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Exhibit 4.13
THIS AGREEMENT AMONG:
(1) THOSE PERSONS (other than Scottish Enterprise) whose names and addresses
are set out in Part 1C of the Schedule ("the Target Shareholders");
(2) SCOTTISH ENTERPRISE, a statutory corporation having its chief office at ▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ("Scottish Enterprise");
(3) ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ residing at ▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇
("▇▇ ▇▇▇▇▇▇");
(4) WEATHERFORD AUSTRALIA PTY LIMITED, a company incorporated in Australia
under registered number ACN 008 947 395 and having its registered office at
▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ("the Australian Purchaser"),
(5) ▇▇▇▇▇▇▇▇▇▇▇ INTERNATIONAL, INC. a company incorporated in Delaware, United
States of America and having its registered office at ▇▇▇ ▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ ("Weatherford" or "the
Purchaser") (together with the Australian Purchaser hereinafter referred to
as "the Purchasers").
WHEREAS:
(A) The Target Shareholders and Scottish Enterprise are the legal and
beneficial owners of the entire issued share capital (the "Target Shares")
of Brit Bit Limited ("Target") in the proportions set out in Part 1C of the
Schedule.
(B) The Target Shareholders and Scottish Enterprise have agreed to sell and
Weatherford has agreed to purchase the Target Shares on the terms set out
in this Agreement.
(C) ▇▇ ▇▇▇▇▇▇ is the legal and beneficial owner of the Minority Interest (as
hereinafter defined).
(D) Conditional upon completion of the sale and purchase of the Target Shares,
▇▇ ▇▇▇▇▇▇ has agreed to sell and the Australian Purchaser has agreed to
purchase the Minority Interest on the terms set out in this Agreement.
NOW IT IS HEREBY AGREED AS FOLLOWS:
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1. DEFINITIONS AND INTERPRETATION/SCHEDULE
1.1 Unless the context shall otherwise require, words and expressions in
this Agreement shall be given the meanings ascribed to them in, and
shall be interpreted in accordance with, Part 10 of the Schedule.
1.2 The Schedule forms part of and shall be construed as one with this
Agreement.
2. SALE AND PURCHASE
2.1 Subject to the terms and conditions of this Agreement, each of the
Target Shareholders and Scottish Enterprise as the legal and
beneficial owners shall sell and the Purchaser shall purchase the
Target Shares set opposite their respective names in Columns 3 and 4
of Part 1C of the Schedule, with all rights and privileges attached to
them at the Completion Date, free and clear of all and any
encumbrances. Weatherford, relying on the undertakings,
representations, warranties and covenants contained in this Agreement,
agrees to buy the Target Shares on those terms.
2.2 Each of the Target Shareholders and Scottish Enterprise hereby waive
all rights of pre-emption, other restrictions on transfer and rights
of veto or otherwise held by them respectively under the Articles of
Association of members of the Target Group or otherwise in respect of
the transfer of the Target Shares to the Purchaser hereunder. Each of
the Target Shareholders and Scottish Enterprise waive all rights to
any preference or other dividends which may have accrued or become
payable to them by any member of the Target Group.
2.3 Subject to the terms and conditions of this Agreement and conditional
upon completion of the sale and purchase of the Target Shares pursuant
to Clause 2.1, ▇▇ ▇▇▇▇▇▇ as the legal and beneficial owner shall sell
and the Australian Purchaser shall purchase the Minority Interest with
all rights and privileges attached to it at the
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Completion Date, free and clear of all and any encumbrances. The
Australian Purchaser, relying on the undertakings, representations,
warranties and covenants contained in this Agreement, agrees to buy
the Minority Interest on those terms.
3. INSTRUCTION AND CALCULATION OF NET ASSET VALUE
3.1 On the Completion Date the Vendors' Representative and the Purchasers
(together with the Vendors' Accountants) shall carry out or cause to
be carried out a joint physical stocktake and joint physical count of
fixed assets (or such other method of verification as may be agreed
among the parties) for the purposes of determining the composition and
value of the fixed assets, stocks and work-in-progress of the Target
Group as at the close of business on the Completion Date. The result
of such stocktake and fixed asset count shall be final and binding on
the Purchasers and the Vendors for the purposes of this Clause 3.1.
3.2 The Purchasers shall procure that, as soon as practicable following
the Completion Date and in any event within 60 days of the Completion
Date (hereinafter "the First 60 Day Period"), draft Completion
Accounts and a draft NAV Statement are drawn up by the Purchasers who
will verify that they have been prepared in accordance with this
Clause and the instructions contained in the Basis of Preparation of
Completion Accounts.
3.3 The Purchasers shall or shall procure that the Purchaser's Accountants
shall within the First 60 Day Period despatch the draft Completion
Accounts and the draft NAV Statement to the Vendor's Accountants
whereupon the Vendors' Representative and the Vendors' Accountants
shall review the same to verify that they have been prepared in
accordance with this Clause 3.3 and the instructions contained in the
Basis of Preparation of Completion Accounts.
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3.4 The Vendors' Representative and the Vendors' Accountants shall attempt
to agree the draft Completion Accountants (including the Final
Indebtedness Statement) and the draft NAV Statement as soon as
possible and in any event within 60 days (hereinafter "the Second 60
Day Period") after receipt of the same from the Purchasers under
Clause 3.3. Unless within the Second 60 Day Period the Vendors'
Accountants notify the Purchasers in writing that they disagree with
the draft NAV Statement and/or the Final Indebtedness Statement, the
draft NAV Statement and/or the Final Indebtedness Statement shall be
deemed to be agreed and it shall thereupon become final and binding on
the Purchasers and the Vendors for all purposes of this Agreement. If
by the end of the Second 60 Day Period the draft NAV Statement and/or
the Final Indebtedness Statement has not been agreed the Vendors'
Representative and the Vendors' Accountants shall meet urgently with
the Purchasers so as to resolve in good faith any differences within
the following 14 days (hereinafter "the 14 Day Period"). On or after
expiry of the 14 Day Period (unless otherwise agreed by the Vendors'
Representative and the Purchaser) either the Purchasers or the
Vendors' Representative may request the appointment of an independent
firm of chartered accountants to agree or amend or prepare and to
certify the NAV Statement and/or the Final Indebtedness Statement (but
always in accordance with the instructions contained in the Basis of
Preparation of Completion Accounts) in so far as not otherwise agreed
in accordance with the provisions of this Clause 3.4. Such appointment
shall be made by the Vendors' Representative and the Purchasers either
jointly or, in default of agreement within 7 days of one party
notifying the other of its wish to appoint an independent firm, by the
President for the time being of the Institute of Chartered Accountants
of Scotland on
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the application of either party. The certification prepared by such
independent firm shall be final and binding on the Vendors and the
Purchasers for all purposes of this Agreement and such independent
firm shall act as experts and not as arbiters.
3.5 The Vendors shall pay the charges of the Vendors' Accountants and the
Purchasers shall pay the charges of the Purchasers' Accountants in
respect of work carried out pursuant to the provisions of this Clause
3 and the charges of the Independent Accountants (if appointed) shall
be apportioned between the Vendors and the Purchasers in such
proportions as the Independent Accountants may determine in the light
of the merits of the objections taken by (or on behalf of) the Vendors
or the Purchaser to the draft NAV Statement and/or the Final
Indebtedness Statement in the form despatched to the Purchaser's
Accountants pursuant to Clause 3.3.
3.6 The Vendors shall procure that the Vendors' Accountants shall give to
the Purchasers and the Independent Accountant access to all their
working papers and the Purchasers shall give or procure that the
Purchasers Accountants give to the Vendors and the Independent
Accountants access to all their working papers (and in the case of the
Purchasers Accountants, to the Target Group's relevant papers) as may
reasonably be required for the purposes of agreeing or certifying the
NAV Statement and the Final Indebtedness Statement.
3.7 As between the parties to this Agreement once the NAV Statement and
the Final Indebtedness Statement shall have become final and binding,
pursuant to Clause 3.4, no right of appeal shall be competent with
regard thereto, and neither the Vendors nor the Purchasers nor the
Independent Accountants shall be entitled to appeal or state a case
either on a point of law or fact with regard thereto, to any court.
3.8 References in this Clause 3 to accountants certifying any matter shall
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be construed to mean certification of their opinion as to such matter.
4. CONSIDERATION
4.1 The consideration for the sale and purchase of the Sale Shares shall
(subject to adjustment pursuant to Clause 6) be the Consideration
payable in accordance with Clause 4.3 below and Part 3 of the
Schedule.
4.2 The Vendors shall be entitled to the Consideration in the percentages
set out in column 5 of Part 1C of the Schedule to be satisfied by the
issue of Weatherford Shares and the payment of cash as set out in
columns 6 and 7 respectively of Part 1C of the Schedule.
4.3 Upon completion of the matters referred to in paragraphs 1 and 2 of
Part 3 of the Schedule the Purchaser shall cause there to be issued to
the Target Shareholders and Scottish Enterprise, and upon completion
of the matters referred to in paragraphs 5 and 6 of Part 3 of the
Schedule the Purchaser shall cause there to be issued to ▇▇ ▇▇▇▇▇▇,
the Weatherford Shares in such name or names as may be requested in
writing by the Vendors and deliver certificates to the Vendors'
Solicitors on behalf of the Vendors.
4.4 No fractional shares of Weatherford shall be issued to the Vendors and
to the extent a fractional share would otherwise be issued, the number
of Weatherford Shares to be issued would be rounded up or down to the
nearest whole.
4.5 For the purpose of calculating the Indebtedness the rate of conversion
of all relevant currencies to Dollars will be fixed on the second
business day prior to the Completion Date ("the Fix Date") and shall
be the average rate of exchange over the ten Business Days preceding
the Fix Date. For the purpose the rate of exchange for each Business
Day will be the appropriate Spot Closing mid-point rate published in
the Financial Times on the day in question.
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5. COMPLETION
5.1 The purchase and sale of the Sale Shares shall be completed at the
offices of the Vendors' Solicitors or at such other place as the
parties may agree on the Completion Date when the parties shall each
comply with their respective obligations set out in Part 3 of the
Schedule.
5.2 The Purchasers shall not be obliged to complete the purchase of any of
the Sale Shares unless all of the Sale Shares are sold and purchased
in accordance with the terms and conditions of this Agreement.
6. FINAL COMPLETION
6.1 On the Final Completion Date:
6.1.1 The Purchaser shall pay to the Vendors' Solicitors in Sterling,
by bankers draft or telegraphic transfer to the Vendors'
Solicitors Account, the Indebtedness Shortfall (to be distributed
amongst the Vendors in accordance with the percentages set out in
column 5 of Part 1C of the Schedule); and/or
6.1.2 Each Vendor shall at his option either (a) pay to the Purchaser
in Sterling, by bankers draft or telegraphic transfer to an
account nominated by the Purchaser, the percentage set opposite
his name in column 5 of Part 1C of the Schedule of (i) the
Indebtedness Excess, and (ii) if the Indebtedness Excess does not
exceed the amount of the Overpayment, a sum equal to the
Overpayment less the Indebtedness Excess or (b) transfer to the
Purchaser such number of Weatherford Shares at the Weatherford
Share Price; as is equal in value to the said percentage of (i)
the Indebtedness Excess, and (ii) if the Indebtedness Excess does
not exceed the amount of the Overpayment, a
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sum equal to the Overpayment less the Indebtedness Excess
("Overpayment Shares") provided, however, if any such transfer as
is referred to in paragraph (b) above falls to be made prior to
the initial effectiveness of the Shelf Registration and if
Weatherford is in default under its obligations under the
Registration Rights Agreement then the Weatherford Share Price
shall be deemed to equal the closing sales price of Weatherford
Common Stock on the New York Stock Exchange on the Business Day
prior to the date of such transfer if such Closing Price is
higher than the Weatherford Share Price.
6.2 For the avoidance of doubt, the amount of the payment provided for in
Clause 6.1, or the value of any Overpayment Shares at the Weatherford
Share Price shall be treated as an increase to or a reduction in the
consideration for the Sale Shares, as the case may be.
7. WARRANTIES AND UNDERTAKINGS BY THE WARRANTORS
7.1 (a) Each Vendor hereby warrants and represents to and undertakes with
the Purchasers that (i) the Title Warranties as they relate to
such Vendor and his holding of the Sale Shares (so that no such
warranty, representation or undertaking is given by any Vendor in
respect of any other Vendor or such other Vendor's holding of
Sale Shares) and
(b) the Warrantors hereby jointly warrant and represent to and
undertake with the Purchasers that the Warranties other than the
Title Warranties,
as at the date of this Agreement:
7.1.1 are true and accurate in all respects, save as fairly disclosed
in the Disclosure Letter;
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7.1.2 are (without prejudice to the provisions of paragraphs 10.3 of
Part 6 of the Schedule and the content of the Disclosure Letter)
not and are not to be affected or limited by any previous or
other disclosures express or implied, written or oral to the
Purchaser, its officers or representatives or professional
advisers or by any investigation made by or on behalf of the
Purchaser into the affairs of the Target Group or by any
information of which the Purchaser or its agents have knowledge
(actual or constructive); and
7.1.3 shall not in any respect be extinguished or affected by
Completion.
7.2 For the remaining sub-Clauses of this Clause 7, a reference to the
Warrantors shall be deemed to be a reference to the Vendors in respect
of a claim or potential claim under the Title Warranties and shall be
deemed to be a reference to the Warrantors in respect of a claim or
potential claim under the Warranties other than the Title Warranties.
7.3 The provisions of Part 6 of the Schedule shall apply to limit the
Warrantors' liability in respect of the Warranties to the extent
specified therein and/or any Relevant Claim for breach thereof
provided always that the provisions of Part 6 of the Schedule shall in
no way operate as to limit a Vendor's liability in respect of the
Title Warranties which liability shall not however in any
circumstances exceed the amount of cash and the value of the
Weatherford Shares issued to the relevant Vendor as Consideration
under deduction of the amount of any payment made by that Vendor, or
the value of any Weatherford Shares transferred by that Vendor, under
Clause 6 (the value of the Weatherford Shares being calculated in each
case by
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reference to the Weatherford Share Price; provided, however, if any
claim under the Title Warranties is required to be paid prior to the
initial effectiveness of the Shelf Registration and if Weatherford is
in default under its obligations under the Registration Rights
Agreement then the Weatherford Share Price shall be deemed to equal
the closing sales price of Weatherford Common Stock on the New York
Stock Exchange on the Business Day prior to the date of such payment
if such Closing Price is lower than the Weatherford Sales Price.
7.4.1 Notwithstanding any other provision of this Agreement, and in
full satisfaction of the Purchaser's rights in respect of any
such breach, the Warrantors hereby undertake to the Purchaser
that if there is a breach of any of the Warranties the Warrantors
will pay in cash to the Purchaser (or if so directed by the
Purchaser, to the relevant Target Group Company) within 5
Business Days after written demand, an amount equal to the
aggregate of:
7.4.1.1 the amount which if received by the relevant Target Group
Company would be necessary to put that company into the
position which would have existed had there been no breach
of the Warranties; and
7.4.1.2 all reasonable costs, liabilities, damages and expenses
suffered or incurred by the Purchaser and/or the relevant
Target Group Company and which would not have been suffered
or incurred if the relevant warranty had been true and
accurate.
Provided that any amount payable under either 7.4.1.1 or 7.4.1.2
shall not also be payable under the other;
7.4.2 Interest will run on any amount due to the Purchaser under
Clause 7.4.1 at the Rate from the due date for payment under that
sub-
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Clause until the date upon which payment in full has been made to
the Purchaser (or as the case may be, to the relevant Target
Group Company, if directed).
7.5 For the avoidance of doubt it is expressly agreed and declared that
save for the Disclosure Letter and the Disclosure Bundle no letter,
document or other communication shall be deemed to constitute a
disclosure for the purposes of the Warranties.
7.6 The Warrantors undertake not to make and will procure (to the extent
that they are able) that no other person claiming under or through any
of them will make any claim against any Target Group Company or any
officer or employee of the Company on whom they may have relied before
entering into any term of this Agreement or the Tax Deed or in the
preparation of the Disclosure Letter in respect of any claim under
this Agreement or any omission from or statement in the Disclosure
Letter.
7.7 Each of the Warranties shall be construed as separate and independent
and save as expressly otherwise provided shall not be limited by
reference to any other such Warranty or by anything in this Agreement.
7.8 In determining damages for any breach of the Warranties the Purchasers
shall not be required to cease to conduct or to wind down any business
or to rely on the limited liability of any Target Group Company in
mitigation of its loss. The Purchasers hereby acknowledges that, in
entering into this Agreement, they are not relying on any warranty,
representation or undertaking whatsoever and by whomsoever made save
for the representations, warranties and undertakings set out in this
Agreement.
7.9 Any payment made by any of the Vendors to the Purchasers under the
Warranties, the Indemnities or under the Tax Deed or otherwise
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by the Vendors under this Agreement will be treated as a reduction by
the amount so paid of the Consideration for the relevant Sale Shares.
8. WARRANTIES BY THE PURCHASER AND WEATHERFORD; REGISTRATION RIGHTS
8.1 The Purchasers hereby jointly and severally warrant and represent to
the Vendors that as at Completion:
8.1.1 Organisation and Qualification. Each of the Purchasers is a
corporation, validly existing and in good standing under the laws
of the jurisdiction of its incorporation and has all requisite
corporate power and authority to own, lease and operate its
properties and to carry on its business as it is now being
conducted.
8.1.2 Articles of Incorporation; By-Laws. The Purchasers have
furnished to the Vendors a complete and correct copy of the
Articles of Incorporation and the By-Laws, as amended or
restated, of the Purchasers. The Purchasers are not in violation
of any of the provisions of their Articles of Incorporation or
By-Laws.
8.1.3 Capitalisation
8.1.3.1 As of the date of this Agreement, the authorised capital
stock of Weatherford consists of (i) 250,000,000 shares of
Weatherford Common Stock and (ii) 3,000,000 shares of
preferred stock, par value $1.00 per share.
8.1.3.2 At Completion the Weatherford Shares will be duly
authorised, validly issued, fully paid and non-assessable
and not subject to adverse
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claims of third parties or preemptive rights created by
statute, ▇▇▇▇▇▇▇▇▇▇▇'▇ Articles of Incorporation or By-Laws
or any agreement to which Weatherford is a party or is
bound.
8.1.3.3 Upon delivery of the Weatherford Shares at Completion,
the Vendors will own such shares free and clear of all
adverse claims.
8.1.4 Authority; Enforceability. The Purchasers have the requisite
corporate power and authority to execute and deliver this
Agreement, the Registration Rights Agreement and the Tax Deed, to
perform its obligations under each such agreement, and to
consummate the transactions contemplated by each such agreement.
The execution and delivery of this Agreement, the Registration
Rights Agreement and the Tax Deed by the Purchasers, and the
consummation by the Purchasers of the transactions contemplated
by each such agreement, have been duly authorised by all
necessary corporate action and no other corporate proceedings on
the part of the Purchasers are necessary to authorise this
Agreement, the Registration Rights Agreement or the Tax Deed or
to consummate the transactions contemplated by each such
agreement. This Agreement, the Registration Rights Agreement and
the Tax Deed have each been duly executed and delivered by the
Purchasers and, assuming the due authorisation, execution and
delivery by the Vendors, each constitutes a legal, valid and
binding obligation of the Purchasers, enforceable against each of
them in accordance with their terms, subject to public
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policy limitations with respect to the indemnification provided
in the Registration Rights Agreement.
8.1.5 No Conflict; Required Filings and Consents
8.1.5.1 The execution and delivery of this Agreement and the
Registration Rights Agreement by the Purchasers do not, and
the performance of this Agreement and the Registration
Rights Agreement by the Purchasers will not (i) conflict
with or violate the Articles or Certificate of Incorporation
or By-Laws or equivalent organisational documents of the
Purchasers, or any resolution adopted by the board of
directors or stockholders of the Purchasers, (ii) subject to
(A) obtaining consents, approvals, authorisations and
permits of, and making filings with or notification to, any
governmental or regulatory authority, whether domestic or
foreign ("Governmental Entities"), pursuant to the
applicable requirements of any foreign or domestic federal,
state or local law, statute, ordinance, rule, regulation,
order, judgement or decree ("Laws") or of any third party,
and (B) obtaining the consents, approvals, authorisations
and permits of, and making filings with or notifications to
any Governmental Entities pursuant to the applicable
requirements of Law, conflict with or violate any Laws
applicable to the
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Purchasers or any of ▇▇▇▇▇▇▇▇▇▇▇'▇ subsidiaries or by which
any of their respective properties is bound or affected; or
(iii) result in any breach of or constitute a default (or an
event that with notice or lapse of time or both would become
a default) under, or to give to others any rights of
termination, amendments, acceleration or cancellation of, or
result in the creation of a lien or encumbrance on any of
the properties or assets of the Purchasers or any of
▇▇▇▇▇▇▇▇▇▇▇'▇ subsidiaries pursuant to, any note, bond,
mortgage, indenture, contract, agreement, lease, license,
permit, franchise or other instrument of obligation to which
the Purchasers or any of ▇▇▇▇▇▇▇▇▇▇▇'▇ subsidiaries are a
party or by which the Purchasers or any of ▇▇▇▇▇▇▇▇▇▇▇'▇
subsidiaries or any of their respective properties are bound
or affected, except for any such matters described in clause
(ii) or (iii) that would not have a Weatherford Material
Adverse Effect.
8.1.5.2 Based in part on the representations by the Warrantors,
the execution and delivery of this Agreement and the
Registration Rights Agreement by the Purchasers do not, and
the performance of this Agreement by the Purchasers shall
not, require any prior
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consent, approval, authorisation or permit of, or filing
with or notification to, any Governmental Entities or other
third party.
8.1.6 Reports; Financial Statements
8.1.6.1 Since 31 December 2000 Weatherford and its subsidiaries
have filed (i) all forms, reports, statements, notices and
other documents required to be filed with the SEC
(collectively, the "Weatherford SEC Reports"). The
Weatherford SEC Reports were prepared in all material
respects in accordance with the requirements of applicable
laws (including the Securities Act and the Securities
Exchange Act of 1934, as amended, as the case may be). As of
their respective dates, the Weatherford SEC Reports did not
contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or
necessary to make the statements made therein, in light of
the circumstances in which they were made, not misleading.
Since the filing of ▇▇▇▇▇▇▇▇▇▇▇'▇ latest quarterly report on
Form 10-Q, there has been no Weatherford Material Adverse
Effect that has not been disclosed through press releases
issued by Weatherford or in a current report filed with the
SEC, in each case prior to the date of this Agreement.
8.1.6.2 Each of the consolidated financial statements (including,
in each case, any related notes
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thereto) contained in the Weatherford SEC Reports (i) has
been prepared in all material respects in accordance with
the published rules and regulations of the SEC and US
Generally Accepted Accounting Principles ("GAAP") applied on
a consistent basis throughout the periods involved (except
(x) to the extent required by changes in GAAP and (y) with
respect of Weatherford SEC reports filed prior to the date
of this Agreement, as may be indicated in the notes thereto)
and (ii) fairly presents the consolidated financial position
of ▇▇▇▇▇▇▇▇▇▇▇ and its subsidiaries as of the respective
dates thereof and the consolidated results of operations and
cash flows for the periods indicated, except that (A) any
unaudited interim financial statements were or will be
subject to normal and recurring year-end adjustments which
were not or are not expected to be material in amount and
(B) any pro forma financial information contained in such
consolidated Financial Statements is not or may not be
necessarily indicative of the consolidated financial
position of Weatherford and its subsidiaries as of the
respective dates thereof and the consolidated results of
operations and cash flows for the periods indicated.
8.1.7 Completion; Disclosure. Each of the representations and
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warranties set forth in this Clause 8 shall be deemed made at and
as at the date of Completion except to the extent such
representations and warranties specifically refer to a date other
than the date of this Agreement.
8.1.8 Certain Proceedings. There is no pending Proceeding (as
hereinafter defined) that has been commenced against the
Purchasers, or against any of their Officers, directors or
stockholders in connection with the affairs of the Purchasers,
and that challenges, or may have the effect of preventing,
delaying, making illegal or otherwise interfering with, any of
the transactions contemplated by the Agreement and/or the
Registration Rights Agreement or that involves material claims
not disclosed in the Weatherford SEC Reports against Weatherford
or its affiliates. To the knowledge of the Purchasers, no such
Proceeding has been threatened. For the purposes of this
Agreement, a Proceeding means any action, binding arbitration,
audit, hearing, formal investigation, litigation or suit (whether
civil, criminal or administrative) commenced, brought, conducted
or heard by or before any court, arbitrator, mediator or
governmental authority.
8.2 Weatherford will file to register for resale all of the Weatherford
Shares pursuant to the terms of the Registration Rights Agreement
within eight Business Days of Completion. If and when paragraph (k) of
Rule 144 under the Securities Act (or a comparable provision of any
successor rule) becomes applicable to any Weatherford Shares that
continue to be held by any Vendor, then upon receipt of the
certificates evidencing such shares, Weatherford will promptly deliver
or cause to be promptly delivered to such Vendor (or, if so
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instructed, to his assignees) new certificates not bearing any legend
restricting transfer.
8.3 Weatherford will indemnify the Vendors (or any of them) for any loss,
damage, cost or expense (including, without limitation, reasonable
attorneys' fees), excluding however, consequential, exemplary and
punitive damages incurred by any Vendor by reason of the failure of
the Purchasers to comply with any material agreements, obligations,
covenants or undertakings in this Agreement, the Tax Deed and/or the
Registration Rights Agreement or the inaccuracy, breach or
incorrectness of any material warranty or representation of the
Purchasers herein or therein.
9. CLAIMS PROCEDURE
9.1 In the event of the Purchasers becoming aware of any claim or any
matter which may involve the Vendors or Warrantors in liability for
breach of the Warranties or the Indemnities (in this Clause, a
"Claim"), the Purchasers will notify the relevant Vendors in writing
as soon as reasonably practicable after becoming aware of the same and
shall provide reasonable details of the facts and circumstances of the
Claim as shall then be known to the Purchasers.
9.2 In the case of a Claim resulting from a claim made or which may be
made by a third party (in this Clause, a "Third Party Claim") the
relevant Vendors shall within 10 Business Days of having received
notice thereof pursuant to Clause 9.1 intimate in writing to the
Purchasers whether or not the relevant Vendors desire to conduct the
defence of such Third Party Claim.
9.3 If the relevant Vendors do not give timeous notice in accordance with
Clause 9.2, the relevant Vendors shall be deemed to have given notice
in accordance with such Clause that they do not wish to conduct the
defence of such Third Party Claim. Always provided
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that where the relevant Vendors do not give timeous notice in
accordance with Clause 9.2 any dispute relating to such Third Party
Claim shall be conducted by the Purchasers but the Purchasers shall
keep the relevant Vendors informed on a reasonable basis as may be
requested from time to time.
9.4 If the relevant Vendors have given timeous notice that the relevant
Vendors desire to conduct the defence of a Third Party Claim then:
9.4.1 the Purchasers shall and shall procure (to the extent then
within their power) that each Target Group Company shall take
such lawful action as the relevant Vendors may reasonably request
to avoid, dispute, resist, appeal, compromise or defend the Third
Party Claim subject to the Purchasers and each Target Group
Company being specifically indemnified and secured to their
reasonable satisfaction against any Losses which they or any of
them may thereby incur;
9.4.2 the relevant Vendors shall fully and effectually indemnify and
secure the Purchasers and each relevant Target Group Company to
its satisfaction against any and all Losses which they may incur
as a result of such Third Party Claim and the defence thereof and
hereby undertake that they shall meet in full, without recourse
to the Purchasers or any Target Group Company, the full amount of
such Third Party Claim and the whole costs and expenses of the
Purchasers and the Company in defending the same including
without prejudice any professional or other costs incurred by any
or each of them in being advised with regard thereto;
9.4.3 the relevant Vendors shall from time to time and
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forthwith upon the request of the Purchasers keep the Purchasers
fully informed of the conduct of and any negotiations relating to
the defence of such Third Party Claim.
9.5 If the relevant Vendors have intimated or are deemed to have intimated
that they do not wish to defend any Third Party Claim, the Purchasers
and each relevant Target Group Company may take such action as they
see fit with regard thereto provided that, although the relevant
Vendors shall not be deemed to have admitted any liability to the
Purchasers with regard to such Third Party Claim subject as aforesaid,
the liability of the relevant Vendors shall not be diminished or
extinguished on the grounds that the Purchasers or the Company took or
ought to have taken or omitted to take any action with regard to such
Third Party Claim
9.6 The Purchasers shall be entitled to refuse to allow the Vendors to
take over the conduct of a Third Party Claim under Clause 9.2, and
shall be entitled to refuse to comply with a request made by the
relevant Vendors in relation to a Third Party Claim if it is
reasonable for the Purchasers to exercise such right of refusal taking
into account the likelihood of success of the Third Party Claim and
any material damage likely to be caused to the goodwill of the Target
Group's business, but to the extent that the relevant Vendors are
prejudiced by any such refusal, they shall be relieved of the
liability which they would otherwise have had under the terms of this
Agreement provided that in the event that the relevant Vendor does not
agree that it is reasonable for the Purchasers to exercise such right
of refusal on the basis of the likelihood of success of the Third
Party Claim the relevant Vendor and the Purchasers shall at the
request of the relevant Vendor remit to a Queen's Counsel (to be
agreed by the
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parties) the question of whether or not there is a reasonable prospect
of defending the Third Party Claim. In the event that such Queen's
Counsel is of the opinion that there is a reasonable prospect of
successfully defending the Third Party Claim, the Purchasers will not
be entitled to refuse to comply with the relevant request on the
grounds that defence is unlikely to succeed. In the event that such
Queen's Counsel is of the opinion that there is no reasonable prospect
of successfully defending the Third Party Claim, the Vendors will not
be so relieved of such liability.
9.7 For the avoidance of doubt, should the Purchasers fail to give notice
of a claim as soon as reasonably practicable as required by Clause
9.1, the relevant Vendors shall (without prejudice to paragraphs 4 and
5 of Part 6 of the Schedule) not be absolved or released of liability
but shall be entitled to claim a reduction (up to 100%) in liability
they would otherwise have, to the extent that they are prejudiced by
the delay of the Purchasers.
10. PROTECTION OF GOODWILL
10.1 Each of the Covenantors hereby undertakes to the Purchaser with the
intent of assuring to the Purchaser the full benefit and value of the
goodwill and connections of each of the Target Group Companies and as
a constituent part of the Agreement for the sale of the Sale Shares
that he will not and that he will procure that none of his Connected
Persons will:
10.1.1 in the Territory for the Relevant Period next following the
date of this Agreement directly or indirectly and whether for
their own account or in partnership with another or others or as
agent for another or others engage in or be concerned with or
interested in (except as the holder for investment of securities
dealt on a stock exchange and not
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exceeding 3% in nominal value of the securities of any class) or
provide financial, technical or other support to any business
which competes directly or seeks to compete directly with any
business carried on by any of the Target Group Companies at the
date of this Agreement. For the purposes of this Clause 10 the
parties agree that the business carried on by the Target Group
Companies at the date of this agreement shall without prejudice
to the foregoing generality be deemed to include the following:
the design, manufacture and supply of products for use in the
drilling and completion of oil and gas ▇▇▇▇▇ as follows: PDC
Drill Bits, Drill Shoe, Slick Sleeve, Reamer Shoe, Gauge Alert
and Diamond Blade Stabiliser;
10.1.2 except to the extent required by law not at any time following
the date of this Agreement divulge to any person or otherwise
make use of any secrets, trade secrets, confidential knowledge or
information concerning the business, finance or affairs of any of
the Target Group Companies.
10.1.3 (without prejudice to the generality of the provisions
contained in Clauses 10.1.1 and 10.1.2 of this Clause) for the
Relevant Period next following the date of this Agreement
directly or indirectly solicit, interfere with or endeavour to
entice away from any of the Target Group Companies any person who
is a director or employee of any such company engaged in its
management or the management of any of its branches or in a sales
capacity or otherwise in a commercially sensitive position
(whether or not such person would commit any breach of
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his contract of employment or engagement by reason of leaving the
service of such company) nor knowingly employ or aid or assist in
or procure the employment by any other person, firm or company of
any such person;
10.1.4 (without prejudice to the generality of the provisions
contained in Clause 10.1.1 and 10.1.2) for the Relevant Period
next following the date of this Agreement not do any act or thing
likely to have the effect of causing any customer or any supplier
of goods or services to any of the Target Group Companies or
other person in the habit of dealing with any of the Target Group
Companies to cease to deal with any of the Target Group Companies
either at all or in part or on the terms on which he had
previously dealt with any of the Target Group Companies or likely
to have the effect of causing any person having a contract or
arrangement with any of the Target Group Companies to breach,
terminate or modify that contract or arrangement;
10.1.5 not at any time following the Completion Date in connection
with any business use the name of any of the Target Group
Companies or the words "Brit Bit" or the initials "BBL" or any
names, words or initials similar to or likely to be confused with
them;
10.2 For the purposes of clause 10.1, "Relevant Period" shall mean five
years in the case of Mr Haites, two years in the case of ▇▇ ▇▇▇▇ and
▇▇ ▇▇▇▇▇▇ and one year in the case of ▇▇ ▇▇▇▇▇▇▇, provided that, in
the case of any Covenantor (other than Mr Haites, whose Relevant
Period shall remain five years) whose employment under the service
agreement referred to in Part 3 of the Schedule is terminated by the
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employer without cause, the Relevant Period, if not already expired,
shall be deemed to expire on the date of such termination.
10.3 Each undertaking and agreement contained in this Clause 10 shall be
read and construed independently of the other undertakings and
agreements herein contained and if any undertaking or agreement is
held to be invalid whether as an unreasonable restraint of trade or
for any other reason the remaining undertakings and agreements shall
continue to apply to the extent that they shall not also be held to be
invalid and the undertaking or agreement which is held to be invalid
shall be referred by the parties to a Queen's Counsel (to be agreed by
the parties) whose opinion shall be sought as to what restriction (not
imposing any wider restrictions on the parties) would be legal and
valid and the parties hereby agree that such undertaking or agreement
shall be altered accordingly, and the costs and expenses of the
Queen's Counsel shall be borne by the Purchaser.
10.4 The Covenantors by their execution hereof hereby agree that having
regard inter alia to the price paid by the Purchaser for the Sale
Shares the restrictions contained in this Clause are reasonable and
necessary for the protection of the legitimate interests of the
Purchaser and that having regard to those circumstances those
covenants do not work harshly on them.
11. RELEASE OF LIABILITY AND GUARANTEES
11.1 Each Vendor hereby acknowledges and confirms that he does not have a
claim on any account whatsoever against any member of the Target Group
(other than (a) in respect of any unpaid salary or reimbursable
expenses in respect of the month current at the Completion Date and
(b) the amount due to ▇▇ ▇▇▇▇▇▇ included in the Indebtedness Statement
(which the Purchaser shall procure is repaid to him at Completion))
and hereby irrevocably and with effect
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from Completion waive any such claim which may hereafter be or become
competent and/or available to him (provided that none of the Vendors
gives any such acknowledgement, confirmation or waiver in respect of
any other Vendor or any other Vendor's claims).
11.2 Each Vendor undertakes with the Purchaser to procure the unconditional
and complete release of each member of the Target Group prior to
Completion from all securities, charges, guarantees, undertakings and
indemnities whatsoever given by each member of the Target Group in
respect of any indebtedness or obligation whatsoever of that Vendor or
any of his Connected Persons (other than a member of the Target Group)
(provided that none of the Vendors gives any such undertaking in
respect of the indebtedness or obligations of any other Vendor).
12. EFFECT OF COMPLETION
Any provision of this Agreement and any other documents referred to in it
which is capable of being performed after but which has not been performed
at or before Completion and all Warranties and the indemnities, covenants,
representations and undertakings (including for the avoidance of doubt the
warranties, representations and undertakings given by the Purchasers in
Clause 8) contained in or entered into pursuant to this Agreement shall
remain in full force and effect notwithstanding Completion.
13. REMEDIES AND WAIVERS
13.1 No delay or omission by any party in exercising any right, power or
remedy provided under this Agreement or any other documents referred
to in it shall:
13.1.1 impair such right, power or remedy; or
13.1.2 operate as a waiver thereof.
13.2 The single or partial exercise of any right, power or remedy provided
under this Agreement shall not preclude any other or further exercise
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thereof or the exercise of any other right, power or remedy.
14. ASSIGNATION
14.1 The rights of the Vendors under this Agreement shall not be assignable
without the written consent of the Purchaser, except that Scottish
Enterprise shall be entitled to assign its rights under this Agreement
to a member of the Scottish Enterprise Group without any such consent.
14.2 The rights and obligations of the Purchasers under this Agreement and
under the Tax Deed (the "Rights") may be assigned by the Purchasers
without the consent of the Vendors provided that such assignee
undertakes in writing to the Vendors to be bound by and to perform all
of the obligations of the assignor under this Agreement.
14.3 The Rights shall if assigned be enforceable by the assignee in
accordance with the terms of this Agreement and the Tax Deed which
shall be entitled to the full benefit of any indemnity, warranty,
representation or undertaking in favour or expressed to be in favour
of the Purchasers but every such party shall be subject to all
limitations and restrictions on the Purchasers set out therein.
15. FURTHER ASSURANCE
15.1 Each Vendor shall from time to time, on being required to do so by the
Purchaser now or at any time in the future do or procure that there is done
all such acts and/or execute or procure the execution of all such documents
in a form satisfactory to the Purchasers as they may reasonably consider
necessary for giving full effect to the provisions of Part 3 of the
Schedule to this Agreement and, at the cost of the Purchaser, otherwise
securing to it the full benefit of the rights, powers and remedies
conferred upon it in this Agreement, provided that nothing in this clause
shall require any Vendor to procure that any other Vendor does any act or
executes any document.
15.2 The Warrantors hereby undertake to use their reasonable endeavours to
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procure within thirty days after the Completion Date either:-
(i) that the Malaysian Company is dissolved; or
(ii) that the name of the Malaysian Company be changed to a name not
including the acronym and name BBL Products or either of them or any
combination thereof.
16. SPECIFIC INDEMNITIES
16.1 The Warrantors hereby jointly undertake to indemnify and keep
indemnified the Purchaser (for itself and as agent and/or trustee for
each Target Group Company) from and against all actions, proceedings,
losses, damages, liabilities, claims, costs and expenses whatsoever
which may be sustained or suffered by the Purchaser and/or any member
of the Target Group in respect of:-
16.1.1 the amount of the Indebtedness exceeding the amount shown in
the Final Indebtedness Statement.
16.1.2 the following claims against members of the Target Group:-
16.1.2.1 any claim arising from the failure by any member of the
Target Group to obtain planning permission or a building
warrant or landlord's consent for or relating to any
alterations carried out by any member of the Target Group to
units 2, 3, 4, 6 and ▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇.
16.1.3 any claim against any Member of the Target Group or against the
Purchaser relating in any way to the Malaysian Company or the
Venezuelan Company or any former members of the Target Group.
16.1.4 all stamp duty, penalties, costs and expenses whatsoever
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which may be sustained or suffered by the Purchaser and/or any
member of the Target Group in respect of the transfer to the
Target of the one fully paid ordinary share in BBL Australia
registered in the name of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇.
17. SECURITIES LAW MATTERS
17.1 The Vendors recognise and understand that the Weatherford Shares will
not, except as expressly provided in the Registration Rights
Agreement, be registered under the Securities Act or under the
securities laws of any other jurisdiction (the "Securities Laws") and
may not be offered or sold in the United States or to U.S persons (as
defined in Regulation S under the Securities Act) unless the
Weatherford Shares are registered under the Securities Act or an
exemption from the registration requirements of the Securities Act is
available. The ▇▇▇▇▇▇▇▇▇▇▇ Shares are not being so registered in
reliance upon exemptions from the Securities Act and the Securities
Laws which are predicated, in part, on the representations, warranties
and agreements of the Vendors contained herein.
17.2 Each Vendor represents and warrants that (i) all offers and sales of
the Weatherford Shares by such Vendor prior to the expiration of a one
year distribution compliance period shall be made only in accordance
with Regulation S under the Securities Act, pursuant to registration
of the Weatherford Shares under the Securities Act or pursuant to an
available exemption from the registration requirements of the
Securities Act, (ii) he will not engage in hedging transactions with
respect to the Weatherford Shares prior to the expiration of a one
year distribution compliance period unless in compliance with the
Securities Act and (iii) he is a non-U.S. person (as defined in
Regulation S) outside the United States (as defined in
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Regulation S) acquiring the Weatherford Shares in compliance with
Regulation S under the Securities Act (provided that no such
representation or warranty is given by any Vendor in respect of any
other Vendor).
17.3 The Vendors acknowledge that the certificates representing the
Weatherford Shares will be imprinted with the following legend, the
terms of which are specifically agreed to:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR
INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, OR THE SECURITIES LAWS OF ANY JURISDICTION, IN RELIANCE UPON
EXEMPTION FROM REGISTRATION REQUIREMENTS. WITHOUT SUCH REGISTRATION,
SUCH SHARES MAY NOT BE SOLD, PLEDGED, HYPOTHECATED OR OTHERWISE
TRANSFERRED, EXCEPT (A) UPON DELIVERY TO THE COMPANY OF AN OPINION OF
COUNSEL REASONABLY SATISFACTORY TO THE COMPANY THAT REGISTRATION IS
NOT REQUIRED FOR SUCH SALE, PLEDGE, HYPOTHECATION OR TRANSFER, (B) IN
ACCORDANCE WITH THE PROVISIONS OF REGULATION S UNDER THE SECURITIES
ACT OR (C) THE SUBMISSION TO THE COMPANY OF SUCH OTHER EVIDENCE AS MAY
BE SATISFACTORY TO THE COMPANY TO THE EFFECT THAT SUCH SALE, PLEDGE,
HYPOTHECATION OR TRANSFER SHALL NOT BE IN VIOLATION OF THE SECURITIES
ACT OF 1933 OR APPLICABLE STATE SECURITIES LAWS OR ANY RULE OR
REGULATION PROMULGATED THEREUNDER. PRIOR TO ANY TRANSFER PURSUANT TO
CLAUSE (B) ABOVE, THE HOLDER MUST FURNISH TO THE COMPANY SUCH
CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION
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AS IT MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING
MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT
TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. HEDGING
TRANSACTIONS INVOLVING THE SHARES REPRESENTED BY THIS CERTIFICATE MAY
NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE SECURITIES ACT.
Each Vendor understands, acknowledges and agrees that appropriate stop
transfer notations will be placed in the records of Weatherford and
with its transfer agents in respect of the Weatherford Shares to be
issued to the Vendors and that Weatherford will refuse to register any
transfer of the Weatherford Shares not made in accordance with
Regulation S, pursuant to registration under the Securities Act or
pursuant to an available exemption from registration. Weatherford
agrees that any Weatherford Shares sold pursuant to an effective
registration statement, including a registration statement filed
pursuant to the Registration Rights Agreement or under the Securities
Act, shall have the above legend removed to permit the closing of the
sale within three Business Days of written notice of the sale and
certification by the Vendor that the sale was made pursuant to the
plan of distribution described in the registration statement and the
prospectus delivery requirements under the Securities Act were fully
complied with in connection with the sale.
18. NOTICES
18.1 All notices, requests, demands or other communications to or upon the
parties shall be in writing and shall be given by delivery, by fax, by
overnight courier, by being sent by first class recorded mail
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posted in the United Kingdom or by e-mail:
18.1.1 in the case of the Purchasers to their respective registered
offices herein stated or to such other address in the United
Kingdom as either of them may from time to time notify to the
Vendors for such purposes;
18.1.2 in the case of the Vendors, it shall be sufficient to serve
notice on them at the addresses set out in this Agreement or to
such other address as they may from time to time notify to the
Purchaser for such purposes;
18.2 Any such notice, request, demand or communication shall:
18.2.1 if delivered personally, be deemed to have been received at the
time of such delivery or if delivery is not on a Business Day on
the Business Day following such delivery;
18.2.2 if sent by fax, be deemed to have been received the date of
transmission provided always that, in the event of a fax being
received after 5.00 p.m. local time on the date of transmission,
such fax will be deemed to have been received at 9.00 a.m. on the
Business Day next following the date of transmission;
18.2.3 if sent by overnight courier, unless it has actually been
received on the day or day after it was despatched, it will be
deemed to have been received on the second Business Day after the
date on which it is despatched;
18.2.4 if given by first class recorded mail posted in the United
Kingdom, be deemed to have been received on the second (or
fourteenth in the case of ▇▇ ▇▇▇▇▇▇) Business Day occurring after
the date of posting.
18.2.5 if sent by e-mail, be deemed to have been received on the
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date stipulated on the certificate obtained from the sender's
computer system confirming that the e-mail was sent to the
correct e-mail address, provided always that where said
certificate indicates the e-mail was sent after 5.00pm local
time, the e-mail will be deemed to have been received on the
first Business Day after the date appearing on the certificate.
18.3 All notices or communications to the Purchaser shall be clearly marked
on the exterior and on the first page "For the urgent attention of the
Company Secretary" and shall be copied to the Purchaser's Solicitors
clearly marked on the exterior and on the first page "For the urgent
attention of ▇▇▇▇▇▇▇▇ ▇▇▇▇▇".
18.4 All notices or communications to any of the Vendors or the Warrantors
shall be copied to ▇▇▇▇▇ & Williamsons, ▇ ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇
▇▇▇ and marked "For the urgent attention of ▇▇▇▇▇▇ ▇▇▇▇▇▇", and in the
case of ▇▇ ▇▇▇▇▇▇, to KPMG Legal, ▇▇▇ ▇▇▇ ▇▇▇, ▇▇▇▇ ▇▇ ▇▇▇▇ and marked
"For the urgent attention of Andre [▇▇▇▇▇▇▇]".
19. ANNOUNCEMENTS
Except as required by law or by the rules of any stock exchange or other
regulatory authority or taxation authority, whether or not having the force
of law no announcement, disclosure or circular concerning or in connection
with the existence or the subject matter of this Agreement or any ancillary
transaction shall be made or issued by or on behalf of any party hereto
without the prior written consent of the others (which consent shall not be
unreasonably withheld and which shall be given in the case of Scottish
Enterprise if made in accordance with its normal reporting and public
accounting procedures).
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20. COSTS AND EXPENSES
20.1 The parties shall each pay their own costs in connection with the
preparation and negotiation of this Agreement and in preparing and
negotiating this Agreement and any other documents referred to in this
Agreement. For the avoidance of any doubt the Purchaser shall be
responsible for payment of any stamp duty or equivalent tax or levy in
any other jurisdiction on this Agreement and on the transfers of the
Sale Shares to be effected hereunder.
20.2 The Warrantors jointly represent and undertake to the Purchaser that
no costs or expenses relating to the sale of the Sale Shares have been
incurred, assumed or borne by any Target Group Company.
20.3. The Vendors hereby jointly agree with and covenant to the Purchaser
to pay to the Purchaser forthwith upon the Purchasers' written demand
an amount equal to:-
20.3.1 any stamp duty and/or stamp duty reserve tax; and
20.3.2 any costs and expenses (including costs and expenses incurred
in the making of any application for a stamp duty exemption
(whether or not such application is successful) reasonably and
properly incurred),
in either case arising in connection with or by reference to any
transfer of shares in the Target from the Purchaser to Weatherford UK
Limited (whether such transfer occurs directly or indirectly via
transfers to or by any subsidiaries of the Purchaser) provided always
that the Purchaser undertakes to ensure (a) that, as far as is
reasonably practicable, any relevant application for stamp duty
exemption will be made in the appropriate manner, (b) that any
relevant transfer and any relevant application will be made within 12
calendar months of Completion, and (c) that any relevant transfer
shall be between companies which are associated within the meaning
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of Section 42 Finance ▇▇▇ ▇▇▇▇.
21. INVALIDITY
If at any time any provision of this Agreement is or becomes illegal,
invalid or unenforceable in any respect under the law of any jurisdiction,
that shall not affect or impair:
21.1 the legality, validity or enforceability in that jurisdiction of any
other provision of this Agreement; or
21.2 the legality, validity or enforceability under the law of any other
jurisdiction of that or any other provision of this Agreement.
22. GENERAL
Interest will run on any sums payable by the Vendors and the Purchasers
under or in connection with this Agreement at the Rate from the due date
for payment until paid.
23. ENTIRE AGREEMENT
This Agreement, the Tax Deed, the Registration Rights Agreement, the
Disclosure Letter and the other documents to be delivered at Completion in
accordance with Part 3 of the Schedule contain the entire agreement between
the parties or any of them with respect to the transactions contemplated in
this Agreement and shall (save where there has been a fraudulent
misrepresentation) supersede all prior proposals, representations,
agreements and negotiations relating thereto, whether written, oral or
implied, between the parties or any of them or their respective advisers or
any of them and no modification or alteration of this Agreement or the Tax
Deed shall be enforceable except by an amendment in writing duly executed
by all the parties hereto or, in the case of a waiver, duly executed by the
party waiving compliance.
24. GOVERNING LAW AND JURISDICTION
This Agreement and the documents to be entered into pursuant to it shall be
governed by and construed in all respects in accordance with the law of
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Scotland and each of the parties hereto hereby prorogates the non-exclusive
jurisdiction of
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the Court of Session as regards any claims or matters arising hereunder: IN
WITNESS WHEREOF these presents consisting of this and the preceding pages
together with the Schedule extending to ten Parts annexed hereto are
executed as follows:-
They are subscribed by BINNERT RUERD HAITES as undernoted:-
/s/ Binnert Ruerd Haites Witness /s/ ▇.▇. ▇▇▇▇▇
Binnert Ruerd Haites
Full Name ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
At Aberdeen
Address 11 ▇▇▇▇▇▇ St.
On 3 July 2001
Edinburgh
They are subscribed by ▇▇▇▇▇ ▇▇▇▇ as undernoted:-
/s/ ▇▇▇▇▇ ▇▇▇▇ Witness /s/ ▇.▇. ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
Full Name ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
At Aberdeen
Address 11 ▇▇▇▇▇▇ St.
On 3 July 2001
Edinburgh
They are subscribed by ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ as undernoted:-
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Witness /s/ ▇.▇. ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Full Name ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
At Aberdeen
Address 11 ▇▇▇▇▇▇ St.
On 3 July 2001
Edinburgh
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They are subscribed by BINNERT RUERD HAITES as Attorney for and on behalf
of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ as undernoted:-
/s/ Binnert Ruerd Haites Witness /s/ ▇.▇. ▇▇▇▇▇
Binnert Ruerd Haites
Attorney Full Name ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
At Aberdeen
Address 11 ▇▇▇▇▇▇ St.
On 3 July 2001
Edinburgh
They are subscribed by ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ as Attorney for and on behalf of
INTELLI INVESTMENTS LIMITED as undernoted:-
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Witness /s/ ▇.▇. ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
Attorney Full Name ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Address ▇▇ ▇▇▇▇▇▇ ▇▇.
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇ 3 July 2001
They are subscribed by ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ as undernoted:-
/s/ N.A.A. ▇▇▇▇▇▇▇ Witness /s/ ▇.▇. ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Full Name ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
At Aberdeen
Address 11 ▇▇▇▇▇▇ St.
On 3 July 2001
Edinburgh
They are subscribed for and on behalf of SCOTTISH ENTERPRISE as undernoted:-
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇ Witness /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Authorised Signatory
Full Name ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Full name (BLOCK CAPITALS) Address ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇ 3 July 2001
39
39
They are subscribed by ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ as undernoted:-
/s/ Illegible
As Attorney Witness /s/ ▇.▇. ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
Full Name ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
At Aberdeen
Address 11 ▇▇▇▇▇▇ St.
On 3 July 2001
Edinburgh
They are subscribed for and on behalf of ▇▇▇▇▇▇▇▇▇▇▇ INTERNATIONAL, INC. as
undernoted:-
/s/ ▇.▇. ▇▇▇▇▇ as attorney for
▇▇▇▇▇▇▇▇▇▇▇ International, Inc. Witness /s/ ▇.▇. ▇▇▇▇▇
Full Name ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Full name (BLOCK CAPITALS) Address ▇▇ ▇▇▇▇▇▇ ▇▇.
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇ 3 July 2001
They are subscribed for and on behalf of WEATHERFORD AUSTRALIA Pty LIMITED as
undernoted:-
/s/ ▇.▇. ▇▇▇▇▇ as attorney for
Weatherford Australia Pty Ltd. Witness /s/ ▇.▇. ▇▇▇▇▇
Full Name ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Full name (BLOCK CAPITALS) Address ▇▇ ▇▇▇▇▇▇ ▇▇.
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇ 3 July 2001
40
40
THIS IS THE SCHEDULE IN ____ PARTS
REFERRED TO IN THE FOREGOING SALE
AND PURCHASE AGREEMENT AMONG
SCOTTISH ENTERPRISE, BINNERT RUERD
HAITES AND OTHERS, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇ AUSTRALIA PTY. LIMITED
AND ▇▇▇▇▇▇▇▇▇▇▇ INTERNATIONAL, INC.
DATED ____ 2001
SCHEDULE
PART 1A
[TARGET GROUP STRUCTURE]
--------------------------------------------------------------------------------
GROUP COMPANIES % OWNED BY TARGET
--------------------------------------------------------------------------------
BBL Downhole Tools Limited 100
(of which BBL Downhole Tools Inc. is a 100% subsidiary)
--------------------------------------------------------------------------------
BBL Eastern Canada Incorporated 100
--------------------------------------------------------------------------------
BBL Australia Pty Limited 50
--------------------------------------------------------------------------------
41
41
SCHEDULE
PART 1B
THE TARGET
NAME: Brit Bit Limited
NUMBER: SC107712
DATE OF INCORPORATION: 20th November 1987
REGISTERED OFFICE: ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇ ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇
Authorised: 10% Cumulative 279,450
AUTHORISED AND ISSUED Redeemable Preference
SHARE CAPITAL: Shares - First of L1 each
- 10% Cumulative 65,700
Redeemable Preference
Shares - Second of L1 each
- Cumulative Convertible 40,000
Participating Preferred
Ordinary Shares of L1 each
- Cumulative Convertible 117,000
Participating Preferred
Ordinary Shares of L0.50 each
- Cumulative Convertible 198,000
Participating Preferred
Ordinary Shares of L0.3333 each
- Ordinary Shares of L1.00 62,500
- Ordinary Shares of L0.50 161,100
- Ordinary Shares of L0.3333 147,000
- Ordinary Shares of L0.15 1,000,000
Issued: - CRP L1 279,450
- CRSP L1 65,700
- CCPPO L1 40,000
- CCPPO 50p 117,000
- CCPPO 33.33p 198,000
- Ordinary L1 62,500
- Ordinary 50p 161,100
42
42
- Ordinary 33.33p 147,000
- Ordinary 15p [949,006]
DIRECTORS:
Binnert Ruerd ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
SECRETARY: ▇▇▇▇▇ & Williamsons
ACCOUNTING REFERENCE DATE: 31st March
AUDITORS: Acumen Accountants and Advisors Limited
CHARGES: Bond and Floating Charge in favour of Bank of
Scotland dated 2 June 1988 and registered 8 June
1988
43
43
SCHEDULE
PART 1C
SHAREHOLDINGS IN TARGET AND BBL AUSTRALIA
(1) (2) (3) (4) (5) (6) (7)
NUMBER OF
PERCENTAGE OF WEATHERFORD
SHAREHOLDER ADDRESS CLASS OF SHARE NUMBER HELD CONSIDERATION SHARES CASH
Binnert Ruerd Haites ▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇ 20,000 57.93% 218,487 0
Bieldside, CRP L1 35,000
Aberdeen Ordinary L1 44,602
▇▇▇▇ ▇▇▇ Ordinary L0.50 130,708
CCPPO L0.50 58,500
CRSP L1 57,503
Ordinary L0.3333 138,033
CCPPO L0.3333 63,000
Ordinary L0.15 666,667
▇▇▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ L0.15 94,494 4.66% 13,551 ▇▇▇,▇▇▇
▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Northill House, Ordinary L0.15 38,674 1.91% 6,935 ▇▇,▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇ 9,875 2.38% 8,990 0
Kintore, Ordinary L0.50 28,860
Inverurie, CRSP L1 7,765
Aberdeenshire Ordinary L0.3333 7,350
▇▇▇▇ ▇▇▇
Intelli Investments ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇ 8,023 0.56% 1,620 26,406
Limited Edinburgh Ordinary L0.50 1,532
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇
▇▇▇ ▇▇▇ Ordinary L0.3333 1,617
Scottish Enterprise 120 ▇▇▇▇▇▇▇▇ CCPPO L1 20,000 15.58% 45,331 738,751
Street CRP L1 214,450 ------
Glasgow CCPPO L0.50 58,500
CCPPO L0.3333 135,000
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇'▇▇▇▇ Farm CRP L1 30,000 7.82% 29,495 0
Abercrombie Downies Ordinary L0.15 149,171
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇
44
44
▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ 49 Castlecrag One Ordinary 1 9.17% 34,590 0
Drive share of 1
Kallaroo Australian Dollar
Australia in BBL Australia
45
45
SCHEDULE
PART 2A
THE UK SUBSIDIARY
NAME: BBL Downhole Tools Limited
NUMBER: SC187373
DATE OF INCORPORATION: 6 July 1998
REGISTERED OFFICE: ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇ ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇
AUTHORISED AND ISSUED Authorised: L11,111 made up by 1,111 Ordinary
Shares of L1
SHARE CAPITAL: Issued: L10,000 made up by 10,000 Ordinary
Shares of L1
DIRECTORS: ▇▇▇▇▇ ▇▇▇▇
Binnert Ruerd Haites
SECRETARY: ▇▇▇▇▇ & Williamsons
ACCOUNTING REFERENCE DATE: 31st March
AUDITORS: Acumen Accountants and Advisors Limited
CHARGES: Floating Charge in favour of Bank of Scotland dated
8 June 2000 and registered 14 June 2000.
SHAREHOLDER: 100% held by Brit Bit Limited
46
46
PART 2B
THE NON-UK SUBSIDIARIES
NAME: BBL Aust. Pty Limited
NUMBER: ▇▇▇ ▇▇▇ ▇▇▇
DATE OF INCORPORATION: 18 October 1995
REGISTERED OFFICE: ▇/▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇
AUTHORISED AND ISSUED Authorised:
100,000,000 Ordinary Shares of $1
10,000 A Class Shares of $1
10,000 B Class Shares of $1.75
10,000 C Class Shares of $1.50
10,000 D Class Shares of $1.25
10,000 E Class Shares of $1
10,000 F Class Shares of $0.75
10,000 G Class Shares of $0.50
10,000 H Class Shares of $0.25
10,000 I Class Redeemable Preference Shares of $1
SHARE CAPITAL: Issued: 2 Ordinary Shares of $1 each
DIRECTORS: ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
SECRETARY: ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
SHAREHOLDER: 1. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ in trust for
Brit Bit Limited 50%
2. ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ 50%
TAX JURISDICTION: Australia
NAME: BBL Downhole Tools Inc
NUMBER: 01590160
DATE OF INCORPORATION: 13 July 2000
REGISTERED OFFICE: ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇
AUTHORISED AND ISSUED Authorised: 1,000,000 Common Shares of $1 each
47
47
SHARE CAPITAL: Issued: 1,000 Common Shares of $1 each
DIRECTORS: ▇▇▇▇▇ ▇▇▇▇
Binnert Ruerd Haites
SECRETARY: Binnert Ruerd Haites
SHAREHOLDER: 100% held by BBL Downhole Tools Limited
TAX JURISDICTION: United States
NAME: BBL Eastern Canada Incorporated
NUMBER: 3024047
DATE OF INCORPORATION: 5 November 1998
REGISTERED OFFICE: Suite ▇▇▇▇-▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇▇
AUTHORISED AND ISSUED Authorised: 40,000 Common Shares (no nominal/par
value)
SHARE CAPITAL: Issued: 1 Common Share (no nominal/par value)
DIRECTORS: Binnert Ruerd ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
SECRETARY: ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
SHAREHOLDER: 100% held by Brit Bit Limited
TAX JURISDICTION: Canada
48
48
SCHEDULE COMPLETION OBLIGATIONS
PART 3
1. A. Scottish Enterprise and each of the Target Shareholders shall
(each for his own part only and subject to performance by the
Purchaser of its obligations under paragraph 3 below) deliver
to the Purchaser:
1.1 duly executed transfer in favour of the Purchaser of the
relevant Target Shares held by him together with the share
certificate for such Target Shares (or in the case of any lost
certificate an indemnity in the Agreed Form in relation to
it);
1.2 irrevocable powers of attorney of the Target Shareholders (but
not Scottish Enterprise) in the Agreed Form;
B. The Warrantors shall (subject to performance by the Purchaser
of its obligations under paragraph 3 below) deliver to the
Purchaser:
1.3 a counterpart of the Tax Deed duly executed by the Warrantors;
1.4 the seals, certificates of incorporation (and, if applicable,
certificates of incorporation on change of name) and statutory
books of each of the UK Companies duly written up to date;
1.5 a counterpart of the Disclosure Letter duly executed by the
Warrantors;
1.6 to the extent not already in the possession of the relevant
Target Group Company, all bank books, cheque books and bank
statements, sales ledgers, statutory books and other books of
account relating to the business of each Target Group Company
other than BBL Australia and its subsidiary;
1.7 written resignations and releases in the Agreed Form from all
directors resigning as director (but not employee) of the
Target Group Companies (other than BBL Australia and its
subsidiary) and releasing the Target Group from all claims and
rights of action whether by way of compensation, remuneration,
redundancy payment or otherwise resulting from such
resignations;
49
49
1.9 written resignations and releases in the Agreed Form from the
Vendors' Solicitors (or any other company secretary as the
case may be) resigning office as secretary of each Target
Group Company in respect of which they hold that office.
1.10 the Indebtedness Statement.
1.11 executed Forms 419a in respect of the Floating Charges.
2. Upon completion of the matters specified in paragraph 1 :-
2.1 Mr Haites shall enter into a service agreement with
Weatherford UK Limited (or any of its associated companies) in
the Agreed Form.
2.2 ▇▇ ▇▇▇▇▇▇▇ and ▇▇ ▇▇▇▇ shall into service agreements with
Weatherford UK Limited (or any of its associated companies)in
the Agreed Form.
3. Upon completion of the matters specified in paragraphs 1 and 2
Weatherford shall:
3.1 deliver to the Warrantors a counterpart of the Tax Deed duly
executed by the Purchaser;
3.2 deliver to the Vendors certified copy board minutes of the
Purchaser approving the entry into and performance of this
Agreement;
3.3 cause there to be issued to the Target Shareholders and
Scottish Enterprise the number of Weatherford Shares to which
they are entitled under the terms of this Agreement in such
name or names as may be requested in writing by the Target
Shareholders and Scottish Enterprise and shall deliver
certificates to the Vendors' Solicitors on behalf of the
Target Shareholders and Scottish Enterprise.
3.4 pay by telegraphic transfer to the Vendors' Solicitors Account
the aggregate of the cash sums set opposite the names of the
Target Shareholders and Scottish Enterprise in column 7 of
Part 1C of the Schedule.
3.5 deliver to the Vendors a counterpart of the Registration
Rights Agreement duly executed by the Purchaser .
3.6 deliver to the agreed employees letters in the Agreed Form in
terms of which the Target agrees to pay retention/stay bonuses
to the agreed employees in
50
50
an aggregate amount of L500,000.
3.7 grant to Mr Haites, ▇▇ ▇▇▇▇ and ▇▇ ▇▇▇▇▇▇▇ a total of 115,000
stock options pursuant to option agreements in the Agreed
Form.
3.8 procure that the respective Target Group Companies enter into
the service agreements referred to in paragraph 2 above.
3.9 procure that Mr Haites is unconditionally released and
discharged from the guarantee given by him in favour of the
Bank of Scotland in respect of the indebtedness of the Target
Group.
4. Upon completion of the matters specified in paragraphs 1, 2 and 3, the
Target Shareholders shall cause board meetings of each Target Group
Company other than BBL Australia and its subsidiary to be held at
which:
4.1 persons nominated by the Purchaser shall be appointed as
additional or replacement directors and/or secretaries (as the
case may be);
4.2 all existing bank mandates shall be revoked and new mandates
in relation to each account maintained by a Target Group
Company other than BBL Australia and its subsidiary (giving
authority to such persons as the Purchaser may require) shall
be approved;
4.3 the transfers referred to in paragraphs 1.1 shall (subject
only to stamping) be approved.
5. Conditional upon completion of the matters specified in paragraphs 1,
2, 3 and 4, ▇▇ ▇▇▇▇▇▇ shall (subject to performance by the Australian
Purchaser of its obligations under paragraph 7 below) deliver to the
Purchaser:
5.1 a duly executed transfer and share certificate in respect of
the Minority Interest in favour of the Australian Purchaser,
together with a waiver from the Target of any and all
pre-emption rights;
5.2 an irrevocable power of attorney of ▇▇ ▇▇▇▇▇▇ in the Agreed
Form;
5.3 to the extent not already in the possession of BBL Australia,
all bank books, cheque books and bank statements, sales
ledgers, statutory books and other books of account relating
to the business of BBL Australia and its subsidiary;
51
51
5.4 written resignations and releases in the Agreed Form from all
directors resigning as director and/or secretary (but not
employee) of BBL Australia or its subsidiary and releasing the
Target Group from all claims and rights of action whether by
way of compensation, remuneration, redundancy payment or
otherwise relating to such resignations.
6. Upon completion of the matters specified in paragraph 5, ▇▇ ▇▇▇▇▇▇
shall enter into a service agreement with the Australian Purchaser (or
any of its associated companies) in the Agreed Form.
7. Upon completion of the matters specified in paragraphs 5 and 6,
Weatherford shall:
7.1 on behalf of the Australian Purchaser cause there to be issued
to ▇▇ ▇▇▇▇▇▇ the number of Weatherford Shares to which he is
entitled under the terms of this Agreement in such name or
names as may be requested in writing by ▇▇ ▇▇▇▇▇▇ and shall
deliver certificates to the Furner Agents on behalf of ▇▇
▇▇▇▇▇▇;
7.2 on behalf of the Australian Purchaser cause there to be paid
by telegraphic transfer to the Furner Agents Account the cash
sum set opposite ▇▇ ▇▇▇▇▇▇'▇ name in column 7 of Part 1C of
the Schedule;
7.3 grant to ▇▇ ▇▇▇▇▇▇ 15,000 stock options pursuant to an option
agreement in the Agreed Form;
7.3 procure that the Australian Purchaser will enter into the
service agreement referred to in paragraph 6 above.
8. Upon completion of the matters specified in paragraphs 5, 6 and 7, the
Target Shareholders shall cause board meetings of BBL Australia and its
subsidiary to be held at which:-
8.1 persons nominated by the Australian Purchaser shall be
appointed as additional or replacement
directors and/or secretaries (as the case may be);
8.2 all existing bank mandates shall be revoked and new mandates
in relation to each account maintained by BBL Australia and
its subsidiary (giving authority to such persons as the
Purchaser may require) shall be approved;
52
52
8.3 the transfers referred to in clause 5.1 shall (subject only to
stamping) be approved.
53
53
SCHEDULE
PART 4
FORM OF INDEBTEDNESS STATEMENT
INDEBTEDNESS STATEMENT
$
INDEBTEDNESS
Bank Overdraft and Loans
(per Appendix A - Column 1)
Creditors > 60 days (1)
(per Appendix B)
Debt Factoring
Acceptance or Documentary Credits
Debentures
Loans
- ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Loan
- Diamond Europ
Loan Stocks
Bonds, Notes, Bills of Exchange
Hire Purchase Commitments
(per Appendix C)
Finance Leases
Discounted Debts
Assets Purchased on Deferred Terms
Cheques Drawn / Telegraphic Transfers
(per Appendix A - Columns 2 & 3)
[Directors Loans]
[unaccrued interest on non-bank debt]
LESS
Cash
(per Appendix E)
Cheques Received / Telegraphic Transfers
(per Appendix A - Columns 4 & 5)
WFT Debtors > 60 days
(per Appendix G)
-----------
TOTAL INDEBTEDNESS
===========
together with Appendices A to G in the Agreed Form
(1) Less Diamondeurop consignment stock
54
SCHEDULE
PART 5
WARRANTIES
PART 5A - TITLE WARRANTIES
1. CAPACITY AND TITLE WARRANTIES
1.1 Each of the Vendors is entitled to sell and transfer the full
legal and beneficial ownership in their respective Sale Shares
(which represent his entire shareholding in the Target Group)
to the Purchaser on the terms set out in this Agreement.
1.2 Each of the Vendors has the necessary power, authority and
capacity to enter into and perform this Agreement and
Agreement constitutes valid and binding obligations of each of
the Vendors in accordance with its terms.
1.3 The execution and delivery of, and the performance by the
Vendors (or any of them) of their obligations under this
Agreement will not:-
(a) result in a breach of, or constitute a default under,
any instrument to which the Vendors (or any of them)
are a party or by which the Vendors are bound; or
(b) result in a breach of any order, judgement or decree
of or undertaking to any court or Government Body to
which the Vendors (or any of them) are bound.
1.4 There is no option, right to acquire, restriction, mortgage,
charge, pledge, lien or other form of security or encumbrance
or other form of agreement (whether present, future,
conditional or otherwise) (including conversion rights and
rights of pre-emption) on, over or affecting any of the Sale
Shares or the right of the Vendors (or any of them) to
transfer their Sale Shares and there is no agreement or
commitment to give or create any of the foregoing, and no
claim has been made by any person to be entitled to any of the
foregoing.
55
55
PART 5B - GENERAL WARRANTIES
1. CAPACITY AND TITLE WARRANTIES
1.6 The Sale Shares constitute the entire issued share capital of the
Target and one-half of the issued share capital of BBL Australia.
1.7 Each of the Warrantors has the necessary power, authority and capacity
to enter into and perform the Tax Deed.
1.8 There is no option, right to acquire, restriction, mortgage, charge,
pledge, lien or other form of security or encumbrance or other form of
agreement (whether present, future, conditional or otherwise)
(including conversion rights and rights of pre-emption) on, over or
affecting any unissued shares, debentures or other securities of any of
the members of the Target Group.
1.9 The whole of the issued share capital of each Subsidiary is
beneficially and legally owned by and registered in the name of a
member of the Target Group.
1.10 The information set out in Parts 1 and 2 of the Schedule is true and
accurate in all respects.
1.11 (a) The Target is beneficially entitled to the one fully paid
ordinary share in BBL Australia, registered in the name of
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, free of any lien, charge, encumbrance
or other adverse claim or interest;
(b) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ holds the one fully paid ordinary share
in BBL Australia, registered in her name on a bare trust for
the Target and has done so since the date on which the share
was issued to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ in her name; and
(c) The Target has a presently enforceable and unconditional right
to the one fully paid ordinary share in BBL Australia,
registered in the name of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇.
2. THE ACCOUNTS
2.1 The Accounts of the UK Companies comply with the requirements
of the Companies Acts and all relevant statutory instruments,
have been prepared in accordance with applicable UK accounting
standards and give a true and
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fair view of the assets and liabilities of the Target Group at
the Accounts Date and of its results for the financial period
ending on the Accounts Date. The Accounts of BBL Australia
comply with the requirements of the Corporations Law and all
relevant statutory instruments, have been prepared in
accordance with applicable Australian accounting standards and
Corporation Regulations and give a true and fair view of the
financial position of BBL Australia at the Accounts Date and
of its performance for the financial period ending on the
Accounts Date
2.2 All redundant and obsolete stock (which expression includes
raw materials and work in progress) as at the Accounts Date
was wholly written off in the Accounts, all items of stock
which are unsaleable or which are the subject of any dispute
with a supplier or customer were written down in the Accounts
in accordance with generally accepted accounting principles
and practices; any slow-moving stock included in the Accounts
was written down appropriately; the value attributed to the
remaining stock included in the Accounts did not exceed the
lower of cost or net realisable value as at the Accounts Date;
and the stock included in the Accounts was in the aggregate
saleable in the ordinary course of trading at not less than
the value shown in the Accounts.
3. ACCOUNTING RECORDS
All the accounts, books, ledgers and other financial records of
whatsoever kind of the members of the Target Group (including, without
limitation, all invoices and other records required for any Taxation
purposes) have been properly maintained, are in the possession of the
members of the Target Group and contain reasonably accurate records of
all matters required to be entered in them by the Companies Acts (in
the case of the UK Companies) and the Corporations Law (in the case of
BBL Australia).
4. MANAGEMENT ACCOUNTS
4.1 The Management Accounts were prepared using the same
accounting principles and practices as used in the preparation
of the Accounts (such
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principles and practices being applied on a basis materially
consistent with the Accounts), have been prepared on a
consistent basis with the management accounts of the Target
Group for the twelve months ended on the Accounts Date, and
disclose with reasonable accuracy the assets and liabilities
of the Target Group as at the Management Accounts Date and of
their results of operations for the period to which the
Management Accounts relate.
4.2 Adequate provisions for all actual and contingent liabilities
which are known and all financial commitments in existence at
the Management Accounts Date have been made in the Management
Accounts, all in accordance with generally accepted accounting
principles and practices.
4.3 All revenue costs were accrued so as to match them as closely
as possible to the related income and provided in the
Management Accounts to the extent of the accrual as at the
Management Accounts Date.
5. FIXED ASSETS
The value of the fixed assets of the Target Group in the Management
Accounts was determined in accordance with the same accounting policies
as those applied in the Accounts (and on the basis that each of such
assets are valued at a figure no greater than the value attributed to
them in the Accounts or in the case of any of such assets acquired by
the members of the Target Group after the Accounts Date at a figure no
greater than the lesser of cost and net realisable value) and (other
than in respect of depreciation) is not less than their value on the
Accounts Date as shown in the Accounts.
6. TARGET GROUP STRUCTURE
6.1 Other than interests in any other member of the Target Group
the members of the Target Group do not have, have never had
and have not agreed to acquire any interest in the share or
loan capital of any body corporate.
6.2 The members of the Target Group are not and have not at any
time been and have not agreed to become partners in any
partnership or members of any
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unincorporated association or consortium and are not and have
not at any time been and have not agreed to become a party to
any joint venture or joint project or enterprise and have not
entered into any agreement or arrangement pursuant to which
they are required to share gross or net receipts, gross or net
income or any profits or gains with any other person.
6.3 The members of the Target Group are not and have not agreed to
become members, officers or shadow directors of any body
corporate and nor do they have any liability or potential
liability as former members, officers or shadow directors of
any body corporate, partnership or unincorporated association,
nor are there any circumstances which such liability could
arise.
6.4 The members of the Target Group do not have any branch, agency
or place of business or any assets outside the United Kingdom.
7. INFORMATION SUPPLIED
7.1 The acquisition of the Sale Shares by the Purchaser:-
(a) will not, so far as the Warrantors are aware cause
any of the members of the Target Group to lose the
benefit of any right or privilege it presently
enjoys or cause any person who normally does
business with any of the members of the Target
Group not to continue to do so on the same basis
as previously; and
(b) will not result in any present or future
indebtedness of any of the members of the Target
Group becoming due and payable or capable of being
declared due and payable prior to its otherwise
stated maturity; and
so far as the Warrantors are aware (having made no enquiry)
the attitude or actions of clients, customers, employees and
suppliers with regard to the members of the Target Group will
not be prejudicially affected thereby.
8. EVENTS SINCE THE MANAGEMENT ACCOUNTS DATE
Since the Management Accounts Date:-
8.1 the businesses of the members of the Target Group have been
carried on in
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the ordinary and usual course without any interruption and so
as to maintain the businesses of the members of the Target
Group as going concerns; and
8.2 there has been no adverse change in the financial or trading
position of the Target Group; and
8.3 the members of the Target Group have not acquired or disposed
of any assets or assumed or incurred any commitment or any
liabilities (whether actual or contingent) except in the
ordinary and usual course of trading; no contract, commitment,
obligation, arrangement or transaction has been entered into
and no payment has been made by any of the members of the
Target Group otherwise than in the ordinary course of carrying
on its business and on normal commercial terms; and
8.4 the members of the Target Group have not entered into any
capital transaction as vendor, purchaser, lessor or lessee or
otherwise undertaken any commitment exceeding L200,000 in
aggregate; and
8.5 no dividends, bonuses or other distributions have been
declared, paid or made and no management charges, directors
fees or similar have been paid or made by any of the members
of the Target Group; and
8.6 no share or loan capital of any of the members of the Target
Group has been issued, redeemed, purchased or repaid by the
members of the Target Group; and
8.7 there has been no change in the policy or procedures by which
any of the members of the Target Group collects its debts, no
debtor has been released by any of the members of the Target
Group on terms that he pays less than the face value of his
debt and no debt has proved to any extent irrecoverable; and
8.8 the members of the Target Group have paid their creditors in
the ordinary and usual course of their trading.
9. TITLE TO AND CONDITION OF ASSETS
9.1 All assets (which for the purposes of this and the succeeding
paragraphs of
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warranties exclude IPR) owned, held or used by the members of
the Target Group are legally and beneficially owned by the
members of the Target Group free from any mortgage, charge,
lien or other encumbrance save for the assets disclosed as
such in the DISCLOSURE LETTER as being held under an agreement
for leasing, hire, hire purchase or purchase on conditional
sale terms and all such assets are under the exclusive control
of the members of the Target Group.
9.2 No option, right to acquire, mortgage, charge, pledge, lien
(other than a lien arising by operation of law in the ordinary
course of trading) or other form of security or encumbrance or
equity on, over or affecting the whole or any part of the
undertaking or assets of any of the members of the Target
Group is outstanding and there is no agreement or commitment
to give or create any of the foregoing and no claim has been
made by any person to be entitled to any of the foregoing.
9.3 To the best of the Warrantors' knowledge and belief the
members of the Target Group have not received any sum,
property or benefit the payment or transfer of which is liable
to be avoided, or which is liable to be recovered from them,
under any rule of law and do not hold any sum, property or
right as nominee, trustee or constructive trustee.
9.4 Each member of the Target Group owns or has a contractual
right to use all of the assets used to carry on its business
in the manner in which it is currently carried on and each
member of the Target Group has a contractual right to use all
services and facilities it uses to carry on its business in
the manner in which it is currently carried on.
9.5 All assets owned or used by the members of the Target Group
which are subject to a requirement of licensing or
registration of ownership, possession or use are duly licensed
or registered in the sole names of the members of the Target
Group.
9.6 All of the assets owned or used by the members of the Target
Group are in
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the possession and control of such member and are in good and
operable condition (fair wear and tear excepted).
10. DEBTORS
10.1 No part of the amounts shown in the books or accounts of the
members of the Target Group in respect of debtors is
represented by debts which are more than three months old or
by debts arising otherwise than in the ordinary course of the
members of the Target Group's business and so far as the
Warrantors are aware there are no circumstances which indicate
that any of the debts owing to the members of the Target Group
at the date hereof and not specifically provided for in the
Management Accounts may prove to be irrecoverable.
10.2 No single debtor, taken together with any Connected Person of
that debtor, owes any of the members of the Target Group an
amount or amounts in aggregate greater than 5% of the total of
all debts owing to any of the members of the Target Group.
11. BANKING AND FINANCE
11.1 The members of the Target Group have no bank, building society
or other similar accounts other than those specified in the
DISCLOSURE LETTER and true and accurate details of those
accounts of the UK Companies at close of business on the last
banking day preceding the date hereof are set out in the
DISCLOSURE LETTER; the Non-UK Companies have no facilities to
overdraw their respective bank accounts.
11.2 Neither any of the members of the Target Group nor any other
person has given or undertaken to give any security or
guarantee for any liability of any of the members of the
Target Group other than guarantees under contracts with
customers given in the ordinary and usual course of trading by
the Target in support of other members of the Target Group.
11.3 The members of the Target Group are not responsible for the
indebtedness of any other person (not being a member of the
Target Group), and in particular
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but without prejudice to the generality of the foregoing are
not parties to any option or pre-emption right or a party to
any guarantee or suretyship or any other obligation to pay,
purchase or provide funds for the payment of any indebtedness
of any other person (not being a member of the Target Group).
12. INSURANCE
12.1 Particulars of all insurances maintained by any of the members
of the Target Group are attached to the DISCLOSURE LETTER, and
all premiums on all policies of insurance have been duly and
punctually paid.
12.2 No claims are outstanding under any of the members of the
Target Group's insurances and so far as the Warrantors are
aware, no circumstances have arisen which may give rise to any
claim under the members of the Target Group's insurances.
12.3 The members of the Target Group have not failed to disclose
any material fact to any of their insurers or done or omitted
to do any act or thing which may entitle the members of the
Target Group's insurers to avoid liability under any of the
members of the Target Group's policies of insurance or which
may render any of them void or voidable.
12.4 All the assets of the members of the Target Group of an
insurable nature are and have at all material times been
insured with reputable insurers in amounts representing their
full replacement or reinstatement value against all risks
normally insured against by prudent persons carrying on a
similar business to that carried on by the members of the
Target Group.
12.5 The members of the Target Group are and have in all material
times been adequately insured against accident, damage, third
party loss and (with the exception of loss of profits) other
risks normally insured against by prudent persons carrying on
similar businesses to that carried on by the members of the
Target Group.
12.6 Details of the claims record of the Target Group for the last
3 years are attached to the DISCLOSURE LETTER.
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13. EMPLOYEES
13.1 Save as set out in the DISCLOSURE LETTER the members of the
Target Group are not parties to any written service agreements
with any of their directors nor to any consultancy agreements
or management services agreements or arrangements with any
person nor to any contract for services to be provided to any
of the members of the Target Group.
13.2 There are no contracts of service with employees (whether or
not in writing) which cannot be terminated by the members of
the Target Group by three months' notice or less without
giving rise to any claim for damages or compensation (other
than a statutory redundancy payment or statutory compensation
for unfair dismissal) or any payment under or pursuant to
their contracts of service and the members of the Target Group
have not given or received notice of resignation from any
employees.
13.3 The schedule of employees annexed to the DISCLOSURE LETTER
contains accurate and complete particulars of each employee's
name, job description, current remuneration, age, sex, date of
commencement of continuous employment (for the purposes of the
Employment Rights Act 1996) and pension scheme membership and
save as set out in the Disclosure Letter:-
(a) there are no other employees of the Target Group
Companies;
(b) there are no terms and conditions of employment for
any employee other than the members of the Target
Group's written standard terms and conditions of
employment as annexed to the DISCLOSURE LETTER;
(c) no employee receives or is entitled (contingently or
otherwise) to receive any bonus or commission,
variable remuneration, insurance, benefit in kind,
motor vehicle for private use or other reward other
than monetary wages or salary at a fixed rate or any
participation rights in any equity of any member of
the Target Group;
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(d) so far as the Warrantors are aware no employee is a
member of any trades union or staff association;
13.4 The members of the Target Group have not offered or agreed to
increase the remuneration or benefits of or to alter any of
the terms and conditions of employment of any employee.
13.5 No employee has given notice of termination of his contract of
employment or is under notice of termination or dismissal and
no arrears of salary, wages, holiday pay or any other
liability of any kind (including, without limitation,
redundancy payments or compensation or awards under any
employment legislation or regulation or for wrongful or unfair
dismissal) in respect of any employee or former employee are
outstanding or remain to be discharged.
13.6 There are no outstanding disputes, claims or legal proceedings
between any members of the Target Group and any of the
employees or former employees of the members of the Target
Group, no such dispute is pending or threatened and there are
no circumstances which may give rise to any such dispute,
claim or proceedings.
13.7 The members of the Target Group are not involved in any
industrial or trade dispute or any dispute or negotiation with
any trade union or association of trade unions or organisation
or body of employees, and there are no circumstances likely to
give rise to any such dispute.
13.8 There is not outstanding any offer of a contract of
employment, consultancy or other contract of services from a
member of the Target Group to any person for a remuneration
(excluding benefits) in excess of L50,000 per annum.
14. CONTRACTS AND ARRANGEMENTS
14.1 The members of the Target Group are not parties to or bound by
any contracts or obligations, practices, arrangements or
agreements (hereinafter collectively referred to as
arrangements) outside the ordinary course of business.
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14.2 No event or omission has occurred or been permitted to arise
(nor will Completion constitute such an event) which would
entitle any third party to terminate prematurely any contract
to which any of the members of the Target Group are parties or
call in any money or enforce any obligation before the date on
which payment or performance would normally be due.
14.3 The members of the Target Group have complete and accurate
records in all respects of the written terms of all material
contracts to which they are parties or by which they are bound
and of all oral variations to such written terms and a list of
all such material contracts is attached to the Disclosure
Letter.
14.4 The terms of all contracts of the members of the Target Group
have been complied with by the members of the Target Group and
so far as the Warrantors are aware there are no circumstances
likely to give rise to a default by the members of the Target
Group or by the other parties under any such contract.
14.5 There are no outstanding claims against any of the members of
the Target Group on the part of customers or other parties in
respect of defects in quality or delays in delivery or
completion of contracts or deficiencies of design or
performance or otherwise relating to liability for goods or
services sold or supplied by any of the members of the Target
Group and so far as the Warrantors are aware no such claims
have been threatened or are anticipated and there is no matter
or fact in existence in relation to goods or services
currently sold or supplied by any of the members of the Target
Group which might give rise to the same.
14.6 The members of the Target Group have no knowledge of the
invalidity of or grounds for rescission, avoidance or
repudiation of any agreement or other transaction to which any
of the members of the Target Group is a party and have
received no written notice of any intention to terminate,
repudiate or disclaim any such agreement or other transaction.
14.7 No members of the Target Group are parties to nor bound by any
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arrangements of a long term nature being those which cannot be
terminated by the relevant member of the Target Group on three
months notice or less.
14.8 No members of the Target Group are party to any arrangements
for the purchase by a member of the Target Group of any fixed
assets which arrangements remain outstanding as at the
Completion Date.
14.9 There are no arrangements between a member of the Target Group
and any of the Vendors or any Connected Person of any of the
Vendors.
14.10 No member of the Target Group is a party to an oral agreement
other than one entered into in the ordinary course of
business.
15. COMPETITION AND FAIR TRADING
15.1 None of the acts, omissions, practices, agreements or
arrangements of any Target Group Company:-
(a) has infringed or infringes in any material respect
any law, legislation or regulation (civil or
criminal) relating to competition, restrictive trade
practices, anti-trust, monopolies, merger control,
fair trading or restraint of trade in any part of the
world ("Competition Law") or may result in action
being taken by any supra-national, governmental or
quasi-governmental body or court;
(b) has been or should be or should have been registered
with or notified to any supra-national, governmental
or quasi-governmental body or court under Competition
Law or liable to result in action by any
supra-national, governmental or quasi-governmental
body or court as a result of failure to register or
notify;
(c) so far as the Warrantors are aware, is or has been
the subject of any investigation, inquiry,
proceedings, report or reference under Competition
Law and there are no facts known to the Warrantors
which are likely to give rise to any of the
foregoing;
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(d) is void or unenforceable in whole or in any material
respect by reason of Competition Law.
15.2 There is no undertaking or assurance given to any body or
court which is binding on Target Group Company relating to any
of the matters listed in paragraph (a) of the preceding
warranty nor has such undertaking or assurance been requested
and Group Company has not breached and is not in breach of any
such undertaking or assurance.
15.3 There is no act, notice, decision or order of any body or
court which is binding on Target Group Company (other than
public general legislation) relating to Competition Law and
Target Group Company has not breached in any material respect
and is not in any material respect in breach of any such act,
notice, decision or order.
15.4 The entering into and implementation of this Agreement is not
a breach by any Target Group Company of or in relation to any
Target Group Company prohibited by or likely to result in
action by any body or court against any Target Group Company
in relation to Competition Law.
16. GRANTS
No grants, subsidies and allowances have been applied for or received
by any of the members of the Target Group from the European Communities
or any governmental, quasi-governmental or other body (save for any of
which full particulars are disclosed in the DISCLOSURE LETTER) and
there are no grounds upon which any such grant, subsidy or allowance or
any part thereof could be liable to be repaid or recovered whether by
reason of completion of this Agreement or otherwise.
17. INSIDER MATTERS
17.1 There is no contract, arrangement or understanding to which
any of the members of the Target Group is a party or by which
it is bound which is not on normal commercial terms.
17.2 The financial position of the members of the Target Group and
their results as appearing from the Accounts or the Management
Accounts were not affected
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by any transaction, contract or arrangement not on normal
commercial terms.
17.3 Neither the Warrantors nor any Connected Persons of the
Warrantors, either individually or collectively, or with any
other person or persons, have any estate, right or interest,
directly or indirectly, in any business which is or is likely
to be or become competitive with the business of any of the
members of the Target Group or any part thereof as carried on
at the Completion Date.
18. LICENCES AND CONSENTS
No licences, consents, permissions or approvals from any governmental
or quasi-governmental bodies or courts other than those which are
disclosed in the DISCLOSURE LETTER are held or are required to hold the
assets of the members of the Target Group or for the proper and
effective carrying on of their businesses and all reports, returns and
information required by law or as a condition of any licence, consent,
permission or approval have been given or made to the appropriate
person or authority and all appropriate fees paid and there is no
circumstance known to the Warrantors (whether arising from the
acquisition of the Sale Shares by the Purchaser or otherwise) which
indicates that any licence, consent, permission or approval is likely
to be suspended, cancelled or revoked or not renewed on expiry.
19. LEGAL REQUIREMENTS
19.1 The members of the Target Group have at all times performed
and observed all requirements of all applicable laws,
statutes, statutory instruments, regulations, orders,
contracts, agreements, licences or obligations of whatsoever
nature which affect any of the members of the Target Group or
the operation of any of the members of the Target Group's
business.
19.2 So far as the Warrantors are aware no member of the Target
Group nor any Employee or former employee or any officer or
former officer of any member of the Target Group has made or
received any sensitive payment.
For the purposes of this Warranty the expression "sensitive
payment" shall include (i) receipts from, or payment to,
central or local government officials or employees or (ii)
commercial bribes or (iii) amounts received with an
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understanding that rebates or refunds will be made in
contravention of the laws of any jurisdiction either directly
or through a third party, or (iv) political contributions.
20. LITIGATION AND DEFAULTS
The members of the Target Group are not subject to any outstanding
judgements, orders or decrees of any court or any undertaking to any
court, judicial authority or supra-national, governmental or
quasi-governmental body or any outstanding arbitration award; no
injunction or interdict has been granted against any of the members of
the Target Group; there are no civil, criminal or arbitration
proceedings in progress or pending against any of the members of the
Target Group or against any person for whose acts or defaults the
members of the Target Group is or may be vicariously liable and there
are no facts known to the Warrantors likely to give rise to any such
proceedings.
21. INSOLVENCY
21.1 No order has been made or petition presented or resolution
passed for the winding-up or administration of any of the
members of the Target Group, nor are there any grounds on
which any person would be entitled to have any of the members
of the Target Group wound up or placed in administration, nor
has any person threatened to present such a petition or
convened or threatened to convene a meeting of any of the
members of the Target Group to consider a resolution to wind
up any member of the Target Group or any other resolutions,
nor has any step been taken in relation to any of the members
of the Target Group under the law relating to insolvency or
the relief of debtors in any part of the world.
21.2 No diligence, distress, execution or other process has been
used or levied on any asset owned or used by any of the
members of the Target Group, nor (so far as the Warrantors are
aware) has any person threatened any such diligence, distress,
execution or other process.
21.3 No person has appointed or (so far as the Warrantors are
aware) threatened
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to appoint or become entitled to appoint an administrative or
other receiver of any of the members of the Target Group's
business or assets or any part of them.
21.4 The members of the Target Group are not apparently insolvent
and have not ceased trading or stopped payment to their
creditors and there are no grounds on which any of the members
of the Target Group could be found to be unable to pay its
debts for the purposes of section 123 of the Insolvency ▇▇▇
▇▇▇▇.
22. CUSTOMERS AND SUPPLIERS
22.1 No substantial customer, sub contractor or supplier of any of
the members of the Target Group has in the one year ended on
the date of this Agreement ceased or indicated an intention to
cease trading or dealing with, utilising the services of or
supplying any of the members of the Target Group and there are
no facts known to the Warrantors which are likely to make any
such loss imminent nor so far as the Warrantors are aware is
any substantial customer, sub contractor or supplier expected
to make any substantial reduction in trading or dealing with,
utilising the services of or making supplies to any of the
members of the Target Group after the date of this Agreement
(for which purposes a customer shall be deemed substantial if
in any year in the three years ended on the Accounts Date it
has purchased five per cent or more in value of the services
provided by the Target Group in that year or bought five per
cent or more in value of the goods supplied by the Target
Group in that year and a supplier shall be deemed substantial
if in any year in the two financial years ended on the
Accounts Date it has supplied five per cent or more of the
goods or services purchased by the Target Group in that year).
22.2 There is included in the Disclosure Letter a list of the ten
largest customers of the Target Group showing the turnover
attributable to such customers during the eleven month period
ending on the Management Accounts Date.
23. VENEZUELAN COMPANY
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The value of the assets of the Venezuelan Company does not exceed the
liabilities of the Venezuelan Company.
24. MALAYSIAN COMPANY
The Malaysian Company has never traded and has not and has never had
any assets or any rights to receive or obtain any assets.
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PART 5C - PENSION WARRANTIES
1. PENSIONS
Apart from the Pension Scheme and the Life Scheme, the Target Group
does not contribute to or participate in and is not in any way
responsible for any retirement benefits, pension or life assurance
scheme or arrangement within the meaning of s612 of the 1988 Act, fund
or personal pension scheme whether in the United Kingdom or overseas
relating to any of its present or past directors or Employees and save
as aforesaid no Target Group Company is under any legal or ex gratia
obligation to provide a retirement, death or disability, accident or
sickness pension or payments to or in respect of any such director or
Employee or person claiming through them. No proposal has been
announced or implied to establish or contribute to any other such
scheme or fund.
2. DISCLOSURE OF INFORMATION
2.1 All relevant particulars of the Pension Scheme and the Life
Scheme have been disclosed, including without prejudice to the
generality of the foregoing:-
2.1.1 all trust documentation or insurance policy
documentation, all booklets and announcements made to
members, endorsements, details of insurance premiums
and a complete list of the membership of the Life
Scheme;
2.1.2 full membership data including details of eligibility
criteria for membership.
2.1.3 rates of contribution by the Target Group and
Employees;
2.2 all of this information which has been made available to the
Purchaser or its advisers is true in all material respects,
and accurately describes benefits provided and the costs of
such benefits to the Target Group.
3. ESTABLISHMENT
3.1 The Life Scheme is established under irrevocable trust and the
Life Scheme and the Pension Scheme comply and have at all
times complied with all applicable primary and secondary
legislation relative to occupational and
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personal pension schemes including the 1993 Act, the 1995 Act
and the Financial Services ▇▇▇ ▇▇▇▇.
3.2 The Life Scheme is an exempt approved scheme under Chapter I
of Part XIV of the 1998 Act for the purposes of the PSO and
there is no reason why such approval should be withdrawn. The
Pension Scheme is approved under Chapter IV of Part XIV of the
1988 Act.
3.3 A PSO letter of approval of the Pension Scheme is held by the
trustees of the Pension Scheme who are Scottish Equitable Life
Assurance Society and no event or transaction has taken place
in relation to the Pension Scheme whose validity is dependent
on the approval of the PSO without that approval having been
obtained.
3.4 The Pension Scheme is not contracted out of the state earnings
related pension scheme although members may elect to contract
out on an individual basis.
4. FINANCE AND INVESTMENT
4.1 The trustees of the Life Scheme have legal title to and
physical possession of or control over all of the assets of
the Life Scheme. There are no encumbrances over any of the
assets of the Life Scheme.
4.2 All employer and Employee contributions and premiums due at
the date of this Agreement to the trustees of the Pension
Scheme or any insurance company have been deducted and paid to
the trustees (or insurance company, if applicable) within the
prescribed period under the ▇▇▇▇ ▇▇▇.
4.3 There are no loans in existence from the Life Scheme to any
Target Group Company or to any Member or beneficiaries of the
Life Scheme or to any third party and as at the date of this
Agreement none of the assets of the Life Scheme is an employer
related investment within the meaning of section 40 of the
▇▇▇▇ ▇▇▇.
4.4 Apart from lump sum benefits on death in service, benefits
quantified by reference to a level of pay are not and have
never been provided by or
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promised through the Pension Scheme.
4.5 Each participating employer of the Life Scheme has been party
to a valid Deed of Adherence which has at all times been
complied with in all material respects and its participation
the Life Scheme has been approved by the PSO.
5. EXERCISE OF DISCRETION
5.1 Apart from as disclosed neither the Target Group, the
Warrantors or the Life Scheme's trustees have given
undertakings or assurances to the Members beneficiaries under
the Life Scheme or Employees as to the introduction,
continuance, increase or improvement of any retirement, death
or disability benefits or as to the announcement of any
benefit on the happening of a given set of circumstances.
5.2 No discretion has been exercised under the Pension Scheme or
Life Scheme to provide a benefit which would not otherwise
already be provided for under the Pension Scheme or Life
Scheme, to waive any standard eligibility conditions, to
augment or provide new benefits or to refuse admission to an
Employee or director who would otherwise be eligible to join
the Pension Scheme or Life Scheme or to alter the payment of
expenses or contributions by any Target Group Company.
5.3 Neither employees of the Target Group who have been made
redundant nor officers of the Target Group who have been
removed from office are, or have been, routinely treated more
favourably under the Pension Scheme than other members.
6. DEATH BENEFITS
6.1 Any benefits payable on the death of a Member whilst in
employment (other than a return of Member's own contributions)
or during a period of sickness or disability are fully
insured, all premiums due to the insurance company have been
paid and each Member or other beneficiary has been covered for
such benefits by an insurance company of repute at normal
rates and on normal terms for persons in good health. So far
as the Warrantors are aware,
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having made enquiry of the trustees or administrators of the
Pension or Life Schemes, nothing has been done or left undone
which might entitle the insurance company to avoid or limit
its liability under any contract covering these benefits. The
Warrantors have given the Purchaser full details of the
current premiums for this insurance, and copies of the
insurance contracts.
7. DISCRIMINATION
7.1 The Pension Scheme and the Life Scheme do not and have never
been operated in such a way as to directly or indirectly
discriminate between:-
7.1.1 male and female Employees as regards eligibility, the
rates of contribution and the amounts of any benefits
provided or the dates on or from which the benefits
are to be or may be provided in any way which is
contrary to Article 141 of the Treaty of Rome or any
corresponding domestic legislation;
7.1.2 all other Employees in any other unlawful
discriminatory manner as regards eligibility, rates
of contributions and the amounts of any benefits
provided or the dates on or from which the benefits
are to be or may be provided.
8. EXTERNAL ADVISERS
8.1 All consulting, actuarial, trusteeship and other fees, charges
and expenses of whatever nature with respect to the Pension
Scheme and Life Scheme have been paid and no services have
been rendered for which an account or invoice has not been
delivered to and paid by the Target Group. All costs, charges
and expenses are met from the assets of the Pension Scheme and
Life Scheme.
9. DISPUTES
9.1 Apart from routine benefit claims, there are no pending claims
for incapacity or ill health pensions and there are no current
disputes concerning such benefits, no disputes relating to
access or benefits provided by the Pension Scheme or Life
Scheme and no complaints under the trustees' internal dispute
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resolution procedure, arbitrations, claims to OPAS, pensions
ombudsman complaints, complaints to OPRA, or claims or
litigation in progress, pending or threatened by any of the
Members, beneficiaries of the Pension Scheme or Life Scheme or
Employees and there are no facts or circumstances likely to
give rise to any such proceedings.
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PART 5D - PROPERTY AND ENVIRONMENTAL WARRANTIES
1.1 The Properties comprise all land and buildings occupied or used by
Target Group or in which any member of Target Group has an interest in
the United Kingdom.
1.2 Target Group is in sole occupation of the Properties and it has not
granted any lease, licence, concession or any other arrangement whereby
a third party has been given or is entitled to occupation of the
Properties.
1.3 The Properties are held free of all fixed or floating charges or other
securities. Target Group has not agreed to dispose of the Properties or
any part thereof or interest therein and has not agreed to acquire the
whole or any part of any other land or buildings or any interest
(including as tenant or licensee), option, right or right of
preemption in any other land.
1.4 Target Group has, throughout the period of its ownership or tenancy of
the Properties, had vacant and undisputed possession of the Properties
and there are no circumstances which would entitle a superior, landlord
or other person to exercise any right of irritancy or forfeiture or
which would otherwise restrict or terminate the continuing sole and
exclusive possession or occupation of the Properties by Target Group.
1.5 Target Group has not at any time (i) been party to any lease or licence
relating to any land in relation to where there are any outstanding
obligations incumbent on Target Group, save for the leases of the
Properties or (ii) acted as a guarantor in relation to any lease or
licence in relation to which there are any outstanding obligations
guaranteed by Target Group.
1.6 There are no outgoings payable in respect of the Properties other than
the usual local authority rates or equivalent local tax rent, insurance
premiums and service charge all of which have been paid to date.
1.7 There are no outstanding or, so far as the Warrantors are aware no
impending actions, disputes, claims or demands between Target Group and
any third party affecting the Properties or any neighbouring property.
1.8 So far as the Warrantors are aware all statutes, orders and regulations
affecting the
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Properties, the use of of any fixtures, machinery or moveables in it
have been observed to date and there are no outstanding or impending
requirements or recommendations of any competent authority in relation
to such statutes, orders or regulations.
1.9 There are no disputes with any adjoining or neighbouring owners or
occupiers with respect to boundary walls and fences or with respect to
servitudes, rights or means of access to the Properties.
1.10 There are no outstanding defects liability periods under any building
contracts relating to the Properties and there are no outstanding or
contemplated actions, proceedings, costs, claims, damages or losses
arising under any such building contracts or any other professional
appointments or warranties or guarantees relating to any building
development in which Target Group has an interest.
1.11 The particulars of the Properties as detailed in Part 7A of the
Schedule are true, complete and accurate in all respects.
2.1 No application for landlords' consent or approval has been refused or
is outstanding.
2.2 No rent review under the Lease Documentation has been agreed or
determined otherwise than on the basis of open market value. No rent
reviews are outstanding.
2.3 So far as required under the Lease Documentation landlords' consent has
been granted in respect of each alteration, improvement or extension of
the Properties.
2.4 Target Group has complied with all material obligations and covenants
of the tenants under the Lease Documentation and neither Target Group
or the Warrantors are aware of any breach of any obligations or
covenants of the landlords under the Lease Documentation. There is no
dispute between the landlords and the tenants in respect of any of the
Properties.
2.5 The Lease Documentation comprises all of the documentation affecting or
relating to the tenants' interest in the Properties and the Lease
Documentation has not been amended, varied or supplemented, either
formally or informally.
2.6 The respective landlords of the Properties had the power and authority
to enter into the Lease Documentation. Target Group has not entered
into any contract to, nor
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granted or entered into any assignation or surrender in respect of the
Properties.
3.1 Target Group has a good and marketable title to each of the Properties
whether as heritable/freehold proprietor or as tenant.
3.2 No deeds which are capable of being recorded in the Register of Sasines
or given effect in the Land Register of Scotland or HM Land Registry
(or in any equivalent title registry in any other jurisdiction) and no
fixed or floating charge, debenture or other security document in
respect of or affecting the Properties have been granted by Target
Group.
3.3 There are no overriding interests as defined in the Land ▇▇▇▇▇▇▇▇▇▇▇▇
(▇▇▇▇▇▇▇▇) ▇▇▇ ▇▇▇▇ or the Land Registration Act 1925 or equivalent
interest in any other jurisdiction affecting the Properties.
3.4 The Properties are not held on trust for any other party.
4. PLANNING LEGISLATION AND BUILDING CONTROL
4.1 So far as the Warrantors are aware the existing use of the Properties
is the permitted use under the Town and Country Planning legislation of
the relevant jurisdiction and any regulations, orders, consents or
permissions made or given thereunder. So far as the Warrantors are
aware there are no planning conditions which restrict or affect the
permitted use or which are onerous, personal, unusual or limited in
time.
4.2 So far as the Warrantors are aware all development as defined in the
Town and Country Planning legislation of the relevant jurisdiction
carried out on the Properties has been in accordance with the Town and
Country Planning legislation in question and any regulations, orders,
consents or permissions made or given thereunder and there are no
conditions in relation to such development which have still to be
implemented or are of a continuing nature.
4.3 So far as the Warrantors are aware there is no outstanding monetary
claim or liability in respect of the Properties under the Town and
Country Planning legislation of the relevant jurisdiction or otherwise.
4.4 No planning permission in respect of the Properties has been revoked
and there is no application for planning permission awaiting
determination. No planning decision or
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deemed refusal is subject to appeal.
4.5 So far as the Warrantors are aware there is no agreement affecting the
Properties under Section 75 of the Town and Country ▇▇▇▇▇▇▇▇ (▇▇▇▇▇▇▇▇)
▇▇▇ ▇▇▇▇ or under any legislation of similar nature in any jurisdiction
nor any agreement to create the same.
4.6 So far as the Warrantors are aware all buildings and works on or
comprising part of the Properties have been erected or carried out in
accordance with the Building (Scotland) Acts or where applicable in
accordance with equivalent legislation of the relevant jurisdiction and
all necessary statutory consents have been obtained, and Completion
Certificates or equivalent certification of the relevant jurisdiction
have been issued by the local authority in relation to all such
buildings and works.
5. MINERALS
So far as the Warrantors are aware none of the Properties is located
within an area which is or has been affected by any mineral workings.
The Warrantors are not aware of any proposals to undermine the
Properties or any neighbouring or adjacent property.
6. CONDITION OF PROPERTIES
6.1 There are no outstanding liabilities in respect of the maintenance,
repair, rebuilding or renewal of the Properties or any property common
to the Properties and other properties which have been notified to
Target Group, nor are any such works proposed by Target Group.
7. FIRE REGULATIONS
So far as the Warrantors are aware the Properties comply with the
relevant fire precautions legislation and any Fire Certificates (or
equivalent certification in the relevant jurisdiction) necessary for
the occupation of the Properties have been obtained and complied with
in all respects. No Fire Certificate (or equivalent certification in
the relevant jurisdiction) contains any unusual or unduly onerous
conditions. So far as the Warrantors are aware there are no outstanding
requirements at the instance of the fire authority.
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8. INSURANCE
8.1 So far as the Warrantors are aware there are no special or unusual
terms or restrictions and the premiums payable are not in excess of the
normal rates payable for comparable property in which there is carried
on a business similar to that carried on from the Properties.
9. ENVIRONMENTAL MATTERS
9.1 The business and operation of Target Group does not breach any
applicable Environmental Law and/or any condition of or arising out of
the giving of any applicable Environmental Licence in effect as of the
date of this warranty and no Event has occurred which constitutes a
breach of any such Environmental Law or Environmental Licence.
9.2 No Hazardous Substance has been used, disposed of, generated, stored,
transported, dumped, released, deposited, spilled, burned or emitted
at, on, from or under any of the Properties in circumstances where this
might result in a liability on Target Group.
9.3 Neither Target Group nor the Warrantors have received any notice
advising them, or other information indicating that any of the
Properties or the activities of Target Group or any of its respective
predecessors is in breach of any applicable Environmental Law or any
applicable Environmental Licence or that Target Group is responsible
(or potentially responsible) for the clearance, treatment or disposal
of any Hazardous Substances at, on, or beneath the Properties or at,
on, or beneath any land adjacent thereto.
9.4 None of the Properties has been designated as contaminated land or a
special site under Part IIA of the Environmental Protection Act 1990 or
has or will be subject to an equivalent designation under any
applicable Environmental Law and neither the Target Group nor the
Warrantors have received notice of any such designation.
9.5 Neither Target Group nor the Warrantors have not received any notice or
complaint from any person relating to the Properties or their ownership
or occupation or the conduct of the business of Target Group in
relation to waste noise, vibration, smell, fumes, smoke, soot, ash,
dust, grit, pollution, chemicals, leachate, groundwater or any
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noxious, radioactive, inflammable, explosive, dangerous or offensive
gases or substances.
9.6 No prosecutions have been brought against the Target Group or the
Warrantors under any Environmental Law with regard to the Properties or
the use of the Properties.
9.7 No works have been carried out on the Properties under any
Environmental Law by any statutory authority in respect of which such
authority is entitled to recover costs for Target Group.
9.8 None of the Properties is:-
9.8.1 within 250 metres of a landfill site;
9.8.2 within an area regarded as a hazard area requiring the
approval of the Health and Safety Executive of any development
proposal thereon; or
9.8.3 within a litter control area.
10. NON-UK PROPERTIES
10.1 The Non-UK Properties comprise all the properties owned, leased,
occupied or otherwise used by the Target Group outwith the United
Kingdom in connection with its business.
10.2 The information contained in Part 7B of the Schedule as to the tenure
of each of the non-UK Properties is accurate in all material respects.
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PART 5E - INTELLECTUAL PROPERTY WARRANTIES
1. GENERAL
1.1 So far as the Warrantors are aware (having made no
enquiry other than of the Target Group's patent
agent) the Target Group is the owner or lawful
licensee of or is otherwise entitled to use all IPR
that is used to a material extent by the Target Group
in the Business in the ordinary course of business
immediately prior to Completion.
2. REGISTERED IPR
2.1 All the IPR which the Target Group owns and which is
registered or is the subject of an application for
registration anywhere in the world is listed in Part 8 of the
Schedule. The details shown in the said Part 8 of the
Schedule, including the registered proprietor's/applicant's
name, are true and accurate.
2.2 The Warrantors are not aware (having made no enquiry other
than of the Target Group's patent agent) of any prior art
except as disclosed in the Disclosure Letter and/or the
Disclosure Bundle that would materially affect the scope of
coverage of the pending claims in the applications to register
IPR listed in Part 8 of the Schedule.
2.3 All fees payable for applications for registered IPR listed in
Part 8 of the Schedule which are due and payable up to the
Completion Date have been paid in full.
2.4 There are no facts or circumstances known to the Warrantors
(having made no enquiry other than of the Target Group's
patent agent) which could form the basis of a claim that any
part of the registered IPR (excluding for the avoidance of
doubt, applications) owned by the Target Group should be
revoked, invalidated or rendered unenforceable.
3. COMPANY INTELLECTUAL PROPERTY
All of the Target Group Intellectual Property is owned by the Target
Group free and
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clear of all pledges, securities, interests, mortgages, charges, liens
and other encumbrances.
4. INFRINGEMENT/CHALLENGE
4.1 No Target Group Company has received any notification that
carrying on the Business and using the Target Group
Intellectual Property in the Business in the manner carried on
or used by the Target Group immediately prior to Completion
infringes or breaches or misuses any third party's IPR or the
moral rights (as defined in Chapter IV Part I of the Copyright
Designs and Patents Act 1988) of any third party or
constitutes a breach of confidence or unfair competition
rights or passing off and, as far as the Warrantors are aware,
no proceedings of any kind, in that regard have been commenced
or are threatened against any member of the Target Group.
4.2 So far as the Warrantors are aware, none of the Target Group
Intellectual Property or the IPR licensed to it, is the
subject of any current or threatened claim or opposition or
proceedings in relation to its validity or enforceability or
as to the Target Group's rights of ownership thereto (whether
such claims are by employees, ex-employees or other third
parties).
4.3 So far as the Warrantors are aware, no third party is
infringing, breaching, or using without authorisation or
threatening to infringe or use without authorisation any of
the Target Group Intellectual Property, nor has the Target
Group made a claim or raised proceedings of any kind against
any third party for breach or infringement of IPR or breach of
confidence or unfair competition rights or passing off which
claim or proceedings have not been settled/withdrawn.
4.4 No member of the Target Group has made or raised or is
involved in any oppositions, claims or proceedings challenging
the rights of any third party to obtain registration of any
IPR or the entitlement of any third party to any registered
IPR or the validity or enforceability of any IPR registered in
the name of a third party.
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4.5 So far as the Warrantors are aware there are no moral rights
as set out in Chapter IV, Part I of the Copyright, Designs and
Patents ▇▇▇ ▇▇▇▇ capable of being asserted, which if asserted
could materially affect the use or value of any of the Target
Group Intellectual Property.
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PART 5F - TAX WARRANTIES
1. RETURNS AND DISPUTES
1.1 (a) All returns, computations, accounts, notices,
statements, reports, registrations and information
which has been or should have been made or given by
or in respect of any Target Group Company for any
Taxation purpose (i) have been made or given within
the requisite periods and on a proper basis and are
complete, up-to-date and are true and accurate and
(ii) none of them is, or so far as the Warrantors are
aware, might be, the subject of any dispute with any
Taxation Authority or give rise to any liability to
Taxation not provided for in the Accounts in respect
of any accounting period ending on or before the
Accounts Date.
(b) In all corporation tax returns and computations
submitted by or on behalf of any Target Group Company
to any Taxation Authority in respect of any
accounting period ending on or after 1 October 1994
proper adjustments have been made for all expenditure
which is disallowable (including any expenditure
which is disallowable by reason of section 577 or
577A of the TA 1988).
1.2 (a) There is no existing dispute between any Target Group
Company and any Taxation Authority and so far as the
Warrantors are aware there are no circumstances
likely to give rise to any such dispute.
(b) No assessments (whether estimated assessments or
otherwise) or determinations are under discussion, or
are a matter of dispute, with any Taxation Authority
or are the subject of any appeal.
(c) No Taxation Authority has at any time carried out or
is at present conducting any review, audit,
investigation or enquiry into the
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business or affairs of any Target Group Company (or
any aspect thereof) and no Target Group Company has
received any indication that, and the Warrantors,
having made all reasonable enquiries, knows of no
reason why, any such review, audit or investigation
or enquiry is to be or may be initiated by any
Taxation Authority.
2. CLEARANCE AND CONSENTS
2.1 No Transaction other than Completion under this Agreement has
been effected in the seven years ending on the date of this
Agreement by any Target Group Company in respect of which any
consent or clearance from any Taxation Authority was required
or was sought (i) without such consent or clearance having
been validly obtained before the Transaction was effected and
(ii) otherwise than in accordance with the terms of and so as
to satisfy any conditions attached to the relevant consent or
clearance, and (iii) otherwise than at a time when and in
circumstances in which the relevant consent or clearance was
valid and effective.
2.2 Full details of any consent or clearance sought in respect of
Completion are set out in the Disclosure Letter together with
copies of all correspondence with any Taxation Authority in
respect thereof.
2.3 All particulars furnished to the relevant Taxation Authority
in connection with the application for any consent or
clearance by or on behalf of any Target Group Company fully
and accurately disclosed all facts and circumstances material
to the decision of the relevant Taxation Authority.
2.4 To the best of the Warrantors' knowledge, information and
belief there are no circumstances that have arisen since any
application for any such consent or clearance was made which
might reasonably be expected to cause such consent or
clearance to be or become invalid or to be withdrawn by the
Taxation Authority concerned.
2.5 All clearances and consents obtained by any Target Group
Company from
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any Taxation Authority together with the relevant application
are attached to the Disclosure Letter.
3. TAXATION AGREEMENTS AND CONCESSIONS
3.1 The amount of Taxation chargeable on each Target Group Company
or for which any Target Group Company has become accountable
during or for any accounting period ended on or within seven
years before the Accounts Date has not depended on any
concession or other formal or informal agreement or
arrangement with any Taxation Authority.
3.2 The Disclosure Letter sets out full particulars of any
agreement, arrangement or election between each Target Group
Company and any Taxation Authority pursuant to which any
Target Group Company is authorised not to comply with what but
for such agreement or arrangement would be its statutory
obligations or whereby, it is assessed or accountable for
Taxation other than in accordance with the strict terms of the
relevant legislation or the published practice of the relevant
Taxation Authority.
3.3 No Target Group Company has taken any action which has had, or
will have, the result of altering, prejudicing or in any way
disturbing any arrangement or agreement which any Target Group
Company has previously had with any Taxation Authority.
3.4 No Target Group Company is or has at any time been a party to
a special arrangement as is referred to in Inland Revenue
Statement of Practice SP10/93 dated 8 October 1993.
4. POSSESSION OF INFORMATION
Each Target Group Company has in its possession or control sufficient
records to enable it to determine the Taxation consequences for it of
any Transaction or event entered into or occurring on or in the 7 years
before Completion.
5. PAYMENT OF AND LIABILITIES FOR TAXATION AND PENALTIES ETC.
5.1 Each Target Group Company has paid all Taxation which has
become due and payable by it and all Taxation which it may
become liable to pay has
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been provided for in the Accounts or in its management
accounts.
5.2 Since the Accounts Date:-
(a) no Target Group Company has been involved in any
Transaction which has or could give rise to a
liability to Taxation (or would have given or might
give rise to such a liability but for the
availability of any Relief) other than Taxation in
respect of normal trading income or receipts of such
Target Group Company arising from Transactions
entered into by it in the ordinary course of its
business;
(b) no Target Group Company has entered into any
transaction which will or may (disregarding any
statutory right to make any election or claim and any
allowance and any relief other than one available
under Section 38 TCGA) give rise to a liability to
corporation tax on chargeable gains or to any
balancing charge.
5.3 Since the Accounts Date no Target Group Company has, nor has
any director or officer on behalf of any Target Group Company,
paid or become liable to pay, any fine, penalty or interest
charged by virtue of the Taxes Management ▇▇▇ ▇▇▇▇ or the VATA
or any other statutory provision, order or regulation relating
to Taxation.
6. ADEQUACY OF PROVISION FOR TAXATION
6.1 The provision or reserve for Taxation included in the Accounts
is sufficient to cover:-
(a) all Taxation for which each Target Group Company was
liable or accountable at the Accounts Date; and
(b) all Taxation for which each Target Group Company may
after the Accounts Date become or have become liable
or accountable including, without prejudice to the
generality of the foregoing, all Taxation:-
(i) on or in respect of or by reference to
profits, gains or
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income earned, accrued, received or realised
or deemed for Taxation purposes to have been
earned, accrued, received or realised for or
in any period ended on or before the
Accounts Date; or
(ii) any Transaction effected entered into or
occurring or deemed to have been effected or
entered into or to have occurred on or
before the Accounts Date; or
(iii) in respect of all distributions made and all
interest or charges paid or accrued on or
before the Accounts Date.
6.2 Full disclosure has been made in the Disclosure Letter of any
difference between the accounting and Taxation treatment of
all items in the Accounts, where such difference creates an
additional Taxation liability of more than L20,000 in any
Target Group Company.
7. TAXATION CLAIMS AND RELIEFS
7.1 There are set out in the Disclosure Letter, with express
reference to this paragraph, full and accurate particulars of
all of the following matters relating to Taxation in respect
of which each Target Group Company (either alone or jointly
with any other person) has, or at Completion will have, an
outstanding requirement or entitlement to make and which has
been taken into account in preparing or computing the
Completion Accounts or the provision for Taxation therein:
(i) any specific return or any requirement to provide any
information to any Taxation Authority;
(ii) any claim, including a supplementary claim or
election, for relief under the TA 1988 or any other
statutory or regulatory provision relating to
Taxation;
(iii) any election, including an election for one type of
relief, or one basis, system or method of Taxation,
as opposed to another;
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(iv) any appeal (including a further appeal) against an
assessment to Taxation;
(v) any application for the postponement of, or payment
by instalments of, Taxation; or
(vi) any disclaimer of or requirement for the postponement
of any allowance or relief;
(vii) any claim for credit for input tax or any repayment
of value added tax from the commissioners of Customs
and Excise;
(viii) any clearance application.
7.2 Each Target Group Company has submitted all claims, elections
and disclaimers that have been required based on its
corporation tax computations.
7.3 So far as the Warrantors are aware, no relief (whether by way
of deduction, reduction, set-off, exemption, postponement,
roll over, hold over, repayment or allowance, or otherwise)
from against or in respect of any Taxation has been claimed
and/or given to any Target Group Company which is likely to be
effectively withdrawn, postponed, restricted, clawed back or
otherwise lost as a result of any act, omission, event or
circumstance arising or occurring in the ordinary course of
such Target Group Company's business (as carried on at
Completion) at or at any time after Completion.
7.4 (a) During the period commencing three years before the
date of this Agreement and ending on Completion:
(i) there has been no discontinuance of or major
change in the nature or conduct of any trade
carried on by any Target Group Company or
any of its predecessors (within the meaning
of section 343 TA 1988); and
(ii) there has been no change in the ownership of
any Target Group Company for the purposes of
sections 245, 245A or 767A to 769
(inclusive) TA 1988;
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(b) At no time prior to Completion has the scale of
activities of any trade carried on by any Target
Group Company or any of its predecessors (within the
meaning of section 343 TA 1988) become small or
negligible within the meaning of sections 245 or 768
TA 1988.
8. SECONDARY TAXATION LIABILITIES
So far as the Warrantors are aware, no event or Transaction has
occurred or been entered into pursuant to which, and there are, and
will at Completion be, no circumstances in which, any Target Group
Company is or may become, liable to pay, or make reimbursement or
indemnity in respect of, or otherwise bear, any Taxation (or amounts
corresponding thereto) directly or primarily chargeable against or
attributable to any other person, firm or company in consequence of the
failure by any other person, firm or company to discharge that Taxation
within any specified period or otherwise, where such Taxation relates
to a profit, income or gain or any Transaction effected, entered into
or occurring or any circumstance occurring (in either case whether
wholly or partly) prior to Completion.
9. COMPANY RESIDENCE
Each of the Target Group Companies is resident for Taxation purposes in
the jurisdiction specified in Part 2 of the Schedule and has not been
resident anywhere else at any time since its incorporation. For the
avoidance of doubt, references to residence in this paragraph 9 shall
be construed as references to residence as determined by the local law
of the jurisdiction or jurisdictions concerned and not by (unless
required by such local law) reference to the provisions of any relevant
double tax agreement, treaty or convention.
10. CLOSE COMPANY MATTERS
10.1 Each Target Group Company is not and has not been or treated
as been at any time since 31 March 1989 a close investment
holding company (as defined in Section 13A TA 1988).
10.2 No distribution falling within Section 418 TA 1988 has been
made or agreed
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to be made by any Target Group Company.
10.3 No Target Group Company has entered into any transaction, or
made any loan or advance or written off or released any debt,
falling within Sections 419 or 422 TA 1988.
10.4 No Target Group Company has made any covenanted payments or
payments to charity falling within Section 339 TA 1988.
11. REPAYMENT OF CAPITAL ETC. AND DISTRIBUTIONS
11.1 No Target Group Company has :-
(a) repaid, or agreed to repay, any of its share capital
or any amount paid up on any of its share capital; or
(b) redeemed, or agreed to redeem, or purchased or agreed
to purchase any of its share capital; or
(c) capitalised, or agreed to capitalise, in the form of
debentures or redeemable shares, any profits or
reserves of any class or description, or passed any
resolution to do so; or
(d) issued any share capital as paid up otherwise than by
the receipt of new consideration within the meaning
of Part VI TA 1988.
11.2 There are no securities (within the meaning of section 254(1)
TA 1988) of any Target Group Company in issue any payment in
respect of which falls or will fall to be treated as a
distribution for the purposes of Section 209 TA 1988.
11.3 Except as properly authorised and provided for in its audited
accounts, no Target Group Company has made or been treated as
having made any distribution within the meaning of sections
209 and 210 TA 1988 during the six years ending on the
Accounts Date.
11.4 No Target Group Company has been engaged in or been a party to
any of the transactions set out in Sections 213 to 218 TA 1988
nor has any Target Group Company made or received a chargeable
payment as defined therein.
11.5 Each Target Group Company has properly accounted for all
advance corporation tax payable by it in respect of
distributions (including interest on
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equity notes after 14 May 1992) and deemed distributions
within the meaning of Sections 209 and 210 TA 1988.
12. DEDUCTIBLE EXPENDITURE
12.1 All rents, interest, annual payments, emoluments or other sums
of an income nature each greater than L15,000 per annum paid
or payable by each Target Group Company since the Accounts
Date or which any Target Group Company is under an obligation
(whether conditional or otherwise) to pay in the future are,
or (under the law as presently in force) will be wholly
deductible in computing profits, or against profits, for
Taxation purposes.
12.2 No payment has been made or agreed to be made by any Target
Group Company to or in respect of any of its directors
(including, but not limited to, pension contributions) which
will not be deductible in full for corporation tax purposes,
either in computing income profits or in computing corporation
tax payable by it.
13. LOSSES AND RELIEFS
Nothing has been done, and no event or series of events or
circumstances has occurred or will as a result of any contract,
agreement or arrangement entered into before Completion occur, which
might, when taken together with this Agreement being entered into or
becoming unconditional or Completion or otherwise, cause or contribute
to the loss, restriction, postponement or disallowance to any Target
Group Company of any Relief.
14. GROUP TAXATION
14.1 No Target Group Company has ever been a member of a group of
companies (as defined for any Taxation purpose) (other than
solely with any other Target Group Company).
14.2 No payments have been, or will be prior to Completion, made
for group relief (as defined in Section 402 TA 1988).
14.3 No Target Group Company has:-
14.3.1 paid any dividend without advance corporation tax or
made or is
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liable to make any payment without deduction of
income tax in the circumstances specified in Section
247(6) TA 1988; or
14.3.2 given any notice pursuant to Section 247(3) TA 1988
in respect of any dividends paid or agreed to be paid
by it.
14.4 No surplus shadow ACT has been allocated to any Target Group
Company.
14.5 No Target Group Company has made an election under paragraph
11(3) SI 1999/358 (Corporation Tax (Treatment of Surplus
Unrelieved ACT) Regulations).
15. CAPITAL ALLOWANCES
15.1 Since the Accounts Date, no act has been done or omitted,
agreed or permitted to be done by any Target Group Company and
no Target Group Company has suffered any occurrence, as a
result of which (in any such case):-
(a) any disposal value has been or may be required to be
brought into account under Section 24 CAA 1990; or
(b) any balancing charge has arisen or may arise under
Section 4 CAA 1990.
15.2 No Target Group Company has made any election under Section 37
CAA 1990 in respect of any asset owned by it at the Accounts
Date or acquired by it since that date.
15.3 No balancing charge in respect of any capital allowances
claimed or given would arise if any of the assets of any
Target Group Company (or where computations are made for
capital allowances purposes for pools of assets, all the
assets in that pool) were to be realised for a consideration
equal to the book value thereof as shown in, or adopted for
the purpose of, the Accounts, (or, in the case of any asset
acquired since the Accounts Date for a consideration equal to
the consideration given for the acquisition) except to the
extent that such balancing charge is fully provided for in the
Accounts.
15.4 No asset in respect of which any Target Group Company has
claimed or is or
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may be entitled to claim capital allowances is:-
(a) leased to any person other than where such assets is
used for a qualifying purpose by such person within
S39 CAA 1990; or
(b) a fixture in circumstances where the right of any
Target Group Company to claim capital allowances is:-
(i) dependent on some other person making or
consenting to the making of an election; or
(ii) is or may be disputed by any person or any
Taxation Authority; or
(c) an asset to which Part XV of the VAT Regulations 1995
applies.
16. TRANSFER PRICING ETC.
16.1 No Target Group Company owns or has agreed to acquire, any
asset, nor has any Target Group Company received or agreed to
receive any services or facilities (including without
limitation the benefit of any loan or advance or any licences
or agreements), from any employee, director, officer or
consultant of or to any Target Group Company or any of their
connected persons which is not contracted to be provided or
acquired in any agreement disclosed in the Disclosure Letter
or the consideration for the acquisition or provision of which
was or will be in excess of its market value, or otherwise
than on an arm's length basis.
16.2 No Target Group Company has either disposed or agreed to
dispose of any asset, nor has any Target Group Company
provided or agreed to provide any services or facilities
(including without limitation the benefit of any loan or
advance or any licences or agreements), to any employee,
director, officer or consultant of or to any Target Group
Company or any of their connected persons which is not
contracted to be disposed of or provided in any agreement
disclosed in the Disclosure Letter or the consideration for
the disposal or provision of which was or will be less than
its market value, or otherwise than on an arm's length basis.
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17. CORPORATION TAX ON CHARGEABLE GAINS
17.1 The entry into or Completion of this Agreement will not result
in any profit or gain being deemed to accrue to any Target
Group Company for Taxation purposes.
17.2 All chargeable assets of each Target Group Company were
acquired at market value at the time of acquisition and there
are no circumstances giving rise or which may give rise to
liability or loss under or pursuant to Sections 17, 30, 139,
140, 176, 177 or 179 TCGA.
17.3 If each of the assets of each Target Group Company was
disposed of for a consideration equal to the book value of
that asset in, or adopted for the purpose of, the Accounts, no
liability to corporation tax on chargeable gains not fully
provided for in the Accounts would arise; and, for the purpose
of determining the liability to corporation tax on chargeable
gains, there shall be disregarded any statutory right to make
any election or claim and any relief and allowances available
to any Target Group Company other than amounts falling to be
deducted under Section 38 TCGA and allowances given under
Chapter IV of Part II TCGA.
17.4 No Target Group Company has been a party to or concerned in
any Transaction as a result of which the consideration
received or receivable for any disposal of an asset by any
Target Group Company may be increased under Section 30 TCGA.
17.5 No Target Group Company owns any asset acquired in
circumstances such that any of the provisions of Chapter II of
Part IV TCGA applied to its acquisition.
17.6 Since the Accounts Date no Target Group Company has disposed
of or acquired any asset in such circumstances that the
provisions of Section 17 TCGA did or could apply thereto.
17.7 No claim has been made by any person under Sections 23, 140,
140C, 152 to 158 (inclusive), 175 or 247 TCGA or any other
statutory provision relating to
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Taxation which would affect the amount of any gain or
allowable loss which would, but for such claim, accrue or be
treated as accruing on any disposal of any asset of any Target
Group Company or which has or will operate to postpone the
payment of corporation tax on any such gain.
17.8 No Target Group Company has either made or is entitled to make
a claim under Section 24(2), Section 253 or Section 254 TCGA.
17.9 No Target Group Company has realised a loss on the disposal or
deemed disposal of an asset in relation to which its ability
to set the whole of that loss against any chargeable gain
arising in the same or a later accounting period is or may be
restricted or excluded whether pursuant to Section 18 TCGA or
otherwise.
17.10 No asset owned by any Target Group Company has at any time
since its acquisition been subjected to a reduction in value
such that any allowable loss arising on its disposal is likely
to be reduced or eliminated or any chargeable gain arising on
its disposal is likely to be increased.
17.11 No Target Group Company has or will at Completion have
distributable profits which would be chargeable profits as
those terms are defined in Section 31 TCGA if the Section 30
disposal therein referred to took place on Completion.
17.12 No Target Group Company has acquired any assets subject to a
claim under Section 165 TCGA.
18. PAYE AND NATIONAL INSURANCE
18.1 Each Target Group Company has properly operated the PAYE and
National Insurance contributions systems by making such
deductions as are required by law from all payments made or
deemed to be or treated as made by it or on its behalf, and by
duly accounting to the Inland Revenue for all sums so deducted
and for all other amounts for which it is required to account
under the PAYE and National Insurance contributions systems
(including on notional payments and contributions on car and
car fuel benefits assessed
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annually) and by making all returns and reports and providing
all information in respect of any payments made or treated as
made and any benefits provided for directors, employees or
others.
18.2 No Target Group Company has suffered any PAYE audit by the
Inland Revenue or visit by the Department of Social Security
within the seven years ending with the date of this Agreement
or has been notified that any such audit or visit will or is
expected to be made.
18.3 There are set out in the Disclosure Letter particulars of all
dispensations, notifications and/or notices received by each
Group Company under Section 166 TA 1988.
18.4 No Target Group Company operates any scheme approved under
Section 202 TA 1988 or Chapter III of Part V TA 1988.
18.5 None of the directors or employees of any Target Group Company
are in contracted-out employment for national insurance
contribution purposes.
19. OTHER DEDUCTIONS FROM PAYMENTS
19.1 Each Target Group Company has complied in all respects with
all statutory provisions relating to Taxation and requiring
the deduction or withholding of Taxation from any payment made
by it and has properly accounted to the relevant Taxation
Authority for any such Taxation which ought to have been
accounted for.
20. EMPLOYEES AND CONSULTANTS
No Taxation Authority has challenged or given notice that it may
challenge the self-employed status of any contractor or purported
contractor to any Target Group Company and, so far as the Warrantors
are aware, there are no circumstances whereby such a challenge is
likely to occur.
21. ANTI-AVOIDANCE PROVISIONS
21.1 No Target Group Company has in the seven years ending on the
date of this Agreement been engaged in, or been a party to or
otherwise involved in, any transaction or series of
transactions or scheme or arrangement of which the
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main purpose, or one of the main purposes, was or could be
said to be the avoidance of, or deferral of or a reduction in
the liability to, Taxation or account for any Taxation.
21.2 No Target Group Company has in the seven years ending on the
date of this Agreement been engaged or concerned in, or been a
party to, any transaction or series of transactions or scheme
or arrangement in respect of which it considered or was
advised that there was a risk that any Target Group Company
could be liable to Taxation or increased Taxation as a result
of the principles laid down by the House of Lords in the case
of ▇▇▇▇▇▇▇ -v- ▇▇▇▇▇▇ (55 TC 324).
22. VALUE ADDED TAX ("VAT") AND CUSTOMS DUTIES
22.1 Each Target Group Company:
(i) is registered in the United Kingdom and is a taxable
person for the purposes of the legislation relating
to VAT and has been so registered at all times that
it has been required to be registered by the relevant
legislation;
(ii) is not registered and is not required to be
registered for the purposes of VAT (or any equivalent
or similar tax) in any jurisdiction other than the
United Kingdom;
(iii) has at all times complied fully with all statutory
requirements, orders, provisions, directions or
conditions relating to VAT, including (for the
avoidance of doubt) the terms of any agreement
reached with the Commissioners of Customs and Excise
and the terms of any import or export schemes to
which it is subject (whether in the United Kingdom or
elsewhere);
(iv) maintains and has at all times maintained complete,
correct and up-to-date records, invoices and other
documents appropriate or required for the purposes of
such legislation and has preserved such records in
such form and for such periods as are required by
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the relevant legislation;
(v) is not now, and will not at Completion be, in arrears
with any payment or returns thereunder, or liable to
any abnormal or non-routine payment, or any
forfeiture or penalty, or to the operation of any
penal provision;
(vi) has not been required by the Commissioners of Customs
and Excise to give security;
(vii) has not at any time been and has not applied to be a
member of a group registration made pursuant to
Section 43 VATA;
(viii) has not since the Accounts Date made or been treated
as having made any exempt supplies for VAT purposes
such, or of such amount, that it is unable to obtain
credit for or repayment of all input tax paid or
suffered by it;
(ix) does not provide and has not since the Accounts Date
provided domestic accommodation or ancillary goods or
services for any directors or employees;
(x) has not at any time since 31 March 1990 purchased in
any circumstances where the purchase was or was
treated as neither a supply of goods nor a supply of
services pursuant to Paragraph 5 of the VAT (Special
Provisions) Order 1995 or any provision in force
prior to the date such Order became effective;
(xi) has no responsibility for any other person's VAT
records whether as a current or former member of a
VAT group registration under Section 43 VATA or as
the acquirer of any assets or any business as a going
concern or otherwise.
22.2 No Target Group Company owns the fee simple (as defined, in
relation to Scotland and Northern Ireland, by Section 96 VATA)
in any land or building (or part thereof) or any civil
engineering work (or part thereof) which at the date of this
Agreement is new or uncompleted for the purposes of item 1 of
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Group 1 of Schedule 9 to VATA.
22.3 The Disclosure Letter contains full particulars of all land in
which any Target Group Company has an interest and in relation
to which an election has been made by any Target Group Company
or by any company of which any Target Group Company is a
relevant associate (as defined by paragraph 3(7) of Schedule
10 of the VATA) to waive exemption from VAT pursuant to the
provisions of Schedule 10 VATA.
22.4 There are set out in the Disclosure Letter full particulars of
each item which each Target Group Company uses in the course
or furtherance of its business, and for the purpose of that
business, otherwise than solely for the purpose of selling the
item, being items to which Part XV of the Value Added Tax
Regulations 1995 applies (irrespective of whether credit has
been obtained for all input tax in respect of any such item)
and in respect of which the period of adjustment will not have
expired by Completion. Such particulars are sufficient to
enable each Target Group Company (or any group of which it
will form part for the purposes of Section 43 of the VATA
following Completion) to comply with their obligations under
the said Part XV.
22.5 Details of the supply of goods or services in respect of which
the whole or part of the consideration has been written off in
the accounts of any Target Group Company for the purposes of
Section 36 VATA are set out in the Disclosure Letter and each
Target Group Company holds all the records or documents
required to be held by regulation 167 of the Value Added Tax
Regulations 1995 in order that a claim may be made at the date
hereof or subsequently for a refund of VAT under Section 36
VATA in respect of any supply to it. Each Target Group Company
has duly claimed all bad debt relief which may be available to
it under Section 36 VATA.
22.6 Each Target Group Company has promptly paid in full all
customs and excise duties due and payable to HM Customs and
Excise in respect of any assets (including trading stock)
imported or owned by it.
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23. STAMP DUTY AND STAMP DUTY RESERVE TAX
All documents to which any Target Group Company is a party and which
form part of any Target Group Company's title to any asset owned or
possessed by it and all documents to which any Target Group Company is
a party and pursuant to which any Target Group Company may have any
rights or which any Target Group Company may need or wish to enforce or
produce in evidence in the courts of the United Kingdom have been duly
stamped and (where appropriate) adjudicated and (where appropriate)
stamped with a particulars delivered stamp.
24. INHERITANCE TAX AND GIFTS
24.1 No Inland Revenue charge for unpaid capital transfer tax or
inheritance tax has been or (so far as the Warrantors are
aware) may be imposed under Section 237 and Section 238 IHTA)
over any asset of any Target Group Company, or in relation to
any shares in the capital of any Target Group Company and (so
far as the Warrantors are aware) no such Inland Revenue charge
will arise after Completion in connection with any Transaction
which was entered into or effected or which occurred on or
before Completion.
24.2 There are not in existence any circumstances whereby any such
power as is mentioned in Section 212 IHTA could be exercised
in relation to any shares, securities or other assets of or
owned by any Target Group Company, or could be so exercised
but for Section 204(6) IHTA and (so far as the Warrantors are
aware) no such power may arise after Completion in connection
with any Transaction effected, entered into or occurring on or
before Completion.
24.3 No Target Group Company is or will become liable (whether
contingently or otherwise) to pay or account for any
Taxation:-
(a) as donor or donee or as transferor or transferee of
value (actual or deemed); or
(b) as a result of any disposition, chargeable transfer
or transfer of value (in either case whether actual
or deemed) made or deemed
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to have been made by it or any other person and
neither the entry into of this Agreement nor
Completion will trigger any liability (actual or
contingent) to any such Taxation.
25. PENSION SCHEMES
No Target Group Company has since the Accounts Date received any
payment to which Section 601 TA 1988 is applicable.
26. EMPLOYEE SCHEMES AND PEPS
26.1 No Target Group Company is participating company in any scheme
approved under Sections 185 or 186 and Schedule 9 TA 1988.
26.2 No Target Group Company has in issue any shares as defined in
Section 87 FA 1988 which fall within Chapter II Part III FA
1988.
26.3 No Target Group Company has either established, or has
contributed to, a qualifying employee share ownership trust as
defined in Schedule 5 FA 1989.
26.4 No Target Group Company has registered or applied to register
any profit-related pay scheme with the Inland Revenue.
27. CORPORATE DEBT AND SECURITIES
No Target Group Company has either issued or owns any of the following
types of securities:-
(a) qualifying corporate bonds;
(b) deep discount corporate bonds;
(c) deep gain securities;
(d) qualifying indexed securities;
(e) convertible securities.
28. INVESTMENT GRANTS
No Target Group Company has done or agreed to do anything as a result
of which any investment grant paid to it is or may be liable to be
refunded in whole or in part. The entry into or completion of this
Agreement will not result in any investment grants received by any
Target Group Company becoming liable to be repaid in whole or in part.
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29. UNIFORM BUSINESS RATES AND OTHER LOCAL TAXES
29.1 Each Target Group Company has paid all amounts of Taxation due
in respect of any properties owned or occupied by it.
29.2 There are no disputed matters as to the rateable value or
rateable use for the purpose of rating of any land or
buildings (or part of any land or buildings) owned, leased or
occupied by any Target Group Company.
30. CLIMATE CHANGE LEVY
Each Target Group Company has not at any time (a) made or received (or
agreed to make or receive) any supplies in respect of which the climate
change levy is chargeable or payable or (b) been liable to be
registered for the purposes of the climate change levy.
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PART 5G
INTERNATIONAL TAX WARRANTIES
1. TAXATION
1.1 No Target Group Company has any liability in respect of Taxation that
is not fully provided for in the Accounts and no Target Group Company
has incurred any liability to Taxation in respect of any Transaction
which occurred outside the ordinary course of the business of that
Target Group Company since the Accounts Date.
1.2 Each Target Group Company has duly paid all Taxation which has become
due and payable by it.
2. TAXATION RETURNS, DISPUTES, RECORDS AND CLAIMS ETC.
2.1 Each Target Group Company has made or caused to be made all proper
claims, notifications, directions, returns, computations, notices and
information which have been required to be made or given by that Target
Group Company for any Taxation purpose and the same have been made or
given within the requisite periods and on a proper basis and are up to
date and were correct when made or given and none of them is or is
likely to be the subject of any dispute with any Taxation Authority and
each of the Target Group Companies has supplied, or caused to be
supplied, all information required to be supplied by it to any Taxation
Authority.
2.2 There is no dispute or disagreement outstanding with any Taxation
Authority nor so far as the Warrantors are aware has any Taxation
Authority intimated a dispute or disagreement as at the date of this
Agreement regarding liability or potential liability to any Taxation
payable by or recoverable from any of the Target Group Companies or
regarding the availability of any Relief or repayment of any Taxation
to any of the Target Group Companies and there are no circumstances of
which the Vendors are aware which make it likely that any such dispute
or disagreement will commence.
2.3 None of the Taxation returns or other filings that include the
operations of any Target Group Company has been audited or investigated
by any Taxation Authority within the last six years, and so far as the
Warrantors are aware no facts exist which would
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constitute grounds for the assessment of any additional Taxation by any
Taxation Authority with respect to the taxable years or periods covered
in or by such Taxation returns and filings.
2.4 Each of the Target Group Companies is in possession of sufficient
information to enable it to compute its liability to Taxation insofar
as it depends on any Transaction occurring on or before Completion or
any income, profits or gains earned, accrued or received on or before
Completion or any distribution made on or before Completion.
2.5 None of the Target Group Companies has within the period of six years
ending on the date hereof paid or become liable to pay any penalty,
fine or interest charged by any Taxation Authority.
2.6 No material issues have been raised in any examination by any Taxation
Authority with respect to the businesses and operations of any Target
Group Company which, by application of similar principles, could
reasonably be expected to result in a proposed adjustment to the
liability for Taxation for any other taxable period not so examined.
2.7 Each Target Group Company has complied with all statutory provisions
requiring the deduction or withholding of Taxation from amounts paid by
it, whether on its own behalf or as agent, and has properly accounted
for any Taxation so deducted or withheld to the relevant Taxation
Authority (other than amounts which have not as at Completion yet
become due to be paid to the relevant Taxation Authority).
2.8 So far as the Warrantors are aware no Target Group Company has any
liability, actual or contingent, in respect of any Taxation of or
primarily chargeable on or attributable to any other person, firm or
company.
3. TAXATION CLAIMS AND RELIEFS
3.1 No Relief from, against or in respect of any Taxation or repayment of
Taxation has been claimed and/or given to any Target Group Company
which could be effectively withdrawn, postponed, restricted, clawed
back or otherwise lost as a result of any Transaction which occurred on
or before Completion.
3.2 Nothing has been done, and no Transaction or series of Transactions has
occurred or
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will occur as a result of any contract, agreement or arrangement (in
either case whether conditional or not) entered into on or before
Completion in relation to any Target Group Company, which might, when
taken together with the entry into or Completion of this Agreement, in
relation to the relevant Target Group Company, directly cause or
contribute to the disallowance, restriction or non-availability to any
Target Group Company of any Relief or right to repayment of Taxation.
3.3 The Disclosure Letter sets out full particulars, with express reference
to this paragraph 3.3, of any agreement, arrangement or election
between any Target Group Company and any Taxation Authority, and any
concession on which any Target Group Company is relying or has relied,
pursuant to which the relevant Target Group Company is authorised not
to comply with what but for such agreement, arrangement or election
would be its statutory obligations and none of the Target Group
Companies has taken any action which has had or will have, nor will
anything contemplated by this Agreement have, the effect of altering,
prejudicing or in any way disturbing any such agreement, arrangements,
election or concession.
3.4 None of the Target Group Companies is a party to or is otherwise
subject to any arrangement having the effect of or giving rise to the
recognition of a deduction or loss in a taxable period ending on or
before Completion, and a corresponding recognition of taxable income or
gain in a taxable period ending after Completion, or any other
arrangement that would have the effect of or give rise to the
recognition of taxable income or gain in a taxable period ending after
Completion without the receipt of or entitlement to a corresponding
amount of cash.
3.5 There are set out in the Disclosure Letter, with express reference to
this paragraph 3.5, particulars of all claims (including supplementary
claims) for Reliefs, rights to repayment of Taxation, appeals or
further appeals against any claim or assessments to Taxation,
applications for the postponement of, or payment by instalments of,
Taxation, disclaimers or postponements of any Relief or right to
repayment of Taxation and court proceedings which require to be made or
taken by any Target Group Company within six months after Completion.
Such particulars are sufficient
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to enable the Purchaser to procure that any time limit to such
entitlement expiring within six months after Completion can be met.
3.6 No rents, interest, annual payments, emoluments or other sums of an
income nature greater than L15,000 paid or payable since the Accounts
Date by any of the Target Group Companies, or which any of the Target
Group Companies is under an obligation (whether conditional or
otherwise) to pay in the future, may or could be wholly or partially
disallowable as deductions or charges in computing profits or against
profits for any Taxation purpose or by reason of any statutory or other
binding provision relating to Taxation.
4. COMPANY RESIDENCE
Each of the Target Group Companies is resident for Taxation purposes in
the jurisdiction specified in Part 2 of the Schedule and has not been
resident anywhere else at any time since its incorporation. For the
avoidance of doubt, references to residence in this paragraph 4 shall
be construed as references to residence as determined by the local law
of the jurisdiction or jurisdictions concerned and not by (unless
required by such local law) reference to the provisions of any relevant
double tax agreement, treaty or convention.
5. DOUBLE TAX TREATIES
No relief or credit which has been claimed by any Target Group Company
or which any Target Group Company is entitled to claim under any double
tax agreement or convention entered into between the jurisdiction in
which it is resident and any other relevant jurisdiction may be
disallowed or withdrawn, postponed, restricted, clawed back or
otherwise lost as a result of any Transaction which occurred on or
before Completion.
6. BASE VALUES AND COSTS OF ACQUISITION
6.1 No claim has been made under any legislation relating to Taxation in
any jurisdiction which could affect the amount of any gain accruing or
being treated as accruing on a disposal of an asset by any Target Group
Company.
6.2 If each of the assets (other than trading stock) or the plant and
machinery taken as a
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whole of each Target Group Company was disposed of for a consideration
equal to the book value of that asset (or, as appropriate, plant and
machinery) in, or adopted for the purpose of, the Accounts of the
relevant Target Group Company, no liability to Taxation not fully
provided for in the Accounts of the relevant Target Group Company would
arise.
7. TRANSACTIONS NOT AT ARM'S LENGTH
7.1 None of the Target Group Companies owns, or 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), from any employee, director, officer or consultant of or
to any Target Group Company or any of their connected persons which is
not contracted to be provided or acquired in any agreement disclosed in
the Disclosure Letter or the consideration for the acquisition or
provision of which was or will be in excess of its market value, or
otherwise than on an arm's length basis.
7.2 None of the Target Group Companies has disposed of, or has agreed to
dispose of, any asset or has provided or agreed to provide any services
or facilities (including, without limitation, the benefit of any
licences or agreements), to any employee, director, officer or
consultant of or to any Target Group Company or any of their connected
persons which is not contracted to be disposed of or provided in any
agreement disclosed in the Disclosure Letter or the consideration for
the disposal or provision of which was or will be less than its market
value, or otherwise than on an arm's length basis.
8. COMPLETION
8.1 None of the Transactions effected or required to be effected pursuant
to this Agreement, or the entry into, becoming unconditional or
Completion of this Agreement, will give rise to any liability for
Taxation for any Target Group Company or result in any income, profit
or gain being deemed to accrue to any Target Group Company for any
Taxation purpose.
8.2 None of the Target Group Companies has agreed to make, or is required
to make, any adjustment by reason of a change in accounting methods
that affect any taxable
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period ending after Completion. None of the Target Group Companies has
any application pending with any taxation Authority requesting
permission for any change in accounting methods that relates to its
business or operations and that affects any taxable period ending after
Completion.
9. TAXATION EQUALISATION PAYMENTS
9.1 None of the Target Group Companies is liable to make a payment for the
utilisation, surrender or other transfer of any Relief or right to
repayment of Taxation ("Taxation Equalisation Payment"), nor is any
Taxation Equalisation Payment received by any Target Group Company
liable to be refunded.
9.2 None of the Target Group Companies is under any obligation to surrender
or otherwise transfer any Relief or right to repayment of Taxation and
no Target Group Company is a party to a Taxation sharing agreement with
a company that is not a Target Group Company.
9.3 There are set out in the Disclosure Letter, with express reference to
this paragraph, full particulars of all surrenders or other transfers
of any Relief or right to repayment of Taxation made or agreed to be
made (whether conditionally or otherwise) by or to any Target Group
Company since the Accounts Date.
9.4 Save as set out in the Disclosure Letter, with express reference to
this paragraph 9.4, no Target Group Company has ever been treated as a
member of the same group of companies, fiscal unity, organschaft, or
included in a consolidated Taxation return as any other body corporate
or person for any Taxation purpose.
10. PARTNERSHIPS, ETC.
None of the Target Group Companies is a party to any joint venture,
partnership or other arrangement or contract which is or may be treated
as a partnership for Taxation purposes.
11. EMPLOYEES AND CONSULTANTS
No Taxation Authority has challenged or given notice that it may
challenge the self-employed status of any contractor or purported
contractor to any Target Group Company and so far as the Warrantors are
aware there are no circumstances whereby
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such a challenge is likely to occur.
12. VALUE ADDED TAX AND CUSTOMS DUTIES
12.1 Each Target Group Company:
(i) is registered in its country of incorporation and
is a taxable or liable person for the purposes of
the legislation relating to VAT, sales tax,
purchase tax and GST (to the extent the same apply
in such country of incorporation) (each of such
taxes being "VAT" for the purposes only of this
Part 5G of the Schedule) and has been so
registered at all times that it has been required
to be registered by the relevant legislation;
(ii) is not registered and is not required to be
registered for the purposes of VAT (or any
equivalent or similar tax) in any jurisdiction
other than its country of incorporation;
(iii) has at all times complied fully with all statutory
requirements, orders, provisions, directions or
conditions relating to VAT, including (for the
avoidance of doubt) the terms of any agreement
reached with any Taxation Authority and the terms
of any import or export schemes to which it is
subject (whether in its country of incorporation
or elsewhere);
(iv) maintains and has at all times maintained
complete, correct and up-to-date records, invoices
and other documents appropriate or required for
the purposes of any legislation and has preserved
such records in such form and for such periods as
are required by the relevant legislation;
(v) is not now, and will not at Completion be, in
arrears with any payment or returns thereunder, or
liable to any abnormal or non-routine payment, or
any forfeiture or penalty, or to the operation of
any penal provision;
(vi) has not been required by any Taxation Authority to
give security;
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(vii) has not at any time been and has not applied to be
a member of a group registration for VAT purposes;
(viii) has not since the Accounts Date made or been
treated as having made any supplies for VAT
purposes such, or of such amount, that it is
unable to obtain credit for or repayment of all
VAT paid or suffered by it on supplies made to it;
(ix) does not provide and has not since the Accounts
Date provided domestic accommodation or ancillary
goods or services for any directors or employees;
(x) has no responsibility for any other person's VAT
records whether as a current or former member of a
VAT group registration or as the acquirer of any
assets or any business as a going concern or
otherwise.
12.2 Details of the supply of goods or services in respect of which
the whole or part of the consideration has been written off in
the accounts of any Target Group Company for the purposes of
VAT are set out in the Disclosure Letter and each Target Group
Company holds all the records or documents required to be held
by it in order that a claim may be made at the date hereof or
subsequently for a refund of VAT in respect of any supply to
it. Each Target Group Company has duly claimed all bad debt
relief which may be available to it in respect of VAT.
12.3 Each Target Group Company has promptly paid in full all
customs and excise duties due and payable to any Taxation
Authority in respect of any assets (including trading stock),
exported or imported, or owned or sold, by it.
13. STAMP DUTY
All documents to which any Target Group Company is a party and which
form part of any Target Group Company's title to any asset owned or
possessed by it and all documents to which any Target Group Company is
a party and pursuant to which
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any Target Group Company may have any rights or which any Target Group
Company may need or wish to enforce or produce in evidence in the
courts of any country have been duly stamped and (where appropriate)
adjudicated and (where appropriate) stamped with a particulars
delivered stamp.
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SCHEDULE
PART 6
WARRANTORS' LIMITATIONS
1. The Warrantors' liability shall be limited as provided in this Part of
the Schedule except, in the case of any individual Warrantor, where
there has been fraud or deliberate non-disclosure on his part.
2. The Warrantors shall not be liable for any Relevant Claim (save for
claims under the IPR Warranties) until their aggregate liability for
all valid claims agreed or determined (excluding related interest and
enforcement costs) shall equal or exceed the Threshold in which case
the Warrantors shall be liable for the excess over the Threshold only;
3. The total aggregate liability of the Warrantors under the Warranties,
the Indemnities and the Tax Deed shall be limited to such sum as
represents the amount of cash and the value of the Weatherford Shares
issued to the Warrantors as Consideration under deduction of the amount
of any payment made by the Warrantors, or the value of any Weatherford
Shares transferred by the Warrantors to the Purchaser under Clause 6
(the value of the Weatherford Shares being calculated in each case by
reference to the Weatherford Share Price; provided, however, if any
payment under the Warranties, the Indemnities or the Tax Deed
("Relevant Payment") is required to be paid prior to the initial
effectiveness of the Shelf Registration and if Weatherford is in
default under its obligations under the Registration Rights Agreement
then the Weatherford Share Price shall be deemed to equal the closing
sales price of Weatherford Common Stock on the New York Stock Exchange
on the Business Day prior to the date of payment of the Relevant
Payment if such closing price is lower than the Weatherford Share
Price)...
4. The Warrantors shall not be liable for any Relevant Claim (save for
claims under the Tax Warranties and the IPR Warranties) unless the
Relevant Claim has been notified in writing to the Warrantors (setting
out such reasonable details of the facts and circumstances giving rise
to such claim and a reasonable estimate of the aggregate
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liability of the Warrantors in respect of such claim as are known at
the time) prior to the second anniversary after Completion and legal
proceedings in respect of such claim (in the absence of settlement or
discharge of such claim) have commenced within six months after such
written notice is first served on the Warrantors or within six months
of the liability the subject of the claim becoming actual rather than
contingent (if later).
5. The Warrantors shall not be liable for any claim under (a) the Tax
Warranties, and (b) the IPR Warranties unless the claim has been
notified in writing to the Warrantors (setting out such reasonable
details of the facts and circumstances giving rise to such claim and a
reasonable estimate of the aggregate liability of the Warrantors in
respect of such claim as are known at the time) prior to (a) the
seventh anniversary after Completion in the case of the Tax Warranties,
and (b) the fifth anniversary after Completion in the case of the IPR
Warranties and legal proceedings in respect of such claim (in the
absence of settlement or discharge of such claim) has commenced within
six months after such written notice is first served on the Warrantors
or within six months of the liability the subject of the claim becoming
actual rather than contingent (if later).
6. Notwithstanding any other provision of this Agreement to the contrary,
in respect of any claim under the Warranties, the Indemnities or the
Tax Deed each of the Warrantors shall only be liable for a
proportionate part thereof as follows:-
Mr Haites 71.09%
▇▇ ▇▇▇▇▇▇▇ 9.60%
▇▇ ▇▇▇▇ 5.72%
▇▇ ▇▇▇▇▇▇▇ 2.34%
▇▇ ▇▇▇▇▇▇ 11.26%
and the aggregate liability of any individual Warrantor under the
Warranties, the Indemnities and the Tax Deed shall not exceed the
amount of cash and the value of the Weatherford Shares issued to that
Warrantor as Consideration under deduction of the amount of any payment
made by that Warrantor, or the value of any Weatherford
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Shares transferred by that Warrantor to the Purchaser under Clause 6
(the value of the Weatherford Shares being calculated in each case by
reference to the Weatherford Share Price provided, however, if any
Relevant Payment is required to be paid prior to the initial
effectiveness of the Shelf Registration and if Weatherford is in
default under its obligations under the Registration Rights Agreement
then the Weatherford Share Price shall be deemed to equal the closing
sales price of Weatherford Common Stock on the New York Stock Exchange
on the Business Day prior to the date of payment of the Relevant
Payment if such closing price is lower than the Weatherford Share
Price).
7. The Warrantors shall not be liable for any Relevant Claim to the extent
that any liability is increased or arises from:
7.1 the enactment of or coming into force after the date of this
Agreement of any legislation not enacted or not in force at
the date of this Agreement;
7.2 any amendment to any legislation which is enacted or comes
into force after the date of this Agreement;
7.3 any change in interpretation of any law or any change in
administrative practice of any government, governmental
department, agency or regulatory body announced after the date
of this Agreement;
7.4 any increase in the rates of Taxation or alteration in the
methods of applying or calculating Taxation or any imposition
of Taxation announced after the date of this Agreement;
7.5 any withdrawal after the date of this Agreement of any
practice or extra-statutory concession previously published by
the Inland Revenue or other Taxation authority.
8. The Warrantors shall not be liable for any Relevant Claim in respect of
any matter or liability to the extent that an express and specific
provision (including, for the avoidance of doubt, express and specific
provision for matters contained in any deferred taxation provision and
any obsolete stock provision), accrual, reserve or note in respect
thereof was made in the Accounts or the Management Accounts
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9. The Warrantors shall not be liable for any Relevant Claim which would
not have arisen but for a voluntary act or failure to act, omission or
transaction on the part of the Purchaser and/or (at the instance of the
Purchaser) by any Target Group Company occurring after Completion
otherwise than in the ordinary course of the Business or as required by
law or as a result of a legitimate inquiry from the Inland Revenue or
any other regulatory body, and which the Purchaser was aware would or
would be likely to give rise to a Relevant Claim.
10. The Warrantors shall have no liability in respect of any Relevant
Claim:
10.1 (subject to Clause 14 of this Part of the Schedule) where the
liability is contingent only, unless and until such liability
becomes an actual liability and becomes due and payable or is
incurred or recorded; or
10.2 which arises by virtue of any revaluation of property or
assets owned by any Target Group Company after the Completion
Date; or
10.3 in respect of any matter fairly disclosed in the Disclosure
Letter; or
10.4 to the extent that the subject matter of such claim is covered
by a policy of insurance in force on the date of this
Agreement and payment is made by the insurer under such policy
or under a similar policy effected by the Purchaser or any
Target Group Company; or subject to the matter being an
insurance risk, would have been so covered had such policy of
insurance been maintained beyond the date of this Agreement,
and the Purchaser shall procure that all appropriate claims
under such insurance are duly and timeously made and
prosecuted in good faith.
11. Nothing in this Agreement shall restrict any general obligation at law
of the Purchaser to mitigate any loss or damage which it may suffer in
consequence of any breach by the Warrantors of the Warranties or breach
of the Indemnities and shall take all reasonable steps (and so far as
within its power shall procure that such steps are taken) to mitigate
any loss or liability which might give rise to a claim against the
Warrantors under the Warranties and/or a claim under the Indemnities
and, without prejudice to the foregoing generality, procure that all
reasonable endeavours are used
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to recover any amounts due from third parties where (without being
required to initiate legal proceedings for recovery), in relation to
any matter which may give rise to a claim under the Warranties and/or
the Indemnities, the Purchaser or any Target Group Company has or may
have a claim against such third parties.
12. If the Warrantors pay to the Purchaser an amount in discharge of a
Relevant Claim or a claim under the Indemnities and the Purchaser
subsequently recovers (whether by payment, discount, credit, relief or
otherwise) from a third party a sum which is referable to the matter
giving rise to the Relevant Claim or obtains a relief which is so
referable, the Purchaser shall forthwith repay to the Warrantors:-
(a) an amount equal to the sum recovered from the third party (or
the value of the relief obtained, calculated by reference to
the amount saved) less any reasonable out-of-pocket costs and
expenses incurred by the Purchaser in recovering the same and
less any tax suffered on the receipt; or
(b) if the figure resulting under paragraph (a) above is greater
than the amount paid by the Warrantors to the Purchaser in
respect of the relevant claim, such lesser amount as shall
have been so paid by the Warrantors.
13. A breach of Warranty or of the Indemnities which is capable of remedy
shall not entitle the Purchaser to compensation unless the Warrantors
are given written notice of such breach and such breach is not then
remedied (without any cost or liability to the Purchaser) within 20
Business Days (or such longer or shorter period as shall in all the
circumstances be reasonable) after the date on which such notice is
served on the Warrantors.
14. If any Relevant Claim shall arise by reason of some liability which at
the time that the claim is notified to the Warrantors is contingent
only, the Warrantors shall not be under any obligation to make any
payment to the Purchaser in respect of such claim until such time as
the contingent liability ceases to be so contingent, provided always
that this sub-clause shall not operate to avoid a claim made in respect
of a contingent liability within the time limits specified above
(notwithstanding that no proceedings are taken in respect thereof
within the time limit specified in paragraph 4 above);
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provided that once the liability in question becomes actual then the
Purchaser shall be bound to issue and serve legal proceedings on the
Warrantors within the following six month period.
15. The Warrantors shall not be liable to pay any sum in respect of the
same matter under the Warranties, the Indemnities and the Tax Deed, and
the Purchaser shall not be entitled to make double recovery in respect
of the same matter under different Warranties or under different parts
of the same Warranty.
16. The Warrantors shall not be liable under the Warranties, the
Indemnities or the Tax Deed to the extent that the subject matter of
the claim is taken into account in determining an adjustment to the
Consideration in accordance with the provisions of Clause 6.
17. Notwithstanding any references to any "Target Group Company" therein:-
(a) the Warranties contained in Part 5F of the Schedule shall
apply to such Target Group Company (and to any branch or
permanent establishment thereof) to the extent that it is
resident for Taxation purposes in the United Kingdom; and
(b) the Warranties contained in Part 5G of the Schedule shall
apply to such Target Group Company (and to any branch or
permanent establishment thereof) to the extent that it is not
resident for Taxation purposes in the United Kingdom;
and to the extent that any Target Group Company (or any branch or
permanent establishment thereof) is so resident both in the United
Kingdom and in any other country, both Part 5F and Part 5G of the
Schedule shall apply thereto.
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SCHEDULE
PART 7A
THE PROPERTIES
PROPERTY FORM OF TITLE GROUP COMPANY WITH TITLE
▇▇▇▇ ▇, ▇▇▇▇▇ ▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ Sub-lease Brit Bit Limited
Crescent, East ▇▇▇▇▇▇, Aberdeen
Unit 3, Block A, Logman Centre, aforesaid Sub-lease Brit Bit Limited
Two storey office blocks lying adjacent to Sub-lease Brit Bit Limited
▇▇▇▇ ▇, ▇▇▇▇▇ ▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇, aforesaid
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇ ▇, ▇▇▇▇▇▇ Sub-lease Brit Bit Limited
B and C, Logman Centre, aforesaid
Unit 4, Block A, Logman Centre, aforesaid Sub-under lease Brit Bit Limited
Suites 9 and ▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ of Let Brit Bit Limited
Greenbank Crescent, East ▇▇▇▇▇▇, Aberdeen
Block 4, Peasiehill Road, Elliot Missives of Let Brit Bit Limited
Industrial Estate, Arbroath
Part of the building at Sir ▇▇▇▇▇▇▇ ▇▇▇▇▇ Lease BBL Downhole Tools Limited
Road, Kirkton Industrial Estate, Arbroath
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PART 7B
NON-UK PROPERTIES
PROPERTY FORM OF TITLE GROUP COMPANY WITH TITLE
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ Lease BBL Downhole Tools Inc
▇▇▇▇▇ ▇.▇▇, ▇▇▇▇▇ ▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇, Subang Memorandum of Understanding [BBL Asia Pacific (trading name of BBL
USJ, Malaysia Australia Pty Ltd)]
▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, Informal Lease BBL Eastern Canada Inc
Canada
▇▇▇ ▇▇ ▇▇▇▇▇▇'▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇ Informal Lease BBL Australia Pty Ltd
Australia
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PART 7C
LEASEHOLD DOCUMENTS
1 SUITES 9 AND 12, ▇▇▇▇▇▇ BUSINESS CENTRE, GREENBANK CRESCENT, EAST
▇▇▇▇▇▇, ABERDEEN.
1.1 Copy Offer by Storage & Distribution Centres (Scotland) Limited to Brit
Bit Limited
1.2 Copy Extract Minute of Variation of Lease between Horizon Property
Investments Limited and Brit Bit Limited registered 26 October 2000.
2 ▇▇▇▇ ▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ARBROATH
2.1 Copy Standard Conditions of Lease by Scottish Development Agency
2.2 Copy Offer by Scottish Enterprise to Brit Bit Limited dated 3 February
1997
2.3 Copy Acceptance by Brit Bit Limited to Scottish Enterprise dated 12
February 1997
2.4 Memorandum of Rent Review between Glenmorrison Group and Brit Bit
Limited dated 21 November 2000
3. ▇▇▇▇▇ ▇, ▇, ▇ ▇▇▇ ▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ CRESCENT, EAST TULLOS,
ABERDEEN
3.1 Copy Lease between the Corporation of the City of Aberdeen and Claben
Limited dated 17 and 24 February and recorded GRS (Kincardine) 5 May
1971
3.2 Copy Assignation by Claben Limited in favour of EPD (Estates) Limited
recorded said GRS 22 February 1979
3.3 Copy Renunciation by Lease of Logman Property Limited (formerly EPD
(Estates) Limited) in favour of City of Aberdeen District Council dated
9 October 1987
3.4 Copy Assignation by Torry Cold Store Limited with consent of City of
Aberdeen District Council in favour of Logman Property Limited recorded
said GRS 16 June 1982
3.5 Copy Assignation by Claben Limited with consent in favour of Logistics
Management Property Limited recorded said GRS 4 March 1981
3.6 Copy Agreement among ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ plc, ▇▇▇▇▇▇ Property Limited
and others recorded said GRS 21 August 1987
3.7 Copy Feu Charter by Corporation of City of Aberdeen in favour of
Aberdeen Grit Company Limited - 1952
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124
3.8 Copy Contract of Excambion between ▇▇▇▇▇▇ Abrasives Limited and the
Corporation of the City of Aberdeen dated 24 March and 14 April 1971
3.9 Copy Extract registered Partial Renunciation of Lease by Logman
Property Limited in Receivership in favour of City of Aberdeen District
Council recorded said GRS and registered both 28 July 1988
3.10 Copy Standard Security by Logman Property Limited in favour of Hong
Kong & Shanghai Banking Corporation recorded said GRS 15 February 1983
3.11 Copy Discharge thereof dated 20 October 1987 and recorded said GRS 2
February 1988
3.12 Copy Deed of Appointment of Receivers of Logman Property Limited dated
23 July 1986
3.13 Copy Assignation by Logman Property Limited in Receivership and its
Receivers in favour of ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ and Others recorded said GRS
22 January 1988
3.14 Copy Minute of Agreement recorded 11 January 1988 (Book 1312 Folio 55)
re 1.125 acres (rent review) dated 9 October 1987 and 5 January 1988
3.15 Copy Minute of Agreement between Logman Property Limited in
receivership and City of Aberdeen District Council (rent review) 1.47
acres under exception dated 9 October 1987 and 5 January 1988 and
recorded said GRS 11 January 1988
3.16 Search in Register of Charges against Logman Property Limited brought
down to 20 February 1988
3.17 Copy Search in Property and Personal Registers from 21 May 1938 to 28
July 1988
4 UNITS LOGMAN CENTRE, GREENBANK CRESCENT, EAST TULLOS ABERDEEN
4.1 Copy Extract Lease between ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ and Other and Brit Bit
Limited registered 30 November 1992 (Unit 2).
4.2 Copy Extract Lease between ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ and Other and Brit Bit
Limited registered 30 November 1992 (Unit 3)
4.3 Copy Extract Lease between ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ and Other and Brit Bit
Limited registered 30 November 1992 (two storey office block adjacent
to Unit 6)
4.4 Copy Extract Lease between ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ and Other and Brit Bit
Limited
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125
registered 30 November 1992 (first floor office suite at Unit 9)
4.5 Copy Extract Minute of Variation of Lease between ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
and Other and Brit Bit Limited registered 14 August 1997 (Unit 2)
4.6 Copy Extract Minute of Variation of Lease between ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
and Other and Brit Bit Limited registered 14 August 1997 (Unit 3)
4.7 Copy Extract Minute of Variation of Lease between ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
and Other and Brit Bit Limited 14 August 1997 (two storey office block
adjacent to Unit 6)
4.8 Copy Extract Minute of Variation of Lease between ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
and Other and Brit Bit Limited registered 14 August 1997 (first floor
office suite at Unit 9)
4.9 Notice by ▇▇▇▇ ▇▇▇ & Co. to Brit Bit Limited dated 23 March 2001 (Unit
2)
4.10 Notice by ▇▇▇▇ ▇▇▇ & Co. to Brit Bit Limited dated 23 March 2001 (Unit
3)
4.11 Notice by ▇▇▇▇ ▇▇▇ & Co. to Brit Bit Limited dated 23 March 2001 (two
storey block adjacent to Unit 6)
4.12 Notice by ▇▇▇▇ ▇▇▇ & Co. to Brit Bit Limited dated 23 March 2001 (first
floor office suite at Unit 9))
5 ▇▇▇▇ ▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
5.1 Copy Extract Lease between ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ and Others and Mudvac
(North Sea) Limited registered 30 September 1992
5.2 Copy Extract Sub-Lease between Mudvac (North Sea) Limited and Brit Bit
Limited registered 6 May 1994
5.3 Notice by ▇▇▇▇ ▇▇▇ & Co. to Mudvac (North Sea) Limited dated 23 March
2001
6. PREMISE AT SIR ▇▇▇▇▇▇▇ ▇▇▇▇▇ ROAD, ARBROATH
6.1 Copy Lease between Macintosh Structures Limited and BBL Downhole Tools
Limited (unsigned)
126
126
SCHEDULE
PART 8
INTELLECTUAL PROPERTY
PROPRIETOR NUMBER DESCRIPTION TERRITORY
Brit Bit Ltd EP0430989 Patent for Investment Casting Process BE,CH,
DE,FR,
UK,IT,
LI
Brit Bit Ltd GB2238736 Patent for Drill Bit Manufacturing Process UK
Brit Bit Ltd ▇▇▇▇▇▇▇▇▇ Patent for Drill Bit Manufacturing Process US
Brit Bit Ltd 1510795 Trade ▇▇▇▇ - BBL Company Logo (Class 7) UK
Brit Bit Ltd 1510785 Trade ▇▇▇▇ - Powercut (Class 7) UK
Brit Bit Ltd 1510792 Trade ▇▇▇▇ - Lateral Jet (Class 7) UK
Brit Bit Ltd GB2290813 Patent for Double Strike Nozzle UK
Brit Bit Ltd PCT/GB00/00234 - all PCT Full Patent Application for method of
contracting parties applying Diamond Gauge to PDC bit
nominated (Apparatus and method for mitigating wear
Australian - 21190/00 in downhole tools)
European - 00901232.9
Norwegian - 20004923
US - 09/647336
Canadian - 2,326,738
Brit Bit Ltd PCT/GB01/01814 Full Patent Application for Expandable Bit UK
Brit Bit Ltd Provisional application Provisional Patent Application for Bit
number 0104379.3 with Rotating Gauge
Brit Bit Ltd 2127393 Trade ▇▇▇▇ "BigRoll" Word ▇▇▇▇ (Class 7)
BBL Downhole PCT/GB/99/01816 Full Patent Application for DrillShoe
Tools Ltd US - 09/719317 3/Displaceable DrillShoe
Canadian - 2,334,741
Australian - 42794/99
European - 99955516.2
Norwegian - 20006303
BBL Downhole US - 09/556121 Full Patent Application for Shallow Water
127
127
Tools Ltd NB: ▇▇▇▇▇▇ ▇▇▇▇▇▇ Flow - Improvement Re. Subsea Drilling of
CO-APPLICANT Bore Holes
EP - 00303819.7
BBL Downhole Tools Ltd PCT/GB00/04704 Full Patent Application for DiamondBack
Reamer Shoe
BBL Downhole Tools Ltd PCT/GB00/04936 DrillShoe I and II (Casing Drill Shoe)
BBL Downhole Tools Ltd PCT/GB01/00039 Full Patent Application for SlickSleeve
Structural Constriction (Torque Reduction
Tool)
BBL Downhole Tools Ltd PCT/GB01/01506 Full Patent Application for Drill Bit
Nozzle
BBL Downhole Tools Ltd PCT/GB01/01512 Full Patent Application for Expandable
Reamer Shoe
Brit Bit Ltd GB2244523 Trade ▇▇▇▇ Application - DrillShoe
US76/140225
BBL Downhole Tools Ltd GB0029324.1 Provisional Patent Application for
Interlocking Thread
Enterprise Oil Plc EP0815342B Granted Patent for Improved Casing Shoe
Formalised in:
Netherlands
Italy
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SCHEDULE
PART 9
BASIS OF PREPARATION OF COMPLETION ACCOUNTS
The draft Completion Accounts and the draft NAV Statement shall be prepared on
the basis set out below and in Clause 3 of the Agreement.
1. BASIS OF PREPARATION
They are to be prepared on a consolidated basis and on the assumption
that BBL Australia is a wholly owned subsidiary of Target.
2. FIXED ASSETS
No account is to be taken of any revaluation of heritable, freehold or
leasehold property or any other fixed assets not reflected in the
Accounts. Disposals and acquisitions since the Management Accounts Date
should be taken into account. Depreciation should be taken into account
at rates consistent with those shown in the Accounts from the
Management Accounts Date up to the Completion Date.
No value is to be attributed to goodwill or any other intangible asset
or to any asset not used or capable of use in the Company's business
("Business") after Completion.
No value is to be attributed to any stocks of paper, packaging,
stationery, brochures or advertising material which are not used or
capable of use in the Business after Completion.
3. STOCK
Stocks (including stocks held on consignment) are to be valued at the
lower of cost and estimated net realisable value.
4. CURRENT ASSETS, ETC
(a) Current assets (including prepayments) are to be included at
book value after proper provisions have been made, save that
no value will be attributed to:-
(i) any asset or prepayment to the extent that it ceases
to have any value upon the share capital of the
Company ceasing to be owned by the Vendors; or
(ii) any surplus or other benefit which might accrue to
the Company in respect of any pension schemes; or
(iii) any tax losses, tax assets, available to the Company.
(b) Any debtors, except any Weatherford debtors and Target Group
Company debtors which at the Completion Date have been
outstanding for a period of 3 months or more from the earlier
of the due date for payment and the date of invoice shall be
deemed irrecoverable and shall be written off/provided against
in full, except to the extent that such debt is recovered
during the period between the Completion Date and the date
upon which the Net Asset
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Value has been agreed or determined in accordance with Clause
3 of the Agreement. For the purposes of this paragraph 4
"Weatherford" shall mean Weatherford and any subsidiary
undertaking of Weatherford.
5. LIABILITIES
(a) GENERAL
Proper provision shall be made for all liabilities (including
contingent liabilities) of the Company existing as at the
Completion Date (including without prejudice to the foregoing
generality appropriate provisions in respect of accrued
holiday pay, bonuses excluding the L500,000 bonus payable in
accordance with the letter referred to in paragraph 3.6 of
Part 3 of the Schedule to the Agreement ("the Employees
Bonus"), pension liabilities and other accruals, including
services invoiced but not yet performed).
(b) TAXATION
(i) Full and specific provision shall be made for all
Taxation due or accrued as at the Completion Date on
the assumption that the Completion Date is the end of
an accounting period, and on the assumption that
there are no tax losses available to the Company.
(ii) Full provision shall be made for deferred tax
(including any corporation tax on chargeable gains
that would arise on the sale on the Completion Date
of all chargeable assets of the Company at the values
attributed to them in the Accounts).
(c) CREDITORS
Creditors shall include:-
(i) full and specific provision for all future
obligations to make capital payments under finance
leases existing at the Completion Date relating to
the fixed assets included in the balance sheet;
(ii) full and specific provision on an accrual basis in
respect of all bonuses (except the Employees Bonus),
discounts, overrider payments, and similar matters in
respect of which a provision would normally be made
having regard to the expected outcome for the period
to which they relate;
(iii) the full amount of all sums owed by the Company to
any of the Vendors; and
(iv) all future obligations to make payments under finance
arrangements in respect of consignment stocks and
other stocks.
(v) dividends accrued and payable to shareholders shall
be as provided for in the Accounts.
(vi) no account shall be taken of the premium payable on
the redemption of the Preference Shares.
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(d) MISCELLANEOUS
there shall be included as a liability the full amount of any
loss anticipated to arise in respect of any contract with any
customer of the Company.
6. GENERAL
(A) So far as not inconsistent with the above the Completion
Accounts should:-
(1) save in so far as inconsistent with SSAPs, FRSs and
accounting principles and policies generally accepted
in the United Kingdom as at the Completion Date,
apply the same accounting principles and policies as
were stated to have been applied in the preparation
of the Accounts;
(2) apply the SSAPs, FRSs and accounting principles and
policies generally accepted in the United Kingdom (or
the country of incorporation in the case of the
Non-UK Subsidiaries) current at the Completion Date
unless the application of the same accounting
principles and policies as were stated to have been
applied in the preparation of the Accounts would be
more prudent when such more prudent principles and
policies shall prevail.
(B) No increase or decrease shall be made to any reserves (other
than the profit and loss account balance) as stated in the
Accounts unless there shall have occurred since the Accounts
Date a change in circumstances which clearly justifies such
adjustment.
(C) No adjustment shall be made to the value of any asset nor
shall any liability or provision be made or increased as a
result of or by reference to the amount of the consideration
being paid for the Sale Shares.
(D) In calculating the assets, there should be excluded the amount
of any cash or other assets representing any profits of a
capital or extraordinary or exceptional nature or any profit
arising in respect of any contract between the Company and any
of the Vendors.
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SCHEDULE
PART 10
DEFINITIONS AND INTERPRETATION
1. In this Agreement the following words and expressions shall bear the
meanings given to them below:
"the 1988 Act" means the Income and Corporation Taxes ▇▇▇
▇▇▇▇;
"the 1993 Act" means the ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇;
"the 1995 Act" means the ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇;
"Accounts" means the audited balance sheet of each UK
Company as at the Accounts Date and the
audited profit and loss account of each UK
Company for the year ended on the Accounts
Date together with the directors' and
auditors' reports and notes thereon and the
unaudited balance sheet of BBL Australia as
at the Accounts Date and the unaudited
profit and loss account of BBL Australia for
the year ended on the Accounts Date together
with the compilation report, statement by
directors and notes thereon;
"Accounts Date" means 30 June 2000 in the case of BBL
Australia and 31 March 2000 in the case of
the UK Companies;
"Acquisition" means the acquisition of the Sale Shares by
the Purchaser pursuant to this Agreement;
"Agreed Form" means a form agreed between the parties for
the purposes of this Agreement and having
been signed or initialled for identification
purposes by the Purchaser's Solicitors and
the Vendors' Solicitors;
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132
"the Basis of Preparation means the basis set out in Part 9 of the
of Completion Accounts" Schedule;
"BBL Australia" means BBL Aust. Pty Limited;
"Business" means the businesses carried on by the
Target Group at Completion;
"Business Day" means any day (other than a Saturday or
Sunday) on which clearing banks are open for
normal business in Edinburgh;
"Completion" means completion of the matters set out in
Part 3 of the Schedule;
"Completion Date" means the date of this Agreement;
"the Completion Accounts" means the consolidated balance sheet of
Target as at the Completion Date and the
consolidated profit and loss account of
Target for the period from the Management
Accounts Date up to the Completion Date
which are to be prepared in accordance with
the terms of the Basis of Preparation of
Completion Accounts, and including the Final
Indebtedness Statement;
"Connected Person" shall have the meaning set out in Section
839 of the 1988 Act but shall specifically
include spouses and shall specifically
exclude brothers, sisters, ancestors and
lineal descendants;
"Consideration" means the aggregate of:- (a) US Dollars one
million ($1,000,000) and (b) that number of
whole shares of Weatherford Common Stock
which at the Weatherford Share Price is
equal in value to either:
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133
(i) where the Weatherford Share Price
is less than fifty US Dollars ($50)
nineteen million four hundred and
fifty thousand US Dollars
($19,450,000) less the Indebtedness
as at Completion as certified in
the Indebtedness Statement; or
(ii) where the Weatherford Share Price
is deemed to be fifty five US
Dollars ($55) twenty one million
five hundred thousand US Dollars
($21,500,000) less the Indebtedness
as at Completion as certified in
the Indebtedness Statement; or
(iii) where the Weatherford Share Price
is greater than sixty US Dollars
($60) twenty three million five
hundred and fifty thousand US
Dollars ($23,550,000) less the
Indebtedness as at Completion as
certified in the Indebtedness
Statement
"Covenantors" means Mr Haites, ▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇▇ and ▇▇
▇▇▇▇▇▇▇.
"Disclosure Bundle" means the two identical indexed bundles of
documents collated by or on behalf of the
Warrantors, the indexes of which have been
signed for identification by the Vendors'
Solicitors and the Purchaser's Solicitors;
"Disclosure Letter" means the letter of the same date as this
Agreement from the Warrantors to the
Purchaser accepted in writing by the
Purchaser as disclosing:-
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134
(a) information constituting exceptions
to the Warranties; and
(b) particulars of other matters
referred to in this Agreement.
"Employee" means employees of the Target Group;
"encumbrance" includes any option, right to acquire,
restriction, mortgage, pledge, lien or other
form of security or encumbrance;
"Environmental Law" means all laws, regulations and applicable
codes of practice, concerning the protection
of human health or the environment or the
conditions of the work place or the
generation, transportation, storage,
treatment or disposal of Hazardous
Substances having the force of law at the
Completion Date;
"Environmental Licence" means any permit, licence, authorisation,
consent or other approval required by any
Environmental Law for the conduct of the
Business or the occupation of the
Properties;
"Estimated NAV" means L1,786,473;
"Event" includes any act, omission, transaction or
circumstance (including any of such matters
provided for hereunder);
"FA" or "F(No2)A" means the relevant Finance Act or Finance
(No. 2) Act;
"Fair Market Value" means the average closing sales price of
Weatherford Common Stock on the New York
Stock Exchange for the ten consecutive
Business Days ending on the second Business
Day prior to the Completion Date as
published in the Financial Times;
"Final Completion Date" means the tenth Business day after the Net
Asset
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135
Value has been agreed or determined in
accordance with Clause 3 of this agreement;
"Final Indebtedness means the statement (comprising part of the
Statement" Completion Accounts) certifying the
Indebtedness as at the Completion Date, in
the form contained in Part 4 of the
Schedule;
"Floating Charges" means the Bond and Floating Charge granted
by Brit Bit Limited in favour of the
Governor and Company of the Bank of Scotland
dated 2 June 1988 and registered 8 June 1988
and the Floating Charge granted by BBL
Downhole Tools Limited in favour of the
Governor and Company of the Bank of Scotland
dated 8 June 2000 and registered 14 June
2000;
"FRS" means a Financial Reporting Standard in
force at the date hereof as regulated by the
Accounting Standards Board;
"Pension Scheme" shall mean the Group Personal Pension Policy
established by the Target Group with
Scottish Equitable Life Assurance Society
with effect from 1 April 1992 and currently
governed by the Standard Policy Terms and
Conditions as detailed in the [Scottish
Equitable Personal Pension Scheme approval
letter;]
"▇▇▇▇▇▇ Agents" means Ledingham Chalmers, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇-▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇;
"▇▇▇▇▇▇ Agents Account" means Ledingham Chalmers Client Account
number 00333044 (sort code 80 12 08) at Bank
of Scotland, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ in
the name of the ▇▇▇▇▇▇
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136
Agents;
"Hazardous Substances" means any natural or artificial substance
(whether in a solid or liquid form or in a
form of a gas or vapour and whether alone or
in combination with any other substance)
capable of causing harm to man or any other
living organism supported by the
environment, or damaging the environment,
including but not limited to any hazardous,
toxic or dangerous waste;
"the Independent means the firm of accountants, if any,
Accountants" appointed pursuant to Clause 3.4;
"Indebtedness" means the aggregate amount of the
indebtedness for borrowed money of the
Target Group as at close of business on the
last Business Day immediately preceding the
Completion Date excluding indebtedness as
between members of the Target Group but
including bank overdrafts and loans, debt
factoring, liabilities under acceptance or
documentary credits, debentures, loans, loan
stocks, bonds, notes and bills of exchange,
hire purchase commitments and obligations
under finance leases, discounted debts,
liability for the purchase of assets on
deferred terms, dividends payable on or
after the Completion Date (other than any
such dividends waived pursuant to Clause 2.2
of this Agreement) and other such
transactions having the commercial effect of
borrowing together with any costs associated
with payment of any such indebtedness
(provided that indebtedness shall be deemed
to include Outstanding
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137
Payables) LESS the aggregate amount of (a)
all cash balances held by the Target Group,
(b) Outstanding Receivables, and (c) any
amounts due to any member of the Target
Group by the Purchaser or any member of the
group of companies to which the Purchaser
belongs and which have been outstanding for
60 days or more, in each case as at close of
business on the same date.
"Indebtedness Excess" means the amount, if any, by which the
Indebtedness shown in the Final Indebtedness
Statement exceeds the amount shown in the
Indebtedness Statement;
"Indebtedness Shortfall" means the amount, if any, by which the
Indebtedness shown in the Final Indebtedness
Statement is less than the amount shown in
the Indebtedness Statement;
"the Indebtedness means the signed statement from the
Statement" Warrantors addressed to the Purchaser
certifying the Indebtedness in the form
contained in Part 4 of the Schedule (with
supporting appendices in the Agreed Form);
"Indemnities" means the indemnities by the Warrantors set
out in Clauses 16 and 20.3 of this
Agreement;
"IPR" means all patents, registered trade marks,
registered designs and applications and the
right to apply for any of the foregoing,
copyright, design right, topography rights,
database rights, utility model rights,
rights in the nature of copyright, trade,
business and company names and marks,
know-how, rights in proprietary and
confidential information, rights in
inventions and all other industrial,
commercial and intellectual property rights
and all other rights or
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138
forms of protection having equivalent effect
to any of the foregoing arising anywhere in
the world;
"IPR Warranties" means the Warranties contained in Part 5E of
the Schedule;
"The Lease Documentation" means the leasehold documents detailed in
Part 7C of the Schedule;
"Life Scheme" means The Brit Bit Limited Group Life
Assurance Scheme established under a trust
deed dated 29 December 1999 the benefits of
which are currently insured under a policy
with Royal and Sun Alliance;
"Losses" means losses, liabilities, damages fines,
costs and expenses (including, without
limitation, all professional advisory costs
incurred in connection with the matter in
question;
"Malaysian Company" means BBL Products (M) SND BHD;
"Management Accounts" means the consolidated management accounts
of the Target Group for the period from the
Accounts Date to the Management Accounts
Date;
"Management Accounts means 28th February 2001;
Date"
"Members" shall mean the Employees, Directors, ex
Employees and ex Directors of the Target
Group who are entitled to benefit under the
Pension Schemes;
"Minority Interest" means the 1 Ordinary Share of $1 in BBL
Australia registered in the name of ▇▇
▇▇▇▇▇▇;
"▇▇ ▇▇▇▇" means ▇▇▇▇▇ ▇▇▇▇, residing at ▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇;
"Mr Haites" means Binnert Ruerd Haites, residing at ▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, Aberdeen;
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139
"▇▇ ▇▇▇▇▇▇▇" means ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇,
residing at Burn ▇'▇▇▇▇ Farm, Downies,
Portlethen, Aberdeen;
"▇▇ ▇▇▇▇▇▇▇" means ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, residing at
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇;
"the NAV Statement" means the statement of the Vendor's
Accountants as to the amount which in their
opinion is the amount of the Net Asset
Value, or, in the event of the operation of
Clause 3.4, the certificate of the
Independent Accountants as to the amount
which in their opinion is the amount of the
Net Asset Value;
"Net Asset Value" means the total assets less the total
liabilities (excluding any minority
interests) of the Target Group on a
consolidated basis as at the close of
business on the Completion Date, calculated
in accordance with and after taking account
of, the instructions contained in the Basis
of Preparation of Completion Accounts;
"Non-UK Properties" means the Properties, particulars of which
are set out at Part 7B of the Schedule;
"Non-UK Subsidiaries" means the overseas trading subsidiaries and
undertakings, details of which are set out
in Part 2B of the Schedule;
"OPRA" means the Occupational Pensions Regulatory
Authority;
"Outstanding Payables" means:-
(a) all cheques which have been drawn
by the Target Group but which have
not been presented or which remain
uncleared at the Completion Date;
and
(b) all telegraphic or electronic
transfers of
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140
funds which have been instructed by
the Target Group but remain
incomplete at the Completion Date;
and
(c) all trade creditors accounts
(excluding VAT) of the Target Group
at the Completion Date (with the
exception of the invoice from
Diamond Europ for approximately
$10,000 in respect of test products
supplied by Diamond Europ), to the
extent that the same have been
outstanding for a period of 60 days
or more from the date of the
relevant invoice;
"Outstanding Receivables" means:-
(a) all cheques which have been
deposited by and are in favour of
any member of the Target Group but
which remain uncleared at the
Completion Date; and
(b) all telegraphic or electronic
transfers of funds which have been
instructed in favour of any member
of the Target Group but remain
incomplete at the Completion Date.
"the Overpayment" means the amount, if any, by which the Net
Asset Value is less than the Estimated NAV;
"the Properties" means the Properties, particulars of which
are set out in Part 7A of the Schedule;
"PSO" means the Pension Schemes Office of the
Inland Revenue;
"Purchaser's Group" means the Purchaser and any person which is
from
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141
time to time a group undertaking of the
Purchaser;
"Purchaser's Solicitors" means ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇.▇.,▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇;
"Rate" means the rate of one per centum per annum
above the base rate from time to time of the
Bank of Scotland;
"Registration Rights means the registration rights agreement
Agreement" between certain of the parties in the Agreed
Form;
"Relevant Claim" means any claim under the Warranties, other
than a claim under the Title Warranties.
"Sale Shares" means the Target Shares and the Minority
Interest;
"SEC" means the United States Securities and
Exchange Commission, or any successor agency
thereto;
"Securities Act" means the United States Securities Act of
1933, as amended, or any successor
legislation thereto (including the rules and
regulations promulgated thereunder);
"Schedule" means the schedule comprising Parts 1 to 10
(inclusive) which forms part of this
Agreement;
"Scottish Enterprise means Scottish Enterprise and any holding
Group" company or subsidiary of Scottish Enterprise
and any company, corporation or statutory
body which has acquired the whole or any
part of the undertaking of Scottish
Enterprise and any holding company or
subsidiary of any such company, corporation
or statutory body;
"Shelf Registration" shall have the meaning given to it in the
Registration Rights Agreement;
"SSAP" means a Statement of Standard Accounting
Practice in force at the date hereof as
regulated by the Accounting Standards Board
Limited;
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142
"Subsidiaries" means the companies and undertakings details
of which are given in Part 2 of the Schedule
and "Subsidiary" shall mean any of them;
"Taxation" shall have the meaning given to it in the
Tax Deed, together with any UK stamp duty
and penalties and interest in respect
thereof;
"Taxation Authority" shall have the meaning given to it in the
Tax Deed;
"the Target Group" means the Target and the Subsidiaries and
"member of the Target Group" and "Target
Group Company" means any of them;
"Target Group means all IPR owned by or registered or
Intellectual Property" applied for in the name of any member of the
Target Group;
"Target Shares" means the 62,500 Ordinary Shares of L1 each,
161,100 Ordinary Shares of 50p each, 147,000
Ordinary Shares of 33 1/3 ▇▇▇▇▇ each,
949,006 Ordinary Shares of 15 ▇▇▇▇▇ each,
40,000 Cumulative Convertible Participating
Preferred Ordinary Shares of L1 each,
117,000 Cumulative Convertible Participating
Preferred Ordinary Shares of 50 ▇▇▇▇▇ each,
198,000 Cumulative Convertible Participating
Preferred Ordinary Shares of 33 1/3 ▇▇▇▇▇
each, 279,450 10% Cumulative Redeemable
Preference Shares of L1 each and 65,700 10%
Cumulative Redeemable Second Preference
Shares of L1 each which will together
comprise the entire issued share capital of
the Target at the Completion Date;
"Tax Deed" means a deed of covenant between certain of
the parties in the Agreed Form;
"Tax Warranties" means the Warranties set out in Part 5F and
Part 5G of
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143
the Schedule;
"TCGA" means the Taxation of Chargeable Gains ▇▇▇
▇▇▇▇;
"Territory" means anywhere in the world;
"Title Warranties" means the representations and warranties
contained in Part 5A of the Schedule;
"Threshold" means L150,000;
"Transaction" shall have the meaning given to it in the
Tax Deed;
"UK Companies" means the Target and those subsidiaries
listed in Part 2A of the Schedule;
"VATA" means the Value added Tax ▇▇▇ ▇▇▇▇;
"Vendors" means the Target Shareholders, Scottish
Enterprise and ▇▇ ▇▇▇▇▇▇;
"the Vendors' means Acumen Accountants and Advisors
Accountants" Limited and in the case of BBL Australia
▇▇▇▇ & Plaistowe;
"the Vendors' means Mr Haites or such other person as may
Representative" be specified in writing by the Vendors;
"Vendors' Solicitors" means ▇▇▇▇▇ & Williamsons, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇ ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇.;
"Vendors' Solicitors means ▇▇▇▇▇ & Williamsons Client account
Account" number 74879USD01 (sort code 80 73 30) at
Bank of Scotland, ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
in name of the Vendors' Solicitors;
"Venezuelan Company" means BBL de Venezuela, S.A.;
"Warranties" means the representations and warranties
contained in Clause 7 and Part 5 of the
Schedule;
"Warrantors" means ▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇▇, ▇▇
▇▇▇▇▇▇▇ and ▇▇ ▇▇▇▇▇▇▇
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144
"Weatherford Common means the common stock of Weatherford, $1.00
Stock" par value;
"Weatherford Material means any change or effect that,
Adverse Effect" individually or when taken together with all
such other changes or effects, is or would
reasonably be considered to be materially
adverse to the condition, financial or
otherwise, results of operation, prospects,
business, properties, assets or liabilities
of Weatherford and its subsidiaries, taken
as a whole;
"Weatherford Share Price" means either:-
(i) Fair Market Value where Fair Market
Value is less than fifty US Dollars
($50) per Weatherford Share; or
(ii) Fifty five US Dollars ($55) where
Fair Market Value is equal to or
greater than fifty US Dollars ($50)
but less than or equal to sixty US
Dollars ($60) per Weatherford
Share; or
(iii) Fair Market Value where Fair Market
Value is greater than sixty US
Dollars ($60) per Weatherford
Share.
"Weatherford Shares" means the shares of Weatherford Common Stock
to be issued to the Vendors as the
Consideration pursuant to this Agreement;
"1988 Act" means the Income and Corporation ▇▇▇▇▇ ▇▇▇
▇▇▇▇;
"1993 Act" means the ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇;
"1995 Act" means the Pensions ▇▇▇ ▇▇▇▇.
2. Words and expressions defined in the Companies ▇▇▇ ▇▇▇▇ shall bear the
same meanings in this Agreement.
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3. The masculine gender shall be deemed to include the feminine and neuter
and the singular number shall be deemed to include the plural and vice
versa.
4. The Clause headings, use of bold or italic type and contents pages in
this Agreement are for convenience of reference only and shall not
affect the construction or interpretation hereof.
5. References to Recitals, Clauses, and Parts of the Schedule are to the
Recitals and Clauses of and parts of the Schedule to this Agreement and
references to paragraphs are to the paragraphs of a Part of the
Schedule.
6. Reference in this Agreement to any statute or statutory provision shall
include such statute or statutory provision as from time to time
amended, re-enacted or consolidated whether before, on or (in the case
of re-enactment (in identical terms) or consolidation only) after the
date of this Agreement and shall include statutory instruments or other
subordinate legislation made under the relevant statute, provided that
no such amendment, re-enactment, consolidation, statutory instrument or
other subordinate legislation made after the date of this Agreement
shall increase the liability of any party.
7. References in this Agreement to persons shall include references to
firms, corporations or unincorporated associations.
8. For the purposes of Part 5 of the Schedule any statement in this
Agreement which is qualified by the expressions "so far as the
Warrantors are aware" or "to the best of the knowledge, information and
belief of the Warrantors" or something similar shall (unless expressly
stated otherwise) be deemed to include an additional statement that it
has been made after diligent, reasonable and proper enquiries by the
Warrantors and any matter within the knowledge or awareness of any
officer or any member of the Target Group shall be deemed to be within
the knowledge or awareness of the Warrantors.
9. Words and expressions defined in the Tax Deed and not defined in this
Agreement
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shall bear the same meaning in this Agreement.
10. Where obligations are expressed as being undertaken jointly, and
notwithstanding any provision of law to the contrary, the liability of
the obligors shall be pro rata (in accordance with the percentages set
out in column 5 of Part 1C of the Schedule) and not in solidum.
147
SPA 3/7/01
SALE AND PURCHASE AGREEMENT
AMONG
(1) BINNERT RUERD HAITES AND OTHERS
(2) SCOTTISH ENTERPRISE
(3) ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
(4) ▇▇▇▇▇▇▇▇▇▇▇ AUSTRALIA PTY. LIMITED
AND
(5) ▇▇▇▇▇▇▇▇▇▇▇ INTERNATIONAL, INC.
RELATING TO THE SALE AND PURCHASE OF THE
ENTIRE ISSUED SHARE CAPITAL OF BRIT BIT LIMITED
[LOGO]
▇▇▇▇▇▇▇ ▇▇▇▇▇ W.S.
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
TEL ▇▇▇▇ ▇▇▇ ▇▇▇▇
FAX ▇▇▇▇ ▇▇▇ ▇▇▇▇
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CONTENTS
CLAUSE PAGE
1. Definitions and Interpretation/Schedule
2. Sale and Purchase
3. Instruction and calculation of Net Asset Value
4. Consideration
5. Completion
6. Final Completion
7. Warranties and Undertakings by the Warrantors
8. Warranties by the Purchaser and Weatherford; Registration Rights;
9. Claims Procedure
10. Protection of Goodwill
11. Release of Liability and Guarantees
12. Effect of Completion
13. Remedies and Waivers
14. Assignation
15. Further Assurance
16. Specific Indemnities
17. Securities Law Matters
18. Notices
19. Announcements
20. Costs and Expenses
21. Invalidity
22. General
23. Entire Agreement
24. Governing Law and Jurisdiction
SCHEDULE
Part 1A Target Group Structure
Part 1B The Target
Part 1C Shareholdings in Target
Part 2A The UK Subsidiary
Part 2B The Non-UK Subsidiaries
Part 3 Completion Obligations
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149
Part 4 Indebtedness Statement
Part 5A Title Warranties
Part 5B General Warranties
Part 5C Pension Warranties
Part 5D Property and Environmental Warranties
Part 5E Intellectual Property Warranties
Part 5F Tax Warranties
Part 5G International Tax Warranties
Part 6 Vendor Limitations
Part 7 The Properties
Part 8 Intellectual Property
Part 9 Basis of Preparation of Completion Accounts
Part 10 Definitions and Interpretation
AGREED FORM DOCUMENTS
AF1 Tax Deed
AF2 Registration Rights Agreement
AF3 Indebtedness Statement
AF4 Irrevocable power of attorney relating to the voting of shares
AF5 Resignation letter of directors/secretary
AF6 Form of Proxy
AF7 Service Agreements
AF8 Stock Option Agreements
AF9 Employee Bonus Letter