Common use of Demerger Clause in Contracts

Demerger. So far as the Seller is aware, no member of the Group has been concerned in an exempt distribution (as defined in section 214(4) ICTA 1988). 1. Limitation on quantum and general (A) The following thresholds shall apply: (i) save in respect of paragraph 4.5 of schedule 2 (Accounts and Management Accounts), the Purchaser shall not be entitled to damages or other payment in respect of any Warranty Claim or Warranty Claims unless and until the aggregate amount of all such Warranty Claims for which the Seller is liable exceeds £500,000, but once the aggregate amount of all such Warranty Claims has exceeded such sum, the Seller shall be liable under the Warranties in respect of only the amount by which such sum is exceeded; and (ii) the Purchaser shall not be entitled to damages or other payment in respect of any claim under the Tax Covenant until the aggregate amount of all such claims for which the Seller is liable under the Tax Covenant exceeds £25,000, but once the aggregate amount of all such claims has exceeded such sum, the Seller shall be liable under the Tax Covenant in respect of only the amount by which such sum is exceeded. (B) The total aggregate liability of the Seller under the Warranties and the Tax Covenant shall not in any event exceed an amount equal to £5 million. (C) The total aggregate liability of the Seller under the Mis-selling Indemnity shall not in any event exceed an amount equal to £10 million. (D) As regards the Tax Covenant the provisions of this Schedule shall operate to limit the liability of the Seller in so far as any provision in this Schedule is expressed to be applicable to the Tax Covenant and the provisions of the Tax Covenant shall further operate to limit the liability of the Seller in respect of any claim thereunder. (E) Without prejudice to Clause 24 (Entire agreement), the Purchaser acknowledges and agrees that the Seller does not give or make any warranty or indemnity as to the accuracy of the forecasts, estimates, projections, statements of intent or statements of honestly expressed opinion provided to the Purchaser (however so provided) on or prior to the date of this Agreement, including (without limitation), in the Disclosure Letter, the Information Memorandum or the information supplied to or made available to the Purchaser during its due diligence exercise. (F) The financial limitations contained in sub-paragraphs 1(A) and 1(B) above shall not apply in the event of any fraudulent act or omission of the Seller in the giving of the Warranties and/or the Indemnities and/or preparation of the Disclosure Letter nor shall such limitations apply in respect of any claim under the Warranties at paragraph 1 (Ownership of the Shares) or paragraph 2 (Capacity of the Seller) of Schedule 2 (Warranties). 2. Time limits for bringing claims (i) subject to sub-paragraph 2(ii), on or before the date falling 18 months after the Completion Date; or (ii) in respect of any claims under the Tax Warranties or the Tax Covenant, not later than the seventh anniversary of the Completion Date, PROVIDED THAT the liability of the Seller in respect of a claim under the Warranties shall absolutely determine (if such claim has not been previously satisfied, settled or withdrawn) if legal proceedings in respect of such claim shall not have been commenced within 6 months of the service of such notice and for this purpose proceedings shall not be deemed to have been commenced unless they shall have been properly issued and validly served upon the Seller.

Demerger. So far as Notwithstanding the Seller foregoing, if the Trustee determines that there is awarea Demerger of all the Employers (or, no member in any one or more cases, of the holding company of the Employer) currently employing the employees engaged in any Business Group has been concerned in an exempt distribution (as defined in section 214(4) ICTA 1988). 1. Limitation on quantum and general (A) The following thresholds shall apply: (i) save in respect of paragraph 4.5 of schedule 2 (Accounts and Management Accounts“the Relevant Employers”), the Purchaser shall Trustee shall, irrespective of whether or not be entitled the Demerger involves the sale of shares or assets of the Relevant Employers, apply the provisions of this paragraph 6. If the Trustee proposes to damages or other payment make a transfer of assets in respect of any Warranty Claim Member or Warranty Claims other Beneficiary affected by the Demerger to a Receiving Plan under clause H.5.1, the Trustee shall have full discretion to make those determinations which it considers most appropriate in all the circumstances PROVIDED that it shall whenever possible proceed in accordance with the following principles: (a) The Trustee shall consider the value of the proposed transfer specified by the Principal Company under clause H.5.3. (b) If the value proposed is the minimum calculated under clause H.5.3(ii), the Trustee shall, on the Demerger taking effect, implement those increases under paragraph 1 which would apply if there were a Relevant Sale of the Relevant Employers (the “Contingent Increases”). (c) If the value proposed exceeds that in (b) the Trustee shall not implement the Contingent Increases unless and until it considers the aggregate amount of all such Warranty Claims for which the Seller is liable exceeds £500,000, but once the aggregate amount of all such Warranty Claims has exceeded such sumexcess to be trivial. (d) Where Contingent Increases are granted, the Seller Trustee may attach such conditions (if any) to the transfer as it thinks appropriate. (e) Where Contingent Increases are not granted, the Trustee shall comply with paragraph 2 and may attach such other conditions (if any) to the transfer as it thinks appropriate. SCHEDULE 4 1. The Plan is intended to be an occupational pension scheme which is contracted-out by virtue of satisfying section 9(2) of the ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ and shall be liable under the Warranties administered so as to comply with all applicable requirements to enable it to be so contracted-out for all periods in respect of only which there is in force a contracting-out certificate issued in accordance with Chapter I of Part III of the amount ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ applying to employments contracted-out by which such sum is exceeded; and (ii) reference to the Purchaser shall not be entitled to damages or other payment in respect of any claim under the Tax Covenant until the aggregate amount of all such claims for which the Seller is liable under the Tax Covenant exceeds £25,000, but once the aggregate amount of all such claims has exceeded such sum, the Seller shall be liable under the Tax Covenant in respect of only the amount by which such sum is exceededPlan. (B) 2. The total aggregate liability of the Seller under the Warranties and the Tax Covenant shall not in any event exceed an amount equal to £5 million. (C) The total aggregate liability of the Seller under the Mis-selling Indemnity shall not in any event exceed an amount equal to £10 million. (D) As regards the Tax Covenant the provisions of this Schedule shall operate to limit the liability 4 override any of the Seller in so far as any provision in this Schedule is expressed to be applicable to the Tax Covenant and the other provisions of the Tax Covenant shall further operate Plan with which they are inconsistent. 3. Part II of this Schedule 4 applies in relation to limit periods of contracted-out employment by reference to the liability Plan (as in section 8(l)(a)(i) and 8(l)(b) of the Seller Pension Schemes Act 1993) prior to 6 April 1997 and Part III of this Schedule 4 applies in respect relation to periods of any claim thereunder. (E) Without prejudice to Clause 24 (Entire agreement), the Purchaser acknowledges and agrees that the Seller does not give or make any warranty or indemnity as contracted-out employment by reference to the accuracy of the forecasts, estimates, projections, statements of intent or statements of honestly expressed opinion provided to the Purchaser Plan (however so providedas aforesaid) on or prior to the date of this Agreement, including (without limitation), in the Disclosure Letter, the Information Memorandum or the information supplied to or made available to the Purchaser during its due diligence exerciseafter 5 April 1997. (F) The financial limitations contained in sub-paragraphs 1(A) and 1(B) above shall not apply in the event of any fraudulent act or omission of the Seller in the giving of the Warranties and/or the Indemnities and/or preparation of the Disclosure Letter nor shall such limitations apply in respect of any claim under the Warranties at paragraph 1 (Ownership of the Shares) or paragraph 2 (Capacity of the Seller) of Schedule 2 (Warranties). 2. Time limits for bringing claims (i) subject to sub-paragraph 2(ii), on or before the date falling 18 months after the Completion Date; or (ii) in respect of any claims under the Tax Warranties or the Tax Covenant, not later than the seventh anniversary of the Completion Date, PROVIDED THAT the liability of the Seller in respect of a claim under the Warranties shall absolutely determine (if such claim has not been previously satisfied, settled or withdrawn) if legal proceedings in respect of such claim shall not have been commenced within 6 months of the service of such notice and for this purpose proceedings shall not be deemed to have been commenced unless they shall have been properly issued and validly served upon the Seller.