EXHIBIT 10(bb)
February 2, 2005
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SHARE TRANSFER AGREEMENT
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BETWEEN
GROUP 4 SECURICOR HOLDINGS LIMITED
SECURICOR INTERNATIONAL BV
AND
BRINK'S LUXEMBOURG S.A.
AND
BRINK'S, INCORPORATED
CONTENT
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1. DEFINITIONS AND INTERPRETATION............................................4
2. SALE AND PURCHASE OF SALE SHARES..........................................8
3. PURCHASE PRICE............................................................9
4. PRE-COMPLETION ACTIONS....................................................9
5. COMPLETION...............................................................11
6. CONDITIONS PRECEDENT AND OPTION NOT TO PURCHASE..........................12
7. WARRANTIES AND REPRESENTATIONS OF THE WARRANTORS.........................13
8. OTHER OBLIGATIONS OF THE WARRANTORS......................................28
9. REPRESENTATIONS AND WARRANTIES OF THE BUYER..............................33
10. INDEMNIFICATION..........................................................34
11. FLOOR THRESHOLD AND CEILING..............................................37
12. DURATION OF INDEMNIFICATION..............................................38
13. NOTIFICATION PROCEDURE AND PAYMENT OF THE INDEMNITY......................39
14. MISCELLANEOUS............................................................41
2
SHARE TRANSFER AGREEMENT
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This agreement is made on February 2, 2005
BETWEEN:
1. Group 4 Securicor Holdings Limited, with an authorised share capital of
(pound)50,000,000 - (divided into ordinary shares of 5 pence each all of which
such authorised shares have been issued) - registered in England and Wales under
number 05026978, having its registered office at The Manor, Manor Royal,
Crawley, West Sussex RH10 9UN, represented by S0ren Lundsberg Nielsen, duly
authorised for the purposes hereof by a resolution of the Board of Directors
dated 28 January 2005, a copy of which is set forth in Schedule1,
(hereinafter "G4S") and
2. Securicor International BV, with an authorised share capital of EUR
90,756.04.- (of which EUR 36,801.58.- has been issued), registered with the
Chamber of Commerce of Rotterdam, The Netherlands under the number 33292199,
having its registered office at Bovendijk 132, 3045 PC Rotterdam, represented by
Nigel Griffiths duly authorised for the purposes hereof by a resolution of the
Board of Directors dated 31 January 2005, a copy of which is set forth in
Schedule 2,
(hereinafter the "Seller")
ON THE FIRST HAND
AND:
3. Brink's Luxembourg S.A., a societe anonyme with a share capital of EUR
372,000, registered with the Companies and Commercial Registry of Luxembourg
under the number B 43.970, having its registered office at Zone Industrielle,
L-8287, represented by Mr. Bernard Dumoulin, duly authorised for the purposes
hereof by a resolution of the Board of Directors dated 31 January 2005 , a copy
of which is set forth in Schedule 3,
(hereinafter the "Buyer") and
4. Brink's, Incorporated, a company organised under the laws of the State of
Delaware with its principle office at 1801 Bayberry Court, Richmond, VA 23226,
USA and represented by Mrs. Mari Jo Flanagan, Vice President and Secretary, as
indicated in the officer's certificate delivered by Elizabeth C. Restivo,
Assistant Secretary, dated 24 January 2005, a copy of which is set forth in
Schedule 4,
(hereinafter "BI").
ON THE SECOND HAND
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WHEREAS:
(A) The share capital of the Company is divided into 23,000.- shares of EUR
24.79.- each, all of which are owned by the Seller.
(B) The Seller is a Subsidiary of G4S.
(C) The principal activity of the Company and its Subsidiary is the provision
of 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.
IT IS HEREBY AGREED AS FOLLOWS:
1. DEFINITIONS AND INTERPRETATION
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1.1 Definitions In this Agreement:
"Accounts" means the annual accounts (balance sheets, profit and loss accounts
and annexes) of each of the Companies as at 30 September 2004;
"Accounting Methods and Principles" means the generally accepted accounting
methods and principles in Luxembourg 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 Companies in the carrying out of their activities
including those assets specified in the Seller's commitments to the Europe
Commission;
"Authorisations" means all authorisations, licences, permits, certificates,
approvals or other documents delivered to the Companies, by an administrative
authority or any other authority or by a professional entity set-up in one of
the countries where the Companies carry on their activities or are owners of
assets at any given time;
"Business Day" means a day other than a Saturday or Sunday or public holiday in
Luxembourg;
"Buyer" has the meaning given to it above;
"Clauses" means the clauses of this Agreement;
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"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
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;
"Companies" means the Company and the Subsidiaries or any one of them according
to the context;
"Company" means Securicor Luxembourg S.A. registered in Luxembourg under Number
B10427;
"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 Companies as at Completion in the same format as the
current "monthly reporting pack" produced by the Companies in the ordinary
course of their 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/ies
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 6;
"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 Companies in the carrying out of their activities;
"Last Accounting Date" means 30 September 2004, the financial year end of the
Accounts;
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"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 Companies, their 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 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 Warrantors of any of their obligations under this Agreement, such as any
insolvency proceedings affecting the Warrantors; or a material difference of an
adverse nature in the assets or liabilities of the Companies as from the Date of
this Agreement to the date of Completion as found in the Management Accounts.
"Material Contracts" have the meaning given to them in Clause 7.16.2;
"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 G4S, the Seller, the Buyer and BI, and "Party"
means one or the other of the aforesaid;
"Premises" means the premises over which the Companies have possession by virtue
of real property leases with an option to purchase;
"Purchase Price" means the sum of EUR 27,500,000 (Twenty Seven Million Five
Hundred Thousand Euros);
"Real Property" means the buildings owned by the Companies;
"Rented Premises" means the premises over which the Companies have possession by
virtue of leases;
"Rented Vehicles" means the vehicles over which the Companies have possession by
virtue of leases with or without an option to purchase;
"Sale Shares" means 23,000.-. shares comprising the whole of the share capital
of the Company (a Sale Share being one of the Sale Shares);
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"Schedule" means each Schedule to this Agreement, and "Schedules" means all and
every Schedule;
"Seller" has the meaning given to it above;
"Shares" means the Sale Shares and the Subsidiaries' Securities;
"Subsidiaries" means the subsidiary company or companies, as the context
requires, directly or indirectly controlled by the Company and which are more
fully described in Schedule 7, the term "control" being construed in accordance
with article 309 (1) of the Company Law of 10th August, 1915 on commercial
companies as amended;
"Subsidiaries' Securities" means the securities comprising all or part,
accordingly, of the share capital of the Subsidiaries and which are held
directly or indirectly by the Company;
"Taxes" or "Impositions" means all direct or indirect taxes including, without
limitation, income, gross receipts, capital gains, net worth, capital duty,
franchise, property, value added, employment, and withholding taxes, stamp or
registration duties, fiscal, contributions, customs and excise duties, licence
fees and social security contributions, for which the Companies are liable under
all laws and regulations applicable to them, 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 Companies, as well as any
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 Group 4 Securitas Holdings Limited to
Brink's Limited of the whole of the issued share capital of Group 4 Falck Cash
Services UK Limited pursuant to an agreement of even date with this Agreement;
"Vehicles" means the vehicles owned by the Companies;
"Warrantors" means G4S and the Seller.
"Warrantors' Group Affiliate" means an entity directly or indirectly controlled
by the Warrantors or which directly or indirectly controls the Warrantors or
which is directly or indirectly controlled by one or several undertakings
controlled by the Warrantors, and "control" is to be construed in accordance
with article 309 (1) of the Law of 10th August, 1915 on commercial companies as
amended and "Warrantors' Group Affiliates" means all of such affiliates of the
Warrantors;
7
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.
2.2 At Completion the Seller owns and will transfer to the Buyer with full
title guarantee, the Sale Shares, 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 any dividend required in order to ensure
that the Companies are cash free in accordance with Clause 2.4), and
will benefit from subscription and allocation rights attached to the
Sale Shares from this same date. For the avoidance of doubt the Buyer
shall have no right to the dividend paid in 2004 in respect of the
financial year ended 30 September 2004.
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2.4 At Completion, the Companies 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.
3. 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 27,500,000 (Twenty Seven Million Five
Hundred Thousand Euros).
3.2 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
4. PRE-COMPLETION ACTIONS
----------------------
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
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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 f 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
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 p rovide
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.
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5. COMPLETION
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5.1 Date and location of Completion
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 the 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 offices of the Company, 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 the shareholders'
registers of the Company showing the transfer of the Sale Shares.
5.2.2 At Completion the Seller shall provide to the Buyer evidence of:
(a) discharge of any intergroup 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; and
(b) evidence of satisfaction of a debt owed to Dexia-BIL.
5.2.3 At Completion, the Buyer shall transfer the Purchase Price to the
Seller in accordance with Clause 3.2.
5.2.4 At Completion, the Buyer and the Seller grant a special power of
attorney to to an appropriate individual or firm whose name will be
notified to the Buyer to update the shareholders' register of the
Company and to register the Buyer as shareholder of the Company
according to Article 40 of the Company Law dated August 10, 1915 as
amended and to Article 1690 of the Civil Code.
5.3 The Seller will provide the Completion Statement to the Buyer within
two weeks of Completion.
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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 earliest 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 upon such termination the confidentiality provisions
contained in the Confidentiality Agreement shall continue in full
force and effect.
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 Warrantors, the Buyer
or BI (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.
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6.3 The Seller and the Buyer shall use all reasonable endeavours (so far
as lies within their respective powers) to procure that the Clearance
is obtained as soon as practicable and in any event:
(a) no later than 6.00pm (CET) on 30 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 any relevant
authority, keeping all parties informed of the progress of any
notification or filing and providing such assistance as may reasonably
be required.
SECTION II - WARRANTIES AND REPRESENTATIONS
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7. WARRANTIES AND REPRESENTATIONS OF THE WARRANTORS
------------------------------------------------
The Warrantors warrant and represent 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 Warrantors
7.1.1 The Warrantors have full capacity to enter into this Agreement, to
perform their obligations under this Agreement and to benefit from the
rights contained herein.
7.1.2 The Warrantors have not been and are not subject to any reorganisation
("gestion controlee"), bankruptcy ("faillite") or liquidation
procedure and there are no grounds for making the Warrantors subject
to such procedure.
7.1.3 There exists no consent, authorisation or judicial decision which is
necessary for the Warrantors 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 Warrantors in accordance with its
terms.
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7.2 Incorporation of the Companies
7.2.1 The Companies have been duly incorporated and their by-laws are
up-to-date, copies of which are attached in Schedule 9.
7.2.2 The corporate bodies of the Companies operate in accordance with the
laws and regulations which are applicable to them and all corporate
decisions have been made and published in accordance with applicable
regulations. All the registers, books and documents of each of the
Companies have been and are regularly maintained and truly and
correctly reflect the activities of each of the Companies and the
corporate decisions made by each of them to the extent that the
regulations and legislation in force require. The documents, notably
in relation to accounting matters, and written correspondence, have
been maintained by the Companies for a period of at least ten years
and are archived in such a way that they can be easily and quickly
retrieved, if need be.
7.3 Share capital
7.3.1 An up to date list of the shareholders of each of the Companies as at
the date of this Agreement is set out in Schedule 10.
7.3.2 The Sale Shares make up all of the share capital of the Companies.
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 shareholders or partners of the Companies.
7.4 Participation - Profit sharing agreements
7.4.1 The Company is the owner of the Subsidiaries.
7.4.2 Except for the Subsidiaries and interests set out in Schedule 11, the
Companies are not the owners of any direct or indirect interest of
whatever amount in a company or in an entity where the partner's
liability is indefinite and have never been partners or shareholders
of entities of this nature in respect of which they may still be
liable.
7.4.3 The Companies are not bound nor have they undertaken to be bound by
any contract or agreement seeking to share all or part of their
profits with any third party.
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7.5 Accounts
7.5.1 The Accounts of the Companies as at the Last Accounting Date, set out
in Schedule 12, have been prepared in accordance with the Accounting
Methods and Principles and are in accordance with those methods and
principles used by the Companies 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 Companies as at the Last Accounting Date
as well as the operating result for the financial period to which they
relate. The Accounts as of 30 September 2004 are certified by the
statutory auditors of the Companies notwithstanding the absence of a
specific statement of such certification.
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 material liabilities, whether or not contingent, of the
Companies are duly reflected in the Accounts and/or the Completion
Statement and are adequately provided for.
7.6.2 The Companies have not granted any security, charge, guarantee,
encumbrance r letter of comfort for the performance of contractual
undertakingseither by third parties or by the Companies or by the
Warrantors or one of the Warrantors' Group Affiliates.
7.6.3 The Warrantors and/or the Warrantors' Group Affiliates have not given
any security, charge, guarantee, pledge for the performance of any of
the undertakings of the Companies.
7.6.4 There exist no material off-balance sheet liabilities other than those
listed in Schedule 14.
7.7 Personnel and corporate officers of the Companies
7.7.1 The list of salaried employees and corporate officers of the
Companies set out in Schedule 15 contains true and complete details of
their age, seniority, category and classification as the case may be,
as well as their remuneration (including all bonuses and benefits in
kind).
15
All amounts due or accrued for all remuneration of any kind, including
but not limited to salary remuneration for over-time work or work
performed at night, on Sundays or legal holidays, relating to
employees and corporate officers, as well as former employees, of the
Companies have been calculated and paid in due time in conformity with
their respective contract of employment, collective agreements and
with any other applicable legal and tax rules. The Companies have no
debt or contingent liability whatsoever towards the employees.
Except for any increase rendered mandatory pursuant to any collective
agreement or an employment agreement, the Companies are under no
obligation to increase the current rates of remuneration or grant any
bonus or any advantage to any of its employees at any future date.
7.7.2 Schedule 16 defines for each of the Companies the applicable
collective agreements and details in respect of each 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) Participation agreements, profit sharing and saving-plan
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 16.
7.7.3 Set out in Schedule 17 for each of the Companies are true and
complete copies of:
(a) Standard work contracts of employees;
(b) Work contracts of salaried executives;
(c) Agreements signed with the salaried employees and corporate
officers of the Companies;
(d) All undertakings, other than those contained in the agreements
referred to in (c) above, given to salaried 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 Companies
to their employees comply with the legal and regulatory provisions and
the collective agreements (conventions collectives) applying to the
Companies 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 Companies have at all times completely and faithfully complied
with all applicable employment laws, including but not limited to the
statutory requirements relating to works councils (comite
d'entreprise), trade unions and employee representation in general.
7.7.5 The corporate officers or managers of the Companies do not benefit
from any employment contract, service contract with any one of the
Companies or from any particular benefit given by any of the
Companies. Similarly, no corporate agent has collected any
remuneration on behalf of any of the Companies.
7.7.6 Schedule 18 sets out the current litigation in relation to personnel
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 or the Subsidiaries concerned, as well
as the amount of the provision made in good faith for such proceedings
in the Accounts.
The Companies are not liable to make any payment to any of their
employees or any former employee for damages or compensation for loss
of office or employment or for redundancy or dismissal other than
those contained in Schedule 18.
There are no labour troubles (including without limitation, any
grievances or arbitration) or strikes, existing or - to the best of
the knowledge of Warrantors - threatened adversely affecting or
potentially affecting the financial situation or operations of the
Companies.
7.7.7 All employees are fully qualified and trained to exercise the
activities they have been employed for and hav obtained all the
authorisations, permit and licenses necessary to exercise such
activities. These authorisations, permits and licenses are in full
force and effect and the activities of the Companie are carried out in
accordance with such authorisations, permit and licenses.
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7.8 Real Property
7.8.1 The Companies have full and complete ownership of the Real Property
set out in Schedule 19. The Real Property is not subject to any
restriction on title such as restrictions on the transfer of ownership
or on the use or the destination of the Real Property, options to
sell, pre-emption rights, limitations of use, resolutions, proposals
or decisions for compulsory acquisition (expropriation), emphyteusis,
building rights (superficie), usage rights or other rights in rem. The
rights of ownership of the Companies over the Real Property are not
capable of being successfully challenged by any third party.
The Real Property is not subject to any encroachment (above or under
the surface) onto neighbouring properties or vice versa.
The Real Property is not subject to any easements or neighbourhood
agreements other than the one listed in Schedule 19 Agreement dated 29
January 2001 with Mr Roger Balthazar.
7.8.2 The Companies have not entered into any lease or right of occupation
over the Real Property and no interest of this nature has been given
or agreed to by the Companies.
7.8.3 The Real Property is not subject to any statutory or conventional
mortgage or charge. The Companies are not bound to register any new
mortgage.
7.8.4 The Real Property and its use by the Companies, are in accordance
with the applicable planning rules and regulations. The Real Property
is fully connected to road and media access, such as water, waste
water and electricity. All parking spaces required in accordance with
the applicable planning rules and regulations and/or building permits
are available.
7.8.5 All required operating permits (commodo-incommodo) for the
construction of the buildings on the Real Property and the use of the
Real Property have been obtained and are in force. The Real Property
complies in all substantial aspects with the commodo-incommodo permits
and regulations.
The Warrantors guarantee that in case the reception of the facilities
as imposed by the commodo-incommodo permits is not fully accomplished,
they will undertake at their cost the steps necessary to proceed with
a final and satisfactory reception. In particular, the Warrantors will
bear any costs associated with remedying works necessary to bring the
facilities in compliance or any costs associated with requesting
amendments to the existing commodo-incommodo permits.
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7.8.6 The Companies occupy the Premises of which a list is set out in
Schedule 20 by virtue of financial leases or by contracts containing
an option to purchase. The Companies will validly be able to exercise
at the appropriate date the options that they hold in accordance with
the terms of the financial leases or contracts containing a purchase
option and which relate to the Premises.
7.8.7 The Companies are tenants of the Rented Premises listed in Schedule 21
by virtue of the lease agreement attached in Schedule 22. Such lease
agreement is valid, legally binding and enforceable. Neither the
landlord, nor the Companies are in breach or default of any material
provision of this agreement. The Companies have not given, nor have
they received, any notice of ordinary or extraordinary termination;
all payments of rental and service charges have been made. No oral
amendments to this agreement have been concluded. The lease agreement
has been duly registered with the Administration de l'Enregistrement
et des Domaines and all registration duties have been paid.
7.8.8 The Real Property, the Premises and the Rented Premises constitute all
the real property necessary for the Companies to carry out their
activities whatever such activities may be and there is no other
lease, financial lease or other title of occupation in respect of the
fixed assets other than the Real Property, the Premises and the Rented
Premises.
7.9 Assets
The Companies have good title to all the Assets used in their activity
except those Assets which they use 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 Companies
have been repossessed by their owners and the Companies have committed
no breach which would allow the owner of the said assets to repossess
them.
7.10 Vehicles
The Companies have good title to all the Vehicles (listed in Schedule
23) used in their activity except the Rented Vehicles (listed in
Schedule 24) which they use and which are subject to lease or hire.
The Vehicles and the Rented Vehicles are free from any Encumbrance or
third party rights.
The Vehicles listed in Schedules 23 and 24 are in good state of
maintenance and repair, taking into consideration usual wear and tear
and have passed all technical controls required for their use.
19
None of the Vehicles which are either rented or leased by the
Companies have been repossessed by their owners and the Companies have
committed no breach which would allow the owner of the said Vehicles
to repossess them.
7.11 Intellectual property rights, know how, technical and confidential
information, trade secrets and computer hardware and software
7.11.1 The Companies are without restriction legitimate owners of the
Intellectual Property Rights that they use in carrying out their
activities and which are free of any encumbrances. A list of
Intellectual Property Rights indicating their registration in
Luxembourg, overseas and internationally and when such registration is
required by the applicable legislation, is set out in Schedule 25.
These registrations are valid and enforceable and, to the best of the
Seller's knowledge and belief, cannot be the subject of opposition.
7.11.2 The Companies do not use any Intellectual Property Right belonging to
third parties and have never been informed of any claim in this
respect.
7.11.3 The Companies have not given to any third party any licence or
other authorisation to use the Intellectual Property Rights and have
never been informed of any use by a third party of such rights.
7.11.4 The Companies benefit from licences in respect of the Intellectual
Property Rights set ou t in Schedule 26. These licences are valid,
have been validly granted to the Companies and the Companies have
complied with all their obligations in this respect. The Companies
undertake that these licences have also been validly registered with
the competent authorities in compliance with the relevant applicable
laws. The Companies have not granted any sub-licence.
7.11.5 The Companies are 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 Companies, and no rights to
disclosure or use of any material know how or material technical
information used by the Companies have been granted to or claimed by
any third party.
7.11.6 None of the processes, products of the Companies, know how or
technical or other information used by the Companies 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 Companies by any person in circumstances
which might entitle that person to make a claim against the Companies.
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7.11.7 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 Companies and no such claims
have been settled by the giving of any undertakings which remain in
force. The Companies have not received any actual or threatened claim
that any of the Intellectual Property Rights is invalid.
7.11.8 Confidential information, including know-how and trade secrets used by
the Companies are kept strictly confidential. The Companies have not
disclosed any of their 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 Sellers and the Companies are not aware of any such
confidentiality having been breached.
7.11.9 The computer software owned by the Companies or in respect of which
the Companies have been granted a license is sufficient and
appropriate to enable the Companies to exercise their present
activities.
7.11.10 The computer hardware has been satisfactorily maintained and
supported and has the benefit of an appropriate maintenance and
support agreement.
7.11.11 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
Companies.
7.11.12 The Companies have 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.
7.11.13 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 Companies'
business.
7.12 Insurance
7.12.1 The Companies have at all times maintained insurance coverage of a
type and level reasonably appropriate to the businesses carried out by
them in respect of, in particular but not limited to, their Real
Property, Assets and Vehicles, whether owned or rented, Rented
Premises, Premises, activities and operations.
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7.12.2 Schedule 27 lists the insurance policies entered into by the
Companies and which will be available after the Completion together
with the insurance policies entered into by the Companies and which
will not be available after Completion.
7.12.3 These policies cover all the normal conditions of the property and
extend to all risks which have to be or are normally insured against
in respect of the activities carried out by the Companies.
7.12.4 Schedule 28 sets out the incidents for the previous three (3)
accounting periods in respect of which the Companies have made claims
under the policies set out in Schedule 27 together with the amount of
payments made under such policies.
7.12.5 The Companies are up-to-date with the payment of their premiums in
respect of the policies mentioned in Schedule 27 and have complied
with all formalities and contractual clauses contained in such
policies; none of the Companies has been informed by the insurance
companies concerned of their intention to increase the premiums, or to
terminate the policies or not to renew them.
7.13 Environment
The Companies have complied with and are not in violation of the
Luxembourg regulations in respect of classified facilities, 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.
To the Sellers and the Companies' knowledge there are no hazardous
materials contained in the soil, groundwater, or buildings of the Real
Property 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.
7.14 Litigation
7.14.1 None of the Companies are 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.
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7.14.2 The Companies are 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.
7.14.3 The Companies are not currently party to any proceedings in any
judicial or arbitral jurisdiction or otherwise relating to an amount
in excess of ten thousand euro (EUR 10,000) and have not, as at the
date hereof, received any writ, summons, citation or notification,
informing either of them that such proceedings have or will be
instituted against it, nor to the best of the Companies' knowledge, is
any such proceeding threatened.
7.14.4 The Companies are not, and have 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.
7.15 Customers and suppliers
7.15.1 Schedule 29 contains a list of the twenty (20) main customers of the
Companies.
7.15.2 Schedule 30 contains a list of the twenty (20) main suppliers of the
Companies.
7.16 Contracts
7.16.1 Schedule 31 contains a list of the contracts entered into by the
Companies
(a) with their customers and involving an amount of one hundred
thousand euro (EUR 100,000) or more per annum;
(b) with their suppliers and involving an amount of fifty thousand
euro (EUR 50,000) or more per annum.
7.16.2 The Contracts referred to in Clause 7.16.1 (the "Material
Contracts") are sufficiently legally documented to enable the
Companies to exercise their rights hereunder. The Material Contracts
are in full force and effect and are not subject to any contentious or
non-contentious claim. The Companies have complied with their
contractual obligations and to the Seller's knowledge, there exists no
event 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 Companies or their officers,
directors or employees.
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7.16.3 Neither the execution of this Agreement nor the performance of the
Agreement contemplated herein will violate or conflict with the
constitutional documents of the Companies, 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 Companies are a party or to which any of their property
is bound.
7.16.4 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 direct or indirect control, as defined in
article 309 (1) of the Law of 10th August, 1915 on commercial
companies as amended, within the Companies.
7.17 Tax Regulations
7.17.1 The Companies have paid all Taxes owing under any Tax Regulations
(whether or not reflected on any tax return), and have 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 have 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
Companies 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).
7.17.2 The Companies have satisfied all filing requirements for tax returns
or other declarations required by the Tax Regulations in the form
required within the necessary time limit.
7.17.3 The Companies have always complied with all applicable Tax
Regulations whether Luxembourg or foreign.
7.17.4 The Companies are not subject to any current or proposed tax
examination in relation to Taxes and the Companies are not aware,
directly or indirectly, of any tax examination in respect of Taxes or
any enquiry instigated by an administrative authority leading, or
likely to lead to the payment of a Tax or a reassessment of any Tax
basis. The Companies have not received any notice of reassessment nor
have they otherwise been informed (in writing or orally) by any
administrative authority of its intention to carry out any
reassessment whatsoever. The Companies are not and do not expect to be
involved in any dispute relating to Tax.
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7.17.5 The Companies have not entered into any agreement, transaction,
arrangement, or scheme which might be reassessed, rejected or
re-qualified on the grounds that the Companies have attempted to
evade, circumvent or reduce its Tax obligations or that of another
person.
7.17.6 The Companies have 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.
7.17.7 The Companies incorporated under the laws of Luxembourg are and
have always been exclusively resident in Luxembourg for the purpose of
Taxes, and have no permanent establishments, as defined by Tax
Regulations, in any country outside of Luxembourg.
7.17.8 The Companies possess all documents evidencing their decisions in
respect of the application of the Tax Regulations and comply with
their obligations in respect of the time periods for maintaining the
documents as such time periods are defined by the commercial
regulations.
7.17.9 No liens for Taxes (other than for current Taxes not yet due and
payable) are imposed upon the Companies' assets.
7.17.10 There are no outstanding rulings of, or requests for rulings with,
any taxing authority addressed to the Companies that are, or if issued
would be, binding upon the Companies for any period following
Completion.
7.17.11 The Companies have 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.
7.17.12 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, including any item of
income or gain related to the Companies' change in its election to
file consolidated Tax returns.
7.17.13 The Companies have 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.
7.17.14 The amount of Tax chargeable on the Companies 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.
25
7.17.15 All applications for clearance or consent by the Companies or on
their behalf or affecting the Companies 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 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.
7.17.16 The Companies have 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.
7.17.17 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.
7.18 Bank accounts, delegations of power, etc.
7.18.1 Schedule 32 lists the bank accounts and safety deposits in the name of
the Companies 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.
7.18.2 Schedule 33 contains a list of all nominated signatories, delegations
of power, proxies and authorisations of whatever nature and form
granted by the Companies to any person for other purposes than the
operation of bank accounts.
7.19 Authorisations and other permits
The Companies have all the Authorisations necessary to exercise their
present activities and all Authorisations for valid ownership of their
assets. These Authorisations are in full force and effect and the
activities of the Companies are carried out in accordance with such
authorisations and permits. The Companies undertake that they have
made all required notifications to the competent authorities,
including, but not limited to, all notifications to the National
Commission for Data Protection, as required by the law.
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7.20 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 Companies and will have no
effect on the rights and obligations of the Companies 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 Companies are a party.
7.21 Material adverse change
Since the Last Accounting Date:
(a) Other than for purposes of Section 2.4, there has been no
distribution to shareholders, nor any depreciation, increase
or reduction in capital in the respect of the Companies;
(b) The Companies have been managed in a reasonable way ("en bon pere
de famille") and no undertaking or obligation has been entered
into which is outside the usual management of the Companies or
has been entered into in unusual circumstances;
(c) The activities of the Companies have been carried out in the
ordinary and normal course of business in such a way as to
ensure their continuity;
(d) The Companies have in no way amended the Accounting Methods and
Principles and have not revalued any assets, nor written-off any
debt in excess of seven thousand five hundred Euros
((euro)7,500).
7.22 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.
7.23 G4S warrants that it is the parent of substantially all of the
operating businesses of the Group 4 Securicor group of companies and
in the event that it ceases to be so prior to the expiry of the period
referred to in Clause 12.1 and Clause 12.2, it will procure that its
obligations hereunder shall be assumed by another member of such group
which is, at the relevant time, the parent of substantially all such
businesses.
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8. OTHER OBLIGATIONS OF THE WARRANTORS
-----------------------------------
8.1 Management of the Companies up to Completion
8.1.1 The Warrantors warrant and represent that from the Date of this
Agreement until Completion:
(a) No decision will be taken by the Companies which affects or could
affect in a material and adverse way the financial assets and
liabilities the situation or the profitability of the Companies;
(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
Companies;
(c) The Companies will be managed in a reasonable way ("en bon pere
de famille") and no undertaking or obligation will be entered
into outside the usual management of the companies subject to
unusual conditions;
(d) The activities of the Companies will be managed in the ordinary
and normal course of business and in such a way as to ensure
their continuity;
(e) The Companies will use their commercially reasonable efforts to
preserve their relationship with their customers, suppliers and
others having a business relationship with the Companies;
(f) The Companies 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:
(a) A single payment exceeding in total EUR 50,000- (Fifty thousand
Euros), with the exception of reimbursements previously made by
the Seller and of which the Buyer is aware and excluding payments
in respect of salaried employees, Taxes and rents;
28
(b) The granting of or application by the Companies for a loan,
credit or money facility;
(c) The granting of or application by the Companies 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
salaried employees of the Companies 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 management and indirect employees (such
term having the same meaning as in the Information Memorandum
relating to the Companies issued in August 2004) and of CIT
employees (whether direct or indirect), or the negotiation of any
agreement whatsoever in relation to collective agreements of
salaried employees of the Companies;
(f) Salary increases of salaried employees having a gross annual
remuneration in excess of EUR 30,000- (Thirty thousand Euros);
(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 EUR
50,000- (Fifty thousand Euros) or with a fixed duration exceeding
twelve (12) months;
(j) The termination by the Companies of all contracts in excess of a
sum of EUR 50,000- (Fifty thousand Euros) or with a fixed
duration exceeding twelve (12) months;
(k) All changes in the activity or in the by-laws of the Companies;
and
(l) Transfer of any assets of the Companies.
8.1.3 From the date of this Agreement until the Date of Completion, the
Warrantors will notify the Buyer (i) of any emergency or material
change in the normal conduct of the Companies and (ii) of the threat
or the initiation of any litigation against the Companies, and will
keep the Buyer fully informed of developments with respect to such
events and afford the Buyer's representatives full access to all
materials in its possession relating thereto.
29
8.2 Situation at Completion
8.2.1 The Warrantors warrant 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 Warrantors 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 Warrantors
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 Warrantors
undertake that neither the Warrantors nor the Warrantors' Group
Affiliates for whom they are 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, utilize or disclose to
any third party any commercial secret, know-how or confidential
information belonging to the Companies or their 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 Warrantors undertake that neither the
Warrantors nor the Warrantors' Group Affiliates for whom they are
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 Companies as at
Completion in the normal course of business from any person who was a
customer of the Companies 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 Companies.
30
8.3.3 From the Date of this Agreement and for a period of two years from the
date of Completion, the Warrantors undertake that neither the
Warrantors nor the Warrantors' Group Affiliates for whom they are
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 Companies whose names are listed below to leave their
present or future functions within the Companies or employ directly or
indirectly such employees. The employees in respect of whom these
provisions apply are:
G. Wagner
C. Weisen
A. Eschenbrenner
D. Douret
A. Kubiak
A. Kurt
V. Adam
P. Collignon
J. Resibois
M. Folignioni
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 Companies, 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;
31
(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:
(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 for use of name
The Companies shall be authorised, subject to their entering into a
trade mark licence in the form set out in Schedule 34, during a
maximum period of six months from the date of Completion, to continue
to use all patents, trademarks, service marks, trade names, logos,
32
company names, designs and models, know-how, copyrights and industrial
property rights which are currently registered in the name of the
Companies or used by the Companies, 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.
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" or any associated trademarks.
Neither the Warrantor nor any Warrantors' Group Affiliate shall be
authorised to use the name "Securicor" in the Grand Duchy of
Luxembourg (i) as a combined name for a period of 12 months from the
Date of Completion or (ii) as a stand alone name for a period of 2
years from the Date of Completion.
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 Luxembourg law, 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 35, 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 Warrantors contained in Clause 7 and, save for the warranty given
in Clause 9.3, on the effectiveness of the indemnification procedures
33
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 Warrantors from their
liability in accordance with Clause 10.
9.3 The Buyer and BI hereby warrant to the Seller that they have 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
not charged VAT on certain cash processing services; 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, nor has it relied upon anything other than the entirety of
this Agreement; including but not limited to, the representations or
warranties set out in this Agreement.
SECTION III - INDEMNIFICATION
-----------------------------
10. INDEMNIFICATION
---------------
10.1 Principle
10.1.1 The Warrantors undertake to jointly and severally indemnify the Buyer,
or any other person nominated by the Buyer, against:
(a) any Loss that the Companies 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 Companies or the Buyer suffer as a result of
any inaccuracy or omission in the representations and warranties
contained in Clause 7 or of the non-performance by the Warrantors
of any of their 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 Companies suffer in respect of Taxes (including
a Loss arising out of the fact that the Company has not charged
VAT on certain cash processing services) following any enquiry or
adjustment applying to a period prior to Completion which has not
been accounted or provided for in the Accounts.
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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.
10.2 Net loss
The Warrantors are 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
of 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 any of the Companies or to the Buyer, the amount of
indemnifiable Loss 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 Warrantors to 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.
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10.3 Limitations of Liability
10.3.1 The Warrantors shall not be liable to indemnify 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 matter 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
Accounting Date compelled by law;
(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 any of the
Companies 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 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 Warrantors shall be
reduced by the amount recovered PROVIDED THAT:
36
(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 Warrantors pay 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 recovers from some other person any sum in
respect of any matter giving rise to such claim the Buyer shall
procure that the Company shall forthwith repay to the Warrantors 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.
10.6 Each of the Buyer and BI undertakes to indemnify the Warrantors
against any Loss that the Warrantors 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 or BI of
any of their 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 Warrantors will only be liable to indemnify under Clause 9 or 10
if an individual indemnifiable Loss under this Agreement exceeds the
sum of EUR 10,000 (ten thousand euro).
11.2 Threshold
The Warrantors will only be liable to indemnify under Clause 9 or 10
if the cumulative total of indemnifiable Loss under this Agreement
exceeds the sum of EUR 100,000 (one hundred thousand euro).
11.3 Ceiling
The total indemnity for which the Warrantors may be liable under this
Agreement shall not exceed an amount which is equal to 35% of the
Purchase Price.
11.4 Exception
The floor, threshold and ceiling in this Clause 11 will not apply:
37
(a) in the case of fraudulent or intentional conduct of the
Warrantors 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 customers of the Company alleging a loss
or shortfall in the Customer Accounts.
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 five years
(save where the relevant limitation period applicable to Taxes is
increased beyond five years with retrospective effect, in which case
such increased period shall be applicable) plus three (3) months, from
the date of Completion.
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 for indemnification) are notified before the expiration of
such periods PROVIDED THAT the liability of the Warrantors for any
claim shall absolutely cease (unless the amount payable in respect of
a claim has been agreed by the Warrantors 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).
38
13. NOTIFICATION PROCEDURE AND PAYMENT OF THE INDEMNITY
---------------------------------------------------
13.1 Principle
13.1.1 Any event capable of giving rise to an obligation to indemnify in
accordance with this Agreement must be notified in writing by the
Buyer to either of the Warrantors forthwith upon the Buyer becoming
aware of the same, specifying the reasons for which the Buyer requests
indemnification from the Warrantors as well as the sum of the
indemnifiable Loss incurred, if determinable.
13.1.2 Except in the event that written objection is sent by the Warrantors
to the Buyer within two (2) months of the receipt by the Warrantors 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 Warrantors 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.
13.1.3 If on the contrary, the Warrantors notify an objection to the Buyer in
the time-limits set out above, the dispute shall be settled pursuant
to Clause 14.11.
13.2 Third party requests
13.2.1 In the event of any legal or administrative action filed by a third
party against either of the Companies as well as of a tax reassessment
issued against the Companies, which would give rise to a request by
the Buyer to the Seller, the Buyer or the Companies shall give written
notice to the Seller as soon as is reasonably practicable following
either of the Companies becoming aware of such action. It is expressly
understood that any delay by the Buyer or the Companies 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 liability shall be applicable only if the
Buyer's or the Companies' 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.
13.2.2 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 Companies against the third party
claim.
39
13.2.3 It is expressly agreed that the Buyer shall be authorised to commence
any urgent action to defending the Companies' 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.
13.2.4 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
Companies, the Companies will keep ultimate management of their
defence for their own benefit and that of interested parties as is set
out above.
13.2.5 Subject to the second sentence of this Clause 13.2.5, the Companies
shall control any audits, disputes, administrative, judicial or other
proceedings related to Taxes imposed upon the Companies. 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 Companies, in that portion of
the proceedings relating to the Taxes with respect to which it may
incur liability. Neither the Buyer nor the Companies 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.
13.2.6 The Seller on the one hand, and the Buyer and the Companies on the
other, shall cooperate with each other and with each other's agents in
connection with Tax matters related to the Companies, including making
all relevant Tax information and documents in its possession available
to the other party and including in connection with any transfer
pricing inquiry.
13.3 Beneficiary of indemnification
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 Companies.
40
SECTION IV - MISCELLANEOUS
--------------------------
14. MISCELLANEOUS
-------------
14.1 Substitution - Transfer and Survival of Warranties and Representations
The provisions of Sections II and III will remain in force even though
the Company/Companies or their 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.
14.2 Entire Agreement
14.2.1 This Agreement represents the entire agreement between the Parties as
do the provisions of the recitals and the Schedules attached.
14.2.2 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.
14.2.3 No party may assign, or grant any Encumbrance or security interest
over, any of its rights under this Agreement.
14.3 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 any
other party reasonably considers necessary to give full effect to the
terms of this Agreement.
14.4 Amendments
The Parties agree that this 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.
14.5 Confidentiality
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.
41
14.6 Announcement
14.6.1 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 Warrantors not to be
unreasonably withheld.
14.6.2 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.
14.7 Notices
14.7.1 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).
14.7.2 All notices shall be addressed to the parties at the following
addresses:
(a) To the Buyer : Brink's Luxembourg S.A.
Zone Industrielle
L-8287 Kehlen
Luxembourg
For the attention of : General Manager
Fax n : + (352) 30 54 39
With a copy to : Brink's, Incorporated
1801 Bayberry Court
P O Box 18100
Richmond, VA 23226-8100
U.S.A.
42
For the attention of : Chief Financial Officer
Fax n : + 804 289 9761
and : Brink's EMEA S.A.S.
15, Rue Lafayette
Paris, 75009
France
For the attention of : Vice President Finance
Fax n : +33 1 55 07 99 21
(b) To the Seller and/or G4S : Group 4 Securicor plc
The Manor
Manor Royal
Crawley
West Sussex RH10 9UN
UK
For the attention : Group General Counsel
Fax n : 00 44 1293 554500
14.7.3 The Buyer and the Warrantors 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.
14.8 Costs and Expenses
14.8.1 Any registration fees and stamp duties payable on the execution of
this Agreement shall be borne by the Buyer.
14.8.2 Each Party shall bear the fees, costs and commissions of its own legal
advisers and agents.
43
14.9 Language
The Parties acknowledge that the negotiations have been conducted and
the drafts of the Agreement have been written in English (except for
the Schedules, which shall be in English or French, respectively
followed by an English or French translation in case of originals
drafted in a different language).
14.10 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.
14.11 Implementation
14.11.1 The Parties agree to provide any information and documents required
for the performance of this Agreement and to sign this Agreement.
14.11.2 This Agreement (other than obligations that have already been fully
performed) remains in force after Completion.
14.12 Applicable law and settlement of disputes
14.12.1 This Agreement shall be governed and construed in accordance with
Luxembourg law.
14.12.2 Any disputes concerning the validity, interpretation or enforceability
of this Agreement which may arise from this Agreement may be finally
settled by arbitration in accordance with the Rules of Arbitration of
the International Chamber of Commerce applicable at the time of
arbitration except that termination as a result of failure to obtain
Clearance shall not be the subject of arbitration. The arbitral
tribunal shall be composed of three arbitrators appointed in
accordance with such rules. The arbitration shall take place in
Luxembourg. The arbitrators shall be fluent in English and French, and
documents may be submitted in English and French without any
translation. The above-mentioned arbitration provisions do not
preclude the Parties from exercising their right to request
provisional relief or protective measures before any competent court.
44
14.13 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.
45
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/ N. Griffiths /s/ B. Dumoulin
- ----------------------------------- -------------------------------
Securicor International BV Brink's Luxembourg S.A.
By: Nigel Griffiths By: Bernard Dumoulin
Capacity: Managing Director Capacity: Authorized signatory
/s/ Soren Lundsberg Nielsen /s/ Mari Jo Flanagan
- ----------------------------------- -------------------------------
Group 4 Securicor Holdings Limited Brink's Incorporated
By: S0ren Lundsberg Nielsen By: Mari Jo Flanagan
Capacity: Authorised under Power of Capacity: Authorized signatory
Attorney
46