Exhibit 10.1
DATED DECEMBER 22, 2006
(1) P ▇▇▇▇▇▇▇ AND OTHERS
(2) CTI DATA SOLUTIONS LIMITED
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SHARE TRANSFER AGREEMENT
-relating to-
RYDER SYSTEMS LIMITED
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(▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ LOGO)
NO ▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇
TEL: ▇▇(▇)▇▇▇ ▇▇▇ ▇▇▇▇ FAX: ▇▇(▇)▇▇▇ ▇▇▇ ▇▇▇▇ DX 721090 BIRMINGHAM 43
ALSO AT: ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
Tel: ▇▇(▇)▇▇▇ ▇▇▇ ▇▇▇▇ Fax: ▇▇(▇)▇▇▇ ▇▇▇ ▇▇▇▇ DX ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇.▇▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇.▇▇.▇▇ Email: ▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇.▇▇▇
INDEX
Clause Page
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1 INTERPRETATION 1
2 AGREEMENT FOR SALE AND ▇▇▇▇▇▇▇▇ ▇
▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇
▇ ▇▇▇▇▇▇▇▇▇▇ AND TAXATION 15
5 COMPLETION 16
6 CONFIDENTIAL INFORMATION AND USE OF NAMES 22
7 RESTRICTIVE UNDERTAKINGS 23
8 INDEMNITIES 25
9 THIRD PARTY RIGHTS 26
10 ASSIGNMENT 26
11 WHOLE AGREEMENT 27
12 WAIVER 27
13 PROVISIONS SURVIVING COMPLETION 28
14 PROPER LAW AND JURISDICTION 28
15 JURISDICTION 28
16 FURTHER ASSURANCE 28
17 COUNTERPARTS 28
18 COSTS 28
19 SEVERABILITY 28
20 PUBLICITY 29
21 NOTICES 29
SCHEDULE 1 - The Sellers 31
SCHEDULE 2 32
SCHEDULE 3 - Property 34
SCHEDULE 4 - Tax 35
Part 1 Definitions 35
Part 2 Tax Warranties 41
Part 3 Tax Covenant 49
Part 4 Limitations and procedure 51
SCHEDULE 5 - The Warranties 58
SCHEDULE 6 - Claims procedure and determination and Sellers' safeguards 84
SCHEDULE 7 89
Part 1 - Interpretation 89
Part 2 - Calculation 89
Part 3 - Accounting principles, methods and bases 90
SCHEDULE 8 - Countries in Restricted Area 92
SCHEDULE 9 - Pro Forma for Completion Accounts 94
This Agreement is made on _____________ 2006 between:
(1) THE INDIVIDUALS whose names and addresses are set out in column 1 of
Schedule 1 (each a "Seller" and together "the Sellers") and
(2) CTI DATA SOLUTIONS LIMITED, a company registered in England under number
2969593, whose registered office is at ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇ ▇▇▇ ("the Buyer").
IT IS AGREED AS FOLLOWS:
1. INTERPRETATION
In this Agreement:
1.1 The following words and expressions shall have the following meanings:
"the Accounts" the audited accounts of the Company comprising
an audited balance sheet as at the Accounts
Date and an audited profit and loss account for
the financial period ended on the Accounts Date
together with the reports of the directors and
auditors, any cash flow statements and all
notes thereto;
"the Accounts Date" 30 April 2006;
"the Act" the Companies ▇▇▇ ▇▇▇▇;
"the Applicable Data the Data Protection Acts 1984 and 1998 and the
Protection Laws" Telecommunications (Data Protection and
Privacy) (Direct Marketing) Regulations 1998;
"the Bank" Clydesdale Bank Plc t/a Yorkshire Bank
(Birmingham branch);
"Business Day" any day (other than Saturday) on which clearing
banks are open for normal banking business in
sterling in the City of London;
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"Business Name Agreement" an agreement in the Agreed Terms proposed to be
entered into between the Company and ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ relating to the use of the name "Ryder"
and other names;
"Business Name Assignment" an agreement dated the date of this Agreement
but entered prior to this Agreement between the
Company and Ryder Systems Pty Limited relating
to the assignment of the name "Ryder" and
certain domain names;
"Buyer's Group" together the Buyer, each holding company of the
Buyer and each subsidiary of the Buyer for the
time being;
"the Buyer's Solicitors" ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ of ▇▇. ▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇ or any successor firm;
"the Company" Ryder Systems Limited (of which particulars are
given in Schedule 2);
"Completion" completion of the acquisition and disposal of
the Shares in accordance with clause 5;
"Completion Date" the date of this Agreement;
"the Completion NAV" as defined in part 1 of Schedule 7;
"Confidential Information" all secret or confidential commercial,
financial and technical information, know-how,
trade secrets, inventions, computer software
and other information whatsoever and in
whatever form or medium and whether disclosed
orally or in writing, together with all
reproductions in whatsoever form or medium and
any part or parts of it;
"Covenantor" ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ (one of the Sellers);
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"the Disclosure Letter" the letter having the same date as this
Agreement from the Warrantors to the Buyer
(including the schedules, appendices and
annexures thereto);
"the Due Amount" the amount (if any) due to the Buyer on a
Relevant Claim being settled;
"the Due Proportions" the proportions set opposite the names of the
Sellers in column 3 of Schedule 1;
"Encumbrance" any equity, right to acquire, option, right of
pre-emption, mortgage, charge, pledge, lien,
assignment, title retention or any other
security interest, agreement or arrangement,
whether monetary or not;
"Escrow Account" a joint deposit account with the Bank in the
joint names of the Buyer's Solicitors and the
Sellers' Solicitors;
"Escrow Agreement" the agreement in the Agreed Terms to be entered
into by the Seller's Solicitors and the Buyer's
Solicitors regarding the operation of the
Escrow Account;
"Estimated Liability" the amount claimed by the Buyer in respect of a
Relevant Claim;
3
"Financial Statements" unaudited accounts of the Company for the nine
month periods ended 30 September 2005 and 30
September 2006 and for the six month periods
ended 31 October 2005 and 31 October 2006
comprising a balance sheet, profit and loss
account and cash flow statement together with
corresponding notes prepared on the same
accounting principles, methods and bases used
in the preparation of the Accounts,
consistently applied, and in accordance with
the generally accepted United Kingdom
accounting principles, methods and bases;
"FRS" a financial reporting standard in force at any
material time as issued by the Accounting
Standards Board of the United Kingdom;
"Indemnities" means the obligations of the Warrantors under
clause 8;
"Intellectual Property" (a) patents, trade marks, service marks,
registered designs, applications and
rights to apply for any of those rights,
trade, business and company names,
internet domain names and e-mail
addresses, unregistered trade marks and
service marks, copyrights, software source
code and database rights, know-how, rights
in designs and inventions;
(b) rights under licenses, consents, orders,
statutes or otherwise in relation to a
right in paragraph (a);
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(c) rights of the same or similar effect or
nature as or to those in paragraphs (a)
and (b) which now or in the future may
subsist; and
(d) the right to ▇▇▇ for past infringements of
any of the foregoing rights;
"Intellectual Property Rights" all Intellectual Property owned, used or
required to be used by the Company;
"Intellectual Property means agreements or arrangements relating
Agreements" (wholly or partly) to Intellectual Property or
to the disclosure, use, assignment or patenting
of any invention, discovery, improvement,
process, formulae or other know-how;
"the Management Accounts" the management accounts of the Company for the
period from the Accounts Date to 30 October
2006 copies of which are attached to the
Disclosure Letter;
"the Overdue Debtors" as defined in paragraph 2 of Part 3 of Schedule
7;
"Principal Sum" as defined in clause 3.3.2;
"Proceedings" any legal action or proceedings arising out of
or in connection with this Agreement;
"the Property" the property or properties briefly described in
Schedule 3;
"Reduction" as defined in clause 3.1;
"Release" any release, waiver or compromise or any other
arrangement of any kind having similar or
analogous effect;
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"Release Date" the Business Day immediately following the
first anniversary of the Completion Date;
"Relevant Claim" a bona fide claim for breach of the Warranties,
or a bona fide claim under the Tax Covenant or
a bona fide claim under clause 9 (Indemnities)
"the Saleslogix CD Rom" a CD Rom containing part of the Saleslogix
database in the Agreed Form;
"the Sellers' Solicitors" means Laytons of ▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇;
"the Shares" all the issued shares in the capital of the
Company;
"SSAP" a statement of standard accounting practice in
force at any material time as issued by the
Accounting Standards Committee of the United
Kingdom and adopted by the Accounting Standards
Board of the United Kingdom;
"Subsidiary" Ryder Systems Trustee Limited (company number
4322454) further details of which are set out
in Schedule 2;
"the Tax Covenants" the obligations on the part of the Warrantors
set out in part 3 of Schedule 4;
"Tax" as defined in part 1 of Schedule 4;
"the Tax Warranties" the warranties and representations set out in
part 2 of Schedule 4;
"the Sellers' Solicitors" Laytons, of ▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇
▇▇▇ or any successor firm;
"the Warranties" the warranties and representations set out in
Schedule 5 and the Tax Warranties;
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"the Warrantors" ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
(two of the Sellers);
"Warranty" one of the Warranties (and the word "Warranty"
followed by a number shall be deemed to be a
reference to the paragraph of Schedule 5 with
that number).
1.2 References to the Property shall, where the context so admits or requires,
be construed as references to all properties briefly described in Schedule
3 and each of them and each and every part of each of them.
1.3 Unless the context otherwise expressly requires, words and expressions
which are otherwise defined in the Companies Acts (as defined in section
744 of the Act) shall have the same meaning when used in this Agreement,
but "company" shall mean and include both "company" and "body corporate",
as in each case defined in the Act.
1.4 A reference to any statutory or other legislative provision shall be
interpreted as a reference to that provision as in force at the date of
this Agreement and, additionally, where the context so permits:-
1.4.1 in respect of any earlier date, as a reference to any and all provisions
in force at that earlier date of which it is a re-enactment; and
1.4.2 in respect of any later date, as a reference to any and all provisions in
force at that later date which are a re-enactment thereof;
in each case whether with or without modification.
1.5 The schedules form an integral part of this Agreement.
1.6 A reference to any gender shall include the other and neuter gender and a
reference to a "person" includes a reference to any individual, firm,
company, corporation or other body corporate, government, state or agency
of a state or any joint venture, association or partnership, works council
or employee representative body (whether or not having separate legal
personality).
1.7 The singular shall include the plural and vice versa.
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1.8 A document referred to as being in "the Agreed Terms" or "Agreed Form"
shall be in the form of that document signed or initialed for
identification by or on behalf of the parties.
1.9 All warranties, representations, undertakings, guarantees, indemnities,
covenants, agreements and obligations given or entered into by or on behalf
of more than one person in this Agreement are, unless otherwise expressly
stated, given or entered into jointly and severally.
1.10 Any Warranty qualified by the expression "to the best of the Warrantors'
knowledge and belief" or "so far as the Warrantors are aware" or any
similar expression shall be deemed to include knowledge, information and
belief which any one or more of the Warrantors has or which the Warrantors
would have had if they had made all reasonable enquiries and includes the
knowledge, information and belief of each of:
1.10.1 the professional advisers who act, or at the relevant time acted, for the
Company; and
1.10.2 the directors, company secretary, financial and administration director
and general managers of the Company,
and of any other person of whom it would be reasonable to make such enquiry
or of whom it is stated that enquiry has been made.
A person shall be deemed to be connected with another if that person is
connected with such other within the meaning of section 839 of Income &
Corporation Taxes ▇▇▇ ▇▇▇▇.
1.11 References to "indemnify" and "indemnifying" any person against any
circumstance include indemnifying and keeping him indemnified from and
against all liabilities, losses, claims, demands, damages, costs, expenses
and interest which he may suffer or incur in connection with or arising out
of that circumstance.
1.12 "Associate" has the meaning given by section 435 of the Insolvency ▇▇▇
▇▇▇▇.
1.13 General.
Words shall not be given a restrictive meaning:-
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1.13.1 if they are introduced by the word "other", by reason of the fact that
they are preceded by words indicating a particular class of act, matter or
thing; or
1.13.2 by reason of the fact that they are followed by particular examples
intended to be embraced by those general words.
1.14 The word "Notice" includes any notice, demand, consent or other
communication.
1.15 The headings are inserted for convenience only and shall not affect the
construction of this Agreement.
1.16 The Buyer enters into this Agreement, so far as may be necessary for the
enforcement of any provision for the benefit of the Company, as Subsidiary
for and on behalf of the Company.
1.17 References to times shall mean London time unless otherwise stated.
1.18 A reference to "the Sellers" shall include a reference to each of them and,
unless the context otherwise expressly requires, to each of their
respective personal representatives.
2. AGREEMENT FOR SALE AND PURCHASE
2.1 SALE AND PURCHASE
On Completion each of the Sellers shall sell the Shares with full title
guarantee and the Buyer shall buy them free from any Encumbrance and
together with all rights now or hereafter attaching to them, on and subject
to the terms of this Agreement.
2.2 THE LAW OF PROPERTY (MISCELLANEOUS PROVISIONS) ▇▇▇ ▇▇▇▇
The operation of the covenants implied by sections 2 and 3 of the above Act
shall be deemed to be extended so as not to exclude the liability of the
Sellers in respect of matters:-
2.2.1 of which the Sellers does not know or could not reasonably be expected to
know; or
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2.2.2 which at the time of transfer are within the actual knowledge of, or the
existence of which is a necessary consequence of facts then within the
actual knowledge, of the Buyer.
2.3 WAIVER
Each of the Sellers waives all rights of pre-emption and other restrictions
on transfers conferred on or enjoyed by him in respect of the Shares,
whether under the articles of association of the Company or otherwise.
2.4 SIMULTANEOUS COMPLETION
The Buyer shall not be obliged to complete the purchase of any of the
Shares unless the purchase of all the Shares is completed simultaneously.
3. CONSIDERATION
3.1 AMOUNT
The purchase price payable to the Sellers for the Shares shall be the sum
of L5,600,000 which sum shall be:
3.1.1 reduced ("the Reduction") to the extent that Completion NAV is less than
one million two hundred and forty thousand pounds (L1,240,000); or
3.1.2 increased ("the Increase") by the lesser of the extent that Completion NAV
is more than one million two hundred and forty thousand pounds (L1,240,000)
and the amount of cash comprised within the calculation of Completion NAV;
and shall be payable in the Due Proportions
3.2 FIRST PAYMENTS - ON COMPLETION
On Completion (or if later the date of receipt of the stock transfer forms
referred to in clause 5.2.1.6) and pending the later agreement or
determination of the Completion NAV, the Buyer shall pay the sum of,
L5,100,000 to the Sellers' Solicitors (on behalf of the Sellers) on account
of the purchase price for the Shares.
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3.3 PRINCIPAL SUM
On Completion the Buyer shall pay the sum of L500,000 (five hundred
thousand pounds) ("the Principal Sum") to the Buyer's Solicitors and the
Sellers' Solicitors jointly for placing into the Escrow Account, to be held
under a mandate in the Agreed Terms and to be held and dealt with as set
out in this clause 3.
3.4 EMI LIABILITIES
3.4.1 For the purposes of this Agreement, "EMI Liabilities" shall mean together:
3.4.1.1 all employer's national insurance contributions that arise or is
otherwise incurred by the Company or the Subsidiary in relation to the
Relevant ▇▇▇▇▇▇ Event (as defined in Schedule 4), the issue of shares to
▇▇▇▇▇ ▇▇▇▇▇▇ pursuant to the Relevant ▇▇▇▇▇▇ Event ("the ▇▇▇▇▇▇ Option
Shares") or the sale of the ▇▇▇▇▇▇ Option Shares by ▇▇▇▇▇ ▇▇▇▇▇▇ resulting
from the Relevant ▇▇▇▇▇▇ Event;
3.4.1.2 all employee's national insurance contributions liabilities and PAYE
liabilities that arise or will otherwise be chargeable in relation to the
Relevant ▇▇▇▇▇▇ Event, the issue of the ▇▇▇▇▇▇ Option Shares to ▇▇▇▇▇
▇▇▇▇▇▇ pursuant to the Relevant ▇▇▇▇▇▇ Event or the sale of the ▇▇▇▇▇▇
Option Shares by ▇▇▇▇▇ ▇▇▇▇▇▇ resulting from the Relevant ▇▇▇▇▇▇ Event;
3.4.1.3 all employer's national insurance contributions that arise or is
otherwise incurred by the Company or the Subsidiary in relation to the
Relevant ▇▇▇▇▇▇ Event (as defined in Schedule 4), the issue of shares to
▇▇▇▇▇▇ ▇▇▇▇▇▇ pursuant to the Relevant ▇▇▇▇▇▇ Event ("the ▇▇▇▇▇▇ Option
Shares") or the sale of the ▇▇▇▇▇▇ Option Shares by ▇▇▇▇▇▇ ▇▇▇▇▇▇ resulting
from the Relevant ▇▇▇▇▇▇ Event;
3.4.1.4 all employee's national insurance contributions liabilities and PAYE
liabilities that arise or will otherwise be chargeable in relation to the
Relevant ▇▇▇▇▇▇ Event, the issue of the ▇▇▇▇▇▇ Option Shares to ▇▇▇▇▇▇
▇▇▇▇▇▇ pursuant to the Relevant ▇▇▇▇▇▇ Event or the sale of the ▇▇▇▇▇▇
Option Shares by ▇▇▇▇▇▇ ▇▇▇▇▇▇ resulting from the Relevant ▇▇▇▇▇▇ Event;
(together the "EMI Liabilities").
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3.5 PAYMENT FOLLOWING CALCULATION OF COMPLETION NAV
On the third Business Day after the date on which the Completion NAV is
agreed or determined in accordance with Schedule 7:
3.5.1 If the Completion NAV is less than L1,240,000 the Sellers shall pay to the
Buyer a sum equal to the Reduction, such payment to be satisfied:
3.5.1.1 by the payment of an equivalent sum from the Escrow Account to the
extent sufficient funds remain therein; and
3.5.1.2 by payment of any excess which shall be satisfied by the payment in cash
in accordance with clause 3.7.3; or
3.5.2 If the Completion NAV is more than L1,240,000 the Buyer shall pay to the
Sellers a sum equal to the Increase, such payment to be satisfied by the
payment of cash in accordance with clause 3.7.1.
3.6 THE ESCROW ACCOUNT
3.6.1 All interest earned on the Escrow Account shall accrue and be paid to the
Sellers and/or the Buyer in the proportions in which they respectively
become entitled to the Principal Sum and shall be paid at the same time as
any payment of all or any part of the Principal Sum is made from the Escrow
Account.
3.6.2 The Sellers and the Buyer shall procure that their respective solicitors
shall make any payment which is required to be made from the Escrow Account
pursuant to the provisions of this clause 3.
3.6.3 No amount shall be released out of the Escrow Account otherwise than in
accordance with this clause 3.
3.6.4 The liability to taxation on any interest on any amount in the Escrow
Account shall be borne by the party ultimately entitled to that amount.
3.7 RETENTION
3.7.1 Subject as otherwise provided by this clause 3.7, the amount (if any) of
the Principal Sum standing to the credit of the Escrow Account (together
with any accrued interest but less any applicable bank charges) on the
Release Date shall be released to the Sellers.
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3.7.2 If a Relevant Claim has been notified by the Buyer to the Sellers prior to
the Release Date in accordance with this Agreement, no amount shall be
released to the Sellers from the Retention Account otherwise than in
accordance with the provisions of this clause 3.
3.7.3 If, prior to the Release Date, a Relevant Claim is settled and there is a
Due Amount, the parties shall, unless such Due Amount has been paid to the
Buyer, as soon as practicable following such settlement, procure the
payment to the Buyer out of the Escrow Account the lesser of the Due Amount
and the amount standing to the credit of the Retention Account (together
with any interest which has accrued on the amount so paid but less any
applicable bank charges).
3.7.4 As soon as practicable following the settlement of any Relevant Claim
outstanding at the Release Date in respect of which there is a Due Amount,
the parties shall, unless such Due Amount has been paid to the Buyer,
procure the payment to the Buyer out of the Escrow Account the lesser of
the Due Amount and the amount standing to the credit of the Retention
Account (together with any interest which has accrued on the amount so paid
but less any applicable bank charges) any payment to the Buyer out of the
Escrow Account shall constitute a pound for pound reduction in the
consideration for the Shares provided nothing in this clause shall limit or
exclude the liability of the Warrantors.
3.7.5 Following settlement of all Relevant Claims outstanding (if any) at the
Release Date which have been notified in accordance with paragraph 11 of
Schedule 6 to the Sellers prior to the Release Date (and for the purpose of
this clause 3.7.5 only a Relevant Claim shall be deemed settled if the
Buyer shall fail to comply with paragraph 11.3 of Schedule 6) and payment
of all Due Amounts to the Buyer, the parties shall, as soon as practicable,
procure the payment of any balance standing to the credit of the Escrow
Account (together with any interest which has accrued on such balance less
any applicable bank charges) to the Sellers.
3.7.6 A Relevant Claim shall be deemed settled for the purposes of this clause
3.7 if:
(a) the Sellers and the Buyer so agree in writing; or
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(b) the Relevant Claim has been determined by a court of competent
jurisdiction from which there is no right of appeal, or from whose
judgment the Buyer or the Sellers (as the case may be) are debarred by
passage of time or otherwise from making an appeal;
(c) and for the purpose of clause 3.7.5 only a Relevant Claim shall be
deemed settled if the Buyer shall fail to comply with paragraph 11.3
of Schedule 6.
3.7.7 The amount of the purchase price paid into the Escrow Account shall not be
regarded as imposing any limit on the amount of any claims under this
agreement or under any of the documents executed pursuant to this
agreement;
3.7.8 If a Due Amount is not satisfied in full from the Escrow Account, the
Relevant Claim (to the extent not so satisfied) shall remain fully
enforceable against the Sellers; and
3.7.9 Nothing in this clause 3 shall prejudice, limit or otherwise affect any
right, including to make any claim, or remedy the Buyer may have from time
to time against the Sellers either under this agreement or under any of the
documents executed pursuant to this agreement.
3.8 METHOD OF PAYMENT
3.8.1 Unless otherwise specified, any payment required to be made to the Sellers
pursuant to this clause 3 shall be made in cleared funds by way of a same
day telegraphic transfer to the account with a UK clearing bank notified in
writing to the Buyer's Solicitors prior to the due date for payment.
3.8.2 The Sellers' Solicitors' receipt for any sums payable by the Buyer
pursuant to this clause 3 shall be a good and sufficient discharge of the
Buyer's obligation to make the payment in question and the Buyer shall not
be further concerned as to the application of any sums so paid.
3.8.3 Any sum payable to the Buyer pursuant to this clause 3 shall, unless
otherwise specified, be paid in cleared funds by way of a same day
telegraphic transfer to the account with a UK clearing bank notified in
writing to the Sellers' Solicitors prior to the due date for payment.
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3.9 DEBTORS
The Buyer shall pay to the Sellers (by way of an addition to the purchase
price for the Shares) a sum equal to such part of the Overdue Debtors as is
recovered by the Company within six months of Completion and such sum shall
be paid:
3.9.1 on the third Business Day after the date on which the Completion NAV is
agreed or determined in accordance with Schedule 7 in respect only of such
part of the Overdue Debtors as is recovered by the Company prior to such
date; and
3.9.2 in respect of each following 30 day period up to and including the six
month anniversary of the date of this Agreement (each a "Calculation
Period") on the third Business Day after the end of such Calculation Period
in respect only of such part of the Overdue Debtors as is recovered by the
Company in such Calculation Period.
4. WARRANTIES AND TAXATION
4.1 REPRESENTATIONS AND WARRANTIES
The Warrantors jointly and severally warrant to the Buyer that each of the
Warranties is true and accurate in all respects and not misleading at the
date of this Agreement.
4.2 TAX COVENANTS
The Warrantors jointly and severally undertake with the Buyer in the terms
of the Tax Covenants.
4.3 CLAIMS PROCEDURE AND DETERMINATION AND WARRANTORS' SAFEGUARDS
Schedule 6 shall apply in relation to the determination of the rights and
remedies of the Buyer in respect of the Warranties and the Tax Covenants
4.4 PURCHASER WARRANTY
The Buyer warrants to, and undertakes with, the Sellers that:
4.4.1 it has the requisite power and authority to enter into and perform this
Agreement;
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4.4.2 the execution and delivery of, and the performance by it of its
obligations under, this Agreement will not:
4.4.2.1 result in a breach of any provision of its memorandum or articles of
association;
4.4.2.2 result in a breach of, or constitute a default under, any agreement or
instrument or regulations of which it is a party, or by which it is bound;
or
4.4.2.3 result in a breach of any applicable order, judgment or decree of any
court or governmental authority.
5. COMPLETION
5.1 DATE OF COMPLETION
Completion shall take place on the Completion Date at the offices of the
Buyer's Solicitors.
5.2 SELLERS' OBLIGATIONS
On Completion the Sellers shall:
5.2.1 deliver to the Buyer:
5.2.1.1 duly executed transfers of the ▇▇▇▇▇▇ Option Shares by the Subsidiary in
favour of ▇▇▇▇▇ ▇▇▇▇▇▇ certified as category L for the purposes of
exemption from stamp duty together with the relative share certificates and
certified copies of any power of attorney under which any such transfers
may have been executed;
5.2.1.2 duly executed transfers of the ▇▇▇▇▇▇ Option Shares by the Subsidiary in
favour of ▇▇▇▇▇▇ ▇▇▇▇▇▇ certified as category L for the purposes of
exemption from stamp duty together with the relative share certificates and
certified copies of any power of attorney under which any such transfers
may have been executed;
5.2.1.3 board minutes in the Agreed Terms of the Subsidiary approving the
transfer of the ▇▇▇▇▇▇ Option Shares and ▇▇▇▇▇▇ Option Shares;
5.2.1.4 notice of exercise in the Agreed Terms of the ▇▇▇▇▇▇ Option Shares and
▇▇▇▇▇▇ Option Shares executed by the Subsidiary;
16
5.2.1.5 board minutes in the Agreed Terms of the Company approving the
registration of ▇▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇ as holders of the ▇▇▇▇▇▇
Option Shares and ▇▇▇▇▇▇ Option Shares;
5.2.1.6 transfers of the Shares by the registered holders thereof in favour of
the Buyer together with the relative share certificates and certified
copies of any power of attorney under which any of such transfers may have
been executed;
5.2.1.7 all the statutory and other books (duly written up to date) of the
Company and its certificate of incorporation or registration and
certificate of incorporation on change of name and common seals (if any);
5.2.1.8 letters of resignation in the Agreed Terms executed by the persons
resigning as directors and secretary of the Company pursuant to clause
5.2.2.3;
5.2.1.9 evidence satisfactory to the Buyer that Astron, Vodafone UK, Vodafone
Ireland, Verizon and Opal are aware of the proposed acquisition of the
Company by the Buyer and will continue to trade with the customer on the
same terms that apply immediately prior to Completion;
5.2.1.10 the title deeds to the Property;
5.2.1.11 all credit and charge cards held to the account of the Company and all
other papers and documents belonging to the Company which are in the
possession of the Sellers or any director of the Company except to the
extent required by ▇▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇ pursuant to the service
agreements referred to in clause 5.2.2.8 of this Agreement;
5.2.1.12 the Disclosure Letter duly executed;
5.2.1.13 the Escrow Agreement duly signed by the Seller's Solicitors;
5.2.1.14 a copy of the Accounts and Financial Statements in each case on a
comparative basis;
5.2.1.15 a schedule of cash disbursements made or agreed to be made by the
Company for the period from 31 October 2006 to Completion;
5.2.1.16 a schedule of cash receipts made or agreed to be made by the Company
for the period from 31 October 2006 to Completion;
17
(the schedules in clauses 5.2.1.15 and 5.2.1.6 being together the "Cash
Schedules");
5.2.1.17 a counterpart of the Business Name Agreement duly executed by ▇▇▇▇
▇▇▇▇▇▇▇;
5.2.1.18 a duly executed counter-part of the Business Name Assignment; and
5.2.1.19 evidence satisfactory to the Buyer that all stamp duty payable in
relation to the Property has been paid;
5.2.2 procure:
5.2.2.1 the transaction of the other business referred to in the completion
board minutes in the Agreed Terms;
5.2.2.2 such persons as the Buyer may nominate to be validly appointed as
additional directors and secretary of the Company;
5.2.2.3 upon such appointment, the resignation of the directors and the
secretary of the Company both from their respective offices and as
employees;
5.2.2.4 the written resignation of the auditors of the Company incorporating an
acknowledgment that they have no claim against the Company for any fees or
disbursements, whether billed or unbilled, in respect of the period up to
Completion and the statement referred to in section 394 of the Act;
5.2.2.5 the release of all Encumbrances given by the Company (whether to its
bankers or otherwise) including, without limitation, the debenture granted
to Lloyds TSB Bank plc on 22 February 2003 and of all guarantees given by
the Company in respect of the obligations of any third party;
5.2.2.6 the repayment (by such method as the Buyer directs) without deduction or
set-off of any and all sums owed to the Company by any of the Sellers, the
directors of the Company and any person (other than a subsidiary of the
Company) who is an associate of or connected with any of them;
5.2.2.7 the release in the Agreed Terms of any and all claims against the
Company by each of the Warrantors and any person who is an associate of or
connected with any of them, incorporating an acknowledgment by each that
there is no agreement or arrangement under which any such claim might arise
in the future;
18
5.2.2.8 that the Buyer and each of ▇▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇ enter into
service agreements in the Agreed Terms;
5.2.2.9 that the Buyer and ▇▇▇▇ ▇▇▇▇▇ enter into a compromise agreement in the
Agreed Terms;
5.2.2.10 that by way of written resolution the Company adopts new articles of
association in the Agreed Terms; and
5.2.2.11 existing mandates to the bankers of the Company are revoked and new
instructions given in the form requested by the Buyer;
5.3 BUYER'S OBLIGATIONS
On Completion, and against compliance by the Sellers with their obligations
under clause 5.2, the Buyer shall:
5.3.1 make the payments required to be made on Completion in accordance with
clause 3;
5.3.2 acknowledge receipt of the Disclosure Letter; and
5.3.3 deliver the Escrow Agreement duly signed by the Buyer's Solicitors; and
5.3.4 acknowledge the obligation on the Company in clause 5.4 of the Business
Name Agreement and undertake to procure that the Company complies with such
obligations to the extent it is able to do so.
5.4 DECLARATION OF TRUST IN RELATION TO THE SHARES
Each of the Sellers declares that, for so long as he remains the registered
holder of any of the Shares after Completion, he will:
5.4.1 stand and be possessed of them and of all dividends and other rights
arising out of or in connection with them in trust for the Buyer and its
successors in title;
5.4.2 at all times thereafter deal with and dispose of them and all such
dividends and rights as the Buyer or any such successor may direct; and
19
5.4.3 at the request of the Buyer or any such successor vote at all meetings
held during such period which he or she shall be entitled to attend as the
holder of them in such manner as the Buyer or any such successor may
direct.
Each of the Sellers hereby irrevocably appoints the Buyer or any such
successor to be its attorney and in its name and on its behalf to sign any
written resolution of the members of the Company and to execute all
instruments of proxy or other documents which the Buyer or any such
successor may reasonably require and which may be necessary or expedient to
enable the Buyer or any such successor to attend and vote at any such
meeting. The Seller hereby irrevocably authorises the Buyer or any such
successor on its behalf to sign any written resolution of the members of
the Company and to execute all instruments of proxy or other documents
which the Buyer or any such successor may reasonably require and which may
be necessary or expedient to enable the Buyer or any such successor to
attend and vote at any such meeting.
5.5 EMPLOYEE BENEFIT TRUST
5.5.1 ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ shall resign as director and
secretary respectively of the Subsidiary in the Agreed Terms on the earlier
of:
(a) the distribution of the sums and assets held by Subsidiary as sole
trustee of the Ryder Systems Employee Benefit Trust ("the EBT") in
accordance with the terms of the EBT; and
(b) the date falling 90 days after Completion.
It is acknowledged and agreed by the Buyer that prior to such resignations
(i) it shall procure that there are no changes to the board of directors or
secretary of Subsidiary and (ii) the sums and assets held on behalf of the
EBT shall be distributed in accordance with the wishes and directions of
Subsidiary acting through its board of directors.
5.5.2 The Warrantors shall promptly (and in any event by no later than the date
falling 60 days after Completion) determine and notify to the Company and
the Buyer in writing (the "Directions") of the amounts they wish, in their
absolute discretion (subject to compliance at all times with the rules of
the EBT), each employee or former employee of the Company or their
connected persons to
20
receive from the L260,000 (net of costs and expenses) (the "EBT Sale
Proceeds") that the Subsidiary receives as proceeds for the sale of shares
it holds in the Company to the Buyer (the "Disposal") after deduction
therefrom (calculated by the Company acting reasonably) of:
5.5.2.1 the amount of capital gains tax that shall be payable by EBT in
connection with the Disposal;
5.5.2.2 the amount (if any) of employer's national insurance contributions
liabilities that arise or will otherwise be incurred by the Subsidiary or
the Company in relation to the distribution of the amounts referred to in
the Directions;
5.5.2.3 the amount (if any) of employees' national insurance contributions
liabilities that arise or will otherwise be chargeable in relation to the
distribution of the amounts referred to in the Directions;
5.5.2.4 the amount of PAYE liabilities (if any) that arise or will otherwise be
chargeable in relation to the distribution of the amounts referred to in
the Directions.
(The amounts in clauses 5.5.2.1 to 5.5.2.4 together referred to in this
clause 5.5 as the "Liabilities")
5.5.3 Upon receipt of the Directions the Buyer shall (to the extent that it is
able by the exercise of its rights as a shareholder in the Company and
directing the individuals it has appointed to the board of directors of the
Company on Completion) procure that:
5.5.3.1 the Subsidiary (including all of its officers and its employees) shall
promptly (and in any event within 7 days of receipt of the Directions by
the Buyer) transfer to the Company the EBT Sale Proceeds;
5.5.3.2 the Company (including all of its officers and employees) shall apply
the balance of the EBT Sale Proceeds it receives from EBT pursuant to
clause 5.5.3 (after deduction therefrom of a sum equal to that required to
discharge the Liabilities) to pay for and on behalf of EBT amounts to the
employees or former employees of the Company or their connected persons in
accordance with the Directions, provided that in making and carrying out
the Directions and such payments the Warrantors and the Company shall at
all times comply with the rules of the EBT;
21
5.5.3.3 use the EBT Sale Proceeds to discharge all of the Liabilities (other
than the liabilities referred to in clause 5.5.3) for and on behalf of EBT,
the relevant employees of the Company and/or the Company (as appropriate)
as and when they fall due for payment; and
5.5.3.4 any amount of the EBT Sale Proceeds retained by the Company in respect
of the Liabilities referred to in clause 5.5.3 may be applied by the
Company towards the payment of employees' salaries in the ordinary course
of business.
5.6 CUSTOMER DATABASES
5.6.1 It is acknowledged and agreed by the Buyer that ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ and any
companies controlled by him may utilise the data contained in the
Saleslogix CD Rom, subject always to ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ complying with his
obligations under clause 6 (Confidential Information and Use of Names) and
clause 7 (Restrictive Undertakings) and subject to clause 5.6.2.
5.6.2 ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ shall not disclose, sell, encumber, lease or otherwise
dispose ("together Disclose") of any right, title or interest in the
contents of the Saleslogix CD Rom or any part thereof except to any company
within his control and/or ownership and only for the period during which
such company is within his control and/or ownership. ▇▇ ▇▇▇▇▇▇▇ shall
procure that any such company shall not Disclosue the contents of such CD
and shall not use such contents at any time when the Company is not within
the control or ownership of ▇▇ ▇▇▇▇▇▇▇.
6. CONFIDENTIAL INFORMATION AND USE OF NAMES
6.1 Each of the Sellers shall, after Completion, keep and procure to be kept
secret and confidential all Confidential Information which relates to the
Company or its business or is used in its business and shall not use nor
disclose to any person any such Confidential Information save as required
by their contract of employment (if any) with the Company or any member of
the Buyer's Group and save as required by clause 5.6.
6.2 The obligations of confidentiality in this clause shall not extend to any
matter which is in or becomes part of the public domain otherwise than by
reason of a breach of the obligations of confidentiality in this Agreement
or which any of
22
the Sellers receives from a third party independently entitled to disclose
it or required by law or regulatory authority to disclose. Each of the
Sellers shall be permitted to disclose Confidential Information to the
extent provided that that Seller shall first consult with the Buyer or is
required to do so by their contract of employment (if any) with the Company
or any member of the Buyer's Group.
6.3 Subject to and save to the extent provided in the Business Name Agreement
none of the Sellers shall (save as required by their contract of employment
(if any) with the Company or any member of the Buyer's Group), at any time
after Completion, use in connection with any trade or business any
corporate name, trade name, or logo, domain name or e-mail address which is
confusingly similar to the name of the Company or to any corporate name,
trade name, logo, domain name or e-mail address used by the Company at any
time during the period of 5 years before Completion including without
limitation the following:
ANALYSIS
SPLITBILL
VOIP ANALYSIS
DYNAMIC REPORTS
7. RESTRICTIVE UNDERTAKINGS
7.1 Customers, suppliers and employees
The Covenantor undertakes with the Buyer that he will not at any time
during the period of two years and eleven months after Completion, directly
or indirectly and whether alone or in conjunction with, or on behalf of or
by way of assistance to, any other person:
7.1.1 canvass or solicit the custom of any person who was at any time during the
period of six months before Completion a customer of the Company (or having
been solicited by the Company as a prospective customer) for the supply of
goods and/or services which are competitive with any of those supplied to
such person (or in relation to which they were solicited) by the Company at
any time during the period of six months before the Completion Date; or
7.1.2 do anything which he knows or ought reasonably to know would cause or be
reasonably likely to cause any person who was at any time during the period
of
23
six months before the Completion Date a supplier to the Company of goods
and/or services to cease or materially reduce its supply of those goods
and/or services to the Company; or
7.1.3 solicit or entice away from the Company or employ or (directly or
indirectly) offer employment or a consultancy to any person who is then an
employee of the Company and who at Completion was:
7.1.3.1 an employee of the Company and likely (in the reasonable opinion of the
Buyer) to be in possession of Confidential Information relating to, or able
to influence the customer relationships or connections of, the Company or
is in possession of Confidential Information relating to the following
products of the Company: ANALYSIS, VOIP ANALYSIS, SPLITBILL, DYNAMIC
REPORTS, SMARTBILL, OR EMPULSE; or
7.1.3.2 a senior employee, earning a salary of more than L20,000
7.1.4 except as the holder for investment of less than 5% in nominal value of
the issued share capital of a company whose shares are listed on a
recognised investment exchange (within the meaning of the Financial
Services and Markets Act 2000) be engaged, concerned or interested within
the Restricted Area in any Relevant Business.
7.2 DEFINITIONS
For the purposes of clause 7.1, "Relevant Business" means any business
which consists of or includes to a material extent the provision of billing
facilities or billing analysis software or services to the
telecommunications and datacommunications markets including fixed line and
mobile communications and all methods of transmission which is competitive
with any business carried on by the Company during the period of 12 months
prior to Completion and "Restricted Area" means the countries listed in
Schedule 8.
7.3 REASONABLENESS OF UNDERTAKINGS
Each of the undertakings in clause 7.1 is:
7.3.1 considered by the parties to be reasonable;
24
7.3.2 a separate undertaking by each of the Covenantors and is enforceable by
the Buyer (on behalf of itself and the Company) separately and
independently of its right to enforce any one or more of the other
undertakings in clause 7.1; and
7.3.3 given for the purpose of assuring to the Buyer the full benefit of the
business and goodwill of the Company and in consideration of the agreement
of the Buyer to acquire the Shares on the terms of this Agreement.
Accordingly, if one or more of such undertakings is held to be against the
public interest or unlawful or in any way an unreasonable restraint of
trade, the remaining undertakings shall continue to bind the relevant
Covenantors.
7.4 CESSATION OF BUSINESS
Nothing in the undertakings set out in clause 7.1 shall be deemed to
prohibit any action in respect of any business or part of any business in
which (otherwise than as a result of any breach of any of those
undertakings by the Covenantors) the Company and the Buyer and every member
of the Buyer's Group have ceased to be involved prior to any event giving
rise to a claim, or which would but for this clause 7.4 give rise to a
claim, under this clause 7.
8. INDEMNITIES
8.1 The Warrantors shall indemnify the Buyer and/or the Company and shall keep
the Buyer and the Company indemnified against all liabilities suffered or
incurred by the Company as a result of or in connection with:-
8.1.1 any claim against the Company by ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ or ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ in connection with their retirement from any office from and/or
employment with the Company in accordance with any provision of this
Agreement;
8.1.2 any claim against either of them by any person arising from any
infringement by the Company of the Intellectual Property in connection with
any source code owned or used by such person where such infringement
occurred on or prior to Completion and/or such infringement occurs after
Completion as a continuation (wholly or partly) of an infringement prior to
Completion;
25
8.1.3 any claim against either of them any and all matters arising from the
Share Options granted to ▇▇▇▇▇▇ ▇▇▇▇▇ in respect of Shares in the Company
and/or the lapse of such options;
save to the extent that recovery is made by the Buyer or the Company under
any policy of insurance.
9. THIRD PARTY RIGHTS
9.1 For the avoidance of doubt and save as expressly provided in clause 8 and
clause 10.3, nothing in this Agreement shall confer on any third party the
right to enforce any provisions of this Agreement.
9.2 Notwithstanding that any provision of this Agreement may be enforceable by
any third party this Agreement and its provisions may be amended, waived,
modified, rescinded or terminated by the parties to this Agreement without
the consent or approval of any third party.
10. ASSIGNMENT
10.1 This Agreement shall be binding upon and endure for the benefit of the
successors and assignees of the parties and in the case of individuals
their respective estates and, subject to any succession or assignment being
permitted by this Agreement, any such successor or assignee of the parties
shall in its own right be able to enforce any term of this Agreement.
10.2 Save as permitted under this Agreement, none of the parties nor their
respective successors and assignees shall be entitled to assign its rights
or obligations under this Agreement without the prior written consent of
the others save that the Buyer may assign its rights under this Agreement
to a member of the Buyer's Group ("Permitted Assignee") subject always to
the following:
10.2.1 where such assignee ceases to be a member of the Buyer's Group such
assignee shall be obliged as soon as reasonably practicable after such
cessation to assign the rights under this Agreement back to a member of the
Buyer's Group; and
10.2.2 the assignor shall remain liable in respect of its obligations under this
Agreement notwithstanding any such assignment, including for the avoidance
of doubt the provisions of this clause 10.
26
10.3 The Buyer may at any time charge, grant security over or assign by way of
security all or any of its rights under this Agreement and a beneficiary of
any such charge, security or assignment may enforce any such right as if it
had been named in this Agreement as the Buyer (and may recover hereunder on
the same basis and to the same extent as the Buyer would otherwise have
been entitled).
11. WHOLE AGREEMENT
11.1 This Agreement together with all documents entered into or to be entered
into pursuant to its provisions constitutes the entire agreement between
the parties in relation to its subject matter and supersedes all prior
agreements, understandings and discussions between the parties, other than
representations made fraudulently.
11.2 Each of the parties acknowledges that it is not relying on any statements,
warranties or representations given or made by the others in relation to
the subject matter of this Agreement, save those expressly set out in this
Agreement and other documents referred to above and that it shall have no
rights or remedies with respect to such subject matter otherwise than under
this Agreement (and the documents executed at the same time as it or
entered into pursuant to it) save to the extent that they arise out of the
fraud or fraudulent misrepresentation of any party or the confidentiality
agreements dated 25 May 2006 and 14 July 2006.
12. WAIVER
The rights and remedies of a party in respect of this Agreement shall not
be diminished, waived or extinguished by the granting of any indulgence,
forbearance or extension of time by a party to another nor by any failure
of or delay by a party in ascertaining or exercising any such rights or
remedies. Any Release by a party shall not affect its rights and remedies
as regards any other party nor its rights and remedies against the party in
whose favour it is granted or made except to the extent of the express
terms of the Release and no such Release shall have effect unless granted
or made in writing. The rights and remedies in this Agreement are
cumulative and not exclusive of any rights and/or remedies provided by law.
27
13. PROVISIONS SURVIVING COMPLETION
Insofar as the provisions of this Agreement shall not have been performed
at Completion, they shall remain in full force and effect notwithstanding
Completion.
14. PROPER LAW AND JURISDICTION
This Agreement shall be governed by the laws of England and Wales.
15. JURISDICTION
Any dispute arising under this Agreement shall be subject to the
jurisdiction of the English courts and the parties waive any objection to
Proceedings in such courts on the grounds of venue or on the grounds that
Proceedings have been brought in an inappropriate forum.
16. FURTHER ASSURANCE
The Sellers shall at their own expense do such acts and things and execute
such documents as the Buyer may at any time reasonably require for the
purpose of assuring to the Buyer the full benefit of this Agreement and of
any document to which it refers.
17. COUNTERPARTS
This Agreement may be executed in any number of counterparts and by the
parties on separate counterparts, each of which, when so executed and
delivered, shall be an original, but all the counterparts shall together be
deemed to constitute one and the same agreement.
18. COSTS
Each party shall, except where otherwise stated, pay its own costs of and
incidental to this Agreement and its subject matter.
19. SEVERABILITY
The provisions of this Agreement are severable and distinct from one
another, and, if at any time any of such provisions is or becomes invalid,
illegal or
28
unenforceable, the validity, legality or enforceability of the others shall
not in any way be affected or impaired thereby.
20. PUBLICITY
20.1 The parties shall forthwith upon make or procure to be made a press
announcement in the Agreed Terms.
20.2 The Buyer and each member of the Buyer's Group shall be permitted to make
such disclosure in connection with the subject matter of this Agreement as
is required by the Federal or State Law, of the United States of America or
the rules of any regulatory body to which it is subject after (to the
extent practicable) prior consultation with ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ (one of the
Sellers).
20.3 Each of the parties shall both before and after Completion, but subject to
clauses 20.1 and 20.2, keep the contents of this Agreement strictly private
and confidential and shall not without the prior written consent of the
Buyer (in the case of any of the Sellers) or of ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ (in the
case of the Buyer) disclose any or all of them to any person or makes any
other announcement relating to the transactions hereby agreed upon except
to the extent required by law or to their professional advisers who are
subject to a duty of confidentiality and each member of the Buyer's Group
and except that the Buyer shall be entitled to make references to the
transactions hereby agreed upon in its future annual reports and financial
statements to the extent required by the law, rules and regulations
applicable to such reports and statements.
21. NOTICES
21.1 Any Notice relating to this Agreement shall be in writing delivered
personally or sent by pre-paid first class post or facsimile transmission
to the address of the party to be served given herein or such other address
as may be notified for this purpose (or, by way of service upon all of the
Sellers or the Warrantors, to the Sellers' Solicitors, quoting their
reference SSG/23581.1).
21.2 Any such Notice: shall, if sent by post, be deemed to have been served 24
hours after despatch (or 48 hours after despatch in the case of airmail)
and, if
29
delivered by hand or sent by facsimile transmission, be deemed to have been
served at the time of such delivery or transmission.
If, however, in the case of delivery by post a period of 24 hours after
despatch would expire on, or if, in the case of delivery by hand or
facsimile transmission, such delivery or transmission occurs on, a day
which is not a Business Day or after 4.00 p.m. on a Business Day, then
service shall be deemed to occur on the next following Business Day.
21.3 In proving service it shall be sufficient to prove, in the case of a
letter, that such letter was properly stamped, addressed and placed in the
post and, in the case of a facsimile transmission, it shall be sufficient
to produce a transmission report showing that transmission was duly and
fully made to the correct number.
21.4 Any such Notice shall be deemed to have been given to the personal
representatives of a deceased Seller, notwithstanding that no grant of
representation has been made in respect of his or her estate, if the Notice
is given to the Sellers' Solicitors in accordance with clause 21.1, to the
deceased Seller by name or to his or her personal representatives by title
at the relevant Seller's address given herein or at such other address as
may have been notified by them in writing to the sender as being their
address for service.
21.5 Each of the Sellers irrevocably and unconditionally appoints the Sellers'
Solicitors as his agent for the service of any Notice or proceedings
arising out of or in connection with this Agreement and the transactions
hereby agreed upon.
IN WITNESS of which this deed has been executed and unconditionally delivered
the day and year first above written.
30
SCHEDULE 1
THE SELLERS
DUE PROPORTION OF RELEVANT
NAME AND ADDRESS OF SELLER SHARES PURCHASE PRICE (%) PERCENTAGE %
-------------------------- ------ ------------------ ------------
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ 400 A Ordinary Shares and 43.04 50
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ 350 B Ordinary Shares
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 400 A Ordinary Shares and 43.04 50
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ 350 B Ordinary Shares
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇
Ryder Systems Trustee Limited 100 B Ordinary Shares 4.64 0
(Company number 4322454)
▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ 100 B Ordinary Shares 4.64 ▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ 100 B Ordinary Shares 4.64 0
▇▇ ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇
▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
31
SCHEDULE 2
THE COMPANY
Name: Ryder Systems Limited
Registered in England no: 2185983
Date of incorporation: 30 October 1987
Authorised share capital: L2,000 divided into 1000 A Ordinary Shares of L1
each and 1000 B Ordinary Shares of L1 each
Issued share capital: 800 A Ordinary Shares of L1 each and 1000 B ordinary
shares of L1 each
Directors: ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Secretary: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Auditors: Ainsworths
Registered office: ▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
32
THE SUBSIDIARY
Name: Ryder Systems Trustee Limited
Registered in England no: 4322454
3
Date of incorporation: 14 November 2001
Authorised share capital: L1,000 of divided into 1,000 Ordinary Shares of L1
each
Issued share capital: 2 Ordinary Shares of L1 each
Directors: ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
Secretary: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Auditors: None
Registered office: ▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
33
SCHEDULE 3
PROPERTY
ADDRESS TERM AND RENT DATE AND PARTIES
------- ------------- ----------------
Office suites 502, 504 and 3 years from and including Tenancy Agreement
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 1 January 2006. Rent at the dated 8 February 2006
Centre, ▇▇▇▇▇▇▇ Street, rate of L72,850 per annum and made between
Blackburn for year 1, L73,850 per European Settled
annum for year 2 and Estates Plc (1) and
L74,850 per annum for year Ryder Systems Limited
3 (2)
34
SCHEDULE 4
TAX
PART 1 DEFINITIONS
1. INTERPRETATION
1.1 In this schedule, unless the context otherwise requires, the following
words and expressions shall have the following meanings:
"Accounts Relief" (a) any Relief which was treated as an asset
of the Company in the Accounts; or
(b) any Relief which was taken into account in
computing (and so reducing or eliminating) any
provision for Tax which appears in the Accounts
or which would have appeared in the Accounts but
for the presumed availability of such Relief;
"Event" any act, omission, event, fact or circumstance
whatsoever (whether actual or deemed or treated as
occurring for any purpose);
"ICTA" Income and Corporation Taxes ▇▇▇ ▇▇▇▇;
"ITEPA" Income Tax (Earnings and ▇▇▇▇▇▇▇▇) ▇▇▇ ▇▇▇▇;
"loss" includes the loss, denial, clawback or cancellation
in whole or in part of any Relief and derivative
words (such as "lost")
35
shall be construed accordingly;
"Post Completion Relief" any Relief which arises as a result of any Event
which has occurred or occurs after Completion or in
respect of any period commencing on or after
Completion;
"Relevant ▇▇▇▇▇▇ Event" the exercise on or around the date of this agreement
by ▇▇▇▇▇ ▇▇▇▇▇▇ of his option over 100 "B" Ordinary
Shares of L1.00 each in the capital of the Company;
"Relevant Person" the Warrantors and any person (except the Buyer or
the Company):
(a) who before Completion was a member of the same
group of companies for any Tax purpose ("Group
Person"); or
(b) with whom, before Completion the Company or, at
any time, the Warrantors or any Group Person is
connected; or
(c) any person who stands or has stood in a direct
or indirect relationship with the Company at any
time before Completion such that failure by such
person at any time to pay any Tax could result
in an assessment on the Company under section
767A or section 767AA ICTA;
"Relevant ▇▇▇▇▇▇ Event" the exercise on or around the date of this agreement
by ▇▇▇▇▇▇ ▇▇▇▇▇▇ of his option over 100 "B" Ordinary
Shares of L1.00 each
36
in the capital of the Company;
"Relief" (a) any relief, allowance, exemption, set-off,
deduction or credit available from, against, or
in relation to, Tax or in the computation for
any Tax purpose of income, profits or gains; and
(b) any right to repayment of Tax;
"Tax" (a) any tax, duty, impost, levy, deduction or
withholding, past or present, of the United
Kingdom or elsewhere; and
(b) (except as is attributable to the delay or to
any act, default or omission after Completion of
the Company, the Buyer or any person acting on
their behalf), any interest, charge, surcharge,
penalty, fine or other imposition relating to or
arising in connection with any tax, duty,
impost, levy, deduction or withholding mentioned
in paragraph (a) of this definition or to any
account, record, form, return or computation
required to be kept, preserved, maintained or
submitted to any person for the purpose of any
such tax, duty, impost, levy, deduction or
withholding;
"Tax Authority" any authority, whether of the United
37
Kingdom or elsewhere, competent to impose, assess or
collect Tax, including HM Revenue & Customs;
"Tax Claim" any notice, demand, assessment, letter or other
document issued, or action taken, by or on behalf of
any Tax Authority and the submission of any Tax form,
return or computation from which, in either case, it
reasonably appears to the Buyer that the Company is
or may be subject to a Tax Liability or other
liability in respect of which the Warrantors are or
may be liable under this Schedule 4;
"Tax Liability" (a) any liability (including a liability which is a
primary liability of some other person and
whether or not there is a right of recovery
against another person) to make an actual
payment of an amount in respect of Tax;
(b) any liability (including a liability which is a
primary liability of some other person and
whether or not there is a right of recovery
against another person) to make a payment or
increased payment of Tax which would have arisen
but for being satisfied, avoided or reduced by
any Accounts Relief or Post Completion Relief;
and
(c) the disallowance, loss, clawback, reduction,
restriction or modification of any Accounts
38
Relief;
"Tax Legislation" any statute, statutory instrument, regulation or
legislative provision providing for, imposing, or
relating to, Tax;
"Tax Warranties" the warranties contained in part 2 of this Schedule
4;
"TCGA" Taxation of Chargeable Gains ▇▇▇ ▇▇▇▇;
"VAT" value added tax;
"VATA" Value Added Tax ▇▇▇ ▇▇▇▇;
"VAT Group" any group of companies for the purpose of section 43
VATA of which the Company is or has been a member on
or before Completion.
1.2 In this schedule "Company" shall in addition to the Company include every
subsidiary of the Company to the intent and effect that the provisions of
this schedule shall apply to and be given in respect of each subsidiary as
well as the Company.
1.3 Any reference to an Event or the consequences of an Event occurring on or
before Completion shall include the combined effect of:
1.3.1 any two or more Events, all of which shall have taken place or be deemed
(for the purposes of any Tax Legislation) to have taken place on or before
Completion; or
1.3.2 any two or more Events, at least one of which shall have taken place or be
deemed (for the purposes of any Tax Legislation) to have occurred on or
before Completion or in the ordinary course of business after Completion.
1.4 Any reference to a Tax Liability in respect of income profits or gains
earned, accrued or received on or before Completion shall include a Tax
Liability in respect of income profits or gains deemed to have been or
treated or regarded
39
as earned, accrued or received for the purposes of any Tax Legislation on
or before Completion and any reference to Tax Liability on the happening of
any Event shall include a Tax Liability where such Event (for the purposes
of the Tax Legislation in question) is deemed to have occurred or treated
or regarded as having occurred.
1.5 Any stamp duty which would be payable on any document in order for it to be
produced as evidence in Court (whether or not such document is presently
within the United Kingdom), provided that such document is either necessary
to establish the title of the Company to any asset or is a document in the
enforcement or production of which the Company is interested, and any
interest, fine or penalty relating to any such stamp duty will be deemed to
be a liability of the Company to make an actual payment of Tax on the date
on which the document was executed and "Tax Liability" shall be construed
accordingly.
1.6 In determining for the purposes of this Schedule 4 whether a charge on, or
power to sell, mortgage or charge, any of the shares or assets of the
Company exists at any time, the fact that any Tax is not yet payable or may
be paid by instalments shall be disregarded and such Tax shall be treated
as becoming due and the charge or power to sell, mortgage or charge shall
be treated as arising on the date on which HM Revenue & Customs gave notice
of the liability to the Company or the Buyer.
40
PART 2 TAX WARRANTIES
1. RETURNS NOTICES AND RECORDS
1.1 All accounts, computations, notices and returns required to be made or
submitted by the Company to any Tax Authority and all notices and
information required to be given by the Company to any Tax Authority
(including all returns and other documents or information in respect of
PAYE and National Insurance) have been properly and duly prepared and
punctually made, submitted or given by the Company and are up-to-date and
correct.
1.2 The Company is not and, in the period of six years ended on the date of
this document, has not been, in dispute with or subject to enquiry or
investigation, visits, discoveries or access orders by any Tax Authority
(other than routine enquiries concerning the corporation tax computations
of the Company, all of which have been resolved) and, so far as the
Warrantors, are aware there are no facts or circumstances likely to give
rise to or be the subject of any such dispute, enquiry or investigation.
1.3 The Company has (to the extent required by law) preserved and retained in
its possession complete and accurate records relating to its Tax affairs
(including PAYE and National Insurance records, VAT records and records
relating to transfer pricing) and the Company has sufficient records
relating to past events to calculate the profit, gain, loss, balancing
charge or balancing allowance (all for Tax purposes) which would arise on
any disposal or on the realisation of any assets owned at the Accounts Date
or acquired since that date but before Completion.
1.4 All disallowable expenditure has been properly identified and dealt with in
the tax computations.
1.5 Research and development claims have been made on a proper basis and the
Company has identified qualifying activities and qualifying expenditure.
2. PAYMENT OF TAX
The Company has duly and punctually paid all Tax (including Tax required to
be deducted or withheld from payments) to the extent that the same ought to
have
41
been paid and has not in the last six years paid or become liable to pay
any penalty or interest charged by virtue of the provisions of any Tax
Legislation.
3. CONCESSION
The Company has not during the period of three years ending on the date of
this document relied on any formal or informal unpublished concession,
dispensation or practice (whether general or specific to the Company) which
affects the amount of Tax chargeable on the Company or which purports to
modify or provide exemption from any obligation to make or submit any
computation notice or return to any Tax Authority.
4. DEDUCTIONS AND WITHHOLDINGS
The Company has made all deductions and withholdings in respect of, or on
account of, any Tax (including amounts required to be deducted under the
PAYE and National Insurance systems) from any payments made by it which it
is obliged or entitled to make and (to the extent required to do so) has
accounted in full to the relevant Tax Authority for all amounts so deducted
or withheld.
5. PAYE
The Company has not been notified that any PAYE audit or visit by the
Department of Social Security will be or is expected to be made. The
Disclosure Letter gives full details of all dispensations or notices
received by the Company under Section 65 of ITEPA (dispensations) and of
all PAYE settlement agreements entered into under Chapter 5 of Part 11 of
ITEPA by the Company.
6. CLOSE COMPANIES
6.1 The Company is not and never has been a close investment holding company or
a close company within the meaning of section 13A ICTA.
6.2 The Company has not at any time within the 6 years preceding Completion:
6.2.1 made or agreed to make any loan, advance or payment or given or agreed to
give any consideration falling within sections 419 to 422 ICTA (charges to
tax in connection with loans) or released or written off or agreed to
release or write off the whole or any part of such loans or advances; or
42
6.2.2 made a transfer of value which is or may be liable to Taxation under the
provisions of sections 94, 99 or 199 of the Inheritance ▇▇▇ ▇▇▇▇.
6.3 The Company has never made any distribution within section 418 ICTA.
7. CAPITAL GAINS
7.1 The sum which would be allowed as a deduction from the consideration under
section 38 TCGA (acquisition and disposal costs etc) of each asset of the
Company (other than trading stock) if disposed of on the date of this
document:
7.1.1 would not be less than (in the case of an asset held on the Accounts Date)
the book value of that asset shown or included in the Accounts or (in the
case of an asset acquired since the Accounts Date) an amount equal to the
consideration given for its acquisition; and in particular
7.1.2 would not be treated or deemed for the purposes of Tax to have been
reduced by reason of any claim made under sections 152 (roll-over relief),
153 (assets only partly replaced), 165 (relief for gifts of business
assets) or 175 (group rollover) TCGA or by reason of the operation of
section 17 (disposals and acquisitions treated as made at market value) or
sections 126 to 140 TCGA (re-organisation of share capital, conversion of
securities etc).
7.2 No transaction has been entered into by the Company to which the provisions
of section 18 (transactions between connected persons) TCGA have been or
could be applied.
7.3 No claims or elections have been made by the Company under sections 23,
24(2), 242(2), 247 and 248 TCGA.
8. CAPITAL ALLOWANCES
8.1 No balancing charge in respect of any capital allowances claimed or given
would arise if any asset of the Company (or, where computations are made
for capital allowances purposes for pools of assets, all the assets in that
pool) were to be realised for a consideration equal to the amount of the
book value thereof as shown or included in the Accounts (or, in the case of
any asset acquired since the Accounts Date, for a consideration equal to
the consideration given for the acquisition).
43
8.2 All capital allowance claims have been properly made in accordance with the
relevant tax legislation.
8.3 There is no non-qualifying expenditure or other amount in respect of which
a claim has not yet been made but could be made if included in the next
corporation tax return.
8.4 The Warrantors confirm that:
8.4.1 no capital allowances have been claimed under an election with an
equipment lessor;
8.4.2 none of the anti-avoidance provisions under Chapter 17 of Part 2 of the
Capital Allowances Act 2001 apply;
8.4.3 no short life asset elections have been made; and
8.4.4 no long life assets have been acquired.
9. SECONDARY LIABILITY
So far as the Warrantors are aware, no Event has occurred in consequence of
which the Company is made or held liable to pay or bear any Tax which is
primarily chargeable against or attributable to some person, firm or
company other than the Company or its directors or employees.
10. STAMP DUTIES
10.1 Each document in the possession or under the control of the Company or to
the production of which the Company is entitled and on which the Company
relies or may rely on for any purpose whatsoever and which in the United
Kingdom requires any stamp has been properly stamped or marked as
appropriate and no such document which is outside the United Kingdom would
attract stamp duty if it were to be brought into the United Kingdom.
10.2 The Company does not hold any interest in real property situated in the
United Kingdom which was granted or transferred to it in the three years
prior to the date of this agreement where such grant or transfer was the
subject of an application for relief from stamp duty under section 42 of
the Finance ▇▇▇ ▇▇▇▇, section 151 of the Finance ▇▇▇ ▇▇▇▇ or section 76 of
the Finance ▇▇▇ ▇▇▇▇ or
44
under equivalent provisions relating to stamp duty land tax in the Finance
▇▇▇ ▇▇▇▇.
10.3 The Company has not entered into any agreement for the sale of an estate or
interest in real property situated in the United Kingdom in the 90 days
prior to Completion.
10.4 The Company has complied in all respects with the provisions of Part IV of
the Finance ▇▇▇ ▇▇▇▇ (Stamp Duty Reserve Tax) and any regulations made
under such legislation.
10.5 The Company is not and has never been party to a "land transaction" for the
purposes of section 43 Finance ▇▇▇ ▇▇▇▇.
10.6 The entering into of this Agreement by the Company will not result in any
stamp duty or stamp duty land tax reliefs claimed on or before Completion
being withdrawn.
11. ANTI-AVOIDANCE
The Company has never been party to any non-arm's length transaction or
been party to or otherwise involved in any scheme or arrangement the main
purpose, or one of the main purposes, of which was to avoid Tax.
12. VALUE ADDED TAX
12.1 The Company is registered as a taxable person for VAT purposes in the
United Kingdom under schedule 1 VATA and has never been treated as (nor
applied to be) a member of a group of companies for VAT purposes.
12.2 The Company is not registered (nor required to be registered) for local VAT
or its equivalent in any state other than the United Kingdom.
12.3 The Company has complied in all material respects with all the requirements
of VATA and all application regulations and orders, and has fully
maintained complete, correct and up-to-date records, invoices and other
necessary documents.
12.4 The Company is not in arrears with any payment and has not failed to submit
any return (fully and properly completed) or information required in
respect of
45
VAT and is not liable or likely to become liable to any abnormal or
non-routine payment or default surcharge or any forfeiture or penalty or
subject to the operation of any penal provision.
12.5 No circumstances exist whereby the Company would or might become liable for
value added tax pursuant to the provisions of sections 47 (agents etc) or
48 (tax representatives) VATA.
12.6 The Company has not made and is not otherwise bound by any election made
pursuant to paragraph 2 of schedule 10 VATA.
12.7 The Company has not been party to a transaction to which Article 5 of the
Value Added Tax (Special Provisions) Order 1995 (transfer of business as a
going concern) has (or has purported to have been) applied.
12.8 No asset of the Company held within the 10 years prior to Completion has
been or is a capital item, the input tax on which could be subject to
adjustment in accordance with the provisions of Part XV of the Value Added
Tax Regulations 1995.
13. GROUPS
13.1 No Tax is or may become payable by the Company pursuant to section 190 TCGA
(tax on one member or group recoverable from another member) in respect of
any chargeable gain accruing prior to Completion.
13.2 The Company has not at any time within the period of six years ending with
the date of this document acquired any asset (other than as trading stock)
from any other company which at the time of the acquisition was a member of
the same group of companies as the Company (as defined in section 170 TCGA
(groups of companies: definitions)) and no member of any group of companies
of which the Company is, or has at any material time been, the principal
company (as defined in section 170 TCGA (groups of companies: definitions))
has so acquired any asset.
13.3 The Company has not in the last seven years ceased to be a member of a
group of companies for the purposes of section 178 or 179 TCGA (company
ceasing to be member of a group).
46
13.4 There are no assets currently owned by the Company in respect of which a
charge may arise on the sale of the Company pursuant to this Agreement
under Section 179 TCGA (company ceasing to be a member of a group).
14. LOAN RELATIONSHIPS
14.1 No amount in relation to which the Company is a debtor or creditor and
reflected in the Accounts or existing on the date of this agreement
constitutes a loan relationship of the Company and no interest arising is
allowable as a debit for tax when included in the Accounts.
14.2 No Tax Liability or non-trading deficit would arise from any loan
relationship of the Company as a result of any debt under such loan
relationship being settled in full or in part at Completion.
14.3 In relation to each of its loan relationships, the Company operates and
has, in each accounting period of the Company ending after 31 March 2000,
operated an accruals basis of accounting authorised under section 85 of the
Finance ▇▇▇ ▇▇▇▇.
15. INHERITANCE TAX
There is no unsatisfied liability to inheritance tax attached or
attributable to the assets of the Company or the shares of the Company and
neither such assets nor such shares are subject to an HM Revenue & Customs
charge.
16. FOREIGN CONNECTIONS
16.1 The Company has never been resident outside the United Kingdom for the
purposes of any tax legislation.
16.2 The Company does not have (and in the period of three years ending on the
date of this document has not had) any branch agent, or permanent
establishment (within the meaning of the OECD Model Double Taxation
Agreement) outside the United Kingdom.
16.3 The Company does not have (and has not in the last seven years had) any
interest in a controlled foreign company within the meaning of sections 747
and 752 ICTA and has no interest in an overseas company which could cause
an apportionment under Section 13 TCGA.
47
16.4 The Warrantors confirm that no application for consent has been made or
should have been made pursuant to the provisions of Section 765 ICTA and no
notice has been given or should have been given pursuant to the provisions
of Section 765 A ICTA.
48
PART 3 TAX COVENANT
1. WARRANTORS COVENANT
Subject to part 4 of this schedule, the Warrantors covenant with the Buyer
to pay to the Buyer an amount equal to:-
1.1 any Tax Liability of the Company:
1.1.1 arising in respect of, by reference to, or in consequence of, any Event
which occurred on or before Completion;
1.1.2 arising in respect of, by reference to, or in consequence of, any income
profits or gains earned, accrued or received by the Company on or before or
in respect of a period ended on or before Completion; or
1.1.3 arising or assessed as a consequence of the failure of a Relevant Person
at any time to pay Tax;
1.2 any Tax Liability which arises as a result of any supply, acquisition or
importation made or deemed to be made for the purposes of VAT by any member
of any VAT Group other than the Company;
1.3 any liability of the Company to make a payment in respect of, or in
consequence of, any indemnity, covenant or guarantee relating to Tax given
by the Company on or before Completion;
1.4 any liability in respect of inheritance tax which:
1.4.1 is at, or becomes after Completion, as a result of the death of any person
within seven years after a transfer of value (or a deemed transfer of
value) on or before Completion, a charge on any of the shares or the assets
of the Company or gives rise to a power to sell, mortgage or charge any of
the shares or the assets of the Company; or
1.4.2 arises as a result of a transfer of value occurring or being deemed to
occur on or before Completion whether or not in conjunction with the death
of any person (whenever occurring) which increased or decreased the value
of the estate of the Company;
49
1.5 any Tax Liability in respect of the emoluments or benefits in kind of
employees or directors of the Company arising in respect of periods ended
on or before Completion and arising from their employment or directorships
with the Company or in respect of services rendered by an individual to the
Company where Tax has not been properly accounted for as required on or
prior to Completion or proper returns have not been made as required on or
prior to Completion in respect of emoluments and which the Company decides
to pay, whether or not the liability for such Tax may be the liability of
the employees or directors;
1.6 the EMI Liabilities (as defined in clause 3.4);
1.7 a sum equal to the amount included in the Completion Accounts for any
Relief under Schedule 23 of the Finance ▇▇▇ ▇▇▇▇, unless the Company is
able to obtain Relief of at least such amount under, pursuant to or
otherwise in accordance with Schedule 23 of the Finance ▇▇▇ ▇▇▇▇ in respect
of the exercise of the options granted to ▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇
referred to in the definition of the EMI Liabilities against the income,
profits or gains of the Company made during the current accounting period;
1.8 any reasonable costs, fees or expenses incurred by the Company or the Buyer
in connection with:
1.8.1 any Tax Liability or other liability in respect of which the Warrantors
are liable under any of paragraphs 1.1 to 1.6 above; or
1.8.2 taking or defending any action (including limited to legal proceedings)
under this schedule at the request or direction of the Warrantors.
50
PART 4 LIMITATIONS AND PROCEDURE
1. RESTRICTION ON VENDOR'S LIABILITY
1.1 The provisions of paragraphs 2.1 (maximum liability) and 1.2 (time limits)
of Schedule 6 shall apply to this schedule as if the same were set out
herein in full and the liability of the Warrantors under this schedule
shall be limited or excluded accordingly.
1.2 The covenants contained in part 3 of this schedule shall not extend to any
Tax Liability to the extent that:
1.2.1 such Tax Liability was paid or discharged on or before Completion;
1.2.2 specific provision or reserve (other than a deferred tax provision or
reserve) in respect of that Tax Liability was made in the Accounts or the
Completion Accounts;
1.2.3 such Tax Liability arises or is increased as a result of any change in Tax
Legislation or published practice or any withdrawal of any published
extra-statutory concession by a Tax Authority or any increase in rates of
Tax (in each case) announced after Completion which has retrospective
effect;
1.2.4 such Tax Liability would not have arisen but for any voluntary act or
transaction carried out after Completion by the Buyer or Company, provided
that this paragraph 1.2.4 shall not apply to any act or transaction:
1.2.4.1 required by law or carried out or effected by the Company pursuant to a
legally binding commitment created or entered into before Completion; or
1.2.4.2 which consists of communicating information to any Tax Authority; or
1.2.4.3 carried out or effected by the Company in the ordinary course of its
business.
1.2.5 such Tax Liability arises by reason of a disclaimer by the Company or a
revision to a claim by the Company after Completion of the whole or part of
any allowance to which the Company is entitled under the Capital ▇▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ or by reason of the revocation or revision by the Company after
Completion of any claim for Relief made (whether provisionally or
otherwise) by it prior to Completion; or
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1.2.6 to the extent that such Tax Liability arises as a result of any changes
after Completion in the bases, methods or policies of accounting of the
Company provided that such changes are not required in order to correct
previous bases, methods or policies of accounting which did not comply with
generally accepted United Kingdom accounting principles or an applicable
FRS in force at the relevant time;
1.2.7 to the extent that a claim arising out of the same circumstances has been
satisfied under this Agreement;
1.2.8 to the extent that such Tax Liability arises from the winding-up or
cessation of any business of the Company after Completion;
1.2.9 to the extent that such Tax Liability would not have arisen or would have
been reduced or eliminated but for a failure or omission on the part of the
Company or the Purchaser after Completion to make any claim, election,
surrender or disclaimer or to give any notice or consent or to do any other
thing the making or giving or doing of which was taken into account in
preparing the Accounts or Completion Accounts of which the Warrantors have
notified the Buyer whether by means of the Disclosure Letter or otherwise
in writing.
1.3 The Warrantors shall not be liable in respect of a breach of any of the
Warranties if and to the extent that the loss occasioned thereby has been
recovered under the Tax Covenants and vice versa.
2. RECOVERY FROM THIRD PARTIES
2.1 If, before the sixth anniversary of the date of this document, the Company
is entitled to recover from any other person any amount which is referable
to a Tax Liability of the Company in respect of which the Warrantors have
made a payment under this schedule, the Buyer shall procure that, so far as
reasonable, reasonable steps are taken to enforce that recovery, and the
Buyer will repay to the Warrantors the lesser of:
2.1.1 the amount so recovered (less any losses, costs, damages and expenses
properly and reasonably incurred by the Company, or the Buyer or any other
member of the same group of companies as the Buyer as a result of effecting
recovery of that amount); and
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2.1.2 the amount paid by the Warrantors under this schedule in respect of the
Tax Liability in question, less any part of such amount previously repaid
to the Warrantors under any provision of this agreement or otherwise.
3. NO DEDUCTIONS OR WITHHOLDINGS
3.1 Save only as may be required by law, all sums payable by the Warrantors
under this schedule shall be paid free and clear of all deductions or
withholdings whatsoever.
3.2 If any deductions or withholdings are required by law to be made from any
payment under this schedule, the Warrantors shall pay such sum as will,
after the deduction or withholding has been made, leave the Buyer with the
same amount as it would have been entitled to receive in the absence of any
such requirement to make a deduction or withholding.
4. TAX ON PAYMENTS
If any sum payable by the Warrantors to the Buyer under this schedule is
(or but for the availability of any Accounts Relief or Post Completion
Relief would be) subject to a Tax Liability in the hands of the Buyer, the
Warrantors shall pay to the Buyer such sum as is necessary to ensure that
the amount received by the Buyer is not less than the amount it would have
received had the payment not been subject to Tax.
5. DATE FOR PAYMENT
5.1 Where the Warrantors become liable to make a payment pursuant to the
provisions of this schedule, the due date for the making of that payment in
cleared funds shall be:
5.1.1 the date falling 10 Business Days after the date on which the Company or
(as the case may be) the Buyer has notified the Warrantors of the amount of
the payment required to be made; or
5.1.2 in any case involving a liability of the Company or the Buyer to make an
actual payment (whether or not a payment of Tax), the later of the date
falling 10 Business Days after the date on which the Company or (as the
case may be) the Buyer has notified the Warrantors of the amount of the
payment required to be
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made and the date falling 10 Business Days before the last date on which
the payment in question is required to be made to the person entitled to
the payment (after taking into account any postponement of the due date for
payment of any Tax which is obtained).
6. INTEREST ON LATE PAYMENTS
If any payment required to be made by the Warrantors under this schedule is
not made by the due date for payment thereof, then that payment shall carry
interest from that due date until the date when the payment is actually
made at the rate of 2 per cent above the base rate from time to time of
Lloyds TSB Bank Plc compounded quarterly.
7. PRICE REDUCTION
Any payment by the Warrantors under this schedule shall (so far as
possible) be treated as a reduction in the consideration paid for the
Shares, provided that nothing in this paragraph 7 shall limit or exclude
the liability of the Warrantors under this Agreement.
8. TAX CLAIMS
8.1 If the Buyer or the Company shall become aware of any Tax Claim which is
likely to give rise to a liability of the Warrantors under this schedule
the Buyer shall (or shall procure that the Company shall) as soon as
reasonably practicable(and in any event within 10 Business Days) give
notice thereof to the Warrantors but so that such notice shall not be a
condition precedent to the liability of the Warrantors hereunder.
8.2 Subject to paragraph 8.3, if the Warrantors shall indemnify the Company and
the Buyer to the reasonable satisfaction of the Buyer against all losses,
costs, damages and expenses (including interest on overdue Tax) which may
be incurred thereby, the Buyer shall (and shall procure that the Company
shall), in accordance with any reasonable instructions of the Warrantors
promptly given by notice to the Buyer (but subject to paragraphs 8.2.1 to
8.2.3 inclusive), seek to avoid, dispute, resist, appeal, compromise or
defend such Tax Claim provided always that:
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8.2.1 the Company shall not be obliged to appeal against any assessment for Tax
raised on it if, having given the Warrantors notice of the receipt of that
assessment complying with paragraph 8.1, it has not within 15 days
thereafter received instructions from the Warrantors, in accordance with
the provisions of this paragraph 8.2, to make that appeal;
8.2.2 the Buyer and the Company shall not be obliged to comply with any
instruction of the Warrantors which involves contesting any assessment for
Tax before any court or other appellate body (excluding the Tax Authority
in question) unless the Warrantors furnish the Buyer with the written
opinion of Tax Counsel of at least 5 years' call to the effect that an
appeal against the assessment for Tax in question will, on the basis of
probabilities, be won.
8.3 The Warrantors shall (subject to the Buyer and/or the Company being
indemnified to their reasonable satisfaction against any costs, expenses,
losses, liabilities, damages, claims, demands and penalties (including any
additional Taxation) which may be thereby incurred or suffered) be entitled
at their cost and expense to have conduct of all or any discussions and
negotiations with HM Revenue & Customs regarding or relevant to the Tax
payable as a result of the Relevant ▇▇▇▇▇▇ Event and/or the Relevant ▇▇▇▇▇▇
Event including avoiding, resisting, appealing against, negotiating,
compromising or defending a claim or instituting any proceedings in
relation to any such claim. The Buyer shall allow the Warrantors and their
professional advisers to have reasonable access during normal business
hours on reasonable advance notice to the books and records of the Company
relevant to such matters, and (at the Warrantors' reasonable cost and
expense) to take copies thereof and extracts therefrom, and generally to
have all such information as may from time to time be available to the
Buyer and/or the Company in connection therewith. The Warrantors shall
promptly keep the Buyer informed and updated with the progress of their
discussions and negotiations referred to in this paragraph 8.3.
9. TAX AFFAIRS
9.1 The Buyer or their duly authorised agents or advisers shall prepare, submit
and agree the corporation tax computations and returns of the Company ("Tax
Computations") for its accounting period(s) (within the meaning of section
12 of
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ICTA) commencing during the period from the Accounts Date to Completion
("Relevant Accounting Period(s)").
9.2 The Buyer shall deliver to the Warrantors for comments any Tax Computation
return document or correspondence and details of any information or
proposal ("Relevant Information") which it intends to submit to HM Revenue
& Customs before submission to HM Revenue & Customs and shall take account
of the reasonable comments of the Warrantors and make such amendments to
the Relevant Information as the Warrantors may reasonably require in
writing within 30 days of the date of delivery of the Relevant Information
prior to its submission to HM Revenue & Customs.
9.3 The Buyer shall deliver to the Warrantors copies of any correspondence sent
to, or received from, HM Revenue & Customs relating to the Tax Computations
and returns and shall keep the Warrantors fully informed of its actions
under this paragraph.
9.4 Subject to paragraphs 9.2 to 9.3, the Buyer shall or shall procure that:
9.4.1 the Company properly authorises and signs the Tax Computations and makes
and signs or otherwise enters into all such elections, surrenders and
claims and withdraws or disclaims such elections, surrenders and claims and
gives such notices and signs such other documents as the Warrantors shall
require in relation to the Relevant Accounting Period(s);
9.4.2 the Company provides to the Warrantors such information and assistance,
including such access to its books, accounts and records which may
reasonably be required to review and agree the Tax Computations;
9.4.3 any correspondence which relates to the Tax Computations shall, if
received by the Buyer or any Company or its agents or advisers, be properly
and within a reasonable period of time copied to the Warrantors.
9.5 In respect of any matter which gives or may give the Buyer a right to make
a Tax Claim, the provisions of paragraph 8 with respect to appeals and the
conduct of disputes shall apply instead of the provisions of this paragraph
9.
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9.6 The Warrantors and the Buyer shall use all reasonable endeavours to agree
the Tax Computations as soon as reasonably practicable and shall deal with
all such matters promptly and diligently and within applicable time limits.
10. MINIMUM AMOUNTS
The Warrantors shall have no liability for a claim under part 3 of this
Schedule unless such claim would, when aggregated with all other such
claims under part 3 of this Schedule, equal or exceed L10,000 (ten thousand
pounds) but any such claim shall not be limited to the excess over the
amount specified in this paragraph and for the purposes of this paragraph
all claims arising out of the same subject matter shall be treated as one
single claim rather than as individual claims.
11. EMI LIABILITIES
No claim relating to the EMI Liabilities shall be made under part 3 of this
Schedule or the Warranties and the Buyer shall procure that no claim,
withholding or deduction is made by the Company or the Subsidiary against
any of the Sellers in relation to the EMI Liabilities until the earlier of
the Release Date and the date when all actions intended and permitted to be
taken by the Warrantors pursuant to paragraph 8.3 above have been concluded
or completed.
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SCHEDULE 5
THE WARRANTIES
1. THE COMPANY AND THE SELLER
1.1 CAPACITY
Each of the Sellers has full power to enter into and perform the provisions
of this Agreement, which constitutes a binding agreement on him in
accordance with its terms.
1.2 OWNERSHIP OF THE SHARES
Each of the Sellers is the beneficial owner of the number of Shares set
opposite his name in Schedule 1 and has the right to dispose of them to the
Buyer or as it directs free from any Encumbrance and together with all
rights now or hereafter attaching to them.
1.3 TRANSFERS AT AN UNDERVALUE
Neither the Shares nor any asset owned or used by the Company has been the
subject of a transfer at an undervalue (within the meaning of section 238
or section 239 of the Insolvency Act 1986) within the period of five years
prior to the date of this Agreement.
1.4 LIABILITIES OWING TO OR BY THE SELLERS
There is not outstanding any indebtedness and there are no contracts,
arrangements or liabilities (actual or contingent) remaining in whole or in
part to be performed between the Company and any of the Sellers or any
director of the Company or any person (other than any subsidiary of the
Company) who is an associate of or connected with any of them.
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2. THE COMPANY'S SCHEDULED PARTICULARS AND CONSTITUTIONAL AND ADMINISTRATIVE
AFFAIRS
2.1 SCHEDULE 2
2.1.1 The particulars of the Company and the Subsidiary set out in Schedule 2
are true, complete and accurate; no person is a shadow director of the
Company and its issued share capital is fully paid.
2.1.2 The Company:
2.1.2.1 has not since its incorporation had any group undertaking other than
Ryder Systems Trustee Limited; and
2.1.2.2 has not since its incorporation been a subsidiary of any other company.
2.2 MEMORANDUM AND ARTICLES
The copy of the memorandum and articles of association of the Company
attached to the Disclosure Letter is true and complete.
2.3 OPTIONS
No person has the right (whether exercisable now or in the future and
whether or not contingent) to call for the allotment, issue or transfer of
any share or loan capital of the Company under any option or other
agreement (including without limitation conversion rights and rights of
pre-emption).
2.4 PURCHASE OF OWN SHARES
The Company has not at any time purchased any of its own shares or redeemed
or forfeited any shares in its capital.
2.5 STATUTORY AND OTHER BOOKS AND RECORDS
2.5.1 All registers, accounts, books, ledgers, financial and other records of
the Company have been fully, properly and accurately kept and maintained,
are in the possession of the Company and contain true and accurate records
of all matters required by law to be entered therein and no notice or
allegation that any of them is incorrect or should be rectified has been
received by the Company or the Seller.
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2.5.2 The Company's accounting records:
2.5.2.1 comply with the requirements of sections 221 and 222 of the Act;
2.5.2.2 are sufficient to show and explain the Company's transactions;
2.5.2.3 disclose with reasonable accuracy, at any time, the financial position
of the Company at that time; and
2.5.2.4 do not contain or reflect any material inaccuracy or discrepancy.
2.6 FILING OF DOCUMENTS
All returns and other documents required to be filed with the Registrar of
Companies, or with any other authority, in respect of the Company have been
duly filed and were when filed correct.
2.7 INSURANCES
2.7.1 The Company maintains, and at all material times has maintained, adequate
insurance cover against all risks normally insured against by companies
carrying on a similar business, for the full replacement or reinstatement
value of its business and assets, and in particular has maintained all
insurance required by statute, product liability and professional indemnity
insurance, and insured against loss of profits for a period of not less
than six (6) months and for loss of rent for a period of not less than
three (3) years.
2.7.2 The Disclosure Letter sets out full details of all policies of insurance
maintained by or on behalf of the Company, all of which are in full force
and effect.
2.7.3 All premiums in respect of policies of insurance maintained by or on
behalf of the Company have been paid as and when due, and, so far as the
Warrantors are aware, there are no circumstances which might lead to any
liability under such insurance being avoided by the insurers or (being
circumstances not affecting businesses generally) the premiums being
increased, and there is no claim outstanding under any such policy, nor are
any of the Warrantors aware of any circumstances likely to give rise to a
claim thereunder.
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2.7.4 The Disclosure Letter sets out reasonable detail all insurance claims made
by or on behalf of the Company within the period of three years immediately
prior to the date of this Agreement.
2.7.5 There are no claims outstanding or threatened or, so far as the Warrantors
are aware, pending against the Company which are not fully covered by
insurance.
2.8 AGENCY
No person, as agent or otherwise, is entitled or authorised to bind or
commit the Company to any obligation outside the ordinary course of
business.
2.9 SUBSIDIARY
The Subsidiary is a wholly owned subsidiary of the Company which has never
traded and has no assets or liabilities, actual or contingent save for
those acquired or incurred in its capacity as Subsidiary of The Ryder
Systems Employee Benefit Trust.
3. THE COMPANY AND THE LAW
3.1 COMPLIANCE WITH LAWS
3.1.1 The Company has conducted and is conducting its business in accordance
with all applicable laws and regulations of any relevant jurisdiction in
which it carries out its business and neither the Company nor any of its
officers, agents or employees have committed, or omitted to do, any act or
thing capable of giving rise to any fine, penalty, default proceedings or
other liability on the part of the Company.
3.1.2 There is no order, decree or judgment of any court or any governmental
agency of any jurisdiction outstanding against the Company or which may
have any adverse effect upon the assets or business of the Company; no such
order, decree or judgment is pending, and so far as the Warrantors are
aware there are no circumstances likely to give rise to any such order,
decree or judgment.
3.1.3 So far as the Warrantors are aware, there is not pending or in existence
any investigation or enquiry by or on behalf of any governmental or other
body in respect of the affairs of the Company.
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3.2 LICENCES
3.2.1 The Company has obtained all licences, consents, permits and authorities
of a statutory or regulatory nature necessary or in the reasonable opinion
of the Warrantors expedient to enable it to carry on its business
effectively in the places and in the manner in which it is now carried on.
3.2.2 All such licences, consents, permits and authorities are valid and
subsisting, and none of the Warrantors know of any reason why any of them
should be suspended, cancelled or revoked or renewed or continued subject
to any term or condition which does not currently apply thereto.
3.3 LITIGATION
3.3.1 The Company is not engaged in any dispute with any customer or supplier or
in any litigation or other proceedings.
3.3.2 So far as the Warrantors are aware:
3.3.2.1 no litigation or other proceedings are pending or threatened by or
against the Company;
3.3.2.2 there are no circumstances likely to give rise to any litigation or
other proceedings; and
3.3.2.3 the Company has not been a party to any undertaking or assurance given
to any court or governmental agency which is still in force.
3.4 INSOLVENCY
3.4.1 The Company has not become unable to pay its debts as they fall due within
the meaning of section 123 of the Insolvency ▇▇▇ ▇▇▇▇ or received any
written demand pursuant to section 123(1)(a) of the Insolvency ▇▇▇ ▇▇▇▇.
3.4.2 No order has been made or petition presented or resolution passed for the
winding up of the Company; no proposal has been made under part I of the
Insolvency ▇▇▇ ▇▇▇▇ for a voluntary arrangement; no person has appointed or
applied to any court of competent jurisdiction to appoint a receiver or an
administrative receiver or an administrator; and no distress, execution or
other process has been levied against the Company.
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3.5 FAIR TRADING
3.5.1 No agreement, practice or arrangement currently or previously carried on
by the Company or to which the Company is or has been a party infringes any
competition, anti-restrictive trade practice, anti-trust or consumer
protection law or legislation applicable in any relevant jurisdiction in
which it carries our its business ("Competition Laws").
3.5.2 The Company has not given any undertaking to any court, person or body and
is not expressly and specifically subject to any act, decision, regulation,
order or other instrument under any Competition Laws.
3.6 PRODUCTS/SERVICES
The Company has not manufactured, sold or supplied any product or provided
any service which does not or did not at any material time materially
comply with the terms of any contract entered into by the Company in
relation to such product or service or with any applicable regulation,
standard or statutory requirement, or which was in any other way defective.
3.7 POLLUTION OF THE ENVIRONMENT
3.7.1 No hazardous substances have been used or stored or otherwise handled by
the Company on the Property or elsewhere. The Company has at all times held
all licences, consents, permits and authorities necessary to enable it to
use, store or otherwise handle or dispose of any hazardous substances used,
stored, otherwise handled or disposed of by it, whether on the Property or
elsewhere.
3.7.2 There has been no pollution of the environment by the Company, the Company
has no responsibility or liability for any pollution of the environment by
any third party and so far as the Warrantors are aware there has been no
act or omission by the Company which could give rise to any pollution of
the environment.
3.7.3 The Company has complied and has adequate systems and facilities to
continue to comply with:
3.7.3.1 all laws and regulations relating to pollution of the environment;
3.7.3.2 all laws and regulations relating to pollution of the environment which
apply to any person carrying on any process carried on by the Company;
63
3.7.3.3 all EC Directives relating to pollution of the environment (which have
been implemented in any relevant jurisdiction in which the Company carries
on its business).
For the purposes of this paragraph 3.7 the expressions "pollution of the
environment" and "process" shall have the same meanings as in section 1 of
the Environmental Protection ▇▇▇ ▇▇▇▇.
3.8 DATA PROTECTION
3.8.1 The Company has at all times complied with the Applicable Data Protection
Laws, and there exist no circumstances likely to give rise to any
allegation of non-compliance.
3.8.2 The Company has made all necessary notifications or registrations under
the Applicable Data Protection Laws, and such registrations or
notifications are appropriate given the Company's actual data processing
activities.
3.8.3 The Company has not received any enforcement, information or other
official notice or request under the Applicable Data Protection Laws.
3.8.4 The Company has not received any communication from any data subject or
official alleging a breach of the Applicable Data Protection Laws.
3.8.5 The Company has not been required to pay compensation in respect of any
breach of the Applicable Data Protection Laws, no claims for compensation
are outstanding and there are no circumstances likely to give rise to such
a claim.
3.8.6 The Company has complied with all data subject requests including requests
for access to personal data or cessation of specified processing
activities.
3.9 HEALTH AND SAFETY
3.9.1 The Company has complied with all its obligations under the Health &
Safety at Work etc ▇▇▇ ▇▇▇▇ ("the Health & Safety Act") and all regulations
passed thereunder ("the Regulations").
3.9.2 The Company has not been served with any Improvement Notices.
3.9.3 The Company has not been served with any Prohibition Notices.
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3.9.4 The Company has not been cautioned for any breach of the Health & Safety
Act or the Regulations.
3.9.5 The Company has not been prosecuted for any breach of the Health & Safety
Act or the Regulations.
3.9.6 So far as the Warrantors are aware, there are no circumstances likely to
give rise to the service of an Improvement Notice or Prohibition Notice, or
to a prosecution for a breach of the Health & Safety Act or the
Regulations.
3.9.7 The Company has not been the subject of a prosecution (whether by the
Crown Prosecution Service, the Health and Safety Executive, or any other
responsible body) as a result of or in connection with any work-related
death and there are no circumstances likely to give rise to such a
prosecution.
3.9.8 For the purposes of this paragraph 3.9, the expression "Improvement
Notice" and "Prohibition Notice" shall have the same meanings as in
sections 21 and 22 of the Health & Safety Act.
4. THE COMPANY'S FINANCIAL POSITION
4.1 THE ACCOUNTS
4.1.1 The Accounts:
4.1.1.1 have been prepared in accordance with the requirements of the Act and
all other applicable statutes and regulations and in accordance with United
Kingdom generally accepted accounting practices, including all applicable
SSAPs and FRSs and statements from the Urgent Issues Task Force;
4.1.1.2 have been prepared on bases and principles and using methods which are
consistent with those used in the preparation of the audited accounts of
the Company for the accounting period ending 30 April 2005; and
4.1.1.3 show a true and fair view of the state of affairs of the Company as at
the Accounts Date and of the profit or loss of the Company for the
accounting period ended on that date.
4.1.2 All claims, disclaimers, elections assumed in the Accounts have been made
and, so far as the Sellers are aware, none are likely to be disputed or
withdrawn.
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4.2 PROVISIONS IN THE ACCOUNTS
The Accounts:
4.2.1 fully provide for all liabilities (other than contingent liabilities which
are not expected to crystallize or occur) and fully disclose all contingent
liabilities which are not expected to crystallise or occur and all capital
purchase and revenue commitments of the Company in each case as at the
Accounts Date;
4.2.2 fully provide for all bad and doubtful debts as at the Accounts Date;
4.2.3 attribute a value to stock which does not exceed the lower of direct cost
and net realisable value as at the Accounts Date after wholly writing off
all redundant, obsolete, old, unusable, unsaleable, slow-moving,
deteriorated and excessive stock; and
4.2.4 are not affected (except as disclosed in the Accounts) by any
extraordinary or exceptional event, circumstance or item.
4.3 EVENTS SINCE THE ACCOUNTS DATE
Since the Accounts Date:
4.3.1 the Company has carried on its business in the ordinary and usual course
and without any interruption or alteration in the nature, scope or manner
thereof;
4.3.2 the Company has not acquired or disposed of any asset, assumed any
liability, made any payment or entered into any other transaction which was
not in the ordinary course of its business and for full value;
4.3.3 the Company's turnover and margins of profitability have not been less
than its turnover and margins of profitability for the corresponding period
in the accounting period which ended on the Accounts Date, and there has
been no deterioration in its financial position or prospects.
4.3.4 the Company has paid its creditors within the times agreed with such
creditors, and there are no debts now outstanding by the Company which have
been outstanding for more than 60 days or which are now overdue for payment
(whether in whole or in part);
66
4.3.5 the Company has not repaid or become liable to repay any loan or
indebtedness in advance of its stated maturity;
4.3.6 the Company has not received notice (whether formal or informal) from any
lender of money to the Company requiring repayment or intimating the
enforcement by it of any security which it may hold over any assets of the
Company, and so far as the Warrantors are aware there are no circumstances
likely to give rise to such notice;
4.3.7 no part of the amounts included in the Accounts, or subsequently recorded
in the books of the Company as owing by any debtors, has been outstanding
for more than 90 days or has been released on terms that any debtor pays
less than the full book value of his or its debt or has been written off or
has proved to any extent to be irrecoverable;
4.3.8 the Company has not factored or discounted any of its debts or agreed to
do so;
4.3.9 the Company has not offered any price reduction or discount or allowance
on sales of stock below a selling price which achieves a gross margin of
60% or sold any stock at less than its book value;
4.3.10 the Company has not sought to accelerate payment by its trade debtors
other than in the ordinary and normal course of business;
4.3.11 no dividend or other distribution of profits or assets has been, or
agreed to be, declared, made or paid by the Company;
4.3.12 no bonus or payment of any type has been, or agreed to be, paid by the
Company to any of the Sellers (or their connected persons).
4.4 CAPITAL COMMITMENTS
Since 30 October 2006 the Company has not entered into, or agreed to enter
into, any capital commitments in excess of L15,000 in aggregate.
4.5 GRANTS
The Company has not made any application for or received any financial
assistance from any supranational, national or local authority or
governmental agency.
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4.6 DEBTS
There are no debts owing by or to the Company other than debts which have
arisen in the ordinary course of its business, nor has the Company lent any
money which has not been repaid.
4.7 MANAGEMENT ACCOUNTS AND FINANCIAL STATEMENTS
The Management Accounts and the Financial Statements have been prepared
using the same accounting principles, policies and bases as used in the
Accounts (consistently applied), fairly reflect the trading position of the
Company as at the date and for the period to which they relate and are not
affected by any extraordinary, exceptional, unusual or non-recurring
income, capital gain or expenditure or by any other factor known to the
Sellers rendering profits or losses for the period covered exceptionally
high or low.
4.8 CASH SCHEDULES
The Cash Schedules (as defined in clause 5.2.1.16) accurately reflect the
cash disbursements and cash receipts made or agreed to be made by the
Company for the period between 31 October 2006 and Completion.
5. THE COMPANY AND ITS FINANCIERS
5.1 BORROWINGS
The Company has incurred no borrowings or other financial indebtedness.
5.2 CONTINUANCE OF FACILITIES
Full and accurate details of all overdrafts, loans or other financial
facilities outstanding or available to the Company are contained in the
Disclosure Letter (and true and complete copies of all documents relating
thereto are attached to the Disclosure Letter), and neither any of the
Sellers nor the Company has done anything whereby the continuance of any
such facilities in full force and effect might be affected or prejudiced.
5.3 BANK ACCOUNTS
A statement of all the bank accounts of the Company and of the credit or
debit balances on such accounts as at a date not more than two days before
the date
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of this Agreement and a reconciliation of such credit or debit balances to
the books and records of the Company as at the date of this Agreement are
attached to the Disclosure Letter and are true, complete and accurate. The
Company does not have any other bank or deposit account. Since the date to
which such statement is drawn up there have been no payments out of, and no
instructions given for any payments out of, and no cheques drawn against,
any such accounts except for routine payments out of current account in the
ordinary course of business.
5.4 GUARANTEES
No person has given any guarantee of or security for any overdraft, loan or
loan facility granted to or obligations undertaken by the Company. The
Company is not a party to any guarantee, suretyship, indemnity or similar
commitment in respect of the obligations or liabilities of any third party.
6. THE ASSETS OF THE COMPANY
6.1 ASSETS AND CHARGES
6.1.1 The Company owns free from any Encumbrance all assets included in the
Accounts or acquired by the Company since the Accounts Date except for
current assets subsequently disposed of by the Company in the ordinary
course of its business, the Property and stock which is the subject of
retention of title terms contained in standard terms of trading imposed by
suppliers in the ordinary course of their business and owns free from any
Encumbrance any other asset used by it.
6.1.2 The Company has possession of all such assets and none of such assets, nor
any of the undertaking, goodwill or uncalled capital of the Company, is
subject to any Encumbrance or any agreement or commitment to give or create
any Encumbrance.
6.1.3 The assets owned by the Company, together with assets held under hire
purchase, leasing and rental agreements (copies of which are attached to
the Disclosure Letter), comprise all assets necessary for the continuation
of its business as now carried on.
6.2 STOCKS
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The stock of raw materials, packaging materials and finished goods now held
by the Company is not excessive and is adequate in relation to the current
trading requirements of the business of the Company; none of it is
obsolete, slow-moving or unusable and it is capable of being sold by the
Company in the ordinary course of its business in accordance with current
price lists without rebate or allowance to a Buyer.
6.3 DEBTS
The Warrantors are not aware of any reason why the amounts due from debtors
will not be recoverable in full in the ordinary course of business within
ninety days following the date of this Agreement, and none of these debts
is subject to any counterclaim or set-off.
6.4 INTELLECTUAL PROPERTY
6.4.1 The Company:
6.4.1.1 is the sole and beneficial owner and (where it is capable of
registration) the registered proprietor of the Intellectual Property used
by it, all of which are valid and in full force and effect;
6.4.1.2 does not own or use any Intellectual Property other than that listed in
the Disclosure Letter (other than copyrights, design rights, technical
know-how and confidential information) and does not require any other
Intellectual Property to carry on its business;
6.4.1.3 has not entered into any Intellectual Property Agreements other than the
Business Name Agreement and any listed in the Disclosure Letter or
authorised any person to make any use of or to do anything which would or
might otherwise infringe any Intellectual Property Rights;
6.4.1.4 has not disclosed (except in the ordinary course of its business) any of
its know-how, trade secrets or customer details to any other person; and
6.4.1.5 save as provided for in the Business Name Agreement, has not licensed,
transferred, assigned or in any way disposed of any Intellectual Property
owned or used by it to the Sellers (or any person connected with the
Sellers) or, save in the ordinary and normal course of business to any
other person.
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6.4.2 The Company owns the copyright or design right (whether registered or
unregistered) in the designs of all its products and is the proprietor of
any registrations or applications to register any such designs.
6.4.3 None of the processes or products of the Company:
6.4.3.1 infringes any Intellectual Property of any other person; or
6.4.3.2 involves the unlicensed use of confidential information or know-how
disclosed to the Company by any person.
6.4.4 Save as provided for in the Business Name Agreement, none of the
Intellectual Property Rights are being used by, or are being or have been
claimed, disputed, opposed or attacked by any other person.
6.4.5 All Intellectual Property Agreements to which the Company is a party are
valid and binding on the parties thereto; the Company has at all times
observed and performed all of the provisions of each of them and nothing
has been done or omitted to be done by the Company which would enable any
of them to be terminated.
6.4.6 None of the records, systems, data or information of the Company is
recorded, stored, maintained, operated or otherwise wholly or partly
dependent on or held or accessible by any means (including any electronic,
mechanical or photographic process, whether computerised or not) which are
not under the exclusive ownership and direct control of the Company.
6.4.7 Save as provided for in the Business Name Agreement, and so far as the
Warrantors are aware, no person has the right to require the Company to
change its corporate name or to cease using any trade name, logo, trading
style, domain name or e-mail address currently used by the Company.
6.4.8 Neither the Sellers nor any person connected to the Sellers has in its
possession or control the source code applicable to any Intellectual
Property owned or used by the Company.
6.4.9 So far as the Warrantors are aware, there are no claims, challenges,
disputes or proceedings pending or threatened in relation to the ownership,
validity or use of the Intellectual Property Rights.
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6.5 PLANT
Each item of the plant and machinery and all vehicles and office and other
equipment used in connection with the business of the Company:
6.5.1 is in good repair and condition (subject to fair wear and tear) and in
satisfactory working order;
6.5.2 is capable, over the period of time during which it is to be written down
to a nil value in the accounts of the Company, of doing the work for which
it was designed or purchased; and
6.5.3 is not surplus to the requirements of the Company.
6.6 COMPUTER SYSTEMS
6.6.1 The Computer Systems are capable of the following functions:
6.6.1.1 handling date information involving all and any dates including,
accepting date input, providing date output and performing date
calculations in whole or part;
6.6.1.2 operating accurately without interruption on and in respect of any and
all dates and without any change in performance;
6.6.1.3 responding to and processing two digit year input without creating any
ambiguity as to the century; and
6.6.1.4 storing and providing date output information without creating any
ambiguity as to the century.
6.6.2 The Computer Systems and each element of them passes date information
between each other (and any third parties' computer systems with which they
habitually communicate) in a way which does not create inaccuracies.
6.6.3 The Hardware and Software (details of which are set out in the Disclosure
Letter) have been satisfactorily maintained in accordance with industry
good practice. The Hardware has the benefit of the manufacturer's
warranties set out in the Disclosure Letter.
6.6.4 The Hardware and the Software have adequate capability and capacity for
the projected requirements of the Company up to 30 April 2007.
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6.6.5 Disaster recovery plans are in effect and are adequate to ensure that the
Hardware, Software and Data can be replaced or substituted without material
disruption to the business of the Company.
6.6.6 In the event that any person providing maintenance or support services for
the Computer Systems ceases or is unable to do so, the Company has all
necessary rights and information to procure the carrying out of such
services by employees of by a third party without undue expense or delay.
6.6.7 The Company has sufficient technically competent and trained employees to
ensure proper handling, operation, monitoring and use of the Computer
Systems.
6.6.8 The Company has adequate procedures to ensure internal and external
security of the Computer Systems and of the Data, including procedures for
preventing unauthorised access, preventing the introduction of a virus,
taking and storing on-site and off-site back-up copies of Software and
Data.
6.6.9 Where any of the records of the Company are stored electronically, the
Company is the owner of all hardware and software licences necessary to
enable it to keep, copy, maintain and use such records in the course of its
business and does not share any hardware or software relating to the
records with any person.
6.6.10 The Company has all the rights necessary (including rights over the
source code) to obtain, without undue expense or delay, modified versions
of the Software which are required at any time to improve in any regard the
operation and/or efficiency of the Software.
6.6.11 The Company owns, and is in possession and control of, original copies of
all of the manuals, guides, instruction books and technical documents
(including any corrections and updates) required to operate the Computer
Systems effectively.
6.6.12 The Computer Systems have never materially interrupted or hindered the
running or operation of the Company's business and so far as the Warrantors
are aware have no defects in operation which so affect the Company's
business.
6.6.13 In this paragraph 6.6:-
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6.6.13.1 "Data" means any data or information used by or for the benefit of the
Company at any time and stored electronically at any time;
6.6.13.2 "Hardware" means any computer equipment used by or for the benefit of
the Company at any time including, without limitation, PCs, mainframes,
screens, terminals, keyboards, discs, printers, cabling and associated and
peripheral electronic equipment but excluding all Software and excluding
Hardware not owned by the Company and not located at the Property;
6.6.13.3 "Software" means any set of instructions for execution by
microprocessor used by or for the benefit of the Company at any time,
irrespective of application, language or medium and excluding software not
developed by the Company and supplied to the Company by a third party;
6.6.13.4 "Computer Systems" means all Hardware, Software and any other items
that connect with any or all of them which in each case are used by or for
the benefit of the Company other than items outside of the Company's
control.
7. THE CONTRACTS OF THE COMPANY
7.1 DOCUMENTS
All title deeds to which the Company is a party are in the possession of
the Company and are properly stamped and free from Encumbrance.
7.2 MATERIAL CONTRACTS
Save for contracts of employment, the Company is not a party to or subject
to any agreement, transaction, obligation, commitment, understanding,
arrangement or liability which:
7.2.1 is incapable of complete performance in accordance with its terms within
three months after the date on which it was entered into or undertaken or
cannot be terminated, without giving rise to any liabilities on the
Company, by the Company giving three months' notice or less;
7.2.2 is known by the Warrantors to be likely to result in a loss to the Company
on completion or performance;
7.2.3 cannot readily be fulfilled or performed by the Company on time;
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7.2.4 involves or is likely to involve on the part of the Company obligations,
restrictions, expenditure or revenue of an unusual, onerous or exceptional
nature; or
7.2.5 requires an aggregate consideration payable by the Company in excess of
L100,000;
7.2.6 is in any way otherwise than in the ordinary course of the business of the
Company and on arm's length terms.
7.3 DEFAULTS
Neither the Company nor any other party to any agreement with the Company
is in default thereunder, being a default which would be material in the
context of the financial or trading position of the Company nor (so far as
the Warrantors are aware) are there any circumstances likely to give rise
to any such default.
7.4 INSIDER CONTRACTS
There is not outstanding, and there has not at any time during the last
three years been outstanding, any agreement or arrangement between the
Company and any of the Sellers nor has its profit or loss or financial
position during such period been affected by, any such agreement or
arrangement or any other agreement or arrangement which is not entirely of
an arm's length nature.
7.5 CUSTOMERS/SUPPLIERS
7.5.1 In the accounting period ended on the Accounts Date, no customer or
supplier of the Company represented 10% or more of the Company's sales or
purchases in that period (any such customer or supplier being a "Major
Customer" or "Major Supplier") save for those specifically identified in
the Disclosure Letter as Major Customers or Major Suppliers.
7.5.2 No Major Customer or Major Supplier has since the Accounts Date ceased to
do business with the Company or has since such date substantially reduced
its purchases from or supplies to the Company and since the Accounts Date
no indication has been received by the Company of any material change in
the prices or other terms upon which any customer or supplier is prepared
to contract or do business with the Company.
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7.5.3 The Sellers are not aware of any reason to indicate that any Major
Customer or Major Supplier is likely to reduce the volume of their
purchases from or supplies to the Company in the 12 months following the
date of this Agreement by comparison with the value of their purchases from
or supplies to the Company during the period of 12 months prior to the date
of this Agreement.
8. THE COMPANY AND ITS EMPLOYEES
8.1 GENERAL
8.1.1 There is no employment or other contract or engagement between the Company
and any of its directors or other statutory officers. The Company is not a
party to a consultancy contract.
8.1.2 There is no employment contract between the Company and any of its
employees which cannot be terminated by the Company by three months' notice
or less without giving rise to a claim for damages or compensation (other
than a statutory redundancy payment or statutory compensation for unfair
dismissal). The Company has not received notice of resignation from any
employee earning more than L35,000 per year.
8.1.3 There is no employment or consultancy contract or other contract of
engagement between the Company and any person which is in suspension or has
been terminated but is capable of being revived or enforced or in respect
of which the Company has a continuing obligation.
8.1.4 The Disclosure Letter contains details of:
8.1.4.1 the total number of the Company's employees including those who are on
maternity leave or absent because of disability or other long-term leave of
absence and who have or may have a right to return to work with the
Company;
8.1.4.2 the name, date of start of employment, period of continuous employment,
salary and other benefits, grade and age of each employee of the Company
and, where an employee has been continuously absent from work for more than
one month, the reason for the absence; and
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8.1.4.3 the terms of the contract of each director, other officer and employee
of the Company entitled to remuneration at an annual rate, or an average
annual rate over the last three financial years, of more than L35,000
8.1.5 The basis of the remuneration payable to the Company's directors, other
officers and employees is the same as that in force at the Accounts Date.
The Company is not obliged to increase, nor has it made provision to
increase, the total annual remuneration payable to its directors, other
officers and employees.
8.1.6 The Company owes no amount to a present or former director, other officer
or employee of the Company (or his dependant) other than for accrued
remuneration or reimbursement of business expenses.
8.1.7 There is no agreement or arrangement between the Company and an employee
or former employee with respect to his employment, his ceasing to be
employed or his retirement which is not included in the written terms of
his employment or previous employment. The Company has not provided, or
agreed to provide, a gratuitous payment or benefit to a director, officer
or employee or to any of their dependants.
8.1.8 The Company has maintained up-to-date, full and accurate records regarding
the employment of each of its employees (including details of terms of
employment, payments of statutory sick pay and statutory maternity pay,
income tax and social security contributions, working time, disciplinary
and health and safety matters) and termination of employment.
8.2 PAYMENTS ON TERMINATION
Except as disclosed in the Accounts, the Company has not:
8.2.1 incurred a liability for breach or termination of an employment contract
including, without limitation, a redundancy payment, protective award and
compensation for wrongful dismissal, unfair dismissal and failure to comply
with an order for the reinstatement or re-engagement of an employee;
8.2.2 incurred a liability for breach or termination of a consultancy agreement;
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8.2.3 made or agreed to make a payment or provided or agreed to provide a
benefit to a present or former director, other officer or employee of the
Company or to any of their dependants in connection with the actual or
proposed termination or suspension of employment or variation of an
employment contract.
8.3 COMPLIANCE WITH LAW
The Company has complied with:
8.3.1 each obligation imposed on it by, and each order and award made under,
statute, regulation, code of conduct and practice, collective agreement
(including any agreement or arrangement under the ICE Regulations 2004),
custom and practice relevant to the relations between it and its employees
or a trade union or the terms of employment of its employees; and
8.3.2 each recommendation or code of practice made by the Advisory, Conciliation
and Arbitration Service and each award and declaration made by the Central
Arbitration Committee.
8.4 REDUNDANCIES AND TRANSFER OF BUSINESS
Within the year ending on the date of this Agreement the Company has not:
8.4.1 given notice of redundancies to the relevant Secretary of State or started
consultations with appropriate representatives under Chapter II of Part IV
of the Trade Union and Labour Relations (Consolidation) ▇▇▇ ▇▇▇▇ or failed
to comply with its obligations under Chapter II of Part IV of that Act; or
8.4.2 been a party to a relevant transfer (as defined in the Transfer of
Undertakings (Protection of Employment) Regulations 1981) or failed to
comply with a duty to inform and consult appropriate representatives under
those Regulations.
8.5 TRADE UNIONS
8.5.1 The Company has no agreement or arrangement (whether under the ICE
Regulations 2004 or otherwise) with and does not recognise a trade union,
works council, staff association or other body representing any of its
employees and the Company has not received any notice or request nor are
there any negotiations which may lead to any such agreement or arrangement.
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8.5.2 The Company is not involved in, and so far as the Warrantors are aware no
fact or circumstance exists which might give rise to:-
8.5.2.1 a dispute with a trade union, works council, staff association or other
body representing any of its employees; or
8.5.2.2 any proceedings before the Central Arbitration Committee or an
Employment Tribunal in relation to any collective bargaining agreement or
any arrangement under the ICE Regulations 2004.
8.6 INCENTIVE SCHEMES
The Company does not have and is not proposing to introduce a share
incentive, share option, profit sharing, bonus or other incentive scheme
for any of its directors, other officers or employees.
9. PENSIONS
In this Warranty 9:
"GPP" means the Ryder Systems Group Personal Pension Plan underwritten by
Clerical Medical;
"▇▇ ▇▇▇▇▇▇▇'▇ Scheme" means the pension scheme to which Mr P ▇▇▇▇▇▇▇ makes
his pension contributions;
"Mr Ashok Mall's Scheme" means the pension scheme to which the Company
makes pension contributions in respect of Mr Ashok Mall;
together the "Disclosed Schemes".
9.1 The Disclosed Schemes are the only arrangements under which the Company has
or could have any liability to provide or contribute towards relevant
benefits as defined in Chapter 2 of Part 6 of the Income Tax (Earnings &
Pensions) ▇▇▇ ▇▇▇▇.
9.2 Each of the Disclosed Schemes complies and has at all times complied with
all legal and regulatory requirements (including equal treatment and data
protection requirements) applicable to it.
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9.3 The Company complies and has at all times complied with any duty to
facilitate access to a stakeholder pension scheme under section 3 of the
Welfare Reform and Pensions ▇▇▇ ▇▇▇▇.
9.4 All contributions deducted from the salaries of employees who are members
of the Disclosed Schemes and all contributions payable by the Company to
and in respect of the Disclosed Schemes have been paid and passed to the
providers of the GPP and ▇▇ ▇▇▇▇▇▇▇'▇ Scheme, as appropriate, in full and
within the prescribed limits applicable in each case.
9.5 All levies payable in respect of the Disclosed Schemes have been paid in
full and on or by the due date in each case.
9.6 No claim, dispute, complaint or investigation (including but not limited
to, complaints to the Pensions Ombudsman and investigations by the Pensions
Regulator) has arisen which relates to the Disclosed Schemes or to the
provider of retirement or death benefits in respect of each current and
former employees, and there is no reason why any such claim, dispute,
complaint or investigation could arise.
9.7 The pension contributions from the Company and the employees to the GPP are
a maximum of 10%.
10. MATERIAL DISCLOSURE
10.1 COMMISSION
No person is entitled whether, actually or contingently, to receive from
the Company any finder's fee, brokerage, or other commission in connection
with the acquisition or disposal of shares in the Company.
10.2 CONSEQUENCE OF SHARE ACQUISITION BY THE BUYER
The sale of the Shares to the Buyer will not by virtue of the terms of any
agreement or arrangement to which the Company is a party:
10.2.1 cause the Company to lose the benefit of any right or privilege it
presently enjoys, entitle any person to terminate any contract with, or
obligation to, the Company or, so far as the Sellers are aware, cause any
person who normally
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does business with the Company not to continue to do so on the same basis
as previously; or
10.2.2 result in any present or future indebtedness of the Company becoming due
or capable of being declared due and payable prior to its stated maturity.
10.3 LEGAL DUE DILIGENCE
The information contained in the data room as identified in the index dated
19 July 2006 in the Agreed Form was when given true, accurate and not
misleading and, so far as the Warrantors are aware, remains in all material
respects true, accurate and not misleading.
11. PROPERTY
11.1 The Particulars of the Property shown in Schedule 3 are true and correct
and the Company has so far the Warrantors are aware, good and marketable
title to and the exclusive occupation and possession of the Property free
so far the Warrantors are aware from any mortgage, debenture or charge
(whether specific or floating legal or equitable) rent charge lien or other
encumbrance, lease, sub-lease, tenancy or right of occupation, reservation,
covenant, stipulation, profit a prendre, wayleave, grant, restriction,
easement, quasi-easement or any agreement for any of the same or any
privilege in favour of any third party.
11.2 So far as the Warrantors are aware, there are appurtenant to the Property
all rights and easements necessary for its use and enjoyment.
11.3 The Company has in its possession the tenancy agreement referred to in
Schedule 3.
11.4 So far as the Warrantors are aware, the Property is not affected by any of
the following matters:-
11.4.1 any dispute, notice or complaint or any exception, reservation, right,
covenant, restriction overriding interest or condition and in particular
(but without limitation) any of those matters which is of an unusual
nature; or
11.4.2 any notice, order, demand, requirement or proposal made or issued by or
on behalf of any government or statutory authority, department or body for
the
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acquisition, clearance, demolition or closing or the carrying out of any
work upon any building, the modification of any planning permission, the
discontinuance of any use or the imposition of any building or improvement
line; or
11.4.3 any compensation received as a result of any refusal of any application
for planning consent or the imposition of any restrictions in relation to
any planning consent; or
11.4.4 any commutation or agreement for the commutation of rent or payment of
rent in advance of the due dates of payment thereof.
11.5 The Property is fit for the purpose for which it is presently used so far
as the Warrantors are aware there are no development works, redevelopment
works or fitting out works outstanding in respect of the Property
11.6 All restrictions conditions and covenants contained in the tenancy
agreement referred to in Schedule 3 affecting the Property have been duly
and punctually observed and performed and no notice of any breach of any of
the same has been received or is likely to be received
11.7 The use of the Property and all machinery and equipment therein and the
conduct of any business therein complies and has at all times during the
Company's occupation of the Property complied in all respects with all
relevant statutes and regulations including without prejudice to the
generality of the foregoing the ▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇, the Offices, Shops and
Railway Premises ▇▇▇ ▇▇▇▇, the Fire Precautions ▇▇▇ ▇▇▇▇, the Health and
Safety at Work etc., ▇▇▇ ▇▇▇▇ and with all rules, regulations and delegated
legislation thereunder and all necessary licences and consents required
thereunder have been obtained.
11.8 So far as the Warrantors are aware, there are no restrictive covenants or
provisions, legislation, or orders, charges, restrictions, agreements,
conditions or other matters which preclude the use of the Property for the
purpose or purposes for which the Property is now used and each such use is
the permitted use under the provisions of the Town and Country Planning
Acts 1971 to 1990 and any statutory re-enactment thereof and all statutory
instruments and regulations made thereunder and is in accordance with the
requirements of any Local Authority and all restrictions, conditions and
covenants imposed by or
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pursuant to the said Town and Country Planning Acts have been observed and
performed and no agreements have been entered into under s.52 Town and
Country ▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇.▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ or s.33
Local Government (Miscellaneous Provisions) ▇▇▇ ▇▇▇▇ in respect of the
Property.
11.9 There are no options agreements for sale, mortgages, charges (whether
specific or floating) rights of pre-emption or first refusal to which the
Company is party affecting the Property. So far as the Warrantors are
actually aware (it being acknowledged that they have made no enquiry of any
person including those referred to in clause 1.10 other than ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇ ▇▇▇▇▇), there are no other options agreements for
sale, mortgages, charges (whether specific or floating) rights of
pre-emption or first refusal affecting the Property.
11.10 The Property is not subject to the payment of any outgoings (except
national non domestic rates and water rates and sewerage service charges).
11.11 There are no compulsory purchase notices orders or resolutions affecting
the Property.
11.12 The Company has no existing or contingent liabilities in respect of any
properties previously occupied by it or in which it owned or held any
interest (or as a surety for the obligations of any other person in
relation to such property) including without limitation leasehold premises
assigned surrendered or otherwise disposed of and the Company has not at
any time received any indication whatsoever from any party that any claim
has been made or will be made in respect of any such existing or contingent
liabilities.
11.13 The Property comprises all the land and buildings owned, leased or
occupied by the Company.
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SCHEDULE 6
CLAIMS PROCEDURE AND DETERMINATION AND SELLERS' SAFEGUARDS
1. NOTICE OF CLAIMS AND TIME LIMITS
No claim in respect of any breach of any of the Warranties (other than the
Warranty in paragraph 1.2 of Schedule 5) or pursuant to the Tax Covenants
or the Indemnities shall be made (except in any case of fraud or
dishonesty) unless notice thereof complying with paragraph 11 below has
been given by or on behalf of the Buyer before:
1.1 in respect of any breach of any of the Warranties other than the Tax
Warranties, or any claim under the Indemnities, the expiry of the period of
18 months following Completion; or
1.2 pursuant to the Tax Covenants or in respect of any breach of any of the Tax
Warranties, the expiry of the period of 6 years following Completion;
2. LIMITATION OF LIABILITY - MAXIMUM AND MINIMUM AMOUNTS
Except in any case of fraud or dishonesty:
2.1 the Warrantors shall have no liability in damages in respect of any claim
by the Buyer under any of the Warranties (except for claims in respect of
any breaches of the Warranties in paragraph 1 of Schedule 5) or the Tax
Covenants or the Indemnities if and to the extent that such liability
would, when aggregated with the amount of any damages paid to the Buyer by
the Sellers in respect of all and any such claims, exceed the purchase
price payable to the Sellers for the Shares under clause 3.1 ("the Purchase
Price") and the aggregate maximum liability of each Warrantor shall not
exceed the percentage proportion of the Purchase Price described as his
"Relevant Percentage" and stated alongside his name in Schedule 1 of the
Purchase Price;
2.2 the Warrantors shall have no liability in damages in respect of any claim
by the Buyer under the Warranties or the Indemnities unless such claim:
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2.2.1 equals or exceeds L1,000 (one thousand pounds); and
2.2.2 would, when aggregated with all other such claims against the Warrantors
of L1,000 (one thousand pounds) or more equal or exceed, L100,000 (one
hundred thousand pounds);
but any such claim shall not be limited to the excess over the amounts
specified in this paragraph 2.2 and for the purposes of this paragraph 2.2
all claims arising out of the same subject-matter shall be treated as one
single claim rather than as individual claims.
3. NO PREJUDICE FROM PRIOR INVESTIGATION
The rights and remedies of the Buyer in respect of the Warranties, the Tax
Covenants and the Indemnities shall not be affected by Completion, by any
investigation made by or on behalf of the Buyer into the affairs of the
Company or any of the Subsidiaries, by any actual, constructive or imputed
knowledge of the Buyer (save as provided in the next following paragraph),
by any rescission of (or failure to rescind) this Agreement or by any other
event or matter except a specific waiver or release by the Buyer in
accordance with the terms of this Agreement.
4. DISCLOSURE LETTER
The Buyer shall not be entitled to bring any claim in respect of any breach
of any of the Warranties if and to the extent that such inconsistency has
been fairly disclosed in the Disclosure Letter with sufficient details to
identify the nature and scope of the matters disclosed.
5. SEPARATE WARRANTIES
Each Warranty is a separate warranty and shall not be limited or restricted
by reference to or inference from any other Warranty.
6. RIGHTS OF CONTRIBUTION
None of the Sellers shall, if any claim is made against him, by the Buyer
under the terms of this Agreement, make any claim against the Company or
any director or any employee of the Company (other than under a
contribution agreement between the Sellers) on which or on whom he may have
relied before
85
agreeing to any term of this Agreement or authorising any statement in the
Disclosure Letter.
7. REDUCTION OF CONSIDERATION
Any payment by any of the Sellers for breach of any of the Warranties or
under the Tax Covenants or Indemnities shall constitute pound for pound a
repayment of and reduction in the consideration for the Shares.
8. SET-OFF
Except as expressly set out in this Agreement, the Buyer shall not have the
right to set off any sum claimed by it under this Agreement or otherwise
against any of its obligations hereunder not then fulfilled.
9. DOUBLE RECOVERY
The Sellers shall not be liable in respect of any breach of the Warranties
if and to the extent that the losses occasioned thereby have been recovered
under the Tax Covenants or the Indemnities (and vice versa) or otherwise
where the recovery of damages or other payment by the Purchaser in
connection therewith would involve recovery more than once in respect of
the same loss or damage.
10. NOTIFICATION
The Seller shall notify the Buyer immediately they become aware of any fact
or circumstance which constitutes or which may constitute a breach of the
Warranties or the Indemnities.
11. NOTICE OF CLAIM
No claim under the Warranties or the Indemnities shall be deemed to have
been made unless notice of that claim has been made in writing to the
Warrantors, specifying in reasonable detail to the extent then available:
11.1 the event of default or other matter to which the claim relates; and
11.2 the nature of the breach and/or claim.
11.3 Where notice has been given in respect of any claim under the Warranties or
Indemnities in accordance with the above, that notice shall be deemed to
have
86
been irrevocably withdrawn and lapsed unless proceedings in respect of that
notice have been issued and served on the Warrantors not later than the
expiry of the period of 6 months after the date of that notice.
12. THIRD PARTY RECOVERY
12.1 Where the Buyer or the Company (or both) is, or is likely to be, entitled
to recover from some other person any sum in respect of any matter giving
rise to a claim for breach of the Warranties, then the following provisions
of will apply:
12.1.1 The Buyer shall procure that, so far as reasonable, reasonable steps are
taken to enforce that recovery provided that neither the Company nor the
Buyer shall be required to take any steps which in its reasonable opinion
are materially adverse to the business or goodwill of either of them;
12.1.2 If any sum is recovered in the circumstances set out in this paragraph
12.1 and none of the Warrantors has by that time made any payment in
respect of the relevant claim, the amount payable by the Warrantors in that
respect shall be reduced by an amount equal to the Net Sum Recovered;
12.1.3 If any sum is recovered in the circumstances set out in this paragraph
12.1 and the Warrantors have already made payment in full in respect of
that claim, there shall be repaid to the Warrantors an amount equal to the
lesser of that payment and the Net Sum Recovered;
12.1.4 In this paragraph 12.1, the "Net Sum Recovered" means the sum recovered
by the Buyer from the other person, after deducting the reasonable costs
and expenses of recovering it and any taxation payable by the Buyer or the
Company as a result of its receipt.
12.2 Without prejudice to the generality of paragraph 12.1 above, the provisions
of paragraph 12.1 shall apply where the Buyer or the Company is entitled to
recover from its insurers any sum in respect of any matter giving rise to a
claim under the Warranties or the Indemnities.
13. ACCOUNTS PROVISION
13.1 The Warrantors shall have no liability in respect of any claim for breach
of any of the Warranties (or such liability shall be reduced), if and to
the extent that
87
specific provision or reserve has been made in the Accounts or the
Completion Accounts for, or in respect of, the liability or other matter
giving rise to such claim;
14. GENERAL
14.1 Nothing in this schedule shall derogate from the Buyer's obligation to
mitigate any loss which it suffers in consequence of a breach of the
Warranties.
14.2 No claim whatever on the part of the Buyer shall lie in respect of any
breach of the Warranties or the Tax Covenants or the Indemnities if, and to
the extent that, such breach has arisen in respect of any act or omission
expressly stipulated to be carried out, or omitted, under the terms of this
Agreement
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SCHEDULE 7
CALCULATION OF COMPLETION NAV
PART 1
INTERPRETATION
In this Agreement the following words and expressions shall have the meanings
set out opposite each respectively:
"the Completion NAV" the net asset value of the Company at the Completion
Date being the aggregate of total assets less total
liabilities as agreed between the Buyer and the
Sellers or, as the case may be, as determined by the
Independent Accountant, in accordance with this
schedule;
"Independent Accountant" a chartered accountant agreed upon by or on behalf of
the Sellers and the Buyer or, if they fail to agree,
nominated on the application at any time of the
Sellers or of the Buyer by the President for the time
being of the Institute of Chartered Accountants in
England and Wales (the costs of such accountant, and,
if applicable, of such President, in nominating such
accountant to be borne equally by the Buyer and the
Sellers unless the Independent Accountant shall
determine otherwise.
PART 2
CALCULATION
1. The Buyer shall procure the Company to prepare and deliver to the Sellers
within 90 days after the Completion Date, accounts comprising a balance
sheet dealing with the state of affairs of the Company as at the close of
business on the
Completion Date in accordance with part 3 of this schedule together with a
statement of the Completion NAV ("the Completion Accounts").
2. The Sellers shall provide such information and assistance as the Buyer and
the Company may reasonably require for the preparation of the Completion
Accounts.
3. The Buyer shall procure that the Sellers have access to all working papers
necessary to review and verify the contents of the Completion Accounts.
4. If such queries and observations as the Sellers raise within twenty one
days following delivery to them of the Completion Statement have not been
dealt with to their satisfaction and reflected in any amendments within
twenty one days following delivery to the Buyer of such queries and
observations, it shall be open to the Sellers or the Buyer to request an
Independent Accountant to determine the Completion NAV, and his
determination shall, in the absence of manifest error, be final ad binding
on the parties.
5. If the Sellers do not raise any queries or observations in respect of the
Completion Statement within twenty one days following delivery thereof to
them or if they agree the Completion Statement, then the Completion
Statement shall be final and binding on the parties, and the Completion NAV
shall be as set out in the Completion Statement.
6. In determining the Completion NAV, the Independent Accountant shall act as
an expert and not as an arbitrator.
7. The Buyer and the Sellers shall promptly provide and render or cause to be
provided and rendered to the Independent Accountant such information and
assistance as they may reasonably require to enable the Independent
Accountant to determine the Completion NAV.
PART 3
ACCOUNTING PRINCIPLES, METHODS AND BASES
1. Subject to paragraph 2, the Completion Accounts shall be prepared in
accordance with:
1.1 the accounting principles, methods and bases applied and used in the
preparation of the Accounts, consistently applied; and
90
1.2 subject thereto, generally accepted United Kingdom accounting principles
methods and bases; and
1.3 shall be presented in the format set out in Schedule 9.
2. The following specific policies and principles shall apply in the
proportions of the Completion Accounts:
2.1 all bonuses, dividends and other payments of any type for directors and
employees, including but not limited to any bonuses due to any of the
Sellers on Completion, are fully accrued;
2.2 a 100% provision shall be made in respect of any bonus to be paid to ▇▇▇▇
▇▇▇▇▇ by the Company;
2.3 a 100% provision shall be made in respect of all debtors which are more
than 90 days old (together "the Overdue Debtors");
2.4 a provision of L35,000 shall be made in respect of the dilapidations costs
in relation to the Property; and
2.5 no more than L20,000 shall be included for any Relief (as defined in
Schedule 4) which may be claimed by the Company in accordance with Schedule
23 of the Finance ▇▇▇ ▇▇▇▇.
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SCHEDULE 8
COUNTRIES IN RESTRICTED AREA
Argentina
Austria
Belgium
Brazil
Bulgaria
Canada
Cayman Islands
Chile
Croatia
Cyprus
Czech Republic
Denmark
Egypt
Estonia
Finland
France
Germany
Greece
Guadeloupe
Hong Kong
Hungary
Iceland
India
Indonesia
Ireland
Israel
Italy
Japan
Kenya
Kuwait
Libya
Liechtenstein
▇▇
▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ (▇▇▇▇)
▇▇▇▇▇▇
Netherlands
Nigeria
Norway
Palestine
Poland
Portugal
Romania
Russia
Saudi Arabia
Senegal
Singapore
Slovakia
Slovenia
South Africa
Spain
Sweden
Switzerland
Syria
Thailand
Turkey
UK
United Arab Emirates
USA
Zambia
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SCHEDULE 9
PRO FORMA FOR COMPLETION ACCOUNTS
COMPLETION NAV (AMOUNTS IN UK L)
ASSETS
Fixed Assets [_______]
Accounts Receivables [_______]
Bank Accounts [_______]
Other Assets [_______]
---------
Total Assets [_______]
LIABILITIES
Accounts Payables [_______]
Other Liabilities [_______]
Taxation [_______]
SPECIFIC POLICIES & PRINCIPLES (SCHEDULE 9; PART 2):
Director & Employee Bonuses [_______]
Dilapidation Costs [_______]
Overdue Debtors [_______]
---------
Total Liabilities [_______]
COMPLETION NAV (Total Assets less Total Liabilities) [_______]
---------
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Signed as a deed by
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
in the presence of:-
/s/ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
-------------------------------------
Signed as a deed by
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
in the presence of:-
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-------------------------------------
Signed as a deed by
▇▇▇▇▇▇ ▇▇▇▇▇▇
in the presence of:-
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------------
Signed as a deed by
▇▇▇▇▇ ▇▇▇▇▇▇
in the presence of:-
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------------
Signed as a deed by
CTI DATA SOLUTIONS LIMITED
acting by two directors
or a director and its secretary:
-------------------------------------
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-------------------------------------
director
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇
-------------------------------------
director/secretary
95
Signed as a deed by
RYDER SYSTEMS TRUSTEE LIMITED
acting by two directors
or a director and its secretary:
-------------------------------------
/s/ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
-------------------------------------
director
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-------------------------------------
director/secretary
96