Exhibit 10.09
DATED 8th October 1996
--------------------------------------------------------------------------------
BRITISH COAL CORPORATION
- and -
LA SALLE PARTNERS INTERNATIONAL
--------------------------------------------------------------------------------
AGREEMENT
for the sale and purchase of shares in
CIN PROPERTY MANAGEMENT LIMITED
--------------------------------------------------------------------------------
Xxxxxxx Xxxxx
Xxxxxxxx Xxxxx
Xxxxxxxx Xxxxxx
Xxxxxx XX0X 0XX
Tel: 0000 000-0000
Fax: 0000 000-0000
Ref: 223/C411/30334034
TABLE OF CONTENTS
Clause Headings Page
1. INTERPRETATION 1
2. SALE AND PURCHASE 7
3. CONSIDERATION 7
4. CONDITIONS 7
5. ACTION PENDING COMPLETION 8
6. VENDOR'S UNDERTAKING 12
7. COMPLETION ACCOUNTS 12
8. COMPLETION 14
9. WARRANTIES AND UNDERTAKINGS 17
10. PURCHASER'S WARRANTIES AND UNDERTAKINGS 26
11. PENSION SCHEMES 27
12. TAX ADMINISTRATION AND GROUP RELIEF 29
13. ANNOUNCEMENTS 32
14. MISCELLANEOUS 32
15. COSTS 33
16. NOTICES 33
17. GOVERNING LAW, JURISDICTION AND 34
SERVICE OF PROCESS
i
SCHEDULE 1 PART 1 DETAILS OF THE COMPANY
PART 2 DETAILS OF THE SUBSIDIARY
SCHEDULE 2 WARRANTIES
SCHEDULE 3 PROPERTIES
SCHEDULE 4 DETAILS OF NEW BUSINESS PREMISES
SCHEDULE 5 INTELLECTUAL PROPERTY RIGHTS
SCHEDULE 6 BASIS OF PREPARATION OF COMPLETION
ACCOUNTS
DOCUMENTS IN AGREED TERMS
Director's Resignation Letter
Management Agreements
Deed of Guarantee (Management Agreements)
Tax Deed
Agreement for Leases of 6th floor, 00 Xxxxxxxxx Xxxxxx and Ancillary Property
Documentation
Articles of Association
Resolutions
Opinion Letter
Supplemental Name and Logo Agreement
Management Agreement Side Letters
ii
THIS AGREEMENT is made on 8th October 1996
BETWEEN:
(1) BRITISH COAL CORPORATION of Xxxxxxx House, 0-00 Xxxxx Xxxxxx Xxxxxx, Xx.
Xxxxx'x, Xxxxxx XX0X 0XX (the "Vendor"); and
(2) LASALLE PARTNERS INTERNATIONAL an unlimited company incorporated in England
and Wales (registered number 2547868) and whose registered office is as
Regent Arcade House, 00-00 Xxxxxx Xxxxxx, Xxxxxx X0X 0XX (the "Purchaser").
RECITALS:
(A) CIN Property Management Limited (the "Company") was incorporated in England
on 2nd April 1991 under the Companies Xxx 0000 with registered number
2597050 and is a private company listed by shares. Further details of the
Company, its authorized and issued share capital and the names of its
present directors and secretary are set out in Part 1 of Schedule 1.
(B) The company named in Part 2 of Schedule 1 (the "Subsidiary") is the only
subsidiary of the Company. Further details of the Subsidiary, its
authorized and issued share capital and the names of its present directors
and secretary are set out in Part 2 of Schedule 1.
IT IS AGREED as follows:
1. INTERPRETATION
1.1 In this Agreement and in the Schedules the following definitions are used:
"Accounts" means the audited unconsolidated balance sheet of each of the
Company and Subsidiary as at the Accounts Date and the audited
unconsolidated profit and loss accounts of the Subsidiary in respect of the
accounting reference period ended on the Accounts Date;
"Accounts Date" means 31st March, 1996;
"Agreement for Leases" means the agreement in the agreed terms pursuant to
which the Company is to hold the New Business Premises and of which further
details are set out at Schedule 4;
"Ancillary Property Documentation" means the option to surrender the lease
of the 5th floor, 00 Xxxxxxxxx Xxxxxx and ancillary car park spaces; and a
licence for the two basement car parking spaces;
"Articles of Association" means the Memorandum and Articles of Association
of the Company in the agreed terms to be adopted pursuant to clause 5.3.2;
"Business" means the business of property investment fund management
carried on by the Company;
"Business Premises" means those properties currently used or occupied by
the Company in connection with the Business, brief particulars of which are
set out in Schedule 3;
"CIN Management" means the company with registered number 1905816 (which
was re-registered as unlimited on 20th August 1996);
"Companies Act" means the Companies Xxx 0000;
"Completion" means completion of the sale and purchase of the Shares in
accordance with clause 8;
"Completion Accounts" means a consolidated balance sheet as at the date of
Completion and a consolidated profit and loss account for the period from
Ist April 1996 to the date of Completion for the Group, each prepared on
the basis set out in clause 7 and Schedule 6;
"Completion Date" means the close of business on the date on which
Completion takes place;
"Controlling Shares" means 5,767 issued ordinary shares of (Pounds)1 each
in the capital of the Company;
"Disclosed Schemes" means the British Coal Staff Superannuation Scheme and
the Mineworkers' Pension Scheme;
"Disclosure Letter" means the letter from the Vendor to the Purchaser
delivered immediately before the making of this Agreement;
"Encumbrance" means any option, charge, mortgage, lien, equity, rights of
preemption or any other third party rights;
2
"Environment" means the natural and man-made environment and all or any of
the following media namely air, water and land including air within
buildings and air within other natural or man-made structures above or
below ground;
"Environmental Law" means all laws, regulations, directives, statutes,
subordinate legislation, common law and other national and local laws all
judgements, orders, instructions or awards of any court or competent
authority and all codes of practice and guidance notes which relate to the
Environment or human health or the health of animals or plants, including
the Environmental Protection Xxx 0000, the Environment Xxx 0000, the
Planning (Hazardous Substances) Xxx 0000, the Water Resources Xxx 0000, the
Water Industry Xxx 0000, the Control of Pollution Xxx 0000, the Clean Air
Acts, the Control of Industrial Major Accident Hazards Regulations 1984 and
the Control of Substances Hazardous to Health Regulations 1988 but not the
Town and Country Planning Acts or any other enactment relating to the use,
development and enjoyment of land and buildings;
"Group" means the Company and the Subsidiary, and "Group Company" means
either of them;
"Information Memorandum" means the information memorandum relating to the
Company issued by HSBC Investment Bank plc and dated June 1996;
"Initial Shares" means 118 issued ordinary shares of (Pounds)1 each in the
capital of the Company;
"Intellectual Property Rights" means the intellectual property rights
details of which are set out in Schedule 5;
"IMRO" means the Investment Management Regulatory Organization;
"Leases" means the leases under which the Business Premises are held and of
which brief particulars are set out in Schedule 3;
"Losses" means all losses, liabilities, costs (including without limitation
reasonable legal costs), charges, expenses, actions, proceedings, claims
and demands;
"Management Agreements" means the two agreements to be entered into at
Completion between respectively (i) the Company (1), the Vendor (2) and
Coal Staff Superannuation Scheme Trustees Limited (3) and (ii) the Company
(1), the Vendor (2) and Mineworkers' Pension Scheme Trustees Limited (3)
each in the agreed terms;
3
"Management Agreement Side Letters" means letters to be given at Completion
on behalf of the Trustees, in each case in the agreed terms;
"New Business Premises" means those properties to be used or occupied by
the Company in connection with its business pursuant to the Agreement for
Leases, brief particulars of which are set out in paragraphs 1 to 3 of
Schedule 4;
"Opinion Letter" means the opinion letter from Xxxxx & Associates;
"Option to Surrender" means an option to surrender the lease of 5th floor,
00 Xxxxxxxxx Xxxxxx and ancillary car parking license to be entered into at
Completion between Coal Pension Properties Limited and the Company in the
agreed terms;
"Properties" means the leasehold properties listed in Schedule 3;
"Purchaser's Accountants" means KPMG 0 Xxxxxx Xxxx, Xxxxxx XX0X 0XX;
"Purchaser's Group" means the Purchaser and its subsidiary undertakings and
any parent undertaking of the Purchaser or any subsidiary undertaking of
such parent undertaking;
"Purchaser's Solicitors" means Xxxxxxxxx and May of 00 Xxxxxxxxxx Xxxxxx,
Xxxxxx XX0X 0XX;
"relevant claim" means a claim by the Purchaser in respect of any of he
Warranties or in relation to any misrepresentation;
"Resolutions" means the resolutions in the agreed terms to be passed
pursuant to clause 8.2.1(H);
"Restructuring Date" means 11th July 1996 being the date on which the
property division of CIN Management was transferred to the Company;
"Section 179 Liability" means any liability of the Company under section
179 of the TCGA arising as a result of the sale of the Shares by the Vendor
to the Purchaser pursuant to this Agreement as respects any asset
transferred to the Company pursuant to the hivedown (as defined in sub-
clause 9.21) or as respects the transfer of the shares in the Subsidiary to
the Company;
"Shares" means the 5,885 issued ordinary shares of (Pounds)1 each in the
capital of the Company;
"Subsidiary" means C1N Property Services Limited;
4
"Supplemental Agreement" means the agreement to be entered into upon
Completion relating to the use by the Company of the name 'CIN La Salle';
"taxation" or "tax" means (save as used in Warranty 10.13) the following UK
taxes:
(i) income tax (including income tax required to be deducted or withheld
from or accounted for in respect of any payment), corporation tax,
advance corporation tax, capital gains tax, inheritance tax, value
added tax, customs duties, excise duties, stamp duty, stamp duty
reserve tax, national insurance and other similar contributions; and
(ii) any other taxes, levies, duties, charges, imposts or withholdings
corresponding to, similar to, replaced by or replacing any of them;
together with any interest, penalty or fine in connection with any such
taxation or failure to file any tax return;
"Taxes Act" means the Income and Corporation Taxes Xxx 0000;
"Tax Deed" means the tax deed in the agreed terms between the Vendor and
the Purchaser;
"Tax Warranties" means the warranties contained in paragraph 10 in Schedule
2;
"TCGA" means the Taxation of Chargeable Gains Xxx 0000;
"Trustees" means Coal Staff Superannuation Scheme Trustees Limited and
Mineworkers' Pension Scheme Trustees Limited;
"Vendor Solicitors" means Xxxxxxx Xxxxx of Xxxxxxxx Xxxxx, Xxxxxxxx Xxxxxx,
Xxxxxx XX0X 0XX; and
"Warranties" means the warranties contained in Schedule 2.
1.2 In this Agreement, words and expressions defined in the Companies Act shall
bear the same meaning as in that Act.
1.3 In this Agreement, save where she context otherwise requires:
1.3.1 words in the singular shall include the plural, and vice versa;
5
1.3.2 the masculine gender shall be deemed to include the feminine and
neutral and vice versa;
1.3.3 a reference to a person shall include a reference to a firm, a body
corporate, an unincorporated association or to a person's executors
or administrators;
1.3.4 a reference to a clause, sub-clause, Schedule (other than to a
schedule to a statutory provision) shall be a reference to a
clause, sub-clause, Schedule (as the case may be) of or to this
Agreement;
1.3.5 if a period of time is specified and dates from a given day or the
day of an act or event, it shall be calculated exclusive of that
day;
1.3.6 references to any English legal term for any action, remedy, method
or judicial proceeding, legal document, legal status, court,
official or any legal concept or thing shall in respect of any
jurisdiction other than England be deemed to include what most
nearly approximates in that jurisdiction to the English legal term;
1.3.7 a person shall be deemed to be connected with another if that
person is connected with another within the meaning of section 839
of the Taxes Act;
1.3.8 references to writing shall include any modes of reproducing words
in a legible and non-transitory form;
1.3.9 a reference to a balance sheet or profit and loss account shall
include reference to any note forming part of it;
1.3.10 references to documents "in the agreed terms" shall be to documents
agreed between the parties, annexed to this Agreement and
initialled for identification by or on behalf of the Vendor and the
Purchaser; and
1.3.11 the headings in this Agreement are for convenience only and shall
not affect the interpretation of any provision of this Agreement.
1.4 The definitions adopted in the recitals and introductory statements
preceding this clause apply throughout this Agreement and the Schedules.
1.5 Where any of the Warranties is qualified by the expression "so far as the
Vendor is aware" or by reference to the knowledge of the Vendor or by an
expression of similar import, for the purpose of such expression or
expressions only the Vendor shall be deemed to mean Xx. Xxxxxx Xxxxxxxxxx,
Director - Legal Affairs and Secretary of British Coal Corporation, Mr. Xxx
Xxxxxxx - Head of Privatization at
6
British Coal Corporation; Xx. Xxxxxx Xxxxxxx - Head of Taxation at British
Coal Corporation; Mr. Xxxx Yeannan - Managing Director of the Company and
Mr. Xxxxx Xxxxxx - Director of the Company having made all reasonable
enquiry and any such Warranty or Warranties are given only on the basis of
matters of which those persons are aware or which are within the knowledge
of those persons. For the avoidance of doubt, none of such persons shall
be personally liable in respect of any of the Warranties by reason of the
provisions of this sub-clause 1.5.
2. SALE AND PURCHASE
2.1 The Vendor is the beneficial owner and shall sell with full title guarantee
and the Purchaser shall purchase the Shares.
2.2 The Shares shall be sold free from any option, charge, lien, equity,
encumbrance, rights of pre-emption or any other third party rights and
together with all rights attached to them at the date of this Agreement or
subsequently becoming attached to them.
2.3 The Vendor hereby waives and agrees to procure the waiver of any
restrictions on transfer (including pre-emption rights) which may exist in
relation to the Shares under the articles of association of the Company or
otherwise.
3. CONSIDERATION
3.1 The total consideration for the sale of the Shares shall be the payment at
the date of Completion to the Vendor of (Pounds)9,650,000 in cash.
3.2 The consideration payable to the Vendor pursuant to sub-clause 3.1 shall be
deemed to be reduced insofar as possible by an amount equal to the
aggregate amount (if any) paid by the Vendor to the Purchase under or
pursuant to the Warranties or the Tax Deed or pursuant to clauses 9.21 or
9.24.
4. CONDITIONS
4.1 Completion of this Agreement is conditional upon satisfaction of the
following conditions or their satisfaction subject only to Completion of
this Agreement:
4.1.1 IMRO consenting (or being deemed to have consented) to the change of
control of the Company pursuant to this Agreement and giving such
other consents and permissions as are required by the Company in
order to continue to carry on business immediately following
Completion;
7
4.1.2 confirmation that the Management Agreement and the Management
Agreement Side Letters to which the relevant Trustee is a party has
been executed by the relevant Trustee and will be held in escrow by
the Vendor's Solicitors to the order of the relevant Trustee until
Completion.
4.2 The parties hereby undertake to use all reasonable endeavors to ensure the
satisfaction of the conditions set out in clause 4.1. Without prejudice to
the foregoing, it is agreed that all submissions and requests to, and
requests and inquiries from IMRO shall be dealt with by the Vendor and the
Purchaser in consultation with each other and the Vendor and the Purchaser
shall promptly co-operate with and provide all necessary information and
assistance reasonably required by IMRO upon being requested to do so by the
other or by IMRO.
4.3 The party responsible for satisfaction of each condition shall promptly
give notice to the other party of satisfaction of the relevant condition
within two business days of becoming aware of the same. If the conditions
in clause 4.1 are not satisfied on or before 30th November 1996, save as
expressly provided, this Agreement shall lapse and no party shall have any
claim against any other under it, save for any claim arising from breach of
the undertaking contained in clause 4.2.
5. ACTION PENDING COMPLETION
5.1 The Vendor shall procure that pending Completion:
5.1.1 the Company and the Subsidiary will carry on business only in the
ordinary course, save in so far as agreed in writing by the
Purchaser;
5.1.2 the Purchaser and its agents will upon reasonable notice, be allowed
reasonable access to, and to take copies of, the books and records
of the Company and the Subsidiary including without limitation, the
statutory books, minute books, leases, licenses, contracts, details
of receivables, intellectual property, know-how, supplier lists and
customer lists in the possession or control of the Company or the
Subsidiary. Provided that the obligations of the Vendor under this
clause shall not extend to allowing access to information which is
subject to legally binding obligations of confidentiality in favour
of third parties;
5.1.3 such representatives and advisers as the Purchaser requests may be
designated to work with the Vendor with regard to the management and
operations of the Company and the Subsidiary. The Vendor will
consult and will cause the Company and the Subsidiary to consult
with such representatives and advisers with respect to any action
which may materially affect the business of the Company or the
Subsidiary taken as a whole. The Vendor
8
will furnish and will cause the Company and the Subsidiary to
provide to such representatives and advisers such information as
they may reasonably request for this purpose; and
5.1.4 each of the Company and the Subsidiary uses its best endeavors to
maintain in force all insurance policies in force at the date
hereof.
5.2
5.2.1 Without prejudice to the generality of clause 5.1, the Vendor shall
collaborate fully with the Purchaser in relation to all material
matters concerning the running of the Company and the Subsidiary
between the date of this Agreement and Completion and during that
period shall procure that the Company and the Subsidiary shall not
without the prior written consent of the Purchaser, such consent not
to be unreasonably withheld or delayed:
(A) save as required by, or contemplated in, this Agreement, incur
or enter into or amend any agreement or commitment other than
in the ordinary course of business or incur any financial
obligation or borrowings so as to place any additional material
burden on the Company or the Subsidiary,
(B) save as required by, or contemplated in, this Agreement, incur
or enter into or amend any contract or commitment which is not
capable of being terminated without compensation at any time
with three months' notice or less or which is not in the
ordinary course of business which involves or may involve total
annual expenditure in excess of (Pounds)10,000;
(C) incur or enter into or amend any Encumbrance, contract or
commitment relating to any of the Properties or their
management or the terms payable therefor;
(D) save as required by, or contemplated in, this Agreement, make
any material amendment to the terms and conditions of
employment (including without limitation, remuneration, pension
entitlements and other benefits) of any of the employees of the
Company and the Subsidiary, provide or agree to provide any
gratuitous payment or benefit to any such person or any of
their dependents, or dismiss any employee or engage or appoint
any additional employee;
(E) save as required by, or contemplated in, this Agreement,
acquire or agree to acquire or dispose of or agree to dispose
of any asset, in each case, involving consideration,
expenditure or liabilities in
9
excess of (Pounds) 1,000;
(F) acquire or agree to acquire any share, shares or other interest
in any company, partnership or other venture;
(G) take steps to procure payment by any debtor generally in
advance of the date on which receivables are usually payable in
accordance with the standard terms of business of the Company
or (if different) the period extended to any particular debtor
in which to make payment;
(H) delay making payment to any trade creditors generally beyond
the date on which payable of the relevant trade debt should be
paid in accordance with the credit period authorized by the
relevant creditors (or, if different, the period extended by
creditors in which to make payment);
(I) amend any insurance contract or fail to notify any insurance
claim in accordance with the provisions of the relevant policy
or settle any such claim below the amount claimed;
(J) save as required by this Agreement create, allot or issue any
share or loan capital of the Company;
(K) declare, make or pay any dividend or other distributions to
shareholders.
5.3
5.3.1 After satisfaction of the conditions in sub-clause 4.1, and as near
as practicable but prior to the Completion Date:
(A) the Purchaser or the Purchasers Solicitors shall (on behalf of
the Purchaser and LP International Inc., a Delaware Corporation
and a member of the Purchaser's Group) deliver by telegraphic
transfer to the Vendor or the Vendor's Solicitors the sum of
(Pounds)193,492 as consideration for the Initial Shares and the
Vendor shall thereafter transfer 59 of the Initial Share to the
Purchaser and the remaining 59 Initial Shares to LP
International Inc., and
(B) the Vendor shall thereafter procure that the directors of the
Company shall approve the transfers of the Initial Shares for
10
registration and the entry of the transferees in the register of
members of the Company, in each case subject only to the
transfers being subsequently presented duly stamped;
5.3.2 Following the transfer of the Initial Shares and their registration
in each case in accordance with sub-clause 5.3.1 the Vendor shall
procure that the Company:
(A) adopts the Articles of Association; and
(B) re-registers as an unlimited company in accordance with section
49 of the Companies Act.
5.4 The Purchaser undertakes to indemnify and keep indemnified the Vendor
against:
5.4.1 all Losses arising as a result of the re-registration of the Company
as unlimited pursuant to sub-clause 5.3.2, including, without
limitation as a result of the application of Section 74 of
Insolvency Xxx 0000, unless and to the extent that the same arise in
relation to a matter which constitutes a breach of the Warranties;
and
5.4.2 if there is a transfer of the Initial Shares by the Purchaser to the
Vendor pursuant to sub-clause 8.4.1:
(A) any payment by the Vendor of stamp duty on such transfer; and
(B) any liability of the Vendor for corporation tax on chargeable
gains arising in respect of the disposal of the Initial Shares
by the Vendor to the Purchaser pursuant to clause 5.3.1. The
due date of payment of any amount under this paragraph (B) is
the date falling two business days before the date on which the
Vendor would be liable to pay such corporation tax to the
Inland Revenue without incurring any penalties or interest;
provided that the indemnities in subclauses 5.4.1 and 5.4.2 will not apply
if the parties fail to complete the Agreement due to a breach of contract
by the Vendor (other than under warranty 17.8) after the date hereof.
5.5 If the Vendor subsequently disposes of a sufficient number of shares of the
Company to represent 2% of the share capital of the Company, the Vendor
shall pay to the Purchaser an amount equal to the payment that was made by
the Purchaser under paragraph (B) of sub-clause 5.4.2. The due date of
payment of any amount under this clause 5.5 shall be the date on which the
Vendor would have to account for any
11
corporation tax on chargeable gains arising on such subsequent disposal
(assuming for these purposes that such subsequent disposal would give rise
to such a liability to corporation tax) without incurring any interest or
penalties.
6. VENDOR'S UNDERTAKING
The Vendor undertakes to procure that the annual discretionary bonuses
payable to employees of the Company in respect of the period 1 January 1996
to and including the date of Completion are paid on or about Completion in
accordance with the arrangements notified in writing by the Vendor to the
Purchaser prior to the date hereof.
7. COMPLETION ACCOUNTS
7.1 The provisions of this clause 7 shall have effect in respect of the
Completion Accounts.
7.2 The Purchaser shall procure that the Company shall prepare a draft of the
Completion Accounts as soon as practicable following Completion and in any
event within 45 days from Completion. For the avoidance of doubt, and
without prejudice to the obligations of the Purchaser under this clause
7.2, the directors of the Company shall be responsible for the preparation
of the Completion Accounts although they or the Company shall not be
personally liable or owe any duty of care to the Vendor or the Purchaser in
respect of the same. Once prepared, the Purchaser shall procure that the
draft Completion Accounts shall forthwith be delivered to the Trustees, the
Vendor and to the Vendor's Accountants, Messrs. Ernst & Young.
7.3 The Vendor shall forthwith instruct Messrs. Ernst & Young to undertake a
review of the draft Completion Accounts within 30 days from receipt of the
draft Completion Accounts. If Ernst & Young consider that such draft
Completion Accounts have been prepared in accordance with the provisions of
this Agreement they shall notify the Vendor and the Purchaser of such fact
within the 30 day period, the Purchaser shall procure that such Completion
Accounts are approved by and signed on behalf of the board of the Company
as soon as practicable thereafter. If Ernst & Young do not consider that
such draft Completion Accounts have been prepared in accordance with the
provisions of this Agreement, they shall notify the Company within such 30
day period of the reasons therefor and specify the adjustments which, in
their opinion, should be made to the draft Completion Accounts in order to
comply with the requirements of this Agreement and the parties shall (in
consultation with Messrs Ernst & Young and the Purchaser's Accountants)
meet and discuss the objections of Messrs Ernst & Young and reach agreement
upon the adjustments (if any) required to be made to the draft Completion
Accounts.
12
7.4 If Messrs Ernst & Young are satisfied with the draft Completion Accounts
(either as originally submitted or after adjustments have been agreed) or
if Messrs Ernst & Young fail to notify the Purchaser of their non-
acceptance of the draft Completion Accounts within the 30 day period
referred to in clause 7.3, then the draft Completion Accounts
(incorporating any agreed adjustments) shall constitute the Completion
Accounts for the purpose of this Agreement. The Purchaser shall procure
that such Completion Accounts are approved by and signed on behalf of the
board of the Company as soon as practicable thereafter.
7.5 If the Vendor and the Purchaser do not reach agreement within 15 days of
Messrs. Ernst & Young's notice of non-acceptance under clause 7.3, then the
matters in dispute shall be referred, on the application of either party,
for determination by an independent firm of internationally recognized
chartered accountants to be agreed upon by the Vendor and the Purchaser or,
failing agreement within a further period of 15 days, to be selected by the
President for the time being of the Institute of Chartered Accountants in
England and Wales. The following terms of reference shall apply:
7.5.1 the Purchaser's Accountants and Messrs. Ernst & Young shall each
promptly prepare a written statement on the matters in dispute which
(together with the relevant documents) shall be submitted to such
independent firm for determination and copied to the other party;
7.5.2 in giving such determination, the firm shall state what adjustments
(if any) are necessary to the draft Completion Accounts in order so
comply with the requirements of this Agreement;
7.5.3 any such firm shall act as an expert (and not as an arbitrator) in
making any such determination which shall be final and binding on
the parties; and
7.5.4 the costs of such firm shall be borne by the Vendor and/or the
Purchaser in whole or in part as such firm may determine, in its
sole discretion, to be fair and reasonable.
7.6 As soon as all matters in dispute are finally determined pursuant to clause
7.5 the Purchaser shall procure that the Company prepare a revised version
of the Completion Accounts incorporating the adjustments under clause 7.5.2
and that such Completion Accounts are approved and signed as aforesaid.
7.7 The Purchaser shall procure that the signed Completion Accounts are sent to
the Vendor and to the Trustees.
13
7.8 The Purchaser and, if applicable, the Vendor, shall procure that there is
provided to Messrs. Ernst & Young all reasonable assistance for the
purposes of carrying out their review including (without limitation) access
upon reasonable notice and during normal working hours to all working
papers relevant to the preparation of the Completion Accounts and to the
accounting records of the Company and the Subsidiary as well as providing
all of the information and explanations which Messrs. Ernst & Young
consider reasonably necessary for the purpose of their review.
7.9 The Vendor is obliged pursuant to clause 4 of the Customer Agreements dated
the 11th July, 1996 between the Company and each of the Trustees
respectively to reimburse the net expenses of the Company. The purpose of
the Completion Accounts is to determine such net expenditure.
7.10 Except as provided in clause 7.5.4 each of the Vendor and the Purchaser
shall bear its own costs in connection with this clause 7, and those of its
advisers.
7.11 The Completion Accounts be prepared on the basis set out in Schedule 6.
8. COMPLETION
8.1 Completion shall take place at the offices of the Vendor's Solicitors on
the fifth business day after the last of the conditions set out in clause 4
is satisfied, or such other place and/or time as the parties shall agree.
8.2 At Completion:
8.2.1 the Vendor shall deliver or cause to be delivered to the Purchaser
or the Purchaser's Solicitors:
(A) evidence to the reasonable satisfaction of the Purchaser of the
authority of any person executing this Agreement and any other
agreed form document hereunder and any other party thereto
(other than the Purchaser) on the Vendor's behalf;
(B) duly executed transfers to the Purchaser and/or nominee of the
Controlling Shares, together with a definitive share
certificate for them in the name of the Vendor or its nominee;
(C) the written resignations of the non-executive directors of the
Company shown as resigning in Schedule 1 executed as a deed in
the agreed terms;
14
(D) the certificates of incorporation, common seals, all statutory
and minute books (which shall be written up to, but not
including, the date of Completion) and share certificate books
of the Company and the Subsidiary together with an unused share
certificate forms;
(E) all the deeds relating to the title of the Company or the
Subsidiary to each of the Properties;
(F) notices of resignation of the existing auditors of the Company
and of the Subsidiary;
(G) an original copy of each of the Management Agreements and
Management Agreement Side Letters executed by the Vendor, the
relevant Trustee and the Company (as relevant) together with
evidence that both the Trustees and the Secretary of State for
Trade and Industry have approved the identify of the Purchaser;
(H) a copy of a resolution in the agreed terms of the manners of
the Company increasing the authorized share capital of the
Company to (Pounds)1,000,000 divided into 1,000,000 Ordinary
Shares of (Pounds)1 each;
(I) evidence to the reasonable satisfaction of the Purchaser of the
due fulfillment of the provisions of clause 5.3 and sub-clause
8.2.2;
(J) the Tax Deed duly executed by the Vendor;
(K) the Agreement for Leases and the Ancillary Property
Documentation duly executed by the Company and by Coal Pension
Properties Limited; and
(L) the Supplemental Agreement executed by the Vendor who shall use
its best endeavors to procure the execution thereof by the
other parties thereto.
8.2.2 the Vendor undertakes to the Purchaser to procure that the following
business is transacted at meetings of the directors of the Company
and where relevant of the Subsidiary:
(A) the directors of the Company shall approve the transfers of the
Controlling Shares for registration and the entry of the
transferee in the register of members of the Company, in each
case subject only to the transfers being subsequently presented
duly stamped;
15
(B) the situation of the registered office of the Company and of
the Subsidiary shall be changed to 0xx Xxxxx, 00 Xxxxxxxxx
Xxxxxx, Xxxxxx X0X 00XX;
(C) the accounting reference date of the Company and of the
Subsidiary shall be changed to 31st December 1996;
(D) any person nominated by the Purchaser for appointment as a
director of the Company or of the Subsidiary shall be so
appointed;
(E) KPMG shall be appointed to replace the existing auditors of the
Company and of the Subsidiary;
(F) the directors of the Company shall approve the Management
Agreements, Management Agreement Side Letters and the Agreement
for Leases and the Ancillary Property Documentation for
execution;
(G) the directors of the Company shall approve the application for
the subscription by the Purchaser for such number of Ordinary
Shares of (Pounds)1 each in the capital of the Company as the
Purchaser shall specify in the letter referred to in clause
8.2.3(C) and allot the said Ordinary Shares of (Pounds)1 each
to the Purchaser; and
(H) the directors of the Company will approve the entering into by
the Company of a subordinated loan with the Purchaser on
standard IMRO terms and the making by the Company of drawings
thereunder.
8.2.3 the Purchaser shall deliver to the Vendor:
(A) evidence to the reasonable satisfaction of the Vendor of the
authority of any person executing this Agreement and any other
agreed form document hereunder on the Purchaser's behalf;
(B) the amount referred to in sub-clause 3.1 (less the amount paid
under sub-clause 5.3.1) by means of CHAPS automated transfer to
the Vendor's bank account at Bank of England Sort Code 10-00-00
British Coal Corporation Central Account, Account Number
51022990;
(C) a letter applying for Ordinary Shares of (Pounds)1 each in the
capital of the Company for cash at par together with the
subscription monies in respect of same; and
16
(D) a deed of guarantee in the agreed terms duly executed by La Salle
Partners Limited in favour of each of the Trustees guaranteeing
the performance of the Company's obligations under each of the
Management Agreements together with the Opinion Letter.
8.3 If the provisions of sub-clauses 8.2.1 and 8.2.2 are not complied with in
all material respects by the Vendor on or by the Completion Date, the
Purchaser shall be entitled (in addition to and without prejudice to all
other rights or remedies available to it including the right to claim
damages) by written notice to the Vendor served on such date:
8.3.1 to elect to terminate this Agreement; or
8.3.2 to effect Completion so far as practicable having regard to the
defaults which have occurred; or
8.3.3 to fix a new date for Completion (not being more than one month
after the agreed date for Completion) in which case the foregoing
provisions of this clause 8.3 shall apply to Completion as deferred
but provided such deferral may only occur once.
8.4 If the Purchaser elects to terminate this Agreement in accordance with sub-
clause 8.3.1 or 9.20 or if this Agreement lapses under sub-clause 4.3 or if
it terminates for any other reason prior to Completion:
8.4.1 the Purchaser shall immediately on such termination or lapsing,
transfer the Initial Shares to the Vendor or as it may direct upon
the Vendor re-paying to the Purchaser (Pounds)193,492 for the
Initial Shares; and
8.4.2 by way of reducing the Purchaser's exposure the Vendor undertakes to
the Purchaser to take reasonable steps effectively to limit the
liabilities of the Purchaser as soon as reasonably practicable after
the transfer referred to in sub- clause 8.4.1 has been completed,
including, if appropriate, transferring the entire business of the
Company to an entity with limited liability and resolving to put the
Company into members voluntary winding-up.
9. WARRANTIES AND UNDERTAKINGS
9.1 The Vendor warrants and represents to the Purchaser in the terms of the
Warranties and further warrants and represents to the Purchaser that the
Warranties (other than Warranty 17.8 (Key Employees) which shall be
repeated on the basis set out therein) will be true and accurate in all
material respects immediately prior to Completion
17
by reference to facts and circumstances then existing as if they had been
given immediately prior to Completion.
9.2 The Vendor accepts that the Purchaser is entering into this Agreement in
reliance upon each of the Warranties.
9.3 Subject to the other provisions of this clause 9, the Purchaser shall be
entitled to claim both before and after the date of Completion that any of
the Warranties has or had been breached.
9.4 The Vendor undertakes to disclose in writing to the Purchaser anything
which is a breach or would be inconsistent with any of the Warranties (in
the case of Warranty 17.8 (Key Employees) immediately and (in any other
case) as soon as reasonably practicable.
9.5 The Vendor undertakes (if any claim is made against the Vendor in
connection with the sale of the Shares to the Purchaser) not to make any
claim against the Company or the Subsidiary or any director, or employees
of the Company or the Subsidiary on whom it may have relied before agreeing
to any terms of this Agreement or the Tax Deed or authorising any statement
in the Disclosure Letter, unless the person who was so relied upon has
acted fraudulently.
9.6 Each of the Warranties shall be construed as a separate warranty and is
given subject to the matters fairly disclosed in the Disclosure Letter and
to any other matter or thing hereafter done or omitted to be done pursuant
to the terms of this Agreement.
9.7 No relevant claim (other than a claim in respect of any of the Tax
Warranties) shall be made unless written notice containing reasonable
details of the relevant claim is served on the Vendor within 18 months from
the Completion Date. No relevant claim under the Tax Warranties or a claim
under the Tax Deed shall be made unless notice is given to the Vendor
before the seventh anniversary of the Completion Date.
9.8 A relevant claim or a claim under the Tax Deed shall not be enforceable
against the Vendor and shall be deemed to have been withdrawn unless legal
proceedings in connection with it are commenced within six months after
written notice of it is first served on the Vendor.
9.9 The aggregate amount of the liability of the Vendor in respect of all
relevant claims and all claims under the Tax Deed (other than a claim n
respect of a Section 179 Liability a "s.179 claim") shall not exceed
(Pounds)9,650,000.
9.10 No liability shall attach to the Vendor in respect of relevant claims or in
respect of claims under the Tax Deed (other than a s.179 claim) unless the
aggregate amount
18
of the liability of the Vendor in respect of all such relevant claims and
claims under the Tax Deed (other than a s.179 claim) shall exceed
(Pounds)50,000, (in which event the Vendor's liability shall, subject as
hereinafter provided be for the total amount of the relevant claims and
claims under the Tax Deed and shall not be limited to the excess) and no
relevant claim or claim under the Tax Deed (other than a s. 179 claim shall
be made unless the individual claim exceeds (Pounds)10,000, and for these
purposes where two or more claims arise from the same matter or
circumstance they shall be treated as one claim.
9.11 The Vendor shall not be liable in respect of a relevant claim:
9.11.1 If it would not have arisen but for anything voluntarily done or
omitted to be done after Completion by the Purchaser or any person
controlling or under the control of or under the same control as
the Purchaser (for the purpose of section 416 of the Taxes Act or
the Company or the Subsidiary or any of their respective employees,
agents or successors in title otherwise than in the ordinary course
of business or otherwise than pursuant to any agreement or other
arrangements made by the relevant person as at the date hereof or
the date of Completion;
9.11.2 to the extent that it arises or is increased as a result only of:
(A) an increase in the rates of taxation after the date of
Completion; or
(B) any change in generally accepted accounting practice or change
by the Company in its accounting practice or methods after the
date of Completion; or
(C) the passing of any legislation, or making of any subordinate
legislation or delivery of any judgment or any change in the
published practice or any tax authority with retrospective
effect after the date of Completion;
9.11.3 to the extent that the amount of such relevant claim (less costs or
recovery) is recoverable by the Purchaser or the Company or the
Subsidiary from its insurers under a policy of insurance in force
at the date of Completion;
9.11.4 to the extent that it relates to:
(A) any matter specifically provided for or included as a
liability in the Accounts or in the Completion Accounts (and,
in the case of the Completion Accounts, in respect of which
reimbursement is made
19
by the Vendor pursuant to the Customer Agreements referred to in
clause 7.9); or
(B) to the extent that Xx. Xxxxx Blossom or, Xx. Xxx Xxxxxx had
actual knowledge prior to the Purchaser's execution of this
Agreement (A) of the circumstances to which the relevant claim
relates and (B) that the circumstances to which the relevant
claim relates amounted to a breach of any of the Warranties;
9.11.5 to the extent that:
(A) the relevant claim is in respect of a liability for taxation
which would not have arisen but for a disclaimer of capital
allowances or a revision to a claim therefor where such revision
or disclaimer is caused or made by the Company or the Subsidiary
after the date of Completion (other than at the request of the
Vendor); or
(B) the relevant claim is in respect of a liability for taxation in
respect of income, profits or gains which were actually earned,
accrued or received by the Company or the Subsidiary but were not
reflected in the Accounts or the Completion Accounts; or
(C) the relevant claim is in respect of a liability for taxation
which would not have arisen or would have been reduced or
eliminated but for a failure or omission on the part of the
Company or the Subsidiary after Completion to make any claim or
election or give any notice or consent or do any other thing the
making or giving or doing of which was taken into account in
computing the provision or reserve for taxation in the Accounts
and which was disclosed in paragraph 10.6 of Section C of the
Disclosure Letter; or
(D) any tax relief of the Company or the Subsidiary incurred in or in
respect of a period ended on or before Completion is available to
relieve or mitigate the liability for taxation giving rise to the
relevant claim; or
(E) the relevant claim is in respect of a liability for taxation
which would not have arisen but for a change of accounting
reference date effected on or after Completion; or
(F) the relevant claim would not have arisen but for anything done
pursuant to clause 5.3;
20
9.11.6 for a breach of Warranty 10.16, to the extent that the relevant
claim is other than in respect of taxation.
9.12 In accordance with clause 14.2 the rights or benefits of or under the
Warranties may be assigned (together with any cause of action arising in
connection with any Warranty) by Purchaser to its successors in title or to
another member of the Purchaser's Group.
9.13
9.13.1 Where the Purchaser or the Company or the Subsidiary is entitled to
recovery from some other person any sum in respect of any matter or
event which could give rise to a relevant claim, the Purchaser
shall or shall procure that the Company or the Subsidiary shall use
his reasonable endeavors to recover that sum (keeping the Vendor at
all times fully and promptly informed of the conduct of such
recovery), and any sum recovered will reduce the amount of the
relevant claim (and, in the event of the recovery being delayed
until after the relevant claim has been satisfied by the Vendor,
shall be paid to the Vendor, after deduction of all costs and
expenses of the recovery).
9.13.2 Without prejudice to the provisions of sub-clause 9.13.1, if the
Vendor has paid to the Purchaser any amount in respect of a
relevant claim and the Purchaser or the Company or the Subsidiary
subsequently receives or recovers from any person other than the
Vendor a sum which is referable to such claim, the Purchaser shall
forthwith repay to the Vendor the net amount so received or
recovered up to the amount which had been paid by the Vendor in
respect of such claim and the amount so repaid shall be deemed
never to have been paid by the Vendor for the purposes of
determining the liability of the Vendor pursuant to clauses 9.9 and
9.10.
9.14
9.14.1 Subject to 9.14.2, the Purchaser shall and shall procure that the
Company and/or the Subsidiary shall:
(A) within ten business days notify the Vendor in writing if the
Purchaser or the Company or the Subsidiary becomes aware of
any matter which is reasonably likely to, and of the fact that
the matter is reasonably likely to, give rise to a relevant
claim (a "Matter") (provided that no failure of the Purchaser
to give notice to the Vendor in accordance with this clause
shall release the Vendor from liability under a relevant claim
except to the extent that the Vendor
21
suffers a liability or increased liability under a relevant claim
by reason of such failure to give notice);
(B) at all times disclose in writing to the Vendor all information
and documents relating to the Matter;
(C) take such action as the Vendor may reasonably require to avoid,
resist, contest or compromise the Matter; and
(D) without the prior written consent of the Vendor, not settle, make
any admission of liability, compromise nor, provide information
to, or correspond with, the other party to, any Matter;
Provided that:
(E) the Vendor shall indemnify the Purchaser and keep the Purchaser
indemnified in respect of any action or proceedings to be taken
pursuant to this clause 9.14;
(F) the Vendor shall keep the Purchaser informed of (and shall
promptly answer the Purchaser's inquiries in relation to) any
proceedings conducted by the Vendor pursuant to paragraph (C);
(G) The Vendor shall, prior to the commencement of any such action or
proceedings and from time to time thereafter as may reasonably be
requested by the Purchaser, demonstrate to the reasonable
satisfaction of the Purchaser that it is able to satisfy and
discharge its obligation in respect of such indemnity and the
matter giving rise to the relevant action or proceedings; and
(H) the failure by the Purchaser to act under this clause 9.14 shall
not limit or affect the Purchaser's rights and remedies in
respect of the matter save to the extent any such failure results
in, or increases, the liability of the Vendor in respect of such
matter.
9.14.2 Sub-clause 9.14.1 shall not apply in relation to any Matter in
respect of a relevant claim under the Tax Warranties, in which case
clause 10 of the Tax Deed shall apply.
9.15 The provision of this clause apply notwithstanding any other provision of
this Agreement or its Schedules to the contrary and shall not be discharged
or cease to have effect in consequence of any provision of this Agreement.
22
9.16 The Purchaser hereby acknowledges that without prejudice to any liability
for fraudulent misrepresentation, it does not enter into this Agreement in
reliance on any warranties, representations, covenants or undertakings
howsoever or to whosoever made, except in so far as such are embodied in
the Warranties, representations, covenants and undertakings on the part of
the Vendor contained in this Agreement.
9.17 The Vendor expressly disclaims all liability and responsibility for any
opinion, projection or forecast contained within the Information Memorandum
or within any written information provided to the Purchaser and its
advisers.
9.18 If a relevant claim for which the Vendor is liable relates to a liability
for taxation or if the Vendor has any liability under the Tax Deed the
Vendor may, so far as it is possible under law and within any applicable
time limit at its option and wholly or partly instead of making a payment
in respect of such claim or liability under the Tax Deed surrender or
procure the surrender (without payment) to the Company or Subsidiary of
group relief (as defined in section 402 of the Taxes Act) or advance
corporation tax or a tax refund relating to an accounting period (as
defined in Section 102 of the Finance Act 1989) in order to eliminate or
reduce such liability for taxation which has given rise to the relevant
claim or liability under the Tax Deed. The Purchaser shall procure that the
Company or the Subsidiary shall take as soon as reasonably practicable (and
in any event within any applicable statutory time limit) all such steps as
may be required by the Vendor to facilitate or permit the surrender of
group relief or advance corporation tax or a tax refund mentioned above.
9.19 If any relevant claim arises by reason of a liability of the Group which is
contingent when it is notified to the Vendor, the Vendor will not be
obliged to make any payment to the Purchaser until such time as the
contingent liability ceases to be contingent and becomes an actual
liability. Provided always that is such contingent claim is notified to
the Vendor in accordance with the provisions at this clause 9, the time
limits in clause 9.7 and 9.8, shall only apply from the date the said
liability ceases to be contingent.
9.20 The Purchaser agrees that is shall have no right to rescind or otherwise
terminate this Agreement (whether for misrepresentation or otherwise) after
the date hereof, save:
(A) in the case of fraudulent misrepresentation by the Vendor;
(B) as provided in clause 8.3; or
(C) in the event of a breach of Warranty 17.8 (Key Employees),
23
in which case the Purchaser shall be entitled by written notice
to the Vendor prior to Completion to terminate this Agreement.
9.21 The Vendor undertakes to the Purchaser (for itself and as agent and trustee
for the Company) to indemnify and shall keep the Purchaser and the Company
indemnified, against any Losses the Purchaser or the Company shall suffer
or incur resulting directly or indirectly from the arrangements for the
transfer of the property division of CIN Management to the company (the
"hivedown") or any steps undertaken by the parties pursuant thereto being
challenged following the administration or winding-up of CIN Management or
for any other reason whatsoever provided that (i) the Purchaser shall
notify the Vendor of any such claims relating to the hivedown within seven
years from Restructuring Date and no claim may be made in relation to the
indemnity thereafter and (ii) the provisions of clause 9.14.1 shall apply,
mutatis mutandis, to any claims made against the Company in relation to the
hivedown.
9.22 Where any facts or circumstances could give rise to a relevant claim and to
a claim under the Tax Deed, the Vendor shall not be liable in respect of
both those claims, and accordingly the relevant claim shall not be pursued
to the extent that recovery is made under the Tax Deed and vice versa.
9.23 Any payment made under clause 9.21, clause 5.4, clause 11.7 or clause 9.2.4
shall be made free and clear of all taxation whatsoever save only for any
deductions or withholdings required by law. If any deductions or
withholdings are required by law to be made in respect of any such payment
or if any such payment is (or, but for the set off of any available tax
relief, would be) subject to any taxation in the hands of the payee the
payer shall be liable to pay to the payee such further sums as shall ensure
that the aggregate of the sums paid or payable under this clause 9.23 and
the payment in question shall, after deducting therefrom all deductions or
withholdings from, or taxation liabilities (including taxation liability
which would have arisen but for the set off of any available tax relief) in
respect of such aggregate amount, leave the payee with the same amount as
it would have been entitled to receive under clause 9.21, clause 5.4,
clause 11.7, or clause 9.24 (as the case may be) in the absence of any such
deductions, withholdings or taxation liabilities.
9.24
9.24.1 The Vendor undertakes to the Purchaser (as agent and trustee for
the Company and the Subsidiary) that the Vendor shall indemnify and
keep the Company and the Subsidiary indemnified against:
24
(A) all Losses arising out of any breach by the Company or the
Subsidiary of any intellectual property rights belonging to
any other person;
(B) all Losses arising out of the use by the Company or the
Subsidiary of any computer hardware, IT equipment or computer
networks and facilities that only CIN Management was entitled
to use;
(C) the costs of all licenses and other sums payable by the
Company or the Subsidiary in order to obtain the same rights
and benefits and connection with the running of the Business
as they would have enjoyed had all the licenses, contracts and
arrangements relating to computer hardware, software, IT
equipment and computer networks and facilities entered into by
CIN Management had been validly assigned to the Company or the
Subsidiary (as the case may be) on the Restructuring Date.
9.24.2 The indemnity in clause 9.24.1 (the "IT Indemnity") shall be
subject to the following:
(A) no claim under sub-paragraph (A) and (B) of the IT Indemnity
shall be made unless written notice containing reasonable
details of the claim is served on the Vendor within 18 months
from the Completion Date;
(B) no claim under sub-paragraph (C) of the IT Indemnity shall be
made unless written notice containing reasonable details of
the claim is served on the Vendor within 9 months from the
Completion Date;
(C) no liability shall attach to the Vendor in respect of claims
under the IT Indemnity unless the aggregate amount of the
liability of the Vendor in respect of all such claims exceed
(Pounds)5,000 (in which event the Vendor's liability shall,
subject as herein provided, be for the total amount of such
claims and not merely the excess);
(D) the Purchaser shall procure that the Company and the
Subsidiary use all reasonable endeavours to avoid or mitigate
any costs the subject matter of sub-paragraph (C) of the IT
Indemnity;
(E) the provisions of clause 9.24.1 shall apply, mutatis mutandis
to any claim against the Company or the Subsidiary which is
reasonably likely to give rise to a claim under sub-paragraphs
(A) and (B) of the IT Indemnity;
25
(F) the Vendor shall not be liable, in respect of a claim under
the IT Indemnity in the circumstances provided in clause
9.11.4(A);
(G) the Purchaser acknowledges that the IT Indemnity does not
extend to sums payable to Mentor as the Company seeks to use
the Mentor system for managing the portfolios of clients other
than the Trustees or to any payments to Gandalf as a result of
the change of control clause in the Gandalf Maintenance
Contract.
10. PURCHASER'S WARRANTIES AND UNDERTAKINGS
10.1 The Purchaser warrants to the Vendor that:
10.1.1 the Purchaser has full power and authority to enter into and
perform this Agreement and all agreements in the agreed terms to
which it is a party and the provisions of this Agreement and those
documents, when executed, will constitute valid and binding
obligations on the Purchaser;
10.1.2 the execution and delivery of, and the performance by the Purchaser
of its obligations under, this Agreement and all agreements in the
agreed terms to which it is a party will neither:
(A) result in a breach of any provision of its Memorandum or
Articles of Association; nor
(B) result in a breach of any order, judgement or decree of any
court or governmental agency to which the Purchaser is a party
or by which the Purchaser is bound;
10.1.3 save, as provided in clause 4, all consents, permissions, approvals
and agreements of third parties which are necessary for the
Purchaser to obtain in order to enter into and perform this
Agreement have been unconditionally obtained in writing and have
been disclosed in writing to the Vendor; and
10.1.4 neither it nor any of its employees, agents or advisers is aware of
any fact or matter which would or may constitute a breach of any of
the above.
10.2 The Purchaser undertakes to the Vendor that it shall, preserve for a period
of at least six years from Completion all books, records and documents of
or relating to the Company and of the Subsidiary existing and held by them
at Completion. The Purchaser shall permit and allow access to such books,
records and documents and the right to inspect the same and make copies
thereof to the employees, agents and professional advisers of the Vendor
upon reasonable notice (and in any event within
26
7 days of written notice being given), during normal business hours, and
subject to the prior agreement of recipients to keep disclosed information
confidential (unless otherwise required by law). Such right of access,
inspection and copying by the Vendor, its employees, agents and advisers of
the Company's books, records and documents shall be subject to:
(A) the Purchaser's prior consent (not to be unreasonably
withheld);
(B) the Vendor providing to the Purchase a satisfactory
explanation of its requirements to inspect such documents; and
(C) any obligation of confidentiality owed by the Company or the
Subsidiary to any third party;
and all such documents which are relevant to the inquiry of the
Vendor shall be made available to it by the Purchaser.
10.3
10.3.1 For the purposes of this sub-clause 10.3.1 "interested" shall bear
the same meaning as in Part VI of the Companies Act.
10.3.2 The Purchaser is acting as principal and not as agent or broker for
any other person and immediately following its purchase of the
Shares hereunder, no person other than the Purchaser or its nominee
will be interested in the Shares.
10.4 All written information supplied by the Purchaser to the Vendor or to HSBC
Investment Bank plc in connection with (a) the Purchaser's presentation to
the evaluation group, (b) the Purchaser's indicative offer and accompanying
written submissions and (c) the Purchaser's submissions pursuant to, and as
required by, the Information Memorandum were when given, and (save as may
have been otherwise disclosed to the Vendor or to HSBC Investment Bank
prior to the date hereof) remains true and accurate in all material
respects.
11. PENSION SCHEMES
11.1 The Purchaser acknowledges the statutory duties of the Company and the
Subsidiary to their respective employees who are contributory members of
the Disclosed Schemes at Completion (hereinafter referred to in this clause
as "Transferring Members") contained in Schedule 5 to the Coal Industry Act
1994 and undertakes to the Vendor that it shall procure that each of the
Company and the Subsidiary complies fully with such duties which, inter
alia, shall include offering to
27
Transferring Members membership of the Industry-Wide Coal Staff
Superannuation Scheme or the Industry-Wide Mineworkers' Pension Scheme as
the case may be (each hereinafter referred to in this clause as the "IWS")
with effect from Completion.
11.2 The Purchaser shall procure that those Transferring Members who accept the
offer of membership of an IWS shall be in contracted-out employment (as
defined in section 8 of the Pension Schemes Act 1993) in relation to the
IWS.
11.3 The Purchaser shall procure that each of the Company and the Subsidiary
shall do all things necessary in order to become an Employer (for the
purposes of The Industry-Wide Coal Staff Superannuation Scheme Regulations
1994 No. 2973 and The Industry-Wide Mineworkers' Scheme Regulations 1994
No. 2974 as appropriate) (hereinafter referred to in this clause as the
"IWS Regulations") as appropriate.
11.4 The Purchaser shall procure that each of the Company and the Subsidiary
fulfills all the obligations of an Employer in accordance with the
provisions of the applicable IWS Regulations and does not do or omit to do
anything whereby the position of either IWS as an exempt approved scheme
under Chapter XIV of the Taxes Act would or might be prejudiced.
11.5 The Purchaser shall procure that each of the Company and the Subsidiary
complies with all the requirements of The Coal Industry (Protected Persons)
Pensions Regulations 1994 No. 3070 (hereinafter referred to in this clause
as the "Protection Regulations") applicable to it as an employer or former
employer of protected persons within the meaning of the Protection
Regulations.
11.6 The Purchaser shall procure that each of the Company and the Subsidiary
shall as soon as practicable after Completion apply to become a member of
Coal Staff Superannuation Scheme Co-ordinator Limited or, as the case may
be, Mineworkers' Pension Scheme Co-ordinator respectively (each hereinafter
referred to in this clause as a "Co-ordinator Company") in accordance with
the Memorandum and Articles of Association of the relevant Co-ordinator
Company.
11.7 The Purchaser hereby agrees fully and effectively to indemnify and keep
indemnified the Vendor at all times from and against all losses,
liabilities, charges, costs, expenses, actions, proceedings and demands
incurred as a result of any claim or action brought by any Transferring
Members in relation to any breach by the Company or the Subsidiary of the
duties contained in Schedule 5 to the Coal Industry Xxx 0000.
28
12. TAX ADMINISTRATION AND GROUP RELIEF
12.1 The Vendor or its duly authorized agent shall (at its own expense) prepare
and cause to be submitted to the appropriate tax authority, all tax returns
of the Company and the Subsidiary for all accounting periods ended on or
before the Accounts Date to the extent that the same have not been prepared
before Completion. The Vendor or its duly authorized agent shall be
responsible for all correspondence and for reaching agreement with the
appropriate authority in relation to all tax returns of the Company and the
Subsidiary for all accounting periods ending on or before the Accounts Date
Provided always that the Vendor shall give the Purchaser or its advisers 30
days to review and comment on such returns prior to their submission and
shall take into account all reasonable representations made by Purchaser
thereon;
12.2 The Purchaser or its duly authorised agent shall (at its own expense)
prepare and cause to be submitted to the appropriate tax authority tax
returns of the Company and the Subsidiary for the accounting period of the
Company and the Subsidiary in which Completion occurs provided always that
the Purchaser shall procure that the Company and the Subsidiary shall give
the Vendor or its advisers 30 days to review and comment on such returns
prior to their submission, shall take into account all reasonable
representations made by the Vendor thereon;
12.3 The purchaser or its duly authorized agent shall be responsible for all
discussions and correspondence with the relevant tax authority in respect
of any matter relating to the tax returns referred to in sub-clause 12.2
above provided always that no such discussions shall take place nor
correspondence be submitted relating to any matters which give rise to or
could give rise to a liability in respect of which the Purchaser would be
entitled to make a claim against the Vendor under the Tax Deed or the Tax
Warranties (other than of a routine and immaterial nature) other than in
terms agreed in advance by the Vendor, such agreement not to be
unreasonably withheld or delayed;
12.4 The Purchaser shall procure that the Company and the Subsidiary (as
appropriate) shall as soon as reasonably practicable (following a written
request from the Vendor) and in any event within the relevant time limits
(provided the Vendor's request is received by the Purchaser five business
days before the expiry of such time limits) make such claims, surrenders
and elections and give such consents as are taken into account in the
returns mentioned in sub-clause 12.1;
12.5 The Purchaser shall procure that the Company and the Subsidiary provide to
the Vendor or its duly authorized agent and the Vendor shall provide to the
Purchaser or its duly authorized agent during all reasonable hours, subject
to two business days prior notice, such access to and copies of such books,
accounts and records as are
29
necessary and reasonable to enable the parties to perform their rights and
obligations under this clause 12;
12.6 The provisions of this clause 12.6 shall apply notwithstanding any other
provisions of this clause 12.
12.6.1 The Purchaser agrees that the Vendor or its duly authorised agent
shall deal with each and every matter (in so far as possible in the
name of the Vendor acting on behalf of the Company) relating to any
potential Section 179 Liability, including, but not limited to, any
correspondence relating thereto and any questions of valuation in
relation to the assets deemed to be disposed of (a "Section 179
Matter").
12.6.2 The Purchaser further agrees that it shall not and shall procure
that the Company shall not enter into any discussions or
correspondence with the Inland Revenue in relation to any Section
179 Matter without the prior written consent of the Vendor and that
the Purchaser shall do nothing and shall procure that the Company
does nothing which might prejudice the Vendor's position in
relation to any Section 179 Matter.
12.6.3 Without prejudice to the generality of sub-clause 12.6.2, the
Purchaser further agrees that, in relation to any tax returns
referred to in clause 12.2 or any correspondence referred to in
clause 12.3, if such tax return or correspondence is to be
submitted prior to the agreement between the Vendor and the Inland
Revenue in relation to the Section 179 Liability (if any), such tax
return or correspondence shall not be in any way inconsistent with
the Vendor's position in relation to any Section 179 Matter (as
notified by the Vendor to the Purchaser) and, if such tax return or
correspondence is to be submitted following such agreement, such
tax return or correspondence is to be submitted following such
agreement, such tax return or correspondence shall reflect such
agreement in so far as such tax return or correspondence relates to
any Section 179 Matter.
12.6.4 The Vendor agrees that it shall give the Purchaser advance notice
(of at least two complete business days) of any discussions or
correspondence (other than of an immaterial nature) relating to any
Section 179 Matter and that it shall make full and accurate
disclosure to the Inland Revenue of all facts relating to any
potential Section 179 Liability and that it shall keep the
Purchaser fully informed of all matters and progress in respect of
agreeing with the Inland Revenue the potential Section 179
Liability (including providing copies of all correspondence and any
other documents or papers insofar as they relate thereto).
30
12.6.5 Further, the Vendor agrees that nothing in this clause 12.6 shall
require the Purchaser or the Company to do anything which could
constitute an unlawful or fraudulent act or a misrepresentation.
12.7 VAT
12.7.1 The Vendor shall as soon as is practicable apply to HM Customs and
Excise for the exclusion of the Company from any VAT group of the
Company and the Subsidiary are members prior to Completion for the
purposes of section 43 of the Value Added Tax Act of 1994 (the "VAT
Group").
12.7.2 The Purchaser shall give all such reasonable assistance and co-
operation as shall be necessary for the purpose of supporting the
Vendor's application referred to in clause 12.7.1 above.
12.7.3 To the extent that the Relevant Output Tax exceeds the Relevant
Input Tax the Purchaser shall procure that the Company and/or the
Subsidiary shall pay the difference to the Representative Member to
the extent that such amount has not already been paid to the
Representative Member by the Company or the Subsidiary. Any amount
payable under this sub-clause 12.7.3 shall be paid two business
days before the date on which the Representative Member is first
liable to account to HM Customs and Excise for such amount.
12.7.4 To the extent that the Relevant Input Tax exceeds the Relevant
Output Tax, the Vendor shall procure that the Representative Member
shall pay the difference to the Company and/or the Subsidiary (as
the case may be) to the extent that such amount has not already
been paid by the Representative Member obtaining credit for and/or
receiving a payment of such amount.
12.7.5 For the purposes of this sub-clause 12.7 "Relevant Output Tax"
means output tax in respect of supplies, acquisitions or
importations made by the Company or the Subsidiary (regardless of
whether they are treated as made, for VAT purposes, by the
Representative Member under a s.43 of the Value Added Tax Act 1994)
for which account is to be made to HM Customs and Excise by the
Representative Member or any member of the VAT Group (other than
the Company or the Subsidiary) for any prescribed accounting period
of the VAT Group comprising any period of time before the exclusion
of the Company and the Subsidiary from the VAT Group.
12.7.6 For the purposes of this sub-clause 12.7 "Relevant Input Tax" means
that input tax incurred for the prescribed accounting period in
question in respect
31
of which the Representative Member is allowed a credit or deduction
by virtue of supplies made to and acquisitions or importations made
by the Company or the Subsidiary (regardless of whether they are
treated, for VAT purposes, as made by the Representative Member
under s.43 of Value Added Tax Act 1994).
13. ANNOUNCEMENTS
Neither party shall release any announcement, or despatch any circular,
relating to this Agreement unless and until the form and content of such
announcement or circular have been submitted to, and agreed by, the other
party hereto provided that nothing in this clause shall prohibit either
party from making any announcement or despatching any circular as required
by law or the rules of any regulatory body of which it is a member in which
case, the announcement shall only be released or the circular dispatched
after consultation with the other party and after taking into account the
reasonable requirements of the other party as to the content of such
announcement or circular.
14. MISCELLANEOUS
14.1 This Agreement shall be binding and enure for the benefit of the successors
and permitted assigns of the parties.
14.2 The benefit of this Agreement may be assigned by either party to any
company of which it is a subsidiary undertaking or to any other company
which is its subsidiary undertaking or a subsidiary undertaking of its
parent undertaking (but not otherwise) but so that the assignor shall
remain liable for its obligations hereunder and provided further that if
any such assignee ceases to be the parent undertaking of subsidiary
undertaking of such parent undertaking of the Purchase or the Vendor, as
the case may be, the Purchaser or the Vendor, as the case may be shall,
prior to such cessation, procure that such assignee shall transfer back to
the Purchaser the benefit of this Agreement.
14.3 In relation to its subject-matter, this Agreement, together with the
documents in the agreed terms, any side letters given on the date hereof
and any notification under clause 6 represents the entire understanding and
constitutes the whole agreement, between the parties and, save as provided
in this Agreement, no party has relied on any representation made by any
other party who is not a party to this Agreement.
14.4 So far as it remains to be performed this Agreement shall continue in full
force and effect notwithstanding Completion.
32
14.5 To the extent that any provision of this Agreement, or of any other
arrangement of which it forms part, is a restriction or information
provision for the purposes of the restrictive Trade Practices Xxx 0000
("RTPA") by virtue of which this Agreement or any such arrangement is
registrable under the RTPA, no such restriction or provision shall take
effect until the day after particulars of this Agreement or, as the case
may be, that arrangement, have been furnished to the Director General of
Fair Trading in accordance with the RTPA.
15. COSTS
The parties shall pay their own costs in connection with the preparation
and negotiation of this Agreement and the documents in the agreed terms.
16. NOTICES
16.1 A notice, approval, consent or other communication in connection with this
Agreement:
16.1.1 must be writing;
16.1.2 in the case of the Vendor as addressee, must be marked for the
attention of The Company Secretary;
16.1.3 in the case of the Purchaser as addressee, must be marked for the
attention of The Company Secretary, copied to Xx. Xxxxx Xxxxxx and
to Xx. Xxx Xxxxxx at LaSalle Advisors Limited; and
16.1.4 must be left at the address of the addressee, or sent by prepaid
ordinary post (airmail if posted to or from a place outside the
United Kingdom) to the address of the addressee or sent by
facsimile to the facsimile number of the addressee which is
specified in this clause or if the addressee notifies another
address or facsimile number in England and Wales then to that
address or facsimile number.
The address and facsimile number of each party and La Salle
Advisors Limited is:
Vendor British Coal Corporation - Attn: The Corporation
Secretary
Address: Xxxxxxx House, 0-00 Xxxxx Xxxxxx Xxxxxx, Xx. Xxxxx'x,
Xxxxxx, XX0X 0XX
Facsimile: 0171 766 4010
33
Purchaser La Salle Partners International
Address: 5th floor, 00 Xxxxxxxxx Xxxxxx, Xxxxxx X0X 0XX
Facsimile: 0171 734 1155
La Salle Advisors Limited
Address: 000 Xxxx Xxxxxxxx Xxxxx, Xxxxxxx, Xxxxxxxx 00000, XXX
Facsimile: (000) 000-0000
16.2 A notice, approval, consent or other communication shall take effect from
the time it is received (or, if earlier, the time it is deemed to be
received in accordance with sub-clause 16.3) unless a later time is
specified in it.
16.3 A letter or facsimile is deemed to be received:
16.3.1 in the case of a posted letter, unless actually received earlier on
the third (seventh, if posted to or from a place outside the United
Kingdom) day after posting;
16.3.2 in the case of facsimile, on production of a transmission report
from the machine from which the facsimile was sent which indicates
that the facsimile was sent in its entirety to the facsimile number
of the recipient.
17. GOVERNING LAW, JURISDICTION AND SERVICE OF PROCESS
17.1 This Agreement shall be governed by, and construed in accordance with,
English law.
17.2 Each party irrevocably agrees for the benefit of the other party that the
Courts of England shall have exclusive jurisdiction in relation to any
claim, dispute or difference concerning this Agreement and any matter
arising therefrom.
17.3 Each party irrevocably waives any right that it may have to object to an
action being brought in those Courts, to claim that the action has been
brought in an inconvenient forum, or to claim that those Courts do not have
jurisdiction.
34
17.4 Each party agrees that without preventing any other mode of service, any
document in an action (including, but not limited to, any writ of summons
or other originating process or any third or other party notice) may be
served on any party by being delivered to or left for that party at its
address for service on any party by being delivered to or left for that
party at its address for service of notices under clause 16 and each party
undertakes to maintain such an address at all times in the United Kingdom
and to notify the other party in advance of any change from time to time of
the details of such address in accordance with the manner prescribed for
service of notices under clause 16.
IN WITNESS of which the parties have executed this Agreement on the date first
mentioned above.
35
