DATED 17th April 2000
-----------------------------------------------------
XCEL POWER SYSTEMS LIMITED
and
THE VENDORS (as defined herein)
and
THE WARRANTORS (as defined herein)
SHARE PURCHASE AGREEMENT
THE BELIX COMPANY LIMITED
▇▇▇▇▇ ▇▇▇▇▇
&
▇▇▇▇▇▇
SOLICITORS
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ - ▇▇▇▇▇▇ - ▇▇▇▇ ▇▇▇
Index to Clauses
1 Interpretation
2 Agreement for sale
3 Purchase consideration
4 Adjustments to purchase consideration
5 Conditions and rescission
6 Completion and post-completion
7 Warranties and undertakings
8 Shareholders' Loan
9 Dividend
10 Pensions
11 Restrictive agreement
12 Warrantors' protection
13 General
14 Costs
15 Entire agreement
16 Notice
17 Effect of Completion
18 Counterparts
19 Set-off
20 Applicable law
Schedule 1 Vendors' holdings
Schedule 2 Details of group companies
Schedule 3 Warranties
Schedule 4 Deed of indemnity Schedule 5 Short particulars of the properties
Schedule 6 Pension arrangements Schedule 7 Warrantors' protection provisions
2
THIS AGREEMENT is made the 17th day of April 2000
BETWEEN:
1 'The Vendors': the persons whose names and addresses are set out in column
1 of Part 1 of Schedule 1.
2 'The Purchaser': Xcel Power Systems Limited (registered no 0575679) whose
registered ofFace is at ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇ ▇▇▇.
3 'The Warrantors': the persons whose names and addresses are set out in Part
2 of Schedule 1
Whereas:
(A) The Belix Company Limited (registered no 1567245) ("the Company") was
incorporated in England and Wales on 10th June 1981 under the Companies
Acts 1948 to 1980 with the name Techview Limited. It changed its name on
24th December 1991 to The Belix Company Limited.
(B) The Vendors are the legal owners of the entire issued share capital of the
Company in the amounts set out in column (2) of Part 1 of Schedule I and
have the right, power and authority to sell and transfer the Shares set out
opposite their respective names in column (2) of Part 1 of Schedule 1 to
the Purchaser, together with the legal and beneficial ownership thereto
with full title guarantee free from any claims, charges, liens,
encumbrances or equities that will prevent the sale of such of the Shares
or the legal and beneficial interest therein to the Purchaser or which may
attach thereto after such sale.
(C) The Vendors are willing to sell and the Purchaser is willing to purchase
the Shares on the terms and subject to the conditions of this agreement.
(D) The Warrantors are entering into this agreement for the purpose of giving
the Warranties and certain covenants.
Operative provisions:
1. INTERPRETATION
1.1 In this agreement, including the Schedules other than Schedule 4:
1.1.1 the following words and expressions have the following meanings, unless
they are inconsistent with the context:
'AGREED FORM' the written form agreed between the parties on or prior
to the date of this agreement and initialled for the purpose of
identification by their respective solicitors
'BAD LEAVER' means:
(i) a Leaver where the cessation of employment is as a result of
the relevant Vendor
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(a) resigning (other than a termination as a result of incapacity
due to ill health (save where such ill-health arises as a result of an
abuse of alcohol or drugs) or;
(b) being dismissed in circumstances where the Company is not
liable to pay such Leaver any damages or compensation for the cessation
of his employment or to the extent damages or compensation are payable,
such damages or compensation relate to the decision of an industrial
tribunal that the procedure contained in the clause dealing with
grievance procedures of that Leaver's service agreement with the
Company, or any other procedure adopted by the Company, was not a fair
and proper procedure;
For the avoidance of doubt, a Leaver is not a Bad Leaver where the
board of directors of the Purchaser accepts his resignation;
'CA' Companies ▇▇▇ ▇▇▇▇
'CAA' Capital ▇▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇
'COMPANIES ACTS' CA, the former Companies Acts (within the meaning of
CA s 735(1)) and the Companies ▇▇▇ ▇▇▇▇
'COMPANY' The Belix Company Limited more particulady detailed in Part 1
of Schedule 2
'COMPANY'S AUDITORS' KPMG at ▇▇ ▇▇▇ ▇▇▇, ▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇.
'COMPLETION' completion of the purchase of the Shares in accordance
with clause 6
'COMPLETION ACCOUNTS' the consolidated balance sheet of the Group
Companies as at the Effective Date contained within the management
accounts of the Group Companies for the period from 1st June 1999 to
the Effective Date
'COMPLETION DATE' the date of actual completion of the matters set out
in clause 6
'DEBENTURE' the debenture in the Agreed Form to be granted by the
Purchaser to the Vendors as security for the Shareholders' Loan, the
Dividend and the part of the consideration referred to in clause 3.1.2
by way of a fixed and floating charge over the assets of the Purchaser
(which for the avoidance of doubt shall exclude the Group Companies)
and ranking behind the security granted by the Purchaser to its bankers
as determined by a deed of priority in the Agreed Form
'DEED OF INDEMNITY' a deed in the form set out in Schedule 4
'DIRECTORS' the persons specified as directors of the Company in Part 1
of Schedule 2
'DISCLOSURE LETTER' the disclosure letter of the same date as this
agreement from the Warrantors to the Purchaser
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'DIVIDEND' L93,000 being the aggregate of the dividends on the
issued ordinary shares of the Company declared on 30th June 1998 and
2nd February 1999 respectively but which remains unpaid as at the date
of this agreement
'EFFECTIVE DATE' 31st March 2000
'FA' Finance Act
'FRS' a financial reporting standard issued by The Accounting Standards
Board Limited or an SSAP
'GOOD LEAVER' any Leaver other than a Bad Leaver;
'GROUP COMPANIES' the Company and its Subsidiaries for the time being
and 'GROUP COMPANY' shall mean any of them
'ICTA' Income and Corporation Taxes ▇▇▇ ▇▇▇▇
'INTELLECTUAL PROPERTY RIGHTS' patents, patent applications, know-how,
trade marks, trade ▇▇▇▇ applications, trade names, registered designs,
copydght or other similar intellectual or commercial right
'ITA' Inheritance Tax ▇▇▇ ▇▇▇▇
'LAST ACCOUNTS DATE' 31 May 1999 (being the date to which the Principal
Accounts have been prepared)
'LEAVER' any Vendor who is employed by the Company or another member of
the Xcel Group immediately following Completion and who dies or who
ceases to be an employee of the Company or such other member of the
Xcel Group. In this definition and in the definition of "Bad Leaver"
any reference to the date of cessation of employment (or similar) shall
be the date upon which the relevant Vendor gives or is given notice of
termination of his contract of employment
'LENDERS' those persons whose names and addresses appear in Part 3 of
Schedule 1
'NET ASSETS' the aggregate nominal value of the issued share capital of
the Company plus or minus the amount standing to the credit of or
debited to reserves (including profit and loss account and capital
redemption reserve account but before dividends and taxation), as shown
in the Completion Accounts
'PLANNING ACTS' as defined in the Town and Country ▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇, s
336
'PRINCIPAL ACCOUNTS' the audited balance sheet as at the Last Accounts
Date and audited profit and loss account for the year ended on the Last
Accounts Date of each Group Company, including in the case of the
Company the audited consolidated balance sheet as at that date and the
audited consolidated profit and loss account for that year and the
directors' report and notes
5
'PROPERTIES' the properties of the Group Companies shortly described in
Schedule 5
'PURCHASER'S SOLICITORS' ▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇▇▇ of ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
'SALES' the aggregate amount (excluding VAT) invoiced by Xcel Group in
each of the calendar years ending 31 December 2000 and 31st December
2001
'SHARES' the 60,000 ordinary shares of L1 each and the 40,000
cumulative convertible participating preferred ordinary shares of
L1 each in the capital of the Company comprising the whole of its
issued and allotted share capital
'SHAREHOLDERS' LOAN' a loan made by the Lenders to the Company of which
L124,381.26 remains outstanding as at the date of this agreement
in the proportions set out in Part 3 of Schedule 1 as documented in a
loan agreement a copy of which is set out in Appendix 1
'SUBSIDIARIES' the companies detailed in Part 2 of Schedule 2 and
'SUBSIDIARY' shall mean any one of them
'TAXATION' the same meaning as in the Deed of indemnity
'TCGA' Taxation of Chargeable Gains ▇▇▇ ▇▇▇▇
'TMA' Taxes Management ▇▇▇ ▇▇▇▇
'VATA' Value Added Tax ▇▇▇ ▇▇▇▇
'VENDORS' SOLICITORS' ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇ ▇▇▇
'WARRANTIES' the warranties and undertakings of the Warrantors
contained in clause 7 and Schedule 3 'WARRANTY CLAIM' any claim made by
the Purchaser for breach of any of the Warranties or any claim made by
any Group Company under the Deed of Indemnity
'XCEL GROUP' the Purchaser and the Group Companies
1.1.2 all references to a statutory provision shall be construed as including
references to:
(a) any statutory modification, consolidation or re-enactment
(whether before or after the date of this agreement) for the
time being in force;
(b) all statutory instruments or orders made pursuant to a
statutory provision;
(c) any statutory provisions of which a statutory provision is a
modification, consolidation or re-enactment;
1.1.3 any reference to the Vendors or Warrantors includes, where appropriate,
their personal representatives;
6
1.1.4 a reference to an SSAP is a reference to a statement of standard
accounting practice adopted by The Accounting Standards Board Limited;
1.1.5 except where the context otherwise requires words denoting the singular
include the plural and vice versa; words denoting any one gender include all
genders; words denoting persons include firms and corporations and vice versa;
1.1.6 unless otherwise stated, a reference to a clause or sub-clause or a
Schedule is a reference to a clause or a sub-clause of or a Schedule to this
agreement.
1.2 Clause headings in this agreement and in the Schedules are for ease of
reference only and do not affect the construction of any provision.
2. AGREEMENT FOR SALE
2.1 Subject to the terms and conditions of this agreement each of the
Vendors shall sell the number of Shares set out opposite their respective names
in column (2) of Part I of Schedule 1 with full title guarantee and the
Purchaser shall purchase the Shares free from all claims charges liens
encumbrances options rights of pre-emption or equities that will prevent the
sale of such of the Shares or the legal and beneficial interest therein to the
Purchaser or which may attach thereto after such sale with effect from the
Completion Date.
2.2 Each of the Vendors hereby waives any pre-emption rights he may have in
relation to any of the Shares under the articles of association of the Company
or otherwise.
3. PURCHASE CONSIDERATION
3.1 The purchase consideration for the Shares shall (subject to adjustment
pursuant to the provisions of clause 4.4) be the aggregate of:
3.1.1 the sum of L500,000 which shall be paid in cash at Completion;
and
3.1.2 an amount equal to 5% per cent of the Sates in each of the two years
ending on the 31st December 2000 and 31st December 2001 which amounts shall be
paid as provided in clause 4.6.
3.2 The Vendors shall be entitled to the purchase consideration in
proportion to their holdings of the Shares for which purpose all of the Shares
shall rank equally.
4. ADJUSTMENTS TO PURCHASE CONSIDERATION
4.1 The Purchaser and the Warrantors shall jointly use all their respective
reasonable endeavours to procure that as soon as practicable and in any event no
later than the 31st May 2000 the Completion Accounts shall be prepared by the
Company on the basis of the same accounting standards and principles as utilised
in the preparation of the management accounts of the Group Companies in the
period of 12 months immediately preceding the Effective Date.
7
4.2 Forthwith after preparation of the Completion Accounts copies thereof
shall be circulated to the parties and if the Vendors and the Purchaser are
unable to agree the Net Assets thereby disclosed within 28 days of the
distribution of the Completion Accounts to the parties they shall be referred to
an independent chartered accountant to be nominated in the absence of agreement
between the Vendors and the Purchaser by the President for the time being of the
Institute of Chartered Accountants of England and Wales whose decision (acting
as an expert and not as an arbitrator) as to the amount of the Net Assets shall
(in the absence of manifest error) be final and binding on the parties. The
costs of the said accountant shall be borne by the parties in such proportion as
the said accountant shall determine PROVIDED that it is agreed that 3i plc's
maximum contribution to such costs shall not exceed L2,500 (including any
interest payable) or 20% of such costs (whichever is the lesser) and Barrington
House Nominees Limited's maximum contribution to costs shall not exceed
L2,500 (including any interest payable) or 20% of such costs (whichever is
the lesser), In the event that any of the Vendors' proportion of the said
accountant's costs are outstanding and unpaid as a result of the maximum cap as
referred to above in this clause in relation to the contributions of 3i plc and
Barrington House Nominees Limited such outstanding and unpaid costs shall be
paid by the Warrantors in the proportions set out against their names in Column
2 of Part 2 of Schedule 1.
4.3 The parties shall disclose to the Company and to the said independent
chartered accountant (if applicable) all relevant facts and information for the
purposes of preparing the Completion Accounts and determining the Net Assets.
4.4 If the Net Assets amount to less than L205,883 the purchase
consideration for the Shares shall be reduced by an amount not exceeding
L500,000 (including any interest payable thereon) provided that in the
case of 3i plc and Barrington House Nominees Limited their total liability
pursuant to this clause 4.4 and 4.5 shall not exceed L50,000 each
including any interest payable thereon, equal to the amount of that shortfall
and the amount of the reduction shall be deducted by the Purchaser (together
with interest pursuant to clause 4.5) from the first (or if not sufficient to
meet such liability then from the subsequent) payment(s) due to the Vendors
pursuant to clause 3.1.2 (unless repaid eadier pursuant to clause 4.5) in the
proportions set out in column (3) of Part I of Schedule 1. In the event that
there are no payments or insufficient payments due to the Vendors pursuant to
clause 3.1.2 to cover the amount of any shortfall, that shortfall will not be
recoverable from the Vendors.
4.5 In the event that any shortfall in the Net Assets shall occur the
amount of such shortfall (or any outstanding part thereof) shall bear interest
from the date of delivery of the Completion Accounts until the date such
shortfall is deemed to be repaid by deduction pursuant to clause 4.4 at the rate
of 3 per cent per annum above the base rate of HSBC Bank PLC from time to time
provided that in the event that all or any of the Vendors shall choose to repay
such shortfall (or any part thereof) directly to the Purchaser prior to such sum
being deemed to be repaid by deduction pursuant to clause 4.4 then such part of
the shortfall repaid earlier shall cease to accrue interest at the date cleared
funds are received by the Purchaser.
8
4.6 The payments to be made pursuant to clause 3.1.2 (less any deductions
pursuant to clauses 4.4 and 19.1) shall be made within 120 days of the 31st
December 2000 and 31st December 2001 respectively to such account in the United
Kingdom as each Vendor shall notify to the Purchaser in writing and
failing payment in full on the date due shall bear interest (as well after as
before judgement) at the rate of 3 per cent per annum above the base rate of
HSBC Bank PLC from time to time.
5. CONDITIONS
5.1 The Purchaser shall not be obliged to complete the sale of any of the
Shares unless the purchase of all the Shares is completed simultaneously in
accordance with the terms of this agreement.
5.2 Each of the Vendors shall not be obliged to complete the sale of any of
his/hefiits shares unless the sale of all the Shares is completed simultaneously
in accordance with the terms of this agreement.
6. COMPLETION AND POST-COMPLETION
6.1 Completion shall take place at the offices of the Purchaser's
Solicitors when, subject to clause 6.7, all the transactions mentioned in the
following sub-clauses shall take place.
6.2 The Vendors shall deliver to the Purchaser:
6.2.1 duly completed and signed transfers in favour of the Purchaser or as it
may direct in respect of his/her/its Shares together with his/her/its relative
share certificates;
6.2.2 the deed of priority in the Agreed Form duly signed by all the Vendors
And the Warrantors shall deliver to the Purchaser: 6.2.3 duly completed and
signed transfers in favour of the Purchaser or as it may direct of all shares of
the Subsidiaries of the Company which are not registered in the name of the
Company together with the relative share certificates;
6.2.4 the resignations of the directors and secretaries from their respective
offices in each Group Company and the resignation of the directors (other than
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇) as employees of
each Group Company with a written acknowledgement from each of them executed as
a deed in such form as the Purchaser requires that he has no claim against any
Group Company in respect of breach of contract, compensation for loss of office,
redundancy or unfair dismissal or on any other grounds whatsoever;
6.2.5 the statutory books of each Group Company complete and up-to-date and
their certificates of incorporation and common seals;
6.2.6 [deleted];
6.2.7 the title deeds relating to each of the Properties as referred to in
the Disclosure Letter (including those referred to in Schedule 5);
6.2.8 [deleted];
9
6.2.9 written confirmation from each of the Vendors that there are no
subsisting guarantees given by any Group Company in their favour and that save
for repayment of the Shareholders' Loan and interest thereon end payment of the
Dividend none of the Vendors is indebted to any Group Company or vice versa at
the date of this agreement;
And 3i plc and Barrington House Nominees Limited shall each deliver to the
Purchaser:
6.2.10 written confirmation that there are no subsisting guarantees given by
any Group Company in their respective favours and that they are not indebted to
any Group Company or vice versa at the date of this agreement
6.3 The Warrantors shall repay all monies then owing by them to any Group
Company whether due for payment or not.
6.4 The Warrantors shall procure that ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ enters into a service
agreement with Xcel Power Systems Limited in the Agreed Form and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
will agrees to continue his employment with Belix Power Conversion Limited under
his existing contract of employment.
6.5 The Warrantors shall deliver to the Purchaser the Deed of Indemnity
duly executed by the Warrantors and the Company;
6.6 Board meetings of each Group Company shall be held at which:
6.6.1 such persons as the Purchaser may nominate shall be appointed
additional directors;
6.6.2 the transfers referred to in clauses 6.2.1 or 6.2.2 (as the case may
be) shall be approved (subject to stamping); and
6.6.3 the resignations referred to in clause 6.2.3 shall be submitted and
accepted.
6.7 Upon completion of the matters referred to in clauses 6.2 to 6.6 the
Purchaser shall:
6.7.1 deliver to the client account of the Vendors' Solicitors by telegraphic
transfer the sum of L500,000 in respect of the part of the purchase
consideration referred to in clause 3.1.1; and
6.7.2 deliver to the Vendors the Debenture and the deed of priority in the
Agreed Form (the latter being signed by the Purchaser and its bankers) as
security for the Shareholders' Loan and the Dividend end the part of the
consideration referred to in clause 3.1.2 subject to the deed of priority in the
Agreed Form.
6.8 The Purchaser may in its absolute discretion waive any requirement
contained in clauses 6.2 to 6.6 and shall not be obliged to complete the
purchase of any of the Shares unless the purchase of all the Shares is completed
in accordance with this agreement.
6.9 During the period from the date of this agreement to 31st December 2001
the Purchaser undertakes to each of the Vendors that:
10
6.9.1 it will maintain and complete accurate records of Sales and promptly
enter any relevant records relating thereto in the records of Xcel Group;
6.9.2 it will provide monthly reports to the Vendors detailing orders
received, amounts invoiced and shipments of goods made and permit the Vendors or
their authorised agents (so far as permitted by law) to inspect and take copies
of the relevant records;
6.9.3 it shall not deliberately take any action the effect of which is to
cause Sales that would have arisen in either the year ending 31st December 2000
or 31st December 2001 to fall in to the following year;
6.9.4 in calculating the amount of the Sales any Sales which do not occur at
the normal full margin to any Microtel Group Company shall for the purpose of
calculating Sales be treated as having occurred at the normal full margin price.
Any dispute in this respect shall be settled in accordance with the provisions
of clause 6.11. For the purpose of this clause "Microtel Group Company" means
Microtel International Inc. and any of its subsidiaries;
6.9.5 should the Xcel Group be subject to a change of control the rights and
obligations under this agreement shall be unaffected;
6.9.6 in the event that the Xcel Group is broken up or any action taken the
effect of which is to prevent the Xcel Group from continuing to conduct its
business in the ordinary course (a "Material Event") then all outstanding monies
due under this agreement from any of the parties to any other of the parties
(and whether due then for payment or not) shall immediately become due and
payable. In the case of the deferred payments due under clause 3.1.2 the amount
due shall be determined by reference to a notional Sales value calculated as
follows:
((A x 730)/B) - C
where: A= Sales from 1st January 2000 to the date of the Material Event
B= Number of days elapsed from 1st January 2000 to the date of the
Material Event
C= Any monies already paid pursuant to clause 3.1.2
6.10 With respect to the information to be provided to the Vendors pursuant
to clause 6.9 each of the Vendors covenants on his/her/its own behalf to the
Purchaser that he/she/it will keep secret and confidential and not use disclose
or divulge to any third party or knowingly enable or cause any person to become
aware of such information save for its professional advisors and those who need
to know for the purpose of confirming the amount of the Sales or save as
required to be disclosed by an order of a court or tribunal of competent
jurisdiction or stock exchange or taxing authority (provided that if practicable
the Purchaser is given prior notice of such intended disclosure) or such
information comes into the public domain otherwise than as a result of its
disclosure by any of the Vendors.
11
6.10 6.11 In the event that any dispute arises between the Vendors and the
Purchaser in relation to the amount of the Sales it shall in the absence of
agreement between the parties within 28 days of such dispute arising be referred
to an independent chartered accountant to be nominated in the absence of
agreement between the Vendors and the Purchaser by the President for the time
being of the Institute of Chartered Accountants of England and Wales whose
decision (acting as an expert and not as an arbitrator) as to the amount of the
Sales shall (in the absence of manifest error) be final and binding on the
parties. The costs of the said accountant shall be borne by the parties in such
proportion as the said accountant shall determine PROVIDED that it is agreed
that in relation to determining the amount of Sales for each of the calendar
years ending 31st December 2000 and 31st December 2001, 3i plc's maximum
contribution to such accountant's costs shall not exceed (pound)2,500 (including
any interest payable) or 20% of such costs (whichever is the lesser) and
Barrington House Nominees Limited's maximum contribution to such costs shall not
exceed (pound)2,500 (including any interest payable) or 20% of such costs
(whichever is the lesser). In the event that any of the Vendors' proportion of
the said accountant's costs are outstanding and unpaid as a result of the
maximum cap as referred to above in this clause in relation to the contributions
of 3i plc and Barrington House Nominees Limited such outstanding and unpaid
costs shall be paid by the Warrantors in the proportions set out against their
names in Column 2 of Part 2 of Schedule 1.
6.12 The Purchaser and those of the Vendors who are parties to the
Shareholders' Loan in respect of certain obligations entered into by them with
the Royal Bank of Scotland PLC and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ in respect of a personal
guarantee given to Wagon Finance Limited pursuant to the terms of a Lease
Purchase Agreement dated 3rd August 1999 regarding a Ford Scorpio motor car
registration number P808 NMJ shall use their best endeavours to procure the
release of the relevant Vendor from their obligations as soon as reasonably
practicable following the date of this Agreement and pending such release the
Purchaser shall indemnify such relevant Vendor against all liabilities that they
may incur in respect thereof which may arise after the date of this Agreement
provided that in the event that if any such relevant Vendor shall receive any
claim or demand in respect of such arrangements they shall immediately notify
the Purchaser in writing and shall make no admission agreement or compromise in
respect thereof without prior consultation with the Purchaser.
7. WARRANTIES AND UNDERTAKINGS
7.1 Each Vendor severally warrants to the Purchaser on his/her/its own
behalf that:
7.1.1 he/she/it has and will have full power and authority to enter into and
perform this agreement;
7.1.2 there is and at Completion will be no pledge, lien or other
encumbrance on, over or affecting the Shares set out opposite his/her/its
name in column (2) of Part 1 of Schedule 1 that will prevent the sale of such
of the Shares or the legal and beneficial interest therein to the Purchaser
or which may attach thereto after such sale and there is and at Completion
will be no agreement or arrangement to give or create any such encumbrance
and no claim has been or will be made by any person to be entitled to any of
the foregoing;
12
7.1.3 he/she/it will be entitled to transfer the full legal and beneficial
ownership of the Shares set out opposite his name in column (2) of Part 1 of
Schedule 1 to the Purchaser on the terms of this agreement without the consent
of any third party;
7.2 The Warrantors jointly and severally warrant to the Purchaser that:
7.2.1 the Deed of Indemnity when executed will constitute binding obligations
on them in accordance with their respective terms;
7.2.2 the Subsidiaries listed in Schedule 2 are all the present Subsidiaries
of the Company;
7.2.3 the information in Schedule 2 relating to the Group Companies is true
and accurate in all respects;
7.2.4 the Company is the sole beneficial owner of the shares in the
Subsidiaries of the Company listed in the last column of Part 2 of Schedule 2
free from any encumbrance;
7.2.5 save as set out in the Disclosure Letter the Warranties in Schedule 3
are true and accurate in all material respects;
7.2.6 the contents of the Disclosure Letter and of all accompanying documents
are true and accurate in all material respects and fully, fairly and accurately
disclose every matter to which they relate.
7.3 The Warrantors hereby acknowledge that the Purchaser has been induced
to enter into this agreement and to purchase the Shares on the basis of the
Warranties and representations contained in this agreement and the Disclosure
Letter and the agreements in the Agreed Form.
7.4 The Warrantors hereby agree and undertake with the Purchaser that if at
any time after the Completion Date it shall be found that any matter which is
the subject of any of the Warranties is not at the date hereof as warranted or
represented save as set out in the Disclosure Letter and the Purchaser or the
Company or any of the Group Companies has incurred or incurs by virtue thereof a
liability or increases any existing liability or the amount or value of any
asset reputed to exist under the Warranties or any asset of the Group Companies
is or becomes less than the amount or value which it would have been had there
been no breach of the Warranties, the Warrantors shall subject to the provisions
of clause 12 and Schedule 7 on demand by the Purchaser make payment to the
Purchaser (or as it may direct) an amount equal to such decrease in the amount
or value of such asset or reputed asset or an amount equal to the increase in
any liability or an amount equal to any liability thereby created which payment
shall be treated by the parties as a reduction in the Consideration for the
Shares. In respect of any payment due from the Warrantors under this clause 7.4
the Purchaser may if it is satisfied that it will be or has been subject to a
liability to taxation on any sum payable by the Warrantors under this clause
calculate and demand in writing from the Warrantors from time to time such
amount as will ensure that the net receipt to the Company (after taxation) in
respect of the payment is the same as it would have been were the payment not
subject to taxation in the hands of the Company.
13
7.5 In the event that any payment due pursuant to clause 7.4 is not made
within 21 days of the date demanded by the Purchaser the amount of such payment
due shall bear interest from the date demanded until the date of actual payment
at the rate of 3 per cent per annum above the base rate of HSBC Bank PLC from
time to time.
7.6 Where any Warranty refers to the knowledge, information, awareness or
belief of the Warrantors the liability of the Warrantors shall not be limited to
matters of which they are actually aware but shall also extend to matters of
which they would have been aware had they made all reasonable and diligent
enquiry to ascertain if the relevant information is true and accurate and not
misleading save that the provisions of this clause shall not apply to clauses
2.9.1 and 5.3.1 of Schedule 3.
7.7 Each of the Warranties is without prejudice to any other Warranty and,
except where expressly stated otherwise, no clause of this agreement shall
govern or limit the extent or application of any other clause.
7.8 Each of the Warrantors undertakes that they have fully and fairly
disclosed in writing to the Purchaser any event or circumstance which has arisen
or become known to him prior to Completion and which (subject to the provisions
of clause 12 and Schedule 3) is inconsistent with any of the Warranties or the
contents of the Disclosure Letter.
7.9 The rights and remedies of the Purchaser in respect of any breach of
the Warranties shall not be affected by Completion, by any investigation made by
it or on its behalf into the affairs of any Group Company, by its rescinding or
failing to rescind this agreement, or failing to exercise or delaying the
exercise of any right or remedy, or by any other event or matter, except a
specific and duly authorised written waiver or release, and no single or partial
exercise of any right or remedy shall preclude any further or other exercise.
7.10 None of the information supplied by any Group Company or its
professional advisers to any of the Warrantors or their agents, representatives
or advisers in connection with the Warranties and the contents of the Disclosure
Letter, or otherwise in relation to the business or affairs of any Group
Company, shall be deemed a representation, warranty or guarantee of its accuracy
by the Group Company to the Warrantors, and the Warrantors waive any claims
against the Group Company which they might otherwise have in respect of it.
7.11 Notwithstanding any rule of law or equity to the contrary, any release,
waiver or compromise or any other arrangement of any kind whatever which the
Purchaser may agree to or effect in relation to one of the Warrantors in
connection with this agreement, and in particular the Warranties, shall not
affect the rights and remedies of the Purchaser in relation to the other
Warrantors.
7.12 The Warrantors undertake to the Purchaser that the remedial work
carried out prior to the date of this Agreement to remove asbestos from the
Property at Chessington shall not result in any claim against the Purchaser or
any Group Company and shall fully and effectively indemnify and hold harmless
the Purchaser and the Group Companies against all costs claims liabilities or
expenses that they may incur as a result of any such claim save to the extent
that any such cost claim liability or expense relates to any remedial work
carried out after the date of this Agreement.
14
8. SHAREHOLDERS' LOAN
8.1 In consideration of the Purchaser granting the Debenture and
undertaking to procure the repayment by the Company of the Shareholders' Loan on
the terms set out in agreement dated 14th April 2000 a copy of which is set out
in Appendix 1 the Lenders undertake to the Purchaser that they shall not seek
repayment of the Shareholders' Loan except as provided in the said agreement.
8.2 As provided in the agreement set out in Appendix 1 the balance of
the Shareholders' Loan outstanding shall bear interest at a rate of 3 per
cent per annum above the base rate of HSBC Bank PLC from time to time, which
interest shall be payable monthly in arrears to the parties stated in Part 3
of Schedule 1 in proportion to their interest in the Shareholders' Loan.
8.3 In the event that any payment due pursuant to clause 8.1 is not made on
the due date the amount of such payment due shall bear interest from the date
due until the date of actual payment at the rate of 5 per cent per annum above
the base rate of HSBC Bank PLC from time to time.
9. DIVIDEND
9.1 The Purchaser shall procure that the Company shall pay to the Vendors
who are holders of ordinary shares in the Company the Dividend no later than the
expiry of six calendar months following the Completion Date.
10. PENSIONS
10.1 The provisions of Schedule 6 shall apply,
11. RESTRICTIVE AGREEMENT
11.1 For the purpose of assuring to the Purchaser the full benefit of the
businesses and goodwill of the Group Companies, each of the Warrantors
undertakes by way of further consideration for the obligations of the Purchaser
under this agreement as separate and independent agreements that:
11.1.1 he will keep secret and confidential and not use disclose or divulge to
any third party or enable or cause any person to become aware of any
confidential information relating to any Group Company including but not limited
to intellectual property (whether owned or licensed by any Group Company),
inventions, know-how, lists of customers, reports, notes, memoranda and all
other documentary records pertaining to any Group Company or its business
affairs, finances, suppliers, customers or contractual or other arrangements
provided always that the restrictions contained in this clause 11.1.1 shall not
apply to any confidential information which:
(a) is required to be disclosed by an order of a court or tribunal of
competent jurisdiction or stock exchange or taxing authority (provided that, if
practicable, the Purchaser is given prior notice of such intended disclosure);
(b) comes into the public domain otherwise than as a result of its
disclosure by any of the Warrantors.
15
11.1.2 FOR 3 years after completion either on his own account or for any other
person directly or indirectly solicit, interfere with or endeavour to entice
away from any Group Company any person who to his knowledge is, or has during
the past 2 years been, a client, customer or employee of, or in the habit of
dealing with any Group Company;
11.1.3 for 2 years after Completion, either alone or jointly with or as
manager, agent for or employee of any person, directly or indirectly carry on or
be engaged concerned or interested in any other business the same as or similar
to any business now carried on by any Group Company.
11.2 Each of the restrictions contained in each paragraph of clause 11.1 is
a separate and distinct restriction and is to be construed separately from the
other restrictions. The Warrantors acknowledge that the restrictions are
reasonable when taken together as well as individually and that the duration
extent and application of each restriction are no greater than is necessary for
the protection of the goodwill of the business of the Group Companies and that
the consideration paid by the Purchaser for the Shares takes into account and
provides adequate compensation for the restraints and restrictions imposed.
Should any restriction be found to be void or unenforceable without the deletion
of some part of it or the reduction in area or duration specified, that
restriction shall apply with such modification as may be necessary to make it
valid.
11.3 The provisions of this clause 11 shall not operate so as to prevent
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ from carrying out their duties under their
service agreements with the Belix Power Conversion Limited and Xcel Power
Systems Limited respectively signed pursuant to clause 6.4.
11.4 The parties agree that not withstanding the provisions of this clause
11 above in the event that any Warrantor who is a Leaver ceases their employment
with the Company or other member of the Xcel Group in circumstances where they
are a Good Leaver the provisions of clause 11.1.3 shall cease to apply from the
date upon which the employment ceases.
12 WARRANTORS' PROTECTION
12.1 The provisions of Schedule 7 shall apply.
13 GENERAL
13.1 Save as to announcements and publicity disclosing the parties to this
Agreement and the fact that there has been a sale of the entire issued share
capital of the Company, in respect of which there are no such restrictions, no
announcement shall be made in respect of the subject matter of this agreement
unless specifically agreed between the parties or it is an announcement required
by law or any Stock Exchange issued after prior consultation with the Vendors.
13.2 If this agreement ceases to have effect the Purchaser will release and
return to each Group Company all documents concerning it provided to the
Purchaser or its advisers in connection with this agreement and will not use or
make available to any other person any information which it or its advisers have
been given in respect of any Group Company and which is not in the public
domain.
16
13.3 If any of the Shares shall at any time be sold or transferred, the
benefit of each of the Warranties may be assigned to the purchaser or transferee
who shall accordingly be entitled to enforce each of the Warranties against the
Warrantors as if he were named in this agreement as the Purchaser.
13.4 This agreement shall be binding upon each party's successors and
assigns and personal representatives (as the case may be) but, except as
expressly provided, none of the rights of the parties under this agreement or
the Warranties may be assigned or transferred.
13.5 If the Purchaser determines or rescinds this agreement under any of its
provisions or under the general law then, in addition to any right or remedy
which it may have against any of the Vendors for breach of this agreement or
against the Warrantors for breach of the Warranties, the Warrantors shall
jointly and severally indemnify the Purchaser for all costs, charges and
expenses incurred by it in connection with the negotiation, preparation and
determination or rescission of this agreement and all matters which it
contemplates.
13.6 Time shall be of the essence of this agreement, both as regards the
dates and periods specifically mentioned and as to any dates and periods which
may be substituted by agreement in writing between or on behalf of the Vendors
and the Purchaser.
14 COSTS
14.1 Except as otherwise provided in this agreement or the Deed of indemnity
each party shall pay its own legal accountancy and other costs charges and
expenses incurred in connection with this agreement.
15 ENTIRE AGREEMENT
15.1 This agreement and the documents referred to in this agreement
constitute the whole agreement between the parties in relation to the subject
matter covered.
16 NOTICES
16.1 Any notice required to be given by any of the parties under this
agreement may be sent by post to the address of the addressee as set out in this
agreement or to such other address as the addressee may have notified for the
purpose of this clause. In proving service by post it shall be necessary to
prove only that the communication was contained in an envelope which was duly
addressed and posted in accordance with this clause.
16.2 Any notices consents or other communication required to be sent or
given hereunder by any of the parties shall in every case be in writing and shah
be deemed properly served if:
16.2.1 delivered personally;
16.2.2 sent by registered or certified mail, in all such cases with first
class postage prepaid;
16.2.3 delivered by a recognised overnight courier service; or
17
16.2.4 sent by facsimile transmission
16.3 Date of service of such notice shall be:
16.3.1 the date such notice is personally delivered; or
16.3.2 three days after the date of mailing if sent by certified or registered
mail; or
16.3.3 one day after date of delivery to the overnight courier if sent by
overnight courier; or
16.3.4 the next succeeding business day after transmission by facsimile.
17 EFFECT OF COMPLETION
17.1 Any provisions of this agreement shall so far as they are capable of
being performed or observed continue in full force and effect notwithstanding
Completion except in respect of those matters already performed.
18 COUNTERPARTS
18.1 This agreement may be executed in several counterparts (whether
original or facsimile counterparts) and upon the execution of all such
counterparts by one or more parties, each counterpad shall be deemed to be an
original hereof.
19 SET-OFF
19.1 The Purchaser shall be entitled without prejudice to any other rights
or remedies available to it to set-off against the amount of any consideration
due to any Warrantor pursuant to clause 3.1.2 the amount of any determined
Warranty Claim for which such Warrantor is liable to the extent of such
Warrantor's liability.
20 APPLICABLE LAW
20.1 This agreement shall be governed by and construed in accordance with
English law and the parties agree to submit to the exclusive jurisdiction of the
English courts.
IN WITNESS whereof the parties have executed this agreement as a deed the day
and year first before written
Executed as a Deed by )
XCEL POWER SYSTEMS )
LIMITED by two directors or )
a director and secretary )
18
Director: /s/ [ILLEGIBLE]
Secretary: /s/ [ILLEGIBLE]
AS DIRECTOR FOR
LAW STORE LIMITED
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
Executed as a Deed by the said )
▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ) /s/ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇
in the presence of: )
Witness Name ▇▇▇▇▇ ▇▇▇▇▇
-------------------
Signature /s/ ▇. ▇. ▇▇▇▇▇
-------------------
Address ▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
-----------------------
LONDON EL
--------------------------------
Occupation TRAINEE SOLICITOR
-------------------
Executed as a Deed by the said )
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ) /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
in the presence of: )
Witness Name as above
-------------------
Signature /s/ ▇. ▇. ▇▇▇▇▇
-------------------
Address
-----------------------
--------------------------------
Occupation
-------------------
Executed as a Deed by the said ) /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ BY
HER ATTORNEY
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ )
in the presence of: ) /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
19
Witness Name AS ABOVE
-------------------
Signature /s/ ▇. ▇. ▇▇▇▇▇
-------------------
Address
-----------------------
--------------------------------
Occupation
-------------------
Executed as a Deed by the said )
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ) /s/ ▇▇▇▇▇ ▇▇▇▇▇
in the presence of: )
Witness Name [ILLEGIBLE]
-------------------
Signature /s/ [ILLEGIBLE]
-------------------
Address ▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
-----------------------
LONDON EI
--------------------------------
Occupation [ILLEGIBLE]
-------------------
Executed as a Deed by the said ) ▇▇▇▇▇ ▇▇▇▇▇ BY HER ATTORNEY
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇ )
in the presence of: ) /s/ ▇▇▇▇▇ ▇▇▇▇▇
Witness Name [ILLEGIBLE]
-------------------
Signature /s/ [ILLEGIBLE]
-------------------
Address as above
-----------------------
--------------------------------
Occupation
-------------------
Executed as a Deed by the said )
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ) /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
in the presence of: )
20
Witness Name [ILLEGIBLE]
-------------------
Signature
-------------------
Address
-----------------------
--------------------------------
Occupation
-------------------
Executed as a Deed by the said )
▇▇▇▇▇ ▇▇▇▇▇▇ READ ) /s/ ▇▇▇▇▇ ▇▇▇▇▇▇ READ
in the presence of: )
Witness Name [ILLEGIBLE]
-------------------
Signature /s/ [ILLEGIBLE]
-------------------
Address ▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
-----------------------
LONDON EI
--------------------------------
Occupation Solicitor
-------------------
Executed as a Deed by the said )
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ) /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
in the presence of: )
Witness Name [ILLEGIBLE]
-------------------
Signature /s/ [ILLEGIBLE]
-------------------
Address As above
-----------------------
--------------------------------
Occupation
-------------------
Executed as a Deed by )
-------------------------- )
21
a duly authorised attorney for and on )
Behalf of 3i plc in the presence of )
Witness Name ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-------------------
Signature /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-------------------
Address ▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
-----------------------
[ILLEGIBLE], East Sussex TN22 2AT
--------------------------------
Occupation Trainee Solicitor.
-------------------
Executed as a Deed by )
BARRINGTON HOUSE NOMINEES )
LIMITED by two directors or )
a director and secretary )
/s/ [ILLEGIBLE] Director:
/s/ [ILLEGIBLE] Director/Secretary:
2000/11D
22
SCHEDULE 1
PART 1
VENDORS' HOLDINGS
(1) (2) (3)
VENDOR'S NAME NUMBER AND TYPE OF PROPORTION OF
AND ADDRESS SHARES CONSIDERATION
-----------------------------------------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ 3,000 Ordinary 3%
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇ ▇▇▇
-----------------------------------------------------------------------
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ 7,375 Ordinary 7.375%
▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ lEG
-----------------------------------------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ 7,375 Ordinary 7.375%
▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ lEG
-----------------------------------------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ 5,000 Ordinary 5%
Little Firs
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
-----------------------------------------------------------------------
▇▇▇▇▇ ▇▇▇▇▇ 5,000 Ordinary 5%
▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
-----------------------------------------------------------------------
23
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 10,000 Ordinary 10%
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇ ▇▇▇
-----------------------------------------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇ Read 14,750 Ordinary 14.75%
▇▇ ▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
-----------------------------------------------------------------------
▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ 7,500 Ordinary 7.5%
▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ OAR
-----------------------------------------------------------------------
3i plc 20,000 cumulative 20%
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ convertible participating
▇▇▇▇▇▇ ▇▇▇ ▇▇▇ preferred ordinary
-----------------------------------------------------------------------
Barrington House Nominees 20,000 cumulative 20%
Limited convertible participating
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
-----------------------------------------------------------------------
24
PART 2
WARRANTORS
(1) (2)
WARRANTOR'S NAME AND PROPORTION OF
ADDRESS LIABILITY
-----------------------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ 5%
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇ ▇▇▇
-----------------------------------------------------
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ 12.29%
▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
-----------------------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ 12.29%
▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
-----------------------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ 8.335%
Little Firs
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
-----------------------------------------------------
▇▇▇▇▇ ▇▇▇▇▇ 8.335%
▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
-----------------------------------------------------
25
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 16.67%
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇ ▇▇▇
-----------------------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇ Read 24.58%
▇▇ ▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇
-----------------------------------------------------
▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ 12.5%
▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ OAR
-----------------------------------------------------
PART 3
SHAREHOLDERS' LOAN
LENDER'S NAME AND ADDRESS AMOUNT OF LOAN
-----------------------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ L7,489.80
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇ ▇▇▇
-----------------------------------------------------
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ L29,701.55
▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ lEG
-----------------------------------------------------
26
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ L19,379.05
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇ ▇▇▇
-----------------------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇ Read L28,311.03
▇▇ ▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
-----------------------------------------------------
▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ L14,533.83
▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ OAR
-----------------------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ L24,966.00
Little Firs
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
-----------------------------------------------------
L124,381.26
-----------------------------------------------------
27
SCHEDULE 2
DETAILS OF GROUP COMPANIES
PART 1: THE COMPANY
Company Name The Belix Company Limited
Company Number 1567245
Date of Incorporation 10 June 1981
Previous Name(s) Techview Limited
Dates of Change(s) 24 December 1991
Registered Office Techview House
▇▇▇ ▇▇▇▇
Chessington
Surrey KT9 lSB
Liquidation/Receivership Proceedings? None
Latest Accounts made up to 31 May 1999
Accounting Reference Date 31 May
Latest Annual Return made up to 3 November 1999
Secretary ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇
▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ OAR
Directors ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇ ▇▇▇ ▇▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇ ▇▇▇
28
▇▇▇▇▇ ▇▇▇▇▇▇ Read
▇▇ ▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇
▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ OAR
Charges: DATE OF PARTY TYPE (AND DATE OF PARTICULARS
REGISTRATION CREATION)
31/12/1994 The Royal Bank Debenture Fixed and floating charges
of Scotland PLC (14/012/94) over the undertaking and
all property and assets present
and future including goodwill
bookdebts uncalled capital
buildings fixtures fixed plant
and machinery
Nominal capital L100,000 divided into 60,000 ordinary shares of
L1.00 each and 40.000 cumulative convertible
participating preferred ordinary shares of (pound)1 each
PART 2: THE SUBSIDIARIES OF THE COMPANY
Company Name Belix Power Conversion Limited
Company Number 609742
Date of Incorporation 15 August 1958
Previous Name(s) The Belix Company Limited
Dates of Change(s) 24 December 1991
Registered Office ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Liquidation/Receivership Proceedings? None
29
Latest Accounts made up to 31 May 1999
Accounting Reference Date 31 May
Latest Annual Return made up to 3 November 1999
Secretary ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇
▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ OAR
Directors ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
63 Surbiton Hilt ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇
▇ ▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ Read
▇▇ ▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
3O
▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇
▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ OAR
Shareholders The Belix Company Limited 29,999 ▇▇▇
▇▇▇▇▇ A Read and The Belix 1 0rd
Company Limited
Charges: DATE OF PARTY TYPE (AND DATE OF PARTICULARS
REGISTRATION CREATION)
20/2/1974 ▇▇▇▇▇▇▇▇ & Glyn's Debenture Fixed and floating charges
Bank Ltd (6/2/1974) over the undertaking and
all property and assets present
and future including
goodwill book debts uncalled capital
buildings fixtures fixed plant
and machinery
13/11/1981 ▇▇▇▇▇▇▇▇ & Glyn's Supplemental to First fixed charge over book
Bank Ltd a Debenture debts and other debts of
(6/11/19/81) the company both present and
future.
Nominal capital (pound)30,000 divided into 30,000 ordinary shares of
(pound)1.00 each
------------------------------------------------
Company Name Belix Wound Components Limited
Company Number 1537636
Date of Incorporation 8 January 1981
Previous Name(s) Belix (Wales) Limited
Dates of Change(s) 24 December 1991
31
Registered Office Techview House
▇▇▇ ▇▇▇▇
Chessington
Surrey KT9 lSB
Liquidation/Receivership Proceedings? None
Latest Accounts made up to 31 May 1999
Accounting Reference Date 31 May
Latest Annual Return made up to 3 November 1999
Secretary ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇
▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ OAR
Directors ▇▇▇▇▇ ▇▇▇▇▇▇ Read
▇▇ ▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇
▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ OAR
Shareholders Belix Power Conversion Limited 99 ▇▇▇
▇▇▇▇▇ A Read and Belix Power 1 0rd
Conversion Limited
32
Charges: DATE OF PARTY TYPE (AND DATE OF PARTICULARS
REGISTRATION CREATION)
6/10/1981 Williams& Glyn's Debenture Fixeel and floating charges
Bank Lid (2/10/81) over the undertaking and
all property and assets present
and future including
goodwill book debts uncalled capital
buildings fixtures fixed
plant and machinery
Nominal capital (pound)100 divided into 100 ordinary shares of E1.00
each
33
SCHEDULE 3
Warranties
1. ACCOUNTS
1.1 THE PRINCIPAL ACCOUNTS
1.1.1 The Principal Accounts were prepared in accordance with the historical
cost convention and the bases and policies of accounting adopted in preparing
the Principal Accounts are the same as those adopted in preparing the audited
accounts of each Group Company in respect of the three last preceding accounting
periods.
1.1.2 The Principal Accounts:
(a) give a true and fair view of the assets and liabilities of
each Group Company at the Last Accounts Date and its profits
for the financial period ended on that date;
(b) comply with the requirements of the Companies Acts and other
relevant statutes;
(c) comply with all FRSs applicable to a United Kingdom company;
(d) are not affected by any extraordinary, exceptional or
non-recurring item;
(e) properly reflect the financial position of each Group Company
as at their date;
(f) fully disclose all the assets of each Group Company as at
their date;
(g) make full provision or reserve for all liabilities and capital
commitments of each Group Company outstanding at the Last
Accounts Date, including contingent, unquantified or disputed
liabilities;
(h) make provision or reserve, in accordance with the principles
set out in the notes included in the Principal Accounts, for
all Taxation liable to be assessed on each Group Company or
for which it may be accountable in respect of the period ended
on the Last Accounts Date.
1.1.3 No amount included in the Principal Accounts in respect of any asset,
whether fixed or current has been included at value otherwise than as determined
in accordance with the notes to the Principal Accounts.
1.2 MANAGEMENT ACCOUNTS
1.2.1 The management accounts of each Group Company for the period 1st June
1999 to 29th February 2000 give a fair view of the assets and liabilities of
that Group Company for the period of such accounts consistent with the
management accounting policies of the respective Group Company.
1.3 VALUATION OF STOCK-IN-TRADE AND WORK IN PROGRESS
34
1.3.1 In the Principal Accounts and in the accounts of each Group Company for
the three preceding financial years the stock-in-trade and work in progress of
each Group Company have been treated in accordance with SSAP 9.
1.3.2 In the Principal Accounts all redundant, obsolete and slow-moving
stock-in-trade has been written off or written down, as the Warrantors consider
appropriate.
1.4 DEPRECIATION OF FIXED ASSETS
1.4.1 In the Principal Accounts and in the accounts of each Group Company for
the three preceding financial years, the fixed assets of each Group Company have
been depreciated in accordance with SSAP 12.
1.5 DEFERRED TAXATION
1.5.1 Where provision for deferred taxation is not made in the Principal
Accounts, full details of the amounts of deferred taxation have been disclosed
in the Disclosure Letter.
1.6 ACCOUNTING REFERENCE DATE
1.6.1 The accounting reference date of each Group Company for the purposes of
CA s 224 is 31st May and there has not at any time been any other date within
the last ten years.
1.7 BOOK DEBTS
1.7.1 No part of the amounts included in the Principal Accounts, or
subsequently recorded in the books of any Group Company, as owing by any debtors
is overdue by more than twelve weeks, or has been released on terms that any
debtor pays less than the full book value of his debt or has been written off or
has proved to any extent to be irrecoverable or is now regarded by the relevant
Group Company as irrecoverable in whole or in part.
1.7.2 The amounts due from debtors as at Completion (less the amount of any
relevant provision or reserve, determined on the same basis as that applied in
the Principal Accounts and disclosed in the Disclosure Letter) will be
recoverable in full in the ordinary course of business and in any event not
later than twelve weeks after Completion; and none of those debts is subject to
any counter-claim or set off, except to the extent of any such provision or
reserve.
1.8 BOOKS AND RECORDS
1.8.1 All the accounts, books, ledgers, financial and other records, of
whatsoever kind, of each Group Company:
(a) are in its possession;
(b) have been fully properly and accurately kept and completed;
(c) do not contain any material inaccuracies or discrepancies;
35
(d) show a true and fair view of its trading transactions, and its
financial, contractual and trading position.
2. CORPORATE MATTERS
2.1 DIRECTORS AND SHADOW DIRECTORS AND ISSUED SHARE CAPITAL
2.1.1 The only directors of the Group Companies are the persons whose names
are listed in relation to each Group Company in Schedule 2.
2.1.2 No person is a shadow director (within the meaning of CA s 741) of a
Group Company but is not treated as one of its directors for all the purposes of
that Act
2.1.3 The Shares comprise the whole of the issued and allotted share capital
of the Company.
2.2 SUBSIDIARIES, ASSOCIATIONS AND BRANCHES
2.2.1 No Group Company:
(a) is the holder or beneficial owner of or has agreed to acquire
any share or loan capital of any company (whether incorporated
in the United Kingdom or elsewhere) other than the
Subsidiaries listed in Schedule 2;
(b) has outside the United Kingdom any branch, agency or place of
business, or any permanent establishment (as that expression
is defined in the relevant double taxation relief order
current at the date of this agreement).
2.3 OPTIONS OVER GROUP COMPANIES' CAPITAL
2.3.1 Except as required by this agreement there are no agreements or
arrangements in force which provide for the present or future issue, allotment
or transfer of or grant to any person the right (whether conditional or
otherwise) to call for the issue, allotment or transfer of any share or loan
capital of any Group Company (including any option or right of pre-emption or
conversion).
2.4 NEW ISSUES OF CAPITAL
2.4.1 No share or loan capital has been issued or allotted, or agreed to be
issued or allotted, by any Group Company since the Last Accounts Date.
2.5 COMMISSIONS
2.5.1 No one is entitled to receive from any Group Company any finder's fee,
brokerage or other commission in connection with the sale and purchase of the
Shares under this agreement.
2.6 MEMORANDA AND ARTICLES OF ASSOCIATION, STATUTORY BOOKS AND RESOLUTIONS
2.6.1 The copy of the memorandum and articles of association of each Group
Company attached to the Disclosure Letter is accurate and complete in all
respects and has embodied in it or annexed to it a copy of every such resolution
as is referred to in CA s 380.
36
2.6.2 The register of members and other statutory books of each Group Company
have been properly kept and contain an accurate and complete record of the
matters with which they should deal.
2.6.3 No notice or allegation that any of the foregoing is incorrect or
should be rectified has been received.
2.6.4 Since the Last Accounts Date no alteration has been made to the
memorandum or articles of association of any Group Company and no resolution of
any kind of the shareholders of any Group Company has been passed (other than
resolutions relating to routine business at annual general meetings).
2.7 DOCUMENTS FILED
2.7.1 All returns, particulars, resolutions and documents required by the
Companies Acts or any other legislation to be filed with the Registrar of
Companies, or any other authority, in respect of each Group Company have been
duly filed and were correct; and due compliance has been made with all the
provisions of the Companies Acts and other legal requirements in connection with
the formation of each Group Company, the allotment or issue of shares,
debentures and other securities, the payment of dividends and the conduct of its
business.
2.7.2 All charges in favour of any Group Company have (if appropriate) been
registered in accordance with the provisions of CA ss 395, 409, 410 and 424.
2.8 POSSESSION OF DOCUMENTS
2.8.1 All title deeds relating to the assets of each Group Company, and an
executed copy of all agreements to which any Group Company is a party, and the
original copies of all other documents which are owned by or which ought to be
in the possession of any Group Company are in its possession.
2.9 INVESTIGATIONS
2.9.1 The Warrantors are not aware (without having made any enquiry) that any
investigations or enquiries by, or on behalf of, any governmental or other body
in respect of the affairs of any Group Company are pending or taking place.
2.10 INFORMATION DISCLOSED TO PURCHASER CORRECT
2.10.1 All information given by any of the Warrantors, the Vendors' Solicitors
or the Vendors' accountants to the Purchaser, the Purchaser's Solicitors or the
Purchaser's accountants relating to the business, activities, affairs, or assets
or liabilities of any Group Company was, when given, and is now accurate and
comprehensive in all respects save as disclosed in the Disclosure Letter.
2.10.2 There are no material facts or circumstances, in relation to the
assets, business or financial condition of any Group Company, which have not
been fully and fairly disclosed in writing to the Purchaser or the Purchaser's
Solicitors.
37
3. TAXATION
3.1 ADMINISTRATION
3.1.1 All returns, notifications, computations and payments which should have
been made or given by any Group Company for any Taxation purpose were made or
given within the requisite periods and are up-to-date, correct and on a proper
basis and none of them is or is likely to be the subject of any dispute with the
Inland Revenue or other Taxation authorities.
3.1.2 All particulars furnished to the Inland Revenue or other Taxation
authorities, in connection with the application for any consent or clearance on
behalf of any Group Company, or affecting any Group Company, made since the Last
Accounts Date, fully and accurately disclosed all facts and circumstances
material for the decision of those authorities; any consent or clearance is
valid and effective; and any transaction, for which consent or clearance has
previously been obtained, has been carried into effect (if at all) only in
accordance with the terms of the relative application and consent or clearance.
3.1.3 No Group Company has, since the Last Accounts Date, taken any action
which has had, or might have, the result of altering or prejudicing any
arrangement or agreement which it has previously negotiated with any Taxation
authorities.
3.1.4 No Group Company has, since the Last Accounts Date, paid or become
liable to pay any penalty or interest charged under TMA or any other Taxation
statute.
3.1.5 Each Group Company has properly operated the PAYE system, by deducting
tax, as required by law, from all payments made or treated as made to its
employees or former employees, and accounting to the Inland Revenue for all tax
deducted by it and for all tax chargeable on benefits provided for its employees
or former employees.
3.1.6 Each Group Company has complied in all respects with the following
sections, and all regulations made under them, and has made and accounted for
all deductions and retentions which they specify or require:
(a) ICTA s 43 (Non-residents);
(b) ICTA s 349 (Payments not out of profits or gains brought into
charge to income tax and annual interest);
(c) ICTA Pt XIII Chapter III (Entertainers and sportsmen);
(d) ICTA Pt XIII Chapter IV (sub-contractors in the construction
industry).
3.1.7 No Group Company has received a notice under ICTA s 23 (Collection from
lessees and agents) which remains outstanding.
3.2 TAXATION CLAIMS, LIABILITIES AND RELIEFS
3.2.1 The Disclosure Letter contains full details of all matters relating to
Taxation in respect of which any Group Company (either alone or jointly with any
other person) is, or at Completion will be, entitled:
38
(a) to make a claim (including a supplementary claim) for,
disclaimer of or election for relief under any Taxation
statute;
(b) to appeal against an assessment to or a determination
affecting Taxation;
(c) to apply for the postponement of Taxation;
(d) to require the postponement or reduction of any allowance.
3.2.2 No Group Company has made or is entitled to make a claim or exercise an
option under TCGA s 24(2) (Disposals where assets lost or destroyed, or become
of negligible value), s 280 (Consideration payable by instalments) or Schedule 4
(Deferred charges on gains before 31 March 1982).
3.2.3 No Group Company is or will become liable to pay, or make reimbursement
or indemnity in respect of, any Taxation (or any amount corresponding to
Taxation) in consequence of the failure by any other person (not being a Group
Company) to discharge that Taxation or amount within any specified period or
otherwise, where the Taxation or amount relates to a profit, income or gain,
transaction, event, omission or circumstance arising, occurring or deemed to
arise or occur (whether wholly or partly) prior to Completion.
3.2.4 No relief (whether by way of deduction, reduction, set-off exemption,
repayment or allowance, or otherwise) from, against or in respect of any
Taxation has been claimed and/or given to any Group Company which could or might
be effectively withdrawn, postponed, restricted or otherwise lost as a result of
any act, omission, event or circumstance arising or occurring at any time before
Completion.
3.3 DISTRIBUTIONS AND DEDUCTIBILITY OF PAYMENTS
3.3.1 No Group Company has repaid, or agreed to repay or redeemed or agreed
to redeem its share capital or capitalised or agreed to capitalise in the form
of redeemable shares or debentures any profits or reserves of any class or
description.
3.3.2 No security (within the meaning of ICTA s 254(1) (Company
distributions, tax credits etc: Interpretation)) issued by any Group Company and
outstanding at the date of this agreement was issued in such circumstances that
the interest payable on it, or any other payment in respect of it, falls to be
treated as a distribution Lander ICTA s 209 (Meaning of 'distribution').
3.3.3 No rents, interest, annual payments or other sums of an income nature
paid or payable since the Last Accounts Date by any Group Company or which any
Group Company is under an obligation to pay in the future are or may be wholly
or partially disallowable as deductions in computing profits or as charges
against profits, for the purposes of corporation tax, by reason of ICTA s 74
(General rules as to deductions not allowable), s 125 (Annual payments for
non-taxable consideration), s 338 (Allowance of charges on income and capital),
s 770 (Sales etc at an undervalue or overvalue), ss 779 to 785 (Leased assets)
or s 787 (Restriction of relief for payments of interest) or otherwise.
39
3.3.4 No Group Company has received a capital distribution to which TCGA s
189 (Capital distribution of chargeable gains: recovery of tax from shareholder)
could apply.
3.4 CARRY FORWARD OF LOSSES AND ACT
3.4.1 Nothing has been done, and no event or series of events has occurred,
which might cause in relation to any Group Company the disallowance of the carry
forward or back of losses, excess management expenses or advance corporation tax
under ICTA s 393 (Losses other than terminal losses), s 768 (Change in ownership
of company: disallowance of trading losses), s 768A (Change in ownership:
disallowance of carry back of trading losses), s 768B (Change in ownership of
investment company: deductions generally), s 245 (Calculation etc of ACT on
change of ownership of company) or s 245A (Restriction on application of section
240 in certain circumstances).
3.5 CLOSE COMPANIES
3.5.1 No Group Company is, or was at any time during the six years ended on
the Last Accounts Date, a close company as defined in ICTA 1988, s 414 (Close
companies).
3.6 GROUP RELIEF AND GROUP SURRENDERS
3.6.1 The Group Companies comprise a group for the purposes of ICTA Pt X Ch
IV (Group relief), and there is nothing in ICTA s 410 (Arrangements for transfer
of company to another group or consortium) which precludes any Group Company
from being regarded as a member of the Group.
3.6.2 No Group Company has since the Last Accounts Date made or agreed to
make, otherwise than to or from another Group Company:
(a) a surrender of, or claim for, group relief under ICTA Pt X Ch
IV (Group relief);
(b) a surrender of surplus advance corporation tax under ICTA s
240 (Set-off of company's surplus ACT against subsidiary's
liability to corporation tax); or
(c) a surrender of a right to receive a refund of tax under FA
1989 s 102 (Surrender of company tax refund etc within group).
3.6.3 No Group Company is liable to make or entitled to receive a payment for
group relief or for the surrender of advance corporation tax, otherwise than to
or from another Group Company.
3.6.4 No Group Company has made or received a payment for group relief or for
the surrender of advance corporation tax (otherwise than to or from another
Group Company), which may be liable to be refunded in whole or in part.
3.6.5 All claims for group relief made by each Group Company were valid and
have been or will be allowed by way of relief from corporation tax.
4O
3.6.6 Where any Group Company became a Group Company after the Last Accounts
Date, ICTA s 409(2) (Companies joining or leaving group or consortium) will not
apply so as to permit the apportionment of profits and losses to be made
otherwise than on a time basis according to the respective lengths of the
component accounting periods.
3.6.7 No Group Company has at any time since 1 April, 1987 been a dual
resident investing company within the meaning of ICTA s 404 (Limitation of group
relief in relation to certain dual resident companies).
3.7 CAPITAL ALLOWANCES
3.7.1 All expenditure which any Group Company has incurred on the provision
of machinery or plant has qualified or will qualify (if not deductible as a
trading expense of a trade carried on by the relevant Group Company) for
writing-down allowances under CAA s 24 (Writing-down allowances and balancing
adjustments).
3.7.2 All capital allowances made or to be made to each Group Company in
respect of capital expenditure incurred prior to the date of this agreement or
to be incurred under any subsisting commitment have been made or will be made
in taxing its trade.
3.7.3 Since the Last Accounts Date no Group Company has done, or omitted to
do, or agreed to do, or permitted to be done, any act as a result of which any
disposal value may be brought into account under CAA s 24 (Writing-down
allowances and balancing adjustments) or there may be any recovery of excess
relief within CAA s 46 (Recovery of excess relief: new expenditure).
3.7.4 No capital expenditure incurred by any Group Company has been or will
be deemed, under CAA, s 159 (Capital expenditure, capital sums and time when
capital expenditure is incurred), to have been or be incurred on a date other
than that upon which the obligation to pay the expenditure became or becomes
unconditional.
3.7.5 No election has been made by any Group Company under CAA s 53
(Expenditure incurred by equipment lessor) or s 55 (Expenditure incurred by
incoming lessee: transfer of allowances) in relation to any fixtures.
3.7.6 No Group Company has made an election to treat any machinery or plant
as a short-life asset within the provisions of CAA s 37 (Election for certain
machinery or plant to be treated as short-life assets).
3.8 TRANSACTIONS NOT AT ARM'S LENGTH
3.8.1 No Group Company has carried out or been engaged in any transaction or
arrangement to which ICTA s 770 (Sale etc at an undervalue or overvalue) has
been or may be applied.
3.8.2 No Group Company owns or has agreed to acquire any asset, or has
received or agreed to receive any services or facilities (including without
limitation tile benefit of any licences or agreements), the consideration for
the acquisition or provision of which was or will be in excess of its market
value or determined otherwise than on an arm's length basis.
41
3.8.3 No Group Company has disposed of or acquired any asset in such
circumstances that TCGA s 17 (Disposals and acquisitions treated as made at
market value) could apply.
3.9 BASE VALUES AND ACQUISITION COSTS
3.9.1 If each of the capital assets of the Group Companies was disposed of at
Completion for a consideration equal to its book value in, or adopted for the
purpose of, the Last Accounts, no liability to corporation tax on chargeable
gains or balancing charge under CAA (if each asset was treated as if used for
the purpose of a separate trade) would arise; and, for the purpose of
determining the liability to corporation tax on chargeable gains, there shall be
disregarded reliefs and allowances available to the Group Company other than
amounts deductible under TCGA s 38 (Acquisition and disposal costs etc).
3.9.2 No Group Company has made an election under TCGA s 35 (Assets held on
31 March 1982 (including assets held on 6 April 1965)).
3.9.3 No Group Company has, since the Last Accounts Date, engaged in any
transaction in respect of which there may be substituted for any purpose of
Taxation a different consideration for the actual consideration given or
received by it.
3.10 TAX AVOIDANCE
3.10.1 No Group Company has since the Last Accounts Date engaged in or been a
party to any scheme or arrangement of which the main purpose, or one of
the main purposes, was the avoidance of or a reduction in liability to
Taxation; and, in particular but without limitation, no Group Company
has been a party to or otherwise involved in any transaction to which
any of the following could apply:
(a) ICTA s 240 (Set-off of company's surplus ACT against
subsidiary's liability to corporation tax);
(b) ICTA s 410 (Group relief: arrangements for transfer of company
to another group or consortium); s 395 (Leasing contracts: and
company reconstructions); and s 116 (Partnerships involving
companies: arrangements for transferring relief);
(c) ICTA ss 729 or 730 (Tax avoidance: other transfers of
securities), ss 731 to 735 inclusive (Purchase and sale of
securities) or ss 736 or 737 (Miscellaneous provisions
relating to securities);
(d) ICTA s 774 (Transactions between dealing company anti
associated company);
(e) ICTA s 779 (Sale and lease-back: limitation on tax reliefs);
(f) ICTA s 781 (Assets leased to traders and others);
(g) ICTA s 786 (Transactions associated with loans or credit);
(h) TCGA s 29 (Value shifting: General provisions);
42
(i) TCGA s 106 (Disposal of shares and securities by company
within prescribed period of acquisition).
3.10.2 No Group Company has since the Last Accounts Date been a party to any
transaction to which any of the following has been or could be applied
other than transactions in respect of which all necessary consents or
clearances have been obtained:
(a) ICTA ss 703 to 709 (Cancellation of tax advantages from
certain transactions in securities);
(b) ICTA s 765 (Migration etc of companies);
(c) ICTA s 776 (Transactions in land: taxation of capital gains);
(d) TCGA ss 135 to 138 (Company reconstructions and
amalgamations);
(e) TCGA s 139 (Reconstruction or amalgamation involving transfer
of business).
3.11 DEPRECIATORY TRANSACTIONS
3.11.1 No allowable loss, which may accrue on the disposal by any Group
Company of any asset, is likely to be reduced by reason of TCGA s 176
(Depreciatory transactions within a group) or s 177 (Dividend
stripping) and no chargeable gain or allowable loss arising on a
disposal is likely to be adjusted in accordance with s 30 (Tax-free
benefits).
3.12 UNREMITTABLE INCOME AND CAPITAL GAINS
3.12.1 No Group Company has either received or become entitled to any income
which is 'unremittable income', within the meaning of ICTA s 584
(Relief for unremittable overseas income), or any gain to which TCGA s
279 (Foreign assets: delayed remittances) could apply.
3.13 DEMERGERS, PURCHASE OF OWN SHARES AND STOCK DIVIDENDS
3.13.1 No Group Company has been engaged in or been a party to any of the
transactions set out in ICTA ss 213 to 218 (Demergers) or has made or
received a chargeable payment as defined in s 214 (Chargeable payments
connected with exempt distributions).
3.13.2 No Group Company has at any time redeemed, repaid or purchased or
agreed to redeem, repay or purchase, any of its own shares.
3.13.3 No Group Company has issued any share capital to which ICTA s 249
(Stock dividends treated as income) or TCGA s 141 (Stock dividends:
consideration for new holding) could apply, nor does any Group Company
own any such share capital.
3.14 TRANSFER OF OVERSEAS TRADE
43
3.14.1 No Group Company has made a claim under TCGA s 140 (Postponement of
charge on transfer of assets to non-resident company) or s 140C
(TRANSFER of a non-UK trade) in relation to the transfer of the whole
or part of a trade which it carried on outside the United Kingdom
through a branch or agency.
3.15 SALE AND LEASE-BACK OF LAND
3.15.1 No Group Company has since the Last Accounts Date entered into any
transaction to which ICTA s 780 (Sale and lease-back: taxation of
consideration received) has been or could be applied.
3.16 LOAN RELATIONSHIPS
3.16.1 Each Group Company which is a party to a loan relationship (within the
meaning of FA 1996, s 81 (Meaning of 'loan relationship' etc)) uses as
respects the loan relationship in its statutory accounts a basis of
accounting which is or equates to an authorised accounting method under
FA 1996, s 85 (Authorised accounting methods).
3.16.2 No Group Company has, in respect of a loan relationship within the
meaning of FA 1996, s 81 (Meaning of 'loan relationship' etc), applied:
(a) an authorised accounting method inconsistently or otherwise in
a materially different way in successive accounting periods;
or
(b) used a different authorised accounting method for the same or
successive accounting periods; as provided by FA 1996, s 89
(Inconsistent application of accounting methods).
3.16.3 No Group Company is required to use an authorised accruals basis of
accounting as respects a creditor relationship by virtue of FA 1996, s
87 (Accounting method where parties have a connection).
3.16.4 No Group Company has received a payment of interest on which it bore
income tax by deduction and in relation to which interest a credit has
been brought into account for the purposes of FA 1996 Ch II (Loan
relationships) for an accounting period ending more than two years
before the date of the receipt.
3.16.5 No Group Company has been a party to a loan relationship which had an
unallowable purpose within the meaning of FA 1996, Sched 9, para 13
(Loan relationships for unallowable purposes).
3.17 CONTROLLED FOREIGN COMPANIES
3.17.1 No notice of the making of a direction under ICTA s 747 (Imputation of
chargeable profits and creditable tax of controlled foreign companies)
has been received by any of the Group Companies and no circumstances
exist which would entitle the Inland Revenue to make a direction and to
apportion any profits of a controlled foreign company to any of the
Group Companies under ICTA s 752 (Apportionment of chargeable profits
and creditable tax).
44
3.18 CHARGEABLE GAINS
3.18.1 In determining the liability to corporation tax on chargeable gains in
respect of any asset which has been acquired by a Group Company or
which a Group Company has agreed to acquire (whether conditionally,
contingently or otherwise):
(a) the sums allowable as a deduction will be determined solely in
accordance with TCGA s 38 (Acquisition and disposal costs etc)
and s 53 (The indexation allowance and interpretative
provisions);
(b) the amount or value of the consideration, determined in
accordance with TCGA s 38(1)(a), will not be less than the
amount or value of the consideration actually given by it for
that asset;
(c) the amount of any expenditure on enhancing the value of that
asset, determined in accordance with TOGA s 38(1)(b), will
not be less than the amount or value of all expenditure
actually incurred by it on that asset.
3.18.2 No asset owned or agreed to be acquired by a Group Company (other than
plant and machinery in respect of which it is entitled to capital
allowances) is a wasting asset within the meaning of TCGA s 44 (Meaning
of 'wasting asset').
3.18.3 No Group Company is owed a debt (not being a debt on a security) upon
the disposal or satisfaction of which a liability to corporation tax on
chargeable gains will arise by reason of TCGA s 251 (Debts: General
provisions).
3.18.4 No part of the consideration given by a Group Company for a new holding
of shares (within the meaning of TCGA s 126 (Reorganisation or
reduction of share capital: Application of sections 127 to 131)) will
be disregarded by virtue of s 128(2) (Consideration given or received
by holder).
3.18.5 No asset owned by a Group Company has been the subject of a deemed
disposal under TCGA Sched 2 (Assets held on 6 April 1965), so as to
restrict the extent to which the gain or loss over the period of
ownership may be apportioned by reference to straightline growth.
3.19 CAPITAL LOSSES
3,19.1 No Group Company has incurred a capital loss to which TCGA s 18(3)
(Transactions between connected persons) applies.
3.20 ACQUISITIONS FROM GROUP MEMBERS
3.20.1 No Group Company owns an asset which was acquired from another company
which was at the time a member of the same group of companies (as
defined in TCGA s 170 (Groups of companies: Interpretation of ss 170 to
181)) as the relevant Group Company, and which owned that asset
otherwise than as trading stock within the meaning of s 173 (Transfers
within a group: trading stock).
45
3.20.2 The execution or completion of this agreement will not result in any
profit or gain being deemed to accrue to a Group Company for Taxation
purposes, whether under TCGA s 179 (Company ceasing to be member of
group: post-appointed day cases) or otherwise.
3.21 REPLACEMENT OF BUSINESS ASSETS
3.21.1 No Group Company has made a claim under TCGA s 23 (Receipt of
compensation and insurance money not treated as a disposal), s 152
(Replacement of business assets: Roll-over relief), s 153 (Assets only
partly replaced), s 154 (New assets which are depreciating assets), s
175 (Replacement of business assets by members of a group) or s 247
(Roll-over relief on compulsory acquisition) which would affect the
amount of the chargeable gain or allowable loss which would but for
such claim have arisen on a disposal of any of its assets.
3.22 GIFTS INVOLVING GROUP COMPANIES
3.22.1 No Group Company has held or holds shares in a company (not being
another Group Company) which has made a transfer to which TCGA s 125
(Shares in close company transferring assets at an undervalue); and no
Group Company has received any assets by way of gift as mentioned in
TCGA s 282 (Recovery of tax from donee).
3.23 GAINS ACCRUING TO NON-RESIDENT COMPANIES
3.23.1 No gain has accrued in respect of which any Group Company may be liable
to corporation tax on chargeable gains by virtue of TCGA s 13
(Attribution of gains to members of non-resident COMPANIES).
3.24 VALUE ADDED TAX
3.24.1 Each Group Company:
(a) has duly registered and is a taxable person for the purposes
of value added tax;
(b) has complied in all material respects with all statutory
requirements, orders, provisions, directions or conditions
relating to value added tax;
(c) maintains complete, correct and up-to-date records for the
purposes of the relevant legistation;
(d) has applied for treatment or is treated as a member of a group
which includes any company which is not one of the Group
Companies;
(e) no Group Company is, or has agreed to become, an agent (for
the purposes of VATA 1994, s 47 (Agents etc)) for the supply
of goods for a person who is not a taxable person.
3.24.2 No Group Company:
46
(a) is in arrears with any payment or returns, or is liable to any
abnormal or non-routine payment, or any forfeiture or penalty,
or to the operation of any penal provision; or
(b) has been required by the Commissioners of Customs and Excise
to give security;
3.24.3 The Disclosure Letter contains full particulars of any claim for bad
debt relief made or which may be made by any Group Company under VATA s
36 (Bad debts) in respect of debts payable within the last seven years.
3.24.4 No Group Company has within the past twelve or twenty four months
respectively, received a surcharge liability notice under VATA s 59
(The default surcharge) or a penalty liability notice under VATA s 64
(Repeated misdeclarations) or may be liable to a penalty under s 63
(Penalty for misdeclaration or neglect resulting in VAT loss for one
accounting period equalling or exceeding certain amounts).
3.24.5 No election to waive exemption from value added tax in relation to any
of the Properties has been made by a Group Company or a predecessor in
title under VATA Schedule 10, paragraph 2 (Election to waive
exemption).
3.24.6 No direction has been given, and there are no grounds under which one
may be given, by Customs and Excise under VATA Schedule 9A
(Anti-avoidance provisions: Groups) as a result of which a Group
Company would be treated for the purposes of value added tax as a
member of a group which includes a company which is not a Group Company
or as not being a member of the group with the other Group Companies.
3.25 INHERITANCE TAX
3.25.1 No Group Company has at any time made a transfer of value (as defined
in ITA s 3 (Transfers of Value)).
3.25.2 No Inland Revenue charge for unpaid inheritance tax (as provided by ITA
ss 237 and 238 (Inland Revenue charge for unpaid tax)) over any asset
of any Group Company, or in relation to any shares in the capital of
any Group Company is outstanding.
3.25.3 No circumstances exist whereby any power mentioned in ITA s 212 (Powers
to raise tax) could be exercised in relation to any shares, securities
or other assets of any Group Company, or could be exercised but for ITA
s 204(6) (Limitation of liability).
3.26 STAMP DUTY
3.26.1 Within the past two years, no Group Company has claimed relief or
exemption under FA 1930 s 42 (Relief from transfer stamp duty in case
of transfer of property as between associated companies).
4. FINANCE
4.1 CAPITAL COMMITMENTS
47
4.1.1 There were no commitments on capital account outstanding at the Last
Accounts Date and since the Last Accounts Date no Group Company has
made or agreed to make any capital expenditure, or incurred or
agreed to incur any capital commitments or disposed of or realised
any capital assets or any interest in capital assets.
4.2 DIVIDENDS AND DISTRIBUTIONS
4.2.1 Since the Last Accounts Date no Group Company has, or is treated as
having. declared or paid any dividend or other distribution (as
defined in ICTA Part VI Ch II as extended by ICTA s 418).
4.2.2 All dividends or distributions declared, made or paid by each Group
Company have been declared, made or paid in accordance with its
articles of association and the applicable provisions of the
Companies Acts.
4.3 BANK AND OTHER BORROWINGS
4.3.1 Full details of all limits on each Group Company's bank overdraft
facilities are accurately set out in the Disclosure Letter.
4.3.2 The total amount borrowed by each Group Company from each of its
bankers does not exceed its respective overdraft facilities.
4.3.3 The total amount borrowed by each Group Company (as determined under
the relevant instrument) does not exceed any limitation on its
borrowing powers contained in its articles of association, or in any
debenture or other relevant document.
4.3.4 No Group Company has outstanding, or has agreed to create or issue,
any loan capital; or has factored any of its debts, or engaged in
financing of a type which would not require to be shown or reflected
in the Principal Accounts, or borrowed any money which it has not
repaid, save for borrowings not exceeding the amounts shown in the
Last Accounts.
4.3.5 No Group Company has since the Last Accounts Date repaid or become
liable to repay any loan or indebtedness in advance of its stated
maturity.
4.3.6 No Group Company has received notice (whether formal or informal)
from any lenders of money, requiring repayment or intimating the
enforcement of any security; and there are no circumstances likely
to give rise to any such notice.
4.4 LOANS BY AND DEBTS DUE TO GROUP COMPANIES
4.4.1 No Group Company has lent any money otherwise than to another Group
Company which has not been repaid to it, or owns the benefit of any
debt (whether or not due for payment), other than debts which have
arisen in the ordinary course of its business.
4.4.2 No Group Company has made any loan or quasi-loan contrary to the
Companies Acts.
4.5 Liabilities
48
4.5.1 There are no liabilities (including contingent liabilities) of any
Group Company which are outstanding other than those liabilities
disclosed in the Principal Accounts or incurred in the normal course
of trading since the Last Accounts Date.
4.5.2 There has been no exercise, purported exercise or claim for any
charge, lien, encumbrance or equity over any of the fixed assets of
any Group Company; and there is no dispute directly or indirectly
relating to any of its fixed assets.
4.5.3 No Group Company has been the tenant of, or a guarantor in respect
of, any leasehold property other than the Properties.
4.6 BANK ACCOUNTS
4.6.1 Copies of the latest statements of the bank accounts of each Group
Company have been supplied to the Purchaser.
4.7 WORKING CAPITAL
4.7.1 Having regard to existing bank and other facilities, each Group
Company has sufficient working capital for the purposes of
continuing to carry on its business in its present form and at its
present level of turnover for the period of twelve months after
Completion and for the purposes of executing, carrying out and
fulfilling, in accordance with their terms, all orders, projects and
contractual obligations which are binding upon it and remain
outstanding.
4.8 CONTINUATION OF FACILITIES
4.8.1 In relation to all debentures, acceptance credits, overdrafts, loans
or other financial facilities outstanding or available to any Group
Company (referred to in this clause as 'facilities'):
(a) the Disclosure Letter sets out full details of, and there are
attached to it, accurate copies of all documents relating to,
the facilities;
(b) there has been no contravention of or non-compliance with any
provision of any of those documents;
(c) no steps for the early repayment of any indebtedness have been
taken or threatened;
(d) there have not been nor are there any circumstances known to
the Warrantors whereby the continuation of any of the
facilities might be prejudiced, or which might give rise to
any alteration in the terms and conditions of any of the
facilities;
(e) none of the facilities is dependent on the guarantee or
indemnity of or any security provided by a third party other
than a Group Company;
(f) so far as the Warrantors are aware none of the facilities
might be terminated or mature prior to its stated maturity as
a result of the acquisition of the Shares by the Purchaser or
any other thing contemplated in this agreement.
4.9 GOVERNMENT GRANTS
49
4.9.1 Full details of all grants, subsidies or financial assistance
applied for or received by the Group Companies from any governmental
depadment or agency or any local or other authority are set out in
the Disclosure Letter.
4.9.2 No Group Company has done or omitted to do any act or thing which
could result in any investment grant, employment subsidy or other
similar payment made, or due to be made, to it becoming repayable or
being forfeited or withheld in whole or in part.
5. TRADING
5.1 CHANGES SINCE LAST ACCOUNTS DATE
5.1.1 Since the Last Accounts Date:
(a) the business of each Group Company has been continued in the
normal course;
(b) there has been no deterioration in the turnover or the
financial or trading position or prospects of any Group
Company;
(c) no Group Company has by doing or omitting to do anything
materially prejudiced its goodwill;
(d) no part of the business of any Group Company has been affected
by any abnormal factor not affecting similar businesses to a
like extent;
(e) each Group Company has paid its creditors in accordance with
their respective credit terms; and there are no amounts owing
by any Group Company which have been due for more than six
weeks.
5.1.2 The value of the net realisable assets of each Group Company is not
now less than at the Last Accounts Date.
5.1.3 The trading prospects of each Group Company have not been adversely
affected as a result of any event or circumstance not affecting
other companies carrying on a similar business arising since the
Last Accounts Date.
5.2 WARRANTORS' OTHER INTERESTS AND LIABILITIES TO GROUP COMPANIES
5.2.1 The Warrantors do not have any rights or interests, directly or
indirectly, in any business other than those now carried on by the
Group Companies which are or are likely to be or become competitive
with the businesses of the Group Companies, save as registered
holder or beneficial owner of any class of securities of any company
which is listed, dealt in or traded on the Stock Exchange and in
respect of which a Vendor holds and is beneficially interested in
less than 5 per cent of any single class of the securities in that
company.
5.2.2 There is no outstanding indebtedness of any Vendor to a Group Company,
5.3 EFFECT OF SALE OF SHARES
5O
5.3.1 The Warrantors have no knowledge, information or belief (but without
making any enquiry) that after Completion (whether by reason of an
existing agreement or arrangement or otherwise) or as a result of
the proposed acquisition of the Company by the Purchaser:
(a) any supplier of any Group Company will cease or be entitled to
cease supplying it or may substantially reduce its supplies to
it;
(b) any customer of any Group Company will cease or be entitled to
cease to deal with it or may substantially reduce its existing
level of business with it;
(c) any Group Company will lose the benefit of any right or
privilege which it enjoys;
(d) any officer or senior employee of a Group Company is likely to
leave.
5.3.2 Compliance with the terms of this agreement does not and will not:
(a) conflict with, or result in the breach of, or constitute a
default under any agreement or document co which any Group
Company is a party, or any provision of the memorandum or
articles of association of any Group Company or any
encumbrance, lease, contract, order, judgment, award,
injunction, regulation or other restriction or obligation of
any kind by which or to which any asset of any Group Company
is bound or subject;
(b) relieve any person from any obligation to any Group Company
(whether contractual or otherwise), or enable any person to
determine any such obligation or any right or benefit enjoyed
by any Group Company, or to exercise any right, whether under
an agreement with or otherwise in respect of any Group
Company;
(c) result in the creation, imposition, crystallisation or
enforcement of any encumbrance on any of the assets of any
Group Company;
(d) result in any present or future indebtedness of any Group
Company becoming due and payable or capable of being declared
due and payable pdor to its stated maturity.
5.4 CONDUCT OF BUSINESSES IN' ACCORDANCE WITH MEMORANDA AND ARTICLES OF
ASSOCIATION
5.4.1 Each Group Company has at all times carried on business and
conducted its affairs in accordance with its memorandum and articles
of association for the time being in force and any other documents
to which it is or has been a party.
5.4.2 Each Group Company is empowered and duly qualified to carry on
business in all jurisdictions in which it carries on business,
5.5 JOINT VENTURES AND PARTNERSHIP
51
5.5.1 No Group Company is or has agreed to become a member of any joint
venture, consortium, partnership or other unincorporated
association; and no Group Company is or has agreed to become a party
to any agreement or arrangement for sharing commissions or other
income.
5.6 AGREEMENTS RELATING TO THE MANAGEMENT AND BUSINESS
5.6.1 There are no agreements, arrangements or understandings between a
Group Company and any person who is a shareholder or the beneficial
owner of any interest in it, or in any company in which any Group
Company is interested, or any Associate of any such person, relating
to the management of any Group Company's business, or the
appointment or removal of directors of any Group Company, or the
ownership or transfer of ownership or the letting of any of the
assets of any Group Company, or the provision, supply or purchase of
finance, goods, services or other facilities to, by or from any
Group Company, or in any other respect relating to its affairs.
5.7 AGENCY AGREEMENTS AND AGREEMENTS RESTRICTING BUSINESS
5.7.1 No Group Company is a party to any agency, distributorship,
marketing, purchasing, manufacturing or licensing agreement or
arrangement, or any restrictive trading or other agreement or
arrangement pursuant to which any part of its business is carried
on, or which in any way restricts its freedom to carry on the whole
or any part of its business in the United Kingdom or elsewhere in
such manner as it thinks fit.
5.7.2 No Group Company is bound by any undertaking or assurances given to
any court or govemmental agency.
5.8 UNFAIR TRADE AND RESTRICTIVE PRACTICES
5.8.1 No Group Company has committed or omitted to do any act or thing
which could give rise to any fine or penalty; and no Group Company
is or has been a party to any agreement, practice or arrangement
which:
(a) contravenes the Trade Descriptions ▇▇▇ ▇▇▇▇;
(b) would or might result in a reference of a consumer trade
practice, within the meaning of the Fair Trading Act 1973 s
13, to the Consumer Protection Advisory Committee under Part
II of the said Act;
(c) contravenes the provisions of the Consumer Credit ▇▇▇ ▇▇▇▇;
(d) contravenes or is invalidated (in whole or in part) by or is
subject to registration under the Restrictive Trade Practices
Acts 1976 and 1977;
(e) contravenes any provisions of the Treaty of Rome;
(f) contravenes any other anti-trust, anti-monopoly or anti-cartel
legislation or regulations.
5.8.2 No Group Company has engaged in any anti-competitive practice as
defined in the Competition ▇▇▇ ▇▇▇▇.
5.9 Litigation, disputes and winding up
52
5.9.1 No Group Company is engaged in any litigation or arbitration
proceedings as plaintiff or defendant; there are no proceedings
pending or threatened either by or against any Group Company and
there are no circumstances which are likely to give rise to any
litigation or arbitration.
5.9.2 There is no dispute with any revenue or other official, department
in the United Kingdom or elsewhere, in relation to the affairs of
any Group Company, and there are no facts which may give rise to any
dispute.
5.9.3 There are no claims pending or threatened or capable of arising
against any Group Company by an employee or ▇▇▇▇▇▇▇ or third party,
in respect of any accident or injury, which are not fully covered by
insurance.
5.9.4 No order has been made or petition presented or resolution passed
for the winding up of any Group Company; no distress, execution or
other process has been levied in respect of any Group Company which
remains undischarged and there is no unfulfilled or unsatisfied
judgement or court order outstanding against any Group Company.
5.10 COMPLIANCE WITH STATUTES
5.10.1 No Group Company and so far as the Warrantors are aware none of its
officers or employees (during the course of their duties in relation to
it) has committed or omitted to do any act or thing the commission or
omission of which is or could be in contravention of any act, order,
regulation or the like (whether of the United Kingdom or elsewhere)
giving rise to any fine, penalty, default proceedings or other
liability on its part.
5.10.2 Each Group Company has conducted and is conducting its business in
accordance with all applicable laws and regulations whether of the
United Kingdom or elsewhere.
5.10.3 No Group Company carries on (or has, at any time when not an authodsed
person under Chapter III, Financial Services ▇▇▇ ▇▇▇▇, carried on)
investment business in the United Kingdom within the meaning of the
Financial Services ▇▇▇ ▇▇▇▇, s 1.
5.11 DATA PROTECTION
5.11.1 Each Group Company has duly complied with all relevant requirements of
the Data Protection ▇▇▇ ▇▇▇▇ including:
(a) the data protection principles established in that Act;
(b) requests from data subjects for access to data held by it;
(c) the requirements relating to the registration of data users
5.11.2 No Group Company has received a notice or allegation from either the
data protection registrar or a data subject alleging non-compliance
with the data protection principles or prohibiting the transfer of data
to a place outside the United Kingdom.
53
5.11.3 No individual has claimed or in respect of any matter arising before
Completion will have the right to claim compensation from any Group
Company under that Act for loss or unauthorised disclosure of data.
5.12 DOCUMENTS STAMPED
5.12.1 All documents which affect the right, title or interest of any Group
Company in or to any of its property, undertaking or assets, or to
which a Group Company is a party, and which attract stamp duty have
been duly stamped within the requisite period for stamping.
5.13 BUSINESS NAMES
5.13.1 No Group Company uses a name for any purpose other than its full
corporate name.
5.14 TRANSACTIONS INVOLVING DIRECTORS
5.14.1 No Group Company has been a party to any transaction to which any of
the provisions of CA s 320 or s 330 may apply.
5.15 POWERS OF ATTORNEY AND AUTHORITY
5.15.1 No power of attorney given by any Group Company is in force.
5.15.2 No authorities (express or implied) by which any person may enter into
any contract or commitment to do anything on behalf of a Group Company
are outstanding.
5.16 LICENCES AND CONSENTS
5.16.1 Each Group Company has obtained all necessary licerices and consents
for the proper carrying on of its business (short particulars of each
licence and consent being set out in the Disclosure Letter) and all the
licences and consents are valid and subsisting.
5.16.2 No Group Company is in breach of any of the terms or conditions of any
of the licences or consents; and there are no factors that might in any
way prejudice the continuation or renewal of any of them.
5.17 SUBSISTING CONTRACTS
5.17.1 The Disclosure Letter contains accurate particulars of all material
subsisting contracts, whether written or oral, to which any Group
Company is a party.
5.17.2 No Group Company is a party to any contract, transaction, arrangement
or liability which:
(a) is of an unusual or abnormal nature or outside the normal
course of business;
(b) is for a fixed term of more than three months;
54
(c) is of a long-term nature (that is, unlikely to have been fully
performed in accordance with its terms more than six months
after the date on which it was entered into or undertaken);
(d) is incapable of termination by it in accordance with its terms
on thirty days' notice or less;
(e) is of a loss-making nature (that is, known to be likely to
result in a loss to it on completion of performance);
(f) cannot readily be fulfilled or performed by it on time without
undue or unusual expenditure or commitment of money, effort or
personnel;
(g) involves payment by it of amounts determined by reference to
fluctuations in the index of retail pdces or any other index
or in the rate of exchange for any currency;
(h) involves an aggregate outstanding expenditure by it of more
than L10,000;
(i) involves or is likely to involve the supply of goods the
aggregate sales value of which will represent in excess of 10
per cent of its turnover for the preceding financial year;
(j) is a contract for hire or rent, hire purchase or purchase by
way of credit sale or periodical payment;
(k) involves or is likely to involve obligations or liabilities
which by reason of their nature or magnitude ought reasonably
to be made known to an intending purchaser of the Shares.
5.17.3 There is not now outstanding in respect of any Group Company any
agreement for the supply of services or for agency by or to any Group
Company.
5.18 DEFAULTS BY GROUP COMPANY
5.18.1 No Group Company is:
(a) in default under any agreement, obligation or arrangement to
which it is a party or in respect of any other obligations or
restrictions binding upon it;
(b) in default under any obligations existing by reason of
membership of any association or body;
(c) liable in respect of any representation or warranty (whether
express or implied) or any matter giving rise to a duty of
care on its part.
5.18.2 No threat or claim of default under any agreement, obligation or
arrangement has been made and is outstanding against any Group Company;
and there is nothing whereby any right, benefit or entitlement may be
prematurely terminated by any other party or whereby the terms of any
agreement, obligation or arrangement may be worsened.
55
5.19 OTHER PARTY'S DEFAULTS
5.19.1 No party to any agreement or arrangement with or under an obligation to
any Group Company is in default under it, being a default which would
be material in the context of the Group Company's financial or trading
position; and there are no circumstances likely to give rise to a
default.
5.20 OUTSTANDING OFFERS
5.20.1 No offer, tender or the like involving any amount exceeding
L25,000 is outstanding which may be converted into an obligation
of any Group Company by acceptance or other act of some other person.
5.21 DEFECTIVE PRODUCTS
5.21.1 No Group Company has manufactured, sold or supplied products which are
or were in any material respect faulty or defective or which do not
comply in any material respect with any warranties or representations
expressly or impliedly made by it or with all applicable regulations,
standards and requirements
5.22 SERVICE LIABILITIES
5.22.1 No Group Company is subject to any liability or obligation (except as
implied by law) to service, repair, maintain, take back or otherwise do
or not do anything in respect of any goods that have been or are
delivered by it.
5.23 PURCHASES AND SALES FROM OR TO ONE PARTY
5.23.1 During the three years immediately preceding the Last Accounts Date
neither more than 25 per cent of the aggregate amount of all the
purchases, nor more than 25 per cent of the aggregate amount of all the
sales, of any Group Company are obtained or made from or to the same
supplier or customer (including any person in any way connected with
such supplier or customer) nor is any material source of supply to any
Group Company, or any material outlet for the sales of any Group
Company, in jeopardy or likely to be in jeopardy.
5.24 GUARANTEES AND INDEMNITIES
5.24.1 No guarantee, or agreement for indemnity or for suretyship, given by or
for the accommodation of, a Group Company is outstanding.
5.25 INSIDER CONTRACTS
5.25.1 No contract or arrangement to which any Group Company is a party and in
which any Warrantor or any director of any Group Company is or has been
interested, whether directly or indirectly, is outstanding or was
outstanding during the past three years.
5.25.2 No Group Company is a party to, and its profits or financial position
during the past three years have not b6en affected by, any contract or
arrangement which is not of an entirely arm's length nature.
56
5.26 Management reports
5.26.1 There have been no reports, commissioned by and concerning any Group
Company, by financial; or management consultants during the past three
years.
6. EMPLOYMENT
6.1 EMPLOYEES AND TERMS OF EMPLOYMENT
6.1.1 Full particulars of the identities, dates of commencement of
employment, or appointment to office, and terms and conditions of employment of
all the employees and officers of each Group Company, including without
limitation profit sharing, commission or discretionary bonus arrangements, are
fully and accurately set out in the Disclosure Letter.
6.1.2 There are no agreements or arrangements (whether or not legally
binding) between any Group Company and any trade union or other body
representing employees.
6.1.3 No contract of service exists between any Group Company and a director
or employee in relation to which any relevant requirements of CA s 319 have not
been fulfilled.
6.2 BONUS SCHEMES
6.2.1 There are no schemes in operation under which any employee of any Group
Company is entitled to a commission or remuneration, calculated by reference to
the whole or part of the turnover, profits or sales of any Group Company
6.2.2 No Group Company has registered a profit-related pay scheme under ICTA
Part V Chapter III.
6.3 CHANGES IN REMUNERATION
6.3.1 During the period to which the Principal Accounts relate and since the
Last Accounts Date or (where employment or holding of office commenced after the
beginning of such period) since the commencing date of the employment or holding
of office:
(a) no change has been made in the rate of remuneration,
emoluments or pension benefits, of any officer, ex-officer or
senior executive of any Group Company (a senior executive
being a person in receipt of remuneration in excess of
L25,000 per annum);
(b) no change has been made in any other terms of employment of
any officer or senior executive.
6.3.2 No Group Company is bound or accustomed to pay any moneys other than in
respect of remuneration or pension benefits to or for the benefit of any officer
or employee of any Group Company.
57
6.3.3 No negotiations for any increase in the remuneration or benefits of any
officer or employee of any Group Company are current or likely to take place
within six months after the date of Completion.
6.4 TERMINATION OF CONTRACTS OF EMPLOYMENT
6.4.1 All subsisting contracts of service to which any Group Company is a
party are determinable at any time on three months' notice or less without
compensation (other than compensation in accordance with the Employment Rights
Act 1996).
6.4.2 No executive of any Group Company, who is in receipt of remuneration in
excess of L25,000 per annum, and no officer of any Group Company has given
or received notice terminating his employment, except as expressly contemplated
in this agreement, and no such executive or officer will be entitled to give
such notice as a result of this agreement.
6.5 INDUSTRIAL DISPUTES AND NEGOTIATIONS
6.5.1 None of the Group Companies or their respective employees is involved
in any industrial dispute, and there are no facts known or which would on
reasonable enquiry be known to any Group Company or its directors or to the
Warrantors which might suggest that there may be any industrial dispute
involving a Group Company or that this agreement may lead to any such industrial
dispute.
6.6 INDUSTRIAL AGREEMENTS
6.6.1 No Group Company has entered into any recognition agreement with a
trade union nor has it clone any act which might be construed as recognition.
6.7 [DELETED]
6,8 PENSIONS
6.8.1 Apart from the pension schemes referred to in Schedule 6 ('the
Schemes') no Group Company is under any legal or moral liability or obligation
or a party to any ex-gratia arrangement or promise to pay pensions, gratuities,
super-annuation allowances or the like, or otherwise to provide 'relevant
benefits' within the meaning of ICTA s 612 to or for any of its past or present
officers or employees or their dependants; and there are no retirement benefit,
or pension or death benefit, or similar schemes or arrangements in relation to
or binding on any Group Company or to which any Group Company contributes.
6.8.2 Accurate and complete particulars of the Schemes are contained in or
annexed to the Disclosure Letter including copies of the trust deeds and details
of current membership.
6.8.3 [DELETED]
6.8.4 The Schemes are exempt approved scheme within the meaning of ICTA s 592
and there is no reason why approval may be withdrawn.
6.8.5 No Group Company has made or proposed any voluntary or ex-gratia
payments to any person in respect of any benefit as defined in clause 6.8.1
above.
58
6.8.6 No undertaking or assurance (whether legally binding or not) has been
given by any Group Company to any person as to the continuance, introduction,
increase or improvement of any such benefit or scheme or arrangement as is
referred to in clause 6.8.1 of this agreement (including, for the avoidance of
doubt, the Disclosed schemes)
6.8.7 All trust deeds, rules and other documents which have at any time
governed any scheme run by the Company (including any which have now been
superseded or consolidated) together with details of any consents given in
respect of any and each amendment are complete, up to date, accurate and comply
with all required regulations and statutes.
6.8.8 All required announcements to members of any of the Schemes have been
made in accordance with the pensions acts.
6.8.9 All members of the Schemes both current and past have received the
correct explanatory booklets and other explanatory literature as is required
under the pensions acts.
6.8.10 The audited accounts for the "Belix Staff Pension Scheme" and any which
have now been superseded or consolidated are audited to the requirements of the
pensions acts and not qualified in any way.
6.8.11 The list of members of the Schemes provided detail all members,
pensioners, deferred pensioners and all persons with an interest in each and all
Schemes with full particulars of them relevant and sufficient to establish their
benefits, including full particulars of any benefit augmentation granted to
them.
6.8.12 There are no discretionary benefits provided under and discretionary
arrangements relating to the Schemes including any discretionary increases of
deferred pensions or pensions in payment
6.8.13 All contributions and premiums which have accrued for payment by the
Group Companies under all the Schemes and in accordance with the schedule of
contributions prepared under the Pensions ▇▇▇ ▇▇▇▇ and all contributions which
have fallen due for payment from members of the Schemes have been duly made and
the Group Companies fulfilled all their obligations under the Schemes.
6.8.14 All lump sum death benefits which may be payable under Schemes (other
than a refund of the members contributions with interest where appropriate) are
fully insured with a reputable insurance company authorised to carry on long
term insurance under the Insurance ▇▇▇ ▇▇▇▇. All such contracts under which such
benefits are insured are enforceable and there are no grounds on which the
insurance company concerned might avoid liability under such policy or contract.
Each member and beneficiary has been covered for such insurance by such
insurance company at it's normal rates and on its normal terms.
6.8.15 All the Schemes have with out exception been administered in accordance
with the trusts powers and provisions of their governing documentation and have
been administered in accordance with and comply with all applicable legislation
and the requirements of the law.
59
6.8.16 No claim has been made or threatened against the trustees or
administrators of any of the Schemes or against any persons whom any Group
Company is or may be liable to indemnify or compensate (including complaint
under the internal dispute resolution procedure or to the pensions ombudsman or
occupational pensions regulatory authority) in respect of any act, event,
omission or other matter arising out of or in connection with any of the Schemes
and there are no circumstances which may give rise to such claims. No Group
Company has given an indemnity to any person in connection with any of the
Schemes other than contained in the Schemes' governing document.
6.8.17 Every person who is entitled to membership of the Schemes has been
invited to join as of the date on which they became so entitled.
6.8.18 The Schemes are available to both full and part time employees of both
gender.
6.8.19 The Group Companies have no outstanding liabilities and to the best of
the Warrantors knowledge there are no circumstances that could give rise to such
liability under any of the Schemes.
6.8.20 All Schemes are registered arm fully comply with the requirements of
the Occupational Pension Schemes Regulatory Authority.
6.8.21 The trustees of the Schemes have fully complied with the requirements
of the Occupational Pension Schemes Regulatory Authority and all contributions
received from members have been invested in the Schemes in a timely manner.
6.8.22 All current documentation relating to the Schemes meets with the
requirements of the Occupational Pension Schemes Regulatory Authority.
7. ASSETS
7.1 OWNERSHIP OF ASSETS
7.1.1 The Group Companies owned at the Last Accounts Date and had good and
marketable title to all the assets included in the Principal Accounts and
(except for current assets subsequently sold or realised in the normal course of
business) still own and have good and marketable title to all assets included in
the Principal Accounts (excluding the Properties) and to all assets acquired
since the Last Accounts Date.
7.1.2 No Group Company has created or granted or agreed to create or grant
any security interest or other encumbrance in respect of any of the fixed assets
included in the Principal Accounts (excluding the Properties) or acquired or
agreed to be acquired since the Last Accounts Date, otherwise than in the normal
course of its business.
7.1.3 Except as disclosed in the Principal Accounts, none of the property,
assets, undertaking, goodwill or uncalled capital of any Group Company
(excluding the Properties) is subject to, and no Group Company has agreed to
grant, any option, charge, lien or encumbrance, or right of pre-emption.
7.2 [DELETED]
60
7.3 STOCKS AND WORK IN PROGRESS
7.3.1 In the reasonable opinion of the Warrantors the stock of raw materials,
packaging materials and finished goods now held are not excessive and are
adequate in relation to the current trading requirements of the businesses of
the Group Companies; and none of the stock is obsolete, slow moving, unusable,
unmarketable or inappropriate or of limited value in relation to the current
business of any Group Company; and no contracts are outstanding which are likely
to change this.
7.3.2 The current work in progress of each Group Company is adequate to
support anticipated sales for the next 3 months.
7.3.3 The stock-in-trade of each Group Company is in good condition and is
capable of being sold by it in the normal course of its business in accordance
with its current price list without rebate or allowance to a purchaser,
7.4 RETENTION OF TITLE
7.4.1 No Group Company has purchased any stock, goods or materials from any
of its suppliers on terms that property in it does not pass until full payment
is made or all indebtedness discharged.
7.5 INSURANCE
7.5.1 All the stock-in-trade and the assets and undertakings of each Group
Company of an insurable nature (excluding the Properties) are, and have at all
material times been, insured in amounts representing their full replacement or
reinstatement value against fire and other risks normally insured against by
persons carrying on the same business as that carried on by it.
7.5.2 Each Group Company is now and has at all material times been adequately
covered against accident, damage, injury, third party loss (including product
liability), loss of profits and other risks normally insured against by persons
carrying on the same business.
7.5.3 All insurance is currently in full force and effect, and nothing has
been done or omitted to be done which could make any policy of insurance void or
voidable or which is likely to result in an increase in premium.
7.5.4 None of the policies is subject to any special or unusual terms or
restrictions or to the payment of any premium in excess of the normal rate.
7.5.5 No claim is outstanding or may be made under any of the policies and no
circumstances exist which are likely to give rise to such a claim.
7.6 LEASED ASSETS
7.6.1 No circumstance has arisen or is likely to arise in relation to any
asset held by a Group Company under a lease or similar agreement whereby the
rental payable has been or is likely to be increased.
7.7 PLANT IN WORKING ORDER
61
7.7.1 The plant, machinery, vehicles and other equipment used in connection
with the business of each Group Company:
(a) are in a good and safe state of repair and condition and
satisfactory working order and have been regularly and
properly maintained;
(b) are not to any material extent surplus to requirements;
(c) are in its possession and control, and are its absolute
property, save for those items the subject of the hire
purchase, leasing or rental agreements listed in the
Disclosure Letter, or in respect of which the outstanding
payments do not exceed L5,000;
(d) are not expected to require replacements or additions at a
cost in excess of L10,000 within the next six months;
(e) are all capable and (subject to normal wear and tear) will
remain capable throughout the respective periods of time
during which they are each written down to a nil value in the
accounts of the Group Companies (in accordance with normal
recognised accounting principles) of doing the work for which
they were designed or purchased.
7.7.2 Maintenance contracts are in full force and effect in respect of all
assets of the Group Companies which it is normal or prudent to have maintained
by independent or specialist contractors and in respect of all assets which any
Group Company is obliged to maintain or repair under any leasing or similar
agreement; and all those assets have been regularly maintained to a good
technical standard and in accordance with safety regulations usually observed in
relation to assets of that description and in accordance with the terms and
conditions of any applicable leasing or similar agreement.
7.8 INTELLECTUAl PROPERTY
7.8.1 All Intellectual Property Rights used or required by each Group Company
in connection with its business are in full force and effect and are vested in
and beneficially owned by it.
7.8.2 The Group Companies are the sole beneficial owners of the Intellectual
Property Rights listed in the Disclosure Letter and (where registration is
possible) a Group Company has been and is registered as proprietor and each of
those Intellectual Property Rights is valid and enforceable and none of them is
being used, claimed, opposed or attached by any other person.
7.8.3 No right or licence has been granted to any person by any Group Company
to use in any manner or to do anything which would or might otherwise infringe
any of the Intellectual Property Rights referred to above; and no act has been
done, or omission permitted by any Group Company whereby they or any of them
have ceased or might cease to be valid and enforceable.
62
7.8.4 The business of each Group Company (and of any licensee under a licence
granted by any Group Company) as now carried on does not and is not likely to
infringe any Intellectual Property Right of any other person (or would not do so
if the same were valid) or give rise to a liability to pay compensation pursuant
to the Patents ▇▇▇ ▇▇▇▇ s 40 and 41 and all licences to any Group Company in
respect of any such right are in full force and effect.
7.8.5 No Group Company has (otherwise than in the normal course of business)
disclosed or permitted to be disclosed or undertaken or arranged to disclose to
any person other than the Purchaser any of its know-how, trade secrets,
confidential information, price lists or lists of customers or suppliers.
7.8.6 No Group Company is subject to any secrecy agreement or agreement which
may restrict the use of disclosure of information.
7.8.7 Nothing has been done or omitted by any Group Company which would
enable any licensee under a licence granted by a Group Company to be terminated
or which in any way constitutes a breach of the terms of any licence.
7.8.8 None of the functioning of the software programs used in the operation
of equipment by any Group Company has been or will be adversely affected by the
fact that the first two digits in the years after 31 December 1999 will be '20'.
8. PROPERTIES
8.1 TITLE
8.1.1 The Properties comprise all the properties owned, occupied or otherwise
used in connection with their businesses by the Group Companies.
8.1.2 Those of the Properties which are occupied or otherwise used by the
Group Companies in connection with their businesses are occupied or used by
right of ownership or under lease or licence, the terms of which permit the
occupation or use.
8.1.3 The Group Companies are the legal and beneficial owners of the
Properties.
8.1.4 The information contained in Schedule 5 as to the tenure of each of the
Properties, the principal terms of the leases or licences held by the Group
Companies, and the principal terms of the tenancies and licences subject to and
with the benefit of which the Properties are held is accurate in all respects.
8.1.5 The Group Companies have a good and marketable title to each of the
Properties.
8.1.6 [DELETED]
8.1.7 Any lease of any of the Properties granted for more than twenty-one
years and less than forty years is either registered at HM Land Registry or not
registered because the reversion to it was not registered at the time of grant.
8.1.8 The replies given to enquiries raised by the Purchaser's Solicitors in
respect of the Properties are true and accurate in all respects.
8.2 ENCUMBRANCES
63
8.2.1 The Properties are free from any mortgage, debenture, charge,
rent-charge, lien or any other encumbrance securing the repayment of monies or
other obligation or liability of any of the Group Companies or any other person.
8.2.2 The Properties are not subject to any outgoings other than business
rates, water rates and insurance premiums and in the case of leasehold
properties rent and service charges.
8.2.3 The Properties are not subject to any restrictive covenants,
stipulations, easements, profits prendre, wayleaves, licences, grants,
restrictions, overriding interests or other similar rights vested in third
parties.
8.2.4 Where any of the matters referred to in clauses 8.2.1, 8.2.2 and 8.2.3
have been disclosed in the Disclosure Letter, the obligations and liabilities
imposed and arising under them have been fully observed and performed and any
payments in respect of them due and payable have been duly paid.
8.2.5 The Properties are not subject to any option, right of pre-emption or
right of first refusal.
8.3 PLANNING MATTERS
8.3.1 The use of each of the Properties is the permitted use for the purposes
of the Planning Acts.
8.3.2 Planning permission has been obtained or is deemed to have been granted
for the purposes of the Planning Acts with respect to the development of the
Properties, no permission has been suspended or called in and no application for
planning permission is awaiting decision.
8.3.3 Building regulation consents have been obtained with respect to all
development, alterations and improvements to the Properties.
8.3.4 The Group Companies have complied and are complying with:
(a) all permissions, orders and regulations applicable to the
Properties;
(b) all agreements under the Town and Country ▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ s
52 made or planning obligations under the Town and Country
▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ s 106 undertaken with respect to the
properties; and
(c) all agreements made under the ▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ s 38 with
respect to the Properties.
8.3.5 None of the Properties is listed as being of special historic or
architectural importance or located in a conservation area.
8.3.6 All claims and liabilities under the Planning Acts or any other
legislation have been discharged and no claim or liability, contingent or
otherwise, is outstanding.
8.4 STATUTORY OBLIGATIONS
8.4.1 The Group Companies have complied and are complying with all applicable
statutory and bye-law requirements with respect to the Properties.
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8.4.2 There is no outstanding and unobserved or unperformed obligation with
respect to the Properties necessary to comply with the requirements (whether
formal or informal) of any competent authority exercising statutory or delegated
powers.
8.4.3 No licences are required whether under the Licensing ▇▇▇ ▇▇▇▇ or
otherwise in relation to any of the Properties.
8.5 ADVERSE ORDERS
8.5.1 There are no compulsory purchase notices, orders or resolutions
affecting any of the Properties and there are no circumstances likely to lead to
any being made.
8.5.2 There are no closing, demolition or clearance orders, enforcement
notices or stop notices affecting the Properties and there are no circumstances
likely to lead to any being made.
8.6 CONDITION OF THE PROPERTIES
8.6.1 The buildings and other structures on the Properties are in good and
substantial repair and fit for the purposes for which they are used.
8.6.2 There are no disputes with any neighbouring owner with respect to
boundary walls and fences or with respect to any easement or right over or means
of access to any of the Properties.
8.6.3 The principal means of access to each of the Properties is over roads
which have been taken over by the local or other highway authority and which are
maintainable at the public expense and no means of access to any of the
Properties is shared with any other party nor subject to rights of determination
by any other party.
8.6.4 Each of the Properties enjoys the main services of water, drainage,
electricity and gas.
8.6.5 None of the Properties is located in an area or subject to
circumstances particularly susceptible to flooding.
8.7 INSURANCE
8.7.1 The Properties are insured in their respective full reinstatement
values for not less than two years' loss of rent and against third party and
public liabilities to an adequate extent.
8.7.2 All premiums payable in respect of insurance policies with respect to
the Properties which have become due have been duly paid and no circumstances
have arisen which would vitiate or permit the insurers to avoid the policies.
8.7.3 The information in the Disclosure Letter with respect to the insurance
policies is accurate in all respects.
8.8 LEASEHOLD PROPERTIES
65
8.8.1 The relevant Group Companies have paid the rent and observed and
performed the covenants on the part of the tenant and the conditions contained
in any leases (which expressions in this clause 8.8 includes underleases) under
which the Properties are held, and the last demand (or receipts for rent if
issued) were unqualified, and all the leases are valid and in full force.
8.8.2 All licences, consents and approvals required from the landlords and
any superior landlords under any leases of the Properties have been obtained and
the covenants on the part of the tenant contained in the licences, consents and
approvals have been duly performed and observed.
8.8.3 There are no rent reviews under the leases of the Properties held by
the Group Companies in progress.
8.8.4 No obligation necessary to comply with any notice or other requirement
given by the landlord under any leases of the Properties is outstanding and
unobserved or unperformed.
8.8.5 There is no obligation to reinstate any of the Properties by removing
or dismantling any alteration made to it by Group Companies or any predecessor
in title to the Group Companies other than as referred to in the respective
leases of the Properties.
8.8.6 No Group Company has entered into an authorised guarantee agreement
under the Landlord and Tenant (Covenants) ▇▇▇ ▇▇▇▇, s 16 in respect of any
property.
8.8.7 No Group Company has the right to call for an overriding lease of any
property under the Landlord and Tenant (Covenants) ▇▇▇ ▇▇▇▇, s 19.
8.8.8 No Group Company has entered into an agreement with the lessor of any
of the Properties specifying circumstances in which it would be reasonable for
the lessor to withhold its consent to an assignment in accordance with the
Landlord and ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇, s 19(1A).
8.8.9 All landlords fixtures and fittings are at the relevant Properties.
8.8.10 There are no covenants or other matters affecting the freehold titles
of the Properties which adversely affect the leasehold titles of the Properties.
9. THE ENVIRONMENT
9.1 AUTHORISATIONS
9.1.1 Full particulars are given in the Disclosure Letter of all material
authorisations, permissions, consents, licerices and agreements
("authorisations") (if any) held by each Group Company:-
(a) to abstract water;
(b) to hold raw materials, products or wastes;
(c) to carry on processes;
(d) to construct and maintain buildings, plant and equipment; and
66
(e) to keep, treat, carry, consign and dispose of waste materials,
gases and effluents.
All authorisations (if any) have been lawfully obtained and are in full
force and effect.
9.1.2 Each Group Company has complied with all conditions attaching to the
authorisations, and the Warrantors are not aware of any circumstances which
would make it impossible or difficult for any Group Company to comply with such
conditions in the future.
9.1.3 No Group Company has received any communication revoking, suspending,
modifying or varying any of the authorisations and is not aware of any
circumstances which might give use to any such communication being received.
9.2 COMPLIANCE WITH ENVIRONMENTAL PROTECTION LAWS
9.2.1 No Group Company has committed any breach of statutory requirements for
the protection of the environment or of human health or amenity, and they have
acted at all times in conformity with all relevant codes or practice, guidance,
notes, standards and other advisory material issued by any competent authority,
9.2.2 No Group Company has received any communication from any competent
authority in respect of the Group Company's business, failure to comply with
which would constitute breach of any statutory requirements or compliance with
which could be secured by further proceedings. The Warrantors are not aware of
any circumstances which might give rise to any such communication being
received.
9.3 ENVIRONMENTAL LIABILITY
9.3.1 The Group Companies are not aware of any actual or potential
environmental liability of the part of any Group Company arising from any
activities or operations of any Group Company from wastes or other substances
used, kept or produced by any Group Company or from the condition of any
properties now or formerly owned or occupied by any Group Company or facilities
now or formerly used by any Group Company.
9.4 WASTE AND OTHER SUBSTANCES
9.4.1 Each Group Company has at all times taken all necessary steps to ensure
proper keeping, treatment, consignment, carriage and disposal of wastes produced
in the course of the Group Company's business so as to comply with all statutory
requirements and duties and in accordance with all codes of practice, notes,
standards and other advisory material issued by any competent authority. For the
purposes of this warranty "wastes" includes substances which are wastes to a
Group Company notwithstanding that they may be of value or utility to some other
person.
9.4.2 Without prejudice to the generality of sub-paragraph 9.4.1 each Group
Company has taken all necessary steps to ensure:-
(a) that all such wastes are consigned only to a properly
authorised disposer or carrier for disposal at a facility licensed to receive
such wastes;
67
(b) that all such wastes have been properly described; and
(c) that adequate contractual rights exist so as to enable the
Group Company to obtain indemnity for any claim arising against the Group
Company in respect of such wastes by reason of breach of statutory duty, lack of
due care, or malpractice on the part of the disposer or carrier;
Particulars of all relevant contract are given in the Disclosure
Letter.
9.4.3 No dispute, claim or proceedings exist between any Group Company and
any disposer or carrier with regard to the Group Company's wastes, whether or
not yet consigned to such disposer or carrier, and the Warrantors are not aware
of any circumstances which are likely to give rise to such dispute, claim or
proceedings;
9.4.4 All other substances used or kept by each Group Company are stored,
handled AND used in such a way as to minimise the risk of environmental
Liability and there have been no unintended discharges or escapes of such
substances so as to present the risk of environmental liability.
9.5 CONDITION OF SITES
9.5.1 So far as the warrantors are aware (not having made any enquiry in
respect of the time prior to the date of creation of the Group Companies'
respective interests in the Properties) all sites owned or occupied by the Group
Companies are free from any contamination which could give rise (whether on the
relevant site or elsewhere to environmental liability.
9.5.2 The Warrantors are not aware of any circumstances which may require
expenditure (whether by any Group Company or by any other person or authority)
on cleaning up or decontaminating any sites now owned or occupied by any Group
Company so as to avoid or reduce the risk of environmental liability or which
may require expenditure on investigatory, monitoring, precautionary or remedial
engineering measures in relation to any such site, nor are the Warrantors aware
of circumstances which may give rise to a claim against any Group Company in
respect of such expenditure on any site formerly owned or occupied by any Group
Company.
9.5.3 No communication has been received from any competent authority
relating to the condition of any site now or formerly owned or occupied or
relating to a proposal for the inclusion of any such site in any register of
potentially contaminated land nor are the Warrantors aware of any circumstances
likely to give rise to the service of such a communication.
9.6 ENVIRONMENTAL INFORMATION
9.6.1 The Group Companies have at all times supplied to the competent
authorities such information and assessments as to the Group Companies;'
processes, substances, discharges, wastes, and effluents as are required by law
to be supplied. All such information given (whether under a legal obligation or
otherwise) was correct at the time the information was supplied and so far as
the Warrantors are aware all information contained on public registers relating
to such matters is correct.
9.7 INTERNAL ENVIRONMENTAL POLICY AND AUDITS
68
9.7.1 The Group Companies have complied with any internal or published
statements of corporate environmental policy and operating procedures.
9.7.2 No environmental investigations, audits or appraisals have been
undertaken or commissioned by the Group Companies of the Group Companies'
operations, plant, equipment or sites ("audits").
69
SCHEDULE 4
DEED OF INDEMNITY
THIS DEED is made the day of 2000
Between:
1 'THE COVENANTORS': the persons whose names and addresses are set out in
the Schedule.
2 'THE COMPANY': The Belix Company Limited (registered no1567245) whose
registered office is at ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇ lSB on behalf of itself and each Group Company.
RECITAL:
This deed is entered into pursuant to an agreement made between the Covenantors
and others (1) and Xcel Power Systems Limited ('the Purchaser') (2) relating to
the sale of all the ordinary share capital of the Company ('the Agreement').
OPERATIVE PROVISIONS:
1. DEFINITIONS
In this deed:
1.1 Words and expressions defined in the Agreement shall, except where
otherwise provided or expressly defined below, have the same meaning in this
deed.
1.2 'Taxation' means all forms of taxation, duties, imposts and levies
whatsoever and whenever imposed and whether of the United Kingdom or elsewhere,
and without prejudice to the generality of that expression includes:
1.2.1 income tax, corporation tax, capital gains tax, inheritance tax,
duty stamp duty reserve tax, rates, value added tax, customs and other import
duties and national insurance contributions, any payment whatsoever which the
Company may be or become bound to make to any person as a result of any
enactment relating to taxation and any other taxes, duties or levies
supplementing or replacing any of the above;
1.2.2 all costs, charges, interest, fines, penalties and expenses incidental,
or relating, to any Taxation.
1.3 Where the context admits, 'Company' includes each Group Company, so
that this deed shall apply to each Group Company as if it were the Company, and
the covenants given by the Covenantors are expressly given to each Group Company
and may be enforced against the Covenantors by each and every Group Company
acting jointly or severally.
1.4 'Relief' includes any relief, allowance, exemption, set-off or
deduction in computing or against profits, income or gains of any description or
from any source, or credit against Taxation.
7O
1.5 'Liability to Taxation' means any liability to make a payment in
respect of Taxation but does not include:
1.5.1 the loss, counteracting or clawing back of any Relief which would
otherwise have been available to the Company;
1.5.2 the nullifying, cancellation or set-off of a right to repayment of
Taxation which would otherwise have been available to the Company; provided
however that if such loss, counteracting or clawing back of any such Relief as
is referred to in clause 1.5.1 or the nullifying, cancellation or set-off of
that right to repayment as is referred to in clause 1.5.2 results in the Company
thereby suffering a liability to make a payment in respect of Taxation, that
liability shall itself be a 'Liability to Taxation' for the purposes of this
deed.
1.6 'Claim for Taxation' includes any notice, demand, assessment, letter
or other document issued, or action taken, by or on behalf of the Inland
Revenue or Customs and Excise authorities or any other statutory or
governmental authority or body whatsoever in any part of the world, whereby
it appears that the Company is or may be subject to a liability to Taxation
(whether or not it is primarily payable by the Company and whether or not the
Company has or may have any right of reimbursement).
1.7 'Final Determination' means in relation to a Claim for Taxation where
there is an appeal against that assessment:
1.7.1 an agreement under TMA s 54 or any legislative provision corresponding
to that section; or
1.7.2 a decision of a court or tribunal from which either no appeal lies, or
in respect of which no appeal is made within the prescribed time limit.
2. INDEMNITY
2.1 Subject as provided below, the Covenantors jointly and severally
covenant with the Company (for itself and as trustee for each Group Company)
that they will indemnify each Group Company against:
2.1.1 either any Liability to Taxation or any depletion in the value of the
assets of the Company arising by reason of or in consequence of or in connection
with any Liability to Taxation;
2.1.2 any settlement of a Claim for Taxation; and
2.1.3 the costs incurred by the Company in relation to any demands, actions,
proceedings and claims in respect of Liabilities to Taxation or Claims for
Taxation.
2.2 The indemnity in clause 2.1 shall apply only where the Liability to
Taxation or the Claim for Taxation:
2.2.1 is made wholly or partly in respect of or in consequence of any acts,
omissions or transactions of the Company or of the Covenantors occurring or
entered into on or before the date of this deed; or
71
2.2.2 results from or is calculated by reference to any actual or deemed
income, profits or gains earned, received or accrued, or deemed to have been
earned, received or accrued, on or before that date; or
2.2.3 results from or is made by reference to any dividend or distribution
paid or made, or deemed to have been paid or made, before that date.
2.3 In respect of any payment due from the Covenantors under clause [2.1],
the Company may if it is satisfied that it will be or has been subject to a
Liability to Taxation calculate and demand in writing from the Covenantors from
time to time such amount as will ensure that the net receipt to the Company
(after Taxation) in respect of the payment is the same as it would have been
were the payment not subject to Taxation in the hands of the Company.
3. EXCLUSIONS
3.1 The indemnity in clause 2.1 shall not apply to any Liability to
Taxation or Claim for Taxation:
3.1.1 to the extent that an appropriate provision or reserve was made in the
Principal Accounts or was specifically referred to in the notes to those
Accounts;
3.1.2 for which the Company is or may become liable wholly or primarily as a
result of transactions in the normal course of its business after the Last
Accounts Date;
3.1.3 to the extent that the Liability or Claim arises as a result only of
the appropriate provision or reserve in the Principal Accounts being
insufficient by reason of any increase in rates of Taxation made after the date
of the Agreement;
3.1.4 which would not have arisen but for a voluntary act or transaction
carried out by the Company after the date of this deed otherwise than in the
normal course of business;
3.2 The total liability of the Covenantors under this deed in respect of a
Claim for Taxation shall not in any event exceed the aggregate amount of the
consideration for the Shares actually received by them pursuant to the
Agreement.
3.3 The Covenantors shall not be liable to the Company for any Claim for
Taxation in respect of any act, omission or circumstances occurring prior to
2nd October 1981 save to the extent that any act omission or other conduct of
the Covenantors after that date shall have increased the amount of any such
Claim for Taxation and then only in respect of the said increase.
4. MITIGATION
4.1 Except as provided in clause 4.2, the Covenantors shall be liable
under the indemnity in clause 2.1 notwithstanding any Reliefs, rights of
repayment or other rights or claims of a similar nature, which may be
available to any person entitled to the benefit of the indemnity to set
against or otherwise mitigate any Liability to Taxation, so that the
indemnity in clause 2.1 shall take effect as though no such Reliefs, rights
of repayment or other rights or claims were available.
72
4.2 The provisions of clause 4.1 shall not apply if and to the extent that
the Reliefs, rights of repayment, or other rights or claims mentioned in that
clause arose:
4.2.1 wholly or mainly by reason of any act, omission or transaction of any
Group Company before the Last Accounts Date;
4.2.2 wholly or mainly by reason of any act, omission or transaction of the
Covenantors which does not cause the Company to incur any liabilities, costs or
expenses (unless the Company receives a satisfactory indemnity against them)
and, without prejudice to the generality of this clause, the Company shall
co-operate at the cost of the Covenantors in making a claim for group relief
which falls within this clause.
4.3 Where and to the extent that clause 4.2 applies, credit shall be given
to the Covenantors against any liability under this deed for any such Reliefs,
rights of repayment or other rights or claims as are mentioned in clause 4.1.
4.4 When the Covenantors have satisfied an obligation under this deed to
indemnify the Company against a Liability to Taxation and the Company has
(whether by operation of law, contract or otherwise) a right of reimbursement
(including by way of indemnity) against any other person or persons in respect
of the Liability to Taxation, the Company shall take all reasonable steps to
enforce the right, giving credit to the Covenantors for any sum recovered by the
Company by reason of the right, or shall at the request and expense of the
Covenantors assign the right to the Covenantors, in such form as they shall
reasonably require.
4.5 If:
4.5.1 any provision for Taxation contained in the Principal Accounts is or
has been at the date that any payment is due to be made by the Covenantors under
clause 2 certified by the Company's auditors at the Covenantors' request and
expense to be an over-provision; or
4.5.2 the tax liability which has resulted in the payment by the Covenantors
gives rise to a corresponding saving for any Group Company; the value (as
certified by the Company's auditors) of the over-provision or corresponding
provision shall be set off first against the payment then due from the
Covenantors and secondly (to the extent there is any excess) against any further
such payment(s) in chronological order until exhausted but if it is subsequently
found that the over-provision or corresponding saving as certified was not in
fact an over-provision or corresponding saving or that the certified amount or
value was excessive any amount which has been set off under this clause in
respect of the purported over-provision or corresponding saving shall on demand
be repaid forthwith by the Covenantors to the Purchaser or (as the case may be)
to the appropriate Group Company, the obligations of the Covenantors to make the
repayment being joint and several.
73
5. CONDUCT OF CLAIMS
5.1 The Company shall notify the Covenantors in writing of any Claim for
Taxation which comes to its notice whereby it appears that the Covenantors are
or may become liable to indemnify the Company under this deed. Where a time
limit for appeal applies to the Claim, the notification shall be given as soon
as reasonably possible after the date on which the Claim comes to the notice of
the Company but, where no time limit applies or the period to which the limit
relates has not commenced, the notification shall be given within fifty six days
of that date.
5.2 The Company shall ensure that a Claim for Taxation to which this deed
applies is so far as reasonably practicable not paid prematurely; and for this
purpose any payment made by the Company to avoid incurring interest or any
penalty in respect of unpaid taxation shall be deemed not to be paid
prematurely.
6. DATES FOR AND QUANTUM OF PAYMENTS
6.1 This clause shall apply solely for determining the date on which any
payments or repayments shall be made by or to the Covenantors pursuant to this
deed and (where expressly provided) the amounts of the payments or repayments.
6.2 The Covenantors shall make payment to the Company to the extent that
and on the date on which the Company discharges or is deemed to discharge a
Liability to Taxation in respect of which the Company is entitled to be
indemnified under this deed.
6.3 The Company shall make a repayment to the Covenantors to the extent
that and on the date on which the Company receives any repayment of any amount
paid in respect of any Liability to Taxation pursuant to clause 6.2. Any
repayment to the Covenantors pursuant to this clause 6.3 shall not prejudice the
right of the Company to recover from the Covenantors under this deed in the
event that a further Liability to Taxation is imposed upon the Company, whether
in respect of matters to which the repayment relates or otherwise.
6.4 For the purposes of clause 6.2, the Company shall be deemed to
discharge a Liability to Taxation:
6.4.1 on the date on which the Company pays any amount of Taxation;
6.4.2 on the date on which any Liability to Taxation would have fallen due
but for Reliefs, rights of repayment or other rights or claims of a similar
nature to which clause 4.1 applies.
6.5 For the purpose of clause 6.3, the Company shall be deemed to receive a
repayment:
6.5.1 on the date on which the Company receives a repayment of Taxation to
which clause 6.2 applies;
6.5.2 if and when the Company would have received a repayment but for a
Liability to Taxation in respect of which the Company is not entitled to be
indemnified under this deed;
74
6.5.3 if and when the Company would have received a repayment had the
Liability to Taxation been discharged by a payment of Taxation; or
6.5.4 if and when the Company is able to obtain the benefit of a reduction in
its Liability to Taxation of the right to repayment.
6.6 Upon Final Determination of a relevant Claim for Taxation the
Covenantors shall promptly pay to the Company such amount or further amount in
addition to any sums already paid under this deed as is required to cover the
full liability of the Covenantors under this deed.
6.7 Any dispute in relation to the provisions of clauses 6.4, 6.5 or 6.6
may be referred, by the Company or the Covenantors, to the auditors for the time
being of the Company, acting as experts and not as arbitrators, whose
certificate shall be final and binding upon the parties in the absence of
manifest error.
7. GENERAL
7.1 The Company shall procure that each other Group Company performs its
obligations under this deed.
7.2 This deed shall be binding on the Covenantors and their respective
successors and personal representatives.
7.3 The benefit of this deed may not be assigned in whole or in part by the
Covenantors.
7.4 The provisions of the Agreement relating to notices shall apply to any
notice to be given under, or in connection with, this deed.
7.5 The construction, validity and performance of this deed shall be
governed by the laws of England.
IN WITNESS whereof the parties have executed this Debenture as a deed the day
and year first before written
Executed as a Deed by )
THE BELIX COMPANY )
LIMITED by two directors or )
a director and secretary )
Director:
Director/Secretary::
75
Executed As a Deed by the said )
▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ )
in the presence of: )
Witness Name .................
Signature ....................
Address ......................
Occupation ...................
Executed as a Deed by the said )
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ )
in the presence of: )
Witness Name .................
Signature ....................
Address ......................
Occupation ...................
Executed as a Deed by the said )
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ )
in the presence of: )
Witness Name .................
Signature ....................
Address ......................
Occupation ...................
76
Executed as a Deed-by the said )
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ )
in the presence of: )
Witness Name .................
Signature ....................
Address ......................
Occupation ...................
Executed as a Deed by the said )
▇▇▇▇▇ ▇▇▇▇▇ )
in the presence of: )
Witness Name .................
Signature ....................
Address ......................
Occupation ...................
Executed as a Deed by the said )
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ )
in the presence OF: )
Witness Name .................
Signature ....................
Address ......................
Occupation ...................
77
Executed as a Deed by the said )
▇▇▇▇▇ ▇▇▇▇▇▇ READ )
in the presence of: )
Witness Name .................
Signature ....................
Address ......................
Occupation ...................
Executed as a Deed by the said )
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ )
in the presence of: )
Witness Name .................
Signature ....................
Address ......................
Occupation ...................
78
THE SCHEDULE
NAMES AND ADDRESSES OF COVENANTORS
---------------------------------
Covenantors' Name and Address
---------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇ ▇▇▇
---------------------------------
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ lEG
---------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ lEG
---------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Little Firs
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ I
---------------------------------
▇▇▇▇▇ ▇▇▇▇▇
Little Firs
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
---------------------------------
79
---------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
63 Surbiton Hill Park
Berrylands
Surbiton
Surrey KT5 8EH
---------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇ Read
▇▇ ▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
---------------------------------
▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇
41 The Drive
▇▇▇▇▇ Court
Epsom
Surrey ▇▇▇▇ ▇▇▇
---------------------------------
8O
SCHEDULE 5
Short particulars of the properties
Leasehold properties and details of the leases
a) Unit 1 (formerly ▇▇▇▇▇▇▇▇ Bakery) ▇▇▇ ▇▇▇▇ Chessington Surrey -
Underlease dated 16th December 1988 between RacaI-Decca Marine
Navigation Limited (1) The Belix Company Limited (2) and Techview
Limited (3) for 11 years from 26th September 1988.
b) ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Newtown Powys - Lease dated 3rd
January 1984 between The Development Board for Rural Wales (1) and
Belix (Wales) Limited (2) for 25 years from 1st January 1984.
81
SCHEDULE 6
Pension Schemes
The Belix Company Limited and Subsidiary Company staff Pension Scheme
established by Declaration of Trust dated 21 August 1985.
The Belix Company Executive Pension Scheme with Standard Life as evidenced by
a participation agreement dated 6th September 1988 between the Company and
Standard Life Trustee Company Limited.
82
SCHEDULE 7
WARRANTORS' PROTECTION PROVISIONS
(1) The liability of the Warrantors in relation to the Warranties (save
for the Warranties contained in clause 3 of Schedule 3) shall cease on the
expiry of the second anniversary of the date of this agreement and in respect
of the Warranties contained in clause 3 of Schedule 3 shall cease on the
expiry of the seventh anniversary of the date of this agreement save as
regards any alleged specific breach of which notice in writing (containing
details of the event or circumstance giving rise to the breach, the basis
upon which the Purchaser is making a claim against the Warrantors and the
total amount of liability which results) has been given to the Warrantors
prior to that anniversary.
(2) The Warrantors shall not be liable for any Warranty Claim unless and
until their aggregate liability (or what would be their liability apart from
this paragraph) for all Warranty Claims exceeds L20,000 whereupon they
shall be liable for the full amount of such claim.
(3) The total liability of the Warrantors under the Warranties shall not
in any event exceed the amount of the consideration for the Shares actually
received by all the Warrantors.
(4) In the event of any Warranty Claim being established the Warrantors
shall be entitled to set off against the amount of any depletion in or
reduction in the value of the assets of the Group Companies giving rise to
the Claim the amount by which (after adjustment where appropriate for
Taxation in respect of revenue items) the position of the Group Companies
(taken as a whole) in respect of any other matter is established to be better
than as so warranted (after adjustments where appropriate for Taxation).
(5) The Warrantors shall not be liable for any Warranty Claim to the
extent that the subject matter of the Claim is taken into account in
determining an adjustment to the purchase consideration for the Shares in
accordance with the provisions of clause 4 no in respect of any act omission
or circumstances arising prior to the 2nd October 1981 except to the extent
that such warranty claim was increased by any act omission or other conduct
of the Warrantors after such date and in such circumstances only then for the
amount of such increase so arising.
(6) If the Purchaser and the Group Companies, or any of them, are
entitled to make a claim in respect of any act, event or default both under
the Warranties and under the Deed of Indemnity, the claim shall be made first
under the Warranties and any amount payable to the Purchaser or any Group
Company under the Deed of Indemnity shall be reduced to the extent of the
claim.
83