EX. 10.14
26th February 1999
SHARE PURCHASE AGREEMENT
among
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇-MENTETH AND OTHERS
▇▇▇▇▇▇ ▇▇▇▇▇ EUROPE LIMITED
and
EAGLE TRUSTEES LIMITED AS THE
SOLE TRUSTEES OF THE STUART-MENTETH
FAMILY TRUST
------------------------------------------------------------
For the direct and indirect acquisition of the entire issued
share capital of DATAVAULT LIMITED
------------------------------------------------------------
MACROBERTS,
Solicitors,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇. ▇▇ ▇▇▇
JWM/CB/DA691034
INDEX
Clause No. Heading Page No.
1. Definitions and Interpretation
2. Sale and Purchase
3. Pre-emption
4. Consideration
5. Completion
6. Warranties and Representations
7. Limitation of Liability
8. Undertakings by the Covenantors
9. Guarantee
10. Time of the Essence
11. Expenses
12. Announcements
13. Assignation
14. Notices
15. General
16. Toad Hall Trustees
17. Specific Undertakings
18. Governing Law and Submission to Jurisdiction
Schedule
Part 1 The Vendors
Part 1A The DHL Vendors
Part 1B The SSL Vendors
Part 1C The Datavault Vendors
Part `1D The Minor Datavault Vendors
Part 2A The Company
Part 2B DHL
Part 2C SSL
Part 2D The Subsidiaries
Part 3A Warranties by the Datavault Vendors
Part 3B The General Warranties
Part 4A Limitation of Liability -- General Provisions
Part 4B Limitation of Liability -- The General Warranties
Part 5 The Leasehold Property
Part 6 Preparation of the Completion Balance Sheet
SHARE PURCHASE AGREEMENT made this 26th February 1999
among
(1) THOSE Persons whose names and addresses are set out in Part 1 of the
Schedule (collectively "the Vendors" and "Vendor" means any one of them);
(2) ▇▇▇▇▇▇ ▇▇▇▇▇ EUROPE LIMITED incorporated in England and Wales under the
Companies Acts (No. 3714414) and having its registered office at ▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ ("the Purchaser"); and
(3) EAGLE TRUSTEES LIMITED incorporated in Jersey, Channel Islands, (No.
33458) having its registered office at ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇. ▇▇▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇ ▇▇▇ in its capacity as sole trustee of THE STUART-MENTETH
FAMILY TRUST of ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇ ("the
Trustee") and not otherwise
WHEREAS:-
(A) DATAVAULT LIMITED ("the Company") is incorporated in Scotland under the
Companies Acts (No 80642) as a private company limited by shares. Further
particulars of the Company are set out in Part 2A of the Schedule;
(B) DHL is the beneficial owner and registered holder of 334,829 A ordinary
shares of (pound)0.10 each in the Company representing approximately 74.4%
of the issued equity share capital of the Company;
(C) SSL is the beneficial owner and registered holder of 30,027 A ordinary
shares of (pound)0.10 each in the Company representing approximately 6.7%
of the issued equity share capital of the Company;
(D) The Datavault Vendors are the beneficial owners and registered holders of
approximately 18.9% of the issued equity share capital of the Company as
shown opposite their respective names in Parts 1C and 1D of the Schedule;
(E) The DHL Vendors are the beneficial owners and registered holders of the
entire issued share capital of DHL as shown opposite their respective
names in Part 1A of the Schedule;
(F) The SSL Vendors are the beneficial owners and registered holders of the
entire issued share capital of SSL as shown opposite their respective
names in Part 1B of the Schedule;
2
(G) The DHL Vendors, the SSL Vendors, the Datavault Vendors have agreed to
sell the DHL Contract Shares, the SSL Contract Shares and the Datavault
Contract Shares respectively and the Purchaser has agreed to purchase the
Contract Shares on the terms of this Agreement.
(H) The beneficiaries of the SM Jersey Trust are collectively the ultimate
beneficial owners of the entire issued share capital of Allerwegen and the
Trustee (in the capacity as sole trustee of the SM Jersey Trust) has
agreed (subject to the limitations set out in this Agreement) to guarantee
the obligations of Allerwegen pursuant to the Warranties and the Tax
Covenant.
NOW THEREFORE THE PARTIES HAVE AGREED AS FOLLOWS:-
1. DEFINITIONS AND INTERPRETATION
1.1 In this agreement, unless the context otherwise requires:-
Accounts means the audited consolidated balance sheet of the Company and
the Subsidiaries as at the Accounts Date and the audited consolidated
profit and loss account of the Company and the Subsidiaries for the
financial period then ended together with all notes and the directors' and
auditors' reports annexed thereto;
Accounts Date means 31 March 1998;
Agreed Form means the form agreed by the parties prior to the execution of
this agreement and either initialled by the Solicitors for the purpose of
identification or executed or delivered contemporaneously with the
execution of this agreement;
Allerwegen means Allerwegen Holdings B.V., one of the Vendors;
Ascertained Claim means an amount (if any) in relation to a claim by the
Purchaser under the Warranties and/or the Tax Covenant which, subject to
the limitations contained in Part 5 of the Schedule and/or the Tax
Covenant (as appropriate), has either (i) been agreed in writing between
the Warrantors and the Purchaser; or (ii) which a Court of competent
jurisdiction (from which there is no appeal or from which it is no longer
possible to appeal its decision) orders should be paid to the Purchaser
pursuant to any such claim;
3
Associate means (1) in relation to a Vendor (other than a Vendor acting in
the capacity of a trustee) who is an individual, any spouse or lineal
ascendant or descendant, any partnership of which any of the foregoing is
a partner or any company which is controlled (within the meaning of TA
1988 section 840) by any one or more of the foregoing, whether alone or in
conjunction with any other party and (2) in relation to a Vendor (other
than a Vendor acting in the capacity of a trustee) who is a corporate
entity:-
(a) any member of the group of companies of which the Vendor forms part;
(b) a Controlling Party; and/or
(c) in relation to a Controlling Party, any spouse or lineal ascendant
or descendant, any partnership of which any of the foregoing is a
partner or any company which is controlled (within the meaning of TA
1988 section 840 ) by any one or more of the foregoing, whether
alone or in conjunction with any other party;
Bonus Award Scheme means the Datavault Limited Bonus Aware Scheme as
constituted by a set of rules in the Agreed Form to be established by the
Company pursuant to Clause 5.2;
Business Day means any day on which the Scottish clearing banks are open
for over-the-counter business in Scotland;
CAA 1990 means the Capital ▇▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇;
▇▇ ▇▇▇▇▇▇ means ▇▇▇▇ ▇▇▇▇▇▇, one of the Datavault Vendors;
Cash Consideration means (pound)9,845,000, part of the Consideration;
Companies Act means the Companies Acts 1985 to 1989;
Completion means completion of the sale and purchase of the Contract
Shares;
4
Completion Balance Sheet means a consolidated balance sheet of the Company
and the Subsidiaries as at the Completion Date, prepared and finalised
pursuant to Clause 4.2
Completion Date means the date of execution of this agreement;
Confidential Information means all confidential information, financial
information and trade secrets of the Company including (without limiting
the generality) all lists, data or details of customers and suppliers and
information relating to current trading performance and future business
strategy other than:-
(i) information which is or becomes after the Completion Date generally
available in the public domain other than by the unauthorised action
of the Company;
(ii) information which comes into the possession of the Company after the
Completion Date other than by breach of a duty of confidence known
to the Company
(iii) information which the Company is obliged to disclose by any order of
any court or other competent authority;
Consideration means the aggregate consideration payable for the Contract
Shares pursuant to clause 4;
Consultancy Agreements means the agreements in the Agreed Form between the
Company and each of ▇▇. ▇▇▇▇▇▇-Menteth, ▇▇. ▇▇▇▇▇▇ and ▇▇. ▇▇▇▇▇ for their
engagement by the Company as consultants following Completion;
Contract Shares means the Datavault Contract Shares, the DHL Contract
Shares and the SSL Contract Shares;
Controlling Party means, in relation to any Vendor, (other than a Vendor
acting in the capacity of a trustee) any person, firm or company who,
whether alone or in conjunction with any other party, controls (within the
meaning of TA 1988 section 840):-
(a) any member of the group of companies of which the Vendor concerned
forms part; and/or
5
(b) the Vendor concerned;
Covenantors means ▇▇. ▇▇▇▇▇▇, Mr. Price, ▇▇. ▇▇▇▇▇▇-Menteth and ▇▇▇.
▇▇▇▇▇▇-Menteth;
Customer means a customer of the Company being a person, company or
partnership or a division of any of them or a site or location operated by
any of them (in each case) to which a unique customer code is attributed
by the Company;
Datavault Contract Shares means the shares of the Company listed in Parts
1C and 1D of the Schedule;
Datavault Directors means ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇-Menteth and ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇-Menteth;
Datavault Vendors means those persons whose names and addresses are set
out in Parts 1C, and 1D of the Schedule;
DHL means Datavault Holdings Limited, further details of which are set out
in Part 2B of the Schedule;
DHL Contract Shares means the shares of DHL listed in Part 1A of the
Schedule;
DHL Datavault Shares means the 334,829 A ordinary shares of (pound)0.10
each in the capital of the Company held by DHL;
DHL Directors means ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Stuart-Menteth and ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇-Menteth;
DHL Vendors means those persons whose names and addresses are set out in
Part 1A of the Schedule;
6
Disclosure Letter means a letter in the Agreed Form, and the documents
annexed thereto or incorporated by reference therein from the Warrantors
to the Purchaser setting out certain matters qualifying the Warranties;
Employees means the employees of the Company as at the Completion Date as
set out in the Disclosure Letter;
Environment means any land, including, without limitation, surface land
and subsurface strata, sea bed or river bed under any water as defined
below and any natural or man-made structures; water, including, without
limitation, coastal and inland waters, surface waters and ground waters
and water in drains and sewers; and air, including, without limitation,
air within buildings and other natural or man-made structures above or
below ground;
Environmental Legislation means all or any of the following having the
force of law (whether civil, criminal or administrative) namely, common
law, statute, statutory instrument, treaty, regulation, directive,
decision, by-law, circular, code, order, notice, demand, decree,
injunction, resolution or judgment of any government, quasi-government,
supranational, federal state or local government, statutory or regulatory
body or court, agency or any other person or body in any jurisdiction with
regard to the pollution or protection of the Environment or harm to or the
protection of human health or the health of animals or plants including,
without limitation, laws relating to public and workers' health and
safety, emissions, discharges or releases of chemicals, genetically
modified organisms, noise or any other pollutants or contaminants, or
industrial, radioactive, dangerous, toxic or hazardous substances, or
wastes (whether in solid, semi-solid or liquid form or in the form of a
gas or vapour) into the Environment or otherwise relating to the
manufacture, processing, use, treatment, storage, distribution, disposal,
transport or handling of such substances or wastes;
Environmental Permits means all or any permits, licences, consents,
approvals, certificates, qualifications, specifications, registrations and
other authorisations, and the filing of all notifications, reports and
assessments required under any Environmental Legislation for the
7
operation of the business of any Group Company or the occupation or use of
any premises in relation to the business of any Group Company;
ERA 1996 means the Employment Rights ▇▇▇ ▇▇▇▇;
Excess means the amount (if any) by which the Net Assets exceed the Net
Asset Target;
Expert means an independent chartered accountant (who shall act as an
expert and not as an arbiter) appointed by agreement between the
Warrantors and the Purchaser or, failing agreement within 5 Business Days
of the dispute arising, appointed on the application of either party by
the then president of the Institute of Chartered Accountants of Scotland;
FA or FA (No2) followed by a stated year means the Finance Act or Finance
(No2) Act of that year;
Finalisation Date means the date upon which:-
(a) a joint statement is signed pursuant to clause 4.2.4; or
(b) if applicable, the form and content of the Completion Balance Sheet
is finalised by an Expert pursuant to clause 4.2.5;
FSA 1986 means the Financial Services ▇▇▇ ▇▇▇▇;
General Warranties means the Warranties set out in Part 3B of the
Schedule;
Greenock Property means the premises at ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇▇▇ more particularly described in paragraph 2 of Part 5 of the
Schedule;
Group Company means the Company and its Subsidiaries;
8
Hazardous Substance means any natural or artificial substance (whether
solid, liquid, gas, noise, ion, vapour, electromagnetic or radiation, and
whether alone or in combination with any other substance) which is capable
of causing harm to or having a deleterious effect on the Environment,
being a nuisance, or which restricts or makes more costly the use,
development, ownership or occupation of any of the Properties;
IHTA 1984 means the Inheritance Tax ▇▇▇ ▇▇▇▇;
Intellectual Property Rights means all intellectual property and all
rights relating thereto in any part of the world including, without
limiting the generality of the foregoing, any patent, trade ▇▇▇▇, service
▇▇▇▇, registered design (or any application for any of the foregoing),
unregistered design right, trade name, trade secret, business name,
discovery, invention, process, formula, know-how, specification,
improvement, technique or copyright;
Letters of Credit means the letters of credit by Canadian Imperial Bank of
Commerce in favour of the Noteholders (as defined in the Loan Notes) in
the Agreed Form of all sums of principal and interest due or to become due
by the Purchaser to the Noteholders (or any of them) in respect of the
Loan Notes;
Loan Notes means the (pound)11,715,000 ▇▇▇▇▇▇ ▇▇▇▇▇ Europe Limited
Guaranteed Unsecured Loan Notes 1999-2009 to be created by the Purchaser
pursuant to a loan note instrument in the Agreed Form and issued to
certain of the Vendors at Completion as part of the Consideration as set
out in Part 1 of the Schedule;
Management Accounts means the management accounts of the Company for the
period from the Accounts Date to 31 January 1999, a copy of which is
attached and signed by the Solicitors as relative to this agreement;
Material Contract means a Material Customer Contract and/or a Material
Supplier Contract;
9
Material Customer means a Customer under a Material Customer Contract;
Material Customer Contract means any contract to which the Company is a
party with a Customer which involves sales invoiced by the Company of more
than (pound)25,000 in the period 1 April 1997 to 31 March 1998 and/or 1
April 1998 to 31 January 1999 excluding contracts within the Product Sales
Division;
Material Supplier Contract means any contract to which the Company is
currently a party (other than the leases relating to the Properties) for
the supply of goods or services to the Company (other than usual contracts
for the supply of electricity, gas, water, telephone and similar services)
which involves a liability or cost of more than (pound)25,000 in the
period 1 April 1997 to 31 March 1998 and/or 1 April 1998 to 31 January
1999;
Minor Datavault Vendors means those persons whose names and addresses are
set out in Part 1D of the Schedule;
NAV Retention Loan Notes means (pound)250,000 of the Loan Notes to be
issued to ▇▇. ▇▇▇▇▇▇-Menteth and (pound)250,000 of the Loan Notes to be
issued to ▇▇▇. ▇▇▇▇▇▇-Menteth as part of the Consideration to be held by
the Solicitors jointly in accordance with the terms of this Agreement;
Net Asset Target means (pound)630,000;
Net Assets means the consolidated assets of the Company and the
Subsidiaries less the consolidated liabilities of the Company and the
Subsidiaries as at close of business on the Completion Date as determined
from the Completion Balance Sheet;
Mr Price means ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇;
Product Sales Division means the division of the Company engaged in sales
of magnetic media and databases;
10
Property Retention Loan Notes means (pound)1,000,000 of the Loan Notes
issued to ▇▇. ▇▇▇▇▇▇-Menteth and (pound)1,000,000 of the Loan Notes to be
issued to ▇▇▇. ▇▇▇▇▇▇-Menteth as part of the Consideration to be held by
the Solicitors jointly in accordance with the terms of this Agreement;
Properties means those Leasehold properties listed in Part 5 of the
Schedule;
Purchaser Group means the group of companies of which the Purchaser forms
part from time to time;
Purchaser's Accountants means ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ of ▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇;
Purchaser's Solicitors means Cozen and ▇'▇▇▇▇▇▇, ▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇;
Schedule means the schedule attached to this agreement;
Senior Employee means an Employee whose basic annual salary is greater
than (pound)20,000;
Shortfall means the amount (if any) by which the Net Assets are less than
the Net Asset Target;
SM Jersey Trust means the Stuart-Menteth Family Trust of which the Trustee
is the sole trustee;
Solicitors means the Vendors' Solicitors and the Purchaser's Solicitors;
SSL means Silver Sky Limited, further details of which are set out in Part
2C of the Schedule;
SSL Contract Shares means the shares of SSL listed in Part 1B of the
Schedule;
11
SSL Datavault Shares means the 30,027 A ordinary shares of (pound)0.10
each in the Company held by SSL;
SSL Director means ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇;
SSL Vendors means those persons whose names and addresses are set out in
Part 1B of the Schedule;
▇▇ ▇▇▇▇▇▇-Menteth means ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇-Menteth, one of the DHL
Vendors;
▇▇▇ ▇▇▇▇▇▇-Menteth means ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇-Menteth, one of the DHL
Vendors;
Subsidiaries means Datavault Northwest Limited and Datavault Southwest
Limited details of which are set out in Part 2D of the Schedule;
Subsidiaries Directors means ▇▇ ▇▇▇▇▇▇ and ▇▇. ▇▇▇▇▇▇-Menteth;
TA 1988 means the Income and Corporation Taxes ▇▇▇ ▇▇▇▇;
Tax or Taxation means all forms of taxation and all statutory,
governmental, state, provincial, local governmental or municipal charges,
imposts, duties and levies or withholdings of any nature whatsoever to
include without limitation Corporation Tax, VAT, PAYE, NIC and Stamp Duty
(whether of the United Kingdom or elsewhere in the world, whenever imposed
and whether or not such taxation is primarily chargeable against or
attributable to any other person, firm or company) and all costs, fines,
penalties, expenses, charges and interest relating to the same;
Tax Authority means any taxing or other authority including without
limitation the Inland Revenue, Customs and Excise and the Contributions
Agency (whether within or outside the United Kingdom) competent to impose
any Tax liability;
12
Tax Covenant means a deed of covenant, in the Agreed Form, to be entered
into among the Warrantors and the Purchaser at Completion in respect of
Taxation;
Tax Warranties means the Warranties set out in Part 3B of the Schedule;
TCGA 1992 means the Taxation of Chargeable Gains ▇▇▇ ▇▇▇▇;
Threshold means (pound)200,000 (Two Hundred Thousand Pounds Sterling);
TMA 1970 means the Taxes Management ▇▇▇ ▇▇▇▇;
Toad Hall Trust means the Toad Hall Trust of which the Toad Hall Trustees
are the sole trustees;
Toad Hall Trustee means Eagle Trustees Limited incorporated in Jersey,
Channel Islands (No. 33458) having its registered office at ▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇ in its capacity as sole trustee of
the Toad Hall Trust of ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇
and not otherwise;
VAT means value added tax;
VATA 1994 means the Value Added Tax ▇▇▇ ▇▇▇▇;
Vendors' Accountants PricewaterhouseCoopers of Kintyre House, ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇ ▇▇▇;
Vendors' Solicitors means MacRoberts, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇ ▇▇▇;
Warranties means the warranties given by the Warrantors to the Purchaser
pursuant to clause 6.3 and Part 3B and 3C of the Schedule and Warranty
means any one of them;
13
Warrantors means Allerwegen, ▇▇. ▇▇▇▇▇▇-Menteth and ▇▇▇. ▇▇▇▇▇▇-Menteth;
Warranty Retention Loan Notes means (pound)500,000 of the Loan Notes to be
issued to ▇▇. ▇▇▇▇▇▇-Menteth and (pound)500,000 of the Loan Notes to be
issued to ▇▇▇. ▇▇▇▇▇▇-Menteth as part of the Consideration to be held by
the Solicitors jointly in accordance with the terms of this Agreement.
Waste means waste generally and, without limitation, includes anything
which is discarded or which the holder intends or is required to discard
and anything which is abandoned, unwanted or surplus irrespective of
whether it is capable of being recovered or recycled or has any value.
1.2 Reference to any statute or statutory provision shall include a reference
to any statute or statutory provision which amends, extends, consolidates
or replaces the same or which has been amended, extended, consolidated or
replaced by the same (save to the extent that any amendment, extension,
consolidation or replacement would impose more onerous obligations than
otherwise exist at the Completion Date) and shall include any orders,
regulations, instruments or other subordinate legislation made under the
relevant statute or statutory provision.
1.3 The singular includes the plural and vice versa and any gender includes
all genders.
1.4 Any reference to a "group of companies" is to a company, any holding
company or parent undertaking, any subsidiary or subsidiary undertaking
and any other subsidiary or subsidiary undertaking of any holding company
or parent undertaking.
1.5 Save as otherwise provided herein or as the context may otherwise require,
expressions in this agreement which are defined in the Companies Act shall
have the meanings given to them therein.
1.6 Any reference in Part 3 of the Schedule to any warranty being given to the
best of knowledge and belief, so far as the Warrantors are aware or
otherwise relating to the state of knowledge of a Warrantor shall be
deemed to an additional statement that it has been made after enquiry of
▇▇ ▇▇▇▇▇▇ [Director, North-West and South-West], Mr Price [Director
South-East, Products and Information Technology], ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ [General
Manager, Edinburgh], ▇▇▇▇ ▇▇▇▇▇▇ [General
14
Manager, Manchester], ▇▇▇▇▇ ▇▇▇▇ [General Manager, ▇▇▇▇▇▇], ▇▇▇▇▇ ▇▇▇▇
[General Manager, Bristol], ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ [General Manager, Reading],
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ [General Manager, London] and ▇▇▇▇ ▇▇▇▇ [Manager,
Information Technology] and that no further enquiry has been made.
1.7 The clause and Schedule headings are inserted for convenience and shall
not affect the construction of this agreement.
1.8 Any reference in clause 8 to being "involved", "interested" or "concerned"
means as a shareholder, director, employee, partner, proprietor,
sub-contractor, agent, consultant or in any other capacity whatsoever.
2. SALE AND PURCHASE
2.1 Each Vendor (other than the Minor Datavault Vendors) shall, as beneficial
owner, sell the Contract Shares set opposite his name in Part 1 of the
Schedule and the Purchaser shall purchase them and that, in each case,
free from all liens, charges and encumbrances and with the benefit of all
rights, privileges and advantages attached or accruing thereto.
2.2 ▇▇. ▇▇▇▇▇▇-Menteth and ▇▇▇. ▇▇▇▇▇▇-Menteth jointly and severally undertake
to the Purchaser to procure that the Minor Datavault Vendors shall, as
beneficial owners, sell the Contract Shares set opposite their names in
Part 1D of the Schedule and the Purchaser shall purchase them and that, in
each case, free from all liens, charges, and encumbrances and with the
benefit of all rights, privileges and advantages attached or accruing
thereto.
2.3 The Purchaser shall not be obliged to complete the purchase of any of the
Contract Shares unless the purchase of all of the Contract Shares is
completed simultaneously.
3. PRE-EMPTION
Each of the Vendors waives all rights of pre-emption which may be
competent to him (howsoever arising) in respect of the transfers of the
Contract Shares.
4. CONSIDERATION
4.1 The aggregate consideration for the Contract Shares shall be the sum of
(pound)21,560,000 less the Shortfall or plus the Excess (as the case may
be) allocated amongst the Vendors as set opposite their respective names
in Part 1 of the Schedule.
4.2.1 The Completion Balance sheet shall be prepared on the basis set out
in Part 6 of the Schedule;
15
4.2.2 The Warrantors shall procure that a draft of the Completion Balance
Sheet shall be prepared by the Vendors' Accountants and delivered to
the Purchaser as soon as reasonably practicable after Completion
but, in any event, within 30 Business Days following the Completion
Date. For the purpose, the Purchaser shall procure that such persons
as are nominated by the Warrantors are afforded such access to the
Company's premises, employees and accounting information as is
reasonably necessary for the preparation of the draft Completion
Balance Sheet.
4.2.3 The Purchaser shall have 30 Business Days following its receipt of
the draft Completion Balance Sheet from the Warrantors in which to
review the same. The Warrantors shall make available (and, where,
applicable, procure the availability of) all working papers relative
to the draft Completion Balance Sheet.
4.2.4 Within 10 Business Days after the expiry of the period of 30
Business Days referred to in clause 4.2.3, the Warrantors and the
Purchaser shall procure that a joint statement shall be prepared and
signed by each of them evidencing their approval of the form and
content of the Completion Balance Sheet and such statement shall be
final and binding on each of the parties hereto.
4.2.5 In the event of the draft Completion Balance Sheet not being
prepared and sent to the Purchaser in accordance with clause 4.2.2
or in the event of the joint statement referred to in clause 4.2.4
not being prepared and signed by the Warrantors and the Purchaser
within the period referred to in that clause, each of the Warrantors
and the Purchaser shall have the right to request an Expert to
resolve any matter in dispute and finalise the form and content of
the Completion Balance Sheet who shall resolve such matters within
30 Business Days of his appointment.
4.3 The NAV Retention Loan Notes shall be held jointly by the Solicitors in
accordance with the terms of this Agreement. Interest due under the NAV
Retention Loan Notes will be payable to ▇▇. ▇▇▇▇▇▇-Menteth and ▇▇▇
▇▇▇▇▇▇-Menteth in accordance with the terms thereof.
4.4 In the event of the Completion Balance Sheet disclosing a Shortfall:-
(i) the Purchaser shall cancel such amount of the NAV Retention Loan
Notes as is equal to the Shortfall and within 10 Business Days
following the Finalisation Date deliver to the
16
Vendor's Solicitors balancing loan note certificates and Letters of
Credit in respect of the balance of NAV Retention Loan Notes not so
cancelled; and
(ii) in the event that the Shortfall exceeds the amount of the NAV
Retention Loan Notes, the Warrantors jointly and severally shall be
liable to pay an amount equal to such excess to the Purchaser (by
cheque) within 10 Business Days following the Finalisation Date.
4.5 The Purchaser undertakes to each of the Vendors that, in the event of the
Completion Balance Sheet disclosing an Excess:-
(i) the Purchaser shall within 10 Business Days following the
Finalisation Date instruct the Solicitors to deliver the NAV
Retention Loan Notes to the Vendors' Solicitors on behalf of ▇▇.
▇▇▇▇▇▇-Menteth and ▇▇▇. ▇▇▇▇▇▇-Menteth; and
(ii) the Purchaser shall pay an amount in aggregate equal to the Excess
to the Vendors (by telegraphic transfer to the Vendors Solicitors to
the account referred to in Clause 5.2.6(g)) within 10 Business Days
following the Finalisation Date the Purchaser having no concern for
any payment thereof to the Vendors.
4.6 If any matter is referred to an Expert pursuant hereto, the parties
undertake to co-operate fully and timeously with such Expert and to
provide the Expert with all information which he may require. The decision
of such Expert (including his determination as to liability for costs)
shall be final and binding on the parties.
4.7 In the event that the Finalisation Date does not occur on or before 31
August 1999 the Purchaser shall instruct the Solicitors to deliver the NAV
Retention Loan Notes to the Vendors' Solicitors on behalf of ▇▇
▇▇▇▇▇▇-Menteth and ▇▇▇ ▇▇▇▇▇▇-Menteth.
4.8 Any cancellation of the NAV Retention Loan Notes or payment by the
Warrantors pursuant to Clause 4.4 shall be deemed to be a reduction in the
Consideration.
5. COMPLETION
5.1 Completion shall take place at the offices of the Vendors' Solicitors on
the Completion Date.
5.2 At Completion:-
5.2.1 The Vendors shall deliver or procure the delivery to the Purchaser
of:-
(a) in respect of the Contract Shares, transfers duly executed by
the registered holders thereof in favour of the Purchaser
and/or its nominee together with any powers of attorney
pursuant to which any such transfers have been executed;
17
(b) all share certificates in respect of the Contract Shares and
the Subsidiaries;
(c) irrevocable powers of attorney, in the Agreed Form, appointing
the Purchaser (or such other person as the Purchaser shall
direct) to exercise all voting and other rights attached to
the Contract Shares (including the appointment of proxies) and
Shares in the Subsidiaries pending registration of the
transfers;
(d) the statutory books and common seal, cheque and paying in
books (if any) of the Company, DHL, SSL and the Subsidiaries
and the leases and all ancillary documentation relating to the
Properties;
(e) a certificate of non-crystallisation, in the Agreed Form, from
the holders of the floating charges detailed in paragraph
11(A) of Part 2A of the Schedule and paragraph 11 of Part 2D
of the Schedule;
(f) releases, in the Agreed Form, from the holders of the floating
charge detailed in paragraph 11(A) of Part 2A of the Schedule
and paragraph 11 of Part 2D of the Schedule;
(g) a release of each guarantee and indemnity given by the
Company, DHL, SSL or the Subsidiaries in respect of the
obligations of a Vendor and/or his Associates;
(h) statements from each of the banks and other institutions with
which the Company, DHL, SSL or the Subsidiaries has an account
or with which the Company, DHL, SSL or the Subsidiaries has
placed funds or to which it is indebted, showing the amount
due to or by the Company, DHL, SSL or the Subsidiaries as at
close of business on the last Business Day prior to the
Completion Date, together with reconciliations of these
balances to the balance(s) shown by the cash book(s) of the
Company, DHL, SSL and the Subsidiaries such reconciliations
showing all payments into and out of such accounts which are
not reflected in such statements;
(i) written confirmation from the Vendors that there are no
subsisting guarantees given by any Group Company in their
favour or in respect of any of their indebtedness and that
none of the Vendors is indebted to any Group Company or vice
versa;
18
(j) at the premises of the Company all contractual documents,
deeds, documents of title and documents constituting security
for loans and all similar papers held by or on behalf of the
Company or any of the Group Companies; and
(k) the Tax Covenant duly executed by the Covenantors.
5.2.2 The Vendors shall procure that a meeting of the Datavault Directors
shall be held and that at such meeting:-
(a) a resolution shall be passed adopting the Bonus Award Scheme
and the letter of undertaking in the form set out in the
appendices to the rules of the Bonus Award Scheme, shall be
signed by two Datavault Directors and, following two directors
of the Purchaser countersigning these letters pursuant to
Clauses 5.2.6, the letter shall be delivered to the Vendors'
Solicitors;
(b) the transfers in respect of the Datavault Contract Shares will
be approved by the Directors for registration, without fee,
subject only to being duly stamped;
(c) the secretary of the Company and each of the Datavault
Directors shall resign from office as such and from all other
offices and employments which he may have with the Company (in
each case, with effect from the conclusion of the meeting) and
shall each deliver a letter of resignation and, where
appropriate, compromise agreement (in each case, in the Agreed
Form) to the Company and the Company and each of ▇▇.
▇▇▇▇▇▇-Menteth, ▇▇. ▇▇▇▇▇▇ and Mr. Price shall enter into the
Consultancy Agreements;
(c) such persons as shall be nominated by the Purchaser will be
appointed as secretary and additional directors of the Company
(in each case, with immediate effect);
(d) all existing mandates and authorities in favour of the
Company's bankers will be revoked and such mandates and
authorities as the Purchaser may direct shall be implemented
(in each case, with immediate effect); and
(e) the registered office of the Company is changed to such
address as the Purchaser requires.
5.2.3 The DHL Vendors shall procure that a meeting of the DHL Directors
shall be held and that at such meeting:-
19
(a) the transfers in respect of the DHL Contract Shares will be
approved by the DHL Directors for registration, without fee,
subject only to being duly stamped;
(b) the secretary of DHL and each of the DHL Directors shall
resign from office as such and from all other offices and
employments which he may have with DHL (in each case, with
effect from the conclusion of the meeting) and shall each
deliver a letter of resignation and, where appropriate,
compromise agreement (in each case, in the Agreed Form) to
DHL.
(c) such persons as shall be nominated by the Purchaser will be
appointed as secretary and additional directors of DHL (in
each case, with immediate effect);
(d) all existing mandates and authorities in favour of DHL's
bankers will be revoked and such mandates and authorities as
the Purchaser may direct shall be implemented (in each case,
with immediate effect); and
(e) the registered office of DHL is changed to such address as the
Purchaser requires.
5.2.4 The SSL Vendors shall procure that the SSL Director shall pass
resolutions to effect the following:-
(a) the transfers in respect of the SSL Contract Shares will be
approved by the SSL Director for registration, without fee;
(b) the secretary of SSL and the SSL Director shall resign from
office as such and from all other offices and employments
which he may have with SSL (in each case, with effect from the
conclusion of the meeting) and shall each deliver a letter of
resignation and, where appropriate, compromise agreement (in
each case, in the Agreed Form) to SSL.
(c) such persons as shall be nominated by the Purchaser will be
appointed as secretary and additional directors of SSL (in
each case, with immediate effect);
(d) all existing mandates and authorities in favour of SSL's
bankers will be revoked and such mandates and authorities as
the Purchaser may direct shall be implemented (in each case,
with immediate effect); and
(e) the registered office of SSL is changed to such address as the
Purchaser requires.
20
5.2.5 The Vendors shall procure that a meeting of the Subsidiaries
Directors shall be held in respect of each of the Subsidiaries and
that at such meeting:-
(a) the transfers in respect of any shares in the Subsidiaries
will be approved by the Subsidiaries Directors for
registration, without fee, subject only to being duly stamped;
(b) the secretary of each Subsidiary and each of the Subsidiaries
Directors shall resign from office as such and from all other
offices and employments which he may have with each Subsidiary
(in each case, with effect from the conclusion of the meeting)
and shall each deliver a letter of resignation and, where
appropriate, compromise agreement (in each case, in the Agreed
Form) to the relevant Subsidiary.;
(c) such persons as shall be nominated by the Purchaser will be
appointed as secretary and additional directors of each
Subsidiary (in each case with immediate effect);
(d) all existing mandates and authorities in favour of the
Subsidiaries' bankers will be revoked and such mandates and
authorities as the Purchaser may direct shall be implemented
(in each case, with immediate effect); and
(e) the registered office of each Subsidiary is changed to such
address as the Purchaser requires;
5.2.6 Subject to the implementation of the foregoing, the Purchaser shall
(a) enter into the Tax Covenant;
(b) deliver a certified copy minute of the Purchaser creating and
authorising the issue of the Loan Notes;
(c) issue the Loan Notes to the Vendors and deliver to them loan
note certificates in respect thereof (other than in respect of
the Warranty Retention Loan Notes and the NAV Retention Loan
Notes) together with certified extracts from the Register of
Noteholders completed so as to record the Vendors as the
holders of the Loan Notes;
21
(d) deliver to the Vendors the duly executed Letters of Credit
(and certified copies of any Powers of Attorney pursuant to
which such Letters of Credit were executed);
(e) deliver the Warranty Retention Loan Notes and the NAV
Retention Loan Notes (and the Letters of Credit in respect
thereof) to the joint possession of the Solicitors to be held
by them in accordance with the provisions of this Agreement;
and
(f) procure that two directors of the Purchaser sign the letter of
undertaking as set out in the appendices to the Bonus Award
Scheme; and
(g) pay to the Vendors (by telegraphic transfer to the Vendors'
Solicitors clients account with The Royal Bank of Scotland
plc, sort code 83 07 06, account number ▇▇▇▇▇▇▇▇) the sum of
(pound)9,845,000 representing the Cash Consideration (the
Purchaser having no concern for any payment thereof to the
Vendors).
5.3 The Vendors shall execute all such other documents and do all such other
acts and things as the Purchaser shall reasonably require in order to
perfect the right, title and interest of the Purchaser and/or its nominee
in and to the Contract Shares and Shares in the Subsidiaries and to
procure the registration of the Purchaser and/or its nominee as the
registered holder of the Contract Shares and shares in the Subsidiaries.
6. WARRANTIES AND REPRESENTATIONS
6.1 Each Datavault Vendor (other than the Minor Datavault Vendors) severally
represents and warrants to the Purchaser that the statements set out in
Part 3A of the Schedule in respect of such Datavault Vendor are true and
accurate.
6.2 ▇▇. ▇▇▇▇▇▇-Menteth and ▇▇▇. ▇▇▇▇▇▇-Menteth jointly and severally represent
and warrant to the Purchaser that the statements set out in Part 3A of the
Schedule (so far as they relate to the Minor Datavault Shareholders only)
are true and accurate.
6.3 The Warrantors jointly and severally represent and warrant to the
Purchaser that (save as fairly disclosed in the Disclosure Letter) the
statements set out in Parts 3B and 3C of the Schedule are true and
accurate.
6.4 The rights of the Purchaser in respect of a breach of the Warranties shall
not be affected by Completion.
22
6.5 Each of the Warrantors waives any rights or claims he may have in respect
of any misrepresentation, inaccuracy, omission in or from any information
or advice supplied or given by the Company, DHL, SSL, the Subsidiaries or,
in the absence of wilful dishonesty, any of the Employees in connection
with giving the Warranties and the preparation of the Disclosure Letter;
6.6 The Warrantors acknowledge that the Purchaser has entered into this
Agreement in reliance on the Warrantors warranting and representing in the
terms of Parts 3B and 3C of the Schedule;
6.7 No information which is not disclosed in the Disclosure Letter of which
the Purchaser has knowledge (actual, imputed or constructive) shall
prejudice any claim made by the Purchaser under the Warranties or operate
to reduce any amount recoverable under the Warranties.
6.8 The Warranty Retention Loan Notes shall be held jointly by the Solicitors
in accordance with the terms of this Agreement. Interest due under the
Warranty Retention Loan Notes will be payable to ▇▇. ▇▇▇▇▇▇-Menteth and
▇▇▇. ▇▇▇▇▇▇-Menteth in accordance with the terms thereof.
6.9 In the event of an Ascertained Claim:-
(i) the Purchaser shall cancel such amount of the Warranty Retention
Loan Notes as is equal to the amount of the Ascertained Claim; and
(ii) in the event that any Ascertained Claim exceeds the amount of the
Warranty Retention Loan Notes (or the amount of the Warranty
Retention Loan Notes outstanding after being any previous
Ascertained Claims) the Warrantors jointly and severally shall be
liable to pay an amount equal to such excess to the Purchaser (by
cheque) within 10 Business Days following the date upon which the
Ascertained Claim is finally agreed or determined.
6.10 The Purchaser shall instruct the Solicitors to release the Warranty
Retention Loan Notes (or the balance thereof remaining outstanding after
settlement of a any Ascertained Claims) to the Vendors' Solicitors on
behalf of ▇▇. ▇▇▇▇▇▇-Menteth and ▇▇▇. ▇▇▇▇▇▇-Menteth on 31 August 2001.
7. LIMITATION OF LIABILITY
7.1 The maximum aggregate liability of each Datavault Vendor pursuant to the
warranties given in Clause 6.1 and contained in Part 3A of the Schedule
shall be limited to the amount of the Consideration received by such
Datavault Vendor in respect of his Datavault Contract Shares pursuant to
this agreement;
23
7.2 The maximum aggregate liability of ▇▇. ▇▇▇▇▇▇-Menteth and ▇▇▇.
▇▇▇▇▇▇-Menteth pursuant to the warranties given in Clause 6.2 and
contained in Part 3A of the Schedule (so far as they relate to the Minor
Datavault Vendors) shall be limited to the amount of the Consideration
received by the Minor Datavault Vendors pursuant to this agreement.
7.3 The maximum aggregate liability of the Warrantors in respect of any claims
in connection with paragraphs 1 and 2 of Part 3B [General Warranties] of
the Schedule shall be limited to the amount of the Consideration received
by the Warrantors and the SSL Vendors pursuant to this agreement.
7.4 Save in respect of any claims in connection with paragraphs 1 and 2 of
Part 3B [General Warranties] of the Schedule the provisions of Part 4A and
Part 4B of the Schedule shall apply, respectively, to the liability of the
Warrantors under:-
7.4.1 the Warranties and the Tax Covenant; and
7.4.2 the General Warranties.
7.5 Without prejudice to clause 7.2, the parties acknowledge that the
provisions of the Tax Covenant will regulate the liability of the
Warrantors under the Tax Warranties as well as under the Tax Covenant.
8. UNDERTAKINGS BY THE COVENANTORS
8.1 For the purpose of assuring to the Purchaser the full benefit of the
businesses and goodwill of the Group Companies, each of the Covenantors
undertakes, by way of further consideration for the obligations of the
Purchaser under this Agreement that neither he nor any of his Associates
shall:-
8.1.1 at any time after the Completion Date, make use of or disclose to
any other person (save as required by law and then subject to clause
8.3) any Confidential Information which has:-
(a) not come into the public domain; or
(b) come into the public domain as a consequence, whether directly
or indirectly, of a breach of this clause 8.1.1;
8.1.2 at any time after Completion retain any Confidential Information all
of which shall be returned to the Company on or before the
Completion Date or if later the termination of the Consultancy
Agreement relating to the relevant Covenantor;
24
8.1.3 for thirty six months from the Completion Date, solicit or be
involved in soliciting or enticing away the employment of any
Employee, from the Company (or in the event that any part of the
business of the Company is transferred to a member of the Purchaser
Group, such member);
8.1.4 for sixty months from the Completion Date, induce or be involved in
attempting to induce any of the suppliers or other persons having
dealings with the Company at any time in the 12 months preceding the
Completion Date to cease to be suppliers to the Purchaser Group or
to have such dealings with the Purchaser Group;
8.1.5 for sixty months from the Completion Date, solicit or be involved in
soliciting, directly or indirectly in competition with the business
of the Company (or, in the event that any part of the business of
the Company is transferred to a member of the Purchaser Group, such
business of that member to the extent that such business is the same
or substantially the same as the business of the Company at
Completion), custom from any person who has been a customer of the
Company at any time in the 12 months preceding the Completion Date;
8.1.6 for thirty six months from the Completion Date, directly or
indirectly carry on be interested or concerned in any business in
the United Kingdom of the same nature or which is competitive or
likely to be competitive with any business as that carried on by the
Company at the Completion Date; or
8.1.7 at any time hereafter, use or, insofar as they can reasonably do so,
allow to be used any trade or business name used by the Company at
the Completion Date or any other name intended to be or likely to be
confused therewith.
8.2 For the purpose of clause 8.1.6, there shall be disregarded the financial
interest of any person in a class of securities which is listed on a
recognised investment exchange (as defined in FSA 1986) if that interest,
together with that of his Associates, is less than 5 per cent of that
class in aggregate.
8.3 It is expressly agreed by the parties hereto that each of the undertakings
and covenants contained in clause 8.1 shall be construed as a separate and
distinct covenant.
8.4 The undertakings given in clause 8.1 are considered by the parties to be
fair and reasonable in all the circumstances but, in the event that any
one or more of such undertakings is found to be
25
unenforceable but would be enforceable if some part thereof were deleted
or the period or area of application reduced, such undertaking shall apply
with such modifications as may be necessary to make it valid and
effective.
8.5 The parties hereto recognise that damages will not be a fully effective
remedy in respect of any breach of any of the restrictions contained in
this Clause 8 and that the Purchaser shall be entitled to apply for
injunctive relief in respect of any such breach but without prejudice to
any claim for damages in addition.
9. GUARANTEE
9.1 Subject to the limitations contained in Clauses 9.5 and 9.7 the Trustee
hereby unconditionally and irrevocably guarantees to the Purchaser on
demand by the Purchaser the full, due and punctual performance and
observation by Allerwegen of the obligations of Allerwegen pursuant to the
Warranties and the Tax Covenant. In the event of any failure by Allerwegen
pursuant to the Warranties and the Tax Covenant to perform or observe such
obligations, the Trustee shall be liable for the obligations of Allerwegen
arising thereunder as if it were a primary obligor.
9.2 The obligations of the Trustee under this Clause:-
9.2.1 shall be continuing obligations and shall not be satisfied,
discharged or affected by any intermediate payment or settlement of
account or any change in the constitution or control of, or the
insolvency of, or any liquidation, winding up or analogous
proceedings relating to, Allerwegen or any change in the terms,
conditions and undertaking on the part of Allerwegen contained in
this Agreement; and
9.2.2 shall not be discharged, prejudiced, lessened, affected or impaired
by any act, omission, incapacity or circumstance whatsoever which
but for this provision might operate to release or exonerate
Allerwegen from all or any part of such obligations or in any way
discharge, prejudice, lessen, affect or impair the same.
9.3 The obligations of the Trustee under this Clause 9 will not be affected by
any act, omission, matter or thing which, but for this provision, would
reduce, release or prejudice any of its obligations under this Clause 9 in
whole or in part, including:
9.3.1 any time or waiver granted to, or composition with, Allerwegen or
any other person; or
9.3.2 the taking, variation, compromise, exchange, renewal or release of,
or refusal or neglect to perfect, take up or enforce, any right
against, or security over assets of, Allerween, or
26
any other person, or any non-presentation or non-observance of any
formality or other requirement in respect of any instrument or any
failure to realise the full value of any security; or
9.3.3 any incapacity or lack of power, authority or legal personality of,
or dissolution, or change in members or status of, Allerwegen or any
other person; or
9.3.4 any variation (however fundamental) or replacement of this
agreement; and
9.3.5 any unenforceability, illegality or invalidity of any obligation of
any person under this agreement to the intent that the Trustee's
obligations under this clause shall remain in full force and its
guarantee be construed accordingly, as if there were no
unenforceability, illegality or invalidity.
9.4 The Trustee waives any right it may have of first requiring the Purchaser
to proceed against, or enforce any other rights or security against or
claim payment from, Allerwegen before claiming from the Trustee under this
Clause 9.
9.5 The aggregate maximum liability of the Trustee as guarantor of the
obligations of Allerwegen shall be limited to the extent of the net assets
of the SM Jersey Trust from time to time (being the assets of the SM
Jersey Trust after proper provisions for taxation and other liabilities,
costs and expenses whatever actual or contingent) ("the Trust Net
Assets");
9.6 Any right which at any time the Trustee may have as a guarantor under the
existing or future laws of the Bailiwick of Jersey to require that
recourse be had to the assets of Allerwegen before any claim is enforced
against the Trustee in respect of the obligations hereby assumed by it is
hereby abandoned and waived and Allerwegen undertakes that if at any time
the Purchaser sues the Trustee in respect of any such obligations and
Allerwegen is not sued also the Trustee shall not claim that Allerwegen be
made a party to the proceedings AND the Trustee agrees to be bound by this
present engagement whether or not the Trustee be made a party to legal
proceedings for the recovery of the amount due or owing to the Purchaser
as aforesaid by Allerwegen and whether the formalities required by any
local custom or law whether existing or future in regard to the rights or
obligations of sureties shall or shall not have been observed.
9.7 The liabilities of the Trustee under this Agreement shall at all times be
limited in accordance with the terms of Article 28(1) of the Trusts
(Jersey) Law 1984 (as amended).
27
9.8 The Trustee may distribute funds from the SM Jersey Trust to ▇▇.
▇▇▇▇▇▇-Menteth and ▇▇▇. ▇▇▇▇▇▇-Menteth (a "Trust Distribution") but to no
other person if in its absolute discretion it decides that it is
appropriate to do so. The restriction shall apply to the Trustee for a
period of [two] years following Completion provided that if within such
period a claim has been made by the Purchaser against Allerwegen pursuant
to the Warranties and/or the Tax Covenant the Trustee shall not distribute
funds from the SM Jersey Trust to persons other than ▇▇. ▇▇▇▇▇▇-Menteth or
▇▇▇. ▇▇▇▇▇▇-Menteth to the extent that in doing so the aggregate of the
Trust Net Assets and the amounts distributed by the Trustees to ▇▇.
▇▇▇▇▇▇-Menteth and ▇▇▇. ▇▇▇▇▇▇-Menteth are less than the amount of that
claim.
10. TIME OF THE ESSENCE
Time is of the essence as regards any date or period mentioned in this
agreement.
11. EXPENSES
Each of the Vendors and the Purchaser shall meet his own costs, charges
and expenses in connection with the negotiation, preparation, execution
and completion of this agreement and no Group Company, DHL or SSL shall
have any liability in respect of them.
12. ANNOUNCEMENTS
Subject to clause 12.2 and other than as required by law or by any
competent regulatory body, no announcement or press or other media release
regarding the sale and purchase of the Contract Shares may be made unless
the form and content thereof is agreed between ▇▇ ▇▇▇▇▇▇ Menteth and the
Purchaser and, in particular, no details of the Consideration shall be
contained in any such announcement.
12.2 Following Completion, the Purchaser shall be entitled to issue
notification, in the Agreed Form, of the sale and purchase of the Contract
Shares to all employees, customers, suppliers and other persons having
dealings with the Company.
13. ASSIGNATION
12.1 The Purchaser shall be entitled to assign the whole or any part of its
right, title and interest in and to this agreement to any member of the
Purchaser Group but not otherwise. The Vendors shall not be entitled to
assign their rights or obligations under this agreement.
28
14. NOTICES
14.1 Any notice required to be given by any party hereto to any other shall be
deemed validly served if served by:-
14.1.1 prepaid registered letter post addressed as set out in Part 1 of
the Schedule (in the case of the Vendors or Warrantors) and to the
address set out in Clause 14.2 (in the case of the Purchaser) or
to such other address in the United Kingdom as may, from time to
time, be notified in writing to all the other parties for this
purpose;
14.1.2 personal delivery by hand to such address; or
14.1.3 by facsimile to the number of the recipient (if any) set out in
Part 1 of the Schedule (in the case of the Vendors or Warrantors)
and to the number set out in clause 14.2 or such other number as
may, from time to time, be notified in writing to all other
parties for this purpose.
together (in the case of the Vendors or Warrantors) with a copy of the
Vendors' Solicitors marked for the urgent attention of JWM and any notice
so served shall be deemed to have been served:-
(a) in the case of 14.1.1, two Business Days after posting the same;
(b) in the case of 14.1.2, upon delivery; and
(c) in the case of 14.1.3, two hours after it is sent (if sent before
3.00 p.m. on a Business Day) or 10.00 a.m. on the following
Business Day in any other case.
In proving service, it shall be sufficient to prove that the notice was
properly addressed and posted or that delivery took place or that the
facsimile message was addressed to the recipient's facsimile number and
was properly transmitted (as the case may be).
14.2 Any notice posted, delivered or sent by facsimile to the Purchaser in
accordance with clause 13.1 shall be addressed as follows:-
▇▇▇▇▇▇ ▇▇▇▇▇ Europe Limited
c/o ▇▇▇▇▇▇ ▇▇▇▇▇ Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇
▇▇ ▇▇▇▇▇▇▇
Facsimile no.: 001 610 992 8394
and marked for the attention of the President.
29
15. GENERAL
15.1 Insofar as not implemented on the Completion Date, this agreement shall
remain in full force and effect.
15.2 Neither this agreement nor any documents referred to herein shall be
capable of variation unless such variation shall be made in writing and be
signed by each of the parties.
15.3 No waiver by any party of any of the requirements hereof or of any of his
rights hereunder shall be effective unless given in writing and signed by
or on behalf of that party and no forbearance, delay or indulgence by any
party in enforcing the provisions of this agreement shall prejudice or
restrict the rights of that party nor shall any waiver by any party of any
of the requirements hereof or any of his rights hereunder release the
other(s) from full performance of their obligations stated herein.
15.4 The Purchaser may release or compromise the liability of any of the
Vendors or Warrantors under this agreement or grant to any Vendor or
Warrantor time or other indulgence without affecting the liability of any
other Vendor or Warrantor hereunder.
15.5 The rights and remedies provided in this agreement are cumulative and not
exclusive of any rights or remedies otherwise provided by law.
15.6 Each provision of this agreement shall be construed separately and (save
as otherwise expressly provided herein) none of the provisions hereof
shall limit or govern the extent, application or construction of any other
of them and, notwithstanding that any provision of this agreement may
prove to be unenforceable, the remaining provisions of this agreement
shall continue in full force and effect.
15.7 This agreement and any document referred to as being in the Agreed Form
constitute the entire agreement in relation to the subject matter thereof
among the parties and supersede any previous agreement among the parties.
15.8 In the event of default by any party in paying any monies due under this
agreement, the defaulting party shall pay interest thereon at the rate of
4% per annum above the base rate for the time being of The Royal Bank of
Scotland plc and that from the date of default until all such monies (and
all interest thereon) have been paid in full.
15.9 All sums payable by the Purchaser hereunder shall be paid in full without
any set-off or counterclaim.
30
16. TOAD HALL TRUSTEES
16.1 The aggregate maximum liability of the Toad Hall Trustee under this
Agreement shall be limited to the extent of the net assets of the Toad
Hall Trust from time to time (being the assets of the Toad Hall Trust
after proper provisions for taxation and other liabilities, costs and
expenses whatever actual or contingent.
16.2 The liabilities of the Toad Hall Trustee under this Agreement shall at
all times be limited in accordance with the terms of Article 28(1) of
the Trusts (Jersey) Law 1984 (as amended),
17. SPECIFIC UNDERTAKINGS
17.1.1 The Warrantors jointly and severally undertake to the Purchaser that in
the event that the Company becomes liable for local authority rates as a
result of the Company's occupation of the Greenock Property at any time
prior to 30 April 2001 then the Warrantors shall pay to the Purchaser
(either by way of cancellation of an equal number of the Loan Notes or
by a payment in cash to the Purchaser at the election of the Warrantors)
an amount equal to such liability for local authority rates in respect
of the period ending on 31 March 2000; but in respect of the period from
28 February 1999 to 31 March 2000 excluding such amount as is
attributable to any change in the nature of the Company's occupation of
the Greenock Property.
17.1.2 The Purchaser shall not (and shall ensure that the Company shall not)
make any enquiries to or have any contact with the relevant rating
authority in relation to the business rates on the Greenock Property. In
the event that the Purchaser or the Company receives any communication
from the rating authority the Purchaser shall notify ▇▇. ▇▇▇▇▇▇-Menteth
forthwith, and the Purchaser shall (or shall ensure that the Company
shall) fully delegate the negotiation of the liability of the Company
for rates in respect of the Greenock Property to ▇▇. ▇▇▇▇▇▇-Menteth. ▇▇.
▇▇▇▇▇▇-Menteth will consult fully with the Purchaser in respect of such
negotiations. The Warrantors shall be liable for any professional costs
incurred in such negotiations with the Rating Authority.
17.1.3 The Warrantors shall not be liable to the Purchaser pursuant to this
Clause 17.1 to the extent that the Purchaser fails to comply with its
obligations pursuant to this Clause.
17.1.4 The remedy provided by this clause 17.1 shall be the sole remedy
available to the Purchaser under this Agreement (including without
limitation the Warranties) and/or the Tax Covenant
31
arising from or relating to the failure by the Company to have paid
rates in respect of the Greenock Property.
17.2.1 The Warrantors jointly and severally undertake to the Purchaser to pay
to the Purchaser in accordance with the terms of Clause 17.2.2 only an
amount of (pound)2,000,000 in the event that on or before 28 February
2003:- the Company is prevented from carrying on its business (as
carried on by it at the Completion Date) from the Greenock Property as a
result of an enforcement notice, stop notice, interdict or an order
having equivalent effect issued by the relevant planning authority in
respect of the Greenock Property directly as a result of failure to have
or obtain planning permission (whether temporary or permanent) for the
occupation of the Greenock Property by the Company for the carrying on
of the business of the Company as carried on by it at the Completion
Date;
17.2.2 In the event of a successful claim by the Purchaser pursuant to Clause
17.2.1 the Purchaser shall cancel the Property Retention Loan Notes.
Such cancellation shall be deemed to be a reduction of the
Consideration.
17.2.3 In the event that there is no successful claim by the Purchaser pursuant
to clause 17.2.1 on or before 28 February 2003 or, if earlier, ▇▇.
▇▇▇▇▇▇-Menteth has obtained the requisite planning permission pursuant
to Clause 17.2.5 the Purchaser shall instruct the Solicitors to release
the Property Retention Loan Notes to the Vendors' Solicitors on behalf
of ▇▇. ▇▇▇▇▇▇-Menteth and ▇▇▇. ▇▇▇▇▇▇-Menteth forthwith.
17.2.4 Interest due under the Property Retention Loan Notes will be payable to
▇▇. ▇▇▇▇▇▇-Menteth and ▇▇▇. ▇▇▇▇▇▇-Menteth in accordance with the terms
thereof;
17.2.5 The Warrantors and the Purchaser agree that ▇▇. ▇▇▇▇▇▇-Menteth shall be
instructed on behalf of the Company (and the Purchaser shall procure
that ▇▇. ▇▇▇▇▇▇-Menteth is so instructed by the Company) to seek
permanent, or failing which temporary, planning permission (to be
decided in the discretion of ▇▇. ▇▇▇▇▇▇-Menteth acting reasonably) for a
period of four years (commencing from the Completion Date), for change
of use of the Greenock Property to permit the Company to occupy the
Greenock Property for the conduct of its business as carried on by it at
the Completion Date. ▇▇ ▇▇▇▇▇▇-Menteth shall use all reasonable
endeavours to submit an appropriate application for such planning
permission by 30 September 1999 and will keep the Purchaser fully
informed as to the progress of such application. The Purchaser shall
ensure that
32
the Company gives full assistance to the Warrantors in relation to the
pursuit of such planning change of use. ▇▇. ▇▇▇▇▇▇-Menteth shall be
liable for all professional fees incurred in relation to obtaining any
such change of use.
17.2.6 The Warrantors shall not be liable under this clause in the event of the
Purchaser failing to fulfil its obligations pursuant to this Agreement.
17.2.7 The remedy provided by this clause 17.2 shall be the sole remedy
available to the Purchaser pursuant to this Agreement (including without
limitation the Warranties) and/or the Tax Covenant arising from or
relating to the failure of the Company to have appropriate planning
permission in respect of the Greenock Property.
17.2.8 In the event of the occurrence of the event set out in Clause 17.2.lMr.
Stuart-Menteth shall be liable for the future rights and obligations of
the Company under the agreement relating to the Greenock Property
referred to in paragraph 2 of Part 5 of the Schedule ("the Greenock
Agreement") with effect from the New Property Date. Subject to obtaining
the consent of the landlord of the Greenock Property on terms acceptable
to the Purchaser and ▇▇. ▇▇▇▇▇▇-Menteth (both parties being obliged to
act reasonably in determining the acceptability of such terms) the
Purchaser shall grant and ▇▇. ▇▇▇▇▇▇-Menteth shall accept (without
consideration) an assignation of the rights and obligations of the
Company under the Greenock Agreement with effect from the New Property
Date. ▇▇. ▇▇▇▇▇▇-Menteth shall have no liability (and the Purchaser
shall procure that he shall be indemnified to his reasonable
satisfaction) in respect of any breaches or failures to comply with the
terms of the Greenock Agreement in the period prior to the New Property
Date. Both parties shall use all reasonable endeavours to obtain the
consent of the Landlords to such assignation as soon as reasonably
practicable following the occurrence of the event set out in Clause
17.2.1 In the event that such consent is not obtained the Purchaser
shall ensure that the Company shall hold all its rights in respect of
the Greenock Property on trust for ▇▇. ▇▇▇▇▇▇-Menteth and shall comply
with all reasonable requests of ▇▇. ▇▇▇▇▇▇-Menteth in relation to the
Greenock Property including without limitation, the sub-letting or
further assignation of the rights and obligations in respect thereof.
17.2.9 For the avoidance of doubt in the event of the planning permission
referred to in Clause 17.2.2 being obtained prior to the event referred
to in Clause 17.2.1 occurring the Warrantors shall have no further
liability under this Clause 17.2.
33
17.2.10 In this Clause the New Property Date shall mean the date upon which the
Company shall, following the occurrence of the event set out in Clause
17.2.1, commence paying rent (and not a concessionary rent) on the
property occupied by it as a replacement for the Greenock Property. The
Purchasers shall ensure that the Company uses all reasonable endeavours
to ensure that the New Property Date takes place as late as possible.
18. GOVERNING LAW AND SUBMISSION TO JURISDICTION
This agreement shall be construed and receive effect in accordance with
the law of Scotland and, in so far as not already subject thereto, the
parties hereto submit to the non-exclusive jurisdiction of the Scottish
courts.
IN WITNESS WHEREOF these presents consisting of this and the preceding 32 pages
and the Schedule annexed and subscribed as relative hereto are executed as
follows;-.
Signed on behalf of ALLERWEGEN HOLDINGS
BV by its duly authorised attorney ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ in the presence of:-
Witness /s/ ▇▇▇▇▇▇ ▇▇▇▇ /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
(as attorney)
Name ▇▇▇▇▇▇ ▇▇▇▇
Address ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
Signed by ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇-MENTETH in the presence of
Witness /s/ ▇▇▇▇▇▇ ▇▇▇▇ /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇-Menteth
Name ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
Signed on behalf of ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇-MENTETH in the presence of:-
Witness /s/ ▇▇▇▇▇▇ ▇▇▇▇ /s/ N Stuart-Menteth
Name ▇▇▇▇▇▇ ▇▇▇▇
Address ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
34
Signed on behalf of EAGLE TRUSTEES LIMITED
as Trustee for the Toad Hall Trust by its duly
authorised attorney ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ in the
presence of:-
Witness /s/ ▇▇▇▇▇▇ ▇▇▇▇ /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
(as attorney)
Name ▇▇▇▇▇▇ ▇▇▇▇
Address ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
Signed on behalf of ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ by his
duly authorised attorney ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Stuart-Menteth in the presence of:-
Witness /s/ ▇▇▇▇▇▇ ▇▇▇▇ /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Stuart-Menteth
(Attorney)
Name ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
Signed on behalf of ▇▇▇▇▇ ▇▇▇▇ by his duly
authorised attorney ▇▇▇▇ ▇▇▇▇▇▇ in the presence
of:-
Witness /s/ ▇▇▇▇▇▇ ▇▇▇▇ /s/ ▇▇▇▇ ▇▇▇▇▇▇ (Attorney)
Name ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
Signed on behalf of ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ by
her duly authorised attorney ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
in the presence of:-
Witness /s/ ▇▇▇▇▇▇ ▇▇▇▇ /s/ ▇▇▇▇ ▇▇▇▇▇▇ (Attorney)
Name ▇▇▇▇▇▇ ▇▇▇▇
Address ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
Signed by ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ in the
presence of:-
Witness /s/ ▇▇▇▇▇▇ ▇▇▇▇ /s/ ▇▇▇▇ ▇▇▇▇▇▇ (Attorney)
Name ▇▇▇▇▇▇ ▇▇▇▇
Address ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
35
Signed by ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ and
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ (acting by
her duly authorised attorney ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇)
as trustees of THE ▇▇▇▇ ▇▇▇▇▇▇ TRUST in the
presence of:- /s/ ▇▇▇▇ ▇▇▇▇▇▇
Witness /s/ ▇▇▇▇▇▇ ▇▇▇▇ /s/ ▇▇▇▇ ▇▇▇▇▇▇ (Attorney)
Name ▇▇▇▇▇▇ ▇▇▇▇
Address ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
Signed by ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ and
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ (acting by
her duly authorised attorney ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇)
as trustees of THE ▇▇▇▇▇▇ FAMILY TRUST in
the presence of:- /s/ ▇▇▇▇ ▇▇▇▇▇▇
Witness /s/ ▇▇▇▇▇▇ ▇▇▇▇ /s/ ▇▇▇▇ ▇▇▇▇▇▇ (Attorney)
Name ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
Signed on behalf of ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇ (by her duly authorised attorney ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇) in the presence of:-
Witness /s/ ▇▇▇▇▇▇ ▇▇▇▇ /s/ ▇▇▇▇ ▇▇▇▇▇▇ (Attorney)
Name ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
Signed on behalf of ▇▇▇▇▇ ▇▇▇▇ by his duly
authorised attorney ▇▇▇▇ ▇▇▇▇▇▇ in the presence
of:-
Witness /s/ ▇▇▇▇▇▇ ▇▇▇▇ /s/ ▇▇▇▇ ▇▇▇▇▇▇ (Attorney)
Name ▇▇▇▇▇▇ ▇▇▇▇
Address ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
Signed on behalf of FLEUR ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ by
her duly authorised attorney ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇-Menteth in the presence of -
Witness /s/ ▇▇▇▇▇▇ ▇▇▇▇ /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇-Menteth
(Attorney)
Name ▇▇▇▇▇▇ ▇▇▇▇
Address ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
36
Signed on behalf of ▇▇▇▇▇▇ ▇▇▇▇▇▇ by her duly
authorised attorney ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Stuart-Menteth in the presence of:-
Witness /s/ ▇▇▇▇▇▇ ▇▇▇▇ /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Stuart-Menteth
(Attorney)
Name ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
Signed on behalf of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ by his duly authorised attorney
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇-Menteth in the presence
of:-
Witness /s/ ▇▇▇▇▇▇ ▇▇▇▇ /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇-Menteth
(Attorney)
Name ▇▇▇▇▇▇ ▇▇▇▇
Address ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
Signed on behalf of ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ by her
duly authorised attorney ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Stuart-Menteth in the presence of:-
Witness /s/ ▇▇▇▇▇▇ ▇▇▇▇ /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Stuart-Menteth
(Attorney)
Name ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
Signed on behalf of ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ by her
duly authorised attorney ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇-Menteth in the presence of:-
Witness /s/ ▇▇▇▇▇▇ ▇▇▇▇ /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇-Menteth
(Attorney)
Name ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
Signed on behalf of ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ by his duly
authorised attorney ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Stuart-Menteth in the presence of:
Witness /s/ ▇▇▇▇▇▇ ▇▇▇▇ /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Stuart-Menteth
(Attorney)
Name ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
Signed on behalf of ▇▇▇▇▇▇ ▇▇▇▇▇ by his duly
authorised attorney ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇-Menteth in the presence of:
Witness /s/ ▇▇▇▇▇▇ ▇▇▇▇ /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇-Menteth
(Attorney)
Name ▇▇▇▇▇▇ ▇▇▇▇
Address ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
37
Signed on behalf of ▇▇▇▇▇ ▇▇▇▇▇▇-MENTETH by
her duly authorised attorney ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Stuart-Menteth in the presence of:-
Witness /s/ ▇▇▇▇▇▇ ▇▇▇▇ /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Stuart-Menteth
(Attorney)
Name
Address
Signed on behalf of ▇▇▇▇▇ ▇▇▇▇▇▇-MENTETH by
her duly authorised attorney ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Stuart-Menteth in the presence of:-
Witness /s/ ▇▇▇▇▇▇ ▇▇▇▇ /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Stuart-Menteth
(Attorney)
Name
Address
Signed on behalf of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ by his
duly authorised attorney ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Stuart-Menteth in the presence of:-
Witness /s/ ▇▇▇▇▇▇ ▇▇▇▇ /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Stuart-Menteth
(Attorney)
Name
Address
Signed on behalf of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ by her
duly authorised attorney ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Stuart-Menteth the presence of:-
Witness /s/ ▇▇▇▇▇▇ ▇▇▇▇ /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Stuart-Menteth
(Attorney)
Name
Address
Signed on behalf of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ by his
duly authorised attorney ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ in the presence of:-
Witness /s/ ▇▇▇▇▇▇ ▇▇▇▇ /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
(ATTORNEY)
Name
Address
Signed on behalf of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
by his duly authorised attorney ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ in the presence of:-
Witness /s/ ▇▇▇▇▇▇ ▇▇▇▇ /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
(ATTORNEY)
Name
Address
38
Signed on behalf of ▇▇▇▇▇▇ ▇▇▇▇▇ EUROPE
LIMITED by ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ director /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
and ▇▇▇▇ ▇▇▇▇▇▇▇▇ director/secretary -----------------------------
Director
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
-----------------------------
Director/Secretary
Signed on behalf of EAGLE TRUSTEES LIMITED
as sole trustee of THE STUART-MENTETH
FAMILY TRUST by its duly authorised attorney
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ in the presence of:-
Witness /s/ ▇▇▇▇▇▇ ▇▇▇▇ /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
(as attorney)
Name
Address
39
THIS IS THE SCHEDULE REFERRED TO IN THE FOREGOING AGREEMENT AMONG ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ STUART-MENTETH AND OTHERS (1) ▇▇▇▇▇▇ ▇▇▇▇▇ EUROPE LIMITED (2) and EAGLE
TRUSTEES LIMITED AS THE SOLE TRUSTEES OF THE STUART-MENTETH FAMILY TRUST(3)
SCHEDULE
PART 1
The Vendors
Part 1A
The DHL Vendors
Name & Address No. of Shares in DHL Class of Shares Share of Loan Notes Cash
in DHL Consideration ((pound)) ((pound))
((pound))
Allerwegen Holdings B.V. 498 Ordinary shares of 7,944,391 Nil 7,944,391
(pound)1 each
Registered Office:-
ABN Amro Trust Company
(Nederland) ▇.▇.
'▇▇▇▇▇▇'
▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ Floor ZX
Amsterdam
The Netherlands
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇-Menteth 251 Ordinary shares of 4,004,101 4,004,101 Nil
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (▇▇▇▇▇)▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇
40
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇-Menteth 251 Ordinary shares of 4,004,101 4,004,101 Nil
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (▇▇▇▇▇)▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇
Part 1B
The SSL Vendors
Name & Address No. of Shares in SSL Class of Shares Share of Loan Notes Cash
in SSL Consideration ((pound)) ((pound))
((pound))
Eagle Trustees Limited* 2 Ordinary Shares of 1,460,955 Nil 1,460,955
As trustee for the Toad Hall Trust (pound)1 each
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇
▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇
* 1 of these shares held by nominee, Eagle Nominees Limited of ▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇
41
Part 1C
The Datavault Vendors
Name & Address No. of Shares in the Class of Shares Share of Loan Notes Cash
Company in the Company Consideration ((pound)) ((pound))
((pound))
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ 500 A Ordinary Shares 24,326 16,542 7,784
The House of (pound)0.10 each
Lochmaben Road
▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇ 4,935 A Ordinary Shares 240,102 227,939 12,163
▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ of (pound)0.10 each
Hemleaze
▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ 450 A Ordinary Shares 21,894 Nil 21,894
of (pound)0.10 each
▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 35,754 A Ordinary Shares 1,739,539 1,720,393 19,146
Parsonage Farm of (pound)0.10 each
▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇
▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
42
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ and 15,547 A Ordinary Shares 756,408 756,408 Nil
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ of (pound)0.10 each
as trustees of the ▇▇▇▇ ▇▇▇▇▇▇ Trust
Parsonage Farm
Crosscombe
Dinder
▇▇ ▇▇▇▇▇
Somerset BA5 2PE
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ and 5,183 A Ordinary Shares 252,168 Nil 252,168
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ of (pound)0.10 each
as trustees of the ▇▇▇▇▇▇ Family Trust
▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇
▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 1,500 A Ordinary Shares 72,980 48,653 24,327
Parsonage Farm of (pound)0.10 each
Crosscombe
▇▇▇▇▇▇
▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇ 3,336 A Ordinary Shares 162,307 154,279 8,028
▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ of (pound)0.10 each
Hemleaze
▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇ ▇▇▇
Fleur ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 165 A Ordinary Shares 8,028 Nil 8,028
▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ of (pound)0.10 each
Hemleaze
▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇ ▇▇▇
43
▇▇▇▇▇▇ ▇▇▇▇▇▇ 500 A Ordinary Shares 24,327 17,029 7,298
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ of (pound)0.10 each
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 500 A Ordinary Shares 24,327 18,245 6,082
▇▇▇▇▇▇▇▇ of (pound)0.10 each
▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 500 A Ordinary Shares 24,327 18,245 6,082
Broadlie House of (pound)0.10 each
Dalry
Ayrshire
▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 350 A Ordinary Shares 17,029 9,731 7,298
Camilla of (pound)0.10 each
▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇
▇▇▇▇
▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 150 A Ordinary Shares 7,298 Nil 7,298
Camilla of (pound)0.10 each
▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇
▇▇▇▇
▇▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇ 500 A Ordinary Shares 24,327 17,029 7,298
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ of (pound)0.10 each
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
44
▇▇▇▇▇ ▇▇▇▇▇▇-Menteth 2,400 A Ordinary Shares 116,767 116,767 Nil
Monkcastle House of (pound)0.10 each
Kilwinning
▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇-Menteth 2,400 A Ordinary Shares 116,767 116,767 Nil
Monkcastle House of (pound)0.10 each
Kilwinning
▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 1,850 A Ordinary Shares 90,008 82,710 7,298
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ of (pound)0.10 each
▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 150 A Ordinary Shares 7,298 Nil 7,298
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ of (pound)0.10 each
▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 1,595 A Ordinary Shares 77,601 69,817 7,784
Hollybrook of (pound)0.10 each
Spring ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ 160 A Ordinary Shares 7,784 Nil 7,784
Hollybrook of (pound)0.10 each
Spring ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
45
Part 1D
▇▇▇▇▇▇ ▇▇▇▇▇▇-Menteth 3,400 A Ordinary Shares 165,420 158,122 7,298
Monkcastle House of (pound)0.10 each
Kilwinning
▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇-Menteth 3,400 A Ordinary Shares 165,420 158,122 7,298
Monkcastle House of (pound)0.10 each
Kilwinning
▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
------------------------------------------------------------------------------------------------------------------------------
Total - - 21,560,000 11,715,000 9,845,000
* Held by nominee -- The Shareholding & Investment Trust Limited a/c
designation SS-M, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇ ▇▇▇
** Held by nominee -- The Shareholding & Investment Trust Limited a/c
designation HS-M, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇ ▇▇▇
46
PART 2
Part 2A
The Company
1. Name Datavault Limited
2. Date of Incorporation: 29 October 1982
3. Former names and dates Lorami Limited -- 21 September 1983
of Changes: Omnix Systems (Glasgow) Limited -- 18 September
1986
Re-registered as a public company -- 7 September
1995 Re-registered as a private company -- 24
November 1998
4. Registered Number: 80642
5. Registered Office: ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇
6. Authorised Share (pound)450,000 comprising 1,500,000 A ordinary
Capital: shares of (pound)0.10 each; 1,500,000 B ordinary
shares of (pound)0.10 each and 1,500,000 C
ordinary shares of (pound)0.10 each
7. Issued Share (pound)45,008.10 comprising 450,081 A ordinary
Capital: shares of(pound)0.10 each
8. Directors: ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Stuart-Menteth
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇-Menteth
9. Secretary: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Stuart-Menteth
10. Auditors: PricewaterhouseCoopers, ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇ ▇▇▇
11. Charges: (A) 9 February 1987 Bond and Floating
Charge created, registered 24 February
1987. Amount secured -- all sums due or
to become due from the Company to the
chargee. Property charged --
undertaking and all property and assets
present and future of the Company
including uncalled capital. Persons
entitled to the charge -- the Royal
Bank of Scotland plc at ▇▇ ▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇.
(B) 3 December 1996 Rent Deposit Deed
created, registered 23 December 1996.
Amount secured -- all sums doe or to
become due. Property charged -- 3
months rent under a lease dated 3rd
December 1996 between the Landlord and
Datavault plc. Persons entitled to the
charge -- Derwent Valley Property
Investments Limited at ▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇
47
Part 2B
DHL
1. Name: Datavault Holdings Limited
2. Date of Incorporation: 25th September 1998
3. Former names and Kelwade Limited, 2nd December 1998.
dates of Changes:
4. Registered Number: 3638141
5. Registered Office: ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇
6. Authorised Share (pound)1,000
Capital:
7. Issued Share (pound)1,000
Capital:
8. Directors: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇-Menteth
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇-Menteth
9. Secretary: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Stuart-Menteth
10. Auditors: None
11. Charges: None
Part 2C
SSL
1. Name: Silver Sky Limited
2. Date of Incorporation: 19 November 1998
3. Former names and None
dates of Changes:
4. Registered Number: 73000
5. Registered Office: ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ Helier, Jersey, JE 1 4HU
6. Authorised Share (pound)10,000
Capital:
7. Issued Share (pound)2
Capital:
8. Directors: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
9. Secretary: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Stuart-Menteth
10. Auditors: None
11. Charges: None
48
Part 2D
The Subsidiaries
1. Name: Datavault Northwest Limited
2. Date of Incorporation: 3rd February 1993
3. Former names and None
dates of Changes:
4. Registered Number: 142441
5. Registered Office: ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇
6. Authorised Share (pound)150,000
Capital:
7. Issued Share (pound)150,000
Capital:
8. Directors: ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇-Menteth
9. Secretary: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Stuart-Menteth
10. Auditors: None.
11. Charges: Bond and Floating Charge in favour of the Royal
Bank of Scotland plc, created 10th December 1993,
registered 24th December 1993, for all sums due or
to become due, over the whole undertaking and
property and assets of the company, present and
future.
1. Name: Datavault Southwest Limited
2. Date of Incorporation: 3rd March 1992
3. Former names and None
dates of Changes:
4. Registered Number: 2693403
5. Registered Office: c/▇ ▇▇▇▇▇ & Co, ▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
6. Authorised Share (pound)150,000
Capital:
7. Issued Share (pound)150,000
Capital:
8. Directors: ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇-Menteth
9. Secretary: ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
10. Auditors: None
49
11. Charges: None
50
PART 3A
Warranties by the Datavault Vendors
1. There is no subsisting right to acquire or right of first refusal over
nor any security or encumbrance on, over or affecting the Datavault
Contract Shares set opposite his name in Part 1C or 1D (as the case may
be) of the Schedule and there is no commitment to give or create any of
the foregoing and no claim has been made by any person to be entitled to
any of the foregoing.
2. He is entitled to sell and transfer the full legal and beneficial
ownership in the Datavault Contract Shares set opposite his name in Part
1C or 1D (as the case may be) of the Schedule to the Purchaser on the
terms set out in this Agreement.
51
PART 3B
The General Warranties
1. INFORMATION AND CAPACITY
1.1 All information contained in the recitals to this agreement and parts 1
and 2 of the Schedule is true and accurate.
1.2 The print of the memorandum and articles of association of the Company,
DHL, SSL and the Subsidiaries annexed to the Disclosure Letter is
accurate and complete in all respects and includes copies of all
resolutions and agreements which require to be attached thereto in terms
of section 380(2) of the Companies Act.
1.3 Each of the DHL Vendors, the Trustee and the SSL Vendors has the
requisite power and authority to enter into and perform this Agreement.
1.4 This agreement constitutes binding obligations of the DHL Vendors, the
Trustee and the SSL Vendors in accordance with their respective terms.
1.5 The execution and delivery of, and the performance by the DHL Vendors,
the Trustee and the SSL Vendors of their respective obligations under,
this agreement will not:-
(i) result in a breach of any provision of the memorandum or
articles of association of any of the DHL Vendors or SSL
Vendors;
(ii) result in a breach of, or constitute a default under, any
instrument to which any of the DHL Vendors, the Trustee or the
SSL Vendors is a party or by which any of the DHL Vendors, the
Trustee or the SSL Vendors is bound; or
(iii) result in a breach of any order, judgment or decree of any court
or governmental agency to which the DHL Vendors, the Trustee or
the SSL Vendors is a party or by which any of the DHL Vendors,
the Trustee or the SSL Vendors is bound; or
(iv) result in a breach or constitute a default under the Toad Hall
Trust.
2. THE CONTRACT SHARES
2.1 The Datavault Contract Shares, the DHL Datavault Shares and the SSL
Datavault Shares constitute the whole of the allotted and/or issued
share capital of the Company.
2.2 The DHL Contract Shares constitute the whole of the allotted and/or
issued share capital of DHL.
2.3 The SSL Contract Shares constitute the whole of the allotted and/or
issued share capital of SSL.
52
2.4 There is no subsisting right to acquire right of refusal over nor any
security or encumbrance on, over or affecting, any share whether or not
allotted or issued at the date hereof or loan capital of the Company,
DHL or SSL, there is no commitment to give or create any of the
foregoing and no claim has been made by any person to be entitled to any
of the foregoing.
2.5 The DHL Vendors are entitled to sell and transfer the full legal and
beneficial ownership in the DHL Contract Shares to the Purchaser on the
terms set out in this agreement.
2.6 The SSL Vendors are entitled to sell and transfer the full legal and
beneficial ownership in the SSL Contract Shares to the Purchaser on the
terms set out in this Agreement.
3. DHL and SSL
3.1 DHL has not traded since its incorporation, has not entered into any
agreements and has no assets (other than the DHL Datavault Shares) and
no liabilities actual or contingent (other than the DHL Contract
Shares), all of which have been fully paid.
3.2 SSL has not traded since its incorporation, has not entered into any
agreements and has no assets (other than the SSL Datavault Shares) or
liabilities actual or contingent (other than the SSL Contract Shares),
all of which have been fully paid.
4. SUBSIDIARIES
4.1 The Company has not at any time had any subsidiaries or subsidiary
undertakings other than the Subsidiaries and the Company has not at any
time been a subsidiary or subsidiary undertaking of another body
corporate other than DHL.
4.2 The Company does not hold or own any share or other capital (and is not
otherwise a member) of any company or corporation (other than the
Subsidiaries) and is not a member of any partnership or unincorporated
company or association.
4.3 The legal and beneficial ownership of all the issued share capital of
the Subsidiaries is vested in the Company.
4.4 Neither of the Subsidiaries are currently trading and have no
outstanding liabilities actual or contingent other than to the Company.
5. CONTRACTS AND LIABILITIES
5.1 There are attached to the Disclosure Letter a true copy of or a
description (which does not omit any material right or obligation) of
the following:-
53
(a) every contract to which the Company is a party falling within
any of the following descriptions and which is in force or
outstanding in any respect, namely:-
(i) every Material Customer Contract;
(ii) every Material Supplier Contract;
(iii) contracts entered into otherwise than in the ordinary
course of trading;
(iv) contracts with agents or distributors;
(v) contracts with any of the Vendors and/or an Associate of
a Vendor (other than contracts of employment);
(vi) hire, hire-purchase, lease and similar agreements in
respect requiring payments in excess of (pound)2,000 per
annum; or
(vii) every joint venture agreement or arrangement under which
it is to participate with any other person in any
business.
(b) each outstanding guarantee (if any) granted by the Company or
Subsidiaries in respect of the obligations of a third party;
(c) each outstanding guarantee (if any) granted by a third party in
respect of the obligations of the Company or Subsidiaries.
5.2 The Company is not in material breach of any Material Contract to which
it is a party and, so far as the Warrantors are aware, no other party to
any such Material Contract is in material breach of any such contract.
5.3 The Company is not a party to any Material Customer Contract which is,
by reason of any change in the ownership or beneficial ownership of the
Contract Shares (or any of them), either to be:-
(a) terminated or to become terminable by any party on a date
earlier or later than it would, but for such change, be liable
to be terminated; or
(b) subject to any change in the applicable terms thereof.
5.4 The Company has not given any power of attorney or any other authority
(express, implied or ostensible) which is still effective to any person
to enter into any contract or commitment or do anything on its behalf
(other than any authority of Employees to enter into routine trading
contracts in the normal course of their duties).
6. ACCOUNTS
6.1 The Accounts -
54
(a) have been prepared in accordance with the requirements of the
relevant statutes and in accordance with all statements of
standard accounting practice, financial reporting standards and
generally accepted accounting principles in the United Kingdom;
(b) show a true and fair view of the financial position and of the
state of affairs of the Company as at the Accounts Date; and
(c) are not affected by any material unusual exceptional or
non-recurring items.
6.2 Proper and consistent records of the Company, DHL, SSL and Subsidiaries
have been kept in accordance with law and all such records including the
register of members and other statutory books are up to date in all
material respects and in the possession of the Company.
6.3 No changes in the Company's and Subsidiaries' accounting policies or in
the method of application of those policies or in the bases of
accounting have been made during the three financial periods ended on
the Accounts Date and no changes in the Company's and Subsidiaries
accounting policies or in the method of application of those policies or
in the bases of accounting have been made since the Accounts Date.
7. PERIOD SINCE THE ACCOUNTS DATE
During the period from and including the Accounts Date until
Completion:-
(a) no distribution by way of dividend, bonus or otherwise on the
issued share capital of the Company has been made;
(b) no loan capital has been created or issued by the Company;
(c) the business of the Company has been carried on in the ordinary,
proper and usual course without any material interruption or
alteration;
(d) there has been no material adverse change in the financial or
trading position of the Company;
(e) the Company has not incurred capital expenditure in excess of
(pound)750,000 in aggregate;
(f) the Company has not entered into a contract with any of the
Vendors and/or an Associate of a Vendor other than in the course
of the Vendor's employment with the Company.
(g) save as disclosed repaid or agreed to repay or redeem any shares
or any class of its share capital or otherwise reduced or agreed
to reduce its share capital or any class thereof;
55
(h) save as disclosed, purchased any of its own shares; and
(i) save in so far as provision was made in the Accounts the book
debts of the Company as at the Accounts Date have realised their
full value.
8. MANAGEMENT ACCOUNTS
The Management Accounts have been prepared on a basis consistent with
the Accounts (save that they are prepared in relation to the Company
only and not on a consolidated basis and that no provision is made for
Taxation therein) and fairly present the all assets and liabilities of
the Company as at the date thereof.
9. ASSETS
9.1 Except for assets disposed of by the Company in the ordinary course of
trading or those assets detailed in the Disclosure Letter as being
subject to hire, hire-purchase, lease or similar arrangement the Company
is the legal and beneficial owner of all assets included in the Accounts
and all assets acquired by the Company since the Accounts Date and there
is no security, mortgage, lien, charge, pledge or hypothecation (or
agreement to create the same) on the undertaking, property or assets of
the Company or any part thereof.
9.2 The assets owned by the Company together with assets held under the hire
purchase, leasing or rental agreements listed in the Disclosure Letter
comprise all assets considered by the Warrantors to be necessary for the
continuation of the business of the Company as now carried on.
9.3 All fixed and loose plant, machinery, vehicles and other equipment used
in connection with the business of the Company at Completion;
9.3.1 are in good and safe state of repair and condition and
satisfactory working order having regard to their age and usage
and have been regularly and properly maintained in accordance
with the Company's usual practices;
9.3.2 are not considered by the Warrantors to any material extent to
be surplus to requirements;
9.3.3 are in its possession and control; and
9.3.4 (other than vans which will be replaced in accordance with the
usual policy of the Company) are not expected to require
replacements in accordance with the usual policy
56
of the Company at a cost in aggregate for all such items (other
than vans) in excess of (pound)100,000 within twelve months from
the date of this agreement.
9.4 Details of all maintenance contracts in place in respect of the assets
referred to in Clause 9.3 involving payments of greater than
(pound)2,000 per annum are set out in the Disclosure Letter.
10. INSURANCES
10.1 The schedule of insurances appended to the Disclosure Letter discloses
all insurances effected by the Company and in force at the Completion
Date.
10.2 There is no insurance claim pending or outstanding and, so far as the
Warrantors are aware, there are no subsisting circumstances which may
give rise to any such claim.
10.3 The Company is now and has in the immediately preceding three years been
reasonably covered against accident, damage, injury, third party loss
(including product liability) and other risks normally insured against
by persons carrying on the same business in Great Britain.
10.4 All insurance set out in the schedule of insurances appended to the
Disclosure Letter is currently in full force and effect, and so far as
the Warrantors are aware nothing has been done or omitted to be done by
the Company which would make any such policy of insurance void or
voidable.
11. INVESTIGATIONS
To the best of the Warrantors' knowledge and belief, the affairs of the
Company have not in the period of 5 years immediately preceding
Completion been the subject of an investigation by the Inland Revenue or
the Department of Trade and Industry (or its predecessors) under
statutes relating to Taxation or the Companies Act or other applicable
law or regulation or any governmental or other body and as far as the
Warrantors are aware there are no circumstances likely to give rise to
such investigation or enquiry.
12. EMPLOYEES
12.1 The Company has no employees other than the Employees.
12.2 The employment agreements with the Employees can all be determined
without compensation (except any sums which may be payable by virtue of
law including, without prejudice to such generality, ERA 1996) by such
notice as is required under the terms of ERA 1996 and in any event not
more than three months.
12.3 No Senior Employee of the Company has given notice, or is under notice,
of dismissal.
57
12.4 The Company has not incurred any liability for breach of any contract of
service, for redundancy payment or for compensation for wrongful or
unfair dismissal or in respect of any discrimination (howsoever arising)
in respect of which any claim is outstanding at the date of this
Agreement and, so far as the Warrantors are aware, there are no
subsisting circumstances which may give rise to any such claim.
12.5 The Company is not involved in any industrial or trade dispute with the
Employees (or a material number or category of them) or any trade union
or other organisation and there are no subsisting circumstances which
may give rise to any such dispute.
12.6 Summary details of the bonus arrangements with the Employees operated by
the Company are set out in the Disclosure Letter.
12.7 The Employees are not entitled to (and do not) participate in any share
option or share incentive schemes.
12.8 There are no Employees the length of whose employment for the purposes
of redundancy payments would include any employment by any other person,
firm or company prior to their employment with the Company.
12.9 The details of the Employees set out in the Disclosure Letter are true
and accurate in all material respects and, without prejudice to the
foregoing, disclose all material benefits paid to and/or in respect of
the Employees by the Company.
12.10 There are no agreements or other arrangements (whether or not legally
binding) between the Company and any trade union or other body
representing the Employees.
12.11 The Group has in relation to each of the Employees (and so far as
relevant to each of its former employees):
12.11.1 so far as the Warrantors are aware complied with all obligations
imposed upon it by the Employment Rights ▇▇▇ ▇▇▇▇, the Trade
Union and Labour Relations (Consolidation) ▇▇▇ ▇▇▇▇ and the Sex
Discrimination ▇▇▇ ▇▇▇▇ and any other statute regulation
relevant to relations between the Company and its employees and
any trade union recognised by the Company; including but without
limitation Health and Safety (Display Screen Equipment)
Regulations 1992;
12.11.2 complied with all collective agreements for the time being
having effect with regard to industrial relations or the
conditions of service of its employees;
58
12.11.3 complied with all relevant orders and awards made by any court
or tribunal in relation to its employees;
12.11.4 maintained adequate and suitable records of the service of each
of its employees.
13. LITIGATION AND OTHER CLAIMS
13.1 The Company is not engaged in litigation or arbitration, no such
proceedings are threatened by or against the Company and, so far as the
Warrantors are aware, there are no subsisting circumstances which may
give rise to any such proceedings.
13.2 Save in relation to the Properties and the Environment, so far as the
Warrantors are aware the Company has not committed any criminal or
illegal act which would have a material adverse effect on the business
of the Company.
14. RETURNS TO COMPANIES HOUSE AND CORPORATE COMPLIANCE
14.1 All returns, particulars, resolutions and documents required by the
Companies Acts or any other legislation to be filed with the Registrar
of Companies, in respect of each Group Company have been duly filed and
were correct; and due compliance has been made with all the provisions
of the Companies Acts in connection with the formation of each Group
Company, the allotment or issue of shares, debentures and other
securities, the payment of dividends and the conduct of its business.
14.2 Save in relation to the Properties and the Environment, so far as the
Warrantors are aware no Group Company and none of its officers, agents
or employees (during the course of their duties in relation to it) has
[in the period of five years immediately preceding Completion] omitted
or omitted to do any act or thing the commission or omission of which is
in contravention of any act, order, regulation or other law or which is
a crime, tort, delict or breach of trust (whether of the United Kingdom
or elsewhere) which has given rise or (so far as the Warrantors are
aware) is likely to give rise to any damages, fine, penalty, default
proceedings or other liability on its part or may give rise to any Group
Company being the subject of an injunction which, in any of such cases
would have a material adverse effect on the business of the Company.
14.3 Save in relation to the Properties and the Environment, so far as the
Warrantors are aware each Group Company has in the period of five years
immediately preceding Completion conducted and is conducting its
business in all respects in accordance with all applicable laws and
59
regulations having the force of law whether of the United Kingdom or
elsewhere where any failure in respect thereof would not have a material
adverse effect on the business of the Company.
14.4 No Group Company carries on (or has, at any time when not an authorised
person under Chapter III, Financial Services ▇▇▇ ▇▇▇▇, carried on)
investment business in the United Kingdom within the meaning of
Financial Services ▇▇▇ ▇▇▇▇ s 1.
14.5 No Group Company has made any payment or provided any benefit in order
to obtain or retain business which having regard to the nature or
magnitude of the payment or benefit is likely to be regarded as a bribe
or as being otherwise unlawful or improper.
15. BORROWINGS AND BANK FACILITIES
15.1 The Company has no outstanding loan capital and (other than in respect
of the bank facilities detailed in the Disclosure Letter) has not
borrowed any money which it has not repaid.
15.2 The Company has not received notice (whether formal or informal) from
any lenders of money to it, requiring repayment or intimating the
enforcement of any security the lender may hold over any of its assets;
and there are no circumstances likely to give rise to any such notice.
16. DEBTS
16.1 The Company is not owed any moneys other than trade debts incurred in
the ordinary course of business.
16.2 So far as the Warrantors are aware the trade debts incurred in the
ordinary course of business of the Company outstanding at Completion
will be recoverable to the extent thereof (less the amount of any
provision or reserve for bad or doubtful debts, if any set out in the
Disclosure Letter).
17. LOANS
Save for trade credit afforded to its customers in the ordinary course
of business, the Company has not lent any money that has not been repaid
to it.
18. LICENCES AND CONSENTS
Save in relation to the Properties and the Environment, all licences,
consents, permits and authorities required from any governmental,
administrative or regulatory body necessary for the carrying on of the
business of the Company in the manner in which such business is now
carried on have been disclosed in the Disclosure Letter and all such
licences, consents, permits and authorities are valid and subsisting and
the Company has received no written notice that any of
60
them may be suspended, cancelled or revoked is not aware of any
circumstances likely to give rise to the issue of any such notice.
19. NAME
The Company has not used on its letterheads, circulars, advertisements,
vehicles or otherwise any name other than its corporate name or
otherwise carried on business under any name other than its corporate
name.
20. ANTI-TRUST
20.1 There are no agreements or arrangements to which the Company is a party
and which are material to the business of the Company as carried on at
the date of this agreement which infringes or which has or should have
been registered under the Restrictive Trade Practices Act 1976 (as
amended and extended by the Competition Act 1980) or notified to the
European Commission under Articles 85 or 86 of the Treaty of Rome.
20.2 The Company is not engaged in an "anti-competitive practice" within the
meaning of the Competition ▇▇▇ ▇▇▇▇.
20.3 The Company has not received any process, notice or communication,
formal or informal, by or on behalf of the Office of Fair Trading or the
European Commission or any other authority of any country, or any
political or administrative sub-division thereof, having jurisdiction in
anti-trust matters in relation to any aspect of the business of the
Company or any agreement or arrangement to which the Company is, or is
alleged to be, a party.
20.4 The Company has not engaged in any "consumer trade practice" within the
meaning of the Fair Trading Act 1973 which may be or be capable of being
referred to, or is under reference to, the Consumer Protection Advisory
Committee or the subject matter of a report to, or order by, the
Secretary of State.
21. SUBSTANTIAL CUSTOMERS
No Material Customer has ceased or has indicated an intention to cease
trading or dealing with the Company or, after the date of this
Agreement, to make any substantial reduction in trading with the
Company.
61
22. INTELLECTUAL PROPERTY
22.1 Details of all registered Intellectual Property Rights owned used by the
Company are set out in the Disclosure Letter. In respect of registered
Intellectual Property Rights, all registrations are current and all
renewal fees in respect thereof have been paid.
22.2 The Company has not received notice that the operation of the business
of the Company infringes any Intellectual Property Right of any kind
vested in any other party and, so far as the Warrantors are aware, the
Company is not so infringing any such right. The operation of such
business does not give rise to payment of any royalty or of any sum in
the nature of royalty or to liability to pay compensation pursuant to
sections 40 and 41 of the Patents ▇▇▇ ▇▇▇▇.
22.3 Details of all current licences granted to or by the Company in relation
to the Intellectual Property Rights are set out in the Disclosure
Letter. So far as the Warrantors are aware, neither the Company nor any
other party thereto is in breach of the terms of any such licence and so
far as the Warrantors are aware there are no subsisting circumstances
which may give rise to any such breach.
22.4 There are no actual or threatened disputes or litigation relating to any
of the Company's Intellectual Property Rights nor, so far as the
Warrantors are aware, is any third party infringing any of such
Intellectual Property Rights.
22.5 The Warrantors are not aware of any assertions of ownership over any of
the Company's Intellectual Property Rights by a third party in the two
years prior to the Completion Date.
22.6 The Company has not received nor been threatened with any proceedings
for opposition or cancellation of any of the Company's Intellectual
Property Rights at any time during the period of two years prior to the
Completion Date.
22.7 The Company is entitled to use, without restriction, all information in
its possession for the purposes of its business (other than information
received from customers pursuant to the ordinary course of business of
the Company).
22.8 The Company has not disclosed any Confidential Information to any third
party save under the terms of confidentiality undertakings details of
which are set out in the Disclosure Letter.
23. DATA PROTECTION
23.1 The Company has duly complied with all relevant requirements of the Data
Protection ▇▇▇ ▇▇▇▇ including compliance with the following
62
23.1.1 the data protection principles established in that Act;
23.1.2 requests from data subjects for access to data held by it;
23.1.3 the requirements relating to the registration of data users.
23.2 The Company has not received a notice or allegation from either the data
protection registrar or a data subject alleging non-compliance with the
data protection principles or prohibiting the transfer of data to a
place outside the United Kingdom.
23.3 No individual has claimed or will have the right to claim compensation
from the Company under that Act for loss or unauthorised disclosure of
data.
24. GRANTS
24.1 Full details of all grants, subsidies or financial assistance applied
for or received by the Company from any governmental department or
agency or any local or other authority or the European Community in
excess of (pound)10,000 each are set out in the Disclosure Letter.
24.2 The Company has not done or omitted to do any act or thing which could
result in all or any part of any investment grant, employment subsidiary
or other similar payment made, or due to be made, to it becoming
repayable or being forfeited or withheld in whole or in part and the
signature or completion of this Agreement will not have that result.
25. PENSIONS
Save as disclosed the Company have no legal obligation under any scheme,
arrangement or agreement for the provision of any pension, death,
sickness or other like benefit for any past or present employee or any
widow, child or dependent thereof.
26. INSOLVENCY
26.1 No order has been made, resolution passed or, so far as the Warrantors
are aware, petition presented for winding-up the Company.
26.2 The Company has not stopped payment and is not insolvent or unable to
pay its debts within the meaning of section 123 of the Insolvency ▇▇▇
▇▇▇▇.
26.3 No diligence or other process has been used upon or against the Company
or any of the property of the Company.
26.4 There is no unfulfilled or unsatisfied judgement or court order
outstanding against the Company.
26.5 No receiver, receiver and manager, administrative receiver or
administrator has been appointed to or over the business or assets of
the Company or any part thereof.
63
26.6 No petition has been presented for the appointment of an administrator.
27. THE PROPERTIES
27.1 (a) The Properties constitute the only property owned, occupied or
leased by the Company;
(b) Other than in respect of the charges detailed in Part 2 of the
Schedule, the Properties are free from all charges or
encumbrances or other adverse interests and the Company has not
granted or agreed to grant any right or interest therein to any
third party;
(c) The Company has a valid leasehold tile to the Properties and all
deeds and documents relating to the Company's leasehold title
including any deeds of variation or landlords proposals in
relation to any pending rent review (but excluding for the
avoidance of doubt any superior tile) have been disclosed to the
Purchaser; declaring, without prejudice to the foregoing, that
no warranty is given in respect of the terms of the Company's
leasehold tile;
(d) The Company is the legal and beneficial owner of its leasehold
title to the Properties;
(e) The Company enjoys full vacant possession of the Properties
unaffected by any leases, franchises, licences or other rights
of occupation;
(f) The Company has not been advised of and the Warrantors are not
aware of any breach or contravention of or non-compliance with
any obligations, restrictions, exceptions, reservations,
conditions, agreements, statutory and/or common law
requirements, bye-laws, orders and other stipulations or
regulations affecting the Properties; Provided that this
warranty shall not apply to any obligations, restrictions and
others as arise from the leases in terms of which the Company
occupies the Properties;
(g) There are no major repairs in excess of an estimated cost of
(pound)10,000 in respect of each Property contracted for by the
Company in respect of the Properties and the Warrantors are not
aware of any repairs, maintenance or renewals which have been or
are anticipated to be contracted for, carried out or proposed by
the landlord at any of the Properties which will result in the
landlord seeking to recover any sum in excess of (pound)10,000
in respect of each or any Property;
64
(h) There are no claims or disputes outstanding affecting the
Company in relation to the maintenance or otherwise of the
common parts or the provision of common services in relation to
the Properties;
(i) The Warrantors are not aware (without having made enquiry) and
the Company has not been advised that any buildings and
erections on the Properties have been erected, altered or
extended without, or in contravention of all necessary
permissions, licences, consents and warrants;
(j) The Warrantors are not aware (without having made any enquiry)
of any covenants, stipulations, restrictions, or agreements
which would have a material adverse effect on the business of
the Company;
(k) The Company's use of the Properties is not in contravention of
the Town and Country Planning Acts; providing that this warranty
shall relate only to use and not to any operational development;
(l) The Company has not received notice of any outstanding notices,
orders or proposals injunctions or other proceedings under the
Planning Acts or any other statutes or instruments adversely
affecting the Properties or of any road or other proposals
affecting the Properties;
(m) The Warrantors are not aware (without having made enquiry) of
any proposals made or intended to be made by the Local, Planning
or any other competent Authority concerning the compulsory
acquisition of all or any part of the Properties;
(n) The Properties are not subject to any improvement or other
grants;
(o) The Company has not received notice of any, and the Warrantors
(without having made any enquiry) are not aware of any
contravention of the Offices, Shops and Railways Premises Act
1963 and the Health and Safety at Work etc. ▇▇▇ ▇▇▇▇;
(p) The Properties have an adequate means of escape in case of fire
and where required by law have a valid and current fire
certificate;
(q) Since the Accounts Date the Company has not entered into or
concluded any contract for the acquisition or lease of any
properties;
65
(r) The Properties are served by mains drainage, water, gas and
electricity and the Company has not been advised that the use of
such services is precarious or depends on the continued consent
or licence of any third party;
(s) All buildings and all other erections on the Properties and/or
part thereof are in such condition and state of repair as to be
fit for the purpose for which they are at present used and so
far as the Warrantors are aware, the Company will not require to
spend in excess of (pound)10,000 per Property in respect of the
year commencing from the Completion Date if the Company were to
continue to carry out repairs and maintenance on a pattern
consistent with that adopted by the Company in the 2 years prior
to the Completion Date;
(t) The rateable value of the Properties is as per the Valuation
Roll, as detailed in the Disclosure Letter such rateable value
does not reflect industrial de-rating and there are no rates
appeals in progress in respect of the Properties;
(u) The Company has not elected to waive exemption from VAT in
respect of the Properties and disposal of the Company's interest
in the Properties would not be standard rated for VAT purposes;-
(v) The Company has complied timeously with all obligations under
its leases relative to the Properties insofar as relating to
payment of rent and service and other charges, there are no
current or outstanding disputes with the landlords or
requisitions from the landlords (including requisitions in
respect of the carrying out of repairs, maintenance or renewal
to the fabric of any of the Properties) and the landlords have
not threatened to terminate any of the Company's leases;
(w) The Company has no contingent liability in respect of any
property which the Company does not occupy but in respect of
which it is an intermediate tenant or a former tenant.
(x) The Company does not have any actual or contingent liability of
any nature whatsoever in respect of any freehold or leasehold
land and buildings other than the Properties;
(y) There is no obligation with respect to the Properties necessary
to comply with the requirements of any competent authority
exercising statutory or delegated powers which has been notified
to the Company but not implemented of which the Company is
aware;
66
(z) There are no disputes with any adjoining or neighbouring owner
with respect to any boundary or with respect to any easement,
right, means of access or other mailer whatsoever relating to
the Properties;
(aa) None of the buildings on the Properties has been altered or
repaired by the Company during its period of occupation using
any of the following materials or methods viz: high alumina
cement, asbestos, calcium chloride, woodwool slabs or formers,
salt or seawashed or dredged aggregates, silicate bricks, or
crocidolite; and the Warrantors are not aware of any of the
Properties containing asbestos in a form which is likely to have
a material adverse effect on the operation of the business of
the Company;
(bb) The Company has not been advised by any landlord that it has
failed to obtain any consent or approval which it requires to
obtain pursuant to any of the leases under which the Properties
are held; and the Company has not failed to obtain any such
consent or approval in circumstances in which a fair and
reasonable landlord would be reasonably likely to seek to
terminate the relevant lease having regard to limitations
imposed upon the ability of landlords to terminate commercial
leases by virtue of statute or common law; and the Company has
not carried out alterations or additions to any Property having
a cost in excess of (pound)10,000 without having obtained both
the consent of the relevant landlord and any other consent
required under the Town and Country Planning legislation or
otherwise.
27.2 The Company has not contracted or agreed to purchase, sell, encumber or
in any way or for any other purpose deal with the Company's interest in
the Properties.
27.3 In respect of any property formerly owned or occupied by the Company,
there are no outstanding liabilities in respect thereof which have not
been disclosed to the Purchaser.
28. THE ENVIRONMENT
28.1 All Environmental Permits necessary have been obtained and the terms and
conditions of all Environmental Permits, and the Environmental
Legislation, in relation to the business of any Group Company have been
complied with.
28.2.1 The Company has at all times conducted its business and
operations in compliance with any required Environmental Permits
which are in full force and effect.
67
28.2.2 The Warrantors are not aware (without having made any enquiry)
of (a) any requirement to carry out works or other investments
which are or will within 3 years of the Completion Date be
necessary to secure compliance with, or to maintain or obtain,
any Environmental Permits or (b) any matter which might give
rise to any material liability under Environmental Legislation.
28.2.3 So far as the Warrantors are aware, there are no facts or
circumstances indicating that any Environmental Permits would or
might be revoked, suspended, cancelled, varied or not renewed.
28.2.4 All appropriate or necessary action in connection with the
renewal or extension of any Environmental Permits has been
taken.
28.2.5 The execution or performance of this Agreement and all other
documents which are to be executed at Completion will not result
in any Environmental Permits being revoked, suspended,
cancelled, varied or not renewed.
28.2.6 None of the Environmental Permits nor any of the conditions to
which any Environmental Permits are subject are personal to the
Company.
28.3 Neither the operation of the business of the Company nor any asset
owned, occupied or used by the Company, or any other person, in
connection with the business of the Company, involves the use of, or the
release or discharge into the Environment of, or contains, any
dangerous, radioactive, toxic or hazardous substance or article so as to
breach any Environmental Legislation and no release or discharge of any
such substance or article exceeds or has exceeded any allowable or
permissible quotas or limits prescribed or specified under any
Environmental Legislation or in any condition to any Environmental
Permits.
28.4 So far as the Warrantors are aware no land or other asset now or
previously owned, occupied or used by the company, or any other person,
in connection with the business of the Company:
28.4.1 has or contains any storage tanks or any dangerous, radioactive,
toxic or hazardous substance or article or any waste or other
pollutant or contaminant (whether above or below ground);
28.4.2 is or in the past has been used for the deposit, storage,
treatment or disposal of waste or sewage; or
68
28.4.3 is referred to or listed in any register of polluted or
contaminated land kept pursuant to any Environmental Legislation
and there are no facts or circumstances which would or might
give rise to an entry in any such register.
28.5 There is no civil, criminal or administrative action, claim, complaint
or other proceedings, suit or, so far as the Warrantors are aware,
investigation being taken or made, pending or threatened in connection
with the business or any of the assets of any Group Company or any
actual or (so far as the Warrantors are aware) contingent liability to
make good, repair, re-instate or clean up any land or other asset now or
previously owned, occupied or used by the Company, or any other person,
in connection with the business of the Company, nor any act, omission,
event or circumstance which has given rise to or (so far as the
Warrantors are aware) is likely to give rise in the future to any such
action, claim, investigation, proceedings or suit or any such liability
or any other liabilities under any Environmental Legislation.
69
PART 3C
The Tax Warranties
1. GENERAL
1.1. Each of the Company, DHL, SSL and the Subsidiaries is resident in the
United Kingdom and only in the United Kingdom for Tax purposes and the
Company's liabilities as at the Accounts Date for Tax whether of the
United Kingdom or elsewhere and whether as principal, agent, lessee,
trustee or in any other capacity are fully provided for in the Accounts.
1.2. Save as set out in the Disclosure Letter, no Tax Authority has agreed to
operate any special arrangement (being an arrangement which is not based
on a strict and detailed application of the relevant legislation) in
relation to the Company's affairs.
1.3. The Company has not within the past six years suffered any
investigation, audit or visit by any Tax Authority and the Warrantors
are not aware of any such investigation, audit or visit planned for the
twelve months following the Completion Date.
1.4. All returns, notices, computations, accounts and other documents and
payments which should have been made or given by the Company for any Tax
purpose were made or given within the requisite periods and were up to
date, correct, on a proper basis; none of such returns has been disputed
by any Tax Authority and so far as the Warrantors are aware there are no
subsisting circumstances which may give rise to any dispute.
1.5. All claims, elections, surrenders and disclaimers assumed to have been
made for the purpose of the Accounts have been made to the relevant Tax
Authority.
1.6. The Disclosure Letter contains sufficient details of all entitlements of
the Company at the Completion Date to make claims, elections, appeals
and postponement applications in respect of Tax and Stamp Duty and any
requirement by the Company to make any specific return or to provide
information to any Tax Authority, to allow the Company to meet the
relevant time limits in connection with any such claims, election,
appeals or postponement applications, returns or information.
1.7. The Company is not liable to pay any penalty or interest in connection
with any Tax, and there are no subsisting circumstances which could give
rise to any such penalty or interest.
70
1.8. No relief from, against or in respect of any Tax has been claimed or
granted which could be withdrawn, postponed, restricted, clawed back, or
otherwise lost as a result of any act, omission, event or transaction
occurring at or before Completion.
1.9. Since the Accounts Date, the Company has not been involved in any
transaction giving rise to a Taxation liability outside the ordinary
course of business, no payment has been made or liability accrued that
will not be deductible in computing taxable profits of the Company
(other than disallowable professional fees and entertainment expenditure
not exceeding (pound)20,000 and expenditure on repairs not exceeding
(pound)30,000 which may be capital in nature), no disposal has been made
for which the consideration received is less than the consideration
which would be deemed to be received for tax purposes.
1.10. The Company has made provision for deferred tax liabilities in
accordance with Statement of Standard Accounting Practice 15.
2. DISTRIBUTIONS, DEMERGERS AND PURCHASE OF OWN SHARES
2.1. The Company has not purchased any of its own shares in circumstances
where the payment would be treated as a distribution, and in respect of
all such purchases advance clearances were obtained pursuant to TA 1988
section 225.
2.2. The Company has complied in all respects with the provisions of TA 1988
sections 348, 349, 350 and all regulations made under any of those
sections and has made and accounted for all such deductions and
retentions as should have been made by virtue of those sections and
regulations.
2.3. Save as set out in the Disclosure Letter, no dividend or distribution
has been declared or paid since the Accounts Date.
3. CLOSE COMPANY PROVISIONS
3.1. No expense has been incurred by the Company which could be treated as a
distribution pursuant to TA 1988 section 418.
3.2. There is no outstanding loan or advance by the Company as is mentioned
in TA 1988 sections 419 (loans to participators) or 422 (loans by
companies controlled by close company).
71
4. TAX GROUPING
4.1. The Company has at no time surrendered or claimed or agreed to surrender
or claim any amount by way of group relief under the provisions of TA
1998 Chapter IV, other than as set out in the Disclosure Letter.
4.2. The Company will not, by reason of Completion, be or become chargeable
to Tax under any of TCGA 1992 sections 170 to 175 (inclusive) (groups of
companies) or TCGA 1992 sections 178 to 181 (inclusive) (companies
ceasing to be a member of a group) in respect of any transaction, event
or circumstance which has been entered into, occurred or arisen at any
time before Completion.
4.3. No circumstances exist whereby an apportionment of group relief could be
made pursuant to TA 1988 section 409 (companies joining or leaving group
or consortium).
4.4. The Company is not party to a special arrangement under SP 10/93 to
simply the procedure for making and revising claims to group relief
under pay and file.
4.5. The Company is neither liable to make nor entitled to receive any
payment for group or consortium relief.
5. INTRA-GROUP TRANSACTIONS
5.1. The Company has not been a party to or otherwise concerned in any
transaction, scheme, arrangement or events such as are mentioned in TCGA
1992 section 139 (transfer of assets on a reconstruction).
5.2. The Company has not been a party to or otherwise concerned in any
transaction, scheme, arrangement or events such as are mentioned in TCGA
1992 sections 135 and 136 (exchange of securities).
6. ADVANCE CORPORATION TAX
6.1. No claim is competent to the Company pursuant to TA 1988 section 239(3)
(set-off of ACT against liability to mainstream corporation tax) in
respect of any of the three accounting periods preceding the Completion
Date.
6.2. The Company is not liable for the recovery of incorrect set-off of
advance corporation tax or repayment of tax credit under TA 1988 section
252.
6.3. The Disclosure Letter contains particulars of all elections made by the
Company under TA 1988 section 247 (intra-group dividends paid net of
ACT) and all such elections are now in force and
72
the Company has not paid any dividend without ACT and has not made any
payments without deduction of tax in the circumstances specified in TA
1988 section 247(6).
6.4. The Company is neither liable to make nor entitled to receive any
payment or refund of any payment for the claim or surrender of advance
corporation tax.
7. CAPITAL ALLOWANCES
7.1. Either the aggregate value of plant and machinery (including motor
vehicles) as shown in the Accounts does not exceed the aggregate
expenditure unallowed thereon for tax purposes, or provision for
deferred tax therein has been made in the Accounts.
7.2. None of the assets on which expenditure has been incurred by the Company
and which has qualified for a capital allowance under CAA 1990 Part 1
Chapters I or II (Industrial Buildings) has, at any time since such
expenditure was incurred, been used otherwise than as an industrial
building or structure as defined in section 18 CAA.
8. FOREIGN TRANSACTIONS
8.1. The Company has not without the consent of the Treasury entered into or
agreed to enter into any transaction specified in TA 1988 sections 765
to 767 (inclusive) (migration of companies and offences thereunder).
8.2. None of the Company, SSL, DHL or the Subsidiaries have a branch, agency,
place of business or permanent establishment outside the United Kingdom.
9. ANNUAL PAYMENTS, ETC.
9.1. All remuneration and other sums paid or payable to employees or officers
or former employees or officers of the Company since the Accounts Date
is or are or will be deductible for corporation tax purposes, either in
computing the profits of the Company or in computing the corporation tax
chargeable on the Company.
9.2. The Disclosure Letter contains details of any dispensation obtained by
the Company in respect of employee expense allowances; no such
dispensation has been revoked and all expense allowances or benefits
made or paid to employees which are not covered by such a dispensation
have been properly returned to the Inland Revenue and included on Forms
P11D and P9D.
10. CLEARANCE APPLICATIONS
10.1. The Company has not carried out any transaction in respect of which
Inland Revenue clearance has been obtained except in accordance with
such clearance.
73
11. CAPITAL GAINS
11.1. The acquisition cost of each of the Companies' assets for the purpose of
calculating liability to corporation tax on chargeable gains is not less
than the book value of that asset as provided in the Accounts and no
Company has disposed of or acquired any asset since the Accounts Date in
circumstances such that the disposal price or acquisition cost of the
asset would be treated for Taxation purposes as being different from the
consideration given or received.
11.2. The Disclosure Letter contains details of any such claim by any of the
Companies as is mentioned in TCGA 1992 sections 152 or 153 (Roll-over
relief) section 175 (Replacement of business assets by members of a
group), or section 247 (Roll-over relief on compulsory acquisition).
12. VAT
12.1. The Company is a registered and taxable person for the purposes of VATA
1994 and has complied with and observed the terms of such legislation
and all regulations made or notices issued thereunder and has maintained
and obtained records, invoices and other documents appropriate or
requisite for the purposes thereof and the Company:-
12.1.1. has not been required by the Commissioners of Customs and Excise
to give security;
12.1.2. is not and has never been treated as nor has applied for
treatment as a member of a group for VAT purposes;
12.1.3 is not, nor has agreed to become, an agent, manager or factor
(for the purposes of VATA 1994 section 47) for the supply of
goods for a person who is not a taxable person.
12.2. The Company has not, during the past 12 or 24 months respectively
received a surcharge liability notice under VAT 1994 section 59 (Default
surcharge) or a penalty liability notice under section 64 (Repeated
misdeclarations) nor is it liable to a penalty under section 63.
12.3. No election to waive exemption from VAT under VATA 1994 Schedule 10
paragraph 2 has been made in relation to any of the Properties by the
Company
12.4. The Company has furnished to H M Commissioners of Customs & Excise
details of any error in any return made for the purposes of VAT.
74
12.5. The Company is not in arrears with any payment of or returns in respect
of VAT, or liable to any abnormal or non-routine payment, or any
forfeiture or penalty or to the imposition of any penal provision in
respect of VAT.
12.6. The Company is not liable to account for VAT or its equivalent in any
member State of the European Union other than the United Kingdom.
12.7. The Disclosure Letter contains details of any claim for bad debt relief
made, or which may be made, by the Company under Section 36 VATA 1994,
and save as so disclosed, no claims have been made by the Company under
Section 36 VATA 1994.
12.8. The Company is not bound by reason of Section 89 VATA 1994 applying to
any agreement to pay VAT in addition to the agreed consideration or rent
as a result of any person exercising the election to waive exemption in
terms of Schedule 10 VATA 1994.
12.9. No lease in respect of which the Company is a tenant is a developmental
lease as defined in Note 7 to Group 1 of Schedule 9 VATA 1994 as a
result of any works which have been executed or are being executed.
12.10. The Company has not at any time claimed as input tax, for the purposes
of VAT, any VAT charged on a transaction which could be construed as the
transfer of a business or part of a business as a going concern as
defined in Article 5 of the VAT (Special Provisions) Order 1995 and has
accounted to H M Customs & Excise for all VAT on sales of assets other
than those which were properly treated as transferred as part of the
transfer of a business or part of a business as a going concern as
defined in the said Article 5(1).
12.11. The Disclosure Letter sets out in respect of any capital item within the
meaning of Part XV of the VAT Regulations 1995 in respect of which a
liability under the said Part XV has arisen within the past ten years or
could in future arise on the Company:
Complete and correct particulars of past adjustments under the said Part
XV; and
Complete and correct particulars of all matters arising before the
Completion Date which matters are relevant in determining future
adjustments under the said Part XV.
12.12 There is no capital item within the meaning of Part XV of the VAT
Regulations in relation to which any exempt supply has been made or
agreed to be made by the Company such that paragraphs 2(4) and 2(5) of
Schedule 10 VATA 1994 could prevent any of the input tax which is
subject to Part XV of the VAT Regulations 1995 from being allowable
notwithstanding the making of an
75
election to waive exemption in relation to the capital item (whether or
not such an election has been made).
12.13 Since the Accounts Date, no exempt supply under Group 1 of Schedule 9
VATA 1994 has been made or agreed to be made by the Company.
12.14 The Company is not and has not been making exempt supplies for the
purposes of VAT and there are no circumstances as a result of which the
Company might not be entitled to credit for all VAT chargeable on
supplies made to the Company, acquisitions made by the Company in the
United Kingdom from other member States of the European Union and
imports made by the Company from places outwith the member States of the
European Union and there are no circumstances by reason of which
Regulations 107 to 110 (inclusive) of the VAT Regulations 1995 might
apply to the Company.
12.15 There are no circumstances as a result of which the Company is liable to
VAT under paragraphs 1 or 5 and 6 of Schedule 10 VATA 1994 or under the
VAT (Self-Supply of Construction Services) Order 1989.
12.16 No direction has been or could have been made to the Company under
paragraph 1 Schedule 7 VATA 1994.
13 PAYE
13.1 The Company has properly operated the PAYE system by duly deducting tax
from all payments made, or treated as made, to its employees or former
employees, and accounted to the Inland Revenue for all tax deducted by
it and for all tax chargeable on benefits provided for its employees or
former employees.
14 STAMP DUTY
14.1 Since the Accounts Date, none of the Company, SSL, DHL or the
Subsidiaries has incurred a liability to or been accountable for any
Stamp Duty Reserve Tax and there has been no agreement within FA 1986
section 87 (1) which could lead to the Company incurring such a
liability.
14.2 All documents on which the Company, SSL, DHL or the Subsidiaries may
wish to rely have been properly stamped
76
PART 4A
Limitation of Liability - General Provisions
1. In the absence of dishonesty on the part of the Warrantors and their
agents, the aggregate liability of the Warrantors in terms of the
Warranties and the Tax Covenant shall be limited as follows:-
1.1 in aggregate with any liability of the Warrantors under Clause
17 it shall not exceed seventy five per cent (75%) of the
Consideration together with all reasonable costs and expenses
incurred by the Purchaser in pursuing the Warrantors in respect
of such breaches and/or claims;
1.2 no liability shall arise unless and until the amount of a claim,
when aggregated with the amount of all other claims:-
1.2.1 made against the Warrantors under the Warranties and/or
the Tax Covenant; and
1.2.2 which would have been made thereunder but for the
operation of this clause; exceeds the Threshold, in
which event, the whole of such aggregate amount and not
merely the excess shall be recoverable; and
1.3 there shall be disregarded, for all purposes, any claim which,
when aggregated with any related or similar claim, the liability
of the Warrantors would be less than (pound)15,000.
2. The Purchaser acknowledges and agrees that:
2.1. the Warranties are the only representations given by or on
behalf of the Warrantors on which the Purchaser may rely in
entering into this agreement;
2.2 without prejudice to the Purchaser's contractual rights pursuant
to the Tax Covenant no other representation other than a
fraudulent representation made by or on behalf of the Vendors or
any of their agents may form the basis of (or be pleaded in
connection with) any claim by the Purchaser under or in
connection with this agreement and/or the Tax Covenant;
2.3 it shall not be entitled to recover damages or otherwise obtain
restitution more than once in respect of the same loss, damage,
deficiency, breach, cause of action or other set of
circumstances, whether under the Warranties and/or the Tax
Covenant;
77
2.4 it shall in no circumstances be entitled to rescind the
agreement save in respect of any breach of the warranties and
representations set out Part 3A and paragraphs 1 and 2 of Part
3B of the Schedule in respect of Contract Shares representing,
directly or indirectly, greater than 2% of the issued share
capital of the Company;. In the event of any such breach of the
said warranties the Warrantors shall be permitted a period of
not less than three months following notification of such claim
to the Warrantors to remedy or procure the remedy of such breach
before the Purchaser shall be entitled to exercise its remedy
under this paragraph 2.4 In the event of any such breach of the
said warranties relating to Contract Shares representing,
directly or indirectly, not greater than 2% of the issued share
capital of the Company the Warrantors undertake to procure a
remedy to such breach within the period of three months
following notification of such claim to the Warrantors.
78
PART 4B
Limitation of Liability - The General Warranties
1. The Purchaser acknowledges and agrees that any claim by it in connection
with the General Warranties ("a Claim") shall be subject to the
following provisions of this part of the Schedule and if any other
provision of this agreement appears to be inconsistent with the
provisions of this part of the Schedule, the provisions of this part of
the Schedule shall prevail.
2. The Purchaser shall not be entitled to make a Claim:-
2.1 to the extent that the Claim in question would not have arisen
but for a change in legislation or common law taking effect
after the Completion Date or the withdrawal of any
extra-statutory concession previously made by the Inland Revenue
(whether or not the change purports to be effective
retrospectively, in whole or in part);
2.2 to the extent that the Claim in question arises by reason of a
voluntary act, omission or transaction other than in the
ordinary course of business carried out at the request of or
with the written consent of the Purchaser before Completion or
under the terms of this agreement or any other agreement
contemplated by it;
2.3 to the extent that the Claim in question arises by reason of a
voluntary act, omission or transaction other than in the
ordinary course of business carried out (other than pursuant to
a legally binding commitment of the Company entered into prior
to Completion) by the Company after Completion;
2.4 to the extent that allowance, provision or reserve in respect of
the matter or thing giving rise to the Claim in question has
been made in the Accounts, the Management Accounts or the
Completion Balance Sheet;
2.5 in respect of any matter which would give rise to a Claim, if
any member of the Purchaser Group is entitled to claim under any
policy of insurance unless and until the appropriate member of
the Purchaser Group shall have made a claim against the insurers
and used all reasonable endeavours to pursue such insurance
claim and any Claim shall then reduce or extinguish by the
amount recovered pursuant to such insurance claims; or
2.6 in respect of any matter which would give rise to a Claim, if
any member of the Purchaser Group would have been entitled under
a policy of insurance had any of them
79
maintained in force the policies of insurance maintained by the
Company prior to Completion (including without limitation, the
professional indemnity insurance maintained by the Company with
St. Paul's Insurance) or policies providing equivalent cover
thereto and any Claim shall reduce or extinguish by the amount
which could have been recovered pursuant to a claim under such
insurance policy.
3. In the absence of dishonesty on the part of the Vendors and their
agents, the Purchaser shall give written notice of the circumstances
giving rise to the Claim in question to the Warrantors as soon as
reasonably practicable after it becomes aware of those circumstances
and, in any event, prior to the second anniversary of the Completion
Date (it being agreed that the liability of the Warrantors in respect of
any Claim shall absolutely determine if proceedings in respect of it
have not been commenced and served within 6 months of service of such
written notice or, if later, within 6 months of the last action taken by
the Company and/or the Purchaser pursuant to clause 4 of this part of
the Schedule); or
4. In calculating the liability of the Warrantors in respect of any Claim,
there shall be taken into account the amount by which any Taxation for
which the Company is liable is reduced or extinguished as a result of
the matter giving rise to such liability.
5. If a Claim arises in connection with a liability or alleged liability to
a third party (other than a Customer under a Material Customer
Contract):
5.1 the Purchaser shall take (and shall procure that the Company
takes) such action to avoid, dispute, resist, appeal, compromise
or contest the liability as may reasonably be requested by the
Warrantors who shall, at their own expense, be entitled to have
the conduct of any dispute, compromise, defence or appeal of the
dispute and of any incidental negotiations and shall consult
with the Purchaser in respect thereof as the Warrantors
reasonably consider to be appropriate; and
5.2 the Purchaser will (and shall procure that the Company and their
respective professional advisers will) make available to the
Warrantors such persons and all such information as the
Warrantors may reasonably require for avoiding, disputing,
resisting, appealing, compromising or contesting any such
liability.
6. If a claim arises in connection with a liability or alleged liability to
a third party who is a Customer under a Material Customer Contract, the
Purchaser shall be entitled to have the conduct of any
80
dispute, compromise, defence or appeal of the dispute and of any
incidental negotiations and shall consult with the Warrantors in respect
thereof as the Purchaser reasonably considers to be appropriate.
7. The parties agree that the Purchaser shall have a duty to mitigate its
loss in respect of any matter giving rise to a Claim.
8. Where the Purchaser or the Company has a right of recovery/reimbursement
(in whole or in part) against some person other than the Warrantors in
respect of any matter giving rise to a Claim:-
8.1 the liability of the Warrantors shall be reduced by the amount
received by the Purchaser and/or the Company pursuant to such
right; and
8.2 the Purchaser shall:-
8.2.1 take (and shall procure that the Company shall take)
such action as is reasonably necessary to enforce such a
right, subject always to the Warrantors indemnifying the
Purchaser, on demand, against all reasonable costs
incurred in enforcing such right;
8.2.2 keep the Warrantors informed of progress made in
enforcing such right; and
8.2.3 as soon as reasonably practicable after the date on
which recovery is made/reimbursement received, make
repayment to the Warrantors to the extent of the sums so
recovered (up to a maximum of the amount actually paid
by the Warrantors in respect of the relevant Claim).
9. Any payment made by the Warrantors in respect of a Claim shall be deemed
to be a reduction in the consideration for the sale of the Contract
Shares.
81
PART 5
The Leasehold Property
Scottish Properties
1. Glasgow
(a) Address: ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇.
(b) Lease: Sub-lease by the trustees acting under the discretionary
trusts of (i) Sir ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇-Menteth and (ii) Lady
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇-Menteth and Datavault Limited dated
29/3/90 as amended by (i) agreement between the same parties
dated 21/3/98 and subsequent dates and registered in the Books
of Council & Session on 8/4/98 and (ii) Minute of Amendment
between the same parties dated 7th, 8th, 25th and 30 January
1999.
(c) Duration: 29/3/90 to 28/3/2024.
(d) Rent: (pound)150,000.
(e) Next rent review: 29/3/2003.
2. Port Glasgow
(a) Premises: ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇.
(b) Lease: Offer by Clydeport Operations Limited to Datavault plc
dated 18/5/98 with acceptance thereon by Datavault plc dated
20/5/98.
(c) Duration: 1/9/97 to 31/3/2007 -- Datavault can terminate in
whole or part at 30/12/2003 subject to giving 6 months prior
notice. Landlord can terminate on 6 months notice for
redevelopment or port use activities, subject to providing
tenant with alternative accommodation.
(d) Rent: 1/3/98 to 1/10/99 - (pound)40,000;
1/10/99 to 30/9/2000 - (pound)100,000;
1/10/2000 to 1/4/2003 - (pound)130,000;
(e) Next rent review: 1/4/2003 -- index linked increase subject to
minimum of (pound)1 per square foot.
3. Inverkeithing -- ▇▇▇▇ ▇▇
(a) Premises: ▇▇▇▇ ▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇.
(▇) Lease: Lease between Standard Life Assurance Company and
Datavault Limited dated 29/8/95 and 14/9/95 and registered in
the Books of Council & Session on 4/10/95.
(c) Duration: 1/7/95 to 1/2/2014 -- mutual break at 2/2/99, 2004,
2009 subject to 6 months prior notice.
(d) Rent: (pound)23,075 (review at 2/2/99 outstanding -- landlord's
proposed rent of (pound)35,000).
(e) Next rent review: 2/2/2004.
4. Inverkeithing -- Units 27/28
(a) Property: ▇▇▇▇▇ ▇▇/▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
Inverkeithing.
82
(b) Lease: Lease between Standard Life Assurance Company and Newey &
Eyre Group Limited dated 8/6/89 and 4/7/89 and registered in the
Books of Council & Session on 28/7/89 as varied by assignation
by Newey & Eyre Group Limited to Datavault Limited dated
12/11/90 and subsequent dates and registered in the Books of
Council & Session on 20/3/91.
(c) Duration: 2/5/89 to 1/2/2014 -- mutual breaks at 1994, 1999,
2004 and 2009 subject to 6 months prior notice.
(d) Rent: (pound)49,525 (review at 2/2/99 outstanding -- landlord's
proposed figure of (pound)82,650).
(e) Next rent review: 2/2/2004.
5. Inverkeithing -- ▇▇▇▇ ▇▇
(a) Property: ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇.
(▇) Lease: Lease between Longfirst Limited and Datavault plc dated
9th and 23rd June 1998 and registered in the Books of Council &
Session on 10th July 1998.
(c) Duration: 1/5/98 to 2/2/2014 -- mutual breaks at 2/2/2004 and
2009 subject to 6 months prior notice.
(d) Rent: (pound)25,250.
(e) Next rent review: 1/5/2003.
English Properties
6. Bristol -- ▇▇▇▇ ▇▇
(a) Property: ▇▇▇▇ ▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇.
(b) Lease: A lease dated 11th October 1995 and made between
Industrial Properties (▇▇▇▇▇▇ ▇▇▇▇) Limited and Cabot Industrial
Development Company Limited and ▇▇▇▇▇▇ ▇▇▇▇ Properties Limited
(1) and Datavault plc (2).
(c) Duration: For five years from and including 29th September 1995
to and including 28th September 2000. There were two options to
break, both exercisable by the tenant only. The first has
already passed -- 24th June 1997. The second opportunity is
still available -- 28th September 1999 upon the tenant giving to
the landlord not less than six months' written notice.
(d) Rent: The rent is stated as being (pound)7,300 for the ground
floor of the premises. Should the tenant wish to occupy the
first floor of the premises, it is/was to give three months'
written notice and (pound)19,700 would then become payable --
presumably in relation to both floors together. Upon a further
notice of three months, the tenant could also notify the
landlord that it wished to occupy the second floor, upon which
(pound)30,300 would become due.
(e) Next Rent Review: Not applicable -- only a five year term.
7. Reading -- ▇▇▇▇ ▇
(▇) ▇▇▇▇▇▇▇▇: ▇▇▇▇ ▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Spencers Wood,
Reading, Berkshire.
(b) Lease: A lease dated 3rd December 1996 made between Derwent
Valley Property Investments Limited (1) and Datavault plc (2).
(c) Duration: Ten years commencing on 29th November 1996 and
therefore expiring on 28th November 2006. The lease contains a
tenant's right to break on 29th November 2001 upon six months'
prior written notice.
83
(d) Rent: A stepped rental applies for the first five years and for
the sixth year and onwards there will be a rent review. The
initial steps are: (pound)31,000 per annum for the first two
years; (pound)33,000 for the third and fourth years; and
(pound)35,000 for the fifth year. There was a rent-free period
of five months.
(e) Next Rent Review: 29th November 2001.
8. 4th Floor at Blocks A & B London
(a) Address: Fourth Floor at Block A and ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇.
(b) Lease: A lease dated 29th October 1996 made between Solematic
Limited (1) and Datavault plc (2).
(c) Duration: For the term 17th October 1996 to 30th June 2000 (both
dates inclusive). There was a mutual right to break the lease at
the end of March 1998. No more break clauses are available.
(d) Rent: (pound)22,750 per annum.
(e) Next Rent Review: Not applicable -- too short a term.
9. ▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇, ▇▇▇▇▇▇
(a) Address: ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇, ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
(b) Lease: A lease dated 24th August 1995 made between Solematic
Limited (1) and Datavault Limited (2).
(c) Duration: Five years beginning on 30th June 1995, ie down to
(and including) 29th June 2000. There was a mutual option to
determine the lease at the end of December 1996. (The
uncompleted deed of variation drafted in 1996 was going to push
this back to December 1997).
(d) Rent: For the first year of the term, (pound)24,000; for the
second, (pound)26,000; and for the third, fourth and fifth
years, (pound)28,000 per annum.
(e) Next Rent Review: Not applicable -- too short a term.
10. ▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇ ▇ & ▇, ▇▇▇▇▇▇
(a) Address: Fifth Floor at Block A and ▇▇▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇,
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇
(b) Lease: A lease dated 25th April 1996 made between Solematic
Limited (1) and Datavault plc (2).
(c) Duration: The fixed term of 25th April 1996 to 30th June 2000.
(d) Rent: (pound)17,250 per annum.
(e) Next Rent Review: Not applicable -- too short a lease for a
review to be included.
11. Oldham
(a) Address: Part of Heron Mill, Heron Street, Oldham.
84
(b) Lease: A lease dated 1st April 1996 and made between ▇ ▇▇▇▇▇▇▇▇
And Sons Limited (1) and Datavault plc (2).
(c) Duration: From 1st April 1996 for ten years, namely 2nd April
1996 to 1st April 2006 (both dates inclusive). There are two
opportunities for the tenant only to effect a break of the lease
-- at the end of the sixth and ninth years of the term -- ie.
(technically the 1st April but no doubt the parties will work
to) 31st March 1999 and 2002.
(d) Rent: (pound)45,000 per annum until review. There was a four
month rent-free period.
(e) Next Rent Review: 1st April 2001.
12. Kemble -- Unit A2
(a) Address: Building A2 at Kemble Sub Depot, ▇▇▇▇▇▇,
Gloucestershire.
(b) Lease: A lease dated 27th July 1998 made between The Secretary
of State for Defence (1) and Datavault plc (2).
(c) Duration: Commencing on 24th June 1998 and expiring on 24th
December 2005 (both dates inclusive). There is a tenant's only
break clause, excerisable at the end of the third year (ie. to
break on 23rd June 2001) upon not less than six months' written
notice.
(d) Rent: (pound)90,000 per annum. There was a rent free-period of
six months.
(e) Next Rent Review: Notwithstanding the length of the lease, there
is NO rent review.
NB This tenancy is contracted out of the Landlord and ▇▇▇▇▇▇ ▇▇▇
▇▇▇▇ and accordingly does not attract the statutory right to a
renewal lease and to compensation.
13. Kemble -- Unit D1
(a) Address: Building D1 at Kemble Sub Depot, ▇▇▇▇▇▇,
Gloucestershire.
(b) Lease: A lease dated 24th October 1997 made between The
Secretary of State for Defence (1) and Datavault plc (2).
(c) Duration: A term of five years commencing on 1st September 1996,
ie. to expire on 31st August 2001. There is a tenant's only
break clause at the end of the third year (ie. to determine on
31st August 1999) upon giving not less than three months'
written notice to the landlord.
(d) Rent: (pound)45,000 per annum. There was a rent-free period of
one year.
(e) Next Rent Review: No rent review -- only a five year term.
NB The tenancy is contracted out of the Landlord and ▇▇▇▇▇▇ ▇▇▇
▇▇▇▇.
14. Bristol -- ▇▇▇▇ ▇▇
(a) Address: ▇▇▇▇ ▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇.
(▇) Lease: Undocumented arrangement.
(c) Duration: Indefinite.
(d) Rent: Not known.
(e) Rent Review: Not applicable.
85
Part 6
Preparation of the Completion Balance Sheet
1. The Completion Balance Sheet shall be prepared on a basis consistent
with and applying the accounting principles used in the Accounts, and
subject thereto and subject to the next paragraph, applying generally
accepted accounting principles in the United Kingdom.
2. The following adjustments will be made in preparing the Completion
Balance Sheet:-
2.1. Subject to paragraphs 2.2, 2.3 and 2.4 below, all accruals and
prepayments in respect of recurring payments of the Company will be
included in the Completion Balance Sheet by reference to the position at
close of business on the Completion Date but shall be computed as if the
Completion Date were the 28 February 1999.
2.2. The benefit of the ordinary course trading of the Company on Saturday 27
February 1999 and Sunday 28 February 1999 shall be included in the
Completion Balance Sheet as if such trading had taken place prior to
close of business on the Completion Date.
2.3. All sales invoices raised by the Company and dated Sunday 28 February
1999 recognising income earned by the Company up to 28 February 1999
shall be included in the Completion Balance Sheet as sales income and as
debtors.
2.4. Provision shall be made for the first tranche of the Employee Bonus
Award Scheme of (pound)400,000 payable in [October 1999] (which figure
includes employer's national insurance contributions), and such first
tranche of the Employee Bonuses shall be assumed to be fully deductible
for corporation tax purposes in the period. No provision shall be made
for the second tranche of the Employee Bonuses of (pound)400,000 payable
in May 2000.
2.5. The tax losses carried forward at 31 March 1998 of (pound)40,281 in
respect of the Datavault North West trade will be assumed to be capable
of being fully utilised in the period by set off against the profits of
the Datavault North West trade arising in the period ending on the
Completion Date
2.6. The contributions of (pound)475,000 made by the Company to the pension
plans of ▇▇ ▇▇▇▇▇▇-Menteth, ▇▇▇ ▇▇▇▇▇▇-Menteth and ▇▇ ▇▇▇▇▇▇ will be
assumed to be fully deductible for corporation tax purposes in the
period ending on the Completion Date.
86
2.7. The advance corporation tax of (pound)110,398 payable by the Company on
14 March 1999 in respect of the payment of (pound)441,590 made by the
Company in respect of the purchase by the Company of its own shares on
24 February 1999 will be included both as a creditor and a debtor.
x x AHBV
x x CSM
x x NSM
x x ETL
x x JA
x x GB
x x OAL
x x JGC
x x
(as attorney)
x /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ x JWM as attorney
x /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇-Menteth x CSM
x /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇-Menteth x CSM as attorney
x /s/ ▇. ▇▇▇▇▇▇-Menteth x NSM
x /s/ ▇▇▇▇ ▇▇▇▇▇▇ x JC
x /s/ ▇▇▇▇ ▇▇▇▇▇▇ x JC as attorney
/s/ [ILLEGIBLE] (ATTORNEY)
/s/ [ILLEGIBLE]
/s/ [ILLEGIBLE]