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CONFORMED COPY
Dated 4th August 1997
ABBEY NATIONAL INDEPENDENT CONSULTING GROUP LIMITED
and
XXXXXX NATIONAL HOLDINGS LIMITED
-----------------------------------
ANIFA
Share Sale Agreement
-----------------------------------
Xxxxxxxxx and May,
00 Xxxxxxxxxx Xxxxxx,
Xxxxxx XX0X 0XX
(Ref: TNC/JCXT)
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CONTENTS
Page
1. Interpretation 1
2. Sale and Purchase 3
3. Consideration 3
4. Completion 3
5. Seller's Warranties and Covenants 3
6. Purchaser's Remedies and Seller's Limitations on Liability 3
7. Indemnities 3
8. Provision of Business Information 3
9. Pensions 3
10. Access 3
11. Effect of Completion 3
12. Remedies and Waivers 3
13. Assignment 3
14. Further Assurance 3
15. Entire Agreement 3
16. Notices 3
17. Announcements 3
18. Confidentiality 3
19. Costs and Expenses 3
20. Counterparts 3
21. Time of Essence 3
22. Choice of Governing Law 3
Schedule 1 Completion Arrangements 3
Schedule 2 Warranties 3
Schedule 3 Seller's Limitations on Liability 3
Schedule 4 Tax Covenant 3
Schedule 5 Basic Information about the Company 3
Schedule 6 Intellectual Property 3
Schedule 7 Pensions 3
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2
SHARE SALE AGREEMENT
THIS AGREEMENT is made 4th August 1997
BETWEEN:-
1. Abbey National Independent Consulting Group Limited of Xxxxx Xxxxx,
Xxxxx Xxxxxx, Xxxxxx XX0 0XX (registered in England No. 2506374)
(the "Seller")
AND
2. Xxxxxx National Holdings Limited of Xxx Xxxxxxx Xxxxxx, Xxxxxx XX0X
0XX (registered in England No. 3393377) (the "Purchaser").
WHEREAS:-
(A) Particulars of the Company are set out in Schedule 5 (Basic
Information about the Company).
(B) The Seller has agreed to sell and the Purchaser has agreed to
purchase the Shares in each case on the terms and subject to the
conditions of this Agreement.
(C) The Purchaser has also agreed to purchase the whole of the issued
share capital of the Other IFA Company on the terms and conditions
of the Other IFA Company Agreement.
(D) The Purchaser is intending to reorganise the structure of the
Purchaser's Group following Completion. This will involve the
disposal by the Company and the Other IFA Company of the whole or
parts of their respective undertaking or assets by intra-group
disposal.
(E) At the date of this Agreement (and prior to Completion), the
Purchaser has an authorised share capital of (pound)1,000 divided
into 1,000 shares of (pound)1 each and two of these shares have been
issued.
NOW IT IS HEREBY AGREED as follows:-
1. Interpretation
1.1 In this Agreement and the Schedules to it:-
3
"Accounts" means the audited financial statements of
the Company prepared in accordance with
the Companies Acts, for the accounting
reference period ended on the Accounts
Date which financial statements comprise a
balance sheet, profit and loss account,
notes, auditors' and directors' reports, a
copy of which has for the purpose of
identification only been signed by the
Seller and delivered to the Purchaser;
"Accounts Date" means 31 December, 1996;
"Books and Records" has its common law meaning and includes,
without limitation, all notices,
correspondence, orders, inquiries,
drawings, plans, books of account and
other documents and all computer disks or
tapes or other machine legible programs or
other records;
"Business Day" means a day (other than a Saturday or a
Sunday) on which banks are open for
business in London;
"Business Information" means all information, know-how and
records (whether or not confidential and
in whatever form held) including (without
limitation) all data, manuals and
instructions and all customer lists, sales
information, business plans and forecasts,
and all technical or other expertise and
all computer software and all accounting
and tax records, correspondence, orders
and inquiries;
"CGTA 1979" means the Capital Gains Tax Xxx 0000;
"Companies Acts" means the Companies Xxx 0000, the
Companies Consolidation (Consequential
Provisions) Xxx 0000, the Companies Xxx
0000 and Part V of the Criminal Justice
Xxx 0000;
"Company" means Abbey National Independent Financial
Advisers Limited, basic information
concerning which is set out in
"Completion" means completion of the sale and purchase
of the Shares under this Agreement;
"Completion Date" means the date of this Agreement;
4
"Confidential Business means Business Information which is
Information" confidential or not generally known;
"Consideration Shares" means 489 ordinary shares of (pound)1 each
in the share capital of the Purchaser,
credited as fully paid;
"Disclosure Letter" means the letter dated with the date
hereof written by the Seller to the
Purchaser for the purposes of clause ( )
and delivered to the Purchaser before the
execution of this Agreement;
"ICTA 1988" means the Income and Corporation Taxes Xxx
0000;
"Intellectual Property" means trade marks and service marks,
rights in designs, trade or business
names, copyrights and topography rights
(whether or not any of these is registered
and including applications for
registration of any such thing) and rights
under licences and consents in relation to
any such thing and all rights or forms of
protection of a similar nature or having
equivalent or similar effect to any of
these which may subsist anywhere in the
world;
"Non-Tax Warranties" means the Warranties other than the Tax
Warranties;
"Other IFA Company" means Xxxxxx Xxxxxxx Financial Planning
Limited (registered in England No.
1877373);
"Other IFA Company means the share sale agreement dated with
Agreement" the date hereof between Xxxxxx Group plc
(1) and the Purchaser (2) in substantially
the same terms as this Agreement;
"Purchaser's Group" means the Purchaser and its subsidiary
undertakings;
"Representative Member" means the representative member referred
to in the definition of VAT Group;
"Required for the has the meaning given in clause 8
Business" (Provision of Business Information);
"RTPA 1976" means the Restrictive Trade Practices Xxx
0000;
5
"Seller's Group" means Abbey National plc and the
subsidiary undertakings of that company
(other than, for the avoidance of doubt,
the Company);
"Shares" means all the issued shares in the capital
of the Company (comprising 2,500 shares of
(pound)1 each);
"Share Purchase has the meaning given to it in clause has
Documents" the meaning given to it in clause 15
(Entire Agreement);
"Subsidiary" means at any relevant time any then
subsidiary undertaking of the Company;
"Systems" means all computer hardware, software,
networks or other information technology
owned or used by the Company;
"Tax" or "Taxation" means and includes all forms of taxation
and statutory, governmental,
supra-governmental, state, principal,
local governmental or municipal
impositions, duties, contributions and
levies, in each case whether of the United
Kingdom or elsewhere and whenever imposed,
and all penalties, charges, costs and
interest relating thereto and without
limitation all employment taxes and any
deductions or withholdings of any sort;
"Tax Covenant" means the tax covenant referred to in
Schedule 1 (Completion Arrangements) and
Schedule 4 (Tax Covenant);
"Tax Warranties" means Warranties numbered 27 to 45 in
"TCGA 1992" means the Taxation of Chargeable Gains Xxx
0000;
"VATA 1994" means the Value Added Tax Xxx 0000;
"VAT Group" means the group of companies of which the
representative member for the purposes of
section 43 VATA 1994 was Abbey National
plc (Registration number 466264724);
"Warranties" means the warranties set out in Schedule 2
(Warranties) given by the Seller and any
other or warranties made by or on behalf
of the Seller in this Agreement and
"Warranty" shall be construed accordingly;
and
6
"Working Hours" means 9.30 a.m. to 5.30 p.m. on a Business
Day.
1.2 In this Agreement, unless otherwise specified:-
(A) references to clauses, sub-clauses, paragraphs, sub-paragraphs
and Schedules are to clauses, sub-clauses, paragraphs,
sub-paragraphs of, and Schedules to, this Agreement;
(B) a reference to any statute or statutory provision shall be
construed as a reference to the same as it may have been, or
may from time to time be, amended, modified or re-enacted;
(C) references to a "company" shall be construed so as to include
any company, corporation or other body corporate, wherever and
however incorporated or established;
(D) references to a "person" shall be construed so as to include
any individual, firm, company, government, state or agency of
a state or any joint venture, association or partnership
(whether or not having separate legal personality);
(E) references to "indemnify" and "indemnifying" any person
against any circumstance include indemnifying and keeping him
harmless from all actions, claims and proceedings from time to
time made against that person and all loss or damage and all
payments, costs or expenses made or incurred by that person as
a consequence of or which would not have arisen but for that
circumstance;
(F) the expressions "accounting reference date", "accounting
reference period", "allotment", "body corporate", "current
assets", "debentures", "holding company", "paid up", "profit
and loss account", "subsidiary", "subsidiary undertaking" and
"wholly-owned subsidiary" shall have the meaning given in the
Companies Acts;
(G) a person shall be deemed to be connected with another if that
person is connected with another within the meaning of section
839 ICTA 1988;
(H) references to writing shall include any modes of reproducing
words in a legible and non-transitor y form;
(I) headings to clauses and Schedules are for convenience only and
do not affect the interpretation of this Agreement;
7
(J) the Schedules form part of this Agreement and shall have the
same force and effect as if expressly set out in the body of
this Agreement, and any reference to this Agreement shall
include the Schedules;
(K) references to the knowledge, information, belief or awareness
of any person shall be treated as including any knowledge,
information, belief or awareness which the person would have
if the person made all usual and reasonable enquiries; and
(L) (i) the rule known as the ejusdem generis rule shall not
apply and accordingly general words introduced by the
word "other" shall not be given a restrictive meani ng
by reason of the fact that they are preced ed by words
indicat ing a particular class of acts, matter s or
things; and
(ii) general words shall not be given a restrictive meaning
by reason of the fact that they are followed by
particular examples intended to be embraced by the
general words.
2. Sale and Purchase
2.1 The Seller shall sell or procure the sale of, and the Purchaser
shall purchase, the Shares with all rights attached or accruing to
them at the date of this Agreement.
2.2 The Seller has the right to transfer legal and beneficial title to
the Shares.
2.3 The Shares shall be free from all charges and encumbrances and from
all other rights exercisable by or claims by third parties.
2.4 The Purchaser shall be entitled to exercise all rights attached or
accruing to the Shares including, without limitation, the right to
receive all dividends, distributions or any return of capital
declared, paid or made by the Company on or after the date of this
Agreement.
2.5 The Seller waives all rights of pre-emption over any of the Shares
conferred upon him by the articles of association of the Company or
in any other way and undertakes to take all steps necessary to
ensure that any rights of pre-emption over any of the Shares are
waived.
2.6 For the avoidance of doubt, Part 1 Law of Property (Miscellaneous
Provisions) Xxx 0000
8
shall not apply for the purposes of this clause.
3. Consideration
The total consideration for the sale of the Shares shall be the
allotment to the Seller of the Consideration Shares in accordance
with clause 4 (Completion).
4. Completion
4.1 Completion shall take place on the Completion Date at 00 Xxxxxxxxxx
Xxxxxx, Xxxxxx XX0X 0XX.
4.2 At Completion, the Seller shall do those things listed in Schedule 1
(Completion Arrangements).
4.3 The Purchaser shall not be obliged to complete this Agreement unless
the Seller complies fully with the requirements of Schedule 1
(Completion Arrangements) so far as they relate to the Seller.
4.4 If the obligations of the Seller under Schedule 1 (Completion
Arrangements) are not complied with on the Completion Date, the
Purchaser may:-
(A) defer Completion (so that the provisions of this clause shall
apply to Completion as so deferred); or
(B) proceed to Completion as far as practicable (without limiting
its rights under this Agreement); or
(C) treat this Agreement as terminated for breach of a condition.
4.5 Delivery of a share certificate in respect of the Consideration
Shares in accordance with Schedule 1 paragraph 6 (Completion
Arrangements) shall constitute payment of the consideration for the
Shares and shall discharge the obligations of the Purchaser under
clause 2 (Sale and Purchase).
5. Seller's Warranties and Covenants
5.1 The Seller warrants to the Purchaser that each of the Warranties is
accurate in all material respects and not misleading in any material
respect at the date of this Agreement and that if for any reason
there is any interval of time between the date of this Agreement and
Completion, the Warranties will be repeated on the Completion Date.
5.2 If the Warranties are repeated at Completion as referred to in
clause, the Seller shall use its best endeavours to procure that no
act shall be performed or omission allowed either
9
by it in such interval which would result in any of the Warranties
being materially breached or misleading in any material respect at
any time up to and including the time of Completion.
5.3 The Seller accepts that the Purchaser is entering into this
Agreement in reliance upon each of the Warranties.
5.4 The Seller undertakes to disclose in writing to the Purchaser
anything which is or may constitute a breach of or be inconsistent
with any of the Warranties immediately it comes to its notice both
before and after Completion.
5.5 The Seller undertakes (if any claim is made against it in connection
with the sale of the Shares to the Purchaser) not to make any claim
against the Company or any director or employee of the Company or
any other employees of the Seller's Group who are to be seconded to
or employed by the Company on whom any of them may have relied
before agreeing to any terms of this Agreement or of the Tax
Covenant or authorising any statement in the Disclosure Letter.
5.6 Each of the Warranties shall be construed as a separate and
independent warranty and (except where expressly provided to the
contrary) shall not be limited or restricted by reference to or
inference from the terms of any other Warranty or any other term of
this Agreement.
5.7 If in respect of or in connection with any breach of any of the
Warranties or any facts or matters warranted not being true and
being misleading any amount payable to the Purchaser by the Seller
is subject to Taxation, such payable amounts shall be paid to the
Purchaser by the Seller so as to ensure that the net amount received
by the Purchaser is equal to the full amount payable to the
Purchaser under this Agreement provided that if the benefit of this
Agreement has been assigned by the Purchaser, the Seller shall not
be obliged to pay any amount in excess of that which would have been
payable had the benefit of this Agreement not been so assigned.
5.8 The Seller undertakes to indemnify the Purchaser against all costs
(including legal costs on an indemnity basis as defined in Order 62
of the Rules of the Supreme Court), expenses or other liabilities
which the Purchaser may reasonably incur either before or after the
commencement of any action in connection with:-
(A) the settlement of any claim that any of the Warranties are
untrue or misleading or have been breached;
(B) any legal proceedings in which the Purchaser claims that any
of the Warranties
10
are untrue or misleading or have been breached and in which
judgment is given for the Purchaser; or
(C) the enforcement of any such settlement or judgment.
6. Purchaser's Remedies and Seller's Limitations on Liability
6.1 Subject to sub-clause 6.2 and to the limitations set out in Schedule
3 (Sellers Limitations on Liability), the Purchaser shall be
entitled to claim both before and after Completion that any of the
Warranties has or had been breached or is or was misleading and,
without limitation, to claim under any covenant even if the
Purchaser could have discovered on or before Completion that the
Warranty in question had been breached or was misleading. Completion
shall not in any way constitute a waiver of any of the Purchaser's
rights.
6.2 The Purchaser shall not be entitled to claim that any fact causes
any of the Warranties to be breached or renders any misleading if it
has been fairly disclosed to the Purchaser in the Disclosure Letter
in the absence of any fraud or dishonesty on the part of the Seller
or their agents or advisers.
6.3 No liability shall attach to the Seller in respect of claims under
the Warranties or the Tax Covenant if and to the extent that the
limitations referred to in clause 6.1 and set out in Schedule 3
(Sellers Limitations on Liability) apply, in the absence of any
fraud or dishonesty on the part of any of the Seller or their agents
or advisers.
6.4 If, following Completion, the Purchaser becomes aware (whether it
does so by reason of any disclosure made pursuant to clause 5
(Sellers Warranties and Covenants) or not) that there has been any
material breach of the Warranties or any other term of this
Agreement, the Purchaser shall not be entitled to treat this
Agreement as terminated but shall be entitled to claim damages or
exercise any other right, power or remedy under this Agreement or as
otherwise provided by law.
6.5 If the Seller defaults in the payment when due of any sum payable
under this Agreement (whether determined by agreement or pursuant to
an order of a court or otherwise), the liability of the Seller shall
be increased to include interest on such sum from the date when such
payment is due until the date of actual payment (as well after as
before judgment) at a rate per annum of one per cent. above the base
rate from time to time of Lloyds Bank PLC. Such interest shall
accrue from day to day and shall be compounded annually.
6.6 The Seller undertakes to indemnify the Purchaser against all costs,
expenses or other liabilities which the Purchaser may reasonably
incur either before or after the commencement of any action in
connection with
11
the Warranties in accordance with clause 55.8 (Sellers Warranties
and Covenants).
6.7 Except as stated expressly in this clause, this clause and Schedule
3 (Sellers Limitations on Liability) shall not limit any other
clause of this Agreement.
7. Indemnities
7.1 The Seller agrees to indemnify and keep indemnified the Purchaser,
for itself and as trustee for the Company, from and against all
claims, losses, costs or other liabilities which the Purchaser or
the Company may suffer or incur by reason of:-
(A) any legal obligation to any affected person; or
(B) any requirement of a regulatory body (whether or not having
the force of law) in relation to an affected person or to that
regulatory body.
7.2 For the purposes of this clause, "affected person" means any person
who directly or indirectly (whether by family relationship or
otherwise) is entitled to receive any form of compensation
("Compensation") from the Company as a result of the Company (or its
employees or agents) having advised any person prior to Completion
either:-
(A) to transfer benefits accrued in and/or to direct future
contributions to an occupational pension scheme (as defined in
section 1 of the Pensions Schemes Act 1993) (an "Occupational
Pension Scheme") either to a retirement annuity or to a
personal pension scheme, approved under Chapter III and IV
respectively of Part XIV of the Taxes Xxx 0000; or
(B) to cease to accrue, or never to accrue, benefits in an
Occupational Pension Scheme and instead to accrue benefits
pursuant to a retirement annuity or a personal pension scheme
so approved.
7.3 The liabilities to which this clause applies shall include:-
(A) any Compensation to which any affected person is entitled;
(B) all costs and expenses of, and arising out of, any
investigation into the affairs of those persons who may be
affected persons, and the reinstatement of the accrued
benefits of any affected person into an Occupational Pension
Scheme, or any other rectification made to the accrued
benefits of any affected person, including, without
limitation, costs and expenses incurred by any member of the
Purchaser's Group;
12
(C) any administrative costs charged in respect of affected
persons by any Occupational Pension Scheme;
(D) all costs and expenses of, and arising out of, any independent
assessment of, or enquiry into, the circumstances of any
affected person which any regulatory body may require to be
carried out; and
(E) any fines or penalties or other amounts levied by any
regulatory body which relate in any way to any one or more
affected persons or to affected persons as a class.
7.4 If at any time after Completion any allowance, provision or reserve
made by the Company in the Accounts or otherwise taken account of or
reflected therein in respect of any claims, losses, costs or other
liabilities that would be recoverable by the Company from the Seller
pursuant to this clause is found to be in excess of the matter for
which such allowance, provision or reserve was made, the amount of
such excess shall be paid to the Seller.
8. Provision of Business Information
8.1 During the period of six years after Completion and without
prejudice to any of the Warranties:-
(A) if any Business Information Required for the Business of the
Company is not in the possession of the Purchaser or readily
discoverable by the Purchaser but is in the possession or
under the control of or available to the Seller, the Seller
shall, so far as it is legally able, procure that such
Business Information is provided to the Purchaser promptly on
request; and
(B) if any Books or Records of any Seller contain Business
Information which should be provided to the Purchaser, the
Seller shall procure that copies of such Books or Records are
given to the Purchaser promptly on request.
8.2 For the purposes of this clause and this Agreement generally,
"Required for the Business" means any Intellectual Property or
Business Information of the Company which is or has in the last six
years been used in the business of the Company or will be needed by
the Company to carry on the business of the Company in the same
manner as it is presently carried on or to fulfil any of the present
contracts or projects of the Company in relation to the business of
the Company or to comply with any law applicable in relation to the
business of the Company or if it is vested in any of the Seller and
its retention by the Seller after Completion of this Agreement would
be damaging or detrimental to the business of the Company.
13
9. Pensions
Each of the parties shall comply with the requirements pertaining to
that party set out in Schedule 7 (Pensions).
10. Access
As from the date of this Agreement, the Purchaser and any persons
authorised by it, upon reasonable notice will be given full access
to the premises and all the Books and Records and title deeds of the
Company and the directors and employees of the Company and the
Company will be instructed to give promptly all information and
explanations to the Purchaser or any such persons as they may
request.
11. Effect of Completion
Any provision of this Agreement and any other documents referred to
in it which is capable of being performed after but which has not
been performed at or before Completion and all Warranties and
covenants and other undertakings contained in or entered into
pursuant to this Agreement shall remain in full force and effect
notwithstanding Completion.
12. Remedies and Waivers
12.1 No delay or omission on the part of any party to this Agreement in
exercising any right, power or remedy provided by law or under this
Agreement or any other documents referred to in it shall:-
(A) impair such right, power or remedy; or
(B) operate as a waiver thereof.
12.2 The single or partial exercise of any right, power or remedy
provided by law or under this Agreement shall not preclude any other
or further exercise thereof or the exercise of any other right,
power or remedy.
12.3 The rights, powers and remedies provided in this Agreement are
cumulative and not exclusive of any rights, powers and remedies
provided by law.
13. Assignment
13.1 The rights or benefits of or under this Agreement and any agreements
referred to in
14
clause ( ), including without limitation the Warranties, may be
assigned (together with any cause of action arising in connection
with any of them) by the Purchaser to a wholly-owned subsidiary of
the Purchaser.
13.2 Obligations under this Agreement shall not be assignable.
14. Further Assurance
The Seller shall from time to time at its own cost, on being
required to do so by the Purchaser, now or at any time in the
future, do or procure the doing of all such acts and/or execute or
procure the execution of all such documents in a form satisfactory
to the Purchaser as the Purchaser may reasonably consider necessary
for giving full effect to this Agreement and securing to the
Purchaser the full benefit of the rights, powers and remedies
conferred upon the Purchaser in this Agreement.
15. Entire Agreement
15.1 For the purpose of this clause, "Pre-contractual Statement" means a
draft, agreement, undertaking, representation, warranty, promise,
assurance or arrangement of any nature whatsoever, whether or not in
writing, relating to the Share Purchase Documents or any of them (as
defined in sub-clause) made or given by a party to any of the Share
Purchase Documents or any other person at any time prior to
execution of the Share Purchase Documents.
15.2 This Agreement, the Tax Covenant, the Disclosure Letter referred to
in clause 6 (Purchasers Remedies and Sellers Limitations on
Liability) and any other documents referred to in this Agreement
(the "Share Purchase Documents") constitute the whole and only
agreement between the parties relating to the sale and purchase of
the Shares.
15.3 Except to the extent repeated in any of the Share Purchase
Documents, the Share Purchase Documents supersede and extinguish any
prior Pre-contractual Statement relating thereto.
15.4 Each party acknowledges that in entering into the Share Purchase
Documents or any of them on the terms set out therein, it is not
relying upon any Pre-contractual Statement which is not expressly
set out therein.
15.5 None of the parties shall have any right of action against any other
party to this Agreement arising out of or in connection with any
Pre-contractual Statement (except in the case of fraud).
15
15.6 This Agreement may only be varied in writing signed by each of the
parties.
16. Notices
16.1 Any notice or other communication given or made under or in
connection with the matters contemplated by this Agreement shall be
in writing (other than writing on the screen of a visual display
unit or other similar device which shall not be treated as writing
for the purposes of this clause).
16.2 Any such notice or other communication shall be addressed as
provided in sub-clause and, if so addressed, shall be deemed to have
been duly given or made as follows:-
(A) if sent by personal delivery, upon delivery at the address of
the relevant party;
(B) if sent by first class post, two Business Days after the date
of posting; and
(C) if sent by facsimile, when despatched;
PROVIDED that if, in accordance with the above provisions, any such
notice or other communication would otherwise be deemed to be given
or made outside Working Hours, such notice or other communication
shall be deemed to be given or made at the start of Working Hours on
the next Business Day.
16.3 The relevant addressee, address, telex number and facsimile number
of each party for the purposes of this Agreement, subject to
subclause, are:-
Name of party Address Facsimile No.
------------- ------- -------------
the Seller Abbey House 0171 612 4442
F.A.O. Xxx Xxxxxxxx Xxxxx Xxxxxx
Xxxxxxx Xxxxxxxxx Xxxxxx XX0 0XX
the Purchaser
F.A.O. Xxxxx Xxxxxx Ten Trinity Square
Company Secretary Xxxxxx XX0X 0XX 0171 481 7003
16.4 A party may notify the other party to this Agreement of a change to
its name, relevant addressee, address or facsimile number for the
purposes of sub-clause PROVIDED that such notification shall only be
effective on:-
16
(A) the date specified in the notification as the date on which
the change is to take place; or
(B) if no date is specified or the date specified is less than
five clear Business Days after the date on which notice is
given, the date falling five clear Business Days after notice
of any such change has been given.
17. Announcements
17.1 Subject to clause, no announcement concerning the sale of the Shares
or any ancillary matter shall be made by either party without the
prior written approval of the other, such approval not to be
unreasonably withheld or delayed.
17.2 Either party may make an announcement concerning the sale of the
Shares or any ancillary matter if required by:-
(A) the law of any relevant jurisdiction; or
(B) any securities exchange or regulatory or governmental body to
which either party is subject, wherever situated, including
(without limitation) the London Stock Exchange, whether or not
the requirement has the force of law,
in which case the party concerned shall take all such steps as may
be reasonable and practicable in the circumstances to agree the
contents of such announcement with the party before making such
announcement.
17.3 The restrictions contained in this clause shall continue to apply
after Completion without limit in time.
18. Confidentiality
18.1 Subject to clause, each party shall treat as strictly confidential
all information received or obtained as a result of entering into or
performing this Agreement which relates to:-
(A) the provisions of this Agreement;
(B) the negotiations relating to this Agreement;
(C) the subject matter of this Agreement; or
(D) the other party.
17
18.2 Either party may disclose information which would otherwise be
confidential if and to the extent:-
(A) required by the law of any relevant jurisdiction;
(B) required by any securities exchange or regulatory or
governmental body or taxation authority to which either party
is subject wherever situated, including (without limitation)
the London Stock Exchange, whether or not the requirement for
information has the force of law;
(C) required to vest the full benefit of this Agreement in either
party;
(D) disclosed to the professional advisers, auditors and bankers
of each party;
(E) the information has come into the public domain through no
fault of that party; or
(F) the other party has given prior written approval to the
disclosure, such approval not to be unreasonably withheld or
delayed,
PROVIDED that any such information disclosed pursuant to paragraph
paragraph ((A)), or ((B)) shall be disclosed only after consultation
with the other party.
18.3 The restrictions contained in this clause shall continue to apply
after Completion of the sale and purchase of the Shares under this
Agreement without limit in time.
19. Costs and Expenses
19.1 Except as otherwise stated in any other provision of this Agreement,
each party shall pay its own costs and expenses in relation to the
negotiations leading up to the sale of the Shares and to the
preparation, execution and carrying into effect of this Agreement
and all other documents referred to in it and the Seller confirms
that no expense of whatever nature relating to the sale of the
Shares has been or is to be borne by the Company.
20. Counterparts
20.1 This Agreement may be executed in any number of counterparts, and by
the parties on separate counterparts, but shall not be effective
until each party has executed at least one counterpart.
20.2 Each counterpart shall constitute an original of this Agreement, but
all the counterparts shall together constitute but one and the same
instrument.
18
21. Time of Essence
Except as otherwise expressly provided, time is of the essence of
this Agreement.
22. Choice of Governing Law
This Agreement shall be governed by and construed in accordance with
English law.
Schedule 1
Completion Arrangements
At Completion:-
1. the Seller shall deliver to the Purchaser:-
(A) duly executed transfers in respect of the Shares in favour of the
Purchaser and share certificates for the Shares in the name of the
relevant transferors and any power of attorney under which any
transfer is executed on behalf of any Seller or nominee;
(B) such waivers or consents as the Purchaser may require to enable the
Purchaser or its nominees to be registered as holders of the shares;
and
(C) powers of attorney in agreed terms;
2. the Seller shall execute and deliver to the Purchaser a Tax Covenant in
the form referred to in Schedule 4 (Tax Covenant) and shall procure that
there is executed by Abbey National plc and delivered to the Purchaser the
Services Agreement and the IP Licence Agreement;
3. the Seller shall deliver to the Purchaser such of the following as the
Purchaser may require:-
(A) the statutory books (which shall be written up to but not including
the Completion Date), the certificate of incorporation (and any
certificate of incorporation on change of name) and common seal (if
any) of the Company;
(B) a copy of the minutes of a duly held meeting of the directors of the
Seller authorising the execution by the Seller of this Agreement and
the Tax Covenant (such copy minutes being certified as correct by
the secretary of the Seller).
4. the Seller shall procure the present directors of the Company (other than
Xxxxxx Xxxxxx, Xxxxx Xxxxxx and Xxxxxxx Xxxxx) to resign their offices as
such and to relinquish any rights which they may have under any contract
of employment with the Company or under any statutory provision including
any right to damages for wrongful dismissal, redundancy payment or
compensation for loss of office or unfair dismissal, such resignations to
be
20
tendered at the board meetings referred to in paragraph;
5. the Seller shall procure a board meeting of the Company to be held at
which:-
(A) it shall be resolved that each of the transfers relating to the
Shares shall be approved for registration and (subject only to the
transfer being duly stamped) the Purchaser be registered as the
holder of the Shares concerned in the register of members; and
(B) the resignations of the directors referred to in paragraph 4 above
shall be tendered and accepted so as to take effect at the close of
the meeting and each of the persons tendering his resignation shall
deliver to the Company an acknowledgement executed as a deed that he
has no claim against the Company for breach of contract,
compensation for loss of office, redundancy or unfair dismissal or
on any other account whatsoever and that no agreement or arrangement
is outstanding under which the Company has or could have any
obligation to him;
The Seller shall procure that minutes of the duly held board meeting,
certified as correct by the secretary of the Company, and the resignations
and acknowledgements referred to, are delivered to the Purchaser.
6. the Purchaser shall:
(A) deliver to the Seller a share certificate in respect of the
Consideration Shares; and
(B) deliver to the Seller a copy, certified as correct by the secretary
of the Purchaser, of minutes of a duly held board meeting allotting
the Consideration Shares to the Seller.
Schedule 2
Warranties
1. Ownership of the Shares
The Seller is the sole beneficial owner of the Shares.
2. Group Arrangements and Interests
2.1 No indebtedness (actual or contingent) and no contract or arrangement is
outstanding between the Company and the Seller or any member of the
Seller's Group or any person a director of or connected with any Seller or
with the such member.
2.2 No member of the Seller's Group is engaged in any business which competes
with the business carried on at the date of this Agreement by the Company
or the other IFA Company.
3. Group Structure, etc.
3.1 The Shares comprise the whole of the issued and allotted share capital of
the Company and all of them are fully paid up.
3.2 There is no agreement or commitment outstanding which calls for the
allotment, issue or transfer of, or accords to any person the right to
call for the allotment or issue of, any shares (including the Shares) or
debentures in or securities of the Company.
3.3 The Company has no Subsidiaries at the date of this Agreement nor any
interest in the share capital of any other body corporate or undertaking.
3.4 The Company does not act or carry on business in partnership with any
other person nor is it a member of any corporate or unincorporated body,
undertaking or association.
3.5 The Company does not have any branch, agency, place of business or
permanent establishment outside the United Kingdom.
4. Options, Mortgages and Other Encumbrances
4.1 There is no option, right to acquire, mortgage, charge, pledge, lien or
other form of security or encumbrance or equity on, over or affecting the
Shares or any of them and there is no agreement or commitment to give or
create any and no claim has been made by any person to be entitled to any.
4.2 No option, right to acquire, mortgage, charge, pledge, lien (other than a
lien arising by
22
operation of law in the ordinary course of trading) or other form of
security or encumbrance or equity on, over or affecting the whole or any
part of the undertaking or assets of the Company) is outstanding and there
is no agreement or commitment to give or create any and no claim has been
made by any person to be entitled to any.
5. Accuracy and Adequacy of Information
5.1 The information given in is true and accurate in all respects and is not
misleading because of any omission or ambiguity or for any other reason.
5.2 The statutory books (including all registers and minute books) of the
Company have been properly kept and contain an accurate and complete
record of the matters which should be dealt with in those books and no
notice or allegation that any of them is incorrect or should be rectified
has been received.
6. Accounts
6.1 The Accounts:-
(A) were prepared in accordance with accountancy practices generally
accepted in the United Kingdom at the time they were audited and
commonly adopted by companies carrying on businesses similar to
those carried on by the Company;
(B) are complete and accurate in all material respects and in particular
include full provision for bad and doubtful debts and for Taxation
on profits (whether of an income or capital nature) relating to any
period ending on or before the Accounts Date;
(C) show a true and fair view of the state of affairs of the Company at
the Accounts Date; and
(D) except as the Accounts expressly disclose, are not affected by any
unusual or non-recurring items.
6.2 At the Accounts Date, the Company had no liability (whether actual,
contingent, unquantified or disputed) or outstanding capital commitment
which is not adequately disclosed or provided for in the Accounts.
6.3 If a balance sheet of the Company (if relevant, on a consolidated basis)
were drawn up as at the date of this Agreement in the manner in which and
on the basis upon which the Accounts were prepared, the net asset position
of the Company disclosed thereby would
23
be not less than (pound)1.72 million.
6.4 The accounting records of the Company have been kept on a proper and
consistent basis (no change in the methods or bases of valuation or
accountancy treatment having been made for at least six years prior to the
Accounts Date or since), are up-to-date and contain complete and accurate
details of the business activities of the Company and of all matters
required by the Companies Acts to be entered in them.
7. Events Since the Accounts Date
7.1 Since the Accounts Date:-
(A) the business of the Company has been carried on in the ordinary and
usual course and in the same manner (including nature and scope) as
in the past and no unusual or onerous contract differing from the
routine contracts necessitated by the nature of its trade has been
entered into by the Company;
(B) no asset of a value in excess of (pound)10,000 has been acquired or
disposed of on capital account or has been agreed to be acquired or
disposed of and no contract involving expenditure by it on capital
account has been entered into by the Company;
(C) no debts or other receivables and no material plant, machinery or
equipment of the Company have been factored or sold or agreed to be
sold;
(D) no resolution of the Company in general meeting has been passed
(other than resolutions relating to the routine business of annual
general meetings);
(E) no change in the accounting reference period of the Company has been
made; and
(F) there has been no material adverse change in the financial position
or profits of the Company.
7.2 No indication has been received that any debt now owing to the Company is
bad or doubtful save to the extent that provision has been made in the
Company's books therefor.
8. Work in Progress
8.1 All work in progress represented in the Accounts has been valued on a
basis excluding
24
profit and including adequate provision for losses which are or could
reasonably be anticipated.
9. Contracts and Commitments
9.1 The Company is not under any obligation, nor is it a party to any
contract, which cannot readily be fulfilled or performed by it on time and
without undue or unusual expenditure of money or effort.
9.2 The Company is not a party to or has any liability (present or future)
under any guarantee or indemnity or letter of credit or any leasing,
hiring, hire purchase, credit sale or conditional sale agreement or has
entered into any contract or commitment involving, or likely to involve,
obligations or expenditure of an unusual or exceptional nature or
magnitude.
9.3 The Company is not a party to any contract or arrangement which restricts
its freedom to carry on its business in any part of the world in such
manner as it may think fit, or to any agency, distributorship or
management agreement.
9.4 The Company is not aware of any breach of, or any invalidity, or grounds
for determination, rescission, avoidance or repudiation of, any contract
to which it is a party or of any allegation of such a thing.
9.5 The Company is not a party to any joint venture agreement or arrangement
or any agreement or arrangement under which it is to participate with any
other in any business.
9.6 The Company is not a party to any agreement or arrangement or under any
obligation under which it is or may become liable to make any investment
(as defined in section 1(1) of the Financial Services Act 1986) with, or
to deposit any money with, or to provide any loan or financial
accommodation or credit (other than normal trade credit) to any person, or
to subscribe, convert, acquire, dispose of or underwrite any investment.
9.7 The Company is not a party to any contract which falls within any of the
cases specified below:-
(A) the contract is of a value which has material consequences in terms
of expenditure or revenue expectations or it relates to matters not
within the ordinary business of the Company or it constitutes a
commercial transaction or arrangement deviant from the usual pattern
for the Company; or
(B) the contract can be terminated in the event of any change in the
underlying
25
ownership or control of the Company or would be materially affected
by such change;
and for this purpose "contract" includes any understanding, arrangement or
commitment however described.
10. Insider Contracts
There is not, and there has not at any time during the last six years
been, any contract or arrangement to which the Company is, or was, a party
and in which the Seller, or any member of the Seller's Group or any person
beneficially interested in any part of the share capital of the Company,
or any director of the Company or any person connected with any such
director is, or has been, interested, either directly or indirectly, and
the Company is not a party to, nor have its profits or financial position
during that period been affected by, any contract or arrangement which was
not of an entirely arm's length nature; in particular, without limitation,
the Company has not transferred any assets to another such member except
at market value.
11. Licences
All licences, consents and other permissions and approvals required for or
in connection with the carrying on of the business now being carried on by
the Company have been obtained, are not limited in duration or subject to
onerous conditions and are in full force and effect and all reports,
returns and information required by law or as a condition of any licence,
consent, permit or approval to be made or given to any person or authority
in connection with the business of the Company have been made or given to
the appropriate person or authority and there is no circumstance which
indicates that any licence, consent, permission or approval is likely to
be revoked or which may confer a right of revocation.
12. Financial Facilities
12.1 Full details of all overdraft, loan and other financial facilities
available to the Company and the amounts outstanding under them are set
out in the Disclosure Letter and neither Seller nor the Company has done
anything whereby the continuance of any of those facilities might be
affected or prejudiced.
12.2 Except for the borrowings referred to in paragraph 21.1 and for any loan
capital referred to in Schedule 5 (Basic Information about the Company)
the Company does not have outstanding any loan capital nor has it incurred
or agreed to incur any borrowing which it has not repaid or satisfied, or
has lent or agreed to lend any money which has not been repaid to it or
owns the benefit of any debt present or
26
future (other than debts due to it in respect of the provision of services
in the normal course of trading) or is a party to or has any obligation
under:-
(A) any loan agreement, debenture, acceptance credit facility, xxxx of
exchange, promissory note, finance lease, debt or inventory
financing, discounting or factoring arrangement or sale and lease
back arrangement; or
(B) any other arrangement the purpose of which is to raise money or
provide finance or credit.
12.3 To the best of the knowledge, information and belief of the Seller, no
event which is or, with the passing of any time or the giving of any
notice, certificate, declaration or demand, would become an event of
default under or any breach of any of the terms of any loan capital,
borrowing, debenture or financial facility of the Company or would entitle
any third party to call for repayment prior to normal maturity has
occurred or been alleged.
12.4 The Company has not borrowed any amount, from whatever source, after the
Accounts Date.
13. Insolvency
13.1 No order has been made and no resolution has been passed for the winding
up of the Company or for a provisional liquidator to be appointed in
respect of the Company and no petition has been presented and no meeting
has been convened for the purpose of winding up the Company.
13.2 No administration order has been made and no petition for such an order
has been presented in respect of the Company.
13.3 No receiver (which expression shall include an administrative receiver)
has been appointed in respect of the Company or all or any of its assets.
13.4 The Company is not insolvent, or unable to pay its debts within the
meaning of section 123 Insolvency Xxx 0000, or has stopped paying its
debts as they fall due.
13.5 No voluntary arrangement has been proposed under section 1 Insolvency Xxx
0000 in respect of the Company.
13.6 No unsatisfied judgment is outstanding against the Company.
13.7 No guarantee, loan capital, borrowed money or interest is overdue for
payment, and no
27
other obligation or indebtedness is outstanding which is substantially
overdue for performance or payment.
14. Product Liability
The Company has not provided any product or service which does not in any
material respect comply with all applicable laws, regulations or standards
or which is or not in accordance with any representation or warranty,
express or implied, given in respect of it.
15. Litigation
The Company is not engaged in any litigation or arbitration,
administrative or criminal proceedings, whether as plaintiff, defendant or
otherwise, and no litigation or arbitration, administrative or criminal
proceedings by or against the Company is pending, threatened or expected
and so far as the Seller is aware, there is no fact or circumstance likely
to give rise to any such litigation or arbitration, administrative or
criminal proceedings or to any proceedings against any director or
employee (past or present) of the Company in respect of any act or default
for which the Company might be vicariously liable.
16. Delinquent and Wrongful Acts
16.1 The Company has not committed or is liable for any criminal, illegal,
unlawful or unauthorised act or breach of any obligation or duty whether
imposed by or pursuant to statute, contract or otherwise, and no claim
that it has or is remains outstanding against the Company.
16.2 The Company has not received notification that any investigation or
inquiry is being or has been conducted by any governmental or other body
in respect of the affairs of the Company and the Seller is not aware of
any circumstances which would give rise to such investigation or inquiry.
17. Ownership and Condition of Assets
17.1 All assets used by the Company in the course of its business or which are
necessary or desirable for the continuation of that business as it is now
carried on are both legally and beneficially owned by a member of the
Group free from any third party rights and all such assets are included in
the Accounts.
17.2 Each of the assets included in the Accounts or acquired by the Company
since the Accounts Date (other than current assets sold, realised or
applied in the normal course of trading) is owned both legally and
beneficially by the Company free from any third party
28
rights, and each of those assets capable of possession is in the
possession of the Company.
17.3 All plant and machinery (including fixed plant and machinery), vehicles
and office equipment used by the Company in connection with its business
are in good repair and condition, regularly maintained and fully
serviceable and capable of being efficiently and properly used in
connection with the business of the Company and none is dangerous,
inefficient, obsolete or in need of renewal or replacement.
18. Intellectual Property
18.1 Details of all rights in any Intellectual Property (other than copyright
and unregistered designs) owned by the Company are set out in Part A of
Schedule 6 (Intellectual Property).
18.2 Details of all material licences granted to or by the Company in respect
of any Intellectual Property are set out in Part B of Schedule 6
(Intellectual Property).
18.3 All rights in all Intellectual Property and Confidential Business
Information owned or otherwise Required for the Business of the Company
are vested in or validly granted to the Company and are not subject to any
limit as to time which is due to expire within 12 months of the date of
this Agreement or any other limitation, right of termination (including,
without limitation, on any change in the underlying ownership or control
of the Company) or restriction which will become exerciseable or
applicable to the Company as a result of this Agreement and all renewal
fees and steps reasonably required for their maintenance or protection
have been paid and taken.
18.4 Except as listed in Part B of Schedule 6 (Intellectual Property), the
Company has not granted nor is it obliged to grant any licence,
sub-licence or assignment in respect of any Intellectual Property owned or
otherwise Required for the Business of the Company or has disclosed or is
obliged to disclose any Confidential Business Information Required for the
Business of the Company to any person, other than its employees for the
purpose of carrying on its business.
18.5 To the best of the knowledge, information and belief of the Seller, the
Company is not in breach of any licence, sub-licence or assignment granted
to or by it in respect of any Intellectual Property owned or otherwise
Required for the Business of the Company or of any agreement under which
any Business Information was or is to be made available to it.
18.6 To the best of the knowledge, information and belief of the Seller, the
processes and methods employed, the services provided and the businesses
conducted by the Company within the last six years do not, and/or at the
time of being employed, provided or conducted did not, infringe the rights
of any other person in any Intellectual Property or
29
Business Information.
18.7 To the best of the knowledge, information and belief of the Seller, there
is no, nor has there been at any time during the past six years any,
unauthorised use or infringement by any person of any of the Intellectual
Property or Confidential Business Information owned or otherwise Required
for the Business of the Company.
18.8 To the best of the knowledge, information and belief of the Seller, the
Company has, if required to do so under the Data Protection Xxx 0000, duly
registered as a data user and has complied with the Data Protection
Principles as set out in that Act.
19. Computers
19.1 Details of the Systems and all agreements or arrangements relating to the
maintenance and support (including escrow agreements relating to the
deposit of source codes), security, disaster recovery management and
utilisation (including facilities management and computer bureau services
agreements) of the Systems have been disclosed.
19.2 All Systems are either owned by or validly leased or licensed to the
Company.
20. Competition and Trade Regulation Law
20.1 The Company is not nor has it been a party to nor is it or has it been
concerned in any agreement or arrangement or is conducting or has
conducted itself (whether by omission or otherwise) in a manner which:-
(A) has been or is required to be registered under RTPA 1976;
(B) contravenes the provisions of any secondary legislation adopted
under the Fair Trading Xxx 0000;
(C) infringes Article 85 or 86 of the Treaty establishing the European
Economic Community or any other anti-trust or similar legislation in
any jurisdiction in which the Company has assets or carries or
intends to carry on business or where its activities may have an
effect; or
(D) is registrable, unenforceable or void (whether in whole or in part)
or renders it liable to civil, criminal or administrative
proceedings by virtue of any anti-trust or similar legislation in
any jurisdiction in which the Company has assets or carries on or
intends to carry on business or where its activities may have an
effect.
30
20.2 (A) The Company is not nor has it been a party to nor is it or has it
been concerned in any agreement or arrangement in respect of which
any undertaking has been given by or any order made against the
Company pursuant to RTPA 1976.
(B) The Company has not given an undertaking to, nor is it subject to
any order of or investigation by, nor has it received any request
for information from, any court or governmental authority
(including, without limitation, any national competition authority
and the Commission of the European Economic Community) under any
anti-trust or similar legislation.
(C) The Company is not nor has it been a party to nor is it or has it
been concerned in any agreement or arrangement in respect of which
an application for negative clearance and/or exemption has been made
to the Commission of the European Community.
21. Insurances
21.1 Full details of the insurance policies in respect of which the Company has
an interest have been disclosed in writing to the Purchaser, all such
policies are in full force and effect and are not void or voidable, no
claims are outstanding by the Company and, to the best of the knowledge,
information and belief of the Seller, no event has occurred which might
give rise to any claim.
22. Employment
22.1 A list of the names, jobs and short details of the terms of employment of
every employee of the Company are set out in the Disclosure Letter.
22.2 Particulars of the terms of all consultancy agreements with the Company
are contained in the Disclosure Letter.
22.3 Details of any material benefit received by any employee otherwise than in
cash, and of any benefit received by any employee in cash which is related
to sales, profits or performance, or which is otherwise variable (other
than normal overtime), are set out in the Disclosure Letter.
22.4 Any contract of employment with any employee to which the Company is a
party can be
31
terminated by the employing company without damages or compensation (other
than that payable by statute) by giving at any time only the minimum
period of notice applicable to that contract which is specified in section
86 of the Employment Rights Xxx 0000.
22.5 No senior employee of the Company has given notice terminating his
contract of employment or is under notice of dismissal and no amount due
to or in respect of any such employee or former employee of the Company is
in arrear and unpaid.
22.6 Since the Accounts Date, no material change has been made in the
emoluments or other terms of engagement of any employee and no such
change, and no negotiation or request for such a change, is due or
expected within six months from the date of this Agreement.
22.7 There is no dispute between the Company and any trade union or other
organisation formed for a similar purpose existing, pending or threatened
and there is no collective bargaining agreement or other arrangement
(whether binding or not) to which the Company is a party.
22.8 Except in the normal course of business, the Company has outstanding no
undischarged liability to pay to any governmental or regulatory authority
in any jurisdiction any contribution, Taxation or other impost arising in
connection with the employment or engagement of personnel by the Company.
22.9 The Company has at all relevant times complied in all material respects
with all its obligations under statute and otherwise concerning the health
and safety at work of its employees, and there are no claims capable of
arising or threatened or pending by any employee or third party in respect
of any accident or injury which are not fully covered by insurance.
22.10 No person working for the Company is an employee of the Seller's Group.
23. Fiduciary Arrangements
23.1 Where the Company has acted as trustee or fiduciary it has done so in a
proper manner and in accordance with its obligations to its customers and
the instructions of its customers. No right of set-off or contribution can
be exercised by any person with whom assets (including money) held by the
Company as trustee or fiduciary have been deposited, against such assets.
23.2 To the extent that the Company is required by the Pensions Xxx 0000 to
have in place formal notices of appointment of its professional advisers,
it has such notices in place and
32
all such notices are in full force and effect.
24. Asset Management and Safe Custody
Where the Company has conducted asset management and safe custody
business, it has conducted such business in a proper manner and in
accordance with the terms of its standard form of asset management and
safe custody agreements, copies of which are annexed to the Disclosure
Letter. All assets (including securities) deposited with the Company as
part of its asset management and safe custody business are in its
possession or under its legal control and the Company has not encumbered
or agreed to encumber or dispose of any such assets except in accordance
with instructions from its customers.
25. Valuation of Managed Securities
The valuation of securities held by the Company and the valuation of its
portfolio managed for and on the account of its customers has been made in
accordance with English law and accounting practices generally accepted in
the United Kingdom at the time when such valuation is carried out.
26. Regulation
26.1 The internal procedures of the Company are in accordance with the
requirements of the Money Laundering Regulations 1993 and its business has
been conducted in accordance with those internal procedures and in
accordance with the Money Laundering Regulations 1993.
26.2 The Company has received no notification or indication that it is in
breach of the Money Laundering Regulations 1993 and, so far as the Seller
is aware, there is no fact or circumstances which may give rise to such
breach.
26.3 The Company has, if required to do so under the Consumer Credit Xxx 0000,
obtained a licence covering the appropriate categories of credit business
and has complied with the provisions under such Act and other statutory
obligations relevant to its business.
26.4 The Company has at all times complied in all material respects with the
Financial Services Xxx 0000 (the "FSA") and all applicable rules and
regulations made thereunder and the Company does not engage or permits
others to engage nor has it, at any time since the coming into force of
the FSA, engaged or permitted others to engage in activities the carrying
out of which constitutes carrying out investment business in the United
Kingdom without itself or any relevant third party being authorised or
exempt under the FSA in
33
respect thereof.
26.5 Full details of all authorisations to carry on investment business in the
United Kingdom (including details of memberships of self-regulatory
organisations ("SROs") as defined in the FSA) for which application has
been made (whether or not the application is pending or was withdrawn,
refused or granted) by or on behalf of the Company have been supplied in
writing to the Purchaser, including, where applicable, full details of the
scope of the Company's permitted business.
26.6 The Company has at all times complied with all rules and other
requirements of the relevant SRO and/or the Securities Investment Board
("SIB") and there are no circumstances which, if known to the relevant SRO
or to SIB, might prejudice its membership or authorisation.
26.7 No special conditions or limitations have been imposed by any relevant SRO
or SIB in respect of the conduct of investment business by the Company, no
waiver of any requirements has been sought by or granted to the Company
and the Company has not engaged in any acts or practices or suffered to
exist any state of affairs (i) which has led to a request (whether or not
the request is pending or was subsequently withdrawn or refused) by the
relevant SRO or SIB to alter or amend the manner in which investment
business is or was being carried on or (ii) which has led to the
imposition of specific conditions in respect of the conduct of investment
business or (iii) which could if known to any relevant SRO or SIB lead to
such a request or to the imposition of such conditions or otherwise
adversely affect the Company's membership of an SRO or authorisation by
SIB.
26.8 Copies of each annual review of the arrangements for compliance with the
conduct of business rules of each relevant SRO and SIB undertaken by or on
behalf of the Company and of each periodic inspection carried out by any
SRO and SIB have been supplied to the Purchaser together with copies of
all correspondence between the Company and the relevant SRO or SIB.
26.9 Any action requested any of the relevant SROs or SIB has been taken within
any time limit specified and any request for action or activities to be
discontinued has been complied with in a timely manner.
26.10 All complaints made to the Company in relation to investment business have
been dealt with in accordance with the rules of the relevant SRO and SIB
and none of such complaints remain outstanding. Copies of all such
complaints have been supplied to the Purchaser including copies of all
records relating thereto required to be kept by the rules of the relevant
SRO or SIB. There are no investigations, disciplinary proceedings or other
circumstances likely to lead to any complaint or claim or legal action,
proceedings or
34
arbitration or prosecution by the relevant SRO or SIB or any other person.
26.11 The Company has all applicable up to date compliance manuals and is in
compliance therewith.
26.12 Full details of all arrangements, whether or not legally binding, between
the Company and any entity or person who is not an employee but which or
who represents the Company or promotes contracts to which the Company is
to be a party have been disclosed in the Disclosure Letter together with
the name and address of each such entity or person.
26.13 All papers, documents and accounts have been supplied to the relevant SRO
in accordance with its rules, including (without limitation) financial
statements as at the Accounts Date and annual statements together with
auditors' reports in respect of all relevant periods thereafter.
26.14 The Company is in compliance with the Financial Services (Client Money)
Regulations 1987 as amended.
26.15 To the extent that the Company is required by the rules of the relevant
SRO to be registered, it is so registered and notification has been given
to the relevant SRO of any information that is required to be given in
relation to registration.
26.16 There are no moneys owing to any SRO in respect of registration fees of
the Company.
26.17 There is no investment business carried on in the United Kingdom in
respect of which the Company is exempt; the Company is not nor has it ever
been an appointed representative of another entity pursuant to section 44
of the FSA; nor is it included in the list of institutions maintained by
the Bank of England pursuant to section 43 of the FSA. No application for
exempt status pursuant to section 43 of the FSA has been made and
withdrawn or refused or is still pending.
26.18 To the best of the knowledge, information and belief of the Seller, no
employee or other person who represents or promotes the products of the
Company in connection with investment business has been disqualified under
section 59 of the FSA and none is or has ever been a party to any
disqualification proceedings.
26.19 The Company has not entered into any investment agreement in circumstances
which may result in such agreement being or becoming unenforceable or
cancellable at the option or application of the other party to the
agreement or of any other party.
26.20 There are no penalties, fines or other disciplinary actions which may be
taken against the
35
Company as a result of incomplete, erroneous or misleading returns made to
the Occupational Pensions Board.
27. The Accounts and Tax
27.1 The Company has no liability in respect of Taxation (whether actual or
contingent) that is not fully provided for in the Accounts and, in
particular, has no outstanding liability for:-
(A) Taxation in any part of the world assessable or payable by reference
to profits, gains, income or distributions earned, received or paid
or arising or deemed to arise on or at any time prior to the
Accounts Date or in respect of any period starting before the
Accounts Date; or
(B) for purchase, value added, sales or other similar tax in any part of
the world referable to transactions effected on or before the
Accounts Date
that is not provided for in full in the Accounts.
27.2 The amount of the provision for deferred Taxation in respect of the
Company contained in the Accounts was, at the Accounts Date, adequate and
fully in accordance with accountancy practices generally accepted in the
United Kingdom and commonly adopted by companies carrying on businesses
similar to those carried on by the Company and, in particular, was in
accordance with SSAP 15 (or any replacement of it instituted by the
Accounting Standard Board).
27.3 If all facts and circumstances which are now known to the Company or the
Seller had been known at the time the Accounts were drawn up, the
provision for deferred Taxation that would be contained in the Accounts
would be no greater than the provision which is so contained.
28. Tax Events Since the Accounts Date
Since the Accounts Date:-
(A) the Company has not declared, made or paid any distribution within
the meaning of ICTA 1988;
(B) the accounting period of the Company has not ended;
(C) there has been no disposal of any asset (including trading stock) or
supply of any service or business facility of any kind (including a
loan of money or the letting,
36
hiring or licensing of any property whether tangible or intangible)
in circumstances where the consideration actually received or
receivable for such disposal or supply was less than the
consideration which could be deemed to have been received for tax
purposes;
(D) no event has occurred which will give rise to a tax liability on the
Company calculated by reference to deemed (as opposed to actual)
income, profits or gains or which will result in the Company
becoming liable to pay or bear a tax liability directly or primarily
chargeable against or attributable to another person, firm or
company;
(E) no disposal has taken place or other event occurred which will or
may have the effect of crystallising a liability to Taxation which
should have been included in the provision for deferred Taxation
contained in the Accounts if such disposal or other event had been
planned or predicted at the Accounts Date;
(F) the Company has not made any payment or incurred any obligation to
make a payment which will not be deductible in computing trading
profits for the purposes of corporation tax, or be deductible as a
management expense of an investment company;
(G) the Company has not been a party to any transaction for which any
tax clearance provided for by statute has been or could have been
obtained;
(H) the Company has not paid or become liable to pay any interest or
penalty in connection with any tax, has otherwise paid any tax after
its due date for payment or owes any tax the due date for payment of
which has passed or will arise in the 30 days after the date of this
Agreement.
29. Tax Returns, Disputes, Records and Claims, etc.
29.1 The Company has made or caused to be made all proper returns required to
be made, and has supplied or caused to be supplied all information
required to be supplied, to any revenue authority, including (but without
limitation) the Inland Revenue and the Customs and Excise in each case
within the requisite period.
29.2 There is no dispute or disagreement outstanding at the date of this
Agreement with any revenue authority regarding liability or potential
liability to any tax or duty (including in each case penalties or
interest) recoverable from the Company or regarding the availability of
any relief from tax or duty to the Company and there are no circumstances
which make it likely that any such dispute or disagreement will commence.
37
26.3 The Company has sufficient records relating to past events, including any
elections made, to calculate the tax liability or relief which would arise
on any disposal or on the realisation of any asset owned at the Accounts
Date by the Company or acquired by it since that date but before
Completion.
26.4 The Company has duly submitted all claims and disclaimers which have been
assumed to have been made for the purposes of the Accounts.
29.5 The amount of tax chargeable on the Company during any accounting period
ending on or within six years before the Accounts Date has not, to any
material extent, depended on any concession, agreement or other formal or
informal arrangement with any revenue authority, including (but without
limitation) the Inland Revenue or the Customs and Excise.
29.6 The Company has not received any notice from any revenue authority,
including the Inland Revenue, which required or will or may require it to
withhold tax from any payment made since the Accounts Date or which will
or may be made after the date of this Agreement.
30. Stamp Duty and Stamp Duty Reserve Tax
30.1 All documents which are required to be stamped and which are in the
possession of the Company or by virtue of which the Company has any right
have been duly stamped.
30.2 Since the last Accounting Date, the Company has not incurred any liability
to stamp duty reserve tax.
31. Value Added Tax
31.1 The Company is registered for the purposes of value added tax and has been
so registered at all times that it has been required to be registered by
the relevant legislation and has, throughout the six years ending on the
Completion Date, been treated for the purposes of section 43 VATA 1994 as
a member of the VAT Group.
31.2 The Company will cease to be a member of the VAT Group on the Completion
Date.
31.3 The Representative Member has made, given, obtained and kept full,
complete, correct and up-to-date returns, records, invoices and other
documents appropriate or required for the purposes of VATA 1994 and is not
in arrears with any payments or returns due and has not been required by
the Commissioners of Customs & Excise to give security under paragraph 4
of Schedule 11 VATA 1994.
38
31.4 The Representative Member has not, since the date 12 months before the
Accounts Date, been in default in respect of any prescribed accounting
period as mentioned in section 59 or section 59A VATA 1994.
31.5 Within the six years ending on the Accounts Date, the Company has not been
registered for the purposes of VATA 1994 otherwise than as part of the VAT
Group referred to in 31.1 above and it has not, within that six-year
period, been a member of any other group for the purposes of VATA 1994.
31.6 Full details of any claim made by the Company for bad debt relief under
section 36 VATA 1994 have been disclosed in writing to the Purchaser.
31.7 The Company has not made an election to waive exemption in relation to any
land in accordance with paragraph 2 of Schedule 10 VATA 1994.
31.8 The Disclosure Letter contains full details of any assets of the Company
to which the provisions of Part XV Value Added Tax Regulations 1995 (the
capital goods scheme) apply and in particular:-
(A) the identity (including, in the case of leasehold property, the term
of years), date of acquisition and cost of the asset; and
(B) the proportion of input tax for which credit has been claimed
(either provisionally or finally in a tax year and stating which).
31.9 No agreement or arrangements have been made or are in place under which
the Company is or could become liable (except as provided for in the
Accounts) to make any payment to the Representative Member (or any other
past or present member of the VAT Group) in respect of some or all of the
Representative Member's liability to account to H.M. Customs & Excise for
VAT.
31.10 The Company has not, at any time within the last six years, acted as agent
of any person not resident in the United Kingdom for the purposes of
section 47 VATA 1994 or been appointed as a VAT representative of any
person for the purposes of section 48 VATA 1994.
32. Duties, etc.
All value added tax, import duty and other taxes or charges payable to
H.M. Customs and Excise upon the importation of goods and all excise
duties payable to H.M. Customs and Excise in respect of any assets
(including trading stock) imported, owned or used by the
39
Company have been paid in full.
33. Tax on Disposal of Assets
On a disposal of all its assets by the Company for:-
(A) in the case of each asset owned by it at the Accounts Date, a
consideration equal to the value attributed to that asset in
preparing the Accounts; or
(B) in the case of each asset acquired since the Accounts Date, a
consideration equal to the consideration given for the acquisition
then either:-
(i) in respect of any asset falling within ((A)) above, the
liability to tax (if any) which would be incurred by it in
respect of that asset would not exceed the amount taken into
account in respect of that asset in computing the maximum
liability to deferred Taxation as stated in the Accounts; or
(ii) in respect of any asset within ((B)) above, no tax liability
would be incurred by it in respect of that asset.
34. Replacement of Business Assets
Full particulars of each claim under section 115, 116 or 117 CGTA 1979 or
under sections 152, 153, 154 or 175 TCGA 1992 made prior to the date of
this Agreement applies and which affects any asset which was owned by the
Company on or after the Accounts Date have (except where the held over
gain is treated as having accrued prior to the Accounts Date) been
disclosed in writing to the Purchaser.
35. Distributions
35.1 Since 6 April 1965, the Company has not made any repayment of share
capital to which section 210(1) ICTA 1988 applies or issued any share
capital or other security as paid up otherwise than by the receipt of new
consideration within the meaning of Part VI ICTA 1988.
35.2 No part of the amount payable on redemption of any share capital or
security at par will be a distribution, as defined in ICTA 1988.
36. Rebasing
40
The Company has not made a disposal to which Section 35 TCGA applies.
37. Close Company
37.1 The Company is not nor has it ever been a close company as defined in ICTA
1988.
37.2 The Company has no loan outstanding to which the provisions of section 419
ICTA 1988 would apply (loans to participators etc.).
37.3 The Company is a close investment-holding company as defined in section
13A ICTA 1988.
38. Non-Deductible Revenue Outgoings
The Company is not under any obligation to make any future payment which
will be prevented (whether on the grounds of being a distribution or for
any other reason) from being deductible for corporation tax purposes,
whether as a deduction in computing the profits of a trade or as an
expense of management or as a charge on income or as a non-trading debit
under Chapter II Part IV Finance Xxx 0000, by reason of any statutory
provision, other than section 74(1)(f) ICTA 1988 (capital).
39. Deductions and Withholdings
The Company has made all deductions in respect, or on account, of any tax
from any payments made by it which it is obliged or entitled to make and
has accounted in full to the appropriate authority for all amounts so
deducted.
40. Intra-Group Transactions
The Company has not, at any time within the six year period prior to the
Accounts Date, acquired any asset from any other company which was, at the
time of the acquisition, a member of the same group of companies as the
Company for the purposes of any tax.
41. Residence
The United Kingdom is the only country whose tax authorities seek to
charge tax on the world-wide profits or gains of the Company and the
Company has never paid tax on income profits or gains to any tax authority
in any other country.
42. Group Arrangements
41
42.1 The Company has not made any surrender of or claim for (i) group relief or
(ii) any amount of surplus advance corporation tax or (iii) a refund of
tax within section 102 Finance Act 1989 which involves any other company
which was not a Subsidiary.
42.2 The Company has not received any payment in respect of a surrender of
group relief or of surplus advance corporation tax or of a tax refund
which could, in any circumstances, be due to be repaid to any other
company which was not a Subsidiary.
43. Demerger
The Company has not been concerned in an exempt distribution (as defined
in section 214(4) ICTA 1988).
44. Non-Arm's Length Transactions
The Company is not a party to any transaction or arrangement under which
it may be required to pay for any asset or services or facilities of any
kind an amount which is in excess of the market value of that asset or
services or facilities or will receive any payment for any asset or
services or facilities of any kind that it has supplied or provided or is
liable to supply or provide which is less than the market value of that
asset or services or facilities.
Schedule 3
Seller's Limitations on Liability
A. Agreements to Which This Schedule is Applicable
Notwithstanding anything in this Agreement to the contrary, the provisions
of this schedule shall operate to limit, to the extent specified but not
otherwise, the liability of the Seller both in respect of any claim by the
Purchaser for any breach of or inaccuracy in the Warranties, under the Tax
Covenant or in respect of any other undertakings (an "Undertaking") given
by or on behalf of the Seller in or pursuant to this Agreement.
B. Limitations on Liability Under Warranties, Undertakings and the Tax
Covenant
1. Limitation on Amount
1.1 The Purchaser shall not be entitled in any event to damages in respect of
any claim or claims under any of the Warranties or under the Tax Covenant
unless and until:-
(A) the aggregate amount of all such substantiated claims exceeds
(pound)100,000; and
(B) the amount of any individual substantiated claim shall exceed
(pound)10,000
where "substantiated" means a claim for which the Seller may be liable
after taking into account the provisions of paragraph 1.1((B)) and which
is admitted or proved in a court of competent jurisdiction,
PROVIDED that the total aggregate liability of the Seller for breach of
the Warranties or under the Tax Covenant shall not in any event exceed
(pound)7,000,000. There shall be no limit on the liability of the Seller
under the Undertakings including, without limitation, the Undertaking set
out in clause of this Agreement.
1.2 For the purpose of sub-paragraph 1.1((B)):
(A) where a claim relates to more than one event, circumstance, act or
omission which event, circumstance, act or omission would separately
constitute a breach of or give rise to a claim for breach of any of
the Warranties or under the Tax Covenant, such claim shall be
treated as a separate claim in respect of each such event,
circumstance, act or omission.
(B) all claims arising out of or relating to the same or similar events
or circumstances shall be treated as a single claim.
2. Time Limits for Bringing Claims
43
No claim shall be brought against the Seller in respect of any breach of
the Warranties or under the Tax Covenant unless the Purchaser shall have
given to the Seller written notice of such claim specifying (in reasonable
detail) the matter which gives rise to the breach or claim, the nature of
the breach or claim and the amount claimed in respect thereof (detailing
the Purchaser's calculation of the loss thereby alleged to have been
suffered by it or the Company if relevant):-
(A) on or before the seventh anniversary of Completion in respect of
claims in respect of any breach of the Tax Warranties or under the
Tax Covenant; or
(B) on or before the date falling three months after the completion of
the accounts of the Company in respect of the financial year ending
on 31 December 1998, in respect of any other matters.
PROVIDED that the Purchaser's compliance with sub-clause (A) of clause 7
(Claims Procedure) of the Tax Covenant shall be sufficient notice of a
claim under the Tax Covenant or in respect of any breach of the Tax
Warranties for the purposes of this paragraph.
No time limit shall apply in relation to claims under the Undertaking set
out in clause of this Agreement.
3. Conduct of Litigation
3.1 Upon the Purchaser or the Company becoming aware of any claim, action or
demand against it or matter likely to give rise to any of these in respect
of the Non-Tax Warranties, the Purchaser shall and shall procure that the
Company shall:-
(A) as soon as reasonably practicable notify the Seller by written
notice as soon as it appears to the Purchaser that the Seller is or
may become liable under the Non-Tax Warranties;
(B) subject to the Seller indemnifying the Purchaser and/or the Company
to their reasonable satisfaction against any liability, costs,
damages or expenses which may be incurred thereby, take such action
and give such information and access to personnel, premises,
chattels, documents and records to the Seller and their professional
advisers as the Seller may reasonably request and the Seller shall
be entitled to require the Company to take such action and give such
information and assistance in order to avoid, dispute, resist,
mitigate, settle, compromise, defend or appeal any claim in respect
thereof or adjudication with respect thereto;
44
(C) at the request of the Seller, allow the Seller to take the sole
conduct of such actions as the Seller may deem appropriate in
connection with any such assessment or claim in the name of the
Purchaser or the Company and in that connection the Purchaser shall
give or cause to be given to the Seller all such assistance as the
Seller may reasonably require in avoiding, disputing, resisting,
settling, compromising, defending or appealing any such claim and
shall instruct such solicitors or other professional advisors as the
Seller may nominate to act on behalf of the Purchaser or the
Company, as appropriate, but to act in accordance with the Seller's
sole instructions;
(D) make no admission of liability, agreement, settlement or compromise
with any third party in relation to any such claim or adjudication
without the prior written consent of the Seller, such consent not to
be unreasonably withheld or delayed; and
(E) take all reasonable action (having regard to the commercial
interests of the Company) to mitigate any loss suffered by it in
respect of which a claim could be made under the Non-Tax Warranties.
4. No Liability if Loss is Otherwise Compensated for
Single claim
4.1 The Seller shall not be liable for breach of any of the Non-Tax Warranties
to the extent that the subject of the claim has been or is made good or is
otherwise compensated for without cost to the Purchaser or to the Company.
Taxation
4.2 In calculating the liability of the Seller for any breach of the Non-Tax
Warranties, there shall be taken into account the amount by which any
taxation for which the Company is now or in the future accountable or
liable to be assessed is reduced or extinguished as a result of the matter
giving rise to such liability.
Insurances
4.3 If, in respect of any matter which would give rise to a breach of the
Non-Tax Warranties or a claim under the Undertakings, the Company is
entitled to claim under any policy of insurance, then no such matter shall
be the subject of a claim under the Warranties or the Undertakings unless
and until the Company shall have made a claim against its insurers and any
such insurance claim (or any claim which could have been made had such
policies or their equivalents been maintained as aforesaid) shall then
reduce by the amount
45
recovered or extinguish any such claims for breach of the Non-Tax
Warranties or under the Undertakings.
Recovery From Third Parties
4.4 (A) Where the Purchaser and/or the Company are at any time entitled to
recover from some other person any sum in respect of any matter
giving rise to a claim under the Non-Tax Warranties the Purchaser
shall, and shall procure that the Company shall, undertake all
necessary steps to enforce such recovery prior to taking action
against the Seller (other than to notify the Seller of the claim
against the Seller) and, in the event that the Purchaser or the
Company shall recover any amount from such other person, the amount
of the claim against the Seller shall be reduced by the amount
recovered, less all reasonable costs, charges and expenses incurred
by the Purchaser or the Company recovering that sum from such other
person.
(B) If the Seller shall pay at any time to the Purchaser or the Company
an amount pursuant to a claim in respect of the Non-Tax Warranties
and the Purchaser or the Company subsequently become entitled to
recover from some other person any sum in respect of any matter
giving rise to such claim, the Purchaser shall, and shall procure
that the Company shall take all necessary steps to enforce such
recovery, and shall forthwith repay to the Seller so much of the
amount paid by the Seller to the Purchaser or the Company as does
not exceed the sum recovered from such other person less all
reasonable costs, charges and expenses incurred by the Purchaser or
the Company recovering that sum from such other person.
(C) If any amount is repaid to the Seller by the Purchaser or the
Company pursuant to sub-paragraph 4.4(B) above an amount equal to
the amount so repaid shall be deemed never to have been paid by the
Seller to the Purchaser for the purposes of paragraph 1.
5. Acts of the Purchaser
5.1 No claim shall lie against the Seller under the Non-Tax Warranties to the
extent that such claim is wholly or partly attributable to:-
(A) any voluntary act, omission, transaction, or arrangement carried out
at the request of or with the consent of the Purchaser before
Completion;
46
(B) any voluntary act, omission, transaction, or arrangement carried out
by the Purchaser or on its behalf or by persons deriving title from
the Purchaser on or after Completion; or
(C) any explicit admission of liability made after the date hereof by
the Purchaser or on its behalf or by persons deriving title from the
Purchaser on or after Completion.
5.2 The Seller shall not be liable for any breach of Non-Tax Warranties which
would not have arisen but for any reorganisation or change in ownership of
the Company after Completion or any changes in the accounting basis on
which the Company values its assets or any other change in accounting
policy or practice of the Company after Completion.
6. Allowance, Provision or Reserve in the Accounts
6.1 No matter shall be the subject of a claim for breach of any of the Non-Tax
Warranties or under the Undertakings to the extent that allowance,
provision or reserve in respect of such matter shall have been made in the
Accounts or has been included in calculating creditors or deducted in
calculating debtors in the Accounts and (in the case of creditors or
debtors) is identified in the records of the Company or shall have been
otherwise taken account of or reflected in the Accounts.
6.2 Notwithstanding sub-paragraph above, if at any time after Completion and,
in the case of a claim under the Non-Tax Warranties, within the time limit
applicable to the Non-Tax Warranties set out in paragraph above (or at any
time thereafter while any such claim remains not fully determined) the
amount of any allowance, provision or reserve in respect of any liability
of the Seller under the Non-Tax Warranties or the Undertakings (other than
the Undertaking set out in clause) made in the Accounts or otherwise taken
account of or reflected therein is found to be in excess of the matter for
which such allowance, provision or reserve was made, the amount of such
excess (the "Excess Amount") shall be applied in the following manner:-
(A) if the Seller shall, prior to the date on which the Excess Amount is
ascertained, have made any payment or payments in respect of the
Non-Tax Warranties or the Undertakings then the Purchaser shall
forthwith repay to the Seller a sum equal to such part of the Excess
Amount as does not exceed the aggregate of those of such prior
payments by the Seller as shall not have been previously refunded
pursuant to this sub-clause; and
(B) where sub-paragraph 6.2((A)) above does not apply or where such
sub-paragraph does apply but there remains a balance of the Excess
Amount after the application of that sub-paragraph, then the Excess
Amount or the balance remaining, as the case may
47
be, shall be applied in reducing any liability of the Seller that
may subsequently arise under the Non-Tax Warranties or the
Undertakings.
7. Retrospective Legislation
No liability shall arise in respect of any breach of any of the Non-Tax
Warranties or under the Undertakings if and to the extent that liability
for such breach occurs or is increased wholly or partly as a result of any
legislation not in force at the date hereof which takes effect
retrospectively.
8. Taxation Warranties
8.1 The Seller shall not be liable for a breach of a Tax Warranty relating to
a post-Accounts Date tax liability unless such tax liability Abbey
National as a consequence of or by reference to any of the events listed
in paragraphs (a) to (e) inclusive of sub-clause (ii) of clause 2
(Covenant) of the Tax Covenant.
In this paragraph 8.1, a post-Accounts Date tax liability means a tax
liability of the Company which Abbey National as a consequence of or by
reference to an event occurring or being deemed to occur after the
Accounts Date.
8.2 Clauses 3 (Limits on Clause 2), 4 (Mitigation), 5 (Over-Provisions,
Reliefs, etc), 6 (Recovery from Other Persons), 7 (Claims Procedure), 9
(Due Date of Payment) and 10 (Deductions from Payments, etc) of the Tax
Covenant shall apply mutatis mutandis to claims, liabilities and payments
in respect of the Tax Warranties as they apply to claims, liabilities and
payments under the Tax Covenant.
9. Loss of Goodwill or Business
No claim shall lie against the Seller under the Non-Tax Warranties to the
extent that the subject of the claim relates to the fact that the Company
has lost goodwill or possible business.
10. Payment of Claim to be Additional Consideration for the Consideration
Shares
Any payment made by the Seller in respect of any claim under the
Warranties or the Undertakings shall be deemed to be additional
consideration given by the Seller for the Consideration Shares under
clause 3 (Consideration) of this Agreement.
48
Schedule 4
Tax Covenant
The Tax Covenant shall be in the form of the deed prepared by Xxxxxxxxx and May
which has (for the purposes of identification only) already been initialled by
the Seller.
49
Schedule 5
Basic Information about the Company
50
1. Registered number : 2055101
2. Date of incorporation : 15 September 1986
3. Place of incorporation : England
4. Address of registered office : Xxxxx Xxxxx
Xxxxx Xxxxxx
Xxxxxx XX0 0XX
5. Class of company : Private limited
6. Authorised share capital : (pound)2,500
7. Issued share capital : (pound)2,500
8. Loan capital : None
9. Directors:
Full name
Xxxxxx Xxx Xxxxxxx Budden
Xxxxx Xxxxxx
Xxxxxx Xxxxx Xxxxxxx
Xxxxxxx Xxxxxx Xxxxx
10. Joint Secretaries:
Full name
Xxx Xxxxxxx Xxxxxxxx/Xxxxx Xxxxxxxx
11. Accounting reference date : 31 December
51
12. Auditors : Coopers & Xxxxxxx
13. Tax residence : United Kingdom
14. Business activities : independent financial
advisory company
--------------------------------------------------------------------------------
Schedule 6
Intellectual Property
Part A
1. Registered Trade and Service Marks
Country Xxxx Number Class of goods or Date of next renewal
services for which
registered
None
2. Trade Xxxx and Service Xxxx Applications
Country Xxxx Number Date of application Class of goods or
services for which
protection sought
None
3. Unregistered Trade and Service Marks
Country Xxxx Date use commenced Class of goods or services on which
used
None
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
53
4. Registered Designs
Country Number Subject matter Date of next renewal
None
5. Registered Design Applications
Country Subject matter Date of application
None
Part B
6. Licences and User Agreements
A. Details (grantor, grantee, country, subject matter and term) of all
licences and user agreements granted to the Company.
Grantor Grantee Country Subject Matter Term
------- ------- ------- -------------- ----
None
B. Details (grantor, grantee, country, subject matter and term) of all
licences and user agreements granted from the Company
None
--------------------------------------------------------------------------------
Schedule 7
Pensions
1. DEFINITIONS
(A) For the purposes of this Schedule the following expressions shall have the
following meanings:-
the "Company" means Abbey National Independent
Financial Advisers Limited
"Completion Date" means the date of this Agreement
"Former Schemes" means all occupational pension schemes
(as defined in section 1 of the Pension
Schemes Act 1993) in which the Company
has participated at any time after 30
June 1992 and prior to Completion and to
which the Company may be required to make
a payment pursuant to Section 75 of the
Pensions Act 1995 or otherwise as a
result of the liabilities of the scheme
exceeding the value of its assets,
excluding any money purchase schemes (as
defined in section 181 of the Pension
Schemes Act 1993) and the Seller's
Scheme.
"Participation Period" means the period during which the
Purchaser and/or the Company, as the case
may be participates in the Seller's
Scheme and ending no later than the date
on which the Seller or any associated
company ceases to own a shareholding in
excess of 40% of the total issued share
capital of the Purchaser or such lower
figure as may be agreed by the Seller and
Xxxxxx Group plc and which does not
prejudice Inland Revenue approval of the
continued participation pursuant to
paragraph 2 of this Schedule.
"Pensionable Age" means, in relation to a Pensionable
Employee, the age specified in the rules
of the Seller's Scheme as the age at
which such Pensionable Employee should
normally retire.
55
"Pensionable Employees" means:
(i) such of the Relevant Employees at
Completion as are then members
of the Seller's Scheme; and
(ii) such of the Relevant Employees who
become members of the Seller's
Scheme during the Participation
Period.
"Relevant Employees" means the employees of the Company at the
date of this Agreement.
"Seller's Scheme" means:
(i) the Abbey National Group Pension
Scheme constituted and
established by an interim trust
deed dated 5th August 1996 or,
if the context so requires, the
trustees of that scheme; or
(ii) the Abbey National Money Purchase
Pension Scheme constituted and
established by an interim trust
deed dated 24th June, 1991 and
currently governed by a trust
deed dated 3rd December 1996 or,
if the context so requires, the
trustees of that scheme; or
(iii) the Abbey National (Associated
Bodies) Pension Fund constituted
and established by an interim
trust deed dated 17th December
1986 and currently governed by a
trust deed dated 31st May 1994,
or, if the context so requires,
the trustees of that scheme; or
(iv) the Abbey National Amalgamated
Pension Fund constituted and
established by trust deeds dated
10th February 1954, 13th October
1958 and 1st September 1970 or,
if the context so requires, the
trustees of that scheme; or
56
(v) the National and Provincial
Building Society Pension Fund
constituted and established by a
trust deed dated 1st April 1955,
and currently governed by a
definitive deed dated 25th March
1994 or, if the context so
requires the trustees of that
scheme.
(B) The provisions of this Schedule shall apply separately to each Seller's
Scheme and references to "Seller's Scheme" shall be construed accordingly.
(C) Save where specifically defined or where the context otherwise requires,
words and expressions used in Chapter I of Part XIV of the Income and
Corporation Taxes Xxx 0000 or in the Xxxxxxx Xxxxxxx Xxx 0000 shall have
the same meanings in this Schedule.
(D) References in this Schedule to any statute or statutory provision shall
include any statute or statutory provision which amends, extends,
consolidates or replaces the same.
2. MATTERS RELATING TO THE SELLER'S SCHEME
(A) The Seller's undertakings
(i) The Seller shall procure that:
(a) subject to the consent of the Commissioners of Inland Revenue (which
the Seller shall use its reasonable endeavours to obtain) the
Company is permitted to continue its participation and the Purchaser
is admitted to participation in the Seller's Scheme for such time as
they employ any Relevant Employee;
(b) each of the Relevant Employees who during the Participation Period
would have become a member of the Seller's Scheme but for the
transactions provided for in this Agreement is permitted to become a
member of the Seller's Scheme in respect of the Participation Period
or the applicable part of it.
(ii) The Seller shall use reasonable endeavours to procure that:
(a) the Seller's Scheme will be an exempt approved scheme for a period
of at least one year from the Completion Date; and
(b) the Seller's Scheme or alternative equivalent pension arrangements
will be maintained in relation to the Pensionable Employees in full
force and effect for a period of at least one year from the
Completion Date;
57
(B) The Purchaser's undertakings
The Purchaser undertakes that it and the Company (for as long as they
participate in the Seller's Scheme) will:
(i) pay to the Seller's Scheme the contributions due and payable in
respect of the Participation Period (but not any period before the
Completion Date) to the Seller's Scheme by and in respect of each
Pensionable Employee (but only for such part of the Participation
Period that the Pensionable Employee is accruing benefits in the
Seller's Scheme), calculated at the rates and otherwise on the basis
applicable to all Employers in the Seller's Scheme;
(ii) comply during the Participation Period in all other respects with
the provisions of the Seller's Scheme;
(iii) not do or omit to do during the Participation Period any act or
thing whereby the approval of the Seller's Scheme as an exempt
approved scheme or as a contracted-out scheme would or might be
prejudiced;
(iv) not exercise any power, right or discretion conferred on it under or
in relation to the Seller's Scheme whether as an employer or
otherwise, including (without limitation) any power, right or
discretion conferred by law, without the prior written consent of
the Seller (such consent not to be unreasonably withheld or delayed)
and on such terms (whether as to payment of additional contributions
to the Seller's Scheme or otherwise) as the Seller may agree; and
(v) appoint such company as the Seller may nominate to act on its behalf
in relation to the Seller's Scheme for the purpose of dealing with
the provisions of the Pensions Xxx 0000 and the Xxxxxxx Xxxxxxx Xxx
0000 and do all such acts and execute and/or sign all such documents
as the Seller may reasonably consider necessary or desirable in
connection therewith.
(C) Parties to do everything necessary to comply with contracting-out
requirements
The Seller and the Purchaser shall take, and the Purchaser shall procure
that the Company take, such steps as may be required of them, including
the completion of any notices and elections, to procure that the Purchaser
and the Company:
(i) holds or continues to be named in a contracting-out certificate on a
reference
58
scheme basis or otherwise, as the case may be, in relation to the
Seller's Scheme in respect of the Participation Period; and
(ii) ceases to hold or be named in such certificate with effect from the
end of the Participation Period.
(D) The Seller's covenant in respect of any residual liabilities in relation
to the Former Schemes
The Seller hereby covenants with the Purchaser to pay to the Purchaser (so
far as possible by way of repayment of the consideration payable for the
Shares pursuant to this Agreement) forthwith upon demand and together with
interest at the Agreed Interest Rate from the date of such demand until
the date of payment an amount equal to any payment the Company or any
member of the Purchaser's Group is or becomes liable to make to any Former
Scheme whether before, at or after Completion, whether pursuant to,
Section 75 of the Pensions Xxx 0000, or otherwise other than payments
pursuant to the other provisions of the Schedule.
3. PENSION WARRANTIES
The Seller represents, warrants and undertakes, and save as disclosed in
the Disclosure Letter, that:
(A) Seller's Scheme is the only funded pension/disability arrangement
Other than the Seller's Scheme and the State scheme there is no
arrangement to which the Company contributes or under which it has any
obligation (whether legally enforceable or not) under which benefits of
any kind are payable to or in respect of any of the Relevant Employees on
retirement, death or disability or on the attainment of a specified age or
on the completion of a specified number of years of service or in relation
to sickness after retirement.
(B) All material Seller's Scheme documents supplied
The trust deeds and rules of the Seller's Scheme, together with all
material announcements (to members of the Seller's Scheme who are Relevant
Employees) which have not been incorporated into the Trust Deed and Rules
of the Seller's Scheme have been supplied to the Purchaser or the
Purchaser's advisers and are attached to the Disclosure Letter.
(C) Exercise of discretion or power
59
No discretion or power has been exercised under the Seller's Scheme in
respect of members of that Scheme who are Relevant Employees to augment
benefits or to provide a benefit which would not otherwise be provided.
(D) Adherence
The Company adheres to the Seller's Scheme in respect of the Pensionable
Employees.
(E) Exempt Approval
The Seller's Scheme is an exempt approved scheme or capable of exempt
approval.
(F) Contracting-out
The Seller's Scheme is a contracted-out scheme and the Company is named in
a contracting-out certificate in relation to the Seller's Scheme.
(G) Contributions
There are not at the date hereof any contributions from or in respect of
any of the Relevant Employees or other payments which have fallen due but
are unpaid in respect of the Seller's Scheme except for contributions
which may be due in respect of the current or previous four weekly
accounting period.
(H) Claims
So far as the Seller is aware there are no actions, suits or claims (other
than routine claims for benefits) outstanding, pending or threatened
against the Trustees or Administrator of the Seller's Scheme or against
the Seller or the Company in respect of any matter arising out of or in
connection with the Seller's Schemes in respect of any Pensionable
Employees.
(I) Overriding Provisions
(i) The Seller's Scheme does not distinguish between male and female
members (except in relation to maternity) in the provision of
benefits relating to Pensionable Service after 17th May 1990 (with
the exception of guaranteed minimum pensions) and no adverse
alteration has been made to benefits already accrued at the date of
announcing changes designed to equalise benefits.
(ii) So far as the Seller is aware the Seller's Scheme has been
administered in accordance with the preservation requirements within
the meaning of section 69
60
Pension Schemes Xxx 0000.
(iii) The Seller's Scheme has been administered in accordance with the
equal access requirements of section 118 Pension Schemes Xxx 0000.
(J) Former Scheme Liabilities
(i) The Company has not participated in any Former Scheme immediately
before or at a time when that scheme ceased to admit new members.
(ii) The Company has no liability to make any payment to the Seller's
Scheme or to any Former Scheme pursuant to section 75 of the
Pensions Xxx 0000.
(iii) The Company has no undischarged liability in respect of any Former
Scheme pursuant to Regulation 3 of the Occupational Pensions Schemes
(Deficiency on Winding up etc.) Regulations 1996.
61
Signatures
Signed by )
Xxxxxxx Xxxxx ) Xxxxxxx Xxxxx
for and on behalf of )
Abbey National Independent )
Consulting Group Limited )
Signed by )
Xxxxx Xxxxxxx ) Xxxxx Xxxxxxx
for and on behalf of )
Xxxxxx National Holdings )
Limited )
--------------------------------------------------------------------------------
Dated 11th December 1998
ABBEY NATIONAL INDEPENDENT CONSULTING
GROUP LIMITED
and
XXXXXX NATIONAL HOLDINGS LIMITED
-----------------------------------
ANIFA
Side Agreement to
Share Sale Agreement
-----------------------------------
Xxxxxxxxx and May,
00 Xxxxxxxxxx Xxxxxx,
Xxxxxx XX0X 0XX
Ref: JCXT/JMYA
--------------------------------------------------------------------------------
SIDE AGREEMENT
THIS AGREEMENT is made 11th December 1998
BETWEEN:-
1. Abbey National Independent Consulting Group Limited of Xxxxx Xxxxx,
Xxxxx Xxxxxx Xxxxxx XX0 0XX (registered in England No. 2506374) (the
"Seller")
AND
2. Xxxxxx National Holdings Limited of Xxx Xxxxxxx Xxxxxx, Xxxxxx XX0X
0XX (registered in England No. 3393377) (the "Purchaser").
WHEREAS:
(A) The parties entered into a Share Sale Agreement on 4th August, 1997
(the "Share Sale Agreement") whereby the Purchaser acquired all the
issued shares in Xxxxxx Xxxxxxx Financial Planning Limited Abbey
National Independent Financial Advisers Limited ("ANIFA")] from the
Seller.
(B) Under Clause 7 of the Share Sale Agreement the Seller agreed to
indemnify and keep indemnified the Purchaser from all claims,
losses, costs or other liabilities which the Purchaser and/or ANIFA
may suffer in respect of pensions missellings.
(C) The parties have decided to enter into this Side Agreement pursuant
to Clause 15.6 with respect to extending the indemnity provided for
under the Share Sale Agreement to include missellings of Free
Standing Additional Voluntary Contributions ("FSAVC") schemes.
IT IS AGREED AS FOLLOWS:
1. Terms and expressions in the Share Sale Agreement shall, unless the
context otherwise requires, have the same meanings when used in this Side
Agreement.
2. The parties agree that the definition of "affected person" set out in
clause 7.2 of the Share Sale Agreement shall be amended by inserting after
the words "Taxes Act 1988" in sub-paragraph (A) the following;
"or a retirement benefits scheme (as defined in section 611 of ICTA 1988)
established solely to accept contributions from employees to provide
additional benefits to those provided by their employers' pension scheme
(a free standing additional voluntary contribution scheme (including,
without limitation, any such scheme approved by the Board of Inland
Revenue pursuant to section 591(2)(h) of ICTA 1988)); and
by inserting after the words "so approved" in sub-paragraph (B) the
following:
"or such a free standing additional voluntary contribution scheme".
3. Save as set out in this Side Agreement, the terms and conditions of the
Share Sale Agreement remains and shall continue in full force and effect
and shall apply to the provisions of this Side Agreement.
4. This Side Agreement shall be governed by and shall be construed in
accordance with, English law.
Signatures
Signed by )
)
for and on behalf of )
Abbey National )
Independent Consulting )
Group Limited )
Signed by )
)
for and on behalf of )
Xxxxxx National Holdings )
Limited
