1
Exhibit 2.2
DATED 2000
-------------------------------------------------------------------------------
(1) C.I. LAW TRUSTEES LIMITED
(2) WARM WOOL AND PILE LIMITED
-and-
(3) AETHER SYSTEMS, INC.
----------------------------------------
SHARE PURCHASE AGREEMENT
- relating to -
IFX Group Limited
----------------------------------------
▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇
▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
▇▇▇ (▇▇) ▇▇▇▇ ▇▇▇▇
2
INDEX
CLAUSES PAGE NO.
------- --------
1. INTERPRETATION................................................................................1
2. SALE AND PURCHASE.............................................................................7
3. COMPLETION....................................................................................8
4. WARRANTIES...................................................................................12
5. WARRANTY LIMITATIONS.........................................................................14
6. INDEMNIFICATION..............................................................................14
7. RETENTION....................................................................................15
8. CONFIDENTIALITY..............................................................................18
9. ANNOUNCEMENTS, ETC...........................................................................18
10. COSTS........................................................................................18
11. ASSIGNMENT...................................................................................19
12. EFFECT OF COMPLETION.........................................................................19
13. ENTIRE AGREEMENT.............................................................................19
14. WAIVER, AMENDMENT............................................................................19
15. FURTHER ASSURANCES...........................................................................20
16. PAYMENTS.....................................................................................20
17. TRUSTEE'S UNDERTAKING........................................................................20
18. NOTICE.......................................................................................21
19. COUNTERPARTS.................................................................................22
20. GOVERNING LAW AND SUBMISSION TO JURISDICTION.................................................22
21. INVALIDITY...................................................................................22
Schedule 1 Part 1: Particulars relating to the Company.............................................24
Schedule 1 Part 2: Particulars relating to Subsidiaries IFX (UK) Limited..........................25
Schedule 2 Part 1: Ownership of Shares of the Company.............................................33
Part 2 : Ownership of Shares of the Subsidiaries and Intext.............................33
Schedule 3 Warranties..............................................................................35
Schedule 4 Tax Deed................................................................................64
3
Schedule 5 The Properties..........................................................................76
Schedule 6 Limitations of Liability................................................................79
Exhibit A..................................................................................Option Deed
4
THIS AGREEMENT is made the day of April 2000
BETWEEN:-
(1) C.I. LAW TRUSTEES LIMITED, a company registered in Jersey, whose
registered office is at Westaway ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇. ▇▇▇▇▇▇,
▇▇▇▇▇▇ ("CILT");
(2) WARM WOOL AND PILE LIMITED, a company registered in Belize, whose
registered office is at ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ("WWP");
(each a "Seller" and together the "Sellers");
and
(3) AETHER SYSTEMS, INC. of ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇,
▇.▇.▇. (the "Purchaser").
WHEREAS:-
(A) IFX Group Ltd is a private limited company incorporated in England under
the Companies Acts under number 03224875 ("the Company"), having an
authorised and issued share capital as specified in Part 1 of Schedule
1.
(B) IFX Group Ltd has direct and an indirect subsidiaries, and a
shareholding in Intext IFX Pte Limited, as detailed in Schedule 2.
(C) The Sellers are the registered holders, and are able to procure the
transfer, free from all liens, charges and encumbrances, of all of the
issued and outstanding shares in IFX Group Ltd.
(D) The Sellers wish to sell, and the Buyer wishes to purchase, all such
shares.
(E) Each of CILT and WWP have made warranties to the Purchaser in the terms
of the warranties set out in this Agreement, subject only as provided in
this Agreement and the Disclosure Letter, with the intent that the
Purchaser should rely, and the Purchaser does rely, on such warranties
in entering into this Agreement.
(F) CILT is holding those of the Shares registered in its name on behalf of
the Trust. CILT is the trustee of the Trust.
IT IS HEREBY AGREED as follows:-
1. INTERPRETATION
1.1. The following provisions shall, unless the context otherwise
requires, have effect for the interpretation of this Agreement.
-1-
5
1.2. The following words and expressions shall have the following
meanings:-
"Accounts Date" 30 June 1999;
"Account Holders" has the meaning set out in Clause 7.1;
"Accounts" the audited consolidated financial statements
(comprising a consolidated balance sheet, profit and
loss account, cash flow statement, notes and directors'
report and auditors' report) of the Company and the
Group, and audited financial statements (including a
balance sheet and profit and loss account) of each of
the Subsidiaries (other than IFX France) and Intext, in
each case as at and for the financial period ended on
the Accounts Date and, in each case, copies of which
are attached to the Disclosure Letter;
"agreed form" means in the form agreed between the parties and
initialled by or on behalf the parties hereto as being
"in agreed form";
"associated company" has the meaning set out in sections 416 et seq. T.A.;
"Company" the company described in Recital (A);
"Completion" the completion of the sale and purchase of the Shares
in accordance with Clause 2;
"Completion Date" the date upon which Completion takes place or, as the
context may require, is scheduled to take place;
"connected person" a connected person as defined in Section 839 T.A.;
"Deed of Covenant" a deed in the agreed form to be executed by the parties
thereto at Completion;
"Disclosure Letter" a letter of today's date together with the attachments
thereto addressed by CILT to the Purchaser disclosing
exceptions to the Warranties;
"Encumbrance" any mortgage, charge (whether fixed or floating),
pledge, lien, security interest or other third party
right or interest (legal or equitable)
-2-
6
over or in respect of the relevant asset,
security or right;
"FA" or "F.(No.2)A" followed by a stated year mean the Finance Act or the
Finance (No. 2) Act of that year;
"GAAP" generally accepted accounting principles and practices;
"Group the Company and the Subsidiaries;
"Group Company" the Company and/or any of the Subsidiaries;
"holding company" a holding company as defined in Section 736 of the
Companies ▇▇▇ ▇▇▇▇;
"Intellectual Property" patents, trade marks, service marks, rights (registered
or unregistered) in any designs; applications for any
of the foregoing; trade or business names; copyright
and topography rights; know-how; secret formulae and
processes; lists of suppliers and customers and other
confidential and proprietary knowledge and information;
rights protecting goodwill and reputation; database
rights and rights under licences and consents in
relation to such things and all rights or forms of
protection of a similar nature to any of the foregoing
or having equivalent effect anywhere in the world;
"Intellectual Property Agreements" agreements or arrangements relating in any way whether
wholly or partly to Intellectual Property;
"Intext" Intext IFX Pte. Limited, a corporation incorporated in
Singapore with registration number 199702893E and
having its registered office at ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇-▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ (▇▇▇▇▇▇);
"Intext Shares" the shares of Intext, constituting 50% of the equity
(and holding 50% of the voting rights) of Intext, as
listed in Schedule 2;
-3-
7
"ITA" the Inheritance Tax ▇▇▇ ▇▇▇▇ and any reference thereto
shall include any enactment replaced or modified
thereby as if Section 275 I.T.A. applied in like manner
to this Agreement;
"IT Contracts" any agreements or arrangements with third parties
relating to IT Systems or IT Services, including all
hire purchase contracts or leases of Hardware owned or
used by the Company, licences of Software owned or used
by the Company, and other IT procurement;
"IT Services" any services relating to the IT Systems or to any other
aspect of the Company's data processing or data
transfer requirements, including facilities management,
bureau services, hardware maintenance, software
development or support, consultancy, source code
deposit, recovery and network services;
"IT Systems" Hardware and/or Software owned or used by the Company;
"Hardware" any and all computer, telecommunications and network
equipment;
"Listed Intellectual Property" Intellectual Property referred to in the list annexed
to the Disclosure Letter;
"Listed Intellectual Property Intellectual Property Agreements set out in the list
Agreements" annexed to the Disclosure Letter;
"Management Accounts" the unaudited financial statements of the Company and
the Group for the period from the Accounts Date to the
Management Accounts Date in the form enclosed with the
Disclosure Letter;
"Management Accounts Date" 29 February 2000;
"Payment Date" has the meaning set out in Clause 7.2;
"Permitted Tax Liability" in relation to the Trust, any taxation liability
arising out of the sale of the Shares registered in the
name of the Trustee pursuant to this Agreement;
-4-
8
"Permitted Trust Liability" in relation to the Trust, any taxation liability or any
other liability arising from the administration of the
Trust (other than any liability of the Trustee as
Seller or otherwise pursuant to this Agreement
(including, for the avoidance of doubt pursuant to the
Warranties) or the Tax Deed) and properly payable from
assets of the Trust, other than a Permitted Tax
Liability, provided that the aggregate of all such
liabilities shall not exceed US$250,000;
"Property" or "Properties" the property or properties full particulars of which
are set out in Schedule 5 or any part or parts thereof;
"Purchaser's Lawyers" ▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ of ▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇;
"Retention" has the meaning set out in Clause 7.1;
"Retention Account" has the meaning set out in Clause 7.1;
"Sellers' Lawyers" CMS ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ of ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇;
"Service Agreement" the service agreement to be entered into between Bo
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ and the Company in the agreed form;
"Shares" the issued and allotted shares of the Company specified
in Schedule 1;
"Software" any and all computer programs in both source and object
code form, including all modules, routines and
sub-routines thereof and all source and other
preparatory materials relating thereto, including user
requirements, functional specifications and programming
specifications, ideas, principles, programming
languages, algorithms, flow charts, logic, logic
diagrams, orthographic representations, file
structures, coding sheets, coding and including any
manuals or other documentation relating thereto and
computer generated works;
-5-
9
"subsidiary" a subsidiary as defined in Section 736 of the Companies
▇▇▇ ▇▇▇▇;
"Subsidiary" a subsidiary of the Company;
"T.A." The Income and Corporation Taxes ▇▇▇ ▇▇▇▇;
"Tax Warranties" Those of the Warranties set out in Part J of Schedule 3;
"Tax Deed" a deed to be executed by the parties thereto at
Completion in the form set out in Schedule 4;
"T.C.G.A." the Taxation of Chargeable Gains ▇▇▇ ▇▇▇▇;
"Trust Assets" in relation to the Trust, the aggregate of the cash
sums paid to the Trustee pursuant to Clause 3.5.4,
together with such assets as may result from the
investment of such sums less an amount equal to any
Permitted Trust Liability incurred prior to the date of
this Agreement not exceeding US$100,000;
"Trust" The Sherborne Trust, a trust established under the laws
of the Island of Jersey;
"Trust" The Sherbourne Trust;
"Trustee" CILT;
"V.A.T.A" the Value Added Tax ▇▇▇ ▇▇▇▇;
"Warranties" the warranties set out in Schedule 3;
1.3. Words, expressions and abbreviations defined in the Tax Deed
shall have the same meanings in this Agreement.
1.4. References to the parties hereto include their respective
permitted assignees and/or the respective successors in title to
substantially the whole of their respective undertakings and, in
the case of individuals, to their respective estates and
personal representatives.
1.5. References to statutes or statutory provisions include
references to any orders or regulations made thereunder and
references to any statute, provision, order or regulation
include references to that statute, provision, order or
regulation as amended, modified, re-enacted or replaced from
time-
-6-
10
to-time before the date hereof (subject as otherwise expressly
provided in this Agreement) but provided always that this
sub-clause will not operate to increase the liability of any of
the Sellers in respect of any such modification, re-enactment or
replacement made after the date of this Agreement.
1.6. References to persons shall include bodies corporate and
unincorporated, associations, partnerships and individuals.
1.7. Words denoting the singular shall include the plural and vice
versa and words denoting any gender shall include all genders.
1.8. Headings to clauses, sub-clauses and paragraphs and descriptive
notes in brackets relating to provisions of taxation statutes
are for information only and shall not form part of the
operative provisions of this Agreement.
1.9. References to Recitals, Clauses or Schedules are to recitals to,
clauses of and schedules to this Agreement. References to
Sections are to sections of the Warranties.
1.10. The Recitals and Schedules form part of the operative provisions
of this Agreement and references to this Agreement shall, unless
the context otherwise requires, include references to the
Recitals and the Schedules, but shall not, for the avoidance of
doubt, include the Tax Deed.
2. SALE AND PURCHASE
2.1. Sale and Purchase: Subject to the terms and conditions of this
Agreement, the Sellers shall sell with full title guarantee, and
the Purchaser shall purchase, all of the Shares with effect from
the commencement of business on the Completion Date free from
all Encumbrances and together with all accrued benefits and
rights attaching thereto.
2.2. Waiver of rights of Pre-emption: Each of the Sellers hereby
waives any rights of pre-emption or first refusal or other
rights he or she may have under the articles of association of
the Company or otherwise.
2.3. Consideration:
2.3.1. The consideration for such sale and purchase shall be
the total sum of US$85,000,000 to be satisfied as
follows:-
a) the sum of US$5,000,000 shall be paid into the
Retention Account in the manner provided in
Clause 7.1 and shall be dealt with in accordance
with Clause 7; and
b) the balance shall be paid in cash at Completion
in the manner provided in Clause 3.5.4.
-7-
11
2.3.2. No later than 90 days from the date of this Agreement,
CILT shall receive an Option Deed, substantially similar
to the one attached hereto as Exhibit A, for ordinary
shares of a new entity to be formed ("Newco") in an
amount equal to 1.5% of Newco's initial capitalization
on a fully diluted basis with an exercise price based on
a valuation of Newco of US$200 million; or if Newco has
not been formed, then ordinary shares of the Company in
an amount equal to 1.5% of the capitalization on a fully
diluted basis of the Company on the date of this
Agreement with an exercise price based on a valuation of
the Company of US$100 million. Upon the formation of
Newco, CILT shall immediately forfeit the Option Deed
with respect to ordinary shares of the Company and shall
promptly receive an Option Deed with respect to ordinary
shares of Newco as set forth in this Clause 2.3.2. The
grant date for purposes of the Option Deed shall be the
date hereof.
3. COMPLETION
3.1. Location: Completion shall take place immediately following the
signing of this Agreement at the offices of the Purchasers'
Lawyers or at such other time or place as the Sellers and the
Purchaser may agree.
3.2. Sellers' Delivery: On Completion each of the Sellers shall
deliver to the Purchaser:-
3.2.1. transfers in common form relating to those of the Shares
to be sold by him hereunder duly executed in favour of
the Purchaser or its nominee;
3.2.2. share certificates relating to such Shares;
3.2.3. any waivers or consents by shareholders of the Company
or the Subsidiaries or other person which the Purchaser
may reasonably require so as to enable the Purchaser or
its nominee to be registered as the holders of the
Shares;
3.2.4. effective written resignations under seal of W.
Ahlefeldt-Laurvig as director of the Company, of
▇▇▇▇▇▇▇▇ St. ▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇ St. ▇▇▇▇▇ ▇▇▇▇▇▇ as
directors of IFX Infoforex Limited, of C.I. Law Services
Limited as secretary of IFX Infoforex Limited and of
Mitre Secretaries Limited as secretary of the Company
and IFX (UK) Limited and from any employment of or by
the Company or the Subsidiaries containing a
confirmation that they have no claim against the Company
or any of the Subsidiaries for compensation for loss of
office or termination of employment or otherwise whether
statutory or otherwise or for unpaid remuneration;
-8-
12
3.2.5. the common seals, certificates of incorporation,
statutory books, share certificate books, and all copies
of the memorandum and articles of association of each
Group Company incorporated in the United Kingdom and
copies of the equivalent documents (if any) in respect
of Group Companies incorporated outside the United
Kingdom;
3.2.6. all books of account and other records, cheque books and
all insurance policies in any way relating to or
concerning the respective businesses of each Group
Company, provided that the Sellers may discharge this
obligation by delivering all such items into the
Purchaser's possession at the premises of each Group
Company;
3.2.7. a counterpart of the Tax Deed duly executed by CILT;
3.2.8. deliver to the Purchaser's Lawyers a counterpart of the
service agreement of ▇▇. ▇▇▇▇▇ with the Company in the
agreed form, duly executed by ▇▇ ▇▇▇▇▇;
3.2.9. duly executed transfers of the 10 shares of 10,000
pesetas each held by W. Ahlefeldt-Laurvig in IFX
Finanzas Espania S.A. in favour of the Purchaser or its
nominee;
3.2.10. share certificates relating to all of the issued shares
of each of the Subsidiaries incorporated in the United
Kingdom and Jersey;
3.2.11. a release in the agreed form duly executed under seal by
▇▇. ▇▇▇▇▇, ▇▇. ▇. ▇▇▇▇▇▇▇▇▇-Laurvig, Mr. F.
Ahlefeldt-Laurvig, ▇▇. ▇▇▇▇▇▇▇▇ and the Sellers, in a
form satisfactory to the Purchaser, releasing the
Company and the Subsidiaries from any liability
whatsoever (actual or contingent) which may be owing to
any of them by the Company or any of the Subsidiaries
except for liabilities under specified continuing
service or employment, consultancy or similar contracts
between the Company and/or any Group Company and such
persons and indemnifying the Purchaser's Group in
respect of any claims which may be brought against any
of the Purchasers or any member of the Purchaser's Group
with respect to any such liability subsisting at the
Completion Date;
3.2.12. the Deed of Covenant duly executed by Bo ▇▇▇▇▇ Heogh
Kroll, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇-Laurvig, ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇-Laurvig and ▇▇▇▇ ▇▇▇▇▇▇▇▇;
3.2.13. the executed Amending Agreement and evidence of the
directorship of Elisabeth Mulijohardjo of Intext Pte
Limited as at the date of execution of the Amending
Agreement;
-9-
13
3.2.14. evidence that all of the options held by Warm Wool and
Pile Limited over shares in the Company or any
Subsidiary have been exercised or cancelled; and
3.2.15. releases in agreed form from each of ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇.
▇▇▇▇▇▇▇▇▇-Laurvig and ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇-Laurvig
releasing the Company and each Subsidiary from any and
all liabilities which may be owing by the Company or any
Subsidiary to each of them or to any of their respective
connected persons or associated companies.
3.3. Board Resolutions of the Company and IFX Infoforex (UK) Limited:
At Completion (and prior to the taking effect of the
resignations of the Directors referred to in Clause 3.2.4) the
Sellers shall procure the passing of board resolutions of the
Company and IFX Infoforex (UK) Limited:-
3.3.1. approving and sanctioning for registration (subject
where necessary to due stamping) the transfers in
respect of the Shares and any shares to which Clause
3.2.11 refers;
3.3.2. appointing such persons as the Purchaser may nominate to
be the directors and secretary of the Company and IFX
Infoforex (UK) Limited;
3.3.3. revoking all mandates to bankers of the Company or IFX
Infoforex (UK) Limited of any director or secretary
resigning under Clause 3.2.4 and giving authority in
favour of the directors appointed under Clause 3.3.2 or
such other persons as the Purchaser may nominate to
operate the bank accounts thereof;
3.3.4. resolving that the registered office of the Company and
IFX Infoforex (UK) Limited be changed to ▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇; and
3.3.5. approving the execution of the Service Agreement.
3.4. Board Resolutions of Other Group Companies: At completion (and
prior to the taking effect of the resignations referred to in
Clause 3.2.4) the Sellers shall procure the passing of board or
shareholders resolutions of the Subsidiaries (other than IFX
Infoforex (UK) Limited) or the taking of such other actions with
respect to such Subsidiaries as are required under applicable
law to:-
3.4.1. approve the transfers in respect of any shares of such
Subsidiaries to which Clause 3.2.11 refers;
3.4.2. appoint such persons as the Purchaser may nominate to be
officers or directors (or equivalent in the relevant
jurisdictions) of such Subsidiaries; and
-10-
14
3.4.3. revoke all mandates to bankers of the such Subsidiaries
of any director or secretary (or equivalent in the
relevant jurisdiction) resigning under Clause 3.2 4 and
giving authority in favour of the persons appointed
under Clause 3.4.2 or such other persons as the
Purchaser may nominate to operate the bank accounts
thereof.
3.5. Purchaser's Delivery: Upon compliance by the Sellers with the
provisions of Clauses 3.2, 3.3 and 3.4, the Purchaser shall:-
3.5.1. deliver to the Sellers' Lawyers a counterpart of the Tax
Deed duly executed by the Purchaser;
3.5.2. deliver to the Seller's Lawyers a counterpart of the
Service Agreement duly executed by the Company;
3.5.3. pay the sum of US$5,000,000 to the Retention Account;
and
3.5.4. pay the sum of US$77,450,000 to the following bank
account for and on behalf of CILT and the sum of
US$2,550,000 to the following bank account for and on
behalf of WWP:-
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇
Sort Code: 30 00 09
Account Number: ▇▇▇▇▇▇▇▇
3.6. Payment Method: All sums payable by the Purchaser pursuant to
Clauses 3.5.3 and 3.5.4 shall be paid by wire transfer for the
same day value to the banks at the accounts specified, whose
receipt shall be an effective discharge of the Purchaser's
obligation to pay such sum to the Sellers. The Purchaser shall
not be concerned to see to the application or be answerable for
the loss or misapplication of such sums.
3.7. Waiver: The Purchaser may in its absolute discretion waive any
requirement contained in Clause 3.2. The Purchaser shall not be
obliged to complete the purchase of any of the Shares unless the
purchase of all the Shares is completed in accordance with this
Agreement and unless all of the provisions of Clause 3.2 are
complied with.
4. WARRANTIES
4.1. Warranties; Survival:
4.1.1. CILT warrants to the Purchaser in the terms of the
Warranties as at the date hereof; and
-11-
15
4.1.2. WWP warrants to the Purchaser (the "WWP Warranties") as
at the date hereof that;
a) WWP is the registered owner and the legal owner
of the Shares listed with WWP's name in Part 1
of Schedule 2 and has good and valid title to
such shares free and clear of all Encumbrances;
b) except for this Agreement, none of the Shares
registered in the name of WWP are subject to any
voting trust, agreement, option or other
contract, agreement, arrangement, commitment, or
understanding, actual or contingent, restricting
or otherwise relating to the voting, dividend
rights, sale, or disposition of such Shares;
c) this Agreement is a valid and binding obligation
of WWP, enforceable against WWP in accordance
with its terms; and
d) the execution of this Agreement does not, the
consummation of the transactions effected by
this Agreement do not, and compliance with the
terms of this Agreement will not violate,
conflict with, require consent under or cause a
default under any provision of any agreement,
contract, arrangement, judgment, order, decree,
statute, or law applicable to WWP or its
property or assets;
and so that the remedies of the Purchaser in respect of any
breach of any of the Warranties or the WWP Warranties shall
continue to subsist notwithstanding completion of the sale and
purchase pursuant to this Agreement.
4.2. No Liability of the Company: Any information supplied by or on
behalf of any Group Company or by its officers, employees,
agents, accountants, lawyers or other advisers to the Sellers or
their respective officers, employees, agents, accountants,
lawyers or other advisers in connection with the Warranties, the
WWP Warranties or the Disclosure Letter or otherwise in relation
to the business and affairs of the Company or the Subsidiaries
shall not constitute a representation or warranty or guarantee
as to the accuracy thereof by any Group Company and each of CILT
and WWP hereby waives any and all claims which it might
otherwise have against any Group Company in respect thereof.
This shall not preclude either CILT and/or WWP from claiming
against the other or ▇▇. ▇▇▇▇▇, ▇▇. ▇. ▇▇▇▇▇▇▇▇▇-Laurvig, ▇▇ ▇.
▇▇▇▇▇▇▇▇▇-Laurvig or ▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ under any right of
contribution or indemnity to which it may be entitled.
4.3. CILT's Knowledge: Where any of the Warranties is qualified as
being made "so far as CILT is aware" or is qualified by any
similar expression, that
-12-
16
statement shall be a reference to the knowledge, awareness or
belief of CILT having made due and careful enquiry of ▇▇. ▇▇▇▇▇,
Mr. F. Ahlefeldt-Laurvig, ▇▇. ▇▇▇▇ ▇▇▇▇▇▇▇▇ and Mr Peyter
Bjerregard and no other person, and the knowledge (actual or
constructive), awareness and belief of each such person with
respect to the relevant matter shall be imputed to CILT.
4.4. Separate Obligations: Each of the Warranties and the WWP
Warranties shall be construed as a separate warranty and (save
as expressly provided to the contrary) shall not be limited by
the terms of any of the other Warranties or by any other term of
this Agreement.
4.5. Disclosure Letter: Subject to Clause 6.1, CILT shall be under no
liability under the Warranties in relation to any matter forming
the subject matter of a claim under the Warranties to the extent
that such matter or circumstances giving rise thereto are fairly
disclosed in the Disclosure Letter or expressly provided for or
stated to be exceptions under the terms of this Agreement.
4.6. Documents: No letter, document or other communication shall be
deemed to constitute a disclosure for the purposes of the
Warranties unless the same is expressly referred to in the
Disclosure Letter.
4.7. Reliance: Each of CILT and WWP acknowledges that the Purchaser
has entered into this Agreement in reliance inter alia upon the
Warranties and the WWP Warranties.
4.8. Purchaser's Rights: Save as set out in this Agreement the rights
and remedies of the Purchaser in respect of any breach of the
Warranties or the WWP Warranties shall not be affected by
Completion, or failing to exercise or delaying the exercise of
any right, or remedy, or by any other event or matter, except a
specific and duly authorised written waiver or release, and no
single or partial exercise of any right or remedy shall preclude
any further or other exercise.
4.9. Waiver: Notwithstanding any rule of law or equity to the
contrary, any release, waiver or compromise or any other
arrangement of any kind whatever which the Purchaser may agree
to or effect in relation to one of the Sellers in connection
with this Agreement, and in particular the Warranties or the WWP
Warranties shall not affect the rights and remedies of the
Purchaser in relation to the other Seller.
4.10. Other Information: No information relating to any Group Company
of which the Purchaser has knowledge (actual or constructive)
other than that contained in or referred to in this Agreement
and the Disclosure Letter shall prejudice any claim by the
Purchaser under the Warranties or operate to reduce any amount
recoverable under the Warranties.
-13-
17
5. WARRANTY LIMITATIONS
The provisions of Schedule 6 shall apply with respect to the liability of CILT
under the Warranties.
6. INDEMNIFICATION
6.1. Indemnity: CILT shall indemnify the Purchaser against all
liabilities, losses, claims, damages, causes of action and
expenses of any kind, including legal and other professional
costs and interest other than legal and professional costs of
IFX Scandinavia incurred to date arising out of or in relation
to the litigation with Nihlmark as conducted in the Stockholm
Commercial Court and referred to in the Disclosure Letter (the
"Litigation") as disclosed in the Disclosure Letter PROVIDED
THAT the Purchaser shall allow CILT, at CILT's sole expense, to
take the sole conduct of the Litigation as CILT may deem
appropriate in connection with such Litigation in the name of
the Company (including, without prejudice to the generality of
the foregoing, the making of any agreement, settlement or
compromise with any third party in relation to any such claim or
adjudication without the prior consent of the Purchaser but
having first consulted with the Purchaser with regard to such
matters) and in connection therewith the Purchaser shall, upon
receiving such security for its costs as the Purchaser may
reasonably request, give or cause to be given to CILT such
assistance as CILT may reasonably require in avoiding,
disputing, resisting, settling, compromising, defending or
appealing the Litigation and shall instruct such solicitors or
other professional advisers as CILT may (with the Purchaser's
consent, such consent not to be unreasonably withheld) nominate
to act on behalf of IFX Scandinavia, as appropriate, but to act
in accordance with CILT's sole instructions and PROVIDED FURTHER
THAT the Purchaser shall and shall procure that each Group
Company shall make no admission of liability, agreement,
settlement or compromise with any third party in relation to the
Litigation without the prior written consent of CILT.
6.2. Schedule 6: For the avoidance of doubt, the provisions of
Schedule 6 (other than paragraph 14 thereof) shall not apply to
any claim under this Clause 6.
7. RETENTION
7.1. Retention: The sum referred to in Clause 2.3.1 (the "Retention")
shall on Completion be paid into an account (the "Retention
Account") at Lloyd's Bank TSB, Pall Mall, St. James's Branch
(Account number ▇▇▇▇▇▇▇, sort code 30-00-08) to be opened prior
to Completion in the joint names of the Sellers' Lawyers and the
Purchaser's Lawyers (the "Account Holders").
7.2. Initial Payment Date and Final Payment Date:
7.2.1. On the date falling 6 months after Completion (the
"Initial Payment Date") the Account Holders shall pay to
CILT a sum (together with interest thereon) which leaves
(subject to clause
-14-
18
7.4.1) a balance in the Retention Account of
US$2,500,000 excluding interest but less banking charges
thereon (the "Initial Payment").
7.2.2. On the first anniversary of Completion (the "Final
Payment Date") the balance of the monies standing to the
credit of the Retention Account after payment of all
Settled Claims therefrom pursuant to clause 7.5 (the
"Final Payment") shall (subject to clause 7.4.1) be paid
to CILT and together the Initial Payment Date and the
Final Payment Date shall be "Payment Dates".
7.3. Payments out of Retention: The Purchaser may, from time to time
before a Payment Date, by notice to CILT require immediate
payment out of the Retention Account of the amount of any claim
by the Purchaser in relation to the Warranties or under the Tax
Deed and shall be entitled to be paid in accordance with such a
notice if and to the extent that:
7.3.1. CILT has agreed the amount by giving written consent; or
7.3.2. a court of competent jurisdiction has established the
liability of CILT and awarded in respect of the quantum
of the claim and no right of appeal lies in respect of
such judgment or the parties are debarred whether by the
passage of time or otherwise from exercising any such
right of appeal or the other party has stated in writing
that it does not wish to exercise its right of appeal;
a claim which has been finalised in accordance with 7.3.1, 7.3.2
and 7.3.3 and where the Purchaser has received payment of any
finalised amount due from CILT being a "Settled Claim".
7.4. Outstanding claims:
7.4.1. If prior to the Initial Payment Date the Purchaser has
notified CILT in writing of a duly notified claim in
relation to the Warranties or under the Tax Deed (a
"Notified Claim") which has not become a Settled Claim
or become a Lapsed Claim as hereinafter defined on or
before the Initial Payment Date then the Initial Payment
shall be reduced so that there shall be retained in the
Retention Account after the Initial Payment Date
either:
a) the sum of US$2,500,000 and whichever is the
lesser of:
(1) the amount of the Initial Payment but
for the provisions of this clause 7.4.1;
or
-15-
19
(2) the aggregate amount of the Notified
Claim or Claims which have not become
Settled Claims or Lapsed Claims as
hereinafter defined; or
b) (if lower) the amount then remaining in the
Retention Account
and the balance (if any) shall then be paid to CILT on
the Initial Payment Date in accordance with clause 7.5.
7.4.2. If prior to the Final Payment Date the Purchaser has
notified CILT in writing of a Notified Claim which has
not become a Settled Claim or been withdrawn on or
before the Final Payment Date then there shall be
retained in the Retention Account whichever is the
lesser of:
a) the whole of the amount then remaining in the
Retention Account; and
b) the aggregate amount of the Notified Claims
which have not (i) become Settled Claims or (ii)
been withdrawn or lapsed due to failure of the
Purchaser to institute proceedings as required
by paragraph 3.2 of Schedule 6 or in respect of
which a court of competent jurisdiction has
established that CILT has no liability or
decided that there is no claim and no right of
appeal lies in respect of such judgment or the
parties are debarred whether by the passage of
time or otherwise from exercising any such right
of appeal or the other party has stated in
writing that it does not wish to exercise its
right of appeal (in any such case a ("Lapsed
Claim");
and the balance (if any) shall then be paid to CILT on
the Final Payment Date in accordance with clause 7.5.
7.5. As soon as possible after a Notified Claim outstanding at the
relevant Payment Date has become a Settled Claim or has been
withdrawn CILT and the Purchaser shall instruct the Account
Holders to make payment out of the Retention Account:
7.5.1. to the Purchaser of a sum equal to the amount for which
the Notified Claim or Claims aforesaid shall have become
Settled Claims in accordance with clause 7.3 in favour
of the Purchaser together with a proportion of the total
interest earned on the monies deposited in the Retention
Account from the date of payment into the Retention
Account until the date of payment out (being that
proportion which the sum payable to the Purchaser out
-16-
20
of the Retention Account pursuant to this sub-clause
bears to the total sums paid into the Retention
Account);
7.5.2. as to the balance of the monies standing to the credit
of the Retention Account, (subject to clause 7.4) to
CILT together with interest calculated on the basis set
out in paragraph 7.5.1 above.
7.6. Other Rights: The payment of any sums to the Purchaser in
accordance with Clause 7.4 in or towards satisfaction of any
claim under the Warranties or the Tax Deed shall not prejudice
or affect any other rights or remedies of the Purchaser for the
purpose of recovering any additional amount due from CILT
pursuant to the Warranties and the Tax Deed.
7.7. Interest: The interest accrued on the Retention Account shall
belong to CILT and the Purchaser in proportion to the respective
amounts of the Retention released to each of them from time to
time.
7.8. Instructions to Account Holders: CILT and the Purchaser shall,
as and when necessary, give instructions to the Account Holders
to procure compliance with this Clause 7. The Account Holders
shall not be required to take any action with respect to the
Retention Account except on the written instructions of CILT and
the Purchaser. The Retention Account shall be used only for the
purpose specified in this Clause 7.
7.9. Discharge: Any payment out of the Retention Account to CILT
shall be made to an account specified in writing by CILT to the
Purchaser and receipt from the bank holding such account shall
be an effective discharge of the Purchaser's and Account
Holders' obligations to pay such sums to CILT. The Purchaser and
the Account Holders shall not be concerned to see to the
application, or be answerable for the loss or misapplication, of
such sums. Any payment out of the Retention Account to the
Purchaser shall be made to such bank account as the Purchaser
shall notify in writing to the Account Holders.
7.10. Tax liability: Any tax liability of the Purchaser arising on
interest paid on any part of the Retention released to it under
sub-clause 7.3 shall be for the account of the Purchaser.
8. CONFIDENTIALITY
Each of the Sellers hereby severally covenants with the Purchaser that it shall
not at any time divulge to any third party whatsoever or use for its own or
another's advantage any of the designs, formulae, inventions or improvements
relating to products or prospective products designed, manufactured or sold by
any Group Company at any time before Completion or any other trade secrets or
confidential know-how or confidential financial or trading information as to
customers or suppliers or in relation to the business, finances, dealings or
affairs of any Group Company save only (i) insofar as such Seller proves the
same has become a matter of public knowledge (otherwise than by reason of a
breach of
-17-
21
this Clause 8) or (ii) insofar as may be required by law, in which case the
relevant Seller or Sellers shall give all reasonable notice of such disclosure,
consult in advance with the Purchaser as to such disclosure and limit such
disclosure strictly to the extent so required by law.
9. ANNOUNCEMENTS, ETC.
9.1. Neither the making of this Agreement nor its terms shall be
disclosed by the Purchaser prior to or at Completion without the
prior consent of the Sellers (such consent not to be
unreasonably withheld or delayed), unless such disclosure is
required by law, and such disclosure shall then only be made to
such person or persons, in the manner and to the extent required
by law or as otherwise agreed with the Sellers and after
notifying the Sellers of the terms of such disclosure.
9.2. Neither the making of this Agreement nor its terms shall be
disclosed by any of the Sellers without the prior written
consent of the Purchaser (such consent not to be unreasonably
withheld or delayed) unless such disclosure is required by law
and disclosure shall then only be made after prior consultation
with the Purchaser as to the terms of such disclosure, and only
to the person or persons, in the manner and to the extent
required by law or as otherwise agreed by the Purchaser.
10. COSTS
Save as expressly otherwise provided in this Agreement each of the parties to
this Agreement shall bear his, her or its own legal, accountancy and other
costs, charges and expenses connected with the negotiation, preparation and
implementation of this Agreement and any other agreement incidental to or
referred to in this Agreement.
11. ASSIGNMENT
11.1. The benefit of this Agreement may be assigned by the Purchaser
to any company of which it is a subsidiary or to any other
company which is a subsidiary of the Purchaser or of the
Purchaser's holding company provided always that no such
assignment shall operate to increase the liability of any party
hereto.
11.2. Subject to Clause 11.1, this Agreement and all rights and
benefits under it are personal to the parties to this Agreement
and may not be assigned at law or in equity without the prior
written consent of the other such parties.
12. EFFECT OF COMPLETION
The terms of this Agreement shall, insofar as not performed at Completion and
subject as specifically otherwise provided in this Agreement, continue in force
after and notwithstanding Completion.
-18-
22
13. ENTIRE AGREEMENT
This Agreement (together with any documents referred to in it) constitutes the
entire agreement between the parties to this Agreement in connection with the
subject matter of this Agreement. No such party has relied upon any
representation save for any representation expressly set out in this Agreement
(or any document referred to in this Agreement).
14. WAIVER, AMENDMENT
14.1. Method of Waiver: There shall be no waiver of any term,
provision or condition of this Agreement unless such waiver is
evidenced in writing and signed by the waiving party.
14.2. Delay; Effect of Waiver etc.: Save as expressly set out in this
Agreement, no omission or delay on the part of any party to this
Agreement in exercising any right, power or privilege under this
Agreement shall operate as a waiver of such right, power or
privilege, nor shall any single or partial exercise of any such
right, power or privilege preclude any other or further exercise
of such right, power or privilege or of any other right, power
or privilege. Save as expressly set out in this Agreement, the
rights and remedies in this Agreement provided are cumulative
with and not exclusive of any rights or remedies provided by
law.
14.3. Written Variation: No variation to this Agreement shall be
effective unless made in writing and signed by all the parties
to this Agreement.
15. FURTHER ASSURANCES
At any time after Completion, the Sellers shall at the reasonable cost of the
Purchaser execute all such documents and do such acts and things as the
Purchaser may reasonably require for the purpose of vesting in the Purchaser the
full legal and beneficial title to the Shares and giving to the Purchaser the
full benefit of this Agreement.
16. PAYMENTS
All payments to be made pursuant to this Agreement shall be effected in the
lawful currency of the United States.
17. TRUSTEE'S UNDERTAKING
17.1. Undertaking: The Trustee hereby undertakes with the Purchaser
that it will not before the expiry of 2 years from Completion
make any appointment to any beneficiary or discharge any
liability of any beneficiary or make any payment of capital to
any beneficiary or otherwise make any payment out of funds of
the Trust or release any assets of the Trust, except as provided
in Clauses 17.2 and 17.3.
-19-
23
17.2. Minimum Amounts: The Trustees shall be permitted to release
assets from the Trust to the extent (and only to the extent)
that:
17.2.1. during the period from Completion until the first
anniversary of Completion (the "Initial Period"), the
amount of the Trust Assets does not at any time during
the Initial Period fall below US$20,500,000 plus the
Trustees' bona fide estimate of any Permitted Tax
Liability and Permitted Trust Liability and the amount
of any Notified Claim that has not become a Settled
Claim or a Lapsed Claim;
17.2.2. during the period from the first anniversary of
Completion until the second anniversary of Completion
(the "Second Period"), the amount of the Trust Assets
does not at any time during the Second Period fall below
the lesser of (i) US$20,500,000 plus the Trustees' bona
fide estimate of any Permitted Tax Liability and
Permitted Trust Liability and (ii) US$17,000,000 plus
the Trustees' bona fide estimate of any Permitted Tax
Liability or Permitted Trust Liability and the amount of
any Notified Claim that has not become a Settled Claim
or a Lapsed Claim on or before such first anniversary;
and
17.2.3. after the second anniversary of Completion and for so
long as any Notified Claim has not become a Settled
Claim or a Lapsed Claim, the amount of the Trust Assets
does not fall below the Trustee's bona fide estimate of
any Permitted Tax Liability and Permitted Trust
Liability plus the amount of all such Notified Claim or
Claims.
17.3. Permitted Releases: The Trustees shall at any time be permitted
to release assets from the Trust for the purpose of discharging
a Permitted Tax Liability or a Permitted Trust Liability or for
the purpose of discharging a liability to the Purchaser under
this Agreement or the Tax Deed, provided that any such release
for the purposes of disclosing a Permitted Tax Liability or a
Permitted Trust Liability shall only reduce the Trust Assets
below the minimum amount specified in Clause 17.2 to the extent
that the balance of the Trust Funds is not sufficient for such
purpose.
18. NOTICE
18.1. Methods of Service: Save as specifically otherwise provided in
this Agreement any notice, demand or other communication to be
served under this Agreement may be served upon any party to this
Agreement only by posting by first class post or delivering it
or sending it by confirmed facsimile transmission to the party
to be served at its address above, or facsimile number given
below, or at such other address or number as he, she or it may
from time to time notify in writing to the other parties:-
The Purchaser: Fax No:
-20-
24
For the attention of: ▇▇▇▇▇ ▇▇▇▇
with a copy to: Fax No:
For the attention of: ▇▇▇▇▇ ▇▇▇▇▇▇▇
C.I. Law Trustees Limited: Fax No: ▇▇▇▇▇ ▇▇▇ ▇▇▇
For the attention of: ▇▇▇▇▇▇▇▇ St. ▇▇▇▇▇ ▇▇▇▇▇▇
Warm Wool and Pile Limited: Fax No: ▇▇ ▇▇ ▇▇ ▇▇▇ ▇▇▇▇
For the attention of: ▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇
18.2. Proof of Service: A notice or demand served by first class post
shall be deemed duly served forty-eight hours after posting and
a notice or demand sent by facsimile transmission shall be
deemed to have been served at the time of transmission and in
proving service of such notice or demand it will be sufficient
to prove, in the case of a letter, that such letter was properly
stamped or franked first class, addressed and placed in the post
and, in the case of a facsimile transmission, that such
facsimile was duly transmitted to a current facsimile number of
the addressee at the address referred to above.
19. COUNTERPARTS
This Agreement may be executed in any number of counterparts and by the several
of the parties on separate counterparts, each of which when so executed and
delivered shall be an original, but all the counterparts shall together
constitute one and the same instrument.
20. GOVERNING LAW AND SUBMISSION TO JURISDICTION
20.1. Governing Law: This Agreement shall be governed by, and
construed in accordance with, English law.
20.2. Jurisdiction: The parties to this Agreement hereby irrevocably
submit to the exclusive jurisdiction of the High Court of
Justice in London for the purpose of hearing and determining any
dispute arising out of, under or in connection with this
Agreement and for the purpose of enforcement of any judgment
against their respective assets.
20.3. Service: The parties to this Agreement agree that service of any
writ, notice or other document for the purpose of any
proceedings in such court shall be duly served upon it if
delivered or sent by registered post, to the address of the
party set out above or such other address as may from time to
time have been notified by such party to all the other parties
for the purpose of service of notices, demands or other
communications under this Agreement.
21. INVALIDITY
If at any time any one or more of the provisions of this Agreement is or becomes
invalid, illegal or unenforceable in any respect under any law, the validity,
legality and
-21-
25
enforceability of the remaining provisions of this Agreement shall not be in any
way affected or impaired.
-22-
26
AS WITNESS the hands of the parties or their duly authorised representatives the
day and year first above written.
SIGNED:
by: ▇▇▇▇▇▇▇▇ ST. ▇▇▇▇▇ ▇▇▇▇▇▇
For and on behalf of
▇.▇.▇▇▇ Trustees Limited
SIGNED:
------------------------------------------------
by: ▇▇▇▇ ▇▇▇▇▇▇▇▇ as duly authorised attorney of
Warm Wool and Pile Limited
SIGNED:
------------------------------------------------
by: ▇▇▇▇▇ ▇. ▇▇▇▇▇
For and on behalf of
AETHER SYSTEMS, INC.
-23-
27
SCHEDULE 1
PART 1: PARTICULARS RELATING TO THE COMPANY
Authorised share capital: 200,000 Ordinary Shares of Pound Sterling1 each
Issued share capital: 55,832 Ordinary Shares of Pound Sterling1 each
Directors: Bo ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇-Laurvig
Secretary: Mitre Secretaries Limited
Auditors: BDO ▇▇▇▇ ▇▇▇▇▇▇▇
Accounting reference date: 30th June
Registered Office: ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
-24-
28
SCHEDULE 1
PART 2: PARTICULARS RELATING TO SUBSIDIARIES
IFX (UK) LIMITED
Authorised share capital: 100 Ordinary Shares of pound sterling 1 each
Issued share capital: 2 Ordinary Shares of pound sterling 1 each
Director: Bo ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
Secretary: Mitre Secretaries Limited
Auditors: BDO ▇▇▇▇ ▇▇▇▇▇▇▇
Accounting reference date: 30th June
Registered Office: ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇ ▇▇▇
-25-
29
B: IFX INFOFOREX LIMITED
Authorised share capital: 10,000 ordinary shares of pound sterling 1 each
Issued share capital: 2 ordinary shares of pound sterling 1 each
Directors: ▇▇▇▇▇▇▇▇ St ▇▇▇▇▇ ▇▇▇▇▇▇
Ian St ▇▇▇▇▇ ▇▇▇▇▇▇
Auditors: BDO ▇▇▇▇ ▇▇▇▇▇▇▇
Accounting reference date: 30th June
Registered Office: ▇▇ ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇ ▇▇▇ ▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-26-
30
C: IFX Scandinavia Ap S
Authorised share capital: DKK 200,000
Issued share capital: DKK 200,000
Directors: ▇▇▇ ▇▇▇▇▇▇▇ Frederik Ahlefeldt-Laurvig
Bo ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
Management: ▇▇▇ ▇▇▇▇▇▇▇ Frederik Ahlefeldt-Laurvig
Auditors: ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇▇
Accounting reference date: 30th June
Registered Office: ▇▇▇▇▇▇▇▇ ▇▇ ▇,▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ K
-27-
31
D: IFX Deutschland GmbH
Authorised share capital: DM 50,000.00
Issued share capital: DM 50,000.00
Directors: Bo ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Ahlefeldt-Laurvig
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Auditors: Falke & Co GmbH
Accounting reference date: 30th June
Registered Office: Frankfurt am Main
-28-
32
E: IFX The Netherlands B.V
Authorised share capital: 2000 shares of NLG 100 each
Issued share capital: 400 shares of NLG 100 each
Director: Bo ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
Auditors: Paardekooper & ▇▇▇▇▇▇▇
Accounting reference date: 30th June
Registered Office: ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇ ▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
-29-
33
F: IFX Finanzas Espania S.A.
Authorised share capital: 1,000 Shares of 10,000 pesatas each
Issued share capital: 250 shares of 10,000 pesetas
Directors: Bo ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Auditors: ▇▇▇▇▇ y Gia Auditores
Accounting reference date: 30th June
Registered Office: ▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇
-30-
34
G: Intext IFX Plc Limited
Authorised share capital: 100,000 shares of 2 Singapore dollars each
Issued share capital: 20,000 shares of 1 Singpore dollar each
Directors: ▇▇▇▇▇▇▇▇▇ H Muljohardjo
Bo ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
Secretary: Juliet Ang
Auditors: Sim ▇▇▇▇ ▇▇▇▇ & Co
Accounting reference date: 30th June
Registered Office: ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇-▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-31-
35
H: IFX France S.A.R.L
Authorised share capital: 100 Shares of 100 Euros each
Issued share capital: 100 Shares of 100 Euros each
Director: ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Accounting reference date: [June 30th]
Registered Office: Paris (10th), ▇ ▇▇▇ ▇▇ ▇▇▇▇▇▇▇ ▇'▇▇▇
-32-
36
SCHEDULE 2
PART 1: OWNERSHIP OF SHARES OF THE COMPANY
C.I. Law Trustees Limited 54, 176 Ordinary Shares
Warm Wool and Pile Limited 1,656 Ordinary Shares
PART 2 : OWNERSHIP OF SHARES OF THE SUBSIDIARIES AND INTEXT
1. IFX (UK) Limited
----------------
IFX Group Plc 2 Ordinary Shares
2. IFX SCANDIVAVIA APS
-------------------
IFX Group Plc DKK 200,000.00
3. IFX The NETHERLANDS B.V
-----------------------
IFX Infoforex Limited 400 shares of NLG 100 each
4. IFX FINANXAS ESPANIA S.A
------------------------
C ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇-Laurvig 10 shares of 10,000 pesetas each
IFX Group Plc 240 shares of 10,000 pesetas each
5. IFX Deutschland GmbH
--------------------
IFX Infoforex limited DM 50,0000.00
-33-
37
6. IFX France
----------
IFX Group Plc 100 shares of 100 Euros each
7. Intext IFX Pte Limited
----------------------
IFX Infoforex Ltd 10,000 shares of 1 Singapore dollar each
Intext Pte Ltd 10,000 shares of 1 Singapore dollar each
8. IFX Infoforex Limited
---------------------
IFX Group Plc 1 ordinary share of Pound Sterling 1 each
IFX Group Plc and ▇▇▇▇ ▇▇▇▇ 1 ordinary share of Pound Sterling 1 each
-34-
38
SCHEDULE 3
WARRANTIES
A. Constitution and Shares of Group Companies
B. Accounts
C. Business of the Group
D. Directors, Employees and Employment matters
E. Property
F. Pensions
G. Financial Facilities
H. Intellectual Property
I. Accuracy of Information
J. Taxation
K. Ownership of Shares
-35-
39
A. CONSTITUTION AND SHARES OF GROUP COMPANIES
1. Memorandum and Articles of the Company:
The memorandum and articles of association of the Company in the form of
the copies supplied to the Purchaser pursuant to the Disclosure Letter
are complete and accurate in all respects and have embodied therein or
annexed thereto copies of all resolutions and agreements required by law
to be so attached; all amendments thereto (if any) were duly and
properly made; and the Company has at all times carried on its business
and affairs in all respects in accordance with its memorandum and
articles of association and all such resolutions, agreements and
amendments.
2. Shares:
There are no issued and outstanding shares, debentures or other
securities of the Company other than the Shares All of the Shares are
fully paid.
3. Register of Members of the Company:
The register of members of the Company contains true and accurate
records of the shareholders from time to time of the Company and the
Company has not been subject to any application for rectification of
such register.
4. Compliance of the Company:
The Company has complied with the Companies Acts in all material
respects and all such resolutions, returns and other documents required
by the Companies Acts or any other legislation to be filed with or to be
delivered to the Registrar of Companies or to any other authority
whatsoever by the Company have been so filed or delivered and are true
and accurate in all material respects. All charges in favour of the
Company have (if appropriate) been registered in accordance with the
provisions of Sections 395, 409, 410 and 424 Companies ▇▇▇ ▇▇▇▇.
5. Financial Assistance:
The Company has not at any time directly or indirectly provided any
financial assistance for the purpose of the acquisition of shares in the
Company or for the purpose of reducing or discharging any liability
incurred in such an acquisition whether pursuant to Sections 155 and 156
Companies ▇▇▇ ▇▇▇▇ or otherwise.
6. Powers of Attorney:
No Group Company has executed any power of attorney or conferred on any
person other than its directors and employees any express or implied
authority to enter into any transaction on behalf of or to bind such
Group Company in any way.
-36-
40
7. Subsidiaries and Other Operations:
(a) No Group Company has any subsidiaries, owns any shares or stock in the
capital of, or has any beneficial interest in, any other company or
business organisation (other than the Subsidiaries and Intext), does not
control or take part in the management of any other company or business
organisation (other than the Subsidiaries and Intext) and no Group
Company is a party to any agreement for the management or control of all
or part of its business by any other person.
(b) No Group Company has, nor has it ever had, any branch, office or
permanent establishment outside the jurisdiction of its incorporation.
(c) Each Subsidiary and so far as CILT is aware Intext is a company or
corporation duly organised, validly existing and in good standing under
the laws of the jurisdiction of its incorporation, with full power and
authority to conduct its business in the manner and in the places where
such business is conducted.
(d) The copies of the constitutional documents of each of the Subsidiaries
and Intext, are annexed to the Disclosure Letter and are correct and
constitute the current version.
(e) There are no issued and outstanding shares, debentures or other
securities of any Group Company other than the shares held by the
Company as set forth in the Disclosure Letter.
8. Books and Records:
All constituting documents, registers, certificates of incorporation,
minute books, books of account and other corporate documents which each
Group Company is required by applicable laws to maintain or have in its
possession or under its control are so maintained, or are in the
possession or under the control of the relevant Group Company, and, in
all material respects, all such documents contain accurate records of
the matters required by law to be recorded therein.
-37-
41
B. ACCOUNTS
1. The Accounts:
The Accounts comply with all applicable laws, have been prepared in
accordance with the consistent application of GAAP in the jurisdiction
of the Group Company to which they relate and give a true and fair view
of the assets and liabilities and of the state of affairs, financial
position and results of the Group Company or Group Companies to which
they relate as at the Accounts Date and its results for the period ended
on that date.
2. Management Accounts:
The Management Accounts have been prepared in accordance with the same
accounting principles and practices adopted for the Accounts and show a
fair view of the assets and liabilities of the Company as the Management
Accounts Date.
3. Provision for debts:
Reasonable provision has been made in the Accounts and Management
Accounts in accordance with past practice and custom for bad and/or
doubtful debts.
-38-
42
C. BUSINESS OF THE GROUP
1. Business since the Accounts Date:
Since the Accounts Date:-
(a) each Group Company has carried on its business in the ordinary course
and, other than in the ordinary course of its business, no Group Company
has acquired or disposed of or agreed to acquire or dispose of a
substantial part of its assets, extended any credit, made any loan or
made any other extraordinary payment;
(b) no Group Company has declared or paid any dividend on any of its shares,
effected any distribution of its assets or made any other payment to any
of the Sellers or any connected person of any of the Sellers or any
former shareholder of such Group Company;
(c) no Group Company has entered into any agreement or arrangement with any
customer to provide services on terms materially less favourable to the
relevant Group Company than those on which such Group Company ordinarily
contracts with clients;
(d) no Group Company has released any debtor on terms that it pays less than
the book value of its debt and no debt in excess of US$10,000 owing to
any Group Company has been deferred, subordinated or written off or has
proved to any extent irrecoverable;
(e) each Group Company has paid its creditors within the times agreed with
such creditors and does not have any debts outstanding which are overdue
for payment by more than 90 days; and
(f) no Group Company has paid, or is under any obligation to pay, any
management charges.
2. Business since the Management Accounts Date:
Since the Management Accounts Date there has been no material adverse
change in the financial position of the Company.
3. Acquisition and Disposal of Assets:
No Group Company has, since the Accounts Date, acquired or agreed to
acquire any asset for a consideration which is higher than the market
value at the time of acquisition and has not disposed of or agreed to
dispose of any asset for a consideration which is lower than the market
value at the time of disposal.
4. Charges and Title to Assets:
(a) No Group Company has created or agreed to create, and no Group Company
is aware of, any Encumbrance over any part of its undertaking or assets.
-39-
43
(b) Each Group Company owns all the assets identified as being owned by that
Group Company in the Accounts and Management Accounts and all assets
acquired before Completion; such assets comprise all assets required for
the proper and efficient conduct of the business of the relevant Group
Company; and all such assets are in the possession or direct control of
the relevant Group Company.
(c) No Group Company has acquired or agreed to acquire any material asset on
terms that property in that asset does not pass until payment is made.
5. Onerous obligations:
(a) No Group Company is a party to any material leasing agreement, material
hire purchase agreement, material credit or conditional sale agreement,
material agreement for payment on deferred terms, or any other similar
agreement.
(b) No Group Company is a party to any material contract, transaction,
arrangement, or liability that:-
(i) is outside the ordinary course of business of the relevant Group
Company;
(ii) is for a term of more than six months or is unlikely to have been fully
performed, in accordance with its terms, more than six months after the
date on which it was entered into;
(iii) is incapable of termination in accordance with its terms, by the
relevant Group Company, on notice of 60 days or less;
(iv) is likely to involve an aggregate outstanding expenditure by the
relevant Group Company of more than Pound Sterling100,000 in any one
calendar year; or
(v) provides for any company or other person to provide management or
administrative services to the relevant Group Company;
(vi) involves payment by the relevant Group Company by reference to
fluctuations in the index of retail prices; or
(vii) involves, or is likely to involve, the supply of goods or services, the
aggregate sales value of which will represent in excess of 5% of the
turnover of the Group for the preceding financial year.
-40-
44
6. Contracts:
(a) No Group Company is in default under any material agreement which would
result or is likely to result in damages in excess of US$50,000 to which
it is a party and so far as CILT is aware there are no circumstances
likely to give rise to such a default.
(b) So far as CILT is aware, no party with whom any Group Company has
entered into any agreement or arrangement is in default in any material
respect and there are no circumstances likely to give rise to such a
default.
7. Guarantees etc.:
(a) No Group Company has given to any person any guarantee, indemnity,
warranty, or bond or incurred any other similar obligation or created
any security for or in respect of liabilities, actual or contingent, of
any person.
(b) No person has given any guarantee, indemnity, warranty, or bond or
incurred any similar obligation, or given any security with respect to,
any liability, actual or contingent, of any Group Company.
8. Options over shares etc.:
(a) Since the Accounts Date no share or loan capital or other securities of
any Group Company has been created or issued nor has any agreement been
made to create or issue any share or loan capital of any Group Company.
(b) There are no options or other agreements outstanding that call or give
any person the right to call (whether or not subject to conditions) for
the issue of any share or loan capital or other securities of any Group
Company, and the Sellers are not under any obligation of any kind
whatsoever whether actual or contingent to sell, charge or otherwise
dispose of any of the Shares or the Intext Shares or the shares of any
Subsidiary or any interest in the Shares, the Intext Shares or the
shares of any Subsidiary to any other person.
9. Trust Deeds etc.:
No Group Company is in breach of the terms of any trust deed, debenture
or other document governing any borrowings, and so far as CILT is aware
no event has occurred which will or might give any person the right to
call for the immediate or early repayment of any stock or other
borrowings of any Group Company or to terminate any loan facilities
placed at the disposal of any Group Company or which would or is likely
to cause a demand for the immediate repayment of any borrowings of any
Group Company which are repayable on demand.
10. Litigation:
(a) No Group Company is engaged in any litigation, arbitration, prosecution,
other legal proceeding, or employee or labour disputes (whether as
plaintiff, defendant,
-41-
45
or third party); no Group Company has received notice of, or been
threatened with, any such proceedings in respect of which the relevant
Group Company is or might be liable to indemnify any other person; so
far as CILT is aware there are no claims, facts, or events likely to
give rise to any such proceedings.
(b) No Group Company is involved in, or the subject of, any proceedings,
investigation, audit or enquiries before or by any governmental or
municipal board of enquiry or commission or any other administrative
body (whether judicial, quasi-judicial, or otherwise) in which any
unfavourable judgment or decision might adversely affect the business of
the relevant Group Company or the value of any of its assets; and so far
as CILT is aware there are no claims, facts or events that are likely to
give rise to any such proceedings, investigation, audit or enquiries.
11. Environmental Liability:
(a) So far as CILT is aware each Group Company is now, and has at all times,
conducted its business in compliance with all applicable environmental
laws. No Group Company has received any written notice, claim or other
communication alleging any actual or potential liability in respect of
Environmental Matters.
(b) So far as CILT is aware there are no circumstances, activities,
practices or actions which have occurred or are occurring or have been
or are in existence in the conduct of the business of any Group Company
which may give rise to any liability under applicable Environmental
Laws.
12. Business name:
No Group Company carries on, or has in the past 3 years carried on, any
business under any name other than its corporate name.
13. Effect of Sale of the Shares:
No Group Company is a party to any agency, distribution, marketing,
service (other than maintenance of office equipment) licensing,
purchasing, selling or other similar agreement, or to any agreement,
which is capable of termination without liability for compensation by
any other person on a change in the management, control, or shareholding
of any Group Company or by reason of the sale of the Shares or the
Intext Shares under this Agreement. As a result of a change in the
management, control, or, as appropriate, the shareholding of any Group
Company or after Completion:-
(a) so far as CILT is aware no supplier of a Group Company will cease, or is
likely or intends to cease or be entitled to cease, supplying the
relevant Group Company.
(b) so far as CILT is aware no client of a Group Company will cease, or
become entitled to cease or is likely or intends to cease, its
relationship with the relevant Group Company or may substantially reduce
its existing level of business with the relevant Group Company;
-42-
46
(c) so far as CILT is aware no Group Company will be in default under any
agreement or arrangement and no Group Company will lose any benefit,
right or privilege which it currently enjoys and no liability or
obligation of any Group Company will be increased;
(d) so far as CILT is aware no person will be relieved of any obligation or
become entitled to exercise any right in respect of any Group Company;
and
(e) as far as CILT is aware no senior employee of any Group Company will
leave.
14. Insurance:
(a) Each Group Company has produced to the Purchaser and listed and
summarised in the Disclosure Letter all insurance policies in effect in
relation to its business and assets, and all such policies are in full
force and effect and not avoidable.
(b) All premiums for policies of insurance maintained by any Group Company
due to be paid on or before Completion have been paid.
(c) No Group Company has filed a claim under any insurance policy, and so
far as CILT is aware there are no circumstances likely to give rise to a
claim, to the insurers avoiding liability under a policy, or to an
increase in premiums.
15. Capital Commitments:
Since the Accounts Date no Group Company has made or agreed to make any
capital expenditure, or incurred or agreed to incur any capital
commitments or disposed of or realised any capital assets or any
interest in capital assets.
16. Compliance with Statutory Provisions:
(a) The business of each Group Company has at all times been carried on
within the terms of its memorandum and articles of association, charter,
by-laws or other constitutional documents.
(b) Each Group Company has conducted and is conducting its business in
accordance with all applicable laws and regulations whether of its
jurisdiction of incorporation or elsewhere the failure to comply with
which would have a material adverse effect on the Group.
(c) No Group Company has received notice that it or its officers, agents or
employees (during the course of their duties in relation to it) have
committed or omitted to do any act or thing the commission or omission
of which is or could be in contravention of any act, order, regulation
or the like (whether in the jurisdiction of its incorporation or
otherwise) giving rise to any fine, penalty, default proceedings or
other liability on its part.
-43-
47
17. Licences:
(a) Each Group Company has all licences and permissions authorities and
consents required for the carrying on of its business effectively in the
places and in the manner in which such businesses are now carried on and
there is no subsisting breach by a Group Company of the terms or
conditions of any such licences, permissions, authorities or consents
which would have a material adverse effect on the Group.
(b) There are no served or, so far as CILT is aware, threatened proceedings
or any other circumstances involving or related to any Group Company
that might lead to the suspension, revocation, or material change or
modification of such licences or permissions and there is no other
reason why any of them should be suspended, threatened or revoked.
18. Grants:
No Group Company has applied for or received any financial assistance
from any supranational, national, or local authority or governmental
agency.
19. Relationship with directors:
(a) After Completion, no Group Company will have any liability to or any
contractual or other arrangements with any of the Sellers or with any
current director of a Group Company other than pursuant to this
Agreement or the Deed of Covenant or the Tax Deed, the service contract
and option arrangements with ▇▇ ▇▇▇▇▇, the service contract of ▇▇▇▇
▇▇▇▇▇▇▇▇ and the consultancy agreement with Warm Wool and Pile Limited
or to any spouse or associated company or connected person of any of
them or any partnership in which any such person or company is a
partner.
(b) After Completion, no director of a Group Company, nor any spouse or
associated company or connected person of any of the Sellers or any
director of a Group Company, or any partnership in which any such person
or company is a partner will owe any money to any Group Company.
20. Maintenance of Assets:
(a) Maintenance contacts are in full force and effect in respect of all
assets of any Group Company which it is normal and prudent to have
maintained by independent or specialist contractors and in respect of
all assets which any Group Company is obliged to maintain or repair
under any leasing or similar agreement.
(b) All assets of any Group Company have been regularly maintained to a good
technical standard and in accordance with safety regulations normally
observed in relation to assets of that description and in accordance
with the terms and conditions of any applicable leasing or similar
agreement.
-44-
48
21. Accounts Payable:
No account payable of any Group Company is unpaid and outstanding beyond
the earlier of the date (if any) on which it falls due to be paid
contractually or the date on which it falls to be paid in accordance
with the ordinary course of dealing between the relevant Group Company
and the supplier in question.
22. Accounts Receivable:
(a) There are no debts owing to any Group Company other than trade debts
incurred in the ordinary and usual course of business (none of which
exceeds Pound Sterling50,000 and which do not exceed Pound
Sterling400,000 in aggregate).
(b) No part of the amounts included in the Accounts, or subsequently
recorded in the books of any Group Company, as owing by any debtor is
overdue by more than twelve weeks, or has been released on terms that
any debtor pays less than the full book value of the debt or has been
written off or has proved to any extent to be irrecoverable or is now
regarded by the relevant Group Company as irrecoverable in whole or in
part.
23. Joint Ventures and Partnerships:
No Group Company is, or has agreed to become, a member of any joint
venture, consortium, partnership, other unincorporated association,
shareholders' agreement or similar arrangement; and no Group Company is,
nor has agreed to become, a party to any agreement or arrangement for
sharing commission or other income.
24. Reuters Agreements:
Each Group Company has complied in all material respects with its
obligations under any data feed agreements with Reuters to which it is a
party and has incorporated into its standard subscriber agreements all
terms required to be incorporated therein in accordance with such data
feed agreements.
-45-
49
D. DIRECTORS, EMPLOYEES AND EMPLOYMENT MATTERS
1. The particulars of directors and officers of each Group Company shown in
Schedule 1 are true and accurate and no person not named in Schedule 1
is a director or officer of any Group Company.
2. The Disclosure Letter contains accurate details of all officers,
employees, consultants and representatives of each Group Company,
including all remuneration payable and all other benefits provided or
which each Group Company is bound to provide (whether now or in the
future) to each officer, employee, consultant or representative of such
Group Company (or to any other person with respect to the services of
any such officer, employee, consultant or representative) and all profit
sharing, share option incentive, bonus arrangements and medical,
hospitalisation, disability, or other employee benefits, including
payments in connection with termination of any office, employment or
contract, to which such Group Company is a party, and including
discretionary arrangements or benefits and sets out details of all
standard forms of employment or consultancy or service agreements and
staff handbooks.
3. The terms of employment or engagement of all employees, agents,
consultants, independent contractors, representatives and professional
advisers of each Group Company permit the relevant Group Company to
terminate them on not more than three months' notice given at any time
without liability for payment of compensation or damages (except for
statutory indemnities or compensation), and no Group Company has entered
into any agreement or arrangement for the management of all or part of
its business other than with its directors or employees.
4. No past or present director, officer, employee, consultant, independent
contractor or representative of any Group Company has any claim,
including a claim for redundancy payment, against such Group Company for
loss of office or arising out of the termination of his office or
employment or contract, there is no event that might give rise to any
such claim and there is no outstanding liability in respect of any such
claim.
5. No industrial action involving the workforce of any Group Company,
official or unofficial, is now occurring or threatened; so far as CILT
is aware no event has occurred which is likely to give rise to such
action; and no Group Company has been engaged or involved in any dispute
with any employee or any labour troubles, whether directly involving the
relevant Group Company or not.
6. Each Group Company has fully paid to date all contributions to maintain
any medical, hospitalisation, disability or other employee benefit plan,
complied with its obligations to maintain those plans or arrangements,
and has not received any notice of an intent or threat to terminate or
impair the plans or arrangements, and so far as CILT is aware there are
no circumstances indicating that the plans or arrangements are not valid
and in full force and effect.
-46-
50
7. No promise or assurance of any kind, whether legally binding or not, has
been made to any officer or employee of any Group Company or any
consultant, independent contractor or representative of any Group
Company with respect to any adjustment in his or her remuneration,
emoluments or benefits of any kind from those described in the
Disclosure Letter, and no Group Company has made any gratuitous payment
or given any benefit or promised to do so in connection with the actual
or proposed termination or suspension of employment or variation of any
contract of employment or contract for services of any present or former
director or employee.
8. No person whose services are devoted wholly or mainly to the business of
any Group Company is employed or engaged under any consultancy,
contractor or other similar arrangement.
9. No present director, officer or employee of any Group Company has given
or received notice terminating his employment and completion of this
Agreement will not entitle any director, officer or employee of any
Group Company to terminate his employment or trigger any entitlement to
any payment.
10. Each Group Company has in relation to each of its directors, employees,
consultants and representatives complied with all applicable laws, codes
of conduct, guidelines, terms and conditions of employment or
engagement, orders and awards relevant to their terms and conditions of
service.
11. There are no amounts owing to any present or former director, officer,
employee, consultant or representative of any Group Company other than
one month's arrears of remuneration accrued or due or for reimbursement
of business expenses incurred within a period of three months preceding
the date of this Agreement and no moneys or benefits other than in
respect of remuneration or emoluments of employment are payable to or
for the benefit of any present or former director, officer, employee,
consultant or representative of any Group Company.
-47-
51
E. THE PROPERTIES
1. The Properties comprise all the properties owned, occupied or otherwise
used in connection with its business by any Group Company, and are
occupied, owned or used by right of ownership or under lease or licence,
the terms of which permit the occupation or use.
2. The information contained in Schedule 5 is complete and accurate in all
respects.
3. So far as CILT is aware, the buildings and other structures on the
Properties are in good and substantial repair and fit for the purposes
for which they are used.
4. The leases and licences listed in Schedule 5 are the only agreements by
which any Group Company has entered into obligations and/or has any
financial or other entitlement relating to any real property.
5. Each Group Company has paid the rent and observed and performed the
obligations on the part of the tenant and the conditions contained in
the lease under which any Property leased by it is held, and the last
demand (or receipts for rent if issued) were unqualified and the leases
are valid and in full force.
6. All licences, consents and approvals required from the landlords and any
superior landlords under the leases of any Property have been obtained
and the obligations on the part of the tenant contained in the licences,
consents and approvals have been duly performed and observed.
7. There are no rent reviews under the leases of any of the Properties in
progress.
8. No obligation necessary to comply with any notice or other requirement
given by the landlord under the lease of any Property is outstanding and
unobserved or unperformed.
9. There is no material obligation to reinstate any Property by removing or
dismantling any alteration made to it by a Group Company or any
predecessor in title to a Group Company.
-48-
52
F. PENSIONS
1. No Group Company operates, makes payments to or for, or has any
obligation related to, a pension arrangement or scheme.
2. There is no claim for and no Group Company is under any legal or moral
obligation to pay any pension or make any other payment upon death,
retirement, or disability to or on behalf of any person who is now or
has been an employee, consultant, independent contractor or agent of a
Group Company and is not a party to any scheme or arrangement having as
its purpose or one of its purposes the making of payments or the
provision of such benefits. No such pension or payment is now being paid
voluntarily and no ex gratia payments have been or are proposed to be
made by any Group Company to any current or former director, employee,
consultant, independent contractor or representative, or their
dependants or relatives.
3. No promise or assurance has been made to any present or former director,
employee, consultant, independent contractor or representative of any
Group Company that any pension rights or entitlements would be
continued, introduced, increased or improved.
-49-
53
G. FINANCIAL FACILITIES
1. Borrowings:
The aggregate of all amounts borrowed by any Group Company (from
whatever source) does not exceed any limitation on its borrowing
contained in its constitutional documents, any debenture, or other
instrument.
2. Continuance of Facilities:
Full and accurate details of each overdraft, loan, or other financial
facility outstanding or available to each Group Company and an accurate
copy of each such overdraft, loan, or other financial facility has been
provided to the Purchaser. So far as CILT is aware no Group Company has
done anything to affect adversely, impair, or prejudice the continuance
of any such facility in full force and effect and in particular no Group
Company has received notice from any lenders of money requiring
repayment or intimating the enforcement of any security and so far as
CILT is aware there are no current circumstances in existence as at the
date of this Agreement that would reasonably be expected to give rise to
any such notice and no Group Company has repaid or become liable to
repay any loan or indebtedness in advance of its stated maturity date;
and
3. Bank Accounts:
A statement of the credit or debit balances of each bank account of each
Group Company as at close of business on the business day immediately
preceding the date of this Agreement has been supplied to the Purchaser.
No Group Company has any other bank or deposit accounts (whether in
credit or overdrawn) not included in the statement. Since the statement
there have been no payments out of any such accounts except for routine
payments.
-50-
54
H. INTELLECTUAL PROPERTY RIGHTS
1. A Group Company is the sole legal and beneficial owner free from
Encumbrances of the Listed Intellectual Property and (where such Listed
Intellectual Property is registered) the registered proprietor thereof
and owns no other registered or material unregistered Intellectual
Property.
2. Save as may appear from the Listed Intellectual Property Agreements no
person has been authorised to make any use whatsoever of any
Intellectual Property owned by any Group Company.
3. Save as may appear from the Listed Intellectual Property Agreements a
Group Company owns all the material Intellectual Property that any Group
Company uses.
4. All the Intellectual Property rights owned or used by any Group Company
are valid and enforceable and nothing has been done, omitted or
permitted whereby any of them has ceased or might cease to be valid and
enforceable. So far as CILT is aware none of the processes or products
of any Group Company infringes any Intellectual Property of any other
person in circumstances which might entitle that person to make a claim
against the relevant Group Company.
5. So far as CILT is aware, none of the Listed Intellectual Property is the
subject of any claims or proceedings for opposition or contested
ownership.
6. CILT is not aware of any infringement of the Listed Intellectual
Property or of any rights relating to it by any person.
7. There are no outstanding claims against any Group Company for
infringement of any Intellectual Property used (or which have been used)
by any Group Company and no such claims have been settled by the giving
of any undertakings which remain in force. No Group Company has received
any actual or threatened claim that any of the Listed Intellectual
Property rights is invalid nor are the Sellers aware of any reason why
any granted patents included in the Listed Intellectual Property should
be amended.
8. Confidential information and know-how used by any Group Company is kept
confidential. No Group Company has disclosed (except in the ordinary
course of its business or under the Listed Intellectual Property
Agreements) any of its know-how, trade secrets or lists of customers to
any other person.
9. Such of the Listed Intellectual Property as is registered has been
maintained and all application and renewal fees for such registered
Intellectual Property have been duly paid on time.
10. The Listed Intellectual Property Agreements are all the material
Intellectual Property agreements to which any Group Company is a party;
each of them is valid and binding; and no Group Company is in material
breach of any of the provisions of
-51-
55
such agreements.
11. All persons retained or employed by any Group Company who, in the
course of their work for such Group Company will or might reasonably
be expected to bring into existence Intellectual Property or things
protected by Intellectual Property are, so far as is reasonably
practicable, individually bound by agreements with the relevant Group
Company whereby all Intellectual Property which such persons may bring
into existence during their work for a Group Company vests in the
relevant Group Company. All such agreements contain terms which, so
far as is reasonably practicable, prevent such persons disclosing any
confidential information about the relevant Group Company and its
business.
12. None of the Intellectual Property owned by any Group Company is subject
to compulsory licensing or the granting of any licences of right nor, so
far as CILT is aware, will it become so by operation of law.
13. Data Protection:
Each Group Company is registered and has otherwise complied in all
material respects with the requirements of all applicable data
protection legislation.
14. Marketing and Other Promotional Material:
So far as the CILT is aware, all current advertising, marketing and
sales promotions by any Group Company comply with all applicable laws,
regulations, codes of practice and self-regulatory schemes. No Group
Company has been disciplined under any law, regulation, scheme or code
in respect of any such advertising, marketing or sales promotion; no
complaint has been made against it in respect of such advertising,
marketing or sales promotion; and there are no outstanding complaints or
disciplinary proceedings against any Group Company in respect of such
advertising, marketing or sales promotion.
15. Identification and ownership of Information Technology:
a. Particulars of all material IT Systems and all material IT Contracts are
disclosed in the Disclosure Letter.
b. Save as disclosed in the Disclosure Letter, all material IT Systems are
controlled by the Group, and are not wholly or partly dependent on any
facilities or services not under the exclusive control of a Group
Company.
c. So far as CILT is aware, all the IT Contracts are valid and binding.
None of the IT Contracts has been the subject of any material breach or
default, or is liable to be terminated or otherwise adversely affected
by the transaction contemplated by this Agreement.
d. The Group has in its possession or in its control the source code of all
Software owned by any Group Company.
-52-
56
16. Computer operation and maintenance:
a. All IT Services are being and have been provided in accordance with all
applicable specifications.
b. The Group has full and unrestricted access to and use of the IT Systems,
and no third party agreements or consents are required to enable the
Group to continue such access and use following completion of the
transaction contemplated by this Agreement.
c. So far as CILT is aware no person has had unauthorised access to the IT
Systems or any data stored thereon. Each Group Company operates a
documented procedure, and has taken reasonable steps to avoid infections
by viruses and unauthorised access.
d. All material data processed using the IT Systems and/or the IT Services
has been regularly archived in hard copy form. Such hard copies have
been properly stored and catalogued.
e. Each Group Company has taken reasonable steps to ensure that its
business can continue in the event of a failure of the IT Systems
(whether due to natural disaster, power failure or otherwise).
f. The Group has sufficient technically competent and trained employees to
ensure proper handling, operation, monitoring and use of the IT Systems.
-53-
57
I. ACCURACY OF INFORMATION
1. All information contained in this Agreement and the Disclosure Letter
was when given and is now complete and accurate in all material respects
and no matter or fact has not been disclosed the omission of which
renders any such information materially untrue or misleading.
-54-
58
J. TAXATION
PART 1 -TAXATION OF THE GROUP
1. Tax Returns, etc.:
Each Group Company has filed all Tax returns which are required to be
filed in respect of such Group Company and has paid all Tax which has
become due pursuant to such Tax returns or pursuant to any assessment
which has become payable; all such Tax returns are complete and accurate
in all material respects and disclose all Taxes required to be paid by
the relevant Group Company.
During the last six years no Group Company has received notice of any
action, suit, non-routine investigation, audit, claim, lien or
assessment pending or proposed or threatened with respect to Tax, and so
far as CILT is aware no basis exists therefor and neither the Sellers
nor any Group Company have waived or been requested to waive any statute
of limitations in respect of Tax associated with such Group Company.
2. Provisions:
The Accounts make full provision or reserve for all Tax for which any
Group Company is accountable at the Accounts Date whether or not any
Group Company has or might have any right of reimbursement against any
other person.
Proper provision has been made and shown in the Accounts for deferred
Tax in accordance with GAAP.
3. Employees:
(a) During the last six years each Group Company has properly deducted Tax,
including social security and other payroll Tax, as required by
applicable law from all payments to, or to be treated as made to, or
benefits provided for, or to be treated as provided for, employees or
ex-employees of such Group Company.
(b) During the last six years each Group Company has duly accounted to the
Tax Authorities for sums so deducted (or has made proper reserve or
provision for such payments in the Accounts); and each Group Company has
materially complied with all its reporting obligations to the Tax
Authorities in connection with any such payments made or benefits
provided.
4. Sales at undervalue/overvalue and Deductions:
(a) All of the transactions of each Group Company have been entered into on
an arm's length basis, and the consideration charged or received or paid
by the relevant Group Company on all transactions entered into by it has
been equal to the consideration that might have been expected to be
charged received or paid (as appropriate) between independent persons
dealing at arm's length.
-55-
59
(b) So far as CILT is aware, other than items identified in the Taxation
Computations of any Group Company for the periods ending on the Accounts
Date which may recur in subsequent periods no material payments paid or
payable by any Group Company or which any Group Company is under an
existing obligation to pay in the future are or may be disallowed as
deductions.
5. Payment of Tax:
Each Group Company has duly and punctually paid, or will prior to
Completion so pay, all Tax to the extent that such Group Company is
liable to pay such Tax prior to Completion and is not liable to pay any
penalty or interest in connection with any such Tax.
6. Sales at Book Value:
No chargeable gain or profit would arise if any assets of any Group
Company (other than trading stock) were to be realised for a
consideration equal to the amount of the book value thereof as shown or
included in the Accounts.
7. Tax Schemes; Compliance:
No Group Company has entered into or been a party to or otherwise
involved in any scheme or arrangement designed wholly or partly for the
purpose of avoiding, evading or deferring Tax which is contrary to law.
8. Value Added Tax:
Each Group Company:
(a) is a registered taxable person for the purpose of applicable value added
tax regulations [and has not at any time been treated as a member of a
group of companies for such purpose and has not made any application to
be so treated] and no circumstances exist whereby the Company would or
might become liable for value added tax as an agent;
(b) has complied in all material respects with the requirements and
provisions of all applicable value added tax regulations and has made
and maintained, and will pending Completion make and maintain, accurate
and up to date records, invoices, accounts and other documents required
by or necessary for the purposes of all applicable value added tax
regulations and the Company has at all times without material delay paid
and made all payments and returns required under all applicable value
added tax regulations;
(c) has not made any exempt supplies in consequence of which it is or will
be unable to obtain credit for all input tax paid by it during any value
added tax period ending after the Accounts Date.
-56-
60
PART II - TAXATION OF THE COMPANY-
INFORMATION AND RETURNS
9. Disclosures:
All statements and disclosures made to any Tax Authority for Tax
purposes were when made and remain complete and accurate in all material
respects.
10. Clearances:
No action has been taken by the Company in respect of which any consent
or clearance from any Tax Authority was required save in circumstances
where such consent or clearance was validly obtained, and where any
conditions attaching thereto were and will, immediately following
Completion, continue to be met.
11. Claims and Elections:
The documents relating to Tax disclosed in the Disclosure Letter contain
full particulars of all matters relating to Tax in respect of which the
Company is or at Completion will be entitled:
(a) to make any claim (including a supplementary claim), disclaimer or
election for relief under any taxation statute;
(b) to appeal against any assessment or determination relating to Tax;
(c) to apply for a postponement of Tax.
PROVISION FOR AND PAYMENT OF TAX
12. Payment of Tax:
The Company is not liable, nor has it within six (6) years prior to the
date hereof been liable, to pay any penalty or interest in connection
with any such Tax.
13. Secondary Liability:
No transaction or event has occurred in consequence of which the Company
is or may be held liable for any Tax or deprived of Relief otherwise
available to it or may otherwise be held liable for or to indemnify any
person in respect of any Tax for which some other company or person was
primarily liable (whether by reason of any such other company being or
having been a member of the same group of companies or otherwise).
-57-
61
CORPORATION TAX
14. Sales at undervalue/overvalue and Deductions:
No notice or enquiry pursuant to Section 770A T.A. has been made in
connection with any transactions of the Company and there are no facts
or circumstances likely to give rise to an amendment of the Company's
return or any discovery assessment or discovery determination pursuant
to Section 770A T.A.
CAPITAL ASSETS
15. Capital Allowances:
(a) No balancing charge in respect of any capital allowances claimed or
given would arise if any assets of the Company were to be realised for a
consideration equal to the amount of the book value thereof as shown or
included in the Accounts.
(b) All necessary conditions for all capital allowances (as defined in
Section 832(1) T.A.) claimed by the Company were at all material times
satisfied and remain satisfied and the Company has not since the
Accounts Date become liable for any balancing charge.
16. Finance Leases:
The Company is not a lessee under a lease to which the provisions of
Schedule 12 F.A. 1997 apply or could apply.
17. Investment Grants:
The Company has not received any investment grant or similar payment or
allowance receivable by virtue of any statute.
18. Short-life Assets:
The Company has not made any election under Section 37 Capital
Allowances Act 1990 nor is it taken to have made such an election under
Section 37(8)(c) of that Act.
19. Deductions:
All rents, annual payments and other sums of an income nature paid or
payable by the Company since the Accounts Date or which the Company is
under an obligation to pay in the future are wholly allowable as
deductions or charges in computing income for the purposes of
corporation tax.
20. Loan Relationships:
All interest, discounts or premiums payable by the Company in respect of
its loan relationships within the meaning of Chapter II Part IV F.A.
1996 are capable of
-58-
62
being brought into account as a debit for the purposes of that chapter
as and to the extent that they are from time to time recognised in the
Company's accounts (assuming that the accounting policies and methods
adopted for the purpose of the accounts continue to be so adopted).
DISTRIBUTIONS
21. Repayments of Share Capital:
(a) The Company has not at any time since its incorporation repaid or agreed
to repay or redeemed or agreed to redeem or purchased or agreed to
purchase (or made any contingent purchase contract within the meaning of
Section 165 Companies Act 1985) in respect of any of its issued share
capital or any class thereof. Further, the Company has not (save as
disclosed in the Disclosure Letter) after 6th April 1965 capitalised or
agreed to capitalise in the form of shares, debentures or other
securities, or in paying up amounts unpaid on any shares debentures or
other securities, any profits or reserves of any class or description or
passed, or agreed to procure or seek the passing of, any resolution to
do so.
(b) The Company has not made (and will not be deemed to have made) any
distribution within the meaning of Sections 209, 210 and 211 T.A. since
5th April 1965 except dividends properly authorised and shown in its
Accounts nor is the Company bound to make any such distribution.
22. Capital Distributions:
The Company has not received any capital distribution to which the
provisions of Section 189 T.C.G.A. could apply.
CHARGEABLE GAINS
23. Value shifting:
The Company has not been involved in any scheme or effected any
arrangements whereby the value of any asset has been or will be reduced
such that Sections 29 and/or 30 T.C.G.A might be applicable.
24. Valuation of Assets:
The Company has not disposed of or acquired any asset so that Section 17
T.C.G.A. might apply to restrict the consideration deemed to be given on
such disposal or acquisition.
25. Chargeable Debts:
No gains chargeable to corporation tax on chargeable gains will accrue
to the Company on the disposal of any debt owing to the Company.
-59-
63
26. Reconstructions:
The Company has not been involved in any share for share exchange or any
scheme of reconstruction or amalgamation such as are mentioned in
Sections 136 or 139 T.C.G.A. under which shares or debentures have been
or will be issued or assets have been or will be transferred.
27. Depreciatory transactions:
No loss which has arisen or which may hereafter arise on a disposal by
the Company of shares in or securities of any company is liable to be
reduced by virtue of the application of Section 176 T.C.G.A.
(transactions in a group) or Section 177 T.C.G.A. (dividend stripping).
ANTI-AVOIDANCE PROVISIONS
28. Transactions in Securities:
The Company has not:-
(a) become liable for Tax; or
(b) received and will not receive or be the subject of or be adversely
affected by any Claim for Tax; arising under or imposed by or resulting
from the operation of Sections 703-709, 776-778, 729-746, (whether alone
or in conjunction with any other provisions of any taxation statutes)
and which wholly or partly results or arises from or is computed by
reference to circumstances existing or events occurring at any time on
or before the date hereof, whether alone or in conjunction with other
circumstances, arising before or after Completion.
29. Sale and lease back of land:
Since its incorporation, the Company has not entered into any
transaction as is mentioned in Sections 34-37 or Section 780 T.A.
30. Close Company:
The Company has at all times been a close company as defined by Sections
414 and 415 T.A. but has not in any accounting period beginning after 31
March 1989 been a close investment-holding company as defined in Section
13A T.A. No distribution within the meaning of Section 418 T.A. has been
made by the Company; since the Accounts Date any outstanding loans or
advances made or agreed to be made by the Company within Sections 419
and 420 or 422 T.A. have been disclosed in the Disclosure Letter and the
Company has not released or written off or agreed to release or write
off the whole or any part of any such loans or advances.
-60-
64
GROUP OF COMPANIES
31. Group Relief:
(a) Neither the Company nor any of the Subsidiaries has made or agreed to
make a surrender of group relief under Pt X, Chap IV T.A. or a surrender
of any amount of surplus advance corporation tax under T.A. to any
company other than the Company or a Subsidiary. The Company is not
liable to make a payment for group relief or for the surrender of
advance corporation tax to any company other than the Company or a
Subsidiary. The Company has not received a payment for group relief
which may be liable to be refunded in whole or in part other than the
Company or a Subsidiary. The Company has not agreed to surrender any
right to receive a Tax refund under Section 102 F.A. 1989.
(b) The Company does not own an asset which was acquired within the last six
years from another company, which was, at the time, a member of the same
group of companies (as defined in Section 170 T.C.G.A.) as the Company,
and which owned that asset otherwise than as trading stock within
Section 173 T.C.G.A.
(c) The execution or completion of this Agreement will not result in any
profit or gain being deemed to accrue to the Company for Tax purposes,
whether under Section 179 T.C.G.A. or otherwise.
INHERITANCE TAX
32. Gifts:
(a) The Company is not, and will not become, liable to be assessed to
inheritance tax as donor or donee of any gift or transferor or
transferee of value (actual or deemed), nor as a result of any
disposition, chargeable transfer or transfer of value (actual or deemed)
made by, or deemed to be made by, any other person.
(b) The Company has not been a party to associated operations in relation to
a transfer of value within the meaning of Section 268 I.T.A.
(c) No asset owned by the Company is subject to any sale, mortgage or charge
by virtue of Section 212 I.T.A.
33. Inland Revenue Charge:
There is no unsatisfied liability to inheritance tax attached or
attributable to the Shares or any asset of the Company, and in
consequence no person has the power to raise the amount of such Tax by
sale or mortgage of, or by a terminable charge on, any of the Shares or
assets of the Company as mentioned in Section 212 I.T.A. and none of the
Shares or assets of the Company are subject to an Inland Revenue Charge
within Section 237 I.T.A.
-61-
65
VALUE ADDED TAX
34. The Company is and has at all times within the last six years been a
fully taxable person within the meaning of V.A.T.A. and regulations
thereunder.
35. The Company has not waived exemption from VAT in respect of any of the
Properties under Paragraph 2, Schedule 10, V.A.T.A.
36. The Disclosure Letter contains full particulars of all claims which have
been, or could be, made by the Company under Sections 78 or 79 V.A.T.A.
There are no circumstances by virtue of which an assessment under
Section 78A V.A.T.A. has been, or could be, made on the Company.
37. So far as CILT is aware there are no existing circumstances by virtue of
which any refund of Tax obtained or claimed under Section 36 V.A.T.A.
may be required to be repaid. There are no circumstances by virtue of
which there could be a clawback of input tax from the Company under
Section 36(4A) V.A.T.A.
STAMP DUTY AND CAPITAL DUTY
38. All documents in the enforcement of which the Company is or may be
interested which are in the possession or control of the Company have
been duly stamped; and since the Accounts Date the Company has not been
a party to any transaction whereby the Company was or is liable to stamp
duty reserve tax.
39. The Company has not within the past two years made a claim for Relief or
exemption under Section 42 F.A. 1930.
-62-
66
K. OWNERSHIP OF SHARES
1. CILT is the registered owner and the legal owner of the Shares listed
with CILT's name in Part 1 of Schedule 2 and has good and valid title to
such shares free and clear of all Encumbrances. The Shares constitute
all of the issued share capital of the Company.
2. Except for this Agreement, none of the Shares registered in the name of
its CILT are subject to any voting trust, agreement, option or other
contract, agreement, arrangement, commitment, or understanding, actual
or contingent, restricting or otherwise relating to the voting, dividend
rights, sale, or disposition of such Shares.
3. The Company, or the Subsidiary so identified in Part 2 of Schedule 2, is
the registered owner of the shares of each Subsidiary and Intext as set
out in Part 2 of Schedule 2 and has good and valid title to such shares
free and clear of all Encumbrances. Such shares of each Subsidiary
constitute all of the issued share capital of such Subsidiary. Such
shares of Intext constitute not more than or less than 50% of the share
capital of, and carries not more or less than 50% of the voting rights
of, Intext.
4. None of the shares of the Subsidiaries nor of Intext are subject to any
voting trust, agreement, option or other contract, agreement,
arrangement, commitment or understanding, actual or contingent,
restricting or otherwise relating to the voting, dividend rights, sale
or disposition of such shares.
5. This Agreement is a valid and binding obligation of CILT, enforceable
against CILT in accordance with its terms.
6. The execution of this Agreement does not, the consummation of the
transactions effected by this Agreement do not, and compliance with the
terms of this Agreement will not violate, conflict with, require consent
under or cause a default under any provision of any agreement, contract,
arrangement, judgment, order, decree, statute, or law applicable to CILT
or its property or assets.
-63-
67
SCHEDULE 4
TAX DEED
THIS DEED OF COVENANT is made the day of April 2000
BETWEEN:-
(1) C.I. Law Trustees Limited of Westaway ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇.
▇▇▇▇▇▇, ▇▇▇▇▇▇ (the "Covenantor"); and
(2) Aether Systems, Inc. (the "Purchaser").
WHEREAS this Deed of Covenant is entered into pursuant to the provisions of an
Agreement (the "Share Purchase Agreement") made on the [ ] day of [ ]
2000 pursuant to which the Purchaser agreed to purchase the whole of the
share capital of IFX Group plc, a public limited company incorporated in
England and Wales under the Companies Acts under number 03224875 ("the
Company")
NOW THIS DEED WITNESSES as follows:-
1. Interpretation:
1.1. Subject to Clause 1.2 and unless the context otherwise
indicates, words, expressions and abbreviations defined in the
Share Purchase Agreement shall have the same meanings in this
Deed and any provisions of the Share Purchase Agreement
concerning matters of construction or interpretation shall
mutatis mutandis apply to this Deed.
1.2. The following words, expressions and abbreviations used in
this Deed shall, unless the context otherwise requires, have
the following
meanings:-
"Claim for Tax" any claim, assessment, demand, notice or other
document issued by or on behalf of any authority
or body whatsoever and of whatever country which
claims payment of Tax or seeks to or may deprive
any Group Company of any Relief or any right to
repayment of Tax which would otherwise have been
available;
"Event" every event, act, omission, default, occurrence,
circumstance, transaction, dealing or
arrangement of any kind whatsoever done, or
omitted to be done, by a Group Company or which
in
-64-
68
any way concerns or affects a Group Company;
"Liability for Tax" means any liability of any Group Company to make
a payment of Tax and includes:-
(a) the loss or reduction of any Relief
which would, but for such loss, have been
available to such Group Company to the extent
that the Relief has been taken into account in
reducing any provision for Tax (including
deferred Tax) in the Accounts; or
(b) the loss or reduction of any right of
any Group Company to a repayment of Tax to the
extent that that right has been taken into
account as an asset in the Accounts or in
reducing any provision for Tax (including
deferred Tax) in the Accounts; or
(c) the setting off of any such right to
repayment as is mentioned in paragraph (b) above
against any Claim for Tax which would, but for
such setting off, give rise to a claim under
this Deed;
"Relief" any allowance, credit, exemption, deduction, or
relief (including, without limitation, loss
relief) from, in computing, against or in
respect of Tax;
"taxation statutes" all statutes, and all laws, decrees, orders and
regulations, including subordinate legislation,
of whatever jurisdiction providing for or
imposing any Tax;
"Tax" or "Taxes" all forms of taxation, whether direct or
indirect, duties (including stamp duty),
imposts, payroll withholding, (including
national insurance contributions) and levies
whenever and in whatever jurisdiction imposed,
including all charges, interest, fines and
penalties
-65-
69
relating thereto;
"Tax Authority" the Inland Revenue, Customs & Excise, Department
of Social Security and any other governmental or
other authority whatsoever competent to impose
any Tax, whether in the United Kingdom or
elsewhere;
2. Indemnity:
2.1. Subject to Clause 2.2, the Covenantor hereby covenants with the
Purchaser to pay the Purchaser an amount equal to:-
2.1.1. any Liability for Tax that arises as a consequence of an
Event occurring or entered into at or before Completion;
and
2.1.2. the liability of any Group Company and/or the Purchaser
for all reasonable third party costs and expenses
reasonably and properly incurred by the Purchaser or
such Group Company in connection with any Claim for Tax
giving rise to (or which would, if it were successful,
give rise to) a liability covered by Clauses 2.1(a) or
2.1(b), including all legal proceedings relating thereto
and the settlement of any Claim for Tax and reasonable
steps taken to avoid any liability under a Claim for Tax
whether actual, threatened or anticipated.
2.2. The covenant contained in Clauses 2.1(a) and 2.1(b) shall not
apply to any Liability for Tax to the extent that:
2.2.1. a full provision or reserve in respect of the Liability
for Tax has been made in the Accounts or to the extent
that such liability was taken into account in computing
the amount of such provision or reserve or disclosed in
the Accounts; or
2.2.2. it would not have arisen but for a change in
administrative practice or in legislation or a decision
of any Court made after Completion (whether relating to
taxation, rates of taxation or otherwise) or the
withdrawal of any extra-statutory concession previously
made by any taxing authority (whether or not the change
purports to be effective retrospectively in whole or in
part);
2.2.3. it arises as a result only of any change after
Completion in the accountancy practice or principles,
accounting policy, any tax reporting practice, or the
length of any account period for tax purposes of any
Group Company;
-66-
70
2.2.4. sums in respect of the matter giving rise to the
Liability for Tax have been recovered under the
Warranties;
2.2.5. such liability is in respect of or by reference to
income, profits or gains earned, or arises in
consequence of an Event occurring, since the Accounts
Date in the ordinary course of business of a Group
Company;
2.2.6. to the extent that such liability would not have arisen
but for an act, default, omission or transaction of the
Purchaser or of the Company or their respective
successors in title effected after Completion other than
in the case of the Company any such act, default,
omission or transaction carried out or effected under a
legally binding commitment created on or before
Completion or carried out or effected in the ordinary
course of business of a Group Company as carried on at
Completion.
2.2.7.
a) such liability arises by virtue of any claim,
election, surrender or disclaimer made or notice
or consent given after Completion by a Group
Company or the Purchaser (including the
disclaimer of the whole or part of any
industrial building or other capital allowances
under the provisions of any Taxation Statute)
other than where the making, giving or doing of
which was taken into account in the preparation
of the Accounts;
b) such liability would not have arisen or would
have been reduced but for a failure or omission
on the part of the Purchaser or a Group Company
after Completion to make any election, claim,
surrender or disclaimer, or give any notice or
consent or do any other thing, in relation to
Taxation, the anticipated making giving or doing
of which was taken into account in computing any
provision or reserve for Taxation in the
Accounts;
c) such liability would not have arisen but for a
cessation of, or any change in the nature or
conduct of, any trade carried on by a Group
Company, being a cessation or change occurring
on or after Completion;
2.2.8. such liability has been made good by insurers or
otherwise compensated for without cost to the Purchaser
or a Group Company;
-67-
71
2.2.9. such liability is in respect of stamp duty reserve tax
payable on the transfer or agreement to transfer the
Shares pursuant to the Share Purchase Agreement;
2.2.10. such liability is attributable to a Group Company
ceasing to be entitled to the small companies' rate of
corporation tax whether by virtue of an increase in the
level of profits for the accounting period during which
Completion takes place that are attributable to the
period following Completion or by virtue of an increase
in the number of associated companies of a Group Company
after Completion;
2.2.11. such liability arises or is increased as a consequence
of any failure by the Purchaser to comply with its
obligations under this Deed including for the avoidance
of doubt its obligations to procure that a Group Company
carries out any act or does anything;
2.2.12. such liability could have been extinguished or reduced
by the use of any Relief in respect of any Tax which
existed at Completion and which was not shown as an
asset in the Accounts and was not taken into account in
computing any provision or reserve for Taxation
(including deferred Tax) in the Accounts;
2.2.13. any income, profits or gains to which such liability is
attributable were earned or received by, or accrued to,
a Group Company but were not reflected in the Accounts;
3. Gross-up: All sums payable by the Covenantor under this Deed shall be
paid free and clear of all deductions or withholdings (including Tax)
unless the deduction or withholding is required by law, in which event,
or in the event that the Purchaser shall incur any liability for Tax
chargeable or assessable in respect of any payment pursuant to this
Deed, the Covenantor shall pay such additional amounts as shall be
required to ensure that the net amount received by the Purchaser will
equal the full amount which would have been received by it had no such
deduction or withholding been made and/or no such liability to Tax been
incurred and:-
3.1. (a) in applying this Clause 2.3 no account shall be taken of
the extent to which any liability for Tax may be mitigated or
offset by any Relief or repayment available to the Purchaser, if
such Relief or repayment would otherwise have been used to
mitigate or offset any other liability for Tax of the Purchaser
or any holding company of the Purchaser or any subsidiary of any
such holding company; and
3.2. (b) if, following the payment of an additional amount under
this Clause 2.3, the Purchaser subsequently obtains a saving in
Tax or a repayment or credit in respect of the deduction,
withholding or liability for Tax giving rise to such amount, the
Purchaser shall pay to the Covenantor a sum equal to the amount
of such repayment or saving (in both cases to the extent only of
-68-
72
the said additional amount) such payment to be made within 10
days of the receipt of the repayment or the reduction of Tax due
and payable, as the case may be.
4. Timing:
4.1. Where the Covenantor becomes liable to make any payment pursuant
to Clause 2, the due date for the making of that payment shall
be within 20 days after the date on which notice setting out the
amount of Tax due accompanied by reasonably satisfactory
evidence from the auditors of the Company that the amount
demanded is due and payable is received from the Purchaser in
accordance with Clause 4 of this Deed or, if later:-
4.1.1. insofar as the claim arises under Clause 2.1(a), the day
before the day on which a payment of Tax becomes finally
due under the Claim for Tax in question or the day
before the day on which any repayment (or increased
repayment) of Tax (which but for such Claim for Tax
would have been available) would have been due;
4.1.2. insofar as the claim arises under Clause 2.1(b), the day
before the day on which payment of Taxation would have
been finally due from the relevant Group Company had the
Liability for Tax therein mentioned been satisfied by
the relevant Group Company by payment rather than by
Utilisation of Relief and for this purpose it shall be
assumed that the Claim for Tax would have been made and
all Tax would have become due at the latest date on
which payment could have been made without incurring
interest, penalties or fines for late payment; and
4.1.3. insofar as the claim arises pursuant to Clause 2.1(c),
the day before the day on which the costs and expenses
fall due for payment.
4.2. For the purpose of this Clause, no payment shall be treated as
having been made until it has been received by the Purchaser in
cleared funds.
4.3. If any sum due under Clause 2 is not paid by the Covenantor by
the due date, the same shall carry interest (from such date
until the date of payment) at the rate of two per cent over the
base rate for the time being of Lloyds Bank plc (or, in the
absence of such rate, at such equivalent rate as the Purchaser
shall select).
5. Time Limit:
5.1. The liability of the Covenantor to make any payment under this
Deed shall cease on the second anniversary of the date of this
Deed except: (a) in respect of any claim of which the Purchaser
gives notice to the Covenantor before that date specifying (in
reasonable detail) the nature of the claim and the amount of Tax
claimed and any such claim which may be made shall (if
-69-
73
it has not previously been satisfied, settled or withdrawn) be
deemed to be withdrawn at the expiration of 6 months from the
date of giving notice of such claim unless legal proceedings in
respect thereof have been commenced by issuing and service or
such proceedings against the Covenantor, or (b) in respect of
any Claim for Tax alleging fraudulent conduct.
6. Corresponding Benefit:
6.1. If the Purchaser or the relevant Group Company is or may be
entitled to recover from a person (including any Tax authority)
a sum in respect of any Claim for Tax which gives rise to a
liability on the part of the Covenantor under this Deed, then:
6.1.1. the Purchaser shall give the Covenantor details of the
entitlement as soon as practicable;
6.1.2. the Purchaser shall at the request of the Covenantor and
at the Covenantor's expense having been indemnified and
secured to the Purchaser's satisfaction take all
appropriate steps to recover or to procure the recovery
of the sum, keeping the Covenantor fully informed of the
progress of any action taken;
6.1.3. the Purchaser shall within 14 days of recovery of any
sum, pay that sum to the Covenantor so far as it does
not exceed any payments already made by the Covenantor
in respect of the relevant Claim for Tax and pay to the
Covenantor any interest or repayment supplement received
in respect of that sum so far as paid to the Covenantor;
and
6.1.4. so far as not so repaid or paid, the amount of the sum
recovered (including any interest or repayment
supplement) shall be set against the liability of the
Covenantor in respect of the relevant Claim for Tax.
7. Resistance of Claims:
7.1. If the Purchaser becomes aware of any Claim for Tax which may
result in the Purchaser having a claim against the Covenantor
under this Deed, the Purchaser shall give or procure that
written notice is given to the Covenantor in the manner provided
in Clause 4 of this Deed as soon as is reasonably practicable
and no later than 10 days after becoming aware of the claim and
the Covenantor shall, except in the case of fraud on the part of
the Covenantor, be entitled at their sole discretion (but after
consultation with the Purchaser) to resist such Claim for Tax in
the name of the Purchaser or the relevant Group Company or any
of them but at the expense of the Covenantor and to have the
conduct of any appeal or incidental negotiations PROVIDED THAT:-
-70-
74
7.1.1. the relevant Group Company and the Purchaser shall be
kept fully informed of all matters pertaining to the
dispute; and
7.1.2. no material communication, written or otherwise,
pertaining to the dispute (and in particular no proposal
for or consent to any settlement or compromise thereof)
shall be transmitted to any Tax Authority or any other
taxation authorities or governmental body or authority
without the same having been submitted to, and approved
by, the Purchaser and the relevant Group Company; and
7.1.3. no application shall be made for postponement of Tax
unless the Purchaser and the relevant Group Company
shall be provided with such security as they may
reasonably require in respect of sums subsequently
becoming payable under this Deed.
7.2. The Purchaser shall procure that the relevant Group Company
shall give the Covenantor reasonable co-operation, access and
assistance, technical or otherwise, for the purpose of resisting
such a Claim for Tax and shall provide such assistance as the
Covenantor may reasonably require and all such information as
may be available to the Purchaser at the relevant Group Company
for avoiding, disputing, resisting, appealing or compromising or
contesting any Claim for Tax provided that:-
7.2.1. the Covenantor shall not commence any proceedings beyond
a court of first instance with respect to a Claim for
Tax unless they have been advised by specialist Tax
Counsel selected by agreement between the Purchaser and
the Covenantor (or in default of agreement, selected by
the President for the time being of the Law Society,
after disclosure of all relevant information and
documents, that it is reasonable to resist the Claim for
Tax in the manner proposed by the Covenantor; and
7.2.2. the Covenantor reimburse the Purchaser an amount equal
to all reasonable costs and expenses which may thereby
be incurred.
8. Over-provisions:
8.1. If the auditors for the time being of a Group Company shall
certify (at the request and expense of the Covenantor) that any
provision for Taxation in the Accounts has proved to be an
over-provision then the amount of such over-provision shall be
dealt with in accordance with clause 7.3.
8.2. If the auditors for the time being of a Group Company shall
certify (at the request and expense of the Covenantor) that any
Liability for Taxation which has resulted in a payment having
been made or becoming due from the Covenantor under this Deed
has given or will give rise to a corresponding saving for a
Group Company which would not otherwise have arisen then as and
when the liability of the Company to make an actual payment of
or in
-71-
75
respect of Taxation is reduced by reason of the utilisation of
that corresponding saving the amount by which that liability for
Taxation is so reduced shall be dealt with in accordance with
clause 7.3.
8.3. Where it is provided under clause 7.1 or 7.2 above that any
amount (the "Relevant Amount") is to be dealt with in accordance
with this clause 7.3:
8.3.1. the Relevant Amount shall first be set off against any
payment then due from the Covenantor under this Deed;
and
8.3.2. to the extent there is an excess refund should be made
to the Covenantor of any previous payment or payments
made by the Covenantor under this Deed and not
previously refunded under this clause up to the amount
of such excess; and
8.3.3. to the extent that the excess referred in clause 7.3.2
above is not exhausted the remainder of that excess
shall be carried forward and set off against any future
payment or payments which become due from the Covenantor
under this Deed
8.4. Where any such certification as is mentioned in clause 7.1 or
7.2 above has been made the Covenantor or the Purchaser or a
Group Company may request the auditors of a Group Company for
the time being at the expense of the parties so making the
request to review such certification in the light of all
relevant circumstances including any facts which have become
known only since such certification and to certify whether such
certification remains correct or whether in the light of those
circumstances the amount that was the subject of such
certification should be amended.
8.5. If the auditors certify under clause 7.5 above that an amount
previously certified should be amended that amended amount
should be substituted for the purposes of clause 7.3 as the
Relevant Amount in respect of the certification in question in
place of the amount originally certified and such adjusting
payment (if any) as may be required by virtue of the
aforementioned substitution shall be made as soon as practicable
by the Covenantor or (as the case may be) to the Covenantor.
8.6. The Purchaser undertakes to supply, and undertakes to procure
that the Company shall supply, to the Purchaser and subsequently
to any firm of accountants nominated to deal with any such
dispute in accordance with clause 7.6 (with copies to the
Covenantor) all documents accounts notices papers and other
necessary information as may be reasonably required for the
purpose of making any such determination as to whether there is
or has been any over-provision or a corresponding saving for the
purposes of this clause 7.
-72-
76
9. Purchaser's Covenants:
9.1. The Purchaser hereby covenants with the Covenantor to pay to the
Covenantor an amount equal to:-
9.1.1. any liability or increased liability to Taxation of the
Covenantor or any person falling within s767A(2) of the
Taxes Act or any person falling with s767AA(4) of Taxes
Act as the result of any corporation tax assessed on a
Group Company remaining unpaid; and
9.1.2. any costs and expenses reasonably incurred by the
Covenantor or other relevant person in connection with
such liability under clause 8.1.1.
9.2. Clauses 6 (Resistance of claims) and 3 (timing) shall apply to
the covenants contained in clause 8.1 as they apply to the
covenants in clause 2 substituting references to the Covenantor
with references to the Purchaser and vice versa and making any
other necessary modifications.
10. Tax Returns:
10.1. The Covenantor or its duly authorised agents shall prepare the
tax returns and computations of the Company for all accounting
periods ending on or prior to the Accounts Date, to the extent
that the same shall not have been prepared before Completion,
subject to such tax returns being submitted in draft form to the
Purchaser or its duly authorised agents for comment a reasonable
time before the same are due to be sent to the relevant tax
authority. If the U.K. Purchaser or its duly authorised agents
shall make any comments or suggestions and communicate them to
the Covenantor within a reasonable time of receipt by the
Purchaser of such draft tax returns, the Covenantor shall not
unreasonably refuse to adopt such comments or suggestions.
10.2. The Purchaser shall procure that the returns and computations
mentioned in clause 9.1 shall be authorised, signed and
submitted to the appropriate tax authority without amendment or
with such amendments as the Covenantor shall approve, such
approval not to be unreasonably withheld or delayed, and shall
give the Covenantor or its agents all such reasonable assistance
as may be required to agree those returns and computations with
the appropriate authorities PROVIDED THAT the Purchaser shall
not be obliged to take any such action as is mentioned in this
clause 9.2 in relation to any return that is not complete and
accurate in all material respects.
10.3. The Covenantor or its duly authorised agents shall prepare all
documentation and will have conduct of all matters (including
correspondence) relating to the tax returns and computations of
a Group Company for all accounting periods ended on or prior to
the Balance Sheet Date provided that the
-73-
77
Covenantor shall not without the prior written consent of the
Purchaser (not to be unreasonably withheld or delayed) transmit
any communication (written or otherwise) to the Inland Revenue
or other relevant taxation authority or agree any matter with
the Inland Revenue or other relevant taxation authority.
10.4. The Purchaser shall procure that a Group Company affords such
access to its books, accounts and records as is necessary and
reasonable to enable the Covenantor or its duly authorised
agents to prepare the tax returns and computations of a Group
Company for all accounting periods ended on or before the
Accounts Date and conduct matters relating to them in accordance
with this clause 9.
10.5. The Purchaser or its duly authorised agents shall prepare the
tax returns and computations of a Group Company for the
accounting period in which Completion falls, subject to all such
computations and replies to enquires from the Inland Revenue or
other relevant taxation authority being submitted in draft form
to the Covenantor for comment, and the Purchaser or its duly
authorised agents shall not unreasonably refuse to adopt such
comments.
11. The provisions of clause 11 (Assignment), clause 13 (Entire Agreement),
clause 14 (Waiver, Amendment), clause 16 (Payments), clause 18 (Notice),
clause 19 (Counterparts), clause 20 (Governing Law and Submission to
Jurisdiction) clause 21 (Invalidity) , and Schedule 6 of the Share
Purchase Agreement (to the extent expressly so stated therein) shall
apply to this Deed as if the same were incorporated in this Deed.
12. Payments to the Purchaser under this Deed, excluding any amounts the
Purchaser repays to the Covenantor under this Deed, shall be treated for
all purposes as a reduction in the purchase price of the Shares paid
pursuant to the Share Purchase Agreement.
-74-
78
IN WITNESS whereof the parties hereto have duly executed this Deed the day and
year first before written.
EXECUTED AS A )
DEED BY )
--------------------
C.I. LAW TRUSTEES LIMITED ) Director
acting by )
--------------------
Director/Secretary
EXECUTED as a )
DEED BY )
AETHER SYSTEMS, INC. )
-75-
79
SCHEDULE 5
THE PROPERTIES
1. Lessor: EjendomsSelskabet Narden A/S
Lessee: IFX Scandinavia ApS
Premises: Bredgade 20 (rear premises)
▇▇▇ ▇▇▇▇▇
▇▇-▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ K
2. Lessor: Gamla Livforsakringgsaktiebolaget SEB ▇▇▇▇▇ ▇▇▇
Lessee: IFX Scandinavia Aps
Premises: ▇▇▇▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇▇▇▇
3. Lessor: A/S Kongensgate 7
Lessee: The Association of Norwegian Stockbroking Companies
(IFX Scandinavia ApS)
Premises: Two of the following Rooms 501, 502, 503, 504, 505, 506,
515, 516 and ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ 7
4. Lessor: Menta Real Estate Ltd
Lessee: IFX Scandinavia ApS,
-76-
80
Premises: ▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇,
AlekSanterinkatu 17
5. Lessor: ▇▇▇▇ ▇▇▇▇
Lessee: IFX Deutschland GmbH
Premises: App. ▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇(▇▇▇▇)▇ ▇▇, ▇▇▇▇▇▇▇▇▇ M
6. Lessor: Regus Amsterdam B.V.
Lessee: IFX Scandinavian
Premises: ▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇, ▇▇▇▇ ▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇
7. Lessor: ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇
Lessee: IFX Finanzas Espana SA
Premises: ▇▇. ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇
▇. Lessor: SCI
Lessee: IFX France S.A.R.L.
Premises: 5th Floor, ▇ ▇▇▇ ▇▇ ▇▇▇▇▇▇▇ ▇'▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
-77-
81
9. Lessor: Bruno ▇▇▇▇▇▇▇ ▇▇▇▇▇ Serejo
Lessee: IFX Finanzos S.A. - Branch in Portugal
Premises: 3rd Floor, B, ▇▇▇ ▇▇ ▇▇▇▇▇▇▇ ▇▇. ▇▇, ▇▇▇▇▇▇
▇▇. Lessor: Golden Shoe Holdings (Pte) Ltd
Lessee: Intext [IFX] Pte Ltd
Premises: ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ #▇▇-▇▇, ▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-78-
82
SCHEDULE 6
LIMITATIONS OF LIABILITY
1. APPLICABILITY OF THIS SCHEDULE
The provisions of this Schedule shall apply with respect to the
Warranties and (only to the extent expressly so stated in this Schedule)
to the other provisions of this Agreement and to the Tax Deed (in
addition to the limitations (if any) set out in those documents
respectively).
2. WARRANTIES
Notwithstanding anything in this Agreement to the contrary, the
provisions of this Schedule shall operate to limit the liability of CILT
in respect of any claim under the Warranties by the Purchaser (a
"Warranty Claim").
3. LIMITATIONS OF LIABILITY UNDER THE WARRANTIES AND THE TAX DEED
3.1. Limitation on quantum:
3.1.1. Save in the event of fraud on the part of CILT:
a) The total liability of CILT under or pursuant to
this Agreement (whether for breach of the
Warranties (other than the Tax Warranties and
the Tax Deed) shall not exceed the lesser of:-
(1) US$17,000,000; and
(2) after the first anniversary of
Completion, US$8,500,000 plus a sum
equal to any liability of CILT in
respect of any such claims notified in
accordance with paragraph C2 by the
Purchaser to CILT on or prior to the
first anniversary of Completion.
b) The total liability of CILT under or pursuant to
the Tax Warranties and the Tax Deed shall not
exceed US$8,500,000.
c) CILT shall not be liable in respect of any
individual claim under the Warranties (other
than Warranties C1(b) and D7 or the Tax
Warranties) unless (and then only to the extent
that) the amount that would otherwise be
recoverable from CILT in respect of such claim
exceeds US$20,000. For the avoidance of doubt,
amounts for which the CILT has no liability, or
by which the CILT's liability is reduced as a
consequence of the operation of this clause
shall not be capable of constituting a claim or
increasing the amount thereof for the purpose of
paragraph 3.1.1(d).
-79-
83
d) CILT shall not be liable in respect of any claim
or claims under the Warranties other than the
Tax Warranties unless and until (and then in
respect of all such claims) the aggregate amount
that would otherwise be recoverable from CILT in
respect of all such claims (after disregarding
such part of such claims as is necessary to
comply with paragraph 3.1.1(c) shall exceed
US$250,000.
e) CILT shall not be liable in respect of any claim
or claims under the Tax Warranties or the Tax
Deed unless and until (and then in respect of
all such claims) the aggregate amount that would
otherwise be recoverable from CILT in respect of
all such claims shall exceed US$75,000
3.1.2. For the purpose of paragraph 3.1.1, where a claim
relates to more than one event, circumstance, act or
omission which event, circumstance, act or omission
would separately constitute a breach of or give rise to
a Warranty Claim or a claim under the Tax Deed, such
claim shall be treated as a separate claim in respect of
each such event, circumstance, act or omission.
3.1.3. The amount of any claim(s) under the Warranties in
respect of any particular matter or circumstance shall
be counted only once, so that the Purchaser shall not be
entitled to aggregate any claims which it may make (or
be entitled to make) under this Agreement and/or the Tax
Deed.
3.1.4. Nothing in this Schedule shall in any way restrict or
limit the general obligation of the Purchaser to
mitigate any loss or damage which it may suffer in
consequence of any breach by CILT of the Warranties.
3.1.5. the avoidance of doubt, in determining the amount of any
claim for the purposes of the limits set out in this
Schedule, the amount of such claim shall be the net
amount after giving effect to all the provisions of this
Schedule.
3.2. Time limits for bringing claim:
No claim shall be brought against CILT in respect of any breach of the
Warranties or the Tax Deed unless the Purchaser shall have given to CILT
written notice of such claim specifying (in reasonable detail) the
matter which gives rise to the breach or claim, the nature of the breach
or claim and the Purchaser's good faith estimate of the amount claimed
in respect thereof on or before the date of the second anniversary of
Completion;
PROVIDED that the liability of CILT under this sub-paragraph shall
absolutely determine (if such claim has not been previously satisfied,
settled or withdrawn) if legal proceedings in respect of such claim
shall not have been commenced
-80-
84
within six months of the service of such notice and for this purpose
proceedings shall not be deemed to have been commenced unless they shall
have been properly issued and validly served upon CILT.
3.3. Conduct of litigation:
3.3.1. If the Purchaser considers that it will or may make a
claim against CILT for breach of Warranty, it shall as
soon as practicable notify CILT in writing, giving such
particulars thereof as are then available, and for a
period of 30 days after such notification shall afford
CILT the opportunity to take steps to remedy the matter
giving rise to such claim. To the extent that the matter
giving rise to such claim is remedied within such 30
days period, the Purchaser shall not be entitled to any
compensation in respect thereof.
3.3.2. Upon the Purchaser becoming aware of any claim, action
or demand against it or matter likely to give rise to
any of these in respect of the Warranties, the Purchaser
shall, subject to paragraph 15 of this Schedule:-
a) forthwith notify CILT by written notice as soon
as it appears to the Purchaser that any
assessment or claim of a third party received by
or coming to the notice of the Purchaser may
result in a claim under the Warranties;
b) take such action and give such information and
access to personnel, premises, chattels,
documents and records to CILT and its
professional advisers as CILT may reasonably
request;
c) at the request of CILT, allow CILT, at CILT's
sole expense, to take the sole conduct of such
actions as CILT may deem appropriate in
connection with any such assessment or claim in
the name of the Purchaser and in that connection
the Purchaser shall, upon receiving such
security for its costs as the Purchaser may
reasonably request, give or cause to be given to
CILT such assistance as CILT may reasonably
require in avoiding, disputing, resisting,
settling, compromises, defending or appealing
any such claim and shall instruct such
solicitors or other professional advisers as
CILT may (with the Purchaser's consent, such
consent not to be unreasonably withheld)
nominate to act on behalf of the Purchaser, as
appropriate, but to act in accordance with
CILT's sole instructions; or
d) make no admission of liability, agreement,
settlement or compromise with any third party in
relation to any such claim or adjudication
without the prior written consent of CILT.
-81-
85
3.3.3. In any event, CILT shall be entitled at any stage and at
their sole discretion to settle any such third party
assessment or claim and shall notify any such decision
to settle such assessment or claim to the Purchaser as
soon as practicable thereafter.
4. Acts of the Purchaser:
No claim shall lie against CILT under the Warranties if such claim is
wholly or partly attributable to:-
4.1. any voluntary act, omission, transaction or arrangement carried
out at the written request of or with the written consent of the
Purchaser before Completion;
4.2. any voluntary act, omission, transaction or arrangement outside
the ordinary course of business carried out by the Purchaser or
on its behalf or by persons deriving title from the Purchaser
under this Agreement on or after Completion;
4.3. any admission of liability made without CILT's consent after the
date hereof by the Purchaser or on its behalf or by persons
deriving title from the Purchaser under this Agreement on or
after Completion;
4.4. directly or indirectly the cessation of any business carried on
by the Company or the Purchaser or any holding company or
subsidiary of the Purchaser or any subsidiary of the holding
company or the Purchaser (the Purchaser's Group) following
Completion.
5. Allowance, provision or reserve in the Accounts and/or the Management
Accounts:
No matter shall be the subject of a claim for breach of any of the
Warranties to the extent that allowance, provision or reserve in respect
of such matter shall have been made in the Accounts and/or the
Management Accounts or has been included in calculating creditors or
deducted in calculating debtors in the Accounts and/or the Management
Accounts or shall have been otherwise taken account of in calculating
any sum or sums shown in the Accounts and/or the Management Accounts.
6. Recovery from third parties:
Subject to paragraph 15 of this Schedule,
6.1. In the event that the Purchaser shall recover any amount from
some other person any sum in respect of any matter giving rise
to a claim under the Warranties, the amount of the claim against
CILT shall be reduced by the amount recovered, less all
reasonable costs, charges and expenses incurred by the Purchaser
recovering that sum from such other person.
6.2. If CILT pays at any time to the Purchaser an amount pursuant to
a claim in respect of the Warranties and the Purchaser
subsequently recovers from some other person any sum in respect
of any matter giving rise to
-82-
86
such claim, the Purchaser shall forthwith repay to CILT so much
of the amount paid to the Purchaser as does not exceed the sum
recovered from such other person less all reasonable costs,
charges and expenses incurred by the Purchaser in recovering
that sum from such other person.
7. Retrospective legislation:
No liability shall arise in respect of any breach of any of the
Warranties to the extent that liability for such breach occurs or is
increased wholly or partly as a result of any legislation not in force
at the date hereof which takes effectively retrospectively.
8. Taxation:
8.1. CILT shall have no liability in respect of a Warranty Claim if
such breach or claim would not have occurred or arisen but for
any change in the basis of, method of calculation of, or
increase in the rate or rates of taxation or changes in the
practice of the Inland Revenue made or coming into effect after
the date hereof or the withdrawal after the date hereof of any
extra-statutory concession currently granted by any tax
authority.
8.2. CILT shall have no liability in respect of a Warranty Claim to
the extent that such claim, or the subject matter thereof occurs
or arises, or such claim otherwise has arisen, or is increased
as a result of any change made after the date hereof in any
accounting or taxation policies or practice of the Company, the
Purchaser or the Purchaser's Group.
8.3. If any specific provision or reserve for Taxation shall at the
date of any payment required to be made by CILT have proved to
have been an over-provision or over-reserve the amount of such
over-provision or over-reserve shall be set off against any
actual liability of CILT in respect of any claim(s) for breach
of the Warranties.
9. No liability for contingent or non-quantifiable claims:
If any breach of the Warranties arises by reason of some liability
which, at the time such breach or claim is notified to CILT, is
contingent only or otherwise not capable of being quantified, then CILT
shall not be under any obligation to make any payment in respect of such
breach or claim unless and until such liability ceases to be contingent
or becomes capable of being quantified, as the case may be. So long as
such claim shall have been notified to CILT in accordance with paragraph
2 above, as appropriate, then the proviso to the relevant paragraph
shall be amended in relation to such claim so as to require that legal
proceedings be commenced within six months from the date on which the
said liability ceases to be contingent or becomes capable of being
quantified, as the case may be, in order for the liability of CILT not
to determine.
10. Information of the Purchaser:
The Purchaser acknowledges and declares that in entering into this
agreement it has not relied and is not relying on any warranties,
representations, covenants, undertakings, indemnities, promises,
forecast or other statements whatsoever
-83-
87
whether written or oral (and whether implied or otherwise) (collectively
"Representations"), other than those expressly set out in this Agreement
and in the Tax Deed, and the Purchaser hereby irrevocably and
unconditionally waives any right it may have to claim damage for, or to
rescind this agreement by reason of, any Representation not expressly
set out or referred to in this Agreement or the Tax Deed unless such
representation was made fraudulently.
11. Payment of claim to be reduction in purchase price:
Any payment made by CILT in respect of any claim under the Warranties or
the Tax Deed shall be deemed to be a reduction in that total
consideration payable under this Agreement.
12. Insurance:
No claim shall lie against CILT under the Warranties to the extent such
claim is recoverable by the Purchaser or the Company or any member of
the Purchaser's Group under the terms of any insurance policy of the
Purchaser or the Company or any member of the Purchaser's Group (or
would have been so recoverable but for any change in the terms of any
such policy after Completion).
13. Rescission:
Save in the event of fraud, no right of rescission shall be available
after Completion to the Purchaser by reason of any breach of the
Warranties or any other provision of this Agreement or the Tax Deed.
14. Trustee's Liability:
Without prejudice to the foregoing the liability of the Trustee for all
and any claims under this Agreement and/or the Tax Deed shall not exceed
the value for the time being of the Trust Assets less an amount equal to
the Trustee's bona fide estimate of any Permitted Tax Liability or
Permitted Trust Liability properly payable out of the Trust Assets.
15. No prejudice to Business:
Nothing in paragraphs 3 or 6 of this Schedule shall require the
Purchaser to do or omit to do any act or thing which would or may, in
the Purchaser's judgment, prejudice the business or interests of the
Company or any member of the Purchasers' Group and which would not be
required of the Purchaser to discharge its common law duty to mitigate
loss.
-84-