RESEARCH AND DEVELOPMENT
The company undertakes research and development to enhance its existing
products and maintain its standard in this field.
DIRECTORS AND DIRECTORS' INTERESTS
The directors who held office during the year and their interests in the
shares of the company at the beginning and end of the year were as follows:
<TABLE>
<CAPTION>
Ordinary shares of
(pound)1 each
1996 1995
<S> <C> <C>
J. D. Swingler 2500 2500
Mrs. D. J. Swingler 2000 2000
D. M. Billinge 500 500
A. P. Stephens - -
</TABLE>
BY ORDER OF THE BOARD
Mrs. D. J. Swingler
SECRETARY
29th January 1997
<PAGE>
- 3 -
SARACEN COMPUTER SYSTEMS LIMITED
STATEMENT OF DIRECTORS' RESPONSIBILITIES
Company law requires the directors to prepare financial statements for each
financial year which give a true and fair view of the state of affairs of the
company and of the profit or loss of the company for that period. In preparing
those financial statements, the directors are required to:
- select suitable accounting policies and then apply them consistently.
- make judgments and estimates that are reasonable and prudent.
- prepare the financial statements on the going concern basis unless it
is inappropriate to presume that the company will continue in
business.
The directors are responsible for keeping proper accounting records which
disclose with reasonable accuracy at any time the financial position of the
company and to enable them to ensure that the financial statements comply with
the Companies Act 1985. They are also responsible for safeguarding the assets of
the company and hence for taking reasonable steps for the prevention and
detection of fraud and other irregularities.
<PAGE>
- 4 -
AUDITORS' REPORT TO THE MEMBERS OF
SARACEN COMPUTER SYSTEMS LIMITED
We have audited the financial statements on pages 5 to 12 which have been
prepared under the historical cost convention and the accounting policies set
out on page 7.
RESPECTIVE RESPONSIBILITIES OF DIRECTORS AND AUDITORS
As described on page 3 the company's directors are responsible for the
preparation of financial statements. It is our responsibility to form an
independent opinion, based on our audit, on those statements and to report our
opinion to you.
BASIS OF OPINION
We conducted our audit in accordance with Auditing Standards issued by the
Auditing Practices Board. An audit includes examination, on a test basis, of
evidence relevant to the amounts and disclosures in the financial statements. It
also includes an assessment of the significant estimates and judgments made by
the directors in the preparation of the financial statements, and of whether the
accounting policies are appropriate to the company's circumstances, consistently
applied and adequately disclosed.
We planned and performed our audit so as to obtain all the information and
explanations which we considered necessary in order to provide us with
sufficient evidence to give reasonable assurance that the financial statements
are free from material misstatement, whether caused by fraud or other
irregularity or error. In forming our opinion we also evaluated the overall
adequacy of the presentation of information in the financial statements.
OPINION
In our opinion the financial statements give a true and fair view of the state
of the company's affairs at 31st October 1996 and of its profit for the year
then ended and have been properly prepared in accordance with the Companies Act
1985.
MOORE STEPHENS
CHARTERED ACCOUNTANTS
and REGISTERED AUDITOR
Charterhouse
165 Newhall Street
Birmingham B3 1SW
29th January 1997
<PAGE>
- 5 -
SARACEN COMPUTER SYSTEMS LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED
31ST OCTOBER 1996
<TABLE>
<CAPTION>
NOTES 1996 1995
(pound) (pound)
<S> <C> <C> <C>
TURNOVER 1 970374 751754
Cost of sales 371818 295418
------ ------
GROSS PROFIT 598556 456336
Administrative expenses 509393 476867
------ ------
OPERATING PROFIT/(LOSS) 4 89163 (20531)
Other interest and similar income - 15
------ ------
89163 (20516)
Interest payable 5 5986 4536
------ ------
PROFIT/(LOSS) ON ORDINARY ACTIVITIES
BEFORE TAXATION 83177 (25052)
Taxation 6 22845 (7351)
------ ------
PROFIT/(LOSS) FOR THE FINANCIAL YEAR 14 60332 (17701)
====== ======
</TABLE>
There are no recognised gains or losses other than those included in the profit
and loss account.
<PAGE>
- 6 -
SARACEN COMPUTER SYSTEMS LIMITED
BALANCE SHEET
31ST OCTOBER 1996
<TABLE>
<CAPTION>
NOTES 1996 1995
(pound) (pound)
<S> <C> <C> <C>
FIXED ASSETS
Intangible assets 7 9964 8210
Tangible assets 8 305161 307150
------ ------
315125 315360
CURRENT ASSETS
Stock 9 35825 31500
Debtors 10 158348 150930
Taxation - 5555
Cash at bank and in hand 15 59
------ ------
194188 188044
------ ------
CREDITORS: AMOUNTS FALLING DUE
WITHIN ONE YEAR
Bank loans and overdrafts (Secured) 11 48431 60022
Creditors 12 180690 236133
Taxation 17290 -
------ ------
246411 296155
------ ------
NET CURRENT LIABILITIES (52223) (108111)
------ ------
TOTAL ASSETS LESS CURRENT
LIABILITIES 262902 207249
CREDITORS: AMOUNTS FALLING DUE
AFTER MORE THAN ONE YEAR 12 23000 27679
------ ------
239902 179570
====== ======
CAPITAL AND RESERVES
Share capital 13 5000 5000
Profit and loss account 14 234902 174570
------ ------
239902 179570
====== ======
</TABLE>
These financial statements were approved by the Board on 29th January 1997
J. D. Swingler DIRECTOR
<PAGE>
- 7 -
SARACEN COMPUTER SYSTEMS LIMITED
NOTES TO THE
FINANCIAL STATEMENTS
FOR THE YEAR ENDED
31ST OCTOBER 1996
1. PRINCIPAL ACCOUNTING POLICIES
BASIS OF ACCOUNTING
The financial statements have been prepared in accordance with applicable
accounting standards and under the historical cost convention.
TURNOVER
Turnover represents the invoiced value of services and goods supplied
excluding value added tax.
FIXED ASSETS AND DEPRECIATION
Fixed assets are depreciated over their estimated useful lives using the
following rates:-
<TABLE>
<S> <C>
Freehold property Nil
Office equipment 10% Straight line
Motor vehicles 25% Straight line
Computers 20% Straight line
Research and development Nil
</TABLE>
Freehold property is not depreciated as it is considered that the residual
value and life of the property is such that depreciation would not be
material.
RESEARCH AND DEVELOPMENT
Research and development expenditure is charged against profit in the year
in which it is incurred, except insofar as it relates to a clearly defined
project and the benefits therefrom can reasonably be regarded as assured.
Expenditure so deferred is limited to the value of future benefits and is
amortised through the profit and loss account on a systematic basis over
the period expected to benefit from the project.
STOCKS
Stocks have been consistently valued at the lower of cost and net
realisable value.
DEFERRED TAXATION
Deferred taxation is calculated under the liability method. Taxation
deferred or accelerated by reason of material timing differences is
accounted for if such liability is expected to arise in the foreseeable
future.
<PAGE>
- 8 -
SARACEN COMPUTER SYSTEMS LIMITED
NOTES TO THE
FINANCIAL STATEMENTS
FOR THE YEAR ENDED
31st OCTOBER 1996
<TABLE>
<CAPTION>
2. DIRECTORS AND EMPLOYEES 1996 1995
(pound) (pound)
<S> <C> <C>
DIRECTORS' EMOLUMENTS
Fees - -
Other emoluments, including pension
contributions 225077 178716
------ ------
225077 178716
====== ======
Directors' emoluments, excluding pension contributions, are as follows:-
The Chairman and highest paid director 59388 62529
====== ======
</TABLE>
The number of other directors whose emoluments were within the ranges
were:-
<TABLE>
<CAPTION>
Number Number
<S> <C> <C>
Between(pound)20001 and(pound)25000 - 1
Between(pound)25001 and(pound)30000 1 -
Between(pound)30001 and(pound)35000 - 1
Between(pound)35001 and(pound)40000 1 -
Between(pound)40001 and(pound)45000 - 1
Between(pound)45001 and(pound)50000 1 -
== ==
</TABLE>
STAFF
Staff costs, including directors, during the year were as follows:
<TABLE>
<CAPTION>
(pound) (pound)
<S> <C> <C>
Wages and salaries 296350 267863
Social security costs 30587 28657
Other pension costs 51140 25140
------ ------
378077 321660
====== ======
</TABLE>
The average number of persons employed by the company in the year was:-
<TABLE>
<CAPTION>
Number Number
<S> <C> <C>
Creative 6 7
Administration 2 2
Directors 4 4
--- ---
12 13
=== ===
</TABLE>
<PAGE>
- 9 -
SARACEN COMPUTER SYSTEMS LIMITED
NOTES TO THE
FINANCIAL STATEMENTS
FOR THE YEAR ENDED
31ST OCTOBER 1996
<TABLE>
<CAPTION>
3. TURNOVER 1996 1995
(pound) (pound)
<S> <C> <C>
Geographical analysis:
United Kingdom 666372 709965
Rest of Europe 295937 41789
8065 -
------ ------
970374 751754
====== ======
</TABLE>
<TABLE>
<CAPTION>
4. OPERATING PROFIT/(LOSS) 1996 1995
(pound) (pound)
<S> <C> <C>
Operating profit/(loss) is stated after charging:
Depreciation and amounts written
off tangible fixed assets 39441 42076
(Profit) on disposal of assets (1548) (1600)
Research and development
Current year's expenditure 4249 5058
Directors' emoluments (note 2) 225077 178716
Auditors' remuneration 3000 2700
Property rentals - 1588
====== ======
</TABLE>
<TABLE>
<CAPTION>
5. INTEREST PAYABLE 1996 1995
(pound) (pound)
<S> <C> <C>
Bank loans and overdrafts 3447 2312
Finance lease charges 2539 2224
---- ----
5986 4536
==== ====
</TABLE>
<TABLE>
<CAPTION>
6. TAXATION ON ORDINARY ACTIVITIES 1996 1995
(pound) (pound)
<S> <C> <C>
Corporation tax at 25% (1995 25%) 23000 (3000)
Under/(over)provision for previous years (155) (3051)
Deferred taxation - (1300)
----- -----
22845 (7351)
===== =====
</TABLE>
<PAGE>
- 10 -
SARACEN COMPUTER SYSTEMS LIMITED
NOTES TO THE
FINANCIAL STATEMENTS
FOR THE YEAR ENDED
31ST OCTOBER 1996
7. INTANGIBLE FIXED ASSETS
<TABLE>
<CAPTION>
Research &
Development
<S> <C>
COST
At 31st October 1995 8210
Additions 1754
----
At 31st October 1996 9964
====
</TABLE>
8. TANGIBLE FIXED ASSETS
<TABLE>
<CAPTION>
FREEHOLD OFFICE MOTOR
PROPERTY EQUIPMENT VEHICLES COMPUTERS TOTAL
COST (pound) (pound) (pound) (pound) (pound)
<S> <C> <C> <C> <C> <C>
31st October 1995 183281 77288 86119 121627 468315
Additions - 679 7500 30425 38604
Disposals - - (6150) - (6150)
------ ----- ----- ------ ------
31st October 1996 183281 77967 87469 152052 500769
------ ----- ----- ------ ------
AMOUNTS WRITTEN OFF
31st October 1995 - 22868 40616 97681 161165
Disposal adjustment - - (4998) - (4998)
Charge for the year - 7788 21804 9849 39441
------ ----- ----- ------ ------
31st October 1996 - 30656 57422 107530 195608
------ ----- ----- ------ ------
NET BOOK VALUE
31st October 1996 183281 47311 30047 44522 305161
====== ===== ===== ===== ======
31st October 1995 183281 54420 45503 23946 307150
====== ===== ===== ===== ======
</TABLE>
The net book value includes an amount of (pound)25625 (1995 (pound)32993)
in respect of assets held under finance leases. The depreciation charge for
the year was (pound)14868 (1995 (pound)13464) in respect of these assets.
The cost of depreciable assets included above is (pound)317488.
<PAGE>
- 11 -
SARACEN COMPUTER SYSTEMS LIMITED
NOTES TO THE
FINANCIAL STATEMENTS
FOR THE YEAR ENDED
31ST OCTOBER 1996
<TABLE>
<CAPTION>
9. STOCKS 1996 1995
(pound) (pound)
<S> <C> <C>
Stocks comprise:
Consumable stock 24000 25060
Work in progress 5375 2460
Computer equipment 6450 3980
----- -----
35825 31500
===== =====
</TABLE>
<TABLE>
<CAPTION>
10. DEBTORS 1996 1995
(pound) (pound)
<S> <C> <C>
Trade debtors 151420 148463
Prepayments and accrued income 6928 2467
------ ------
158348 150930
====== ======
</TABLE>
11. BANK LOANS AND OVERDRAFTS
Bank loans and overdrafts are secured by a fixed and floating charge on the
assets of the company.
<TABLE>
<CAPTION>
12. CREDITORS AMOUNTS FALLING
DUE WITHIN ONE YEAR
1996 1995
(pound) (pound)
<S> <C> <C>
Trade creditors 149736 198291
Other taxation and social security payable 16123 14814
Hire purchase 9929 14378
Accruals and deferred income 4902 8650
------ ------
180690 236133
====== ======
</TABLE>
<TABLE>
<CAPTION>
AMOUNTS FALLING DUE AFTER
MORE THAN ONE YEAR
1996 1995
(pound) (pound)
<S> <C> <C>
Hire purchase 3000 7679
Other creditors 20000 20000
----- -----
23000 27679
===== =====
</TABLE>
<PAGE>
- 12 -
SARACEN COMPUTER SYSTEMS LIMITED
NOTES TO THE
FINANCIAL STATEMENTS
FOR THE YEAR ENDED
31ST OCTOBER 1996
<TABLE>
<CAPTION>
13. CALLED UP SHARE CAPITAL 1996 1995
(pound) (pound)
<S> <C> <C>
Ordinary shares of (pound)1 each:
Authorised 100000 100000
====== ======
Allotted, called up and fully paid 5000 5000
====== ======
</TABLE>
<TABLE>
<CAPTION>
14. PROFIT AND LOSS ACCOUNT 1996 1995
(pound) (pound)
<S> <C> <C>
At 31st October 1995 174570 192271
Transfer for the year 60332 (17701)
------ ------
At 31st October 1996 234902 174570
====== ======
</TABLE>
15. PENSION SCHEMES
The company operates defined contribution pension schemes for the directors
by way of payments to insurance companies. The pension cost charge
represents contributions payable by the company to the fund and amounted to
(POUND)51140 (1995 (pound)25140).
16. CASH FLOW STATEMENT
The company is not required to produce a cash flow statement under the
provisions of Financial Reporting Standard No. 1.
<PAGE>
- 13 -
SARACEN COMPUTER SYSTEMS LIMITED
RECONCILIATION BETWEEN UK AND US ACCOUNTING PRINCIPLES
The financial statements of the Company set out on pages 5 to 12 have been
prepared in accordance with generally accepted accounting principles
applicable in the United Kingdom ("UK GAAP") which differ in certain
significant respects from those applicable in the US ("US GAAP"). The
material differences as they apply to the Company's financial statements
are as follows:
INTANGIBLE FIXED ASSETS - RESEARCH AND DEVELOPMENT
Under UK GAAP research development expenditure is charged against profit in
the year in which it is incurred, except insofar as it relates to a clearly
defined project and the benefits therefrom can reasonably be regarded as
assured. Expenditure so deferred is limited to the value of future benefits
and is amortised through the profit and loss account on a systematic basis
over the period expected to benefit from the project. Development costs are
expensed as incurred, under US GAAP.
The following is a summary of the material adjustments to profit and
shareholders' equity which would be required had the financial statements
been prepared with US GAAP:
<TABLE>
<CAPTION>
(i) EFFECT ON RETAINED PROFIT 1996 1995
(pound) (pound)
<S> <C> <C>
Profit/(loss) as stated under UK GAAP 60332 (17701)
US GAAP adjustments
Research and development cost (1754) (8210)
------ ------
Net income (loss) as stated under US GAAP 58578 (25911)
====== ======
</TABLE>
<TABLE>
<CAPTION>
(ii) EFFECT ON SHAREHOLDERS' EQUITY 31ST OCT. 31ST OCT.
1996 1995
(pound) (pound)
<S> <C> <C>
Shareholders Equity as stated under UK GAAP 239902 179570
US GAAP adjustments
Research and development (9964) (8210)
------ ------
Shareholders' Equity as stated under US GAAP 229938 171360
====== ======
</TABLE>
<PAGE>
EXHIBIT FS-7
INFORMATION SUPPORT LTD. FINANCIAL
STATEMENTS 31ST MARCH 1998
<PAGE>
INFORMATION SUPPORT LTD
FINANCIAL STATEMENTS
31ST MARCH 1998
Company Registration Number 2743028
KARIA OWEN & CO
Chartered Certified Accountants & Registered Auditors
45 Long Lane
London
N3 2PY
<PAGE>
INFORMATION SUPPORT LTD
FINANCIAL STATEMENTS
YEAR ENDED 31ST MARCH 1998
<TABLE>
<CAPTION>
CONTENTS PAGE
<S> <C>
Officers and professional advisers 1
The directors' report 2
Auditors' report to the shareholders 4
Profit and loss account 5
Balance sheet 6
Cash flow statement 7
Notes to the financial statements 9
THE FOLLOWING PAGES DO NOT FORM PART OF THE FINANCIAL STATEMENTS
Detailed profit and loss account 18
Notes to the detailed profit and loss account 19
</TABLE>
<PAGE>
PAGE 1
INFORMATION SUPPORT LTD
OFFICERS AND PROFESSIONAL ADVISERS
THE BOARD OF DIRECTORS Mr R Roach
Mr A Grover
Mr R Dadd (resigned 1/7/98)
COMPANY SECRETARY Mr R Roach
REGISTERED OFFICE 21 Beaumont Street
Oxford
OX1 2NH
AUDITORS Karia Owen & Co
Chartered Certified Accountants
& Registered Auditors
45 Long Lane
London
N3 2PY
BANKERS National Westminster Bank
5 High Street
Bracknell
Berks.
RG12 1DH
<PAGE>
PAGE 2
INFORMATION SUPPORT LTD
THE DIRECTORS' REPORT
YEAR ENDED 31ST MARCH 1998
The directors present their report and the financial statements of the company
for the year ended 31st March 1998.
PRINCIPAL ACTIVITIES AND BUSINESS REVIEW
The principal activity of the company during the year was to provide
maintenance services to the computer industry and as resellers of computer
systems.
Turnover has increased by 10% to (pound)4,667,813 during the year, which is
less than previous years. However, the directors believe that signifcant
growth will be realised in the following year through organic growth,
acquisitions and mergers. Particularly encouraging has been the growth in
professional services. The company is in a good position to take advantage of
any opportunities which may arise in the future.
The directors aim to maintain the management policies which have resulted in
the company's substantial growth in recent years.
RESULTS AND DIVIDENDS
The trading results for the year, and the company's financial position at the
end of the year are shown in the attached financial statements.
The directors have not recommended a dividend.
THE DIRECTORS AND THEIR INTERESTS IN SHARES OF THE COMPANY
The directors who served the company during the year together with their
beneficial interests in the shares of the company were as follows:
<TABLE>
<CAPTION>
Class of share At 31 March 1998 At 1 April 1997
<S> <C> <C> <C>
Mr R Roach Ordinary 413,233 413,233
Mr A Grover Ordinary 407,013 407,013
Mr R Dadd Ordinary 208,183 208,183
======= =======
</TABLE>
Details of the company's fixed assets are in notes 8 to 9 in the accounts.
DIRECTORS' RESPONSIBILITIES
Company law requires the directors to prepare financial statements for each
financial year which give a true and fair view of the state of affairs of the
company at the end of the year and of the profit or loss for the year then
ended.
<PAGE>
PAGE 3
INFORMATION SUPPORT LTD
THE DIRECTORS' REPORT (CONTINUED)
YEAR ENDED 31ST MARCH 1998
DIRECTORS' RESPONSIBILITIES (CONTINUED)
In preparing those financial statements, the directors are required to:
select suitable accounting policies, as described on pages 9 to 10, and
then apply them consistently;
make judgements and estimates that are reasonable and prudent;
state whether applicable accounting standards have been followed, subject to
any material departures disclosed and explained in the financial statements;
and
prepare the financial statements on the going concern basis unless it is
inappropriate to presume that the company will continue in business.
The directors are responsible for keeping proper accounting records which
disclose with reasonable accuracy at any time the financial position of the
company and to enable them to ensure that the financial statements comply
with the Companies Act 1985. The directors are also responsible for
safeguarding the assets of the company and hence for taking reasonable steps
for the prevention and detection of fraud and other irregularities.
AUDITORS
A resolution to re-appoint Karia Owen & Co as auditors for the ensuing year
will be proposed at the annual general meeting in accordance with section 385
of the Companies Act 1985.
Registered office: Signed by order of the directors
21 Beaumont Street
Oxford
OX I 2NH
Mr R Roach
Company Secretary
Approved by the directors on 9-7 1998
--------- -- /s/ R ROACH
<PAGE>
PAGE 4
INFORMATION SUPPORT LTD
AUDITORS' REPORT TO THE SHAREHOLDERS
YEAR ENDED 31ST MARCH 1998
We have audited the financial statements on pages 5 to 16 which have been
prepared under the historical cost convention and the accounting policies set
out on pages 9 to 10.
RESPECTIVE RESPONSIBILITIES OF THE DIRECTORS AND THE AUDITORS
As described on pages 2 to 3, the company's directors are responsible for the
preparation of the financial statements. It is our responsibility to form an
independent opinion, based on our audit, on those statements and to report our
opinion to you.
BASIS OF OPINION
We conducted our audit in accordance with Auditing Standards issued by the
Auditing Practices Board. An audit includes examination, on a test basis, of
evidence relevant to the amounts and disclosures in the financial statements.
It also includes an assessment of the significant estimates and judgements
made by the directors in the preparation of the financial statements, and of
whether the accounting policies are appropriate to the company's
circumstances, consistently applied and adequately disclosed.
We planned and performed our audit so as to obtain all the information and
explanations which we considered necessary in order to provide us with
sufficient evidence to give reasonable assurance that the financial
statements are free from material misstatement, whether caused by fraud or
other irregularity or error. In forming our opinion we also evaluated the
overall adequacy of the presentation of information in the financial
statements.
In our opinion the financial statements give a true and fair view of the
company's state of affairs as at 31st March 1998 and of its profit for the
year then ended, and have been properly prepared in accordance with the
Companies act 1985.
In our opinion the company is entitled to the exemption conferred by section
248 of the Companies Act 1985 from the requirement to prepare Group Accounts
for the financial year ended 31st March 1998.
45 Long Lane KARIA OWEN & CO
London Chartered Certified Accountants
N3 2PY & Registered Auditors
10/7/ 1998
- ------- -- /s/ KARIA OWEN & CO
<PAGE>
PAGE 5
INFORMATION SUPPORT LTD
PROFIT AND LOSS ACCOUNT
YEAR ENDED 31ST MARCH 1998
<TABLE>
<CAPTION>
*
UNAUDITED
PERIOD
1/4/1998
TO
12/10/98 1998 1997
NOTE (POUND) (POUND) (POUND)
<S> <C> <C> <C> <C>
TURNOVER 2 2,082,973 4,667,813 4,235,112
Cost of sales 1,737,696 3,643,500 3,322,141
--------- --------- ---------
GROSS PROFIT 345,277 1,024,313 912,971
Distribution costs 334,042 367,235 239,858
Administrative expenses 629,693 601,228 670,110
Other operating income (19,758) (39,517) (40,151)
--------- --------- ---------
OPERATING PROFIT/(LOSS) 3 (598,700) 95,367 43,154
Interest payable 6 (12,360) (14,256) (19,428)
--------- --------- ---------
PROFIT/(LOSS) ON ORDINARY (604,880) 81,111 23,726
ACTIVITIES BEFORE TAXATION
Tax on profit on ordinary activities 7 - 28,042 21,742
--------- --------- ---------
RETAINED PROFIT FOR THE YEAR/PERIOD (604,880) 53,069 1,984
Balance brought forward (41,626) (94,695) (96,678)
--------- ---------
Balance carried forward (646,506) (41,626) (94,694)
========= ========= =========
</TABLE>
The company has no recognised gains or losses other than the results for the
year as set out above.
All of the activities of the company are classed as continuing.
*THE RESULTS FOR THE PERIOD FROM 1ST APRIL 1998 12TH OCTOBER 1998 ARE UNAUDITED.
THE NOTES ON PAGES 9 TO 16 FORM PART OF THESE FINANCIAL STATEMENTS.
<PAGE>
PAGE 6
INFORMATION SUPPORT LTD
BALANCE SHEET
31ST MARCH 1998
<TABLE>
<CAPTION>
1998 1997
NOTE (POUND) (POUND) (POUND) (POUND)
<S> <C> <C> <C> <C> <C>
FIXED ASSETS
Intangible assets 8 265,716 288,235
Tangible assets 9 76,753 99,268
Investments 10 2 -
------- -------
342,471 387,503
CURRENT ASSETS
Stocks 11 236,253 410,417
Debtors 12 1,433,161 1,035,843
Cash at bank and in hand 1,131 918
--------- ---------
1,670,545 1,447,178
CREDITORS: Amounts falling due
within one year 13 (1,938,700) (1,813,433)
----------- ----------
NET CURRENT LIABILITIES (268,155) (366,255)
------- ----------
TOTAL ASSETS LESS CURRENT LIABILITIES 74,316 21,248
======= ==========
CAPITAL AND RESERVES
Called-up equity share capital 16 115,942 115,942
Profit and loss account (41,626) (94,694)
------- ----------
SHAREHOLDERS' FUNDS 17 74,316 21,248
======= ==========
</TABLE>
These financial statements were approved by the directors on
the 9-7 1998, and are signed on their behalf by:
------------ --
/s/ MR R ROACH /s/ MR A GROVER
-------------- ---------------
MR R ROACH MR A GROVER
THE NOTES ON PAGES 9 TO 16 FORM PART OF THESE FINANCIAL STATEMENTS.
<PAGE>
PAGE 7
INFORMATION SUPPORT LTD
CASH FLOW STATEMENT
YEAR ENDED 31ST MARCH 1998
<TABLE>
<CAPTION>
1998 1997
(POUND) (POUND) (POUND) (POUND)
<S> <C> <C> <C> <C>
NET CASH INFLOW FROM 27,858 90,734
OPERATING ACTIVITIES
RETURNS ON INVESTMENTS AND
SERVICING OF FINANCE
Interest paid (14,256) (19,428)
-------- -------
NET CASH OUTFLOW FROM RETURNS ON (14,256) (19,428)
INVESTMENTS AND SERVICING OF FINANCE
TAXATION (25,150) (21,354)
CAPITAL EXPENDITURE
Payments to acquire tangible fixed assets (18,255) (58,073)
-------- -------
NET CASH OUTFLOW FROM (18,255) (58,073)
CAPITAL EXPENDITURE
ACQUISITIONS AND DISPOSALS
Net outflow from shares in group (2) -
undertakings
-------- -------
NET CASH OUTFLOW FROM (2) -
ACQUISITIONS AND DISPOSALS
-------- -------
CASH OUTFLOW BEFORE (29,805) (8,121)
FINANCING
FINANCING
Net outflow from debenture loans - (38,020)
-------- -------
NET CASH OUTFLOW FROM - (38,020)
FINANCING
-------- -------
DECREASE IN CASH (29,805) (46,141)
======== =======
</TABLE>
This cash flow statement has been prepared in accordance with the revised
Statement of Standard Accounting Practice-set out in Financial Reporting
Standard 1 (Revised 1996) issued in October 1996 by the Accounting Standards
Board. All comparatives have been restated to comply with the new Standard.
THE NOTES ON PAGES 9 TO 16 FORM PART OF THESE FINANCIAL STATEMENTS.
<PAGE>
PAGE 8
INFORMATION SUPPORT LTD
CASH FLOW STATEMENT(continued)
YEAR ENDED 31ST MARCH 1998
RECONCILIATION OF OPERATING PROFIT TO
NET CASH INFLOW FROM OPERATING ACTIVITIES
<TABLE>
<CAPTION>
1998 1997
(POUND) (POUND)
<S> <C> <C>
Operating profit 95,367 43,154
Amortisation 22,519 46,223
Depreciation 40,770 28,020
Decrease/(Increase) in stocks 174,164 (117,554)
Increase in debtors (397,318) (339,129)
Increase in creditors 92,356 430,020
-------- --------
NET CASH INFLOW FROM OPERATING ACTIVITIES 27,858 90,734
======== ========
</TABLE>
RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBT
<TABLE>
<CAPTION>
1998 1997
(POUND) (POUND)
<S> <C> <C>
Decrease in cash in the period (29,805) (46,141)
Cash outflow from debentures - 38,020
NET DEBT AT 1ST APRIL 1997 (59,046) (50,925)
------- -------
NET DEBT AT 31ST MARCH 1998 (88,852) (59,046)
======= =======
</TABLE>
ANALYSIS OF CHANGES IN NET DEBT
<TABLE>
<CAPTION>
AT 1 APR CASH FLOWS AT 31 MAR
1997 1998
(POUND) (POUND) (POUND)
<S> <C> <C> <C>
Net cash:
Cash in hand and at bank 918 213 1,131
Overdrafts (59,964) (30,019) (89,983)
------- ------- -------
NET DEBT (59,046) (29,806) (88,852)
======= ======= =======
</TABLE>
THE NOTES ON PAGES 9 TO 16 FORM PART OF THESE FINANCIAL STATEMENTS.
<PAGE>
PAGE 9
INFORMATION SUPPORT LTD
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 31ST MARCH 1998
1. ACCOUNTING POLICIES
BASIS OF ACCOUNTING
The financial statements have been prepared under the historical cost
convention, and in accordance with applicable accounting standards.
CONSOLIDATION
In the opinion of the directors, the company and its subsidiary
undertakings comprise a medium-sized group. The company has therefore
taken advantage of the exemption provided by Section 248 of the
Companies Act 1985 not to prepare group accounts.
TURNOVER
The turnover shown in the profit and loss account represents amounts
invoiced during the year, exclusive of Value Added Tax.
GOODWILL
Purchased goodwill is written off to the profit & loss account over its
estimated useful life. This year the directors have increased the write
off period to 20 years from 10 years. The directors believe that their
original estimate of 10 years was inaccurate and have accordingly reduced
the amortisation charge this year to reflect the revised estimated useful
life of 20 years. Goodwill which is generated by the activities of the
company is not recognised as an asset in the balance sheet and the
associated costs are written off to the profit and loss account when they
are incurred.
AMORTISATION
Amortisation is calculated so as to write off the cost of an asset, less
its estimated residual value, over the useful economic life of that asset
as follows:
Goodwill - 5% Straight Line
DEPRECIATION
Depreciation is calculated so as to write off the cost of an asset, less
its estimated residual value, over the useful economic life of that asset
as follows:
Equipment - 20% Straight Line
STOCKS
Stocks are valued at the lower of cost and net realisable value, after
making due allowance for obsolete and slow moving items.
OPERATING LEASE AGREEMENTS
Rentals applicable to operating leases where substantially all of the
benefits and risks of ownership remain with the lessor are charged
against profits as incurred.
PENSION COSTS
The company operates a defined contribution pension scheme for employees.
The assets of the scheme are held separately from those of the company.
The annual contributions payable are charged to the profit and loss
account
<PAGE>
PAGE 10
INFORMATION SUPPORT LTD
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 31ST MARCH 1998
1. ACCOUNTING POLICIES (CONTINUED)
INCOME
Revenue from all maintenance contracts are credited to turnover in equal
monthly instalments. Associated expenditure is written off in the month
its incurred.
2. TURNOVER
The turnover and profit before tax are attributable to the principal
activity of the company. An analysis of turnover is given below:
<TABLE>
<CAPTION>
1998 1997
(POUND) (POUND)
<S> <C> <C>
United Kingdom 4,667,813 4,235,112
========= =========
</TABLE>
3. OPERATING PROFIT
Operating profit is stated after charging:
<TABLE>
<CAPTION>
1998 1997
(POUND) (POUND)
<S> <C> <C>
Staff pension contributions 26,390 32,447
Amortisation 22,519 46,223
Depreciation 40,770 28,020
Auditors' remuneration
- as auditors 5,500 5,400
========= =========
</TABLE>
4. PARTICULARS OF EMPLOYEES
The average number of staff employed by the company during the financial
year amounted to:
<TABLE>
<CAPTION>
1998 1997
No. No.
<S> <C> <C>
Number of field/workshop staff 31 33
Number of distribution staff 13 7
Number of administrative staff 7 7
------ ------
51 47
====== ======
</TABLE>
<PAGE>
PAGE 11
INFORMATION SUPPORT LTD
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 31ST MARCH 1998
4. PARTICULARS OF EMPLOYEES (CONTINUED)
The aggregate payroll costs of the above were:
<TABLE>
<CAPTION>
1998 1997
(POUND) (POUND)
<S> <C> <C>
Wages Salaries & 1,302,750 967,943
social security costs
Other pension costs 40,470 46,487
--------- ---------
1,343,220 1,014,430
========= =========
</TABLE>
5. DIRECTORS' EMOLUMENTS
The directors' aggregate emoluments in respect of qualifying services
were:
<TABLE>
<CAPTION>
1998 1997
(POUND) (POUND)
<S> <C> <C>
Emoluments receivable 158,730 161,447
Pension contributions 14,080 14,040
--------- ---------
172,810 175,487
========= =========
</TABLE>
The number of directors who are under company pension schemes were as
follows:
<TABLE>
<CAPTION>
1998 1997
No. No.
<S> <C> <C>
Defined contribution schemes 3 3
==== ====
</TABLE>
6. INTEREST PAYABLE
<TABLE>
<CAPTION>
1998 1997
(POUND) (POUND)
<S> <C> <C>
Interest payable on bank borrowing 14,256 16,412
Other similar charges payable - 3,016
-------- --------
14,256 19,428
======== ========
</TABLE>
<PAGE>
PAGE 12
INFORMATION SUPPORT LTD
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 31ST MARCH 1998
7. TAX ON PROFIT ON ORDINARY ACTIVITIES
<TABLE>
<CAPTION>
1998 1997
(POUND) (POUND)
<S> <C> <C>
In respect of the year:
Corporation tax based on the results for
the year at 21% (1997 - 24%) 25,067 25,150
Adjustment in respect of previous years:
Corporation tax 2,975 (3,408)
------ ------
28,042 21,742
====== ======
</TABLE>
8. INTANGIBLE FIXED ASSETS
<TABLE>
<CAPTION>
GOODWILL
<S> <C>
COST
At 1st April 1997 and 31st March 1998 450,376
========
AMORTISATION
At 1st April 1997 162,141
Charge for the year 22,519
--------
At 31st March 1998 184,660
========
NET BOOK VALUE
At 31st March 1998 265,716
========
At 31st March 1997 288,235
========
</TABLE>
<PAGE>
PAGE 13
INFORMATION SUPPORT LTD
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 31ST MARCH 1998
9. TANGIBLE FIXED ASSETS
<TABLE>
<CAPTION>
FIXTURES
FITTING &
EQUIPMENT
(POUND)
<S> <C>
COST
At 1st April 1997 203,851
Additions 18,255
-------
AT 31ST MARCH 1998 222,106
=======
DEPRECIATION
At 1st April 1997 104,583
Charge for the year 40,770
-------
AT 31ST MARCH 1998 145,353
=======
NET BOOK VALUE
AT 31ST MARCH 1998 76,753
=======
At 31st March 1997 99,268
=======
</TABLE>
10. INVESTMENTS
Shares in Group Undertaking
<TABLE>
<CAPTION>
(POUND)
<S> <C>
COST
Additions 2
------
At 31st March 1998 2
======
NET BOOK VALUE
At 31st March 1998 2
======
</TABLE>
The company owns 100% of the issued share capital of ISL Software Solutions Ltd
and the aggregate amount of its capital and reserves and the results for the
year ended 31st March 1998 were as follows:
AGGREGATE CAPITAL AND RESERVES
Capital & reserves (43,911)
PROFIT AND (LOSS) FOR THE YEAR
Results (43,913)
Under the provision of section 248 of the Companies Act 1985 the company is
exempt from preparing consolidated accounts and has not done so, therefore the
accounts show information about the company as an individual entity.
<PAGE>
PAGE 14
INFORMATION SUPPORT LTD
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 31ST MARCH 1998
11. STOCKS
<TABLE>
<CAPTION>
1998 1997
(POUND) (POUND)
<S> <C> <C>
Computer Spares 89,514 139,553
Sales Stock 146,739 270,864
------- -------
236,253 410,417
======= =======
</TABLE>
12. DEBTORS
<TABLE>
<CAPTION>
1998 1997
(POUND) (POUND)
<S> <C> <C>
Trade debtors 1,072,818 872,538
Amounts owed by group undertakings 131,195 -
Other debtors 20,000 -
Prepayments and accrued income 209,148 163,305
------- -------
1,433,161 1,035,843
========= =========
</TABLE>
13. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
<TABLE>
<CAPTION>
1998 1997
(POUND) (POUND)
<S> <C> <C>
Bank loans and overdrafts (secured) * 89,983 59,964
Trade creditors 639,622 607,212
Other creditors including
taxation and social security:
Corporation tax 28,042 25,150
PAYE and social security 46,781 56,990
VAT 148,443 171,688
------- -------
223,266 253,828
Accruals and deferred income 985,829 892,429
--------- ---------
1,938,700 1,813,433
========= =========
</TABLE>
* The bank overdraft is secured by way of a fixed and floating charge on the
assets of the company.
<PAGE>
PAGE 15
INFORMATION SUPPORT LTD
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 31ST MARCH 1998
14. COMMITMENTS UNDER OPERATING LEASES
At 31st March 1998 the company had annual commitments under
non-cancellable operating leases as set out below.
<TABLE>
<CAPTION>
1998 1997
LAND & OTHER Land & Other
BUILDINGS ITEMS Buildings Items
<S> <C> <C> <C> <C>
Operating leases which expire:
Within 1 year 70,125 130,089 70,125 92,386
Within 2 to 5 years 87,656 95,276 157,781 75,936
------- ------- ------- -------
157,781 225,365 227,906 168,322
======= ======= ======= =======
</TABLE>
15. RELATED PARTY TRANSACTIONS
During the year the company paid consultancy fees to Mr C Williams of
(pound)14,689(1997 (pound)7823) in the normal course of business.
Mr C Williams is a shareholder of the company and an ex-director.
16. SHARE CAPITAL
AUTHORISED SHARE CAPITAL:
<TABLE>
<CAPTION>
1998 1997
(POUND) (POUND)
<S> <C> <C>
1,600,000 Ordinary shares of (pound)0.05 each 80,000 80,000
718,840 Ordinary 'A' shares of (pound)0.05 each 35,942 35,942
------- -------
115,942 115,942
------- -------
</TABLE>
ALLOTTED, CALLED UP AND FULLY PAID:
<TABLE>
<CAPTION>
1998 1997
No. (POUND) No. (POUND)
<S> <C> <C> <C> <C>
Ordinary shares 1,600,000 80,000 1,600,000 80,000
Ordinary 'A' shares 718,840 35,942 718,840 35,942
--------- ------- --------- -------
2,318,840 115,942 2,318,840 115,942
========= ======= ========= =======
</TABLE>
<PAGE>
PAGE 16
INFORMATION SUPPORT LTD
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 31ST MARCH 1998
17. RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS
<TABLE>
<CAPTION>
1998 1997
(POUND) (POUND)
<S> <C> <C>
Profit for the financial year 53,069 1,984
Opening shareholders' equity funds 21,247 19,264
------ ------
Closing shareholders' equity funds 74,316 21,248
====== ======
</TABLE>
18. RECONCILIATION BETWEEN UK AND US ACCOUNTING PRINCIPLES
The financial statements of the company set out on pages 5 to 16 have
been prepared in accordance with generally accepted accounting principles
in the United Kingdom ("UK GAAP") which do not differ in any material
aspect from those applicable in the US ("US GAAP").
<PAGE>
PAGE 17
INFORMATION SUPPORT LTD
MANAGEMENT INFORMATION
YEAR ENDED 31ST MARCH 1998
THE FOLLOWING PAGES DO NOT FORM PART OF THE STATUTORY FINANCIAL STATEMENTS
WHICH ARE THE SUBJECT OF THE AUDITORS' REPORT ON PAGE 4.
<PAGE>
PAGE 18
INFORMATION SUPPORT LTD
DETAILED PROFIT AND LOSS ACCOUNT
YEAR ENDED 31ST MARCH 1998
<TABLE>
<CAPTION>
1998 1997
(POUND) (POUND)
<S> <C> <C>
TURNOVER
Sale of Computer Systems 2,475,069 2,565,669
Contract Revenue 2,192,744 1,669,443
--------- ---------
4,667,813 4,235,112
COST OF SALES
Purchases 1,906,999 1,976,919
Direct wages 757,316 552,358
Motor Expenses 269,038 203,416
Time & Materials 182,931 62,883
Subcontract 147,274 116,421
Commissions 111,773 149,293
Stock W/Off 65,797 73,759
Directors salaries 51,150 41,876
In House Usage 40,340 36,970
Communications 32,223 29,696
Freight 24,132 19,957
Training & Documentation 23,981 13,308
Travel 23,074 30,500
Third Party Repair 7,472 14,785
--------- ---------
3,643,500 3,322,141
--------- ---------
GROSS PROFIT 1,024,313 912,971
OVERHEADS
Administrative expenses 601,228 670,110
Distribution costs 367,235 239,858
------- -------
968,463 909,968
------- -------
55,850 3,003
OTHER OPERATING INCOME
Rent receivable 39,517 40,151
------- -------
OPERATING PROFIT 95,367 43,154
Interest payable 14,256 19,428
------- -------
PROFIT ON ORDINARY ACTIVITIES 81,111 23,726
======= =======
</TABLE>
<PAGE>
PAGE 19
INFORMATION SUPPORT LTD
NOTES TO THE DETAILED PROFIT AND LOSS ACCOUNT
YEAR ENDED 31ST MARCH 1998
<TABLE>
<CAPTION>
1998 1997
(POUND) (POUND)
<S> <C> <C>
DISTRIBUTION COSTS
Distribution wages 292,793 122,580
Motor 64,611 46,086
Directors salaries 46,200 63,655
Advertising (36,369) 7,537
------- -------
367,235 239,858
======= =======
ADMINISTRATIVE EXPENSES
PERSONNEL COSTS:
Administrative staff salaries 107,991 145,598
Directors salaries 47,300 41,876
Staff pension contributions 26,390 32,447
Directors pension contributions 14,080 14,040
------- -------
195,761 233,961
ESTABLISHMENT EXPENSES:
Rent, rates and water 105,195 100,727
Light and heat 21,284 24,949
Repairs and maintenance 5,512 3,439
------- -------
131,991 129,115
GENERAL EXPENSES:
Depreciation of office equipment 40,770 28,020
Telephone 37,834 29,795
Amortisation 22,519 46,223
Consultancy fees 22,092 16,414
Motor expenses 20,261 27,744
Travel and subsistence 20,079 15,143
Printing, stationery and postage 19,518 15,717
Legal and professional fees 18,411 18,321
Insurance 16,599 9,452
Recruitment & Training 15,248 2,263
Entertaining 13,381 7,836
Health Insurance 8,713 4,735
Auditors remuneration 5,500 5,400
Accountancy fees 4,000 -
Sundry expenses 301 91
------- -------
265,226 227,154
FINANCIAL COSTS:
Bad debts written off 8,250 79,880
------- -------
592,978 590,230
======= =======
</TABLE>
<PAGE>
PAGE 20
INFORMATION SUPPORT LTD
NOTES TO THE DETAILED PROFIT AND LOSS ACCOUNT
YEAR ENDED 31ST MARCH 1998
<TABLE>
<CAPTION>
1998 1997
(POUND) (POUND)
<S> <C> <C>
INTEREST PAYABLE
Bank interest payable 14,256 16,412
Debenture interest payable - 3,016
------ ------
14,256 19,428
====== ======
</TABLE>
<PAGE>
EXHIBIT FS-8
INFORMATION SUPPORT LIMITED REPORT AND
ACCOUNTS YEAR ENDED 31ST MARCH 1997
<PAGE>
INFORMATION SUPPORT LIMITED
REPORT AND ACCOUNTS
YEAR ENDED 31ST MARCH 1997
COMPANY NUMBER : 2743028
<PAGE>
INFORMATION SUPPORT LIMITED 2
REPORT AND ACCOUNTS
1997
DIRECTORS: R.ROACH
A.GROVER
R.DADD
SECRETARY: R.ROACH
REGISTERED OFFICE: 21 BEAUMONT STREET
OXFORD
0X1 2NH
REGISTERED AUDITORS: KARIA, OWEN & CO
CHARTERED CERTIFIED ACCOUNTANTS
45 LONG LANE
LONDON N3 2PY
BANKERS: NATIONAL WESTMINSTER BANK
BRACKNELL,HIGH STREET BRANCH
5 HIGH STREET
BRACKNELL
BERKS RG12 1DH
<PAGE>
INFORMATION SUPPORT LIMITED 3
INDEX TO
REPORT AND ACCOUNTS
1997
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
4 DIRECTORS REPORT
6 AUDITORS REPORT
7 BALANCE SHEET
8 PROFIT AND LOSS ACCOUNT
9 ACCOUNTING POLICIES
11 NOTES TO THE BALANCE SHEET AND PROFIT AND LOSS ACCOUNT
NON STATUTORY INFORMATION
15 TRADING AND PROFIT AND LOSS ACCOUNT
16 NOTES TO THE TRADING AND PROFIT AND LOSS ACCOUNT
</TABLE>
<PAGE>
INFORMATION SUPPORT LIMITED 4
REPORT OF THE DIRECTORS
The Directors present their Annual Report together with the Audited Accounts of
the Company for the year ended 31st March 1997.
STATEMENT OF DIRECTORS' RESPONSIBILITIES
Company law requires the Directors to prepare financial statements for each
financial year which give a true and fair view of the state of affairs of the
Company and of the profit or loss of the Company for that period. In preparing
those financial statements, the Directors are required to:
- select suitable accounting policies and then apply them consistently;
- make judgements and estimates that are reasonable and prudent;
- state whether applicable accounting standards have been followed,
subject to any material departures disclosed and explained in the
financial statements;
- prepare the financial statements on the going concern basis unless it
is inappropriate to presume that the Company will continue in
business.
The Directors are responsible for keeping proper accounting records which
disclose with reasonable accuracy at any time the financial position of the
Company and to enable them to ensure that the financial statements comply with
the Companies Act 1985. They are also responsible for safeguarding the assets of
the Company and hence for taking reasonable steps for the prevention and
detection of fraud and other irregularities.
PRINCIPAL ACTIVITIES
The Company has continued throughout the year to provide maintenance services to
the computer industry and as resellers of computer systems.
DIRECTORS AND INTERESTS IN SHARES
The Directors who served during the year and their beneficial interests in the
Issued Share Capital of the Company, both at the beginning and end of the year,
were as-follows:
<TABLE>
<CAPTION>
ORDINARY SHARES OF 5P EACH
1997 1996
---- ----
<S> <C> <C>
R.ROACH 413,233 413,233
A.GROVER 407,013 407,013
R.DADD 208,183 208,183
</TABLE>
<PAGE>
INFORMATION SUPPORT LIMITED 5
REPORT OF THE DIRECTORS
AUDITORS
Messrs. Karia, Owen & Co. have expressed their willingness to continue in office
and a resolution to re-appoint them will be proposed at the annual general
meeting, in accordance with Section 385 of the Companies Act 1985.
In preparing this report we have taken advantage of the special exemptions
applicable to small companies.
BY ORDER OF THE BOARD
/s/ R. Roach
- ---------------------
R.ROACH
SECRETARY
DATE: l5/12/97
<PAGE>
INFORMATION SUPPORT LIMITED 6
AUDITOR'S REPORT
TO THE MEMBERS OF
INFORMATION SUPPORT LIMITED
We have audited the financial statements on pages 7 to 14 which have been
prepared under the historical cost convention and the accounting policies set
out on page 9.
RESPECTIVE RESPONSIBILITIES OF DIRECTORS AND AUDITORS
As described on page 4 the Company's Directors are responsible for the
preparation of financial statements. It is our responsibility to form an
independent opinion, based on our audit, on those statements and to report our
opinion to you.
BASIS OF OPINION
We conducted our audit in accordance with Auditing Standards issued by the
Auditing Practices Board. An audit includes examination, on a test basis, of
evidence relevant to the amounts and disclosures in the financial statements. It
also includes an assessment of the significant estimates and judgements made by
the Directors in the preparation of the financial statements, and of whether the
accounting policies are appropriate to the Company's circumstances, consistently
applied and adequately disclosed.
We planned and performed our audit so as to obtain all the information and
explanations which we considered necessary in order to provide us with
sufficient evidence to give reasonable assurance that the financial statements
are free from material misstatement, whether caused by fraud or other
irregularity or error. In forming our opinion we also evaluated the overall
adequacy of the presentation of information in the financial statements.
OPINION
In our opinion the financial statements give a true and fair view of the
Company's affairs as at 31st March 1997 and of its profit for the year then
ended and have been properly prepared in accordance with the provisions of the
Companies Act, 1985 applicable to small companies.
45 LONG LANE KARIA, OWEN & CO
LONDON N3 2PY REGISTERED AUDITORS
CHARTERED CERTIFIED ACCOUNTANTS
DATE: 18/12/97 KARIA, OWEN & CO.
<PAGE>
INFORMATION SUPPORT LIMITED 7
BALANCE SHEET
AS AT 31ST MARCH 1997
<TABLE>
<CAPTION>
1996
Note (pound) (pound) (pound) (pound)
---- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
FIXED ASSETS
Intangible Assets 2 288,235 334,458
Tangible Assets 3 99,268 69,215
387,503 403,673
CURRENT ASSETS
Stock 4 410,417 292,863
Debtors 5 1,035,843 696,714
Cash in Hand 918 1,045
1,447,178 990,622
CREDITORS
Amounts falling due
within one year 6 1,813,434 1,375,032
NET CURRENT LIABILITIES (366,256) (384,410)
TOTAL ASSETS LESS CURRENT LIABILITIES 21,247 19,263
CAPITAL AND RESERVES
Called up Share Capital 7 115,942 115,942
Profit and Loss Account 8 (94,695) (96,679)
SHAREHOLDERS' FUNDS 9
Equity 21,247 19,263
</TABLE>
In preparing these accounts the Directors have taken advantage of the exemptions
applied to small companies conferred by Part I of Schedule 8 of the Companies
Act 1985 and have done so on the basis that, in their opinion, the company
satisfies the criteria for exemption as a small company.
These financial statements were approved by the Board on Date: 15/12/97
/s/ R.Roach /s/ A.Grover
- ------------------------- ------------------------
R. ROACH - Director A. GROVER - Director
<PAGE>
INFORMATION SUPPORT LIMITED 8
PROFIT AND LOSS ACCOUNT
YEAR ENDED 31ST MARCH 1997
<TABLE>
<CAPTION>
1996
Note (pound) (pound)
---- ------- -------
<S> <C> <C> <C>
TURNOVER 4,235,112 2,827,504
COST OF SALES (3,322,141) (2,128,685)
---------- ----------
GROSS PROFIT 912,971 698,819
DISTRIBUTION COSTS (239,858) (210,842)
ADMINISTRATIVE EXPENSES 10 (670,110) (450,683)
OTHER OPERATING INCOME 40,151 -
---------- ----------
OPERATING PROFIT 43,154 37,294
INTEREST PAYABLE 11 (19,428) (18,334)
---------- ----------
PROFIT ON ORDINARY ACTIVITIES
BEFORE TAXATION 23,726 18,960
TAX ON PROFIT ON ORDINARY ACTIVITIES 12 (21,742) (24,927)
---------- ----------
PROFIT/(LOSS) ON ORDINARY ACTIVITIES
AFTER TAXATION 8 1,984 (5,967)
========== ==========
</TABLE>
All amounts relate to continuing activities.
There were no recognised gains and losses during the year.
The notes on pages 9 to 14 form part of these financial statements.
<PAGE>
INFORMATION SUPPORT LIMITED 9
NOTES TO THE ACCOUNTS
YEAR ENDED 31ST MARCH 1997
1.ACCOUNTING POLICIES
The Accounts are prepared under the historical cost convention, and in
accordance with applicable accounting standards. The following accounting
policies have been applied:
a.DEPRECIATION
Depreciation is calculated so as to write off the cost of fixed assets over
their expected useful working lives as follows:
<TABLE>
<CAPTION>
Annual Rate Basis
%
----------- -----
<S> <C> <C>
Fixtures, Fittings & Equipment 20 Straight Line
Goodwill 10 Straight Line
</TABLE>
Goodwill relates to purchased goodwill and is being amortised through the
Profit and Loss Account over its estimated life of 10 years.
b.STOCK
Stock is valued at the lower of cost and net realisable value after making
due allowance for any obsolete and slow moving items.
c.TURNOVER
Turnover represents invoiced value of services supplied by the Company to
third parties excluding Value Added Tax.
d.INCOME
Revenue from all maintenance contracts are credited to turnover in equal
monthly instalments. Associated expenditure is written off in the month its
is incurred.
e.DEFERRED TAXATION
A Provision, when necessary, is made to reflect the possible liability or
the increase in value of an asset that might crystallise due to the timing
differences between the treatment of such an asset for taxation and
accounting purposes.
As in the opinion of the Directors no such liability or increase in value
is likely to crystallise in the foreseeable future no such a provision is
made.
<PAGE>
INFORMATION SUPPORT LIMITED 10
NOTES TO THE ACCOUNTS
YEAR ENDED 31ST MARCH 1997
f.CASH FLOW STATEMENT
The Company has taken advantage of the exemption in Financial Reporting
Standard Number 1 from producing a cash flow statement on the grounds that
it is a small company.
g.LEASE COMMITMENTS
Rentals paid for cars under contract hire are charged to the Profit and
Loss Account on a straight line basis over the contract term.
h.PENSION SCHEME
The Company operates a defined contribution pension scheme. Contributions
are charged to the Profit and Loss--Account as they become payable in
accordance with the rules of the scheme.
<PAGE>
INFORMATION SUPPORT LIMITED 11
NOTES TO THE ACCOUNTS
YEAR ENDED 31ST MARCH 1997
<TABLE>
<CAPTION>
1996
(pound) (pound)
<S> <C> <C>
2. INTANGIBLE FIXED ASSETS
Goodwill 450,376 450,376
======= =======
AMORTISATION
At 1.4.96 115,918 69,664
For Year 46,223 46,254
------- -------
At 31.3.97 162,141 115,918
======= ======= =======
NET BOOK VALUE
At 31.3.97 288,235 334,458
At 31.3.96 334,458 380,712
</TABLE>
3. TANGIBLE FIXED ASSETS
<TABLE>
<CAPTION>
FIXTURES,
FITTINGS &
EQUIPMENT
COST (pound)
<S> <C>
At 1.4.96 145,778
Additions 58,073
-------
At 31.3.97 203,851
=======
DEPRECIATION
At 1.4.96 76,563
For Year 28,020
-------
At 31.3.97 104,583
=======
NET BOOK VALUE
At 31.3.97 99,268
=======
At 31.3.96 69,215
=======
</TABLE>
<PAGE>
INFORMATION SUPPORT LIMITED 12
NOTES TO THE ACCOUNTS
YEAR ENDED 31ST MARCH 1997
<TABLE>
<CAPTION>
1996
4. STOCK (pound)
<S> <C> <C>
Computer Spares 139,553 184,400
Computer Systems for Resale 270,864 108,463
--------- ---------
410,417 292,863
========= =========
5. DEBTORS
Trade Debtors 872,538 565,922
Prepayments and Accrued Income 163,305 130,792
--------- ---------
1,035,843 696,714
========= =========
6. CREDITORS:AMOUNTS falling due
within one year
Bank Overdraft (Secured) 59,964 13,950
Trade Creditors 607,212 512,581
Corporation Tax 25,150 24,762
Taxation and Social Security 228,678 92,549
Debenture Loan (Secured) - 38,020
Accruals and Deferred Income 892,430 693,170
--------- ---------
1,813,434 1,375,032
========= =========
7. SHARE CAPITAL
AUTHORISED
Ordinary Shares of 5p each 80,000 80,000
'A' Ordinary Shares of 5p each 35,942 35,942
========= =========
CALLED UP, ISSUED AND FULLY PAID
Ordinary Shares of 5p each 80,000 80,000
'A' Ordinary Shares of 5p each 35,942 35,942
========= =========
</TABLE>
The 'A' ordinary shares are held by 3i Plc which carry a right to a fixed
ordinary dividend of 11% on the subscription price of the 'A' shares and
also a right to a participating ordinary dividend based on the profits of
the Company.
<PAGE>
INFORMATION SUPPORT LIMITED 13
NOTES TO THE ACCOUNTS
YEAR ENDED 31ST MARCH 1997
<TABLE>
<CAPTION>
1996
(pound) (pound)
<S> <C> <C>
8. PROFIT AND LOSS ACCOUNT
Balance at 1.4.96 (96,679) (90,712)
Net Profit/(Loss) for the Year 1,984 (5,967)
------- -------
Balance at 31.3.97 (94,695) (96,679)
======= =======
9. RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS
Profit/(Loss) for the Year 1,984 (5,967)
Opening Shareholders' Funds 19,263 25,230
------ ------
Closing Shareholders' Funds 21,247 19,263
====== ======
</TABLE>
<TABLE>
<CAPTION>
Note 1996
10. OPERATING PROFIT (pound) (pound)
<S> <C> <C> <C>
Include:
Depreciation 3 28,020 27,713
Goodwill Amortisation 46,223 46,254
Auditors Remuneration 5,000 4,000
Directors' Remuneration 161,447 149,081
Operating Lease Rentals (Cars) 117,319 112,361
======= =======
11. INTEREST PAYABLE
On bank loans, overdrafts and other
loans wholly repayable within five
years:
Bank Charges and Interest 16,412 11,518
Debenture Loan Interest 3,016 6,816
------ ------
19,428 18,334
====== ======
</TABLE>
<PAGE>
INFORMATION SUPPORT LIMITED 14
NOTES TO THE ACCOUNTS
YEAR ENDED 31ST MARCH 1997
<TABLE>
<CAPTION>
1996
12. TAXATION (pound) (pound)
<S> <C> <C>
Current Year U.K. Corporation Tax
at 24% (1996 - 25%) on
Taxable Profits for the Year 25,150 24,762
Under/(Over) Provision in earlier Periods (3,408) 165
------ ------
21,742 24,927
====== ======
13. DIRECTORS' REMUNERATION
Remuneration (including pensions) 161,447 149,081
======= =======
</TABLE>
14. PENSION COMMITMENTS
The Company operates a defined contribution pension scheme for its
directors and employees. The unpaid contributions outstanding at the year
end amounted to (pound)12,397 and are included in 'Accruals'.
15. OTHER FINANCIAL COMMITMENTS
Operating lease commitments (car rentals)
<TABLE>
<S> <C> <C>
Within One Year 92,386 108,816
Within Two to Five Years 75,936 67,591
======= =======
</TABLE>
16. RELATED PARTY TRANSACTION
During the year the Company paid Consultancy fees to Mr C Williams of
(pound)7,823 (1996 (pound)7,897) in the normal course of business. Mr
C Williams is presently a shareholder of the Company and an
Ex-Director.
17. POST BALANCE SHEET EVENT
On 28 April 1997, Information Support Limited acquired the assets of
Databasics Information Systems Limited for a total consideration of
(pound)57,100 and set up a new company called ISL Software Solutions
Limited being a wholly owned subsidiary of Information Support Limited. The
purchase consideration was financed wholly from working capital.
18. RECONCILIATION BETWEEN UK AND US ACCOUNTING PRINCIPLES
The financial statements of the company set out on pages 7 to 14 have been
prepared in accordance with generally accepted accounting principles in the
United Kingdom ("UK GAAP") which do not differ in any material aspect from
those applicable in the US ("US
<PAGE>
INFORMATION SUPPORT LIMITED 15
TRADING AND PROFIT AND LOSS ACCOUNT
YEAR ENDED 31ST MARCH 1997
<TABLE>
<CAPTION>
1996
Note (pound) (pound) (pound) (pound)
<S> <C> <C> <C> <C> <C>
TURNOVER A 4,235,112 2,827,504
COST OF SALES B 3,322,141 2,128,685
--------- ---------
GROSS PROFIT 912,971 698,819
OPERATING EXPENSES
SELLING & DISTRIBUTION C 239,858 210,842
FINANCIAL D 173,551 101,301
PREMISES E 104,166 42,509
OFFICE & ADMINISTRATION F 411,821 325,207
------- -------
929,396 679,859
------- -------
OPERATING PROFIT/(LOSS) (16,425) 18,960
OTHER OPERATING INCOME G 40,151 -
------- -------
PROFIT ON ORDINARY
ACTIVITIES BEFORE TAXATION 23,726 18,960
====== ======
</TABLE>
<PAGE>
INFORMATION SUPPORT LIMITED 16
NOTES TO THE TRADING AND PROFIT AND LOSS ACCOUNT
YEAR ENDED 31ST MARCH 1997
<TABLE>
<CAPTION>
1996
(pound) (pound)
------- -------
<S> <C> <C>
A.TURNOVER
Contract Revenue 1,669,443 1,416,552
Sale of Computer Systems 2,565,669 1,410,952
4,235,112 2,827,504
B.COST OF SALES
Purchases of Computer Systems 1,976,919 1,113,853
Training & Documentation 13,308 9,533
Time & Materials 62,883 93,492
Third Party Repair 14,785 17,511
In House Usage 36,970 19,958
Motor Expenses 203,416 168,157
Freight 19,957 19,077
Travel 30,500 13,684
Stock Write-Down 73,759 66,700
Commissions 149,293 115,252
Subcontractors 116,421 41,897
Salaries & National Insurance 552,358 386,593
Directors Remuneration 41,876 42,283
Communications 29,696 20,695
--------- ---------
3,322,141 2,128,685
========= =========
C.SELLING AND DISTRIBUTION EXPENSES
Salaries and National Insurance 122,580 103,164
Directors' Remuneration 63,655 54,515
Motor Expenses 46,086 39,042
Advertising and Promotion 7,537 14,121
------- -------
239,858 210,842
======= =======
</TABLE>
<PAGE>
INFORMATION SUPPORT LIMITED 17
NOTES TO THE TRADING AND PROFIT AND LOSS ACCOUNT
YEAR ENDED 31ST MARCH 1997
<TABLE>
<CAPTION>
1996
----
<S> <C> <C>
D.FINANCIAL EXPENSES
Depreciation 28,020 27,713
Amortisation - Goodwill 46,223 46,254
Bad Debts 79,880 9,000
Bank overdraft interest & charges 16,412 11,518
Debenture Loan Interest 3,016 6,816
------- -------
173,551 101,301
======= =======
E.PREMISES EXPENSES
Rent and Rates 100,727 42,509
Repairs and Maintenance 3,439 -
104,166 42,509
======= =======
</TABLE>
<TABLE>
<CAPTION>
(pound) (pound)
------- -------
<S> <C> <C>
F.OFFICE AND ADMINISTRATION EXPENSES
Salaries & National Insurance 145,598 91,523
Recruitment and training 2,263 4,923
Directors Remuneration 41,876 42,283
Directors Pension 14,040 10,000
Consultancy 16,414 7,897
Health insurance 4,735 2,699
Pension contributions (Staff) 32,447 26,650
Motor expenses 27,744 17,811
Travel 15,143 15,098
Entertaining 7,836 6,288
Insurance 9,452 9,384
Printing, Postage & Stationery 15,717 18,457
Telephone 29,795 27,966
Cleaning & Utilities 24,949 25,134
Legal and Professional 18,321 14,294
Audit and Accountancy 5,400 4,800
General 91 -
------- -------
411,821 325,207
======= =======
G.OTHER OPERATING INCOME
Rent Receivable 40,151 -
======= =======
</TABLE>
<PAGE>
EXHIBIT FS-9
ISL SOFTWARE SOLUTIONS LIMITED FINANCIAL
STATEMENTS 31ST MARCH 1998
<PAGE>
ISL SOFTWARE SOLUTIONS LIMITED
FINANCIAL STATEMENTS
31ST MARCH 1998
COMPANY REGISTRATION NUMBER 3328653
KARIA OWEN & CO
CHARTERED CERTIFIED ACCOUNTANTS & REGISTERED AUDITORS
45 LONG LANE
LONDON
N3 2PY
<PAGE>
ISL SOFTWARE SOLUTIONS LIMITED
FINANCIAL STATEMENTS
YEAR ENDED 31ST MARCH 1998
<TABLE>
<CAPTION>
CONTENTS PAGE
<S> <C>
OFFICERS AND PROFESSIONAL ADVISERS 1
THE DIRECTORS' REPORT 2
AUDITORS' REPORT TO THE SHAREHOLDERS 4
PROFIT AND LOSS ACCOUNT 5
BALANCE SHEET 6
NOTES TO THE FINANCIAL STATEMENTS 7
THE FOLLOWING PAGES DO NOT FORM PART OF THE FINANCIAL STATEMENTS
DETAILED PROFIT AND LOSS ACCOUNT 11
NOTES TO THE DETAILED PROFIT AND LOSS ACCOUNT 12
</TABLE>
<PAGE>
PAGE 1
ISL SOFTWARE SOLUTIONS LIMITED
OFFICERS AND PROFESSIONAL ADVISERS
THE BOARD OF DIRECTORS MR R ROACH
MR A GROVER
COMPANY SECRETARY MR R ROACH
REGISTERED OFFICE 21 BEAUMONT STREET
OXFORD
OX1 2NH
AUDITORS KARIA OWEN & CO
CHARTERED CERTIFIED ACCOUNTANTS
& REGISTERED AUDITORS
45 LONG LANE
LONDON
N3 2PY
BANKERS NATIONAL WESTMINSTER BANK
5 HIGH STREET
BRACKNELL
BERKS.
RG12 1DH
<PAGE>
PAGE 2
ISL SOFTWARE SOLUTIONS LIMITED
THE DIRECTORS' REPORT
YEAR ENDED 31ST MARCH 1998
The directors present their report and the financial statements of the company
for the year ended 31st March 1998.
PRINCIPAL ACTIVITIES
The principal activity of the company during the year was that of development,
maintenence and sale of hardware and software computer solutions.
The development of an intuitive, Java and internet enabled GUI creates a strong
application base with which to expand product cycles through the year 2000. The
directors expect rapid growth in market share, resulting in a significant
increase in turnover and profitabilty, especially over the next two years.
THE DIRECTORS AND THEIR INTERESTS IN SHARES OF THE COMPANY
The directors who served the company during the period were as follows:
Mr R Roach
Mr A Grover
The company is a wholly owned subsidiary and the interests of group directors
are disclosed in the accounts of the parent company.
DIRECTORS' RESPONSIBILITIES
Company law requires the directors to prepare financial statements for each
financial year which give a true and fair view of the state of affairs of the
company at the end of the year and of the profit or loss for the year then
ended.
In preparing those financial statements, the directors are required to select
suitable accounting policies, as described on page 7, and then apply them on
a consistent basis, making judgements and estimates that are prudent and
reasonable.The directors must also prepare the financial statements on the
going concern basis unless it is inappropriate to presume that the company
will continue in business.
The directors are responsible for keeping proper accounting records which
disclose with reasonable accuracy at any time the financial position of the
company and to enable them to ensure that the financial statements comply
with the Companies Act 1985. The directors are also responsible for
safeguarding the assets of the company and hence for taking reasonable steps
for the prevention and detection of fraud and other irregularities.
AUDITORS
A resolution to re-appoint Karia Owen & Co as auditors for the ensuing year will
be proposed at the annual general meeting in accordance with section 385 of the
Companies Act 1985.
<PAGE>
PAGE 3
ISL SOFTWARE SOLUTIONS LIMITED
THE DIRECTORS' REPORT (CONTINUED)
YEAR ENDED 31ST MARCH 1998
SMALL COMPANY PROVISIONS
This report has been prepared in accordance with the special provisions for
small companies under Part VII of the Companies Act 1985.
Registered office: Signed by order of the directors
21 Beaumont Street
Oxford /s/ Mr R Roach
OX1 2NH --------------------------------
Mr R Roach
Company Secretary
Approved by the directors on September 7, 1998
<PAGE>
PAGE 4
ISL SOFTWARE SOLUTIONS LIMITED
AUDITORS' REPORT TO THE SHAREHOLDERS
YEAR ENDED 31ST MARCH 1998
We have audited the financial statements on pages 5 to 9 which have been
prepared under the historical cost convention and the accounting policies set
out on page 7.
RESPECTIVE RESPONSIBILITIES OF THE DIRECTORS AND THE AUDITORS
As described on page 2, the company's directors are responsible for the
preparation of the financial statements. It is our responsibility to form an
independent opinion, based on our audit, on those statements and to report our
opinion to you.
BASIS OF OPINION
We conducted our audit in accordance with Auditing Standards issued by the
Auditing Practices Board. An audit includes examination, on a test basis, of
evidence relevant to the amounts and disclosures in the financial statements. It
also includes an assessment of the significant estimates and judgements made by
the directors in the preparation of the financial statements, and of whether the
accounting policies are appropriate to the company's circumstances, consistently
applied and adequately disclosed.
We planned and performed our audit so as to obtain all the information and
explanations which we considered necessary in order to provide us with
sufficient evidence to give reasonable assurance that the financial statements
are free from material misstatement, whether caused by fraud or other
irregularity or error. In forming our opinion we also evaluated the overall
adequacy of the presentation of information in the financial statements.
OPINION
In our opinion the financial statements give a true and fair view of the
company's state of affairs as at 31st March 1998 and of its loss for the year
then ended, and have been properly prepared in accordance with the provisions of
the Companies Act 1985 applicable to small companies.
45 Long Lane KARIA OWEN & CO
London Chartered Certified Accountants
N3 2PY & Registered Auditors
October 11, 1998
KARIA OWEN & CO.
<PAGE>
PAGE 5
ISL SOFTWARE SOLUTIONS LIMITED
PROFIT AND LOSS ACCOUNT
YEAR ENDED 31ST MARCH 1998
<TABLE>
<CAPTION>
*
UNAUDITED 1998
PERIOD
1/4/1998
TO
12/10/98
(pound) (pound)
<S> <C> <C> <C>
TURNOVER 191,146 320,906
Cost of sales 45,541 126,193
------- -------
GROSS PROFIT 145,605 194,713
Distribution costs 6,746 18,140
Administrative expenses 153,375 220,274
------- -------
OPERATING LOSS 2 (14,516) (43,701)
Interest payable (249) (212)
------- -------
LOSS ON ORDINARY ACTIVITIES BEFORE TAXATION (14,765) (43,913)
Tax on loss on ordinary activities - -
------- -------
LOSS FOR THE FINANCIAL YEAR / PERIOD (14,765) (43,913)
======= =======
</TABLE>
The company has no recognised gains or losses other than the results for the
year as set out above.
All of the activities of the company are classed as continuing.
* THE RESULTS FOR THE PERIOD FROM 1ST APRIL 1998 TO 12TH October 1998
ARE UNAUDITED.
The notes on pages 7 to 9 form
part of these financial statements.
<PAGE>
PAGE 6
ISL SOFTWARE SOLUTIONS LIMITED
BALANCE SHEET
31ST MARCH 1998
<TABLE>
<CAPTION>
(pound) (pound)
<S> <C> <C> <C>
FIXED ASSETS
Intangible assets 3 66,933
Tangible assets 4 5,228
-------
72,161
CURRENT ASSETS
Debtors 5 84,884
Cash at bank and in hand 16,330
-------
101,214
CREDITORS: AMOUNTS FALLING DUE
WITHIN ONE YEAR 6 (217,286)
NET CURRENT LIABILITIES (116,072)
-------
TOTAL ASSETS LESS CURRENT LIABILITIES (43,911)
=======
CAPITAL AND RESERVES
Called-up equity share capital 8 2
Profit and loss account (43,913)
-------
DEFICIENCY (43,911)
9 =======
</TABLE>
These accounts have been prepared in accordance with the special provisions for
small companies under Part VII of the Companies Act 1985.
These financial statements were approved by the directors on the September 7,
1998, and are signed on their behalf by:
/s/ MR. R. ROACH /s/ MR. A. GROVER
- -------------------- ---------------------
MR. R. ROACH MR. A. GROVER
The notes on pages 7 to 9 form
part of these financial statements.
<PAGE>
PAGE 7
ISL SOFTWARE SOLUTIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 31ST MARCH 1998
1. ACCOUNTING POLICIES
BASIS OF ACCOUNTING
The financial statements have been prepared under the historical cost
convention.
CASH FLOW STATEMENT
The directors have taken advantage of the exemption in Financial Reporting
Standard No 1 from including a cash flow statement in the financial
statements on the grounds that the company is small.
TURNOVER
The turnover shown in the profit and loss account represents amounts
invoiced during the year, exclusive of Value Added Tax.
GOODWILL
Purchased goodwill is written off against the profit & loss account over
it's estimated useful life, which the directors consider to be 20 years. -
INTELLECTUAL PROPERTY RIGHTS
The Intellectual Property Rights on software are written-off over five
years on a straight line basis.
AMORTISATION
Amortisation is calculated so as to write off the cost of an asset, less
its estimated residual value, over the useful economic life of that asset
as follows:
<TABLE>
<S> <C>
Goodwill - 5% straight line
Intellectual Property - 20% straight line
</TABLE>
DEPRECIATION
Depreciation is calculated so as to write off the cost of an asset, less
its estimated residual value, over the useful economic life of that asset
as follows:
<TABLE>
<S> <C>
Equipment - 20% stright line
</TABLE>
2. OPERATING LOSS
Operating loss is stated after charging:
<TABLE>
<CAPTION>
(pound)
<S> <C>
Directors' emoluments -
Amortisation 7,255
Depreciation 1,173
Auditors' fees 1,500
=====
</TABLE>
<PAGE>
PAGE 8
ISL SOFTWARE SOLUTIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 31ST MARCH 1998
3. INTANGIBLE FIXED ASSETS
<TABLE>
<CAPTION>
GOODWILL INTELLECTUAL TOTAL
PROPERTY
RIGHTS
(pound) (pound) (pound)
<S> <C> <C> <C>
COST
Additions 49,188 25,000 74,188
------ ------ -------
At 31st March 1998 49,188 25,000 74,188
====== ====== ======
AMORTISATION
Charge for the year 2,255 5,000 7,255
------ ------ -------
AT 31ST MARCH 1998 2,255 5,000 7,255
====== ====== ======
NET BOOK VALUE
AT 31ST MARCH 1998 46,933 20,000 66,933
====== ====== ======
</TABLE>
4. TANGIBLE FIXED ASSETS
<TABLE>
<CAPTION>
EQUIPMENT
(pound)
<S> <C>
COST
Additions 6,401
-----
AT 31ST MARCH 1998 6,401
=====
DEPRECIATION
Charge for the year 1,173
-----
AT 31ST MARCH 1998 1,173
=====
NET BOOK VALUE
At 31st March 1998 5,228
=====
</TABLE>
5. DEBTORS
<TABLE>
<CAPTION>
(pound)
<S> <C>
Trade debtors 78,395
Other debtors 6,489
------
84,884
======
</TABLE>
<PAGE>
PAGE 9
ISL SOFTWARE SOLUTIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 31ST MARCH 1998
6. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
<TABLE>
<CAPTION>
(pound) (pound)
<S> <C> <C>
Trade creditors 14,922
Amounts owed to group undertakings 131,195
Other creditors including:
PAYE and social security 1,179 -
VAT 16,233 -
------
17,412
Accruals and deferred income 53,757
-------
217,286
=======
</TABLE>
7. RELATED PARTY TRANSACTIONS
No transactions with related parties were undertaken such as are required
to be disclosed under Financial Reporting Standard 8.
8. SHARE CAPITAL
<TABLE>
<CAPTION>
(pound)
<S> <C>
AUTHORISED SHARE CAPITAL:
1,000 Ordinary shares of(pound)1 each 1,000
=====
ALLOTTED, CALLED UP AND FULLY PAID:
(pound)
Issue of ordinary shares 2
=====
</TABLE>
9. RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS
<TABLE>
<CAPTION>
(pound)
<S> <C>
Loss for the financial year (43,913)
New equity share capital subscribed 2
-------
Net reduction to funds (43,911)
-------
Closing shareholders' equity funds (43,911)
=======
</TABLE>
10. ULTIMATE PARENT COMPANY
The ultimate parent company is Information Support Ltd a company registered
in England & Wales.
11. RECONCILIATION BETWEEN UK AND US ACCOUNTING PRINCIPLES
The financial statements of the company set out on pages 5 to 9 have been
prepared in accordance with generally accepted accounting principles in the
United Kingdom ("UK GAAP") which do not differ in any material aspect from
those applicable in the US ( "US GAAP").
<PAGE>
PAGE 10
ISL SOFTWARE SOLUTIONS LIMITED
MANAGEMENT INFORMATION
YEAR ENDED 31ST MARCH 1998
The following pages do not form part of the statutory financial statements
which are the subject of the auditors' report on page 4.
<PAGE>
PAGE 11
ISL SOFTWARE SOLUTIONS LIMITED
DETAILED PROFIT AND LOSS ACCOUNT
YEAR ENDED 31ST MARCH 1998
<TABLE>
<CAPTION>
(pound) (pound)
<S> <C> <C>
TURNOVER 320,906
Cost of Sales (126,193)
-------
GROSS PROFIT 194,713
OVERHEADS
Advertising 18,140
Administrative expenses 220,274
-------
238,414
-------
OPERATING LOSS (43,701)
Bank interest payable 212
-------
LOSS ON ORDINARY ACTIVITIES (43,913)
=======
</TABLE>
<PAGE>
PAGE 12
ISL SOFTWARE SOLUTIONS LIMITED
NOTES TO THE DETAILED PROFIT AND LOSS ACCOUNT
YEAR ENDED 31ST MARCH 1998
<TABLE>
<CAPTION>
(pound) (pound)
<S> <C> <C>
ADMINISTRATIVE EXPENSES
PERSONNEL COSTS:
Administrative staff salaries 127,933
ESTABLISHMENT EXPENSES:
Rent, rates and water 8,289
Light and heat 759
Repairs and maintenance 2,311
-------
11,359
GENERAL EXPENSES:
Motor expenses 27,280
Travel and subsistence 1,956
Telephone 13,175
Printing, stationery and postage 11,162
Insurance 1,403
Entertaining 735
Legal and professional fees 5,484
Auditors remuneration 1,500
Amortisation 7,255
Depreciation of office equipment 1,173
-------
71,123
FINANCIAL COSTS:
Bad debts written off 1,149
Provision for doubtful debts 8,710
-------
9,859
-------
220,274
=======
</TABLE>
<PAGE>
EXHIBIT FS-10
DATASOFT LIMITED DIRECTORS' REPORT AND FINANCIAL
STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 1998
<PAGE>
DATASOFT LIMITED
DIRECTORS' REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 1998
<PAGE>
DATASOFT LIMITED
COMPANY INFORMATION
DIRECTORS Niall Keating
Gerry Arkins
Alan Kiely
SECRETARY Niall Keating
COMPANY NUMBER 209434
REGISTERED OFFICE 4/5 Dawson Street
Dublin 2
AUDITORS Cooney Carey
4/5 Dawson Street
Dublin 2
BANKERS Allied Irish Bank Plc
69/71 Morehampton Road
Ranelagh
Dublin 6
<PAGE>
DATASOFT LIMITED
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Directors' Report 1 - 2
Auditors' Report 3
Profit and Loss Account 4
Balance Sheet 5
Notes to the Financial Statements 6 - 11
* The following pages do not form part of the statutory financial statements
Detailed Trading and Profit & Loss Account 12 - 13
</TABLE>
<PAGE>
DATASOFT LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 1998
The directors present their report and the financial statements for the year
ended 31 December 1998.
PRINCIPAL ACTIVITY
The principal activity of the company is the development, installation and
support of tailored accounting systems.
PROFITS FOR THE YEAR AND STATE OF AFFAIRS AS AT 31 DECEMBER 1998
The profit and loss account and balance sheet for the year ended 31 December
1998 are set out on pages 4 to 11. Profit on ordinary activities before taxation
is stated in the profit and loss account on page 4.
The state of affairs is set out in the balance sheet on page 5.
DIVIDENDS AND RETENTIONS
The directors do not recommend the payment of a dividend.
DIRECTORS
The present membership of the board is set out on the company information
page.
HEALTH AND SAFETY OF EMPLOYEES
It is the policy of the company to ensure the health and welfare of employees by
maintaining a safe place and system of work. This policy is based on the
requirements of employment legislation, including the Safety, Health and Welfare
at Work Act, 1989.
FUTURE DEVELOPMENTS IN THE BUSINESS
The Directors will continue to develop the activities of the company in the
ensuing year.
DIRECTORS' RESPONSIBILITIES
Company law requires the directors to prepare financial statements for each
financial year which give a true and fair view of the state of the affairs of
the company and of the profit or loss of the company for that year. In preparing
these the directors are required to:
- - select suitable accounting policies and apply them consistently;
- - make judgements and estimates that are reasonable and prudent;
- - state whether applicable accounting standards have been followed, subject
to any material departures disclosed and explained in the financial
statements;
- - prepare the financial statements on the going concern basis unless it is
inappropriate to presume that the company will continue in business.
PAGE 1
<PAGE>
DATASOFT LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 1998
The directors are responsible for keeping proper accounting records which
disclose with reasonable accuracy at any time the financial position of the
company and to enable them to ensure that the financial statements comply with
the Companies Acts 1963 to 1990. They are also responsible for safeguarding the
assets of the company and hence for taking reasonable steps for the prevention
and detection of fraud and other irregularities.
POST BALANCE SHEET EVENTS
There were no significant events affecting the Company since the balance sheet
date.
AUDITORS
Cooney Carey, Chartered Accountants and Registered Auditors, have indicated
their willingness to continue in office in accordance with Section 160 of the
Companies Act, 1963.
TAXATION STATUS
So far as the directors are aware, the company is a close company within the
meaning of the Consolidated Taxes Act 1997.
ON BEHALF OF THE BOARD
Niall Keating
______________________
DIRECTOR
Gerry Arkins
______________________
DIRECTOR
DATE:- 28TH MAY 1999
PAGE 2
<PAGE>
DATASOFT LIMITED
REPORT OF THE AUDITORS
TO THE MEMBERS OF DATASOFT LIMITED
We have audited the financial statements on pages 4 to 11 which have been
prepared under the historical cost convention and the accounting policies set
out on page 6.
RESPECTIVE RESPONSIBILITIES OF DIRECTORS AND AUDITORS
As described on page 1 - 2 the company's directors are responsible for the
preparation of financial statements. It is our responsibility to form an
independent opinion, based on our audit, on those statements and to report our
opinion to you.
BASIS OF OPINION
We conducted our audit in accordance with Auditing Standards issued by the
Auditing Practices Board. An audit includes examination, on a test basis, of
evidence relevant to the amounts and disclosures in the financial statements. It
also includes an assessment of the significant estimates and judgements made by
the directors in the preparation of the financial statements, and of whether the
accounting policies are appropriate to the company's circumstances, consistently
applied and adequately disclosed.
We planned and performed our audit so as to obtain all the information and
explanations which we considered necessary in order to provide us with
sufficient evidence to give reasonable assurance that the financial statements
are free from material misstatement, whether caused by fraud or other
irregularity or error. In forming our opinion we also evaluated the overall
adequacy of the presentation of information in the financial statements.
OPINION
In our opinion the financial statements give a true and fair view of the state
of the company's affairs as at the 31 December 1998 and of its profit for the
year then ended and have been properly prepared in accordance with the Companies
Acts 1963 to 1990.
We have obtained all the information and explanations we considered necessary
for the purposes of our audit. In our opinion proper books of account have been
kept by the company. The financial statements are in agreement with the books of
account.
In our opinion the information given in the directors' report on pages 1 - 2 is
consistent with the financial statements.
The net assets of the company, as stated in the Balance Sheet on page 5, are
more than half of the amount of its called up share capital and, in our opinion,
on that basis there did not exist at 31 December 1998 a financial situation
which under Section 40(l) of the Companies (Amendment) Act 1983 would require
the convening of an extraordinary meeting of the company.
COONEY CAREY
CHARTERED ACCOUNTANTS AND
REGISTERED AUDITORS
4/5 DAWSON STREET
DUBLIN 2
DATE:- 1ST,JUNE 1999
PAGE 3
<PAGE>
DATASOFT LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 DECEMBER 1998
<TABLE>
<CAPTION>
1998 1997
IR(pound) IR(pound)
NOTES
-----
<S> <C> <C> <C>
TURNOVER - CONTINUING ACTIVITIES 210,303 177,581
Cost of sales (6,200) (5,230)
-------- --------
GROSS PROFIT 204,103 172,351
Net operating expenses (196,665) (166,086)
-------- --------
OPERATING PROFIT - CONTINUING ACTIVITIES 7,438 6,265
Interest payable
and similar charges (3,520) (3,055)
-------- --------
PROFIT ON ORDINARY
ACTIVITIES BEFORE TAXATION 2 3,918 3,210
Taxation 4 546 2,773
-------- --------
PROFIT ON ORDINARY ACTIVITIES AFTER TAXATION 4,464 5,983
-------- --------
PROFIT BROUGHT FORWARD 22,764 29,451
Prior Year Adjustment 5 - (12,670)
-------- --------
PROFIT BROUGHT FORWARD 22,764 16,781
-------- --------
PROFIT CARRIED FORWARD 27,228 22,764
-------- --------
-------- --------
</TABLE>
No statement of recognised gains and losses has been prepared as there have been
no recognised gains or losses other than those shown above.
There is no material difference between the profit on ordinary activities before
taxation and the retained profit for the year and their historical cost
equivalents.
The financial statements which include the notes on pages 6 - 11 were approved
by the board on 28th May 1999.
ON BEHALF OF THE BOARD
Niall Keating
______________________
DIRECTOR
Gerry Atkins
______________________
DIRECTOR
PAGE 4
<PAGE>
DATASOFT LIMITED
BALANCE SHEET AS AT 31 DECEMBER 1998
<TABLE>
<CAPTION>
1998 1997
NOTES IR(pound) IR(pound)
-----
<S> <C> <C> <C>
FIXED ASSETS
Tangible assets 6 12,629 8,337
Intangible Assets 7 46,739 47,720
------ ------
59,368 56,057
====== ======
CURRENT ASSETS
Stock - 6,200
Debtors 8 58,579 58,227
------ ------
58,579 64,427
CREDITORS: AMOUNTS FALLING
DUE WITHIN ONE YEAR 10 (67,531) (82,320)
------ ------
NET CURRENT (LIABILITIES) (8,952) (17,893)
------ ------
TOTAL ASSETS LESS CURRENT LIABILITIES 50,416 38,164
CREDITORS: AMOUNTS FALLING DUE
AFTER MORE THAN ONE YEAR 11 (7,788) -
------ ------
42,628 38,164
====== ======
FINANCED BY:
CAPITAL AND RESERVES
Called up share capital 12 200 200
Share Premium 15,200 15,200
Profit and loss account 27,228 22,764
------ ------
14 42,628 38,164
====== ======
</TABLE>
The financial statements which include the notes on pages 6 - 11 were approved
by the board on 28th May 1999.
ON BEHALF OF THE BOARD
Niall Keating
______________________
DIRECTOR
Gerry Arkins
______________________
DIRECTOR
PAGE 5
<PAGE>
DATASOFT LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 1998
1. ACCOUNTING POLICIES
1.1. ACCOUNTING CONVENTION
The financial statements are prepared under the historical cost convention.
The company has taken advantage of the exemption in FRSI from the
requirement to produce a cashflow statement because it is a small company.
1.2. TURNOVER
Turnover represents the total invoice value, excluding value added tax, of
sales made during the year.
1.3. GOODWILL
Goodwill is amortised through the profit and loss account in arriving at
profit or loss on ordinary activities, on a systematic basis over its
useful economic life.
1.4. RESEARCH AND DEVELOPMENT
Research expenditure is written off to the profit and loss account in the
year in which it is incurred. Development expenditure is written off in the
same year unless the directors are satisfied as to the technical,
commercial and financial viability of individual projects. In this
situation, the expenditure is deferred and amortised over the period from
which the company is expected to benefit.
1.5. TANGIBLE FIXED ASSETS AND DEPRECIATION
Depreciation is provided at rates calculated to write off the cost less
residual value of each asset over its expected useful life, as follows:
<TABLE>
<S> <C>
Computers - 20% Straight Line
Office Equipment - 12.5% Straight Line
Furniture - 12.5% Straight line
</TABLE>
1.6. WORK IN PROGRESS
Work in progress represents costs incurred by the company that are not
invoiced to customers at the accounting year end.
2. PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION
<TABLE>
<CAPTION>
1998 1997
IR(pound) IR(pound)
<S> <C> <C>
Amortisation of goodwill 1,530 1,530
Depreciation of tangible assets 3,999 2,555
Amortised deferred expenditure 9,007 -
Directors' remuneration 72,680 47,500
Auditors' remuneration 1,500 1,200
===== =====
</TABLE>
PAGE 6
<PAGE>
DATASOFT LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 1998
............ continued
3. EMPLOYEES AND REMUNERATION
NUMBER OF EMPLOYEES
The average monthly numbers of employees (including the directors) during
the year was 4 (1997 - 3).
EMPLOYMENT COSTS
<TABLE>
<CAPTION>
1998 1997
IR(pound) IR(pound)
<S> <C> <C>
Wages and salaries 102,449 84,263
Social welfare costs 3,258 1,873
Pension costs 7,070 6,734
------- ------
112,457 92,870
======= ======
</TABLE>
4. TAXATION
<TABLE>
<CAPTION>
1998 1997
IR(pound) IR(pound)
<S> <C> <C>
Over-provision in prior years (546) (2,773)
==== ======
</TABLE>
5. PRIOR YEAR ADJUSTMENT
The prior year adjustment arose due to an under-provision of
IR(pound)12,670 which related to maintenance sales invoices raised in
advance.
PAGE 7
<PAGE>
DATASOFT LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 1998
............. continued
6. TANGIBLE ASSETS
<TABLE>
<CAPTION>
OFFICE
COMPUTERS EQUIPMENT FURNITURE TOTAL
IR(pound) IR(pound) IR(pound) IR(pound)
<S> <C> <C> <C> <C>
COST
At 1 January 1998 12,066 1,626 1,544 15,236
Additions 7,971 220 100 8,291
------ ----- ----- ------
At 31 December 1998 20,037 1,846 1,644 23,527
------ ----- ----- ------
DEPRECIATION
At 1 January 1998 5,653 613 633 6,899
Charge for the year 3,543 254 202 3,999
------ ----- ----- ------
At 31 December 1998 9,196 867 835 10,898
------ ----- ----- ------
NET BOOK VALUES
At 31 December 1998 10,841 979 809 12,629
====== ===== ===== ======
At 31 December 1997 6,413 1,013 911 8,337
====== ===== ===== ======
</TABLE>
7. INTANGIBLE FIXED ASSETS
<TABLE>
<CAPTION>
DEVELOPMENT
COSTS GOODWILL TOTAL
IR(pound) IR(pound) IR(pound)
<S> <C> <C> <C>
COST
At 1 January 1998 35,480 12,240 47,720
Additions 9,556 - 9,556
Amortised during year (9,007) (1,530) (10,537)
------ ------ ------
At 31 December 1998 36,029 10,710 46,739
====== ====== ======
</TABLE>
Development expenditure is now being amortised over a five year period.
Goodwill arose on the aquisition of the business previously carried on by a
shareholder. The goodwill is being amortised to the profit and loss over ten
years.
PAGE 8
<PAGE>
DATASOFT LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 1998
.............. continued
8. DEBTORS
<TABLE>
<CAPTION>
1998 1997
IR(pound) IR(pound)
<S> <C> <C>
Trade debtors 52,981 50,427
Prepayments 4,178 3.427
Directors' Loans 728 1,227
Corporation Tax 692 3,146
------ ------
58,579 58,227
====== ======
</TABLE>
9. DIRECTORS AND CONNECTED PARTY LOANS
<TABLE>
<CAPTION>
1998 1997
IR(pound) IR(pound)
<S> <C> <C>
Patrica Keating - 241
Niall Keating 728 986
--- ---
728 1,227
=== =====
</TABLE>
10. CREDITORS: AMOUNTS FALLING DUE
WITHIN ONE YEAR
<TABLE>
<CAPTION>
1998 1997
IR(pound) IR(pound)
<S> <C> <C>
Trade creditors 5,621 1,189
Accruals 2,609 38,728
Vat 12,923 9,343
Paye/Prsi 9,329 4,422
Bank overdraft 32,426 28,638
Bank loan 4,623 -
------ ------
67,531 82,320
====== ======
</TABLE>
11. CREDITORS: AMOUNTS FALLING DUE
AFTER MORE THAN ONE YEAR
<TABLE>
<CAPTION>
1998 1997
IR(pound) IR(pound)
<S> <C> <C>
Bank loan 7,788 -
===== ====
</TABLE>
PAGE 9
<PAGE>
DATASOFT LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 1998
............ continued
12. SHARE CAPITAL
<TABLE>
<CAPTION>
1998 1997
IR(pound) IR(pound)
<S> <C> <C>
AUTHORISED EQUITY
100,000 Ordinary Shares of IR(pound)1 Each 100,000 100,000
======= =======
ISSUED
200 Ordinary shares of (pound)1 each 200 200
======= =======
</TABLE>
13. DIRECTORS SHAREHOLDINGS
The directors of the company hold the following interests in the ordinary
share capital of the company:
<TABLE>
<CAPTION>
1998 1997
IR(pound) IR(pound)
<S> <C> <C>
Alan Kiely Nil Nil
Niall Keating 100 100
Gerry Arkins 100 100
=== ===
</TABLE>
14. RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS
<TABLE>
<CAPTION>
1998 1997
IR(pound) IR(pound)
<S> <C> <C>
Profit for the year 4,464 5.983
Opening shareholders' funds 38,164 32,181
------ ------
Closing shareholders' funds 42,628 38,164
====== ======
</TABLE>
15. RELATED PARTY TRANSACTIONS
Allied Irish Bank pie hold two keyman life policies (IR(pound)90,000) and a
letter of gaurantee (IR(pound)45,000) From the Directors, Niall Keating and
Gerry Arkins, as security for the bank overdraft and term loan
IR(pound)44,837 (1997- IR(pound)28,638)
PAGE 10
<PAGE>
DATASOFT LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 1998
............... continued
16. RECONCILIATION BETWEEN IRISH GAAP AND US GAAP
The financial statements of the company set out on pages 4 to 11 have been
prepared in accordance with generally accepted accounting principles in
Ireland ("Irish GAAP") which differ in certain significant respects from
those applicable in the US ("US GAAP"). The material differences as they
apply to the Company's Financial statements are as follows:
(a) INTANGIBLE FIXED ASSETS - DEVELOPMENT COSTS
Under Irish GAAP research and development costs are charged against profit
in the year they are incurred, except insofar as it relates to a clearly
defined project and the benefits therefrom can reasonably be regarded as
assured. Expenditure so deferred is limited to the value of future benefits
and is amortised through the profit and loss account on a systematic basis
over the period expected to to benefit from the project. Development costs
are expensed as incurred under US GAAP.
The following is a summary of the material adjustments to profit and
shareholders' equity which would be required had the financial statements
been prepared under US GAAP:
(1) EFFECT ON RETAINED PROFIT
<TABLE>
<CAPTION>
1998 1997
IR(pound) IR(pound)
<S> <C> <C>
Profit as stated under Irish GAAP 4,464 5,983
US GAAP Adjustments
Developments cost written off (549) (20,000)
----- -------
Net Income/(Loss) under US GAAP 3,915 (14,017)
----- -------
</TABLE>
(2) EFFECT ON SHAREHOLDERS EQUITY
<TABLE>
<CAPTION>
1998 1997
IR(pound) IR(pound)
<S> <C> <C>
Shareholder's Equity as stated under Irish GAAP 42,628 38,164
US GAAP Adjustments
Development costs written off (36,029) (35,480)
------- -------
Shareholders Equity as stated under US GAAP 6,599 2,684
------- -------
</TABLE>
PAGE 11
<PAGE>
DATASOFT LIMITED
DETAILED TRADING AND PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 DECEMBER 1998
<TABLE>
<CAPTION>
1998 1997
IR(pound) IR(pound)
<S> <C> <C>
SALES
Sales Datasoft Software 75,552 80,834
Software Modifications 67,465 33,484
Software Maintence 58,761 46,668
Other Sales 8,525 16,595
-------- --------
210,303 177,581
COST OF SALES
Opening work in progress 6,200 11,430
Closing work in progress - (6,200)
-------- --------
6,200 5,230
-------- --------
GROSS PROFIT 204,103 172,351
ADMINISTRATIVE EXPENSES (196,665) (166,086)
-------- --------
7,438 6,265
OTHER EXPENSES
Bank interest & charges (3,520) (3,055)
-------- --------
PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION 3,918 3,210
======== ========
</TABLE>
PAGE 12
<PAGE>
DATASOFT LIMITED
ADMINISTRATIVE EXPENSES
FOR THE YEAR ENDED 31 DECEMBER 1998
<TABLE>
<CAPTION>
1998 1997
IR(pound) IR(pound)
<S> <C> <C>
ADMINISTRATIVE EXPENSES
Purchase of accessories/software 2,326 7,804
Contract development 1,000 7,122
Salaries 33,027 21,137
Directors' salary 72,680 47,500
Staff pension /Vhi 7,788 7,355
Training Costs - 3,221
Commission - 4,417
Office rent 11,697 11,365
Consultancy 2,110 2,742
Insurance 448 204
Printing, postage and stationery 1,766 1,088
Advertising 6,215 4,699
Telephone 9,203 9,710
Motor expenses 24,046 20,397
Travelling expenses 1,495 3,355
Entertainment 636 1,096
Amortised research & development costs 9,007 -
Audit & Accountancy 2,525 3,390
Loss on exchange 44 50
Sundry expenses 5,123 5.349
Amortisation of goodwill 1,530 1,530
Depreciation office equipment 254 189
Depreciation furniture 202 193
Depreciation computer equipment 3,543 2,173
------- -------
196,665 166,086
======= =======
</TABLE>
PAGE 13
<PAGE>
EXHIBIT FS-11
DATASOFT LIMITED FINANCIAL STATEMENTS FOR
THE YEAR ENDED 31 DECEMBER 1997
<PAGE>
DATASOFT LIMITED
FINANCIAL STATEMENTS
FOR THE YEAR ENDED
31 DECEMBER 1997
<PAGE>
DATASOFT LIMITED
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 1997
<TABLE>
<CAPTION>
TABLE OF CONTENTS PAGE
- ----------------- ----
<S> <C>
Company Information 1
Statement of Directors' Responsibilities 2
Directors' Report 3
Auditors' Report 4 - 5
Accounting Policies 6 - 7
Profit and Loss Account 8
Balance Sheet 9
Notes to the Financial Statements 10 - 12
THE FOLLOWING PAGE DOES NOT FORM PART OF THE STATUTORY ACCOUNTS
Detailed Profit and Loss Account 13
</TABLE>
<PAGE>
DATASOFT LIMITED
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 1997
COMPANY INFORMATION
DIRECTORS Niall Keating
Gerry Arkins
Alan Kiely
SECRETARY Niall Keating
AUDITORS Cooney Carey
Chartered Accountants
and Registered Auditors
4/5 Dawson Street
Dublin 2
SOLICITORS Michael Nugent & Cc
6 Sandford Road
Ranelagh
Dublin 6
BANKERS Allied Irish Bank Plc
69/71 Morehampton Road
Ranelagh
Dublin 6
REGISTERED OFFICE 4/5 Dawson Street
Dublin 2
REGISTERED NO. OF INCORPORATION 209434
1
<PAGE>
DATASOFT LIMITED
STATEMENT OF DIRECTORS'
REPONSIBILITIES FOR THE YEAR ENDED 31 DECEMBER 1997
Company law requires the directors to prepare financial statements for each
financial year which give a true and fair view of the state of affairs of the
company for that period. In preparing those financial statements, the
directors are required to:
- select suitable accounting policies and then apply them consistently;
- make judgements and estimates that are reasonable and prudent;
- state whether applicable accounting standards have been followed,
subject to any material departures disclosed and explained in the
financial statements;
- prepare the financial statements on the going concern basis unless it
is inappropriate to presume that the company will continue in
business.
The directors are responsible for keeping proper accounting records which
disclose with reasonable accuracy at any time the financial position of the
company and to enable them to ensure that the financial statements comply with
the Companies Acts 1963 to 1990. They are also responsible for safeguarding
the assets of the company and hence for taking reasonable steps for the
prevention and detection of fraud and other irregularities.
2
<PAGE>
DATASOFT LIMITED
REPORT OF THE DIRECTORS
The Directors have pleasure in submitting their report together with
audited accounts of the Company for the year ended 31 December 1997.
1. PRINCIPAL ACTIVITIES AND REVIEW OF THE BUSINESS
The Company is engaged in the development, installation and support of
tailored accounting systems.
2. PROFITS FOR THE YEAR AND STATE OF AFFAIRS AS AT 31 DECEMBER 1996
The Profit and Loss Account and Balance Sheet for the year ended 31
December 1997 are shown on pages 6 to 12.
3. DIVIDENDS
The directors do not recommend the payment of any dividend.
4. DIRECTORS
The present membership of the Board is set out on page 1.
5. EVENTS SINCE YEAR END
There have been no significant events affecting the company since the year
end.
6. AUDITORS
Cooney Carey, Chartered Accountants and Registered Auditors, having
expressed their willingness, continue in office in accordance with Section
160 of the Companies Act 1963.
7. SAFETY, HEALTH & WELFARE AT WORK ACT, 1989
The Company has prepared a Safety Statement in accordance with the Safety,
Health and Welfare at Work Act, 1989 and has implemented it's terms in all
of the Company's workplaces.
ON BEHALF OF THE BOARD
GERRY ARKINS
______________________
NIALL KEATING
______________________
DIRECTORS
DATE: 24 FEBRUARY 1998
3
<PAGE>
REPORT OF THE AUDITORS
TO THE SHAREHOLDERS OF
DATASOFT LIMITED
We have audited the financial statements set out on pages 8 to 12 which have
been prepared under the historical cost convention and the accounting policies
set out on pages 6 and 7.
RESPECTIVE RESPONSIBILITIES OF DIRECTORS AND AUDITORS
As described on page 2 the company's directors are responsible for the
preparation of financial statements. It is our responsibility to form an
independent opinion, based on our audit, on those statements and to report our
opinion to you.
BASIS OF OPINION
We conducted our audit in accordance with Auditing Standards issued by the
Auditing Practices Board. An audit includes examination, on a test basis, of
evidence relevant to the amounts and disclosures in the financial statements. It
also includes an assessment of the significant estimates and judgements made by
the directors in the preparation of the financial statements, and of whether the
accounting policies are appropriate to the company's circumstances, consistently
applied and adequately disclosed.
We planned and performed our audit so as to obtain all the information and
explanations which we considered necessary in order to provide us with
sufficient evidence to give reasonable assurance that the financial statements
are free from material misstatement, whether caused by fraud or other
irregularity or error. In forming our opinion we also evaluated the overall
adequacy of the presentation of information in the financial statements.
OPINION
In our opinion the financial statements give a true and fair view of the state
of the company's affairs at 31 December 1997 and of its profits for the year
then ended and have been properly prepared in accordance with the Companies
Acts, 1963 to 1990.
4
<PAGE>
REPORT OF THE AUDITORS (CONT'D)
TO THE SHAREHOLDERS OF
DATASOFT LIMITED
We have obtained all the information and explanations we considered necessary
for the purposes of our audit. In our opinion, proper books of account have been
kept by the company. The financial statements are in agreement with the books of
account.
In our opinion the information given in the Report of the Directors on page 3 is
consistent with the financial statements.
The net assets of the company, as stated in the balance sheet on page 9, are
more than half of the amount of its called-up share capital and, in our opinion,
on that basis there did not exist at 31 December 1997 a financial situation
which under Section 40(1) of the Companies (Amendment) Act 1983 would require
the convening of an extraordinary general meeting of the company.
COONEY CAREY
CHARTERED ACCOUNTANTS & REGISTERED AUDITORS
4/5 DAWSON STREET
DUBLIN 2
DATE: 24 FEBRUARY 1998
5
<PAGE>
DATASOFT LIMITED
ACCOUNTING POLICIES
FOR THE YEAR ENDED 31 DECEMBER 1997
FIXED ASSETS AND DEPRECIATION
The cost of fixed assets is written off by equal annual instalments over their
estimated useful lives as follows:-
<TABLE>
<S> <C>
Computers 20% Straight line
Office Equipment 12.5% Straight line
Furniture 12.5% Straight line
</TABLE>
TURNOVER
The turnover of the company is the amount invoiced to customers for goods &
services provided, exclusive of value added tax.
INTANGIBLE ASSETS
Development expenditure is written off in the year of expenditure except in the
following circumstances where it may be deferred to future periods:
(a) There is a clearly defined project, and
(b) the related expenditure is separately identifiable, and
(c) the outcome of such a project has been assessed with reasonable certainty as
to:
(1) its technical feasibility, and
(2) its ultimate commercial viability
(d) the aggregate of the deferred development costs, any further development
costs, and related production, selling and administration costs is
reasonably expected to be exceeded by related future sales or other
revenues, and
(e) adequate resources exist,or are reasonably expected to be available, to
enable the project to be completed and to provide any consequential
increases in working capital.
In the foregoing circumstances development expenditure may be deferred to the
extent that its recovery can reasonably be regarded as assured.
The development expenditure will be amortised to the profit and loss account
over a five year period, upon completion of the project.
6
<PAGE>
DATASOFT LIMITED
ACCOUNTING POLICIES (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 1997
ACCOUNTING CONVENTION
The financial statements have been prepared under the historical cost
convention.
WORK IN PROGRESS
Work in progress represents costs incurred by the company that are not invoiced
to customers at the accounting year end.
GOODWILL
Goodwill is amortised through the profit and loss account in arriving at profit
or loss on ordinary activities, on a systematic basis over its useful economic
life.
7
<PAGE>
DATASOFT LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 DECEMBER 1997
<TABLE>
<CAPTION>
AS
RE-STATED
1997 1996
NOTES IR(pound) IR(pound)
-----
<S> <C> <C> <C>
TURNOVER 177,581 137,172
Cost of Sales (13,034) 8,760
-------- --------
GROSS PROFIT 164,547 145,932
Administrative expenses (158,282) (147,745)
Interest Payable
& Similar Charges (3,055) (938)
-------- --------
PROFIT/(LOSS) ON ORDINARY
ACTIVITIES BEFORE TAXATION 2 3,210 (2,751)
Taxation 3 2,773 (2,882)
-------- --------
PROFIT/(LOSS) RETAINED FOR THE YEAR 5,983 (5,633)
-------- --------
PROFIT BROUGHT FORWARD 29,451 22,414
Prior Year Adjustment 5 (12,670) -
-------- --------
REVISED PROFIT BROUGHT FORWARD 16,781 22,414
-------- --------
PROFIT CARRIED FORWARD 22,764 16,781
======== ========
</TABLE>
The financial statements which include the notes on pages 10 to 12 were
approved by the Directors on the
ON BEHALF OF THE BOARD
GERRY ARKINS
----------------------
NIALL KEATING
----------------------
DIRECTORS
DATE: 24 FEBRUARY 1998
8
<PAGE>
DATASOFT LIMITED
BALANCE SHEET
AS AT 31 DECEMBER 1997
<TABLE>
<CAPTION>
AS
RE-STATED
1997 1996
NOTES IR(pound) IR(pound)
-----
<S> <C> <C> <C>
FIXED ASSETS
Tangible Assets 6 8,337 9,010
Intangible Assets 4 47,720 29,250
------- -------
56,057 38,260
CURRENT ASSETS
Work in Progress 6,200 11,430
Debtors 7 58,227 48,624
------- -------
64,427 60,054
CREDITORS (AMOUNTS FALLING
DUE WITHIN ONE YEAR) 9 (82,320) (66,133)
------- -------
NET CURRENT (LIABILITIES) (17,893) (6,079)
------- -------
TOTAL ASSETS LESS CURRENT LIABILITIES 38,164 32,181
======= =======
FINANCED BY
CAPITAL AND RESERVES
Called Up Share Capital 10 200 200
Share Premium 15,200 15,200
Profit and Loss Account 22,764 16,781
------- -------
38,164 32,181
======= =======
</TABLE>
The financial statements which include the notes on pages 10 to 12 were approved
by the Directors on the
ON BEHALF OF THE BOARD
GERRY ARKINS
----------------------
NIALL KEATING
----------------------
DIRECTORS
DATE: 24 FEBRUARY 1998
9
<PAGE>
DATASOFT LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 1997
1. EMPLOYEES AND REMUNERATION
The average number of persons employed by the company during the financial
year was 3 (1996 - 2).
<TABLE>
<CAPTION>
1997 1996
IR(pound) IR(pound)
<S> <C> <C>
THE STAFF COSTS ARE COMPRISED OF:
Wages and Salaries 84,263 73,074
Social Welfare Costs 1,873 1,765
Pension 6,734 6,413
------ ------
92,870 81,252
======= =======
</TABLE>
2. PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION
<TABLE>
<CAPTION>
Profit is stated after charging: 1997 1996
IR(pound) IR(pound)
<S> <C> <C>
Auditors Fees 1,200 1,200
Depreciation 2,555 2,444
Directors Remuneration (Including Pension) 71,734 64,413
======= =======
</TABLE>
3. TAXATION
<TABLE>
<CAPTION>
1997 1996
IR(pound) IR(pound)
<S> <C> <C>
BASED ON THE PROFITS FOR THE YEAR:
---------------------------------
Corporation Tax @ 30%/38% less
Manufacturing Relief - 2,882
Over-provision in prior years (2,773) -
------ -----
(2,773) 2,882
======= =======
</TABLE>
4. INTANGIBLE ASSETS
<TABLE>
<CAPTION>
DEVELOPMENT
EXPENDITURE GOODWILL TOTAL
IR(pound) IR(pound) IR(pound)
<S> <C> <C> <C>
Opening Balance 15,480 13,770 29,250
Additions during year 20,000 - 20,000
Amortised to P & L - (1,530) (1,530)
------ ------ ------
Closing balance 35,480 12,240 47,720
====== ====== ======
</TABLE>
All development expenditure on the new software project is being deferred
until the project is completed. From the date of completion, the deferred
expenditure will be amortised over a five-year period.
The goodwill arose on the acquisition of the business previously carried on
by the new shareholder. The goodwill is to be amortised to the profit and
loss account over ten years.
10
<PAGE>
DATASOFT LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 1997
5. PRIOR YEAR ADJUSTMENT
The prior year adjustment arose due to an under-provision of
IR(pound)12,670 which related to maintenance sales invoices raised in
advance.
6. TANGIBLE FIXED ASSETS
<TABLE>
<CAPTION>
OFFICE
COMPUTERS EQUIPMENT FURNITURE TOTAL
--------- --------- --------- -----
<S> <C> <C> <C> <C>
COST
Balance 01/01/97 10,324 1,486 1,544 13,354
Additions 1,742 140 - 1,882
------ ----- ----- ------
At 31/12/97 12,066 1,626 1,544 15,236
====== ===== ===== ======
DEPRECIATION
Balance 01/01/97 3,480 424 440 4,344
Charge for year 2,173 189 193 2,555
------ ----- ----- ------
At 31/12/97 5,653 613 633 6,899
====== ===== ===== ======
NET BOOK VALUE
At 31/12/97 6,413 1,013 911 8,337
====== ===== ===== ======
At 31/12/96 6,844 1,062 1,104 9,010
====== ===== ===== ======
</TABLE>
7. DEBTORS (RECEIVABLE WITHIN ONE YEAR)
<TABLE>
<CAPTION>
1997 1996
IR(pound) IR(pound)
<S> <C> <C>
Trade Debtors 50,427 38,429
Prepayments 3,427 2,094
Corporation Tax 3,146 -
Directors & Connected Party Loans (Note 8) 1,227 2,859
Other Debtors - 5,242
------ ------
58,227 48,624
====== ======
</TABLE>
11
<PAGE>
DATASOFT LIMITED
NOTES TO THE FINANCIAL
STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 1997
8. DIRECTORS AND CONNECTED PARTY LOANS
<TABLE>
<CAPTION>
1997 1996
IR(pound) IR(pound)
<S> <C> <C>
Patricia Keating 241 1,873
Niall Keating 986 986
----- -----
1,227 2,859
===== =====
</TABLE>
The loans are shown at their highest levels.
9. CREDITORS (PAYABLE WITHIN ONE YEAR)
<TABLE>
<CAPTION>
AS
RE-STATED
1997 1996
IR(pound) IR(pound)
<S> <C> <C>
Trade Creditors 1,189 8,452
Accruals 38,728 14,018
VAT 9,343 3,579
PAYE/PRSI 4,422 7,519
Corporation Tax - 2,190
Bank overdraft 28,638 30,375
------ ------
82,320 66,133
====== ======
</TABLE>
10. SHARE CAPITAL
<TABLE>
<CAPTION>
1997 1995
IR(pound) IR(pound)
<S> <C> <C>
AUTHORISED:
100,000 Ordinary Shares of IR(pound)1 Each 100,000 100,000
======= =======
ALLOTTED AND FULLY PAID:
200 ordinary shares of IR(pound)1 each 200 200
======= =======
</TABLE>
11. DIRECTORS SHAREHOLDING
The directors of the company hold the following beneficial interests in the
ordinary share capital of the company
<TABLE>
<CAPTION>
1997 1996
IR(pound) IR(pound)
<S> <C> <C>
Alan Kiely Nil Nil
Niall Keating 100 100
Gerry Arkins 100 100
--- ---
</TABLE>
12
<PAGE>
DATASOFT LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 1997
13. RECONCILIATION BETWEEN IRISH GAAP AND US GAAP
The financial statements of the company set out on pages 4 to 12 have been
prepared in accordance with generally accepted accounting principles in Ireland
(Irish GAAP) which differ in certain significant respects from those applicable
in the US (US GAAP). The material diferences as they apply to the Company's
financial statements are as follows:
(A) INTANGIBLE FIXED ASSETS - DEVELOPMENT COSTS
Under Irish GAAP research and development costs are charged against profit in
the year they are incurred, except insofar as it relates to a clearly defined
project and the benefits therefrom can reasonably be regarded as assured.
Expenditure so deferred is limited to the value of future benefits and is
amortised through the profit and loss account on a systematic basis over the
period expected to benefit from the project. Development costs are expensed as
incurred under US GAAP.
The following is a summary of the material adjustments to profit and
shareholders' equity which would be required had the financial statements been
prepared under US GAAP:
(1) EFFECT ON RETAINED PROFIT
<TABLE>
<CAPTION>
1997 1996
IR(pound) IR(pound)
<S> <C> <C>
Profit/(Loss) as stated under Irish GAAP 5,983 (5,633)
US GAAP Adjustments
Development costs written off (20,000) (9,480)
------- ------
Net Income/(Loss) under US GAAP (14,017) (15,113)
------- -------
</TABLE>
(2) EFFECT ON SHAREHOLDERS' EQUITY
<TABLE>
<CAPTION>
1997 1996
IR(pound) IR(pound)
<S> <C> <C>
Shareholders' Equity as stated under Irish GAAP 38,164 32,181
US GAAP Adjustments
Development costs written off (35,480) (15,480)
------- -------
Shareholders' Equity as stated under US GAAP 2,684 16,701
------- -------
</TABLE>
13
<PAGE>
DATASOFT LIMITED
DETAILED PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 DECEMBER 1997
<TABLE>
<CAPTION>
AS
RE-STATED
1997 1996
IR(pound) IR(pound)
<S> <C> <C>
REVENUE:
Sales Datasoft Software 80,834 41,595
Software Modifications 33,484 41,634
Software Maintenance 46,668 29,947
Other Sales 16,595 23,996
------- -------
177,581 137,172
COST OF SALES:
Opening Work in Progress (11,430) -
Closing Work in Progress 6,200 11,430
------- -------
GROSS PROFIT 172,351 148,602
OVERHEADS:
Purchases of Accessories/Software 7,804 2,670
Contract Development 7,122 1,325
Staff Pension/VHI 7,355 6,873
Salaries 21,137 16,840
Directors' Salaries 47,500 58,000
Training Costs 3,221 -
Commission 4,417 3,460
Motor Expenses 20,397 22,321
Sundry Expenses 5,246 3,824
Entertainment 1,096 1,004
Consultancy 2,742 2,648
Depreciation Furniture 193 193
Depreciation Computer Equipment 2,173 2,065
Depreciation Office Equiptment 189 186
Office Rent 11,365 9,835
Discs 103 206
Insurance 204 221
Printing, Postage & Stationery 1,088 1,032
Advertising 4,699 2,351
Telephone & Telex 9,710 7,663
Travelling Expenses 3,355 2,939
Audit & Accountancy Fees 3,390 3,229
Bank Interest & Charges 3,055 938
Loss on Exchange 50 -
Amortisation of Goodwill 1,530 1,530
------- -------
169,141 151,353
------- -------
PROFIT/(LOSS) ON ORDINARY
ACTIVITIES BEFORE TAXATION 3,210 (2,751)
===== ======
</TABLE>
14
<PAGE>
EXHIBIT FS-12
DATASOFT LIMITED DIRECTORS' REPORT AND FINANCIAL
STATEMENTS FOR THE PERIOD ENDED 16 JULY 1999
<PAGE>
Datasoft Limited
Directors' Report and Financial Statements
For the period ended 16 July 1999
<PAGE>
DATASOFT LIMITED
COMPANY INFORMATION
<TABLE>
<S> <C>
DIRECTORS Niall Keating (Resigned on the 16 July 1999)
Gerry Arkins (Resigned on the 16 July 1999)
Alan Kiely (Resigned on the 16 July 1999)
Mark Howell (Appointed on the 16 July 1999)
Paul Carroll (Appointed on the 16 July 1999)
SECRETARY Niall Keating (Resigned on the 16 July 1999)
Helena Mulcahy (Appointed on the 16 July 1999)
COMPANY NUMBER 209434
REGISTERED OFFICE Premier Group House
Camden Lock
South Dock Road
Dublin 4
AUDITORS Cooney Carey
Chartered Accountants and Registered Auditors
4/5 Dawson Street
Dublin 2
BANKERS Allied Irish Bank Plc
69/71 Morehampton Road
Ranelagh
Dublin 6
</TABLE>
<PAGE>
DATASOFT LIMITED
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
-------
<S> <C>
Directors' Report 1 - 2
Auditors' Report 3 - 4
Profit and Loss Account 5
Balance Sheet 6
Notes to the Financial Statements 7 - 11
* The following pages do not form part of
the statutory financial statements
Detailed Trading and Profit & Loss Account 12 - 13
</TABLE>
<PAGE>
DATASOFT LIMITED
DIRECTORS' REPORT
FOR THE PERIOD ENDED 16 JULY 1999
The directors present their report and the financial statements for the period
ended 16 July 1999.
PRINCIPAL ACTIVITY
The principal activity of the company is the development, installation and
support of tailored accounting systems.
RESULTS FOR THE PERIOD AND STATE OF AFFAIRS AS AT 16 JULY 1999
The profit and loss account and balance sheet for the period ended 16 July 1999
are set out on pages 5 to 11. Loss on ordinary activities before taxation is
stated in the profit and loss account on page 5.
The state of affairs is set out in the balance sheet on page 6.
DIVIDENDS AND RETENTIONS
The directors are not recommending the payment of a dividend for the period.
Directors
The Directors of the Company are those listed on the company information page.
YEAR 2000
Many computers and digital storage systems express using the last two digits for
the year and will thus require modification or replacement to accommodate the
year 2000 and beyond in order to avoid malfunctions and commerical disruption.
Datasoft Limited is currently in the process of assessing the potential impact
of the above on the company, its suppliers and customers and is developing
action plans to address the key issues in advance of critical dates and without
disruption to the company's business. These plans will ensure that all affected
computer operations are replaced or modified prior to the critical date.
Whilst no detailed cost estimates are currently available, in the directors
opinion, the incremental costs associated with Year 2000 compliance are not
expected to be material.
EURO
Datasoft Limited is currently in the process of reviewing the effect the Euro
will have on its commercial and financial processes and its computer systems and
is carrying out action plans designed to address the Euro in advance of critical
dates without disruption to the business.
HEALTH AND SAFETY OF EMPLOYEES
It is the policy of the company to ensure the health and welfare of employees by
maintaining a safe place and system of work. This policy is based on the
requirements of employment legislation, including the Safety, Health and Welfare
at Work Act, 1989.
PAGE 1
<PAGE>
DATASOFT LIMITED
DIRECTORS' REPORT
FOR THE PERIOD ENDED 16 JULY 1999
FUTURE DEVELOPMENTS IN THE BUSINESS
The Directors will continue to develop the activities of the company in the
ensuing year.
DIRECTORS' RESPONSIBILITIES
Company law requires the directors to prepare financial statements for each
financial period which give a true and fair view of the state of the affairs of
the company and of the profit or loss of the company for that period. In
preparing these the directors are required to:
- - select suitable accounting policies and apply them consistently;
- - make judgements and estimates that are reasonable and prudent;
- - state whether applicable accounting standards have been followed, subject
to any material departures disclosed and explained in the financial
statements;
- - prepare the financial statements on the going concern basis unless it is
inappropriate to presume that the company will continue in business.
The directors are responsible for keeping proper accounting records which
disclose with reasonable accuracy at any time the financial position of the
company and to enable them to ensure that the financial statements comply with
the Companies Acts 1963 to 1990. They are also responsible for safeguarding the
assets of the company and hence for taking reasonable steps for the prevention
and detection of fraud and other irregularities.
POST BALANCE SHEET EVENTS
There were no significant events affecting the company since the balance sheet
date.
AUDITORS
Cooney Carey, Chartered Accountants and Registered Auditors, have indicated
their willingness to continue in office in accordance with Section 160 of the
Companies Act, 1963.
ON BEHALF OF THE BOARD
MARK HOWELL PAUL CARROLL
- ----------------------- -----------------
DIRECTOR DIRECTOR
DATE:- 16TH NOVEMBER 1999
PAGE 2
<PAGE>
DATASOFT LIMITED
REPORT OF THE AUDITORS
TO THE MEMBERS OF DATASOFT LIMITED
We have audited the financial statements on pages 5 to 11 which have been
prepared under the historical cost convention and the accounting policies set
out on page 7.
RESPECTIVE RESPONSIBILITIES OF DIRECTORS AND AUDITORS
As described on page 1 - 2 the company's directors are responsible for the
preparation of financial statements. It is our responsibility to form an
independent opinion, based on our audit, on those statements and to report our
opinion to you.
BASIS OF OPINION
We conducted our audit in accordance with Auditing Standards issued by the
Auditing Practices Board. An audit includes examination, on a test basis, of
evidence relevant to the amounts and disclosures in the financial statements. It
also includes an assessment of the significant estimates and judgements made by
the directors in the preparation of the financial statements, and of whether the
accounting policies are appropriate to the company's circumstances, consistently
applied and adequately disclosed.
We planned and performed our audit so as to obtain all the information and
explanations which we considered necessary in order to provide us with
sufficient evidence to give reasonable assurance that the financial statements
are free from material misstatement, whether caused by fraud or other
irregularity or error. In forming our opinion we also evaluated the overall
adequacy of the presentation of information in the financial statements.
GOING CONCERN
The Company incurred losses for the period after taxation of IR(pound) 76,237
(1998 - Profit of IR(pound) 4,464) and the Company's net liabilities at the
period end was IR(pound) 33,609 (1998 - net assets IR(pound) 42,628). The
Company's holding company has pledged to support the Company for the
forseeable future. In this regard the financial statements have been prepared
on a going concern basis. Our opinion is not qualified in this regard.
PAGE 3
<PAGE>
DATASOFT LIMITED
REPORT OF THE AUDITORS
TO THE MEMBERS OF DATASOFT LIMITED
OPINION
In our opinion the financial statements give a true and fair view of the state
of the company's affairs as at the 16 July 1999 and of its results for the
period then ended and have been properly prepared in accordance with the
Companies Acts 1963 to 1990.
We have obtained all the information and explanations we considered necessary
for the purposes of our audit. In our opinion proper books of account have been
kept by the company. The financial statements are in agreement with the books of
account.
In our opinion the information given in the directors' report on pages 1 - 2 is
consistent with the financial statements.
The net assets of the company, as stated in the Balance Sheet on page 6, are
less than half of the amount of its called up share capital and, in our opinion,
on that basis there does exist at 16 July 1999 a financial situation which under
Section 40(1) of the Companies (Amendment) Act 1983 may require the convening of
an extraordinary meeting of the company.
COONEY CAREY
CHARTERED ACCOUNTANTS AND
REGISTERED AUDITORS
4/5 DAWSON STREET
DUBLIN 2
DATE:- 17TH NOVEMBER 1999
PAGE 4
<PAGE>
DATASOFT LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE PERIOD ENDED 16 JULY 1999
<TABLE>
<CAPTION>
1999 1998
IR(pound) IR(pound)
NOTES
<S> <C> <C> <C>
TURNOVER - CONTINUING ACTIVITIES 121,272 210,303
Cost of sales (3,596) (6,200)
-------- --------
GROSS PROFIT 117,676 204,103
Net operating expenses (192,465) (196,665)
-------- --------
OPERATING (LOSS)/PROFIT - CONTINUING ACTIVITIES (74,789) 7,438
Loss on disposal of tangible assets (989) -
-------- --------
(LOSS)/PROFIT ON ORDINARY ACTIVITIES
BEFORE INTEREST (75,778) 7,438
Interest payable and similar charges (459) (3,520)
-------- --------
(LOSS)/PROFIT ON ORDINARY ACTIVITIES
BEFORE TAXATION 3 (76,237) 3,918
Taxation 4 - 546
-------- --------
(LOSS)/PROFIT ON ORDINARY ACTIVITIES
AFTER TAXATION (76,237) 4,464
PROFIT BROUGHT FORWARD 27,228 22,764
-------- --------
(LOSS)/PROFIT CARRIED FORWARD (49,009) 27,228
======== ========
</TABLE>
No statement of recognised gains and losses has been prepared as there have
been no recognised gains or losses other than those shown above.
There is no material difference between the (loss)/profit on ordinary
activities before taxation and the retained (loss)/profit for the period and
their historical cost equivalents.
The financial statements which include the notes on pages 7 - 11 were
approved by the board on 16th November 1999.
ON BEHALF OF THE BOARD
MARK HOWELL
- -------------------------
DIRECTOR
PAUL CARROLL
- -------------------------
DIRECTOR
PAGE 5
<PAGE>
DATASOFT LIMITED
BALANCE SHEET AS AT 16 JULY 1999
<TABLE>
<CAPTION>
1999 1998
NOTES IR(pound) IR(pound)
<S> <C> <C> <C>
FIXED ASSETS
Tangible assets 5 20,667 12,629
Intangible assets 6 - 46,739
---------- -------
20,667 59,368
---------- -------
CURRENT ASSETS
Debtors 7 89,491 58,579
CREDITORS: AMOUNTS FALLING
DUE WITHIN ONE YEAR 9 (137,246) (67,531)
---------- -------
NET CURRENT (LIABILITIES) (47,755) (8,952)
---------- -------
TOTAL ASSETS LESS CURRENT LIABILITIES (27,088) 50,416
CREDITORS: AMOUNTS FALLING DUE
AFTER MORE THAN ONE YEAR 10 (6,521) (7,788)
---------- -------
(33,609) 42,628
========== =======
FINANCED BY:
CAPITAL AND RESERVES
Called up share capital 11 200 200
Share Premium 15,200 15,200
Profit and loss account (49,009) 27,228
---------- -------
13 (33,609) 42,628
========== =======
</TABLE>
The financial statements which include the notes on pages 7 - 11 were
approved by the board on 16th November 1999.
ON BEHALF OF THE BOARD
MARK HOWELL
- -------------------------
DIRECTOR
PAUL CARROLL
- -------------------------
DIRECTOR
PAGE 6
<PAGE>
DATASOFT LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 16 JULY 1999
1. ACCOUNTING POLICIES
1.1. ACCOUNTING CONVENTION
The financial statements are prepared under the historical cost
convention. The company has taken advantage of the exemption in FRS1
from the requirement to produce a cashflow statement because it is a
small company.
1.2. TURNOVER
Turnover represents the total invoice value, excluding value added tax,
of sales made during the period.
1.3. GOODWILL
Goodwill is amortised through the profit and loss account in arriving
at profit or loss on ordinary activities, on a systematic basis over
its useful economic life.
1.4. RESEARCH AND DEVELOPMENT
Research expenditure is written off to the profit and loss account in
the year in which it is incurred. Development expenditure is written
off in the same year unless the directors are satisfied as to the
technical, commercial and financial viability of individual projects.
In this situation, the expenditure is deferred and amortised over the
period from which the company is expected to benefit.
1.5. TANGIBLE FIXED ASSETS AND DEPRECIATION
Depreciation is provided at rates calculated to write off the cost less
residual value of each asset over its expected useful life, as follows:
Computers - 20% Straight Line
Office Equipment - 12.5% Straight Line
Furniture - 12.5% Straight line
Motor vehicles - 25% Straight Line
2. EMPLOYEES AND REMUNERATION
NUMBER OF EMPLOYEES
The average number of employees (including the directors) during the
year was 4 (1998-4).
EMPLOYMENT COSTS
<TABLE>
<CAPTION>
1999 1998
IR(pound) IR(pound)
<S> <C> <C>
Wages and salaries 72,768 102,449
Social welfare costs 3,825 3,258
Pension costs 4,259 7,070
-------- -------
80,852 112,777
======== =======
</TABLE>
PAGE 7
<PAGE>
DATASOFT LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 16 JULY 1999
............... continued
3. (LOSS)/PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION
(Loss)/profit on ordinary activites before taxation is stated after
charging:
<TABLE>
<CAPTION>
1999 1998
IR(pound) IR(pound)
<S> <C> <C>
Amortisation of goodwill 10,710 1,530
Depreciation of tangible assets 2,561 3,999
Amortised deferred expenditure 37,463 9,007
Directors' remuneration 41,420 72,680
Auditors' remuneration 1,850 1,500
====== ======
</TABLE>
4. TAXATION
<TABLE>
<CAPTION>
1999 1998
IR(pound) IR(pound)
<S> <C> <C>
Over-provision in prior years - (546)
====== ======
</TABLE>
There is no taxation charge in the current period due to the incidence
of losses.
5. TANGIBLE ASSETS
<TABLE>
<CAPTION>
LEASED
COMPUTER OFFICE MOTOR
EQUIPMENT FURNITURE EQUIPMENT VEHICLES TOTAL
IR(pound) IR(pound) IR(pound) IR(pound) IR(pound)
<S> <C> <C> <C> <C> <C>
Cost
At 1 January 1999 20,037 1,644 1,846 - 23,527
Additions 3,788 300 - 7,500 11,588
Disposals - (1,944) - - (1,944)
------ ------ ----- ----- -------
At 16 July 1999 23,825 - 1,846 7,500 33,171
------ ------ ----- ----- -------
DEPRECIATION
At 1 January 1999 9,196 835 867 - 10,898
On disposals - (955) - - (955)
Charge for the period 2,171 120 114 156 2,561
------ ------ ----- ----- -------
At 16 July 1999 11,367 - 981 156 12,504
------ ------ ----- ----- -------
NET BOOK VALUES
At 16 July 1999 12,458 - 865 7,344 20,667
======= ===== ===== ===== ======
At 31 December 1998 10,841 809 979 - 12,629
======= ===== ===== ===== ======
</TABLE>
At 16th July 1999 the company had not authorised or contracted for
further capital expenditure not provided for in the financial
statements.
PAGE 8
<PAGE>
DATASOFT LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 16 JULY 1999
............... continued
6. INTANGIBLE FIXED ASSETS
<TABLE>
<CAPTION>
DEVELOPMENT
COSTS GOODWILL Total
IR(pound) IR(pound) IR(pound)
<S> <C> <C> <C>
COST
At 1 January 1999 36,029 10,710 46,739
Additions 1,434 - 1,434
Amortised during year (37,463) (10,710) (48,173
-------- ------- -------
At 16 July 1999 - - -
======== ======= =======
</TABLE>
Development expenditure is being amortised in full. Goodwill arose on
the aquisition of the business previously carried on by a shareholder.
The goodwill is amortised in full.
7. DEBTORS
<TABLE>
<CAPTION>
1999 1998
IR(pound) IR(pound)
<S> <C> <C>
Trade debtors 79,230 52,981
Prepayments 8,156 4,178
Directors' Loans 1,413 728
Corporation Tax 692 692
------ ------
89,491 58,579
====== ======
</TABLE>
8. DIRECTORS AND CONNECTED PARTY LOANS
<TABLE>
<CAPTION>
1999 1998
IR(pound) IR(pound)
<S> <C> <C>
Gerard Arkins 85 -
Niall Keating 1,328 728
------ ------
1,413 728
====== ======
</TABLE>
PAGE 9
<PAGE>
DATASOFT LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 16 JULY 1999
............... continued
9. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
<TABLE>
<CAPTION>
1999 1998
IR(pound) IR(pound)
<S> <C> <C>
Trade creditors 10,562 5,621
Accruals 64,838 2,609
Lease creditor 6,284 -
Vat 24,551 12,923
Paye/Prsi 6,134 9,329
Bank overdraft 21,932 32,426
Bank loan 2,945 4,623
------- ------
137,246 67,531
======= ======
</TABLE>
10. CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR
<TABLE>
<CAPTION>
1999 1998
IR(pound) IR(pound)
<S> <C> <C>
Bank Loan 6,521 7,788
====== =====
</TABLE>
11. SHARE CAPITAL
<TABLE>
<CAPTION>
1999 1998
IR(pound) IR(pound)
<S> <C> <C>
AUTHORISED EQUITY
100,000 Ordinary Shares of
IR(pound) 1 Each 100,000 100,000
======= =======
ISSUED
200 Ordinary shares of
IR(pound) 1 each 200 200
======= =======
</TABLE>
12. DIRECTORS SHAREHOLDINGS
The directors of the company hold the following interests in the
ordinary share capital of the company:
<TABLE>
<CAPTION>
1999 1998
IR(pound) IR(pound)
<S> <C> <C>
Alan Kiely Nil Nil
Niall Keating Nil 100
Gerry Arkins Nil 100
Mark Howell Nil N\A
Paul Carroll Nil N\A
=== ===
</TABLE>
PAGE 10
<PAGE>
DATASOFT LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 16 JULY 1999
............... continued
13. RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS
<TABLE>
<CAPTION>
1999 1998
IR(pound) IR(pound)
<S> <C> <C>
(Loss)/profit for the period (76,237) 4,464
Opening shareholders' funds 42,628 38,164
------- ------
Closing shareholders' funds (33,609) 42,628
======= ======
</TABLE>
14. ACCOUNTING PERIOD
The current accounting period is from 1 st January 1999 to 16th July
1999. The comparative accounting period is the year ended 31 st
December 1998.
15. HOLDING COMPANY
The company is a wholly owned subsidiary of Premier Software Limited, a
company having its registered office at Premier Group House, Camden
Lock, South Dock Road, Dublin 4.
PAGE 11
<PAGE>
DATASOFT LIMITED
DETAILED TRADING AND PROFIT AND LOSS ACCOUNT
FOR THE PERIOD ENDED 16 JULY 1999
<TABLE>
<CAPTION>
1999 1998
IR(pound) IR(pound)
<S> <C> <C>
SALES
Sales Datasoft Software 47,199 75,552
Software Modifications 28,165 67,465
Software Maintenance 36,700 58,761
Other Sales 9,208 8,525
------- --------
121,272 210,303
COST OF SALES
Opening work in progress - (6,200)
Other purchases (3,596) -
------- --------
(3,596) (6,200)
------- --------
GROSS PROFIT 117,676 204,103
ADMINISTRATIVE EXPENSES (192,465) (196,665)
------- --------
(74,789) 7,438
OTHER EXPENSES
Loss on disposal of fixed assets (989) -
Bank interest & charges (185) (3,520)
Finance lease interest (274) -
------- --------
(LOSS)/PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION (76,237) 3,918
======= ========
</TABLE>
PAGE 12
<PAGE>
DATASOFT LIMITED
ADMINISTRATIVE EXPENSES
FOR THE PERIOD ENDED 16 JULY 1999
<TABLE>
<CAPTION>
1999 1998
IR(pound) IR(pound)
<S> <C> <C>
ADMINISTRATIVE EXPENSES
Purchase of accessories/software 4,456 2,326
Contract development - 1,000
Salaries 35,173 33,027
Directors' salary 41,420 72,680
Staff pension/Vhi 4,705 7,788
Staff costs 2,280 -
Office rent 5,400 11,697
Consultancy 4,240 2,110
Insurance 1,304 448
Light and heat 300 -
Repairs and maintenance 343 -
Courier charges 692 -
Printing, postage and stationery 642 1,766
Advertising 4,893 6,215
Telephone 5,123 9,203
Motor expenses 12,813 24,046
Travelling expenses 2,853 1,495
Entertainment 459 636
Amortised research & development costs 37,463 9,007
Legal and professional 8,786 -
Audit and accountancy 2,205 2,525
Bank interest and charges 1,316 -
Loss on exchange (12) 44
Sundry expenses 2,340 5,123
Amortisation of goodwill 10,710 1,530
Depreciation of office equipment 114 254
Depreciation of furniture 120 202
Depreciation of computer equipment 2,171 3,543
Depreciation of motor vehicles 156 -
------- -------
192,465 196,665
======= =======
</TABLE>
PAGE 13
<PAGE>
EXHIBITS
<TABLE>
<CAPTION>
Exhibit No. Description
- ----------- -----------
<S> <C>
2.1 CERTIFICATE OF AMENDMENT OF ARTICLES OF INCORPORATION OF
BIRDS EYE, INC. DATED AUGUST 7, 1998
2.2 CERTIFICATE OF AMENDMENT OF ARTICLES OF INCORPORATION OF
CULVER CITY STUDIO RECORDS, INC. DATED DECEMBER 8, 1997
2.3 ARTICLES OF INCORPORATION OF CULVER CITY STUDIO RECORDS, INC.
DATED JULY 27, 1977
2.4 BY-LAWS OF CULVER CITY STUDIO RECORDS, INC.
6.1 SHARE EXCHANGE AGREEMENT BETWEEN JEREMY S. HALL, THE WYSE
GROUP PLC AND INTEGRITY HOLDINGS, LTD.
6.2 DAVID MEYRICK BILLINGE, DEIRDRE JENNIFER SWINGLER, JOHN DAVID
SWINGLER AND INTEGRITY HOLDINGS LIMITED SHARE SALE AGREEMENT
DATED OCTOBER 1, 1998
6.3 BUSINESS DATA SYSTEMS LIMITED - AND INFORMATION SUPPORT
LIMITED - AND -ISL SOFTWARE SOLUTIONS LIMITED BUSINESS
EXCHANGE AGREEMENT DATED DECEMBER 2, 1998
6.4 PREMIER COMPUTER GROUP LIMITED - AND - INTEGRITY HOLDINGS
LIMITED SHARE SALE AND PURCHASE AGREEMENT
6.5 SAMPLE OF INTEGRITY HOLDINGS LTD. COMMON STOCK OPTION
AGREEMENT
6.6 STATEMENT OF PARTICULARS OF EMPLOYMENT UNDER SECTION 1 OF
THE EMPLOYMENT RIGHTS ACT 1996 FOR PAUL CARROLL
27 FINANCIAL DATA SCHEDULE
</TABLE>
<PAGE>
EXHIBIT 2.1
CERTIFICATE OF AMENDMENT OF ARTICLES OF INCORPORATION
OF BIRDS EYE, INC. DATED AUGUST 7, 1998
<PAGE>
3357CD
- ------
FILED IN THE OFFICE OF
THE SECRETARY OF STATE
OF THE STATE OF NEVADA
AUG 07 1998
C3272-77
- --------
[ILLEGIBLE] HELLER,
SECRETARY OF STATE
CERTIFICATE OF AMENDMENT
OF
ARTICLES OF INCORPORATION
OF
BIRDS EYE, INC.
We, the undersigned President and Secretary of BIRDS EYE, INC. do
hereby certify as follows:
1. That the Board of Directors of said corporation at a meeting
duly convened, held on July 13, 1998, adopted a resolution to amend the
Certificate of Amendment of Articles of Incorporation filed on December 8,
1997 as follows:
ARTICLE FIRST is hereby amended as follows:
NAME
----
The name of the corporation is INTEGRITY HOLDINGS, LTD.
2. The number of shares of the corporation outstanding and
entitled to vote on an amendment to the Articles of Incorporation is 594,450,
that said amendment has been consented to and approved by a majority vote of
the stockholders holding at least a majority of each class of stock
outstanding and entitled to vote thereon at a stockholders meeting held on
July 29, 1998.
/s/ Michael Foley
-----------------------------------
MICHAEL FOLEY
President
/s/ Paul C. Carroll
-----------------------------------
PAUL C. CARROLL
Secretary
PAGE 1 of 2
<PAGE>
REPUBLIC OF IRELAND )
)ss.
COUNTY OF DUBLIN )
On August 4th, 1998, personally appeared before me, a Notary Public,
MICHAEL FOLEY, known to me to be the person whose name is subscribed to the
foregoing Certificate of Amendment of Articles of Incorporation and
acknowledged that he executed the same.
/s/ Roger P. Ballagh
-----------------------------------
Notary Public
(Notary Stamp or Seal)
------------------------
ROGER P. BALLAGH
NOTARY PUBLIC FOR
CITY AND COUNTY [LOGO]
OF DUBLIN
COMMISSIONED FOR LIFE
20 NORTHUMBERLAND ROAD,
REPUBLIC OF IRELAND ) DUBLIN 4.
)ss. ------------------------
COUNTY OF DUBLIN )
On August 4, 1998, personally appeared before me, a Notary Public,
PAUL C. CARROLL, known to me to be the person whose name is subscribed to the
foregoing Certificate of Amendment of Articles of Incorporation and
acknowledged that he executed the same.
/s/ W. David Walley
-----------------------------------
Notary Public
W. DAVID WALLEY
(Notary Stamp or Seal) AMIENS STREET
DUBLIN 1, IRELAND.
NOTARY PUBLIC
COMMISSIONED FOR LIFE
PAGE 2 of 2 FOR THE COUNTY & CITY OF DUBLIN
<PAGE>
EXHIBIT 2.2
CERTIFICATE OF AMENDMENT OF ARTICLES
OF INCORPORATION OF CULVER CITY STUDIO
RECORDS, INC. DATED DECEMBER 8, 1997
<PAGE>
FILED
IN THE OFFICE OF THE
SECRETARY OF STATE OF THE
STATE OF NEVADA 11/05/1997 275.00
REC'D BY KR
CERTIFICATE OF AMENDMENT
OF ARTICLES OF INCORPORATION
OF CULVER CITY STUDIO RECORDS, INC.
We the undersigned, Noal Allred, President and Penny Allred, Secretary of
Culver City Studio Records, Inc., do hereby certify:
That the Board of Directors of said corporation at a meeting duly
convened, held on the 25th day of August, 1997 adopted a resolution to amend
the original articles as follows:
ARTICLE I WHICH PRESENTLY READS AS FOLLOWS:
ARTICLE FIRST
NAME
The name of the corporation is: Culver City Studio Records, Inc.
IS HEREBY AMENDED TO READ AS FOLLOWS:
The name of the corporation is: Birds Eye, Inc.
ARTICLE IV WHICH PRESENTLY READS AS FOLLOWS:
ARTICLE FOURTH
DIRECTORS
The number of directors of the corporation is three until changed
by an amendment of these Articles of Incorporation or a by-law duly
adopted by the shareholders of the corporation.
IS HEREBY AMENDED TO READ AS FOLLOWS:
ARTICLE FOURTH
DIRECTORS
The Directors are hereby granted the authority to do any act on
behalf of the Corporation as may be allowed by law. Any action taken
in good faith, shall be deemed appropriate and in each instance where
the Business Corporation Act provides that the Directors may act in
certain instances where the Articles of Incorporation so authorize, such
action by the Directors, shall be deemed to exist in these Articles and
the authority granted by said Act shall be imputed hereto without the
same specifically having been enumerated herein.
The Board of Directors may consist of from one (1) to nine (9)
directors, as determined, from time to time, by the then existing Board
of Directors.
<PAGE>
State of Utah
County of Salt Lake
On ________________, personally appeared before me, a Notary Public, Noal
Allred and Penny Allred who acknowledged that they executed the above
instrument.
Denise M. Williams
------------------
Notary Public
[SEAL]
<PAGE>
EXHIBIT 2.3
ARTICLES OF INCORPORATION OF CULVER CITY
STUDIO RECORDS, INC. DATED JULY 27, 1977
<PAGE>
[STAMP]
ARTICLES OF INCORPORATION
OF
CULVER CITY STUDIO RECORDS, INC.
For the purpose of forming this corporation under the laws of the State of
Nevada, the undersigned incorporators hereby state:
ARTICLE FIRST
NAME
The name of the corporation is:
Culver City Studio Records, Inc.
ARTICLE SECOND
PURPOSES AND DURATION
The purposes for which the corporation is formed are:
(a) To engage in any lawful business activity from time to time authorized
or approved by the board of directors of this corporation;
(b) To act as principal, agent, partner or joint venturer or in any other
legal capacity in any transaction;
(c) To do business anywhere in the world; and
(d) To have and exercise all rights and powers from time to time granted
to a corporation by law.
The above purpose clauses shall not be limited by reference to or inference
from one another, but each purpose clause shall be construed as a separate
statement conferring independent purposes and powers upon the corporation.
<PAGE>
The duration of this corporation shall be perpetual.
ARTICLE THIRD
LOCATION
The county in the State of Nevada where the principal office for the
transaction of the business of the corporation is located is the County of
Clark, and the address of the principal office is: 3890 S. Swenson, Suite 100,
Las Vegas, Nevada, 89109.
ARTICLE FOURTH
DIRECTORS
The number of directors of the corporation is three until changed by an
amendment of these Articles of Incorporation or a by-law duly adopted by the
shareholders of the corporation.
ARTICLE FIFTH
NAMES OF FIRST DIRECTORS AND INCORPORATORS
The names and addresses of the persons who are appointed to act as first
directors of the corporation, who are also the incorporators, are:
Joseph R. Laird, Jr.
3890 S. Swenson, Suite 100
Las Vegas, Nevada 89109
Kenneth J. Fisher
3890 S. Swenson, Suite 100
Las Vegas, Nevada 89109
Winsor Thomas Savery
3890 S. Swenson, Suite 100
Las Vegas, Nevada 89109
-2-
<PAGE>
ARTICLE SIXTH
STOCK
The corporation is authorized to issue only one class of stock, which shall
be designated Capital Stock.
The total number of shares of Capital Stock that the corporation is
authorized to issue is 100,000 shares. The aggregate par value of all of said
shares is $25,000, and the par value of each such share is $0.25.
IN WITNESS WHEREOF, the undersigned incorporators, who are also the first
directors of the corporation, have executed these Articles of Incorporation
on July 5, 1977.
/s/ Joseph R. Laird, Jr.
------------------------
Joseph R. Laird, Jr.
/s/ Kenneth J. Fisher
------------------------
Kenneth J. Fisher
/s/ Winsor Thomas Savery
------------------------
Winsor Thomas Savery
-3-
<PAGE>
STATE OF CALIFORNIA )
) SS.
COUNTY OF LOS ANGELES )
On this 5th day of July, 1977, before me, the undersigned, a Notary Public
in and for the said County and State, residing therein, duly commissioned and
sworn, personally appeared Joseph R. Laird, Jr., Kenneth J. Fisher, and Winsor
T. Savery, known to me to be the persons whose names are subscribed to the
within Articles of Incorporation, and acknowledged to me that they executed the
same.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
[SEAL] /s/ K. Edward Smith
-------------------------
Notary Public
<PAGE>
EXHIBIT 2.4
BY-LAWS OF CULVER CITY STUDIO RECORDS, INC.
<PAGE>
BY-LAWS
OF
CULVER CITY STUDIO RECORDS, INC
ARTICLE I - OFFICES
The principal office of the corporation in the State of NEVADA shall be
located at 2341 E. 6710 S. of Salt Lake City, Utah County of Salt Lake. The
corporation may have such other offices, either within or without the State of
incorporation as the board of directors may designate or as the business of the
corporation may from time to time require.
ARTICLE II - STOCKHOLDERS
1. ANNUAL MEETING.
The annual meeting of the stockholders shall be held on the 1st week of
July In each year, beginning with the year 1978 at the hour 10:00 o'clock
A.M., for the purpose of electing directors and for the transaction of such
other business as may come before the meeting. If the day fixed for the
annual meeting shall be a legal holiday such meeting shall be held on the
next succeeding business day.
2. SPECIAL MEETINGS.
Special meetings of the stockholders, for any purpose or purposes, unless
otherwise prescribed by statute, may be called by the president or by the
directors, and shall be called by the president at the request of the holders of
not less than 45 percent of all the outstanding shares of the corporation
entitled to vote at the meeting.
3. PLACE OF MEETING.
The directors may designate any place, either within or without the State
unless otherwise prescribed by statute, as the place of meeting for any annual
meeting or for any special meeting called by the directors. A waiver of notice
signed by all stockholders entitled to vote at a meeting may designate any
place, either within or without the state unless otherwise prescribed by
statute, as the place for holding such meeting. If no designation is made, or if
a special meeting be otherwise called, the place of meeting shall be the
principal office of the corporation.
BY-LAWS 1
<PAGE>
4. NOTICE OF MEETING.
Written or printed notice stating the place, day and hour of the meeting
and, in case of a special meeting, the purpose or purposes for which the
meeting is called, shall be delivered not less than 10 nor more than 45 days
before the date of the meeting, either personally or be mail, by or at the
direction of the president, or the secretary, or the officer or persons
calling the meeting, to each stockholder of record entitled to vote at such
meeting. If mailed, such notice shall be deemed to be delivered when
deposited in the United States mail, addressed to the stockholder at his
address as it appears on the stock transfer books of the corporation, with
postage thereon prepaid.
5. CLOSING OF TRANSFER BOOKS OR FIXING OF RECORD DATE.
For the purpose of determining stockholders entitled to notice of or to
vote at any meeting of stockholders or any adjournment thereof, or
stockholders entitled to receive payment of any dividend, or in order to make
a determination of stockholders for any other proper purpose, the directors
of the corporation may provide that the stock transfer books shall be closed
for a stated period but not to exceed, in any case, 5 days. If the stock
transfer books shall be closed for the purpose of determining stockholders
entitled to notice of or to vote at a meeting of stockholders, such books
shall be closed for at least 3 days immediately preceding such meeting. In
lieu of closing the stock transfer books, the directors may fix in advance a
date as the record date for any such determination of stockholders, such date
in any case to be not more than 5 days and, in case of a meeting of
stockholders, not less than 3 days prior to the date on which the particular
action requiring such determination of stockholders is to be taken. If the
stock transfer books are not closed and no record date is fixed for the
determination of stockholders entitled to notice of or to vote at a meeting
of stockholders, or stockholders entitled to receive payment of a dividend,
the date on which notice of the meeting is mailed or the date on which the
resolution of the directors declaring such dividend is adopted, as the case
may be, shall be the record date for such determination of stockholders. When
a determination of stockholders entitled to vote at any meeting of
stockholders has been made as provided in this section, such determination
shall apply to any adjournment thereof.
BY-LAWS 2
<PAGE>
6. VOTING LISTS.
The officer or agent having charge of the stock transfer books for shares
of the corporation shall make, at least 3 days before each meeting of
stockholders, a complete list of the stockholders entitled to vote at such
meeting, or any adjournment thereof, arranged in alphabetical order, with the
address of and the number of shares held by each, which list, for a period of 5
days prior to such meeting, shall be kept on file at the principal office of the
corporation and shall be subject to the inspection of any stockholder during the
whole time of the meeting. The original stock transfer book shall be prima facie
evidence as to who are the stockholders entitled to examine such list or
transfer books or to vote at the meeting of stockholders.
7. QUORUM.
At any meeting of stockholders 80% of the outstanding shares of the
corporation entitled to vote, represented in person or by proxy, shall
constitute a quorum at a meeting of stockholders. If less than said number of
the outstanding shares are represented at a meeting, a majority of the shares so
represented may adjourn the meeting from time to time without further notice. At
such adjourned meeting at which a quorum shall be present or represented, any
business may be transacted which might have been transacted at the meeting as
originally notified. The stockholders present at a duly organized meeting may
continue to transact business until adjournment, notwithstanding the withdrawal
of enough stockholders to leave less than a quorum.
8. PROXIES.
At all meetings of stockholders, a stockholder may vote by proxy executed
in writing by the stockholder or by his duly authorized attorney in fact. Such
proxy shall be filed with the secretary of the corporation before or at the time
of the meeting.
9. VOTING.
Each stockholder entitled to vote in accordance with the terms and
provisions of the certificate of incorporation and these by-laws shall be
entitled to one vote, in person or by
BY-LAWS 3
<PAGE>
proxy, for each share of stock entitled to vote held by such stockholders, Upon
the demand of any stockholder, the vote for directors and upon any question
before the meeting shall be by ballot, All elections for directors shall be
decided by plurality vote; all other questions shall be decided by majority vote
except as otherwise provided by the Certificate of Incorporation or the laws of
this State.
10. ORDER OF BUSINESS.
The order of business at all meetings of the stockholders, shall be as
follows:
1. Roll call.
2. Proof of notice of meeting or waiver of notice.
3. Reading of minutes of preceding meeting.
4. Reports of Officers.
5. Reports of Committees.
6. Election of Directors.
7. Unfinished Business.
8. New Business.
11. INFORMAL ACTION BY STOCKHOLDERS.
Unless otherwise provided by law, any action required to be taken at a
meeting of the shareholders, or any other action which may be taken at a meeting
of the shareholders, may be taken without a meeting if a consent in writing,
setting forth the action so taken, shall be signed by all of the shareholders
entitled to vote with respect to the subject matter thereof.
ARTICLE III - BOARD OF DIRECTORS
1. GENERAL POWERS.
The business and affairs of the corporation shall be managed by its board
of directors. The directors shall in all cases act as a board, and they may
adopt such rules and regulations for the conduct of their meetings and the
management of the corporation, as they may deem proper, not inconsistent with
these by-laws and the laws of this State.
BY-LAWS 4
<PAGE>
2. NUMBER TENURE AND QUALIFICATIONS.
The number of directors of the corporation shall be one to nine (1-9).
Each director shall hold office until the next annual meeting of stockholders
and until his successor shall have been elected and qualified.
3. REGULAR MEETINGS.
A regular meeting of the directors, shall be held without other notice than
this by-law immediately after, and at the same place as, the annual meeting of
stockholders. The directors may provide by resolution, the time and place for
the holding of additional regular meetings without other notice than such
resolution.
4. SPECIAL MEETINGS.
Special meetings of the directors may be called by or at the request of the
president or any two directors. The person or persons authorized to call special
meetings of the directors may fix the place for holding any special meeting of
the directors called by them.
5. NOTICE.
Notice of any special meeting shall be given at least 10 days previously
thereto by written notice delivered personally, or by telegram or mailed to each
director at his business address. If mailed, such notice shall be deemed to be
delivered when deposited in the United States mail so addressed, with postage
thereon prepaid. If notice be given by telegram, such notice shall be deemed to
be delivered when the telegram is delivered to the telegraph company. The
attendance of a director at a meeting shall constitute a waiver of notice of
such meeting, except where a director attends a meeting for the express purpose
of objecting to the transaction of any business because the meeting is not
lawfully called or convened.
6. QUORUM
At any meeting of the directors two (2) shall constitute a quorum for the
transaction of business, but if less than said number is present at a meeting, a
majority of the directors present may adjourn the meeting from time to time
without further notice.
BY-LAWS 5
<PAGE>
7. MANNER OF ACTING.
The act of the majority of the directors present at a meeting at which a
quorum is present shall be the act of the directors.
8. NEWLY CREATED DIRECTORSHIPS AND VACANCIES.
Newly created directorships resulting from an increase in the number of
directors and vacancies occurring in the board for any reason except the removal
of directors without cause may be filled by a vote of a majority of the
directors then in office, although less than a quorum exists. Vacancies
occurring by reason of the removal of directors without cause shall be filled by
vote of the stockholders. A director elected to fill a vacancy caused by
resignation, death or removal shall be elected to hold office for the unexpired
term of his predecessor.
9. REMOVAL OF DIRECTORS.
Any or all of the directors may be removed for cause by vote of the
stockholders or by action of the board. Directors may be removed without cause
only by vote of the stockholders.
10. RESIGNATION.
A director may resign at any time by giving written notice to the board,
the president or the secretary of the corporation. Unless otherwise specified in
the notice, the resignation shall take effect upon receipt thereof by the board
or such officer, and the acceptance of the resignation shall not be necessary to
make it effective.
11. COMPENSATION.
No compensation shall be paid to directors, as such, for their services,
but by resolution of the board a fixed sum and expenses for actual attendance at
each regular or special meeting of the board may be authorized. Nothing herein
contained shall be construed to preclude any director from serving the
corporation in any other capacity and receiving compensation therefor.
12. PRESUMPTION OF ASSENT.
A director of the corporation who is present at a meeting of the directors
at which action on any corporate matter is taken shall be presumed to have
assented to the action taken unless his dissent shall be entered in the minutes
of the meeting or unless he shall file his written dissent to such action with
the person acting as the secretary of the meeting before the adjournment
BY-LAWS 6
<PAGE>
thereof or shall forward such dissent by registered mail to the secretary of the
corporation immediately after the adjournment of the meeting, Such right to
dissent shall not apply to a director who voted in favor of such action.
13. EXECUTIVE AND OTHER COMMITTEES.
The board; by resolution, may designate from among its members an executive
committee and other committees, each consisting of three or more directors, Each
such committee shall serve at the pleasure of the board.
ARTICLE IV - OFFICERS
1. NUMBER.
The officers of the corporation shall be a president, a vice-president, a
secretary and a treasurer, each of whom shall be elected by the directors. Such
other officers and assistant officers as may be deemed necessary may be elected
or appointed by the directors.
2. ELECTION AND TERM OF OFFICE.
The officers of the corporation to be elected by the directors shall be
elected annually at the first meeting of the directors held after each annual
meeting of the stockholders. Each officer shall hold office until his successor
shall have been duly elected and shall have qualified or until his death or
until he shall resign or shall have been removed in the manner hereinafter
provided.
3. REMOVAL.
Any officer or agent elected or appointed by the directors may be removed
by the directors whenever in their judgment the best interests of the
corporation would be served thereby, but such removal shall be without prejudice
to the contract rights, if any, of the person so removed.
4. VACANCIES.
A vacancy in any office because of death, resignation, removal,
disqualification or otherwise, may be filled by the directors for the unexpired
portion of the term.
BY-LAWS 7
<PAGE>
5. PRESIDENT.
The president shall be the principal executive officer of the corporation
and, subject to the control of the directors, shall in general supervise and
control all of the business and affairs of the corporation. He shall, when
present, preside at all meetings of the stockholders and of the directors. He
may sign, with the secretary or any other proper officer of the corporation
thereunto authorized by the directors, certificates for shares of the
corporation, any deeds, mortgages, bonds, contracts, or other instruments which
the directors have authorized to be executed, except in cases where the signing
and execution thereof shall be expressly delegated by the directors or by these
by-laws to some other officer or agent of the corporation, or shall be required
by law to be otherwise signed or executed; and in general shall perform all
duties incident to the office of president and such other duties as may be
prescribed by the directors from time to time.
6. VICE-PRESIDENT.
In the absence of the president or in event of his death, inability or
refusal to act, the vice-president shall perform the duties of the president,
and when so acting, shall have all the powers of and be subject to all the
restrictions upon the president. The vice-president shall perform such other
duties as from time to time may be assigned to him by the President or by the
directors.
7. SECRETARY.
The secretary shall keep the minutes of the stockholders' and of the
directors, meetings in one or more books provided for that purpose, see that all
notices are duly given in accordance with the provisions of these by-laws or as
required, be custodian of the corporate records and of the seal of the
corporation and keep a register of the post office address of each stockholder
which shall be furnished to the secretary by such stockholder, have general
charge of the stock transfer books of the corporation and in general perform all
duties incident to the office of secretary and such other duties as from time to
time may be assigned to him by the president or by the directors.
8. TREASURER.
If required by the directors, the treasurer shall give a bond for the
faithful discharge of his duties in such sum and with such surety or sureties as
the directors shall determine. He shall have charge and custody of and be
responsible for all funds and securities of the corporation; receive and give
receipts for moneys due and payable to the corporation from any source
whatsoever, and deposit all such moneys in the name of the
BY-LAWS 8
<PAGE>
corporation in such banks, trust companies or other depositories as shall be
selected in accordance with these by-laws and in general perform all of the
duties incident to the office of treasurer and such other duties as from time to
time may be assigned to him by the president or by the directors.
9. SALARIES.
The salaries of the officers shall be fixed from time to time by the
directors and no officer shall be prevented from receiving such salary by reason
of the fact that he is also a director of the corporation.
ARTICLE V -- CONTRACTS, LOANS, CHECKS AND DEPOSITS
1. CONTRACTS.
The directors may authorize any officer or officers, agent or agents, to
enter into any contract or execute and deliver any instrument in the name of and
on behalf of the corporation, and such authority may be general or confined to
specific instances.
2. LOANS.
No loans shall be contracted on behalf of the corporation and no evidences
of indebtedness shall be issued in its name unless authorized by a resolution of
the directors. Such authority may be general or confined to specific instances.
3. CHECKS, DRAFTS, ETC.
All checks, drafts or other orders for the payment of money, notes or other
evidences of indebtedness issued in the name of the corporation, shall be signed
by such officer or officers, agent or agents of The corporation and in such
manner as shall from time to time be determined by resolution of the directors.
4. DEPOSITS.
All funds of the corporation not otherwise employed shall be deposited from
time to time to the credit of the corporation in such banks, trust companies or
other depositaries as the directors may select.
ARTICLE VI -- CERTIFICATES FOR SHARES AND THEIR TRANSFER
1. CERTIFICATES FOR SHARES.
Certificates representing shares of the corporation shall be in such form
as shall be determined by the directors. Such certificates shall be signed by
the president and by the secretary or by such other officers authorized by law
and by the
BY-LAWS 9
<PAGE>
directors, All certificates for shares shall be consecutively numbered or
otherwise identified. The name and address of the stockholders, The number of
shares and date of issue, shall be entered on the stock transfer books of the
corporation. All certificates surrendered to the corporation for transfer shall
be canceled and no new certificate shall be issued until the former certificate
for a like number of shares shall have been surrendered and canceled, except
that in case of a lost, destroyed or mutilated certificate a new one may be
issued therefor upon such terms and indemnity to the corporation as the
directors may prescribe.
2. TRANSFERS OF SHARES.
(a) Upon surrender to the corporation or the transfer agent of the
corporation of a certificate for shares duly endorsed or accompanied by proper
evidence of succession, assignment or authority to transfer, it shall be the
duty of the corporation to issue a new certificate to the person entitled
thereto, and cancel the old certificate; every such transfer shall be entered on
the transfer book of the corporation which shall be kept at its principal
office.
(b) The corporation shall be entitled to treat the holder of record of any
share as the holder in fact thereof, and, accordingly, shall not be bound to
recognize any equitable or other claim to or interest in such share on the part
of any other person whether or not it shall have express or other notice
thereof, except as expressly provided by the laws of this state.
BY-LAWS 10
<PAGE>
ARTICLE VII - FISCAL YEAR
The fiscal year of the corporation shall begin on the 1st day of January in
each year.
ARTICLE VIII - DIVIDENDS
The directors may from time to time declare, and the corporation may pay,
dividends on its outstanding shares in the manner and upon the terms and
conditions provided by law.
ARTICLE IX - SEAL,
The directors shall provide a corporate seal which shall be circular in
form and shall have inscribed thereon the name of the corporation, the state of
incorporation, year of incorporation and the words, "Corporate Seal".
ARTICLE X - WAIVER OF NOTICE
Unless otherwise provided by law, whenever any notice is required to be
given to any stockholder or director of the corporation under the provisions of
these by-laws or under the provisions of the articles of incorporation, a waiver
thereof in writing, signed by the person or persons entitled to such notice,
whether before or after the time stated therein, shall be deemed equivalent to
the giving of such notice.
ARTICLE XI - AMENDMENTS
These by-laws may be altered, amended or repealed and new by-laws may be
adopted by a vote of the stockholders representing a majority of all the shares
issued and outstanding, at any annual stockholders' meeting or at any special
stockholders' meeting when the proposed amendment has been set out in the notice
of such meeting.
BY-LAWS 11
<PAGE>
EXHIBIT 6.1
SHARE EXCHANGE AGREEMENT BETWEEN
JEREMY S. HALL, THE WYSE GROUP PLC
AND INTEGRITY HOLDINGS, LTD.
<PAGE>
SHARE EXCHANGE AGREEMENT
THIS SHARE EXCHANGE AGREEMENT (the "Agreement") is entered into and
effective as of July 1, 1998, by and between JEREMY S. HALL (the "SHAREHOLDER"),
THE WYSE GROUP PLC, a United Kingdom public limited company ("WGP") and
INTEGRITY HOLDINGS, LTD., a Nevada corporation ("IHL" or the "COMPANY").
1. RECITALS
This Agreement is entered into with reference to and in contemplation of
the following facts, circumstances and representations:
1. The SHAREHOLDER is the owner of 50,000 shares of the ordinary or
common stock of WGP which represent all of the issued and outstanding
shares of ordinary or common stock of WGP (the "WGP Shares").
2. IHL desires to issue a total of 183,375 shares of its common stock
(the "IHL Shares") to the SHAREHOLDER in exchange for the WGP Shares.
3. The SHAREHOLDER desires to exchange the WGP Shares for the IHL Shares
in accordance with the terms and conditions of this Agreement.
4. WGP desires that this transaction be consummated.
2. EXCHANGE AND ISSUANCE OF SHARES
2.1 EXCHANGE OF IHL SHARES: IHL shall exchange and deliver to the
SHAREHOLDER, a total of 183,375 restricted shares of IHL common stock.
2.2 EXCHANGE OF WGP SHARES: At the Closing, the SHAREHOLDER shall exchange
and deliver to IHL a total of 50,000 shares of WGP ordinary or common stock
which represents one hundred percent (100%) of the issued and outstanding shares
of WGP.
Page 1 of 11
<PAGE>
2.3 NATURE OF IHL SHARES: The SHAREHOLDER shall be issued the IHL Shares
which unless otherwise contractually restricted, shall be subject to a one (1)
year holding period before the IHL Shares are eligible for sale in the U.S.
public market. The sale of the IHL Shares will be further limited by the resale
provisions of SEC Rule 144.
2.4 RESTRICTED NATURE OF IHL SHARES: Notwithstanding the one (1) year
holding period for the IHL Shares, a SHAREHOLDER who becomes an "affiliate" or
"control person" of IHL will be subject to certain limitations with respect to
the sale of its IHL Shares. Accordingly, as a result of such a designation, the
sale of the IHL Shares will be limited by SEC Rule 144.
2.5 PRIVATE SALE ACKNOWLEDGMENT: The parties acknowledge and agree that
the exchange and issuance of the IHL Shares is being undertaken as a private
sale pursuant to Section 4 of the Securities Act of 1933, as amended and Nevada
Revised Statutes Chapter 78 and 90 and is not being transacted via a
broker-dealer and/or in the public market place.
2.6 STATUS OF PRESENT SHARE OWNERSHIP AND CONTEMPLATED SHARE ISSUANCE BY
IHL: The parties hereto acknowledge and agree that in addition to the issuance
of the 183,375 IHL Shares, that IHL contemplates the issuance of an additional
10,450,000 shares of its common stock pursuant to a SEC Regulation D, Rule 504
Offering (the "Rule 504 Shares"). Accordingly, upon the issuance of the Rule 504
Shares and upon the Closing of the share exchange contemplated by this
Agreement, that the following will be the resulting share ownership of IHL:
<TABLE>
<CAPTION>
NAME NO. SHARES % OWNERSHIP
---- ---------- -----------
<S> <C> <C>
1. WGP Shareholder 183,376 1.64%
2. Present Shareholders 594,450 5.29%
3. Rule 504
Shareholders 10,450,000 93.07%
---------- -----
TOTALS 1,227,825 100%
---------- -----
---------- -----
</TABLE>
Page 2 of 11
<PAGE>
3. REPRESENTATIONS AND WARRANTIES
OF THE COMPANY
The COMPANY represents and warrants to the SHAREHOLDER and WGP as follows:
3.1 ORGANIZATION: IHL is a corporation duly incorporated and validly
existing under the laws of the State of Nevada and is in good standing with
respect to all of its regulatory filings.
3.2 CAPITALIZATION: The authorized capital of IHL consists of 100,000,000
common shares with a par value $.001 and with the exception of the common shares
described in Paragraph 2.6, no common shares will have been validly authorized
and issued by the COMPANY prior to the Closing of the contemplated share
exchange.
3.3 FINANCIAL STATEMENTS: IHL has furnished to the SHAREHOLDER and WGP
audited financial statements for the period ending May 31, 1998. That at the
Closing the financial affairs of IHL will be materially the same as represented
in the financial statements for the period ending May 31, 1998.
3.4 BOOKS AND RECORDS: All material transactions of IHL have been promptly
and properly recorded or filed in or with its books and records and the Minute
Book of IHL contains records of all meetings and proceedings of the shareholders
and directors thereof.
3.5 LEGAL COMPLIANCE: To the best of its knowledge, IHL is not in breach
of any laws, ordinances, statutes, regulations, by-laws, orders or decrees to
which IHL is subject or which apply to it or any of its assets.
3.6 TAX RETURNS: All tax returns and reports of IHL required by law to be
filed prior to the date hereof have been filed and are substantially true,
complete and correct and all taxes and governmental charges have been paid.
3.7 ADVERSE FINANCIAL EVENTS: IHL has not experienced nor is it aware of
any occurrence or event which has had or might reasonably be expected to have a
material adverse effect on its financial condition.
3.8 DISPUTES, CLAIMS AND INVESTIGATIONS: There are no disputes, claims,
actions, suits, judgments, investigations or proceedings outstanding or pending
or to the knowledge of IHL threatened against or affecting IHL at
Page 3 of 11
<PAGE>
law or in equity or before or by any federal, state, municipal or other
governmental department, commission, board, bureau or agency.
3.9 EMPLOYEE LIABILITIES: IHL has no known liability to former
employees or any liability to any governmental authorities with respect to
current or former employees.
3.10 NO CONFLICTS OR AGREEMENT VIOLATIONS: The execution, delivery and
performance of this Agreement will not conflict with or be in violation of the
articles or by-laws of IHL or of any agreement to which IHL is a party and will
not give any person or company a right to terminate or cancel any agreement or
right enjoyed by IHL and will not result in the creation or imposition of any
lien, encumbrances or restriction of any nature whatsoever in favor of a third
party upon or against the assets of IHL.
3.11 VALIDLY ISSUED AND AUTHORIZED SHARES: That the IHL Shares will be
validly authorized and issued by the COMPANY, they will be fully paid and
non-assessable and that they will be issued in full compliance with all federal
and state securities laws.
3.12 RESTRICTIVE LEGEND: That the IHL Shares will have a restrictive
legend imposed thereon identifying them as "Restricted Shares" which are subject
to the conditions and limitations of SEC Rule 144 with respect to their sale in
the U.S. public market place.
3.13 CORPORATE AUTHORITY: The officers or representatives of the COMPANY
executing this Agreement represent that they have been authorized to execute
this Agreement pursuant to a resolution of the Board of Directors of the
COMPANY.
4. REPRESENTATIONS OF SHAREHOLDER AND WGP
The SHAREHOLDER and WGP collectively and individually hereby represent and
warrant to IHL as follows:
4.1 SHARE OWNERSHIP: That the SHAREHOLDER is the owner, beneficially
and of record, of the WGP Shares and said shares are free and clear of all
liens, encumbrances, claims, charges and restrictions.
Page 4 of 11
<PAGE>
4.2 TRANSFERABILITY OF WGP SHARES: That the SHAREHOLDER has full power to
transfer the WGP Shares to IHL without obtaining the consent or approval of any
other person or governmental authority.
4.3 VALIDLY ISSUED AND AUTHORIZED SHARES: That the WGP Shares are validly
authorized and issued, fully paid, and nonassessable, and the WGP Shares have
been so issued in full compliance with all securities laws of the United
Kingdom.
4.4 ORGANIZATION: WGP is a public limited company duly incorporated and
validly existing under the laws of the United Kingdom and is in good standing
with respect to all of its regulatory filings.
4.5 CAPITALIZATION: The authorized capital of WGP consists of 50,000 or
ordinary common shares with a par value or equivalent of L 1.00 and of which
50,000 ordinary or common shares are issued and outstanding as fully paid and
non-assessable shares.
4.6 FINANCIAL STATEMENTS: WGP has furnished to IHL audited financial
statements for the period ending June 30, 1998. That at the Closing the
financial affairs of WGP will be materially the same as represented in these
same financial statements.
4.7 BOOKS AND RECORDS: All material transactions of WGP have been promptly
and properly recorded or filed in or with its books and records and the Minute
Book of WGP contains records of all meetings and proceeds of the shareholders
and directors thereof.
4.8 LEGAL COMPLIANCE: WGP is not in breach of any laws, ordinances,
statutes, regulations, by-laws, orders or decrees to which WGP is subject or
which apply to it or any of its assets.
4.9 TAX RETURNS: All tax returns and reports of WGP required by law to be
filed prior to the date hereof have been filed and are subsequently true,
complete and correct and all taxes and governmental charges have been paid.
4.10 ADVERSE FINANCIAL EVENTS: WGP has not experienced nor is it aware of
any occurrence or event which has had or might reasonably be expected to have a
material adverse effect on its financial condition.
Page 5 of 11
<PAGE>
4.11 DISPUTES, CLAIMS AND INVESTIGATIONS: There are no disputes, claims,
actions, suits, judgments, investigations or proceedings outstanding or pending
or to the knowledge of WGP threatened against or affecting WGP at law or in
equity or before or by any federal, provincial, municipal or other governmental
department, commission, board, bureau or agency.
4.12 EMPLOYEE LIABILITIES: WGP has no liability to former employees or any
liability to any government authorities with respect to current or former
employees.
4.13 NO CONFLICTS OR AGREEMENT VIOLATIONS: The execution, delivery and
performance of this Agreement will not conflict with or be in violation of the
Memorandum or Articles of Association of WGP or of any agreement to which WGP is
a party and will not give any person or company a right to terminate or cancel
any agreement or right enjoyed by WGP and will not result in the creation or
imposition of any lien, encumbrances or restriction of any nature whatsoever in
favor of a third party upon or against the assets of WGP.
4.14 NO LIENS: That WGP has not received a notice of any assignment, lien,
encumbrance, claim or charge against the WGP Shares.
4.15 CORPORATE AUTHORITY: The officers or representatives of WGP executing
this Agreement represent that they have been authorized to execute this
Agreement pursuant to a resolution of the Boards of Directors of WGP.
5. REPRESENTATIONS AND WARRANTIES
OF SHAREHOLDER ALONE
The SHAREHOLDER alone further represents and warrants to IHL as follows
with respect to the WGP Shares:
5.1 FINANCIALLY RESPONSIBLE: That he is financially responsible, able to
meet his obligations and acknowledges that this investment will be speculative.
5.2 INVESTMENT EXPERIENCE: That he has had experience in the business of
investments in one or more of the following: (i) investment experience with
securities such as stock and bonds; (ii) ownership of interests in partnerships,
new ventures and start-up companies; (iii)
Page 6 of 11
<PAGE>
experience in business and financial dealings; and that he can protect his own
interests in an investment of this nature and they do not have an "Investor
Representative", as that term is defined in Regulation D of the Securities Act
of 1933 and do not need such an Investor Representative.
5.3 INVESTMENT RISK: That he is capable of bearing the high degree of
economic risks and burdens of this investment, including but not limited to the
possibility of complete loss of all its investment capital and the lack of a
liquid market, such that he may not be able to liquidate readily the investment
whenever desired or at the then current asking price.
5.4 ACCESS TO INFORMATION: That he has had access to the information
regarding the financial condition of the COMPANY and he was able to request
copies of such information, ask questions of and receive answers from the
COMPANY regarding such information and any other information he desires
concerning the IHL Shares, and all such questions have been answered to his full
satisfaction.
5.5 PRIVATE TRANSACTION: That at no time was he presented with or
solicited by any leaflet, public promotional meeting, circular, newspaper or
magazine article, radio or television advertisement or any other form of general
advertising.
5.6 INVESTMENT INTENT: The IHL Shares are not being purchased with a view
to or for the resale or distribution thereof and he has no present plans to
enter into any contract, undertaking, agreement or arrangement for such resale
or distribution.
5.7 DUE DILIGENCE: That the SHAREHOLDER shall have completed a due
diligence review of the affairs of IHL and is satisfied with the results of that
review.
6. CLOSING, ESCROW HOLDER AND
CONDITIONS TO CLOSING
6.1 EXCHANGE CLOSING: The closing of the share exchange as contemplated by
this Agreement (the "Closing") shall take place in San Diego, California, at
such time and place as may be agreed among by the parties, but in no event later
than August 14, 1998, unless otherwise extended in writing by the parties.
Page 7 of 11
<PAGE>
6.2 APPOINTMENT OF ESCROW HOLDER: The parties hereby appoint CARMINE J.
BUA, III, ESQ, of San Diego, California as the Escrow Holder pursuant to this
Agreement.
6.3 OPINION OF COUNSEL FOR IHL: The SHAREHOLDER and WGP shall have
received an opinion from the legal counsel for IHL, in form and substance
reasonably satisfactory to the SHAREHOLDER and WGP, to the effect that:
1. IHL is a corporation duly organized and legally existing under
the laws of the State of Nevada and is in good standing with
respect to all of its regulatory filings, and
2. This Agreement when duly executed and delivered by IHL,
constitutes a legal, valid and binding obligation of IHL
enforceable against it in accordance with its terms, and
3. The IHL Shares delivered pursuant to the Agreement have been
validly issued are fully paid and non-assessable, and
4. The IHL Shares have been legally and validly issued and are in
compliance with all federal and state securities laws including
but not limited to Section 4 of the Securities Act of 1933, as
amended, and Nevada Revised Statutes Chapters 78 and 90.
6.4 OPINION OF COUNSEL FOR SHAREHOLDER AND WGP: IHL shall have received
an opinion from the legal counsel for the SHAREHOLDER and WGP, in form and
substance reasonably satisfactory to IHL, to the effect that:
1. WGP is a public limited company duly organized and legally
existing under the laws of the United Kingdom and is in good
standing with respect to all of its regulatory filings, and
Page 8 of 11
<PAGE>
2. The WGP Shares delivered pursuant to this Agreement have been
validly issued, fully paid, non-assessable, and have been
originally issued in full compliance with all federal and state
securities laws.
3. The SHAREHOLDER has the full power to transfer the WGP Shares to
IHL without obtaining the consent or approval of any other person
or governmental agency.
4. That IHL is legally capable of owning and is permitted to own a
controlling interest in WGP under the applicable laws of the
United Kingdom.
6.5 ESCROW CONDITIONS AND CLOSING: Prior to the Closing the following will
be required:
1. DELIVERY OF WGP SHARES: The SHAREHOLDER shall deliver to the
Escrow Holder the certificate or certificates representing the
50,000 WGP Shares registered in the name of IHL, duly endorsed
for transfer accompanied by a duly executed assignment of the WGP
Shares to IHL.
2. DELIVERY OF IHL SHARES: IHL shall deliver to the Escrow Holder a
total of 183,375 of the Shares registered in the names of the
SHAREHOLDER.
3. LEGAL OPINION AND DOCUMENTS: Both parties shall deliver to the
Escrow Holder such legal opinions and other documents as are
required by the terms and conditions of the Agreement.
4. REQUISITE CORPORATE RESOLUTIONS: Each party shall deliver to the
Escrow Holder certified copies of resolutions from their
Page 9 of 11
<PAGE>
respective Boards of Directors authorizing the subject
transaction.
6.6 CLOSE OF TRANSACTION: The subject transaction shall "close" upon the
satisfaction of the above conditions.
7. COOPERATION, ARBITRATION, INTERPRETATION,
MODIFICATION AND ATTORNEY FEES
7.1 COOPERATION OF PARTIES: The parties further agree that they will do
all things necessary to accomplish and facilitate the purpose of this Agreement
and that they will sign and execute any and all documents necessary to bring
about and perfect the purposes of this Agreement.
7.2 ARBITRATION: The parties hereby submit all controversies, claims and
matters of difference arising out of this Agreement to arbitration in New York,
New York according to the rules and practices of the American Arbitration
Association from time to time in force. This submission and agreement to
arbitrate shall be specifically enforceable. The Agreement shall further be
governed by the laws of the State of Nevada.
7.3 INTERPRETATION OF AGREEMENT: The parties agree that should any
provision of this Agreement be found to be ambiguous in any way, such ambiguity
shall not be resolved by construing such provisions or any part of or the entire
Agreement in favor of or against any party herein, but rather by construing the
terms of this Agreement fairly and reasonably in accordance with their generally
accepted meaning.
7.4 MODIFICATION OF AGREEMENT: This Agreement may be amended or modified
in any way at any time by an instrument in writing stating the manner in which
it is amended or modified and signed by each of the parties hereto. Any such
writing amending or modifying this Agreement shall be attached to and kept with
this Agreement.
7.5 ATTORNEY FEES: If any legal action or any arbitration or other
proceeding is brought for the enforcement of this Agreement, or because of an
alleged dispute, breach, default or misrepresentation in connection with any of
the provisions of the Agreement, the successful or prevailing party shall be
entitled to recover reasonable attorneys' fees and other costs incurred in that
action or proceeding, in addition to any other relief to which it may be
entitled.
Page 10 of 11
<PAGE>
7.6 ENTIRE AGREEMENT: This Agreement constitutes the entire Agreement and
understanding of the parties hereto with respect to the matters herein set
forth, and all prior negotiations, writings and understandings relating to the
subject matter of this Agreement are merged herein and are superseded and
canceled by this Agreement.
7.7 COUNTERPARTS: This Agreement may be signed in one or more
counterparts.
7.8 FACSIMILE TRANSMISSION SIGNATURES: A signature received pursuant to
a facsimile transmission shall be sufficient to bind a party to this
Agreement.
SHAREHOLDER
DATED: August 4, 1998 /s/ Jeremy S. Hall
--------------------------
JEREMY S. HALL
THE WYSE GROUP PLC
DATED: August 4, 1998 BY: /s/ Jeremy S. Hall
--------------------------
JEREMY S. HALL
Managing Director
INTEGRITY HOLDINGS, LTD.
DATED: August , 1998 BY:
--------------------------
MICHAEL FOLEY
President
Page 11 of 11
<PAGE>
EXHIBIT 6.2
DAVID MEYRICK BILLINGE, DEIRDRE JENNIFER
SWINGLER, JOHN DAVID SWINGLER AND INTEGRITY
HOLDINGS LIMITED SHARE SALE AGREEMENT
DATED OCTOBER 1, 1998
<PAGE>
DATED 1st October 1998
- -----------------------------------------------------------------------------
DAVID MEYRICK BILLINGE
DEIRDRE JENNIFER SWINGLER
JOHN DAVID SWINGLER
- AND -
INTEGRITY HOLDINGS LIMITED
----------------------------------------------------------
SHARE SALE AGREEMENT
----------------------------------------------------------
BEALE AND COMPANY
GARRICK HOUSE
27-32 KING STREET
COVENT GARDEN
LONDON
WC2E 8JD
Tel: 0171 240 3474
Fax: 0171 240 9111
DX: 51632 COVENT GARDEN
e-mail [email protected]
REF: MJA/VHT/152.2
SEPTEMBER 1998
<PAGE>
SHARE SALE AGREEMENT
DATE: 1st October 1998
PARTIES:
1. "The Vendors" Those persons whose names and addresses are set
out in column 1 of Schedule 1
2. "The Purchaser" Integrity Holdings Limited a company registered in
Nevada, USA whose registered office as at Suite
333, 3838 Camino Del Rio North, San Diego,
California 92108-1789.
OPERATIVE PROVISIONS:
1. INTERPRETATION
1.1. In this agreement, including the Schedules, other than Schedule 4:
1.1.1 the following words and expressions have the following meanings, unless
they are inconsistent with the context:
"Agreed Form" means the form agreed between the parties on or
prior to the date of this agreement and initialled
for the purpose of identification by their
respective solicitors
"CA" means Companies Act 1985
"CAA" means Capital Allowances Act 1990
"Companies Acts" means CA and the former Companies Acts (within the
meaning of CA s 735(1)) and the Companies Act 1989
"Company" means Saracen Computer Systems Limited
"Company's
Auditors" means Moore Stephens, Birmingham
"Completion" means completion of the purchase of the Shares in
accordance with clause 4
"Completion
Account" means the audited consolidated balance sheet of the
Group Companies at the date of Completion and their
audited consolidated profit and loss account for the
period from the Last Accounts Date to the Effective
Time
<PAGE>
"Computer
Software" means that computer software written by the Company as
listed in Schedule [7E] together with the following
relating to such software (a) all copies of the source
code (b) the programmer's notes as to the design of the
code and the steps taken to supplement functions of the
programs (c) logic manuals and flow charts and user
manuals and (d) original specification and design
objectives
"Customer List" means the record of names and contact details of all
current customers of the Business as the same is set out
in Schedule [9] all prior customers of the Business or
any part thereof of which the Company has records and
whether stored electronically or in documentary or other
form and including such software access or pass codes as
are required to enable such information to be read and
utilised
"Deed of
Indemnity for
Taxation" means a deed in the form set out in Schedule 4
"Disclosure
Letter" means the disclosure letter of the same date as this
agreement from the Vendors to the Purchaser
"Effective Time" means the close of business on 31st July 1998
"Employees" means the persons who at the Effective Time are employed by
the Company as the same are set out in Schedule 7.
"FA" means Finance Act
"FRS" means a financial reporting standard issued by The
Accounting Standards Board Limited or an SSAP
"Group
Companies" means the Company and its subsidiaries for the time being
"ICTA" means Income and Corporation Taxes Act 1988
"Information" means all information owned by the Vendors and the
Company or in the Vendors or the Company's possession
and reasonably required for the operation of the
Business including information relating to the supply of
work and materials to the Company, to the marketing of
any products or services supplied by the Company
including (to the extent they exist) the Customer List,
sales targets, sales statistics, marketing surveys and
reports, marketing research, all training manuals and
other materials relating to training of Customers or
Employees on computer software products,
<PAGE>
any advertising or other promotional materials and all
records and the database relating to modifications to
software carried out for customers of the Company
"Intellectual
Property Rights" means all intellectual property rights of the Company
including the service marks, trade marks, registered
designs and copyrights in any part of the world whether
registered or unregistered and including all applications
and rights to register the same and the copyright in all
drawings, plans, specifications, designs and computer
software owned by the Company and used in or for the
purpose of the Company's business and all know-how and
confidential information so owned and used
"ITA" means Inheritance Tax Act 1984
"Last Accounts
Date" means 31st October 1997 (being the date to which the
Principal Accounts have been prepared)
"Planning Acts" means as defined in the Town and Country Planning Act
1990 s336
"Prepayments" means the sums paid by customers against invoices issued
prior to the 1st September 1998 by the Company for
maintenance, training or software support services for any
period or periods extending or commencing after the 1st
September 1998 as the same are set out in Schedule [8] the
total received and the apportioned value of the Prepayment
relating to each contract
"Principal
Accounts" means the audited balance sheet as at the Last Accounts
Date and audited profit and loss account for the year ended
on the Last Accounts Date of the Company
"Purchaser's
Solicitors" means Beale and Company of Garrick House, 27-32 King
Street, Covent Garden, London WC2E 8JD (telephone number
0171 240 3474 ref: MJA)
"Shares" means the shares set out in Schedule I comprising the whole
of the issued and allotted share capital of the Company
"Subsidiary" means a subsidiary as defined in the Companies Act 1985
s736 of the Company
"Taxation" means all forms of taxation duties imports and levies
whatsoever and whenever imposed and whether of the United
Kingdom or elsewhere and without prejudice to the
<PAGE>
generality of that expression includes corporation tax and
such other taxes as appear under the definition of
"Taxation" in the Deed of Indemnity for Taxation in
Schedule 4
"TCGA" means Taxation of Chargeable Gains Act 1992
"TMA" means Taxes Management Act 1970
"VATA" means Value Added Tax Act 1994
"Vendor" means the person whose names and address is set out in
column 1 of Schedule 1
"Vendors'
Solicitors" means Messrs Daniels of County Chambers, 6 Chestergate,
Macclesfield, Cheshire SK1 18B (ref: TRL)
"Warranties" means the warranties and undertakings of the Vendor
contained in clause 5 and Schedule 3
"Warranty Claim" means any claim made by the Purchaser for breach of any of
the Warranties or any claim made by the Company under the
Deed of Indemnity for Taxation or the Deed of Indemnity for
Liabilities
1.1.2 all references to statutory provisions shall be construed as including
references to:
(a) any statutory modification, consolidation or re-enanctment;
(b) all statutory instruments or orders made pursuant to it;
(c) any statutory provisions of which it is a modification, consolidation or
re-enactment;
1.1.3 any reference to the Vendors includes, where appropriate, their
respective personal representatives;
1.1.4 a reference to an SSAP is a reference to a Statement of Standard
Accounting Practice adopted by the Accounting Standards Board Limited;
1.1.5 except where the context otherwise requires, words denoting the singular
include the plural and vice versa; words denoting any gender include all
genders; words denoting persons include firms and corporations and vice
versa;
1.1.6 unless otherwise stated, a reference to a clause, sub-clause or Schedule
is a reference to a clause or a sub-clause of, or a Schedule to, this
agreement;
1.2 Clause headings are for ease of reference only and do not affect the
construction of this agreement.
<PAGE>
2. AGREEMENT FOR SALE
2.1 Subject to the terms and conditions of this agreement, the Vendors shall
sell with full guarantee and the Purchaser shall purchase the Shares
free from all liens, charges and encumbrances and with all rights
attaching to them, with effect from the Effective Time.
2.2 The Vendors hereby waive any pre-emption rights they may have in
relation to any of the Shares under the articles of association of the
Company or otherwise.
3. PURCHASE CONSIDERATION
3.1 The purchase consideration for the Shares shall be L950,000 (nine
hundred and fifty thousand pounds sterling.
The consideration shall be apportioned between the Vendors pro rata to
their respective shareholdings as set out in Schedule I.
3.2 The consideration shall be satisfied on completion as follows:-
3.2.1 L353,000 in cash;
3.2.2 the grant of an option to each of the Vendors to purchase shares
in the Purchaser in the form of the Share Option Agreements
annexed hereto;
3.2.3 the issue on completion of restricted shares in the Purchaser to
a value of L50,000 sterling as at the date of completion
4. COMPLETION
4.1 This agreement is conditional upon:
1. Approval by the Vendors of the Share Options referred to in
clause 3.2.2.
2. Approval by the Purchaser of the Disclosure Letter.
3. Agreement between the Purchaser and David Meyrick Billinge of
the restraints to be placed on him following the termination
of his employment with the Company (howsoever determined) such
restraints to be in any event for a period no longer than one
year from the date of termination.
Completion shall take place on 25th September 1998 or within 24 hours of
the last of the conditions being met whichever shall be the earlier.
Time shall be of the essence in this regard.
4.2 On Completion the Vendors shall deliver to the Purchaser:
<PAGE>
4.2.1 duly completed and signed transfers in favour of the Purchaser or
as it may direct in respect of the Shares together with the
relevant share certificates;
4.2.2 the Deed of Indemnity for Taxation duly executed by the Vendors
and the Company;
4.2.3 The Vendor's executed Deed of Covenant in the form of attached
Schedule 8;
4.2.4 the resignations of the directors other than David Meyrick
Billinge, Alan Peter Stephens and the secretary from their
respective offices in the Company, with a written
acknowledgement under seal from each of them in such form as the
Purchaser requires that he has no claim against the Company in
respect of breach of contract, compensation for loss of office,
redundancy or unfair dismissal or on any other grounds
whatsoever;
4.2.5 the statutory books of the Company complete and up-to-date and
common seals;
4.2.6 written confirmation from the Vendors that there are no
subsisting guarantees indemnities or other obligations given by
the Company in their favour and they will not be indebted to the
Company; or vice versa.
4.3 The Vendors shall repay all monies then owing by them to the Company
whether due for payment or not.
4.4 A board meeting of the Company shall be held at which:
4.4.1 such persons as the Purchaser may nominate shall be appointed
additional directors:
4.4.2 the transfers referred to in clauses 4.2.1 (as the case may be)
shall be approved (subject to stamping); and
4.4.3 the resignations referred to in clauses 4.2.4 shall be submitted
and accepted.
4.5 Upon completion of the matters referred to in clauses 4.2 to 4.5 the
Purchaser shall deliver to the Vendors' Solicitors a banker's draft for
the sum of L353,000 in respect of the purchase consideration referred to
in clause 3.2.1 duly executed Share Option Agreements, and undertaking
by Purchaser to issue share certificates in respect of L50,000
restricted shares in the Purchaser.
4.6 The Purchaser may in its absolute discretion waive any requirement
contained in clauses 4.2 to 4.6, and shall not be obliged to complete
the purchase of any of the Shares unless the purchase of all the Shares
is completed in accordance with this agreement, but may instead rescind
this agreement without prejudice to any other remedy it may have.
<PAGE>
5. WARRANTIES AND UNDERTAKINGS BY THE VENDORS
5.1 In consideration for the obligations undertaken under this agreement the
Vendors (save and except for Susan Irene Billinge one of the Vendors)
warrant to the Purchaser that:
5.1.1 they have and will have full power and authority to enter into
and perform this agreement and the Deed of Indemnity for
Taxation which constitute or when executed will constitute
binding obligations in accordance with their respective terms;
5.1.2 the Shares will at Completion constitute the whole of the issued
and allotted share capital of the Company;
5.1.3 there is and at Completion will be no pledge, lien or other
encumbrance on, over or affecting the shares and there is and at
Completion will be no agreement or arrangement to give or create
any such encumbrance and no claim has been or will be made by
any person to be entitled to any of the foregoing;
5.1.4 the Vendors own absolutely and will be entitled to transfer or
procure the transfer of the full legal and beneficial ownership
of the Shares to the Purchaser on the terms of this agreement
without the consent of any third party;
5.1.5 the information in Schedule 2 relating to the Company is true
and accurate in all respects;
5.1.6 save as fully and fairly disclosed in the Disclosure Letter,
the Warranties in Schedule 3 are true and accurate in all
respects at the dates of this agreement and will continue to be
so up to and including the day of Completion;
5.1.7 the contents of the Disclosure Letter and of all accompanying
documents are true and accurate in all material respects and
fairly disclose every matter to which they relate;
5.1.8 in the period from the Effective Time to Completion the Company
has been run in a proper manner in good faith by the Vendors
taking into account the Purchaser's interest directions and
instructions and during such period nothing has occurred or been
done by the Vendors, or to the Vendors' knowledge, which if not
disclosed might reasonably have been expected to affect the
Purchaser's decision to enter into this Agreement.
5.2 The Vendors undertake in relation to any Warranty which refers to the
knowledge, information or belief of the Vendors, that they have made
full enquiry into the subject matter of that Warranty.
<PAGE>
5.3 Each of the Warranties is without prejudice to any other Warranty
and, except where expressly stated otherwise, no clause contained in
this agreement shall govern or limit the extent or application of any
other clause.
5.4 The Vendors undertake with the Purchaser that they will promptly
disclose in writing to the Purchaser any event or circumstance, which
arises or becomes known to it after the date of this agreement and
prior to Completion, which is inconsistent with any of the Warranties
or the contents of the Disclosure Letter or which might be material
to be known by a purchaser for value of the Shares.
5.5 The rights and remedies of the Purchaser in respect of any breach of
the Warranties shall not be affected by Completion, by any
investigation made by it or on its behalf into the affairs of the
Company, by its rescinding, or failing to rescind this agreement, or
failing to exercise or delaying the exercise of any right or remedy
or by any other event or matter whatsoever, except a specific and
duly authorised written waiver or release, and no single or partial
exercise of any right or remedy shall preclude any further or other
exercise.
5.6 None of the information supplied by the Company or its professional
advisers prior to the date of this agreement to the Vendors or their
agents, representatives or advisers in connection with the Warranties
and the contents of the Disclosure Letter, or otherwise in relation
to the business or affairs of the Company, shall be deemed a
representation, warranty or guarantee of its accuracy by the Company
to the Vendors, and the Vendors waives any claims against the
Company which they might otherwise have in respect of it.
5.7 The Vendors shall procure that, except so far as may be necessary to
give effect to this agreement, the Company shall not at any time
prior to Completion without the prior written consent of the
Purchaser:
5.7.1 do, procure or allow anything which may cause, constitute
or result in a breach of the Warranties; or
5.7.2 in any way depart from the usual course of business of the
Company as regards its nature, scope or manner.
5.8 The Vendors shall procure that prior to Completion the Purchaser, its
agents, representatives, accountants and solicitors are given
promptly on request all such facilities and information regarding the
business, assets, liabilities, contracts and affairs of the Company,
and of the documents of title and other evidence of ownership of its
assets, as the Purchaser may require.
5.9 The Purchaser shall be entitled to set off against any amount of
consideration that remains to be paid under this agreement to the
Vendors the amount of the liability of the Vendors in respect of a
breach of the warranties or a breach of any other provisions of this
agreement.
5.10 If there is a breach of any of the Warranties and;
<PAGE>
5.10.1 the value of the Company or any of its assets is less than
it would have been at the Effective Time in the absence of
the breach; or
5.10.2 the Purchaser incurs a liability which it would not have
incurred or which exceeds the liability it would have
incurred had matters been as warranted; or
5.10.3 as a result of the breach or of matters not being as
warranted the Purchaser suffers loss, costs or expenses or
does not receive any benefit, gain or profit which
otherwise could reasonably have been expected to accrue;
then without affecting the Purchaser's other rights the Vendors shall
pay to the Purchaser in cash by way of damages an amount equal to the
resulting diminution of value or the liability or excess liability
and the loss, costs and expenses so as to put the Purchaser into the
position which it would have been in if the Warranties had been true
and accurate and had not been breached.
5.11 The Vendors undertake to indemnify the Purchaser against any costs
including costs on an indemnity basis, expenses and other liabilities
(together with any VAT thereon which is not recoverable by the
Purchaser) which the Purchaser may incur either before or after the
commencement of any action, in connection with:
5.11.1 the settlement of any claim by the Purchaser that there
has been a breach of the Warranties;
5.11.2 any legal proceedings in which the Purchaser claims that
there has been a breach of the Warranties and in which
judgment is given in favour of the Purchaser; or
5.11.3 the enforcement of any such settlement, compromise or
judgment.
5.12 Notwithstanding any other provisions of this Agreement the liability
of the Vendors hereunder shall be limited in accordance with the
provisions of Schedule 5 and the provisions of such Schedule shall
have effect.
6. PENSIONS
6.1 In the event that any surplus monies arise to the Company from the
following schemes namely:--
Saracen Computer Systems Pension SSAS or
Saracen Computer Systems Executive Pension Schemes
Policy Numbers H338130/1 and/2
then the Purchaser shall procure that such monies shall forthwith be
paid by the Company to JD & DJ Swingler or their respective estates as
the case may be.
<PAGE>
7. RESTRICTIVE AGREEMENT
7.1 For the purpose of assuring to the Purchaser the full benefit of the
businesses and goodwill of the Company, J.D. Swingler and D.J. Swingler
have agreed to execute covenants in the form of Schedule 6.
8. TAX MATTERS
8.1 The Vendors agree to approve and to file the statutory accounts for
the period ending 31/10/1997 and to submit the Tax Return and tax
computations and make any tax payment due to the Inland Revenue for
the financial period ending 31/10/1997 before Completion and shall
disclose copies thereof and all correspondence with Inland Revenue in
respect thereto.
9. GENERAL
9.1 Any written announcement will, if the Vendors so require, be sent to
customers of the Company shortly after Completion. Other and
subsequent announcements may be made by the Company or the Purchaser
provided these follow the principles of and do not contradict the
agreed announcement.
9.2 If this agreement ceases to have effect the Purchaser will release
and return to the Company all documents concerning it provided to the
Purchaser or its advisers in connection with this agreement and will
not use or make available to any other person any information which
it or its advisers have been given in respect of the Company and
which is not in the public domain.
9.3 All expenses incurred by or on behalf of the parties, including all
fees of agents, representatives, solicitors, accountants and actuaries
employed by any of them in connection with the negotiation,
preparation or execution of this agreement shall be borne solely by
the party who incurred the liability and the Company shall have no
liability in respect of them.
10. COMMUNICATIONS
10.1 All communications between the parties with respect to this agreement
shall be delivered by hand or sent by first-class post to the address
of the addressee as set out in this agreement, or to such other
address (being in Great Britain) as the addressee may from time to
time have notified for the purpose of this clause, or sent by
facsimile transmission (with confirmation by letter posted
first-class within 24 hours).
10.2 Communications shall be deemed to have been received:
10.2.1 if sent by first-class post: 3 business days after posting
exclusive of the day of posting;
10.2.2 if delivered by hand: on the day of delivery;
10.2.3 if sent by facsimile transmission: at the time of
transmission.
<PAGE>
10.3 Communications addressed to the Purchaser shall be marked for the
attention of Mr. Paul Carroll with copies to the Purchaser's Solicitors.
10.4 In proving service:
10.4.1 by delivery by hand: it shall be necessary only to produce a
receipt for the communication signed by or on behalf of the
addressee;
10.4.2 by post: it shall be necessary only to prove that the
communication, or letter of confirmation, was contained in an
envelope which was duly addressed posted in accordance with this
clause:
10.4.3 by facsimile transmission: it shall be necessary only to prove
that the facsimile message was properly addressed transmitted and
confirmation received from the recipient's fax machine or operator
as the case may be.
11. ENTIRE AGREEMENT AND SCHEDULES
11.1 This agreement and the Schedules constitute the entire agreement and
understanding between the parties with respect to all matters which are
referred to.
11.2 The Schedules form part of this agreement.
11.3 This agreement binds each party's successors and assigns.
11.4 None of the rights or obligations under this agreement may be assigned or
transferred without the prior written consent of all the parties.
12. INVALIDITY
12.1 If any term or provision in this agreement shall in whole or in part be
held to any extent to be illegal or unenforceable under any enactment or
rule of law, that term or provision or part shall to that extent be
deemed not to form part of this agreement and the remainder of the
agreement shall not be affected.
13. FURTHER ASSURANCE
13.1 The Vendors shall as its own cost (other than disbursements which shall
be at the Purchaser's costs) execute all such documents or do or procure
the doing of such acts and things after Completion as the Purchaser shall
reasonably require in order to give effect to this agreement and give to
the Purchaser the full benefit thereof.
IN WITNESS whereof the parties have by their authorised representatives duly
signed this agreement the day and year first before written
[PAGE 12]
<PAGE>
SCHEDULE 1
VENDOR'S HOLDINGS
VENDORS' NAME AND ADDRESS
<TABLE>
<CAPTION>
NUMBER AND CASH OPTIONS VALUE
DENOMINATION CONSIDERATION SHARES OF
SHARES
<S> <C> <C> <C> <C>
1. David Meyrick 250 at L1 17,650 7,612 2500
Billinge
21 Moisty Lane
Marchington
Uttoxeter
Staffordshire
ST 14 8JY
2. Susan Irene Billinge 250 at L1 17,650 7,612 2500
21 Moisty Lane
as aforesaid
3. Deirdre Jennifer Swingler 2250 at L1 158,850 68,512 22500
Woodroffe Cliff Cottage
Marchington Woodlands
Uttoxeter
Staffordshire
ST14 8PS
4. John David Swingler 2250 at L1 158,850 68,512 22500
(as above)
----
5000
</TABLE>
[PAGE 13]
<PAGE>
SCHEDULE 2
THE COMPANY
Company Name: Saracen Computer Systems Limited
Company Number: 1930247
Date of Incorporation: 12/7/1985
Share Capital:
authorised: L100,000
issued: L5000
Registered Office: St. Mary's House, Church Street, Uttoxeter,
Staffordshire ST14 8AG
Directors: David M Billinge
Deirdre J Swingler
John D Swingler
Alan P Stephens
Secretary: Deirdre J Swingler
[PAGE 14]
<PAGE>
SCHEDULE 3
WARRANTIES
1. Accounts
1.1 The Principal Accounts
1.1 The Principal Accounts were prepared in accordance with the
historical cost convention; and the bases and policies of
accounting adopted for the purpose of preparing the Principal
Accounts are the same as those adopted in preparing the audited
accounts of the Company in respect of the two last preceding
accounting periods;
1.1.2 The Principal Accounts:
(a) give a true and fair view of the assets and liabilities of
the Company at the Last Accounts Date and its profits for
the financial period ended on that date;
(b) properly reflect the financial position of the Company as
at their date; and
(c) fully disclose all the assets and liabilities of the
Company as at their date.
1.2 VALUATION OF STOCK-IN-TRADE AND WORK IN PROGRESS
1.2.1 In the Principal Accounts work in progress of the Company has been
treated in accordance with SSAP9.
1.3 DEPRECIATION OF FIXED ASSETS
1.3.1 In the Principal Accounts the fixed assets of the Company have
been depreciated in accordance with SSAP 12.
1.4 DEFERRED TAXATION
1.4.1 Where provision for deferred taxation is not made in the Principal
Accounts, full details of the amounts of such deferred taxation
have been disclosed in the Disclosure Letter.
1.5 ACCOUNTING REFERENCE DATE
1.5.1 The accounting reference date of the Company for the purposes of
CA s 224 is [ILLEGIBLE] and there has not at any time been any
other such date.
[PAGE 17]
<PAGE>
1.6 BOOK DEBTS
1.6.1 The vendors are not aware that any of the amounts due from debtors
as at Completion (less the amount of any relevant provision or
reserve, determined on the same basis as that applied in the
Principal Accounts and disclosed in the Disclosure Letter) will be
recoverable in full in the ordinary course of business and none of
those debts is subject to any counter-claim or set off, except to
the extent of any such provision or reserve.
1.7 BOOKS AND RECORDS
1.7.1 All the accounts, books, ledgers, financial and other records, of
whatsoever kind, of the Company:
(a) are in its possession;
(b) have been fully properly and accurately kept and completed;
(c) do not contain any material inaccuracies or discrepencies
of any kind;
(d) show a true and fair view of it trading transactions and
its financial, contractual and trading position.
2. CORPORATE MATTERS
2.1 DIRECTORS AND SHADOW DIRECTORS
2.1.1 The only directors of the Company are the persons whose names are
listed in relation to the Company in Schedule 2.
2.1.2 No person is a shadow director (within the meaning of CA s 741) of
the Company but is not treated as one of its directors for all the
purposes of that Act.
2.2 SUBSIDIARIES, ASSOCIATIONS AND BRANCHES
2.2.1 The Company:
(a) is not the holder or beneficial owner of nor has it agreed
to acquire any share or loan capital of any company
(whether incorporated in the United Kingdom or elsewhere);
(b) does not have outside the United Kingdom any branch, agency
or place of business, or any permanent establishment (as
that expression is defined in the relevant double taxation
relief order current at the date of this agreement).
<PAGE>
2.3 OPTIONS OVER THE COMPANY'S CAPITAL
2.3.1 Except as required by this agreement, there are no agreements or
arrangements in force which provide for the present or future
issue, allotment or transfer of or grant to any person the right
(whether conditional or otherwise) to call for the issue,
allotment or transfer of any share or loan capital of the Company
(including any option or right of pre-emption or conversion).
2.4 NEW ISSUES OF CAPITAL
2.4.1 No share or loan capital has been issued or allotted, or agreed to
be issued or allotted, by the Company since the Last Accounts
Date.
2.5 COMMISSIONS
2.5.1 No one is entitled to receive from the Company any finder's fees,
brokerage or other commission in connection with the sale and
purchase of the Shares under this agreement.
2.6 MEMORANDA AND ARTICLES OF ASSOCIATION, STATUTORY BOOKS AND RESOLUTIONS
2.6.1 The copy of the memorandum and articles of association for the
Company attached to the Disclosure Letter is accurate and
complete in all respects and has embodied in it or annexed to it a
copy of every such resolution as is referred to in CA s 380.
2.6.2 The register of members and other statutory books of the Company
have been properly kept and contain an accurate and complete
record of the matters with which they should deal.
2.6.3 No notice or allegation that any of the foregoing is incorrect or
should be rectified has been received.
2.6.4 Since the Last Accounts Date no alteration has been made to the
memorandum or articles of association of the Company and no
resolution of any kind of the shareholders of the Company has been
passed (other than resolutions relating to business at annual
general meetings which was not special business) and, pending
Completion, no resolution shall be passed without the prior
written consent of the Purchaser.
2.7 DOCUMENTS FILED
2.7.1 All returns, particulars, resolutions and documents required by
the Companies Act or any other legislation to be filed with the
Registrar of Companies, or any other authority, in respect of the
Company have been duly filed and were correct; and due compliance
has been made with all the provisions of the Companies Acts and
other legal requirements in connection with the formation of the
Company, the allotment or issue of shares, debentures and other
securities, the payment of dividends and the conduct of its
business.
<PAGE>
2.7.2 All charges in favour of the Company have (if appropriate) been
registered in accordance with the provisions of Ca ss 395, 409,
410 and 424.
2.8 POSSESSION OF DOCUMENTS
2.8.1 All title deeds relating to the assets of the Company, and an
executed copy of all agreements to which the Company is a party,
and the original copies of all other documents which are owned by
or which ought to be in the possession of the Company are in its
possession.
2.9 INVESTIGATIONS
2.9.1 There are not pending, or in existence, any investigations or
enquiries by, or on behalf of, any governmental or other body in
respect of the affairs of the Company.
2.10 INFORMATION DISCLOSED TO PURCHASER CORRECT
2.10.1 All information given by any of the Vendors, the Vendors'
Solicitors to the Purchaser, the Purchaser's Solicitors or the
Purchaser's accountants relating to the business, activities,
affairs, or assets or liabilities of the Company was, when given,
and is now accurate and comprehensive in all respects.
2.10.2 There are no material facts or circumstances, in relation to the
assets, business or financial condition of the Company, which have
not been fully and fairly disclosed in writing to the Purchaser or
the Purchaser's Solicitors, and which, if disclosed, might
reasonably have been expected to affect the decision of the
Purchaser to enter into this agreement.
3. TAXATION
3.1 Administration
3.1.1 All returns, computations and payments which should be or should
have been made by the Company for any Taxation purpose have been
made within the requisite periods and are up-to-date, correct and
on a proper basis and none of them is or is likely to be the
subject of any dispute with the Inland Revenue or other Taxation
authorities.
3.1.2 All particulars furnished to the Inland Revenue or other Taxation
authorities, in connection with the application for any consent or
clearance on behalf of the Company, or affecting the Company made
since the Last Accounts Date, fully and accurately disclosed all
facts and circumstances material for the decision of those
authorities; any consent or clearance is valid and effective; and
any transaction, for which consent or clearance has previously
been obtained, has been carried into effect (if at all) only in
accordance with the terms of the relative application and consent
or clearance.
<PAGE>
3.1.3 The Company has not, since the Last Accounts Date, taken any
action which has had, or might have, the result of altering,
prejudicing or in any way disturbing any arrangement or agreement
which it has previously negotiated with the Commissioners of
Inland Revenue, the Commissioners of Customs and Excise or other
Taxation authorities.
3.1.4 The Company has not, since the Last Accounts Date, paid or become
liable to pay any penalty or interest charged by virtue of the
provisions of TMA or any other Taxation statute.
3.1.5 The Company has properly operated the PAYE system, by deducting
tax, as required by law, from all payments made or treated as made
to its employees or former employees, and accounting to the Inland
Revenue for all tax deducted by it and for all tax chargeable on
benefits provided for its employees or former employees.
3.2 TAXATION CLAIMS, LIABILITIES AND RELIEFS
3.2.1 There are set out in the Disclosure Letter with express reference
to this clause full details of all matters relating to Taxation in
respect of which the Company (either alone or jointly with any
other person) has, or at Completion will have, an outstanding
entitlement:
(a) to make any claim (including a supplementary claim) for
relief under ICTA 1970, ICTA 1988 or any other Taxation
statute;
(b) to make any election for one type of relief, or one basis
system or method of Taxation, as opposed to another;
(c) to make any appeal (including a further appeal) against an
assessment to Taxation;
(d) to make any application for the postponement of Taxation;
(e) to disclaim or require the postponement or reduction of any
allowance.
3.2.2 The Company has not made nor is it entitled to make a claim under
TCGA S24(2) (Assets lost or destroyed, or whose value becomes
negligible) or s280 (Consideration payable in instalments)
or under Schedule 4 (Deferred charges on gains before 31 March
1982).
3.2.3 The Company is not nor will it become liable to pay, or make
reimbursement or indemnity in respect of any Taxation (or any
amount corresponding to Taxation) in consequence of the failure by
any other person (not being a Company) to discharge that Taxation
or amount within any specified period or otherwise, where the
Taxation or amount relates to a profit, income or gain,
transaction, event, omission or circumstance arising, occurring or
deemed to arise or occur (whether wholly or partly) prior to
Completion.
[PAGE 21]
<PAGE>
3.2.4 No relief (whether by way of deduction, reduction, set-off
exemption, repayment or allowance, or otherwise) from, against or
in respect of any Taxation has been claimed and/or given to the
Company which could or might be effectively withdrawn, postponed,
restricted or otherwise lost as a result of any act, omission,
event or circumstance arising or occurring at any time after
Completion.
3.3 DISTRIBUTIONS AND DEDUCTIBILITY OF PAYMENTS
3.3.1 The Company has not repaid, nor agreed to repay or redeemed or
agreed to redeem its share capital or capitalised or agreed to
capitalise in the form of redeemable shares or debentures any
profits or reserves of any class or description.
3.3.2 No security (within the meaning of ICTA s254(1) (Company
distributions, tax credits etc: Interpretation) issued by the
Company and outstanding at the date of this agreement was issued
in such circumstances that the interest payable on it, or any
other payment in respect of it, falls to be treated as a
distribution under ICTA s209 (Meaning of 'distribution').
3.3.3 No rents, interest, annual payments or other sums of an income
nature paid or payable since the Last Accounts Date by the Company
or which the Company is under an obligation to pay in the future
are or may be wholly or partially disallowable as deductions in
computing profits or as charges against profits, for the purposes
of corporation tax, by reason of the provisions of ICTA s74
(General rules as to deductions not allowable), ICTA s125
(Annual payments for non-taxable consideration), ICTA s338
(allowance of charges on income and capital), ICTA s770
(Sales etc, at undervalue or overvalue), ICTA s779 to
s785 (Leased assets), ICTA s787 (Restriction of
relief for payments of interest) or otherwise.
3.3.4 The Company has not received a capital distribution to which the
provisions of TCGA s189 (Capital distribution of chargeable
gains: recovery of tax from shareholder) could apply.
3.4 CARRY FORWARD OF LOSSES AND ACT
3.4.1 Nothing has been done, and no event or series of events has
occurred, which might cause in relation to the Company the
disallowance of the carry forward of losses, excess charges or
advance corporation tax under the provisions of ICTA s343
(company reconstructions), ICTA s393 (Losses other than
terminal losses), ICTA s768 (Change in ownership of
company: disallowance of trading losses) s768A (change in
ownership: disallowance of carry back of trading losses),
S768B (change in ownership of investment company: deductions
generally) or ICTA s245 (Calculation etc of ACT on change
of ownership of company) or s245A (Restriction on
application of s240 in certain circumstances).
[PAGE 22]
<PAGE>
3.6 GROUP RELIEF AND SURRENDER OF SURPLUS ACT
3.6.1 The Company has not been, nor is it entitled to be, treated as
within a group for the purposes of ICTA Part X Ch.IV.
3.7 CAPITAL ALLOWANCES
3.7.1 All capital allowances made or to be made to the Company in
respect of capital expenditure incurred prior to the date of this
agreement or to be incurred under any subsisting commitment have
been made or will be made in taxing its trade.
3.7.2 Since the Last Accounts Date the Company has not done, or omitted
to do, or agreed to do, or permitted to be done, any act as a
result of which any disposal value may be brought into account
under CAA s24 (Writing-down allowances and balancing
adjustments) or there may be any recovery of excess relief within
CAA s46 (Recovery of excess relief).
3.8 TRANSACTIONS NOT AT ARM'S LENGTH
3.8.1 The Company has not carried out nor been engaged in, any
transaction or arrangement to which the provisions of ICTA s770
(Sale, etc, at an undervalue or overvalue) have been or may be
applied.
3.8.2 The Company has not owned nor has agreed to acquire any asset, nor
has received nor agreed to receive any services or facilities
(including without limitation the benefit of any licenses or
agreements), the consideration for the acquisition or provision of
which was or will be in excess of its market value or determined
otherwise than on an arm's length basis.
3.8.3 The Company has not disposed of or acquired any asset in such
circumstances that the provisions of TCGA s17 (Disposals
and acquisitions treated as made at market value) could apply.
3.9 BASE VALUES AND ACQUISITION COSTS
3.9.1 The Company has not, since the Last Accounts Date, engaged in any
transaction in respect of which there may be substituted for any
purpose of Taxation a different consideration for the actual
consideration given or received by it.
3.10 TAX AVOIDANCE
3.10.1 The Company has not since the Last Accounts Date engaged in or
been a party to any scheme or arrangement of which the main
purpose, or
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<PAGE>
one of the main purposes, was the avoidance of or a reduction in
liability to Taxation; and, in particular but without limitation, the
Company has not been a party to or otherwise involved in any transaction
to which any of the following provisions could apply:
(a) ICTA s240 (Set-off of company surplus ACT against subsidiary's
liability to corporation tax);
(b) ICTA s410 (Group relief: arrangements for transfer of company to
another group or consortium); s 395 (Leasing contracts: and
company reconstructions); and s 116 (Partnerships involving
companies: arrangements for transferring relief);
(c) ICTA ss729 or 730 (Tax avoidance: other transfers of securities),
ss731 to 735 inclusive (Purchase and sale of securities) or ss 736
or 737 (Miscellaneous provisions relating to securities);
(d) ICTA s774 (Transactions between dealing company and associated
company);
(e) ICTA s779 (Sale and lease-back: limitation on tax reliefs);
(f) ICTA s781 (Assets leased to traders and others);
(g) ICTA s786 (Transactions associated with loans or credit);
(h) TCGA s29 (Value shifting)
(i) TCGA s106 (Disposal of shares and securities within prescribed
period of acquisition).
3.10.2 The Company has not since the Last Accounts Date been a party to any
transaction to which any of the following provisions has been or could be
applied other than transactions in respect of which all necessary
consents or clearances have been obtained:
(a) ICTA ss703-709 (Cancellation of tax advantages from certain
transactions in securities);
(b) ICTA s765 (Migration etc of companies);
(c) ICTA s776 (Transactions in land: taxation of capital gains);
(d) TCGA ss135-138 (Company reconstructions and amalgamations).
(e) TCGA s139 (Reconstruction or amalgamation involving transfer of
business)
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<PAGE>
3.11 DEPRECIATORY TRANSACTIONS
3.11.1 No allowable loss, which may accrue on the disposal by the Company
of any asset, is likely to be reduced by reason of the provisions
of TCGA s176 (Transactions in a group) or s177 (Dividend
stripping) and no chargeable gain or allowable loss arising on a
disposal is likely to be adjusted in accordance with s30 (Tax free
benefits).
3.12 UNREMITTABLE INCOME AND CAPITAL GAINS
3.12.1 The Company has not either received or become entitled to any
income which is "unremittable income", within the meaning of ICTA
s584 (Relief for unremittable overseas income), or any gain to
which the provisions of TCGA s279 (Foreign assets: delayed
remittances) could apply.
3.13 DEMERGERS AND PURCHASE OF OWN SHARES
3.13.1 The Company has not been engaged in or been a party to any of the
transactions set out in ICTA ss 213 or 218 (Demergers) nor has
made or received a chargeable payment as defined in s 214
(Chargeable payments connected with exempt distributions).
3.13.2 The Company has never at any time redeemed, repaid or purchased or
agreed to redeem, repay or purchase, any of its own shares.
3.14 CAPITAL LOSSES
3.14.1 The Company has never incurred a capital loss to which the
provisions of TCGA s18(3) (Transactions between connected persons)
are applicable.
3.15 ACQUISITIONS FROM GROUP MEMBERS
3.15.1 The Company does not own any asset which was acquired from another
company which was at the time a member of the same group of
companies (as defined in TCGA s170 (Groups of companies:
definitions)) as the relevant Company, and which owned that asset
otherwise than as trading stock within the meaning of s173
(Transfers within the company: trading stock).
3.15.2 The execution or completion of this agreement will not result in
any profit or gain being deemed to accrue to the Company for
Taxation purposes, whether pursuant to TCGA s179 (Company ceasing
to be a member of the company) or otherwise.
3.16 GIFTS INVOLVING GROUP COMPANIES
3.16.1 The Company has not held nor holds shares in a company (not being
another group company) which has made any such transfer as is
referred to in TCGA s125 (Shares in close company transferring
assets at an
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<PAGE>
undervalue); and the Company has not received any assets by way of
gift as mentioned in TCGA s282 (Gifts: recovery from donee).
3.17 VALUE ADDED TAX
3.17.1 The Company:
(a) has duly registered and is a taxable person for the
purposes of value added tax;
(b) has complied in all material respects with all statutory
requirements, orders, provisions, directions or conditions
relating to value added tax;
(c) maintains complete, correct and up-to-date records for the
purposes of the relevant legislation;
(d) is not in arrears with any payment or returns, or liable to
any abnormal or non-routine payment, or any forfeiture or
penalty, or to be operation of any penal provision;
(e) has not been required by the Commissioners of Customs and
Excuse to give security;
(f) has not applied for treatment as a member of a group which
includes any company other than the company;
(g) is not and has not agreed to become an agent, manager or
factor (for the purposes of VATA s47 (Agents, etc)) of any
person who is not resident in the United Kingdom.
3.17.2 The Disclosure Letter contains full particulars of any claim for
bad debt relief made or which may be made by the Company under
VATA s36 (Refund of tax in cases of bad debts).
3.17.3 The Company has never received a penalty liability notice under
VATA s59 or s64 (Persistent misdeclaration resulting in
understatements or overclaims) nor may be liable for a penalty
under s63 (Penalty for misdeclaration or neglect).
3.18 INHERITANCE TAX
3.18.1 No transfer of value (as defined in ITA s 3 (Transfers of Value)
has at any time been made by the Company.
3.19 STAMP DUTY AND CAPITAL DUTY
3.19.1 Within the five years ending on the date of this agreement, the
Company has not made any claim for relief or exemption under FA
1930 s 42 (Relief from capital and transfer stamp duty in case of
reconstructions or amalgamations of companies).
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<PAGE>
4. FINANCE
4.1 CAPITAL COMMITMENTS
4.1.1 There were no commitments on capital account outstanding at the
Last Accounts Date and since the Last Accounts Date the Company
has not made nor agreed to make any capital expenditure, nor
incurred or agreed to incur any capital commitments nor has it
disposed of or realised any capital assets or any interest
therein.
4.2 DIVIDENDS AND DISTRIBUTIONS
4.2.1 Since the Last Accounts Date no dividend or other distribution (as
defined in ICTA Part VI Ch II as extended by ICTA s418) has been
or is treated as having been declared, made or paid by the
Company.
4.2.2 All dividends or distributions declared, made or paid by the
Company have been declared, made or paid in accordance with its
articles of association and the applicable provisions of the
Companies Acts.
4.3 BANK AND OTHER BORROWINGS
4.3.1 Full details of all limits on the Company's bank overdraft
facilities are accurately set out in the Disclosure Letter and
the Company's bank account is accurately described under the
definition Company Bank Account in this agreement and there are
no other bank accounts belonging to the Company or in which
cash is being held on the Company's behalf.
4.3.2 The total amount borrowed by the Company from its bankers does
not exceed its respective overdraft facilities.
4.3.3 The total amount borrowed by the Company (as determined in
accordance with the provisions of the relevant instrument) does
not exceed any limitation on its borrowing powers contained in its
articles of association, or in any debenture or other deed or
document binding upon it.
4.3.4 The Company does not have outstanding, nor has it agreed to create
or issue, any loan capital; nor has it factored any of its debts,
or engaged in financing of a type which would not require to be
shown or reflected in the Last Accounts, or borrowed any money
which it has not repaid, save for borrowings not exceeding the
amounts shown in the Last Accounts.
4.3.5 The Company has not since the Last Accounts Date repaid or become
liable to repay any loan or indebtedness in advance of its stated
maturity.
4.3.6 The Company has not received notice (whether formal or informal)
from any lenders of money to it, requiring repayment or intimating
the
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<PAGE>
enforcement of any security the lender may hold over any of its
assets; and there are no circumstances likely to give rise to any
such notice.
4.4 LOANS BY AND DEBTS DUE TO THE COMPANY
4.4.1 The Company has not lent any money which has not been repaid to
it, nor does it own the benefit of any debt (whether or not due
for payment), other than debts which have arisen in the ordinary
course of its business; and the Company has not made any loan or
quasi-loan contrary to the Companies Acts.
4.5 LIABILITIES
4.5.1 There are no liabilities (including contingent liabilities) which
are outstanding on the part of the Company other than those
liabilities disclosed in the Last Accounts or incurred in the
ordinary and proper course of trading since the Last Accounts
Date.
4.5.2 There has been no exercise, purported exercise or claim for any
charge, lien, encumbrance or equity over any of the fixed assets
of the Company; and there is no dispute directly or indirectly
relating to any of its fixed assets.
4.5.3 The Company has never been the tenant of, or a guarantor in
respect of, any leasehold property.
4.6 BANK ACCOUNTS
4.6.1 An accurate and complete statement of the Company Bank Account has
been supplied to the Purchaser.
4.7 CONTINUATION OF FACILITIES
4.7.1 The Company has no overdraft facility.
4.8 GOVERNMENT GRANTS
4.8.1 Full details of all grants, subsidies or financial assistance
applied for or received by the Company from any governmental
department or agency or any local or other authority are set out
in the Disclosure Letter.
4.8.2 The Company has never done or omitted to do any act or thing which
could result in all or any part of any investment grant,
employment subsidy or other similar payment made, or due to be
made, to it becoming repayable or being forfeited or withheld in
whole or in part.
TRADING
5.1 CHANGES SINCE LAST ACCOUNTS DATE
5.1.1 Since the Last Accounts Date:
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<PAGE>
(a) the business of the Company has been continued in the
ordinary and normal course; and
(b) the Company has not by doing or omitting to do anything
prejudiced its goodwill.
5.2 VENDORS' LIABILITIES TO THE COMPANY
5.2.1 There is no outstanding indebtedness of any Vendors to the
Company.
5.3 EFFECT OF SALE OF SHARES
5.3.1 The Warrantors have no knowledge, information or belief that
after Completion (whether by reason of an existing agreement or
arrangement or otherwise) or as a result of the proposed
acquisition of the Company by the Purchaser:
(a) any supplier of the Company will cease or be entitled to
cease supplying it or may substantially reduce its supplies
to it;
(b) any client/customer of the Company will cease or be
entitled to cease to deal with it or may substantially
reduce its existing level of business with it; and
(c) the Company will lose the benefit of any right or privilege
which it enjoys.
5.3.2 Compliance with the terms of this agreement does not and will not:
(a) conflict with, or result in the breach of, or constitute
a default under, any of the terms, conditions or
provisions of any agreement or instrument to which the
Company is a party, or any provision of the memorandum
or articles of association of the Company or any
encumbrance, lease, contract, order, judgment, award,
injunction, regulation or other restriction or
obligation of any kind or character by which or to which
any asset of the Company is bound or subject;
(b) relieve any person from any obligation to the Company
(whether contractual or otherwise), or enable any person to
determine any such obligation or any right or benefit
enjoyed by the Company, or to excise any right, whether
under an agreement with or otherwise in respect of the
Company;
(c) result in the creation, imposition, crystallisation or
enforcement of any encumbrance whatsoever on any of the
assets of the Company;
(d) result in any present or future indebtedness of the Company
becoming due and payable or capable of being declared due
and payable prior to its stated maturity.
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<PAGE>
5.4 CONDUCT OF BUSINESSES IN ACCORDANCE WITH MEMORANDA AND ARTICLES OF
ASSOCIATION
5.4.1 The Company has at all times carried on business and conducted
its affairs in all respects in accordance with its memorandum
and articles of association for the time being in force and any
other documents to which it is or has been a party.
5.5 EXISTING SUPPLIERS AND CUSTOMERS
5.5.1 So far as the Vendors are aware no customer of the Business will
(as a result of the acquisition of the Business by the
Purchaser or for any other reason) terminate or materially
reduce, its relationship with the Business neither has any such
customer threatened to do so;
5.5.2 The details of the Customer List and information relating to the
Computer Software and Intellectual Property Rights have been
kept securely by the Vendors and so far as the Vendors are
aware no third party or employee has obtained any information
concerning the Customer List or such product which they may be
able to use to the disadvantage of the Business.
5.6 LICENCES AND CONSENTS
5.6.1 The Vendors have obtained all necessary software and other
licences for the proper carrying on of the Business and is not
aware that it is in breach of any of their terms or conditions.
5.7 JOINT VENTURES AND PARTNERSHIPS
5.7.1 The Vendors:
(a) are not and have not been a party to any joint venture or
consortium or any partnership arrangement or agreement
or to any agreement or arrangement for sharing
commissions or other income relating to the Business;
(b) do not conduct and have not conducted any part of the
Business through a branch, agency or permanent
establishment outside the United Kingdom;
(c) are not a member of any partnership, trade association,
society or other group, whether formal or informal and
whether or not having a separate legal identity, in
connection with the Business and no such body is
relevant to or has any material influence over the
Business as now carried on.
5.8 AGREEMENTS RELATING TO THE MANAGEMENT AND BUSINESS
5.8.1 There are no arrangements or understandings (whether legally
enforceable or not) between the Company and any person who is a
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<PAGE>
shareholder or the beneficial owner of any interest in it
relating to the management of the Company's business, or the
appointment or removal of directors of the Company, or the
ownership or transfer of ownership or the letting of any of the
assets of the Company, or the provision, supply or purchase of
finance, goods, services or other facilities to, by or from the
Company, or in any other respect relating to its affairs.
5.9 AGENCY AGREEMENTS AND AGREEMENTS RESTRICTING BUSINESS
5.9.1 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 its business is
carried on, or which in any way restricts its freedom to carry
on the whole or any part of its business in any part of the
world in such manner as it thinks fit.
5.9.2 The Company is not a party to any undertaking or assurances
given to any court or governmental agency which is still in
force.
5.9 UNFAIR TRADE AND RESTRICTIVE PRACTICES
5.9.1 The Company has never committed or omitted to do any act or
thing which could give rise to any fine or penalty; nor is the
Company a party to any agreement, practice or arrangement which
in whole or in part:
(a) contravenes the provisions of the Trade Descriptions Acts
1968 and 1972;
(b) would or might result in a reference of a consumer trade
practice, within the meaning of the Fair Trade Act 1973
s 13, or be liable to reference to the Consumer
Protection Advisory Committee under Part II of the said
Act;
(c) contravenes or is invalidated (in whole or part) by or is
subject to registration under the Restrictive Trade
Practices Acts 1976 and 1977;
(d) contravenes any other anti-trust, anti-monopoly or
anti-cartel legislation or regulations.
5.9.2 The Company has never engaged in any anti-competitive practice
as defined in the Competition Act 1980.
5.10 LITIGATION, DISPUTES AND WINDING UP
5.10.1 The Company has never engaged in any litigation or arbitration
proceedings as plaintiff or defendant; there are no proceedings
pending or threatened either by or against the Company; and
there are no circumstances which are likely to give rise to any
litigation or arbitration.
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<PAGE>
5.10.2 There is no dispute with any revenue or other official,
department in the United Kingdom or elsewhere, in relation to
the affairs of the Company, and there are no facts which may
give rise to any dispute.
5.10.3 There are no claims pending or threatened or capable of arising
against the Company by an employee or workman or third party,
in respect of any accident or injury, which are not fully
covered by insurance.
5.10.4 No order has been made or petition presented or resolution
passed for the winding up of the Company; nor has any distress,
execution or other process been levied in respect of the
Company which remains undischarged; nor is there any
unfulfilled or unsatisfied judgment or court order outstanding
against the Company.
5.11 COMPLIANCE WITH STATUTES
5.11.1 Neither the Company nor any of its officers, agents or employees
(during the course of their duties in relation to it) has
committed or omitted to do any act or thing the commission or
omission of which is or could be in contravention of any act,
order, regulation or the like (whether of the United Kingdom or
elsewhere) giving rise to any fine, penalty, default
proceedings or other liability on its part.
5.11.2 The Company has conducted and is conducting its business in all
respects in accordance with all applicable laws and regulations
whether of the United Kingdom or elsewhere.
5.12 DATA PROTECTION
5.12.1 The Company has duly complied with all relevant requirements of
the Data Protection Act 1984 including compliance with the
following:
(a) the data protection principles established in that Act;
(b) requests from data subjects for access to data held by it;
(c) the requirements relating to the registration of data
users.
5.12.2 The Company has not received a notice or allegation from either
the Data Protection Registrar or a data subject alleging
non-compliance with the data protection principles or
prohibiting the transfer of data to a place outside the United
Kingdom.
5.12.3 No individual has claimed or will have the right to claim
compensation from the Company under that Act for loss or
unauthorised disclosure of data.
5.13 DOCUMENTS STAMPED
5.13.1 All documents which in any way affect the right, title or
interest of the Company in or to any of its property,
undertaking or assets, or to which
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<PAGE>
the Company is a party, and which attract stamp duty, have been
duly stamped within the requisite period for stamping.
5.14 TRANSACTIONS INVOLVING DIRECTORS
5.14.1 The Company has not been a party to any transaction to which any
of the provisions of CA s 320 or s 330 may apply.
5.15 POWERS OF ATTORNEY AND AUTHORITY
5.15.1 No power of attorney given by the Company is in force.
5.15.2 There are not outstanding any authorities (express or implied)
by which any person may enter into any contract or commitment to
do anything on behalf of the Company.
5.16 SUBSISTING CONTRACTS
5.16.1 The Disclosure Letter contains accurate particulars of all the
contracts and other engagements, whether written or oral, to
which the Company is a party at the date of this agreement.
5.17 DEFAULTS UNDER AGREEMENTS BY COMPANY
5.17.1 The Company is nor will it become with the lapse of time become:
(a) in default under any agreement or covenant to which it is a
party or in respect of any other obligations or
restrictions binding upon it;
(b) in default under any obligations existing by reason of
membership of any association or body.
5.18 GUARANTEES AND INDEMNITIES
5.18.1 There is not now outstanding in respect of the Company any
guarantee, or agreement for indemnity or for suretyship, given
by it or for its accommodation.
6. EMPLOYMENT
6.1 EMPLOYEES AND TERMS OF EMPLOYMENT
6.1.1 The information relating to the Employees are set out in
Schedule 7 is true and accurate.
7. INTELLECTUAL PROPERTY RIGHTS AND TRADE SECRETS
7.1.1 All Intellectual Property Rights used or required by the
Company in connection with its business are in full force and
effect and are vested in and beneficially owned by it.
PAGE 33
<PAGE>
7.1.2 The business of the Company as now carried on does not and is
not likely to infringe any Intellectual Property Right of any
other person.
7.1.3 The Company has not (otherwise than in the ordinary and normal
course of business) disclosed or permitted to be disclosed or
undertaken or arranged to disclose to any person other than the
Purchaser any of its know-how, trade secrets, confidential
information, or lists of clients/customers.
8. PROPERTIES
8.1.1 The Company has no freehold or leasehold properties or any
other property interest including licence or other contractual
arrangement in respect of the occupation of premises.
PAGE 34
<PAGE>
SCHEDULE 4
DEED OF INDEMNITY
DEED OF INDEMNITY FOR TAXATION
DATE:
PARTIES:
1. "The Vendors" David Meyrick Billings, Deirdre Jennifer Swingler,
John David Swingler
2. "The Purchaser" Integrity Holdings Limited a company registered in
Nevada, USA whose registered office is at Suite 333,
3838 Camino Del Rio North, San Diego, California
92108-1789
RECITAL:
This deed is entered into pursuant to an agreement made between the Vendors
(1) and [ ] ("the Purchaser") (2) ("the Agreement").
OPERATIVE PROVISIONS:
1. DEFINITIONS
1.1 the following words and expressions have the following meanings,
unless they are inconsistent with the context:
"Taxation" means income tax (eg. PAYE), corporation tax, capital gains
tax, inheritance tax, stamp duty, stamp duty reserve tax, rates,
value added tax, customs and other import duties and national
insurance contributions and any payment whatsoever which the
Purchaser may be or become bound to make to any person as a
result of any enactment relating to taxation and any other
taxes, duties or levies supplementing or replacing any of the
above; and
all costs, charges, interest, fines, penalties and expenses
incidental, or relating, to any Taxation.
"Relief" means any relief, allowance, exemption, set-off or deduction
in computing or against profits, income or gains of any
description or from any source, or credit against Taxation
"Liability to
Taxation" means any liability to make a payment in respect of Taxation
PAGE 35
<PAGE>
"Claim for
Taxation" means any notice, demand, assessment, letter or other
document issued, or action taken, by or on behalf of the
Inland Revenue or Customs and Excise authorities or any
other statutory or governmental authority or body whatsoever
in any part of the world, whereby it appears that the
Purchaser is or may be subject to a liability to Taxation
(whether or not it is primarily payable by the Purchaser and
whether or not the Purchaser has or may have any right of
reimbursement)
"Final
Determination" means in relation to a Claim for Taxation where there is an
appeal against that assessment:
an agreement under TMA s54 or any legislative provision
corresponding to that section; or
a decision of a court or tribunal from which either no
appeal lies, or in respect of which no appeal is made within
the prescribed time limit.
2. INDEMNITY
2.1 Subject as provided below, the Vendors covenant with the Purchaser
that they will indemnify the Purchaser fully against:
2.1.1 either any Liability to Taxation or any depletion in the value of
assets of the Purchaser arising by reason of or in consequence of or in
connection with any Liability to Taxation;
2.1.2 any settlement of a Claim for Taxation; and
2.1.3 the costs incurred by the Purchaser in relation to any demands,
actions, proceedings and claims in respect of Liabilities to Taxation
or Claims for Taxation.
2.2 The indemnity in clause 2.1 shall apply only where the Liability to
Taxation or the Claim for Taxation:
2.2.1 is made wholly in respect of or in consequence of any acts, omissions
or transactions of the Purchaser or of the Vendors occurring or
entered into on or before the date of this deed; or
2.2.2 results from or is calculated by reference to any actual or deemed
income, profits or gains earned, received or accrued, or deemed to
have been earned, received or accrued, on or before that date; or
2.2.3 results from or is made by reference to any dividend or distribution
paid or made, or deemed to have been paid or made, before that date.
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<PAGE>
2.3 In respect of any payment due from the Vendors under clause 2.1, the
Purchaser may if it is satisfied that it will be or has been subject
to a Liability to Taxation calculate and demand in writing from the
Vendors from time to time such amount as will ensure that the net
receipt to the Purchaser (after Taxation) in respect of the payment
is the same as it would have been were the payment not subject to
Taxation in the hands of the Purchaser.
3. EXCLUSIONS
3.1 The indemnity in clause 2.1 shall not apply to any Liability to
Taxation or Claim for Taxation:
3.1.1 to the extent that an appropriate provision or reserve was made in
the Principal Accounts or was specifically referred to in the notes
to those Accounts;
3.1.2 for which the Purchaser is or may become liable wholly or primarily
as a result of transactions in the normal course of its business
after the Last Accounts Date;
3.1.3 to the extent that the Liability or Claim arises only of the
appropriate provision or reserve in the Principal Accounts being
insufficient by reason of any increase in rates of taxation made
after the date of the Agreement;
3.1.4 which would not have arisen but for a voluntary act or transaction
carried out by the Purchaser after the date of this deed otherwise
than in the normal course of business;
3.1.5 to the extent that liability is excluded or limited under the
provisions of Schedule 7 to the Agreement.
4. MITIGATION
4.1 Except as provided in clause 4.2 the Vendors shall be liable under
the indemnity in clause 2.1 notwithstanding any Reliefs, rights of
repayment or other rights or claims of a similar nature, which may be
available to any person entitled to the benefit of the indemnity to
set against or otherwise mitigate any Liability to Taxation, so that
the indemnity in clause 2.1 shall take effect as though no such
Reliefs, rights of repayment or other rights or claims were available.
4.2 The provisions of clause 4.1 shall not apply if and to the extent
that the Reliefs, rights of repayment, or other rights or claims
mentioned in that clause arose:
4.2.1 wholly or mainly by reason of any act, omission or transaction of any
Group Company before the Last Accounts Date;
4.2.2 wholly or mainly by reason of any act, omission or transaction of the
Vendors which which does not cause the Purchaser to incur any
liabilities, costs or expenses (unless the Purchaser receives a
satisfactory indemnity against them) and, without prejudice to the
generality of this clause, the Purchaser shall co-operate
[mjs/d0599 page 37]
<PAGE>
at the cost of the Vendors in making a claim for group relief which
falls within this clause.
4.3 Where and to the extent that clause 4.2 applies, credit shall be
given to the Vendors against any liability under this deed for any
such Reliefs, rights of repayment or other rights or claims as are
mentioned in clause 4.1.
4.4 When the Vendors have satisfied an obligation under this deed to
indemnity the Purchaser against a Liability to Taxation and the
Purchaser has (whether by operation of law, contract or otherwise) a
right of reimbursement (including by way of indemnity) against any
other person or persons in respect of the Liability to Taxation, the
Purchaser shall take all reasonable steps to enforce the right,
giving credit to the Vendors for any sum recovered by the Purchaser
by reason of the right, or shall at the request and expense of the
Vendors assign the right to the Vendors in such form as he shall
reasonably require.
4.5 If:
4.5.1 any provision for Taxation contained in the Principal Accounts is or
has been at the date that any payment is due to be made by the
Vendors under clause 2 certified by the Purchaser's auditors at the
Vendors' request and expense to be an over-provision; or
4.5.2 the tax liability which has resulted in the payment by the Vendors
gives rise to a corresponding saving for any Group Company;
the value (as certified by the Purchasers auditors) of the over-provision or
corresponding provision shall be set off first against the payment then due
from the Vendors and secondly (to the extent there is any excess) against any
further such payment(s) in chronological order until exhausted but if it is
subsequently found that the over-provision or corresponding saving as
certified was not in fact an over-provision or corresponding saving or that
the certified amount or value was excessive any amount which has been set
off under this clause in respect of the purported over-provision or
corresponding saving shall on demand be repaid forthwith by the Vendors to
the Purchaser or (as the case may be) to the appropriate Group Company.
5. CONDUCT OF CLAIMS
5.1 The Purchaser shall notify the Vendors in writing of any Claim for
Taxation which comes to its notice whereby it appears that the
Vendors are or may become liable to indemnify the Purchaser under
this deed. Where a time limit for appeal applies to the Claim, the
notification shall be given as soon as reasonably possible after the
date on which the Claim comes to the notice of the Purchaser but,
where no time limit applies or the period to which the limit relates
has not commenced, the notification shall be given within fifty six
days of that date.
5.2 The Purchaser shall ensure that a Claim for Taxation to which this
deed applies, is, so far as reasonably practicable, dealt with
separately from claims to which it does not apply and is not paid
prematurely; and for this purpose
[mjs/d0599 page 38]
<PAGE>
any payment made by the Purchaser to avoid incurring interest or any
penalty in respect of unpaid taxation shall be deemed not to be paid
prematurely.
5.3 Subject to clause 5.6 the Purchaser shall ensure at the request in writing
of the Vendors that the Vendors shall be placed in a position to dispute
on behalf of the Purchaser any Claim for Taxation to which this deed
applies and shall render, or cause to be rendered, to the Vendors at his
expense all such assistance as the Vendors, may reasonably require in
disputing any Claim for Taxation.
5.4 Subject to clause 5.5, the Vendors shall not be entitled on behalf of the
Purchaser to instruct such solicitors or other professional advisers as
the Vendors, or a majority of them, may nominate to act on behalf of the
Vendors or the Purchaser to the intent that the conduct, and costs and
expenses, of the dispute shall be delegated entirely to and be borne
solely by the Vendors. The costs arising from obtaining the determination
of counsel shall be borne as to one half by the Vendors and as to the
other half by the Purchaser.
In connection with the conduct of any dispute relating to a Claim for
Taxation to which this deed applies:
5.5.1 the Vendors shall keep the Purchaser fully informed of all relevant
matters and the Vendors shall promptly forward or procure to be forwarded
to the secretary of the Purchaser copies of all correspondence and other
written communications pertaining thereto;
5.5.2 the appointment of solicitors or other professional advisers shall be
subject to the approval of the Purchaser such approval not to be
unreasonably withheld or delayed;
5.5.3 the Vendors shall make no settlement or compromise of the dispute, nor
agree any matter in the conduct of the dispute which is likely to affect
the amount involved or the future Liability to Taxation of the Purchaser
without the prior approval of the Purchaser such approval not to be
unreasonably withheld or delayed;
5.5.4 if any dispute arises between the Purchaser and the Vendors as to whether
the Claim should at any time be settled in full or contested in whole or
in part, the dispute shall be referred to the determination of a senior
tax counsel of at least ten years standing appointed by agreement between
the Purchaser and the Vendors, or (if they do not agree) upon the
application by either party to the President for the time being of The Law
Society, whose determination shall be final. The counsel shall be asked
to advise whether in his opinion an appeal against the Claim would on the
balance of probabilities be likely to succeed and as to how the costs of
such dispute should be allocated between the Vendors and the Purchaser.
Only if his opinion is in the affirmative shall be appeal be made and that
Claim not then settled. Any further dispute arising between the Vendors
and the Purchaser as to whether any further appeal should be pursued
following determination of an earlier appeal (whether or not in favour of
the Purchaser) shall be resolved in a similar manner.
[PAGE 39]
<PAGE>
5.6 The Vendors shall at the request of the Purchaser provide, to the
reasonable satisfaction of the Purchaser, security or indemnities, or
both, in respect of all the costs and expenses of disputing any Claim for
Taxation to which this deed applies.
5.7 The Purchaser shall not be subject to any claim by or liability to, any of
the Vendors on the ground that it has not complied with the foregoing
provisions, if it has bona fide acted in accordance with the instructions
or approval of the Vendors.
6. DATES FOR AND QUANTUM OF PAYMENTS
6.1 This clause shall apply solely for determining the date on which any
payments or repayments shall be made by or to the Vendors pursuant to this
deed and (where expressly provided) the amounts of the payments or
repayments.
6.2 The Vendors shall make payment to the Purchaser to the extent that and on
the date on which the discharges or is deemed to discharge a Liability to
Taxation in respect of which the Purchaser is entitled to be indemnified
under this deed.
6.3 The Purchaser shall make a repayment to the Vendors to the extent that and
on the date on which the Purchaser receives any repayment of any amount
paid in respect of any Liability to Taxation pursuant to clause 6.2. Any
repayment to the Vendors pursuant to this clause 6.3 shall not prejudice
the right of the Purchaser to recover from the Vendors under this deed in
the event that a further Liability to Taxation is imposed upon the
Purchaser, whether in respect of matters to which the repayment relates or
otherwise.
6.4 For the purposes of clause 6.2, the Purchaser shall be deemed to discharge
a Liability to Taxation:
6.4.1 on the date on which the Purchaser pays any amount of Taxation;
6.4.2 on the date on which any Liability for Taxation would have fallen due but
for Reliefs, rights of repayment or other rights or claims of a similar
nature to which clause 4.1 applies.
6.5 For the purpose of clause 6.3, the Purchaser shall be deemed to receive a
repayment:
6.5.1 on the date on which the Purchaser receives a repayment of Taxation to
which clause 6.2 applies;
6.5.2 if and when the Purchaser would have received a repayment but for a
Liability to Taxation in respect of which the Purchaser is not entitled to
be indemnified under this Deed;
6.5.3 if and when the Purchaser would have received a repayment had the
Liability to Taxation been discharged by a payment of Taxation; or
[PAGE 40]
<PAGE>
6.5.4 if and when the Purchaser is able to obtain the benefit of a reduction in
its Liability to Taxation as a result of the right to repayment.
6.6. Upon Final Determination of a relevant Claim for Taxation the Vendors
shall promptly pay to the Purchaser such amount or further amount in
addition to any sums already paid under this deed as is required to cover
the full liability of the Vendors under this deed.
6.7 Any dispute in relation to the provisions of clauses 6.5 or 6.6 may be
referred, by the Purchaser or the Vendors, to the auditors for the time
being of the Purchaser, acting as experts and not as arbitrators, whose
certificate shall be final and binding upon the parties in the absence of
manifest error.
7. GENERAL
7.1 This deed shall be binding on the Vendors and the respective successors
and personal representatives of the partners of that firm.
7.2 The benefit of this deed may not be assigned in whole or in part by the
Purchaser.
7.3 The provisions of the Agreement relating to notices shall apply to any
notice to be given under, or in connection with, this deed.
7.4 The construction, validity and performance of this deed shall be governed
by the laws of England.
IN WITNESS whereof this Deed has been executed and delivered the day and year
first above written
[PAGE 41]
<PAGE>
SCHEDULE 5
LIMITATIONS TO THE VENDORS' LIABILITY TO WARRANTY CLAIMS
1. In this Schedule "warranty claim" means any claim which would (but for
the provisions of this Schedule) be capable of being made against the
Vendors other than a claim based on fraud, wilful default or wilful
failure to disclose.
2. Notwithstanding the provisions of this Agreement:-
2.1 the aggregate amount of the liability of the Vendors in respect
of any warranty claim or claims shall be limited to L900,000.
2.2 no liability shall attach to the Vendors in respect of any
single warranty claim where the amount for which the Vendors
would be liable under such claim is less than L2,500;
2.3 the Vendors shall not be under any liability to make any payment
in satisfaction of any warranty claim unless written particulars
thereof (giving full details of the specific matter in respect of
which such warranty claim is made) shall have been given to the
Vendors within a period of [ ] from the date of this Agreement
and unless legal proceedings in respect of the warranty claim are
commenced and served upon the Vendors within 12 months after such
written particulars have been given to that Vendors;
2.4 the Vendors shall have no liability in respect of any warranty
claim:-
2.4.1 to the extent that it arises or is increased as a result
of the passing of any legislation (or making of any
subordinate legislation) with retrospective effect;
2.4.2 if it would not have arisen but for anything voluntarily
done or omitted to be done after Completion by the
Purchaser or any of its respective agents or successors
in title which was other than in the ordinary course of
business and which the Purchaser knew or ought reasonably
to have known could give rise to a warranty claim;
2.4.3 to the extent that it relates to any loss for which the
Purchaser is indemnified by insurance, or for which it
would have been so indemnified if at the relevant time
there had been maintained valid and adequate insurance
cover of a type normally effected by prudent companies
carrying on a business similar to that of the Business.
2.5 where the Purchaser is entitled to recover from some other person
any sum in respect of any matter or event which could give rise to
a warranty claim, the Purchaser will take all appropriate steps to
recover that sum before making the warranty claim, and any sum
recovered will
<PAGE>
reduce the amount of the warranty claim (and, in the event of the
recovery being delayed until after the warranty claim has been
satisfied by the Vendors, will be paid to the Vendors, after
deduction of all reasonable costs and expenses of the recovery);
2.6 payment of any warranty claim shall pro tanto satisfy and
discharge any other warranty claim which is capable of being
made in respect of the same subject matter.
3. Upon the Purchaser becoming aware of any event whereby it appears that a
warranty claim will or is likely to be made, the Purchaser will:-
3.1 immediately notify the Vendors in writing of any warranty claim
and of any matter which may give rise to a warranty claim.
3.2 not make any admission of liability, agreement or compromise with
any person, body or authority in relation thereto without prior
consultation with the Vendors;
3.3 at all times disclose in writing to the Vendors all information
and documents relating to any warranty claim and, if requested
by the Vendors, give the Vendors and its professional advisers
reasonable access to the personnel of the Purchaser as the
case may be and to any relevant premises, chattels, accounts,
documents and records within the power, possession or control
of the Purchaser to enable the Vendors and its professional
advisers to interview such personnel, and to examine such
warranty claim, premises, chattels, accounts, documents and
records and to take copies or photographs thereof at its own
expense; and
3.4 at the expense of the Vendors take such action as the Vendors may
reasonably require to avoid, resist, contest or compromise any
warranty claim or matter which may give rise to a warranty claim.
4. If any potential warranty claim shall arise by reason of a liability
of the Vendors which is contingent only, then the Vendors shall not
be under any obligation to make any payment pursuant to such warranty
claim until such time as the contingent liability ceases to be
contingent and becomes actual.
<PAGE>
SCHEDULE 6
SHAREHOLDERS COVENANTS AND UNDERTAKINGS
<PAGE>
EXHIBIT 6.3
-----------
BUSINESS DATA SYSTEMS LIMITED - AND-
INFORMATION SUPPORT LIMITED - AND -ISL
SOFTWARE SOLUTIONS LIMITED BUSINESS
EXCHANGE AGREEMENT
DATED DECEMBER 2, 1998
<PAGE>
DATED 2nd December 1998
---------------------------------------
BUSINESS DATA SYSTEMS LIMITED
- AND -
INFORMATION SUPPORT LIMITED
- AND -
ISL SOFTWARE SOLUTIONS LIMITED
---------------------------------------------
BUSINESS EXCHANGE AGREEMENT
---------------------------------------------
BEALE AND COMPANY
GARRICK HOUSE
27-32 KING STREET
COVENT GARDEN
LONDON
WC2E 8JD
TEL: 0171 240 3474
FAX: 0171 240 9111
DX: 51632 COVENT GARDEN
E-MAIL [email protected]
REF. MJA/vht/IO0052.4
NOVEMBER 1998
<PAGE>
BUSINESS EXCHANGE AGREEMENT
DATE: 2nd December 1998
PARTIES:
1. Business Data Systems Limited a company registered in Scotland (number
84461) whose registered office is at 2/3 Dublin Mews, Edinburgh EH3 6NW
("BDSL"); and
2. Information Support Limited a company registered in England (number
2743028 ) whose registered office is at Garrick House, 27-32 King
Street, Covent Garden, London WC2E 8JD ("ISL")
3. ISL Software Solutions Limited a company registered in England (number
3328653) whose registered office is at Garrick House, 27-32 King
Street, Covent Garden, London WC2E 8JD ("ISSL")
RECITALS
A. BDSL operates a business of sale supply installation support and
maintenance of Computer Equipment (including, for the avoidance of
doubt, operating systems) ("the BDSL Hardware Business") to its current
users, who are primarily in the veterinary industry in the United
Kingdom. BDSL also sells and supports software products for customers
("the BDSL Retained Business")
B. BDSL wishes to dispose of and ISL wishes to acquire the BDSL Hardware
Business under the terms of this agreement. BDSL intends to keep the
BDSL Retained Business.
C. ISSL owns the Software Product as defined herein and wishes to transfer
to BDSL as part of the consideration payable to BDSL, all intellectual
property
<PAGE>
"Customer
List" means a record of names and addresses and contact details of
all current customers holding Contracts as the same are set
out in Schedule I as regards the BDSL Hardware Business
Customers and as the same are set out in Schedule II as
regards the DataBasics Business Customers in whatever form the
records are stored
"Disclosures" means the disclosures set out in a Disclosure Letter of
today's date by the respective Transferor to the respective
Transferee under clause 14
"Effective
Time" means the close of business on [30th] day of [November] 1998
"Employees" means the persons who, at the Effective Time, are employed by
the respective Transferor in that Transferor's business
"Information" means all information owned by each of the respective
Transferors or in that Transferor's possession and reasonably
required for the operation of the respective business it
intends to transfer hereunder including information relating
to the supply of work, materials, the marketing of services,
the Customer List, maintenance and servicing statistics and
records, training manuals and other materials, advertising and
other promotional material
"Software
Product" means the software owned by ISSL relating to DataBasics
Practice Manager products together with copies of the source
code, programmers notes, logic manuals, flow charts and such
other materials (as relate to the creation of the software) as
exist and are transferable
<PAGE>
its customers purchase from any other persons firm or company
(including BDSL, save as provided below) and agrees not to enter into
such contracts itself save as provided below. The period during which
such obligations and exclusivity operates shall be for five years from
the Effective Time which period shall be automatically renewed for
subsequent periods of five years unless BDSL serves on ISL a written
notice at least twelve months prior to the expiry of the then current
period of five years that the obligations and exclusivity shall not be
renewed.
3.2 In the event that BDSL's customers do not accept the term that they
shall contract direct with ISL in the manner described, BDSL agrees to
offer to such customer to contract to take on such supply installation
and support itself on the understanding that it will (subject to the
customer's consent) subcontract the supply installation and support
work on a back-to-back basis without mark-up or margin to ISL. BDSL
agrees to consult and if possible obtain the agreement of ISL to the
terms under which it enters into such contracts with customers in order
to ensure that ISL does not take on unacceptable terms and will seek to
include suitable terms in such contracts to permit an assignment
(subject to the customer's consent) to and subcontracting by ISL.
3.3 BDSL acknowledges that the terms of this clause 3 represent part of the
contractual consideration and benefit to ISL for ISL transferring the
DataBasics Business to BDSL and that accordingly any non-compliance
with such terms will cause ISL loss calculated as the loss of profit
which ISL would otherwise have expected to earn from such supply
installation and support business.
4. COMMISSION AGREEMENT
4.1 ISL agrees to pay BDSL a commission of 25% of the annual revenue
(excluding VAT expenses and sub-contract payments to the extent only
that such sub-contract payments do not exceed 30% of such annual
revenue) arising to ISL from hardware maintenance contracts for the
period of 12
<PAGE>
5. REVERSE ASSIGNMENT
5.1 In the event that any BDSL Hardware Maintenance customer, after having
agreed to assign their hardware maintenance contract to ISL, terminates
or threatens to terminate such contract due to ISL's failure to meet
the required level of service as provided for under such contract, ISL
agree to notify BDSL immediately and BDSL may request an immediate
assigmment of such contract back to BDSL in order to enable BDSL to
continue to service that customer. ISL agrees to co-operate in
attending to BDSL's request to assign back such contract with all due
expedition. Any maintenance fees already paid shall be apportioned to
the date that such re-assignment is effective.
6. FIRST LINE SUPPORT
6.1 BDSL agrees with ISL to provide to ISL free of charge a facility so
that all hardware support customers will telephone to or otherwise
communicate with BDSL in the first instance, BDSL will analyse the
nature of the customer's problem and where it relates to a hardware
problem (as opposed to software or other problem) will route that call
directly to ISL.
6.2 ISL agrees that it will within one month of the Effective Time at a
venue to be agreed between the parties and at ISL's expense provide 3
days' training to BDSL staff to enable such staff effectively to
provide to customers of BDSL the services required by such customers
and as previously provided to them by ISL prior to the transfer hereby
effected.
6.3 ISL will for a period of six months from the Effective Time provide at
a price to be agreed between the parties second line support to BDSL
staff to enable them to provide effectively to customers of BDSL the
services required by such customers and as previously provided to them
by ISL prior to the transfer hereby effected.
<PAGE>
8. COMPLETION
8.1 The exchange shall be completed immediately upon exchange of this
agreement when all matters set out in this clause 8 shall be effected.
8.2 Each Transferor shall cause to be delivered or if requested by the
respective Transferee made available to such Transferee:
8.2.1 copies of the Contracts (in whatever form such Contracts
exist);
8.2.2 the Information;
8.2.3 a deed of release/certificate of non crystallisation/consents
to transfer if charges or debentures have been granted by the
Transferor over its assets (eg. to its bankers); and
8.2.4 in the case of the BDSL Hardware Business, the Stock.
8.3 A Transferee shall not be obliged to complete the exchange unless the
transfer to it has been completed in accordance with this Agreement.
8.4 A Transferee may in its absolute discretion waive any requirement
contained in clause 8.2.
9. DEBTORS
9.1 Each Transferor shall collect the Book Debts which shall belong to that
Transferor. Each respective Transferee agrees to give all reasonable
assistance to the respective Transferor to enable the said Transferor
to collect the Book Debts.
9.2 Any sums received by the Transferee in respect of any Book Debts shall
be held on trust by that Transferee for the Transferor.
<PAGE>
breaches by the Transferor of this Agreement or claim arising from each
Transferor's conduct prior to the Effective Time and for all and any
liabilities not expressly agreed under this Agreement to be assumed by
the respective Transferee.
10.5 Each Transferee shall have the right to set off any claims it may have
arising under this Agreement against the respective Transferor from
any sum otherwise due to such Transferor.
11. CONTRACTS
11.1 Each Transferee shall accept assignments from the respective Transferor
of or join with the said Transferor in procuring a novation of the
Contracts and shall carry out perform and discharge all the obligations
of the Contracts from the Effective Time save for any obligations
attributable to a breach on the part of the Transferor or arising prior
to the Effective Time.
11.2 Insofar as the benefit of any of the Contracts cannot effectively be
assigned to the relevant Transferee except by an agreement or novation
with or consent to an assignment from the person firm or company
concerned:
11.2.1 the Transferor shall at the Transferee's request and expense
use all reasonable endeavours with the co-operation of the
Transferee to procure such novation or consent to the
assignment;
11.2.2 until the Contract is novated or assigned the Transferor shall
hold it and also the benefits relating under it in trust for
the Transferee absolutely. Where the Transferee performs such
Contract it does so as the Transferor's sub contractor; and
11.2.3 until the Contract is novated or assigned the Transferor shall
(insofar as it lawfully may) give all reasonable assistance
to the Transferee to enable the Transferee to enforce its
rights under the Contract.
<PAGE>
properly incurred (whether arising before, on or after the Effective
Time) relating to the Transferor's Employees by reason of or in
relation to:--
(a) all or any (or any alleged) liability or amounts payable to or
in relation to the Transferor's Employees including but not
limited to PAYE, National Insurance Contributions, all
remuneration and emoluments, pay in lieu of notice, redundancy
payments, unfair dismissal compensation, a reinstatement or
re-engagement order, breach of contract or statutory claims,
personal injury or other tortious or delictual claims and
claims by third parties and all other benefits whether in
respect of the period up to or after the Effective Time that
relate to the Transferor's Employees;
(b) anything done or omitted to be done before, on or after the
Effective Time by the Transferor or in respect of which the
Transferor would have been liable as employer in respect of
any of the Transferor's Employees but which by virtue of the
Regulations is deemed or will be deemed to have been done or
to have been omitted to be done by the relevant Transferee;
(c) anything done or omitted to be done before, on or after the
Effective Time by the Transferor by way of consultation with
or the provision of information to any of its Employees;
12.4 If any contract of employment or engagement of any of the Transferor's
Employees other than the Transferring Employee has effect or is deemed
to have effect as if originally made between the relevant Transferee
and such an Employee, then:--
(a) the relevant Transferor shall notify the Transferee as soon as
it becomes aware of this fact;
(b) the Transferee may, within one month of becoming aware of such
contract having effect as if originally made by the
Transferee, or such
<PAGE>
13.2 The apportionment of liabilities will not be relevant to this
transaction (save as may be required under clause 12.4(d).
13.3 The income arising from the Contracts shall be apportioned on a time
basis so that in so far as it relates to the period from and after the
Effective Time it shall belong to the relevant Transferee and shall, if
paid to the relevant Transferor be remitted to the Transferee forthwith
after receipt.
14. INFORMATION IN RELATION TO THE CONTRACTS
14.1 Each Transferor warrants to the relevant Transferee that prior to
completion it will have disclosed in writing to the Transferee all
information of which it is aware which may be relevant to that
Transferee's decision to acquire the business under this Agreement and
in particular whether:
14.1.1 whether a customer of the business will as a result of the
Transferee taking over responsibility for the Contracts
terminate or materially reduce its business whether or not
such customer has formally threatened to do so;
14.1.2 any information indicating that details on the Customer List
relating to the business it is transferring (respectively in
Schedules I or II) are incorrect;
14.1.3 any knowledge or information that any person may use
information concerning the Customer List to solicit or procure
the business of such customers to the detriment of the
Transferee;
14.1.4 knowledge or information concerning any litigation or other
proceedings including debt collection (save for debt
collection of sums less than L500) or the threat of any such
proceedings either issued to customers named on the Customer
List or against the Transferor in respect of the performance
or obligations under the Contracts; and
<PAGE>
that except as otherwise agreed in writing with the relevant
Transferee (and save in relation to the business of any
customer whose Contract is required to be re-assigned to BDSL
pursuant to clause 5.1 hereof) it will not and will procure
that none of its subsidiaries will nor any person, firm or
company carrying on business in succession to each respective
Transferor will, in each case as from the Effective Time:-
15.1.1 for the duration of the exclusivity arrangement under
clause 3.1 and for a period of 2 (two) years after
the expiry or termination for whatever reason of such
arrangement ("the Termination Date") (either alone or
jointly with any other person, firm or company) carry
on, or be engaged, concerned or interested in,
whether directly or indirectly (save as the holder of
5 per cent or less of the voting share capital of any
company listed on a stock exchange or other
recognised investment exchange (as defined in
Section 207 of the Financial Services Act 1986)), any
business in competition with the business which the
respective Transferor shall have transferred
hereunder ("the Protected Business");
15.1.2 for the duration of the exclusivity arrangement under
clause 3.1 and for a period of 2 (two) years after
the Termination Date, canvass or solicit the custom
of any person, firm or company who has within a
period of 2 (two) years prior to the Effective Time
been a frequent or material customer or supplier of
the Protected Business in respect of business which
competes with the Protected Business;
15.1.3 for the duration of the exclusivity arrangement under
clause 3.1 and for a period of 2 years after the
Termination Date, subject to the provisions of this
Agreement, provide technical advice or services to
any person, firm or company where such advice or
services relate to a business in competition with the
Protected Business;
15.1.4 for the duration of the exclusivity arrangement under
clause 3.1 and for a period of 2 (two) years after
the Termination Date, solicit or
<PAGE>
16. ANNOUNCEMENTS
16.1 Neither party shall make any public disclosure or publicity release
relating to the existence of this transaction without having first
obtained the written consent of the other party as to the terms manner
and timing of such disclosure.
17. PROPER LAW
17.1 The construction validity and performance of this Agreement shall be
governed by the laws of England and the parties agree to submit to the
jurisdiction of the English Courts for all purposes relating to this
Agreement.
18. CERTIFICATE OF VALUE
18.1 It is hereby certified that the transaction hereby effected does not
form part of a larger transaction or series of transactions in respect
of which the amount or value or aggregate amount or value of
consideration exceeds L60,000.
AS WITNESSED the hands of the duly appointed representatives of the parties on
the date which first appears on page 1.
<PAGE>
SCHEDULE 1
Contracts and Customer List: BDSL Hardware Business Customers
<PAGE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
A F Cowie Esq BVSc BSc A F Cowie Veterinary
MRCVS Surgery 2 16 Marine Drive Rottingdean BRIGHTON Sussex BN2 7HQ
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
A F Cowie Esq BVSc BSc A F Cowie Veterinary
MRCVS Surgery 1 19 Montague Place Kemptown BRIGHTON East Sussex BN2 1JE
A G Geldard Esq BVM&S A G Geldard
MRCVS Veterinary Surgery 30 Stanhope Road South DARLINGTON Co Durham DL3 7SQ
A J Barnes Esq BVSc A J Barnes Veterinary
MRCVS Surgery 17 Manor Road Folkstone Kent CT20 2SA
A J Kaye Esq BVetMed A J Kaye Veterinary
MRCVS Surgery 28 St Pauls Road Clifton Bristol Avon BS8 1LR
M N Clark Esq BVetMed Abbey Green
MRCVS Veterinary Group Church Close BROADWAY Worcestershire WR12 7AH
Abbey Green Gloucestershir
W E R Cook Esq Veterinary Practice Abbey Cottage Abbey Terrace Nr Cheltenham e GL54 5LW
L J Mutch Esq BVMS Abbey Moor South
MRCVS Veterinary Centre 1 110-116 Halifax Road SHEFFIELD Yorkshire S6 1LH
S A Estcourt Esq VetMB Abbey Moor South
MRCVS Veterinary Centre 2 300 Shalesmoor SHEFFIELD Yorkshire S3 8UL
A R Crawley Esq BVM&S Abbey Moor South
MRCVS Veterinary Centre 3 11 Abbey Lane SHEFFIELD Yorkshire S8 0BJ
A R Bennett Esq BVMS Abbey Veterinary Cambridgeshir
MRCVS Centre 8 6 South Street Crowland Peterborough e PE7 1DA
Abbey Veterinary South
A D Duffy Esq BVSc MRCVS Group 1 254a Barnsley Road Cudworth Barnsley Yorkshire S72 8SS
N Houchin Esq BVetMed Abbey Veterinary
MRCVS Group 10 62 London Road READING Berkshire RG1 5AS
J Galloway Esq BVM&S, Abbey Veterinary
MRCVS Group 11 71 Canal Street Paisley Strathclyde PA1 2HP
N Houchin Esq BVetMed Abbey Veterinary Henley on
MRCVS Group 12 Grange Farm Badgemore Thames Oxfordshire RG9 4NZ
J Galloway Esq BVM&S Abbey Veterinary
MRCVS Group 13 19A Union Street Greenock Strathclyde PA16 8DD
Abbey Veterinary South
A D Duffy Esq BVSc MRCVS Group 2 340 Manchester Road Deepcar Barnsley Yorkshire S30 5RH
Abbey Veterinary South
A D Duffy Esq BVSc MRCVS Group 3 29 King Street Hoyland Barnsley Yorkshire S74 9JU
Abbey Veterinary South
A D Duffy Esq BVSc MRCVS Group 4 2 Thompson Hill High Green Barnsley Yorkshire S35 4JU
Abbey Veterinary South
A D Duffy Esq BVSc MRCVS Group 5 89 Dodworth Road BARNSLEY Yorkshire S70 6ED
<PAGE>
Abbey Veterinary South
A D Duffy Esq BVSc MRCVS Group 6 15-17 Station Road Wombwell Barnsley Yorkshire S73 OAH
G M Gabbutt Esq MA VetMB Abbeydale Veterinary
MRCVS Centre 91 Preston New Road BLACKBURN Lancashire 8B2 6AY
Abbott, Draper &
R Fraser Esq BVMS MRCVS Fraser Harleigh Road BODMIN Cornwall PL31 1AQ
D S Wilson Esq BVMS Abervet Veterinary Aberdeens
MRCVS Centre Unit 8 The Court Yard Cults Scotland hire
D S Wilson Esq BVMS Abervet Veterinary
MRCVS Practice 28 Abbotswell Road ABERDEEN Grampian AB1 4AB
R A MacGregor Esq BVM&S Acorn Veterinary
MRCVS Centre 2 Woodstock Road LANARK Strathclyde ML11 7DH
R P Phillips Esq BVSc(Q) Addiscombe Road
MRCVS Veterinary Centre 263 Addiscombe Road CROYDON Surrey CR0 7HX
D M Coghlan Esq MVB Adelaide Veterinary SOUTHAMPTO
MRCVS Clinic Long Lane Bursledon N Hampshire S03 8DA
7 C Holford Esq BA VetMB Alcombe Veterinary
MRCVS Centre 220 Home Lane Acton London W3 6PU
T C Holford Esq BA VetMB Alcombe Veterinary
MRCVS Surgery 1 459 Oldfield Lane North Greenford London UB6 0EU
T C Holford Esq BA VetMB Alcombe Veterinary
MRCVS Surgery 2 80 Nelson Road Whitton Twickenham Middlesex TW2 7AY
D Helliwell BVM&S BSc Aldgate Veterinary North
MRCVS Practice St. Jones Place Driffield Humberside YO25 7QD
A R Bennett Esq BVMS All Creatures PETERBOROU Cambridgeshir
MRCVS Veterinary Clinic 65 Ledbury Road GH e PE3 6RF
Allan Heath
A M Heath Esq MRCVS Veterinary Practice Upper Coombe Farm Coombe Road Royston Hertfordshire SG8 9SA
R A Clarke Esq BVetMed Anchorage Veterinary
MRCVS Hospital South Walsham Road ACLE Norfolk NR13 3EA
S.D.B Hancox Esq BVSC Andale Veterinary
CerVR Centre Lingley Road Great Sankey Warrington Cheshire WA5 3ND
Anicare Veterinary Shoreham by
K Bryson Esq MRCVS Group 1 61 West Street Sea West Sussex BN43 5WF
N Blackwell Esq BVSc Anicare Veterinary
MRCVS Group 2 Unit B Limbrick Corner Palatine Road Worthing West Sussex BN12 6JJ
R Chandler Esq MA VetMB Anicare Veterinary
MRCVS Group 3 203 Old Shoreham Road Southwick Brighton East Sussex BN42 4LS
M S Wilson Esq BVSc Anicare Veterinary
MRCVS Surgery 49 Portland Road HOVE East Sussex BN3 5DQ
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Miss J A Burke BVSc
MRCVS Animal Care Centre 24 Hillylaid Road THORNTON Lancashire FY5 1ST
J C Chambers Esq BVetMed Anna House
MRCVS Veterinary Hospital 1 3 Sandgate Hill FOLKESTONE Kent CT20 2JF
J C Chambers Esq BVetMed Anna House
MRCVS Veterinary Hospital 2 250 Cheriton Road Cheriton Folkestone Kent CT20
J D Blayney Esq BVSc Arden Forest
MRCVS Veterinary Group 1 Cross Road Alcester Warwickshire B49 5EX
W G Duncan Esq BVM&S Ark Veterinary
MRCVS Surgeons 36 Forth Crescent Riverside Stirling Central FK8 1LG
C J Purves Esq BVM&S Ashbank Veterinary
MRCVS Centre 1 65 Thomson Place Corbie Hall Boness Edinburgh EH51 0AU
C J Purves Esq BVM&S Ashbank Veterinary
MRCVS Centre 2 9 Polmont Road FALKIRK Central FK2 9QQ
Ashfield House Nottinghamshir
B Sargeant Esq MRCVS Venterinary Hospital 142 Derby Road Long Eaton Nottingham e NG10 4ER
Ashfield House
B Sargeant Esq MRCVS Venterinary Surgery Hall Dyke Spondon Derby DERBYSHIRE DE21 7LF
D W Ashworth Esq BVM&S Ashworth & Taylor
MRCVS Veterinary Practice Union Terrace CRIEFF Tayside PH7 4DE
R G R Aspinall Esq BVSc Aspinal Auld & Gloucestershir
MRCVS Clarkson 1 108 Bristol Road Quedgetey e GL2 4NA
R G R Aspinall Esq BVSc Aspinal Auld & Gloucestershir
MRCVS Clarkson 2 96 Insley Gardens Hucclecote e GL3 3BA
R G R Aspinall Esq BVSc Aspinall Auld & Gloucestershir
MRCVS Clarkson 3 20 Glevum Way Abbeydale e GL4 9BL
JC Pattison Esq BVetMed Attimore Veterinary
MRCVS Hospital 1 15 Park Avenue Potters Bar Hertforshire EN6 5EN
JC Pattison Esq BvetMed Attimore Veterinary WELWYN
MRCVS Hospital 2 Ridgeway GARDEN CITY Hertfordshire AL7 2AD
JC Pattison Esq BvetMed Attimore Veterinary
MRCVS Hospital 3 22 The Common Hatfield Hertforshire AL10 0ND
JC Pattison Esq BvetMed Attimore Veterinary WHEATHAMST
MRCVS Hospital 4 4 Castle Rise EAD Hertforshire AL4 8HX
Avenue Veterinary
P M Creber BVSc, MERCVS Centre 'The Gables' 17 Avenue Road Malvern Worcestershire WR14 3AY
Avenue Veterinary
J Sterry Esq BVSc MRCVS Centre 2 Pendennis Avenue BRISTOL Avon BS16 5DW
Avenue Veterinary
C I Teare Esq BVSc MRCVS Surgery 2 2 Park Avenue REDCAR Cleveland TS10 3JZ
<PAGE>
Avon Vale Veterinary
Dr Chris Colles MRCVS Group 5 Ralley Lodge Ralley Banbury Oxfordshire OX15 6DT
Axe Valley Veterinary
R J A Packer Esq MRCVS Practice The Veterinary Surgery Blackford Wedmore Somerset BS28 4NG
Axe Valley Veterinary
R J A Packer Esq MRCVS Practice 2 Brent Rd Highbridge SOMERSET TA9 4BL
Axe Valley Veterinary
R J A Packer Esq MRCVS Practice 3 St. Cuthberts St Wells SOMERSET BA5 2AP
Axe Valley Veterinary
R J A Packer Esq MRCVS Practice 4 Greystone Union St Cheddar SOMERSET BS27 3NA
P S Aylmer Esq BVSc Aylmer & Cannon
MRCVS Veterinary Surgery Albion Street Chipping Norton Oxfordshire OX7 5BN
B J Shorten Esq MVB B J Shorten
MRCVS Veterinary Surgery 748 Harrow Road Kensal Green London NW10 5LE
Baguley & Boff
C Baguley Esq BVSc Veterinary Surgeons
MRCVS 1 53 Chorley Road Westhoughton Lancashire BL5 3PD
C Baguley Esq BVSc Baguley & Boff Horwich-
MRCVS Veterinary Surgery 2 158-160 Chorley New Road BOLTON Lancashire BL6 5QW
Bailey & Mathewson Portable machine East Sussex TN39 4JB
M Mathewson Esq BVetMed Green Leaves Veterinary 119 Little BEXHILL-ON-
MRCVS Bailey & Mathewson Centre Common Road SEA East Sussex TN39 4JB
A Bartholomew Esq BVSc Bartholomew
MRCVS Veterinary Surgery 35 Iffley Road Oxford Oxfordshire OX4 1EA
Beacon Hill
Mrs Bowen-Brooks Veterinary Surgery Beacon Hill Road Hindhead Surrey GU26 6QN
Beacons Veterinary
D O Thomas Esq MRCVS Centre Ashfield Place Llanfaes BRECON Powys LB3 8EG
Beechwood
I A Hoffe Esq MRCVS Veterinary Surgery 2 The Avenue KIDSGROVE Staffordshire ST7 1AE
J Begg Esq MRCVS Begg & Partners 40 Stonehouse Road Strathaven Strathclyde ML10 6LF
A Bell Esq MRCVS Bell & Partners 1 4 Norton Hill Drive Wyken Coventry West Midlands CV2 3AS
Weston under
A Bell Esq MRCVS Bell & Partners 2 Grove Rise Wetherley Leamington SPA Warwickshire CV33 9BZ
A E Arnold Esq MA VetMB Berghoff Veterinary
MRCVS Surgery 81 Berghoff Road COLCHESTER Essex CO4 5AF
Bevin, Butler & MARKET
T Bevin Esq BVSc MRCVS Drummond 1 124 Northampton Road HARBOROUGH Leicestershire LE16 9HF
Bevin, Butler &
T Bevin Esq BVSc MRCVS Drummond 2 56 High Street Kibworth Leicestershire LE8 0HQ
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Bevin, Butler & Northamptons
T Bevin Esq BVSc MRCVS Drummond 3 2 Tresham Street Rothwell Ketterinag hire NN14 6ES
Billon Veterinary
R M Furber Esq MA VetBM Centre 259 Billon Road Rugby Warwickshire CV22 7EQ
Mrs C E Stanford BVSc Birch Heath
MRCVS Veterinary Clinic Birch Heath Road TARPORLEY Cheshire CW6 9UU
T Shepherd Esq MA VetMB Birch Veterinary
MRCVS Centre 21 Birch Road Oxton BIRKENHEAD Merseyside - L43 5UF
Bishopton Veterinary North
Mrs M Shilcock Group Mill Farm Studley Road RIPON Yorkshire HG4 2QR
Ms Joe Lovett Black Sheep Surgery Unit 3 Warwick Road Fairfield In Louth Lincolnshire LN11 0YB
Estate
B P Viner Esp BVetMed Blythwood Veterinary
MRCVS Clinic 2 500 Uxbridge Road PINNER Middlesex HA5 4SL
J C S McCance Esq BVM&S Bond Street MACCLESFIEL
MRCVS Veterinary Clinic 263 Park Lane D Cheshire SK11 8AE
Bourton Vale Equine
M Lucey Esq MRCVS Clinic Wyck Rd Lower Cheltenham Gloucestshire GL54 2EX
Slaughter
Bowbridge Veterinary Gloucestershir
J Hunter Esq BVSc MRCVS Group 1 Bowbridge Surgery STROUD e GL5 2LA
Bowbridge Veterinary Gloucestershir
M J Rodgers Esq MRCVS Group 2 17 Gloucester Road Stonehouse e GL10 2NZ
Braid Veterinary
M D C Hall Esq BVM&S Hospital 1 171 Mayfield Road Newington Edinburgh EH9 3AZ
Braid Veterinary
M D C Hall Esq BVM&S Hospital 3 371 Leith Walk Leith Edinburgh EH6 8SE
Bray House MELTON
C Johnston Esq MRCVS Veterinary Practice 36 Asfordby Road MOWBRAY Leicestershire LE13 0HR
P Bosworth Esq MA VetMB Brady Veterinary
MRCVS Centre Sea Road North BRIDPORT Dorsel DT6 4RR
J McGillivray Esq BVMS Brelades Veterinary
MRCVS Surgery 1 Rothwell House Church Road Bookham Surrey KT23 3JP
J McGillivary Esq BVMS Brelades Veterinary
MRCVS Surgery 2 St Brelades - 20 Knoll DORKING Surrey RH4 3EP
Road
J McGillivray Esq BVMS Brelades Veterinary
MRCVS Surgery 3 The Tannery Petcare Station Road Gomshall Surrey GU5 9LE
Centre
S G Dobromylskj BVetMed Broadland House
MRCVS Veterinary Surgery High Street STALHAM Norfolk NR12 9AH
A R Bennet Esq BVMS Broadway Veterinary PETERBOROUG Cambridgeshir
MRCVS Hospital 158 Broadway H e PE1 4DG
R H Brown Esq BVetMed Brown & Nuttall
MRCVS Veterinary Practice 1 Chimneys Hallsham Road Heathfield East Sussex TN21 8AD
<PAGE>
Brown, Simpson &
Ms L. M Slobo BVM&S Stobo Veterinary
MRCVS Surgery 10 Drumlanrig Square HAWICK Borders TD9 0AS
W J Ferries Esq BVMS Brownlow Veterinary
MRCVS Centre Trimpley House Brownlow Road ELLESMERE Shropshire SY12 0AE
D Fotheringham Esq BVMS Buchan House
MRCVS Veterinary Clinic 1 19-21 High Street STRICHEN Grampian AB43 4SQ
D Fotheringham Esq BVMS Buchan House
MRCVS Veterinary Clinic 2 66 York Street Peterhead Grampian AB42 6SP
D Fotheringham Esq BVMS Buchan House
MRCVS Veterinary Clinic 3 29 Finlayson Street Fraserburgh Grampian AB43 5JW
G D Burgess Esq BVM&S Burgess & Donald
MRCVS Veterinary Surgery 58 Argyle Street INVERNESS Highland IV2 3BB
business description business name address line 1 address line 2 town county post code
R Beadle Esq BVetMed Buttercross Nottinghamshir
MRCVS Veterinary Centre 1 Long Acre BINGHAM e NG13 8AF
R Beadle Esq BVetMed Buttercross Nottinghamshir
MRCVS e
Veterinary Centre 2 Radcliffe-on-Trent BINGHAM NG13 8AF
Miss C D Wilson BVMS C D Wilson Veterinary
MRCVS Surgery 19 Steeple Street KILBARCHAN Strathclyde PA10 2JF
C Evans Esq BVetMed BSc C Evans Veterinary
MRCVS Surgery Callart Cottage Victoria Road FORT WILLIAM Highland PH33 6BG
C H Bond Esq MA VetMB C H Bond Veterinary
MRCVS Surgeon Durfold Cottage Durfold Hill, HORSHAM West Sussex RH12 3RY
C J Jamieson BVM&S C J Jamieson Dorking Road
MRCVS Veterinary Surgery 1 The Stables Locko Park Derby Derbyshire DE21 7BW
C J Jamieson BVM&S C J Jamieson
MRCVS Veterinary Surgery 2 28-30 Lower Ilkeston Derbyshire DE7 4LN
Stanton Road
Mrs C J Jamieson BVM&S C J Jamieson Nottinghamshir
MRCVS Veterinary Surgery 3 205 Ilkeston Road NOTTINGHAM e NG7 3FW
D H Black Esq BVM&S Caldew Veterinary
MRCVS Practice Townhead Road DALSTON Cumbria CA5 7PZ
Cambridge Veterinary Dept of Clinical Cambridgeshir
C Smith Esq MRCVS School Veterinary Medicine Madingley Road CAMBRIDGE e CB3 0ES
G S Greig Esq BVM&S Cameron & Greig
MRCVS Veterinary Surgeons Ardmohr Stirling Road MILNATHORT Tayside Kinrosshire
G Lloyd Esq BVetMed Camlas Veterinary
MRCVS Surgery 1a Clive Place Severn Street WELSHPOOL Powys SY21 7AN
Campsie Veterinary
D Hamilton Esq Centre 2 Retreat Avenue Omagh N Ireland BT79 OHR
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Carne Veterinary
Mr P J Huxley BVSc MRCVS Hospital Porth Y Usk Gwent NP5 1RZ
Carnegie & Lindsay Carne Street
D B Carnegie Esq BVM&S Veterinary Surgeons Northumber
MRCVS 1 Westgate HOLTWHISTLE land NE29 9AF
Carnegie & Lindsay
D B Carnegie Esq BVM&S Veterinary Surgeons
MRCVS 2 6 Longtown Road BRAMPTON Cumbria CAB 1SJ
E G D McCarrison BVMS
MRCVS Carrick Vet Group 93 Newbold Road Chesterfield Derbyshire S41 7PS
E G D McCarrison Esq Carrick Veterinary Clown
BVMS Group 34 Mills Street Chesterfield Derbyshire S42 4JN
Castle Veterinary
K Gill Esq BVM&S MRCVS Centre 23 The Square ELLON Gramplan AB4 9JB
Castle Veterinary
Ms S Morgan Group 38 Fore Street Farmlingham Woodbridge Suffolk IP19 9DF
H A Cathcart Esq MRCVS Cathcart & Winn 1 Leyton House 51 Hale Road Farnmham Surrey GU9 9RB
C P Baxter Esq BVetMed Cedar Veterinary
MRCVS Group 1 Clifton Veterinary Anstley Lane ALTON Hampshire GU34 2RH
C Baxter Esq BVetMed Cedar Veterinary Surgery
MRCVS Group 2 New Farm Road ALRESFORD Hampshire SO24 9QW
C Baxter Esq BVetMed Cedar Veterinary
MRCVS Group 5 Chawton End Branch Winchester Alton Hampshire GU34 5HD
J R Pryke Esq BVetMed Chase Veterinary Road
MRCVS Group 1 189 De La Warr Road Bexhill East Sussex TN40 2JY
J R Pryke Esq BVetMed Chase Veterinary On Sea
MRCVS Group 2 103-105 London Road ST LEONARDS East Sussex TN37 6AT
J J Loubser Esq BVSc Chase Veterinary ON SEA
MRCVS Group 3 89-91 Seaside Eastbourne Sussex BN22 7NL
Chestnut House North
A Loddo Esq Veterinary Centre 88 Church Street Sutton Humberside HU7 4TD
P J Walden Esq BVetMed Chestnut Veterinary on Hull
MRCVS Group 1 1 Hoe Lane Ware Hertforshire SG12 9LS
A M Buckling Esq BVMS Chestnut Veterinary
MRCVS Group 2 77 Fore Street Hertford Hertfordshire SG14 1AL
Chine House
Mrs Tracy Simpson Veterinary Group Siteby Hall Cossington Loughbrough Leicestershire L12 7RS
Christopher N Carter Road
C H Carter Esq MRCVS Veterinary Surgeon 224 Winchester Road Shirley Southampton Hampshire SO16 6TL
I S Fielding Esq BVMS Church End
MRCVS Veterinary Centre Trevarthlan Road ST AUSTELL Cornwall PL25 4BH
<PAGE>
R Williams Esq BVetMed Cinque Ports
MRCVS Veterinary Centre 1 P O Road off Hawkhurst Kent TN16 4AS
R Williams Esq BVetMed Cinque Ports High Street
MRCVS Veterinary Centre 2 Station Road Lydd Kent East Sussex TN29 9ED
R Williams Esq BVetMed Cinque Ports
MRCVS Veterinary Clinic Rye Veterinary Cinque Ports RYE East Sussex TN31 7AN
R A Clark Esq BVetMed Practice Square
MRCVS Clark & Marshall 2 High Street Berkhampstead Hertfordshire HP4 2BS
S N Clayton Esq BVSc Clayton & Cox Cleeve Mill Park Glous-
MRCVS Veterinary Practice Veterinary Centre NEWENT cestershire GL18 1AZ
Clent Hill Veterinary
Mrs P Hampson Group 1 34 Stourbridge Road BROMSGROVE Worcestershire B61 OAE
Clent Hill Veterinary
Mrs P Hampson Group 2 12 Kidderminster Road Stourbridge West Midlands DY9 0QD
Clevedale Veterinary Uplealham Sawmill
A Knox Esq MRCVS Practice Home Farm Uplealham Redcar CLEVELAND TS11 8AG
J M Daykin Esq BVSc Cliffe Veterinary
MRCVS Group Radstocke House 21 Cliffe LEWES East Sussex BN7 2AH
A J Rodgers Esq BVetMed Clifton Road High Street
BSc MRC Veterinary Hospital 30 Clifton Road Norwood London London SE25 6NJ
A J C Parker Esq BVetMed Clifton Villa
MRCVS Veterinary Surgery 1 10 Cross Street Camborne Cornwall TR14 8EU
A J C Parker Esq BVetMed Clifton Villa
MRCVS Veterinary Surgery 2 Coronation Terrace Richmond Truro Cornwall TR1 3HJ
P Farrington BVetMed Coach House Hill
MRCVS Veterinary Clinic Burlyns East Woodhay Newbury Berkshire RG15 0NU
Coastway Veterinary Shoreham by
T Cowle Esq MRCVS Group 67 High Street Sea Sussex BN43 5DE
C Cheetham Esq BVSc Colin Cheetham
MRCVS Veterinary Centre 1 Quantock Terrace The Drove BRIDGEWATER Somerset TA6 4BA
C Cheetham Esq BVSc Colin Cheetham
MRCVS Veterinary Centre 2 Castle Street Nether Stowey Somerset TA6
F L Brock Esq BVMS Collier & Brock
MRCVS Veterinary Surgeons 70 Portland Road TROON Strathclyde KA10 6QU
Cook & Timson
N Timson BVSc MRCVS Veterinary Surgery James Street Louth Lincolnshire LN11 0JW
Cooper & Partners
Veterinary Surgeons
Mrs C A Lees 1 37 Monk Street Tuttbury Staffordshire DE13 9NA
T Frost Esq MA VetMB Cornerstone WOLVERHAMP
MRCVS Veterinary Centre 2 Northwood Park Road Bushbury TON West Midlands WV10 8ET
</TABLE>
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<TABLE>
<S> <C> <C> <C> <C> <C> <C>
F M Coults Esq BVM&S Coults & Coults
MRCVS MsRCVS 1 15 Shortmead Street BIGGLESWADE Bedfordshire SG18 0AT
F M Coults Esq BVM&S Coults & Coults
MRCVS MsRCVS 2 31 High Street Sandy Bedfordshire SG19 1AG
Crescent Veterinary MELTON
Mr I J J Knott Clinic The Crescent MOWBRAY Leicestershire LE13 0NF
W T Leadbitter Esq BVMS Croft Veterinary COCKERMOUT
MRCVS Group 1 West Croft Brigham H Cumbria CA13 0TH
W T Leadbitter Esq BVMS Croft Veterinary
MRCVS Group 2 18 Curzon Street Maryport Cumbria CA13 0TH
W T Leadbitter Esq BVMS Croft Veterinary
MRCVS Group 3 187 Harrington Road Workington Cumbria CA14 3XD
A R Callegari Esq BVMS Crofts Veterinary
MRCVS Centre 2 Park Road BRECHIN Tayside DD9
Cromwell Veterinary
Ms E Joy Group 1 57 Great Whyte Ramsey Cambridgshire PE17 1HL
J E Brown Esq BVMS Cromwell Veterinary Cambridgeshir
MRCVS Group 2 36 St Johns Street HUNTINGTON e PE18 6DD
Cromwell Veterinary Cambridgeshir
A Taylor Esq Group 3 White House 1 Linacre Place St Neots e PE19 8AL
Cromwell Veterinary Cambridgeshir
Ms S Edwards Group 4 Unit 4 Burleigh Centre Canstable Road St Ives e PE17 6EP
Crossroads Buckinghamshi
Mall the main practice Veterinary Centre 351 Amesham Road Hazlemere re HP15 7HL
M H Walters Esq BVSc Crossroads HIGH Buckinghamshi
MRCVS Veterinary Centre 54 West Wycombe Road WYCOMBE re HP11 2LP
D A Clare Esq BVSc D Clare & Associates
MRCVS 1 51 Three Bridges Road Three Bridges CRAWLEY West Sussex RH10 1JJ
D A Clare Esq BVSc D Clare & Associates
MRCVS 2 62 Brighton Road Southgate CRAWLEY West Sussex RH10 6SX
D D Milton Esq BSc BVM&S D D Milton Veterinary
MRCVS Surgery The Green Skelton PENRITH Cumbria CA11 9SQ
Berwick Upon Northumberlan
D G RolloEsq MRCVS D G Rollo MRCVS 3-4 The Chandtery Quayside Tweed d TD15 1HE
D H Grove-White Esq BVSc D H Grove-White
MRCVS Veterinary Practice Glan Aber Cefnddwysam Bala Gwynadd LL23 7HF
D J Smith Esq BVSc D J Smith Veterinary MILTON Buckinghamshi
MRCVS Centre 1 3 Harrier Court Eaglestone KEYNES re MK6 5BZ
D J Smith Esq BVSc D J Smith Veterinary MILTON Buckinghamshi
MRCVS Centre 2 36 Purbeck Stantonbury KEYNES re MK14 6OB
<PAGE>
D M McDowell Esq BVMs D M McDowell
MRCVS Veterinary Surgery 1 9 Courthhouse Street OTLEY West Yorkshire LS21 3AN
D M McDowell Esq BVMs D M McDowell
MRCVS Veterinary Surgery 2 8 The Crescent Adef Leeds West Yorkshire LS16 6AA
D M Terry Esq BVetMed D M Terry Veterinary
MRCVS Surgery 1 16/18 New Village Road Cottingham Humberside HU16 4LT
D M Terry Esq BVetMed D M Terry Veterinary North
MRCVS Surgery 2 1-2 Park Street Anlaby Road HULL Humberside HU3 2JF
D Norman Esq MA VetMB D R F Norman
MRCVS Veterinary Practice 324 Biscol Road LUTON Bedfordshire LU3 1AZ
N H Roberts Esq BVSc Dalehead Veterinary North
MRCVS Group Station Road SETTLE Yorkshire BD24 9AA
Damory Veterinary BLANDFORD
Mrs C Raven Clinic Edward Street FORUM Dorset DT11 7QT
David Cuffe &
D Cuffe Esq MRCVS Associates 1 348 South Lambeth Rd Stockwell Stockwell LONDON SW8 1UQ
David Place
D J Hamilton Esq MA VetMB Veterinary Hospital 1 8 David Place St Heller Jersey JE 4TD
David Place Route des
D J Hamilton Esq MA VetMB Veterinary Hospital 2 Leodis Veterinary Surgery Quennevals St Brelade Jersey JE3 8FP
C Davies Esq MA VetMB Davies & Evans Gloucestershir
MRCVS Veterinary Surgeons Downington LECHLADE e GL7 3DL
Davison Veterinary Nottinghamshir
J L Davison Esq MRCVS Surgeons 1 65 Itkeston Road Nottingham e NG7 3GR
Davison Veterinary NOTTINGHAM
J L Davison Esq MRCVS Surgeons 2 61 South Rd Nottingham SHIRE NG2 7AH
Davison Veterinary NOTTINGHAM NG12
J L Davison Esq MRCVS Surgeons 3 101 Nottingham Rd Keyworth Nottingham SHIRE 5GW
M R Johnston Esq BVetMed Dier & Johnston CROWBOROUG
MRCVS Veterinary Surgeons The Well House Crowborough hill H East Sussex TN6 2SE
Donaldson &
R S Donaldson Esq BVMS Partners Veterinary
MRCVS Practice Maple Street Aspley Huddersfield West Yorkshire HD5 9AX
R S Donaldson Esq BVMS Donaldson & Partners
MRCVS Veterinary Practice Miry Lane Thongsbridge West Yorkshire HD7 2RY
Drumahoe Veterinary Co
Ms MA Lafuente Garcia Clinic 4 Ardlough Road Drumahoe Londonderry Londonderry BT47 1SW
J A Black Esq BVM&S Dunelm Veterinary
MRCVS Group 106 Gilesgate Durham Co Durham DH1 1JA
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
E J G Brander Esq BVMS E J G Brander
MRCVS Veterinary Surgery 20-22 Baltron Road KILLEARN Central G63 9NJ
Mrs E M Shirley-Beavan Gloucestershir
MRCVS E M Shirley-Beavan Grange Hill Farm Naunton Cheltenham e GL54 3AY
Eagle Veterinary
K Thomas Esq BVMS Group Norwich Road Halesworth Suffolk IP19 8HY
Eastcott Veterinary
P Southerdern Esq MRCVS Clinic 59 Bath Road Old Town Swindon Willshire SN1 4AU
M Jeffreson Esq MA VetMB Eastfield Veterinary Station Road- South
MRCVS Clinic 1 Eastfield Farm North Thoresby GRIMSBY Humberside DN36 5QU
M Jeffreson Esq MA VetMB Eastfield Veterinary
MRCVS Clinic 2 88 Hardy's Road Cleethorpes Lincolnshire DN35 0DN
A E J Waddilove Esq MA Eastgate Vet. Group Bury St
VetMB MRCVS 1 Cotton Lane Surgery Edmunds Suffolk IP33 1XW
J Waddilove Esq MA VetMB Eastgate Veterinary Riverside Veterinary
MRCVS Group Clinic Milden Hall Suffolk IP28 7DP
A E J Waddilove Esq MA Eastgate Veterinary
VetMB MRCVS Group 2 37 Bury Road Thetford Suffolk IP24 3AW
S B Glas Esq BVetMed Edwards & Glas
MRCVS Veterinary Surgeons Regency Houset Bow Street LANGPORT Somerset TA10 9PS
Edwards Jose & Gray
P S Edwards Esq MRCVS MRCVS The Surgery The Square Gillingham DORSET SP8 4AY
B A Stephens Esq BVM&S Elms Veterinary
MRCVS Centre 30 Gloucester Street Faringdon Oxfordshire SN7
Endell Veterinary
D Karr Esq MRCVS Group 49 Endless Street Salisbury Willshire SP1 3UH
D.G. Von Schweinitz Esq Equine Veterinary
DVM BSc Clinic 1 Greyfriars Farm Hogs Back Guilford Surry GU3 1AQ
R W Gray Esq BVetMed BSc Equipet Veterinary
MRCVS Centre 24 Nicol Street KIRKCALDY Fife KY1 1RP
Equipet Veterinary
Ms R Denlon Clinic High Street Burntisland Fife KY3 9AP
Mrs M J Fraser BVMS Esk Valley Veterinary
MRCVS Surgery 52 Buccleuch Street Dalkelth Lothian EH22 1AB
R D Stevens Esq BVscMsc Exeter Veterinary
MRCVS Centre 15 Exeter Street Bourne Lincolnshire PE10 9NW
P J Evans Esq MA VetMB
MRCVS Eye Veterinary Clinic Moreton Eye LEOMINSTER Herefordshire HR6 0DP
F Noble Esq BVM&S F Noble Veterinary Teignmouth Veterinary
MRCVS Surgery 1 Surgery Maudlin Drive TEIGNMOUTH Devon TQ14 8RU
<PAGE>
F Noble Esq Esq BVM&S F Noble Veterinary
MRCVS Surgery 2 46 Park Road DAWLISH Devon EX7 9LL
L T A Brain Esq Fairview Veterinary
BVMS.,MRCVS Centre 36 High Street NEW DEER Grampian AB53 6SX
Fellside Veterinary Stanhope-in-
Mrs Suzette Jopling Group 1 Cowgarth Hill Weardale Co Durham DL13 2PA
Fenton Veterinary HAVERFORDW
Mr C Bird Practice 21 Portfield EST Dyfed SA61 1BN
W E Skelton Esq BVSc Fitzalan House
MRCVS Veterinary Group 1 6a River Road Arundel West Sussex BN18 9DH
W E Skelton Esq BVSc Fitzalan House LITTLEHAMPTO
MRCVS Veterinary Group 2 31 Fitzalan Road N West Sussex BN17 5ET
W E Skelton Esq BVSc Fitzalan House
MRCVS Veterinary Group 3 2 Church Hill Angmering West Sussex BN16 4EG
W E Skelton Esq BVSc Fitzalan House
MRCVS Veterinary Group 4 11 Sea Lane East Preston West Sussex BN16
Forest Lodge
R Wilson Esq MRCVS Veterinary Practice 1 14 Barton Court Road New Milton Hampshire BH25 6NP
Forest Lodge
R Wilson Esq MRCVS Veterinary Practice 2 66 Milford Road Pennington Lymington Hampshire SO41 6DU
R F Foster Esq BVetMed Foster & Seward
MRCVS Veterinary Surgeons 90 Winchester Road BASINGSTOKE Hampshire RG21 1UH
Four Dales Veterinary North
M Howelle Esq MRCVS Practice 1 4 Howe End Kirkbymoorside Yorkshire YO6 BD
G E Skinner BA VetMB BSc Four Dales Veterinary North
MRCVS Practice 2 74 Bondgate Helmsley YORK Yorkshire YO6 5EZ
Four Dales Veterinary North
M Howelle Esq MRCVS Practice 3 Main Street Stillington Yorkshire YO6 1LA
Foxgrove Veterinary
C C Jefferies Esq MRCVS Surgery 8 Foxgrove Road Beckenham Kent BR5 5AT
R W Herdman Esq BVSc Francis & Herdman
MRCVS Veterinary Practice Milford Farm Mill Street Bakewell Derbyshire DE4 1DX
F J O Anthony Esq BVMS Fresh Acre Veterinary
MRCVS Surgery Fresh Acre Flaggoners Green Bromyard Herefordshire HR7 4QR
Fry, Usher & Edwards
P G Fry Esq MRCVS MsRCVS Drump Road Redruth Redruth Cornwall TR15 1SW
G Austin Esq BVetMed G Austin Veterinary
MRCVS Surgery Kerswill House IVYBRIDGE Devon PL21 9HT
G L Hall Veterinary LEAMINGTON
G L Hall Esq BVSc MRCVS Surgery 123 Heathcote Road SPA Warwickshire CV31 2LX
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
S J Cherry Esq BVM&S Gables Veterinary
MRC Centre 28 Norwood Beverley East HU17 9HB
Yorkshire
N D Walker Esq BVSc Gatehouse Veterinary
MRCVS Hospital 1 2 Long Lane Hoole Chester Cheshire CH2 2PD
N D Walker Esq BVSc Gatehouse Veterinary
MRCVS Hospital 2 Lavister Rossset WREXHAM Clwyd LL12 0DF
R I Heathcole Esq BVM&S Gaylon Veterinary
MRCVS Group Gayton House 40 Hatchlands Redhill Surrey RH21 6AT
Road
Mrs M J Davies BVMS Gele Veterinary
MRCVS Centre Llanfair Road ABERGELE Clwyd LL22 8DH
C George Esq BVetMed George & Partners ME13
MRCVS Veterinary Clinic Lady Dane Veterinary Graveney Road Faversham Kent 7LRBUR
Centre
Gibson's Veterinary
M Gibson Esq MRCVS Clinic Braunston Road OAKHAM Leicestershire LE15 6LD
Glimoor Veterinary
Miss F Allen BVMS MRCVS Clinic 1 37 Marshall Terrace Gilesgate DURHAM Co Durham DH1 2HX
Glimoor Veterinary Moor
Miss F Allen BVMS MRCVS Clinic 2 81 Durham Road Spennymoor Durham co Durham DL16 6JW
M Bowditch Esq BVetMed Girling & Bowdilch
MRCVS Veterinary Surgeons 8 The Square BEAMINSTER Dorset DT8 3AW
T J King Esq BVMS MRCVS Glasgow University 48 Whitelees Road LANARK Strathclyde ML11 7RX
Glenburn Veterinary
J M Hit Esq MRCVS Clinic 7 Nutis Corner Road Crumlin co Antrim BT29 4BW
Glenleigh Veterinary
G Parkinson Esq MRCVS Practice Glenleigh 58 Wingfield Trowbridge Wiltshire BA14 9EW
Rd
D Holmes Esq BVSc Golden Valley
MRCVS Veterinary Hospital 1 Nailsea Park Nailsea BRISTOL Avon BS19 1BD
D Holmes Esq BVSc Golden Valley
MRCVS Veterinary Hospital 2 2 The Vinery - Harford Chew Magna near BRISTOL Avon BS18 8RD
Square North
A P W Norrie Esq BVM&S Grant Norrie &
MRCVS Almond 1 Oaklands Park Street Masham Yorkshire HG4 4HN
A P W Norrie Esq BVM&S Grant Norrie & North
MRCVS Almond 2 Forest House Northend Bedale Yorkshire DL8 1AF
Greenmount
S Nelson Esq MRCVS Veterinary Clinic 72 Gilford Road Portdown CO Armagh N-Ireland BT63 5HT
Greenwood
P M Bird Esq BVSc MRCVS Veterinary Clinic 1 90 Swakeleys Road ICKENHAM Middlesex UB10 8BB
Greenwood
P M Bird Esq BVSc MRCVS Veterinary Clinic 2 59 Station Approach South Rystead Middlesex HA4 6FL
Greenwood
P M Bird Esq BVSc MRCVS Veterinary Clinic 3 21 Lady Margaret Road SOUTHALL Middlesex UB1 2PJ
<PAGE>
Greenwood
P M Bird Esq BVSc MRCVS Veterinary Clinic 4 102 Neld Road HAYES Middlesex UB3 1SH
Greenwood
P M Bird Esq BVSc MRCVS Veterinary Clinic 5 64 The Greenway UXBRIDGE Middlesex UB8 2PL
Greenwood
P M Bird Esq BVSc MRCVS Veterinary Clinic 6 Derwent Drive Hayes End Middlesex UB3 1SH
Greenwood Challon St Buckingham-
P M Bird Esq BVSc MRCVS Veterinary Clinic 7 Clifton Coltage 58 Lower Road Peter shire SL9 9AA
Ten Miller Esq BVM&S Grove Veterinary Barrow In
MRCVS Surgery 231 Rawlinson Street Furness Cumbria LA14 1DW
A Mclean Esq BVM&S Hadrian Veterinary Northumberland
MRCVS Group Dene Avenue HEXHAM NE46 1HJ
I G Jones Esq MA VetMB Hafren Veterinary
MRCVS Group Hafren Surgery Llanldloes Road NEWTOWN Powys SY16 1HA
Hale Veterinary
N J Burden Esq MRCVS Group 1 Hale House 19 Langtey Road CHIPPENHAM Willshire SN15 1BS
P R Seymour Esq MA Hall Court Veterinary South
VetMB MRCVS Group 1 227B Handsworth Handsworth Sheffield Yorkshire S13 9BJ
Road
P R Seymour Esq MA Hall Court Veterinary South
VetMB MRCVS Group 2 1 St Leonards Close Dinnington SHEFFIELD Yorkshire S31 7RL
Hampton Veterinary
E L Bryson Esq Centre Hampton Heath Malpas Cheshire SY14 8JQ
Miss J L Mathews BVetMed Haven Veterinary
MRCVS Group 1 1 James Street LLANELLI Dyfed SA15 1DU
Haven Veterinary
R M Livie Esq BVMS Surgeons Bridgefoot Steam Mill Lane Great Yarmouth Norfolk NR31 0HP
C L Butler Esq BVSc Hawthorn Lodge
MRCVS Veterinary Surgery 1 Old Parr Road BANBURY Oxfordshire OX16 8HT
R C Scammell Esq BVSc Haydon Veterinary
MRCVS Group Haydon House 83 West BRIDPORT Dorset DT6 5BN
Allington
F G Hayhurst Esq BVSc Hayhurst & Jones
MRCVS Veterinary Surgery Greenfield Road Wern Veterinary RUTHIN Clwyd LL15 1EY
Practice
R Green Esq BVetMed Heath Veterinary HAYWARDS
MRCVS Clinic 7 Queens Road HEATH West Sussex RH16 1EH
C Troughton Esq BVetMed Heath Veterinary South
MRCVS Surgery 1 326 Whiltchurch Road CARDIFF Glamorgan CF4 3NG
C Troughton Esq BVetMed Heath Veterinary
MRCVS Surgery 2 123/5 Heot-Y-Derl Rhiwbina Cardiff Glamorgan CF2 6PA
C Troughton Esq BVetMed Heath Veterinary
MRCVS Surgery 3 291 Cyncoed Road Cyncoed Cardiff Glamorgan CF2 6PA
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
J Greenwood Esq BVSc Hey & Greenwood
MRCVS Veterinary Practice 127 Wennington Road Southport Lancashire PR9 7AF
J Greenwood Esq BVSc Hey & Greenwood
MRCVS Veterinary Surgery 9 Holly Lane - Rufford ORMSKIRK Lancashire L40 1SH
Hillside Veterinary
R Pescod Esq MRCVS Centre 146 Crewe Road Nantwich Cheshire CW5 6NB
J Hodgson Esq MRCVS Hodgson & Hunter 1 Galemire Veterinary Galemire Cleator Moor CUMBRIA CA25 5QU
Hollycroft Veterinary Hospital
D M Summners Esq BVMS Center 66 Roston Drive Hollycroft Est Hinckley Leicestershire LE10 OXP
Hinckley
Hereford &
D Wise Esq Holme Lacy College Holme Lacey Hereford Worcester HR2 6LL
Mrs C L Hopkinson BVSc Hopkinson & Hurst
MRCVS Veterinary Practice 16 Nottingham Road Alfreton Derbyshire DE5 7HL
Howe, Starnes &
A Stames Esq BVetMed Gatward Veterinary
MRCVS Surgery Fairfield House UCKFIELD East Sussex TN22 5DG
E M R Hughes-Parry Esq Hughes-Parry & Cambridgeshir
MRCVS Associates 34 High Street LONGSTANTON e CB4 5BS
Hutchison Dunlop &
J C Hutchison Esq BVM&S Baird Veterinary
MRCVS Surgery Hallfield Lane WETHERBY West Yorkshire LS22 6JU
I S Peek Veterinary
I S Peek Esq BVMS MRCVS Surgery 6 Golden Square DUNS Berwickshire Borders TD11 3AW
P R Kemble Esq BVSc Icknield Veterinary
MRCVS Group 1 25 Princes Street DUNSTABLE Bedfordshire LU6 3AS
P R Kemble Esq BVSc Icknield Veterinary
MRCVS Group 2 367 Luton Road HARPENDEN Hertfordshire AL5 3LZ
P R Kemble Esq BVSc Icknield Veterinary
MRCVS Group 3 1 Brook Street LUTON Bedfordshire LU3 1 OS
J L Watkinson Esq BVSc J & J L Watkinson North
MRCVS Veterinary Practice Hollin Rigg - LEYBURN Yorkshire DL8 5HD
Middleham Road
J A O Davies Esq BVSc J A O Davies
MRCVS Veterinary Surgery 3 Oxford Road Hay - On - Wye Hereford Herefordshire HR3 5AJ
J Knott Esq BA VetMB BSc J B & J E Knott Worthy Down
Lane - Kings
MRCVS Veterinary Surgery Upper Hookpit Farmhouse Worthy WINCHESTER Hampshire SO21 2RR
J B Holroyd Esq BVMS J B Holroyd
MRCVS Veterinary Surgery 1 175 Whalley Road Clayton-
Le-Moors Accrington Lancashire BB5 5HD
J B Holroyd Esq BVMS J B Holroyd
MRCVS Veterinary Surgery 2 1 Simmons Street BLACKBURN Lancashire BB2 1AX
J B Johnson Esq BVSc J B Johnson
MRCVS Veterinary Surgery Oakhill Veterinary Centre Langley Lane PRESTON Lancashire PR
<PAGE>
J O Kirk Esq BVM&S J O Kirk Veterinary
MRCVS Practice Highfield 85 Eastgate Steaford Lincolnshire NG34 7EE
J R W Sedgwick Esq J R W Sedgwick
MRCVS Veterinary Surgery The Grand Theatre Cockermouth Cumbria CA13 9PZ
J V Murphy
JV Murphy Esq MRCVS Veterinary Practice 52 Clarendon Street Leamington Spa Warwickshire CV32 4PE
Jackson Wheeler &
Bilson Veterinary
Mrs P Clark Surgery 107 Carisbrooke Road NEWPORT Isle Of Wight PO33 1HP
G R Wienand Esq BVSc Joel Street Veterinary
MRCVS Clinic Joel Street Farm EASTCOTE Middlesex HA5 2PD
Jonathan Wood
J Wood Esq MRCVS Veterinary Surgery 1 'Roysden' Barnstaple
Cross Crediton Devon EX17 2EP
Jonathan Wood
J Wood Esq MRCVS Veterinary Surgery 2 32 East Street Crediton Devon EX17 3AX
Jones & Jones
S Jones Esq BVSc MRCVS Veterinary Surgery 142 Church Street HAYDOCK Lancashire WA11 0LA
Julie Hims Veterinary
Ms Julie Hims Surgery 67 High Street Rocester Utloxeter Staffordshire ST14 5JU
Kebir House NORTHALLERT North
M Glover Esq BVSc MRCVS Veterinary Group Kebir House 17a East Road ON Yorkshire DL6 1NP
K F S Bishop Esq BVM&S Kenwood Veterinary Northamptons
MRCVS Surgery 6 Station Close Daventry hire NN11 5AG
P Atkinson Esq MA VetMB Kingston Veterinary
MRCVS Group 1 Kingston House Long Street Sherborne Dorset DT9 3DB
I J Smith Esq BVM&S Kingsway Veterinary North
MRCVS Group 73 Otley Road SKIPTON Yorkshire BD23 1HJ
I J Smith Esq BVM&S Kingsway Veterinary
MRCVS Practice Branch - Silsden Silsden West Yorkshire BD20 9BL
G M Tremain Esq MA VetMB Kitio & Tremain
MRCVS Veterinary Surgery 1 Farm Mill Lane WITNEY Oxfordshire OX8 6BJ
L D Davies Esq BVM&S L D Davies BVM&S
MRCVS MRCVS 20 Bridge Street LAMPETER Dyled SA48 7AA
Lane & Murray LEAMINGTON
D R Lane Esq BSc FRCVS Veterinary Hospital 1 Guy Street SPA Warwickshire CV32 4RX
N A Forbes Esq BVetMed Lansdown Veterinary Clockhouse Veterinary Gloucestershir
FRCVS Surgeons Hospital Wallbridge STROUD e GL5 3JD
D M Leith Esq BVetMed Leadon Vale
MRCVS Veterinary Centre Lower Road Trading Estate LEDBURY Herefordshire HR8 2DH
R J Leadsom Esq BVSc
MRCVS Leadsom & Parker 1 5a Preston New Road Churchtown Southport Merseyside PR9 8PB
</TABLE>
<PAGE>
<TABLE>
<S>
R J Leadsom Esq <C> <C> <C> <C> <C> <C>
BVSc MRCVS Leadsom & Parker 2 309 Liverpool Road Birkdale Southport Merseyside PR8 3DE
Longmead Veterinary
L R Davies Esq MRCVS Centre Longmead Shaltesbury DORSET SP7 8PL
H L Jones Esq BVSc Love-Jones, Killen &
MRCVS Dawson 1 Highcroft 615 Wells Road BRISTOL Avon BS14 9BE
Veterinary Surgery
H L Jones Esq BVSc Love-Jones, Killen &
MRCVS Dawson 2 4 Smythe Road Bedminster Bristol Avon BS
A R Bennett Esq BVMS Lyon & Bennett Cambridgeshire
MRCVS Veterinary Practice 6 Barr Street Whittlesey PE7 1DA
M Brancker
Miss M Brancker Veterinary Surgery 38 Streetly Lane Sutton Coldfield West Midlands B74 4TU
M Kwok Veterinary Northamptonshire
Miss M Kwok MRCVS Surgery 15 Vicarage Road Northhampton NN1 4RY
M O Pinney Esq M O Pinney
BVetMed MRCVS Veterinary Surgery 34 Studley Road LUTON Bedfordshire LU3 1BD
I G Macqueen Esq MacQueen Veterinary
BVetMed MRCVS Centre 57 New Park Street DEVIZES Willshire SN10 1DP
Maguire, Lawrie &
A Lawrie Esq Lawrie 55 Main Street Cumbernauld Strathclyde G67 2RT
BVMS MRCVS Maguire, Lawrie &
Lawrie Veterinary
A Lawrie Esq BVMS Surgery 25 Griffiths Street FALKIRK Central FK1 5QY
MRCVS Mainstone Veterinary
K McLeod Esq MRCVS Clinic 19 Fleming Avenue North Baddesley Southhampton Hampshire SO52 9EJ
Mainstone Veterinary
M K J MacLeod Esq BVMS Clinic Mainstone Romsey Hampshire SO51 6BA
W T Turner Esq Mandeville Veterinary
BVetMed MRCVS Hospital 15 Mandeville Road NORTHOLT Middlesex UB5 5HD
Ms E Till Marshall & Till 1 134 Osmaston Road Derby Derbyshire DE1 2RF
R H Till Esq MA
VetMB MRCVS Marshall & Till 2 20 Campbell St Belper DERBYSHIRE DE56 1AP
Martin Grace Nottinghamshire
M Grace Esq MRCVS Veterinary Surgeon 277 Woodborough Road Nottingham NG3 4JU
McKeating & Lehner Bishops
F McKeating Esq MRCVS Veterinary Surgery Rye Street Stortford Hertfordshire CM23 2SY
A W McTaggart Esq BVMS McTaggert Veterinary
MRCVS Group 47 Vennal Street DALRY Strathclyde KA24 4AG
Metcalfe & Hum North
A P Hum Esq BVSc MRCVS Veterinary Surgery Cupplesfield Bainbridge LEYBURN Yorkshire DL8 3HA
<PAGE>
P G Robins Esq MA Midsummer Cambridgeshire
VetMB MRCVS Veterinary Surgery 25 Hamilton Road CAMBRIDGE CB4 1BP
J R Drew Esq Midmay Veterinary
BVetMed MRCVS Centre 1 20A Hill Road Oakley Basingtoke Hampshire RG23 7HR
J R Drew Esq Midmay Veterinary
BVetMed MRCVS Centre 2 77 Eastgate Street WINCHESTER Hampshire SO23 8DZ
Milleddygon
Mr R I Davies Esq Bodrwnshwn
BVM&S MRCVS Veterinary Group Bodrwnshwn Rhosnelgr ANGLESEY Gwynedd LL63 5SG
Mrs C Clarke MA Mill House
VetMB MRCVS Veterinary Surgery 20 Tennyson Avenue KINGS LYNN Norfolk Co PE30 2QG
Millburn Veterinary
L McNeill Esq Practice 135 Millburn Road COLERAINE Londonderry BT52 1QY
D J Wright Esq Minster Veterinary Nottinghamshire
BVM&S MRCVS Centre 52 Westhorpe SOUTHWELL NG25 0NG
Mintern & Hill
Mrs J Hill Veterinary Practice 1 295 Broomfield Road Chelmsford Essex CM1 4DU
D J Allison Esq Miramar Veterinary
BVM&S MRCVS Centre 15 Holt Road SHERINGHAM Norfolk NR26 8NA
D J Allison Esq Miramar Veterinary
BVM&S MRCVS Practice 46 Hight Street Overstrand Norfolk NR26 8NA
Moorland Veterinary
B Riley Esq MRCVS Centre St Lukes House Vicarage Road LEEK Staffordshire ST13 6AS
Mrs R Vernon BVSc Cert Mrs R Linden House
CHP MRCVS Veterinary Centre 22a Victoria Road Disa Norfolk IP22 3HW
A D Ladds Esq BVSc Mullacott Veterinary
MRCVS Hospital Bickenbridge Farm ILFRACOMBE Devon EX34 6NZ
N P Munnings Esq BVSc Munnings Mitchell &
MRCVS Peplow 2 Seymour Cottage TOTNES Devon TQ9 5BT
N P Munnings Esq BVSc Munnings Mitchell &
MRCVS Peplow 1 115 Preston Down Road Palgnton Devon TQ3 1DS
Mrs N A Chadwick N A Chadwick
BVMS MRCVS Veterinary Surgery 195 Derby Road LOUGHBOROUGH Leicestershire LE11 0HJ
N B D Henderson Esq N B D Henderson
MVB MRCVS Veterinary Surgery 144 Parrock Street GRAVESEND Kent North DA12 1EY
N J Jackson Esq N J Jackson
BVM&S MRCVS Veterinary Surgery Toft Lodge Raskelf Road Easingwold Yorkshire YO6 3LA
Nantwich Veterinary
Ms S Hodgekins Group 4 Tower House-Maer Lane Market Drayton Shropshire TF9 ETT
Nantwich Veterinary Nantwich Veterinary
Ms S Hodgekins Group Hospital Crewe Road End NANTWICH Cheshire CW5 5SF
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
R P Brain Esq BVetMed New Street Veterinary
MRCVS Centre 62 New Street HONITON Devon EX14 8BZ
N L Davies Esq BVSc Newnham Court
MRCVS Veterinary Clinic Bearsted Road Weavering MAIDSTONE Kent ME14 5EL
J P Hawkins Esq BVetMed Northlands Veterinary Northampton-
BA Hospital 2 Northampton Road KETTERING shire NN15 7JU
S J CherryEsq BVM&S Norwood Veterinary
MRCVS Group 28 Norwood BEVERLEY Humberside HU17 9HB
D L Richards Esq BVSc Oak Veterinary Group
MRCVS 1 Prendergast Place Farm Prendergast Haverfordwest Dyfed SA61 2PL
R Barrowman Esq BVetMed Oak Veterinary Group The Oak Veterinary Clarbeston HAVERFORD-
MRCVS 2 Surgery Road WEST Dyfed SA63 4UH
R G Russ Esq BVetMed Oaklands Veterinary
MRCVS Centre High Leven YARM Cleveland TS15 9JT
P.G. Birch Esq MRCVS Oaksford & Birch 1 37 Grass Royal Yeovil Somerset BA21 4JW
R Oaksford Esq MRCVS Oaksford & Birch 2 The Exchange Yetminster Dorset DT9 6LF
Oakwood Veterinary
Mrs S J N St Pierre Clinic 321 Junction Road Burgess Hill West Sussex RH15 0PY
MRCVS
Mrs S J N St Pierre Oakwood Veterinary
MRCVS Practice Gatehouse Lane Burguess Hill Sussex RH15 8XB
J Brentnall Esq BVSc Old Pound Veterinary MUCH
MRCVS Centre 1 Much Wenlock WENLOCK Shropshire TF13 6AH
J Brentnall Esq BVSc Old Pound Veterinary Donnington
MRCVS Centre 2 Bradley Road Wood Telford Shropshire TF2 7PY
J Brentnall Esq BVSc Old Pound Veterinary
MRCVS Clinic 4 7 Bridgenorth Road Broseley Shropshire TF12
J Brentnall Esq BVSc Old Pound Veterinary
MRCVS Hospital 3 44 Park Street Madefey Shropshire TF7 5LD
Old Stone Veterinary
W P McCullough Esq Surgery 3 Springmount Road Clough Ballymana Co Antrim BT44 9FR
J P Oliver Esq BVSc Oliver Mainland
MRCVS Veterinary Clinic 1 23 Brynford Street Hollywell Clwyd CH8 7RD
T R Mainland Esq MA Oliver Mainland
VetMB MRCVS Veterinary Clinic 2 2 Aberconway Road PRESTATYN Clwyd LL19 9HH
Orchard Veterinary
A Wilson Esq MRCVS Centre 1 105 Perry Road Sherwood Nottingham Nottinghamshire NG5 3AL
Orchard Veterinary
J Dudley Esq BVSc MRCVS Centre 1 Church Street Oldbury Warley West Midlands B69 3AF
Orchard Veterinary
J Dudley Esq BVSc MRCVS Centre 2 Home Farm Northfield Rd Harborne West Midlands B17 0TD
<PAGE>
P N Pulford Esq BVSc Orchard Veterinary
MRCVS Group 2 Wirral Park Road GLASTONBURY Somerset BA6 9XE
C Bagnall Esq BVSc Orwell Veterinary
MRCVS Group 1 Ropes Drive Kesgrave Ipswich Suffolk IP5 6TH
C Bagnall Esq BVSc Orwell Veterinary
MRCVS Group 2 56 Berners Street IPSWICH Suffolk IP1 3LU
P W J Buchanan Esq MVB P W J Buchanan
MRCVS Veterinary Surgery 1 55 Silver Street Irlam Manchester M30 6HT
P W J Buchanan Esq MVB P W J Buchanan
MRCVS Veterinary Surgery 2 77 Princes Road URMSTON Manchester M31 3SU
P W J Buchanan Esq MVB P W J Buchanan
MRCVS Veterinary Surgery 3 30 Davyhulme Road East Stretford Manchester M32 0DW
P W J Buchanan Esq MVB P W J Buchanan
MRCVS Veterinary Surgery 4 170 Monton Road Monton Manchester M30 9GA
P W J Buchanan Esq MVB P W J Buchanan
MRCVS Veterinary Surgery 5 41 Barton Road Eccles Manchester M30 7AD
A D Reid Esq BVMS Palmerston BUCKHURST
MRCVS Veterinary Group 93 Palmerston Road HILL Essex IG9 5NH
Mrs M J Wharmby BVM&S Park Hall Veterinary MANSFIELD
MRCVS Clinic Park Hall Stables WOODHOUSE Nottinghamshire NG19 8QX
Park Veterinary 9 Katharine
Ms A Waite Centre 1 Unit 6 Place Leavesden Hertforshire WD1 3AP
Park Veterinary
Mrs A Waite Centre 3 256 Cassiobury Drive WATFORD Hertfordshire WD1 3AP
Park Veterinary
A Chadwick Esq MRCVS Centre 4 9 Langley Close West Derby Liverpool Merseyside L12 0NB
Park Veterinary
G Jones Esq MRCVS Group 1 519 Saffron Lane LEICESTER Leicestershire LE2 6UL
S E King Esq BVetMed Park Veterinary
MRCVS Group 2 82-84 High St Whetstone Leicester LEICESTERSHIRE LE8 6LQ
Park Veterinary
A RadleyEsq MRCVS Group 3 162 Dominion Rd Glenfield Leicester LEICESTERSHIRE LE3 8JA
D Ashcroft Esq BVSc Park View Veterinary NORTH
MRCVS Hospital 255 Lincoln Road HYKEHAM Lincolnshire LN6 8NH
Barnhill-
J R Wallace Esq BVM&S Parkside Vet Group 58 Dalhousie Road Broughty Ferry DUNDEE Tayside DD5 2VB
Parkside Veterinary
G Haig Esq BVM&S MRCVS Group 1 61 Constitution Road DUNDEE Tayside DD1 1LA
Parkside Veterinary
G Haig Esq BVM&S MRCVS Group 2 12 Lawrence Street Broughty Ferry Dundee Tayside DD5 1ET
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Peace, Windridge &
S T Smith Esq BVSC Smith Veterinary
MRCVS Surgery "Paws" Edward St. NUNEATON Warwickshire CV11 5RP
Peasebrook Equine WORCESTER
T Galer Esq MRCVS Clinic Little Buckland Broadway SHIRE WR12 7JH
Pennard Veterinary
R Sarchet Esq BSc MRCVS Group 1 Pennard House 5 Eardley Road SEVENOAKS Kent TN13 1XY
R Sarchet Esq BVetMed Pennard Veterinary
BSc MRCVS Group 2 36 Western Road Borough Green Kent TN15 8AG
R Sarchet Esq BVetMed Pennard Veterinary
BSc MRCVS Group 3 Mid Kent SC Castle Road- Maidstone Kent ME16 0PU
Pennard Veterinary Allington
Dr E Jackson MRCVS Group 4 Eaton Veterinary 31 London Road Tonbridge Kent ME16 0PU
Penstone Veterinary Hospital
D A Staples Esq Group 26 London Road Stough Berkshire SL3 7HG
Penstone Veterinary
D A Staples Esq Practice 9 The Bishop Centre Taplow Berkshire SL6 0NY
P Green Esq BVSc Cert EO Peter Green & Cambridgeshire
MRCVS Matthew Tong Fellowes Farm Equine Abbots Ripton Abbots Ripton PE17 2LH
G D Ross Esq BVMS Pierson, Stewart & Clinic
MRCVS Partners 1 31 High Street Staplehurst Tonbridge Kent TN30 6HD
G D Ross Esq BVMS Pierson, Stewart &
MRCVS Partners 2 Brooksden High Street Cranbrook Kent TN17 3DT
G D Ross Esq BVMS Pierson, Stewart &
MRCVS Partners 3 4 Coombe Ho. Coombe Lane Tenderden Kent TN12 0AD
G D Ross Esq BVMS Pierson, Stewart & Headcorn-
MRCVS Partners 4 Rotland Cottage Stallon Road Ashford Kent TN26 9SB
Pierson, Stewart &
G D Ross Esq BVMS Partners Veterinary Marden-
MRCVS Surgery South Lodge Church Green Tonbridge Kent TN12 9HS
A J Mitchell Esq BVM&S Pilgrim Veterinary
MRCVS Surgery Fydell Street Boston Links Lincolnshire PE21 8LE
Portishead Veterinary
Ms R Best BVSc MsRCVS Centre 32 West Hill Portishead BRISTOL Avon BS20 6LN
C J Myerscough Esq BVSc Princess Avenue
MRCVS Veterinary Centre Princess Avenue Clitheroe Lancashire BB7 2AL
C J Myerscough Esq BVSc Princess Avenue
MRCVS Veterinary Centre 1 307 Union Road Oswaldtwisle Lancashire BB5 3HS
C J Myerscough Esq BVSc Princess Avenue
MRCVS Veterinary Centre 3 Princess Avenue CLITHEROE Lancashire BB7 2AL
<PAGE>
Priory Veterinary
R Jones Esq MRCVS Group 1 17 Market Place Bridlington Humberside YO16 4QJ
Priory Veterinary
R Jones Esq MRCVS Group 2 Spencer Centre West Gate Drifield Humberside YO25 5TJ
S F Jones Esq MA VetMB Priory Veterinary
MRCVS Group 2 59 Purewell Christchurch Dorset BH23 1EN
S F Jones Esq MA VetMB Priory Veterinary
MRCVS Group 3 301 Lymington Road Highcliffe Dorset BH23 5EB
S F Jones Esq MA VetMB Priory Veterinary
MRCVS Group 1 Ringwood Road Bransgore Dorset BH23 8AA
W T Pritchard Esq BVSc Pritchard Veterinary 10 a Collmendy
MRCVS Surgery Industrial
Estate Denbigh Clwyd LL16 5TA
Provost Veterinary
S Duff Esq BVM&S MRCVS Group 47 South Street St Andrews Fife KY16 9QR
Provost Veterinary
S Duff Esq BVM&S MRCVS Group 30 High Street Newport-on-Tay Dundee Tayside DD6 8AD
Provost Veterinary
S Duff Esq BVM&S MRCVS Group Redriggs Ceres CUPAR Fife KY15 5LZ
A P Robinson Esq BVSc(Q) Purton Veterinary
MRCVS Group 77 High Street Purton SWINDON Wiltshire SN5 9AB
R A Crawford
R A Crawford Esq MRCVS Veterinary Surgery 22 Raploch Street Larkhalt Strathclyde ML9 1AE
R D Owen Esq BVSc R D Owen BVSc
MRCVS MRCVS Merilyn The Waen St Asaph Clwyd LL17 0AL
R G Lockton Esq MVB MVM R G Lockton
MRCVS Veterinary Surgery 25 Park Road Mount Pleasant EXETER Devon EX1 2HS
R Huey Veterinary
R Huey Esq BVMS MRCVS Surgery 65 Old Newry Road Banbridge Co Down BT32 4LH
R Jenkins Esq BVetMed R Jenkins Veterinary
MRCVS Surgery 420-422 Colne Road BURNLEY Lancashire BB10 1EL
M W A Andrews Esq BVM&S Rase Veterinary MARKET
MRCVS Centre 1 PO box 8 - Pasture Lane RASEN Lincolnshire LN8 3DT
Rayne Farm
A C Pickles Esq MRCVS Veterinary Centre Rayne Farm Gaspill Penrith Cumbria CA10 3UD
Rayslede Centre for
L Taylor Esq Animal Welfare 27 Brighton Road Crawley West Sussex RH10 6AE
N R Brown Esq BVM&S Reed, Brown &
MRCVS Cameron Braeheads Stables ST POSWELLS Borders TD6 0AZ
A T Smith Esq BVMS Kinfauns Veterinary CLACTON-ON-
MRCVS Reeves & Partners Centre The Street SEA Essex CO16 9LG
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
A T Smith Esq BVMS
MRCVS Reeves & Partners 2 Branch Surgery Kinfauns Dovercourt Essex CO42 4QZ
Veterinary BERWICK-ON- Northumbertand
Centre TWEED
H R Gresham Esq BVMS Renton, Swan & West End Veterinary 57-63 West End TD15 1HE
MRCVS Partners Centre
Rogers, Brock &
J Brock Esq BVMS MRCVS Barker 41 Trentham Road Longton Stoke on Trent Staffordshire ST3 4DR
Rogers, Brock &
Barker Veterinary
J Brock Esq BVMS MRCVS Practice 227 Ultoxeter Road Blyth Bridge Stoke on Trent Staffordshire ST119JR
Rogers, Brock &
Barker Veterinary STOKE-ON-
J Brock Esq BVMS MRCVS Surgery 1 Walt Place - Cheadle TRENT Staffordshire ST10 1NY
J F Pattinson Esq BVMS Roker Park Veterinary
MRCVS Centre 1 43 Gregson Terrace Seaham Sunderland Tyne & Wear SR6
J F Pattinson Esq BVMS Rocker Park Veterinary
MRCVS Centre 2 35 Roker Park Road Sunderland Tyne & Wear SR6 9PL
N W Henry Esq MVB DBR Rose Cottage
MRCVS Veterinary Centre Chester Road Sutton Weaver RUNCORN Cheshire WA7 3EQ
S W Ricketts Esq BSc BVSc Rossdale & Partners
DESM 1 Beaufort Cottage Stables High Street Newmarket Suffolk CB8 8JS
S C Reeve Esq BVMS S C Reeve Veterinary
MRCVS Surgery 113 Church Street MATLOCK Derbyshire DE4 3BZ
S McDonald Esq BVMS S McDonald
MRCVS Veterinary Surgery 173 Oxford Lane WARRINGTON Cheshire WA2 7AZ
S P Elwood Esq MA VetMB S P Elwood
CertSA Veterinary Surgery 36 Boston Road Kirton BOSTON Lincolnshire PE20 1DS
S T Putnam Esq BVSc S T Putnam
MRCVS Veterinary Surgery Trenwith Lane ST IVES Cornwall TR26 1DA
A J Swansom Esq BVetMed Sansom & Dodwell
MRCVS Veterinary Practice 1 Oak Hill Vet Centre Lake Road WINDERMERE Cumbria LA23 2EQ
A J Sansom Esq BVetMed Sansom & Dodwell Sycamore Cottage-Church
MRCVS Veterinary Practice 2 Street Ambleside Cumbria LA22 0BU
R A Bentley Esq BVSc Seadown Veterinary
MRCVS Group 1 Seadown Veterinary Frost Lane Southampton Hampshire S04 6NG
Seadown Veterinary Hospital
Branch Group 2 84 Salisbury Rd Totlon Southampton HAMPSHIRE SO40 3JA
Seadown Veterinary
Branch Group 3 New Court New Street Lymington HAMPSHIRE SO41 9GJ
N V Nuthall Esq BVMS Senlac Veterinary
MRCVS Centre 1 Mount Street BATTLE East Sussex TN33 0EG
<PAGE>
<S> <C> <C> <C> <C> <C> <C>
N V Nuthall Esq BVMS Senlac Veterinary
MRCVS Centre 2 High Street Robertsbridge East Sussex TN32 5AN
C Manning Esq BVSc Shaw & Manning
MRCVS Veterinary Surgeons Hillcrest 332 Eaves Lane CHORLEY Lancashire PR6 0DX
D Warnes Esq BVSc Shaw Veterinary
MRCVS Centre Ramleaze Drive Shaw SWINDON Willshire SN5 9PY
Shearer & McGregor
A.G. Shearer Esq BMVS 1 127 Cadzow Street Hamilton Strathclyde ML3 6JA
Shearer & McGregor
A.G. Shearer Esq BMVS 2 28 Commercial Street Strathaven Strathclyde ML10 6LX
C G Kerneys Esq BVetMed Shepherd & Partners
MRCVS Veterinary Surgery The Beeches Heal West Plas BRIDGEND Mid Glamorgan CF31 1PA
R G Eddy Esq BVedMet Shapton Veterinary SHEPTON
FRCVS Group Allyn Saxon Drive MALLET Somerset BA4 5PB
P Parker Esq BVedMet BSc Sidcup Veterinary
MRCVS Centre 17 Station Road SIDCUP Kent DA15 7EN
A R Bennett Esq BVMS Silverdale Veterinary
MRCVS Surgery 21 Boston Road Holbeach Lincolnshire PE12 7LR
Simon Meyer
S Meyer Esq MRCVS Veterinary Practice 1 94 Dawes Rd Fulham London SW6 7EJ
Simon Meyer
Branch Veterinary Practice 2 122 Glenthorne Rd Hammersmith Hammersmith LONDON W6 0LP
North
P Wright Esq BVSc MRCVS Sinclair & Wright Skeldale Veterinary York Road Thirsk Yorkshire YO7 3BT
Centre
R V Smith Esq MA VetMB Smith & Clare
MRCVS Veterinary Surgerons 71 The Highway New Inn PONTYPOOL Gwent NP4 OPN
R V Smith Esq MA VetMB Smith & Clare
MRCVS Veterinary Surgery Fairwater Veterinary Clinic Fairwater Cumbria M044 4TE
Smith, Ryder-Davies
R H Smith Esq BVetMed & Hillard 1 18 Grundisburgh Road Woodbridge Suffolk IP12 4HG
Smith, Ryder-Davies
R H Smith Esq BVetMed & Hillard 2 83 Queens Road Felixstowe Suffolk IP11 7PE
Smith, Ryder-Davies
R H Smith Esq BVetMed & Hillard 3 412 Woodbridge Road Ipswich Suffolk IP4 4EJ
Southill Veterinary
P L Gripper Esq MRCVS Group Balsam Fields Wincanton Somerset BA9 9HE
J H Boyd Esq BVM&S St Clair Veterinary
MRCVS Group 1 8 Scone Place Durie Street Leven Fife KY8 4HB
J H Boyd Esq BVM&S St Clair Veterinary
MRCVS Group 2 2 Pottery Street KIRKCALDY Fife KY1 3ET
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
A R Bennett Esq BVMS St Francis Animal
MRCVS Clinic 49 St Thomas Road SPALDING Lincolnshire PE11 2XT
J Goulding Esq BVMS St George's WOLVERHAMP
MRCVS Veterinary Clinic 1 8 St Georges Parade TON West Midlands WV2 1BD
T M Phillips Esq BVSc St Mary's Veterinary
MRCVS Clinic 300 Ringwood Road Ferdown Dorset BH22 9AS
Stanley House
A Marsh Esq BVSc MRCVS Veterinary Surgeons 20 Albert Road COLNE Lancashire BB8 0AA
C A Whipp Esq BVetMed Staploe Veterinary Cambridgeshir
MRCVS Practice 48 Fordham Road - Soham ELY e CB7 5AH
A Larwood Esq BVSc Stevenson, Larwood
MRCVS & Kennedy 7 Wellington Road DEREHAM Norfolk NR19 2BP
A D Ladds Esq BVSc Sticklepath Veterinary
MRCVS Clinic Bickington Road Barnstaple Devon EX31 2DP
Stone Lane
Mrs B D Coltrell MRCVS Veterinary Hospital Stone Lane Meldreth ROYSTON Hertfordshire SG8 6NZ
Stonehenge Pet
Mrs Janet Irvine-Smith Practice Limited 1 Larkhill Road Durrington Sallsbury Wiltshire SP4 8DP
Stonehenge Pet The Neighbour-
Mall the main practice Practice Limited 2 The Veterinary Centre hood Centre Bishopton Wiltshire SP1 3YU
B J Clancy Esq MVB Stour Valley Sturry,
MRCVS Veterinary Centre 17 Fordwich Road Canterbury Kent CT2 0BW
M Carpenter Esq BVetMed Straid Veterinary Buckinghamshi
MRCVS Hospital 121 Station Road Beaconfield re HP9 1LH
P Scott-Dunn Esq MRCVS Straight Mile Farm Carter Hills Billingbear Wokingham Berkshire RG40 5RW
Stramondgate
I Richards Esq MRCVS Veterinary Centre 52 Stramondgate Kendal Cumbria L19 4BD
Strathmore Veterinary
S N Robinson Esq MRCVS Clinic London Road Andover Hampshire SP10 2PH
B J Morton Esq MA VetMB Summerlane Weston Super
MRCVS Veterinary Centre Summer Lane North Worle Mare Avon BS22 0BE
Temple End Flackwell Buckinghamshire HP10 9DT
Ms Kim Moodie Veterinary Surgery 31 Heath End Road Heath
Temple End
Ms Kim Moodie Veterinary Surgery 43 Temple End High Wycombe Buckinghamshire HP13 5DN
M Richardson Esq BVetMed Tern Veterinary MARKET
MRCVS Group 25 Stafford Street DRAYTON Shropshire TF9 1HX
N J W Hartley Esq BA Thameswood
VetMB MRCVS Veterinary Clinic 1 62-64 Purton Road SWINDON Wiltshire SN2 2LZ
<PAGE>
The Animal Health
P Spellman Esq Centre Parkway Centre Coulby Newham Middlesex TS8 0TJ
The Animal Health
P Spellman Esq MRCVS Centre 2 Redcar Rd Gulsborough CLEVELAND TS14 6DB
The Ark Veterinary Stratford on
J Marcus Esq MRCVS Practice 354 Birmingham Road Avon Warwickshire CV37 0RE
Dpt of Small Medicine & The Royal Veterinary
Surgery College University of London Camden London NW1 0TU
The Royal Veterinary
Large Animal Practice College Hawkeshead Lane North Mimms Hatfield Hertfordshire AL9 7TA
The Royal Veterinary
Biological Services Unit College Hawkeshead Lane North Mimms Hatfield Hertfordshire AI9 7TA
The Royal Veterinary
Biological Services Unit College Royal College street Camden London NW1 0TU
The Ryelands Coronation
A Prall Esq MRCVS Veterinary Clinic Corve Veterinary Surgery Avenue Ludlow SHROPSHIRE SY8 1DN
The Ryelands
A Prall Esq MRCVS Veterinary Clinic Ryelands Road LEOMINSTER Herefordshire HR6 8PN
I D Percy Esq BVetMed Thomas & Percy
MRCVS Veterinary Surgery 6 King Street LLANDEILO Dyfed SA19 6BA
Thornbrook Chapel-en-le-
John Down Esq Veterinary Clinic Thornbrook Road High Peak firth Derbyshire SK23 0LX
D Bremner Esq Tiptree Vet Centre Lion Cottage Maypole Road Colchester Essex CO5 0EJ
P Saunders Esq BVMS Towcester Veterinary Northamptons
MRCVS Centre Burcole Road TOWCESTER hire NN12 6JW
P MacKellar Esq BA VetMB Town Farm
MRCVS Veterinary Centre 40 Station Road Horrabridge Devon PL20 7SS
P MacKellar Esq BA VetMB Town Farm
MRCVS Veterinary Unit 1 1 Woburn House Yelverton Devon PL20 7SS
Pr MacKellar Esq BA VetMB Town Farm
MRCVS Veterinary Unit 2 65 West Street Tavistock Devon PL19 8AJ
NORTHER
Troytown Equine N
H Dillon Esq Hospital Green Road Kildre Co Kildre IRELAND
Tudor, Lawson &
J B Lawson Esq BVSc Dallimore Veterinary
MRCVS Surgery 1 Bala Road DOLGELLAU Gwynedd LL40 1DW
D Cheal Esq BVetMed Turner & Cheal
MRCVS Veterinary Surgery 1 Mall main surgery at Wembley Edgware Middlesex HA9 6QH
D Cheal Esq BVetMed Turner & Cheal
MRCVS Veterinary Surgery 2 Mall main surgery at Wembley Rulslip Middlesex HA4 8PG
</TABLE>
<PAGE>
SCHEDULE II
Contracts and Customer List: DataBasics Business Customers
<PAGE>
THE USERS
---------
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
PRACTICE DETAILS CONTACT TYPE TEL & FAX COMPUTER SYSTEM
OF NUMBER &
PRACTICE INSTALLATION DATE
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
Barton Lodge Veterinary Centre Mr RP Wickenden Small Animal Tel: Multi-User
1 Midland Road 01442 216048 PRACTICEMASTER System supporting six
Hemel Hempstead terminals, NT Server, running
Hertfordshire Fax: PracticeMaster PAGE and DATAVIEW
HP2 5BH 01442 234847 supplying a network of 4 PC's
incorporating a direct link to the
partner's home, providing full access to
the practice computer.
SCO Enterprise
September 1990
- ------------------------------------------------------------------------------------------------------------------------------------
Dunbar Veterinary Hospital Mrs F Hunter Small Animal Tel: Multi-User
1 Dunbar Road 01202 555553 PRACTICEMASTER System supporting six
Talbot Wood terminals.
Bournemouth Fax:
Dorset 01202 296911 September 1990
BH3 7AY
- ------------------------------------------------------------------------------------------------------------------------------------
Lynwood Veterinary Hospital Mr A Hunter Mixed Animal Tel: Multi-User
Station Road 01202 882101 PRACTICEMASTER System supporting nine
Wimborne Minster terminals with a full colour workstation
Dorset Fax: for business graphics, spreadsheets etc.
BH21 1RQ 01202 887898
The practice also runs an integrated
accounts package, and has a network of
3 PC's. SCO Advanced File and Print
Server.
September 1990
- ------------------------------------------------------------------------------------------------------------------------------------
The Veterinary Centre Mr A Miller Small Animal Tel: Multi-User
431 Crow Road 0141 339 1228 PRACTICEMASTER System supporting six
Broomhill terminals with a full colour workstation
Glasgow Fax: for business use. The practice also runs
G11 7DZ 0141 334 2142 an integrated accounts package.
September 1990
- ------------------------------------------------------------------------------------------------------------------------------------
PRACTICEMASTER IS A REGISTERED TRADEMARK OF DATABASICS. ALL RIGHTS RESERVED.
PREPARED 2 DECEMBER, 1998
<PAGE>
THE USERS
---------
- ------------------------------------------------------------------------------------------------------------------------------------
Ashdale Veterinary Clinic Mr RD Partridge Small Animal Tel: Multi-User
Pet Health Centre 01423 531616 PRACTICEMASTER System supporting two
58 Otley Road terminals, with a direct link via BT
Harrogate Fax: dedicated leased line to the main
North Yorkshire 01423 521550 hospital a mile away.
HG2 0DP
October 1990
- ------------------------------------------------------------------------------------------------------------------------------------
The Laurels Veterinary Centre Mr G Cooper Mixed Animal Tel: Multi-User
4 Ryeland Street 01432 354433 PRACTICEMASTER System supporting 6
Hereford terminals. The practice also runs a full
Hereford & Worcester Fax: set of integrated accounts.
Herefordshire 01432 342763 SCO Open Server 5.0
HR4 OLA October 1990
- ------------------------------------------------------------------------------------------------------------------------------------
Wright and Morten Mr M Spicer Mixed Animal Tel: Multi-User
Veterinary Surgeons 01625 433321 PRACTICEMASTER System linking the large
38 Cumberland Street animal and small animal facilities of the
Macclesfield Fax: practice. This 12 screen system supports
Cheshire 01625 612240 additional PCs providing PracticeMaster
SK10 1BY DATAVIEW.
The system also has a BT link to the
branch practice's 7 and 5 miles away.
SCO Enterprise
February 1991
- ------------------------------------------------------------------------------------------------------------------------------------
JSW & M Glassbrook Mr & Mrs J Small Animal Tel: PRACTICEMASTER POS System supporting four
Veterinary Surgeons Glassbrook 01772 432039 additional Networked PC's.
1-3 King Street SCO Open Server 5.0
Leyland March 1991
Preston
Lancashire
PR5 1LE
- ------------------------------------------------------------------------------------------------------------------------------------
Riverside Veterinary Centre Mr D Hassall Mixed Animal Tel: Multi-User
Beaufort 01495 305465 PRACTICEMASTER System supporting two
Ebbw Vale terminals with a direct BT leased link
Gwent to the main surgery six miles away.
Wales
NP3 5RB March 1991
- ------------------------------------------------------------------------------------------------------------------------------------
Ashton House Veterinary Mr Saunders Small Animal Tel: PRACTICEMASTER POS System supporting two
Hospital 01924 372017 terminals.
69 Westgate End
Wakefield Fax: The practice also runs a full colour
West Yorkshire 01924 366752 workstation for word processing,
WF2 9RL spreadsheets and graphics.
April 1991
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
PRACTICEMASTER IS A REGISTERED TRADEMARK OF DATABASICS. ALL RIGHTS RESERVED.
PREPARED 2 DECEMBER, 1998
<PAGE>
<TABLE>
<CAPTION>
THE USERS
---------
<S> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------------------------
Lynwood Veterinary Hospital Mr M Bennett Mixed Animal Tel: Multi-User
Unit 6 - 7 01929 552692 PRACTICEMASTER System supporting three
Leanne Business Centre terminals, also providing the branch
Sandford Lane practice with a remote dedicated BT
WAREHAM leased line link.
Dorset
BH20 4DY April 1991
- ----------------------------------------------------------------------------------------------------------------------------------
Ulwell Veterinary Surgery Mixed Animal Tel: Multi-User
87 Ulwell Road 01929 422213 PRACTICEMASTER System running as a
Swanage remote practice over dedicated BT leased
Dorset lines. The practice is six miles away
BH19 1QU from the main computer system.
April 1991
- ----------------------------------------------------------------------------------------------------------------------------------
Fair Lane Veterinary Centre Mr P 0 Williams Mixed Animal Tel: Multi-User
Carmarthen 01267 237367 PRACTICEMASTER System supporting five
Dyfed terminals with a full colour workstation
SA31 1RX Fax: for business use.
01267 238600
May 1991
- ----------------------------------------------------------------------------------------------------------------------------------
Penrose & Partners Mr S Penrose Small Animal Tel: Multi-User
Veterinary Surgeons 01206 842608 PRACTICEMASTER System supporting three
70 Brinkley Lane terminals.
Highwoods Fax:
Colchester 01206 853280 May 1991
Essex
C04 4XE
- ----------------------------------------------------------------------------------------------------------------------------------
Rosemary Avenue Veterinary Miss M B Wilson Small Animal Tel: PRACTICEMASTER POS System
Surgery 0181 366 0634
Rosemary Avenue July 1991
Enfield
Middlesex
EN2 0SP
- ----------------------------------------------------------------------------------------------------------------------------------
Archenfield Veterinary Surgery Mr C Lloyd Mixed Animal Tel: Single-User PRACTICEMASTER
Archenfield Road 01989 562115 System
Ross on Wye
Herefordshire August 1991
HR9 5AZ
- ----------------------------------------------------------------------------------------------------------------------------------
The Globe Veterinary Surgery Mr D Jones Mixed Animal Tel: Multi User
115 High Street 01594 824416 PRACTICEMASTER System Supporting a
Cinderford networked PC running PracticeMaster
Gloucestershire PAGE, DATAVIEW, NETVIEW and PRACTICEVIEW
GL14 2TB SCO Enterprise
August 1991
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
PRACTICEMASTER IS A REGISTERED TRADEMARK OF DATABASICS. ALL RIGHTS RESERVED.
PREPARED 2 DECEMBER, 1998
<PAGE>
<TABLE>
<CAPTION>
THE USERS
---------
<S> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------------------------
Evergreen Practitioners in Mr & Mrs P Ding Mixed Animal Tel: Multi-User
Veterinary Care 01625 859019 PRACTICEMASTER System supporting two
63 London Road South terminals.
Poynton Fax:
Cheshire 01625 850544 October 1991
SK12 1LA
- ----------------------------------------------------------------------------------------------------------------------------------
Harrington Lodge Mr & Mrs AJ Small Animal Tel: Multi-User
Veterinary Surgeons Harrington 0121 783 2327 PRACTICEMASTER System supporting five
64 Coleshill Road colour terminals with a full colour
Hodge Hill Fax: workstation for business use.
Birmingham 0121 789 9586
B36 8AB December 1991
- ----------------------------------------------------------------------------------------------------------------------------------
Macleod Allan & Taylor Mr M Allan Mixed Animal Tel: Multi-User
Veterinary Surgeons 01534 854839 PRACTICEMASTER System supporting an
Oak Farm Veterinary Surgery additional terminal. With a telephone
Rue du Hocq Fax: modem link to the branch practices.
St Clement 01534 857048
JERSEY December 1991
Channel Islands
- ----------------------------------------------------------------------------------------------------------------------------------
REC Butler Mr REC Butler Mixed Animal Tel: PRACTICEMASTER POS
Veterinary Surgeon 0161 480 2292
73 Reddish Lane January 1992
Gorton
Manchester
M18 7JH
- ----------------------------------------------------------------------------------------------------------------------------------
Spinney Lodge Veterinary Mr R Barron Mixed Animal Tel: Multi-User
Hospital 01604 648221 PRACTICEMASTER System supporting three
491 Kettering Road terminals, and a direct link via a dial
Northampton Fax: up BT telephone line to the branch
Northamptonshire 01604 647913 surgery
NN3 6QW
January 1992
- ----------------------------------------------------------------------------------------------------------------------------------
The Veterinary Surgery Mr D Woodward Mixed Animal Tel: Multi-User
South Street 01530 412035 PRACTICEMASTER System supporting four
Ashby De-La-Zouch terminals, and a direct link via a dial
Leicestershire Fax: up BT telephone line to the branch
LE65 1BR 01530 560070 surgery
January 1992
- ----------------------------------------------------------------------------------------------------------------------------------
The Veterinary Clinic Mr J Bower Small Animal Tel: Multi-User
Colwill Road 01752 702646 PRACTICEMASTER System supporting a
Estover PRACTICEMASTER POS unit and five
Plymouth Fax: terminals.
Devon 01752 773305
PL6 8RP January 1992
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
PRACTICEMASTER IS A REGISTERED TRADEMARK OF DATABASICS. ALL RIGHTS RESERVED.
PREPARED 2 DECEMBER, 1998
<PAGE>
<TABLE>
<CAPTION>
THE USERS
---------
<S> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------------------------
The Park Veterinary Practice Mr GM Covarr Small Animal Tel: Multi-User
2 Grand Drive 0181 542 4524 PRACTICEMASTER System featuring a hybrid
Raynes Park Unix/MS-DOS/Windows network, supporting
London Fax: five workstations (three of these are
SW20 OJT 0181 543 0984 portable computers).
March 1992
- ----------------------------------------------------------------------------------------------------------------------------------
Avonvale Veterinary Group Mrs A White Small Animal Tel: Multi-User
27 Cape Road 01926 400255 PRACTICEMASTER System supporting three
Warwick terminals and a full colour work station
Warwickshire for business use, with a direct link into
CV34 4JP PRACTICEMASTER.
April 1992
- ----------------------------------------------------------------------------------------------------------------------------------
Ms WA Lane Ms WA Lane Small Animal Tel: Multi-User
264 Bury Road 01706 43617 PRACTICEMASTER System supporting four
Rochdale terminals and a full colour workstation
Lancashire running windows.
OL11 4EE
April 1992
- ----------------------------------------------------------------------------------------------------------------------------------
McCaig & Davies Mr D Raveh Mixed Animal Tel: Multi-User
Putlands Veterinary Surgery 01892 835456 PRACTICEMASTER System supporting eight
Maidstone Road terminals with a full colour workstation
Paddock Wood Fax: for business graphics, spreadsheets etc.
Tonbridge 01892 838164
Kent The practice also has a direct link via
TN12 6DZ a BT dedicated leased line link to the
branch surgery eight miles away.
The practice also runs a full suite of
integrated accounts.
April 1992
- ----------------------------------------------------------------------------------------------------------------------------------
Armac Veterinary Clinic Mr B Hunter Small Animal Tel: Multi-User
147 The Rock and Equine 0161 764 4618 PRACTICEMASTER System supporting four
Bury terminals with a full colour workstation
Lancashire for business graphics, spreadsheets etc.
BL9 OND
June 1992
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
PRACTICEMASTER IS A REGISTERED TRADEMARK OF DATABASICS. ALL RIGHTS RESERVED.
PREPARED 2 DECEMBER, 1998
<PAGE>
THE USERS
---------
<TABLE>
<S> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
Hubbard & Williams Mrs G Hubbard Mixed Animal Tel: PRACTICEMASTER POS an
Veterinary Surgeons 01286 673026 additional terminal
Cibyn Veterinary Centre
Caernarfon June 1992
Gwynedd
LL55 2HH
- ------------------------------------------------------------------------------------------------------------------------------------
Brook House Veterinary Hospital Mrs E Abraham Small Animal 01703 228570 PRACTICEMASTER POS System supporting a
12 Landguard Road two terminals.
Southampton
Hampshire June 1992
S015 5RJ
- ------------------------------------------------------------------------------------------------------------------------------------
Fielding & Cumber Mr D Cumber Mixed Animal Tel: Multi-User
Veterinary Surgeons 01305 784197 PRACTICEMASTER System supporting four
176-178 Chickerell Road terminals with a full colour workstation
Weymouth for business graphics, spreadsheets etc.
Dorset
DT4 OQR The practice also has a direct link via
a ISDN dedicated leased line link to the
branch surgery six miles away.
The practice also runs a full
suite of integrated accounts. And has
a networked PC providing
PracticeMaster PAGE and DATAVIEW.
SCO Enterprise
July 1992
- ------------------------------------------------------------------------------------------------------------------------------------
Overdale Veterinary Centre Mr DJ Hopkins Mixed Animal Tel: PRACTICEMASTER POS System supporting an
New Market Street 01298 23499 additional terminal with a full colour
Buxton workstation for integrated accounts.
Derbyshire
SK17 6LP September 1992
- ------------------------------------------------------------------------------------------------------------------------------------
Wright & Morten Mr M Spicer Mixed Animal Tel: Multi-User
18 Moody Street 01260 273222 PRACTICEMASTER System supporting two
Congleton terminals with a direct BT leased link
Cheshire to the main surgery five miles away.
CW12 4AP SCO Enterprise
September 1992
- ------------------------------------------------------------------------------------------------------------------------------------
The Avenue Veterinary Group Mr D MacCuish Small Animal Tel: PRACTICEMASTER POS System supporting an
241 Bingley Road 01274 583397 additional terminal with a full colour
Shipley workstation.
West Yorkshire Fax: With BT Leased Line Link to
BD18 4DN 01274 599737 branch surgery 6 miles away.
Incorporating PC providing
PracticeMaster PAGE.
SCO Enterprise
October 1992
- ------------------------------------------------------------------------------------------------------------------------------------
PRACTICEMASTER IS A REGISTERED TRADEMARK OF DATABASICS. ALL RIGHTS RESERVED.
PREPARED 2 DECEMBER, 1998
<PAGE>
THE USERS
---------
- ------------------------------------------------------------------------------------------------------------------------------------
The Avenue Veterinary Group Mr D MacCuish Small Animal Tel: PRACTICEMASTER POS Supporting terminals
31 Park Road 01274 510868 with a BT Leased Line Link to main
Bingley surgery 6 miles away.
West Yorkshire SCO Enterprise
BD16 4BL October 1992
- ------------------------------------------------------------------------------------------------------------------------------------
Abbey Veterinary Centre Mr IC Chadwick Small Animal Tel: PRACTICEMASTER POS System, supporting an
93 Conway Drive 01772 718774 a full colour workstation.
Fulwood
Preston October 1992
Lancashire
PR2 3ER
- ------------------------------------------------------------------------------------------------------------------------------------
Oakbeck Veterinary Clinic Mr RD Partridge Small Animal Tel: Multi-User
Oakbeck Way 01423 561414 PRACTICEMASTER System supporting seven
Skipton Road terminals and a direct link via BT leased
Harrogate Fax: link to the branch surgery a mile away
North Yorkshire 01423 521550
HG1 3HU December 1992
- ------------------------------------------------------------------------------------------------------------------------------------
Cedar Veterinary Group Mr D Coombes Mixed Animal Tel: Multi-User
69 Christchurch Road 01425 473683 PRACTICEMASTER System supporting seven
Ringwood terminals with a direct BT leased link
Hampshire Fax: to the branch practices two and three
BH24 1DH 01425 480849 miles away.
January 1993
- ------------------------------------------------------------------------------------------------------------------------------------
Cedar Veterinary Group Mr C Trickey Mixed Animal Tel: Multi-User PRACTICEMASTER
The Ferndown and Westmoors 01202 861622 System with a direct BT leased link to
Surgery the branch practices two and three miles
522 Wimborne Road East away.
Ferndown
Dorset January 1993
- ------------------------------------------------------------------------------------------------------------------------------------
Cedar Veterinary Group Mr D Coombes Mixed Animal Tel: Single-User PRACTICEMASTER System with a
17 Ringwood Road 01202 825217 direct BT leased link to the branch
Verwood practices two and three miles away.
Dorset
BH21 6AA January 1993
- ------------------------------------------------------------------------------------------------------------------------------------
The Croft Veterinary Centre Mr A Dick Mixed Animal Tel: PRACTICEMASTER POS System supporting two
122 Banbury Road 01280 703451 terminals and a full colour workstation
BRACKLEY for business use.
Northamptonshire
NN13 6BH
January 1993
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
PRACTICEMASTER IS A REGISTERED TRADEMARK OF DATABASICS. ALL RIGHTS RESERVED.
PREPARED 2 DECEMBER, 1998
<PAGE>
<TABLE>
<CAPTION>
THE USERS
---------
<S> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
Forest Veterinary Clinic Mr J Adams Small Animal Tel: PRACTICEMASTER POS System supporting an
7 Park Road 01425 652221 additional terminal and a full colour
Fordingbridge workstation for business use.
Hampshire
SP6 1EQ January 1993
- ------------------------------------------------------------------------------------------------------------------------------------
David F Wadsworth Mr D Wadsworth Small Animal Tel: Multi-User
Veterinary Surgeon 01253 357380 PRACTICEMASTER System supporting five
94 Norbreck Road terminals with a workstation for
BLACKPOOL Fax: business use.
Lancashire 01253 857503
FY5 1RP April 1993
- ------------------------------------------------------------------------------------------------------------------------------------
Clifford & Watts Mr P Clifford Small Animal Tel: PRACTICEMASTER POS System supporting a
Veterinary Surgeons 0121 426 4343 full colour workstation for business use.
235 Hagley Road
EDGBASTON May 1993
Birmingham
West Midlands
B16 9RR
- ------------------------------------------------------------------------------------------------------------------------------------
The Children's Hospital Carolyn Patchell Special Feed Specialised Pharmacy Labelling Software
Special Feed Unit Unit for use in the special feed unit at The
Ladywood Middleway Birmingham Children's Hospital.
Ladywood
Birmingham
B16 8ET
- ------------------------------------------------------------------------------------------------------------------------------------
Catton Veterinary Clinic Mr J Langberg Small Animal Tel: Multi-User
294 Constitution Hill 01603 426310 PRACTICEMASTER System supporting three
NORWICH terminals and an Office based colour
Norfolk Fax: workstation for business use.
NR6 7RF 01603 400798
June 1993
- ------------------------------------------------------------------------------------------------------------------------------------
The Veterinary Surgery Mr A Krasno Small Animal Tel: Multi-User
16 The Street and Equine 01256 29522 PRACTICEMASTER System supporting four
OLD BASING terminals and an Office based colour
Basingstoke Fax: workstation for business use.
Hampshire 01256 332622
RG24 7BW June 1993
- ------------------------------------------------------------------------------------------------------------------------------------
Prospect Veterinary Centre Mr & Mrs C & E Small Animal Tel: PRACTICEMASTER POS System supporting
1 Wakefield Road Dale 01422 833960 dispensing operating area terminals and
Sowerby Bridge full colour workstation for business use.
West Yorkshire Fax:
HX6 2AP 01422 839093 July 1993
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
PRACTICEMASTER IS A REGISTERED TRADEMARK OF DATABASICS. ALL RIGHTS RESERVED.
PREPARED 2 DECEMBER, 1998
<PAGE>
<TABLE>
<CAPTION>
THE USERS
---------
<S> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
Riverside Veterinary Centre Mr G Davies Mixed Animal Tel: Multi-User
60 Brecon Road 01873 857544 PRACTICEMASTER System supporting two
Abergavenny terminals with a direct BT leased link
Gwent to the branch practice six miles away.
South Wales SCO Open Server
NP7 7RB August 1993
- ------------------------------------------------------------------------------------------------------------------------------------
Avenue Veterinary Hospital Mr ASM Gordon Mixed Animal Tel: Multi User
33 St. Peters Avenue 01536 514511 PRACTICEMASTER System supporting 4
Kettering terminals and workstation for business
Northamptonshire Fax: use
NN16 OHB 01536 517408
August 1993
- ------------------------------------------------------------------------------------------------------------------------------------
Kydd & Kydd Mr M Kydd Small Animal Tel: Multi User
Veterinary Surgeons 0181 672 2344 PRACTICEMASTER System supporting two
67 Upper Tooting Park terminals a full colour workstation for
Tooting integrated accounts and word processing
London with graphics and spreadsheets
SW17 7SU SCO Open Server
September 1993
- ------------------------------------------------------------------------------------------------------------------------------------
The Hart Veterinary Centre Mr I Hart Small Animal Tel: Multi-User
Browning Drive and Equine 01869 323223 PRACTICEMASTER System supporting four
Kings Meadow terminals with a workstation for
Bicester Fax: business use
Oxfordshire 01869 325223
OX6 8XL September 1993
- ------------------------------------------------------------------------------------------------------------------------------------
Frank Tobin Frank Tobin Pig Practice Tel: PRACTICEMASTER LABELLER Enhanced
Veterinary Surgeon 01653 696606 pharmacy labelling system.
12 Orchard Road
Malton Fax: October 1993
North Yorkshire 01653 697608
YO17 OBH
- ------------------------------------------------------------------------------------------------------------------------------------
Mr J Stewart John Stewart Equine Tel: Single-User
Veterinary Surgeon 01962 777577 PRACTICEMASTER System
The Flat
High Green Garage October 1993
Whaddon Lane
Owslebury
Nr. Winchester
Hampshire
S021 1JJ
- ------------------------------------------------------------------------------------------------------------------------------------
The George Veterinary Hospital Sue Fereday Mixed Animal Tel: PRACTICEMASTER LABELLER Basic Pharmacy
High Street 01666 823165 Labelling System
Malmesbury
Wiltshire Fax:
SN16 9AU 01666 824662 October 1993
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
PRACTICE MASTER IS A REGISTERED TRADEMARK OF DATABASICS. ALL RIGHTS RESERVED.
PREPARED 2 DECEMBER, 1998
<PAGE>
<TABLE>
<CAPTION>
THE USERS
---------
<S> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
Barnfield House Mrs EML Gardner Small Animal Tel: Multi-User
Veterinary Centre 0181 427 7360 PRACTICE MASTER System supporting four
405 Pinner Road terminals and a colour workstation for
Harrow Fax: integrated accounts and word processing
Middlesex 0181 424 0988 with graphics and spreadsheets
HA1 4HN
November 1993
- ------------------------------------------------------------------------------------------------------------------------------------
The Wingrave Mrs J Phillips Small Animal Tel: Multi-User
Veterinary Hospital 0181 642 5662 PRACTICEMASTER System supporting three
84 Mulgrave Road terminals and a colour workstation for
Sutton intergrated accounts and word processing
Surrey with graphics and spreadsheets
SM2 6LZ
November 1993
- ------------------------------------------------------------------------------------------------------------------------------------
Mr JC Gilliver BVSc MRCVS Mrs J Gilliver Mixed Animal Tel: Single-User
Garwood 01257 483161 PRACTICEMASTER System
Bolton Road
Anderton Fax: December 1993
Nr Chorley 01257 474671
Lancashire
PR6 9HN
- ------------------------------------------------------------------------------------------------------------------------------------
Treforest Veterinary Clinic Mr G Marshall Small Animal Tel: Single-User
16 River Street 0443 492755 PRACTICEMASTER System
Treforest
Pontypridd Fax: February 1994
Mid Glamorgan 01443 485608
CF37 1TD
- ------------------------------------------------------------------------------------------------------------------------------------
The Defence Animal Centre Small Animal Multi-User
Elmhurst Avenue "Militarised" Multi-User PRACTICEMASTER
Melton Mowbray System, based on a Unix network supporting
Leicestershire three workstations. "Windows for
LE13 0SL Workgroups" furnishes "Windows" on all
screens, whilst "Microsoft Access"
provides the specialised analytical
facilities that the Armed Services
require.
February 1994
- ------------------------------------------------------------------------------------------------------------------------------------
Macleod Allan & Taylor Mr P Taylor Mixed Animal Tel: Multi-User
Veterinary Surgeons 01534 43580 PRACTICEMASTER System supporting an
Sommet Vert additional terminal. With a telephone
Route des Gentes modem link to the branch practices.
St Brelade
JERSEY March 1994
Channel Islands
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
PRACTICE MASTER IS A REGISTERED TRADEMARK OF DATABASICS. ALL RIGHTS RESERVED.
PREPARED 2 DECEMBER, 1998
<PAGE>
<TABLE>
<CAPTION>
THE USERS
---------
<S> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
Macleod Allan & Taylor Mr I Macleod Mixed Animal Tel: Multi-User
Veterinary Surgeons 01534 482202 PRACTICEMASTER System supporting an
Ballantree additional terminal. With a telephone
St Mary modem link to the branch practices.
JERSEY
Channel Islands March 1994
- ------------------------------------------------------------------------------------------------------------------------------------
The Veterinary Surgery Mr RAH Bannock Small Animal Tel: Multi-User
258 Fakenham Road 01603 867330 PRACTICEMASTER System supporting two
Taverham terminals with a workstation for
Norwich business use
Norfolk
NR8 6QW March 1994
- ------------------------------------------------------------------------------------------------------------------------------------
Mr NS Maxwell MRCVS Mr NS Maxwell Small Animal Tel: Single-User
Lady Margaret House 0161 773 1198 PRACTICEMASTER POS System running
St. Ann's Road under Xenix with an MS-DOS partition
Prestwich facilitating the use of various
Manchester ancillary software packaging when
M25 8PF required.
May 1994
- ------------------------------------------------------------------------------------------------------------------------------------
Prospect House Veterinary Clinic Mr N Dickinson Mixed Animal Tel: PRACTICEMASTER POS System supporting
110 Abergele Road 01492 531448 an additional terminal.
Colwyn Bay
Clwyd Fax:
LL29 7PS 01492 531448 May 1994
- ------------------------------------------------------------------------------------------------------------------------------------
Ridgway Veterinary Centre Mr PM Burns Mixed Animal Tel: Multi-User
47 The Ridgway 01525 714892 PRACTICEMASTER System featuring a hybrid
Flitwick Unix/MS-DOS/Windows network, supporting
Bedford Fax: eight workstations (two of these are
Bedfordshire 01525 717024 portable computers).
MK45 1DJ
Ridgway Referrals Tel: The practice also runs a full set of
47 The Ridgway 01525 715044 integrated accounts from its branch
Flitwick office 5 miles away. The office also
Bedford Fax: has the added benefit of a telephone
Bedfordshire 01525 717024 modem link direct to the main practice.
MK45 1DJ
June 1994
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
PRACTICEMASTER IS A REGISTERED TRADEMARK OF DATABASICS. ALL RIGHTS RESERVED.
PREPARED 2 DECEMBER, 1998
<PAGE>
<TABLE>
<CAPTION>
THE USERS
---------
<S> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
McCaig & Davies Mr E Davies Mixed Animal Tel: Multi-User
The Veterinary Surgery 01622 759761 PRACTICEMASTER System supporting five
Northumberland Road terminals with a full colour workstation
Maidstone for business graphics, spreadsheets etc.
Kent
ME15 7LN The practice also has a direct link via
a BT dedicated leased line link to the
main practice eight miles away.
The practice also runs a full suite of
integrated accounts.
June 1994
- ------------------------------------------------------------------------------------------------------------------------------------
Arvonia Veterinary Surgery Mr G Mewha- Small Animal Tel: Multi-User
35 Wards Road Williams 01242 583438 PRACTICEMASTER POS System, supporting
Hatherley an additional terminal
Cheltenham
Gloucestershire July 1994
GL51 6JN
- ------------------------------------------------------------------------------------------------------------------------------------
Lewis-Jones & Associates Mrs CA Lewis-Jones Mixed Animal Tel: PRACTICEMASTER LABELLER
5 High Street 01404 42657 Enhanced Pharmacy Labelling System
Honiton
Devon July 1994
EX14 8PR
- ------------------------------------------------------------------------------------------------------------------------------------
Booth Hall Children's Hospital Miss A Coates Special Feed Specialised Pharmacy
Dietary Department Unit labelling Software for use in the
Charlestown Road special feed unit.
Blackley
Manchester
- ------------------------------------------------------------------------------------------------------------------------------------
Haven Veterinary Hospital Mr A Robinson Mixed Animal Tel: Multi-User
35 Holland Road 01255 422150 PRACTICEMASTER POS system supporting
Clacton On Sea dispensary based terminal and office
Essex based workstation. Linked to branch
CO15 6EH by high speed modem.
August 1994
- ------------------------------------------------------------------------------------------------------------------------------------
Haven Veterinary Practice Mr PDR Gard Mixed Animal Tel: Multi-User
138 Elm Tree Avenue 01255 850458 PRACTICEMASTER POS system supporting
Walton-on-the-Naze dispensary based terminal and linked
Frinton to main practice by high speed modem.
Essex
CO13 0AR August 1994
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
PRACTICEMASTER IS A REGISTERED TRADEMARK OF DATABASICS. ALL RIGHTS RESERVED.
PREPARED 2 DECEMBER, 1998
<PAGE>
<TABLE>
<CAPTION>
THE USERS
---------
<S> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
Archway Veterinary Surgery Mr S Wolfensohn Small Animal Tel: Multi-User
21 High Street 01793 765335 PRACTICEMASTER POS System supporting two
Highworth full colour work stations with a direct
Swindon link into PRACTICEMASTER.
SN6 7AG
September 1994
- ------------------------------------------------------------------------------------------------------------------------------------
Archway Veterinary Surgery Mr S Wolfensohn Small Animal Tel: Single-User
30 Devizes Road 01793 812542 PRACTICEMASTER POS System.
Wroughton
Swindon September 1994
Wiltshire
SN4 0RZ
- ------------------------------------------------------------------------------------------------------------------------------------
Abington Park Vet Surgery Mr N Anthony Small Animal Tel: Multi-User
Abington Park Parade 01604 28685 PRACTICEMASTER System supporting eight
427 Wellingborough Road terminals with two workstation's for
Northampton Fax: business use. And a Networked PC
Northamptonshire 01604 232189 providing PracticeMaster PAGE SCO
NN1 4EZ Enterprise
September 1994
- ------------------------------------------------------------------------------------------------------------------------------------
The Shrubbery Vet Centre Mr D Mason Small Animal Tel: Single-User
65 Perry Street 01474 333141 PRACTICEMASTER POS System.
Gravesend
Kent October 1994
DA11 8RD
- ------------------------------------------------------------------------------------------------------------------------------------
Burnham House Vet Surgery Mr J Stattersfield Mixed Animal Tel: Multi-User
33 Castle Street 01304 206989 PRACTICEMASTER POS System supporting
Dover five terminals, and Office based
Kent Fax: workstation running accounting, word
CT16 1PT 01304 225622 processing, graphics and spreadsheet
software. Linked by BT line to branch
practice.
October 1994
- ------------------------------------------------------------------------------------------------------------------------------------
Havelock House Vet Surgery Mr J Stattersfield Mixed Animal Tel: Multi-User
106 Dover Road 01304 206989 PRACTICEMASTER POS System supporting two
Folkestone terminals with BT link to the main
Kent Fax: practice 11 miles away.
CT20 1NN 01304 225622
October 1994
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
PRACTICEMASTER IS A REGISTERED TRADEMARK OF DATABASICS. ALL RIGHTS RESERVED.
PREPARED 2 DECEMBER, 1998
<PAGE>
<TABLE>
<CAPTION>
THE USERS
---------
<S> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
Agecroft Veterinary Centre Mr J Arndt Small Animal Tel: Multi-User
1 The Parade 0161 430 5445 PRACTICEMASTER POS System
The Ridgeway
Bredbury Green December 1994
Romiley
Stockport
Cheshire
- ------------------------------------------------------------------------------------------------------------------------------------
The Veterinary Health Centre Mrs S Whitehead Small Animal Tel: Multi-User
19 Alexandra Road 01253 729309 PRACTICEMASTER System supporting two
St Annes on Sea consulting room terminals
Lancashire
FY8 1YD January 1995
- ------------------------------------------------------------------------------------------------------------------------------------
Penrose & Partners Mr S Penrose Small Animal Tel: Multi-User
Peelers End 01206 323414 PRACTICEMASTER POS System Supporting
Upper Street an additional terminal
Stratford St Mary
Essex February 1995
CO7 6LW
- ------------------------------------------------------------------------------------------------------------------------------------
Island Veterinary Clinic Mr C Walster Small Animal Tel: Multi-User
132 Lichfield Road 01785 258411 PRACTICEMASTER System supporting two
Stafford terminals and an Office based
Staffordshire Fax: workstation
ST17 4LE 01785 258416
March 1995
- ------------------------------------------------------------------------------------------------------------------------------------
Andrew Melling Mr A Melling Large Animal Tel: Multi-User
Veterinary Surgeon and Equine 01204 668979 PRACTICEMASTER System supporting two
The Mews House additional workstations
7 Lee Lane
Horwich March 1995
Bolton
Lancashire
BL6 7BP
- ------------------------------------------------------------------------------------------------------------------------------------
Thistle Veterinary Health Centre Mr & Mrs Urquhart Small Animal Tel: Multi-User
398 Gorgie Road 0131 337 3700 PRACTICEMASTER System supporting two
Edinburgh terminals with a TeleWest Fibre Optic
Scotland link to the main practice 4 miles away
EH11 2RY
March 1995 and December 1996
- ------------------------------------------------------------------------------------------------------------------------------------
Wright & Morten Mr MC Spicer Mixed Animal Tel: Multi-User
Veterinary Surgeons 01625 524422 PRACTICEMASTER System supporting two
Thorndale Veterinary Surgery terminals with BT link to the main
19 Hawthorne Lane practice 7 miles away.
Wilmslow
Cheshire March 1995
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
PRACTICE MASTER IS A REGISTERED TRADEMARK OF DATABASICS. ALL RIGHTS RESERVED.
PREPARED 2 DECEMBER, 1998
<PAGE>
<TABLE>
<CAPTION>
THE USERS
---------
<S> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
Chalks Road Veterinary Clinic Mr J Wormald Small Animal Tel: Multi-User
31 Lyndale Road 01179 520645 PRACTICEMASTER POS System supporting
St George two terminals
Bristol
Avon May 1995
BS5 7AA
- ------------------------------------------------------------------------------------------------------------------------------------
The Veterinary Centre Ms M Nardini Small Animal Tel: Multi-User
45 Stewarton Street 01698 361136 PRACTICEMASTER POS System supporting
Wishaw an additional consulting room
Lanarkshire Fax: terminal
ML2 9BW 01698 361136
May 1995
- ------------------------------------------------------------------------------------------------------------------------------------
Avonvale Veterinary Group Mr M Collins Small Animal Tel: Multi-User
88 Coventry Street 01926 812826 PRACTICEMASTER System supporting four
Southam terminals
Leamington Spa
Warwickshire June 1995
CV33 0EL
- ------------------------------------------------------------------------------------------------------------------------------------
Penbode Veterinary Group Mr A Cobner Mixed Animal Tel: Multi-User
North Road 01409 253418 PRACTICEMASTER System supporting
Holsworthy eight terminals. With a telephone
Devon modem link to the branch practices.
EX22 6AZ
June 1995
- ------------------------------------------------------------------------------------------------------------------------------------
Penbode Veterinary Group Mrs CL Davies Mixed Animal Tel: Multi-User
Horizon View 01288 353766 PRACTICEMASTER System supporting
Hillhead eight terminals. With a telephone
Stratton modem link to the branch practices.
Cornwall
EX23 9AB June 1995
- ------------------------------------------------------------------------------------------------------------------------------------
Penbode Veterinary Group Mr A Cobner Mixed Animal Tel: Multi-User PRACTICEMASTER System
Ashleigh House 01409 241241 supporting two terminals With a
Bradworthy telephone modem link to the branch
Holsworthy practices.
Devon
EX22 7SZ June 1995
- ------------------------------------------------------------------------------------------------------------------------------------
Castle View Veterinary Clinic Mr SP Hall-Patch Mixed Animal Tel: Multi-User
19 Belle Vue Road 01924 257580 PRACTICEMASTER System supporting two
Sandal consulting room Terminals
Wakefield Fax:
West Yorkshire 01924 258624 August 1995
WF1 5NF
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
PRACTICE MASTER IS A REGISTERED TRADEMARK OF DATABASICS. ALL RIGHTS RESERVED.
PREPARED 2 DECEMBER, 1998
<PAGE>
<TABLE>
<CAPTION>
THE USERS
---------
<S> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
Broad Lane Veterinary Centre Mr R Hands Small Animal Tel: Multi-User
255 Broad Lane 01203 464789 PRACTICEMASTER POS System supporting
Coventry supplementary reception terminal and
West Midlands office based work station
CV5 7AQ
August 1995
- ------------------------------------------------------------------------------------------------------------------------------------
Heathfield Veterinary Hospital Mr AJ Butler Small Animal Tel: Multi-User
148 Heath Road 0181 892 6300 PRACTICEMASTER System supporting
Twickenham three terminals and a PRACTICEMASTER
Middlesex POINT Workstation with integrated
TW1 4BN IBM Word Processing package. Linked to
branch practice by High Speed Modem
September 1995
- ------------------------------------------------------------------------------------------------------------------------------------
Dene Park Veterinary Surgery Mr AJ Butler Small Animal Tel: Multi-User
1 Green Parade 0181 898 0008 PRACTICEMASTER system supporting
Whitton Road consulting room terminal. High Speed
Hounslow Modem Link to main branch
Middlesex
TW3 2EN September 1995
- ------------------------------------------------------------------------------------------------------------------------------------
Mr I Haworth Mr I Haworth Small Animal Tel: Multi-User
Veterinary Surgeon 01628 611526 PRACTICEMASTER POS System
66/68 Mill Lane supporting an additional terminal.
Macclesfield
Cheshire November 1995
SK11 7NR
- ------------------------------------------------------------------------------------------------------------------------------------
David Finlay Mr D Finlay Small Animal Tel: Multi-User
Veterinary Surgeon 01324 570501 PRACTICEMASTER system supporting a
176 King Street Consulting room Terminal.
Stenhousemuir Fax: The practice has a dedicated BT Leased
Central 01324 570676 Line link to the main practice 6
FK5 4HT miles away
December 1995
- ------------------------------------------------------------------------------------------------------------------------------------
E C Straiton & Partners Mr EC Straiton Mixed Animal Tel: Single-User PRACTICEMASTER POS
Veterinary Hospital 01785 712235 Large Animal System.
Cannock Road
Penkridge December 1995
Stafforshire
ST19 5RY
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
PRACTICE MASTER IS A REGISTERED TRADEMARK OF DATABASICS. ALL RIGHTS RESERVED.
PREPARED 2 DECEMBER, 1998
<PAGE>
<TABLE>
<CAPTION>
THE USERS
---------
<S> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
Pierce & Pierce Veterinary Mrs Pierce Mixed Animal Tel: Multi-User
Surgeons 01676 535033 PRACTICEMASTER POS
132 Station Road System.
Balsall Common
West Midlands January 1996
CV7 7FF
- ------------------------------------------------------------------------------------------------------------------------------------
The Veterinary Hospital Mr CJ Button Small Animal Tel: Multi-User
169-170 High Street 01502 572141 PRACTICEMASTER System supporting
Lowestoft supplementary terminals in reception and
Suffolk Fax: two consulting rooms, together with
NR23 1HU 01502 589909 prep-room and office based work stations.
April 1996
- ------------------------------------------------------------------------------------------------------------------------------------
Wombrook Veterinary Centre Mr A Stevens Small Animal Tel: Multi-User
56 Rookery Road 01902 324551 PRACTICEMASTER System supporting 2
Wombourne consulting room terminals
Wolverhampton
West Midlands April 1996
WV5 0JQ
- ------------------------------------------------------------------------------------------------------------------------------------
Companion Care Veterinary Mr P Eville or Small Animal Tel: Multi-User
Centre Mr R Jones 0113 255 9992 PRACTICEMASTER System supporting
Crawshaw Hill supplementary terminals in reception and
Pudsey Fax: two consulting rooms, together with
Leeds 0113 289 0048 prep-room and office based work station.
LS28 7BW
July 1996
- ------------------------------------------------------------------------------------------------------------------------------------
Charter Veterinary Surgeons Mrs Mary Woodruff Mixed Animal Tel: Multi-User
16 West Road 01260 273449 PRACTICEMASTER POS System supporting a
Congleton dispensary workstation for pharmacy
Cheshire Fax: labelling
CW12 4ER 01260 299671
September 1996
- ------------------------------------------------------------------------------------------------------------------------------------
Ark-Aid Veterinary Centre Mrs S Wheeler Small Animal Tel: Multi-User
7a Neighbourhood Centre 01202 602766 PRACTICEMASTER System supporting
Culliford Crescent supplementary terminals in reception and
Canford Heath two consulting rooms.
Poole
Dorset September 1996
BH17 9DW
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
PRACTICEMASTER IS A REGISTERED TRADEMARK OF DATABASICS. ALL RIGHTS RESERVED.
PREPARED 2 DECEMBER, 1998
<PAGE>
<TABLE>
<CAPTION>
THE USERS
---------
<S> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
Elm Cottage Veterinary Centre Della Barbour Mixed Animal Tel: Multi-User
28 Outland Road 01752 567567 PRACTICEMASTER System supporting
Plymouth supplementary workstation's, with a
Devon Fax: direct link into Idex Laboratory
PL2 3DF 01752 607545 Machine.
October 1996
- ------------------------------------------------------------------------------------------------------------------------------------
Ridgway Veterinary Centre Phil Burns Small Animal Tel: Single-User
60 St John's Street 01234 853387 PRACTICE MASTER System
Bedford
Bedfordshire December 1996
MK42 8ES
- ------------------------------------------------------------------------------------------------------------------------------------
Thistle Veterinary Health Centre Mr & Mrs Urquhart Small Animal Tel: Multi-User
1 Alcorn Rigg 0131 453 6699 PRACTICEMASTER System supporting seven
Clovenstone Drive terminals and two workstations for
Edinburgh business use and graphics applications.
Scotland The practice also has a TeleWest Fibre
EH14 3BF Optic link directly to the branch
practice 4 miles away
December 1996
- ------------------------------------------------------------------------------------------------------------------------------------
DC Woodward Veterinary Mr D Woodward Small Animal Tel: Single User
Surgeon 01283 210858 PRACTICEMASTER System with a dial up BT
3 Burton Road Telephone line to the main surgery 6
Woodville miles away.
Swadlincote
Derbyshire May 1996
DE22 7JE
- ------------------------------------------------------------------------------------------------------------------------------------
Spinney Lodge Veterinary Mr R Barron Mixed Animal Tel: Single User
Hospital 01604 760970 PRACTICEMASTER System with a dial up
Branch Surgery BT Telephone line to the main surgery 3
The Abbey Centre miles away.
Overslade Close
East Hunsbury May 1996
Northampton
NN4 0RZ
- ------------------------------------------------------------------------------------------------------------------------------------
Avonvale Veterinary Group Mr G Thorpe Small Animal Tel: Multi-User
29 Warwick Road 01789 841072 PRACTICEMASTER System supporting three
Wellsbourne terminals and a workstation for Business
Warwickshire Fax: use.
CV35 9NA 01789 841956
June 1996
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
PRACTICEMASTER IS A REGISTERED TRADEMARK OF DATABASICS. ALL RIGHTS RESERVED.
PREPARED 2 DECEMBER, 1998
<PAGE>
<TABLE>
<CAPTION>
THE USERS
---------
<S> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
The Dale Veterinary Clinic Mr J Glassbrook Small Animal Tel: Multi-User
313 Hesketh Lane 01772 814498 PRACTICEMASTER System supporting a
Hesketh Bank Network PC.
Preston
Lancashire June 1997
PR4 6RJ
- ------------------------------------------------------------------------------------------------------------------------------------
Fielding & Cumber Veterinary Mr D Cumber Small Animal Multi User
Surgeons PRACTICEMASTER System with a dedicated
7 South Walks Road ISDN Leased Line link to the line main
Fordington Green surgery 6 miles away.
Dorchester
Dorset June 1997
DT1 1ED
- ------------------------------------------------------------------------------------------------------------------------------------
David Finlay Emma Barratt Small Animal Tel: Multi-User
Veterinary Surgeon 01324 472915 PRACTICEMASTER system supporting three
9 Kings Road terminals. The practice has a dedicated
Grangemouth Fax: BT Leased Line link to the branch
Stirlingshire 01324 570676 practice 6 miles away
Scotland
FK3 9BB August 1997
- ------------------------------------------------------------------------------------------------------------------------------------
Balby Veterinary Centre Chris Walster Mixed Animal Tel: Multi-User
83 Springwell Lane 01302 852323 PRACTICEMASTER System supporting six
Balby workstations
Doncaster
South Yorkshire January 1998
DN4 9AD
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
PRACTICEMASTER IS A REGISTERED TRADEMARK OF DATABASICS. ALL RIGHTS RESERVED.
PREPARED 2 DECEMBER, 1998
<PAGE>
SCHEDULE III
The Stock
<PAGE>
ISL STOCK TAKE REPORT
SUMMARY SHEET
<TABLE>
<S> <C> <C>
- ---------------------------------------------------
New Parts Stock Value L40,025.88
- ---------------------------------------------------
Cables Connectors Value L 8,986.19
- ---------------------------------------------------
Field Spare Items Value L 4,325.00
- ---------------------------------------------------
Software New Stock Value L 9,963.81
- ---------------------------------------------------
Eng Field Stock Value L 6,482.49
- ---------------------------------------------------
total value L69,783.37
----------
</TABLE>
<PAGE>
END OF YEAR STOCK REPORT 26TH NOV 1998
<TABLE>
<CAPTION>
---------------------------------
New Parts Stock
- -----------------------------------------------------------------------------
Stock Unit
Location Description Quantity Cost Value
- ------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1 Wyse 55 es terminal & Keyboard 1 L245.00 L245.00
- ------------------------------------------------------------------------------
2 Epson FX 1170 printer 0 L309.00 L0.00
- ------------------------------------------------------------------------------
3 Epson LX300 printer 1 L98.00 L98.00
- ------------------------------------------------------------------------------
4 Panasonic KXP2023 0 L115.00 L0.00
- ------------------------------------------------------------------------------
5 HP6L Laser printer 0 L232.99 L0.00
- ------------------------------------------------------------------------------
6 Star 320 label printer 1 L239.00 L239.00
- ------------------------------------------------------------------------------
7 Star 312 pos printer 1 L142.00 L142.00
- ------------------------------------------------------------------------------
8 HP710 inkjet printer 0 L157.00 L0.00
- ------------------------------------------------------------------------------
9 OKI 10i Laser printer 1 L409.00 L409.00
- ------------------------------------------------------------------------------
10 Smile 15" SVGA monitor 4 L87.00 L348.00
- ------------------------------------------------------------------------------
11 Goldstar 14" SVGA monitor 0 L74.00 L0.00
- ------------------------------------------------------------------------------
12 Star Cash base Tills 12 L65.00 L780.00
- ------------------------------------------------------------------------------
13 Vasco ATX midi tower case 0 L63.00 L0.00
- ------------------------------------------------------------------------------
14 Vasco ATX full tower case 3 L85.00 L255.00
- ------------------------------------------------------------------------------
15 VLSI midi tower/Pentium pro M/board 1 L125.00 L125.00
- ------------------------------------------------------------------------------
16 OPEN mini tower ATX case 3 L62.00 L186.00
- ------------------------------------------------------------------------------
17 Industrial PC case 19" rack 1 L115.00 L115.00
- ------------------------------------------------------------------------------
18 Budget AT mini tower case 1 L15.00 L15.00
- ------------------------------------------------------------------------------
19 Budget AT desktop case 1 L15.00 L15.00
- ------------------------------------------------------------------------------
20 Genius A4 scanner 2 L57.00 L114.00
- ------------------------------------------------------------------------------
21 Vasco ATX desktop case 2 L63.00 L126.00
- ------------------------------------------------------------------------------
22 VLSI desktopAT case 1 L38.00 L38.00
- ------------------------------------------------------------------------------
23 Vasco AT mini tower case 2 L63.00 L126.00
- ------------------------------------------------------------------------------
24 Liebert 700 VA UPS 0 L235.00 L0.00
- ------------------------------------------------------------------------------
25 Leading Edge 486 systems 6 L50.00 L300.00
- ------------------------------------------------------------------------------
26 Memsolve mini tower ATX 8 L37.00 L296.00
- ------------------------------------------------------------------------------
27 SharpJX9200 laser printer 0 L167.00 L0.00
- ------------------------------------------------------------------------------
28 QMS600 laser 1 L195.00 L195.00
- ------------------------------------------------------------------------------
29 Prime 1 port print sharer 1 L123.08 L123.08
- ------------------------------------------------------------------------------
30 Prime 3 port print sharer 2 L184.62 L369.24
- ------------------------------------------------------------------------------
31 Prime 8 port ethernet hub 7 L37.95 L265.65
- ------------------------------------------------------------------------------
32 Netgear 4 port hub 1 L35.00 L35.00
- ------------------------------------------------------------------------------
33 VGA multiplex box 1 L85.00 L85.00
- ------------------------------------------------------------------------------
34 HL1000 printer cable booster 1 L65.00 L65.00
- ------------------------------------------------------------------------------
35 serial line booster 6 L34.99 L209.94
- ------------------------------------------------------------------------------
36 serial > parallel convertors 9 L59.00 L531.00
- ------------------------------------------------------------------------------
37 SMC 1660 net cards 2 L19.50 L39.00
- ------------------------------------------------------------------------------
38 SMC etherpower2 net cards 9 L64.95 L584.55
- ------------------------------------------------------------------------------
39 Prime PCI 10mb net cards 19 L12.10 L229.90
- ------------------------------------------------------------------------------
40 misc ISA net cards 3 L10.00 L30.00
- ------------------------------------------------------------------------------
41 Prime PCI 10mb net cards 10/100mb 10 L29.74 L297.40
- ------------------------------------------------------------------------------
42 Novell 2000 net cards 4 L14.50 L58.00
- ------------------------------------------------------------------------------
43 Prime ISA 10mb net cards 4 L9.24 L36.96
- ------------------------------------------------------------------------------
44 Prime 16 port ethernet hubs 2 L58.50 L117.00
- ------------------------------------------------------------------------------
45 SCIPlex multiplexors 2 L400.00 L800.00
- ------------------------------------------------------------------------------
46 ARK 16 port ethernet hubs 2 L65.00 L130.00
- ------------------------------------------------------------------------------
47 LECTOR data pen 1 L149.95 L149.95
- ------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
New Parts Stock
Unit
Location Description Quantity Cost Value
- ------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
48 DT360 lightpen 1 L160.00 L160.00
49 Sytos backup software 20 L30.00 L600.00
50 TUN terminal software 1 L50.00 L50.00
51 DataCom Rs232 Line Booster 3 L39.50 L118.50
52 panasonic Ser> Par conv 6 L49.95 L299.70
53 Primax Line Extender 1 L65.00 L65.00
54 ICE parallel ext 2 L59.99 L119.98
55 Auto Data Switch(parallel) 4 L39.99 L159.96
56 Manual data switch boxes 10 L3.50 L35.00
57 INMAC parallel line driver 1 L49.99 L49.99
58 Rs232 mini line driver 2 L29.99 L59.98
59 RS232 auto data switch 5 L39.99 L199.95
60 Panasonic serial port card 3 L36.99 L110.97
61 Misco rs232 1 port card 4 L39.95 L159.80
62 longshine dumb 4port cards 9 L48.50 L436.50
63 Longshine 14400 internal modems 2 L65.00 L130.00
64 Hayes fast serialport card 2 L59.95 L119.90
65 Multi-IO cards 3 L12.50 L37.50
66 Primax print net 4 L65.00 L260.00
67 Epson serial port 1 L38.50 L38.50
68 panasonic KXPs 14 port card 1 L36.00 L36.00
69 Iomega SCSI ZIP drive 1 L115.00 L115.00
70 DAT adaptor kits 8 L12.50 L100.00
71 HP C1536 2-4 gb DAT drive 4 L326.00 L1,304.00
72 HP c1599A 4-8 gb DAT drive 0 L413.00 L0.00
73 HP Travan T4i tape drive 0 L226.00 L0.00
74 Watchdog card internal 1 L40.00 L40.00
75 SMART printer buffer intelligent I/O 1 L140.00 L140.00
76 Toshiba notebook power adaptor 1 L125.00 L125.00
77 16 port ethernet patch panel 2 L59.99 L119.98
78 Chase port card 3 L40.00 L120.00
79 Multitech port card 2 L40.00 L80.00
80 TSC port card 1 L40.00 L40.00
81 Unterminal Driver Card 1 L285.00 L285.00
82 Modem Sharer multiplexor 1 L85.00 L85.00
83 panasonic Barcode scanner 2 L275.00 L550.00
84 DED barcode scanner 1 L325.00 L325.00
85 Specialix Host port card 1 L225.00 L225.00
86 Stallion EIO 8port card 5 L154.00 L770.00
87 Stallion EIO 4port card 10 L135.00 L1,350.00
88 Stallion EC8-32 port card 1 L157.00 L157.00
89 Stallion EC 16 port panel 3 L376.00 L1,128.00
90 Stallion Easyserver 8 port 1 L597.00 L597.00
91 Stallion EasyReach kit 1 L1,081.00 L1,081.00
92 Stallion Easyrserver 16 port 2 L837.00 L1,674.00
93 Multitech zdx 33,600 modems 10 L74.99 L749.90
94 US Robotics 33,600 int modem 1 L86.00 L86.00
95 Enta 14,400 modem 5 L45.00 L225.00
96 MR 56K Modem 1 L56.00 L56.00
97 Zoom 33600 modem 1 L45.00 L45.00
98 Tandberg 1.2gb SLR3 tape drivre 9 L288.00 L2,592.00
99 Plextor SCSI CD writer 0 L195.00 L0.00
100 Toshiba SCSI Cd rom drive 6 L65.00 L390.00
</TABLE>
BDS Confidential New Parts Stock Report
<PAGE>
<TABLE>
<CAPTION>
VISIVet Sites
Income per Bank Statements
(and explanations) Oct-97 Nov-97 Dec-97 Jan-98 Feb-98 Mar-98 Apr-98 May-98 Jun-98
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Ashbrook Vet Surg Not paying maintenance
Reg Balmer 37.60 37.60 37.60 37.60 37.60 37.60 37.60 37.60 37.60 338.40
Highertown Vet Clinic 56.40 56.40 56.40 56.40 56.40 56.40 56.40 56.40 56.40 507.60
Willow Lodge Vet Not paying maintenance 0.00
Donald Kingsnorth-Bagshol 56.40 56.40 56.40 56.40 56.40 56.40 56.40 56.40 56.40 507.60
Donald Kingsnorth-Lightwater 0.00
Forest Lodge Vet Charman 72.95 72.95 72.95 72.95 72.95 72.95 72.95 72.95 72.95 656.55
Henley House Vet Charman 0.00
Meadow Lane Vet Not paying maintenance (but will be again) 0.00
Ashfield Vet 37.60 37.60 37.60 37.60 37.60 37.60 37.60 37.60 37.60 338.40
Spittlehouse Vet 37.60 37.60 37.60 37.60 37.60 37.60 37.60 37.60 37.60 338.40
Done & Stevens-St Ives 112.80 112.80 112.80 112.80 112.80 112.80 112.80 112.80 112.80 1,015.20
Done & Stevens-Brampton 0.00
Tindall Vet Mearley Vet 56.40 56.40 56.40 56.40 56.40 56.40 56.40 56.40 56.40 507.60
Good Companions Vet 41.61 41.61 41.61 41.61 83.22 41.61 291.27
Gilmore Vet 56.40 56.40 56.40 56.40 56.40 56.40 56.40 56.40 56.40 507.60
Buchanan 169.20 169.20 169.20 507.60
Robert Thurlow Vet 48.47 48.47 48.47 48.47 48.47 48.47 48.47 48.47 48.47 436.23
Archway Vet Cave 56.40 56.40 56.40 56.40 56.40 56.40 56.40 56.40 56.40 507.60
Milt Stream Vet 48.47 48.47 48.47 48.47 48.47 48.47 48.47 48.47 48.47 436.23
Lingfield Lodge Vet 56.40 56.40 56.40 56.40 56.40 56.40 56.40 56.40 451.20
Peel Vet Grp 56.40 56.40 56.40 56.40 56.40 56.40 56.40 56.40 56.40 507.60
Peel Vet Clinic 37.60 37.60 37.60 37.60 37.60 37.60 37.60 37.60 37.60 338.40
Ambleside Vet 56.40 56.40 56.40 56.40 56.40 56.40 56.40 56.40 56.40 507.60
Williams Vet Cen Not paying maintenance 0.00
Collin Clark Paid year in advance 0.00
Gibbs Vet NBS 56.40 56.40 56.40 56.40 56.40 56.40 56.40 56.40 56.40 507.60
Brown & Paddon 56.40 56.40 56.40 56.40 56.40 56.40 56.40 56.40 56.40 507.60
Duncan Masson & Robertson 56.40 56.40 56.40 56.40 56.40 56.40 56.40 56.40 56.40 507.60
Sun-Y-Mor Vet Koepps 56.40 56.40 56.40 56.40 56.40 56.40 56.40 56.40 56.40 507.60
Green Pastures Vet Not paying maintenance
1,151.50 1,151.50 1,320.70 1,151.50 1,109.58 1,279.09 1,193.11 1,109.89 1,284.30 10,731.48
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
D Cheal Esq BVelMed Turner & Cheal
MRCVS Veterinary Surgery 3 131 Carlton Avenue East Wembley MIDDSEX HA9 8PN
R Price-Jones Esq BVSc Tysul Veterinary
MRCVS Group Pencader Road Llandysul Dyfed SA44 4AE
Mrs U H McLean BVMS U H McLean
MRCVS Veterinary Surgery 13 Queens Crescent Saint Georges GLASGOW Strathyclyde G4 9BL
Cross
Dr J Cox BVetMed BSc PhD University of Liverpool
FRCVS Equine Practice Leahurst Cheshire High NESTON Cheschire L64 7TE
Uplands Way Road
D Flatt Esq MRCVS Veterinary Group 1 Uplands Way Diss Norfolk IP22 3DF
R G Graham Esq BVMS Vermuyden North
MRCVS Veterinary Group 87 Haligate Howden Humberside DN14 6AH
R G Graham Esq BVMS Vermuyden North
MRCVS Veterinary Surgery 162 Boothferry Road GOOLE Humberside DN14 6AH
M Wright Esq BVMS Newcastle-
MRCVS Vet Direct LTD Mylord Cresent Camperdown Killingworth upon-Tyne NE12 0UJ
Industrial
Estate
J S G Down Esq BVetMed Victoria Veterinary
MRCVS Centre 25 Victoria Street GLOSSOP Derbyshire SK14 8HT
Mrs P M Usher MVB BA Village Veterinary
MRCVS Surgery 2 1 Brows Lane FORMBY Merseyside L37 3HY
Walker Duffin &
H C A Duffin Esq MRCVS Daniel 63 High Street Hillmorton Rugby Warwickshire CV21 4HD
S F Glanvill Esq MA VetMB Walker Glanvill &
DBR Richards 1 Sibford Road BANBURY Oxfordshire OX15 5JZ
West Bar Veterinary
R Burne Esq Surgery 1 19 West Bar BANBURY Oxfordshire OX16 9SA
M Jackson-Taylor Esq BVSc West Bar Veterinary
MRCVS Surgery 2 Woodford Halse BANBURY Oxfordshire OX16 9SA
R J Sibley Esq BVSc West Ridge
MRCVS Veterinary Practice 31 Park Hill Tiverton Devon EX16 6RR
R J Sibley Esq BVSc West Ridge
MRCVS Veterinary Practice 5 Chapple Road Witheridge Tiverton Devon EX16 8AS
R E Cusack Esq MVB Westside Veterinary
MRCVS Clinic 32 Webbs Road Battersea London SW11 6SF
M Wright Esq BVMS Westway Veterinary 4 Kenton Park SW11 6SF
Shopping Newcastle-
MRCVS Group 1 Salters Veterinary Centre Gosforth upon-Tyne NE3 4RU
Centre
M Wright Esq BVMS Westway Veterinary Norwood House Veterinary Northumbelan
MRCVS Group 2 Centre St Helens Corbridge d NE45 5BE
Street
M Wright Esq BVMS Westway Veterinary Newcastle-
MRCVS Group 3 Chillingham Veterinary 373 ChillinghamHeaton upon-Tyne NE6 5SB
Centre Road
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
M Wright Esq BVMS Westway Veterinary Newcastle-
MRCVS Group 4 Valley Veterinary Centre Beech Grove Terrace Crawcrook upon-Tyne NE30 3AQ
M Wright Esq BVMS Westway Veterinary Newcastle-
MRCVS Group 5 426/8 West Road Fenharn upon-Tyne NE5 2ER
M Wright Esq BVMS Westway Veterinary Newcastle-
MRCVS Group 6 Whickham Veterinary Centre 8 Fellside Bank Gateshead upon-Tyne NE16 4JX
M Wright Esq BVMS Westway Veterinary Newcastle-
MRCVS Group 7 Forest Hall Veterinary Centre 81 Station Road Forest Hall upon-Tyne NE12 8AQ
Wherry Veterinary
T S ThimblebyEsq MRCVS Group Bridge Street Bungay Suffolk NR35 1HD
S J Matthew Esq BVSc White Carpenter & MARKET
MRCVS Partners 48 Northampton Road HARBOROUGH Leicestershire LE16 9HE
R L Whiteford Esq Whitelord, Ramsey &
BVM&S MRCVS Herd 26 Kinnoull Causeway PERTH Perthshire PH2 8HQ
J L Hazell Esq BVetMed Wildbore Veterinary Nottingham-
MRCVS Group 5 Newcastle Street WORKSOP shire S80 2AS
R Johnstone Esq BVSc Willow Veterinary Buckingham-
MRCVS Group 1 Dartmouth House 5 High Street OLNEY shire MK46 6BH
R Johnstone Esq BVSc Willow Veterinary NEWPORT Buckingham-
MRCVS Group 2 2 Witten Road PAGNELL shire MK16 9BZ
Miss D Wilson BVSc Wilson Veterinary Gloucester-
MRCVS Surgeon Sheep Street CIRENCESTER shire GL7 1QW
H C Wilson Esq BVSc Wilson Walker &
MRCVS Barnby 3 168 Birmingham Road BROMSGROVE Worcestershire B61 0HB
Wilton House
C Tootill Esq Veterinary Centre Wilton Lane GUISBOROUGH Cleveland TS14 6JA
BVSc MRCVS Windmill Veterinary Buckingham-
Mall the main practice Centre 1 Manor Farm Padbury BUCKINGHAM shire MK18 2AJ
Windmill Veterinary Buckingham-
Mrs J Alexander Centre 2 33 High Street Winslow shire MK18 2AJ
BVetMed
M P Lomax Esq BVSc Winton Lodge
MRCVS Veterinary Hospital 1 37 St. Johns Avenue Leatherhead Surrey KT22 7HT
M P Lomax Esq BVSc Winton Lodge
MRCVS Veterinary Hospital 2 36 Ashley Road EPSOM Surrey KT18 5BH
M H G Winwood Esq BVSc Wood Street
MRCVS Veterinary Hospital 74 Wood Street BARNET Hertfordshire EN5 4BN
A Mitchell Esq BVM&S Woodland Veterinary
MRCVS Hospital Grange Road MIDHURST West Sussex GU29 9LT
Wray, Graham & Muir Dumfries &
P Wray Esq BVM&S MRCVs Veterinary Surgery 93-94 Drumlanrig Street THORNHILL Galloway DG3 5LU
MRCVS Wylie & Partners 196 Half Lane UPMINSTER Essex RM14 1TD
<PAGE>
H J Williams Esq Ystwyth Veterinary
BVetMed
BSc MRCVS Group Church Lane Llanbadarn Fawr Aberyswyth Dyfed SY23 3QU
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------
101 Phillips 36X Cdrom drive 7 L42.00 L294.00
- ---------------------------------------------------------------------------------
102 Adaptec 2940 SCSI card 6 L112.00 L672.00
- ---------------------------------------------------------------------------------
103 Adaptec 2940W SCSI card 0 L146.00 L0.00
- ---------------------------------------------------------------------------------
104 MR SCSI PCI card 1 L85.00 L85.00
- ---------------------------------------------------------------------------------
105 Adaptec 2920 SCSI Card 1 L98.00 L98.00
- ---------------------------------------------------------------------------------
106 Adaptec 2842 VL SCSI card 1 L135.00 L135.00
- ---------------------------------------------------------------------------------
107 misc. EIDE CD Roms 18 L35.00 L630.00
- ---------------------------------------------------------------------------------
108 1.2 Mb 5.25" FDD 5 L42.00 L210.00
- ---------------------------------------------------------------------------------
109 Maxtro PC speakers 2 L7.50 L15.00
- ---------------------------------------------------------------------------------
110 Typhoon 120W PC speakers 3 L18.50 L55.50
- ---------------------------------------------------------------------------------
111 Accucard HDD kit 1 L150.00 L150.00
- ---------------------------------------------------------------------------------
112 PC Screen Filter 6 L25.00 L150.00
- ---------------------------------------------------------------------------------
113 RS external drive case with PSU 1 L55.00 L55.00
- ---------------------------------------------------------------------------------
114 Summit Xpress backup kit 1 L50.00 L50.00
- ---------------------------------------------------------------------------------
115 External Wangtec Tape drive 5 L285.00 L1,425.00
- ---------------------------------------------------------------------------------
116 Summit external drive case Eide/SCSI 5 L48.00 L240.00
- ---------------------------------------------------------------------------------
117 Pearl external drive case 1 L43.00 L43.00
- ---------------------------------------------------------------------------------
118 XTEC mouse 9 L8.50 L76.50
- ---------------------------------------------------------------------------------
119 Ice mouse 60 L3.50 L210.00
- ---------------------------------------------------------------------------------
120 Genius Easytrack mouse 2 L14.50 L29.00
- ---------------------------------------------------------------------------------
121 misc mice 13 L3.50 L45.50
- ---------------------------------------------------------------------------------
122 ISA Vga card 16 L16.50 L264.00
- ---------------------------------------------------------------------------------
123 ATI 2mb svga card PCI 6 L24.50 L147.00
- ---------------------------------------------------------------------------------
124 S3 virge 4mb PCI video card 0 L14.50 L0.00
- ---------------------------------------------------------------------------------
125 Videologic 410 PCI video card 3 L22.50 L67.50
- ---------------------------------------------------------------------------------
126 Creative AWE64 sound card 2 L38.50 L77.00
- ---------------------------------------------------------------------------------
127 SOYO SY6BE M/boards 3 L76.00 L228.00
- ---------------------------------------------------------------------------------
128 486 m/boards 3 L35.00 L105.00
- ---------------------------------------------------------------------------------
129 Tyan Titan pentium M/board 3 L82.00 L246.00
- ---------------------------------------------------------------------------------
130 Chaintech Jumperless M/board 9 L57.00 L513.00
- ---------------------------------------------------------------------------------
131 Intel TC430HX M/board 3 L74.00 L222.00
- ---------------------------------------------------------------------------------
132 AOPEN P2 M/board 0 L68.00 L0.00
- ---------------------------------------------------------------------------------
133 Pentium Pro PX6600 m/board 2 L85.00 L170.00
- ---------------------------------------------------------------------------------
134 Dual P-Pro with SCSI M/board 1 L365.00 L365.00
- ---------------------------------------------------------------------------------
135 Magicpoint touch screen 1 L92.00 L92.00
- ---------------------------------------------------------------------------------
136 Pentium P2 300 processors 10 L145.00 L1,450.00
- ---------------------------------------------------------------------------------
137 SG 486 DX2-80 processors 3 L14.50 L43.50
- ---------------------------------------------------------------------------------
138 CX686-MX 333 processors 5 L40.00 L200.00
- ---------------------------------------------------------------------------------
139 Intell Pentium233MMX processors 2 L76.00 L152.00
- ---------------------------------------------------------------------------------
140 Intell p133 processor 3 L50.00 L150.00
- ---------------------------------------------------------------------------------
141 Intell P166 processor 0 L60.00 L0.00
- ---------------------------------------------------------------------------------
142 64mb Sdram module 26 L52.00 L1,352.00
- ---------------------------------------------------------------------------------
143 32mb Sdram module 22 L26.00 L572.00
- ---------------------------------------------------------------------------------
144 8mb simms 11 L8.60 L94.60
- ---------------------------------------------------------------------------------
145 misc 1mb PCI video cards 2 L18.00 L36.00
- ---------------------------------------------------------------------------------
146 16mb simms 4 L16.50 L66.00
- ---------------------------------------------------------------------------------
147 VL bus 9FX video card 1 L25.00 L25.00
- ---------------------------------------------------------------------------------
148 Keyboard drawers 3 L45.00 L135.00
- ---------------------------------------------------------------------------------
149 102 (non W95) keyboards 13 L5.00 L65.00
- ---------------------------------------------------------------------------------
150 W95 keyboards Din 21 L5.00 L105.00
- ---------------------------------------------------------------------------------
151 W95 keyboards PS2 22 L5.50 L121.00
- ---------------------------------------------------------------------------------
152 W95 with trackball Keyboard 2 L49.50 L99.00
- ---------------------------------------------------------------------------------
153 W95 Ergo keyboard 2 L55.00 L110.00
- ---------------------------------------------------------------------------------
</TABLE>
PAGE 4
<PAGE>
<TABLE>
- ------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
154 4Gb Wide Scsi HDD 4 L205.00 L820.00
- ------------------------------------------------------------------------------
155 Samsung 4.3gb SCSI hdd 2 L170.00 L340.00
- ------------------------------------------------------------------------------
156 Seagate 4.3 SCSI hdd 0 L165.00 L0.00
- ------------------------------------------------------------------------------
157 1.2gb Seagate IDE hdd 1 L65.00 L65.00
- ------------------------------------------------------------------------------
158 Sasung 4.3gb IDE hd 2 L87.00 L174.00
- ------------------------------------------------------------------------------
159 Fuji 2.1gb IDE hdd 0 L65.00 L0.00
- ------------------------------------------------------------------------------
160 Fuji 2.6 IDE hdd 0 L70.00 L0.00
- ------------------------------------------------------------------------------
161 Samsung 2.1 IDE HDD 0 L65.00 L0.000
- ------------------------------------------------------------------------------
162 WD Caviar 2.1 IDE hdd 2 L75.00 L150.00
- ------------------------------------------------------------------------------
163 Seagate 1gb IDE hdd 1 L60.00 L60.00
- ------------------------------------------------------------------------------
164 Seagate 1.7GB 1 L65.00 L65.00
- ------------------------------------------------------------------------------
165 2.1Seagate IDE hdd 0 L65.00 L0.00
- ------------------------------------------------------------------------------
166 Seagate 4.3 Ide hdd 2 L85.00 L170.00
- ------------------------------------------------------------------------------
167 1.44 fdd 3.5" drives 10 L11.50 L115.00
- ------------------------------------------------------------------------------
168 Firestorm Cdrom drive 0 L35.00 L0.00
- ------------------------------------------------------------------------------
sub total L40,025.88
--------------------
<CAPTION>
CABLES, CONNECTORS
- ------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
C1 serial printer cable 132 L2.60 L343.20
- ------------------------------------------------------------------------------
C2 25 - 25 modem cables 251 L2.60 L652.60
- ------------------------------------------------------------------------------
C3 25 - 9 modem cables 92 L2.60 L239.20
- ------------------------------------------------------------------------------
C4 parallel printer cable 172 L2.95 L507.40
- ------------------------------------------------------------------------------
C5 cent - cent cable 21 L3.15 L66.15
- ------------------------------------------------------------------------------
C6 short rj45 patch 61 L2.85 L173.85
- ------------------------------------------------------------------------------
C7 long rj45 patch 16 L4.50 L72.00
- ------------------------------------------------------------------------------
C8 blue rj45 17 L5.25 L89.25
- ------------------------------------------------------------------------------
C9 red rj45 16 L6.50 L104.00
- ------------------------------------------------------------------------------
10 short BNC flyleed 6 L4.48 L26.88
- ------------------------------------------------------------------------------
11 long BNC flylead 8 L6.00 L48.00
- ------------------------------------------------------------------------------
12 SCSI 2 internal ribbon 77 L6.50 L500.50
- ------------------------------------------------------------------------------
13 Wide SCSI internal ribbon 51 L11.60 L591.60
- ------------------------------------------------------------------------------
14 VGA ext 15 L3.26 L48.90
- ------------------------------------------------------------------------------
15 Keyb ext DIN 8 L2.55 L20.40
- ------------------------------------------------------------------------------
16 keyb ext PS2 13 L2.78 L36.14
- ------------------------------------------------------------------------------
17 PS2 > DIN 8 L2.05 L16.40
- ------------------------------------------------------------------------------
18 Null modem adapt 17 L2.65 L45.05
- ------------------------------------------------------------------------------
19 rj45 D hood 215 L1.95 L419.25
- ------------------------------------------------------------------------------
20 25 > 25 gender changers 47 L2.15 L101.05
- ------------------------------------------------------------------------------
21 25.9 gender changers 23 L2.15 L49.45
- ------------------------------------------------------------------------------
22 SCSI TERM INTERNAL 10 L12.95 L129.50
- ------------------------------------------------------------------------------
23 SCSI TERM external 22 L12.95 L284.90
- ------------------------------------------------------------------------------
24 External SCSI cables 39 L26.95 L1,051.05
- ------------------------------------------------------------------------------
25 COAX terms 83 L0.81 L67.23
- ------------------------------------------------------------------------------
26 Coax T piece 70 L1.25 L87.50
- ------------------------------------------------------------------------------
27 Coax Crimps 69 L0.60 L41.40
- ------------------------------------------------------------------------------
28 AT power supplies 14 L12.50 L175.00
- ------------------------------------------------------------------------------
29 Coax straight thro adapt 3 L0.62 L1.86
- ------------------------------------------------------------------------------
30 Pentium Coolers 30 L3.50 L105.00
- ------------------------------------------------------------------------------
31 P2 coolers 33 L6.50 L214.50
- ------------------------------------------------------------------------------
32 P-Pro fans 10 L4.50 L45.00
- ------------------------------------------------------------------------------
33 misc fans 8 L3.00 L24.00
- ------------------------------------------------------------------------------
34 modem cable long 5 L4.75 L23.75
- ------------------------------------------------------------------------------
Page 5
<PAGE>
<S> <C> <C> <C> <C>
35 phone ext cable short 56 L1.25 L70.00
- ------------------------------------------------------------------------------
36 phone ext cable long 15 L2.25 L33.75
- ------------------------------------------------------------------------------
37 IDE ribbons 180 L3.16 L568.80
- ------------------------------------------------------------------------------
38 DIN > PS2 209 L2.05 L428.45
- ------------------------------------------------------------------------------
39 7.5m unterm cables 4 L0.00 L0.00
- ------------------------------------------------------------------------------
40 FDD ribbons 55 L2.23 L122.65
- ------------------------------------------------------------------------------
41 9 > 9 serial cable 9 L2.54 L22.86
- ------------------------------------------------------------------------------
42 9 > 9 gender changers 115 L2.50 L287.50
- ------------------------------------------------------------------------------
43 serial surge protectors 44 L15.38 L676.72
- ------------------------------------------------------------------------------
44 power cable splitters 132 L0.60 L79.20
- ------------------------------------------------------------------------------
45 modem line splitters 22 L3.95 L86.90
- ------------------------------------------------------------------------------
46 power adaptors 10 L4.75 L47.50
- ------------------------------------------------------------------------------
47 d-hood assy 82 L1.95 L159.90
- ------------------------------------------------------------------------------
sub total L8,986.19
---------------------
</TABLE>
Page 6
<PAGE>
END OF YEAR STOCK REPORT 26TH NOV 1998
<TABLE>
<CAPTION>
Field Spare Stock
Stock Unit
Location Description Quantity Cost Value
- ------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
- ------------------------------------------------------------------------------
wyse terminals 60 4 L75.00 L300.00
- ------------------------------------------------------------------------------
wyse 55 1 L75.00 L75.00
- ------------------------------------------------------------------------------
WYSE 325 COLOUR 5 L150.00 L750.00
- ------------------------------------------------------------------------------
EGA MONITOR 1 L25.00 L25.00
- ------------------------------------------------------------------------------
14" SVGA 5 L35.00 L175.00
- ------------------------------------------------------------------------------
EPSON LO550 1 L75.00 L75.00
- ------------------------------------------------------------------------------
EPSON STYLUS 800 1 L50.00 L50.00
- ------------------------------------------------------------------------------
Epson escp2 1 L50.00 L50.00
- ------------------------------------------------------------------------------
epson sq850 1 L100.00 L100.00
- ------------------------------------------------------------------------------
pana kxp 2023 3 L50.00 L150.00
- ------------------------------------------------------------------------------
pana kxp 1124 5 L50.00 L250.00
- ------------------------------------------------------------------------------
pana trkp 1170 1 L50.00 L50.00
- ------------------------------------------------------------------------------
pana 2123 2 L50.00 L100.00
- ------------------------------------------------------------------------------
Brother 660 laser 3 L50.00 L150.00
- ------------------------------------------------------------------------------
Hp DJ 500 2 L50.00 L100.00
- ------------------------------------------------------------------------------
Unterminal control unit 3 L125.00 L375.00
- ------------------------------------------------------------------------------
Mustek scanner 1 L100.00 L100.00
- ------------------------------------------------------------------------------
Olivetti dm390 1 L50.00 L50.00
- ------------------------------------------------------------------------------
Canon BJ300 1 L50.00 L50.00
- ------------------------------------------------------------------------------
Wyse Keyboards 17 L25.00 L425.00
- ------------------------------------------------------------------------------
Technitron laser 1 L100.00 L100.00
- ------------------------------------------------------------------------------
external qic 4 L75.00 L300.00
- ------------------------------------------------------------------------------
Mitac 386 systems 5 L40.00 L200.00
- ------------------------------------------------------------------------------
GTI pentium system 1 L200.00 L200.00
- ------------------------------------------------------------------------------
APC UPS 1 L75.00 L75.00
- ------------------------------------------------------------------------------
Amber UPS 1 L50.00 L50.00
- ------------------------------------------------------------------------------
L0.00
- ------------------------------------------------------------------------------
L0.00
- ------------------------------------------------------------------------------
L0.00
- ------------------------------------------------------------------------------
L0.00
- ------------------------------------------------------------------------------
L0.00
- ------------------------------------------------------------------------------
sub total L4,325.00
---------------------
</TABLE>
Page 7
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------
New Software Stock
- --------------------------------------------------------------------------------------------------------
Stock
Location Description Quantity Unit Cost Value
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
S1 SCO 5.0.5 MEDIA PACK 7 L51.00 L357.00
- --------------------------------------------------------------------------------------------------------
S2 SCO 5.0.5 UPG LICENSE 8 L303.00 L2,424.00
- --------------------------------------------------------------------------------------------------------
S3 SCO 5.0.4 MEDIA PACK 3 L51.00 L153.00
- --------------------------------------------------------------------------------------------------------
S4 SCO 5.0.5 10 USER LICENSE 5 L102.00 L510.00
- --------------------------------------------------------------------------------------------------------
S5 SCO 5.0.2 MEDIA PACK 4 L51.00 L204.00
- --------------------------------------------------------------------------------------------------------
S6 SCO 5.0.4 HOST 5USR LICENSE 2 L357.00 L714.00
- --------------------------------------------------------------------------------------------------------
S7 SCO 5.0.4 HOST GREATER THAN 5.0.5
Host UPG LI 1 L402.00 L402.00
- --------------------------------------------------------------------------------------------------------
S8 SCO 5.XX GREATER THAN 5.0.4 UPG LICENSE 1 L99.00 L99.00
- --------------------------------------------------------------------------------------------------------
S9 MICROLITE BACKUP EDGE 9 L170.00 L1,530.00
- --------------------------------------------------------------------------------------------------------
10 SCO 5.0.0 DESKTOP 0 L402.00 L0.00
- --------------------------------------------------------------------------------------------------------
11 SCO 5.0.0 UPG 0 L0.00 L0.00
- --------------------------------------------------------------------------------------------------------
12 PC ANYWHERE 32 3 L94.95 L284.85
- --------------------------------------------------------------------------------------------------------
13 EXCEED Terminal Software 2 L0.00 L0.00
- --------------------------------------------------------------------------------------------------------
14 Norton AV 2 L45.00 L90.00
- --------------------------------------------------------------------------------------------------------
15 Inoculan for Netware 2 L353.00 L706.00
- --------------------------------------------------------------------------------------------------------
16 Term Comms Sw 1 L0.00 L0.00
- --------------------------------------------------------------------------------------------------------
17 Unitrends Backup 1 L165.00 L165.00
- --------------------------------------------------------------------------------------------------------
18 PC Interface 3 L0.00 L0.00
- --------------------------------------------------------------------------------------------------------
19 Windows98 OEM 8 L58.00 vovofovovotof Year Stock Report 2
- --------------------------------------------------------------------------------------------------------
</TABLE>
BDS Confidential 26/11/98 Page 8
<PAGE>
<TABLE>
<CAPTION>
END OF YEAR STOCK REPORT 26TH NOV 1998
-------------------------
Field Eng. Stock
- --------------------------------------------------------------------------------------------------------
Stock
Location Description Quantity Unit Cost Value
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------
A. Ward Stallion EIO8 port 2 L154.00 L308.00
- --------------------------------------------------------------------------------------------------------
Stallion EIO4port 1 L135.00 L135.00
- --------------------------------------------------------------------------------------------------------
ATX power supply 1 L12.50 L12.50
- --------------------------------------------------------------------------------------------------------
ps2 keyboard 1 L5.50 L5.50
- --------------------------------------------------------------------------------------------------------
din keyboard 1 L5.00 L5.00
- --------------------------------------------------------------------------------------------------------
multitech modem ZDX33.600 1 L74.99 L74.99
- --------------------------------------------------------------------------------------------------------
Advansys SCSI card 1 L85.00 L85.00
- --------------------------------------------------------------------------------------------------------
1 reel 6 core cable 1 L0.00 L0.00
- --------------------------------------------------------------------------------------------------------
1 box Cat5 cable 1 L65.00 L65.00
- --------------------------------------------------------------------------------------------------------
PCI VGA card 2 L18.00 L36.00
- --------------------------------------------------------------------------------------------------------
ISA VGA card 2 L16.50 L33.00
- --------------------------------------------------------------------------------------------------------
2 gb IDE hdd 3 L65.00 L195.00
- --------------------------------------------------------------------------------------------------------
multi I/O card 2 L12.50 L25.00
- --------------------------------------------------------------------------------------------------------
Pentium motherboards 2 L55.00 L110.00
- --------------------------------------------------------------------------------------------------------
Adapt 2940 SCSI cards 2 L98.00 L196.00
- --------------------------------------------------------------------------------------------------------
HP 2 gb Dat drive 1 L326.00 L326.00
- --------------------------------------------------------------------------------------------------------
1.2gb Tandberg tape drive 2 L288.00 L576.00
- --------------------------------------------------------------------------------------------------------
HP travan tape drive 1 L226.00 L226.00
- --------------------------------------------------------------------------------------------------------
16 mb simms 4 L16.50 L66.00
- --------------------------------------------------------------------------------------------------------
L0.00
- --------------------------------------------------------------------------------------------------------
J.Rowney at power supply 1 L12.50 L12.50
- --------------------------------------------------------------------------------------------------------
ISA net card 3 L10.00 L30.00
- --------------------------------------------------------------------------------------------------------
PCI Net card 1 L12.10 L12.10
- --------------------------------------------------------------------------------------------------------
ISA muti I?O Card 1 L12.50 L12.50
- --------------------------------------------------------------------------------------------------------
386dx-60 motherboard 1 L25.00 L25.00
- --------------------------------------------------------------------------------------------------------
Adaptec 2940 SCSI card 2 L98.00 L196.00
- --------------------------------------------------------------------------------------------------------
Pentium Motherboards 4 L55.00 L220.00
- --------------------------------------------------------------------------------------------------------
60mm Fans 3 L3.00 L9.00
- --------------------------------------------------------------------------------------------------------
40mm Fans 2 L3.00 L6.00
- --------------------------------------------------------------------------------------------------------
90mm Fans 2 L3.00 L6.00
- --------------------------------------------------------------------------------------------------------
pentium Coolers 5 L3.50 L17.50
- --------------------------------------------------------------------------------------------------------
HP 2GB Dat drive 3 L326.00 L978.00
- --------------------------------------------------------------------------------------------------------
4gb SCSI Hdd 2 L170.00 L340.00
- --------------------------------------------------------------------------------------------------------
2gb IDE hdd 2 L65.00 L130.00
- --------------------------------------------------------------------------------------------------------
SCSI cDrom 1 L65.00 L65.00
- --------------------------------------------------------------------------------------------------------
IDE Cdrom 1 L35.00 L35.00
- --------------------------------------------------------------------------------------------------------
HP Travan t4i tape drives 2 L226.00 L452.00
- --------------------------------------------------------------------------------------------------------
3.5" fdd 2 L11.50 L23.00
- --------------------------------------------------------------------------------------------------------
5.25 fdd 2 L42.00 L84.00
- --------------------------------------------------------------------------------------------------------
1.2gnb Tandberg Tape drives 3 L288.00 L864.00
- --------------------------------------------------------------------------------------------------------
100mb ide drives HDD 2 L0.00 L0.00
- --------------------------------------------------------------------------------------------------------
Pentium 200 processor 1 L50.00 L50.00
- --------------------------------------------------------------------------------------------------------
pentium233mmx processor 1 L76.00 L76.00
- --------------------------------------------------------------------------------------------------------
Cyrix133 processor 1 L0.00 L0.00
- --------------------------------------------------------------------------------------------------------
Cyrix166 processor 1 L0.00 L0.00
- --------------------------------------------------------------------------------------------------------
16mb simms 4 L16.50 L66.00
- --------------------------------------------------------------------------------------------------------
8mb Simms 5 L8.60 L43.00
- --------------------------------------------------------------------------------------------------------
BDS Confidential 26/11/98 Page 9
<PAGE>
- --------------------------------------------------------------------------------------------------------
4mb simms 1 L0.00 L0.00
- --------------------------------------------------------------------------------------------------------
Sdram 64mb 1 L52.00 L52.00
- --------------------------------------------------------------------------------------------------------
30 pin 1MB simms 8 L0.00 L0.00
- --------------------------------------------------------------------------------------------------------
30 pin 4mb simms 4 L0.00 L0.00
- --------------------------------------------------------------------------------------------------------
Misco serial port cards 2 L39.95 L79.90
- --------------------------------------------------------------------------------------------------------
Ser GREATER THAN Par converters 2 L59.00 L118.00
- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
SUB TOTAL L6,482.49
---------------------------------------
</TABLE>
BDS Confidential 26/11/98 Page 10
<PAGE>
SCHEDULE IV
The service level agreement
<PAGE>
ISL SERVICE LEVEL AGREEMENT
INTRODUCTION
This Service Level Agreement (SLA) sets out the understanding between
Information Support Limited (ISL) and Business Data Systems Limited (BDS) for
the provision of Hardware Maintenance Services deliverable to the BDS customer
base.
The purpose of the SLA is to provide a clear understanding of the commitments of
both ISL and BDS and to ensure the provision of consistent, reliable and timely
hardware maintenance services to the BDS customer base according to these
mutually agreed terms and conditions.
This agreement is an addendum to the ISL "Class 1 Maintenance Contract" and
will be effective for equipment and services described within the individual
"End-User" schedules from 1st December 1998 for a period of five year.
Revisions to the SLA will be made by mutual consent.
STANDARD OPERATIONAL ARRANGEMENTS
i) The standard hours of the ISL technical and engineering personnel
availability are, 09.00 to 17.30, Monday to Friday inclusive,
excluding Public and National Holidays.
ii) Fault Call requests will be accepted by the ISL "Customer Service Desk"
only from the BDS "Help Desk" and all direct communication from any BDS
"End-User" will be routed back through the correct channel.
iii) Fault Calls may be submitted via:
i) Telephone - 01189 770600.
ii) Fax - 01189 770601.
iii) Email - [email protected].
-----------------------------------------
iv) To ensure customer expected service levels are deliverable, ISL require
the following information on receipt of a Fault Call being logged:
i) Customer Name, Address and relevant Contact Name.
ii) BDS job reference number.
iii) Faulty item with model number where available.
iv) Operating System.
v) Original time and date problem occurred.
vi) Customer communication surrounding fault resolution
todate.
vii) All customer Fault Calls will be processed in line with the ISL
standard escalation procedure (Appendix A).
viii) Fault Calls where the equipment failure is not covered by the terms and
conditions of the "Class I Hardware Maintenance Contract" or the
"Service Level Agreement" will be deemed chargeable and upon agreement
with BDS, charges will be levied at our standard Time and Material
rates (Appendix B).
ix) Fault Calls where response for resolution is required outside our
"Prime Shift" will be deemed chargeable and upon agreement with BDS,
charges will be levied at our standard Time and Material rates
(Appendix B).
- --------------------------------------------------------------------------------
ISL Service Level Agreement
Page 1
<PAGE>
STANDARD CONTRACTUAL ARRANGEMENTS
i) BDS will supply ISL a comprehensive list of customers, addresses,
telephone numbers and respective contact names.
ii) BDS will supply ISL a comprehensive list of equipment with respect to
each "End-User" site to enable ISL to fulfil their contractual
obligations.
iii) Where multiple sites are covered under the same contract, individual
branches will need to be highlighted, to ensure the correct contract
structure is achieved.
iv) ISL will only supply services and respective response on products or
equipment outlined within the individual "End-User" schedule.
v) "Mission Critical" defined equipment such as 'Servers or Communication
systems' must be agreed prior to the submission of the "End-User"
schedule.
vi) "Non-Mission Critical" defined equipment such as 'Terminals, Printers,
PC's Monitors and Keyboards' must be agreed prior to the submission of
the "End-User" schedule.
HARDWARE SERVICES PROVIDED
i) ISL will use reasonable endeavours to provide a response to "Mission
Critical" equipment within 4 working hours or within the time specified
outlined in the respective "End-User" schedule for Fault Calls being
received by the ISL "Customer Service Desk".
ii) ISL will use reasonable endeavours to provide a response to
"Non-Mission Critical" equipment within 8 working hours, next day or
within the time specified outlined in the respective "End-User"
schedule for Fault Calls being received by the ISL "Customer Service
Desk".
iii) ISL will use reasonable endeavours to supply component spares,
replacements or loan units to rectify unserviceable equipment within
the boundaries of the hardware maintenance contract, however, engineer
attendance to ensure this resolution is achieved will be at the
discretion of ISL.
iv) Laptops will be serviced under a return to Workshop basis and ISL will
use reasonable endeavours to supply a loan unit.
OPERATING SYSTEM SERVICES PROVIDED
i) ISL will provide support including telephone and modem based help on
any faults, errors or corruptions of the Operating System as specified
within the "End-User" schedule. The services to be provided include:
a) Guaranteed response within 4 working hours.
b) Problem solving.
c) Access to library of device drivers.
d) Free provision of 'fixes' subject to availability.
e) Advice on operating system backup procedures.
f) Basic kernel parameter configuration and
reconfiguration for resource problems.
ii) ISL will use reasonable endeavours to restore back-ups and Operating
Systems as specified within the "End-User" schedule during Fault Call
resolution, however, the customer's original media and appropriate data
source must be supplied to the ISL Engineer to enable completion of
such task.
iii) ISL will provide support including telephone and modem based help on
faults or errors with any terminal emulation package supplied by BDS
and specified within the "End-User" schedule. The services to be
provided include:
a) Guaranteed response within 4 working hours
b) Problem solving
c) Access to library of device drivers
d) Free provision of 'fixes' subject to availability
- --------------------------------------------------------------------------------
ISL Service Level Agreement
Page 2
<PAGE>
SERVICES NOT PROVIDED
i) Faults resulting from 'acts of god' such as, lightning strikes, floods
fires etc.
ii) Faults resulting from configuration, re-configuration, equipment moves
or installation work not authorised by ISL.
iii) Rectification of cable faults, on cabling not installed by or certified
by ISL.
iv) Free of charge replacement of Manufacturer specified consumable
components.
AGREEMENT
AS WITNESS the hand of the duly authorised representatives of the parties hereto
on the day and year first written.
SIGNED: SIGNED:
--------------------------- ----------------------------
for and on behalf of ISL for and on behalf of BDS
TITLE: TITLE:
---------------------------- ----------------------------
DATE: DATE:
---------------------------- ----------------------------
- --------------------------------------------------------------------------------
ISL Service Level Agreement
Page 3
<PAGE>
APPENDIX A
GENERAL:
This procedure must be followed to ensure that the problems are escalated to the
correct level of authority and thereby ensure their speedy resolution.
It is the responsibility of all ISL personnel to escalate problems that are
adjudged to be of a serious nature that may effect any of the following:
- Safety
- Quality
- Performance
- Customer Relations
The enclosed procedure outlines the escalation paths that must be adhered to so
that problems are escalated for information and/or resolution to the appropriate
levels of authority.
This procedure does not apply to normal management issues that are addressed
through routine management reviews, meetings and procedures.
DEFINITIONS:
ACTION ESCALATION
Action escalation is the referral of a problem to a higher authority when
resolution is perceived to be beyond the originator's capability, or authority.
Responsibility for resolution resides with the highest authority invoked in the
escalation path.
INFORMATION ESCALATION
Information escalation is the notification of a problem and the actions taken to
resolve it to a higher authority. Responsibility for resolution resides with the
originator.
This information will be extracted from the Field Service computer system passed
through the escalation chain.
- --------------------------------------------------------------------------------
ISL Service Level Agreement
Page 4
<PAGE>
PROCEDURE:
1. Any engineering problems identified during normal day to day operations
should be reported to the Field Operations Manager for ACTION.
2. If the Field Operations Manager can resolve the problem immediate action
will be taken. However should resolution of the problem exceed 16 contracted
working hours the Operations Manager is notified (INFORMATION only). If the
problem is still unresolved after a further 8 contracted working hours the
Managing Director is notified (INFORMATION only).
3. If the Field Operations Manager cannot resolve the problem all relevant
information is immediately passed to the Operations Manager for ACTION.
4. If the Operations Manager can resolve the problem immediate action will be
taken. However should resolution of the problem exceed 8 contracted working
hours the Managing Director will be notified (INFORMATION only).
5. If the Operations Manager cannot resolve the problem all relevant
information is passed immediately to the Managing Director for ACTION.
6. Where the assistance of another Department is necessary to resolve a
problem, all information may be forwarded to formally record the need for
urgency and to request exceptional action, however responsibility for
progressing resolution remains with the originator.
ESCALATION FLOWCHART:
FIELD 16 WORKING HOURS OPERATIONS 8 WORKING HOURS MANAGING
OPERATIONS ---------------- MANAGER --------------- DIRECTOR
MANAGER
|
|
|
|
OPERATIONS 8 WORKING HOURS MANAGING
MANAGER --------------- DIRECTOR
|
|
|
|
MANAGING
DIRECTOR
ACTION ESCALATIONS GO FROM TOP TO BOTTOM
INFORMATION ESCALATIONS GO FROM LEFT TO RIGHT
NOTE:
The Field service system continually monitors all Customer Calls and
automatically highlights all relevant escalations using the escalation
monitor.
- -------------------------------------------------------------------------------
ISL Service Level Agreement
Page 5
<PAGE>
APPENDIX B
TIME & MATERIALS PROCEDURE
INTRODUCTION
This procedure outlines the optional Time & Materials response times ISL
contracted and non-contracted customers can chose to highlight the priority
of a call. THIS IS NOT A GUARANTEED RESPONSE TIME, therefore the customer
will be charged the appropriate amount in conjunction with the time taken to
respond.
- - 4 Hour response L440.00 (includes the first hour) L55.00 an hour
thereafter.
- - 8 Hour response L260.00 (includes the first hour) L55.00 an hour
thereafter.
- - Standard response L130.00 (includes first hour) L55.00 an hour
thereafter. THE STANDARD CALL OUT CHARGE CAN BE UP TO 5 WORKING DAYS
TO RESPOND.
All the above prices are excluding VAT and Parts.
All Time & Materials calls will be responded to only when a signed purchase
order with a break down of the agreed charges and the work to be carried out
is received by the ISL's Customer Service Department.
On receipt of the signed Purchase Order, the Customer Service Desk will log a
fault call on the Pinnacle Management system which will then generate a job
number. the customer will then be contacted and given the job number for
future reference.
When the Field Service Engineer has completed the Time & Materials work to
the customer's satisfaction, a Field Engineering report sheet (FER) will be
generated by the Field Service Engineer, and must be then signed by both
parties involved. This will state the amount of time taken and any parts used
to complete the work.
On completion of the work carried out prior to the invoice being generated
the Customer will be contacted to ensure they agree fully with all the
charges.
- -------------------------------------------------------------------------------
ISL Service Level Agreement
Page 6
<PAGE>
SIGNED BY: ) /s/ [Illegible]
For and on behalf of )
Business Data Systems Limited )
In the presence of: [Illegible] )
SIGNED BY: ) /s/ [Illegible]
For and on behalf of )
Information Support Limited )
In the presence of: [Illegible] )
SIGNED BY: ) /s/ [Illegible]
For and on behalf of )
ISL Software Solutions Limited )
In the presence of: [Illegible] )
<PAGE>
Date: 2nd December 1998
To: Information Solutions Limited From: Business Data Systems Limited
Garrick House 2/3 Dublin Mews
27 - 32 King Street Edinburgh
Covent Garden EH3 6NW
London
WC2E 8JD
and vice versa.
Disclosure Letter
Dear Sirs
These are the disclosures referred to in the Agreement dated 2nd December
1998 ("the Agreement") between (1) Business Data Systems Limited and (2)
Information Solutions Limited (hereinafter both referred to as "the
Transferee" and "the Transferor" respectively in accordance with the use of
those terms in the Agreement) for the respective disposals and acquisitions
of the BDSL Hardware Business and the DataBasics Business respectively (both
as defined in the Agreement).
The definitions in the Agreement shall, unless the context otherwise requires,
apply to this letter.
We hereby write to record and make the following disclosures in relation to
the Agreement as a whole and, in particular but without prejudice to the
foregoing generality, in respect of the warranties set out in Clause 14 of the
Agreement (hereinafter referred to as "the Warranties").
All the Warranties are made or given subject to this disclosure letter and the
liability of the respective Transferors in respect of the Warranties shall be
limited accordingly. If any inconsistency is revealed between the Agreement
and this disclosure letter,
<PAGE>
Head 0
PO Box 31, 42 St. Andrew Square
Our Ref: 223386 Edinburgh EHZ 2YE
Telephone: 0131 556 8555
Date: 2 December 1998 Telac 72230
Facsimile: 0131 317 9114
[LOGO]
Information Support Limited
Garrick House
27-32 King St
Covent Garden
London
WC2E 8JD
Dear Sirs
Business Data Systems Limited ("the Vendor"),
We have been asked to write to you in connection with your acquisition from
the Vendor of the Vendor's business of the sale, supply, installation,
support and maintenance of computer hardware equipment ("the Business").
This is being sold in exchange for the acquisition of Datalink Shares and
associated software.
We, THE ROYAL BANK OF SCOTLAND plc, are the holders of a Bond and Floating
Charge granted by the Vendor dated 13th May 1997 and registered with the
Register of Companies at Edinburgh on 20th May 1997 ("the Charge").
We hereby confirm:
(First) that as at this date we have taken no steps whatsoever to (a)
appoint a liquidator or (b) appoint a receiver over the whole
or any part of the property or assets of the Vendor; and
(Second) that we consent to the release of the Hardware Business from
the Charge.
Yours faithfully
For THE ROYAL BANK OF SCOTLAND plc
/s/ Brian O'Donnell
- -------------------------
Brian O'Donnell
Manager, Corporate Credit Documentation
<PAGE>
EXHIBIT 6.4
PREMIER COMPUTER GROUP LIMITED -AND-
INTEGRITY HOLDINGS LIMITED SHARE SALE AND
PURCHASE AGREEMENT
<PAGE>
DATED
PREMIER COMPUTER GROUP LIMITED
-AND-
INTEGRITY HOLDINS LIMITED
- -----------------------------------------------------------------
SHARE SALE AND PURCHASE AGREEMENT
- -----------------------------------------------------------------
PATRICK DONAGHY & CO.,
SOLICITORS,
13/16 DAME STREET,
DUBLIN 2.
PCD/SS
<PAGE>
<TABLE>
<CAPTION>
INDEX TO CLAUSES PAGE NUMBERS
- ---------------- ------------
<S> <C>
1 Interpretation 3
2 Agreement for Sale and Purchase 8
3 Purchase Consideration 8
4 Completion 9
5 Post Completion 11
6 Warranties and Representations 12
7 Warrantor Protection Provisions 13
8 Restrictive Covenants of Vendor 14
9 General 15
Schedule 1 Vendor's Particulars 18
Schedule 2 Details of each Group Company 20
Schedule 3 Warranties 27
Schedule 4 Deed of Indemnity 51
Schedule 5 Short Particulars of the Properties 62
Signatures 63
</TABLE>
<PAGE>
This Agreement is dated the day of December 1998
and made between:
<PAGE>
"Territory" The Republic of Ireland.
"VAT Act" the Value Added Tax Act, 1972.
"Vendor's Solicitors" Patrick Donaghy & Co.
"Warranties" the warranties and representations
contained in clause 6 and Schedule 3.
"Warranty Claim" any claim made by the Purchaser for
breach of any of the Warranties or any
claim made by any Group Company or the
Purchaser under the Deed of Indemnity.
"Warrantor" The Vendor - other than the IDA Ireland
and Brian Kearney.
1.1.2 All references to a statutory provision shall be construed as
including references to:
(a) any statutory modification, consolidation or re-enactment
(whether before or after the date of this Agreement) for the
time being in force;
(b) all statutory instruments, regulations or orders from time to
time made pursuant thereto;
(c) any statutory provisions of which a statutory provision is a
modification, consolidation or re-enactment.
1.1.3 Any reference to a person shall be construed as a reference to any
individual, firm, company, corporation, government, state or agency
of a state, or any association or partnership (whether or not having
separate legal personality) of two or more of the foregoing.
1.1.4 Any reference to the Vendor includes, where appropriate, his
personal representatives.
1.1.5 Any reference to a statutory provision shall be construed as a
reference to the laws of Ireland unless the context otherwise
indicates.
1.1.6 Except where the context otherwise requires words denoting the
singular include the plural and vice versa; words denoting any one
gender include all genders.
1.1.7 Unless the context otherwise requires, reference to a clause or
sub-clause, paragraph, sub-paragraph, recital, or a Schedule is a
reference to a clause or a sub-clause, paragraph, sub-paragraph,
recital of or a Schedule as the case maybe of or to this Agreement
and the expressions "this Agreement" and "the Agreement" as used in
any of the Schedules shall mean this Agreement and any references to
"this Agreement" shall be deemed to include the Schedules to this
Agreement.
6
<PAGE>
1.1.8 Any statement, representation or warranty which is qualified by the
expression "to the best of the knowledge, information and belief of
the Warrantor" or "so far as the Warrantor is aware" or any similar
expression shall be deemed to include a warranty given by the
Warrantor that such statement, representation or warranty has been
made after due and careful enquiry.
1.1.9 Words and phrases the definitions of which are contained or referred
to in Section 2 of the Companies Act, 1963 shall be construed as
having the meaning thereby attributed to them.
1.2 Where any party to this Agreement is more than one person:-
(a) the Warranties, agreements and obligations contained in this
Agreement on the part of such parties shall be construed and take
effect as joint and several Warranties, agreements and obligations
and the act or default of any one of them shall be deemed to be the
act or default of each of them.
(b) reference to that party shall refer to each of those persons or any
of them as the case may be;
(c) the benefits contained in this Agreement in favour of such party
shall be construed and take effect as conferred in favour of all
such persons collectively and each of them separately.
1.3 The definition of "the Company" where used in relation to and in the
Warranties shall include each Group Company as and where the context so
requires
1.4 Headings in this Agreement are for convenience of reference only and do not
affect the construction or interpretation of any provision.
1.5 This Agreement shall in all respects be governed by and construed in
accordance with the laws of Ireland.
7
<PAGE>
2. AGREEMENT FOR SALE AND PURCHASE.
2.1 Subject to the terms and conditions of this Agreement, the Vendor as
beneficial owner shall sell and the Purchaser in reliance upon, inter alia,
the Warranties, shall purchase the Shares free from all Encumbrances and
with the benefit of all rights attaching to them, with effect from the date
of this Agreement.
2.2 The Purchaser shall not be obliged to complete the purchase of any of the
Shares unless the purchase of all the Shares is completed simultaneously in
accordance with the provisions of this Agreement.
2.3 Each Vendor hereby waives any pre-emption rights he may have in relation to
any of the Shares under the Articles of Association of the Company or
otherwise.
3. PURCHASE CONSIDERATION.
3.1 The Purchase Consideration shall be:
(a) the sum of L791,096.00 and
(b) 1365 ordinary shares in the Purchaser, which shall be divided in the
proportions set out in Column 3 of Schedule 1. The Vendor hereby
authorises the Purchaser to pay the Purchase Consideration to the
Vendor's Solicitors whose receipt shall be sufficient evidence of
payment and shall operate as a good discharge to the Purchaser who
shall not be concerned as to the distribution of the Purchase
Consideration to the Vendor.
3.2 The Purchase Consideration paid by the Purchaser for the purchase of the
Shares pursuant to Clause 3.1 hereof shall be deemed to be reduced by the
amount, if any, paid pursuant to a Warranty Claim.
3.3 In so far as that portion of the consideration referred to at clause 3.1
(b) above in concerned: these shares excluding the shares which the IDA
Ireland and Brian Kearney are entitled to as per column 3 of Schedule 1
shall be held in escrow by the Vendors Solicitors for the period of one
year from the date hereof pursuant to the form of Escrow Agreement
contained in the sixth schedule hereto and
3.4 The Vendor undertakes with the Purchaser not to sell or otherwise dispose
of the shares referred to in Clause 3.1.(b) on or before the 31st January,
2000 provided always that he shares the subject of the Escrow Agreement may
be dealt with prior to the date in accordance with the provisions of the
Escrow Agreement.
4. COMPLETION
4.1 Completion of the sale and purchase of Shares shall take place at the
offices of the Purchaser's Solicitors.
At Completion:-
4.1.1 the Vendor shall deliver to the Purchaser and/or its nominees:-
(a) duly executed share transfers in respect of the Shares (and
of all of the issued shares of each Group Company not
registered in the name of a Group Company) and surrender the
relevant share certificates in relation to each
8
<PAGE>
Group Company (or in the case of any share certificates
found to be missing, an express indemnity, in a form
satisfactory to the Purchaser);
(b) such waivers or consents as are required to enable the
Purchaser and/or its nominees to be registered as the
holders of the Shares;
(c) in relation to each Group Company the statutory books,
records and registers (duly written up-to-date), the common
seal, the certificate of incorporation (including any
certificates of change of name), the title deeds to the
Properties and all documents, contracts, licenses,
agreements, insurance policies, records, papers,
correspondence, files and books of trading and account;
(d) the Deed of Indemnity duly executed by the parties thereto;
(e) a copy of the memorandum and articles of association of
each Group Company certified by the secretary of each Group
Company as a true, complete and accurate copy as of the date
of Completion;
(f) all such other consents, approvals, clearances or licenses
of governmental, regulatory or other agencies or persons in
connection with the sale and purchase of the Shares as are
necessary;
(g) copies of all bank mandates of each Group Company together
with copies of statements of all bank accounts as at a
date not earlier than the day immediately preceding the
date of Completion and all cheque books of each Group
Company in current use and the cash book balances of each
Group Company as at the date of Completion with
reconciliation statements reconciling such balances with the
bank statements referred to above;
(h) all credit cards in the name of or for the account of each
Group Company in the possession of any officer or employee
of each Group Company resigning as at the date of
Completion;
(i) the written resignation of the auditors of each Group
Company containing confirmation in accordance with the
provisions of Section 185(2)(a) of the Companies Act, 1990
that there are no circumstances connected with their
resignation which ought to be brought to the attention of
the members or creditors of the relevant Group Company and
incorporating an acknowledgement that they will have no
claim against any of the relevant Group Company in respect
of compensation for loss of office or on any account
whatsoever including fees for services rendered.
(j) the original of any power of attorney under which any
document required to be delivered to the Purchaser under
this clause has been executed;
(k) a Certificate of Title relating to the Properties provided
by the Vendor's Solicitors in a form approved by the
Purchaser's Solicitors.
(l) letters of resignation under seal from Brian Kearney for
each Group Company resigning with effect from termination of
the meeting of the Board referred to at clause 4.1.2(c)
hereof from his directorships in any Group Company,
containing an acknowledgement that he has no claim against
any
9
<PAGE>
Group Company (as the case may be) in respect of breach of
contract, compensation for loss of office or otherwise
howsoever arising Mr. Kearney, as shareholder in Next
Financial Development Limited (Next) will procure the
non-employment of the Next Contract with the Company:- for
which he shall be paid the consideration secondly appearing
opposite his name in Schedule I hereto.
4.1.2 The Vendor shall procure:
(a) the discharge of all monies owing to each Group Company
(whether then due for payment or not) by the Vendor or the
directors or any Group Company or by any of them or by any
Connected Person;
(b) the release of any and all guarantees or indemnities or
security given by any Group Company for or on behalf of the
Vendor or the directors of any Group Company or any of
them or any other person;
(c) that a meeting of the Board (and a meeting of the
directors of any Group Company as the case may be) is held
at which, inter alias:-
(i) the share transfers referred to in clause
4.1.1(a) are approved (subject only to stamping);
(ii) such persons as the Purchaser may nominate are
appointed as directors, auditors and solicitors
of each Group Company with immediate effect;
(iii) all existing mandates for the operation of bank
accounts of each Group Company are revoked and
new mandates are issued giving authority to such
persons as the Purchaser may nominate;
(iv) the registered office of each Group Company is
changed to 44-45 St. Stephen's Groen, Dublin 2;
(v) the Company approves and authorizes the
execution of the Deed of Indemnity;
(vi) the resignation of the auditors of each Group
Company is accepted;
4.1.3 The Vendor shall:
(a) assign and/or deliver to a Group Company any asset
whatever (including bank balances, agencies or appointments)
in his name or in the name of a company or companies
controlled by him which asset is related to the business of
any Group Company carried on at Completion;
(b) irrevocably waive any claims against any Group Company
its agent, or employees which he may have outstanding at
Completion.
4.1.4 The Purchaser shall:
(a) subject to the compliance by the Vendor with all of his
obligations under clause 4.1.1, 4.1.2 and 4.1.3 pay the
Purchase Consideration by way of bank
10
<PAGE>
draft to the Vendor's Solicitors in accordance with
clause 3;
4.2 As and from completion while Paul Carroll is the sole nominee of the
Purchaser to the Board of each Group Company he shall be deemed on each
vote taken thereat to have four votes.
5. POST COMPLETION:-
5.1 The Purchaser shall complete the stamping of the share transfers
referred to in clause 4.1.1(a) as soon as practicable. Prior to such
stamping being completed, the Vendor shall co-operate in any manner
reasonably required by the Purchaser for the convening of any general
meetings required by the Purchaser, including the completion of proxy
forms on a timely basis and generally shall act in all respects as
the nominee of and in accordance with the reasonable directions of
the Purchaser;
5.2 The Vendor and the Purchaser shall, within five Business Days of
Completion, give to each Group Company such notice as is required by
Section 53 of the Companies Act, 1990.
11
<PAGE>
6. WARRANTIES
6.1 In consideration of and as an inducement to the Purchaser entering into
this Agreement the Warrantor warrants and represents to the Purchaser,
subject to clause 7 that:
6.1.1 the Vendor and the Warrantor have and will have full power and
authority to enter into and perform this Agreement and the Deed
of Indemnity which constitute or when executed will constitute
binding obligations on him in accordance with their respective
terms;
6.1.2 the Shares constitute the whole of the allotted and issued share
capital of the Company and are fully paid;
6.1.3 there is no Encumbrance on, over or affecting the Shares and
there is no agreement or arrangement to give or create any
Encumbrance and no claim has been or will be made by any person
to be entitled to any of the foregoing;
6.1.4 the Vendor is entitled to transfer the full legal and beneficial
ownership of the Shares and any share in any Group Company as
provided in clause 4.1.1 (a) to the Purchaser on the terms of
this Agreement without the consent of any third party;
6.1.5 the Group Companies listed in Schedule 2 are all the present
Subsidiaries of the Company;
6.1.6 the information in Schedule 2 relating to each Group Company is
true and accurate in all respects;
6.1.7 the Company (or where specified a Group Company) is the sole
beneficial owner of the shares in each Group Company listed in
Part 2 of Schedule 2 free from any Encumbrances;
6.1.8 save as fully and fairly disclosed in the Disclosure Letter, the
Warranties are true and accurate in all respects;
6.1.9 the contents of the Disclosure letter are true and accurate in
all respects and fully and fairly disclose every matter to which
they relate.
6.2 Each of the Warranties is separate and independent and without prejudice
to any other Warranty and, except where expressly stated otherwise, no
clause of this Agreement shall govern or limit the extent or
application of any other clause.
6.3 The rights and remedies of the Purchaser in respect of any breach of the
Warranties shall not be affected or extinguished by Completion, by any
investigation made by it or on its behalf into the affairs of any Group
Company, by its rescinding or failing to rescind this Agreement, or
failing to exercise or delaying the exercise of any right or remedy, or
by any other event or matter, except a specific and duly authorised
written waiver or release, and no single or partial exercise of any
right or remedy shall preclude any further or other exercise.
6.4 None of the information supplied by any Group Company or its professional
advisers to the Warrantor or his agents, representatives or advisers in
connection with the Warranties and the contents of the Disclosure
Letter, the Deed of Indemnity or otherwise in relation to the business
or affairs of any Group Company, shall be deemed a representation,
warranty or guarantee of its accuracy by the Group Company to the
Warrantor and the Warrantor waives
12
<PAGE>
any claims against the Group Company (and its employees and agents) which
he might otherwise have in respect of it.
6.5 The Purchaser acknowledges that it has not been induced to enter into
this Agreement by any representation or warranty other than the
Warranties.
6.6 Reference in the Warranties to "the Company" shall include each Group
Company to the intent that the Warranties shall apply to and be given in
respect of each Group Company.
7. WARRANTOR PROTECTION PROVISIONS
7.7.1 The liability of the Warrantor in relation to the Warranties
shall cease on 31st January 2000 in relation to claims other
than for Taxation and on 31st January 2005 in relation to claims
for Taxation and under the Deed of Indemnity save as regards an
alleged specific breach of which notice in writing (containing
details of the event or circumstance giving rise to the breach,
the basis upon which the Purchaser is making a claim against the
Warrantor and an estimate (where available) of the amount of
liability which may result) has been given to the Warrantor
prior to the relevant date.
7.7.2 The total liability of the Warrantor under the Warranties and
the Deed of Indemnity shall not in any event exceed L400,000 and
the reasonable costs and expenses or the Purchaser in pursuing
claims under the Warranties and/or the Deed of Indemnity.
7.7.3 The provisions of this Section 7.7 shall not limit the liability
of the Warrantor for any Warranty Claim relating to:-
(a) the Vendor's title to, or the status or validity of the
Shares; or
(b) any claim which arises or is delayed as a result of
dishonesty, fraud, wilful misconduct or wilful concealment
by the Vendor or the Warrantor.
7.7.4 There shall not be any liability for any Warranty Claim unless
the aggregate liability (or what would be the aggregate
liability apart from this paragraph 7.7.4) exceeds L10,000.
13
<PAGE>
8. RESTRICTIVE COVENANTS OF VENDOR
8.1 For the purpose of assuring to the Purchaser the full benefit of the
business and goodwill of the Company and each Group Company, the Vendor
other than the IDA Ireland and Brian Kearney undertakes with the Purchaser
for his own benefit and for the benefit of each Group Company that:-
8.1.1 he shall not make use of or disclose to any person and shall use
his best endeavours to prevent the publication or disclosure of
any information concerning the business, accounts or finances of
any Group Company or any of their dealings transactions and
affairs or any trade secrets, confidential information,
processes, operations or formulae in his knowledge or possession;
8.1.2 for the period of two years after Completion the Vendor will not
either solely or jointly, directly or indirectly engage in the
business of the manufacture, sale, marketing, dealing in or
distribution of goods and services similar to or competing
with goods and services manufactured, sold, marketed, dealt in
or distributed by any Group Company at the date hereof in the
Territory nor become involved or connected with nor carry on,
participate assist, be engaged or concerned or interested
(except as the holder or beneficial owner for investment
purposes of not more than 5% nominal value of any class of
securities listed or dealt in on a recognised stock exchange) in
the Territory during the said period in any company or firm
carrying on any such business whether as employee, director,
partner, consultant, agent, shareholder or sole proprietor or
otherwise howsoever;
8.1.3 for the period of two years after Completion either on his own
account or for any other person directly or indirectly solicit,
interfere with or endeavour to entice away from any Group
Company any person who to his knowledge is at Completion or has
during the two years preceding Completion been a client, customer
or employee of, or in the habit of dealing with any Group
Company.
8.1.4 he shall not interfere either directly or indirectly or take any
such steps as may interfere with the continuance of supplies to
any Group Company (or the terms relating to such supplies) from
any suppliers who are at the Completion or who have been at any
time during the period of two years immediately preceding
Completion supplying materials, components, products, goods or
services to any Group Company.
8.1.5 he shall procure that no company owned or controlled by him (and,
insofar as he is able to ensure the same, none of their
Subsidiaries) will act in such a way as would be a contravention
of the obligations contained in this Clause 8.1 if they were
themselves so to act.
8.1.6 for the purpose of this clause and all the Warranty and Tax
Indemnity provisions hereof the term the Vendor shall exclude
the IDA Ireland and Brian Kearney.
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<PAGE>
8.2 The parties hereto consider that the restrictions set out in
clause 8.1 are reasonable and necessary in the circumstances for the
protection of the legitimate interests of the Purchaser but if any
such restrictions shall be adjudged or held to be void or
unenforceable by any court, regulatory authority or agency of
competent jurisdiction for whatever reasons but would be valid if
part of the wording were deleted or the period of time reduced or
the areas reduced in scope the said restrictions shall apply with
such modification as may be necessary to make them valid effective
and enforceable.
9 GENERAL
9.1 No announcement shall be made in respect of the subject matter of
this Agreement unless specifically agreed between the parties or
it is an announcement required by law issued after prior consultation
between the parties and not until two weeks following completion.
9.2 If any of the Shares shall at any time be sold or transferred, the
benefit of each of the Warranties and Deed of Indemnity may be
assigned to the purchaser or transferee who shall accordingly be
entitled to enforce each of the Warranties and the Deed of Indemnity
against the Warrantor as if he were named in this Agreement as the
Purchaser.
9.3 This Agreement shall enure to the benefit of and be binding upon
each party's successors and permitted assigns and personal
representatives (as the case may be) but, except as expressly
provided, none of the rights of the parties under this Agreement
including the Warranties and the Deed of Indemnity may be assigned
or transferred.
9.4 Subject to clause 9.5, all expenses incurred by or on behalf of the
parties, including all fees of agents, representatives, solicitors,
accountants and actuaries employed by any of them in connection with
the negotiation, preparation or execution of this Agreement, shall be
borne solely by the party who incurred the liability and no Group
Company shall have any liability in respect of them.
9.5 If the Purchaser determines or rescinds this Agreement under any of
its provisions or under the general law then, in addition to any right
or remedy which it may have against the Vendor for breach of this
Agreement or the Warranties, the Vendor shall indemnify the Purchaser
for all costs, charges and expenses incurred by it in connection with
the negotiation, preparation and determination or rescission of this
Agreement and all matters which it contemplates.
15
<PAGE>
9.6 Any notice or other communication whether required or permitted to
be given hereunder shall be given in writing and shall be deemed to
have been duly given if delivered by hand to the addressee or if sent
by pre-paid post addressed to the party to whom such notice is to be
given at the address set out for such party herein (or such other
address as he or it may from time to time designate to all other
parties hereto in accordance with the provisions of this clause
9.6) and any such notice or other communication shall be deemed to
have been duly given if delivered by hand at the time of delivery
and if sent by post as aforesaid forty eight hours after the same
shall have been posted.
9.7 Any liability to any party under the provisions of this Agreement
may in whole or in part be released, varied, compounded or
compromised by such party in its absolute discretion as regards any
party under such liability without in any way prejudicing or
affecting its rights against any other party under the same or a
like liability whether joint and several or otherwise. A waiver by
any party of any breach of the terms, provisions or conditions of
this Agreement or the acquiescence of a party hereto in any act
(whether of commission or omission) which but for such acquiescence
would be a breach of aforesaid shall not constitute a general waiver
of such term, provision or contribution or of any subsequent act
contrary thereto.
9.8 This Agreement may be executed in any number of counterparts and by
the different parties hereto on separate counterparts each of which
when executed and delivered shall constitute an original, all such
counterparts together constituting but one and the same instrument.
9.9 This Agreement together with the Deed of Indemnity and the
Disclosure Letter shall supersede, cancel and replace any and all
previous agreements made between any of the parties hereto relative
to its subject matter.
9.10 At the request of the Purchaser the Vendor shall (and shall procure
that any other necessary parties shall) execute and do all such
documented acts and things as may reasonably be required subsequent
to Completion by the Purchaser in order to perfect the right, title
and interest of the Purchaser to and in the Shares and in the shares
in the Group Companies and to procure the registration of the
Purchaser or his nominee as the registered holder of the Shares and
the shares in each Group Company as appropriate.
9.11 Each of the parties hereto hereby agrees for the benefit of the
other and without prejudice to the right to take proceedings in
relation hereto before any other court of competent jurisdiction,
that the courts of Ireland shall have jurisdiction to hear and
determine any suit, action or proceedings that may arise out of or
in connection with this Agreement and for such purposes irrevocably
submits to the jurisdiction of such courts.
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9.12 The Purchaser hereby irrevocably authorises and appoints Messrs
Ivor Fitzpatrick & Co. to accept service of all legal process
arising out of or in connection with this Agreement and service
on Messrs. Ivor Fitzpatrick & Co. shall be deemed services on The
Purchaser.
9.13 The Vendor hereby irrevocably authorises and appoints Messrs.
Patrick Donaghy & Co. to accept service of all legal process
arising out of or in connection with this Agreement and service
on Messrs. Patrick Donaghy & Co. shall be deemed services on the
Vendor.
IN WITNESS WHEREOF this Agreement has been duly executed on the date shown at
the beginning of this Agreement.
17
<PAGE>
SCHEDULE 1
Vendor's Particulars
<TABLE>
<CAPTION>
Vendors names and addresses Number of Properties of
Shares held Purchase Consideration
Cash - Shares
<S> <C> <C> <C>
IDA Ireland, 715 275,000 - 49844
Wilton Park House,
Dublin 2.
Brian Kearsey, 595 228,944 - 41479
Rabeen, Brittas,
Co. Dublin. Per C???? 50,000 - 9062
4.1.(1)
Mark Howell, 106 26,500 - 4883
18 Orlegh Downs,
Templeagac,
Dublin 16.
William Reid, 124 31,000 - 5619
30 Eaton Wood, Shankill,
Co. Dublin.
Brendon Redmond, 98 24,500 - 4440
16 Friarswood Road,
Goatstown, Dublin 14.
Leo McCarthy, 124 31,000 - 5619
4 Marley Walk,
Marley Grange,
Rathfarsham,
Dublin 16.
Leo Hofferman, 53 13,250 - 2401
41 Shomick Grove,
Skerries,
Co. Dublin.
Paul Clancy, 53 13,250 - 2401
18 Oaklands Church Lane,
Greystones,
Co. Wicklow.
</TABLE>
18
<PAGE>
Vendor's Particulars
<TABLE>
<CAPTION>
Vendors names and addresses Number of Properties of
Shares held Purchase Consideration
Cash - Shares
<S> <C> <C> <C>
Declan McGonagle, 53 13,250 - 2401
6 Brookpark, Finnstown Abbey,
Lucan,
Co. Dublin.
Peter Noonan, 98 24,500 - 4447
130 South Circular Road,
Dublin 8.
Ed Clear, 45 11,250 - 2039
Sorrell,
Bellvue,
Delgany,
Co. Wicklow.
John Trayner, 45 11,250 - 2039
60 Broadford Close,
Ballisteer,
Dublin 16.
Treasury 156 37,500 - -
-----------------------------------
Total Shares 2265 791,096 136588
-----------------------------------
</TABLE>
19
<PAGE>
Directors: Name Address
Brian Kearney Raheen, Brittas, Co. Dublin.
Mark Howell 18 Orlagh Downs,
Templeogue, Dubin 16.
Secretary: Mark Howell 18 Orlagh Downs,
Templeogue, Dubin 16.
NAME OF SUBSIDIARY: TECHSONIX LIMITED
Registered number:
Share capital:
authorised:
issued: 210 Shares issued as follows:
175 - Ravplot Limited
19 - Brian McNaughton
15 - Bermingham Technology Limited
Registered Office:
Directors: Name Address
Brian Kearney Raheen, Brittas, Co. Dublin.
Keith Venner
Mark Howell 18 Orlagh Downs,
Templeogue, Dubin 16.
Secretary: Mark Howell 18 Orlagh Downs,
Templeogue, Dubin 16.
NAME OF SUBSIDIARY: PROGRESS SYSTEMS LIMITED
Registered number:
Share capital:
authorised:
issued: 2 Shares issued - 1 to the Company and
1 to Brian Kearney in trust for the Company.
Registered Office:
23
<PAGE>
Directors: Name Address
Brian Kearney Raheen, Brittas, Co. Dublin.
Declan McGonigle 6 Brookpark,
Finnstown Abbey, Lucan,
Co. Dublin.
Mark Howell 18 Orlagh Downs,
Templeogue, Dubin 16.
Secretary: Mark Howell 18 Orlagh Downs,
Templeogue, Dubin 16.
24
<PAGE>
SCHEDULE 3
WARRANTIES
1. INFORMATION
1.1 All information given by or on behalf of the Company or the
Vendor to the Purchaser or to its professional advisors in the
course of negotiations leading to this Agreement was when given
and is as the date hereof true and accurate in all respects and
so far as such information is expressed as a matter of opinion
such opinions were when given and are at the date hereof truly
and honestly held and not given casually or recklessly or
without due regard for the accuracy. There is to the best of the
knowledge information and belief of the Warrantor no fact or
matter which has not been disclosed in writing to the Purchaser
or to its professional advisors which would render such
information untrue or misleading or which on the basis of the
utmost good faith ought to be disclosed to an intending purchaser
of shares in the Company or the disclosure of which might
reasonably affect the willingness of the Purchaser to purchase
the Shares on the terms (including price) of this Agreement.
1.2 The information set out in the Reclials and in the Schedules to
this Agreement is true, complete and accurate in all respects.
2 CONSTITUTION OF THE COMPANY
21. The copy of the memorandum and articles of association of the
Company delivered by the Vendor to the Purchaser at Completion
is true, complete and accurate.
2.2 The copy of the memorandum and articles of association referred
to as 2.1 above has embodies therein or annexed thereto a copy
of every such resolution or agreement as is referred to in
Section 143 (4) of the Companies Act, 1963. Neither the Company
nor any class of its members has passed any further resolutions
(other than resolutions relating to business at annual general
meetings which was not special business).
2.3 The Company has complied with the provisions of the CA and all
returns, particulars, resolutions and other documents required
under any legislation to be delivered on behalf of the Company
to the Registrar of Companies or to any other authority
whatsoever have been properly made and delivered.
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<PAGE>
remuneration, emoluments, expenses or other payments or
benefits whatsoever (whether or not gratuitous) other than
those which are deductible from the profits of the Company in
computing its corporation tax.
(f) No debt owing to the company has been deferred, released,
reduced, subordinated or written-off or has proved to any
material extent irrecoverable.
(g) The Company has paid its creditors in accordance with their
respective credit terms.
(h) There has not been any material damage, destruction or loss
(whether or not covered by insurance) to or affecting any
assets of the Company.
(i) No commitment on capital account has been created or entered
into.
(j) No liabilities have been incurred other than in the ordinary
and usual course of business.
(k) The authorised share capital of the Company has not been
increased and no share or loan capital in the Company has been
issued or agreed to be issued.
6 RECORDS
6.1 All proper and necessary books of account minute books registers
and records have been maintained by the Company are in its possession
and contain information in accordance with generally accepted
principles relating to all transactions to which the Company has been
a party and all such books registers and records are duly written up
to date and do not contain any material inaccuracies.
6.2 All documents relating to the Company required to be filed with the
Registrar of Companies pursuant to the CA or under any other statute
or instrument in force have been duly filed up to date and all
statutory records required to be kept by the Company have been
properly kept and will be so kept.
6.3 The register of members of the Company accurately and sufficiently
records its members from time to time and the Company has not
received any notice of any intended application or proceedings to
rectify the said register.
6.4 All the accounts, books, ledgers, financial and other records, of
whatsoever kind, of each Company:-
(a) have been fully, properly and accurately kept and completed;
(b) do not contain any material inaccuracies or discrepancies of
any kind;
(c) give and reflect a true and fair view of its trading
transactions and its financial, contractual and trading
position.
6.5 The Company is in possession of all its books, records, papers and
deeds and documents of title.
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<PAGE>
7 BORROWING
7.1 Full and accurate details of all overdrafts, loans or other
financial facilities outstanding or available to the Company at
Completion are contained in the Disclosure Letter and true and correct
copies of all documents relating thereto are annexed to the Disclosure
Letter and the Company has not done anything whereby the continuance
of any such overdrafts, loans or other financial facilities in full
force and effect might be affected or prejudiced and the Company is
not in default under any instrument constituting any indebtedness or
under any guarantee of, or security or indemnity for, any
indebtedness and there is no reason why any such indebtedness,
guarantee, security or indemnity should be called or the
liabilities thereunder accelerated before their due date (if any) or
any loan facilities terminated.
7.2 Save as disclosed in the Disclosure Letter pursuant to Warranty 7.1
hereof, there are no debts owing by or to the Company other than debts
which have arisen in the ordinary course of business and the Company.
7.3 Except for the bank accounts disclosed in the Disclosure Letter the
Company does not have any outstanding loan capital and has not
borrowed any money which it has not repaid and has not lent any money
which has not been repaid to it and does not own the benefit of any
debt (whether present or future) other than debts due to it in the
ordinary course of business.
7.4 The Company has no bank accounts or deposit accounts other than
those disclosed in the Disclosure Letter showing the position as of
the day prior to the execution of this Agreement in relation to the
credit and debit balances thereon and since such statements there have
been no payments out of any such accounts save for routine payments in
the ordinary course of business.
7.5 The total amount borrowed by the Company from its bankers does not
exceed its approved facilities and the total amount borrowed by the
Company from whatever source does not exceed any limitation on its
borrowing contained in its memorandum and articles of association or
in any debenture or loan stock deed or other deed or document
executed by it.
8 INSOLVENCY
8.1 No order has been made or petition presented or resolution passed
or any proceedings or action taken for the winding up of the Company
or for or with the view to appointing a receiver, an examiner,
administrator, trustee or other similar officer to the Company nor has
any distress, execution, sequestration, attachment or other process
being levied or entered upon or sued out against any property or asset
of the Company.
29
<PAGE>
8.2 The Company has not ceased payment of any debt and is not insolvent
or unable to pay its debts within the meaning of Section 214 of the
Companies Act 1963 or Section 2 of the Companies (Amendment) Act
1990 and no encumbrancer has taken possession or attempted to take
possession of or exercised or attempted to exercise any power of sale
in respect of the whole or any part of the undertaking, property,
assets or revenues of the Company and no receiver has been appointed
or could be appointed by any person over the whole or any part of the
undertaking, property, assets or revenues of the Company and there is
no unfulfilled or unsatisfied judgement, ruling, order, decree or
directive outstanding against the Company and there has been no delay
by the Company in the payment of any obligation due for payment.
9 INTERESTED PARTIES
9.1 No indebtedness or liability (whether actual or contingent and
whether or not quantified or disputed) and no contract, commitment
or arrangement is outstanding between the Company and the Vendor or
any Connected Person.
9.2 Neither of the Vendor nor any Connected Person has any right or
interest, directly or indirectly, in any business which is or is
likely to be or to become competitive with the business of the
Company.
9.3 Neither the Vendor nor any Connected Person is entitled to any
claim of whatsoever nature against the Company and neither the Vendor
nor any Connected Person has assigned to any person the benefit of any
such claim to which he would otherwise have been entitled.
10 LITIGATION
The Company is not engaged in any litigation or arbitration proceedings
or any dispute and has not been served with any notice making it a party to
any litigation, arbitration, prosecution or other legal proceedings or to
any dispute save debt collection by the Company in the ordinary course of
business, and no litigation, arbitration, prosecution or other legal
proceedings are threatened or pending either by or against the Company and
there are no facts known to the Vendors which might give rise to any such
proceedings or to any dispute and in particular but without prejudice to the
generality of the foregoing the Company is not liable to make any payment to
any person under the Redundancy Payments Act of 1967 and it has complied as
respects all its employees with the Holidays (Employees) Act, 1973; the
Minimum Notice and Terms of Employment Act, 1973; the Anti-Discrimination
(Pay) Act 1974; the Protection of Young Persons (Employment) Act, 1977;
the Unfair Dismissals Act, 1977; the Protection of Employment Act 1977; the
Employment Equality Act 1977; the Worker Protection (Regular Part-Time
Employees) Act, 1991; Payment of Wages Act, 1991; Terms of Employement
(Information) Act, 1994; Maternity Protection Act, 1994 and the Adoptive
Leave Act, 1995.
11 INSURANCE
The policies of insurance which are maintained by the Company afford the
Company adequate cover against such risks as companies carrying on the
same type of business as the Company commonly cover by insurance and in
particular, but without limitation, adequately
30
<PAGE>
Insure against employer's liability and third party public liability
(including, without limitation, product liability) and insure the assets
of the Company against fire and other usual risks in their full
replacement value (including professional fees) and all such policies of
insurance are in full force and effect and there are no circumstances
which might lead to any liability under such insurance been avoided by the
insurers or the premiums being increased and Completion will not have the
affect of terminating, or entitling any insurer to terminate, cover under
any such insurance and no claim is outstanding by the Company under any
such policy of insurance and there are no circumstances likely to give
rise to any such claim.
12 INTELLECTUAL PROPERTY
12.1 The business of the Company as now carried on does not involve
the unlicensed use of confidential information, know-how or
technical data and does not and is not likely to infringe any
Intellectual Property rights of any other person.
12.2 Particulars of all Intellectual Property used by the Company in
connection with its business (all of which are beneficially owned
exclusively by and registered in the name of the Company and none
of which will lapse before Completion) are contained in the
Disclosure Letter and no licence or other right in respect thereof
has been granted or agreed to be granted and no such rights are
being used, claimed, opposed or attached by any other person.
12.3 The Company has not granted any licences or entered into any
agency agreements or distribution agreements save in the ordinary
course of business at arms length and which contain no unduly
onerous or restrictive terms and which have been entered into for
the benefit of the Company and the development of its business.
13 AGREEMENTS AND ARRANGEMENTS
13.1 There are in force no powers of attorney given by the Company and
no person, as agent or otherwise, is entitled or authorised to bind
or commit the Company to any obligation not in the ordinary course
of the Company's business.
13.2 The Company is not party to or bound by and no asset of the
Company is affected by:-
(a) any contract of guarantee, indemnity or suretyship;
(b) any contract for services (other than contracts in the
normal course of business or for the supply of electricity or
normal office services);
(c) any agreement or arrangement which may be terminated as a
result of any change in the control management or
shareholders of the Company;
(d) any material, long term, unusual or onerous contract,
agreement, commitment, obligation or arrangement;
(e) any contract made otherwise than in the ordinary and usual
course of business of the Company;
31
<PAGE>
(f) any agreement or arrangement which involves or is likely to
involve the supply of goods by or to the Company the
aggregate sales value of which would represent in excess of
10% of the turnover of the Company by reference to the
Accounts;
(g) any agreement or arrangement which in any way restricts the
freedom of the Company to carry on the whole or any part of
its business in any part of the world in such manner as it
thinks fit;
(h) any agreement, decision or concerted practice which has as
its object or effect the prevention, restriction or
distortion in competition of trade in any goods or services
in any market or territory;
(i) any agreement or arrangement otherwise than by way of
bargain at arms length;
(j) any sale or purchase option or similar contract or
arrangement affecting any asset owned or used by the Company
or by which the Company is bound;
(k) any contract which cannot readily be fulfilled or performed
by the Company on time or without undue or unusual
expenditure of money or effort;
(l) any agreement or arrangement whereby the Company is, or has
agreed to become, a party to any exclusive manufacturing,
production, supply, distribution, agency or trading rights or
obligations; or
(m) any agreement or arrangement which involves or is likely to
involve an aggregate expenditure by the Company in excess of
L500.
13.4 The Company is not a party to any contract which by reason of the
sale of the Shares or any provision of this Agreement gives any
other contracting party the right to terminate the contract or to
be relieved of any obligation or create or increase any obligation
on the Company (whether to make payment or otherwise) to any
person.
13.5 No person with whom the Company has entered into any agreement or
arrangement is in default thereunder being a default which would
have an adverse effect on the financial or trading position or
prospects of the Company and there are no circumstances likely to
give rise to any such default.
14 ASSETS
14.1 The assets included in the Accounts or acquired since the
Accounts Date other than trading stock subsequently disposed of in
the ordinary and usual course of business or trading stock
acquired subject to retention or reservation of title by the
supplier or manufacturer thereof are fully and accurately disclosed
in the Disclosure Letter and all assets used by the Company:-
(a) are legally and beneficially owned by the Company free from
any Encumbrance or any agreement or commitment to give or
create, or any claim by any person to be entitled to any,
Encumbrance;
(b) are not the subject of any agreement for lease, hire,
hire purchase,
32
<PAGE>
conditional purchase or sale on deferred terms save as
disclosed in the Accounts;
(c) are in the possession and under the control of the Company;
(d) comprise all the assets necessary to enable the Company to
carry on its business fully and effectively in the ordinary
course.
14.2 The plant, machinery, apparatus, implements, computers, vehicles
and other chattels and equipment used in connection with the
business of the Company:-
(a) are in a good and proper state of repair and condition and
satisfactory working order and have been regularly and
properly maintained;
(b) are all capable and (subject to normal wear and tear) will
remain capable throughout the respective periods of time
during which they are each written down to a nil value in
the accounts of the Company (in accordance with generally
acceptable accountancy principles consistently applied prior
to the date hereof) of doing the works for which they were
designed or acquired; and
(c) are not expected to require replacements or additions at an
aggregate cost in excess of L5,000 within a period of twelve
months immediately after Completion;
14.3 The stock-in-trade of the Company is in good condition and is
capable of being sold by the Company in the ordinary course of its
business in accordance with its current price list without rebate or
allowance to a purchaser.
14.4 The stock-in-trade of the Company is not excessive and is
adequate in relation to the current trading requirements of the
business of the Company; and none of the stock is obsolete,
slow moving, unusable, unmarketable or inappropriate or of limited
value in relation to the current business of the Company.
15 EMPLOYEES
15.1 The particulars shown in Schedule 2 are true and complete and no
person not named therein as such is a director or shadow director
of the Company.
15.2 The particulars shown in the schedule of employees annexed to the
Disclosure Letter show all employees of the Company at the date of
this Agreement and all remuneration payable and other benefits and
privilege provided or which the Company is bound to provide to each
officer and employee of the Company and are true and complete and
accurate in all material respects.
15.3 There is not outstanding any contract of service between the
Company and any of its directors, officers or employees which is
not terminable without compensation (other than any compensation
payable by statute) on six months' notice, or less.
15.4 No officer or employee of the Company is entitled to any
remuneration, loan, commission or other emoluments of whatsoever
nature calculated by reference to the profits or sales of the
Company and the Company is not party to or bound by any share
option, profit sharing, bonus or commission scheme in respect of
any of its
33
<PAGE>
officers or employees.
15.5 Save as provided or allowed for in the Accounts:
(a) No liability has been incurred by the Company for breach of
any contract of service or for services, redundancy payments,
compensation for wrongful or unfair dismissal or breach of any
statute, or for failure to comply with any order for the
reinstatement or re-engagement of any employee, and
(b) No gratuitous payment has been made or promised by the Company
in connection with the actual or proposed termination or
suspension of employment or variation of any contract of
employment or for the supply of services of any present or
former director, employee or supplier of services.
15.6 Within a period of one year preceding the date of this Agreement,
the Company has not given notice of any redundancies to the Minister
for Enterprise and Employment, or started consultations with any
trade union, under Part II of the Protection of Employment Act, 1977
or Regulation 7 of the European Communities (Safeguarding of
Employee's Rights on the Transfer of Undertakings) Regulations, 1980.
15.7 The Company has complied in all material respects with all:
(a) legal obligations;
(b) codes of conduct or practice; and
(c) collective agreements, customs and practices
relevant to employees of trade union, and has maintained current,
adequate and suitable records regarding service.
15.8 (a) The Company has complied with all recommendations made by
Industrial Relations Officers of the Labour Relations
Commission, by Equality Officers or by the Labour Court.
(b) The Company is not involved in any material industrial or
trade dispute, or negotiation regarding a claim, with any trade
union or other group or organisation representing employees,
and there are no facts known, or which would on reasonable
enquiry be known, to the Warrantor which might indicate that
there might
16 PENSIONS
16.1 The Disclosure Letter contains a complete and accurate list and
summary description of all existing pension and death benefit schemes
(the "Pension Schemes") of the Company.
16.2 With the exception of the Pension Schemes, there are not in
existence nor has any proposal been announced or commitment given to
establish any retirement, death or disability benefit scheme for
officers or employees (or any dependant of any of them) of the Company
nor is the Company under any obligation (whether legally
34
<PAGE>
binding or established by custom to or in respect of any present or
former officers or employees (or any dependant of any of them) of the
Company with regard to retirement, death or disability benefits
pursuant to which the Company is or may become liable to make payments
and no pension or retirement or sickness gratuity is currently being
paid or has been promised by the Company to or in respect of any
present or former officer or employee (or any dependant of any of
them) of the Company.
16.3 The Pension Schemes are exempt approved schemes within the meaning
of Sections 15 and 16 of the Finance Act 1972 and the Warrantors is
not aware of any reason why such approval might be withdrawn.
16.4 A true copy of the latest actuarial valuation of each of the
Pension Schemes which is a defined benefit scheme has been disclosed
in the Disclosure Letter and the actuary who signed these valuations
is the present actuary to the Pension Schemes. There has been
disclosed in the Disclosure Letter the basis on which the Company
contributes to the Pension Schemes and the Company has, since the
date of the last actuarial valuation of the Pension Schemes,
continued and to contribute to the Pension Schemes on such basis.
16.5 On the basis of the actuarial methods and assumptions used in the
latest actuarial valuation of each of the Pension Schemes which is
a defined benefit scheme, the assets of the Pension Scheme will at
the date of this Agreement be sufficient to fund the benefits in
payment and those prospectively and contingently payable under the
Pension Scheme in respect of pensionable service credited or
completed up to completion making allowance on the basis provided
in the latest actuarial valuation for projected future increases
in salaries.
16.6 (a) All contributions and expenses due under the Pension Schemes in
respect of the period up to the date of this Agreement have been
paid and applied in accordance with the provisions of the
relevant Pension Scheme.
(b) The Pension Schemes have been duly administered in accordance
with all applicable laws, regulations and requirements (including
Revenue and trust requirements).
(c) All employees eligible for admission to membership of the
Pension Schemes have been admitted to membership as of the date
on which they became eligible (or declined membership when
offered).
(d) All death in service benefits are fully insured at normal
rates.
(e) There is no practice of granting discretionary pension
increases under the Pension Schemes.
17 SAFETY IN INDUSTRY
17.1 The Company has duly discharged its duties and performed its
obligations under, and in compliance with, the Safety in Industry
Acts 1955 and 1980 (the "SAIS") and under the Safety, Health and
Welfare at Work Act 1989 (the "SHW Act") and all regulations,
directions, notices and orders made or served thereunder and has
complied with any relevant code of practice issued by the National
Authority for Occupational Safety and Health established pursuant
to the SHW Act.
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17.2 Neither the Company or any of the Properties is subject to any
investigation or inquiry pursuant to the SAIS or the SHW Act and no
direction, notice or order has been served on the Company or any of
the Properties pursuant to the SAIS or the SHW Act and no application
has been made to court under the SAIS or the SHW Act for an order
restricting or prohibiting the use of any of the Properties or any
part thereof, nor is any prosecution threatened or pending in respect
of any possible breach of the SAIS or the SHW Act or related
regulations.
18 ENVIRONMENT
18.1 The Company and each of its operations and properties [together
with all previous owners and operators of those properties and
operations] is, and has at all times been, in compliance with all
applicable Environmental Laws (as hereinafter defined) and has
obtained all requisite Environmental Licences (as hereinafter
defined) and is, and has at all times been, in compliance with
all such Environmental Licences and there are no circumstances
which may give rise to the amendment, suspension, cancellation,
revocation or non-renewal of any such Environmental Licences or which
may lead to the imposition of any onerous or unusual conditions in
respect of any such Environmental Licences whether upon renewal
thereof or otherwise.
18.2 Neither the Company nor any of its present or past operations or
properties is or has been the subject of any outstanding or
anticipated investigation, inquiry, dispute, claim, demand, action,
suit, proceeding, litigation, notice, order, judgement, ruling,
decree, citation, prosecution or award of whatever nature in relation
to any Environmental Release (as hereinafter defined) or any
Environmental Laws or Environmental Licences and [to the best of the
information, knowledge and belief of the Warrantor there are no
circumstances which may give rise to any of the foregoing.
18.3 The Company has not been negligent and has not created a nuisance in
the maintenance or conduct of its operations or properties relative
to the Environment (as hereinafter defined).
18.4 The Company has not caused or contributed to any Environmental
Release and there are no circumstances which may give rise to any
Environmental Release by the Company.
18.5 For the purposes of this Warranty the following words and
expressions shall have the following meanings:-
1. "ENVIRONMENT" shall mean without limitation (a) any and all
buildings, structures, fixtures, fittings, appurtenances, pipes,
conduits, valves, drains, sewers, tanks, vessels and containers
whether above or below ground level, and (b) ambient air, land
surface, sub-surface strata, soil, surface water, ground water,
aquifers, river sediment, marshes, wet lands, flora and fauna.
2. "CONTAMINANT" shall mean any material, substance, chemical,
gas, solid, liquid, waste, effluent, polluting matter, noise
or contaminant which is identified or defined in or regulated
by or pursuant to any Environmental Laws or which upon release
into the Environment presents a danger to the Environment or
to the health or safety or welfare of any person.
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3. "ENVIRONMENTAL RELEASE" shall mean the spilling, leaking,
pumping, pouring, emitting, emptying, discharging,
injecting, escaping, leaching, dumping or disposing of
any Contaminant into the Environment.
4. "ENVIRONMENTAL LAWS" shall mean (a) the common law and
(b) all laws, by-laws, statutes, regulations, rules,
orders, instruments, decrees, directives, decisions,
injunctions, rulings and judgements of any government,
local government, international, supra national,
executive, administrative, judicial or regulatory
authority or agency whether of Ireland, the European
Union or elsewhere and all approved codes of practice
relating to the protection of the Environment or of human
health or safety or welfare or to the manufacture,
formulation, processing, treatment, storage, containment,
labelling, handling, transportation, distribution,
recycling, release, disposal, removal, remediation,
abatement or clean-up of any Contaminant, including
(without prejudice to the generality of the foregoing)
the provisions of the Public Health (Ireland) Act 1878,
the Local Government (Water Pollution) Acts 1977 and
1990, the Fisheries (Consolidation) Act 1959, the Air
Pollution Act 1987, the European Communities (Waste)
Regulations 1979, the Waste Management Act, 1996, the
European Communities (Environmental Impact Assessment)
Regulations 1989-1996 and the Local Government (Planning
and Development) Acts 1963-1993, The Environmental
Protection Agency Act, 1992 and any and all regulations,
orders and notices made or served thereunder or pursuant
thereto.
5. "ENVIRONMENTAL LICENCE" shall mean any permit, licence,
approval, consent or authorisation required by or issued
pursuant to any applicable Environmental Laws.
19 PROPERTIES
19.1 (a) The Properties comprises all the lands and buildings
owned, occupied or used by the Company or in which the
Company has any interest and Schedule 5 contains full and
accurate particulars of the title of the Company thereto
and the description of the Properties contained in
Schedule 5 is a sufficiently accurate and complete
description of such Properties for the purpose of an
assurance mortgage or charge of the whole thereof.
(b) The Company is the legal and beneficial owner of the
Properties and has a good and marketable title to the
Properties for the tenure specified in Schedule 5.
(c) All original deeds and documents necessary to prove title
to the Properties are in the possession of the Company
and not held to the order of any other person or are in
the possession of a person other than the Company and
held to the order of the Company and such deeds and
documents have been fully stamped and were appropriate
have been adjudicated duly stamped by the Revenue
Commissioners and there are no deeds or documents of
title in relation to the Properties which require to be
registered in the Land Registry or Registry of Deeds or
in any other registry which have not been so registered.
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(d) Where title to the Properties is registered in the Land
Registry, the Company is registered with absolute title.
(e) Neither the Properties nor any part thereof is subject to
compulsory registration pursuant to the Registration of
Title Act 1964.
20 ENCUMBRANCES
20.1 (a) There are no burdens affecting all or any part of the
Properties which are capable of affecting registered
land without registration by virtue of Section 72 of the
Registration of Title Act 1964.
(b) None of the Properties or any of the title deeds relating
thereto is subject to, or to any agreement or commitment
to give or create, or to any claim in respect of:
(i) any charge (whether fixed or floating), mortgage,
lien, pledge, Encumbrance or other security
interest or whatever nature howsoever arising;
(ii) any option, right to acquire, right of pre-emption
or similar right howsoever arising;
(iii) any trust or equitable interest of whatever nature
howsoever arising;
(iv) any rent-charge, annuity or other outgoings other
than rates, water rates, refuse charges and other
charges specified in Schedule 5; or
(v) any monetary claims or liabilities whether
contingent or otherwise howsoever arising.
(c) Where any such matters as are referred to in Warranty
20.1 hereof have been disclosed in the Disclosure Letter
the obligations and liabilities imposed and arising
thereunder have been fully and promptly observed and
performed and any payments in respect thereof due and
payable have been duly paid.
21 POSSESSION AND ENJOYMENT
21.1 (a) The Company is entitled to and is in possession and
exclusive occupation of the Properties and no person
other than the Company is entitled to or is in possession
or occupation or has any interest of whatever nature
howsoever arising in the Properties or any part thereof
and none of the Properties or any part thereof is
affected by or the subject of any lease, tenancy,
licence, agreement or arrangement relating to the
occupation or user thereof by any person other than the
Company.
(b) There is appurtenant to the Properties all rights,
easements and facilities necessary for their present use
and continued enjoyment and no person is entitled or has
threatened to terminate, curtail or interrupt any such
rights,
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easements or facilities.
22 PLANNING
22.1 Each "Development" (within the meaning of the Planning Acts),
carried out to or on or otherwise affecting the Properties or
any part thereof complies in all respects with the Planning Acts
and all regulations made thereunder and with all applicable
by-laws and building regulations and other relevant legislation
and regulations and all permissions and consents required
thereunder have been duly obtained and are in full force and
effect and all conditions attaching thereto have been fully
complied with and promptly performed and no such permission or
consent is temporary or personal and there are no circumstances
which may lead to the withdrawal or revocation of any such
permission or consent.
23 NOTICES & ORDERS & MATTERS AFFECTING THE PROPERTIES
23.1 (a) There is no threatened or outstanding notice, order or
certificate (whether issued under or pursuant to any
statute or regulation or otherwise howsoever arising) in
relation to or affecting any of the Properties or any
part thereof (including, without prejudice to the
generality of the foregoing, any closing order,
demolition order, clearance order, special amenity order,
preservation order, conservation order, enforcement
notice, derelict site notice, improvement notice, or
prohibition notice), and to the best of the information,
knowledge and belief of the Warrantor there are no
circumstances which may give rise to any such notice,
order or certificate.
(b) None of the Properties or any part thereof, nor the
Company as owner or occupier thereof, is affected by nor,
to the best of the information, knowledge and belief of
the Warrantor, is any of the Properties or any part
thereof likely to be affected by, any of the following
matters:
(i) any exception, reservation, stipulation,
restriction, burden, inhibition, covenant,
obligation, condition, easement, quasi-easement,
profit-a-pendre, licence, wayleave, right or
privilege of whatever nature howsoever arising
which is of an unusual or onerous nature or which
conflicts with or adversely affects or may conflict
with or adversely affect the present use of any of
the Properties or any part thereof or which
adversely affects or may adversely affect the
title to or value of any of the Properties or any
part thereof and there is no agreement or
commitment to give or create any of the foregoing
and no person has claimed to be entitled to any of
the foregoing;
(ii) any proposal or order for the compulsory
acquisition or requisition of the whole or any
part of any of the Properties or any access to or
egress therefrom or for the modification of any
planning permission in respect thereof or for the
discontinuance of any use thereof or for the
imposition of any fine or penalty in relation
thereto;
(iii) any provision in any development plan or proposal
in any draft
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development plan restricting or regulating the use
or development thereof;
(iv) any outstanding planning application or appeal;
(v) any compensation received or receivable as a
result of any refusal of any application for
planning permission or the imposing of any
restriction in relation to any planning permission
or the modification or withdrawal of any planning
permission or any claim or agreement in respect of
any of the foregoing;
(vi) any agreement or arrangement restricting or
regulating the current or proposed use or
development of any of the Properties or any part
thereof;
(vii) any commutation or agreement for the commutation
of rent or payment of any rent in advance of the
due dates and payment thereof;
(viii) any outstanding or threatened dispute, claim,
demand or litigation or arbitration proceedings.
(c) None of the Properties or any part thereof, nor the
Company as owner or occupier thereof, enjoys precariously
any right, easement or privilege the withdrawal or
cessation of which would adversely affect the use of any of
the Properties or any part thereof for the purposes for
which it is now used or the extent of such use or which
affects or might in the future affect the value of any of
the Properties or any part thereof.
24 COVENANTS & OBLIGATIONS
24.1 (a) All covenants, obligations, conditions, agreements and
restrictions of whatever nature howsoever arising affecting
any of the Properties have been duly performed and observed
and the Company has not received notice of any outstanding
or alleged breach or failure to perform any such covenant,
obligation, condition, agreement or restriction, and to the
best of the information, knowledge and belief of the
Warrantor, there are no circumstances which may lead to any
such notice being served.
(b) All outgoings of whatever nature in respect of the
Properties have been paid in full on the due dates for
payment thereof.
25 CONDITION & REPAIR OF THE PROPERTIES
25.1 (a) All buildings and other structures on or under the
Properties are in good and substantial repair and condition
and fit for the purposes for which they are presently used
and no substance or material which is deleterious defective
or a risk to health or safety has been used in the
construction of, or in any alterations or additions to, any
buildings or structures on or under the Properties and no
method of construction not in accordance with currently
accepted good building practice was used in the
construction of, or in any
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alterations or additions to, any of the buildings or
structures on or under any of the Properties.
(b) None of the Properties is subject or susceptible to
flooding or subsidence.
(c) No Contaminants (as defined in Warranty 18) are stored or
contained on or under any of the Properties whether in
storage tanks, land fills, pits, ponds, lagoons or
otherwise.
26 ACCESS & SERVICES
26.1 (a) The means of access to and egress from the Properties are
over roads which have been adopted by the local authority
and are maintainable at public expense.
(b) The Properties are served by drainage, water and
electricity services and all other necessary utilities, all
of which are connected to the mains by media located
entirely on, in or under the Properties or by media
elsewhere in respect of the use of which the Company and
those deriving title under it to the Properties have a
permanent easement free from any onerous or unusual
conditions and the passage and provision of those services
is uninterrupted and no interruption of such a passage or
provision is imminent or likely and the Company has a full
and uninterrupted right to enter on any adjoining lands and
premises for the purposes of repairing and maintaining all
pipes, sewers, wires, cables, conduits and other conducting
media serving each of the Properties.
27 STATUTORY OBLIGATIONS
27.1 (a) The Company has complied in all material respects with
all applicable laws (including common law) and with all
applicable bye-laws, statutes, regulations, orders,
instruments, decrees, notices, certificates and judgements
of any government, local government, executive,
administrative, judicial or regulatory authority or agency
in relation to or affecting the Properties.
(b) No building or structure upon any of the Properties is a
"multi-storey building" within the meaning of the Local
Government (Multi-storey Buildings) Act 1988.
(c) None of the Properties are affected by Section 29 of the
Companies Act 1990.
(d) There are no transactions on title to any of the
Properties which are affected by the provisions of the
Mergers, Take-overs and Monopolies (Control) Acts 1978.
(e) None of the Properties or any part thereof comprises a
"derelict site" within the meaning of the Derelict Sites
Act 1990 and the Company has not received any notice of any
proposal to register any of the Properties or any part
thereof on the derelict sites register.
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28 NO OTHER ADVERSE MATTERS
28.1 There are no matters which materially and adversely affect the
title of the Company to any of the Properties or the value of any
of the Properties or the continued use and enjoyment thereof.
29 REQUISITIONS ON TITLE
29.1 Any deeds, documents and information supplied for the purpose
of deducing title to any of the Properties in connection with
this Agreement are true, complete and accurate and the Company
has not, entered into any transaction affecting the title to, or
use or value of, any of the Properties.
30 PROPERTIES HELD UNDER A LEASE
30.1 In the case of Properties held by the Company under a lease:
(a) there are no unusual or onerous provisions in the Lease
affecting the marketability of the Company's title to the
property demised by the lease, its existing or any intended
development or its use for any purpose or otherwise adverse
to the interest of the Company;
(b) except for normal forfeiture provisions, the lease does
not include express provision whereby either the landlord
or the tenant may terminate the lease prematurely;
(c) there are no rent reviews currently under negotiation or
the subject of reference to either an expert, an arbitrator
or the Courts.
31 LICENCES AND COMPLIANCE
31.1 All necessary licences consents permits and authorities (public
and private) have been obtained by or on behalf of the Company to
enable the Company to carry on its business effectively in the
places and in the manner in which such business is now carried on
and all such licences consents permits and authorities are valid
and subsisting and the Warrantor knows of no reason why any of
them should be suspended cancelled or revoked or not renewed on
the same or substantially similar terms.
31.2 The Company has complied in all material respects with all
applicable laws (including common law,) and with all applicable
bye-laws, statutes, regulations, orders, instruments, decrees,
directives, notices, certificates and judgements of any
government, local government, supranational, executive,
administrative, judicial or regulatory authority or agency in
relation to or affecting the assets or business of the Company.
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32 STAMPING
32.1 All title deeds and agreements to which the Company is a
party and other documents (including stock transfer forms)
owned by or which ought to be in the possession of the
Company are in its possession and are properly stamped.
COMPANIES ACT 1990
33 INVESTIGATIONS
33.1 (a) No application has been made pursuant to section 7
or section 8 of the Companies Act 1990 (the "Act")
for the appointment of an inspector to investigate
the affairs of the Company and no such application
is threatened or anticipated.
(b) The Company is not the subject of or adversely
affected by any court order made pursuant to section
12 of the Act or otherwise the subject of or
adversely affected by any proceedings instituted by
or against any person as a result of any
investigation of any company's affairs under the
Act.
(c) The Company is not identified or referred to in any
inspector's report made pursuant to section 11 of
the Act.
(d) No inspector has been appointed by the Minister for
Enterprise and Employment (the "Minister") under
section 14 of the Act to investigate the ownership
of the Company and no person has been required
pursuant to section 15 of the Act to give the
Minister any information as to the ownership of the
Company.
(e) No shares in or debentures of the Company are
subject to or have been issued in contravention of
any restriction under section 16 of the Act and the
Company is not legally or beneficially interested in
any shares in or debentures of any company which are
the subject of any restriction under section 16 of
the Act.
(f) No directions have been given to the Company under
or pursuant to section 19 of the Act in relation to
the production of documents.
33.2 DISCLOSURE OF INTERESTS IN SHARES
33.2 Each shareholder of the Company who is, or has at any time
been required to notify the Company of its interests in any
shares in or debentures of the Company pursuant to section
53 of the Act has duly complied with its obligations under
Part IV Chapter 1 of the Act.
34 GRANTS
34.1 The Company is not party to any agreement with any
government agency or supranational agency and is not
entitled to or the beneficiary of any grants or financial
assistance from any such agency.
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35 DEFAULT
35.1 The Company is not in breach of any agreement or in default
under any contractual or statutory obligation whatsoever
which adversely affect or may adversely affect the trading
or financial position or prosperity of the Company.
36 SUPPLIERS & CUSTOMERS
36.1 No substantial customer or supplier of the Company has
during the twelve months preceding the date of this
Agreement ceased or indicated an intention to cease trading
with or supplying the Company or is likely to reduce
substantially its trading with or supply to the Company and
so far as the Warrantor is aware the attitude or actions of
customers, suppliers and employees with regard to the
Company will not be prejudicially affected by the execution
or completion of this Agreement.
36.2 The Company has not within two years prior to the date
hereof been and is not in prospect of being materially and
adversely affected by the loss of any important customer or
supplier or by any abnormal fact or relation to a customer
or supplier or by any disputed matter which would reflect
the relationship of it with any of its customers or
suppliers.
37 FACTORIES ACT
37.1 The Company is not in default in respect of any of its
duties or obligations imposed upon it by the Factories Act
1955, the Office Premises Act 1958, the Mines and Quarries
Act 1965, or the Dangerous Substances Acts 1972 to 1979.
38 TAXATION
38.1 (a) All Taxation of any nature whatsoever or other sums
imposed, charged, assessed, levied or payable under
the provisions of all applicable legislation
relating to Taxation for which the Company is liable
as a result of any act or omission prior to the date
of this Agreement will if and insofar as such
Taxation or other sums ought to be paid prior to or
on Completion have been paid at or before the date
of this Agreement and in particular but without
prejudice to the generality of the foregoing at the
date of this Agreement all amounts due for payment
to the Revenue Commissioners or any other fiscal or
revenue authority in respect of Value Added Tax or
in respect of the 'Pay As You Earn' (PAYE)
regulations from time to time in force will have
been paid by the relevant due dates and at the date
of this Agreement all Social Welfare and Pay Related
Social Insurance contributions (both employer's and
employees') due in respect of the employees of the
Company will have been duly paid on their due
payment dates.
(b) The Company has within the prescribed time periods
duly and properly made all returns and given or
delivered to the Revenue Commissioners and all other
relevant fiscal or revenue authorities all notices,
accounts and information required for the purpose of
assessing its liability to Taxation and all such
returns, notices, accounts and information are
complete and correct in all material respects and
not misleading and the Company is not and has
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not been involved in any dispute with the Revenue
Commissioners or any other relevant fiscal or
revenue authority in relation to any matter
concerning its liability or potential liability to
Taxation and the Warrantor is not aware of any
matter or circumstance which may lead to any such
dispute and there is no appeal by the Company
pending against any assessment to Taxation.
(c) The Company has properly operated the PAYE system of
deduction of and accounting to the Revenue
Commissioners for tax chargeable on the remuneration
of its employees and has properly operated the Pay
Related Social Insurance system and has accounted to
the Revenue Commissioners for all deductions made
thereunder or provided in full for same in the
Accounts.
(d) The Company is resident in the Republic of Ireland
for the purposes of Taxation and has not been at any
time resident in any jurisdiction other than the
Republic of Ireland for Taxation purposes nor has it
been at any time managed or controlled in or from
any country other than the Republic of Ireland and
the Company has not at any time carried on any trade
in any other country and the Company does not have
any permanent establishment outside of the Republic
of Ireland.
(e) No notice of attachment has been served on the
Company under sub-Section (2) Section 73 of the
Finance Act 1988. [attachment of defaulter's funds].
(f) The Company has not made any transfer as is referred
to in Section 35 of the CGTA or received any asset
by way of gift as mentioned in paragraph 18 of
Schedule 4 CGTA.
(g) The Company has not at any time since its
incorporation and ending on the date of this
Agreement acquired any assets other than trading
stock from any company which at the time of the
acquisition was a member of the same group (as
defined in Section 129 of the CTA).
(h) The Company has not surrendered any amount by way of
group relief under the provisions of Sections 107 to
120 of the CTA.
(I) The Company has not and will not at any time
hereafter in respect of any period up to the date of
this Agreement become liable to make a subvention
payment or any other payment for an amount
surrendered by any other company under or in
connection with the provisions of Section 107 of the
CTA.
(j) No allowable loss which has arisen or which may
hereafter arise in respect of any period prior to
the date of this Agreement on the disposal by the
Company of shares in or securities of any company is
liable to be disallowed in whole or in part by
virtue of the application of Section 138
[transactions in a group] or Section 139 [dividend
stripping] of the CTA.
(k) No person is liable to capital acquisitions tax
attributable to the value of any of the shares in
the capital of the Company and in consequence no
person has the power to raise the amount of such tax
by sale or mortgage of or by a terminable charge any
shares in the capital of the Company.
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(l) The Company has not been a party to or involved in any share for
share exchange nor any scheme or reconstruction or amalgamation such
as are mentioned in Schedule 2 CGTA or Section 127 of the CTA under
which shares or debentures have been issued or any transfer of
assets effected.
(m) The Company has not entered into or been a party to any schemes or
arrangements which might be considered by the Revenue Commissioners
to be a tax avoidance transaction within the meaning of the Finance
Act, 1989.
(n) No act or transaction has been effected in consequence of which the
Company is or may become liable for any taxation primarily
chargeable against any other person, including any other company.
(o) The Company has not entered into any financing or leasing agreement
in which or in connection with which it has indemnified any other
person against any claim, loss or other liability arising from any
change in taxation legislation or in the interpretation of taxation
legislation.
(p) On a sale of any machinery and plant at the value thereof shown in
the Accounts no balancing charge will be incurred.
(q) There are set out in the Disclosure Letter full particulars of all
differences between the accounting and Taxation treatments of all
items in the Accounts and the audited accounts of the Company for
each of its three preceding financial years.
(r) There is no appeal by the Company pending against any assessment to
tax and the Company is not in default in payment of any tax within
the period prescribed for payment thereof.
(s) Where fixed assets have been stated in the accounts in excess of
their cost any potential liability to Taxation on chargeable gains
that would accrue on the sale of these assets at their values stated
are either fully provided or disclosed by way of note in the
Accounts.
(t) The Company has not made any claim for "roll-over relief" under
Section 28 CGTA or Section 9 of the Capital Gains Tax (Amendment)
Act, 1978.
(u) The Company is a registered and taxable person for the purposes of
the Value Added Tax Acts and has complied in all respects with such
legislation and all regulations made or notices issued thereunder
and has maintained full, complete, correct and up to date records,
invoices and other documents (as the case may be) appropriate or
requisite for the purposes thereof.
(v) No arrangement exists or has existed whereby pursuant to Section 8
(8) of the VAT Act, and Regulation 5, of the Value Added Tax
Regulation 1979 (as amended) the business activities of the Company
are or were deemed to be carried on by any other person or the
business activities of any other person are or were deemed to be
carried on by the Company [membership of a group for VAT purposes].
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(w) The Company has not since the Accounts Date made or paid any
dividend or other distribution (other than those for which full
reserve or provision was made in the Accounts) or any such loan or
advance as is referred to in Section 98 of the CTA or any amendment
to or re-enactment of such section.
(x) The Company has not repaid share capital or any part thereof and the
Company has not issued as paid up otherwise than by the receipt of
new consideration any new shares.
(y) The Company has not made any payment to or provided any benefit for
any officer or employee of the Company which is not allowable as a
deduction in calculating the profits of the Company for Taxation
purposes.
(z) The book value of each of the capital assets of the Company in or
adopted for the purpose of the Accounts does not exceed the base
cost thereof for the purpose of calculating liability to capital
gains tax or corporation tax on chargeable gains on a disposal
thereof by the Company.
(aa) No claim has been made by the Company under Section 43 of the CGTA.
(bb) No loss which might accrue on the disposal by the Company of any
share in or security of any company is liable to be reduced by
virtue of any deprecatory transaction within the meaning of Section
138 and 139 of the CTA.
(cc) No change of ownership of the Company within the meaning of Section
27 of the CTA has taken place.
(dd) The Company is not, and has at no time been, a member of a group of
companies within the meaning of Section 129 of the CTA or associated
with any other company within the meaning of Section 19 Finance Act
1952 as amended by Section 85 Finance Act 1980.
(ee) The Company has never incurred any expense or paid any amount in
consequence of which the Company has been or could be treated under
Section 96 or Section 97 of the CTA as having made a distribution
[treatment of expenses as dividends].
38.2 The Company has not:-
(a) 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 of description or passed or agreed to pass any resolution
to do so; or
(b) provided capital to any company on terms whereby the company so
capitalised has in consideration thereof issued shares loan stock or
other securities where the terms or any such capitalisation were
otherwise than by way of a bargain made at arm's length or where the
shares loan stock or other securities acquired are shown in the
Accounts at a value in excess of its market value at the time of
acquisition.
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38.3 As at the Account Date:-
(a) the Company has not made an election under Section 44 [group
dividends] and no surrender has been made under Section 45
[surrender of advance corporation tax] of the Finance Act, 1983.
(b) the Company is not affected by the provisions of Section 46
[carrying forward of advance corporation tax where change in
ownership of company] or Section 48 of the Finance Act, 1983
[application of advance corporation tax to interest on certain loans
transitional provisions re S.84 loans].
38.4 There have been no claims under Section 12(4) CGTA [capital losses
allowed where no sale].
38.5 No relief or exemption or reduction has been obtained from companies
capital duty under Section 72 of the Finance Act, 1973 [reconstruction or
amalgamation] or from stamp duty under Section 19 of the Finance Act,
1952 or Statutory instrument No. 244 of the 1981 [associated company
relief] or Section 31 of the Finance Act, 1965 [relief from capital and
stamp duty in certain cases] which (a) has become liable to forfeiture or
(b) may be forfeited in the future.
38.6 There has not been in respect of any accounting period any excess of
distribution investment and estate income within the meaning of Section
100 of the CTA [surcharge on investment income].
38.7 The Company has never claimed relief under Part 1 Chapter VI of the
Finance Act, 1980 [manufacturing relief] and the existing operations of
the Company will continue not to qualify for the relief and there is no
dispute with the Inspector of Taxes with regard to this relief.
38.8 (a) The Company has not been required by appropriate fiscal authorities
to give security under the value added tax legislation.
(b) The Company has not availed of the procedures in Section 58 of the
Finance Act 1989 whereby a trader may account and make returns for
value added tax purposes other than after each two monthly taxable
period.
(c) The Company does not make any supplies which are exempt for value
added tax purposes.
38.9 The Company has not committed any act or made any omission which might
constitute an offence under Section 94 of the Finance Act, 1983 [aiding,
abetting, assisting etc, tax evasion].
38.10 The utilisation of losses incurred by the Company is not restricted by
Section 116A of the CTA.
38.11 No transaction has or had been effected by the Company within the last
three years in respect of which any consent or clearance from the Revenue
Commissioners or any other taxation authority was required and which
consent or clearance (as the case may be) was not obtained.
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RIDER B
ADDITIONAL WARRANTIES
39. TRADE DEBTS
The trade debts owed to the Company as at the 31st December, 1998m will be
collected as follows:-
100% by the 31st December, 1999.
40. PROFIT AFTER TAX
The profit after tax of the Company for the year ended 31st December, 1998
will not be less than L175,000.
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SCHEDULE 4
THIS DEED OF INDEMNITY is made on the 1998 BETWEEN
(1) Mark Howell, 18 Orlagh Downs, Templeogue, Dublin 16.
William Reid, 30 Eaton Wood, Shankill, Co. Dublin.
Brendan Redmond, 16 Friarswood Road, Goatstown, Dublin 14.
Leo McCarthy, 4 Marley Walk, Marley Grange, Rathfarnham, Dublin 16.
Leo Hefferman, 41 Shenick Grove, Skerries, Co. Dublin.
Paul Clancy, 18 Oaklands, Church Lane, Greystones, Co. Wicklow.
Declan McGonigle, 6 Brookpark, Finnstown Abbey, Lucan, Co. Dublin.
Peter Noonan, 130 South Circular Road, Dublin 8.
Ed Clear, Sorrell, Bellvue, Dalgany, Co. Wicklow.
John Trayner, 30 Broadford Close, Ballinteer, Dublin 16.
(collectively the "Covenantors", individually a "Covenantor")
(2) Integrity Holdings Limited having its registered office at Suite 333 3838
Camino Del Rio North, San Diego, California, 92108-1789 ("the Purchaser").
AND
(3) Premier Computer Group Limited, Premier Services Limited, Premier
Distribution Limited, Premier Software Limited, Premier Information Systems
Limited, Ravplot Limited, Techsonix Limited and Progress Systems Limited
all care of 13/16 Dame Street in the City of Dublin (collectively "the
Companies")
WHEREAS:-
This Deed is entered into pursuant to the provisions of a certain Agreement for
the Sale and Purchase of Shares of even date herewith made between inter alia:-
A. the Vendor (as therein defined) and;
B. the Purchaser
(hereinafter called the "Agreement").
NOW IT IS HEREBY AGREED as follows:-
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1. INTERPRETATION
In this Deed:-
1.1 save as herein otherwise expressly stated to the contrary all words
and expressions defined in the Agreement shall have the same meaning
in this Deed and any provisions in the Agreement concerning matters of
construction or interpretation shall also apply in this Deed;
1.2 "THE COMPANY" means any or all of the Companies as the case may be.
1.3 "CLAIM FOR TAXATION" means any claim, notice, demand, assessment,
letter or other document made or issued or any action taken or
omission made by or on behalf of the Revenue Commissioners or any
revenue or fiscal authorities, customs and excise authorities or any
other statutory or governmental authority, agency, body or official
whatsoever in any part of the world whereby the Company is or may be
placed or sought to be placed under a Liability To Taxation (whether
or not it is primarily payable by the Company and whether or not the
Company has or may have any right of reimbursement):
1.4 "LIABILITY TO TAXATION" means any liability whatsoever to make a
payment of or in respect of Taxation and includes without limitation:-
1.4.1 the loss, reduction, counteracting or clawing back of or
failure to obtain any Relief which would otherwise have been
available to the Company and/or the use of any Relief which
would otherwise have been available to the Company against any
profit, income, gain or receipt or deemed profit, income, gain
or receipt; and
1.4.2 the nullifying, cancellation, set-off or reduction of a right
to repayment of Taxation which would otherwise have been
available to the Company.
In the case of Liability to Taxation falling within clause
1.4.1 the amount of the Relief so lost, counteracted, clawed
back or used shall be treated as an amount of Taxation for
which a liability has arisen and fallen due on the date on
which the resulting Taxation is due and payable or would have
been due and payable but for the utilization of any other
Relief by the Company.
In the case of Liability to Taxation falling within clause
1.4.2 the amount of repayment which would otherwise have been
obtained shall be treated as an amount of Taxation for which a
liability has arisen and fallen due on the date on which the
resulting repayment would have been received or (where such
repayment was dependent upon the making of an application or
the satisfaction of some other condition) the earliest date
upon which such application could have been made or such
condition satisfied.
1.5 "RELIEF" means any relief, allowance, exemption, credit, deduction or
set-off of whatsoever nature in computing any liability to Taxation or
any credit against Taxation or in computing or against any profit,
income, gain or receipt of whatsoever nature howsoever arising; and
1.6 "REPRESENTATIVE" means Patrick Donaghy & Co., Solicitors, 13/16 Dame
Street, Dublin 2 or such other person or firm as may from time to time
be notified in writing
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by the Covenantors (or the majority of them) to the Company.
1.7 "TAXATION" means all forms of taxation, duties, imposts, levies,
withholding, rates and charges of whatsoever nature whether of
Ireland or elsewhere in any part of the world wherever or whenever
created or imposed including, without prejudice to the generality
of the foregoing, income tax, corporation tax, advance corporation
tax, capital gains tax, capital acquisitions tax, inheritance tax,
deposit interest retention tax, value added tax, sales tax,
customs and other import and export duties, excise duties, stamp
duty, capital duty, property tax, rates, pay-related social
insurance or other similar contributions and generally all taxes,
duties, imposts withholdings, levies, rates and charges whatsoever
on or in relation to income, profits, gains, sales, receipts, use
or occupation and any taxes, duties, imposts, withholdings,
levies, rates and charges supplementing or replacing any of the
foregoing and any interest, charges, surcharges, fines, penalties,
costs and expenses in connection with any of the foregoing.
2. INDEMNITIES
Subject to clause 5 hereof the Covenantors hereby jointly and severally
covenant with and undertake to the Purchaser (for itself and as trustee
for all others who are the owners from time to time of the Shares)
and, as separate covenants and undertakings, with and to the Company,
to indemnify and keep indemnified the Purchaser and the Company from and
against:-
2.1 any Liability To Taxation and any depletion or diminution in the
value of the assets of, or increase in liabilities of the Company
arising wholly or partly by reason of or in connection with any
Claim For Taxation or any Liability To Taxation in respect of, by
reference to or in consequence of:-
2.1.1 any act, omission, event or transaction or series of
transactions wholly or partly occurring or entered into on
or before the date of this Deed; or
2.1.2 any income, profit, gain or receipt earned, accrued or
received or deemed to have been earned, accrued or received
on or before the date of this Deed; or
2.1.3 any dividend or distribution paid or made or deemed to have
been paid or made on or before the date of this Deed;
2.2 any settlement of any Claim For Taxation in respect of, by
reference to or in consequence of, any of the matters referred to
in clauses 2.1.1 to 2.1.3 inclusive; and
2.3 all costs and expenses incurred in relation to any demands,
actions, proceedings and claims in respect of any Liability To
Taxation or Claim For Taxation in respect of any of the matters
referred to in clauses 2.1.1 to 2.1.3 inclusive;
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3. EXCLUSIONS
The indemnities contained in Clause 2 hereof shall not apply to any
Liability To Taxation or Claim For Taxation to the extent that:-
3.1 specific provision or reserve has been made in the Accounts in
respect of such Liability To Taxation or Claim For Taxation or was
specifically referred to in the notes thereto;
3.2 such Liability To Taxation or Claim For Taxation arises or is
increased as a result only of any provision or reserve in respect
thereof in the Accounts being insufficient by reason of any
increase in rates of taxation made after the date of this Deed
with retrospective effect;
3.3 such Liability To Taxation or Claim For Taxation arises as a
consequence only of profits or gains earned or accrued in the
ordinary and usual course of trading during the period from the
Accounts Date to the date of this Deed;
3.4 Such Liability To Taxation or Claim For Taxation would not have
arisen but for a voluntary act or transaction carried out by the
Purchaser or the Company without the consent of the Representative
and which the Purchaser or the Company was (or ought to have been)
aware could give rise to such liability to Taxation.
3.5 The loss occasioned has been recovered pursuant to any claim under
the Warranties.
3.6 Such Liability to Taxation or Claim for Taxation arises from a
matter fully and fairly disclosed in the Disclosure Letter.
3.7 That such Liability to Taxation or Claim for Taxation is in
respect of Value Added Tax relating to supplies made and imports
received since 23.12.98, in respect of PAYE or PRSI
since the 23.12.98, in respect of stamp duty the liability
for which has been incurred in the normal course of the Company's
business since the Accounts Date or rates payable in respect of the
Properties since the 23.12.98.
3.8 It corresponds to an increase in the value of the assets of any
other Company, resulting from a reduction in its Liability to
Taxation (except insofar as the increase is attributable to any
decrease in rates of Taxation, or variation in the method of
applying or calculating the rate of Taxation, made after the date
of the Agreement).
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4. PAYMENT
4.1 The Covenantors further hereby jointly and severally covenant with
and undertake to the Purchaser and, as separate covenants and
undertakings, with and to the Company, to indemnify and keep
indemnified the Purchaser and the Company from and in respect of
any and all Liability to Taxation on or in respect of any sums paid
pursuant to Clause 2 hereof or otherwise hereunder so that the
amount so payable shall be grossed up by such amount as will ensure
that after payment of any Taxation on or in respect of such amount
there shall be left a sum equal to the amount that would otherwise
be payable pursuant to Clause 2 hereof or otherwise hereunder were
the payment not subject to Taxation as aforesaid.
4.2 All sums payable by the Covenantors under this Deed shall be paid
free and clear of all deductions and withholdings and free and
clear of any set-off or counter claim PROVIDED HOWEVER that if any
such deduction or withholding is required by law, the Covenantors
shall pay to the relevant party hereto such additional amount as
shall be required to ensure that the net amount received by such
party shall equal the full amount which that party would have been
entitled to receive if no such deduction or withholding had been
made.
4.3 Any payment due hereunder shall be payable, at the the direction of
the Purchaser, to the Purchaser or to the Company.
5. REIMBURSEMENT OF ACT
If the Covenantors have satisfied a liability under this Deed to
indemnify the Company against a Liability to Taxation in respect
of advance corporation tax the Company shall account to the
Covenantors for an amount equal to any resulting reduction in its
liability to corporation tax as and when the Company obtains the
benefit of the reduction.
6. CONDUCT OF CLAIMS AND APPEALS
6.1 The Company shall notify the Representative in writing of any Claim
for Taxation which comes to its notice, from which it appears that
the Covenantors are, or may become, liable to indemnify the Company
or the Purchaser under this Deed. Where a time limit for appeal
applies to the Claim for Taxation, the notification shall be given
as soon as reasonably possible after the date on which the Claim
for Taxation comes to the notice of the Company or the Purchaser,
but, where no limit applies or the period to which the limit
relates has not commenced, the notification shall be given within
56 days of that date.
6.2 The Company shall ensure that a Claim for Taxation to which clause
6.1 applies, is, so far as reasonably practicable, dealt with
separately from claims to which it does not apply and that no
Liability to Taxation arising from the Claim for Taxation is
accepted or discharged prematurely; and for this purpose any
payment made by the Company to avoid incurring interest or any
penalty in respect of unpaid taxation shall be deemed not to be
made prematurely.
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6.3 Subject to clause 6.6 the Company shall ensure at the request in
writing of the Representative that the Covenantors are placed in a
position to dispute on behalf of the Company any Claim for Taxation
falling within clause 6.1 and shall render or cause to be rendered to
the Covenantors at the expense of the Covenantors all such assistance
as the Representative may reasonably require in disputing any Claim
for Taxation.
6.4 Subject to clause 6.5 the Representative shall be entitled on behalf
of the Company to instruct such solicitors or other professional
advisors as the Representative may nominate to act on behalf of the
Covenantors or the Company to the intent that the conduct and costs
and expenses of the dispute shall be delegated entirely to and be
borne solely by the Covenantors.
6.5 In connection with the conduct of any dispute relating to a Claim
for Taxation (to which clause 6.1 applies):-
6.5.1 the Covenantors shall procure that the Representative shall
keep the Company fully informed of all relevant matters and
that the Representative shall promptly forward or procure to be
forwarded to the Company copies of all correspondence and other
written communications pertaining to it;
6.5.2 the appointment of solicitors or other professional advisors
shall be subject to the approval of the Company which shall not
be unreasonably or delayed;
6.5.3 the Covenantors shall make no settlement or compromise of
the dispute or agree any matter in its conduct which is likely
to affect the amount of the resulting Liability to Taxation or
the future Liability to Taxation of the Company without the
prior approval of the Company which shall not be reasonably
withheld or delayed;
6.5.4 if any dispute arises between the Company and the
Representative as to whether any Claim for Taxation should
any time be settled in full or contested in whole or in part
the dispute shall be referred to the determination of a Senior
Counsel appointed by agreement between the Company and the
Representative (or if they do no agree) upon the application
by either party, by the President for the time being of the Law
Society of Ireland. The determination of such Counsel shall be
final and binding upon the parties. The Counsel shall be asked
to advise whether, in his opinion, an appeal against the Claim
for Taxation would, on the balance of probabilities be likely
to succeed and as to how the costs of the dispute between the
Representative and the Company shall be allocated between the
Covenantors and Company. Only if his opinion is in the
affirmative shall an appeal be made and that Claim for Taxation
be not then settled. Any further dispute arising between the
Covenantors and the Company as to whether any further appeal
shall be pursued following determination of an earlier appeal
(whether or not in favour of the Company) shall be resolved in
a similar manner.
6.6 The Covenantors shall, at the request of the Company, provide to
the reasonable satisfaction of the Company security or indemnities,
or both, in respect of the costs and expenses of disputing any Claim
for Taxation.
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6.7 The Company shall not be subject to any claim by, or liability to,
any of the Covenantors on the ground that it has not complied with the
foregoing provisions, if it has bona fide acted in accordance with
instructions or approval of the Representative.
6.8 The Company shall permit the Covenantors and their advisors to
have reasonable access to its record and the reasonable assistance of
its employees, to enable the Covenantors to carry on the conduct of
disputing Claims for Taxation in accordance with the foregoing
provisions of this clause.
7 COVENANTORS PROTECTION PROVISIONS
7.1 The liability of the Covenantors under this Deed of Indemnity shall
cease on 31st, December, 2005. A Liability under this Deed, save
as regards an alleged liability under this deed of which notice in
writing (containing details of the event or circumstance giving rise
to the liability, and an estimate (where available) of the amount of
liability which may result) has been given to the Covenantors prior to
that date.
7.2 The total liability of the Covenantors under the Warranties and this
Deed of Indemnity shall not in any event exceed L400,000.
7.3 The provisions of this Section 7 shall not limit the liability of the
Covenantors hereunder for any claim which arises or is delayed as a
result of dishonesty, fraud, wilful misconduct or wilful concealment
by any of the Covenantors.
7.4 The Covenantors shall not be liable for any claim under this Deed
unless his aggregate liability under this Deed and the Agreement (or
what would be his liability apart from this paragraph 7.4)
exceeds L10,000.
8 BINDING ON SUCCESSORS
This Deed shall be binding upon and enure to the benefit of the
respective parties hereto and their respective personal representatives,
successors and permitted assigns.
9 WAIVER, RELEASE AND REMEDIES
9.1 A waiver by the Purchaser or the Company (as the case may be) of
any breach by any party hereto of any of the terms provisions or
conditions of this Deed or the acquiescence of the Purchaser or the
Company (as the case may be) in any act (whether commission or
omission) which but for such acquiescence would be a breach as
aforesaid shall not constitute a general waiver of such term,
provision or condition or an acquiescence to any subsequent act
contrary thereto.
9.2 Any remedy or right conferred upon the Purchaser or the Company for
breach of this Deed shall be in addition to and without prejudice to
all other rights and remedies available to it whether pursuant to the
Agreement or provided for by law.
9.3 No failure or delay by the Purchaser or the Company in exercising
any claim, remedy, right, power or privilege under this Deed shall
operate as a waiver nor shall
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a single or partial exercise of any claim, remedy, right, power or
privilege preclude any further exercise thereof or exercise of any
other claim, right, power or privilege.
9.4 Any liability of any party hereto to the Purchaser or the Company
(as the case may be) under the provisions of this Deed may in whole
or in part be released, varied, postponed, compounded or compromised
by the Purchaser or the Company (as the case may be) in its absolute
discretion as regards any other party under such liability without
in any way prejudicing or affecting its rights against any other
party hereto under the same or a like liability whether joint and
several or otherwise. Should any provision of this Deed transpire
not to be enforceable against any of the parties hereto, such
non-enforceability shall not render such provision unenforceable
against any other party hereto.
10 COUNTERPARTS
This Deed may be executed in any number of counterparts and by the
different parties hereto on separate counterparts each of which when
executed and delivered shall constitute an original and all such
counterparts together constituting but one and the same instrument.
11 ASSIGNMENT
This Deed shall not be assignable in whole or in part by the Covenantors
but the Purchaser and the Company shall be entitled to assign and transfer
all or any of their rights and obligations hereunder and such assignee or
transferee shall be entitled to enforce the same against the Covenantors or
any of them as if it were named in this Deed as the Purchaser or the
Company (as the case may be).
12 NOTICES
12.1 Any notice or other communication whether required or permitted to
be given hereunder shall be given in writing and shall be deemed to
have been duly given if delivered by hand to the addressee or if sent
by pre-paid post addressed to the party to whom such notice is to be
given at the address set out for such party herein (or such other
address as he or it may from time to time designate to all other
parties hereto in accordance with the provisions of this clause 12.1)
and any such notice or other communication shall be deemed to have
been duly given if delivered by hand at the time of delivery and if
sent by post as aforesaid forty eight hours after the same shall
have been posted.
12.2 For all purposes of this Deed, a notice served on the
Representative shall be deemed to be service on all of the
Covenantors.
13 VARIATION
No variation of this Deed shall be valid unless it is in writing and
signed by or on behalf of each of the parties hereto.
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14 SEVERABILITY
Each of the provisions of this Deed is separate and severable and
enforceable accordingly and if at any time any provision is adjudged by
any court of competent jurisdiction to be void or unenforceable the
validity, legality and enforceability of the remaining provisions hereof
or of that provision in any other jurisdiction shall not in any way be
affected or impaired thereby.
15 GOVERNING LAW AND JURISDICTION
15.1 This Deed shall be governed by and construed in accordance with the
laws of Ireland. Each of the parties hereto hereby agrees for the
benefit of the Purchaser and the Company and without prejudice to the
right of the Purchaser and the Company to take proceedings in relation
hereto before any other court of competent jurisdiction, that the
courts of Ireland shall have jurisdiction to hear and determine any
suit, action or proceedings that may arise out of or in connection with
this Deed and for such purposes irrevocably submits to the jurisdiction
of such courts.
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IN WITNESS whereof this Deed has been duly executed on the date shown at the
beginning of this Deed.
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SIGNED SEALED AND DELIVERED
by the said Covenantors in the presence of:-
Witness
Address
Occupation
SIGNED ON BEHALF of Integrity Holdings
Limited by Paul Carroll in the presence of:-
Director
Director/Secretary
Present when the Common Seal of
Premier Computer Group Limited
was impressed hereto:
Director
Director/Secretary
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SCHEDULE 5
Short Particulars of the Properties of Each Group Company
Part 2: Leasehold properties and details of the leases - See Lease dated
20, November, 1992.
SCHEDULE 6
Form of Escrow Agreement referred to in Clause 3.3 is annexed hereto.
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SIGNED, SEALED AND DELIVERED
by the said Vendor in the presence of:-
Witness
Address
Occupation
SIGNED ON BEHALF of Integrity Holdings
Limited by Paul Carroll in the presence of:-
Director
Director/Secretary
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DISCLOSURE LETTER
[Date]
Integrity Holdings Limited
RE: PREMIER COMPUTER GROUP LIMITED
Dear Sirs,
We refer to a Share Sale and Purchase Agreement of even date herewith made
between the parties thereon described as the Vendors and the Purchaser which
agreement together with the Deed of Indemnity approved for execution pursuant
to such agreement are hereinafter together referred to as "the Agreements"
and which Agreements provide for the sale of entire issued share capital of
Premier Computer Group Limited (hereinafter called "the Company").
This letter constitutes the Disclosure Letter referred to in the Agreements.
Words and phrases used in this letter have the same meanings as in the
Agreements unless the context otherwise requires. The warranties and
indemnities contained in the Agreements are made and given subject to the
disclosures set out below.
This disclosures contained in this letter are not to be taken as an admission
on our behalf, that all or any part of the matters call for disclosure.
No representation is made that the matters disclosed herein constitute an
exhaustive list of everything capable of, or suitable for, disclosure. Where
any conflict exists between the information contained in any document
supplied to you, the Purchaser in the course of negotiation and preparation
of this transaction and the disclosures made in this letter, the contents of
this letter shall prevail.
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GENERAL DISCLOSURES
The following are deemed to be disclosed, including, where relevant, all
matters which would be apparent from an inspection of the same:-
1 All matters and things contemplated or required to be done by or
pursuant to the Agreements.
2 All matters apparent from the title deeds to the Property which have
been furnished to you or which would be disclosed by title searches
[OR PHYSICAL INSPECTION] of the Property.
3 All matters and things which would or will be revealed by searches in
the Central Office of the High Court and searches in the Companies
Registration Office against and in respect of each Group Company.
4 All information available from an inspection or search of all documents,
registers, and records which may be inspected by the public or which are
available for inspection from any governmental, local or statutory
authority or body, and all matters referred to therein or apparent
therefrom.
5 Any matter disclosed or provided for in the Accounts.
6 All matters, provided for or disclosed in the accounts of the Company
for any year prior to the date hereof which have been furnished to you,
the Purchaser.
7 The contents of all the statutory registers and records and the minute
books of each Group Company.
In addition, the following correspondence passed to you, the Purchaser, and/or
your Solicitors, Accountants and Advisers is disclosed:
(a) All audit files and connected papers furnished by Messrs. Grant Thornton.
(b) The litigation files referred to at Specific Disclosures No. 10.
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SPECIFIC DISCLOSURES
The following are disclosed. The paragraph numbers stated below are for
convenience of reference only and refer to the corresponding clauses in
Schedule 3 to the Share Sale and Purchase Agreement. Disclosure of any
particular matter by reference to a specific paragraph is to be regarded as a
disclosure in respect of each and every other paragraph as far as same shall
be applicable:-
SPECIAL CONDITIONS
It is repeated that the IDA Ireland and Brian Kearney are giving no
warranties hereunder nor are they parties to any restrictive covenant herein
nor will they be requested to execute the Form of Tax Indemnity.
3. TREASURY SHARES
These shares are held by the Company and the full proceeds of sale
thereof in the sum of L37,500.00 shall be paid to Alan McGrath who has
agreed to accept same in full satisfaction of his possible entitlement to
claim an amount of L60,000.00 in respect of Redundancy/Consultancy
payments.
4. ACCOUNTS
(a) All warranties relating to accounts are confined to the Audited Accounts
of the Company. No warranties whatsoever are given in relation to any
Management Accounts.
(b) Three items appearing on the Balance Sheet of the Company are
specifically excluded from all warranties, namely,
1. The Boat appearing at a value of L20,000.00.
2. The financial asset appearing on the balance sheet at of L147,000
representing the Company's entitlement to a shareholding is Stonepark
Limited the Company which will be entitled to the benefit of a Lease
of Lands at Tallaght, Co. Dublin.
3. A balance sheet item shown as L100,000.00 (lodged to Account of
Branvard Limited).
Item No. 1 above will be disposed of prior to completion by the Vendor.
It is not included in the sale.
7. BORROWING
Borrowing means:-
(a) The balance outstanding on the Company's loan with A.I.B. Smithfield
amounts to L32,952.00 plus interest to date.
(b) Its authorised overdraft facility of L100,000.00.
10. LITIGATION
The following cases are disclosed:
1. Cannon (Ireland) Business Equipment Limited -v- Premier Information
Systems Limited. The High Court, Record No. 1996 No. 3458p.
Defence filed - dealing with Plaintiff's request for Discovery at
present.
2. Fairway Investments Limited -v- Premier Information Systems
Limited. The High
65
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<PAGE>
15. EMPLOYEES
PAYROLL SCHEDULE
<TABLE>
<CAPTION>
PREMIER GROUP SALARY CAR ALLOWANCE TOTAL
- ------------- ------ ------------- -----
<S> <C> <C> <C>
Belton Gary 32,000 6,000 38,000
Boyce Oliver 16,750 4,000 20,750
Breslin John 29,600 5,000 34,600
Casey Geraldine 18,000 3,000 21,000
Clancy Paul 31,600 5,000 36,600
Cullen Suzanne 15,000 4,000 19,000
Doherty Breege 11,500 -- 11,500
Donohue Donal 21,085 5,000 26,085
Doyne Aidan 13,000 3,000 16,000
Dwyer David 16,000 5,000 21,000
Elliot Bernadette 16,200 5,000 21,200
Groves Irene 6,000 -- 6,000
Heffernan Leo 29,600 5,000 34,600
Powell Mark 40,000 6,000 46,000
Keenan Brian 25,000 5,000 30,000
Kindregan Noreen 23,500 5,000 28,500
Kinsella Nicola 12,5000 -- 12,500
Luke Steven 20,000 -- 20,000
McCarthy Leo 35,000 7,800 12,800
McKenna Stephen 20,000 -- 20,000
McKiernan Tom 18,000 5,000 23,000
Moore John 21,085 -- 21,085
</TABLE>
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PROGRESS SYSTEMS LIMITED
PENSIONS LISTING - MONTHLY CONTRIBUTIONS
<TABLE>
<CAPTION>
EMPLOYEE GROSS SCHEME ERS EES TOTAL
MONTHLY
SALARY
<S> <C> <C> <C> <C> <C>
Declan McGonigle 2,800.00 A 70.00 140.00 210.00
John Manning 2,291.67 A 57.29 114.58 171.88
127.29 254.58 361.88
</TABLE>
- -------------------------
[VENDORS]
WE HEREBY ACCEPT THE WITHIN DISCLOSURES.
DATED THE [ ], 19[ ]
/s/ Paul Caroll
- -------------------------
[PURCHASER]
70
<PAGE>
EXHIBIT 6.5
SAMPLE OF INTEGRITY HOLDINGS LTD. COMMON
STOCK OPTION AGREEMENT
<PAGE>
INTEGRITY HOLDINGS LTD.
COMMON STOCK OPTION AGREEMENT
This Agreement is made as of 14th July 1998, by and between BIRDS EYE INC., to
be known as INTEGRITY HOLDINGS LTD, Suite 333, 3838 Camino Del Rio North, San
Diego, California 92108-1789, USA (Company) and PAUL CARROLL (Option Holder)
AGREEMENT:
1. GRANT OF OPTION: The Company hereby grants to the Option Holder, with
effect from the date of this Agreement, the right to purchase common stock
in the maximum amount of 600,0000 SHARES from time to time during the
Option period at the price of $1.00 USD per common share, subject to the
terms and conditions contained in this Agreement
2. PERIOD OF OPTION: This Option shall be for a period of four years
commencing 14th July 1998
3. ADJUSTMENT TO OPTION SHARES: In the event any change is made to the common
stock issuable by reason of combination of shares, stock split, stock
dividend or other change affecting the outstanding common stock as a
class, without receipt of consideration, then the Company shall make
appropriate adjustments to reflect such change and preclude any dilution
or expansion of benefits hereunder
4. EXERCISE OF OPTIONS: Each exercise of Options is subject to the Option
Holder remaining in the employment of the Company and subject to receipt
of an exercise release letter from the Integrity Board. 100,000 Options
may be exercised immediately; the remaining Options are to be exercised
over a four year period up to a maximum of one third during year one; a
maximum of two thirds by the end of year two; any remaining Options to be
exercised by the end of year four. No Option may be exercised more than
four years after the commencement
5. TRANSFER OF OPTION: This Option is generally not transferable or
assignable by the Option Holder to an outside third party. If the Option
Holder transfers, assigns, charges, encumbers or otherwise alienates his
Option or creates any interest therein in favour of a third party, or
makes any attempt to do so, the Company may cancel the Option. Under
certain conditions, however, it may be transferred to relatives, trusts or
retirement plans if specifically approved, in advance, by the Company
6. SPECIAL TERMS:
1) In the event of any of the following Corporate transactions:
(i) the sale, transfer or other disposition of all or substantially
all of the assets of the Company
(ii) a merger or consolidation in which the Company is not the
surviving entity, except for a transaction with the principal
purpose of changing the Company's state of incorporation
<PAGE>
(iii) any reverse merger in which the Company is the surviving entity
but in which 50% or more of the Company's voting stock is
transferred to holders different from those who held the stock
immediately prior to such merger then this Option, to the
extent not previously exercised, shall be expressly assumed by
the successor Company or Parent Company thereof
2) The Agreement shall not in any way affect the right of the Company to
adjust, reclassify, reorganise or otherwise make changes in its
capital or business structure or to merge, consolidate, dissolve,
liquidate or sell or transfer all or any part of its business or
assets
7. PRIVILEGE OF OPTION OWNERSHIP: The Holder of this Option shall not have
any of the rights of a stockholder with respect to the Option shares
until such Holder shall have exercised the Option and paid the Option
price set out herein
8. MANNER OF EXERCISING OPTION:
1) In order to exercise this Option with respect to all or any number of
the tendered shares, Option Holder must take the following actions:
(i) Execute and deliver to the Secretary of the Company, at the
following address, 6 Bernadine Close, Bluebell Ridge, Warfield,
Berkshire, RG42 3DU, United Kingdom, a notice of exercise in
written form with full payment for the aggregate Option price
for the purchased shares and any applicable taxes or fees in
cash, cash equivalents or a form of compensation agreed to by
the parties to the Option. The written request must also include
the original, fully executed Common Stock Option Agreement
(ii) This Option shall be deemed to have been exercised with respect
to the number of Option shares specified by the Holder of the
Option in the written notice of exercise at such time as the
notice of exercise and payment for the shares being exercised
are received by the Company. As soon as possible thereafter, the
Company shall deliver or mail to the Option Holder a certificate
or certificates representing the shares so purchased with any
appropriate legends attached thereto
(iii) In no event may this Option be exercised for any fractional
shares
9. COMPLIANCE WITH LAWS AND REGULATIONS:
1) The exercise of this Option and the issuance of Option shares upon
such exercise shall be subject to compliance by the Company and the
Option Holder with all applicable requirements of law relating
thereto and with all applicable regulations of any stock exchange on
which the shares of the Company's common stock may be listed at the
time of such exercise or issuance
2) In connection with the exercise of this Option, Holder shall execute
and deliver to the Company, such representations in writing as may be
requested by the Company in order for it to comply with the applicable
requirements of federal and state securities laws
10. SUCCESSORS AND ASSIGNS: Except to the extent otherwise provided in
Paragraph 5 of the Common Stock Option Agreement, the provisions of this
Agreement shall inure to the benefit of, and be binding upon, the
successors, administrators, heirs, legal representatives and assigns of
Option Holder and the successors and assigns of the Company
11. COMPANY LIABILITY: The inability of the Company to obtain approval from any
regulatory body having authority deemed by the Company to be necessary to
the lawful issuance and sale of any common stock pursuant to this Option
shall relieve the Company of any
<PAGE>
liability with respect to common stock pursuant to this Option shall
relieve the Company of any liability with respect to the non-issuance or
sale of the common stock as to which such approval shall not have been
obtained. The Company, however, shall use its best efforts to obtain all
such approvals
12. STATED RESTRICTIONS - COMMON STOCK All common stock shares issued under
this Option will carry a restriction that the shares be held by the Holder
for a period not less than one year pursuant to Rules 144 and 145 under the
Securities Act of 1933 (Release No. 33-7390, February 20, 1997)
13. NOTICES: Any notice required to be given or delivered to the Company under
the terms of this Agreement shall be in writing and addressed to the
Company in care of its Secretary at its corporate offices at 6 Bernadine
Close, Bluebell Ridge, Warfield, Berkshire RG42 3DU, United Kingdom. Any
notice required to be given or delivered to the Holder of this Option shall
be in writing and delivered to the Holder at the address included above in
this Agreement. All written notices shall be deemed to have been delivered
upon personal delivery or deposit in the mail, postage prepaid and properly
addressed to the party to be notified
14. GOVERNING LAW: The interpretation, performance and enforcement of this
Agreement shall be governed by the laws of the state of Nevada without
regard to principles governing conflicts of law
15. SPECIAL COVENANT: The granted Option herein is not intended to be an
incentive Option within the meaning of section 422A of the Internal Revenue
Code
16. COUNTERPARTS: This Agreement may not be executed in counterparts. There
will be only one fully executed original, which must be surrendered
concurrent with any exercise of the Option as defined in Paragraph 8.1.(i)
herein
COMPANY:
INTEGRITY HOLDINGS LTD
/s/ K.F. Butler
----------------------------------
KENNETH F. BUTLER
TITLE: CHAIRMAN
OPTION HOLDER:
/s/ Paul Carrol
----------------------------------
PAUL CARROLL
<PAGE>
EXHIBIT 6.6
STATEMENT OF PARTICULARS OF EMPLOYMENT UNDER SECTION 1 OF THE
EMPLOYMENT RIGHTS ACT 1996 FOR PAUL CARROLL
<PAGE>
STATEMENT OF PARTICULARS OF EMPLOYMENT
UNDER SECTION 1 OF THE EMPLOYMENT RIGHTS ACT 1996
From: Integrity Holdings Ltd. ("the Company")
To: Paul Carroll ("the Employee")
INTERPRETATION
1. Where the context allows use of the masculine shall imply the feminine or
neuter, the use of the singular shall imply the plural and vice versa
2. Any provisions of this agreement found invalid or unenforceable shall not
affect the other provisions which will remain in full force and effect
3. This agreement (and all documents incorporated into it by reference)
constitutes the whole agreement between the Company and Employee provided
that additional terms and conditions confirmed by a duly authorized
representative in writing as having such an effect may be incorporated
into this agreement
4. This statement sets out the particulars of your employment with
the Company as at 1st November 1998 which are required to be given to you
under the Employment Rights Act 1996 and forms the basis of your Contract
of Employment
- --------------------------------------------------------------------------------
1. COMMENCEMENT OF EMPLOYMENT
1.1 Your employment commenced on 15th July 1988 and no employment with
a previous employer counts as part of your period of continuous
employment
1.2 Your previous service (if any) of [illegible] will count towards
continuous employment from date
1.3 Your employment will be for an initial period of 3 years. You can
terminate your employment for any reason by giving 3 months prior
notice. If the company terminates your employment for any reason,
other then those referred to in Appendix 2, prior to the end of
the 3 year period the company will pay in full the salary
outstanding for the unexpired period of the contract.
1
<PAGE>
2. JOB TITLE
The title of the job that you are employed to do is Chief Financial
Officer but this may change from time to time to reflect your actual
responsibilities with the Company. THE JOB DESCRIPTION MAY FROM TIME TO
TIME BE AMENDED BY THE COMPANY AND IN ADDITION TO THE DUTIES SET OUT IN
IT YOU MAY AT ANY TIME BE REQUIRED TO TAKE ADDITIONAL OR OTHER DUTIES
NECESSARY TO MEET THE REQUIREMENTS OF THE COMPANY.
3. LOCATION OF WORK
Your normal place of work will be at the company address. The Company
reserves the right to transfer the Employee to alternative positions
provided these are no less favourable to him or to another location if
the necessity arises. In cases of substantial change, the Employee will
receive an amendment to his Contract of Employment
4. REMUNERATION
4.1 Your salary will commence at the gross rate of L70,000 per annum
plus, executive car and bonuses as set out in Appendix I and/or
latest review letter payable in arrears at monthly intervals after
deduction of PAYE income tax and national insurance contributions
by [illegible] monthly. You are responsible for informing the
Company of your bank and/or PAYE and National Insurance details
4.2 The Company reserves the right to deduct from your remuneration
under these terms and conditions and from any other sums owed or
owing by the Company to you one day's pay for each day of
unauthorised absence. Unauthorised absence shall include any
absence from work unless due to:--
4.2.1 Genuine sickness which has been notified to the Company;
4.2.2 Absence for which the Company has given permission;
4.2.3 Genuine reasons outside your control which are acceptable
to the Company
4.3 The Company shall be entitled at any time during your employment
and in any event on termination for whatever reason to deduct from
your remuneration under these terms and conditions or from any
other sums owed or owing by the Company to you any monies due from
you to the Company including (but not limited to) any outstanding
loans, overpayments, advances, the cost of repairing any damage or
loss to the Company's property caused by you, excess holidays
taken and any other monies owed or owing by you to the Company
4.4 The Company will review your salary in its absolute discretion
during the following January and on an annual basis thereafter
5. EXPENSES
5.1 If you are required to work away from your normal place of
business you will be
2
<PAGE>
entitled to reimbursement of any expenses incurred by you on
behalf of the Company on production of original receipts. Claims
for expenses must be submitted monthly on the Company's standard
expense form to which the receipts must be attached
5.2 The following expenses can normally be claimed:--
5.2.1 Petrol, oils and lubricants or other transport costs at a
rate previously agreed by the Company;
5.2.2 Car parking charges;
5.2.3 Repairs and spare parts if previously agreed with the
Company;
5.2.4 A motor mileage allowance for privately owned vehicles used
for the Company's business (presently at 35p per mile);
5.2.5 Telephone calls made in connection with the Company's
business;
5.2.6 Meals (excluding lunches unless previously agreed by the
Company);
5.2.7 Stationery
5.3 Other than in exceptional circumstances, hotel and other
accommodation expenses will not be reimbursed unless previously
authorised by the Company
5.4 Expenses cannot be claimed in respect of your journey to and from
your normal place of work
6. VEHICLE
6.1 You may be provided with a vehicle deemed by the Company to be
suitable for the performance of your duties under this Agreement
in respect of which the Company will pay the running costs whilst
you are performing your duties together with all insurance and
maintenance costs
6.2 If you are provided with a vehicle, you must ensure that:-
6.2.1 Regular servicing is carried out in accordance with the
manufacturer's recommendations and that all roadworthiness
certificates required for the vehicle are obtained and
maintained in date;
6.2.2 You provide safe parking or garaging overnight;
6.2.3 You carry out regular cleaning and basic maintenance of the
vehicle;
6.2.4 Any accidents are reported immediately to the Company's
insurers with no liability having been admitted by you and
when necessary that all insurance claim forms and estimates
are submitted;
6.2.5 The vehicle records are kept up to date;
3
<PAGE>
6.2.6 A current tax disc is displayed;
6.2.7 Smoking is prohibited in the vehicle
6.3 If through your gross negligence any damage is "caused to the
vehicle, you will be responsible for reimbursing the Company in
full the cost of any repairs or other expenses incurred by the
Company in returning the vehicle to the condition in which it was
entrusted to you
6.4 In all cases you shall be responsible for the discharge of the
excess on all claims settled by the Company's insurers and for
payment of all fines connected with the use of the vehicle
6.5 The Company will be responsible for insuring all its property
including tools, which may be entrusted to the Employee. The
Employee will be under a duty to ensure that these goods are not
damaged or lost. Any Company property entrusted to the Employee
must be returned by the Employee on request by the Company. If the
Employee fails to return any Company property its value will be
deducted from the Employees next monthly salary payment. Company
property must not be left in a vehicle overnight and should not be
left unattended for any unnecessary length of time. Should any of
the Company's property be left in the vehicle, the vehicle must be
alarmed and immobilised
6.6 If you wish to use your own vehicle in the performance of your
duties, you must first obtain the consent of the Company and must
ensure that adequate insurance cover is provided to cover the
business use
7. COMMISSION
7.1 N/A
8. HOURS OF WORK
8.1 Your normal hours of work will be from 9:00am to 5:30pm Monday to
Friday inclusive, with an hour's break for lunch each day to be
taken by arrangement with the Company
8.2 You may also be required to work additional or different hours
without additional remuneration as may be necessary for the full
and effective performance of your duties as the Company may
reasonably require of you from time to time
9. HOLIDAYS
9.1 You am entitled, in addition to the normal public holidays, to
take 25 working days in each complete holiday year which runs from
1st January to 31st December and you will be paid your normal
basic remuneration during such holidays
9.2 Should the Employee have completed a full year's continuous
service on 31st December each year the employee will receive an
additional day's holiday. This
4
<PAGE>
will continue yearly to a maximum of 35 days entitlement
9.3 If your employment commences or terminates part way through the
holiday year, your entitlement to holidays during that year will
be calculated pro rata to your annual entitlement by reference to
the number of complete months worked in that year
9.4 You will be entitled to payment in lieu of holidays accrued to you
and untaken as at the date of termination of employment.
Deductions from final salary due to you on termination of
employment will be made in respect of any holidays taken in excess
of entitlement. One day's holiday pay is calculated as 1/260th of
your annual basic salary
9.5 Reasonable notice of intention to take holidays. must be given to
the Company, and all holidays must be taken at times, which have
been previously approved and agreed in writing by the Company
9.6 Holiday entitlement unused at the end of the holiday year CANNOT
be carried over into the next holiday year, nor will payment be
made in lieu of unused holiday [OTHER THAN IN EXCEPTIONAL
CIRCUMSTANCES AND AT THE COMPANY'S ABSOLUTE DISCRETION]
10. SICKNESS AND OTHER ABSENCE
10.1 If you are absent from work on account of sickness or injury, you
or someone on your behalf should inform The Sales Director or a
deputy appointed by him of the reasons for your absence as soon as
possible but no later than 10.30 am on the working day on which
absence first occurs. If the sickness continues into subsequent
working weeks, the Employee must ensure that he telephones the
Company on the Monday of each week to notify this
10.2 In respect of absence lasting 7 or fewer calendar days, you need
not produce a medical certificate unless you are specifically
requested to do so. You must, however, provide written reasons for
your absence immediately you return to work after such absence
10.3 In respect of absence lasting more than 7 calendar days, you must
on the 8th calendar day of absence provide a medical certificate
stating the reasons for absence and thereafter provide a like
certificate each week to cover any subsequent period of absence
10.4 The Company reserves the right to ask you at any stage of absence
to produce a medical certificate and/or to undergo a medical
examination
10.5 If you are absent due to sickness or injury, you will not be paid
your normal salary for the period of absence, but you may be
entitled to company sick pay ("CSP") and/or statutory sick pay
("SSP") for all or part of your absence
10.6 CSP is not payable during the Probationary Period. For the first
10 working days, (whether continuous or cumulative) absence
through sickness or injury in any period of 12 months, CSP is
equivalent to your normal basic salary less any SSP or other state
benefits to which you are entitled
5
<PAGE>
10.7 This paragraph applies only to periods of absence through sickness
or injury of 11 or more consecutive working days. During such
periods, CSP will first be paid in accordance with paragraph 10.6.
Once your total number of days' absence in the proceeding 12 month
period has reached 10, CSP for the subsequent days will be that
sum which when added to your entitlement to SSP produces the same
net amount as half of your basic salary, save that CSP will only
be paid until the total number of days' absence in the 12 month
period is 17
10.8 Entitlement to SSP depends upon the number of days of sickness.
There is no entitlement for the first three qualifying days. For
these purposes qualifying days are Monday to Friday. SSP is
payable to you by the Company for up to 28 weeks, after which you
are expected to claim from the DSS any state benefits for which
you are eligible.
10.9 Entitlement to both CSP and SSP is dependent upon the following:
10.9.1 proper notification of your absence in accordance with
paragraph 10.1 above; and
10.9.2 proper provision of medical certificates in accordance with
paragraphs 10.2 and 10.3 above
10.10 If you recover compensation from a third party in respect of any
injury which results in your absence from work you will be liable
to repay to the Company all remuneration which you have received
during such absence or the amount of compensation recovered,
whichever is the lesser.
11. MATERNITY LEAVE
11.1 If the Employee is pregnant and has (or will have by the eleventh
week before the Employee's expected week of confinement)
completed two years' continuous service, the Employee will be
entitled to maternity pay and to return to her job after an
absence for pregnancy and confinement, provided that she:
11.1.1 continues to be employed by the Company until immediately
before the beginning of the eleventh week before the
expected week of her confinement
11.1.2 advised the Company in writing not less than three weeks
before her absence begins (or, if that is not reasonably
practicable, as soon as is reasonably practicable) that
she will be, or is, absent from work wholly or partly
because of her pregnancy or confinement
11.1.3 arranges that the Company is supplied with a letter or
certificate signed by her medical practitioner or a midwife
confirming her pregnancy and specifying the expected week
of her confinement
11.1.4 includes in the letter mentioned in 11.1.2 above a
statement that she intends to return to work with the
Company
11.1.5 responds in writing within 14 days (or as soon as
reasonably practicable
6
<PAGE>
thereafter) of receiving a letter from the Company
requesting confirmation of her intention to return to work.
(Note that the Company's letter will not be sent earlier
than seven weeks after the beginning of the week in which
the Employee notified the date confinement was due and that
failure to respond to it within the period mentioned will
mean that the Employee will forfeit the right to return to
work) and
11.1.6 gives notice of her intention to return at least 21 days
before she wishes to return, as long as such notice can be
given no later than 26 weeks after the week in which
confinement occurred in order that the Employee returns to
work no later than 29 weeks calculated from midnight on the
Sunday at the beginning of the week on which the
confinement occurred
11.2 The date of return notified by the Employee may be extended by up
to a further four weeks, but no longer, if the Employee submits a
medical statement showing that for reasons of health the Employee
would be unable to return on the day orginally advised. The
information given in this paragraph is only a summary of the
principal rights of pregnant employees. The Employee is advised to
request the Company no later than fourteen weeks before the
expected week of confinement and preferably well before then, for
full details of rights to maternity pay and leave
12. PENSION
[THE COMPANY DOES NOT OPERATE A PENSION SCHEME AND THERE IS NO
CONTRACTING OUT CERTIFICATE IN FORCE IN RESPECT OF YOUR EMPLOYMENT]
13. NOTICE OF TERMINATION OF EMPLOYMENT
13.1 Subject to paragraph 1.3 the length of notice which you are
entitled to receive from the Company to terminate your employment
is one month until you have been continuously employed for 5 years
and thereafter your notice entitlement shall be one week for each
year of continuous employment until you have completed 12 years of
continuous employment after which you will be entitled to 12
weeks' notice
13.2 Subject to paragraph 1.3 the length of notice which you are
obliged to give to the Company to terminate your employment is one
month. Such notice must be given in writing
13.3 The Company may make a payment to you in lieu of the notice to
which you are entitled
13.4 If you leave without giving the minimum period of notice or you
leave during the notice period without the consent of the Company,
the Company reserves the right to deduct one day's pay for each
day not worked during the notice period
13.5 You shall upon request at any time and in any event upon the
termination of your employment immediately deliver to the Company
all plans, keys, security
7
<PAGE>
passes, statistics, documents, records, papers, magnetic disks,
tapes or other software storage media, credit cards and all
property of whatsoever nature which may be in your possession or
control and relate in any way to the business affairs of the
Company and you shall not, without the written consent of the
Company, retain any copies of any of these items
14. GRIEVANCE PROCEDURE
14.1 Except during the Probationary Period, if you are unhappy about
any aspect of your employment, you may raise the matter at first
instance orally or in writing with your superior. If this does not
produce a satisfactory resolution of your grievance, you may
appeal in writing within 14 days to the Company Secretary, and
thereafter within 14 days to the Managing Director whose decision
shall be final
14.2 At any stage of the grievance procedure you may be accompanied by
a colleague. If you invoke your right to appeal under 14.1 you
should notify the Sales Director of the name of your colleague in
advance of any meeting
15. DISCIPLINARY RULES AND PROCEDURE
The Company's disciplinary rules and procedures are set out in Appendix 2
attached to this statement
16. RESPONSIBILITIES
16.1 In addition to the specific duties which the Employee will be
given, you must at all times
16.1.1 endeavour to provide the best possible service to customers
of the Company
16.1.2 assist to the best of the Employee's ability to ensure that
the Company achieves its stated objectives
16.1.3 protect the interest of the Company and in particular
protect all confidential information of the company which
may come into the Employee's possession
17. TRAINING
17.1 You may at the Company's expense be provided with training during
the course of your employment
17.2 The Company reserves the right to recover the cost of any such
training from you if within three months from the end of any
training course you give to the Company notice to terminate your
employment
8
<PAGE>
18. HEALTH AND SAFETY AT WORK
18.1 The Employee will be responsible for ensuring that the Employee's
place of work and working practices are such that the requirements
of the Health and Safety at Work legislation are met by the
Employee and the Company
18.2 Should the Employee discover any circumstances which the Employee
feels needs attention he should contact his immediate superior
without delay
19. GENERAL
19.1 If any doubt exists as to what can or cannot be done, used or
disclosed the Employee should contact his immediate manager
19.2 If any part or parts of this agreement are held by any court or
tribunal to be illegal or unenforceable such ruling shall not
affect the remainder of this agreement, which shall continue to
have effect and be enforceable
20. INTELLECTUAL PROPERTY RIGHTS
20.1 It is agreed that the intellectual property rights and all
ownership rights of any software that the Employee may develop or
work on whilst in the employment of ISL shall remain solely with
ISL.
21. CONFIDENTIALITY AND POST-TERMINATION RESTRICTIONS
21.1 You agree to abide by the terms of the confidentiality and
post-termination restrictions which are set out in Appendix 3
attached to this statement and which form part of your contract of
employment
22. COLLECTIVE AGREEMENTS
22.1 No collective agreement directly affects the terms and conditions
of your employment
23. SUBSTITUTION FOR ANY PREVIOUS AGREEMENT
23.1 This Agreement cancels and is in substitution of all previous
letters of engagement, agreements and arrangements whether oral or
in writing related to the subject matter hereof between the
Company and yourself, all of which shall be deemed to have been
terminated by mutual consent
24. LAW
24.1 This Agreement shall be governed by and construed in accordance
with the Laws of England whose Courts shall be courts of competent
jurisdiction
9
<PAGE>
SIGNED [ILLEGIBLE] DATE [ILLEGIBLE]
------------------------------- -------------------
FOR & ON BEHALF OF
INTEGRITY HOLDINGS LTD
Please acknowledge receipt of this statement by signing below and returning it
to the Sales Director.
I, Paul Carroll, acknowledge that I have received a statement of the particulars
of my employment as required by Section 1 of the Employment Rights Act 1996 and
confirm my agreement that these constitute my contract of employment with the
Company.
SIGNED /s/ Paul Carroll DATE 18/7/98.
----------------------------- -----------------------
PAUL CARROLL
10
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<ARTICLE> 5
<S> <C>
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