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EXHIBIT 4.4
DATED 28th February 1997
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SHARE PURCHASE AGREEMENT
DR ▇▇▇▇▇▇▇ ▇▇▇ (1)
AND
▇▇▇▇▇ ▇▇▇
PAREXEL INTERNATIONAL CORPORATION (2)
SHEFFIELD STATISTICAL SERVICES LIMITED
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
Tel: ▇▇▇▇-▇▇▇ ▇▇▇▇
Fax: ▇▇▇▇-▇▇▇ ▇▇▇▇
Ref: 0436403.01
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CONTENTS
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No. Heading Page
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1. DEFINITIONS 1
2. THE SHARES 9
3. REPAYMENT BY VENDORS AND THE COMPANY 10
4. COMPLETION 10
5. WARRANTIES 12
6. TAX INDEMNITIES 14
7. COMPLIANCE WITH US LAW 14
8. RESTRICTIVE COVENANTS 16
9. PENSION SCHEME 18
10. GENERAL PROVISIONS 18
11. ANNOUNCEMENTS 18
12. NOTICES 19
13. GOVERNING LAW AND JURISDICTION 19
THE FIRST SCHEDULE PARTICULARS OF THE VENDORS 20
THE SECOND SCHEDULE BASIC INFORMATION CONCERNING THE COMPANY 21
THE THIRD SCHEDULE PARTICULARS OF SUBSIDIARIES 22
THE FOURTH SCHEDULE PROPERTY 23
THE FIFTH SCHEDULE PROVISIONS AFFECTING THE PENSION SCHEME 24
THE SIXTH SCHEDULE WARRANTIES AND REPRESENTATIONS CLAUSE: 6 25
SEVENTH SCHEDULE TAX INDEMNITIES: CLAUSE 7 66
NINTH SCHEDULE 71
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THIS AGREEMENT is made the 28th day of February 1997
BETWEEN:
(1) THE SEVERAL PERSONS whose names and addresses are set out in Column (1) of
the First Schedule hereto ("the Vendors")
(2) PAREXEL INTERNATIONAL CORPORATION whose principal place of business is at
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ("the Purchaser")
WHEREAS
(A) Sheffield Statistical Services Limited ("the Company") has an authorised
and issued share capital particulars whereof together with other details
are set out in the Second Schedule hereto.
(B) The Vendors are the beneficial owners of or are otherwise able to procure
the transfer of the numbers of shares of the Company specified in Column
(2) of the First Schedule hereto opposite their respective names such
numbers of shares together comprising all the issued and allotted shares of
the Company.
(C) The Vendors are desirous of selling and the Purchaser is willing to
purchase the Shares (as hereinafter defined) on the terms and subject to
the conditions hereinafter contained.
(D) Particulars of the companies which at the date hereof are subsidiaries of
the Company are set out in the Third Schedule.
NOW IT IS HEREBY AGREED as follows:-
1. DEFINITIONS
1.1 In this Agreement and the Schedules hereto the following expressions shall
unless the context otherwise requires have the meanings following:-
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"the Accounts" the audited balance sheet as at the
Balance Sheet Date and audited profit
and loss account for the year ended on
the Balance Sheet Date of the Company
and the directors report and notes in
relation thereto;
"Associate" any person or company who is a connected
person as that expression is defined by
Section 839 of the ICTA;
"the Balance Sheet Date 30 June 1996
"Business day" a day on which banks shall be open in
London for the conduct of generally
banking business (excluding Saturdays);
"Claim" in the Seventh and Ninth Schedule hereto
shall mean any claim assessment notice
demand letter or other document issued
or action taken by or on behalf of any
Taxation Authority whereby it appears
that the Company or the Purchaser is to
be or is sought to be made subject to a
Liability to Taxation;
"the Consideration Shares" means such Common Stock of US$0.01 each
of the Purchaser issued to the Vendors
as Consideration hereunder;
"the Companies Acts" the Companies Acts 1985 and 1989, the
Insolvency ▇▇▇ ▇▇▇▇, the Business Names
▇▇▇ ▇▇▇▇, the Companies Securities
(Insider Dealing) ▇▇▇ ▇▇▇▇ and every
statutory modification or re-enactment
thereof for the time being in force;
"Completion" completion of the obligations of the
parties hereunder in accordance with the
provisions of Clause 5 hereof;
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"the Disclosure Letter" the letter of even date herewith from
the Vendors' to the Purchaser a copy of
which is annexed hereto;
"Encumbrance" includes any interest or equity of any
person (including, without prejudice to
the generality of the foregoing, any
right to acquire, option or right of
pre-emption), or any mortgage, charge,
pledge, lien, assignment, hypothecation,
security interest, title retention or
any other security agreement or
arrangement;
"the Effective Date" the date of Completion;
"Event" includes (without limitation) any act
omission, transaction or shortfall in
distributions whether or not the Company
is a party thereto and includes
Completion;
"Independent Accountant" means such person who shall be nominated
by either party upon agreement or
failing agreement by the President for
the time being of the Institute of
Chartered Accountants;
"Industrial Property Rights" patents, trade marks, registered
designs, pending application for any of
the foregoing, trade or business names
and copyright and all other similar
industrial, intellectual or commercial
rights;
"Liability to Taxation" means not only a liability to make an
actual payment of or in respect of
Taxation (whether the same has been the
subject of any assessment or demand at
Completion or otherwise) and whether
satisfied or unsatisfied at Completion
but shall also include:-
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(a) the loss, counteraction,
nullification, disallowance or
claw-back of any Relief granted by
or pursuant to any Taxation Statute
or otherwise for taxation purposes
which would (were it not for the
Liability to Taxation in question)
have been available to the Company
or the Purchaser; and
(b) the nullification cancellation or
set-off of a right to repayment of
Taxation which would (were it not
for the Liability to Taxation in
question) have been so available to
the Company or the Purchaser
and in the case of a relief allowance or
credit so lost, the amount of the relief
allowance or credit so lost, or if such
relief allowance or credit is a
deduction from or is offset against
gross income or profits, the amount of
Taxation which would (in the case of a
lost relief allowance or credit and on
the basis of tax rates current at the
date of such loss) have been saved
thereby but for such loss shall be
treated as an amount of Taxation for
which a liability on the Company or the
Purchaser (as appropriate) has arisen
and fallen due, and in the case of a
nullification cancellation or set-off of
a right to repayment of Taxation the
amount of the repayment which would
otherwise have been obtained shall be
treated as an amount of Taxation for
which a liability on the Company or the
Purchaser as appropriate has arisen and
fallen due;
"Management Accounts 31st January 1997;
Date"
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"Nasdaq" National Association of Securities
Dealers Automated Quotation System;
"the Property" the property or properties short
particulars whereof are set out in the
Fourth Schedule hereto and includes any
part or parts thereof;
"the Purchaser's means Messrs. Price Waterhouse of Thames
Accountants" Court, ▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇;
"the Purchaser's Solicitors" ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ of ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇
"Reliefs" in the Seventh Schedule hereto means all
amounts available to reduce either
profits or Taxation and includes
(without limitations) all losses
allowances exemptions set-offs
deductions credits and repayments;
"the Service Agreement" the agreement in the format set out in
the Eighth Schedule between the Company
and Dr ▇▇▇▇▇▇▇ ▇▇▇ respectively to be
entered into at Completion;
"the Shares" the shares of the Company specified in
Column (2) of the First Schedule hereto;
"Taxation" means:-
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(a) any charge, tax, duty, levy or
liability imposed by national or
local government or any other
person pursuant to any statute or
statutory provision including
orders, regulations, instruments,
bye-laws or other subordinate
legislation made under the relevant
statute or statutory provision and
includes (without limitation)
corporation tax, advance
corporation tax, income tax,
capital gains tax, development land
tax, value added tax, customs and
other import duties, national
insurance contributions, stamp
duty, capital duty, stamp duty
reserve tax, estate duty, capital
transfer tax, inheritance tax and
any amount which the Company is
liable to account for by way of
deduction or withholding, amounts
equivalent to the foregoing and any
payment whatsoever chargeable in
the United Kingdom or elsewhere
which the Company may be or become
bound to make to any person as a
result of the operation of any
enactment relating to Taxation;
(b) any capital transfer tax or
inheritance tax which:-
(i) is at the date hereof a charge
over any of the shares of the
Company; or
(ii) at the date hereof gives
rise to a power of sale over
the shares of the Company; or
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(iii) after the date hereof becomes
a charge on or gives rise to a
power of sale over any of the
shares of the Company being a
liability in respect of
additional capital transfer
tax or inheritance tax payable
on the death of any person
within three years or seven
years after a transfer of
value or gift and in deciding
whether a charge on or power
of sale over any of the shares
exists at any time the fact
that any capital transfer tax
or inheritance tax is not yet
payable or may be paid by
instalments shall be
disregarded and such tax shall
be treated as becoming due and
a charge or power of sale as
arising on the date of the
transfer of value or capital
distribution in respect of
which it becomes payable or
arises and the provisions of
IHTA S213 shall not apply
thereto;
(c) any Taxation assessed on the
Vendors under ICTA S776 which is
recoverable from the Purchaser
and/or the Company pursuant to the
provisions of S777(8) of that Act
to the extent the Vendors make a
claim for recovery from the
Purchaser and/or the Company;
(d) any penalties fines costs charges
interest or damages payable in
connection with any Taxation;
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(e) any payment made or liability
incurred in connection with any
reasonable settlement of any Claim
for Taxation;
(f) all costs and expenses incurred
by the Company or the Purchaser in
connection with any Claim for
Taxation to which the Tax
Indemnities relate;
"Taxation Authority" any national or local government,
authority or body whatsoever whether of
the United Kingdom or elsewhere
empowered to impose collect or
administer Taxation;
"Tax Indemnities" the indemnities provided by Clause 7 and
the Seventh Schedule hereto;
"Taxation Statute" any statute enactment law regulation or
practice enacted or issued or coming
into force providing for or imposing any
Taxation;
"the Vendors' Solicitors" Wake ▇▇▇▇▇ of ▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇;
"the Vendors Accountants" ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ of ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇;
"Warranty Claim" in relation to the Ninth Schedule shall
mean any claim made by the Purchaser
against the Vendors in respect of a
claim for breach of the Warranties in
the Sixth Schedule;
"Warranties" those representations and warranties
made to the Purchaser contained or
referred to in Clause 5 and the Sixth
Schedule hereto;
"ICTA" the Income and Corporation Taxes ▇▇▇
▇▇▇▇;
▇▇
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"▇▇▇" ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇;
"IHTA" the Inheritance Tax ▇▇▇ ▇▇▇▇;
"FA" Finance Act;
"TCGA" the Taxation of Chargeable Gains ▇▇▇
▇▇▇▇;
"VATA" the Value Added Tax ▇▇▇ ▇▇▇▇;
"TMA" the Taxes Management ▇▇▇ ▇▇▇▇.
1.2 References to the consequences of acts or transactions effected prior to
Completion shall include the combined effect of two or more acts or
transactions the first of which shall have taken place or be deemed to
have taken place on or before the date of Completion. Reference to the
result of Events on or before Completion shall include the combined
result of two or more Events the first of which shall have taken place
or is deemed to have taken place on or before Completion.
1.3 The expression "the Vendors" includes their respective personal
representatives.
1.4 Any document expressed to be "in the approved terms" means in a form
approved and for the purpose of identification signed by or on behalf of
the parties hereto.
1.5 Where any Warranty or matter disclosed in the Disclosure Letter refers
to the knowledge information awareness or belief of a Vendor, each of
the Vendors shall be deemed to have made all reasonable enquiries into
the subject matter of that Warranty or Disclosure.
1.6 The expression "Subsidiary" shall mean any subsidiary (as defined by
Section 736 of the Companies ▇▇▇ ▇▇▇▇ (as amended by the Companies Act
1989)) for the time being of the Company.
1.7 Save where the context otherwise precludes the expression "the Company"
where used in clauses 4, 6 and 8 and in the Sixth Schedule to this
Agreement shall mean each of the Company and each of its Subsidiaries.
1.8 References to Clauses, Sub-clauses and Schedules are references to
Clauses and Sub-clauses of this Agreement and Schedules to this
Agreement.
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1.9 In this Agreement and the Schedules hereto the masculine gender shall
include the feminine and neuter, the singular number shall include the
plural and vice versa, and references to persons shall include bodies
corporate, unincorporated associations and partnerships.
1.10 In this Agreement words and phrases the definition of which is contained
or referred to in Part XXVI of the Companies ▇▇▇ ▇▇▇▇ shall be construed
as defined therein.
1.11 References in this Agreement to any statute or statutory provision shall
include (except where the context otherwise requires) any statute or
statutory provision which amends extends consolidates or replaces the
same and any statute or statutory provision which has been amended,
extended, consolidated or replaced by the same and shall include any
order, regulation, instrument or other subordinate legislation made
under the relevant statute or statutory provision.
1.12 The headings in this Agreement are inserted for convenience only and
shall not affect the construction hereof.
1.13 Reference to income or profits or gains earned accrued or received shall
include income or profits or gains deemed to have been or treated as or
regarded as earned accrued or received for the purposes of any Taxation
Statute.
2. THE SHARES
2.1 The Vendors shall sell and the Purchaser shall purchase with effect from
the Effective Date the Shares free from any Encumbrance and together
with all accrued benefits and rights for the consideration described in
sub-clause 2.2 below ("the Consideration").
2.2 The Consideration shall be satisfied by the allotment and issue to the
Vendors credited as fully paid of 66,044 Common Stock of US$0.01 each of
the Purchaser ranking pari passu with the existing issued Common Stock
of US$0.01 each in the capital of the Purchaser;
3. REPAYMENT BY VENDORS AND THE COMPANY
3.1 The Vendors will prior to or simultaneously with Completion repay to the
Company any sums due by the Vendors, any Associate of the Vendors or any
of them (or by any person to whom they or any of them are or is a
trustee or personal representative) to the Company at Completion and
shall at Completion procure that neither they nor any
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such person as aforesaid has any claim or right of action against the
Company (other than in respect of current remuneration as directors or
executives) and that the Company is not in any way obliged or indebted
(other than as aforesaid) to them or any such person and at Completion
the Vendors will confirm in writing to the Purchaser that they have so
procured
3.2 At Completion the Purchaser shall procure that the Company shall repay
(subject to Clause 4 below) to the Vendors certain amounts owing to them
as specified in the Disclosure Letter.
3.3 The sum of (pound)12,000 due from the Company to the Vendors may be
withheld by the Company and/or the Purchaser against any liability of
the Vendors under the Tax Indemnities (with particular references to
penalties for late filing etc.) for a period of twelve months from the
date hereof and the sum of (pound)12,000 may be applied by the Company
and/or Purchaser against such liability. Thereafter any balance shall be
paid to the Vendors.
3.4 The Purchaser shall use its reasonable endeavours to secure the release
of the Vendors from any guarantees and other contingent liabilities
listed in the Disclosure Letter and the Purchaser shall until it has
obtained a release indemnify and keep indemnified the Vendors against
any liability (including costs, damages and expenses) thereunder or
which may be incurred in relation thereto.
4. COMPLETION
4.1 Completion shall take place on 28 February 1997 at the offices of the
Purchaser's Solicitors or such other offices as the parties may
subsequently agree when:-
4.1.1 the Vendors shall deliver or cause to be delivered to the
Purchaser:-
(a) duly executed Transfers together with the relative share
certificates in respect of the Shares;
(b) the certificate of incorporation, all certificates on
change of name, the seal and statutory books of the
Company made up to the date of Completion;
(c) the Leases to the Property;
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(d) if the Purchaser so requires an effective waiver by each
of the members of the Company of any rights which he may
have under the Articles of Association of the Company to
have the Shares or any of them offered to him for
purchase and any other documents necessary to
substantiate the right of the transferors of the Shares
pursuant to this Agreement to transfer the same;
(e) written confirmation pursuant to Clause 3.1;
(f) written resignation letters executed under seal by such
of the directors and secretaries of the Company and the
Subsidiaries as the Purchaser may nominate, each such
letter incorporating an acknowledgement that the party
resigning has no claims (whether for compensation for
loss of office or termination of employment, unpaid
remuneration or otherwise howsoever) against the Company
or any of the Subsidiaries; and
4.1.2 the Vendors shall procure that the Directors shall hold a
meeting of the Board of the Company at which
(a) the Directors shall appoint such persons as the
Purchaser may nominate as directors of the Company and
procure the resignation without compensation of any
nature whatsoever of such of the Directors and Secretary
of the Company as the Purchaser may nominate;
(b) the Directors shall vote in favour of the registration
of the Purchaser or its nominees as members of the
Company subject to the production of duly stamped and
completed Transfers;
(c) there shall be presented the written resignation of the
present Auditors which shall contain a statement that
there are no circumstances connected with such
resignation which they consider should be brought to the
attention of the shareholders or creditors of the
Company and a statement of the amount of their
outstanding fees and costs;
(d) Messrs Price Waterhouse shall be appointed Auditors;
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4.1.3 the Vendors shall procure the convening of an extraordinary
general meeting of the Company and the passing of a special
resolution to adopt new articles of association in the approved
terms;
4.1.4 the Vendors shall procure that the Company will and the other
persons and parties thereto shall enter into the Service
Agreements;
4.1.5 Subject to the performance by the Vendors of their obligations
in accordance with the foregoing provisions of this Clause 5,
the Purchaser shall allot to each of the Vendors the number of
the Consideration Shares of the Purchaser to which he is
entitled hereunder and deliver the relative documents of title.
4.2 If in any respect the provisions of sub-clauses 4.1.1, 4.1.2, 4.1.3 and
4.1.4 are not complied with on the date for Completion set by clause 4.1
the Purchaser and/or the Vendors if appropriate may:-
4.2.1 defer Completion to a date not more than 10 days after the date
set out above (and so that the provisions of this sub-clause
shall apply to Completion as so deferred); or
4.2.2 proceed to Completion so far as practicable (without prejudice
to its rights hereunder); or
4.2.3 rescind this Agreement.
5. WARRANTIES
5.1 The Purchaser has entered into this Agreement and proposes to acquire
the Shares on the faith of the Warranties.
5.2 In particular and without prejudice to the generality of sub-clause 5.1
the Vendors hereby warrant and represent to the Purchaser that the
recitals to this Agreement and the Warranties are at the date hereof and
will at Completion be true and accurate in all respects.
5.3 The Purchaser shall not be entitled to claim that any fact renders any
of the Warranties untrue or misleading or caused them to be breached if
it has been fully fairly and accurately disclosed to the Purchaser in
the Disclosure Letter.
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5.4 The Vendors hereby covenant and undertake to the Purchaser that, if
after the date hereof it shall be found that any matter the subject of a
Warranty was not as warranted then, notwithstanding any further right of
the Purchaser hereunder in respect of such breach of Warranty, if the
effect thereof is that:-
5.4.1 the value of any asset belonging to the Company is less than its
value would have been had there been no breach of Warranty; or
5.4.2 any asset represented as belonging to the Company does not so
belong; or
5.4.3 the Company has incurred or is under any liability or contingent
liability which it would not have incurred or been under had
there been no breach of Warranty;
then the Vendors shall on demand pay to the Purchaser (or, if so
requested by the Purchaser, to the Company) an amount equal to the
amount by which the value of the net assets of the Company is less than
it would have been had there been no such breach of Warranty and any
such payment made by the Vendors shall be taken into account in
assessing the damages of the Purchaser in connection with, arising out
of or resulting from any such breach of Warranty.
5.5 No claim by the Purchaser under the provisions of this Clause 5 shall be
prejudiced nor shall the amount of any such claim be reduced in
consequence of any information relating to the Company which may at any
time have come to the knowledge of the Purchaser or any of its advisers
(other than information contained in the Disclosure Letter and any
annexure thereto) and it shall not be a defence to any claim against the
Vendors that the Purchaser knew or ought to have known or had
constructive knowledge of any information (other than information
contained or supplied as aforesaid) relating to the circumstances giving
rise to such claim.
5.6 The Warranties are separate and independent and save as expressly
provided in this Agreement or in the Disclosure Letter shall not be
limited by reference to any other paragraph or anything in this
Agreement and such Warranties shall remain in full force and effect
notwithstanding Completion.
5.7 The Vendors shall procure that prior to Completion the Purchaser, its
agents, accountants and solicitors are given promptly on request all
such facilities and information regarding the business, assets,
liabilities, contracts and affairs of the
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Company and of the documents of title and other evidence of ownership of
its assets as the Purchaser may reasonably require.
5.8 The Vendors undertake (in the event of any claim being made against any
of them in connection with the sale of the Shares to the Purchaser) not
to make any claim against the Company, or a director or an employee of
the Company, on whom any of them may have relied before agreeing to any
term of this Agreement or authorising any statement in the Disclosure
Letter but so that this shall not preclude any Vendor from claiming
against:-
5.8.1 any other Vendor under any right of contribution or indemnity to
which he may be entitled; and
5.8.2 any employee of the Company on whom they may have relied if they
have been fraudulent; and
(each Vendor hereby agrees to consent to the grant of injunctive relief
to restrain a breach of the undertaking contained in this sub-paragraph
if requested by the Purchaser so to do.
6. TAX INDEMNITIES
The Vendors hereby indemnify the Purchaser in the terms of the Seventh
Schedule hereto.
7. COMPLIANCE WITH US LAW
The Vendor:
7.1 warrants and represents to the Purchaser that the Vendor:-
7.1.1 is not a US person, as that term is defined under Regulation S
of the Securities ▇▇▇ ▇▇▇▇ as amended ("the Act") and as at 15
May 1996 the Vendor was outside the United States (as that term
is defined under Regulation S) and is outside of the United
States as of the date of the execution and delivery of this
Agreement.
7.1.2 is acquiring the Consideration Shares for his own account and
not on behalf of any US person or any other person, and the
transaction has not been pre-
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arranged with a purchaser in the United States and the Vendor is
acquiring the Consideration Shares for investment purposes and
not with a view towards distribution and has no present
arrangement to sell the Consideration Shares.
7.1.3 is not an officer or director of any affiliate of the Purchaser.
7.2 acknowledges and agrees that the Consideration Shares have not been
registered under the Act, and may not be offered or sold in the United
States or to US persons unless the Consideration Shares are registered
under the Act or an exemption from the registration requirements of the
Act is available.
7.3 acknowledges that the Consideration Shares are being offered and sold to
him in reliance on specific exemptions from the registration
requirements of the United States Federal and State securities laws and
that the Purchaser is relying upon the truth and accuracy of the
representations, warranties, agreements, acknowledgements and
understandings of the Vendor set forth herein in order to determine the
applicability of such exemptions and the suitability of Vendor to
acquire the Consideration Shares.
7.4 acknowledges that it is his responsibility to satisfy himself as to the
full observance by this transaction and the sale of the Consideration
Shares to him of the laws of any jurisdiction outside the United States
and that he has done so.
7.5 acknowledges that in view of the United States Securities and Exchange
Commission, the statutory basis for the exemption claimed for the
transactions would not be present if the offer and sale of the
Consideration Shares to the Vendor although in technical compliance with
Regulation S, is part of a plan or scheme to evade, the registration
provisions of the Act and the Vendor confirms that this transaction is
not part of any such plan or scheme.
7.6 has received and carefully reviewed the Purchaser's Prospectus dated
March 1, 1996 and Quarterly Report on Form 10-Q for the Quarter Ended
March 31, 1996 (collectively, the "SEC Reports") and has had a
reasonable opportunity to ask questions of and receive answers from the
Purchaser concerning the Purchaser, and all such questions, if any, have
been answered to the full satisfaction of the Vendor.
7.7 acknowledges that no representations or warranties have been made to him
by the Purchaser or any agent, employee or affiliate of the Purchaser
and in entering into this
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transaction the Vendor is not relying upon any information, other than
that contained in this Agreement, the SEC Reports and the results of
independent investigations by the Vendor.
7.8 has not sold, exchanged, transferred, pledged, disposed or otherwise
reduced his risk relative to the Consideration Shares during the 30 day
period preceding the date hereof.
7.9 acknowledges and agrees that this transaction is intended to be
accounted for as a pooling of interests for financial accounting
purposes, and, in that regard the Vendor hereby agrees with the
Purchaser that the Vendor will not sell, exchange, transfer, pledge,
dispose or otherwise reduce his risk to the Consideration Shares during
the period which begins on the date hereof and ends at such time as the
Purchaser publicly announces financial results covering at least thirty
days of post-closing combined operations of the Purchaser and the
company (the "Pooling Lock-up Period") and the Purchaser at its
discretion, may cause stop transfer orders to be placed with its
transfer agent with respect to the Consideration Shares during the
Pooling Lock-up Period.
7.10 acknowledges and agrees that all offers and sales of the Consideration
Shares prior to the expiration of the period commencing on the date
hereof and ending 40 days thereafter (the "Restricted Period") shall
only be made in compliance with (i) the Pooling Lock-up Period and (ii)
the safe harbour provisions contained in Regulation S, with which the
Vendor is familiar, or pursuant to an exemption from registration under
the Act, and the Vendor shall not take a short position directly or
indirectly with respect to the Purchaser's during the Restricted Period,
and that all offers and sales after the expiration of the Restricted
Period in the United States or to the US persons shall be made only
pursuant to such a registration or to such exemption from registration.
8. RESTRICTIVE COVENANTS
8.1 For the purpose of assuring to the Purchaser the full benefit of the
businesses and goodwill of the Company each of the Vendors hereby
undertakes by way of further consideration for the obligations of the
Purchaser under this agreement as separate and independent agreements
that:-
8.1.1 he will not at any time after Completion disclose to any person
or himself use for any purpose and shall use his best endeavours
to prevent the
20
-18-
publication or disclosure of, any information concerning the
business, accounts or finances of the Company or its
subsidiaries or any of its clients or customers transactions or
affairs, which may, or may have, come to his knowledge;
8.1.2 for a period of 4 years after Completion he will not except as
hereinafter mentioned either on his own account or in
conjunction with or on behalf of any person firm or company
carry on or be engaged concerned or interested in any trade or
business conducted in or from any member State of the European
Union which is similar to or competitive with any trade or
business carried on by the Company within the period of two
years prior to the date of Completion;
8.1.3 for a period of 4 years after Completion he will not (save with
the prior written consent of the Purchaser) either on his own
account or in conjunction with or on behalf of any other person
firm or company directly or indirectly:
(a) solicit or entice away from the Company or employ any
officer manager or servant whether or not such person
would commit a breach of his contract of employment by
reason of leaving the service of the Company; nor
(b) solicit or accept the custom of any person firm or
corporation which during the one year prior to the date
of Completion shall have been a customer of the Company.
Provided that nothing in this sub-clause shall preclude or inhibit any
Vendor from carrying out his duties pursuant to a service agreement or
contract of employment between himself and the Company.
8.2 The restrictions contained in sub-clause 8.1 are considered reasonable
by the parties but in the event that any such restriction shall be found
to be void but would be valid if some part thereof were deleted or the
period or area of application reduced such restriction shall apply with
such modification as may be necessary to make it valid and effective.
21
-19-
9. PENSION SCHEME
The provisions set out in the Fifth Schedule shall apply.
10. GENERAL PROVISIONS
10.1 The Vendors shall (and shall procure that any other necessary party
shall) execute and do all such documents acts and things as may be
reasonably required by the Purchaser for securing to or vesting in the
Purchaser the legal and beneficial ownership of the Shares forthwith
upon Completion in accordance with the terms and conditions of this
Agreement.
10.2 This Agreement shall not be assignable by any party hereto without the
prior written consent of the others save by the Purchaser to any
Subsidiary of the Purchaser to which the Shares shall be transferred.
10.3 The obligations of the Vendors are joint and several and such
obligations and undertakings shall be enforceable accordingly.
10.4 This Agreement (together with any document annexed hereto and signed by
or on behalf of the parties hereto) constitutes the whole Agreement
between the parties hereto and no variations hereof shall be effective
unless made in writing.
10.5 The provisions of this Agreement in so far as the same shall not have
been performed at Completion shall remain in full force and effect.
10.6 The Purchaser may release or compromise the liability of any of the
Vendors hereunder or grant to any Vendor time or other indulgence
without affecting the liability of any other Vendor hereunder.
10.7 None of the provisions of this Agreement which are relevant restrictions
as that term is defined by the Restrictive Trade Practices Act 1976
shall come into effect until the day following the day on which full
particulars of this Agreement have been furnished to the Office of Fair
Trading in accordance with the said Act.
11. ANNOUNCEMENTS
No party to this Agreement shall make any statement or announcement in
connection with this transaction except with the prior approval of the
other party save as may be
22
-20-
required by law or save to the extent necessary to comply with the
requirements of the NASDAQ and the Securities and Exchange Commission.
12. NOTICES
Any notice required to be given by any party hereto to any other shall
be in writing and may be served personally or by post and if served by
post shall be served by prepaid registered letter sent through the post
to the address of the party to be served as shown in this Agreement or
such other address as may from time to time be notified for this purpose
and any notice so served shall be deemed to have been served 48 hours
after the time on which it is posted and in proving such service it
shall be sufficient to prove that the notice was properly addressed and
posted.
13. COSTS
Each party shall pay its own costs in connection with this Agreement.
14. GOVERNING LAW AND JURISDICTION
This Agreement shall be governed by English law and the parties hereby
submit to the non-exclusive jurisdiction of the English Courts.
AS WITNESS whereof this Agreement has been entered into the day and year first
above written.
23
-21-
THE FIRST SCHEDULE
------------------
PARTICULARS OF THE VENDORS THEIR SHAREHOLDINGS
AND THE CONSIDERATION
(1) (2) (3)
Names and Addresses No. of Ordinary Shares No. of Common Stock
Shares of the Purchaser
allotted to the Vendors
--------------------------------------------------------------------------------
(pound)
DR ▇▇▇▇▇▇▇ ▇▇▇
St ▇▇▇▇▇ View 73 65,152*
off ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇ ▇▇▇ 892*
St ▇▇▇▇▇ View 1
off ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇
* the share certificate will
be issued in the name of Dr.
▇▇▇▇▇▇▇ ▇▇▇ for and on
behalf of both Vendors.
24
-22-
THE SECOND SCHEDULE
-------------------
BASIC INFORMATION CONCERNING THE COMPANY
A. The Company
1. Registered Number : 2375867
2. Date of incorporation : 25th April 1989
3. Address of registered office : ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
4. Authorised share capital : P100 in Ordinary Shares of P1.00 each
5. Issued share capital : P74 in Ordinary Shares of P1.00 each
6. Directors:
Full Names Addresses
DR ▇▇▇▇▇▇▇ ▇▇▇ St ▇▇▇▇▇ View
off ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇ ▇▇▇ St ▇▇▇▇▇ View
off ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇
7. Secretary:
Full Name
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
25
-23-
THE THIRD SCHEDULE
------------------
PARTICULARS OF SUBSIDIARIES AND INVESTMENTS
Name Date and Place of Issued Share Held by
Incorporation and Capital
Registered Number
-------------------------------------------------------------------------------------------------
(1) S-Cubed Clinical 23rd May 1994 P1,110 Sheffield Statistical Services
Services Limited Cardiff comprising Limited
(Dormant) 2932048 1,110 ordinary
P1 shares
(2) Capital Clinical 4 March 1994 P2 comprising S-Cubed Clinical Services
Research Services ▇▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇ (▇)▇ Limited
Limited 2904685 shares
(Dormant)
(3) S-Cubed Clinical 5th October 1995 P100 50 held by Sheffield
Limited Cardiff comprising Statistical Services
(Trading) 3110213 100 ordinary Limited
P1 shares
26
-24-
THE FOURTH SCHEDULE
-------------------
PROPERTY
Short Description of Property Tenure Date and Term of Lease if Owner
Leasehold
------------------------------------------------------------------------------------------------
(1) 12A + ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, Leasehold 15th June 1992 ▇▇▇ ▇▇▇▇▇▇▇
Broomhill, Sheffield 6 years from 15th June
1992
(2) ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, Leasehold 15th June 1992 Giltfast
Broomhill, Sheffield 6 years from 15th June Property
1992 Limited
(3) Part 1st Floor Unit 6 Leasehold 18th December 1996 CNC Grand
The Grand Union Office Park 3 years from 18th October Union Limited
Packet ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇
27
-25-
THE FIFTH SCHEDULE
------------------
PROVISIONS AFFECTING THE PENSION SCHEME
NONE
28
-26-
THE SIXTH SCHEDULE
------------------
WARRANTIES AND REPRESENTATIONS: CLAUSE 5
In this Schedule (save where the context otherwise requires) the expression "the
Company" shall mean each of the Company and each of its Subsidiaries (including
5-Cubed Clinical Limited).
The warranties and representations referred to in Clause 6 of the foregoing
Agreement are that:-
1. CONSTITUTION OF THE COMPANY
1.1 Share Capital
-------------
The Company has an authorised and issued share capital as set out in the
Second Schedule and all its issued shares are beneficially owned by the
Vendors in the numbers set opposite their respective names in the second
column of the First Schedule to the foregoing agreement free from all
liens charges and encumbrances or interests in favour of any other
person.
1.2 Memorandum and Articles
-----------------------
The copy of the Memorandum and Articles of Association of the Company
annexed to the Disclosure Letter is true and complete and has embodied
therein or annexed thereto a copy of every such resolution or agreement
as is referred to in Section 380 of the Companies ▇▇▇ ▇▇▇▇.
1.3 Company Resolutions
-------------------
Neither the Company nor any class of its members has passed any
resolution (other than resolutions relating to business at Annual
General Meetings which was not special business).
1.4 Options etc.
------------
No person has the right (whether exerciseable now or in the future and
whether contingent or not) to call for the issue of any share or loan
capital of the Company under any option or other agreement (including
conversion rights and rights of pre-emption) and no claim has been made
by any person to be entitled to any such right.
29
-27-
1.5 Returns and compliance with Company Law etc.
--------------------------------------------
The Company has to the Vendors knowledge information and belief complied
with the provisions of the Companies Acts The Financial Services ▇▇▇
▇▇▇▇ and the ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ and all returns particulars
resolutions and other documents required under any legislation to be
delivered on behalf of the Company to the Registrar of Companies or to
any other authority whatsoever have been properly made and delivered.
1.6 Statutory Books
---------------
The register of members and other statutory books of the Company have
been properly kept and contain a true and complete record of the matters
which should be dealt with therein; no notice or allegation that any of
the same is incorrect or should be rectified has been received.
1.7 Insolvency
----------
No order has been made or petition presented or resolution passed for
the winding up of the Company, nor has any distress execution or other
process been levied in respect of the Company, nor is there any
unfulfilled or unsatisfied judgment or court order outstanding against
the Company.
1.8 Particulars of Subsidiaries
---------------------------
The particulars of the Subsidiaries set out in the Third Schedule above
are true and complete and the shares of the Subsidiaries are held and
owned as shown in the Third Schedule free from all encumbrances and with
all rights now or hereafter attaching thereto and the Company has no
other subsidiary.
1.9 The Shares
----------
1.9.1 Commission
----------
No one is entitled to receive from the Company any finders fee,
brokerage, or other commission in connection with the purchase
of shares in the Company or any Associate company of the
Company.
30
-28-
1.9.2 New Issues since the Balance Sheet Date
---------------------------------------
Save as provided in this Agreement no share or loan capital has
been issued or agreed to be issued by the company since the
Balance Sheet Date.
1.9.3 There are no agreements or arrangements in force which provide
for the present or future issue, allotment or transfer of or
grant to any person the right (whether conditional or otherwise)
to call for the issue, allotment or transfer of any share or
loan capital of the Company (including any option of pre-emption
or conversion).
1.9.4 The Company has not adopted, agreed or resolved to adopt any
employee share option scheme, profit sharing involving the
Company's share capital or share incentive scheme of any nature
whatsoever.
1.10 Capacity of Vendors
-------------------
Each Vendor has full power to enter and perform this Agreement, which
when executed constitute binding obligations on each Vendor in
accordance with their terms.
1.11 Vendors' other interests
------------------------
No Vendor nor any Associate of any Vendor has any estate, right or
interest, directly or indirectly, in any business other than that now
carried on by the Company which is or is likely to be or become
competitive with the business or the proposed business of the Company
save as the registered holder or beneficial owner of any class of
securities of any company if such class of securities is listed on any
recognised Stock Exchange and in respect of which such person holds, or
is beneficially interested in, (together with his Associates) less than
five per cent. of any single class of the securities in that company.
2. ACCOUNTS
2.1 Accounts warranty
-----------------
The Accounts:-
31
-29-
2.1.1 have been prepared in accordance with the requirements of the
Companies Acts and all relevant statutes and generally accepted
accountancy principles;
2.1.2 give a true and fair view of the assets and liabilities of the
Company at the Balance Sheet Date and the profits of the Company
for the financial period ended on that date;
2.1.3 apply accounting policies which have been consistently applied
in the audited balance sheet and profit and loss accounts for
the three financial years prior to the Balance Sheet Date
(except for intervening Statements of Standard Accounting
Practice);
2.1.4 comply with all current Statements of Standard Accounting
practice applicable to a United Kingdom company;
2.1.5 are not save to the extent expressly stated in such accounts
affected by any extraordinary exceptional or non-recurring item;
2.1.6 properly reflect the financial position of the Company as at the
Balance Sheet Date.
2.2 Management Accounts warranty
---------- -----------------
The Management Accounts:-
2.2.1 give a true and fair view of the assets and liabilities of the
Company at the Management Accounts Date and the profits of the
Company for the financial period ended on that date;
2.2.2 apply accounting policies which have been consistently applied
in the audited balance sheet and profit and loss accounts for
the three financial years prior to the Balance Sheet Date
(except for intervening Statements of Standard Accounting
Practice);
2.2.3 comply with all current Statements of Standard Accounting
practice applicable to a United Kingdom company;
2.2.4 are not save to the extent expressly stated in such accounts
affected by any extraordinary exceptional or non-recurring item;
32
-30-
2.2.5 properly reflect the financial position of the Company as at the
Management Accounts Date.
2.3 Provisions for liabilities
--------------------------
Proper provision or reserve has been made in the Accounts for all
liabilities and capital commitments of the Company outstanding at the
Balance Sheet Date whether known contingent unquantified disputed or
not.
2.4 Tax Provisions
--------------
Proper provision or reserve has been made in the Accounts for all
Taxation assessed or liable to be assessed on the Company or for which
it is accountable in respect of income profits or gains earned accrued
or received on or before the Balance Sheet Date or any event on or
before the Balance Sheet Date including distributions made down to such
date or provided for in the Accounts and proper provision has been made
in the Accounts for deferred taxation in accordance with Statement of
Standard Accounting Practice 15.
2.5 Work in progress
----------------
In the Accounts:-
2.5.1 the Company's work in progress has been valued on a basis
consistent with that adopted for the purpose of the Company's
audited accounts in respect of the beginning and end of each of
the three last preceding accounting periods;
2.5.2 redundant or obsolete work in progress as at the Balance Sheet
Date has been wholly written off;
2.5.3 the value attributed to each item of the remaining work in
progress included in the Accounts does not exceed the lower of
cost and market value as at the Balance Sheet Date;
2.5.4 the provisions of Statement of Standard Accounting Practice 9
have been adhered to.
2.6 Books and Records
-----------------
33
-31-
All accounts, books, ledgers, financial and other records of whatsoever
kind of the Company:-
2.6.1 have been fully and properly maintained are in the possession of
the Company and contain full records of all matters required to
be entered into therein by the Companies Acts;
2.6.2 do not contain or reflect any material inaccuracies or
discrepancies;
2.6.3 give and reflect a true and fair view of the matters which ought
to appear therein.
2.7 Debts
-----
2.7.1 All debts owed to the Company as at Completion will realise
their full face value and be good and collectable in the
ordinary course of business and in any event will have been paid
to the Company within three months of Completion.
2.7.2 No amount included in the Accounts as owing to the Company as at
the Balance Sheet Date is now more than three months overdue nor
has any such amount been released for an amount less than the
value at which it was included in the Accounts nor is any such
debt now regarded by the Vendors as irrecoverable in whole or in
part.
2.7.3 The Company has not factored or discounted its debts or agreed
to do so.
3. FINANCE
3.1 Financial Position and Prospects
--------------------------------
There has been no material deterioration in the financial position or
prospects or turnover of the Company since the Balance Sheet Date.
3.2 Capital Commitments
-------------------
There were no commitments on capital account outstanding at the Balance
Sheet Date (save as disclosed in the Accounts) and since the said date
the Company has not entered into, or agreed to enter into, any capital
commitments.
34
-32-
3.3 Borrowings
----------
The total amount borrowed by the Company and its Subsidiaries from its
bankers does not exceed its overdraft facilities and the total amount
borrowed by the Company and its Subsidiaries from whatsoever source does
not exceed any limitation on its borrowing contained in the Articles of
Association of, or in any Debenture or Loan Stock Deed or other
instrument executed by, the Company or any subsidiary.
3.4 Bank accounts
-------------
A statement of the bank accounts of the Company and of the credit or
debit balances on such accounts as at a date not more than seven days
before the date hereof has been supplied to the Purchaser. The Company
has not any other bank or deposit accounts (whether in credit or
overdrawn) not included in such statement. Since such statement there
have been no payments out of any such accounts except for routine
payments and the balances on current account are not now substantially
different from the balances shown on such statements.
3.5 Distributions and Loan Repayments
---------------------------------
3.5.1 Since the Balance Sheet Date no distributions of capital or
income have been declared made or paid in respect of any share
capital of the Company and (excluding fluctuations in overdrawn
current accounts with bankers) no loan or loan capital or
preference capital of the Company has been repaid in whole or
part or has become liable to be repaid.
3.5.2 All dividends or distributions of profits declared, made, or
paid by the Company since the date of incorporation of the
Company have been declared, made, or paid in accordance with its
Articles of Association and the Companies Acts or other relevant
legislation.
3.6 Working Capital
---------------
Having regard to existing bank and other facilities, the Company has
sufficient working capital for the purposes of continuing to carry on
its business in its present form and at its present level of turnover
for the foreseeable future and for the purposes of executing, carrying
out and fulfilling in accordance with their terms all orders,
35
-33-
projects and contractual obligations which have been placed with, or
undertaken by, the Company.
3.7 Continuance of facilities
-------------------------
In relation to all debentures, acceptance credits, overdrafts, loans or
other financial facilities outstanding or available to the Company
("facilities"):-
3.7.1 the Vendors have supplied to the Purchaser in writing full
details thereof and true and correct copies of all documents
relating thereto;
3.7.2 neither the Vendors, nor the Company, has done anything nor is
aware of any circumstances whereby the continuance of any
facility in full force and effect might be affected or
prejudiced which might give rise to any detrimental alteration
in the terms or conditions of any of the facilities;
3.7.3 none of the facilities is dependent upon the guarantee or
indemnity of or any security provided by a third party other
than the Company or a Subsidiary;
3.7.4 no Vendor has any knowledge, information or belief that as a
result of the acquisition of the Shares by the Purchaser or any
other thing contemplated in this agreement any of the facilities
might be terminated or mature prior to its stated maturity.
4. OWNERSHIP OF ASSETS
4.1 Assets
------
4.1.1 Except for current assets disposed of by the Company in the
ordinary course of its business the Company is the owner of and
has good marketable title to all assets included in the Accounts
or which have been acquired by the Company since the Balance
Sheet Date.
4.1.2 The Company has not disposed or agreed to dispose of any of its
assets (save in the ordinary course of its business) or granted
or agreed to grant, any Encumbrance in respect of the whole or
any part of its estate or interest in any of the assets
(including the undertaking goodwill and uncalled capital of the
Company) included in the Accounts or acquired or agreed to be
acquired since the Balance Sheet Date.
36
-34-
4.1.3 Save as disclosed in the Accounts none of the fixed assets
(including the undertaking, goodwill or uncalled capital) of the
Company is subject to any Encumbrance, or any agreement or
commitment to give or create any Encumbrance, but the same are
the sole unencumbered absolute property of the Company.
4.1.4 Since the Balance Sheet Date, save for disposals in the ordinary
course of its business, the assets of the Company have been in
the possession of, or under the control of the Company.
4.1.5 The assets owned by the Company together with the assets held
under the hire purchase, leasing or rental agreements to which
the Company is party (details of which have been listed in the
Disclosure Letter) comprise all assets necessary for the
continuation of the business of the Company as now carried on.
4.2 Title Retention
---------------
The Company has not acquired or agreed to acquire any material asset on
terms that property therein does not pass until full payment is made.
4.3 HP and Rental agreements etc
----------------------------
4.3.1 The Company has not defaulted in any of the provisions of any
hire, or hire purchase, or lease, or rental agreement, or
conditional sale agreement, or agreement for payment on deferred
terms, or ▇▇▇▇ of sale, or any trading contract under which
title to any property is retained by another person or any
arrangement similar in effect to the foregoing.
4.3.2 The Company has observed and performed all the terms and
conditions on its part to be observed and performed in all such
agreements, arrangements, leases, contracts and bills referred
to in paragraph 4.3.1 above.
4.4 Plant
-----
All the machinery and plant including fixed plant and machinery, and all
vehicles and office and other equipment used in connection with the
business of the Company:-
37
-35-
4.4.1 are to the Vendors knowledge information and belief in a good
and safe state of repair and condition and are in satisfactory
working order and have been regularly and properly maintained;
4.4.2 are each capable, and will (subject to fair wear and tear) be
capable, over the period of time during which it will be written
down to a nil value in the accounts of the Company (in
accordance with normal Accounting principles consistently
applied prior to the date hereof), of doing the work for which
it was designed and/or purchased;
4.4.3 are not surplus to the Company's requirements;
4.4.4 are in the possession and control of, and are the absolute
property free from any Encumbrance of, the Company save for
those items held under hire purchase or rental agreements the
value of which items in the aggregate does not exceed
P1,000.
4.5 Insurances
----------
4.5.1 The policies of insurance which are maintained by the Company
afford the Company adequate cover against such risks as are
commonly covered by insurance by companies carrying on the same
type of business as the Company and in particular insure the
stock in trade assets and undertakings of the Company (of an
insurable nature) against fire in their full replacement or
reinstatement value.
4.5.2 The Company is now, and has at all material times been,
adequately covered against accident, damage, injury, third party
loss (including product liability), loss of profits and other
risks normally covered by insurance.
4.5.3 All insurance is currently in full force and effect and nothing
has been done or omitted to be done which could make any policy
of insurance void or voidable or which is likely to result in an
increase in premium.
4.5.4 There is no claim outstanding under any such policy nor are the
Vendors aware of any circumstances likely to give rise to a
claim.
38
-36-
4.5.5 The Company has paid all sums falling due prior to Completion in
respect of premiums on all policies of insurance maintained by
the Company and the Company will at its expense from time to
time:-
(a) renew all policies due for renewal between the date
hereof and the Completion Date for a reasonable and
normal period of renewal; and
(b) insure and maintain insurance for the full value thereof
upon all assets coming into its possession between the
said date in accordance with its normal practice and for
a reasonable and normal period,
such periods in every case to extend beyond the Completion Date.
5. BUSINESS OF THE COMPANY
5.1 Changes since the Balance Sheet Date
------------------------------------
Since the Balance Sheet Date the Company:-
5.1.1 has carried on its business in the ordinary and usual course;
5.1.2 has not entered into any transaction nor assumed any liability
nor made any payment not provided for in the Accounts which is
not in the ordinary course of its business;
5.1.3 has carried on the business without any interruption or
alteration in the nature scope or manner of its business;
5.1.4 has not borrowed or raised any money or taken any financial
facility (except such short term borrowings from its bankers as
are disclosed in the Disclosure Letter);
5.1.5 has paid its creditors within the times agreed with such
creditors and there are not debts outstanding by the Company
which have been due for more than four weeks;
5.2 Licences etc.
-------------
5.2.1 All necessary licences consents permits and authorities (public
and private) have been obtained by the Company to enable the
Company to carry on its
39
-37-
business effectively in the places and in the manner in which
such business is now carried on and all such licences consents
permits and authorities are valid and subsisting.
5.2.2 The Company is not in breach of any of the terms and conditions
of any such licences or consents and there are no factors known
to the Vendors that might in any way prejudice the continuation
or renewal of any of such licences or consents.
5.3 Breach of statutory provisions, etc.
------------------------------------
5.3.1 Neither the Company, nor any of its officers, agents or
employees to the Vendors knowledge information and belief
(during the course of their duties in relation to the Company)
have committed, or omitted to do, any act or thing the
commission or omission of which is, or could be, in
contravention of any Act, Order, Regulation, or the like in the
United Kingdom which is punishable by fine or other penalty; and
5.3.2 the Company has not received any Notice of any offence or breach
of statutory duty or any other Notice whatsoever (whether or not
giving rise to a criminal liability) under the provisions of the
▇▇▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇, The Office Shops and Railway Premises Act,
1963, The Fire Precautions Act, 1971 or The Health and Safety at
Work Act, 1974 (or any Order or Regulation made thereunder) the
Wages ▇▇▇ ▇▇▇▇;
5.3.3 the Company has duly complied with all relevant requirements of
the Financial Services ▇▇▇ ▇▇▇▇ and the Data Protection ▇▇▇
▇▇▇▇.
5.3.4 the Company has not and nor has any of its Subsidiaries in the
last two years, as a counterparty thereto, been a party to a
transaction at an undervalue or a preference as those
expressions are used in sections 238 and 239 respectively of the
Insolvency ▇▇▇ ▇▇▇▇;
5.3.5 Environmental Issues
--------------------
The Company itself complies with, and the Vendor is aware of no
previous breach of, any legislation (including regulations,
codes of practice, circulars
40
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and guidance notes made thereunder) relating to environmental
matters, including (but without limitation):
(a) waste;
(b) contaminated land;
(c) discharges to (i) land (ii) ground and surface water and
(iii) sewers;
(d) emissions of air;
(e) noise;
(f) dangerous, hazardous or toxic substances and materials;
(g) nuisance;
(h) health and safety;
and neither the Company nor the Vendor is aware of any actions,
claims or proceedings (whether actual or potential) nor has any
other reason to believe that the Company has or is likely to
have any liability in relation to such matters.
5.4 Litigation
----------
5.4.1 The Company is not engaged in any litigation or arbitration
proceedings.
5.4.2 To the Vendors knowledge information and belief there are no
litigation or arbitration proceedings are pending or threatened
by or against the Company and there are no circumstances likely
to give rise to any litigation or arbitration.
5.4.3 The Company is not subject to any order or judgment given by any
Court or governmental agency and has not been a party to any
undertaking or assurance given to any Court or governmental
agency which is still in force.
5.5 Fair Trading etc.
-----------------
To the Vendors knowledge information and belief no agreement practice or
arrangement carried on by the Company or to which the Company is a
party:-
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5.5.1 is or requires to be registered in accordance with the
provisions of the Restrictive Trade Practices Acts 1976 and 1977
or contravenes the provisions of the Resale Prices ▇▇▇ ▇▇▇▇ and
the Company is not in default or in contravention of the
provisions of any of those Acts;
5.5.2 contravenes the Trade Descriptions Acts 1968 and 1972;
5.5.3 contravenes the provisions of the Consumer Credit ▇▇▇ ▇▇▇▇;
5.5.4 is by virtue of its terms or by virtue of any practice for the
time being carried on in connection therewith a "Consumer Trade
Practice" within the meaning of Section 13 of the Fair Trading
Act 1973 and susceptible to or under reference to the Consumer
Protection Advisory Committee or the subject matter of a report
to the Secretary of State or the subject matter of an Order by
the Secretary of State under the provisions of Part II of that
Act;
5.5.5 infringes Article 85 of the Treaty establishing the European
Economic Community or constitutes an abuse of dominant position
contrary to Article 86 of the said Treaty or infringes or
contravenes any provisions of the Treaty of Rome;
5.5.6 is prescribed or has been or may be or become the subject of any
reference enquiry or report under the Industry ▇▇▇ ▇▇▇▇ or the
Monopolies and Mergers Act or the Competition ▇▇▇ ▇▇▇▇ or any
other anti-restrictive practice, consumer protection or
anti-monopoly anti-trust or anti-cartel legislation in the
United Kingdom or elsewhere; or
5.5.7 in any way restricts its freedom to carry on the whole or any
part of its business in any part of the world in such manner as
it thinks fit.
5.6 Guarantees, Options, etc
------------------------
The Company is not a party to any option or pre-emption right, or a
party to any guarantee or suretyship or any other obligation (howsoever
called) to pay, purchase or provide funds (whether by the advance of
money, the purchase of or subscription for shares or other securities,
the purchase of assets or services, or otherwise) for the payment of,
indemnity against the consequence of default in the payment of, or
otherwise to be responsible for, any indebtedness of any other person.
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5.7 Tenders, etc
------------
No offer, tender, or the like not in the ordinary course of business is
outstanding which is capable of being converted into an obligation of
the Company by an acceptance or other act of some other person.
5.8 Powers of Attorney, etc
-----------------------
There are no powers of attorney given by the Company in force (other
than to the holder of an Encumbrance solely to facilitate its
enforcement) and no person, as agent or otherwise of the Company, is
entitled or authorised to bind or commit the Company to any obligations
not in the ordinary course of the Company's business.
5.9 Insider Contracts
-----------------
5.9.1 There is not outstanding, and there has not at any time during
the last six years been outstanding, any contract or arrangement
to which the Company is a party and in which any Vendor or any
Associate of any Vendor or any director of the Company or any
Associate of any such director is or has been interested,
whether directly or indirectly.
5.9.2 The Company is not a party to, nor have its profits or financial
position during such period been affected by, any contract or
arrangement which is not of an entirely arms' length nature.
5.9.3 There are no agreements or understandings (whether legally
enforceable or not) between the Company and any person who is a
shareholder or the beneficial owner of any interest in the
Company or any Associate of any such person relating in any way
to the Company or the affairs of the Company.
5.10 Other Party's Defaults
----------------------
No party to any agreement with or obligation to the Company is in
default thereunder being a default which would be material in the
context of the financial or trading position of the Company nor (so far
as the Vendors are aware) are there any circumstances likely to give
rise to such a default.
5.11 Other Material contracts
------------------------
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The Company is not a party to nor subject to any agreement, transaction,
obligation, commitment, understanding, arrangement or liability which:-
5.11.1 is incapable of complete performance in accordance with its
terms; or
5.11.2 is known by any Vendor or by the Company to be likely to result
in a loss to the Company on completion of performance; or
5.11.3 cannot readily be fulfilled or performed by the Company on time
and without undue or unusual expenditure of money, effort or
personnel; or
5.11.4 involves or is likely to involve obligations, restrictions,
expenditure or receipts of an unusual, onerous or exceptional
nature and not in the ordinary course of the Company's business;
or
5.11.5 is a contract with any trade union or body or organisation
representing its employees; or
5.11.6 requires an aggregate consideration payable by the Company in
excess of P20,000; or
5.11.7 involves or is likely to involve the supply of goods by or to
the Company the aggregate sales value of which will represent in
excess of ten per cent. of the turnover of the Company for the
last financial year; or
5.11.8 requires the Company to pay any commission, finders fee, royalty
or the like; or
5.11.9 is in any way otherwise than in the ordinary and proper course
of the Company's business.
5.12 Consequence of share acquisition by the Purchaser
-------------------------------------------------
The acquisition of the Shares of the Company by the Purchaser or the
compliance with the terms of this Agreement will not:-
5.12.1 cause the Company to lose the benefit of any right or privilege
it presently enjoys or cause any person who normally does
business with the Company not to continue to do so on the same
basis as previously;
44
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5.12.2 relieve any person of any obligation to the Company (whether
contractual or otherwise) or enable any person to determine any
such obligation or any right or benefit enjoyed by the Company
or to exercise any right whether under an agreement with or
otherwise in respect of the Company;
5.12.3 result in any present or future indebtedness of the Company
becoming due or capable of being declared due and payable prior
to its stated maturity;
and to the best of the knowledge and belief of the Vendors the attitude
and custom of clients, customers and suppliers with regard to the
Company will not be prejudicial affected thereby.
5.13 Investment Grants
-----------------
No investment grant paid to the Company is liable to be refunded in
whole or in part in consequence of any action or omission of the
Company.
5.14 Sureties
--------
No person other than the Company has given any guarantee of or security
for any overdraft loan or loan facility granted to the Company.
5.15 Documents
---------
All title deeds and agreements to which the Company is a party and other
documents owned by or which ought to be in the possession of the Company
are in the possession of the Company and are properly stamped.
5.16 DTI Grant
---------
The Company is not under any liability to repay any grant made to it by
the Departments of Trade and Industry or the Ministry of Technology
under the Industrial Development Act 1966 or otherwise and no
circumstances have arisen in which the Ministry of Technology or the
Departments of Trade and Industry would or might be entitled to require
the repayment of any such grant either in whole or in part.
6. EMPLOYMENT
6.1 Directors
---------
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The particulars shown in the Second Schedule are true and complete and
no person not named therein as such is a director or shadow director (as
defined in Section 741 of the Companies Act 1985) of the Company.
6.2 Particulars of Employees
------------------------
6.2.1 The particulars shown in the Schedule of Employees annexed to
the Disclosure Letter show all remuneration payable and other
benefits provided or which the Company is bound to provide
(whether now or in the future) to each officer and employee of
the Company or Associate of any such person and are true and
complete and include particulars of all profit sharing incentive
and bonus arrangements to which the Company is a party whether
legally binding on the Company or not.
6.2.2 Since the Balance Sheet Date no change has been made in the rate
of remuneration, or the emoluments or pension benefits of any
officer ex-officer or employee of the Company and no change has
been made in the terms of engagement of any such officer or
employee, and no additional officers or employees have been
appointed.
6.2.3 No present officer or employee of the Company has given or
received notice terminating his employment except as expressly
contemplated under this Agreement.
6.3 Service Contracts
-----------------
There is not outstanding any contract of service between the Company and
any of its directors officers or employees which is not terminable by
the Company without compensation (other than any compensation payable by
statute) on three month's notice given at any time.
6.4 Pensions
--------
In this paragraph:
6.4.1 "the Schemes" means the Money Purchase Scheme, details of which
are set out in the Disclosure Letter.
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6.4.2 Other than the Schemes there is no arrangement to which the
Company contributes or has contributed or may become liable to
contribute under which benefits of any kind are payable to or in
respect of any of its employees or former employees on
retirement on death (whether accidental or not) or in the event
of disability or sickness.
6.4.3 The Company is not under any obligation or agreement (whether
legally binding or not) to provide or procure the provision of
benefits of the nature of those described in paragraph 5.4.2
above in respect of any of its employees or former employees
save in accordance with the provisions of the Schemes.
6.4.4 The Company is not making and has not made and will not before
Completion make any ex gratia payments to any employee or former
employee or to any spouse, child or dependant of any of them.
6.4.5 There are no actuarial, consultancy, legal investment and other
fees, charges or expenses due or accrued in respect of all of
the Schemes.
6.4.6 There are not in respect of any of the Schemes or the benefits
thereunder any actions, or proceedings or claims pending or
threatened against the employer or trustees and the Company is
not aware of any fact or matter which may give rise to any such
action or claim.
6.4.7 Each of the Schemes has been formally approved by the Inland
Revenue and treated by them as an exempt approved scheme under
Chapter I Part XIV of ICTA and such approval has not been
withdrawn and no action has been taken nor omission made by the
Company or the Trustees of any of the Schemes which might lead
to the withdrawal of such approval.
6.5 Disputes with Employees
-----------------------
The Vendors are not aware of any outstanding claim against the Company
by any person who is now or has been an officer or employee of the
Company or any dispute between the Company and a material number or
class of its employees and no payments are due by the Company under the
provisions of the Employment Protection (Consolidation) ▇▇▇ ▇▇▇▇ as
amended by the Employment ▇▇▇ ▇▇▇▇.
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7. INDUSTRIAL PROPERTY RIGHTS
The business of the Company as now carried on does not and is not likely
to infringe any Industrial Property Right of any other person (or would
not do so if the same were valid) or give rise to a liability to pay
compensation pursuant to the Patents ▇▇▇ ▇▇▇▇ ss 40 and 41 and all
licences to the Company in respect of any such protection are in full
force and effect.
7.1 The Company has not (otherwise than in the ordinary and normal course of
business) disclosed or permitted to be disclosed or undertaken or
arranged to disclose to any person other than the Purchaser any of its
know-how, trade secrets, confidential information, price lists or lists
of customers or suppliers.
7.2 The Company is not a party to any secrecy agreement or agreement which
may restrict the use or disclosure of information.
7.3 Nothing has been done or omitted by any Group Company which would enable
any licensee under a licence granted by a Group Company to be terminated
or which in any way constitutes a breach of terms of any licence.
7.4 All Industrial Property Rights used or required by the Company in
connection with its business are in full force and effect and are vested
in and beneficially owned by it.
7.5 The Company is the sole beneficial owner of the Industrial Property
Rights listed in the Disclosure Letter and (where registration is
possible) the Company has been and is registered as proprietor, and each
of those Rights is valid and enforceable, and none of them is being
used, claimed, opposed or attacked by any other person.
7.6 No right or licence has been granted to any person by the Company to use
in any manner or to do anything which would or might otherwise infringe
any of the Industrial Property Rights referred to above; and no act has
been done or omission permitted by the Company whereby they or any of
them have ceased or might cease to be valid and enforceable.
8. TAXATION
8.1 Administration
--------------
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8.1.1 All notices, returns, computations and payments which should be
or should have been given or made by the Company for any
Taxation purpose have been given or made within the requisite
periods and are up-to-date, correct and on a proper basis and
none of them is or is likely to be the subject of any dispute
with the Inland Revenue, H.M. Customs & Excise or other Taxation
or fiscal authority.
8.1.2 All particulars furnished to the Inland Revenue or other
Taxation authorities, in connection with the application for any
consent or clearance on behalf of the Company, or affecting the
Company, fully and accurately disclose all facts and
circumstances material for the decision of those authorities;
any consent or clearance is valid and effective; and any
transaction, for which consent or clearance has previously been
obtained, has been carried into effect (if at all) only in
accordance with the terms of the relative application consent or
clearance and the Company has not been a party to or otherwise
involved in any transaction scheme or arrangement in respect of
which clearance could have or should have been obtained.
8.1.3 There are set out in the Disclosure Letter full details of any
special arrangement (being an arrangement which is not based on
a strict and detailed application of the relevant legislation or
on generally published statements of practice or generally
published extra statutory concessions) operated by the Company
with the agreement of any Taxation Authority and the Company has
not taken any action which has had, or might have, the result of
altering, prejudicing or in any way disturbing any such
arrangement which it has previously negotiated.
8.1.4 The Company has not paid or become liable to pay any penalty or
interest charged by virtue of the provisions of TMA or any other
Taxation Statute.
8.1.5 The Company has duly and punctually paid to the Inland Revenue
or other appropriate authority all Taxation for which it is
liable as a result of any act or omission prior to Completion
and in particular:-
(a) all Taxation deductible by the Company prior to the date
hereof under Schedule E by virtue of the PAYE
regulations from time to time in force or ICTA s.559;
49
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(b) all advance corporation tax due in respect of franked
payments of the Company under ICTA s.14, and s.238 and
Schedule 13;
(c) all National Insurance Contributions (both employer's
and employees') due from the Company in respect of the
employees of the Company;
(d) all Taxation required to be deducted from any interest,
annuity or other annual payment, rent or royalty
pursuant to ICTA s.349 and 350; and
(e) all Taxation required to be deducted from any other
payments directed to be made as if those payments were
payments to which ICTA s.349 applied.
8.1.6 The Company has duly and punctually withheld, deducted or
collected for payment (as appropriate) all Taxation which it has
become liable to withhold deduct or collect for payment and is
under no liability to pay any penalty or interest in connection
with any Taxation at the date of this agreement or give any
security for any such matter and the Company has if required by
law so to do accounted for all such Taxation to the relevant
Taxation Authority.
8.1.7 The Company has not at any time been the subject of a discovery
or investigation by any Taxation Authority and there are no
facts to the Vendors knowledge information and belief which are
likely to cause a discovery or investigation to be made.
8.1.8 The Company is not liable as lessee or agent for any Taxation
under the provisions of ICTA s.23.
8.2 Taxation claims, liabilities and reliefs
----------------------------------------
8.2.1 There are set out in the Disclosure Letter with express
reference to this clause full details of all matters relating to
Taxation in respect of which the Company (either alone or
jointly with any other person) has, or at Completion will have,
an outstanding entitlement or obligation:-
50
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(a) to make any claim (including a supplementary claim) for
relief under ICTA or any other Taxation Statute;
(b) to make any election for one type of relief, or one
basis system or method of Taxation, as opposed to
another;
(c) to make any appeal against an assessment to Taxation;
(d) to make any application for the postponement of
Taxation;
(e) to disclaim or require the postponement or reduction of
any allowance;
(f) to elect to treat any machinery or plant as a short-life
asset within the provisions of CAA 1990 s.37 (Election
for certain machinery or plant to be treated as
short-life asset);
(g) to submit any return or provide particulars or
information to any Taxation Authority;
(h) to make any election under TCGA s.35.
8.2.2 The Company has not made nor is entitled to make a claim under
TCGA s.24(2) (Assets lost or destroyed, or whose value becomes
negligible) or s.48 (Consideration due after time of disposal).
8.2.3 The Company is not nor will become liable to pay, or make
reimbursement or indemnity in respect of, any Taxation (or any
amount corresponding to Taxation) in consequence of the failure
by any other person (other than the Company or its Subsidiaries)
to discharge that Taxation or amount within any specified period
or otherwise, where the Taxation or amount relates to a profit,
income or gain, transaction, event, omission or circumstances
arising, occurring or deemed to arise or occur (whether wholly
or partly) prior to Completion.
8.2.4 No relief (whether by way of deduction, reduction, set-off
exemption, repayment or allowance, or otherwise) from, against
or in respect of any Taxation has been claimed and/or given to
the Company which could or might be effectively withdrawn,
postponed, restricted or otherwise lost as a
51
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result of any act, omission, event or circumstance to the
Vendors knowledge information and belief arising or occurring at
any time after Completion.
8.3 Distributions and deductibility of payments
-------------------------------------------
8.3.1 The Company has not since 5 April 1965 repaid, or agreed to
repay or redeemed or agreed to redeem its share capital or
capitalised or agreed to capitalise in the form of redeemable
shares or debentures any profits or reserves of any class or
description.
8.3.2 No security (within the meaning of ICTA s.254(1) (Interpretation
of Part VI)) issued by the Company and outstanding at the date
of this agreement was issued in such circumstances that the
interest payable on it, or any other payment in respect of it,
falls to be treated as a distribution under ICTA s.209 (Meaning
of "distribution").
8.3.3 No rents, interest, annual payments or other sums of an income
nature paid or payable since the Balance Sheet Date by the
Company or which the Company is under an obligation to pay in
the future are or may be wholly or partially disallowable as
deductions in computing profits or as charges against profits,
for the purposes of corporation tax, by reason of the provisions
of ICTA s.74 (General rules as to deductions not allowable) or
ICTA s.75 (Expenses of Management: Investment Companies), ICTA
s.338 (Allowance of charges on income and capital), ICTA s.770
(Sales, etc, at an undervalue or overvalue), ICTA ss.779 to 784
(Leased assets), ICTA s.787 (Restriction of relief for payments
of interest), ICTA s.125 (Annual payments for non-taxable
consideration) or otherwise.
8.3.4 The Company has not received a capital distribution to which the
provisions of TCGA s.189 (Capital distribution of chargeable
gains: recovery of tax from shareholder) could apply.
8.3.5 The Company has not, since the Balance Sheet Date, incurred
expenditure which will not be wholly deductible in computing
profits for Taxation purposes, as a trading expense, as an
expense of management, as a charge on income, or in computing
income for the purposes of Schedule A, except for expenditure on
the acquisition of an asset to be held otherwise than as
stock-in-trade, details of which are set out in the Disclosure
Letter.
52
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8.3.6 The Company has not issued any share capital to which the
provision of ICTA s.249 could apply.
8.3.7 The Disclosure Letter contains particulars of all elections made
by the Company under ICTA s.247 that are now in force; and the
Company has not paid any dividend without advance corporation
tax or made any payment without deduction of income tax in the
circumstances specified in ICTA s.247(6) nor is any Taxation
Authority entitled to make any recovery from the Company under
ICTA s.247(7).
8.4 Carry forward of losses and ACT
-------------------------------
Nothing has been done, and no event or series of events has occurred,
which might cause in relation to the Company the disallowance of the
carry forward or carry back of losses excess charges or advance
corporation tax under the provisions of ICTA s.393 (Losses other than
terminal losses), ICTA s.393A (Losses set off against profits of the
same or an earlier accounting period), ICTA s.768 (Change in ownership
of company: disallowance of trading losses), ICTA s.768A (Change in
Ownership: disallowance of carry back of trading losses), or ICTA s.245
(Calculation etc of ACT on change of ownership of Company).
8.5 Close Companies
---------------
8.5.1 The Company is not and has never been a close investment holding
company within the meaning of ICTA s.13A (close investment
holding companies).
8.5.2 No apportionment under ICTA s.423 (apportionment of
undistributed income) has been made or threatened against the
Company, nor are there any circumstances that could give rise to
such an apportionment.
8.5.3 The Company has, in respect of each accounting period ended on
or before 31st March 1989 but within seven years prior to
Completion, given full and accurate disclosure to the Inland
Revenue of all material facts and circumstances and on that
basis obtained written confirmation under ICTA paragraph 16(3)
of Schedule 19 that no apportionment will be made under ICTA
s.423 (apportionment of undistributed income).
53
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8.5.4 The Company is not, nor has ever been, liable to taxation under
the provisions of ICTA ss.418 to 422 or paragraph 10 of Schedule
19, (close companies).
8.5.5 The Company has never made any transfer of the kind described in
TCGA s.125 (transfer of assets at undervalue).
8.5.6 The Company has never made any transfer of value within the
meaning of the IHTA.
8.5.7 Neither the assets owned by nor the shares of the Company are
subject to an outstanding Inland Revenue charge as defined in
IHTA s.237.
8.5.8 No circumstances exist, or but for IHTA s.204(6) would exist,
such that a power of sale could be exercised in relation to any
assets or shares of the Company pursuant to IHTA s.212
(contingent liability of transferee for unpaid capital transfer
tax or inheritance tax).
8.6 Groups of Companies
-------------------
8.6.1 The Company and the Subsidiaries ("Group Companies") comprise a
group for the purpose of ICTA s.402 (Group relief), and there is
nothing in ICTA s.413 or s.410 (Arrangements for transfer of
company to another group, or consortium) which precludes any
Group Company from being regarded as a member of such group.
8.6.2 The Disclosure Letter contains particulars of all arrangements
and agreements relating to group relief (as defined by ICTA
s.402) to which the Company is or has been a party and:-
(a) all claims by the Company for group relief were when
made and are now valid and have been or will be allowed
by way of relief from corporation tax;
(b) the Company has not made nor is it liable to make any
payment under such arrangement or agreement save as
provided for in the Accounts; and
54
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(c) the Company has received all payments due to it under
any such arrangement or agreement for all surrenders of
group relief made by it.
8.6.3 The Disclosure Letter contains particulars of all arrangements
and agreements to which the Company is or has been a party
relating to the surrender of advance corporation tax made or
received by the Company under ICTA s.240 and:-
(a) the Company has not paid nor is liable to pay for the
benefit of any advance corporation tax which is or may
become incapable of set off against the Company's
liability to corporation tax; and
(b) the Company has received all payments due to it under
any such arrangement or agreement for all surrenders of
advance corporation tax made by it.
8.6.4 The Company has not made or received a payment for group relief
or for the surrender of advance corporation tax which may be
liable to be refunded in whole or in part.
8.6.5 The Company does not own any asset which was acquired from
another company which was at the time a member of the same group
of companies (as defined in TCGA s.170 (Groups of companies:
definitions) and which owned that asset otherwise than as
trading stock within the meaning of TCGA s.173 (Transfers within
a group: trading stock).
8.6.6 The execution or completion of this Agreement will not result in
any profit or gain being deemed to accrue to the Company for
Taxation purposes, whether pursuant to TCGA s.178 and 179
(Company ceasing to be a member of a group) or otherwise.
8.6.7 The Company has not held nor holds shares in a company which has
made any such transfer as is referred to in TCGA s.125 (Shares
in close company transferring assets at an undervalue); and the
Company has not received any assets by way of gift as mentioned
in TCGA s.282 (Gifts: recovery from donee).
55
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8.6.8 The Company has no interest in any company which is not resident
in the United Kingdom and which would be a close company if it
were resident in the United Kingdom (TCGA s.13) (non-resident
company).
8.7 Capital Allowances
------------------
8.7.1 The aggregate book value of each of the assets of the Company,
on which an entitlement to industrial building allowances or
other allowances in respect of capital expenditure has arisen,
in or adopted for the purpose of the Accounts does not exceed
the aggregate residue of expenditure or written-down value
attributable to such assets for the purposes of the CAA and the
aggregate book value of plant and machinery allocated to pool of
plant and machinery on which an entitlement to capital
allowances has arisen does not exceed the written-down value of
the qualifying expenditure in respect of each such pool under
the CAA.
8.7.2 All expenditure incurred by the Company on which it may incur
under any subsisting commitment on the provision of machinery or
plant has qualified or will qualify (if not deductible as a
trading expense of a trade carried on by the Company) for
writing down allowances under CAA Part II (machinery and plant).
8.7.3 Since the Balance Sheet Date nothing has happened as a result of
which there may be made against the Company a balancing charge
or any disposal value may be brought into account under CAA s.24
(writing down allowances and balancing adjustments) or there may
be any recovery of excess relief within CAA ss.46 or 47
(recovery of excess relief) or a relevant event may occur within
the meaning of CAA s.138 (scientific research).
8.7.4 There is not, and there are no circumstances which could give
rise to, any dispute between the Company and any other person as
to the entitlement to capital allowances under CAA ss.51 to 59
(fixtures).
8.7.5 The Company has not made any election under CAA s.37 (short life
assets) nor has been taken to have made an election under CAA
s.37(8)(c).
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8.7.6 No capital expenditure incurred or to be incurred by the Company
has been or will be deemed, under the provisions of CAA s.159
(Time when capital expenditure is incurred), to have been or be
incurred on a date other than that upon which the obligation to
pay the expenditure became or becomes unconditional.
8.7.7 No election has been made by the Company under CAA s.53
(Expenditure incurred by equipment lessor) or CAA s.55
(Expenditure incurred by incoming lessee: election to transfer
right to allowances) in relation to any fixtures.
8.8 Transactions not at arm's length
--------------------------------
8.8.1 The Company has not carried out or been engaged in, any
transaction or arrangement to which the provisions of ICTA s.770
(Sales, etc, at an undervalue or overvalue) have been or may be
applied.
8.8.2 The Company does not own nor has agreed to acquire any asset, or
has received or agreed to receive any services or facilities
(including without limitation the benefit of any licences or
agreements), the consideration for the acquisition or provision
of which was or will be in excess of its market value or
determined otherwise than on an arm's length basis.
8.8.3 The Company has not disposed of or acquired any asset in such
circumstances that the provisions of TCGA ss.17 or 19 (Disposals
and acquisitions treated as made at market value) could apply.
8.8.4 The Company has not, since the Balance Sheet Date engaged in any
transaction in respect of which there may be substituted for any
purpose of Taxation a different consideration for the actual
consideration given or received by it.
8.9 Capital Gains
-------------
8.9.1 The book value in or adopted for the purposes of the Accounts as
the value of each of the assets of the Company on the disposal
of which a chargeable gain or allowable loss could arise does
not exceed the amount deductible
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under TCGA s.38 (expenditure: general) (excluding any indexation
allowance) in respect of each such asset.
8.9.2 No debt owed to the Company would on its disposal give rise to a
chargeable gain by reason of TCGA s.251 (disposals otherwise
than as original creditor).
8.9.3 No benefit under any policy of assurance has been acquired by
the Company which would on its disposal give rise to a
chargeable gain by reason of TCGA s.210 (disposals otherwise
than as original beneficial owner).
8.9.4 The Company does not have an interest in any assets which are
wasting assets within TCGA s.44 (wasting assets) and which do
not qualify for capital allowances.
8.9.5 The Company has not made nor is entitled to make any claims
under any of TCGA ss.23, 35, 152, 153, 154, 165, 172, 175, 229,
242, 243 or 247 insofar as such claims affect or would affect
the chargeable gain or allowable loss which would arise on a
disposal by the Company of any of its assets.
8.9.6 The Company has not made nor is it entitled to make any claim or
election under either of TCGA s.24 (assets lost or destroyed) or
TCGA s.161 (appropriations to or from stock). The Company has
not, since the Balance Sheet Date, appropriated any asset
forming part of its trading stock for any other purpose.
8.9.7 The Company has not since the Balance Sheet Date disposed of nor
acquired any asset in circumstances such that the provisions of
TCGA s.17 (disposals and acquisitions treated as made at market
value) could apply.
8.9.8 The Company has not since the Balance Sheet Date been a party to
any deprecatory transactions for the purpose of TCGA s.176
(transactions in a group) or which could be treated as a
deprecatory transaction under TCGA s.177 (dividend stripping).
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8.9.9 The Company has not since the Balance Sheet Date been a party to
any value shifting arrangements under any of TCGA ss.29, 30 or
34 (value shifting).
8.9.10 No disposal of any assets or of any interest in assets in a
territory outside the United Kingdom has been made in respect of
which any claim under TCGA s.279 (foreign assets, delayed
remittances) has been made or is available to the Company.
8.9.11 The Company has not made nor is entitled to make any claim under
TCGA s.48 (consideration due after time of disposal) to pay by
instalments tax on chargeable gains.
8.9.12 The Company does not have any interest in either a controlled
foreign company or an offshore fund as defined respectively in
ICTA Chapters IV and V of Part XVII.
8.9.13 No part of the consideration given by the Company for a new
holding of shares (within the meaning of TCGA s.126 (Application
of ss.127 to 131)) will be disregarded by virtue of the proviso
to TCGA s.128(2) (Consideration given or received by holder).
8.9.14 No asset owned by the Company has been the subject of a deemed
disposal under TCGA Schedule 2 (Assets held on 6th April 1965),
so as to restrict the extent to which the gain or loss over the
period of ownership may be apportioned by reference to
straight-line growth.
8.9.15 The Company has not been a party to any election made pursuant
to the provisions of ICTA s.108.
8.9.16 There are set out in the Disclosure Letter full details of any
elections made pursuant to TCGA s.35 and all assets owned by the
Company to which the provisions of TCGA s.36 and Schedule 4
could apply.
8.10 Tax avoidance
-------------
8.10.1 The Company has not engaged in or been a party to any scheme or
arrangement of which the main purpose, or one of the main
purposes, was the avoidance of or a reduction in liability to
Taxation; and, in particular but
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without limitation, the Company has not at any time been a
party to or otherwise involved in any transaction to which any
of the following provisions could apply:-
(a) ICTA ss.729 to 737 (Tax avoidance: securities);
(b) ICTA s.774 (Transactions between dealing company and
associated company);
(c) ICTA ss.779-780 (Sale and lease-back: limitation on tax
reliefs and taxation of consideration received);
(d) ICTA ss.781-785 (Assets leased to traders and others
etc);
(e) ICTA ss.786 (Transactions associated with loans or
credit);
(f) CAA 1990 s.75 (Capital allowances: effect of sales
between connected persons, sale and leaseback, etc);
(g) FA 1972 s.76 (Securities bought with borrowed money);
(h) ICTA s.240 (Set-off of company's surplus advance
corporation tax against subsidiary's liability to
corporation tax);
(i) ICTA s.410 (Arrangements for transfer of company to
another group etc); s.395 (Leasing contracts and company
reconstructions); and s.116 (Partnerships involving
companies: arrangements for transferring relief);
(j) TCGA s.106 (Disposal of shares and securities within
prescribed period of acquisition);
(k) TCGA s.29 (Value shifting);
(l) CAA 1990 s.22 (First Year Allowances).
8.10.2 The Company has not been a party to any transaction to which any
of the following provisions has been or could be applied other
than transactions in respect of which all necessary consents or
clearances have been obtained:-
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(a) TCGA s.139(5) Company reconstruction or amalgamation:
transfer of assets);
(b) ICTA ss.703 to 709 (Cancellation of tax advantages from
certain transactions in securities);
(c) ICTA s.776 (Transactions in land: taxation of capital
gains);
(d) TCGA ss.135, 136 and 137 (Company reconstructions and
amalgamations);
(e) ICTA s.213 to 218 (exempt distributions);
(f) ICTA s.765 (Migration etc of companies) or ICTA s.766
(Offences under Section 765);
(g) ICTA s.219 to 224 (Purchase of own shares).
8.11 Depreciatory transactions
-------------------------
No allowable loss, which may accrue on the disposal by the Company of
any asset, is likely to be reduced by reason of the provisions of TCGA
s.176 (Transactions in a group) or TCGA s.177 (Dividend stripping) and
no chargeable gain or allowable loss arising on a disposal is likely to
be adjusted in accordance with TCGA s.30 (Value shifting: further
provisions).
8.12 Overseas
--------
8.12.1 The Company is not nor has it within the last six years been
entitled to receive any income which is 'unremittable income'
within the meaning of ICTA s.584 (Relief for unremittable
overseas income), or made any gain to which the provisions of
TCGA s.279 (Foreign assets: delayed remittances) could apply.
8.12.2 The Company has not ceased to be resident in the United Kingdom
other than in pursuance of a Treasury Consent and could not and
is not considered to be resident in a territory outside the
United Kingdom.
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8.13 Demergers and purchase of own shares
------------------------------------
8.13.1 The Company has not been engaged in or been a party to any of
the transactions set out in ICTA s.213 to 218 (Demergers) nor
has it made or received a chargeable payment as defined in ICTA
s.214(2).
8.13.2 The Company has not at any time since 15th June 1982 redeemed,
repaid or purchased or agreed to redeem, repay or purchase, any
of its own shares.
8.13.3 The Company is and has been throughout the last six years
resident in the United Kingdom for Taxation purposes and has
throughout that period traded only in the United Kingdom and
been in receipt only of UK source income and gains.
8.14 Sale and leaseback of land
--------------------------
The Company has not since the Balance Sheet Date entered into any
transaction to which the provisions of ICTA s.780 (Sale and lease-back:
taxation of consideration received) have been or could be applied.
8.15 Securities
----------
The Company has not at any time since 13th March 1984 owned or issued
any deep discount security within the meaning of ICTA Schedule 4, any
deep gain security within the meaning of FA 1989 Schedule 11, any
qualifying corporate bond within the meaning of TCGA s.116 or any
relevant discounted security within the meaning of FA 1996 Sch.13.
8.16 Capital losses
--------------
The Company has not incurred a capital loss to which the provisions of
TCGA s.18(3) and (4) (Transactions between connected persons) are
applicable.
8.17 Value Added Tax
---------------
8.17.1 The Company is not and has never been treated for the purposes
of VATA s.43 (groups of companies) as a member of a group.
8.17.2 The Company is a registered and taxable person for the purposes
of the VATA and has complied with and observed in all respects
the terms of all
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legislation, (which expression shall for the purposes of this
sub-clause 17 include reference to all regulations, orders,
provisions, directions, conditions and notices) relating to
Value Added Tax and the Company has maintained and obtained
accounts, records, invoices and other documents (as the case may
be) appropriate or requisite for the purposes of Value Added Tax
which are complete, correct and up-to-date.
8.17.3 The Company:-
(a) is not, nor in the two years prior to Completion has
been, in arrears with any payments or returns or
notifications under the legislation relating to Value
Added Tax, or liable to any forfeiture penalty, interest
or surcharge or to the operation of any penalty,
interest or surcharge provisions contained in the same;
(b) has not in the two years prior to Completion received a
surcharge liability notice under VATA s.59 (default
surcharge) or a penalty liability notice under VATA s.64
(persistent misdeclarations).
(c) has not been required by HM Commissioners of Customs &
Excise to give security;
(d) is not, and has not agreed to become, an agent, manager
or factor for the purposes of VATA s.47 (agents etc) of
any person who is not resident in the United Kingdom;
(e) has not on or prior to the date hereof, nor will before
Completion make any supplies that are exempt supplies;
and
(f) or any other company which is or has been a member of
the same group of companies as the Company has not on or
prior to the date hereof, nor will before Completion,
make any election pursuant to VATA Schedule 10
paragraphs 2 and 3 which has or may have or have had the
effect of waiving any exemption from Value Added Tax in
relation to any property in which the Company has or
will have before Completion any interest or any part
thereof (having regard to paragraphs 3(3) and (4) of the
said Schedule 10 ) or which may
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otherwise have or have had the effect of rendering Value
Added Tax payable or chargeable in respect thereof.
(g) is not for the purposes of VATA Schedule 10 paragraph
5(5) (developers of certain non-residential buildings
etc) the developer of any building or work in respect of
which the Company has not made an election under VATA
Schedule 10 paragraph 2(1).
8.17.4 The Company has not since the Balance Sheet Date been, and will
not prior to Completion be, treated as having made any supply of
goods or services for the purposes of Value Added Tax where no
supply has in fact been made by the Company, including without
limitation, deemed supplies under any of the following
provisions: VATA s.8 (supplies received from abroad); VATA s.44
(supplies to groups); VATA paragraph 6 of Schedule 10
(developers self supply); Value Added Tax (Self Supply of
Construction Services) Order 1989 paragraph 3 (self supply of
construction services);
8.17.5 The Company is not approved for the purposes of the Customs
Duties (Deferred Payment) Regulations 1976 (deferral of duty on
imports).
8.17.6 The Company is not the owner of any capital item to which Part
XV of the Value Added Tax (General) Regulations 1995
(adjustments to the deduction of input tax on capital items)
applies or will apply.
8.17.7 No document has left the possession of the Company which, if
improperly used by a third party, would lead to any liability on
its part to pay any amount of Value Added Tax under VATA
Schedule 11 paragraph 5 (Recovery of tax, etc) which but for
such use would not have been payable by it.
8.17.8 The Company is not the owner of, and has not contracted (nor
will it prior to completion contract) to acquire, goods which
are or will become "free zone goods" for the purposes of the
Free Zone Regulations 1984.
8.17.9 The Company has not incurred, nor will it before Completion by
act or omission bring about the likelihood of incurring to the
Vendors knowledge information and belief a liability to Taxation
in a country other than the
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▇▇▇▇▇▇ ▇▇▇▇▇▇▇, the recovery of which would depend upon the
existence of and compliance with legislation or regulations in
that country.
8.17.10 The Company has not made or received any supplies in respect of
which there may be substituted for Value Added Tax purposes a
different consideration from the actual consideration given or
received by it.
8.18 Stamp Duties
------------
8.18.1 There is no instrument which is necessary to establish the
Company's title to any right or asset which is liable to stamp
duty in the United Kingdom or elsewhere but which has not been
duly stamped or which would attract stamp duty if brought within
the relevant jurisdiction.
8.18.2 The Company has complied in all respects with the provisions of
FA 1986 Part IV (stamp duty reserve tax) and with any
regulations made under the same and the Company is not and will
not become liable to pay stamp duty reserve tax by reference to
any agreement which falls within the terms of FA 1986 s.87(1)
and which is entered into prior to Completion.
8.18.3 The Company has not made any claim for relief or exemption under
FA 1930 s.42 (Relief from transfer stamp duty in case of
transfer of property as between associated companies) or under
FA 1986 ss.75 to 77 (reconstructions and acquisitions) nor of
capital duty under FA 1973 Schedule 19 Part III (Stamp duty on
documents relating to chargeable transactions of capital
companies) or under any other statute and practice statement or
regulation of the Inland Revenue or any other fiscal authority.
8.19 Employees
---------
8.19.1 The Company has received no notifications or notices under ICTA
s.166 (benefits in kind: notices of nil liability).
8.19.2 The Company does not operate any scheme approved under ICTA
s.202 (charities: payroll deduction scheme) or registered under
ICTA Chapter III of Part V (profit-related pay).
8.19.3 There are set out in the Disclosure Letter full details of all
schemes under which any officer or employee of the Company
participates under ICTA
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Sch.9 (approved share option and profit sharing schemes) or is a
beneficiary or potential beneficiary of a qualifying employee
share ownership trust as defined in FA 1989 Sch.5 (employee
share ownership trusts) or any other trust or scheme established
for the benefit of employees of the Company.
8.19.4 All schemes and trusts operated by the Company for the benefit
of its officers and employees have been properly established and
administered in accordance with the rules thereof and any
relevant Taxation Statute.
8.19.5 Since the Balance Sheet Date the Company has not received any
payment to which ICTA s.601 to 603 applies (pension scheme
surpluses: payments to employers).
8.19.6 All sums payable under the existing arrangements for
remuneration of officers and employees and rewarding persons
rendering services to the Company are deductible for the
purposes of ICTA s.74 or 75 (deductions).
8.19.7 There are set out in the Disclosure Letter full details of any
payments made by the Company in the six years prior to
Completion to which the provisions of ICTA s.148 and/or s.188
applied or could have applied, such details to include the dates
and amounts of the payments and the respective ages of all
officers and employees receiving such payments at the time such
payments were made.
9. PROPERTIES
9.1 Title
-----
9.1.1 The particulars of the Properties shown in the Fourth Schedule
are true and correct and the owner shown therein has good and
marketable title to and exclusive occupation of each Property
which it is said to own.
9.1.2 There is appurtenant to each Property all rights and easements
necessary for its use and enjoyment for the Company's business.
9.1.3 The Properties comprise all the freehold and leasehold property
owned, occupied or otherwise used in connection with its
business by the Company.
9.1.4 The Company is the legal and beneficial owner of the Properties.
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9.1.5 The Properties are only occupied by the Company and there are no
third parties on any part of the Properties, either as licensees
trespassers or squatters in respect of the whole or any part or
parts of the Properties.
9.2 Encumbrances and Restrictions
-----------------------------
9.2.1 The Properties are free from any mortgage, debenture, charge,
rent charge lien or any other Encumbrance securing the repayment
of monies or other obligation or liability of either the Company
or any other party.
9.2.2 The Properties are not subject to any outgoings other than the
general rates, water rates and insurance premiums and rent and
service charges and the rent and service charges are paid up to
the date hereof.
9.2.3 The Properties are not subject to any restrictive covenants,
stipulations, easements, way-leaves, licences, grants,
restrictions, over-riding interests or other such rights vested
in third parties.
9.2.4 The leases of the leasehold properties contain no onerous
covenants affecting freedom of alienation and no right on the
part of any Landlord to terminate the Lease except in the event
of default.
9.2.5 No Property is subject to any option, right of pre-emption or
right of first refusal.
9.2.6 All the covenants restrictions and stipulations contained in any
Lease demising or affecting any Property have been observed and
performed and the Vendors are not aware of any circumstance
whereby the Landlord could serve a notice on the Tenant under
any such Lease and further each Landlord has performed his or
its covenants and obligations pursuant to the relevant lease by
which the relevant Property was demised.
9.3 Planning
--------
9.3.1 The use of each Property is the permitted use for the purpose of
▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ to 1977.
9.3.2 Compliance has been made with all applicable statutory and
bye-law requirements with regard to the Properties to the
Vendors knowledge
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information and belief and in particular (but without
limitation) with the requirements as to Public Health Acts The
Housing Acts, The Highway Acts, Offices Shops and Railway
Premises Acts 1963, The Factory Acts, The London Building Acts
and it is confirmed that there are no outstanding unobserved or
unperformed obligations with respect to the Properties necessary
to comply with the requirements of the competent Authority
exercising statutory or delegated powers.
9.4 Adverse Orders
--------------
9.4.1 There are no Compulsory Purchase Notices, Orders or Resolutions
affecting the Property nor to the best of the knowledge and
belief of the Vendors and the Company are there any
circumstances likely to lead to any such orders being made.
9.4.2 There are no closing or demolition or clearance orders
enforcement notices or stop notices affecting the Properties nor
to the best information and belief of the Vendors and the
Company are there any circumstances likely to lead to any being
made.
9.5 Condition of the Properties
---------------------------
There are no disputes with regard to the ownership of any
boundary walls and fences, any easements, rights, means of
access, covenants, restrictions, way-leaves or licences
affecting the Properties.
9.6 Environmental Pollution
-----------------------
9.6.1 The Properties have not in the past been used, nor are the
Vendors aware of the use of any neighbouring land:-
(a) for any industrial process, storage, dumping, transit,
storage, lagooning or otherwise in relation to toxic
waste;
(b) as land-fill or for any other dumping or materials which
may potentially lead to the production of methane,
carbon dioxide or any other gaseous emissions.
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9.6.2 The Vendors are not aware of any pollution of the ground water
or any aquifer beneath the Properties or any neighbouring
property of toxic waste, sewage or any other noxious substance
being a known or potential hazard to health or otherwise.
9.6.3 The Vendors are not aware of any intention or possible intention
on the part of the local authority to enter details of the
Properties or any neighbouring property under Section 143 of the
Environmental Protection Act 1990 upon any statutory register of
land which may be contaminated.
9.6.4 The Vendors are not aware of any actual intended or possible
proceedings by an aggrieved person under Section 82 of the
Environmental Protection Act 1990 or any equivalent legislation
in relation to any matters affecting the Properties or any
neighbouring property.
9.6.5 The Vendors have no reason for believing or suspecting that any
potential liability or detriment arising from pollution or
related environmental matters, whether of the Properties or
neighbouring property, may attach to the owners or occupiers of
the Properties at present or at any foreseeable future date.
9.6.6 The Vendor has supplied details of all reports, inspections,
surveys and investigations available to the Vendor in respect of
pollution or related environmental matters affecting the
Properties or neighbouring property.
10. GENERAL
10.1 Material Disclosure
-------------------
10.1.1 The contents of the Disclosure Letter and of all accompanying
documents are true and accurate in all material respects and
fully, clearly and accurately disclose every matter to which
they relate.
10.1.2 The Vendors (after having made reasonable enquiry) are not aware
of any other fact or matter which renders any of the information
referred to in Warranty 10.1.1 above misleading.
10.2 Loans to Vendors
----------------
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There are not outstanding:-
10.2.1 any loans made by the Company to the Vendors and/or any director
of the Company and/or any Associate of the Vendors or of any
such director;
10.2.2 any debts owing to the Company by the Vendors and/or any
director of the Company and/or Associate of the Vendors or of
any such director;
10.2.3 any debts owing by the Company other than debts which have
arisen in the ordinary course of business; and
10.2.4 any securities for any such loans or debts as aforesaid.
10.3 Net Asset Value
---------------
The value of the net tangible assets of the Company at Completion
determined in accordance with the same accounting policies as those
applied in the Accounts (and on the footing that each of the fixed
assets and investments is valued at a figure no greater than the value
attributed to it in the Accounts or in the case of any of the said fixed
assets acquired by the Company after the Balance Sheet Date at a figure
no greater than cost) will not be less than the value of the net
tangible assets of the Company at the Management Accounts Date as shown
in the Management Accounts.
10.4 Investment, associations and branches
-------------------------------------
The Company:-
10.4.1 is not the holder or beneficial owner of and has not agreed to
acquire any class of the share or other capital of any other
company or corporation (whether incorporated in the United
Kingdom or elsewhere) other than the Subsidiaries;
10.4.2 is not and has not agreed to become a member of any partnership,
joint venture, consortium or other unincorporated association;
10.4.3 has no branch outside England and no permanent establishment (as
that expression is defined in the respective Double Taxation
Relief Orders current at the date hereof) outside the United
Kingdom.
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SEVENTH SCHEDULE
----------------
TAX INDEMNITIES: CLAUSE 7
-------------------------
1. INDEMNITY
1.1 SUBJECT as hereinafter provided the Vendor hereby agrees to pay to the
Purchaser an amount equal to:-
1.1.1 any Liability to Taxation; and
1.1.2 any depletion or reduction in value of the assets or increase in
the liabilities of either the Company or the Purchaser as a
result of or in consequence of any Liability to Taxation
resulting from or by reference to any income profits or gains earned
accrued or received on or before Completion or any Event occurring or
pursuant to any Taxation Statute deemed to occur on or before Completion
whether alone or in conjunction with other Events or circumstances
(provided that if other Events or circumstances occur after Completion
they be within the ordinary course of business of the Company) and
whether or not such Taxation is chargeable against or attributable to
any other person.
1.2 The liability of the Vendors shall be joint and several and shall bind
their respective successors and personal representatives.
2. VAT INDEMNITY
Without prejudice to paragraph 1 above the Vendor hereby agrees to pay
to the Purchaser an amount equal to any Liability to Taxation of the
Company as a result of its being treated as a member of the same group
as any other body corporate for the purposes of VATA s43 during any
prescribed accounting period as defined in VATA s25(1) which ended on or
prior to or was current at Completion and the next following prescribed
accounting period together with all costs and expenses incurred and
payable by the Company in connection with any such Liability to
Taxation.
3. EXCLUSIONS
3.1 The Indemnities contained in this Schedule do not cover any Liability to
Taxation:-
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3.1.1 to the extent that provision or reserve (not being a deferred
taxation reserve) specifically in respect thereof has been made
in the Accounts; or
3.1.2 for which the Company is or may become wholly or primarily
liable as a result of transactions in the ordinary course of
business after the Balance Sheet Date.
3.2 Without prejudice to the generality of paragraph 3.1.2 above the
following shall not be regarded as being within the ordinary course of
business of the Company for the purpose of this Schedule:
3.2.1 any Taxation arising under Part XVII Income and Corporation
Taxes ▇▇▇ ▇▇▇▇ (Tax Avoidance);
3.2.2 any Taxation arising in connection with any distribution (as
defined in Part VI Income and Corporation Taxes Act 1988) or any
deemed distribution;
3.2.3 any Taxation arising in respect of the acquisition disposal or
supply of any assets goods services or business facilities for a
consideration deemed for Taxation purposes to be in excess of
that actually given or received;
3.2.4 any disposal or deemed disposal of chargeable assets.
4. MITIGATION
4.1 The Vendor shall be liable under the indemnities contained in paragraphs
1 and 2 hereof notwithstanding any Reliefs which may be available to any
person entitled to the benefit of the indemnities to set against or
otherwise mitigate any Liability to Taxation so that the indemnities
contained in this Schedule shall take effect as though no such Reliefs
were available.
4.2 If any provision for Taxation (not being a provision for deferred
taxation) contained in the Accounts shall at the request and expense of
the Vendor and to the satisfaction of the Purchaser's Auditors prove to
be an over-provision the amount so over-provided shall be set off
against the liability (if any) of the Vendor under the provisions of
this Schedule.
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5. DISPUTES AND CONDUCT OF CLAIMS
5.1 If the Purchaser or the Company shall become aware of a Claim relevant
for the purposes of this Schedule the Purchaser shall or shall procure
that the Company will as soon as reasonably practicable give written
notice thereof to the Vendor at the address given.
5.2 If the Vendor shall indemnify and secure the Purchaser and the Company
to their reasonable satisfaction against any liabilities costs or
expenses which may be incurred thereby including any additional
Liability to Taxation the Purchaser shall or shall procure that the
Company will take such action as the Vendor may reasonably request in
writing to avoid resist appeal dispute or compromise the Claim (a Claim
where action is so requested being hereinafter referred to as a
"Dispute").
PROVIDED ALWAYS THAT the Purchaser shall not be obliged to nor be
required to procure that the Company shall take any such action if
having given the Vendor written notice of the receipt of such assessment
the Purchaser has not within 15 days thereafter received written
instructions from the Vendor in accordance with the preceding provisions
of this sub-paragraph to do so.
5.3 Notwithstanding that the conduct of a Dispute may be dealt with in
accordance with the Vendor's request under sub-paragraph 5.2 above:
5.3.1 the Company and the Purchaser shall be kept fully informed of
all matters pertaining thereto and shall be entitled to receive
copies of all correspondence pertaining thereto;
5.3.2 all communications pertaining to the Dispute which are to be
transmitted to the Inland Revenue H.M. Customs & Excise or any
other appropriate statutory or governmental authority or body
shall first be transmitted to the Purchaser and the Company for
approval and shall only be finally transmitted if such approval
is given;
5.3.3 the Vendor shall make no settlement or compromise of the Dispute
without the prior approval of the Purchaser.
5.4 Notwithstanding the foregoing provisions of this paragraph at all times
during the conduct of a Dispute the Purchaser shall have the option
exercisable by notice in
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writing to the Vendor to refuse to take or procure the taking of such
action as the Vendor may request in accordance with 5.2 above after 14
days from the date of the notice if previously the Vendor has not taken
steps properly and effectively to conduct the said Dispute.
6. PAYMENTS
6.1 The Vendor will make payments to the Purchaser under the provisions of
this Schedule in full in cleared funds and without any deduction
whatsoever save as may be required by law as follows:
6.1.1 where the Company is due to make an actual payment of Taxation
to which this Schedule relates five days before that payment is
due;
6.1.2 in the case of the nullification cancellation or set-off of a
right to repayment of Taxation the date on which that repayment
would have been due;
6.1.3 in the case of the loss counteraction nullification disallowance
or claw-back of any Relief (other than a right to repayment of
Taxation) the date on which the Company is required to make an
actual payment of Taxation which it would not have been required
to make but for the loss counteraction nullification
disallowance or claw-back of that Relief;
6.1.4 in the case of costs and expenses incurred by the Purchaser or
the Company in connection with any Liability to Taxation or any
other matter not dealt with elsewhere in this paragraph 6 three
days after the service by the Purchaser of a notice containing a
written demand therefor.
6.2 Where there is or has been a Dispute and the Dispute relates to a Claim
where the Taxation the subject matter thereof has to be paid before the
action requested by the Vendor in respect of the Claim can effectively
be taken payment in respect thereof shall be made by the Vendor in full
in cleared funds three days before such Taxation must be paid to enable
the Purchaser to comply with the Vendor's request.
7. TAXATION OF CLAIMS
In the event of any payment pursuant to this Schedule being liable to
Taxation in the hands of the Purchaser the amount of any such Liability
to Taxation shall be deemed to be increased so as to ensure that the
amount received by the Purchaser shall after
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Taxation be equal to that which would have been received had the payment
not been subject to Taxation.
8. INTEREST
In the event that any payment pursuant to this Schedule has not been
received by the Company or the Purchaser by the date for payment in
accordance with paragraph 7 of this Schedule interest shall be payable
to the Purchaser as appropriate in respect of the sum unpaid at a rate
of 2% above Barclays Bank PLC base rate for the time being in force
calculated on a daily basis.
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NINTH SCHEDULE
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The parties to this Agreement agree one with the other so as to qualify the
terms of this Agreement as follows:
1. Any breach of the Warranties or Tax Indemnities or misstatement of fact
by the Vendors shall not give rise to a right on the part of the
Purchaser to rescind or terminate this Agreement after Completion.
2. No proceedings for any claim under the Warranties or the Tax
Indemnities shall be instituted unless such proceedings shall be in
respect of a claim or claims totalling (together with the amount of any
such claims previously made) in excess of US$1,650,000.
3. The liability of the Vendors under the Warranties and Tax Indemnities
shall not in any event exceed in aggregate US$1,650,000.
4. The Vendors shall not be liable in respect of any Claim or Warranty
Claim unless the amount of such liability exceeds the sum of US$3,000
and any liability the amount of which does not exceed such sum shall be
disregarded in calculating the aggregate amount of liabilities in
respect of Claims or Warranty Claims for the purposes of clause 2 of
this Schedule.
5.1 The Vendors shall not be liable in respect of any Claim or Warranty
Claim unless written notice thereof (containing at least a general
description of the matters alleged to give rise thereto) has been
served on it on or before the earlier of (i) the first anniversary of
the date of Completion or (ii) the issue of the statutory report in
relation to the Company's accounts for the fiscal year ending
30 June 1997.
5.2 Where written notice of a Claim or Warranty Claim has been served on
the Vendor within the period appropriate to such Claim or Warranty
Claim in accordance with the provisions of clause 5.1 but liability in
respect of such Claim or Warranty Claim has not been accepted or
finally determined within one year from the date of service of such
written notice the Vendor shall not be liable in respect of such Claim
or Warranty Claim unless bona fide legal proceedings in respect thereof
have been issued and served upon the Vendor within such one year
period.
6. The Vendor shall not be liable in respect of any Warranty Claim if and
to the extent of which:
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6.1 specific provision reserve or allowance has been made in the
Management Accounts for any liability which is the subject
matter of such Warranty Claim; or
6.2 the discharge of any liability of the Company or the
Subsidiaries which is the subject matter of such Warranty Claim
has specifically been taken into account and identified in the
Management Accounts; or
6.3 the subject matter of such Warranty Claim has been or is made
good including (without limitation) the receipt by the Company
the Subsidiaries or the Purchaser of compensation relating to
the subject matter of such Warranty Claim under the terms of any
policy of insurance; or
7. The Vendor shall not be liable in respect of any Claim if and to the
extent of which:
7.1 such Claim would not have arisen but for a voluntary act
transaction or omission of the Company the Subsidiaries or the
Purchaser after Completion otherwise than in the ordinary course
of business; or
7.2 such Claim would not have arisen but for any change or changes
in legislation (including without limitation any increase in
rates of Taxation) or in the practice of the Inland Revenue or
HM Customs and Excise or any other Taxation authority (in the
United Kingdom or elsewhere) occurring after Completion whether
or not such change or changes purport to be retrospectively
effective in whole or in part; or
7.3 such Claim would not have arisen but for the making of this
Agreement or but for any act, transaction or omission required
under the terms of this Agreement or under the provisions of any
legislation; or
7.4 such Claim arises by virtue of any change in the bases upon
which the Accounts of the Company or the Subsidiaries after
Completion are prepared and/or in the policies or practice
adopted in the preparation of such accounts.
8. If the Vendors make payment in respect of any Claim and the Purchaser
the Company or the relevant Subsidiary subsequently recovers from a
third party (including without limitation the Inland Revenue HM Customs
and Excise or any other Taxation authority) a sum which is referable to
the subject matter of such Claim the Purchaser shall forthwith repay to
the Vendors the amount paid by it in respect of such Claim.
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9. The Purchaser may not bring a Claim or Warranty Claim more than once in
respect of the same or substantially the same set of facts and may not
bring such Claim or Warranty Claim to the extent that a deduction has
been made under Clause 3.3 of the Agreement. .
10. Without prejudice to the liability of the Vendors in respect of any
Warranty Claim:
10.1 the Purchaser shall notify the Vendors of any claim against the
Purchaser and shall procure the Company and the Subsidiary to
notify the Vendors of any claim against the Company or the
Subsidiary in respect of which (if valid) a Warranty Claim would
lie against the Vendors forthwith within a reasonable period of
the Purchaser or (as the case may be) the Company or the
Subsidiary becoming aware of the same.
10.2 the Vendors shall be kept fully informed of all steps proposed
to be taken by the Purchaser and the Purchaser shall not and
shall procure that the Company and the Subsidiary shall not
admit settle or discharge any such assessment or claim without
the Vendors having first been notified of the proposals and
having been given an opportunity to comment on same.
11. Nothing in the Agreement or in the Warranties shall be deemed to relieve
the Purchaser from a duty to the Vendors to mitigate their loss.
12. Any payment made by the Vendors hereunder shall be by way of reduction
of the Consideration paid for the Shares.
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SIGNED by DR ▇▇▇▇▇▇▇ ▇▇▇ )
in the presence of: ) /s/ ▇▇▇▇▇▇▇ ▇▇▇
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SIGNED by ▇▇▇▇▇ ▇▇▇ ▇▇▇ )
in the presence of ) /s/ ▇▇▇▇▇ ▇▇▇
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SIGNED by )
for and on behalf of )
PAREXEL INTERNATIONAL )
CORPORATION )
in the presence of:- ) /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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