Exhibit 4.1
Conformed copy
Dated 11 March 2001
Williams Security Limited
- and -
Baltimore Technologies plc
- and -
Chubb plc
Agreement
- relating to -
The sale and purchase of the entire issued share capital of
Chubb Information Security limited
Contents
Clause
Page No
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1. Interpretation 1
2. Sale and purchase of the Shares 4
3. Consideration 4
4. Completion 4
5. Pre-Completion matters 6
6. Intellectual Property 8
7. Retention 8
8. Warranties 9
9. Limitation on claims 9
10. Employees and Pensions 11
10A Licence to store and maintain SMC Rack 12
10B 15 Wheeler Gate, Nottingham 13
10D VAT 13
11. Confidentiality and announcements 15
12. Further assurance and availability of information 15
13. Interest 15
14. Continuing obligations and assignment 15
15. Costs 15
16. Notices 15
17. Severability 16
18. Entire agreement and variation 16
19. General provisions 16
20. Guarantee 17
21. Governing law and jurisdiction 17
Schedule I 19
The Company 19
Schedule II 20
The Properties 20
Schedule III 21
Employees 21
Schedule IV 22
Warranties 22
Schedule V 27
Form of deed of covenant 27
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Agreed form documents:
Form of resignation of directors/secretary 4.3(e)
Power of attorney in relation to the Shares 4.3(h)
Trade Mark Licence Agreement 4.3(i)
Secondment Agreement 4.3(k)
This Agreement is made the 11th day of March 2001
Between:
(1) Williams Security Limited, a company registered in England and Wales under
number 2985115 whose registered office is at Pentagon House, Sir Frank
Whittle Road, Derby DE21 4XA, United Kingdom, facsimile number: 01332
387066 (the "Seller");
(2) Baltimore Technologies plc a company registered in England and Wales under
number 2643615 whose registered office is at The Square, Basing View,
Basingstoke, Hampshire RG21 4EG, United Kingdom, facsimile number: 01256
812 901 (the "Purchaser"); and
(3) Chubb plc a company registered in England and Wales under number 4034666
whose registered office is at Pentagon House, Sir Frank Whittle Road, Derby
DE21 4XA, United Kingdom, facsimile number: 01332 387066 (the "Guarantor").
Recitals:
(A) Chubb Information Security Limited is a company registered in England and
Wales under number 3904130 whose registered office is at Pentagon House,
Sir Frank Whittle Road, Derby DE21 4XA, United Kingdom (the "Company"). At
the date hereof the Company has an authorised share capital of
(pound)10,000,000 divided into 10,000,000 ordinary shares of (pound)1 each,
of whicH 6,730,000 shares have been allotted and issued and are fully paid.
Further particulars of the Company are set out in Schedule I.
(B) The Seller is the beneficial owner of the Shares.
(C) The Seller has agreed to sell and the Purchaser has agreed to purchase the
Shares on and subject to the terms of this Agreement.
It is agreed:
1. Interpretation
1.1 In this Agreement (including its Recitals and Schedules), the following
words and expressions have the meanings respectively set opposite them.
"Accounts" means the management accounts of the Company as at and for the
period ended on the Balance Sheet Date, initialled for the purpose of
identification by or on behalf of the parties;
"Balance Sheet Date" means 23 February 2001;
"Business" means all of the business of the Company and all of the business
of the Seller or any member of the Seller's Group consisting of the
provision of the services set out in Schedule 1 of the Trade Mark Licence
Agreement;
"Business Day" means any day (except any Saturday or Sunday or a public
holiday) on which banks in the City of London are open for business;
"Business Plan" means the Chubb Information Security Limited Business Plan
set out at Volume 1, document 18 on the Data Room Index (as defined in
clause 8 of this Agreement);
"Chubb Marks" means any trade mark or name which includes the word "Chubb"
or the "C" logo;
"Company" has the meaning given in Recital (A);
"Completion" means completion of the sale and purchase of the Shares
pursuant to this Agreement in accordance with its terms;
"Completion Date" means 27 April 2001;
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"Demised Premises" means the premises described in clause 1(d) of the
Lease;
"Deed of Covenant" means a deed in the form set out in Schedule V;
"Disclosure Letter" means the letter of the same date as this Agreement
from the Seller to the Purchaser referred to in clause 8.2 and which
includes, for the avoidance of doubt, all the documents delivered to the
Purchaser with that letter;
"Employees" means the persons listed in Schedule III;
"Employment Statutes" means all legislation (whether of the United Kingdom,
any part thereof, Canada or elsewhere), including without limitation the
Treaty establishing the European Community and any directives made under
the authority of that Treaty, relating in any way to the employment of
employees or other workers (whether individually or collectively) or the
terms on which they are employed and including, for the avoidance of doubt,
any such legislation relating to health and safety;
"Environment" means air (including, without limitation, air within
buildings and natural or man made structures above or below ground), water
and land;
"Environmental Laws" means all applicable laws (including common law)
whether of the United Kingdom or any part thereof, relating to pollution or
protection of the Environment or human health and safety and in force and
binding upon the Company at the date of this Agreement, including laws
relating to emissions, seepages, spillages, discharges, escapes, releases
or threatened escapes or releases of pollutants, contaminants, chemicals or
toxic or hazardous substances, wastes, materials or noise into the
Environment or otherwise relating to the manufacture, processing,
distribution, use, keeping, treatment, disposal, deposit, storage,
transport or handling of the same;
"ICTA 1988" means the Income and Corporation Taxes Act 1988;
"Intellectual Property" means patents (including supplementary protection
certificates), trade marks, service marks, registered designs, utility
models, design rights, topography rights, copyrights, inventions, trade
secrets and other confidential information, know-how, business or trade
names and all other intellectual property and neighbouring rights and
rights of a similar or corresponding character in any part of the world
(whether or not the same are registered or capable of registration) and all
applications and rights to apply for or for the protection of any of the
foregoing;
"Inter-Company Debt" means inter-company debt owed by the Company to any
company in the Seller's Group;
"Lease" means the lease of the Demised Premises detailed in Schedule II
between Southern Water Services Limited and Security Monitoring Centres
Limited dated 24 December 1997 as amended by the Licence to Assign and Deed
of Variation between Southern Water Services Limited, Security Monitoring
Centres Limited and the Company dated 20 February 2001;
"Licence Period" shall mean the period from the date of this Agreement
until the expiry of the Lease (howsoever determined);
"Planning Acts" means the Town and Country Planning Act 1990, the Planning
(Listed Buildings and Conservation Areas) Act 1990, the Planning (Hazardous
Substances) Act 1990, the Planning (Consequential Provisions) Act 1990 and
the Planning and Compensation Act 1991;
"Property" means the Company's leasehold interest in the Demised Premises
in terms of the Lease, which interest is detailed in Schedule II;
"Purchaser's Solicitors" Lovells of 65 Holborn Viaduct, London EC1A 2DY;
"Recharged Expenditure" means an amount of up to (pound)1,850,000
(exclusive of VAT) represeNTING costs incurred by the Seller's Group in
connection with the Business which, the Purchaser acknowledges, may be
recharged to the Company prior to Completion
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(provided that any amounts charged by the New Invoices as defined in clause
10D.6 shall not be Recharged Expenditure);
"Recharged Inter-Company Debt" means an amount of up to (pound)1.85 million
(exclusive of VAT) WHICH is the inter-company debt owed by the Company to
companies within the Seller's Group as a result of the recharge to the
Company of the Recharged Expenditure provided that amounts due in respect
of VAT shall not be Recharged Inter-Company Debt (thus meaning that the
maximum amount of Recharged Inter-Company Debt is (pound)1.85 million);
"Retention" means (pound)300,000, to be retained from the consideration and
dealt with in accorDANCE with the provisions of clause 7;
"Retention Account" means the bank account referred to in clause 7.1;
"Seller's Group" means the Guarantor and its subsidiaries from time to
time;
"Seller's Pension Schemes" means the Chubb Security Pension Fund currently
constituted under a trust deed dated 15 May 1980 (as amended) and the Chubb
Pension Plan currently constituted under a trust deed dated 24 April 1996
(as amended);
"Seller's Solicitors" Slaughter and May of 35 Basinghall Street, London
EC2V 5DB;
"Shares" means the entire issued share capital of the Company, being
6,730,000 ordinary shares of (pound)1 each;
"SMC Rack" shall mean the Equipment Racks and Sainsburys Receiving
Equipment owned or used by the Seller's Group and all or any part of such
equipment and such other equipment as the parties acting reasonably may
agree;
"Stock Exchange" means London Stock Exchange plc;
"Trade Mark Licence Agreement" means the agreement in the agreed terms
between Chubb International Holdings Limited as licensor and the Company as
licensee; and
"Warranties" means the warranties set out in Schedule IV.
1.2 In this Agreement, unless the context otherwise requires:
(a) references to this Agreement or any other document include this
Agreement or such other document as varied, modified or supplemented
in any manner from time to time;
(b) references to any party shall, where relevant, be deemed to be
references to or to include, as appropriate, their respective
permitted successors, assigns or transferees;
(c) references to recitals, clauses and schedules and sub-divisions of
them are references to the recitals and clauses of, and schedules to,
this Agreement and sub-divisions of them respectively;
(d) references to any enactment include references to such enactment as
re-enacted, amended or extended on or before the date of this
Agreement and any subordinate legislation made from time to time under
it;
(e) references to a "person" include any individual, company, corporation,
firm, partnership, joint venture, association, organisation,
institution, trust or agency, whether or not having a separate legal
personality;
(f) references to the one gender include all genders, and references to
the singular include the plural and vice versa;
(g) any reference to indemnifying any person against any circumstance
includes indemnifying and holding that person harmless from all
actions, claims, demands
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and proceedings of any nature from time to time made against that
person and all losses, damages, payments, awards, costs or expenses
made, suffered or incurred by that person as a consequence of, or
which would not have arisen but for, that circumstance;
(h) headings are inserted for convenience only and shall be ignored in
construing this Agreement; and
(i) the words "company", "subsidiary", "subsidiary undertaking" and
"holding company" have the meanings given to them by the Companies Act
1985 as amended by the Companies Act 1989.
1.3 The Recitals and Schedules to this Agreement form part of it.
1.4 Any reference in this Agreement to a document being "in the agreed terms"
is to a document in the terms agreed between the parties and for
identification purposes only signed or initialled by them or on their
behalf on or before the date of this Agreement.
2. Sale and purchase of the Shares
2.1 On and subject to the terms of this Agreement, the Seller shall sell with
full title guarantee the Shares and the Purchaser shall purchase the Shares
on and with effect from Completion, in each case free from all charges,
liens, equities, encumbrances, claims or restrictions whatsoever and
together with all rights which are now, or at any time hereafter may
become, attached to them (including without limitation the right to receive
all dividends and distributions declared, made or paid on or after
Completion).
3. Consideration
The total consideration payable by the Purchaser to the Seller shall,
subject to adjustment in accordance with this Agreement, be the sum of
(pound)5,150,000 less an amount equal to the RechARGED Inter-Company Debt.
The total consideration payable by the Purchaser shall be satisfied by:
(a) the payment to the Seller, on Completion, of the sum of
(pound)4,850,000 less an amount equal to THE Recharged Inter-Company
Debt in cash in accordance with clause 4; and
(b) the payment of the Retention in accordance with clause 7.
4. Completion
4.1 Completion shall take place at the offices of the Purchaser's Solicitors on
the Completion Date or at such other place and/or on such earlier date as
may be agreed between the parties.
4.2 On or before Completion the Seller shall procure and the Purchaser shall
permit that:
(a) all loans and debts due to the Company from, and all loans and debts
due from the Company to, the Seller and every other company in the
Seller's Group (other than the Recharged Inter-Company Debt and any
amounts due in respect of VAT as referred to in clause 10D.6 and
10D.7) shall be repaid or paid in full;
(b) all loans due to the Company from, and all loans due from the Company
to, directors or employees of the Company shall be repaid in full;
(c) all salaries, directors' fees, expenses and bonuses (if any) of all
directors and employees of the Company, save for any amounts
specifically detailed in the Disclosure Letter, shall be paid up to
the Completion Date including any pro-rated amounts for the period up
to the Completion Date.
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4.3 On Completion the Seller shall cause to be delivered to the Purchaser:
(a) a duly executed transfer of the Shares by the registered holder
thereof in favour of the Purchaser (or as it may direct) together with
the share certificate relating to such shares;
(b) such other documents (including any power of attorney under which any
document required to be delivered under this clause has been executed
and any waivers or consents) as the Purchaser may require to enable
the Purchaser or its nominees to be registered as holder of the
Shares;
(c) the common seal, certificate of incorporation, certificates of
incorporation on change of name and statutory books of the Company;
(d) the Deed of Covenant duly executed by the Guarantor;
(e) written letters of resignation (with effect from the end of the
relevant board meeting referred to in clause 4.4) from all directors
and the secretary of the Company (except for Andrew Michael Burton),
resigning from their respective offices and employments with the
Company;
(f) an unqualified letter of resignation from the auditors of the Company
complying in all respects with the requirements of sections 392 and
394 Companies Act 1985, accompanied by a written confirmation that
such auditors have no claims for unpaid fees or expenses.
(g) the Lease;
(h) an irrevocable power of attorney in the agreed terms executed by the
holder of the Shares in favour of the Purchaser appointing the
Purchaser to be its or his lawful attorney in respect of the Shares
with effect from Completion;
(i) the Trade Mark Licence Agreement duly executed by the Company as
licensee and Chubb International Holdings Limited as licensor;
(j) duly executed employment agreements, in the agreed terms, between the
Employees and the Company;
(k) the duly executed secondment agreement in the agreed terms;
(l) certified minutes of the meetings of the board of directors of the
Seller, the Guarantor and Chubb International Holdings Limited
approving the transactions contained in this Agreement to which they
are party and the documents referred to herein and authorising the
execution thereof by the Seller, the Guarantor and Chubb International
Holdings Limited (as the case may be); and
(m) a VAT invoice for the Recharged Expenditure addressed to the Company.
4.4 On Completion the Seller shall cause a Board Meeting of the Company to be
duly convened and held (or a written resolution of the board to be passed)
at which:
(a) the said transfer of the Shares shall be approved for registration
(subject only to the transfer being duly stamped at the cost of the
Purchaser);
(b) Paul Sanders and Simon Enoch shall be appointed directors, and Simon
Enoch shall be appointed secretary, of the Company (within the maximum
number, if any, permitted under its Articles of Association);
(c) the Deed of Covenant, the Trade Mark Licence Agreement and the
secondment agreement referred to in clause 4.3(d), (i) and (k), shall
be approved by the Company;
(d) the registered office of the Company shall be changed to Building
1310, Arlington Business Park, Theale, Berkshire RG7 4SA, United
Kingdom; and
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(e) Messrs KPMG Audit plc shall be appointed auditors to the Company.
4.5 On Completion the Purchaser shall, following compliance by the Seller with
the foregoing provisions:
(a) in consideration for the Shares:
(i) pay the sum of (pound)4,850,000 less an amount equal to the
Recharged Inter-Company Debt intO THE account of Chubb Group
Limited at Barclays Bank PLC, Sort Code 20 25 85, account number
70923540;
(ii) pay into the Retention Account (in accordance with the provisions
of clause 7) the sum of (pound)300,000;
(b) procure the repayment by the Company of the Recharged Inter-Company
Debt to the relevant members of the Seller's Group; and
(c) deliver to the Seller's Solicitors the Deed of Covenant, the Trade
Mark Licence Agreement, secondment agreement and certified minutes of
the Purchaser approving the transactions contained in this Agreement
to which it is party and the documents referred to herein and
authorising the execution thereof by the Purchaser.
4.6 As soon as is practicable following Completion the Seller shall procure the
release of the Company from any guarantee or other obligation of any nature
undertaken by it securing or otherwise in respect of the obligations of the
Seller and pending such release shall indemnify each of the Purchaser and
the Company against any liability, loss, claim or expense whatsoever or
other obligation to the extent that such liability, loss, claim or expenses
arises or is suffered on or after the date hereof.
5. Pre-Completion matters
5.1 Subject to clause 5.3, pending Completion the Seller shall use its
reasonable endeavours to procure that, save with the prior written consent
of the Purchaser (such consent not to be unreasonably withheld or delayed):
(a) the Business will be carried on in the ordinary and usual course and
that the Company will comply, in all material respects, with all
applicable laws and will maintain all material licences, consents and
authorisations of any nature whatsoever (public or private) which are
necessary to carry on the business of the Company from time to time;
(b) the Purchaser will be kept informed of all material matters relating
to the business, assets and affairs of the Company;
(c) the Demised Premises are maintained in a state of repair and condition
as is consistent with the provisions of the Lease;
(d) if so requested by the Purchaser, the Company will enforce, or procure
to be enforced, to their full extent, the obligations of employees or
directors of the Company (whether under their employment contracts or
otherwise);
(e) the Company will keep proper accounting records and in them make true
and complete entries of all dealings and transactions in relation to
its businesses;
(f) the Purchaser and its representatives will be afforded reasonable
access to the Property, all employees, directors, officers and
advisers of the Company and all documents, books and records held or
maintained by the Company or held or maintained by the Seller or any
of its advisers relating thereto; and
(g) the Company will remain at its present location at Chubb House,
Staines Road West, Sunbury-upon-Thames, Middlesex TW16 7AR, United
Kingdom.
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5.2 Subject to clause 5.3, without prejudice to the provisions of clause 5.1,
pending Completion the Seller shall use its reasonable endeavours to
procure that none of the following matters will occur or be undertaken
without the prior written consent of the Purchaser (such consent not to be
unreasonably withheld or delayed):
(a) the modification of any of the rights attached to any shares in the
Company or the creation or issue of any shares or the grant or
agreement to grant any option over any shares or uncalled capital of
the Company or the issue of any obligations convertible into shares;
(b) the capitalisation or repayment of any amount standing to the credit
of any reserve of the Company or the redemption or purchase of any
shares or any other reorganisation of the share capital of the
Company;
(c) the admission of any person (howsoever occurring) as a member of the
Company by the transfer or approval of the transfer of the Shares;
(d) the sale or disposal of, or the grant or termination of any rights in
respect of, any material part of the undertaking or the assets of the
Company;
(e) the declaration, payment or other making by the Company of any
dividend or other distribution;
(f) the passing of any resolution by the members of the Company, including
any alteration to the Memorandum or Articles of Association of the
Company;
(g) the giving by the Company of any guarantee or indemnity under which
the Company's potential liability, whether as principal or surety,
exceeds (pound)50,000;
(h) the making of any capital commitment by the Company in excess
of (pound)100,000 or of capiTAL commitments of any amount which total
in aggregate (pound)100,000; (i) the acquisition by the Company of any
shares of any other company or the participation by the Company in any
partnership, consortium, association or joint venture;
(j) the borrowing of any money or acceptance of any financial facility by
the Company or the making or granting of any loan or any financial
facility in each case where the amount involved exceeds (pound)50,000;
(k) the creation or issue or allowing to come into being of any mortgage,
charge or other security interest upon or over any part of the
property of assets or uncalled capital of the Company or the creation
or issue of any debenture or debenture stock or the obtaining of any
advance or credit in any form, other than normal trade credit;
(l) the employment or dismissal or any material change in the remuneration
or terms of employment of any director or employee of the Company;
(m) the entry into, termination, material amendment or material variation
of any contract, transaction or arrangement by the Company to which it
is or would be a party including, without limitation, all material
arrangements for which material contracts in draft form, heads of
terms, or other pre-contractual documentation or correspondence
exists; or
(n) the commencement of any litigation by the Company.
5.3 Notwithstanding the provisions of clauses 5.1 and 5.2, the Purchaser
acknowledges and agrees that prior to Completion the Seller may procure
that the Recharged Expenditure is recharged to the Company, and such action
shall not constitute a breach of this Agreement or give rise to any claim
by the Purchaser under this Agreement whatsoever.
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6. Intellectual Property
6.1 In the event that the Seller discovers that the Company owns any
Intellectual Property which has, in the eighteen months prior to
Completion, been used exclusively by a member of the Seller's Group other
than in connection with the Business or any trade mark application or
registration for any of the Chubb Marks, the Purchaser agrees to procure
that such Intellectual Property or such application or registration is
transferred to the Seller or a company nominated by the Seller for nominal
consideration.
6.2 In the event that the Purchaser discovers that the Seller or a member of
the Seller's Group owns any Intellectual Property (except for the Chubb
Marks) which has, in the eighteen months prior to Completion, been used in
the Business exclusively by the Company the Seller agrees to procure that
such Intellectual Property is transferred to the Company for nominal
consideration.
6.3 The Purchaser shall, with effect from Completion, procure the grant to the
Seller of a non-exclusive, perpetual, worldwide, assignable, irrevocable,
royalty-free licence (with the right to sub-licence) to use any
Intellectual Property owned by the Company which has been used (but not
exclusively) in the twelve months prior to Completion by a member of the
Seller's Group.
6.4 The Seller shall, with effect from Completion, procure the grant to the
Company of a non-exclusive, perpetual, worldwide, assignable, irrevocable,
royalty-free licence (with the right to sub-licence) to use any
Intellectual Property (except for the Chubb Marks) owned by a member of the
Seller's Group which has been used (but not exclusively) in the twelve
months prior to Completion in the Business.
7. Retention
7.1 The Retention shall be paid into a designated interest-bearing account with
National Westminster Bank PLC, in the joint names of the Seller's
Solicitors and the Purchaser's Solicitors (the "Retention Account") on
Completion and the Retention (together with interest accrued thereon) shall
be applied in accordance with the provisions of this clause. The
instructions given to National Westminster Bank PLC on the setting up of
the Retention Account shall include an instruction that no sums may be
released from the Retention Account at any time without the authority of
the Purchaser's Solicitors and the Seller's Solicitors.
7.2 If the Purchaser has not notified the Seller of any claim under this
Agreement, together with an estimate of the maximum aggregate amount of
such claim, on or before 30 September 2001, the parties shall procure that
the Retention (together with accrued interest thereon) shall be released in
full to the Seller on the Business Day next following that date.
7.3 If the Purchaser has notified the Seller of a claim or claims under this
Agreement, together with an estimate of the maximum aggregate amount of
such claim, on or before 30 September 2001, the parties shall procure that
the amount by which the Retention exceeds the estimated maximum aggregate
amount of such claim(s) shall be paid out of the Retention to the Seller on
the first Business Day after 30 September 2001.
7.4 If any such claim(s) are not admitted by the Seller, the Retention (or the
balance remaining after any interim distribution made under clause 7.3 and
all interest accrued thereon shall be held in the Retention Account until
such claim(s) are finally settled or otherwise determined.
7.5 Upon the final settlement or determination of such claim(s), the parties
shall procure that the Retention (or the balance thereof) and all interest
accrued thereon shall be forthwith applied in or towards the discharge of
the amount(s) agreed or determined to be payable to the Purchaser in
respect of such claim(s) and the residue (if any) including any interest
remaining after the discharge of such claim(s) shall be released to the
Seller.
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7.6 The Seller and the Purchaser shall promptly give to the Seller's Solicitors
and the Purchaser's Solicitors respectively all such written instructions
as shall be necessary to give effect to the provisions of this clause.
7.7 All costs in connection with the Retention Account shall be borne by the
Purchaser.
8. Warranties
8.1 The Seller hereby warrants to the Purchaser as at the date hereof in the
terms of the Warranties.
8.2 The Warranties are given subject to any fact, matter or circumstance
disclosed in the Disclosure Letter or in the documents, whether in
electronic form or otherwise, in the data room (which documents are
comprised in a bundle initialled for the purpose of identification on
behalf of the Purchaser and the Seller and listed in the Data Room Index
which forms Schedule Two to the Disclosure Letter (the "Data Room Index"))
or in the additional documents included as Schedule Three to the Disclosure
Letter.
8.3 Each of the Warranties set out in each paragraph and each paragraph of
Schedule IV shall be separate and independent and shall not (unless stated
otherwise) be limited by reference to any other paragraph or anything in
this Agreement or the Schedules.
8.4 Where any statement set out in Schedule IV is expressed to be given or made
to the best of the Seller's knowledge or is qualified by reference to the
Seller's awareness or is qualified in some other manner having
substantially the same effect, such statement shall mean the actual
knowledge of Roy Brown (Divisional Finance Director of the Parent), having
made reasonable enquiries of Andrew Burton (Chief Executive Officer of the
Company) and Ian Stephens (Finance Director of the Company)).
8.5 The Seller agrees with the Purchaser for itself and as trustee for the
Company and their respective officers and employees that (except in the
case of fraud) it will not exercise any of its rights, remedies or claims
which it has or may have in respect of any misrepresentation in or
omissions from any information or advice supplied or given by the Company
or its officers, employees or agents and on which the Seller has relied in
giving the Warranties, preparing the Disclosure Letter and/or entering into
this Agreement and/or the documents referred to herein.
9. Limitation on claims
9.1 (a) Notwithstanding anything in this Agreement to the contrary, the
provisions of this clause 9 shall operate to limit the liability of
the Seller in respect of any claim by the Purchaser for any breach of
or inaccuracy in the Warranties.
(b) The Seller shall have no liability in respect of any breach of any of
the Warranties unless the Purchaser has served on the Seller a written
notice on or before 30 September 2001 giving full details of the claim
including the Purchaser's best estimate of the amount of the Seller's
liability in respect thereof.
(c) The liability of the Seller in respect of any claim by the Purchaser
for any breach of, or inaccuracy in, the Warranties shall absolutely
determine (if such claim has not been previously satisfied, settled or
withdrawn) if legal proceedings in respect of such claim shall not
have been commenced within six months of the service of such notice
and for this purpose proceedings shall not be deemed to have been
commenced unless they shall have been properly issued and validly
served upon the Seller.
9.2 No claim shall be made in respect of any breach of any of the Warranties or
indemnities in this Agreement (each a "Warranty Claim"):
(a) where the liability for any individual claim (or what would be such
liability apart from this paragraph) is less than (pound)25,000; and
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(b) unless the aggregate amount of all such claims in excess of
(pound)25,000 exceeds (pound)100,000 PROVIDED that if such aggregate
amount does exceed (pound)100,000, the Seller's liability shaLL BE
limited to the amount by which such aggregate amount exceeds
(pound)100,000.
9.3 The total aggregate amount of the Seller's liability in respect of any
Warranty Claim or Claims, or otherwise under or in connection with this
Agreement shall be (in the absence of fraud) limited to and shall in no
event exceed (pound)300,000.
9.4 If, in respect of any matter which would give rise to a Warranty Claim the
Purchaser or a member of the Purchaser's group (including the Company) (the
"Beneficiary") is entitled to claim under any existing policy of insurance
in respect of which the Company is the insured person then no such matter
shall be the subject of a Warranty Claim unless and until the Beneficiary
shall have made a claim against the relevant insurer and any amount
recovered under such insurance policy (or which could have been recovered
had such policies been maintained) shall then reduce by the amount
recovered or extinguish any such Warranty Claim.
9.5 Where the Purchaser or the Beneficiary is at any time entitled to recover
from some other person any sum in respect of any matter giving rise to a
claim under the Warranties or under or in connection with this Agreement,
the Beneficiary shall undertake all reasonable steps to enforce such
recovery prior to taking action against the Seller (other than to notify
the Seller of the claim against the Seller) and, in the event that the
Beneficiary shall recover any amount from such other person, the amount of
the claim against the Seller shall be reduced by the amount recovered.
9.6 If the Seller pays at any time to a Beneficiary an amount pursuant to a
claim in respect of the Warranties or under or in connection with this
Agreement and the Beneficiary subsequently becomes entitled to recover from
some other person any sum in respect of any matter giving rise to such
claim, the Beneficiary shall take all reasonable steps to enforce such
recovery, and shall forthwith, following such recovery, repay to the Seller
so much of the amount paid by the Seller to the Beneficiary as does not
exceed the sum actually recovered from such other person.
9.7 If any amount is repaid to the Seller by a Beneficiary pursuant to clause
9.6 above, an amount equal to the amount so repaid shall be deemed never to
have been paid by the Seller to the Purchaser for the purposes of
calculating the Seller's total aggregate liability under this clause 9.
9.8 (a) The Purchaser shall or shall procure that, upon a Beneficiary becoming
aware of any claim, action or demand against it or matter likely to
give rise to any of these in respect of the Warranties or under or in
connection with this Agreement, the Beneficiary shall:
(i) as soon as reasonably practicable, notify the Seller by written
notice as soon as it appears to the Purchaser that the Seller is
or may become liable under the Warranties or under or in
connection with this Agreement for any assessment or claim of a
third party received by or coming to the notice of the Purchaser;
(ii) subject to the Seller indemnifying the Beneficiary to its
reasonable satisfaction against any liability, costs, damages or
expenses which may be incurred thereby, take such reasonable
action and give such information and access to personnel,
premises, chattels, documents and records to the Seller and their
professional advisers as the Seller may reasonably request;
(iii) at the request of the Seller, allow the Seller to take the sole
conduct of such actions as the Seller may reasonably deem
appropriate in connection with any such assessment or claim in
the name of the Beneficiary and in that connection the Purchaser
shall give or cause to be given to the Seller all such assistance
as the Seller may reasonably require in avoiding, disputing,
resisting, settling, compromising, defending or appealing any
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such claim and shall, at the Seller's expense, instruct such
solicitors or other professional advisers as the Seller may
nominate to act on behalf of the Beneficiary, as appropriate, but
to act in accordance with the Seller's sole instructions;
(iv) make no admission of liability, agreement, settlement or
compromise with any third party in relation to any such claim or
adjudication without the prior written consent of the Seller; and
(v) take all reasonable action to mitigate any loss suffered by the
Beneficiary in respect of which a claim could be made under the
Warranties.
(b) In any event, the Seller shall be entitled at any stage and at its
sole discretion to settle any such third party assessment or claim and
shall notify the Purchaser of its decision so to settle such
assessment or claim.
9.9 (a) The only Warranties given in respect of Intellectual Property or
hardware or agreements relating thereto are those contained in
paragraph I of Schedule IV and none of the other Warranties shall be
deemed to be given in relation to Intellectual Property or hardware or
agreements relating thereto.
(b) The only Warranties given in respect of employment matters or
agreements relating thereto are those contained in paragraph L of
Schedule IV and none of the other Warranties shall be deemed to be
given in relation to employment matters or agreements relating
thereto.
(c) The only Warranties given in respect of pensions arrangements or
agreements relating thereto are those contained in paragraph M of
Schedule IV and none of the other Warranties shall be deemed to be
given in relation to pensions arrangements or agreements relating
thereto.
(d) The only Warranties given in respect of property related matters or
agreements relating thereto are those contained in paragraph F of
Schedule IV and none of the other Warranties shall be deemed to be
given in relation to property related matters or agreements relating
thereto.
(e) The only Warranties given in respect of environmental matters are
those contained in paragraph G of Schedule IV and none of the other
Warranties shall be deemed to be given in relation to environmental
matters.
10. Employees and Pensions
10.1 Any historic liability in respect of the Employees' employment by the
Seller or a member of the Seller's Group prior to the Completion Date and
any liability in respect of the Employees arising as a result of or
incurred by the Company by virtue of any previous business transfer
(including without limitation any claim arising out of or in connection
with any change in the terms of the Employees' employment following any
previous business transfer (other than in relation to the terms of
employment offered by the Company) or any failure to inform or consult the
Employees or any other person or their respective representatives in
respect of any previous business transfer) shall be the liability of the
Seller.
10.2 The Seller agrees to indemnify and keep indemnified the Company and the
Purchaser against all losses, costs, liabilities, expenses, actions,
proceedings, claims and demands arising out of or in connection with:
(a) the liability referred to at 10.1;
(b) any claim by any person other than an Employee relating to that
person's employment with the Seller or the relevant member of the
Seller's Group or the Company or the termination thereof, to the
extent that the same relates to a period prior to the Completion Date.
- 12 -
10.3 If as a result of any previous business transfer, any contract of
employment of a person other than an Employee is alleged or found to have
effect as if originally made between such person and the Company, the
Company shall inform the Seller in writing and may within 28 days after so
informing the Seller terminate that contract forthwith and the Seller shall
indemnify the Company and the Purchaser against all losses, costs,
liabilities (including without limitation any redundancy payments, damages
or compensation to the extent that the same are reasonably incurred),
expenses, actions, proceedings, claims and demands arising out of or in
connection with such termination and against any sums paid to or in
relation to such person in respect of his or her employment by the Company
from the date of the relevant transfer to the date of such termination.
10.4 The Purchaser shall procure that within one month following the Completion
Date each of the Employees who is immediately before the Completion Date an
active member of one of the Seller's Pension Schemes is offered membership
of a pension scheme nominated by the Purchaser which is an approved
personal pension scheme (the "Purchaser's Scheme") and which is capable of
receiving all the accrued benefits of the Employees under the Seller's
Pension Schemes (including any contracted-out rights) to which the Seller's
Pension Scheme can make transfer payments without prejudicing the approval
of the Seller's Pension Schemes.
10.5 The Seller shall within two months following the Completion Date use all
reasonable endeavours to procure that each of the Employees who is a member
of one of the Seller's Pension Schemes is invited to consent (in a form
agreed with the Seller) within eight weeks following the invitation to a
transfer of assets being made for such Employee from the relevant Seller's
Pension Scheme to the Purchaser's Scheme. Such invitations to consent to
transfer shall include reference to the fact that neither the Seller nor
the Purchaser is authorised to give investment advice in connection with
the transfer and that the responsibility for obtaining any such advice
rests with the Employee concerned.
10.6 Subject to clauses 10.4 and 10.5 being duly performed, the Seller will use
reasonable endeavours to ensure that the trustees of the relevant Seller's
Pension Scheme transfer to the Purchaser's Pension Scheme an amount in
respect of each Employee who consents to such transfer equal to the greater
of the value of that Employee's accrued benefits based on a past service
reserve method of calculation made in accordance with the April 2000
valuation assumptions applicable to the Chubb Pension Plan (for Chubb
Pension Plan members) and the April 1998 valuation assumptions applicable
to the Chubb Security Fund (for Chubb Security Fund members), calculated by
an actuary appointed by the Seller as at the Completion Date or the
unreduced cash equivalent determined in accordance with the Pension Schemes
Act 1993 and regulations thereunder.
10.7 The Seller shall use all reasonable endeavours to ensure that prior to the
Completion Date all of the Employees accept offers of employment with the
Company, such offers to take effect no later than the Completion Date, on
the terms contained in the standard employment contract in the agreed
terms.
10A Licence to store and maintain SMC Rack
10A.1 During the Licence Period, the Purchaser shall allow the Seller and any
member of the Seller's Group to store within the Demised Premises the SMC
Rack and the provisions of this clause 10A shall apply throughout the
Licence Period.
10A.2 The Purchaser shall provide and shall pay for all electricity and other
power supplies as may be required by the Seller and any member of the
Seller's Group for the Seller's or any member of the Seller's Group's use,
maintenance, removal, installation, replacement or renewal of the SMC Rack.
10A.3 The Purchaser shall not without the prior consent of the Seller or any
member of the Seller's Group use, operate, relocate, remove, or in any way
tamper with the SMC Rack.
10A.4 The Purchaser shall afford to the Seller and any member of the Seller's
Group such rights of access to the Demised Premises and to the SMC Rack
within the Demised Premises
- 13 -
as may be required by the Seller or any member of the Seller's Group for
the purposes of repairing, maintaining, removing, installing, replacing and
renewing the SMC Rack, subject to the following provisions:
(1) Save in the case of emergency, such access by the Seller or any member
of the Seller's Group to the Demised Premises and to the SMC Rack (1)
must be notified to the Purchaser at least 24 hours before the
intended access takes place and (2) must take place on a Monday,
Tuesday, Wednesday, Thursday or Friday of any week.
(2) The Seller or any member of the Seller's Group shall exercise the
aforementioned right of access in such a manner as to cause the least
practicable inconvenience to the Purchaser.
(3) The Seller or any member of the Seller's Group shall make good any
damage caused to the Demised Premises by virtue of the taking of the
aforementioned right of access.
10A.5 The Purchaser shall procure that its successors and assignees vest in the
tenant's interest in the Lease shall be bound by the obligations and
restrictions imposed upon the Purchaser in terms of this clause 10A and
shall if the Seller or any member of the Seller's Group so requires,
procure that its successors or assignees, as the case may be, enter into
written undertakings to that effect direct with the Seller or any member of
the Seller's Group.
10A.6 (a) If the lessor of the Lease validly requires, under a term of the
Lease, the Company to remove the SMC Rack or cease to afford the
access referred to in this clause 10A, the Company shall be entitled
so to do on giving reasonable notice to the Seller.
(b) The Purchaser agrees not to take any action or omit to do anything
which may precipitate any request by the lessor contemplated by clause
10A.6(a), to notify the Seller immediately upon it or the Company
becoming aware of any such request, and to take all such action and
procure that the Company shall take all such action as the Seller may
request to, at the Seller's expense, dispute and contest any such
request.
10B 15 Wheeler Gate, Nottingham
10B.1 In respect of the Company's prior occupation of property at 15 Wheeler
Gate, Nottingham NG1 2NA which is disclosed in Schedule Three of the
Disclosure Letter, the Company is entitled to a refund of a deposit which
is disclosed in Schedule Three, Supplemental Disclosure Documents, item 5
(the "Refund").
10B.2 The Seller shall be entitled to the Refund or such part of the Refund as
may be provided by MWB Business Exchange Limited. For the avoidance of
doubt, regardless of the date on which the Refund is provided by MWB
Business Exchange Limited, the Purchaser shall not be entitled to the
Refund and shall pay or procure to be paid to the Seller forthwith such
part of the Refund which may be received by the Purchaser or the Company.
10D VAT
10D.1 The parties acknowledge that the Company will before Completion make an
application to be VAT registered (as a separately registered entity) under
the Value Added Tax Act 1994.
10D.2 The parties agree that the Seller and/or the Guarantor and/or the advisers
of the same (together with the Company) shall be responsible for the
preparation and submission of the application referred to in 10D.1 above.
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10D.3 The Purchaser hereby consents to the making of the application referred to
in clause 10D.1 above and agrees to co-operate in the making of such
application.
10D.4 The parties agree to procure that the Company makes all claims which it is
able to make in accordance with Regulation 111 of the VAT Regulations 1995
(the "Regulations") in respect of supplies made to the Company before the
date the Company was registered or required to be registered under the
Value Added Tax Act 1994 ("VATA") or otherwise.
10D.5 The Purchaser agrees to procure that the Company shall not join any group
for VAT purposes in accordance with section 43 VATA and that no application
shall be made for the same until after the date on which the Company has
made its first return (as referred to in Regulation 111(3) of the
Regulations) as a separately registered entity under the VATA.
10D.6 The parties agree that:
(i) new invoices (the "New Invoices") for supplies made to the
Company by members of the Seller's Group before the date of this
Agreement may be issued to the Company by the relevant members of
the Seller's Group before Completion up to an amount exclusive of
VAT of (pound)6.7 million; and
(ii) the New Invoices will state the VAT charged on relevant supplies
and the Company shall pay an amount in respect of such VAT to the
relevant members of the Seller's Group if and to the extent the
Company recovers by way of credit or repayment the VAT on such
supplies as input tax.
10D.7 The parties agree that:
(i) invoices (the "Future Invoices") for taxable supplies made to the
Company by members of the Seller's Group after the date of this
Agreement and before Completion may be issued to the Company
before Completion by the relevant member of the Seller's Group;
and
(iii) the Future Invoices (including the VAT invoice to be issued in
respect of the Recharged Expenditure) will state the VAT charged
on the relevant supplies and the Company shall pay an amount in
respect of such VAT to the relevant members of the Seller's Group
if and to the extent the Company recovers by way of credit or
repayment the VAT on such supplies as input tax.
10D.8 Payments in respect of VAT due under clauses 10D.6 and 10D.7 above shall
be made by the Company on the third Business Day after the date of recovery
by the Company as referred to in the relevant clauses and if the Company
does not make such payment on such day, the amounts due shall carry
interest from such date until the date of payment at the rate of three per
cent above the base rate from time to time of Barclays Bank PLC.
10D.9 The Purchaser agrees that the Seller (together with its advisers) shall
prepare all claims as are referred to in 10D.4 above and any correspondence
associated therewith and agrees to procure that the Company shall submit
the same or permit the same to be submitted on its behalf without
alteration.
10D.10 The Purchaser agrees that the Seller (together with its advisers) shall
have the conduct (at the Seller's expense) of any dispute with HM Customs &
Excise in respect of whether the Company is entitled to be registered under
the VATA and/or in respect of the time from which it is so entitled and/or
in respect of the validity of any claims made pursuant to Regulation 111 of
the Regulations as referred to above (such conduct including decisions as
to whether to make any relevant appeals and the conduct of any such
appeals).
- 15 -
11. Confidentiality and announcements
11.1 In consideration of the Purchaser agreeing to buy the Shares on the terms
of this Agreement, the Seller agrees with the Purchaser that (save as may
be required by law, and then only to the extent so required) it will use
all reasonable endeavours to keep confidential (other than in accordance
with clause 11.2) any confidential information in relation to the affairs
or business of the Company.
11.2 Save for the publication of the announcements in the agreed terms, no
announcement or statement about this Agreement or the subject matter of, or
any matter referred to in, this Agreement shall be made or issued before,
on or after Completion by or on behalf of either of the parties without the
prior written approval of the other party (such approval not to be
unreasonably withheld or delayed) PROVIDED that nothing shall restrict the
making by either Party (even in the absence of the other party's agreement)
of any statement which may be required by law or called for by the
requirements of the Stock Exchange, but then only to the extent so
required.
12. Further assurance and availability of information
12.1 The parties shall execute and deliver all such instruments and other
documents and take all such actions as each may from time to time
reasonably require in order to give full effect to the provisions of this
Agreement.
12.2 The Seller shall cause to be made available to the Purchaser all
information in its possession or under its control which the Purchaser may
from time to time reasonably require (after Completion) relating to the
business and affairs of the Company and shall permit the Purchaser and its
representatives on reasonable advance notice to have access to documents
containing such information and to take copies thereof.
13. Interest
If any amount required to be paid under this Agreement is not paid when it
is due, such amount shall bear interest at the rate of three per cent per
annum over the base lending rate of National Westminster Bank PLC from time
to time, calculated on a daily basis for the period from the relevant due
date for payment up to and including the date of actual payment, as well
after as before any judgment.
14. Continuing obligations and assignment
14.1 Each of the obligations, warranties, representations, indemnities and
undertakings accepted or given by the Seller or the Purchaser under this
Agreement or any document referred to herein ("Obligations") shall continue
in full force and effect notwithstanding Completion taking place and shall
be binding on their respective successors.
14.2 The rights of each of the parties to this Agreement may be assigned only
with the prior written consent of the other parties.
15. Costs
Each party shall pay its own costs and expenses in relation to the
negotiation, preparation, and implementation of this Agreement (and the
documents referred to herein), including the fees and disbursements of
their respective legal, accountancy and other advisers.
16. Notices
16.1 Any notice or other communication to be given under this Agreement shall be
in writing, shall be deemed to have been duly served on, given to or made
in relation to a party if it is
- 16 -
left at the authorised address of that party, posted by first class
addressed to that party at such address, or sent by facsimile transmission
to a machine situated at such address and shall if:
(a) personally delivered, be deemed to have been received at the time of
delivery;
(b) posted to an inland address in the United Kingdom, be deemed to have
been received on the second Business Day after the date of posting and
if posted to an overseas address, be deemed to have been received on
the fifth Business Day after the date of posting; or
(c) sent by facsimile transmission, be deemed to have been received upon
receipt by the sender of a facsimile transmission report (or other
appropriate evidence) that the facsimile has been transmitted to the
addressee;
PROVIDED that where, in the case of delivery by hand or facsimile
transmission, delivery or transmission occurs after 6.00 pm on a Business
Day or on a day which is not a Business Day, receipt shall be deemed to
occur at 9.00 am on the next following Business Day.
16.2 For the purposes of this clause the authorised address of each party shall
be the address set out at the heading of this Agreement or such other
address as that party may notify to the others in writing from time to time
in accordance with the requirements of this clause.
17. Severability
17.1 If any provision of this Agreement (or of any document referred to herein)
is held to be illegal, invalid or unenforceable in whole or in part the
legality, validity and enforceability of the remaining provisions of this
Agreement (or such document) shall not in any way be affected or impaired
thereby.
18. Entire agreement and variation
18.1 This Agreement (together with any documents referred to herein) contains
the entire agreement and understanding of the parties and supersedes all
prior agreements, understandings or arrangements (both oral and written)
relating to the subject matter of this Agreement.
18.2 Each of the parties acknowledges and agrees that:
(a) it does not enter into this Agreement and the documents referred to
herein on the basis of and does not rely, and has not relied, upon any
statement or representation (whether negligent or innocent) or
warranty or other provision (in any case whether oral, written,
express or implied) made, given or agreed to by any person (whether a
party to this Agreement or not) except those expressly set out or
referred to in this Agreement and the documents referred to herein and
the only remedy or remedies available in respect of any
misrepresentation or untrue statement made to it shall be a claim for
breach of contract under this Agreement; and
(b) this clause 18.2 shall not apply to any statement, representation or
warranty made fraudulently or to any provision of this Agreement which
was induced by, or otherwise entered into as a result of, fraud, for
which the remedies shall be all those available under the law
governing this Agreement.
18.3 No variation, supplement, deletion or replacement of or from this Agreement
or any of its terms shall be effective unless made in writing and signed by
or on behalf of each party.
19. General provisions
19.1 Time shall be deemed to be of the essence in this Agreement.
- 17 -
19.2 For the avoidance of doubt the parties agree that the company cars used by
the Employees have not been and will not be transferred to the Company by
the Purchaser. Accordingly, from Completion, the Employees will cease to be
entitled to use such cars.
19.3 Any waiver of a breach of any of the terms of this Agreement or of any
default hereunder shall not be deemed to be a waiver of any subsequent
breach or default and shall in no way affect the other terms of this
Agreement.
19.4 No failure to exercise and no delay on the part of any party in exercising
any right, remedy, power or privilege of that party under this Agreement
and no course of dealing between the parties shall be construed or operate
as a waiver thereof, nor shall any single or partial exercise of any right,
remedy, power or privilege preclude any other or further exercise thereof
or the exercise of any other right, remedy, power or privilege. The rights
and remedies provided by this Agreement are cumulative and are not
exclusive of any rights or remedies provided by law.
19.5 The Purchaser shall have, absent fraud, no right whatsoever on or after the
date of this Agreement to terminate or rescind this Agreement.
20. Guarantee
20.1 In consideration of the Purchaser entering into this Agreement with the
Seller, the Guarantor hereby irrevocably and unconditionally guarantees to
the Purchaser the full, prompt and complete performance by the Seller of
all its obligations under this Agreement and the due and punctual payment
on demand of all sums now or subsequently due and payable by the Seller to
the Purchaser under or pursuant to this Agreement.
20.2 The guarantee contained in this clause is a continuing guarantee and shall
remain in force until all the obligations of the Seller under this
Agreement have been fully performed and all sums payable by the Seller have
been fully paid. Save in respect of the Retention it is independent of
every other security which the Purchaser may at any time hold for the
obligations of the Seller under this Agreement.
20.3 The obligations of the Guarantor shall not be affected by any act,
omission, matter or thing which, but for this provision, might operate to
release or otherwise exonerate the Guarantor from its obligations or affect
such obligations, including without limitation and whether or not known to
the Guarantor:
(a) any variation of this Agreement or any time, indulgence, waiver or
consent at any time given to the Seller or any other person;
(b) any compromise or release of, or abstention from obtaining, perfecting
or enforcing any security or other right or remedy whatsoever from or
against, the Seller or any other person; or
(c) any legal limitation, disability, incapacity or other circumstance
relating to the Seller or any other person;
(d) any irregularity, unenforceability or invalidity of any obligations of
the Seller under this Agreement, or the dissolution, amalgamation,
reconstruction or insolvency of the Seller.
21. Governing law and jurisdiction
21.1 This Agreement (together with all documents to be entered into pursuant to
it which are not expressed to be governed by another law) shall be governed
by, construed and take effect in accordance with English law.
21.2 The courts of England shall have exclusive jurisdiction to settle any
claim, dispute or matter of difference which may arise out of or in
connection with this Agreement (including
- 18 -
without limitation claims for set-off or counterclaim) or the legal
relationships established by this Agreement.
21.3 Each of the parties hereto agrees that in the event of any action between
any of the parties hereto being commenced in respect of this Agreement or
any matters arising under it, the process by which it is commenced, (where
consistent with the applicable court rules) may be served on them in
accordance with clause 16.
As Witness the hands of the parties or their duly authorised representatives the
day and year first above written.
- 19 -
Schedule I
The Company
A. Chubb Information Security Limited
1. Registered number 3904130
2. Registered office Pentagon House, Sir Frank Whittle Road,
Derby DE21 4XA, United Kingdom
3. Date of incorporation 11 January 2000
4. Class of company Private, limited by shares
5. Authorised share capital (pound)10,000,000
6. Issued share capital (pound)6,730,000
7. Directors'/Shareholders' Loans Nil
8. Directors 1. Andrew Michael Burton
2. Westminster Securities Limited
3. Williams Management Services Limited
9. Secretary Robert Christopher Hill
10. Accounting reference date 31 December
11. Auditors PricewaterhouseCoopers
12. Tax district and reference Derby 2 - 2527478803045
13. Members Williams Security Limited
14. Mortgages and Charges Nil
- 20 -
Schedule II
The Property
Leasehold Property
Address Lease Details
------- -------------
Former reservoir, Watley The Lease between Southern
Lane, Twyford, near Water Services Limited and
Winchester, Hampshire, all as Security Monitoring Centres
more particularly described Limited dated 24 December
in the Lease 1997 as amended by the
Licence to Assign and Deed of
Variation between Southern
Water Services Limited,
Security Monitoring Centres
Limited and the Company dated
20 February 2001
- 21 -
Schedule III
Employees
Andy Burton
Ian Stephens
David Matthews
Andy Cash
Paul Gardner
Mark Maciw
David Cutler
Richard Trevorah
Alison Prosser
Gordon May
Lorraine Scrivener
David Godley
Ed Parker
Chris Jaycock
Linda Hardy
Richard Everest
Brian Sparke
Deryk Ville
Randy Krzak
Angela Saville
- 22 -
Schedule IV
Warranties
In this Schedule "Encumbrance" includes any charge, debenture, mortgage, pledge,
lien, assignment, hypothecation, security interest, title retention or other
security agreement or arrangement or other third party right.
A. Preliminary
The information set out in Schedule I is true and accurate in all material
respects and so far as the Seller is aware there is no matter which renders
any of such information untrue or misleading.
B. The Accounts
B.1 The Accounts show a reasonably accurate view of the state of affairs and
profit or loss of the Company as at and for the period in respect of which
they have been prepared, but it is hereby acknowledged that they are
summary management accounts and are not prepared on a statutory basis.
B.2 If a balance sheet for the Company were to be drawn up as at the Completion
Date on the same basis as set out in the Warranty B.1 in respect of the
Accounts, it would show (other than, for the avoidance of doubt, the
Inter-Company Debt) no liabilities owing by the Company other than in
relation to any matter in respect of which the Purchaser has given its
consent pursuant to clause 5.
C. Business since the Balance Sheet Date
C.1 Since the Balance Sheet Date the Company has in all material respects
carried on its business in the ordinary and usual course, has in all
material respects been properly managed and has complied, in all material
respects, with all applicable laws and has maintained all material
licences, consents and authorisations of any nature whatsoever (public or
private) which are necessary to carry on the Business from time to time.
D. Share Capital and constitution of the Company
D.1 The Register of Members of the Company contains complete and accurate
records of its members.
D.2 There is no option, right of pre-emption, right or obligation to acquire,
redeem or convert or Encumbrance on, over or affecting the share capital
(whether issued or unissued and whether or not authorised capital) of the
Company and neither has the Seller or the Company agreed to give or create
any of the foregoing and, so far as the Seller is aware, no person has
claimed to be entitled to any of the foregoing.
D.3 The copy of the Memorandum and Articles of Association set out in the Data
Room Index as Volume 1, document 1.1 is up to date, true and complete and
has annexed thereto a copy of every resolution, agreement or other document
required to be annexed thereto pursuant to section 380 Companies Act 1985.
D.4 The Shares comprise all the shares in issue in the capital of the Company.
E. Assets
E.1 The Company is the absolute owner of and is in actual possession of all the
material assets used in the course of the Business with full right and
power to sell the same in
- 23 -
each case with full title guarantee. The Company has not created or agreed
to create any Encumbrance over any material part of its undertaking or
assets.
E.2 So far as the Seller is aware, no asset used in the course of the Business
and hired, leased or rented by or obtained on hire-purchase by the Company
has been or is liable to be retaken into possession by the owner thereof.
E.3 The Company owns all of the assets that comprise the fixed assets of the
Company as set out in the Accounts including the assets set out in the
fixed assets register set out in the Data Room Index as Volume 1, document
17.
E.4 No member of the Seller's Group has knowingly taken any action that would
prejudice the ability of the Company to deduct expenses or losses incurred
by the Company for the purposes of computing its liability to United
Kingdom corporation tax at any time or to utilise capital allowances that,
but for such action, would be available to the Company.
For the avoidance of doubt, no warranty is given as to the availability to
the Company of any expenses, losses or capital allowances for United
Kingdom corporation tax purposes.
F. Property
F.1 The Property comprises all of the land and premises owned, occupied or
otherwise used by the Company. The particulars of the Property shown in
Schedule II are true and correct.
F.2 The Company has not entered into any agreement to acquire or dispose of any
land or premises or any interest therein which has not been completed.
F.3 The Property is not subject to:
(a) any matters which adversely affect to a material extent the proper
use, occupation or enjoyment of the Property for the purpose for which
it is now used and all matters which benefit the Property have where
necessary been properly protected by registration; and
(b) any outgoings other than the outgoings for which the Company is liable
in terms of the Lease and the Company is not in arrears with any such
outgoings.
F.4 No written notice has been received by the Company or, so far as the Seller
is aware, any member of the Seller's Group in respect of the Company's or
Security Monitoring Centre Limited's non-compliance with any agreement,
covenant, restriction, applicable statutory and by-law requirement or other
matter to which the Property is subject and in so far as the Seller is
aware there are no claims or disputes or outstanding orders or notices
affecting the Company's interest in the Property.
G. Environmental/health and safety
G.1 So far as the Seller is aware, there have been no material breaches since
24 December 1997 by the Company or Security Monitoring Centres Limited of
Environmental Laws and there are no matters whatsoever occurring since that
date which have or are likely to give rise to any claims, actions,
proceedings, expenses or liabilities against the Company arising under
Environmental Laws concerning contamination or decontamination or other
remediation of the Property or land adjoining the Property or Controlled
Waters at or beneath the Property.
G.2 There are annexed to the Disclosure Letter complete copies of any
environmental audit reports relating to the Property which are in the
possession or control of the Seller or any member of the Seller's Group and
were conducted in the last year.
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H. Commercial agreements and arrangements
H.1 The Seller has disclosed to the Purchaser in the Disclosure Letter all
material contracts, commitments and obligations of and offers by the
Company now outstanding or which will become capable of giving rise to a
material contract by an order or acceptance by another party or parties.
H.2 Neither the Company nor, so far as the Seller is aware, any other party to
any material agreement or arrangement with the Company is in default to any
material extent thereunder. So far as the Seller is aware, there are no
circumstances likely to give rise to such a default.
I. Intellectual Property Rights
General
I.1 The Company does not own any registered Intellectual Property or
applications therefor.
I.2 So far as the Seller is aware, no Employee or employee of the relevant
member of the Seller's Group or other person has claimed in writing any
right, payment or compensation in respect of any Intellectual Property used
in connection with the Business.
I.3 So far as the Seller is aware, the activities of the Business do not
infringe the Intellectual Property owned by any third party and, so far as
the Seller is aware, no third party is infringing any Intellectual Property
used in the Business.
Licences, etc
I.5 Save as specifically disclosed in the Disclosure Letter there are no
subsisting material licences of Intellectual Property granted to or by any
person carrying on the Business and no third party has applied for licences
of right or compulsory licences in any jurisdiction.
J. Information technology
J.1 Copies of all material licences, undertakings, settlements, consents,
agreements and arrangements relating to the escrow, ownership, possession,
maintenance and use of the hardware and software used in the Business have
been provided to the Purchaser and, so far as the Seller is aware, no party
to such licences, undertakings, settlements, consents, agreements and
arrangements is in breach of such arrangements and no written claim
regarding such breach has been received or made by the Company in the two
years prior to the date hereof.
K. Compliance and litigation
K.1 Save as claimant in proceedings for the collection of debts (not exceeding
(pound)30,000 in the aggregate) arising in the ordinary course of its
business, the Company is not now engaged in any litigation or arbitration
proceedings, there are no litigation or arbitration proceedings pending or
threatened by or against the Company, no injunction has been granted
against the Company, the Company has given no undertaking to any court or
to any third party arising out of any legal proceedings and there is no
matter or fact in existence which might give rise to the same or form the
basis of any criminal prosecution against the Company.
K.2 So far as the Seller is aware, no member of the Seller's Group is engaged
in any proceedings (actual, pending or threatened) of the type referred to
in K.1 in connection with its conduct of the Business or any part of it and
there is no matter or fact in existence which might give rise to the same.
K.3 So far as the Seller is aware, no order has been made or petition presented
or resolution passed for the appointment of an administrator or receiver in
relation to the Company, or for its winding-up, nor has any distress,
execution or other process been levied against the Company.
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L. Employees
L.1 Copies of:
(a) the service agreements of each of the Employees; and
(b) the terms of all consultancy agreements with the Seller or the
Seller's Group relating to the Business,
have been disclosed.
L.2 There are no employees of the Company other than the Employees.
L.3 Neither the Company nor the Seller nor the relevant member of the Seller's
Group is liable to make any payment to any Employee or former employee
engaged in the Business by way of damages (whether for breach of contract
or otherwise) or compensation for loss of office or employment or for
redundancy, protective awards, wrongful dismissal or unfair dismissal or
for failure to comply with any order for reinstatement or re-engagement (or
similar rights of action under Canadian provincial or federal law) or for
any other liability accruing from the termination of any contract of
service or for services of any Employee or any employee or former employee
of the Company, the Seller or a member of the Seller's Group who is or was
engaged in the Business and the Employment Statutes have in all material
respects been duly complied with by the Company in relation to its
employees.
L.4 Neither the Company nor the Seller nor the relevant member of the Seller's
Group is engaged or involved in any dispute arising out of, affected by or
otherwise relating to the provisions of the Employment Statutes in relation
to the Employees, and so far as the Seller is aware there are no
circumstances which could give rise to any such dispute.
L.5 No trade union is recognised by the Company, the Seller or the relevant
member of the Seller's Group in relation to the Employees for any purpose
whatsoever.
M. Pensions
M.1 The Company has no obligation (actual or contingent and whether legally
enforceable or not) to provide or contribute to the provision of any
pension or like benefit for or in respect of any of the Employees.
M.2 The Disclosure Letter contains an accurate description of the measures
taken by and in relation to the Seller's Pension Schemes to comply with the
requirement that men and women members thereof be subject to equal normal
retirement ages and contains details of those of the Employees who are both
members of the Seller's Pension Schemes and have past part-time service
with the Seller's Group which was not pensionable because the Seller's
Pension Scheme excluded part-time employees.
M.3 The Disclosure Letter contains a list of all of the Employees who are
members of or have any rights to benefits under the Seller's Pension
Schemes.
M.4 So far as the Seller is aware (which expression shall mean, for the
purposes of Warranties M.4 and M.7 only, Roy Brown (Divisional Finance
Director, Chubb plc) having made reasonable enquiries of Warwick Jones
(Group Pensions Manager for the Seller's Group)), the Seller's Pension
Schemes have at all times been operated in all material respects in
accordance with their respective governing documentation and in all
material respects in accordance with all applicable laws and regulatory
requirements including, without limitation, the requirements of Article 141
of the EU Treaty of Rome relating to equal benefits and admission to
membership.
M.5 Other than for the month current at the date of this Agreement, all amounts
due to the trustees of the Seller's Pension Schemes in respect of any of
the Employees have been paid.
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M.6 Each of the Seller's Pension Schemes is approved as an exempt approved
scheme within the meaning of Chapter I of Part XIV of ICTA 1988.
M.7 So far as the Seller is aware, there are no actions, claims or suits
outstanding, pending or threatening against the trustees or administrators
of the Seller's Pension Schemes in respect of any act, event or omission or
other matter arising out of or in connection with the Seller's Pension
Scheme or otherwise in relation to the provision of any relevant benefit in
respect of any of the Employees.
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Schedule V
Form of deed of covenant
This Deed of Covenant is made the day of 2001
----- --
Between:
(1) Chubb Plc a company registered in England and Wales under number 4034666
whose registered office is at Pentagon House, Sir Frank Whittle Road, Derby
DE21 4XA (collectively, the "Covenantor");
(2) Chubb Information Security Limited a company registered in England and
Wales under number 3904130 whose registered office is at Pentagon House,
Sir Frank Whittle Road, Derby DE21 4XA (the "Company"); and
(3) Baltimore Technologies plc a company registered in England and Wales under
number 2643615 whose registered office is at The Square, Basing View,
Basingstoke, Hampshire RG21 4EG (the "Purchaser").
Whereas:
Pursuant to the provisions of an Agreement dated o March 2001 between amongst
others the Covenantor and the Purchaser, (the "Sale Agreement") the Purchaser
has agreed to acquire the entire issued share capital of the Company and the
Covenantor has agreed to enter into this Deed.
Operative terms:
1. Interpretation
1.1 In this Deed unless the context or subject matter otherwise requires,
expressions defined in the Sale Agreement shall have the same meanings and
in addition the following expressions shall have the following meanings:
"Listed Territories" has the meaning ascribed to it in the Trade Mark
Licence Agreement;
"Restricted Business" the business as described in the Sale Agreement under
the definition "Business";
"Restricted Area" the world;
"Restricted Period" the period from the date of the Trade Mark Licence
Agreement to 31 December 2006; and
"Trade Mark Licence Agreement" the trade mark licence agreement as defined
in the Sale Agreement.
1.2 The provisions of clauses 1.2 to 1.4 (inclusive) of the Sale Agreement
shall apply in this Deed (with the necessary modifications) as if repeated
in this Deed and set out in full herein.
2. Covenants
2.1 Subject to clause 2.5 the Covenantor hereby undertakes to the Company that
it will not either alone or jointly with others, whether as principal,
agent, manager, shareholder, independent contractor or in any other
capacity, directly or indirectly through any other person, for his own
benefit or that of others:
(a) at any time during the Restricted Period engage in or carry on or be
interested in any Restricted Business within the Restricted Area in
competition with the Company and/or the Purchaser (other than as a
holder for investment of no more than 15 per cent of any class of
shares or securities dealt in on a recognised stock exchange); or
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(b) at any time during the Restricted Period canvass or solicit or accept
orders for the supply of any services substantially similar to or
otherwise competing with those supplied in the normal course of the
Restricted Business from any person who has been a customer of the
Company during the 12 months preceding the Completion Date, or induce
or seek to induce any such person to cease being a customer of the
Company; or
(c) at any time during the Restricted Period do anything knowingly to
assist any competitor of the Company in any material way in carrying
on or developing any Restricted Business in the Restricted Area; or
(d) at any time during the period expiring two years after Completion
actively solicit any employee earning in excess of (pound)50,000 of
the Company (an "Employee") to leave the employment of the Company,
whether or not such Employee would by reason of so leaving commit a
breach of his contract of employment, except in any such case where
such Employee responds to a public advertisement.
2.2 Nothing in this Deed shall prevent or restrict the Covenantor or any of its
subsidiary undertakings from time to time from acquiring any person or a
business (a "Target") whose business includes a business (or businesses)
(the "Competing Business") which competes with the Restricted Business,
provided that the Competing Business is not a material part of the business
of the Target. For the purposes of clauses 2.2 and 2.3, the Competing
Business shall only be deemed "material" if the Competing Business
contributed more than 30% of the total revenues of the Target, by reference
to the most recent published accounts (or, if there are none, the
management accounts).
2.3 If the Competing Business of a Target is material, then the Covenantor (or
any of its subsidiary undertakings from time to time) may nevertheless make
the acquisition but undertakes promptly after completion of the acquisition
to notify the Purchaser in writing of this fact and to:
(a) offer the Purchaser the first right of refusal to acquire the
Competing Business and if such offer is not accepted,
(b) dispose or cease the operation of the Competing Business within six
months of the date when the Purchaser notifies the Covenantor in
writing that it does not wish to acquire the Competing Business
offered pursuant to clause 2.3(a) above. At the end of this period,
the exemption in clause 2.2 shall cease to apply.
2.4 If by the third anniversary of this Deed the Company has not made use of
the "Chubb" mark in a country which is included in the Listed Territories
then the Covenantor may at any time thereafter notify the Purchaser that
the covenant pursuant to clause 2.1 shall cease to apply in some or all of
the countries in the Listed Territories in which no use of the "Chubb" mark
has been made.
2.5 Each of the covenants contained in clause 2 is entirely separate and
severable and enforceable accordingly. Each of such covenants is considered
fair and reasonable in all the circumstances by the parties but in the
event that any such restriction shall be found to be void or ineffective
but would be valid and effective if some part thereof were deleted or the
duration or area of application reduced such restriction shall apply with
such modification as may be necessary to make it valid and effective.
3. Assignment
The rights of each of the parties to this Deed may be assigned only with
the prior written consent of the other parties.
4. General provisions
The following provisions of the Sale Agreement shall apply to this Deed as
if the same had been set out herein in full save that references therein to
the Seller, its address and
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the Agreement respectively shall be construed as references to the
Covenantor, its address specified in this Deed and this Deed:
(a) clause 16 Notices
(b) clause 17 Severability
(c) clause 18 Entire Agreement and Variations
(d) clause 19 General provisions
(e) clause 21 Governing law.
In witness whereof this Deed has been entered into the day and year first before
written.
EXECUTED as a deed by the )
affixing of the Common Seal )
of Chubb Information Security Limited )
in the presence of: )
Director
Director/Secretary
EXECUTED as a deed by the )
affixing of the Common Seal )
of Chubb plc )
in the presence of: )
Director
Director/Secretary
EXECUTED as a deed by the )
affixing of the Common Seal )
of Baltimore Technologies plc )
in the presence of: )
Director
Director/Secretary
Signed by Roy F. Brown ) "Roy F. Brown"
for and on behalf of )
Williams Security Limited )
Signed by Roy F. Brown ) "Roy F. Brown"
for and on behalf of )
Chubb plc )
Signed by Simon Enoch ) "Simon Enoch"
for and on behalf of )
Baltimore Technologies plc )