1
Exhibit 2.1
DATED 24th October 1996
X. XXXXXX ESQ. AND OTHERS (1)
PRIMARK INFORMATION SERVICES UK LIMITED (2)
AND
PRIMARK CORPORATION (3)
--------------------
AGREEMENT
FOR SALE/PURCHASE OF THE ISSUED SHARE
CAPITAL OF ICV LIMITED
--------------------
XXXXXX XXXX
LONDON
2
CONTENTS
--------
PAGE
RECITALS
CLAUSE HEADING
1 Definitions and interpretation ............................1
2 Purpose of this Agreement .................................9
3 Sale of the Sale Shares ...................................9
4 Consideration ............................................10
5 Completion ...............................................12
6 Post-Completion matters ..................................16
7 Warranties and qualifications to Warranties ..............16
8 Restrictive Covenants ....................................24
9 Indemnities ..............................................27
10 Continuing effects of this Agreement .....................28
11 Announcements ............................................28
12 Releases, waivers etc., by the Purchasers ................28
13 Notices ..................................................29
14 Time .....................................................30
15 Entire Agreement .........................................31
16 Alterations ..............................................31
17 Severability .............................................31
18 Counterparts .............................................31
19 Payment of costs .........................................32
20 Successors and Assigns ...................................32
21 Applicable law and submission to jurisdiction ............32
3
SCHEDULE
1 Vendors, the Warrantors and the Covenantors ..............34
Part A - The Vendors of the Sale Shares ..................34
Part B - The Warrantors ..................................37
Part C - The Covenantors .................................38
2 The Company ..............................................39
3 The Subsidiaries .........................................40
4 The Properties ...........................................43
5 DELETED - INTENTIONALLY LEFT BLANK .......................46
6 Directors and employees
Part A - Additional Directors ............................46
Part B - Persons to receive Service Agreements ...........46
Part C - Persons to receive deed of variation to
current service agreements ......................46
Part D- Resigning Directors ..............................46
Part E- New and Resigning Secretaries ....................47
7 DELETED - INTENTIONALLY LEFT BLANK
8 Matters warranted ........................................53
Part A - Warranties from the Vendors .....................53
Part B - General Warranties from the Warrantors ..........55
Part C - Taxation and social security warranties
from the Xxxxxxxxxx..............................00
0 Xxxxxxxxxx' Xxxxxxxxxx ...................................93
Agreed form documents
Service Agreements and amendments to contracts of employment
Loan Notes
Management Accounts
Letter from Cambridge Micro Applications (1985) Limited
Certificates referred to in clause 5.1(a)(viii)
Consents referred to in clause 5.1(b)(vii)
Letters of Credit
Legal opinions referred to in clause 5.1(d)(iv)
Taxation Deed
Registration Side Letter
Directors' and Secretary's resignation letters
GNI termination letter
Side letter relating to Royal Blue Technologies plc
4
THIS AGREEMENT is dated 24th October 1996 and is made BETWEEN:
(1) The persons whose names and addresses are stated in Part A of schedule 1
(together the "VENDORS" and each a "VENDOR");
(2) PRIMARK INFORMATION SERVICES UK LIMITED (No. 2701093) whose registered
office is at Xxxxxxxx Xxxxx, 00-00 Xxxx Xxxx, Xxxxxx XX0X 0XX ("PUK")
which expression shall include its successors and assigns) and
(3) PRIMARK CORPORATION whose principal place of business is 0000 Xxxxxx
Xxxxxx, Xxxxx 0000X Xxxxxxx, XX 00000 XXX ("P CORPORATION"), PUK and P
Corporation being together ("THE PURCHASERS").
NOW IT IS HEREBY AGREED as follows:
1 DEFINITIONS AND INTERPRETATION
-------------------------------
1.1 In this Agreement unless the context otherwise requires:
"ACCOUNTS" means the Company's audited annual accounts (as defined in
section 262 CA 1985) for the financial year ended on the Accounts Date,
including the notes to those accounts and the associated directors' and
auditors' reports;
"ACCOUNTS DATE" means 31 December 1995;
"ACTUAL TAXATION LIABILITY" means a liability to make an actual payment
of, or of an amount in respect of, Taxation whether or not such Taxation
is also or alternatively chargeable against or attributable to any other
person;
"AUDITORS" means the auditors of the Company namely Xxxxxx Xxxxxx,
Chartered Accountants, of 000 Xxxx Xxxx, Xxxxxx XX0X 0XX and where
applicable the auditors of the Subsidiaries;
"BOARD" means the board of directors of the Company;
"BUSINESS DAY" means a day on which banks are ordinarily open for the
transaction of normal banking business in London and Boston;
"CA 1985" means the Companies Xxx 0000;
"CASH VALUE" means the aggregate of the amount of cash in hand, deposited
but uncleared cheques (which subsequently clear in the normal period) and
sums standing to the credit of a current or other account of the Company
with banks or other financial institutions in the United Kingdom or
elsewhere as at the close of business on the Completion Date after
deduction of: (a) all outstanding cheques or other instruments drawn on or
before the Completion Date on such accounts; and (b) all sums paid or
payable by the Company in respect of which the
1
5
passed a special resolution pursuant to section 155 CA1985 on 21 October
1996; and (c) all Taxation payable by the Company in respect of the
payments described in (b) above;
"CAUSE" means in relation to a Covenantor: (a) failure by him to carry out
any lawful and reasonable instruction of his employer after warning in
accordance with the Company's written disciplinary procedure; or (b) gross
negligence; or (c) misconduct by wilful violation of established corporate
policies; or (d) commission of any criminal offence other than a road
traffic offence without a custodial sentence; or (e) any other
circumstance, act or omission entitling his employer to terminate his
Contract of Employment summarily;
"COMPANY" means ICV Limited (No. 1557537);
"COMPLETION" means completion of the sale and purchase of the Sale Shares
by the performance by the parties of their respective obligations under
clause 5;
"COMPLETION DATE" means the date hereof,
"CONFIDENTIAL INFORMATION" means trade secrets and information equivalent
to them (including but not limited to formulae, processes, methods,
knowledge, business plans, forecasts, customer lists, sales information
and Know-how) in connection with the products and the services supplied by
the Group and the customers and suppliers of the Group and which are for
the time being confidential to any Group Company;
"CONTRACT OF EMPLOYMENT" means in relation to any Covenantor his service
agreement or contract of employment with P Corporation or any of its
subsidiaries from time to time (including any Group Company);
"COVENANTORS" means those of the Vendors whose names are set out in Part C
of schedule 1;
"DISCLOSURE LETTER" means the letter of the same date as this Agreement
from the Warrantors to the Purchasers disclosing certain matters in
relation to the Warranties which has been delivered to the Purchasers
prior to the execution of this Agreement;
"ENVIRONMENT" means the environment as defined in section 1(2) of the
Environmental Protection Xxx 0000;
"ENVIRONMENTAL CLAIM" means any claim, prosecution, lawful demand, action,
official warning, abatement or other order or notice (conditional or
otherwise), relating to Environmental Matters under or requiring
compliance with the terms of any Environmental Licence or Environmental
Law;
"ENVIRONMENTAL LAW" includes all or any law, statute, rule, regulation,
treaty, directive, direction, by-law, order, notice or, demand, decision
of the courts or
2
6
of any governmental authority or agency or any regulatory body in any
relevant jurisdiction including the European Union relating to
Environmental Matters binding upon the Company and/or the business carried
on by the Company;
"ENVIRONMENTAL LICENCE" means any permit, licence, authorisation, consent
or other approval required at any time by the Company or in relation to
the business carried on by the Company pursuant to any Environmental Law;
"ENVIRONMENTAL MATTERS" includes any of the following: (1) any generation,
deposit, disposal, keeping, treatment, transportation, transmission,
handling or manufacture of any Relevant Substance; (2) nuisance, noise,
defective premises, health and safety at work or elsewhere; and (3) the
pollution, conservation or protection of the Environment whether relating
to man or any living organisms supported by the Environment or to natural
resources or any other matter whatsoever affecting the Environment or any
part of it;
"GROUP" means the Company and the Subsidiaries;
"GROUP COMPANY" means each and any body corporate in the Group save that
in relation to clause 8 (restrictive covenants) and the definitions used
therein (including Prohibited Area, Restricted Services and Restricted
Business) Group Company shall have the following meaning:
(a) in relation only to the restrictive covenants given by Xxxxx Xxxxxx
set out in clause 8 "Group Company" shall mean any holding company
for the time being of the Company (including P Corporation) or any
subsidiary for the time being of the Company or of any such holding
company with which he has been involved in the ordinary course of
his duties;
(b) in relation to the restrictive covenants given by all Covenantors
(save for Xxxxx Xxxxxx) "Group Company" shall mean each and any body
corporate in the Group together with such of PUK and its
subsidiaries with which the respective Covenantor shall have been
involved in the ordinary course of his duties.
"GUARANTEE" means any guarantee, indemnity, suretyship, letter of comfort
or other assurance, security or right of set-off given or undertaken by a
person to secure or support the obligations (actual or contingent) of any
third party and whether given directly or by way of counter-indemnity to
any third party who has provided a Guarantee;
"ICTA 1988" means the Income and Corporation Taxes Xxx 0000;
"INTELLECTUAL PROPERTY RIGHTS" means all patents, registered designs,
trade marks and service marks (whether registered or not), copyright,
design rights, and all similar property rights, including those subsisting
(in any part of the world) in inventions, designs, drawings, performances,
computer programs, semiconductor topographies, confidential information,
business or brand names,
3
7
goodwill or the style of presentation of goods or services and in
applications for protection thereof,
"INTERIM ACCOUNTS" means the unaudited consolidated accounts of the Group
for the period from 1 January 1996 to 30 June 1996 (both dates inclusive)
and for the avoidance of doubt such accounts shall comprise the profit and
loss account, the balance sheet, the cash flow statement and the notes to
them;
"KNOW-HOW" means all confidential industrial and commercial information
and techniques, accounts, records and information (wherever situate)
pertaining to the activities of the Group;
"2002 LOAN NOTES" means variable rate unsecured loan notes 2002 of P
Corporation in the agreed form having an aggregate face value of
US$8,250,000 (eight million two hundred and fifty thousand);
"MANAGEMENT ACCOUNTS" means the management accounts of the Group for the
period from 1 July 1996 to 30 September 1996 (both dates inclusive) in the
agreed form;
"NEW AUDITORS" means Deloitte & Touche, Chartered Accountants, of
Xxxxxxxxxxx Xxxxx, 0 Xxxxxxxxxxx Xxxxxx, Xxxxxx XX0X 0XX or such other
firm of Chartered Accountants as the Purchasers may from time to time
appoint as reporting accountants for the purposes of this Agreement;
"NOMINATED ACCOUNT" means the Vendors' Solicitors' client account numbered
00000000 at Royal Bank of Scotland PLC of Fleet Street, London - Sort Code
16-00-11 or such other account or accounts as the Vendors' Solicitors
shall specify;
"P CORPORATION GROUP" means P Corporation and any subsidiaries of P
Corporation from time to time;
"P CORPORATION SHARES" means the 2,200,000 shares of common stock in P
Corporation to be issued to the Vendors pursuant to clause 5;
"P CORPORATION WARRANTIES" means the warranties set out in schedule 9;
"PROHIBITED AREA" means the United Kingdom and such other territories in
which any Group Company (as defined in relation to clause 8) has a
commercial operation which produces an annual revenue of at least 5 per
cent. of its total annual revenue;
"PROPERTIES" means the properties details of which are set out in schedule
4;
"PURCHASE PRICE" means the sum of Sterling (pound)28,255,844;
4
8
"PURCHASERS' SOLICITORS" means Xxxxxx Xxxx, of Xxxxxxx Xxxxx, Xxxxxxxx
Xxxxxx, Xxxxxx XX0X 0XX;
"REGISTRATION SIDE LETTER" means the letter in the agreed form to be
entered into on Completion between P Corporation and the Vendors, relating
to the registration of the P Corporation Shares;
"RELATED COMPANY" in relation to any company means any subsidiary or
holding company of that company or any subsidiary of that holding company;
"RELEVANT SUBSTANCE" means any substance whatsoever (whether in a solid or
liquid form or in the form of a gas or vapour and whether alone or in
combination with any other substance) or waste (as defined in the
Environmental Protection Act 1990) which is capable of causing harm to man
or any other living organism supported by the Environment or damaging the
Environment or public health or welfare;
"RELIEF" means any loss, relief, allowance, exemption, set-off, deduction,
credit or other relief relating to any Taxation or to the computation of
income, profits or gains for the purposes of any Taxation;
"THE RESTRICTED PERIOD" shall mean: (a) in relation to Xxxxxx Dear only
the period of eighteen months from the Completion Date; (b) in relation to
Xxxxx Xxxxxx only the period of three years from the Completion Date and
thereafter the period of 12 months from the Termination Date; and (c) in
relation to the individuals listed in Part C of schedule 6 (save for Xxxxx
Xxxxxx) the period of three years from the Completion Date and thereafter
until the Termination Date or if the Covenantor's employment is terminated
for Cause 6 months from the Termination Date provided that if the Contract
of Employment of any such individual is terminated during such three year
period by his employer other than for Cause the relevant period shall be
from Completion to the date 6 months from the Termination Date. If any
such individual terminates his employment as a result of a breach by the
employer of such individual's Contract of Employment or if his employer
terminates his Contract of Employment by reason of redundancy the
Restricted Period shall cease on the Termination Date;
"RESTRICTED PRODUCTS" means:
(a) all products which are produced, distributed or sold by the Company
or any other Group Company at the Completion Date; and
(b) any other products which are of a type similar to and competing with
any of the products referred to in (a) above
which the relevant Covenantor has been involved with in the ordinary
course of his duties or had knowledge of and, in each case, for as long as
a Covenantor is employed or retained by a Group Company, any future
Restricted Products created during such employment or retainer;
5
9
"RESTRICTED SERVICES" means:
(a) all services which are supplied by the Company or any other Group
Company at the Completion Date; and
(b) any other services which are of a type similar to and competing with
any of the services referred to in (a) above
which the relevant Covenantor has been involved with in the ordinary
course of his duties or had knowledge of and, in each case, for as long as
a Covenantor is employed or retained by a Group Company any future
Restricted Services provided during such employment or retainer;
"SALE SHARES" means all of the 1,100,000 ordinary shares of 10p each in
the capital of the Company in issue at the date of this Agreement referred
to in column (3) of Part A of schedule l;
"SECURITIES ACT" means the US Securities Act of 1933 (as amended);
"SECURITY INTEREST" means a mortgage, lien, pledge, charge, hypothecation
or other security interest (or an agreement or commitment to create any of
them), but excluding:
(a) any lien arising in the ordinary course of business to secure
amounts of (pound)5,000 or less;
(b) any unpaid vendor's or supplier's lien arising in the ordinary
course of any Group Company's trading business to secure amounts
due in respect of goods or services sold or supplied; and
(c) liens arising by operation of law, including a banker's lien;
"SERVICE AGREEMENTS" means the service agreements to be entered into
pursuant to clause 5.1(b)(v) between the Company and the persons listed in
Part B of schedule 6;
"SUBSIDIARIES" means the companies specified in schedule 3;
"SUBSIDIARY" means a subsidiary (as defined by sections 736 and 736A CA
1985) or a subsidiary undertaking (as defined by section 258 CA 1985);
"TAXATION" has the meaning given to that expression in the Taxation Deed;
"TAXATION AUTHORITY" has the meaning given to that expression in the
Taxation Deed;
"TAXATION DEED" means the deed in the agreed form;
6
10
"TAX ELECTION" includes, but is not limited to, any election, claim,
disclaimer or waiver relating to Taxation;
"TAX RETURN" means any report, return, computation, estimate, declaration,
statement or other written information to be supplied to any Taxation
Authority in relation to any Taxation;
"TAX WARRANTIES" means the Warranties set out in Part C of schedule 8;
"TRUST" means the Xxxxxx 1987 Settlement;
"TERMINATION DATE" means, in relation to any Covenantor, the date of
termination (for whatever reason and whether in breach of contract or
not) of his Contract of Employment;
"US TRUST" means the Xxxxxxx Xxxxx Xxxxx Xxxxxxx Trust U/D/T May 27 1987;
"US TRUSTEES" means K Ahl and E Xxxxx as trustees of the US Trust
"VALUE ADDED TAX" or "VAT" means value added tax as provided for in the
Value Added Tax Xxx 0000 and legislation supplemental thereto or in any
primary or secondary legislation promulgated by the European Community or
any official body or agency thereof, any similar or equivalent tax imposed
by any country or jurisdiction other than the United Kingdom and any
similar or turnover tax replacing or introduced in addition to any of the
same;
"VENDORS' SOLICITORS" means Xxxxxxx & Co., of 000 Xxxxxx, Xxxxxx XX0X 0XX;
"VENDOR TRUSTEES" means Xxxxxxx Trustees (Jersey) Limited and Xxxxxxxxxxx
Xxxxxx;
"WARRANTIES" means the warranties contained in or referred to in clause
7.2;
"WARRANTORS" means those persons whose names are set out in Part B of
schedule 1.
1.2 In this Agreement unless the context otherwise requires:
(a) a document expressed to be "IN THE AGREED FORM" means a document in
a form which has been agreed by the parties contemporaneously with
or before the execution of this Agreement and which has, for the
purposes of identification, been initialled by them or on their
behalf;
(b) references to a clause or schedule are to a clause, of or a schedule
to, this Agreement, references to this Agreement include its
schedules and
7
11
references in a schedule or part of a schedule to a paragraph are to
a paragraph of that schedule or that part of that schedule;
(c) references to this Agreement or any other document or to any
specified provision of this Agreement or any other document are to
this Agreement, that document or that provision as in force for the
time being and as amended from time to time in accordance with the
terms of this Agreement or that document or, as the case may be,
with the agreement of the relevant parties;
(d) references to any English legal term for any action, remedy, method
of judicial proceeding, legal document, legal status, Court,
official or any legal concept or thing shall in respect of any
jurisdiction other than England be deemed to include what most
nearly approximates in that jurisdiction to the English legal term;
(e) words importing the singular include the plural and vice versa,
words importing a gender include every gender and references to
persons include corporations, partnerships and other unincorporated
associations or bodies of persons;
(f) the contents table and the descriptive headings to clauses,
schedules and paragraphs are inserted for convenience only, have no
legal effect and shall be ignored in the interpretation of this
Agreement;
(g) the word "company", except where used in reference to the Company,
shall be deemed to include any partnership, undertaking or other
body of persons, whether incorporated or not incorporated and
whether now existing or hereafter to be formed;
(h)
(i) all agreements, obligations and liabilities on the part of
each of the Vendors (other than the Warrantors) are several;
(ii) unless expressly stated to the contrary, all agreements,
obligations and liabilities (whether under warranties,
representations, indemnities or otherwise) on the part of the
Warrantors, whether in their capacity as Vendors or Warrantors
shall be joint and several. Without limiting the generality of
the foregoing and without prejudice to sub-clause (h)(i)
above, the Warrantors shall be jointly and severally liable in
respect of all agreements, obligations and liabilities of each
of the Vendors other than the Warrantors.
(i) the words and phrases "other", "including" and "in particular" shall
not limit the generality of any preceding words or be construed as
being
8
12
limited to the same class as the preceding words where a wider
construction is possible.
1.3 In this Agreement, unless the context otherwise requires:
(a) "enactment" means any statute or statutory provision (whether of the
United Kingdom or elsewhere), subordinate legislation, as defined
by section 21(1) Interpretation Xxx 0000, and any other subordinate
legislation made under any such statute or statutory provision;
(b) a reference to any enactment shall be construed as including a
reference tO:
(i) any enactment which that enactment has directly or indirectly
replaced (whether with or without modification); and
(ii) that enactment as re-enacted, replaced or modified from time
to time, whether before, on or after the date hereof provided
that the Vendors shall not be placed under any greater
obligations than those obligations imposed on them under any
enactment in force on the Completion Date.
2 PURPOSE OF THIS AGREEMENT
-------------------------
2.1 This is an Agreement for the sale and purchase of the Sale Shares.
3 SALE OF THE SALE SHARES
-----------------------
3.1 The Vendors (relying, as the Purchasers acknowledge, on the P Corporation
Warranties and undertakings of the Purchasers referred to or contained in
this Agreement) shall sell to the Purchasers and the Purchasers (relying,
as the Vendors hereby acknowledge, on the Warranties, undertakings and
indemnities of the Vendors referred to or contained in this Agreement or
the Taxation Deed) shall purchase from the Vendors the Sale Shares.
3.2
(a)
(i) Each of the Vendors (save for the Vendors referred to in
clause 3.2(a)(ii) below) shall sell and transfer the Sale
Shares held by each Vendor as set forth in schedule 1 opposite
his name free from all encumbrances and with full title
guarantee.
(ii) The Vendor Trustees and the US Trustees shall sell and
transfer free from all encumbrances and with limited title
guarantee all of the Sale Shares held by them in that
capacity.
9
13
(iii) For the purposes of this clause 3.2 "encumbrances" includes
all claims, liens, charges, encumbrances and equities and
other rights exercisable by third parties including any
Security Interest.
3.3 Title to, beneficial ownership of, and any risk attaching to, the Sale
Shares shall pass on Completion, and the Sale Shares shall be sold and
purchased together with all rights and benefits attached or accruing to
them at Completion (including the right to receive all dividends,
distributions or any return of capital declared, paid or made by the
Company on or after Completion).
3.4 Each of the Vendors hereby waives any rights of pre-emption conferred on
him by the Articles of Association of the Company or otherwise over Sale
Shares hereby agreed to be sold by the other Vendors including, without
limitation the rights conferred on Messrs. Xxxxxx and Xxxxxxxx by article
41 thereof.
3.5 The Purchasers shall not be obliged to complete the purchase of any of the
Sale Shares unless the purchase of all the Sale Shares is completed
simultaneously.
4 CONSIDERATION
-------------
4.1 The consideration for the sale of the Sale Shares shall be:
(a) the payment on Completion by PUK to the Vendors of the Purchase
Price; and
(b) the issue of the 2002 Loan Notes; and
(c) the issue of the P Corporation Shares.
4.2 The Purchase Price, the 2002 Loan Notes and the P Corporation Shares shall
be payable to and issued to the Vendors in the respective proportions and
amounts set out in columns 4(a), 4(b) and 4(c) of Part A of schedule 1
opposite their respective names.
4.3 If the Cash Value is:
(a) a positive sum which is greater than [Pounds Sterling]8 million, the
Purchasers shall pay to the Vendors by way of additional purchase
consideration in accordance with clauses 4.4 and 4.5 a sum equal to
the difference;
(b) a positive sum which is less than [Pounds Sterling]8 million, the
Vendors shall pay to the Purchasers in accordance with clauses 4.4
and 4.5 a sum equal to the difference;
(c) a negative sum, the Vendors shall pay to the Purchasers in
accordance with clauses 4.4 and 4.5 an amount equal to the negative
sum plus [Pounds Sterling]8 million;
10
14
(b) a positive sum which is less than [Pounds Sterling]8 million, the
Vendors shall pay to the Purchasers in accordance with clauses 4.4
and 4.5 a sum equal to the difference;
(c) a negative sum, the Vendors shall pay to the Purchasers in
accordance with clauses 4.4 and 4.5 an amount equal to the negative
sum plus [Pounds Sterling]8 million;
(d) [Pounds Sterling]8 million, no payment or further payment from the
Purchasers or either of them to the Vendors or from the Vendors to
the Purchasers or either of them shall be made.
4.4
(a) The Purchasers shall either: (a) make a provisional payment on
Completion, under clause 4.3(a); or (as the case may be) (b)
provisionally reduce the purchase consideration paid on Completion
in respect of any sum payable by the Vendors under clauses 4.3(b) or
(c), in each case calculated by reference to the provisional Cash
Value agreed between the parties on the basis of statements and
other information to be provided by the Vendors under clause
4.4(b)(iii);
(b) Within 14 days after Completion the parties shall determine the
actual Cash Value and any consequent adjustment to the provisional
payment or provisional reduction in the purchase consideration (as
the case may be) required for the purposes of calculating final
amounts due under clauses 4.3(a) to (c). For this purpose each of
the Vendors hereby irrevocably authorises Xx. X. Xxxxxxxxx and Xx.
X. Xxxxxx to agree the actual Cash Value and any such consequent
adjustment on their behalf. In the event that the parties cannot
reach agreement within such period any party may refer the matter
for resolution to an independent accountant (to act as expert not
arbitrator) agreed between the parties or, in default of agreement,
appointed on the application of either the Vendors or the
Purchasers, by the President of the Institute of Chartered
Accountants of England and Wales. Every sum payable as a result of
adjustment under this clause shall be paid within three business
days after the date of determination of the adjustment; and
(i) (where such sum is payable to the Vendors) by electronic funds
transfer for value on the same day into the Nominated Account
(and the Vendors' Solicitors are hereby authorised to receive
it in such account) and payment of it into such account shall
constitute a good discharge to the Purchasers in respect of it
and the Purchasers shall have no obligation as to the
distribution or allocation of such sum between the Vendors; or
(ii) (where such sum is payable to the Purchasers) by electronic
funds transfer for value on the same day into the client
account of the
ll
15
Purchasers' Solicitors, account number 00000000 - Sort Code
15-10-00 at the Royal Bank of Scotland plc, 00-00 Xxxxxxxxxxxx
Xxxxxx, X.X. Xxx 000, Xxxxxx XX0X 0XX (xxx the Purchasers'
Solicitors are hereby authorised to receive it in such
account) and payment of it into such accounts shall constitute
a good discharge to the Vendors in respect of it and the
Vendors shall have no obligation as to the distribution or
allocation of such sum between the Purchasers.
(iii) The Vendors shall procure that bank statements in relation to
all the current and other accounts of the Company with banks
or other financial institutions in the United Kingdom or
elsewhere are produced as at close of business on the date
immediately preceding the Completion Date together with
details of all cheques or other instruments drawn on any such
accounts and that the same are delivered to the Purchasers at
Completion.
4.5 All payments to or from each Vendor under clauses 4.3 and 4.4 shall be
payable in the proportion that the Sale Shares sold by such Vendor bears
to the aggregate number of Sale Shares. All payments to or by each of the
Purchasers under clauses 4.3 and 4.4 shall be payable in the proportion
that the number of Sale Shares acquired by that Purchaser bears to the
aggregate number of Sale Shares.
5 Completion
5.1 Completion shall take place at the offices of the Purchasers' Solicitors
or at such other place as the parties may agree on the Completion Date
when all (but not part only unless the parties shall so agree) of the
following business shall be transacted:
(a) The Vendors shall deliver to the Purchasers or (in the case of the
items referred to in clause 5.1(a)(iii) make available for
collection by the Purchasers or their authorised representatives):
(i) transfers in respect of the Sale Shares being transferred by
each of them duly executed and completed in favour of the
Purchasers as to 720,795 Sale Shares in favour of P
Corporation and as to 379,205 Sale Shares in favour of PUK or
as either of them may direct or have directed, together with
the certificates for the Sale Shares therefor and the duly
executed powers of attorney or other authorities under which
any of the transfers and/or this Agreement or any other
document required to be entered into pursuant to the terms
hereof have been executed and certified copies of the Minutes
recording the Resolution of the Boards of Directors or
shareholders of such of the Vendors as are companies
authorising the sale of the Sale Shares held by those Vendors
and the execution of the transfers in respect of them;
12
16
copies of its Memorandum and Articles of Association or other
constitutional documents;
(iv) the Taxation Deed duly executed by each of the parties
thereto (other than the Purchasers);
(v) duly executed transfers (in favour of such person or persons
as the Purchasers may direct or have directed) of all shares
or other interests in the Subsidiaries not registered in the
name of the Company or any other Group Company together with
the certificates therefor;
(vi) a certificate of non-crystallisation in respect of the
debenture dated 21 October 1994 creating fixed and floating
charges over the undertaking, property and assets of the
Company in favour of The Royal Bank of Scotland plc;
(vii) the Disclosure letter; and
(viii) a certificate from each of the Vendors who is to receive P
Corporation Shares in each case in the agreed form and
completed Forms 8 and 1001 from each of the Vendors who is to
receive 2002 Loan Notes.
(b) The Vendors shall:
(i) cause the transfers mentioned in clause 5. l(a)(i) and 5.
l(a)(v) to be resolved to be registered (subject only to
their being duly stamped) notwithstanding any provision
to the contrary in the Articles of Association or other
constitutional documents of any relevant Group Company;
(ii) cause the persons named in Part A of schedule 6 to be
validly appointed as additional directors of the Company
and the person named in Part E(i) of schedule 6 to be
validly appointed as Secretary of the Company;
(iii) on such appointments being made, cause the persons named in
Part D of schedule 6 to cease to be Directors and employees
and the person named in Part E(ii) of schedule 6 to cease
to be Secretary of the Company and further cause all such
persons to deliver to the Purchaser their written
resignations of their respective offices and letters
(executed as deeds) in the agreed form;
(iv) procure that the Auditors shall resign their office as
Auditors of each Group Company by depositing their written
notice of resignation at its registered office in
accordance with section 392
13
17
CA 1985 along with a statement under section 394 of that Act
that there are no circumstances connected with their ceasing
to hold office which they consider should be brought to the
attention of the members or creditors of that Group Company;
(v) procure that the Service Agreements and variations to
contracts of employment (in each case in the agreed form) are
executed by the persons listed in Part B and Part C of
schedule 6; and
(vi) provide the Purchasers with evidence that Mr. A. Diprose, Xxxx
X. Xxxxxxxx-Xxxxx and Xxxx X. Xxxxxxxxx are no longer employed
by any Group Company together with confirmation in the agreed
form to the Company that such persons have no claim for loss
of office or compensation or otherwise against any Group
Company; and
(vii) provide evidence to the Purchasers that the following consents
and releases have been obtained in the agreed form;
(a) consent from each of the London Stock Exchange and
McGraw Hill International (UK) Limited to the transfer
of the Sale Shares by the Vendors to the Purchasers;
(b) a release from McGraw Hill International (UK) Limited to
the Company and Mr. Xxxxx Xxxxxx of their respective
obligations as set out in agreements dated 22 December
1992 and letters dated 6th April 1993, 1 November 1995,
8th January 1996, 8th February 1996 and 8th March 1996;
(c) Consents to change of control from Extel Financial
Limited, AFX News Limited and Midas-Kapiti International
Limited;
(d) a letter agreement in the agreed form evidencing the
transfer of intellectual property rights from Cambridge
Micro Applications (1985) Limited to the Company.
(c) PUK shall pay the Purchase Price by electronic funds transfer
for value on the day of Completion to the Nominated Account
(and the Vendors' Solicitors are hereby authorised to receive
it in such account) and payment of the Purchase Price into
such account shall constitute a good discharge to PUK in
respect of it and PUK shall have no obligation as to the
distribution or allocation of the Purchase Price between the
Vendors; and
14
18
(d) P Corporation shall:
(i) issue the 2002 Loan Notes, to the Vendors in the amounts set
out in column (4)(b) of Part A of schedule 1 opposite their
respective names;
(ii) issue the P Corporation Shares to the Vendors in the amounts
set out in column (4)(c) of Part A of schedule 1 opposite
their respective names and each of the Vendors hereby
instructs P Corporation to register the P Corporation Shares
issued to him subject to and in accordance with the
Registration Side Letter;
(iii) deliver in accordance with the letter dated 23 October 1996
from Xxxx Xxxx Xxxxx & XxXxxx to each of those Vendors who
have received the 2002 Loan Notes a letter of credit in the
agreed form executed by Mellon Bank N.A.;
(iv) deliver forms of legal opinion from each of Xxxxxxx Xxxx Slate
Xxxxxxx & Xxxx, X. Xxxxxxx Esq. and Xxxx Xxxxx Xxxx & XxXxxx
in each case in the agreed form.
(e) The parties (other than 3i plc) shall join in procuring that:
(i) the New Auditors shall be appointed auditors of each Group
Company in place of the Auditors;
(ii) all existing bank mandates in force for all Group Companies
shall be altered (in such manner as the Purchasers shall at
Completion require) to reflect the resignations and
appointments referred to in sub-clause (b) above.
5.2 Each Vendor who receives P Corporation Shares hereby undertakes to P
Corporation not to sell, transfer, assign or otherwise dispose of or
pledge, charge or otherwise encumber in any manner all or any of such P
Corporation Shares or any interest therein at any time during the period
of 365 days from the Completion Date.
5.3 Notwithstanding the provisions of this clause 5, 3i plc ("3i"), one of the
Vendors shall be required to deliver only the following documents to the
Purchaser to satisfy its obligations pursuant to this clause 5:
(i) a duly executed transfer in respect of those Sale Shares being sold
by 3i hereunder;
(ii) a share certificate in respect of the Sale Shares mentioned at (i)
above;
(iii) the Registration Side Letter;
15
19
(iv) a notification, in the agreed form, relating to 3i's status as a
non-US person; and
(v) a copy of a letter from 3i's company secretarial department
confirming the authorization of Xx. Xxxxxxx Xxxxxxxx to sign this
Agreement.
6 POST-COMPLETION MATTERS
-----------------------
6.1 Each of the Vendors hereby declares that for so long as he remains the
registered holder of any of the Sale Shares after Completion he will at
the Purchasers' reasonable cost (where applicable):
(a) hold the Sale Shares and the dividends and other distributions of
profits or surplus or other assets declared, paid or made in respect
of them after Completion and all rights arising out of or in
connection with them in trust for whichever of the Purchasers to
whom the same have been transferred and their respective successors
in title;
(b) deal with and dispose of the Sale Shares and all such dividends,
distributions and rights as are described in clause 6.l(a) as
whichever of the Purchasers to whom the same have been transferred
or its successors may direct; and
(c) if so requested by the Purchasers or either of them or any such
successor:
(i) vote at all meetings which he shall be entitled to attend as
the registered holder of the Sale Shares in such manner as the
Purchasers or any such successor may direct; and
(ii) execute all instruments of proxy or other documents which the
Purchasers may reasonably require and which may be necessary
or desirable or convenient to enable the Purchasers or any
such successor to attend and vote at any such meeting.
6.2 The Vendors shall execute or, so far as each is able, procure that any
necessary third party shall execute all such documents and/or do or, so
far as each is able, procure the doing of such acts and things as the
Purchasers shall after Completion reasonably require in order to give
effect to this Agreement and any documents entered into pursuant to it and
to give to the Purchasers the full benefit of all the provisions of this
Agreement and the Sale Shares.
7 WARRANTIES AND QUALIFICATIONS TO WARRANTIES
-------------------------------------------
7.1 In consideration of the Purchasers entering into this Agreement the
Warrantors hereby acknowledge that any statement in schedule 8 which is
qualified as being made "so far as the Warrantors are aware" or "to the
best of the knowledge, information and belief of the Warrantors" or any
similar expression has been so qualified after due diligent and careful
enquiries by the Warrantors (including
16
20
enquiry of the executive directors, company secretary and financial
controller of each Group Company and the tax accountants (in relation to
tax issues only) and other accountants, pensions consultants and
administrators (in relation to pension issues only) who act, or at the
relevant time acted, for each Group Company) and that each of the
Warrantors has used all reasonable endeavours to ensure that all
information given, referred to or reflected in that statement is accurate
in all material respects.
7.2 In consideration of the Purchasers entering into this Agreement:
(a) Subject to clause 7.8 the Warrantors hereby warrant to each of the
Purchasers (for itself and as trustee for its successors in title)
in the terms as set out in Parts A and B of schedule 8; and
(b) Each of the Vendors (other than the Warrantors) hereby warrants in
respect of matters relating to itself only to each of the Purchasers
(for itself and as trustee for its successors in title) in the terms
of Part A of schedule 8
7.3 The provisions of this Clause 7.3 shall operate to limit the liability
howsoever arising of the Vendors other than the Warrantors under the terms
of this Agreement. Subject to clause 7.8(d) (in relation to the US
Trustees only) the liability of each of the Vendors other than the
Warrantors pursuant to the Warranties given by it in Part A of schedule 8
or otherwise under this Agreement shall not exceed the following amounts:-
VENDOR AMOUNT[POUND]
3i Plc 3,088,058
GNI Holdings Ltd 3,186,867
Xxxxx Xxxxxxxx Holdings Ltd 1,291,420
the US Trustees 2,582,840
Technical Investments Holdings SA 2,058,500
G. McCaldin 143,896
X. Xxxxxx 102,956
X.X. Xxxxx 102,956
X. Xxxxx 102,894
7.4 The Warranties are given subject to information fairly disclosed with
reasonable particularity in the Disclosure Letter.
7.5 Each of the paragraphs in schedule 8:
(i) shall be construed as a separate and independent Warranty; and
(ii) save as expressly otherwise provided in this Agreement, shall
not be limited by reference to any other paragraph in schedule
8 or by any other provision of this Agreement or the Taxation
Deed
17
21
and each of the Purchasers shall have a separate claim and
right of action in respect of every breach of each such
Warranty.
7.6 The Warranties shall not in any respect be extinguished or affected by
Completion.
7.7 Each of the Warrantors hereby agrees with each of the Purchasers (for
itself and as trustee for each Group Company and each Group Company's
directors, employees, agents and advisers):
(a) that the giving by any Group Company and/or any of its directors,
employees, agents or advisers to any of the Vendors or their agents
or advisers of any information or opinion in connection with the
Warranties or the Taxation Deed or the Disclosure Letter or
otherwise in relation to the business or affairs of any Group
Company or in connection with the negotiation and preparation of
this Agreement, the Taxation Deed or the Disclosure Letter shall not
be deemed a representation, warranty or guarantee to the Vendors of
the accuracy of such information or opinion;
(b) to waive any right or claim which he may have against any Group
Company and/or any of its directors, employees agents or advisers
for any error, omission or misrepresentation in any such
information or opinion; and
(c) that any such right or claim shall not constitute a defence to any
claim by either of the Purchasers under or in relation to this
Agreement (including the Warranties) or the Taxation Deed.
7.8 The provisions of this clause 7.8 shall operate to limit the liability of
the Warrantors as follows:
(a) The Warrantors shall not be liable under the Warranties (other than
the Tax Warranties) in respect of any claim:-
(i) unless notice of it is given in writing by either of the
Purchasers to each Warrantor setting out with reasonable
particularity the grounds on which such claim is based within
2 years of Completion or, if later, the period from Completion
to the date 90 days after the date of the auditors' report
relating to the audited accounts of the Group for the
financial period immediately following the current financial
period of the Group after Completion (except that there shall
be no such time limit in so far as any claim relates directly
or indirectly to title to the Sale Shares);
(ii) unless the aggregate amount of all claims for which the
Warrantors would be liable under the Warranties exceeds
US$400,000 provided that if this limit is exceeded all claims,
18
22
including those previously notified, shall be accrued against
the Warrantors;
(iii) if and to the extent that proper provision or reserve was made
for the matter giving rise to the claim in the Accounts or
Interim Accounts or Management Accounts;
(iv) for any loss arising from breach of the Warranties (other than
the Tax Warranties) to the extent that any such loss is
recovered under a policy of insurance in force on the date of
this Agreement or would have been covered but for any change
in the basis of cover, the cancellation of the relevant
policies or non-payment of the premiums in respect of the
relevant policies in each case at the direction of either of
the Purchasers;
(v) to the extent that the same arises out of any matter or thing
done or omitted to be done pursuant to this Agreement or
otherwise in each case at the written request or with the
written approval of either of the Purchasers after the date
hereof, save that this limitation will not apply to matters or
things done or omitted to be done as required by law or
pursuant to a legally binding commitment of a Group Company
created on or before Completion or otherwise than in the
ordinary course of business as carried on immediately before
Completion;
(b) The Warrantors shall not be liable under the Agreement (other than
the Tax Warranties, the covenants in clause 8 and the indemnities in
clause 9):-
(i) based upon a liability which is contingent only unless and
until such contingent liability becomes an actual liability
and is due and payable;
(ii) in respect of any matter, act, omission or circumstance to the
extent that the same would not have occurred but for:-
(A) the passing of, or any change in, after the date of this
Agreement, any law, rule, regulation or administrative
practice of any government, governmental department,
agency or regulatory body;
(B) any change in accounting principles or practice of the
Purchasers or any of the Group Companies other than as
required to comply with U.K. generally accepted
accounting principles;
(c) Subject to clause 7.8(d) (in relation to the Vendor Trustees only)
the aggregate amount of the liability howsoever arising of each of
the
19
23
Warrantors in respect of any claims under this Agreement and the
Taxation Deed shall not exceed the following amounts:-
[POUND]
Xxxxxx Xxxxxx Dear 1,544,030
Paten Xxxxxx Xxxxxxxx 1,544,033
Claire Xxxx Xxxxxxx 1,852,824
Xxxxx Xxxxxxx Xxxxxx 11,734,593
Xxxxx Xxxxxxxx Xxxxxxxxx 926,425
Xxxxx Xxxxxx Xxxxxxxx 617,608
the Vendor Trustees 37,057,263
(d)
(i) If and so long as there is no breach of the covenants
contained in sub-clauses (ii) and (iii) below the aggregate
liability of the Vendor Trustees in respect of any claims
under this Agreement shall not exceed the realisable value of
the capital assets held upon the trusts of the Trust net of
the costs of realisation on the date(s) the Vendor Trustees
receive notice of any claim under this Agreement
(ii) The Vendor Trustees hereby covenant for the period of 2 years
from the date hereof or the resolution of any claim made
within that period under this Agreement not to sell transfer
assign or otherwise dispose of any assets held upon the trusts
of the Trust other than in the normal course of investment of
trust assets provided that such investments are authorised
under the terms of the Trust and that in making such
investments the Vendor Trustees take the same degree of care
that an ordinary reasonably prudent man of business would have
taken other than to meet reasonable capital expenses properly
incurred in the administration of the Trust nor to appoint new
additional or substitutional trustees of the Trust without the
prior written consent of the Purchasers
(iii) In the case of (A) a transfer assignment or disposal to a
beneficiary who is or becomes absolutely entitled to any
assets under the terms of the Trust and (B) the appointment of
a new or substitutional trustees of the Trust the Vendor
Trustees covenant that prior to such transfer assignment
disposal or appointment they shall procure that such
beneficiary or such new additional or substitutional trustees
shall enter into a direct covenant with the Purchasers in a
form satisfactory to the Purchasers in respect of claims by
the Purchasers under this Agreement and for the avoidance of
doubt if no such direct covenant is entered into then the
limitation on the liability of the Vendor Trustees contained
in paragraph (i) above shall not apply
2O
24
(iv) The Purchasers covenant that in the event that the Vendor
Trustees produce reasonable evidence to the Purchasers that
the UK Inland Revenue has a valid claim against a beneficiary
or settlor of the Trust for tax interest or penalties in
respect of capital gains made by the Vendor Trustees or for
inheritance tax payable in relation to the Trust then the
Purchasers will give their written consent to the transfer to
such beneficiary or settlor of sufficient capital assets for
the sole purpose of discharging such tax interest or penalties
provided that such beneficiary or settlor enters into a direct
covenant with the Purchasers that such capital assets shall be
used to discharge such tax interest or penalties
(v) the limitations in sub-clauses 7.8 (d) (i) to (iv) (inclusive)
shall also apply in relation to the US Trust and for this
purpose reference in those sub-clauses to "the Vendor
Trustees" shall be deemed to be references to the US Trustees,
references to "the Trust" shall be deemed to be references to
the US Trust and references to "the UK Inland Revenue" shall
be deemed to be references to the US Internal Revenue Service
as well as the UK Inland Revenue
(e) none of the Vendor Trustees or the US Trustees shall incur any
personal liability in respect of a breach of the Warranties except
to the extent that such breach or claim arises as a result of or in
connection with fraud of the Vendor Trustees or the US Trustees
respectively;
(f) without being a condition to any claim hereunder the Purchasers
shall procure that all reasonable steps are taken and all reasonable
assistance is given to avoid or mitigate any loss or liability
which might give rise to a claim under the Warranties (other than
the Tax Warranties). If either of the Purchasers or any Group
Company becomes aware of a matter that may give rise to a claim
against the Warrantors under the Warranties (other than the Tax
Warranties) notice of that fact shall be given as soon as is
reasonably practicable to the Warrantors and if the claim in
question is as a result of or in connection with a claim by or
liability to a third party the claim shall not be compromised or
settled without the consent of the Warrantors (such consent not to
be unreasonably withheld or delayed) and that Purchaser (if
requested promptly in writing by the Vendors and indemnified to
their reasonable satisfaction by the Vendors against all costs,
charges, liabilities and reasonable expenses which may as a result
be incurred by that Purchaser or any Group Company) shall take and
shall procure the relevant Group Company to take all such action as
the Warrantors may reasonably request to avoid, dispute, resist,
appeal, compromise or contest such claim or liability and shall make
available and procure that the Group Companies shall make available
to the Warrantors all such information and reasonable assistance as
may be reasonably requested by the Warrantors and is available to it
or them being information relevant for the purpose of avoiding,
disputing, resisting,
21
25
appealing, compromising or contesting any such claim or liability
and the Warrantors shall keep all such information confidential.
(g) if and to the extent that either of the Purchasers recovers from any
third party in relation to any matter which may give rise to a claim
under this Agreement (other than the Tax Warranties) which has been
settled in full by the Warrantors, such Purchaser shall reimburse to
the Warrantors who have settled such claim in proportion to the
amounts paid by them respectively the amount so recovered (net of
costs of recovery and of any Taxation suffered on the amount
recovered) up to the amount paid by each such Warrantor;
(h) in relation to any claim or alleged claim under this Agreement
(other than the Tax Warranties) and without prejudice to the
validity of the claim or alleged claim in question, the Purchasers
shall allow, and shall procure that the relevant Group Companies
allow, the Warrantors and their accountants and professional
advisers to investigate the matter or circumstance giving rise or
alleged to give rise to such claim and whether and to what extent
any amount is payable in respect of such claim and for such purpose
the Purchasers shall give and shall procure that the relevant Group
Companies give, subject to their being paid all reasonable out-of-
pocket expenses, all such assistance as the Warrantors or their
accountants or professional advisers may request including access to
and copies of any documents or other information in the possession
of the Purchasers or the relevant Group Companies;
7.9 The provisions of clauses 3, 4 and 5 of the Taxation Deed shall apply
mutatis mutandis in relation to any claim under the Tax Warranties as if
set out in full in this Agreement.
7.10 In the event that any Vendor is liable to P Corporation or any body
corporate to whom P Corporation has assigned the benefit of the warranties
given to it pursuant to the terms of clause 20 ("ASSIGNEE") in respect of
a claim under the Warranties then each such Vendor shall at its own choice
either:
(a) pay P Corporation or such Assignee a sum equal to the amount payable
by such Vendor to in respect of such claim; or
(b) calculate the number of P Corporation Shares which would be required
to be transferred to satisfy the amount payable to P Corporation or
such Assignee (as the case may be) by such Vendor in respect of such
claim and notify P Corporation or such Assignee (as the case may be)
that it requires P Corporation or such Assignee (as the case may be)
to repurchase or cancel the relevant number of P Corporation Shares
to satisfy such claim Provided that such Vendor may only require P
Corporation or such Assignee to repurchase or cancel P Corporation
Shares that have not been registered under the Securities Act with
the SEC. For the purpose of this Clause 7.10 the transfer value of a
22
26
P Corporation Share shall be deemed to be the closing price of such
share on the New York Stock Exchange on the day prior to the
Completion Date (the "P CORP SHARE PRICE").
(i) If the Vendor holds sufficient P Corporation Shares to satisfy
the mount payable under sub-clause (a) above, he shall deliver
(or procure the delivery of) such documentation to P
Corporation or such Assignee as may be required for P
Corporation or such Assignee to repurchase or cancel the
required number of P Corporation Shares.
(ii) If the Vendor holds less than the required number of P
Corporation Shares to satisfy the amount payable under
subclause (a) above, the claim shall be satisfied:-
(A) firstly, by delivery of such documentation to P
Corporation or such Assignee as may be required for P
Corporation or such Assignee to repurchase or cancel the
required number of P Corporation Shares; and
(B) secondly, by delivering to P Corporation or such
Assignee a sum equal to the amount payable by such
Vendor to satisfy the balance of his liability in
respect of the claim
Provided that if P Corporation or such Assignee is unable for legal or
regulatory reasons (including compliance with the rules or codes of
practice of any securities exchange) or reasonably determines that it
would have a significant adverse effect on it or its business or assets to
repurchase or cancel its shares at the time at which the relevant
Vendor(s) wish to transfer the same the Vendor shall pay and settle such
claim in cash. In the event that the amount of the liability of the
relevant Vendor(s) in respect of the claim by P Corporation or its
Assignee is finally determined or settled before registration of the P
Corporation Shares then to the extent that the relevant Vendor(s) elected
to satisfy such claims with P Corporation Shares which P Corporation or
its Assignee is unable or unwilling to repurchase or cancel pursuant to
the proviso above P Corporation or its Assignee (as the case may be) will
(without prejudice to the right to commence or pursue legal proceedings
for enforcement) defer actual collection of the cash amount equal to the
number of P Corporation Shares offered to P Corporation or its Assignee
multiplied by the P Corp Share Price until after registration of the P
Corporation Shares.
7.11 Any Vendor who transfers P Corporation Shares pursuant to clause shall
be responsible for and shall reimburse P Corporation in respect of all
stamp, registration, transfer or similar taxes or imposts that may be
payable in connection with such transfer.
7.12 The Purchasers hereby acknowledge that they do not enter into this
Agreement in reliance on any warranties, representations or undertakings
howsoever or to
23
27
whomsoever made except in so far as such are embodied in the Agreement and
the Taxation Deed and the other documents referred to in this Agreement.
7.13 For the avoidance of doubt, this clause 7 shall not preclude any Vendor
from claiming against any other Vendor under any right of contribution or
indemnity to which he may be entitled.
7.14 The satisfaction by the Vendors and/or the Warrantors of any claim under
this Agreement (including the Warranties) shall be deemed to constitute a
reduction in the consideration payable by the Purchasers for the sale of
the Sale Shares.
7.15 The Purchasers hereby agree with the Vendors that in respect of any matter
which gives rise to a liability under this Agreement (including the
Warranties) and also under the Taxation Deed such liability shall not be
satisfied more than once.
7.16 If the Purchasers have a claim under this Agreement against any Vendor
(other than a Warrantor) and in respect of such claim the Purchasers or
either of them wishes to claim against any one or more Warrantors on the
basis of their joint and several liability the Purchasers or relevant
Purchaser (as the case may be) shall join the relevant Vendor in any claim
or proceedings brought against such Warrantor(s).
8 RESTRICTIVE COVENANTS
---------------------
8.1 Each of the Covenantors severally undertakes with each of the Purchasers
that without the prior consent in writing of each of the Purchasers he
will not directly, or indirectly whether by himself, his employees or
agents and whether on his own behalf or on behalf of any other person,
firm or company or otherwise howsoever, for the Restricted Period:
(a) (subject to clause 8.5) carry on, be employed or otherwise engaged,
concerned or interested in any capacity (whether for reward or
otherwise) in, provide any technical, commercial or professional
advice to, or in any way assist, any business which is or is about
to be engaged in the production, distribution or sale of the
Restricted Products or any of them, or the supply of the Restricted
Services or any of them in the Prohibited Area in competition with
the Company or any other Group Company and for the avoidance of
doubt this restriction shall not apply to a business which is only
an end user of the Restricted Products or the Restricted Services;
(b) in relation to the Restricted Products or any of them or the
Restricted Services or any of them solicit or canvass, accept orders
from or otherwise deal with any person, firm, company or other
organisation who:
(i) was a customer of the Company or any other Group Company at
any time during the three years prior to Completion; or
24
28
(ii) at the date of Completion was in the process of negotiating or
contemplating doing business with the Company or any other
Group Company,
and with whom that Covenantor had personal dealings in the course of
his employment save that without prejudice to clause 8.1(a) this
shall not prevent the Covenantor from merely accepting employment or
engagement with such a person or organisation;
(c) solicit or entice away or endeavour to solicit or entice away from
the Company or any other Group Company any director or manager or
salesman or other person employed or otherwise engaged by that Group
Company on the date of Completion, whether or not that person would
commit any breach of his contract of employment by reason of his
leaving the service of that Group Company;
(d) employ or otherwise engage any person who at the date of Completion
or during the period of three years prior thereto was employed or
otherwise engaged by the Company or any other Group Company and who
by reason thereof is or is reasonably likely to be in possession of
any of the Confidential Information; and
8.2 Each of the Covenantors severally undertakes with each of the Purchasers
that he will not at any time after Completion directly or indirectly,
whether by himself, his employees or agents or otherwise howsoever:
(a) engage in any trade or business or be associated with any person
firm or company engaged in any trade or business using the name
Primark, ICV, Datastream, I/B/E/S, Disclosure, Worldscope and Vestek
or any name incorporating such words or any similar name or names or
any colourable imitation thereof unless and until (in relation to
any of those names) the Primark Group permanently discontinues use
of the same;
(b) (subject to clause 8.4) in the course of carrying on any trade or
business, claim, represent or otherwise indicate any present
association with the Company or any other Group Company;
(c) (subject to clause 8.4) without the consent of the Company use,
whether on his own behalf or on behalf of any third party, or
divulge to any third party, any of the Confidential Information.
8.3 Each of the Vendors severally undertakes with the Company and with each of
the Purchasers in the terms of clause 8.2(c) such that, if the Company or
any other Group Company shall have obtained any of the Confidential
Information from any third party under an agreement including any
restriction on disclosure known to him, he will not at any time without
the consent of the Company infringe that restriction.
25
29
8.4
(a) The restriction in clause 8.1(a) shall not operate to prohibit the
Covenantors from holding in aggregate up to 5 percent of the shares
of any competing company the shares of which are listed or dealt in
on a recognised stock exchange;
(b) The restriction in clause 8.2(b) shall not operate to prohibit any
of the Covenantors who continues in the employment of any Group
Company after Completion from claiming, representing or indicating
his association in that capacity with that Group Company during the
continuance of that employment and in accordance with the terms of
his service agreement or contract of employment..
(c) The restrictions in clauses 8.2(c) and 8.3 shall not apply:
(i) in respect of any of the Confidential Information which is in
or becomes part of the public domain, other than through a
breach of the obligations of confidentiality set out in this
Agreement; or
(ii) to any of the Vendors to the extent only that he is required
to disclose Confidential Information by any applicable law,
governmental order, decree, regulation, licence or rule or
pursuant to the regulations of any securities exchange or
regulatory or governmental body to which he is subject
provided that in such circumstances the relevant Vendor(s)
shall take all reasonable steps to procure that such
disclosure is made in confidence.
8.5 Each of the Covenantors agrees with the Company and the Purchasers that
the restrictive covenants in clauses 8.1 to 8.3 inclusive are, and each of
the Vendors other than the Covenantors agrees that the restrictive
covenants in clause 8.3 are, reasonable and necessary for the protection
of the value of the Sale Shares and the Company and that having regard to
that fact those covenants do not work harshly on him.
8.6
(a) The Vendors hereby acknowledge that they have had the opportunity to
take independent advice on the restrictions in clauses 8.1 to 8.3
inclusive.
(b) While those restrictions are considered by the parties to be
reasonable in all the circumstances, it is agreed that if any of
those restrictions, by themselves or taken together, shall be
adjudged to go beyond what is reasonable in all the circumstances
for the protection of the legitimate interests of the Purchasers but
would be adjudged reasonable if part or parts of the wording thereof
were deleted or amended or qualified or the periods thereof were
reduced or the range of products or area dealt with were thereby
reduced in scope, then the relevant restriction or restrictions
26
30
shall apply with such modification or modifications as may be
necessary to make it or them valid and effective.
9 INDEMNITIES
-----------
9.1 Subject to clause 7.8(c) the Warrantors hereby undertake and agree to
indemnify the Purchasers and hold them harmless in respect of all losses,
costs, claims, liabilities, fines, penalties, damages and expenses of
whatever nature and howsoever arising that may be suffered or incurred by
the Purchasers or the Company as a result of:
(a) any breach by the Company of the provisions of the Consumer Credit
Xxx 0000 or any other consumer credit laws or regulations in
relation to the supply of equipment to its customers under
agreements existing at Completion;
(b) any third party claim or action against the Company or termination
of any customer contract prior to the earliest date on which the
customer could otherwise terminate such contract on simple notice
for failure to perform or breach of or misrepresentation by or on
behalf of the Company prior to Completion in respect of any written
representation or commitment referred to in paragraph 7.2 of the
Disclosure Letter;
(c) any failure by the Company to obtain necessary landlord and other
consents or breach of obligations by the Company in respect of the
alterations improvements and other works described in paragraph 12.5
and 9 of the Disclosure Letter;
(d) any failure by the Company to obtain and/or maintain professional
indemnity; insurance as described in paragraph 11.3 of the
Disclosure Letter prior to Completion or any failure by Xxxxxxxx to
obtain or maintain such insurance as a result of failure by the
Company to pay its agreed premium contribution when required prior
to Completion;
(e) any Environmental Claim in respect of the property described in
paragraph 13.1 of the Disclosure Letter save for a claim which
arises as a result of a voluntary act by the Purchasers after
Completion or by the Company at the direction of the Purchasers
other than the continued occupation of the relevant property.
(f) the Company being or becoming liable to make any payments to any
person as a result of the reconciliation referred to in paragraph
7.6 of the Disclosure Letter other than VAT that is recovered from
the UK tax authorities.
9.2 The Warrantors shall not be liable under the indemnities set out in clause
9.1:
27
31
(a) unless the amount of all claims for which the Warrantors would be
liable under that clause exceeds US$75,000 provided that if this
limit is exceeded all claims including those previously notified
shall be accrued against the Warrantors;
(b) unless notice of it is given in writing by the Purchasers to each
Warrantor setting out with reasonable particularity the grounds on
which such claim is based within 2 years of Completion.
10 CONTINUING EFFECTS OF THIS AGREEMENT
------------------------------------
10.1 No provision of this Agreement or of any agreement or arrangement of which
this Agreement forms part and which is subject to registration under the
Restrictive Trade Practices Acts 1976 and 1977 shall take effect until the
day after the date on which particulars required by those Acts to be
furnished to the Director General of Fair Trading in respect of this
Agreement or of the agreement or arrangement of which it forms part have
been furnished to him in accordance with those Acts.
10.2 All provisions of this Agreement shall so far as they are capable of being
performed or observed continue in full force and effect notwithstanding
Completion except in respect of those matters then already performed and
Completion shall not constitute a waiver of any of the Purchasers' rights
in relation to this Agreement or the Taxation Deed.
11 ANNOUNCEMENTS
-------------
11.1 Each of the Vendors hereby undertakes with each of the Purchasers to
provide all such information known to him or which on reasonable enquiry
ought to be known to him and relating to the Company or the Group as each
of the Purchasers may reasonably require for the purpose of complying with
any requirements of law or of any stock exchange or other regulatory
authority.
11.2 Save as expressly required by law by any relevant national or
supra-national regulatory, governmental or quasi-governmental authority,
all announcements or circulars by, of or on behalf of any of the parties
hereto relating to the sale and purchase hereunder shall be in terms to be
approved in writing by each of the Purchasers in advance of issue. The
Purchasers undertake to provide the Vendors with a copy of any
announcement made in relation to this Agreement prior to its publication.
12 RELEASES, WAIVERS ETC., BY THE PURCHASERS
-----------------------------------------
12.1 Each of the Purchasers may, in its discretion, in whole or in part
release, compound or compromise, or waive its rights or grant time or
indulgence in respect of, any liability to it under this Agreement or the
Taxation Deed and may do so as regards any one or more of the Vendors or
the Warrantors under that liability without in any way prejudicing or
affecting the liability of or its rights
28
32
against any other of the Vendors or Warrantors in respect of the same or a
like liability, whether joint and several or otherwise.
12.2 Subject to clause 12.3, neither the single or partial exercise or
temporary or partial waiver by either of the Purchasers of any right, nor
the failure by either of the Purchasers to exercise in whole or in part
any right or to insist on the strict performance of any provision of this
Agreement, nor the discontinuance, abandonment or adverse determination of
any proceedings taken by either of the Purchasers to enforce any right or
any such provision shall (except for the period or to the extent covered
by any such temporary or partial waiver) operate as a waiver of, or
preclude any exercise or enforcement or (as the case may be) further or
other exercise or enforcement by the Purchaser of, that or any other right
or provision.
12.3 All references in clause 12.2 to:
(a) any right shall include any power, right or remedy conferred by this
Agreement on, or provided by law or otherwise available to, the
Purchasers; and
(b) any failure to do something shall include any delay in doing it.
12.4 The giving by either of the Purchasers of any consent to any act which by
the terms of this Agreement requires such consent shall not prejudice the
right of that Purchaser to withhold or give consent to the doing of any
similar act.
12.5 Without prejudice to the generality of clause 12.1, if any Vendor or
Warrantor shall for any reason not be liable hereunder in respect of any
breach of this Agreement or be released by either of the Purchasers from
any such liability, the other Vendors or Warrantors, as the case may be,
shall remain liable in full in respect of such breach notwithstanding and
without prejudice to their right to a contribution.
13 NOTICES
-------
13.1 Except as otherwise provided in this Agreement, every notice under this
Agreement shall be in writing in the English language and shall be deemed
to be duly given if it (or the envelope containing it) identifies the
party to whom it is intended to be given as the addressee and:
(a) it is delivered by being handed personally to the addressee (or,
where the addressee is a corporation, any one of its directors or
its Secretary); or
(b) it is delivered by being left in a letter box or other appropriate
place for the receipt of letters at the addressee's authorised
address; or
(c) the envelope containing the notice is properly addressed to the
addressee at his authorised address and duly posted by first class
mail or express or
29
33
other fast postal service or registered post or the recorded
delivery service (or by airmail registered post if overseas)
and, in proving the giving or service of such notice, it shall be
conclusive evidence to prove that the notice was duly given within the
meaning of this clause 13.1. The fact that the intended recipient of a
notice shows that he did not receive the same, whether or not that fact
was known to the giver of the notice, shall not derogate from the
effectiveness in law of the service as provided by this clause. Without
affecting the validity or effectiveness of service thereof, a copy of any
notice given under this clause to any Vendor shall be given to the
Vendors' Solicitors (reFRHK/LJF).
13.2 For the purposes of this clause 13 the authorised address of each of the
Vendors and the Warrantors shall be those addresses set out in schedule 1
or in relation to each Vendor such other address as that Vendor may notify
to the Purchasers, and the authorised address of (respectively) each of
the Purchasers and the Company and each of the Subsidiaries shall be the
address set out in this Agreement or such other address as either of the
Purchasers shall notify the Vendors and the Warrantors from time to time
13.3 Any notice duly given within the meaning of clause 13.1 shall be deemed to
have been both given and received:
(a) if it is delivered in accordance with clause 13.1(a) or 13.1(b), on
such delivery;
(b) if it is duly posted in accordance with clause 13.1(c) by any of the
methods there specified, on the second (or, when sent airmail,
fifth) business day after the day of posting or
13.4 P Corporation irrevocably appoints Datastream International Limited of
Xxxxxxxx Xxxxx, 00-00 Xxxx Xxxx, Xxxxxx, XX0X 0XX as its agent to accept
service of process in England in any legal action or proceedings arising
out of or in connection with this Agreement or any document to be entered
into pursuant to this Agreement. If such process agent ceases to be able
to act as such or to have an address in England, P Corporation irrevocably
agrees to appoint a new process agent in England and to deliver to the
Vendors within fourteen days a copy of a written acceptance of appointment
by the process agent. Nothing in this Agreement shall affect the right to
service process in any manner permitted by law.
13.5 For the purposes of this clause 13 "notice" shall include any request,
demand, instructions, communication or other document.
14 TIME
----
14.1 Time shall be of the essence of this Agreement as regards any time, date
or period fixed by this Agreement for the performance of any obligation by
any of
30
34
the parties hereto whether as originally fixed or as altered in any manner
provided herein.
15 ENTIRE AGREEMENT
----------------
15.1 This Agreement (together with all documents which are required by its
terms to be entered into by the parties or any of them and all those terms
of any other documents which this Agreement expressly preserves and all
other documents which are in the agreed form and are entered into by the
parties or any of them in connection with this Agreement) sets out the
entire agreement and understanding between the parties in connection with
the Company and the sale and purchase and other matters described in it.
15.2 Without prejudice to the generality of clause 15.1, this Agreement shall
supersede as from the date hereof a letter of intent dated 2nd August 1996
from P Corporation and confidentiality letters dated 14 August 1996 and 18
September 1996.
16 ALTERATIONS
-----------
16.1 No purported alteration of this Agreement shall be effective unless it is
in writing, refers specifically to this Agreement and is duly executed by
each party hereto.
17 SEVERABILITY
------------
17.1 Each provision of this Agreement is severable and distinct from the
others. The parties intend that every such provision shall be and remain
valid and enforceable to the fullest extent permitted by law. If any such
provision is or at any time becomes to any extent invalid, illegal or
unenforceable under any enactment or rule of law, it shall to that extent
be deemed not to form part of this Agreement but (except to that extent in
the case of that provision) it and all other provisions of this Agreement
shall continue in full force and effect and their validity, legality and
enforceability shall not be thereby affected for impaired, provided that
the operation of this clause would not negate the commercial intent and
purpose of the parties under this Agreement.
17.2 If any provision of this Agreement is illegal or unenforceable as a result
of any time period being stated to endure for a period in excess of that
permitted by a regulatory authority, that provision shall take effect with
a time period that is acceptable to the relevant regulatory authorities
subject to it not negating the commercial intent of the parties under this
Agreement.
18 COUNTERPARTS
------------
18.1 This Agreement may be entered into in the form of two or more counterparts
each executed by one or more of the parties but, taken together, executed
by all and, provided that all the parties so enter into the Agreement,
each of the
31
35
executed counterparts, when duly exchanged or delivered, shall be deemed
to be an original, but, taken together, they shall constitute one
instrument.
19 PAYMENT OF COSTS
----------------
19.1 Each of the parties hereto shall be responsible for his/its respective
legal and other costs incurred in relation to the negotiation, preparation
and completion of this Agreement, the Taxation Deed and all ancillary
documents Provided that in the event that Completion of this Agreement
takes place (but not otherwise) the Purchasers shall pay the costs of the
Vendors' financial advisers Broadview Associates up to a maximum
of(pounds sterling)1.4 million.
20 SUCCESSORS AND ASSIGNS
----------------------
20.1 This Agreement shall be binding on and shall enure for the benefit of the
successors in title and personal representatives of each party.
20.2 Save as provided in clause 20.3, none of the parties hereto shall be
entitled to assign the benefit of any rights under this Agreement.
20.3
(a) The benefit of this Agreement (including the Warranties) and the
Taxation Deed shall subject to sub-clause (c) below be freely
assignable by each of the Purchasers to any wholly owned subsidiary
of P Corporation and, in the event of any such assignment, all
references in this Agreement and the Taxation Deed to that Purchaser
shall be deemed to include its assigns
(b) Any assignment by P Corporation shall be conditional upon the
assignee accepting the rights of the Warrantors under clause 7.10.
In the event of any assignment by either or both of the Purchasers
the liabilities of the Vendors under this Agreement shall not be
greater than they would have been had such assignment not taken
place;
(c) If any Assignee ceases to be a wholly owned subsidiary of P
Corporation, P Corporation shall procure that before such cessation
such Assignee reassigns the benefit of the Warranties to P
Corporation or a wholly owned subsidiary of P Corporation;
21 APPLICABLE LAW AND SUBMISSION TO JURISDICTION
---------------------------------------------
21.1 This Agreement shall be governed by and construed in accordance with
English law.
21.2 It is hereby agreed that if any party has any claim against another party
arising out of or in connection with this Agreement such claim shall be
referred to the
32
00
Xxxx Xxxxx of Justice in England, to the jurisdiction of which each of the
parties hereto irrevocably submits.
IN WITNESS whereof this Agreement has been entered into the day and year first
above written.
33
37
SCHEDULE 1
----------
Vendors, the Warrantors and the Covenantors
-------------------------------------------
Part A - The Vendors of the Sale Shares
---------------------------------------
(1) (2) (3) (4)
Purchase Price
Name Address (registered office Number of Sale (a)Cash (b)Loan (c)P Corporation
in the case of companies) Shares Notes Shares
[POUND] (face value) No.
$
GNI Holdings Ltd 4th Floor Atrium Building, 51,600 1,317,172 103,671
Xxxxxx Xxxxxx, Xxxxxxx Xxxx,
Xxxxxx XX0X
Xxxxx Xxxxxx 00 Xxxxx Xxxxxxx Xxxxxx 189,890 1,389,659 5,500,000 381,735
XX0 0XX
Xxxxx Xxxxxx 00 Xxxxx Xxxxxxx Xxxxxx 110 6,694
XX0 0XX
3i plc 00 Xxxxxxxx Xxxx Xxxxxx XX0 50,000 1,276,327 100,457
8XP
Xxxxx Xxxxxxxx 00 Xxxxxx Xxxxxxx Xxxxxx, Xxxxxx 20,910 533,755 42,011
Holdings Ltd SW1X 7AP
X.X. Xxx & X.X. Xxxxx, 1100 One Penn Center, 41,820 1,067,512 84,022
trustees for the Xxxxxxxxxxxx, XX x0000 XXX
Xxxxxxx Xxxxx Xxxxx
Xxxxxxx Trust U/D/T
May 27, 1987)
Technical Investments c/x Xxxxx, Xxxxxxx & Xxxxxx 33,330 850,811 66,964
Holding SA Apurtado 0000,
Xxxxxx 0,
Xxxxxxxxx xx Xxxxxx
Xxxxxxx Trustees P O Box 344 600,010 15,316,178 1,205,501
(Jersey) Limited and 5 Osprey House
Xxxxxxxxxxx Xxxxxx 0 Xxx Xxxxxx
(held as bare nominees St Helier Jersey
by Xxxxxxx Trustees JE4 8UZ
(Jersey) Limited
(150,000) and Xxxxxxx
Trustees Inc. (450,010)
G McCaldin 0 Xxxxxxxxxxxx Xxxx, Xxxxxxx 2,330 59,474 4,681
34
38
(1) (2) (3) (4)
Purchase Price
Name Address (registered office Number of Sale (a)Cash (b)Loan (c)P Corporation
in the case of companies) Shares Notes Shares
[POUND] (face value) No.
$
C A Xxxxxxx The Pond House Swelling Hill 30,000 137,846 1,000,000 60,274
Xxxxxx, Xxxxxxxxx, Xxxxxxxxx
X000 XXX
Xxxxxx Dear 00 Xxxxxxxxxx Xxxxx Xxxxxx, 25,000 167,214 750,000 50,228
Esher,
Surrey
KT10 8Q9
Paren Knadjian Red Leaves, 24,890 317,511 500,000 50,228
Xxxxxxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxx
XX0 0XX
Xxxxx Xxxx Red Leaves, 110 6,694
Xxxxxxxxxxx Xxxx
Xxxxxxxxx, Xxxxxx
XX0 0XX
Xxxxx Xxxxxxxxx 3 White Causeway 14,250 23,295 500,000 30,137
Xxxxxxx
Xxxxxxxx, Xxxxxx
XX0 0XX
Xxxxx Xxxxxxxxx 0 Xxxxx Xxxxxxxx 750 45,639
Xxxxxxx
Xxxxxxxx, Xxxxxx
XX0 0XX
Xxxxx Xxxxxxxx 00 Xxxxxxx Xxxx Xxxx, 9,100 232,289 18,283
Xxxxxxx
Xxxxxxxxx, Xxxxxx
XX00 0XX
35
39
(1) (2) (3) (4)
Purchase Price
Name Address (registered office Number of Sale (a)Cash (b)Loan (c)P Corporation
in the case of companies) Shares Notes Shares
[POUND] (face value) No.
$
Xxxxx Xxxxxxxx 00 Xxxxxxx Xxxx Xxxx 000 22,981 1,808
Xxxxxxx
Xxxxxxxxx, Xxxxxx
XX00 0XX
Xxxxx Xxxxxx High Trees 1,667 101,440
Xxxxxxxx Xxxx
Xxxxxxxxx, Xxxxxx
XX0 0XX
Xxxx Xxxxx 00 Xxxx Xxxx, 1,667 101,440
Xxxxxxxxx, Xxxxxx
XX0 0XX
Xxxxx Xxxxx 00 Xxxxxx Xxxx 1,666 101,379
Xxxx Xxx
Xxxxxx, Xxxxxx
XX00 0XX
36
40
Part B - The Warrantors
-----------------------
(1) (2)
Name Address
---- -------
Xxxxxx Xxxxxx Dear 00 Xxxxxxxxxx Xxxxx Xxxxxx, Xxxxx,
Xxxxxx XX00 0X0
Paren Xxxxxx Xxxxxxxx Red Leaves, Xxxxxxxxxxx Xxxx,
Xxxxxxxxx, Xxxxxx XX0 0XX
Claire Xxx Xxxxxxx Xxx Xxxx Xxxxx, Xxxxxxxx Xxxx, Xxxxxx,
Xxxxxxxxx, Xxxxxxxxx XX00 0XX
Xxxxx Xxxxxxx Xxxxxx 00 Xxxxx Xxxxxxx, Xxxxxx XX0 0XX
Xxxxx Xxxxxxxx Xxxxxxxxx 0 Xxxxx Xxxxxxxx, Xxxxxxx, Xxxxxxxx,
Xxxxxx XX00 0XX
Xxxxx Xxxxxx Xxxxxxxx 00 Xxxxxxx Xxxx Xxxx, Xxxxxxx,
Xxxxxxxxx, Xxxxxx XX00 0XX
the Vendor Trustees XX Xxx 000, 0 Xxxxxx Xxxxx,
0 Xxx Xxxxxx, Xx. Xxxxxx, Xxxxxx XX0 0XX
37
41
Part C - The Covenantors
------------------------
Xxxxx Xxxxxxx Xxxxxx
Xxxxx Xxxxxxxx Xxxxxxxxx
Xxxxx Xxxxxx Xxxxxxxx
Xxxxxx Xxx Xxxxxxx
Xxxxxx Xxxxxx Dear
Xxxxx Xxxxxx Xxxxxxxx
38
42
SCHEDULE 2
----------
The Company
-----------
Date and place of incorporation: 23 April 1981 in England and Wales
Registered number: 1557537
Registered office: ICV House
72 Chertsey Road
Woking
Surrey GU21 5B$
Authorised share capital: [Pound Sterling]1,740,000 divided into
1,100,000 ordinary shares of 10p each,
150,000 'A' cumulative redeemable preference
shares of [Pound Sterling]1 each, 880,000 'B'
redeemable preference shares of [Pound
Sterling]1 each and 600,000 'C' redeemable
preference shares of [Pound Sterling]1 each
Issued share capital: 1,100,000 ordinary shares of 10p each
Directors: Xxxxxx Xxxxxx Dear
Paren Xxxxxx Xxxxxxxx
Xxxxxxxxxxx Xxxx Xxxxxxxx
Claire Xxx Xxxxxxx
Xxxxx Xxxxxxx Xxxxxx
Xxxxx Xxxxxxxx Xxxxxxxxx
Xxxxx Xxxxxx Xxxxxxxx
Secretary: Xxxxx Xxxxxxxx Xxxxxxxxx
Auditors: Xxxxxx Xxxxxx
Bankers: The Royal Bank of Scotland plc
Accounting reference date: 31 December
39
43
SCHEDULE 3
----------
The Subsidiaries
----------------
Name: Interquote Limited
Date and place of Incorporation: 28 May 1981 in England and Wales
Registered number: 1564336
Registered office: ICV House
00 Xxxxxxxx Xxxx
Xxxxxx
Xxxxxx XX00 0XX
Authorised share capital: [Pound Sterling]100 divided into 100 ordinary
shares of [Pound Sterling]1 each
Issued share capital: 2 ordinary shares
Directors: Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxxxx Xxxx Xxxxxxxx
Secretary: Xxxxxxxxxxx Xxxx Xxxxxxxx
Auditors: Xxxxxx Xxxxxx
Bankers: The Royal Bank of Scotland plc
Accounting reference date: 31 December
40
44
Name: ICV Europe Limited
Date and place of Incorporation: 23 February 1987, Jersey,
Channel Islands
Registered number: 37038
Registered office: 00 Xxxxxxxxx Xxxxx, Xxxx Street, St Helier,
Jersey
Authorised share capital: [Pound Sterling]10,000 divided into 10,000
ordinary shares of [Pound Sterling]1 each
Issued share capital: 9 Ordinary Shares
Directors: Xxxxx Xxxxxxx Xxxxxx, Xxxxxxxxxxx Xxxxxx,
Xxxxxxx Xxxxxxx
Secretary: Onbond Secretaries Limited
Auditors: Xxxxxx Xxxxxx
Bankers: The Royal Bank of Scotland plc
Accounting reference date: 31 December
41
45
Name: ICV Benelux BV
Date and place of incorporation: 22 February 0000 - Xxxxxxxxx, Xxx
Xxxxxxxxxxx
Registered number: 236975
Registered office: c/o BDO Camps Obers Belastingadviseurs
Postbus 197,2670 AD Naaldwijk
Authorised share capital: DFL 50,000 divided into 50,000 ordinary
shares of DFL 1 each
Issued share capital: DFL 35,000
Directors: Xxxxx Xxxxxxxxx
Secretary: Xxxxx Xxxxxxxxx
Auditors: BDO Camps Obers
Bankers: Rabobank
Accounting reference date: 31 December
42
46
SCHEDULE 4
----------
The Properties
--------------
Property Tenure Owning Use
-------- ------ ------ ---
Company
-------
Ground and First Leasehold ICV Limited Offices with
Floor Skandia from 1st July storage
House 23 College 1995 expiring communica-
Hill Xxxxxx XX0 24th June 2003 tions and
electronic
repair
Basement, part Leasehold ICV Limited Offices with
ground floor and Basement and storage
first floor Pellipar first floor for communica-
House Cloak Lane 15 years to tions and
Xxxxxx XX0 24th June electronic
2008. Ground repair
floor 10 years
to 28th
September
2003
ICV House 72 Leasehold 25 ICV Limited Offices with
(originally numbered years from storage
74) Chertsey Road May 1983 communica-
Woking Surrey tions and
electronic
repair
Room 22 Ground Leasehold 21 ICV Limited Offices with
Floor Xxxxxxxxx years from storage
House Pontefract 24th August communica-
West Yorkshire 1995 tions and
electronic
repair
Veritas House Freehold ICV Limited Offices with
68 & 70 Chertsey storage
Road, Woking communica-
Surrey tions and
electronic
repair
43
47
Unit 4 Boundary Leasehold 25 ICV Limited Light
Business Centre years from 24 industrial
Boundary Road, June 1993
Woking, Surrey
Rooms 99 and 100 Leasehold 3 ICV Limited Offices with
Ground floor Royal years from 25 storage
London Buildings, March 1995 communica-
Xxxxxxx Street, tions and
Bristol electronic
repairs
35/37 Great Xxxxxxx Leasehold 6 ICV Limited Offices with
Street (Part) years from 29 storage
Birmingham September communica-
1995 to 28 tions and
September electronic
2001 repairs
44
48
SCHEDULE 5
DELETED - INTENTIONALLY LEFT BLANK
45
49
SCHEDULE 6
----------
Directors and employees
-----------------------
Part A - Additional Directors
-----------------------------
Xxxxxx X Xxxxxxxx
Part B - Persons to receive Service Agreements
----------------------------------------------
Xxxxxxxxxxx Shatples
Xxxxx Xxxxxxx Xxxxxx
Part C - Persons to receive deed of variation to current service agreements
---------------------------------------------------------------------------
Paren Xxxxxx Xxxxxxxx
Claire Xxx Xxxxxxx
Xxxxx Xxxxxxxx Xxxxxxxxx
Xxxxx Xxxxxx Xxxxxxxx
Part D - Resigning Directors
----------------------------
Paren Knadjian
Xxxxxx Xxxxxxx
Xxxxx Xxxxxxxxx
Xxxxxx Dear
Xxxxx Xxxxxxxx
46
50
Part E - New and Resigning Secretaries
--------------------------------------
(i) Xxxxxx Xxxxxx - New Secretary
(ii) Xxxxx Xxxxxxxxx - Resigning Secretary
47
51
SCHEDULE 7
DELETED - INTENTIONALLY LEFT BLANK
48
52
SCHEDULE 8
----------
MATTERS WARRANTED
-----------------
PART A - WARRANTIES FROM THE VENDORS
------------------------------------
1 POWERS AND OBLIGATIONS OF THE VENDORS
-------------------------------------
1.1 Each Vendor has the requisite power and authority to execute, deliver and
perform its obligations under this Agreement and, where appropriate, the
Taxation Deed.
1.2 The execution and delivery of, and the performance of the obligations of
each corporate Vendor under this Agreement and, where appropriate, the
Taxation Deed have been duly authorised by all necessary corporate action
on the part of that Vendor whether under its articles of association or
otherwise.
1.3 This Agreement constitutes, and, if appropriate, the Taxation Deed and the
other documents executed by the Vendors which are to be delivered at
Completion will, when executed, constitute legal, valid and binding
obligations of each Vendor in accordance with their respective terms.
1.4 The execution and delivery of, and the performance by each Vendor of its
obligations under, and compliance with the provisions of, this Agreement
and, where appropriate, the Taxation Deed by each Vendor will not:
(a) in relation to any corporate Vendor result in a violation of any
provision of the memorandum or articles of association or other
constitutional document of that Vendor; or
(b) result in a breach of, or constitute a default under, any instrument
to which that Vendor is a party or by which that Vendor or any of its
properties is subject or bound; or
(c) result in a violation of any law or regulation in any jurisdiction
having the force of law or of any order, judgement or decree of any
court or governmental agency or agreement to which any Vendor is a
party or by which any Vendor or any of its properties is subject or
bound; or
(d) conflict with, violate, result in a breach of, or cause a default
under any other material restriction of any kind or character to which
that Vendor or any of its properties is subject.
1.5 No consent, authorisation, licence or approval of any corporate Vendor's
shareholders or of any governmental, administrative, judicial or regulatory
body, authority or organisation is required to authorise the execution,
delivery, validity, enforceability or admissibility in evidence of this
Agreement or, if appropriate, the
49
53
Taxation Deed or the performance by any Vendor of its obligations under
this Agreement or, if appropriate, the Taxation Deed or to avoid the
violation or breach of, or a default under, any lease, commitment, note,
indenture, mortgage, lien, instrument, plan, licence, contract or agreement
to which any Vendor or any of its properties is subject.
1.6 Each Vendor hereby represents and warrants to the Purchasers that in
entering into and delivering this Agreement it has sought its own advice
and, in particular, acknowledges that it has not relied upon, in any manner
whatsoever, save to the extent set out in clause 3.1 of this Agreement, the
Purchasers or its professional advisers in entering into and delivering
this Agreement.
1.7 Set out in schedule 1 are the current legal and beneficial owners of all
the issued and outstanding shares of the Company and the shares owned by
each Vendor.
50
54
PART B - GENERAL WARRANTIES FROM THE WARRANTORS
-----------------------------------------------
1 CONSTITUTION AND STRUCTURE OF THE GROUP
---------------------------------------
1.1 The Company is duly incorporated under the laws of England and Wales and
has all requisite power and authority to own, lease and operate its assets,
properties and business and to carry on its business as now being
conducted.
1.2 The shares set out in Part A of schedule 1 (being the Sale Shares)
constitute the entire issued share capital of the Company and all the other
information set out in Part A of schedule 1 and all the information set out
in schedules 2 and 3 is complete and accurate in all respects.
1.3 All issued and outstanding shares in the capital of the Company are validly
issued, and fully paid. There are no shares in the capital of the Company
or securities convertible into shares of the Company outstanding and there
are no outstanding options, warrants or rights to purchase or acquire any
shares in the capital of the Company or securities convertible into shares
in the capital of the Company.
1.4 No consent, authorisation, licence or approval of any person or of any
governmental, administrative, judicial or regulatory body authority or
organisation is required to authorise the validity, execution, or delivery
by the Vendors of this Agreement or, if appropriate the Taxation Deed, or,
the enforceability or admissibility in evidence of this Agreement or, if
appropriate, the Taxation Deed (as far as the Warrantors are aware) or to
avoid (a) the loss of any permit or licence or other governmental
authorisation held by the Company (b) the violation or breach of or a
default under any lease commitment note indenture mortgage lien instrument
plan licence contract or agreement to which the Company or any of its
properties is subject or (c) giving to others any interests or rights,
including rights of termination, acceleration or cancellation, in or with
respect to any of the properties, agreements, contracts or business of the
Company.
1.5 There are no contracts, commitments, understandings, arrangements or
restrictions by which the Company is bound to issue additional shares or
securities convertible into shares in the capital of the Company or which
give any third party voting rights or the right to a dividend.
1.6 The Company is not a party to any voting trust or other agreement
understanding with respect to the voting of shares in the capital of the
Company or to any other contract, commitment, understanding, or arrangement
regarding the shares in the capital of the Company.
1.7 Each of the Subsidiaries is duly incorporated under the laws of the
jurisdiction in which it was incorporated. Each of the Subsidiaries is
dormant, within the meaning of S.250(3) of the CA 1985 and has no assets
(save as set out in the Disclosure Letter), no outstanding liabilities
(whether contingent or actual) no
51
55
commitments of whatever nature including, without limitation, in relation
to Taxation, breach of law or regulation, is not a party to any subsisting
agreements or arrangements and has no employees. The Subsidiaries are the
only subsidiaries of the Company and are all wholly owned by the Company
free from any liens, charges or encumbrances and the Company has no
subsidiary undertakings.
1.8 The Company has no:
(a) interest in the share capital of, or other investment in, any body
corporate other than the Subsidiaries; or
(b) branch, agency, place of business or permanent establishment outside
the United KIngdom as that expression is defined in the relevant
double taxation relief order at the date hereof ("OVERSEAS BRANCH") or
substantial assets outside the United Kingdom or, in relation to those
Subsidiaries incorporated outside the United Kingdom, its country of
incorporation
and has no outstanding obligation to acquire any such interest or overseas
branch or in respect of any such interest or overseas branch formerly
owned by it or agreed to be acquired by it.
1.9 The Company is not and has no intention of becoming a party to or member of
any partnership, joint venture, consortium or other unincorporated
association or arrangement for sharing profit other than the Subsidiaries;
1.10 The Company has not guaranteed the obligations of any other person, has no
obligation to acquire any additional ownership interest in or advance any
funds to any other person and does not have any liability for any
operations of other persons.
1.11 Up to date and accurate copies of the Memorandum and Articles of
Association or equivalent constitutional documents of each Group Company
(having attached thereto copies of all such resolutions as are by law
required to be attached thereto) are attached to the Disclosure Letter.
1.12 There is no shadow director of the Company.
2 COMPLIANCE WITH LEGAL REQUIREMENTS
----------------------------------
2.1 Compliance in all material respects has been made with all legal and
procedural requirements in relation to the Company concerning:
(a) the Memorandum and Articles of Association or other constitutional
documents (including all resolutions passed or purported to have been
passed);
52
56
(b) the filing of all documents required by the CA 1985 or by
legislation corresponding thereto in other jurisdictions to be
filed at Companies House or other corresponding registry;
(c) issues of shares, debentures or other securities or loans;
(d) payments of interest and dividends and the making of other
distributions; and
(e) directors (including and shadow directors) and other officers.
2.2 The Company has obtained all licences, permissions, consents and other
approvals required for the carrying on of its business in the places
and in the manner in which such business is now carried on. Such
licences, permissions, consents and approvals:
(a) are in full force and effect;
(b) are not limited in duration or subject to any unusual or
onerous conditions and have been complied with in all
material respects;
(c) may be assigned and transferred without restriction
and so far as the Warrantors are aware there are no circumstances
which indicate that any of such licences, permissions, consents, or
approvals will or may be revoked or not renewed or which may confer a
right of revocation.
2.3 All registers and minute books required by law to be kept by the
Company have been properly written up and contain an accurate and
complete record in all material respects of the matters which should
be dealt with therein and the Company has not received any written
application or request for rectification of its statutory registers
or any notice or allegation that any of them is incorrect.
2.4 The Company is conducting and has at all times conducted its business
in all material respects in accordance with all applicable laws and
regulations of the United Kingdom and elsewhere and has no liability
for any unlawful act committed by any other person.
2.5 So far as the Warrantors are aware no investigation or enquiry is being
or has been conducted by any governmental or regulatory body in respect
of its affairs and the Warrantors are not aware of any circumstances
which are likely to give rise to such investigation or enquiry.
2.6 There are attached to the Disclosure Letter copies of all charges
created by the Company and currently in force and all such charges
have been registered (if appropriate) under Part XII CA 1985 and
are valid and enforceable.
53
57
2.7 So far as the Warrantors are aware no statute, rule, regulation, order or
interpretation has been enacted, entered or deemed applicable by any
domestic government or governmental or administrative agency or court which
would make the transactions contemplated by this Agreement illegal or
otherwise adversely affect the business of the Company or the conduct of
such business.
3 ACCOUNTS, INTERIM ACCOUNTS AND MANAGEMENT ACCOUNTS
--------------------------------------------------
3.1 The Accounts:
(a) comply with the requirements of the Companies Acts 1985;
(b) comply with all generally accepted current statements of standard
accounting practice and financial reporting standards and statements
issued by the Urgent Issues Task Force applicable to a company
incorporated in the United Kingdom ("UK GAAP") and have been prepared
in accordance with the historical cost convention, on a consistent
basis and on the same basis and in accordance with the same accounting
policies as the corresponding audited accounts for the preceding 3
financial years;
(c) give a true and fair view of the state of affairs of the Group as at
the Accounts Date and of its assets and liabilities as at the Accounts
Date and its profit for the financial years ended on that date; and
have not been affected by any, extraordinary, exceptional or
non-recurring items;
(d) make provision to the extent required by CA 1985 and UK GAAP for all
established liabilities or make proper provision for (or contain a
note in accordance with UK GAAP) all deferred or contingent
liabilities (whether liquidated or unliquidated) at the date thereof,
including to the extent applicable for the cessation or diminution of
any part of the Company's business, closure costs and deferred
taxation, Provided that (without limitation) where provision for
deferred taxation is not made in the Accounts details of deferred
taxation liability have been disclosed to the Purchasers in the
Disclosure Letter.
3.2 Without limiting paragraph 3.1 above:
(a) adequate provision has been made in the Accounts:
(i) for depreciation of assets;
(ii) in valuing work-in-progress and stock for any foreseeable losses
which may arise on completion or realisation;
(iii) for any foreseeable liabilities in relation to the disposal of
any assets or the cessation or diminution of any part of the
Business or closures;
54
58
(iv) for bad or doubtful debts; and
(v) for the future cost (calculated on an acturial basis) of any
unfunded commitments under any pension scheme involving the
Company; and
(b) stock and work-in-progress have respectively been valued in the
Accounts at the lower of cost and net realisable value.
3.3 The results shown by the audited consolidated accounts for each of the
three financial periods of the Company immediately preceding the
financial year ended on the Accounts Date were not (save as disclosed
therein) affected by any extraordinary, exceptional or non-recurring
item or by any other factor rendering such results for all or any part
of such periods unusually high or low.
3.4 The books of account and other records of the Company which are maintained
for accounting purposes have been properly written up on a consistent basis
and accurately present and reflect in accordance with UK GAAP all the
transactions to which the Company has been a party and contain complete and
accurate details in all material respects of the business activities of the
Company and of all matters required by CA 1985 to be entered in them. All
other records of the Company are maintained in all material respects in
accordance with all applicable legal requirements on a proper and
consistent basis.
3.5 The Interim Accounts and Management Accounts have been prepared in
accordance with accounting policies consistent with those used in the
preparation of the Audited Accounts insofar as appropriate in the
preparation of unaudited accounts of their nature. Having regard to the
purpose for which the Interim Accounts and Management Accounts are prepared
they are sufficient to enable a reasonable judgment to be made of the
profits, losses, assets and liabilities of the Company at the date of such
accounts.
3.6 There have been no reports commissioned by the Company concerning the
Company by accountants or by auditors within the three years prior to the
date hereof.
3.7 The Company has not factored or discounted any of its debts or engaged in
financing of a type which would not require to be shown or reflected in the
Accounts.
3.8 So far as the Warrantors are aware all debts due to the Company as at 30th
September 1996 (less any specific provision made) have either prior to the
date hereof realised or will within 12 months after such date realise their
full amount in cash.
3.9 The accounting reference date of the Company is and has at all times during
the last five years been 31 December.
55
59
3.10 The Company has no material indebtedness, obligations, claims, commitments
or liabilities, accrued, absolute, contingent, threatened or otherwise,
whether or not due or to become due since the Interim Accounts.
4 SHARE CAPITAL
-------------
4.1 There is no option, right to acquire, mortgage, charge, pledge, lien or
other form of security or encumbrance on, over, relating to or affecting
any Subsidiary its issued or authorised share capital and there is no
agreement or commitment to give or create any of the foregoing and no
person has made any claim to be entitled to any of the foregoing.
4.2 No share or loan capital of the Company is now under option or is agreed or
resolved conditionally or unconditionally to be created or issued or put
under option.
4.3 The Company has not at any time:
(a) purchased or redeemed or repaid or agreed to purchase, redeem or repay
any share capital; or
(b) given or agreed to give any financial assistance in connection with
any such acquisition of share capital as would fall within sections
151 to 158 (inclusive) CA 1985.
4.4 The Company has not made and is not proposing to make a distribution except
out of profits available for the purpose and none of the reserves appearing
in the Accounts are undistributable reserves.
5 OWNERSHIP AND CONDITION OF ASSETS
---------------------------------
5.1 The fixed and loose plant, machinery, furrniture, fixtures, fittings,
equipment, vehicles and all other assets used in relation to the Group's
business are the property of the relevant Group Company free from any hire
or hire-purchase agreement or agreement for payment on deferred terms or
xxxx of sale or Security Interest and have at all material times been and
are in the possession of or under the control of the relevant Group
Company.
5.2 The Company owns or has and will following Completion have, the right to
use all assets that it needs to carry on the Business as carried on
immediately prior to or currently contemplated by the Warrantors to be
carried on after Completion.
5.3 All plant, machinery, vehicles and equipment owned or used by the Company
is in good condition fair wear and tear excepted and in working order, has
been properly serviced and maintained, where appropriate, on a regular
basis by competent personnel and complies with appropriate safety
regulations and none is in need of renewal or replacement.
56
60
5.4 The Company keeps an up to date plant register of the fixed assets used by
it in its business and such register is complete and accurate in all
material respects.
5.5 There has been no exercise or purported exercise of any Security Interest
over any of the fixed or other assets of the Company and so far as the
Warrantors are aware there is no dispute directly or indirectly relating to
any such assets.
5.6 In respect of all plant machinery and equipment held by the Company under
any hire-purchase, conditional sale, leasing or rental agreement:
(a) true and accurate particulars of all such hire-purchase and
conditional sale agreements, leases and rental agreements are attached
to the Disclosure Letter;
(b) all such hire-purchase and conditional sale agreements, leases and
rental agreements are in full force and effect;
(c) the Company is in compliance with all obligations under all material
hire- purchase and conditional sale agreemen[s, leases and rental
agreements;
(d) all consents required to be obtained under such hire purchase and
conditional sale agreements, leases and rental agreements in
connection with the transactions contemplated under this Agreement
have been obtained and are in full force and effect;
(e) so far as the Warrantors are aware at the date hereof no circumstance
exists by virtue of which the lessor or the owner is or might be
entitled to require an upward adjustment to the rental;
(f) so far as the Warrantors are aware no circumstances have occurred
which would entitle the lessor or the owner to terminate any such
hire-purchase, conditional sale, leasing or rental agreement; and
(g) so far as the Warrantors are aware no inquiry or investigation is
being conducted by the Inland Revenue concerning the availability to
the lessor of capital allowances in respect of the plant and machinery
concerned.
5.7 Other than in relation to the Properties the Company has good and
unencumbered title to all assets of the Company (whether personal, tangible
or intangible) and where necessary to establish title to such assets is
properly constituted by documents of title which are in the possession and
under the control of the Company.
6 INSURANCE
---------
6.1 The Company has effected all insurances required by law to be effected by
it.
57
61
6.2 Full particulars of all insurance policies maintained by the Company and
currently in force (the "POLICIES") are contained in the Disclosure Letter.
6.3 All premiums due on the Policies in respect of such insurance cover have
been paid; all the other conditions of the Policies have been performed and
observed in all material respects; and so far as the Warrantors are aware
none of the Policies has or may become void or voidable as a result of an
act or omission of the Company.
6.4 The Policies, are in the possession of the Company.
6.5 The Policies will continue in full force and effect notwithstanding
Completion.
6.6 No claim exceeding [Pound Sterling]5,000 is outstanding either by the
insurer or the insured under any of the Policies and no claim against the
Company by any third party is outstanding in respect of any risk covered by
any of the Policies or by any policy previously held by the Company.
6.7 The Warrantors are not aware of any circumstances which would or might
entitle the Company to make a claim under any of the Policies or which
would or might be required under any of the Policies to be notified to the
insurers.
6.8 The Company has no keyman insurance or equivalent insurance with respect to
any of its directors or employees.
6.9 The Company is now and has at all material times been adequately covered by
insurance relating to all risks which in the reasonable commercial opinion
of the Directors of the Company are appropriate having regard to the
business and activities of the Group including in particular, but without
limitation against accident, damage, injury, third party loss (including
product liability) and loss of profits
7 TRADING
-------
7.1 The Company has not entered into any agreement or arrangement with any
customer on terms materially different from its standard terms of business,
copies of which are attached to the Disclosure Letter.
7.2 Save for any warranty implied by law or contained in its standard terms of
business, the Company has not given any warranty, power of attorney or
guarantee, or made any material representation, in respect of goods or
services supplied or agreed to be supplied by it.
7.3 No part of the Company's business has been materially and adversely
affected by the loss during the 24 months ended on the Accounts Date of:
(a) any important customer or source of supply, (being a customer or
supplier which over a period of three months or more during those 24
58
62
months has accounted for 10 per cent. or more in value of the goods or
services supplied by or to the Company during that period); or
(b) an overall decrease in the value of orders received by or supplies
made to the Company;
and no such customer or supplier as referred to in paragraph 7.3(a) has
given written notice to the Company of an intention to cease or reduce to a
material extent trading with or supplies to the Company.
7.4 So far as the Warrantors are aware neither this Agreement nor Completion
will cause the Company to lose the benefit of any right or privilege which
it presently enjoys.
7.5 So far as the Warrantors are aware neither this Agreement nor Completion is
likely to cause any person who normally does business with the Company not
to continue to do so on the same basis; and
7.6 The Company has not committed any breach of any agreement to which it is a
party.
7.7 Other than as set out in its standard terms of business the Company is not
under any liability:
(a) to replace or remedy defects in any products, or to make good any
errors or omissions in services, supplied or agreed to be supplied
under any contract; or
(b) to service, repair, maintain, take back or otherwise do or not do
anything in respect of products which would apply after such goods
have been delivered,
and so far as the Warrantors are aware there is no reason to expect the
Company to be called upon to do any such thing in the future in relation to
products or services previously supplied or agreed to be supplied.
7.8 The Company has not paid to any person any sum in the nature of a bribe or
inducement.
7.9 The Company is not a party to any written confidentiality or secrecy
agreement or undertaking which may restrict its use or disclosure of any
information.
7.10 The Company has direct control of and access to:
(a) all subsisting written agreements to which it is a party; and
(b) all records, systems, data and information held by it or on its behalf
which are recorded, maintained, stored or otherwise wholly or partly
dependent
59
63
on any system (including, without limitation, any electronic,
mechanical or photographic process whether computerised or not)
whether operated by the Company or not.
7.11 No substantial part of the Company's business is carried on under the
agreement or consent of a third party, nor is there any agreement which
significantly restricts the fields in which the Company carries on its
business.
7.12 There are not now outstanding any agreements or arrangements (whether by
way of guarantee, indemnity, warranty, representation or otherwise) under
which the Company is under a prospective or contingent liability in respect
of any disposal by the Company of all of its assets or business or any
substantial part thereof.
7.13 The Company is not a party to any agreement under which any consent is
necessary to consummate the transactions contemplated in this Agreement.
8 TRANSACTIONS SINCE THE ACCOUNTS DATE
------------------------------------
8.1 Since the Accounts Date:
(a) the Company has entered into transactions and incurred liabilities in
the ordinary course of day-to-day business operations and not
otherwise incurred any material liability;
(b) so far as the Warrantors are aware the assets of the Company have not
been depleted by any unlawful act on the part of any person;
(c) there has been no materially adverse change in the financial or
trading position of the Company and its business has been carried on
in the ordinary course and in the same manner (including nature and
scale) as immediately before the Accounts Date;
(d) no loan or loan capital has been repaid by the Company in whole or in
part or has become liable to be so repaid;
(e) save for the ordinary business of an Annual General Meeting, there has
been no resolution of or consent by the members or any class of
members of the Company;
(f) the Company has paid its creditors within the time limits agreed with
such creditors; and
(g) the Company has not offered price reductions or discounts or
allowances on sales of products or services or provided them at less
than cost to an extent that may materially affect its profitability.
60
64
9 FINANCIAL MATTERS
-----------------
9.1 Full details of all bank accounts maintained or used by each Group Company
(including, in each case, the name and address of the bank with whom the
account is kept and the number and nature of the account) and of all direct
debit or standing order or similar authorities applicable to any of these
accounts and statements showing the balance on each account as at the close
of business on a date not being more than two days prior to Completion are
attached to the Disclosure Letter. Since the date of each statement no
payment out of any of the accounts has been made, except for routine
payments in the ordinary course of trading, and the present balances are
not substantially different from those shown in the statement.
9.2 Amounts represented by cheques, warrants, mandates or other payment
instructions issued or given by the Company which at the date of this
Agreement remain outstanding or unpaid or unperformed do not exceed in the
aggregate [Pound Sterling]1 million.
9.3 In relation to Security Interests and in relation to all overdraft, loan
and other financial and leasing facilities available to the Company:
(a) details in reasonable particularity thereof and true and correct
copies of all documents relating thereto are attached to the
Disclosure Letter;
(b) there has been no contravention of or non-compliance with any
provision of any such document;
(c) no steps for the have been taken or so far as the Warrantors are aware
threatened in relation thereto;
(d) all of the said arrangements or facilities are in full force and
effect;
(e) so far as the Warrantors are aware nothing has been done or omitted to
be done whereby the continuance of the said arrangements and
facilities in full force and effect might be affected or prejudiced;
and
(f) none of the arrangements is dependent on the guarantee or indemnity
of, or on any security provided by, a third party.
9.4 The total amount borrowed by the Company:
(a) from its bankers does not exceed its overdraft facilities; or
(b) from whatsoever source does not exceed any limitation on borrowing
contained in its Memorandum or Articles of Association or equivalent
constitutional documents or any debenture or loan instrument or other
deed or document binding on it.
61
65
9.5 Save for the borrowings referred to in paragraphs 9.3 and 9.4 the Company:
(a) does not have outstanding any loan capital;
(b) has not incurred or agreed to incur any borrowing which it has not
repaid or satisfied;
(c) has not lent or agreed to lend any money which has not been repaid to
it other than trade credit incurred in the normal course of business;
(d) does not own the benefit of any debt present or future (other than
debts due to it in respect of the sale of trading stock in the normal
course of trading); and
(e) is not a party to or has any obligation under:
(i) 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
(ii) any other arrangement the purpose of which is to raise money or
provide finance or credit.
9.6 So far as the Warrantors are aware no event has occurred or been alleged
which is or, with the passage of a time and/or the giving of any notice,
certificate, declaration or demand, would become an event of default under,
or a 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.
9.7 The Company is neither a party to, nor has any liability (including, so far
as the Warrantors are aware, any prospective or contingent liability)
under, any guarantee, indemnity or other agreement or like obligation to
secure or support an obligation of a third party including (without limit)
any Group Company.
9.8 There is no outstanding indebtedness on any account whatsoever owing by the
Company to any Vendor or by any Vendor to the Company.
9.9 No Vendor has given any guarantee or indemnity or created any other like
obligation or given comfort in support of the Company which remains
outstanding.
9.10 The Company does not hold any security (including any guarantee or
indemnity) which is not valid and binding by the Company against the
grantor thereof in accordance with its terms.
62
66
9.11 Completion of this Agreement will not result in the creation,
crystallisation or enforcement of any Security Interest over any asset of
the Company.
9.12 The Disclosure Letter contains full details of each grant or subsidy or
other financial assistance received or receivable by the Company from any
governmental or quasi-governmental authority and so far as the Warrantors
are aware the Company has not done, or omitted to do, any act which could
result in all or part of any such assistance becoming repayable early or
being forfeited or withheld and so far as the Warrantors are aware
Completion of this Agreement will not give rise thereto.
9.13 No loan has been made by the Company in breach of the Consumer Credit Xxx
0000 or any other law or regulation whether in the United Kingdom or
elsewhere.
10 EMPLOYEES
---------
10.1 There is attached to the Disclosure Letter a schedule showing the following
information in relation to each employee of the Company namely:
(a) name;
(b) date of birth;
(c) job title;
(d) emoluments (including any bonus, commission arrangements and any
non-cash benefits accrued or likely to accrue in the current fiscal
year);
(e) date of commencement of employment or of any previous employment with
which such employment is continuous;
(f) notice period required to be given by the Company and the employee;
(g) whether entitled to participate in the Company's personal pensions
salary sacrifice scheme and the extent of their sacrifice in the
current fiscal year or whether entitled to participate in any of the
Company's pension schemes;
(h) whether or not a member of a trade union; and
(i) date of last increase in salary
and such information is complete and correct in all material respects.
10.2 True, up to date and complete copies of the contracts of employment and the
confidentiality agreements between the Company and its employees and any
other documents currently in force relating to the employment of the
employees are
63
67
attached to the Disclosure Letter together with all service agreements for
the Directors and Associate Directors and copies of all agreements with
consultants currently in force to which the Company is a party.
10.3 Since 1 July 1996 no change has been made in the terms and conditions of
any employee entitled to remuneration at a rate in excess of [Pound
Sterling]50,000 per annum and no such change is anticipated or due within 6
months from the date of this Agreement.
10.4 The Company has maintained adequate up to date records regarding the
service of each of its employees (including details of terms of employment,
payments of statutory or other sack pay, statutory or other maternity pay,
disciplinary and health and safety matters, income tax and social security
contributions and termination of employment).
10.5 Since 1 July 1996, no employee earning in excess of [Pound Sterling]20,000
per annum has given notice terminating his contract of employment or is
under notice of dismissal and no amount due to or in respect of any
employee or former employee is in arrear and unpaid other than his salary
for the month current at the date of this Agreement and in respect of the
reimbursement of the expenses claims already received by the Company from
the employees.
10.6 The Company is not involved in any dispute with its employees or any of
them or any trade union or other organisation formed for a similar purpose
and so far as the Warrantors are aware there are no present circumstances
(including Completion) which are likely to give rise to any such dispute.
10.7 Within the period of one year preceding the date of this Agreement:
(a) the Company has not given notice of any redundancies to the Secretary
of State for Employment or started consultations with any independent
trade union or unions or appropriate representatives and has not
failed to comply with any obligation under Part IV, Chapter II of the
Trade Union and Labour Relations (Consolidation) Xxx 0000; and
(b) the Company has not been a party to any relevant transfer as defined
in the Transfer of Undertakings (Protection of Employment) Regulations
1981 and the Company has not failed to comply with any duty to inform
and consult any independent trade union or appointed representative.
10.8 No gratuitous payment has been made or promised by the Company in
connection with the actual or proposed termination, breach, suspension or
variation of any employment or engagement of any present or former
director, officer or employee of or consultant to the Company; and there is
no outstanding obligation or ex gratia arrangement for the Company to pay
any compensation to any present or former director, officer, employee or
consultant following the termination of their employment or engagement.
64
68
10.9 There is no collective bargaining agreement or other arrangement (whether
binding or not) between the Company and any trade union or other body
representing its employees.
10.10 With the exception of PAYE and national insurance contributions in respect
of the fiscal year current at Completion the Company does not have
outstanding any undischarged liability to pay to any governmental or
regulatory authority in any jurisdiction any contribution, taxation or
other levy arising in connection with the employment or engagement of
personnel by the Company.
10.11 Details of all existing share option schemes, profit related pay schemes
or other incentive schemes for any director, officer or employee have been
included in the Disclosure Letter and the Company is not proposing to
introduce any new share incentive scheme, share option scheme or profit
sharing bonus or other incentive scheme for any director, officer or
employee.
10.12 So far as the Warrantors are aware neither this Agreement nor Completion
will or is likely to cause any director, officer or senior employee to
terminate his engagement or employment with the Company.
11 CONTRACTS
---------
11.1 No circumstances exist which constitute a ground on which any material
contract to which the Company is a party could be avoided, repudiated,
rescinded, prematurely determined (whether as a result of this Agreement,
the sale of the Sale Shares or otherwise) or declared to be invalid or
which would give any other contracting party the right to impose any
material obligation (whether to make payment on or otherwise) on, the
Company and the Company has not received any notice of a claim to that
effect or notice indicating that such a claim is foreseeable.
11.2 So far as the Warrantors are aware no liability in respect of any claim
against the Company arising out of any defect in design, material or
workmanship of any products supplied by the Company before Completion or
out of any error or omission on the part of the Company in the supply of
any service before Completion will exceed in amount the limit of insurance
cover in force for the benefit of the Company against such a claim and all
such claims will be met under such insurance cover.
11.3 The Company is not a party to any contract, or legal obligation which:
(a) is of an unusual or abnormal nature, or outside the ordinary course of
trading or involving or which may involve obligations on the Company
calling for special mention; or
(b) is of a long term nature (that is, unlikely to have been fully
performed in accordance with its terms within 18 months after the date
on which it was entered into or undertaken); or
65
69
(c) is incapable of termination by the Company in accordance with its
terms on no more than 12 months notice; or
(d) gives any party an option to acquire or dispose of any asset or
requires another person to do so; or
(e) is known by the Warrantors to be likely to result in a loss to the
Company on completion or performance; or
(f) cannot readily be fulfilled or performed by the Company on time
without undue or unusual expenditure of money, effort or personnel; or
(g) involves payments by or to the Company by reference to fluctuations in
any index of retail prices, any other index, the rate of exchange for
any currency or the cost or value of any raw material or commodity
(other than contracts in the ordinary course of trading); or
(h) (or in relation to which) any relevant requirements of section 319 CA
1985 have not been complied with; or
(i) other than in the ordinary course of business involves or is likely to
involve outstanding expenditure by the Company of more than
[Pound Sterling]20,000; or
(j) involves or is likely to involve the supply of goods or services the
aggregate sales value of which will, during the next two years,
represent in excess of 5 per cent. of the turnover of the Company for
the preceding financial year; or
(k) is a contract for hire or rent, hire-purchase or purchase by way of
credit or instalment payment or for maintenance of the Company's
assets the annual payment for which exceeds [Pound Sterling]20,000,
and the Company has no offer, bid, tender or proposal outstanding which by
the acceptance or other act of some other person would give rise to any
such transaction.
11.4 The Company has no liability for industrial training levy or for any other
statutory or governmental levy or charge.
11.5 There are no powers of attorney or other authorities (express or implied)
which are still outstanding or effective to or in favour of any person to
enter into any contract or commitment or to do anything on behalf of the
Company (other than on such authority of directors or of employees as
either is ostensible or is implied to enter into routine contracts in the
normal course of their duties).
11.6 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
66
70
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.
12 THE PROPERTIES AND OTHER INTERESTS IN LAND
------------------------------------------
12.1 The Company is the beneficial owner of those Properties set opposite its
name in schedule 4 and the Properties comprise all the properties owned or
occupied by any Group Company or in which the Group Company has any right
or interest. The information set out in schedule 4 is true and complete and
accurate at the date hereof.
12.2 The title to each of the Properties is properly constituted by documents of
title which are in the possession or under the control of the Company.
12.3 Copies of all the documents relating to the title to the Properties and
copies of all the documents in the Company's possession relating to the use
of the Properties have been produced to the Purchaser's Solicitors.
12.4 Each of the Properties is free from:
(a) any undisclosed mortgage, charge, rent-charge, lien or other third
party right in the nature of security and no such matter exists which
is capable of registration against any of the Properties; and
(b) so far as the Warrantors are aware any undisclosed overriding
interests (as defined in section 70 of the Land Registration Act
1925).
12.5 The Company has sole and exclusive possession of each of the Properties
vested in it and (subject as aforesaid) there are no circumstances known to
the Warrantors which would entitle or require any landlord to exercise any
powers of entry or right to forfeiture or right to take possession or which
would otherwise restrict or terrainate the continued sole and exclusive
possession or occupation of each of the Properties by the Company.
12.6 Save as revealed by the copy documents supplied to the Purchasers'
Solicitors, no person is entitled to any option, interest in, right of
pre-emption, first refusal, surrender or determination relating to the
Company's interest in any of the Properties. Any options or rights enjoyed
by the Company have been properly protected by the appropriate registration
where necessary and all appropriate notices have been properly served where
any such option or right has become exercisable.
12.7 Save as revealed by the copy documents supplied to the Purchaser's
Solicitors or apparent on inspection there is no undisclosed covenant,
stipulation, restriction, easement, right of way, exception, reservation,
grant, condition, agreement or
67
71
declaration affecting any of the Properties or its use nor is there any
subsisting or alleged breach of any of the said matters.
12.8 Save as revealed by the copy documents supplied to the Purchasers'
Solicitors, the Properties are not subject to the payment of any outgoings
other than general business or water rates and the sums reserved by the
lease or tenancy agreement under which any of the Properties are held.
12.9 So far as the Warrantors are aware the Company has performed and observed
in all material respects the repairing and decorating obligations (whether
under statute or the relevant leases) in relation to the Properties
12.10 The Company has paid all outgoings for which proper demand has been made
and all rent or licence fees which have become due in respect of each of
the Properties. The Company has performed and observed all material
current obligations under all covenants (excluding all repairing and
decorating obligations) (whether affecting the freehold or leasehold
titles), conditions, agreements, statutory requirements, planning
consents, byelaws, orders and regulations affecting any of the Properties,
its use and any business of the Company there carried on. No notice of any
breach of any such matter has been received. No use of any of the
Properties contravenes in any material respect any of such covenants,
conditions, agreements, statutory requirements, planning consents,
byelaws, orders or regulations.
12.11 The actual existing use of each of the Properties is specified in schedule
4 and is lawful or permitted under the Town and Country Planning
legislation. The Company has received no notice of any contravention of
any of the provisions of the Town and Country Planning legislation. There
are no outstanding enforcement notices, Stop Notices, enforcement
proceedings or appeals (whether against refusal, deemed or otherwise,
conditions or enforcement). No existing user is stated to be personal. No
planning permission is suspended or remains unimplemented in whole or in
part. No planning application has been submitted which awaits
determination.
12.12 There are no outstanding orders or notices of any local or other authority
affecting any of the Properties.
12.13 There are not in force or required to be in force any licences (whether
under the Licensing Xxx 0000 or other statutes or regulations thereunder
or otherwise) which apply to any of the Properties or to the business
carried on therein.
12.14 The Company has not received notice of nor is it aware of any dispute
relating to any of the Properties.
12.15 So far as the Warrantors are aware, there is no material defect in the
construction or condition of any of the Properties.
68
72
12.16 In relation to such of the Properties as are leasehold where the rent
reserved by the lease or tenancy of any one of the Properties is subject
to review, all rent review notices have been served within any requisite
time limits and there are no disputes outstanding as to the settlement of
the relevant level of rent nor have there been previous disputes as to the
interpretation or implementation of the rent review provisions.
12.17
(a) Written particulars (including copies of all documents where
requested) of all sub leases, sub tenancies and licences for
occupation of any of the Properties or any parts thereof and of all
variations and proposed variations thereof or derivative interests
therein of which the Company or the Warrantors is aware and of the
grant or proposed grant of any licerices pursuant to the provisions of
any such documents have been supplied to the Purchaser.
(b) There is no claim or dispute pending or, so far as the Warrantors are
aware expected, either by or with the Company or by or with any such
sub lessee, licensec or occupier.
12.18 No solicitors other than the Vendor's Solicitors or Messrs. X. Xxxxxx &
Son are instructed by or on behalf of the Company in connection with any
matter relating to any of the Properties.
12.19 Since the Accounts Date the Company has not acquired or disposed of or
agreed to acquire or dispose of the whole or any part of any land or
buildings or any interest therein, nor will it acquire or dispose of the
whole or any part of any land or buildings or interest therein without the
prior written consent of the Purchaser.
12.20 The Company has not at any time entered into either the lease of or a
licence to assign any leasehold property as a guarantor of the lessee's
covenants contained in any such document. The Company has not at any time
assigned or otherwise disposed of any leasehold property without receiving
a full and legally effective indemnity in respect of its liability under
the lease pursuant to which that property was held. No claim has been made
against the Company in respect of any leasehold property formerly held by
it or in respect of which it acted as a Guarantor nor is any such claim
anticipated.
13 ENVIRONMENTAL MATTERS
---------------------
13.1 The Company:
(a) complies and has at all times complied with all Environmental Laws and
Environmental Licences;
(b) has obtained and maintained in full force and effect all Environmental
Licences, and there are no conditions, facts or circumstances
entitling any
69
73
such Environmental Licence to be revoked, suspended, amended, varied,
withdrawn or not renewed or which would prevent compliance with any
Environmental Licence; and
(c) is not required by any Environmental Licence or any Environmental Law
or as the result of any Environmental Claim to incur any expenditure
which is material in the context of the business of such Group Company
or to desist from taking any action which might have a material
adverse effect on such Group Company's financial condition.
13.2 There are attached to the Disclosure Letter complete and up-to-date copies
of all Environmental Licences and all orders, notices, directions,
applications, appeals, amendments and reports and any other communications
relating to or in connection with any Environmental Licence.
13.3 No Environmental Claim is pending or has been made or threatened against
the Company or any of its past or present directors, secretary or senior
employees in their capacity as such or any occupier of any property owned
or leased by the Company and the Warrantors do not have any reason to
believe that the Company or any of its officers has or is likely to have
any liability in relation to Environmental Matters.
13.4 No Relevant Substance has been deposited, disposed of, kept, treated,
imported, exported, transported, processed, manufactured, used, collected,
sorted or produced at any time, or is present in the environment (whether
or not on property owned, leased, occupied or controlled by a Group
Company) in circumstances, and there is nothing arising out of the business
of the Company which are likely to result in an Environmental Claim against
the Company or which would entitle any authority lawfully to bring an
Environmental Claim against the Company or which would have a material
adverse effect on the use or value of any property owned, leased, occupied
or controlled by a Group Company.
13.5 There are attached to the Disclosure Letter material details (including,
where appropriate copies of relevant reports or other documents) of any
inspections, investigations, studies, audits, tests, reviews or other
analyses by or supplied to the Company in relation to Environmental Matters
relating to the Company or any property now or previously owned, leased or
occupied by any of the Group Companies.
14 INSIDER MATTERS
---------------
14.1 There is not, nor during the six years prior to the date hereof has there
been, any agreement, arrangement, loan, quasi-loan or undertaking to which
the Company is a party and in which any Vendor or any other person
beneficially interested in the share capital of the Company at that time or
(except for service agreements) any director of the Company or any person
associated with any of them within the meaning of section 435 Insolvency
Act 1986 is or has been interested.
70
74
14.2 The Company has not been party to any transaction falling within section
320 CA 1985 (substantial property transactions).
14.3 No member of the Group has transferred any asset to any Vendor or to any
subsidiary of any corporate Vendor, or to any person beneficially
interested in any part of the share capital of any member of the Group, or
any director of any member of the Group or any person associated with any
such director (within the meaning of section 435 Insolvency Act 1986),
except at market value.
15 INTELLECTUAL PROPERTY RIGHTS
----------------------------
15.1 Complete and accurate particulars of all Intellectual Property Rights of
which the Company is, or has applied to be, registered as proprietor are
set out in the Disclosure Letter.
15.2 Complete and accurate particulars of all material licences granted to or by
the Company in respect of Intellectual Property Rights or Confidential
Information are set out in the Disclosure Letter.
15.3 All application, renewal and other official statutory and regulatory fees
rendered to and received by the Company prior to the date hereof relating
to the application, maintenance and renewal of the Intellectual Property
Rights or for the protection or enforcement thereof have been duly paid.
15.4 All Intellectual Property Rights used by the Company in connection with its
business are subsisting and not the subject of any application for
cancellation or amendment or licence of fight or compulsory licence and are
either validly licensed to the Company or legally and beneficially owned
solely by the Company free from and clear of any liens, mortgages, security
interests, charges, restrictions or encumbrances (other than licences
granted by the Company to customers in the ordinary course of its business)
and (to the extent of rights arising in the UK where registration is the
only means of statutory protection) the Company is registered or has
applied to be registered as proprietor thereof. The Company has the fight
and authority to use all Intellectual Property Rights used by the Company.
15.5 The Company has not granted and is not obliged to grant any licences under
any Intellectual Property Rights owned by it or licensed to it nor to
provide Confidential Information to any person in each case other than to
customers in the ordinary course of its business.
15.6 The Company has not infringed the Intellectual Property Rights of any other
person.
15.7 There exists no actual or threatened infringement (including misuse of
Confidential Information) or so far as the Warrantors and Company are aware
any event likely to constitute an infringement or breach by any third party
of any
71
75
of the Intellectual Property Rights held or used by the Company within the
past three years.
15.8 No disclosure has been made to any person other than the Purchaser of any
material Confidential Information of the Company except in the ordinary
course of business and on the footing that such disclosure is to be
treated as being of a confidential nature.
15.9 There has occurred no act, omission or event which would entitle any
authority or person to cancel, forfeit or modify any registerable
Intellectual Property Rights owned or used by the Company and there is no
litigation or other proceedings (whether legal or administrative) pending
or threatened involving any of the Intellectual Property Rights or so far
as Warrantors and the Company are aware any circumstance likely to give
rise to any such proceeding and to the best of the information, knowledge
and belief of the Vendor no person has made any claim adverse to the
continuing enjoyment by the Company of the Intellectual Property Rights.
15.10 Since the Accounts Date the Company has not sold, granted an option to
purchase in respect of or otherwise disposed of any Intellectual Property
Rights owned or used by the Company otherwise than by licences to
customers in the ordinary course of business.
15.11 The Company does not use or otherwise carry on its business under any name
other than its corporate name and its letters and order forms comply with
all applicable legislation.
15.12 All inventions, developments and software made by any employees of the
Company and used or enjoyed by the Company were made in the course of the
normal duties of the employee concerned and are owned by the Company and
no claim for compensation under section 40 Patents Act 1977 or otherwise
has been made against the Company nor to the best of the knowledge
information and belief of the Warrantors is any such claim likely to be
made.
15.13 No person is entitled to assert any moral or similar right in respect of
any Intellectual Property Rights used by the Company.
15.14 The Warrantors and the Company are not aware of any material
non-conformance in any computer programs owned or used by the Company with
the written specifications against which they were supplied to the Company
and such computer programs are sufficient for the requirements of the
Company's businesses as currently carried on.
15.15 The Company has in its possession and control all source codes relating to
the computer programs the Intellectual Property Rights in which are owned
by it.
15.16 All computer programs owned and used by the Company were either:
72
76
(a) written or created by the employees of the Company in the ordinary
course of their duties; or
(b) written for the Company by a third party and such party has executed a
valid and effective assignment of all Intellectual Property Rights in
such computer programs in favour of the Company.
15.17 The Company operates logical, physical and environmental security
procedures and commercially available anti-virus software in line with
those procedures to detect so far as possible and deal with such
infections or contamination.
15.18 The hardware and computer programs used or acquired for the business of
the Company do not infringe any Intellectual Property Right or other right
of any third party and so far as the Warrantors and the Company are aware
no third parties are infringing the third party or other right in the
hardware and computer programs owned or used by the Company.
15.19 All necessary back-up systems are utilised to ensure that in the event of
any fault in any essential computer system used by the Company, no data
might be irrecoverably lost and no such faults have occurred in the last
12 months.
15.20 The Company has complied in all respects with the provisions of the Data
Protection Act 1984 and no order has been threatened against the Company
for erasure of personal data under section 24(3) Data Protection Xxx 0000.
16 LITIGATION
----------
16.1 Neither the Company nor so far as the Warrantors are aware any person for
whose acts the Company may be vicariously liable (in circumstances where
the company may be so liable) is engaged in any capacity in any
litigation, arbitration, prosecution or other legal proceedings or in any
proceedings or hearings before any statutory or governmental body,
department, board or agency; no such matters are pending or so far as the
Warrantors are aware threatened; and the Warrantors are not aware of any
circumstances which are likely to give rise to any such matter.
16.2 There is no outstanding judgment, order, decree, arbitral award or
decision of any court, tribunal, arbitrator or governmental agency against
the Company or so far as the Warrantors are aware any person for whose
acts the Company may be vicariously liable.
16.3 The Company is not a party to any subsisting undertaking given to any
court or third party arising out of any proceedings of the kind described
in paragraph 16.1.
17 INSOLVENCY
----------
17.1 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
73
77
Company and no petition has been presented and no meeting has been
convened for the purpose of winding up the Company.
17.2 No administration order has been made and no petition for such an order
has been presented in respect of the Company.
17.3 No receiver (which expression shall include an administrative receiver)
has been appointed in respect of the Company or in respect of all or any
part of its assets.
17.4 No voluntary arrangement has been proposed under section 1 Insolvency Xxx
0000 in respect of the Company.
17.5 The Company is not insolvent or unable to pay its debts within the meaning
of section 123 Insolvency Act 1986 and has not stopped paying its debts as
they fall due.
17.6 No distress, execution or other process has been levied or threatened in
respect of any asset of the Company.
17.7 No composition in satisfaction of the debts of the Company or scheme of
arrangement of its affairs or compromise or arrangement between it and its
creditors and/or members or any class of its creditors and/or members has
been proposed, sanctioned or approved.
17.8 No event analogous to any of the circumstances mentioned in any of the
foregoing sub-paragraphs of this paragraph 17 has occurred in relation to
the Company outside England.
17.9 No guarantee, loan capital, borrowed money or interest is overdue for
payment by the Company and no other obligation or indebtedness is
outstanding which is substantially overdue for performance or payment.
17.10 So far as the Warrantors are aware no circumstances have arisen which are
likely to result in:
(a) a transaction to which the Company is a party being set aside; or
(b) a third party claim involving any asset owned or used by the Company
being made under section 238 or 339 (Transactions at an undervalue)
or sections 239 or 340 (Preferences) Insolvency Xxx 0000.
18 PENSIONS
--------
18.1 In this paragraph:
"DISCLOSED ARRANGEMENTS" means the Pension Schemes, the ICV Limited Group
Life Assurance Scheme ("LIFE SCHEME") the ICV Group Limited Permanent
Health Insurance Scheme ("PHI SCHEME") and the ICV Group Travel Insurance
74
78
Scheme ("GROUP TRAVEL INSURANCE SCHEME") any other arrangements for
providing Relevant Benefits details of which are contained in the
Disclosure Letter;
"RELEVANT BENEFITS" means pensions, allowances, lump sums, gratuities,
expense payments or other like benefits in respect of retirement, death,
termination of employment (whether or not voluntary), ill-health, injury,
disablement or medical or dental treatment provided for or in respect of
any Relevant Employee;
"RELEVANT EMPLOYEE" means any director or former director or employee or
former employee of the Company;
"PENSIONS ACT" means the Xxxxxxx Xxxxxxx Xxx 0000;
"PENSION SCHEMES" means the Xxxxx Xxxxxx SSAS ("SSAS"), the Selective
Pension Plan with Clerical and Medical Assurance Limited. ("SELECTIVE
PENSION PLAN"), the Personal Retirement Account with Save & Prosper (the
"PERSONAL RETIREMENT ACCOUNT"), the Directors Retirement Account with
Albany Life Assurance (the "ALBANY LIFE SCHEME") and the Professional Life
Executive Pension Scheme with Skandia Master Trust No. 1 (the "SKANDIA
SCHEME").
18.2 Apart from the Disclosed Arrangements, the Company is not under any legal
liability or voluntary or moral obligation to provide any Relevant Benefits
(whether on a funded or unfunded basis) or to contribute to any scheme or
arrangement providing Relevant Benefits (including any personal pension
scheme approved under Chapter IV, Part XIV ICTA 1988) nor has any proposal
been announced to pay any Relevant Benefits or establish or contribute to
any such scheme or arrangement.
18.3 True and complete copies have been supplied to the Purchaser of:
(a) all trust deeds, rules, notices and other documents governing the
Disclosed Arrangements and the participation therein of the Company;
(b) all announcements, members' booklets and other explanatory literature
of current effect relating to the Disclosed Arrangements and any
letters or other documents relating to provisions for individual
Relevant Employees or groups of Relevant Employees;
(c) all policies, agreements and other arrangements of current effect
entered into in relation to the Disclosed Arrangements with insurance
companies, investment managers, advisers or other persons;
(d) the latest actuarial valuation report and trustees' report and audited
accounts for the Pension Schemes together with any supplementary
actuarial or accounting advice relating to the Pension Schemes; and
75
79
(e) those undertakings in relation to the Pension Schemes or the Life
Scheme given to the Occupational Pensions Board or the Pension Schemes
Offflee (or its predecessor, the Superannuation Funds Office) of the
Inland Revenue and any notification of approval of the Pension Schemes
or the Life Scheme by the Inland Revenue.
18.4 Full details in writing have been supplied to the Purchaser of all
discretionary practices in relation to the Disclosed Arrangements
(including, without limitation, in relation to eligibility, contributions,
increases in pensions in payment and in deferment, optional benefits and
augmentation of benefits) and the current terms applicable on early
retirement (voluntarily or as a result of ill-health or redundancy), late
retirement, commutation, optional dependant's pension and other optional
arrangements.
18.5 None of the resources of the Pension Schemes are invested in any loan or
other arrangement with any beneficiary or any employer-related investment
(as defined in section 112 Pensions Act) or are subject to any charge or
encumbrance or are being used for the purposes of stock lending or similar
arrangements.
18.6 All of the Company's current employees other than Xxx. X. Xxxxxxx and
Xx X. Xxxxx are covered by the PHI Scheme and Life Scheme.
18.7 Xxxxx Xxxxxx is the only Relevant Employee for whom Relevant Benefits are
provided under the Pension Schemes and there are no other arrangements in
place in respect of Relevant Benefits for any other Relevant Employee
other than the PHI Scheme and the Life Scheme and the Group Travel
Insurance Scheme.
18.8 The current rates of contributions payable in respect of the Disclosed
Arrangements by the Company and, where applicable, the Relevant Employees
are as set out in the Disclosure Letter and all such contributions up to
and including the Completion Date have been paid or will have been paid by
the Completion Date.
18.9 All actuarial consultancy, legal and other fees, charges and expenses in
respect of the Disclosed Arrangements other than costs incurred in
connection with the preparation, negotiation and completion of this
Agreement and the day to day running costs incurred in the ordinary course
of business have been paid or will have been paid by the Completion Date
and so far as the Warrantors are aware no additional services have been
provided in relation to the Disclosed Arrangements in respect of which an
account or other invoice has not been rendered.
18.10 All death in service benefits (other than refunds of contributions)
payable under the Pension Schemes, and all benefits under the other
Disclosed Arrangements, are now and will up to and including the
Completion Date be insured in the sums disclosed in the Disclosure Letter;
under policies effected with the insurance companies listed in the
Disclosure Letter. So far as the Warrantors are aware cover under such
policies is provided at the relevant insurance company's normal
76
80
rates and on its normal terms for persons in good health. All premiums due
under such policies have been paid or will have been paid by the
Completion Date; and so far as the Warrantors are aware there are no
grounds on which any such policies may be avoided.
18.11 The Pension Schemes are not contracted-out schemes within the meaning of
section 7(3) Pensions Act.
18.12 The Warrantors are not aware of any breach of trust in respect of the
Disclosed Arrangements. There are no material actions, suits or claims
(other than routine claims for benefits) which are pending or so far as
the Warrantors are aware threatened in respect of the Disclosed
Arrangements no or any circumstances existing which may give rise to any
such actions, suits or claims.
18.13 No payment of any of the assets of the Pension Schemes has been made to
the Company (or any other participating employer) or will have been so
made up to and including the Completion Date.
18.14 So far as the Warrantors are aware the Disclosed Arrangements have been
administered in accordance with their governing documents and all
applicable legal requirements, including (without limitation) (a) in
relation to the Pension Schemes, the requirements of the Pensions Act
relating to preservation (Part IV, Chapter I); equal access (section 118);
disclosure of information (section 113); registration (section 6);
revaluation of pensions (Part IV, Chapter II); and transfer values (Part
IV, Chapter Iv); and (b) the equal treatment requirements of Article 119
of the Treaty of Rome; and (c) in relation to the SSAS, the requirements
of the Retirement Benefits Schemes (Restriction on Discretion to Approve)
(Small Self-Administered Schemes)Regulations 1991.
18.15 The Pension Schemes and the Life Scheme have been formally approved by the
Board of Inland Revenue and are treated by them as exempt approved schemes
under Chapter I, Part XIV ICTA 1988 and there are no circumstances
existing which would cause such approval to be withdrawn or placed in
jeopardy.
18.16 So far as the Warrantors are aware all records relating to the Disclosed
Arrangements have been properly maintained.
18.17 There are no employers participating in the Disclosed Arrangements on a
temporary basis and there are no arrangements outstanding in relation to
paying or receiving any bulk transfer payment in connection with the
Pension Schemes.
18.18 So far as the Warrantors are aware the assets of the Pension Schemes have
not been depleted by any improper or unlawful act and, in respect of such
assets as are held to provide money purchase benefits or in respect of
additional voluntary contributions such assets represent fully all such
contributions paid by or in respect of the relevant members together with
all income and gains accruing thereto less any costs or deductions made by
the Trustees of the Pension Schemes.
77
81
19 EC/COMPETITION MATTERS
----------------------
19.1 The Company conducts, and has conducted its business fully in accordance
with the requirements of all competition laws (whether of the UK, EEC, or
other jurisdiction) applicable to its business activities and has not
infringed such requirements nor been investigated for any alleged
non-compliance or infringement nor given any undertakings in connection
therewith.
19.2 For the purposes of paragraph 19.1 and 19.3 the term "competition laws"
includes any applicable rules dealing with state aid, public procurement,
or anti-dumping, and the requirements of any special regulatory regime to
which the Company may be subject in any area of its activities.
19.3 The Company is not subject to any prohibition, order, condition,
undertaking, assurance or similar measure or obligation imposed by or under
any of the laws referred to in paragraph 19.1.
19.4 The Company is not, and has not been subject to any investigation, request
for information, notice or other communication (whether formal or informal,
and whether or not in writing) by any court, governmental or regulatory
authority pursuant to any of the laws referred to in paragraph 19.1.
19.5 The Warrantors have no reason to believe that any such action as is
mentioned in paragraph 19.1 will be taken against it in relation to any of
its current activities.
20 MISCELLANEOUS
-------------
20.1 No Vendor has any interest in any other company or business which has a
close trading relationship with or is in competition with the Company.
20.2 No-one is entitled to receive from the Company any finder's fee, brokerage
or commission or other benefit in connection with the sale of the Sale
Shares.
78
82
PART C - TAXATION AND SOCIAL SECURITY WARRANTIES FROM THE WARRANTORS
--------------------------------------------------------------------
1.1 The Tax Returns which ought to have been made by or in respect of the
Company, including (without limitation):
(i) returns under section 203 ICTA 1988 and the Income Tax
(Employments) Regulations 1993 (PAYE) and regulations governing
the deduction of national insurance contributions; and
(ii) returns of distributions and of income tax and advance
corporation tax under section 234(5)-(9) and Schedules 13 and 16
ICTA 1988
have been duly made; all such Tax Returns and any other notices
(including notification of chargeability to corporation tax under
section 10(1) Taxes Management Act 1970 ("TMA 1970")), accounts and
information supplied to the Inland Revenue or H.M. Commissioners of
Customs and Excise ("Customs") or other Taxation Authority concerned
for any such purposes are up-to-date, correct and have been made on a
proper basis; none of such Tax Returns, notices, accounts or
information is disputed in any material respect by the Taxation
Authority concerned and there is no fact known to the Warrantors,
having made all reasonable enquiries, which might give rise to any
such dispute or to any liability to Taxation not provided for in the
Accounts in respect of any accounting period (as defined in section 12
ICTA 1988) or any other period by reference to which such liability to
Taxation may arise, in either case ending on or before the Accounts
Date.
(b) Other than as disclosed in the Disclosure Letter, in relation to all
such Tax Returns, either the time limit for the assessment of any
liability to Taxation by reference thereto has expired or such Tax
Returns have been agreed with the relevant Taxation Authority such
that any liability to Taxation in respect of the accounting period (or
other relevant period) or matter the subject thereof has been finally
determined and any such liability to make an actual payment of
Taxation has been discharged by payment in full of the relevant amount
of Taxation.
1.2 In all computations submitted to the Inland Revenue proper adjustment has
so far as material been made for any disallowable expenditure by reason of
section 577 ICTA 1988.
1.3 Other than as disclosed in the Disclosure Letter, all Taxation for which
the Company is liable and which ought to have been paid has been paid.
Without prejudice to the generality of the foregoing, all income tax
deductible and payable under the PAYE system (including, but not limited
to, income tax in relation to the sub-contractor's tax deduction scheme,
casual labour and employee benefits) has so far as required been deducted
from all payments made by the Company; all amounts due to be paid to the
Inland Revenue in respect of such income tax have been paid, and all
deductions and payments required to be made by the Company
79
83
in respect of National Insurance contributions (including employers
contributions) have been made.
1.4 Other than as disclosed in the Disclosure Letter, the Company is not
liable, and has not within three years prior to the date hereof, been
liable to pay any penalty, fine, surcharge or interest in connection with
any Taxation.
1.5 All payments required to be made by the Company by way of statutory sick
pay pursuant to section 151 Social Security Contributions and Benefits Xxx
0000 and the regulations made thereunder have been duly made; no such
payment or decision not to make a payment of statutory sick pay is under
dispute or, so far as the Warrantors are aware, will be disputed either by
an employee (or any person acting on his behalf) or by the Secretary of
State for Social Services; and no recovery of statutory sick pay paid by
the Company has been denied, whether by reason of section 158 Social
Security Contributions and Benefits Xxx 0000 or otherwise.
1.6 Other than as disclosed in the Disclosure Letter, no payment has been made
by the Company to or in respect of any of its directors or any director of
any of the Vendors (including, but not limited to, pension contributions)
which will not be deductible for corporation tax purposes, either in
computing its income profits or in computing the corporation tax payable by
it.
1.7 The provisions included in the Accounts are sufficient to cover all
Taxation in respect of all accounting periods ended on or before the
Accounts Date for which the Company was then or might at any time
thereafter become or have become liable including (without limitation)
Taxation:
(a) on or in respect of or by reference to the profits, gains or income
earned or accrued or deemed for Taxation purposes to be earned or
accrued for any period ended on or before the Accounts Date; or
(b) in respect of distributions made and interest and charges on income
paid on or before the Accounts Date.
1.8 Full disclosure has been made in the Disclosure Letter of any material
difference between the accounting and the taxation treatment of any items
in the Accounts.
1.9 Full disclosure has been made in the Disclosure Letter of all those matters
relating to Taxation in respect of which the Company has, or will at
Completion have, an outstanding entitlement under any statute relating to
Taxation to make:
(a) any claim, disclaimer or election for relief from Taxation;
(b) any election for an alternative basis or method of Taxation;
(c) any appeal against any assessment to Taxation; or
80
84
(d) any application for postponement of Taxation,
in any case falling within (a) or (b) above, where, to the best of the
Warrantors' knowledge, such claim, disclaimer or election is material to
the Company.
1.10 The Company has sufficient records to determine the Taxation consequences
which would arise on any disposal or on the realisation of any asset owned
at the Accounts Date or acquired since that date but before Completion
(including, without limitation on the generality of the foregoing, the
Taxation consequences of any restriction on set-off of pre-entry losses
pursuant to Schedule 7A TCGA 1992).
1.11 Other than as disclosed in the Disclosure Letter, the amount of Taxation
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.
1.12 Since 1984, the Company has not been a close company within the terms of
section 414 ICTA 1988.
1.13 Since the Accounts Date:
(a) other than as disclosed in the Disclosure Letter, no dividend has been
declared or paid on, and no distribution of capital made in respect
of, any share capital of the Company and no loan or loan capital of
the Company has been paid in whole or in part;
(b) other than as disclosed in the Disclosure Letter, the Company has not
made any claim under any of sections 152, 153, 154, 175 and 279 TCGA
1992;
(c) other than as disclosed in the Disclosure Letter, no expenditure
(other than capital expenditure) has been incurred nor any rents,
interest, annual payments or any other sums have been paid or are
liable to be paid by the Company which are wholly or partly
disallowable as a deduction or a charge on income in computing profits
for the purposes of corporation tax;
(d) other than as disclosed in the Disclosure Letter, no event has
occurred which will result in the Company becoming liable to pay or
bear a Taxation liability directly or primarily chargeable against or
attributable to another person, firm or company;
(e) no accounting period (as defined in section 12 of ICTA 1988) of the
Company has ended as referred to in section 12(3) of ICTA 1988;
81
85
(f) no disposal has taken place or other event occurred which, so far as
the Warrantors are aware, will or is likely to have the effect of
crystallising a liability to Taxation which should have been included
in a provision for deferred taxation contained in the Accounts if such
disposal or other event had been planned or predicted at the Accounts
Date;
(g) other than as disclosed in the Disclosure Letter, the Company has not
paid any Taxation after its due date for payment and does not owe any
Taxation the due date for payment of which has passed or will arise in
the 30 days after the date of this Agreement; and
(h) the Company has not been involved in any transaction which has given
or may give rise to a liability to Taxation on the Company (or would
have given or might give rise to such a liability but for the
availability of any relief) other than Taxation in respect of normal
trading income or receipts of the Company arising from transact'ions
entered into by it in the ordinary course of business.
1.14 No relief has been claimed by and/or given to the Company, or taken into
account in determining or eliminating any provision for Taxation or
deferred tax in the Accounts, which is likely to the knowledge of the
Warrantors to be effectively withdrawn, postponed, restricted or otherwise
lost as a result of any event or circumstance occurring or arising at any
time after Completion.
1.15 During the three years before the date hereof:
(a) there has been no major change in the nature or conduct of a trade
carried on by the Company; and
(b) the scale of activities of any trade carried on by the Company has not
been small or negligible within the meaning of sections 245 or 768
ICTA 1988.
1.16 Full disclosure (in the form of the tax computations as disclosed) has been
made to the Purchaser of all material capital expenditure qualififing for
capital allowances and all balancing adjustments pursuant to the Capital
Xxxxxxxxxx Xxx 0000 ("CAA 1990") and Chapter I Part XIII ICTA 1988 in
respect of any accounting period (as defined in section 12 ICTA 1988) of
the Company ended in the six years before the Accounts Date.
1.17 In respect of all plant and machinery held by the Company under any lease,
hire purchase or conditional sale agreement, such plant and machinery is
and has at all times been used for a qualifying purpose in the requisite
period in accordance with Chapter V Part II CAA 1990.
1.18 Save as disclosed in the Accounts, since the end of the last such
accounting period referred to in paragraph 1.16 above other than in the
ordinary course of business the Company has neither done nor omitted to do
nor agreed to do nor
82
86
permitted to be done any act as a result of which there may be made either
a balancing charge in respect of such capital expenditure within the
provisions referred to in paragraph 1.16 above or any recovery of excess
relief within section 47 CAA 1990.
1.19 No balancing charge in respect of any capital allowances claimed or given
will arise if any assets of the Company were to be realised for a
consideration equal to the amount of the book value thereof as shown or
included in the Accounts.
1.20 Other than as disclosed in the Disclosure Letter, and disregarding any
relief or allowance (including indexation relief) available to the Company
(other than amounts allowable under section 38 TCGA 1992), no chargeable
gain or profit would arise if any asset of the Company (other than trading
stock) were to be realised for a consideration equal to the book value
thereof as shown or included in the Accounts.
1.21 All capital assets of the Company were acquired at market value at the time
of acquisition and there are no circumstances giving rise or which may give
rise to liability or loss under or pursuant to any of sections 17, 30, 139,
140, 176, 177, 178 and 179 TCGA 1992 as a result of the proposed sale of
the Sale Shares or of any other transaction.
1.22 Other than as disclosed in the Disclosure Letter, the Company has neither:
(a) repaid, redeemed or purchased or agreed to repay, redeem or purchase
any of its share capital; nor
(b) capitalised or agreed to capitalise in the form of shares or
debentures, any profits or reserves of any class or description, or
otherwise issued or agreed to issue share capital otherwise than for
new consideration (as defined in section 254 ICTA 1988).
1.23 The Company has not made any disposals to which section 35 TCGA 1992
applies (1982 rebasing).
1.24 So far as the Warrantors are aware, the Company has made all withholdings,
deductions and retentions of or on account of Taxation as it was or is
obliged to make and all such payments of or on account of Taxation as
should have been made to any tax authority in respect of such withholdings,
deductions or retentions.
1.25 Except as provided for in the Accounts no distribution (within the meaning
of sections 209 and 210 ICTA 1988) has been made by the Company during the
6 years ended on the Accounts Date.
1.26 The Company is not, nor could it be treated as, thinly capitalised for any
Taxation purpose. No tax authority has denied relief for interest paid by
the Company, and no such relief is likely, to the knowledge of the
Warrantors, to be denied.
83
87
1.27 The Company is not liable for any Taxation owed by any other company which
has been sold out of the same group of companies as the Company in respect
of accounting periods beginning before such sale.
1.28 Since 1st January 1990, the Company has not been concerned in any
transaction in which the following provisions have been or could be applied
except where all applicable clearances (based on full disclosure of
material facts and circumstances) have been obtained:
sections 703 and 704 ICTA 1988;
sections 765, 766 and 767 ICTA 1988;
section 770 ICTA 1988;
section 776 ICTA 1988;
sections 779 to 786 (inclusive) ICTA 1988;
sections 135, 136 and 137 TCGA 1992;
sections 139 and 140 TCGA 1992;
section 192 TCGA 1992 and sections 213 to 218 (inclusive) ICTA 1988;
sections 219 to 229 (inclusive) ICTA 1988.
1.29 The Company has not received notice of any direction made by the Inland
Revenue under section 747 ICTA 1988 and no circumstances exist which would
entitle the Inland Revenue to make such a direction and to apportion to the
Company any profits of a controlled foreign company pursuant to section 752
ICTA 1988.
1.30 No circumstances exist by virtue of which the provisions of Chapter V of
Part XVII ICTA 1988 could apply to a disposal of an asset by the Company.
1.31 There have been no claims by the Company for group relief under Chapter IV
of Part X ICTA 1988 or for the surrender of advance corporation tax under
section 240 ICTA 1988 for the four years ended on the Accounts Date. The
Company is not liable to make any payment for the relief or advance
corporation tax surrendered to it under those provisions. The Company is
not liable to surrender the relief or advance corporation tax under those
provisions. There are no arrangements whereby the Company may become liable
to repay any sums paid to it for the surrender of the relief or advance
corporation tax under those provisions.
1.32 So far as the Warrantors are aware, the Company is not liable for any
Taxation as the agent of any other person or business and the Company does
not constitute a permanent establishment of any other person, business or
enterprise for any Taxation purpose.
1.33 The Company is and has at all times been resident in the UK for tax
purposes and is not and has not been treated as resident or otherwise
subject to Taxation in any other jurisdiction for any Taxation purpose
(including for the purpose of any double taxation agreement).
84
88
1.34 In relation to VAT:
(a) the Company is a registered and taxable person for the purposes of the
Value Added Tax Xxx 0000 ("VATA 1994") and has complied in all
material respects with VATA 1994 and any statutory modification or
re-enactment thereof and all orders, provisions, directions or other
conditions made or imposed thereunder or under any other law relating
to VAT;
(b) other than as disclosed in the Disclosure Letter, no company in the
Group has applied to Customs under section 43 VATA 1994 to be treated
as nor have two or more such companies been treated as a group for VAT
purposes;
(c) all amounts due to be paid to Customs prior to Completion will have
been paid at the date thereof, no dispute exists between the Company
and Customs and there are no present circumstances which are likely to
give rise to any such dispute;
(d) on all invoices issued by the Company, VAT at the percentage rate
which at the time of the relevant supply was chargeable thereon has
been so charged and all amounts of VAT which have been so charged
since the last return made by the Company to Customs have been
retained by the Company for the account of Customs pending the next
return date;
(e) all statutory records required to be kept by the Company have been
properly kept and all statutory returns required to be made by the
Company have been correctly made up to the date hereof, no defaults
have been suffered under the default surcharge provisions of section
59 VATA 1994 and all amounts claimed by way of input tax have been
properly and rightly claimed;
(f) the Disclosure Letter contains full details of any claim for bad debt
relief made by the Company under section 36 VATA 1994 and the
regulations thereunder;
(g) the Company has not made and does not make exempt supplies for VAT
purposes (except such exempt supplies as may be disregarded in
calculating the amount of input tax for which the Company may claim a
credit or repayment under section 24 VATA 1994);
(h) the Company has not made an election pursuant to paragraph 2 Schedule
10 VATA 1994;
(i) no asset of the Company is a capital item the input tax on which may
be subject to adjustment in accordance with the provisions of Part XV
of the Value Added Tax Regulations 1995;
85
89
(j) the Company neither is nor has at any time been liable, nor taken any
ACTION likely to make it liable, to a self-supply charge under
paragraph 6 Schedule 10 VATA 1994;
(k) the Company is not required to make payments on account of VAT for
which it may become liable in a prescribed accounting period (pursuant
to the Value Added Tax (Payments on Account) Order 1993 and the Value
Added Tax Regulations 1995);
(1) the Company has not been required by Customs to give security under
paragraph 4 Schedule 11 VATA 1994;
(m) so far as the Warrantors are aware, no circumstances exist whereby the
Company would or might become liable for VAT as an agent or otherwise
by virtue of section 47 VATA 1994;
(n) all VAT due and payable upon the importation or acquisition of goods
and all customs and excise duties due and payable to Customs in
respect of any assets (including trading stock) imported or owned by
the Company have been paid in full;
(o) the Company has not been appointed as a tax representative by any
person pursuant to section 48 VATA 1994;
(p) the Company has not registered, and so far as the Warrantors are
aware, is not required to register, for VAT purposes in any country
other than the United Kingdom.
1.35 No claim has been made by the Company under section 42 Finance Xxx 0000
during the 12 months before the date hereof.
1.36 Other than as disclosed in the Disclosure Letter, all documents in the
possession of the Company or to the production of which the Company is
entitled and which attract stamp or transfer duty in the United Kingdom or
elsewhere have been duly stamped.
1.37 The Company has not been party to any transaction whereby the Company is or
could become liable to stamp duty reserve tax.
1.38 Other than as disclosed in the Disclosure Letter, neither the Inland
Revenue nor Customs nor any other Taxation Authority has at any time
carried out or is at present conducting any audit or investigation into the
business or affairs of the Company (or any aspect thereof) other than
routine compliance visits and correspondence and the Warrantors, having
made all reasonable enquiries, know of no reason why any such investigation
should be initiated.
1.39
86
90
(a) Up-to-date copies of profit-related pay schemes which the Company has
applied to register or has registered with the Inland Revenue have
been supplied to the Purchaser.
(b) So far as the Warrantors are aware, no circumstances exist which will
entitle the Inland Revenue to recover tax from the Company under
section 179 ICTA 1988 and there are no other circumstances which have
resulted or will result in any excess tax relief being given to
employees who are or have been included in a profit-related pay
scheme.
(c) The annual returns and accountants' reports required under section 180
ICTA 1988 and any other information required under section 181 ICTA
1988 have been supplied to the Inland Revenue.
1.40
(a) No notice has been given to the Inland Revenue which includes the
Company as the surrendering or recipient company under section 102
Finance Act 1989 (surrender of company tax refund within group).
(b) The Company is not included in any special arrangements for group
relief purposes under which a group of companies makes joint amended
returns covering companies in the arrangement.
(c) Other than as disclosed in the Disclosure Letter, all corporation tax
due and payable by the Company in respect of accounting periods ending
on or after 1st October 1993 has been paid within nine months of the
end of each accounting period and no liability for interest or
penalties has arisen or is now accruing.
(d) Other than as disclosed in the Disclosure Letter, no estimated
assessments or determinations relating to the Company are under
discussion, or are a matter of dispute, with the Inland Revenue, or
are the subject of an appeal.
(e) All corporation tax returns that should have been filed pursuant to
notices served on the Company under section 11 TMA 1970 have been
filed within the relevant time limits so that no penalties or interest
have arisen or are accruing for late filing. The returns have been
complete and accurate in all respects and have not included any
estimated figures.
1.41 No charge exists in favour of any Taxation Authority over any of the
properties or assets of the Company.
1.42 Other than as disclosed in the Disclosure Letter, the Company has not
requested any extension of time within which to file any Tax Return which
Tax Return has not since been filed.
87
91
1.43 Other than as disclosed in the Disclosure Letter, the Company does not have
in effect any extension, waiver or comparable consent of any time limit
with respect to any Taxation.
1.44 No power of attorney has been granted by the Company with respect to any
matter relating to Taxation which is currently in force.
1.45 The Company is not party to any agreement providing for the allocation or
sharing of any Taxation.
1.46 The Company has not made any Tax Election which, so far as the Warrantors
are aware, will or may have the effect of increasing any liability to
Taxation for the Company after the Completion Date.
1.47 The Company has never received any investment grant.
88
92
SCHEDULE 9
----------
PURCHASERS' WARRANTIES
----------------------
1 Each Purchaser has the requisite power and authority to execute, deliver
and perform its obligations under this Agreement.
2 P Corporation has the requisite power and authority to allot and issue the
P Corporation Shares and the 2002 Loan Notes in accordance with the terms
of this Agreement without any further sanction.
3 This Agreement constitutes legal, valid and binding obligations of each
of the Purchasers in accordance with its terms.
4 The execution and delivery of, and the performance of the obligations of
each Purchaser under this Agreement have been duly authorised by all
necessary corporate action on the part of each Purchaser whether under its
constitutional documents or otherwise.
5 Subject to performance by the Vendors of their obligations hereunder the
execution and delivery of, and the performance by, each of the Purchasers
of its obligations under, and compliance with the provisions of, this
Agreement by each of the Purchasers will not:
(a) result in a violation of any provision of its constitutional
documents; or
(b) result in a breach of, or constitute a default under, any instrument
to which it is a party or by which it or any of its assets is subject
or bound; or
(c) result in a violation of any law or regulation in any jurisdiction
having the force of law or of any order, judgement or decree of any
court or governmental agency or agreement to which it is party or by
which it or any of its assets is subject or bound; or
(d) conflict with, violate, result in a breach of, or cause a default
under any other material restriction of any kind or character to which
it or any of its assets is subject.
6 The issue of the P Corporation Shares and the 2002 Loan Notes will comply
in all respects with all relevant laws and regulations in the United States
of America and the State of New York and all agreements to which any member
of the P Corporation Group is a party or by which any member of the P
Corporation Group is bound.
7 It is not necessary in connection with the offer and sale by P Corporation
to the Vendors who are not US persons within the meaning of Regulation S
promulgated under the Securities Xxx 0000 to register such P Corporation
Shares or 2002 Loan Notes under the Securities Act in reliance on the
exemption
89
93
afforded by Regulation S. In addition, it is not necessary in connection
with the offer and sale by P Corporation to the Vendors who are US persons
within the meaning of Regulation S to register such P Corporation Shares or
2002 Loan Notes under the Securities Act in reliance on the exemption
afforded by Section 4 (2) of such Act.
8 P Corporation has delivered to the Vendors correct and complete copies of
each report, schedule, registration statement and definitive proxy
statement (other than preliminary material) filed by P Corporation with the
SEC on or after 1 September 1994 which are all the documents that P
Corporation was required to file with the SEC on or after such date ("P
CORP SEC DOCUMENTS"). As of their respective dates or, in the case of
registration statements, their effective dates (or if amended or superseded
by a filing prior to the date of this Agreement, then on the date of such
filing), none of the P Corp SEC Documents (including all exhibits and
schedules thereto and documents incorporated by reference therein)
contained any untrue statements of a material fact or omitted to state a
material fact required to be stated therein or necessary in order to make
the statements therein, in light of the circumstances under which they were
made, not misleading, and the P Corp SEC Documents complied when filed in
all material respects with the then applicable requirements of the
Securities Act or the Exchange Act, as the case may be, and the rules and
regulations promulgated by the SEC thereunder. P. Corporation has ,filed
all documents and agreements which were required to be filed as exhibits to
the P Corp SEC Documents.
9 The financial statements of P Corporation included in the P Corp SEC
Documents complied as to form in all material respects with the then
applicable accounting requirements and the published rules and regulations
of the SEC with respect thereto, were prepared in accordance with generally
accepted accounting principles ("GAAP") applied on a consistent basis
during the periods involved (except as may have been indicated in the notes
thereto or, in the case of the unaudited statements, as permitted by Form
10-Q promulgated by the SEC) and fairly present (subject, in the case of
the unaudited statements, to normal, year-end audit adjustments) the
consolidated financial position of P Corporation and its consolidated P
Corporation Subsidiaries as at the respective dates thereof and the
consolidated results of their operations and cash flows for the respective
periods then ended.
10 No governmental consents approvals or authorities are required by P
Corporation for the valid execution and delivery of this Agreement or the
2002 Loan Notes by P Corporation or the performance of its obligations
hereunder.
90
94
SIGNED by /s/ Xxxxxx X. Xxxxxxxx )
for and on behalf of )
PRIMARK INFORMATION ) /s/ Xxxxxx X. Xxxxxxxx
SERVICES UK LIMITED )
in the presence of: )
/s/ Xxxxxxx Xxxx
solicitor
SIGNED by /s/ Xxxxxx X. Xxxxxxxx )
for and on behalf of )
PRIMARK CORPORATION ) /s/ Xxxxxx X. Xxxxxxxx
in the presence of: )
/s/ Xxxxxxx Xxxx
solicitor
SIGNED by )
XXXXX XXXXXX ) /s/ Xxxxx Xxxxxx
in the presence of: )
/s/ Xxxxxxx Xxxx
solicitor
SIGNED by /s/ Xxxxxxx Xxxx )
as attorney of GNI HOLDINGS ) /s/ Xxxxxxx Xxxx
LIMITED in exercise of a )
power of attorney )
dated 23rd October 1996 )
in the presence of: )
/s/ Xxxxxxx Xxxx
solicitor
SIGNED by /s/ Xxxxxxx Xxxx ) /s/ Xxxxxxx Xxxx
as attorney of XXXXX XXXXXX )
in exercise of a power of attorney )
dated 22nd October 1996 )
in the presence of: )
/s/ Xxxxxxx Xxxx
solicitor
SIGNED by /s/ Xxxxxxx Xxxx )
as attorney of XXXXX XXXXXXXX ) /s/ Xxxxxxx Xxxx
HOLDINGS LIMITED )
in exercise of a power of attorney )
dated 23rd October 1996 )
in the presence of: )
/s/ Xxxxxxx Xxxx
solicitor
91
95
SIGNED by /s/ Xxxxxxx Xxxx ) /s/ Xxxxxxx Xxxx
as attorney of TECHNICAL )
INVESTMENTS HOLDING S.A. )
in exercise of a power of attorney )
dated 22nd October 1996 )
in the presence of: )
/s/ Xxxxxxx Xxxx
solicitor
SIGNED by XXXXXXXX J. HISOCKS ) /s/ Xxxxxxx X. Hisocks
for and on behalf of )
3i plc )
in the presence of: )
SIGNED by /s/ Xxxxxxx Xxxx ) /s/ Xxxxxxx Xxxx
as attorney of XXXXXXX TRUSTEE )
(JERSEY) LIMITED )
in exercise of a power of attorney )
dated 18th October 1996 )
in the presence of: )
/s/ Xxxxxxx Xxxx
solicitor
SIGNED by /s/ Xxxxxxx Xxxx ) /s/ Xxxxxxx Xxxx
as attorney of GEVA McCALDIN )
in exercise of a power of attorney )
dated 28th September 1996 )
in the presence of: )
/s/ Xxxxxxx Xxxx
solicitor
SIGNED by /s/ Xxxxxxx Xxxx ) /s/ Xxxxxxx Xxxx
as attorney of XXXXX DEAR )
in exercise of a power of attorney )
dated 23rd October 1996 )
in the presence of: )
/s/ Xxxxxxx Xxxx
solicitor
92
96
SIGNED by /s/ Xxxxxxx Xxxx ) /s/ Xxxxxxx Xxxx
as attorney of XXXXX XXXX )
in exercise of a power of attorney )
dated 22nd October 1996 )
in the presence of: )
/s/ Xxxxxxx Xxxx
solicitor
SIGNED by /s/ Xxxxxxx Xxxx ) /s/ Xxxxxxx Xxxx
as attorney of XXXXX XXXXXXXXX )
in exercise of a power of attorney )
dated 22nd October 1996 )
in the presence of: )
/s/ Xxxxxxx Xxxx
solicitor
SIGNED by /s/ Xxxxxxx Xxxx ) /s/ Xxxxxxx Xxxx
as attorney of XXXXX XXXXXXXX )
in exercise of a power of attorney )
dated 23rd October 1996 )
in the presence of: )
/s/ Xxxxxxx Xxxx
solicitor
SIGNED by /s/ Xxxxxxx Xxxx ) /s/ Xxxxxxx Xxxx
as attorney of XXXXX XXXXXXXX )
in exercise of a power of attorney )
dated 22nd October 1996 )
in the presence of: )
/s/ Xxxxxxx Xxxx
solicitor
SIGNED by /s/ Xxxxxxx Xxxx ) /s/ Xxxxxxx Xxxx
as attorney of XXXXX XXXXXX )
in exercise of a power of attorney )
dated 23rd October 1996 )
in the presence of: )
/s/ Xxxxxxx Xxxx
solicitor
SIGNED by /s/ Xxxxxxx Xxxx ) /s/ Xxxxxxx Xxxx
as attorney of XXXX XXXXX )
in exercise of a power of attorney )
dated 23rd October 1996 )
in the presence of: )
/s/ Xxxxxxx Xxxx
solicitor
93
97
SIGNED by /s/ Xxxxxxx Xxxx ) /s/ Xxxxxxx Xxxx
as attorney of XXXXX XXXXX )
in exercise of a power of attorney )
dated 23rd October 1996 )
in the presence of: )
/s/ Xxxxxxx Xxxx
solicitor
SIGNED by /s/ Xxxxxxx Xxxx ) /s/ Xxxxxxx Xxxx
as attorney of XXXXXXXXXXX XXXX )
XXXXX XXXXXX )
in exercise of a power of attorney )
dated 17th October 1996 )
in the presence of: )
/s/ Xxxxxxx Xxxx
solicitor
SIGNED by ) /s/
XXXXXXX X. XXX and XXXXXX )
X. XXXXX as trustees of the Xxxxxxx )
Xxxxx Xxxxx Xxxxxxx Trust U/D/T May )
27 1987 in the presence of: )
SIGNED by )
XXXXX XXXXXXXX XXXXXXXXX ) /s/ X. Xxxxxxxxx
in the presence of: )
/s/ Xxxxxxx Xxxx
solicitor
SIGNED by )
PAREN KNADJIAN ) /s/ Paren Knadjian
in the presence of: )
/s/ Xxxxxxx Xxxx
solicitor
94
98
SIGNED by ) /s/ Xxxxxx Xxxxxxx
XXXXXX XXXXXXX )
in the presence of: )
/s/ Xxxxxxx Xxxx
solicitor
95
