DATED 10 JUNE 2004
(1) A XXXXXX AND OTHERS
- AND -
(2) STERICYCLE UK, LTD.
AGREEMENT
relating to
the sale and purchase of Xxxxx Xxxx
Environmental Limited
CONTENTS
1. DEFINITIONS AND INTERPRETATION................................................. 1
2. SALE AND PURCHASE OF SHARES.................................................... 11
3. CONSIDERATION.................................................................. 12
4. COMPLETION..................................................................... 14
5. ESCROW ACCOUNT AND CLAIMS AGAINST THE WARRANTORS............................... 15
6. WARRANTIES..................................................................... 16
7. WARRANTORS' COVENANTS.......................................................... 18
8. SET OFF AGAINST LOAN NOTES..................................................... 20
9. TAXATION....................................................................... 21
10. FURTHER ASSURANCE AND ATTORNEY................................................. 21
11. ANNOUNCEMENTS.................................................................. 22
12. COSTS.......................................................................... 22
13. SUCCESSORS AND ASSIGNMENT...................................................... 22
14. ENTIRE AGREEMENT............................................................... 23
15. VARIATIONS..................................................................... 23
16. WAIVER......................................................................... 24
17. AGREEMENT CONTINUES IN FORCE................................................... 24
18. SEVERABILITY................................................................... 24
19. NOTICES........................................................................ 24
20. COUNTERPARTS................................................................... 25
21. THIRD PARTY RIGHTS............................................................. 25
22. MISCELLANEOUS.................................................................. 25
23. GOVERNING LAW AND JURISDICTION................................................. 25
SCHEDULE 1.............................................................................. 26
Details of the Vendors, the Shares and the Consideration........................... 26
SCHEDULE 2.............................................................................. 27
Part 1............................................................................. 27
The Company........................................................................ 27
Part 2............................................................................. 29
The Subsidiaries................................................................... 29
SCHEDULE 3.............................................................................. 31
The Warranties..................................................................... 31
Part 1............................................................................. 31
General............................................................................ 31
Part 2............................................................................. 58
Property matters................................................................... 58
TITLE.............................................................................. 58
Part 3............................................................................. 62
Pensions........................................................................... 62
SCHEDULE 4.............................................................................. 65
Taxation........................................................................... 65
Part 1............................................................................. 65
Definitions and interpretation..................................................... 65
Part 2............................................................................. 69
Tax Warranties..................................................................... 69
Part 3............................................................................. 76
Tax Covenant....................................................................... 76
Part 4............................................................................. 79
Limitations and Procedure.......................................................... 79
SCHEDULE 5.............................................................................. 90
Completion......................................................................... 90
SCHEDULE 6.............................................................................. 92
The Properties..................................................................... 92
SCHEDULE 7.............................................................................. 93
Part 1............................................................................. 93
Completion Accounts................................................................ 93
Preparation of Completion Accounts................................................. 93
SCHEDULE 8.............................................................................. 97
Limitation on the Warrantors' Liability............................................ 97
APPENDIX 1.............................................................................. 103
APPENDIX 2.............................................................................. 104
APPENDIX 3.............................................................................. 105
THIS AGREEMENT is made on 10 JUNE 2004
BETWEEN:
(1) THE PERSONS whose names and addresses are set out in schedule 1
("VENDORS"); and
(2) STERICYCLE UK, LTD., a company registered in England with number
5141715, whose registered office is at Carmelite, 00 Xxxxxxxx
Xxxxxxxxxx, Xxxxxx XX0X 0XX ("PURCHASER").
BACKGROUND
A Xxxxx Xxxx Environmental Limited ("COMPANY") is a private company
limited by shares. Further information relating to the Company and its
Subsidiaries is set out in schedule 2.
B The Vendors are the beneficial owners or are otherwise able to procure
the transfer of the numbers of Shares set opposite their respective
names in column (2) of schedule 1.
C The Vendors have agreed to sell or procure the sale of and the
Purchaser has agreed to purchase the Shares for the consideration and
upon the terms and conditions set out in this agreement.
IT IS HEREBY AGREED:
1. DEFINITIONS AND INTERPRETATION
1.1 In this agreement the following words and expressions shall
(except where the context otherwise requires) have the
following meanings:
"1985 ACT" means the Companies Xxx 0000;
"1989 ACT" means the Companies Xxx 0000;
""A" ORDINARY SHARES" means the 89,334 issued and allotted "A"
ordinary shares of (pound)1 each in the capital of the
Company;
"ACCOUNTS" means the audited consolidated accounts of the
Group comprising (inter alia) the audited consolidated balance
sheet as at the Accounts Date and the audited consolidated
profit and loss account for the period ended on the Accounts
Date, the notes and the cash flow statement relating thereto
and the reports of the directors and auditors thereon;
"ACCOUNTS DATE" means 31 March 2003;
1
""B" ORDINARY SHARES" means the 55,333 issued and allotted "B"
ordinary shares of (pound)1 each in the capital of the
Company;
"BUSINESS DAY" means a day, other than a Saturday, Sunday or
public holiday, on which banks are open for commercial
business in the City of London;
"BUSINESS INTELLECTUAL PROPERTY" means all Intellectual
Property owned and used by any member of the Group;
""C" ORDINARY SHARES" means the 55,333 issued and allotted "C"
ordinary shares of (pound)1 each in the capital of the
Company;
"CLAIM" means any claim for breach of or non-compliance with
this agreement (including any Warranty Claim or claim under
the Tax Covenant);
"COMPANIES ACTS" means the 1985 Act, the 1989 Act and the
Companies Consolidation (Consequential Provisions) Xxx 0000;
"COMPLETION" means the performance of all the obligations of
the parties to this agreement set out in clause 4;
"COMPLETION ACCOUNTS" means the accounts to be prepared
pursuant to clause 3 and schedule 7;
"COMPLETION BOARD MINUTES" means minutes of meetings of the
boards of directors of the Company and the Subsidiaries in the
agreed form;
"COMPLETION DATE" means close of business on the date of this
agreement;
"COMPUTER SYSTEMS" means the computer processors, associated
and peripheral equipment and computer programs used by the
Group at the Completion Date and documentation and data
entered into or created by the foregoing;
"CONFIDENTIAL INFORMATION" means information (however stored)
relating to or connected with the business, customers or
financial or other affairs of the Group details of which are
not in the public domain including, without limitation,
information concerning or relating to:
(a) the Business Intellectual Property and any member of
the Group in the nature of intellectual property;
2
(b) any technical processes, future projects, business
development or planning, commercial relationships and
negotiations; and
(c) the marketing of goods or services including, without
limitation, customer, client and supplier lists,
price lists, sales targets, sales statistics, market
share statistics, market research reports and surveys
and advertising or other promotional materials and
details of contractual arrangements and any other
matters concerning the clients or customers of or
other persons having dealings with any member of the
Group;
"CONSIDERATION" means the consideration for the Shares set out
in clause 3;
"CUSTOMER CONTRACT" means any agreement or arrangement with
any customer of the Group whether or not in writing to which
any member of the Group is a party including all written or
oral amendments or modifications of the Customer Contracts or
supplements to the Customer Contracts;
"DATA ROOM DOCUMENTS" means each of the documents listed in
the index of documents relating to the Group which have been
made available for inspection by the Purchaser, a copy of
which index is annexed to the Disclosure Letter;
"DEATH IN SERVICE SCHEME" means the Xxxxx Xxxx Environmental
Limited Death in Service Scheme which was established under a
Declaration of Trust dated 3 April 2002 and commenced on 4
April 2001;
"DISCLOSED" means fairly disclosed in the Disclosure Letter or
the Disclosure Documents;
"DISCLOSURE DOCUMENTS" means:
(a) the Engineering Reports;
(b) the Environmental Reports; and
(c) the Data Room Documents;
"DISCLOSURE LETTER" means the letter of even date with this
agreement from the Warrantors to the Purchaser relating to the
Warranties together with any documents annexed to it;
3
"ENCUMBRANCE" means a mortgage, charge, pledge, lien, option,
restriction, equity, right to acquire, right of pre-emption,
grant of voting rights, third party right or interest, other
encumbrance or security interest of any kind or any other type
of preferential arrangement (including, without limitation, a
title transfer and retention arrangement) having similar
effect;
"ENGINEERING REPORTS" means the reports dated 13 November 2003
prepared by Xxxxxxxx on the incinerators operated by the Group
and to be addressed to the Company with a right for the
Purchaser to request that such reports be addressed to itself;
"ENVIRONMENTAL LAWS" means any law, statute, regulation and
legally binding, rule, guidance, policy, order, decree or
ruling of any Relevant Authority relating to or imposing
liabilities or obligations for the handling, collection,
transportation, transfer, processing, storage, treatment or
disposal of clinical waste or other waste (including those
intended to provide safe and healthy working conditions and to
reduce occupational safety and health hazards) or any other
legal requirements for the protection of the environment;
"ENVIRONMENTAL REPORTS" means the reports prepared in
connection with the sale of the Group contemplated by this
agreement by URS in relation to environmental matters
concerning the Group;
"EQUAL TREATMENT REQUIREMENTS" means
- Sections 62 to 66 of the Pensions Xxx 0000;
- Articles 137 and 141 of the EC Treaty;
- The Part-time Workers (Prevention of Less Favourable
Treatment) Regulations 2000 (SI 2000/1551); and
- The Fixed-term Employees (Prevention of Less
Favourable Treatment) Regulations 2002 (SI
2002/2034);
"ESCROW ACCOUNT" means an account in the joint names of the
Purchaser's Solicitors and the Vendors' Solicitors to be
established and operated in accordance with clauses 3, 5 and 8
and the Escrow Letter;
4
"ESCROW LETTER" means the letter in agreed form to be
addressed by the Purchaser and the Warrantors to the
Purchaser's Solicitors and the Vendors' Solicitors jointly in
relation to the Escrow Account;
"FSMA" means Financial Services and Markets Xxx 0000;
"GPP" means the Xxxxx Xxxx Environmental Limited Group
Personal Pension Plan provided by Prudential;
"GROUP" means the Company and the Subsidiaries from time to
time and references to a "member of the Group" or a "Group
member" shall be construed accordingly;
"INITIAL ESCROW AMOUNT" means the amount of (pound)1.5 million
to be paid into the Escrow Account at Completion;
"INTELLECTUAL PROPERTY" includes patents, inventions,
know-how, trade secrets and other confidential information,
registered designs, copyrights, data, database rights, design
rights, rights affording equivalent protection to copyright,
database rights and design rights, semiconductor topography
rights, trade marks, service marks, logos, domain names,
business names, trade names, moral rights, and all
registrations or applications to register any of the aforesaid
items, rights in the nature of any of the aforesaid items in
any country or jurisdiction, rights in the nature of unfair
competition rights and rights to xxx for passing-off;
"LETTERS OF CREDIT" means the irrevocable letters of credit in
the agreed form in favour of the Warrantors in the aggregate
principal amount of (pound)6.25 million to be issued by Bank
of America, N.A. as security for payment of the Loan Notes;
"LOAN NOTES" means the loan notes in the agreed form of an
aggregate principal amount of (pound)6.25 million to be issued
by the Purchaser to the Warrantors as part of the
Consideration and to be secured by the Letters of Credit;
"MANAGEMENT ACCOUNTS" means the Management Accounts (Full
Year) or the Management Accounts (Interim), or both, as the
context requires;
"MANAGEMENT ACCOUNTS (FULL YEAR)" means the unaudited
consolidated balance sheets and profit and loss accounts of
the Company and the Subsidiaries in the agreed form as at and
for the financial year ended 31 March 2004;
5
"MANAGEMENT ACCOUNTS (INTERIM)" means the unaudited
consolidated balance sheets and profit and loss accounts of
the Company and the Subsidiaries in the agreed form as at and
for the one month ended 30 April 2004;
"MATERIAL CONTRACTS" means Material Customer Contracts and
Material Other Contracts;
"MATERIAL CUSTOMER CONTRACTS" means the Customer Contracts
listed in appendix 1;
"MATERIAL OTHER CONTRACTS" means (i) all written or oral
agreements or arrangements for the purchase or sale of raw
materials, parts, supplies, products or other personal
property, or for the furnishing or receipt of services, which
involve payments by or to a Group member after the Completion
Date in an amount exceeding (pound)20,000 and (ii) all Vehicle
Leases; but excluding for the avoidance of doubt, (x) Customer
Contracts, (y) contracts with employees and (z) any leases
under which the Properties are held;
"NET ASSET VALUE" means the net asset value of the Group, as
shown in the consolidated balance sheet comprising the
Completion Accounts;
"NON-TAX CLAIM" means any Claim other than a Tax Claim;
"OPTION SHARES" means the 11,937 issued and allotted "D"
ordinary shares of (pound)1 each in the capital of the
Company;
"OTHER CUSTOMER CONTRACTS" means all Customer Contracts other
than Material Customer Contracts;
"PERMITS" means any approval, consent, license, permit,
registration, certificate, waiver, confirmation or other
authorisation issued, granted or otherwise made available by
any Relevant Authority relating to the handling, collection,
transportation, transfer, processing, storage, treatment or
disposal of clinical or other waste;
"PREVIOUS ACCOUNTS" means the audited consolidated accounts of
the Group comprising (inter alia) the audited consolidated
balance sheet as at 31 March 2002 and the audited consolidated
profit and loss account for the period ended on 31 March
6
2002, the notes and the cashflow statement relating thereto
and the reports of the directors and auditors thereon;
"PROPERTIES" means the leasehold land and premises described
in schedule 6 and any part or parts thereof;
"PROPRIETARY SOFTWARE" means all the software which has been
developed by or on behalf of any Group member and all
associated source code, preparatory materials, flow charts,
functional specifications and user and other related
documentation, and includes the Bravo system and the capacity
planning, scheduling and monitoring software used by the
Group;
"PURCHASER'S ACCOUNTANTS" means BDO Xxxx Xxxxxxx LLP of 0 Xxxx
Xxxxxx, Xxxxx XX0 0XX;
"PURCHASER'S GROUP" means (save in schedule 4) at any relevant
time, the Purchaser and each undertaking which is a "group
undertaking" (as defined in section 259 of the Companies Act)
of the Purchaser (including with effect from Completion, for
the avoidance of doubt, the Company/each Group Company) and
references to a "MEMBER OF THE PURCHASER'S GROUP" shall be
construed accordingly;
"RELEVANT AUTHORITY" means any government, government agency,
local authority or any other person or entity having
regulatory authority under Environmental Law and/or any court
of law or tribunal possessing the authority to enforce or to
determine rights and liabilities under Environmental Laws;
"REPAYMENT DATE" means the date which is one year from the
Completion Date;
"SSAP" means the statements of standard accounting practice
issued by the Accounting Standards Board;
"SCHEMES" means the GPP, the Stakeholder Scheme and the Death
in Service Scheme;
"SETTLED CLAIM" means any Unagreed Claim or other claim which
in any case is:
(a) agreed in writing by the Purchaser and the Warrantors
such agreement not to be unreasonably withheld or
delayed following any oral agreement; or
(b) determined by a court of competent jurisdiction;
7
"SHARE WARRANTIES" means the warranties contained or referred
to in clause 6 and schedule 3;
"SHARES" means the "A" Ordinary Shares, the "B" Ordinary
Shares and the "C" Ordinary Shares which together with the
Option Shares comprise the whole of the issued share capital
of the Company;
"SPECIFIED BENEFITS" means pensions, allowances, lump sums or
other like benefits on retirement or on death or on (or
following) leaving service with any Group member (other than
as a result of retirement or death);
"SPECIFIED DEPENDENT" means dependent of any Specified Person;
"SPECIFIED PERSON" means person who is a (present or former)
director, officer or employee of any Group member, or who has
at any time agreed to provide services to any Group member;
"STAKEHOLDER SCHEME" means the stakeholder pension scheme
designated by the Company and provided by Prudential;
"STANDARD SOFTWARE" means off the shelf software packages
generally available to the public;
"SUBSIDIARIES" means all the subsidiary undertakings (as
defined in Section 258 of the 0000 Xxx) of the Company at the
date hereof further details of which are set out in part 2 of
schedule 2 and "Subsidiary" shall mean any of them;
"TAX CLAIM" means a claim for breach of, or non compliance
with a Tax Warranty or a claim under the Tax Covenant;
"PURCHASER'S SOLICITORS" means Xxxxxx Xxxxxxx of Carmelite, 00
Xxxxxxxx Xxxxxxxxxx, Xxxxxxxxxxx, Xxxxxx, XX0X 0XX;
"TAX COVENANT" means any covenant set out in part 3 of
schedule 4;
"TAX WARRANTIES" means the warranties on the part of the
Warrantors in relation to taxation set out in part 2 of
schedule 4;
"TAXES ACT" means the Income and Corporation Taxes Xxx 0000;
8
"UNAGREED CLAIM" means any claim against the Warrantors for
breach of the Warranties or any claim under the Tax Covenant
which is notified in writing by the Purchaser to the
Warrantors stating in reasonable detail the nature of the
claim and the amount claimed by the Purchaser on or before the
second anniversary of the Completion Date, in respect of a
claim for breach of the Share Warranties, or on or before the
sixth anniversary of the Completion Date, in respect of a
claim for breach of the Tax Warranties or the Tax Covenant;
"VAT" means value added tax;
"VEHICLE" means a truck, trailer, van or similar commercial
vehicle but, for the avoidance of doubt, excluding any cars;
"VEHICLE LEASE" means a lease of one or more Vehicles by a
Group member;
"VENDORS' SOLICITORS" or "WARRANTORS' SOLICITORS" means DLA of
Princes Exchange, Xxxxxxx Xxxxxx, Xxxxx XX0 0XX;
"WARRANTIES" means the Share Warranties and the Tax
Warranties;
"WARRANTORS" means Xxxxxx Xxxxx Xxxxxx, Xxxxxxxx Xxxxxx Xxxxx
and Xxxxxxx Xxxx Xxxxxx;
"WARRANTY CLAIM" means any claim for breach of or
non-compliance with any of the Share Warranties or the Tax
Warranties.
"WRES AGREEMENT" means the agreement dated 13 October 2003
between (1) Xxxxx Xxxx Environmental Limited and Facultatieve
Technologies Limited (2) Waste Per Se Limited and (3) WRE
Services Limited in respect of the sale of WRE Services
Limited;
1.2 In this agreement where the context admits:
1.2.1 save in relation to schedule 4, words and phrases
which are defined or referred to in or for the
purposes of the Companies Acts have the same meanings
in this agreement (unless otherwise expressly defined
in this agreement);
1.2.2 sections 5, 6, 8 and 9 of and schedule 1 to the
Interpretation Xxx 0000 apply in the same way as they
do to statutes;
9
1.2.3 reference to a statute, statutory provision or regulation
includes reference to:
1.2.3.1 any order, regulation, statutory instrument or other
subsidiary legislation at any time made under it for
the time being in force (whenever made);
1.2.3.2 any modification, amendment, consolidation,
re-enactment or replacement of it or provision of
which it is a modification, amendment, consolidation,
re-enactment or replacement except to the extent that
any modification, amendment, consolidation,
re-enactment or replacement made after the date of
this agreement would increase the liability of any of
the parties hereto (other than in relation to
Taxation which shall be dealt with in accordance with
the provisions of schedule 4);
1.2.4 reference to statutory obligations shall include obligations
arising under Articles of the Treaty establishing the European
Community and regulations and directives of the European Union
as well as United Kingdom acts of Parliament and subordinate
legislation;
1.2.5 reference to a clause, schedule or paragraph is to a clause,
schedule or a paragraph of a schedule of or to this agreement
respectively;
1.2.6 reference to the parties to this agreement includes their
respective successors, permitted assigns and personal
representatives;
1.2.7 reference to any party to this agreement comprising more than
one person includes each person constituting that party;
1.2.8 reference to any gender includes the other genders;
1.2.9 reference to any professional firm or company includes any
firm or company effectively succeeding to the whole, or
substantially the whole, of its practice or business;
1.2.10 the index, headings and any descriptive notes are for ease of
reference only and shall not affect the construction or
interpretation of this agreement;
1.2.11 this agreement incorporates the schedules to it;
10
1.2.12 where any statement is qualified by the expression "to the
best of the knowledge information and belief of the
Warrantors" or "so far as the Warrantors are aware" or any
similar expression (each a "knowledge qualifier"), each
Warrantor shall be deemed to have knowledge of anything of
which the other Warrantors have actual knowledge including the
actual knowledge any of them may have having made reasonable
enquiry of each of Xxxx Xxxxxxxx, Xxxxxxx Xxxxxxxxx and Xxxxx
Inch and Xxxx Xxxxxx and, in relation to the warranties set
out in paragraphs 6.5 to 6.9 (inclusive) and paragraphs 20.1
to 20.3 (inclusive) of schedule 3, Xxxx Xxxxxxx and Xxxx Xxxx.
For the purposes of this agreement it is agreed that the
Warrantors will satisfy their obligations to make reasonable
enquiry if they meet with each of the persons named above in
the presence of the Vendors' Solicitors, review with each such
person all of the Warranties (other than Xxxx Xxxxxxx and Xxxx
Xxxx), and ask each such person to confirm that he or she
believes that each such Warranty is true and correct (without
regard to any knowledge qualifier so that such persons are not
questioned about what they believe the Warrantors know) and,
if he or she cannot do so, to disclose any inaccuracies or
omissions that would have to be corrected in order for him or
her to provide such confirmation;
1.2.13 the "agreed form" in relation to any document means the form
agreed between the parties to this agreement and, for the
purposes of identification only, initialled by or on behalf of
the parties.
2. SALE AND PURCHASE OF SHARES
2.1 Each of the Vendors shall sell or procure the sale of the
number of Shares set opposite his name in column (2) of
schedule 1 and the Purchaser shall purchase the Shares with
full title guarantee and free from all Encumbrances and
together with all rights of any nature which are now or which
may at any time become attached to them or accrue in respect
of them including all dividends and distributions declared
paid or made in respect of them on or after the date of this
agreement.
2.2 Each of the Vendors hereby waives any right of pre-emption or
other restriction on transfer in respect of the Shares and the
Option Shares or any of them conferred on him under the
articles of association of the Company or otherwise.
11
3. CONSIDERATION
3.1 The Consideration payable by the Purchaser to the Vendors for
the purchase of the Shares shall be thirty three million one
hundred and eleven thousand and fifty five pounds
((pound)33,111,055) subject to the following adjustments:
3.1.1 there shall be added an amount, if any, by which the
Net Asset Value is greater than(pound)12,332,544; and
3.1.2 there shall be deducted an amount, if any, by which
the Net Asset Value is less than(pound)12,332,544.
3.2 At Completion, the Purchaser shall:
3.2.1 pay twenty six million eight hundred and sixty one
thousand and fifty five pounds ((pound)26,861,055)in
cash on account of the Consideration which shall be
apportioned between the Vendors as set out in column
3 of schedule 1; and
3.2.2 allot to the Warrantors the number of Loan Notes set
opposite their respective names in column 4 of
schedule 1.
3.3 Within five Business Days starting on the day after agreement,
deemed agreement or determination of the Completion Accounts
in accordance with schedule 7:
3.3.1 if the Consideration payable under clause 3.1 exceeds
the aggregate amount paid under clause 3.2, the
Purchaser and the Warrantors shall instruct their
respective solicitors to pay an amount of
(pound)500,000 from the Escrow Account to the
Warrantors and the Purchaser shall pay to the
Warrantors the amount of the excess, both such sums
being apportioned between the Warrantors in the
proportions set out in column 5 of schedule 1; or
3.3.2 if the aggregate amount paid under clause 3.2 exceeds
the Consideration payable under clause 3.1 and the
amount of that excess is equal to or less than
(pound)500,000 the Purchaser and the Warrantors shall
instruct their respective Solicitors to pay (a) the
amount of the excess from the Escrow Account to the
Purchaser and (b) the difference between the amount
of the excess and (pound)500,000 from the Escrow
Account to the Warrantors in the proportions set out
in column 5 of schedule 1;
12
3.3.3 if the aggregate amount paid under clause 3.2 exceeds
the Consideration payable under clause 3.1 and the
amount of that excess exceeds(pound)500,000 the
Purchaser and the Warrantors shall instruct their
respective Solicitors to pay an amount
of(pound)500,000 from the Escrow Account to the
Purchaser and the Warrantors shall repay to the
Purchaser at the same time the amount by which such
excess exceeds (pound)500,000, such liability to
repay being apportioned between the Warrantors in the
proportions set out in column 5 of schedule 1. If the
Warrantors fail to make a repayment to the Purchaser
under this clause 3.3.3 within five Business Days
after the repayment is due, the Purchaser may
(without prejudice to its other rights) at any time
pending such repayment require the amount (including
all interest due under clause 3.4 to the date of
repayment) to be paid from the Escrow Amount, in
which case:
(a) the Purchaser and the Warrantors shall
instruct their respective solicitors to make
the payment to the Purchaser; and
(b) the Warrantors shall be required to pay into
the Escrow Account the amount paid out of it
under this clause plus an amount equal to
interest on it at the rate of 5 per cent per
annum over the base rate of Barclays Bank
PLC (whether before or after judgment).
Interest shall be paid from the date
repayment should have been made by the
Warrantors to the Purchaser pursuant to this
clause 3.3 to the date of payment into the
Escrow Account and accrues and is payable
from day to day.
3.4 In any circumstance not covered by clause 3.3.3(b), if a party
fails to pay any sum due by it under clause 3.3 of this
agreement on the due date for payment in accordance with the
provisions of this agreement, the party shall pay interest on
the amount payable from the due date until the date on which
the party's obligation to pay the sum is discharged at the
rate of 5 per cent per annum over the base rate of Barclays
Bank PLC (whether before or after judgment). Interest accrues
and is payable from day to day.
3.5 A payment to be made under this clause 3 shall be made by
telegraphic transfer to an account notified by the party due
to receive the payment to the other party not later than two
Business Days before the date of the payment or if no such
notification is
13
made by cheque, provided that all amounts payable to the
Warrantors shall be paid to the Vendors' solicitors by
telegraphic transfer whose receipt shall be sufficient
discharge for such sum and the Purchaser shall not be required
to see the application thereof.
3.6 The parties shall comply with the provision of schedule 7 with
respect to the matters contained in that schedule.
3.7 In the event that any part of the consideration in the sum
of(pound)96,675 due to the Company after the date of this
agreement, pursuant to the terms of the WRES Agreement, is not
received by the Company in accordance with the terms of the
WRES Agreement, the Warrantors hereby agree to pay to the
Purchaser, within 5 Business Days of receipt of notice by the
Warrantors that a relevant sum has not been paid, an amount
equal to such sum which has not so been paid. The Purchaser
shall, if requested in writing by the Warrantors, at the cost
of the Warrantors, assign all and any assignable rights which
the Company has in respect of any such unpaid sums to the
Warrantors provided that prior to such assignment, the
Purchaser and/or the Company is indemnified to their
reasonable satisfaction against any costs, liabilities,
charges and expenses which it may incur which result directly
from such assignment. In the event any monies are received by
the Company pursuant to the terms of the WRES Agreement in
respect of which the Warrantors have made a payment to the
Company pursuant to this clause 3.7 then the Purchaser shall
forthwith pay an amount equal to the sum received by the
Company to the Warrantors. If any party fails to pay any sum
due by it under this clause 3.7 on the due date for payment,
the party shall pay interest on the amount payable from the
due date until the date on which the party's obligation to pay
the sum is discharged at the rate of 5 per cent per annum over
the base rate of Barclays Bank PLC (whether before or after
judgement). Interest accrues and is payable from day to day.
4. COMPLETION
4.1 Completion shall take place at the offices of the Vendors'
Solicitors on the Completion Date when each of the parties
shall comply with the provisions of schedule 5.
4.2 The Purchaser shall not be obliged to complete the purchase of
the Shares under this agreement unless the Vendors comply
fully with their obligations under schedule 5 and unless the
purchase of all the Shares and Option Shares is completed but
the
14
Purchaser may nevertheless elect to complete the purchase of
some of the Shares and/or Option Shares without prejudice to
its rights against the defaulting Vendors.
5. ESCROW ACCOUNT AND CLAIMS AGAINST THE WARRANTORS
5.1 The Purchaser shall procure that at Completion(pound)1,500,000
((pound)1,000,000 in respect of claims under the Warranties
and Tax Covenant and(pound)500,000 in respect of settlement of
the Net Asset Value) of the Consideration shall be paid into
the Escrow Account to be dealt with pursuant to the terms of
clause 3 and this clause 5. The provisions of clause 3 shall
apply in relation to the payment of monies out of the Escrow
Account in relation to the adjustment of the Consideration
dependent on the Net Asset Value. The remaining provisions of
this clause 5 and clause 8 (in respect of set off against the
Loan Notes) shall apply in relation to the payment of monies
out of the Escrow Account in relation to any Settled or
Unagreed Claims.
5.2 Provided that there are no unsatisfied Settled Claims or
Unagreed Claims on the Repayment Date, the balance (if any) in
the Escrow Account (less if applicable any amount remaining in
the Escrow Account pending Settlement of the Net Asset Value)
shall be paid to the Warrantors.
5.3 The Purchaser and the Warrantors shall procure that there
shall be paid out of the Escrow Account the amount of any
Settled Claim within five Business Days of any claim becoming
a Settled Claim and the amount of such payment shall pro tanto
satisfy the liability concerned.
5.4 If there are any outstanding Unagreed Claims on the Repayment
Date then the aggregate amount of all such claims as estimated
either by Queen's Counsel selected by the Purchaser in its
reasonable discretion and at its cost or by the Purchaser
itself (as the case may be) shall remain in the Escrow Account
until such time as the relevant Unagreed Claims become Settled
Claims and the amount (if any) by which the amount in the
Escrow Account exceeds the estimated amount of the Unagreed
Claims shall be paid to the Warrantors. When the Unagreed
Claims become Settled Claims, the amount of the Settled Claims
shall be paid to the Purchaser and the amount of such payment
shall pro tanto satisfy the liability concerned and the
balance of the amount retained in the Escrow Account in
respect of the relevant claims (if any) shall be paid to the
Warrantors. If the Purchaser does not obtain an opinion of
Queen's Counsel that an outstanding Unagreed Claim is likely
to succeed and Queen's Counsel's best estimate of the claim,
then the Purchaser shall pay interest on the
15
excess (if any) of the amount retained in the Escrow Account
in respect of the Unagreed Claim over the amount of the
Settled Claim when the Unagreed Claim becomes a Settled Claim.
The rate of interest payable on such excess shall be 5 per
cent per annum over the base rate of Barclays Bank PLC and
shall accrue from day to day from the Repayment Date to the
date of payment and be paid within five Business Days after
the Unagreed Claim becomes a Settled Claim. The amount of
interest otherwise payable by the Purchaser shall be reduced
by the interest paid or payable to the Warrantors under clause
5.5 in respect of the excess for the period from the Repayment
Date to the date of the Purchaser's payment of interest on the
excess.
5.5 Any interest earned on the money in the Escrow Account shall
be due and paid to the party entitled to the relevant amount
of principal.
5.6 All amounts payable to the Warrantors from the Escrow Account,
pursuant to clause 3.3, this clause 5 and clause 8 shall be
paid to the Vendors' Solicitors by electronic funds transfer
whose receipt shall be sufficient discharge for such sum and
the Purchaser shall not be concerned to see the application
thereof.
6. WARRANTIES
6.1 As at the date of this agreement, the Warrantors severally
warrant to the Purchaser in the terms set out in schedule 3
and part 2 of schedule 4.
6.2 Each of the Warranties shall be construed as a separate and
independent warranty and (except where this agreement provides
otherwise) shall not be limited or restricted by any other
Warranty.
6.3 The rights and remedies of the Purchaser in respect of any
breach of any of the Warranties shall survive Completion.
6.4 Except in respect of any misrepresentation, inaccuracy or
omission which has been made fraudulently each of the Vendors
waives and may not enforce any right which he may have in
respect of any misrepresentation, inaccuracy or omission in or
from any information or advice supplied or given by the Group
or its officers or employees in enabling the Vendors to enter
this agreement, give the Warranties or to prepare the
Disclosure Letter.
6.5 The Warranties are given subject to matters Disclosed.
16
6.6 The Purchaser acknowledges and represents to the Vendors that
it has not relied on any representations or warranties made by
the Vendors or on their behalf by any person other than those
included in this Agreement or any other agreement entered into
pursuant to or for the purposes of this Agreement.
6.7 The Purchaser's sole remedy in the event of any breach of any
warranty, undertaking or covenant in this agreement or the Tax
Covenant or any other agreement to be entered into pursuant to
or for the purposes of this agreement shall be in damages for
breach of contract and (for the avoidance of doubt) the
Purchaser shall have no right to rescind or terminate this
agreement or any such other agreement after Completion.
6.8 The Purchaser acknowledges and agrees that in entering into
this Agreement, and the documents referred to in it, it does
not rely on, and shall have no remedy in respect of, any
statement, representation, warranty or understanding (whether
negligently or innocently made) of any person (whether party
to this agreement or not) other than as expressly set out in
this agreement as a Warranty. Nothing in this clause shall,
however, operate to limit or exclude any liability for fraud.
6.9 The provisions of schedule 8 shall have effect in respect of
the Vendors' liability under this agreement;
6.10 No representations, Warranties, indemnities or other assurance
or comfort whatsoever are given under this agreement in favour
of the Purchaser in relation to the state and repair of the
incinerators operated by members of the Group and no
representations, Warranties, indemnities or other statements
(whether written or oral) made under or in connection with
this agreement shall be construed so as to relate to such
matters and the Purchaser will be deemed to have relied
exclusively on their own investigations of all such matters
provided that the state and repair of the incinerators may be
used as evidence of breach of the Warranty in paragraph 6.9 of
schedule 3.
6.11 Except as set out in paragraph 20 of schedule 3, no
representations, Warranties indemnities or other assurance or
comfort whatsoever are given under this agreement in favour of
the Purchaser in relation to environmental matters and no
representations, Warranties, indemnities or other statements
(whether written or oral) made under or in connection with
this agreement shall be construed so as to relate to such
matters and the Purchaser will be deemed to have relied
exclusively on their investigations of all such matters.
17
6.12 Except as set out in part 2 of schedule 3, no representations,
Warranties indemnities or other assurance or comfort
whatsoever are given under this agreement in favour of the
Purchaser in relation to the Properties and no
representations, Warranties, indemnities or other statements
(whether written or oral) made under or in connection with
this agreement shall be construed so as to relate to such
matters and save as set out in part 2 of schedule 3 the
Purchaser will be deemed to have relied exclusively on their
investigations of all such matters.
7. WARRANTORS' COVENANTS
7.1 Each of the Warrantors severally undertakes to and covenants
with the Purchaser that (except with the consent in writing of
the Purchaser) he will not at any time after Completion:
7.1.1 use or procure or cause or (so far as he is able)
permit the use of any name or names identical or
similar to or including the words "Xxxxx Xxxx
Environmental" or "Sharpsmart" or any of the names or
names identical or similar to the Subsidiaries or any
colourable imitation thereof in connection with any
activity whatsoever;
7.1.2 (except as required by law) disclose or divulge to
any person (other than to officers or employees of
the Purchaser whose province it is to know the same)
or use (other than for the benefit of the Purchaser)
any Confidential Information which may be within or
have come to his knowledge;
7.1.3 do or say anything which is intended to damage the
goodwill or reputation of the Company or any other
member of the Group or of any business carried on by
any member of the Group.
7.2 Each of the Warrantors severally undertakes to and covenants
with the Purchaser that he will not, unless otherwise agreed
in writing by the Purchaser, for a period of three years after
the date of this agreement, either on his own behalf or
jointly with or as an officer, manager, employee, adviser,
consultant or agent for any other person, directly or
indirectly:
7.2.1 approach, canvass, solicit or otherwise act with a
view to enticing away from or seeking in competition
with any business of the Company or any of the
Subsidiaries the custom of any person who at any time
during the period of
18
12 months preceding the Completion Date or at any
time thereafter prior to his ceasing to be employed
by the Company is or has been a customer of the
Company or any of the Subsidiaries and during such
period he shall not use his knowledge of or influence
over any such customer to or for his own benefit or
the benefit of any other person carrying on business
in competition with the Company or any of the
Subsidiaries or otherwise use his knowledge of or
influence over any such customer to the detriment of
the Company or any of the Subsidiaries;
7.2.2 approach, canvass, solicit, engage or employ or
otherwise endeavour to entice away or aid or assist
any other person or persons in employing or otherwise
retaining the services of any person who at any time
during the period of 12 months preceding the
Completion Date has been an employee (other than in a
junior administrative or secretarial capacity),
officer, manager, consultant, sub-contractor or agent
of the Company or any of the Subsidiaries with a view
to the specific knowledge or skills of such person
being used by or for the benefit of any person
carrying on business in competition with the business
carried on by the Company or any of the Subsidiaries;
7.2.3 be engaged, concerned or interested, whether as an
employee or in any other capacity, in any business
concern within Great Britain which is involved in (i)
the handling, collection, transportation, transfer,
processing, storage, treatment or disposal of
clinical waste or (ii) any other business in which
any Group member was engaged at any time during the
period of 24 months prior to the Completion Date.
7.3 Each of the covenants contained in clauses 7.1 and 7.2 shall
constitute an entirely separate and independent restriction on
each of the Warrantors.
7.4 Nothing in this clause 7 shall prohibit any of the Warrantors
from directly or indirectly holding shares or stock quoted or
dealt in on a recognised investment exchange (as defined in
the FSMA) so long as not more than one per cent per Warrantor
or five per cent on aggregate of the shares or stock of any
class of any one company is so held.
19
7.5 The Warrantors and each of them agree and acknowledge that the
restrictions contained in this clause 7 are fair and
reasonable and necessary to assure to the Purchaser the full
value and benefit of the Shares but, in the event that any
such restriction shall be found to be void or unenforceable
but would be valid and effective if some part or parts thereof
were deleted, such restriction shall apply with such deletion
as may be necessary to make it valid and effective.
7.6 If a breach of this clause 7 occurs, the Warrantors and the
Purchaser agree that damages alone are likely not to be
sufficient compensation and that injunctive relief is
reasonable and is likely to be essential to safeguard the
interests of the Purchaser and of any member of the Group and
that injunctive relief (in addition to any other equitable
remedies) may (subject to the discretion of the courts) be
obtained.
8. SET OFF AGAINST LOAN NOTES
8.1 In the event that there is a Settled Claim which is not
satisfied by a payment out of the Escrow Account pursuant to
clause 5, the Purchaser shall be entitled to set off the
amount of such Settled Claim against the Loan Notes by
cancellation of a relevant amount thereof, in accordance with
the provisions of condition 7.1 of schedule 2 of the Loan
Notes, the amount of such set off being apportioned between
the Warrantors in the proportions set out in column 5 of
schedule 1.
8.2 If there are any outstanding Unagreed Claims on the redemption
date of the Loan Notes, the Purchaser may withhold payment of
a pro rata portion of each Loan Note (determined by reference
to the proportions set out in column 5 of schedule 1) equal in
the aggregate to the aggregate amount of all such outstanding
Unagreed Claims as estimated either by Queen's Counsel
selected by the Purchaser in its reasonable discretion and at
its cost or by the Purchaser itself (as the case may be) if,
and only if, within five Business Days after the redemption
date of the Loan Notes, the Purchaser deposits the entire
amount withheld into the Escrow Account by electronic funds
transfer. The amount deposited shall remain in the Escrow
Account until such time as the relevant Unagreed Claims become
Settled Claims. When the said Unagreed Claims become Settled
Claims, the amount of the Settled Claims shall be paid to the
Purchaser and the amount of such payment shall pro tanto
satisfy the liability concerned and the balance (if any) of
the amount deposited in the Escrow Account in respect of the
relevant claims shall be paid to the Warrantors in the
proportions set out in column 5 of schedule 1. If the
Purchaser does not obtain an opinion of Queen's
20
Counsel that an outstanding Unagreed Claim is likely to
succeed and Queen's Counsel's best estimate of the claim, then
the Purchaser shall pay interest on the excess (if any) of the
amount deposited into the Escrow Account in respect of the
Unagreed Claim over the amount of the Settled Claim when the
Unagreed Claim becomes a Settled Claim. The rate of interest
payable on such excess shall be 5 per cent per annum over the
base rate of Barclays Bank PLC and shall accrue from day to
day from the redemption date of the Loan Notes to the date of
payment and be paid within five Business Days after the
Unagreed Claim becomes a Settled Claim. The amount of interest
otherwise payable by the Purchaser shall be reduced by the
interest paid or payable to the Warrantors under clause 5.5 in
respect of the excess for the period from the redemption date
of the Loan Notes to the date of the Purchaser's payment of
interest on the excess.
9. TAXATION
The provisions of schedule 4 shall apply with respect to the matters
contained or referred to therein.
10. FURTHER ASSURANCE AND ATTORNEY
10.1 On and after Completion, the Vendors shall, at the request of
the Purchaser, do and execute or procure to be done and
executed all such acts, deeds, documents and things as may be
necessary to give effect to this agreement.
10.2 Each of the Vendors hereby irrevocably appoints the Purchaser
as its true and lawful attorney pending the Purchaser's
registration as a member of the Company for a period of three
months after the date of this agreement generally in respect
of the Shares and in particular to attend and vote at general
meetings of the Company and with power on that Vendor's behalf
to execute and deliver all deeds and documents and to do all
acts and things and exercise all rights which the Purchaser
would be entitled to execute, deliver and do and exercise if
the Purchaser was registered as the holder of the Shares with
power to sub-delegate this power.
10.3 Each of the Vendors agrees that, for so long as any Shares
remain registered in his name, he will:
10.3.1 not exercise any of his rights as a member of the
Company or appoint any other person to exercise such
rights;
21
10.3.2 hold on trust for and pay or deliver to the Purchaser
any distributions or notices, documents or other
communications which may be received after the date
of this agreement by that Vendor, in his capacity as
a member of the Company, from the Company or any
third party;
10.3.3 on request by the Vendor, ratify all documents
executed and acts done by the Vendor as his attorney.
11. ANNOUNCEMENTS
No announcement, communication or circular concerning this agreement
shall be made (whether before or after the Completion Date) by or on
behalf of the parties hereto without the prior approval of the other or
others (such approval not to be unreasonably withheld or delayed) save
for such announcements as may be required by law in any jurisdiction or
the US Securities and Exchange Commission.
12. COSTS
Subject to the provisions of paragraph 6 of part 1 of schedule 7, each
of the parties shall bear and pay its own legal, accountancy and other
fees and expenses incurred in and incidental to the preparation and
implementation of this agreement and of all other documents in the
agreed form.
13. SUCCESSORS AND ASSIGNMENT
13.1 This agreement shall be binding on and enure for the benefit
of each party's successors and personal representatives but
shall not be assignable except that:
13.1.1 the Purchaser may assign the whole or any part of the
benefit of this agreement (either entirely or jointly
with itself) to any person providing the Purchaser
with finance for the Consideration or to any member
of the Purchaser's Group; or
13.1.2 the Purchaser (and any assignee of the Purchaser or
of any such assignee) may assign to any person to
whom the Purchaser has sold any Shares or any of the
assets or businesses of any member of the Group the
benefit of the restrictive covenants set out in
clause 7.
22
13.2 Except as otherwise expressly provided, all rights and
benefits under this agreement are personal to the parties and
may not be assigned at law or in equity without the prior
written consent of each other party.
14. ENTIRE AGREEMENT
14.1 This agreement (including the schedules to it) and any
documents in the agreed form and the Disclosure Letter
("ACQUISITION DOCUMENTS") constitute the entire agreement
between the parties with respect to the subject matter of this
agreement.
14.2 Except for any misrepresentation or breach of warranty which
constitutes fraud:
14.2.1 the Acquisition Documents supersede and extinguish
all previous agreements between the parties relating
to the subject matter thereof and any representations
and warranties previously given or made;
14.2.2 each party acknowledges to the other (and shall
execute the Acquisition Documents in reliance on such
acknowledgement) that it has not been induced to
enter into any such documents by nor relied on any
representation or warranty other than the warranties
contained in such documents;
14.2.3 each party hereby irrevocably and unconditionally
waives any right it may have to rescind this
agreement or any other of the Acquisition Documents
for any reason whatsoever or to claim damages for any
mis-representation;
14.2.4 each party hereby irrevocably and unconditionally
waives any right it may have to claim damages by
reason of any warranty not set forth in any such
document.
14.3 Each of the parties acknowledges and agrees for the purposes
of the Misrepresentation Xxx 0000 and the Unfair Xxxxxxxx
Xxxxx Xxx 0000 that the provisions of this clause 14 are
reasonable.
15. VARIATIONS
No variation of this agreement or any of the documents in the agreed
form shall be valid unless it is in writing and signed by or on behalf
of each of the parties to this agreement.
23
16. WAIVER
No waiver by any party to this agreement of any breach or
non-fulfilment by any other party to this agreement of any provisions
of this agreement shall be deemed to be a waiver of any subsequent or
other breach of that or any other provision and no failure to exercise
or delay in exercising any right or remedy under this agreement shall
constitute a waiver thereof. No single or partial exercise of any right
or remedy under this agreement shall preclude or restrict the further
exercise of any such right or remedy.
17. AGREEMENT CONTINUES IN FORCE
This agreement shall remain in full force and effect so far as concerns
any matter remaining to be performed at Completion even though
Completion shall have taken place.
18. SEVERABILITY
The invalidity, illegality or unenforceability of any provisions of
this agreement shall not affect the continuation in force of the
remainder of this agreement.
19. NOTICES
19.1 Any notice to be given pursuant to the terms of this agreement
shall be given in writing to the party due to receive such
notice at its or his address set out in this agreement or such
other address as may have been notified to the other parties
in accordance with this clause 19.
19.2 Notice shall be delivered personally or sent by prepaid
recorded delivery or registered post (first class if wholly
within the UK or otherwise by airmail) or by facsimile
transmission provided that the sender shall have received
printed confirmation of transmission.
19.3 Any notice or other communication delivered or sent shall be
deemed to have been served at the time when it arrives at the
address to which it is delivered or sent except that if that
time is between 5.30 p.m. on a Relevant Day and 9.00 a.m. on
the next Relevant Day it shall be deemed to have been served
at 9.00 a.m. on the second of such Relevant Days. For the
purposes of this clause "Relevant Day" means any day other
than a Saturday, Sunday or a day which is a public holiday at
the postal address of the receiving party.
24
20. COUNTERPARTS
This agreement may be executed in any number of counterparts each of
which when executed by one or more of the parties hereto shall
constitute an original but all of which shall constitute one and the
same instrument.
21. THIRD PARTY RIGHTS
A person who is not party to this agreement shall have no right under
the Contracts (Rights of Third Parties) Xxx 0000 to enforce any term of
this agreement. This clause does not affect any right or remedy of any
person which exists or is available otherwise than pursuant to that
Act.
22. MISCELLANEOUS
22.1 The Purchaser may release or compromise the liability of or
institute proceedings or obtain judgement against a Vendor
under this agreement, or grant to a Vendor time or other
indulgence without affecting the liability of any other Vendor
under this agreement or the Purchaser's rights against any
other party.
22.2 The rights conferred on the Purchaser in this agreement are
cumulative and in addition to all other rights available to
the Purchaser.
23. GOVERNING LAW AND JURISDICTION
23.1 This agreement shall be governed by and construed in
accordance with the laws of England.
23.2 The parties irrevocably agree that the courts of England shall
have exclusive jurisdiction to settle any dispute which may
arise out of or in connection with this agreement and that
accordingly, any suit, action or proceedings (together in this
clause 23 referred to as "PROCEEDINGS") arising out of or in
connection with this agreement shall be brought in such
courts.
IN WITNESS of which the parties or their duly authorised representatives have
executed this agreement as a deed.
25
SCHEDULE 1
DETAILS OF THE VENDORS, THE SHARES AND THE CONSIDERATION
(1) (2) (3) (4) (5)
CASH
(a) (b)
PAYABLE INTO
NO. AND CLASS PAYABLE ON THE ESCROW LOAN
NAME AND ADDRESS OF SHARES COMPLETION ACCOUNT NOTES PROPORTIONS
Xxxxxx Xxxxx Xxxxxx 67,002 A Ordinary (pound)7,630,842 (pound)670,005 (pound)2,791,688 44.667%
Xxxxxx Lodge
0 Xxxxxxxx Xxxx
Xxxxx
Xxxx Xxxxxxxxx
XX0 0XX
Xxxxxx Xxxxx Xxxxxx and 22,332, A Ordinary (pound)3,697,180 (pound)0 (pound)0 0%
Penelope Xxxx Xxxxxxx of
Xxxxxx Lodge, 0 Xxxxxxxx
Xxxx, Xxxxx, Xxxx
Xxxxxxxxx XX0 0XX and
Xxxxxxxxxxx Xxxxxxx
Xxxxx of Xxxxxxxxx Xxxxx,
Xxxxx Xxxxxx, Xxxxx,
Xxxx Xxxxxxxxx XX0
0XX as trustees of The
XX Xxxxxx 2001
Accumulation and
Maintenance Settlement
Xxxxxxxx Xxxxxx Xxxxx 55,333 B Ordinary (pound)7,016,516 (pound)414,998 (pound)1,729,156 27.6665%
00 Xxxxx Xxxxx
Xxxxxxxxx
Xxxxx Xxxxxxxxx
XX0 0XX
Xxxxxxx Xxxx Xxxxxx 55,333 C Ordinary (pound)7,016,516 (pound)414,998 (pound)1,729,156 27.6665%
00 Xxxxxxxxxxx Xxxxxxx
Xxx
Xxxxxxx
Xxxx
XX00 0XX
26
SCHEDULE 2
PART 1
THE COMPANY
1. REGISTERED NUMBER: 4057457
2. DATE OF INCORPORATION: 22/08/2000
3. PLACE OF INCORPORATION: England and Wales
4. REGISTERED OFFICE: Xxxxxxx Xxxxx, 0 Xxxxx Xxxxxx, Xxxxx XX0 0XX
5. PRINCIPAL BUSINESS: 9,000 - Refuse disposal, sanitation etc
6. AUTHORISED SHARE CAPITAL: (pound)222,222
DESCRIPTION: Ordinary shares of(pound)1 divided into the following
classes:
89,334 'A' Ordinary 55,333 'C' Ordinary
55,333 'B' Ordinary 22,222 'D' Ordinary
NUMBER OF SHARES: 222,222
7. ISSUED SHARE CAPITAL: (pound)211,937
DESCRIPTION: 89,334 'A' Ordinary 55,333 'C' Ordinary
55,333 'B' Ordinary 11,937 'D' Ordinary
NUMBER OF SHARES: 211,937
AMOUNT PAID UP: (pound)211,937
8. ISSUED LOAN CAPITAL: Nil
9. DIRECTORS - FULL NAMES AND USUAL RESIDENTIAL ADDRESSES: Xxxxxxx Xxxx Xxxxxxxx Xxxxxx
RESIDENTIAL ADDRESSES: Xxxxxx Xxxxx
Xxxxxxx House Xxxxxxx Xxxxx
0 Xxxxx Xxxxxx 0 Xxxxx Xxxxxx
Xxxxx Xxxxx
XX0 0XX XX0 0XX
27
Xxxxxx Xxxxx Xxxxxxx Xxxx
Xxxxxx Xxxxxxxxx
Xxxxxxx House Xxxxxxx Xxxxx
0 Xxxxx Xxxxxx 0 Xxxxx Xxxxxx
Xxxxx Xxxxx
XX0 0XX XX0 0XX
10. SECRETARY - FULL NAME AND USUAL Xxxxxxx Xxxx Xxxxxxxxx
RESIDENTIAL ADDRESS: Xxxxxxx Xxxxx
0 Xxxxx Xxxxxx
Xxxxx
XX0 0XX
11. ACCOUNTING REFERENCE DATE: 31 March
12. AUDITORS: PFK, Xxxxxxx Xxxxx, 0 Xxxxx Xxxxxx, Xxxxx, XX0 0XX
28
PART 2
THE SUBSIDIARIES
ISSUED
DATE AND AUTHORISED SHARE PERCENTAGE
NAME AND PLACE OF DIRECTORS AND SHARE CAPITAL CAPITAL (POUND) OWNED BY THE
REGISTERED NO. INCORPORATION SECRETARY (POUND)AND NO.) AND NO.) COMPANY
XXXXX XXXX 2 October Xxxxxxx Xxxx (pound)78,110,000 1,000 100%
ENVIRONMENTAL 0000 Xxxxxx consisting of ordinary subsidiary of
OPERATIONS 77,110,000 Xxxxx Xxxx
LIMITED England and Xxxxxx Xxxxx ordinary shares Environmental
2428371 Wales Xxxxxx of(pound)1 each and Limited
Xxxxxxxx 1,000,000 (Company
Xxxxxx Xxxxx deferred shares No. 4057547)
of(pound)1 each
Xxxxxxx Xxxx
Xxxxxxxxx
(Director and
Secretary)
CLINICAL WASTE 11 May 1988 Xxxxxxx Xxxx (pound)4 consisting of (pound)4 100%
LIMITED Xxxxxx 40 ordinary consisting subsidiary of
2256045 England and shares of(pound)0.10 of 00 Xxxxx Xxxx
Xxxxx Xxxxxx Xxxxx each ordinary Environmental
Xxxxxx shares of Operations
(pound)0.10 each Ltd
(Company No
Xxxxxxxx 2428371)
Xxxxxx Xxxxx
Xxxxxxx Xxxx
Xxxxxxxxx
(Secretary)
DYVELL 15 August Xxxxxxx Xxxx (pound)28,012 (pound)14,628 100%
(HOLDINGS) 0000 Xxxxxx consisting of consisting subsidiary of
LIMITED 28,012 ordinary of 14,628 Xxxxx Xxxx
2531375 England and Xxxxxx Xxxxx shares of(pound)1 ordinary Environmental
Wales Xxxxxx each shares of(pound)1 Operations
each Limited
Xxxxxxxx (Company No
Xxxxxx Xxxxx 2428371)
Xxxxxxx Xxxx
Xxxxxxxxx
(Secretary)
DYVELL 30 September Xxxxxxx Xxxx (pound)1,000 (pound)2 100%
INCINERATION 0000 Xxxxxx consisting of consisting subsidiary of
SERVICES 1,000 ordinary of 2 Dyvell
LIMITED England and Xxxxxx Xxxxx shares of(pound)1 ordinary (Holdings)
Wales Xxxxxx shares of(pound)1
29
ISSUED
DATE AND AUTHORISED SHARE PERCENTAGE
NAME AND PLACE OF DIRECTORS AND SHARE CAPITAL CAPITAL (POUND) OWNED BY THE
REGISTERED NO. INCORPORATION SECRETARY (POUND)AND NO.) AND NO.) COMPANY
2858330 Xxxxxxxx each each Ltd
Xxxxxx Xxxxx
Xxxxxxx Xxxx
Xxxxxxxxx
(Secretary)
DYVELL LIMITED 7 June 1991 Xxxxxxx Xxxx (pound)2,000,000 (pound)1,100,000 100%
2618679 Xxxxxx consisting of consisting subsidiary of
England and 2,000,000 of Dyvell
Wales Xxxxxx Xxxxx ordinary shares 1,100,000 (Holdings)
Xxxxxx of(pound)1 each ordinary Ltd
shares of(pound)1
Xxxxxxxx each
Xxxxxx Xxxxx
Xxxxxxx Xxxx
Xxxxxxxxx
(Secretary)
DYVELL WASTE 25 August Xxxxxxx Xxxx (pound)1,000 (pound)2 100%
CARE LIMITED 0000 Xxxxxx consisting of consisting subsidiary of
2847513 1,000 ordinary of 2 Dyvell
England and Xxxxxx Xxxxx shares of(pound)1 ordinary (Holdings)
Wales Xxxxxx each shares of(pound)1 Ltd
each
Xxxxxxxx
Xxxxxx Xxxxx
Xxxxxxx Xxxx
Xxxxxxxxx
(Secretary)
30
SCHEDULE 3
THE WARRANTIES
PART 1
GENERAL
1. CAPACITY AND OWNERSHIP OF SHARES
1.1 Each Vendor has full power and authority and has taken all
action necessary to execute and deliver and to exercise his
rights and perform his obligations under this agreement and
each of the documents in the agreed form to be executed on or
before Completion which constitute valid and binding
obligations on each Vendor in accordance with their terms.
1.2 The execution and delivery of, and the performance by each
Vendor of his obligations under each of the documents
mentioned in paragraph 1.1 above does not require the consent
of a third party and will not result in a breach of or entitle
any third party to terminate or avoid any agreement,
arrangement, order, judgment or decree of any court or any
governmental agency to which he is a party or by which it or
its assets is bound or from which he benefits.
1.3 The Shares constitute the whole of the allotted and issued
share capital of the Company and have been properly allotted
and issued.
1.4 The details of the share capital of each member of the Group
set out in Schedule 2 are correct. The Company or a Subsidiary
is the sole legal and beneficial owner of all the issued
shares in each Subsidiary.
1.5 No person has any present, future or contingent right to call
for the allotment, conversion or transfer of or to be entered
into the register of members as the holder of any share or
loan capital of any member of the Group and there is no
Encumbrance on, over or affecting the Shares or any of them or
the shares in the Subsidiaries or any unissued shares in the
capital of the Company and there is no agreement or commitment
to give or create any Encumbrance or negotiations which may
lead to such an agreement or commitment and no claim has been
made by any person to be entitled to an Encumbrance in
relation thereto.
31
1.6 Each Vendor is the sole legal and beneficial owner of the
number of Shares set out against his name in Schedule 1.
1.7 Each Vendor is entitled to sell and transfer the full legal
and beneficial ownership in his Shares to the Purchaser and
such sale will not result in any breach of or default under
any agreement or other obligation binding upon the Vendors or
any of them or any of their respective property.
1.8 Other than this agreement, there is no agreement, arrangement
or obligation requiring the creation, allotment, issue,
transfer, redemption or repayment of, or the grant to any
person of the right (whether conditional or not) to require
the allotment, issue, transfer, redemption or repayment of,
any shares in the capital of the Company or any Subsidiary
(including, without limitation, an option or right of
pre-emption or conversion).
1.9 There is no litigation, arbitration, prosecution,
administrative or other legal proceedings or dispute in
existence or threatened against any of the Vendors in respect
of the Shares or the shares in the Subsidiaries or the
Vendors' entitlement to dispose of the Shares or the shares in
the Subsidiaries and there are no facts known to the
Warrantors or any of them which might give rise to any such
proceedings or any such dispute.
1.10 None of the Shares have been the subject of a transaction at
an undervalue within the meaning of part IX or part VI of the
Insolvency Xxx 0000.
1.11 The Company has not received any notice or any application or
notice of any intended application under the provisions of the
Companies Acts for the rectification of the register of
members of the Company.
1.12 The Company has not exercised nor purported to exercise or
claim any lien over the Shares and no call on the Shares is
outstanding and all the Shares are fully paid up.
1.13 The Company has not at any time given any financial assistance
in connection with the purchase of shares as would fall within
the provisions of sections 151 to 157 of the 1985 Act.
32
2. ACCOUNTS
2.1 The Accounts and the audited financial statements of each
member of the Group have been prepared in accordance with the
requirements of the relevant statutes and on a basis
consistent with that adopted in the preparation of the audited
accounts of each member of the Group for each of the last two
preceding financial years and in accordance with all financial
reporting standards, statements of standard accounting
practice and generally accepted accounting principles and
practices in the United Kingdom and give a true and fair view
of the assets and liabilities and state of affairs of each
member of the Group as at the Accounts Date and its profits
and losses for the relevant period ended on the Accounts Date.
2.2 So far as the Warrantors are aware the Accounts make provision
for, reserve for or disclose, as appropriate, all known
liabilities, whether actual or contingent, whether or not
disputed, and all known capital commitments, whether actual or
contingent, and all bad or doubtful debts of each member of
the Group as at the Accounts Date.
2.3 In the Accounts the stock in trade and work in progress of
each member of the Group have been treated in accordance with
SSAP 9 and no change has been made in basis of valuation of
stock and work in progress since 21 December 2000.
2.4 The name and address of the auditors of each member of the
Group is set out in the Disclosure Letter.
2.5 The Management Accounts have been prepared with due care and
attention and on a basis consistent with the management
accounts of the Company for the financial year ended on the
Accounts Date and, taking into account that they were prepared
for management purposes only and not to an audit standard, and
thus, among other things, do not reflect normal year-end
adjustments or include footnote disclosures of a type normally
included in audited accounts prepared in accordance with
generally accepted accounting principles and practices in the
United Kingdom, (i) the Management Accounts do not materially
overstate the assets and profits of the Company and do not
materially understate its liabilities or losses and (ii) so
far as the Warrantors are aware, the Management Accounts (Full
Year) (a) give a reasonably accurate view of the assets and
liabilities of each member of the Group as at 31 March 2004
and its profits and losses for the 12 month period ended on 31
March 2004 and (b) make provision for, reserve for or
disclose, as appropriate, all actual liabilities as at the
Accounts Date known to the Warrantors.
33
2.6 No member of the Group has its records, systems, controls,
data or information, recorded, stored, maintained, operated or
otherwise wholly or partly dependent on or held by any means
(including any electronic, mechanical or photographic process
whether computerised or not) which (including all means of
access) are not under the exclusive ownership and direct
control of that member of the Group.
2.7 Save as set out in the notes to the Accounts and in the
Previous Accounts such accounts have not been affected by
transactions undertaken by any Group member otherwise than in
the ordinary course of its business.
3. BANK ACCOUNTS AND INDEBTEDNESS
3.1 In respect of each member of the Group
3.1.1 a statement of all its bank, building society,
investment and deposit accounts and of the credit or
debit balances on them at the Business Day before the
date of this agreement is attached to the Disclosure
Letter;
3.1.2 since such statements there have been no payments out
of any such accounts;
3.1.3 the total value of the unpresented cheques drawn by
it does not exceed(pound)59,456;
3.1.4 it has not incurred any borrowings which it has not
repaid or satisfied;
3.1.5 the amount borrowed by it does not exceed any
limitation on its borrowing contained in its articles
of association or in any debenture or other deed or
document binding on it;
3.1.6 it has not received demand for repayment of any
borrowing or indebtedness in the nature of borrowing
which is repayable on demand, and there has not
occurred any event which would entitle (or which with
the giving of notice and/or the lapse of time and/or
a relevant determination would entitle) any person to
require early repayment of any borrowing or
indebtedness in the nature of borrowing;
3.1.7 it has no bank overdraft facilities, loan facilities,
credit facilities, acceptance credits or other
financial facilities outstanding or available to it;
34
3.1.8 it has not entered into nor is it negotiating to
enter into any debt factoring, discounting or
inventory finance arrangement;
3.1.9 it has not or engaged in any off balance sheet
financing or any financing of a type which would not
require to be shown or reflected in the Accounts, had
such arrangement or financing been entered into on or
before the Accounts Date; and
3.1.10 it has not entered into nor is it negotiating to
enter into any currency and/or interest rate swap
agreement, asset swap, future rate or forward rate
agreement, interest cap, collar and/or floor
agreement or other currency exchange or interest rate
protection transaction or combination of them or any
option or any similar arrangement.
3.2 All Encumbrances created by or in favour of any member of the
Group which are required to be registered in accordance with
the provisions of the Companies Act or in any other relevant
jurisdiction have been so registered and comply with all
necessary formalities as to registration or otherwise in that
jurisdiction; and the registered particulars of Encumbrances
created by or in favour of any member of the Group are
complete and accurate.
3.3 No member of the Group is owed any sums other than debts
incurred in the ordinary course of trading.
3.4 No event has occurred causing, or which on intervention or
notice by any third party may cause, any floating charge
created by any member of the Group to crystallise or any
charge created by it to become enforceable, nor has any
crystallisation occurred or is any such enforcement in
process.
3.5 So far as the Warrantors are aware no member of the Group has
been a third party to any transaction with any third party
which, in the event of such third party going into liquidation
or an administration order or a bankruptcy order being made in
relation to it or to him, would constitute a transaction at an
undervalue, a preference, an invalid floating charge or an
extortionate credit transaction or part of a general
assignment of debts, under sections 238 to 245 and sections
339 to 344 of the Insolvency Xxx 0000.
3.6 No person who is or has to any time within the last three
years been a Director or officer of any member of the Group
has at any material time been subject to any
35
disqualification order under the Companies Act or under any
other legislation relating to the disqualification of
directors and officers, or was the subject of any
investigation or proceedings capable of leading to a
disqualification order being made.
3.7 No member of the Group has applied for or received any
investment grant, building xxxxx, xxxxx under the Local
Employment Acts 1970 or 1972 or under any Industry Act or any
other governmental grant or allowance or loan subsidy or
financial assistance.
3.8 No circumstances have arisen or could arise as a consequence
of events occurring on or before the date of this agreement
(including the execution or completion of this agreement) as a
result of which:
3.8.1 any grant, subsidy, allowance or assistance received
by any member of the Group Company is liable to be
repaid;
3.8.2 any grant, allowance subsidy or assistance for which
any member of the Group Company has made application
will not be paid or will be reduced.
4. POSITION SINCE ACCOUNTS DATE
Since the Accounts Date:
4.1 the business of the Group has been carried on in the ordinary
and usual course and so as to maintain the same as a going
concern;
4.2 save for the disposal of the Company's interest in WRE
Services Limited (details of which are disclosed in the
Disclosure Letter) no member of the Group has acquired or
disposed of or agreed to acquire or dispose of any business or
any material asset or assumed or acquired any material
liability (including a contingent liability) otherwise than in
the ordinary course of business;
4.3 neither the turnover nor the expenses (direct and indirect)
nor the trading position nor the margin of profitability of
the Group shows any material deterioration by comparison with
the turnover, expenses, trading position and margin of
profitability of the Group for the corresponding period in its
last completed accounting reference period;
36
4.4 there has not been any material change in the assets or
liabilities (including contingent liabilities) of the Group as
shown in the Accounts except for changes arising from routine
payments and from routine supplies of goods or of services in
the normal course of trading;
4.5 there has not been any capitalisation of reserves of the Group
and the Group has not issued or agreed to issue any share or
loan capital other than that issued at the Accounts Date and
has not granted or agreed to grant any option in respect of
any share or loan capital and the Group has not repaid any
loan capital in whole or in part nor has it, by reason of any
default by it in its obligations, become bound or liable to be
called upon to repay prematurely any loan capital or borrowed
monies;
4.6 there has been no resolution of or agreement by the members of
the Group or any class thereof (except as provided in this
agreement or with the prior written consent of the Purchaser)
and in particular there has been no capital reorganisation or
other change in the capital structure of the Group;
4.7 no member of the Group has changed its accounting reference
period;
4.8 no dividend or other distribution (within the meaning of that
expression as contained in section 209 or 210 or 418 of the
Income and Corporation Taxes Act 1988) has been declared, paid
or made by any member of the Group.
5. BUSINESS NAME
Neither the Company nor any Subsidiary uses any name for any purpose
other than its full corporate name.
6. ASSETS
6.1 All the property and assets which are described in the
Accounts, the Management Accounts and/or in the books of
account or records of the Group as being owned by the Group
are:
6.1.1 legally and beneficially owned by a member of the
Group;
6.1.2 in the possession or under the control of the
Company;
37
6.1.3 free from all Encumbrances and there is not any
agreement or commitment to give or create, and no
claim has been made by any person entitled to any
Encumbrance.
6.2 Details of all assets used by the Group which are the subject
of any assignment, royalty, overriding royalty, factoring
arrangement, leasing, retention or hiring agreement, hire
purchase agreement for payment on deferred terms or any
similar agreement or arrangement in respect of which annual
payments exceed (pound)5,000 are set out in the Disclosure
Letter.
6.3 The plant registers of the Group are attached to the
Disclosure Letter and comprise a materially complete and
accurate record of all the plant, fixed assets including
machinery, equipment and Vehicles owned by the Group and
necessary for the continuation of the business of the Group in
the ordinary course of business.
6.4 No member of the Group has assets outside the United Kingdom
nor does it have a branch agency or place of business or any
permanent establishment (as that expression is defined in the
relevant double taxation relief orders) outside the United
Kingdom.
6.5 In the reasonable opinion of the Warrantors (having regard to
their previous experience of such matters) the sums expended
since 21 December 2000 and the maintenance works undertaken in
respect of fixed plant and machinery have been sufficient to
ensure that the plant and machinery is capable of continuing
to perform to the standards to which it has performed in the
12 months prior to the Completion Date, as measured by plant
availability and utilisation and compliance with applicable
Permits and health and safety requirements as adduced by any
relevant evidence which may be required to prove the same.
6.6 Details of all capital expenditure which any member of the
Group has contractually committed to incur which:
6.6.1 relate to the repair or replacement of plant and
machinery; and
6.6.2 is in excess of(pound)20,000 per item of plant and
machinery
are disclosed in the Disclosure Letter.
38
6.7 Each of the Vehicle Leases to which any member of the Group is
a party contains obligations on the lessor to fully maintain
the relevant Vehicle.
6.8 No member of the Group owns any Vehicles. A list of all
Vehicle Leases to which any member of the Group is a party,
identifying each Vehicle leased by make, year, model, vehicle
registration number and location and the lessor, lessee, term
of lease and fee payable, is set out in the Disclosure Letter.
6.9 The Warrantors are not actually aware of any capital
expenditure which any member of the Group must incur in the 12
month period following Completion which relates to the repair
or replacement of fixed plant and machinery which is not
currently contractually committed to and which would be in
excess of (pound)75,000 per item of fixed plant and machinery.
7. DEBTS
No member of the Group is owed any sums other than trade debts incurred
in the ordinary course of business.
8. INSURANCE
8.1 Details of all insurance policies effected by the Group
(including a summary of claims and loss experience over the
three years to the date of this agreement) have been disclosed
to the Purchaser and all such insurance policies are currently
in full force and effect.
8.2 Since 21 December 2000 the Group has not done or omitted to do
or suffered anything to be done or not to be done which has or
might render any policies of insurance taken out by it in
relation to any of the Company's assets void or voidable and
there are no claims outstanding under any of such policies of
insurance.
8.3 The Group and its assets are and have since 21 December 2000
at all times been adequately insured against accident, third
party and other risks normally or presently insured against by
persons carrying on similar businesses to the business of the
Company. All premiums due in respect of the insurance policies
Disclosed have been paid and the next renewal date for each is
a date at least 30 days after Completion.
39
8.4 All illnesses, accidents and injuries of which the Warrantors
are aware which have been suffered by any employee, xxxxxxx or
any other third party and for which any member of the Group
may be liable are fully covered by insurance.
9. RECORDS
All the accounts, books, registers, ledgers and financial and other
material records of any member of the Group (including all invoices and
other records required for VAT purposes) are reasonably up to date and
in its possession or under its control; there are no material
inaccuracies or discrepancies contained or reflected therein.
10. CONFIDENTIAL INFORMATION
10.1 The Company does not use any processes and is not engaged in
any activities which involve the misuse or alleged misuse of
any confidential information belonging to any third party.
10.2 The Warrantors are not aware of any actual or alleged misuse
by any person of any of its Confidential Information.
10.3 The Group has not disclosed to any person any of its
Confidential Information except where such disclosure was
properly made in the normal course of the Group's business and
was made subject to an agreement under which the recipient is
obliged to maintain the confidentiality of such Confidential
Information and is restrained from further disclosing or using
it other than for the purposes for which it was disclosed by
the Group.
10.4 Confidential Information used by the Group is kept strictly
confidential and the Group operates and fully complies with
procedures which maintain such confidentiality, which
confidentiality has not been breached.
11. INTELLECTUAL PROPERTY
11.1 The Group is the sole unencumbered legal and beneficial owner
and, where registered, the sole registered proprietor of all
the Business Intellectual Property.
11.2 The Business Intellectual Property comprises all Intellectual
Property which the Purchaser will require in order to carry on
the business of the Group as it has been carried on during the
12 months prior to the Completion Date.
40
11.3 The material particulars as to ownership and registration (and
applications therefor) of registrable Business Intellectual
Property, including priority and renewal dates where
applicable, are set out in the Disclosure Letter and such
details are accurate.
11.4 Each and every part of the Business Intellectual Property is
valid, subsisting and enforceable and nothing has been done,
omitted to be done or permitted by any Group member or its
employees or agents whereby any of it has ceased or might
cease to be valid, subsisting and enforceable.
11.5 None of the Business Intellectual Property is the subject of
any proceedings for opposition, cancellation, revocation or
rectification or claims notified to any Group member in
writing by any person (including, without limitation, from any
employees or former employees of the Group).
11.6 The Group has taken all steps necessary for the maintenance
and full protection of all the Business Intellectual Property
and all rights therein.
11.7 All application and renewal fees and costs and charges
regarding the Business Intellectual Property due on or before
Completion have been duly paid in full.
11.8 No member of the Group has granted or entered into, or is
obliged to grant or enter into, any agreement, arrangement or
understanding (whether legally enforceable or not) for the
licensing to third parties or otherwise permitting or
authorising the use or exploitation of the Business
Intellectual Property by third parties or which prevent,
restrict or otherwise inhibit the Group's freedom to use and
fully exploit the Business Intellectual Property (whether now
or in the future).
11.9 None of the Business Intellectual Property is currently being
infringed (or would be infringed if valid) or has been so
infringed since 21 December 2000 and so far as the Warrantors
are aware no third party has threatened any such infringement
and so far as the Warrantors are aware none of the Business
Intellectual Property is the subject of any claim for
ownership or compensation by any third party or any criminal
investigation or prosecution in relation thereto.
11.10 The carrying on of the Group's business as presently
constituted does not require, and has not at any time
required, any licences or consents from or the making of
royalty or similar payments to any third party in respect of
Intellectual Property and no Group member is engaged or has
not in the three years immediately prior to the date
41
of this agreement been engaged in any activities which, and
none of the Group's activities, processes or products,
infringe any Intellectual Property or other rights belonging
to or vested in any third party. Insofar as any Intellectual
Property used by any member of the Group is not owned by that
or another member of the Group, its use is validly licensed to
the Group member under the agreements listed in the Disclosure
Letter.
11.11 There are no outstanding claims against any member of the
Group for infringement of any Intellectual Property used (or
which has been used) by it and no such claims have been
settled by the giving of any undertakings which remain in
force.
11.12 No member of the Group carries on business or sells any
product or service under any name other than its corporate
name and the trading names, trade marks, current product names
and other trading styles as disclosed to the Purchaser in the
Disclosure Letter.
12. COMPUTER SYSTEMS
12.1 None of the Group's records, systems, controls, data or
information are recorded, stored, maintained, operated or
otherwise wholly or partly dependent upon or held by any means
(including any electronic, mechanical or photographic
processes whether computerised or not) which (including all
means of access thereto and therefrom) are not under the
exclusive ownership and direct control of the Group.
12.2 The Computer Systems have been satisfactorily maintained and
have the benefit of the maintenance agreements specified in
the Disclosure Letter.
12.3 Disaster recovery plans, copies of which are set out in the
Disclosure Letter, are in effect and in the opinion of the
Warrantors are adequate to ensure that the Computer Systems
can be replaced or substituted without material disruption to
the business of the Group.
12.4 In the event that any person providing maintenance or support
services for the Computer Systems ceases or is unable to do
so, the Group has all necessary rights to obtain the source
code and all related technical and other information to
procure the carrying out of such services by the Group's own
employees or by a third party.
12.5 The Group has technically competent and trained employees to
ensure the proper handling operation monitoring and use of the
Computer Systems.
42
12.6 The Group has adequate procedures to ensure internal and
external security of the Computer Systems including procedures
for taking and storing, on-site and off-site, back-up copies
of computer programs and data.
12.7 No Group member is currently materially in breach of the terms
of any warranty (express or implied), licence, systems supply,
data supply, maintenance, service or services agreement with
any of its suppliers or customers in respect of Computer
Systems.
12.8 The Group is registered under the Data Protection Xxx 0000
and, to the extent necessary, has notified the Data Protection
Commissioner under the Data Protection Act 1998 and no
individual has claimed compensation from the Company under the
Data Protection Acts 1984 and 1998.
12.9 The Group has duly complied with and currently complies with
all requirements under the Data Protection Acts 1984 and 1998
including, without limitation:
12.9.1 the data protection principles set out under the Data
Protection Acts 1984 and 1998;
12.9.2 requests from individuals for access to personal data
held by it;
12.9.3 the requirements relating to the registration and/or
notification of processing of personal data;
12.9.4 where necessary, under the Data Protection Acts 1984
and 1998, the consent of the data subjects to the
processing of personal data relating to them has been
obtained.
12.10 The Group has not received a notice from or been subject to
enquiries by the Data Protection Registrar or Commissioner
regarding non-compliance or alleged non-compliance by the
Group with any provision of the Data Protection Acts 1984 and
1998 (including, without limitation, the data protection
principles).
12.11 No individual has alleged that any member of the Group has
failed to comply with the provisions of the Data Protection
Acts 1984 and 1998 or claimed compensation from the Company
under that Act including for unauthorised disclosure of
personal data.
43
12.12 The data utilised by the Group in its business and/or
transferred by the Group to the Group's customers and/or
business partners has been lawfully obtained and the Group is
entitled to use the same, transfer the same and grant such
rights therein as it grants to its customers and/or business
partners in respect of the use of such data.
12.13 No Group member uses any computer software other than software
accurate details of which are summarised in the Disclosure
Letter, and Standard Software.
12.14 Each Group member possesses all necessary licences with
respect to its use of third party software and no licence
terms have been breached by any Group member.
12.15 The rights of the Group members to use the Computer Systems
will not be affected by the execution of this Agreement or the
transaction effected by this Agreement.
12.16 There are no royalties, licence fees or other fees payable in
connection with the use of any part of the Computer Systems
other than as expressly set out in the computer contracts
appended to the Disclosure Letter.
12.17 All Proprietary Software is vested in and is legally and
beneficially owned solely by a Group member. So far as the
Warrantors are aware no third party has asserted or threatened
to assert any ownership rights or other adverse claims with
regard to any Proprietary Software.
13. EMPLOYEES
13.1 None of the officers, employees or consultants (if any) of the
Group have given or received notice terminating his employment
office or engagement or will be entitled to give notice as a
result of the provisions or performance of this agreement.
13.2 There are no outstanding offers of employment or engagement
made to any person with a prospective basic salary of over
(pound)28,000 per annum by any Group member and there is
no-one with a prospective basic salary of over (pound)28,000
per annum who is accepting an offer of employment or
engagement made by any Group member that has not yet taken up
that employment or engagement.
13.3 In respect of each current employee, director or consultant
(if any) of the Group all material particulars including their
full names, job titles, departments, dates of commencement of
employment, ages, notice periods, job location, fees, standard
hours of work, salaries all remuneration, incentives, bonuses,
expenses, profit-sharing
44
arrangements and other payments, share option schemes and
other benefits whatsoever payable are set out in the
Disclosure Letter.
13.4 Particulars of all employees, officers or consultants (if any)
whose employment or consultancy was terminated in the last
twelve months from this agreement, including the reasons for
termination and any payment made in connection with the
termination are set out in the Disclosure Letter.
13.5 The Warrantors are not actually aware (no enquiry having been
made other than of Xxxxx Inch) of any current director,
employee or consultant (if any) who has stated that he will
leave office or employment or engagement otherwise than
through normal retirement within the 12 months following the
date of this agreement. No current director, employee or
consultant is on sick leave which as the date of this
agreement has continued for more than 14 consecutive days, or
in on maternity, paternity, parental or adoption leave or
either has made an application to work flexibly or is so
doing.
13.6 No final written warning (referred to as a suspended dismissal
notice) has been given to or is currently planned to be given
to any current or former employee, officer or consultant (if
any) in the twelve months before the date of this agreement.
13.7 All service and employment agreements and any agreements for
service with any director, employee or consultant (if any) of
any member of the Group in force at the date of this agreement
may be terminated by the Group member giving not more than six
months' notice and without giving rise to the making of a
payment in lieu of notice or a claim for damages or
compensation (other than a statutory redundancy payment or
payment for wrongful dismissal) or which is in suspension or
has been terminated but is capable of being revived or
enforced or in respect of which the Group member has a
continuing obligation.
13.8 In relation to each of the present officers, employees or
consultants (if any) of each member of the Group (and so far
as relevant to each of its former employees) the Group member
has:
13.8.1 complied with all obligations imposed on it by
articles of the Treaty establishing the European
Community, European Commission regulations and
directives and all statutes, regulations and codes of
conduct relevant to
45
the relations between it and its employees, officers
or consultants or it and any recognised trade union
or appropriate representatives;
13.8.2 maintained adequate and suitable records regarding
the service of each of its employees;
13.8.3 complied with all collective agreements and customs
and practices for the time being dealing with such
relations or the conditions of service of its
employees; and
13.8.4 complied with all relevant orders and awards made
under any statute affecting the conditions of service
of its employees.
13.9 No member of the Group has received an application for
recognition or entered into any union membership, security of
employment, redundancy, recognition or other collective
agreement (whether legally binding or not) with a trade union
(whether recognised or unrecognised), association of trade
unions, works councils, staff association or other
organisational or body of employees nor has any Group Company
done any act which might be construed as recognition.
13.10 No member of the Group is involved in, or has been involved in
the last three years in, any industrial or trade dispute or
any dispute regarding a claim of material importance or the
dismissal, suspension, disciplining or varying of the terms
and conditions of employment of any current or former employee
earning a basic salary of more than (pound)28,000 per annum.
13.11 There is no outstanding share scheme, bonus scheme
arrangement, employee trust (or other similar matters) to
which any member of the Group is party for profit sharing or
for payment to any of its current or former officers,
employees or consultants which has not been set out in the
Disclosure Letter.
13.12 There is no agreement or arrangement between any member of the
Group and any of its current employees, officers or
consultants (if any) with respect to his employment, his
ceasing to be employed or his retirement which is not included
in the written terms of his employment or previous employment.
13.13 The Group has complied with all recommendations made by the
Advisory Conciliation and Arbitration Service and with all
awards and declarations made by the Central Arbitration
Committee.
46
13.14 There is no agreement, arrangement, scheme or obligation
(whether legal or moral) for the payment of any pensions,
allowances, lump sums or other like benefits on redundancy on
retirement or on death or during periods of sickness or
disablement for the benefit of any of the current or former
officers employees or consultants of the Group or for the
benefit of dependants of such persons.
13.15 Within the two years preceding the date of this agreement, no
Group member has been a party to a relevant transfer (as
defined in the Transfer of Undertakings (Protection of
Employment) Regulations 1981) nor has any Group member failed
to comply with any duty to inform or consult any appropriate
employee representatives under such regulations.
13.16 Save for salaries which are paid one month in arrears no
amounts due to or in respect of any of the current or former
officers, employees or consultants of the Group (including
PAYE and national insurance and pension contributions) are in
arrears or unpaid.
13.17 No monies or benefits other than in respect of contractual
emoluments are payable to any of the officers or employees or
consultants (if any) of any member of the Group and there is
not at present a claim against any member of the Group arising
out of the employment or termination of employment or
engagement of any employee or former employee or consultant
(if any) or former employee for compensation for loss of
office or employment or engagement otherwise and whether under
the Employment Rights Xxx 0000, Race Relations Xxx 0000, Equal
Pay Xxx 0000, Sex Discrimination Xxx 0000, Sex Discrimination
Xxx 0000, Disability Discrimination Xxx 0000, Working Time
Regulations 1998, National Minimum Wage Xxx 0000 and the
regulations made under such acts or regulations or any other
act or otherwise.
13.18 There are no current loans or quasi loans (as defined in the
Companies Act) nor have any current credit transactions (also
defined) been entered into by any Group member with any of its
directors or employees.
13.19 In the twelve months preceding the date of this agreement no
Group member has given notice of any redundancies to the
Secretary of State or started consultations with any
appropriate representative under the provisions of Part 4 of
the Trade Union and Labour (Consolidation) Xxx 0000 or failed
to comply with any obligations under that statute. Particulars
of any redundancy policies as set out in the Disclosure
Letter.
47
14. EMPLOYEE SHARE INCENTIVES
14.1 The Disclosure Letter contains full details of:
14.1.1 all securities options granted or purported to have
been granted by any member of the Group to an
employee or by any other company to an employee by
reason of his employment with any member of the Group
under any share scheme or other arrangement; and
14.1.2 all shares or other securities acquired by any
employee of any member of the Group by reason of his
employment with any member of the Group.
14.2 Each member of the Group has entered into an arrangement under
SSCBA 1992 Schedule 1 paragraphs 3A or 3B in respect of every
securities option granted by any member of the Group and the
Disclosure Letter gives details of all such arrangements.
14.3 In respect of each acquisition of securities within Chapter 2
of Part 7 Income Tax (Earnings and Pensions) Act ("ITEPA")
2003 (Restricted Securities), an election has been made under
section 431 ITEPA in respect of all securities and there is
disclosed in the Disclosure Letter full details of any
liability to employment income which has arisen or may arise
as a result of that election.
15. CONTRACTS
15.1 There is no Material Customer Contract which, on the execution
of this agreement or on Completion or as a result of the
performance of this agreement, will or may result in any third
party being relieved of any obligation or becoming entitled to
exercise any right (including a right of termination or any
right pre-emption or other option).
15.2 There are no written or oral agreements or arrangements
(excluding Property leases) to which any member of the Group
is a party:
15.2.1 which were entered into otherwise than by way of
bargain at arm's length;
15.2.2 which provides for the sale or purchase, option or
similar agreement, arrangement or obligation
affecting any of the assets of any member of the
Group or by which any member of the Group is bound;
48
15.2.3 under which any member of the Group gives any
guarantee, performance or other bond, indemnity,
letter of comfort or similar commitment (whether or
not legally binding) in relation to, or stands surety
for, the obligations of any third party;
15.2.4 under which any person has (otherwise than in the
ordinary and usual course of trading) incurred any
financial indebtedness or liability (actual or
contingent) to any member of the Group or vice versa
or has given any performance bond or other bond in
relation to any of the obligations of any member of
the Group;
15.2.5 which establishes any agency, distribution, joint
venture, partnership, cooperation agreement or
arrangement, consortium or profit or loss sharing
agreement or arrangement;
15.2.6 which will result in any member of the Group becoming
liable for any finder's fee, brokerage or other
commission in connection with this agreement;
15.2.7 to which any of the following provisions of the
Companies Act apply: section 317 (directors to
disclose interest in contracts), section 320
(substantial property transactions involving
directors, etc) and/or section 330 (general
restriction on loans etc to directors and persons
connected with them);
15.2.8 which, following Completion, would purport to bind
the Purchaser (or require any member of the Group to
procure compliance by the Purchaser); or
15.2.9 which restricts the freedom of any member of the
Group to provide or take goods and services to or
from any person or restricts the geographical area or
scope of business activities of any member of the
Group.
15.3 So far as the Warrantors are aware, no Material Customer
Contract is invalid or ultra xxxxx or was entered into by the
customer in violation of any applicable advertising or other
tendering or procurement rules or requirements.
49
15.4 In relation to the Material Contracts:
15.4.1 no member of the Group is in default of its
obligations pursuant to a Material Contract;
15.4.2 the Warrantors are not aware that any party with whom
any member of the Group has entered into a Material
Contract is in default of its obligations pursuant to
such Material Contract;
15.4.3 no member of the Group has received written
notification of a breach or that its current action,
or failure to act, will with the passage of time or
notice, or both, give rise to a breach by it of its
obligations pursuant to a Material Contract.
15.5 The Warrantors have set out in the Disclosure Letter all bids,
tenders or other negotiations or offers which are capable of
resulting or likely to result in any member of the Group
entering into any Customer Contracts of a kind described in
Warranty 15.2.
15.6 There is annexed to the Disclosure Letter a schedule listing
all Material Contracts (other than Vehicle Leases disclosed
separately pursuant to paragraph 6.8).
15.7 A list of the Material Customer Contracts (by revenues)
identifying each Material Customer Contract by name of
customer, location or locations served, billing address,
contract term, monthly amount, price and service requirements
are set out in the Disclosure Letter together with a list of
all Other Customer Contracts with such information in relation
to such contracts as is readily available to the Warrantors
from the records of the members of the Group.
15.8 No written or, so far as the Warrantors are aware, oral
notification has been received by any member of the Group from
a customer who is a party to a Material Customer Contract
stating that such customer will cease dealing with the Company
as a result of the identity of the proposed purchaser
hereunder.
16. LITIGATION, OFFENCES AND COMPLIANCE WITH STATUTES
16.1 Otherwise than as claimant in the collection of debts arising
in the ordinary course of business (none of which exceed
(pound)5,000), no member of the Group nor any person for whose
acts or defaults a member of the Group may be vicariously
liable is claimant,
50
defendant or otherwise a party to any litigation, arbitration
or administrative proceedings which are in progress against or
concerning any member of the Group or any of its assets; no
member of the Group is being prosecuted for any criminal
offence and no governmental or official investigation or
inquiry concerning the business or officers of any member of
the Group or any of its assets is in progress and so far as
the Warrantors are aware there are no events or other facts or
circumstances which are likely to give rise to any such
proceedings, investigation or inquiry.
16.2 So far as the Warrantors are aware, there are no complaints,
claims, disputes, investigations. disciplinary proceedings,
events or other facts or circumstances which in the reasonable
opinion of the Warrantors are likely to lead to any claim,
action, proceeding, suit, litigation, prosecution,
investigation, enquiry or arbitration involving any member of
the Group.
16.3 There are no unfulfilled or unsatisfied judgments or court
orders outstanding against any member of the Group or which
may affect any of them.
16.4 No distress, distrait, charging order, garnishee order,
execution or other process which a court or a similar body may
use to enforce payment of a debt has been levied or applied
for in respect of any asset of any member of the Group.
16.5 No Group member nor any of its officers, agents or employees
(during the course of their duties in relation to the business
of the Group) has committed or omitted to do any act or thing
the commission or omission of which is or could be in
contravention of any statutory obligation or any other law of
the United Kingdom or any other country giving rise to any
fine, penalty, imprisonment, default proceedings or other
liability in relation to the business or officers of the Group
or any of its assets or any judgment or decision which would
materially affect the financial or trading position of the
Company.
17. RESTRICTIVE AGREEMENTS, COMPETITION, MERGER CONTROL AND REGULATORY
17.1 There are no agreements in force restricting the freedom of
the Company nor any Group member to provide and take goods and
services or to otherwise conduct its trade and business by
such means and from and to such persons as it may from time to
time think fit.
51
17.2 The Company nor any Group member is not nor has it been party
to any agreement, arrangement, concerted practice or course of
conduct, or merger, acquisition or joint venture which
contravenes or contravened, is or was invalidated by, requires
or required notification or registration under, satisfies or
satisfied the criteria for review or investigation under, or
has been the subject of notification or registration under any
competition, anti-restrictive trade practice, anti-trust,
merger control, regulatory, monopoly fair trading or consumer
protection law or similar legislation.
17.3 No Group member or any employee, consultant or director of a
Group member has received any process, notice or communication
(formal or informal) by or on behalf of any authority having
jurisdiction in competition, anti-trust, merger control,
regulatory, monopoly, fair trading, or similar matters (any
such body or person being referred to below as a "COMPETITION
AUTHORITY") in respect of any matter, whether or not the Group
member is or was a party to or is or was involved in such
matter and no Group member or any employee, consultant or
director of a Group member has received any indication (from
whatever source) that any such process, notice or
communication might be issued or that any person might make or
has made a complaint to a Competition Authority against any
Group member or any employee, consultant or director of a
Group member .
17.4 No Group member or any employee, consultant or director of a
Group member has made any complaint or provided any
information or made any application for leniency or for a
no-action letter to any Competition Authority in respect of
any matter, whether or not the Group member is or was a party
to or is or was involved in such matter and no circumstances
exist or have existed which may give rise to the Group member
or any employee or consultant of a Group member making any
such complaint or providing any such information or making any
application for leniency or for a no-action letter.
17.5 No director of a Group member has been or is the subject of a
Competition Disqualification Order within the meaning of
section 204 of the Enterprise Xxx 0000 or has given any
Competition Disqualification Undertaking within the meaning of
section 9B(2) of the Company Directors Disqualification Act
1986 and no such director is or has been the subject of any
investigation, process, notice or communication which may
result in such an Order being made or undertaking being
offered.
52
17.6 No employee, consultant, or director of a Group member is or
at any material time was guilty of an offence under section
188 Enterprise Act 2002 (the "cartel offence") or of any
attempt, conspiracy or incitement to commit the cartel offence
or of aiding, or abetting a person to commit the cartel
offence.
17.7 No employee, consultant or director of a Group member has been
convicted for of a cartel offence within the meaning of
section 188 Enterprise Act 2002 or, has been the subject of
any investigation, process, notice or communication relating
to a cartel offence.
17.8 No Group member is or has been in receipt of any state aid
within the meaning of Article 87 of the EC Treaty or Article
61 of the Agreement on the European Economic Area.
17.9 No notice has been received by the Company from any
governmental authority that the transaction contemplated by
this agreement violates any statute or regulation or that such
transaction requires regulatory consent or authorisation which
consent or authorisation has not been obtained.
18. SUBSIDIARIES
The Company has not since its incorporation had any subsidiary or
subsidiary undertaking apart from the Subsidiaries and has not been the
subsidiary of any other company and the Company is not the legal or
beneficial owner of any shares of any other company other than the
Subsidiaries listed in schedule 2.
19. ADMINISTRATION
19.1 The register of members and statutory books of each member of
the Group contain accurate records of those persons who are
shareholders of each member of the Group and of all other
information they are required to contain under the Companies
Act. Every document required by the Companies Acts to be filed
with the Registrar of Companies has been duly filed and
compliance has been and is being made by the Group with the
Companies Acts.
19.2 The copy of the certificate of incorporation and memorandum
and articles of association (and each certificate of
incorporation on change of name) of each member of the Group
annexed to the Disclosure Letter is accurate and complete in
all respects, includes copies of all resolutions and documents
required to be incorporated
53
therein and fully sets out all rights attaching to each class
of the share capital of each member of the Group and the
register of members and other statutory books of each member
of the Group have been properly kept and contain a true,
accurate and complete record of all the matters which should
be dealt with therein and no notice or allegation that any of
the same is incorrect or should be rectified has been
received.
19.3 Each member of the Group was incorporated in accordance with
its memorandum and articles of association and is validly
existing and is entitled to carry on the business now carried
on by it.
19.4 All legal requirements in connection with the formation of
each member of the Group have been observed.
19.5 All special resolutions passed by each member of the Group
have been disclosed to the Purchaser in writing.
19.6 No member of the Group has at any time carried on any business
other than the business carried on at the date hereof.
19.7 No member of the Group has given any power of attorney or any
other authority (express, implied or ostensible) which is
still outstanding or effective to any person to enter into any
contract or commitment or do anything on its behalf (other
than any authority of directors or employees to enter into
routine trading contracts in the normal course of their
duties).
19.8 As regards the Company or any member of the Group, no order
has been made or petition presented or resolution passed for
its winding-up, no distress, execution or other process has
been levied on any of its assets, it has not suspended payment
and is not insolvent or unable to pay its debts within the
meaning of section 123 of the Insolvency Xxx 0000, no receiver
has been appointed or could be appointed by any person of its
business or assets or undertaking or any part thereof and
there is no unfulfilled or unsatisfied judgment, arbitration
award or court order or arbitration order outstanding against
it.
19.9 In respect of each member of the Group, there are no
restrictions on the exercise of the powers of the Directors or
unusual requirements as to decorum or the manner of holding of
board meetings.
54
19.10 The only Directors of each member of the Group are the persons
whose names are listed in respect of it in Schedule 2 and no
member of the Group has any alternate, de facto or shadow
directors nor any observer or other person entitled or
accustomed to attend at or receive notice of board meetings or
have any say or right to vote at board meetings.
19.11 No share in the capital of any member of the Group has been
issued for a consideration other than cash.
19.12 No share in the capital of any member of the Group has been
issued or transferred except in accordance with its memorandum
and articles of association. No member of the Group has
redeemed or purchased or agreed to redeem or purchase any of
its share capital or pass any resolutions or made any
capitalisation of reserves.
19.13 No Director or secretary of any member of the Group is
interested in the share capital of any member of the Group.
19.14 The Company has no interest in the shares or other securities
of any company which is not a Subsidiary and no interest in
any business other than that of the Company and has not agreed
to acquire any such shares, securities or interests or held
any such shares, securities or interest at any time.
20. PERMITS AND ENVIRONMENTAL MATTERS
20.1 The Disclosure Letter contains a complete and accurate list of
all material Permits held by each member of the Group as of
the date of this agreement (grouping the Permits listed by
Group member). These listed Permits are all the material
Permits that each Group member is required to hold or obtain
in order lawfully to conduct its business as it is currently
conducted and as it has been conducted during the 12 months
prior to Completion. For the avoidance of doubt, a Permit
shall not be considered material if the only penalty for any
one or more failures by any Group member to obtain the Permit
prior to the date of this agreement is a fine or fines not
exceeding(pound)5,000 in the aggregate .
20.2 Except as set out in the Disclosure Letter:
20.2.1 all Permits listed in the Disclosure Letter are valid
and in full force and effect;
55
20.2.2 since 21 December 2000 each member of the Group has
conducted the Group's business in all material
respects in compliance with applicable Permits and is
currently conducting the Group's business in all
material respects in compliance with the applicable
Permits listed in the Disclosure Letter (provided
that any matter covered by the notification procedure
from the Environment Agency shall be disclosed under
paragraph 20.2.3 below);
20.2.3 since 21 December 2000 no Group member has received
any notification from any Relevant Authority
requiring any remedial or corrective action to be
taken in relation to a Permit (whether or not a
material Permit);
20.2.4 no remedial or corrective action that any Relevant
Authority has required any Group member to take since
21 December 2000 in relation to any Permit (whether
or not material) remains outstanding;
20.2.5 so far as the Warrantors are aware, there are no
events or other facts or circumstances which, if they
were known by a Relevant Authority, would be likely,
in the reasonable opinion of the Warrantors, to give
rise to a notification from the Relevant Authority
requiring a Group member to take any remedial or
corrective action in relation to a material Permit.
20.3 Except as set out in the Disclosure Letter:
20.3.1 other than matters disclosed pursuant to warranty
20.2, since 21 December 2000 no Group member has
received any notice or other communication from any
Relevant Authority in respect of the business carried
on by any Group member or in relation to any property
at any time owned, occupied or controlled by any
Group member alleging any breach of or failure to
comply with Environmental Laws;
20.3.2 no notice or other communication (if any) set out in
the Disclosure Letter in respect of paragraph 20.3.1
(i) has resulted in the Relevant Authority issuing an
enforcement notice to or otherwise requiring remedial
or corrective action by a Group member or (ii) in the
reasonable opinion of the Warrantors is likely to
result in the Relevant Authority issuing an
enforcement notice to or otherwise requiring remedial
or corrective action by a Group member.
56
20.3.3 so far as the Warrantors are aware, there are no
events which have occurred since 21 December 2000
which, in the reasonable opinion of the Warrantors,
if they were known by a Relevant Authority and
uncorrected, could give rise to the Relevant
Authority issuing an enforcement notice in relation
to Environmental Laws.
57
PART 2
Property matters
TITLE
1. The Properties comprise all the land and premises owned, occupied or
otherwise used by the Group.
2. Those of the Properties which are occupied or used by the Group in
connection with any business carried on by the Group are so occupied or
used by right of ownership or under lease or licence.
3. The information contained in schedule 6 as to the current use and
tenure of the Properties, the principal terms of the leases or licences
under which the same are occupied or used by the Group and the
principal terms of the tenancies or licences subject to and with the
benefit of which the Properties are held is true and accurate.
4. The relevant Group Company is the legal and beneficial owner of each of
the Properties and the Group has good and marketable title to each of
the Properties and all deeds and documents necessary to prove the title
of the Group to the Properties are in the possession or under the
control of the Group.
5. The Group is in physical possession and actual occupation of the
Properties on an exclusive basis and no right of occupation or
enjoyment has been acquired or is in the course of being acquired by
any third party or has been granted or agreed to be granted to any
third party.
6. So far as the Vendor's are aware the Vendors have Disclosed copies of
all title deeds and documents relating to the Properties all of which
have been properly stamped and, where necessary, duly registered and
the documents of title to be delivered to the Purchaser on Completion
will consist of original documents or properly marked and examined
extracts.
7. In the case of any leases of the Properties which are registerable at
the Land Registry the relevant lease has been registered at the Land
Registry.
8. So far as the Vendor is aware the Properties are not subject to any
restrictive covenants, easements, licences, restriction, overriding
interests, options, charges, rights of pre-emption, rights of first
refusal.
58
STATUTORY OBLIGATIONS
9. For the purposes of this paragraph the "PLANNING ACTS" means:
the Town and Country Planning Xxx 0000
the Planning (Listed Buildings and Conservation Areas) Xxx 0000
the Planning (Hazardous Substances) Xxx 0000
the Planning (Consequences Provisions) Xxx 0000
the Planning and Compensation Xxx 0000
10. Since 21 December 2000 no notice has been received by any member of the
Group stating that it is in breach of any applicable statutory
requirements with respect to the Properties and in particular (but
without limitation) with requirements as to fire precautions and means
of escape in case of fire and with requirements under the Public Health
Acts, the Housing Acts, the Highways Acts, the Offices Shops and
Railway Premises Xxx 0000, the Health and Safety at Work, etc. Xxx
0000, the Factory Acts and the London Building Acts and the Planning
Acts.
11. Planning permission has been obtained, or is deemed to have been
granted, for the purposes of the Planning Acts with respect to all
existing development and use of each part of the Properties, and no
such planning permission has been suspended or called in, and no
application for planning permission is awaiting decision.
12. Since 21 December 2000 building regulation consents have been obtained
with respect to all development, alterations and improvements to the
Properties.
13. Compliance is being and since 21 December 2000 has been made with all
planning permissions, orders and regulations issued under the Planning
Acts and all building regulation consents and bye-laws in force with
respect to the Properties.
14. So far as the Vendors are aware all planning consents and permissions
affecting the Properties have been satisfied or fully observed and
performed up to the date of this agreement.
LEASEHOLD PROPERTIES
15. There are no negotiations or proceedings pending in relation to rent
reviews.
59
16. The Group has paid the rent and materially observed and performed the
covenants on the part of the tenant and the conditions contained in
each of the leases (which expression includes underleases) under which
any of the Properties are held.
17. No notice has been received by the Company stating that it has failed
to observe and perform the covenants on the part of the lessee and the
conditions contained in any leases (which expression includes
underleases) under which any of the Properties are held.
18. The Vendors are not aware of any notice having been served by a
landlord or superior landlord stating that the Company is operating
without the necessary licences, consents and approvals required from
the landlords and any superior landlords under any leases of any of the
Properties have been obtained, and so far as the Vendors are aware no
notice has been received stating that the covenants on the part of the
tenant contained in such licences, consents and approvals have not been
duly performed and observed.
19. There is no outstanding, unobserved or unperformed obligation necessary
to comply with any notice given by or on behalf of the landlord under
any lease of the Properties.
20. Since 21 December 2000 there have been and are no disputes with any
landlord.
21. So far as the Vendors are aware no notice has been served on the
Company the contents of which are likely to lead to a dispute.
TENANCIES
22. The Properties are held subject to and with the benefit of the
tenancies (which expression includes subtenancies) as set out in
schedule 6.
23. No member of the Group is aware of any material or persistent breaches
of covenant by a tenant of any of the Properties including the
covenants to pay rent and no guarantor or surety has been released
expressly or by implication.
24. Save as set out in the Disclosure Letter the Company does not have any
continuing liability in respect of any other property formerly occupied
by the Company either as original contracting party or by virtue of any
direct covenant having been given on a sale or assignment to the
Company or as a guarantor of the obligations of any other person in
relation to such property.
25. The Properties are not subject to any outgoings, other than general
rates, water rates and insurance premiums and, in the case of leasehold
real property, rent and service charges.
60
26. No notice relating to the use and enjoyment of the Properties has been
received or given so far as the Vendors are aware or so far as the
Vendors are aware is likely to be received or given in any
circumstances.
27. All the Properties enjoy access and egress over roads which have been
adopted by the appropriate highway authority and are maintainable at
the public expense. The Properties drain into public sewers and is
served by water, electricity and gas utilities, pipes, sewers, wires,
cables, conduits and other conducting media and connect to the mains
28. No outstanding notices, complaints or requirements have been issued or
made (whether formally or informally) by any competent authority or
undertaking exercising statutory or delegated powers in respect of the
Properties or the user applicable to the Properties.
61
PART 3
PENSIONS
1. Other than the Schemes, there are not any (nor have there ever been
any) schemes, agreements, arrangements, customs or practices for, and
(other than in respect of the Schemes) there are not any liabilities in
respect of, the payment of or contribution towards any Specified
Benefits for the benefit of any Specified Person and/or any Specified
Dependant, and no proposal, promise or assurance to establish, continue
or improve any such scheme, agreement or arrangement has been
communicated to any Specified Person and/or any Specified Dependant.
2. Complete and accurate material details of the Schemes have been
disclosed to the Purchaser including (without limitation):
2.1 For each of the GPP and the Stakeholder Scheme, all
explanatory booklets, announcements and other communications
provided to each Specified Person and/or each Specified
Dependant;
2.2 For the Death in Service Scheme:
2.2.1 the document that established the scheme;
2.2.2 the current rules of the scheme;
2.2.3 any amendments to the current rules of the scheme;
2.2.4 any documents on the participation of companies in
the scheme;
2.2.5 full details of the current trustees of the scheme
and any documents on the change of trustees of the
scheme; and
2.2.6 all explanatory booklets, announcements and other
communications provided to each Specified Person
and/or each Specified Dependant.
3. Complete and accurate details of each Specified Person who is an active
member of any of the Schemes are listed in the Disclosure Letter and no
other Specified Person is a member of any of the Schemes. The details
listed in the Disclosure Letter include full information on the
contributions currently paid by each Group member and by each Specified
Person to any of the Schemes.
4. All contributions due to be paid to each of the Schemes by each Group
member and by each Specified Person, all insurance premiums due to be
paid to each of the Schemes by each Group member, and all fees and
expenses in relation to each of the Schemes due to be paid by
62
each Group member have been paid as they fall due. Full details of any
contributions and/or premiums that will be due within the next month,
and of any fees and expenses in respect of which work has been
undertaken but for which payment is not yet due, are set out in the
Disclosure Letter.
5. The Death in Service Scheme is an exempt approved scheme within the
meaning of section 592 of Taxes Act and has been since its
commencement. There is, as far as the Vendors are aware, no reason why
such approval may be withdrawn.
6. The GPP and the Stakeholder Scheme are each approved for the purposes
of Chapter IV of Part XIV of Taxes Act and have been since their
commencement. There is, as far as the Vendors are aware, no reason why
such approval may be withdrawn.
7. No Specified Person is in contracted out employment as defined in
section 7 of the Xxxxxxx Xxxxxxx Xxx 0000 by reference to any of the
Schemes.
8. There are no actions, proceedings, claims or complaints against any
Group member in relation to any of the Schemes, or, so far as the
Vendors are aware, against any of the Schemes, pending or threatened by
or in respect of any Specified Person or any Specified Dependant
relating to any act, event, omission or other matter arising out of or
in connection with any of the Schemes.
9. With effect from 8 October 2001, each Group member has designated a
registered stakeholder pension scheme in accordance with the
requirements of the Welfare Reform and Pensions Xxx 0000 (and
Regulations made under it) in relation to all of its "relevant
employees" (as defined for the purposes of that Act).
10. Each Specified Person who is entitled to membership of any of the
Schemes (whether under the Scheme's documentation, under any contract
of employment or by reason of any applicable law or implication of law
or otherwise) was informed in writing of such entitlement on or before
the date he was first entitled to join.
11. No Group member has discriminated at any time against any Specified
Person or any Specified Dependant in respect of any of the Schemes
contrary to the Equal Treatment Requirements.
12. There has at all times been in place in respect of the GPP a record of
the direct payment arrangements as required by section 111A of the
Xxxxxxx Xxxxxxx Xxx 0000 and all contributions have been paid in
accordance with such records.
13. All benefits under the Death in Service Scheme are fully insured with
an insurance company that is carrying on ordinary long-term insurance
business in the European Union, and, so far
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as the Vendors are aware, there are no grounds on which such insurer
could avoid liability for full payment of any such benefits.
14. Each Group member has complied with all of its material obligations in
respect of each of the Schemes, and, as far as the Vendors are aware,
each of the Schemes has been operated and administered in accordance
with all applicable laws and regulatory requirements.
15. No Group member is liable to provide or contribute towards Specified
Benefits as a result of the application of the Transfer of Undertakings
(Protection of Employment) Regulations 1981 (SI 1981/1794) to any
transfer to any Group member of an undertaking.
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SCHEDULE 4
TAXATION
PART 1
DEFINITIONS AND INTERPRETATION
1. In this schedule the following words and expressions shall (except
where the context otherwise requires) have the following meanings:
"ACCOUNTS RELIEF" means a Relief which has been treated as an asset in
the Completion Accounts or which was taken into account in computing
(and so reducing) any provision for Taxation which appears in the
Completion Accounts or which has resulted in no provision for Taxation
in the Completion Accounts;
"ACTUAL TAX LIABILITY" means any liability of the Company to make a
payment of or increased payment of Tax;
"CLAIM FOR TAX" means any claim, notice, demand, assessment, letter or
other document issued or any action taken by or on behalf of any person
(including the Company) or Tax Authority whether before or after the
date hereof from which it appears that the Company has or may have a
Tax Liability;
"EFFECTIVE TAX LIABILITY" shall have the meaning given in paragraph 3
of this part 1;
"EVENT" means any act, omission, event or transaction (including the
execution of, and Completion of, this Agreement), action or omission
and includes further (without limitation) the death of any person; a
company becoming, being or ceasing to be a member of a group of
companies (however defined) for the purposes of any Tax and references
to an Event occurring on or before Completion shall be deemed to
include any combination of two or more Events only the first of which
shall have occurred on or before Completion where the Event or Events
occurring after Completion is or are:
(1) the completion of the disposal of any asset which was
contracted to be sold on or before Completion or the
performance of any other act by virtue of an agreement entered
into on or before Completion;
(2) the satisfaction of a condition to which the disposal of any
asset pursuant to a contract entered into on or before
Completion is subject (in which case the disposal shall, for
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the purposes of this Agreement be treated as having been made
before Completion and any Taxation Liability arising from such
disposal shall be treated as having arisen before Completion);
(3) the issue or making of any Tax Claim;
(4) the bringing into the United Kingdom of any document executed
prior to Completion outside the United Kingdom or the
presentation of any document executed prior to Completion for
stamping;
(5) the exercise of any option granted on or before Completion; or
(6) the death of any person.
"GROUP RELIEF" means any of the following:
(1) group relief capable of being surrendered or claimed pursuant
to Chapter IV Part X of the ICTA as amended and supplemented
by the Finance Xxx 0000;
(2) advance corporation tax capable of being surrendered or
claimed pursuant to regulation 15 of the Corporation Tax
(Treatment of Unrelieved Surplus Advance Corporation Tax)
Regulations 1999;
(3) a tax refund capable of being surrendered or claimed under
section 102 of the Finance Xxx 0000;
"POST COMPLETION RELIEF" means a Relief to the extent that it arises by
reference to an Event occurring after Completion;
"PURCHASER'S GROUP" means the Purchaser and any companies within the
same group or association of companies as the Purchaser for the
purposes of the relevant Tax Statute;
"RELIEF" means any loss, relief, allowance, credit deduction, exemption
or set-off against income or profits in calculating profits for the
purposes of any Tax or against or in respect of Tax or any right to
repayment of Tax;
"TAXATION" or "TAX" means any form of taxation, tariff levy, impost,
duty, charge, contribution, deduction or withholding in each case in
the nature of taxation whenever imposed, collected or assessed by, or
payable to, a Tax Authority and any penalty, charge or interest
relating to any of the above or to any reporting or filing obligation
in respect of any of
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the above and any liability to make a payment by way of indemnity,
damages or management charger connected in any way with any taxation
(in all cases, regardless of whether such taxes, penalties, charges or
interest are directly or primarily chargeable against or attributable
to the Company or any other person and regardless of whether the
Company has, or may have, any right of reimbursement against any other
person) but excluding the Uniform Business Rate, Council Tax, water
rates and other local authority rates or charges;
"TAX AUTHORITY" means the Commissioners of Inland Revenue, the
Commissioners of Customs and Excise, or any authority or body, whether
of the United Kingdom or elsewhere and whether national or otherwise
having the power or authority or other function in relation to Tax;
"TAX CLAIM" means a claim under any Tax Warranty or the Tax Covenant;
"TAX LIABILITY" means any Actual Tax Liability, Effective Tax Liability
or other liability of the Company which is relevant for the purposes
this schedule;
"TAX STATUTE" means any primary or secondary statute, instrument,
enactment, order, law, by-law or regulation making any provision for or
in relation to Tax;
"TAXES ACT" means the Income and Corporation Taxes Xxx 0000;
"VAT" means Value Added Tax.
2. In this schedule "COMPANY" shall in addition to the Company include
every Subsidiary to the intent and effect that the provisions of this
schedule shall apply to, and be given in respect of, each Subsidiary as
well as the Company.
3. In this schedule an "EFFECTIVE TAX LIABILITY" shall mean the following:
3.1 the loss in whole or in part of any Accounts Relief;
3.2 the set-off of any Post Completion Relief or any Accounts
Relief against any Tax or against income, profits or gains in
circumstances where, but for such utilisation or set-off, an
Actual Tax Liability would have arisen in respect of which the
Warrantors would have been liable to make a payment to the
Purchaser under this schedule.
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4. The value of an Effective Tax Liability shall be as follows:
4.1 where the Effective Tax Liability involves the
non-availability of any Accounts Relief:
4.1.1 if the Accounts Relief was not or is not a right to
repayment of Tax, the amount of Tax which would have
been saved but for the loss of the Accounts Relief;
or
4.1.2 if the Accounts Relief was or is a right to repayment
of Tax, the amount of the right which is lost;
4.2 where the Effective Tax Liability involves the set-off of a
Post Completion Relief or an Accounts Relief, the value of the
Effective Tax Liability shall be the amount of Tax saved by
such set-off.
5. Any reference to a Tax Liability in respect of income, profits or gains
earned, accrued or received shall include a Tax Liability in respect of
income, profits or gains deemed to have been or treated or regarded as
earned, accrued or received and any reference to Tax Liability on the
happening of any Event shall include Tax Liability where such Event
(for the purposes of Tax) is deemed to have occurred or is treated or
regarded as having occurred.
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PART 2
TAX WARRANTIES
TAX RETURNS AND COMPLIANCE
1. The Company has at all times submitted all information, notices,
accounts, statements, reports, computations and relevant Tax returns to
the relevant Tax Authorities by the requisite dates and are neither the
subject of any dispute nor so far as the Warrantors are aware are
likely to become the subject of any material dispute.
2. The Company has paid or set off with a Relief every Tax Liability which
has fallen due.
3. The Company has properly operated the PAYE and National Insurance
contributions systems and made all deductions, withholdings and
retentions required to be made in respect of any actual or deemed
payment made or benefit provided on or before Completion and has to the
extent required by law accounted for all such deductions, withholdings
and retentions.
4. The Company has maintained and has in its possession, and under its
control, all records and documentation that it is required by any Tax
Statute to maintain and preserve.
5. In the last three years the Company has not been and, so far as the
Warrantors are aware, is not likely to be subject to any investigation
or non-routine audit or visit by any Tax Authority.
6. The Company is not, nor, so far as the Warrantors are aware, will it
become, liable to pay, to reimburse or to indemnify any person
(including a Tax Authority) in respect of the Taxation liability of a
third person whether or not as a consequence of that third person
failing to discharge that liability.
7. No transaction has been entered into by the Company in respect of which
the Company is required to make a specific return, provide information,
or make any claim for relief, election, appeal, disclaimer or
application to postpone the payment of Taxation to any Tax Authority
and in respect of which the time for making such application will
expire on or after Completion.
8. No Tax Authority has agreed to operate any special arrangement (being
an arrangement which is not based on a strict and detailed application
of the relevant legislation, generally published statements of practice
or generally published extra-statutory concessions) in relation to any
Company's affairs.
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9. Each Company has complied with all notices served on it by any Tax
Authority and no such notice remains outstanding.
10. No Company has been a party to a transaction in respect of which a
consent, clearance or claim for relief from any Tax Authority was
required.
GENERAL PROVISIONS FOR TAX
11. To the extent required by generally accepted accounting principles,
provision or reserve was made in the Accounts in respect of every Tax
Liability including for the avoidance of doubt any deferred tax
liability for which the Company at the Accounts Date was or may have
been liable or accountable whether or not such Tax Liability was or is
a primary liability of the Company, and whether or not the Company had,
has or may have any right of reimbursement against any other person.
BASE VALUES AND ACQUISITION COSTS
12. No Company owns nor has agreed to acquire or dispose of any asset the
consideration for the acquisition or disposal of which was or will be
in excess of its market value.
DISTRIBUTIONS AND PAYMENTS
13. Any interest or other amount payable, or which may become payable, in
respect of any security issued by any Company and remaining in issue at
today's date falls or would fall under legislation currently in force
to be treated as a distribution under section 209 (Meaning of
"distribution") or section 418 (Distribution to include certain
expenses of close companies).
14. The Company has not repaid, or agreed to repay, or redeemed, or agreed
to redeem, or purchased or agreed to purchase or granted an option
under which it may become liable to purchase, any shares of any class
of its issued share capital, or capitalised or agreed to capitalise, in
the form of debentures or redeemable shares, any profits or reserves of
any class or description; and the Company has not issued or agreed to
issue any share capital or security as paid up otherwise than by the
receipt of new consideration (within the meaning of Part VI ICTA) or
passed or agreed to pass any resolution to do so.
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TAX RESIDENCE AND STATUS
15. For the purposes of United Kingdom Taxation the Company has been
resident in the United Kingdom at all times since its incorporation and
will be so resident at Completion, and the Company is not, nor has ever
been resident in any other jurisdiction for any Taxation purpose.
16. The Company has not, nor at any time has had, a permanent establishment
or other presence for Taxation purposes in any jurisdiction other than
the United Kingdom.
CORPORATION TAX ON CHARGEABLE GAINS
17. Since the Accounts Date the Company has not entered into or been a
party to a transaction which will or may give rise to a liability to
corporation tax on chargeable gains other than transactions entered
into in the ordinary course of business of the Company.
18. No liability has fallen on any Company under section 179 TCGA (Company
ceasing to be a member of a group) and no Company owns any asset in
respect of which any such liability may arise.
19. No Company has entered into or will, on or before Completion, enter
into an election under section 179A TCGA (Re-allocation within group of
grain or loss accruing under section 179).
20. No Company has made any claim under sections 152 to 156 (Roll-over
relief on replacement of business assets), 175 (Replacement of business
assets by members of a group) or 247 (Roll-over relief on compulsory
acquisition) TCGA or under any other provision which could affect the
amount of any gain accruing or treated as accruing on a disposal of any
asset by any Company; and no claim has been made or is capable of being
made by any other company which affects or could affect the amount of
value of the consideration for the acquisition of any asset by any
Company which is to be taken into account in calculating any gain on a
subsequent disposal.
CLOSE COMPANIES
21. The Company is a close company as defined in section 414 of the Taxes
Act.
22. No distribution within section 418 ("distribution" to include certain
expenses of close companies) has been made by the Company, and no such
distribution will be made prior to Completion.
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23. No loan, advance, release, write-off, consideration or transaction
within sections 419 to 422 (Loans to participators) (inclusive) has
been made, given or effected by the Company.
24. The Company has not made a transfer of the kind referred to in section
125 TCGA (Shares in close company transferring assets at an
undervalue).
INHERITANCE TAX
25. Neither the assets nor the shares of the Company are, or may be,
subject to any charge by virtue of section 237 of the Inheritance Tax
Xxx 0000 and no person has, or may have the power under section 212 of
the Inheritance Tax Xxx 0000 to raise any capital transfer tax or
inheritance tax by sale or mortgage of, or a charge on any of the
Company's assets or shares.
TAX AVOIDANCE
26. The Company has not entered into or been a party to any transaction,
series of transactions, scheme or arrangement which will for any
Taxation purpose be disregarded, reconstructed or otherwise treated as
being different from the transaction, series of transactions, scheme or
arrangement as contemplated or intended by the Company.
27. No Tax Authority has investigated any transaction, series of
transactions, scheme or arrangement involving any Company with a view
to applying section 770A (Provision not at arm's length) and Schedule
28AA (Provision not at arm's length), or equivalent legislation or
legal principles in any other country, and since 1 April 2004 no
circumstances exist which could so far as the Vendors are aware result
in any liability or increased liability of any Company to Taxation if
such investigation were undertaken.
28. In relation to section 770A (Provision not at arm's length) and
Schedule 28AA (Provision not at arm's length), since 1 April 2004 each
Company has complied with its obligations under the corporation tax
self assessment regime and in particular, but without prejudice to the
above, has complied with, and prepared and retained any relevant
records referred to in, the guidance published by the Inland Revenue in
Tax Bulletin no. 37 of October 1998.
GROUPS
29. No Company:
29.1 surrendered any amounts of or by way of group relief, advance
corporate tax or tax refund;
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29.2 claimed any amounts of or by way of group relief, advance
corporation tax or tax refund;
29.3 made any payments for or repayments of group relief,
surrendered advance corporation tax or tax refund; or
29.4 entered into any agreements or arrangements relating to group
relief or the surrender of either advance corporation tax or
tax refunds,
other than to, from or with another company.
STAMP DUTY/STAMP DUTY LAND TAX
30. Each document in the possession or under the control of the Company, or
to the production of which the Company is entitled and on which the
Company relies or may rely on as purchaser or lessee and which in the
United Kingdom or elsewhere requires any stamp or xxxx to denote that:
30.1 any duty, tax or fee required to be paid by law has been paid;
or
30.2 a duty, tax or fee referred to in paragraph 30.1 is not
required to be paid, or that the document in question or the
Event evidenced by it qualifies from a relief or exemption
from such duty, tax or fee; or
30.3 the document has been produced to the appropriate authority
has been properly stamped or marked as appropriate and no such document
which is outside the United Kingdom would attract stamp duty if it were
to be brought into the United Kingdom.
31. Within the three years ending on the date of this agreement no Company
has been associated for the purposes of paragraph 1 of Schedule 7, FA
2003 (Group Relief) with any other company (other than a Company) which
has been a party to any transaction for which any claim for relief or
exemption under that paragraph has been made.
32. Within the three years ending on the date of this agreement no Company
has had control of, or been under the control of or under the same
control as, any other company (other than a Company) which has been a
party to any transaction for which any claim for relief or exemption
has been made under Paragraphs 7 and 8 of Schedule 7 FA 2003
(Reconstruction
73
Relief and Acquisition Relief). For the purposes of this warranty
"control" has the meaning given in section 416 (Meaning of "associated
company" and "control").
33. The Company has not entered into a contract for a land transaction on
which there will be an outstanding balance of stamp duty land tax to
pay on completion of the land transaction.
34. A land transaction return (as defined by section 76, FA 2003), has been
promptly and correctly filed with the Inland Revenue in respect of all
notifiable land transactions and registered in the Register, in each
case, where required to be done or delivered by the Company, and, for
the purposes of this warranty, "Register" means each and any of the
Chief Land Registrar of England and Wales, the Keeper of the Registers
of Scotland, or the Land Registry of Northern Ireland or in the
Registry of Deeds for Northern Ireland.
35. The Company has not entered into any land transaction where the whole
or part of the chargeable consideration for the transaction is
uncertain, contingent or unascertained.
INTANGIBLE FIXED ASSETS
36. The Company does not own any of the intangible fixed assets for the
purposes of Schedule 29 FA 2002 (Gains and losses of a company from
intangible assets).
VALUE ADDED TAX
37. The Company is registered as a taxable person for the purposes of VAT.
38. The Company has complied in all respects with all Tax Statutes relevant
to VAT and guidance published by all relevant Tax Authorities in any
form whatsoever and has made and obtained full, complete, correct and
up-to-date records and invoices and other documents appropriate or
requisite for the purposes of such Tax Statutes and guidance.
39. The Company:
39.1 is not in arrears with any payment or returns required under
any legislation relating to VAT and is not liable to any
abnormal or non-routine payment, or any forfeiture or penalty
or default surcharge, or to the operation of any penal
provision or to pay any interest relating to VAT;
39.2 has not been required by Customs and Excise to give security
under any legislation relating to VAT; and
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39.3 does not operate any special scheme or method authorised under
the VAT Regulations 1995/2518 or agreed with HM Customs and
Excise.
40. No act or transaction has been effected as a result of which the
Company is or may be held liable for any VAT chargeable against any
other company; and the Company is not nor has agreed to become an
agent, manager or factor for the purposes of VATA of any person.
41. The Company does not have an interest in any land or buildings in
relation to which an election has been made, either by the Company or
by any other person, to waive exemption from VAT under the provisions
of Schedule 10 VATA (Buildings and land).
42. The Company does not have any interest in any building or civil
engineering work which is either incomplete at the date of this
agreement or was completed for the purposes of Group 1, Schedule 9 VATA
(Exemptions: land) less than three years prior to the date of this
agreement.
43. The Company does not own any item to which Part XV of the Value Added
Tax Regulations 1995 (Capital goods scheme) applies and in respect of
which the period of adjustment will not have expired on or before
Completion.
CAPITAL ALLOWANCES
44. Since the Accounts Date the Company has not done, or omitted to do, or
agreed to do or permitted to be done, any act (other than the sale of
an asset at a price equal to its market value) as a result of which any
disposal value has been or may be required to be brought into account,
and there has not been and there will not be any recovery from any
Company of excess relief, under the CAA.
45. Since the Accounts Date no Company has done, or has omitted to do, or
agreed to do, or permitted to be done, any act, or suffered any
occurrence, as a result of which any balancing charge or allowance has
arisen or may arise under CAA or other legislation relating to capital
allowances.
46. No asset, expenditure on which by any Company has qualified for a
capital allowance under Part 3 CAA (Industrial building allowances),
has at any time since that expenditure was incurred been used otherwise
than as an industrial building or structure for the purposes of that
Part.
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PART 3
TAX COVENANT
1. COVENANT
The Warrantors severally covenant to pay to the Purchaser in the
proportions set opposite the name of the relevant Warrantor in column 5
of schedule 1 an amount equal to:
1.1 any Actual Tax Liability which arises by reference to an Event
occurring (or deemed to occur) or income, profits or gains
earned, accrued or received (or deemed to be earned, accrued
or received) on or before Completion;
1.2 the value of any Effective Tax Liability;
1.3 any liability for Inheritance Tax which:
1.3.1 has at Completion given rise to a charge on any of
the shares or assets of the Company or given rise to
a power to sell, mortgage or charge any of the shares
or assets of the Company; or
1.3.2 after Completion gives rise to a charge on any of the
shares or assets of the Company or gives rise to a
power to sell, mortgage or charge any of the shares
or assets of the Company and which arises as a result
of a transfer of value occurring or being deemed to
occur on or before Completion (whether or not in
conjunction with the death of any person whenever
occurring);
1.4 any amount required to be accounted under the pay as you earn
system by the Purchaser or the Company and any national
insurance contributions (together in each case, with any fine,
penalty and interest relating to the same) as a result of a
sale of the Shares by the Vendors or any of them pursuant to
this agreement;
1.5 any Tax Liability which is primarily the liability of another
person (the "PRIMARY PERSON") for which the Company is liable
in consequence of:
1.5.1 the Primary Person failing to discharge such Tax
Liability; and
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1.5.2 the Company at any time before Completion:
1.5.2.1 being a member of the same group of
companies as the Primary Person; or
1.5.2.2 having control of, being controlled by, or
being otherwise connected with, the Primary
Person or being controlled by the same
person as the Primary Person,
for any Tax purpose
1.6 any liability of the Company arising from an obligation to
repay the whole or any part of any payments received for Group
Relief (other than from another Company) pursuant to an
arrangement entered into by the Company on or before
Completion.
1.7 any amount paid (all payable to the extent it is not yet
actually paid) by the Company for a surrender to it of Group
Relief in respect of any period ended on or prior to
completion, to the extent that such Group Relief is lost,
cancelled or disallowed or otherwise proves to be unavailable
to set off against income, profits or gains, or tax, for the
period in respect of which the surrender is made.
1.8 the reasonable professional costs properly incurred by the
Purchaser or the Company in connection with a successful claim
under this part 3 of this schedule.
2. DEDUCTIONS FROM PAYMENTS
2.1 All sums payable by the Warrantors under any claim under the
Tax Covenant shall be paid gross, free and clear of any rights
of counterclaim or set-off and without any deduction or
withholding unless the deduction or withholding is required by
law in which event the Warrantors shall pay such additional
amount as shall be required to ensure that the net amount
received and retained (free of any liability) by the Purchaser
will equal the full amount which would have been received by
it had no such deduction or withholding been required,
provided that this paragraph shall not apply to any interest
payable under paragraph 5.4 of part 4 of this schedule.
2.2 If any amount payable under any claim under the Tax Covenant
is subject to Tax, the amount so payable shall be grossed up
by such amount as will ensure that after deduction of the Tax
in question there shall be left an amount equal to the amount
that would otherwise be payable under the claim, save that
this paragraph shall not apply
77
to the extent that such Tax arises or is increased as a
consequence of any voluntary act of the Purchaser.
2.3 If, at any time after any increased payment is made by the
Warrantors as a consequence of the application of this
paragraph 2, the Purchaser receives or is granted a credit
against or remission from any Taxation payable by it which it
would not otherwise have received or been granted but for such
increased payment, the Purchaser shall, to the extent that it
can do so without prejudicing the retention of the amount of
such credit or remission, reimburse the Warrantors with such
amount as the auditors of the Company for the time being
determine and certify (at the cost and expense of the
Warrantors) to be such portion of such credit or remission as
shall leave the Purchaser (after such reimbursement) in no
worse a position than it would have been in had the
circumstances given rise to the increased payment not in fact
arisen. Such reimbursement shall be made not later than 10
business days after the Purchaser receives notice from the
auditors of a certification under this paragraph 2.3.
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PART 4
LIMITATIONS AND PROCEDURE
1. LIMITATIONS
The Warrantors shall not be liable under any Tax Warranty or any claim
under the Tax Covenant in respect of any Tax Liability to the extent
that:
1.1 provision, reserve or allowance has been made in the
Completion Accounts in respect of any such Tax Liability or to
the extent that the payment or discharge of any such Tax
Liability has been taken into account in the Completion
Accounts;
1.2 it arises or is increased by the delay or default of the
Purchaser or the Company after Completion to pay any amount of
Tax to a Tax Authority;
1.3 such liability arises or is increased as a result of any
change in law (primary or delegated), any accounting practice
or principle or the published practice of a Tax Authority
occurring after the Completion Date (but not announced before
that date);
1.4 such liability arises or is increased as a result of any
voluntary act, transaction or omission of the Company or the
Purchaser after Completion where the act or transaction was:
1.4.1 not required by any legislation or other statutory
requirement in force at Completion;
1.4.2 not pursuant to a legally binding obligation entered
into by the Company on or before Completion;
1.4.3 not the presentation for stamping of any document
which was entered into prior to Completion; or
1.4.4 otherwise than in the ordinary course of business of
the Company as carried on at Completion;
1.5 the liability would not have arisen or would have been reduced
or eliminated but for a failure or omission after Completion,
on the part of the Company or the Purchaser, to make any
claim, election, surrender or disclaimer or to give any notice
or consent or to do any other thing under any enactment or
regulation relating to Tax the making,
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giving or doing of which was taken into account in computing
the provision for Tax in the Completion Accounts and details
of such claim, election, surrender, disclaimer, notice or
consent were provided to the Purchaser in reasonable time to
enable such claim, election, surrender, disclaimer, notice,
consent or thing to be made, given or done;
1.6 the liability is increased as a result of either the Company
or the Purchaser failing to act in accordance with the
provisions of paragraph 4 of this part of this schedule;
1.7 the liability arises or is increased as a result of any change
after Completion in the bases, methods or policies of
accounting of the Purchaser or the Company save where such
change is made to comply with a generally accepted accounting
principles, the published practice of any Tax Authority, law
or rule of any regulatory authority or body in force at the
Completion Date;
1.8 such liability arises as a result of:
1.8.1 any voluntary disclaimer by the Company after
Completion of the whole or part of any capital
allowances claimed before Completion or the
entitlement to which was taken into account in
preparing the Completion Accounts,
1.8.2 the revocation or revision by the Company after
Completion of any Relief claimed or the entitlement
to which was taken into account in preparation of the
Completion Accounts,
1.9 the income, profits or gains in respect of which the liability
arises were actually earned, accrued or received by the
Company before Completion but were not reflected in the
Completion Accounts where the cost of determining when income,
profits or gains were received and/or if they were reflected
in the Completion Accounts is borne solely by the Vendors;
1.10 any Relief, other than an Accounts Relief or a Post Completion
Relief, is available to the Company (including by way of group
relief from another Company) to relieve or mitigate that Tax
Liability;
1.11 the liability has been satisfied without cost or expense to
the Company (otherwise than by the Company, the Purchaser or
any member of the Purchaser's Group);or
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1.12 such Tax Liability arises or is increased as a consequence of
any reduced entitlement to the small companies rate of
corporation tax (section 13 of the Taxes Act) where such
reduced entitlement results from the Company becoming
associated with any company or companies at or following
Completion.
2. The Warrantors shall not be liable in respect of any breach of the Tax
Warranties if, and to the extent that, the loss incurred is or has been
included in any claim under the Tax Covenant which has been satisfied
in full in cleared funds nor shall the Warrantors be liable in respect
of a claim under the Tax Covenant if, and to the extent that, the
amount claimed is or has been included in a claim for breach of the Tax
Warranties which has been satisfied in full.
3. DURATION AND EXTENT
3.1 Paragraphs 1.1, 1.3, 1.4 and 6 of schedule 8 of this agreement
shall apply in respect of any Tax Claim (with all necessary
changes) as if the same were set out and repeated in this part
4 of this schedule.
3.2 Paragraph 1.2 of schedule 8 of this agreement shall apply in
respect of any Warranty Claim (with all necessary changes) as
if the same were set out and repeated in this part 4 of this
schedule.
4. CONDUCT OF CLAIMS
4.1 If the Purchaser or the Company become aware of any Claim for
Tax which gives or may give rise to a Tax Claim, the Purchaser
shall, or shall procure that the Company shall, as soon as
practicable (and in any event, in the case of the receipt of a
Claim for Tax consisting of any assessment or demand for Tax
or for which the time for response or appeal is limited, not
less than five clear Business Days prior to the day on which
the time for response or appeal expires) give written notice
of the Claim for Tax to the Warrantors.
4.2 If the Warrantors in writing reasonably require, the Purchaser
shall, or shall procure that the Company shall, supply the
Warrantors with such available and relevant details,
documentation, correspondence and information and shall take
such action as the Warrantors may reasonably request in
writing to negotiate, avoid, dispute, resist, compromise,
defend or appeal against the Claim for Tax and any
adjudication in respect of the Claim for Tax provided that the
Warrantors shall first indemnify the
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Company and the Purchaser to the reasonable satisfaction of
the Purchaser against all reasonable costs and expenses which
may be incurred in relation to the same.
4.3 The Warrantors shall have the right to have any action
mentioned in paragraph 4.2 conducted by their nominated
professional advisers provided that:
4.3.1 the appointment of such professional advisers shall
be subject to the approval of the Purchaser (such
approval not to be unreasonably withheld or delayed
and shall be deemed to be given in the event that the
Purchaser does not within 15 days of request give a
fully reasoned, written response to a request for
approval by the Warrantors);
4.3.2 the Warrantors keep the Purchaser fully informed of
all matters known to them or to Warrantors' advisers,
concerning the Tax Claim;
4.3.3 the Warrantors provide the Purchaser with copies of
all material documents and correspondence relating to
the Tax Claim;
4.3.4 the Warrantors submit to the Purchaser for prior
written approval (not to be unreasonably withheld or
delayed) any material communication (written or
otherwise) related to the Tax Claim which is to be
transmitted to the relevant Tax Authority; and
4.3.5 the Warrantors do not settle or compromise the Tax
Claim or agree any matter in the conduct in the Tax
Claim which is likely to materially increase the
future Tax Liability of the Company and/or the
Purchaser without the Purchaser's prior written
approval (not to be unreasonably withheld and
delayed).
4.4 Where the Warrantors Vendors have not assumed conduct of any
action pursuant to paragraph 4.3 above, the Purchaser shall
keep the Warrantors fully informed of the progress in settling
the relevant Claim for Tax and shall, as soon as reasonably
practicable, forward, or procure to be forwarded to the
Warrantors, copies of all material correspondence pertaining
to it.
4.5 Paragraph 4.2 shall not apply in respect of any Claim:
4.5.1 to the extent that it would involve the Company
contesting any Tax Claim before any court or other
appellate body (excluding the authority or body
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which has made the Tax Claim) unless Tax Counsel (of
at least 10 years' experience) appointed by agreement
between the Warrantors and the Purchaser opines, in
writing, that an appeal against the Claim in question
will, on the balance of probabilities, be won;
4.5.2 where it derives from or arises out of any fraudulent
act or omission by the Vendors or by the Company
prior to Completion;
4.5.3 if the Warrantors fail to comply in a material
respect with their obligations under paragraph 4.3;
4.5.4 if within 15 clear Business Days (or in the case of a
Claim for Tax which involves a time limit as set out
in paragraph 4.1, two clear Business Days prior to
the day on which the time for response or appeal
expires) following the Warrantors' receipt of written
notice of the Claim from the Purchaser in accordance
with paragraph 4.1, the Warrantors:
4.5.4.1 do not request that the Purchaser or the
Company takes any action under paragraph
4.2; or
4.5.4.2 fails to indemnify the Purchaser and/or the
Company (as appropriate),
in which case the Purchaser or the Company shall
(without prejudice to the Purchaser's rights under
this schedule) be free to pay or settle the Tax Claim
on such terms as it may, in its reasonable
discretion, consider fit.
4.6 where the Purchaser or the Company reasonably believes that
the action requested shall materially increase the future tax
liability of the Company (including the use of any Accounts
Relief or any Post Completion Relief) except to the extent
that such action is in accordance with Tax legislation or
accounting practice at such time.
5. DATE FOR PAYMENT
5.1 Where a Tax Claim or any sum to which paragraph 2.2 of part 3
of this schedule applies involves the Purchaser or the Company
being under a liability to make a payment to any Tax
Authority, the Warrantors shall pay to the Purchaser in
cleared funds the relevant amount on or before the later of
the fifth Business Day after demand is made for the amount in
question and the fifth Business Day before the date
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on which the amount in question is finally payable to the
relevant Tax Authority without any interest, penalty, fine or
surcharge arising in respect of it.
5.2 Where a Tax Claim does not fall within paragraph 5.1, the due
date for the making of payments by the Warrantors under this
schedule shall be:
5.2.1 in the case of a Tax Claim involving the loss of an
Accounts Relief which is not a right to a repayment
of Tax, the later of five Business Days following
service by the Purchaser of a written demand for the
same and the date on which the Accounts Relief would
otherwise have been used to reduce a liability to
make a payment but for such loss;
5.2.2 in the case of a Tax Claim involving the loss of an
Accounts Relief which is a right to repayment of Tax,
the later of five Business Days after the Purchaser
has served a written demand for the same and the date
on which repayment of Tax would have actually been
received;
5.2.3 in the case of a Tax Claim involving the set-off of a
Post Completion Relief or an Accounts Relief, the
later of five Business Days following the service by
the Purchaser of a written demand for the same or the
date on which the Actual Tax Liability would have
fallen due but for such setting off.
5.3 All other sums payable by the Warrantors pursuant to paragraph
2 of part 3 of this schedule shall be paid five Business Days
after the Purchaser has served a written demand for the same.
5.4 Any sum not paid on a date determined under this schedule
("THE DUE DATE") shall bear interest (which shall accrue from
day to day after, as well as before, any judgment for the
same) at the rate of 1% per annum over the base rate of
Barclays Bank PLC or, in the absence of such base rate, at
such similar rate as the person entitled to the payment shall
select from the due date up to and including the day of actual
payment of such sum (or the next Business Day if the date of
actual payment is not a Business Day) compounded quarterly.
Such interest shall be paid on demand.
6. TAX AFFAIRS
6.1 The Warrantors or their duly authorised agents or advisers
shall, at the expense of the Company prepare, submit and agree
the corporation tax computations and returns of the Company
("TAX COMPUTATIONS") for its accounting period(s) (within the
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meaning of section 12 of the Taxes Act) ended on or before the
Accounts Date ("RELEVANT ACCOUNTING PERIOD(S)").
6.2 The Warrantors shall deliver to the Purchaser for comments any
Tax Computation return document or correspondence and details
of any information or proposal ("RELEVANT INFORMATION") which
it intends to submit to the Inland Revenue before submission
to the Inland Revenue shall take account of the reasonable
comments of the Purchaser and make such amendments to the
Relevant Information as the Purchaser may reasonably require
in writing within 30 days of the date of delivery of the
Relevant Information prior to its submission to the Inland
Revenue.
6.3 The Warrantors shall deliver to the Purchaser copies of any
material correspondence sent to, or received from, the Inland
Revenue relating to the Tax Computations and returns and shall
keep the Purchaser informed of their actions under this
paragraph.
6.4 Subject to paragraphs 6.2 and 6.3, the Purchaser shall or
shall procure that:
6.4.1 the Company properly authorises and signs the Tax
Computations and makes and signs or otherwise enters
into all such elections, surrenders and claims and
withdraws or disclaims such elections, surrenders and
claims and gives such notices and signs such other
documents as the Warrantors shall require in relation
to the Relevant Accounting Period(s);
6.4.2 the Company provides to the Warrantors such
information and assistance, including without
limitation such access to its books, accounts and
records which may reasonably be required to prepare,
submit, negotiate and agree the Tax Computations;
6.4.3 any correspondence which relates to the Tax
Computations shall, if received by the Purchaser or
any Company or their agents or advisers, be promptly
copied to the Warrantors.
6.5 The Purchaser or its duly authorised agents or advisers shall,
at the expense of the Company prepare, submit and agree the
corporation tax computation and return of the Company for its
accounting period (within the meaning of section 12 of the
Taxes Act 1988) in which Completion occurs ("COMPLETION
ACCOUNTING PERIOD") ("COMPLETION TAX COMPUTATION").
85
6.6 The Purchaser shall deliver to the Warrantors for comments the
Completion Tax Computation, return, document or correspondence
and details of any information or proposal ("COMPLETION
RELEVANT INFORMATION") which it intends to submit to the
Inland Revenue before submission to the Inland Revenue and,
subject to paragraph 6.7 of this schedule 4 part 4 shall take
account of the reasonable comments of the Warrantors and make
such reasonable amendments to the Relevant Information as the
Warrantors may require prior to its submission to the Inland
Revenue, provided that the Purchaser shall not have to take
account of any comments or make any amendments which the
Purchaser reasonably considers will result in any Completion
Tax Computation not being true, accurate and lawful in all
respects.
6.7 Subject to paragraphs 6.6 of this schedule 4 part 4, the
Purchaser shall or shall procure that the Company provides to
the Warrantors all such information and assistance, including
without limitation such access to its books, accounts and
records (at the Warrantors' cost and expense) which may
reasonably be required to consider the draft Completion Tax
Computations.
7. OTHER PROVISIONS AND CORRESPONDING BENEFIT
7.1 If:
7.1.1 any provision for Tax in the Completion Accounts
proves to be an over provision;
7.1.2 the amount by which any right to repayment of Tax
which has been treated (or, in accordance with
generally accepted accounting principles, could have
been treated) as an asset in the Completion Accounts
proves to have been under stated; or
7.1.3 a payment by the Warrantors in respect of any Tax
Liability under a Tax Claim or the matter giving rise
to the Tax Liability in question results in the
Company or the Purchaser receiving or becoming
entitled to any Relief (other than an Accounts
Relief) which it utilises (including by way of
repayment of Tax) ("CORRESPONDING RELIEF"),
then an amount equal to such over provision, under stated
right to repayment of Tax, or the Tax saved by the
Corresponding Relief at the date such Corresponding Relief is
utilised ("RELEVANT AMOUNT"), shall be dealt with in
accordance with paragraph 7.2.
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7.2 The Relevant Amount:
7.2.1 shall first be set off against any payment then due
from the Warrantors under a Tax Claim;
7.2.2 to the extent there is an excess of the Relevant
Amount after any application of the same under
paragraph 7.2.1, a refund shall be made to the
Warrantors of any previous payment or payments made
by the Warrantors under a Tax Claim and not
previously refunded under this paragraph 7.2.2 up to
the amount of such excess;
7.2.3 to the extent that the excess referred to in
paragraph 7.2.2 is not exhausted under that
paragraph, the remainder of that excess shall be
carried forward and set off against any future
payment or payments which become due from the
Warrantors under a Tax Claim; and
7.2.4 to the extent that any excess referred to in
paragraph 7.2.3 is not exhausted by the sixth
anniversary of this agreement, a refund of such
excess shall be made to the Warrantors within 30 days
of the sixth anniversary date.
7.3 If the Purchaser or the Company becomes aware of any
circumstances which shall or may give rise to the application
of paragraph 7.1, the Purchaser shall or shall procure that
the Company shall as soon as reasonably practicable give
written notice of the same to the Warrantors.
7.4 The Warrantors may (at their expense and cost) require the
Auditors to certify the existence and quantum of any Relevant
Amount and the date on which the Corresponding Relief is
utilised and, in the absence of manifest error, their decision
shall be final and binding.
8. THIRD PARTY CLAIMS
8.1 If the Company or the Purchaser are entitled to recover from
another person or a Tax Authority a sum in respect of any
matter or Tax Liability to which a Tax Claim relates the
Purchaser shall forthwith give written notice of the same to
the Warrantors and if the Warrantors indemnify the Purchaser
or, as appropriate, the Company (to the Purchaser's reasonable
satisfaction) against the reasonable costs of the Purchaser
or, as appropriate, the Company in connection with taking the
following action, the Purchaser shall, or
87
shall procure that the Company shall, take such action
reasonably requested by the Warrantors to enforce recovery
against that person or Tax Authority.
8.2 In the event that the Purchaser or the Company recovers any
sum referred to in paragraph 8.1 (whether after taking any
action at the request of the Warrantors under that paragraph
or otherwise), the Purchaser shall, as soon as reasonably
practicable, account to the Warrantors for the lesser of:
8.2.1 the sum recovered net of any Tax on the sum and the
costs and expenses of recovering the same; and
8.2.2 any amount paid by the Warrantors in respect of the
matter giving rise to the relevant Tax Claim plus
costs and expenses for which the Warrantors have
indemnified the Purchaser and/or the Company under
this paragraph 8.
9. MISCELLANEOUS
Any payment to the Purchaser or the Company under any Tax Claim shall
be deemed to be a reduction of the total consideration payable
hereunder for the Sale Shares.
10. COVENANT BY THE PURCHASER
10.1 The Purchaser covenants with the Warrantors to pay to the
Warrantors an amount equal to any of the following:
10.1.1 any liability or increased liability to Tax of the
Vendors or any person connected with the Vendors
arising under or by reference to section 767A or
section 767AA of the Taxes Act or paragraph 8 of
schedule 34 to the Finance Xxx 0000, paragraph 9 of
schedule 35 to the FA 2002 by virtue of the
non-payment of Tax by the Company save that this
paragraph 10.1.1 shall not apply in respect of any
Tax for which the Warrantors are liable to make (but
have not yet made) payment to the Purchaser under
this schedule;
10.1.2 the reasonable costs and expenses of the Vendors in
connection with any liability referred to or in
taking any action under this paragraph.
10.2 For the purposes of this paragraph, any reference to a
liability to Tax shall include any liability to make a payment
of Tax which would have arisen but for the utilisation of any
Relief.
88
10.3 Paragraphs 4 and 5 of this part 4 of this schedule shall apply
to this paragraph 10 (with all necessary changes) as if: (a)
references to the Company in the definition of Claim for Tax
were references to the Vendors; and (b) (except in paragraph
4.3) references to the Vendors were references to the
Purchaser and vice versa.
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SCHEDULE 5
COMPLETION
1. The Vendors shall deliver or procure to be delivered to the Purchaser:
1.1 duly executed agreements in agreed form in respect of the sale
of the Option Shares to the Purchaser together with duly
executed powers of attorney or other authorities pursuant to
which any such agreements have been executed;
1.2 duly executed transfers of the Shares and the Option Shares in
favour of the Purchaser together with duly executed powers of
attorney or other authorities pursuant to which any transfers
have been executed;
1.3 the relevant share certificates (or an express indemnity in a
form satisfactory to the Purchaser in the event of any found
to be missing) in respect of the Shares and the Option Shares;
1.4 the written resignations in the agreed form of Xxxxxxx Xxxxxx,
Xxxxxxxx Xxxxx and Xxxxxx Xxxxxx as directors of the Company
and the Subsidiaries;
1.5 all certificates of incorporation and certificates of
incorporation on change of name for the Company and the
Subsidiaries;
1.6 the common seal and statutory books (including minute books)
and books of account of the Company and the Subsidiaries made
up to the Completion Date;
1.7 share certificates in respect of all the issued shares of each
of the Subsidiaries held by the Company or any of the
Subsidiaries;
1.8 bank statements dated not earlier than two Business Days
before Completion for all bank accounts of the Company and/or
the Subsidiaries together with cash book balances of the
Company and/or the Subsidiaries as at Completion and
reconciliation statements reconciling such balances with the
bank statements;
1.9 the documents of title to the Properties as shown in the
schedule of deeds in the agreed form;
1.10 the Disclosure Letter.
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1.11 third party consents and approvals.
2. The Warrantors shall procure that meetings of the boards of directors
of the Company and each of the Subsidiaries are convened and held at
which resolutions in the form set out in the Completion Board Minutes
are duly passed to do such of the following things as are applicable to
it:
2.1 approve (subject to stamping) the transfers referred to in
paragraph 1.2 above;
2.2 approve the change in registered office of the Company and the
Subsidiaries to Carmelite, 50 Xxxxxxxxxx, Xxxxxx, XX0X 0XX;
2.3 appoint persons nominated by the Purchaser as directors;
2.4 accept the resignations referred to in paragraph 1.4; and;
2.5 cancel the existing bank mandates and replace them with new
mandates as requested by the Purchaser.
3. The Purchaser shall:
3.1 pay to the Vendors' Solicitors by transfer of funds through a
UK clearing bank the sum of (pound)27,337,288 in respect of
the cash consideration payable at Completion. The Vendors'
Solicitors' receipt shall be a sufficient discharge for such
sum and the Purchaser shall not be concerned to see to the
application thereof;
3.2 deliver to each of the Warrantors a duly executed certificate
in respect of the Loan Notes to be allotted to him at
Completion pursuant to clause 3.2 (together with a Letter of
Credit duly executed by Bank of America, N.A. in relation
thereto and a duly executed copy of the instrument creating
the Loan Notes);
3.3 pay the Initial Escrow Amount into the Escrow Account; and
3.4 deliver to the Vendors duly executed counterparts of:
3.4.1 the agreements referred to in paragraph 1.1 above;
and
3.4.2 the Disclosure Letter.
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SCHEDULE 6
THE PROPERTIES
[Omitted]
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SCHEDULE 7
PART 1
COMPLETION ACCOUNTS
PREPARATION OF COMPLETION ACCOUNTS
1. After Completion, the Company shall prepare a consolidated balance
sheet for the Group as at 31 May 2004 substantially in the form
attached at appendix 2.
2. The balance sheet shall be prepared in accordance with the specific
accounting methods, bases, principles, policies and practices set out
in part 2 of this schedule, and subject thereto, on a basis consistent
with the Accounts using the same accounting methods, bases, principles,
policies and practices, and subject thereto, in accordance with the law
and applicable standards, principles and practices generally accepted
in the United Kingdom as if they were statutory accounts required to be
prepared under the 0000 Xxx.
3. After Completion, the Purchaser shall provide, and shall ensure that
each Group member provides, to the Warrantors or their representatives
reasonable access to relevant assets, documents and records within
their possession or control and reasonable access to the Purchaser's
Accountants and to the accounts staff employed by the Company for the
purpose of reviewing and agreeing the Completion Accounts.
4. The Purchaser shall within 100 days starting on the day after
Completion submit to the Warrantors the balance sheet, the Purchasers'
working papers and a report by the Purchaser addressed to the
Warrantors stating whether in their opinion the balance sheet has been
prepared in accordance with paragraph 2. The Warrantors shall within 30
days starting on the day after receipt of the balance sheet and working
papers certify whether or not they agree with the balance sheet
together with details of any changes they believe need to be made to
ensure that the balance sheet complies with paragraph 2.
5. If the Warrantors certify their agreement with the balance sheet the
balance sheet shall constitute the Completion Accounts. If the
Warrantors certify that they disagree with the balance sheet, paragraph
6 shall apply and unless the Warrantors and the Purchaser agree on the
Completion Accounts, the decision of the independent firm of chartered
accountants produced in accordance with paragraph 6 shall constitute
the Completion Accounts. If the Warrantors do not give the Purchaser
the certificate required by paragraph 4 within the prescribed period,
the balance sheet shall constitute the Completion Accounts.
93
6. If within 14 days starting on the day after receipt by the Purchaser of
the certificate from the Warrantors referred to in paragraph 4, the
Warrantors and the Purchaser have not agreed on the Completion Accounts
or the Warrantors and the Purchaser have not agreed on the amount of
the consideration payable under clause 3.1, the following provisions
shall apply. Either party may refer the matter to an independent firm
of chartered accountants agreed by the parties or, in default of
agreement within 28 days of the date of receipt of the certificate, an
independent firm of chartered accountants nominated by the President
for the time being of the Institute of Chartered Accountants in England
and Wales ("EXPERT"), on the basis that the Expert is to make a
decision on the matter within 28 days starting on the day after
receiving the reference. In a reference, the Expert shall act as an
expert and not as an arbitrator. The decision of the Expert is, in the
absence of fraud or manifest error, final and binding on both parties.
Interest at 5% per annum over the base rate of Barclays Bank PLC shall
be payable on the net amount awarded by the Expert from the end of the
30 day period prescribed in paragraph 4 to the date of Expert's
decision (less any interest earned on such sum (or part of it) in the
Escrow Account in the aforementioned period). The Expert's costs and
the reasonable professional costs of the successful party in respect of
a reference shall be borne by the party whose estimate of the Net Asset
Value is furthest from that determined by the Expert ("LOSING PARTY").
The Expert shall determine following his decision the reasonable
professional costs of the successful party to be borne by the Losing
Party. Payment of any monies due under this paragraph shall be made in
full by the Losing Party within 14 days of the Expert's decision. In
default of payment within 14 days interest shall be payable on the
unpaid balance (including any costs) at the rate of 5% per annum over
the base rate of Barclays Bank PLC from that date to the date of final
payment.
7. For the purposes of agreeing the Completion Accounts, each of the
Warrantors appoints Xxxxxxxx Xxxxxx Xxxxx to be their representative
("WARRANTORS' REPRESENTATIVE") to act on their behalf in relation
thereto and references is to "Warrantors" in this part 1 of schedule 7
(except in relation to the bearing of the Expert's costs) shall be to
the "Warrantors' Representative" for all purposes in connection with
the agreement of the Completion Accounts.
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PART 2
The Completion Accounts shall be prepared in accordance with the following
specific accounting methods, bases, principles, policies and practices:
1. No account is to be taken of an event taking place after Completion and
regard is only to be had to information available to the parties as at
Completion other than in accordance with SSAP17.
2. The Provision for bad debts shall be (i) the provision made in the
Management Accounts (Full Year) as set out in appendix 3 unless and to
the extent the debtors so provided have subsequent to 31 March 2004
been collected, in which case the provision shall be reduced by an
amount equal to any debtors so collected, and (ii) provided that the
Company continues to operate and record its pre-completion procedures
for the collection of debtors to the standard operated prior to
Completion, an additional provision for any debtors outstanding at 31
May 2004 not collected within 90 days of 31 May 2004 and not already
included in the Management Accounts (Full Year) as set out in appendix
3.
3. The Customer Payments received upfront shall be verified and included
in the Completion Accounts. This is to include all cash received in
advance including amounts billed in advance and collected by the BRAVO
and IRM billing systems, from the NHS or any other customers for
periods of service from June 2004 forward.
4. The following items shall be included at the values set out below:
4.1 fixed assets at(pound)12,009,000;
4.2 Investment in Sharpsmart at ((pound)75,000), which is a Credit
balance;
4.3 spares stock at(pound)130,000;
4.4 .Sharpsmart loan at (pound)342,974.
5. It is agreed that no amount will be included in the Completion Accounts
in respect of:
5.1 monies receivable from the sale of WRES;
5.2 balances relating to the sale of the Well Corporation joint
venture;
5.3 bonuses payable to the Warrantors;
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5.4 set up costs in connection with Larkfield;
5.5 balances in relation to the purchase of the customer list of
Synergy Healthcare.
It is further agreed that transactional fees related to the sale of
WRES and any costs incurred by the Company related to services received
by it in respect of the transaction that has resulted in the sale of
the Company effected by this agreement will be charged to the profit
and loss account in the period to 31 March 2004.
6. The figure of (pound)107,931 is agreed as the rolling average working
capital figure for the purposes of calculating the target net asset
value.
7. It is acknowledged by both parties that it is the intention of
Stericycle, Inc. to consolidate the operating results of the Group with
effect from 31 May 2004.
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SCHEDULE 8
LIMITATION ON THE WARRANTORS' LIABILITY
1. DURATION AND EXTENT
1.1 The aggregate liability of the Vendors in respect of all
Claims shall not exceed the sum which is the difference
between (i) the Consideration less the amount of
(pound)290,613 being the surplus cash and (ii) the Net Asset
Value as determined by the Completion Accounts.
1.2 No amount shall be payable by the Warrantors in respect of any
Claim under the Warranties unless and until the aggregate
cumulative liability of the Warrantors in respect of all such
Claims under the Warranties exceeds (pound)200,000 in which
case the Warrantors shall be liable for botH the initial
(pound)200,000 and the excess.
1.3 The Vendors shall not be liable for any Claim unless the
Vendors against whom the Purchaser is entitled to make the
Claim (referred to in this schedule as the "relevant Vendors")
are given notice in writing of that Claim stating in
reasonable detail the nature of the Claim and the amount
claimed on or before the second anniversary of Completion in
the case of the Share Warranties and on or before six years of
the Completion Date in the case of any Tax Claim and unless
legal proceedings shall have been served in respect of any
such Claim within six months of the relevant Vendors being
notified of any such Claim.
1.4 Paragraphs 1.1 to 1.2 (inclusive) shall not apply to any Claim
where it can be proved that such Claim is based on a
fraudulent act or omission by any of the Vendors prior to
Completion.
2. LIMITATIONS
No Claim shall be admissible and the Warrantors shall not be liable
under any of the Share Warranties:
2.1 to the extent that specific provision, reserve or allowance
has been made in the Accounts or in the Completion Accounts or
was specifically referred to in the notes to the Accounts or
to the extent that payment or discharge thereof has been taken
into account in either the Accounts or the Completion
Accounts;
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2.2 to the extent that such liability arises or is increased as a
result of any change or changes in legislation, primary or
delegated (other than relating to Taxation or any changes in
rates of Taxation or the introduction of any changes or new
form of Taxation or in the practice of the Inland Revenue or
HM Customs & Excise), occurring after Completion with
retrospective effect; or
2.3 to the extent that such liability occurs or arises as a result
of or is otherwise attributable wholly or partly to any
voluntary act, transaction or omission of the Company or any
of the Subsidiaries or the Purchaser or their respective
directors, employees or agents on or after Completion:
2.3.1 which is not in the ordinary and proper course of
business; and
2.3.2 which is not pursuant to a legally binding commitment
created on or before Completion by the Company or any
of the Subsidiaries or to which they were subject on
or before Completion; and
2.3.3 where the fact that the act, transaction or omission
would give rise to or increase the liability has been
Disclosed or the Purchaser ought reasonably to have
been aware on the basis of information Disclosed that
such act, transaction or omission would give rise to
or increase such liability; or
2.4 to the extent that such liability occurs or arises as a result
of or is otherwise attributable wholly or partly to any act
authorised in writing by or carried out at the written request
of the Purchaser or any member of the Purchaser's Group prior
to Completion; or
2.5 to the extent that any Claim by the Purchaser or the subject
matter thereof has been or is made good or is otherwise
compensated for (otherwise than by the Purchaser or any member
of the Purchaser's Group), but taking into account all other
losses to the Purchaser flowing directly as a result of the
making good or compensation (including without limitation,
where such making good or compensation results from a claim
against an insurance policy, taking account of any increased
insurance premiums incurred by the Purchaser's Group solely as
a result of the claim against such insurance policy or the
subject matter of such claim.
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3. THIRD PARTY CLAIMS
3.1 Where the Purchaser and/or the Company and/or any of the
Subsidiaries is/are at any time entitled under an insurance
policy to recover any sum in respect of any matter giving rise
to a Non-Tax Claim, the Purchaser shall and shall procure that
the Company or any of the Subsidiaries shall make a claim for
recovery of such sum under such policy. The Purchaser shall
not take any action against the Vendors (other than notifying
the relevant Vendors of the Non-Tax Claim) until the expiry of
60 days following the making of such claim under such policy
and shall use all reasonable endeavours (but without being
obliged to threaten or commence legal proceedings) to ensure
that, so far as possible, amounts are recovered under such
policy in respect of such Non-Tax Claim. In the event that the
Purchaser or the Company or any of the Subsidiaries shall
recover any amount under such policy in respect of such
Non-Tax Claim the amount of the Non-Tax Claim against the
relevant Vendors shall be reduced by (or if the relevant
Vendors have paid the amount claimed by the Purchaser, the
relevant Vendors shall be repaid the amount paid by them to
the Purchaser in respect of the Non-Tax Claim or, if less, an
amount equal to) the amount recovered under the policy in
respect of such Non-Tax Claim less the aggregate of all
reasonable costs, charges and expenses incurred by the
Purchaser or the Company or any of the Subsidiaries in
recovering that sum pursuant to such insurance policy
including any increased insurance premiums incurred by the
Purchaser's Group solely as a result of the claim against such
insurance policy or the subject matter of such claim.
3.2 If the relevant Vendors pay at any time to the Purchaser or to
the Company or to any of the Subsidiaries the amount of a
Non-Tax Claim and the Purchaser or the Company or any of the
Subsidiaries is/are or subsequently become entitled, otherwise
than under an insurance policy, to recover from some other
person any sum in respect of any matter giving rise to such
Non-Tax Claims the Purchaser shall and shall procure that the
Company or the relevant Subsidiary shall forthwith repay to
the relevant Vendors so much of the amount paid by them to the
Purchaser, the Company or the relevant Subsidiary as does not
exceed the sum (if any) recovered by the Purchaser, the
Company or the relevant Subsidiary from such other person less
all reasonable costs, charges and expenses incurred by the
Purchaser, the Company or the relevant Subsidiary in
recovering that sum from such other person.
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3.3 If any amount is repaid to the relevant Vendors by the
Purchaser or the Company or any Subsidiary pursuant to
paragraph 3.2 above an amount equal to the amount so repaid
shall be deemed never to have been paid by the Vendors for the
purposes of paragraph 1.1 and accordingly shall not be treated
as an amount in respect of which any liability has been
incurred.
4. RIGHTS OF ACTION
4.1 If the relevant Vendors pay at any time to the Purchaser, the
Company or any of the Subsidiaries an amount pursuant to a
Non-Tax Claim, the Purchaser will and will procure that the
relevant Group member will, if so requested in writing by the
relevant Vendors, assign (at the cost of the relevant Vendors)
to the relevant Vendors all or any assignable rights of action
which the Purchaser or such Group member may have against a
third party in respect of such Non-Tax Claim Provided always
that, save in relation to any right of action which the
Purchaser or a Group member may have against an insurance
policy, the Purchaser shall not be obliged to assign or
procure the assignment of any such rights of action against a
third party, if to do so would be inconsistent with the
commercially reasonable protection of the goodwill of the
Company or of the relevant Group member and provided further
that, prior to any such assignment, the Purchaser or the
relevant Group member is indemnified to its reasonable
satisfaction against any costs, liabilities, charges and
expenses which it may incur which result directly from such
assignment.
4.2 Following any assignments of rights pursuant to paragraph 4.1
above the Purchaser will provide and will procure that each
Group member provides all information and access to all
relevant assets, documents and records within the Purchaser's
Group which is reasonably requested by the Vendors.
5. CONDUCT OF CLAIMS
5.1 If the Purchaser becomes aware of a matter which is reasonably
likely to give rise to a Non-Tax Claim:
5.1.1 the Purchaser shall (or shall procure that the
Company or the Subsidiary concerned shall) as soon as
reasonably practicable give written notice to the
relevant Vendors of the matter and shall to the
extent reasonably practicable consult with the
Vendors with respect to such matter but such notice
and
100
consultation shall not be a condition precedent to
the liability of the relevant Vendors; and
5.1.2 the Purchaser shall not, and shall ensure that no
member of the Purchaser's Group will, admit liability
in respect of, or compromise or settle, the matter
without the prior written consent of the relevant
Vendors (such consent not to be unreasonably withheld
or delayed) and shall provide the relevant Vendors
with such information relating as is reasonably
necessary for the relevant Vendors to give their
informed consent .
5.2 The Purchaser shall use all reasonable endeavours to ensure
that it becomes aware of any matter which becomes known to the
Company or any of the Subsidiaries which is reasonably likely
to give rise to a Non-Tax Claim.
6. MISCELLANEOUS
6.1 Any payment to the Purchaser or the Company or any of the
Subsidiaries in respect of a Claim shall be deemed to be a
reduction of the total consideration payable hereunder for the
Shares.
6.2 The Purchaser shall be obliged to seek recovery under the
Warranties or the Tax Covenant against each and every
Warrantor in the proportions set opposite the name of the
relevant Warrantor in column 5 of schedule 1 so that no single
Warrantor shall in any event be liable hereunder for an amount
or amounts exceeding, in aggregate, an amount equal to that
part of the consideration receivable by such Vendor (and, in
respect of, Xxxxxx Xxxxx Xxxxxx, also that part of the
consideration receivable by the trustees of The XX Xxxxxx 2001
Accumulation and Maintenance Settlement) pursuant to this
agreement which is subject to Claims in accordance with
paragraph 1.1 of schedule 8.
6.3 Payment of any Claim whether under the Warranties or under the
Tax Covenant shall to the extent paid satisfy and discharge
any other Claim which is capable of being made in respect of
the same subject matter and the Purchaser shall at all times
procure that there is no duplication of recovery by the
Purchaser in respect of any Claim or Claims relating to the
same subject matter.
101
6.4 The Purchaser will, and shall ensure that the Company and the
Subsidiaries will take all reasonable care to, preserve all
documents, records, correspondence, accounts and other similar
information relevant to a matter which may give rise to a
Claim, subject to the normal policies of the Purchaser,
Company and the Subsidiaries to retaining such materials.
102
APPENDIX 1
[Omitted]
103
APPENDIX 2
[Omitted]
104
APPENDIX 3
[Omitted]
105
EXECUTED (but not delivered until the date )
hereof) as a deed by Xxxxxx Xxxxx Xxxxxx in the ) /s/ Xxxxxx Xxxxx Xxxxxx
presence of: )
Signature /s/ X.X. Xxxxxx
Name: X.X. Xxxxxx
Occupation: Chartered Accountant
Address: [Omitted]
.....................................
.....................................
EXECUTED (but not delivered until the date )
hereof as a deed by Xxxxxxxx Xxxxxx Xxxxx in the ) /s/ Xxxxxxxx Xxxxxx Xxxxx
presence of: )
Signature /s/ X.X. Xxxxxx
Name: X.X. Xxxxxx
Occupation: Chartered Accountant
Address: [Omitted]
.....................................
.....................................
EXECUTED (but not delivered until the date )
hereof as a deed by Xxxxxxx Xxxx Xxxxxx ) /s/ Xxxxxxx Xxxx Xxxxxx
in the presence of: )
Signature /s/ X.X. Xxxxxx
Name: X.X. Xxxxxx
Occupation: Chartered Accountant
Address: [Omitted]
.....................................
.....................................
106
EXECUTED (but not delivered until the date )
hereof as a deed by Xxxxxx Xxxxx Xxxxxx (as ) /s/ Xxxxxx Xxxxx Xxxxxx
trustee for The XX Xxxxxx 2001 Accumulation and )
Maintenance Settlement) in the presence of: )
)
Signature /s/ X.X. Xxxxxx
Name: X.X. Xxxxxx
Occupation: Chartered Accountant
Address: [Omitted]
.....................................
.....................................
EXECUTED (but not delivered until the date )
hereof) as a deed by Penelope Xxxx Xxxxxxx (as ) /s/ Penelope Xxxx Xxxxxxx
trustee for The XX Xxxxxx 2001 Accumulation and )
Maintenance Settlement) in the presence of: )
)
Signature /s/ X.X. Xxxxxx
Name: X.X. Xxxxxx
Occupation: Chartered Accountant
Address: [Omitted]
.....................................
.....................................
107
EXECUTED (but not delivered until the date )
hereof) as a deed by Xxxxxxxxxxx Xxxxxxx Xxxxx ) /s/ Xxxxxxxxxxx Xxxxxxx Xxxxx
(as trustee for The XX Xxxxxx 2001 Accumulation )
and Maintenance Settlement) in the presence of: )
)
Signature /s/ X.X. Xxxxxx
Name: X.X. Xxxxxx
Occupation: Chartered Accountant
Address: [Omitted]
.....................................
.....................................
EXECUTED (but not delivered until the date )
hereof) as a deed by Stericycle UK, Ltd. acting ) /s/ Xxxxxxx Xxxxxx Xxxxxxxx
by its attorney Xxxxxxx Xxxxxx Xxxxxxxx: )
)
108
