EXHIBIT 3(iii)
DATED 1999
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(1) ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
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(2) EUROTELECOM CORPORATION LIMITED
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SHARE SALE AGREEMENT
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▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
SOLICITORS
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SHARE SALE AGREEMENT
DATE: 1999
PARTIES:
1. "The Vendors": the persons whose names and addresses are set out in
columns 1 and 2 of Schedule 1
2. "The Purchaser": EUROTELECOM CORPORATION LIMITED (CRN 3184949) whose
registered office is at Britannia House, British Fields, ▇▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇
1 RECITALS
1.1 The company short details of which are set out in Schedule 2 ("the
Company") is a private company limited by shares and at the date of
this Agreement has an authorised share capital of (pound)5,000 divided
into 5,000 Ordinary Shares of (pound)1 each all of which have been
issued are fully paid or credited as fully paid and are registered in
the names of the Vendors
1.2 The Vendors beneficially own the Shares in the numbers set out against
their names in the 3rd column of Schedule 1 and have the right to sell
or procure the sale of them free from all liens charges or incumbrances
1.3 The Vendors have agreed with the Purchaser to sell to it the Shares on
the terms but subject to the conditions of this agreement
OPERATIVE PROVISIONS:
2 INTERPRETATION
2.1 In this Agreement the following words and expressions have the
following meanings:
"Agreed Form" means in relation to any
document the draft of that document
which is either annexed to this
Agreement or which has been
initialled by the Vendors'
Solicitors and the Purchaser's
Solicitors for the purposes of
identification
"CAA 1990" the Capital Allowances ▇▇▇ ▇▇▇▇
"Companies Act" Companies ▇▇▇ ▇▇▇▇
"the Completion Date" means the date of actual completion
of the matters provided for in
clause 5 and "Completion" shall be
construed accordingly
"the Computer System" means any computer systems products
or software or any equipment and
systems incorporating such computer
systems products or software used
by the Company
"Consideration Shares" means 200,000 restricted shares of
Euro Telecom Communications Inc to
be allotted and issued credited as
fully paid to the Vendors as
consideration for the Shares.
"Deed of Covenant" a deed in the form set out in
Schedule 4
"Disclosure Letter" the disclosure letter (with the
attachments referred to in it) of
the same date as this Agreement from
the Warrantor to the Purchaser
"Employees" means the Warrantor, ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇
"FA" Finance Act
"FRS" a Financial Reporting Standard
issued by The Accounting Standards
Board Limited or an SSAP
"ICTA" Income and Corporation Taxes Act
1988
"Intellectual Property" means patents, trade marks,
registered designs, applications for
any of the foregoing, copyright,
design rights and analogous rights,
trade and business names, rights in
confidential information howsoever
arising and any right or interest in
any of the foregoing;
"Know-How" means inventions, discoveries,
improvements, processes, formulae,
techniques, designs, specifications,
drawings, technical information,
methods, test reports, component
lists, manuals, instructions,
catalogues and information relating
to customers and suppliers, in so
far as any of the foregoing is
confidential and relates to the
business of the Company and whether
or not it is written or unwritten;
"Last Accounts" the audited balance sheet as at the
Last Accounts Date and the audited
profit and loss account for the year
ended on the Last Accounts Date of
the Company and the directors'
report and notes "Last Accounts
Date" 31st March 1998 (being the
date to which the Last Accounts have
been prepared)
"Loan Agreement" means a loan agreement between the
Company and the Warrantor in the
Agreed Form
"the Property" means the leasehold property short
particulars of which are contained
in Schedule 3
"the Purchaser's ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ of ▇ ▇▇
▇▇▇▇▇▇▇▇▇▇" ▇▇▇▇▇'▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇
"Service Agreements" means the service and employment
agreements in Agreed Form between
the Company (1) and the Employees
(2)
"the Shares" the 5,000 Ordinary Shares of
(pound)1 each in the share capital
of the Company comprising the whole
of the issued and allotted share
capital of the Company
"SSAP" any Statement of Standard Accounting
Practice
"Taxation" all forms of taxation duties imposts
and levies whatsoever and wherever
or whenever imposed
"TCGA" the Taxation of Chargeable Gains ▇▇▇
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"VATA" the Value Added Tax ▇▇▇ ▇▇▇▇
"the Vendors' Solicitors" means Richmonds of ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
"Warranties" the warranties and representations
by the Warrantor contained in clause
6 and Schedules 5 and 6
"Warrantor" means ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ of ▇ ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇
2.2 All references in this Agreement to a statutory provision shall be
construed as including references to:
2.2.1 any statutory modification consolidation or re-enactment
(whether before or after the date of this Agreement) for the
time being in force; and
2.2.2 all statutory instruments or orders made pursuant to a
statutory provision; and
2.2.3 any statutory provisions of which a statutory provision is a
consolidation re-enactment or modification
2.3 Any reference in this Agreement to the "Vendors" includes their
respective personal representatives
2.4 Clause headings in this Agreement are for ease of reference only and do
not affect the construction of any provision
2.5 Expressions in the singular shall include the plural and vice versa and
to any gender includes the other genders and vice versa and references
to persons shall include corporations and vice versa
2.6 References to recitals clauses and schedules are references to recitals
and clauses of and schedules to this Agreement
2.7 The Schedules form part of this Agreement
2.8 The expression "the Purchaser" shall include its nominees, successors
in title and permitted assigns.
3. SALE AND PURCHASE OF SHARES
3.1 Subject to the terms of this Agreement:
3.1.1 each of the Vendors shall sell with full title guarantee and
3.1.2 the Purchaser (relying on the representations warranties
undertakings and indemnities by the Vendors in this Agreement)
shall purchase
the Shares free from all claims and encumbrances and with all attached
or accrued rights as at the Completion Date for the consideration
detailed in clause 4
3.2 Each of the Vendors waives any rights of pre-emption conferred on them
by the articles of association of the Company or otherwise over those
of the Shares agreed to be sold by the other Vendors
3.3 The Purchaser shall not be obliged to complete the purchase of any of
the Shares unless the purchase of all of the Shares is completed
simultaneously
4. PURCHASE CONSIDERATION
4.1 The purchase consideration for the Shares shall be satisfied by the
allotment to the Vendors of the Consideration Shares and by the payment
by the Purchaser to the Vendors of the sums of:
4.1.1 $96,000 on the Completion date
4.1.2 $48,000 on October 1999 and
4.1.3 (pound)48,000 on April 2000
all such sums being paid by bankers draft or telegraphic transfer to
the Vendor's Solicitors or by such other means as agreed by the
parties, and apportioned between the Vendors in the proportions set
opposite their names in column 4 of Schedule 1
5. COMPLETION
5.1 Completion of the purchase of the Shares shall take place at the
offices of the Vendors' Solicitors immediately after the signing of
this Agreement
5.2 The Vendors shall deliver to the Purchaser:
5.2.1 duly completed and signed transfers in favour of the Purchaser
or as it may direct of the Shares together with the relative
share certificates and such waivers consents or other
documents as may be required to pass good title in the Shares
to the Purchaser
5.2.2 the undated draft lease to the Property to be made between
Dasco Overseas Engineering Limited (1) and the Company (2)
("the Lease")
5.2.3 the Deed of Covenant duly executed by the Warrantor
5.2.4 the resignation of ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ as secretary of the
Company with a written acknowledgement (which shall be
executed as a deed in the Agreed Form) that she has no claim
whatever against the Company whether in respect of
compensation for loss of office damages pensions loans or
otherwise
5.2.5 a written acknowledgement executed as a deed in the Agreed
Form from the Warrantor who is to continue as a director after
the date of Completion that he has no claim whatever against
the Company other than in respect of his directors loan
account
5.2.6 certificates from the Company's bankers certifying the current
account balance of the Company at the close of business on the
last business day preceding Completion
5.2.7 appropriate forms to amend the mandates given by the Company
to its bankers
5.2.8 appropriate certified minutes of the Company authorising
execution of this Agreement, and any other ancillary
documentation in the Agreed Form
5.2.9 the Disclosure Letter
5.2.10 duly executed duplicates of the Service Agreements
5.2.11 the Certificate of Incorporation, any certificate(s) of
incorporation on change of name, the common seal and the
statutory books and registers (all entered up to date) of the
Company
5.3 The Vendors will procure that a board meeting of the Company shall be
held at which:
5.3.1 such persons as the Purchaser may nominate shall be appointed
as directors and the secretary of the Company
5.3.2 there shall be submitted and accepted the resignation of the
secretary referred to in clause 5.2.4
5.3.3 the transfers of the Shares (subject to stamping) shall be
approved for registration
5.3.4 the existing bank mandates given by the Company shall be
cancelled
5.3.5 the registered office of the Company shall be changed as the
Purchaser may direct
5.4 The Purchaser shall:
5.4.1 procure that the Consideration Shares are transferred to the
Vendors
5.4.2 deliver to the Vendors a Memorandum of Deposit of the Shares
in the Agreed Form as security for the payments due under
Clause 4
6. WARRANTIES BY THE WARRANTOR
6.1 The Warrantor warrants to the Purchaser that save as stated in the
Disclosure Letter the Warranties set out in Schedules 5 and 6 are true
and accurate in all respects and that the contents of the Disclosure
Letter and of all accompanying documents are true and accurate in all
respects and fully clearly and accurately disclose every matter to
which they relate
6.2 Each of the Warranties is without prejudice to any other warranty or
undertaking and except where expressly stated no clause contained in
this Agreement governs or limits the extent or application of any other
clause
6.3 The rights and remedies of the Purchaser in respect of any breach of
the Warranties shall not be affected by Completion or by any failure to
exercise or delay in exercising any right or remedy
6.4 The Warranties shall be deemed to be given as at the date of this
Agreement and to be repeated immediately before Completion and to
relate to the facts then existing
6.5 This clause and the Warranties and the Deed of Covenant are subject to
the provisions of Schedule 7 which shall apply to limit and regulate
the rights of the parties under this Agreement and the Deed of
Covenant. In the case of any conflict or inconsistency the provisions
of Schedule 7 shall prevail
6.6 Any of the Warranties which are qualified by the expression "to the
best of the knowledge information and belief of the Warrantor" or "so
far as the Warrantor is aware" or any similar expression shall be
deemed to qualify the Warranty to relate only to matters of which the
Warrantor had actual personal knowledge and does not extend to any
matters which he may be deemed to know or to imply that the Warrantor
has made any special or specific enquiries into the subject matter of
the Warranties
7. NON-COMPETITION
7.1 The Warrantor covenants with the Purchaser that (save with the consent
in writing of the Purchaser):
7.1.1 he will not use or procure or cause or (so far as the
Warrantor is able) permit the use of any name or names
identical or similar to or including the words "Easy I P" or
any colourable imitation thereof in connection with any
activity whatsoever;
7.1.2 he will not during the period of 1 year from Completion either
solely or jointly with or as manager agent or consultant of
any other person or body (corporate or unincorporated) carry
on or be engaged or concerned or interested directly or
indirectly within the United Kingdom in the business carried
on by the Company as carried on at Completion
7.1.3 he will in respect of goods or services of the nature
presently provided in the business carried on at the date of
this Agreement by the Company for a period of 1 year from
Completion solicit (either on its or their own account or as
the employee or manager agent consultant to employee of any
other person) the custom of any person who is or was within a
period of 12 months prior to Completion a customer of the
Company in relation to its respective businesses or have any
dealings with any such person
7.1.4 he will keep confidential and not disclose or make use of any
financial or other confidential information or Know-How
relating to the said business including but not limited to any
such confidential information about current or future affairs
or plans or about customers or other persons with whom the
Warrantor or the Company has or has had dealings or are or
have been concerned in relation to the business of the Company
7.1.5 he will not during the period of 1 year from Completion induce
or seek to induce away from the Company with a view to
engaging them in any competing business any current manager
employee consultant or representative employed or engaged by
it or them and for the purpose of this clause "current
director manager employee consultant or representative" shall
mean any person who is currently employed by the Company at
the time of Completion including all such persons who have
given notice to terminate their employment (whether or not in
accordance with the terms of their employment) and all such
persons who should have given such notice but failed to do so
before leaving their employment
7.1.6 he will not during the period of 1 year from Completion own
beneficially or otherwise or be interested in the share
capital of any company engaged in providing services of the
nature presently provided by the business of the Company
(other than the Purchaser or Eurotelecom Communications Inc.)
PROVIDED that nothing contained in this clause shall prevent the
Warrantor from at any time holding for investment purposes only any
class of securities for the time being listed or dealt in on any stock
exchange where its interest does not exceed 1% of all the issued
securities of that class
7.2 The Warrantor confirms that the covenants contained in clause 7.1 are
no greater than is reasonable or necessary for the protection of the
interests of the Purchaser and further that such covenants shall be
deemed to be entire separate severable and separately enforceable in
the widest sense from the other parts of clause 7.1 so that each
covenant shall be deemed to be a separate covenant notwithstanding the
fact that it appears in the same clause sub-clause or sentence as any
other covenant or is imposed by the introduction of a word or phrase
conjunctively with or disjunctively from or alternatively to other
words or phrases
8 NOTICES
8.1 Any notice to be given for the purposes of this Agreement shall either
be delivered personally or sent by first class recorded delivery post
Datapost or telefax (facsimile transfer)
8.2 The address for service of the Vendors shall be the address set out in
this Agreement or such other address as the Vendors may from time to
time notify for the purpose of this Clause
8.3 The address for service of the Company and the Purchaser shall be their
respective registered offices for the time being
8.4 A notice shall be deemed to have been served as follows:
8.4.1 if personally delivered at the time of delivery
8.4.2 if sent by recorded delivery post at the expiration of 48
hours after the same was delivered into the custody of the
postal authorities
8.4.3 if sent by Datapost at the expiration of 24 hours after the
same was delivered into the custody of the postal authorities
and
8.4.4 if sent by telefax (facsimile transfer) at the expiration of
12 hours after despatch
8.5 In proving such service it shall be sufficient to prove that personal
delivery was made or that the envelope containing such notice was
properly addressed and delivered into the custody of the postal
authorities as a pre-paid recorded delivery letter or Datapost letter
or that the telefax (facsimile transfer) was properly addressed and
despatched
9 GOVERNING LAW AND JURISDICTION
This Agreement shall be governed by and construed in all respects in
accordance with English law and the parties irrevocably agree that the
Courts of England and Wales shall have exclusive jurisdiction in
respect of any dispute suit action arbitration or proceedings which may
arise out of or in connection with this agreement.
10 PUBLICITY
No announcement or other disclosure concerning the sale and purchase of
the Shares or any ancillary matter shall be made before or after
Completion by the Warrantor (whether to the press employees customers
or suppliers) save in the Agreed Form between the parties or otherwise
as required by law or by the Council of the Stock Exchange
11 GENERAL
11.1 None of the rights or obligations under or pursuant to this Agreement
may be assigned or transferred to any other person without the written
consent of all the parties
11.2 This Agreement and the Schedules and other documents referred to herein
contains the whole agreement between the parties relating to the
transactions provided for in this Agreement and supersede all previous
agreements (if any) between such parties in respect of such matters
each of the parties to this Agreement acknowledges that in agreeing to
enter into this Agreement it has not relied on any representations or
warranties except for those contained in this Agreement
11.4 No failure or delay by the Warrantor or Purchaser in exercising any
claim remedy right power or privilege under this agreement shall
operate as a waiver nor shall any single or partial exercise of any
claim remedy right power or privilege preclude any further exercise
thereof or exercise of any other claim right power or privilege
IN WITNESS whereof this Agreement has been duly executed as follows:-
SCHEDULE 1
VENDORS' HOLDINGS AND CONSIDERATION
COLUMN 1 COLUMN 2 COLUMN 3 COLUMN 4 COLUMN 5
HOLDING OF NUMBER OF
NAME ADDRESS SHARES CONSIDERATION SHARES CASH CONSIDERATION
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ 110,000 $105,600
Ordsall
▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ 9 Bank Side 2250 90,000 $86,400
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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SCHEDULE 2
THE COMPANY
Name: Easy I P Limited
Registered Number: 3069875
Date of Incorporation: 19 June 1995
Registered Office: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇ ▇▇▇
Directors: ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
Secretary: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Auditors: ▇▇▇▇▇ & Co
▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
Accounting Reference Date: 31 March
Share capital: authorised: 5000
issued: 5000
Bankers:
SCHEDULE 3
THE PROPERTY
LEASEHOLD
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Office Premises at ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇ described
in the Lease.
SCHEDULE 4
DEED OF COVENANT
DATED: 1999
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PARTIES:
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1. "COVENANTOR": ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ of ▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇
2. "PURCHASER": Eurotelecom Corporation Limited CRN: 3184949 whose
registered office is at Britannia House, British Fields, ▇▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇
RECITAL
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This deed is entered into in accordance with an agreement ("the Agreement") made
between the Covenantor (1), ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ (2) and the Purchaser (3)
relating to the sale of the whole of the ordinary share capital of Easy I P
Limited ("the Company")
OPERATIVE PROVISIONS:
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1. DEFINITIONS
In this deed:-
1.1 the same meaning is given to words and expressions defined in
the Agreement except where otherwise provided or expressly
defined below;
1.2 "TAXATION" means all forms of taxation, duties and levies
whatsoever and whenever imposed, whether by governmental or
other authority and whether of the United Kingdom or
elsewhere, and (without limitation) includes:-
1.2.1 income tax, corporation tax, capital gains tax,
inheritance tax, stamp duty, rates, value added tax,
customs and other import duties and national
insurance contributions and any payment whatsoever
which the Company may be or become bound to make to
any person as a result of any enactment relating to
taxation and any other taxes, duties or levies
supplementing or replacing any of the above;
1.2.2 all costs, charges, interest, fines, penalties and
expenses incidental, or relating, to any Taxation;
1.3 "RELIEF" includes any relief, allowance, exemption, set-off or
deduction in computing, or against, profits, income or gains
of any description or from any source, or credit against
Taxation;
1.4 "LIABILITY TO TAXATION" means any liability of the Company to
make a payment in respect of Taxation but does not include:-
1.4.1 the loss, counteracting or clawing back of any Relief
which would otherwise have been available to the
Company;
1.4.2 the nullifying, cancellation or set-off of a right to
repayment of Taxation which would otherwise have been
available to the Company;
Provided however that, if the loss, counteracting or clawing
back of any Relief referred to in clause 1.4.1, or the
nullifying, cancellation or set-off of a right to repayment as
referred to in clause 1.4.2 results in the Company suffering a
liability to make a payment in respect of Taxation, then the
liability shall itself be a Liability to Taxation for the
purposes of this deed;
1.5 "CLAIM FOR TAXATION" includes any notice, demand, assessment,
letter or other document issued, or action taken, by or on
behalf of the Inland Revenue or Customs and Excise authorities
or any other statutory or governmental authority or body
whatsoever in any part of the world, whereby it appears that
the Company is, or may be subject to a Liability to Taxation;
1.6 "FINAL DETERMINATION" means, in relation to a Claim for
Taxation where there is an appeal against that assessment:-
1.6.1 an Agreement under TMA s54 or any legislative
provision corresponding to that section; or
1.6.2 a decision of a court or tribunal from which either
no appeal lies or in respect of which no appeal is
made within the prescribed time limit.
2. COVENANTS
2.1 Subject as provided below, the Covenantor covenants with the
Purchaser to pay to the Purchaser an amount equal to:-
2.1.1 any Liability to Taxation;
2.1.2 any settlement of a Claim for Taxation; and
2.1.3 the costs incurred by the Company in relation to any
demands, actions, proceedings and claims in respect
of any such Liability to Taxation or Claim for
Taxation.
2.2 The covenant in clause 2.1 shall apply only where the
Liability to Taxation or the Claim for Taxation:-
2.2.1 results from or is made wholly or partly in respect
of or in consequence of any acts, omissions or
transactions whatsoever of the Company, or of the
Covenantor, occurring or entered into on or before
the date of this deed; or
2.2.2 results from, or is calculated by reference to, any
actual or deemed income, profits or gains earned,
received or accrued, or deemed to have been earned,
received or accrued on or before that date; or
2.2.3 results from, or is calculated by reference to, any
dividend or distribution paid or made, or deemed to
have been paid or made, before that date.
2.3 If the Purchaser is satisfied that any payment due from the
Covenantor will be, or has been, subject to a Liability to
Taxation, it shall be entitled to receive from the Covenantor
on demand such amount as will ensure that the net receipt,
after Taxation, to the Purchaser in respect of the payment is
the same as it would have been were the payment not subject to
Taxation in the hands of the Purchaser.
3. EXCLUSIONS
3.1 The covenant in clause 2.1 shall not apply to any Liability to
Taxation or Claim for Taxation:-
3.1.1 to the extent that an appropriate provision or
reserve was made in the Last Accounts or any earlier
accounts of the Company;
3.1.2 for which the Company is, or may become, liable
wholly or primarily as a result of transactions in
the ordinary course of its business (but not
including the sale of any fixed assets or land held
for development) after the date of the Last Accounts
3.1.3 to the extent that the Liability or Claim arises as a
result only of the appropriate provision or reserve
in the Last Accounts being insufficient by reason of
any increase in rates of Taxation made after the date
of the Agreement.
3.2 This Deed is subject to the provisions of Schedule 7 of the
Agreement which shall apply to limit and regulate the rights
of the parties under this Deed
4. MITIGATION
4.1 When the Covenantor has satisfied an obligation under this
deed to pay the Purchaser in respect of a Liability to
Taxation and the Company has (whether by operation of law,
contract or otherwise) a right of reimbursement (including by
way of indemnity) against any other person or persons in
respect of the Liability to Taxation, the Purchaser shall (so
far as it reasonably can) procure that the Company shall take
all reasonable steps to enforce the right, and shall give
credit to the Covenantor for any sum recovered by the Company
(net of Taxation) by reason of the right, or shall so far as
possible, at the request and expense of the Covenantor,
procure the Company to assign the right to the Covenantor, in
such form as they shall reasonable require.
5. CONDUCT OF CLAIMS
5.1 The Purchaser shall notify the Covenantor in writing of any
Claim for Taxation which comes to its notice, whereby it
appears that the Covenantor is, or may become, liable to pay
the Purchaser under this deed. Where a time limit for appeal
applies to the Claim, the notification shall be given as soon
as reasonably possible after the date on which the Claim comes
to the notice of the Purchaser but, where no time limit
applies or the period to which the limit relates has not
commenced, the notification shall be given within fifty six
days of that date.
5.2 The Purchaser shall give such information and assistance in
connection with the affairs of the Company as the Covenantor
may reasonably request in relation to any Claim for Taxation.
5.3 Subject to clause 5.4 the Purchaser shall (so far as it
reasonably can) procure the Company, at the expense of the
Covenantor to take such action to contest any Claim for
Taxation to which this deed applies as the Covenantor may
reasonably require.
5.4 The Covenantor shall at the request of the Company, provide,
to the reasonable satisfaction of the Company, security or
indemnities, or both, in respect of all the costs and expenses
of disputing any Claim for Taxation to which this deed
applies.
6. DATES FOR AND QUANTUM OF PAYMENTS
6.1 This clause shall apply solely for determining the date on
which any payments or repayment shall be made by or to the
Covenantor pursuant to this deed and (where expressly
provided) the amounts of the payments or repayments.
6.2 Subject to the provisions of Schedule 7 of the Agreement the
Covenantor shall make payment to the Purchaser to the extent
that, and on the date on which, the Company discharges or is
deemed to discharge a Liability to Taxation in respect of
which the Purchaser is entitled to be paid under this deed.
6.3 The Purchaser shall make a repayment to the Covenantor to the
extent that, and on the date on which, the Company receives
any repayment of any amount paid in respect of any Liability
to Taxation pursuant to clause 6.2. Any repayment to the
Covenantor pursuant to this clause 6.3 shall not prejudice the
rights of the Purchaser against the Covenantor in the event
that a further Liability to Taxation is imposed upon the
Company, whether in respect of matters to which the repayment
relate or otherwise.
6.4 For the purposes of clause 6.2, the Company shall be deemed to
discharge a Liability to Taxation:-
6.4.1 on the date on which the Company pays any Liability
to Taxation; or
6.4.2 on the date on which any Liability to Taxation would
have fallen due but for Reliefs, rights of repayment,
or other rights or claims of a similar nature to
which clause 4.1. applies.
6.5 For the purpose of clause 6.3, the Company shall be deemed to
receive a repayment:-
6.5.1 on the date on which the Company received a repayment
of Taxation to which clause 6.3 applies;
6.5.2 if and when the Company would have received a
repayment but for a Liability to Taxation in respect
of which the Purchaser is not entitled to be paid
under this deed;
6.5.3 if and when the Company would have received a
repayment had the Liability to Taxation been
discharged by a payment of Taxation; or
6.5.4 if and when the Company is able to obtain the benefit
of a reduction in its Liability to Taxation as a
result of the right to repayment.
6.6 Subject to the provisions of Schedule 7 of the Agreement upon
Final Determination of a relevant Claim for Taxation the
Covenantor shall promptly pay to the Purchaser such amount, or
further amount in addition to any sums already paid under this
deed, as is required to cover the full liability of the
Covenantor under this deed.
7. GENERAL
7.1 This deed shall be binding on the Covenantor and, where
relevant, his successors.
7.2 The benefit of this deed may be assigned to any person to whom
the Shares are transferred which is within the same group of
the Purchaser.
7.3 The provisions of the Agreement relating to notices shall
apply to any notice to be given under, or in connection with,
this deed.
7.4 The construction, validity and performance of this deed shall
be governed by the laws of England.
DELIVERED as a deed on the date of this document
SCHEDULE 5
WARRANTIES
ACCURACY OF INFORMATION
-----------------------
1.1 So far as the Warrantor is aware all information relating to the
business, activities, affairs, assets or liabilities of the Company
provided to the Purchaser or any of its employees, officers, agents or
advisers by the Warrantor in the course of the negotiations leading to
the execution of this Agreement was when given and is now true and
accurate in all material respects
1.2 So far as the Warrantor is aware there is no information relating to
the Company which renders any of the information referred to in
paragraph 1.1 above misleading
1.3 The information contained in Schedules 1,2 and 3 and in the Disclosure
Letter is true and accurate in all respects and is not misleading
1.4 There are no facts or circumstances known to the Warrantor and not
disclosed to the Purchaser in relation to the assets, business or
financial condition of the Company which in the opinion of the
Warrantor if disclosed, might reasonably be expected to affect the
decision of the Purchaser to enter into this Agreement
CONSTITUTION OF THE COMPANY
---------------------------
2.1 The Warrantor has no notice that the statutory books and minute books
of the Company have not been properly kept or that they contain
inaccurate and incomplete records of the matters which should be dealt
with in those books and no notice or allegation that any of them is
incorrect or should be rectified has been received by the Warrantor
2.2 The number of Shares set opposite the respective names of the Vendors
in column 3 of Schedule 1 are beneficially owned by him, are free from
all liens, charges and encumbrances or interests in favour of or claims
made by or which could be made by any other person, are fully paid and
together represent the entire allotted and issued share capital of the
Company
2.3 The copy of the memorandum and articles of association of the Company
annexed to the Disclosure Letter is true and complete and has embodied
in it or annexed to it a copy of every such resolution or Agreement as
is referred to in section 380(1) of the Companies Act and sets out in
full the rights and restrictions attaching to the share capital of the
Company
2.4 So far as the Warrantor is aware no person has the right (whether
exercisable now or in the future and whether contingent or not) to call
for the issue or transfer of any share or loan capital of the Company
under any option or other Agreement or otherwise howsoever
2.5 The Warrantor is not aware of any current notice that the Company has
not properly and punctually made all returns which it is required to
make to the Registrar of Companies, to any other governmental or
regulatory body and to any local authority
2.6 The Warrantor has no notice that due compliance has not been made with
all the provisions of the Companies Act in connection with the
formation of the Company, the allotment, issue, purchase and redemption
of shares, debentures and other securities in the Company, the
reduction of the authorised and issued share capital of the Company,
any amendment to the memorandum or articles of association of the
Company and the passing of resolutions and the payment of dividends by
the Company
2.7 So far as the Warrantor is aware the Company has at all times conducted
its business intra ▇▇▇▇▇, has not entered into any transaction ultra
▇▇▇▇▇ the Company or outside of the authority or powers of the
directors of the Company and is not in breach of the provisions of the
Articles
CAPACITY AND INTERESTS
----------------------
3.1 The Vendors have the requisite power and authority to enter into and
perform this Agreement and the Warrantor has the requisite power and
authority to enter into and perform the Deed of Covenant
3.2 The execution and delivery of and the performance by the Vendors and
the Warrantor of their respective obligations under this Agreement and
the Deed of Covenant will not so far as the Warrantor is aware:-
3.2.1 result in a breach of, or constitute a default under, any
Agreement, instrument or arrangement to which the Warrantor or
the Company is a party or by which the Warrantor or the
Company is bound; or
3.2.2 result in a breach of any order, judgment or decree of any
court or governmental agency to which the Warrantor or the
Company is a party or by which the Warrantor or the Company is
bound; or
3.2.3 result in a breach of the rules or requirements of any
professional body or trade association of which the Warrantor
is a member or by which the Warrantor is bound
3.3 With the exception of the Warrantor's loan account no indebtedness
(actual or contingent) is outstanding from and no contract or
arrangement exists between the Company and the Warrantor or any
director of the Company or any person connected with any the Warrantor
or director
3.4 Except as disclosed neither the Warrantor or person connected with the
Warrantor has any interest, direct or indirect, in any business which
competes or has competed or is in the future likely to compete with any
business now carried on by the Company nor does he intend to acquire
any such interest
3.5 Except in relation to his loan account the Warrantor is not entitled to
any claim of any nature against the Company, or any of its officers,
employees, principal customers or suppliers and the Warrantor has not
assigned to any third party the benefit of any such claim to which he
was previously entitled
ACCOUNTS
--------
4.1 So far as the Warrantor is aware the last Accounts:
4.1.1 have been prepared in accordance with generally accepted
accounting practice in the United Kingdom, comply with the
requirements of the Companies Act and of all relevant FRS's
4.1.2 are complete and accurate in all respects, properly show all
assets and liabilities (whether actual or contingent) of the
Company as at the Last Accounts Date and
4.1.3 show a true and fair view of the state of affairs and the
financial position of the Company as at and for the financial
year ended on the Last Accounts Date and of the profits or
losses of the Company for the financial year ended on the Last
Accounts Date
4.2 Without prejudice to the generality of the foregoing the Warrantor has
no notice that in the Last Accounts:-
4.2.1 depreciation of the fixed assets of the Company has not been
made at a rate sufficient to write down the value of such
assets to nil not later than the end of their useful working
lives and no fixed asset has attributed to it a value
exceeding its current market value at the Last Accounts Date;
4.2.2 except as disclosed the value attributed to stock and work-in-
progress does not exceed the lower of cost and net realisable
value at the Last Accounts Date. For the purposes of
ascertaining the net realisable value of stock at the Last
Accounts Date, unsaleable, defective, redundant and excessive
stock and stock which had been returned or rejected by a
customer or did not comply with the specification relating
thereto and all stock which had at the Last Accounts Date been
held for three months or longer has been written down to nil;
4.2.3 no proper provision or reserve (as appropriate) has been made
for all bad and doubtful debts, all liabilities and
obligations (actual, contingent or disputed) and all capital
commitments;
4.2.4 no provision or reserve (as appropriate) has been made for all
Taxation liable to be assessed on the Company or for which the
Company is accountable (whether primarily or otherwise) in
respect of income, profits or gains earned, accrued or
received on or before the Last Accounts Date or deemed to have
been or treated as earned, accrued or received for Taxation
purposes and/or for any event on or before the Last Accounts
Date, including distributions made down to the Last Accounts
Date or provided for in the Last Accounts; and
4.2.5 no full and proper provision or reserve (as appropriate) in
accordance with generally accepted accounting practice in the
United Kingdom and all relevant FRS's has been made in the
Last Accounts for all deferred Taxation of the Company
4.3 So far as the Warrantor is aware the bases and policies of accounting
of the Company adopted for the purpose of preparing the Last Accounts
are, subject to paragraph 4.1 above, the same as those adopted for the
purpose of preparing the audited accounts of the Company for the three
preceding accounting periods and none of the audited accounts of the
Company for the last five accounting periods were qualified by the
auditors
4.4 The Warrantor has no notice that the books of account and other
accounting records of the Company have been kept on anything other than
a consistent basis, are in its possession, made up to date and contain
the information required by law and generally accepted accounting
principles
4.5 The accounting reference date of the Company is and has at all times
been that stated in Schedule 2
BUSINESS SINCE THE LAST ACCOUNTS DATE
-------------------------------------
5.1 Since the Last Accounts Date in the opinion of the Warrantor and except
as disclosed:-
5.1.1 the Company has carried on its business in the ordinary and
usual course without any interruption in the nature, scope or
manner of its business;
5.1.2 other from for seasonal trends there has been no material
adverse change in the trading position or prospects of the
Company;
5.1.3 the Company has not acquired or agreed to acquire any asset
for a consideration which is higher than market value at the
time of acquisition and has not disposed of or agreed to
dispose of any asset for a consideration which is lower than
market value or book value, whichever is the higher, at the
time of disposal;
5.1.4 the Company has not assumed or incurred any material
liabilities (including contingent liabilities) otherwise than
in the ordinary and usual course of business;
5.1.5 except in the ordinary course of business the Company has not
assumed or incurred any liability or entered into any
commitment, involving expenditure in excess of (pound)10,000;
5.1.6 no distribution of capital or income has been declared, made
or paid in respect of any share in the capital of the Company
BORROWINGS AND BANK FACILITIES
------------------------------
6. The Company has no overdraft facility with its bankers and has no other
loan facilities
GUARANTEES AND INDEMNITIES
--------------------------
7. So far as the Warrantor is aware and except as indicated there is not
outstanding any guarantee, indemnity or security given by or for the
benefit of the Company
DEBTORS
-------
8.1 Each debt now owed to the Company is not subject to any counter-claim
or set-off, except to the extent of any provision or reserve in the
Last Accounts or in any previous audited accounts of the Company or in
the subsequent management accounts of the Company and no amount
included in the Last Accounts as owing to the Company at the Last
Accounts Date has been realised for an amount less than the value at
which it was included in the Last Accounts or has been released (in
whole or in part) or so far as the Warrantor is aware is, irrecoverable
in whole or in part
8.2 The Company has not granted credit terms exceeding thirty days
CUSTOMERS AND SUPPLIERS
-----------------------
9.1 No material customer or supplier of or to the Company has during the
last twelve months ceased or indicated an intention to cease (or to
reduce significantly the volume of) trading with the Company
9.2 The Last Accounts include full and proper provision for all costs and
charges payable by the Company as at the Last Accounts Date and no cost
or expense will arise relative to any period up to the Last Accounts
Date which is not provided for in the Last Accounts
9.3 The Company has no written Standard terms of business
OWNERSHIP AND CONDITION OF ASSETS
---------------------------------
10.1 Except for assets disposed of by the Company in the ordinary course of
trading and goods supplied subject to retention of title, the Company
is the owner of and has good and marketable title to all fixed assets
included in the Last Accounts and all assets which have been acquired
by the Company since the Last Accounts Date, all of which assets are in
the Company's possession and under its control and subject as aforesaid
there is not now outstanding any charge, option, lien, pledge or
encumbrance (or agreement to grant any such over the whole or any part
of the undertaking, property or assets of the Company nor any right to
acquire such save for those items the subject of the hire purchase,
leasing or rental agreements referred to in the Disclosure Letter
10.2 The Warrantor has no notice that any plant and machinery (including
fixed plant and machinery), vehicles and office equipment used by the
Company in connection with its business are in other than good repair
and condition and are capable of being efficiently and properly used in
connection with the business of the Company and so far as the Warrantor
is aware none is dangerous, inefficient, obsolete or in need of renewal
or replacement
10.3 The schedule of plant and machinery a copy of which is annexed to the
Disclosure Letter sets out a complete and accurate record of the plant
and machinery and vehicles owned or used by the Company
10.4 The Company's stock is in good and marketable condition, is capable of
being sold by the Company in the ordinary course of its business
without any rebate, discount or allowances (other than normal rebates,
discounts or allowances granted to customers)
10.5 There are no maintenance contracts in force and effect in respect of
all the Company's assets
INSURANCE
---------
11.1 Except as shown in the Disclosure Letter all the assets of the Company
which are of an insurable nature are at the date of this Agreement
insured to their full market value against fire and other risks
normally insured against by companies carrying on similar businesses or
owning property of a similar nature and the Company is now adequately
covered against accident, third party liability, injury, damage and
other risks normally covered by insurance by such companies. In respect
of all such insurances:-
11.1.1 all premiums have been duly paid to date;
11.1.2 all the policies are in force and have not been avoided;
11.1.3 there are no special or unusual terms or restrictions and the
premiums payable are not in excess of the normal rates; and
11.1.4 So far as the Warrantor is aware no claim is outstanding and
the Warrantor has no notice of any circumstances that exist
which may give rise to any claim
GRANTS
------
12. So far as the Warrantor is aware the Company has not applied for any
investment grant, employment subsidy or other similar payment and no
such grant, subsidy or payment paid or due to be paid to the Company is
liable to be refunded or withheld in whole or in part in consequence of
any action or omission of the Company
COMPLIANCE WITH LAWS
--------------------
13. Except as disclosed the Warrantor has no notice that the Company or its
officers or employees in the course of their respective duties to the
Company have done or omitted to do anything in breach of the law of the
United Kingdom or of any foreign country in which the Company conducts
business
LICENCES AND CONSENTS
---------------------
14. The Warrantor has no notice that any licences, consents, approvals,
permissions, permits and authorities (public and private) necessary or
desirable for the carrying on of the business of the Company
effectively in the places and in the manner in which such business is
now carried on have not been obtained and all such licences, consents,
approvals, permissions, permits and authorities are valid and
subsisting and, so far as the Warrantor is aware there is no reason why
and no facts or circumstances which would be likely to give rise to any
reason why any of them should be suspended, cancelled or revoked or not
renewed
LITIGATION
----------
15 So far as the Warrantor is aware and except as disclosed:-
15.1 The Company is not engaged in any litigation or arbitration proceedings
and no litigation or arbitration proceedings are pending or threatened
by or against the Company, nor are there any facts or circumstances
known to the Warrantor which may give rise to any litigation or
arbitration proceedings being commenced by or against the Company
15.2 Neither the Company nor any of its officers is being prosecuted for any
criminal offence, there are no such prosecutions pending or threatened
and there are no facts or circumstances which may give rise to any such
prosecution
15.3 No litigation or arbitration proceedings commenced by or against the
Company or which have been threatened to be so commenced have been
settled or compromised during the period of five years ending on the
date of this Agreement in respect of amounts exceeding in aggregate
(pound)1,000
15.4 The Company is not subject to any order or judgment given by any court,
governmental agency or other regulatory body and is not a party to any
undertaking or assurance given to any court, governmental agency or
other regulatory body which is still in force nor are there any facts
or circumstances known to the Warrantor which may result in the Company
becoming subject to any such order or judgment or being required to be
a party to any such undertaking or assurance
15.5 There have been no investigations of, or disciplinary proceedings made
against, the Company or any of its officers or employees, no such
investigations or disciplinary proceedings are currently pending or
threatened and there are no facts or circumstances known to the
Warrantor which may give rise to such investigations or proceedings
COMPETITION LAW MATTERS
-----------------------
16 So far as the Warrantor is aware and except as disclosed:
16.1 the Company is not and has not been a party to any agreement as defined
in the Restrictive Trade Practices Act 1976 ("the RTPA") which has been
furnished to the Director General of Fair Trading as provided for in
the RTPA or which is or was subject to registration pursuant to the
RTPA and which has not been so furnished
16.2 The Company has not been and is not a party to any agreement or
concerted practice which infringes Article 85 of the EEC Treaty and is
not in contravention of any regulation or other enactment made under
Article 87 of the EEC Treaty
16.3 No action, practice or course of conduct now or previously done or
carried on by the Company and no Agreement to which the Company is or
was a party or any part of any such agreement:-
16.3.1 is or has been the subject of any investigation or reference
under the Competition ▇▇▇ ▇▇▇▇; or
16.3.2 is or was unlawful by virtue of the Resale Prices ▇▇▇ ▇▇▇▇; or
16.3.3 is or was an abuse of a dominant position under Article 86 of
the EEC Treaty
16.4 The Warrantor has not at any time received, nor has the Warrantor any
grounds for believing that the Company has received or that the
Warrantor or the Company may receive, any process, notice,
communication or any formal or informal request for information with
reference to any actual or proposed agreement, arrangement, concerted
practice, trading policy or practice, course of conduct or activity of
the Company from the Director General of Fair Trading, the Monopolies
and Mergers Commission, the Secretary of State for Trade and Industry,
the commission of the European Communities, the Restrictive Practices
Court or from any other person or body (wherever situated) whose task
it is to investigate, report or decide upon matters relating to
monopolies, mergers or anti-competitive agreements or practices nor has
anything done or to be done or proposed to be done by the Company been
the subject of any report, decision, order, judgment or injunction
made, taken or obtained by any of such persons or bodies, nor has the
Company given or been the subject of any undertakings or assurances
given (directly or indirectly) to any such persons or bodies
16.5 The Company has not been party to any Agreement, practice or
arrangement which, in whole or in part, contravenes the provisions of
the Trade Descriptions Acts 1968 or the Consumer Credit ▇▇▇ ▇▇▇▇
TRADING AND CONTRACTUAL ARRANGEMENTS
------------------------------------
17 So far as the Warrantor is aware and except as disclosed:-
17.1 The Company is not and never has been a party to:-
17.1.1 any partnership, joint venture, European Economic Interest
Group or consortium arrangement or agreement or any agreement
for sharing commissions or other income;
17.1.2 any agreement or arrangement which is liable to be terminated
by another party or under which rights of any person are
liable to arise or be affected as a result of any change in
the control, management or shareholders of the Company;
17.1.3 any agreement or arrangement of a loss making nature (this is
to say, now known to be likely to result in a loss on
completion of performance);
17.1.4 any agreement containing covenants limiting or excluding its
right to do business and/or to compete in any area or in any
field or with any person, firm or company;
17.1.5 any agreement or arrangement of an unusual or abnormal nature
or entered into otherwise than on an arm's length basis in the
ordinary and usual course of the Company's business;
17.1.6 any agreement or arrangement which cannot readily be fulfilled
or performed by the Company in accordance with its terms
without undue or unusual expenditure or effort;
17.1.7 any agreement or arrangement suffering from any invalidity or
in respect of which there are grounds for determination,
rescission, avoidance or repudiation by any other party; or
17.1.8 any agreement or arrangement which involves payment by
reference to fluctuations in the index of retail prices or any
other index, or in the rate of exchange for any currency
17.2 No offer, tender or the like given or made by the Company on or before
the date of this Agreement and still outstanding is capable of giving
rise to a contract merely by a unilateral act of another person
17.3 The Company has received no notice that any products manufactured sold
or supplied by it are, or were or will become in any material respect
faulty or defective or do not comply in any material respect with any
warranties or representations expressly or impliedly made by the
Company or with all applicable regulations standards and requirements
17.4 The Company is not a member of any trade business or similar
association
TITLE DEEDS
-----------
18. So far as the Warrantor is aware and except as disclosed all documents
which in any way affect the right, title or interest of the Company in
or to any of its property, undertakings or assets and all agreements to
which the Company is a party are in the possession of the Company and
are properly stamped
POWERS OF ATTORNEY
------------------
19. So far as the Warrantor is aware the Company has not given a power of
attorney and no person has any authority (express, implied or
ostensible) which is still outstanding or effective to enter into any
contract or commitment or to do anything on its behalf other than any
authority to employees to enter into routine trading contracts in the
normal course of their duties and to executive directors
INSOLVENCY
----------
20. The Warrantor has not notice that:
20.1 a receiver or administrative receiver has been appointed of the whole
or any part of the assets or undertaking of the Company
20.2 an administration order has been made in relation to the Company or a
petition for such an order has been presented
20.3 a proposal for a voluntary arrangement between the Company and its
creditors (or any class of them) has been made to or is in the
contemplation of the Company
20.4 a petition has been presented, or order has been made or resolution has
been passed for the winding-up of the Company
20.5 the Company has stopped payment to its creditors or is it insolvent or
unable to pay its debts as and when they fall due
20.6 an unsatisfied judgment is outstanding against the Company
OFFICERS AND EMPLOYEES
----------------------
21.1 Those persons named as such in Schedule 2 are the only directors and
the secretary of the Company and the particulars set out in Schedule 2
are true and complete
21.2 No person is or (so far as the Warrantor is aware) has been a shadow
director of the Company
21.3 The particulars shown in the schedule of employees annexed to the
Disclosure Letter list all the employees of the Company, are true and
accurate and show in relation to each employee and officer:-
21.3.1 all cash remuneration payable (including accrued holiday pay);
21.3.2 details of all benefits receivable otherwise than in cash; and
21.3.3 details of any profit sharing, incentive and bonus
arrangements in which he participates (whether or not such
arrangements are legally binding on the Company)
21.4 Except as disclosed no change in the remuneration, benefits and
arrangements shown in the schedule of employees is due or expected
within six months from the date of this Agreement and no request for
any such change has been received
21.5 There is not outstanding any contract of service between the Company
and any of its directors, officers or employees which is not terminable
by the Company without damages or compensation (other than any
compensation payable by statute) on three month's notice given at any
time
21.6 No employee of the Company has given notice to the Warrantor
terminating his contract of employment or is under notice of dismissal
and no amount due to or in respect of any employee or former employee
of the Company is in arrear and unpaid other than his salary for the
month current at the date of this Agreement
21.7 There are no agreements or other arrangements (whether or not legally
binding) between the Company and any trade union or other body
representing employees
21.8 There is no dispute between the Company and any trade union or other
organisation formed for a similar purpose existing, pending or
threatened and there is no collective bargaining Agreement or other
arrangement (whether binding or not) to which the Company is a party
21.9 The Warrantor has no notice that the Company has at any time not
complied with all its obligations under statute and otherwise
concerning the health and safety at work of its employees and the
Warrantor has no notice that there are any claims capable of arising or
threatened or pending by any employee or third party in respect of any
accident or injury which are not fully covered by insurance
21.10 So far as the Warrantor is aware the Company is not under any legal
liability to pay pensions, gratuities, superannuation allowances or the
like to any of its past or present directors, officers or employees or
their dependants nor is it in the habit of making ex gratia or
voluntary payments by way of superannuation allowance or pension and
except as disclosed there are no pension schemes or arrangements for
payment of pensions or death benefits or similar arrangements in
operation or contemplated in relation to the Company and no associated
costs or expenses will arise by reference to any pension scheme or
arrangements at any time operated by the Company
INTELLECTUAL PROPERTY RIGHTS
----------------------------
22.1 The Company owns no intellectual property rights
22.2 Other than rights to re-sell computer software and hardware products no
licence, permission or other right has been granted to the Company by
any third party in respect of any intellectual property, including for
the avoidance of doubt any intellectual property in computer software
and hardware
22.3 So far as the Warrantor is aware the Know-How has not been disclosed to
any person in whole or in part (other than to employees of the Company
and the Purchaser and its advisers and associates) and there is no
claim that has been made by any person alleging that the Know-How has
been disclosed to the Company in circumstances amounting to a breach of
confidence
22.4 The Warrantor has no notice that any of the processes, products or
activities of the business of the Company infringes any right of any
other person relating to intellectual property or involves the
unlicensed use of information confidential to any person or gives rise
to a liability for any royalty or similar payment
22.5 The Company does not trade under any name other than its full corporate
name
23 ENVIRONMENTAL MATTERS
23.1 The Warrantor has no notice that the Company is in breach of the terms
and conditions of Environmental Laws to which it is subject
23.2 The Company has not applied for and obtained any Environmental Permits
23.3 The Warrantor has received no notice that the operation of the business
of the Company or any asset owned or used by the Company involves the
use of, or the release or discharge into the Environment of, or
contains, any dangerous, radioactive, toxic or hazardous substance or
article prescribed or specified under any Environmental Laws to which
the Company is subject as being prohibited or restricted or that
release or discharge of any such substance or article exceeds or has
exceeded any allowable or permissible quotas or limits prescribed or
specified under any Environmental Laws to which the Company is subject
23.4 The Warrantor has not notice that there is any asset now owned or used
by the Company which contains any dangerous, radioactive, toxic or
hazardous substance or article or any waste or other pollutant or
contaminant
23.5 The Warrantor has not notice that there is any civil, criminal or
administrative action, claim, investigation or other proceedings
threatened against the Company under the Environmental Laws to make
good, repair, re-instate or clean up any land or other asset now owned,
occupied or used by the Company or of any act, omission, event or
circumstances giving rise or likely to give rise in the future to any
such action, claim, investigation, proceedings or suit or any such
liability or of other liabilities under any Environmental Laws to which
the Company is subject
23.6 So far as the Warrantor is aware no protest, boycott, demonstration,
adverse publicity campaign or other action is being conducted or
threatened by any non-governmental organisation or pressure group in
relation to the Company or its business, products, operations or
activities
23.7 DEFINITIONS
For the purposes of the Warranties in paragraphs 23.1 to 23.6:
"Environment" means any land, including, without limitation, surface
land and subsurface strata, sea bed or river bed under any water as
defined below and any natural or man-made structures; water, including,
without limitation, coastal and inland waters, surface waters and
ground waters and water in drains and sewers; and air, including,
without limitation, air within buildings and other natural or man-made
structures above or below ground;
"Environmental Laws" means all or any applicable law (whether civil,
criminal or administrative), common law, statute, statutory instrument,
treaty, regulation, directive, decision, by-law, circular, code, order,
notice, demand, decree, injunction, resolution or judgment of any
government, quasi-government, supranational, federal, state or local
government, statutory or regulatory body, court, agency or association,
or any other person or body in any jurisdiction with regard to the
pollution or protection of the Environment or harm to or the protection
of human health or the health of animals or plants including, without
limitation, laws relating to public and workers' health and safety,
emissions, discharges or releases of chemicals, genetically modified
organisms, noise or any other pollutants or contaminants, or
industrial, radioactive, dangerous, toxic or hazardous substances, or
wastes (whether in solid, semi-solid or liquid form or in the form of a
gas or vapour into the Environment or otherwise relating to the
manufacture, processing, use, treatment, storage, distribution,
disposal, transport or handling of such substances or wastes;
"Environmental Permits" means all or any permits, licences, covenants,
approvals, certificates, qualifications, specifications, resignations
and other authorisations, and the filing of all notifications, reports
and assessments required under any Environmental laws for the operation
of the business or the occupation or use of any of the Properties
24 PROPERTY WARRANTIES
24.1 TITLE
24.1.1 The Property comprises all the property owned, occupied or
otherwise used in connection with the business of the Company
24.1.2 The Property is occupied or otherwise used by the Company in
connection with its businesses under the terms of the Lease
24.1.3 The information contained in Schedule 4 and the Lease is true
and accurate in all respects
24.2 ENCUMBRANCES
The Company's interest in the Property is:
24.2.1 free from any mortgage, debenture, charge, rent charge, lien
or other encumbrance securing the repayment of monies or other
obligation or liability of the Company
24.2.2 not subject to any outgoings, other than general rates, water
rates, and insurance premiums and, in the case of leasehold
properties, rent and service charges
24.2.3 not subject to any restrictive covenants, stipulations,
easements, profits a prendre, wayleaves, licences, grants,
restrictions, overriding interests or other such rights vested
in third parties
24.2.4 are not subject to any option, right of pre-emption or right
of first refusal
24.3 LEASEHOLD PROPERTIES
24.3.1 The Company has paid the rent and observed and performed the
covenants on the part of the tenant and the conditions
contained in the Lease and the last demand (or receipts for
rent if issued) was unqualified, and the Lease is valid and in
full force
24.3.2 No licences, consents and approvals from the landlords have
been obtained
24.3.3 There is no rent review under the Lease currently in progress
24.3.4 The Warrantor has received no notice of any outstanding and
unobserved or unperformed obligation necessary to comply with
any notice or other requirement given by the landlord under
the Lease
24.3.5 Except as disclosed by the Lease there is no obligation to
reinstate the Property by removing or dismantling any
alteration made to it by the Company
24.4 TENANCIES
24.4.1 The Property is held subject to and with the benefit of the
rights of occupation as set out in the Disclosure Letter and
none other
SCHEDULE 6
WARRANTIES RELATING TO TAXATION
1 GENERAL
So far as the Warrantor is aware:-
1.1 The Company has made all returns it is required by law to make. All
returns, claims for reliefs and allowances, applications and
computations have been properly and punctually submitted by the Company
to all relevant Taxation authorities (whether of the United Kingdom or
elsewhere) and such returns, claims, applications and computations are
complete, true and accurate, give full disclosure of all material facts
and circumstances and are not the subject of any question or dispute
nor are likely to become the subject of any question or dispute with
any such taxation authority
1.2 The Company is and always has been resident only in the United Kingdom
for taxation purposes. The Company is not liable to Taxation in any
jurisdiction other than the United Kingdom
1.3 There are no circumstances which could adversely affect the entitlement
of the Company to relief from, credit for or right of set-off against,
Taxation
1.4 All payments by the Company to any person which ought to have been made
under deduction of Taxation have been so made and the Company has (if
required by law to do so) accounted to the relevant taxation authority
for the Taxation so deducted
1.5 The Company has not entered into any of the transactions specified in
section 765 ICTA (migration etc of companies)
1.6 The Company is not liable as agent or lessee for any Taxation liability
of another person
1.7 No Taxation authority has agreed to operate any special arrangement
(being an arrangement which is not based on a strict and detailed
application of the relevant legislation or on generally published
statements of practice or generally published extra-statutory
concessions) in relation to the Company's affairs
1.8 There has not been any transaction, arrangement, event or omission
occurring after the Last Accounts Date:-
1.8.1 which has caused or will cause any expenditure (including any
payment of Taxation) incurred or deemed to have been incurred
for Taxation purposes by the Company not to qualify for all or
part of any relief, allowance, credit or deduction for
Taxation purposes which might be expected by the Purchaser to
be available to the Company; or
1.8.2 which has given rise or will give rise: (a) to income or gains
being deemed to arise to, or supplies being deemed to be made
by, the Company for Taxation purposes, or (b) to any Taxation
otherwise being assessable or chargeable on the Company when
the relevant income or gains do not in fact accrue to or the
relevant supplies are not in fact made by, the Company
1.9 There are set out in the Disclosure Letter with express reference to
this warranty full details of all matters relating to Taxation in
respect of which the Company (whether alone or jointly with any other
person) has or at Completion will have an outstanding entitlement or
obligation:-
1.9.1 to make any claim (including a supplementary claim) for relief
from Taxation;
1.9.2 to make any election for one type of relief, or one basis,
system or method of Taxation as opposed to another;
1.9.3 to make any appeal (including a further appeal) against an
assessment to Taxation;
1.9.4 to make any application for the postponement of payment of
Taxation; or
1.9.5 to submit any return or provide particulars or information to
any Taxation authority
1.10 No income has arisen in a territory outside the United Kingdom in
respect of which any claim under section 584 ICTA (unremittable
overseas income) has been made or is available to the Company
1.11 The Company has complied with all notices served on it by any taxation
authority and no such notice remains outstanding
1.12 The Company has duly and punctually paid all Taxation which it has
become liable to pay and it has never paid or become liable to pay any
penalty, fine or surcharge in connection with Taxation
1.13 The transactions contemplated by this Agreement are carried out for
bona fide commercial reasons and as far as the Vendors are concerned
such transactions do not have as their main object, or one of their
main objects, the obtaining of a tax advantage
1.14 Except as disclosed there are no facts or circumstances presently in
existence such that on or after Completion the Vendors would be liable
to the Company or the Purchaser under the terms of the Deed of Covenant
1.15 The Vendors have no knowledge that a charge to tax will arise on the
Company or the Purchaser merely as a result of entering into or
Completion of this Agreement
1.16 The Company has not had, and will not prior to Completion have, an
associated company within the meaning of Section 13 ICTA
2. DISTRIBUTIONS
So far as the Warrantor is aware:
2.1 The Company has not since the Last Accounts Date made or agreed to make
any distributions within the meaning of section 209 ICTA
2.2 The Company has not been concerned in any exempt distribution within
sections 213 to 218 ICTA (demergers) within the period of five years
preceding Completion
2.3 The Company has not issued any security (as defined in section 254(1)
ICTA) outstanding on Completion in circumstances such that any interest
or other payment payable in respect of it constitutes a distribution
under section 209 ICTA
2.4 The Company has not made any repayment of share capital to which
section 210(1) ICTA (bonus issue following repayment of share capital)
might apply
2.5 The Company has not issued any share capital or securities as paid up
other than by receipt of new consideration within the meaning of
section 254 ICTA
3. CAPITAL ALLOWANCE
So far as the Warrantor is aware:
3.1 The aggregate book value of each of the assets of the Company, on which
an entitlement to industrial building allowances or other allowances in
respect of capital expenditure has arisen under the CAA 1990, in or
adopted for the purposes of the Last Accounts does not exceed the
aggregate residue of expenditure or written-down value attributable to
such assets for the purposes of CAA 1990 and the aggregate book value
of plant and machinery allocated to a pool of plant and machinery on
which an entitlement to capital allowance has arisen under Part II CAA
1990 (machinery and plant) does not exceed the written-down value of
the qualifying expenditure in respect of each such pool under the CAA
1990
3.2 All expenditure incurred by the Company or which it may incur under any
subsisting commitment for the provision of machinery or plant has
qualified or will qualify (if not deductible as a trading expense of a
trade carried on by the Company) for writing down allowances under Part
II CAA 1990 (machinery and plant)
3.3 Since the Last Accounts Date nothing has happened as a result of which
there may be made against the Company a balancing charge under the CAA
1990; or any disposal value may be brought into account under section
24 CAA 1990 (writing down allowances and balancing requirements); or
there may be any recovery of excess relief within sections 46 or 47 CAA
1990 (recovery of excess relief); or a relevant event occurs within the
meaning of section 138 CAA 1990 (scientific research)
3.4 There is not, and there are no circumstances which could give rise to,
any dispute between the Company and any other person as to the
entitlement to capital allowances under sections 51 to 59 CAA 1990
(fixtures)
3.5 The Company has not made any election under section 37 CAA 1990 (short
life assets) nor has been taken to have made an election under
sub-section (8) (c) of that section
4. CAPITAL GAINS
So far as the Warrantor is aware:
4.1 The book value in or adopted for the purposes of the Last Accounts as
the value of each of the assets of the Company on the disposal of which
a chargeable gain or allowable loss could arise does not exceed the
amount deductible under section 38 TCGA (expenditure: general)
(excluding any indexation allowance) in respect of each such asset
4.2 The Company neither has an interest in nor has issued any deep discount
security, deep gain security or qualifying convertible security as
defined by paragraph 1(1) of Schedule 4 ICTA (deep discount
securities), paragraph 1 of Schedule 11, FA 1989 (deep gain securities)
or paragraph 2 of Schedule 8, FA 1990 (convertible securities)
respectively
4.3 No debt owed to the Company would on its disposal give rise to a
chargeable gain by reason of section 251 TCGA (disposals otherwise than
as original creditor)
4.4 The Company does not have any interest in qualifying corporate bond to
which Sections 116 and 117 TCGA (reorganisations, conversions,
reconstructions etc.) apply
4.5 No benefit under any policy of assurance has been acquired by the
Company which would on its disposal give rise to a chargeable gain by
reason of section 210 TCGA (disposals otherwise than as original
beneficial owner)
4.6 The Company does not have an interest in any assets which are wasting
assets within section 44 TCGA (wasting assets) and which do not qualify
for capital allowances
4.7 The Company has not made nor is entitled to make any claims under any
of sections 152, 153, 165, 172, 175, 242, 243 or 247 TCGA insofar as
such claims affect or would affect the chargeable gain or allowable
loss which would arise on a disposal by the Company of any of its
assets
4.8 The Company has not made nor is it entitled to make any claims or
election under either of section 24 TCGA (assets lost or destroyed) or
section 161 (3) or 161 (4) TCGA (appropriations to or from stock). The
Company has not, since the Last Accounts Date, appropriated any asset
forming part of its trading stock for any other purpose
4.9 The Company has not since the Last Accounts Date disposed of or
acquired any asset in circumstances such that the provisions of section
17 TCGA (disposals and acquisitions treated as made at market value)
could apply
4.10 The Company has not since the Last Accounts Date been a party to any
depreciatory transactions for the purpose of section 176 TCGA
(transactions in a group) or which could be treated as a depreciatory
transaction under section 177 TCGA (dividend stripping)
4.11 The Company has not since the Last Accounts Date been a party to any
value shifting arrangements under any of sections 29 to 34 TCGA (value
shifting)
4.12 The Company has not made nor is entitled to make any claims under
sections 48 or 280 TCGA (consideration due after time of disposal) to
pay by instalments tax on chargeable gains
4.13 No election has been made under section 35 TCGA (assets held on 31
March 1982) in respect of the assets of the Company
5. GROUPS OF COMPANIES
So far as the Warrantor is aware:
5.1 The Company is not and has never been treated for the purposes of
section 43 VATA (groups of companies) as a member of a group
5.2 The Company is not and never has been a 51 per cent subsidiary of any
person within the meaning of section 838 ICTA (subsidiaries) nor has or
has ever had a 51 per cent subsidiary as so defined
5.3 No tax-free benefit has ever been conferred either upon the Company or
upon any person connected with the Company within the meaning of
section 30 - 34 TCGA (value shifting). No scheme or arrangement has
been effected under which such a tax-free benefit will be so conferred
5.4 None of the Company's assets and no relevant asset has been materially
reduced in value within the meaning of section 30 TCGA (value
shifting). No scheme or arrangement has been effected under which there
will be such a reduction in value.
6. VALUE ADDED TAX
So far as the Warrantor is aware:
6.1 The Company is a registered and taxable person for the purposes of VATA
and has complied with and observed in all respects the terms of all
legislation, regulations, orders, provisions, directions, conditions
and notices relating to value added tax. The Company has maintained and
obtained accounts, appropriate or requisite for the purposes of value
added tax which are complete, correct and up-to-date
6.2 The Company:-
6.2.1 is not nor in the two years prior to Completion has been, in
arrears with any payments or returns or notifications under
the legislation, regulations, orders, provisions, directions,
conditions or notices relating to value added tax, or liable
to any forfeiture or penalty or interest or surcharge or to
the operation of any penalty, interest or surcharge provisions
contained in the same;
6.2.2 has not been required by H.M. Commissioners of Customs and
Excise to give security;
6.2.3 is not, and has not agreed to become, an agent, manager or
factor for the purposes of section 47 VATA (agents etc.) of
any person who is not resident in the United Kingdom;
6.2.4 has not made, and will not make prior to Completion, any
supplies that are exempt supplies; and
6.2.5 has not made any election under paragraph 2 (1) of Schedule
10, VATA (election to waive exemption) in respect of land in
which the Company now has any interest
6.3 The Company has not since the Last Accounts Date been, and will not
prior to Completion be, treated for Taxation purposes as having made
any supply of goods or services for the purposes of value added tax
where no supply has in fact been made by the Company, including without
limitation, deemed supplies under any of the following provisions:
section 8 VATA (supplies received from abroad); section 44 VATA
(supplies to groups); paragraph 6, Schedule 10, VATA (developers of
certain non-residential buildings); Value Added Tax (Cars) Order 1989
(self supply of motor cars); paragraph 14; or paragraph 3, Value Added
Tax (Self Supply of Construction Services) Order 1989 (self supply of
construction services)
6.4 The Company does not use any schemes made under any of the following
regulations: Value Added Tax (Supplies by Retailers) Regulations 1972
(special schemes for retailers); 523 VATA (cash accounting scheme); or
Value Added Tax (Annual Accounting) Regulations 1988 (annual accounting
scheme)
6.5 The Company is not for the purposes of paragraph 5(5) of Schedule 10,
VATA (developers of certain non-residential buildings etc.) the
developer of any building or work in respect of which the Company has
not made an election under paragraph 2(1) of that Schedule
6.6 The Company has not in the two years prior to Completion received a
surcharge liability notice under section 59 VATA (default surcharge) or
a penalty liability notice under section 64A VATA (persistent
misdeclarations)
7. CLOSE COMPANIES
7.1 The Company is a close Company
7.2 The Warrantor has not notice that the Company has failed in respect of
each accounting period ended on or before the Last Accounts Date but
within seven years prior to Completion to give full and accurate
disclosure to the Inland Revenue of all material facts and
circumstances
7.3 So far as the Warrantor is aware no apportionment under section 423
ICTA (appointment of undistributed income) has been made or threatened
against the Company, nor are there any circumstances that could give
rise to such an apportionment
7.4 So far as the Warrantor is aware the Company is not, nor has ever been,
liable to taxation under the provisions of sections 418 to 422 or
paragraph 10 of Schedule 19, ICTA (close companies)
7.5 So far as the Warrantor is aware the Company has never made any
transfer of the kind described in section 125 TCGA (transfer of assets
at undervalue)
7.6 So far as the Warrantor is aware the Company has never made any
transfer of value within the meaning of the Inheritance Tax ▇▇▇ ▇▇▇▇
7.7 Neither the assets owned by nor the shares of the Company are subject
to an outstanding Inland Revenue charge as defined in section 237
Inheritance Tax Act 1984
7.8 No circumstances exist, or but for section 204 (6) Inheritance Tax Act
1984 would exist, such that a power of sale could be exercised in
relation to any assets or shares of the Company pursuant to section 212
Inheritance Tax Act 1984 (contingent liability of transferee for unpaid
capital transfer tax or inheritance tax)
8. ANTI-AVOIDANCE
So far as the Warrantor is aware:
8.1 No transaction has been entered into or event occurred since the Last
Accounts Date in consequence of which the Company could be liable to
Taxation and/or a penalty or fine or to denial of a relief, exemption
or deduction pursuant to any of sections 34 to 37; 703 to 709; 729 to
738; ;747 to 767; 770 to 774; or 776 to 787 of ICTA or schedule 10
paragraph 14 (47)b TCGA
8.2 The Company has not carried out or been engaged in any transaction or
arrangement such that the law provides that there may be substituted
for the amount or value of the actual consideration given or received
(or to be given or received) by the Company any different amount or
value for Taxation purposes
8.3 In the three years prior to Completion there has not been a major
change in the nature or conduct of any trade or business carried on by
the Company such that could affect the ability of the Company to
utilise after Completion advance corporation tax or trading losses
under any of sections 245, 245A or 768 ICTA
8.4 No application has been made relating to the Company under the
provisions of any of:-
section 139 (5) TCGA (company reconstruction or amalgamation);
section 215 ICTA (demergers);
section 225 ICTA (purchase of own shares);
section 707 ICTA (transactions in securities);
section 765 ICTA (migration of companies);
section 776 (11) ICTA (transactions in land);
section 38 TCGA (reconstructions or amalgamations);
the Inland Revenue press releases of 16th July 1984 relating to
controlled foreign companies or of 9th May 1990 relating to Employee
Share Ownership Plans (or any subsequent amendment or revision of such
press releases)
9. EMPLOYEES
So far as the Warrantor is aware:
9.1 The Company has received no notifications or notices under section 166
ICTA (benefits in kind: notices of nil liability)
9.2 The Company does not operate any scheme approved under section 202 ICTA
(charities: payroll deduction scheme) or registered under Chapter III
of Part V ICTA (profit-related pay)
9.3 No officer or employee of the Company participates in any scheme
approved under Schedule 9 ICTA (approved share option and profit
sharing schemes) or is a beneficiary or potential beneficiary of a
qualifying employee share ownership trust as defined in Schedule 5 FA
1989 (employee share ownership trusts)
9.4 Since the Last Accounts Date the Company has not received any payment
to which section 601 to 603 ICTA applies (pension scheme surpluses:
payments to employers)
9.5 All sums payable under the existing arrangements for remunerating
officers and employees and rewarding persons rendering services to the
Company are deductible for the purposes of section 74 or 75 ICTA
(deductions)
10. STAMP DUTIES
So far as the Warrantor is aware:
10.1 There is no instrument which is necessary to establish the Company's
title to any right or asset which is liable to stamp duty in the United
Kingdom or elsewhere but which has not been duly stamped or which would
attract stamp duty if brought within the relevant jurisdiction
10.2 The Company has complied in all respects with the provisions of Part
IV, FA 1986 (stamp duty reserve tax) and with any regulations made
under the same and the Company is not and will not become liable to pay
stamp duty reserve tax by reference to any Agreement which fell within
the terms of section 87(1) of that Act
11. NATIONAL INSURANCE
So far as the Warrantor is aware:
The Company has paid all national insurance contributions for which it
is liable and has kept proper books and records relating to the same
and has not been a party to any schemes or arrangement to avoid any
liability to account for primary or secondary national insurance
contributions.
SCHEDULE 7
WARRANTOR PROTECTION PROVISIONS
A. LIMITATION OF LIABILITY UNDER THE WARRANTIES AND DEED OF COVENANT
1. Notwithstanding anything to the contrary contained in clause 6 of this
Agreement and the Deed of Covenant the Warranties and the covenants
contained in the Deed of Covenant shall be qualified by the provisions
of the Schedule and in the event of any inconsistency between the
provisions of this Schedule and the provisions of clause 6 or Schedule
5 and or of the Deed of Covenant the provisions of this Schedule shall
prevail
2. The Warrantor shall not be liable in respect of any claim under the
Warranties or the covenants contained in the Deed of Covenant to the
extent that the matter or matters giving rise to such claim are
disclosed in the Disclosure Letter and/or within the actual or
constructive knowledge of the Purchaser its agents or advisers
3. The liability of the Warrantor in respect of any breach of the
Warranties and of the covenants contained in the Deed of Covenant shall
be limited as follows:
3.1 The aggregate maximum liability of the Warrantor in respect of
all and any claims under the Warranties and under the Deed of
Covenant shall in no event exceed(pound)120,000
3.2 The Warrantor shall not be liable in respect of any claim
under the Warranties or under the Deed of Covenant where the
amount of such claim does not exceed(pound)500
3.3 The Warrantor shall not be liable in respect of all and any
claims made by the Purchaser under the Warranties or under the
Deed of Covenant unless and until the aggregate cumulative
liability of the Warrantor in respect of all and any such
claims (ignoring for those purposes all and any claims in
respect of which the Warrantor does not have any liability
pursuant to the provisions of cause 3.2 above) exceeds
(pound)5,000 in which event the Warrantor shall be liable only
for the excess
4. The Warrantor shall not be liable in respect of any claim under the
Warranties or under the Deed of Covenant unless it shall have been made
in the case of the Deed of Covenant before the expiry of 6 years from
the date of the Last Accounts and in the case of all other Warranties
before the expiry of 2 years from Completion
5. No claim under the warranties or under the Deed of Covenant shall be
deemed to have been made unless notice of such claim has been made in
writing to the Warrantor specifying in reasonable detail the event of
default to which the claim relates and the nature of the breach and the
amount claimed
6. Any claim in respect of which notice shall be given in accordance with
clause 5 above shall be deemed to have been irrevocably withdrawn and
lapsed (not having been previously satisfied settled or withdrawn) if
proceedings in respect of such claim have not been issued and served on
the Warrantor not later than the expiry of the period of 12 months
after the date of such notice
7. Where the Purchaser and/or the Company 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 or under the Deed
of Covenant then the Purchaser shall procure that reasonable steps are
taken to enforce such recovery and if any sum is so recovered then
either the amount payable by the Warrantor in respect of that claim
shall be reduced by an amount equal to the sum so recovered (less the
reasonable costs and expenses of recovering it and any taxation payable
by the Purchaser or the Company as a result of its receipt) or (if an
amount shall already have been paid by the Warrantor in respect of that
claim) there shall be repaid to the Warrantor an amount equal to the
amount so recovered (less the reasonable costs and expenses of its
recovery and any taxation payable by the Purchaser or the Company as a
result of its receipt) or (if less) the amount of such payment
8. Without prejudice to the generality of clause 7 above the provisions of
clause 7 shall apply:
8.1 where 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 Deed of Covenant
8.2 to the extent that the Warrantor is liable to the Purchaser
under the Warranties or under the Deed of Covenant by reason
of an obligation of the Company to pay advance corporation tax
and the Company obtains the benefit or reduction in liability
to mainstream corporation tax by reason of such payment then
the Purchaser shall procure that the Company shall make all
such claims and elections as will result in such benefit or
reduction obtained as soon as reasonably possible
9. The Warrantor shall have no liability (or such liability shall be
reduced) in respect of any claim for breach of any of the Warranties or
in respect of a claim under the Deed of Covenant
9.1 if and to the extent that provision or reserve for or in
respect of the liability or other matter giving rise to such
claim has been made in the Last Accounts of the Company or in
previous audited accounts of the Company or in subsequent
management accounts
9.2 if and to the extent any liability of the Company included in
its Last Accounts or in previous audited accounts of the
Company or in subsequent management accounts of the Company
has been discharged or satisfied below the amount attributed
to it or included in respect of it in those audited accounts
9.3 if and to the extent any contingency or other matters provided
against in the Last Accounts of the company has in the event
been over-provided for
9.4 if and to the extent that any breach of the Warranties or
liability under the Deed of Covenant occurs as a result of or
is otherwise attributable to the Purchaser or the Company
disclaiming any part of the benefit of capital or other
allowance against taxation claims or proposed to be claimed on
or before the date of the Agreement
9.5 if and to the extent that such claim is attributable to any
voluntary act or omission of or transaction or arrangement
carried out by the Purchaser or the Company, after Completion
otherwise than in the ordinary course of business
9.6 if and to the extent that such claim would not have arisen or
would have been reduced or eliminated but for the failure or
omission on the part of the Purchaser of the Company to make
any claim election surrender or disclaimer or give notice or
consent or to do any other thing under the provisions of any
enactment or regulation relating to taxation after Completion
the making giving or doing of which was taken into account in
computing the provision for taxation in the Last Accounts or
in previous audited accounts of the Company or in subsequent
management accounts
9.7 if and to the extent that such claim relates to a liability
for Taxation which would not have arisen but for any winding
up or cessation after Completion of any trade or business
carried on by the Company
9.8 if and to the extent such claim would not have arisen but for
a change in the nature of the business of and/or accounting
policy or practice of the Company after Completion
10. The amount of any claim for breach of the Warranties or under the deed
of Covenant shall take into account the amount of any relief from
Taxation arising by virtue of the loss or damage in respect of which
the claim was made
11. Nothing in this Schedule shall derogate from the Purchaser's obligation
to mitigate any loss which it suffers in consequence of a breach of the
Warranties or in respect of which a claim may be made under the Deed of
Covenant
12. For the avoidance of doubt the Purchaser shall not be entitled to
recover damages in respect of any claim for breach of the Warranties
and/or of the covenants contained in the Deed of Covenant where to do
so would involve recovery more than once in respect of the same loss or
damage
13. The Purchaser shall as soon as it or the Company becomes aware of any
matter or event ("the Matter") which might give rise to a claim under
the Warranties or the Deed of Covenant immediately give notice in
writing to the Warrantor of the Matter
14. The Purchaser shall provide and shall procure that the Company will
provide to the Warrantor and the Warrantor's professional advisers
reasonable access to premises and personnel and to any relevant assets
documents and records within their power possession or control for the
purpose of investigating the Matter and enabling the Warrantor to take
such action as referred to in Clause 15 below and shall allow the
Warrantor and his advisers to take copies of any relevant documents or
records at the cost of the Warrantor
15. The Purchaser shall and shall procure that the Company will allow the
Warrantor (using professional advisers nominated by the Warrantor) to
take such action and institute and conduct such proceedings on behalf
of the Purchaser or the Company as the Warrantor may reasonably request
to dispute resist appeal compromise defend remedy or mitigate the
Matter or to enforce against any third party the rights of the Company
in relation to the Matter. The Warrantor shall fully indemnify the
Purchaser and the Company against all reasonable costs and expenses
incurred as a result of any action taken by the Warrantor pursuant to
this sub-clause
16. The Purchaser shall not and shall procure that the Company shall not
admit liability in respect of or compromise or settle the Matter
without the prior written consent of the Warrantor (such consent not to
be reasonably withheld or delayed)
17. The Warranties and the covenants in the Deed of Covenant are given on
the basis of the Company continuing to carry on business after
Completion as a going concern
B ACCESS
1. The Purchaser will after Completion give to the Warrantor and his
representatives reasonable facilities to inspect all of the books and
records relating to the Company as are delivered to the Purchaser under
this Agreement and (at the Warrantor's cost) to take copies and
extracts from them at all reasonable times and on reasonable advance
notice within the period of 3 years from and after Completion
SIGNED by )
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ )
in the presence of:- )
SIGNED BY )
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ )
in the presence of )
SIGNED by )
on behalf of )
EUROTELECOM CORPORATION LIMITED )
in the presence of )
