Exhibit 10.86
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DATED February 7, 2001
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(1) P-COM NETWORK SERVICES LIMITED
(2) SPECTRASITE TRANSCO COMMUNICATIONS LIMITED
(3) P-COM, INC.
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A G R E E M E N T
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For the sale and purchase
of the entire issued share capital of R.T. MASTS LIMITED
EVERSHEDS
Cloth Xxxx Xxxxx
Xxxxxxxxx Xxxxxx
Xxxxx XX0 0XX
Tel: 0000 000 0000
Fax: 0000 000 0000
CONTENTS
Clause Page
1 INTERPRETATION 1
2 SALE AND PURCHASE 6
3 COMPLETION 6
4 GUARANTEES 6
5 WARRANTIES 7
6 LIMITATION ON CLAIMS 8
7 PURCHASER'S WARRANTIES AND UNDERTAKINGS 10
8 RESTRICTIVE COVENANTS 10
9 GUARANTOR OBLIGATIONS 12
10 ANNOUNCEMENTS 14
11 COSTS 14
12 INTEREST 14
13 NOTICES 15
14 ASSIGNMENT 15
15 GENERAL 16
16 GOVERNING LAW AND JURISDICTION 17
17 COUNTERPARTS 17
18 PENSION INDEMNITY 17
20 TELESYS INDEMNITY 18
20 ENTIRE AGREEMENT 18
21 MANAGEMENT ACCOUNTS 18
22 LAND CERTIFICATE 19
Schedules
1 THE GROUP 20
Part 1: Details of the Company 20
Part 2: Details of other Group Members 21
2 THE PROPERTY 23
Part 1: Freehold 23
Part 2: Leasehold 24
3 NON-TAXATION WARRANTIES 25
4 TAXATION 40
Part 1 - Interpretation 40
Part 2 - Tax Covenant 44
Part 3 - Tax Warranties 53
5 COMPLETION ARRANGEMENTS 62
6 PROVISIONS REGARDING RETENTION FUND 65
7 RELEVANT SERVICES 66
THIS AGREEMENT is made on February 7, 2001
BETWEEN:
(1) P-Com Network Services Limited (registered number 3416747) whose registered
office is at 3 and 0 Xxxxxx Xxxxx, Xxxx Farm Industrial Estate,
Xxxxxxxxxxxxxx, Xxxxxxxxxxxxxxxx XX0 0XX ("the Vendor");
(2) SpectraSite Transco Communications Limited (registered number 3922958)
whose registered office is at Xxxxxxxxx Xxxxx, Xxxxxxx Xxxx, Xxxxxxx
Xxxxxxxx Xxxx, Xxxxxxx, Xxxxxxxxxxxxx XX00 0XX ("the Purchaser"); and
(3) P-COM, INC. of 0000 Xxxxx Xxxxxxxxxx Xxxxxxxxx, Xxxxxxxx, Xxxxxxxxxx 00000,
Xxxxxx Xxxxxx of America ("the Guarantor").
OPERATIVE CLAUSES:
1. INTERPRETATION
In this Agreement:
1.1 the following expressions have the following meanings unless inconsistent
with the context:
"Accounting Date" 31 December 1999
"Accounts" the audited accounts of each Group
Member for the financial year which
ended on the Accounting Date, comprising
in each case a balance sheet, a profit
and loss account, notes, directors' and
auditors' reports
"Associated Company" any company, not being a Group Member,
which at the relevant time is:
(a) a holding company of the Vendor; or
(b) a subsidiary or subsidiary
undertaking of the Vendor; or
(c) a subsidiary or subsidiary
undertaking (other than the Vendor
itself) of any such holding
company; and the expressions
"holding company", "subsidiary" and
"subsidiary undertaking" having the
meanings given to them by CA 1985
and the expressions "holding company",
"subsidiary" and "subsidiary
undertaking" having the meanings given
to them by CA 1985
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"Business Day" any day (other than a Saturday or
Sunday) on which banks are open in
London for normal banking business
"CA 1985" the Companies Xxx 0000
"Company" R.T. Masts Limited (details of which are
set out in Part 1 of Schedule 1)
"Completion" completion of the sale and purchase in
accordance with clause 3
"Computer Systems" all computer hardware, software,
microprocessors and firmware and any
other items that connect with any or all
of them which in each case are used in
the Group's business or are in the
possession of any Group Member.
"Confidential Information" all information not publicly known, used
in or otherwise relating to the Group's
business, customers, or financial or
other affairs, including information
relating to:
(a) trade secrets, know-how, computer
systems and computer software;
(b) future projects, business
development or planning, commercial
relationships and negotiations; and
(c) the marketing of goods or services
including customer names and lists,
sales targets and statistics
"Consideration" the consideration for the sale of the
Shares as stated in clause 2.2
"Contract" any agreement or commitment whether
conditional or unconditional and whether
by deed, under hand, oral or otherwise,
and any arrangement or understanding
whether legally binding or not
"Disclosure Letter" the letter having the same date as this
Agreement from the Vendor to the
Purchaser qualifying the Warranties
"Encumbrance" any mortgage, charge, pledge, lien,
assignment by way of security, option,
restriction, claim, right of pre-
emption, right of first refusal, third
party right or interest, other
2
encumbrance or security interest of
any kind, or other preferential
arrangement having similar effect
"EHS Law" all or any laws from time to time with
regard to EHS matters
"EHS Matters" all or any matters relating to the
pollution or protection of the
environment or harm to or the
protection of human health and safety
or the health of animals and plants
"EHS Permits" all or any permits, consents,
licences, approvals, certificates and
other authorisations required by EHS
Law for the operation of the business
of the company or the condition or use
of the property
"Environment" any air (including air within natural
or man-made structures above or below
ground), water (including territorial,
coastal and inland waters, ground
water and water in drains and sewers),
and land (including surface land, sub-
surface land, seabed and river bed
under water)
"the Group" together the Company and each other
company details of which are set out
in Part 2 of Schedule 1
"Group Member" any company which is a member of the
group
"the Group Personal Pension the R. T. Masts Limited Group Personal
Scheme" Pension Scheme insured with Standard
Life
"ICTA" Income and Corporation Taxes Xxx 0000
"Intellectual Property Rights" patents, trade marks, service marks,
registered designs, design rights,
copyright, know how and all other
intellectual property (of whatever
nature) and any applications for the
same
"the Loan Note" the (Pounds)500,000 loan note to be
issued by the Purchaser to the Vendor
in partial satisfaction of the
Consideration
"the Life Assurance Scheme" The R. T. Masts Limited Group Life
Assurance Scheme established by a deed
dated 1 September 1997 insured with
AIG Life (UK) (policy no 394A0004)
"Management Accounts" the management accounts of the Company
for each month in respect of the
period from the Accounting Date to 31
3
December 2000
"the One2One Contract" the agreement dated 17 September 1998
entered into between Mercury Personal
Communications and the Guarantor as
subsequently amended
"the Pension Schemes" the R. T. Masts Limited Pension Scheme
established by a trust deed dated 27
June 1986 and the R. T. Masts Limited
Executive Pension Scheme established
by an interim trust deed dated 11 May
1990
"the PHI Scheme" the R. T. Masts Limited Group Long
Term Disability Insurance Scheme
insured with UNUM Limited (policy
number GS/907918/B)
"Plant and Equipment" the plant and machinery, vehicles,
fixtures and fittings, furniture,
tools and other equipment used in
connection with the business of the
Group
"Property" the property specified in Schedule 2
and each part of such property
"Purchaser's Solicitors" Eversheds of Cloth Xxxx Xxxxx,
Xxxxxxxxx Xxxxxx, Xxxxx XX0 0XX (Ref:
C5.KF.TLB)
"Relevant Claim" any claim for breach of any of the
Warranties
"Relevant Customer" any person who at any time during the
period of 12 months immediately
preceding Completion was:
(a) negotiating with any Group Member
for the supply by such Group
Member of goods or services; or
(b) a client or customer of any Group
Member; or
(c) in the habit of dealing with any
Group Member
"Relevant Services" the services referred to in Schedule 7
comprising (for the avoidance of
doubt) those services supplied by any
Group Member at any time during the
period of 12 months immediately
preceding Completion in the United
Kingdom
"Shares" all the issued shares in the capital
of the Company
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"Software" any form of computer program, including
applications software and operating
systems, whether in source, object or
machine code form.
"Stock" Stocks (as defined in Statement of
Standard Accounting Practice No 9
adopted by the Accounting Standards
Board) of any Group Member including raw
materials, components, work in progress,
finished goods and consumables
"the Sub-Contract" the sub-contract relating primarily to
the One 2 One Contract and to be entered
into at Completion in agreed terms
between the Guarantor and the Company
"Vendor's Solicitors" Xxxxxxx, Xxxx & Xxxx of Xxxxx Castle, 00
Xxxxx Xxxxxx, Xxxxxx XX0X 0XX
"Warranties" the warranties set out or referred to in
clause 5, Schedule 3 and Part 3 of
Schedule 4;
1.2 references to any statute or statutory provision include, unless the
context otherwise requires, a reference to the statute or statutory
provision as modified or re-enacted and in force from time to prior to
Completion and any subordinate legislation made under the relevant statute
or statutory provision in force prior to Completion;
1.3 references to persons will include bodies corporate, unincorporated
associations and partnerships;
1.4 references to a document being "in the agreed terms" are to that document
in the form agreed and for the purposes of identification initialled by or
on behalf of the Vendor and the Purchaser;
1.5 references to clauses and Schedules are to clauses of and Schedules to this
Agreement, and references to paragraphs are to paragraphs in the Schedule
in which such references appear;
1.6 the Schedules form part of this Agreement and will have the same force and
effect as if expressly set out in the body of this Agreement;
1.7 the headings in this Agreement will not affect its interpretation; and
1.8 any phrase introduced by the term "include", "including", "in particular"
or any similar expression will be construed as illustrative and will not
limit the sense of the words preceding that term.
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2. SALE AND PURCHASE
2.1 The Vendor will sell with full title guarantee, and the Purchaser will buy,
the Shares. The Shares will be sold free of any Encumbrance and with all
rights attached or accruing to them at or after the date of this Agreement.
2.2 The consideration for the sale of the Shares will, subject as hereinafter
provided, be the sum of (Pounds)9,250,000 (nine million two hundred and
fifty thousand pounds). Of the said aggregate consideration the sum of
(Pounds)8,250,000 (eight million two hundred and fifty thousand pounds)
shall be paid in cash on Completion, the sum of (Pounds)500,000 (five
hundred thousand pounds) ("the Retention Fund") shall be dealt with in
accordance with the provisions set out in Schedule 6; and the sum of
(Pounds)500,000 shall be satisfied by the issue of the Loan Note by the
Purchaser to the Vendor.
2.3 Any sum payable to the Vendor either on Completion or in accordance with
the provisions set out in Schedule 6 shall be paid in cash by way of a
CHAPS transfer from a Clearing Bank to the client account of the Vendors'
Solicitors with Barclays Bank, 000 Xxxxxxxxxxx, Xxxxxx XX0X 0XX, account
name "Xxxxxxx Xxxx & Xxxx, Clients Premium Account", sort code 20-77-67,
account number 00000000 or by such other method as may be agreed between
the parties. The Vendor's Solicitors are authorised to receive the
Consideration on behalf of the Vendor and payment to them will be a good
and sufficient discharge to the Purchaser and the Purchaser will not be
further concerned as to the application of the moneys so paid.
2.4 If any of the Retention Fund shall become payable to the Purchaser by way
of compensation or indemnity in accordance with the provisions of Schedule
6, and, if applicable, subject to the limitations contained in clause 6,
the Consideration shall be abated by the amount so payable and any rights
of the Purchaser to such compensation or indemnity shall be reduced by the
amount of such abatement, but without prejudice to the right of the
Purchaser (or any Group Member in the case of indemnities granted in their
favour) to recover the excess of any compensation or indemnity or any costs
or expenses from the Vendors to the extent not recovered out of the
Retention Fund.
3. COMPLETION
3.1 Completion will take place immediately after the signing of this
Agreement.
3.2 At Completion, the Vendor and the Purchaser will comply with Schedule 5.
3.3 The Purchaser will not be obliged to complete the purchase of any of the
Shares unless the purchase of all the Shares is completed simultaneously.
4. GUARANTEES
4.1 The Vendor will procure that on Completion each Group Member is released
from any guarantee, indemnity, counter-indemnity, letter of comfort or
other obligation ("Guarantee") given by such Group Member to any third
party in respect of a liability of any person other than wholly and
exclusively of any Group Member or Group Members.
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4.2 In the period after Completion the Purchaser hereby agrees that it shall,
upon request, use reasonable endeavours to procure the release and
discharge of any Guarantee entered into by the Vendor or any Associated
Company in respect of the liabilities of the Company and/or any other Group
Member provided that for the avoidance of doubt and without limitation, the
obligations of the Purchaser pursuant to this clause 4.2 shall not extend
to:
4.2.1 procuring that employees of the Purchaser and/or any Group Member
shall spend significant amounts of time in attempting to procure any
such release and discharge;
4.2.2 any expenditure on the part of the Purchaser and/or any Group
Member, save where such expenditure has already been reimbursed in
advance to the Purchaser and/or any Group Member by the Vendor or
any Associated Company; or
4.2.3 the entering into of any form of guarantee or other security on the
part of the Purchaser and/or any Group Member,
and provided also that the Vendor hereby agrees to indemnify and keep
indemnified the Purchaser and/or any relevant Group Member against any
costs or other liabilities incurred by the Purchaser and/or any such Group
Member as a result of any actions undertaken by the Purchaser and/or any
such Group Member pursuant to this clause 4.2.
5. WARRANTIES
5.1 The Vendor warrants to the Purchaser in the terms of the Warranties.
5.2 The Warranties are qualified by all facts and matters fairly disclosed in
the Disclosure Letter.
5.3 The Vendor undertakes to indemnify the Purchaser on demand against all
costs (including legal costs) or expenses which the Purchaser or any Group
Member may reasonably incur before or after the commencement of any action
in connection with a breach of any of the Warranties.
5.4 The Vendor waives and may not enforce any right which the Vendor may have
against any director or employee of any Group Member, on which or on whom
the Vendor may have relied in agreeing to any term of this Agreement or any
statement in the Disclosure Letter PROVIDED THAT the provisions of this
clause 5.4 shall not restrict the Vendor from making a claim against any
such director or employee in the event of fraud, dishonesty or reckless or
wilful misconduct on the part of any such director or employee.
5.5 Each Warranty is to be construed independently and is not limited or
restricted by any other Warranty or any other term of this Agreement.
5.6 Unless otherwise specified, where any Warranty refers to the knowledge,
information, belief or awareness of the Vendor (or similar expression), the
Vendor will be deemed to have such knowledge, information, belief or
awareness as the Vendor would have obtained had the Vendor made all
reasonable enquiries of Xxx Xxxxxx, Xxxxxxxx Xxxx, Xxxx Xxxxxxx, Xxxxxx
Xxxxxxx, Xxxxxxxx Xxxxxxxx and Xxxxxx Xxxx into the subject matter of that
Warranty.
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6. LIMITATION ON CLAIMS
6.1 Neither the Vendor nor the Guarantor will be liable for any Relevant Claim
or, where specifically indicated, any claim under Part 2 of Schedule 4,
unless:
6.1.1 with respect only to any Relevant Claim, the amount of the
liability in respect of that Relevant Claim when aggregated with
the amount of the liability in respect of all other Relevant Claims
exceeds (Pounds)100,000 (in which event the Vendor will be liable
for the whole amount of such Relevant Claims and not merely the
excess) and, provided that written particulars of such Relevant
Claim shall have been received by the Vendor or Guarantor pursuant
to clause 6.1.3, thereafter unless the amount of the liability in
respect of any further Relevant Claims when aggregated with the
amount of the liability in respect of all other further Relevant
Claims exceeds a further (Pounds)50,000 (in which event the Vendor
will be liable for the whole amount of such further Relevant Claims
and not merely the excess) and so forth in multiples of
(Pounds)50,000 until the expiry of the relevant time periods for
the bringing of any Relevant Claim pursuant to clause 6.1.3 below
at which point (assuming the initial threshold of (Pounds)100,000
has been exceeded) the Purchaser will be entitled to claim the
balance (if any) outstanding pursuant to any Relevant Claims;
6.1.2 with respect only to any claim under Part 2 of Schedule 4, the
amount of the liability in respect of that claim when aggregated
with the amount of the liability in respect of all other claims
under Part 2 of Schedule 4 exceeds (Pounds)50,000 (in which event
the Vendor will be liable for the whole amount of such claims and
not merely the excess);
6.1.3 the Vendor and the Guarantor receive from the Purchaser written
particulars of the Relevant Claim or, as the case may be, claim
under Part 2 of Schedule 4, (stating in reasonable detail the
nature of the Relevant Claim or claim under Part 2 of Schedule 4
and together with, where practicable, reasonable supporting
documentary evidence):
6.1.3.1 on or prior to the date which is one month after the
filing of the second set of audited accounts of the
Company after the date hereof (provided that this is not
later than 31 August 2002) in the case of a Relevant Claim
for breach of any of the Warranties contained in Schedule
3;
6.1.3.2 within 6 years after Completion, in the case of a Relevant
Claim for breach of any of the Warranties contained in
Part 3 of Schedule 4 or a claim under Part 2 of Schedule
4,
and any such Relevant Claim that may have been made within the time
periods set out in this clause 6.1.3 (if it has not been previously
satisfied, settled or withdrawn) shall be deemed to have been waived
or withdrawn at the expiry of 8 months after the service of written
particulars referred to in this clause 6.1.3 unless proceedings in
respect thereof shall have commenced against the Vendor or the
Guarantor, and for this purpose proceedings shall not be deemed to
have commenced unless they have been both issued and served on the
Vendor or the Guarantor.
8
6.2 The aggregate amount of the liability of the Vendor and the Guarantor for
all Relevant Claims, claims under Part 2 of Schedule 4 and claims under the
indemnities contained in clause 18 and clause 19 will not exceed
(Pounds)9,250,000 and any such claims shall operate first against the
Retention Fund in accordance with Schedule 6, thereafter by way of
cancellation of the principal outstanding under the Loan Note and
thereafter shall be satisfied by the Vendor or the Guarantor in cash.
6.3 Neither the Vendor nor the Guarantor shall be liable under the Warranties
in respect of any Relevant Claim:
6.3.1 based on any liability which is contingent only unless and until
such contingent liability becomes an actual liability, provided that
this sub-clause shall not operate to avoid a claim made in
accordance with clause 6.1.3 in respect of a contingent liability
within the applicable time limit specified in clause 6.1.3;
6.3.2 if and to the extent that specific allowance, specific provision or
specific reserve was made in the Accounts for the matter giving rise
to the Relevant Claim;
6.3.3 for any loss arising pursuant to a breach of Warranty to the extent
that any such loss is actually recovered by the Purchaser or any
Group Member under a policy of insurance in force on the date of
loss but having deducted any costs incurred in pursuing recovery
under such policy of insurance.
6.4 Neither the Vendor nor the Guarantor shall be liable in relation to any
Relevant Claim which would not have arisen but for a voluntary act,
omission or transaction carried out outside the ordinary course of business
of the Group after the date hereof by any Group Member (otherwise than
pursuant to a legally binding commitment of any such Group Member created
on or before the date hereof) in circumstances where the Purchaser ought
reasonably to have been aware that such matters would give rise to a
Relevant Claim and other than in order to comply with any law.
6.5 Neither the Vendor nor the Guarantor shall be liable in relation to any
Relevant Claim to the extent that it occurs as a result of any legislation
not in force at the date hereof or any change of law or administrative
practice after the date hereof which takes effect retrospectively.
6.6 Save in relation to any Relevant Claim pursuant to the Warranties contained
in Part 3 of Schedule 4 (in which case paragraphs 8 and 10 of Schedule 4
shall apply), if the Vendor or the Guarantor pays to the Purchaser or the
Company an amount in respect of a Relevant Claim and the Purchaser or the
Company subsequently recovers from a third party a sum which is wholly
attributable to the subject matter of such Relevant Claim, the Purchaser or
the Company shall repay to the Vendor or the Guarantor (as the case may be)
the lesser of:
6.6.1 the amount of such receipt which is so wholly attributable from the
third party (after deducting an amount equal to the costs of the
Purchaser and/or the Company incurred in recovering such receipt and
any taxation payable thereon); or
9
6.6.2 the amount paid by the Vendor or the Guarantor (as the case may be)
pursuant to the Relevant Claim.
6.7 The Purchaser hereby agrees for itself and on behalf of the Company and
each other Group Member with the Vendor and the Guarantor that, in respect
of any claims where the Vendor or the Guarantor may be liable to the
Purchaser under the Warranties or the provisions of Part 2 of Schedule 4,
neither the Vendor nor the Guarantor shall be obliged to meet any such
liability more than once.
6.8 Any breach of any of the Warranties, provisions of Part 2 of Schedule 4,
covenants or undertakings or any other breach of this Agreement by the
Vendor or the Guarantor shall not entitle the Purchaser to rescind this
Agreement.
6.9 The preceding provisions of this clause 6 will not apply in respect of a
Relevant Claim concerning paragraph 1 (capital and capacity) of Schedule
3.
6.10 Notwithstanding any other provision of this Agreement, the preceding
provisions of this clause 6 will not apply to exclude or limit the
liability of the Vendor or the Guarantor to the extent that any Relevant
Claim arises by reason of any fraud or dishonest or reckless or wilful
misconduct or wilful omission by or on behalf of the Vendor.
7. PURCHASER'S WARRANTIES AND UNDERTAKINGS
7.1 The Purchaser warrants that it is duly incorporated in England and Wales,
has corporate capacity to enter into this Agreement and its signatories
have been duly authorised to execute this Agreement and all documents
mentioned herein as deeds or agreements, as applicable.
7.2 The Purchaser covenants and undertakes with and to the Vendor that it will
not at any time after Completion use the name "P-Com" or any name
identical or confusingly similar to "P-Com" in connection with any
activity whatsoever.
8. RESTRICTIVE COVENANTS
8.1 The Vendor and the Guarantor undertake to the Purchaser and the Company
that they will not, and will procure that no Associated Company will
(whether alone or in conjunction with, or on behalf of, another person and
whether directly or indirectly), without the prior written consent of the
Purchaser:
8.1.1 for a period of 2 years immediately following Completion, canvass,
solicit or approach, or cause to be canvassed, solicited or
approached, any Relevant Customer for the supply of Relevant
Services (other than in connection with the solicitation of or the
issue of tenders for bids or requests for quotes for the provision
of services along with products of the Vendor, Guarantor, or any
Associated Company on a turnkey basis);
8.1.2 for a period of 2 years immediately following Completion, deal or
contract with any Relevant Customer in relation to the supply of
Relevant Services;
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8.1.3 for a period of 2 years immediately following Completion directly
interfere, or seek to directly interfere, with the continuance of
supplies to any Group Member from any supplier who has been
supplying goods or services to any Group Member at any time during
the 12 months immediately preceding Completion if such interference
causes or would cause that supplier to cease supplying, or
materially reduce, or materially and adversely change its terms of,
its supply of, those goods or services;
8.1.4 for a period of 2 years immediately following Completion:
8.1.4.1 solicit or entice away, or endeavour to solicit or entice
away, from any Group Member; or
8.1.4.2 employ:
(a) in the case of any relevant employee of any Group Member
whose basic current salary (excluding overtime payments) is
equal to or in excess of (Pounds)30,000 per annum, in any
capacity; or
(b) in the case of any other relevant employee of any Group
Member, in any respect in connection with the provision of
the Relevant Services,
any person employed in a managerial, supervisory, technical or sales
capacity by any Group Member at Completion or at any time during the
period of 12 months immediately preceding Completion where the
person in question either has Confidential Information or would be
in a position to exploit any Group Member's trade connections;
8.1.5 within the United Kingdom for a period of 2 years immediately
following Completion, be engaged, concerned, connected with or
interested in (except as the owner for investment of securities in a
company dealt in on a recognised stock exchange and which confer not
more than 3 per cent of the votes which could be cast at a general
meeting), any other business which supplies Relevant Services (other
than in connection with the solicitation of or the issue of tenders
for bids or requests for quotes for the provision of services along
with products of the Vendor, Guarantor, or any Associated Company on
a turnkey basis);
8.1.6 without prejudice to any rights relating to passing off or trade or
service xxxx infringement (or similar rights in any territory), for
a period of 2 years immediately following Completion use in
connection with any business which is competitive with the business
of any Group Member any name (in whatever form) which includes the
name of any Group Member or any trading style or get up which is
confusingly similar to that used by any Group Member as at
Completion.
8.2 Except so far as required by law or any governmental or regulatory
organisation (in whatever jurisdiction) and in those circumstances only
after prior consultation with the Purchaser, each of the Vendor and the
Guarantor undertakes to the Purchaser and to each Group Member that they
will not, and will procure that no Associated Company will, at any time
after Completion:
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8.2.1 disclose any Confidential Information to any person except to those
authorised by any Group Member to know;
8.2.2 use any Confidential Information for their own purposes or for any
purposes other than those of any Group Member; or
8.2.3 cause or permit any unauthorised disclosure of any Confidential
Information.
8.3 Each of the undertakings set out in this clause is separate and severable
and enforceable accordingly, and if any one or more of such undertakings or
part of an undertaking is held to be against the public interest or
unlawful or in any way an unreasonable restraint of trade, the remaining
undertakings or remaining part of the undertakings will continue in full
force and effect and will bind the Vendor and the Guarantor.
8.4 Nothing in this clause 8 shall prevent the Guarantor or any of the
Associated Companies issuing or soliciting tenders for bids ("TFB") or
requests for quotes ("RFQ") for the provision of Relevant Services provided
that:
(a) the Guarantor issues the TFB or RFQ to the Company before or at the
same time as it issues it to any other provider of Relevant Services;
(b) the Relevant Services are required to be provided along with products
of the Guarantor, the Vendor and/or the Associated Companies on a
turnkey basis; and
(c) for the avoidance of doubt nothing in this clause 8.4 shall in any
way operate to prejudice or reduce the application of clause 8.1.2
and 8.1.5 above.
9. GUARANTOR OBLIGATIONS
9.1 In consideration of the Purchaser entering into this Agreement the
Guarantor irrevocably and unconditionally:
9.1.1 guarantees to the Purchaser the due and punctual payment, observance
and performance by the Vendor of all of the Vendor's liabilities and
obligations, whether present or future, express or implied, actual
or contingent, under or arising out of this Agreement, including any
liability or obligation to pay damages or other compensation for any
breach of any of the Warranties or to pay sums due and payable (but
unpaid by the Vendor) under Part 2 of Schedule 4; and
9.1.2 agrees as a primary obligation to indemnify the Purchaser from time
to time on demand against each loss, liability and cost which the
Purchaser incurs as a result of any of the obligations of the Vendor
under the Agreement being or becoming void, voidable, unenforceable
or ineffective for any reason whatsoever whether or not known to the
Purchaser, the amount of such loss being the amount which, having
regard to any relevant provisions contained in clause 6, the
Purchaser would otherwise have been entitled to recover from the
Vendor.
9.2 The Purchaser will not be obliged before exercising any of the rights,
powers or remedies conferred upon it in respect of the Guarantor under this
clause or by law:
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9.2.1 to make any demand of the Vendor;
9.2.2 to enforce or seek to enforce any claim, right or remedy against the
Vendor or any other person; or
9.2.3 to make or file any claim or proof in connection with the insolvency
of the Vendor or any other person; or
9.2.4 to take any action or obtain judgment in any court against the
Vendor or any other person.
9.3 Neither the liability of the Guarantor under this clause nor the rights,
powers and remedies conferred on the Purchaser under this clause or by law
will in any way be released, prejudiced, diminished or affected by any of
the following:
9.3.1 time or other indulgence being granted to the Vendor in respect of
its obligations under the Agreement;
9.3.2 the insolvency, incapacity, disability, or any change in the
constitution, name, control or style of, the Vendor or the
Guarantor;
9.3.3 any invalidity, illegality, unenforceability, irregularity or
frustration in any respect of any of the liabilities or obligations
referred to in clause 9.1.1; and
9.3.4 any act, omission event or circumstances which, but for this
provision, might operate to prejudice, affect or otherwise affect
the liability of the Guarantor under this clause or any of the
rights, powers or remedies conferred upon the Purchaser under this
clause or by law.
9.4 Save for any matters forming the subject matter of any legally binding
settlement agreement between the Vendor and the Purchaser, the obligations
of the Guarantor shall constitute and be continuing obligations
notwithstanding any settlement of account or other matter or thing
whatsoever, and in particular shall not be considered satisfied by any
intermediate payment or satisfaction of all or any of the obligations of
the Vendor under this Agreement and shall continue in full force and effect
until final payment in full of all amounts owing by the Vendor in total
satisfaction of all the Vendor's actual and contingent obligations under
this clause.
9.5 The Guarantor agrees that whilst any amounts are or may be owed by the
Vendor under this Agreement or the Vendor is under any actual or contingent
obligation under this Agreement, the Guarantor shall not exercise any
rights which the Guarantor may at any time have by reason of performance by
it of its obligations under this clause:
9.5.1 to be indemnified by the Vendor;
9.5.2 to claim any contribution from any other guarantor of the Vendor's
obligations contained in this Agreement;
13
9.5.3 to take the benefit (in whole or in part) and whether by way of
subrogation or otherwise of any rights of the Purchaser under the
Agreement or of any other security taken in connection with the
Agreement by the Purchaser; or
9.5.4 to claim or prove in a liquidation or other insolvency proceedings
of the Vendor in preference to the Purchaser.
9.6 The Guarantor undertakes that, in the event of any claim being made against
the Guarantor, the Guarantor will not make any claim against any director
or employee of any Group Member on which or on whom the Vendor or the
Guarantor may have relied before agreeing to any term of this Agreement or
authorising any statement in the Disclosure Letter PROVIDED THAT the
provisions of this clause 9.6 shall not restrict the Guarantor from making
a claim against any director or employee in the event of fraud, dishonesty
or reckless or wilful misconduct on the part of any such director or
employee.
9.7 Any settlement, discharge, compromise or other arrangement reached between
the Purchaser and the Guarantor in respect of the Guarantor's obligations
under this clause shall be deemed always to have been void if in reaching
such arrangement the Purchaser relied on any fact, matter or circumstance
which is subsequently invalidated or avoided by any provision of law.
10. ANNOUNCEMENTS
10.1 No announcement or circular concerning the transactions contemplated by
this Agreement or any matter ancillary to it and no disclosure of the terms
of this Agreement will be made by the Vendor or the Guarantor except with
the prior written approval of the Purchaser or by the Purchaser except with
the prior written approval of the Vendor and the Guarantor.
10.2 This clause does not apply to any announcement, circular or disclosure
required by law or any governmental or regulatory organisation or
recognised stock exchange, provided, if practicable, that the party
required to make it has first consulted with the other party.
11. COSTS
Except where expressly stated otherwise, each party to this Agreement will
bear such party's own costs and expenses relating to the negotiation,
preparation and implementation of this Agreement. No Group Member will bear
any part of such costs and expenses.
12. INTEREST
If the Vendor or the Guarantor becomes liable to pay the Purchaser or any
Group Member any sum pursuant to this Agreement other than pursuant to
Schedule 6, whether a liquidated sum or by way of damages or otherwise, the
Vendor or the Guarantor (as the case may be) will be liable to pay interest
on such sum from the due date for payment at the annual rate of 3 per cent
above the base lending rate from time to time of the National Westminster
Bank plc, accruing on a daily basis until payment is made, whether before
or after any judgment.
14
13. NOTICES
13.1 Any notice or other communication given in connection with this Agreement
will be in writing and will be delivered personally or sent by pre-paid
first class post (or air mail if overseas) or by fax to the recipient's
address set out in this Agreement or to any other address which the
recipient has notified in writing to the sender received not less than 7
Business Days before the notice was despatched.
13.2 A notice is deemed given:
13.2.1 if delivered personally, upon delivery at the address provided
for in this clause; or
13.2.2 if sent by prepaid first class post, on the second Business Day
after posting it; or
13.2.3 if sent by overnight courier, on the second Business Day after
posting it; or
13.2.4 if sent by fax, on completion of its confirmed transmission
provided that, if it is delivered by hand or sent by fax on a day which
is not a Business Day or after 4.00 pm on a Business Day, it will instead
be deemed to have been given or made on the next Business Day.
13.3 The provisions of this clause will not apply, in the case of service of
court documents, to the extent that such provisions are inconsistent with
the Civil Procedure Rules.
14. ASSIGNMENT
14.1 The Purchaser may assign the benefit of, and any of its rights under,
this Agreement:
14.1.1 freely to any company which at the relevant time is:
14.1.1.1 a holding company of the Purchaser; or
14.1.1.2 a subsidiary or subsidiary undertaking of the
Purchaser; or
14.1.1.3 a subsidiary or subsidiary undertaking (other than the
Purchaser itself) of any such holding company,
(each a "Permitted Transferee" for the purposes of this clause
14.1) the expressions "holding company", "subsidiary" and
"subsidiary undertaking" having the meanings given to them by the
CA 1985 PROVIDED THAT:
14.1.1.4 following any such assignment the Purchaser shall give
written notice thereof to the Vendor; and
14.1.1.5 if the relevant transferee shall thereafter cease to be
a Permitted Transferee it shall immediately re-assign
the relevant benefit and rights to the Purchaser or to
a Permitted Transferee; and
15
14.1.2 to any other person provided that the prior written consent of
the Vendor or the Guarantor has been obtained to such assignment.
14.2 For the avoidance of doubt, the Vendor and the Guarantor may not assign
the burden of, or any of their obligations under, this Agreement.
14.3 This Agreement will be binding and enure for the benefit of and permitted
assigns and successors in title of each of the parties and references to
the parties will be construed accordingly.
15. GENERAL
15.1 Unless otherwise provided, any outstanding obligation contained in this
Agreement will remain in force notwithstanding Completion.
15.2 Each party will do all acts and things and execute all documents as any
other party reasonably considers necessary to give full effect to the terms
of this Agreement.
15.3 Failure or delay by any party in exercising any right or remedy under this
Agreement will not in any circumstances operate as a waiver of it, nor will
any single or partial exercise of any right or remedy in any circumstances
preclude any other or further exercise of it or the exercise of any other
right or remedy.
15.4 Any waiver of any breach of, or any default under, any of the terms of this
Agreement will not be deemed a waiver of any subsequent breach or default
and will in no way affect the other terms of this Agreement.
15.5 The rights and remedies expressly provided for by this Agreement will not
exclude any rights or remedies provided by law.
15.6 The parties to this Agreement do not intend that any of its terms will be
enforceable by virtue of the Contracts (Rights of Third Parties) Xxx 0000
by any person not a party to it.
15.7 No variation of this Agreement will be valid unless it is in writing and
signed by or on behalf of each party to this Agreement.
15.8 Except as required by law, all payments by the Vendor and the Guarantor
pursuant to this Agreement will be made free and clear of all deductions
and withholdings whether in respect of Taxation (as defined in Schedule 4)
or otherwise. If any deduction or withholding is required by law to be made
from any payment by the Vendor or the Guarantor pursuant to this Agreement
which is not governed by the provisions of Schedule 4 or if (ignoring any
available relief or allowance) the Purchaser or any Group Member is subject
to Taxation in respect of any such payment which is not governed by the
provisions of Schedule 4 then the Vendor or, where applicable, the
Guarantor will pay to the Purchaser or the Relevant Group Member such
additional amount as is necessary to ensure that the net amount received
and retained by them (after taking account of such deduction or withholding
or Taxation) is equal to the amount which they would have received and
retained had the payment in question not been subject to the deduction or
withholding or Taxation.
16
15.9 The Purchaser undertakes and covenants with the Vendor that it will procure
that the stock transfer form to be executed by the Vendor in relation to
the transfer of the Shares shall be stamped with the appropriate duty
within the period of 30 days following Completion and that it will procure
that the registers of members and transfers are amended appropriately
following such stamping being effected.
16. GOVERNING LAW AND JURISDICTION
16.1 This Agreement will be governed by and construed in accordance with
English law.
16.2 The parties agree that any dispute which arises out of or in connection
with this Agreement shall be subject to the exclusive jurisdiction of the
courts of England and Wales or Delaware, USA only, the choice between these
two jurisdictions being at the discretion of the party bringing such
proceedings and the other party agrees to raise no challenge or objection
in relation to the jurisdiction chosen by the party bringing such
proceedings.
17. COUNTERPARTS
This Agreement may be executed in any number of counterparts each of which
when executed and delivered will be an original, but all the counterparts
will together constitute one and the same agreement.
18. PENSION INDEMNITY
The Vendor undertakes to the Purchaser that it will indemnify and keep
indemnified on a continuing basis the Purchaser and the Purchaser as
trustee for the Group against any contributions, claims, demands,
penalties, liabilities, proceedings, costs, damages, losses and expenses
(including all legal, actuarial and other professional fees and VAT and
other taxes thereon) incurred or suffered by the Purchaser or any member of
the Group in respect of or as a result of the R T Masts Limited Pension
Scheme (including for the avoidance of doubt but without limitation any
contributions, claims, demands, penalties, liabilities, proceedings, costs,
damages, losses and expenses which relate to the winding-up of the R T
Masts Limited Pension Scheme PROVIDED THAT:
18.1 the Vendor shall have no liability in respect of any claim under the
indemnity pursuant to this clause 18 unless:
18.1.1 notice in writing of such claim is given by or on behalf of the
Purchaser to the Vendor stating in reasonable detail the nature of
the claim and together with, where practicable, reasonable support
in documentary evidence on or prior to the date which is 4 years
after the date of this Agreement; and
18.1.2 the amount of the liability in respect of such claim when
aggregated with the amount of the liability in respect of all other
such claims exceeds (Pounds)17,500 in which event the Vendor will
be liable for the whole amount of such claim and not merely the
excess;
18.2 the aggregate liability of the Vendor under this clause 18 shall be limited
in accordance with clause 6.2 above;
17
18.3 the Vendor shall not be liable in relation to any such claim which would
not have arisen but for a voluntary act, omission or transaction carried
out outside the ordinary course of business of the Group after the date
hereof by any Group Member (otherwise than pursuant to a legally binding
commitment of any Group Member created on or before the date hereof) in
circumstances where the Purchaser ought reasonably to have been aware that
such matters would give rise to such a claim and other than in order to
comply with any law.
19. TELESYS INDEMNITY
19.1 The Vendor undertakes to the Purchaser that it will indemnify and keep
indemnified on a continuing basis the Purchaser and the Purchaser as
trustee for the Group against any claims, demands, liabilities,
proceedings, costs, damages, losses and expenses (including all legal and
other professional fees and VAT and other taxes thereon) incurred or
suffered by the Purchaser or any Group Member as a result of any failure to
effectively and validly transfer with effect from 31 December 1998 from the
Vendor to the Company full legal and beneficial ownership of the Sale
Assets as defined in the sale and purchase documentation attached to the
Disclosure Letter at reference 26 in the Disclosed Documents (as defined in
the Disclosure Letter) pursuant to the terms of such sale and purchase
documentation, and further the Vendor and the Guarantor each hereby
undertake that, in the event that such assets have not been so transferred,
they will, upon request by the Purchaser, do all acts and things and
execute such documents as the Purchaser may reasonably consider necessary
to give effect to the transfer of assets referred to above;
19.2 the aggregate liability of the Vendor under this clause 19 shall be
limited in accordance with clause 6.2 above
20. ENTIRE AGREEMENT
This Agreement and any other documents to be entered into between the
Vendor and the Purchaser pursuant to this Agreement set forth the entire
agreement and understanding between the parties or any of them in
connection with the sale and purchase described herein.
21. MANAGEMENT ACCOUNTS
21.1 By the tenth day of the month following Completion the Purchaser shall
procure that the Company shall prepare and deliver to the Vendor management
accounts in relation to the Company covering the period from 1 January 2001
to the date of Completion and prepared in a manner consistent with that
adopted in respect of the Management Accounts PROVIDED THAT such management
accounts shall be provided strictly on the basis that neither the Company
nor the Purchaser (nor any of their respective officers, directors,
employees, advisers or agents) shall have any liability whatsoever to the
Vendor or any Associated Company in relation to such management accounts,
and provided further that the Vendor and/or any relevant Associated Company
shall provide the Company and/or the Purchaser with such information and
assistance as is reasonably required in the preparation and provision of
such management accounts.
21.2 In connection with this clause 21, the Purchaser shall permit Xxxx Xxxxxxx
and Xxxxxx Xxxx to prepare the aforementioned management accounts and shall
also make them available to answer such reasonable
18
questions as the Vendor may raise and to provide such assistance to the
Vendor as the Vendor may reasonably require in relation to the due
completion of the Vendor's own financial statements and reports in the
context of such management accounts.
22. LAND CERTIFICATE
22.1 It being acknowledged that the Company has filed a statutory declaration in
the form disclosed to the Purchaser at HM Land Registry requesting a
replacement land certificate under Title Number NN92526 the Vendor hereby
agrees to provide such assistance to the Purchaser as the Purchaser may
reasonably require in relation to the pursuit of the relevant application
by the Company.
22.2 The Vendor will indemnify the Purchaser against any loss the Purchaser may
suffer as a result of the Vendor's failure to produce the relevant original
land certificate at Completion.
AS WITNESS the hands of the parties or their duly authorised representatives on
the date first stated above.
19
SCHEDULE 1
The Group
Part 1: Details of the Company
Name of Company : R.T. Masts Limited
Registered number : 1981078
Registered office : 3 and 0 Xxxxxx Xxxxx, Xxxx Farm Industrial Estate,
Xxxxxxxxxxxxxx, Xxxxxxxxxxxxxxxx, XX0 0XX
Date of incorporation : 22 January 1986
Authorised share capital : (Pounds)160,625 divided into 160,625 ordinary shares of
(Pounds)1 each
Issued share capital : (Pounds)160,625 divided into 160,625 ordinary shares of
(Pounds)1 each
Registered Shareholders : Name and address Number and class of shares
held
P-Com Network Services Limited 160,625 ordinary shares of
0-0 Xxxxxx Xxxxx (Xxxxxx)0 each
Xxxx Xxxx Xxxxxxxxxx Xxxxxx
Xxxxxxxxxxxxxx
Xxxxxxxxxxxxxxxx
XX0 0XX
Directors' full names : Xxxx Xxxxxx Xxxxxxx and Xxxxxx Xxxxxx Xxxxxxx
Secretary's full name : Xxxxxxxxxxx Xxxx Grew and Graeme Xxxxxx Xxxx
Accounting reference date : 31 December
20
Part 2: Details of other Group Members
Name of Group Member : R.T. Masts (Property) Limited
Registered number : 606471
Registered office : 3 and 0 Xxxxxx Xxxxx, Xxxx Xxxx
Xxxxxxxxxx Xxxxxx, Xxxxxxxxxxxxxx,
Xxxxxxxxxxxxxxxx XX0 0XX
Date of incorporation : 17 June 1958
Authorised share capital : (Pounds)16,000 divided into 16,000
ordinary shares of (Pounds)1.00 each
Issued share capital : (Pounds)15,003 divided into 15,003
ordinary shares of (Pounds)1.00 each
Beneficially owned by the Company : the whole of the issued share capital
Directors' full names : Xxxx Xxxxxx Xxxxxxx and Xxxxxx Xxxxxx
Secretary's full name : Xxxxxxxxxxx Xxxx Grew and Xxxxxx Xxxx
Accounting reference data : 31 December
Name of Group Member : Skymasts Limited
Registered number : 2184662
Registered office : 3 and 0 Xxxxxx Xxxxx, Xxxx Xxxx
Xxxxxxxxxx Xxxxxx, Xxxxxxxxxxxxxx,
Xxxxxxxxxxxxxxxx XX0 0XX
Date of incorporation : 28 October 1987
Authorised share capital : (Pounds)100 divided into 100 ordinary
shares of (Pounds)1.00 each
Issued share capital : (Pounds)2 divided into 2 ordinary
shares of (Pounds)1.00 each
Beneficially owned by the Company : the whole of the issued share capital
Directors' full names : Xxxx Xxxxxx Xxxxxxx and Xxxxxx Xxxxxx
Xxxxxxx
Secretary's full name : Xxxxxxxxxxx Xxxx Grew and Xxxxxx Xxxx
21
Accounting reference date : 31 December
22
SCHEDULE 2
The Property
Part 1: Freehold
Description Title Holder Title number and quality of Use
title if reg'd
None
23
Part 2: Leasehold
Description Title holder Title number and quality Date of lease and parties to it Term and
of title if reg'd current rent
Xxxx 0 Xxxxxx Xxxxx, X X Masts Limited NN87280 Lease dated 25 March 1986 between
Park Farm Industrial (Title Absolute) A M Sturdy (1) and BV Wholesale
Estate, Wellingborough Limited (2)
Xxxx 0 Xxxxxx Xxxxx, X X Masts Limited NN142728 Lease dated 19 February 1991
Park Farm Industrial (Title Absolute) between Xxxxxxxx Xxxxxxxx (1) and
Estate, Wellingborough Xxxxx Xxxxxxxxx and Others (2)
Xxxx 0 Xxxxxx Xxxxx, X X Masts Limited NN92526 Lease dated 1 September 1986
Park Farm Industrial (Title Absolute) between X X Xxxxxxxx (1) and R T
Estate, Wellingborough Masts Limited (2)
Description Use
Xxxx 0 Xxxxxx Xxxxx, Xxxx: 25 years from 00 Xxxxx 0000
Xxxx Xxxx Xxxxxxxxxx
Xxxxxx, Xxxxxxxxxxxxxx Use: Any use falling within Use Class
II, III or X of the Town & Country
Planning (Use Classes) Order 1972
Rent: (Pounds)50,000 pa
Xxxx 0 Xxxxxx Xxxxx, Xxxx: 250 years from 00 Xxxxxx 0000
Xxxx Xxxx Xxxxxxxxxx
Xxxxxx, Xxxxxxxxxxxxxx Use: Any use falling within use Class
II, III or X of the Town and Country
Planning (Use Classes) Order 1972
Rent: Peppercorn
Xxxx 0 Xxxxxx Xxxxx, Xxxx: 25 years from 1 September 0000
Xxxx Xxxx Xxxxxxxxxx
Xxxxxx, Xxxxxxxxxxxxxx Use: Any use falling within use Class
II, III or X of the Town and Country
Planning (Use Classes) Order 1972
Rent: (Pounds)27,500 pa
24
SCHEDULE 3
Non-Taxation Warranties
1. Interpretation
In this Schedule 3 the following expressions have the following meanings:
"Company" notwithstanding the definition contained
in clause 1, each company individually
details of which are set out in Schedule
1 as if the provisions of this Schedule
3 were set out in full in respect of
each such company provided that where
used other than in this Schedule 3 and
Schedule 4 "Company" shall have the
meaning given in clause 1
2. Schedule 1: Capital and Capacity
2.1 The information contained in Schedule 1 is complete and accurate in all
respects.
2.2 The Shares are in issue fully paid and are beneficially owned and
registered as set out in Schedule 1 free from any third party right.
2.3 No Contract has been entered into which requires or may require the Company
to allot or issue any share or loan capital.
2.4 The Company has no interest in the share capital of any body corporate.
2.5 Each of the Vendor and the Guarantor has full power to enter into and
perform this Agreement and this Agreement constitutes obligations binding
on each of them in accordance with its terms.
2.6 Each of the Group Members details of which are set out in Part 2 of
Schedule 1 are, and have at all times in the last 6 years been, dormant
within the meaning of section 250(3) of the CA 1985.
3. The Disclosure Letter
This provision is intentionally left blank.
4. Accounts, records and Management Accounts
4.1 The Accounts:
4.1.1 comply with the requirements of the Act and have been prepared in
accordance with all applicable accounting standards (as that term is
defined in section 256 of the Act) and (to the
25
extent that none are applicable) with accounting principles and
practices generally accepted in the United Kingdom;
4.1.2 have been prepared on bases and principles which are consistent with
those used in the preparation of the audited statutory accounts of
the Company for the three financial years immediately preceding that
which ended on the Accounting Date;
4.1.3 show a true and fair view of the assets and liabilities (including
contingent, unquantified and disputed liabilities) of the Company
and of the state of affairs of the Company as at the Accounting Date
and of the results of the Company for the financial year ended on
that date; and
4.1.4 are not affected (except as disclosed in the Accounts) by any
extraordinary or exceptional item.
4.2 The accounting records of the Company are up to date and contain complete
and accurate details of all transactions of the Company and comply with the
provisions of sections 221 and 222 of the Act.
4.3 Except as fairly disclosed in the Disclosure Letter, the Management
Accounts, copies of which are attached to the Disclosure Letter, have been
prepared on bases consistent with those used in the preparation of the
Accounts.
4.4 Except as fairly disclosed in the Disclosure Letter, the Management
Accounts:
4.4.1 are not misleading in any material respect;
4.4.2 neither materially over-state the value of any of the assets nor
materially under-state any of the liabilities of the Company as at
the dates to which they were drawn up; and
4.4.3 do not materially over-state the profits or turnover of the Company
in respect of the periods to which they relate.
ASSETS
5. Unencumbered title
Each asset reflected in the Accounts (save for the Property, and current
assets disposed of by the Company in the ordinary course of its business
since the Accounting Date) and each asset treated as an asset of the
Company and/or used by the Company at the date of this Agreement:
5.1 is in the legal and beneficial ownership of the Company, free from any
third party right and from any Contract to grant the same; and
5.2 is situated at the Property.
26
6. Debtors
The Company has not factored or discounted any debt or agreed to do so.
All of the debts which are reflected in the Accounts as owing to the
Company (apart from bad and doubtful debts to the extent to which they
have been provided for in the Accounts or the Management Accounts ) or
which have subsequently been recorded in the books of the Company have
realised or will realise in the normal course of collection and within six
months of Completion their full value as included in the Accounts or in
the books of the Company, and no such debt nor any part of it has been
outstanding for more than four months from its due date for payment. For
the avoidance of doubt the debit entries in the books of the Company in
relation to Orange shall be deemed to be "debt" for the purposes of this
paragraph 6.
7. Stock
The Stock now held by the Company and not written off in the Accounts:
7.1 is not obsolete or likely to realise less than its book value; and
7.2 is fit for its intended purpose and of satisfactory quality and accords
with any other representation or contractual term, express or implied,
which has been given, or which would in the normal course of its business
be given, by the Company in respect of it.
8. Plant and Equipment
The Plant and Equipment:
8.1 is in a good state of repair and condition and satisfactory working order
and have been regularly maintained to a reasonable standard and in
accordance with any safety regulations usually observed in relation to
them;
8.2 is capable and so far as the Vendor is aware will (subject to fair wear
and tear) be capable throughout the periods of time during which they will
be written down to a nil value (at the rates adopted in the Accounts) of
meeting the needs for which they were designed or acquired; and
8.3 is accurately recorded in the fixed asset/plant register.
9. Property
9.1 The particulars of the Property shown in Schedule 2 (including in the case
of registered land the class of title and title number) are true, complete
and correct. The use of the Property for the purpose stated in Schedule 2
corresponds to the use to which it is in fact put or (where the Property
is not presently in use) to the use to which it was last in fact put.
9.2 The Company has a good and marketable title to the Property for the estate
or interest stated in Schedule 2, free from any defects, and has in its
possession, or under its control, all duly stamped deeds and documents
which are necessary to prove title to the Property.
27
9.3 The Company is not in occupation of or entitled to any estate or interest
in any land or premises save the Property.
9.4 Save as disclosed the Company has no knowledge of any of the following
matters affecting the Property:
9.4.1 any easement, reservation, covenant, restriction, agreement,
licence, mortgage, charge, encumbrance, or third party right;
9.4.2 any notice, order, proposal, dispute or complaint relating to it or
its present use under any legislation, agreement, covenant,
condition, licence or consent; or
9.4.3 material outgoings (other than yearly rent and service charges,
uniform business rates, water charges and other standard payments to
the relevant water company, management fees to the management
company for the Property including, without limitation, insurance
premiums), whether of a periodically recurring nature or otherwise
and whether payable by the owner or occupier of the Property.
9.5 The Company has not received notification of any breach of any obligations,
restrictions, conditions and covenants (including any imposed by or
pursuant to any lease) relating to the Property or its present use under
any legislation, agreement, covenant, condition, licence or consent by any
competent authority or other person and the Vendor is not aware of any
circumstance which might give rise to such a breach.
9.6 So far as the Company is aware (but not having carried out any survey or
tests) the Property is in a good and substantial state of repair and
condition and fit for the purposes for which it is presently used.
9.7 So far as the Company is aware (but no specific enquiries or searches
having been made) the use of the Property for the purpose stated in
Schedule 2 is the permitted user under the provisions of all relevant
legislation (including, without limitation, legislation relating to town
and country planning, health and safety, and environmental protection) and
regulations made under such legislation and is in accordance with the
requirements of the local planning and all other competent authorities and
all restrictions, conditions and covenants imposed by or pursuant to such
legislation have been observed and performed and no agreement has been
entered into under section 106 Town and Country Planning Act 1990 (or any
similar statutory provision) in respect of the Property.
9.8 The replies given by the Vendors' Solicitors to the Purchaser's Solicitors'
written enquiries concerning the Property are believed to be true and
accurate in all respects.
10. Intellectual Property Rights
10.1 All Intellectual Property Rights used in, or held in relation to, the
Company's business (save for Intellectual Property Rights licensed to the
Company under any Contract) are legally and beneficially owned by the
Company free from any Encumbrance.
10.2 All Intellectual Property Rights used in, or held in relation to, the
Company's business which are registered or the subject of applications for
registration and all commercially significant unregistered
28
Intellectual Property Rights are listed and described in the Disclosure
Letter and such rights are all that are necessary or desirable for the
Company to operate its business as it is currently operated.
10.3 The Intellectual Property Rights owned by the Company are (and nothing has
been done or omitted to be done whereby any of them might cease to be)
valid, subsisting and enforceable. In respect of such Intellectual
Property Rights which are registered, all renewal fees have been duly
paid, all steps required to have been taken by the Company for their
maintenance and protection have been taken and so far as the Vendor is
aware there are no grounds on which any person is or will be able to seek
cancellation, rectification or any other modification of any registration.
10.4 There are, and have been, no proceedings, actions or claims and so far as
the Vendor is aware none are pending or threatened or will arise,
impugning the title, validity or enforceability of the Company's
Intellectual Property Rights or claiming any right or interest in such
Intellectual Property Rights.
10.5 There is, and has been, no infringement of the Company's Intellectual
Property Rights and so far as the Vendor is aware none is pending or
threatened.
10.6 The past and present activities of the Company (including the processes,
methods, Software, goods and services used or dealt in by it, and the
services supplied by it):
10.6.1 with respect to Intellectual Property Rights are not, and have not
been, subject to the licence, consent or permission of, or payment
to, any other party;
10.6.2 do not infringe, have not infringed and so far as the Vendor is
aware will not result in any claim in relation to, any
Intellectual Property Rights of any third party; and
10.6.3 have not, and so far as the Vendor is aware will not, result in a
claim in respect of Intellectual Property Rights against the
Company including any liability to any compensation under sections
40 and 41 of the Patents Xxx 0000.
10.7 Save in the ordinary course of business neither the Vendor nor the Company
has disclosed, nor is obliged to disclose, any know how to any third
party, other than those who are bound by obligations of confidence. Save
for officers or employees of the Company, no third party has had, other
than in the ordinary course of business, access to any of the know how
relating to or held by the Company. The Company is not restricted in its
ability to use, or to disclose to any third party, any of its know how.
10.8 So far as the Vendor is aware there are no circumstances which would
render any current application for registration of the Company's
Intellectual Property Rights unacceptable to the relevant registry or
other authority or which would prevent any such application from
proceeding to grant and registration.
10.9 Except in relation to Software (in relation to which paragraph 11.1 of
this Schedule 3 below applies) complete and accurate copies of all
licences, sub-licences and other agreements whereby the Company is
licensed or otherwise authorised to use the Intellectual Property Rights
of a third party or whereby the Company licenses or otherwise authorises a
third party to use Intellectual Property Rights are attached to the
Disclosure Letter. All of them are in full force and effect, no notice
having been given to terminate
29
them, and the obligations of the Company in respect of them and, so far
as the Vendor is aware, the obligations of third parties in respect of
them have been fully complied with and no disputes have arisen in respect
of them.
10.10 The Company has in its possession all necessary drawings, artwork,
specifications, prototypes and other documents and things necessary to
establish the Company's ownership of its Intellectual Property Rights and
to prove that they are original or novel or both.
10.11 The Disclosure Letter contains a full list of domain names and other
addresses in connection with the Internet or Worldwide Web which are held
by or are or have been used in respect of the Company.
11. Computer Systems
11.1 Details of all Software used or held by the Company in which the
Intellectual Property Rights are owned by a third party are set out in
the Disclosure Letter. Complete and accurate copies of all licences in
respect of such Software as was specifically developed for the Company
are attached to the Disclosure Letter. So far as the Vendor is aware, the
licences of such Software are complied with in all respects in the
operation of the business of the Company.
11.2 Complete and accurate copies of all maintenance agreements in place in
respect of the Computer Systems which have been specifically developed
for the Company are attached to the Disclosure Letter. So far as the
Vendor is aware, the maintenance providers concerned have always
fulfilled their obligations under those agreements in accordance with
their terms.
11.3 Assuming that the Computer Systems which have been specifically developed
for the Company were to carry on functioning in the manner in which they
are currently functioning, then they, together with all other Computer
Systems currently utilised by the Company, would be sufficient to enable
the business of the Company to be managed in the same manner in which it
is currently managed.
EMPLOYEES
12. Remuneration and employees
12.1 Full particulars of the identities, dates of commencement of employment
(or appointment to office), length of notice period, dates of birth,
terms and conditions of employment and remuneration (including any bonus,
commission, profit sharing, share and other incentive schemes, and
collective or workforce agreements) of all the employees and officers of
the Company are accurately set out in the Disclosure Letter and copies of
all their written service agreements or contracts of employment or
particulars of employment statements are attached to the Disclosure
Letter.
12.2 Save for accrued holiday pay in respect of the Company's current holiday
year there are no amounts owing to any present or former officers,
workers or employees of the Company, other than remuneration accrued (but
not yet due for payment) in respect of the calendar month in which this
Agreement is executed or for reimbursement of business expenses incurred
during such month.
30
12.3 All Contracts of employment between the Company and its directors and
employees are terminable by the Company by giving at least the
applicable minimum period of notice specified in section 86 Employment
Rights Xxx 0000, and the Company is not contractually obliged to make
any payment as a consequence of the termination of any such Contract.
12.4 Other than as fairly disclosed in the Disclosure Letter, the Company has
not:
12.4.1 with respect to salaried employees earning at least
(Pounds)30,000 (excluding overtime payments) per annum, offered
to employ or engage any person since the Accounting Date or
where such employment or engagement will take effect after the
date of this Agreement;
12.4.2 with respect to salaried employees earning at least
(Pounds)30,000 (excluding overtime payments) per annum, given
or received notice to terminate the employment or engagement of
any person since the Accounting Date or where such notice has
not yet expired;
12.4.3 with respect to any employee of the Company, offered to employ
or engage any person since 30 November 2000 or where such
employment or engagement will take effect after the date of
this Agreement;
12.4.4 with respect to any employee of the Company, given notice to
terminate the employment or engagement of any person since 30
November 2000 or where such notice has not yet expired; or
12.4.5 with respect to any employee of the Company, made, agreed or
proposed any material change of terms and conditions of
employment or engagement other than as disclosed pursuant to
paragraph 12.1 above.
12.5 There is no person previously employed or engaged by the Company who now
has or may have a statutory or contractual right to return to work or to
be re-instated or re-engaged by the Company.
12.6 There are no employees who have been absent due to sickness leave for
more than 3 months in the 12 month period ending on the date of this
Agreement.
12.7 The Company has not recognised, and has not done any act which might be
construed as recognition of, a trade union and the Company is not party
to any agreement with any trade union or organisation of employees or
workers nor so far as the Vendor is aware are any steps being taken by
employees, workers or other representatives to ensure trade union
recognition.
12.8 The Company is not involved, and has not during the 12 months prior to
the date of this Agreement been involved, in any strike, lock-out,
industrial or trade dispute or any negotiations with any trade union or
body of employees or workers.
12.9 There are no part-time, job share, flexitime or early retirement schemes
applicable to any employees of the Company.
31
12.10 The Company does not operate or intend to operate and has not operated
any short time working scheme or arrangement or any redundancy or
redeployment scheme or arrangement, whether formal or informal,
contractual or non-contractual, which provides for payments greater than
those required by statute or for notice periods greater than those set
out in contracts of employment or engagement.
12.11 The Company does not use the service of agency or other self-employed
persons, contracted labour or agents.
12.12 The Company has, in relation to all present and former employees and
workers, complied in all material respects with all statutes,
regulations, orders and codes of conduct relating to employment and
relations with employees and trade unions and has maintained adequate and
suitable records, whether or not required to do so by law, regarding the
service of each of its employees and has complied with all agreements for
the time being having effect as regards such relations or the conditions
of service of its employees (whether collectively or individually).
13. Pensions
13.1 With the exception of the Pension Schemes, the Group Personal Pension
Scheme and the Life Assurance Scheme there are no:
13.1.1 agreements or arrangements for the provision of any relevant
benefits (as defined in section 612(1) ICTA) or similar benefit
(including any pension, annuity, lump sum, gratuity or other like
benefit) to be given on retirement, or in anticipation of
retirement or after retirement in connection with past service,
or to be given on or in anticipation of or in connection with any
change in the nature of the service of the person in question or
on death or disability to which any member of the Group
contributes or is a participating employer; or
13.1.2 informal or ex-gratia pension arrangements, customs or schemes
involving any member of the Group for the provision of such
benefits, for any Employee or officer or former employee or
officer of any member of the Group or for any dependants of any
such person.
13.2 No proposal has been announced by any member of the Group to alter the
Group Personal Pension Scheme, the Life Assurance Scheme or the PHI
Scheme nor has any proposal been announced by any member of the Group to
establish any retirement death or disability agreement or arrangement of
the nature referred to in paragraph 13.1 which proposal remains
outstanding and has not been implemented (in whole or in part).
13.3 All benefits payable under the Life Assurance Scheme or the PHI Scheme on
the death of any person or during periods of sickness or disability are
as at Completion fully insured under a policy effected with an insurance
company and such insurance cover is underwritten by it at its normal
rates and on its normal terms for a person in good health. So far as the
Vendor is aware, there is no reason why the relevant policies cannot be
continued on the same terms following Completion.
32
13.4 As at Completion all premiums by way of insurance which are payable in
respect of the Life Assurance Scheme or the PHI Scheme by any member of
the Group or by the trustees (where relevant) or other administrators in
respect of those schemes have been duly paid.
13.5 Copies of the documents containing the provisions currently governing the
Pension Schemes, the Group Personal Pension Scheme, the Life Assurance
Scheme and the PHI Scheme and material particulars of the benefits and
entitlements under those schemes have been given to the Purchaser and are
attached to the Disclosure Letter.
13.6 Except as set out in the Disclosure Letter, all actuarial, consultancy,
legal and other fees charges or expenses in relation to each of the
Pension Schemes whether payable by any member of the Group or its
trustees, have been paid and no services have been rendered in respect of
which an account or other invoice has not been rendered.
13.7 Each of the Pension Schemes and the Life Assurance Scheme is an exempt
approved scheme within the meaning of section 592(1) ICTA and, so far as
the Vendor is aware, there is no reason why such approval could be
withdrawn.
13.8 So far as the Vendor is aware and except as otherwise set out in the
Disclosure Letter, each of the Pension Schemes and the Life Assurance
Scheme complies (and has at all times complied) with and has been
administered in all material respects in accordance with all legislation,
regulation and Inland Revenue practice and requirements relating to
exempt approved pension schemes and subject thereto in all material
respects in accordance with its governing trusts powers and provisions.
13.9 There are no actions, suits or claims (other than routine claims for
benefits) outstanding, pending or threatened against the trustees (where
relevant) or administrators of any of the Pension Schemes, the Group
Personal Pension Scheme, the Life Assurance Scheme or the PHI Scheme or
against the Vendor or any member of the Group in respect of any act,
event, omission or other matter arising in connection with those schemes
and the Vendor is not aware of any reason why any such action, suit or
claim may arise.
13.10 As at Completion, there are no contributions due to the Group Personal
Pension Scheme, whether payable by any member of the Group or the
employees or officers of the Group (and whether payable in accordance
with the terms of the Group Personal Pension Scheme or the terms of any
contractual commitment entered into between any member of the Group and
an employee or officer of the Group which have fallen due but are
unpaid).
13.11 The members' benefits payable under the Group Personal Pension Scheme
whether immediate, prospective or contingent are solely benefits which
can be provided by the funds available for, and allocated to, each member
under the Group Personal Pension Scheme.
13.12 No employee or officer or former employee or officer (whether living or
deceased) of any member of the Group has been excluded or prevented from
participating (or been granted restricted participation) in any of the
Pension Schemes, the Group Personal Pension Scheme, the Life Assurance
Scheme or the PHI Scheme or any other pension scheme or arrangement by
any member of the Group or by any former employer (where liabilities have
been transferred to the Group) on the grounds of part-time employment,
33
marital status or otherwise where such exclusion, prevention or
restriction constitutes discrimination in breach of the Treaty of Rome or
any European Directive.
13.13 Except as otherwise set out in the Disclosure Letter, the Pension Schemes
have been operated at all times from and including 17 May 1990 in
accordance with the provisions of the EC Treaty relating to equal
treatment and all Acts of Parliament, Directives and other relevant
legislation including (without prejudice to the generality of the
foregoing) the provision of sex equal benefits accruing after 16 May
1990.
CONTRACTS
14. Insurance
14.1 All assets of the Company of an insurable nature are, and have at all
material times been, insured in amounts equal to their full replacement
or reinstatement value against fire and other risks normally insured
against by persons carrying on the same classes of business as the
Company including employer's liability, public liability and product
liability.
14.2 All premiums due in relation to the Company's insurances have been paid,
and nothing has been done or omitted to be done which would make any
policy of insurance of the Company void or voidable or which is likely to
result in an increase in premium or which would release any insurer from
any of its obligations under any policy of insurance of the Company.
14.3 There is no insurance claim pending or outstanding and, as far as the
Vendors are aware, there are no circumstances likely to give rise to any
such claim.
14.4 Reasonable particulars of all the Company's insurances are given in the
Disclosure Letter.
15. Financing and working capital
15.1 Full and accurate details of any and all overdrafts, loans or other
financial facilities outstanding or available to the Company are
contained in the Disclosure Letter; and no person who provides any such
facility has given any indication that it may be withdrawn or its terms
altered.
15.2 The details contained in the Disclosure Letter of the credit or debit
balances on all the bank or deposit accounts of the Company were correct
at the date stated in the Disclosure Letter and since such date there
have been no payments out of any such accounts except for payments in the
ordinary course of business.
15.3 The Company has, since the Accounting Date, paid its creditors materially
in accordance with their respective credit terms.
15.4 Having regard to existing bank and other facilities the Company has
sufficient working capital to enable it to perform in accordance with
their terms all Contracts which have been entered into by it.
15.5 No person has given any guarantee of or security for any overdraft, loan,
other financial facility granted to the Company or other liability of the
Company.
34
15.6 The Company has not applied for or received any grant, subsidy or
financial assistance from any government department or other body.
16. Material Contracts
The Company is not, or has not been since the Accounting Date, a party
to, liable under or subject to any Contract which:
16.1 involves agency, distributorship, franchising, marketing rights,
information sharing, manufacturing rights, consultancy or servicing;
16.2 involves partnership, joint venture, consortium, joint development,
shareholders or similar arrangements;
16.3 involves hire purchase, conditional sale, credit sale, leasing, hiring or
similar arrangements;
16.4 involves or is likely to involve any capital expenditure by the Company
or involves or is likely to involve an aggregate expenditure or receipt
in excess of (Pounds)50,000 by the Company;
16.5 is incapable of complete performance in accordance with its terms within
6 months after the date on which it was entered into;
16.6 cannot readily be fulfilled or performed by the Company;
16.7 the Vendor believes may result in a loss to the Company;
16.8 involves or is likely to involve any obligation, restriction, expenditure
or receipt which the Vendor believes is of an unusual or onerous nature;
16.9 is for the supply of goods by or to the Company on a sale or return
basis;
16.10 is for the supply of goods or services by or to the Company on terms
under which retrospective or future discounts, price reductions or other
financial incentives are given;
16.11 is for the supply of goods or services by the Company or is a contract
for the supply of goods or services to the Company which in either case
is material to the business of the Company which in either case is not on
the current standard terms and conditions on which the Company normally
contracts to buy or supply (as appropriate) goods or services, copies of
which are attached to the Disclosure Letter;
16.12 involves the forward purchase or sale of any currency, commodity,
precious metal or other asset;
16.13 involves delegation of any power under a power of attorney or
authorisation of any person other than its employees or officers (as
agent or otherwise) to bind or commit the Company to any obligation;
16.14 restricts the freedom of the Company to carry on its business in any part
of the world or to use or exploit any of its assets, in each case in such
manner as it may think fit;
35
16.15 involves conditions, warranties, indemnities or representations given in
connection with a sale of shares or an undertaking or fixed assets;
16.16 is a guarantee, indemnity, surety or letter of comfort in respect of the
obligations of a third party, under which any liability or contingent
liability is outstanding;
16.17 so far as the Vendor is aware includes a term which is not, or may not
be, binding on the Company or any other party in consequence of the
Unfair Terms in Consumer Contracts Regulations 1999; or
16.18 is not on arm's length terms or is in any way otherwise than in the
ordinary and proper course of the Company's business.
17. Other business matters
During the 12 months ended on the date of this Agreement there has been
no substantial change in the basis or terms on which any person is
prepared to do business with the Company (apart from normal price
changes), and no substantial customer or supplier of the Company has
ceased or substantially reduced its business with the Company, and no
indication has been received by the Company or any of the Vendors that
there will or may be any such change, cessation or reduction.
COMPLIANCE; DISPUTES
18. Company law matters and general compliance
18.1 Compliance has been made with all legal requirements in connection with
the formation of the Company and all issues and grants of shares or other
securities of the Company.
18.2 The copy of the memorandum and articles of association of the Company
enclosed with the Disclosure Letter is true and complete.
18.3 All returns, particulars, resolutions and other documents required to be
filed with or delivered to the Registrar of Companies by the Company have
been properly filed, and none has been so filed or delivered within 14
days of the date of this Agreement.
18.4 The statutory books (including all registers and minute books) of the
Company have been properly kept.
18.5 The Company has conducted its business in all material respects in
accordance with all applicable laws and regulations of the United Kingdom
and any relevant foreign country.
18.6 No agreement, practice or arrangement to which the Company is party is or
ought to be or ought to have been registered under, or infringes, any
competition, anti-restrictive trade practice or consumer protection
legislation applicable in the United Kingdom or elsewhere.
18.7 There is not in existence or, so far as the Vendor is aware, pending, any
investigation or enquiry by, or on behalf of, any governmental or other
body in respect of the affairs of the Company.
36
19. Litigation
19.1 Neither the Company nor any person for whose acts or defaults it may be
liable is involved (whether as plaintiff, defendant or any other party)
in any civil, criminal, tribunal or arbitration proceedings involving the
Company, and so far as the Vendor is aware there are no facts likely to
give rise to any such proceedings.
19.2 There is no unsatisfied judgment or unfulfilled order outstanding against
the Company and the Company is not party to any undertaking or assurance
given to a court, tribunal or any other person in connection with the
determination or settlement of any claim or proceedings.
20. Default
20.1 The Company has not sold, supplied or provided any service which did not,
does not or will not comply in all material respects with all applicable
laws, regulations or standards or which was when sold, supplied or
provided, defective or dangerous or not in accordance with any
representation or contractual term, express or implied, relating to it.
20.2 The Company is not in material breach ("material" for these purposes to
be deemed to include any breach in respect of which the relevant customer
brings a claim against the Company in respect thereof) of the customer
contracts included at documents 13 to 19 of the Disclosed Documents (as
defined in the Disclosure Letter) together with the sub-contract between
the Guarantor and the Company relating to the contract at Document 12 in
the Disclosed Documents, and is not in material breach of any other
Contract to which it is a party, and so far as the Vendor is aware no
other party to any such Contract is in breach of it.
21. Events since the accounting date
Since the Accounting Date:
21.1 there has been no reduction in the value of the net assets of the Company
determined in accordance with the same accounting policies as those
applied in the Accounts (and valuing no asset at a figure greater than
the value attributed to it in the Accounts or, in the case of any asset
acquired since the Accounting Date, greater than cost);
21.2 the Company has not acquired, or agreed to acquire, any single asset
having a value in excess of (Pounds)20,000 or assets having an aggregate
value in excess of (Pounds)50,000;
21.3 the Company has not disposed of, or agreed to dispose of, any asset other
than finished goods;
21.4 the trade and business of the Company has been carried on in the ordinary
and normal course;
21.5 there has been no adverse change in the financial or trading position or
prospects of the Company;
21.6 no dividend or other payment which is, or could be treated as, a
distribution for the purposes of Part VI ICTA or section 418 ICTA has
been declared, paid or made by the Company;
37
21.7 no resolution of the shareholders of the Company has been passed;
21.8 no management or similar charge has become payable or been paid by the
Company; and
21.9 no payment has been made to, or benefit conferred by the Company on, any
of the Vendors, save as specified in the Disclosure Letter.
22. Insolvency
22.1 No meeting has been convened at which a resolution will be proposed, no
petition has been presented, no order has been made and no resolution has
been passed for the winding-up of the Company or for the appointment of
any provisional liquidator.
22.2 No administrative receiver, receiver or manager has been appointed of the
whole or any part of the property, assets or undertaking of the Company.
22.3 No administration order has been made appointing an administrator in
respect of the Company and no petition has been presented for an
administration order in respect of the Company.
22.4 No voluntary arrangement has been proposed or approved under Part I
Insolvency Act 1986 and no compromise or arrangement has been proposed,
agreed to or sanctioned under section 425 Insolvency Act 1986 in respect
of the Company.
22.5 The Company has not stopped or suspended the payment of its debts or
received a written demand pursuant to section 123(1)(a) Insolvency Xxx
0000 and the Company is not insolvent or unable to pay its debts within
the meaning of section 123 Insolvency Xxx 0000.
22.6 No disqualification order has at any time been made pursuant to the
provisions of the Company Directors Disqualification Xxx 0000 against any
former or current officer of the Company.
22.7 So far as the Vendor is aware, there are no facts in existence which are
likely to lead to any of the events or circumstances referred to in this
paragraph.
23. Effects of the Agreement
23.1 The execution of this Agreement and the observance and performance of its
provisions will not:
23.1.1 result in a breach of any Contract, law, regulation, order,
judgement, injunction, undertaking, decree or similar imposition
to or by which the Company is party or bound, or entitle any
person to terminate or avoid any Contract to which the Company is
party, or have any material effect on any such Contract;
23.1.2 result in the loss or impairment of or any default under any
licence, authorisation or consent required by the Company for the
purposes of its business;
38
23.1.3 result in the creation, imposition, crystallisation or
enforcement of any encumbrance whatsoever on any of the assets
of the Company;
23.1.4 result in any present or future indebtedness of the Company
becoming due and payable, or capable of being declared due and
payable, prior to its stated maturity date or in any financial
facility of the Company being withdrawn; or
23.1.5 adversely affect the Company's relationships with customers,
suppliers and employees.
23.2 There is no Contract to which the Company is party which depends on the
continuation of the connection (as shareholder, officer or employee of
the Company) of any person with the Company who will cease to be a
shareholder, officer or employee of the Company at Completion.
24. Environmental/Health and Safety Matters
24.1 The Company does require my EHS Permits.
24.2 The Company and its officers, agents and employees comply and have at
all times compiled in all material respects with Ehs Law.
39
SCHEDULE 4
Taxation
Part 1 - Interpretation
1. Interpretation
In this Schedule 4:
1.1 the following expressions have the following meanings unless inconsistent
with the context:
"the Accounting Date" the same meaning as in clause 1
"ACT" advance corporation tax
"the Auditors" auditors for the time being of the Company
"the Balance Sheet" the audited balance sheet of the Company as
at the
"CAA" Capital Allowances Act 1990
"Claim" any notice, demand, assessment, letter or
other document issued, or action taken, by or
on behalf of any Taxation Authority from which
it appears to the Purchaser that the Company
is or may be subject to a Liability to
Taxation or other liability in respect of
which the Vendor is or may be liable under
paragraph 2
"Company" notwithstanding the definition contained in
clause 1, each company individually details of
which are set out in Schedule 1 as if the
provisions of this Schedule 4 were set out in
full in respect of each such company provided
that where used other than in this Schedule 4
and Schedule 3 "Company" shall have the
meaning given in Clause 1
"Dispute" any dispute, appeal, negotiations or other
proceedings in connection with a Claim
"Event" any event, fact or circumstance whatsoever
including but not limited to:
(a) any transaction, action or omission
(whether or not the Company is party to
it);
40
the Company is party to it);
(b) the earning, receipt or accrual for
any Taxation purpose of any income,
profits or gains;
(c) the incurring for any Taxation
purpose of any loss or expenditure;
(d) the declaration, payment or making
of any dividend or other
distribution;
(e) the sale and purchase of the Shares
pursuant to this Agreement; and
(f) Completion
"FA" Finance Act
"Group Relief" the meaning given to that expression by
section 402 ICTA
"ICTA" Income and Corporation Taxes Xxx 0000
"IHTA" Inheritance Tax Xxx 0000
"Liability to Taxation" (a) any liability of the Company to
make an actual payment of Taxation
(whether or not the Company is
primarily so liable and whether or
not the Company has any right of
recovery against any other person);
and
(b) the use by the Company (in whole or
in part) of any Purchaser's Relief
to reduce or eliminate any
liability of the Company to make an
actual payment of Taxation (whether
or not the Company is primarily so
liable and whether or not the
Company has any right of recovery
against any other person) in
respect of which the Vendor would
otherwise have been liable under
paragraph 2; and
(c) the loss by the Company (in whole
or in part) of any Purchaser's
Relief falling within paragraphs
(a) and (b) of the definition of
that term
41
"Purchaser's Relief" (a) any Relief which was treated
as an asset of the Company in
the Balance Sheet; and
(b) any Relief which was taken
into account in computing (and
so reducing or eliminating)
any provision for deferred tax
which appears in the Balance
Sheet or which would have
appeared in the Balance Sheet
but for the presumed
availability of such Relief;
and
(c) any Relief which arises wholly
or mainly as a result of any
Event in the ordinary course
of trading which has occurred
or occurs after the Accounting
Date
"Relief" (a) any relief, allowance,
exemption, set-off, deduction
or credit available from,
against or in relation to
Taxation or in the computation
for any Taxation purpose of
income, profits or gains; and
(b) any right to a repayment of
Taxation
"Repayment" the obtaining by the Company of a
repayment of Taxation from a
Taxation Authority where the Vendor
made a payment under this Part 2 of
Schedule 4 or for breach of any
Taxation Warranty which is the
subject of the repayment
"Saving" the reduction of elimination of any
liability of the Company or the
Purchaser or any member of the same
group of companies as the Purchaser
to make an actual payment of
Taxation in respect of which the
Vendor would not have been liable
under paragraph 2 or for breach of
any Taxation Warranty, by the use
of any Relief arising as a result
of a Liability to Taxation in
respect of which the Vendor has
made a payment under paragraph 2 or
for breach of any Taxation Warranty
"Taxation" (a) any tax, duty, impost or levy,
past or present, of the United
Kingdom or elsewhere, whether
governmental, state,
provincial, local governmental
or municipal, including but
not limited to income tax
(including income tax required
to be deducted or withheld
from or
42
accounted for in respect of
any payment under section 203
ICTA or otherwise),
corporation tax, ACT, capital
gains tax, inheritance tax,
VAT, customs and other import
or export duties, rates, stamp
duty, stamp duty reserve tax,
national insurance and social
security contributions; and
(b) any fine, penalty, surcharge
or interest relating to any
tax, duty, impost or levy
mentioned in paragraph (a) of
this definition or to any
account, record, form, return
or computation required to be
kept, preserved, maintained or
submitted to any person for
the purposes of any such tax,
duty, impost or levy
"Taxation Authority" any authority, whether of the United
Kingdom or elsewhere, competent to
impose, assess or collect Taxation,
including but not limited to the Board
of Inland Revenue, and the
Commissioners of Customs
"Taxation Statute" any statute (and all regulations and
other documents having the force of
law under such statute) published,
enacted, issued or coming into force
on or before the date of this
Agreement relating to Taxation
"Taxation Warranty" any Warranty in Part 3 of this
Schedule 4
"TCGA" Taxation of Chargeable Gains Xxx 0000
"TMA" Taxes Management Xxx 0000
"VAT" value added tax
"VATA" Value Added Tax Xxx 0000
"VAT Group" any group of companies for the
purposes of section 43 VATA of which
the Company is or has been a member on
or before Completion;
1.2 references to Events include Events which are deemed to have occurred for
any Taxation purpose and references to income, profits or gains earned,
received or accrued for any Taxation purpose include income, profits or
gains which are deemed to have been earned, received or accrued for any
Taxation purpose;
43
1.3 references to an Event occurring on or before Completion shall be deemed to
include the combined result or results of two or more Events where the
first occurred on or before Completion outside the ordinary course of
business and the Event or Events occurring after Completion are inside the
Company's ordinary course of business;
1.4 references to the loss of a Relief include the disallowance of a Relief and
the failure to obtain a Relief;
1.5 any stamp duty which is charged on any document, or in the case of a
document which is outside the United Kingdom any stamp duty which would be
charged on the document if it were brought into the United Kingdom, which
is necessary to establish the title of the Company to any asset or in the
enforcement or production of which the Company is interested, and any
interest, fine or penalty relating to such stamp duty, will be deemed to be
a liability of the Company to make an actual payment of Taxation.
Part 2 - Tax Covenant
2. Covenant
Subject to the provisions of this Part 2 of this Schedule 4, the Vendor
covenants with the Purchaser to pay to the Purchaser an amount equal to the
amount of:
2.1 any Liability to Taxation which has arisen or arises as a result of any
Event which occurred on or before Completion; and
2.2 any Liability to Taxation which arises under section 767A or 767AA ICTA,
section 132 FA 1988 or section 179, 189, 190 or 191 TCGA as a result of the
combined effect of two or more Events, the first of which occurred on or
before Completion; and
2.3 any Liability to Taxation which has arisen or arises on or before
Completion as a result of the non payment of Taxation by the Vendor or any
person (other than the Company) which is or has been connected (within the
meaning of section 839 ICTA) with the Vendor and for which that person is
primarily liable; and
2.4 any Liability to Taxation which arises as a result of any Event which
occurs after Completion pursuant to a legally binding obligation (whether
or not conditional) entered into by the Company on or before Completion
otherwise than in the ordinary course of business of the Company; and
2.5 any Liability to Taxation which arises as a result of any supply,
acquisition or importation made or deemed to be made on, before or after
Completion for the purposes of VAT by any member of any VAT Group other
than the Company; and
2.6 any liability of the Company to make a payment in respect of Taxation to
any person pursuant to:
2.6.1 any indemnity, covenant, guarantee or charge entered into by the
Company on or before Completion; and
44
2.6.2 any agreement or arrangement relating to the surrender of Group
Relief, ACT or any other Relief or to any VAT Group, entered into
by the Company on or before Completion; and
2.7 any Liability to Taxation which has arisen or arises as a result of:
2.7.1 the sale of the Company pursuant to this Agreement under section
179 TCGA including but not limited to any section 179 TCGA
liability in respect of the transfer of the trade and assets of
the Telesys business from the Vendor to the Company on 1 January
1999; or
2.7.2 the Inland Revenue or any other Taxation Authority treating the
consideration received or paid by the Company on the disposal or
acquisition of any asset or on the supply or obtaining of any
service or business facility of any kind by or to the Company
prior to Completion as being different from the consideration
actually received or given including but not limited to any
interest which is deemed to be received by the Company in relation
to amounts owed to the Company by the Vendor and other members of
the same group of companies as the Vendor; or
2.7.3 any transaction on or prior to Completion in relation to the debt
due from the Guarantor to the Company including but not limited to
the replacement or novation of such debt for an equivalent debt
due to the Company from the Vendor and the declaration of a
dividend by the Company in satisfaction in whole or in part of
such debt;
2.7.4 the exercise of share options held by employees of the Company in
the share capital of the Guarantor including but not limited to
employer's national insurance contributions in each case where the
options were entered into on or prior to Completion; or
2.7.5 emoluments paid to employees and/or directors of the Company in
platinum sponge prior to Completion, including but not limited to
employer's National Insurance contributions
2.8 any reasonable costs, fees or expenses (including legal costs on a full
indemnity basis) incurred by the Company or the Purchaser in connection
with:
2.8.1 any Liability to Taxation or other liability in respect of which
the Vendors are liable under any of paragraphs 2.1 to 2.7; or
2.8.2 any Claim or any Dispute; or
2.8.3 reasonably taking or defending any action (including but not
limited to legal proceedings) under this Part 2 of this Schedule
4.
3. Quantification
For the purposes of paragraph 2 the amount of a Liability to Taxation or
a liability of the kind mentioned in paragraph 2.6 will be determined as
follows:
45
3.1 the amount of a Liability to Taxation falling within paragraph (a) of the
definition of that expression in paragraph 1.1 will be the amount of the
actual payment of Taxation which the Company is liable to make;
3.2 the amount of a Liability to Taxation falling within paragraph (b) of the
definition of that expression in paragraph 1.1 will be the amount of
Taxation saved by the Company as a result of the use of the Purchaser's
Relief; and
3.3 the amount of a Liability to Taxation falling within paragraph (c) of the
definition of that expression in paragraph 1.1 will be:
3.3.1 the amount of Taxation which would have been saved by the Company
but for the loss of the Purchaser's Relief on the basis of the rates
of Taxation current at the date of the loss, assuming for this
purpose that the Company had sufficient profits or was otherwise in
a position actually to use the Purchaser's Relief; or
3.3.2 if the Purchaser's Relief lost was a right to a repayment of
Taxation, the amount of the repayment of Taxation so lost; and
3.4 the amount of a liability of the Company to make a payment in respect of
Taxation will be the amount of the payment in respect of Taxation which the
Company is liable to make.
4. Exclusions
4.1 The Vendor will not be liable under paragraphs 2.1 to 2.6 in respect of a
Liability to Taxation or other liability of the Company to the extent to
which:
4.1.1 such Liability to Taxation or other liability was discharged on or
before the Accounting Date; or
4.1.2 specific provision was made in the Balance Sheet for such Liability
to Taxation or other liability; or
4.1.3 such Liability to Taxation or other liability would not have arisen
but for any Event which occurred in the ordinary course of trading
of the Company after the Accounting Date and on or before
Completion; or
4.1.4 payment has already been made in respect of such Liability to
Taxation or other liability under this Part 2 or Part 3 of this
Schedule 4; or
4.1.5 such Liability to Taxation or other liability would not have arisen
but for a change in legislation (including but not limited to an
increase in rates of Taxation) or in the published practice of any
Taxation Authority first enacted or announced after Completion in
each case with retrospective effect; or
4.1.6 such Liability to Taxation would not have arisen but for any
voluntary omission, act, transaction or arrangement made, carried
out or entered into after Completion by one or more of
46
the Purchaser or the Company or any persons connected with any of
them or acting on behalf of any of them;
4.1.6.1 otherwise than pursuant to a legally binding obligation
entered into by the Company on or before Completion or
imposed on the Company by any legislation whether coming
into force before, on or after Completion; and
4.1.6.2 which the Purchaser was aware or could reasonably have been
expected to be aware would give rise to the Liability to
Taxation in question;
4.1.6.3 otherwise than in the ordinary course of business of the
Company; or
4.1.7 such Liability to Taxation would not have arisen but for the fact
that the accounting treatment of any asset or liability in future
accounts of the Company after Completion is different from the
treatment in the Balance Sheet save where the change is required to
comply with generally accepted accounting principles existing at
Completion; or
4.1.8 such Liability to Taxation would not have arisen but for
4.1.8.1 failure or omission on the part of the Company and/or the
Purchaser (other than at the request of the Vendor) to make
any claim, election, surrender or disclaimer, or give any
notice or consent or do any other thing under the Taxation
legislation after Completion, the making, giving or doing
of which was permitted by law and taken into account in
computing and so reducing the provisions for Taxation in
the Balance Sheet; or
4.1.8.2 the withdrawal or amendment by the Company after Completion
(other than at the request of the Vendor) of any claim,
election, surrender or disclaimer or the giving of a notice
or consent made by the Company prior to Completion which
was taken into account in computing and so reducing the
provisions for Taxation in the Balance Sheet; or
4.1.9 the Purchaser or the Company has already recovered an amount at
least equal to such Liability to Taxation from a person or persons
other than the Vendor and other than the Company or the Purchaser or
the same group of companies as the Purchaser (provided that nothing
in this paragraph 4.1.9 shall oblige the Company or the Purchaser to
recover from such person in priority to claiming under Part 2 of
this Schedule 4); or
4.1.10 such Liability to Taxation results from any winding up or cessation
after Completion of any trade or business carried on by the Company.
4.2 The provisions of paragraphs 4, 8 (Savings and Repayments) and 10
(Recovery) of this Schedule 4 and clauses 6.1, 6.2, 6.3, 6.4, 6.5, 6.7,
6.8, 6.9 and 6.10 of the Agreement shall apply to the Taxation Warranties
to limit any claim in respect of the Taxation Warranties as if they were
incorporated herein.
47
4.3 Clauses 6.1.2, 6.1.3, 6.2, 6.7 and 6.8 of the Agreement shall have as full
effect as if they were incorporated herein in respect of any claim under
Part 2 of this Schedule 4.
4.4 For the purposes of this Schedule 4 none of the following will be regarded
as an Event occurring in the ordinary course of trading of the Company:
4.4.1 any distribution (within the meaning of section 418 ICTA or Part VI
ICTA) or deemed distribution;
4.4.2 the disposal or acquisition of any asset (including trading stock)
or the supply or obtaining of any service or business facility of
any kind (including a loan of money or the letting, hiring or
licensing of any tangible or intangible property) in circumstances
where the consideration (if any) actually received or given for such
disposal, acquisition, supply or obtaining is different from the
consideration deemed to have been received or given for any Taxation
purpose;
4.4.3 any Event which gives rise to a Liability to Taxation in respect of
deemed (as opposed to actual) income, profits or gains;
4.4.4 the Company ceasing, or being deemed to cease, to be a member of any
group of companies or associated with any other company for any
Taxation purpose;
4.4.5 any Event which gives rise to a Liability to Taxation primarily
chargeable against or attributable wholly or partly to or
recoverable wholly or partly from any other person;
4.4.6 the acquisition or disposal of any capital asset other than routine
disposals of office equipment, furniture and motor cars;
4.4.7 any scheme, arrangement or transaction designed partly or wholly or
containing steps or stages designed partly or wholly for the purpose
of avoiding or reducing or deferring a Liability to Taxation;
4.4.8 the creation, cancellation or reorganisation of any share or loan
capital of the Company;
4.4.9 the failure by the Company to deduct or account for any Taxation; or
4.4.10 any Event which gives rise to any fine, penalty, surcharge, interest
or other imposition relating to any Taxation.
5. Deductions from payments
5.1 Except as required by law all payments by the Vendor under this Part 2 of
this Schedule 4 will be made free and clear of all deductions and
withholdings (whether in respect of Taxation or otherwise).
5.2 If any deduction or withholding is required by law to be made from any
payment by the Vendor under this Part 2 of this Schedule 4 (other than any
interest payable under clause 6.6) or if (ignoring any available Relief)
the Purchaser is subject to Taxation in respect of any payment by the
Vendor under this Part 2 of
48
this Schedule 4, the Vendor covenants with the Purchaser to pay to the
Purchaser such additional amount as is necessary to ensure that the net
amount received and retained by the Purchaser (after taking account of such
deduction or withholding or Taxation) is equal to the amount which it would
have received and retained had the payment in question not been subject to
the deduction or withholding or Taxation.
6. Due date for payment
6.1 Subject to paragraph 6.5, the due date for the making of a payment by the
Vendor under this Part 2 of this Schedule 4 will be the later of the date
falling ten Business Days after the Purchaser has served a notice on the
Vendor demanding such payment and the date determined in accordance with
paragraphs 6.2 to 6.4.
6.2 In any case involving a Liability to Taxation falling within paragraph (a)
of the definition of that expression in paragraph 1.1 or any other
liability of the Company to make an actual payment, the second date
mentioned in paragraph 6.1 will be the date falling five clear Business
Days before the last date upon which the payment is required to be made to
the person entitled thereto (after taking into account any postponement of
the due date for payment of any Taxation which is obtained).
6.3 In any case involving a Liability to Taxation falling within paragraph (b)
of the definition of that expression in paragraph 1.1, the second date
mentioned in paragraph 6.1 will be the date falling five clear Business
Days before the last date upon which the payment of Taxation which has been
reduced or eliminated by the use of a Purchaser's Relief is or would have
been required to be made to the relevant Taxation Authority.
6.4 In any case involving a Liability to Taxation falling within paragraph (c)
of the definition of that expression in paragraph 1.1:
6.4.1 if the Purchaser's Relief lost was a Relief other than a right to
repayment of Taxation, the second date mentioned in paragraph 6.1
will be the date falling five clear Business Days before the last
date upon which Taxation is or would have been required to be paid
to the relevant Taxation Authority in respect of the period in which
the Purchaser's Relief is lost (irrespective of whether the Company
then had sufficient profits or was otherwise in a position actually
to use the Purchaser's Relief); or
6.4.2 if the Purchaser's Relief lost was a right to a repayment of
Taxation, the second date mentioned in paragraph 6.1 will be the
date upon which the repayment was due from the relevant Taxation
Authority.
6.5 In any case involving a liability of the Vendor to pay an additional amount
to the Purchaser under paragraph 5.2 as a result of:
6.5.1 any deduction or withholding being required by law to be made, the
due date for payment will be the same as the due date for payment of
the amount from which the deduction or withholding is required to be
made; and
49
6.5.2 the Purchaser being subject to Taxation in respect of any payment,
the due date for payment will be the later of the date falling ten
Business Days after the Purchaser has served a notice on the Vendor
demanding such payment and the date falling five clear Business Days
before the last date upon which the Taxation is (or, but for the
availability of any Relief, would have been) required to be paid to
the relevant Taxation Authority (taking into account any
postponement of the due date for payment of Taxation).
6.6 If any payment required to be made by the Vendor under this Part 2 of this
Schedule 4 is not made by the due date, ascertained in accordance with
paragraphs 6.1 to 6.5, then such payment will bear interest from the due
date for payment at the annual rate of 3 per cent above the base lending
rate from time to time of National Westminster Bank plc, accruing on a
daily basis until payment is made, whether before or after judgement,
calculated on the basis of a 365 day year.
7. General
All payments by the Vendor under this Part 2 of this Schedule 4 will be
treated as repayments by the Vendor of the consideration paid for the
Shares pursuant to this Agreement, provided that this paragraph 7 will not
operate in any way to limit the liability of the Vendor under this Part 2
this Schedule 4.
8. Savings and repayments
8.1 If, at the Vendor's request and expense, the Auditors determine that the
Company has obtained a Saving or a Repayment has been made, the Saving or
Repayment (as the case may be) will be applied as follows:
8.1.1 first, the amount of the Saving or Repayment will be set off against
any payment then due from the Vendor under this Part 2 of Schedule 4
or for breach of any Taxation Warranty;
8.1.2 secondly, to the extent that there is an excess a refund shall be
made to the Vendor of any previous payment or payments made by the
Vendor under this Part 2 of Schedule 4 and not previously refunded
under this clause up to the amount of such excess and, the Purchaser
will, within five Business Days, pay to the Vendor the amount of the
excess; and
8.1.3 thirdly to the extent that the excess referred to in sub-clause
8.1.2 is not exhausted under that clause, the remainder of that
excess shall be carried forward and set off against any future
payment or payments which become due from the Vendor under this
Schedule.
8.2 In determining whether or not the Company has obtained a Saving or a
Repayment and, if so, the amount, the Auditors will act as experts and not
as arbitrators and their determination will (in the absence of manifest
error) be conclusive and binding on the parties.
8.3 The Purchaser will inform the Vendor as soon as reasonably practicable
after it or the Company becomes aware that the Company may obtain a Saving
or a Repayment.
50
8.4 The provisions of this clause 8 will also apply, with appropriate
modifications, to the obtaining by the Company, the Purchaser or any member
of the same group of companies as the Purchaser of any Repayment or Saving
(other than a repayment of Taxation from a Taxation Authority) in respect
of a Liability to Taxation or other liability in respect of which the
Vendor has made them a payment under this Part 2 of Schedule 4 or for
breach of any Taxation Warranty.
9. Purchaser's covenant
9.1 The Purchaser covenants with the Vendor to pay to the Vendor an amount
equal to any liability of the Vendor to Taxation under section 767A or
767AA ICTA in connection with an Event occurring in the accounting period
of the Company current at Completion or in any earlier accounting period
and arising as a result of the Company failing to discharge such liability
together with any losses, costs, fees or expenses incurred by the Vendor in
connection with such liability.
9.2 The Purchaser will be entitled to set off against any amount which it is
liable to pay to the Vendor under paragraph 9.1 any amount which the Vendor
is liable to pay the Purchaser under this Part 2 of Schedule 4 in
connection with the same Event.
10. Recovery
If any payment is made by the Vendor in full discharge of a liability which
has arisen under this Schedule 4 then where the Company is entitled to
recover or recovers from any other person any sum (other than a Repayment)
in respect of the matter which has given rise to the liability the
Purchaser shall, or shall procure that the Company shall in the case of
such entitlement (if requested by, and at the expense of the Vendor and
upon the Vendor indemnifying the Purchaser to the reasonable satisfaction
of the Purchaser, against all reasonable costs or expenses which may
therefore be incurred) take such action as the Vendor shall reasonably
request to enforce such recovery against the person in question. The
Purchaser shall account to the Vendor for any sums so recovered (including
any interest or repayment supplement (as defined in section 825 ICTA) paid
by such a person) in accordance with paragraph 8.1 of this Schedule 4.
11. Claims Procedure
11.1 The Purchaser will as soon as reasonably practicable (and in any event no
later than 7 days before the expiry of any time limit for making any appeal
against such Claim) give notice of any Claim to the Vendor, provided that
the giving of such notice will not be a condition precedent to the
liability of the Vendor under this Schedule 4.
11.2 If the Vendor first indemnifies and keeps indemnified (on an after-tax
basis) the Purchaser and the Company to the reasonable satisfaction of the
Purchaser against any liability, cost, damage, loss or expense which the
Purchaser or the Company may incur in consequence thereof the Purchaser
agrees to take such action as the Vendor may reasonably request, at the
Vendor's cost and expense, to dispute, resist, appeal, compromise or defend
the claim.
11.3 The Purchaser shall not be obliged:
51
11.3.1 to allow the Vendor to take over the conduct of the Company's
Taxation affairs in relation to the Claim or the conduct of any
negotiations or proceedings with any Taxation Authority;
11.3.2 to procure that the Company pursues any proceedings before the
General or Special Commissioners of the Inland Revenue or a Value
Added Tax Tribunal or their nearest applicable equivalent in any
other jurisdiction or the High Court of Justice of England and
Wales or any other court or tribunal of first instance unless the
Vendor and the Purchaser have first together obtained, at the
Vendor's cost and expense, opinion of Counsel reasonably
acceptable to the Purchaser recommending the course of action
proposed by the Vendor; or
11.3.3 in its absolute discretion, to procure that the Company pursues
any proceedings beyond any court or tribunal referred to in
paragraph 11.3.2; or
11.3.4 to take any action which it reasonably considers would be
prejudicial to the business or Taxation affairs of the Company,
the Purchaser or any other company within the same group of
companies as the Purchaser.
11.4 Paragraph 11.2 shall not apply, and the Purchaser shall be free to deal
with all Claims in its absolute discretion:
11.4.1 in any case involving an allegation by any Taxation Authority of
dishonest or fraudulent conduct on the part of the Vendor or the
Company or any person acting on behalf of any of the Vendor or
the Company; or
11.4.2 if the Vendor commits an act of bankruptcy, if a receiving order
is made against the Vendor, if the Vendor becomes unable to pay
its debts as and when they fall due or if the Vendor makes a
composition with creditors or enters into a deed of arrangement.
12. Corporation tax returns
12.1 The Vendor or its duly authorised agents will, at the Company's cost and
expense if and to the extent such cost and expense has been provided for in
the Balance Sheet (or in the case where such cost and expense has not been
provided for in the Balance Sheet it has been paid prior to Completion),
and thereafter at the Vendor's cost and expense, prepare the corporation
tax returns and computations of the Company for all accounting periods
ended on or before the Accounting Date, to the extent that they have not
been prepared before Completion, and submit them to the Purchaser.
12.2 Purchaser will procure that the Company causes the returns and computations
mentioned in paragraph 12.1 to be authorised, signed and submitted to the
appropriate Taxation Authority without amendment or with such amendments as
the Purchaser reasonably considers to be necessary.
12.3 The Vendor or its duly authorised agents will, at the Company's cost and
expense if and to the extent such cost and expense has been provided for in
the Balance Sheet (or in the case where such cost and expense has not been
provided for in the Balance Sheet it has been paid prior to Completion) and
thereafter at the Vendor's cost and expense, prepare all documentation and
deal with all matters (including
52
correspondence) relating to the corporation tax returns and computations of
the Company for all accounting periods ended on or before the Accounting
Date provided that the Vendor will not without the prior written consent of
the Purchaser (not to be unreasonably withheld or delayed) transmit any
communication (whether written or otherwise) to HM Inspector of Taxes or
agree any matter with HM Inspector of Taxes.
12.4 The Purchaser will procure that the Company affords such access to its
books, accounts and records as is necessary and reasonable to enable the
Vendor or its duly authorised agents to prepare the corporation tax returns
and computations of the Company for all accounting periods ended on or
before the Accounting Date and conduct matters relating to them in
accordance with this paragraph 12.
12.5 The Vendor will take all reasonable steps to ensure that the corporation
tax returns and computations of the Company for all accounting periods
ended on or before the Accounting Date are prepared and agreed with HM
Inspector of Taxes as soon as possible.
13. Group Relief
13.1 The Vendor will procure that it surrenders for no consideration pursuant to
the provisions of Chapter IV Part X ICTA to the extent legally possible the
following trading losses or other amounts eligible for surrender by way of
Group Relief:
Surrendering Claimant Company Amount Accounting Period
------------ ---------------- ------ -----------------
Company
-------
Vendor Company (Pounds)26,284 31 December 1997
Vendor Company (Pounds)254,964 31 December 1998
13.2 The Vendor will keep the Purchaser fully informed of all matters relating
to any surrender of Group Relief mentioned in paragraph 13.1.
Part 3 - Tax Warranties
14. Returns, disputes and clearances
14.1 All notices, returns, computations, registrations and payments which should
have been made by the Company for any Taxation purpose have been made
within the requisite periods and are up-to-date, correct and on a proper
basis and none of them is, or so far as the Vendor is aware is likely to
be, the subject of any dispute with any Taxation Authority.
14.2 The Company is not involved in any dispute with any Taxation Authority
concerning any matter likely to affect in any way the liability of the
Company to Taxation and so far as the Vendor is aware there are no
circumstances which are likely to give rise to any such dispute.
14.3 The Taxation affairs of the Company have never been the subject of any
investigation or enquiry by any Taxation Authority (other than routine
questions), and so far as the Vendor is aware no Taxation Authority
53
has indicated that it intends to investigate the Taxation affairs of the
Company and there are no circumstances which are likely to give rise to
any such investigation.
14.4 The Company has punctually supplied all information requested by any
Taxation Authority for any Taxation purpose.
14.5 All particulars furnished to the Inland Revenue or any other Taxation
Authority in connection with the application for any consent or clearance
made on behalf of or affecting the Company fully and accurately disclosed
all facts, circumstances and (where appropriate) law material to the
decision of the Inland Revenue or such other Taxation Authority and any
such consent or clearance given remains valid and effective and any
transaction for which such consent or clearance has previously been
obtained has been carried into effect (if at all) only in accordance with
the terms of the relevant application, consent or clearance.
15. Penalties and interest
15.1 The Company has not since the Accounting Date paid, and is not liable to
pay, any fine, penalty, charge, surcharge or interest charged by virtue of
any of the provisions of Taxation Statute and has not since the Accounting
Date become subject to any forfeiture by virtue of any such provisions or
the operation of any penal provisions contained in any Taxation Statute.
15.2 There are no circumstances which are likely to cause the Company to become
liable to pay any fine, penalty, charge, surcharge or interest, or become
subject to any forfeiture, as mentioned in paragraph 15.1.
16. Taxation claims, liabilities and reliefs
16.1 The Company has sufficient records to enable it to make and complete
returns for Taxation purposes and to calculate the liability to Taxation
or relief arising on the disposal of any asset owned at the Accounting
Date or acquired since the Accounting Date but before Completion.
16.2 The Company has duly and properly made all Taxation claims, disclaimers,
elections and surrenders and given all notices and consents and done all
other things in respect of Taxation the making, giving or doing of which
was assumed to have been made for the purposes of the Balance Sheet, all
such claims, disclaimers, elections, surrenders, notices, consents and
other things have been accepted as valid by the relevant Taxation
Authorities and none has been revoked or otherwise withdrawn.
16.3 The Company has not made any claim under section 23, 24, 48, 242, 279 or
280 TCGA or section 584 ICTA.
16.4 The Company is not, and will not become, liable to pay, or make
reimbursement or indemnity in respect of, any Taxation (or amounts
corresponding to any Taxation) payable by or chargeable on or attributable
to any other person, whether in consequence of the failure by that person
to discharge that Taxation within any specified period or otherwise, where
such Taxation relates to a profit, income or gain, transaction,
54
event, omission or circumstance arising, occurring or deemed to arise or
occur (whether wholly or partly) on or prior to Completion.
17. Distributions and payments
17.1 The Company has not at any time issued or agreed to issue any share
capital as paid up otherwise than by the receipt of new consideration,
after repaying any share capital, as mentioned in section 210 ICTA.
17.2 The Company has not made or received any exempt distribution within the
meaning of section 213 ICTA, and has at no time been a relevant company in
relation to an exempt distribution for the purposes of that section or
concerned in an exempt distribution for the purposes of section 214 ICTA.
17.3 No rents, interest, annual payments or other sums of an income nature paid
or payable by the Company since the Accounting Date, or which the Company
is under an obligation to pay, will be wholly or partially disallowable as
deductions or charges in computing the profits of the Company for the
purposes of corporation tax, whether by virtue of the provisions of
section 74, 79, 125, 338, 577, 779 to 786 (inclusive) or 787 ICTA or
otherwise.
17.4 The Company has not since the Accounting Date made any payment to, or
provided any benefit for, any present or former director, employee or
officer which is wholly or partially disallowable as a deduction in
computing the profits of the Company for the purposes of corporation tax,
and is under no obligation to make any such payment or provide any such
benefit.
18. Employee benefits
18.1 Without prejudice to the generality of paragraph 14.1, the Company has
properly operated the Pay As You Earn system, by making deductions, as
required by the applicable Taxation Statute, from all payments made, or
treated as made, to its directors, employees or officers or former
directors, employees or officers or any persons required to be treated as
such, and accounting to the Inland Revenue for all Taxation so deducted
and for all Taxation chargeable on the Company on benefits provided for
its directors, employees or officers, or former directors, employees or
officers.
18.2 The Company has complied fully with all reporting requirements, and proper
records have been maintained, relating to all payments and benefits made
or provided, or treated as made or provided, to its directors, employees
or officers or former directors, employees or officers.
18.3 The Company has complied fully with its obligations under Chapter IV Part
XIII ICTA.
18.4 The Company has complied fully with all its obligations relating to Class
1 and Class 1A National Insurance Contributions, both primary and
secondary.
19. Group transactions
The Company has not at any time:
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19.1 acquired any asset from any company which at the time of the acquisition
was a member of the same group of companies as defined in section 170
TCGA;
19.2 surrendered or claimed or agreed or arranged to surrender or claim (and
prior to Completion will not surrender or claim or agree or arrange to
surrender or claim) any amount by way of Group Relief pursuant to sections
402 to 413 (inclusive) ICTA and has not made or received and is not liable
to make or entitled to receive a payment for Group Relief;
19.3 surrendered or claimed or agreed or arranged to surrender or claim (and
prior to Completion will not surrender or claim or agree or arrange to
surrender or claim) any amount of ACT pursuant to section 240 ICTA and has
not made or received and is not liable to make or receive a payment for
surrender of ACT;
19.4 joined in the making of any election pursuant to section 247 ICTA or paid
any dividend without paying ACT or made any payment without deduction of
income tax in circumstances such that ACT ought to have been paid or
income tax ought to have been deducted as mentioned in section 247(6)
ICTA;
19.5 been, and there are no circumstances by virtue of which the Company could
be, assessed or charged to corporation tax by virtue of the provisions of
section 178(9), 179(11), 190 or 191 TCGA and the Company is not entitled
to recover or liable to have recovered from it any sums paid pursuant to
any of those sections; or
19.6 ceased to be a member of a group of companies in such circumstances that a
profit or gain was deemed to accrue to the Company by virtue of section
178 or 179 TCGA and neither the execution of this Agreement nor Completion
will result in any profit or gain being deemed to accrue to the Company
for any Taxation purpose whether pursuant to section 179 TCGA or
otherwise.
20. Tax avoidance
So far as the Vendor is aware the Company has not entered into or been a
party to any scheme, arrangement or transaction to which the provisions of
any of sections 34 to 37 (inclusive), 56 and 398, 395, 399, 703 to 709
(inclusive), 713, 714, 729 to 737 (inclusive), 770, 775, 776, 779 to 787
(inclusive), 798 and Schedule 28AA ICTA could apply.
21. Base values and acquisition costs
21.1 If each of the capital assets of the Company owned at the Accounting Date
was disposed of for a consideration equal to the book value of that asset
in, or adopted for the purpose of, the Balance Sheet, or in the case of
assets acquired since the Accounting Date, equal to the consideration
given on acquisition, no liability to corporation tax on chargeable gains
or balancing charge under the CAA would arise (and for this purpose there
will be disregarded any relief or allowance available to the Company other
than amounts falling to be deducted from the consideration receivable
under section 38 TCGA).
22. Capital gains
The Company has not at any time:
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22.1 made a claim under sections 152 to 158 (inclusive) or 175 or 247 TCGA
which affects the amount of the chargeable gain or allowable loss which
would, but for such claim, have arisen upon a disposal of any asset or
acquired any asset or any interest in any asset in circumstances in which
another company has made a claim under section 175 TCGA which affects for
the purposes of the TCGA the amount or value of the consideration given
for such asset or interest;
22.2 been a party to, involved in, or connected with any disposal of assets
within the meaning of section 29 TCGA or any scheme or arrangement such as
are mentioned in section 30 TCGA;
22.3 been a party to, involved in, or connected with, any depreciatory
transaction to which section 176 TCGA applied (including any transaction
to which that section applied by virtue of section 177 TCGA);
22.4 made an election under section 35(5) TCGA nor has the Company made its
first relevant disposal for the purposes of section 35(6) TCGA;
23. Capital allowances
23.1 All capital expenditure incurred by the Company since the Accounting Date
and all capital expenditure which may be incurred by the Company under any
existing contract has qualified or will be capable of qualifying for
capital allowances.
23.2 The Company is not in dispute with any person as to the availability of
allowances under section 51 CAA and there are no circumstances which are
likely to give rise to such a dispute.
24. VAT: general
24.1 The Company:
24.1.1 is duly registered and is a taxable person for the purposes of
VAT and such registration is not subject to any conditions
imposed by or agreed with the Commissioners of Customs and
Excise;
24.1.2 has complied in all respects with all statutory requirements,
orders, provisions, directions or conditions relating to value
added tax;
24.1.3 maintains complete, correct and up-to-date records for the
purposes of all legislation relating to VAT and is not subject to
any condition imposed by the Commissioners of Customs and Excise
under paragraph 6 Schedule 11 VATA relating to the preservation
of information;
24.1.4 is not in arrears with any payment or returns under legislation
relating to VAT or excise duties, or liable to any abnormal or
non-routine payment of VAT, or any forfeiture or penalty, or to
the operation of any penal provision;
24.1.5 has not within the two years ending on the date of this Agreement
been served with any penalty liability notice under section 64
VATA or any surcharge liability notice under section 59 VATA or
been issued with any written warning under section 76(2) VATA;
57
24.1.6 has not been or applied for treatment as a member of a group for
VAT purposes under section 43 VATA and no transaction has been
effected in consequence of which the Company is or may be held
liable for any VAT arising from supplies made by another company;
24.1.7 has no interest and has not at any time within the period of ten
years preceding the date of this Agreement had any interest in
any assets treated as items under Part XV of the Value Added Tax
Regulations 1995; and
24.1.8 is not, and has not agreed to become, an agent, manager or factor
for the purposes of section 47 VATA of any person who is not
resident in the United Kingdom.
24.2 All supplies of goods and services made by the Company are taxable
supplies for the purposes of the VATA and all input tax is deductible in
accordance with the provisions of sections 25 and 26 VATA.
24.3 All goods or services supplied to the Company, or goods imported by the
Company, in respect of which the Company has claimed credit for input tax
under the rules set out in VATA, are used or to be used wholly for the
purposes of the Company's business.
24.4 The Company has not received any material supplies of the type described
in Schedule 5 VATA.
25. VAT: property transactions
25.1 The Company has not incurred any liability in respect of VAT (whether to
H.M. Customs and Excise or to any other person) by reason of the
provisions of paragraph 2(1) Schedule 10 VATA and there are no
circumstances whereby the Company could become so liable as a result of a
person making an election under that paragraph.
25.2 Neither the Company nor any relevant associate (within the meaning of
paragraph 3(7) Schedule 10 VATA) has made any election under paragraph
2(1) Schedule 10 VATA in respect of any land in, over or in respect of
which the Company has any interest, right or licence to occupy and the
Company is not aware of any intention to make such an election.
26. Stamp duty and stamp duty reserve tax
26.1 All documents which are liable to stamp duty and which confer any right
upon the Company have been duly stamped and no document which confers any
right upon the Company and which is outside the United Kingdom would
attract stamp duty if it were brought into the United Kingdom and there is
no liability to any penalty in respect of such duty or circumstances which
may give rise to such a penalty.
26.2 The Company is not under a liability to pay stamp duty reserve tax and so
far as the Vendor is aware there are no circumstances which may result in
the Company being so liable.
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27. Residence and offshore interests
27.1 The Company is and has at all times been resident in the United Kingdom
for the purposes of all Taxation Statutes and has not at any time been
resident outside the United Kingdom for the purposes of any Taxation
Statute or any double taxation arrangements.
27.2 The Company has not at any time entered into any transaction falling
within section 765 ICTA or failed to comply with the requirements of
section 765A ICTA.
27.3 The Company has not at any time been subject to Taxation in any
jurisdiction outside the United Kingdom or had a branch outside the United
Kingdom or any permanent establishment (as that expression is defined in
the respective double taxation relief orders current at the date of this
Agreement) outside the United Kingdom.
27.4 The Company does not own and has not at any time owned any interest in a
controlled foreign company within the meaning of sections 747 and 752
ICTA.
27.5 The Company does not and has at no time held shares in a company which is
not resident in the United Kingdom and which would be a close company if
it were resident in the United Kingdom, in circumstances such that a
chargeable gain accruing to that other company could be apportioned to the
Company under section 13 TCGA.
28. Shares and securities
28.1 The Company has not at any time:
28.1.1 purchased or agreed to purchase, repaid or agreed to repay or
redeemed or agreed to redeem any shares of any class of its share
capital or any amount paid up on any of its shares;
28.1.2 capitalised or agreed to capitalise in the form of redeemable
shares or debentures any profits or reserves of any class or
description or passed or agreed to pass any resolution to do so;
or
28.1.3 provided capital to any company on terms whereby the company so
capitalised has in consideration of the provision of capital
issued loan stock or other securities on terms which were
otherwise than by way of a bargain made at arm's length.
28.2 The Company does not hold or have in issue and shares or securities (as
defined in section 132(3)(b) TCGA) other than the Shares.
29. Loan relationships
There are no outstanding debts owed to or by the Company, or any
securities issued by the Company or which it owns or in which it has an
interest, which will not be repaid at Completion, other than trade debts
which fall within the exemption in section 251(1) TCGA and which do not
arise out of loan relationships of the Company for the purposes of section
81(1) FA 1996.
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30. Foreign exchange gains and losses
30.1 The Company is not, nor has it since the Accounts Date been:
30.1.1 the holder of a qualifying asset;
30.1.2 subject to a qualifying liability; or
30.1.3 a party to a currency contract
30.1.4 for the purposes of Chapter II Part II FA 1993.
30.2 The Company is not and never has been a party to any debt contract or
option, any interest rate contract or option, or any currency or option
which is treated as a qualifying contract in Chapter II Part IV FA 1994 or
which in future may become such a qualifying contract.
31. Quarterly instalment payments
The Company is not obliged to pay corporation tax in quarterly instalments
under the provisions of Corporation Tax (Instalment Payments) Regulations
1998 (SI 1998 No 3175) and section 59E TMA.
32. Group payment arrangements
The Company has not entered into any group payment arrangements under the
provisions of section 36 FA 1998.
33. Transfer pricing
33.1 The Company has not, nor agreed to, undertake any transactions which are
within the provisions of Schedule 28AA ICTA and the Disclosure Letter sets
out the details of the documentation the Company has prepared to enable it
to fulfil its obligations under Schedule 18 FA 1998 in respect of
accounting periods ending after 30 June 1999 in relation to transfer
pricing.
33.2 The Company has not entered into any advance pricing arrangements with the
Inland Revenue under the provisions of section 85 FA 1999.
34. Balance Sheet
34.1 The Balance Sheet fully provides or reserves, in accordance with the
accounting policies set out in the notes included in the Balance Sheet,
for all Taxation (including deferred tax attributable to timing
differences capable of reversal after the Accounting Date) for which the
Company is or may be liable, or for which it may be accountable, as at the
Accounting Date by reference to:
34.1.1 the profits, gains, income and earnings (whether actual or
deemed) for any period ended on or before the Accounting Date; or
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34.1.2 any distributions (within the meaning of Part VI or section 418
ICTA) made or deemed to be made on or before Accounting Date; or
34.1.3 any other transaction entered into or deemed to be entered into
on or before the Accounting Date.
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SCHEDULE 5
Completion Arrangements
At Completion the following will take place:
1. Items For Delivery
1.1 The following items will be produced and delivered by the Vendor:
Share Transfers
1.1.1 Executed transfers of the Shares in favour of the Purchaser
together with the share certificates for the Shares (or in
the case of any lost certificate an indemnity satisfactory
to the Purchaser in relation to it).
Authorisations
1.1.2 A copy of a resolution of each of the board of directors of
the Company and the Guarantor authorising the execution of
and the performance by the Company and the Guarantor of
their obligations under each of the documents to be executed
by them, together with a legal opinion in agreed terms
relating to the entering into of this Agreement and related
documentation by the Guarantor.
1.1.3 If the Purchaser requests, a power of attorney in the agreed
terms by each registered holder of the Shares which enables
the Purchaser or its nominee to attend and vote at general
meetings of the Company.
Resignations and Appointments
1.1.4 Letters of resignation as directors of the Company and Group
Members in the agreed terms from Xxxxxx Xxxxxxx and Xxxx
Xxxxxxx.
1.1.5 Letters of resignation as secretaries of the Company and
Group Members in the agreed terms from Xxxxxxxxxxx Grew and
Xxxxxx Xxxx.
1.1.6 Letters of appointment of such new trustees to, and the
letters of retirement of such of the existing trustees of,
the Pension Scheme as the Purchaser may require.
Company Documentation
1.1.7 The certificate of incorporation, any certificate(s) of
incorporation on change of name, the common seal and the
statutory books and registers (which will be written up to
but not including Completion) of the Company.
1.1.8 All deeds and documents relating to the title of the Company
to the Property.
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Financial
1.1.9 A copy of the bank mandate of the Company and copies of bank
statements in respect of each account of the Company as at
the close of business on the last Business Day prior to
Completion, together in each case with a reconciliation
statement prepared by the Vendor to show the position at
Completion (listing unpresented cheques drawn or received by
the Company and standing orders payable since the date of
such bank statements).
Miscellaneous
1.1.10 All licences, certificates or other documents previously
specified by the Purchaser.
1.1.11 A deed in the agreed terms from the Vendor acknowledging
that neither the Vendor nor any Associated Company has any
claim against the Company and that there is no agreement or
arrangement under which the Company has any actual,
contingent or prospective obligation to any such person.
1.1.12 Where any agreement or arrangement referred to in paragraph
1.1.12 previously existed, evidence of the release or
termination of it in a form satisfactory to the Purchaser.
2. Convening of Meetings
2.1 The Vendor will procure that duly convened board meetings of the
Company are held at which:
2.1.1 the transfers referred to in paragraph 1.1.1 (subject to
stamping if not previously effected) are approved for
registration in the books of the Company;
2.1.2 the address of the registered office of the Company is
changed to Claremont House, Hatters Lane, Xxxxxxx Xxxxxxxx
Xxxx, Xxxxxxx, Xxxxxxxxxxxxx XX00 0XX;
2.1.3 the resignations of directors and secretary referred to in
each of paragraphs 1.1.5 and 1.1.6 are accepted with effect
from the end of the relevant board meeting;
2.1.4 such persons as are nominated by the Purchaser as directors,
secretary and auditors of the Company are appointed with
effect from the end of the relevant board meeting; and
2.1.5 if specified by the Purchaser, all existing instructions to
the bankers of the Company are revoked and new instructions
given to such bankers as the Purchaser may nominate, in such
form as the Purchaser directs;
3. Purchaser authorisation
The Purchaser will deliver to the Vendor a copy of a resolution of the
board of directors of the Purchaser authorising the execution of and
performance by the Purchaser of its obligations under each of the
documents to be executed by it.
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4. Sub-Contract
In connection with the Sub-Contract:
4.1 the Guarantor will produce and deliver to the Purchaser the consent of
Mercury Personal Communications in a form acceptable to the Purchaser
to the sub-contracting of the One2One Contract on the terms of the
Sub-Contract; and
4.2 the Guarantor shall, and the Vendor shall procure that the Company
shall, enter into the Sub-Contract.
5. Payment of Consideration
The Purchaser will pay in accordance with clause 2.3 that part of the
Consideration which is payable to the Vendors on Completion and as
regards the Retention Fund the Purchaser and the Vendors shall take
all such steps and give all such written instructions as are necessary
or desirable to give effect to the provisions of Schedule 6.
6. Loan Note
The Purchaser shall issue the Loan Note to the Vendor and the
Certificate for such Loan Note shall be delivered at Completion.
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SCHEDULE 6
Provisions regarding Retention Fund
1. The Retention Fund shall be paid on Completion by the Purchaser to the
Purchaser's Solicitors and the Vendor's Solicitors ("the Retention Fund
Holders") who shall hold the Retention Fund as stakeholders upon trust for
the Vendor and Purchaser on the following terms and who shall be
irrevocably instructed by the Vendor and the Purchaser:
1.1 to place the Retention Fund in a deposit account in the name of the
Retention Fund Holders with Bank of Scotland and, subject to paragraph
1.3, to retain the same in such account;
1.2 subject as provided in paragraph 1.3, to pay the Retention Fund to the
Vendor Solicitors in accordance with clause 3 at the expiration of 6
months from the date of Completion;
1.3 if at any time or from time to time prior to the expiration of the said
period of 6 months the Retention Fund Holders shall receive notice from
the Purchaser and the Vendor stating that any claim for compensation or
indemnity has been admitted by the Vendor, or awarded by any Court or in
any arbitration, to pay to the Purchaser the amount so admitted or awarded
(including any costs which may be admitted or awarded in favour of the
Purchaser), and, subject thereto, to pay the balance if any of the
Retention Fund to the Vendor's Solicitors in accordance with paragraph
1.2; and
1.4 to pay any interest received by the Retention Fund Holders on the
Retention Fund (less any tax thereon for which the Retention Fund Holders
may be accountable and any charges and expenses incurred by the Retention
Fund Holders) to the Vendor in accordance with clause 2.3 at the
expiration of the period referred to in paragraph 1.2 or, if applicable,
when the balance of the Retention Fund is paid to the Vendor's Solicitors
in accordance with paragraph 1.3.
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SCHEDULE 7
Relevant Services
Rigging Services including the survey, installation and testing of antenna and
feeder systems for use in UHF, VHF, PCN, GSM, PMR, PAMR (as defined in Xxxxxx'x
Telecoms Dictionary, 15th Edition) radio systems;
Microwave Services including the survey, line of sight, installation and
commissioning of microwave links;
Structure Services including design, provision and installation of
telecommunication support structures together with the management of contractors
to provide foundations, security fencing, equipment cabins, lightening
protection etc;
Maintenance Services including preventative and reactive maintenance to support
the Company's rigging, microwave and structure services;
Support Services including project management of Relevant Services,
material/equipment, storage and logistics; and
Special Projects - providing the above services in special environments such as
Trackside, roadside in tunnels, in buildings.
66
SIGNED by /s/ X.X. Xxxxxx )
duly authorised for and on behalf of )
P-COM NETWORK SERVICES LTD )
in the presence of: )
Witness signature: /s/ Xxxxxx Xxxx
Name: Xxxxxx Xxxx
Address: 00 Xxxxx Xxxxxx
Xxxxxx X00XX
Occupation: Solicitor
SIGNED by /s/ Xxxxxx Xxxxxxxxxx )
duly authorised for and on behalf of )
SPECTRASITE TRANSCO )
COMMUNICATIONS LIMITED )
in the presence of: )
Witness signature:
Name:
Address:
Occupation:
SIGNED by /s/ X.X. Xxxxxx )
duly authorised for and on behalf of )
P-COM, INC. )
in the presence of: )
Witness signature: /s/ Xxxxxx Xxxx
Name: Xxxxxx Xxxx
Address: 00 Xxxxx Xxxxxx
Xxxxxx X00XX
Occupation: Solicitor
67
