Exhibit 2.1
[LOGO OF XXXXXXX XXXXX XXXXXXXXXXX]
Dated 2003
(1) EFT SERVICES HOLDING B.V.
(2) EURONET WORLDWIDE, INC.
(3) BANK MACHINE (ACQUISITIONS) LIMITED
SHARE ACQUISITION AGREEMENT
RELATING TO
EURONET SERVICES (UK) LIMITED
THIS AGREEMENT is made on 2003
BETWEEN:
(1) EFT SERVICES HOLDING B.V., incorporated in the Netherlands and whose
principal offices are at Officia I, Xx Xxxxxxxxx 0, 0000 XX Xxxxxxxxx, Xxx
Xxxxxxxxxxx (the "Seller");
(2) EURONET WORLDWIDE, INC., incorporated in Delaware, USA with registered
number 04-280688 and whose principal executive offices are at 0000 Xxxxxxx
Xxxxxxxxx, Xxxxxxx, Xxxxxx 00000, XXX (the "Seller's Guarantor"); and
(3) BANK MACHINE (ACQUISITIONS) LIMITED, incorporated in England and Wales with
registered number 04594943 and whose registered office is at Xxxx 0, Xxx
Xxxxxxx, Xxxxxxxxxxxx Xxxx, Xxxxxxxx, Xxxxxxxxxxxxx XX00 0XX (the "Buyer").
INTRODUCTION
(A) The Seller has agreed to sell and the Buyer has agreed to buy the Shares on
the terms and conditions of this Agreement with effect from the Effective
Date; and
(B) The Seller's Guarantor has agreed to guarantee the obligations of the
Seller under this Agreement.
IT IS AGREED as follows:
1. INTERPRETATION
1.1 The following words and expressions where used in this Agreement have the
meanings given to them below:
Accounts the audited financial statements of the
Company, prepared in accordance with the Act
for the accounting reference period ended on
the Accounts Date, a true copy of which
comprise Annexure 1;
Accounts Date 31 December 2001;
Act the Companies Xxx 0000;
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Adjustment the amount (if any) by which the Working
Capital Value differs from the Target Working
Capital Value which shall be expressed as a
negative number if the Working Capital Value
is less than the Target Working Capital Value
and a positive number if the Working Capital
Value is more than the Target Working Capital
Value;
Agreed Bundle the documents listed in the index attached as
Appendix A to the Disclosure Letter;
Agreed Claim any claim against the Seller under this
Agreement (including a claim under the
Warranties) and/or under the Tax Deed which
is agreed in writing by the parties or
finally determined either by a court of
competent jurisdiction or a duly appointed
arbitrator or expert (as the case may be);
Agreement this Agreement, together with its Schedules;
Assumed Leasing Liabilities the liabilities of the Company under the
leases for ATMs set out in Schedule 8 which
are to be retained by the Company at
Completion;
ATM automated teller machine;
ATM Site Agreements agreements that have been entered into on or
prior to the date of this Agreement between
the Company and owners/occupiers of sites
where there are ATMs for occupation by ATMs
of such sites;
2002 Audited Accounts the audited balance sheet of the Company as
at 31 December 2002 and the audited profit
and loss account of the Company for the
period from 1 January 2002 to 31
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December 2002, prepared in accordance with
Schedule 7;
Auditors the auditors of the Company from time to
time;
Business Day any day other than a Saturday, Sunday or
English public or bank holiday;
Buyer's Group Buyer and any subsidiary or affiliate
thereof;
Buyer's Solicitors Xxxxxxx Xxxxx Xxxxxxxxxxx of 00 Xxxx Xxxx,
Xxxxxx XX0X 0XX;
Comfort Letters the letters of even date from each of Xxx
Xxxxxxx, Xxxxxx Xxxxx and Xxxx Xxxxxx to
the Seller in the agreed form.
Company Euronet Services (UK) Limited, brief
details of which are set out in Schedule 1;
Completion completion of the sale and purchase of the
Shares under this Agreement;
Completion Date the date on which Completion occurs;
Confidential Information all information (whether oral or recorded
in any medium) relating to the Company's
business, financial or other affairs
(including future plans of the Company)
which is treated by the Company as
confidential (or is marked as confidential
or is by its nature confidential);
Consideration Retention the sum of (pounds)200,000 to be paid by
the Buyer into one of the Retention
Accounts on Completion;
Consideration Retention the second Business Day after the date on
Release Date which the Working Capital Value is agreed,
deemed agreed or determined (as the case
may be) pursuant to Schedule 7;
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disclosed as defined in clause 5.2;
Disclosure Letter the letter, together with the Agreed
Bundle, dated with today's date from the
Seller to the Buyer containing disclosures
against the Warranties;
Driving Contract the contract relating to ATM transaction
processing in the approved terms to be
entered into at Completion;
Due Diligence Report a legal due diligence report dated on or
about today's date from the Buyer's
Solicitors in the approved terms;
Effective Date 31st December 2002;
Girobank Retention the sum of (pounds)148,750 to be paid by
the Buyer into one of the Retention
Accounts on Completion;
Hardware the computer and data processing systems
used by the Company at the date of this
Agreement (excluding the Software)
including all plant and equipment which may
include embedded software or similar
processing systems;
ICTA 1988 the Income and Corporation Taxes Xxx 0000;
Information Technology the Hardware and Software;
Systems
Initial Consideration the sum of (pounds)15,121,284;
Intellectual Property patents, trade marks, registered designs,
applications for any of the foregoing,
copyright, design rights, database rights
and analogous rights, trade and business
names, rights in confidential information
and know-how howsoever arising and any
rights or interest in any of the foregoing;
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Intra-Group Indebtedness all amounts owed by the Company to any
member of the Retained Group including all
interest thereon in the amount
of (pounds)3,381,841;
Licensed Intellectual Property Intellectual Property owned by third
parties which the Company is permitted to
use or exercise, details of which and the
agreements relating to which are listed in
Schedule 6;
Management Accounts the unaudited management accounts of the
Company for the 11 month period to 30
November 2002, a true copy of which
comprises Annexure 2;
month a calendar month;
Pound or (pounds) UK pound sterling;
Press Release the press release in the approved terms to
be issued at Completion;
Property the leasehold property, brief details of
which are set out in Schedule 5;
Recognised Investment Exchange a recognised investment exchange within the
meaning of Part XVIII of the Financial
Services and Markets Xxx 0000 including
NASDAQ;
Retained Group the Seller, any parent undertaking of the
Seller and any subsidiary undertaking of
the Seller or such parent undertaking from
time to time (including the Seller's
Guarantor but excluding the Company) and
references to "Retained Group Company" and
to "any member of the Retained Group" shall
be construed accordingly;
Retention Accounts two designated interest-bearing deposit
accounts with National Westminster
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Bank plc in the name of the Buyer's
Solicitors and the Seller's Solicitors
relating to the Consideration Retention
(being the "Number 1 Account") and the
Girobank Retention (being the "Number 2
Account");
Retention Account Letters two letters setting out the method of
operation of the Retention Account from the
Buyer and the Seller to the Buyer's
Solicitors and the Seller's Solicitors in
the approved terms;
SEC the Securities and Exchange Commission of
the United States of America;
Seller's Accountants KPMG LLP;
Seller's Solicitors Squire, Xxxxxxx & Xxxxxxx of Xxxxx Xxxxx,
Xxxxxxxxxxxx Xxxxxx, Xxxxxx XX0X 0XX;
Shares the entire issued share capital of the
Company comprising 2,500,000 ordinary
shares of (pounds)1.00 each in the capital
of the Company;
Software all the computer software used by the
Company at the date of this Agreement;
Statement of Working Capital
Value a statement of working capital value based
on the 2002 Audited Accounts and prepared
in accordance with Schedule 7;
Target Working Capital Value negative (pounds)125,000;
Taxation shall have the meaning attributed to
"Taxation" in the Tax Deed and the
expression "for taxation purposes" shall
also have the meaning attributed to it in
the Tax Deed;
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Tax Deed the tax deed in the approved terms to be
entered into at Completion;
TGCA 1992 Taxation of Chargeable Gains Xxx 0000;
Transitional Service Agreement an agreement of even date made between the
Company (1) and the Seller's Guarantor (2)
providing for the provision of certain
services in the approved terms;
Unagreed Claim any claim against the Seller under this
Agreement (including a claim under the
Warranties) and/or the Tax Deed which is
notified by the Buyer to the Seller on or
before the Retention Release Date and which
is not an Agreed Claim;
United Kingdom or U.K. England, Scotland, Wales and Northern
Ireland;
US Dollar or $ the United States dollar;
Warranties the warranties set out in Schedule 3; and
Working Capital Value the difference between certain defined
current assets and certain defined
liabilities of the Company as at the
Effective Date calculated in accordance
with Part III of Schedule 7 all as shown in
the 2002 Audited Accounts and agreed,
deemed or agreed or determined (as the case
may be) pursuant to Schedule 7.
1.2 Unless the context requires otherwise, words and expressions defined in or
having a meaning provided by the Act at today's date shall have the same
meaning in this Agreement. The term "connected with" shall have the meaning
attributed to it at today's date by section 839 ICTA 1988.
1.3 Unless the context requires otherwise, references in this Agreement to:
1.3.1 any of the masculine, feminine and neuter genders shall include
other genders;
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1.3.2 the singular shall include the plural and vice versa;
1.3.3 a "person" shall include a reference to any natural person, body
corporate, unincorporated association, partnership and trust;
1.3.4 "employees" shall be deemed to include consultants, and references
to contracts of employment and to commencement or cessation of
employment shall be deemed to include contracts for consultancy
and commencement or cessation of consultancy;
1.3.5 any statute or statutory provision shall be deemed to include any
instrument, order, regulation or direction made or issued under it
and shall be construed so as to include a reference to the same as
it may have been, or may from time to time be, amended, modified,
consolidated or re-enacted except to the extent that any amendment
or modification made after today's date would increase any
liability or impose any additional obligation under this
Agreement;
1.3.6 any English legal term for any action, remedy, method of judicial
proceeding, legal document, legal status, court, official or any
legal concept or thing shall, in respect of any jurisdiction other
than England, be deemed to include what most nearly approximates
in that jurisdiction to the English legal term; and
1.3.7 any time or date shall be construed as a reference to the time or
date prevailing in England.
1.4 The headings in this Agreement are for convenience only and shall not
affect its meaning. References to a "clause", "Schedule" or "paragraph" are
(unless otherwise stated) to a clause of and Schedule to this Agreement and
to a paragraph of the relevant Schedule. The Schedules form part of this
Agreement and shall have the same force and effect as if expressly set out
in the body of this Agreement.
1.5 A document expressed to be "in the approved terms" means a document, the
terms of which have been approved by the parties and a copy of which has
been identified as such and initialled by or on behalf of each party.
1.6 A document expressed to be an "Annexure" means a document a copy of which
has been identified as such and initialled by or on behalf of each party.
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1.7 In construing this Agreement, general words introduced by the word "other"
shall not be given a restrictive meaning by reason of the fact that they
are preceded by words indicating a particular class of acts, matters or
things and general words shall not be given a restrictive meaning by reason
of the fact that they are followed by particular examples intended to be
embraced by the general words.
2. SALE OF SHARES
2.1 The Seller shall sell (or procure to be sold) and the Buyer shall buy the
Shares on the terms and conditions of this Agreement.
2.2 The Seller shall procure that the Buyer acquires good title to the Shares,
free from all liens, charges, encumbrances and any other third party rights
of any other nature.
2.3 The Buyer shall buy the Shares with effect from and including the
Completion Date to the intent that as from that date all rights,
obligations and advantages accruing to the Shares, including any dividends
or distributions declared, made or paid on the Shares on or after that
date, shall belong to the Buyer. For the avoidance of doubt, the term
"dividends" as used in this Agreement shall not include amounts, if any, of
Intra-Group Indebtedness that are reclassified by any tax authority as
dividends or capital.
2.4 The Buyer shall not be obliged to complete the purchase of any of the
Shares unless the sale of all the Shares is completed simultaneously.
3. CONSIDERATION
3.1 The consideration for the sale of the Shares shall be the sum of the
Initial Consideration and the amount of any Adjustment payable less any
amount retained by the Buyer in respect of the Girobank Retention.
3.2 The provisions of Schedule 7 Parts I and II shall apply for the purpose of
agreeing or determining the amount of any Adjustment.
4. COMPLETION
4.1 Completion shall take place at the offices of the Buyer's Solicitors
immediately after execution of this Agreement.
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4.2 On Completion the Seller and the Buyer shall, each perform their respective
obligations in relation to the sale and purchase of the Shares in
accordance with and as set out in Schedule 2.
4.3 All revenues and expenses of the Company after the Effective Date are for
the benefit of and responsibility of the Buyer.
4.4 Save as contemplated by this Agreement the Seller undertakes to the Buyer
that since the Effective Date, the Company has been operated in the
ordinary course, no distribution of capital or income has been made by the
Company, no share or loan capital or sum in the nature of borrowings or
leasing liability (including interest) have been repaid and no sum has been
paid to any member of the Retained Group other than in respect of ordinary
course trading.
5. WARRANTIES
5.1 The Seller, upon the execution of this Agreement, warrants to the Buyer in
the terms of the Warranties. The Seller acknowledges that the Warranties
are incorporated into this Agreement.
5.2 Each Warranty is given subject only to matters disclosed in the Disclosure
Letter. The provisions of Schedule 4 shall apply to limit liability under
the Warranties as set out in clause 5.8 below. For this purpose, and for
all purposes under this Agreement, the expression "disclosed" means
disclosed in such a manner as is required by English law to make such
disclosure effective.
5.3 Except to the extent that it is disclosed or specifically stated to be
deemed disclosed in the Disclosure Letter, no fact, matter, event or
circumstance of which the Buyer has knowledge (actual or constructive)
shall prejudice any claim made by the Buyer under the Warranties or operate
to reduce any amount recoverable. The Buyer confirms to the Seller that it
is not aware of any matter or thing which based on the Buyer's current
knowledge of such matter or thing could give rise to a claim under the
Warranties.
5.4 The Warranties shall continue in full force and effect notwithstanding
Completion.
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5.5 Each Warranty shall be separate and independent and, save as expressly
provided, shall not be limited by reference to any other Warranty or any
other provision in this Agreement.
5.6 Where any statement in the Warranties is qualified by the expression "to
the best of the knowledge, information and belief of the Seller" or "so far
as the Seller is aware" or any similar expression, the Seller shall be
deemed to have knowledge of anything of which any of Xxxxxxx Xxxxxx, Xxxxxx
Diemko, Xxx Xxxxxxx, Xxxxxx Xxxxx and Xxxx Xxxxxx has actual knowledge.
5.7 The Seller confirms to the Buyer that it has made due and careful enquiry
(including, without limitation, due and careful enquiry of Xxxxxxx Xxxxxx,
Xxxxxx Diemko, Xxx Xxxxxxx, Xxxxxx Xxxxx and Xxxx Xxxxxx to establish the
truth of each Warranty and the Seller agrees to disclose to the Buyer in
writing, immediately upon its becoming aware of the same, full details of
any fact or circumstance which renders or might render untrue or misleading
any Warranty.
5.8 Any claim under the Warranties shall be limited in accordance with the
provisions of Schedule 4 provided that none of the provisions in Schedule 4
shall apply if the Seller fraudulently, dishonestly, or deliberately makes
or omits to make a disclosure in the Disclosure Letter in such a way as to
render the relevant Warranties (when read with the Disclosure Letter)
untrue or misleading.
5.9 The Seller agrees with the Buyer:
5.9.1 that save as agreed in the Comfort Letters the giving by the Company
and/or any of its officers, employees, agents or advisers (past or
present) to the Seller or its agents or advisers (past or present)
of any information or opinion in connection with the Warranties or
the Tax Deed or the Disclosure Letter or otherwise in relation to
the business or affairs of the Company or in connection with the
negotiation and preparation of this Agreement, the Tax Deed or the
Disclosure Letter shall not be deemed to be a representation,
warranty or guarantee to the Seller of the accuracy of such
information or opinion;
5.9.2 save as agreed in the Comfort Letters to waive any right or claim
which it may have against the Company and/or any of its
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officers, employees, agents or advisers for any error, omission or
misrepresentation in any such information or opinion; and
5.9.3 that any such right or claim shall not constitute a defence to any
claim by the Buyer under or in relation to this Agreement (including
the Warranties) or the Tax Deed.
6. PROTECTION OF GOODWILL
6.1 The Seller undertakes to the Buyer to procure that:
6.1.1 no member of the Retained Group shall for a period of 12 months
following Completion, enter into or perform (either directly or
indirectly) any agreement with a bank or building society in the
United Kingdom under which it provides ATM management or operation
services with respect to less than 75 ATM locations. It shall not be
a violation of this provision for any member of the Retained Group
to provide ATM management and operation services to independent
owners/operators of ATMs (including, without limitation, Moneybox
and TRM) or to banks or building societies when Euronet's agreement
with such bank or building society covers more than 75 ATM locations
which are operational at the date the agreement is entered into; and
6.1.2 no member of the Retained Group shall for a period of 36 months
following Completion, engage in any "Independent ATM Network
Business," as defined below, in the United Kingdom. In this
Agreement "Independent ATM Network Business" shall mean owning and
commercially exploiting off-branch ATMs. The ownership and
commercial exploitation of ATMs under, or as a result of, any
agreement for outsourced ATM management or operation services
between any member of the Retained Group and a bank, building
society or independent owner/operator of ATMs which is not
prohibited by 6.1.1 above shall not fall within the definition of
Independent ATM Network Business.
6.2 The Seller acknowledges that the Company is in a position to provide many
of the services required locally in the United Kingdom ("Local Services")
by the Retained Group to provide ATM services to banks and building
societies in the United Kingdom ("Euronet UK Customers"). The Company shall
for a period of 36 months following Completion be offered the right to
match
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competitive quotes offered to the Retained Group for the provision of
Local Services under contracts to be entered into with Euronet UK
Customers, and if the Company is able to match such quotes the Company
shall be selected as the provider of Local Services. For the purposes of
the previous sentence, the Company shall be considered to have matched a
competitive quote if it is able to provide (utilising its resources in
existence at the time the competitive quote is notified to it) the full
range of services proposed to be provided by the other potential
provider, in accordance with performance and technical standards that are
at least as high as those offered, and at prices that are as favourable,
taking into account any and all discounts or other elements of
consideration being offered by the other providers to Euronet. This
agreement shall not apply to any Local Services if the Retained Group
provides such Local Services through its own group employees nor shall it
apply if any member of the Retained Group proposes to enter into an
arrangement or obtain Local Services from any other provider if such
arrangement is required for any reason by a Euronet UK Customer as part
of an arms length negotiation. In addition this provision shall not apply
to any commercial agreement to be entered into with a manufacturer of
ATMs where such agreement includes the sale of hardware or software. The
following additional provision apply with respect to this clause 6.2:
6.2.1 Within 5 days of receiving the quote, the relevant member of the
Retained Group will give the Company written notice under Section
6.2 that it has received a competitive quote negotiated at arms
length to obtain Local Services from a provider in the UK, and
the Company shall have a period of 15 days, within which to
confirm that it is interested in providing such Local Services
and provide the relevant member of the Retained Group with a
matching quote. If the Company does not provide the relevant
member of the Retained Group with such response within 15 days,
the relevant member of the Retained Group may consider that the
Company cannot or is not willing to match such competitive quote.
6.2.2 During the conduct of the procedures set forth in Section 6.2 and
for a period of 12 months thereafter, the Company shall not and
shall procure that none of the Buyer's Group nor Bridgepoint
Capital Limited nor any of its subsidiaries or affiliates shall
approach any of the Retained Group's proposed commercial partners
in the transaction underlying any notice given by the relevant
member of the Retained Group to the Company
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hereunder in connection with such transactions.
6.3 The Seller undertakes to the Buyer that it will not, directly or
indirectly:
6.3.1 at any time prior to or during the period of 36 months from the
Completion Date, solicit the custom of or deal with any bank or
building society in the United Kingdom with which the Company
had, prior to the Completion Date provided or prepared to provide
ATM management or operation services with respect to less than 75
ATM locations or any such bank or building society who had any
dealings with the Company at any time during the period of 18
months prior to the Completion Date so as to compete with, or
harm the goodwill of, the Company;
6.3.2 at any time prior to or during the period of 36 months from the
Completion Date, interfere or endeavour to interfere with the
continuance of supplies to the Company (or the terms relating to
those supplies) by any person who at any time during the period
of 18 months prior to the Completion Date was a supplier of any
goods or services to the Company; or
6.3.3 at any time prior to or during the period of 36 months from the
Completion Date, solicit or entice away, or endeavour to solicit
or entice away, from the Company any person who was at the
Completion Date, or who at any time during the period of 18
months prior to the Completion Date had been, a senior employee
of the Company whether or not such person would commit a breach
of his employment contract by reason of leaving service, save
that this clause shall not apply to any employee employed by the
Company in a non-managerial or non-technical or purely
administrative role.
6.4 Nothing contained in clause 6.1, 6.2 or 6.3 shall prevent the Seller from
holding by way of bona fide personal investment any units of any
authorised unit trust and from being the holder or beneficial owner of
any class of securities in any company if such class of securities is
listed, or dealt in, on a Recognised Investment Exchange provided that it
neither holds nor is beneficially interested in more than a total of 1%
of any single class of the securities in that company.
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6.5 Each of the undertakings contained in clauses 6.1, 6.2 and 6.4 is a
separate undertaking by the Seller and shall be enforceable by the Buyer
separately and independently of its right to enforce any one or more of
the other covenants contained in clauses 6.1, 6.2 and 6.4. If any such
undertaking shall be found to be void but would be valid if some part
were deleted, then such undertaking shall apply with such deletions as
may be necessary to make it valid and enforceable.
6.6 For the purposes of clauses 6.1, 6.2 and 6.4, "directly or indirectly"
shall (without limiting the expression) mean the Seller acting either
alone or jointly with or on behalf of any other person whether as
principal, partner, manager, employee, contractor, director, consultant,
investor (subject to clause 6.4) or otherwise.
7. CONFIDENTIALITY
The Seller shall (and shall procure that each other member of the Retained Group
shall) in all respects keep confidential and not at any time disclose or make
known in any other way to anyone whomsoever or use for its own or any other
person's benefit or to the detriment of the Company any Confidential
Information, provided that:
7.1 such obligation shall not apply to information which becomes generally
known (other than through a breach by the Seller of this clause);
7.2 the Seller shall be entitled at all times to disclose such information as
may be required by law or by any competent judicial or regulatory
authority including the SEC, or by any Recognised Investment Exchange
(provided that, so far as practicable, the Seller shall consult with the
Buyer prior to making such disclosure); and
7.3 the Seller shall be entitled to disclose to its officers, employees,
agents or advisers such information as may be necessary to enable them to
carry out their duties (conditional upon any such person being informed
of the confidential nature of such information and agreeing to keep such
information confidential for as long as the Seller is obliged to do so in
accordance with this clause).
8. ANNOUNCEMENTS
8.1 The:-
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8.1.1 Seller shall not (and shall procure that each other member of the
Retained Group shall not), without the consent of the Buyer; and
8.1.2 Buyer shall not, without the consent of the Seller,
issue any press release or publish any circular to shareholders or any
other document or make any public statement or otherwise make any
disclosure to any person who is not a party to this Agreement, before or
after Completion, relating to any of the matters provided for or referred
to in this Agreement or any ancillary matter.
This clause shall not prohibit any announcement which is in substantially
the same form as the Press Release (provided that the factual situation
in existence at the time of such announcement is not different to that in
existence at the time of Completion) or any announcement or disclosure
required by law or by any competent judicial or regulatory authority
including the SEC, or by any Recognised Investment Exchange (in which
case the parties shall co-operate, in good faith, in order to agree the
content of any such announcement so far as practicable prior to it being
made).
8.2 Nothing in clause 8.1 shall restrict:
8.2.1 the Buyer or the Company from informing customers or suppliers of
the acquisition of the Company by the Buyer after Completion; and
8.2.2 any party from making any disclosure to any of its officers,
employees, agents or advisers who are required to receive such
disclosure to carry out their duties (conditional upon any such
person being informed of the confidential nature of such
information and agreeing to keep such information confidential
for as long as the disclosing party is obliged to do so in
accordance with this clause).
9. COSTS
9.1 Save as provided in this clause 9 each party shall pay its own costs and
expenses incurred in connection with the preparation, negotiation and
completion or termination of this Agreement.
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9.2 The Seller agrees that none of such costs and expenses have been nor will
prior to Completion be borne by the Company.
9.3 The Seller shall pay all costs charged by the Seller's Accountants in
connection with the preparation of the 2002 Audited Accounts or otherwise
relating to the Company which are invoiced after the Effective Date.
10. POST-COMPLETION ARRANGEMENTS
Records
10.1 Following Completion, the Seller shall procure that all records, papers,
documents and data (in whatever form they may exist) in the possession,
custody or control of, or kept or made by or on behalf of any member of
the Retained Group relating to any matters which include the business or
affairs of the Company and all rights in such records, papers, documents
and data shall to the extent that such records, papers, documents and
data do not relate to any member of the Retained Group, be deemed to be
the property of, and shall be held on trust for, the Company and any such
items shall be delivered or made available to the Company immediately
upon request by the Buyer. Notwithstanding the previous sentence, the
Seller may retain back-up copies of any and all data, accounting records,
tax returns or other documentation relating to the Company's business and
financial affairs as it considers appropriate.
10.2 The Buyer shall give to the Seller access to all books records, papers,
documents and data relating to the Company before Completion (at
reasonable times and on reasonable notice) if required by any member of
the Retained Group.
10.3 To the extent that such records, papers, documents and data also relate
to any member of the Retained Group, the Seller shall procure that they
be maintained in accordance with law and regulation and preserved and the
information in such records, papers, documents and data relating to the
business or affairs of the Company shall be made available (at reasonable
times and on reasonable notice) to the Buyer or any of its officers,
employees, agents or advisers.
Assignment of benefits
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10.4 Except as otherwise agreed to the contrary between the parties following
Completion, the Seller shall procure (subject to being indemnified by the
Buyer for any associated costs) that the benefit of the whole or any part
of any agreement or arrangement (including any licences, consents or
Intellectual Property rights) which relates exclusively to the business
of the Company but which is owned by any member of the Retained Group is
assigned to the Company promptly upon request by the Buyer and, pending
any such assignment (or in any case where the benefit of any such
agreement or arrangement cannot lawfully be assigned to, or (for whatever
reason) enforced by, the Company), any such benefit shall be deemed to be
the property of the Company and shall be held on trust by the Seller
subject to the Seller being satisfactorily indemnified for any
liabilities it may incur as a result of actions taken at the request of
the Buyer.
Seller covenants
10.5 Following Completion, the Seller shall take all steps as may reasonably
be required by the Buyer and/or the Company to ensure that, following
Completion, the Company shall obtain the full benefit of any interest in
any of the insurance arrangements for such company which have ever been
arranged by any member of the Retained Group prior to Completion.
Licence of name
10.6 The Seller agrees with the Buyer that the Buyer shall have the right
until the earlier of:-
10.6.1 12 months from the Completion Date; and
10.6.2 the date when all stickers bearing the "Euronet" name have been
removed from all ATM's,
but not after such date to use the name "Euronet" on its ATMs or
otherwise and shall indemnify and hold harmless the Retained Group
against any liability arising from such use. The Buyer agrees to carry
out a proper programme for removing the name "Euronet" on a phased basis
during such period.
10.7 The Buyer agrees that it will not change its name to (or incorporate a
subsidiary that changes its name to) anything incorporating the name
"Euronet" or any confusingly similar name and will procure that within 20
18
Business Days following Completion, the Company will change its company
name to a name not including the word "Euronet".
19
Girobank Retention
10.8.1 When final determination or agreement is reached with Girobank that
an amount (if any) was owed to it as at the Effective Date in respect
of cash supplied by it for use in the ATMs then the amount of such
sum shall be paid to the Buyer from the Girobank Retention Account
and the balance paid to the Seller along with all interest accrued on
the Girobank Retention Account. Such payments shall be made within 2
Business Days of the amount being finally determined.
10.8.2 If no final agreement or determination as contemplated in 10.8.1
above has been made by 30th September 2003, all monies in the
Girobank Retention Account plus accrued interest shall be paid to the
Seller within 2 Business Days.
10.8.3 The Buyer undertakes to procure that the Company uses its best
endeavours to ensure that any amount payable to Girobank is as low as
possible and to pursue all reasonable remedies it may have against
Girobank, Securicor or any other third party (including any
insurers). The Buyer further agrees to keep the Seller fully informed
of all negotiations and correspondence in respect of any amount that
may be claimed from the Girobank Retention Account including
providing the Seller with copies of such correspondence, details of
meetings or telephone conversations as it may reasonably request.
Intra-Group Interest
10.9 The Company agrees to retain sufficient funds to pay all interest
outstanding on the Intra Group Indebtedness as at Completion being
(pounds)477,402. Such interest shall be paid by the Company to the
relevant member of the Retained Group within 5 Business Days of the
Company receiving written authorisation from the Financial
Intermediaries and Claim Office (International) of the Inland Revenue
(FICO) for the Company to pay such interest without deduction of
United Kingdom tax (a "Certificate"). The Seller may demand repayment
of such sum net of all taxation required to be deducted by the
Company at any time in the absence of a Certificate with the amount
of such deduction to be paid within 5 Business Days of the Company
receiving appropriate written authorisation from FICO that the amount
of such deduction may be paid by the Company.
Working Capital Value
20
10.10 In the event that the Working Capital Value exceeds the Target Working
Capital Value by more than (pounds)30,000 then the whole amount of such
excess up to a maximum of (pounds)250,000 shall be paid by the Buyer to
the Seller within 2 Business Days of the date on which the Working
Capital Value is agreed deemed or determined (as the case may be)
pursuant to Schedule 7).
Xxxxxx Indemnity
10.11 The Seller hereby unconditionally and irrevocably agrees, as a continuing
obligation to indemnify the Buyer against, and to pay on demand an amount
equal to any loss which the Buyer or the Company may reasonably incur at
any time in respect of the employment by the Company of Xx Xxxxxxx
Xxxxxx.
ATM Insurance Claims
10.12 The Company is currently owed (pounds)31,363 by its insurers in respect
of ATM insurance claims. To the extent such sum is not received within 20
Business Days of Completion the Seller agrees to pay such outstanding
sums to the Company. The Buyer agrees to procure that the Company will
repay any such sum received from the Seller to the extent it subsequently
receives such sum from the insurers.
Coopamat
10.13 The Seller agrees to procure the discharge of all obligations and
liabilities to Coopamat in respect of the ATMs for which EFT Services
(Holdings) SAS has invoiced the Company (and will be paid by the Company
to EFT Services (France) SAS at Completion in an amount equal to
(pounds)231,875) as soon as possible after Completion.
No Set Off
10.14 The Buyer agrees that it will not set-off any amounts against the
payments that may become due to the Seller under clauses 10.8, 10.9 or
10.10.
Auditors
10.15 The Buyer agrees to procure that the Seller's Accountants will be
appointed as auditors of the Company for the purpose of preparing and
auditing the 2002 Audited Accounts.
21
11. CAPACITY AND SHARES
11.1 Each party warrants to each other party that it has power and authority
and has obtained all necessary consents to enter into and perform the
obligations expressed to be assumed by it under this Agreement (and any
other agreement or arrangement required to be entered into by it in
connection with this Agreement), that the obligations expressed to be
assumed by it under this Agreement are legal, valid and binding and
enforceable against it in accordance with their terms and that the
execution, delivery and performance by it of this Agreement and each such
other agreement and arrangement will not:
11.1.1 result in a breach of, or constitute a default under, any
agreement or arrangement to which it is a party or by which it is
bound or under its constitutive documents; or
11.1.2 result in a breach of any law or order, judgment or decree of any
court, governmental agency or regulatory body to which it is a
party or by which it is bound.
11.2 The Seller warrants to the Buyer that:
11.2.1 the Shares are legally and beneficially owned by it and are free
from all liens, charges and encumbrances or interests in favour
of or claims made by or which could be made by any other person
and such Shares are fully paid, have been properly and validly
allotted and represent the entire allotted and issued share
capital of the Company; and
11.2.2 other than this Agreement, there is no agreement, arrangement or
obligation requiring the creation, allotment, issue, sale,
transfer, redemption or repayment of, or the grant to a person of
the right (conditional or not) to require the allotment, issue,
sale, transfer, redemption or repayment of, any share in the
capital of the Company (including an option or right of
pre-emption or conversion).
12. INDEMNITIES AND GUARANTEE
Indemnities
22
12.1 The Seller unconditionally and irrevocably agrees, as a continuing
obligation, to indemnify the Buyer against, and to pay on demand an
amount equal to, any loss which the Buyer or the Company may reasonably
incur at any time or from time to time (whether by way of damages,
settlement or otherwise) and all costs and reasonable expenses (including
reasonable legal fees and together with any applicable VAT) in respect of
or as a result of any breach of clause 11.2.
Guarantee
12.2 The Seller's Guarantor hereby unconditionally and irrevocably undertakes
to the Buyer:
12.2.1 to procure that the Seller and/or any other member of the
Retained Group duly and punctually performs and discharges all
its obligations (the "Obligations") under this Agreement and any
other agreement or arrangement required to be entered into by it
and/or any other member of the Retained Group in connection with
this Agreement (together the "Relevant Agreements"); and
12.2.2 without prejudice to the generality of clause 12.2.1, and as
principal obligor, to guarantee the due and punctual payment of
any and all sums now and subsequently payable (the "Sums
Payable") by the Seller and/or any other member of the Retained
Group arising out of or in connection with the Relevant
Agreements when the same shall become due and the Sellers
Guarantor shall pay such sums upon demand.
12.3 The obligations assumed by the Seller's Guarantor in clause 12.2
constitute a continuing security which shall not be capable of being
determined by notice and shall remain in force until all of the
obligations of the Seller under this Agreement have been fully performed
and discharged and all the Sums Payable have been fully paid. Where any
discharge (whether in respect of the obligations of the Seller or any
security for those obligations or otherwise) is made in whole or in part,
or any arrangement is made on the faith of any payment, security or other
disposition, which is avoided, or must be restored, on insolvency,
liquidation or otherwise (without limitation), the liability of the
Seller's Guarantor under this clause 12 shall continue as if the
discharge or arrangement had not occurred.
23
12.4 Neither the obligations of the Seller's Guarantor nor the rights and
remedies of the Buyer under clause 12.2 or otherwise conferred by law
shall be discharged, prejudiced or impaired by reason of:
12.4.1 any amendment to any of the Relevant Agreements or any variation
of any of the Obligations;
12.4.2 any incapacity or lack of powers, authority or legal personality
of, or dissolution or change in the members or status or
constitution of, the Seller, the Seller's Guarantor, the Buyer or
any other person or the acquisition of all or part of the
undertaking of the Buyer, the Seller, the Seller's Guarantor or
any other person by another person;
12.4.3 any of the Obligations being or becoming invalid, illegal, void
or unenforceable for any reason;
12.4.4 any time or indulgence given or agreed to be given in respect of
any of the Obligations;
12.4.5 any postponement, discharge, reduction, non-provability or other
similar circumstance affecting any of the Obligations and/or the
Sums Payable resulting (a) from the making of any composition or
arrangement by the Seller with its creditors or (b) from any
insolvency, liquidation or dissolution proceedings or (c) from
any law, regulation or order. In each such case (a) every
reference to the Obligations and the Sums Payable shall, for the
purposes of the liabilities of the Seller's Guarantor under this
clause 12, be construed as if there were no such circumstance and
(b) where such case involves the making of any such compromise or
arrangement and any part of the Obligations are transferred to
any other person, the provisions of clauses 12.2 to 12.5 shall,
in addition, be construed as if the expression "Seller" included
such other person.
12.4.6 any other act, event or omission which, but for this provision,
would or might operate to offer any legal or equitable defence
for or impair or discharge the Seller's Guarantor's obligations
under clauses 12.2 to 12.5 or prejudicially affect the rights or
remedies of the Buyer under clauses 12.2 to 12.5 or otherwise
conferred by law.
24
12.5 The Buyer may enforce the obligations of the Seller's Guarantor under
clauses 12.2 to 12.4 without first taking any steps or proceedings
against the Seller or any other member of the Retained Group.
12.6 The guarantee contained in clauses 12.2 to 12.5 is in addition to and is
not in any way prejudiced by any other security now or subsequently held
by the Buyer.
12.7 Until all of the Obligations of the Seller under this Agreement have been
fully performed and discharged and all the Sums Payable have been
irrevocably been paid in full, the Seller's Guarantor shall not, after a
claim has been made or by virtue of any payment or performance by it
under this clause 12;
12.7.1 be subrogated to any rights, security or monies held, received or
receivable by the Buyer (or any person on its behalf) or be
entitled to any right of contribution or indemnity in respect of
any payment made or monies received on account of the Seller's
Guarantor's liability under this clause 12;
12.7.2 claim, rank, prove or vote as a creditor of the Seller in
competition with the Buyer (or any person on its behalf);
12.7.3 receive, claim or have the benefit of any payment, distribution
or security from or on account of the Seller or exercise any
rights of set-off against the Seller, unless the Buyer otherwise
directs.
The Seller's Guarantor shall hold in trust and as soon as reasonably
practicable pay or transfer to the Buyer any payment or distribution or
benefit of the security received by it contrary to this clause 12.
13. APPLICABLE LAW AND JURISDICTION
13.1 This Agreement and the rights and obligations of the parties shall be
governed by and construed in accordance with the laws of England.
13.2 The parties irrevocably submit to the non-exclusive jurisdiction of the
courts of England and Wales in respect of any claim, dispute or
difference arising out of or in connection with this Agreement, provided
that nothing contained
25
in this clause shall be taken to have limited the right of the Buyer to
proceed in the courts of any other competent jurisdiction.
14. GENERAL
Entire agreement
14.1 This Agreement (together with any documents referred to in this Agreement
or required to be entered into pursuant to this Agreement) contains the
entire agreement and understanding of the parties and supersedes all
prior agreements, understandings or arrangements (both oral and written)
relating to the subject matter of this Agreement and any such document.
Variations and waivers
14.2 No variation of this Agreement shall be effective unless made in writing
signed by or on behalf of all the parties and expressed to be such a
variation.
14.3 No failure or delay by the Buyer or time or indulgence given in
exercising any remedy or right under or in relation to this Agreement
shall operate as a waiver of the same nor shall any single or partial
exercise of any remedy or right preclude any further exercise of the same
or the exercise of any other remedy or right.
14.4 No waiver by any party of any requirement of this Agreement, or of any
remedy or right under this Agreement, shall have effect unless given in
writing and signed by such party. No waiver of any particular breach of
the provisions of this Agreement shall operate as a waiver of any
repetition of such breach.
14.5 Any, waiver, release or compromise or any other arrangement of any kind
whatsoever which the Buyer gives or enters into with any other party in
connection with this Agreement shall not affect any right or remedy of
the Buyer as regards any other parties or the liabilities of any other
such parties under or in relation to this Agreement.
Assignment
14.6 Subject to clause 14.7, no party shall be entitled to assign, transfer or
create any trust in respect of the benefit or burden of any provision of
this
26
Agreement (or any of the documents referred to in this Agreement) without
the prior written consent of each other party.
14.7 All or any of the Buyer's rights under this Agreement (including, without
limitation, in respect of Warranties) or any of the documents which are
referred to in this Agreement and to which the Seller is a party may
(notwithstanding any other provisions contained in this Agreement or such
other documents) be assigned or transferred by the Buyer to or in favour
of any person by way of security for borrowings of the Buyer or by any
liquidator, administrator or receiver of the Buyer or by any other person
entitled to enforce such security.
Effect of Completion
14.8 The provisions of this Agreement, insofar as the same shall not have been
fully performed at Completion, shall remain in full force and effect
notwithstanding Completion.
Counterparts
14.9 This Agreement may be executed as two or more counterparts and execution
by each of the parties of any one of such counterparts will constitute
due execution of this Agreement.
Further assurance
14.10 Each party shall, and shall use all reasonable endeavours to procure that
any necessary third party shall, do and execute and perform all such
further deeds, documents, assurances, acts and things as may reasonably
be required to give effect to this Agreement.
Other remedies
14.11 Any remedy or right conferred upon the Buyer and the Seller in this
Agreement for breach of this Agreement shall be in addition to and
without prejudice to all other rights and remedies available to them.
No set-off
14.12 All payments to be made arising out of or in connection with this
Agreement (or any other agreement or arrangement required to be entered
into by it in
27
connection with this Agreement) shall be made in full, without set-off or
counterclaim and without any deduction whatsoever except to the extent
required by law.
Default interest
14.13 If any amount required to be paid under this Agreement (or any other
agreement or arrangement required to be entered into by it in connection
with this Agreement) is not paid when it is due, such amount shall bear
interest at the rate of four % per annum over the base lending rate of
Royal Bank of Scotland plc from time to time, calculated on a daily basis
for the period from the relevant due date for payment up to and including
the date of actual payment, as well after as before any judgment.
15. NOTICES
Address for service
15.1 Any notice shall be in writing and signed by or on behalf of the person
giving it. Except in the case of personal service, any notice shall be
sent or delivered to the party to be served at the address set out at the
front of this Agreement (marked: "for the attention of the Company
Secretary").
Method of service
15.2 Service of a notice must be effected by one of the following methods:
15.2.1 in person on a director or the secretary and shall be treated as
served at the time of such service;
15.2.2 by prepaid first class post (or by airmail if from one country to
another) and shall be treated as served on the second (or if by
airmail the fourth) Business Day after the date of posting. In
proving service it shall be sufficient to prove that the envelope
containing the notice was correctly addressed, postage paid and
posted; or
15.2.3 by delivery of the notice through the letterbox of the party to
be served and shall be treated as served on the first Business
Day after the date of such delivery.
28
Change of details
15.3 A party may notify any other party of a change to the details referred to
in clause 15.1 provided that such notification is made in accordance with
clause 15.2 and shall only become effective on the date falling five
Business Days after service of such notice (or, if later, on the date
specified in such notice).
Agent for service
15.4 The Seller irrevocably authorises and appoints the Seller's Solicitors
(or the firm which at the time in question has succeeded to it and
carries on its practice) as its agent for service of notices and/or
proceedings in relation to any matter arising out of or in connection
with this Agreement and service on such agent shall be deemed to be
service on the Seller.
15.5 Any notice or proceeding served on the Seller by service on its agent
shall be marked for the attention of Xxxxxxx X Xxxxxx / Xxxxxx
Xxxxx-Xxxxxxxxx.
THIS AGREEMENT has been duly executed and delivered as a deed on the date first
stated above.
29
SCHEDULE 1
THE COMPANY
Incorporated: 30 July 1998
Registered in England under No.: 03610221
Registered Office: 00 Xxxxxxx Xxxxxxx,
Xxxxxx XX0X 0XX
Authorised Share Capital: (pounds)2,500,000
comprising 2,500,000 ordinary shares of
(pounds)1.00 each
Issued Share Capital: (pounds)2,500,000
comprising 2,500,000 ordinary shares of
(pounds)1.00 each held by the Seller
Directors: Xxxxxx Xxxxxx Xxxxxxx
Xxxxxx Xxxxx
Secretary: Sisec Limited
Auditors: KPMG LLP
Accounting Reference Date: 31 December
Charges: Rent deposit deed in favour of Bayford
Properties Limited, created on 8 June 2001.
30
SCHEDULE 2
COMPLETION OBLIGATIONS
PART I
OBLIGATIONS OF THE SELLER
1. DELIVERY OBLIGATIONS
The Seller shall deliver, or (if the Buyer shall so agree) make available, to
the Buyer:
Share transfers, statutory books etc.
1.1 executed transfers of the Shares by the registered holders in favour of
the Buyer (or persons nominated by the Buyer), the share certificates or
indemnities for lost share certificates in a form satisfactory to the
Buyer if the share certificates cannot be located and any additional
documentation necessary to establish the transferor's title to the Shares
and to allow the transferee(s) (subject to due stamping) to be registered
in the register of members of the Company as holder(s) of the Shares;
1.2 a certified copy of any power of attorney under which this Agreement or
any of the transfers or other documents referred to in this Schedule is
executed by the Seller or any member of the Retained Group and evidence
(to the Buyer's satisfaction) of the authority of any person signing on
behalf of the Seller or any corporate entity which is part of the
Retained Group;
1.3 the certificate of incorporation and all certificates of incorporation on
change of name, the common seal (if any), the statutory books and other
record books of the Company written up to Completion;
1.4 powers of attorney in the approved terms in respect of the rights
attaching to the Shares executed by each registered holder of the Shares;
Resignations
1.5 resignation letters in the approved terms executed as deeds by the
directors and the company secretary of the Company (other than Xxx
Xxxxxxx) and all
31
property of the Company in the possession or under the control of such
persons;
1.6 a copy of an unqualified letter of resignation from the auditors of the
Company in the form prescribed by section 394 of the Act and confirming
that such auditors have no claims for loss of office, unpaid fees or
expenses or otherwise (the original of such letter to be deposited by the
Seller at the registered office of the relevant company);
Other documents in the approved terms etc.
1.7 the Tax Deed executed by the Seller;
1.8 the Driving Contract, Transitional Services Agreement and Retention
Account Letters executed by the Seller;
1.9 foreign legal opinions in the approved terms confirming, among other
things, that the Seller and the Seller's Guarantor have full power and
authority to enter into and perform this Agreement (and any other
agreement or arrangement required to be entered into by it in connection
with this Agreement);
Miscellaneous
1.10 complete and up-to-date copies of any current original insurance policies
which have ever been arranged by the any member of the Retained Group
which cover, on an "occurrence" basis, the Company;
2. PROCUREMENT OBLIGATIONS
The Seller agrees with the Buyer to procure that at Completion:
Indebtedness
2.1 all indebtedness owed by the Company to any person whatsoever has been
repaid (other than the Intra-Group Indebtedness or Assumed Leasing
Liabilities or any indebtedness incurred in the ordinary and normal
course of trading which is to be repaid in accordance with existing
arrangements) whether or not such indebtedness is due for repayment;
32
2.2 all indebtedness owing to the Company by any member of the Retained Group
(other than indebtedness incurred in the ordinary and normal course of
trading which is to be repaid in accordance with existing arrangements)
or by the directors of the Company or any member of the Retained Group
has been repaid whether or not such indebtedness is due for repayment;
Guarantees etc
2.3 the Company is released from any guarantee, security, indemnity, bond,
letter of comfort or other similar obligation given or incurred by it
which relates in whole or in part to debts or other liabilities or
obligations (whether actual or contingent) of any other person;
Board resolutions
2.4 (with the co-operation of the Buyer) board resolutions, in the approved
terms, of the Company are passed (prior to the taking effect of the
resignations referred to in paragraph 1.5 above):
2.4.1 sanctioning for registration (subject, where necessary, to due
stamping) the transfers in respect of the Shares;
2.4.2 appointing Xxxxxx Xxxxx and Xxxx Xxxxxx as directors and Pinsent
Xxxxxx Xxxxxx Company Services Limited as secretary of the
Company and accepting the resignations of the directors and
secretary referred to above;
2.4.3 changing the registered office of the Company to Xxxx 0, Xxx
Xxxxxxx, Xxxxxxxxxxxx Xxxx, Xxxxxxxx, Xxxxxxxxxxxxx XX00 0XX;
2.4.4 appointing Deloitte & Touche as auditors to the Company; and
Miscellaneous
2.5 to the extent that the Buyer so requires at Completion, the provisions of
clause 10.1 regarding the records, papers, documents and data of the
Company are complied with.
33
PART II
OBLIGATIONS OF THE BUYER
1. The Buyer shall, conditionally upon the satisfaction of the obligations
set out in Part I of this Schedule:
1.1 arrange for the telegraphic transfer by CHAPS of an amount equal to the
Initial Consideration less the Consideration Retention and the Girobank
Retention to the Seller's Solicitors account at Barclays Bank plc to such
sort code and account number as shall be notified by the Seller's
Solicitors to the Buyer's Solicitors prior to Completion, receipt of
which shall discharge the Buyer from its obligation to pay such amount of
the consideration under this Agreement to the Seller;
1.2 arrange for the payment of the Consideration Retention and the Girobank
Retention into the Retention Accounts;
1.3 procure that the Company pays to the relevant member of the Retained
Group (pounds)2,904,439 being the amount required to repay the capital
outstanding on the Intra-Group Indebtedness;
1.4 deliver to the Seller's Solicitors a counterpart of each of the Tax Deed,
the Driving Contract, the Transitional Services Agreement and the
Retention Letters executed by the Buyer;
1.5 deliver to the Seller's Solicitors a certified copy of a board resolution
of the Buyer authorising the execution and performance by the Buyer of
its obligations under this Agreement and each of the documents to be
executed by the Buyer pursuant to this Agreement.
` 34
SCHEDULE 3
WARRANTIES
I Disclosed information
II Constitution
III Accounts
IV Assets
V Liabilities
VI Trading arrangements
VII Effect of sale
VIII Compliance and litigation
IX Insolvency
X Intellectual property
XI Information Technology
XII Data Protection
XIII Officers and employees
XIV Pensions
XV Property
XVI Tax
35
PART I
DISCLOSED INFORMATION
1. SCHEDULES
The facts stated in Schedules 1 and 6 are correct.
2. INFORMATION
The factual information regarding the Company contained in the Due
Diligence Report is true and accurate and there is no other matter, fact
or circumstance which renders any of such factual information misleading.
36
PART II
CONSTITUTION
1. MEMORANDUM AND ARTICLES OF ASSOCIATION
The copy of the memorandum and articles of association of the Company
annexed to the Disclosure Letter is true and complete and has embodied in
it or annexed to it a copy of every such resolution or agreement as is
referred to in section 380 of the Act and sets out in full the rights and
restrictions attaching to the share capital of the Company.
2. REGISTER OF MEMBERS
The register of members of the Company has been properly kept and
contains true and complete records of the members of the Company and the
Company has not received any notice or allegation that the register is
incorrect or incomplete or should be rectified.
3. STATUTORY BOOKS
The statutory books and minute books of the Company are in its possession
and have been properly kept in accordance with the law and the Company
has not received any notice or allegation that any of them is incorrect
or incomplete or should be rectified.
4. SEAL
The common seal of the Company is in its possession and is the only seal
authorised for use by the Company.
5. FILINGS
All resolutions, annual returns and other documents required to be
delivered by the Company to the Registrar of Companies or to any other
governmental or regulatory body or to any local authority have been filed
and are true in all material respects.
37
6. COMPLIANCE
Due compliance has been made with all the provisions of the Act, and all
other legal requirements, in connection with:
6.1 the formation of the Company;
6.2 any allotment, issue, purchase or redemption of shares, debentures or
other securities in the Company;
6.3 any reduction of the authorised or issued share capital of the Company;
6.4 any amendment to the memorandum or articles of association of the
Company;
6.5 the passing of any resolutions by the Company; and
6.6 the payment of any dividends by the Company.
7. INTRA XXXXX
The Company has not entered into any transaction ultra xxxxx the Company
and is not in breach of the provisions of its memorandum or articles of
association.
8. SUBSIDIARIES
8.1 The Company does not have, and has never had, any subsidiary
undertakings.
8.2 The Company does not own (and has never agreed to own) any shares or
debentures in the capital of, nor does it have (nor has it ever agreed to
have) any beneficial interest in, any other company or business
organisation nor does the Company control or take part in (nor has it
ever agreed to control or take part in) the management of any other
company or business organisation.
9. POWERS OF ATTORNEY
The Company has not given a power of attorney and no person has any
authority (express, implied or ostensible) which is still outstanding or
effective to enter into any contract or commitment or to do anything on
its behalf (other
38
than any authority to its directors, officers and employees to enter into
routine trading contracts in the normal course of their duties).
39
PART III
ACCOUNTS
1. GENERAL
1.1 The Accounts show a true and fair view of (i) the state of affairs of the
Company as at the Accounts Date; and (ii) the profits/losses for the
financial year ended on the Accounts Date.
1.2 The Accounts have been prepared in accordance with generally accepted
United Kingdom accounting conventions, policies, and principles
consistently applied and comply with the requirements of the Act and all
relevant accounting standards and statements of standard accounting
practice applicable at the time they were signed off. The Accounts have
been audited in accordance with the statements set out in the Auditors
Report in the Accounts.
1.3 The bases and policies of accounting adopted for the purpose of preparing
the Accounts are the same as those adopted for the purpose of preparing
the audited accounts of the Company for the two preceding accounting
periods and no audited accounts of the Company since incorporation have
been qualified by the auditors.
2. FIXED ASSETS
The value of the fixed assets of the Company as shown in the Accounts is
at cost less depreciation. The depreciation of the fixed assets of the
Company has been made in accordance with the notes to the Accounts. No
fixed asset has attributed to it a value exceeding its purchase price and
there has been no revaluation of such fixed assets since their
acquisition.
3. PROVISION OR RESERVE
Provision, reserve or note (as appropriate in accordance with generally
accepted United Kingdom accounting conventions, policies and principles)
has been made in the Accounts for all bad and doubtful debts, all
liabilities and obligations and all capital commitments of the Company
known at the Accounts Date or required to be included in the Accounts by
law or generally accepted United Kingdom accounting conventions, policies
and principles.
40
4. OFF BALANCE SHEET FINANCING
The Company is not engaged in any financing (including the incurring of
any borrowing or any indebtedness in the nature of acceptances or
acceptance credits) of a type which would not be required to be shown or
reflected in the Accounts.
5. ACCOUNTING RECORDS
All books of account and other records of the Company have been kept and
are in its possession and contain the information required by law.
6. MANAGEMENT ACCOUNTS
The Management Accounts have been prepared in good faith, on bases
consistent with those adopted in the preparation of previous management
accounts of the Company and give a reasonable view of the trading
activities of the Company bearing in mind the purpose for which they were
prepared.
7. BUSINESS SINCE THE ACCOUNTS DATE
Since the Accounts Date:
7.1 there has been no material adverse change in the financial or trading
position of the Company.
7.2 the Company has carried on its business in the ordinary and usual course.
7.3 the Company has not acquired or agreed to acquire any asset:
7.3.1 otherwise than in the ordinary and normal course of trading; or
7.3.2 for a consideration which is higher than open market value at the
time of its acquisition;
7.4 the Company has not disposed of or agreed to dispose of any asset:
7.4.1 otherwise than in the ordinary and normal course of trading; or
7.4.2 for a consideration which is lower than open market value or book
value (whichever is the higher) at the time of its disposal;
41
7.5 the Company has not assumed or incurred, or agreed to assume or incur,
any liability, obligation, commitment or expenditure:
7.5.1 otherwise than in the ordinary and normal course of trading; or
7.5.2 involving an amount in excess of (pounds)15,000;
7.6 there have been no material increases or decreases in the levels of
debtors or creditors or in the average collection or payment periods for
debtors and creditors respectively;
7.7 no distribution of capital or income has been declared, made or paid by
the Company;
7.8 no resolution of the Company's shareholders has been passed (except for
those representing the ordinary business of an annual general meeting);
7.9 the Company has not repaid or redeemed any share or loan capital or
agreed to do so;
7.10 the Company has not repaid any sum in the nature of borrowings in advance
of any due date or made any loan (including in each case intra-group) or
agreed to do so; and
7.11 the Company has not paid or agreed to pay any service, management or
similar charges to any member of the Retained Group.
42
PART IV
ASSETS
1. OWNERSHIP
1.1 Except assets held under hire purchase, leasing and rental agreements as
disclosed in the Disclosure Letter all the assets necessary for the
operation of the Company's business, as currently carried on, are legally
and beneficially owned by the Company.
1.2 No charge, lien, pledge, option or other encumbrance is outstanding over
the whole or any part of the undertaking, property or assets of the
Company nor is there any agreement to grant the same.
1.3 The Seller and each of the other members of the Retained Group has no
interest in any rights (other than rights as a shareholder in the
Company) relating to the business or the assets of the Company.
1.4 The Company's fixed asset register is annexed to the Disclosure Letter
and sets out an accurate record of the plant, machinery, vehicles and
equipment owned or used by it.
1.5 The Company has not acquired or agreed to acquire any asset on terms that
the property in such asset does not pass to it until full payment is
made.
1.6 All documents affecting the Company's title to any part of its
undertaking, property or assets are in its possession.
2. POSSESSION
2.1 All of the assets owned by the Company or in respect of which the Company
has a right of sole use are in the possession or under the control of the
Company.
2.2 Where any assets are used but not owned by the Company or any facilities
or services are provided to the Company by a third party, no event of
default has occurred or is subsisting or has been alleged or, so far as
the Seller is aware, is likely to arise which may entitle any third party
to terminate any agreement or licence in respect of the provision of such
facilities or services.
43
3. CONDITION
All material plant, machinery, vehicles and equipment used by the Company
have been maintained in accordance with appropriate technical
specifications, safety regulations and the terms and conditions of any
applicable agreements.
4. HIRE PURCHASE AND LEASED ASSETS
Copies of any xxxx of sale or any hiring or leasing agreement, hire
purchase agreement, credit or conditional sale agreement, agreement for
payment on deferred terms or any other similar agreement to which the
Company is a party are annexed to the Disclosure Letter.
5. STOCK
5.1 The Company's stock of uninstalled ATMs comprises not less than 45 ATMs.
5.2 Each ATM in the Company's stock of uninstalled ATMs is:-
5.2.1 legally and beneficially owned by the Company;
5.2.2 in good condition;
5.2.3 capable of being used in the UK for the purpose for which it was
designed; and
5.2.4 stored by the Company on an appropriate basis and available for
installation by or on behalf of the Company.
6. DEBTS
6.1 The Company has not factored, sold or discounted any of its debts or
agreed to do so.
6.2 A copy of the Company's schedule of debtors is annexed to the Disclosure
Letter.
6.3 No debt owed to the Company (whether included in the Accounts or arising
since the Accounts Date) has been realised for less than full face value
or has been released (in whole or in part). So far as the Seller is aware
(but with no
44
obligation to make further enquiry) each debt now owed to the Company will
realise its full face value.
6.4 The Company has not granted credit terms exceeding 30 days.
7. INSURANCE
7.1 A list of every past and current insurance and indemnity policy in respect
of which the Company has any continuing interest (whether or not arranged
by the Company or any member of the Retained Group) is annexed to the
Disclosure Letter. Such list is accurate and indicates any such policy
which is written on an occurrence basis.
7.2 In respect of all current insurances:-
7.2.1 all premiums have been duly paid to date;
7.2.2 so far as the Seller is aware there are no special or unusual terms
or restrictions; and
7.2.3 no claim is outstanding and so far as the Seller is aware no events
have occurred which may give rise to any claim.
45
PART V
LIABILITIES
1. GUARANTEES AND INDEMNITIES
There is not outstanding any guarantee, indemnity, security, bond, letter
of comfort or other similar obligation given by or for the benefit of the
Company.
2. GRANTS
The Company has not applied for any investment grant, employment subsidy or
other similar payment and no such grant, subsidy or payment paid or due to
be paid to the Company is or may be liable to be refunded, withheld or
refused (in whole or in part) in consequence of anything which the Company
has done or omitted to do (or has agreed to do or omit to do) or for any
other reason.
3. SUCCESS FEES
The Seller has not committed or agreed that the Company will pay, in
connection with the sale of any of the Shares or otherwise in connection
with this Agreement:
3.1 any success or other fee, brokerage or commission; or
3.2 any sum whatsoever to any of its directors, employees or agents.
46
PART VI
TRADING ARRANGEMENTS
1. SUPPLIERS
1.1 No supplier to the Company has during the last 12 months ceased or
indicated an intention to cease (or to reduce the volume of) trading with
the Company.
2. CUSTOMERS
2.1 No material customer of the Company has during the last 12 months ceased
or indicated an intention to cease (or to reduce the volume of) trading
with the Company.
3. AGREEMENTS
Except for the ATM Site Agreements, the Company is not a party to any
agreement or arrangement:
3.1 in the nature of a partnership, joint venture or consortium arrangement
or agreement or any agreement for sharing commissions or other income;
3.2 which can be legally terminated by another party as a result of any
change in the control, management or shareholders of the Company which is
material to the business of the Company;
3.3 of a loss-making nature (that is to say, now known to be likely to result
in a loss on completion of performance);
3.4 which limits or excludes its right to do business and/or to compete in
any area or in any field or with any person;
3.5 of an unusual or abnormal nature or entered into otherwise than on an
arm's-length basis or otherwise than in the ordinary and normal course of
its trading;
3.6 which cannot readily be fulfilled or performed by the Company in
accordance with its terms;
47
3.7 which involves payment by reference to fluctuations in the index of
retail prices or in the rate of exchange for any currency;
3.8 which commits the Company to an aggregate outstanding or potential
expenditure of more than (pounds)100,000;
3.9 to which any member of the Retained Group is a party or in which any
member of the Retained Group (or any director of such company) (or any
person connected with any of them) is interested or from which any such
person takes benefit (directly or indirectly);
3.10 to which any of the provisions of sections 320, 322 or 330 of the Act may
apply; or
3.11 which is a currency and/or interest rate swap agreement, asset swap,
future rate or forward rate agreement, interest cap, collar and/or floor
agreement or other exchange and/or rate protection transaction, or any
option with respect to any such transaction or any similar transaction.
4. VALIDITY OF AGREEMENTS
In relation to each material agreement, arrangement or obligation to
which the Company is a party:
4.1 there are, so far as the Seller is aware, no grounds for its invalidity,
termination, avoidance, recission or repudiation;
4.2 no party has given written notice to terminate it (or, so far as the
Seller is aware, intends to do so); and
4.3 no party is in material breach of it.
5. TENDER OFFERS
No bid, tender, proposal or offer given or made by the Company on or
before today's date and still outstanding is capable of giving rise
to a contract merely by a unilateral act of another person.
48
6. STANDARD TERMS
Copies of the Company's standard ATM site agreements are annexed to
the Disclosure Letter. These site agreements form the basis for each
site agreement entered into and no site agreement has been entered
into in a materially different form without the knowledge of Xxx
Xxxxxxx, Xxxxxx Xxxxx or Xxxx Xxxxxx.
7. PREFERENTIAL TERMS
The Disclosure Letter contains details of all discounts, over-riders,
rebates, allowances and other preferential terms of any nature
available to the Company from its suppliers or offered by the Company
to its customers.
8. COMPETITION LAW MATTERS
8.1 So far as the Seller is aware, the Company has not at any time been and
is not a party to or concerned in any agreement, arrangement, concerted
practice or conduct which was or is:
8.1.1 registrable under the provisions of the Restrictive Trade
Practices Xxx 0000;
8.1.2 within the scope of Article 81 of the Treaty of Rome or Article
53(1) of the Agreement on the European Economic Area;
8.1.3 an abuse of a dominant position under Article 82 of the Treaty of
Rome or Article 54 of the Agreement on the European Economic
Area;
8.1.4 unlawful by virtue of the Resale Prices Xxx 0000;
8.1.5 within either of the prohibitions contained in Chapters I and II
of the Competition Xxx 0000, whether or not subject to a
transitional exemption; or
8.1.6 a material infringement of the competition law of any other
jurisdiction to which the Company has been or is subject.
8.2 The Company has not at any time received, any process, notice,
communication or request for information with respect to any actual or
49
proposed agreement, arrangement, concerted practice or conduct of the
Company from the Office of Fair Trading, the Monopolies and Mergers
Commission, the Secretary of State for Trade and Industry, the European
Commission, the EFTA Surveillance Authority. The Company has not been the
subject of any report, decision, order, judgment or injunction made,
taken or obtained by any such person or body, nor has the Company given
or been the subject of any undertaking or assurances given to any such
person or body.
8.3 No notification to the Office of Fair Trading for guidance or a decision
under the Competition Xxx 0000 has been made by or on behalf of the
Company.
9. INTRA-GROUP ARRANGEMENTS
9.1 There are no services, supplies, licences, rights, benefits or other
arrangements (other than any service, supply, licence, right, benefit or
other arrangement of the same nature, scope and extent as is to be
provided under the Driving Contract) which are provided to the Company by
any member of the Retained Group and which are necessary to enable the
business of the Company to be carried on substantially as it has been
carried on up until the date of this Agreement.
9.2 No member of the Retained Group has any interest, direct or indirect, in
any business operating in the United Kingdom which competes with any
business now carried on by the Company.
50
PART VII
EFFECT OF SALE
1. Neither the execution nor the performance of this Agreement or of any
document to be executed pursuant to it will:
1.1 result in the Company losing the benefit of any asset, licence, grant,
subsidy, right or privilege which it enjoys in any jurisdiction;
1.2 conflict with, or result in a breach of, or give rise to an event of
default under, or require the consent of a person under, or enable a
person to terminate, or relieve a person from an obligation under, any
agreement, arrangement or obligation to which the Company is a party or
any legal or administrative requirement in any jurisdiction;
1.3 result in any customer or supplier being contractually entitled to cease
dealing with the Company or being contractually entitled to change the
terms on which it deals with the Company;
1.4 so far as the Seller is aware, result in any officer or senior employee
leaving the Company; or
1.5 make the Company liable to offer for sale, transfer or otherwise dispose
of or purchase or otherwise acquire any assets.
51
PART VIII
COMPLIANCE AND LITIGATION
1. COMPLIANCE WITH LAWS
1.1 The Company and its officers and so far as the Seller is aware its agents
and employees (past and present) in the course of their respective duties
to the Company have complied in all material respects with all applicable
laws and regulations of the United Kingdom, the European Community or any
foreign jurisdiction in which the Company conducts business.
2. LICENCES AND CONSENTS
2.1 The Disclosure Letter discloses details of all licences, consents,
approvals, permissions, permits, certificates, qualifications,
registrations and other authorisations (public and private) necessary for
the proper operation of the business of the Company in the places and in
the manner in which such business is now carried on (together the
"Authorities").
2.2 The Company has obtained each Authority and complied with its terms and
conditions.
2.3 All the Authorities are valid and subsisting and, so far as the Seller is
aware, there is no reason why any of them should or could be suspended,
threatened, cancelled, invalidated, revoked or not renewed.
3. CURRENT LITIGATION
3.1 The Company is not involved in any civil, criminal, arbitration,
administrative or other proceedings in any jurisdiction (together the
"Proceedings").
3.2 The Company has not received notification that any proceedings are
pending or threatened against the Company. So far as the Seller is aware
there are no facts or circumstances which may give rise to any
Proceedings being commenced by or against the Company.
52
3.3 So far as the Seller is aware, no officer, agent or employee (past or
present) of the Company is involved in any Proceedings as a result of any
act or omission by him in the course of his duties to the Company.
3.4 No member of the Retained Group is entitled to any claim of any nature
against the Company or any officers, employees, agents, advisers, customers
or suppliers of the Company nor has any member of the Retained Group
assigned to any third party the benefit of any such claim to which it was
previously entitled.
4. PAST LITIGATION
4.1 During the three years prior to today's date no Proceedings have been
commenced by or against the Company nor have any Proceedings been settled
or compromised.
4.2 So far as the Seller is aware, during the three years prior to today's date
no Proceedings have been commenced by or against any officer, agent or
employee (past or present) of the Company as a result of any act or
omission by him in the course of his duties to the Company nor have any
such Proceedings been settled or compromised.
5. JUDGMENTS
So far as the Seller is aware, neither the Company nor any of its officers,
agents or employees (past or present), in his capacity as such, is subject
to any order, decree, award, decision or judgment given by any court,
tribunal, arbitrator, governmental agency or other regulatory body in any
jurisdiction nor is it/he a party to any undertaking or assurance given to
any court, tribunal, arbitrator, governmental agency or other regulatory
body which is still in force.
6. INVESTIGATIONS
So far as the Seller is aware neither the Company nor any of its officers,
agents or employees (past or present), in his capacity as such, is subject
to any investigation, enquiry or disciplinary proceedings (whether
judicial, quasi-judicial or otherwise).
53
7. UNLAWFUL PAYMENTS
Neither the Company nor, so far as the Seller is aware, any of its
officers, agents or employees (past or present) in the course of his duties
to the Company has:
7.1 induced a person to enter into agreement or arrangement with the Company by
means of an unlawful or immoral payment, contribution, gift or other
inducement; or
7.2 offered or made an unlawful or immoral payment, contribution, gift or other
inducement.
8. DEFECTIVE GOODS/SERVICES
8.1 There is no claim against the Company for defective goods, services, work
or materials or for breach of representation, warranty or condition or for
delays in delivery or completion of contracts or for deficiencies of design
or performance for goods or services sold or supplied by the Company.
8.2 The Company has not agreed to produce or deliver replacement goods or
services after today's date or to take back any defective goods or services
or to effect repairs to the same free of charge or otherwise not at
arm's-length rates or to issue a credit note or write-off or reduce
indebtedness in respect thereof.
54
PART IX
INSOLVENCY
1. RECEIVERSHIP
No receiver or administrative receiver or manager or receiver and manager
or trustee or similar person has been appointed of the whole or any part of
the assets or undertaking of the Company. Nor, so far as the Seller is
aware, has any other step been taken (including the taking of possession by
a mortgagee or chargee) to enforce any security interest in or over any of
the assets of the Company.
2. ADMINISTRATION
No administration order has been made in relation to the Company and no
petition for such an order has been threatened or presented or is in the
contemplation of the Company.
3. COMPROMISES
No voluntary arrangement, compromise, composition, scheme of arrangement,
standstill or standfast agreement, deferral, rescheduling or other
readjustment or reorganisation or other arrangement between the Company and
its creditors and/or its members (or any class of either of them) has been
proposed or approved or is in the contemplation of the Company.
4. WINDING-UP
No petition has been threatened or presented, no order has been made, no
resolution has been passed and no meeting has been convened for the purpose
of winding-up the Company or for the appointment of a provisional
liquidator or special manager to the Company.
5. PAYMENT OF DEBTS
The Company has not stopped paying its debts as and when they fall due nor
is it at the date of this Agreement insolvent or unable to pay its debts
within the meaning of section 123 (1) or (2) Insolvency Xxx 0000
(interpreted on the basis that the words "it is proved to the satisfaction
of the court" in sub-section (1) (e) and sub-section (2) of section 123
shall be deemed to be deleted).
55
6. DISSOLUTION
No step has been taken with a view to the dissolution or striking-off the
register of the Company.
7. UNSATISFIED JUDGMENTS
No unsatisfied judgment or court order is outstanding against the Company
or any of its assets.
8. DISTRESS
No distress, execution, forfeiture, re-entry or other process has been
levied, enforced or threatened on or against any asset of the Company.
9. UNDERVALUES AND PREFERENCES
The Company has not been party to any transaction at an undervalue (within
the meaning of section 238 Insolvency Act 1986) nor has it given or
received any preference (within the meaning of section 239 Insolvency Act
1986) in either case during the two years preceding today's date.
10. INTERESTS IN PROPERTY
The Company has not acquired any interest in property (or any interest
deriving from such interest) in respect of which an order under section 238
or 239 Insolvency Act 1986 is likely to be made (whether in relation to the
Company or in relation to any other person).
11. EXTORTIONATE CREDIT TRANSACTIONS
The Company has not been party to any extortionate credit transaction
(within the meaning of section 244 Insolvency Act 1986) during the three
years preceding today's date.
12. TRANSACTIONS DEFRAUDING CREDITORS
The Company has not been party to any transaction at an undervalue (within
the meaning of section 423(1) Insolvency Act 1986) for either of the
purposes mentioned in section 423(3) Insolvency Xxx 0000, at any time.
56
PART X
INTELLECTUAL PROPERTY
1. No licence, permission or other right has been granted to the Company by
any third party in respect of any Intellectual Property other than the
Licensed Intellectual Property and the agreements relating to the Licensed
Intellectual Property contain all the terms relative to the use by the
Company of the same and all Intellectual Property which is Licensed
Intellectual Property is in full force and effect or subsisting as the case
may be.
2. There is no Intellectual Property which is capable of registration in the
name of, or of being vested in, the Company as owner or part owner which
has not been so registered or vested and the Licensed Intellectual Property
are all the rights in Intellectual Property which are necessary to enable
the business of the Company fully and effectively to be carried on as it
has been carried on up until the date of this Agreement.
3. The Company owns absolutely such copyrights, database rights and analogous
rights as are necessary to enable the business of the Company to be carried
on as it has been carried on up to the date of this Agreement.
4. The Company has not done or omitted to do any act, matter or thing in
respect of any Licensed Intellectual Property or in respect of any
agreement relating to any Licensed Intellectual Property which would or
might impinge upon the validity or enforceability of the same or upon the
right of the Company to use the same in relation to the business of the
Company as it has been carried on up to the date of this Agreement.
5. All know how (such as customer lists and real estate lists) that is
proprietary to the Company has not been disclosed to any third party in
whole or in part (other than in the ordinary course of business and in
compliance with past business practice). There is no claim pending or
threatened alleging that such know-how has been disclosed to the Company
subject to a confidentiality agreement and the Company breached such
confidence.
6. The Company does not trade under any name other than its full corporate
name.
57
PART XI
INFORMATION TECHNOLOGY
1. The Information Technology Systems are substantially adequate for the
current and projected requirements of the Company (as currently projected
by the Seller) in terms of functionality and performance.
2. The Information Technology Systems function and perform in a manner
adequate to allow the Company to carry on its business in the usual
course.
3. The Information Technology Systems are covered by warranty and/or
maintenance arrangements which the Seller reasonably believes are
adequate for the Company's requirements.
4. In the 12 months prior to the date of this Agreement the Company has not
suffered any failure, virus or bug or breakdown of any part of the
Information Technology Systems which has caused any material disruption
or interruption to the Company.
58
PART XII
DATA PROTECTION
1. Without prejudice to any other warranty contained in this Agreement, the
Company has complied in all material respects with the provisions of the
Data Protection Xxx 0000 ("DPA").
2. The Company has received neither an information notice nor an enforcement
notice from the Information Commissioner (as those terms are defined in
the DPA).
3. The Company has not received a subject access request from a data subject
(as those terms are defined in the DPA).
59
PART XIII
OFFICERS AND EMPLOYEES
1. PARTICULARS
1.1 Those persons named as such in Schedule 1 are the only directors of the
Company and the secretary of the Company respectively.
1.2 No person is or has been a shadow director of the Company.
1.3 The particulars shown in the schedule of employees annexed to the
Disclosure Letter list all the employees of the Company, are accurate at
the date of this Agreement and disclose in relation to each employee (or,
where appropriate, to each category of employee):
1.3.1 gender, date of birth, period of continuous service and workplace
location;
1.3.2 all other terms and conditions of employment including job title
or job function, pay, notice periods, holiday entitlements,
benefits (car allowances, healthcare etc), restrictive covenants,
bonus arrangements and any entitlements to severance or other
payments on termination of employment;
1.3.3 arrangements relating to hours of work (including any night work
and part-time work) and overtime;
1.3.4 the terms of any share option, incentive or other similar scheme
in which any of the employees are entitled to participate
(together with details of their entitlements).
1.4 Other than conditional upon Completion no change in the remuneration,
benefits and arrangements shown in the schedule of employees annexed to
the Disclosure Letter is due or expected within six months from the date
of this Agreement.
1.5 No employee of the Company will be entitled to receive any payment or
benefit from the Retained Group directly as a consequence of completion
of this Agreement.
60
1.6 So far as the Seller is aware the Company has not made any outstanding
offer nor agreed to employ any person who is not an employee of the
Company at the date of this Agreement.
2. COMPLIANCE
2.1 The Company has complied in all material respects with all its
obligations to or in respect of all its employees and former employees
arising out of or in connection with their terms and conditions of
employment and/or with any relevant requirement whether under European
and English law or otherwise including any judgments, decisions, orders
and awards made in respect of any of them and no amount due to or in
respect of any employee or former employee is in arrear and unpaid other
than salary for the month current at the date of this Agreement.
3. NOTICE
3.1 There is not outstanding any contract of employment between the Company
and any of its directors, officers or employees which is not terminable
by the Company without damages or compensation (other than any
compensation payable by statute) on one month's notice given at any time.
3.2 At the date of this Agreement no employee of the Company has given notice
to terminate his contract of employment or is under notice of dismissal.
4. TRADE UNIONS
There are no recognition, procedural or other arrangements with trade
unions which relate to any of the employees of the Company nor are any of
the employees members of a trade union; there are no outstanding
applications for trade union recognition or derecognition relating to any
of the employees; there is no staff association, works council or similar
employee body or employee representatives relating to any of the
employees.
5. DISPUTES
There are no, nor within the 12 months preceding the date of this
Agreement have there been any, disputes, enquiries or investigations
relating to the employees or former employees of the Company and/or any
trade union or other representatives nor, so far as the Seller is aware,
are any such disputes, enquiries or investigations pending or threatened.
61
6. MATERNITY
No employee of the Company has notified the Company that she is pregnant or
is absent on maternity leave or has been absent for a period of more than a
week owing to sickness or otherwise.
7. SICKNESS AND DISABILITY
No employee of the Company is suffering from (or has suffered from within
the last 12 months) any disability, illness, condition or other complaint
requiring any arrangements or procedures made or operated by the Company
pursuant to the Disability Discrimination Xxx 0000 to accommodate them.
8. PROPERTY
No employee of the Company resides in or occupies or is entitled to reside
in or occupy any property belonging to the Company.
9. LOANS
There are no outstanding loans made by the Company to any of its employees.
10. WORK PERMITS
There is no requirement for a work permit in relation to the employment of
any of the employees of the Company.
11. SECONDMENTS
The Company has not entered into any secondment arrangement relating to any
of its employees.
12. RIGHT TO RETURN
No person previously employed by the Company has a right to return to work
or a right to be re-instated or re-engaged by the Company.
62
13. OUTSOURCING
The Company is not a party to any arrangements (including outsourcing or
contracting-out arrangements) which could cause any contract of employment
or employment related liability to transfer to the Company under the
Transfer of Undertakings (Protection of Employment) Regulations 1981 or
otherwise.
14. CONSULTANCY
The Company has not entered into any consultancy arrangements.
63
PART XIV
PENSIONS
1.1 No agreement, arrangement or understanding (whether contractual, under
trust or otherwise) exists for the provision of Relevant Benefits for or
in respect of any officer or employee or any former officer or employee
in connection with which the Company is or may become legally or morally
liable to make any payment and the Company is not liable to make
contributions to a personal pension scheme in respect of any person
except as set out in the Disclosure Letter. Relevant Benefits is defined
in section 612 of ICTA 1988 but with the omission of the exception in
that definition.
1.2 The Company has complied with its obligations under the Welfare Reform
and Pensions Xxx 0000 to designate a stakeholder pension scheme in
respect of all its relevant employees as defined under that Act.
64
PART XV
PROPERTY
1. INTERPRETATION
In this Part XV, reference to "the Lease" shall where the context so admits
be a reference to each and every lease under which the Property is held and
references to the "Town and Country Planning Legislation" shall mean the
Town and Country Planning Xxx 0000, the Planning (Listed Buildings and
Conservation Areas)Act 1990 and the Planning (Hazardous Substances) Xxx
0000 and any statute amending, consolidating or replacing any of the
aforementioned acts for the time being in force and reference to the
"Existing Use" means the actual use to which the Property is presently put.
2. WARRANTIES
2.1 Schedule 5 contains a complete and accurate list of the properties owned,
controlled, used or occupied by the Company or in which the Company has any
interest or liability (whether actual or contingent).
2.2 The Company has good and marketable title to the Property and is the sole
legal and beneficial owner of the Property and is in exclusive occupation.
2.3 The Property has the benefit of the legal rights and easements necessary
for the use and enjoyment of the Property for its Existing Use.
2.4 The Existing Use of the Property is the lawful use under the Town and
Country Planning Legislation and the planning permissions authorising the
Existing Use are unconditional and permanent.
2.5 There are no breaches of current or previous legislation or regulations,
orders, notices, or directions made under any legislation capable of
enforcement affecting the Property.
2.6 There are no rights, easements, liberties, privileges, advantages,
interests, covenants, conditions, restrictions which conflict with the
Existing Use of the Property or adversely affect its value.
65
2.7 There are no disputes, claims, actions, demands, notices or complaints in
respect of the Property or its use which are outstanding or anticipated
by the Company.
2.8 There are no material breaches of any covenants affecting the freehold to
the Property or any Lease under which the Property is held and there are
no arrears of rent.
2.9 The Company is not actually or contingently liable as surety of or an
original contracting party to, or assignor or assignee of, any lease of
property other than the Property.
2.10 There has been no spillage, leakage, emission, discharge, storage,
disposal or presence at, on, or from the property of any substance or
material which is causing, has caused or is likely to cause harm to human
health or to the environment, give rise to any nuisance or any other
claim or requirement to undertake any works.
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PART XVI
TAX
1. GENERAL
1.1 The Company has not carried out or been engaged in any transaction or
arrangement, nor is it under a contractual obligation to carry out or
engage in any transaction or arrangement, such that the law provides that
there may be substituted for the amount or value of the actual
consideration given or received (or to be given or received) by the
Company any different amount or value for taxation purposes.
1.2 The Company has not engaged in, or been a party to any transaction:-
1.2.1 on a non-arm's length basis or in relation to which section 28AA
ICTA has applied or may apply; or
1.2.2 for the purposes of the avoidance of Tax (being a transaction
capable of recharacterisation under principles derived from the
line of cases decided by the House of Lords in this regard
including XX Xxxxxx Limited -v- IRC [1981] 54 TC 101; Furness -v-
Xxxxxx [1984] 55 TC 36; Xxxxxx-v- White [1988] XXX 000 xxx
Xxxxxxxx -x- Xxxxxxxxxxxx Investments Limited [2001] STC 237).
2. COMPLIANCE
2.1 The Company has made all returns, claims for relief, applications,
notifications, computations and assessments (whether physically in
existence or electronically stored) ("Returns") it is required by law to
make. All Returns have been properly submitted (whether physically or
electronically) by the Company within any relevant time limits to all
relevant taxation authorities (whether of the United Kingdom or
elsewhere) and the Returns are complete, true and accurate, give proper
disclosure of all material facts and circumstances and are not the
subject of any question or dispute nor so far as the Seller is aware is
likely to become the subject of any question or dispute with any taxation
authority.
2.2 The Company has filed a corporation tax return for the period ended on
the Accounts Date and since the Accounts Date has not filed any amended
corporation tax return for any period.
67
2.3 The Company has prepared, kept and preserved records as required by law
for the purposes of Taxation of the Company.
2.4 The Company has properly and punctually submitted to the relevant
taxation authorities all claims and disclaimers which have been assumed
to have been made for the purposes of computing any provision or reserve
for Taxation (including deferred taxation) included in the Accounts.
2.5 The Company has properly and punctually paid all Taxation which it has
become liable to pay and it has never paid or become liable to pay any
penalty, fine, surcharge or interest in connection with Taxation. There
is no Taxation for which the Company is liable the due date for which
will fall within 30 days of the date of this Agreement.
3. VALUE ADDED TAX
3.1 The Company is not and has never been treated for the purposes of
sections 43 to 43C Value Added Tax Act 1994 (groups of companies) as a
member of a group.
3.2 The Company is a registered and taxable person for the purposes of the
Value Added Tax Xxx 0000 and has complied with and observed in all
respects the terms of all statutory provisions, directions, conditions,
notices and agreements with H.M. Customs and Excise relating to value
added tax. The Company has maintained and obtained accounts, records,
invoices and other documents (as the case may be) appropriate or
requisite for the purposes of value added tax which are complete, correct
and up-to-date.
3.3 The Company:-
3.3.1 is not, nor in the two years prior to Completion has been, in
arrears with any payments or returns or notifications under any
statutory provisions, directions, conditions or notices relating
to value added tax, or liable to any forfeiture or penalty or
interest or surcharge or to the operation of any penalty,
interest or surcharge provision;
3.3.2 has not been required by H.M. Customs and Excise to give
security;
3.3.3 has not received, and has not engaged in any arrangements or
transactions such that it could receive, a notice under paragraph
1 schedule 6 Value Added Tax Xxx 0000 (valuation - special cases)
68
directing that the value of any supply shall be taken to be its
open market value.
3.4 The Company has never received a surcharge liability notice under section
59 Value Added Tax Act 1994 (default surcharge) or a penalty liability
notice under section 64 Value Added Tax Xxx 0000 (repeated
misdeclarations).
3.5 The Company is not required to pay amounts on account of value added tax
under any order made under section 28 Value Added Tax Xxx 0000 (payments
on account).
3.6 No claims have or could be made by the Company under section 36 Value
Added Tax Act 1994 (bad debts).
4. EMPLOYEES
4.1 The Company has properly operated and complied with all provisions
dealing with PAYE and National Insurance contributions and has deducted
tax as required by law from all payments to or treated as made to or
benefits provided for employees, officers, ex-employees, ex-officers and
persons rendering services to the Company and has duly accounted to the
Inland Revenue or other relevant tax authority for tax so deducted and
contributions payable. The Company has maintained and retained such books
and records relating to PAYE and to National Insurance contributions as
it is required to maintain and retain.
4.2 The expenses incurred under the existing arrangements for remunerating
employees, officers, ex-employees and ex-officers and rewarding persons
rendering services to the Company, including any compensation for loss of
office and any gratuitous payments, are deductible for the purposes of
section 74 or 75 ICTA 1988 (deductions).
4.3 The Company has not remunerated any employee, officer or person rendering
services and there are no arrangements to pay any employee, officer or
person rendering services other than in cash payable to that employee,
officer or person and in respect of which the Company has a liability to
account for tax under PAYE or to make National Insurance contributions.
4.4 The Company has never, under section 140G ICTA 1988 (information for the
purpose of sections 140A to 140F) and section 85 Finance Act 1988
69
(information: unapproved share schemes), been required to give or deliver
particulars (as specified in those sections) to any taxation authority.
5. STAMP DUTIES
5.1 There is no instrument which is necessary to establish the Company's
rights or the Company's title to any asset which is liable to stamp duty
(or any like duty or tax in a jurisdiction outside the United Kingdom)
which has not been duly stamped or which would attract stamp duty,
interest or penalties if brought within the relevant jurisdiction.
5.2 There is no instrument which is necessary to establish the Company's
rights or the Company's title to any asset which has been adjudicated as
to the amount of duty with which it is chargeable, or has been stamped
with a stamp denoting that it has been adjudicated and is not chargeable
to any duty, other than where the relevant taxation authority has been
supplied with details of all facts and circumstances which could
reasonably have affected that authority's decision when making that
adjudication.
5.3 The Company does not hold any interest in land in the United Kingdom
which was transferred, granted or surrendered to it, or which is derived
from an interest in land which was transferred, granted or surrendered to
it, within two years prior to the date of this Agreement by means of an
instrument which was stamped on the basis that it was entitled to relief
under any of section 42 Finance Xxx 0000, section 11 Finance Act
(Northern Ireland) 1954, section 151 Finance Xxx 0000, or section 76
Finance Xxx 0000.
6. INTERNATIONAL
6.1 The Company was incorporated in and is and always has been resident only
in the United Kingdom for Taxation purposes and for the purposes of any
double taxation agreement. The Company is not liable to, and has at no
time incurred any, Taxation in any jurisdiction other than the United
Kingdom.
6.2 The Company is not the branch, agency or UK representative (as that term
is defined in section 126 Finance Act 1995) of a person who is not
resident in the United Kingdom.
6.3 The price that has been paid or has been agreed to be paid for any sale
of property in respect of which the Company is the buyer or seller is an
arm's length price for the purposes of section 770 ICTA 1988 (sales etc
at an
70
undervalueor overvalue). No provision has been made or imposed by
means of a transaction or series of transactions which requires the
Company to compute its profits or losses for tax purposes as if an
arm's length provision has been made or imposed instead of the actual
provision in accordance with the requirements of schedule 28AA ICTA
1988. The Company has sufficient information and records to enable it
to establish that it is not subject to the operation of section 770 or
schedule 28AA ICTA 1988.
71
SCHEDULE 4
LIMITATIONS ON CLAIMS
1. INTERPRETATION
1.1 The provisions in this Schedule shall operate to limit the liability of
the Seller under Relevant Claims (as defined below) and related matters
as provided in this Schedule.
1.2 In this Schedule (unless the context otherwise requires):
Definition Meaning
"Determination" a final determination by a court of
competent jurisdiction or a final award
or decision of a duly appointed
arbitrator or expert (as the case may
be); and
"Determined" shall be construed accordingly;
"Relevant Claim" a Warranty Claim or a Tax Claim;
"Tax Claim" any claim under Part XVI of Schedule 3
or the Tax Deed; and
"Warranty Claim" any claim against the Seller under the
Warranties except for a Tax Claim.
1.2 Expressions defined in clause 1.1 shall, where the context so requires,
have the same meanings in this Schedule.
2. TIME LIMITS
2.1 The Seller shall not be liable for any Relevant Claim unless written
notice of the Relevant Claim has been given to it by or on behalf of the
Buyer or the Company, in accordance with paragraph 7.1.1:
2.1.1 in respect of a Tax Claim on or before the date which is six
years and six months after the Completion Date; and
72
2.1.2 in respect of a Warranty Claim, on or before the date which is
six months after the publication of the audited accounts of the
Company for the financial year ending 31 December 2003.
2.2 Any Relevant Claim (other than a claim under the Tax Deed) shall be
deemed to be withdrawn (if it has not been previously satisfied, settled
or withdrawn) unless legal proceedings in respect of such Relevant Claim
have been commenced within six months of the giving of written notice in
accordance with paragraph 7.1.1 of such Relevant Claim, and for this
purpose such legal proceedings shall not be deemed to have commenced
unless both issued and served.
3. FINANCIAL LIMITS
Threshold for Relevant Claims
3.1 No liability shall attach to the Seller in respect of a Relevant Claim
(other than a claim under the Tax Deed) unless the aggregate amount of
liabilities of the Seller in respect of all Relevant Claims (other than a
claim under the Tax Deed) (excluding reasonable legal costs and any other
costs and expenses incurred in ascertaining the existence or the amount
of such Relevant Claims ("Relevant Costs")) shall exceed the total sum of
(pounds)312,500 (the "Threshold") and if the aggregate amount of such
liabilities shall exceed the Threshold the Seller shall be liable for the
whole of such aggregate amount and not merely for the amount in excess of
the Threshold.
3.2 Relevant Claims in the amount of (pounds)3,125 or less (excluding
Relevant Costs) shall be deemed not to be Relevant Claims and accordingly
no liability whatsoever shall attach to the Seller in respect of such
Relevant Claims. Where more than one Relevant Claim arises out of the
same facts or circumstances all such claims shall be aggregated together
for the purposes of this paragraph 3.2.
Ceiling on Relevant Claims
3.3 The aggregate liability of the Seller to make payment to the Buyer in
respect of all or any Relevant Claim(s) shall not in any circumstances
exceed (pounds)20,312,500 (excluding Relevant Costs), and accordingly the
Seller shall not be liable for Relevant Claims in excess of such amount.
73
4. DOUBLE CLAIMS
4.1 If the Buyer is entitled to claim under the Tax Deed or under the
Warranties in respect of the same subject matter, the Buyer may choose to
claim under either or both but payments under the Tax Deed shall pro
tanto satisfy and discharge any Warranty Claim in respect of the same
subject matter and vice versa.
4.2 The Buyer shall not be entitled to recover the damages or obtain
reimbursement or restitution or payment from the Seller to the extent it
has already recovered in respect of a particular fact, circumstance,
matter, event or thing constituting or giving rise to a Relevant Claim.
5. DISCLOSURE
The Buyer shall not be entitled to claim that any fact, circumstance,
matter, event or thing constitutes or gives rise to a Relevant Claim
(other than a claim under the Tax Deed), if such fact, circumstance,
matter, event or thing has been disclosed by this Agreement (or arises
from the implementation of this Agreement), including any of the
Schedules, or in the Disclosure Letter.
6. SPECIFIC LIMITATIONS
6.1 The Seller shall have no liability to the Buyer and the Buyer shall not
have any claim whatsoever against the Seller in respect of any Warranty
Claim or any matter giving rise to a Warranty Claim to the extent that:-
6.1.1 a specific provision or allowance or reserve in respect of such
Warranty Claim has been made in the 2002 Audited Accounts or the
matter to which such Warranty Claim relates was specifically
referred to in the notes to the 2002 Audited Accounts;
6.1.2 it would not have arisen but for any change after Completion in
the accounting principles or practices of the Company or in
generally accepted accounting principles;
6.1.3 it occurs as a result of:-
(a) any legislation or practice of any governmental authority or
agency not in force at the date of this Agreement which
takes effect retrospectively; or
74
(b) any increase in the rates of Taxation in force at the date
of this Agreement;
(c) any change in the accounting reference date of the Buyer or
the Company made on or after Completion; or
(d) a voluntary act, transaction or omission of or suffered by
the Company or the Buyer (or any successor in title or
either of them) after Completion unless such act transaction
or omission occurs:-
(i) as part of the Company's ordinary course of business;
or
(ii) pursuant to a legally binding obligation of the
Company entered into prior to Completion; or
(iii) with the written approval of the Seller.
6.2 If any liability of the Seller is in respect of a liability of the
Company which is contingent when the Relevant Claim (other than a claim
under the Tax Deed) is notified to the Seller, the Seller shall not be
obliged to make any payment in respect of the liability until such time
as the contingent liability becomes an actual liability.
6.3 The specific exclusions and limitations set out in clause 3 of the Tax
Deed will apply to all Tax Claims.
7. NOTICE OF CLAIMS AND PROCEDURE
7.1 If after Completion there comes to the notice of the Buyer or the
Company, any matter or claim or event or thing which may constitute or
give rise to a Warranty Claim, the Buyer shall:-
7.1.1 as soon as practicable given written notice of the Warranty
Claim to the Seller giving details of the Warranty Claim so far
as then known to the Buyer or the Company, including the nature
of the claim and the circumstances giving rise to it, together
with the Buyer's bona fide estimate of any alleged loss and
assessment of the amount that and the date on which the Buyer
anticipates that
75
the Seller will be required to make a payment in respect of the
Warranty Claim and any Relevant Claim;
7.1.2 not make any admission of liability, agreement or compromise with
any person, body or authority in relation to the Warranty Claim
without the prior agreement of the Seller (which shall not be
unreasonably withheld or delayed);
7.1.3 give the Seller and their professional advisers access to the
premises, personnel and advisers of the Buyer and the Company, as
may be relevant upon reasonable notice and during normal business
hours and access to any relevant chattels, documents and records
owned by or within the power or control of the Buyer and/or the
Company or to which the Buyer or the Company has or can procure
access so as to enable the Seller and their professional advisers
to examine such chattels, accounts, documents and records and
take extracts or photocopies of them for the purpose of
determining the nature and extent of the Warranty Claim (and any
related Relevant Claim) and the steps that may be appropriate to
remedy or avert it.
7.2 Following the Buyer giving notice to the Seller of a Warranty Claim, the
Buyer shall take such reasonable steps as the Seller considers desirable
to remedy or avert the Warranty Claim or any related Relevant Claim.
7.3 The Seller may require the Buyer to take such action and give such
information and assistance in connection with the affairs of the Buyer or
the Company and as the Seller may reasonably request to avoid, resist,
appeal or compromise the Warranty Claim subject to the Seller
indemnifying the Buyer for itself and as trustee for the Company against
all costs and expenses which it or they may properly incur in connection
with such assistance.
7.4 Where the Buyer or the Company, is entitled to recover from some other
person any sum in respect of a Warranty Claim, the Buyer shall or shall
procure that the Company, shall take such action as the Seller may
reasonably request to enforce such recovery and any amount so recovered
shall be take into account in determining the liability of the Seller in
respect of any related Relevant Claim.
76
8. MITIGATION
Nothing in this Schedule shall in any way restrict or limit the general
obligation at law of the Buyer and the Company to mitigate any loss or
damage which it may suffer in consequence of any breach by the Seller of
the terms of this Agreement.
9. NO RESCISSION: REMEDY IN DAMAGES
The Buyer shall have no right to rescind or terminate this Agreement for
any reason whatsoever. After Completion the Buyer's sole remedy for any
breach by the Seller of any of the terms of this Agreement (including a
Relevant Claim) or under the provisions of the Xxxxxxxxxxxxxxxxx Xxx 0000
shall be against the Seller in damages and any such remedy shall be subject
to the limitation contained in this Agreement.
10. REDUCTION IN CONSIDERATION
Payments made by the Seller to the Buyer pursuant to this Agreement shall
constitute a repayment of and a reduction in the consideration for the
Shares.
11. THIRD PARTY RECOVERY
11.1 If, before the Seller has made a payment in respect of a Relevant Claim
(other than a claim under the Tax Deed), the Buyer and/or the Company shall
recover or be finally entitled to recover (whether by payment, discount,
credit or otherwise including from insurers or any Taxation Authority) any
sum by reason of or in respect of the matter giving rise to the Relevant
claim the Buyer and/or the Company shall take such recovery (less any
reasonable costs and expenses properly incurred in relation to such
recovery) into account in determining the amount of the Relevant Claim.
11.2 If the Seller has made any payment of a Relevant Claim (other than a claim
under the Tax Deed) and the Buyer and/or the Company subsequently receives
a benefit which was not taken into account in determining any liability of
the Seller in respect of the Relevant Claim and which would have reduced
such liability had the benefit been taken into account (including under any
insurance) the Buyer (for itself or on behalf of the relevant company as
the case may be) shall immediately repay to the Seller an amount equal to
the lesser of:-
77
11.2.1 an amount corresponding to the benefit (including the amount of
any such refund but, in all cases, after deduction of any
reasonable costs or expenses properly incurred in such recovery
as well as all Taxation on such amount); and
11.2.2 the payment by the Seller to the Buyer in respect of the Relevant
Claim.
12. GUARANTEES
The following provisions of this paragraph shall apply to the guarantees,
indemnities, undertakings and agreements listed in the Disclosure Letter
("Guarantees"). The Buyer shall procure the release of the Seller from the
Guarantees as soon as reasonably practicable or by such later date as the
Seller may in its absolute discretion agree. The Buyer undertakes to the
Seller that it will indemnify the Seller and keep the Seller indemnified
from and against any and all liability (including in respect of claims,
proceedings, costs and interest) in relation to any claims made, or
obligations arising, after Completion under or pursuant to any of the
Guarantees. The Buyer agrees to use its best efforts to procure the release
of the Seller from any other guarantees, indemnities, undertakings and
agreements to the extent they relate to the Company subject to being
satisfactorily indemnified by the Seller in respect of any cost associated
with such efforts.
13. TAX DEED
If any limits on the liability of the Seller under the Tax Deed conflict
with the provisions of this Schedule then the provisions of the Tax Deed
shall prevail.
14. NO OTHER REPRESENTATIONS
The Buyer confirms that it has not entered into this Agreement in reliance
upon any representation or promise other than the Warranties.
78
SCHEDULE 5
THE PROPERTY
Leasehold Property
Unit A, The Beacons, Xxxxxxxxxxxx Xxxx, Xxxxxxxx, Xxxxxxxxxxxxx, XX00 0XX
Freehold Property
None
79
SCHEDULE 6
LICENSED INTELLECTUAL PROPERTY
Service Xxxx User Agreement dated 1/st/ January 2001 made between Link
Interchange Network Limited (1) and the Company (2).
Trademark Licence Agreement dated 10/th/ June 2002 made between Visa
International Service Association (1) and the Company (2).
80
SCHEDULE 7
CONSIDERATION ADJUSTMENT
PART I - 2002 AUDITED ACCOUNTS
1. The Seller shall procure that draft 2002 Audited Accounts and Statement
of Working Capital Value are prepared as soon as practicable following 31
December 2002 and, in any event, by no later than 31 March 2003.
2. Except as otherwise agreed in Part III of this Schedule 7, the draft 2002
Audited Accounts shall exclude any effects of the changes in control or
ownership contemplated by this Agreement, shall be prepared on the going
concern basis and shall take no account of post balance sheet events or
information occurring or becoming available after the delivery of the
draft 2002 Audited Accounts by the Seller to the Buyer.
3. The 2002 Audited Accounts shall be prepared on a basis which is
consistent with the manner in, and the principles, bases and policies on
which the Accounts were prepared and, in accordance with generally
accepted accounting standards in England and Wales. The Buyer shall
provide the Seller's Accountants with access to all documentation,
information and data in or relating to the Company reasonably considered
appropriate by the Seller's Accountants in order to prepare and audit the
2002 Audited Accounts.
4. When draft 2002 Audited Accounts have been prepared, the Seller shall
promptly deliver a copy of the draft 2002 Audited Accounts and Statement
of Working Capital Value to the Buyer for review.
5. Within 15 Business Days after the Seller has delivered the draft 2002
Audited Accounts to the Buyer, the parties shall procure that the
Auditors and the Seller's Accountants meet to review the draft 2002
Audited Accounts and to satisfy themselves that they have been duly
prepared in accordance with this Agreement and that the Statement of
Working Capital Value has been correctly stated. The Seller shall
promptly provide, and render or cause the provision and rendering to the
Buyer of such information and assistance as the Buyer may reasonably
require for the purposes of agreeing the 2002 Audited Accounts and the
Statement of Working Capital Value. The Buyer shall then, within 10
Business Days following such meeting either:
81
5.1 confirm in writing (a "Satisfaction Notice") to the Seller that
they agree that the draft 2002 Audited Accounts have been duly
prepared and that the Working Capital Value has been correctly
stated; or
5.2 give notice in writing (a "Dissatisfaction Notice") to the
Seller explaining in reasonable detail why they are unable so to
confirm.
6. If the Buyer fails to give a Satisfaction Notice or a Dissatisfaction
Notice when required, the draft 2002 Audited Accounts and the Statement
of Working Capital Value shall be deemed to have been finally accepted
and agreed by the Seller and the Buyer.
7. If the Buyer gives a Dissatisfaction Notice the parties shall endeavour
to resolve all matters in dispute as soon as is practicable.
8. If the parties fail to resolve such matters within 10 Business Days of
the date of the giving of the Dissatisfaction Notice (the "Resolution
Period") any party may refer all matters in dispute for resolution to an
independent chartered accountant (the "Accountant").
9. The identity of the Accountant shall be agreed between the parties and he
shall be appointed within five Business Days of the expiry of the
Resolution Period (the "Appointment Period"). If there is a failure to
appoint the Accountant within the Appointment Period, the Accountant
shall be appointed by the President for the time being of the Institute
of Chartered Accountants in England and Wales within five Business Days
of the expiry of the Appointment Period, on the application of either the
Buyer or the Seller.
10. The Accountant shall be instructed to determine the dispute in accordance
with the provisions of this Schedule 7 and to make such determination as
soon as is practicable and, in any event, within 20 Business Days of his
being instructed. In making such determination the Accountant shall act
as an expert and not as an arbitrator and his decision shall (in the
absence of manifest error) be final and binding on the parties.
11. The costs of the Accountant shall be borne by the parties in the
proportions the Accountant may direct or, in the absence of direction, as
to one half by the Buyer and as to the other half by the Seller.
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PART II - CONSIDERATION RETENTION
1. The Consideration Retention (together with any interest accrued in the
Consideration Retention Account) shall be applied in accordance with the
provisions of this Schedule 7 Part II.
2. If the Working Capital Value is not more than (pounds)30,000 less than
the Target Working Capital Value, the parties shall procure that the
Consideration Retention is released to the Seller's Solicitors on the
Consideration Retention Release Date provided that, if at such time an
Agreed Claim or an Unagreed Claim remains unsatisfied in whole or in
part, the provisions of paragraph 11 below shall apply.
3. If the Working Capital Value is more than (pounds)30,000 less than the
Target Working Capital Value, the parties shall procure that on the
Consideration Retention Release Date:
3.1 the Consideration Retention or, if less, an amount of the
Consideration Retention equal to the amount of the Adjustment
shall be released to the Buyer's Solicitors; and
3.2 the residue (if any) of the Consideration Retention remaining
(the "Released Amount") shall be released to the Seller's
Solicitors,
provided that, if at such time an Agreed Claim or an Unagreed Claim
remains unsatisfied in whole or in part, the provisions of paragraph 11
below shall apply.
4. The Buyer shall be entitled to deduct the amount of any Agreed Claim
from, the Consideration Retention or the Released Amount (as the case may
be) prior to its release and any deduction shall pro tanto satisfy the
liability concerned.
5. If an Unagreed Claim is made prior to the release of the Consideration
Retention or the Released Amount (as the case may be), the Buyer shall
use all reasonable endeavours to quantify the maximum amount of such
Unagreed Claim (if capable of estimation) and shall notify the Seller in
writing of the estimated amount of such Unagreed Claim (the "Estimate")
or of the fact that the same is incapable of estimation.
6. If the maximum amount of any Unagreed Claim is so estimated, the parties
shall procure that the amount (if any) by which the balance of the
Consideration Retention or the Released Amount (as the case may be)
83
exceeds the aggregate of the Estimates of all such Unagreed Claims shall
be released to the Seller's Solicitors on the Consideration Retention
Release Date (or, if later, within ten Business Days of the date on which
the Estimate or, if more than one Unagreed Claim has been made, of the
date on which the aggregate of the Estimates has been notified).
7. If the maximum amount of any Unagreed Claim cannot be quantified, the
Consideration Retention or the Released Amount (as the case may be) shall
be held in the Consideration Retention Account until such time as all
Unagreed Claims are finally settled or otherwise determined.
8. Upon the final settlement or determination of all Unagreed Claims, the
parties shall procure that the balance of the Consideration Retention or
the Released Amount (as the case may be) shall immediately be applied in
or towards the discharge of the amount agreed or determined to be payable
to the Buyer in respect of all such Unagreed Claims and the residue (if
any) remaining after the complete discharge of such Unagreed Claims shall
be released to the Seller's Solicitors.
9. The receipt of the Buyer's Solicitors or the Seller's Solicitors of any
payment made out of the Consideration Retention Account shall be an
absolute discharge of the paying party.
10. The parties shall promptly give to the Seller's Solicitors and the
Buyer's Solicitors all written instructions as shall be necessary to give
effect to the provisions of this Schedule 7 Part II.
11. Interest which accrues on the Consideration Retention Account shall
follow the capital and be released to the party or parties entitled the
capital contemporaneously with, and proportionately to, the release of
the capital (subject to deduction of tax as required by law).
Further Adjustment
12. If, on the Consideration Retention Release Date, the amount of the
Adjustment is greater than the amount of the Consideration Retention, the
Seller shall, in addition to the release of that part of the
Consideration Retention as is to be paid to the Buyer's Solicitors in
accordance with paragraph 4, pay a cash amount equal to the Adjustment
less the Consideration Retention to the Buyer's Solicitors and the
receipt of the Buyer's Solicitors of such payment shall be an absolute
discharge of the Seller.
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13. Each of the Parties agrees to pursue all matters relating to any Unagreed
Claim promptly and with a view to resolving such matter as soon as
reasonably practicable.
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PART III - WORKING CAPITAL VALUE
"Working Capital Value" shall mean the sum of the following Total Asset Balances
less the sum of the following Total Liability Balances, as determined from the
2002 Audited Accounts, subject to the adjustments set forth below.
Cash & Cash equivalents
Trade receivables
Prepayments & other Debtors
Total Asset Balances
Accounts payable
Accrued expenses
Other creditors
VAT
Taxes
Total Liability Balances
Working Capital Value
Adjustments to the above table.
The following adjustments will apply in calculating the Working Capital Value
irrespective of any otherwise applicable accounting policies and procedures:
1. All obligations under financing leases, hire purchase contracts and
intercompany items shall be excluded from the Working Capital Value.
2. In Prepayments and other debtors intercompany insurance shall be zero.
3. No provision will be made for the costs borne by the Seller under 9.3.
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SCHEDULE 8
ASSUMED LEASING LIABILITIES
All NCR leasing liabilities in respect of ATMs operated by the Company totalling
(pounds)1,458,058.
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EXECUTED and DELIVERED as a DEED )
by THE SELLER )
Duly authorised signatory
..................................
EXECUTED and DELIVERED as a DEED )
by THE BUYER )
acting by: )
Director
..................................
Director/Secretary
..................................
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EXECUTED and DELIVERED as a DEED )
by THE SELLER'S GUARANTOR )
Duly authorised signatory
...............................
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CONTENTS
Clause Page
1. Interpretation
2. Sale of Shares
3. Consideration
4. Completion
5. Warranties
6. Protection of goodwill
7. Confidentiality
8. Announcements
9. Costs
10. Post-Completion arrangements
11. Capacity and Shares
12. Indemnities and Guarantee
13. Applicable law and jurisdiction
14. General
15. Notices
SCHEDULES
1 The Company
2 Completion obligations
3 Warranties
4 Limitations on Claims
5 Property
6 Licensed Intellectual Property
7 Consideration Adjustment
8 Assumed Leasing Liabilities
DOCUMENTS IN THE APPROVED TERMS
1 Driving Contract
2 Tax Deed
3 Powers of attorney
4 Letters of resignation
5 Press Release
6 Foreign legal opinions
7 Board resolutions
8 Comfort Letters
9 Transitional Services Agreement
10 Retention Account Letters
11 Due Diligence Report
ANNEXURES
1 Accounts
2 Management Accounts
3 Agreed Bundle
