CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTIONS OF THIS DOCUMENT HAVE BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE COMMISSION.
CONFIDENTIAL
TREATMENT REQUESTED. CONFIDENTIAL PORTIONS OF THIS DOCUMENT HAVE BEEN REDACTED
AND HAVE BEEN SEPARATELY FILED WITH THE COMMISSION.
THIS
AGREEMENT
is made
on 27 September 2006
BETWEEN:
|
(1)
|
THE
PERSONS
whose names and addresses are set out in column (A) of schedule
1
(each a Seller
and together the Sellers);
and
|
|
(2)
|
INYX
PHARMA LIMITED
(registered number 4573515) whose registered office is at Innovation
House, 6 Seymour Court, Manor Park, Runcorn, Cheshire WA7 1SY (the
Purchaser).
|
BACKGROUND:
|
(A)
|
The
Sellers are together beneficially entitled to all the issued share
capital
of Pharmapac (UK) Limited (the Company).
|
|
(B)
|
The
Sellers wish to sell and the Purchaser wishes to purchase all the
issued
share capital of the Company free from any Encumbrance on the terms
and
subject to the conditions set out in this
agreement.
|
IT
IS AGREED
as
follows:
|
1.
|
INTERPRETATION
|
|
1.1
|
In
addition to terms defined elsewhere in this agreement, the definitions
and
other provisions in schedule
11
apply throughout this agreement, unless the contrary intention
appears.
|
|
1.2
|
In
this agreement, unless the contrary intention appears, a reference
to a
clause, subclause or schedule is a reference to a clause, subclause
or
schedule of or to this agreement. The schedules form part of this
agreement.
|
|
1.3
|
The
headings in this agreement do not affect its
interpretation.
|
|
2.
|
SALE
AND PURCHASE
|
|
2.1
|
Subject
to the Conditions being satisfied or, where applicable, waived, each
of
the Sellers shall sell and the Purchaser shall purchase the Shares
set
opposite such Seller's name in column B of schedule
1.
|
|
2.2
|
The
Shares shall be sold free from all Encumbrance and together with
all
rights attaching to them.
|
|
2.3
|
The
consideration for the sale of the Shares shall be determined in accordance
with clauses 5,and
7.
|
|
2.4
|
The
Sellers acknowledge that the Purchaser enters into this agreement
in
reliance on the representations, warranties and undertakings on the
part
of the Sellers set out in this
agreement.
|
|
2.5
|
Each
Seller:
|
|
(a)
|
covenants
with the Purchaser that he has the right to sell and transfer to
the
Purchaser the full legal and beneficial interest in the Shares set
opposite such Seller's name in column B of schedule
1
on
the terms set out in this agreement;
and
|
|
(b)
|
waives
(and shall procure the waiver by his nominee(s) of) all rights of
pre-emption which he (or such nominee(s)) may have (whether under
the
Company's constitutional documents or otherwise) in respect of the
transfer to the Purchaser or its nominee(s) of the Shares or any
of
them.
|
|
3.
|
CONDITIONS
PRECEDENT
|
|
3.1
|
The
sale and purchase of the Shares is conditional
on:
|
|
(a)
|
the
Company having, or retaining, all Licences (including all Licences
issued
pursuant to the Medicines for Human Use (Marketing Authorisation
etc.)
Regulations 1994 (the MHRA),
the Home Office and the Food and Drug Administration) required for
and
material to the carrying on the Business in the places and in the
manner
in which the Business is now carried on and as it will be carried
on after
Completion in order for the Company to fulfil its obligations under
its
current contractual commitments (and under those contractual commitments
which are entered into on or before Completion), and all such Licences
being in full force and effect and not being subject to revocation
or
suspension (in whole or in part) or to notice thereof nor being subject
to
any terms, conditions, qualifications or restrictions save as have
been
specifically disclosed in writing to the Purchaser before the date
of this
agreement;
|
|
(b)
|
the
Charges having been unconditionally
released;
|
|
(c)
|
the
Purchaser giving notice in writing to the Sellers Solicitors that
it is
satisfied on inspection and investigation as
to:
|
|
(i)
|
the
financial, contractual and taxation position and trading performance
of
the Company;
|
|
(ii)
|
the
title of the Company to its respective assets (including the Properties);
and
|
|
(iii)
|
the
results of its searches and the replies to its enquiries regarding
the
Properties;
|
|
(d)
|
the
Purchaser giving notice to the Sellers that it is satisfied with
the
results of the investigations and the replies to the enquiries regarding
environmental matters relating to the Company and the Properties
carried
out by or on behalf of the Purchaser to its
specification;
|
|
(e)
|
there
being no material interruption to the Business and no material damage
to
the assets or Properties of the Company which is an interruption
or damage
which is not fully covered by a policy of insurance having occurred
before
the time when Completion would otherwise take place in accordance
with
clause 4.1; and
|
|
(f)
|
the
Company, as a data controller, obtaining a registration from the
Information Commissioner pursuant to its obligations under the Data
Protection Xxx 0000,
|
but
the
Purchaser may waive all or any of the Conditions above (either in whole or
in
part) at any time by giving notice to the Sellers.
|
3.2
|
Each
party shall use all reasonable endeavours to procure (so far as it
is so
able to procure) that each of the Conditions is satisfied on or before
14
November 2006 (the Long
Stop Date).
If all the Conditions are not satisfied, or waived in accordance
with the
preceding subclause, on or before the Long Stop
Date:
|
|
(a)
|
except
for this subclause, clauses 1,
12,
13,
15,
16,
17.3,
17.4,
17.5,
17.6,
17.7,
17.8,
17.9,
18,
19
and 20
and the provisions of schedule
11,
all the provisions of this agreement shall lapse and cease to have
effect;
but
|
|
(b)
|
neither
the lapsing of those provisions nor their ceasing to have effect
shall
affect any accrued rights or liabilities of any party in respect
of
damages for non-performance of any obligation under this agreement
falling
due for performance prior to such lapse and cessation, subject to
subclauses 3.3 and 3.4 below.
|
| 3.3 |
Should
the Purchaser breach its obligations under this clause or clause
4 of this
agreement, as a consequence of which the Sellers validly elect not
to
complete, then (notwithstanding any other provision of this agreement
or
any other rights which the Sellers may have) the Purchaser shall
pay the
Sellers £250,000.00 (in total) as a full and final settlement of all
Losses arising out of or relating to the breach, and/or to the
non-completion of this agreement, on the 14 November 2006 by way
of an
indemnity against all costs, charges and expenses incurred by the
Sellers
in connection with the negotiation, preparation and entering into
of the
Transaction Documents and in discharging its obligations under any
of
them.
|
|
3.4
|
Should
the Sellers breach their obligations under this clause, clause 4,
clause 9
or schedule 6 of this agreement, as a consequence of which the Purchaser
validly elects not to complete, then (notwithstanding any other provision
of this agreement or any other rights which the Purchasers may have)
the
Sellers shall pay the Purchaser £250,000.00 (in total) as a full and final
settlement of all Losses arising out of or relating to the breach
on the
14 November 2006 by way of an indemnity against all costs, charges
and
expenses incurred by the Purchaser in connection with the negotiation,
preparation and entering into of the Transaction Documents and in
discharging its obligations under any of them. Also, if the Purchaser
elects not to complete as a result of such a breach, notwithstanding
the
terms of the Stock Options, the Stock Options will be revoked and
the
Sellers shall, and shall procure that Xxx Xxxxxxxx shall, waive all
entitlements under them.
|
|
4.
|
COMPLETION
|
|
4.1
|
Completion
shall take place at the offices of the Purchaser's Solicitors at
noon on
31 October, 2006, unless all of the conditions set out in clause
3 of this
agreement are not either waived or satisfied before then, in which
case
Completion will take place on 14 November 2006 (or at such other
place, at
such other time and/or on such other date as the Sellers and the
Purchaser
may agree).
|
|
4.2
|
Until
Completion the provisions of schedule
6
shall apply.
|
|
4.3
|
At
Completion:
|
|
(a)
|
the
Sellers shall observe and perform the provisions of Part
1
of
schedule
7;
and
|
|
(b)
|
the
Purchaser shall observe and perform the provisions of Part
2
of
schedule
7.
|
|
4.4
|
If
for any reason the provisions of Part
1
of
schedule
7
are not fully observed and performed as contemplated by clauses
4.1
and 4.3,
the Purchaser may elect (in addition and without prejudice to all
other
rights or remedies available to it) not to complete the purchase
of the
Shares or to fix a new time and date for Completion by, in either
case,
giving notice to the Sellers. In particular, the Purchaser shall
not be
obliged to complete the purchase of any of the Shares unless the
purchase
of all the Shares is completed simultaneously in accordance with
this
agreement. If for any reason the provisions of Part
2
of
schedule
7
are not fully observed and performed as contemplated by clauses
4.1
and 4.3,
the Sellers may elect (in addition and without prejudice to all other
rights and remedies available to them) not to complete the sale of
the
Shares or to fix a new time and date for Completion by, in either
case,
giving notice to the Purchaser. In particular, none of the Sellers
shall
be obliged to complete the sale of any of the Shares unless the sale
of
all the Shares is completed simultaneously in accordance with this
agreement.
|
|
4.5
|
If
the Sellers elect or the Purchaser elects (the party or parties making
such election being the Non-defaulting
Party
for the purposes of this subclause) not to complete the purchase
or sale
of the Shares under the preceding
subclause:
|
|
(a)
|
except
for this subclause, clauses 1,
12,
13,
15,
16,
17.3,
17.4,
17.5,
17.6,
17.7,
17.8,
17.9,
18,
19
and 20
and the provisions of schedule
11,
all the provisions of this agreement shall lapse and cease to have
effect;
|
|
(b)
|
neither
the lapsing of those provisions nor their ceasing to have effect
shall
affect any accrued rights or liabilities of any party in respect
of
damages for non-performance of any obligation falling due for performance
prior to such lapse and cessation.
|
|
5.
|
INITIAL
CONSIDERATION
|
|
5.1
|
The
initial consideration for the sale of the Shares shall (subject to
adjustment as provided in this agreement) be £9,000,000 (the Initial
Consideration).
|
|
5.2
|
Of
the Initial Consideration £8,500,000 is, under clause 4,
to be paid to the Sellers on Completion. Each Seller shall be entitled
to
that portion of the Initial Consideration set against his name in
column C
of schedule
1.
|
|
5.3
|
Payment
of the remaining Initial Consideration,, is conditional on there
being not
less than £500,000 cash (net of any unpresented cheques) in the Company's
bank account at Completion (as demonstrated by way of statements
from the
Company’s bank) and, at Completion, profits of the Company available for
distribution of not less than £500,000. If this condition is satisfied,
the remaining Initial Consideration (subject to adjustment as provided
in
this agreement) shall be paid within five Business Days following
Completion.
|
|
5.4
|
If,
as demonstrated by the Completion Balance Sheet, there was less than
£500,000 in distributable profits at Completion, the Sellers shall
pay the
Purchaser the amount by which the distributable profits as shown
therein
are less than £500,000 within 10 Business Days of the Completion Balance
Sheet being agreed or determined in accordance with schedule 8.
|
|
6.
|
ADJUSTMENT
TO INITIAL CONSIDERATION
|
|
6.1
|
If
the Net Assets, at Completion, are less than £1,665,000, the Initial
Consideration shall be reduced by the amount by which the Net Assets
are
less than that amount.
|
|
6.2
|
If
the amount of the Initial Consideration is reduced as a result of
such an
adjustment, each Seller shall make a payment to the Purchaser of
a sum
equal to the percentage set against his name in column D of schedule
1
of
that reduction.
|
|
6.3
|
Any
such payment shall be made within five Business Days following the
day on
which the Net Assets are ascertained as contemplated by schedule
8.
|
|
7.
|
EARN-OUT
CONSIDERATION
|
|
7.1
|
If
the Net Profits for the year ended 30 June, 2007 exceed £1,489,000, as
further consideration for the sale of the Shares, the Sellers shall
(subject to the terms of this agreement) each be entitled to an additional
amount of cash consideration equal to £100,000 (the Earn-Out
Consideration).
|
|
7.2
|
The
Net Profits shall be ascertained as contemplated by schedule
9.
|
|
7.3
|
The
Purchaser shall make a payment of the Earn-Out Consideration (if
any) to
those Sellers entitled thereto on or before the later of (i) 30 September
, 2007 and (ii) 5 Business Days after the date on which the Net Profits
are agreed or determined in accordance with schedule
9.
|
|
7.4
|
For
the protection of the Sellers the Purchaser agrees and covenants
to comply
with the terms set out in the schedule 9, Part 2, and in further
assurance
of the same the Purchaser will procure that the Company shall comply
with
the provisions of schedule 9, Part 2.
|
|
8.
|
LOANS
AND GUARANTEES
|
|
8.1
|
The
Sellers shall procure that on Completion all indebtedness owing
immediately before Completion from any Seller or any person connected
with
any Seller to the Company is or has been satisfied in full together
with
all interest accruing on it up to (but excluding) Completion. The
parties
acknowledge that the Consideration has been agreed on the basis that
no
indebtedness of any kind (whether or not then presently payable)
will be
owing immediately after Completion by any Seller or any person connected
with any Seller to the Company.
|
|
8.2
|
The
Sellers shall procure that on Completion all indebtedness owing
immediately before Completion by the Company to any Seller or any
person
connected with any Seller, and which is expressly referred to in
the
Disclosure Letter, is or has been satisfied in full together with
all
interest accruing on it up to Completion. If it is established at
any time
after Completion that any indebtedness of any kind (whether or not
then
presently payable) was owing on Completion by the Company to any
Seller or
any person connected with any Seller, contrary to the basis stated
in this
clause 8.2,
then the Sellers shall procure that the relevant Seller or person
connected with the Seller or the Company to which that indebtedness
is
owing shall waive that indebtedness by executing a deed of waiver
in such
form as the Purchaser shall reasonably require or, if that is not
permissible or practicable, shall procure that such indebtedness
is
discharged or otherwise eliminated at no cost to any member of the
Purchaser's Group or the Company.
|
|
8.3
|
The
Sellers shall procure that on Completion the Company is released
from all
guarantees and indemnities given by the Company other than a guarantee
or
indemnity in respect only of the liabilities or obligations of the
Company.
|
| 8.4 |
The
Purchaser guarantees as primary obligor and surety that, if payable
under
the conditions set out in the following individuals' service agreements,
the bonus payments of * * *, per year for both 2007 and 2008, payable
to
each of * * *, pursuant to the service agreement of each with the
Company,
shall be paid by the Purchaser if those individuals are so entitled
and so
demand in writing.
|
|
9.
|
WARRANTIES
|
|
9.1
|
The
Sellers represent and warrant to the Purchaser
that:
|
|
(a)
|
except
as fully and fairly disclosed to the Purchaser in the Disclosure
Letter,
each of the statements set out in schedule
4
(the Warranted
Statements)
is and will at Completion be true and accurate;
and
|
|
(b)
|
all
information contained or referred to in the Disclosure Letter is
true and
accurate.
|
|
9.2
|
Each
of the Warranted Statements is separate and independent and, except
as
expressly provided to the contrary in this agreement, is not
limited:
|
|
(a)
|
by
reference to any other Warranted Statement;
or
|
|
(b)
|
by
any other provision of this agreement or any provision of the Tax
Deed.
|
|
9.3
|
Except
in relation to matters fully and fairly disclosed in the Disclosure
Letter, none of the Warranties shall be treated as qualified by any
actual, imputed or constructive knowledge on the part of any member
of the
Purchaser's Group or any agent or adviser of any such member and
no such
knowledge shall prejudice any Warranty Claim or operate so as to
reduce
any amount recoverable.
|
|
9.4
|
Without
prejudice to any other remedy available to the Purchaser or its ability
to
claim damages on any other basis which is available to it by reason
of any
of the Warranted Statements being untrue or inaccurate, if any of
the
Warranted Statements is untrue, or inaccurate, and the value of the
Company or any of the assets of the Company is less than it would
otherwise have been at Completion as a result, the Sellers shall
pay to
the Purchaser on demand an amount equal to the resulting diminution
of
value and all Losses (including legal and other professional fees
and
costs) arising, incurred or suffered by the Company as a result of
such
Warranted Statement being untrue or
inaccurate.
|
|
9.5
|
The
Sellers shall promptly (and in any event before Completion) give
notice to
the Purchaser of any matter or circumstance arising after the date
of this
agreement and before Completion which results or would result or
would be
likely to result in any of the Warranted Statements being materially
(to
such extent that would constitute a Warranty Claim) untrue or inaccurate
at Completion (and shall promptly, and in any event before Completion,
give notice to the Purchaser of any matter or circumstance which
becomes
known to him after the date of this agreement and before Completion
which
results in any of the Warranted Statements being untrue or inaccurate
as
at the date of this agreement) and, if it does
so:
|
|
(a)
|
the
Sellers, if and to the extent so requested by the Purchaser, shall
use
their best endeavours to prevent or remedy the relevant matter or
circumstance before Completion so as to limit, to the fullest extent
practicable, its effect or likely effect on the Purchaser and the
Company;
|
|
(b)
|
the
Purchaser may elect not to complete the purchase of the Shares by
giving
notice to the Sellers; and
|
|
(c)
|
if
the Purchaser so elects:
|
|
(i)
|
except
for this subclause, clauses 1,
12,
13,
15,
16,
17.3,
17.4,
17.5,
17.6,
17.7,
17.8,
17.9,
18,
19
and 20
and the provisions of schedule
11,
all the provisions of this agreement shall lapse and cease to have
effect;
|
|
(ii)
|
neither
the lapsing of those provisions nor their ceasing to have effect
shall
affect any accrued rights or liabilities of any party in respect
of
damages for non-performance of any obligation under this agreement
falling
due for performance prior to such lapse and cessation;
and
|
|
9.6
|
If
the Purchaser becomes aware of a matter or circumstance which is
likely to
give rise to a Warranty Claim, the Purchaser shall give notice to
the
Sellers or the Sellers' Solicitors specifying that matter or circumstance
in reasonable detail, and setting out such other facts as the Purchaser
deems necessary, as soon as reasonably practicable after it becomes
aware
of that matter or circumstance. Any failure by the Purchaser to give
notice as contemplated by this subclause in relation to any matter
or
circumstance shall not, for the avoidance of doubt, prevent the Purchaser
from making any Warranty Claim arising from that matter or circumstance,
but the Sellers shall not be liable for any Losses in respect of
any such
Warranty Claim to the extent that such Losses are increased, or are
not
reduced, as a result of such
failure.
|
|
9.7
|
The
Warranties and any Warranty Claim shall be subject to the limitations
and
other provisions set out in schedule
5.
|
|
9.8
|
Nothing
in schedule
5
or
in the Disclosure Letter shall qualify or limit the liability of
the
Sellers in relation to:
|
|
(a)
|
any
of those Warranted Statements set out in paragraphs 1.4
(Ownership of the Shares), 1.13
(Insolvency) and 1.14
(Capacity and consequences of sale) of schedule
4;
or
|
|
(b)
|
any
Warranty Claim attributable to fraud, dishonesty or wilful concealment
on
the part of any of the Sellers or any agent or adviser of any
Seller.
|
|
9.9
|
Clause
9.8
applies notwithstanding clauses 9.1(a)
and 9.7.
|
|
10.
|
EMPLOYEES
|
|
10.1
|
On
Completion, the Sellers shall procure that each of the Executives
enters
into a service agreement with the Company in the Agreed Form as
contemplated by clause 4.3(a).
|
|
11.
|
PROTECTIVE
COVENANTS
|
|
11.1
|
Each
Seller covenants with the Purchaser and the Company that he shall
not:
|
|
(a)
|
for
a period of two years after Completion be concerned in any business
carrying on business in the United Kingdom which is competitive or
likely
to be competitive with any of the businesses carried on by the Company
at
Completion; or
|
|
(b)
|
for
a period of two years after Completion and except on behalf of the
Company
canvass or solicit orders for goods of a similar type to those being
manufactured or dealt in or for services similar to those being provided
by the Company at Completion from any person who is at Completion
or has
been at any time within the year prior to Completion a customer of
the
Company; or
|
|
(c)
|
for
a period of two years after
Completion:
|
|
(i)
|
induce
or attempt to induce any person who is at Completion a director or
employee of the Company to leave the employment of the Company;
or
|
|
(ii)
|
employ
or attempt to employ any person who is at Completion a director or
employee of the Company; or
|
|
(d)
|
for
a period of two years after Completion induce or attempt to induce
any
person, who is at Completion or has been at any time within the year
prior
to Completion a supplier of goods or services to the Company, to
cease to
supply, or to restrict or vary the terms of supply, to the Company;
or
|
|
(e)
|
make
use of or (except as required by law or any competent regulatory
body)
disclose or divulge to any third party any information of a secret
or
confidential nature relating to, or to the business or affairs of,
the
Company or to any of the employees, customers or suppliers of the
Company;
or
|
|
(f)
|
after
Completion use or (insofar as he can reasonably do so) allow to be
used
(except by the Company) any trade name used by the Company at Completion
or any other name intended or likely to be confused with such a trade
name.
|
|
11.2
|
For
the purposes of this clause:
|
|
(a)
|
a
person is concerned in a business if it carries on the business as
principal or agent or if:
|
|
(i)
|
it
is a partner, director, employee, secondee, consultant or agent in,
of or
to any person who carries on the business;
or
|
|
(ii)
|
it
has any direct or indirect financial interest (as shareholder or
otherwise) in any person who carries on the business;
or
|
|
(iii)
|
it
is a partner, director, employee, secondee, consultant or agent in,
of or
to any person who has a direct or indirect financial interest (as
shareholder or otherwise) in any person who carries on the
business,
|
disregarding
any financial interest of a person in securities which are listed or traded
on
any generally recognised market if that person, the other Sellers and any person
connected with that person or any Seller (the Investors)
are
together interested in securities which amount to less than 5% of the issued
securities of that class and which, in all circumstances, carry less than 5%
of
the voting rights (if any) attaching to the issued securities of that class,
and
provided that none of the Investors is involved in the management of the
business of the issuer of the relevant securities or of any person connected
with it otherwise than by the exercise of voting rights attaching to securities;
and
|
(b)
|
references
to the Company include its successors in
business.
|
|
11.3
|
Each
of the restrictions in each paragraph or subclause above shall be
enforceable independently of each of the others and its validity
shall not
be affected if any of the others is
invalid.
|
|
11.4
|
If
any of those restrictions is void but would be valid if some part
of the
restriction were deleted, the restriction in question shall apply
with
such modification as may be necessary to make it
valid.
|
|
11.5
|
The
Sellers acknowledge that the above provisions of this clause are
no more
extensive than is reasonable to protect the Purchaser as the purchaser
of
the Shares.
|
|
11.6
|
The
covenants in this clause may with the prior written consent of the
Purchaser be enforced by the Company against any of the Sellers under
the
Contracts (Rights of Third Parties) Xxx 0000. The provisions of this
clause may be varied or terminated by agreement between the Sellers
and
the Purchaser (and the Purchaser may also release or compromise in
whole
or in part any liability in respect of rights or claims contemplated
by
this clause) without the consent of the
Company.
|
|
12.
|
ANNOUNCEMENTS
|
|
12.1
|
The
Sellers shall not, and shall procure that no adviser or other person
connected with any of them shall make any announcement concerning
the sale
or purchase of the Shares or any related or ancillary matter before,
on or
after Completion. The Sellers shall also procure that neither the
Company
nor any adviser or other person connected with the Company shall
make any
announcement concerning the sale or purchase of the Shares or any
related
or ancillary matter on or before Completion. The Purchaser shall
procure
that no member of the Purchaser's Group for the time being, and no
adviser
or other person connected with any such member, shall make any
announcement, other than the Purchaser's Announcement, concerning
the sale
or purchase of the Shares or any related or ancillary matter before
Completion.
|
|
12.2
|
Nothing
in this clause prevents any announcement being
made:
|
|
(a)
|
by
way of a mutually agreed announcement or statement;
or
|
|
(b)
|
where
such announcement contains only information set out in the Purchaser's
Announcement; or
|
|
(c)
|
with
the written approval of the other party, which shall not be unreasonably
withheld or delayed; or
|
|
(d)
|
to
the extent required by law, any court of competent jurisdiction or
any
competent regulatory body, but if a person is so required to make
any
announcement, the relevant party shall promptly notify the other
party,
where practicable and lawful to do so, before the announcement is
made and
shall co-operate with the other party regarding the timing and content
of
such announcement or any action which the other party may reasonably
elect
to take to challenge the validity of such
requirement.
|
|
13.
|
NOTICES
|
|
13.1
|
Any
notice or other communication to be given under this agreement must
be in
writing (which includes fax, but not any other form of Electronic
Communication) and must be delivered or sent by post or fax to the
party
to whom it is to be given as
follows:
|
|
(a)
|
to
the Sellers at:
|
*
*
*
|
(b)
|
to
the Purchaser at:
|
Inyx
Pharma Limited
0
Xxxxxxx
Xxxxx
Xxxxx
Xxxx
Xxxxxxx
Xxxxxxxx
XX&
0XX
Fax:
00000 000 000
*
*
*
or
at any
such other address or fax number of which he/it shall have given notice for
this
purpose to the other party under this clause. Any notice or other communication
sent by post shall be sent by prepaid first class post (if within the United
Kingdom) or by prepaid airmail (if the country of destination is not the same
as
the country of origin).
|
13.2
|
Any
notice or other communication shall be deemed to have been
given:
|
|
(a)
|
if
delivered, on the date of delivery;
or
|
|
(b)
|
if
sent by post, on the second Business Day after it was put into the
post;
or
|
|
(c)
|
if
sent by fax, on the date of transmission, if transmitted before
3.00 p.m. (local time at the country of destination) on any Business
Day, and in any other case on the Business Day following the date
of
transmission.
|
|
13.3
|
In
proving the giving of a notice or other communication, it shall be
sufficient to prove that delivery was made or that the envelope containing
the communication was properly addressed and posted by prepaid first
class
post or by prepaid airmail or that the fax was properly addressed
and
transmitted, as the case may be.
|
|
13.4
|
This
clause shall not apply in relation to the service of any claim form,
notice, order, judgment or other document relating to or in connection
with any proceedings, suit or action arising out of or in connection
with
this agreement.
|
|
14.
|
FURTHER
ASSURANCES
|
|
14.1
|
On
or after Completion each Seller shall, at his own cost and expense,
execute and do (or procure to be executed and done by any other necessary
party) all such deeds, documents, acts and things as the Purchaser
may
from time to time require in order to vest any of the Shares in the
Purchaser or its assignee or as otherwise may be necessary to give
full
effect to the Transaction
Documents.
|
|
14.2
|
In
relation to the Company, the Sellers shall procure the convening
of all
meetings, the giving of all waivers and consents and the passing
of all
resolutions as are necessary under statute, the Company's constitutional
documents or any agreement or obligation affecting it to give effect
to
the Transaction Documents.
|
|
14.3
|
For
so long after Completion as any Seller or any nominee of his remains
the
registered holder of any Share, he shall hold (or direct the relevant
nominee to hold) that Share and any distributions, property and rights
deriving from it in trust for the Purchaser and shall deal with that
Share
and any distributions, property and rights deriving from it as the
Purchaser directs; in particular, each Seller shall exercise all
voting
rights as the Purchaser directs or shall execute an instrument of
proxy or
other document which enables the Purchaser or its representative
to attend
and vote at any meeting of the
Company.
|
*
* * Confidential Treatment
10
|
15.
|
ASSIGNMENTS
|
|
15.1
|
The
Purchaser may assign the benefit of this agreement and the Tax Deed
to any
other member of the Purchaser's Group for the time being or to any
lender
to or holder of debt securities issued by the Purchaser or any other
member of the Purchaser's Group for the time being or any agent of
such
lender or holder and if it does so:
|
|
(a)
|
the
assignee may enforce the obligations on the part of the Sellers under
this
agreement (including the Warranties) and under the Tax Deed as if
it had
been named in this agreement and the Tax Deed as the
Purchaser;
|
|
(b)
|
as
between the Sellers and the Purchaser, the Sellers may nevertheless
enforce this agreement and the Tax Deed against the Purchaser as
if the
assignment had not occurred; and
|
|
(c)
|
the
assignment shall not in any way operate so as to increase the liability
of
the Purchaser or the Sellers (or any of them) under this agreement
or the
Tax Deed.
|
|
15.2
|
Except
as permitted by this clause, none of the rights or obligations under
this
agreement or the Tax Deed may be assigned or transferred without
the prior
written consent of the Sellers and the Purchaser.
|
|
16.
|
PAYMENTS
|
|
16.1
|
Unless
otherwise expressly stated (or as otherwise agreed in the case of
a given
payment), each payment to be made under this agreement and the Tax
Deed
shall be made in pounds sterling by transfer of the relevant amount
into
the relevant account on or before the date the payment is due for
value on
that date. The relevant account for a given payment
is:
|
|
(a)
|
if
that payment is to the Sellers, the account of the Sellers' Solicitors
at:
|
bank: *
*
*
or
such
other account as the Sellers shall, not less than three Business Days before
the
date that payment is due, have specified by giving notice to the Purchaser
for
the purpose of that payment.
|
(b)
|
if
that payment is to the Purchaser, the account of the Purchaser
at:
|
bank: *
*
*
or
such
other account as the Purchaser shall, not less than three Business Days before
the date that payment is due, have specified by giving notice to the Sellers
for
the purpose of that payment.
|
16.2
|
If
a party defaults in making any payment when due of any sum payable
under
this agreement or under the Tax Deed, it shall pay interest on that
sum
from (and including) the date on which payment is due until (but
excluding) the date of actual payment (after as well as before judgment)
at an annual rate of 2% above the base rate from time to time of
Barclays
Bank plc, which interest shall accrue from day to day and be compounded
monthly.
|
|
16.3
|
If
any Seller is required by law to make a deduction or withholding
in
respect of any sum payable under this agreement, such Seller shall,
at the
same time as the sum which is the subject of the deduction or withholding
is payable, make a payment to the Purchaser of such additional amount
as
shall be required to ensure that the net amount received by the Purchaser
will equal the full amount which would have been received by it had
no
such deduction or withholding been required to be
made.
|
*
* * Confidential Treatment
11
|
17.
|
GENERAL
|
|
17.1
|
The
receipt by the Sellers' Solicitors of any sum or document to be paid
or
delivered at Completion to a Seller shall discharge the Purchaser's
obligation to pay or deliver it to that
Seller.
|
|
17.2
|
Each
of the obligations, Warranties and undertakings set out in this agreement
(excluding any obligation which is fully performed at Completion)
shall
continue in force after Completion and shall not be affected by the
waiver
of any Condition or any notice given by the Purchaser in respect
of any
Condition.
|
|
17.3
|
Where
any obligation, representation, warranty or undertaking in this agreement
is expressed to be made, undertaken or given by two or more of the
Sellers, they shall be jointly and severally responsible in respect
of
it.
|
|
17.4
|
The
Purchaser may release or compromise in whole or in part the liability
of
any of the Sellers under this agreement or grant any time or indulgence
to
that Sellers without affecting the liability of any other
Sellers.
|
|
17.5
|
Any
consent or authority given by a majority of the Sellers in connection
with
this agreement shall bind all the
Sellers.
|
|
17.6
|
Except
as otherwise expressly provided in this agreement each party shall
pay the
costs and expenses incurred by it in connection with the entering
into and
completion of this agreement.
|
|
17.7
|
This
agreement may be executed in any number of counterparts, all of which,
taken together, shall constitute one and the same agreement, and
any party
(including any duly authorised representative of a party) may enter
into
this agreement by executing a counterpart. Facsimile signatures shall
be
valid and binding to the same extent as original
signatures.
|
|
17.8
|
The
rights of each party under this
agreement:
|
|
(a)
|
may
be exercised as often as necessary;
|
|
(b)
|
except
as otherwise expressly provided in this agreement, are cumulative
and not
exclusive of rights and remedies provided by law;
and
|
|
(c)
|
may
be waived only in writing and
specifically.
|
Delay
in
exercising or non-exercise of any such right is not a waiver of that
right.
|
17.9
|
Except
as otherwise expressly stated in this agreement, a person who is
not a
party to this agreement may not enforce any of its terms under the
Contracts (Rights of Third Parties) Xxx
0000.
|
|
18.
|
WHOLE
AGREEMENT
|
|
18.1
|
This
agreement and the other Transaction Documents contain the whole agreement
between the parties relating to the transactions contemplated by
this
agreement and supersede all previous agreements, whether oral or
in
writing, between the parties relating to these transactions.
Except as required by statute, no terms shall be implied (whether
by
custom, usage or otherwise) into this
agreement.
|
*
* * Confidential Treatment
12
|
18.2
|
Each
party acknowledges that in agreeing to enter into this agreement
and the
other Transaction Documents it/he has not relied on any express or
implied
representation, warranty, collateral contract or other assurance
(except
those set out in the Transaction Documents) made by or on behalf
of the
other party before the entering into of this agreement. Each party
waives
all rights and remedies which, but for this sub-clause 18.2,
might otherwise be available to it/him in respect of any such
representation, warranty, collateral contract or other
assurance.
|
|
18.3
|
Nothing
in this clause limits or excludes any liability for fraud or wilful
concealment.
|
|
19.
|
GOVERNING
LAW AND JURISDICTION
|
|
19.1
|
This
agreement is governed by English
law.
|
|
19.2
|
The
English courts have exclusive jurisdiction to settle any dispute
arising
out of or in connection with this agreement and the parties submit
to the
exclusive jurisdiction of the English
courts.
|
|
19.3
|
Each
Seller irrevocably appoints the Sellers' Solicitors of * * * as his
agent
in England for service of process.
|
|
19.4
|
Each
party irrevocably and unconditionally waives, to the fullest extent
permitted by applicable law, any right it may have to a trial by
jury in
any legal action or proceeding arising, directly or indirectly, out
of or
relating to this agreement or the transactions contemplated by it
and for
any counterclaim therein (in each case whether based on contract,
tort or
any other theory and whether predicated on common law, statute or
otherwise). Each party (a) certifies that no representative, agent
or
attorney of any other party has represented, expressly or otherwise,
that
such other party would not, in the event of litigation, seek to enforce
the foregoing waiver and (b) acknowledges that it and the other parties
have been induced to enter into this agreement by, amongst other
things,
the mutual waivers and certifications in this
clause.
|
|
20.
|
LANGUAGE
|
The
language of this agreement and the transactions envisaged by it is English
and
all notices to be given in connection with this agreement must be in English.
All demands, requests, statements, certificates or other documents or
communications to be provided in connection with this agreement and the
transactions envisaged by it must be in English or accompanied by a certified
English translation; in this case the English translation prevails unless the
document or communication is a statutory or other official document or
communication.
AS
WITNESS
this
agreement has been signed by the parties (or their duly authorised
representatives) on the date stated at the beginning of this
agreement.
*
* * Confidential Treatment
13
THE
SELLERS
|
(A)
|
(B)
|
(C)
|
(D)
|
|
Name
and address of Sellers
|
Number
of Ordinary Shares
|
Initial
Consideration (£)
|
Percentage
|
|
Xxxxx
Xxxxxxxx
|
22973
|
1,800,000
|
20%
|
|
Xxxxxx
Xxxx Xxxxx
|
22973
|
1,800,000
|
20%
|
|
Xxxxxxx
Xxxxxxx
|
22973
|
1,800,000
|
20%
|
|
Xxxxxx
Xxxxxxx
|
22973
|
1,800,000
|
20%
|
|
Xxxxxx
Xxxx
|
22973
|
1,800,000
|
20%
|
*
* * Confidential Treatment
14
SCHEDULE
2
THE
COMPANY
Deleted
pursuant to Regulation S-K, Item 601(b)(2). Registrant will furnish
supplementally upon request by the Commission.
*
* * Confidential Treatment
15
SCHEDULE
3
PROPERTIES
LEASEHOLD
Deleted
pursuant to Regulation S-K, Item 601(b)(2). Registrant will furnish
supplementally upon request by the Commission.
*
* * Confidential Treatment
16
SCHEDULE
4
WARRANTIES
|
1. General
2. Accounts
and Financial
3. Commercial
4. Taxation
5. Properties
6. Employees,
Pensions and Incentives
|
|
1.
|
GENERAL
|
|
1.1
|
Recitals
and schedules
|
The
particulars relating to the Company
and the
Properties set out in the schedules to this agreement are true and
accurate.
|
1.2
|
Constitutional
documents, statutory books and
returns
|
|
(a)
|
The
copy of the memorandum and articles of association of the
Company
which is annexed to the Disclosure Letter is accurate and complete
and has
annexed or incorporated copies of all resolutions or agreements required
by the Companies Xxx 0000 to be so annexed or
incorporated.
|
|
(b)
|
The
register of members and other statutory books and registers of
the
Company
have been properly kept and no notice or allegation that any of them
is
incorrect or should be rectified has been
received.
|
|
(c)
|
All
returns, particulars, resolutions and other documents which the
Company
is
required by law to file with or deliver to the registrar of companies
have
been correctly made up and duly filed or
delivered.
|
|
1.3
|
Sellers'
other interests
|
None
of
the Sellers are concerned in any business (within the meaning set out in clause
11.2)
which
is competitive or likely to be competitive with the business of the
Company.
|
1.4
|
Ownership
of the Shares
|
|
(a)
|
The
shares, details of which are set out opposite "issued capital" in
schedule
2,
constitute the whole of the issued and allotted share capital of
the
Company
and are fully paid up.
|
|
(b)
|
No
person is entitled or has claimed to be entitled to require the
Company
to
issue any share or loan capital either now or at any future date
whether
contingently or not.
|
|
(c)
|
There
is no Encumbrance on, over or affecting any of the Shares and no
person
has claimed to be entitled to any such
Encumbrance.
|
*
* * Confidential Treatment
17
|
1.5
|
Subsidiaries,
associations and branches
|
The
Company:
|
(a)
|
does
not hold or beneficially own, nor has it agreed to acquire, any securities
of any other company;
|
|
(b)
|
is
not, nor has it agreed to become, a member of any partnership (whether
incorporated or unincorporated) or other unincorporated association,
joint
venture or consortium (other than recognised trade associations);
and
|
|
(c)
|
does
not have outside the United Kingdom any branch or any permanent
establishment (as that expression is defined in the respective Double
Taxation Relief Orders current at the date of this
agreement).
|
|
1.6
|
Ownership
of assets
|
|
(a)
|
At
the Accounts Date all the assets included in the Accounts were owned
by
the Company and full and accurate particulars of all fixed assets
acquired
or agreed to be acquired by the
Company
since the Accounts Date are set out in the Disclosure
Letter.
|
|
(b)
|
Except
for current assets offered for sale or sold in the ordinary course
of
trading, the
Company has
not
since the Accounts Date disposed of any of the assets included in
the
Accounts or any assets acquired or agreed to be acquired since the
Accounts Date.
|
|
(c)
|
Save
for the security disclosed in the Disclosure Letter, none of the
property,
assets, undertaking, goodwill or uncalled capital of the
Company
(other than the Properties) is subject to any
Encumbrance.
|
|
(d)
|
The
assets of the
Company
comprise all the assets reasonably necessary for the continuation
of its
business as carried on at the date of this
agreement.
|
|
1.7
|
Vulnerable
prior transactions
|
There
has
been no transaction pursuant to or as a result of which (i) any of the Shares
or
(ii) any asset owned, purportedly owned or otherwise held by the
Company
is
liable to be transferred or re-transferred to another person or which gives
or
may give rise to a right of compensation or other payment in favour of another
person under the law of any relevant jurisdiction.
|
1.8
|
Compliance
with statutes
|
So
far as
the same applies to the Company, neither
the Company,
nor (so
far as the Sellers are
aware)
any of the officers, agents or employees of the Company (during the course
of
his duties), has done or omitted to do anything which is a contravention of
any
statute, order, regulation or the like which has resulted or may result in
any
fine, penalty or other liability or sanction on the part of the
Company.
|
1.9
|
Licences
and consents
|
The
Company
has, and
has at all times complied with the terms and conditions of, all licences
(including statutory licences), authorisations and consents necessary to own
and
operate its assets and to carry on its business as it does at present and (so
far as the Sellers are aware) no circumstances exist which may result in the
termination, revocation, suspension or modification of any of those licences,
authorisations or consents or that may prejudice the renewal of any of
them.
*
* * Confidential Treatment
18
|
1.10
|
Insider
contracts
|
|
(a)
|
The
Company is not
a
party to any contract or arrangement in which any of the Sellers
or any
person connected with any of the Sellers is interested, directly
or
indirectly, nor has there been any such contract or arrangement at
any
time during the six years ending on the date of this
agreement.
|
|
(b)
|
The
Company is
not
a
party to, nor have the profits or financial position of the Company
during
the five financial periods ended on the Accounts Date been affected
by,
any contract or arrangement which is not of an entirely arm's length
nature.
|
|
(c)
|
None
of the Sellers nor any person connected with any Seller is a party
to any
contract or arrangement for the provision of finance, goods, services
or
other facilities to or by the
Company
or
in any way relating to, or to the affairs of, the
Company.
|
|
1.11
|
Litigation
|
|
(a)
|
The
Company is
not
engaged in any litigation, arbitration or alternative dispute resolution
proceedings (except as plaintiff for collection of debts not exceeding
an
aggregate of £10,000 in the case of all debts being collected and not
exceeding £5,000 in the case of any one debt being
collected)
and there are no such proceedings pending or threatened by or against
the
Company.
|
|
(b)
|
So
far as the Sellers are
aware, there are no circumstances which are likely to give rise to
any
litigation, arbitration or alternative dispute resolution proceedings
by
or against the
Company.
|
|
(c)
|
The
Company has
not
been notified that it is the subject of any investigation, inquiry,
enforcement proceedings or process by any governmental, administrative
or
regulatory body nor, so far as the Sellers are
aware, are there any circumstances which are likely to give rise
to any
such investigation, inquiry, proceedings or
process.
|
|
(d)
|
All
claims and liabilities, and costs associated with those claims and
liabilities, arising out of the matters disclosed against this warranty
1.11 in the Disclosure Letter are fully covered and provided for
under the
Company's insurance policies.
|
|
1.12
|
Environmental
matters
|
|
(a)
|
In
this paragraph:
|
|
(i)
|
Dangerous
Substance
means any natural or artificial substance or thing (whether in a
solid,
liquid, gas, vapour or other form) that is capable (alone or in
combination) of causing harm to man or any other living organism
or of
damaging the Environment or public health (including controlled,
clinical,
special or hazardous waste, polluting, toxic or dangerous substances,
radiation, noise, vibration, electricity and
heat);
|
|
(ii)
|
Environment
means any or all of the following media: air (including air within
any
building or other natural or man-made structure whether above or
below
ground), water (including surface waters, underground waters, groundwater,
coastal and inland waters and water within any natural or man-made
structure), land (including land under water, surface land and sub-surface
land), flora, fauna, ecosystems and
man;
|
*
* * Confidential Treatment
19
|
(iii)
|
Environmental
Law
means any and all laws, statutes, secondary and subordinate legislation,
by-laws, regulations, directives, rules, codes of practice, circulars,
guidance and the like, common law, notices, judgments, orders, decisions
and interpretations of any laws by any Regulatory Authority, international
and EU treaties and regulations concerning the protection of the
Environment, human health and welfare or conditions in or in the
vicinity
of the workplace or the generation, transportation, storage, treatment
or
disposal of any Dangerous Substance or waste and/or concerning the
pharmaceutical industry;
|
|
(iv)
|
Environmental
Licence
means any permit, licence (including statutory licence), authorisation,
permission, accreditation, consent, exemption or other approval required
under or in relation to any Environmental
Law;
|
|
(v)
|
Regulatory
Authority
means any authority, agency, department (including, but not limited
to,
any governmental department or agency) or other person having authority
under or jurisdiction in respect of any Environmental
Law;
|
|
(vi)
|
Relevant
Property
means any property or land (including buildings or other natural
or
man-made structures where above or below ground) or part thereof
now or
previously owned, leased, occupied or controlled by the
Company;
|
|
(b)
|
So
far as the same applies to the Company, the Company has at all times
complied in all material respects with applicable Environmental
Laws.
|
|
(c)
|
The
Company has at all times held all requisite Environmental Licences
(and in
relation to currently required Environmental Licences these are valid
and
subsisting) and has at all times complied in all material respects
with
the terms and conditions of such Environmental Licences. So far as
the
Seller is aware, there are no circumstances likely to give rise to
any
suspension, revocation or material modification of any Environmental
Licence or which may prejudice the renewal, extension or, where necessary,
transfer of any such licence.
|
|
(d)
|
The
Seller has disclosed full details of (and where in the possession
or
control of the Company copies of) all environmental and/or health
and
safety assessments, audits, reviews or investigations produced in
the last
five years whether in draft (where no final form report has been
produced)
or final form concerning (directly or indirectly) the current or
previous
operations of the Company and/or the Environment at any Relevant
Property.
|
|
(e)
|
The
Company has not at any time used, disposed of, stored, generated,
released, buried, transported or emitted any Dangerous Substances
at, on,
from, under or to any Relevant Land nor has the Company or any other
person or entity for which the Company may be liable used, disposed
of,
stored, generated, released, buried, transported or emitted any Dangerous
Substance at, on, from, under or to any other place and so far as
the
Seller is aware no other person has used, disposed of, stored, generated,
released, buried, transported or emitted any Dangerous Substance
at, on,
from, under or to any Relevant Land.
|
|
(f)
|
In
the last five years the Company has not at any time received any
notice or
other communication from which it appears that (1) the Company has
been,
is or may be in violation of any Environmental Law or Environmental
Licence and/or (2) any Relevant Land is subject to any investigation
or
inquiry by any Regulatory
Authority.
|
|
(g)
|
The
Company is not or has not at any time in the last five years been
engaged
in any prosecution, litigation, arbitration or settlement action
concerning Environmental Law, any Environmental Licence or Dangerous
Substances and the Seller is not aware of any facts or circumstances
which
are likely to give rise to such prosecution, litigation, arbitration
or
settlement action by or against the Company.
|
*
* * Confidential Treatment
20
|
1.13
|
Insolvency
|
|
(a)
|
No
receiver, receiver and manager or administrative receiver has been
appointed in respect of the
Company
or
in respect of the whole or any part of the assets or undertaking
of
the
Company.
|
|
(b)
|
No
administration order has been made, no petition or application has
been
presented for such an order and no documents have been filed with
the
court for the appointment of an administrator in respect of the
Company and no notice of intention to appoint an administrator has
been
given in respect of the Company.
|
|
(c)
|
No
meeting has been convened at which a resolution is to be proposed,
no
resolution has been passed, no petition has been presented and no
order
has been made for the winding up of the
Company and no provisional liquidator has been appointed to the
Company.
|
|
(d)
|
The
Company has
not
stopped or suspended payment of its debts, become unable to pay its
debts
or otherwise become insolvent in any relevant
jurisdiction.
|
|
(e)
|
No
unsatisfied judgment, order or award is outstanding against the
Company,
no written demand under section 123(1)(a) of the Insolvency Act has
been
made against the
Company
and no distress or execution has been levied on, or other process
commenced against, any asset of the
Company.
|
|
(f)
|
No
voluntary arrangement under section 1 of the Insolvency Act has been
proposed or approved in respect of the Company and no steps have
been
taken to obtain a moratorium under Schedule A1 of the Insolvency
Act in
respect of the Company.
|
|
(g)
|
No
meeting to approve a compromise or scheme of arrangement under section
425
of the Companies Xxx 0000 has been convened and no such compromise
or
scheme has been agreed to or sanctioned in respect of the
Company.
|
|
(h)
|
The
Company has not entered into any compromise or arrangement with its
creditors or any class of its creditors
generally.
|
|
(i)
|
No
person has been appointed, no proceedings have been commenced, no
order
has been obtained and no other action has been taken of a type mentioned
in any of the subparagraphs above in any jurisdiction other than
the
UK.
|
|
(j)
|
No
circumstances have arisen which entitle any person to take any action,
appoint any person, commence any proceedings or obtain any order
of a type
mentioned in any of the subparagraphs above in any relevant
jurisdiction.
|
|
1.14
|
Capacity
and consequences of sale
|
|
(a)
|
Each
Seller has the power to execute and deliver this agreement, the Tax
Deed
and each of the other Transaction Documents to which he is or will
be a
party and to perform his obligations under each of them and has taken
all
action necessary to authorise such execution and delivery and the
performance of such obligations.
|
|
(b)
|
This
agreement constitutes and the Tax Deed will, when executed, constitute
legal, valid and binding obligations on each
Seller in accordance with their respective terms. Each of the other
Transaction Documents to which any Seller is or will be a party will,
when
executed, constitute legal, valid and binding obligations on such
Seller
in accordance with its terms.
|
*
* * Confidential Treatment
21
|
(c)
|
The
execution and delivery by each Seller of this agreement, the Tax
Deed and
of each of the other Transaction Documents to which he is or will
be a
party and the performance of the obligations of each Seller under
them do
not and will not:
|
|
(i)
|
conflict
with or constitute a default under any provision
of:
|
|
(A)
|
any
agreement or instrument to which any
Seller or the
Company
is
a party; or
|
|
(B)
|
the
constitutional documents of the
Company;
or
|
|
(C)
|
any
law, lien, lease, order, judgment, award, injunction, decree, ordinance
or
regulation or any other restriction of any kind or character by which
any
Seller or the
Company
is
bound; or
|
|
(ii)
|
relieve
any other party to a contract with the
Company
of
its obligations or enable that party to vary or terminate its rights
or
obligations under that contract; or
|
|
(iii)
|
result
in the creation or imposition of any Encumbrance on any of the Shares
or
any of the property or assets of the
Company.
|
*
* * Confidential Treatment
22
| 2. |
ACCOUNTS AND
FINANCIAL
|
|
2.1
|
Accuracy
of Accounts
|
The
Accounts:
|
(a)
|
have
been prepared under the historical cost convention (as modified for
the
revaluation of land and buildings) and in accordance with GAAP, the
Companies Xxx 0000 and other applicable statutes and
regulations;
|
|
(b)
|
correctly
state the assets of the Company
and give a true and fair view of the state of affairs of the Company
as
at the Accounts Date and of the profit or loss of the Company
for the period ended on the Accounts
Date;
|
|
(c)
|
contain
(as appropriate under GAAP) specific provisions, accruals or creditors
adequate to cover, or full particulars in notes, of all Taxation
(including deferred taxation) and other liabilities (whether quantified,
contingent or otherwise) of the Company
as
at the Accounts Date;
and
|
|
(d)
|
save
as expressly disclosed therein, are not affected by any unusual or
non-recurring items.
|
|
2.2
|
Valuation
of stocks and fixed assets
|
|
(a)
|
The
Accounts have been prepared applying and adopting the same policies,
principles, bases, conventions, rules, practices, techniques, methods
and
procedures as were applied and adopted in the Company's
accounts for each of the four preceding financial periods and in
particular:
|
|
(i)
|
the
basis of valuation for stocks and work-in-progress has remained the
same
in respect of the commencement and end of each of the accounting
periods
of the Company
during the period of four years ended on the Accounts Date or since
the
date of its incorporation (whichever period is the shorter);
and
|
|
(ii)
|
the
rate of depreciation applied in respect of each fixed asset for the
period
ended on the Accounts Date has been consistently applied over previous
accounting periods of the Company
and is adequate to write down the value of such fixed asset to its
net
realisable value as at the end of its useful working
life.
|
|
(b)
|
In
the Accounts:
|
|
(i)
|
full
provision has been made for redundant, obsolete, unsaleable, deteriorated
or slow moving stocks; and
|
|
(ii)
|
the
value attributed to each fixed asset of the
Company
does not exceed its current market value as at the Accounts
Date.
|
|
2.3
|
Book
debts
|
|
(a)
|
The
debts included in the Accounts have realised or will realise, in
the
ordinary course of collection, their nominal amounts plus any costs
of
collection and any accrued interest less any provisions for bad and
doubtful debts included in the
Accounts.
|
|
(b)
|
None
of the Sellers
has any
reason to believe that any debt owing to the
Company
at
the date of this agreement (other than the debts included in the
Accounts)
will not in the ordinary course of collection realise its nominal
amount
plus any costs of collection and any accrued
interest.
|
*
* * Confidential Treatment
23
|
2.4
|
Books
and records
|
All
accounts, books, ledgers and other financial records of the
Company:
|
(a)
|
have
been properly maintained and contain accurate records of all matters
required to be entered in them by the Companies Xxx 0000;
and
|
|
(b)
|
give
a true and fair view of the matters which ought to appear in
them.
|
|
2.5
|
Management
accounts
|
The
unaudited management accounts of the Company
for each
of July and August, 2006 in the Agreed Form have been prepared applying and
adopting policies, principles, bases, conventions, rules, practices, techniques,
methods and procedures consistent with those employed in preparing the Accounts
and give a true and fair view of the financial position of the Company
for the
period to which such accounts relate.
|
2.6
|
Position
since Accounts Date
|
Since
the
Accounts Date:
|
(a)
|
the
Company
has conducted its business in a normal and proper
manner;
|
|
(b)
|
the
Company has
not
entered into any unusual contract or commitment or otherwise departed
from
its normal course of trading;
|
|
(c)
|
there
has been no deterioration in the turnover, the trading performance,
the
assets, the financial position or the prospects of the
Company;
and
|
|
(d)
|
the
Company
has paid its creditors in accordance with normal commercial practice
and,
without limiting the foregoing, no debt owing by the
Company
has been outstanding for more than 60 days from the date of
invoice.
|
|
2.7
|
Capital
commitments
|
Except
as
expressly disclosed in the Accounts, the
Company did not have
any
commitment on capital account outstanding at the Accounts Date. Since the
Accounts Date the
Company has
not
entered
into nor agreed to enter into any capital commitment.
|
2.8
|
Dividends
and distributions
|
|
(a)
|
No
dividend or other distribution of profits or assets, including any
distribution within the meaning of Part VI and section 418 of the
Taxes
Xxx 0000, has been or agreed to be declared, made or paid by the
Company
since the Accounts Date.
|
|
(b)
|
All
dividends or other distributions of profits or assets declared, made
or
paid since the date of incorporation of the
Company
have been declared, made and paid in accordance with law and its
constitutional documents.
|
*
* * Confidential Treatment
24
|
2.9
|
Borrowings,
loan capital and
guarantees
|
The
Company does not have outstanding any loan capital or any money borrowed or
raised, including money raised by acceptances or debt factoring, or any
liability (whether present or future, actual or contingent) in respect of any
guarantee or indemnity. Continuation of facilities
|
2.10
|
Continuation
of Facilities
|
In
relation to each agreement, trust deed, instrument or arrangement under which
the Company has outstanding any loan capital, has outstanding any money borrowed
or raised (including money raised by acceptances or debt factoring) or has
any
liability (whether present or future, actual or contingent) in respect of any
guarantee or indemnity:
|
(a)
|
full
and accurate particulars of it, and a copy of all documents relating
to
it, are set out in or, as the case may be, annexed to the Disclosure
Letter;
|
| (b) |
so
far as the Sellers are aware, there has not been any contravention
of, or
non-compliance with, any of its terms or
conditions;
|
|
(c)
|
no
steps for the enforcement of any Encumbrance have been taken or
threatened;
|
|
(d)
|
there
has not been any alteration to its terms and
conditions;
|
|
(e)
|
so
far as the Sellers are aware, none
of
the Sellers
nor the
Company
has done anything which might affect or prejudice its
continuation;
|
|
(f)
|
it
is not dependent on the guarantee of, or on any security provided
by, a
third party; and
|
|
(g)
|
it
is not terminable, and no amount is or may become repayable under
it, by
reason of the sale of the Shares.
|
|
2.11
|
Derivative
transactions
|
The
Company does
not
have
outstanding any obligations in respect of a derivative transaction including
any
foreign exchange transaction.
|
2.12
|
Government
grants
|
So
far as
the Sellers are aware, the
Company is
not
subject
to any arrangement for receipt or repayment of any grant, subsidy or financial
assistance from any governmental department or other body.
|
2.13
|
Loans
|
The
Company 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, actual or contingent) other
than
amounts owing by way of trade credit in the ordinary course of trading as a
result of goods or services supplied on normal arm's length terms.
|
2.14
|
Bank
accounts
|
The
statement of the Company's
bank
accounts and of the credit or debit balance on each of them as at a date not
more than seven days before the date of this agreement annexed to the Disclosure
Letter is correct, and the
Company does
not
have
any bank
or deposit account (whether in credit or overdrawn) not included in that
statement. Since the date of that statement there has not been any payment
out
of any of the accounts concerned except for routine payments and the balance
on
each such account is not materially different from the balance shown on that
statement.
*
* * Confidential Treatment
25
|
2.15
|
Working
Capital
|
Having
regard to the existing bank and other facilities available to it the Company
has
sufficient working capital for the purposes of continuing to carry on its
business in its present form and at its present level of turnover for the period
of 3 months after the date of this agreement and for the purposes of executing,
carrying out and fulfilling in accordance with their terms all orders, projects
and contractual obligations which have been placed with or undertaken by
it.
|
2.16
|
Political
and charitable donations
|
The
Company has
not
incurred
any political expenditure or made any political or charitable donation in the
current or preceding financial year and is not under any commitment to do
so.
*
* * Confidential Treatment
26
|
3.
|
COMMERCIAL
|
|
3.1
|
Suppliers
and customers
|
To
the
best of the Sellers' knowledge, information and belief:
|
(a)
|
no
supplier of the
Company
has ceased or will cease supplying it or has reduced or will reduce
its
supplies to the
Company;
and
|
|
(b)
|
no
customer of the
Company
has terminated or will terminate any contract with it or withdraw
or
reduce its custom with it,
|
after
Completion or as a result of the proposed acquisition of the Company
by the
Purchaser.
|
3.2
|
Trading
contracts and outstanding
offers
|
|
(a)
|
The
Company
has observed and performed all the terms and conditions on its part
to be
observed and performed under each of the contracts to which it is
a
party.
|
|
(b)
|
The
Company will
not
be
required after the date of this agreement to undertake any work or
supply
any goods or services, except on normal commercial terms under a
contract
entered into on or before the date of this
agreement.
|
|
(c)
|
No
offer, tender or the like which is capable of being converted into
an
obligation of the
Company
by
an acceptance or other act of some other person is outstanding, except
in
the ordinary course of the business of the
Company.
|
|
(d)
|
Neither
the Company
nor any regular supplier to it sells or purchases any stock or materials
on terms that property does not pass until full payment is
made.
|
|
3.3
|
Defective
products
|
|
(a)
|
The
Company has
not
manufactured or sold products which are or have or will become in
any
material respect dangerous, faulty or defective or which do not comply
in
any material respect with any warranty or representation expressly
or
impliedly made by it.
|
|
(b)
|
The
Company has
not
accepted any obligation to service, repair, maintain, take back or
otherwise do anything in respect of any article sold or delivered
by
it.
|
|
3.4
|
Material
contracts
|
The
Company is
not
a party
to any contract, arrangement or obligation which:
|
(a)
|
whether
by reason of its nature, term, scope, price or otherwise, is or is
likely
to be of material importance to the business, profits, assets or
liabilities of the Company; or
|
|
(b)
|
is
not in the ordinary course of its business;
or
|
|
(c)
|
is
incapable of performance in accordance with its terms within six
months
after the date on which it was entered into or undertaken;
or
|
|
(d)
|
is
expected by the Sellers to result in a loss to the
Company
on
completion of performance; or
|
*
* * Confidential Treatment
27
|
(e)
|
is
of an onerous nature or cannot be fulfilled or performed by the
Company
on
time and without undue or unusual expenditure of money or effort;
or
|
|
(f)
|
requires
an aggregate consideration payable by the
Company
in
excess of £5,000; or
|
|
(g)
|
involves
the supply of goods or services the aggregate sales value of which
will
represent in excess of 3% of the turnover of the Company expected
by the
Sellers
for the current financial year; or
|
|
(h)
|
involves
payment of any sum by the
Company
determined by reference to fluctuations in the Index of Retail Prices
or
any other index; or
|
|
(i)
|
requires
payment of any sum by the
Company
in
any currency other than pounds sterling;
or
|
|
(j)
|
is
for the provision of management or similar services to the
Company
and which is not terminable the Company on less than three months'
notice
without compensation.
|
|
3.5
|
Agencies
etc.
|
The
Company is
not
a party
to:
|
(a)
|
any
agency, distributorship, marketing, purchasing, manufacturing or
licensing
agreement or arrangement; or
|
|
(b)
|
any
agreement or arrangement which 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.
|
|
3.6
|
Anti-competitive
arrangements
|
The
Company is not now, nor has during the last six years been, a party to any
agreement or concerted practice or involved in any business conduct which
infringes any anti-trust or similar legislation in any jurisdiction in which
it
carries on business or has assets or sales (including Articles 81 and 82 EC
(formerly Articles 85 and 86 of the EC Treaty)) nor has, pursuant to any such
legislation, given any undertaking, applied for negative clearance, exemption,
guidance or approval, had an order, notice or direction made against it or
received any request for information or statement of objections from or
corresponded with any court or authority. The Company has not during the last
10
years been in receipt of any state aid within the meaning of Article 87(1)
EC
(formerly Article 92(1) of the EC Treaty).
|
3.7
|
Confidential
information
|
|
(a)
|
Neither
the
Company
nor any predecessor in business of the Company has at any time (except
(A)
in the normal and proper course of the
Company's
day-to-day business and subject to an enforceable obligation of
confidentiality or (B) to the
Company's
professional advisers) disclosed to any person other than the Purchaser
or
the Purchaser's Advisers:
|
|
(i)
|
any
of the secret or confidential information or property of the
Company,
including any financial information, plan, statistics, document,
file,
client list, marketing information, records or papers;
or
|
|
(ii)
|
any
other information relating to the
Company's
business or affairs the disclosure of which might or could cause
loss or
damage to or adversely affect the
Company;
or
|
*
* * Confidential Treatment
28
|
(iii)
|
any
secret or confidential information relating to any customer, client,
employee or agent of the Company or to any other person who has or
has had
any dealings with the Company.
|
|
(b)
|
So
far as the Sellers are aware, the
Company is
not
now nor
has been a party to any agreement, arrangement or policy as to
confidentiality of information which is void or unenforceable (whether
in
whole or in part).
|
|
3.8
|
Intellectual
property
|
|
(a)
|
No
activities of the
Company
(or of any licensee under any licence granted by the
Company)
infringe or are likely to infringe any Intellectual Property Right
of any
third party and no claim has been made against the
Company
or
any such licensee in respect of such
infringement.
|
|
(b)
|
Full
and accurate particulars of all registered Intellectual Property
Rights
(including applications to register the same) and all commercially
significant unregistered Intellectual Property Rights owned or used
by
the
Company
are set out in the Disclosure Letter. Each
such Intellectual Property Right is legally and beneficially owned,
free
from any Encumbrance, solely by the
Company.
|
|
(c)
|
Full
and accurate particulars of or, in the case of a document, a copy
of all
licence and other agreements relating to any Intellectual Property
Right
to which the
Company
is
a party (whether as licensor or licensee) or which relate to any
Intellectual Property Right owned by the
Company are set out in or annexed to the Disclosure Letter.
The
Company is
not
in
breach of any such agreement and, so far as the Sellers
are aware, no third party is in breach of any such
agreement.
|
|
(d)
|
So
far as the Sellers are aware, all the Intellectual Property Rights
referred to in subparagraph 3.8(b)
above
and all the agreements referred to in subparagraph 3.8(c)
above
are valid and subsisting and nothing has been done or omitted to
be done
by the
Company,
and, so far as the Sellers are aware, nothing has been done or omitted
to
be done by any third party, which would jeopardise the validity or
subsistence of any of such Intellectual Property Rights or of any
of such
agreements. None of such Intellectual Property Rights or agreements
is
subject to or contains any restriction which materially and adversely
affects the Company's ability to use it for the purpose of its
business.
|
|
(e)
|
The
Company
owns or has licensed to it all Intellectual Property Rights it requires
to
carry on its business as such business has been carried on during
the
twelve months prior to the date of this agreement. None of such
Intellectual Property Rights nor the Company's ability to use any
of such
Intellectual Property Rights will be affected by the acquisition
of the
Company
by
the Purchaser.
|
|
(f)
|
So
far as the Sellers are
aware there has been no unauthorised use by any person of any Intellectual
Property Right or confidential information of the
Company.
|
|
3.9
|
Plant
and equipment
|
So
far as
the Sellers are aware, each item of machinery or plant of the
Company,
including of its fixed machinery or plant, and each vehicle and item of office
equipment owned or used by it:
|
(a)
|
is
in good repair and condition (subject to fair wear and
tear);
|
*
* * Confidential Treatment
29
|
(b)
|
is
in satisfactory working order;
|
|
(c)
|
has
been properly serviced and maintained;
and
|
|
(d)
|
is
not surplus to the
Company's
requirements.
|
|
3.10
|
Insurance
|
|
(a)
|
All
the assets and undertaking of the
Company
of
an insurable nature (including the Properties) are and have at all
material times been insured in amounts representing their full replacement
or reinstatement value against fire and other risks normally insured
against by persons carrying on the same classes of business as those
carried on by the
Company
and the
Company
is
now and has at all material times been adequately covered against
accident, damage, injury, third party loss, loss of profits and other
risks normally covered by
insurance.
|
|
(b)
|
Full
and accurate particulars of or, in the case of a document, a copy
of each
of the insurance policies effected in whole or in part for the benefit
of
the
Company
and current as at the date of this agreement are set out in or annexed
to
the Disclosure Letter.
|
|
(c)
|
All
such insurance policies are currently in full force and effect and
nothing
has been done or omitted to be done (including any failure to report
on a
timely basis any matter or circumstance to the insurer concerned)
which
could make any such policy void or voidable in whole or in part,
and there
is no claim outstanding under any such
policy.
|
|
3.11
|
Data
and records
|
|
(a)
|
For
the purposes of this paragraph, Data
Protection Legislation
means all statutes, enacting instruments, common law, regulations,
directives, codes of practice, guidance notes, decisions, recommendations
and the like (whether in the United Kingdom or the European Union)
concerning the protection and/or processing of personal
data.
|
|
(b)
|
All
the records and all data and information of the
Company
are recorded, stored, maintained, operated or otherwise held exclusively
by the
Company
and are not wholly or partly dependent on any facilities or means
(including any electronic, mechanical or photographic process,
computerised or otherwise) which are not under the exclusive ownership
and
control of the
Company.
The
Company has
not
disclosed to any third party any such records, data or
information.
|
|
(c)
|
The
Company
has complied with all relevant requirements of Data Protection
Legislation, including:
|
|
(i)
|
the
data protection principles established in that
legislation;
|
|
(ii)
|
requests
from data subjects for access to data held by it;
and
|
|
(iii)
|
the
requirements relating to the notification by data controllers to
the
relevant data protection regulator of their processing of personal
data.
|
|
(d)
|
The
Company has
not
received any notice or allegation from either the UK Information
Commissioner or from any other data protection regulator in any other
jurisdiction, a data controller or a data subject alleging non-compliance
with any Data Protection Legislation (including data protection
principles), requiring the
Company
to
change or delete any data or prohibiting any transfer of data to
a place
outside the United Kingdom.
|
*
* * Confidential Treatment
30
|
(e)
|
No
individual has claimed or has the right to claim compensation from
the
Company
under any Data Protection Legislation, including for unauthorised
or
erroneous processing or loss or unauthorised disclosure of
data.
|
|
3.12
|
Business
names
|
The
Company carries
on
business under its own corporate name and not any other name.
|
3.13
|
Powers
of attorney
|
The
Company has
not
granted
any power of attorney or similar authority which remains in force.
|
3.14
|
Systems
compliance
|
|
(a)
|
For
the purposes of this paragraph, Systems
means
all the software, hardware, network and telecommunications equipment
and
internet-related information technology that are used by the
Company in connection with the operation of its business as currently
conducted.
|
|
(b)
|
Full
and accurate particulars of or, in the case of a document, a copy
of all
agreements relating to the Systems to which the Company is a party
are set
out in or annexed to the Disclosure Letter. Neither the Company nor,
so
far as the Sellers are aware, any third party is in material breach
of any
such agreement.
|
|
(c)
|
The
Company is the exclusive owner and has direct control of and/or is
validly
licensed or otherwise authorised to use the Systems. The
Systems and the Company's ability to use all or any part of the Systems
will not be affected by the acquisition of the Company
by
the Purchaser.
|
|
(d)
|
So
far as the Sellers are aware, the Systems comprise all computer systems
(including computer processors, associated and peripheral equipment,
computer programs, systems software and technical and other documentation
relating to any computer system) required by the Company in the
continuance of its business in the ordinary course to the same extent
as
carried on in the period of twenty four months prior to the date
of this
agreement. Full and accurate particulars of or, in the case of a
document,
a copy of all proposed acquisitions in relation to the Systems are
set out
in or annexed to the Disclosure
Letter.
|
|
(e)
|
The
Systems have the benefit of the maintenance agreements of which full
and
accurate particulars of or, in the case of a document, a copy of
are set
out in or annexed to the Disclosure Letter. There have been no security
breaches, breakdowns, malfunctions, data loss, failures or other
defects
in the Systems in the twelve month period ended on the date of this
agreement which have had an adverse effect on the operations of the
Company.
|
|
(f)
|
Full
and accurate particulars of all of the Company's websites are set
out in
the Disclosure Letter. The Company has not in the twelve month period
ended on the date of this agreement received any written notice that
the
operation of, or content of, any of its websites fails to comply
with any
applicable laws.
|
|
(g)
|
So
far as the Sellers are aware, the
Company is the owner of all Intellectual Property Rights relating
to the
design and layout of its websites and either the owner or licensee
of all
software relating to the operation, functionality and performance
of those
websites.
|
*
* * Confidential Treatment
31
|
4.
|
TAXATION
|
|
4.1
|
Tax
returns
|
All
information, notices, accounts, statements, reports, computations, assessments
and returns which ought to have been submitted, made or given to HM Revenue
and
Customs or any other relevant Taxation Authority by the Company have been
properly and duly so submitted, made or given, and all information, notices,
accounts, statements, reports, computations, assessments and returns submitted,
made or given to HM Revenue and Customs or any such other authority are true
and
accurate and none of them is the subject of any material dispute or likely
to
become the subject of any material dispute with any such authority.
|
4.2
|
Taxation
liabilities
|
|
(a)
|
All
Taxation for which the
Company
has been liable or for which the
Company
has been liable to account has been duly paid (insofar as it ought
to have
been paid) and, without prejudice to the generality of the foregoing,
the
Company
has made all such deductions and retentions as it was obliged or
entitled
to make and all such payments in respect of those deductions and
retentions as should have been
made.
|
|
(b)
|
Full
and accurate particulars of all payments made and all repayments
claimed
by the
Company
since the Accounts Date pursuant to the Corporation Tax (Instalment
Payments) Regulations 1998 are set out in the Disclosure Letter,
and the
computation of each such payment or claim for repayment took proper
account of all relevant estimates and other information available
to
the
Company
at
the time when such payment was made or at the time when such claim
for
repayment was submitted to HM Revenue and Customs (as the case may
be).
|
|
4.3
|
Penalties
and interest
|
The
Company has
not
within
the past seven years paid or become liable to pay, and there are no
circumstances by reason of which the
Company
is
likely to become liable to pay, any penalty, fine, surcharge or interest
relating to Taxation whether charged by virtue of the provisions of Schedule
18
to the Finance Xxx 0000, the Taxes Management Xxx 0000, the VATA 1994 or
otherwise.
|
4.4
|
Investigations
|
The
Company has
not
within
the past 12 months received any notice of enquiry or suffered any enquiry,
investigation, audit or visit by HM Revenue and Customs, the Department of
Social Security or any other Taxation Authority, and so far as the Sellers
are
aware no such enquiry, investigation, audit or visit is planned for the next
12
months.
|
4.5
|
Distributions
and other payments
|
|
(a)
|
Full
and accurate particulars of each repayment or agreement to repay,
redemption or agreement to redeem or purchase or agreement to purchase
any
shares of any class of its issued share capital made, effected or
entered
into by the Company at any time after 6 April 1965, and of each grant
of
an option by the Company at any time after 6 April 1965 under which
it may
become liable to purchase any shares of any class of its issued share
capital, are set out in the Disclosure
Letter.
|
|
(b)
|
The
Company
has adequate records to identify any and all repayments, redemptions
or
purchases of its share capital (and agreements for the same), any
and all
grants of options to purchase its share capital, any and all
capitalisations in the form of shares or debentures of any profits
or
reserves (and agreements for the same) and any and all issues of
any share
capital other than for the receipt of new
consideration.
|
*
* * Confidential Treatment
32
|
(c)
|
The
Company has
not
at
any time after 6 April 1965 capitalised or agreed to capitalise in
the
form of shares or debentures any profits or reserves of any class
or
description or otherwise issued or agreed to issue any share capital
other
than for the receipt of new consideration (within the meaning of
Part VI
of the Taxes Act 1988) or passed or agreed to pass any resolution
to do
so.
|
|
(d)
|
No
securities (within the meaning of Part VI of the Taxes Act 1988)
issued by
the
Company
and remaining in issue at the date of this agreement were issued
in
circumstances such that any interest or other distribution out of
assets
in respect thereof falls to be treated as a distribution under section
209(2)(d), or (e) of the Taxes Xxx 0000, nor has the
Company
agreed to issue securities (within that meaning) in such
circumstances.
|
|
(e)
|
All
rents, annual payments, expenses and other sums of an income nature
paid
or payable by the
Company
since the Accounts Date or which the
Company
is
under an obligation to pay in the future are wholly allowable as
deductions or charges in computing income for the purposes of corporation
tax.
|
|
(f)
|
All
interest, discounts and premiums payable by the
Company
in
respect of its loan relationships (within the meaning of Chapter
II of
Part IV of the Finance Act 1996) are capable of being brought into
account
by the Company as a debit for the purposes of that Chapter as and
to the
extent that they are from time to time recognised in the Company's
accounts (assuming that the accounting policies and methods adopted
for
the purpose of the Accounts continue to be so
adopted).
|
|
(g)
|
The
Company has
not
received any capital distribution to which the provisions of section
189
of the TCGA 1992 could apply.
|
|
(h)
|
The
Company does
not have
any obligation to issue funding bonds (within the meaning of section
582
of the Taxes Act 1988) in respect of any liability to pay interest
on any
debt.
|
|
4.6
|
Capital
allowances - general
|
|
(a)
|
No
balancing charge under the Capital Allowances Act 2001 (or any other
legislation relating to any capital allowances) would be made on
the
Company
on
the disposal of any pool of assets (that is to say all those assets
expenditure relating to which would be taken into account in computing
whether a balancing charge would arise on a disposal of any of those
assets) or of any asset not in such a pool, on the assumption that
such
disposal is made for a consideration equal to the book value shown
in or
adopted for the purpose of the Accounts for the assets in the pool
or (as
the case may be) for the asset.
|
|
(b)
|
No
event has occurred since the Accounts Date otherwise than in the
ordinary
course of business by reason of which any balancing charge may fall
to be
made against or any disposal value may fall to be brought into account
by
the
Company
under the Capital Allowances Act 2001 (or any other legislation relating
to any capital allowances) or the Company may be treated as receiving
an
amount of income pursuant to Schedule 10 to the Finance Xxx
0000.
|
|
(c)
|
The
Company has
not
made any claim for capital allowances in respect of any asset which
is
leased to or from or hired to or from the
Company
and no election affecting the
Company
has been made or agreed to be made under section 53 or section 55
of the
Capital Xxxxxxxxxx Xxx 0000 or section 177 or section 183 of the
Capital
Allowances Act 2001 in respect of any such
asset.
|
*
* * Confidential Treatment
33
|
(d)
|
The
Company is
not
a
lessee under a lease to which the provisions of Schedule 12 to the
Finance
Xxx 0000 apply or could apply.
|
|
(e)
|
The
Company does
not own or lease
a
long-life asset (within the meaning of section 91 of the Capital
Allowances Act 2001) in respect of which any claim for capital allowances
would be subject to the provisions of section 92 or section 101 to
section
104 of the Capital Allowances Xxx
0000.
|
|
(f)
|
None
of the assets, expenditure on which has qualified for a capital allowance
under Part I of the Capital Xxxxxxxxxx Xxx 0000 or Part 3 of the
Capital Allowances Xxx 0000, has at any time since that expenditure
was
incurred been used otherwise than as an industrial building or
structure.
|
|
(g)
|
The
Company has
not
claimed any research and development tax relief or research and
development tax credit under the Finance Xxx 0000 or the Finance
Xxx 0000
(or any other legislation relating to reliefs or credits for research
and
development).
|
|
4.7
|
Capital
allowances - short-life
assets
|
The
Company has
not
made any
election under section 37 of the Capital Xxxxxxxxxx Xxx 0000 or section 83
of
the Capital Allowances Act 2001 nor is taken to have made such an election
under
section 37(8)(c) of the Capital Xxxxxxxxxx Xxx 0000 or section 89(4) of the
Capital Allowances Xxx 0000.
|
4.8
|
Capital
gains - acquisition costs
|
The
book
value shown in or adopted for the purpose of the Accounts as the value of each
of the assets of the
Company
on the
disposal of which a chargeable gain or allowable loss could arise does not
exceed the amount which on a disposal of such asset at the date of this
agreement would be deductible under section 38 of the TCGA 1992.
|
4.9
|
Claims
for rollover and hold-over of capital
gains
|
Full
and
accurate particulars of or, in the case of a document, a copy of all claims
and
elections made (or assumed in the Accounts to have been or to be made) under
section 23, section 152 to section 158 (including as those sections are modified
on the application of section 179B and Schedule 7AB), section 161, section
162,
section 165 or section 247 to section 248 of the TCGA 1992 (indicating which
claims are provisional) insofar as they could affect the chargeable gain or
allowable loss which would arise in the event of a disposal after the Accounts
Date by the
Company
of any
of its assets are set out in or annexed to the Disclosure Letter, and such
particulars indicate those of such assets (if any) whose disposal would not
give
rise to relief under Schedule 4 to the TCGA 1992.
|
4.10
|
Capital
gains - 1982 rebasing
|
|
(a)
|
No
election under section 35(5) of the TCGA 1992 has been made in relation
to
the
Company,
and the Accounts have been prepared on the basis that no such election
has
been or was to be made.
|
|
(b)
|
The
Disclosure Letter sets out the date of the first disposal (if any)
made by
the
Company
to
which section 35 of the TCGA 1992 applies, and the period during
which an
election under subsection (6) of that section could be made in
relation to the
Company
has not (and will not at Completion have)
expired.
|
*
* * Confidential Treatment
34
|
(c)
|
The
Company does
not own nor
has owned any asset on a disposal of which by it paragraph 2 of
Schedule 3 to the TCGA 1992 could
apply.
|
|
4.11
|
Capital
gains - transactions not at arm's
length
|
|
(a)
|
The
Company has
not
disposed of nor acquired any asset in circumstances such that the
provisions of section 17 of the TCGA 1992 could apply to such disposal
or
acquisition nor given or agreed to give any consideration to which
section
128(2)(b) of the TCGA 1992 could
apply.
|
|
(b)
|
The
Company does
not own nor
has owned any shares on a disposal of which section 125(2) or (3)
of the
TCGA 1992 could apply nor has received any asset by way of gift as
mentioned in section 282 of the TCGA
1992.
|
|
4.12
|
Capital
gains - disposal of debts
|
No
chargeable gain will accrue to the
Company
on the
disposal of any debt owed to it.
|
4.13
|
Capital
gains - transactions between connected
persons
|
The
Company is
not
entitled
to any capital loss to which the provisions of section 18(3) of the TCGA 1992
are applicable.
|
4.14
|
Capital
losses - restriction on allowable
losses
|
|
No
capital loss has occurred to the Company in disqualifying circumstances
within the meaning of section 8(2)(b) of the TCGA
1992.
|
|
4.15
|
Intangible
assets - general
|
|
(a)
|
In
this paragraph and paragraph 4.16, references to intangible
fixed assets
mean intangible fixed assets and goodwill within the meaning of Schedule
29 to the Finance Xxx 0000 and to which the provisions of that Schedule
apply and references to an intangible
fixed asset
shall be construed accordingly.
|
|
(b)
|
Full
and accurate particulars are set out in the Disclosure Letter of
the
amount of expenditure on each of the intangible fixed assets of the
Company and of the basis on which any debit relating to that expenditure
has been taken into account in the Accounts or, in relation to expenditure
incurred since the Accounts Date, will be available to the Company.
No circumstances have arisen since the Accounts Date by reason of
which
any such basis might change.
|
|
(c)
|
The
Company does
not own
an
asset which has ceased to be a chargeable intangible asset since
the
Accounts Date in the circumstances described in paragraph 108 of
Schedule
29 to the Finance Xxx 0000 and has not since the Accounts Date realised
or
acquired an intangible fixed asset for the purposes of Schedule 29
of the
Finance Xxx 0000. No circumstances have arisen since the Accounts
Date
which have required, or will require, a credit to be brought into
account
by the
Company
on
a revaluation of an intangible fixed
asset.
|
*
* * Confidential Treatment
35
|
4.16
|
Intangible
assets - claims for roll-over relief
etc.
|
No
claims
or elections have been made under Part 7 of Schedule 29 to the Finance Xxx
0000
in respect of any intangible fixed asset of the
Company
or under
paragraph 56 of Schedule 29 to the Finance Xxx 0000 by the
Company.
|
4.17
|
Employees
- compensation for loss of
office
|
The
Company is
not
under an
obligation to pay, nor
has
it
since
the Accounts Date paid or agreed to pay, any compensation for loss of office
or
any gratuitous payment not deductible in computing its income for the purposes
of corporation tax.
|
4.18
|
Employees
- give-as-you-earn
|
The
Company does
not
participate
in a scheme to which section 713 of ITEPA 2003 applies.
|
4.19
|
Employees
- pension contributions
|
Since
the
Accounts Date the Company has not paid a contribution under a registered pension
scheme for which it would not obtain relief under section 196 of the Finance
Xxx
0000 and, if a contribution to a registered pension scheme has been paid since
the Accounts Date, section 196A of the Finance Xxx 0000 does not apply to
restrict the extent to which the contribution attracts relief.
|
4.20
|
Close
companies
|
The
Company is
not
nor has at
any
time within the last seven years been a close company as defined in section
414
of the Taxes Xxx 0000.
|
4.21
|
Group
relief
|
|
(a)
|
Full
and accurate particulars of, or a copy of, each written agreement
that
the
Company
has within the last seven years entered into for the claim or surrender
of
group relief under the provisions of section 402 to section 413 of
the
Taxes Xxx 0000, of advance corporation tax under the provisions of
section
240 of or Schedule 13A to the Taxes Xxx 0000 or of a tax refund under
section 102 of the Finance Xxx 0000 are set out in or annexed to
the
Disclosure Letter.
|
|
(b)
|
Except
as expressly and fully provided for in the Accounts the
Company is
not and will not
be
under any obligation to make
nor has
any entitlement to receive in respect of any period ending on or
before
the Accounts Date any payment for group relief (as defined in section
402(6) of the Taxes Act 1988), any payment for the surrender of the
benefit of any amount of advance corporation tax, any repayment of
such a
payment or any payment for the surrender of a tax refund under section
102
of the Finance Xxx 0000.
|
|
4.22
|
Groups
of companies - general
|
The
Company is
not
nor has it
within
the last seven years been a member of a group of companies as defined in section
170 of the TCGA 1992 or Part 8 of Schedule 29 to the Finance Xxx
0000.
*
* * Confidential Treatment
36
|
4.23
|
Trading
losses and unrelieved surplus
ACT
|
|
(a)
|
The
amount of trading losses available to the Company
for carry forward has been agreed with HM Revenue and Customs and
will not
be less than £0. Nothing has been done which might cause the disallowance
of the carry forward of such losses under section 768 of the Taxes
Act 1988 and no claim under the provisions of section 393A of the
Taxes Act 1988 has been made for carry back of the
losses.
|
|
(b)
|
The
amount of unrelieved surplus advance corporation tax (unrelieved
surplus ACT)
arising before 6 April 1999 available to be set against the Company's
corporation tax liabilities for periods beginning on or after Completion
has been agreed with HM Revenue and Customs and will not be less
than £0.
Nothing has been done which might cause the unavailability of such
unrelieved surplus ACT under the provisions of section 245, section
245A
or section 245B of the Taxes Xxx 0000 or paragraphs 16 to 18 of the
Corporation Tax (Treatment of Unrelieved Surplus Advance Corporation
Tax)
Regulations 1999 (the ACT
Regulations),
none of such unrelieved surplus ACT was attributable to a surrender
under
section 240 of the Taxes Act 1988 and no surplus shadow advance
corporation tax has arisen in any accounting period which could be
or has
been allocated to the Company under paragraph 13 of the ACT Regulations.
The
Company is
not
the subject of a notification under paragraph 5(3) of the ACT
Regulations.
|
|
4.24
|
Premiums
and sale and lease back of
land
|
The
Company has
not
entered
into any transaction to which the provisions of section 34, section 35, section
36, section 43A to section 43G or section 780 of the Taxes Act 1988 have
been or could be applied.
|
4.25
|
Residence
|
|
(a)
|
The
Company
is
and has throughout the past seven years been resident in the United
Kingdom for corporation tax purposes and is not and has not been
treated
as resident in any other jurisdiction for any tax purpose. The
Company has
not nor has had
a branch, agency or permanent establishment outside the United
Kingdom.
|
|
(b)
|
The
Company is
not nor has within
the past seven years been a dual-resident company within the meaning
of
section 404(4) of the Taxes Act 1988 and the
Company has
not
been involved in any transaction to which section 404 of the Taxes
Xxx
0000 or any other provision (including any exclusion from a provision)
relating to dual-resident investing companies (as defined in that
section)
could apply.
|
|
4.26
|
Treasury
consent
|
The
Company has
not
carried
out or caused or permitted to be carried out any of the transactions
(i) specified at the relevant time in section 765(1) of the Taxes
Act 1988 otherwise than with the prior consent of HM Treasury or
(ii) specified at the relevant time in section 765A of the Taxes Act 1988
without having duly provided the required information to HM Revenue and Customs.
Full and accurate particulars are set out in the Disclosure Letter of any and
all transactions specified at the relevant time in section 765(1) of the Taxes
Act 1988 and carried out or caused or permitted to be carried out by the Company
with the special consent, as opposed to general consent, of HM
Treasury.
*
* * Confidential Treatment
37
|
4.27
|
Company
migration without Treasury
consent
|
|
(a)
|
The
Company has
not
ceased to be resident in the United Kingdom for any tax purpose other
than
in pursuance of a consent from HM Treasury under section 765 of the
Taxes
Act 1988 without previously satisfying the requirements of section
130(2) and (3) of the Finance Xxx 0000 (and full and accurate
particulars of the satisfaction of those requirements in relation
to any
and all cessations of residence to which they are applicable are
set out
in the Disclosure Letter). There are no circumstances by reason of
which
the
Company
could be liable to a penalty under section 131 of the Finance
Xxx 0000 or be presumed by virtue of subsection (4) of that
section to be so liable.
|
|
(b)
|
No
company (not being the
Company)
has ceased or will cease to be resident in the United Kingdom for
any tax
purpose in circumstances such that a notice might be served on
the
Company
under section 132 of the Finance Xxx 0000 by virtue of the
relationship (as specified in paragraph (a) or (b) of
subsection (3) of that section) of the
Company
with that company on or at any time prior to
Completion.
|
|
(c)
|
The
Company is
not nor will become
liable to tax under section 190 of the TCGA 1992 in respect of a
disposal
occurring on or before the date of this
agreement.
|
|
(d)
|
The
Company is
not nor will become
liable to tax under Schedule 28 to the Finance Xxx 0000 in respect
of any
amount of unpaid corporation tax of a non-UK resident
company.
|
|
4.28
|
CFCs
|
|
(a)
|
The
Company has
not nor
in
the past seven years has
had
any interest in a controlled foreign company (as defined in Chapter
IV of
Part XVII of the Taxes Act 1988) or any material interest in an offshore
fund (as defined in section 759 of the Taxes Act
1988).
|
|
(b)
|
No
claim or election affecting the
Company
has been made (or assumed in the Accounts to be made) under section
140,
section 140C or section 187 of the TCGA 1992 or paragraph 86, 87
or 109 of
Schedule 29 to the Finance Xxx
0000.
|
|
4.29
|
Gains
accruing to non-resident companies or
trusts
|
There
has
not accrued any gain in respect of which the
Company
may be
liable to corporation tax by virtue of the provisions of section 13 or section
87 of the TCGA 1992.
|
4.30
|
Unremittable
overseas income and/or
gains
|
The
Company has
neither
received nor become entitled to any income which is unremittable "overseas
income" within the meaning of section 584 of the Taxes Xxx 0000, no gain
has accrued to the
Company
to which
the provisions of section 279 of the TCGA 1992 could apply and the
Company has
not
made any
transfer to which section 723 of the Taxes Xxx 0000 could apply.
|
4.31
|
Agency
for non-residents
|
The
Company has
not
been nor is assessable
to tax under section 78 of the Taxes Management Act 1970 as modified and applied
for stamp duty reserve tax, section 126 of and Schedule 23 to the Finance Xxx
0000, section 150 of the Finance Xxx 0000 or section 42A of the Taxes Xxx
0000.
*
* * Confidential Treatment
38
|
4.32
|
European
Economic Interest Grouping
|
The
Company is
not
and will not
be
subject to any tax liability or liable as agent for others as a result of being
at or prior to the date of this agreement a member of a European Economic
Interest Grouping (as defined in section 510A of the Taxes Act
1988).
|
4.33
|
Secondary
liability
|
The
Company is
not
liable
to pay, reimburse or indemnify any person (including a Taxation Authority)
an
amount in respect of a tax liability (other than in respect of VAT) which is
the
primary liability of any other person and which arose as a result of a
transaction, event, act or omission occurring on or before Completion (including
those deemed to have occurred on or before Completion) or by reference to any
profits earned on or before Completion.
|
4.34
|
Tax
avoidance and clearances
|
|
(a)
|
The
Company has
not
been a party to or otherwise involved in any transaction to which
any of
the following provisions could
apply:
|
section
24 of the Finance (No.2) Xxx 0000;
section
51 of the Finance Xxx 0000;
section
420 of the ITEPA 2003;
paragraph
24 of Schedule 26 to the Finance Xxx 0000;
sections
91A-91G of the Finance Xxx 0000;
paragraph
13 of Schedule 9 to the Finance Xxx 0000;
section
29 to section 34 of the TCGA 1992;
sections
184A-184I of the TCGA 1992;
section
116 or section 118 of the Taxes Xxx 0000;
section
399 of the Taxes Xxx 0000;
section
730 to section 746 or section 774 to section 787 of the Taxes Xxx
0000;
section
801A of the Taxes Xxx 0000; and
Schedule
23A of the Taxes Xxx 0000.
|
(b)
|
The
Company has
not
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 HM Revenue and Customs clearances have been obtained after disclosure
of all material facts:
|
section
139 of the TCGA 1992;
section
135 or section 136 of the TCGA 1992;
section
140A or section 140C of the TCGA 1992;
*
* * Confidential Treatment
39
section
213 to section 218 of the Taxes Xxx 0000 and section 192 of the TCGA
1992;
section
219 of the Taxes Xxx 0000;
section
703 of the Taxes Xxx 0000; and
section
776 of the Taxes Xxx 0000.
|
(c)
|
Since
17 March 2004, the Company has not entered into any "notifiable
arrangements" as defined in sections 306 and 307 of the Finance Xxx
0000
nor is or has the Company been a "promoter" in respect of any "notifiable
proposal" or "notifiable arrangements" as such terms are defined
in
section 306 of the Finance Xxx
0000.
|
|
4.35
|
Transactions
between persons under common
control
|
|
(a)
|
No
transaction or arrangement involving the
Company
has taken place or is in existence which is such that any of the
provisions of section 770A of or Schedule 28AA to the Taxes Xxx 0000
or Part 12 of Schedule 29 to the Finance Xxx 0000 has been or could
be
applied to it.
|
|
(b)
|
Full
and accurate particulars of each election made by the Company pursuant
to
paragraph 5B(3) of Schedule 28AA to the Taxes Xxx 0000 are set out
in the
Disclosure Letter.
|
|
(c)
|
No
transfer pricing notice has been given by HM Revenue and Customs
under
paragraph 5C of Schedule 28AA to the Taxes Xxx 0000 in respect of
the
Company, and there are no circumstances by reason of which such a
transfer
pricing notice could be given.
|
|
(d)
|
Full
and accurate particulars are set out in the Disclosure Letter of
any and
all written agreements pursuant to section 85(1) of the Finance Xxx
0000
in respect of any matters set out in section 85(2) of the Finance
Xxx 0000
to which the
Company
is
subject and the
Company has
not submitted and will not
before Completion submit to HM Revenue and Customs a company tax
return
otherwise than in accordance with the terms of any such
agreement.
|
|
4.36
|
Depreciatory
transactions
|
The
Company has
not
been a
party to any transaction to which the provisions of section 176 or section
177
of the TCGA 1992 have been or could be applied.
|
4.37
|
Reconstruction
of transactions
|
The
Company has
not
been
involved in any transaction or series of transactions which, or any part of
which, may for any tax purpose be disregarded or reconstructed by reason of
any
motive to avoid, reduce or delay a possible liability to Taxation.
|
4.38
|
Pension
scheme refunds
|
Since
the
Accounts Date no payment has been made to the
Company
to which
section 601 of the Taxes Xxx 0000 applies.
|
4.39
|
Stamp
duty, SDLT and stamp duty reserve
tax
|
|
(a)
|
All
documents in the enforcement of which the
Company
may be interested have been duly
stamped.
|
*
* * Confidential Treatment
40
|
(b)
|
No
charge to stamp duty (or interest or penalties relating thereto)
will
arise in the
Company
as
a result of a withdrawal of relief from stamp duty, previously granted
under any of section 42 of the Finance Xxx 0000, section 11 of the
Finance
Act (Northern Ireland) 1954 or section 151 of the Finance Xxx 0000
on the
transfer (including by grant or surrender) of an estate or interest
in
land or under section 76 of the Finance Xxx 0000, by virtue or as
a
consequence of the entering into or performance of this agreement
or any
event since the Accounts Date.
|
|
(c)
|
Full
and accurate particulars are set out in the Disclosure Letter of
all
transfers (whether by grant, surrender or otherwise) which have been,
or
will before Completion be, made after 23 April 2002 to the
Company of estates or interests in or over land in the United Kingdom
which were made free from stamp duty by reason of any of section
42 of the
Finance Xxx 0000, section 11 of the Finance Act (Northern Ireland)
1954
and section 151 of the Finance Xxx 0000 or were made at a reduced
rate of
stamp duty under section 76 of the Finance Xxx 0000. The
Company holds
does not hold,
nor
will at Completion hold, an estate or interest in land derived from
an
estate or interest in or over land in the United Kingdom which was
transferred free from, or, as the case may be, at a reduced rate
of, stamp
duty by reason of any of those provisions after 23 April
2002.
|
|
(d)
|
The
Company has
not
since the Accounts Date incurred any liability to or been accountable
for
any stamp duty reserve tax and there has been no conditional agreement
within section 87(1) of the Finance Xxx 0000 which could lead to
the
Company
incurring such a liability or becoming so
accountable.
|
|
(e)
|
The
Disclosure Letter contains details of all land transactions (as defined
in
section 43 of the Finance Act 2003) entered into by the Company including
copies of the land transaction returns and details of the computation
of
SDLT paid or payable in respect of such transactions. All SDLT payable
by
the Company has been paid within the period prescribed by law, all
land
transaction returns have been correctly completed, are true and accurate
and not the subject of any dispute with or enquiry from any Taxation
Authority.
|
|
4.40
|
Stamp
duty - depositary receipts and clearance
services
|
The
Company is
not
nor has been
a
person falling within subsection (6), (7) or (8) of section 67 or of
section 70 of the Finance Xxx 0000, and the
Company has
not
given
nor become obliged to give any notification under section 68 or section 71
of
the Finance Xxx 0000 or incurred any liability to stamp duty reserve tax
under section 93 to section 97 of the Finance Xxx 0000.
|
4.41
|
Value
Added Tax - general
|
|
(a)
|
The
Company
is
duly registered for the purposes of VAT with quarterly prescribed
accounting periods and no such registration is pursuant to paragraph
2 of
Schedule 1 to the VATA 1994 or subject to any conditions imposed
by or
agreed with HM Revenue and Customs. The
Company is
not
(nor are there any circumstances by virtue of which the Company may
become) under a duty to make monthly payments on account under the
Value
Added Tax (Payments on Account) Order
1993.
|
|
(b)
|
The
Company
has complied with all statutory provisions, rules, regulations, orders
and
directions concerning VAT including the making on time of accurate
returns
and payments and the proper maintenance and preservation of records
and
the
Company has
not
been given any penalty liability notice within section 64 of the
VATA
1994, any surcharge liability notice within section 59 or section
59A of
that Act or any written warning within section 76(2) of that
Act.
|
*
* * Confidential Treatment
41
|
(c)
|
The
Company is
not nor has been
treated for VAT purposes as a member of any group of companies. There
has
been no transfer of a business as a going concern in respect of which
the
Company
could become, or has at any time since the Accounts Date been, liable
under section 44 of the VATA 1994 nor any supply of goods or services
by
the
Company
in
respect of which section 43(1) of the VATA 1994 is disapplied by
subsection (2A) of that section. The Company is not of such a description
that section 43(1AA) of the VATA 1994 has been, or could be, applied
to a
supply by or to the representative member. No application under section
43B(1) or section 43B(2) of the VATA 1994 involving the
Company
has been refused by HM Revenue and Customs under section 43B(5) of
the
VATA 1994 for the protection of the revenue. No direction has been
given
under paragraph 1 of Schedule 9A to the VATA 1994 either to
the
Company
or
in circumstances where the
Company
may be liable for any VAT assessed as a consequence of the issue
of that
direction.
|
|
(d)
|
The
Company is
not nor was partially
exempt in its current or preceding VAT year and there are no circumstances
by reason of which the
Company
might not be entitled to credit for all VAT chargeable on supplies
received and imports and acquisitions made (or agreed or deemed to
be
received or made) by it since the beginning of its earliest VAT year
to
include a period since the Accounts Date. There are no circumstances
by
reason of which either regulation 107 or 108 of the Value Added Tax
Regulations 1995 might apply (or have since the Accounts Date applied)
to
the
Company.
|
|
(e)
|
The
Company has
not
at
any time been required to give security under paragraph 4 of
Schedule 11 to the VATA 1994.
|
|
(f)
|
Full
and accurate particulars of or, in the case of a document, a copy
of all
elections to waive exemption made or agreed to be made under
Schedule 10 to the VATA 1994 by (i) the
Company
or
(ii) any person who is a relevant associate (as defined in
paragraph 3(7) of that Schedule) in relation to the
Company
are set out in or annexed to the Disclosure Letter. In respect of
each
election so made:
|
|
(i)
|
all
things necessary for the election to have effect have been done and
in
particular any necessary notification and information has been duly
given
under paragraph 3(6) of Schedule 10 to the VATA 1994 and any
necessary permission under paragraph 3(9) of that Schedule has been
properly obtained;
|
|
(ii)
|
a
copy of the notification, of any permission and of any other
correspondence, and notes of conversations, with HM Revenue and Customs
in
connection with the election is annexed to the Disclosure Letter;
and
|
|
(iii)
|
the
land in relation to which the election has effect is not greater
than that
stated in the notification of the
election,
|
and
in no
case has the
Company
charged
VAT, whether on rents or otherwise, which is not properly chargeable because
it
has not made an election to waive exemption having effect in relation to the
relevant supply.
|
(g)
|
The
Company is
not
bound nor
has
agreed to become bound by any lease, tenancy or licence in the case
of
which, under its terms or by statute, the
Company
is
or could become liable to pay an amount in respect of VAT chargeable
as a
result of the making of an election to waive exemption under
Schedule 10 to the VATA 1994.
|
|
(h)
|
There
are no past or present circumstances by reason of which the
Company
is
or could become liable to VAT under paragraph 1 or paragraph 5 of
Schedule 10 to the VATA 1994 (change of use, developers) or under the
Value Added Tax (Self-supply of Construction Services) Order
1989.
|
*
* * Confidential Treatment
42
|
(i)
|
No
act or transaction has been effected in consequence of which the
Company
is
or may be held liable for any VAT under section 47, section 48 or
section
55 of the VATA 1994 (agents etc., tax representatives and customer
accounting on supplies of gold) or section 29 of the VATA 1994
(self-billing), and no direction as to valuation affecting the
Company
has been given under paragraph 1, 1A or 2 of Schedule 6 or paragraph
1 of
Schedule 7 to the VATA 1994.
|
|
4.42
|
Value
Added Tax - capital goods
scheme
|
In
the
case of each capital item (if any) within the meaning of Part XV of the Value
Added Tax Regulations 1995 (Part
XV)
in
relation to which a liability under Part XV has arisen or could in future arise
on the
Company,
the
Disclosure Letter sets out:
|
(i)
|
full
and accurate particulars of past adjustments under Part XV;
and
|
|
(ii)
|
full
and accurate particulars of all matters to date which could be relevant
in
determining future adjustments under Part
XV.
|
4.43 Value
Added Tax - interest in the case of official error and repayment
supplement
Full
and
accurate particulars are set out in the Disclosure Letter of all claims which
have been or could be made by the
Company
under
section 78 or section 79 of the VATA 1994. There are no circumstances by virtue
of which an assessment under section 78A of the VATA 1994 has been or could
be
made on the
Company.
|
4.44
|
Value
Added Tax - bad debt
relief
|
Full
and
accurate particulars are set out in the Disclosure Letter of all claims which
have been or could have been made under section 36 of the VATA 1994 and there
are no existing circumstances by virtue of which any refund of VAT obtained
or
claimed may be required to be repaid. There are no circumstances by virtue
of
which there could be a clawback of input tax from the
Company
under
section 36(4A) or section 26A of the VATA 1994.
|
4.45
|
Value
Added Tax - disclosure of avoidance
schemes
|
The
Company has not had a requirement to make a disclosure under Schedule 11A of
the
VATA 1994.
|
4.46
|
Capital
Transfer Tax and Inheritance
Tax
|
|
(a)
|
No
transfer of value (as defined by the Inheritance Tax Act 1984) or
disposal
by way of gift (within the meaning of section 102 of the Finance
Act 1986) has at any time been made by or to the
Company,
and there are no other circumstances by reason of which any liability
in
respect of capital transfer tax or inheritance tax has arisen or
could
arise on the
Company
by
way of HM Revenue and Customs charge or
otherwise.
|
|
(b)
|
No
HM Revenue and Customs charge (as defined in section 237 of the
Inheritance Tax Act 1984) is outstanding over any asset of the
Company
or
in relation to any shares in the capital of the
Company
and no circumstances exist which could lead to any such charge arising
in
the future.
|
|
(c)
|
There
are not in existence any circumstances whereby any such power as
is
mentioned in section 212(1) of the Inheritance Tax Act 1984 could
be
exercised in relation to any of the Shares or any shares, securities
or
other assets of the
Company.
|
|
5.
|
PROPERTIES
|
*
* * Confidential Treatment
43
|
5.1
|
Title
|
|
(a)
|
The
Properties are the only properties owned, used or occupied by the
Company
and all deeds and documents necessary to prove interest in each Property
are in the possession of the
Company.
|
|
(b)
|
The
Company
is
in exclusive occupation of each
Property.
|
|
5.2
|
Disputes
|
There
is
no dispute regarding any of the boundaries, easements, covenants or other
matters relating to any Property or its access or use.
|
5.3
|
Planning
|
|
(a)
|
The
present use of each Property is that set out in schedule
3,
that use is the lawful use for the purposes of the Planning Acts
and the
permissions authorising that use are unconditional and
permanent.
|
|
(b)
|
So
far as the Sellers are aware, no breach of the Planning Acts or of
any
bye-law, building regulation or other relevant legislation has been
committed in relation to any Property and no notice has been issued
or
injunction granted or applied for in respect of any breach or alleged
breach of planning control or of any bye-law, building regulation
or other
relevant legislation.
|
|
(c)
|
Neither
the
Sellers nor the
Company
nor any person on behalf of any of them has
made:
|
|
(i)
|
any
application for planning permission in respect of any Property which
has
yet to be determined by the local planning authority;
or
|
|
(ii)
|
any
appeal in respect of any planning permission, or the refusal or deemed
refusal of any planning application, in respect of any Property which
has
yet to be determined by the Secretary of
State.
|
|
5.4
|
Notices,
orders and proposals
|
So
far as
the Sellers are aware, the
Company is not aware of any
notice or order affecting any Property from any government department, any
authority or any third party.
|
5.5
|
Repair
|
|
(a)
|
All
buildings and other erections on each Property are in good and substantial
repair and condition and are in such condition and state of repair
as to
be substantially fit for the purpose for which they are used at
present.
|
|
(b)
|
Copies
of all structural surveys, site surveys, engineers' reports and
architects' reports relating to any Property or any structure on
a
Property which have been commissioned by, are in the possession of
or are
under the control of any
Seller or the
Company
are annexed to the Disclosure
Letter.
|
|
(c)
|
So
far as the Sellers
are
aware, no substance which is or may reasonably be suspected to be
unstable, inadequate, dangerous, combustible or otherwise unsuitable
for
building purposes or for the type of building or conditions for which
it
was used, which is the subject of statutory control or which does
not
conform to British Standards has been used in the construction of,
or any
alteration or addition to, any building or other erection on any
Property.
|
*
* * Confidential Treatment
44
|
(d)
|
Full
and accurate particulars of or, in the case of a document, a copy
of every
agreement, warranty or guarantee in relation to the construction
of any
building or other major work on any Property (including any major
alteration of, or addition to, any building on any Property) which
is
being undertaken or which was completed within the last six years
are set
out in or annexed to the Disclosure Letter, and no defect or other
matter
has arisen which would give rise to any claim by any
Seller or the
Company under
any such agreement, warranty or
guarantee.
|
|
5.6
|
Leases
|
|
(a)
|
So
far as the Sellers are aware, in relation to each Property, each
person in
whom any superior interest was, at the relevant time, vested had
at the
date of the grant of the lease under which the Company
holds that Property or at the date of the grant of each superior
lease (as
the case may be), good title to grant that lease or such superior
lease
(as the case may be), and all consents necessary to the grant of
that
lease and of each such superior lease were
obtained.
|
|
(b)
|
No
Lease has been varied nor have any licences or consents been issued
under
any Lease and no collateral assurances or undertakings have been
entered
into with any relevant reversioner or any third party (including
agreeing
to do so).
|
|
(c)
|
There
is no major item of expenditure already incurred by the landlord
of any
Property or expected to be incurred by him within the next 12 months
which
is recoverable in whole or in part from the
Company.
|
|
(d)
|
No
notice has been given or received under any Lease and there is no
subsisting dispute between the
Company
and the reversioner in relation to any Lease or other matters relating
to
any Property or its access or use.
|
|
5.7
|
Occupation
leases
|
|
(a)
|
Full
and accurate particulars of or, in the case of a document, a copy
of every
lease, tenancy, licence and agreement for occupation or use to which
any
Property is subject are set out in or annexed to the Disclosure
Letter.
|
|
(b)
|
All
consents necessary for the grant of every Lease have been
obtained.
|
|
(c)
|
No
Lease has been surrendered, terminated, varied, no licences or consents
have been issued under any Lease and no collateral assurance or
undertaking has been entered into with any relevant tenant or any
third
party (including agreeing to do
so).
|
|
(d)
|
There
has been no assignment or subletting of any part of the
Property.
|
|
(e)
|
No
reverse premiums, incentives or inducements have been agreed or are
payable by the Company in connection with any of the Leases or
Properties.
|
|
(f)
|
There
is no outstanding breach under any
Lease.
|
|
(g)
|
So
far as the Sellers are aware, no party to any Lease has exercised,
or is
contemplating to exercise, any early break or termination
rights.
|
|
6.
|
*
* * Confidential Treatment
45
EMPLOYEES,
PENSIONS AND INCENTIVES
|
6.1
|
Interpretation:
Employment
|
In
paragraphs 6.1
to
6.5
of this
schedule:
Emoluments
Date
means 30
June 2006;
Relevant
Period
means,
unless otherwise expressly provided, the three years ending on the date of
this
agreement;
Representative
Body
means
any association, trade union, works council or any other body or persons
representing any of the workers of the Company;
trade
dispute
and
trade
union
have the
same meanings as in the Trade Union and Labour Relations (Consolidation) Xxx
0000; and
worker
has the
same meaning as in section 230 of the Employment Rights Xxx 0000 but includes
any director and any other officer of the Company whether or not he is a worker
(as so defined),
and
any
reference to a contract
of employment
includes
any other contract as referred to in section 230 of the Employment Rights Xxx
0000 and, in relation to a director or other officer, includes the terms on
which he holds the directorship or other office, and any reference to
employ
or
employment
has a
corresponding meaning.
|
6.2
|
Particulars
disclosed:
Employment
|
|
(a)
|
Full
and accurate particulars of or, in the case of a document, a copy
of the
following are set out in or annexed to the Disclosure
Letter:
|
|
(i)
|
the
names of all the workers of the Company, each person who has accepted
an
offer of employment made by the Company but whose employment has
not yet
started and of each worker who has given, or has been given, notice
of
termination of his employment;
|
|
(ii)
|
the
terms and conditions on which the persons referred to in (i)
above are employed or have been offered employment
including:
|
|
(A)
|
their
emoluments;
|
|
(B)
|
the
rate of their emoluments as at the Emoluments
Date;
|
|
(C)
|
any
arrangement or practice under which any worker may receive, or any
former
worker has during the Relevant Period received, any payment, whether
contractual, customary or discretionary, by reference to his own
performance or the performance of the whole or any part of the business
of
the Company; and
|
|
(D)
|
any
arrangement or practice regarding redundancy payments, whether
contractual, customary or discretionary, above the statutory
payment;
|
|
(iii)
|
each
agreement for the secondment to the Company of any
person;
|
*
* * Confidential Treatment
46
|
(iv)
|
each
agreement for the provision of any consultancy service or the service
of
personnel to the Company;
|
|
(v)
|
each
written employment practice or policy operated in relation to the
Company's workers or any group of them, whether contractual, customary
or
discretionary;
|
|
(vi)
|
each
loan or other financial assistance provided to any worker, or past
or
prospective worker, of the Company which is
outstanding;
|
|
(vii)
|
the
constitution of each Representative Body and a statement of whether
and,
if so, to what extent each Representative Body is recognised, or
has in
the Relevant Period claimed recognition, by the Company for any purpose;
and
|
|
(viii)
|
any
collective agreement, dismissal procedures agreement, union membership
agreement, trade dispute or proceedings before any court or tribunal
under
or by virtue of the provisions of the Trade Union and Labour Relations
(Consolidation) Xxx 0000.
|
|
(b)
|
Except
in respect of reimbursement of out-of-pocket expenses and normal
accruals
of emoluments after the Accounts Date, no sum is owing or promised
to any
worker of the Company or under any agreement referred to in
paragraph 6.2(a).
|
|
(c)
|
Since
the Emoluments Date no change has been made in the rate of the emoluments
of any worker of the Company.
|
|
6.3
|
Workers
|
|
(a)
|
The
Company has complied with its obligations to applicants for employment,
its workers and former workers and all Representative
Bodies.
|
|
(b)
|
On
Completion the Company will not employ or have any obligation to
employ or
have seconded to it any person other than the persons particulars
of whom
are set out in the Disclosure Letter by virtue of
paragraph 6.2(a).
|
|
(c)
|
No
proposal, assurance or commitment by the Company has been communicated
to
any person regarding any change to his terms of employment or working
conditions or regarding the continuance, introduction, increase or
improvement of any benefit or any customary or discretionary arrangement
or practice and no negotiations have commenced for any such
matter.
|
|
(d)
|
All
subsisting contracts of employment and all agreements referred to
in
paragraph 6.2(a)
to
which the Company is a party are terminable by it on three months'
notice
or less without compensation (other than compensation pursuant to
the
Employment Rights Act l996).
|
|
(e)
|
The
Company has no liability to pay compensation for loss of office or
employment or a redundancy payment to any present or former worker
or to
make any payment under any provision of the Employment Rights Xxx
0000 or
any payment for breach of any agreement referred to in
paragraph 6.2(a),
and no such compensation or payment has been paid or made (whether
pursuant to a legal obligation or ex gratia)
by the Company since the Accounts
Date.
|
|
(f)
|
There
is no term of employment for any worker of the Company which provides
that
a change of control of the Company entitles the worker to treat the
change
of control as amounting to a breach of the relevant contract or entitling
him to any payment, additional period of notice or other benefit
whatsoever or entitling him to treat himself as redundant or otherwise
dismissed or released from any
obligation.
|
*
* * Confidential Treatment
47
|
6.4
|
Disputes,
investigations, transfers and collective
redundancies
|
|
(a)
|
No
claim in relation to any of the Company's workers or former workers
has
been made or threatened against the Company or against any person
whom the
Company is or may be liable to compensate or indemnify and, so far
as the
Sellers are aware, there are no circumstances which are likely to
give
rise to any such claim.
|
|
(b)
|
No
enquiry or investigation affecting the Company has been made or threatened
by any governmental, statutory or regulatory authority including
the
Commission for Racial Equality, the Equal Opportunities Commission,
the
Disability Rights Commission, the Office of the Information Commissioner,
the Financial Services Authority or any health and safety enforcement
body
in respect of any act, event, omission or other matter arising out
of or
in connection with:
|
|
(i)
|
any
application for employment by any person;
or
|
|
(ii)
|
the
employment (including terms of employment, working conditions, benefits
and practices) or termination of employment of any
person,
|
and,
so
far as the Sellers are aware, there are no circumstances which may give rise
to
any such enquiry or investigation.
|
(c)
|
There
is not, and during the Relevant Period there has not been, any industrial
action affecting the Company and, so far as the Sellers are aware,
there
are no circumstances which might give rise to any such industrial
action.
|
|
(d)
|
No
worker of the Company is, or has within the Relevant Period been,
involved
in any criminal proceedings relating to the business of the Company
and,
so far as the Sellers are aware, there are no circumstances which
are
likely to give rise to any such
proceedings.
|
|
(e)
|
So
far as the Sellers are aware, there are no circumstances which might
give
rise to the Company becoming a party to any such agreement or becoming
involved in any such dispute or proceedings as is mentioned in
paragraph 6.2(a)(viii).
|
|
(f)
|
During
the Relevant Period the Company has not given notice of any redundancies
to the Secretary of State or started consultations with any Representative
Body under Chapter II of Part IV of the Trade Union and Labour Relations
(Consolidation) Xxx 0000 and the Company has not failed to comply
with any
obligation under that Act.
For the purposes of this subparagraph, Relevant
Period
means the year before the date of this
agreement.
|
|
6.5
|
Employee
Share Plans
|
The
Company has not operated nor has agreed to introduce any incentive arrangement
involving securities or which is securities based in respect of any workers
or
former workers of the Company, including share option plans, long term incentive
plans, restricted share plans, XXXX plans, Share Incentive Plans, phantom plans
or any other arrangement under which share benefits may be provided, and no
other company or entity provides any such plan or arrangement in respect of
the
Company’s workers or former workers.
*
* * Confidential Treatment
48
|
6.6
|
Interpretation:
Pensions
|
In
paragraphs 6.5 to 6.9 of this schedule, words and expressions have the same
meanings as in Part 1 of the Pensions Xxx 0000 and Chapter 1 of Part 4 of the
Finance Xxx 0000 (except as modified in this paragraph) and:
Registered
Pension Scheme
has the
same meaning as in the Finance Xxx 0000;
Employee
has the
same meaning as in section 230 of the Employment Rights Xxx 0000 but includes
any director and any other officer of the Company whether or not he has entered
into or works or worked under a contract of employment;
Employer
Debt Regulations
means
the Occupational Pension Schemes (Employer Debt) Regulations 2005;
Retirement
Benefits
means
benefits payable by reference to reaching, or expecting to reach, retirement
or
a particular age or payable by reason of serious ill-health, incapacity or
death
and any other retirement benefit within the meaning of section 255(5) of the
Pensions Xxx 0000;
Scheme
means
each of the following pension schemes:
(i) *
*
*
(ii) *
*
*
(iii) the
HSBC
Stakeholder Pension Scheme.
Scheme
Documents
means,
in relation to a Scheme, the relevant Scheme Rules, all notices, announcements
and explanatory literature of current effect relating to that Scheme and all
documents relating to the Company's
participation
in and obligations under that Scheme;
Scheme
Rules
means,
in relation to a Scheme, the trust deed and/or rules and any other documents
constituting and governing that Scheme;
stakeholder
pension scheme
has the
meaning given in section 1 of the Welfare Reform and Pensions Xxx
0000.
|
6.7
|
Particulars
disclosed: Pensions
|
|
(a)
|
In
relation to the Scheme, a copy of each of the Scheme Documents is
annexed
to the Disclosure Letter.
|
|
(b)
|
All
information set out in or annexed to the Disclosure Letter (or otherwise
made available to the Purchaser or its professional advisers) in
connection with each Scheme is complete and accurate in all material
respects and not misleading.
|
|
(c)
|
The
Scheme Documents contain full and accurate particulars of all the
benefits
provided by and the terms of that Scheme, including any enhancement
of or
addition to the benefits or terms in respect of any person.
|
*
* * Confidential Treatment
49
|
(d)
|
Except
pursuant to a Scheme the
Company has not
paid, provided or contributed towards any Retirement Benefit. The
Company is
not
under any obligation or commitment (whether or not legally enforceable)
to
pay, provide or contribute towards, any Retirement Benefit for or
in
respect of any present or past Employee (or any spouse, child or
dependant
of any present or past Employee) of the
Company or
of any predecessor in business of the
Company or any other costs or expenses in respect of the provision
of any
Retirement Benefits whether in relation to the Scheme or
otherwise.
|
|
6.8
|
Contribution
and insurance: Pensions
|
|
(a)
|
All
due contributions and expenses in respect of each Scheme have been
paid to
that Scheme (in the case of contributions) or to the person to whom
they
are due (in the case of expenses) on the due dates as required by
the
relevant Scheme Documents, any applicable contract, legislation and
any
applicable code of practice issued by the Pensions Regulator.
|
|
(b)
|
All
lump sum and pension benefits payable in the event of the death of
a
member in service are fully insured, and all benefits which are in
payment
and which are paid up (payment not having commenced) and all contingent
benefits are fully secured, with a reputable insurance company authorised
under the Financial Services and Markets Xxx 0000 with permission
under
Part IV of that Act to effect and carry out contracts of long-term
insurance.
|
|
(c)
|
The
Company is not and has not in the 12 months prior to the date of
this
agreement been an associate of or connected with (within the meaning
of
section 51 of the Pensions Act 2004) any person who is an employer
in
relation to any occupational pension scheme, other than the Schemes
and
any scheme to which section 38 to section 56 of the Pensions Act
2004 do
not apply.
|
|
(d)
|
There
is no contribution notice, financial support direction or restoration
order (as defined in sections 38 to 56 of the Pensions Act 2004)
in force
in which the Company is named. No clearance statement has been issued
by
the Pensions Regulator in the 12 months prior to the date of this
agreement under section 42 or section 46 of the Pensions Xxx 0000
in
relation to which the Company was an applicant, and no such application
is
pending.
|
|
6.9
|
Compliance:
Pensions
|
Each
Scheme has at all times been operated in accordance with the relevant Scheme
Rules and other Scheme Documents, the requirements of HM Revenue & Customs
for Registered Schemes, all relevant codes of practice and all applicable laws.
*
* * Confidential Treatment
50
SCHEDULE
5
WARRANTY
CLAIMS
|
1.
|
Exclusions
|
|
1.2
|
The
Sellers shall not be liable in respect of a Warranty Claim to the
extent
that the matter or circumstance giving rise to that
claim:
|
|
(a)
|
was
taken into account in the Accounts by way of an express and full
provision, a note constituting full and fair disclosure of that matter
or
circumstance or a statement in any report forming part of the Accounts
constituting full and fair disclosure of that matter or circumstance;
or
|
|
(b)
|
is
the subject of a claim under the Tax Deed and the Purchaser receives
a
payment in respect thereof under the Tax
Deed.
|
|
1.3
|
The
Sellers shall not be liable in respect of a Warranty Claim to the
extent
that the relevant liability would not have arisen but
for:
|
|
(a)
|
a
change in legislation announced, or the withdrawal of any extra-statutory
concession previously made by any Taxation Authority, after the date
of
this agreement (whether or not the change or withdrawal purports
to be
effective retrospectively in whole or in part);
or
|
|
(b)
|
a
change after Completion in the accounting policies adopted by the
Company
for the valuation of its assets (other than a change made in order
to
comply with GAAP for the time
being).
|
|
2.
|
De
minimis claims
|
|
2.1
|
Subject
to subparagraph 2.2,
the Sellers shall not be liable in respect of any Warranty Claim
unless
the amount of damages to which the Purchaser would, but for this
subparagraph, be entitled as a result of that Warranty Claim is at
least
£15,000.
|
|
2.2
|
If
more than one Warranty Claim arises from, or is caused by, the same
or
similar matter, matters, circumstance or circumstances and the aggregate
amount of damages to which the Purchaser would be entitled as a result
of
those Warranty Claims is equal to or exceeds the sum specified in
subparagraph 2.1,
subparagraph 2.1
shall not apply to any of those Warranty
Claims.
|
|
3.
|
Threshold
|
The
Sellers shall not be liable in respect of any Warranty Claim unless the amount
of all Warranty Claims when aggregated with the amount of all claims under
the
Tax Deed (including all Warranty Claims and all claims under the Tax Deed which
might have been made but for the previous operation of this paragraph or the
corresponding provision in the Tax Deed) exceeds £100,000, in which case the
Purchaser shall be entitled to all amounts resulting from those claims (and
not
just the excess over that sum).
*
* * Confidential Treatment
51
|
4.
|
Aggregate
limit
|
|
4.1
|
Subject
to subparagraph 4.2,
the maximum aggregate liability of the Sellers in respect of any
and all
Warranty Claims and claims under the Tax Deed shall not exceed the
sum of
£5,000,000.
|
|
4.2
|
The
maximum aggregate liability of the Sellers determined under subparagraph
4.1
shall be increased by:
|
|
(a)
|
any
amount received by any Seller under paragraph 10
of
this schedule; and
|
|
(b)
|
the
amount of any interest payable by any Seller in respect of any payment
not
made when due under this agreement or the Tax
Deed.
|
|
5.
|
Time
limits
|
The
liability of the Sellers in respect of the Warranties shall terminate (but
without prejudice to the rights and obligations of the parties under the Tax
Deed):
|
(a)
|
on
the seventh anniversary of Completion in respect of those Warranted
Statements set out in section 4
(Taxation) of schedule
4
and of any other Warranted Statements so far as they relate to Taxation;
|
|
(b)
|
on
the third anniversary of Completion in respect of those Warranted
Statements set out in section 1.12 (Environmental matters) of Schedule
4
and of any other Warranted Statements so for as they relate to
Environmental matters; and
|
|
(c)
|
on
the second anniversary of Completion in respect of all other Warranted
Statements,
|
except
in
respect of any Warranty Claim of which notice is given to the Sellers or the
Sellers' Solicitors pursuant to clause 9.6
before
the relevant date.
|
6.
|
Waiver
of rights
|
|
6.1
|
Each
Seller agrees with the Purchaser, the Company and each employee of
the
Purchaser or the Company to waive any rights or claims which he may
have
in respect of any misrepresentation, inaccuracy or omission in or
from any
information or advice supplied or given by the Company or such employee
in
connection with the giving of the Warranties and the preparation
of the
Disclosure Letter. The provisions of this
subparagraph:
|
|
(a)
|
may
with the prior written consent of the Purchaser be enforced by the
Company
or any employee of the Purchaser or the Company against the Sellers
under
the Contracts (Rights of Third Parties) Xxx 0000;
and
|
|
(b)
|
may
be varied or terminated by agreement between the Sellers and the
Purchaser
(and the Purchaser may also release or compromise in whole or in
part any
liability in respect of rights or claims contemplated by this
subparagraph) without the consent of the Company or any such
employee.
|
|
6.2
|
If
the Purchaser makes a Warranty Claim, each Sellers agree with the
Purchaser and each of the Purchaser's Advisers to waive any rights
or
claims which he may have to recover a contribution from, or otherwise
against, the Purchaser's Advisers in respect of such claim. This
subparagraph may be enforced by each of the Purchaser's Advisers
against
the Sellers under the Contracts (Rights of Third Parties) Xxx
0000.
|
*
* * Confidential Treatment
52
|
7.
|
Assessment
and payment of damages
|
Any
payment made by the Sellers in respect of a Warranty Claim or under the Tax
Deed
shall, to the extent possible, be deemed to be a reduction in the
Consideration.
|
8.
|
Conduct
of third party claims
|
|
8.1
|
If
a Warranty Claim arises as a result of, or in connection with, a
liability
or alleged liability of the Company to a third party (a Third
Party Claim),
then (without prejudice to the provisions of the Tax Deed in relation
to
any matter which is the subject of a claim under it), until such
time as
any final compromise, agreement, expert determination or non-appealable
decision of a court or tribunal of competent jurisdiction is made
in
respect of the Third Party Claim or the Third Party Claim is otherwise
finally disposed of:
|
|
(a)
|
each
Seller shall make available to the Purchaser and the Company all
such
information as the Purchaser may reasonably request for assessing,
contesting, disputing, defending, compromising or appealing the Third
Party Claim and shall:
|
|
(i)
|
co-operate
in the preparation, review and signing of any witness statements
and
exhibits thereto which the Purchaser may reasonably request;
and
|
|
(ii)
|
if
the Purchaser so requests, attend any relevant proceedings as a witness
to
give evidence and prepare appropriately for such
attendance;
|
|
(b)
|
the
Purchaser shall procure that the Company, to the extent reasonably
practicable, consults with the Sellers in relation to the conduct
of any
dispute, defence, compromise or appeal of the Third Party Claim,
although,
for the avoidance of doubt, the final decision in respect of all
relevant
matters shall rest with the Company save that a Third Party Claim
shall
not be settled or comprised without the consent of the Sellers, such
consent not to be unreasonably withheld or delayed;
and
|
|
(c)
|
the
Purchaser shall, and shall procure that the Company shall, provide
the
Sellers with reasonable information as to the progress of the Third
Party
Claim on request.
|
|
8.2
|
The
covenants in this paragraph 8
may with the prior written consent of the Purchaser be enforced by
the
Company against the Sellers under the Contracts (Rights of Third
Parties)
Xxx 0000. The provisions of this paragraph 8
may be varied or terminated by agreement between the Sellers and
the
Purchaser (and the Purchaser may also release or compromise in whole
or in
part any liability in respect of rights or claims contemplated by
this
paragraph 8)
without the consent of the Company.
|
|
9.
|
Mitigation
|
Nothing
in this agreement shall be deemed to relieve the Purchaser from any common
law
duty to take reasonable steps to mitigate any loss or damage suffered or
incurred by it as a result of any of the Warranted Statements being untrue
or
inaccurate.
*
* * Confidential Treatment
53
|
10.
|
Recovery
from third parties
|
If:
|
(a)
|
any
Seller makes a payment in respect of a Warranty Claim (the amount
of such
payment, to the extent it does not comprise interest on a late payment,
being the Damages
Payment);
|
|
(b)
|
within
2 years of the making of such payment the Company or the Purchaser
receives any sum other than from a Seller which would not have been
received but for the matter or circumstance giving rise to the relevant
Warranty Claim (the Third
Party Sum);
|
|
(c)
|
the
receipt of the Third Party Sum was not taken into account in calculating
the Damages Payment; and
|
|
(d)
|
the
aggregate of the Third Party Sum and the Damages Payment exceeds
the
amount required to compensate the Purchaser or the Company (as the
case
may be) in full for the matter or circumstance which gave rise to the
relevant Warranty Claim (such excess being the Excess
Recovery),
|
the
Purchaser shall, promptly following receipt of the Third Party Sum by it or
the
Company, repay to that Sellers an amount equal to the lower of (i) the Excess
Recovery and (ii) the Damages Payment, after deducting (in either case) all
costs incurred by the Purchaser or the Company in recovering the Third Party
Sum
and any and all Taxation payable by the Purchaser or the Company by virtue
of
its receipt.
*
* * Confidential Treatment
54
SCHEDULE
6
PRE-COMPLETION
|
1.
|
Access
|
Until
Completion the Sellers shall:
|
(a)
|
procure
that the Purchaser its agents and representatives without disruption
to
the business of the Company and acting reasonably are given full
access to
the Properties and to the books and records of the Company during
normal
business hours on any Business Day and on reasonable notice to the
Sellers;
|
|
(b)
|
provide
such information regarding the businesses and affairs of the Company
as
the Purchaser may reasonably require;
and
|
|
(c)
|
not,
and shall procure that the Company shall not, enter into, continue
or
solicit discussions, negotiations or agreements with, or provide
any
information to or otherwise assist, any third party who may be interested
in acquiring the Shares (or any of them) or the whole or any material
part
of the undertaking, business or assets of the
Company.
|
|
2.
|
Conduct
of business
|
Until
Completion each Seller shall procure that, except with the written consent
of
the Purchaser, the Company shall not:
|
(a)
|
incur
any expenditure exceeding £5,000 on capital account;
or
|
|
(b)
|
dispose
of or create any Encumbrance in respect of any part of its assets
except
in the ordinary course of trading;
or
|
|
(c)
|
borrow
any money or make any payments out of or drawings on its bank account(s)
(except routine payments or drawings);
or
|
|
(d)
|
enter
into any unusual or abnormal contract or commitment
or:
|
|
(i)
|
grant
any lease or third party right in respect of any of the Properties
or
transfer or otherwise dispose of any of the Properties;
or
|
|
(ii)
|
make
or prepay any loan; or
|
|
(iii)
|
enter
into any leasing, hire purchase or other agreement or arrangement
for
payment on deferred terms; or
|
|
(iv)
|
fail
to observe and perform any term or condition of, or waive any rights
under, any contract or arrangement;
or
|
|
(v)
|
contravene
any statute, order, regulation or the like;
or
|
|
(vi)
|
do
or omit to do anything which might result in the termination, revocation,
suspension, modification or non-renewal of any licence or consent
held by
it; or
|
*
* * Confidential Treatment
55
|
(vii)
|
grant
any power of attorney; or
|
|
(e)
|
declare,
make or pay any dividend or other distribution or do or allow to
be done
anything which renders its financial position less favourable than
at the
date of this agreement; or
|
|
(f)
|
grant,
issue or redeem any mortgage, charge, debenture or other security
or give
any guarantee or indemnity; or
|
|
(g)
|
make
any change in the terms and conditions of employment of any of its
directors or employees or employ or terminate (except for good cause)
the
employment of any person; or
|
|
(h)
|
make,
or announce to any person any proposal to make, any change or addition
to
any Retirement Benefit (as defined in clause 6.6 of schedule
4)
of or in respect of any of its directors, employees, former directors
or
former employees (or any dependant of any such person) or to the
Scheme
(as defined in that paragraph) other than any change required by
law or
proposed change of which full and accurate particulars are set out
in the
Disclosure Letter; or
|
|
(i)
|
grant
or create, or announce to any person any proposal to grant or create,
any
additional Retirement Benefit (as so defined) or take any action
or allow
any action to be taken in relation to the Scheme (as so defined)
other
than in the ordinary course of administering the Scheme or omit to
take
any action necessary or prudent for the ordinary proper operation
of the
Scheme; or
|
|
(j)
|
permit
any of its insurances to lapse or do anything which would make any
policy
of insurance void or voidable; or
|
|
(k)
|
create,
issue, purchase or redeem any class of share or loan capital;
or
|
|
(l)
|
pass
any resolution of its shareholders or any class of shareholders,
whether
in general meeting or otherwise; or
|
|
(m)
|
form
any subsidiary or acquire shares in any company or participate in,
or
terminate any participation in, any partnership or joint venture;
or
|
|
(n)
|
agree,
conditionally or otherwise, to do any of the foregoing;
or
|
|
(o)
|
in
any other way depart from the ordinary course of its day-to-day
trading.
|
|
3.
|
Avoidance
of change in warranted
position
|
Until
Completion, and except with the written consent of the Purchaser, the Sellers
shall not, and shall procure that the Company shall not, do or omit to do,
or
cause to be done or omitted to be done, any act or thing which would result
(or
be likely to result) in any of the Warranted Statements being untrue or
inaccurate at Completion.
|
4.
|
Right
of termination
|
|
4.1
|
If
before Completion:
|
|
(a)
|
it
comes to the notice of the Purchaser that any of the Warranted Statements
is untrue or inaccurate in a material respect;
or
|
*
* * Confidential Treatment
56
|
(b)
|
any
Seller is in material breach of any obligation on his part under
this
agreement or any other Transaction Document and, where that breach
is
capable of remedy, it is not remedied to the Purchaser's satisfaction;
or
|
|
(c)
|
anything
occurs (except something arising from an act or omission of the Purchaser)
which has, or would be likely to have after Completion, a material
adverse
effect on the financial condition, prospects or business of the Company
(as presently carried on),
|
the
Purchaser may elect not to complete the purchase of the Shares by giving notice
to the Sellers.
|
4.2
|
If
the Purchaser elects, under paragraph 4.1,
not to complete the purchase of the
Shares:
|
|
(a)
|
except
for this paragraph, clauses 1,
12,
13,
15,
16,
17.3,
17.4,
17.5,
17.6,
17.7,
17.8,
17.9,
18,
19
and 20
and the provisions of schedule
11,
all the provisions of this agreement shall lapse and cease to have
effect;
and
|
|
(b)
|
neither
the lapsing of those provisions nor their ceasing to have effect
shall
affect any accrued rights or liabilities of any party in respect
of
damages for non-performance of any obligation under this agreement
falling
due for performance prior to such lapse and
cessation.
|
*
* * Confidential Treatment
57
SCHEDULE
7
COMPLETION
PART
1
SELLERS'
OBLIGATIONS
At
Completion the Sellers shall procure:
|
(a)
|
the
delivery to the Purchaser of:
|
|
(i)
|
duly
executed transfers in favour of the Purchaser or its nominee(s) of
all the
Shares;
|
|
(ii)
|
the
share certificate(s) representing the Shares (or an express indemnity
in a
form satisfactory to the Purchaser in the case of any found to be
missing);
|
|
(iii)
|
such
waivers or consents as may be necessary to enable the Purchaser or
its
nominee(s) to become the registered holder of all the
Shares;
|
|
(iv)
|
the
certificate of incorporation, common seal, minute books, statutory
registers and share certificate books of the
Company;
|
|
(v)
|
the
leases and any other documents relating to the
Properties;
|
|
(vi)
|
the
Tax Deed duly executed by the Sellers and the
Company;
|
|
(vii)
|
the
service agreements of each of the Executives with the Company in
the
Agreed Form, duly executed by the Company and the
Executives;
|
|
(viii)
|
an
acknowledgement under seal from Xx Xxxxxx Xxxx Xxxxx that he is not,
and
never has been, a director of the Company and has no claim against
the
Company, whether for loss of office or
otherwise;
|
|
(ix)
|
the
resignation of the Executives as directors of the Company and Xxxxx
Xxxxxxxx as the secretary of the Company, in each case acknowledging
under
seal that he has no claim against the Company, whether for termination
of
his office or otherwise;
|
|
(x)
|
the
resignations of Xxxx Xxxxxxxx, Xxxxxx Xxxxxxxx, Xxxxx Xxxxxxxx and
Xxxxxxxx Xxxxxxx, in each case acknowledging under seal that she
has no
claim against the Company, whether for termination of her employment
or
otherwise;
|
|
(xi)
|
a
waiver, signed by the Sellers and Xxx Xxxxxxxx, of any entitlement
to any
bonsues provided for in the Accounts, or to which they may otherwise
claim
to be entitled in respect of any period up to (and including)
Completion;
|
|
(xii)
|
the
resignation of the auditors of the Company in each case confirming
that,
in accordance with section 394 of the Companies Xxx 0000, there are
no
circumstances connected with their resignation which should be brought
to
the attention of the members or creditors of the Company and that
no fees
are due to them;
|
|
(xiii)
|
a
certificate in a form acceptable to the Purchaser, duly executed
by the
Sellers, to the effect that there is no indebtedness outstanding
from the
Company to any Seller or any person connected with any Seller;
|
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* * Confidential Treatment
58
|
(xiv)
|
evidence
of release of the Charges in a form satisfactory to the Purchaser;
and
|
|
(xv)
|
certified
copies of the minutes of the meeting referred to in
paragraph (b)
below;
|
|
(b)
|
that
a board meeting of the Company is held at which it is resolved
that:
|
|
(i)
|
such
persons as the Purchaser nominates are appointed as additional directors
and the secretary of the Company;
|
|
(ii)
|
the
transfers referred to in paragraph (a)
above
(subject only to their being duly stamped) are approved for registration;
|
|
(iii)
|
the
Purchaser's Accountants are appointed as auditors;
and
|
|
(iv)
|
its
bank mandates are revised in such manner as the Purchaser
requires;
|
|
(c)
|
that
an extraordinary general meeting of the Company is held at which
new
articles of association are adopted in such form as the Purchaser
requires.
|
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59
PART
2
PURCHASER'S
OBLIGATIONS
Subject
to the Sellers having done or procured to be done those things set out in
Part
1
of this
schedule, at Completion the Purchaser shall:
|
(a)
|
make
a payment to each Seller of that amount of the Initial Consideration
due
at Completion set against his name in column C of schedule
1;
|
|
(b)
|
deliver
to the Sellers' Solicitors a certified copy of the resolutions of
the
board of directors (or a duly constituted committee of the board)
of the
Purchaser authorising the execution of this agreement, the Tax Deed
and
each of the other Transaction Documents to which it is or is to be
a
party;
|
|
(c)
|
deliver
to the Sellers' Solicitors a counterpart of the Tax Deed duly executed
by
the Purchaser;
|
|
(d)
|
deliver
to the Sellers' Solicitors counterparts of the service agreements
of each
of the Executives with the Company in the Agreed Form, duly executed
by
the Company; and
|
|
(e)
|
subject
to agreeing with the Sellers before Completion the terms on which
such
account shall operate, pay into a joint account in the names of the
Sellers Solicitors and the Purchasers Solicitors the the sum of
£1,500,000.00 in respect of the Earn Out Consideration and the employee
bonus payments.
|
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60
SCHEDULE
8
COMPLETION
BALANCE SHEET
PREPARATION
OF THE COMPLETION BALANCE SHEET
|
1.
|
Preparation
of draft Completion Balance
Sheet
|
Following
Completion the Purchaser or its representatives shall carry out a stock take
of
the stock of the Company. To enable the Net Assets to be ascertained, as soon
as
reasonably practicable and by no later than 20 Business Days following
Completion, the Purchaser shall procure that the Company prepares and delivers
to the Sellers a draft of a balance sheet of the Company as at Completion (the
draft
Completion Balance Sheet).
The
draft Completion Balance Sheet shall be prepared in accordance with the
following:
|
(a)
|
to
the extent consistent with GAAP in force at the Accounts Date, the
accounting policies, principles, practices, evaluation rules,
categorisations, procedures, techniques, methods and bases adopted
by the
Company in the preparation of the Accounts;
and
|
|
(b)
|
to
the extent not consistent with GAAP or otherwise covered by (a),
GAAP in force at the Accounts Date.
|
|
2.
|
Notification
of disputed items
|
Within
10
Business Days of delivery to the Sellers of the draft Completion Balance Sheet,
the Sellers shall give a notice to the Purchaser of any item or items they
wish
to dispute together with the reasons for such dispute and a list of proposed
adjustments. An adjustment may only be proposed if it exceeds £1,000. If, by the
expiry of such period of 10 Business Days, no such notice is given to the
Purchaser or the Sellers have given notice to the Purchaser that there are
no
items they wish to dispute, the draft Completion Balance Sheet shall constitute
the Completion Balance Sheet for the purposes of this agreement.
|
3.
|
Resolution
of disputed items and finalisation of the Completion Balance
Sheet
|
If,
in
accordance with this schedule, notice is given to the Purchaser as to any item
or items in dispute:
|
(a)
|
the
Sellers and the Purchaser shall attempt to agree in writing the item
or
items disputed by the Sellers and any other item or items which,
following
the giving of notice of the item or items disputed by the Sellers,
the
Purchaser shall, within five Business Days of the giving of that
notice,
give notice to the Sellers that it wishes to
adjust;
|
|
(b)
|
if
any such item or items are not agreed in writing between the Sellers
and
the Purchaser within 20 Business Days of the delivery to the Sellers
of
the draft Completion Balance Sheet, the item or items in dispute
or which
the Purchaser wishes to adjust shall be determined by the Independent
Accountants; and
|
|
(c)
|
the
draft Completion Balance Sheet, adjusted to take account of each
item in
dispute or which the Purchaser wishes to adjust (of which notice
is given
in accordance with this schedule) as agreed in writing between the
Sellers
and the Purchaser or as determined by the Independent Accountants
(as the
case may be), shall constitute the Completion Balance Sheet for the
purposes of this agreement.
|
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61
|
4.
|
Provision
of information
|
The
Sellers shall, and shall (to the extent they are reasonably able to do so)
procure that the Sellers' Accountants shall, provide the Purchaser and the
Purchaser's Accountants with all information, assistance and access to books
and
records of account, documents, files, papers and information stored
electronically which they may reasonably require for the purposes of this
schedule. The Purchaser shall, and shall procure that the Company and (to the
extent it is reasonably able to do so) that the Purchaser's Accountants shall,
provide the Sellers and the Sellers' Accountants with all information,
assistance and access to stock, books and records of account, documents, files,
papers and information stored electronically which they may reasonably require
for the purposes of this schedule.
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62
SCHEDULE
9
PART
1
NET
PROFITS
PREPARATION
OF THE PROFIT AND LOSS ACCOUNT
|
1.
|
Preparation
of draft Profit and Loss
Account
|
To
enable
the Net Profits to be ascertained, as soon as reasonably practicable and by
no
later than 60 Business Days after the end of the period of 12 months ending
on
30 June 2007, the Purchaser shall procure that the Company prepares and delivers
to the Sellers a draft of a profit and loss account of the Company for that
year
from 30 June 2006 to 30 June 2007 (the draft
Profit and Loss Account).
The
draft Profit and Loss Account shall be prepared in accordance with the
following:
|
(a)
|
to
the extent consistent with GAAP, the accounting policies, principles,
practices, evaluation rules, categorisations, procedures, techniques,
methods and bases adopted by the Company in the preparation of the
Accounts; and
|
|
(b)
|
to
the extent not consistent with GAAP or otherwise covered by (a),
GAAP in force for the period for which the draft Profit and Loss
Account
is made up.
|
|
2.
|
Notification
of disputed items
|
Within
20
Business Days of delivery to the Sellers of the draft Profit and Loss Account,
the Sellers shall give a notice to the Purchaser of any item or items they
wish
to dispute together with the reasons for such dispute and a list of proposed
adjustments. An adjustment may only be proposed if it exceeds £1,000. If, by the
expiry of such period of 20 Business Days, no such notice is given to the
Purchaser or the Sellers have given notice to the Purchaser that there are
no
items they wish to dispute, the draft Profit and Loss Account shall constitute
the Profit and Loss Account for the purposes of this agreement.
|
3.
|
Resolution
of disputed items and finalisation of the Profit and Loss
Account
|
If,
in
accordance with this schedule, notice is given to the Purchaser as to any item
or items in dispute:
|
(a)
|
the
Sellers and the Purchaser shall attempt to agree in writing the item
or
items disputed by the Sellers and any other item or items which,
following
the giving of notice of the item or items disputed by the Sellers,
the
Purchaser shall, within five Business Days of the giving of that
notice,
give notice to the Sellers that it wishes to
adjust;
|
|
(b)
|
if
such item or items are not agreed in writing between the Sellers
and the
Purchaser within 20 Business Days of the delivery to the Sellers
of the
draft Profit and Loss Account, the item or items in dispute or which
the
Purchaser wishes to adjust shall be determined by the Independent
Accountants; and
|
|
(c)
|
the
draft Profit and Loss Account, adjusted to take account of each item
in
dispute or which the Purchaser wishes to adjust (of which notice
is given
in accordance with this schedule) as agreed in writing between the
Sellers
and the Purchaser or as determined by the Independent Accountants
(as the
case may be), shall constitute the Profit and Loss Account for the
purposes of this agreement and the Net Profits shall be as stated
in the
Profit and Loss Account.
|
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63
|
4.
|
Provision
of information
|
The
Sellers shall, and shall (to the extent they are reasonably able to do so)
procure that the Sellers' Accountants shall, provide the Purchaser and the
Purchaser's Accountants with all information, assistance and access to books
and
records of account, documents, files, papers and information stored
electronically which they may reasonably require for the purposes of this
schedule. The Purchaser shall, and shall procure that the Company and (to the
extent it is reasonably able to do so) that the Purchaser's Accountants shall,
provide the Sellers and the Sellers' Accountants with all information,
assistance and access to books and records of account, documents, files, papers
and information stored electronically which they may reasonably require for
the
purposes of this schedule.
PART
2
RESTRICTIONS
ON PURCHASER
|
1.
|
During
the Earn-Out Period, the Purchaser shall and shall procure that the
Company shall:
|
|
(a)
|
Not
make any management charges, reallocation of group costs, finance
charges
or other group charges unless such charge or reallocation represents
arm's
length value (calculated in accordance with the Company's accounting
policies) for the service or benefit to the Company in respect of
which
the charge or reallocation has been
made;
|
|
(b)
|
Not
apply to the Net Profit calculation any finance costs in respect
of loan
or overdraft facilities in excess of those payable under facilities
available to the Company on reasonable terms from arm's length providers
of such facilities;
|
|
(c)
|
Not
apply to the Net Profit calculation any finance and depreciation
costs in
relation to capital expenditure, unless in accordance with the Company's
accounting policies;
|
|
(d)
|
Not
apply to the Net Profit calculation any money spent on research and
development, sales and marketing, legal, audit and accountancy fees
,
unless such amounts have been spent bona fide in furtherance of the
Company's business;
|
|
(e)
|
Not
apply to the Net Profit calculation any bonus payments to the Executives
referred to in clause 8.4 or any Earn Out Consideration payable to
the
Sellers;
|
|
(f)
|
Not
initiate any procedure for the solvent winding up of the
Company;
|
|
(g)
|
Procure
that the Company shall not sell or transfer any material part of
its
business or purchase any business or
company;
|
|
(h)
|
Procure
that no change shall be made to the nature of the Company's business
as
conducted at Completion (being a change which is material in the
context
of the Company taken as a whole);
|
|
(i)
|
Procure
that the Company shall not enter into any joint venture, partnership
or
other similar profit sharing
arrangement;
|
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64
|
(j)
|
Procure
that no business or opportunities of the Company shall be diverted
away
from the Company to any member of the Purchaser's Group for the time
being; and
|
|
(k)
|
Procure
that the Company shall not enter into any transaction, agreement
or
arrangement with any member of the Purchaser's Group for the time
being on
terms which are less favourable to the Company than would be available
from a third party dealing at arm's
length,
|
except
(in the case of any relevant action) with the prior written consent of the
Sellers or as permitted by this schedule, if any such action would have a
material adverse effect on the Net Profits.
|
2.
|
The
Purchaser or, as the case may be, the Company may take any of the
actions
referred to in paragraph 1, notwithstanding that such action has
or may
have a material adverse effect on the Net Profits if, before it does
so,
the Purchaser confirms in writing to the Sellers that, for the purposes
of
calculating the Net Profits, an appropriate allowance or adjustment
will
be made in respect of the action in question, so that the amount
of the
Earn-Out Consideration is not adversely affected by that action.
Any such
allowance or adjustment shall be identified and quantified by the
Purchaser in the draft Profit and Loss Account and shall be agreed
or
determined as provided in schedule 9 (including, if relevant, following
a
reference to the Independent
Accountants).
|
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65
SCHEDULE
10
INDEPENDENT
ACCOUNTANTS
|
1.
|
If
and whenever any item in dispute or which the Purchaser wishes to
adjust
relating to the ascertainment of the Net Assets or Net Profits falls
to be
referred, in accordance with the relevant provision of this agreement,
to
Independent Accountants for determination, it shall be referred to
such
firm of chartered accountants:
|
|
(a)
|
as
the Sellers and the Purchaser may agree in writing within five Business
Days after the expiry of the period allowed by the relevant provision
of
this agreement for the Sellers and the Purchaser to reach agreement
over
the relevant item in dispute; or
|
|
(b)
|
failing
such agreement, as shall be appointed for this purpose on the application
of the Sellers or the Purchaser by the President of the Institute
of
Chartered Accountants in England and Wales for the time
being.
|
|
2.
|
The
Independent Accountants shall act on the following
basis:
|
|
(a)
|
the
Independent Accountants shall act as experts and not as
arbitrators;
|
|
(b)
|
the
item or items in dispute shall be notified to the Independent Accountants
in writing by the Sellers and/or the Purchaser within 10 Business
Days of
the Independent Accountants'
appointment;
|
|
(c)
|
their
terms of reference shall be as set out in the relevant
schedule;
|
|
(d)
|
the
Independent Accountants shall decide the procedure to be followed
in the
determination;
|
|
(e)
|
the
Sellers and the Purchaser shall each provide and the Purchaser shall
procure that the Company shall provide (and, to the extent they are
reasonably able to do so, shall procure that their respective accountants
and the accountants of the Company shall provide) the Independent
Accountants promptly with all information, assistance and access
to books
and records of account, documents, files, papers and information
stored
electronically which they reasonably require, and the Independent
Accountants shall be entitled (to the extent they consider it appropriate)
to base their determination on such information and on the accounting
and
other records of the Company;
|
|
(f)
|
the
determination of the Independent Accountants shall (in the absence
of
manifest error) be final and binding on the parties;
and
|
|
(g)
|
the
costs of the determination, including fees and expenses of the Independent
Accountants, shall be borne equally as between the Sellers on the
one hand
and the Purchaser on the other
hand.
|
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* * Confidential Treatment
66
SCHEDULE
11
INTERPRETATION
|
1.
|
In
this agreement:
|
Accounts
means
the balance sheets as at 30 June, 2006 and audited profit and loss accounts
for
each of the three years ended on that date of the Company (including the audited
balance sheets as at the end of each of those periods of the Company and the
audited profit and loss accounts for those periods of the Company) and the
notes
and directors' reports relating to them, a copy of each of which is in the
Agreed Form;
Accounts
Date
means 30
June 2006;
Agreed
Form
means,
in relation to any document, the form of that document which has been initialled
for the purpose of identification by the Sellers' Solicitors and the Purchaser's
Solicitors or otherwise by or on behalf of the Sellers and the Purchaser with
such changes as the Sellers and the Purchaser may agree in writing before
Completion;
Business
means
the
business carried on by the Company as at, and prior to, the date of this
agreement and includes any part or parts of the business;
Business
Day
means a
day (other than a Saturday or Sunday) on which banks are generally open in
London for normal business;
CAT
means
Competition Appeal Tribunal;
Charges
means
the two charges created on 29 June 1996 and 19 February 1999 registered against
the Company for the benefit of Midland Bank plc;
Company
means
Pharmapac (UK) Limited;
Completion
means
completion of the sale and purchase of the Shares in accordance with this
agreement or the date thereof, as the case may be;
Completion
Balance Sheet
means
the Completion Balance Sheet to be prepared, and as finalised, in accordance
with schedule 8;
Conditions
means
the conditions precedent to the sale and purchase of the Shares set out in
clause 3;
Consideration
means
the aggregate of the Initial Consideration, as such may be adjusted, and the
Earn-Out Consideration;
Disclosure
Letter
means
the letter of the same date as this agreement from the Sellers to the Purchaser
including all documents appended thereto;
Earn-Out
Consideration
has the
meaning given to it in clause 7;
Earn-Out
Period means
the
period from Completion to 30 June 2007;
Electronic
Communication means
an
electronic communication as defined in the Electronic Communications Xxx
0000;
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* * Confidential Treatment
67
Encumbrance
means
any mortgage, charge (fixed or floating), pledge, lien, option, right to
acquire, right of pre-emption, assignment by way of security or trust
arrangement for the purpose of providing security or other security interest
of
any kind (including any retention arrangement), or any agreement to create
any
of the foregoing;
Environmental
Tax means
the
tax known as aggregates levy charged in accordance with Part 2 of the Finance
Xxx 0000, the tax known as climate change levy charged in accordance with Part
I
of Schedule 6 to the Finance Xxx 0000 and the tax known as landfill tax charged
in accordance with Part III of the Finance Xxx 0000;
Executives
means
Xxxxx Xxxxxxxx, Xxxxxxx Xxxxxxx, Xxxxxx Xxxxxxx, Xxxxxx Xxxx and Xxx
Xxxxxxxx;
GAAP
means
generally accepted accounting principles and practices in the United
Kingdom;
HM
Revenue and Customs means
Her
Majesty's Revenue and Customs (or, where applicable, a person or persons which
previously had responsibility for any function for which Her Majesty's Revenue
and Customs has responsibility);
holding
company
has the
meaning given in section 736 of the Companies Xxx 0000;
Independent
Accountants
means
such firm of chartered accountants as may be appointed under schedule
10;
Initial
Consideration
has the
meaning given to it in clause 5;
Insolvency
Act
means
the Insolvency Xxx 0000;
Intellectual
Property Rights
means
(i) copyright, patents, database rights and rights in trade marks, designs,
know-how and confidential information (whether registered or unregistered),
(ii)
applications for registration, and rights to apply for registration, of any
of
the foregoing rights and (iii) all other intellectual property rights and
equivalent or similar forms of protection existing anywhere in the
world;
ITEPA
2003
means
the Income Tax (Earnings and Xxxxxxxx) Xxx 0000;
Leases
means
any
occupational lease or arrangement in connection with each Property (or any part
thereof);
Licence
means
any permit, licence, authorisation, permission, accreditation, consent,
registration, certification, exemption or other approval;
Long
Stop Date
has the
meaning given in clause 3.2;
Losses
means
losses, costs, damages, liabilities, charges, expenses and
penalties;
Net
Assets
means
the aggregate amount of the assets less the aggregate amount of the liabilities
of the Company as at Completion as shown in the Completion Balance
Sheet;
Net
Profits
means
the consolidated operating profit of the Company before tax for the period
ending on 30 June 2007, as ascertained in accordance with the provisions of
schedule
9;
Planning
Acts
means
the Town and Country Planning Xxx 0000, the Planning (Listed Buildings and
Conservation Areas) Xxx 0000, the Planning (Hazardous Substances) Xxx 0000,
the
Planning (Consequential Provisions) Xxx 0000, the Planning and Compensation
Xxx
0000 and the Planning and Compulsory Xxxxxxxx Xxx 0000;
*
* * Confidential Treatment
68
Profit
and Loss Account
means
the Profit and Loss Account to be prepared, and as finalised, in accordance
with
schedule
9;
Properties
means
the properties shortly described in schedule
3
and
includes every part of each of them and Property
means
any of them;
Purchaser's
Accountants
means X
X Xxxxxx and Company, Xxxx Xxxxx, 00/00 Xxxxxxx Xxxx, Xxxxxx, XX0
0XX;
Purchaser's
Advisers
means
the Purchaser's Solicitors and the Purchaser's Accountants;
Purchaser's
Announcement
means
the announcement to be made on the date of this agreement by the Purchaser
in
the Agreed Form;
Purchaser's
Group
means
the Purchaser and all its subsidiaries, all its holding companies and all the
other subsidiaries of each of its holding companies (other than the
Company);
Purchaser's
Solicitors
means
Xxxxx & Xxxxx LLP of Xxx Xxx Xxxxxx, Xxxxxx XX0X 0XX;
Sellers'
Accountants
means
Cobham Xxxxxx Limited of 000 Xxxx Xxxxxx, Xxxxxxxxx X0 0XX;
Sellers'
Solicitors
means
Xxxxxx Xxxxxx Xxxxx LLP at Xxxxx Xxxxxxxx, 00 Xxxxx Xxxxxx, Xxxxxxxxx, X0
0XX;
Shares
means
all the 114,865 issued ordinary shares of £1 each in the capital of the
Company;
Stock
Options
means
the stock options granted by the Purchaser to the Executives at Signing in
the
Agreed Form;
subsidiary
has the
meaning given in section 736 of the Companies Xxx 0000;
Taxation
means
all
forms of taxation, duties, imposts and levies, whether of the United Kingdom
or
elsewhere, including income tax (including income tax or amounts equivalent
to
or in respect of 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, VAT, Environmental Tax, customs and
other import or export duties, excise duties, stamp duty, stamp duty reserve
tax, stamp duty land tax, National Insurance and social security or other
similar contributions, and any interest, surcharge, penalty or fine in relation
thereto;
Taxation
Authority means
HM
Revenue and Customs or any other taxing or other authority (whether within
or
outside the United Kingdom) competent to impose, administer or collect any
Taxation;
Tax
Deed
means
the Tax Deed in the Agreed Form;
Taxes
Act 1988
means
the Income and Corporation Taxes Xxx 0000;
TCGA
1992
means
the Taxation of Chargeable Gains Xxx 0000;
*
* * Confidential Treatment
69
Transaction
Documents
means
this agreement, the documents referred to in it and any other agreements
executed or to be executed by the parties on the date of this agreement or
Completion;
VAT
means
value added tax chargeable under or pursuant to the VATA 1994 or the EU Sixth
VAT Directive (77/388/EEC);
VATA
1994
means
the Value Added Tax Xxx 0000;
Warranted
Statements
has the
meaning given in clause 9.1,
and
Warranted
Statement
means
one of them;
Warranties
means
the representations and warranties on the part of the Sellers contained in
clause 9.1;
and
Warranty
Claim
means a
claim by the Purchaser or any person deriving title from it the basis of which
is that a Warranted Statement is, or is alleged to be, untrue or
inaccurate.
|
2.
|
Where
any statement in schedule
4
or
in the Disclosure Letter is qualified by the expression "so far as
the
Sellers are aware" or "to the best of the Sellers' knowledge, information
and belief" or any similar expression, that expression or statement
shall
be deemed to include an additional statement that it has been made
after
due and careful enquiry of each of the Sellers and Mr Xxx
Xxxxxxxx.
|
|
3.
|
In
this agreement any reference, express or implied, to an enactment
(which
includes any legislation in any jurisdiction)
includes:
|
|
(a)
|
that
enactment as amended, extended or applied by or under any other enactment
(before, on or after the date of this
agreement);
|
|
(b)
|
any
enactment which that enactment re-enacts (with or without modification);
and
|
|
(c)
|
any
subordinate legislation (including regulations) made (before, on
or after
the date of this agreement) under that enactment, including (where
applicable) that enactment as amended, extended or applied as described
in
subparagraph (a),
or under any enactment which it re-enacts as described in
subparagraph (b).
|
|
4.
|
In
this agreement:
|
|
(a)
|
words
denoting persons include bodies corporate and unincorporated associations
of persons;
|
|
(b)
|
references
to an individual include his estate and personal
representatives;
|
|
(c)
|
subject
to clause 15,
references to a party to this agreement include the successors or
assigns
(immediate or otherwise) of that
party;
|
|
(d)
|
a
person shall be deemed connected
with another if that person is connected with that other within the
meaning of section 839 of the Taxes Xxx
0000;
|
|
(e)
|
the
words including
and include
shall mean including without limitation and include without limitation,
respectively;
|
|
(f)
|
any
reference importing a gender includes the other
genders;
|
*
* * Confidential Treatment
70
|
(g)
|
any
reference to a time of day is to London
time;
|
|
(h)
|
any
reference to £
is
to pounds sterling;
|
|
(i)
|
any
reference to writing includes typing, printing, lithography, photography
and facsimile but excludes any other form of Electronic
Communication;
|
|
(j)
|
any
reference to a document is to that document as amended, varied or
novated
from time to time otherwise than in breach of this agreement or that
document;
|
|
(k)
|
any
reference to a company includes any company, corporation or other
body
corporate wheresoever incorporated;
and
|
|
(l)
|
any
reference to a company or firm includes any company or firm in succession
to all, or substantially all, of the business of that company or
firm.
|
|
5.
|
If
there is any conflict or inconsistency between a term in the body
of this
agreement and a term in any of the schedules or any other document
referred to or otherwise incorporated into this agreement, the term
in the
body of this agreement shall take precedence, unless the relevant
schedule
or other document which is referred to or otherwise incorporated
into this
agreement expressly provides that the term in it is to take precedence
over the term in the body of this
agreement.
|
|
6.
|
The
eiusdem
generis rule
does not apply to this agreement. Accordingly, specific words indicating
a
type, class or category of thing shall not restrict the meaning of
general
words following such specific words, such as general words introduced
by
the word other
or
a similar expression. Similarly, general words followed by specific
words
shall not be restricted in meaning to the type, class or category
of thing
indicated by such specific words.
|
|
7.
|
A
reference in this agreement to any English legal term for any action,
remedy, method or form of judicial proceeding, legal document, court
or
any other legal concept or matter shall be deemed to include a reference
to the corresponding or most similar legal term in any jurisdiction
other
than England, to the extent that such jurisdiction is relevant to
the
transactions contemplated by this agreement or the terms of this
agreement.
|
*
* * Confidential Treatment
71
SIGNATORIES
|
Signed
by Xxxxx Xxxxxxxx
|
)
|
/s/
Xxxxx Xxxxxxxx
|
|
Signed
by Xxxxxx Xxxx Xxxxx
|
)
|
/s/
Xxxxxx Xxxx Xxxxx
|
|
Signed
by Xxxxxxx Xxxxxxx
|
)
|
/s/
Xxxxxxx Xxxxxxx.
|
|
Signed
by Xxxxxx Xxxxxxx
|
)
|
/s/
Xxxxxx Xxxxxxx
|
|
Signed
by Xxxxxx Xxxx
|
)
|
/s/
Xxxxxx Xxxx
|
|
Signed
by
|
)
|
/s/
Xxxxx Xxxxxxx
|
|
for
Inyx
Pharma Limited
|
)
|
|
72
