exv10w2



 





Exhibit 10.2




	 	 	 
	DATED
	 	2007






ALAN KEITH SEFTON                     (1)




and




FEDERAL SIGNAL OF EUROPE BV Y CIA, SC and FS PIPS UK LIMITED     (2)




PIPS TECHNOLOGY LIMITED                    (3)




AGREEMENT




for the sale of the entire issued share capital

of

PIPS Technology Limited





Steynings House

Summerlock Approach

Salisbury

Wiltshire

SP2 7RJ




Tel: (01722) 412412

Fax: (01722) 427613




Ref: JCSN/601827/0190




 









 





SHARE SALE AGREEMENT — PIPS TECHNOLOGY LIMITED




DATE:




PARTIES:





	(1)	 	ALAN KEITH SEFTON of 2080 Wilkerson Road, Knoxville, Tennesee, 37922, USA (the “Seller”);

	 
	(2)	 	FEDERAL SIGNAL OF EUROPE BV Y CIA, SC (registered in Spain with the Barcelona Commercial
Registry under Volume 39272, Folio 109, Page B-343809, First Entry) of Calle Doctor Ferran,
Vilassar de Dalt (Barcelona) Postal Code 08339 and FS PIPS UK LIMITED (registered in England
and Wales number 06326733 having its registered office at 1 St James Gate Newcastle upon Tyne
NE99 1YQ (together and individually called the “Buyer”) which expression includes their
respective permitted assigns); and

	 
	(3)	 	PIPS TECHNOLOGY LIMITED (registered in England and Wales number 04196820 having its
registered office at York House, School Lane, Chandlers Ford, Eastleigh, Hampshire, SO53 4DG
(the “Company);






OPERATIVE PROVISIONS:





	 	1	 	Definitions and Interpretation







	 	1.1.	 	In this agreement unless the context otherwise requires the expressions set out
in Part 3 of schedule 3 shall have the meanings ascribed to them in that schedule and
the following expressions have the following meanings:







	 	 	 
	“Accounts”

	 	the Company’s audited annual accounts (as defined
in section 262 CA 1985), in each case for the
accounting reference period ended on the Accounts
Date, including the notes to those accounts and
the associated directors’ and auditors’ reports
and any profit and loss account omitted in
reliance on section 230(3) CA 1985;


	 
	 	 

	“Accounts Date”

	 	31 December 2006;

	 
	 	 

	“Accounts Relief”

	 	any Relief which, in preparing the Completion
Accounts, has been assumed to be available and
which has been (i) shown or taken into account as
an asset in the Completion Accounts or (ii) taken
into account in computing (and so reducing) any
provision for deferred tax which appears in the
Completion Accounts or has resulted in no
provision for deferred tax being shown in the
Completion Accounts;

	 
	 	 

	“Adjustment Amount”

	 	the amount by which the NAV is greater or less
than the Base NAV such sum to be determined and
paid as provided in clause 6.1 and schedule 9;

	 
	 	 

	“alternative measure of
damages”

	 	the alternative measure of damages referred to in
clause 9.10(b);

	 
	 	 

	“Agreed Documents”

	 	this agreement and all the agreed form documents







 









 






	 	 	 
	 

	 	referred to in it;

	 
	 	 

	“agreed form”

	 	in a form which has been agreed by the parties and
which has been duly executed or initialled for
identification by them or on their behalf;

	 
	 	 

	“Auditors”

	 	BDO Stoy Hayward LLP, Connaught House, Alexandra
Terrace, Guildford, Surrey, GD1 3DA;

	 
	 	 

	“B Shareholders”

	 	those persons whose names and addresses and
details of whose holdings of B ordinary shares of
1p each are set out in Part 2 of Schedule 3;

	 
	 	 

	“B Shares”

	 	1,100,000 B Ordinary Shares of 1p each in the
capital of the Company

	 
	 	 

	“Base NAV”

	 	an amount equal to the amount of the aggregate of
the fixed and current assets of the Company less
the aggregate of the liabilities of the Company
all as shown in the Interim Accounts but (i)
disregarding all cash shown as an asset of the
Company in the Interim Accounts (ii) adding back
as an asset an amount equal to all interest
bearing indebtedness of the Company shown therein
as a liability;

	 
	 	 

	“business day”

	 	any day other than a Saturday, Sunday or public
holiday in England and Wales;

	 
	 	 

	“Business Information”

	 	Confidential Information relating to or used in
the activities of the Company;

	 
	 	 

	“Buyer’s English Solicitors”

	 	Watson Burton LLP, 1 St James’ Gate, Newcastle
upon Tyne, NE99 1YQ, England (Ref: GMH/RJA);

	 
	 	 

	“Buyer’s Group”

	 	Federal Signal Corporation, the Buyer and all
their respective subsidiaries and subsidiary
undertakings from time to time and all companies
of which Federal Signal Corporation or the Buyer
is from time to time a subsidiary or subsidiary
undertaking;

	 
	 	 

	“Buyer’s Tax Group”

	 	the Buyer and any other person or persons which
either are or become after Completion, or have
within the seven years ending at Completion, been
treated as members of the same group as, or
otherwise connected or associated in any way with,
the Buyer for any Tax purpose;

	 
	 	 

	“Buyer’s US Attorneys”

	 	Thompson Coburn LLP of One US Bank Plaza, St
Louis, Missouri 63101 (Ref: FRS);

	 
	 	 

	“CA 1985”

	 	the Companies Act 1985;

	 
	 	 

	“Companies Acts”

	 	as defined in section 744, CA 85 together with the
Companies Act 1989;

	 
	 	 

	“Company”

	 	PIPS Technology Limited details of which are set
out in schedule 2;







 









 






	 	 	 
	“Compet ’98”

	 	Compet ’98 Számítástechnikai Szolgáltató és
Kereskedelmi Betéti Társaság as such corporation
is more fully described in the Istenes
Acknowledgement

	 
	 	 

	“Completion”

	 	completion of the sale and purchase of the Sale
Shares by the performance by the parties of their
respective obligations under clause 7 and schedule
6;

	 
	 	 

	“Completion Accounts”

	 	the profit and loss account of the Company for the
period commencing on the day after the Accounts
Date and ending on the Completion Date and the
balance sheet of the Company as at the Completion
Date and the statement of the NAV to be prepared
in accordance with clause 6 and schedule 9;

	 
	 	 

	“Completion Date”

	 	the date of this agreement and immediately
following its execution;

	 
	 	 

	“Conditions”

	 	the conditions precedent set out in schedule 1;

	 
	 	 

	“Confidential Information”

	 	all information and records wherever located
(including accounts, business plans and financial
forecasts, Tax records, correspondence, designs,
drawings, manuals, specifications, customer, sales
and supplier information, technical or commercial
expertise, software, formulae, processes, trade
secrets, methods, knowledge and Know-How) and
which (either in their entirety or in the precise
configuration or assembly of their components) are
not publicly available and in each case whether or
not recorded;

	 
	 	 

	“Consideration”

	 	the consideration payable to the Seller for the
Sale Shares as provided in clause 5.1;

	 
	 	 

	“Contracts Act”

	 	the Contracts (Rights of Third Parties) Act 1999;

	 
	 	 

	“control”

	 	shall have the meaning ascribed to it by Section
840 of ICTA 1988 and “controlled” shall be
construed accordingly;

	 
	 	 

	“Copyright”

	 	copyright, design rights, topography rights and
database rights whether registered or unregistered
(including any applications for registration of
any such thing) and any similar or analogous
rights to any of the foregoing whether arising or
granted under the law of England or of any other
jurisdiction;

	 
	 	 

	“DPA 1998”

	 	the Data Protection Act 1998;

	 
	 	 

	“Data Subject”

	 	has the meaning given in DPA 1998;

	 
	 	 

	“Developed Software”

	 	any software developed by or on behalf of Company;

	 
	 	 

	“Disclosure Letter”

	 	the letter of the same date as this agreement from
the Seller to the Buyer disclosing certain matters
in relation to the Warranties which has been
delivered to the Buyer







 









 






	 	 	 
	 

	 	prior to the execution of
this agreement;

	 
	 	 

	“Data Room Questionnaire”

	 	the questionnaire (a copy of which document is
annexed to the Disclosure Letter) deposited in the
website data room provided by the Seller in
relation to the proposed sale of the Company,
access to which has been granted to the Buyer;

	 
	 	 

	“Domain Name”

	 	the domain name “pipstechnology.co.uk”;

	 
	 	 

	“Earn-out Period”

	 	shall have the same meaning as in the Joint Issues
Agreement;

	 
	 	 

	“EBIT”

	 	shall have the same meaning as in the Joint Issues
Agreement;

	 
	 	 

	“enactment”

	 	any statute or statutory provision (whether of the
United Kingdom or elsewhere), subordinate
legislation (as defined by section 21(1)
Interpretation Act 1978) and any other subordinate
legislation made under any such statute or
statutory provision;

	 
	 	 

	“Encumbrance”

	 	any option, trust, power of sale, title retention,
pre-emption right, right of first refusal,
Security Interest or other right, claim or
interest, whether legal or equitable, of any third
party (or an agreement or commitment to create any
of them);

	 
	 	 

	“entity”

	 	any body corporate, partnership, limited liability
partnership, association, trust, unincorporated
organisation or group;

	 
	 	 

	“Environment”

	 	the environment as defined in section 1(2)
Environmental Protection Act 1990 or any part of
it and includes ambient air, land surface or
subsurface strata, any surface water (whether
inland or maritime) and any ground water;

	 
	 	 

	“Environmental Claim”

	 	any claim, notice of violation, prosecution,
demand, action, official warning, abatement or
other order or notice (conditional or otherwise)
relating to any Environmental Matters or
Environmental Liabilities or requiring compliance
with the terms of any Environmental Licence or
Environmental Law;

	 
	 	 

	“Environmental Damage”

	 	any pollution, contamination, degradation, damage
or injury caused by, related to or arising from or
in connection with the presence, generation, use,
handling, processing, treatment, storage,
transportation, release, spillage, emission,
leaking, pumping, injection, deposit, disposal,
discharge, leaching, migration or any other form
of movement into or through the Environment or
into or out of any property, of any Relevant
Substance;

	 
	 	 

	“Environmental Laws”

	 	any Official Requirements relating to the
protection of the Environment or the control or
prevention or







 









 






	 	 	 
	 

	 	remedying of Environmental Damage or
having such effect;

	 
	 	 

	“Environmental Liabilities”

	 	any liabilities, responsibilities, claims, losses,
costs (including remedial, removal, response,
abatement, clean-up, investigative and monitoring
costs), damages, expenses, charges, assessments,
liens, penalties and fines which are incurred by,
asserted against or imposed on a person as a
result of or in connection with:

	 
	 	 

	 

	 	(a)      any violation of or non-compliance with
Environmental Laws (including the failure to
procure or violation of any Environmental Licence
required by Environmental Laws); or


	 
	 	 

	 

	 	(b)      any Environmental Damage;


	 
	 	 

	“Environmental Licence”

	 	any permit, licence, authorisation, consent or
other approval obtained or which ought to have
been obtained under any Environmental Law at any
time by the Company or in relation to the business
carried on by the Company;

	 
	 	 

	“Environmental Matters”

	 	includes:

	 
	 	 

	 

	 	(a)      any generation, deposit, disposal, keeping,
treatment, transportation, transmission, handling
or manufacture of any Relevant Substance;


	 
	 	 

	 

	 	(b)      nuisance, noise, defective premises, health
and safety at work or elsewhere;


	 
	 	 

	 

	 	(c)      the carrying out of a development (as defined
in section 55(1) Town and Country Planning Act
1990);


	 
	 	 

	 

	 	(d)      the pollution, conservation or protection of
the Environment whether relating to man or any
living organism supported by the Environment or
any other matter affecting the Environment; and


	 
	 	 

	 

	 	(e)      the recycling of packaging or other materials
or waste (as defined in the Environmental
Protection Act 1990);


	 
	 	 

	“ERA”

	 	Employment Rights Act 1996;

	 
	 	 

	“Escrow Agent” “Escrow
Account” and “Escrow
Agreement”

	 	shall have the same meanings as are ascribed to
them in the Joint Issues Agreement

	 
	 	 

	“Event”

	 	any event act transaction action or omission
(whether or not the Company is a party to it) and
includes the disposal of the Sale Shares under
this agreement, any change in the residence of any
person for the purposes of







 









 






	 	 	 
	 

	 	Tax, the death or
dissolution of any person, the receipt or accrual
of any income profits or gains, any distribution,
any transfer payment, loan or advance and any
event which is deemed to have occurred or is
treated or regarded as having occurred for the
purposes of Tax Legislation;

	 
	 	 

	“fairly disclosed”

	 	disclosed in or under the Disclosure Letter in
such manner and in such detail to enable a
reasonable buyer to make an informed and accurate
assessment of the matter concerned;

	 
	 	 

	“Family Member”

	 	in relation to the Seller means his wife, their
respective siblings and the children and
grandchildren (including adoptive and step
children and grandchildren where relevant) of each
such person;

	 
	 	 

	“Federal Signal”

	 	Federal Signal Corporation, being a corporation
registered in the state of Delaware United States
of America being the ultimate holding company of
the Buyer;

	 
	 	 

	“group”

	 	shall have the meaning ascribed to in Section 53
of the Companies Act 1989;

	 
	 	 

	“Guarantee”

	 	any guarantee, indemnity, suretyship, letter of
comfort or other assurance, security or right of
set-off given or undertaken directly or by way of
counter-indemnity by a person to secure or support
the obligations (actual or contingent) of any
third party;

	 
	 	 

	“Hardware”

	 	any and all computer, telecommunications and
network equipment;

	 
	 	 

	“Health & Safety Laws”

	 	all applicable statutes statutory legislation
common law treaties regulations directives codes
of practice guidance notes including but without
limitation the Factories Act 1961 the Offices,
Shops and Railway Premises Act 1963 the Fire
Precautions Act 1971 the Health and Safety at Work
etc. Act 1974 and the Construction (Design and
Management) Regulations 1994 concerning the health
and safety of those who work for the Company
whether as employees or otherwise, visit the
Property or are in any way affected by the
activities of the Company or by persons working
for the Company;

	 
	 	 

	“holding company”

	 	a holding company as defined by sections 736 and
736A CA 1985;

	 
	 	 

	“HMRC”

	 	H M Revenue & Customs and/or its predecessors the
Inland Revenue or HM Customs and Excise, in each
case as the context so requires;

	 
	 	 

	“ICTA 1988”

	 	the Income and Corporation Taxes Act 1988;







 









 






	 	 	 
	“income profits or gains”

	 	includes income profits or gains (including
capital gains) of any description or from any
source and income profits or gains which are
deemed to be earned accrued or received for the
purposes of any Tax;

	 
	 	 

	“Intellectual Property”

	 	all the Intellectual Property Rights owned and/or
used by the Company prior to the date of this
agreement;

	 
	 	 

	“Intellectual Property Rights”

	 	Know-How Copyright (including rights in Software)
Trade Marks, IP Materials and Patent Rights;

	 
	 	 

	“Interim Accounts”

	 	unaudited management accounts of the Company for
the 5 month period ended on 31 May 2007
(comprising profit and loss account for such
period and balance sheet as at that date);

	 
	 	 

	“IP Materials”

	 	all documents, records, tapes, discs, diskettes
and any other materials whatsoever containing
Copyright works, Know How or Software;

	 
	 	 

	“Istenes Acknowledgement”

	 	acknowledgment and confirmation in writing in
agreed form (executed as a deed governed by
English law) by Mr Peter Istenes (“Mr Istenes”)
and by Compet ’98;

	 
	 	 

	“Istenes Agreement”

	 	agreement dated 3 October 2005 between the Company
(1) Mr Istenes (2) and Compet ’98 (3) supplemental
to a Software Development Agreement dated 1
October 2002 between the same parties and related
documents;

	 
	 	 

	“Istenes Sum”

	 	the sum of £1,680,000

	 
	 	 

	“IT Contracts”

	 	any agreements, arrangements or licences with
third parties relating to IT Systems or IT
Services, including all hire purchase contracts or
leases of Hardware owned or used by the Company,
licences of Software owned or used by the Company,
and other IT procurement;

	 
	 	 

	“IT Services”

	 	any services relating to the IT Systems or to any
other aspect of the Company’s data processing or
data transfer requirements, including facilities
management, bureau services, hardware maintenance,
software development or support, consultancy,
source code deposit, recovery and network
services;

	 
	 	 

	“IT Systems”

	 	any Hardware, Software, operating systems,
firmware, networking equipment or other equipment
which is reliant on microchip technology used by
the Company for any purpose;

	 
	 	 

	“Joint Issues Agreement”

	 	agreement in agreed form to be entered into today
between Federal Signal Corporation (1) the Buyer
(2) and the Seller (3) relating inter alia to the
Contingent Consideration;

	 
	 	 

	“Know-How”

	 	trade secrets and confidential business
information including details of supply
arrangements, customer lists







 









 






	 	 	 
	 

	 	and pricing policy;
unpatented technical and other information
including inventions, discoveries, processes and
procedures, ideas, concepts, formulae,
specifications, procedures for experiments and
tests and results of experimentation and testing;
information comprised in Software; together with
all common law or statutory rights protecting the
same including by any action for breach of
confidence and any similar or analogous rights to
any of the foregoing whether arising or granted
under the law of England or any other
jurisdiction;

	 
	 	 

	“Legal and Beneficial Title”

	 	full and unrestricted title with the benefit of
quiet possession and free from lawful interruption
and disturbance;

	 
	 	 

	“Loss”

	 	in relation to an Accounts Relief;

	 
	 	 

	 

	 	(a)      if and to the extent that the Accounts Relief
is also shown or taken into account in the Next
Accounts, the reduction modification claw-back
counter-action disallowance or failure to obtain
that Relief shown or taken into account in the
Next Accounts; or


	 
	 	 

	 

	 	(b)      if and to the extent that the Accounts Relief
is not shown or taken into account in the Next
Accounts, the failure to show or take into account
that Relief in the Next Accounts



	 
	 

	 	and lost shall be construed accordingly


	 
	 	 

	“Management Accounts”

	 	the unaudited accounts of the Company for the
period from Accounts Date to 30 June 2007 (both
dates inclusive);

	 
	 	 

	“Minority Agreement”

	 	an agreement in agreed form to be entered into
today between the B Shareholders (1) the Seller
(2) and the Buyer (3) relating to the sale of all
the B shares to the Buyer;

	 
	 	 

	“Net Asset Value” or “NAV”

	 	a sum (whether positive or negative) equal to the
amount of the aggregate of the fixed and current
assets of the Company less the aggregate of the
liabilities of the Company as at Completion all as
shown in the Completion Accounts;

	 
	 	 

	“New Relief”

	 	any Relief which arises:

	 
	 	 

	 

	 	(a)      as a result of any Event occurring after
Completion; or


	 
	 	 

	 

	 	(b)      in respect of any period commencing on or
after Completion;


	 
	 	 

	“Next Accounts”

	 	the audited statutory accounts of the Company in
respect of the period beginning on 1 January 2007;







 









 






	 	 	 
	“Nominated Account”

	 	the Seller’s Solicitors’ client account numbered
30966258 at the 2-6 High Street, Salisbury, SP1
2YH branch of Barclays Bank plc sort code 20-75-01
or such other account as the Seller’s Solicitors
shall specify in writing;

	 
	 	 

	“Official Requirement”

	 	any enactment, ordinance, pact, decree, treaty,
code, directive, order, notice or official
published plan or policy with legal or actual
force in any geographical area and/or over any
class of persons;

	 
	 	 

	“Patent Rights”

	 	patent applications or patents (if any) and any
similar or analogous rights whether arising or
granted under the law of England or any other
jurisdiction;

	 
	 	 

	“Permits”

	 	any and all licences, consents, permits,
authorisations or the like, made or issued
pursuant to or under, or required by,
Environmental Laws in relation to the carrying on
of the Business;

	 
	 	 

	“Personal Data”

	 	any data held by the Company or sold or otherwise
transferred or disclosed to the Buyer under or in
contemplation of this agreement which falls within
the definition of “personal data” given from time
to time in DPA 1998;

	 
	 	 

	“PIPS Inc”

	 	PIPS Technology Inc a company incorporated under
the laws of the State of Tennessee USA;

	 
	 	 

	“PIPS Inc Agreement”

	 	an agreement in agreed form between the Seller (1)
and Federal Signal Corporation (2) relating
together to the sale by the Seller to Federal
Signal Corporation of the outstanding common stock
of PIPS Inc;

	 
	 	 

	“Process” and “Processing”

	 	have the respective meanings given to them from
time to time in DPA 1998;

	 
	 	 

	“Prohibited Area”

	 	any country or recognised territorial area in
which Restricted Products and/or Restricted
Services were supplied by the Company during the
period of 2 years prior to Completion save that
the Prohibited Area in relation to those products
and services referred to in paragraph (b) of the
definitions of Restricted Products and Restricted
Services shall be the United Kingdom;

	 
	 	 

	“Property”

	 	the leasehold properties details of which are
respectively set out in schedule 7;

	 
	 	 

	“related company”

	 	in relation to a company means any company which
at the relevant time is a direct or indirect
subsidiary or holding company of that company or
any direct or indirect subsidiary of any such
holding company;

	 
	 	 

	“Relevant Authority”

	 	any person or authority anywhere in the world
(including any nation, national or local
governmental or international organisation and any
subdivision or agency







 









 






	 	 	 
	 

	 	or executive arm of any of
them, any court or judicial officer or any
securities exchange) with legal or de facto power
to impose and/or enforce compliance with any
Official Requirement;

	 
	 	 

	“Relevant Breach”

	 	any event, matter or circumstance which is
inconsistent with, contrary to or otherwise a
breach of any of the Warranties;

	 
	 	 

	“Relevant Person”

	 	the Seller and any person (except the Buyer):

	 
	 	 

	 

	 	(a)      with whom, before Completion the Company or,
at any time, the Seller is connected; or


	 
	 	 

	 

	 	(b)      any person who stands or has stood in a direct
or indirect relationship with the Company at any
time before Completion such that failure by that
person at any time to pay Tax could result in an
assessment on the Company under section 767A or
section 767AA ICTA 1988;


	 
	 	 

	“Relevant Substance”

	 	any substance (whether in a solid or liquid form
or in the form of a gas or vapour and whether
alone or in combination with any other substance)
or waste (as defined in the Environmental
Protection Act 1990) which is capable of causing
harm to man or any other living organism supported
by the Environment or damaging the Environment or
public health or welfare;

	 
	 	 

	“Relief”

	 	any loss relief allowance exemption set-off
deduction credit right to repayment or other
relief available in relation to Tax or to the
computation of income profits or gains for the
purposes of Tax;

	 
	 	 

	“Replies”

	 	the statements contained as replies to the to the
questions in the Data Room Questionnaire deposited
in the website data room provided by the Seller in
relation to the proposed sale of the Company
(access to which has been granted to the Buyer)
including information contained in the Q & A
workspace section of the data room and in all
written replies by the Seller’s Solicitors to
written enquiries raised by the Buyer’s Solicitors
in relation to the Company or its affairs, assets
or liabilities

	 
	 	 

	“Restricted Products”:

	 	(a)      all products which are manufactured, produced,
distributed or sold by the Company at the
Completion Date (including without limitation
automated licence plate recognition systems);


	 
	 	 

	 

	 	(b)      the following products not manufactured,
produced, distributed or sold by the Company at
the Completion Date (but which the Seller
acknowledges the Buyer may wish the Company to
manufacture produce and/or sell during the
subsistence of the covenants in clause 11) being
red light traffic cameras, general surveillance
cameras, facial recognition processing products,








 









 






	 	 	 
	 

	 	speed detection enforcement cameras and police
vehicle mounted cameras and all related software;
and


	 
	 	 

	 

	 	(c)      any other products which are of a type similar
to or competing with any of the products referred
to in paragraphs (a) and/or (b) above;


	 
	 	 

	“Restricted Services”:

	 	(a)      all services which are supplied by the Company
at the Completion Date relating to the supply of
products which are manufactured, produced,
distributed or sold by the Company at the
Completion Date (including automated licence plate
recognition systems);


	 
	 	 

	 

	 	(b)      the following services not provided by the
Company at the Completion Date (but which the
Seller acknowledges the Buyer may wish the Company
to manufacture produce and/or sell during the
subsistence of the covenants in clause 11) being
those that relate to red light traffic cameras,
general surveillance cameras, facial recognition
processing products, speed detection enforcement
cameras, police vehicle mounted cameras and remote
construction zone speed enforcement back office
procedures and all related software services;


	 
	 

	 	and
any other services which are of a type similar to
or competing with any of the services referred to
in paragraphs (a) and/or (b) above;


	 
	 	 

	“Sale Shares”

	 	the 5,000,000 A ordinary Shares of 1p each in the
capital of the Company (the “A Shares”) as
referred to in schedule 3;

	 
	 	 

	“Scheme”

	 	the Company’s defined contributions pension scheme
or arrangements;

	 
	 	 

	“Security Interest”

	 	a mortgage, lien, pledge, charge (fixed or
floating), assignment by way of security,
hypothecation or other security interest (or an
agreement or commitment to create any of them) but
excluding liens arising by operation of law,
including a banker’s lien;

	 
	 	 

	“Seller Loans”

	 	loans or advances made by the Company to the
Seller and/or any person connected to him whether
or not outstanding at Completion;

	 
	 	 

	“Seller’s English Solicitors”

	 	Wilsons Solicitors LLP of Steynings House,
Summerlock Approach, Salisbury, Wiltshire, SP2
7RJ;

	 
	 	 

	“set off”

	 	in relation to an Accounts Relief, the set off of
the Relief shown or taken into account in the Next
Accounts which is equivalent to the Accounts
Relief;







 









 






	 	 	 
	“subsidiary”

	 	means a subsidiary as defined by sections 736 and
736A CA 1985 or a subsidiary undertaking as
defined by section 258 CA 1985;

	 
	 	 

	“Software”

	 	any and all computer programs in both source and
object code form, including all modules, routines
and sub-routines thereof and all source and other
preparatory materials relating thereto, including
user requirements, functional specifications and
programming specifications, ideas, principles,
programming languages, algorithms, flow charts,
logic, logic diagrams, orthographic
representations, file structures, coding sheets,
coding and including any manuals or other
documentation relating thereto and computer
generated works;

	 
	 	 

	“Tax”

	 	(a)      all forms of taxes, duties, imposts and levies
in the nature of taxes whenever created or imposed
and whether of the United Kingdom or elsewhere
including corporation tax, advance corporation
tax, income tax, any tax or amount equivalent to
tax required to be deducted or withheld from or
accounted for in respect of any payment, capital
gains tax, any payment under section 601(2) ICTA
1988, inheritance tax, value added tax, landfill
tax, stamp duty, stamp duty land tax, stamp duty
reserve tax, general or business rates, customs &
excise duties, national insurance, social security
or similar contributions, and any other taxes
levies charges or imposts similar to or
corresponding with or replaced by any of the
above;


	 
	 	 

	 

	 	(b)      all penalties fines charges surcharges and
interest in relation to tax within paragraph (a)
or to any return or information required to be
provided for the purposes of any such tax; and


	 
	 	 

	 

	 	(c)      all costs and expenses incurred in calculating
and dealing with any such tax;


	 
	 	 

	“Tax Authority”

	 	HM Revenue & Customs, the Inland Revenue, HM
Customs & Excise or other Relevant Authority
(whether within or outside the United Kingdom)
involved in the assessment, collection or
administration of Tax;

	 
	 	 

	“Tax Claim”

	 	any notice demand assessment letter or other
document issued or action taken by or on behalf of
any Tax Authority (whether before, on or after the
date of this agreement) from which it appears that
a Tax Liability is to be or may come to be imposed
on the Company or that the Company is liable or is
sought to be made liable to make any payment or
increased or further payment to that Tax Authority
or is denied or is sought to be denied any Relief
(in whole or in part);







 









 






	 	 	 
	“Tax Covenant”

	 	the covenant by the Seller contained in schedule 8;

	 
	 	 

	“Tax Legislation”

	 	any enactment, law or regulation providing for the
imposition of Tax;

	 
	 	 

	“Tax Liability”

	 	a liability to make an actual payment of, or of an
amount in respect of, Tax (whether or not that
liability is also or alternatively a liability of,
or chargeable against or attributable to, any
other person and whether or not the Company shall
or may have a right of recovery or reimbursement
against any other person) and includes the matters
referred to in clause 1.8;

	 
	 	 

	“Tax Warranties”

	 	the Warranties contained in part 2 of schedule 4;

	 
	 	 

	“TCGA 1992”

	 	the Taxation of Chargeable Gains Act 1992;

	 
	 	 

	“Third Party Software”

	 	any Software used by the Company the Intellectual
Property Rights in which are owned by a third
party;

	 
	 	 

	“Total Retention”

	 	the sum of £4,000,000 being the aggregate of the
UK Retention and the US Retention to be deposited
with the Escrow Agent and held pursuant to the
terms of the Escrow Agreement;

	 
	 	 

	“Trade Marks”

	 	all trade or service mark applications or
registered trade or service marks, registered
protected designations of origin, registered
protected geographic origins, refilings, renewals
or reissues thereof, unregistered trade or service
marks, names, trading styles (including without
limitation PIPS, devices, logos (including the
logo used on the Company’s letterhead) get up,
company names and domain names (including without
limitation the Domain Names) and telephone numbers
in each case with any and all associated goodwill
and all rights or forms of protection of a similar
or analogous nature including rights which protect
goodwill whether arising or granted under the law
of England or of any other jurisdiction;

	 
	 	 

	“UK Earn Out Figure”

	 	shall have the same meaning as in the Joint Issues
Agreement;

	 
	 	 

	“UK GAAP”

	 	United Kingdom generally accepted accounting
practices, including the requirements of the
Companies Act 1985, Financial Reporting Standards,
Statements of Standard Accounting Practice and
Urgent Issues Task Force abstracts in force at the
Completion Date;

	 
	 	 

	“UK Retention”

	 	the sum of £3,571,600;

	 
	 	 

	“US Earn Out Figure”

	 	shall have the same meaning as in the Joint Issues
Agreement;

	 
	 	 

	“US Retention”

	 	the sum of £428,400;







 









 







	 	 	 
	VATA 1994”

	 	the Value Added Tax Act 1994; and

	 
	 	 

	“Warranties”

	 	the warranties representations and undertakings
contained in clause 9 and schedule 4.

	 
	 	 

	“worker”

	 	shall have the meaning ascribed to it in the ERA
Section 230 and the Working Time Regulations 1998
regulation 2(1)








	 	1.2.	 	In this agreement unless the context otherwise requires:







	 	1.2.1.	 	references to a clause or schedule are to a clause of, or a schedule to, this
agreement, references to this agreement include its schedules and references in a
schedule or part of a schedule to a paragraph are to a paragraph of that schedule
or that part of that schedule;

	 
	 	1.2.2.	 	references to this agreement or any other document or to any specified
provision in any of them are to this agreement, that document or that provision
as in force for the time being and as amended from time to time in accordance
with their terms or, as the case may be, with the agreement of the relevant
parties;

	 
	 	1.2.3.	 	words importing the singular include the plural and vice versa, words importing
a gender include every gender and references to persons include corporations,
partnerships and other unincorporated associations or bodies of persons;

	 
	 	1.2.4.	 	the words and phrases “other”, “including” and “in particular” shall not limit
the generality of any preceding words or be construed as being limited to the
same class as the preceding words where a wider construction is possible;

	 
	 	1.2.5.	 	a person is connected with another person if he is so connected within the
meaning of section 839 ICTA 1988;

	 
	 	1.2.6.	 	a reference to any enactment shall include:







	 	1.2.6.1.	 	any provision which it has re-enacted (with or without
modification) or modified; and

	 
	 	1.2.6.2.	 	that enactment as re-enacted, replaced or modified from time to
time, whether before, on or after the date of this agreement;







	 	 	 	but any such changes taking effect after the date of this agreement shall
not impose any additional liability or obligation on any of the parties or
(except as specified in clause 18.1) deprive any of them of any right, in
each case under this agreement;

	 
	 	1.2.7.	 	references to books, records or other information include paper, electronically
or magnetically stored data, film, microfilm, and information in any other form
and references to “writing” or “written” include faxes and any other method of
reproducing words in a legible and non-transitory form (excluding email and SMS
messaging) and





 









 






	 	1.2.8.	 	words and expressions defined in the Companies Acts shall have the same meaning
in this agreement unless the context otherwise requires.







	 	1.3.	 	The contents table and the descriptive headings to clauses, schedules and
paragraphs in this agreement (and notes in brackets describing the subject matter of any
enactment) are inserted for convenience only, have no legal effect and shall be ignored
in interpreting this agreement.

	 
	 	1.4.	 	Where any party gives in this agreement any indemnity in favour of any other
party, the obligation of the indemnifying party shall be to make the relevant payment
forthwith in full on demand and without any set-off, counterclaim or other deduction.

	 
	 	1.5.	 	References in this agreement to any English legal term for any action, remedy,
method of judicial proceeding, legal document, legal status, court, official or any
legal concept, state of affairs or thing shall in respect of any jurisdiction other than
England be deemed to include whatever most closely approximates in that jurisdiction to
the English legal term.

	 
	 	1.6.	 	References in this agreement to times of day are (unless otherwise specified) to
London time.

	 
	 	1.7.	 	Reference to an Event occurring on or before Completion shall be deemed to
include:







	 	1.7.1.	 	any combination of two or more Events all of which occurred on or before
Completion;

	 
	 	1.7.2.	 	any combination of two or more Events only the first or some of which occurred
on or before Completion, except that for the purposes of this clause 1.7, there
shall be disregarded any Event which occurred before Completion in the ordinary
course of business of the Company; and

	 
	 	1.7.3.	 	any Event which is treated or deemed to occur on or before Completion for the
purposes of any Tax.







	 	1.8.	 	For the purposes of this agreement, where any document relating to the Company is
not (or is not properly) stamped, the stamp duty (together with any accrued interest
and/ or penalties) required to be paid so that the relevant document is fully and
properly stamped shall, notwithstanding that the Company may be under no legal
obligation to stamp that document, be treated as a liability of the Company arising on
the date when the document was executed and “Tax Liability” shall be construed
accordingly.

	 
	 	1.9.	 	References to “indemnify” and “indemnifying” any person against any circumstance
include indemnifying and keeping that person harmless from all actions, claims and
proceedings from time to time made against that person and all loss or damage and all
payments, costs or expenses made or incurred by that person as a consequence of or which
would not have arisen but for that circumstance.

	 
	 	1.10.	 	As the Buyer comprises more than one person, each reference in this agreement to
the Buyer shall be a reference to each of them and all obligations, indemnities,
warranties, representations and covenants are given to each of them as separate and
independent obligations, indemnities, warranties, representations and





 









 






	 	 	 	covenants which shall be enforceable by each of them accordingly; for the avoidance of
doubt their liability under this agreement shall be several.







	2	 	Sale of the Sale Shares







	 	2.1.	 	The Seller shall sell Legal and Beneficial Title to the Sale Shares to the Buyer
(in the proportion notified to the Seller at Completion) and the Buyer (relying, as the
Seller acknowledges, on the Warranties and Replies), shall purchase the Sale Shares (in
such proportions) free from Encumbrances.

	 
	 	2.2.	 	The Seller covenants with the Buyer that:







	 	2.2.1.	 	the Seller has the right to dispose of the Sale Shares on the terms set out in
this agreement;

	 
	 	2.2.2.	 	the Seller shall at his own cost do everything possible to give the Buyer full
and unrestricted legal and beneficial title to the Sale Shares; and

	 
	 	2.2.3.	 	the Sale Shares shall be sold and transferred free from Encumbrances including
any which:







	 	2.2.3.1.	 	the Seller does not know or could not reasonably be expected to
know about; or

	 
	 	2.2.3.2.	 	at the time of transfer is within the actual knowledge, or is a
necessary consequence of facts then within the actual knowledge, of
the Buyer;







and the transfer of the Sale Shares to the Buyer shall be deemed to include
expressly and be made subject to all the above provisions of this clause
2.2.




	 	2.3.	 	Title to and beneficial ownership of the Sale Shares shall pass on Completion and
the Sale Shares shall be sold and purchased together with all rights and benefits
attached or accruing to them at Completion (including the right to receive any
dividends, distributions or returns of capital declared, paid or made by the Company on
or after Completion).

	 
	 	2.4.	 	The Buyer shall not be obliged to complete the purchase of any of the Sale Shares
unless the purchase of all the Sale Shares is completed simultaneously.

	 
	 	2.5.	 	In consideration of the Buyer entering into this agreement the Seller:-







	 	2.5.1.	 	confirms that neither he nor any person connected with him has any claim of any
kind (actual or contingent) against the Company on any account; and

	 
	 	2.5.2.	 	waives and shall procure that each person connected with him shall waive with
effect from Completion any claim (actual or contingent) which any of them may
have against the Company.







	 	2.6.	 	The provisions of s 6(2) of the Law of Property (Miscellaneous Provisions) Act
1994 are hereby excluded.

	 
	 	2.7.	 	The Seller waives any pre-emption rights he may have (howsoever arising) in
relation to the sale of the B Shares to the Buyer.





 









 












	3	 	Conditions Precedent







	 	3.1	 	The obligations of the parties (other than those contained in this clause 3 and
in clauses 12 to 23 inclusive), which are unconditional) are conditional on the
satisfaction or waiver of the Conditions on or before Completion (so that beneficial
ownership in the Sale Shares shall not pass unless and until the Conditions are
satisfied or waived as provided below) and the obligations of the parties under clause
8 are conditional on Completion taking place.

	 
	 	3.2	 	The Buyer reserves the right unilaterally to waive wholly or in part and
conditionally or otherwise (to such extent as it may think fit) all or any of
Conditions 5 and 6. The Seller reserves the right unilaterally to waive wholly or in
part and conditionally or otherwise (to such extent as he may think fit) Condition 7.
The Buyer and the Seller may waive wholly or in part and conditionally or otherwise (to
such extent they may agree) all or any of the Conditions.

	 
	 	3.3	 	Any waiver by the Buyer and by the Seller under clause 3.2 shall be effected
by service of written notice on the other.

	 
	 	3.4	 	The Seller and the Buyer agree that all requests and enquiries in relation to
this agreement from any Relevant Authority shall be dealt with by the Seller and the
Buyer in consultation with each other and the Seller and the Buyer shall promptly
co-operate with and provide all necessary information and assistance reasonably
required by any Relevant Authority on being requested to do so by the other.







	4	 	Not used

	 
	5	 	Consideration







	 	5.1.	 	The consideration for the sale of the Sale Shares shall be:







	 	5.1.1.	 	the sum of £41,880,531;

	 
	 	5.1.2.	 	the payment in accordance with clause 6 of any Adjustment Amount (if and
to the extent payable to the Seller);

	 
	 	5.1.3.	 	the payment in accordance with Article 5 (Earn out) of the Joint Issues
Agreement of that part of the UK Earn Out Figure attributable to the Seller
(being 89.9016% of the relevant figure) (if and to the extent such sum is
payable to the Seller); and

	 
	 	5.1.4.	 	the payment in accordance with the Escrow Agreement of that part of the
UK Retention attributable to the Seller (being 89.9016% of the relevant
figure) (if and to the extent such sum payable to the Seller.







	 	5.2.	 	The Buyer shall discharge its obligation (if any) to pay the sums due to the
Seller in respect of his entitlement to part of the UK Earn Out Figure under clause
5.1.3 by procuring the payment of such sum by Federal Signal in accordance with the
terms of the Joint Issues Agreement and shall discharge its obligation (if any) to pay
sums due to the Seller under clause 5.1.4 by procuring the payment of such sum by the
Escrow Agent in accordance with the terms of the Escrow Agreement.





 









 






	 	5.3.	 	Payment of Consideration shall be made to the Nominated Account and the
Seller’s Solicitors are authorised to receive any such payment, their receipt shall
constitute a good discharge to the Buyer in respect of it and the Buyer shall have no
obligation as to the distribution of any sum so paid to the Seller.

	 
	 	5.4.	 	Without limitation to clause 5.3 the payment to the Nominated Account of the
sums due to the Seller in respect of his proportion of the UK Earn Out Figure under the
Joint Issues Agreement and his proportion of the UK Retention (to the extent provided
for in the Escrow Agreement) and the receipt of the Seller’s Solicitors for such sums
shall constitute a good discharge to the Buyer of all liability to make payment of
entitlements of the Seller to any amount of the UK Earn Out Figure and (as the case may
require) any amount of the UK Retention.







	6	 	Adjustment of Consideration







	 	6.1.	 	If the Net Asset Value is:







	 	6.1.1.	 	a positive sum which is greater than the Base NAV, the Buyer shall pay to
the Seller in accordance with clause 6.2 a sum equal to the difference;

	 
	 	6.1.2.	 	a positive sum which is less than Base NAV the Seller shall pay to the
Buyer in accordance with clause 6.2 a sum equal to the difference;

	 
	 	6.1.3.	 	a negative sum, the Seller shall pay to the Buyer in accordance with
clause 6.2 a sum equal to the aggregate of the Base NAV and the amount by
which the Net Asset Value is less than zero; or

	 
	 	6.1.4.	 	equal to the Base NAV no payment or further payment shall be made under
this clause 6.1;







	 	6.2.	 	Every cash sum payable under clause 6.1 shall be paid:







	 	6.2.1.	 	within five business days after the date of determination of the NAV;

	 
	 	6.2.2.	 	together with interest on it at the rate of 2 per cent above the base
lending rate of Barclays Bank plc for the time being in force which shall
accrue from day to day and shall be calculated on the basis of a year of 365
days from the Completion Date up to and including the date of payment; and

	 
	 	6.2.3.	 	by electronic funds transfer:







	 	6.2.3.1.	 	(where that sum is expressed to be payable to the Seller) to
the Nominated Account; or

	 
	 	6.2.3.2.	 	(where that sum is expressed to be payable to the Buyer) to the
account number 01182698 at Lloyds TSB Bank plc (Grey Street,
Newcastle upon Tyne Branch, sort code 30-93-71) of the Buyer’s
English Solicitors.





 









 












	 	6.3.	 	The parties shall procure that as soon as practicable following the Completion
Date, and in any event not later than 30 business days after Completion, a draft of the
Completion Accounts (the “draft Completion Accounts”) shall be prepared by the Company
or (at the option of the Company) by the auditors in accordance with clause 6.4 and
delivered simultaneously to the Buyer and the Seller.

	 
	 	6.4.	 	Subject to the specific accounting treatments set out in schedule 9 which shall
take priority over the requirements set out below the Completion Accounts shall (in
order of priority):







	 	6.4.1.	 	apply and adopt the same bases and policies of accounting as were applied
or adopted for the purposes of the Accounts to the extent consistent with UK
GAAP; and

	 
	 	6.4.2.	 	apply UK GAAP.







	 	6.5.	 	As soon as practicable after delivery of the draft Completion Accounts in
accordance with clause 6.3, and in any event within 30 business days after their delivery
(or such longer period as may be agreed in writing between the Buyer and the Seller) (the
“Review Period”), the Seller and the Buyer shall review the draft Completion Accounts and
endeavour to agree by negotiation what adjustments (if any) need to be made to them in
order for them to comply with clause 6.4. If the Seller or the Buyer dispute the
preparation of the Completion Accounts and the computation of the NAV he or it shall
within the Review Period promptly give written notice to the other of the facts and
matters in dispute together with details of the grounds on which such matter is disputed.
If:







	 	6.5.1.	 	the Seller and the Buyer agree that no adjustments need to be made to the
draft Completion Accounts; or

	 
	 	6.5.2.	 	the Seller and the Buyer agree on the adjustments to be made to the draft
Completion Accounts in order for them to comply with clause 6.4;







they shall:




	 	6.5.2.1.	 	(in the circumstances mentioned in clause 6.5.2 above) jointly
incorporate into, and reflect any such adjustments in, the draft
Completion Accounts;

	 
	 	6.5.2.2.	 	confirm in writing that they have carried out such work as they
consider necessary under clause 6.4 and that in their opinion the
Completion Accounts have been drawn up in accordance with the
provisions of clause 6.5 and comply with those provisions; and

	 
	 	6.5.2.3.	 	confirm in writing the amount of the NAV on the basis of those
Completion Accounts;







and the Completion Accounts and the amount of the NAV as so confirmed in
writing shall be the Completion Accounts and the NAV respectively for the
purpose of calculating the sum (if any) due under clause 6.1, shall in the
absence of manifest error be final and binding on the parties and shall not
be subject to question on any ground and



 









 







the date of that written confirmation shall for all purposes of this
agreement be the date of determination of the NAV.




	 	6.6.	 	If the Seller and the Buyer have not resolved any matter(s) in dispute and have not
provided the written confirmations referred to in clause 6.5.2 within the Review Period,
then the relevant matter(s) shall be in dispute between the Seller and the Buyer and shall
immediately be referred to such firm of independent chartered accountants as the Seller and
the Buyer may agree within 15 business days of a request by either of them to the other or,
failing agreement within that time, as the President for the time being of the Institute of
Chartered Accountants in England and Wales (or any person for the time being performing the
functions of that official) may nominate on the application of the Seller or the Buyer (the
“Independent Accountants”) for determination on the following basis:







	 	6.6.1.	 	the Independent Accountants shall be instructed to notify the Seller and the
Buyer of their determination of any such matter within 30 business days of that
referral (or such longer period as may be agreed in writing between the Buyer
and the Seller);

	 
	 	6.6.2.	 	the Seller and the Buyer may make written submissions to the Independent
Accountants, but subject to those rights the Independent Accountants shall have
power to determine the procedure to be followed in relation to their
determination;

	 
	 	6.6.3.	 	in making any such submissions the Seller and the Buyer shall state their
respective best estimates of any monetary amounts referred for determination;

	 
	 	6.6.4.	 	in making their determination the Independent Accountants shall act as experts
and not as arbitrators, their decisions as to any matter referred to them for
determination shall in the absence of manifest error be final and binding on the
parties and shall not be subject to question on any ground; and

	 
	 	6.6.5.	 	the fees and expenses of the Independent Accountants shall be borne and paid
as the Independent Accountants shall direct (or in the absence of any such
direction, as to half by the Seller and as to half by the Buyer).







	 	6.7.	 	Following any agreement between the Seller and the Buyer in accordance with clause 6.6
or any determination by the Independent Accountants in accordance with clause 6.7, the
parties shall:







	 	6.7.1.	 	jointly incorporate into and reflect in the draft Completion Accounts the
matters agreed between the Seller and the Buyer and/ or determined by the
Independent Accountants; and

	 
	 	6.7.2.	 	provide written confirmation of those adjusted accounts in the terms set out in
paragraphs 6.5.2.2 and 6.5.2.3 of clause 6.5;







and the Completion Accounts and the amount of the NAV as so confirmed in writing
shall be the Completion Accounts and the NAV respectively for the purpose of
calculating the sum (if any) due under clause 6.1, shall in the absence of manifest
error be final and binding on the parties and shall not be subject to question on
any ground and the date of that written confirmation



 









 







shall for all purposes of this agreement be the date of determination of the NAV.




	 	6.8.	 	Until the NAV shall have been agreed or determined the Seller and the Buyer shall
respectively:







	 	6.8.1.	 	give or procure that the Seller or the Buyer and the Independent Accountants
(as the case may require) are given access at all reasonable times on prior
appointment during normal working hours on business days to all relevant books
and records which are in the possession or under the control of the Seller, the
Company or the Buyer (as the case may be); and

	 
	 	6.8.2.	 	generally provide the Seller or the Buyer and the Independent Accountants (as
the case may require) with such other information and assistance as they may
reasonably require (including access to and assistance at reasonable times on
prior appointment during normal working hours on business days from personnel
employed by the Seller, the Company or the Buyer, as the case may be), in
relation to the review, agreement or determination of the Completion Accounts and
the determination of the NAV.







	 	6.9.	 	The fees and expenses of the auditors in respect of the preparation of the Completion
Accounts as provided in clause 6.3 shall be borne equally by the Buyer and the Seller who
shall indemnify each other accordingly and the cost to be borne by the Seller shall be
satisfied by being provided in the Completion Accounts.

	 
	 	6.10.	 	The Buyer and the Seller shall execute any documents (including any terms of
engagement or limitations on liability), provide any information and take any steps which,
in each case, may reasonably be required by the Auditors or, as the case may be, the
Independent Accountants in order to enable them to complete the work required of them by
this clause 6.

	 
	 	6.11.	 	Nothing in this agreement shall prevent the Buyer or the Seller from obtaining, at
their own expense, professional advice in relation to any matter arising in connection with
the agreement or determination of the Completion Accounts and the NAV.

	 
	 	6.12.	 	The preparation of the Completion Accounts and the agreement and/or determination of
the NAV shall be without prejudice to any claim which the Buyer might have against the
Seller under or in respect of this agreement and/or the Tax Covenant but the Seller shall
not be liable more than once in respect of the same loss.







	7	 	Completion







	 	7.1.	 	Completion shall take place at such place as the parties may agree on the Completion
Date when all (but, subject to clauses 7.3 and 7.4, not part only unless the parties shall
so agree) of the business set out in schedule 6 shall be transacted and the parties agree
the matters contained in schedule 6.

	 
	 	7.2.	 	Following compliance with the provisions of schedule 6, the Buyer shall:







	 	7.2.1.	 	pay by electronic funds transfer to the Nominated Account the sum of
£41,880,531;





 









 






	 	7.2.2.	 	pay to the Escrow Agent (as defined in the Joint Issues Agreement) by
electronic funds transfer the sum of £3,210,944 (being the Seller’s proportion of
the UK Retention) to be deposited with the Escrow Agent and held pursuant to the
terms of the Escrow Agreement.







	8	 	Post-Completion Matters and Further Assurances







	 	8.1.	 	The Seller declares that for so long as he remains the registered holder of any of the
Sale Shares after Completion he shall:







	 	8.1.1.	 	hold the Sale Shares and the dividends and other distributions of profits or
surplus or other assets declared, paid or made in respect of them after Completion
and all rights arising out of or in connection with them in trust for the Buyer and
any successors in title to the Buyer; and

	 
	 	8.1.2.	 	deal with and dispose of the Sale Shares and all such dividends, distributions
and rights as are described in clause 8.1.1 as the Buyer or any such successor may
direct.







	 	8.2.	 	The Seller appoints the Buyer by way of security as his lawful attorney for the purpose
of receiving notices of and attending and voting at all meetings of the members of the
Company from Completion to the day on which the Buyer or its nominee is entered in the
register of members of the Company as the holder of the Sale Shares and for that purpose
the Seller authorises:







	 	8.2.1.	 	the Company to send any notices or other communications in respect of his holding
of Sale Shares to the Buyer; and

	 
	 	8.2.2.	 	the Buyer to complete in such manner as it thinks fit and to return proxy forms,
consents to short notice and any other document required to be signed by him in his
capacity as a member.

	 
	 	 	 	The Buyer shall not use its powers under this clause to re register the Company
as an unlimited company under CA 1985 Section 49.







	 	8.3.	 	As soon as reasonably practicable following Completion the Seller shall (and shall
procure that any relevant third party shall) send to the Buyer all documents,
correspondence, memoranda, files and other records to which the Company is entitled and
which are not located at the Property or delivered at Completion (whether or not referred
to in schedule 6).

	 
	 	8.4.	 	The Seller covenants with the Buyer that the Seller shall pay to the Company an
amount equal to the aggregate amount of all claims (if any) made against the Company by
any director or secretary or employee or consultant of the Company required to resign
under this agreement on Completion and arising from that resignation together with an
amount equal to the aggregate of all costs, charges and expenses incurred by the Company
arising from any such claim.

	 
	 	8.5.	 	The Seller shall execute or, so far as is within his power, procure that any
relevant third party shall execute, all such documents and/ or do or, so far as he is
able, procure the doing of such acts and things as the Buyer shall after Completion
reasonably require in order to give effect to this agreement and any documents entered
into under it and to give to the Buyer the full benefit of all the provisions of this
agreement.





 









 






	 	8.6.	 	On Completion the Buyer shall procure that the Company shall pay the Istenes Sum.
For the avoidance of doubt, the Istenes Sum shall be deemed to have been paid by the
Company prior to Completion to the intent that it does not form part of the Company’s
cash balances at Completion.

	 
	 	8.7.	 	The Seller shall on Completion procure the release of the Company from any
guarantee or like obligation given by the Company in respect of any obligations owed by a
third party (including the Seller) and the Seller shall indemnify the Buyer and the
Company in respect of all liability arising after Completion in respect of it.







	9	 	Warranties







	 	9.1.	 	In consideration of the Buyer entering into this agreement the Seller warrants to
the Buyer:







	 	9.1.1.	 	(subject to clause 9.3) in the terms set out in schedule 4;

	 
	 	9.1.2.	 	that any statement in schedule 4 which is qualified as being made “so far as
the Seller is aware” or “to the best of the knowledge, information and belief of
the Seller” has been so qualified after due diligent and careful enquiries by
the Seller (including enquiry of the executive directors and company secretary,
of the Company and the accountants, solicitors, patent agents, trade mark agents
and tax advisers who act, or at the relevant time acted, for the Company) and
that the Seller has used all reasonable endeavours to ensure that all given in
that statement is accurate in all material respects;







	 	9.2	 	The Seller shall indemnify the Buyer against any loss, claim, demand or damage
(including costs) arising from breach of the Warranties in paragraphs 2.1 and 2.2 of
schedule 4 or of the covenants in clause 2.2 or 2.5.

	 
	 	9.3	 	The indemnity set out in clause 9.2 shall not be subject to the limitations set out
in Article 4 of the Joint Issues Agreement or schedule 5 of this agreement and shall not
be qualified by anything contained in or referred to in the Disclosure Letter.

	 
	 	9.4	 	Except as provided in clause 9.3, the Warranties are qualified to the extent, but
only to the extent, of those matters fairly disclosed in the Disclosure Letter.

	 
	 	9.5	 	Each of the paragraphs in schedule 4:







	 	9.5.1	 	shall be construed as a separate and independent warranty; and

	 
	 	9.5.2	 	except as expressly provided otherwise in this agreement,
shall not be limited by reference to any other paragraph in schedule 4 or by
any other provision of any Agreed Document;







and the Buyer shall have a separate claim and right of action in respect of every
breach of Warranty.




	 	9.6	 	All claims by the Buyer for damages in respect of any breach of Warranty shall
(subject to clause 9.4) be subject to the provisions for the protection of the Seller in
schedule 5 of this agreement and Article 4 (Indemnification limitations; Escrowed funds)
of the Joint Issues Agreement save in the case of fraud, deceit or other dishonesty, or
intentional misstatement or intentional omission.





 









 






	 	9.7	 	The Warranties shall not be extinguished or affected by Completion.

	 
	 	9.8	 	The Seller agrees with the Buyer (but without prejudice to the liability of the
Seller under the Warranties) :







	 	9.8.1	 	that the giving by the Company and/ or any of its
directors, employees, agents or advisers to the Seller or its agents or
advisers of any information or opinion in connection with the Warranties or
the Agreed Documents or otherwise in relation to the business or affairs of
the Company or in connection with the negotiation and preparation of the
Agreed Documents shall not be deemed a representation, warranty or guarantee
to any party of the accuracy of any such information or opinion;

	 
	 	9.8.2	 	to waive any right or claim which he may have against the
Company and/ or any of its directors, employees agents or advisers for any
error, omission or misrepresentation in any such information or opinion; and

	 
	 	9.8.3	 	that any such right or claim shall not constitute a defence
to any claim by the Buyer under or in relation to the Agreed Documents
(including the Warranties).







	 	9.9	 	Notwithstanding any other term of this agreement, except in the case of a
fraudulent misrepresentation, the Seller shall not in relation to the sale hereunder of
the Sale Shares or this agreement be liable in respect of any representations or
warranties or similar assurances which are not contained and expressly given or assumed
by him in this agreement or the Disclosure Letter or any other Agreed Document.

	 
	 	9.10	 	If the effect of a breach of Warranty is that:-







	 	9.10.1	 	any asset of the Company is extinguished or is worth less than its value
would have been if the breach of Warranty had not occurred; or

	 
	 	9.10.2	 	the Company is or will be under a liability or an increased or substituted
liability which would not have existed if the breach of Warranty had not
occurred;







the Buyer may by notice in writing given to the Seller at any time after
Completion require the Seller to make good the resultant loss suffered or incurred
by the Buyer or the Company either (at the Buyer’s option) by




	 	(a)	 	the payment in cash to the Buyer of an amount equal to the
amount by which in consequence of the breach of Warranty the value of the
Sale Shares falls short of the value they would have had if the breach of
Warranty had not occurred; or

	 
	 	(b)	 	the payment in cash to the Buyer of the amount provided in
clause 9.11.







	 	9.11	 	The amount referred to in clause 9.10(b) in relation to the alternative measure
of damages is:







	 	9.11.1	 	if the effect of the breach of Warranty is as stated in clause 9.10.1, the
amount by which the value of the assets of the Company falls short of





 









 






	 	 	 	the value they would have had if the breach of Warranty had not occurred;
or

	 
	 	9.11.2	 	if the effect of the breach of Warranty is as stated in clause 9.10.2, the
amount by which the liabilities of the Company exceed what would have been
their amount if the breach of Warranty had not occurred;







	 	9.12	 	The amount of the loss suffered by the Buyer in consequence of any breach of
Warranty as measured by any of the payments which the Buyer is entitled to require to
be made under clause 9.11 shall be deemed to have been within the contemplation of the
parties on entering into this agreement.

	 
	 	9.13	 	The rights and remedies of the Buyer in respect of any breach of the Warranties
shall not be affected or limited, and the amount recoverable shall not be reduced, by
any investigation made by it or on its behalf into the affairs of the Company SAVE THAT
if such investigation gives the Buyer (in the persons only of John Gruber, Paul Henry,
Bryan Boettger, Mark Cassens, Michael Wons, and Guy Wernet) actual knowledge of the
relevant facts and circumstances giving rise to any claim under the Warranties then to
that extent the Buyer shall not be entitled to make recovery. For the avoidance of
doubt such rights remedies and the amounts recoverable shall not be affected or limited
on the grounds that the Buyer may have had constructive imputed or implied knowledge of
the matter giving rise to the claim.







	10	 	Tax Covenant

	 
	 	 	The Seller covenants with the Buyer in the terms of the Tax Covenant, which shall take
effect from Completion.

	 
	11	 	Restrictive Covenants







	 	11.1	 	In order to protect the value of the Sale Shares and the value and utility
of the Business Information and goodwill of the Company the Seller covenants with
each of the Company and the Buyer that without the prior consent in writing of the
Buyer (such consent not to be unreasonably withheld) he shall not directly or
indirectly, whether by himself, or by his employees or agents or any Family Member
and whether on his own behalf or on behalf of any other person, firm or company or by
an entity controlled by him or any Family Member or otherwise, for the period
specified in clause 11.2:







	 	11.1.1	 	carry on, be employed or otherwise engaged, concerned or interested in any
capacity (whether or not for reward) in, provide any technical, commercial or
professional advice to, or assist in any manner any business which is or is
about to be involved in the manufacture, production, distribution or sale of
the Restricted Products or any of them or the supply of the Restricted Services
or any of them in the Prohibited Area (but not so as to preclude the holding of
less than 5% of any class of shares or debentures listed on any recognised
stock exchange);

	 
	 	11.1.2	 	in relation to the Restricted Products or any of them or the Restricted
Services or any of them, solicit or canvass, accept orders from or otherwise
deal with any person who:







	 	11.1.2.1	 	was a customer of the Company at any time during the two years
prior to the Completion Date; or





 









 






	 	11.1.2.2	 	at the Completion Date was in the process of negotiating to do
business with the Company;







	 	11.1.3	 	solicit or entice away or attempt to solicit or entice away from the Company
Peter Istenes and/or Compet ’98 or any other director, manager, technical
expert or person earning or invoicing more than £50,000 per annum (gross)
employed or otherwise engaged by the Company under a contract for services with
it on the Completion Date, whether or not that person would commit any breach
of any employment contract or contract for services by leaving the Company;

	 
	 	11.1.4	 	(subject to clause 11.5 employ or otherwise engage Peter Istenes or Compet
’98 or any other person who at the Completion Date or during the preceding 24
months was employed or otherwise engaged by the Company and who as a result is
or is reasonably likely to be in possession of any Business Information or
Know-How belonging to the Company;

	 
	 	11.1.5	 	deliberately and knowingly do or omit to do any act or thing with the
intention of prejudicing or diminishing the value of the Company’s business to
a material extent;







	 	11.2	 	The covenants in clause 11.1 shall apply for the period of 3 years from the
Completion Date.

	 
	 	11.3	 	The Seller covenants with the Buyer that he shall not and shall procure that no
entity controlled by him (and shall use all reasonable endeavours to procure that no
Family Member) shall at any time after Completion directly or indirectly, whether by
himself or itself, or by his or its employees or agents or otherwise:







	 	11.3.1	 	carry on any trade or business (or be associated with any person involved in
any trade or business) using (a) the name PIPS TECHNOLOGY or any name
incorporating the word “PIPS” or any similar name and/or (b) the Domain Names
(or any similar domain names) and/or (c) the Trade Marks and/or (d) any other
trade mark or service mark, trade name, design trading style, domain name or
logo (whether registered or not) used in the business of the Company and/or any
other name logo trade or service mark design trading style or domain name which
is or might be confusingly similar thereto;

	 
	 	11.3.2	 	in the course of carrying on any trade or business, claim, represent or
otherwise indicate any ongoing association with the Company or, for the purpose
of obtaining or retaining any business or custom, claim, represent or otherwise
indicate any past association with the Company;

	 
	 	11.3.3	 	interfere or seek to interfere with, or with the continuance of, the supply
of goods and services to or by the Company (or the terms of any such supply);
or

	 
	 	11.3.4	 	(subject to clause 11.5) without the consent of the Company or the Buyer use,
whether on his or its own behalf or on behalf of any third party, or disclose
to any third party, any Business Information.







	 	11.4	 	Subject to clause 11.5 the Seller covenants with the Company and (as a separate
and independent covenant) with the Buyer that, if the Company shall





 









 






	 	 	 	have obtained any Business Information from any third party under an agreement
including any restriction on disclosure known to it, the Seller shall not and shall
procure that no entity controlled by him and no person connected with him shall at
any time without the consent of the Company or the Buyer infringe that restriction.

	 
	 	11.5	 	The restrictions in clauses 11.3.4 and 11.4 shall not apply:







	 	11.5.1	 	to any Business Information which is in or becomes part of the public domain,
other than through a breach of the obligations of confidentiality set out in
this agreement; or

	 
	 	11.5.2	 	if and to the extent only that the Seller is required to disclose Business
Information by any Official Requirement (including the regulations of any
securities exchange or other Relevant Authority to which he or any entity
controlled by him is subject).







	 	11.6	 	The Seller agrees with the Buyer that the restrictions and undertakings in
clauses 11.1 to 11.4 inclusive (on which the Seller confirms that he has received
independent legal advice):







	 	11.6.1	 	are reasonable and necessary for the protection of the value of the Sale
Shares and the Company; and

	 
	 	11.6.2	 	are integral to the terms on which the Buyer has agreed to purchase the Sale
Shares and necessary for the implementation of their purchase by the Buyer;







But if any such restriction or undertaking shall be found to be void or voidable
but would be valid and enforceable if some part or parts of the restriction or
undertaking were deleted, such restriction or undertaking shall apply with such
modification as may be necessary to make it valid and enforceable.




	 	11.7	 	The undertakings in clauses 11.1, 11.3 and 11.4 shall be construed as a
separate and independent undertakings and if one or more of the undertakings is held to
be void or unenforceable, the validity of the remaining undertakings shall not be
affected.

	 
	 	11.8	 	Without prejudice to clause 11.6, if any restriction or undertaking is found by
any court or other competent authority to be void or unenforceable the parties shall
negotiate in good faith to replace such void or unenforceable restriction or
undertaking with a valid provision which, as far as possible, has the same legal and
commercial effect as that which it replaces.

	 
	 	11.9	 	The Buyer for itself and as agent for the Company may by written notice to the
Seller vary the terms of any part of this clause as it may affect the Seller by
reducing the period during and the extent of the activities to which the commitments
are to apply or the geographical area to which the commitments relate.







	12	 	Announcements and Confidentiality







	 	12.1	 	Except as expressly required by any Official Requirement or by the UK Listing
Authority or the Panel on Takeovers and Mergers or by any other Relevant Authority, all
announcements or circulars by, for or on behalf of either party





 









 






	 	 	 	relating to any matter provided for in any Agreed Document shall be in a form
approved in writing by the parties in advance of issue.

	 
	 	12.2	 	The Seller shall (without limit in time, but subject to clause 12.3) keep and
procure to be kept secret and confidential all Confidential Information belonging to
the Buyer disclosed or obtained as a result of the discussions and negotiations leading
to the execution of, or the performance of, this agreement and shall neither use nor
disclose any such Confidential Information except for the purposes of the proper
performance of this agreement or with the prior written consent of the Buyer. Where
disclosure is made to any employee, consultant, adviser or agent, it shall be made
subject to obligations equivalent to those set out in this agreement. The Seller shall
use his best endeavours to procure that any such employee, consultant, adviser or agent
complies with each of those obligations. The Seller shall be responsible to the Buyer
in respect of any disclosure or use of any of the Buyer’s Confidential Information by a
person to whom disclosure is made. In this clause 12.2 disclosure includes disclosure
in writing or by any other means.

	 
	 	12.3	 	The obligations of confidentiality in clause 12.2 shall not extend to the
Seller in respect of any matter which the Seller can show:







	 	12.3.1	 	is in, or has become part of, the public domain other than as a result of a
breach of the obligations of confidentiality under this agreement;

	 
	 	12.3.2	 	was in the Seller’s written records prior to the date of this agreement and
not subject to any obligations as to confidentiality;

	 
	 	12.3.3	 	was independently disclosed to the Seller by a third party entitled to
disclose it; or

	 
	 	12.3.4	 	is required to be disclosed under any Official Requirement or by any
Relevant Authority.







	13	 	Specific Covenants to Pay and Miscellaneous Matters







	 	13.1.	 	The Seller covenants with the Buyer that he shall pay to the Buyer on
demand and from time to time an amount equal to all losses costs claims and
expenses (including legal and other professional fees on a full indemnity basis)
suffered or incurred by the Company and/or the Buyer arising out of or in
connection with:







	 	13.1.1.	 	each and all transactions entered into between the Seller and/or any
person connected with him and the Company and each and all of the
payments made by the Company to the Seller and/or any person connected
with him (including but without limitation any Tax Liability which would
not have arisen but for such transactions and payments) other than salary
payments and transactions in the ordinary course of business between the
Company and PIPS Inc;

	 
	 	13.1.2.	 	any failure by the Company to comply in full with all obligations
imposed by the Welfare Reform and Pensions Act 1999 and any regulations
made under it regarding facilitating access to all of its relevant
employees (as defined in the Welfare Reform and Pensions Act 1999) to a
stakeholder pension arrangement





 









 






	 	13.1.3.	 	the sale by Pearpoint Limited of its image processing business to the
Company in September 2001;

	 
	 	13.1.4.	 	the share option scheme in favour of the B Shareholders having ceased
on or before Completion to meet the qualifying conditions of an
Enterprise Management Incentive option scheme (whether by reason of the
Company ceasing to be a qualifying company or otherwise).

	 
	 	13.1.5.	 	the price paid or payable to the B Shareholders in respect of the B
Shares and the fact of any payment by the Buyer to the Seller’s English
Solicitors or delivery of the Loan Notes or any of them to the Seller’s
English Solicitors in each case in respect of any sum due under this
agreement or the Joint Issues Agreement and/or the Escrow Agreement;

	 
	 	13.1.6.	 	any determination by HMRC that the Istenes Sum is not tax deductible
for the purposes of corporation tax.







	 	13.2.	 	For the avoidance of doubt the covenants to pay set out in this clause
13 shall not be subject to the limitations set out in Article 4 of the Joint Issues
Agreement or schedule 5 of this agreement and shall not be qualified by anything
contained in or referred to in the Disclosure Letter (but without prejudice to the
provisions of clause 14.10).







	14	 	Preservation of Rights







	 	14.1	 	The Buyer may, in its discretion, in whole or in part release, compound or
compromise, or waive its rights or grant time or indulgence in respect of, any
liability to it under any Agreed Document without affecting its rights in respect of
any other liability.

	 
	 	14.2	 	If the Buyer:







	 	14.2.1	 	grants the Seller any indulgence, forbearance or extension of time; or

	 
	 	14.2.2	 	does not ascertain or exercise any of its rights or remedies, or delays in
doing so;







the rights and remedies of the Buyer in respect of this agreement are not
diminished, waived or extinguished.




	 	14.3	 	Any waiver of any right, obligation or remedy under, or compliance with or
breach of any provision of, this agreement must be expressly stated in writing to be
such a waiver, must specify the right, remedy, obligation, provision or breach to which
it applies and must be signed by an authorised signatory of the Buyer.

	 
	 	14.4	 	If the Buyer waives any right, obligation or remedy under, or compliance with
or breach of any provision of this agreement, other than by instrument in writing
constituting a deed, it can still enforce that right, obligation or provision or claim
that remedy subsequently and that waiver shall not be deemed to be a waiver of any
subsequent breach of that or any other provision or of any other right, obligation or
remedy.

	 
	 	14.5	 	The discontinuance, abandonment or adverse determination of any proceedings
taken by the Buyer to enforce any right or any provision of this agreement





 









 






	 	 	 	shall not of itself operate as a waiver of, or preclude any exercise or enforcement
or (as the case may be) further or other exercise or enforcement by the Buyer of,
that or any other right or provision.

	 
	 	14.6	 	All references in clauses 14.2 to 14.5 to:







	 	14.6.1	 	any right shall include any power, right or remedy conferred by this
agreement on, or provided by law or otherwise available to, the Buyer; and

	 
	 	14.6.2	 	any failure to do something shall include any delay in doing it.







	 	14.7	 	The giving by the Buyer of any consent to any act or matter which by the terms
of this agreement requires that consent shall not prejudice the right of the Buyer to
withhold or give consent to any similar act or matter.

	 
	 	14.8	 	Clauses 14.1 to 14.6 inclusive shall apply (with the appropriate changes) to
any rights under this agreement enforceable under the Contracts Act by any person who
is not party to it.

	 
	 	14.9	 	All of the provisions of this agreement shall, so far as they are capable of
being performed or observed, continue to be effective notwithstanding Completion except
in respect of those matters then already performed and Completion shall not constitute
a waiver of any of the Buyer’s rights in relation to this agreement.

	 
	 	14.10	 	The rights and remedies conferred on the Buyer and/or the Company under this
agreement:-







	 	14.10.1	 	are cumulative and are additional to, and not exclusive of, any rights or
remedies provided by law or otherwise available at any time to the Buyer
(including the right to damages for any loss or additional loss suffered by the
Buyer) but the Buyer shall not be entitled to recover more than once in respect
of the same loss ;

	 
	 	14.10.2	 	(subject always to clause 9.13) shall not be affected or limited, and the
amount recoverable shall not be reduced, on the grounds that the Buyer may
before Completion have had actual, constructive imputed or implied knowledge of
the matter giving rise to the claim (subject to clause 9.3, other than (but in
respect of the Warranties only) by way of that matter being fairly disclosed in
the Disclosure Letter); and

	 
	 	14.10.3	 	(subject always to clause 9.13) shall not be affected or limited by any
investigation made by or on behalf of the Buyer into the Company or any report
on the Company prepared at the instance of or made available to the Buyer
(other than by being fairly disclosed in the Disclosure Letter).







	 	14.11	 	The rights and remedies conferred on the Buyer and/or the Company under this
agreement may be delegated to and exercised by Federal Signal Corporation and/or any
other member of the Buyer’s Group on behalf of the Buyer for so long as it remains such
a member and not so as to impose on the Seller a liability greater than that which is
owed to the Buyer.







	15	 	Notices





 









 












	 	15.1.	 	Except as otherwise provided in this agreement, every notice under this
agreement shall be in writing and shall be deemed to be duly given if it (or the
envelope containing it) identifies the intended recipient as the addressee and:







	 	15.1.1.	 	it is delivered by being handed personally to the addressee (or, where the
addressee is a corporation, any one of its directors or its secretary);

	 
	 	15.1.2.	 	it is delivered by being left in a letter box or other appropriate place
for the receipt of letters at the addressee’s authorised address (as defined
below); or

	 
	 	15.1.3.	 	the envelope containing the notice is properly addressed to the addressee
at the addressee’s authorised address and duly posted by the recorded
delivery service (or by international recorded post if overseas) or the
notice is duly transmitted to that address by facsimile transmission;







and, in proving the service of any such notice, it shall be conclusive evidence to
prove that the notice was duly given within the meaning of this clause 15.1.




	 	15.2.	 	A notice sent by post (or the envelope containing it) shall not be deemed to
be duly posted for the purposes of clause 15.1.3 unless it is put into the post
properly stamped or with all postal or other charges in respect of it otherwise
prepaid.

	 
	 	15.3.	 	For the purposes of this clause 15 the authorised address of the Buyer and the
Company respectively shall be the address of its registered or principal office for the
time being or (in the case of notices sent by facsimile transmission) its facsimile
number at that address and the authorised address of the Seller shall be the address of
the Seller’s Solicitors or (in the case of notices sent by facsimile transmission) the
facsimile number of the Seller’s Solicitors.

	 
	 	15.4.	 	Any notice duly given within the meaning of clause 15.1 shall be deemed to
have been both given and received:







	 	15.4.1.	 	if it is delivered in accordance with clauses 15.1.1 or 15.1.2, on that
delivery; and

	 
	 	15.4.2.	 	if it is duly posted or transmitted in accordance with clause 15.1.3 by
any of the methods specified in that clause, on the second (or, when sent by
airmail, fifth) business day after the day of posting or (in the case of a
notice transmitted by facsimile transmission) on receipt by the sender of a
transmission report showing the successful transmission of the whole of the
relevant notice or (if that transmission is not made during normal working
hours on a business day) at 9.00 a.m. on the next business day.







	 	15.5.	 	For the purposes of this clause “notice” shall include any request, demand,
instruction, communication or other document.

	 
	 	15.6.	 	Each notice to be given under or in connection with this agreement shall be in
English and if that notice is translated into any other language, the English language
text shall prevail.





 









 












	16	 	Entire Agreement







	 	16.1.	 	The Agreed Documents together with the Replies and the Disclosure Letter
constitute the entire agreement between the parties in relation to the sale and
purchase of the Sale Shares and other matters covered by them and supersede any
previous agreement between the parties in relation to those matters, which shall cease
to have any further effect. It is agreed that:







	 	16.1.1	 	no party has entered into any Agreed Document in reliance on, and each party
unconditionally waives any claims in relation to, any statement,
representation, warranty or undertaking which is not expressly set out or
provided for in the Agreed Documents, the Replies or the Disclosure Letter;

	 
	 	16.1.2	 	in the absence of fraud, no party shall have any remedy in respect of any
untrue statement made, to it or its representatives or agents, prior to this
agreement being entered into and on which it or they relied other than
representations, warranties or undertakings set out in the Agreed Documents the
Replies and the Disclosure Letter; and

	 
	 	16.1.3	 	this clause 16 shall not exclude any remedy or liability for fraudulent
concealment or fraudulent misrepresentation.







	 	16.2.	 	The Seller confirms that save as fairly disclosed in the Disclosure Letter
there are no agreements to which both he (or any connected person) and the Company are
party, other than those of the Agreed Documents (if any) to which they are parties.

	 
	 	16.3.	 	Nothing contained in this agreement shall affect or diminish the liability of
the Seller in respect of any reply given by him or on his behalf to the Buyer’s
Solicitors in response to enquiries raised by the Buyer’s Solicitor.







	17	 	Alterations

	 
	 	 	No purported alteration of this agreement shall be effective unless it is in writing,
refers specifically to this agreement and is duly executed by each party to this agreement.







	18	 	Severability







	 	18.1.	 	Each provision of this agreement is severable and distinct from the others.
The parties intend that each of those provisions shall be and remain valid and
enforceable to the fullest extent permitted by law. If any such provision is or at any
time becomes to any extent invalid, illegal or unenforceable under any enactment or
rule of law, it shall to that extent be deemed not to form part of this agreement but
(except to that extent in the case of that provision) it and all other provisions of
this agreement shall continue to be effective and their validity, legality and
enforceability shall not be affected or impaired as a result, subject to the operation
of this clause not negating the commercial intent and purpose of the parties under this
agreement. The proviso to clause 1.2.6 shall be read subject to this clause 18.1.

	 
	 	18.2.	 	If any provision of this agreement is illegal or unenforceable because any
period or area specified in it exceeds that permitted by a Relevant Authority, that
provision shall take effect with the minimum modification necessary to make it valid,
effective and acceptable to that Relevant Authority subject to





 









 






	 	 	 	that modification not negating the commercial intent of the parties under this
agreement.







	19	 	Counterparts

	 
	 	 	This agreement may be entered into in the form of two or more counterparts each executed by
one of the parties but, taken together, executed by them and, provided that each party duly
executes such a counterpart, each of the executed counterparts, when duly exchanged or
delivered, shall be deemed to be an original, but, taken together, they shall constitute
one instrument.

	 
	20	 	Payment of Costs







	 	20.1.	 	Each party shall be responsible for that party’s own legal and other costs
incurred in relation to the negotiation, preparation and completion of each of the
Agreed Documents and all other relevant documents.

	 
	 	20.2.	 	The Company shall not directly or indirectly pay or reimburse any costs or
expenses in connection with any investigation relating to it or with the negotiation,
completion or implementation of the Agreed Documents unless the provisions of Chapter
VI CA 1985 shall have complied with in relation thereto.







	21	 	Successors, Assigns and Third Party Rights







	 	21.1.	 	This agreement shall be binding on and shall enure for the benefit of the
successors in title of the parties and also the personal representatives of the Seller.

	 
	 	21.2.	 	Except as provided in clause 21.3, none of the parties (nor any other person
entitled to enforce rights under this agreement) may assign the benefit of any rights
under this agreement.

	 
	 	21.3.	 	The Buyer and the Company may at any time assign all or any part of their
rights under this agreement including the Warranties and the restrictive covenants and
any cause of action arising under or in respect of them to any member of the Buyer’s
Group for so long as such member remains a member of the Buyer’s Group which may
enforce them as if it had been named in this agreement as the Buyer and/or the Company
as the case may be PROVIDED that no such assignee or any other member of the Buyer’s
Group shall be entitled to recover from the Seller more than the Buyer could have done
had the assignment not taken place.

	 
	 	21.4.	 	For the purposes of the Contracts Act any member of the Buyer’s Group shall
have the benefit of the Warranties and the indemnities contained in this agreement
PROVIDED that no other member of the Buyer’s Group shall be entitled to recover from
the Seller more than the Buyer could have done.

	 
	 	21.5.	 	Each of the persons described in clause 9.8.2 shall have the benefit of
clause 9.8 under the Contracts Act and each of the persons described in clause 14.10
shall have the benefit of that provision under the Contracts Act to the extent
provided in such clause.

	 
	 	21.6.	 	Except as provided in clauses 21.4 and 21.5:







	 	21.6.1.	 	the Contracts Act shall not apply to this agreement; and





 









 






	 	21.6.2.	 	no person (including any employee, officer, agent, representative or
sub-contractor of a party) other than a party to this agreement shall have
the right (whether under the Contracts Act or otherwise) to enforce any term
of this agreement which expressly or by implication confers a benefit on that
person without the express prior agreement in writing of the parties, which
agreement must refer to this clause 21.6.







	 	21.7.	 	No consent shall be required from any person having rights under this
agreement by virtue only of the Contracts Act to any amendment, variation, waiver or
settlement of this agreement or any right or claim arising from or under it which (in
each case) has been agreed by any party to it.







	22	 	Applicable Law and Submission to Jurisdiction







	 	22.1.	 	This agreement (including the Tax Covenant) and the Disclosure Letter
shall be governed by and construed in accordance with English law in whatever
jurisdiction any proceedings (as defined in clause 22.2) be brought or conducted.

	 
	 	22.2.	 	In relation to any legal action or proceedings to enforce this agreement
or arising out of or in connection with it (“proceedings”) the Seller irrevocably
submits to the jurisdiction of the courts of the state of Illinois in the United
States of America and the courts of the United States of America located in the said
state of Illinois and waives any objection to proceedings in such courts on the
grounds of venue or on the grounds that the proceedings have been brought in an
inconvenient forum PROVIDED ALWAYS that the Buyer may at its sole discretion seek to
bring proceedings against the Seller in the English courts and in such circumstance
the Seller irrevocably submits to the jurisdiction of the English Courts and waives
any objection to proceedings in such courts on the grounds of venue or on the
grounds that the proceedings have been brought in an inconvenient forum.







	23	 	Address for Service

	 
	 	 	The Seller appoints the Seller’s English Solicitors as his process agent to receive on his
behalf service of process arising out of or connected with this agreement. Service upon
the process agent shall be good service upon the Seller whether or not it is forwarded to
and received by the Seller. If for any reason such process agent ceases to be able to act
as process agent, or no longer has an address in England, the Seller irrevocably agrees to
appoint a substitute firm of solicitors to act as process agent with an address in England
reasonably acceptable to the Buyer and to deliver to the Buyer a copy of the substitute
process agent’s acceptance of that appointment within 30 days. In the event that the Seller
fails to appoints a substitute process agent, it shall be effective service for the Buyer
to serve the process upon the last known address in England of the last known process agent
for the Seller notified to the Buyer, notwithstanding that such process agent is no longer
found at such address or has ceased to act.

	 
	24	 	Exchange rates

	 
	 	 	Where a conversion from one currency to another has to be made for the purposes of this
agreement, the exchange rate shall be the spot rate for the purchase of the one currency
from the other as certified by HSBC Bank Plc as prevailing in London at or about 11.00 a.m.
on the relevant day.





 









 












	25	 	Conflict with Joint Issues Agreement

	 
	 	 	If any provision of this agreement is in conflict with the Joint Issues Agreement the
provisions of the Joint Issues Agreement shall prevail.





IN WITNESS of the above the parties have executed this agreement as a deed on the date written at
the head of this agreement.





 











 





SCHEDULE 1




THE CONDITIONS





	1	 	The PIPS Inc Agreements having been entered into and having become unconditional in all
respects (save as to the execution of this Agreement);

	 
	2	 	The Istenes Acknowledgement having been entered into by its parties and having become
unconditional in all respects (save as to the execution of this agreement).

	 
	3	 	The Joint Issues Agreement having been entered into and having become unconditional in all
respects (save as to the execution of this agreement).

	 
	4	 	The Minority Agreement having been entered into and having become unconditional in all
respects (save as to the execution of this agreement).

	 
	5	 	No decision, order or judgement of any Relevant Authority having been issued or made prior to
Completion which has the effect of making unlawful or otherwise prohibiting the sale of the
Sale Shares.

	 
	6	 	The securing of a licence by PIPS Inc of the Adrain Patent (US patent number 5,831,669) on
terms reasonably acceptable to FS.

	 
	7	 	The obtaining in a form reasonably satisfactory to the Buyer of written consent to the sale
of the Sale Shares to the Buyer from the persons listed in below in respect of the contracts
listed opposite each such person:







	 	7.1.	 	distribution agreement with Sagem Defense Security dated 27.01.06;

	 
	 	7.2.	 	Hertfordshire Constabulary Contract for supply of ANPR Cameras dated 17.06.05;

	 
	 	7.3.	 	National Welsh Assembly contract dated 09.09.03 for supply of journey time
measurement system using ANPR







	8	 	The obtaining in a form reasonably satisfactory to the Buyer of confirmatory intellectual
property assignments to the Company executed under seal by Cheryl Patrick and John Morris
respectively.





 









 












SCHEDULE 2




THE COMPANY




	 	 	 	 	 	 	 
	Status:	 	Private company limited by shares
	 	 	 
	 	 	 	 
	Date of incorporation:	 	9 April 2001
	 	 	 
	 	 	 	 
	Place of incorporation:	 	England and Wales
	 	 	 
	 	 	 	 
	Registered number:	 	04196820
	 	 	 
	 	 	 	 
	Registered office:	 	York House, School
Lane, Chandlers Ford, Eastleigh, Hampshire, SO53 4DG
	 	 	 
	 	 	 	 
	Authorised share capital:	 	£2,000,000 divided into 195,000,000 A ordinary
shares of 1p each and 5,000,000 B ordinary
shares of 1p each
	 	 	 
	 	 	 	 
	Issued share capital:	 	5,000,000 A ordinary shares of 1p each and
1,100,000 B ordinary shares of 1p each
	 	 	 
	 	 	 	 
	Directors:	 	Paul John Negus

Alan Keith Sefton

Stephen Craig Kenneth Oxley

Brian David Vincent Smith
	 	 	 
	 	 	 	 
	Secretary:	 	Wilsons (Company Secretaries) Limited
	 	 	 
	 	 	 	 
	Auditors:	 	BDO Stoy Hayward
	 	 	 
	 	 	 	 
	Bankers:
	 	HSBC Bank plc
	 	 	 	 
	 	 	 
	 	 	 	 
	Accounting reference date:
	 	31 December
	 	 	 	 
	 	 	 
	 	 	 	 
	Shareholders
	 	Alan Keith Sefton

	 	5,000,000 A ordinary
 shares
of 1p each	 	 
	 	 	 
	 	 	 	 
	 	 	Paul John Negus

	 	600,000 B ordinary
 shares
of 1p each	 	 
	 	 	 
	 	 	 	 
	 	 	Brian David Vincent Smith

	 	400,000 B ordinary
 shares
of 1p each	 	 
	 	 	 
	 	 	 	 
	 	 	Graham Andrew Wood

	 	100,000 B ordinary
 shares
of 1p each	 	 
	 	 	 
	 	 	 	 
	Charges and other Encumbrances:
	 	None
	 	 	 	 
	 	 	 
	 	 	 	 
	Guarantees by the Company:
	 	None
	 	 	 	 
	 	 	 
	 	 	 	 
	Guarantees of the Company’s liabilities:
	 	None
	 	 	 	 
	 	 	 
	 	 	 	 
	Loans made by the Seller

(or any Person connected with him):
	 	None
	 	 	 	 






 









 






SCHEDULE 3




	 	 	 	 	 	 	 	 	 
	 	 	No of A	 	 	No of B	 
	Name and Address	 	shares	 	 	shares	 
	Alan Keith Sefton
	 	 	5,000,000	 	 	Zero
	2080 Wilkerson Road,

Knoxville,

Tennessee
37922. USA	 	 	 	 	 	 	 	 







 









 






SCHEDULE 4




WARRANTIES




PART 1 — GENERAL WARRANTIES





	1	 	Information







	 	1.1.	 	The information in schedule 2, schedule 3, schedule 7 and schedule 10
is accurate.

	 
	 	1.2.	 	All information contained in the Replies and in the Disclosure Letter
is in all material respects complete and accurate and is not misleading.

	 
	 	1.3.	 	To the best of the Seller’s knowledge information and belief there is
no other fact, matter or circumstance which renders any such information
incomplete, inaccurate or otherwise misleading.







	2	 	The Seller







	 	2.1.	 	The Seller has full power to enter into and perform this agreement
which constitutes binding obligations on the Seller in accordance with its terms;

	 
	 	2.2.	 	The Sale Shares constitute the whole of the issued share capital of the
Company, all the Sale Shares are fully paid or are properly credited as fully paid,
the Seller is the sole legal and beneficial owner of all the A Shares free from
Encumbrances and the B Shareholders are together the sole legal and beneficial
owner of all the B Shares free from Encumbrances.







	3	 	Accounts







General




	 	3.1.	 	The Accounts:-







	 	3.1.1.	 	show a true and fair view of the assets, liabilities and state of
affairs of the Company as at the Accounts Date and of its profits
for the financial period ended on the Accounts Date in accordance
with UK GAAP;

	 
	 	3.1.2.	 	were prepared in accordance with the requirements of all relevant
statutes, and with UK GAAP;

	 
	 	3.1.3.	 	have been prepared using the same bases, policies, practices and
methods which were used in preparing the audited accounts of the
Company for the last three financial years.

	 
	 	3.1.4.	 	contain full provision or reserve for all bad and doubtful debts,
obsolescent or slow-moving stocks and for depreciation on all fixed
assets, which provision or reserve was when made and is now
adequate;

	 
	 	3.1.5.	 	contain a note of all capital commitments of the Company at the
Accounts date, which note was when made and is now adequate, fair
and not misleading;





 









 






	 	3.1.6.	 	disclose, note or provide properly (in accordance with UK GAAP)
for all liabilities of the Company which were known, actual or
contingent;

	 
	 	3.1.7.	 	value the stock at the lower of cost and net realisable value,
and such stock does not include any redundant, obsolete or
unsaleable items which are not properly provided or reserved for
(in accordance with UK GAAP) or any items which are the subject of
a dispute with a supplier or a customer;

	 
	 	3.1.8.	 	contain proper and adequate reserves or provision for all
Taxation, including deferred taxation as defined in FRS 19
(sufficient provision being made in a deferred taxation account for
any corporation tax on chargeable gains and balancing charges that
would arise on the sale of all fixed assets at the values
attributed to them in the Accounts);

	 
	 	3.1.9.	 	reflect all the fixed and loose plant and machinery, equipment,
furniture, fittings and vehicles used by the Company at the
Accounts Date and (apart from depreciation in the ordinary course
of business) their value is not significantly less (subject to
depreciation) than at the Accounts Date and none has been acquired
for any consideration in excess of its net realisable value at the
date of such acquisition or otherwise than by way of a bargain at
arm’s length.







Stock-in-trade and work-in-progress




	 	3.2.	 	The basis of valuation for stock-in-trade and work-in-progress has
remained in all material respects consistent with that adopted for the purpose of
the Company’s audited accounts in respect of the beginning and end of each of the
accounting periods of the Company for the last three financial years.







Books of account




	 	3.3.	 	All accounts, books, ledgers, financial and other necessary records of
whatsoever kind of the Company (including all invoices and other records required
for VAT purposes)







	 	3.3.1.	 	have been fully, properly and accurately maintained, are in the
possession of the Company and contain true and accurate records of
all matters including those required to be entered in them by the
Companies Acts and no notice or allegation that any of the same is
incorrect or should be rectified has been received;

	 
	 	3.3.2.	 	do not contain or reflect any material inaccuracies or
discrepancies;

	 
	 	3.3.3.	 	give and reflect a true and fair view of the matters which ought
to appear in them and in particular of the financial, contractual
and trading position of the Company and of its plant and machinery,
fixed and current assets and liabilities





 









 






	 	 	 	(actual and contingent), debtors and creditors and
stock-in-trade and work-in-progress; and

	 
	 	3.3.4.	 	contain information which is accurate in all material respects in
accordance with generally accepted accounting principles relating
to all transactions to which the Company has been a party and the
Accounts do not materially overstate the value of any asset or
materially understate any liability of the Company at the Balance
Sheet Date.







Management Accounts




	 	3.4.	 	The Management Accounts and the Interim Accounts, a copy of each of
which is attached to the Disclosure Letter, (which it is acknowledged have not been
the subject of an audit report)







	 	3.4.1.	 	have been prepared with due care and attention in compliance with
the Company’s procedures and good commercial practice; and

	 
	 	3.4.2.	 	have been prepared in accordance with accounting policies
consistent with those used in preparing the Accounts and on a basis
consistent with the management accounts of the Company for the
preceding 12 months.







	 	3.5.	 	The cumulative profits, assets and liabilities of the Company as stated
in the Management Accounts and the Interim Accounts have not been materially
misstated and are not materially inaccurate and the Seller does not consider either
the Management Accounts or the Interim Accounts to be misleading in any material
respect.






     4 Position Since the Accounts Date




	 	4.1.	 	Since the Accounts Date;







	 	4.1.1.	 	the business of the Company has been carried on in its ordinary
and usual course and in the same manner, including nature and scope
as in the financial year ended on the Accounts date;

	 
	 	4.1.2.	 	there has been no material adverse change in the Company’s
financial or trading position or prospects of the Company including
its turnover (whether by value or by volume) or its net profit
margins, or in the amount of its liabilities (actual or contingent)
as compared with the corresponding months in the financial period
ended on the Accounts Date;

	 
	 	4.1.3.	 	there has been no reduction in the value of the net assets of the
Company determined in accordance with the same accounting policies
as those applied in the Accounts (provided that each of the assets
of the Company is valued at a figure no greater than the value
attributed to it in the Accounts and, in the case of assets
acquired by the Company after the Accounts Date, at a figure no
greater than cost);





 









 






	 	4.1.4.	 	the business has not been adversely affected by the loss of a
contract or customer or source of supply or by other factors which
have not affected similar businesses to the same extent;

	 
	 	4.1.5.	 	the Company has not acquired or disposed of or agreed to acquire
or dispose of any assets or assumed or incurred or agreed to assume
or incur any material liabilities (actual or contingent) otherwise
than in the ordinary course of business;

	 
	 	4.1.6.	 	the Company has not declared, made or paid any dividend, bonus or
other distribution of capital or income (whether a qualifying
distribution or otherwise) and (excluding fluctuations in overdrawn
current accounts with bankers) no loan or loan capital of the
Company has been repaid in whole or in part or has become due or is
liable to be declared due by reason of either service of a notice
or lapse of time or otherwise howsoever;

	 
	 	4.1.7.	 	the Company has not carried out or entered into any transaction
and no other event has occurred in consequence of which (whether
alone or together with any one or more transactions or events
occurring before, on or after the date of this agreement) any
liability of the Company to Taxation has arisen or will arise (or
would have arisen or would or might arise but for the availability
of any relief, allowance, deduction or credit) other than
corporation tax on the actual income (not chargeable gains or
deemed income) of the Company arising from transactions entered
into in the ordinary course of business, income tax under the PAYE
system and national insurance and social security contributions in
respect of persons employed by it since the Accounts Date and VAT
in respect of taxable supplies made by it in the ordinary course of
business since the Accounts Date;

	 
	 	4.1.8.	 	the Company has not made any change to the remuneration, terms of
employment, emoluments or pension benefits of any present or former
director, officer or employee of the Company who on the Accounts
Date was entitled to remuneration in excess of £50,000 per annum
and has not appointed or employed any additional director, officer
or employee entitled as aforesaid;

	 
	 	4.1.9.	 	the Company has received payment in full on their due dates of
all debts owing to the Company shown in the Accounts (subject to
any provision for bad and doubtful debts made in the Accounts), has
not released any debts in whole or in part and has not written off
debts in an amount exceeding £5,000 in the aggregate;

	 
	 	4.1.10.	 	the Company has not entered into contracts involving capital
expenditure in an amount exceeding £50,000 in the aggregate;





 









 






	 	4.1.11.	 	the Company has not become aware that any event has occurred
which would entitle any third party to terminate any contract or
any benefit enjoyed by it or call in any money before the normal
due date therefor;

	 
	 	4.1.12.	 	the Company has paid its creditors within the times agreed with
such creditors and does not have any debts outstanding which are
overdue for payment by more than four weeks;

	 
	 	4.1.13.	 	the Company has not borrowed or raised any money or taken any
financial facility (except such short term borrowings from bankers
as are within the amount of any overdraft facility which was
available to the Company at the Accounts Date) or since the
Accounts Date renegotiated or received any notice from any banker
that such banker wishes to renegotiate any overdraft facility
available to the Company at the Accounts Date;

	 
	 	4.1.14.	 	the Company has not made any change to its accounting reference
date and no accounting period of the Company has ended since the
Accounts Date;

	 
	 	4.1.15.	 	the Company has not made a payment or incurred an obligation to
make a payment outside the ordinary course of business which will
not be deductible in computing trading profits for the purposes of
corporation tax or as a management expense of the Company; and

	 
	 	4.1.16.	 	the Company (including any class of its members) has not passed
any resolution whether in general meeting or otherwise.







	5	 	Debtors and Creditors







	 	5.1.	 	The Company has no indebtedness except:







	 	5.1.1.	 	as stated in the Accounts or in the Management Accounts or in the
Completion Accounts;

	 
	 	5.1.2.	 	as fairly disclosed in the Disclosure Letter; or

	 
	 	5.1.3.	 	amounts due to trade creditors incurred in the ordinary course of
trading since the date of the Management Accounts and provided for
in full in the Completion Accounts.







	 	5.2.	 	The amounts for which the assets of the Company are security have not
increased above the level shown in the Accounts or in the Management Accounts.

	 
	 	5.3.	 	The Company is not owed any moneys other than in the ordinary course of
business.

	 
	 	5.4.	 	The book debts shown in the Accounts have realised their full nominal
amount less any reserve for bad or doubtful debts stated in the Accounts and no
book debt has been duplicated or otherwise incorrectly recorded in the Accounts or
the Management Accounts.





 









 






	 	5.5.	 	The Company has not factored or discounted any of its debts.

	 
	 	5.6.	 	The Company is not responsible for the indebtedness of any other person
nor party to any option or pre-emption right or any guarantee, suretyship or any
other obligation (whatever called) to pay, purchase or provide funds (whether by
the advance of money, the purchase of or subscription for shares or other
securities or the purchase of assets or services or otherwise) for the payment of,
or as an indemnity against the consequence of default in the payment of, any
indebtedness of any other person. No person has given any guarantee of or security
for any overdraft, loan or loan facility granted to the Company.

	 
	 	5.7.	 	The Company is not in default under the terms of any borrowing made by
it and no circumstances have arisen which could entitle a lender of finance to the
Company (other than on normal overdraft facility) to call in the whole or any part
of the moneys advanced or enforce any security.

	 
	 	5.8.	 	All debts owed to the Company are collectable in the ordinary course of
business and each such debt will realise in full its face value within three months
of its due date for payment. The Seller considers none of the debts owing to the
Company (but which are not yet due) to be irrecoverable in whole or in part. The
Company does not own the benefit of any debt (whether present or future) other than
debts which have accrued to it in the ordinary course of business. The debts owing
to the Company shown in the Accounts (subject to any provision for bad or doubtful
debts made in the Accounts) were paid in full on their due dates. This warranty
shall not apply in respect of the provisions for bad debts made in the Accounts and
the Completion Accounts.







	6	 	Subsidiaries







	 	6.1.	 	The Company does not now have and has never had any subsidiary.

	 
	 	6.2.	 	The Company does not now hold and has never held any shares in the
capital of any company.







	7	 	Property







	 	7.1.	 	The Company does not own, use or occupy or has any interest in any land
and/or buildings other than the Property.

	 
	 	7.2.	 	The description of the Property and the particulars of the estate owner
and present use contained in schedule 7 are correct and plans which accurately
delineate the extent of the Property are attached to Disclosure Letter.

	 
	 	7.3.	 	In this paragraph the expression the “present use” means in respect of
each of the Properties the present use specified in schedule. Except as fairly
disclosed in the Disclosure Letter-:







	 	7.3.1.	 	the Company has a good title to the Property;

	 
	 	7.3.2.	 	the Property is not subject to any covenant, condition,
agreement, restriction, reservation or right adversely affecting
its present use;

	 
	 	7.3.3.	 	the Company has not





 









 












	 	7.3.3.1.	 	breached any covenants, restrictions or stipulations
which affect the Property (including covenants contained in
any lease or leases under which the Property are held); and

	 
	 	7.3.3.2.	 	neither the Seller nor the Company has received any
notice of any breach of any such matter as is mentioned in
paragraph 7.3.3.1;







	 	7.3.4.	 	the Company is in exclusive and undisputed occupation of the
whole of the Property;

	 
	 	7.3.5.	 	the Property is not subject to (or to any agreement to create)
any lease, tenancy, licence to occupy or other Encumbrance;

	 
	 	7.3.6.	 	no party claims the benefit of any right, easement, reservation
or other privilege or Encumbrance in or over the Property adverse
to the title or interest of any Group Company or their present use;

	 
	 	7.3.7.	 	the Property and all buildings on it and their present use comply
with all relevant Town and Country Planning legislation, byelaws
and regulations and no consents or approvals obtained under any of
those enactments are temporary or personal or subject to any
conditions which have not been fully complied with;

	 
	 	7.3.8.	 	the Property complies in all material respects with the Offices
Shops and Railway Premises Act 1963, the Fire Precautions Act 1971,
the Health and Safety at Work etc. Act 1974 and all other relevant
Official Requirements and all orders consents or permissions given
under any of them;

	 
	 	7.3.9.	 	neither the Seller nor the Company has received any notice of any
breach of any requirement referred to in paragraphs 7.3.7 and
7.3.8;

	 
	 	7.3.10.	 	to the extent that it may be required a fire certificate has
been issued (or is in the course of being issued and to the best of
the Seller’s knowledge, information and belief there is no reason
why any such certificate will not be issued) for the Property and
it complies with current fire regulations; and

	 
	 	7.3.11.	 	all documents required to prove the title of the Company to the
Property are in the possession of or under the control of the
Company.







	 	7.4.	 	The Seller confirms that:-







	 	7.4.1.	 	there are no structural or material defects in the buildings or
structures on the Property;

	 
	 	7.4.2.	 	all such buildings and structures are in good and substantial
repair and condition; and





 









 






	 	7.4.3.	 	there is no asbestos on the Property as defined in the Leases
thereof;







	 	7.5.	 	Neither the Company nor the Seller have received any adverse
surveyors’, engineers’ or other professional report in respect of any of the
Property.

	 
	 	7.6.	 	The Company has not at any time assigned or otherwise disposed of any
freehold or leasehold property in respect of which the Company has any continuing
liability either as original contracting party or by virtue of any direct covenant
or under an authorised guarantee agreement given on a sale or assignment to or from
the Company or as a surety for the obligations of any other person in relation to
any real property and no claim has been made against the Company in respect of any
leasehold property formerly held by it or in respect of which it acted as a
guarantor nor is any such claim anticipated.

	 
	 	7.7.	 	No notices under the Landlord and Tenant (Covenants) Act 1995 have been
served on the Company.

	 
	 	7.8.	 	No claims have been made against the Company in respect of repairs,
dilapidations or any similar liability, and no other monetary claim or liability is
outstanding, in each case in relation to the Property.

	 
	 	7.9.	 	The Seller is not aware of any fact or circumstance which may give rise
at any time in the future to any claim or liability of the kind referred to in
paragraph 7.8.

	 
	 	7.10.	 	The Seller’s Solicitors have provided to the Buyer’s Solicitors
details of all transactions or proposed transactions (if any) relating to the
Property since the date title details were supplied to the Buyer’s Solicitor.

	 
	 	7.11.	 	The Property is not subject to the payment of any outgoings other than
the usual rates and taxes and all sums due to date in respect thereof have been
paid.

	 
	 	7.12.	 	No proposal relating to the rateable value of the Property has been
determined by the Valuation and Community Charge Tribunal or Land Tribunal and
there is no subsisting proposal to challenge the rateable value of the Property.

	 
	 	7.13.	 	The Property drains foul sewage and surface water to public sewers
without passing through land in the occupation or ownership of any third party or,
if they do not, the Property has the benefit of all necessary easements and rights
for the maintenance and use thereof and such rights are held on terms which do not
entitle any person to terminate or curtail the same.

	 
	 	7.14.	 	All development carried out in relation to the Property and subsequent
alteration extension or improvement has been lawful and all necessary consents and
permissions have been obtained therefore and fully complied with.







	8	 	Environmental Matters and Health and Safety







	 	8.1.	 	The Company:





 









 












	 	8.1.1.	 	complies and has at all times complied with all Environmental
Laws and Environmental Licences;

	 
	 	8.1.2.	 	has obtained and maintained in force all Environmental Licences;

	 
	 	8.1.3.	 	there are no conditions, facts or circumstances which could lead
any Environmental Licence to be revoked, suspended, amended,
varied, withdrawn or not renewed or which would prevent compliance
with any Environmental Licence; and

	 
	 	8.1.4.	 	is not required by any Environmental Licence or any Environmental
Law or as the result of any Environmental Claim to incur any
expenditure which is material in the context of the business of the
Company or to desist from taking any action which might have a
material adverse effect on the financial condition of the Company.







	 	8.2.	 	There are attached to the Disclosure Letter complete and up-to-date
copies of all Environmental Licences and all orders, notices, directions,
applications, appeals, amendments and reports and any other communications relating
to or in connection with any Environmental Licence of which the Company is aware.

	 
	 	8.3.	 	No Environmental Claim is pending or has been made or threatened
against the Company and the Seller does not have any reason to believe that the
Company has or is likely to have any liability in relation to Environmental
Matters.

	 
	 	8.4.	 	No Relevant Substance has been deposited, disposed of, kept, treated,
imported, exported, transported, processed, manufactured, used, collected, sorted
or produced at any time, or is present in the Environment (whether or not on
property owned, leased, occupied or controlled by the Company) in circumstances
which could result in an Environmental Claim against the Company or which would
entitle any Relevant Authority to bring an Environmental Claim against the Company
or which would have a material adverse effect on the use or value of any property
owned, leased, occupied or controlled by the Company.

	 
	 	8.5.	 	There are attached to the Disclosure Letter full details (including
copies of any relevant reports or other documents) of any inspections,
investigations, studies, audits, tests, reviews or other analyses in relation to
Environmental Matters relating to the Company or any property now or previously
owned, leased or occupied by the Company.

	 
	 	8.6.	 	The Company has complied, and the business has been conducted, at all
times in compliance with all Health & Safety Laws and the Company has not received
notice from any Regulatory Authority of breach of any Health and Safety Laws.

	 
	 	8.7.	 	There are no events, states of affairs, conditions, circumstances,
activities, practices, incidents or actions which have occurred and have not been
remedied or are occurring or have been or are in existence in connection with the
Company or the conduct of the business which are liable to give rise to liability
under the Health & Safety Laws.





 









 






	 	8.8.	 	No works, repairs, construction, remedial action or expenditure is or
may be required in relation to the Health & Safety Laws in order to carry on
lawfully the business at each Property.

	 
	 	8.9.	 	At no time have or has the Seller or the Company had knowledge of
and/or received any notice, claim or other communication alleging any contravention
of or actual or potential liability under the Health & Safety Laws.







	9	 	Assets







	 	9.1.	 	All assets (excluding the Property and the Intellectual Property as to
which specific Warranties are given) used in connection with the business of the
Company belong to it free from any lease, rental, hire or hire purchase agreement,
agreement for payment on deferred terms, conditional sale agreement or bill of sale
or other Encumbrance and there are no agreements or arrangements restricting the
freedom of the Company to use or dispose of any of those assets as it thinks fit.

	 
	 	9.2.	 	The Company does not make use of any asset which is not included in the
Accounts.

	 
	 	9.3.	 	All assets of, or used in connection with the business of, the Company
are in the possession and under the control of the Company and are in good repair
and condition (subject to normal wear and tear and manner of use) and regularly
maintained and fully serviceable.

	 
	 	9.4.	 	The Company has not acquired or agreed to acquire any material asset on
terms that title to such asset does not pass to the Company until full payment is
made.

	 
	 	9.5.	 	All vehicles and office and other equipment (including fixed plant and
machinery) shown in the Accounts or acquired since the Accounts Date or otherwise
used in connection with the Company’s business which have not been disposed of in
the ordinary course of business:-







	 	9.5.1.	 	do not contravene any requirement or restriction having the force
of law;

	 
	 	9.5.2.	 	are in reasonable repair and condition (fair wear and tear
excepted) and are regularly maintained, fully serviceable and in
satisfactory working order;

	 
	 	9.5.3.	 	are each capable of doing the work for which they were designed
and/or purchased;

	 
	 	9.5.4.	 	are not surplus to the Company’s requirements; and

	 
	 	9.5.5.	 	are not dangerous or in need of renewal or replacement;







and the vehicles owned by the Company are road-worthy and duly licensed for the
purposes for which they are used.




	 	9.6.	 	Rentals payable by the Company under any leasing, hire-purchase or
other similar agreement to which it is a party are set out in the Disclosure Letter
and have not been and are not likely to be increased and all such rentals are fully
deductible by the Company for tax purposes.





 









 












	10	 	Insurances







	 	10.1.	 	All assets of the Company which are capable of being insured
(including debtors) have at all material times been and are at the date of this
agreement insured for their full replacement value against fire and other risks
normally insured against by companies carrying on similar businesses or owning
assets of a similar nature and the Company has at all material times been and is at
the date of this agreement adequately covered against accident, physical loss or
damage, third party liability (including product liability), environmental
liability (to the extent that cover is available at reasonable commercial premiums)
and other risks normally covered by insurance by such companies. All material
particulars of such insurances, including the insurance provider(s), agent(s) or
broker(s), type of insurance cover, policy limits and deductibles, and policy
period(s) are set out in the Disclosure Letter.

	 
	 	10.2.	 	In respect of all insurances referred to in paragraph 10.1:







	 	10.2.1.	 	all premiums and any related insurance premium taxes have been
duly paid to date;

	 
	 	10.2.2.	 	each policy is in force and effective and no act, omission,
misrepresentation or non-disclosure by or on behalf of the Company
has occurred which makes any of those policies voidable, nor have
any circumstances arisen which would render any of those policies
void or unenforceable for illegality or otherwise, nor has there
been any breach of the terms, conditions or warranties of any of
those policies which would entitle the relevant insurer to decline
to pay all or any part of any claim made under those policies;

	 
	 	10.2.3.	 	there are no special or unusual limits, terms, exclusions or
restrictions in any of the above policies, the premiums payable
under them are not in excess of prevailing normal rates for
comparable cover and so far as the Seller is aware no circumstances
exist which are likely to give rise to any increase in premiums;

	 
	 	10.2.4.	 	details of all claims made during the period of three years
preceding the date of this agreement are fairly disclosed in the
Disclosure Letter;

	 
	 	10.2.5.	 	no claim is outstanding and no circumstances exist which are
likely to give rise to any claim under the above policies; and

	 
	 	10.2.6.	 	all material details of all the relevant policies are fairly
disclosed in the Disclosure Letter.







	 	10.3.	 	No claims have been made by employees of the Company in respect of
industrial injury in the three years preceding the date of this agreement.







	11	 	Bank Accounts





 









 












	 	11.1.	 	The Disclosure Letter contains full details of each of the investment,
deposit and bank accounts maintained by or on behalf of the Company and of the
banks and other financial institutions at which they are kept.

	 
	 	11.2.	 	There are attached to the Disclosure Letter statements from each such
bank and/or institution of the credit or debit balances on each of the above
accounts on the last business day prior to the date of this agreement.

	 
	 	11.3.	 	Full details of all overdraft, loan and other financial facilities
available to the Company and of all amounts borrowed under them are set out in the
Disclosure Letter and no person who provides any of those facilities has given any
indication to the Company or the Seller that they are considering withdrawing or
altering any of those facilities.

	 
	 	11.4.	 	Neither the Seller nor the Company have done or omitted to do anything
which is so far as the Seller is aware will affect adversely the continuance of the
facilities referred to above.

	 
	 	11.5.	 	There are no unpresented cheques drawn by the Company otherwise than
in the normal course of trading.







	12	 	Conduct of Business







	 	12.1.	 	The Company is not now nor has it been during the period of two years
prior to the date of this agreement a party to any contracts or transactions which
are, or involve obligations, outside the ordinary course of business, or which are
of an unusual, unduly onerous or long term nature (which for this purpose includes
a contract or arrangement which is not capable of being terminated by three or less
than three months’ notice without payment of compensation or damages or which has
an annualised value in excess of £100,000 per annum) nor has it given at any time
any gifts, bribes or inducements to any person.

	 
	 	12.2.	 	No event or omission has occurred which would entitle any third party
to terminate prematurely any material contract to which the Company is a party or
call in any money before the date on which payment of the relevant sum would
normally or otherwise be due.

	 
	 	12.3.	 	There is no claim against and there are no circumstances which may
lead to a claim against the Company for defective goods, services, work or
materials or for breach of representation, warranty, condition or Official
Requirement in relation to goods or services or for delays in delivery or
completion of contracts or for deficiencies of design or performance or otherwise
relating to liability for goods or services sold or supplied by the Company.

	 
	 	12.4.	 	The Company has not agreed to produce or deliver replacement goods
after the date of this agreement or to take back or make good any defective goods
or services or repair or service any goods free of charge or otherwise not at arm’s
length rates or issue a credit note or write off or reduce indebtedness in respect
of any goods or services.

	 
	 	12.5.	 	After Completion by reason of the acquisition of the Sale Shares by
the Buyer:





 









 












	 	12.5.1.	 	no supplier of the Company will be entitled to cease supplying
the Company or substantially reduce or be entitled to substantially
reduce its supplies to the Company;

	 
	 	12.5.2.	 	no customer of the Company will be entitled to cease to deal
with the Company or substantially reduce or be entitled to
substantially reduce its existing level of business with the
Company;

	 
	 	12.5.3.	 	the Company will not lose the benefit of any right or privilege
which it currently enjoys; and

	 
	 	12.5.4.	 	no officer or senior employee of the Company will leave his
office or employment.







	 	12.6.	 	In the three years preceding the date of this agreement not more than
ten per cent in value of purchases by the Company have been placed in any twelve
month period with any one supplier and not more than ten per cent in value of sales
by the Company have been made in any twelve month period to any one customer.

	 
	 	12.7.	 	The Company’s stock-in-trade is capable of being sold by it in the
ordinary course of its business in accordance with its current price list without
rebate or allowance to a purchaser.

	 
	 	12.8.	 	The Company has obtained all licences, permissions and consents
required for the carrying on of its business, those licences, permissions and
consents are in force and effective and there are no circumstances which indicate
that any of those licences, permissions or consents are likely to be revoked or not
renewed in the ordinary course.

	 
	 	12.9.	 	The Company does not have any branch, place of business or substantial
assets outside the United Kingdom.







	13	 	Directors and Employees







	 	13.1.	 	The particulars shown in schedule 10 and the details shown in the
staff summary located at document B.08.01.01.02 in the online data room located at
www.intralinks.com are complete accurate and up to date and show in respect of
each director, officer, employee and worker of the Company his date of birth, the
date on which he commenced continuous employment with the Company for the purposes
of ERA and all remuneration payable and other benefits provided or which the
Company is bound to provide (whether now or in the future) to each such person and
include full particulars of all remuneration arrangements (particularly profit
sharing, incentive, bonus and severance arrangements to which the Company is a
party, whether binding or not) and each director, officer, employee and worker of
the Company is listed therein, and all of them are engaged exclusively in the
Company’s business.

	 
	 	13.2.	 	No change has been made nor agreed to be made by the Company in the
terms of employment of any of its directors employees or workers.

	 
	 	13.3.	 	No negotiations for any increase in remuneration or benefits or change
in any other term of the employment of any of the employees of the Company are
current or are due to take place within six months after the date of this





 









 









	 	 	 	agreement, no offer of or demand for any such increase has been made, and no
employee of the Company has within the last 12 months received an increase in
remuneration of more than five per cent or suffered any reduction in
remuneration.

	 
	 	13.4.	 	There are not in existence:







	 	13.4.1.	 	any employment contracts or other contracts with directors
employees or workers of the Company which cannot be terminated by
three months’ notice or less without giving rise to any right to
claim damages or compensation (other than compensation under the
Employment Rights Act 1996);

	 
	 	13.4.2.	 	any contracts or any arrangements to which the Company is a
party involving share options, profit sharing or bonus, incentive
or other similar payments for any existing of its former employees
or directors or any of their dependants save for options granted
under the Enterprise Management Incentive Scheme, and the Company
is not proposing to introduce any such scheme;

	 
	 	13.4.3.	 	any contracts or arrangements, other than those disclosed in
relation to paragraphs 13.4.1 or 13.4.2, of whatever kind (whether
legally enforceable or not) between the Company and existing or
former directors employees or workers of the Company including
contracts or arrangements for any benefit or payments of any nature
to or for the benefit of any existing or former directors employees
or workers or any of their dependants;

	 
	 	13.4.4.	 	any consultancy secondment or agency agreements between the
Company and any other person, firm or company for the provision of
an individual’s services to the Company; or

	 
	 	13.4.5.	 	any arrangements by which any person has the use of any credit
or charge card or account for which the Company is responsible.







	 	13.5.	 	All part-time, temporary and fixed-term employees of the Company enjoy
the same benefits as full time employees of the Company.

	 
	 	13.6.	 	There have been no strikes or industrial action short of strike action
(official or unofficial) by any of the employees of the Company since its
incorporation.

	 
	 	13.7.	 	There is no agreement or arrangement written or oral or by custom and
practice between the Company and any trade union or other body representing
employees of the Company in relation either to recognition of the trade union or
other body or to collective terms and conditions or the representation and,
informing or consultation with employees or workers.

	 
	 	13.8.	 	None of the employees of the Company are members of a trade union or
any similar organisation and there is no recognised trade union, closed shop or
collective agreement of any kind relating to any of the employees of the Company.





 









 






	 	13.9.	 	There is no claim, demand or liability outstanding or threatened (nor
any circumstances, facts or events which may lead to any claim, demand or
liability) against the Company on the part of any person who has been or is its
director employee or worker (or the dependant of any such person).

	 
	 	13.10.	 	The Company has not within a period of one year preceding the date of this
agreement given notice of any redundancies to any Relevant Authority or started
consultations with any independent trade unions or employee representatives under
the provisions of Chapter II of Part IV Trade Union and Labour Relations
(Consolidation) Act 1992 nor has the Company failed to comply with any such
obligation under those provisions.

	 
	 	13.11.	 	The Company:







	 	13.11.1.	 	has not at any time been a party to any relevant transfer as
defined in the Transfer of Undertakings (Protection of Employment)
Regulations 2006 nor has the Company failed to comply with any duty
to inform and consult any independent trade unions or employee
representatives under those Regulations.

	 
	 	13.11.2.	 	has not at any time been a party to any relevant transfer as
defined in the Transfer of Undertakings (Protection of Employment)
Regulations 1981 nor has the Company failed to comply with any duty
to inform and consult any independent trade unions or employee
representatives under those Regulations







	 	13.12.	 	The Company has in relation to each of its employees and workers (and, so far as
relevant, to each of its former employees and workers) complied with:







	 	13.12.1.	 	all obligations imposed on it by all enactments, rules,
regulations, acts and codes of conduct and practice relevant to the
relations between it and its employees or any trade union or
employee representatives and has maintained current adequate and
suitable records regarding the service and terms of employment of
each of its employees;

	 
	 	13.12.2.	 	all collective agreements recognition agreements and customs
and practices for the time being dealing with those relations or
the conditions of employment of its employees;

	 
	 	13.12.3.	 	all relevant orders and awards made under any relevant
enactment or code of conduct and practice affecting the conditions
of service of its employees;

	 
	 	13.12.4.	 	all recommendations made by the Advisory Conciliation and
Arbitration Service, all decisions made in relation to employees of
that Group Company by its Arbitration Panel and with all awards and
declarations made by the Central Arbitration Committee and, in each
case, of which it is aware;





 









 






	 	13.12.5.	 	all orders, judgements, and decisions of any court or tribunal;
and

	 
	 	13.12.6.	 	all obligations imposed on it under the contracts or terms of
employment of its employees.







	 	13.13.	 	No person is a shadow director of the Company within the meaning of section
741(2) CA 1985.

	 
	 	13.14.	 	There are no amounts of remuneration outstanding (including bonuses, holiday pay,
and liabilities under section 13 Employment Rights Act 1996 accrued to the
Completion Date) to any existing or former employee or director of the Company
(other than amounts representing salary accrued due for the current pay period or
for reimbursement of legitimate business expenses).

	 
	 	13.15.	 	No existing employee or director of the Company has given notice to terminate, or
is under notice of termination of, and there are no grounds on which any such
employee or director may give, or may be given, notice to terminate, his employment
with the Company.

	 
	 	13.16.	 	The Company has not made an offer of employment to any person which has yet to be
accepted or rejected.

	 
	 	13.17.	 	No individual is seconded to or from the Company.

	 
	 	13.18.	 	No employee of the Company is required to have a work permit in order to perform
his duties in full.

	 
	 	13.19.	 	There are no amounts owing to present or former directors, officers, employees or
workers of the Company other than not more than one month’s arrears of remuneration
accrued or due or for reimbursement of business expenses incurred within a period
of three months preceding the date of this agreement and no moneys or benefits
other than in respect of remuneration or emoluments of employment are payable to or
for the benefit of any present or former director, officer, employee or worker of
the Company, nor any dependant of any present or former director, officer, employee
or worker of the Company.

	 
	 	13.20.	 	Save to the extent (if any) to which provision or allowance has been made in the
Accounts:-







	 	13.20.1.	 	no liability has been incurred or is anticipated by the
Company for breach of any contract of employment or worker’s
contract or for services or for severance payments or for
redundancy payments or protective awards or for compensation for
unfair dismissal or for failure to comply with any order for the
reinstatement or re-engagement of any employee or for sex, race
or disability discrimination or for any other liability accruing
from the termination or variation of any contract of employment
or for services or worker’s contract;

	 
	 	13.20.2.	 	no gratuitous payment has been made or promised by the
Company in connection with the actual or





 









 






	 	 	 	proposed termination, suspension or variation of any
contract of employment or for services or worker’s
contract of any present or former director, officer,
employee or worker or any dependant of any present or
former director, officer, employee or worker of the
Company; and

	 
	 	13.20.3.	 	the Company has not made or agreed to make any payment to or
provided or agreed to provide any benefit or change in terms and
conditions of employment for any present or former director,
officer, employee or worker of the Company in connection with the
sale and purchase under this agreement.







	 	13.21.	 	The Company has not received any request for employee information or an information
and consultation agreement pursuant to the Information and Consultation of Employees
Regulations 2004, no negotiations have been initiated in respect of an information
and consultation agreement and there is no such information and consultation
agreement in place.

	 
	 	13.22.	 	The terms and conditions of employment of Ben Watson, Brian Smith, Graham Wood and
Mr Istenes are fully accurately and completely set out in the contracts of employment
produced to the Buyer notwithstanding any prior contracts or arrangements with
Pearpoint Limited or any other person.

	 
	 	13.23.	 	The Company has not during the period of six months immediately preceding the date
of this agreement made any pay awards to its employees or independent contractors
which have been backdated.







	14	 	Pensions







	 	14.1.	 	In this paragraph 14 these definitions apply:







	 	14.1.1.	 	“Pension Arrangement” means an agreement, arrangement, custom or
practice (whether legally enforceable or not) for the payment of or
contribution towards any Benefits;

	 
	 	14.1.2.	 	“Benefits” means pensions, allowances, lump sums or other like
benefits payable on retirement or on death or during periods of
sickness or disablement; and

	 
	 	14.1.3.	 	“Employees” means the Company’s employees, directors, former
employees and former directors.







	 	14.2.	 	Other than the Scheme there is no Pension Arrangement in operation for
the benefit of any of the Employees or for the benefit of any dependants of
Employees and no assurance has been given to any of the Employees about the
introduction of any Pension Arrangement nor have any discussions or consultations
been instituted.

	 
	 	14.3.	 	Full details of the Scheme have been given to the Buyer in the form of
complete and correct copies of:







	 	14.3.1.	 	all rules governing or relating to the Scheme;





 









 












	 	14.3.2.	 	all current booklets, announcements and other explanatory
literature issued to the Employees who are members of the Scheme
and copies of letters or other documents relating to arrangements
for individual members or groups of members;

	 
	 	14.3.3.	 	a list of all Employees who participate in the Scheme;

	 
	 	14.3.4.	 	a list of all Employees who will become eligible to join the
Scheme on the satisfaction of any conditions of eligibility;

	 
	 	14.3.5.	 	a list of all contributions payable under the Scheme and the
basis on which they are calculated; and

	 
	 	14.3.6.	 	all agreements with any person for the provision of services
relating to the Scheme.







	 	14.4.	 	There is no obligation to provide benefits under, or make
contributions to, the Scheme except as fairly disclosed in the Disclosure Letter.

	 
	 	14.5.	 	All liabilities in respect of any costs fees and expenses in relation
to the Scheme (whether or not already invoiced) will have been met by Completion.

	 
	 	14.6.	 	In relation to the Scheme:







	 	14.6.1.	 	the current rates and amounts of all contributions are set out
in the Disclosure Letter and there are not at the date of this
agreement any contributions to the Scheme from or in respect of
Employees or other payments which have fallen due but are unpaid;

	 
	 	14.6.2.	 	employer and employee contributions in respect of the Employees
have been made promptly at the time that they were due; the Scheme
is a money purchase scheme (as defined in section 181(1) Pension
Schemes Act 1993) and the Benefits payable under the Scheme whether
immediate, prospective or contingent, are solely the Benefits which
can be provided by the funds available for each member under the
Scheme;







	 	14.7.	 	The Scheme is approved under Chapter IV Part XIV ICTA 1988 and the
Seller is not aware of any circumstances which will or may result in withdrawal of
that approval.

	 
	 	14.8.	 	The Scheme is a contracted-out scheme for the purposes of the Pension
Schemes Act 1993 and has been administered in accordance with the contracting-out
requirements of Part III of that Act. The Company holds or is named on a current
contracting-out certificate in relation to the Scheme.

	 
	 	14.9.	 	The Scheme does not distinguish between male and female members in the
provision of benefits relating to periods of pensionable service after 17 May 1990
and no adverse alteration has been made to benefits already accrued at the date of
announcing changes designed to equalise benefits.

	 
	 	14.10.	 	The Scheme has not at any time excluded Employees from eligibility for membership
on the grounds of specified hours of work.







 












 






	 	14.11.	 	The Scheme has been administered in accordance with all applicable
legislation and with due regard to the general requirements of law.

	 
	 	14.12.	 	The Scheme has not since 1 October 2002 excluded Employees from eligibility for
membership on the grounds of having a fixed-term contract of employment.

	 
	 	14.13.	 	There are no circumstances which could result in any penalty under the Pensions
Act 1995 becoming payable by the Company.

	 
	 	14.14.	 	The Company has not participated in any occupational pension scheme other than
the Scheme.

	 
	 	14.15.	 	Since 30 August 1993 no Employee has had his contract of employment transferred
to the Company from another employer in circumstances where the Transfer of
Undertakings (Protection of Employment) Regulations 1981 or 2006 applied to the
transfer of his contract of employment.

	 
	 	14.16.	 	The Company has at all times complied with its obligations under the Welfare
Reform and Pensions Act 1999 and any regulations made thereunder in relation to the
provision of access for Employees to a stakeholder scheme (as defined in section 1
of that Act) including:







	 	14.16.1.	 	undertaking the necessary consultation process with the
Employees in selecting the stakeholder scheme; and

	 
	 	14.16.2.	 	designating the stakeholder scheme; and

	 
	 	14.16.3.	 	there are no circumstances which could result in any penalty
for failure to comply with that Act or regulations made under it
becoming payable by the Company.







	15	 	Commercial Contracts and Joint Ventures







	 	15.1.	 	There are not now outstanding:







	 	15.1.1.	 	any debenture, mortgage, charge, lien or other Security Interest
given or issued by or in relation to the Company and not disclosed
against any other Warranty;

	 
	 	15.1.2.	 	any contract or arrangement to which the Company is party and
which is loss-making;

	 
	 	15.1.3.	 	any agreements or arrangements (whether executed or executory)
entered into by the Company otherwise than by way of bargain at
arm’s length or otherwise than in the ordinary course of business;

	 
	 	15.1.4.	 	any contracts to which the Company is a party and which cannot
be assigned without the consent of another party;

	 
	 	15.1.5.	 	any powers of attorney given by the Company or any other
authority (express or implied) by which any person may enter into
any contract or commitment on behalf of the Company.





 









 












	 	15.2.	 	The Company is not a party to any such contract as is referred to in
section 169(4) CA 1985 (Disclosure by company of purchase of own shares) and

	 
	 	15.3.	 	The Company is not in material breach of any arrangement or contract
to which it is a party;

	 
	 	15.4.	 	The Company has not received notice of breach of any arrangement or
contract to which it is a party.

	 
	 	15.5.	 	The Company is not now nor has it ever been party to any joint
venture, consortium or partnership arrangement or agreement (including any limited
liability partnership) or a member of any unincorporated association.







	16	 	Unissued Capital







There are no agreements or instruments in force which require or confer the right
(conditionally or unconditionally) to require the issue of any share or loan capital of the
Company now or at any time in the future nor are there any agreements restrictions or
obligations entered into by or binding on the Company as to its unissued share or loan
capital




	17	 	Intellectual Property







	 	17.1.	 	Full and accurate details of all registrations of and applications for
registration of Intellectual Property and of all material unregistered Intellectual
Property are set out in the Disclosure Letter.

	 
	 	17.2.	 	Full and accurate details of all licences of any of the Intellectual
Property by or to the Company are contained in the Disclosure Letter.

	 
	 	17.3.	 	The Company owns all Intellectual Property Rights other than any Third
Party Software relating to products manufactured and services provided by it or on
its behalf or used by it in connection with its business in each case free from
Encumbrances.

	 
	 	17.4.	 	The Intellectual Property is valid and subsisting and there is no
claim nor any basis for, any claim for revocation, amendment, opposition or
rectification or any challenge to ownership or entitlement in respect of any of the
Intellectual Property (due to non-payment of renewal or other fees or for any other
reason).

	 
	 	17.5.	 	The Company has complied with all its obligations under any licence of
the Intellectual Property and no such licence is or will become liable to
termination because of any breach by or on behalf of the Company or the transaction
contemplated by this agreement.

	 
	 	17.6.	 	The Company is not required nor is it likely to become liable to pay a
royalty or any other sum to any third party in respect of any of the Intellectual
Property except as fairly disclosed in the Disclosure Letter.

	 
	 	17.7.	 	The Company is free to disclose any Business Information but has not
disclosed any of it except in the ordinary course of business and against written
undertakings from the recipient to keep all such disclosed Business Information
confidential, or to the Buyer.





 









 












	 	17.8.	 	The Company is not infringing nor has it ever infringed, either
directly or through any other person, the Intellectual Property Rights of any third
party and no third party has alleged any such infringement.

	 
	 	17.9.	 	None of the Intellectual Property constitutes, has constituted or is
likely to constitute, any breach of confidence, passing off or actionable unfair
competition in any jurisdiction.

	 
	 	17.10.	 	The Seller does not have any rights to use any of the Intellectual Property.

	 
	 	17.11.	 	No claim under sections 39 to 43 Patents Act 1977 (Right to employees’
inventions, etc.) or section 10 of the Patents Act 2004 (Rights to employees
inventions, compensation for inventions etc) and no assertion of any rights under
Chapter IV Copyright Designs and Patents Act 1988 (Moral Rights) or their
equivalents in any applicable territory have been made in respect of any of the
Intellectual Property.

	 
	 	17.12.	 	All Developed Software is owned by the Company and the source code of, and all
programmers’ notes, documentation and drafts relating to, all Developed Software
are kept in a secure environment and have not been disclosed to any third party.

	 
	 	17.13.	 	The Company does not require any Intellectual Property Rights other than the
Intellectual Property in order to carry on its business as presently constituted
including, but without limitation, the manufacture, use, sale, licence of and
support of its products and/or the provision of services to its customers.

	 
	 	17.14.	 	Full and accurate details of all Third Party Software used by the Company are set
out in the Disclosure Letter.







	18	 	Litigation, Offences and Processes







	 	18.1.	 	Apart from routine debt collection of amounts (not exceeding £5,000
individually or £25,000 in aggregate) due to Company in the ordinary course of
business the Company is not engaged in any litigation (whether criminal or civil),
arbitration, reference of any dispute or disagreement to an expert or any
alternative dispute resolution process and so far as the Seller is aware there are
no facts or circumstances likely to give rise to any such litigation, arbitration,
reference or alternative dispute resolution process.

	 
	 	18.2.	 	No injunction has been granted against the Company and the Company has
not given any undertaking to any Court or to any third party arising out of any
legal proceedings.

	 
	 	18.3.	 	No unsatisfied judgement is outstanding against the Company.

	 
	 	18.4.	 	No distress execution or other process has been levied on any asset of
the Company nor has any person threatened any such distress execution or other
process.

	 
	 	18.5.	 	The Company is not, and has never been, party to or concerned in any
agreement, arrangement, understanding or practice which constitutes a breach of any
term or condition of any licence, authorisation, appointment, code or similar
instrument applicable to the Company or its business and





 









 






	 	 	 	the Company has not received any notice of any alleged such breach. The
Company complies in all material respects with all Official Requirements
affecting it and/or the conduct of its business.







	19	 	Insolvency







	 	19.1.	 	No order has been made and no resolution has been passed for the
winding up of the Company or for a provisional liquidator to be appointed in
respect of the Company and no petition has been presented and no meeting has been
convened for the purpose of winding up the Company.

	 
	 	19.2.	 	No administration order has been made and no petition for such an
order has been presented in respect of the Company nor has an administrator been
appointed in respect of the Company, nor has any notice of intention to appoint any
such administrator been given, nor have any other steps been taken by any person
(including the Seller, the Company or its directors) to appoint any such
administrator.

	 
	 	19.3.	 	No person has appointed or threatened to appoint a receiver (including
any administrative receiver) in respect of the Company or any of their respective
assets.

	 
	 	19.4.	 	The Company is not insolvent, or unable to pay its debts within the
meaning of section 123 Insolvency Act 1986 and nor has it stopped payment of its
debts as they fall due.

	 
	 	19.5.	 	No voluntary arrangement has been proposed under section 1 Insolvency
Act 1986 in respect of the Company.

	 
	 	19.6.	 	No event analogous to any of the above has occurred in or outside
England and Wales.

	 
	 	19.7.	 	No event analogous to any of the above has occurred in respect of the
Seller in or outside England and Wales







	20	 	Grants







The Company has not done or omitted to do or agreed to do or to omit to do anything as a
result of which all or any part of any investment or other grant or employment subsidy or
similar payment made or due to be made to the Company is or may be liable to be repaid,
forfeited or withheld in whole or in part.




	21	 	Special Contracts and Arrangements







	 	21.1.	 	The Company has not at any time:







	 	21.1.1.	 	repaid, redeemed or purchased or agreed to repay, redeem or
purchase any shares in its share capital or otherwise reduced or
agreed to reduce its issued share capital or any class of issued shares;

	 
	 	21.1.2.	 	directly or indirectly provided any financial assistance (as
defined for the purpose of section 151 CA 1985) for the purpose of
the acquisition of its shares (including the entering into and
completion of this agreement) or shares in any company which was at
the relevant time its holding company or for the purpose of
reducing or discharging any





 









 






	 	 	 	liability incurred in any such acquisition whether in accordance
with section 155 CA 1985 or otherwise; or

	 
	 	21.1.3.	 	capitalised or agreed to capitalise in the form of shares,
debentures or other securities or in paying up any amounts unpaid
on any shares debentures or other securities any profits or
reserves of any description or passed or agreed to pass any
resolutions to do so.







	22	 	Transactions with Shareholders or Directors and Others







	 	22.1.	 	Except for bona fide employment or consultancy contracts with
executive directors of the Company in the ordinary course of business, no
transactions, contracts or arrangements (including any loan or Guarantee made or
given by the Company) have been entered into since incorporation to which the
Company is a party in which a shareholder in or director of the Company or any
person connected with a shareholder in or director of the Company has been
interested whether directly or indirectly.

	 
	 	22.2.	 	No moneys are owed by the Company to any director of the Company or to
the Seller or to any person connected with any such director or the Seller or to
any company or partnership in which any of those directors or the Seller are
directly or indirectly interested other than as holders of listed securities.

	 
	 	22.3.	 	The Company has no debts owed to it by its directors or any of them or
by the Seller (or by a person connected with any such director or the Seller) or by
any company in which the directors of the Company or any of them or the Seller (or
any person connected with any of them) are directly or indirectly interested (other
than as holders of listed securities) nor do the Seller or the Company’s directors
or any of them (or any person connected with any of them) or any such company have
any claims against the Company on any account including claims for compensation for
loss of office or for unfair dismissal or redundancy payment.







	23	 	Administration







	 	23.1.	 	There are attached to the Disclosure Letter accurate copies of the
Memorandum and Articles of Association of the Company incorporating all amendments
made up to and including the date of this agreement.

	 
	 	23.2.	 	The register of members of the Company contains an accurate record of
the members and all former members of the Company and their holdings of shares in
the capital of the Company.

	 
	 	23.3.	 	All mortgages charges and debentures by or in favour of the Company to
which section 395 CA 1985 applies have been registered in accordance with the
provisions of that section.

	 
	 	23.4.	 	No direction has been given to the Company under section 28 CA 1985
(Change of name).

	 
	 	23.5.	 	All returns, particulars, resolutions and other documents required to
be filed with or delivered to the Registrar of Companies and the Department of
Trade and Industry by the Company have been correctly and properly prepared and so
filed or delivered.





 









 






	 	23.6.	 	All the accounts books ledgers and financial and other material
records of whatever kind of the Company are held or stored in means which are under
the exclusive ownership and control of the Company, have at all times been properly
and accurately kept and completed in all material respects and record all matters
required to be entered in them by CA 1985.







	24	 	Competition Matters







	 	24.1.	 	The Company is not and has never been party to or concerned in any
agreement, arrangement, understanding or concerted practice, or any other conduct
or practice (unilateral or otherwise) which:







	 	24.1.1.	 	contravenes the Competition Act 1998 or the Enterprise Act 2002;

	 
	 	24.1.2.	 	infringes Articles 81 or 82 EC Treaty or any similar provisions
of the ECSC, Euratom or EEA Treaties, or any other competition
provision of those treaties or enacted under them, including any
rule relating to state aid, public procurement or anti-dumping;

	 
	 	24.1.3.	 	was required to be furnished to the Director General of Fair
Trading under the Restrictive Trade Practices Act 1976;

	 
	 	24.1.4.	 	constitutes a breach of any relevant undertaking, order,
assurance or other measure taken under the Fair Trading Act 1973,
the Restrictive Trade Practices Act 1976, the Resale Prices Act
1976 or the Competition Act 1980; or

	 
	 	24.1.5.	 	infringes any competition, anti-trust or equivalent legislation
of any other jurisdiction.







	 	24.2.	 	The Company is not subject to any prohibition, order, condition,
undertaking, assurance or similar measure or obligation imposed by or under any of
the laws referred to in paragraph 24.1.

	 
	 	24.3.	 	The Company is not, and has never been, subject to any enquiry,
investigation, request for information, notice or other communication (whether
formal or informal, and whether or not in writing) by any Relevant Authority under
any of the laws referred to in paragraph 24.1.

	 
	 	24.4.	 	The Seller has no reason to believe that any such action as is
mentioned in paragraphs 24.2 or 24.3 will be taken against the Company in relation
to any of its current activities.

	 
	 	24.5.	 	Particulars of any agreements, practices and arrangements to which the
Company is a party which are registrable with the Director-General of Fair Trading
in the United Kingdom or with the Directorate-General for Competition at the
Commission of the European Communities (as the case may be) have been correctly
registered.







	25	 	IT Systems







	 	25.1.	 	Accurate copies of the IT Contracts including but without limitation
all the agreements required to use, support, maintain and/ or develop all
components of the IT Systems (including all licences, development agreements,
software maintenance and support agreements, hardware





 









 






	 	 	 	maintenance agreements, source code escrow agreements and disaster recovery
agreements) are attached to the Disclosure Letter.

	 
	 	25.2.	 	The Company has not breached any of its obligations under any of the
agreements referred to in paragraph 25.1, those agreements all remain in force and
effective as at the date of this agreement and no notice has been served by any
person to terminate any of those agreements.

	 
	 	25.3.	 	Except as stated in the agreements referred to in paragraph 25.1, the
Company is not subject to any restriction in using the IT Systems (whether by way
of a technical device or otherwise).

	 
	 	25.4.	 	The use of the IT Systems by the Company does not infringe the
Intellectual Property Rights of any third party.

	 
	 	25.5.	 	The operation of the IT Systems and the storage, processing and
retrieval of all data stored on the IT Systems is under the exclusive control of
the Company and any Intellectual Property Rights in that data are owned solely by
the Company.

	 
	 	25.6.	 	The Company has in its possession an up-to-date, useable and complete
copy of the source code for all Developed Software together with copies of all
programmer’s commentaries and technical documentation required to allow the
continuing maintenance and development of that software by the Group Company.

	 
	 	25.7.	 	The IT Systems have adequate functionality, capability and capacity
for the present and foreseeable future requirements of the Company and each part of
the IT Systems is compatible with each other part.

	 
	 	25.8.	 	The IT Systems have operated without material errors or material
down-time for the two years immediately prior to the date of this agreement.

	 
	 	25.9.	 	All support and maintenance agreements relating to the IT Systems have
been in force and effective throughout their term and all renewals, charges and
other fees have been paid in respect of each of them at the appropriate time and
there are no such renewals, charges or fees outstanding or falling due for payment
within one month after Completion.

	 
	 	25.10.	 	The IT Systems have been satisfactorily maintained in accordance with the support
and maintenance agreements referred to in paragraph 25.9, copies of which are
attached to the Disclosure Letter.

	 
	 	25.11.	 	The Company is using the most recent version of all Third Party Software.

	 
	 	25.12.	 	The Company has adequate copies of all user manuals, technical documentation and
any other documentation required to operate, maintain and support the IT Systems
and is fully licensed to use each of them for those purposes.

	 
	 	25.13.	 	Disaster recovery plans are in effect to ensure that any part of the
functionality of the IT Systems which is critical to the Company can be replaced or
substituted within 24 hours in the event of damage to, or destruction of, some or
all of the IT Systems and those plans have been successfully tested in the 12
months prior to Completion.





 









 












	 	25.14.	 	Prudent and up-to-date procedures to ensure internal and external security of the
IT Systems, (including procedures for taking and storing on-site and off-site
back-up copies of computer programs and data, for preventing introduction of
viruses into the IT Systems and for the protection of security of data stored on
the IT Systems) have been established by the Company, have been complied with in
all material respects and so far as the Seller is aware have been effective for
those purposes.

	 
	 	25.15.	 	There are sufficient technically competent and trained employees employed by the
Company to ensure proper handling, operation, monitoring and use of the IT Systems.

	 
	 	25.16.	 	Neither the performance, accuracy nor functionality of the IT Systems has been,
is or will be adversely affected by any date values which may reasonably be imputed
into and/ or used by the IT Systems.

	 
	 	25.17.	 	The IT Systems have not been used to hold or process data in any manner which
contravenes the DPA 1998.







	26	 	Data Protection







	 	26.1.	 	Neither the Seller nor the Company has shared the Personal Data with
any organisation competing with the business of the Buyer.

	 
	 	26.2.	 	The Seller will not retain a copy of the Personal Data after
Completion.

	 
	 	26.3.	 	There are no Data Subject access requests outstanding as at Completion
in relation to the Personal Data.

	 
	 	26.4.	 	The Seller and Company may lawfully transfer the Personal Data to the
Buyer and the Buyer may lawfully use all the Personal Data for the purposes of its
business and the businesses of each members of the Buyer’s Group.

	 
	 	26.5.	 	The consents held from Data Subjects in relation to the Processing of
the Personal Data are valid and up-to-date.

	 
	 	26.6.	 	There are no outstanding complaints, legal actions, proceedings,
assessments, investigations or other queries outstanding from any party including
Data Subjects and The Office of the Information Commissioner in respect of the
Processing of the Personal Data by the Seller or the Company.

	 
	 	26.7.	 	Neither the Company nor any of its directors, employees or Data
Processors (as defined from time to time in DPA 1998) has acted, or omitted to act,
in any way which may constitute a breach of DPA 1998.

	 
	 	26.8.	 	The Company has maintained, and continues to maintain as at
Completion, a valid, accurate and up-to-date notification of the purposes for which
it Processes Personal Data with The Office of the Information Commissioner.

	 
	 	26.9.	 	Neither the Seller nor the Company has transferred the Personal Data
outside the European Economic Area without having complied fully with the DPA and,
in particular, Schedule 8 DPA 1998.







	27	 	Freedom of Information Act





 









 












	 	27.1.	 	The Company has complied with all obligations imposed on it by the
Freedom of Information Act 2000 and any regulations made under it.

	 
	 	27.2.	 	No Decision Notices, Enforcement Notices or Information Notices have
been made against the Company by the Information Commissioner or, if any have been
made, then no responses, or any steps to be taken, are outstanding.

	 
	 	27.3.	 	There are no current and/or outstanding Freedom of Information Act
requests for information made in respect of which the Company has not fully
complied or which are subject to question, complaint or appeal.

	 
	 	27.4.	 	The Company has not received any Freedom of Information Act requests
for information at any point within the last 4 months.







	28	 	Effect of this Agreement







	 	28.1.	 	The execution and delivery of, and compliance with the terms of, this
agreement does not and will not of itself:







	 	28.1.1.	 	result in a breach of or constitute a default under any of the
terms, conditions or provisions of any agreement or instrument to
which the Company is a party or any provision of the Memorandum or
Articles of Association of the Company or any lease, contract,
order, judgement, award, injunction, regulation or other
Encumbrance, restriction or obligation by which any asset of the
Company is bound or subject;

	 
	 	28.1.2.	 	relieve any person from any material contractual obligation to
the Company or enable any person to determine any such obligation
or any right or benefit enjoyed by the Company or to exercise any
right whether under an agreement with or otherwise in respect of
the Company;

	 
	 	28.1.3.	 	result in the creation, imposition, crystallisation or
enforcement of any Encumbrance on any of the Sale Shares or on any
of the assets of the Company; or

	 
	 	28.1.4.	 	result in any present or future indebtedness, imposition,
crystallisation or enforcement of any Encumbrance on any of the
Sale Shares or any of the assets of the Company.





 









 












PART 2 — TAX WARRANTIES





	1	 	Returns Notices and Records







	 	1.1.	 	All accounts, computations notices and returns required to be made or
submitted by the Company to any Tax Authority and all notices and information
required to be given by the Company to any Tax Authority (including all returns and
other documents or information in respect of PAYE and National Insurance) have been
properly and duly prepared and punctually made submitted or given by the Company
and are up-to-date and correct.

	 
	 	1.2.	 	There are attached to the Disclosure Letter copies of the corporation
tax computations and returns of the Company (together with copies of all
assessments and correspondence with the HMRC relating to them) in respect of the
period since incorporation of the Company and ended on the Accounts Date.

	 
	 	1.3.	 	The Company is not nor, in the period of three years ended on the date
of this agreement, has the Company been, in dispute with or subject to any visit,
audit, enquiry, investigation, discovery or access order by any Tax Authority
(other than routine enquiries concerning the corporation tax computations of the
Company, all of which have been resolved) and there are no facts or circumstances
likely to give rise to or be the subject of any such dispute, enquiry or
investigation.

	 
	 	1.4.	 	All statements and disclosures made to any Tax Authority in connection
with any provision of Tax Legislation were when made complete and accurate and the
Company has been concerned in any transaction to which any of the following
provisions have been or will be applied:







	 	1.4.1.	 	sections 135 to 137 (inclusive) TCGA 1992;



	 
	 	1.4.2.	 	sections 219 to 229 (inclusive) ICTA 1988;

	 
	 	1.4.3.	 	sections 703 and 704 ICTA 1988;

	 
	 	1.4.4.	 	section 776 ICTA 1988;

	 
	 	1.4.5.	 	sections 779 to 786 (inclusive) ICTA 1988;

	 
	 	1.4.6.	 	section 139 TCGA 1992; and

	 
	 	1.4.7.	 	section 192 TCGA 1992 and sections 213 to 218 (inclusive) ICTA
1988.







	2	 	Payment of Tax







	 	2.1.	 	The Company has duly and punctually paid all Tax to the extent that it
ought to have been paid and has not in the last three years paid or become liable
to pay any penalty or interest charged by virtue of the provisions of any Tax
Legislation.

	 
	 	2.2.	 	There are set out in the Disclosure Letter details of quarterly
payments of corporation tax made on account and, to the best of the Seller’s
knowledge,





 









 






	 	 	 	information and belief those payments were when made and remain for the correct
amount.

	 
	 	2.3.	 	The Company has not during the period of three years ending on the date
of this agreement relied on any formal or informal unpublished concession
dispensation or practice which affects the amount of Tax chargeable on the Company
or which purports to modify or provide exemption from any obligation to make or
submit any computation notice or return to any Tax Authority.







	3	 	Accounts







	 	3.1.	 	The provision or reserve for Tax in the Accounts is sufficient to cover
all liabilities of the Company for Tax as at the Accounts Date and all Tax for
which the Company may after the Accounts Date become or have become liable in
respect of or by reference to:

	 
	 	3.2.	 	any income profits or gains for any period which ended on or before the
Accounts Date;

	 
	 	3.3.	 	any distributions made on or before the Accounts Date or provided for
in the Accounts; or

	 
	 	3.4.	 	any Event occurring on or before the Accounts Date.

	 
	 	3.5.	 	All claims, disclaimers, elections, appeals or applications which the
Company has made or is entitled to make in respect of Tax are set out or referred
to in the Disclosure Letter.







	4	 	Events Since the Accounts Date







	 	4.1.	 	None of the following Events has occurred since the Accounts Date:







	 	4.1.1.	 	an acquisition, disposal or revaluation of any intangible fixed
asset (within the meaning of Schedule 29 Finance Act 2002);

	 
	 	4.1.2.	 	a deemed (as opposed to an actual) acquisition disposal or supply
of assets goods services or business facilities;

	 
	 	4.1.3.	 	a disposal or supply of assets goods services or business
facilities by the Company for a consideration which is treated for
the purposes of Tax as greater than the actual consideration;

	 
	 	4.1.4.	 	an acquisition by or supply to the Company of assets goods
services or business facilities for a consideration which is
treated for the purposes of Tax as less than the actual
consideration;

	 
	 	4.1.5.	 	a distribution within the meaning given by Part VI ICTA 1988
(company distributions, tax credits etc.) or within section 418
ICTA 1988 (expenses treated as distributions);

	 
	 	4.1.6.	 	an Event which results in the Company being liable for Tax for
which it is not primarily liable;





 









 






	 	4.1.7.	 	an Event in respect of which a Tax Liability arises as a result
of a failure by the Company to withhold, deduct or account for Tax;

	 
	 	4.1.8.	 	an Event giving rise to a liability under Part XVII ICTA 1988
(tax avoidance); or

	 
	 	4.1.9.	 	an Event giving rise to a balancing charge.







	 	4.2.	 	In this paragraph 4 “business facilities” means business facilities of
any kind including a loan of money or a letting, hiring or licensing of any
tangible or intangible property.







	5	 	Continuity of Trade







	 	5.1.	 	As at the Accounts Date the Company did not have any trading losses or
surplus advance corporation tax available for carry forward.

	 
	 	5.2.	 	Within the period of three years ending on the date of this agreement:







	 	5.2.1.	 	the Company has not discontinued any trade or business or made a
major change in the nature or conduct of a trade or business
carried on by it;

	 
	 	5.2.2.	 	the scale of activities in any trade carried on by the Company
has not become small or negligible; and

	 
	 	5.2.3.	 	no change in ownership of the Company has taken place.







	 	5.3.	 	In this warranty 5 references to “the Company” include any predecessors
to the Company (within the meaning of section 343 ICTA 1988).







	6	 	Deductions and Withholdings

	 
	7	 	The Company has made all deductions and withholdings in respect of, or on account of, any Tax
(including amounts required to be deducted under the PAYE and National Insurance systems) from
any payments made by it which it is obliged or entitled to make and (to the extent required to
do so) has accounted in full to the relevant Tax Authority for all amounts so deducted or
withheld.

	 
	8	 	Distributions







	 	8.1.	 	The Company has not made or agreed to make any repayment of share
capital to which section 210(1) ICTA 1988 (bonus issue following repayment of share
capital) applies.

	 
	 	8.2.	 	The Company has not issued or agreed to issue any share capital as paid
up otherwise than by receipt of new consideration within the meaning of Part VI
ICTA 1988 (company distributions, tax credits etc).

	 
	 	8.3.	 	The Company has not in the period of three years ending on the date of
this agreement made (nor is it deemed to have made during that period) any
distribution within the meaning of ICTA 1988 except dividends properly authorised
and disclosed in its audited accounts.







	9	 	Close Company





 









 












	 	9.1.	 	The Company is a close company (within the meaning of section 414 ICTA
1988) and has never made or been deemed to have made a distribution for the
purposes of Part XI of ICTA 1988 except for dividends shown in its statutory
accounts.







	10	 	Loan Relationships







	 	10.1.	 	No liability to Tax or non-trading deficit would arise from the loan
relationships to which the Company is party being repaid to the extent of the
amounts shown in respect of those loan relationships in the books of the Company at
the date of this agreement.

	 
	 	10.2.	 	The Company is not the debtor pursuant to any loan relationship:







	 	10.2.1.	 	which has an unallowable purpose within the meaning of paragraph
13, Schedule 9 Finance Act 1996 (loan relationships for unallowable
purposes);

	 
	 	10.2.2.	 	to which paragraph 11 or paragraph 11A of that schedule applies
(transactions not at arms’ length);

	 
	 	10.2.3.	 	to which paragraph 2 of that schedule (late interest) applies or
has applied; or

	 
	 	10.2.4.	 	to which any of sections 92 (convertible securities etc), 93 or
93A (relationships linked to the value of chargeable assets) or 94
(indexed gilt-edged securities) Finance Act 1996 apply.







	11	 	Capital Gains







	 	11.1.	 	The sum which would be allowed as a deduction from the consideration
under section 38 TCGA 1992 (acquisition and disposal costs etc) of each asset of
the Company (other than trading stock) if disposed of on the date of this
agreement:







	 	11.1.1.	 	would not be less than (in the case of an asset held on the
Accounts Date) the book value of that asset shown or included in
the Accounts or (in the case of an asset acquired since the
Accounts Date) an amount equal to the consideration given for its
acquisition; and in particular

	 
	 	11.1.2.	 	would not be treated or deemed for the purposes of Tax to have
been reduced by reason of any claim made under sections 152
(roll-over relief) 153 (assets only partly replaced), 165 (relief
for gifts of business assets) or 175 (group rollover) TCGA 1992 or
by reason of the operation of section 17 (disposals and
acquisitions treated as made at market value), or sections 126 to
140 (re organisation of share capital, conversion of securities,
etc.) TCGA 1992.







	 	11.2.	 	No transaction has been entered into by the Company to which the
provisions of section 18 TCGA 1992 (transactions between connected persons) has
been or could be applied.





 









 






	 	11.3.	 	The Company does not own any depreciating asset in respect of which a
held-over gain may accrue under sections 154(2) and/or 175(3) TCGA 1992.







	12	 	Capital Allowances







	 	12.1.	 	No balancing charge in respect of any capital allowances claimed or
given would arise if any asset of the Company (or, where computations are made for
capital allowances purposes for pools of assets, all the assets in that pool) were
to be realised for a consideration equal to the amount of their book value as shown
or included in the Accounts (or, in the case of any asset acquired since the
Accounts Date, for a consideration equal to the consideration given for the
acquisition).

	 
	 	12.2.	 	There has not since the Accounts Date been a net reduction in the
aggregate tax written down value of the Relevant Assets of the Company. For the
purposes of this warranty:







	 	13	 	(a) it shall be assumed (whether or not this is in fact the
case) that:







	 	14	 	(i) the books of the Company are fully up to
date; and

	 
	 	15	 	(ii) no claim for capital allowances has yet
been made in respect of any period ending on or after the Accounts
Date;







	 	16	 	(b) ‘Relevant Assets’ means capital assets in respect of
which allowances have been or could be claimed under Capital Allowances Act
2001 or subsequent Finance Acts.







	17	 	Secondary Liability







	 	17.1.	 	To the best of the Seller’s knowledge information and belief no Event
has occurred in consequence of which the Company is or may be held liable to pay or
bear any tax which is primarily chargeable against or attributable to some person
firm or company other than the Company.







	18	 	Stamp Duty, Land Tax, Stamp Duties etc







	 	18.1.	 	No land transaction return has been made since the Accounts Date or is
outstanding and the Company will not be required to make any land transaction
return (including any further or amending return) in respect of any Relevant
Property.

	 
	 	18.2.	 	The Company is not nor, to the best of the knowledge, information and
belief of the Seller will it become, liable to pay any SDLT (or further SDLT) after
Completion in respect of any Relevant Property.

	 
	 	18.3.	 	The Company has duly paid all stamp duty or transfer duty (whether in
the United Kingdom or elsewhere) for which it is or has been or may be made liable
and without limitation:







	 	18.3.1.	 	all documents in the enforcement of which the Company is or may
be interested have been duly stamped; and





 









 






	 	18.3.2.	 	there are no documents outside the United Kingdom which if they
were brought into the United Kingdom would give rise to a liability
to stamp duty payable by the Company.







	 	18.4.	 	The Company has duly paid all stamp duty reserve tax for which it is
or has become liable and has not been party to any transfer of chargeable
securities (within the meaning of section 99 Finance Act 1986) in respect of which
the Company could become liable to pay any stamp duty reserve tax.

	 
	 	18.5.	 	The Company is not liable to any penalty in respect of any stamp duty,
or stamp duty reserve tax nor are there any circumstances or transactions in which
the Company is or has been a party which may result in the Company becoming liable
to such penalty.

	 
	 	18.6.	 	The Company has not in the period of six years ending on the date of
this agreement been party to any transaction in respect of which exemption or
relief has been claimed from stamp duty or SDLT, whether under section 42 Finance
Act 1930, section 151 Finance Act 1995, any of sections 75 to 77 Finance Act 1986,
Schedule 7 Finance Act 2003 or otherwise.

	 
	 	18.7.	 	In this warranty 14 references to:







	 	18.7.1.	 	“liability” includes any liability which is uncertain,
unascertained, deferred and /or contingent (and “liable” shall be
construed accordingly);

	 
	 	18.7.2.	 	“land transaction return” includes any self-certificate;

	 
	 	18.7.3.	 	“Relevant Property” means the Property and any real or leasehold
property in which any time on or before Completion the Company has
had or will have any interest, including any leasehold interest;
and

	 
	 	18.7.4.	 	“SDLT” means stamp duty land tax.







	19	 	Transactions with Associated Persons







	 	19.1.	 	The Company has not in the period of three years ending on the date of
this agreement been party to any non-arms length transaction.

	 
	 	19.2.	 	The Company has not in the period of three years ending on the date
of this agreement entered into or been party to any transaction (including any
loan) to which the provisions of Schedule 28AA of ICTA 1988 (provision not arm’s
length) have applied or could apply.







	20	 	Anti-Avoidance







	 	20.1.	 	The Company has not in the period of three years ending on the date of
this agreement been party to or otherwise involved in any scheme or arrangement the
main purpose or one of the main purposes of which was to avoid Tax.

	 
	 	20.2.	 	The Company is not nor has it ever been party to any arrangements,
transaction or series of transactions which:





 









 













	 	20.2.1.	 	involve or include any notifiable arrangement as defined in
section 306 Finance Act 2004 and the associated Tax Avoidance
Schemes (Prescribed Descriptions of Arrangements) Regulations 2004;
or

	 
	 	20.2.2.	 	it has or may become liable to notify to the Commissioners of
Customs & Excise by virtue of section 58A and Schedule 11A of VATA
1994 (disclosure of avoidance schemes) and the associated Value
Added Tax (Disclosure of Avoidance Schemes) Regulations 2004 and
Value Added Tax (Disclosure of Avoidance Schemes) (Designation)
Order 2004.







	21	 	Value Added Tax







	 	21.1.	 	The Company is registered for VAT in the United Kingdom under Schedule
1 VATA 1994 and has not at any time in the last six years been treated as (nor
applied to be) a member of a group of companies for VAT purposes.

	 
	 	21.2.	 	The Company is not registered (nor required to be registered) for
local VAT or its equivalent in any State other than the United Kingdom.

	 
	 	21.3.	 	The Company has retained in its possession all VAT records, invoices
and other necessary documents required to be preserved by VATA 1994 and all
applicable regulations and orders and all such records, invoices and documents are
up-to-date, complete and accurate.

	 
	 	21.4.	 	The Company is a taxable person for VAT purposes and has fully
maintained complete, correct and up-to-date records, invoices and other necessary
documents.

	 
	 	21.5.	 	The Company has not in the last three years been:







	 	21.5.1.	 	subject to any penalty or liability under any of sections 60 to
63 (inclusive), 65 or 67 to 69 (inclusive) VATA 1994;

	 
	 	21.5.2.	 	subject to any penalty or liability nor been given any penalty
liability notice within section 64 VATA 1994 (repeated
misdeclarations);

	 
	 	21.5.3.	 	given any surcharge liability notice within sections 59 or 59A
VATA 1994;

	 
	 	21.5.4.	 	given a notice within section 66 VATA 1994;



	 
	 	21.5.5.	 	given a warning within section 76(2) VATA 1994; or

	 
	 	21.5.6.	 	required by HMRC to give any security.







	 	21.6.	 	In respect of each VAT quarter ending after the Accounts Date:







	 	21.6.1.	 	No credit for input tax of the Company has been or, to the best
of the Seller’s knowledge, information and belief, will be
prevented or disallowed in whole or in part by reason of section
26A VATA 1994 (disallowance of input tax where consideration not
paid);





 









 






	 	21.6.2.	 	The Company has not made any exempt supplies in consequence of
which it has been or will be unable to obtain credit for all input
tax paid by it.







	 	21.7.	 	No circumstances exist whereby the Company would or might become
liable for value added tax under the provisions of sections 47 (agents etc.) or 48
(tax representatives) VATA 1994.

	 
	 	21.8.	 	The Company has not made nor is it otherwise bound by any election
made under paragraph 2 of schedule 10 VATA 1994.

	 
	 	21.9.	 	The Company has not made any exempt supplies in consequence of which
it is or will be unable to obtain credit for all input tax paid by it during any
value added tax quarter ending after the Accounts Date.

	 
	 	21.10.	 	 

	 
	 	21.11.	 	The Company has not been party to a transaction to which Article 5 Value Added
Tax (Special Provisions) Order 1995 (transfer of business as a going concern) has
(or has purported to have been) applied.

	 
	 	21.12.	 	No asset of the Company is a capital item, the input tax on which could be
subject to adjustment in accordance with the provisions of Part XV Value Added Tax
Regulations 1995.

	 
	 	21.13.	 	The Company has no interest in any new or uncompleted buildings or civil
engineering works within the meaning of Group 1 Schedule 9 VATA 1994.

	 
	 	21.14.	 	The Company has not been engaged in any transaction which has resulted or could
result in the Company being treated as making any supply to itself for value added
tax purposes.







	22	 	Duties

	 
	23	 	All Tax payable on the importation of goods and all customs and excise duties payable to H M
Customs & Excise in respect of any assets (including trading stock) imported or owned by the
Company have been paid in full.

	 
	24	 	Groups







	 	24.1.	 	The Company is not and has never been a member of any group of
companies.







	25	 	Deductions







	 	25.1.	 	The Company has not in the last three years made any payment or
incurred any liability to make any payment of a revenue nature which could be
disallowed as a deduction in computing the taxable profits of the Company or as a
charge on the Company’s income.

	 
	 	25.2.	 	In respect of each intangible fixed asset (within the meaning of
Schedule 29 Finance Act 2002) acquired, created or enhanced on or after April 1,
2002 and held by the Company on the Accounts Date (or acquired, created or enhanced
after the Accounts Date and before Completion), the Disclosure Letter sets out
details of:





 









 












	 	25.2.1.	 	the aggregate expenditure on that asset;

	 
	 	25.2.2.	 	the amount of that expenditure in respect of which a debit for
Tax purposes has already been obtained or claimed in relation to
periods ended on or before the Accounts Date; and

	 
	 	25.2.3.	 	the net balance of that expenditure remaining (if any) in
respect of which the Company has not yet made any claim for a
debit.







	26	 	Inheritance Tax







	 	26.1.	 	The Company is not nor will it become liable to be assessed to
inheritance tax as donor or donee of any gift or as transferor or transferee of
value (actual or deemed) nor as a result of any disposition chargeable transfer or
transfer of value (actual or deemed) made by or deemed to be made by any other
person.

	 
	 	26.2.	 	There is no unsatisfied liability to capital transfer tax or
inheritance tax attached or attributable to the assets of the Company and such
assets are not subject to an Inland Revenue charge.

	 
	 	26.3.	 	To the best of the knowledge, information and belief of the Seller, no
person has the power under section 212 Inheritance Tax Act 1984 (powers to raise
tax) to raise any inheritance tax by sale or mortgage of or by a terminable charge
on any of the Company’s assets or shares.







	27	 	Foreign Connections







	 	27.1.	 	No transaction described in section 765 (1) ICTA 1988 (migration, etc
of companies) or 765A ICTA 1988 (movements of capital between residents of member
States) has been carried out or proposed by or in relation to the Company.

	 
	 	27.2.	 	The Company has never been resident outside the United Kingdom for the
purposes of any Tax Legislation.

	 
	 	27.3.	 	The Company has not (and in the period of three years ending on the
date of this agreement has not had) any branch, agent or permanent establishment
(within the meaning of the OECD Model Double Taxation Agreement) outside the United
Kingdom.

	 
	 	27.4.	 	The Company has not and has not in the last seven years had any
interest in:







	 	27.4.1.	 	a controlled foreign company within the meaning of section 747
ICTA 1988 (imputation of chargeable profits and creditable tax of
controlled foreign companies); or

	 
	 	27.4.2.	 	a material interest in an offshore fund within the meaning of
Chapter V of Part XVII ICTA 1988.







	 	27.5.	 	The Company has not been (nor is it liable to be) assessed to Tax as
the permanent establishment, agent or representative of any person not resident in
the United Kingdom.





 









 












	28	 	Share and Bonus Schemes







	 	28.1.	 	None of the consideration for the sale of the Sale Shares to the Buyer
will be treated as income in respect of which PAYE and/or National Insurance will
have to be accounted (whether by the Buyer, the Company or any other person).

	 
	 	28.2.	 	Except for the grant of options to the B Shareholders under the
Enterprise Management Incentive Scheme (details of such grants being fairly
disclosed in the Disclosure Letter) the Company has not established (nor is it a
participant in) any bonus, share option, profit related pay or other scheme or
arrangement, whether or not approved by the Inland Revenue, for the benefit of its
current or former officers or employees or any of them.

	 
	 	28.3.	 	No employee or officer (or former employee or officer) of the Company:







	 	28.3.1.	 	has since the Accounts Date exercised or surrendered any share
options;

	 
	 	28.3.2.	 	at the date of this agreement holds any unexercised share
options the exercise or future exercise or surrender of which may
result in a liability for the Buyer, the Company or any other
person to account for PAYE and/or National Insurance.







No reportable event (within the meaning of section 421K Income Tax (Earnings and
Pensions) Act 2003) has occurred on or after April 6, 2003.




 












 





SCHEDULE 5




PROVISIONS FOR THE PROTECTION OF THE SELLER





	1	 	Introduction and Purpose







	 	1.1.	 	This schedule 5 together with Article 4 (Indemnification limitations;
Escrowed funds) of the Joint Issues Agreement contain provisions intended to limit
the liability of the Seller under the Warranties and, where referred to, the Tax
Covenant and the covenants to pay under clause 13.

	 
	 	1.2.	 	In this schedule 5:







“Claim” means any claim which would (but for the provisions of this schedule 5) be
capable of being made against the Seller in respect of any liability under the
Warranties (“a Warranty Claim”) any Indemnity Claim and any Covenant Claim;




“Covenant Claim” means any claim which would (but for the provisions of this
schedule 5) be capable of being made against the Seller in respect of any liability
under the Tax Covenant;




“Indemnity Claim” means any claim which would (but for the provisions of this
schedule 5) be capable of being made against the Seller in respect of any liability
under the covenants to pay in clause 13;




“IP Claim” means a claim which would (but for the provisions of this schedule 5) be
capable of being made against the Seller in respect of any liability under the
Warranties which relate to Intellectual Property and/or Intellectual Property
Rights; “Relevant Assets” means any premises, chattels, accounts, documents and
records which are relevant to a Claim and are within the power, possession or
control of the Buyer and/or the Company;




“Relevant Third Party Claim” means any claim by a third party against the Company
and/or the Buyer which will or may give rise to a Claim;




“Relevant Third Party IP Claim” means any claim by a third party against the
Company and/or the Buyer which will or may give rise to an IP Claim;




“Third Party Recovery Right” means any right to which the Buyer or the Company is
or becomes entitled (whether by way of payment, discount, credit, set off,
counterclaim or otherwise) to recover from any third party any sum in respect of
any loss, damage or liability which is or may be the subject of a Claim; and




“Third Party IP Recovery Right” means any right to which the Buyer or the Company
is or becomes entitled (whether by way of payment, discount, credit, set off,
counterclaim or otherwise) to recover from any third party any sum in respect of
any loss, damage or liability which is or may be the subject of an IP Claim




	2	 	Exclusion of Certain Warranty Claims







	 	2.1.	 	No Warranty Claim shall be made by the Buyer against the Seller and the
Seller shall have no liability to the Buyer thereunder in respect of any
liability:





 









 












	 	2.1.1.	 	paid or satisfied on or before Completion to the extent reflected
in the Completion Accounts PROVIDED THAT this exclusion shall apply
only where the Seller has made payment in full to the Buyer of any
sums due to the Buyer pursuant to clause 6.1 of this agreement;

	 
	 	2.1.2.	 	to the extent to which it was taken into account in computing the
NAV (including by the making of any provision or reserve in the
Completion Accounts) or in respect of any matter or liability which
was fairly disclosed or noted in the Completion Accounts PROVIDED
THAT this exclusion shall apply only where the Seller has made
payment in full to the Buyer of any sums due to the Buyer pursuant
to clause 6.1. of this agreement;

	 
	 	2.1.3.	 	which is fairly disclosed in or under the Disclosure Letter;

	 
	 	2.1.4.	 	if it would not have arisen but for an act, omission or
transaction of the Buyer or the Company after Completion outside
the ordinary course of business and otherwise than under a legally
binding commitment of the Company created before Completion and the
Buyer was or ought reasonably to have been aware that such act,
omission or transaction would give rise to grounds for making a
Claim;

	 
	 	2.1.5.	 	resulting from or incurred by a change after Completion in the
accounting policies or practices of the Buyer or the Company unless
the policy or practice adopted by the Company prior to Completion
was unlawful or not in accordance with UK GAAP ;

	 
	 	2.1.6.	 	to the extent that it arises or is increased as a result of or is
otherwise attributable to:







	 	2.1.6.1.	 	any change in or introduction of new law;

	 
	 	2.1.6.2.	 	any change in the rates of Tax; or

	 
	 	2.1.6.3.	 	any change or withdrawal by any authority of any
published administrative practice;







in each case announced or taking effect after Completion;




	 	2.1.7.	 	to the extent to which it would not have arisen or would have
been reduced (to the extent of the relevant reduction) or
eliminated but for the failure or omission on the part of the
Company or the Buyer to do anything under the provisions of any
legislation after Completion the making giving or doing of which
was taken into account in computing any provision in the Completion
Accounts or the Accounts (each “an Action”) PROVIDED AND TO THE
EXTENT that full details of such Action (together with the time
limits therefore) have been set out in full in the Disclosure
Letter;





 









 






	 	2.1.8	 	to the extent that loss or liability is recoverable under a
policy of insurance of any member of the Buyers’ Group at no cost to the Buyer
or the Company or in circumstances where there is such a cost or increased
cost attributable to the making of a claim under such policy which would not
otherwise have been incurred conditional upon the Seller reimbursing to the
Buyer (for itself and on behalf of each member of the Buyer’s Group on demand
and from time to time each and all such costs (including but without
limitation increased premiums deductibles and self insured payments) which
flow from such recovery (not exceeding an amount equivalent to the aggregate
of such costs for the next succeeding 3 years)







	3	 	Financial Limitations







	 	3.1.	 	The Seller shall not be liable in respect of any Warranty Claim unless:







	 	3.1.1.	 	the amount of that Warranty Claim is for or exceeds £28,000; and

	 
	 	3.1.2.	 	the amount of that Warranty Claim, together with (i) the
aggregate amount of all other single Warranty Claims of £28,000 or
more and (ii) all claims under the PIPS Inc Agreements (if any) of
US $25,000 or more in relation to Article 4 Claims as such
expression is defined in the Joint Issues Agreement) exceeds in
aggregate £280,000 whereupon the Seller shall be liable for the
full amount of all such Warranty Claims







	4	 	Mitigation, Quantification of Loss







	 	4.1.	 	If the Seller shall have made any payment in respect of a Warranty
Claim and the Company shall receive a benefit or refund which the Seller can
demonstrate was not taken into account in computing the liability of the Seller in
respect of that Warranty Claim and would have reduced that liability had it been
taken into account, then unless payment of that benefit or refund has already been
made by the Buyer to the Seller under paragraph 4 of this schedule 5, the Buyer
shall forthwith repay to the Seller a sum corresponding to that benefit or refund
as the case may be.

	 
	 	4.2.	 	Nothing contained in this agreement shall have the effect of relieving
the Buyer or the Company from any common law duty to mitigate any loss or damage
suffered by it.

	 
	 	4.3.	 	The Seller shall not be liable more than once in respect of any loss,
damage or liability, whether by reason of a Warranty Claim, an Indemnity Claim or
also a Covenant Claim being made or otherwise, so that any amount paid under the
Warranties shall reduce the amount otherwise payable under the Tax Covenant or the
covenants to pay in clause 13 of this agreement in respect of the same matter by
that amount and vice versa..







	5	 	Time Limits







	 	5.1.	 	No Claim shall be brought by the Buyer or the Company unless notice in
writing of that Claim (specifying in reasonable detail with supporting evidence the
event, matter or default which gave rise to the Claim and an estimate of the amount
claimed) has been given to the Seller:






 









 






	 	5.1.1.	 	in the case of a Covenant Claim or a Warranty Claim under any of
the Tax Warranties, within seven years after Completion; or

	 
	 	5.1.2.	 	in the case of an IP Claim or an Indemnity Claim, within six
years after Completion;

	 
	 	5.1.3.	 	in any other case, within 18 months after Completion.







	 	5.2.	 	Any such Claim which has been made shall (if it has not been previously
satisfied, settled or withdrawn) be deemed to have been waived or withdrawn 12
months after the date it was made unless court proceedings in respect of it have
then been commenced against the Seller, or the Seller and the Buyer have agreed in
writing to extend that 12 month period, in which case this paragraph 5.2 shall
apply to that Claim with the substitution of that extended period (and for this
purpose court proceedings shall not be deemed to have been commenced unless they
have been both issued and served on the Seller).

	 
	 	5.3.	 	Nothing in this schedule 5 shall prevent the Buyer from amending or
amplifying any Claim at any time after its initial notification in accordance with
this paragraph 5 in the light of further information obtained or received by or on
behalf of the Buyer.







	6	 	Conduct of Claims by and Recovery from Third Parties







	 	6.1.	 	This paragraph 6 does not apply to regulate the conduct of Claims in
relation to Tax but it applies to regulate the conduct of all other Claims as set
out below. All Claims or potential Claims in relation to Tax (whether under the
Tax Warranties or otherwise) shall be conducted in accordance with paragraph 11 of
the Tax Covenant. For the purposes of this paragraph 6 an “Opinion” shall mean
opinion of a leading counsel agreed upon by the Seller and the Buyer or (in the
absence of such agreement) the opinion of counsel of not less than 10 years
standing nominated on the application of the Seller by the Chairman of the Bar
Council or failing such nomination by the President of the Law Society has been
obtained by the Seller to the effect that (i) in respect of a Relevant Third Party
Claim, such Claim will on the balance of probabilities be successfully defended by
the relevant member of the Buyer’s Group (as enlarged by the acquisition of the
Company) and that the action requested by the Seller is appropriate or (ii) where
the Seller is requesting the Buyer to pursue a Third Party Recovery Right that the
Third Party Recovery Right will, on the balance of probabilities be successfully
pursued.

	 
	 	6.2.	 	In relation to Relevant Third Party IP Claims and Third Party IP
Recovery Rights:-







	 	6.2.1.	 	the Buyer shall notify the Seller in writing as soon as
reasonably practicable upon becoming aware of any Relevant Third
Party IP Claim and/or Third Party IP Recovery Right;

	 
	 	6.2.2.	 	the Seller and the Buyer shall in good faith co-operate with each
other in relation to the Relevant Third Party IP Claim with a view
to any possible mitigating defence or other commercially acceptable
action to minimise the risk of





 









 






	 	 	 	litigation. For the avoidance of doubt the Buyer shall be
entitled (and from time to time) to seek counsel’s opinion on
any matter the subject of the Relevant Third Party IP Claim or
Third Party IP Recovery Right and the Seller shall procure that
the Buyer has sufficient information to prepare full detailed
and accurate instructions to counsel to advise within the
timescale required by the Buyer (acting reasonably);

	 
	 	6.2.3.	 	the Seller shall not be entitled to require the Company or the
Buyer to initiate proceedings or himself initiate proceedings
before any court, tribunal or other competent body under any powers
of delegation conferred by this paragraph 6.2;

	 
	 	6.2.4.	 	subject to the Seller indemnifying and securing (and keeping
indemnified and secured including but without limitation by
recourse to the Total Retention) the Buyer and the Company to the
reasonable satisfaction of the Buyer the Buyer shall take and
procure that the Company takes in relation to any Relevant Third
Party IP Claim or Third Party IP Recovery Right such action as the
Seller may reasonably require in relation thereto:-







	 	6.2.4.1.	 	to avoid, resist, mitigate, compromise, defend or
appeal against any Relevant Third Party IP Claim; or

	 
	 	6.2.4.2.	 	to enforce any Relevant Third Party IP Recovery Right;







and the Buyer shall not (and shall procure that the Company shall not) in
relation to any IP Claim accept pay or compromise any Relevant Third Party
IP Claim or Third Party IP Recovery Right without the prior agreement of
the Seller which he shall not unreasonably withhold or delay or grant
subject to unreasonable conditions.




	 	6.2.5.	 	on the written request of the Seller the conduct of any legal
proceedings arising out of any Relevant Third Party IP Claim
(“Proceedings”) shall be delegated to the Seller and for this
purpose the Buyer shall and shall procure that the Company shall
give all such assistance as the Seller may reasonably require and
shall appoint such lawyers and professional advisers as the Seller
(acting reasonably) may nominate to act on behalf of the Buyer or
the Company in accordance with the Seller’s instructions.

	 
	 	6.2.6.	 	the rights given to the Seller under paragraphs 6.2.4 and 6.2.5
above are subject to and conditional upon the following:-







	 	6.2.6.1.	 	unless an Opinion has been obtained the Buyer shall not
be bound by paragraphs 6.2.4 and/or 6.2.5 (as the case may
be) above to the extent that it is of the reasonable
opinion (on the basis of facts and matters explained to the
Seller) that the probable consequence of any





 









 






	 	 	 	such requirements or actions would adversely
affect the conduct of the business of any member
of the Buyer’s Group to a material extent
PROVIDED ALWAYS that the Buyer shall not be
obliged to take any form of action involving a
customer of or a licensor to the Company or any
other member of the Buyer’s Group;

	 
	 	6.2.6.2.	 	the Seller must keep the Buyer fully and promptly
informed of (a) all communications and interactions
concerning the Relevant Third Party IP Claim or Third Party
IP Recovery Right and/or (b) the Proceedings (as the case
may be), shall provide the Buyer with copies of all
material correspondence and documentation relating to the
Relevant Third Party IP Claim and/or Third Party IP
Recovery Right, shall consult the Buyer on any matter which
is likely to be material in relation to any of them and
shall take account of all reasonable requirements of the
Buyer in relation to any of them and shall comply fully
with the standard policies and procedures from time to time
applying to members of the Buyer’s Group to the extent that
they are not inconsistent with the other provisions of this
paragraph 6;

	 
	 	6.2.6.3.	 	the Seller must not make any settlement or compromise
of the Relevant Third Party IP Claim or Third Party IP
Recovery Right, whether the subject of Proceedings or not,
or agree to any matter in the conduct thereof which may
affect the amount of the liability in connection with such
Relevant Third Party IP Claim or the amount of the Third
Party IP Recovery Right without the prior approval of the
Buyer, such approval not to be unreasonably withheld.

	 
	 	6.2.6.4.	 	in the event of the Buyer acting unreasonably in
refusing approval of such settlement or compromise, the
Seller shall have no liability in respect of any Claim
arising therefrom in excess of the figure at which they
could have settled or compromised the Relevant Third Party
IP Claim or Third Party IP Recovery Right and the Buyer
shall be liable for any costs incurred since the proposed
date of settlement or compromise.







	 	6.3.	 	Without prejudice to the foregoing the Seller shall cease to be
entitled to exercise any of the rights under paragraphs 6.2.4 and/or 6.2.5 and to
have the conduct of the Proceedings in circumstances where:-





 









 












	 	6.3.1.	 	aggregate professional costs (including legal and accountancy
fees and the fees of patent agents and other experts) reach US
$750,000 ;or

	 
	 	6.3.2.	 	the Seller ceases to be employed by or contracted under a
contract for services to the Company or any other member of the
Buyer’s Group (which the parties will negotiate in good faith) by
reason of termination for misconduct or otherwise for cause by the
Company or such member or by reason of his voluntary resignation or
his voluntary termination.







	 	6.4.	 	Without limitation to and subject always to paragraph 6.2 the Buyer:







	 	6.4.1.	 	shall notify the Seller in writing as soon as reasonably
practicable upon becoming aware of any Relevant Third Party Claim
and/or Third Party Recovery Right. Failure to give such notice or
any delay in so doing shall not prevent the Buyer from making a
valid Claim. The Buyer (a) shall in relation to a Third Party
Claim consult with the Seller with respect to any possible
mitigating action or defence to the Relevant Third Party Claim or
any possible Third Party Recovery Right in relation to the Relevant
Third Party Claim and (b) shall in relation to any Third Party
Recovery Right consult with the Seller with respect to exercising
or otherwise securing the benefit of such Third Party Recovery
Right and shall in each case take fully into account the reasonable
representations of the Seller in relation to the appropriate action
to take provided that:







	 	(a)	 	such representations are provided without
unreasonable delay and in any event sufficiently ahead of any
relevant time limits notified to the Seller as to enable the
requested action still to be capable of being taken; and

	 
	 	(b)	 	such representations do not involve action
which would have a material adverse effect on the business of the
Buyer or any member of the Buyer’s Group (as enlarged by the
acquisition of the Company);







	 	6.4.2.	 	has the right to require the Seller to indemnify and secure the
Buyer and the Company to the reasonable satisfaction of the Buyer
in relation to any action taken by them as a result of the
representations of the Seller. The conduct of the Relevant Third
Party Claim or a claim or potential claim relating to the Third
Party Recovery Right (any such Relevant Third Party Claim or a
claim or potential claim relating to the Third Party Recovery Right
being referred to as a “Potential Claim”) shall, however, be
controlled by the Buyer;

	 
	 	6.4.3.	 	shall be obliged to comply with the representations of the Seller
where provisos (a) and (b) of paragraph 6.4.1 above are satisfied
or, in a case where proviso (b) is not satisfied an Opinion has
been obtained , including to the effect that the action requested
by the Seller is appropriate





 









 






	 	 	 	PROVIDED ALWAYS that the Buyer shall not be obliged to take any
form of action involving a customer of or a licensor to the
Company or any other member of the Buyer’s Group;

	 
	 	6.4.4.	 	shall ensure that the Seller is kept promptly and properly
informed of any actual or proposed developments in the Potential
Claim which are or may reasonably be considered to be material,
including providing the Seller with copies of all material
correspondence and documentation relating to the Potential Claim
and the Seller shall provide to the Buyer such assistance as the
Buyer reasonably requests in relation to the conduct of such
Potential Claim;







	 	6.5.	 	If any sum is recovered by the Buyer or the Company from a third party
under a Third Party Recovery Right, any Claim (other than under the Tax Covenant)
in respect of any loss, damage or liability to which that sum relates shall be
reduced (without prejudice to any other limitations on the liability of the Seller
referred to in this schedule 5) by the amount of the sum recovered from the third
party after deducting from it all reasonable costs, charges and expenses incurred
and not recovered by the Buyer, any member of the Buyer’s Group or the Company (as
the case may be) in recovering that sum from the third party.

	 
	 	6.6.	 	If the Seller has paid an amount in respect of a relevant Claim (other
than under the Tax Covenant) which exceeds the amount of that Claim as reduced by
paragraph 6.5 above, the Buyer shall forthwith repay to the Seller the amount of
the excess.







	7	 	Successful Claims Deemed to Constitute a Reduction in Consideration

	 
	 	 	The satisfaction by the Seller of any Claim shall be deemed to constitute an equivalent
reduction in the Consideration payable by the Buyer for the sale of the Sale Shares.

	 
	8	 	Tax Warranties

	 
	 	 	The provisions of paragraph 2 of the Tax Covenant shall apply to limit the liability of the
Seller under the Tax Warranties as if the matter, liability or thing that would otherwise
give rise to that liability were a Tax Liability as defined in the Tax Covenant.







 












 





SCHEDULE 6




COMPLETION PROVISIONS




PART 1 — COMPLETION OBLIGATIONS





	1	 	Seller’s Obligations







	 	1.1.	 	On Completion, in accordance with clause 7, the Seller shall:







	 	1.1.1.	 	(to the extent not previously provided) provide evidence of the
satisfaction of such of the Conditions as are to be fulfilled by
him (unless and to the extent duly waived) in form and substance
reasonably acceptable to the Buyer;

	 
	 	1.1.2.	 	deliver to the Buyer or (in the case of the items specified in
paragraphs 1.1.2.9 and 1.1.2.10) make available for collection by
the Buyer or authorised representatives of the Buyer (to the extent
not previously delivered or provided):







	 	1.1.2.1.	 	transfers in respect of the Sale Shares duly executed
and completed in favour of the Buyer or as the Buyer may
direct;

	 
	 	1.1.2.2.	 	certified copies of the duly executed transfers of the
B Shares in favour of the Seller;

	 
	 	1.1.2.3.	 	a certified copy of the duly executed share purchase
agreement between the Seller and the B Shareholders;

	 
	 	1.1.2.4.	 	the Istenes Acknowledgement duly executed in duplicate
by its parties if not already delivered in connection with
the fulfilment of Condition 2;

	 
	 	1.1.2.5.	 	duly executed powers of attorney or other authorities
under which any of the above transfers have been executed;

	 
	 	1.1.2.6.	 	all share certificates in respect of the Sale Shares
(including the B Shares) (or an indemnity in a form
approved by the Buyer (acting reasonably) in respect of any
missing share certificate);

	 
	 	1.1.2.7.	 	any other documents required to give a good title to,
and to enable the Buyer or the Buyer’s nominees to become
the registered holders of, the Sale Shares;

	 
	 	1.1.2.8.	 	(as agents for the Company) all its statutory and
minute books (written up to date) and its Common Seal (if
any), Certificate of Incorporation, any Certificate of
Incorporation on Change of Name and all available copies of
its Memorandum and Articles of Association;





 









 






	 	1.1.2.9.	 	evidence satisfactory to the Buyer of the release of
all Guarantees given by the Company in respect of
liabilities of the Seller or any director of the Seller;

	 
	 	1.1.2.10.	 	all documents of title to the Property;

	 
	 	1.1.2.11.	 	to the extent not in the possession of the Company at
the Property all the financial and accounting books and
records of the Company together with all cheque books and
paying in books for its bank accounts; and

	 
	 	1.1.2.12.	 	to the extent not in the possession of the Company at
the Property, all the assets of the Company (including all
company credit cards held by persons resigning on
Completion or otherwise ceasing to be employed or engaged
by the Company after Completion) together with all
documents evidencing its title to each of its assets
(including vehicle registration documents relating to its
motor vehicles); and

	 
	 	1.1.2.13.	 	the Company’s Company Authentification Code at
Companies House (if any);

	 
	 	1.1.2.14.	 	a statement of the overdraft and credit balances from
the Company’s bankers and other lenders together with a
reconciliation showing items in transit which have yet to
be credited or debited (as appropriate) to the Company’s
account(s) with any such lender (including for the
avoidance of doubt credit card companies) as at close of
business on the day preceding Completion;

	 
	 	1.1.2.15.	 	bank statements for the Company as at close of
business on the day preceding Completion;

	 
	 	1.1.2.16.	 	cash book balances for the Company as at close of
business on the day preceding Completion;







	 	1.1.3.	 	cause all stock transfers executed in accordance with paragraphs
1.1.2 and 1.1.3 above to be resolved to be registered (subject only
to them being duly stamped) notwithstanding any provision to the
contrary in the Articles of Association of the Company;

	 
	 	1.1.4.	 	cause the persons named in part 2 of this schedule 6 to be
validly appointed as additional directors and the person named in
part 3 of this schedule 6 to be validly appointed as secretary of
the Company;

	 
	 	1.1.5.	 	on those appointments being made, cause the persons named in
schedule 2 (other than the Seller) to cease to be





 









 






	 	 	 	directors and (if applicable) employees and the person named in
part 4 of this schedule 6 to cease to be secretary and procure
all such persons to deliver to the Buyer their agreed form
written resignations of their respective offices acknowledging
under seal that they have no claim outstanding including for
compensation for loss of office, redundancy and unfair
dismissal;

	 
	 	1.1.6.	 	if the Buyer so requests, procure that each or any director or
secretary required by this schedule 6 to resign on Completion shall
concur with the Company in taking any action which the Buyer may
consider necessary to preclude any such person from making a
complaint to or bringing proceedings before an employment tribunal
or other court in respect of the termination of his contract of
employment;

	 
	 	1.1.7.	 	procure that the auditors of the Company shall deposit their
written notice of resignation at its registered office in
accordance with section 392 CA 1985 with a statement under section
394 CA 1985 that there are no circumstances connected with their
ceasing to hold office which they consider should be brought to the
attention of the members or creditors of the Company and
confirmation that all fees due to the resigning auditors by the
Company have been invoiced and paid in full, each in agreed form;

	 
	 	1.1.8.	 	repay to the Company, or procure the repayment to it of, all
indebtedness outstanding at Completion from the Seller or any
person connected with the Seller to the Company; and

	 
	 	1.1.9.	 	procure that the Company shall repay all loans (if any) made to
it by the Seller as fairly disclosed in the Disclosure Letter and
outstanding at Completion.

	 
	 	1.1.10.	 	procure that the Seller is released from all Guarantees given by
him in relation to obligations and liabilities of the Company.







	2	 	Buyer’s Obligations







	 	2.1.	 	The Buyer shall on Completion:







	 	2.1.1.	 	(to the extent not previously provided) provide evidence of the
satisfaction of such of the Conditions as are to be fulfilled by it
(unless and to the extent duly waived) in form and substance
reasonably satisfactory to the Seller and shall duly execute and
deliver to the Seller those of the Agreed Documents requiring to be
so executed and delivered;

	 
	 	2.1.2.	 	make the payments referred to in clause 7.2;

	 
	 	2.1.3.	 	procure that the Company pay the Istenes Sum to the Nominated
Account.







	3	 	Joint Obligations





 









 












	 	3.1.	 	The parties shall join in procuring that at or before Completion:







	 	3.1.1.	 	Ernst & Young LLP shall be appointed auditors of the Company;

	 
	 	3.1.2.	 	all existing bank mandates in force for the Company shall be
altered (in such manner as the Buyer shall at Completion require)
to reflect the resignations and appointments referred to in
paragraphs 1.1.4 and 1.1.5 above; and

	 
	 	3.1.3.	 	the registered office of the Company shall be changed to 1 St
James Gate Newcastle upon Tyne NE99 1YQ;






PART 2 — ADDITIONAL DIRECTORS




David R McConnaughey




Robert D Welding




Jennifer L Sherman




PART 3 — NEW SECRETARY




WB Company Secretaries Limited




PART 4 — RESIGNING SECRETARY




Wilsons (Company Secretaries) Limited




 









 









SCHEDULE 7




THE PROPERTY




	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Title	 	 	 	 	 	Date of	 	Parties to	 	Term and	 	 	 	Present
	Number	 	Description	 	Proprietor	 	Lease	 	Lease	 	rent	 	Occupier(s)	 	Use
	HP665733
	 	Unit B, York House, School Lane, 

Chandlers Ford,
SO53 4DG 

and parking spaces	 	PIPS Technology 

Limited	 	30.09.05	 	Sefton LLC (1) PIPS 

Technology
Limited (2)	 	15 years from 30.09.05 

at a commencing rent 
of
£110,504 pa	 	 PIPS Technology 

Limited	 	Class B1 Town & Country


Planning (Uses Classes) 

Order 1987
	 
	 	 	 		 	 	 		 		 		 	
	 
	 	  	 	 	 	 	 	 	 		 	 	 	
	HP680338
	 	Unit D, York House, School Lane, 

Chandlers Ford,
SO53 4DG 

and parking spaces	 	PIPS Technology 

Limited	 	11.10.06	 	Orchard (Clinics 5) Limited
(1) 
PIPS Technology Limited (2)	 	15 years from 30.09.05 
at a

commencing rent of 
£16,750 pa


commencing 22.09.06	 	PIPS Technology 

Limited	 	Class B1 Town & Country

Planning
(Uses Classes) 

Order 1987
	 
	 		 		 	 	 		 		 		 	
	 
	 		 	 	 	 	 		 		 	 	 	
	 
	 		 	 	 	 	 		 		 	 	 	
	 
	 		 	 	 	 	 	 	 		 	 	 	 






 









 





SCHEDULE 8




TAX COVENANT





	1	 	Seller’s Covenant







	 	1.1.	 	Subject to paragraph 2, the Seller covenants with the Buyer to pay to
the Buyer an amount equal to:







	 	1.1.1.	 	any Tax Liability of the Company:







	 	1.1.1.1.	 	arising as a consequence of or by reference to one or
more Events which occurred on or before Completion;

	 
	 	1.1.1.2.	 	arising in respect of or by reference to any income
profits or gains which were earned accrued or received on
or before or in respect of a period ended on or before
Completion;







	 	1.1.2.	 	any Tax Liability of the Company which would have arisen (and in
respect of which the Seller would have been liable under paragraph
1.1.1) but for the setting off of an Accounts Relief or a New
Relief against that Tax Liability or (as the case may be) against
the income profits or gains which would have given rise to that Tax
Liability;

	 
	 	1.1.3.	 	any Accounts Relief lost or (where the Accounts Relief lost was a
deduction from or set-off against income profits or gains) the Tax
which would (on the basis of the rates of Tax current at the date
of the loss and assuming income profits or gains chargeable to Tax
of an amount equal to the Relief) have been saved but for the loss;

	 
	 	1.1.4.	 	any liability of the Company to pay or repay an amount in respect
of Tax under any indemnity covenant guarantee mortgage or charge
entered into on or before Completion;

	 
	 	1.1.5.	 	any Tax Liability of any other person imposed upon the Company by
reason of the failure of any other person to pay an amount of
Taxation (whether or not that liability is also or alternatively a
liability of, or chargeable against or attributable to, any other
person and whether or not the Company shall or may have a right of
recovery or reimbursement against any other person arising as a
consequence of or by reference to one or more Events which occurred
on or before Completion);

	 
	 	1.1.6.	 	any Tax Liability arising out of or in connection with or by
reason of:





 









 












	 	1.1.6.1.	 	transactions occurring on or before Completion between the Company
and any of its shareholders or directors and/or any person connected
with any of them;

	 
	 	1.1.6.2.	 	any Tax in respect of the emoluments of employees or directors of
the Company and/or any person connected with any of them arising in
respect of periods ended on or before Completion and arising from
their employment or directorships with the Company or in respect of
services rendered by an individual to the Company in respect of
periods on or before Completion where Tax has not been properly
accounted for or proper returns have not been made in respect of
emoluments;

	 
	 	1.1.6.3.	 	any Tax arising by virtue of the application of Schedule 28AA of
ICTA 1988;







	 	1.1.7.	 	any Tax Liability which is a liability for inheritance tax
which:-







	 	1.1.7.1.	 	arises as a result of a transfer of value occurring or being
deemed to occur on or before Completion (whether or not in conjunction
with the death of any person whensoever occurring);

	 
	 	1.1.7.2.	 	has given rise at Completion to a charge on any of the Shares or
assets of the Company;

	 
	 	1.1.7.3.	 	gives rise after Completion to a charge on any of the Shares in or
assets of the Company as a result of the death of any person within
seven years of a transfer of value which occurred before Completion.







	 	1.1.8.	 	any costs and expenses reasonably incurred by the Buyer and/ or
the Company in connection with;







	 	1.1.8.1.	 	any liability or amount for which the Seller is liable under any
of paragraphs 1.1.1 to 1.1.8 inclusive, including the costs and
expenses of investigating assessing or contesting any Tax Claim in
respect of that liability or amount;

	 
	 	1.1.8.2.	 	taking any action, including the defence of any Tax Claim, at the
request or direction of the Seller; or

	 
	 	1.1.8.3.	 	any successful claim by the Buyer under this schedule 8.







	 	1.2.	 	The provisions of section 213 of ITA 1984 (refund by instalments) shall
be deemed not to apply to any liability for inheritance tax within this paragraph
1.







	2	 	Restriction of Seller’s Liability







	 	2.1.	 	Save in the case of fraud, dishonesty deceit or intentional
misstatement or omission (and subject to paragraph 2.3 below) the provisions of
schedule 5 (Seller Protection) as apply to Covenant Claims (as defined in such
schedule) shall apply to this Tax Covenant as if they were set out in full in





 









 






	 	 	 	it and the liability of the Seller under this Tax Covenant shall be limited or
excluded accordingly.

	 
	 	2.2.	 	The covenants contained in paragraph 1 shall not extend to any Tax
Liability to the extent that:







	 	2.2.1.	 	the relevant Tax Liability was paid or discharged on or before
Completion and that payment or discharge was reflected in the
Completion Accounts PROVIDED THAT this exclusion shall apply only
where the Seller has made payment in full to the Buyer of any sums
due to the Buyer pursuant to clause 6.1 of this agreement;

	 
	 	2.2.2.	 	provision or reserve in respect of that Tax Liability was made in
the Completion Accounts PROVIDED THAT this exclusion shall apply
only where the Seller has made payment in full to the Buyer of any
sums due to the Buyer pursuant to clause 6.1 of this agreement in
circumstances where such provision applies) ;

	 
	 	2.2.3.	 	that Tax Liability results from or is increased by any change
after Completion in the accounting or tax policies or practices of
the Buyer or the Company or the method of computing or submitting
tax computations unless the policy or practice adopted by the
Company prior to completion was unlawful, or not in accordance with
UK GAAP;

	 
	 	2.2.4.	 	that Tax Liability would not have arisen but for an increase in
the number of associated companies (within the meaning of ICTA
1988, s.13(4)) of the Company on or after Completion;

	 
	 	2.2.5.	 	such Tax Liability would not have arisen or would have been
reduced or eliminated but for a failure or omission on the part of
the Company or the Buyer after Completion to make any claim,
election, surrender or disclaimer or to give any notice or consent
under or in connection with a provision of any enactment or
regulation relating to Taxation provided the requirement to make
such claim election surrender or disclaimer or to give such notice
or consent is set out in the Disclosure Letter along with full
details of it (including time limits and the circumstances
surrounding it).

	 
	 	2.2.6.	 	that Tax Liability would not have arisen but for a change in the
accounting reference date of the Company made on or after
Completion;

	 
	 	2.2.7.	 	such Tax Liability would not have arisen but for an act, omission
or transaction of the Buyer or the Company after Completion outside
the ordinary course of business and otherwise than under a legally
binding commitment of the Company created before Completion and the
Buyer was or ought reasonably to have been aware that such act
omission or transaction would give rise to such Tax Liability.





 









 












	 	2.3.	 	The provisions of Article 4.1 of the Joint Issues Agreement shall not
apply to any claims in respect of any Tax Liability falling within paragraph 1.1 of
this Tax Covenant.







	3	 	Credit for Tax Savings







	 	3.1.	 	In this paragraph 3:







	 	3.1.1.	 	“Prior Liability” means a Tax Liability of the Company in respect
of which the Seller has made payment to the Buyer under this Tax
Covenant;

	 
	 	3.1.2.	 	“Tax Saving” means the reduction or elimination on or before the
seventh anniversary of this agreement of any Tax Liability of the
Company to the extent that such reduction or elimination would not
have occurred but for the payment or discharge by the Company of a
Prior Liability; and

	 
	 	3.1.3.	 	the Company shall be regarded as obtaining the benefit of a Tax
Saving on the last day on which (but for the Relief giving rise to
the Tax Saving) it would have been obliged to make an actual
payment of Tax in order to avoid incurring a liability to interest
or a charge fine or penalty in respect of that Tax.







	 	3.2.	 	The Buyer shall use its reasonable endeavours to procure that the
benefit of any Tax Saving is obtained as early as possible provided that nothing in
this paragraph 3 shall require the Buyer or the Company to manage their tax affairs
in a way which, in the reasonable opinion of the Buyer, would prevent optimum use
of any Reliefs available.

	 
	 	3.3.	 	If the Buyer becomes aware that a Tax Saving has arisen it shall notify
the Seller as soon as practicable. If (at the cost and expense of the Seller) the
auditors for the time being of the Company certify that the Company has obtained
the benefit of a Tax Saving, then the Buyer shall repay to the Seller an amount
equal to the lesser of:







	 	3.3.1.	 	the amount of that Tax Saving (as certified by the auditors); and

	 
	 	3.3.2.	 	(to the extent not already refunded) the amount(s) previously
paid by the Seller to the Buyer under this schedule 8 in respect of
the Prior Liability in question.







	 	3.4.	 	The amount of any Tax Saving (or the Relief giving rise to that Tax
Saving) shall not be increased by:







	 	3.4.1.	 	any Accounts Relief or New Relief;

	 
	 	3.4.2.	 	any surrender or claim to surrender any amount by way of group
relief, surplus advance corporation tax or tax refund; or

	 
	 	3.4.3.	 	any change in Tax Legislation or rates of Taxes announced after
Completion.







	4	 	No disclosures





 









 












	 	4.1.	 	The Buyer may claim and recover under this Tax Covenant in respect of a
Tax Liability notwithstanding that the Buyer had knowledge (whether actual
constructive or implied) on or before Completion of that Tax Liability (or the
matter giving rise to that Tax Liability).







	5	 	Refund of recovered sums







	 	5.1.	 	Where the Seller has paid an amount in full discharge of a liability
under paragraph 1 in respect of any Tax Liability and the Buyer or the Company is
or becomes entitled to recover from some other person (not being the Buyer the
Company or any other person in the Buyer’s Group) any amount in respect of such Tax
Liability the Buyer shall and shall procure that the Company shall:-







	 	5.1.1.	 	notify the Seller of his entitlement to recovery as soon as
reasonably practicable; and

	 
	 	5.1.2.	 	if so required by the Seller and, subject to the Buyer and the
Company being indemnified and secured by the Seller to the Buyer’s
reasonable satisfaction in respect of any costs and expenses
incurred in recovering that amount the Buyer shall or shall procure
that the Company shall take all reasonable steps to enforce that
recovery PROVIDED THAT the Buyer shall not be required to take any
action pursuant to this paragraph 5 (other than an action against a
Tax Authority or a person who has given Tax advice to the Company
on or before Completion) which in the Buyer’s reasonable opinion is
likely to harm the commercial relationship (potential or actual) of
the Buyer or any member of the Buyer’s Group or the Company with
that or any other person.







	 	5.2.	 	If the Buyer or the Company recovers any amount referred to in
paragraph 5.1 then the Buyer shall promptly repay to the Seller a sum equal to the
lesser of:







	 	5.2.1.	 	any sum (including interest and/or any repayment supplement) so
recovered less any Tax suffered in respect of that amount and any
costs and expenses incurred in recovering that sum; and

	 
	 	5.2.2.	 	the amount paid by the Seller under paragraph 1 in respect of the
Tax Liability in question.







	6	 	No Deductions or Withholdings







	 	6.1.	 	Except only as may be required by law all sums payable by the Seller
under this Tax Covenant shall be paid free and clear of all deductions or
withholdings.

	 
	 	6.2.	 	If any deductions or withholdings are required by law to be made from
any payment under this Tax Covenant, the Seller shall pay such sum as shall, after
the deduction or withholding has been made, leave the Buyer with the same amount as
it would have been entitled to receive in the absence of any such requirement to
make a deduction or withholding.





 









 












	7	 	Tax on Payments







	 	 	If any sum payable by the Seller to the Buyer under this Tax Covenant (including any sum
payable under this paragraph 7) is (or but for the availability of any Accounts Relief or
New Relief would be) subject to a Tax Liability in the hands of the Buyer (in any case in
which the benefit of paragraph 3 of H M Revenue and Customs Extra Statutory Concession D33
or any replacement of it has no application) the Seller shall pay to the Buyer such sum as
would have been required to be paid under paragraph 6.2 had that Tax Liability been a
deduction or withholding from the sum payable by the Seller.







	8	 	Date for Payment







	 	8.1.	 	Where the Seller becomes liable to make a payment under this Tax
Covenant, the due date for the making of that payment in cleared funds shall be the
date falling five business days after the date on which the Company or (as the case
may be) the Buyer has notified the Seller of the amount of the payment required to
be made or, if later:







	 	8.1.1.	 	in the case of a liability within paragraphs 1.1.1, 1.1.5 and
1.1.6 the second business day prior to the last date on which the
payment of Tax in question may be paid to the relevant Tax
Authority in order to avoid incurring a liability to interest or a
charge fine or penalty in respect of that Tax Liability;

	 
	 	8.1.2.	 	in the case of the loss or set-off of a right to repayment of Tax
within paragraph 1.1.2 or 1.1.3, the date on which that repayment
would have been received but for the loss or set-off;

	 
	 	8.1.3.	 	in the case of the set-off of a Relief (other than a right to
repayment of Tax) within paragraph 1.1.2, the last date on which
the Tax Liability which (but for the set-off) would have been
payable could have been paid to the relevant Tax Authority in order
to avoid incurring a liability to interest or a charge fine or
penalty in respect of that Tax Liability; or

	 
	 	8.1.4.	 	in the case of any liability within paragraph 1.1.4, the second
business day prior to the date on which the payment or repayment
becomes due and payable.







	9	 	Interest on Late Payment







	 	 	If any payment required to be made by the Seller under this Tax Covenant is not made by its
due date for payment, then that payment shall carry interest from that due date until the
date when the payment is actually made at the rate of 4% above the base rate from time to
time of Barclays Bank plc compounded quarterly.










	10	 	Price Reduction





	 	 	Any payment by the Seller under this Tax Covenant shall (so far as possible) be treated as
a reduction in the consideration paid for the Sale Shares but nothing in this paragraph 10
shall limit or exclude the liability of the Seller under this agreement.








	11	 	Tax Claims





 









 












	 	11.1.	 	If the Buyer or the Company shall become aware of any Tax Claim which
is likely to give rise to a liability of the Seller under this Tax Covenant the
Buyer shall (or shall procure that the Company shall) as soon as reasonably
practicable give notice of that Tax Claim to the Seller but so that such notice
shall not be a condition precedent to the liability of the Seller under this Tax
Covenant. Such notice shall include the details of the Tax Claim if and insofar as
they are known to the Buyer (including, if reasonable for the Buyer to do so, an
estimate of the Seller’s liability under this Tax Covenant.

	 
	 	11.2.	 	If the Seller shall indemnify and secure the Company and the Buyer to
the reasonable satisfaction of the Buyer against all losses, damages and expenses
(including any additional Tax Liability, costs and interest on overdue Tax) which
may be incurred in complying with this paragraph 11.2, the Buyer shall (and shall
procure that the Company shall), in each case subject to the provisions of
paragraph 11.4 in accordance with any reasonable instructions of the Seller
promptly given by notice to the Buyer (but subject to paragraph 11.3) seek to
avoid, dispute, resist, appeal, compromise or defend that Tax Claim (called “the
Dispute”):

	 
	 	11.3.	 	If:-







	 	11.3.1.	 	The Seller does not request the Buyer or the Company to take any
action under paragraph 11.2 or the Seller fails to indemnify and
secure the Buyer and the Company to the Buyer’s reasonable
satisfaction in each case within 15 Business Days commencing with
the date on which the notice is deemed received in accordance with
paragraph 11 by the Seller; or

	 
	 	11.3.2.	 	the Seller (or the Company before Completion) has been involved
or alleged by a Tax Authority to have been involved in fraudulent
conduct or wilful default in respect of the Tax Liability which is
the subject matter of the Dispute;







	 	 	 	the Buyer or the Company shall have the conduct of the Dispute absolutely (without
prejudice to its rights under this Tax Covenant) and shall be free to pay or
settle the Tax Claim on such terms as the Buyer or the Company may in their
absolute discretion consider fit.







	 	11.4.	 	Neither the Buyer nor the Company shall be obliged to comply with any
request of the Seller under paragraph 11.2 which involves contesting any assessment
to or demand for Tax before any court or appellant body (or contesting any
determination in respect of such assessment or demand by any subordinate tribunal,
court or other appellate body) unless tax counsel of at least seven years standing
instructed by agreement between the Buyer and the Seller at the expense of the
Seller has confirmed, having received all relevant documentation and having regard
to all circumstances that any such appeal or contest is, on the balance of
probabilities, likely to succeed.

	 
	 	11.5.	 	The Buyer shall and shall procure that the Company shall:-







	 	11.5.1.	 	keep the Seller fully and promptly informed of any material
matters relating to any Dispute, negotiations or proceedings
conducted under paragraph 11.2 above and will provide the





 









 






	 	 	 	Seller with copies of all material correspondence and details of
all other communications pertaining to such dispute,
negotiations or proceedings;

	 
	 	11.5.2.	 	(save where the provisions of paragraph 11.3 apply) not
knowingly make any admission of liability or any settlement or
compromise of the Dispute without the prior approval of the Seller
such approval not to be unreasonably withheld or delayed.







	 	11.6.	 	The Buyer and the Company shall not in any event be obliged to comply
with any instruction of the Seller to make a settlement or compromise of a Tax
Claim which is the subject of a dispute or agree any matter in the conduct of that
dispute which is likely materially to increase the amount of that Tax Claim or to
increase the future liability of the Company or the Buyer in respect of Tax.

	 
	 	11.7.	 	For the avoidance of doubt the Buyer shall not be obliged to take any
action which would have a material adverse effect on the business of the Buyer or
any member of the Buyer’s Group (as enlarged by the acquisition of the Company) or
the tax treatment of the Buyer or any member of the Buyer Group (as so enlarged).

	 
	 	11.8.	 	The provisions of this paragraph 11 shall apply (with the necessary
changes) to any Tax Claim which is likely to give rise to a claim under the Tax
Warranties.







	12	 	Corporation tax returns






     In this paragraph 12:-




	 	12.1.	 	“Agents” means such firm of chartered accountants as may be determined
by the Buyer from time to time for the purposes of this paragraph 12 in
consultation with the Seller;

	 
	 	12.2.	 	“Relevant Returns” means the corporation tax returns and computations
of the Company in respect of periods ending on or before 31 December 2006;

	 
	 	12.3.	 	“Relevant Correspondence” means all documents, correspondence and
communications relating to the Relevant Returns which shall be received from or
sent to HM Revenue and Customs and/or the Inland Revenue.

	 
	 	12.4.	 	The Buyer shall appoint the Agents in respect of all Relevant Returns
at the cost of the Buyer (provided that this shall not prejudice any claims the
Buyer may have against the Seller under the Tax Covenant).

	 
	 	12.5.	 	The parties shall each use their reasonable endeavours to procure that
the Agents (as appropriate) shall keep the Seller, the Company and the Buyer fully
informed of all material matters relating to the submission, negotiation and
agreement of the Relevant Returns (including provision of copies of all Relevant
Correspondence).

	 
	 	12.6.	 	The Buyer shall consult the Seller with respect to the appropriate
action to take in negotiating the Relevant Returns with HM Revenue and Customs
and/or the Inland Revenue and will take into account the reasonable representations
of the Seller in relation thereto.





 









 






	 	12.7.	 	The Company shall not be obliged to make any claim, election,
surrender or disclaimer or to give any notice or do any other thing the effect of
which will, in the reasonable opinion of the Buyer, create or increase any current
or future liability of the Company or the Buyer or any other member of the Buyer’s
Group after Completion.







	13	 	Access to Books and Records






	 	 	The Buyer shall (and shall procure that the Company and its agents shall) provide to the
Seller and the Seller shall (and shall procure that its agents shall) provide to the Buyer
and the Company such access to relevant books, accounts and records in their respective
possession or control as is necessary and reasonable to investigate, assess or, subject to
paragraph 11, to contest any Tax Claim and to agree the Relevant Returns in accordance
with paragraph 12.









 









 








SCHEDULE 9





	A.	 	COMPLETION ACCOUNTS ACCOUNTING POLICIES





The Completion Accounts shall be prepared (and the Net Asset Value and the Adjustment Amount
computed) in accordance with the provisions of clause 6.4 of this agreement.





	B.	 	SPECIFIC ACCOUNTING POLICIES







	1.	 	EMI deduction





Credit is to be given for the corporation tax deduction under Schedule 23 Finance Act 2003
in respect of the exercise of Enterprise Management Incentive share options granted by the
Company.





	2.	 	Payment to Mr Istenes





For the avoidance of doubt an adjustment is to be made for the extent to which payment of
the amount £1,680,000 (being the Istenes Sum inclusive of the related UK Retention) is
deductible in computing corporation tax of the Company. For the further avoidance of doubt
the Istenes Sum shall be deemed to have been paid by the Company prior to Completion to the
intent that it does not form part of the Company’s cash balances at Completion.





	3.	 	Auditors Fees





The Seller’s proportion of the auditors fees as described in clause 6.9 shall be fully
provided for in the Completion Accounts.





	4.	 	Indebtedness





To the extent that any amount of interest bearing indebtedness has been added back as an asset in
computing the Base NAV it shall not be deducted as a liability in computing NAV.




 









 








UK SPA




	 	 	 	 	 
	EXECUTED AND DELIVERED

	 	 	)	 
	AS A DEED by ALAN KEITH SEFTON

	 	 	)	 
	in the presence of:

	 	 	)	 
	 
	 	 	 	 
	Witness Name:
	 	 	 	 
	 
	 	 	 	 
	Witness Address:
	 	 	 	 
	 
	 	 	 	 
	Witness Occupation:
	 	 	 	 
	 
	 	 	 	 
	EXECUTED AND DELIVERED

	 	 	)	 
	AS A DEED by FEDERAL SIGNAL OF

	 	 	)	 
	EUROPE BV Y CIA, SC a Spanish company

	 	 	)	 
	“sociedad colectiva, domiciled in Calle Doctor Ferran, 

Vilassar de Dalt (Barcelona) Postal Code 08339 and registered with the Barcelona 

Commercial Registry under Volume 39272 

Folio 109 Page B
— 343809, First Entry, with Tax ID Number 

C-64402126 and duly represented by its legal 

Representative Mr José M Paso Luna

	 	 	)	 
	

	 	 	)	 
	 
	 	 	 	 
	EXECUTED AND DELIVERED

	 	 	)	 
	AS A DEED by FS PIPS UK LIMITED

	 	 	)	 
	acting by:

	 	 	)	 
	 
	 	 	 	 
	                    
	 	 	 	 
	Director
	 	 	 	 
	 
	 	 	 	 
	                    
	 	 	 	 
	Director/ Secretary
	 	 	 	 
	 
	 	 	 	 
	EXECUTED AND DELIVERED )
	 	 	 	 
	AS A DEED by PIPS TECHNOLOGY LIMITED )
	 	 	 	 
	acting by: )
	 	 	 	 
	 
	 	 	 	 
	                    
	 	 	 	 
	Director
	 	 	 	 
	 
	 	 	 	 
	                    
	 	 	 	 
	Director/ Secretary