Share Transfer Agreement - Group 4 Securitas Holdings Ltd. and Brink's Ltd.
2 February 2005
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SHARE TRANSFER AGREEMENT
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BETWEEN
GROUP 4 SECURITAS HOLDINGS LIMITED
AS SELLER
AND
BRINK'S LIMITED
AS BUYER
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Content
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1. DEFINITIONS AND INTERPRETATION............................................4
2. SALE AND PURCHASE OF SALE SHARES..........................................8
3. PURCHASE PRICE AND CLAW BACKS FROM THE PURCHASE PRICE.....................9
4. PRE-COMPLETION ACTIONS...................................................10
5. COMPLETION AND POST COMPLETION EVENTS....................................11
6. CONDITIONS PRECEDENT AND OPTION NOT TO PURCHASE..........................16
7. WARRANTIES AND REPRESENTATIONS OF THE SELLER.............................18
8. OTHER OBLIGATIONS OF THE SELLER..........................................34
9. REPRESENTATIONS AND WARRANTIES OF THE BUYER..............................40
10. INDEMNIFICATION..........................................................42
11. FLOOR THRESHOLD AND CEILING..............................................45
12. DURATION OF INDEMNIFICATION..............................................45
13. PENSIONS INDEMNITY.......................................................46
14. NOTIFICATION PROCEDURE AND PAYMENT OF THE INDEMNITY......................47
15. MISCELLANEOUS............................................................49
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SHARE TRANSFER AGREEMENT
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This agreement is made on February 2nd, 2005
BETWEEN:
1. GROUP 4 SECURITAS HOLDINGS LIMITED a company incorporated in England and
Wales with Company Number 02380914 whose registered office is at Farncombe
House, Broadway, Worcestershire WR12 7LJ
(hereinafter the "Seller)
AND:
2. BRINK'S LIMITED a company incorporated in England and Wales with Company
Number 00959654 whose registered office is at Arnold House, 36/41 Holywell Lane,
London EC2A 3LB
(hereinafter the "Buyer")
WHEREAS:
(A) Group 4 Falck Cash Services UK Limited ("the Company") is a company
registered in England and Wales with Company Number 2831111.
(B) The share capital of the Company is (pound)1,900,002 divided into 2
Ordinary Shares of (pound)1 each and 1,900,000 6 per cent Redeemable
Preference Shares of (pound)1 each.
(C) The principal activity of the Company is the provision of transportation
and storage security services.
(D) The Seller has agreed to transfer its shareholding in the Company in
accordance with the conditions and with the giving of the warranties and
undertakings set out below, which for the Buyer, have an essential and
determining influence on its undertaking to purchase the Company.
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IT IS HEREBY AGREED AS FOLLOWS:
1. DEFINITIONS AND INTERPRETATION
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1.1 Definitions in this agreement shall have the following meanings unless
the context does not permit:
"Accounts" means the audited accounts (balance sheets, profit and loss accounts
and annexes) of the Company as at the Last Accounting Date;
"Accounting Methods and Principles" means the generally accepted accounting
methods and principles in the UK or such other international body as is
appropriate;
"Agreement" means this document and the Schedules hereto;
"Assets" means the raw materials, assets, movable goods, installations and
equipment used by the Company in the carrying out of its activities including
those assets specified in the Seller's commitments to the European Commission;
"Authorisations" means all authorisations, licences, permits, certificates,
approvals or other documents obtained by the Company from an administrative
authority or any other authority or by a professional entity set-up in one of
the countries where the Company carries on its activities or is the owner of
assets at any given time;
"Business Day" means a day other than a Saturday or Sunday or public holiday in
the UK;
"Buyer" has the meaning given to it above;
"Buyer's Group Affiliate" means an entity directly or indirectly controlled by
the Buyer or which directly or indirectly controls the Buyer or which is
directly or indirectly controlled by one or several undertakings controlled by
the Buyer, and "control" means in relation to a body corporate, the power of a
person to secure that the affairs of the body corporate are conducted in
accordance with the wishes of that person by means of the holding of shares, or
the possession of voting power, in or in relation to that or any other body
corporate; or by virtue of any powers conferred by the constitutional or
corporate documents, or any other document, regulating that or any other body
corporate, and "Buyer's Group Affiliates" means all of such affiliates of the
Buyer;
"Clauses" means the clauses of this Agreement;
"Clearance" means the formal confirmation by the European Commission that the
Transactions fulfil the obligations of Group 4 Falck A/S and Securicor plc,
pursuant to their written commitments to the European Commission dated 28 May
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2004, to enter into final binding sale and purchase agreements for the sale of
the Securicor Luxembourg Divestment Business and the UK CIT Divestment Business,
as such terms are defined in the said commitments;
"Company" has the meaning given to it in the recitals above;
"Completion" means completion of the transfer of the Sale Shares in accordance
with Clause 5;
"Completion Statement" means a statement showing the turnover and profit or
loss, for the period from the Last Accounting Date to Completion and the assets
and liabilities of the Company as at Completion in the same format as the
current "monthly reporting pack" produced by the Company in the ordinary course
of its business such Completion Statement being prepared in accordance with
Accounting Methods and Principles and with all available supporting documents;
"Confidentiality Agreement" means the confidentiality agreement dated 2
September 2004 between G4S and Brink's EMEA S.A.S;
"Customers' Accounts" means all customer funds held by the Company immediately
prior to Completion;
"Date of this Agreement" means the date on which this Agreement is signed;
"Disclosure Schedule" means the Seller's disclosures to the warranties and
representations set out in Schedule 2;
"the Dumbarton Road Premises" means the building known as and forming 89
Dumbarton Road, Glasgow as more particularly described in the Dumbarton Road
Lease;
"the Dumbarton Road Lease" means the lease of the Dumbarton Road Premises
registered in the Land Register under Title Number GLA100684;
"Encumbrance" means all liens, sureties, interest, charges, restrictions,
options, promises or third party right or interest;
"G4S plc" means Group 4 Securicor plc;
"Intellectual Property Rights" means trademarks, patents, designs, models and
author's rights and generally all the rights giving their owner the exclusive
rights of use, together with all trading names, registered names, know-how and
processes used by the Company in carrying out its activities;
"the Inverness Premises" means the premises known as and forming Unit 12, Block
2, Lotland Trading Estate, Inverness (otherwise known as 21 Henderson Road,
Inverness) as more particularly described in the Inverness Lease;
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"the Inverness Lease" means the lease between MacGregor Properties Limited and
the Company dated 10 August and registered in the Books of Council and Session
on 10 September both months 2004;
"Last Accounting Date" means 31 December 2003, namely the last accounting
reference date of the Company for which audited accounts have been prepared SAVE
THAT at Completion the final draft unaudited accounts (subject only to a
pensions disclosure note) or, if available, the audited accounts of the Company
for the period to 31 December 2004 will be provided to the Buyer at which point
the Last Accounting Date shall mean 31 December 2004;
"Leasehold Premises" means the Scottish Leasehold Premises, the Edinburgh
Premises and the Manchester Premises;
"Loss" means all losses, costs, expenses, penalties and any other damage of
whatever nature, including all professional and advisory fees;
"Management Accounts" means the last available monthly management accounts of
the Company prior to Completion;
"Material Adverse Change" means any event, fact, deed, action or circumstance of
whatsoever nature which, individually or in the aggregate, (i) fundamentally
affects or endangers the Company, its operation or profitability, such as, but
not limited to, (a) the loss of one or several Material Contracts except if such
loss results from the normal expiry of such Material Contract or the customer's
decision not renew the Material Contract at its expiry date, (b) the loss of the
Vehicles fleet, (c) the loss of the Premises, (d) any material condition imposed
by an administrative or judicial authority with a view to the closing of this
Agreement; or which (ii) fundamentally affects or endangers the due fulfilment
by the Seller of any of its obligations under this Agreement, such as any
insolvency proceedings affecting the Seller; or a material difference of an
adverse nature in the assets or liabilities of the Company as from the Date of
this Agreement to the date of Completion as derived from the draft unaudited or
audited accounts (as the case may be) of the Company for the period ended 31
December 2004 or the Management Accounts;
"Material Contracts" have the meaning given to them in Clause 7.17.2;
"Monitoring Trustee" means the trustee monitoring the compliance of the merging
parties, Group 4 Falck A/S and Securicor plc, with their commitments under the
European Commission's ruling of 28th May 2004;
"Parties" means collectively the Seller and the Buyer and "Party" means one or
other of the aforesaid;
"Purchase Price" means the sum of EUR 2,000,000 (Two Million Euros);
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"RBS Contract" means the contract between the Company and The Royal Bank of
Scotland plc dated 1 July 1996 as amended pursuant to the latest addendum dated
1 September 2004;
"Rented Vehicles" means the vehicles over which the Company has possession by
virtue of leases with or without an option to purchase;
"Sale Shares" means 2 Ordinary Shares of (pound)1 each and 1,900,000 6 per cent
Redeemable Preference Shares of 1 each comprising the whole of the issued share
capital of the Company (a Sale Share being one of the Sale Shares) at
Completion;
"Schedule" means each Schedule to this Agreement, and "Schedules" means all and
every Schedule;
"the Scottish Leasehold Premises" means (1) Yard A; (2) Yard G; (3) the
Inverness Premises; and (4) the Dumbarton Road Premises;
"Seller" has the meaning given to it above;
"Seller's Group Affiliate" means an entity directly or indirectly controlled by
the Seller or which directly or indirectly controls the Seller or which is
directly or indirectly controlled by one or several undertakings controlled by
the Seller, and "control" means in relation to a body corporate, the power of a
person to secure that the affairs of the body corporate are conducted in
accordance with the wishes of that person by means of the holding of shares, or
the possession of voting power, in or in relation to that or any other body
corporate; or by virtue of any powers conferred by the constitutional or
corporate documents, or any other document, regulating that or any other body
corporate, and "Seller's Group Affiliates" means all of such affiliates of the
Seller;
"Shares" means the Sale Shares;
"Taxes" or "Impositions" means all forms of taxation and statutory,
governmental, state, federal, provincial, local, government or municipal
charges, duties, imposts, contributions or levies for which the Company is
liable under all laws applicable to it, whatever the basis for recovering the
fee or the entity responsible for recovering such fee and generally all
additional amounts imposed with respect to the foregoing, including all
interest, fines, penalties, and other charges relating to it, and including any
transferee or secondary liability in respect of the foregoing (whether by law,
contractual agreement or otherwise);
"Tax Regulations" means all legislation with respect to Taxes as well as any
applicable regulation or other official pronouncement of the applicable rules in
a country having taxing jurisdiction over the Company, as well as any
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international treaty (including directives, regulations or other applicable
treaties in the relevant country), and any other binding authority applicable in
a taxing jurisdiction;
"Transactions" means the sale by the Seller to the Buyer of the Sale Shares
pursuant to this Agreement and the sale by Securicor International BV to Brink's
Luxembourg SA of the whole of the issued share capital of Securicor Luxembourg
SA pursuant to an agreement of even date with this Agreement;
"Transitional Services" means the services (including use of equipment) to be
provided by the Seller or a Seller's Group Affiliate to the Company pursuant to
Clause 8.5.2;
"Vehicles" means the vehicles owned by the Company.
"Yard A" means the yard area located in the Barclay Curle Complex at 739 South
Street, Glasgow known as and forming Yard A;
"Yard A Licence" means the basis upon which the Company occupies Yard A; "Yard
G" means the yard area located in the Barclay Curle Complex at 739 South Street,
Glasgow known as and forming Yard G;
"Yard G Licence" means the basis upon which the Company occupies Yard G.
1.2 Clause and schedule headings do not affect the interpretation of this
agreement.
1.3 A person includes a corporate or unincorporated body.
1.4 Words in the singular include the plural and in the plural include the
singular.
1.5 A reference to one gender includes a reference to the other gender.
1.6 A reference to a statute or statutory provision is a reference to it
as it is in force for the time being taking account of any amendment,
extension, or re-enactment and includes any subordinate legislation
for the time being in force made under it.
SECTION I - SALE AND PURCHASE
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2. SALE AND PURCHASE OF SALE SHARES
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2.1 Subject to the provisions of Clause 6, the Seller agrees to sell to
the Buyer, and the Buyer agrees to purchase from the Seller, the Sale
Shares at Completion.
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2.2 At Completion the Seller owns and will transfer to the Buyer the Sale
Shares with full title guarantee, free of any Encumbrance.
2.3 At Completion, the Buyer will have the retrospective right in respect
of the period following the Last Accounting Date to all dividends,
interim dividends and other distributions payable in respect of the
Sale Shares in respect of the period since the Last Accounting Date
(other than a dividend required in order to ensure that the Company is
cash free in accordance with Clause 2.4), and will benefit from any
subscription and allocation rights attached to the Sale Shares from
this same date.
2.4 At Completion, the Company shall be cash free and shall be free from
inter company loans, bank or other third party loans or finance (save
for lease agreements or finance in the ordinary course of business)
and lines of credit. At Completion the Company shall also be free from
any obligation, including contingent obligations, to the Seller and
any Seller's Group Affiliate, including without limitation any such
obligations to make payment for or repayments of payments received in
respect of Group Relief (as defined in Section 402 Income and
Corporation Taxes Act 1988).
3. PURCHASE PRICE AND CLAW BACKS FROM THE PURCHASE PRICE
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3.1 It has been agreed that the Sale Shares will be transferred to the
Buyer in consideration for a sum equal to the Purchase Price, in other
words, the total sum of EUR 2,000,000 (Two Million Euros).
3.2 On Completion the Buyer shall pay the Purchase Price by means of a
transfer into the following bank account:
Account Name : Group 4 Securicor plc
Account Number : 76962522
Bank : Barclays Bank plc
Fleet Street
London EC4
Sort Code : 20-30-19
SWIFT : BARCGB22
IBAN : GB36BARC20301976962522
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3.3 If the Company is not successful in entering into a new contract with
The Royal Bank of Scotland plc by 31 December 2005 ("the Tender")
(other than as a result of the Company being in breach of the RBS
Contract following Completion), then the Seller shall repay to the
Buyer (upon notice from the Buyer of the Tender being unsuccessful) by
way of a reduction of the Purchase Price:
3.3.1 the sum of (euro)500,000 in the event that the Seller or a
Seller's Group Affiliate should win the Tender;
3.3.2 the sum of (euro)250,000 in the event that the Tender is
awarded to a third party other than a Buyer's Group Affiliate.
4. PRE & POST COMPLETION OBLIGATIONS
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4.1 Notification to Authorities
The Seller shall forthwith after the date of execution of this
Agreement notify this Agreement to the European Commission requesting
Clearance prior to the date of Completion.
4.2 Cash and Coin Inventory
4.2.1 On the Date of Completion, but immediately preceding Completion, a
joint inspection team composed of representatives of the Seller and
the Buyer will, in a process to be jointly agreed prior to Completion
("the Reconciliation Process"), conduct a physical count of the total
cash and coin inventory (to include any overage account) maintained by
the Company and will compare the result of the physical count referred
to in this Clause 4.2.1 (the "Physical Inventory") with sum of all
individual Customers' Account balances announced to the relevant
Customers on the Date of Completion pursuant to Clause 4.2.2 (the
"Administrative Inventory"). Any discrepancy between the Physical
Inventory and the Administrative Inventory will be agreed by the joint
inspection team but no payment will be made by the Buyer to the
Seller, or vice versa, in respect of such discrepancy except in
accordance with Clause 4.2.3.
4.2.2 On the date of Completion, the Company shall inform each of its
customers, where relevant, of its Customer's Account balance and other
inventory held by the Company on behalf of such customer and request
that the customer confirm its Customer Account balance to the Company.
4.2.3 If following completion of the Reconciliation Process there is any
claim by a customer with respect to such customer's account balance as
referred to in Clause 4.2.1, then that claim shall be the sole
responsibility of the Seller. The Seller shall indemnify and hold
harmless the Buyer from and against any liabilities resulting from
such claims by customers, provided, however, that neither the Buyer,
nor the Seller, nor the Company shall settle nor agree to settle or
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compromise any such claim, without the other's consent (which consent
shall not be unreasonably withheld or delayed) In the event of any
such claim by a customer, the Seller shall have full and unrestricted
access to the relevant documents and records of the Company and the
Buyer shall procure that the relevant employees shall provide
reasonable assistance to the Seller in order to investigate the
customer's complaint.
The Seller shall only be liable to indemnify the Buyer under this
Clause 4.2.3 if, and to the extent that, the aggregate of all claims
brought under this Clause 4.2.3 exceeds the amount of any overage
account held by the Company at Completion. The amount of the overage
will be clearly shown in any schedules comprising the Reconciliation
Process on Completion.
4.2.4 In respect of the period prior to Completion, the Buyer shall have no
obligation and no responsibility for the Customers Accounts and the
Seller shall hold the Buyer harmless from all complaints, claims and
suits of customers with respect to such Customer Accounts in respect
of such period.
4.2.5 Any claims made by customers relating to Losses incurred following
Completion will be the sole responsibility of the Buyer.
4.3 Meeting with RBS
Immediately upon receiving permission from the Monitoring Trustee the
Seller shall procure that a meeting takes place, in a process and
manner approved by the Monitoring Trustee, when Fiona Burke shall
introduce the Buyer to The Royal Bank of Scotland plc as the Seller's
favoured purchaser of the Sale Shares.
4.4 Scottish Midland Claim
In the event that the sum of (pound)4,000 to be provided in the
Company's Management Accounts for February as referred to in Schedule
3 is not paid by the Company to Scottish Midland by Completion, any
claim by Scottish Midland in respect of the subject matter of such
provision shall be dealt with in accordance with the provisions of
Clause 4.2.3, notwithstanding such provision.
5. COMPLETION AND POST COMPLETION EVENTS
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5.1 Date and location of Completion
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5.1.1 Subject to the provisions of Clauses 6.1, and 6.2, Completion will
take place within two weeks from the date upon which Clearance is
obtained, such Completion to take place on such date within that
period as the Buyer and Seller agree, or failing such agreement, to
take place on the fourteenth day following the date of such Clearance,
such date being a Business Day or, if such day is not a Business Day,
the first Business Day following the expiry of the fourteen day
period,
5.1.2 Completion will take place at the London offices of Eversheds, or in
any other location agreed to in writing between the Buyer and the
Seller.
5.2 Operation of Completion
5.2.1 At Completion, the Seller shall give to the Buyer:
(a) The share certificates in respect of the Sale Shares;
(b) The statutory registers of the Company showing the transfer of
the Sale Shares;
(c) The resignation letter of Bernard Whiddon Smith from the Board of
Directors of the Company;
(d) a duly executed transfer transferring the Sale Shares to the
Buyer; and
(e) the following documents in respect of the Manchester Premises (as
defined in Schedule 1:
(i) Lease (unbound) relating to Unit 1 Littler's Point, Second
Avenue, Trafford Park, Greater Manchester dated 15th October 1998
made between Crankshaft Limited (1) and Konica Business Machines
(UK) Limited (2);
(ii) Agreement for Assignment of Lease relating to Unit 1
Littler's Point, Second Avenue, Trafford Park, Greater Manchester
dated 21st March 2000 made between Konica Business Machines (UK)
Limited (1) and Group 4 Total Security Limited (2);
(iii) Licence to Assign and Deed of Variation dated 28th April
2000 made between Crankshaft Limited (1) Konica Business Machines
(UK) Limited (2) and Group 4 Total Security Limited (3);
(iv) Assignment relating to Unit 1 Littler's Point, Second
Avenue, Trafford Park, Greater Manchester dated 28th April 2000
made between Konica Business Machines (UK) Limited (1) and Group
4 Total Security Limited (2);
(v) Receipted Notice of Assignment dated 4th May 2000;
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(vi) Licence to carry out works relating to Unit 1 Littler's
Point, Trafford Park, Greater Manchester dated 28th April 2000
made between Crankshaft Limited (1) and Group 4 Total Security
Limited (2);
(vii) Licence to carry out works relating to Unit 1 Littler's
Point, Trafford Park, Greater Manchester dated 28th August 2001
made between Crankshaft Limited (1) and Group 4 Total Security
Limited (2);
(viii) Copy letter from Matthews & Goodman Property Advisors to
Group 4 Total Security Limited dated 24 September 2003 regarding
proposed review of lease rent together with receipted copy;
(ix) Copy letter from Matthews & Goodman Property Advisors to
Group 4 Total Security Limited dated 11 February 2004 regarding
proposed review of lease rent; and
(x) Copy invoice from Crankshaft Limited in respect of Service
Charge and Rent from 29 September 2004 - 24 December 2004.
(f) the following documents in respect of the Edinburgh Premises (as
defined in Schedule 1:
(i) Copy Lease between Legal and General Assurance (Pensions
Management) Limited and The Burton Group Public Limited Company
registered in the Books of Council and Session on 16th December
1983;
(ii) Copy Rent Review Memorandum between Legal and General
Assurance Society Limited and The Burton Group Public Limited
registered in the Books of Council and Session on 30th August
1993;
(iii) Copy Minute of Variation between Scottish Metropolitan
Property PLC, The Burton Group Public Limited Company and EDI
(Industrial) Limited registered in the Books of Council and
Session on 24th February 1998;
(iv) Copy Assignation by The Burton Group Public Limited
Company and Burton Group Properties Limited in favour of
Debenhams Retail plc dated 12th December 1997 and registered
in the Books of Council and Session on 15th January 1998;
(v) Copy Assignation by Debenhams Retail plc in favour of
Group 4 Total Security Limited registered in the Books of
Council and Session on 8th September 1998;
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(vi) Copy Letter of Consent to Assignation from McGrigor Donald
on behalf of The Scottish Metropolitan Property plc addressed to
Brodies dated 28th July 1998;
(vii) Copy Letter from McGrigor Donald on behalf of The Scottish
Metropolitan Property plc accepting the terms of EDI (industrial)
Limited's consent to assignation addressed to Shepherd &
Wedderburn dated 28 July 1998;
(viii) Copy Lease betweenThe City of Edinburgh District Council
and Melville, Dundas & Whitson Limited recorded in the Division
of the General Register of Sasines applicable to the County of
Midlothian on 27th February 1980 and also registered in the Books
of Council and Session for preservation execution on 16th July
1982;
(ix) Copy Assignation by Melville, Dundas & Whitson in favour
of Legal and General Assurance (Pensions Management) Limited
recorded in the said Division of the General Register of Sasines
on 9th January 1981;
(x) Copy Minute of Amendment of Lease between The City of
Edinburgh Council and Legal and General Assurance Society Limited
recorded in the said Division of the General Register of Sasines
on 15th December 1992;
(xi) Copy Assignation by Legal and General Assurance Society
Limited in favour of Scottish Metropolitan Property PLC recorded
in the said Division of the General Register of Sasines on 9th
September 1994;
(xii) Copy Letter from CB Richard Ellis addressed to Group Four
Total Security Limited dated 28 May 2004 enclosing copy Schedule
of Dilapidations on behalf of Meadowfield Investments Limited
dated 10th May 2004;
(xiii) Copy Letter from CB Richard Ellis addressed Stephen
Armitage of Dunlop Heywood Lorenz dated 17 December 2004
enclosing copy Schedule of Dilapidations on behalf of Meadowfield
Investments Limited dated 14th December 2004; and
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(xiv) Copy Letter from Stephen Armitage addressed to A McFarlane
of DM Hall & Son dated 24th December 2004.
(g) the following documents in respect of Yard A:
Copy Licence to Occupy between CNC Regis Limited in favour of
Group 4 containing incomplete designation of "the Tenant"
apparently signed on behalf of Group 4 Falck, not witnessed or
signed on behalf of the Landlord. The Licence to Occupy does not
identify the property.
(h) the following documents in respect of Yard G:
Copy Licence to Occupy between CNC Regis Limited in favour of
Group 4 containing incomplete designation of "the Tenant"
apparently signed on behalf of Group 4 Falck, not witnessed or
signed on behalf of the Landlord. The Licence to Occupy does not
identify the property.
(i) the following documents in respect of the Inverness Premises:
Copy Lease comprising Missives of Let by T.S.H. Burns & Son on
behalf of MacGregor Properties Limited addressed to McClure
Naismith on behalf of Group 4 Falck Cash Services UK Limited
registered in the Books of Council and Session on 10th September
2004.
(j) the following documents in respect of the Dumbarton Road
Premises:
(i) Copy Land Certificate Title Number GLA100684;
(ii) Copy Lease between The Corporation of the City of Glasgow
and Factoryguards Limited recorded in the Division of the General
Register of Sasines applicable to the County of the Barony and
Regality of Glasgow on 6th October 1971;
(iii) Copy letter of intimation addressed to City Estates
Surveyor dated 30th July 1993;
(iv) Copy letter addressed to Bird Semple Fyfe Ireland
acknowledging receipt dated 4th August 1993;
(v) Copy Licence by Group 4 Cash-In-Transit (Scotland) Limited
in favour of The University Court of the University of Glasgow
signed but undated; and
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(vi) Miscellaneous consents as detailed in the Inventory
annexed thereto by Brodies to McClure Naismith dated 13th July
1998.
5.2.2 At Completion the Seller shall provide to the Buyer evidence of:
(a) repayment of, or instructions given to bankers for the repayment
of, the Company's overdraft to Barclays Bank plc; and
(b) discharge of any inter-group liabilities owing to and/or from the
Company, by means of the production of a funds flow chart, a copy
of which will have been shown to the Buyer in advance of
Completion for consultation.
5.2.3 At Completion the Buyer shall transfer the Purchase Price to the
Seller in accordance with Clause 3.2.
5.3 The Seller will provide the Completion Statement to the Buyer within
two weeks of Completion.
5.4 The Buyer and the Seller shall, as from Completion, comply with the
provisions of Schedule 1.
5.5 Following Completion the Company will procure for the Seller the
production of a VAT return in respect of the Company's business
prepared to cover the period since the last filed VAT return and up
until the date of Completion. The Parties acknowledge that such VAT
return can only be prepared with the provision of the Transitional
Services by the Seller.
6. CONDITIONS PRECEDENT AND OPTION NOT TO PURCHASE
-----------------------------------------------
6.1 This Agreement, including but not limited to the provisions of Clause
8.3, shall automatically terminate without liability on the part of
the Buyer or the Seller on the earlier of:
6.1.1 the date that a formal decision is given by the European Commission
that Clearance will not be given;
6.1.2 subject to any extension of time agreed between the Buyer and the
Seller, on 30 June 2005 if Clearance has not been obtained by that
date;
6.1.3 the termination of either of the Transactions pursuant to Clause 6.2.
of the relevant sale agreement;
SAVE THAT the confidentiality provisions contained in the Confidentiality
Agreement shall continue in full force and effect.
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6.2 The Buyer and the Seller will have the option upon giving the other
written notice not to purchase or sell (as the case may be) the Sale
Shares if prior to Completion:
(a) there has been a decision from a legal or administrative
authority prohibiting or modifying the acquisition of the Sale
Shares or imposing conditions on the Transactions in such a way
as to make such Transactions materially more onerous or
restrictive;
(b) the Seller or the Buyer (as the case may be) has not complied
with its obligations under this Agreement;
(c) the representations and warranties of the Seller or the Buyer (as
the case may be) contained in this Agreement or the content of
the Schedules are incorrect or incomplete in such a way as to
cause significant detriment to the Buyer or the Seller as the
case may be, save for events having occurred in the ordinary
course of business;
(d) the information contained in the Schedules changes in such a way
as to cause significant detriment to the Buyer or the Seller as
the case may be, other than for reasons within the ordinary
course of business; or
(e) a Material Adverse Change has occurred between the date of this
Agreement and the Date of Completion.
6.3 The Seller and the Buyer shall use all reasonable endeavours (so far
as lies within their respective powers) to procure that Clearance is
obtained as soon as practicable and in any event no later than :
(a) 6pm (CET) on 30th June 2005; or
(b) at such later time and date as may be agreed in writing by the
Seller and the Buyer
6.4 The Buyer and the Seller shall co-operate fully in all actions
necessary to procure the Clearance including, but not limited to, the
provision by all Parties of all information reasonably necessary to
make any notification or filing or as requested by an relevant
authority, keeping all parties informed of the progress of any
notification or filing and providing such assistance as may reasonably
be required.
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Section II - Warranties And Representations
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7. WARRANTIES AND REPRESENTATIONS OF THE SELLER
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The Seller warrants and represents that at the date of this Agreement as well as
at Completion, the warranties and representations set out in this Clause 7 and
the information set out in the Schedules including the Disclosure Schedule are
true and complete except as qualified by any matter fairly disclosed in the
Disclosure Schedule.
7.1 Capacity of the Seller
7.1.1 The Seller has full capacity to enter into this Agreement, to perform
its obligations under this Agreement and to benefit from the rights
contained herein.
7.1.2 The Seller has not been and is not subject to any reorganisation,
bankruptcy or liquidation procedure and there are no grounds for
making the Seller subject to such procedure.
7.1.3 There exists no consent, authorisation or judicial decision which is
necessary for the Seller to execute and to perform its obligations
under this Agreement and which has not yet been obtained.
7.1.4 This Agreement validly binds the Seller in accordance with its terms.
7.2 Incorporation of the Company
7.2.1 The Company has been duly incorporated and a copy of its current
Memorandum and Articles of Association are attached in Schedule 4.
7.2.2 The Company operates in accordance with the laws and regulations which
are applicable to it. The statutory registers of the Company have been
and are regularly maintained and are true and accurate.
7.3 Share capital
7.3.1 The Seller is the sole shareholder in the Company.
7.3.2 The Sale Shares make up all of the issued share capital of the
Company. The Sale Shares are freely transferable and are the only
moveable financial assets issued by the Company. The Sale Shares have
never been quoted on any regulated or non-regulated stock exchange.
7.3.3 The Sale Shares are free from all Encumbrances.
7.3.4 There is no agreement or contract in respect of the Sale Shares
binding the Seller.
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7.4 Participation - Profit sharing agreements
7.4.1 The Company is not and has never been the owner of any direct or
indirect interest of whatever amount in any subsidiary or any other
company
7.4.2 The Company is not bound nor has it undertaken to be bound by any
contract or agreement seeking to share all or part of its profits with
any third party.
7.5 Accounts
7.5.1 The Accounts of the Company as at the Last Accounting Date, set out in
Schedule 5 or as substituted by the Accounts provided to the Buyer by
the Seller prior to Completion, have been prepared in accordance with
the Accounting Methods and Principles and are in accordance with those
methods and principles used by the Company to date. The Accounts are
true and accurate and give a fair view of the financial situation and
of the assets and liabilities of the Company as at the Last Accounting
Date as well as the operating result for the financial period to which
they relate.
7.5.2 The Management Accounts have been prepared in good faith and with due
diligence in accordance with the same accounting policies adopted in
the preparation of the Accounts and on bases and principles which are
consistent with those used in the preparation of previous management
accounts of the Company.
7.6 Liabilities
7.6.1 All the material liabilities of the Company, whether or not
contingent, are duly reflected in the Accounts and/or the Completion
Statement and are adequately provided for.
7.6.2 The Company has not granted any security, charge, guarantee,
encumbrance or letter of comfort for the performance of contractual
undertakings either by third parties or by the Company or by the
Seller or one of the Seller's Group Affiliates.
7.6.3 The Seller and/or the Seller's Group Affiliates have not given any
security, charge, guarantee, pledge for the performance of any of the
undertakings of the Company.
7.6.4 There exist no material off-balance sheet liabilities other than those
listed in Schedule 6.
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7.7 Personnel and corporate officers of the Company
7.7.1 The list of employees and officers of the Company set out in Schedule
7 contains true and complete details of their age, seniority, and job
title as the case may be, as well as their remuneration (including all
bonuses and benefits in kind).
All amounts due or accrued for all remuneration of any kind relating
to employees and corporate officers, as well as former employees, of
the Company have been calculated and paid in due time in conformity
with their respective contract of employment and with any other
applicable legal and tax rules. The Company has no debt or liability
whatsoever towards the employees.
Except for any increase rendered mandatory pursuant to any collective
agreement or an employment agreement, the Company is under no
obligation to increase the current rates of remuneration or grant any
bonus or any benefit to any of its employees at any future date.
7.7.2 Schedule 8 defines for the Company the applicable collective
agreements and details in respect of the Company and for each distinct
entity:
(a) The collective agreements and the applicable internal agreements;
(b) The systems of remuneration including bonuses, commissions, and
benefits in kind in favour of all personnel or certain categories
of salaried employees;
(c) Profit sharing or share option agreements;
(d) The customs and practices giving rise to supplementary collective
benefits and those arising out of law or the collective
agreements.
There is no pension, pre-retirement, post-retirement or profit sharing
scheme, life insurance policy, medical insurance scheme or any other
contract for the benefit of any of the Company's employees other than
as set forth in Schedule 9.
7.7.3 Set out in Schedule 10 for the Company are true and complete copies
of:
(a) contracts of employment of all employees;
(b) All undertakings, other than those contained in the agreements
referred to in (a) above, given to employees concerning
supplementary benefits and those provided for by law or
collective agreements in relation to notices, termination of
redundancy payments or other similar undertakings.
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The terms and conditions of the work contracts binding the Company to
its employees comply with the legal and regulatory provisions and the
collective agreements applying to the Company and, consequently, do
not contain any provision contrary to the usual legal dispositions or
customary practices, in particular, but not limited to, any retirement
or departure benefits.
7.7.4 The Company has at all times completely and faithfully complied with
all applicable employment laws, including but not limited to the
statutory requirements relating to trade unions.
7.7.5 The corporate officers or managers of the Company do not benefit from
any employment contract, service contract with the Company or from any
particular benefit given by the Company. Similarly, no corporate agent
has collected any remuneration on behalf of the Company.
7.7.6 Schedule 11 sets out the current litigation in relation to employees
and details the parties who are subject to such proceedings, the
subject-matter of the litigation, the stage of the proceedings, the
sums claimed from the Company as well as the amount of the provision
made in good faith for such proceedings in the Accounts.
The Company is not liable to make any payment to any of its employees
or any former employee for damages or compensation for loss of office
or employment or for redundancy or dismissal.
There are no employee disputes (including without limitation, any
grievances or arbitration) or strikes, existing or - to the best of
the knowledge of Seller - threatened adversely affecting or
potentially affecting the financial situation or operations of the
Company.
7.7.7 All employees are qualified and trained to exercise the activities
they have been employed for and have obtained all the authorisations,
permits and licenses necessary to exercise such activities. These
authorisations, permits and licenses are in full force and effect and
the activities of the Company are carried out in accordance with such
authorisations, permits and licenses.
Schedule 12 contains a complete list of the employee authorisations
and permits.
7.8 Manchester and Edinburgh Premises
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For the purposes of this Clause 7 "Premises" shall mean the Manchester Premises
and the Edinburgh Premises both of which have the meaning as set out In Schedule
1.
7.8.1 The particulars of the Premises shown in Schedule 1 are true, complete
and accurate.
7.8.2 G4TS have a good and m arketable title to the Premises for the estate
or interest stated in Schedule 1.
7.8.3 The title deeds to the Premises are in G4TS's possession free from any
Encumbrance.
Rights enjoyed with the Premises
7.8.4 So far as the Company and G4TS are aware, there are appurtenant to the
Premises all rights and reasonably necessary for its present use and
enjoyment.
7.8.5 The Company is in occupation of the whole of the Premises and no other
person or corporate body other than G4TS has any right (actual or
contingent) to possession or occupation of the Premises, or any
interest in it.
7.8.6 The use of the Premises as stated in the Lease corresponds as to the
use to which it is in fact put,
Matters affecting the Premises
7.8.7 So far as the Company and G4TS are aware, without having made
investigations of any third party or other corporate or statutory body
in relation to the same, the Manchester Premises are not affected by
any of the following matters:
7.8.7.1 any matter which conflicts with the present use of the
Premises, or which would otherwise restrict its continued
possession and enjoyment, for the purposes set out in the
respective leases;
7.8.7.2 any outstanding breach or alleged breach of covenant or
obligation or of any other restriction or condition, or any
dispute or complaint within the three years prior to the date
of this Agreement, whether actual or threatened;
7.8.7.3 any outstanding notice, order, demand, resolution, proposal,
complaint or requirement issued or made, or to the knowledge
of the Company intended to be issued or made, by any local or
other competent authority or body.
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7.8.8 So far as the Company and G4TS are aware, without having made
investigations of any third party or other corporate or statutory body
in relation to the same, there are no closing, demolition or clearance
orders, enforcement notices or stop notices affecting the Premises
nor, to the best of the G4TS's knowledge, information and belief, are
there any circumstances likely to lead to any being made.
7.8.9 There are no disputes with any adjoining or neighbouring owners with
respect to boundary walls and fences or with respect to any easement,
right or means of access to the Premises.
Outgoings
7.8.10 The Premises are not subject to any outgoings (other than uniform
business rates, water charges and other standard payments to the
relevant water company and, in the case of leasehold property, rent,
service charge and insurance premiums under the lease) whether of a
periodically recurring nature or otherwise, and whether payable by the
owner or occupier of the Premises.
Compliance with statutes and planning obligations
7.8.11 G4TS has received no notices of breach and is not aware of any breach
of the permitted user pursuant to current planning legislation in
respect of the use of the Premises.
7.9 Scottish Leasehold Premises
7.9.1
(a) The particulars of the Scottish Leasehold Premises shown in
Clause 1 are true, complete and accurate.
(b) The Company has a good and marketable title to the Scottish
Leasehold Premises for the estate or interest stated in Clause 1.
(c) The title deeds to the Scottish Leasehold Premises are in the
Company's possession free from any Encumbrance.
(d) Save for the Edinburgh Premises and the Manchester Premises, the
Company does not own, is not in occupation of and is not entitled
to any estate or interest in any heritable or leasehold property
other than the Scottish Leasehold Premises. The Company is not
party to any uncompleted agreement to acquire or dispose of any
heritable, freehold or leasehold property.
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(e) Except in relation to the Scottish Leasehold Premises, the
Company has no liability (whether actual, potential or
contingent) in relation to any heritable or leasehold property
and in particular the Company has never assumed any liability
under a lease (whether as landlord, tenant, guarantor or
otherwise) other than any leases stated in Clause 1.
7.9.2 Rights enjoyed with the Scottish Leasehold Premises
So far as the Company is aware, there are appurtenant to the Scottish
Leasehold Premises all rights and servitudes necessary for its present
use and enjoyment.
7.9.3 Occupation and use of the Scottish Leasehold Premises
(a) Except for any leases, tenancies or other rights of occupation to
which the Scottish Leasehold Premises are subject, as stated in
Schedule 1, the Company is in occupation of the whole of the
Scottish Leasehold Premises and no other person has any right
(actual or contingent) to possession or occupation of the
Scottish Leasehold Premises, or any interest in it.
(b) The use of the Scottish Leasehold Premises as stated in the
appropriate leases corresponds to the use to which it is in fact
put.
7.9.4 Matters affecting the Scottish Leasehold Premises
(a) So far as the Company is aware, without having made
investigations of any third party or other corporate or statutory
body in relation to the same, the Scottish Leasehold Premises,
are not affected by any of the following matters:
(i) any matter which conflicts with the present use of the
Scottish Leasehold Premises, or which would otherwise
restrict its continued possession and enjoyment, for the
purposes set out in the appropriate leases;
(ii) any outstanding breach or alleged breach of covenant or
obligation or of any other restriction or condition, or any
dispute or complaint within the three years prior to the
date of this Agreement, whether actual or threatened which
has not been remedied;
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(iii) any outstanding notice, order, demand, resolution,
proposal, complaint or requirement issued or made, or to
the knowledge of the Company intended to be issued or made,
by any local or other competent authority or body;
(b) So far as the Company is aware, without having made
investigations of any third party or other corporate or statutory
body in relation to the same, there are no demolition or
clearance orders, enforcement notices or stop notices affecting
the Scottish Leasehold Premises nor, to the best of the Company's
knowledge, information and belief, are there any circumstances
likely to lead to any being made.
(c) There are no disputes with any adjoining or neighbouring owners
with respect to boundary walls and fences or with respect to any
servitude, right or means of access to the Scottish Leasehold
Premises.
7.9.5 Outgoings
The Scottish Leasehold Premises are not subject to any outgoings
(other than uniform business rates, water charges and other standard
payments to the relevant water company and, in the case of leasehold
property, rent, service charge and insurance premiums under the lease)
whether of a periodically recurring nature or otherwise, and whether
payable by the owner or occupier of the Scottish Leasehold Premises.
7.9.6 Compliance with statutes and planning obligations
The Company has received no notices of breach and is not aware of any
breach of the permitted user pursuant to current planning legislation
in respect of the use of the Scottish Leasehold Premises.
7.10 Assets
The Company has good title to all the Assets used in its activities
except those Assets which it uses and which are subject to lease or
hire. The Assets are free from any Encumbrance or third party rights.
None of the assets which are either rented or leased by the Company
have been repossessed by their owners and the Company has committed no
breach which would allow the owner of the said assets to repossess
them.
7.11 Vehicles
The Company has good title to all the Vehicles (listed in Schedule 14)
used in its activities except the Rented Vehicles (listed in Schedule
15) which it uses and which are subject to lease or hire. The Vehicles
and the Rented Vehicles are free from any Encumbrance or third party
rights.
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The Vehicles listed in Schedules 14 and 15 are in good state of
maintenance and repair, taking into consideration usual wear and tear
and have passed their MOT (if relevant).
None of the Vehicles which are either rented or leased by the Company
have been repossessed by their owners and the Company has committed no
breach which would allow the owner of the said Vehicles to repossess
them.
7.12 Intellectual property rights
7.12.1 Subject to the licences referred to in Clause 7.11.3 the Company is
without restriction the legitimate owner of the Intellectual Property
Rights that it uses in carrying out its activities. A list of
Intellectual Property Rights indicating their place of registration is
set out in Schedule 16. These registrations are valid and enforceable
and the Seller has no knowledge of any matter which could lead to such
Intellectual Property Rights being the subject of opposition.
7.12.2 The Company does not use any Intellectual Property Right belonging to
third parties and has never been informed of any claim in this
respect.
7.12.3 The Company has not given to any third party any licence or other
authorisation to use the Intellectual Property Rights and has never
been informed of any use by a third party of such rights.
7.12.4 The Company benefits from licences in respect of the Intellectual
Property Rights set out in Schedule 17. These licences are valid, have
been validly granted to the Company and the Company has complied with
all its obligations in this respect. The Company has not granted any
sub-licence.
7.12.5 The Company is entitled to use without payment all material know how
and other material technical information used by it in connection with
its business or businesses and all information concerning the methods
and processes used by the Company, and no rights to disclosure or use
of any material know how or material technical information used by the
Company has been granted to or claimed by any third party.
7.12.6 None of the processes, products of the Company, know how or technical
or other information used by the Company infringes, to the best of the
Seller's knowledge and belief, any intellectual property or any right
of any other person, relating in particular to intellectual property,
or involves the unlicensed use of confidential information disclosed
to the Company by any person in circumstances which might entitle that
person to make a claim against the Company.
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7.12.7 There are no outstanding claims against the Company for infringement
of any intellectual property or of any rights relating to it used (or
which has been used) by the Company and no such claims have been
settled by the giving of any undertakings which remain in force. The
Company has not received any actual or threatened claim that any of
the Intellectual Property Rights is invalid.
7.12.8 Confidential information, including know-how and trade secrets used by
the Company are kept strictly confidential. The Company has not
disclosed any of its confidential information to any other person save
where a legally binding and of full force and effect confidentiality
agreement in respect of such disclosure is in place. The Seller and
the Company are not aware of any such confidentiality having been
breached.
7.12.9 Schedule 18 details the computer software used by the Company and sets
out, whether such computer software belongs to the Company or whether
the Company has a licence in respect of it. The Company has not
granted a licence to any third party in respect of the computer
software belonging to it and it has no knowledge of any use of such
computer software by any third party. The Company does not use without
authorisation, computer software belonging to third parties and has
not been informed of any claim in this respect.
7.12.10 The computer software owned by the Company or in respect of which the
Company has been granted a license is sufficient and appropriate to
enable the Company to exercise its present activities.
7.12.11 So far as the Seller is aware disaster recovery plans are in effect
and are adequate to ensure that the computer hardware, computer
software and/or data can be replaced or substituted without material
disruption to the business of the Company.
7.12.12 So far as the Seller is aware the Company has adequate procedures to
ensure internal and external security of the computer hardware,
computer software and data, including (without limitation) procedures
for preventing unauthorised access, preventing the introduction of a
virus, taking and storing on-site and off-site back-up copies of the
computer software and data.
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7.12.13 The computer hardware and the computer software have not in the period
of 12 months immediately prior to Completion been unduly interrupted
or hindered the running or operation of the Company's business.
7.13 Insurance
7.13.1 The Company has at all times maintained insurance coverage of a type
and level reasonably appropriate to the businesses carried out by it
in respect of, in particular but not limited to, its Assets and
Vehicles, whether owned or rented, Leasehold Premises, activities and
operations.
7.13.2 Schedule 19 lists the insurance policies entered into by the Company
and which will be available after the Completion together with the
insurance policies entered into by the Company and which will not be
available after Completion.
7.13.3 These policies extend to all risks which have to be or are normally
insured against in respect of the activities carried out by the
Company, and more particularly all loss of opportunity or any other
liability resulting from the products.
7.13.4 Schedule 20 sets out the incidents for the previous three (3)
accounting periods in respect of which the Company has made claims
under the policies set out in Schedule 19 together with the amount of
payments made under such policies.
7.13.5 The Company is up-to-date with the payment of its premiums in respect
of the policies mentioned in Schedule 19 and has complied with all
formalities and contractual clauses contained in such policies; the
Company has not been informed by the insurance companies concerned of
their intention to increase the premiums, or to terminate the policies
or not to renew them.
7.14 Environment
7.14.1 The Company has complied with and is not in violation of the UK
legislation in place in relation to environmental matters in respect
of protection of the environment and nature, waste, water, soil and
sub-soil pollution, storing, labelling, packaging and transport of
hazardous, radioactive or carcinogenic materials, substances,
preparations and products.
7.14.2 To the Seller's and the Company's knowledge there are no hazardous
materials contained in the soil, groundwater or buildings of the
Leasehold Premises which could lead to a danger, material
disadvantage, nuisance to individuals or the public or otherwise
requiring instantly to be removed or otherwise cured pursuant to any
presently existing mandatory law or any existing or threatened
governmental or municipal order.
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7.15 Litigation
7.15.1 The Company is not subject to any claim from third parties,
contentious or non-contentious, in respect of any default in
performance of its obligations resulting from contracts, agreements or
undertakings signed by it.
7.15.2 The Company is not subject to any litigation, legal proceedings,
investigation or administrative proceedings or arbitration, and there
is no fact or event which suggests that such proceedings may arise.
7.15.3 The Company is not, and has not been, parties to or concerned by any
agreement, decision or practice by Article 81 of the Treaty of Rome,
nor is it abusing nor has it abused, a dominant position as prohibited
by Article 82 of the Treaty of Rome.
7.16 Customers and suppliers
7.16.1 Schedule 21 contains a list of the twenty (20) main customers of the
Company.
7.16.2 Schedule 22 contains a list of the top five (5) suppliers of the
Company.
7.17 Contracts
7.17.1 Schedule 23 contains a list of the contracts entered into by the
Company:
(a) with its customers and involving an amount of seventy thousand
pounds ((pound)70,000) or more per annum;
(b) with its suppliers and involving an amount of thirty-five
thousand pounds ((pound)35,000) or more per annum.
7.17.2 The Contracts referred to in Clause 7.17.1 (the "Material Contracts")
are sufficiently legally documented to enable the Company to exercise
its rights thereunder. The Material Contracts are in full force and
effect and are not subject to any contentious or non-contentious
claim. The Company has complied with its contractual obligations and
the Seller has no knowledge of any event which may exist which may
give rise to termination or render the contracts void or which may
authorise a third party to demand prompt payment or give rise to any
liability on the part of the Company or its officers or employees.
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7.17.3 Neither the execution of this Agreement nor the performance of the
Agreement contemplated herein will violate or conflict with the
constitutional documents of the Company, or violate or constitute a
default under any material contract, agreement, mortgage, or other
instrument or order, judgement or ruling of any governmental authority
to which the Company is a party or to which any of its property is
bound.
7.17.4 There exists no contract or undertaking containing a termination
clause or a prompt payment clause or a modification to the provisions
in the event of a change of owner of the Company.
7.18 Tax Regulations
7.18.1 The Company has paid all Taxes owing under any Tax Regulations
(whether or not reflected on any tax return), and has withheld and
paid all Taxes required to have been withheld and paid in connection
with amounts paid or owing to any employee, independent contractor,
creditor, shareholder, or other party, and has collected and paid all
Taxes required to have been collected and paid in connection with
amounts charged to customers or other parties, and adequate provisions
have been made in the Accounts for all future Taxation relating to the
period before Completion. For purposes of determining whether adequate
provisions have been made in the Accounts, Tax items shall be
apportioned between pre-Completion activities and post-Completion
activities based upon a closing of the books and records of the
Company as of Completion (or, if an actual closing is not feasible, on
an equitable pro forma basis that has a comparable economic result to
the result that would have been obtained had an actual closing
occurred).
7.18.2 The Company has satisfied all filing requirements for tax returns or
other declarations required by the Tax Regulations in the form
required within the necessary time limit.
7.18.3 The Company has complied with all applicable Tax Regulations of the
UK.
7.18.4 The Company is not subject to any current or proposed tax examination,
enquiry or investigation in relation to Taxes and the Company is not
aware, directly or indirectly, of any tax examination, enquiry or
investigation in respect of Taxes or any enquiry instigated by an
administrative authority leading, or likely to lead to the payment of
a Tax or an assessment of any Tax . The Company has not received any
notice of assessment which remains to be discharged, nor has it
otherwise been informed (in writing or orally) by any administrative
authority of its intention to issue any assessment whatsoever. The
Company is not and does not expect to be involved in any dispute
relating to Tax.
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7.18.5 The Company has not entered into any agreement, transaction,
arrangement, or scheme which might be reassessed, rejected or
re-qualified on the grounds that the Company has attempted to evade,
circumvent or reduce its Tax obligations or that of another person.
7.18.6 The Company has not entered into any agreement, transaction,
arrangement, or scheme or obtained any concession, allowance or
abatement in respect of a Tax, with any administrative or political
authority whatsoever that is not based on a strict application of the
Tax Regulations.
7.18.7 The Company is incorporated under the laws of England and Wales and
has always been exclusively resident in Scotland and England for the
purpose of Taxes, and has no permanent establishments or other taxable
presence for the purpose of or as defined by Tax Regulations, in any
country outside of Scotland and England.
7.18.8 The Company maintains its accounts and records for a minimum period of
7 years.
7.18.9 No liens for Taxes are imposed upon the Company's assets.
7.18.10 There are no outstanding rulings of, or requests for rulings with, any
taxing authority addressed to the Company that are, or if issued would
be, binding upon the Company for any period following Completion.
7.18.11 The Company has not agreed to the extension of time with respect to
the filing of any tax return or other declaration, the payment of any
Taxes, or any limitation period regarding the assessment or collection
of any Taxes.
7.18.12 No item of income or gain reported for Tax purposes in any
pre-Completion tax period will be required to be included in taxable
income for any post-Completion tax period.
7.18.13 The Company has not within the period of six years ending on the date
of this Agreement paid or become liable to pay any penalty, fine,
surcharge or interest in connection with any Tax.
7.18.14 The amount of Tax chargeable on the Company during any accounting
period ending on or within the six years before Completion has not
depended on any concessions, agreements or other formal or informal
arrangements with any taxing authority.
7.18.15 All applications for clearance or consent by the Company or on its
behalf or affecting the Company has been made and obtained on the
basis of full and accurate disclosure to the relevant taxing authority
of all relevant material facts and considerations; and for any
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transaction for which clearance or consent was required, such
clearance or consent and the relevant transaction was carried into
effect only in accordance with the terms of the relevant clearance or
consent.
7.18.16 The Company has filed all requests, forms and applications to get a
Tax refund, a Tax reduction, credit for Taxes paid or accrued, input
tax relief, tax loss carry forwards or any other Tax benefit in a
timely manner.
7.18.17 No liability to national insurance contributions or obligation to
account for income tax could fall on the Company as a result of a
chargeable event (within the meaning of Part 7 Income Tax (Earnings
and Pensions) Act 2003) before, at or after Completion in respect of
securities and interests in securities made available or securities
options granted to an employee or director prior to Completion and no
share incentive scheme in which employees or directors of the Company
participate has been established by the Company, the Seller or any
Seller's Group Affiliate.
7.18.18 The Company is not, nor will it become, liable to pay, or make
reimbursement or indemnity in respect of, any Taxes (or amounts
corresponding to any Taxes) payable by or chargeable on or
attributable to any other person, whether in consequence of the
failure by that person to discharge that Tax within any specified
period or otherwise, where such Tax relates to a profit, income or
gain, transaction, event, omission or circumstance arising, occurring
or deemed to arise or occur (whether wholly or partly) on or prior to
Completion.
7.18.19 The Company does not own any asset which, as a result of the sale of
the Shares pursuant to this Agreement, will give rise to a charge
under section 179 Taxation of Chargeable Gains Act 1992.
7.18.20 The Company has not claimed relief from stamp duty or stamp duty land
tax in circumstances where such relief could be withdrawn (whether by
reason of the sale of the Shares under this Agreement or otherwise).
7.18.21 The Company has not entered into any group payment arrangements under
the provisions of section 36 Finance Act 1998.
7.18.22 The Company has not undertaken, or agreed to undertake, any
transaction or made any provision which is otherwise than on fully
arm's length terms and there are no circumstances which could cause
any taxation authority to make or require to be made any adjustment to
the terms on which such transactions are or such provision is treated
as taking place. Documentation is available to demonstrate the
criteria taken into account in determining arm's length terms for
transactions to the extent required by law.
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7.19 Bank accounts, delegations of power, etc.
7.19.1 Schedule 24 lists the bank accounts and safety deposits in the name of
the Company and sets out the authorised signatories as well as the
required conditions, in particular in relation to joint signatories,
for the operation of the accounts and access to the safety deposits.
7.19.2 Schedule 25 contains a list of all nominated signatories, delegations
of power, proxies and authorisations of whatever nature and form
granted by the Company to any person for other purposes than the
operation of bank accounts.
7.20 Authorisations and other permits
The Company has all the Authorisations necessary to exercise its
present activities. These Authorisations are in full force and effect
and the activities of the Company are carried out in accordance with
such authorisations and permits.
7.21 Effect of the transfer of the Sale Shares
The transfer of the Sale Shares to the Buyer will not affect in an
adverse way the legal situation of the Company and will have no effect
on the rights and obligations of the Company in respect of any person;
in particular, the transfer of the Sale Shares will not give rise to
any event of default or termination of any of the contracts to which
the Company is a party.
7.22 Material adverse change
Since the Last Accounting Date:
(a) There has been no distribution to shareholders, nor any
depreciation, increase or reduction in capital in the respect
of the Company;
(b) No undertaking or obligation has been entered into which is
outside the usual business of the Company or has been entered
into in unusual circumstances;
(c) The activities of the Company have been carried out in the
ordinary and normal course of business in such a way as to ensure
their continuity;
(d) The Company has not amended the Accounting Methods and Principles
and has not revalued any assets, nor written-off any debt in
excess of five thousand pounds ((pound)5,000).
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7.23 Representations, Warranties and Schedules true and correct
The representations and warranties contained herein, as well as the
Schedules attached, are true, exact and complete as of the date of
this Agreement.
There is no undisclosed fact, agreement or document which, if it had
been disclosed, would be reasonably expected to have caused the Buyer
not to enter into this Agreement or to enter into this Agreement on
materially different terms.
8. OTHER OBLIGATIONS OF THE SELLER
-------------------------------
8.1 Management of the Company up to Completion
8.1.1 The Seller warrants and represents that from the Date of this
Agreement until Completion:
(a) No decision will be taken by the Company which affects or could
affect in a material and adverse way the financial assets and
liabilities the situation or the profitability of the Company;
(b) No decision on the declaration or payment of dividends or any
other distribution to shareholders, nor any depreciation,
increase or reduction in capital will be taken in respect of the
Company;
(c) No undertaking or obligation will be entered into outside the
usual business of the Company or subject to unusual conditions;
(d) The activities of the Company will be managed in the ordinary and
normal course of business and in such a way as to ensure its
continuity;
(e) The Company will use its commercially reasonable efforts to
preserve its relationship with its customers, suppliers and
others having a business relationship with the Company;
(f) The Company will not modify in any way the Accounting Methods and
Principles and will not revalue any assets, nor write-off any
debt.
8.1.2 Without limitation to the general character of Clause 8.1.1 above, the
following decisions will require the prior written consent of the
Buyer but so long as such consent is given, will not constitute a
breach of Clause 8.1.1 provided that the Buyer may not unreasonably
withhold such consent if the Seller demonstrates that such decision is
necessary to ensure the full viability, marketability or
competitiveness of the Company:
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(a) A single payment exceeding in total (pound)35,000 (thirty-five
thousand pounds), with the exception of reimbursements previously
made by the Seller and of which the Buyer is aware and payments
in respect of salaried employees, Taxes and rents;
(b) The granting of, or application by the Company for a loan, credit
or monetary facility;
(c) The granting of, or application by the Company for a guarantee,
charge, pledge or other encumbrance and the execution of any
letter of intent or letter of comfort;
(d) The entering into of any agreement with corporate officers or
employees of the Company and any increase in remuneration not
imposed by law or a contract in force at the date of this
Agreement, as well as the granting of any benefit whatsoever;
(e) The recruitment of all salaried employees having a gross annual
remuneration in excess of (pound)21,000 (twenty one thousand
pounds), or the negotiation of any agreement whatsoever in
relation to collective agreements of employees of the Company;
(f) Salary increases of employees having a gross annual remuneration
in excess of (pound)21,000 (twenty-one thousand pounds);
(g) The entering into new employment contracts that would have a
material impact or materially modify the terms and conditions of
the current employment agreements;
(h) The launching of new activities or new products;
(i) The entering into of all contracts in excess of a sum of
(pound)35,000 (thirty-five thousand pounds) or with a fixed
duration exceeding twelve (12) months;
(j) The termination by the Company of all contracts in excess of a
sum of (pound)21,000 (twenty-one thousand pounds)or with a fixed
duration exceeding twelve (12) months;
(k) All changes in the activity or in the Memorandum or Articles of
Association of the Company; and
(l) Transfer of any assets of the Company.
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8.1.3 From the date of this Agreement until the Date of Completion, the
Seller will notify the Buyer (i) of any emergency or material change
in the normal conduct of the Company and (ii) of the threat or the
initiation of any litigation against the Company, and will keep Buyer
fully informed of developments with respect to such events and afford
Buyer's representatives full access to all materials in its possession
relating thereto.
8.2 Situation at Completion
8.2.1 The Seller warrants that all the representations and warranties
contained in Clause 7 and the information set out in the Schedules
including the Disclosure Schedule will, be true and complete at
Completion as if such representations and warranties had been given
and granted as that date.
8.2.2 The Seller may update the Schedules of this Agreement in order to take
into account changes arising prior to Completion or matters in
relation to which the Buyer has given its consent. The Seller shall
notify the Buyer of all changes to the Schedules and wherever
reasonably practicable the changes to the Schedules shall be made and
notified to the Buyer at least 48 hours prior to Completion.
8.3 Non-competition, non-solicitation and confidentiality undertaking
8.3.1 Except as provided in Clause 8.4.2 or as compelled by law or legal
authority, with effect from the Date of this Agreement and for a
period of three years from the date of Completion, the Seller
undertakes that neither the Seller nor Seller's Group Affiliates for
whom the Seller is responsible, shall at any time directly or
indirectly by themselves or in conjunction with any other party or
venture, unless first authorised by the Buyer in writing, utilize or
disclose to any third party any commercial secret, know-how or
confidential information belonging to the Company or its activities.
Notwithstanding the foregoing, save as compelled by law or legal
authority, in no circumstances may such information be utilised or
disclosed for a period of 6 months following Completion.
8.3.2 From the Date of this Agreement and for a period of six months from
the date of Completion, the Seller undertakes that neither the Seller
nor the Sellers' Group Affiliates for whom it is responsible, shall at
any time directly or indirectly by themselves or in conjunction with
any other party or venture, canvass or solicit orders for the supply
of services substantially similar to or otherwise competing with those
supplied by the Company as at Completion in the normal course of
business from any person who was a customer of the Company as at 28
May 2004 or is a customer at the date of Completion, or induce or seek
to induce any such person to cease being a customer of the Company.
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8.3.3 From the Date of this Agreement and for a period of two years from the
date of Completion, the Seller undertakes that neither the Seller nor
the Sellers' Group Affiliates for whom it is responsible, shall at any
time directly or indirectly by themselves or in conjunction with any
other party or venture, solicit any of the employees of the Company
whose names are listed below to leave their present or future
functions within the Company or employ directly or indirectly such
employees. The employees in respect of whom these provisions apply
are:
o Fiona Burke
o Denise McNeill
o Ken Barnes
o Malcolm Young
o Carol Moloney
o Claire Peck
8.4 Undertaking of exclusivity
8.4.1 Except as provided in Clause 8.4.2 the Seller undertakes neither to
transfer Sale Shares to a third party, nor to grant any third party
any rights over the Sale Shares nor to take any steps nor to engage in
any negotiation in relation to acquiring any interest in the capital
of the Company, nor take any action, whether directly or indirectly,
with the intention of impeding or preventing the Buyer from purchasing
the Sale Shares, until Completion, or until termination of this
Agreement.
8.4.2 It is understood that the Seller shall not be precluded from advancing
discussions with prospective alternative buyers of the Company
provided however that the Seller shall:
(i) enter into all necessary and appropriate legally binding
confidentiality undertakings with all such other prospective
alternative buyers;
(ii) fully coordinate all discussions with, and hold such discussions
only with, the Monitoring Trustee approval. Any action or
disclosure of information shall be limited to what the the
Monitoring Trustee deems permissible, with a view to:
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(a) ensuring that no information is provided that is commercially
sensitive or that could endanger the viability and stability of
the Business; and
(b) preserving the current and future competitiveness of the
Business;
(iii) inform all alternative buyers of the fact that the Seller has
entered into a legally binding and confidential agreement for
the sale of the Shares to the Buyer, subject only to EU
Commission approval. Accordingly, all prospective alternative
buyers shall be made specifically aware that their engagement in
the sale process is only as an alternative in the event that the
Transactions with the Buyer fail to close;
(iv) be precluded from providing prospective alternative buyers
access to management and employees of the Company and Company
site visits;
(v) not develop or discuss any potential transaction with an
alternative buyer beyond a stage that could reasonably be
characterised as preliminary drafting based on the first draft
Sale and Purchase Agreement provided initially to the Buyer. For
the avoidance of doubt, no final documents shall be agreed or
exchanged, regardless of whether or not they are legally
binding.
(vi) together with the Buyer, use their respective best endeavours to
coordinate and promptly take any action that is deemed
reasonably necessary or advisable by the parties to facilitate
the EU Commission approval of the Seller's submission and
request for approval of this Transaction; and
(vii) refer prospective alternative buyers only to Graham Foster and
S0ren Lundsberg-Nielsen both of G4S plc, who shall be the only
authorised individuals to deal with any prospective alternative
buyers.
8.5 Transitional period and services
8.5.1 The Company shall be authorised, subject to its entering into a trade
mark licence in the form set out in Schedule 26, during a maximum
period of six months from the date of Completion, to continue to use
all patents, trademarks, service marks, trade names, logos, company
names, designs and models, know-how, copyrights and industrial
property rights which are currently registered in the name of the
Company or used by the Company, including the stationery and uniforms,
but only in the same manner and for the same purposes as they were
used prior to the date of Completion
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For the avoidance of doubt, no other rights whatsoever are granted to
the Company or the Buyer in respect of the names "Securicor", "Group
4" "Group 4 Falck" or "Falck" or any associated trademarks.
8.5.2 The Seller has committed to provide the Company with necessary and
adequate transitional services for up to 6 months post Completion as
reasonably requested by the Buyer and reasonably sufficient to enable
the Company to be fully functional in relation to its business as
conducted prior to Completion. The Buyer will use its best efforts to
make the transition as short as possible and cease the use of the
services as soon as possible within the 6 month period. The outline of
the main services currently being provided to the Company is specified
in Document 18 referred to in Schedule 2, Part (b). Prior to
Completion the parties will use their best efforts to develop and
agree a comprehensive Transitional Services Agreement ("TSA")
specifying the services to a degree necessary for the practical
implementation of the services. The transitional services shall be
provided by the Seller at no cost to the Buyer or the Company.
8.5.2.1 The Seller shall provide the following transitional services
to the Company:
(a) Collect, compile, analyse and present the monthly management
accounts consistent with past practice, subject to the
information being provided by the Company in a timely manner
meeting the same reporting deadlines as prior to divestment.
(b) Continue to provide management information consistent with past
practice and provide the same availability as prior to the
divestment.
(c) Making available appropriate and agreed procurement and
purchasing systems and information and provide necessary and
relevant supervision of actual procurement.
(d) Making available appropriate and agreed invoicing and credit
control systems and information and provide necessary and
relevant supervision of actual invoicing and credit control.
(e) Making available an appropriate and agreed payroll system and
providing the necessary and relevant supervision for the actual
handling of the payroll.
(f) HR support comprising general advice and guidance, mainly
provided by phone and e-mail as a back office hot line service.
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(g) Contract management comprising general advice and guidance,
mainly provided by phone and e-mail as a back office hot line
service.
(h) Support for supervising and maintaining the IT systems with the
aim of preserving the same availability and functionality as pre
Completion. Further, necessary support and supervision to
facilitate migration of IT systems to be operated on a stand
alone basis and/or provide the integration into and connection to
the Buyer's IT Systems.
(i) To the extent that the Company prior to Completion as part of its
ordinary operation was utilising services provided by the Seller
or a Seller's Group Affiliate, which is not adequately covered as
part of sub-clauses (a) to (h) above, then such additional
service shall continue to be provided by Seller as a transitional
service consistent with past practice.
(j) All equipment utilised by the Company, as part of its ordinary
operation prior to Completion shall be deemed as an asset
belonging to the Company, regardless of whether the Company has
title or other legal entitlement to use such asset, with the
effect that the Seller or a Seller's Group Affiliate cannot claim
a right to take possession of such equipment. However, should the
Seller intend to take possession of any such asset then the
Seller shall give the Buyer reasonable prior notice before taking
any such action.
8.5.2.2 The Seller shall supply such specified transitional service
on the following main conditions:
(a) Seller is providing the services at its own cost and shall not
invoice any cost to the Buyer or the Company.
(b) Seller has the management control over by whom and how such
services will be provided.
(c) Seller shall not undertake any liabilities for the provision of
services or liability for the services or lack of same beyond
what liabilities a non-related outsourcing provider would
normally be expected to accept to undertake.
(d) If Buyer requests service beyond the 6 month period and Seller
agrees to provide such service, Seller reserves to do this on an
arms length charging basis.
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9. REPRESENTATIONS AND WARRANTIES OF THE BUYER
-------------------------------------------
9.1 The Buyer represents and warrants to the Seller that the Buyer is a
company which is duly incorporated and registered, that it validly
exists under the laws of England and Wales, is not in administration
proceedings and is not subject to a voluntary liquidation procedure;
the Buyer represents and warrants equally that it is not subject to
any proceedings whether or not criminal which restricts the Buyer from
purchasing the Sale Shares in accordance with the terms of this
Agreement and that its directors and other corporate officers are not
subject to any criminal proceedings restricting them from exercising
the powers or functions they may exercise on behalf of the Buyer. The
Buyer represents and warrants that the signing of this Agreement has
been duly authorised by its corporate bodies and that this Agreement
constitutes for it an agreement which is binding in accordance with
its terms.
9.2 In order to ensure full and complete information, the Seller has
delivered to the Buyer and its advisors, the documents and information
listed in Schedule 27, such documents and information contain legal,
financial, accounting and commercial data. It is on the basis of these
documents and this information delivered to and reviewed by the Buyer
that the Buyer has decided to purchase the Sale Shares in accordance
with the terms of this Agreement.
It has been expressly agreed between the Parties that the
representations and warranties of the Buyer in this Agreement will
have no effect on the scope of the representations and warranties of
the Seller contained in Clause 7 and, save for the warranty given in
Clause 9.3, on the effectiveness of the claims procedures contained in
this Agreement and in particular in Clause 10. Only the information
contained in this Agreement or in its Schedules attached (as it exists
of the Date of this Agreement or which is updated in accordance with
Clause 8.2.2 may release the Seller from its liability in accordance
with Clause 10.
9.3 The Buyer hereby warrants to the Seller that it has no actual
knowledge of a breach of or inconsistency with any of the warranties
or representations set out in Clause 7, except for matters set out in
the Disclosure Schedule and except for the fact that the Company has
historically claimed Industrial Buildings Allowances until 2001;
notwithstanding the foregoing, to the extent that this fact may be a
breach or inconsistency with any of the warranties and
representations, the Buyer would have a claim.
9.4 The Buyer acknowledges that it has not been induced to enter into this
Agreement by, nor has it relied upon, anything other than the entirety
of this Agreement, including but not limited to the representations
and warranties set out in Clause 7.
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SECTION III - INDEMNIFICATION
-----------------------------
10. INDEMNIFICATION
---------------
10.1 Principle
10.1.1 The Seller undertakes to indemnify the Buyer, or any other person
nominated by the Buyer, against:
(a) any Loss that the Company or the Buyer may suffer by virtue of a
reduction in the value of an item of assets or an increase in the
value of an item of liabilities resulting from a liability not
being specifically accounted for or insufficient provision being
made for it in the Accounts, as long as the cause or origin of
this reduction in assets or increase in liabilities arises prior
to Completion;
(b) any Loss that the Company or the Buyer suffer as a result of any
breach, inaccuracy or omission in the representations and
warranties contained in Clause 7 or of the non-performance by the
Seller of any of its obligations under this Agreement, as long as
such Loss has not been indemnified in full by the provisions of
Clause 10.1.1 (a) above;
(c) any Loss that the Company suffers in respect of Taxes in relation
to a period prior to Completion which has not been accounted or
provided for in the Accounts;
(d) any Loss that the Company suffers in respect of value added tax,
whether such Loss arises in respect of matters occurring before
or after Completion, where the liability in question relates to
supplies made by any company (other than the Company) which is or
was a member of the same value added tax group as the Company on
or before Completion.
10.1.2 The obligation to indemnify applies as well to all events which occur
between the Date of this Agreement and Completion and which have the
effect of rendering the representations, warranties and undertakings
contained in Section II incorrect or incomplete whether or not the
Loss suffered could not be ascertained or was not ascertained until
after Completion.
10.1.3 If the Loss to which the provisions of Clause 10.1.1 applies relates
to Taxes, the undertaking of the Seller under Clause 10.1.1 to
indemnify the Buyer is agreed to be an undertaking to pay to the Buyer
an amount equal to the liability to Taxes.
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10.2 Net Loss
The Seller is only liable to indemnify the net Loss. In this respect,
the total indemnity under this clause will be calculated taking into
account the following factors:
(a) If the event which forms the basis of a request for an indemnity
for Loss has given rise to the making of a provision in the
Accounts, the amount of the indemnifiable Loss will be reduced by
the amount of the provision in the Accounts specifically booked
to cover such Loss;
(b) If the event gives rise to an insurance claim and recovery paid
to the Company or to the Buyer, the amount of the Seller's
liability shall be reduced by such payment;
(c) Any tax adjustment which has the sole effect of transferring an
expense or an income from one financial year to the next
financial year will only be taken into account in respect of
interest and late payment penalties on the transfer of such
expenditures or income;
(d) All amounts paid by the Seller or the Buyer, as the case may be,
under the terms hereof shall be treated to the extent permitted
under applicable tax law as adjustments to the Purchase Price for
all Tax purposes, and to the extent not so permitted, the amount
of any such payment shall be increased to take into account the
Tax, if any, resulting from the receipt of such payment.
10.3 Limitations of Liability
10.3.1 The Seller shall not be liable to the Buyer pursuant to Clause 10.1 or
for a breach of the warranties or representations set out in Clause 7:
10.3.1.1 to the extent that the claim relates to any matters disclosed
in the Disclosure Schedule.
10.3.1.2 to the extent that a claim arises:-
(a) wholly or partly from an act or omission occurring at the request
of or with the written consent of the Buyer or (on or after the
date of Completion) the Company;
(b) wholly or partly from an act or omission since the last Accounts
Date compelled by law;
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(c) wholly or partly as a result of any increase in rates of taxation
since the Last Accounting Date;
(d) wholly or partly as a result of the passing after Completion of
an enactment or other government regulation with retrospective
effect.
10.3.1.3 to the extent that the subject of the claim:
(a) has been or is made good or is otherwise compensated for without
cost to the Buyer or the Company; or
(b) is or but for this Agreement would be recoverable by the Company
by insurance in place at Completion, or would have been so
recoverable but for any change in the terms of insurance since
the date of Completion.
10.4 Where the Buyer and/or the Company are at any time entitled to recover
from some other person any sum in respect of any matter giving rise to
a claim under Clause 10.1 or under any of the other provisions of this
Agreement the Buyer shall and shall procure that the Company shall
undertake all reasonable steps to enforce such a recovery prior to
taking any action (other than notifying the Seller of the claim)
against the Seller and in the event that the Buyer or the Company
shall recover any amount from such other person the amount of the
claim against the Seller shall be reduced by the amount recovered
PROVIDED THAT
(i) the costs and expenses of such action are paid for by the Seller;
and
(ii) time for bringing a claim against the Seller pursuant to Clauses
12.1 or 12.2 is extended to a period of three months following
cessation of such third party claim.
10.5 If the Seller pays at any time to the Buyer or to the Company any
amount pursuant to a claim pursuant to Clause 10.1 and the Buyer or
the Company subsequently becomes entitled to recover from some other
person any sum in respect of any matter giving rise to such claim the
Buyer shall procure that the Company shall take all necessary steps to
enforce such a recovery and shall forthwith repay to the Seller so
much of the amount paid by them to the Buyer or the Company as does
not exceed the sum recovered from such other person less all costs,
charges and expenses incurred by the Buyer or the Company in
recovering that sum from such other person.
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10.6 The Buyer shall be liable to the Seller in respect of any Loss that
the Seller suffers as a result of any breach, inaccuracy or omission
in the representations and warranties contained in Clause 9 or of the
non-performance by the Buyer of any of its obligations under this
Agreement.
10.7 The Buyer accepts that it has a general duty to mitigate its Loss.
11. FLOOR THRESHOLD AND CEILING
---------------------------
11.1 Floor
The Seller will only be liable to the Buyer under Clause 9 or Clause
10 if an individual Loss giving rise to a claim under this Agreement
exceeds the sum of (pound)7,000 (seven thousand pounds).
11.2 Ceiling
The total amount for which the Seller may be liable under this
Agreement shall not exceed an amount which is equal to 100% of the
Purchase Price.
11.3 Exception
The floor and ceiling in this Clause 11 will not apply :
(a) in the case of fraudulent or intentional conduct of the Seller in
the context of the operations set out in this Agreement;
(b) to claims arising from a violation of Clause 7.17 (Tax) of this
Agreement;
(c) to claims arising from a violation of Clause 7.13 (Environment)
of this Agreement, where the ceiling for such claim shall not
exceed an amount equal to 50% of the Purchase Price;
(d) to claims arising from any customers of the Company alleging a
loss or shortfall in the Customer Accounts.
(e) in the case of the warranty provided in Clause 7.5.1 where this
refers to the Accounts as at 31 December 2004.
12. DURATION OF INDEMNIFICATION
---------------------------
12.1 Requests for Indemnification pursuant to this Agreement in respect to
Taxes must be received before the expiration of a period of seven
years (save where the relevant limitation period applicable to Taxes
is longer than seven years or increased beyond seven years with
retrospective effect, in which case such increased period shall be
applicable) plus three (3) months, from the date of Completion.
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12.2 Save as otherwise specifically provided any other requests for
indemnification pursuant to this Agreement must be received before the
expiration of a period of eighteen (18) months from the Date of
Completion. Claims under Clause 8.3 of this Agreement are not subject
to this limitation on the period during which such claims may be
brought.
12.3 The Buyer shall not lose its right to indemnification at the
expiration of the limitation periods referred to above as long as the
requests pursuant to this Agreement (or the events which may give rise
to a claim) are notified before the expiration of such periods
PROVIDED THAT the liability of the Seller for any claim shall
absolutely cease (unless the amount payable in respect of a claim has
been agreed by the Seller within 6 months of the date of written
notice given pursuant to Clause 12.1 or Clause 12.2 (as the case may
be)) if legal proceedings have not been instituted in respect of such
claim within 6 months of the date of written notice given pursuant to
Clause 12.1 or Clause 12.2 (as the case may be)(or such later date as
the Buyer and Seller may agree).
13. PENSIONS INDEMNITY
------------------
13.1 The Seller shall continue to bear full responsibility for the
provision of all benefits whatsoever (whether through a group pension
scheme or schemes or otherwise) on retirement or death for all
employees of the Company in respect of the period to Completion. The
Seller shall indemnify the Buyer in full against any costs or expenses
incurred by the Buyer or the Company on or from Completion arising
from any obligation of the Company, including any failure by the
Company to comply with any such obligation, in respect of any
arrangement (including any oral promise or any obligation which has
developed from custom and practice) for the provision of all benefits
on retirement or death in respect of the period to Completion. If the
Buyer requests the Seller to provide it with any information which it
requires with a view to establishing pension arrangements for the
employees of the Company following Completion, the Seller shall, as
soon as practicable after such request, provide the Buyer with such of
the information requested which it is reasonable for the Buyer to
request and which it is practicable for the Seller to provide.
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13.2 For a period of 6 months following the date of Completion, no notices,
invitations and announcements relating to the pension arrangements
made available to, or to be made available to, the employees of the
Company will be issued by the Buyer or the Seller without the prior
written agreement of the other party (such agreement not to be
unreasonably withheld or delayed).
13.3 For the avoidance of doubt the indemnity provided for under this
Clause 13 shall not be subject to any disclosures, qualifications or
limitations (as to time or amount) which are set out in any other
provision of this Agreement and in particular in Clauses 10, 11 and
12.
14. NOTIFICATION PROCEDURE AND PAYMENT OF THE INDEMNITY
---------------------------------------------------
14.1 Principle
14.1.1 Any event capable of giving rise to an obligation to indemnify must be
notified in writing by the Buyer to the Seller forthwith upon the
Buyer becoming aware of the same, specifying full details of the
reasons for which the Buyer requests indemnification from the Seller
as well as the sum of the indemnifiable Loss incurred, if
determinable.
14.1.2 Except in the event that written objection is sent by the Seller to
the Buyer within two (2) months of the receipt by the Seller of the
notification above, and save where a claim is being made against a
third party in accordance with Clause 10.4, the indemnification
requested shall be considered due and shall give rise to interest
accruing after the date of reception by the Seller of the request for
indemnity by the Buyer (the interest being payable at the same time as
the indemnity). The relevant interest rate shall be 5% per annum.
14.1.3 If on the contrary, the Seller notifies an objection to the Buyer in
the time-limits set out above, the dispute shall be settled pursuant
to Clause 14.11.
14.2 Third party requests
14.2.1 In the event of any legal or administrative action filed by a third
party against the Company as well as of a tax assessment issued
against the Company, which would give rise to a request by the Buyer
to the Seller, the Buyer or the Company shall give written notice to
the Seller as soon as is reasonably practicable following the Company
becoming aware of such action. It is expressly understood that any
delay by the Buyer or the Company in informing the Seller will only
give rise to the payment of damages to the Seller in an amount equal
to the loss suffered by the latter, but such limitation of the Buyer's
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liability shall be applicable only if the Buyer's or the Company's
delay in providing notification significantly compromised the Seller's
ability to participate in the defence of such action and the Seller
was otherwise entitled to participate in the defence under the terms
of this Agreement.
14.2.2 In the event the Seller does not notify in writing the Buyer of its
intentions in respect of the conduct of the legal action referred to
above within 30 (thirty) Working Days of receipt of the notification
referred to above, the Seller shall be deemed to have decided not to
take part in the defence of the Company against the third party claim.
14.2.3 It is expressly agreed the Buyer shall be authorised to commence any
urgent action to defending the Company's interests without consulting
the Seller, if the Seller's advice cannot be reasonably obtained
considering the nature of the legal action to be conducted and/or the
time-limits for response set out by the third party.
14.2.4 In the event of a disagreement on the strategy to be implemented, or
if the Seller chooses not to intervene in the defence of the Company,
the Company will keep ultimate management of its defence for its own
benefit and that of interested parties as is set out above.
14.2.5 Subject to the second sentence of this Clause 14.2.5, the Company
shall control any audits, disputes, administrative, judicial or other
proceedings related to Taxes imposed upon the Company. In the event an
adverse determination would result in the Seller having responsibility
for any amount of Taxes, the Seller shall be entitled to participate,
through the Buyer or the Company, in that portion of the proceedings
relating to the Taxes with respect to which it may incur liability.
Neither the Buyer nor the Company shall settle or agree to settle any
Tax liability or compromise any claim with respect to Taxes, which
settlement or compromise may affect the liability of the Seller for
Taxes, without the Seller's consent (which consent shall not be
unreasonably withheld or delayed). Any amended Tax return or claim for
Tax refund for any period shall be filed, or caused to be filed, only
by the Buyer, who shall not be obligated to make (or cause to be made)
such filing.
14.2.6 The Seller on the one hand, and the Buyer and the Company on the
other, shall cooperate with each other and with each other's agents in
connection with Tax matters related to the Company, including making
all relevant Tax information and documents in its possession available
to the other party and including in connection with any transfer
pricing enquiry.
14.3 Beneficiary of indemnification
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The obligation to indemnify shall remain in force in the case of any
winding up, absorption, contribution or disposal of all or any assets
of the Company.
SECTION IV - MISCELLANEOUS
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15. MISCELLANEOUS
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15.1 Substitution - Transfer and Survival of Warranties and Representations
The provisions of Sections II and III will remain in force even though
the Company or its assets concerned are assigned or transferred by a
Company or the Buyer after Completion, in particular if the Buyer or a
Company as part of the transfer gives to the transferee of a Company
(or of its assets) representations, warranties or undertakings.
15.2 Entire Agreement and Assignment
15.2.1 This Agreement represents the entire agreement between the Parties as
do the provisions of the recitals and the Schedules attached.
15.2.2 This Agreement supersedes and replaces all letters of intent,
agreements or other arrangements between the Parties entered into
prior to the date of this Agreement.
15.2.3 No Party may assign, or grant any Encumbrance or security interest
over, any of its rights under this Agreement.
15.3 Further Assurance
Each of the Parties will do, or procure the doing of, all acts and
things and execute, or procure the execution of, all documents as the
other party reasonably considers necessary to give full effect to the
terms of this Agreement.
15.4 Amendments
The parties agree that the Agreement shall be amended only in writing
such amendment to be signed by the parties or by their duly authorised
representatives. Neither Party will be deemed to have waived a right
unless expressly specified in accordance with this Agreement.
15.5 Confidentiality
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This Agreement is confidential between the Parties. Consequently, the
Parties agree to keep this Agreement confidential (except for the
specific disclosure permitted by Clause 8.4.2 (iii)) and more
generally not to disclose any information directly or indirectly in
relation to this Agreement, unless the disclosure is required by law
or by regulations or in order to preserve its rights. Without
prejudice to the generality of this clause, the provisions of the
Confidentiality Agreement shall remain in force notwithstanding the
execution of this Agreement.
15.6 Announcement
15.6.1 Any announcement or press release in respect of this Agreement or to
the content of this Agreement will not be issued without prior mutual
written consent between the Buyer and the Seller not to be
unreasonably withheld.
15.6.2 If the announcement or the press release is required by law or
applicable administrative procedure including, without limitation, any
regulation of any stock exchange upon which the shares of any party or
any of their respective affiliates are traded, the consent from the
other party is not required, it being understood that the existence of
said requirement shall be notified to the other party within a
reasonable time and the content of such announcement or press release
shall be discussed by reference to this Article.
15.7 Notices
15.7.1 All notices required in respect to this Agreement or to the related
operations shall be either delivered by hand personally with
acknowledgement of receipt or sent by registered mail or special mail;
the notice may be faxed on the condition that a confirmatory hard copy
is sent by registered mail with acknowledgement of receipt or by
special mail (at the latest one business day after the fax).
15.7.2 All notices shall be addressed to the parties at the following
addresses:
(a) To the Buyer : Brink's Limited
Arnold House
36/41 Holywell Lane
London
EC2A 3LB
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For the attention of : General Manager
Fax n :
With a copy to : Brink's, Incorporated
1801 Bayberry Court
P O Box 18100
Richmond, VA 23226-8100
U.S.A.
For the attention of : Chief Financial Officer
Fax n : 001 804 289 9761
and to : Brink's EMEA S.A.S.
15 rue La Fayette
75009 Paris
France
For the attention of : Vice President Finance
Fax n : 00 33 (0) 155 07 99 21
(b) To the Seller : Group 4 Securicor plc
The Manor
Manor Royal
Crawley
West Sussex RH10 9UN
UK
For the attention : Group General Counsel
Fax n 44 1293 554500
15.7.3 The Buyer and the Seller will be authorised to amend at any time their
relevant address, addressee or fax number above subject to informing
the other party in accordance with this Article.
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15.8 Costs and Expenses
15.8.1 Any registration fees and stamp duties payable on the execution of
this Agreement shall be borne by the Buyer.
15.8.2 Each Party shall bear the fees, costs and commissions of its own legal
advisers and agents.
15.9 Language
The Parties acknowledge that the negotiations have been conducted and
the drafts of the Agreement have been written in English.
15.10 Severability
Should any provisions of this Agreement be declared invalid, illegal
or unenforceable, such invalidity, illegality or unenforceability
shall not affect the validity, legality or enforceability of the
remaining provisions of this Agreement, which shall remain in full
force and effect.
This Agreement may only be amended by a written instrument executed by
all the Parties hereto. Therefore the tolerance also reiterated of any
defaults or delayed performance of this Agreement shall not be
interpreted as a tacit revocation of the provisions hereto.
15.11 Implementation and survival on Completion
15.11.1 The Parties agree to provide any information and documents required
for the performance of this Agreement and to sign this Agreement.
15.11.2 This Agreement (other than obligations that have already been fully
performed) remains in force after Completion.
15.12 Applicable law and settlement of disputes and Third Parties
15.12.1 This Agreement shall be governed and construed in accordance with the
law of England and Wales.
15.12.2 The Parties hereby submit to the non-exclusive jurisdiction of the
English Courts.
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15.12.3 Except as expressly provided in this Agreement, a person who is not a
party to this Agreement shall have no rights under the Contracts
(Rights of Third Parties) Act 1999 to rely upon or enforce any term of
this Agreement provided that this does not affect any right or remedy
of the third party which exists or is available apart from that Act.
15.13 Counterparts
This Agreement may be executed in any number of counterparts, each of
which is an original and which together have the same effect as if
each party had signed the same document.
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This Agreement has been made in London, executed and signed in as many original
copies as there are parties, at the date mentioned at the beginning of this
Agreement.
/s/ Soren Lundsberg Nielsen /s/ B. Dumoulin
----------------------------------- -------------------------------
Group 4 Securitas Holdings Limited Brink's Limited
By: S0ren Lundsberg-Nielsen By: Bernard Dumoulin
Capacity: Authorised under Power of Capacity: Authorised Signatory
Attorney
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