EXHIBIT 4.4
DATED 1998
SHARE ACQUISITION AGREEMENT
CLARENDON TRUST COMPANY LIMITED
XXXXX XXXXXXXXXXXXX (1)
PAREXEL INTERNATIONAL CORPORATION (2)
000 XXXXXX, XXXXXX XX0X 0XX
TEL: 0000 000 0000 FAX: 0000 000 0000
Ref: RWE/0644959.01
CONTENTS
No Heading Page
1. DEFINITIONS 1
2. THE SHARES 12
3. REPAYMENT BY VENDORS AND THE COMPANY 12
4. COMPLETION 13
5. WARRANTIES 15
6. TAX INDEMNITIES 17
7. COMPLIANCE WITH US LAW 17
8. RESTRICTIVE COVENANTS 20
9. PENSION SCHEME 21
10. GENERAL PROVISIONS 21
11. ANNOUNCEMENTS 22
12. COSTS 22
13. NOTICES 22
14. GOVERNING LAW AND JURISDICTION 23
THE FIRST SCHEDULE: PARTICULARS OF THE VENDORS 24
THE SECOND SCHEDULE: BASIC INFORMATION CONCERNING
THE COMPANY 25
THE THIRD SCHEDULE: PROPERTY 26
THE FOURTH SCHEDULE: PROVISIONS AFFECTING THE
PENSION SCHEME 27
THE FIFTH SCHEDULE: WARRANTIES 28
THE SIXTH SCHEDULE: TAX INDEMNITIES 65
THE SEVENTH SCHEDULE: LIMITS ON CLAIMS UNDER WARRANTIES 73
THE EIGHTH SCHEDULE: HOLDBACK 76
THIS AGREEMENT is made the day of 1998
BETWEEN:
(1) THE PERSONS whose names and addresses are set out in
Column (1) of the First Schedule hereto ("the Vendors")
and
(2) PAREXEL INTERNATIONAL CORPORATION (whose principal place
of business is at 000 Xxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxxxxx
00000, XXX ("the Purchaser")
WHEREAS
(A) Genesis Pharma Strategies Limited ("the Company") has an
authorised and issued share capital particulars whereof
together with other details are set out in the Second
Schedule hereto.
(B) The Vendors are the beneficial owners of or are otherwise
able to procure the transfer of the numbers of shares of
the Company specified in Column (2) of the First Schedule
hereto opposite their respective names such numbers of
shares together comprising all the issued and allotted
shares of the Company.
(C) The Vendors are desirous of selling and the Purchaser is
willing to acquire the Shares (as hereinafter defined) on
the terms and subject to the conditions hereinafter
contained.
NOW IT IS HEREBY AGREED as follows:-
1. DEFINITIONS
1.1 In this Agreement and the Schedules hereto the following
expressions shall unless the context otherwise requires
have the meanings following:-
"the Accounts" the audited balance sheet as at the
[Balance Sheet Date] and audited
profit and loss account for the six
months ended on the [Balance Sheet
Date] of the Company including the
directors report and notes in
relation thereto;
"Accounts Reliefs" means any Reliefs where the
availability of the Reliefs has
been shown as an asset in the
Accounts or has been taken into
account in computing (and so
reducing) any provision for
deferred taxation which appears in
the Accounts or has resulted in no
provision for deferred taxation
being shown in the Accounts;
"Accredited Investor" a bank (as defined in Section
3(a)(2) of the Securities Act of
1933, as amended (the 'Act')) or a
savings and loan association or
other institution (as defined in
Section 3(a)(5)(A) of the Act),
whether acting in regard to this
investment in its individual or a
fiduciary capacity;
a broker or dealer registered
pursuant to Section 15 of the
United States Securities Exchange
Act of 1934, as amended;
an insurance company (as defined in
Section 2(13) of the Act);
an investment company registered
under the United States Investment
Company Act of 1940, as amended;
a business development company (as
defined in Section 2(a)(48) of the
Investment Company Act of 1940, as
amended;
a Small Business Development
Company licensed by the United
States Small Business
Administration under Section
301(c) or (d) of the United States
Small Business Investment Act of
1958, as amended;
a plan established and maintained
by a United States state, its
political subdivision, or any
agency or instrumentality of a
United States state or its
political subdivisions, for the
benefit of its employees, if the
plan has total assets in excess of
$5,000,000;
an employee benefit plan (an "ERISA
Plan") within the meaning of Title
1 of the United States Employee
Retirement Income Security Act of
1974, as amended ("ERISA") whose
decision to purchase the interest
in the Purchaser was made by a plan
fiduciary (as defined in Section
3(21) of ERISA), which is either a
bank, savings and loan association,
insurance company or registered
investment adviser;
an ERISA Plan with total assets in
excess of $5,000,000 or, if a self-
directed ERISA Plan, with
investment decisions made solely by
persons that are "accredited
investors";
a private business development
company (as defined in Section
202(a)(22) of the United States
Investment Advisors Act of 1940, as
amended);
an organisation described in
Section 501(c)(3) of the United
States Internal Revenue Code of
1986, as amended, corporation,
Massachusetts or similar business
trust, or partnership, not formed
for the specific purpose of holding
the Shares of the Company or
acquiring the Consideration Shares,
with total assets in excess of
$5,000,000;
a natural person whose net worth
(either individually or jointly
with such person's spouse) at the
time of Completion exceeds
$1,000,000;
a natural person who had an
individual income in excess of
$200,000 or joint income with such
person's spouse in excess of
$300,000 in each of the last two
calendar years and who reasonably
expects to reach the same income
level in the current calendar year;
a trust, with total assets in
excess of $5,000,000, not formed
for the specific purpose of holding
the Shares of the Company or
acquiring the Consideration Shares,
whose purchase of the Consideration
Shares is directed by a
sophisticated person as described
in Rule 506(b)(2)(ii) under the
Act;
an entity in which all of the
equity owners fit into at least one
of the categories listed above;
"Associate" any person or company who is a
connected person as that expression
is defined by Section 839 of the
ICTA;
"the Balance Sheet Date" 30 November 1997;
"Business day" a day on which banks shall be open
in London for the conduct of
general banking business (excluding
Saturdays);
"Tax Claim" in the Sixth Schedule hereto shall
mean any claim, assessment, notice,
demand letter or other document
issued or action taken by or on
behalf of any Taxation Authority
whereby it appears that the Company
or the Purchaser is to be or is
sought to be made subject to a
Liability to Taxation;
"the Consideration Shares" 91,667 Common Stock of
US$0.01 each of the Purchaser
(ranking pari passu with the Common
Stock of the Purchaser in issue at
Completion and credited as fully
paid);
"the Companies Acts" the Companies Acts 1985 and 1989,
the Insolvency Xxx 0000, the
Business Names Xxx 0000, the
Criminal Justice Xxx 0000 and every
statutory modification or re-
enactment thereof for the time
being in force;
"Completion" completion of the obligations of
the parties hereunder in accordance
with the provisions of Clause 4
hereof;
"the the letter of even date herewith
Disclosure Letter" from the Vendors to the
Purchaser a copy of which is
annexed hereto;
"Encumbrance" includes any interest or equity of
any person (including, without
prejudice to the generality of the
foregoing, any right to acquire,
option or right of pre-emption), or
any mortgage, charge, pledge, lien,
assignment, hypothecation, security
interest, title retention or any
other security agreement or
arrangement;
"Event" includes (without limitation) any
act omission, transaction or
shortfall in distributions whether
or not the Company is a party
thereto and includes Completion;
"Independent Accountant" means such person who shall
be nominated by either party upon
agreement or failing agreement by
the President for the time being of
the Institute of Chartered
Accountants;
"Industrial Property Rights" patents, trade marks,
registered designs, pending
applications for any of the
foregoing, trade or business names
and copyright and design rights;
"Liability to Taxation"a liability to make an actual
payment of Taxation whether or not
such Taxation is also or
alternatively chargeable against or
attributable to any other person
and whether or not any member of
the Group shall or may have any
right of recovery or reimbursement
against any other person;
"Nasdaq" National Association of Securities
Dealers, Inc.Automated Quotation
System;
"New Reliefs" any Reliefs which arise to the
Company :
(a) as a result of any Event
occurring after the Balance Sheet
Date; or
(b) in respect of any period
commencing on or after the Balance
Sheet Date;
"the Property" the property or properties short
particulars whereof are set out in
the Fourth Schedule hereto and
includes any part or parts thereof
together with any property used by
the Company and a place of business
in any Relevant Country;
"the Purchaser's Solicitors" Xxxxxxxx Xxxxxx;
"Registration agreement in the approved terms
Rights between certain of the parties
Agreement" hereto to be entered into at
Completion attached as appendix
'A' hereto;
"Relevant Country" means any country in which any
member of the Group has a place of
business, including, but not
limited to the United Kingdom, the
United States of America;
"Reliefs" in the Eighth Schedule hereto means
all amounts available to reduce
either profits or Taxation and
includes (without limitations) all
losses allowances exemptions set-
offs deductions credits and
repayments;
"SEC" the United States Securities and
Exchange Commission;
"the Service Agreement"the existing agreements (as
amended) between the Company and
Xxxxx Xxxxxxxxxxxxx to be entered
into at Completion attached as
appendix 'B' hereto;
"the Shares" the shares of the Company specified
in Column (2) of the First Schedule
hereto;
"Taxation" means:-
(a) any charge, tax, duty,
levy or liability imposed by
national or local government
or any other person pursuant
to any statute or statutory
provision or equivalent
legislation in any country
including orders, regulations,
instruments, bye-laws or other
subordinate legislation made
under the relevant statute or
statutory provision or
equivalent legislation in any
country and includes (without
limitation) corporation tax,
advance corporation tax,
income tax, capital gains tax,
development land tax, value
added tax, customs and other
import duties, national
insurance contributions, stamp
duty, capital duty, stamp duty
reserve tax, estate duty,
capital transfer tax,
inheritance tax and any amount
which the Company is liable to
account for by way of
deduction or withholding,
amounts equivalent to the
foregoing and any payment
whatsoever chargeable in any
country which the Company may
be or become bound to make to
any person as a result of the
operation of any enactment
relating to Taxation;
(b) any capital transfer
tax or inheritance tax which:-
(i) is at the date
hereof a charge over any
of the shares of the
Company; or
(ii) at the date hereof
gives rise to a power of
sale over the shares of
the Company; or
(iii) after the date
hereof becomes a charge
on or gives rise to a
power of sale over any of
the shares of the Company
being a liability in
respect of additional
capital transfer tax or
inheritance tax payable
on the death of any
person within three years
or seven years after a
transfer of value or gift
and in deciding whether a
charge on or power of
sale over any of the
shares exists at any time
the fact that any capital
transfer tax or
inheritance tax is not
yet payable or may be
paid by instalments shall
be disregarded and such
tax shall be treated as
becoming due and a charge
or power of sale as
arising on the date of
the transfer of value or
capital distribution in
respect of which it
becomes payable or arises
and the provisions of
IHTA S213 shall not apply
thereto;
(c) any Taxation assessed
on the Vendors under ICTA S776
which is recoverable from the
Purchaser and/or the Company
pursuant to the provisions of
S777(8) of that Act to the
extent the Vendors make a
claim for recovery from the
Purchaser and/or the Company;
(d) subject to paragraph 5
of the Sixth Schedule any
penalties fines costs charges
interest or damages payable in
connection with any Taxation;
(e) subject to paragraph 5
of the Sixth Schedule any
payment made or liability
incurred in connection with
any reasonable settlement of
any Tax Claim;
(f) all costs and expenses
reasonably incurred by the
Company or the Purchaser in
connection with any Tax Claim
to which the Tax Indemnities
relate;
"Taxation Authority" any national or local government,
authority or body whatsoever
whether of a Relevant Country or
elsewhere empowered to impose
collect or administer Taxation;
"Tax Indemnities" the indemnities provided by Clause
7 and the Sixth Schedule hereto;
"Taxation Statute" any statute, enactment, law,
regulation or practice enacted or
issued or coming into force
providing for or imposing any
Taxation;
"Vendor Representative"means any person who satisfies all
of the following conditions
(a) is not an affiliate,
director, officer or other
employee of the Purchaser or
beneficial owner of 10% or
more of any class of the
equity securities or 10% or
more of the equity interest of
the Purchaser'
(b) has such knowledge and
experience in financial and
business matters that he is
capable of evaluating, alone
or together with other Vendor
Representatives of the Vendor,
or together with the Vendor,
the merits and risks of the
prospective investment in
Purchaser;
(c) is acknowledged by the
Vendor in writing, during the
course of the transaction, to
be his Vendor Representative
in connection with evaluating
the merits and risks of the
prospective investment in the
Purchaser; and
(d) discloses to the Vendor
in writing a reasonable time
prior to the sale of
securities of the Purchaser to
that Vendor any material
relationship between himself
or his affiliates and the
Purchaser that then exists,
that is mutually understood to
be contemplated, or that has
existed at any time during the
previous two years, and any
compensation received or to be
received as a result of such
relationship.
"the Vendors' Solicitors" Xxxxxx Xxxxx Xxxxxxx Xxxxxx;
"Warranties" those representations and
warranties made to the Purchaser
contained or referred to in Clauses
5 and 7 and the Fifth Schedule
hereto;
"ICTA" the Income and Corporation Taxes
Xxx 0000;
"CAA" the Capital Xxxxxxxxxx Xxx 0000;
"IHTA" the Inheritance Tax Xxx 0000;
"FA" Finance Act;
"TCGA" the Taxation of Chargeable Gains
Xxx 0000;
"VATA" the Value Added Tax Xxx 0000;
"TMA" the Taxes Management Xxx 0000.
1.2 References to the consequences of acts or transactions
effected prior to Completion shall include the combined
effect of two or more acts or transactions the first of
which shall have taken place or be deemed to have taken
place on or before the date of Completion. Reference to
the result of Events on or before Completion shall include
the combined result of two or more Events the first of
which shall have taken place or is deemed to have taken
place on or before Completion.
1.3 The expression "the Vendors" includes their respective
personal representatives.
1.4 Any document expressed to be "in the approved terms" means
in a form approved and for the purpose of identification
signed by or on behalf of the parties hereto.
1.5 Where any Warranty or matter disclosed in the Disclosure
Letter refers to the knowledge information awareness or
belief of a Vendor, each of the Vendors shall be deemed to
have made all reasonable enquiries into the subject matter
of that Warranty or Disclosure.
1.6 The expression "Subsidiary" shall mean any subsidiary (as
defined by Section 736 of the Companies Xxx 0000 (as
amended by the Companies Act 1989)) for the time being of
the Company having its principal place of business in the
UK or otherwise.
1.7 References to Clauses, Sub-clauses and Schedules are
references to Clauses and Sub-clauses of this Agreement
and Schedules to this Agreement.
1.8 In this Agreement and the Schedules hereto the masculine
gender shall include the feminine and neuter, the singular
number shall include the plural and vice versa, and
references to persons shall include bodies corporate,
unincorporated associations and partnerships.
1.9 In this Agreement words and phrases the definition of
which is contained or referred to in Part XXVI of the
Companies Xxx 0000 shall be construed as defined therein.
1.10 References in this Agreement to any statute or statutory
provision shall include (except where the context
otherwise requires) any statute or statutory provision
which amends extends consolidates or replaces the same and
any statute or statutory provision which has been amended,
extended, consolidated or replaced by the same and shall
include any order, regulation, instrument or other
subordinate legislation made under the relevant statute or
statutory provision except where and to the extent that
any liability of the Vendors under this Agreement would be
created or extended as a result of any amendment,
extension, consolidation or replacement of any statute or
statutory provision in force at Completion.
1.11 The headings in this Agreement are inserted for
convenience only and shall not affect the construction
hereof.
1.12 Reference to income or profits or gains earned accrued or
received shall include income or profits or gains deemed
to have been or treated as or regarded as earned accrued
or received for the purposes of any Taxation Statute.
2. THE SHARES
2.1 The Vendors shall sell and the Purchaser shall acquire
with effect from Completion the Shares free from any
Encumbrance and together with all accrued benefits and
rights for the consideration described in sub-clause 2.2
below ("the Consideration").
2.2 The Consideration shall be satisfied by the allotment and
issue (subject to sub-clause 2.3 below) to the Vendors of
the Consideration Shares in the amounts set against each
of their names in column 3 of the First Schedule.
2.3 A proportion of the Consideration Shares amounting in
aggregate to 10% of the total Consideration Shares shall
not be delivered to the Vendors on Completion but shall be
withheld by the Purchaser on the terms and conditions set
out in the Eleventh Schedule.
3. REPAYMENT BY VENDORS AND THE COMPANY
3.1 The Vendors will prior to or simultaneously with
Completion repay to the Company any sums due by the
Vendors, any Associate of the Vendors or any of them (or
by any person to whom they or any of them are or is a
trustee or personal representative) to the Company at
Completion and shall at Completion procure that neither
they nor any such person as aforesaid has any claim or
right of action against the Company (other than in respect
of current remuneration as directors or executives) and
that the Company is not in any way obliged or indebted
(other than as aforesaid) to them or any such person and
at Completion the Vendors will confirm in writing to the
Purchaser that they have so procured.
3.2 The Vendors and/or the Company will prior to or
simultaneously with Completion repay all outstanding debt
(whether accrued due or not) other than amounts due to
trade creditors in the ordinary course of business.
4. COMPLETION
4.1 Completion shall take place on March 1, 1998 at the
offices of the Purchaser's Solicitors or such other
offices as the parties may subsequently agree when:-
4.1.1 the Vendors shall deliver or cause to be delivered
to the Purchaser:-
(a) duly executed transfers together with the
relative share certificates in respect of the
Shares;
(b) the certificate of incorporation, all
certificates on change of name, the seal and
statutory books of the Company made up to the
date of Completion;
(c) such Title Deeds to the Property as are
available;
(d) if the Purchaser so requires an effective
waiver by each of the members of the Company of
any rights which he may have under the Articles
of Association of the Company to have the
Shares or any of them offered to him for
purchase and any other documents necessary to
substantiate the right of the transferors of
the Shares pursuant to this Agreement to
transfer the same;
(e) written confirmation pursuant to Clause 3; and
(f) written resignation letters executed under seal
by such of the directors and secretaries of the
Company and the Subsidiaries as the Purchaser
may nominate, each such letter incorporating an
acknowledgement that the party resigning has no
claims (whether for compensation for loss of
office or termination of employment, unpaid
remuneration or otherwise howsoever) against
the Company;
(g) written resignation letter of Xxxxx Xxxxxxxx as
auditor together with a statement in accordance
with S.394 Companies Act confirming that there
are no circumstances which he considers should
be brought to the attention of the members or
creditors of the Company;
(h) signed opinion from Xxxxx Xxxxxxxx that
transaction qualifies for pooling of interests
accounting treatment;
(i) signed opinion from Xxxxx Xxxxxxxx in relation
to the Accounts.
4.1.2 the Vendors shall procure that the Directors shall
hold a meeting of the Board of the Company at which
(a) the Directors shall appoint such persons as the
Purchaser may nominate as directors of the
Company and procure the resignation without
compensation of any nature whatsoever of such
of the Directors and Secretary of the Company
as the Purchaser may nominate;
(b) the Directors shall vote in favour of the
registration of the Purchaser or its nominees
as members of the Company subject to the
production of duly stamped and completed
transfers;
(c) there shall be presented the written
resignation of the auditors which shall contain
a statement that there are no circumstances
connected with such resignation which they
consider should be brought to the attention of
the shareholders or creditors of the Company
and a statement of the amount of their
outstanding fees and costs;
(d) Messrs Price Waterhouse shall be appointed
Auditors to the Company;
(e) the Directors shall approve the Service
Agreements;
4.1.3 the Vendors shall procure that the Company will and
the other party thereto shall enter into the
Service Agreement;
4.1.4 Subject to the performance by the Vendors of their
obligations in accordance with the foregoing
provisions of this Clause 4 and subject to the
provisions of Clause 2.3 the Purchaser shall allot
to each of the Vendors the number of Consideration
Shares to which he is entitled hereunder and
deliver the relative documents of title; and
4.1.5 each of the parties will enter into the
Registration Rights Agreement.
4.2 If in any respect the provisions of sub-clauses 4.1.1,
4.1.2, 4.1.3 and 4.1.4 are not complied with on the date
for Completion set by clause 4.1 the Purchaser may:-
4.2.1 defer Completion to a date not more than 28 days
after the date set out above (and so that the
provisions of this sub-clause shall apply to
Completion as so deferred); or
4.2.2 proceed to Completion so far as practicable
(without prejudice to its rights hereunder); or
4.2.3 rescind this Agreement.
4.3 If in any respect the provisions of sub-clause 4.1.5 are
not complied with on the date for Completion set by Clause
4.1, the Vendors may:-
4.3.1 defer Completion to a date not more than 28 days
after the date set out above (and so that the
provisions of this sub-clause shall apply to
Completion as so deferred); or
4.3.2 proceed to Completion so far as practicable
(without prejudice to its rights hereunder); or
4.3.3 rescind this Agreement.
5. WARRANTIES
5.1 The Vendors hereby warrant and represent to the Purchaser
in the terms of the Warranties.
5.2 In particular and without prejudice to the generality of
sub-clause 5.1 the Vendors hereby warrant and represent to
the Purchaser that the recitals to this Agreement and the
Warranties are at the date hereof and will at Completion
be true and accurate in all respects.
5.3 Any references in the Fifth Schedule, the Sixth Schedule
or elsewhere in this Agreement to any statutory provision,
regulation or accounting principles applying in England
and Wales shall be deemed to include references to any
equivalent provision, regulation or accounting principles
in any Relevant Country and any references to any
governmental or administrative authority or agency shall
include references to any equivalent governmental or
administrative authority or agency in any Relevant
Country.
5.4 The Purchaser shall not be entitled to claim that any fact
renders any of the Warranties untrue or misleading or
caused them to be breached if it has been fairly and
accurately disclosed in all material respects to the
Purchaser in the Disclosure Letter.
5.5 The Vendors hereby covenant and undertake to the Purchaser
that, if after the date hereof it shall be found that any
matter the subject of a Warranty was not as warranted
then, notwithstanding any further right of the Purchaser
hereunder in respect of such breach of Warranty, if the
effect thereof is that:-
5.5.1 the value of any asset belonging to the Company is
less than its value would have been had there been
no breach of Warranty; or
5.5.2 any asset represented as belonging to the Company
does not so belong; or
5.5.3 the Company has incurred or is under any liability
or contingent liability which it would not have
incurred or been under had there been no breach of
Warranty;
then the Vendors shall on demand account to the Purchaser
pursuant to the provisions of the Eighth Schedule for an
amount equal to the amount by which the value of the net
assets of the Company are less than they would have been
had there been no such breach of Warranty and any such
settlement made by the Vendors shall be taken into account
in assessing the damages of the Purchaser in connection
with, arising out of or resulting from any such breach of
Warranty.
5.6 No claim by the Purchaser under the provisions of this
Clause 5 shall be prejudiced nor shall the amount of any
such claim be reduced in consequence of any information
relating to the Company which may at any time have come to
the knowledge of the Purchaser or any of its advisers
(other than information contained in the Disclosure Letter
and any annexure thereto) and it shall not be a defence to
any claim against the Vendors that the Purchaser knew or
ought to have known or had constructive knowledge of any
information (other than information contained or supplied
as aforesaid) relating to the circumstances giving rise to
such claim.
5.7 The Warranties are separate and independent and save as
expressly provided in this Agreement or in the Disclosure
Letter shall not be limited by reference to any other
paragraph or anything in this Agreement and such
Warranties shall remain in full force and effect
notwithstanding Completion.
5.8 The Vendors undertake to indemnify the Purchaser against
any reasonable costs (including legal costs on a solicitor
and own client basis) and expenses which the Purchaser may
reasonably incur either before or after the commencement
of any action in connection with:
5.8.1 the settlement of any claim brought on reasonable
grounds that any of the Warranties are untrue or
misleading or have been breached;
5.8.2 any legal proceedings in which the Purchaser claims
that any of the Warranties are untrue or misleading
or have been breached and in which judgment is
given for the Purchaser; or
5.8.3 the enforcement of any such settlement or judgment.
5.9 The Vendors undertake (in the event of any claim being
made against any of them in connection with the sale of
the Shares to the Purchaser) not to make any claim against
the Company, or a director or an employee of the Company
(other than a Vendor), on whom any of them may have relied
before agreeing to any term of this Agreement or
authorising any statement in the Disclosure Letter but so
that this shall not preclude any Vendor from claiming
against any other Vendor under any right of contribution
or indemnity to which he may be entitled, and each Vendor
hereby agrees to consent to the grant of injunctive relief
to restrain a breach of the undertaking contained in this
sub-paragraph if requested by the Purchaser so to do.
6. TAX INDEMNITIES
The Vendors hereby indemnify the Purchaser in the terms of
the Sixth Schedule hereto.
7. COMPLIANCE WITH US LAW
Each Vendor severally:
7.1 warrants and represents to the Purchaser that the Vendor:-
7.1.1 is acquiring the Consideration Shares for his own
account and not on behalf of any other person, and
the Vendor is acquiring the Consideration Shares
for investment purposes and not with a view towards
distribution and has no present arrangement to sell
the Consideration Shares;
7.1.2 is not an officer or director of any affiliate of
the Purchaser or any of its affiliates;
7.1.3 was not organised for the specific purpose of
holding or acquiring the Consideration Shares (if
the Vendor is a corporation, trust, partnership or
other organisation).
7.1.4 is an Accredited Investor or had, immediately prior
to receipt of any information regarding the
Purchaser, such knowledge and experience (alone or
with such Vendor's Vendor Representative, if any)
in financial and business matters as to be able to
evaluate the merits and risks of an investment in
the Purchaser.
7.1.5 is able now, and was able prior to receipt of any
information regarding the Purchaser, to bear the
economic risks of an investment in the Company and
the Purchaser.
7.2 acknowledges and agrees that the Consideration Shares have
not been registered under United States Securities Act of
1933, as amended ("the Act"), and may not be offered or
sold unless the Consideration Shares are registered under
the Act or an exemption from the registration requirements
of the Act is available;
7.3 acknowledges that the Consideration Shares are being
offered and sold to him in reliance on specific exemptions
from the registration requirements of the United States
Federal and State securities laws and that the Purchaser
is relying upon the truth and accuracy of the
representations, warranties, agreements, acknowledgements
and understandings of the Vendor set forth herein in order
to determine the applicability of such exemptions and the
suitability of Vendor to acquire the Consideration
Shares;
7.4 acknowledges that it is his responsibility to satisfy
himself as to the full observance by this transaction and
the sale of the Consideration Shares to him of the laws of
any jurisdiction outside the United States and that he has
done so;
7.5 acknowledges that in view of the United States Securities
and Exchange Commission, the statutory basis for the
exemption claimed for the transactions would not be
present if the offer and sale of the Consideration Shares
to the Vendor is part of a plan or scheme to evade the
registration provisions of the Act and the Vendor confirms
that this transaction is not part of any such plan or
scheme;
7.6 has received and carefully reviewed (and/or the Vendor's
Vendor Representative, if any, has received and carefully
reviewed) the PPS Transaction Summary, Prospectus dated
January 27, 1998, Annual Report on Form 10-K for the
fiscal year ended June 30, 1997, Quarterly Report on Form
10-Q for the quarter ended September 30, 1997 and December
31, 1997, Current Reports on Form 8-K dated October 23,
1997 and January 27, 1998, 1997 Annual Report to
Stockholders; and Proxy Statement dated October 8, 1997
and the Vendor and Vendor's Vendor Representative, if any
have had a reasonable opportunity to ask questions of and
receive answers from the Purchaser concerning the
Purchaser, and to obtain any additional information
reasonably necessary to verify the accuracy of the
information furnished to the Vendor concerning the
Purchaser and all such questions, if any, have been
answered to the full satisfaction of the Vendor.
7.7 acknowledges that no representations or warranties have
been made to him by the Purchaser or any agent, employee
or affiliate of the Purchaser and in entering into this
transaction the Vendor is not relying upon any
information, other than that contained in this Agreement
or specifically referred to in Clause 7.6, and the results
of independent investigations by the Vendor;
7.8 has not sold, exchanged, transferred, pledged, disposed or
otherwise reduced his risk relative to the Consideration
Shares during the 30 day period preceding the date hereof;
7.9 acknowledges and agrees that this transaction is intended
to be accounted for as a pooling of interests for
financial accounting purposes, and, in that regard the
Vendor hereby agrees with the Purchaser that the Vendor
will not sell, exchange, transfer, pledge, dispose or
otherwise reduce his risk in relation to the Consideration
Shares during the period which begins on the date hereof
and ends at such time as the Purchaser publicly announces
financial results covering at least thirty days of post-
Completion combined operations of the Purchaser and the
Company (the "Pooling Lock-up Period") and the Purchaser
at its discretion, may cause stop transfer orders to be
placed with its transfer agent with respect to the
Consideration Shares during the Pooling Lock-up Period;
7.10 acknowledges and agrees that all offers and sales of the
Consideration Shares shall only be made in compliance with
(i) the Pooling Lock-up Period and (ii) the Purchaser's
xxxxxxx xxxxxxx and black out period policies, as from
time to time in effect and (iii) pursuant to an effective
registration statement under the Act or pursuant to an
exemption from registration under the Act.
8. RESTRICTIVE COVENANTS
8.1 For the purpose of assuring to the Purchaser the full
benefit of the businesses and goodwill of the Company each
of Xxxxxxx S Caswill and Xxxxx Xxxxxxxxxxxxx hereby
undertakes by way of further consideration for the
obligations of the Purchaser under this agreement as
separate and independent agreements that:-
8.1.1 he will not at any time after Completion disclose
to any person or himself use for any purpose and
shall use his reasonable endeavours to prevent the
publication or disclosure of, any information
concerning the confidential business, accounts or
finances of the Company or the Subsidiaries or any
of its clients or customers transactions or
affairs, which may, or may have, come to his
knowledge;
8.1.2 for a period of 2 years after Completion he will
not except as hereinafter mentioned either on his
own account or in conjunction with or on behalf of
any person firm or company carry on or be engaged
concerned or interested in any trade or business
conducted in or from the United States of America
and any country within the European Union which is
similar to or competitive with any trade or
business carried on by the Company within the
period of two years prior to the date of
Completion;
8.1.3 for a period of 2 years after Completion he will
not (save with the prior written consent of the
Purchaser) either on his own account or in
conjunction with or on behalf of any other person
firm or company directly or indirectly:
(a) solicit or entice away from the Company or
employ any officer manager or servant whether
or not such person would commit a breach of his
contract of employment by reason of leaving the
service of the Company; nor
(b) solicit or accept the custom of any person firm
or corporation which during the two years prior
to the date of Completion shall have been a
customer of the Company.
Provided that nothing in this sub-clause shall preclude or
inhibit any person named in Clause 8.1 above from carrying
out his duties pursuant to a service agreement or contract
of employment between himself and the Company.
8.2 The restrictions contained in Clause 8.1 are considered
reasonable by the parties but in the event that any such
restriction shall be found to be void but would be valid
if some part thereof were deleted or the period or area of
application reduced such restriction shall apply with such
modification as may be necessary to make it valid and
effective.
9. PENSION SCHEME
The provisions set out in the Fourth Schedule shall apply.
10. GENERAL PROVISIONS
10.1 The Vendors shall (and shall procure that any other
necessary party shall) execute and do all such documents
acts and things as may be reasonably required by the
Purchaser for securing to or vesting in the Purchaser the
legal and beneficial ownership of the Shares forthwith
upon Completion in accordance with the terms and
conditions of this Agreement.
10.2 The Purchaser shall (and shall procure that any other
necessary party shall) execute and do all such documents
acts and things as may be reasonably required by the
Vendors for securing to or vesting in the Vendors the
legal and beneficial ownership of the Consideration Shares
(subject to Clause 2.3) forthwith upon Completion in
accordance with the terms and conditions of this
Agreement.
10.3 This Agreement shall not be assignable by any party hereto
without the prior written consent of the others save by
the Purchaser to any affiliate of the Purchaser to which
the Shares shall be transferred but notwithstanding any
such transfer the Purchaser shall remain bound by the
obligations contained in this Agreement
10.4 If the benefit of this Agreement is assigned, the
liability of the Vendors shall be no greater than it would
have been if the Purchaser had remained the owners of the
Shares and had retained the benefit of the Warranties.
10.5 The obligations of the Vendors are several (except where
expressly stated otherwise) and such obligations and
undertakings shall be enforceable accordingly.
10.6 This Agreement (together with any document annexed hereto
and signed by or on behalf of the parties hereto)
constitutes the whole Agreement between the parties hereto
and no variations hereof shall be effective unless made in
writing.
10.7 The provisions of this Agreement in so far as the same
shall not have been performed at Completion shall remain
in full force and effect.
10.8 Any right of rescission conferred upon either party hereby
shall be in addition to and without prejudice to all other
rights and remedies available to it and no exercise or
failure to exercise such a right of rescission shall
constitute a waiver by that party of any such other right
or remedy.
10.9 The Purchaser may release or compromise the liability of
any of the Vendors hereunder or grant to any Vendor time
or other indulgence without affecting the liability of any
other Vendor hereunder.
10.10 None of the provisions of this Agreement which are
relevant restrictions as that term is defined by the
Restrictive Trade Practices Act 1976 shall come into
effect until the day following the day on which full
particulars of this Agreement have been furnished to the
Office of Fair Trading in accordance with the said Act.
10.11 Any party executing this Agreement in its capacity as
trustee hereby warrants and represents to the Purchaser
that its performance of this Agreement will not constitute
a breach if any terms of the trust deed under which he/it
is appointed and that he/it is fully empowered to perform
(or procure the performance of) each and every obligation
imposed hereunder.
11. ANNOUNCEMENTS
No party to this Agreement shall make any statement or
announcement in connection with this transaction except
with the prior approval of the other party save as may be
required by law or save to the extent necessary to comply
with the requirements of the SEC or Nasdaq. A party to
this Agreement who makes a statement or announcement
necessary to comply with the requirements of the SEC or
Nasdaq shall use its reasonable endeavours to consult with
the other parties before making that statement or
announcement.
12. COSTS
Each party to this Agreement shall pay its own costs of
and incidental to this Agreement and the sale and purchase
hereby agreed to be made.
13. NOTICES
Any notice required to be given by any party hereto to any
other shall be in writing and may be served personally or
by post or by facsimile and if served by post shall be
served by prepaid registered letter sent through the post
(airmail if overseas) to the address of the party to be
served as shown in this Agreement or such other address as
may from time to time be notified for this purpose and any
notice so served shall be deemed to have been served 48
hours after the time on which it is posted or 96 hours
after the time on which it was posted in the case of
airmail post and in proving such service it shall be
sufficient to prove that the notice was properly addressed
and posted and that before the notice is sent by post a
copy shall be sent by facsimile to the Vendor's Solicitors
for the attention of Mr XX Xxxxxxx. If served by
facsimile, notice shall be deemed to have been served upon
transmission of the communication to the relevant
facsimile number and production by the sending facsimile
machine of a transmission report showing that the
facsimile message has been properly received by the
facsimile number to which it was transmitted.
14. GOVERNING LAW AND JURISDICTION
This Agreement shall be governed by English law and the
parties hereby submit to the non-exclusive jurisdiction of
the English Courts.
AS WITNESS whereof this Agreement has been entered into the day
and year first above written.
THE FIRST SCHEDULE
PARTICULARS OF THE VENDORS, THEIR SHAREHOLDINGS
IN THE COMPANY AND THE CONSIDERATION
(1) (2) (3)
Names and Addresses No. of Consideration
Ordinary Shares
Shares
Clarendon Trust Company 80 73,334
Limited,
Xxxxxxxx Xxxxx,
00 Xxx Xxxxxx,
Xxxxxx,
XX0 0XX
Xxxxx Xxxxxxxxxxxxx 20 18,333
Kingsway House
Kingsway
Gerrards Cross
Bucks
THE SECOND SCHEDULE
BASIC INFORMATION CONCERNING THE COMPANY
A. The Company : Genesis Pharma Strategies
Limited
1. Registered Number : 3165368
2. Date of incorporation : 28 February 1996
3. Address of registered : Xxxxxxx Xxxxx, 00 Xxxxxx Xxx,
office Beaconsfield, Bucks
4. Authorised share : 1000 pounds sterling
capital
5. Issued and fully paid : 100 ordinary shares of 1 pound sterling each
share capital
6. Directors:
Full Names Addresses
Xxxxxxx Xxxxxx 00 Xxxxxxxxxxx Xxxx,
Xxxxxxxxxxxxx, Xxxxx, XX0 0XX
Xxxxx Xxxxxxxxxxxxx Xxxxxxxx Xxxxx, Xxxxxxxx,
Xxxxxxxx Xxxxx, Xxxxx
0. Secretary:
Xxxxx Xxxxxxxxxxxxx Kingsway House, Kingsway,
Gerrards Cross, Bucks
THE THIRD SCHEDULE
PROPERTY
Short Description of Tenure Expiry of Lease Owner if
Property Leasehold
Highway House Leasehold June 2016 Xxxxxx
Xxxxxx
THE FOURTH SCHEDULE
PROVISIONS AFFECTING THE PENSION SCHEME
There is no pension scheme or similar funding obligation on the
Company.
THE FIFTH SCHEDULE
WARRANTIES
The warranties and representations referred to in Clause 5 of the
foregoing Agreement are that:-
1. CONSTITUTION OF THE COMPANY
1.1 Share Capital
The Company has an authorised and issued share capital as
set out in the Second Schedule and all its issued shares
are beneficially owned by the Vendors in the numbers set
opposite their respective names in the second column of
the First Schedule to the foregoing agreement free from
all liens charges and Encumbrances or interests in favour
of any other person.
1.2 Memorandum and Articles
The copy of the Memorandum and Articles of Association of
the Company annexed to the Disclosure Letter is true and
complete and has embodied therein or annexed thereto a
copy of every such resolution or agreement as is referred
to in Section 380 of the Companies Xxx 0000.
1.3 Company Resolutions
Neither the Company nor any class of its members has
passed any resolution (other than resolutions relating to
business at Annual General Meetings which was not special
business).
1.4 Options etc.
No person has the right (whether exerciseable now or in
the future and whether contingent or not) to call for the
issue of any share or loan capital of the Company under
any option or other agreement (including conversion rights
and rights of pre-emption) and no claim has been made by
any person to be entitled to any such right.
1.5 Returns and compliance with Company Law etc.
The Company has complied with the provisions of the
Companies Acts The Financial Services Xxx 0000 and the
Xxxxxxxx Xxxxxxxxxxx Xxx 0000 and all returns particulars
resolutions and other documents required under any
legislation to be delivered on behalf of the Company to
the Registrar of Companies or to any other authority
whatsoever have been properly made and delivered.
1.6 Statutory Books
The register of members and other statutory books of the
Company have been properly kept and contain a true,
accurate and complete record of the matters which should
be dealt with therein; no notice or allegation that any of
the same is incorrect or should be rectified has been
received.
1.7 Insolvency
No order has been made or petition presented or resolution
passed for the winding up of the Company, nor has any
distress execution or other process been levied in respect
of the Company, nor is there any unfulfilled or
unsatisfied judgment or court order outstanding against
the Company.
1.8 Subsidiaries
The Company has no subsidiaries.
1.9 The Shares
1.9.1 No one is entitled to receive from the Company any
finders fee, brokerage, or other commission in
connection with the purchase of shares in the
Company or any Associate company of the Company.
1.9.2 Save as provided in this Agreement no share or loan
capital has been issued or agreed to be issued by
the Company since the Balance Sheet Date.
1.9.3 There are no agreements or arrangements in force
which provide for the present or future issue,
allotment or transfer of or grant to any person the
right (whether conditional or otherwise) to call
for the issue, allotment or transfer of any share
or loan capital of the Company (including any
option of pre-emption or conversion).
1.9.4 The Company has not adopted, agreed or resolved to
adopt any employee share option scheme, profit
sharing involving the Company's share capital or
share incentive scheme of any nature whatsoever.
1.9.5 The Company has not redeemed or purchased any of
its shares during the preceding two years.
1.10 Capacity of Vendors
Each Vendor has full power to enter and perform this
Agreement, which when executed constitute binding
obligations on each Vendor in accordance with their terms.
1.11 Vendors' other interests
No Vendor nor any Associate of any Vendor has any estate,
right or interest, directly or indirectly, in any business
other than that now carried on by the Company which is or
is likely to be or become competitive with the business or
the proposed business (as at the date hereof) of the
Company save as the registered holder or beneficial owner
of any class of securities of any company if such class of
securities is listed on any recognised investment exchange
(as defined in section 207 of the Financial Services Act
1986) and in respect of which such person holds, or is
beneficially interested in, (together with his Associates)
less than five per cent. of any single class of the
securities in that company.
2. ACCOUNTS
2.1 Accounts warranty
The Accounts:-
2.1.1 have been prepared in accordance with the
requirements of the Companies Acts and all relevant
statutes and generally accepted accountancy
principles;
2.1.2 give a true and fair view of the assets and
liabilities of the Company at the 31 May 1997 and
the profits of the Company for the financial period
ended on that date;
2.1.3 apply accounting policies which have been
consistently applied in the audited balance sheet
and profit and loss accounts for the three
financial years prior to the 31 May 1997 (except
for intervening Statements of Standard Accounting
Practice and Financial Reporting Standards);
2.1.4 comply with all current Statements of Standard
Accounting Practice and Financial Reporting
Standards applicable to a United Kingdom company;
2.1.5 are not save to the extent expressly stated in
such accounts affected by any extraordinary
exceptional or non-recurring item as defined in FRS
3;
2.1.6 properly reflect the financial position of the
Company as at the 31 May 1997.
2.3 Tax Provisions
To the extent required by the Statements of Standard
Accounting Practice and the Financial Reporting Standards
applicable to a United Kingdom company provision or
reserve has been made in the Accounts for all Taxation
assessed or liable to be assessed on the Company or for
which it is accountable in respect of income profits or
gains earned accrued or received on or before the 31 May
1997 or any event on or before the 31 May 1997 including
distributions made down to such date or provided for in
the Accounts and proper provision has been made in the
Accounts for deferred taxation in accordance with
Statement of Standard Accounting Practice 15.
2.4 Work in progress
In the Accounts:-
2.4.1 the Company's work in progress has been valued on a
basis consistent with that adopted for the purpose
of the Company's audited accounts in respect of the
beginning and end of each of the three last
preceding accounting periods;
2.4.2 redundant or obsolete work in progress as at the 31
May 1997 has been wholly written off;
2.4.3 the value attributed to each item of the work in
progress included in the Accounts does not exceed
the lower of cost and market value as at the 31 May
1997;
2.4.4 the provisions of Statement of Standard Accounting
Practice 9 have been adhered to.
2.5 Books and Records
All accounts, books, ledgers, financial and other records
of whatsoever kind of the Company:-
2.5.1 have been fully properly and accurately maintained
are in the possession of the Company and contain
due and accurate records of all matters required to
be entered into therein by the Companies Acts;
2.5.2 do not contain or reflect any material inaccuracies
or discrepancies;
2.5.3 give and reflect a true and fair view of the
matters which ought to appear therein.
2.6 Debts
2.6.1 So far as the Vendors are aware, all debts owed to
the Company as at Completion will realise their
full face value and be good and collectable in the
ordinary course of business.
2.6.2 No amount included in the Accounts as owing to the
Company as at the Balance Sheet Date is now more
than three months overdue nor has any such amount
been released for an amount less than the value at
which it was included in the Accounts nor is any
such debt now regarded by the Vendors as
irrecoverable in whole or in part.
2.6.3 The Company has not factored or discounted its
debts or agreed to do so.
3. FINANCE
3.1 Financial Position and Prospects
There has been no material deterioration in the financial
position or prospects or turnover of the Company since the
Balance Sheet Date.
3.2 Capital Commitments
There were no commitments on capital account outstanding
at the Balance Sheet Date (save as disclosed in the
Accounts) and since the said date the Company has not
entered into, or agreed to enter into, any material
capital commitments.
3.3 Borrowings
The total amount borrowed by the Company from its bankers
does not exceed its overdraft facilities and the total
amount borrowed by the Company from whatsoever source does
not exceed any limitation on its borrowing contained in
the Articles of Association of, or in any Debenture or
Loan Stock Deed or other instrument executed by, the
Company.
3.4 Bank accounts
A statement of the bank accounts of the Company and of the
credit or debit balances on such accounts as at a date not
more than seven days before the date hereof has been
supplied to the Purchaser. The Company has not any other
bank or deposit accounts (whether in credit or overdrawn)
not included in such statement. Since such statement
there have been no payments out of any such accounts
except for routine payments and the balances on current
account are not now substantially different from the
balances shown on such statements.
3.5 Distributions and Loan Repayments
3.5.1 Since the Balance Sheet Date no distributions of
capital or income have been declared made or paid
in respect of any share capital of the Company and
(excluding fluctuations in overdrawn current
accounts with bankers) no loan or loan capital or
preference capital of the Company has been repaid
in whole or part or has become liable to be repaid.
3.5.2 All dividends or distributions of profits declared,
made, or paid by the Company since the date of
incorporation of the Company have been declared,
made, or paid in accordance with its Articles of
Association and the Companies Acts or other
relevant legislation.
3.6 Working Capital
The Company has sufficient working capital for the
purposes of continuing to carry on its business as
projected in the budget for the Company for the 12 months
December 1997 through to November 1998 for that twelve
month period and for the purposes of executing, carrying
out and fulfilling in accordance with their terms all
projects and contractual obligations which have been
undertaken by, the Company.
3.7 Continuance of facilities
In relation to all debentures, acceptance credits,
overdrafts, loans or other financial facilities
outstanding or available to the Company ("facilities"):-
3.7.1 the Vendors have supplied to the Purchaser in
writing full details thereof and true and correct
copies of all documents relating thereto;
3.7.2 neither the Vendors, nor the Company, has done
anything nor are the Vendors aware of any
circumstances whereby the continuance of any
facility in full force and effect might be affected
or prejudiced or which might give rise to any
detrimental alteration in the terms or conditions
of any of the facilities;
3.7.3 none of the facilities is dependent upon the
guarantee or indemnity of or any security provided
by a third party other than the Company or a
Subsidiary;
3.7.4 no Vendor has any knowledge, information or belief
that as a result of the acquisition of the Shares
by the Purchaser or Completion any of the
facilities might be terminated or mature prior to
its stated maturity.
4. OWNERSHIP OF ASSETS
4.1 Assets
4.1.1 Except for current assets disposed of by the
Company in the ordinary course of its business and
except for the Properties the Company is the owner
of and has good marketable title to all assets
included in the Accounts or which have been
acquired by the Company since the Balance Sheet
Date.
4.1.2 The Company has not disposed or agreed to dispose
of any of its assets (save in the ordinary course
of its business) or granted or agreed to grant, any
Encumbrance in respect of the whole or any part of
its estate or interest in any of the assets
(including the undertaking goodwill and uncalled
capital of the Company) included in the Accounts or
acquired or agreed to be acquired since the Balance
Sheet Date.
4.1.3 Save as disclosed in the Accounts none of the fixed
assets (including the undertaking, goodwill or
uncalled capital) of the Company is subject to any
Encumbrance, or any agreement or commitment to give
or create any Encumbrance, but the same are the
sole unencumbered absolute property of the Company.
4.1.4 Since the Balance Sheet Date, save for disposals in
the ordinary course of its business, the assets of
the Company have been in the possession of, or
under the control of the Company.
4.2 Title Retention
The Company has not acquired or agreed to acquire any
material asset on terms that property therein does not
pass until full payment is made.
4.3 HP and Rental agreements etc.
4.3.1 The Company has not defaulted in any of the
provisions of any hire, or hire purchase, or lease,
or rental agreement, or conditional sale agreement,
or agreement for payment on deferred terms, or xxxx
of sale, or any trading contract under which title
to any property is retained by another person or
any arrangement similar in effect to the foregoing.
4.3.2 The Company has observed and performed all the
terms and conditions on its part to be observed and
performed in all such agreements, arrangements,
leases, contracts and bills referred to in
paragraph 4.3.1 above.
4.4 Plant and Equipment
All vehicles and office and other equipment used in
connection with the business of the Company:-
4.4.1 are in a good and safe state of repair and
condition and are in satisfactory working order and
have been regularly and properly maintained;
4.4.2 are each capable, and will (subject to fair wear
and tear) be capable, over the period of time
during which it will be written down to a nil value
in the accounts of the Company (in accordance with
normal Accounting principles consistently applied
prior to the date hereof), of doing the work for
which it was designed and/or purchased;
4.4.3 are not surplus to the Company's requirements;
4.4.4 are in the possession and control of, and are the
absolute property free from any Encumbrance of, the
Company save for those items held under hire
purchase or rental agreements the value of which
items in the aggregate does not exceed 1,000 pounds sterling.
4.5 Insurances
4.5.1 The policies of insurance which are maintained by
the Company afford the Company adequate cover
against such risks as are commonly covered by
insurance by companies carrying on the same type of
business as the Company.
4.5.2 The Company is now, and has at all material times
been, adequately covered against accident, damage,
injury, third party loss (including service/product
liability), loss of profits and other risks
normally covered by insurance.
4.5.3 All insurance is currently in full force and effect
and nothing has been done or omitted to be done
which could make any policy of insurance void or
voidable or which is likely to result in an
increase in premium.
4.5.4 There is no claim outstanding under any such policy
nor are the Vendors aware of any circumstances
likely to give rise to a claim.
4.5.5 The Company has paid all sums falling
due prior to Completion in respect of premiums
on all policies of insurance maintained by the
Company
5. BUSINESS OF THE COMPANY
5.1 Changes since the Balance Sheet Date
Since the Balance Sheet Date the Company:-
5.1.1 has carried on its business in the ordinary and
usual course;
5.1.2 has not entered into any transaction nor assumed
any liability nor made any payment not provided for
in the Accounts which is material and is not in the
ordinary course of its business;
5.1.3 has carried on the business without any
interruption or alteration in the nature scope or
manner of its business;
5.1.4 has not borrowed or raised any money or taken any
financial facility (except such short term
borrowings from its bankers as are disclosed in the
Disclosure Letter);
5.1.5 has paid its creditors within the times agreed with
such creditors and there are not debts outstanding
by the Company which have been due for more than
four weeks;
5.2 Licences etc.
5.2.1 All necessary licences consents permits and
authorities (public and private) have been obtained
by the Company to enable the Company to carry on
its business effectively in the places and in the
manner in which such business is now carried on and
all such licences consents permits and authorities
are valid and subsisting.
5.2.2 The Company is not in breach of any of the terms
and conditions of any such licences or consents and
there are no factors known to the Vendors that
might in any way prejudice the continuation or
renewal of any of such licences or consents.
5.3 Breach of statutory provisions, etc.
5.3.1 Neither the Company, nor any of its officers,
agents or employees (during the course of their
duties in relation to the Company) have committed,
or omitted to do, any act or thing the commission
or omission of which is, or could be, in
contravention of any Act, Order, Regulation, or the
like in the United Kingdom or elsewhere which is
punishable by fine or other penalty; and
5.3.2 the Company has not received any Notice of any
offence or breach of statutory duty or any other
Notice whatsoever (whether or not giving rise to a
criminal liability) under the provisions of the
Xxxxxxxxx Xxx, 0000, The Office Shops and Railway
Premises Act, 1963, The Fire Precautions Act, 1971
or The Health and Safety at Work Act, 1974 (or any
Order or Regulation made thereunder) the Wages Xxx
0000;
5.3.3 the Company has duly complied with all relevant
requirements of the Financial Services Xxx 0000 and
the Data Protection Xxx 0000.
5.3.4 so far as the Vendors are aware, the Company has
not in the last two years, as a counterparty
thereto, been a party to a transaction at an
undervalue or a preference as those expressions are
used in sections 238 and 239 respectively of the
Insolvency Xxx 0000;
5.4 Litigation
5.4.1 The Company is not engaged in any litigation or
arbitration proceedings.
5.4.2 So far as the Vendors are aware no litigation or
arbitration proceedings are pending or threatened
by or against the Company and there are no
circumstances likely to give rise to any litigation
or arbitration.
5.4.3 The Company is not subject to any order or judgment
given by any Court or governmental agency and has
not been a party to any undertaking or assurance
given to any Court or governmental agency which is
still in force.
5.5 Fair Trading etc.
No agreement practice or arrangement carried on by the
Company or to which the Company is a party:-
5.5.1 is or requires to be registered in accordance with
the provisions of the Restrictive Trade Practices
Acts 1976 and 1977 or contravenes the provisions of
the Resale Prices Xxx 0000 and the Company is not
in default or in contravention of the provisions of
any of those Acts;
5.5.2 contravenes the Trade Descriptions Acts 1968 and
1972;
5.5.3 contravenes the provisions of the Consumer Credit
Xxx 0000;
5.5.4 is by virtue of its terms or by virtue of any
practice for the time being carried on in
connection therewith a "Consumer Trade Practice"
within the meaning of Section 13 of the Fair
Trading Act 1973 and susceptible to or under
reference to the Consumer Protection Advisory
Committee or the subject matter of a report to the
Secretary of State or the subject matter of an
Order by the Secretary of State under the
provisions of Part II of that Act;
5.5.5 infringes Article 85 of the Treaty establishing the
European Economic Community or constitutes an abuse
of dominant position contrary to Article 86 of the
said Treaty or infringes or contravenes any
provisions of the Treaty of Rome;
5.5.6 is prescribed or has been or may be or become the
subject of any reference enquiry or report under
the Industry Xxx 0000 or the Monopolies and Mergers
Act or the Competition Xxx 0000 or any other anti-
restrictive practice, consumer protection or anti-
monopoly anti-trust or anti-cartel legislation in
the United Kingdom or elsewhere; or
5.5.7 in any way restricts its freedom to carry on the
whole or any part of its business in any part of
the world in such manner as it thinks fit.
5.6 Guarantees, Options, etc.
The Company is not a party to any option or pre-emption
right, or a party to any guarantee or suretyship or any
other obligation (howsoever called) to pay, purchase or
provide funds (whether by the advance of money, the
purchase of or subscription for shares or other
securities, the purchase of assets or services, or
otherwise) for the payment of, indemnity against the
consequence of default in the payment of, or otherwise to
be responsible for, any indebtedness of any other person.
5.7 Tenders, etc.
No offer, tender, or the like not in the ordinary course
of business is outstanding which is capable of being
converted into an obligation of the Company by an
acceptance or other act of some other person.
5.8 Powers of Attorney, etc.
There are no powers of attorney given by the Company in
force (other than to the holder of an Encumbrance solely
to facilitate its enforcement) and no person, as agent or
otherwise of the Company, is entitled or authorised to
bind or commit the Company to any obligations not in the
ordinary course of the Company's business.
5.9 Insider Contracts
5.9.1 There is not outstanding, and there has not at any
time during the last three years been outstanding,
any contract (other than a contract of employment)
or arrangement to which the Company is a party and
in which any Vendor or any Associate of any Vendor
or any director of the Company or any Associate of
any such director is or has been interested,
whether directly or indirectly.
5.9.2 The Company is not a party to, nor have its profits
during the last three years been affected by, any
contract or arrangement which is not of an entirely
arms' length nature.
5.10 Other Party's Defaults
So far as the Vendors are aware, no party to any agreement
with or obligation to the Company is in default thereunder
being a default which would be material in the context of
the financial or trading position of the Company nor (so
far as the Vendors are aware) are there any circumstances
likely to give rise to such a default.
5.11 Other Material contracts
The Company is not a party to nor subject to any
agreement, transaction, obligation, commitment,
understanding, arrangement or liability which:-
5.11.1 is incapable of complete performance in accordance
with its terms within six months after the date on
which it was entered into or undertaken; or
5.11.2 is known by any Vendor to be likely to result in a
loss to the Company on completion of performance;
or
5.11.3 cannot readily be fulfilled or performed by the
Company on time and without undue or unusual
expenditure of money, effort or personnel; or
5.11.4 involves or is likely to involve obligations,
restrictions, expenditure or receipts of an
unusual, onerous or exceptional nature and not in
the ordinary course of the Company's business; or
5.11.5 is a contract for hire or rent hire purchase or
purchase by way of credit sale or periodical
payment; or
5.11.6 is a contract with any trade union or body or
organisation representing its employees; or
5.11.7 requires an aggregate consideration payable by the
Company in excess of 10,000 pounds sterling; or
5.11.8 involves or is likely to involve the supply of
services by or to the Company the aggregate sales
value of which will represent in excess of ten per
cent. of the turnover of the Company for the last
financial year; or
5.11.10 requires the Company to pay any commission,
finders fee, royalty or the like; or
5.11.11 is in any way otherwise than in the ordinary
and proper course of the Company's business; or
5.11.12 would have been such an agreement or
arrangement but for its cancellation or termination
by any counter-party since the Balance Sheet Date.
5.12 Consequence of share acquisition by the Purchaser
So far as the Vendors are aware the acquisition of the
Shares of the Company by the Purchaser or the compliance
with the terms of this Agreement will not:-
5.12.1 cause the Company to lose the benefit of any right
or privilege it presently enjoys or cause any
person who normally does business with the Company
not to continue to do so on the same basis as
previously;
5.12.2 relieve any person of any obligation to the Company
(whether contractual or otherwise) or enable any
person to determine any such obligation or any
right or benefit enjoyed by the Company or to
exercise any right whether under an agreement with
or otherwise in respect of the Company;
5.12.3 result in any present or future indebtedness of the
Company becoming due or capable of being declared
due and payable prior to its stated maturity;
5.13 Investment Grants
No investment grant paid to the Company is liable to be
refunded in whole or in part in consequence of any action
or omission of the Company.
5.14 Sureties
No person other than the Company has given any guarantee
of or security for any overdraft loan or loan facility
granted to the Company.
5.15 Documents
All title deeds and documents to which the Company is a
party affecting the title or interest of the Company to or
in any of its assets are in the possession or under the
control of the Company and are properly stamped.
5.16 Compliance with Laws
The Company has conducted its business in all material
respects in accordance with all applicable laws and
regulations of the United Kingdom or (so far as the
Vendors are aware) any foreign country and there is no
violation of or default with respect to any statute
regulation order decree or judgement of any Court or any
governmental agency of the United Kingdom or any foreign
country which may have a material adverse effect upon the
assets or business of the Company.
5.17 DTI Grant
The Company is not under any liability to repay any grant
made to it by the Departments of Trade and Industry or the
Ministry of Technology under the Industrial Development
Act 1966 or otherwise and no circumstances have arisen in
which the Ministry of Technology or the Departments of
Trade and Industry would or might be entitled to require
the repayment of any such grant either in whole or in
part.
6. EMPLOYMENT
6.1 Directors
The particulars shown in the Second Schedule are true and
complete and no person not named therein as such is a
director or shadow director (as defined in Section 741 of
the Companies Act 1985) of the Company.
6.2 Particulars of Employees
6.2.1 The particulars shown in the Schedule of Employees
annexed to the Disclosure Letter show all
remuneration payable and other benefits provided or
which the Company is bound to provide (whether now
or in the future) to each officer and employee of
the Company or Associate of any such person and are
true and complete and include particulars of all
profit sharing incentive and bonus arrangements to
which the Company is a party whether legally
binding on the Company or not.
6.2.2 Since the Balance Sheet Date no change has been
made in the rate of remuneration, or the emoluments
or pension benefits of any officer ex-officer or
employee of the Company and no change has been made
in the terms of engagement of any such officer or
employee, and no additional officers or employees
have been appointed.
6.2.3 No moneys or benefits other than in respect of
remuneration or emoluments of employment, are
payable to, or for the benefit of, any officer or
employee of the Company or any Associate of any
such person.
6.2.4 No present officer or employee of the Company has
given or received notice terminating his employment
except as expressly contemplated under this
Agreement.
6.3 Service Contracts
There is not outstanding any contract of service between
the Company and any of its directors officers or employees
which is not terminable by the Company without
compensation (other than any compensation payable by
statute) on three month's notice given at any time.
6.4 Disputes with Employees
The Vendors are not aware of any outstanding claim against
the Company by any person who is now or has been an
officer or employee of the Company or any dispute between
the Company and a material number or class of its
employees and no payments are due by the Company under the
provisions of the Employment Rights Xxx 0000.
7. INDUSTRIAL PROPERTY RIGHTS
7.1 The business of the Company as now carried on does not and
is not likely to infringe any Industrial Property Right of
any other person or give rise to a liability to pay
compensation pursuant to the Patents Xxx 0000 ss 40 and 41
and all licences to the Company in respect of any such
Industrial Property Rights are in full force and effect.
7.2 The Company has not (otherwise than in the ordinary and
normal course of business) or on terms of confidentiality
disclosed or permitted to be disclosed or undertaken or
arranged to disclose to any person other than the
Purchaser any of its secret know-how, trade secrets or
confidential information.
7.3 The Company is not a party to any secrecy agreement or
agreement which restricts the use or disclosure of
confidential information.
7.4 Nothing has been done or omitted by the Company which
would enable any licensee under a licence granted by the
Company to be terminated by any other party to the licence
or which in any way constitutes a material breach of terms
of any licence.
7.5 All Industrial Property Rights used or required by the
Company in connection with its business are in full force
and effect and are vested in and beneficially owned by or
validly licensed to it.
7.6 The Company is the sole beneficial owner of the Industrial
Property Rights listed in the Disclosure Letter and (where
registration is possible) the Company has been and is
registered as proprietor, and each of those Rights is
valid and enforceable, and so far as the Vendors are aware
none of them is being used, claimed, opposed or attached
by any other person.
7.7 No right or licence has been granted to any person by the
Company to use in any manner or to do anything which would
or might otherwise infringe any of the Industrial Property
Rights referred to above; and no act has been done or
omission permitted by the Company whereby they or any of
them have ceased or will cease to be valid and
enforceable.
8. TAXATION
8.1 Administration
8.1.1 All notices, returns, computations and payments
which should be or should have been given or made
by the Company for any Taxation purpose have been
given or made within the requisite periods and are
in all material respects up-to-date, correct and on
a proper basis and none of them is or so far as the
Vendors are aware is likely to be the subject of
any dispute with the Inland Revenue, H.M. Customs &
Excise or other Taxation or fiscal authority.
8.1.2 All particulars furnished to the Inland Revenue or
other Taxation authorities, in connection with the
application for any consent or clearance on behalf
of the Company, or affecting the Company, within
the period of 6 years before Completion fully and
accurately disclose all facts and circumstances
material for the decision of those authorities; any
consent or clearance is valid and effective; and
any transaction, for which consent or clearance has
previously been obtained, has been carried into
effect (if at all) only in accordance with the
terms of the relative application consent or
clearance and the Company has not been a party to
or otherwise involved in any transaction scheme or
arrangement in respect of which clearance should
have been obtained but was not.
8.1.3 There are set out in the Disclosure Letter full
details of any special arrangement (being an
arrangement which is not based on a strict and
detailed application of the relevant legislation or
on generally published statements of practice or
generally published extra statutory concessions)
operated by the Company with the agreement of any
Taxation Authority and so far as the Vendors are
aware the Company has not taken any action which
has had, or will have, the result of altering,
prejudicing or in any way disturbing any such
arrangement which it has previously negotiated.
8.1.4 The Company has not paid or become liable to pay
any penalty or interest charged by virtue of the
provisions of TMA or any other Taxation Statute.
8.1.5 The Company has duly and punctually paid to the
Inland Revenue or other appropriate authority all
Taxation for which it is liable as a result of any
act or omission prior to Completion and in
particular:-
(a) all Taxation deductible by the Company prior to
the date hereof under Schedule E by virtue of
the PAYE regulations from time to time in force
or ICTA s.559;
(b) all advance corporation tax due in respect of
franked payments of the Company under ICTA
s.14, and s.238 and Schedule 13;
(c) all National Insurance Contributions (both
employer's and employees') due from the Company
in respect of the employees of the Company;
(d) all Taxation required to be deducted from any
interest, annuity or other annual payment, rent
or royalty pursuant to ICTA s.349 and 350; and
(e) all Taxation required to be deducted from any
other payments directed to be made as if those
payments were payments to which ICTA s.349
applied.
8.1.6 The Company has duly and punctually withheld,
deducted or collected for payment (as appropriate)
all Taxation which it has become liable to withhold
deduct or collect for payment and is under no
liability to pay any penalty or interest in
connection with any Taxation at the date of this
agreement or give any security for any such matter
and the Company has if required by law so to do
accounted for all such Taxation to the relevant
Taxation Authority.
8.1.7 The Company has not at any time been the subject of
a discovery or investigation by any Taxation
Authority and so far as the Vendors are aware there
are no facts which are likely to cause a discovery
or investigation to be made.
8.1.8 The Company is not liable as lessee or agent for
any Taxation under the provisions of ICTA s.23.
8.2 Taxation claims, liabilities and reliefs
8.2.1 The Company has not made [nor is entitled to make]
a claim under TCGA s.24(2) (Assets lost or
destroyed, or whose value becomes negligible) or
s.48 (Consideration due after time of disposal).
8.2.2 The Company is not nor so far as the Vendors are
aware will become liable to pay, or make
reimbursement or indemnity in respect of, any
Taxation (or any amount corresponding to Taxation)
in consequence of the failure by any other person
(other than the Company or its Subsidiaries) to
discharge that Taxation or amount within any
specified period or otherwise, where the Taxation
or amount relates to a profit, income or gain,
transaction, event, omission or circumstances
arising, occurring or deemed to arise or occur
(whether wholly or partly) prior to Completion.
8.2.3 No relief (whether by way of deduction, reduction,
set-off exemption, repayment or allowance, or
otherwise) from, against or in respect of any
Taxation has been claimed and/or given to the
Company which could or might be effectively
withdrawn, postponed, restricted or otherwise lost
as a result of any act, omission, event or
circumstance arising or occurring at any time after
Completion which is not a deliberate act or
omission, or an event or circumstance deliberately
created, by the Company or the Purchaser after
Completion for the purpose of effecting the
withdrawal, postponement, restriction or loss.
8.3 Distributions and deductibility of payments
8.3.1 The Company has not since 5 April 1965 repaid, or
agreed to repay or redeemed or agreed to redeem its
share capital or capitalised or agreed to
capitalise in the form of redeemable shares or
debentures any profits or reserves of any class or
description.
8.3.2 No security (within the meaning of ICTA s.254(1)
(Interpretation of Part VI)) issued by the Company
and outstanding at the date of this agreement was
issued in such circumstances that the interest
payable on it, or any other payment in respect of
it, falls to be treated as a distribution under
ICTA s.209 (Meaning of "distribution").
8.3.3 No rents, interest, annual payments or other sums
of an income nature paid or payable since the
Balance Sheet Date by the Company or which the
Company is under an obligation to pay in the future
are or will be wholly or partially disallowable as
deductions in computing profits or as charges
against profits, for the purposes of corporation
tax, by reason of the provisions of ICTA s.74
(General rules as to deductions not allowable) or
ICTA s.75 (Expenses of Management: Investment
Companies), ICTA s.338 (Allowance of charges on
income and capital), ICTA s.770 (Sales, etc, at an
undervalue or overvalue), ICTA ss.779 to 784
(Leased assets), ICTA s.787 (Restriction of relief
for payments of interest), or ICTA s.125 (Annual
payments for non-taxable consideration).
8.3.4 The Company has not received a capital distribution
to which the provisions of TCGA s.189 (Capital
distribution of chargeable gains: recovery of tax
from shareholder) could apply.
8.3.5 The Company has not, since the Balance Sheet Date,
incurred expenditure other than in the normal
course of business which will not be wholly
deductible in computing profits for Taxation
purposes, as a trading expense, as an expense of
management, as a charge on income, or in computing
income for the purposes of Schedule A, except for
expenditure on the acquisition of an asset to be
held otherwise than as stock-in-trade, details of
which are set out in the Disclosure Letter.
8.3.6 The Company has not issued any share capital to
which the provision of ICTA s.249 could apply.
8.3.7 The Disclosure Letter contains particulars of all
elections made by the Company under ICTA s.247 that
are now in force; and the Company has not paid any
dividend without advance corporation tax or made
any payment without deduction of income tax in the
circumstances specified in ICTA s.247(6) nor is any
Taxation Authority entitled to make any recovery
from the Company under ICTA s.247(7).
8.4 Carry forward of losses and ACT
Nothing has been done, and no event or series of events
has occurred, which [will] cause in relation to the
Company the disallowance of the carry forward or carry
back of losses excess charges or advance corporation tax
under the provisions of ICTA s.393 (Losses other than
terminal losses), ICTA s.393A (Losses set off against
profits of the same or an earlier accounting period),
ICTA s.768 (Change in ownership of company: disallowance
of trading losses), ICTA s.768A (Change in Ownership:
disallowance of carry back of trading losses), or ICTA
s.245 (Calculation etc of ACT on change of ownership of
Company) and for the purposes of this warranty the
provisions of Clause 1.2 shall not apply.
8.5 Close Companies
8.5.1 The Company is not and has never been a close
investment holding company within the meaning of
ICTA s.13A (close investment holding companies).
8.5.2 The Company is not, nor has ever been, liable to
taxation under the provisions of ICTA ss.418 to
422 or paragraph 10 of Schedule 19, (close
companies).
8.5.3 The Company has never made any transfer of the kind
described in TCGA s.125 (transfer of assets at
undervalue).
8.5.4 The Company has never made any transfer of value
within the meaning of the IHTA [otherwise than for
the purposes of, or in the course of, its
business.]
8.5.5 Neither the assets owned by nor the shares of the
Company are subject to an outstanding Inland
Revenue charge as defined in IHTA s.237.
8.5.6 No circumstances exist, or but for IHTA s.204(6)
would exist, such that a power of sale could be
exercised in relation to any assets or shares of
the Company pursuant to IHTA s.212 (contingent
liability of transferee for unpaid capital transfer
tax or inheritance tax).
8.6 Groups of Companies
8.6.1 The Company and the Subsidiaries ("Group
Companies") comprise a group for the purpose of
ICTA s.402 (Group relief), and there is nothing in
ICTA s.413 or s.410 (Arrangements for transfer of
company to another group, or consortium) which
precludes any Group Company from being regarded as
a member of such group.
8.6.2 The Disclosure Letter contains particulars of all
arrangements and agreements relating to group
relief (as defined by ICTA s.402) to which the
Company is or has been a party and:-
(a) all claims by the Company for group relief were
when made and are now valid and have been or
will be allowed by way of relief from
corporation tax;
(b) the Company has not made nor is it liable to
make any payment under such arrangement or
agreement save as provided for in the Accounts;
and
(c) the Company has received all payments due to it
under any such arrangement or agreement for all
surrenders of group relief made by it.
8.6.3 The Disclosure Letter contains particulars of all
arrangements and agreements to which the Company is
or has been a party relating to the surrender of
advance corporation tax made or received by the
Company under ICTA s.240 and:-
(a) the Company has not paid nor is liable to pay
for the benefit of any advance corporation tax
which is or may become incapable of set off
against the Company's liability to corporation
tax; and
(b) the Company has received all payments due to it
under any such arrangement or agreement for all
surrenders of advance corporation tax made by
it.
8.6.4 The Company has not made or received a payment for
group relief or for the surrender of advance
corporation tax which may be liable to be refunded
in whole or in part.
8.6.5 The Company does not own any asset which was
acquired from another company which was at the time
a member of the same group of companies (as defined
in TCGA s.170 (Groups of companies: definitions)
and which owned that asset otherwise than as
trading stock within the meaning of TCGA s.173
(Transfers within a group: trading stock).
8.6.6 The Company has not held nor holds shares in a
company which has made any such transfer as is
referred to in TCGA s.125 (Shares in close company
transferring assets at an undervalue); and the
Company has not received any assets by way of gift
as mentioned in TCGA s.282 (Gifts: recovery from
donee).
8.6.7 The Company has no interest in any company which is
not resident in the United Kingdom and which would
be a close company if it were resident in the
United Kingdom (TCGA s.13) (non-resident company).
8.7 Capital Allowances
8.7.1 The aggregate book value of each of the assets of
the Company, on which an entitlement to industrial
building allowances or other allowances in respect
of capital expenditure has arisen, in or adopted
for the purpose of the Accounts does not exceed the
aggregate residue of expenditure or written-down
value attributable to such assets for the purposes
of the CAA and the aggregate book value of plant
and machinery allocated to pool of plant and
machinery on which an entitlement to capital
allowances has arisen does not exceed the written-
down value of the qualifying expenditure in respect
of each such pool under the CAA.
8.7.2 All expenditure incurred by the Company or which it
may incur under any subsisting commitment on the
provision of machinery or plant has qualified or
will qualify (if not deductible as a trading
expense of a trade carried on by the Company) for
writing down allowances under CAA Part II
(machinery and plant).
8.7.3 Since the Balance Sheet Date nothing has happened
as a result of which there may be made against the
Company a balancing charge or any disposal value
may be brought into account under CAA s.24 (writing
down allowances and balancing adjustments) or there
may be any recovery of excess relief within CAA
ss.46 or 47 (recovery of excess relief) or a
relevant event may occur within the meaning of CAA
s.138 (scientific research).
8.7.4 There is not, and so far as the Vendors are aware
there are no circumstances which could give rise
to, any dispute between the Company and any other
person as to the entitlement to capital allowances
under CAA ss.51 to 59 (fixtures).
8.7.5 The Company has not made any election under CAA
s.37 (short life assets) nor has been taken to have
made an election under CAA s.37(8)(c).
8.7.6 No capital expenditure incurred or to be incurred
by the Company has been deemed, under the
provisions of CAA s.159 (Time when capital
expenditure is incurred), to have been or be
incurred on a date other than that upon which the
obligation to pay the expenditure became or becomes
unconditional.
8.7.7 No election has been made by the Company under CAA
s.53 (Expenditure incurred by equipment lessor) or
CAA s.55 (Expenditure incurred by incoming lessee:
election to transfer right to allowances) in
relation to any fixtures.
8.8 Transactions not at arm's length
8.8.1 The Company has not carried out or been engaged in,
any transaction or arrangement to which the
provisions of ICTA s.770 (Sales, etc, at an
undervalue or overvalue) have been or may be
applied.
8.8.2 The Company does not own nor has agreed to acquire
any asset, or has received or agreed to receive any
services or facilities (including without
limitation the benefit of any licences or
agreements), the consideration for the acquisition
or provision of which was or will be in excess of
its market value or determined otherwise than on an
arm's length basis.
8.8.3 The Company has not disposed of or acquired any
asset in such circumstances that the provisions of
TCGA ss.17 or 19 (Disposals and acquisitions
treated as made at market value) could apply.
8.8.4 The Company has not, since the Balance Sheet Date
engaged in any transaction in respect of which
there may be substituted for any purpose of
Taxation a different consideration for the actual
consideration given or received by it.
8.9 Capital Gains
8.9.1 The book value in or adopted for the purposes of
the Accounts as the value of each of the assets of
the Company on the disposal of which a chargeable
gain or allowable loss could arise does not exceed
the amount deductible under TCGA s.38 (expenditure:
general) (excluding any indexation allowance) in
respect of each such asset.
8.9.2 No debt owed to the Company would on its disposal
give rise to a chargeable gain by reason of TCGA
s.251 (disposals otherwise than as original
creditor).
8.9.3 No benefit under any policy of assurance has been
acquired by the Company which would on its disposal
give rise to a chargeable gain by reason of TCGA
s.210 (disposals otherwise than as original
beneficial owner).
8.9.4 The Company does not have an interest in any assets
which are wasting assets within TCGA s.44 (wasting
assets) and which do not qualify for capital
allowances.
8.9.5 The Company has not made nor is entitled to make
any claims under any of TCGA ss.23, 35, 152, 153,
154, 165, 172, 175, 229, 242, 243 or 247 insofar as
such claims affect or would affect the chargeable
gain or allowable loss which would arise on a
disposal by the Company of any of its assets.
8.9.6 The Company has not made any claim or election
under either of TCGA s.24 (assets lost or
destroyed) or TCGA s.161 (appropriations to or from
stock). The Company has not, since the Balance
Sheet Date, appropriated any asset forming part of
its trading stock for any other purpose.
8.9.7 The Company has not since the Balance Sheet Date
disposed of nor acquired any asset in circumstances
such that the provisions of TCGA s.17 (disposals
and acquisitions treated as made at market value)
could apply.
8.9.8 The Company has not since the Balance Sheet Date
been a party to any depreciatory transactions for
the purpose of TCGA s.176 (transactions in a group)
or which could be treated as a depreciatory
transaction under TCGA s.177 (dividend stripping).
8.9.9 The Company has not since the Balance Sheet Date
been a party to any value shifting arrangements
under any of TCGA ss.29, 30 or 34 (value shifting).
8.9.10 No disposal of any assets or of any interest in
assets in a territory outside the United Kingdom
has been made in respect of which any claim under
TCGA s.279 (foreign assets, delayed remittances)
has been made.
8.9.11 The Company has not made any claim under TCGA s.48
(consideration due after time of disposal) to pay
by instalments tax on chargeable gains.
8.9.12 The Company does not have any interest in either a
controlled foreign company or an offshore fund as
defined respectively in ICTA Chapters IV and V of
Part XVII.
8.9.13 No part of the consideration given by the Company
for a new holding of shares (within the meaning of
TCGA s.126 (Application of ss.127 to 131)) will be
disregarded by virtue of the proviso to TCGA
s.128(2) (Consideration given or received by
holder).
8.9.14 No asset owned by the Company has been the subject
of a deemed disposal under TCGA Schedule 2 (Assets
held on 6th April 1965), so as to restrict the
extent to which the gain or loss over the period of
ownership may be apportioned by reference to
straightline growth.
8.9.15 The Company has not been a party to any election
made pursuant to the provisions of ICTA s.108.
8.9.16 There are set out in the Disclosure Letter full
details of any elections made pursuant to TCGA s.35
8.10 Tax avoidance
8.10.1 The Company has not at any time been a party to or
otherwise involved in any transaction to which any
of the following provisions could apply:-
(a) ICTA ss.729 to 737 (Tax avoidance: securities);
(b) ICTA s.774 (Transactions between dealing
company and associated company);
(c) ICTA ss.779-780 (Sale and lease-back:
limitation on tax reliefs and taxation of
consideration received);
(d) ICTA ss.781-785 (Assets leased to traders and
others etc);
(e) ICTA ss.786 (Transactions associated with loans
or credit);
(f) CAA 1990 s.75 (Capital allowances: effect of
sales between connected persons, sale and
leaseback, etc);
(g) FA 1972 s.76 (Securities bought with borrowed
money);
(h) ICTA s.240 (Set-off of company's surplus
advance corporation tax against subsidiary's
liability to corporation tax);
(i) ICTA s.410 (Arrangements for transfer of
company to another group etc); s.395 (Leasing
contracts and company reconstructions); and
s.116 (Partnerships involving companies:
arrangements for transferring relief);
(j) TCGA s.106 (Disposal of shares and securities
within prescribed period of acquisition);
(k) TCGA s.29 (Value shifting);
(l) CAA 1990 s.22 (First Year Allowances).
8.10.2 The Company has not been a party to any transaction
to which any of the following provisions has been
or could be applied other than transactions in
respect of which all necessary consents or
clearances have been obtained:-
(a) TCGA s.139(5) Company reconstruction or
amalgamation: transfer of assets);
(b) ICTA ss.703 to 709 (Cancellation of tax
advantages from certain transactions in
securities);
(c) ICTA s.776 (Transactions in land: taxation of
capital gains);
(d) TCGA ss.135, 136 and 137 (Company
reconstructions and amalgamations);
(e) ICTA s.213 to 218 (exempt distributions);
(f) ICTA s.765 (Migration etc of companies) or ICTA
s.766 (Offences under Section 765);
(g) ICTA s.219 to 224 (Purchase of own shares).
8.11 Depreciatory transactions
No allowable loss, which may accrue on the disposal by the
Company of any asset, is likely to be reduced by reason of
the provisions of TCGA s.176 (Transactions in a group) or
TCGA s.177 (Dividend stripping) and no chargeable gain or
allowable loss arising on a disposal is likely to be
adjusted in accordance with TCGA s.30 (Value shifting:
further provisions).
8.12 Overseas
8.12.1 The Company is not nor has it within the last six
years been entitled to receive any income which is
'unremittable income' within the meaning of ICTA
s.584 (Relief for unremittable overseas income), or
made any gain to which the provisions of TCGA s.279
(Foreign assets: delayed remittances) could apply.
8.12.2 The Company has not ceased to be resident in the
United Kingdom other than in pursuance of a
Treasury Consent and could not and is not
considered to be resident in a territory outside
the United Kingdom.
8.13 Demergers and purchase of own shares
8.13.1 The Company has not been engaged in or been a party
to any of the transactions set out in ICTA s.213 to
218 (Demergers) nor has it made or received a
chargeable payment as defined in ICTA s.214(2).
8.13.2 The Company has not at any time since 15th June
1982 redeemed, repaid or purchased or agreed to
redeem, repay or purchase, any of its own shares.
8.13.3 The Company is and has been throughout the last six
years resident in the United Kingdom for Taxation
purposes and has throughout that period traded only
in the United Kingdom and been in receipt only of
UK source income and gains.
8.14 Sale and leaseback of land
The Company has not since the Balance Sheet Date entered
into any transaction to which the provisions of ICTA s.780
(Sale and lease-back: taxation of consideration received)
have been or could be applied.
8.15 Securities
The Company has not at any time since 13th March 1984
owned or issued any deep discount security within the
meaning of ICTA Schedule 4, any deep gain security within
the meaning of FA 1989 Schedule 11, any qualifying
corporate bond within the meaning of TCGA s.116 or any
relevant discounted security within the meaning of FA 1996
Sch.13.
8.16 Capital losses
The Company has not incurred a capital loss to which the
provisions of TCGA s.18(3) and (4) (Transactions between
connected persons) are applicable.
8.17 Value Added Tax
8.17.1 The Company is not and has never been treated for
the purposes of VATA s.43 (groups of companies) as
a member of a group.
8.17.2 The Company is a registered and taxable person for
the purposes of the VATA and has complied with and
observed in all material respects the terms of all
legislation, (which expression shall for the
purposes of this sub-clause 17 include reference to
all regulations, orders, provisions, directions,
conditions and notices) relating to Value Added Tax
and 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.
8.17.3 The Company:-
(a) is not, nor in the two years prior to
Completion has been, in arrears with any
payments or returns or notifications under the
legislation relating to Value Added Tax, or
liable to any forfeiture penalty, interest or
surcharge or to the operation of any penalty,
interest or surcharge provisions contained in
the same;
(b) has not in the two years prior to Completion
received a surcharge liability notice under
VATA s.59 (default surcharge) or a penalty
liability notice under VATA s.64 (persistent
misdeclarations).
(c) has not been required by HM Commissioners of
Customs & Excise to give security;
(d) is not, and has not agreed to become, an agent,
manager or factor for the purposes of VATA s.47
(agents etc) of any person who is not resident
in the United Kingdom;
(e) has not on or prior to the date hereof, nor
will before Completion make any supplies that
are exempt supplies; and
(f) or any other company which is or has been a
member of the same group of companies as the
Company has not on or prior to the date hereof,
nor will before Completion, make any election
pursuant to VATA Schedule 10 paragraphs 2 and 3
which has or may have or have had the effect of
waiving any exemption from Value Added Tax in
relation to any property in which the Company
has or will have before Completion any interest
or any part thereof (having regard to
paragraphs 3(3) and (4) of the said Schedule 10
) or which may otherwise have or have had the
effect of rendering Value Added Tax payable or
chargeable in respect thereof.
(g) is not for the purposes of VATA Schedule 10
paragraph 5(5) (developers of certain non-
residential buildings etc) the developer of any
building or work in respect of which the
Company has not made an election under VATA
Schedule 10 paragraph 2(1).
8.17.4 The Company has not since the Balance Sheet Date
been, treated as having made any supply of goods
or services for the purposes of Value Added Tax
where no supply has in fact been made by the
Company, including without limitation, deemed
supplies under any of the following provisions:
VATA s.8 (supplies received from abroad); VATA s.44
(supplies to groups); VATA paragraph 6 of Schedule
10 (developers self supply); Value Added Tax (Self
Supply of Construction Services) Order 1989
paragraph 3 (self supply of construction services);
8.17.5 The Company is not approved for the purposes of the
Customs Duties (Deferred Payment) Regulations 1976
(deferral of duty on imports).
8.17.6 The Company is not the owner of any capital item to
which Part XV of the Value Added Tax (General)
Regulations 1995 (adjustments to the deduction of
input tax on capital items) applies.
8.17.8 The Company is not the owner of, and has not
contracted to acquire, goods which are or will
become "free zone goods" for the purposes of the
Free Zone Regulations 1984.
8.17.9 The Company has not incurred, a liability to
Taxation in a country other than the United
Kingdom, the recovery of which would depend upon
the existence of and compliance with legislation or
regulations in that country.
8.17.10 The Company has not made or received any
supplies in respect of which there may be
substituted for Value Added Tax purposes a
different consideration from the actual
consideration given or received by it.
8.18 Stamp Duties
8.18.1 There is no instrument which is necessary to
establish the Company's title to any right or asset
which is liable to stamp duty in the United Kingdom
or elsewhere but which has not been duly stamped or
which would attract stamp duty if brought within
the relevant jurisdiction.
8.18.2 The Company has complied in all respects with the
provisions of FA 1986 Part IV (stamp duty reserve
tax) and with any regulations made under the same
and the Company is not and will not become liable
to pay stamp duty reserve tax by reference to any
agreement which falls within the terms of FA 1986
s.87(1) and which is entered into prior to
Completion.
8.18.3 The Company has not made any claim for relief or
exemption under FA 1930 s.42 (Relief from transfer
stamp duty in case of transfer of property as
between associated companies) or under FA 1986
ss.75 to 77 (reconstructions and acquisitions) nor
of capital duty under FA 1973 Schedule 19 Part III
(Stamp duty on documents relating to chargeable
transactions of capital companies) or under any
other statute and practice statement or regulation
of the Inland Revenue or any other fiscal
authority.
8.19 Employees
8.19.1 The Company has received no notifications or
notices under ICTA s.166 (benefits in kind:
notices of nil liability).
8.19.2 The Company does not operate any scheme approved
under ICTA s.202 (charities: payroll deduction
scheme) or registered under ICTA Chapter III of
Part V (profit-related pay).
8.19.3 There are set out in the Disclosure Letter full
details of all schemes under which any officer or
employee of the Company participates under ICTA
Sch.9 (approved share option and profit sharing
schemes) or is a beneficiary or potential
beneficiary of a qualifying employee share
ownership trust as defined in FA 1989 Sch.5
(employee share ownership trusts).
8.19.4 All schemes and trusts operated by the Company for
the benefit of its officers and employees have been
properly established and administered in accordance
with the rules thereof and any relevant Taxation
Statute.
8.19.5 Since the Balance Sheet Date the Company has not
received any payment to which ICTA s.601 to 603
applies (pension scheme surpluses: payments to
employers).
8.19.6 All sums payable under the existing arrangements
for remuneration of officers and employees and
rewarding persons rendering services to the Company
are deductible for the purposes of ICTA s.74 or 75
(deductions).
8.19.7 There are set out in the Disclosure Letter full
details of any payments made by the Company in the
six years prior to Completion to which the
provisions of ICTA s.148 and/or s.188 applied or
could have applied, such details to include the
dates and amounts of the payments and the
respective ages of all officers and employees
receiving such payments at the time such payments
were made.
9. PROPERTIES
9.1 Title
9.1.1 The particulars of the Properties shown in the
Fourth Schedule are true and correct and the owner
shown therein has good and marketable title to and
exclusive occupation of each Property.
9.1.2 There is appurtenant to each Property all rights
and easements necessary for its use and enjoyment
for the Company's business.
9.1.3 The Properties comprise all the freehold and
leasehold property owned, occupied or otherwise
used in connection with its business by the
Company.
9.1.4 The Company is the legal and beneficial owner of
the Properties.
9.1.5 The Properties are only occupied by the Company and
there are no third parties on any part of the
Properties, either as licencees trespassers or
squatters in respect of the whole or any part or
parts of the Properties.
9.2 Encumbrances and Restrictions
9.2.1 The Properties are free from any mortgage,
debenture, charge, rent charge lien or any other
Encumbrance securing the repayment of monies or
other obligation or liability of either the Company
or any other party.
9.2.2 The Properties are not subject to any outgoings
other than the general rates, water rates and
insurance premiums and rent and service charges and
the rent and service charges are paid up to the
date hereof except to the extent not yet due or
payable.
9.2.3 The Properties are not subject to any restrictive
covenants, stipulations, easements, way-leaves,
licences, grants, restrictions, over-riding
interests or other such rights vested in third
parties.
9.2.4 The leases of the leasehold properties contain no
onerous covenants affecting freedom of alienation
and no right on the part of any Landlord to
terminate the Lease except in the event of default.
9.2.5 No Property is subject to any option, right of pre-
emption or right of first refusal.
9.2.6 All the covenants restrictions and stipulations
contained in any Lease demising or affecting any
Property have been observed and performed in all
material respects and the Vendors are not aware of
any circumstance whereby the Landlord could serve a
notice on the Tenant under any such Lease and
further each Landlord has performed in all material
respects his or its covenants and obligations
pursuant to the relevant lease by which the
relevant Property was demised.
9.3 Planning
9.3.1 The use of each Property is the permitted use for
the purpose of Xxx Xxxx xxx Xxxxxxx Xxxxxxxx Xxx
0000 to 1977.
9.3.2 As far as Vendors are aware compliance has been
made in all material respects with all applicable
statutory and bye-law requirements with regard to
the Properties and in particular (but without
limitation) with the requirements as to Public
Health Acts The Housing Acts, The Highway Acts,
Offices Shops and Railway Premises Acts 1963, The
Factory Acts, The London Building Acts and it is
confirmed that there are no outstanding unobserved
or unperformed obligations with respect to the
Properties necessary to comply with the
requirements of the competent Authority exercising
statutory or delegated powers.
9.4 Adverse Orders
9.4.1 As far as the Vendors are aware there are no
Compulsory Purchase Notices, Orders or Resolutions
affecting the Property nor to the best of the
knowledge and belief of the Vendors and the Company
are there any circumstances likely to lead to any
such orders being made.
9.4.2 As far as the Vendors are aware there are no
closing or demolition or clearance orders
enforcement notices or stop notices affecting the
Properties nor to the best information and belief
of the Vendors and the Company are there any
circumstances likely to lead to any being made.
9.5 Condition of the Properties
9.5.1 The buildings and other structures on the
Properties are in good and substantial repair and
fit for the purposes for which they are presently
used.
9.5.2 There are no disputes with regard to the ownership
of any boundary walls and fences, any easements,
rights, means of access, covenants, restrictions,
way-leaves or licences affecting the Properties.
9.6 Environmental Pollution
9.6.1 The Properties have not in the past been used, nor
are the Vendors aware of the use of any
neighbouring land:-
(a) for any industrial process, storage, dumping,
transit, storage, lagooning or otherwise in
relation to toxic waste;
(b) as land-fill or for any other dumping or
materials which may potentially lead to the
production of methane, carbon dioxide or any
other gaseous emissions.
9.6.2 The Vendors are not aware of any pollution of the
ground water or any aquifer beneath the Properties
or any neighbouring property of toxic waste, sewage
or any other noxious substance being a known or
potential hazard to health or otherwise.
9.6.3 The Vendors are not aware of any intention on the
part of the local authority to enter details of the
Properties under Section 143 of the Environmental
Protection Act 1990 upon any statutory register of
land which may be contaminated.
9.6.4 The Vendors are not aware of any actual intended or
possible proceedings by an aggrieved person under
Section 82 of the Environmental Protection Act 1990
or any equivalent legislation in relation to any
matters affecting the Properties.
9.6.5 The Vendors have no reason for believing or
suspecting that any potential liability or
detriment arising from pollution or related
environmental matters, may attach to the owners or
occupiers of the Properties at present or at any
foreseeable future date.
9.6.6 The Vendor has supplied details of all reports,
inspections, surveys and investigations available
to the Vendor in respect of pollution or related
environmental matters affecting the Properties or
neighbouring property.
10. GENERAL
10.1 Material Disclosure
The contents of the Disclosure Letter and of all
accompanying documents are true and accurate in all
material respects and clearly and accurately disclose in
al material respects every matter to which they relate.
10.2 Loans to Vendors
There are not outstanding:-
10.2.1 any loans made by the Company to the Vendors and/or
any director of the Company and/or any Associate of
the Vendors or of any such director;
10.2.2 any debts owing to the Company by the Vendors
and/or any director of the Company and/or Associate
of the Vendors or of any such director;
10.2.4 any securities for any such loans or debts as
aforesaid.
10.3 Net Assets
The value of current assets less current liabilities as at
Completion is not less than their value as at the Balance
Sheet Date.
10.4 Investment, associations and branches
The Company:-
10.4.1 is not the holder or beneficial owner of and has
not agreed to acquire any class of the share or
other capital of any other company or corporation
(whether incorporated in the United Kingdom or
elsewhere) other than the Subsidiaries;
10.4.2 is not and has not agreed to become a member of any
partnership, joint venture, consortium or other
unincorporated association;
10.4.3 has no branch outside England and no permanent
establishment (as that expression is defined in the
respective Double Taxation Relief Orders current at
the date hereof) outside the United Kingdom.
SIXTH SCHEDULE
TAX INDEMNITIES
1. INDEMNITY
1.1 SUBJECT as hereinafter provided the Vendors hereby agree
to provide to the Purchaser an amount equal to:-
1.1.1 any Liability to Taxation:
(i) arising as a consequence of or by reference to
one or more Events which occurred on or before
the date hereof; or
(ii) arising in respect of or by reference to
any income, profits or gains which were earned,
accrued or received on or before or in respect
of a period ended on or before the date hereof.
1.1.2 any Liability to Taxation which would have arisen
(and in respect of which the Vendors would have
been liable under paragraph 1.1.1) but for the
setting off of an Accounts Relief or a New Relief
against that Liability to Taxation or (as the case
may be) against the income profits or gains which
would have given rise to that Liability to
Taxation;
1.1.3 any Liability to Taxation which would (on the basis
of the current rates of Taxation and assuming
income profits or gains chargeable to Taxation of
an amount equal to the Relief) have been saved but
for the loss of any Accounts Relief;
1.1.4 any reasonable costs and expenses incurred in
connection either with any such liability or amount
as is referred to in paragraphs 1.1.1 to 1.1.3
inclusive or with any Tax Claim in respect thereof
(including investigating, assessing or contesting
the same) or in taking or defending any action
under this schedule at the request or direction of
the Vendors.
1.2 The liability of the Vendors shall be joint and
several and shall bind their respective successors
and personal representatives.
2. EXCLUSIONS
2.1 The Indemnities contained in this Schedule do not cover
any Liability to Taxation:-
2.1.1 to the extent that provision or reserve
specifically in respect thereof has been made in
the US GAAP Accounts or specifically referred to in
the notes to the US GAAP Accounts;
2.1.2 to the extent that that Liability to Taxation was
paid or discharged on or before the Balance Sheet
Date;
2.1.3 to the extent that the Tax Claim arises as a result
of the appropriate provision or reserves in the US
GAAP Accounts being insufficient by reason of an
increase in the rate of Taxation (or a variation in
the method of applying or calculating the rate of
Taxation) made after the date hereof
2.1.4 for which the Company is or may become wholly or
primarily liable as a result of transactions in the
ordinary course of business after the Balance Sheet
Date;
2.1.5 to the extent that no actual loss is suffered by
the Company by reason that Liability to Taxation
has been made good or otherwise compensated for at
no expense to the Company by the Vendors or any of
them under any other provision of this Agreement or
by any other party;
2.1.6 to the extent that it would not have arisen but for
the fact that the treatment in future accounts of
the Company of assets or liabilities, or of the
Taxation attributable to timing differences is
different from the treatment in the last accounts
other than to the extent that any change in
accounting practice is necessary to bring the
accounts in to line with generally accepted
accounting practice;
2.1.7 to the extent that the Liability to Taxation arises
as a result of a change in the law or its
interpretation enacted or made after the date
hereof or a withdrawal or amendment, published
after that date of any extra-statutory concessions
or practice;
2.1.8 which would not have arisen but for the voluntary
act or omission of the Company or the Purchaser
(which should reasonably have been avoided) carried
our, or occurring, after the date hereof otherwise
than in the ordinary course of business and
otherwise than pursuant to a legally binding
commitment created on or before Completion;
2.1.9 to the extent of any recovery by the Purchaser
under the Warranties in respect of, or arising from
the same Liability to Taxation.
2.1.10 if and to the extent that the Liability to Taxation
arises because the Company fails, after due warning
to act in accordance with the reasonable
instructions of the Vendors in accordance with
paragraph 5.
2.2 Without prejudice to the generality of paragraph 2.1.2
above the following shall not be regarded as being within
the ordinary course of business of a member of the Group
for the purpose of this Schedule:
2.2.1 any Taxation arising under Part XVII Income and
Corporation Taxes Xxx 0000 (Tax Avoidance);
2.2.2 any Taxation arising in connection with any
distribution (as defined in Part VI Income and
Corporation Taxes Act 1988) or any deemed
distribution;
2.2.3 any Taxation arising in respect of the acquisition
disposal or supply of any assets goods services or
business facilities for a consideration deemed for
Taxation purposes to be in excess of that actually
given or received;
2.2.4 any disposal or deemed disposal of chargeable
assets.
2.3 No claim for payment shall be brought by the Purchaser in
respect of this Schedule unless notice of the Tax Claim
(specifying in reasonable detail the matter which gives
rise to such a Tax Claim and the amount claimed) is
received by the Vendors within the period set out in
paragraph 1.3 of the Seventh Schedule except that in
relation to matters referred to in Clause 10 of the
Seventh Schedule to this Agreement in which case the
period shall be not later than 7 years from the date
hereof.
2.4 The provisions of paragraphs 1.1, 1.2, 1.3, and 1.6 of the
Seventh Schedule (Limits on claims under Warranties) shall
apply to claims under this Schedule.
3. MITIGATION
3.1 The Vendors shall be liable under the indemnities
contained in paragraphs 1 and 2 hereof notwithstanding any
Reliefs which may be available to any person entitled to
the benefit of the indemnities to set against or otherwise
mitigate any Liability to Taxation so that the indemnities
contained in this Schedule shall take effect as though no
such Reliefs were available.
3.2 Paragraph 3.1 does not apply if, and to the extent that,
the Reliefs, rights of repayment or other rights or claims
mentioned in that paragraph arise wholly or mainly by
reason of an act or omission of the Company before the
Balance Sheet Date (unless the Relief in question is an
Accounts Relief).
3.3 If the Vendors satisfy a liability under this Schedule to
indemnify the Purchaser in respect of a Liability to
Taxation and the Company has a right of reimbursement
(including by way of indemnity) against another person in
respect of the Liability to Taxation, the Purchaser shall
procure that the Company at the expense of the Vendors
shall take all reasonable steps to enforce the right and
shall account to the Vendors for whichever is the lesser
of:-
3.3.1 any sum so recovered by the Company in respect of
that Liability to Taxation (including interest and
any repayment supplement paid by any Taxation
Authority less any Taxation chargeable on the
Company in respect of that interest); and
3.3.2 the liability satisfied by the Vendors under this
Schedule in respect of that Liability to Taxation.
3.4 If any provision for Taxation (not being a provision for
deferred taxation) contained in the Accounts shall at the
request and expense of the Vendors and to the satisfaction
of the Purchaser's Auditors prove to be an over-provision
the amount so over-provided shall be set off against the
liability (if any) of the Vendors under the provisions of
this Schedule.
4. DISPUTES AND CONDUCT OF TAX CLAIMS
4.1 If the Purchaser or the Company shall become aware of a
Tax Claim which is or may be relevant for the purposes of
this Schedule the Purchaser shall or shall procure that
the Company will as soon as reasonably practicable give
written notice thereof to the Vendors at the address
stated in accordance with Clause 13 of this Agreement for
this purpose.
4.2 The Purchaser shall procure that the Company shall ensure
that a Claim for Taxation to which paragraph 4.1 applies
is, so far as reasonably practicable, dealt with
separately from claims to which it does not apply and that
no Liability to Taxation arising from the Claim is
accepted or discharged prematurely. For this purpose, a
payment made by the Company to avoid incurring interest or
a penalty in respect of unpaid Taxation shall be deemed
not to be made prematurely.
4.3 If the Vendors shall indemnify and secure the Purchaser
and the Company to their reasonable satisfaction against
any liabilities, reasonable costs or expenses which may be
incurred thereby including any additional Liability to
Taxation the Purchaser shall or shall procure that the
Company will take such action as the Vendors may
reasonably request in writing to avoid resist appeal
dispute or compromise the Tax Claim (a Tax Claim where
action is so requested being hereinafter referred to as a
"Dispute") with the intent that the conduct and costs and
expenses of the Dispute shall be delegated to and borne by
the Vendors.
PROVIDED ALWAYS THAT the Purchaser shall not be obliged to
nor be required to procure that the Company shall take any
such action if having given the Vendors written notice of
the receipt of such assessment the Purchaser has not
within 15 days thereafter received written instructions
from the Vendors in accordance with the preceding
provisions of this sub-paragraph to do so.
4.4 Notwithstanding that the conduct of a Dispute may be dealt
with in accordance with the Vendors' request under sub-
paragraph 4.2 above:
4.4.1 the Company and the Purchaser shall be kept fully
informed of all matters pertaining thereto and
shall be entitled to receive copies of all
correspondence pertaining thereto;
4.4.2 the appointment of solicitors or other professional
advisers shall be subject to the approval of the
Purchaser such approval not to be unreasonably
withheld or delayed;
4.4.3 all communications pertaining to the Dispute which
are to be transmitted to the Inland Revenue H.M.
Customs & Excise or any other appropriate statutory
or governmental authority or body shall first be
transmitted to the Purchaser which shall be
afforded a reasonable opportunity to make comments
before the communication is transmitted;
4.4.4 the Vendors shall make no settlement or compromise
of the Dispute without the prior approval of the
Purchaser such approval not to be unreasonably
withheld or delayed.
4.5 If any dispute arises between the Vendor and the Purchaser
as to whether the Tax Claim should be at any time be
settled in full or contested in whole or in part, it shall
be resolved in accordance with the provisions set out in
the Eighth Schedule
5. PAYMENTS
5.1 The Vendors will settle with the Purchaser under the
provisions of this Schedule in full as follows (subject
always to the provisions of the Eighth Schedule and in the
event that these provisions and those of the Eighth
Schedule should conflict or otherwise be inconsistent the
latter shall prevail):
5.1.1 where a member of the Group is due to make an
actual payment of Taxation to which this Schedule
relates five days before that payment is due;
5.1.2 in the case of the nullification cancellation or
set-off of a right to repayment of Taxation the
date on which that repayment would have been due;
5.1.3 in the case of the loss counteraction nullification
disallowance or claw-back of any Relief (other than
a right to repayment of Taxation) the date on which
a member of the Group is required to make an actual
payment of Taxation which it would not have been
required to make but for the loss counteraction
nullification disallowance or claw-back of that
Relief;
5.1.4 in the case of costs and expenses incurred by the
Purchaser or a member of the Group in connection
with any Liability to Taxation or any other matter
not dealt with elsewhere in this paragraph 5 ten
days after the service by the Purchaser of a notice
containing a written demand therefor which includes
reasonable evidence of such expenses and costs
being incurred.
5.2 Where there is or has been a Dispute and the Dispute
relates to a Tax Claim where the Taxation the subject
matter thereof has to be paid before the action requested
by the Vendors in respect of the Tax Claim can effectively
be taken settlement in respect thereof shall be made by
the Vendors in full three days before such Taxation must
be paid to enable the Purchaser to comply with the
Vendors' request.
5.3 The Purchaser shall make a settlement with the Vendors to
the extent that, and on the date on which, the Company
receives a repayment of an amount paid in respect of a
Liability to Taxation under Clause 5.1. A settlement with
the Vendors under this paragraph 5.3 shall not prejudice
the right of the Purchaser to recover from the Vendors
under this schedule if a further liability to Taxation is
imposed upon the Company, whether in respect of matters to
which the settlement relates or otherwise.
5.4 For the purpose of Clause 5.3, the Company shall be deemed
to receive a repayment:
5.4.1 on the date on which the Company receives a
repayment of Taxation to which Clause 5.3 applies;
5.4.2 if and when the Company would have received the
repayment but for a Liability to Taxation in
respect of which the Company is not entitled to be
indemnified under this deed; or
5.4.3 if and when the Company would have received the
repayment had the Liability to Taxation been
discharged by a payment of Taxation;
5.5 The obligations of the Purchaser pursuant to Clauses 5.3
and 5.4 shall cease forthwith on the date determined in
accordance with the provisions of Clause 1.3 of the
Seventh Schedule.
6. TAXATION OF CLAIMS
In the event of any settlement pursuant to this Schedule
(and the Eighth Schedule) being liable to Taxation in the
hands of the Purchaser the amount of any such Liability to
Taxation shall be deemed to be increased so as to ensure
that the settlement received by the Purchaser shall after
Taxation be equal to that which would have been received
had the settlement not been subject to Taxation.
7. INTEREST
In the event that any settlement pursuant to this Schedule
has not been received by the date for settlement in
accordance with the provisions of this Schedule interest
shall accrue in respect of the sum unpaid at a rate of 2%
above NatWest/Barclays Bank PLC base rate for the time
being in force calculated on a daily basis.
8. TAX SAVINGS
If the Vendors have indemnified the Purchaser against a
Liability to Taxation which is in respect of advance
corporation tax, the Purchaser shall account to the
Vendors for an amount equal to any resulting reduction in
its liability to corporation tax as and when the Company
obtains the benefit of the reduction.
9. WITHHOLDING
Any settlement made by the Vendors pursuant to the
provisions of this Schedule shall be made in accordance
with, and be subject to, the provisions of the Eleventh
Schedule.
THE SEVENTH SCHEDULE
LIMITS ON CLAIMS UNDER WARRANTIES
1. The Vendors shall not have any liability under or in
relation to the Warranties:-
1.1 as regards any single claim, unless the amount of
the liability thereunder exceeds $25,000;
1.2 except to the extent that the aggregate amount of
the Vendors' liability in respect of all claims
hereunder exceeds $50,000 and for this purpose
single claims excluded by Clause 1.1 above will not
to be taken into account;
1.3 as regards any claim (other than a claim falling
within the provisions of paragraph 1.4 below)
unless notice in writing specifying particulars and
the amount thereof is received by the Vendors by 3
Business Days before the earlier of (i) the
delivery by Price Waterhouse LLP of its report on
the Purchaser's financial statements for the fiscal
year ended June 30th, 1998 or (ii) March 1, 1999;
1.4 As regards any claim to the extent that such claim
or liability arises or that the amount thereof is
increased as a result of any change in the basis
rate or method of calculation of any Taxation or as
a result of any other legislation decision or
regulation (whether or not in relation to Taxation)
or any change in or in the interpretation of any
such legislation decision or regulation occurring
or coming into force after the date hereof;
1.5 as regards any claim, to the extent of any amount
which is recovered from insurers;
1.6 to the extent that a breach of this Agreement also
gives rise to a claim under the Tax Indemnity and
the Vendors have satisfied such claim or vice
versa.
2. The liability of the Vendors under the Warranties shall be
reduced:
2.1 by an amount of or by which Taxation for which the
Company is accountable is extinguished or reduced
as a result of the claim giving rise to the
liability;
2.2 to the extent that provision or allowance therefore
has been made in the Accounts.
3. No claim shall lie in respect of any breach of the
Warranties to the extent that the same is capable of
remedy unless the Purchaser shall first afford the Vendors
a reasonable opportunity to remedy the breach complained
of in a reasonable fashion.
4. If the Purchaser or the Company shall be in receipt of any
claim which might constitute or give rise to or allege
that there has been a breach of any of the Vendor's
Warranties or made any claim thereunder the Purchaser
shall within a reasonable period notify the Vendors giving
as full details as practicable and shall allow the Vendors
and their authorised representatives and shall allow the
Vendors and their authorised representatives full and free
access at all reasonable times to the books and records of
the Company for the purposes of verifying such allegation
or claim and further shall (subject to being secured to
its reasonable satisfaction against all costs and expenses
incurred or for which it may become liable) take such
action as the Vendors may reasonable request to avoid
dispute resist appeal compromise or avoid any such claim.
5. If the Vendors settle with the Purchaser or the Company
for an amount in respect of a breach of any
representation, warranty, indemnity or undertaking
hereunder or under the Tax Indemnity or any document
ancillary hereto or thereto:
5.1 the Purchaser shall forthwith on receipt thereof by
the Purchaser or the Company reimburse to the
Vendors an amount equivalent to any sum recovered
from any third party (including any Taxation or
other authority) in respect of the amount settled
by the Vendors.
5.2 the Vendors may (subject to indemnifying the
Purchaser and the Company to their reasonable
satisfaction) require the Purchaser and the Group
Company to take all reasonable and appropriate
steps to enforce any rights against third parties;
and
5.3 the Purchaser shall or shall procure that the
Company shall keep the Vendors informed of any
actual or prospective such recovery, receipt or
right;
5.4 if the Purchaser is bound to reimburse any amount
under this Clause the Purchaser shall allocate and
make reimbursement to the Vendor(s) in proportion
to the amounts borne by them individually of the
original claim.
6. The aggregate liability of the Vendors in relation to the
Warranties and the Tax Indemnity shall in any event be
restricted to the value of the Holdback Shares (as defined
in the Eighth Schedule) as at the date of Completion. The
recourse of the Purchaser in respect of any claim under
the Vendors Warranties or the Tax Indemnity shall be
limited to the exercise of its rights under the Eighth
Schedule in respect of the Holdback Shares.
7. The amount of any settlement made by each Vendor to the
Purchaser in respect of any claim under the Warranties or
the Tax Indemnity shall be deemed a reduction dollar for
dollar in the value of the consideration payable to the
Vendors under this Agreement.
8. Nothing in this Seventh Schedule shall operate to limit or
exclude the liability of the Vendors for fraud or
misrepresentation (other than innocent misrepresentation).
9. Any settlement made by the Vendors pursuant to the
provisions of this Schedule shall be made in accordance
with, and be subject to, the provisions of the Eighth
Schedule.
THE EIGHTH SCHEDULE
HOLDBACK
1.1 On Completion, each Vendor shall be deemed to have
directed the Purchaser to withhold from delivery ten per
cent (10%) of the Consideration Shares issued to such
Vendor. The Consideration Shares withheld are herein
referred to as the "Holdback Shares". The Holdback Shares
shall be deemed to be issued to the Vendors but held by
the Purchaser subject to the terms and conditions set out
below. Holdback Shares shall be considered as issued
share capital of the Purchaser and shall have the rights
set out below.
1.2 All dividends and distributions (other than cash dividends
and distributions) made by the Purchaser with respect to
the Holdback Shares will be held by the Purchaser with the
other Holdback Shares as provided herein as additional
assets of the withholding to satisfy any claims arising
from a breach of the Warranties or a claim under the Tax
Indemnities ("a Claim"). Cash dividends and
distributions, if any, will be made by the Purchaser to
each Vendor, pro rata according to their respective
interests in the Holdback Shares.
1.3 If a meeting or written action of shareholders of the
Purchaser occurs while the provisions of this Schedule are
still in effect, the Purchaser shall promptly send to each
Vendor copies of any notices, proxies and proxy materials
in connection with such meeting or written action. At the
time of any such meeting, the Purchaser shall, if deemed
necessary by any of the Vendors, execute and deliver a
proxy authorising each Vendor to vote the whole number of
their Holdback Shares (eliminating any fractions).
2. The withholding of the Holdback Shares hereunder is for
the purpose of providing a source of indemnification to
the Purchaser and the other members of the Purchaser's
Group pursuant to the terms and conditions of this
Agreement, from and against all Claims.
3.1 The Holdback Shares shall be retained by the Purchaser
until the earlier to occur of (i) the delivery by Price
Waterhouse LLP of its report on the Purchaser's financial
statements for the fiscal year ended June 30th 1998 or
(ii) March 1, 1999 ("the Holdback Termination Date")
when, subject to Clause 3.2 below, the Holdback Shares,
less the Payment Shares (as defined below) if any, shall
be distributed to the Vendors.
3.2 The Holdback Shares shall not be distributed to a Vendor
on the Holdback Termination Date in the event that:
(a) a Vendor has either agreed liability for a Claim or
a counsel appointed pursuant to Clause 4 below has
determined the amount of a Claim and in either case
such Claim has not been satisfied in full; and/or
(b) the Purchaser has made a Claim which is subject to
determination in accordance with Clause 4 below.
4.1 If the Purchaser and/or the Company has a Claim the
Purchaser (on its own behalf and/or on the behalf of the
Company) will deliver a written notice thereof to the
Vendors pursuant to Clause 4 of the Ninth Schedule and
Clause 4 of the Eighth Schedule (a "Notice of Claim") and
setting forth the number of Holdback Shares necessary to
satisfy the claim in question, which will be determined by
dividing (x) the amount of such Claim by (y) the value of
one of the Holdback Shares on the date of Completion (the
"Payment Shares"). A good faith failure to state
correctly in a Notice of Claim the full amount of the
damage suffered by the Purchaser and/or the Company will
not prejudice their claim for damages in respect of such
Claim, and the Purchaser may deliver an additional Notice
of Claim as provided herein with respect to any amount of
damages not stated (in good faith) in a previous Notice of
Claim.
4.2 If the Vendors object to such Notice of Claim (whether as
to liability or the amount claimed), he/it will give
written notice to the Purchaser, within 7 Business Days,
of receipt of such Notice of Claim advising the Purchaser
of its objection (a "Notice of Objection"). If no Notice
of Objection is received from the Vendors by the Purchaser
within such period (and time shall be of the essence), the
Purchaser will effect payment of the amount of such Claim
as provided in Clause 5 below. If the Vendors deliver a
Notice of Objection within such period (and time shall be
of the essence), the Purchaser and the Vendors will
promptly meet and use their best endeavours in good faith
to settle the dispute. If the Purchaser and the Vendors
are able to settle the dispute, in whole or in part, they
will record such settlement in writing and the Purchaser
will effect payment of that Claim (or other agreed amount)
as provided in Clause 5 below. If the Purchaser and
Vendors are unable to reach agreement within 10 Business
Days after the delivery of the Notice of Objection, then
the dispute shall be referred to the determination of a
senior commercial counsel of at least ten years' standing
appointed by agreement between the Vendors and the
Purchaser, or (if they do not agree within 3 Business
Days) upon the application by either party to the
President for the time being of the Law Society, whose
determination shall be final. The counsel shall be asked
whether in his opinion an appeal against that Claim would
on the balance of probability be likely to succeed and the
quantum of such Claim. Such opinion to be available
within 10 Business Days of submission of argument from all
parties such argument to be provided to Counsel by all
parties no later than 5 Business Days following the day of
Counsel's appointment. Time shall be of the essence.
4.3 If the Purchaser is entitled to any damages pursuant to
the determination of counsel in accordance with Clause 4.2
above payment of the amount of such damages which is
specified in such determination will be made in the manner
prescribed in Clause 5 below. Notwithstanding the
foregoing, the Purchaser shall deliver to the Vendors a
notice specifying the amount and the equivalent number of
Payment Shares which will be deducted from the Holdback
Shares.
5. If the Purchaser is entitled pursuant to Clause 4 above to
receive damages in respect of a Claim, the Purchaser will
exchange the certificate representing the Holdback Shares
for a new share certificate representing a number of
shares of the Purchaser (which will remain Holdback
Shares) equal to the number of Holdback Shares previously
held by the Purchaser less the number of Payment Shares.
The number of Holdback Shares attributable to each Vendor
will be reduced (and the number of Payment Shares
determined) pro rata (subject to appropriate adjustment in
respect of fractions) to a Vendor's entitlement to
Consideration Shares as set out in the First Schedule.
SIGNED by )
in the presence of: ) /s/Xxxxx X. Xxxxxxxxxxxxx
SIGNED by )
for and on behalf of )
PAREXEL INTERNATIONAL )
CORPORATION )
in the presence of:- ) /s/Xxxxx X. Xxxxxxxx
THE SEAL of CLARENDON )
TRUST COMPANY was hereunto )
affixed in the presence of:- )
Director
/s/Contra Services Limited
Director/Secretary
