DATED 7th February 2005
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1. ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
2. ADAL GROUP, INC
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SHARE SALE & PURCHASE AGREEMENT
relating to
Guilform Holdings Limited
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▇▇▇▇ Rapinet
▇▇ & ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇ ▇▇▇
Tel: ▇▇▇ ▇▇▇▇ ▇▇▇▇
Fax: ▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇@▇▇▇▇▇▇▇▇.▇▇.▇▇
Ref: 1/78/rh/ADV10/7
SHARE SALE & PURCHASE AGREEMENT
-------------------------------
relating to
Guilform Holdings Limited
Table of Contents
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Date:........................................................................1
Parties:.....................................................................1
Recitals:....................................................................1
Operative Provisions:........................................................1
1. Definitions and Interpretation.........................................1
2. Agreement for Sale.....................................................6
3. Purchase Consideration.................................................6
4. Completion.............................................................6
5. Warranties.............................................................9
6. Tax Covenant...........................................................9
7. Limitation of Liability................................................9
8. Power Of Attorney......................................................9
9. Restrictive Agreement.................................................10
10. Further Assurance..................................................11
11. General............................................................11
12. Assignment.........................................................13
Schedule 1: Vendor, Shares and Consideration................................15
Schedule 2: The Group Companies.............................................16
Schedule 3: The Property....................................................18
Schedule 4: Warranties......................................................19
A. Corporate Details.....................................................19
B. Good Standing.........................................................20
C. Subsidiaries and Other Interests......................................21
D. Accounts..............................................................21
E. Finance...............................................................22
F. Taxation..............................................................24
G. Trading............................................................32
H. Property...........................................................35
I. Environment...........................................................38
J. Employment............................................................38
K. Pensions...........................................................41
L. Assets................................................................41
M. Insurances.........................................................42
N. Intellectual Property.................................................43
O. Data Protection and Privacy........................................43
Schedule 5: Tax Covenant....................................................44
1. Definitions and Interpretation........................................44
2. Covenant..............................................................46
3. Exclusions............................................................48
4. Conduct of Claims.....................................................49
5. Due Date and Interest.................................................49
6. Withholding and Taxation..............................................50
7. Over provisions, reliefs etc..........................................50
8. Recovery from other persons...........................................51
Schedule 6: Limitation of Liability.........................................52
Schedule 7: Consideration Shares............................................56
SHARE SALE & PURCHASE AGREEMENT
relating to
Guilform Holdings Limited
Date: 7th February 2005
Parties:
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ of Mumbery Lodge, ▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ (the "Vendor")
ADAL GROUP, INC c/o ▇▇/▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ (the "Purchaser")
Recitals:
A. This Agreement sets out the terms agreed by the parties in relation to the
sale by the Vendor to the Purchaser of the entire issued share capital of
Guilform Holdings Limited (the "Company").
B. Details of the Company are set out in Part 1 of Schedule 2.
Operative Provisions:
1. Definitions and Interpretation
In this Agreement, where the context so admits:
1.1 The following words and expressions have the meanings set out
against each or given in the provision of this Agreement
cross-referenced against each (as applicable):
"Appointment Letter" the letter from Purchaser to Vendor
appointing Vendor as anon-executive director
in agreed terms
"Associate" as defined in section 422(4) of the Financial
Services and Markets Act 2000 (so that in
relation to any Vendor "H" is that Vendor and
"C" or "D", as applicable, is the Company)
"Auditors" the Company's auditors
"Business Day" a day (not being a Saturday) on which banks
are open for general banking business in the
City of London
"CA" Companies Act 1985
"CAA" Capital Allowances Act 2001
"Companies Acts" CA, the Companies Act 1989 and the former
Companies Acts (within the meaning of CA
s735(1))
"Company" Guilform Holdings Limited Ltd.; details of
which are set out in Part 1 of Schedule 2
1
"Completion" completion of the sale and purchase of the
Shares in accordance with Clause 4
"Compromise Agreement" The Compromise Agreement between the Company
and the Vendor in agreed terms
"Computer Systems" all computer hardware, software,
microprocessors and firmware and any other
items that connect with any or all of them
which in each case are products being
developed or marketed by the Company or are
used in the Company's business or are in the
possession of the Company
"Consideration" see Clause 3.1
"Consideration Shares" 300,000 common stock] in the Purchaser to be
issued pursuant to Clause 3 and Schedule 7
"Consultancy Agreement" the Consultancy Agreement between the Vendor
and the Company in agreed terms
"Dangerous Substance" any natural or artificial substance (whether
in solid or liquid form or in the form of a
gas or vapour and whether alone or in
combination with any other substance) capable
of causing harm to man or any other living
organism supported by the environment, or
damaging the environment or public health or
welfare, including but not limited to any
controlled, special, hazardous, toxic or
dangerous waste
"Disclosure Letter" the disclosure letter in agreed terms making
disclosure against the Warranties
"Environmental Law" all laws, regulations, codes of practice,
circulars, guidance notices and the like
(whether in the United Kingdom or elsewhere)
concerning the protection of human health or
the environment or the conditions of the
workplace or the generation, transportation,
storage, treatment or disposal of Dangerous
Substances
"Environmental any permit, licence, authorisation, consent
Licence" or other approval required by any
Environmental Law
"FA" Finance Act
"Group" as defined in section 421 of the Financial
Services and Markets Act 2000 (so that in
relation to the Company "A" is the Company,
and in relation to the Purchaser "A" is the
Purchaser)
"Group Companies" the Company and its subsidiaries for the time
being
"Guarantees" Cross-guarantees and debentures from each of
the Company and Adal Seco Limited, Adal
Engineering Limited and Adal Group (UK)
Limited
2
"ICTA" Income and Corporation Taxes Act 1988
"ITEPA" Income Tax (Earnings and Pensions) Act 2003
"Intellectual Property Patents, trade marks, service marks,
Rights" registered designs, internet domain names,
applications for any of the above, copyright,
design right, database rights, know-how,
confidential information, trade secrets,
trade or business names, and any other
similar protected rights in any country
"ITA" Inheritance Tax Act 1984
"Last Accounts" the audited balance sheet as at the Last
Accounts Date and audited profit and loss
account for the year ended on the Last
Accounts Date of each Group Company,
including in the case of the Company the
audited consolidated balance sheet as at such
date and the audited consolidated profit and
loss account for such period, and the
directors' report and notes
"Last Accounts Date" 30 September 2003; being the date to which
the Last Accounts were prepared
"Loan Note Certificate" the certificate in the name of the Vendor
pursuant to the Loan Note Instrument
"Loan Note Instrument" the (pound)200,000 Secured 6% Loan Note in
agreed terms "Management Accounts" The
unaudited management accounts to 31st
December 2004 annexed to the Disclosure
Letter
"Planning Acts" as defined in Section 336 of the Town and
Country Planning Act 1990
"Property" The property of the Company, brief
particulars of which are set out in Schedule
3
"Plus Wall Debt" any sums due and owing to the Company on
Completion by Plus Wall Limited
"Purchaser's Messrs. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ of St. Paul's House,
Accountants" Warwick Lane, London, EC4M 7BP
"Purchaser's Messrs. ▇▇▇▇ Rapinet of 14 & ▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇" ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇
"Recognised Investment as defined in section 285(1)(a) of the
Exchange" Financial Services and Markets Act 2000
"Security Interest" any encumbrance, mortgage, charge, assignment
for the purpose of security, pledge, lien,
right of set off, retention of title or other
security interest of whatever kind and any
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agreement, whether conditional or otherwise,
to create any such interest
"Shares" the entire issued share capital of the
Company; as detailed in Part 1 of Schedule 2
"State Facilities" commercial loan facilities offered to the
Company by State Securities plc
"Taxation" all forms of taxation, charge, duty, impost,
withholding, deduction, rate, levy and
governmental charge (whether national or
local) in the nature of tax (including
without limitation national insurance and
other similar contributions, stamp duty,
stamp duty land tax and stamp duty reserve
tax), whatsoever and whenever created,
enacted or imposed, and whether of the United
Kingdom or elsewhere, and any amount whatever
payable to any Taxation Authority or any
other person as a result of any enactment
relating to Taxation, together with all
connected fines, penalties, interest, costs,
charges, surcharges and expenses, and "Tax"
is to be construed accordingly
"Taxation Authority" any statutory or governmental
authority or body (whether in the United
Kingdom or elsewhere) involved in the
collection or administration of Taxation
including (without limitation) the Inland
Revenue and HM Customs and Excise
"Taxation Statutes" includes statutes (and all regulations and
arrangements whatsoever made under them)
whether of the United Kingdom or elsewhere,
and whether enacted before or after the date
of this Agreement, providing for or imposing
any Taxation
"Tax Covenant" the tax covenant in Schedule 5
"TCGA" Taxation of Chargeable Gains Act 1992
"TMA" Taxes Management Act 1970
"VATA" Value Added Tax Act 1994
"Vendor' Accountants" Messrs. ▇▇▇▇▇▇▇ & Co, ▇▇▇▇▇ House, ▇▇▇▇▇
Road, Camberley, Surrey GU15 3SY
"Vendor' Solicitors" ▇▇▇▇▇▇ ▇▇▇▇▇ Corporate Lawyers of Aspect
Court, ▇ ▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇
"Vendor's State the personal guarantees and security given by
Security" the Vendor to State Securities plc in support
of the State Facilities
4
"Warranties" the warranties by the Vendor in Clause 5 and
Schedule 4
1.2 References to "SSAP" are to a statement of Standard Accounting
Practice published by the Consultative Committee of Accounting Bodies
of England and Wales;
1.3 References to "FRS" are to a financial reporting standard adopted or
issued by The Accounting Standards Board Limited;
1.4 References to specific United Kingdom legislation, Taxes or Taxation
Authorities include equivalent or similar legislation, Taxes or
Taxation Authorities in other jurisdictions, and any accompanying
wording is to be construed accordingly;
1.5 In the Warranties the phrases "to the best of the Vendor's knowledge
and belief" or "so far as the Vendor is aware", or any similar
phrase, are to be construed as meaning that the Vendor has made
reasonable enquiry in respect of the matter in question;
1.6 References to the singular or plural numbers include each other, and
references to the masculine, feminine or neuter genders include the
others;
1.7 Headings are for ease of reference only, and are not intended to
affect the construction of any provision;
1.8 References to Recitals, Clauses, Schedules and Annexures are
references respectively to Recitals to this Agreement, Clauses of
this Agreement, Schedules to this Agreement, and Annexures to this
Agreement, references in Schedules to Paragraphs are to Paragraphs of
that Schedule, and references to this Agreement include the
Schedules;
1.9 References to an Annexure or other document being "in agreed terms"
are to a draft document in a form signed or initialled by or on
behalf of the parties for purposes of identification;
1.10 References to the parties are to the parties to this Agreement;
1.11 References to persons include individuals, bodies corporate,
partnerships and unincorporated associations;
1.12 Obligations on the part of more than one person are joint and
several;
1.13 References to statutory provisions are to those provisions as amended
or re-enacted, or as their application is modified by other
provisions, from time to time, and include references to any
provisions of which they are re-enactments (whether with or without
modification), except to the extent that any amendment, modification
or re-enactment enacted after today's date would extend or increase
the liability of the Vendor under the Warranties or Tax Covenant;
1.14 Save as otherwise provided in this Agreement, words and phrases the
definitions of which are contained or referred to in Part XXVI of CA
have the meanings which it gives them; and
1.15 References to a matter being "fairly disclosed" means disclosed in
such manner and in such detail as to enable a reasonable purchaser to
make an informed and accurate assessment of the matter in question.
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2. Agreement for Sale
2.1 Subject to the terms and conditions of this Agreement and with
effect from the date of this Agreement, the Vendor sells with
full title guarantee and the Purchaser purchases the Shares,
free from all Security Interests and with all rights attaching
to them, including (but not limited to) the right to receive
and retain any dividends declared after the date of this
Agreement.
2.2 The Vendor undertakes to the Purchaser that
2.2.1 The Vendor is entitled to enter into and carry out the
provisions of this Agreement and each of the documents to be
entered into pursuant to this Agreement and to which he is a
party.
2.2.2 The Vendor is entitled to sell and transfer to the
Purchaser the full legal and beneficial ownership of the
Shares free from all Security Interests, options and
pre-emption rights on the terms of this Agreement, without the
consent of any third party.
3. Purchase Consideration
3.1 The Purchase Consideration is as follows:
3.1.1 (pound)300,000 in cash on completion (the "Cash
Consideration");
3.1.2 the Consideration Shares;
3.1.3 issue of the Loan Note Certificate; and
3.1.4 after Completion by the accounting of monies received pursuant
to Clause 3.3.
3.2 The terms of Schedule 7 shall have immediate effect in
relation to the Consideration Shares as if they were set out
here.
3.3 The Purchaser hereby undertakes to use reasonable endeavours
and to procure that the Company and the Group Company shall
use reasonable endeavours (at the Company's cost) to collect
the Plus Wall Debt as agent for the Vendor. Such monies are to
be kept in a separate account designated as a trust account
and held on trust in favour of the Vendor and the Purchaser
shall account to the Vendor as additional consideration within
10 Business Days of receipt for all payments received in
respect of the Plus Wall Debt save that the Purchaser shall
retain the proportion of the said payments representing the
VAT due thereon in respect of which the Purchaser shall
account to HM Customs & Excise. The Purchaser shall not be
obliged to terminate any supplies or to apply its own funds in
settlement of the Plus Wall Debt. Nothing herein shall require
the Purchaser to issue a statutory demand or legal proceedings
in respect of the Plus Wall Debt.
3.4 If any of the Purchaser, the Company or the Group Company
receives any communication or payment in respect of the Plus
Wall Debt, the Purchaser shall immediately give written
details thereof to the Vendor.
4. Completion
4.1 On Completion the Vendor will deliver to the Purchaser:
6
4.1.1 duly completed and signed transfers in favour of the Purchaser
or as it may direct of the Shares, together with the
corresponding share certificates or an indemnity for any
missing share certificates in the agreed terms;
4.1.2 the letter of resignation of the Vendor from as director each
Group Company and of ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ as company secretary
of each Group Company, in agreed terms;
4.1.3 the resignation of the existing auditors of each Group
Company, in the agreed terms;
4.1.4 the seal and certificate of incorporation and any certificates
of incorporation on change of name of each Group Company;
4.1.5 the statutory books of each Group Company, complete and
up-to-date;
4.1.6 letters of non-crystallisation of all charges, debentures and
other Security Interests affecting the Company;
4.1.7 any waiver, consent or other document necessary to give the
Purchaser full legal and beneficial ownership of the Shares;
4.1.8 the duly executed Consultancy Agreement and Compromise
Agreement;
4.1.9 the deeds of waiver of any indebtedness of the Group Companies
to the Vendor in agreed terms;
4.1.10 the title deeds relating to the Property; and
4.1.11 the appropriate forms to amend the mandates given by each
Group Company to its bankers.
4.1.12 stock transfer form to Guilform Holdings Limited of one
Guilform Limited share in name of Vendor
4.1.13 the countersigned Appointment Letter
4.1.14 duly executed State Facility documents and the Guarantees
4.2 The Vendor must repay all monies then owing by him to any Group
Company, whether due for payment or not.
4.3 A Board Meeting of the Company must be held at which:
4.3.1 such persons as the Purchaser may nominate are appointed
additional directors and secretary;
4.3.2 the resignations referred to in Clauses 4.1.2 and 4.1.3 are
submitted and accepted;
4.3.3 the Compromise Agreement and the Consultancy Agreement be
approved and signed on behalf of the Company;
4.3.4 the Purchaser's Accountants are appointed as auditors of the
Company;
7
4.3.5 the Purchaser's Accountants give a report for the purposes of
CA s156(4);
4.3.6 the directors of the Company make a statutory declaration
complying with CA ss155(6) and 156;
4.3.7 the board meeting is adjourned and a special resolution
complying with CA ss155(5) and 157 is passed by the Purchaser
exercising the voting rights given to it by the powers of
attorney given below; and
4.3.8 the transfers referred to in Clause 4.1.1 are approved
(subject to stamping).
4.3.9 the Guarantee to which the Company is a signatory will be
approved and executed
4.4 Board Meetings of the other Group Company must be held at which:
4.4.1 such persons as the Purchaser may nominate are appointed
additional directors and secretary;
4.4.2 the transfers referred to in Clause 4.1.1 are approved
(subject to stamping); and
4.4.3 the resignations referred to in Clauses 4.1.2 and 4.1.3 are
submitted and accepted.
4.5 The Purchaser must deliver to the Vendor's Solicitors (or as they
direct):
4.5.1 by telegraphic transfer, the Cash Consideration, together with
all amounts payable to the Vendor under the Compromise
Agreement;
4.5.2 a certified copy of the written consent of the Directors
confirming the resolution to issue the Consideration Shares;
4.5.3 as soon as practicable after completion and in any event
within [20] Business Days share certificates in respect of the
Consideration Shares; and
4.5.4 duly executed guarantees to which any of the Purchaser's group
are signatories
4.6 Following Completion, the Purchaser shall use its best endeavours to
procure the release as soon as practicable (but in any event prior to
the date set out below) of each of the Vendor and ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
from all security and guarantees given to:-
4.6.1 Venture Finance plc by 1st June 2005; and;
4.6.2 the Vendor's State Security by 7th August 2007
Pending such releases the Purchaser hereby indemnifies each of the
Vendor and ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ against any liability under such
guarantees.
4.7 Notwithstanding the terms of the Consultancy agreement or the
Appointment letter, the Purchaser undertakes to maintain the
Consultancy Agreement and to procure the maintenance of the terms of
the Appointment Letter for not less than 3 years from Completion.
8
5. Warranties
5.1 Subject to all matters fairly disclosed in the Disclosure Letter the
Vendor warrants to the Purchaser in the terms of the Warranties.
5.2 Where applicable, the Warranties are deemed to be repeated in
respect of each Group Company as if the references to the "Company"
in the Warranties referred to it.
5.3 Each of the Warranties is without prejudice to any other warranty or
undertaking, and no Warranty or part of one is to be construed as
limiting or governing the extent or application of any of the other
Warranties or any part of them.
5.4 Each of the Warranties is to be construed as a separate and
independent warranty, to the intent that the Purchaser will have a
separate claim and right of action in respect of every breach, but
not so as to recover the same loss more than once.
5.5 Save as provided in this Agreement, the rights and remedies of the
Purchaser in respect of any breach of the Warranties are not
affected by Completion or by any failure to exercise or delay in
exercising any right or remedy.
5.6 None of the information supplied by any Group Company or its
professional advisers prior to the date of this Agreement to any of
the Vendor or his agents, representatives or advisers in connection
with the Warranties and the contents of the Disclosure Letter, or
otherwise in relation to the business or affairs of the Group
Companies, is to be deemed a representation, warranty or guarantee
of its accuracy by the Group Companies to the Vendor, and the Vendor
waives any claims against the Group Companies which they might
otherwise have in respect of it.
6. Tax Covenant
The provisions of Schedule 5 apply as if they were set out here.
7. Limitation of Liability
8. The provisions of Schedule 6 shall operate to limit the liability of the
Vendor under the Warranties and the Tax Covenant Power Of Attorney
8.1 The Vendor hereby appoints the Purchaser to be his attorney from and
after signature of this Agreement until such time as the ownership
of the shares is registered in the Company Register granting to the
Purchaser full power on his behalf to exercise all voting and other
related rights attaching to the Shares including power:
8.1.1 to execute a form of proxy in favour of such person or persons as
the Purchaser may think fit to attend and vote as the Vendor's proxy
at any general meeting of the members, or separate class meeting of
any class of members, of the Company in respect of such Shares in
such manner as the Purchaser may decide;
8.1.2 to consent to the convening and holding of any such meeting
and the passing of the resolutions to be submitted at any such
meeting on short notice;
8.1.3 to execute written resolutions; and
8.1.4 to settle the terms of such resolutions and generally to
procure that the Purchaser or its nominees are duly registered
as the holders of all the Shares.
9
8.2 The Vendor agrees, , to ratify and confirm all and whatsoever the
Purchaser shall lawfully do or cause to be done in pursuance of the
power of attorney granted by this clause 8 and declares that the
power of attorney in Clause 8 shall be irrevocable.
8.3 The Purchaser undertakes to indemnify the Vendor against all
actions, proceedings, claims, costs, expenses and liabilities
arising from the exercise, or the purported exercise in good faith,
of any of the powers conferred by this Clause 8.
9. Restrictive Agreement
9.1 For the purpose of assuring to the Purchaser the full benefit of the
business and goodwill of the Group Companies, the Vendor undertakes
by way of further consideration for the obligations of the Purchaser
under this Agreement as separate and independent agreements that he
will not, except in the proper performance of his duties as an
employee of or consultant to the relevant Group Company, and he will
(as far as he is reasonably able) procure that none of his
Associates will:
9.1.1 At any time after Completion:
9.1.1.1 disclose to anyone except to someone authorised by the Group
Companies to know; or
9.1.1.2 use for his own purposes or for any purposes except those of
the Group Companies; or
9.1.1.3 through any failure to exercise all due care and diligence
cause any unauthorised disclosure of
any confidential information of any Group Company and "know-how"
relating to any Group Company's projects, or the working of any of
the processes or inventions it owns or uses, details of its research
projects (including their organisation and staff involved), lists or
details of customers, prices, or commercial relationships or
negotiations or which he has obtained by virtue of his employment or
in respect of which any Group Company is bound by an obligation of
confidence to a third party. This restriction will only cease to
apply to information or knowledge which becomes available to the
public generally otherwise than by his default but will not at any
time apply to any information which by virtue of his employment
becomes part of his own skill and knowledge and apart from the
provisions of this Agreement could lawfully be used by him for that
purpose;
9.1.2 Until the expiry of two years from Completion directly or
indirectly:
9.1.2.1 carry on or be interested in any business which competes
with any business carried on by any Group Company at
Completion provided that he may hold for investment purposes
only up to 5% of the issued securities of any class of any
company if the securities are listed on a Recognised
Investment Exchange or traded on the Alternate Investment
Market;
9.1.2.2 be a consultant or employee or officer in any executive,
sales, marketing, research or technical support capacity in
any business which competes with any business carried on by
any Group Company at Completion, but he may be a consultant
or employee or officer in any business so far as his duties
and work relate exclusively to work of a kind or nature with
which he was not concerned to a material extent during the
last two years of his employment by the Group Companies;
10
9.1.2.3 solicit, canvass or approach any person who, to his
knowledge, was provided with goods or services by any Group
Company at any time during the period of one year prior to
Completion, or was then negotiating with any Group Company
for the provision by it of goods or services, or to offer to
that person goods or services previously provided to him by
it during that year or which were the subject of
negotiations to do so at Completion; or
9.1.2.4 accept orders from such a person for goods or services
similar to or competitive with the goods or services
previously provided to him by any Group Company during the
period of one year prior to Completion or which were the
subject of negotiations to do so at Completion; nor
9.1.2.5 attempt to solicit or entice away from any Group Company or
engage or employ any person employed by any Group Company at
Completion or the period of three months before then or
procure that such a person be engaged or employed by any
other business which competes with any business, carried on
by any Group Company at the date of that termination.
9.2 The parties agree that each of the covenants set out in Clause 8 is
separate and severable and enforceable accordingly, and, whilst the
restrictions contained in such covenants are considered by the
parties to be reasonable in all the circumstances at present, it is
acknowledged that restrictions of this nature may be invalid becaus
of changing circumstances or other unforeseen reasons, and
accordingly if any of the restrictions is adjudged to be void or e
ineffective for whatever reason, but would be adjudged to be valid
and effective if part of its wording were deleted, or its period
reduced, or its area reduced in scope, it will then apply with such
modifications as may be necessary to make it valid and effective.
10. Further Assurance
10.1 Save as specifically provided in this agreement each of the parties
must, , do and execute, and use its best endeavours to procure any
other necessary person under its control to do and execute, all such
further acts, things, deeds and documents as may be necessary to
give effect the transfer of title to the shares and the
Consideration Shares.
10.2 Save as specifically provided in this agreement ach party agrees, ,
to co-operate with and assist the other parties in the taking of all
steps necessary or appropriate to complete the transactions
contemplated by this Agreement, including (without limitation) the
provision of information appropriate for submission to relevant
Taxation Authorities, governmental or regulatory agencies.
11. General
11.1 This Agreement (together with any documents referred to in this
Agreement, insofar as each of the parties is party to such
documents) constitutes the entire agreement between the parties
relating to its subject matter, and supersedes any previous
agreement between the parties relating to that matter.
11
11.2 Each party acknowledges that it has not entered into this Agreement
on the basis of, and does not rely on, any representation, warranty
or other provision that is not expressly included in this Agreement,
and it irrevocably and unconditionally waives any right it may have
to claim damages and/or to rescind this Agreement on the basis of
any misrepresentation whether or not expressly included in this
Agreement or breach of warranty that is not expressly included in
this Agreement, unless such misrepresentation or breach of warranty
was fraudulent. The parties agree that this exclusion is reasonable
as it is mutual and provides commercial certainty, and it is their
intention that all representations and warranties in respect of the
subject matter of this Agreement should be expressly set out in this
Agreement. The parties therefore acknowledge that their intention is
that the Warranties and Disclosure Letter should constitute an
agreed statement of the allocation of risk between the parties in
respect of the matters they cover and that, believing this to be the
case, they have entered into this Agreement on that basis.
11.3 This Agreement may only be varied in writing, under the signature of
all the parties or their authorised representatives.
11.4 Subject to Clause 12, this Agreement will be binding upon and enure
for the benefit of the successors of the parties.
11.5 A person who is not a party to this Agreement may not enforce any of
its terms under the Contracts (Rights of Third Parties) Act 1999,
except that the Group Companies may enforce Clause 4.2 and the
indemnity in their favour in Clause 8 and ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ may
enforce the terms of Clause 4.6.
11.6 Any notice required to be given under this Agreement or
communication in respect of this Agreement must be in writing, and
served by sending it by pre-paid first class post (within the United
Kingdom) or by fax (provided the original document is then sent by
post, by courier or by hand) or by delivering it by hand or by
international courier service to the following address or fax number
(or otherwise advised to the other party):-
For the Purchaser:- Attention of ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇ Rapinet Solicitors
▇▇/▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
Fax: ▇▇▇ ▇▇▇▇ ▇▇▇▇
For the Vendor:- Attention of ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇ Corporate Lawyers,
Aspect Court, ▇ ▇▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇
Fax: ▇▇▇▇ ▇▇▇ ▇▇▇▇
11.7 If posted, the notice or communication will be deemed to have been
served 48 hours after posting. If faxed it will be deemed to have
been served upon transmission, unless transmitted after 17.00 hours,
when it will be deemed to have been served on the next Business Day
in the country of receipt. If delivered by hand or by international
courier service it will be deemed to have been served upon delivery.
12
11.8 Service by post may be proved by showing that the envelope was
properly stamped, addressed and placed in the post. Service by fax
may be proved by producing a transmission report or journal showing
the addressee's current fax number and indicating correct
transmission of the right number of pages on a specified date at a
specified time. Service by hand or by international courier service
may be proved by showing personal delivery to the correct address.
11.9 No delay or omission of any party in exercising any right or remedy
in whole or in part is to be construed as a waiver of it, or to
operate so as to limit or preclude any further or other exercise of
it.
11.10 Except as may be required by law or by the rules of any Recognised
Investment Exchange, no announcement or disclosure of any kind may
be made in relation to the existence and/or the subject matter of
this Agreement unless specifically agreed by the parties both as to
the timing and the contents of the announcement or disclosure.
11.11 Each party agrees to bear its own costs of and incidental to this
Agreement and its subject matter. The Purchaser must pay all stamp
duties on the transfer of the Shares.
11.12 This Agreement is governed by and to be construed in all respects in
accordance with English Law.
11.13 In relation to any legal action or proceedings arising out of or in
connection with this Agreement ("Proceedings"), each of the parties
irrevocably submits to the exclusive jurisdiction of the English
courts and waives any objection to Proceedings in such courts on the
grounds of venue or on the grounds that Proceedings have been
brought in an inappropriate forum.
11.14 This Agreement may be executed in any number of counterparts, each
of which is an original, but all of which together constitute one
and the same instrument. This Agreement becomes effective at such
time as its counterparts have been executed and delivered by the
parties and it is not a condition to its effectiveness that each of
the parties has executed the same counterpart.
12. Assignment
12.1 Other than any permitted sale or transfer of the Consideration
Shares, no party may assign, transfer, charge make the subject of a
trust or deal in any other manner with any of its rights under this
Agreement or purport to do any of the same nor sub-contract any or
all of its obligations under this agreement without the prior
written consent of the other party.
12.2 Notwithstanding Clause 12.1, the Purchaser shall be entitled to
assign its rights under this Agreement and/or any agreement or
document entered into pursuant to this Agreement to any subsidiary
or parent undertaking of the Purchaser and any subsidiary of its
parent undertakings which is a registered company in the United
Kingdom, provided that the Purchaser shall procure that any such
company to which it assigns any of its rights under this clause
shall re-assign all such rights to another subsidiary or parent
undertaking of the Purchaser in the event it cease to be such an
undertaking.
13
EXECUTED AS A DEED, but not delivered until the date at the head of this
Agreement.
14
Schedule 1: Vendor, Shares and Consideration
(Party 1, Clauses 1.1, Schedule 2)
====================================== ==================================== ====================================
(1) (2) (3)
Vendor's name and address Shares Percentage entitlement to
Consideration
-------------------------------------- ------------------------------------ ------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ 182,664 Ordinary Shares of (pound)1 each 100%
Mumbery Lodge, ▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, all called up and fully paid up
Wargrave, Reading, Berkshire RG10 8AQ
====================================== ==================================== ====================================
15
Schedule 2: The Group Companies
(Recital B, Clause 1.1, Warranty A.1,)
Part 1: the Company
Company Name: GUILFORM HOLDINGS LIMITED
Country of Incorporation: England and Wales
Registered No: 1239256
Date of Incorporation: 5TH January 1976
Type of Company: private company limited by shares
Registered Office: Unit ▇, ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ ▇▇▇
Directors: ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Secretary: ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
Authorised Capital: (pound)500,000 divided into 500,000 Ordinary
Shares of (pound)1 each
Issued Capital: 182,664 Ordinary Shares, fully paid
Shareholders: the Vendor, as set out in Columns (1) and
(2) of Schedule 1
Auditors: ▇▇▇▇▇▇▇ & Co
Accounting Reference Date: 30th September
16
Part 2: the Company's subsidiaries
Company Name: Guilform Limited
Country of Incorporation: England and Wales
Registered No: 2653021
Date of Incorporation: 10th October 1991
Type of Company: private company limited by shares
Registered Office: Unit ▇, ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ ▇▇▇
Directors: ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Secretary: ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
Authorised Capital: (pound)1000 divided into 1000 Ordinary
Shares of (pound)1 each
Issued Capital: 1000 Ordinary Shares, fully paid
Shares held by the Company 999 Ordinary Shares
or (where specified) by
its subsidiaries or its
or their nominee(s):
Other shareholders (if any): 1 share held jointly by the Company and
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Auditors: ▇▇▇▇▇▇▇ & Co
Accounting Reference Date: 30th September
17
Schedule 3: The Property
(Clause 1.1, Warranty H)
Freehold
Description: Units 4 and 5, Alban Park Industrial
Estate, ▇▇▇▇▇▇▇▇ Road, St Albans
Registered/Unregistered: Registered
Title No and grade of title: HD190469 and HD 225911
Title absolute
Beneficial owner: Guilform Holdings Limited
Legal owner: Guilform Holdings Limited
Present use: Industrial
18
Schedule 4: Warranties
(Clauses 1.1, 5)
A. Corporate Details
A.1 The information relating to the Company and its shareholders
contained in Schedules 1 and 2 is true and accurate in all material
respects.
A.2 The Shares constitute 100% of the issued and allotted share capital
of the Company and are fully paid or properly credited as fully
paid.
A.3 The Vendor is entitled to enter into and carry out the provisions of
this Agreement and each of the documents to be entered into pursuant
to this Agreement and to which he is a party.
A.4 The Vendor is entitled to sell and transfer to the Purchaser the
full legal and beneficial ownership of the Shares free from all
Security Interests, options and pre-emption rights on the terms of
this Agreement, without the consent of any third party.
A.5 Compliance with the terms of this Agreement, and any document
entered into by the Vendor in accordance with it, does not and will
not result in a breach of any order, judgment or decree of any court
or governmental agency or Security Interest to which the Vendor is a
party or by which the Vendor or any of his assets is bound.
A.6 There are no agreements or arrangements in force, other than this
Agreement, which grant to any person the right to call for the
issue, allotment, transfer or redemption of any share or loan
capital of the Company.
A.7 The Company has not created or granted or agreed to create or grant
any Security Interest in respect of any of its uncalled share
capital.
A.8 The register of members and other statutory books of the Company
have been properly kept and contain an accurate record of all
matters required to be entered in them by CA, and no notice or
allegation that any of them is incorrect or should be rectified has
been received.
A.9 All returns, particulars, resolutions and documents required by any
legislation to be filed with the Registrar of Companies in respect
of the Company have been duly filed and were correct.
A.10 The Memorandum and Articles of Association of the Company in the
form of the copy annexed to the Disclosure Letter are complete,
accurate and up-to-date, contain copies of all resolutions required
to be annexed to them, set out in full the rights and restrictions
attaching to the share capital of the Company, and all amendments to
them (if any) were duly and properly made.
A.11 No person is a shadow director of the Company within the meaning of
Section 741(2) CA.
A.12 No director of the Company is now or has at any time within the last
6 years been subject to any disqualification order under the Company
Directors Disqualification Act 1986.
A.13 The Company has not been a party to any transaction to which any of
the provisions of Sections 320, 322A or 330 CA may apply.
19
A.14 The Company has a common seal.
A.15 Due compliance has been made with all the provisions of the
Companies Acts and other legal requirements in connection with the
formation of the Company, the allotment or issue of any of its
shares, debentures and other securities and the payment of
dividends.
A.16 The Company has not pursuant to any provision of CA:
A.16.1Been notified by any of its members of an address for the purpose
of the Company sending him any electronic communication;
A.16.2Notified any of its members of an address for the purpose of his
sending the Company any electronic communication; or
A.16.3Agreed with any of its members to their having access to any
documents on a web site.
B. Good Standing
B.1 No receiver, administrative receiver or administrator has been
appointed, nor any notice given, petition presented or order made
for the appointment of any such person over the whole or any part of
the assets or undertaking of the Company or the Vendor.
B.2 No petition has been presented, no order has been made and no
resolution has been passed for the winding up of the Company or for
the appointment of a liquidator or provisional liquidator of the
Company.
B.3 No voluntary arrangement has been proposed or is in force under the
Insolvency Act 1986 Section 1 in respect of the Company.
B.4 The Company has not stopped payment of its debts, nor is it
insolvent or unable to pay its debts as and when they fall due.
B.5 No unsatisfied judgment is outstanding against the Company, and no
demand has been served on the Company under the Insolvency Act 1986
Section 123(1)(a).
B.6 No distress, execution or other process has been levied in respect
of the Company which remains undercharged, nor is there any
unfulfilled or unsatisfied judgment or court order outstanding
against the Company.
B.7 No event has occurred causing, or which upon intervention or notice
by any third party may cause, any floating charge created by the
Company to crystallise over its business or assets or any of them or
any charge created by it to become enforceable over its business or
assets or any of them, nor has any such crystallisation occurred nor
is such enforcement in process.
B.8 None of the activities or contracts or rights of the Company is
ultra ▇▇▇▇▇, unauthorised, invalid or unenforceable or in breach of
any contract or covenant.
B.9 The Company is empowered and duly qualified to carry on business in
all jurisdictions in which it now carries on business.
20
C. Subsidiaries and Other Interests
C.1 The Company has not since its incorporation been the holder or
beneficial owner of, nor has it agreed to acquire any share or loan
capital of, or any other interest, in any other company or business
organisation (whether incorporated in the United Kingdom or
elsewhere) apart from the other Group Companies.
C.2 Other than as regards the Group Company, the Company has not since
its incorporation been a subsidiary of any other company.
C.3 Other than as regards the the Group Company, Company does not
control or take part in the management of any other company or
business organisation.
C.4 The Company is not, nor has it agreed to become, a member of any
joint venture, consortium, partnership or other unincorporated
association.
C.5 The Company does not have any branch, agency or place of business or
any permanent establishment (as the expression is defined in the
relevant double taxation relief order current at the date of this
Agreement) outside the United Kingdom or any substantial assets
outside the United Kingdom.
C.6 The Company 2 is (except as specified in Part 2 of Schedule 2) the
sole and beneficial owner of the whole of the issued share capital
of each Group Company listed in Part 2 of Schedule 2.
C.7 The whole of the issued share capital of each Group Company has been
validly allotted and issued and is fully paid or properly credited
as fully paid.
C.8 There is no Security Interest on, over or affecting any of the share
capital of each Group Company, and there is no agreement or
arrangement to give or create any such Security Interest. No claim
has been or will be made by any person to be entitled to any such
Security Interest.
D. Accounts
D.1 The Last Accounts have been prepared in accordance with the
historical cost convention and generally accepted accounting
principles in the United Kingdom consistently applied throughout,
and the bases and policies of accounting adopted for the purpose of
preparing the Last Accounts are the same as those adopted in
preparing the audited accounts of the Company in respect of the
three last preceding accounting periods.
D.2 The Last Accounts:
D.2.1 give a true and fair view of the assets, liabilities and
commitments of the Company at the Last Accounts Date and its
profits for the financial period ended on that date;
D.2.2 comply with the requirements of the Companies Acts and other
relevant statutes;
D.2.3 comply with all current SSAPs, FRSs and relevant
pronouncements applicable to a United Kingdom company;
D.2.4 are not affected by any extraordinary, exceptional or
non-recurring item or by any other circumstance rendering the
profits or losses unusually high or low;
21
D.2.5 do not include any amount in respect of any asset, whether
fixed or current, which exceeds its purchase price or
production cost (within the meaning of CA Schedule 4), or (in
the case of current assets) its net realisable value at the
Last Accounts Date; and
D.2.6 properly reflect the financial position of the Company as at
their date.
D.3 Any slow moving, obsolete or redundant stocks and non-recoverable
work-in-progress included in the Last Accounts have been written
down appropriately, and the value attributed to the remaining stocks
and work-in-progress does not exceed the lower of cost or net
realisable value at the Last Accounts Date.
D.4 The rates of depreciation adopted in the Last Accounts by the
Company were the same as the rates adopted in the audited
consolidated balance sheet of the Company for both of the last two
financial years of the Company preceding the financial year of the
Company ended on the Last Accounts Date, and was sufficient for each
of the fixed assets of the Company to be written down to nil by the
end of its useful life.
D.5 The Management Accounts:
D.5.1 fairly represent the profits, assets and liabilities of the
Company's business for the periods to which they relate;
D.5.2 fairly reflect the financial position of the Company as at
their date;
D.5.3 include proper provision for all known liabilities as at the
end of the periods to which they relate, other than in respect
of Taxation;
D.5.4 were not materially affected by any unusual, exceptional,
non-recurring or extraordinary items.
D.6 All requisite accounts, books, ledgers, financial and other records,
of the Company are in its possession, comply with the requirements
of the Companies Acts and other relevant statutes and are properly
maintained.
D.7 The accounting reference date of the Company for the purposes of
Section 224 CA has always been the date specified as such in
Schedule 2.
E. Finance
E.1 The Company had no capital commitments outstanding at the Last
Accounts Date and the Company has not, since then, incurred or
agreed to incur any capital expenditure or commitments or disposed
of any capital assets.
E.2 Since the Last Accounts Date the Company has not paid or declared
any dividend or made any other payment which is, or is treated as, a
distribution for the purposes of ICTA Part VI.
E.3 The Company has not, since the Last Accounts Date, repaid, or become
liable to repay, any indebtedness in advance of its stated maturity,
has received no notice to repay under any agreement relating to any
borrowing or indebtedness in the nature of borrowing on the part of
the Company which is repayable on demand, and there has not occurred
any event of default under any agreement relating to any other
borrowing or indebtedness in the nature of borrowing on the part of
the Company or any event which with the giving of notice and/or the
lapse of time and/or a relevant determination would constitute such
22
an event of default.
E.4 There are no liabilities (including contingent liabilities) which
are outstanding on the part of the Company other than those
liabilities disclosed in the Last Accounts or incurred, in the
ordinary and proper course of trading, since the Last Accounts Date.
E.5 None of the facilities available to the Company is dependent on the
guarantee or indemnity of, or any security provided by, a third
party.
E.6 So far as the Vendor is aware the amounts now due to the Company
from debtors will be recoverable in full in the ordinary course of
business, and in any event not later than twelve weeks from the date
of this Agreement.
E.7 No part of the amounts included in the Last Accounts as owing by any
debtor remains unpaid or has been released on terms that any debtor
pays less than the full book value of his debt.
E.8 The Company has, since the Last Accounts Date, paid its creditors in
accordance with its normal practice as stated in the Disclosure
Letter.
E.9 There is not now outstanding in respect of the Company any guarantee
or agreement for indemnity or for suretyship given either by or for
the accommodation of the Company.
E.10 There are no:
E.10.1 loans made by the Company to the Vendor and/or any person
connected with them as described in Section 839 of ICTA
(except that in construing Section 839 the term "control" is
to have the meaning given by Section 840 or Section 416 of the
Taxes Act 1988 so that there is control whenever either of
those Sections would so require);
E.10.2 debts owing to the Company by the Vendor and/or any such
connected person;
E.10.3 debts owing by the Company other than debts which have arisen
in the ordinary course of business; or
E.10.4 security for any such loans or debts as above.
E.11 A statement of the bank accounts of the Company and the credit or
debit balances on them reconciled to the date of this agreement is
attached to the Disclosure Letter, the Company has no other bank or
deposit account (whether in credit or overdrawn) not included in
such statement, since such statement there have been no payments out
of any such accounts except for routine payments, and the present
balances on such accounts are not now substantially different from
the balances shown on such statements.
E.12 There are no unpresented cheques drawn by the Company:
E.12.1 in the normal course of business for amounts exceeding in
aggregate (pound)1000; or
23
E.12.2 otherwise than in the normal course of business.
E.13 The Company has not given any guarantee, indemnity, warranty or bond
or incurred any other similar obligation or created any security for
or in respect of liabilities, actual or contingent, of any other
person.
F. Taxation
F.1 Payment of Taxation
F.1.1 The Company has duly and punctually paid all Taxation which it
has become liable to pay and is under no liability to pay any
penalty or interest in connection with any claim for Taxation
F.1.2 The Company has properly operated the Pay As You Earn system
and has complied with all its reporting obligations to the
Inland Revenue in connection with benefits provided for
employees or directors of the Company and there are no
dispensations in force
F.1.3 The Company has properly paid all National Insurance
contributions in respect of its employees
F.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
Revenue for the Taxation so deducted
F.1.5 The Company is not liable and has not at any time within the 6
years prior to the date of this Agreement been liable to pay
interest or penalties to the Revenue
F.1.6 The Company has properly and punctually made all such returns
and provided all such information required to be made or
provided by it under the Taxation statutes and none of such
returns is disputed by or likely to be disputed by the Revenue
or any other authority concerned
F.1.7 The Company has notified the Revenue of all chargeability to
Corporation Tax under Section 10 Taxes Management Act 1970
F.1.8 There is no dispute or disagreement outstanding nor is any
likely to occur so far as the Seller is aware at the date of
this Agreement with any Revenue regarding liability to any
Taxation (including in each case penalties or interest)
recoverable from the Company or regarding the availability to
the Company of any relief from Taxation
F.1.9 The Company is duly registered for Value Added Tax and has
complied in all respects with VATA and all orders provisions
directions or conditions made or imposed thereunder and has
made given obtained and kept full complete and correct and up
to date records invoices and other documents appropriate or
required for the purposes thereof and is not in arrears with
any payments or returns due thereunder and has not been
required by the Commissioner of Customs and Excise to give
security under Paragraph 5 of Schedule 7 VATA
F.1.10 The Company is not involved in any dispute with any Taxation
authority whether within the United Kingdom or overseas
24
F.1.11 The Company is not the subject of a back duty investigation
and there are no known facts which may give rise to the same
F.1.12 The Company is not nor will it become liable to pay or make
reimbursement or indemnity in respect of any Taxation (or
amounts corresponding thereto) in consequence of the failure
by any other person to discharge that Taxation within any
specified period or otherwise where such Taxation relates to a
profit income or gain transaction event omission or
circumstance arising occurring or deemed to arise or occur
(whether wholly or partly) prior to Completion
F.1.13 The Company has not since the Accounts Date made any payment
which is or is treated as a distribution for the purposes of
Sections 209-211 of the Taxes Act
F.1.14 The Company has not since the Accounts Date incurred or is or
has become liable to incur after that date expenditure which
will not be wholly deductible in computing its taxable profits
except for expenditure on the acquisition of an asset to be
held otherwise than as stock in trade details of which are set
out in the Disclosure Letter
F.1.15 No relief (whether by way of deduction reduction set off
exemption repayment or allowance or otherwise) from against or
in respect of any Taxation has been claimed and/or given to
the Company which could or might be effectively withdrawn
postponed restricted or otherwise lost as a result of any act
omission event or circumstance arising or occurring at any
time after Completion
F.1.16 The Company has sufficient records relating to past events to
calculate the tax liability or relief which would accrue on
any disposal or on the reduction of any amount owed at the
Accounts Date or acquired since that date but before
Completion
F.2 Residence and Status
F.2.1 The Company is and has always been resident in the United
Kingdom for Taxation purposes
F.2.2 The Company is the beneficial owner of all the shares in that
member of the Group Companies and no such shares are held such
that any profit on the sale of those shares will be a trading
receipt.
F.2.3 The Company is not and has at no time been an investment
company nor an investment trust company for the purposes of
the Taxation Statutes
F.2.4 The Company is not and has never been a dual resident Company
for the purposes of tax on chargeable gains and there is not
potential liability to tax on capital gains arising in a
non-resident close company in which the Company has any
holding
F.2.5 Other than any Group Company, the Company has not and has at
no time had any associated company or subsidiary company for
the purposes of the Taxation Statutes
F.2.6 The Company is and for the last six years has been a close
company
25
F.3 Transactions
F.3.1 The Company has not since the Accounts Date entered into or
been a party to any transaction which will or may give rise to
a charge to tax under the corporation Taxation provisions
relating to chargeable gains
F.3.2 Save as provided for in the Accounts the Company has not made
any claim under Section 279 TCGA (Relief in respect of delayed
remittances of gains) or Section 23 TCGA (Compensation and
insurance money) or Section 24 TCGA (Assets lost or destroyed)
or Section 584 of the Taxes Act (Relief for unremittable
income) or Section 585 of the Taxes Act (Relief from tax on
delayed remittances)
F.3.3 The Company has not been a party to or involved in any scheme
or arrangements whereby the value of any asset has been
materially reduced so that on a disposal of the asset by the
Company Sections 30 31 32 33 or 34 of the TCGA (capital gains;
value-shifting) may be applicable
F.3.4 The Company has not received any asset by way of gift as
mentioned in Section 282 of the TCGA
F.3.5 The Company does not own any shares or securities acquired as
a "new holding" under the provisions of Sections 126 to 130 of
the TCGA
F.3.6 The Company has not made any claim under Section 152 and 153
of the TCGA (replacement of business assets) as respects the
consideration for the disposal of or of its interest in any
assets which are defined in the said Section 152 as "the old
assets"
F.3.7 The Company has not been a party to or involved in any share
for share exchange nor any scheme of reconstruction or
amalgamation such as are mentioned in Sections 135 and 136 of
the TCGA or Section 139 TCGA under which shares or debentures
have been issued or any transfer of assets effected
F.3.8 The Company has not effected any demerger such as is mentioned
in Sections 213-218 of the Taxes Act
F.3.9 The Company has not made any election under paragraph 4 of
Schedule 2 to the TCGA or Section 35 TCGA
F.3.10 No gain chargeable to corporation tax will accrue to the
Company on the disposal of any debt owing to the Company nor
will any allowable loss arise on any such disposal
F.3.11 The Company has not disposed of or acquired any asset in
circumstances falling within Section 17 of the TCGA and is not
entitled to any capital loss to which Section 18(3) of the
TCGA will apply
F.3.12 The Company is not liable to be assessed to any taxation
under the provisions of Section 189 or Section 190 of the TCGA
F.4 Employees and Trade
F.4.1 Since the Accounts Date the Company has not paid remuneration
to its directors in excess of such amount as will be
deductible in computing the taxable profits of the Company
26
F.4.2 The Company has not paid remuneration or compensation for loss
of office or made any gratuitous payment or transferred assets
to any of its present or former directors or employees
F.4.3 No change of ownership of the Company has taken place prior to
the date hereof in circumstances such that Section 768 of the
Taxes Act has or may be applied to deny relief for a loss or
losses incurred by the Company and within the period of 3
years prior to the date of this Agreement there has been no
major change in the nature or conduct of any trade or business
carried on by the Company nor has the scale of the activities
in any trade or business carried on by the Company at any time
prior to the date hereof become small or negligible for the
purposes of the section
F.4.4 All tax losses appearing in the Accounts are trading losses
and are available to be carried forward and set off against
income from the same trade in succeeding period except to the
extent that they may be disallowed under Section 768 of the
Taxes Act by virtue of the conduct of the Purchaser
F.4.5 The Company has not made and is under no obligation under
which it is or at any time may become liable to make any
payment of interest annuity or other annual payment such as
may be disallowed as a deduction as a set-off or as a charge
on income or otherwise be unrelieved for corporation tax
purposes whether by virtue of Sections 125 or 787 of the Taxes
Act or otherwise
F.4.6 The nature of the trade of the Company is materially the same
as at the Accounts Date
F.4.7 The Company has not sustained a loss in a trade of dealing in
commodity futures in respect of which loss relief has been or
may be refused or withdrawn by virtue of Section 399 of the
Taxes Act
F.4.8 The Company has not since 22nd June 1971 entered into any such
transaction as is mentioned in Section 780 of the Taxes Act
F.4.9 The Company has not effected or entered into any act
transactions or arrangement of any nature whereby it has
incurred or may hereafter incur any liability under or by
virtue of any of Section 34 35 36 and 37 of the Taxes Act
F.4.10 Save as provided for in the Accounts the values attributed to
the assets of the Company as at the Accounts Date are such
that no balancing charge will be made on the Company on any
disposal of any asset for a consideration equal to the value
of such asset or assets in the Accounts
F.4.11 The Company has not been a party to nor involved in any
transaction whereby a balancing allowance would be denied or
reduced by virtue of Section 5 CAA
F.4.12 No allowances have been claimed by the Company which are
liable to be reduced or withdrawn by virtue of Section 1(6)
Sections 40-42 or Section 47 CAA
F.4.13 The Company has at no time been a member of a group of
Companies (as defined in Section 170 of the TCGA) other than
the group of companies comprising exclusively of the Company
and its Subsidiary
27
F.4.14 No loss which has arisen or which may arise on the disposal
by the Company of shares in or securities of any company is
liable to be disallowed in whole or in part by virtue of
Section 176 or Section 177 of the Taxes Act
F.4.15 The Company has not at any time been treated as a member of a
group for VAT purposes and no application for it to be so
treated has at any time been made
F.4.16 The Company has not at any time within the period of 6 years
ending with the date hereof acquired any assets other than
trading stock from any company which at the time of the
acquisition was a member of the same group (as defined in
Section 170 of the TCGA) as the Company and pending Completion
no such acquisition will be effected
F.4.17 The Company has not surrendered nor agreed to surrender any
amount by way of group relief under the provisions of Sections
402 to 413 of the Taxes Act
F.4.18 The Company is not and has not at any time been party to any
arrangements falling within Section 410 of the Taxes Act
F.4.19 The Company is not and will not become liable to make any
payment for an amount surrendered by any other company under
or in connection with the provisions of Sections 401-413 or
Section 240 of the Taxes Act
F.4.20 No Taxation arising by reference to a period ending on or
before Completion originally assessed on another member of the
same group of Companies will be payable by the Company
F.4.21 The Company has not at any time:-
F.4.21.1 repaid or redeemed or agreed to repay or redeem any
shares of any class of its share capital or otherwise
reduced or agreed to reduce its share capital or any
class thereof; or
F.4.21.2 capitalised or agreed to capitalise in the form of
shares debentures or other securities or in paying up
any amounts unpaid on any shares debentures or other
securities any profits or reserves of any class or
description or passed or agreed to pass any resolution
to do so
F.4.22 Prior to the date hereof no change in ownership of the
Company nor any major change in the nature or conduct of any
trade or business carried on by the Company has occurred in
circumstances such that Section 245 of the Taxes Act has or
may be applied
F.4.23 The Company has not issued any share capital to which the
provisions of Section 249 of the Taxes Act could apply nor
does it own any such share capital
F.4.24 Since the Accounts Date the Company has not made any purchase
of its own shares such as is mentioned in Section 219 of the
Taxes Act or otherwise in respect of which no Inland Revenue
clearance has been obtained
F.5 Inheritance Tax
F.5.1 The Company has not entered into any transaction which has or
may give rise to a direct or indirect charge to tax under the
provisions of the Inheritance Tax Act 1984
28
F.5.2 The Company is not liable to be assessed to capital transfer
tax or inheritance tax by virtue of any provisions of the
Inheritance Tax Act 1984
F.5.3 There is no unsatisfied liability to capital transfer tax or
inheritance tax attached or attributable to the Shares or to
any assets of the Company such that they are or may hereafter
become subject to an Inland Revenue charge as mentioned in
Section 237 Inheritance Tax Act 1984
F.5.4 The Company is not entitled to an interest in possession in
settled property
F.5.5 No person is liable to capital transfer tax or inheritance tax
attributable to the value of any of the Shares and in
consequence no person has the power to raise the amount of
such tax by sale or mortgage of or by a terminable charge on
any of the Shares as mentioned in Section 212(1) Inheritance
Tax Act 1984
F.6 Stamp Duty
F.6.1 No relief or exemption has been obtained from stamp duty under
Section 75-77 of the FA 1986 or Section 42 of the Finance Act
1930 which:-
F.6.1.1 has become liable to forfeiture; or
F.6.1.2 may be forfeited in the future as a result of this
transfer
F.6.2 All instruments (other than those which has ceased to have any
legal effect) executed by the Company in any part of the
United Kingdom have been duly and correctly stamped or
adjudicated (where required) and the Company has not executed
any other instrument relating to any property situate or to
any matter or thing done or to be done in any part of the
United Kingdom
F.6.3 No documents are held outside the United Kingdom which if
brought into the United Kingdom would require the payment on
any Stamp Duty thereon
F.6.4 The company has not entered into any land transactions
chargeable to Stamp Duty Land Tax since 1st December 2003.
F.7 Tax Avoidance
F.7.1 The Company has not entered into or been a party to any scheme
or arrangements designed partly or wholly for the purpose of
avoiding or deferring Taxation
F.7.2 The Company has not been engaged in or been the subject of any
artificial or fictitious transaction with the object (whether
main or incidental) of avoiding or postponing liability to
Taxation
F.7.3 None of the Company's assets has been acquired for any
consideration in excess of its net realisable value at the
date of such acquisition or otherwise than by way of a bargain
at arm's length
F.7.4 No gain of a capital nature (as defined in Section 776 of the
Taxes Act) has been realised from the disposal of land in
respect of which the Company could be assessed to Taxation
under the provisions of the Section (artificial transaction in
land)
29
F.7.5 The Company has not obtained any Taxation advantage in
consequence of any transaction in securities to which the
provisions of Sections 703 to 709 of the Taxes Act apply
F.7.6 The Company does not and has never carried on trading
activities outside the United Kingdom
F.7.7 The Company has not entered into any unlawful transaction
under Sections 765 to 767 of the Taxes Act
F.7.8 The Company has not received any interest within the scope of
Section 798 of the Taxes Act
F.7.9 The Inland Revenue have not made and could not make any
direction under Section 747 of the Taxes Act pursuant to which
any profits of any company could be apportioned to the Company
F.8 Share Schemes
The Company has not established any share scheme or profit sharing
for employees or directors or any other persons or any similar
scheme by whatever name called
F.9 Loans to Participators etc
F.9.1 The Company has not made any such transfer as is referred to
in Section 125 of the TCGA
F.9.2 The Company has not since the Accounts Date made and is not to
be regarded as having made or given any such loan or advance
or incurred any such expense as is mentioned in Sections 419
and 420 (loans to participators) or Section 418 (payment etc.
to participators and associates) of the Taxes Act
F.9.3 The Company is not liable to be assessed to capital transfer
tax or inheritance tax by virtue of Section 202 Inheritance
Tax Act 1984
F.9.4 Since the date of the last accounts of the Company which have
been agreed with the Revenue the Company has not entered into
any business or dealings with any person who is or was a
participator of the Company (or any associate of such
participator) as such expressions are defined in the Taxes Act
F.10 VAT
F.10.1 Each member of the Group Companies is treated as a member of a
group of companies for the purposes of section 43 VATA (the
"VAT Group") of which the representative member is the Company
(the "Representative Member") and no company which is not a
member of the Group Companies is a member of the VAT Group nor
has any such company been a member of the VAT Group within the
last six years.
F.10.2 The Representative Member has made, given, obtained and kept
full, complete correct and up-to-date records, invoices and
other documents appropriate or required for the purposes of
VATA, is not in arrears with any payments or returns due, and
has not been required by the Commissioners of Customs & Excise
to give security under paragraph 4 of Schedule 11 VATA.
30
F.10.3 All VAT due and payable by the VAT Group to the Commissioners
of Customs & Excise has been declared and paid in full.
F.10.4 The Representative Member has not, since the date 12 months
before the Last Accounts Date, been in default in respect of
any prescribed accounting period, as mentioned in section
59(1) VATA.
F.10.5 No Group Company has, within the six years ending on the Last
Accounts Date, been registered for the purposes of VATA
otherwise than as part of the VAT Group and no member of the
VAT Group has, within that period, been a member of any other
group for the purposes of VATA.
F.10.6 The Disclosure Letter contains full details of any claim for
bad debt relief under section 36 VATA made by the
Representative.
F.10.7 No election has been made by the Company to waive exemption
from VAT in accordance with Paragraph 2 Schedule 6A VATA
F.10.8 All claims for input VAT made by the Company to date relate
to supplies made to the Company and are properly deductible
output VAT
F.10.9 All output VAT on chargeable supplies or deemed supplies have
been properly accounted for
F.10.10 No liability has been incurred in respect of default
interest
F.10.11 There are no errors in VAT returns submitted by the Company
to date that have not been voluntarily disclosed to the
Commissioners at a time when the Company's affairs were not
under investigation by the Commissioners
F.10.12 No liability exists to account for VAT on any supplies made
as agent or in any other capacity for any person not resident
in the United Kingdom
F.10.13 No capital goods have been purchased in respect of which a
future adjustment of the VAT input tax deducted may be
required
F.11 Capital Allowances
F.11.1 There has been no disallowance on the purchase of any plant
and machinery under Sections 75-76 Capital Allowances Act 1990
F.12 Miscellaneous
F.12.1 All Inland Revenue Clearances have been properly obtained
where a clearance would have been available in relation to all
past relevant transactions
F.12.2 The Company has not been the subject of any Inland Revenue or
Customs and Excise Investigation
31
G. Trading
G.1 Since the Last Accounts Date:
G.1.1 the business of the Company has been continued in the ordinary
and normal course so as to maintain it as a going concern;
G.1.2 save as shown in the management accounts attached to the
Disclosure Letter, no material changes have occurred in the
assets and liabilities (whether actual or contingent) shown in
the Last Accounts, and the net asset position of the Company
has not deteriorated in comparison with that at the Last
Accounts Date;
G.1.3 there has been no material deterioration in the Company's
turnover or in its financial or trading position ;
G.1.4 the business of the Company has not been materially and/or
adversely affected by the loss of any important contract or
customer or source of supply; and
G.1.5 save as shown in the management accounts attached to the
Disclosure Letter, none of the amounts secured by the Security
Interests disclosed in the Last Accounts has been increased
beyond the amounts shown in the Last Accounts and no Security
Interest has been created since the Last Accounts Date.
G.2 The Company is not engaged in any litigation or arbitration
proceedings, as claimant or defendant, there are no such proceedings
pending or threatened, either by or against the Company, and so far
as the Vendor is aware there are no circumstances which are likely
to give rise to any litigation or arbitration.
G.3 No investigations or enquiries by, or on behalf of, any governmental
or other body in respect of the affairs of the Company are taking
place or, so far as the Vendor is aware, pending.
G.4 There is no dispute with any revenue or other official department in
the United Kingdom or elsewhere in relation to the affairs of the
Company, and so far as the Vendor is aware there are no facts which
may give rise to any such dispute.
G.5 The Company does not use on its letterheads and other documents
listed in Section 349 of CA, business cards, circulars,
advertisements, web sites, or vehicles, or otherwise carry on
business under, any name other than its full corporate name.
G.6 The Company has conducted and is conducting its business in all
respects in accordance with:
G.6.1 its memorandum and articles of association for the time being
in force; and
G.6.2 any other documents to which it is, or has been, a party.
G.7 The Company has obtained all licences, permissions, authorisations
and consents required for the carrying on of its business, such
licences, permissions, authorisations and consents are in full force
and effect, and so far as the Vendor is aware there are no
circumstances which indicate that any of such licences, permissions,
authorisations or consents may be revoked or not renewed, in whole
or in part.
G.8 No power of attorney given by the Company is in force.
32
G.9 There are no outstanding authorities (express or implied) by which
any person other than the directors and employees of the Company may
enter into any contract or commitment to do anything on behalf of
the Company.
G.10 Except as disclosed in the Last Accounts there is no outstanding
loan capital of the Company and no other loans to the Company are
outstanding.
G.11 All documents of title relating to the assets of the Company are in
its possession.
G.12 Particulars of material agreements or arrangements for the supply of
services, stock, products or goods to or by the Company are set out
in the Disclosure Letter and the Company has not been notified of
nor is the Vendor aware of any breach of any of the Company's
obligations under any such agreement or arrangement.
G.13 There is not outstanding any:
G.13.1 sale or purchase option or similar agreement or arrangement
affecting any assets owned or used by the Company or by which
the Company is bound;
G.13.2 joint venture, consortium, partnership or profit sharing
agreement or arrangement to which the Company is party;
G.13.3 agreement, arrangement or understanding to which the Company
is a party dependant on this Agreement;
G.13.4 agreement restricting the freedom of the Company to provide
and take goods and services by such means and from and to such
persons as it may from time to time think fit.
G.14 The Company is not a party to any contract, transaction
arrangement or liability which:
G.14.1 is of an unusual or abnormal nature, or outside the ordinary
and proper course of business, or
G.14.2 is for a fixed term of more than six months; or
G.14.3 is of a long-term nature (that is, unlikely to have been
fully performed, in accordance with its terms, more than six
months after the date on which it was entered into or
undertaken); or
G.14.4 is incapable of termination by the Company, in accordance
with its terms, on 60 days' notice or less; or
G.14.5 is of a loss-making nature (that is, known to be likely to
result in a loss to it on completion of performance); or
G.14.6 involves payment by it of amounts determined by reference to
fluctuations in the index of retail prices, or any other
index, or in the rate of exchange for any currency; or
G.14.7 involves an aggregate outstanding expenditure by it of more
than (pound)[5,000]; or
G.14.8 involves, or is likely to involve, the supply of goods or
services the aggregate sales value of which will represent in
excess of 10 per cent of its turnover as shown in the Last
Accounts; or
33
G.14.9 is a contract for hire or rent, hire purchase, or purchase by
way of credit sale or periodical payment.
G.15 The Company has not given any guarantee or warranty or made any
representation in respect of articles of trading stock sold or
contracted to be sold by it except for any warranty or guarantee
implied by law and (except in that respect) has not accepted any
liability or obligation to service, maintain, repair, take back or
otherwise do or not do anything in respect of any articles of stock
that would apply after any such article of stock has been delivered
by it.
G.16 The Vendor has no knowledge of the invalidity of or grounds for
rescission avoidance or repudiation of any agreement or other
transaction to which the Company is party, and the Company has
received no notice of any intention to terminate any such agreement
or repudiate or disclaim any other transaction.
G.17 No party with whom the Company has entered into any agreement or
arrangement is in default under that agreement or arrangement, being
a default which would have a material and adverse effect on the
financial or trading position or prospects of the Company.
G.18 The Company is not, nor will it with the lapse of time become, in
material default in respect of any obligation or restriction binding
upon it.
G.19 The Company is not a party to, nor have its profits or financial
position during the three years prior to the date of this Agreement
been affected by, any contract or arrangement which is not of an
entirely arms' length nature.
G.20 There are no existing contracts or engagements to which the Company
is a party and in which the Vendor or any of his respective
Associates are interested.
G.21 The Vendor is not either individually or collectively or with any
other person or persons engaged or concerned or interested in any
way whatsoever in any other business of a similar nature to or
competitive with that carried on by the Company.
G.22 During the three years ending on the date of this Agreement there
has been no substantial change in the basis or terms on which any
person is prepared to enter into contracts or do business with the
Company (apart from normal price changes).
G.23 Without having made any enquiry into the same, the Vendor is not
aware that after Completion (whether by reason of an existing
agreement or arrangement or otherwise) or as a result of the
acquisition of the Company by the Purchaser:
G.23.1 any supplier of the Company will cease, or be entitled to
cease, supplying it or may substantially reduce its supplies;
or
G.23.2 any customer of the Company will cease, or be entitled to
cease, to deal with it or may substantially reduce its
existing level of business; or
G.23.3 the Company will lose the benefit of any right or privilege
which it enjoys; or
G.23.4 any officer or senior employee of the Company is likely to
leave or will be entitled to leave prematurely.
34
G.24 Compliance with this Agreement will not:
G.24.1 breach or constitute a default under any agreement to which
the Company is a party, or any provision of the memorandum or
articles of association of the Company or any order,
judgement, injunction, regulation or other restriction; or
G.24.2 relieve any person from any obligation to the Company
(whether contractual or otherwise), or enable any person to
determine an obligation, or any right or benefit enjoyed by
the Company, or to exercise any right in respect of the
Company; or
G.24.3 result in any indebtedness of the Company becoming due, or
capable of being declared due and payable prior to its stated
maturity, or any loan facilities being withdrawn.
G.25 No one is entitled to receive from the Company any finder's fee,
brokerage or commission in connection with this Agreement or
anything contained in or to be done pursuant to it.
G.26 No disclosure has been made of any of the financial or trade secrets
of the Company except in the ordinary course of business of the
Company and upon the Company having secured the confidential nature
of any such disclosure.
G.27 The Company is under no liability to repay any grant made to it by
any government department or body, and so far as the Vendor is aware
no circumstances have arisen in which any such department or body
would or might be entitled to require repayment of any such grant
either in whole or in part.
G.28 The Company has not engaged in:-
G.28.1 any anti-competitive practice as defined in the Competition
Act 1980 or any other anti-trust, anti-monopoly or
anti-cartel legislation or regulations; nor
G.28.2 any activity, agreement or practice which breaches any law or
regulation for the protection of consumers.
G.29 The Company is not in a dominant position in any market for the
purposes of Article 82 of the Treaty of Rome or Part II of the
Competition Act 1998.
H. Property
H.1 Title
H.1.1 The Property comprises all the land or premises owned,
occupied or otherwise used in connection with their business
by the Group Companies.
H.1.2 No Group Company has at any time:
H.1.2.1 had vested in it (whether as an original tenant or
undertenant or as an assignee, transferee or otherwise)
any freehold or leasehold property other than the
Property; or
H.1.2.2 given any covenant or entered into any agreement, deed
or other document (whether as a tenant or undertenant or
as an assignee, transferee, guarantor or otherwise) in
respect of any freehold or leasehold property in respect
of which any contingent or potential liability remains
with any Group Company.
35
H.1.3 The Company is the legal and beneficial owner of the Property.
H.1.4 The Company has a good and marketable title to the Property.
H.1.5 The Company is the proprietor of the Property registered at HM
Land Registry with absolute title.
H.2 Encumbrances
H.2.1 The Property is free from any mortgage, debenture, charge,
rent-charge, lien or any other Security Interest securing the
repayment of monies or other obligation or liability of any of
the Group Companies or any other person.
H.2.2 The Property is not subject to any outgoings other than
business rates, water rates and insurance premiums, and in the
case of leasehold Property rent and service charges.
H.2.3 The Property is not subject to any restrictive covenants,
stipulations, easements, profits a prendre, wayleaves,
licences, grants, restrictions, overriding interests or other
similar rights vested in third parties.
H.2.4 Where any of the matters referred to in Warranties H.2.1,
H.2.2 and H.2.3 have been disclosed in the Disclosure
Letter, the obligations and liabilities imposed and arising
under them have been fully observed and performed and any
payments in respect of them due and payable have been duly
paid.
H.2.5 The Property is not subject to any option, right of
pre-emption or right of first refusal.
H.3 Planning Matters
H.3.1 The use of the Property is the permitted use for the purposes
of the Planning Acts.
H.3.2 Planning permission has been obtained or is deemed to have
been granted for the purposes of the Planning Acts with
respect to the development of the Property, no permission has
been suspended or called in and no application for planning
permission is awaiting decision.
H.3.3 Building regulation consents have been obtained with respect
to all development, alterations and improvements to the
Property.
H.3.4 The Group Companies have complied and are complying with:
H.3.4.1 all permissions, orders and regulations applicable to
the Property;
H.3.4.2 all agreements under the Town and Country Planning Act
1971 Section 52 made or planning obligations under the
Town and Country Planning Act 1990 Section 106
undertaken with respect to the Property; and
H.3.4.3 all agreements made under the Highways Act 1980
Section 38 with respect to the Property.
36
H.3.5 The Property is not listed as being of special historic or
architectural importance or located in a conservation area.
H.3.6 All claims and liabilities under the Planning Acts or any
other legislation have been discharged and no such claim or
liability, contingent or otherwise, is outstanding, whether in
relation to the Property or to any property formerly owned or
occupied by the Company.
H.4 Statutory Obligations
H.4.1 The Group Companies have complied and are complying with all
applicable statutory and bye-law requirements (and all other
relevant orders, consents or permissions given under any of
them) with respect to the Property.
H.4.2 There is no outstanding and unobserved or unperformed
obligation with respect to the Property necessary to comply
with the requirements (whether formal or informal) of any
competent authority exercising statutory or delegated powers.
H.4.3 No fire certificate is required for the Property.
H.4.4 No licences are required whether under the Licensing Act 1988
or otherwise in relation to the Property.
H.5 Adverse Orders
H.5.1 There are no compulsory purchase notices, orders or
resolutions affecting the Property.
H.5.2 There are no closing, demolition or clearance orders,
enforcement notices or stop notices affecting the Property,
and there are no circumstances likely to lead to any being
made.
H.6 Condition of the Property
H.6.1 So far as the Vendor is aware without having commissioned any
survey into the Property and its state of repair, there are no
structural or material defects in the buildings and other
structures on the Property and all such buildings or
structures are in good repair and condition and fit for the
purposes for which they are used.
H.6.2 Neither the Company nor the Vendor has received any adverse
surveyors', engineers' or other professional reports in
respect of the Property and no material, substance or method
of construction not in accordance with present design standard
and current accepted good building practice was used in the
construction of the Property.
H.6.3 There are no disputes with any neighbouring owner with respect
to boundary walls and fences or with respect to any easement
or right over or means of access to any of the Property.
H.6.4 The principal means of access to the Property is over roads
which have been taken over by the local or other highway
authority and which are maintainable at the public expense,
and no means of access to the Property is shared with any
other party nor subject to rights of determination by any
other party.
37
H.6.5 The Property enjoys the mains services of water, drainage,
electricity and gas.
H.6.6 The Property is not located in an area or subject to
circumstances particularly susceptible to flooding.
H.7 Taxation
The Property has at all times been held by the Company as an
investment and not as trading stock.
I. Environment
I.1 The Company has obtained all requisite Environmental Licences and
has at all times complied with all applicable Environmental Laws and
with the terms and conditions of those Licences.
I.2 The Company has not received any notice or other communication from
which it appears that it may be or is alleged to be in violation of
any Environmental Law or Environmental Licence or that any
Environmental Licence may be subject to modification, suspension or
revocation, and there are no circumstances likely to give rise to
any such violation or modification, suspension or revocation.
I.3 A suitable assessment of risk pursuant to the Control of Substances
Hazardous to Health Regulations 1988 has been carried out by the
Company, and full details of any such assessment (including the
costs of carrying out all remedial work) and of any other
environmental assessment, audit, review or investigation conducted
by or on behalf of any Company are contained in or annexed to the
Disclosure Letter.
I.4 So far as the Vendor is aware, the Company has not used, disposed
of, generated, stored, transported, dumped, released, deposited,
buried or emitted any Dangerous Substance at, on, from or under any
Property or any premises previously owned, leased, occupied or
controlled by the Company or any other premises.
I.5 The Company has not disposed of any Dangerous Substance in the past
in such a way that its disposal would now constitute a breach of any
Environmental Law.
J. Employment
J.1 Material particulars of the identities, dates of commencement of
employment, or appointment to office, and terms and conditions of
employment of all the employees, workers and officers of the
Company, including without limitation profit sharing, commission or
discretionary bonus arrangements, are set out in the Disclosure
Letter.
J.2 All employees of the Company have received a written statement of
particulars of their employment as required by Section 1 of the
Employment Rights Act 1996 to the extent they are so entitled.
J.3 The Company is not bound or accustomed to pay any moneys other than
in respect of remuneration, or emoluments of employment, or pension
benefits to, or for the benefit of, any employee, worker, officer or
shadow director of the Company.
J.4 Since the Last Accounts Date, or (where employment or holding of
office commenced after that date) since the commencing date of such
employment or holding of office, no change has been made in the rate
of remuneration, or the emoluments or pension benefits, of any
employee, worker or officer of the Company.
38
J.5 No agreement has been reached with any employee, worker or officer
of the Company, or with a trade union or other body representing
employees, that will or may on a future date result in an increase
in any employee's, worker's or officer's rate of remuneration or
enhanced emoluments or pension benefits.
J.6 No negotiations for any increase in the remuneration, emoluments or
pension benefits of any employee, worker or officer of the Company
are current or (based on past practice) anticipated to take place
within 6 months after the date of Completion.
J.7 The salaries and other benefits of all employees, workers and
officers of the Company have been paid up to Completion.
J.8 No employees, workers or officers of the Company are on secondment,
maternity leave or absent on grounds of disability or other long
term leave of absence.
J.9 No outstanding offer of employment has been made by the Company to
any person, nor has any person accepted an offer of employment made
by the Company but has not yet commenced such employment.
J.10 The Company has not entered into any actual or purported
arrangements with self employed consultants.
J.11 All subsisting contracts of employment or contracts for services to
which the Company is a party are determinable at any time by the
Company on 3 months' notice or less without compensation (other than
statutory compensation for unfair dismissal).
J.12 No employee, worker or officer has given notice to the Company, or
been given notice by the Company, terminating his contract of
employment which is outstanding as at the date of this Agreement.
J.13 No employee, worker or officer will be entitled by reason of the
transactions contemplated by this Agreement to any one-off payment,
bonus or commission or to terminate his employment other than on
normal contractual terms.
J.14 No outstanding liability has been incurred by the Company for breach
of any contract of employment or contract for services or redundancy
payments, protective awards, compensation for wrongful dismissal or
unfair dismissal or for failure to comply with any order for the
reinstatement or re-engagement of any employee or in respect of any
other liability arising out of the termination of any contract of
employment or contract for services.
J.15 There are no claims pending or threatened, or so far as the Vendor
is aware capable of arising, against the Company by any former
employee of the Company, whether in relation to the termination of
his employment or otherwise.
J.16 There are no claims pending or threatened or so far as the Vendor is
aware capable of arising against the Company by an employee,
independent contractor or any other third party, in respect of any
accident, disease, illness or injury, which are not fully covered by
insurance.
39
J.17 In the 12 months preceding this Agreement, no improvement or
prohibition notice has been served on the Company in connection with
the conduct of its business by any body responsible for Health and
Safety.
J.18 In the 12 months preceding this Agreement, there has been in
relation to the Company no recommendation made by an employment
tribunal nor any investigation by any body responsible for
investigating or enforcing matters relating to sex, race or
disability discrimination.
J.19 There are no schemes (whether contractual or discretionary) in
operation by, or in relation to, the Company under which any
employee, worker or officer of the Company or former employee,
worker or officer is entitled to any bonus, profit-share, commission
or other incentive scheme (whether calculated by reference to the
whole or part of the turnover, profits/losses or sales of the
Company or otherwise).
J.20 All employees, workers or officers of the Company who (to the best
knowledge of the Company or Vendor) require a work permit have such
a permit in force.
J.21 In relation to any contract of employment between the Company and
any of its directors, all requirements of Part X of CA have been
fulfilled.
J.22 In relation to each of its employees and workers, the Company has
complied in all material respects with all statutes and regulations
relating to employment, terms and conditions of employment and
orders and awards relevant to their conditions of service.
J.23 During the period of 6 years preceding the date of this Agreement,
the Company has not been a party to any "relevant transfer" (as
defined in the Transfer of Undertakings (Protection of Employment)
Regulations 1981) or failed to comply with any duty to inform and
consult with appropriate representatives of any affected employees
under Regulation 10 of the Transfer of Undertakings (Protection of
Employment) Regulations 1981.
J.24 During the 12 months preceding the date of this Agreement, the
Company has not given notice of any redundancies to the relevant
Secretary of State or started consultations with any trade union
under Chapter II of Part IV of the Trade Union and Labour Relations
(Consolidation) Act 1992 or failed to comply with any of its
obligations under Chapter II of Part IV of such Act.
J.25 There are no severance, redundancy or other similar agreements or
schemes conferring any entitlement on any of the employees, workers
or officers of the Company to receive any payment on the termination
of their employment (except for contractual notice pay).
J.26 The Company has not entered into any collective agreement or
arrangements with, nor does it recognise, a trade union, works
council, staff association or other body representing any of its
employees, nor has it done any act which might be construed as
recognition.
J.27 Neither the Company nor its employees or workers is involved in any
actual or threatened trade dispute as defined by Section 218 Trade
Union and Labour Relations (Consolidation) Act 1992.
J.28 No dispute has arisen during the 6 years preceding the date of this
Agreement between the Company and any material number or category of
its employees or workers (or any trade union or other body
representing all or any of such employees or workers) and, so far as
the Vendor is aware, there are no facts, matters or circumstances
which may give rise to any such dispute.
40
K. Pensions
Short Form Pensions Warranties
K.1 The Company is not under any legal liability or obligation, or a
party to any ex-gratia arrangement or promise, to pay pensions,
gratuities, superannuation allowances or the like, or otherwise to
provide "relevant benefits" within the meaning of ICTA s 612, to or
for any of its past or present officers or employees or their
dependents; and there are no retirement benefit, or pension or death
benefit, or similar schemes or arrangements in relation to, or
binding on, the Company.
Stakeholder Pensions
K.2 The Company has complied with the requirements set out in Section 3
of the Welfare Reform and Pensions Act 1999, and in particular:
K.2.1 has designated the stakeholder pension scheme referred to in
the Disclosure Letter (the "Stakeholder Scheme") for the
purposes of Section 3(2) of that Act;
K.2.2 after consulting with its relevant employees and any
organisations representing them as required by that section;
K.2.3 has complied with paragraphs 24 and 25 of the Stakeholder
Pension Schemes Regulations 2000 in making payroll deduction
of contributions and disclosing information as requested by
employees; and
K.2.4 has complied with the timing requirements of the Occupational
Pensions Regulatory Authority in making contribution payments
to the Stakeholder Schemes.
K.3 The Stakeholder Scheme is a stakeholder pension scheme for the
purposes of Part I of the Welfare Reform and Pensions Act 1999.
K.3.1 A true copy of the Stakeholder Scheme certificate is is
annexed to the Disclosure Letter
L. Assets
L.1 The Company owned at the Last Accounts Date, and had good and
marketable title to, and (except for current assets subsequently
sold or realised in the ordinary course of business) still owns and
has good and marketable title to, all the assets included in the
Last Accounts and to all assets acquired since the Last Accounts
Date and not subsequently sold or realised as mentioned.
L.2 The asset registers of the Company comprise a true record of all the
plant, machinery, equipment, vehicles and other assets owned or
possessed by the Company.
L.3 All stock of the Company is of normal merchantable quality, saleable
in the normal course of business, and no goods sold or delivered or
to be sold or delivered or in a state ready for sale and delivery
have been or will be defective or in any way, fail or will fail to
comply with their terms of sale or (in the case of goods ready for
sale and delivery) would fail to comply with terms of sale similar
to terms of sale upon which similar goods have previously been sold
by the Company so as to give a right of action against the Company,
whether pursuant to statutory provisions for the time being in force
relating to the supply of goods or otherwise or for breach of
contract, negligence or otherwise.
41
L.4 The stocks of raw materials, packaging materials and finished goods
now held by the Company are not excessive and are adequate in
relation to the current trading requirements of the business of the
Company.
L.5 The plant, machinery, equipment, vehicles and other equipment used
in connection with the business of the Company:
L.5.1 are in a good and safe state of repair and condition and
satisfactory working order;
L.5.2 have been regularly and properly maintained;
L.5.3 are not to any extent surplus to requirements;
L.5.4 are in the possession and control of, and are the absolute
property of, the Company, except for those items the subject
of the hire purchase, leasing or rental agreements listed in
the Disclosure Letter.
L.6 Particulars of all maintenance contracts are included in the
Disclosure Letter and are in full force and effect. All such assets
have been regularly maintained .
L.7 None of the assets used by the Company is owned by the Vendor or his
Associates.
L.8 None of the assets owned by the Company is in the possession of the
Vendor or his Associates.
L.9 The Company has not created or granted or agreed to create or grant
any Security Interest or other encumbrance in respect of any of the
fixed assets included in the Last Accounts (excluding the Property)
or acquired or agreed to be acquired since the Last Accounts Date,
otherwise than in the ordinary course of its business.
L.10 None of the property, assets, undertaking, goodwill or uncalled
capital of the Company (excluding the Property) is subject to any
Security Interest, option or right of pre-emption.
M. Insurances
M.1 There is attached to the Disclosure Letter a register of the current
insurances maintained by the Company together with copies of the
relevant insurance policies.
M.2 All such insurances are currently in full force and effect and
nothing has been done or omitted or be done which could make any
such policy of insurance void or voidable or which is likely to
result in an increase in premium.
M.3 No claim is outstanding under any of such insurance policies and no
circumstances exist which are likely to give rise to a claim.
42
N. Intellectual Property
N.1 The Company owns no Intellectual Property Rights.
N.2 No Intellectual Property Rights are required for the proper carrying
on of the Company's business as carried on at today's date.
N.3 The Company has not (except in the normal course of business)
disclosed, or agreed to disclose, to any person other than the
Purchaser any of its know-how, trade secrets, confidential
information, price lists or lists of customers or suppliers.
N.4 The Company is not party to any secrecy agreement or agreement which
may restrict the use or disclosure of information.
N.5 The Vendor does not own any Intellectual Property Rights of any kind
which could, if transferred to the Company, be exploited by it in
the normal course of or in conjunction with the business now carried
on or proposed to be carried on by the Company.
O. Data Protection and Privacy
O.1 The Company is not registered under the Data Protection Act 1998
O.2 The Company has not received any notice or allegation from either
the Information Commissioner or a data subject alleging
non-compliance with the data protection principles or prohibiting
the transfer of data to a place outside the United Kingdom.
O.3 No individual has claimed compensation from the Company under the
Data Protection Act 1998 for loss or unauthorised disclosure of
data.
O.4 The Company's has no email and internet policy for its employees or
privacy policy for customers and other third parties dealing with
it.
O.5 The Company has not intercepted communications in a manner which
amounted to conduct that was not authorised by the
Telecommunications (Lawful Business Practice) (Interception of
Communications) Regulations 2000.
43
Schedule 5: Tax Covenant
(Clauses 1.1, 6)
1. Definitions and Interpretation
1.1 In this Tax Covenant:
1.1.1 references to the "Company" include each other Group
Company, as if this Deed had been entered into separately
in respect of each Group Company;
1.1.2 where the context so admits, the following words and
expressions have the meanings set out against each or given
in the provision of this Schedule cross-referenced against
each (as applicable):
"Claim" any assessment, notice, demand, letters or other document issued, or
action taken, by or on behalf of any person, authority or body in
any part of the world from which it appears that the Company is
liable or is sought to be made liable to make any payment of
Taxation (whether or not the same is primarily payable by the
Company and whether or not the Company has, or may have, any right
of reimbursement against any other person), or is deprived or is
sought to be deprived of any Relief or right to repayment of
Taxation
"Due Date" see paragraph 5.3
"Event" any act, failure, omission or transaction whether or not the Company
is a party to it and including (without limitation) completion of
the sale of the Shares to the Purchaser and any distribution,
acquisition, disposal, transfer, payment, loan, advance or land
transaction (as defined in section 43 FA2003)
"Liability (i) a Payment of Taxation made or to be made by
or Liabilities" the Company; or
(ii) the unavailability, loss, reduction or
cancellation of a Relevant Relief; or
(iii) Inheritance Tax in respect of which the
Inland Revenue has a charge on any of the shares
or assets of the Company or which becomes a
charge on or which gives rise to a power to
sell, mortgage or charge any of the shares or
assets of the Company; or
(iv) a liability of the Company to make a
payment by way of reimbursement, recharge,
indemnity, damages for breach of contract or
management charge; or
(v) a payment or obligation to pay stamp duty
(together with interest and penalties); or
44
(vi) any costs or expenses reasonably incurred
by the Purchaser or the Company; or
(vii) the setting off against tax liabilities,
income, profits or gains earned, accrued
incurred or received on, or before Completion,
of any Relief not available before Completion,
but arising in respect of any event occurring
after Completion in circumstances where but for
the setting off, the Company would have had an
actual tax liability in respect of which the
Purchaser would have had a claim under the Tax
Covenant; and
(viii) the setting off of a right to the
repayment of Tax against any actual liability in
respect of which the Purchaser would, but for
the setting off, have been able to claim against
the Vendor;
"Payment of Taxation" any payment of Taxation payable by the Company (and
whether or not the Company has, or may have, any right of
reimbursement against any other person) and including any payment of
Taxation which would have been due to be made but for the
utilisation of any Relevant Relief
"Relevant see paragraph 7.3
Amount"
"Relevant any relief taken into account in computing and so reducing or
Relief" eliminating any provision for Taxation (to include deferred
Taxation) which is made in the Last Accounts or would have been so
made but for the absence of such Relief and so reducing or
eliminating any provision for Taxation (including deferred Tax)
which appears in or is treated as an asset in the Last Accounts or
any Relief which arises to the Company by reason of an Event
occurring after Completion
"Relief" any loss, allowance, credit, relief, deduction or set off in respect
of Taxation or any right to a repayment of Taxation
1.1.3 References to the result of Events on or before
Completion include:
1.1.3.1 the combined result of two or more Events the first of
which took place on or before Completion;
1.1.3.2 any Event which took place before Completion in
respect of which the Liability is recomputed after Completion;
45
1.1.4 References to income or profits or gains earned, accrued
or received include income or profits or gains deemed to have been or treated as
or regarded as earned, accrued or received for the purposes of any statutes
relating to Taxation.
1.1.5 References to specific United Kingdom Taxes or Taxation
Authorities include equivalent or similar Taxes or Taxation Authorities in other
jurisdictions, and any accompanying wording is to be construed accordingly.
1.2 Without limiting the generality of the expression, reference in this
Tax Covenant to anything "in the ordinary course of business" does not include:
1.2.1 an Event which results in the Company becoming liable
for Taxation for which it is not primarily liable or as the United Kingdom
representative of a person who is not resident in the United Kingdom;
1.2.2 the acquisition, disposal or supply or deemed
acquisition, disposal or supply of any asset, service or facility (including a
loan of money or the letting, hiring or licensing of tangible or intangible
property) in a transaction which is not entered into at arms' length;
1.2.3 the making of a distribution or deemed distribution, the
creation, cancellation or reorganisation of any share or loan capital, or any
company becoming or ceasing to be a member of a group of companies for any
Taxation purpose;
1.2.4 the failure by the Company to deduct or account for
Taxation;
1.2.5 any Liability arising from the disposal, acquisition or
deemed disposal or acquisition of any asset other than trading stock;
1.2.6 an Event giving rise to a Liability under any of the
statutory provisions specified in Warranty F.7 in Schedule 4 (Anti Avoidance
Provisions);
1.2.7 any liability arising as a result of the Company ceasing
for Tax purposes to be a member of any group or associated with any other
company;
1.2.8 a transaction or arrangement which includes, or a series
of transactions or arrangements which includes, any step or steps having no
commercial or business purpose apart from the reduction, avoidance or deferral
of a liability for Taxation; or
1.2.9 any Event which gives rise to deemed income, profits or
gains (including capital gains) or deemed supplies for value added tax purposes.
2. Covenant
2.1 Subject as provided in this Tax Covenant, the Vendor covenants
with and undertakes to the Purchaser to pay to the Purchaser an amount equal to
any of the following Liabilities:
2.1.1 any Payment of Taxation made or to be made by the
Company where such Taxation results from, or is calculated by reference to any
income, profits or gains earned, received or accrued by the Company on or before
Completion or which results from or is calculated by reference to any Event
which occurred on or before Completion or was deemed to occur on or before
Completion for the purposes of Taxation;
46
2.1.2 the value to the Company of a Relevant Relief which is
unavailable, lost reduced or cancelled in consequence of an Event occurring on
or before Completion (and for this purpose the value to the Company is the
Taxation which would have been saved but for the unavailability, loss, reduction
or cancellation of the Relevant Relief or the amount of the repayment of
Taxation which is unavailable, lost, reduced or cancelled);
2.1.3 any Inheritance Tax which is unpaid at Completion and in
respect of which the Inland Revenue has a charge on any of the shares or assets
of the Company, or gives rise to a power to sell, mortgage or charge any of the
shares or assets of the Company or which after Completion becomes a charge on or
gives rise to a power to sell, mortgage or charge any of the shares or assets of
the Company, being a liability in respect of Inheritance Tax payable as a result
of the death of any person within seven years after a transfer of value (or a
deemed transfer of value) if a charge on or power to sell, mortgage or charge
any such shares or assets existed at Completion or would have existed at
Completion, if the death had occurred immediately before Completion and the
Inheritance Tax payable as a result of it had not been paid;
2.1.4 any reasonable costs or expenses properly incurred by
the Purchaser or the Company in connection with or in consequence of any of the
matters referred to in paragraphs 2.1.1 to 2.1.3 inclusive or any claim
therefor or in taking or defending any action under this Tax Covenant.
2.2 Subject as provided in this Tax Covenant, the Vendor covenants with
and undertakes to the Purchaser to pay to the Purchaser in respect of a breach
by the Vendor of any Warranty relating to stamp duty, stamp duty land tax or
stamp duty reserve tax a sum by way of damages in respect of the reduction in
value of the Shares calculated as follows:
2.2.1 an amount equal to the stamp duty or stamp duty reserve
tax paid or payable by the Company in respect of which there is such a breach of
Warranty; plus
2.2.2 interest on all such damages under this paragraph 2.2
payable from the date of such breach to the date of payment of such damages at
the rate or rates set by the Treasury for such period pursuant to Section 178 FA
1989 and for the purposes of this covenant such breach is to be treated as
having occurred:
2.2.3 for stamp duty purposes, on the date on which interest
begins to be payable on unpaid duty in accordance with Section 15A Stamp Act
1891; and
2.2.4 for stamp duty reserve tax purposes, on the date on
which interest begins to be payable in accordance with regulations made under
Section 89 FA 1985
2.2.5 for stamp duty land tax purposes on the date on which
interest begins to be payable in accordance with regulations made under relevant
legislation save that no amount shall be payable in accordance with this
paragraph 2.2 unless the relevant document is required to be enforced by the
Company or is required to be stamped by law or by Court order.
47
2.3 Each paragraph in the above sub-paragraphs 2.1.1 to 2.1.4 and
paragraph 2.2 constitutes a separate covenant independent each from the other
and its interpretation and extent is not restricted by any other such paragraph.
3. Exclusions
The covenants contained in paragraph 2.1 or paragraph 2.2 do not apply
to any Liability:
3.1 to the extent that specific provision or reserve in respect of
such Liability was made in the Last Accounts;
3.2 to the extent that such Liability arises solely as a result of
transactions in the ordinary course of business of the Company after the Last
Accounts Date;
3.3 to the extent that such Liability would not have arisen but for
any voluntary act or omission of the Company (including any cessation of trade)
after Completion which the Company knew would give rise to such Liability but
excluding any act:
3.3.1 carried on pursuant to a legally binding obligation of
the Company incurred prior to Completion;
3.3.2 pursuant to an obligation imposed by any law, regulation
or requirement having the force of law;
3.3.3 taking place with the written approval of the Vendor or
pursuant to the Agreement or any document executed pursuant to the Agreement;
3.3.4 occurring in the ordinary course of business of the
Company; or
3.3.5 constituting the lodging of a document for stamp duty at
the Stamp Office of the Inland Revenue (or other equivalent Taxation Authority
outside the United Kingdom) or the bringing into the United Kingdom of any
document executed prior to Completion outside the United Kingdom;
3.4 to the extent that such Liability arises or is increased only as
a result of any increase in rates of Taxation made after Completion with
retrospective effect or of any change in law occurring after Completion with
retrospective effect;
3.5 to the extent that the Purchaser has made recovery in respect of
such Liability under any provision of the Agreement;
3.6 to the extent that such Liability resulted from or is increased
by the change of the accounting reference date of the Company on or after
Completion or by any change in the accounting practices of the Company, except
where such change is made to comply with generally accepted accounting practice;
or
3.7 to the extent that any Relief (other than a Relevant Relief) is
available to reduce or eliminate such liability;
3.8 to the extent that any such liability for Taxation would not
have arisen but for a disclaimer by the Company after Completion of capital
allowances or any other Relief available to and claimed by the Company before
Completion;
48
3.9 to the extent that the Liability is limited as stated in Clause
7 of this Agreement.
4. Conduct of Claims
4.1 If the Purchaser or the Company becomes aware of any Claim or of
circumstances likely to give rise to such a Claim, the Purchaser or the Company
(as the case may be) must as soon as reasonably practicable give written notice
of it to the Vendor setting out reasonable particulars of it (but failure to
give such notice will not be a waiver of the liability of the Vendor under this
Tax Covenant).
4.2 Subject to paragraphs 4.3 and 4.4, if the Vendor indemnifies
and secures the Purchaser or the Company (as the case may be) to its reasonable
satisfaction against any losses, fines, penalties, costs, charges, expenses,
additional Taxation and interest which may be incurred thereby the Company must
take, and the Purchaser must procure that the Company takes, such action as the
Vendor may reasonably request to avoid, dispute, resist, appeal, compromise or
defend such Claim.
4.3 The Company will not be obliged to comply with any request of
the Vendor which involves contesting any Claim before any court or other
appellate body unless the Vendor has obtained the written opinion of Tax Counsel
of at least ten years' call that such contest will, on the balance of
probabilities, be successful.
4.4 The Purchaser and the Company will be free to take such action
as they may in their absolute discretion think fit (and without prejudice to
their rights and remedies under this Deed) if within 21 days of service of the
notice under paragraph 4.1 the Vendor fail to notify the Purchaser of his
intention to resist such Claim or fail within a reasonable period after such
notification to give the indemnity and security referred to in paragraph 4.2.
4.5 Paragraph 4.2 does not apply if either the Vendor or (on or
before Completion) the Company has committed acts or omissions which constitute
or are alleged in writing by the relevant authority to constitute fraud or
negligent conduct.
5. Due Date and Interest
5.1 Subject to clause 2.3 of Schedule 6, the Vendor must pay to the
Purchaser any amount covenanted to be paid under this Tax Covenant on the later
of the date:-
5.1.1 10 Business Days after a written request for payment is
made by the Purchaser or the Company to the Vendor; or 5.1.2 3 Business Days
prior to the date on which the Company is required to discharge or deemed to
discharge the Claim or Liability for Tax in respect of which that amount is
covenanted to be paid under this Tax Covenant.
5.2 For the purposes of paragraph 5.1 the Company is deemed to discharge
a Claim:
5.2.1 on the date on which the Company pays any amount of
Taxation;
5.2.2 on the date on which any Claim would have fallen due but
for the availability of Reliefs, rights of repayment or other rights or claims
of a similar nature.
5.3 Any sums not paid by the Vendor by the due date for their
payment (the "Due Date") will bear interest (accruing from day to day both
before and after any judgement) at the rate of 4% per annum above the base rate
of Lloyds TSB Bank plc from the Due Date to and including the day of actual
payment of such sums. Such interest must be paid on demand of the Purchaser.
49
6. Withholding and Taxation
6.1 Subject to paragraph 6.2 all payments made by the Vendor under
this Tax Covenant must be made gross, free of any rights of counterclaim or set
off and without any deductions or withholdings of any nature, except for such
deductions or withholdings as are required by law.
6.2 If the Vendor is required by law to make any deduction or
withholding from any payment under this Tax Covenant, he must do so and the sum
due in respect of such payment will be increased to the extent necessary to
ensure that after the making of such deduction or withholding the Purchaser
receives and retains (free of any liability in respect of any such deduction or
withholding) a net sum equal to the sum it would have received and retained had
no such deduction or withholding been required to be made. If the Purchaser
subsequently receives a credit for such deduction or withholding, then such
credit is to be applied in accordance with the provisions of paragraph 7.3.
6.3 If the payment under this Tax Covenant is subject to Taxation in
the hands of the Purchaser the Vendor must within 7 days of notice being served
on him by the Purchaser pay to the Purchaser such further amount or amounts as
will ensure that the net amount received in respect of any payment due from the
Vendor under this Tax Covenant after such Taxation is the same as it would have
been were the payment not so subject to such Taxation.
7. Over provisions, reliefs etc
7.1 If any provision for Taxation in the Last Accounts (excluding
any provision for deferred Taxation) has proved to be an over-provision, then
provided that the auditors for the time being of the Company have certified the
extent of the over-provision (at the request of either party and that party's
expense) the amount of such over-provision is to be dealt with in accordance
with paragraph 7.3.
7.2 If any Taxation which has resulted in a payment having been made
or becoming due from the Vendor under this Tax Covenant will give rise to a
Relief for the Company which would not otherwise have arisen, then provided that
the auditors for the time being of the Company have certified (at the request
and expense of the Vendor) the amount of such Relief as and when the liability
of the Company to make an actual payment of or in respect of Taxation is reduced
by reason of that Relief and after taking account of the effect of all other
Reliefs that are or become available to the Company (including any Relief
derived from a subsequent accounting period) the amount by which that liability
is so reduced is to be dealt with in accordance with paragraph 7.3.
7.3 Where it is provided in this Tax Covenant that any amount (the
"Relevant Amount") is to be dealt with in accordance with this paragraph 7.3:
7.3.1 the Relevant Amount must first be set off against any
payment then due from the Vendor under this Tax Covenant;
7.3.2 to the extent there is an excess, a refund must be made
to the Vendor of any previous payment or payments made by the Vendor under this
Deed or under the Warranties relating to Taxation and not previously refunded
under this Clause up to the amount of such excess; and
50
7.3.3 to the extent that the excess referred to in paragraph
7.3.2 is not exhausted under that Clause, the remainder of that excess must be
carried forward and set off against any future payment or payments which become
due from the Vendor under this Tax Covenant or under the Warranties relating to
Taxation.
7.4 Where any such certification as is mentioned in paragraphs 7.1
or 7.2 has been made, the Vendor or the Purchaser or the Company may request
that the auditors for the time being of the Company review such certification in
the light of all relevant circumstances, including any facts which have become
known only since such certification, and certify whether such certification
remains correct or whether in the light of those circumstances the amount that
was the subject of such certification should be amended.
7.5 If the auditors certify under paragraph 7.4 that an amount
previously certified should be amended, then that amended amount must be
substituted for the purposes of paragraph 7.3 as the Relevant Amount in respect
of the certification in question in place of the amount originally certified,
and such adjusting payment (if any) as may be required by virtue of the
above-mentioned substitution must be made as soon as practicable by the Vendor
or (as the case may be) dealt with in accordance with paragraph 7.3.
8. Recovery from other persons
If, in the event of any payment becoming due from the Vendor under the Tax
Covenant, the Company either is immediately entitled at the due date for the
making of that payment to recover from any person (not being a Group Company but
including any Taxation Authority) any sum in respect of the Liability that has
resulted in that payment becoming due from the Vendor or at some subsequent date
becomes entitled to make such a recovery, then:
8.1 the Purchaser must procure that the Company promptly notifies
the Vendor of its entitlement and, if so required by the Vendor and at the
Vendor's sole expense, takes all appropriate steps to enforce that recovery
(keeping the Vendor fully informed of the progress of any action taken); and
8.2 if the Vendor has made a payment under the Tax Covenant in
respect of the Liability in question, the Purchaser must account to the Vendor
for whichever is the lesser of:
8.2.1 any sum so recovered by the Company in respect of that
Liability (including any interest or repayment supplement paid by the Taxation
Authority or other person on or in respect thereof but less any Taxation
chargeable on the Company in respect of that interest and all costs and expenses
reasonably and properly incurred by the Company or the Purchaser (as
appropriate); and
8.2.2 the amount paid by the Vendor under the Tax Covenant in
respect of that Liability.
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Schedule 6: Limitation of Liability
(Clause 7)
1. Limitation of Liability
1.1 The provisions of this Schedule 6 operate to limit the liability of
the Vendor under the Warranties and (where specified) the Tax Covenant, and
references to "such liabilities" or to the Warranties are to be construed
accordingly.
1.2 In this Schedule:-
"Warranty Claim" means any claim under or in connection with the
Warranties;
"Tax Claim" means any claim under or in connection with the Tax Covenant;
and
"Claim" means either a Warranty Claim or a Tax Claim.
2. Financial Limits
2.1 No liability will attach to the Vendor in respect of any individual
breach of the Warranties unless such liability exceeds (pound)5,000.
2.2 The aggregate amount of such liabilities will not exceed the value of
the Consideration Shares. The Purchaser hereby agrees that The Vendor shall only
be required to meet such liabilities from the proceeds of the sale of the
Consideration Shares or by the buy back by the Purchaser of the Consideration
Shares at market value (provided that the Vendor shall be under no obligation to
accept an offer to buy back the Consideration Shares unless such offer is at the
higher of market value at the date of the buy back or (pound)2.40 per share)
3. Time Limits
3.1 Claims against the Vendor will be wholly barred and unenforceable
unless written particulars of them (giving sufficient general details of the
matter or claim in respect of which such claim is made to enable the Vendors to
understand the facts giving rise to, the basis and the likely amount of the
claim, so that they may take such steps as are available to them to deal with
it) have been given to the Vendor within a period of 6 years from the date of
this Agreement (in the case of any Tax Claim or 2 years from the date of this
Agreement in the case of any other claim.
3.2 Any Claim shall (if it has not previously been settled or withdrawn)
be deemed to have been withdrawn at the expiration of six months after the date
on which notice after the date on which notice thereof is first given to the
Vendor pursuant to the provisions of this Schedule unless proceedings in respect
of it have been commenced by being both issued and served on the Vendor.
4. Other Benefit
4.1 If the Vendor make any payment by way of damages (the "Relevant
Payment") for breach of the Warranties and the Purchaser receives, subsequent to
the making of the Relevant Payment, any payment, credit or allowance otherwise
than from the Vendor which:-
4.1.1 is not already taken into account in calculating the
level of the Relevant Payment; and
4.1.2 would not have been received but for the circumstances
giving rise to the Claim in respect of which the Relevant Payment was made;
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Then once the excess amount paid has been established or, once the
Purchaser or the Company has received such benefit (as the case may be), the
Purchaser shall as soon as reasonably practicable repay to the Vendor an amount
equal to the lesser of:-
(a) the amount of such benefit (as the case may be); and
(b) the Relevant Payment.
In each case less the Purchaser's reasonable unrecovered costs relating
thereto.
4.2 Without prejudice to the generality of Clause 4.1, its provisions
apply where any Group Company is entitled to recover from its insurers (in
respect of insurance effected on or before the Completion Date) any sum in
respect of any matter giving rise to a claim under the Warranties, subject to
the Vendor being liable for any increase in premium over the next 3 years as a
direct result of such Claim.
5. Reduction in Consideration
Any amount paid by the Vendor pursuant to the Warranties or the Tax Deed
shall be regarded as a reduction of the Consideration.
6. Reduction in Liability
6.1 The liability of the Vendor in respect of any Claim shall be reduced:-
6.1.1 to the extent of the amount by which any Taxation for
which the Company is liable to be assessed or accountable is reduced or
extinguished as a result of any such liability; and
6.1.2 to the extent of the amount of any losses or other
allowable sums available (as a result of any such liability) for set off against
Taxation; and
6.1.3 by the amount by which any reserves or provisions in the
last accounts are found to be in excess of the amounts actually required in
respect of the matters for which provisions or reserves were made, and any
reduction in the amount of liability under this paragraph 6 shall be taken into
account for the purpose of ascertaining the amount of the loss sustained in
connection with the financial limits referred to in paragraph 3 of this Schedule
6.
6.2 The Vendor will have no liability (or such liability will be reduced)
in respect of any Claim:
6.2.1 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;
6.2.2 if and to the extent that the Claim occurs as a result of or
is otherwise attributable to the Purchaser or any Group Company disclaiming any
part of the benefit of capital or other allowances against Taxation claimed or
proposed to be claimed on or before the date of this Agreement;
6.2.3 if and to the extent that the Claim is attributable to any
voluntary act or omission of, or transaction or arrangement carried out by, the
Purchaser or any Group Company after the Completion Date otherwise than in the
ordinary course of business;
6.2.4 if and to the extent that the Claim would not have arisen, or
would have been reduced or eliminated, but for the failure or omission on the
part of the Purchaser or any Group Company to make any claim, election,
surrender or disclaimer or give notice or consent or do any other thing under
the provisions of any enactment or regulation relating to Taxation after the
date of Completion, the making, giving or doing of which was taken into account
in computing the provision for Taxation in the Last Accounts;
53
6.2.5 if and to the extent that the 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 any Group Company;
6.2.6 if and to the extent the Claim would not have arisen but for a
change of accounting policy or practice or accounting reference date of any
Group Company after the date of Completion;
6.2.7 if and to the extent that such breach has arisen in respect of
any act or omission stipulated or required to be carried out or omitted pursuant
to the terms of this Agreement.
7. Mitigation
Nothing in this Clause 5 derogates from the Purchaser's obligation to
mitigate any loss which it suffers in consequence of a breach of the Warranties.
8. Notification / Payment of Warranty Claims
8.1 The Purchaser shall (in the manner specified in paragraph 3.1 of this
Schedule 6) notify the Vendor of any Warranty Claim within 60 business days of
the Purchaser becoming aware of the same.
8.2 If any matter or circumstance which my give rise to a Warranty Claim
comes to the attention of the Company or the Purchaser, the Purchaser shall
(without prejudice to paragraph 3.2):-
8.2.1 ensure that no admission of liability or agreement or
compromise in relation to the matter or circumstance is made without the written
consent of the Vendor (not to be unreasonably withheld or delayed);
8.2.2 give the professional advisers of the Vendor such access
to the premises and personnel of the Company as it may request, and afford it
any opportunity it requests to examine any relevant accounts, documents records
and other things in the possession or control of the Company to enable the
Vendor to give their consent pursuant to paragraph 8.2.1 above;
8.2.3 subject to the Purchaser being indemnified to its
reasonable satisfaction, take reasonable steps to avoid, dispute, resist,
appeal, compromise or defend any matter which may otherwise result in a Warranty
Claim provided that neither the Purchaser nor the Company shall be required to
take any such steps if in the Purchaser's opinion that step may damage the
goodwill of the Company and / or the Purchaser.
9. Purchaser Acknowledgements
9.1 The Purchaser acknowledges that it has not been induced to enter into
this Agreement by any representation or warranty other than the Warranties and
warrants that it is not aware of any fact matter or circumstance which would
allow it to make a Claim.
54
9.2 By way of confirmation, the Purchaser agrees that it shall have no
right to rescind this Agreement after Completion by reason of any Claim under
this Agreement, under the Tax Deed or under the Misrepresentation Act 1967 of
for any other reason whatsoever (save in the case of fraudulent
misrepresentation) and that the Purchase's remedy in respect of any Warranty
Claim shall be in damages and in respect of any valid Tax Claim shall be to
receive payment in accordance with the terms thereof.
9.3 The Purchaser shall indemnify the Vendor against any liability to
Taxation arising under ICTA s 767A or s767AA or TCGA s190, together with any
reasonable costs and expenses arising as a result of taking action under this
paragraph 9.3.
10. General
10.1 The Purchaser shall ensure that each Group Company shall comply
with the terms of the Schedule 6 (as applicable).
10.2 Payment of any claim will to the same amount satisfy and
discharge any other claim which is capable of being made in respect of the same
subject matter.
10.3 Notwithstanding any of the above provisions of this Schedule 6,
none of the limitations contained in this Schedule 6 apply to any claim arising
out of any fraud, fraudulent conduct, serious misdeclaration on the part of any
Group Company or the Vendor in relation to the matter giving rise to the Claim.
10.4 The parties agree that each of the limitations contained in
Schedule 6 is separate and severable and enforceable accordingly, and, whilst
those limitations are considered by the parties to be reasonable in all the
circumstances at present (having been freely negotiated with a view to
commercial certainty, and an acceptable compromise reached), nevertheless if any
of the restrictions is adjudged to be void or ineffective for whatever reason,
but would be adjudged to be valid and effective if part of its wording were
deleted, the liabilities which it limits reduced in scope or the amounts or time
limits stated were increased, it will then apply with the minimum modifications
as may be necessary to make it valid and effective.
10.5 If in respect of any Claim, the liability of the Vendor or the
Company is contingent only then the Vendor shall not be under any obligation to
make any payment to the Purchaser (or the Company) until such time as the
contingent liability ceases to be contingent and becomes actual provided that
the provision of paragraph 3.2 of this Schedule shall not apply to such claim
whilst such liability remains contingent.
10.6 The Vendor shall not be liable to make any payment in respect
of a Claim nor shall the Purchaser exercise any right of set of or counterclaim
against or otherwise withhold payment of any sums stated to be payable to the
Vendor by the Purchaser pursuant to this Agreement unless such liability has
been agreed or adjudged payable in legal proceedings.
55
Schedule 7: Consideration Shares
(Clause 3)
1. Consideration Shares Conditions and Lock-In
The following conditions shall apply to the Consideration Shares:-
1.1. the Consideration Shares shall be issued as restricted securities;
1.2. save as otherwise agreed with the Purchaser, for a period of two
years from Completion (the "Lock-In Period") the Vendor must not sell, dispose
or transfer in any calendar month a number of Consideration Shares greater than
25% of the number of shares traded in the Purchaser's common stock during the
previous calendar month;
1.3. after the expiry of the Lock-In Period, sale of the Consideration
Shares shall be unrestricted.
2. Purchaser Warranties and Undertakings
The Purchaser warrants and undertakes that:-
2.1. the Consideration Shares are issued free of all encumbrances and
Security Interests and that it has corporate power and authority to allot and
issue the Consideration Shares without the requirement to obtain any consents;
2.2. if, after the expiry of the Lock-In Period, the Vendor is unable to
sell the Consideration Shares for at least the US Dollar equivalent of
(pound)2.70 per share, that they will use their best endeavours to assist with
the sale or other disposal of the Consideration Shares for at least this minimum
price, including requesting their market makers and other advisers to consider
all available possibilities for sale or transfer of the shares.
3. Piggyback Registration
References to legislation in this clause 2 of Schedule 7 are to
legislative provisions of the United States.
3.1 Right to Include Shares.
If the Purchaser proposes to register any of its securities under the
Securities Act of 1933, as amended (the "1933 Act"), in connection with the
public offering of such securities solely for cash (other than a registration on
Form S-4, Form S-8, or any successor or similar forms) (a "Piggyback
Registration"), whether for the account of the Purchaser or otherwise, it will
promptly, but not later than thirty (30) days before the anticipated date of
filing such registration statement, give written notice to the Vendor. Upon the
written request of the Vendor made within fifteen (15) days after the receipt of
any such notice (which request shall specify the amount of Consideration Shares
intended to be disposed of by the Vendor and the intended method of distribution
thereof), the Purchaser will cause the registration under the 1933 Act of all
the Consideration Shares which the Purchaser has been requested to register by
the Vendor in accordance with the intended methods of distribution specified in
such request; provided, however, that (a) if, at any time after giving written
notice of its intention to register any securities and prior to the effective
date of the Registration Statement filed in connection with such registration,
the Purchaser determines for any reason not to proceed with such registration,
the Purchaser may, at its election, give written notice of such determination to
56
the Vendor and, thereupon, will be relieved of its obligation to register any
Consideration Shares in connection with such registration, and (b) in case of a
determination by the Purchaser to delay registration of its securities, the
Purchaser will be permitted to delay the registration of the Consideration
Shares for the same period as the delay in registering such other securities.
The obligation of the Purchaser under this Clause 2.2. shall be unlimited with
respect to the number of registrations, but shall terminate at such time as all
of the securities originally deemed Consideration Shares cease to be registrable
securities (i) upon the sale of such securities pursuant to a registration
statement, (ii) upon the sale of such securities pursuant to Rule 144
promulgated under the 1933 Act, or (iii) on the date on which such securities
become available for sale under Rule 144(k).
3.2 Priority.
If the managing underwriter for a registration involving an underwritten
offering advises the Purchaser in writing that, in its good faith judgment, the
number of securities of the Purchaser (including without limitation,
Consideration Shares) requested to be included in such registration by the
holders thereof exceeds the number of securities of the Purchaser (the "Sale
Number") which can be sold in an orderly manner in such offering within a price
range acceptable to the Purchaser, the Purchaser will include (a) first, all
securities of the Purchaser that the Purchaser proposes to register for its own
account, and (b) second, to the extent that the number of securities of the
Purchaser to be included by the Purchaser is less than the Sale Number, a number
of the Consideration Shares equal to the number derived by multiplying (i) the
difference between the Sale Number and the securities proposed to be sold by the
Purchaser, and (ii) a fraction the numerator of which is the number of
Consideration Shares originally requested to be registered by the Vendor, and
the denominator of which shall be the aggregate number of all securities
requested to be registered by all holders of the Purchaser's securities (other
than securities being registered by the Purchaser itself). To the extent only a
portion of the Consideration Shares are included in an underwritten offering,
that portion of Consideration Shares originally requested to be registered by
the Vendor which are thus excluded from such underwritten offering and any other
securities of the Purchaser held by such Vendor shall be withheld from the
market by the Vendor thereof for a period, not to exceed 180 days, which the
managing underwriter reasonably determines is necessary in order to effect such
underwritten offering.
3.3 Obligation to Furnish Information.
The Purchaser's obligation to cause any registration statement to become
effective in connection with the distribution of any Consideration Shares
pursuant to this Agreement is contingent upon the Vendor, with reasonable
promptness, furnishing to the Purchaser such information regarding itself, the
Consideration Shares held by it, and the intended method of disposition of such
securities, as is required pursuant to Regulation S-B (or Regulation S-K, as the
case may be) promulgated under the 1933 Act, to effect the registration of the
Consideration Shares. The Vendor agrees, by acquisition of the Consideration
Shares, that it shall not be entitled to sell any of such Consideration Shares
57
pursuant to the registration statement or to receive a prospectus relating
thereto, unless the Vendor has furnished the Purchaser with all information
required to be disclosed in order to make the information previously furnished
to the Purchaser by the Vendor not misleading in a material respect and any
other information regarding the Vendor and the distribution of such
Consideration Shares as the Purchaser may from time to time reasonably request.
Any sale of any Consideration Shares by the Vendor shall constitute a
representation and warranty by the Vendor that the information relating to the
Vendor and its plan of distribution is as set forth in the Prospectus delivered
by the Vendor in connection with such disposition, that such Prospectus does not
as of the time of such sale contain any untrue statement of a material fact
relating to or provided by the Vendor or relating to its plan of distribution
and that such Prospectus does not as of the time of such sale omit to state any
material fact relating to or provided by the Vendor or relating to its plan of
distribution necessary to make the statements in such Prospectus, in the light
of the circumstances under which they were made, not misleading.
3.4 Indemnification by the Purchaser.
The Purchaser will indemnify and hold harmless the Vendor and its
officers, directors, partners and affiliates (and their officers, directors and
partners), any underwriter (as defined in the 1933 Act) for the Vendor and each
person (and its officers, directors, partners and affiliates), if any, who
controls any Vendor or underwriter within the meaning of the 1933 Act or the
1934 Act (each a "Purchaser Indemnified Person"), against any losses, claims,
damages, expenses or liabilities, joint or several, or actions in respect
thereof ("Losses") to which they may become subject under the 1933 Act, the 1934
Act, or other federal or state law, insofar as such Losses arise out of or are
based upon any of the following statements, omissions or violations
(collectively a "Violation"): (a) any untrue statement or alleged untrue
statement of a material fact contained in such Registration Statement, including
any preliminary Prospectus or final Prospectus contained therein or any
amendments or supplements thereto, (b) the omission or alleged omission to state
therein a material fact required to be stated therein, or necessary in order to
make the statements therein, in light of the circumstances under which they were
made, not misleading, or (c) any violation or alleged violation by the Purchaser
of the 1933 Act, the 1934 Act, any state securities law, or any rule or
regulation promulgated under the 1933 Act, the 1934 Act, or any state securities
law, and the Purchaser will pay to each such Purchaser Indemnified Person, as
incurred, any legal or other expenses reasonably incurred by or on behalf of him
in connection with investigating or defending any such Loss; provided, however,
that the Purchaser will not be liable in any such case for any such Loss to the
extent that it arises out of or is based upon (a) a Violation which occurs
solely as the result of the written information furnished by any Vendor,
underwriter or controlling person seeking indemnification hereunder, as
applicable, expressly for inclusion in the Registration Statement, or (b) with
respect to any underwriter and controlling person of such underwriter (and their
respective officers and directors), a Violation which results from the fact that
there was not sent or given to a person who bought Registrable Securities, at or
prior to the written confirmation of the sale, a copy of the final Prospectus,
as then amended or supplemented, if the Purchaser had previously furnished
copies of such Prospectus hereunder and such Prospectus corrected the
misstatement or omission forming the basis of the Violation
3.5 Indemnification by the Vendor.
The Vendor will indemnify and hold harmless the Purchaser, each of its
directors, each of its officers who has signed the Registration Statement, each
person, if any, who controls the Purchaser within the meaning of the 1933 Act,
any underwriter and any controlling person of any such underwriter or other
holder (each a "Vendor Indemnified Party"), against any Losses to which any of
the foregoing persons may become subject, under the 1933 Act, the 1934 Act, or
other federal or state law, insofar as such Losses arise out of or are based
upon any Violation, in each case to the extent (and only to the extent) that
such Violation occurs solely as a result of the written information furnished by
the Vendor expressly for inclusion in the applicable registration statement or
58
an act of Vendor in violation of applicable law, and the Vendor will pay, as
incurred, any legal or other expenses reasonably incurred by any Vendor
Indemnified Person intended to be indemnified pursuant to this Clause 3 in
connection with investigating or defending any such Loss.
4. Dispute Resolution
4.1. Without prejudice to the jurisdiction of the English Courts, the
parties agree to seek to resolve any disputes in relation to the registration of
the Consideration Shares and the Lock-In Period by an initial reference by
either party to independent counsel chosen by application to ▇▇▇.▇▇▇▇▇▇▇▇▇▇.▇▇▇.
..
4.2. If any such dispute is not resolved within 30 days of a reference to
the transfer agent, then the parties shall be free to take such action as they
in their absolute discretion shall deem appropriate.
SIGNED AS A DEED AND DELIVERED by ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ in the presence of:
SIGNED BY : ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
WITNESS : ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇ CORPORATE LAWYERS
SIGNED AS A DEED AND }
DELIVERED for and on behalf of }
ADAL GROUP INC in the
presence of: }
▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Designated Officer
59
