Document:

Exhibit 10.81 Asset Sale and Purchase Agreement

Exhibit 10.81

Date      November 20, 2009

Signature Industries Limited (1)

McMurdo Limited (2)

Digital Angel Corporation (3)

Orolia SA (4)

 

Asset Sale and Purchase Agreement

relating to

certain assets of

Signature Industries Limited’s marine business

“McMurdo”

 

Power House, Harrison Close, Knowlhill

Milton Keynes MK5 8PA

Tel: (01908) 668555

Fax: (01908) 685085

www.kimbells.com

Ref: DIG4-5

 

 

 

CONTENTS

	 	 	 	 	 
	Clause	 	Page	 
	1 Definitions and interpretation

	 	 	3	 
	2 Agreement to Sell and Purchase

	 	 	13	 
	3 Consideration

	 	 	14	 
	4 Adjustment to the Initial Stock Value

	 	 	15	 
	5 Conditions Precedent

	 	 	15	 
	6 Break-up fee

	 	 	16	 
	7 Exchange

	 	 	17	 
	8 Completion

	 	 	18	 
	9 Conduct of Business prior to Completion

	 	 	20	 
	10 Warranties

	 	 	21	 
	11 Buyer’s remedies

	 	 	22	 
	12 Property

	 	 	22	 
	13 Employees

	 	 	23	 
	14 Business Contracts

	 	 	25	 
	15 Mutual covenants and apportionments

	 	 	26	 
	16 Book Debts and Creditors

	 	 	28	 
	17 Obligations of the Seller and Buyer after Completion

	 	 	28	 
	18 Restrictive Covenants

	 	 	29	 
	19 Confidentiality

	 	 	30	 
	20 Value Added Tax

	 	 	31	 
	21 OROLIA Guarantee

	 	 	31	 
	22 DC Guarantee

	 	 	33	 
	23 Announcements and publicity

	 	 	36	 
	24 Notices

	 	 	36	 
	25 Successors, assigns and third parties

	 	 	37	 
	26 Variation

	 	 	37	 
	27 Waiver

	 	 	37	 
	28 Costs

	 	 	37	 
	29 Severance

	 	 	37	 
	30 Further assurance

	 	 	38	 
	31 Entire Agreement

	 	 	38	 
	32 Counterparts

	 	 	38	 
	33 Miscellaneous

	 	 	38	 
	34 Applicable law and jurisdiction and remedy and agents for services

	 	 	39	 
	35 Post-completion effect

	 	 	39	 
	Schedule 1

	 	 	40	 
	Apportionment of the Consideration

	 	 	40	 
	Schedule 2

	 	 	41	 
	Warranties

	 	 	41	 
	Schedule 3

	 	 	56	 
	Seller Protection Provisions

	 	 	56	 
	Schedule 4

	 	 	60	 
	The Employees

	 	 	60	 
	Schedule 5

	 	 	63	 
	The Customer Contracts

	 	 	63	 
	Schedule 6

	 	 	64	 
	The Supplier Contracts

	 	 	64	 
	Schedule 7

	 	 	65	 
	Products

	 	 	65	 
	Schedule 8

	 	 	66	 
	Registered Intellectual Property

	 	 	66	 
	Schedule 9

	 	 	67	 
	Schedule 10

	 	 	75	 
	The Plant

	 	 	75	 
	Schedule 11

	 	 	76	 
	Leasing/Hire Agreements

	 	 	76	 
	Schedule 12

	 	 	77	 
	Schedule 13

	 	 	81	 
	Schedule 14

	 	 	82	 

 

2

 

This Agreement is dated            2009

Parties

	(1)	 	SIGNATURE INDUSTRIES Limited, a company registered in England (registered number 2800561)
whose registered office is at Tom Cribb Road, Thamesmead, London SE28 0BH (the “Seller”);

	 
	(2)	 	MCMURDO LIMITED, a company registered in England (registered number 6952856 whose registered
office is at Silver Point, Airport Service Road, Portsmouth PO3 5PB (the “Buyer” or “McMurdo
Limited”);

	 
	(3)	 	Digital Angel Corporation, a company incorporated under the laws of the state of Delaware,
whose registered office is 490 Villaume Avenue, South St, Paul MN 55075 -2433 USA (“DC”).

	 
	(4)	 	OROLIA SA, a company incorporated under the laws of France, whose registered office is at 3
Avenue Du Canada, 91 974 Les Ulis cedex, France (“OROLIA”).

Agreed terms:

	1	 	Definitions and interpretation

	 	1.1	 	In this Agreement, unless the context otherwise requires, the following words will
have the following meanings:

	 	 	 
	Accounting Date

	 	31 December 2008;
	 
	 	 
	Accounts

	 	the audited financial statements of the Seller for the accounting
reference period ended on the Accounting Date comprising a balance
sheet, profit and loss account, notes, the directors’ and auditors’
reports;

	 
	 	 
	Actual Stock Value

	 	the aggregate value of the Stock as shown in the Completion Statement as
agreed or determined in accordance with Schedule 12;

	 
	 	 
	Aged Creditors List

	 	the aged creditors list relating to the Due Creditors and the Creditors’
Sums dated and issued by the Seller to OROLIA immediately before
Completion and showing the sums due to those Creditors in decreasing
order of value, initialled and agreed between the Seller, the Buyer and
OROLIA;

	 
	 	 
	Anniversary Date

	 	the first anniversary of the Transfer Date;

	 
	 	 
	Assets

	 	the assets of the Business agreed to be sold and purchased pursuant to
this Agreement as described in clause 2.1;

	 
	 	 
	Book Debts

	 	all trade and other debts owing to the Seller on the Transfer Date in
relation to the Business;

	 
	 	 
	Brands

	 	the names or code references by which products are known and which may
or may not include a Logo and/or Trademark in their description;
	 
	 	 
	Business

	 	the business of the design, manufacture and sale of marine personal
location beacons and complimentary maritime safety products including
the Products carried on by the Seller at the Transfer Date, from the
Property (other than the Retained Business);

	 
	 	 
	Business Contracts

	 	the Customer Contracts, Suppliers Contracts, IP Licences, Leasing/Hire
Agreements, and all other contracts, arrangements, licences and other
commitments whether conditional or unconditional and whether by deed,
under hand, oral or otherwise relating to the Business entered into on
or before the Transfer Date, and which remain to be performed in whole
or in part at the Transfer Date, which have been entered into by or for
the benefit of the Seller, or the benefit of which is held in trust for
or has been assigned or subcontracted to the Seller, but excluding the
Liabilities;

 

3

 

	 	 	 
	Business Day

	 	any day which is not a Saturday, a Sunday or a bank or public holiday in
England and Wales;

	 
	 	 
	Business Information

	 	all information, documentation, papers, books, records, know-how and
techniques (whether or not confidential and in whatever form held) (if
any) which exclusively relates to:

	 
	 	 
	 

	 	(a)  all or any part of the Business and Assets (including all books,
accounts, credit reports, price lists, cost records, warranty records,
work tickets, catalogues, certificates of title (including all
correspondence with the patent and trade mark agents relating to any
registered Business Intellectual Property and all registration
certificates therefor));

	 
	 	 
	 

	 	(b)  any products manufactured or sold or services rendered by the
Business (including formulae, designs, processes, specifications,
drawings, data, manuals or instructions, plans, product descriptions,
user or test reports, type approval papers or certificates,
instructional and promotional material and other technical material
together with any plates, blocks, negatives and similar material
relating thereto);

	 
	 	 
	 

	 	(c)  any products or processes which are or were the subject of any
research or development undertaken exclusively by the Business (whether
or not completed or abandoned);

	 
	 	 
	 

	 	(d)  the operations, management, administration, or financial affairs of
the Business (including all employee records and interview records); and

	 
	 	 
	 

	 	(e)  the sale or marketing of any of the products manufactured and/or
sold or services rendered by the Business including, without limitation,
all Customers and suppliers names and lists limited to the Customers and
suppliers of the Business since the period of the Seller’s ownership of
the Business, sales advertising and marketing information (including
without limitation, targets, sales and market share statistics, market
surveys and reports on research commissioned by the Seller and terms and
conditions of sale or supply;

	 
	 	 
	Business Intellectual Property

	 	all Intellectual Property owned or lawfully used by the Seller
exclusively in connection with the Business as carried on by the Seller
as at the Transfer Date including:

	 
	 	 
	 

	 	(a)  those items of registered Intellectual Property (and applications
therefor) described in Schedule 8;

	 
	 	 
	 

	 	(b)  the Business Information;

	 
	 	 
	 

	 	(c)  the Business Names;

	 
	 	 
	 

	 	(d)  the know-how and trade secrets;

	 
	 	 
	 

	 	(e)  the Brands, design rights, Logos, patents, Trade Marks, copyright,
Domain Names, the website, and email addresses; and

	 
	 	 
	 

	 	(f)  any other confidential and proprietary knowledge and information;

	 
	 	 
	 

	 	(g)  all the Intellectual Property Rights to the plastics, mechanics,
electronics and software making up the Nav 7 Product (save for the
demodulation library source code);

	 
	 	 
	 

	 	whether registered or not, and the right to apply for the same, and to
renew or extend such rights, anywhere in the world;

 

4

 

	 	 	 
	Business Names

	 	‘McMurdo’ and ‘McMurdo a division of Signature Industries’;

	 
	 	 
	Buyer’s Group

	 	the Buyer, OROLIA and all companies and undertakings which now or in the
future become subsidiaries or subsidiary undertakings of the Buyer,
OROLIA or of any such holding company;

	 
	 	 
	CAA

	 	the Capital Allowances Act 2001;
	 
	 	 
	Chemring Stock

	 	the items of stock-in-trade disclosed in M1.002 of the Disclosure Bundle;

	 
	 	 
	Completion

	 	completion of the sale and purchase of the Business and the Assets in
accordance with clause 8;

	 
	 	 
	Completion Date

	 	(subject to clause 5) the date which is the earlier of:

	 
	 	 
	 

	 	(a)  5 Business Days after notice has been given in accordance with
clause 5 by the relevant Party that the last unsatisfied Condition has
been satisfied;

	 
	 	 
	 

	 	(b)  5 Business Days after OROLIA has waived the last unsatisfied
Condition or Conditions in accordance with clause 5.4; or

	 
	 	 
	 

	 	(c)  or such other date as OROLIA and the Seller may agree in writing;

	 
	 	 
	Completion Statement

	 	the completion statement prepared in accordance with the clause 4.1 and
Schedule 12;

	 
	 	 
	Computer System

	 	all computer hardware and associated peripheral equipment, software,
networks and technical and other documentation related thereto owned or
used by the Business including all arrangements relating to the
provision of maintenance and support, security, disaster recovery,
facilities management, bureau and on-line services to the Business;

	 
	 	 
	Conditions

	 	the conditions precedent set out in clause 5.1;

	 
	 	 
	Consideration

	 	the total purchase price payable by the Buyer to the Seller in
accordance with clause 3.1;

	 
	 	 
	Creditors

	 	all trade and other debts, accrued charges and all other amounts owing
by the Seller in connection with the Business on the Transfer Date;

	 
	 	 
	Creditors’ Fund

	 	the amount representing the Creditors’ Sums;

	 
	 	 
	Creditors’ Sums

	 	the sums set out in the Aged Creditors List due by the Seller to the
Creditors other than the sums owed to the Due Creditors to be paid by
the Buyer after Completion out of the Creditors’ Fund to certain
Creditors other than the Due Creditors;

	 
	 	 
	Customers

	 	the persons, firms or companies who or which were at or before the
Transfer Date a customer or prospective customer of the Business;

 

5

 

	 	 	 
	Customer Contracts

	 	those contracts, engagements or orders entered into on or prior to the
Transfer Date by or on behalf of the Seller with Customers in connection
with and in the ordinary course of the Business which at the Transfer
Date remain to be performed in whole or in part by the Seller including
those contracts listed in Schedule 5 and subject to clause 9 (Conduct of
the Business prior to Completion) any further such contracts entered
into after or on today’s date. For the avoidance of doubt this excludes
the Kelvin Hughes Contract, the RNLI Contract and any customer and/or
distribution agreement, purchase order or arrangement relating to the
product sold or supplied by the Seller under the Dive Canister Contract;

	 
	 	 
	Disclosure Bundle

	 	has the meaning given in the Disclosure Letter;

	 
	 	 
	Disclosure Letter

	 	a letter dated the same date as this Agreement from the Seller to the
Buyer and OROLIA;

	 
	 	 
	Dive Canister Contract

	 	the trade agreement dated 27 February 2009 between the Seller (1) and
Dive Containers New Zealand Ltd (2) , a copy of which is document
D21.008 of the Disclosure Bundle;

	 
	 	 
	Domain Names

	 	the domain names required for the carrying on of the Business details of which are given in
Schedule 8;

	 
	 	 
	Due Amount

	 	the amount (if any) due to the Buyer being settled as defined in
paragraph 2.4 of Schedule 9;

	 
	 	 
	Due Creditors

	 	any overdue insurance premium, any overdue rent and service charges
relating to the Property, and the first 20 trade Creditors in value as
at the Completion Date based on the Aged Creditors List;

	 
	 	 
	Employees

	 	the persons whose names are set out in Schedule 4 and subject to clause
9 (Conduct of the Business prior to Completion) any further persons who
are employed by the Seller as employees in the Business on or after
today’s date up to and including the Transfer Date;

	 
	 	 
	Escrow Account

	 	an interest bearing bank account in the joint names of the Seller’s
Solicitors and OROLIA’s Solicitors and designated as required by the
Instruction Letter;

	 
	 	 
	Escrow Agents

	 	the Seller’s Solicitors and OROLIA’s Solicitors;

	 
	 	 
	Escrow Agreement

	 	the agreement, in the agreed form, to be signed by the parties
instructing and authorising the Escrow Agents to establish and operate
the Escrow Account in the form set out in Schedule 9;

 

6

 

	 	 	 
	Excluded Assets

	 	the following assets which are excluded from the sale to the Buyer under
this Agreement: (i) the Retained Business; (ii) the Book Debts and all
records relating to the same; (iii) the statutory books and books
relating to the Retained Business and all of the records of the Seller
relating to the Retained Business; (iv) cash in hand or at the bank and
all cheques and other securities representing the same; (v) any right to
use or continue to use after Completion any trade or service name or
mark of the Seller or any member of the Seller’s Group other than the
Business Names; (vi) the Property; (vii) the intellectual property
associated with Sarbe ‘stubby’ antenna McMurdo Pt No. 83-200A; (viii)
the intellectual property associated with the Sarbe PELS remote antenna
Pt No. 33806-1-6; ; (ix) all assets, property rights and other interests
of the Seller other than the Assets; (x) all corporation tax repayments,
withholding tax refunds, VAT refunds due from HM Revenue & Customs; (xi)
the VAT Records; (xii) the Creditors; (xiii) the RNLI Contract; (xiv)
the Kelvin Hughes Contract; (xv) the Dive Canister Contract; (xvi) all
properties, any leases or subleases of Properties or rights in any real
properties of the Seller; (xvii) all shares or securities held in by the
Seller in the capital of any company or undertaking including Keyswitch
Varley Limited, Sarbe Limited, and McMurdo Limited; (xviii) the Seller’s
Scheme and (xix) all Leasing/Hire agreements other than the Vehicle
Leases and (xx) all employees’ benefits of the Retained Business and
which are not capable of being transferred under this Agreement and
(xxi) all assets relating to NAV5, NAV5+, NAV6, NAV DUAL, NAV6 plus,
NAV6A plus and NAV6 Repeater products and (xxii) the Nav 7 demodulation
library source code;

	 
	 	 
	General Retention

	 	the sum of US$1,000,000 further referred to in Clause 3.2.2;
	 
	 	 
	Goodwill

	 	the goodwill custom interest and connection of the Seller in and
concerning the Business together with the exclusive right for the Buyer
and its successors and assigns to carry on the Business under the
Business Names (and all other names associated with the Business) and
respectively to represent themselves as carrying on the Business in
succession to the Seller;

	 
	 	 
	Guaranteed Agreements

	 	has the meaning given in clause 21.1;

	 
	 	 
	Initial Consideration

	 	has the meaning ascribed to it in clause 3.2.1;

	 
	 	 
	Initial Stock Value

	 	the net book value of the Stock agreed between the Seller and OROLIA as
being £1,300,000 ;

	 
	 	 
	Insolvency Event

	 	(a) the passing of a resolution for the liquidation of the party other
than a solvent liquidation for the purpose of the reconstruction or
amalgamation of all or part of the Seller’s Group or the Buyer’s Group
(the structure of which has been previously approved by the other party
in writing) in which a new company assumes (and is capable of assuming)
all the obligations of the party; or

	 
	 	 
	 

	 	(b) the presentation at court by any competent person of a petition for
the winding up of the Seller or the Buyer and which has not been
withdrawn or dismissed within fourteen days of such presentation; or

	 
	 	 
	 

	 	(d) the issue at court by any competent person of a notice of intention
to appoint an administrator to the Seller or the Buyer, a notice of
appointment of an administrator to the Seller or the Buyer or an
application for an administration order in respect of the Seller or the
Buyer; or

	 
	 	 
	 

	 	(e) any step is taken by any person to appoint a receiver,
administrative receiver or manager in respect of the whole or a
substantial part of the assets or undertaking of the Seller or the
Buyer; or

	 
	 	 
	 

	 	(f) a non frivolous statutory demand outstanding against the Seller or
the Seller or the Buyer being unable to pay its debts as they fall due
for the purposes of section 123 of the Insolvency Act 1986

 

7

 

	 	 	 
	Instruction Letter

	 	the letter from the Seller and the Buyer to the Seller’s Solicitors and
OROLIA’s Solicitors relating to the Retention in the form agreed as set
out in Part 2 of Schedule 9;

	 
	 	 
	Intellectual Property

	 	patents, right to invention, know-how, goodwill, registered and
unregistered trademarks and service marks, domain names, registered
designs, design rights, utility models, copyright (including all such
rights in computer software, information and any databases), Logos,
Brands, database rights, moral rights and topography rights, trade
secret and other similar confidential information, rights in the nature
of unfair competition rights and right to sue for passing off and any
other similar intellectual proprietary knowledge or information or
commercial right (in each case whether or not registered or registrable
for the full period thereof and all extensions and renewals thereof),
applications for any of the foregoing and the right to apply for any of
the foregoing in any part of the world and any similar rights situated
in any country;

	 
	 	 
	IP Licences

	 	any licences, authorisations and permissions in any form whatsoever
whether express or implied, written or unwritten (a) pertaining to the
use, enjoyment and exploitation by the Seller of any Business
Intellectual Property in connection with the Business as carried on at
the Transfer Date;

	 
	 	 
	Kelvin Hughes Contract

	 	the development and supply agreement dated 30 December 2005 between the
Seller (1) and Kelvin Hughes (2) , a copy of which is document D21.004
of the Disclosure Bundle;

	 
	 	 
	Lease

	 	a lease of the Property dated 25 February 2008 made between Chemring
Group plc and Signature Industries Limited together with any documents
ancillary or supplemental to it.

	 
	 	 
	Leasing/Hire Agreements

	 	those leasing and hire agreements entered into on or prior to the
Transfer Date by or on behalf of the Seller for the lease or hire of
equipment exclusively in connection with and in the ordinary course of
the Business which at the Transfer Date remain to be performed in whole
or in part being those contracts listed in Part 2 of Schedule 11;

	 
	 	 
	Legal Opinion

	 	the legal opinion in agreed form given in relation to DC or OROLIA (as
appropriate) entering into this Agreement;

	 
	 	 
	Liabilities

	 	all liabilities relating directly or indirectly to the Retained Business
and the Excluded Assets, the Seller’s Schemes and all other liabilities
or obligations relating to the Business or Assets and outstanding on, or
accrued or referable to the period up to and including, the Transfer
Date or arising by virtue of the sale and purchase recorded by this
Agreement, including any and all liabilities in respect of Taxation
attributable to the Seller in respect of the Business or the Assets
relating to the period ending on the Transfer Date and all bank and
other overdrafts and loans owing by the Seller other than those
specified to be transferred in this Agreement or any of the Transaction
Documents;

	 
	 	 
	Licence to Occupy

	 	the licence to occupy the Property between the Seller and the Buyer in
the agreed form as set out in Schedule 13 to be entered into between the
Seller (1) and the Buyer (2) on Completion;

	 
	 	 
	Logos

	 	the logos used in connection with the Business excluding all and any
owned or used by the Seller in connection with the Retained Business;

 

8

 

	 	 	 
	Long Stop Date

	 	18 December 2009 (or such other date the Seller and OROLIA may agree in
writing);

	 
	 	 
	Management Accounts

	 	unaudited profit and loss account and balance sheet for the Business as
at and for the period to August 2009, a copy of which is in the
Disclosure Bundle;

	 
	 	 
	Mandate Letters

	 	the letters of instruction from the Seller’s Solicitors and OROLIA’s
Solicitors in the agreed form;

	 
	 	 
	McMurdo Limited or 

the “Buyer”

	 	a dormant company being a wholly owned subsidiary of the Seller, incorporated on 6 July 2009
under Company Number 6952856 by the Seller for the purpose of selling that company to OROLIA
immediately prior to the Completion Date of this Agreement, in accordance with the terms of
McMurdo Ltd Sale and Purchase Agreement referred to in Schedule 14;

	 
	 	 
	McMurdo Ltd Sale and Purchase Agreement

	 	the agreement to be entered into by the Parties as set forth in Schedule
14 for the acquisition by OROLIA of the entire issued share capital of
McMurdo Limited;

	 
	 	 
	Nav 5 Stock

	 	all stock relating to NAV5 and NAV5+ products

	 
	 	 
	Nav 6 Stock

	 	all stock relating to NAV6+, NAV Dual, NAV6 plus, NAV6A plus and NAV6
Repeater products

	 
	 	 
	OROLIA’s Confidential Information

	 	has the meaning as ascribed to it in clause 19.1;

	 
	 	 
	OROLIA’s Solicitors

	 	Pritchard Englefield Solicitors, 14 New Street, London EC2M 4HE;

	 
	 	 
	Parties

	 	the parties to this Agreement (and Party means any of them depending on
the context);

	 
	 	 
	Patent Assignment

	 	the patent assignment in the agreed form to be entered into between the
Seller (1) and the Buyer (2);

	 
	 	 
	Plant

	 	fixed or moveable fixtures and fittings, plant, equipment, hardware
items of office equipment and Computer System used at the Property ,
machinery wherever situate, including tools (including to the extent
owned by the Seller the tools relating to MOB Guardian products sold
under the RNLI Contract disclosed in the Disclosure Letter) and jigs in
the possession of suppliers, belonging to the Seller and used
exclusively in connection with the Business including those listed in
Schedule 10 and the offsite tooling disclosed in the Disclosure Letter,
and subject to Clause 9 (Conduct of Business Prior to Completion)
together with any other such items acquired by the Seller after today’s
date but before Completion for use exclusively in connection with the
Business and less any items on such list which are disposed of by the
Seller after today’s date but before Completion;

	 
	 	 
	Post Exchange Breach

	 	has the meaning given in clause 10.6;

	 
	 	 
	Products

	 	the products listed at Schedule 7;

	 
	 	 
	Property

	 	the property known as Silver Point, Airport Service Road, Portsmouth
PO3 5PB and any part or parts thereof as further demised and described
in the Lease;

 

9

 

	 	 	 
	Relevant Claim

	 	any claim by the Buyer for breach of or liability under any of the
representations, undertakings, agreements, covenants, warranties
(including the Warranties) and indemnities made against the Seller or DC
under or pursuant to this Agreement and any Transaction Documents save
for
the Seller’s obligations to pay for the services set out in Transitional
Service Agreement unless any such monies remain outstanding from the
Seller to the Buyer under the Transitional Services Agreement
immediately before the Anniversary Date;

	 
	 	 
	Request Letter

	 	the letter from the Escrow Agent to the relevant bank relating to the
Retention in the form agreed as set out in Part 2 of Schedule 9;

	 
	 	 
	Retained Business

	 	any businesses including without limitation all the assets, contracts
and any other property and rights in connection with such businesses
(other than the Business and Assets) carried on or previously carried on
by the Seller including any arrangements of the Seller between the
Business and the Seller’s other businesses and including the business
relating to the Nav 5 and 6 series products;

	 
	 	 
	Retention

	 	the General Retention in accordance with clause 3.2.2;

	 
	 	 
	RNLI Contract

	 	the manufacturing and marketing licensing agreement for the MOB Guardian
dated 16 November 2007 between the Seller (1) and RNLI (2) ,
corresponding to document J3.000 of the Disclosure Bundle;

	 
	 	 
	Schedule of Apportionments

	 	the schedule of apportionments pursuant to clause 15.12;

	 
	 	 
	Seller’s Solicitors

	 	Kimbells LLP, Power House, Harrison Close, Knowlhill, Milton Keynes MK5
8PA;

	 
	 	 
	Seller’s Solicitors Account

	 	National Westminster Bank plc Solicitors Corporate Service Team, PO Box
333, Silbury House ,300 Silbury Boulevard, Milton Keynes MK9 2ZF 

Sort Code: 60-14-55

Client Account: 60546085;

	 
	 	 
	Security Interest

	 	any encumbrance, mortgage, charge (fixed or floating), assignment for
the purpose of security, pledge, lien, right of set-off, security
interest (including any created by law), retention of title or
hypothecation for the purpose, or which has the effect, of granting
security interest of any kind whatsoever and any agreement or
arrangement, whether conditional or otherwise, to create any of the
foregoing (including any right to acquire, option or right of
pre-emption);

	 
	 	 
	Seller’s Confidential Information

	 	has the meaning ascribed to it in clause 19.1;

	 
	 	 
	Seller’s Group

	 	the Seller, its holding company and all companies and undertakings which
now or in the future become subsidiaries or subsidiary undertakings of
the Seller or of any such holding company;

 

10

 

	 	 	 
	Seller’s Scheme(s)

	 	all agreements or arrangements (whether legally enforceable or not) for
the payment of any pensions, allowances, lump sums or other like
benefits on retirement for the benefit of any Employee or Other Employee
(as defined in Clause 13.2.1) of the Seller or for the benefit of the
dependants of such any person including the Prudential Money Purchase
Master Plan and the Prudential Stakeholder Plan;

	 
	 	 
	Solicitors

	 	OROLIA’s Solicitors and the Seller’s Solicitors;

	 
	 	 
	Special Provisions Order

	 	the VAT (Special Provisions) Order 1995 SI 1995/1268;
	 
	 	 
	Stock

	 	the stock-in-trade exclusively relating to the Business at the Transfer
Date including (without limitation) raw materials, goods and other
assets purchased for resale, stores, component parts, work in progress,
together with finished products, packaging and promotional material owed
by the Seller, all exclusively relating to the Business but for the
avoidance of doubt, excluding , the Chemring Stock, the Nav 5 Stock and
the Nav 6 Stock and stock relating to the C1 SVDR Capsule product;

	 
	 	 
	Supplier Contracts

	 	those contracts, engagements or orders entered into on or prior to the
Transfer Date by or on behalf of the Seller for the supply or sale of
goods or services to the Seller exclusively in connection with and in
the ordinary course of the Business which at the Transfer Date remain to
be performed in whole or in part including those contracts listed in
Schedule 7 but excluding any liabilities thereunder (other than the
Creditors’ Sums) and excluding any supplier contracts relating to the
Excluded Assets and the Retained Business;

	 
	 	 
	Tax or Taxation

	 	all taxes, levies, duties, imposts, charges, contributions and
withholdings of any nature whatsoever or wheresoever imposed and all
penalties, fines, charges, surcharges and interest relating thereto;

	 
	 	 
	Trade Mark

	 	the registered or unregistered trade marks used in connection with the
Business including those listed in Schedule 8 together with all trade or
service mark applications or registered trade or service marks,
registered protected designations of origin, registered protected
geographic origins, refilings, renewals or reissue thereof, unregistered
trade or service marks, get up and company names 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;

	 
	 	 
	Trade Mark Assignment

	 	the “McMurdo” trade mark assignment in the agreed form to be entered
into between the Seller (1) and the Buyer (2) on Completion;

	 
	 	 
	Transaction Documents

	 	Disclosure Letter, Transitional Services Agreement, McMurdo Ltd Share
Purchase Agreement, Trade Mark Assignment, Licence to Occupy, Patent
Assignment, Escrow Agreement and any other documents ancillary to this
Agreement;

	 
	 	 
	Transfer Date

	 	the close of business on the Completion Date;

	 
	 	 
	Transitional Services Agreement

	 	an agreement in respect of certain transitional services between the
Seller and the Buyer to be entered into on Completion;

	 
	 	 
	TULRA

	 	the Trade Union and Labour Relations (Consolidation) Act 1992;

 

11

 

	 	 	 
	TUPE

	 	the Transfer of Undertakings (Protection of Employment) Regulations 2006
(as amended) (and, where the context so requires, the Transfer of
Undertakings (Protection of Employment) Regulations 1981;

	 
	 	 
	VAT

	 	Value Added Tax or any equivalent tax outside of the United Kingdom;

	 
	 	 
	VATA

	 	Valued Added Tax Act 1994;
	 
	 	 
	Vehicle Leases

	 	the vehicle leases listed in Part 1 of Schedule 11;
	 
	 	 
	Warranties

	 	the warranties set out in clause 10.1 and Schedule 2;
	 
	 	 
	Warranty Claim

	 	a claim for a breach of Warranty.

	 	1.2	 	In this Agreement, unless the context requires otherwise:

	 	1.2.1	 	save as otherwise provided in the Agreement, words and expressions used in
this Agreement that are defined in the provisions of the Companies Act 2006 or the
Insolvency Act 1986 in force at the date of this Agreement shall be read as having
those meanings;

	 
	 	1.2.2	 	a document in the agreed form is a document which has been agreed by the
parties before today’s date and which has been initialled by them or on their behalf
for identification;

	 
	 	1.2.3	 	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 to a paragraph are to a paragraph of that Schedule;

	 
	 	1.2.4	 	all words and terms defined in a Schedule have the same meaning when used
elsewhere in this Agreement;

	 
	 	1.2.5	 	references to this Agreement or any other document are to this Agreement or
that document as amended from time to time;

	 
	 	1.2.6	 	the singular includes the plural and vice versa; references to any gender
include every gender, and references to persons include corporations, partnerships and
other unincorporated associations or bodies of persons;

	 
	 	1.2.7	 	all headings and subheadings are for convenience, have no legal effect and
should be ignored in the interpretation of this Agreement;

	 
	 	1.2.8	 	the words other, otherwise, including and in particular or any similar
expression do not limit the generality of any preceding words;

	 
	 	1.2.9	 	any obligation not to do anything is deemed to include an obligation not to
suffer, permit or cause that thing to be done if it is within the power of the
relevant person to prevent that thing being done;

	 
	 	1.2.10	 	agreements includes any agreement, arrangement, contract, commitment, scheme or
understanding (whether or not made in writing) whether legally binding or not and
references to being party to an agreement will be construed accordingly;

	 
	 	1.2.11	 	enactment means any statute or statutory provision (of the United Kingdom or
elsewhere) and any subordinate legislation made under any statute or statutory
provision;

	 
	 	1.2.12	 	a reference to any enactment includes a reference to:

	 	(a)	 	any enactment which that enactment has directly or
indirectly replaced (with or without modification); and

	 
	 	(b)	 	that enactment as re-enacted, replaced or modified at any
time except to the extent that the liability of any party would be increased
or extended as a result.

 

12

 

	 	1.2.13	 	subsidiary and holding company have the meanings given to them by section 1159
Companies Act 2006 and subsidiary undertaking and parent undertaking will have the
meanings given to them by section 1162 Companies Act 2006; and

	 
	 	1.2.14	 	any reference to “persons” shall include references to natural persons, firms
corporations or unincorporated associations or, governments, governmental agencies and
departments, statutory bodies or other entities, in each case
whether or not having a separate legal personality, and shall include such person’s
successor;

	 
	 	1.2.15	 	a reference to a “company” shall include any company, corporation or other body
corporate, wherever and however incorporated or established and a “body corporate”
shall be construed so as to include any company, corporation or other body corporate
and limited liability partnership wherever and howsoever incorporated or established;

	 
	 	1.2.16	 	any reference to any English legal term for any action, remedy, method of judicial
proceeding, legal document, legal status, court, official, person or any other legal
concept shall, in respect of any other jurisdiction, be treated as including that
which in its nature and effect most nearly approximates in that jurisdiction to the
English legal term;

	 
	 	1.2.17	 	any amount expressed in US Dollars (US$) or pounds sterling (£) shall, to the extent
that it requires in whole or in part to be expressed in any other currency in order to
give due effect to this Agreement, be deemed for that purpose to have been converted
into the relevant currency immediately before the close of business on Completion (or,
if that is not a Business Day, the Business Day immediately preceding such day).
Subject to any applicable legal requirements governing conversions into that currency,
the rate of exchange shall be National Westminster Bank plc’s mid-point spot rate for
the purchase of that currency with dollars or sterling (as applicable) at the time of
the deemed conversion; and

	 
	 	1.2.18	 	where it is necessary to determine whether a monetary limit or threshold set out in
paragraph 4 of Schedule 3 (or any other threshold or limit in this Agreement and/or
any Transaction Documents (if any)) has been reached or exceeded and the value of the
Relevant Claim is expressed in a currency other than pound sterling (£), the value of
that Relevant Claim shall be translated into pound sterling at the closing mid-point
spot rate applicable to that amount of that non-sterling currency at close of business
in London on the date of receipt by the Seller of written notification from the
Purchaser (in accordance with the relevant provisions of this Agreement) of the
existence of such claim (or, if such day is not a Business Day, on the Business Day
immediately preceding such day) and subject to any applicable legal requirements
governing conversions into that currency, the rate of exchange shall be National
Westminster Bank plc’s mid-point spot rate for the purchase of that currency with
sterling on the next following day.

	 
	 	1.2.19	 	Any reference to an indemnity shall be construed as an undertaking by one party to
the other to fully indemnify and keep fully indemnified the relevant party against all
losses, liabilities (including liabilities to Tax), damages, costs, actions, awards,
penalties, fines, proceedings, claims, demands and reasonable and proper legal and
professional fees and expenses arising directly out of the breach and the word
indemnify shall be construed accordingly.

	2	 	Agreement to Sell and Purchase

	 	2.1	 	Subject to clause 5, with effect from the Transfer Date the Seller will sell and the Buyer
relying on the Warranties and clause 22, will purchase the Business as a going concern
together with the following assets:

	 	2.1.1	 	the Goodwill;

	 
	 	2.1.2	 	the Plant;

	 
	 	2.1.3	 	the Stock;

	 
	 	2.1.4	 	the benefit (subject to the burden) of the Business Contracts;

 

13

 

	 	2.1.5	 	the Business Intellectual Property (excluding the Business
Information (see below));

	 
	 	2.1.6	 	the Business Information; and

	 
	 	2.1.7	 	all the Seller’s rights against third parties including all
rights under any of the warranties, conditions, guarantees or indemnities or
under the Sale of Goods Act 1979 exclusively relating to any of the Assets and
the benefit of all sums to which the Seller is entitled from third parties or
insurers in respect of damage to those Assets listed in clauses 2.1.1 to 2.1.6
(inclusive);

	 	 	 	but for the avoidance of doubt, excluding the Excluded Assets.

	 
	 	2.2	 	The Seller will sell the Business and the Assets to the Buyer with full title guarantee free
from all Security Interests.

	 
	 	2.3	 	Title to and beneficial ownership of each of the Assets will pass to the Buyer on Completion.

	 
	 	2.4	 	Nothing in this Agreement shall pass to OROLIA or the Buyer, or shall be construed as
acceptance by OROLIA or the Buyer, of any liability, debt or other obligation of the Seller,
other than as expressly set out in this Agreement.

	 
	 	2.5	 	The Seller shall indemnify OROLIA and the Buyer in relation to:-

	 	2.5.1	 	the Liabilities which are attributable to the period up to and including the Transfer Date;

	 
	 	2.5.2	 	all outstanding charges and other security interests relating to any Assets
and subsisting at Completion;

	 
	 	2.5.3	 	all supplier accounts relating to any of the Assets acquired by or any
service supplied to the Business, whether such accounts are rendered before or after
Completion.

	3	 	Consideration

	 	3.1	 	The consideration (“the Consideration”) for the sale and purchase of the Business
Assets shall be USD 10,000,000 (ten million US dollars) as adjusted in accordance with
clause 3.4, clause 4 and Schedules 9 and 12.

	 
	 	3.2	 	The Consideration will be paid by the Buyer as follows:

	 	3.2.1	 	USD 9,000,000 (“Initial Consideration”) will be paid in cash on Completion
to the Seller in accordance with clause 8.1.5(h); and

	 
	 	3.2.2	 	USD 1, 000,000 (“General Retention”) will be paid in cash on Completion into
the Escrow Account in accordance with clause 8.1.5(i).

	 	3.3	 	The provisions of Schedule 9 apply to the Retention once it has been deposited in the
Escrow Account. The Buyer and the Seller shall instruct the Escrow Agents to open the
Escrow Account using the Escrow Agreement in the agreed form as set forth in Schedule 9.

	 
	 	3.4	 	On Completion, the Buyer shall retain the Creditors’ Sums and USD250,000 as a
contribution towards the cost of developing new intellectual property and the Initial
Consideration shall be adjusted accordingly.

	 
	 	3.5	 	The Consideration shall (subject as aforesaid, to clauses 3.4 and 4 and Schedules 9
and 12) be apportioned between the Assets in the manner set out in Schedule 1.

	 
	 	3.6	 	The apportionment of Consideration referred to in Schedule 1 is given for the sake of
convenience only and the Seller agrees that OROLIA and/or the Buyer’s remedies shall not
in any way be limited or affected by the amount apportioned to any particular Business
Asset or category of Assets.

	 
	 	3.7	 	All sums payable by the Buyer are stated exclusive of VAT which shall (if applicable)
be payable in addition to such sums on the presentation by the Seller of the relevant VAT
invoices.

 

14

 

	4	 	Adjustment to the Initial Stock Value

	 	4.1	 	OROLIA, the Buyer and the Seller will ensure that the Completion Statement is
prepared in accordance with Schedule 12.

	 
	 	4.2	 	If the Actual Stock Value:

	 	4.2.1	 	is equal to the Initial Stock Value there shall be no adjustment of the Initial Consideration;

	 
	 	4.2.2	 	is less than the Initial Stock Value the Initial Consideration will be
reduced by an amount equal to the deficiency, provided always that the Seller shall
not be required pursuant to this clause to repay an amount which is more than Initial
Stock Value; or

	 
	 	4.2.3	 	is more than the Initial Stock Value the Buyer will pay to the Seller an
additional amount of consideration, such amount being equal to the excess.

	 	4.3	 	Any payment required to be made under clause 4.2 will be made in cleared funds by
electronic funds transfer on Completion or on determination if later in accordance with
Schedule 12.

	5	 	Conditions Precedent

	 	5.1	 	Subject to clause 5, completion of the sale and purchase of the Business under this
Agreement is subject to the Seller satisfying each of the following Conditions:

	 	5.1.1	 	the Buyer receiving to its satisfaction, evidence of the release of all
charges over the Business and Assets in accordance with clause 8.1.4(g);

	 
	 	5.1.2	 	the Buyer receiving the Trade Mark Assignment duly executed by the Seller;

	 
	 	5.1.3	 	the Buyer receiving the Patent Assignment duly executed by the Seller;

	 
	 	5.1.4	 	the Schedule of Condition as set out in the Licence to Occupy, duly agreed
between the Seller and OROLIA;

	 
	 	5.1.5	 	the Buyer receiving the Transitional Services Agreement duly executed by the
Seller;

	 
	 	5.1.6	 	the Buyer receiving the ISO 9001:2008 certificate pursuant to the quality
audit performed in July 2009 in relation to the Business conditional on Completion
taking place);

	 
	 	5.1.7	 	the Buyer receiving (conditional on Completion taking place) the Qinetiq
‘Module B’ certificate (in the form shown at document R1.013-R1.025 of the Disclosure
Bundle);

	 
	 	5.1.8	 	the Buyer receiving (conditional on Completion taking place) the Qinetiq
‘Module D’ certificate (in the form shown at document R1.087 of the Disclosure
Bundle);

	 
	 	5.1.9	 	the Buyer receiving the (conditional on Completion taking place) the COSPAS
SARSAT type approval certificates (in the form shown at R1.064-R1.068 of the
Disclosure Bundle);

	 
	 	5.1.10	 	the Buyer receiving the consent of Davis Instruments Corp to the assignment
(conditional on Completion taking place) of the Distribution Agreement dated 12
December 2002 between the Seller (1) and Davis Instruments Corp (2) (document D.11.001
of the Disclosure Bundle) in accordance with the terms of such agreement or in such
other manner or form as the Seller, OROLIA and the Buyer may agree;

	 
	 	5.1.11	 	the Buyer receiving the consent of Simrad Limited (under its current identity) to
the assignment (conditional on Completion taking place) of the Commercial Agreement
dated 10 July 2006 between McMurdo Ltd and Simrad Limited (document D7.002 of the
Disclosure Bundle) novated to the
Seller pursuant to the Deed of Novation dated 28 March 2007 (Document D7.002.2 of
the Disclosure Bundle) in accordance with the terms of such agreement or in such
other manner or form as the Seller, OROLIA and the Buyer may agree;

 

15

 

	 	5.1.12	 	the Buyer receiving the consent of Simrad Limited (under its current identity) to
the assignment (conditional on Completion taking place) of the Commercial Agreement
dated 7 February 2003 between McMurdo Ltd and Simrad Limited (document D21.001.1 of
the Disclosure Bundle) novated to the Seller pursuant to the Deed of Novation dated 28
March 2007 (Document D21.001.2 of the Disclosure Bundle) in accordance with the terms
of such agreement or in such other manner or form as the Seller, OROLIA and the Buyer
may agree;

	 
	 	5.1.13	 	the Buyer receiving satisfactory evidence of ownership for the recordal by the
Seller of the US FastFind trademark;

	 
	 	5.1.14	 	the Buyer receiving satisfactory evidence from the Seller that the Seller has
removed all Chemring Stock from the Property; and

	 
	 	5.1.15	 	the Buyer receiving confirmation in writing by the Seller and Jeremy Harrison that
the Seller and Jeremy Harrison have reached an agreement that the Seller will after
Completion pay to Jeremy Harrison any bonus, commission or any sum due under any
incentive scheme agreed for Jeremy Harrison for fiscal year 2009 and that he will have
no stock option rights in DC.

	 	5.2	 	The Seller and the Buyer shall respectively use all reasonable endeavours to ensure
the satisfaction of all the Conditions as soon as possible so far as lies within their
respective power so to do and OROLIA shall use all reasonable endeavours to co-operate and
assist the Seller and the Buyer to ensure the satisfaction of all of the Conditions. Each
Party shall give notice in writing to the other Parties of the satisfaction of the
relevant Conditions within two Business Days of becoming aware of the same.

	 
	 	5.3	 	All costs and expenses relating to obtaining the consents or approvals or other
matters referred to in clauses 5.1 will be borne by the Seller and the Seller shall
indemnify each of the Buyer and OROLIA against any such costs and expenses.

	 
	 	5.4	 	OROLIA may waive in writing all or any of the Conditions set out in clause 5.1.

	 
	 	5.5	 	Without prejudice to clauses 5.2 and 6.2 (in so far as it relates to clause 5.2), if
all the Conditions are not satisfied to the reasonable satisfaction of OROLIA or waived in
accordance with clause 5.4 on or before 4 December 2009 or such other date as the Seller
and OROLIA in their absolute discretion may agree in writing that this Agreement (save for
clauses 19 (Confidentiality) 23 (Announcements and Publicity), 24 (Notices), clause 33.3
and clause 34 which shall remain in force) shall become null and void and no party shall
be entitled to make a claim against any other party in connection with this Agreement save
for any claim which arises in respect of such clauses.

	 
	 	5.6	 	The Buyer shall not be entitled to waive or vary any conditions or terms of this
Agreement (including those set out in clause 8.1) without the prior written consent of
OROLIA.

	6	 	Break-up fee

	 	6.1	 	If all the Conditions are satisfied in accordance with Clause 5.1 and OROLIA fails to
complete the purchase of the Business and the Assets under clause 8 on the Completion Date
or rescinds or terminates this Agreement (other than where it properly rescinds or
terminates this Agreement in accordance with its terms or the Seller is subject to an
Insolvency Event) then OROLIA shall pay promptly and in any event within 30 Business Days
of a notice in writing issued by the Seller to OROLIA, to the Seller a break-up fee of USD
500,000.00 and this Agreement (save for clause 5.5, this clause 6, clause 19
(Confidentiality), clause 22 (DC
Guarantee), clause 33.3 and clause 34 which shall remain in force) shall become null
and void and no Party shall be entitled to make a claim against any other party in
connection with this Agreement save for any claim which arises in respect of clauses
5.5, 6, 19, 22 (DC Guarantee).

	 
	 	6.2	 	If all the Conditions are not satisfied or waived in accordance with clause 5.4 on or
before 4 December 2009 or such other date as the Seller and OROLIA in their absolute
discretion may agree in writing or OROLIA terminates the Agreement pursuant to clause
11.1.2, neither the Seller nor OROLIA shall be entitled to any break-up fee. However if
under clause 5.2 the Seller and the Buyer fail respectively to use all reasonable
endeavours to ensure the satisfaction of all the Conditions in accordance with that
clause, then the Seller or DC shall promptly and in any event within 30 Business Days of a
notice in writing issued by OROLIA to the Seller, pay to OROLIA a break-up fee of USD
500,000.00 and this Agreement (save for clause 5.5, this clause 6, clause 19
(Confidentiality) and clause 22 (DC Guarantee), clause 33.3 and clause 34 which shall
remain in force) shall become null and void and no Party shall be entitled to make a claim
against any other party in connection with this Agreement save for any claim which arises
in respect of clause 5.5, 6, 19, 22 (DC Guarantee).

 

16

 

	 	6.3	 	If all the Conditions are satisfied and the Seller or the Buyer (provided that the
Buyer is still wholly under the Seller’s control) fails to complete the sale of the
Business and the Assets under clause 8 on the Completion Date or rescinds or terminates
this Agreement (other than where they properly rescind or terminate this Agreement in
accordance with this Agreement) then the Seller or DC shall promptly and in any event
within 30 Business Days of a notice in writing issued by OROLIA to the Seller, pay to
OROLIA a break-up fee of USD 500,000.00 and this Agreement (save for clause 5.5, this
clause 6, clause 11,clause 23, clause 33.3 and clause 34 which shall remain in force)
shall become null and void and no Party shall be entitled to make a claim against any
other party in connection with this Agreement save for any claim which arises in respect
of clause 5.5, 6, 19 and 22.

	7	 	Exchange

	 	7.1	 	Exchange will take place at the offices of the Seller’s Solicitors on today’s date
(or such other place as the parties may agree), when the following will take place:

	 	7.1.1	 	the Seller will deliver, or procure delivery, to OROLIA of:

	 	(a)	 	the Seller obtaining and providing to the Buyer all
licences, consents and approvals required from Laurus;

	 
	 	(b)	 	the Disclosure Letter;

	 
	 	(c)	 	a certified copy of an extract from the minutes of
a meeting of the directors of the Seller and DC in the agreed form
authorising the execution by such party of this Agreement and of any
other documentation that may be necessary or desirable arising out of or
in connection with this Agreement and appointing the relevant signatory
or signatories to sign the same;

	 
	 	(d)	 	a certified copy of the minutes of a meeting of the
directors of the Buyer in the agreed form authorising the execution by
the Buyer of this Agreement and of any other documentation that may be
necessary or desirable arising out of or in connection with this
Agreement and appointing the relevant signatory or signatories to sign
the same; and

	 
	 	(e)	 	the Legal Opinion in relation to DC duly given by
the relevant lawyers;

	 	7.1.2	 	against compliance by the Seller with its obligations under clause 7.1.1
OROLIA will deliver, or procure delivery, to the Seller of:

	 	(a)	 	a certified copy of the minutes of a meeting of
the directors of OROLIA in the agreed form authorising the execution by
OROLIA of this Agreement and of any other documentation that may be
necessary or desirable arising out of or in connection with this
Agreement and appointing the relevant signatory or signatories to sign
the same;

	 
	 	(b)	 	a duly countersigned copy of the Disclosure Letter
by OROLIA and the Buyer;

	 
	 	(c)	 	the Legal Opinion in relation to OROLIA duly given
by the relevant lawyers; and

	 
	 	(d)	 	written evidence to the reasonable satisfaction of
the Seller that the Buyer will be able to fund the payments this
Agreement requires it is to make on Completion.

 

17

 

	 	7.1.3	 	The parties will deliver, or procure delivery to each other of all other
documents required to be in agreed form pursuant to this Agreement. For the avoidance
of doubt, these are as follows:-

	 	(a)	 	the Licence to Occupy;

	 
	 	(b)	 	the Escrow Agreement;

	 
	 	(c)	 	the McMurdo Ltd Sale and Purchase Agreement;

	 
	 	(d)	 	the Trade Mark Assignment; and

	 
	 	(e)	 	the Patent Assignment.

	8	 	Completion

	 	8.1	 	Subject to clause 5, Completion will take place at the offices of the Seller’s
Solicitors on the Completion Date (or such other place as the parties may agree), when the
following will take place:

	 	8.1.1	 	the Seller will sell and OROLIA will acquire the entire issued share capital
of McMurdo Limited (relying on the Warranties and the warranties set out in the
McMurdo Ltd Sale and Purchase Agreement) for a consideration of £1 according to the
McMurdo Ltd Share Purchase Agreement as attached to Schedule 14. The Seller hereby
procures that the board of directors of the Buyer will consent to the transfer of the
entire issued share capital of the Buyer to OROLIA;

	 
	 	8.1.2	 	the Seller will deliver, or procure delivery to OROLIA of duly executed
share transfers, written resignations and releases of the relevant officers of the
Buyer, share certificates, statutory books, or other documents of title and all other
documents effecting or ancillary to the transfer of the entire issued share capital of
the Buyer to OROLIA as further set out in and pursuant to the terms of the McMurdo Ltd
Share Purchase Agreement;

	 
	 	8.1.3	 	the Seller shall instruct the Seller’s solicitors to pay the Due Creditors
in accordance with clause 16.5;

	 
	 	8.1.4	 	the Seller will deliver, or procure delivery, (in the case of items (a) to
(f) below at the Property) to the Buyer of:

	 	(a)	 	all the Assets capable of passing by delivery (and title to
those assets will pass by delivery);

	 
	 	(b)	 	all documents of title and certificates it may hold
exclusively relating to the lawful operation and use of, and all service
documents pertaining to the Plant, and the Stock;

	 
	 	(c)	 	all documents, information and requirements set out in
Clause 5.1;

	 
	 	(d)	 	the Aged Creditors List duly initialled by the Seller;

	 
	 	(e)	 	all documents of title, certificates, deeds, licences,
agreements and other documents it may hold exclusively relating to the
Business Intellectual Property (including any correspondence with the patent
and trade mark agents relating to any registered Business Intellectual
Property and all registration certificates therefor) and all manuals,
drawings, plans, documents and other materials and media it may hold on which
the Business Information is exclusively recorded;

	 
	 	(f)	 	the Business Contracts to the extent they are written;

	 
	 	(g)	 	the duly executed discharge for all outstanding mortgages,
charges, pledges, securities and guarantees affecting the Business and Assets
(including MG04 forms duly sworn with reference to the partial releases of
the same and the following consents, authorisations, letters of non
crystallisation or similar clearances being granted in terms satisfactory to
OROLIA acting reasonably;

	 
	 	(h)	 	the McMurdo Ltd Sale and Purchase Agreement duly executed
by the Seller;

	 
	 	(i)	 	the Licence to Occupy duly executed by the Seller;

 

18

 

	 	(j)	 	the Trade Mark Assignment duly executed by the Seller;

	 
	 	(k)	 	the Transitional Services Agreement duly signed by the
Seller;

	 
	 	(l)	 	the Patent Assignment duly executed by the Seller; and

	 
	 	(m)	 	the Escrow Agreement duly executed by the Seller.

	 	8.1.5	 	against compliance by the Seller with its obligations under clauses 8.1.1 to 8.1.4 the Buyer will deliver, or procure delivery, to the Seller of:

	 	(a)	 	the Aged Creditors List duly signed by the Buyer and
OROLIA;

	 
	 	(b)	 	the McMurdo Ltd Sale and Purchase Agreement duly executed
by the OROLIA;

	 
	 	(c)	 	the Licence to Occupy duly executed by the Buyer;

	 
	 	(d)	 	the Trade Mark Assignment duly executed by the Buyer;

	 
	 	(e)	 	the Transitional Services Agreement duly signed by the
Buyer;

	 
	 	(f)	 	Patent Assignment duly executed by the Buyer;

	 
	 	(g)	 	the Escrow Agreement executed by the Buyer;

	 
	 	(h)	 	pay the Initial Consideration by electronic transfer to
the Seller’s Solicitors’ Account and the Seller’s Solicitors are hereby
authorised to receive the same and whose receipt will be an absolute
discharge of the Buyer;

	 
	 	(i)	 	pay the Retention by electronic transfer to the Escrow
Account; and

	 
	 	(j)	 	written confirmation from OROLIA pursuant to clause 8.2.

	 	8.2	 	The Buyer shall not be entitled to complete this Agreement without the consent of
OROLIA provided always OROLIA shall not withhold or delay in giving such consent where the
provisions of clauses 8.1.1 to 8.1.4 have been satisfied.

	 
	 	8.3	 	Neither OROLIA nor the Buyer will be obliged to complete the purchase of any of the
Assets unless the purchase of all the Assets is completed in accordance with this
Agreement. Neither OROLIA nor the Buyer will be obliged to complete if the Seller or DC
has suffered an Insolvency Event which is continuing.

	 
	 	8.4	 	At Completion the Seller and the Buyer shall sign the Escrow Agreement and the
Instruction Letters and procure that the Escrow Agents sign the Request Letter.

	 
	 	8.5	 	OROLIA may, acting reasonably, waive any requirement contained in clauses 8.1.1 to
8.1.4. The Seller may, acting reasonably, waive any requirement contained in clause
8.1.5.

	 
	 	8.6	 	If any of the provisions or obligations set out in clause 8.1 are not fully complied
with on the Completion Date by OROLIA or the Seller (as the case may be) (the “Party in
Default”) the Party to whom the relevant obligation is owed may, on one or more occasions,
by written notice to the Party in Default:

	 	8.6.1	 	defer Completion to a date not more than 10 Business Days following the
intended Completion Date or the next following intended Completion Date if Completion
has already been deferred under this Clause (and the provisions of clause 8 apart from
this clause 8.6 will apply to the deferred Completion) provided always it shall not be
deferred past the Long Stop Date; or

	 
	 	8.6.2	 	proceed to Completion so far as practicable (without prejudice to its rights
under this Agreement); or

	 
	 	8.6.3	 	rescind this Agreement.

	 	8.7	 	If this Agreement is rescinded pursuant to clause 8.6, it shall become null and void
(save for clauses 19 (Confidentiality) 22 (DC Guarantee), 23 (Announcement and Publicity),
24 (Notices) and 34 (Applicable law and Jurisdiction etc...) which shall remain in force)
and no Party shall be entitled to make a claim against any other party in connection with
this Agreement save for any claim which arises in respect of such clauses.

 

19

 

	9	 	Conduct of Business prior to Completion

	 	9.1	 	Pending the Transfer Date, ownership of the Assets shall be retained by and risk in
the Assets shall remain with the Seller.

	 
	 	9.2	 	Subject to the provisions of clause 9.3, the Seller shall continue to carry on the
Business for its own benefit and at its own risk up to the Transfer Date.

	 
	 	9.3	 	Save in circumstances where in the Seller’s reasonable opinion a failure to take or
make the relevant act or omission may prejudice the interests of any company in the
Seller’s group, the Seller undertakes to OROLIA that pending the Completion Date unless it
has obtained the prior written consent of OROLIA to the contrary (such consent not to be
unreasonably withheld or delayed):

	 	9.3.1	 	the Buyer will not enter into any commitment whatsoever or commence trading;

	 
	 	9.3.2	 	the Business will in all material respects continue to be carried on in the
same manner as it is presently carried on as regards the nature, scope and manner of
conducting it and so as to maintain it as a going concern;

	 
	 	9.3.3	 	the Seller will not enter into a long term contract (being a contract which
cannot be terminated by the Seller on less than 3 months notice) or a contract with an
aggregate contract value of more than £50,000 in relation to the Business or any
onerous or unusual agreements or obligations;

	 
	 	9.3.4	 	the Seller will not engage any person as an employee of the Business other
than the Employees;

	 
	 	9.3.5	 	the Seller will not create, issue or grant or agree to create, issue or
grant any Security Interest over any of the Assets unless, the Assets will be released
from such Security Interest on or prior to the Completion;

	 
	 	9.3.6	 	there shall be no merger or amalgamation of the Business with any other
company or business;

	 
	 	9.3.7	 	the Seller shall not (and shall procure that no member of the Seller’s
Group) directly or indirectly acquire any business which is competitive with any
business carried on by the Business;

	 
	 	9.3.8	 	no scheme of arrangement will be entered into in relation to the Seller or
the Buyer;

	 
	 	9.3.9	 	there shall be no change to the corporate and/or trading names currently
used by the Seller or the Buyer;

	 
	 	9.3.10	 	no resolution for the cessation of business or the winding-up of the Seller or the
Buyer shall be proposed, made or take place except in the event of the insolvency of
the Seller;

	 
	 	9.3.11	 	the Seller will not directly request or procure the appointment of a receiver or an
administrative receiver of the whole or any part of the Assets;

	 
	 	9.3.12	 	the Seller will not commence any legal or arbitration proceedings (other than
routine debt collection) in relation to the Business;

	 
	 	9.3.13	 	neither the Seller nor the Buyer will sell or dispose of any part of the Business
or the Assets or other assets or property of the Business to any third party other
than any such assets or goods intended to be sold in the ordinary course of business;
and

	 
	 	9.3.14	 	in relation to the Property, the Seller will not to terminate, or give notice to
terminate, a lease, Licence to Occupy or licence which would have the effect of
preventing the right granted by the Seller to the Buyer to occupy the Property under
the Licence to Occupy.

	 	9.4	 	Pending Completion or earlier termination of the Agreement pursuant to this
Agreement, OROLIA, the Buyer and the Seller will use reasonable endeavours to resolve
constructively any issues that arise in relation to the Business so as to achieve an
orderly transfer under this Agreement.

	 
	 	9.5	 	Pending Completion the Seller will, on OROLIA’s reasonable request, give to OROLIA or
its professional advisers such facilities and information and assistance (including access
to Employees and premises) regarding the Business and Assets.

 

20

 

	 	9.6	 	Pending Completion the Seller will have Jean-Yves Courtois telephone Jeremy Harrison
together with Parke Hess on a weekly basis to give him a business update in relation to
the Business.

	 
	 	9.7	 	Pending Completion the Seller will provide OROLIA with monthly management accounts
(in a form consistent with the Management Accounts) relating to the Business.

	 
	 	9.8	 	The Seller shall carry out at its own costs before Completion all necessary repairs
to the roof of the Property relating to the leak referred to in the Disclosure Letter.
The costs of such repairs shall not be comprised in the Creditor’s Sums or transferred to
the Buyer post Completion.

	 
	 	9.9	 	Pending Completion the Seller will immediately notify OROLIA and the Buyer in writing
of all adverse events or circumstances arising in connection with or relating to any
Business Contracts of which the Seller becomes aware.

	10	 	Warranties

	 	10.1	 	The Seller warrants to the Buyer in the terms set out in Schedule 2 and acknowledges
that OROLIA and the Buyer are entering into this Agreement in reliance on the Warranties.

	 
	 	10.2	 	The Warranties are given subject only to matters accurately and fairly disclosed in
the Disclosure Letter and for this purpose fairly disclosed means disclosed in a manner
and with sufficient detail to enable a reasonable buyer to make a reasonably informed
assessment of the matter concerned.

	 
	 	10.3	 	Where any Warranty is qualified by “to the best of the Seller’s knowledge and belief”
or “so far as the Seller is aware” or other similar qualification, such warranty will be
deemed to mean that it has been made after reasonable enquiry of Jeremy Harrison, Dave
Jones, Steve Foster, Alison Delaney, Mike Cook and Parke Hess of the Seller (with the
Seller having taken professional advice where appropriate) and the Seller will be deemed
to have knowledge only of that information revealed by such enquiries.

	 
	 	10.4	 	Each of the Warranties is separate and independent of other Warranties and are not
limited or restricted by any other Warranty or by other terms of this Agreement or the
Transaction Documents.

	 
	 	10.5	 	The Parties agree that any claims under the Warranties and indemnities set out in
this Agreement or the Transaction Documents will be limited in accordance with Schedule 3.

	 
	 	10.6	 	The Seller undertakes that pending Completion it will as soon as reasonably
practicable notify OROLIA in writing of any fact, matter or circumstance arising after
today’s date of which it becomes aware (such awareness being deemed to be the actual
knowledge of Jeremy Harrison, Dave Jones, Steve Foster, Alison Delaney, Mike Cook and
Parke Hess) which causes (a) any of the Warranties, whether given at today’s date and
repeated immediately before Completion and/or (b) the terms of clauses 9.3.1, 9.3.5,
9.3.6, 9.3.8 to 9.3.14, to be breached or (c) an Insolvency Event (Post Exchange Breach).

	 
	 	10.7	 	DC warrants to Orolia and the Buyer as at the date of this Agreement and at
Completion that it has the right, power and authority, and has taken all actions
necessary, to execute, deliver and exercise its rights and perform its obligations under
this Agreement and each of the Transaction Documents to which it is expressed to be a
party and this Agreement and each of the Transaction Documents creates legally binding
obligations fully enforceable against DC in accordance with their terms and do not
conflict with, violate or result in a breach of the terms, provisions or conditions of any
arrangements entered into by DC or any law, undertaking to or judgments, order, injunction
or decree of any court.

	 
	 	10.8	 	OROLIA warrants to the Seller at the date of this Agreement it is not actually aware
of any matter other than the matters disclosed in the Disclosure Letter which would enable
it or the Buyer to make a Warranty Claim and this Warranty shall be repeated on
Completion.

 

21

 

	11	 	Buyer’s remedies

	 	11.1	 	If, on or before Completion the Seller notifies OROLIA that there has been one or
more Post Exchange Breach in respect of which the aggregate quantum of damages is agreed
or determined to be more than US$150,000, OROLIA may within 10 Business Days (and in any
event before the Long Stop Date) of receipt of such notice, either:

	 	11.1.1	 	elect to proceed to Completion and make a Relevant Claim; or

	 
	 	11.1.2	 	elect to terminate this Agreement (save for clause 5.5, clause 6.2, clause 19,
clause 22 (DC Guarantee) clause 23, clause 33.3 and clause 34 which shall remain in
force) by serving written notice on the Seller and following such termination the
Agreement shall become null and void and no Party shall be entitled to make a claim
against any other party in connection with this Agreement save for any claim which
arises in respect of clause 5.5, clause 6.2, clause 19, clause 22 (DC Guarantee)
clause 23, clause 33.3 and clause 34.

	 	11.2	 	If on or before Completion the Seller notifies OROLIA of one or more Post Exchange
Breach in respect of which the aggregate quantum of damages is agreed or determined to be
not more than US$150,000 OROLIA (“Minor Breach”), OROLIA and the Buyer shall be obliged to
proceed to Completion and the Buyer shall be entitled to make a Relevant Claim. Nothing in
this clause shall
prejudice or affect adversely the rights of the Buyer and OROLIA to pursue after
Completion any remedy for and make recovery in respect of the disclosure so made
pursuant to this Clause and the Seller hereby indemnify OROLIA, the Buyer and any
member of the OROLIA’s Group in respect of a disclosure pursuant to this clause in the
event that such disclosure fails to be a “Minor Breach” within 18 months from
Completion, through no fault of the Buyer.

	 
	 	11.3	 	If there is a dispute as to whether the relevant such breach is a Minor Breach,
OROLIA and the Seller shall acting reasonably attempt to agree the level of such quantum.
The Parties hereby agree that Post Exchange Breach shall be assessed at the date of the
notice and within one year of such notice so as to take into account the nature of the
Business and the likely adverse effect on the Business of the said Post Exchange Breach.

	 
	 	11.4	 	If they have not agreed it within 5 Business Days, either of them may refer the
matter for determination by an independent chartered accountant or other suitable expert
(the “Expert”) agreed on by them (or appointed by the President for the time being of the
Institute of Chartered Accountants of England and Wales on the request of either of them).
The Expert shall act as an expert (not an arbitrator) and his determination shall (in the
absence of manifest error) be conclusive. The Expert’s fees shall be paid as he
determines equitable.

	 
	 	11.5	 	If the Expert’s determination is sought and he determines that it is a Minor Breach,
the 10 Business Day period specified in clause 11.1 shall be deemed to end 10 Business
Days after the Expert issues his determination.

	 
	 	11.6	 	If the Expert’s determination is sought and he determines that it is not a Minor
Breach then clause 11.1 applies.

	 
	 	11.7	 	If the Completion Date has already passed:

	 	11.7.1	 	before the expiration of the notice period at clause 11.1;

	 
	 	11.7.2	 	when an agreement is reached by OROLIA and the Seller; or

	 
	 	11.7.3	 	when the Expert has made his determination

	 	 	then Completion shall take place 10 Business Days after the date of each of the above.

	 
	12	 	Property

	 	12.1	 	The Seller shall grant and the Buyer shall accept the Licence to Occupy to occupy the
Property in accordance with the terms of the Licence to Occupy from the Transfer Date.

	 
	 	12.2	 	For the avoidance of doubt, neither OROLIA nor the Buyer are under any obligation to
enter into any direct covenant with any of the relevant landlords or superior landlords
relating to the repair, condition, decoration of the Property other than in respect of the
period of occupation stated in the Licence to Occupy. 

 

22

 

	13	 	Employees

	 	13.1	 	The parties acknowledge and agree that irrespective of any determination by a court
of competent jurisdiction to the contrary that the sale and purchase pursuant to this
Agreement will constitute a relevant transfer for the purposes of TUPE and accordingly
that it will not operate so as to terminate any of the contracts of employment of the
Employees and such contracts will be transferred to the Buyer pursuant to TUPE with effect
from the Transfer Date which will be the time of transfer under TUPE.

	 
	 	13.2	 	The Seller undertakes to the Buyer and OROLIA to indemnify the Buyer from:-

	 	13.2.1	 	any claim or other legal recourse by all or any of the Employees or any person who
is not an Employee but deemed to be an employee of the
Business at the Transfer Date (the “Other Employees”)in respect of any fact or
matter concerning or arising from employment with the Seller prior to the
Transfer Date including those claims or legal recourses or threat of claims or
legal recourses set out in the Disclosure Letter and in particular in
connection with David Richold, Ron Peckham, Sasha Smart (including any
eventual costs of reinstatement), Paul Slee and Dave Jones;

	 
	 	13.2.2	 	any claim or other legal recourse by any trade union or staff association or
employee representatives in respect of all or any of the Employees or any of the
Other Employees arising from or connected with the failure by the Seller to comply
with its legal obligations to such trade union or staff association or employee
representatives; and

	 
	 	13.2.3	 	any act or omission done or omitted to be done by the Seller in relation to the
Employees or any other employee of the Seller which by virtue of TUPE is deemed to
be an act or omission of the Buyer; and

	 
	 	13.2.4	 	any failure by the Seller to comply with its obligations under this clause 13.

	 	13.3	 	If any contract of employment or collective agreement not disclosed to the Buyer and
OROLIA will have effect as if originally made between the Buyer and any of the Employees
or any of the Other Employees or a trade union as a result of the provisions of TUPE:

	 	13.3.1	 	the Buyer may, within 28 days of the Transfer Date, terminate such contract or
agreement provided that the Buyer gives the Seller prior written notification of its
intention to do so; and

	 
	 	13.3.2	 	the Seller undertakes to indemnify the Buyer and OROLIA from such termination or
arising from such contracts of employment or collective agreement before and after
the Transfer Date provided that the Buyer acts reasonably when terminating such
contracts or agreements and in accordance with the terms of the relevant contract or
agreement and in accordance with the law.

	 	13.4	 	Without prejudice to the other provisions of this clause, the Seller will, at its own
expense, give the Buyer such assistance as the Buyer or OROLIA may reasonably require to
contest any claim by any person employed in the Business at or prior to Completion
resulting from or in connection with this Agreement.

	 
	 	13.5	 	The Buyer will perform and observe all the employer’s obligations, whether under the
contract of employment or otherwise, arising out of or in connection with any employee’s
employment including, without limitation, payment for wages or salaries, accrued holiday
pay, sick pay, maternity pay, liability to Tax, accrued bonuses or commissions and other
periodic payment for any period after the Transfer Date and indemnify the Seller against
any breach of this clause.

	 
	 	13.6	 	The Buyer confirms and acknowledges that it has supplied the Seller in writing with
all relevant information for the purposes of Regulation 13 of TUPE on a timely basis in
connection with the sale and purchase of the Business.

 

23

 

	 	13.7	 	The Seller undertakes to the Buyer and OROLIA unless otherwise agreed by the OROLIA:-

	 	13.7.1	 	that it has complied with, and shall up to and including the Transfer Date, comply
with all of its obligations and those of any of its predecessors (whether or not
legally binding or in respect of which it would be expected to comply by any
regulatory or other body to which it is subject) due to or in connection with the
Employees, the Other Employees and former employees or any body representing them
(or any of the said obligations the Seller would have had under or in connection
with such contracts of employment but for TUPE);

	 
	 	13.7.2	 	that it has paid and shall pay all sums due to or in relation to the Employees,
the Other Employees and former employees up to and including the Transfer Date
(whether arising under common law, statute, equity or otherwise) including all
salaries, wages, holiday pay, sick pay, bonus or commission, expenses, National
Insurance and pension contributions, liability to Taxation and other sums payable in
respect of any period up to the Transfer Date;

	 
	 	13.7.3	 	that it shall be solely responsible for and will promptly discharge all its
obligations to make redundancy payments (whether statutory or contractual) and all
other payments howsoever arising in relation to any employee of the Seller
(including the Other Employees) who leave his or her employment or receive notice of
termination of his or her employment before the Transfer Date for whatever reason;

	 
	 	13.7.4	 	that there are no sums owing to or from any Employee, Other Employee or former
employee other than reimbursement of expenses for the current month, wages for the
current salary period and holiday pay for the current holiday year; and

	 
	 	13.7.5	 	that it has complied and shall comply in all respects with its obligations under
regulations 11 and 13 of TUPE and Part IV of TULRCA, and that, in connection with
regulation 13 of TUPE the Seller has provided and shall provide to the Buyer such
information as the Buyer may request in writing in order to verify such compliance.

	 	13.8	 	The Buyer undertakes to the Seller to indemnify the Seller from:

	 	13.8.1	 	any act or omission of the Buyer in relation to an Employee occurring after the
Transfer Date;

	 
	 	13.8.2	 	any claim or allegation by an Employee that as a direct result of the sale of the
Business to the Buyer where there has been or will be a detrimental change in that
Employee’s working conditions;

	 
	 	13.8.3	 	any claim or action by an Employee or by any representative (as defined by TUPE)
by virtue of Regulation 13 of TUPE to the extent that it arises solely out of the
failure of the Buyer to comply with its obligations under Regulation 13 of TUPE; or

	 
	 	13.8.4	 	any act or omission of OROLIA or its officers or employees in respect of the
Employees which directly results in an Employee not transferring by virtue of this
Agreement.

	 	13.9	 	If the Seller employs any person in connection with the Business between today’s date
and Completion then, if the OROLIA’s written consent to this employment has been obtained
(but not otherwise) that person is deemed to be an Employee. This shall be without
prejudice to the indemnity given by the Seller to the Buyer provided pursuant to this
clause 13.

	 
	 	13.10	 	If any person employed in connection with the Business is dismissed or his
employment otherwise terminates for any reason between today’s date and Completion then
that person is deemed not to be an Employee but this shall be without prejudice to the
indemnity given by the Seller to the Buyer provided pursuant to this clause 13.

	 
	 	13.11	 	All wages and salaries and other emoluments including overtime pay, holiday pay,
sick pay, maternity pay and commission payments or bonuses, pension contributions and sums
relating to other benefits enjoyed by the Employees (or Other Employees if applicable),
liability to Tax and other period payments that have become due and payable at or refer to
the period up to and including the Transfer Date relating to Employees and the Other
Employees, shall be borne by the Seller up to and including the Transfer Date and all
necessary apportionments shall be made accordingly.

 

24

 

	 	13.12	 	The Seller will indemnify Buyer against all claims in connection with the Seller’s
failure to pay wages or salaries, accrued holiday pay, sick pay, maternity pay, liability
to Tax, accrued bonuses or commissions and other periodic payments in connection with any
of the Employees and any of the Other Employees or former employees in respect of the
period up to and including the Transfer Date.

	14	 	Business Contracts

	 	14.1	 	With effect from the Transfer Date the Buyer will:

	 	14.1.1	 	become entitled to the benefit of the Seller under the Business Contracts; and

	 
	 	14.1.2	 	carry out and perform and complete all the obligations and liabilities created by
or arising under the Business Contracts (except to the extent that any obligations
or liabilities which are attributable to a breach on the part of the Seller or its
employees, agents or sub-contractors prior to the Transfer Date).

	 	14.2	 	With effect from the Transfer Date the Seller hereby assigns to the Buyer all the
Business Contracts which are capable of assignment without the consent of other parties.

	 
	 	14.3	 	If any of the Business Contracts cannot be assigned to the Buyer without the
agreement of or novation by or consent to the assignment from another party this Agreement
will not constitute an assignment or attempted assignment if the same would constitute a
breach of such Business Contracts. In the event that consent or novation is required to
such assignment:

	 	14.3.1	 	at the Buyer’s request the Seller will use all reasonable endeavours with the
co-operation of the Buyer to procure such novation or assignment on terms reasonably
satisfactory to the Buyer; and

	 
	 	14.3.2	 	unless and until any such Business Contract will be novated or assigned the Seller
will continue its corporate existence and will hold such Business Contract on trust
for the Buyer and its successors in title absolutely and the Buyer will perform all
the obligations of the Seller under such Business Contract as the Seller’s
sub-contractor (if such sub-contracting is permissible and lawful under the Business
Contract in question) or as the Seller’s distributor (if such distributorship is
permissible and lawful under the Business Contract in question).

	 	14.4	 	If the Seller receives any payment in respect of the Business Contracts on or after
the Transfer Date the Seller will hold the same as trustee, record such payment separately
in its books and will account to the Buyer for the same within 5 Business Days of receipt.

	 
	 	14.5	 	The Buyer will indemnify the Seller in respect of the non-performance or defective or
negligent performance by the Buyer of the Business Contracts after the Transfer Date.

	 
	 	14.6	 	Save as otherwise herein expressly provided, the Seller will indemnify the Buyer in
respect of the non-performance or defective or negligent performance by the Seller of the
Business Contracts or in connection with customer complaints disclosed in the Disclosure
Letter or products manufactured or sold by the Seller prior to the Transfer Date or
products manufactured by the Seller before the Transfer Date and sold by the Buyer after
the Transfer Date including in relation to those Business Contracts or products referred
to in the Disclosure Letter and any third party claims relating thereto.

	 
	 	14.7	 	The trade agreement with Dive Containers New Zealand Limited in relation to dive
canisters (document D21.008 of the Disclosure Bundle) shall not be a Business Contract for
the purposes of this Agreement and all and any liability (including any liability to any
third party claims) in relation to it or the products sold by the Seller to third parties
will remain with the Seller. The Seller confirms
that any claims arising from the Dive Canister 50 (Part No. 91-061A, part of the
FastFind 200 Series) that could not be shipped back as described in document D21.006 of
the Disclosure Bundle are the sole liability of the Seller and the Seller shall
indemnify the Buyer from any liabilities under the relevant customer contracts.

 

25

 

	 	14.8	 	The supply contract with Kelvin Hughes in relation to S-VDR Capsule recorders
(document D21.004 and documents D21.004.1 to D21.004.7 of the Disclosure Bundle) shall not
be a Business Contract for the purposes of this Agreement and the liability in relation to
it will remain with the Seller. The Seller confirms that any claims arising in relation to
the S-VDR Capsule products are the sole liability of the Seller and the Seller shall
indemnify the Buyer from any liabilities under the relevant contracts.

	 
	 	14.9	 	The Seller shall indemnify the Buyer from any liabilities that the Buyer may suffer:

	 	14.9.1	 	as a result of the Seller not owning the intellectual property rights in the
beacon circuit board and the antenna receiver for the SEPIRB provided that the
Buyer shall be under a duty to mitigate its loss in relation to any such claims; or

	 
	 	14.9.2	 	relating to any infringement or alleged infringement of intellectual property
rights of Spot LLC connected with the disclosure no. 10.6.1 of the Disclosure
Letter.

	15	 	Mutual covenants and apportionments

	 	15.1	 	Save as otherwise herein expressly provided the Seller covenants with OROLIA that the
Seller will pay, satisfy, discharge and fulfil all costs, claims, expenses, liabilities,
obligations and undertakings whatsoever relating to the Business arising in respect of or
by reference to any period up to and including the Transfer Date and will indemnify the
Buyer in respect of the same.

	 
	 	15.2	 	Save as otherwise herein expressly provided the Buyer covenants with the Seller that
it will pay, satisfy, discharge and fulfil all costs, claims and expenses, liabilities,
obligations and undertakings whatsoever relating to the Business in respect of any period
commencing immediately after the Transfer Date and will indemnify the Seller in respect of
the same.

	 
	 	15.3	 	Subject to the remainder of this clause 15, all costs, claims, expenses, liabilities,
obligations and undertakings whatsoever (“Remedial Costs”) resulting from any defects in,
or alleged defects in, goods or parts of goods sold or supplied or services provided in
the course of the Business prior to the Transfer Date shall be the responsibility of the
Seller and not the Buyer.

	 
	 	15.4	 	Notwithstanding the foregoing, the Parties agree that to protect the Goodwill,
certain services will be performed by the Seller and the Buyer under the Transitional
Services Agreement.

	 
	 	15.5	 	If the Buyer receives notice from a customer (past or present) of the Business of any
defect or alleged defect of the type referred to in clause 15.3, the Buyer shall be
entitled to or at the request of the Seller be obliged to carry out repair or replacement
work on behalf of the Seller in relation to such defect or alleged defect provided always
that the cost of such repair or replacement does not exceed £250 (excluding VAT). In
calculating the cost of such work parts and stock will be charged at cost price and labour
shall be charged at the rates the Buyer is entitled to charge under the Transitional
Services Agreement for the relevant work. For the avoidance of doubt the Buyer requires
the consent of the Seller before it initiates a product recall.

	 
	 	15.6	 	If following Completion the Buyer receives notice of claims relating to defects or
alleged defects of the kind referred to in clause 15.3, it shall promptly give notice of
such claims to the Seller. Save where the relevant costs fall within clause
15.5, the Buyer shall not take any preventative action in order to avoid claims
relating to defects or alleged defects of the kind referred to in clause 15.3 or carry
out any maintenance and/or repair work and/or replace any items in connection with such
claims without the prior written approval of the Seller (such approval not to be
unreasonably withheld or delayed). The Buyer shall be under no obligation to carry out
repair or replacement of obsolete or quarantine stocks.

 

26

 

	 	15.7	 	To the extent the Buyer carries out work in accordance with clause 15.5 and clause
15.6 and the Transitional Services Agreement, it shall be entitled to recover the costs
from the Seller by submitting a monthly invoice at the end of each month together with
papers reasonably supporting such invoice and a statement of work carried out in the
period to which the invoice relates. The Seller shall pay such invoice within 30 days of
receipt.

	 
	 	15.8	 	The Buyer shall indemnify the Seller against any increase in its liability arising
under claims relating to defects or alleged defects of the kind referred to in clause 15.3
where such increased liability arises as a result of work carried out by the Buyer
pursuant to this clause 15.

	 
	 	15.9	 	All rates, gas, water, electricity and telephone charges and other outgoings relating
to or payable in respect of the Business in its ordinary and normal course up to and
including the Transfer Date and all wages, salaries, other emoluments including overtime
pay, holiday pay, sick pay and maternity pay, commission payments or bonuses, pension
contributions and sums relating to other benefits enjoyed by the Employees (or Other
Employees if applicable), liability to Tax and other period payments and outgoings related
to the Employees or any Other Employees (as defined in clause 13.2.1) up to and including
the Transfer Date shall be borne by the Seller and as from the Transfer Date shall be
borne by the Buyer and all insurance premiums, royalties and other periodical payments
receivable in respect of the Business up to and including the Transfer Date shall belong
to and be payable to the Seller and as from the Transfer Date shall belong to and be
payable to the Buyer. Such outgoings and payments receivable shall if necessary be
apportioned accordingly.

	 
	 	15.10	 	Purchase orders and Business Contracts shall be executed according to the
contractual delivery dates as requested by the customers. All amounts payable for
deliveries made by the Seller before the contractual delivery dates and before the
Transfer Date shall be payable by the Seller to the Buyer if such deliveries to a customer
exceed £25,000.

	 
	 	15.11	 	Prepayments and payments in advance made to the Seller on or before the Transfer
Date in respect of goods or services to be supplied by the Buyer after Completion shall be
payable by the Seller to the Buyer and prepayments and payments in advance made by the
Seller in respect of goods ordered but not delivered and services contracted for but not
rendered to the Seller in connection with the Business prior to Completion shall be
refundable by the Buyer to the Seller. All necessary apportionments shall be made by the
Seller and the Buyer.

	 
	 	15.12	 	Immediately after Completion the Seller shall prepare the Schedule of Apportionments
in accordance with clauses 15.13 to 15.15.

	 
	 	15.13	 	The Schedule of Apportionments will be delivered to the Buyer and OROLIA by the
Seller as soon as practicable after Completion and, in any event, not later than 30
Business Days after Completion. Before delivery, the Seller and the Buyer will so far as
practicable consult with each other with a view to reducing the potential areas of future
disagreement.

	 
	 	15.14	 	If the Buyer or OROLIA does not within 30 Business Days of receiving the Schedule of
Apportionments give written notice to the Buyer that it disagrees with the Schedule of
Apportionments or any item in them, this notice stating the reasons for the disagreement
in reasonable detail, (Apportionments Objection Notice), the Schedule of Apportionments
will be final and binding on the Parties. If OROLIA or the Buyer gives an Apportionments
Objection Notice within the 30 Business Day period, OROLIA, the Buyer and the Seller will
attempt in good faith
to reach agreement in respect of it and, if they are unable to do so within 30 Business
Days of the notification, either such Party may refer the matter to an independent
accountant to be agreed by such Parties or, failing agreement within 5 Business Days,
to be appointed by the President of the Institute of Chartered Accountants in England
and Wales (Independent Accountants) at the instance of whichever such Party first
applies to it.

	 
	 	15.15	 	The balancing payment so agreed or determined shall be paid by OROLIA (or on behalf
of OROLIA) to the Seller or vice versa (as appropriate) within 10 Business Days of
agreement or determination of the Schedule of Apportionments.

 

27

 

	 	15.16	 	The Seller and the Buyer agree that the “US Battery for life” promotion agreement
with Revere dated 26 November 2007 (document D23.009 of the Disclosure Bundle) shall not
pass on to the Buyer, and that the Buyer is entitled to charge under the Transitional
Services Agreement for the relevant work that will be required to assume the liabilities
under this promotion agreement.

	 
	 	15.17	 	The Seller and the Buyer agree that the sales rebate scheme dated 3 February 2009
granted to Revere (document D23.005 of the Disclosure Bundle) shall fully pass on to the
Buyer, which shall issue a credit note for the full rebate amount that may be due to
Revere per that rebate.

	16	 	Book Debts and Creditors

	 	16.1	 	The Seller is entitled, for its own account, to collect the Book Debts. The Buyer is
under no obligation to collect the Book Debts.

	 
	 	16.2	 	The Buyer will hold on trust for the Seller any payment which it may receive after
the Transfer Date in respect of the Book Debts and will account to the Seller for the same
at the end of the week following Completion and thereafter at weekly intervals.

	 
	 	16.3	 	Any sum received by the Buyer in respect of the Business which is not specifically
appropriated by the debtor to a particular transaction will be appropriated first to the
oldest debt outstanding (whether due to the Buyer or a Book Debt).

	 
	 	16.4	 	The Seller will collect the Book Debts in an orderly manner and in a manner which is
consistent with the way in which the Seller has collected trade and other debts in the
course of carrying on the Business prior to the Transfer Date.

	 
	 	16.5	 	The Seller shall procure that an amount equal to the aggregate of the invoices of the
Due Creditors is paid into the Seller’s Solicitors Account and shall be exclusively used
as soon as reasonably practicable (and in any event within 2 Business Days from the
receipt of the Initial Consideration) to pay and discharge the Due Creditors provided
always such Due Creditors shall be paid in accordance with their payment terms and
indemnify the Buyer against any failure to do so. For the avoidance of doubt, the General
Retention shall not be released at the Anniversary Date if there remains unpaid Due
Creditors by the Seller.

	 
	 	16.6	 	The Seller shall notify in writing immediately OROLIA and the Buyer of the existence
of a genuine dispute in respect of any Creditor’s invoices setting out precisely
particulars of the nature of the dispute and amount claimed and proposals to resolve it.

	 
	 	16.7	 	Following Completion the Buyer shall pay and discharge the certain Creditors (other
than the Due Creditors) to whom the Creditors’ Sums relates in accordance with their
contractual payment terms and indemnify the Seller against any failure to do so save that
the Buyer shall not be obliged to pay a Creditors’ Sum in the event of the existence of a
genuine dispute in respect of that Creditor’s invoices in which case, the Buyer shall
notify in writing immediately the Seller of the existence of such dispute setting out
precisely particulars of the nature of the dispute and amount claimed and proposals to
resolve it. For the avoidance of doubt, the Buyer shall not pay any Creditors
which are not described as being within the definition of Creditors’ Sums in the Aged
List of Creditors and the Seller shall indemnify the Buyer accordingly.

	17	 	Obligations of the Seller and Buyer after Completion

	 	17.1	 	For the 12 months following Completion, the Seller:

	 	17.1.1	 	will promptly refer to the Buyer all enquiries (including any payment, notice,
correspondence and information) relating to the Business and assign to the Buyer all
orders relating to the Business, including enquiries relating to orders for any
stocks, spares, parts, accessories and other equipment manufactured or sold, or any
services provided in connection with the Business, which the Seller may receive
after Completion;

 

28

 

	 	17.1.2	 	will retain for the period required by law, the books, accounts, records
(including VAT records), returns of the Seller relating exclusively to or
exclusively in connection with the Business and the type approvals, licences and
national authorisations in respect of the Products (“Product Consents”) held by the
Seller and will give to the Buyer reasonable access to such books, accounts,
records, returns, and Product Consents as the Buyer may reasonably require
(including the right to take copies and extracts on reasonable advance notice at the
Buyer’s expense, subject to prior written notice and during normal business hours)
and will keep them in good order to the extent required by the Buyer for the
continuation of the Business.

	 
	 	17.1.3	 	without prejudice to clause 5, co-operate with the Buyer at the reasonable costs
of the Seller for a period of one year following the Transfer Date in applying to
arrange for the issue to the Buyer of all relevant consents required by it to carry
on the Business after the Transfer Date and all or any other consents,
authorisations, permits and licences required to transfer the Business in compliance
with any and all laws, regulations and other legal obligations; and

	 
	 	17.1.4	 	procure the transfer (free of charge) of the Domain Names to the Buyer.

	 	17.2	 	The Buyer:

	 	17.2.1	 	will promptly refer to the Seller all enquiries relating to the Retained Business
and assign to the Seller all orders relating to the Retained Business, including
enquiries relating to orders for any stocks, spares, parts, accessories and other
equipment manufactured or sold, or any services provided in connection with the
Retained Business, which the Buyer may receive after Completion;

	 
	 	17.2.2	 	will retain, for the period required by law, the books, accounts, records and
returns of the Buyer relating exclusively to or exclusively in connection with the
Business (in so far as they related to the pre-transfer Business) and will give to
the Seller reasonable access to such books, accounts, records and returns (insofar
as they relate to the pre-transfer Business) as the Seller may reasonably require
(including the right to take copies and extracts on reasonable advance notice at the
Seller’s expenses during normal business hours) and will keep them in good order.

	 	17.3	 	The Buyer will allow the Seller to use the name and trade mark “McMurdo” alone or in
combination with other words and marks solely for the purposes of:

	 	17.3.1	 	selling or otherwise supplying any products carrying the McMurdo mark according to
the Transitional Services Agreement but the Seller shall not enter into any new
arrangements with third parties in relation to its supply of the products;

	 
	 	17.3.2	 	collecting any Book Debts or paying any Creditor relating to the Business.

	18	 	Restrictive Covenants

	 	18.1	 	Subject always to clause 18.2, the Seller covenants with the Buyer that it will not
and will procure that any other member of the Seller’s Group will not either on its or
their own account or through or in conjunction, association or by arrangement with or on
behalf of any person or persons whether for its own benefit or that of others and whether
directly or indirectly for the period of five years from Completion:

	 	18.1.1	 	in competition with the Business as carried on at Completion supply products or
provide services to any person, firm or company who or which was either at
Completion or during the period of 24 months prior to Completion a client or
customer of the Business where such goods or services are the same as or similar to
or compete with products sold or services provided by the Business to that person,
firm or company at or during the period of 24 months prior to Completion (for the
avoidance of doubt these goods include any Man-Over-Board (MOB) product such as the
ones currently supplied by the Seller under the RNLI Contract or similar products
thereof);

 

29

 

	 	18.1.2	 	in competition with the Business as carried on at Completion solicit or endeavour
to solicit the custom of or canvas or approach any person, firm or company who or
which was either at Completion or during the period of 24 months prior to Completion
had been a client or customer of the Business, for the supply of products or the
provision of services which are the same as or similar to or compete with those
products sold or services provided by the Business to that person, firm or company
at or during the period of 24 months prior to Completion (for the avoidance of doubt
these goods include any Man-Over-Board (MOB) product such as the ones currently
supplied by the Seller under the RNLI Contract or similar products thereof);

	 
	 	18.1.3	 	other than by way of general advertisement solicit or entice away or endeavour to
solicit or entice away from the Buyer any officer, manager, or other senior employee
who was either at Completion or during the period of 12 months prior to Completion
engaged in the Business whether or not such person would commit a breach of his
contract of employment by reason of leaving service;

	 
	 	18.1.4	 	carry on or be engaged, concerned or interested in any business which competes
with the Business as the same was carried on at Completion (other than as a holder
of securities listed on a recognised investment exchange or provided that such
holding will not exceed five per cent of the class of securities of which the said
holding forms part); or

	 
	 	18.1.5	 	employ or conclude any contract for services with any director, senior manager, or
senior employee (being an employee with an annual salary of more than £50,000) who
worked in the Business at Completion.

	 	18.2	 	Each restriction in clause 18.1 constitutes an entirely independent restriction on
the Seller.

	 
	 	18.3	 	If any restriction in clause 18.1 is determined to be unenforceable in whole or in
part, its unenforceability will not affect the enforceability of the remaining
restrictions or (in the case of restrictions enforceable in part) the remainder of that
restriction.

	 
	 	18.4	 	Nothing in this clause 18 prevents the Seller from carrying on the Retained
Businesses, dealing with any retained liabilities in accordance with this Agreement,
Excluded Assets or complying with the provisions of the Transitional Services Agreement
but this clause 18.4 shall be without prejudice to the
restrictions set out in this clause 18 in so far as they relate to any Man-Over-Board
(MOB) product such as the ones currently supplied by the Seller under the RNLI Contract
or any other similar or competing products.

	19	 	Confidentiality

	 	19.1	 	Subject to clause 23 (Announcements and Publicity), the Seller undertakes and will
procure that all member of the Seller’s Group will undertake to keep confidential and not
at any time to disclose or make known to anyone whatsoever or use for their own or any
other person’s benefit all Business Information or any information regarding OROLIA and
OROLIA’s Group (OROLIA’s Confidential Information) and the Buyer and OROLIA undertakes and
will procure that any member of the OROLIA’s Group will undertake to keep confidential and
not at any time to disclose or make known to anyone whatsoever or use for their own or any
other person’s benefit all any information (excluding the Business Information) regarding
the Seller’s Group (Seller’s Confidential Information).

	 
	 	19.2	 	The Seller and DC shall not, except with the prior written consent of the Buyer and
OROLIA, publish or otherwise disclose to any person any OROLIA Confidential Information
and the Buyer and OROLIA shall not except with the prior written consent of the Seller and
DC to publish or otherwise disclose to any person any Seller’s Confidential Information,
except to the extent required by order of a court or regulatory body or in law (and only
to that extent).

 

30

 

	 	19.3	 	The obligations imposed by the provisions of clauses 19.1 and 19.2 will not apply to
the extent that the Business Information in question:

	 	19.3.1	 	is or comes into the public domain without fault on the part of the party to whom
the same was disclosed, or to whose attention the same has come;

	 
	 	19.3.2	 	has been lawfully disclosed to the relevant party by a third party;

	 
	 	19.3.3	 	is required to be disclosed by law provided that any such disclosure shall not be
made without the prior consultation of the relevant Parties; or

	 
	 	19.3.4	 	is required to be disclosed by a contractual obligation existing at the date of
this Agreement provided that any such disclosure shall not be made without prior
notice and consultation with the relevant Parties.

	20	 	Value Added Tax

	 	20.1	 	All amounts expressed in this Agreement as being payable by the Buyer are expressed
exclusive of any VAT which may be chargeable and the Buyer will pay to the Seller in
addition to such amounts an amount equal to any VAT (to include any interest and
penalties) for which the Seller is liable to account to HM Revenue and Customs in respect
of any supply made by it to the Buyer under or in connection with this Agreement.

	 
	 	20.2	 	The parties intend that section 49 VATA and paragraph 5 of the Special Provisions
Order will apply to the transfer of the Business and the Seller and the Buyer will each
use its reasonable endeavours to secure that pursuant to the provisions referred to above
the sale of the Business is treated as neither a supply of goods nor a supply of services
for the purposes of VAT but as the transfer of a business as a going concern.

	 
	 	20.3	 	If HM Revenue and Customs do not agree that the sale of the Business pursuant to this
Agreement falls within section 49 VATA and paragraph 5 of the Special Provisions Order the
Seller will issue to the Buyer a valid VAT invoice in respect of the sale of the Business.
The Buyer will forthwith on receipt of such invoice pay to the Seller the VAT (to include
any interest and penalties) charged on the sale of the Business in addition to the
Consideration.

	 
	 	20.4	 	The Seller warrants that McMurdo Limited is registered for VAT purposes in the United
Kingdom or that McMurdo Limited will be registered conditional on Completion taking place
pursuant to a proper submission for VAT registration to the relevant authorities.

	 
	 	20.5	 	OROLIA warrants that McMurdo Limited will use the Assets to be transferred under this
Agreement with the intention of continuing the Business without a break in trade
immediately after Completion.

	 
	 	20.6	 	The Seller warrants that it is duly registered for VAT purposes in the United
Kingdom.

	 
	 	20.7	 	The Seller will retain and preserve all records relating to the Business which are
required to be preserved by paragraph 6(1) of Schedule 11 VATA and any regulations made
under that section.

	21	 	OROLIA Guarantee

	 	21.1	 	Subject to and in consideration of OROLIA entering into the McMurdo Limited Share
Purchase Agreement and acquiring the entire issued share capital in McMurdo Limited and
from the date of such acquisition (but subject to the Seller exercising its right pursuant
to clause 4.6 of McMurdo Limited Share Purchase Agreement in which case this Guarantee
shall be limited to the obligation of the Buyer to sell back the entire issued share
capital of McMurdo Limited in accordance with the terms of the McMurdo Limited Share
Purchase Agreement and no party shall be entitled to make any claim whatsoever under it
for anything else), OROLIA unconditionally and irrevocably guarantees to the Seller and
its successors, transferees and assigns:

	 	21.1.1	 	the due and punctual performance and observance by the Buyer of all the Buyer’s
obligations; and

 

31

 

	 	21.1.2	 	the punctual discharge by the Buyer of all the Buyer’s liabilities to the Seller;

	 	 	 	contained in or arising under this Agreement, McMurdo Limited Share Purchase Agreement,
the Escrow Agreement, the Transitional Services Agreement, the Licence to Occupy, the
Trade Mark Assignment and the Patent Assignment arising on or after Completion of this
Agreement (the Guaranteed Agreements).

	 	21.2	 	If the Buyer defaults in the payment when due of any amount payable to the Seller
under the Guaranteed Agreements OROLIA will immediately on demand by the Seller pay to the
Seller the amount payable by the Buyer and perform and discharge all obligations of the
Buyer in the manner prescribed in the relevant Guaranteed Agreement and as if OROLIA were
the principal obligor in respect of that amount.

	 
	 	21.3	 	As an independent and primary obligation and without prejudice to clauses 21.1 and
21.2 OROLIA will unconditionally and irrevocably indemnify the Seller against any failure
of the Buyer to comply with any of its obligations or discharge any of its obligations
under the Guaranteed Agreements.

	 
	 	21.4	 	The guarantee and indemnity contained in this clause 21 (OROLIA Guarantee
Obligations):

	 	21.4.1	 	is a continuing guarantee and indemnity and will continue in full force and effect
until all liabilities or purported liabilities of the Buyer arising under, and all
monies owing or payable or purported to be owing or payable by the Buyer under the
Guaranteed Agreements have been paid, discharged or satisfied in full and
notwithstanding any insolvency of the Buyer or any change in name or status of the
Buyer; and

	 
	 	21.4.2	 	is in addition to and is not in any way prejudiced by any other security now or
subsequently held by the Seller.

	 	21.5	 	The OROLIA Guarantee Obligations occurring after Completion (subject always to clause
21.1) will not be discharged, diminished or in any way adversely affected as a result of
any of the following:

	 	21.5.1	 	any time, consent or waiver given to, or composition made with, the Buyer or any
other person;

	 
	 	21.5.2	 	any amendment to, or replacement of, any Guaranteed Agreement (however
fundamental) or any other agreement or security entered into by the Buyer;

	 
	 	21.5.3	 	the taking, variation, compromise, exchange, renewal, release or refusal or
neglect to take, perfect or enforce any rights or remedies against or security over
the assets of the Buyer or any other person or any non-observance of any formality
or other requirement under any Guaranteed Agreement or any failure to realise the
full value of any security;

	 
	 	21.5.4	 	the release of the Buyer, any other guarantor or other person under the terms of
any composition or arrangement, including any corporate or individual voluntary
arrangement;

	 
	 	21.5.5	 	any incapacity, lack of power, authority or legal personality of or dissolution or
change in the members or status of the Buyer or any other person;

	 
	 	21.5.6	 	any unenforceability, illegality or invalidity of any obligation of any person
under any Guaranteed Agreement or any other document or security;

	 
	 	21.5.7	 	any insolvency or similar proceedings; and

	 
	 	21.5.8	 	any other act, omission, circumstance, matter or thing which, but for this
clause 21.5, might operate to release, reduce or otherwise exonerate OROLIA but
which would not have discharged a person primarily liable in respect thereof.

	 	21.6	 	OROLIA may not determine its liabilities under the guarantees and indemnities given
in this clause 21.

 

32

 

	 	21.7	 	The Seller will not be obliged to enforce any other rights, security or claims it may
have against the Buyer or any other person before claiming under the guarantees and
indemnities given by this clause 21.

	 
	 	21.8	 	Until all amounts which may be or become payable by the Buyer under or in connection
with the Guaranteed Agreements have been irrevocably paid in full OROLIA agrees that it
will not exercise any rights which it may have:

	 	21.8.1	 	to be subrogated to or otherwise to share in any security or monies held, received
or receivable by the Seller or, to claim any right of contribution in relation to
any payment made by OROLIA under this Agreement;

	 
	 	21.8.2	 	to enforce any of its right of subrogation, indemnity, or to make any application
for quia timet relief against or in respect of the Buyer or OROLIA;

	 
	 	21.8.3	 	following a claim made on OROLIA under the OROLIA Guarantee Obligations, to demand
or accept repayment of any monies due from the Buyer or to claim any set off or
counter claim against the Buyer; or

	 
	 	21.8.4	 	to claim or prove in any liquidation or other insolvency proceeding of or
affecting the Buyer or any co-surety in competition with the Seller.

	 	21.9	 	Following the making of a demand on OROLIA under the OROLIA Guarantee Obligations,
OROLIA will (at its own cost) promptly take such steps or action as are referred to in
clauses 21.1 and 21.8 above as the Seller may from time to time stipulate.

	 
	 	21.10	 	For the avoidance of doubt, in no event shall OROLIA Guarantee Obligations impose
any greater obligation or liability on OROLIA than if OROLIA were jointly and severally
liable with the Buyer of Guaranteed Agreements.

	 
	 	21.11	 	All amounts payable in respect of the OROLIA Guarantee Obligations will be paid by
OROLIA without set off, deduction or counterclaim of any kind being made.

	 
	 	21.12	 	OROLIA warrants to the Seller as follows:

	 	21.12.1	 	OROLIA is duly incorporated under the laws of France and has full power and
authority and has taken all necessary corporate action to enable it to enter into,
complete and perform this Agreement and all agreements to which it is a party and
entered into pursuant to this Agreement.

	 
	 	21.12.2	 	OROLIA does not require the consent, approval or authority of any other person to
enter into or perform its obligations under this Agreement and all agreements to
which it is a party and entered into pursuant to this Agreement.

	 
	 	21.12.3	 	is not engaged in any litigation or arbitration proceedings which might have an
effect upon its capacity or ability to perform its obligations under this Agreement
and all agreements to which it is a party and entered into pursuant to this
Agreement.

	 
	 	21.12.4	 	OROLIA’s entry into and performance of this Agreement and all agreements to which
it is a party and entered into pursuant to this Agreement will not constitute any
breach of or default under any contractual, governmental or public obligation
binding upon it.

	 
	 	21.12.5	 	OROLIA is solvent and able to pay its debts as they fall due.

	 
	 	21.12.6	 	OROLIA’s obligations under this Agreement, the Guaranteed Agreements and all
ancillary documents to be entered into pursuant to this Agreement are and will be
valid, binding and enforceable.

	22	 	DC Guarantee

	 	22.1	 	In consideration of OROLIA and the Buyer entering into this Agreement DC
unconditionally and irrevocably guarantees to the Buyer and OROLIA and their respective
successors, transferees and assigns:

	 	22.1.1	 	the due and punctual performance and observance by the Seller of all the Seller’s
obligations; and

 

33

 

	 	22.1.2	 	the punctual discharge by the Seller of all the Seller’s liabilities to the Buyer
and/or OROLIA;

	 	 	 	contained in or arising under the Guaranteed Agreements.

	 
	 	22.2	 	If the Seller defaults in the payment when due of any amount payable to the Buyer
and/or OROLIA under the Guaranteed Agreements DC will immediately on demand by the Buyer
or OROLIA pay to the Buyer or OROLIA (as OROLIA may direct from time to time) the amount
payable by the Seller and perform and discharge all obligations of the Seller in the
manner prescribed in the relevant Guaranteed Agreement and as if DC were the principal
obligor in respect of that amount.

	 
	 	22.3	 	As an independent and primary obligation and without prejudice to clauses 22.1 and
22.2, DC will unconditionally and irrevocably indemnify the Buyer and OROLIA against any
failure of the Seller to comply with any of its obligations or discharge any of its
obligations under the Guaranteed Agreements.

	 
	 	22.4	 	The guarantee and indemnity contained in this clause 22 (DC Guarantee Obligations):

	 	22.4.1	 	is a continuing guarantee and indemnity and will continue in full force and effect
until all liabilities or purported liabilities of the Seller arising
under, and all monies owing or payable or purported to be owing or payable by
the Seller under the Guaranteed Agreements have been paid, discharged or
satisfied in full and notwithstanding any insolvency of the Seller or any
change in name or status of the Seller; and

	 
	 	22.4.2	 	is in addition to and is not in any way prejudiced by any other security now or
subsequently held by the Buyer and/or OROLIA.

	 	22.5	 	The DC Guarantee Obligations will not be discharged, diminished or in any way
adversely affected as a result of any of the following:

	 	22.5.1	 	any time, consent or waiver given to, or composition made with, the Seller or any
other person;

	 
	 	22.5.2	 	any amendment to, or replacement of, any Guaranteed Agreement (however
fundamental) or any other agreement or security entered into by the Seller;

	 
	 	22.5.3	 	the taking, variation, compromise, exchange, renewal, release or refusal or
neglect to take, perfect or enforce any rights or remedies against or security over
the assets of the Seller or any other person or any non-observance of any formality
or other requirement under any Guaranteed Agreement or any failure to realise the
full value of any security;

	 
	 	22.5.4	 	the release of the Seller, any other guarantor or other person under the terms of
any composition or arrangement, including any corporate or individual voluntary
arrangement;

	 
	 	22.5.5	 	any incapacity, lack of power, authority or legal personality of or dissolution or
change in the members or status of the Seller or any other person;

	 
	 	22.5.6	 	any unenforceability, illegality or invalidity of any obligation of any person
under any Guaranteed Agreement or any other document or security;

	 
	 	22.5.7	 	any insolvency or similar proceedings including the winding up, liquidation or
dissolution of the Seller, the making of an administration order in relation to the
Seller or the appointment of a receiver or administrator in respect of some or all
of the assets of the Seller; and

	 
	 	22.5.8	 	any other act, omission, circumstance, matter or thing which, but for this
clause 22.5 might operate to release, reduce or otherwise exonerate DC but which
would not have discharged a person primarily liable in respect thereof.

	 	22.6	 	DC may not determine its liabilities under the guarantees and indemnities given in
this clause 22.

 

34

 

	 	22.7	 	The Buyer and/or OROLIA will not be obliged to enforce any other rights, security or
claims they may have against the Seller or any other person before claiming under the
guarantees and indemnities given by this clause 22.

	 
	 	22.8	 	Until all amounts which may be or become payable by the Seller under or in connection
with the Guaranteed Agreements have been irrevocably paid in full DC agrees that it will
not exercise any rights which it may have:

	 	22.8.1	 	to be subrogated to or otherwise to share in any security or monies held, received
or receivable by the Buyer and/or OROLIA or, to claim any right of contribution in
relation to any payment made by DC under this Agreement;

	 
	 	22.8.2	 	to enforce any of its right of subrogation, indemnity, or to make any application
for quia timet relief against or in respect of the Seller or DC;

	 
	 	22.8.3	 	following a claim made on DC under the DC Guarantee Obligations, to demand or
accept repayment of any monies due from the Seller or to claim any set off or
counter claim against the Seller; or

	 
	 	22.8.4	 	to claim or prove in any liquidation or other insolvency proceeding of or
affecting the Seller or any co-surety in competition with the Buyer and/or OROLIA.

	 	22.9	 	Following the making of a demand on DC under the DC Guarantee Obligations, DC will
(at its own cost) promptly take such steps or action as are referred to in clauses 22.2
and 22.8 above as the Buyer and/or OROLIA may from time to time stipulate.

	 
	 	22.10	 	For the avoidance of doubt, in no event shall the DC Guarantee Obligations impose
any greater obligation or liability on DC than if DC were jointly and severally liable
with the Seller of Guaranteed Agreements.

	 
	 	22.11	 	All amounts payable in respect of the DC Guarantee Obligations will be paid by DC
without set off, deduction or counterclaim of any kind being made.

	 
	 	22.12	 	DC warrants to the Buyer and/OROLIA as follows:

	 	22.12.1	 	DC is duly incorporated under the laws of Delaware and has full power and
authority and has taken all necessary corporate action to enable it to enter into,
complete and perform this Agreement and all agreements to which it is a party and
entered into pursuant to this Agreement.

	 
	 	22.12.2	 	DC does not require the consent, approval or authority of any other person to
enter into or perform its obligations under this Agreement and all agreements to
which it is a party and entered into pursuant to this Agreement.

	 
	 	22.12.3	 	is not engaged in any litigation or arbitration proceedings which might have an
effect upon its capacity or ability to perform its obligations under this Agreement
and all agreements to which it is a party and entered into pursuant to this
Agreement.

	 
	 	22.12.4	 	DC’s entry into and performance of this Agreement and all agreements to which it
is a party and entered into pursuant to this Agreement will not constitute any
breach of or default under any contractual, governmental or public obligation
binding upon it.

	 
	 	22.12.5	 	DC is solvent and able to pay its debts as they fall due.

	 
	 	22.12.6	 	DC’s obligations under this Agreement, the Guaranteed Agreements and all
ancillary documents to be entered into pursuant to this Agreement are and will be
valid, binding and enforceable.

	 	22.13	 	Notwithstanding the foregoing, all obligations of DC as Guarantor as set forth and
evidenced in this clause 22 shall be subordinated in right of payment and priority to the
payment in full of DC’s obligations to its senior lender, Laurus Master Fund, Ltd. and its
affiliates (including Valens Offshore SPV I, Ltd., Valens Offshore SPV II, Corp., Psource
Structure Debt Limited, Kallina Corporation, and Valens U.S. SPV I, LLC), pursuant to that
certain (a) Secured Term Note dated August 24, 2006 from Digital Angel Corporation (as
amended or modified) and the related Securities Purchase Agreement and ancillary documents
of same date; (b) Secured Term Note dated August 31, 2007 from Digital Angel Corporation
(as amended or modified) and the related Securities Purchase Agreement and ancillary
documents of same date, and (c) Revolving Facility and Security Agreement dated August 31,
2007 from Digital Angel Corporation’s subsidiary Destron Fearing Corporation and certain
of its subsidiaries (as amended or modified) and related agreements.

 

35

 

	23	 	Announcements and publicity

	 	23.1	 	No announcement or circular or other publicity in connection with the subject matter
of this Agreement (other than as permitted by this Agreement) will be
made by or on behalf of the Seller and OROLIA without the approval of the other as to
its content, form and manner of publication (such approval not to be unreasonably
withheld or delayed) save that any announcement, circular or other publicity required
to be made or issued by any of the parties pursuant to any legal or regulatory
authority may be made or issued without such approval.

	24	 	Notices

	 	24.1	 	Any notice or other communication required to be given under this Agreement or in
connection with the matters contemplated by it shall, except where otherwise specifically
provided, be in writing in the English language and shall be addressed as provided in
clause 24.2 and may be:

	 	24.1.1	 	personally delivered, in which case it shall be deemed to have been given upon
delivery at the relevant address; or

	 
	 	24.1.2	 	if within the United Kingdom, sent by first class pre-paid post, in which case it
shall be deemed to have been given two Business Days after the date of posting; or

	 
	 	24.1.3	 	if from or to any place outside the United Kingdom, sent by pre-paid priority
airmail, in which case it shall be deemed to have been given seven Business Days after
the date of posting; or

	 
	 	24.1.4	 	sent by fax, in which case it shall be deemed to have been given when despatched,
subject to confirmation of uninterrupted transmission by a transmission report
provided that any notice despatched by fax after 5 pm (at the place where such fax is
to be received) on any day shall be deemed to have been received at 8am on the next
Business Day.

	 	24.2	 	The addresses and other details of the parties referred to in clause 24.1 are, subject to clause 24.3:

	 	24.2.1	 	Name: Signature Industries Limited

	 
	 	 	 	For the attention of: Mr Mike Cook

	 
	 	 	 	Address: Tom Cribb Road, Thamesmead, London SE28 0BH England

	 
	 	 	 	Fax number: +44 (0) 1256 322 695

	 
	 	 	 	with a copy to Kimbells LLP, Jonathan Hambleton, ref: DIG4-5; Fax: 01908 685054

	 
	 	24.2.2	 	Name: McMurdo Limited

	 
	 	 	 	For the attention of: Christophe François

	 
	 	 	 	Address: 291 rue Albert Caquot, 06560 Sophia Antipolis, France

	 
	 	 	 	Fax number: + 33 (0) 4 92 38 09 75

	 
	 	 	 	with a copy to Pritchard Englefield, 14 New Street, London EC2M 4HE ref:
GF/AHH/123722.6, Fax: +44 (0)20 7972 9721.

	 
	 	24.2.3	 	Name: Digital Angel Corporation

	 
	 	 	 	For the attention of: Patricia Petersen

	 
	 	 	 	Address: 490 Villaume Avenue, South St, Paul MN 55075 -2433 USA

	 
	 	 	 	Fax number: +00 (1) 561-431-8562

 

36

 

	 	24.2.4	 	Name: OROLIA SA

	 
	 	 	 	For the attention of: Christophe François

	 
	 	 	 	Address: 291 rue Albert Caquot, 06560 Sophia Antipolis, France

	 
	 	 	 	Fax number: + 33 (0) 4 92 38 09 75

	 	24.3	 	Any party to this Agreement may notify the other parties of any change to its address
or other details specified in clause 24.3, provided that such notification shall be
effective only on the date specified in such notice or five Business Days after the notice
is given, whichever is later.

	25	 	Successors, assigns and third parties

	 	25.1	 	This Agreement will be binding upon and ensure for the benefit of each party’s
successors. No party to this Agreement can assign or establish a trust of the benefit to
this Agreement save that (i) provided that the Seller’s liability under this Agreement
(including the Warranties) shall not be increased as a result of such assignment, the
Buyer may freely assign the benefit of this Agreement (including the Warranties) to
another company in the Buyer’s Group provided that such assignee is of the equivalent or
of a better financial standing than the Buyer and if any such assignee shall leave the
Buyer’s Group, prior to leaving it shall re-assign to the Buyer any rights assigned under
this clause and (ii) provided that OROLIA’s and the Buyer’s rights under this Agreement
(including the Warranties) shall not be adversely affected, the Seller may assign its
rights under this Agreement to another company in the Seller’s Group provided such
assignee is in a better financial standing than the Seller.

	 
	 	25.2	 	The Parties agree that (save where may be expressly stated otherwise in this
Agreement) for the purposes of the Contracts (Rights of Third Parties) Act 1999 they do
not intend any person other than a party to this Agreement to be able to enforce any term
of this Agreement.

	26	 	Variation

	 	26.1	 	No variation or amendments of this Agreement will be valid unless made in writing and
signed by or on behalf of each of the parties and the Buyer shall not grant any waiver,
time or indulgence to the Seller or DC without prior written OROLIA’s consent.

	27	 	Waiver

	 	27.1	 	Any waiver of any provision of this Agreement must be in writing and signed by or on
behalf of each of the parties. No failure or delay by any party in exercising any right,
power or privilege under this Agreement will operate as a waiver thereof nor will any
single or partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege.

	 
	 	27.2	 	Any waiver by any party of a breach of any provision of this Agreement will not be a
waiver of any subsequent breach of the same or any other provision.

	 
	 	27.3	 	All the Parties’ respective rights and remedies under this Agreement or by law are
cumulative so a reference to or the exercise of one remedy does not affect any of the
others and any failure to exercise or delay in exercising any rights or remedies, will not
operate as a waiver or prevent any further exercise of them.

	28	 	Costs

	 	28.1	 	The Parties will pay their own costs and expenses in relation to the negotiation,
preparation, execution and implementation of this Agreement.

	29	 	Severance

	 	29.1	 	If any provision of this Agreement will be found by any court or administrative body
of competent jurisdiction to be invalid or unenforceable such invalidity or
unenforceability will not affect the other provisions of this Agreement which will remain
in full force and effect.

 

37

 

	30	 	Further assurance

	 	30.1	 	The Seller will (at the Seller’s expense) do, execute and perform and will procure to
be done, executed and performed all such further acts, deeds, documents and things as
OROLIA and/or the Buyer may reasonably require from time to time in order to carry out,
evidence and confirm their rights and the intended purpose of this Agreement in order to
vest the Assets in the Buyer on the terms of this Agreement and otherwise to give to
OROLIA and/or the Buyer the full benefit of this Agreement.

	 
	 	30.2	 	Save as otherwise provided in this Agreement, the Buyer and OROLIA will (at the Buyer
or OROLIA’s expense) do, execute and perform and will procure to be done, executed and
performed all such further acts, deeds, documents and things as the Seller may reasonably
require from time to time in order to carry out, evidence and confirm the Seller’s rights
and the intended purpose of this Agreement and to give to the Seller the full benefit of
this Agreement.

	31	 	Entire Agreement

	 	31.1	 	This Agreement and the Transaction Documents entered, or to be entered into, pursuant
to the terms of this Agreement or entered into between the Seller and the Buyer in writing
and expressly referring to this Agreement:

	 	31.1.1	 	together constitute the entire agreement and understanding between the parties with
respect to the subject matter of this Agreement; and

	 
	 	31.1.2	 	(in relation to such subject matter) supersede all prior discussions, understandings
and agreements between the parties and their agents (or any of them) and all prior
representations and expressions of opinion by any party (or its agent) to any other
party (or its agent) including any heads of terms and confidentiality agreements
entered into by any of the parties in connection with the purpose of this Agreement.

	 	31.2	 	The Parties also agree and acknowledge between each other that the letter of intent
(as amended) entered into on 19 June 2009 and any confidentiality agreement or arrangement
which may have been entered into between the Parties and/or any member of the Seller’s
Group or the Orolia’s Group are hereby terminated and each of the Parties waives or
procures the waiver of all or any claims (known or unknown) arising on or prior to the
date of this Agreement that it may have against the other parties in respect of any breach
of any obligations set out therein. Each Party confirms to the others that it has no
knowledge of any breach by any party of the provisions of the letter of intent or any
confidentiality agreement or arrangement which may have occurred on or prior to the date
of this Agreement.

	 
	 	31.3	 	Each of the Parties acknowledges that it is not relying on any statements, warranties
or representations given or made by any of them in relation to the subject matter hereof,
save those expressly set out in this Agreement, and other documents referred to in clause
31.1, and that it will have no rights or remedies with respect to such subject matter
otherwise than under this Agreement (and the documents executed at the same time as it or
on Completion or referred to in it) save to the extent that they arise out of the fraud,
fraudulent misrepresentation or fraudulent concealment of any party.

	32	 	Counterparts

	 	32.1	 	This Agreement may be entered into in any number of counterparts, each of which when
executed and delivered will be an original, but all the counterparts will together
constitute one and the same agreement.

	33	 	Miscellaneous

	 	33.1	 	No failure to exercise nor any delay in exercising any right, power, privilege or
remedy under this Agreement shall in any way impair or affect the exercise
thereof or operate as a waiver thereof in whole or in part. No single or partial
exercise of any right, power, privilege or remedy under this Agreement shall prevent
any further or other exercise thereof or the exercise of any other right, power,
privilege or remedy.

 

38

 

	 	33.2	 	If any provision of this Agreement shall be held to be illegal, void, invalid or
unenforceable under the laws of any jurisdiction, the legality, validity and
enforceability of the remainder of this Agreement in that jurisdiction shall not be
affected, and the legality, validity and enforceability of the whole of this Agreement in
any other jurisdiction shall not be affected.

	 
	 	33.3	 	If any dispute arises in connection with this Agreement the Parties will first
attempt to settle it by mediation in accordance with the Centre for Effective Dispute
Resolution (CEDER) Model Mediation Procedure. Unless otherwise agreed by the Parties the
mediator will be nominated by CEDR. For the avoidance of doubt, this will not preclude a
party to issue proceedings in accordance with lause 34, such proceedings being, when
appropriate, stayed pending determination of the mediator under this clause 33.3.

	34	 	Applicable law and jurisdiction and remedy and agents for services

	 	34.1	 	English law governs this Agreement. Each party irrevocably agrees to submit to the
exclusive jurisdiction of the courts of England over any claim or matter arising out of or
in connection with this Agreement 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.

	 
	 	34.2	 	Save as otherwise provided in this Agreement, the only remedy available to a party
for breach of any of the provisions of this Agreement is for breach of contract under the
terms of this Agreement.

	 
	 	34.3	 	Nothing in clauses 31, 34.2 or Schedule 3 will operate to limit or exclude any
liability for fraud.

	 
	 	34.4	 	DC irrevocably appoints the Seller’s Solicitors as its agent to receive on its behalf
in England or Wales service of any proceedings arising out of or in connection with this
Agreement and such other documents entered into pursuant to this Agreement.

	 
	 	34.5	 	OROLIA irrevocably appoints Pritchard Englefield Solicitors as its agent to receive
on its behalf in England or Wales service of any proceedings arising out of or in
connection with this Agreement and such other documents entered into pursuant to this
Agreement.

	35	 	Post-completion effect

	 	35.1	 	This Agreement will remain in full force and effect after and notwithstanding
Completion in respect of all obligations, agreements, covenants, undertakings or
conditions contained in or implied by this Agreement which have not been done, observed or
performed at or prior to Completion and all warranties and indemnities contained in or
implied by this Agreement (including the Warranties) will continue in full force and
effect after and notwithstanding Completion and the parties may take action for any breach
of non-fulfilment of any of them after Completion.

In witness whereof this Agreement has been executed as a Deed on the date stated at the beginning
of this Agreement.

 

39

 

SCHEDULE 1

Apportionment of the Consideration

	1	 	The Price will be apportioned as follows:-

	 	 	 	 	 
	Item	 	US$	 
	Goodwill
	 	 	7,519,583	 
	Plant
	 	 	342,303	 
	Stock (Initial Stock Value — GBP1,300,000)
	 	 	2,138,110	 
	Business Contracts
	 	 	1	 
	Business Intellectual Property
	 	 	1	 
	Business Information
	 	 	1	 
	Rights against third parties referred to in clause 2.1.7
	 	 	1	 
	 
	 	 	 
	Total
	 	 	10,000,000	 
	 
	 	 	 

 

40

 

SCHEDULE 2

Warranties

	1	 	Disclosure Bundle

	 
	1.1	 	The information in the Schedules to this Agreement is complete, true, accurate and not
misleading. The information in the Disclosure Letter is complete, true, accurate and not
misleading and the documents in the Disclosure Bundle are true and complete copies of the
originals.

	 
	 	 	Capacity and Authority

	 
	1.2	 	The Seller:

	 	1.2.1	 	is a limited company duly incorporated under English law;

	 
	 	1.2.2	 	have full power and authority and have taken all necessary corporate action
to enable them to enter into, complete and perform this Agreement and all agreements
to be entered into pursuant to this Agreement;

	 
	 	1.2.3	 	does not require the consent, approval or authority of any other person to
enter into or perform its obligations under this Agreement and all agreements to which
it is a party and entered into pursuant to this Agreement; and

	 
	 	1.2.4	 	is not engaged in any litigation or arbitration proceedings which might have
an effect upon its capacity or ability to perform its obligations under this Agreement
and all agreements to which it is a party and entered into pursuant to this Agreement
and no such legal or arbitration proceedings have been threatened against it.

	1.3	 	The Seller’s entry into and performance of this Agreement and all agreements to which it is a
party and entered into pursuant to this Agreement will not constitute any breach of or default
under any contractual, governmental or public obligation binding upon it.

	 
	1.4	 	The Seller’s obligations under this Agreement and each agreement to be entered into pursuant
to this Agreement will be valid, binding and enforceable.

	 
	 	 	The Business

	 
	1.5	 	The Business is not carried on by or for the benefit of any person, firm or corporation other
than the Seller.

	 
	1.6	 	The Seller does not conduct and has not conducted any part of the Business through a branch,
agency or permanent establishment anywhere in the world other than at the Property.

	 
	1.7	 	The Seller has at all times carried on the Business in all respects in accordance with its
memorandum and articles of association for the time being in force and any other documents
relating to the Business to which it is or has been a party.

	 
	1.8	 	The Seller in connection with the Business is not a party to and is not liable (including
contingently liable) under a guarantee, indemnity or other obligation to secure or incur a
financial or other obligation with respect to another person’s obligation.

	 
	 	 	Connected persons

	 
	1.9	 	Neither the Seller nor any persons connected (as that expression is defined in section 839
Income and Corporation Taxes Act 1998) with the Seller has any direct or indirect interest in
any business which has a close trading relationship with the Business or which is, or is
likely to become, competitive with the Business.

	 
	2	 	Records and Accounts

	 
	 	 	Records

	 
	2.1	 	All books, accounts and records of a material nature required by law to be maintained in
connection with the Business:

	 	2.1.1	 	are in possession of the Seller; and

 

41

 

	 	2.1.2	 	during the period of the Seller’s ownership have at all times been properly
maintained written up to date and will be so kept up to Completion; do not contain any
material inaccuracies or discrepancies. During the period prior to the Seller’s
ownership, they have been maintained to a reasonable standard.

	 
	 	2.1.3	 	are kept on computer, the Seller is the owner of all hardware and all
software licences necessary to enable it to use any of those books, accounts and
records in the manner in which they have been used prior to the date of this
Agreement, and the Seller does not share any such hardware or software with any other
person.

	2.2	 	No notice has been received or allegation made to the Seller that any of the records are
incorrect or should be rectified.

	 
	 	 	Accounts

	 
	2.3	 	The Accounts:

	 	2.3.1	 	were prepared on a proper and consistent basis with that used for the
preparation of the Seller’s accounts for the preceding three financial years and
comply with the requirements of the Companies Act 2006 and other relevant statutes and
generally accepted accounting principles and standards in the United Kingdom;

	 
	 	2.3.2	 	give a true and fair view of and properly reflect the financial position of
the Business as at the Accounting Date;

	 
	 	2.3.3	 	have been audited by an auditor or firm or accountants qualified to act as
auditors in the UK and the auditors’ report required to be annexed to the accounts is
unqualified;

	 
	 	2.3.4	 	contain proper and adequate provisions or reserves for bad and doubtful
debts, old, depreciated, obsolete, unsaleable or slow-moving stock, for depreciation
on fixed assets as at the Accounts Date;

	 
	 	2.3.5	 	are not affected by any unusual or non-recurring items;

	 
	 	2.3.6	 	provide for all known actual or known contingent liabilities of the Business
(whether or not unquantified or disputed), including but not limited to, finance lease
commitments, pension liabilities, contingent liabilities to customers at the Accounts
Date; and

	 
	 	2.3.7	 	reflect all the fixed and loose plant, machinery, equipment, furniture,
fittings and vehicles owned by the Business at the Accounts Date.

	2.4	 	With respect to valuation of Stock, the accounting policies and bases, and the method of
valuing Stock used in the preparation of the Accounts, were the same as those adopted in the
accounts of the Business for the three financial periods immediately preceding the Accounts
Date.

	 
	 	 	Management Accounts

	 
	2.5	 	The Management Accounts have been properly and diligently prepared in a manner consistent
with the bases and policies adopted in preparing the management accounts for the previous
management accounting period August 2009 and, except as expressly disclosed in them, there
were no unusual, exceptional, non-recurring or extraordinary items which materially affected
such accounts. The Management Accounts contain accurate details of sales, stocks, margin and
mark drawings and accurately, clearly and fairly state the assets, liabilities and position of
the Business at the date of the Management Accounts and their results for the period ended on
that date.

	 
	3	 	Trading

	 
	 	 	Change since the Accounting Date

	 
	3.1	 	Since the Accounting Date:

	 	3.1.1	 	the Business has been carried on in the ordinary and usual course both as
regards the nature, scope and manner of conducting the same and so as to maintain the
same as a going concern;

 

42

 

	 	3.1.2	 	the Business has paid its creditors within the times agreed with such
creditors and there are no debts outstanding which have been due for more than twelve
weeks;

	 
	 	3.1.3	 	there has been no unusual change in the stock levels , current assets or
liabilities of the Business;

	 
	 	3.1.4	 	there has been no material reduction in the value of the Plant, to the
extent that they are still owned by the Seller;

	 
	 	3.1.5	 	none of the Plant have been lost, damaged or destroyed;

	 
	 	3.1.6	 	none of the Stock reflected in the Accounts has realised an amount less than
the value that was placed on it in the Accounts;

	 
	 	3.1.7	 	the Seller has not acquired or disposed of, or agreed to acquire or dispose
of, any asset other than trading stock in the ordinary and usual course of business,
or assumed or incurred, or agreed to assume or incur, any capital commitment or
liability (actual or contingent);

	 
	 	3.1.8	 	no unusual or abnormal contracts differing from the ordinary contracts
necessitated by the nature of the Business have been entered into by the Seller;

	 
	 	3.1.9	 	no contract has been entered into by the Seller involving expenditure by it
on capital account;

	 
	 	3.1.10	 	[LEFT INTENTIONALLY BLANK]

	 
	 	3.1.11	 	the Business has not been adversely affected by:

	 	(a)	 	the loss of or material reduction in regular orders from any
customer;

	 
	 	(b)	 	the loss of or material reduction in any regular source of
supply;

	 
	 	(c)	 	any abnormal factor not affecting similar businesses to a
like extent.

	 	3.1.12	 	there has been no material adverse change in the financial position of the Business;
and

	 
	 	3.1.13	 	the Seller has not knowingly done or omitted to do anything to prejudicially affect
the Goodwill in a material way.

	 	 	Agents

	 
	3.2	 	There are no agents or distributors of the Business and there are no persons, firms or
companies whether in the United Kingdom or elsewhere with whom formal or informal arrangements
exist or have existed concerning the manufacture, sale, distribution, hire, lease or promotion
or licensing of any goods or services connected with the Business and no such agent or
distributor has any right to any indemnity or compensation whatsoever upon termination of any
arrangement in connection with the Business.

	 
	3.3	 	There are no existing joint venture agreements, partnership agreements, market sharing
agreements relating to the Business. Any such agreements or arrangements have been terminated
with no liability on either party to them.

	 
	 	 	Terms of Trade

	 
	3.4	 	So far as it is aware the Seller has not:

	 	3.4.1	 	given any guarantee or warranty (other than any implied by law) or made any
representation in respect of any products or services sold or supplied by the
Business;

	 
	 	3.4.2	 	accepted any liability to service, maintain, repair or otherwise do or
refrain from doing anything in relation to such goods or services after they have been
sold or supplied by it;

	 	 	except for those contained in its standard conditions of trading, complete and accurate
copies of which are contained in the Disclosure Letter.

 

43

 

	4	 	The Assets

	 
	 	 	Title to the Assets

	 
	4.1	 	The Assets (excluding the Excluded Assets) comprise all assets now used in the Business and
which are necessary or reasonably required for the continuation of the Business as carried on
by the Seller.

	 
	4.2	 	The Assets:

	 	4.2.1	 	the absolute property of the Seller and are in the Seller’s possession and control;

	 
	 	4.2.2	 	are free from any Security Interest, agreement of hire or hire purchase or
for payment on deferred terms, bill of sale or any obligation to pay any outstanding
sums in respect of them;

	4.3	 	No person other than the Seller has or claims any rights in relation to the Assets or any of
them or the proceeds of any sale of the Assets or any of them and the Assets are not subject
to or potentially subject to any floating charge or guarantee given by the Seller or by any
person or company connected with the Seller.

	 
	4.4	 	The Business does not depend on the use of assets owned by, or facilities provided by, the
Seller which are not being acquired under this Agreement.

	 
	4.5	 	The Seller has not agreed to dispose of or granted or agreed to grant any security, charges,
liens or other encumbrance in respect of any of the Assets and none of the Assets is subject
to, and there is no agreement or commitment to give or create, any option, lien or
encumbrances on or over the Business Assets.

	 
	4.6	 	There has been no exercise or purported exercise of any charge, lien, encumbrance or equity
over any of the Assets and no claim has been made by any person to be entitled to any of the
foregoing and there is no dispute directly or indirectly relating to any of the Assets.

	 
	 	 	Plant

	 
	4.7	 	So far as the Seller is aware the Plant:

	 	4.7.1	 	is in good repair, condition and working order having regard to its age and level of use;

	 
	 	4.7.2	 	has been properly maintained;

	 
	 	4.7.3	 	includes no items with a value of more than £5,000 which are surplus to the
requirements of the Business;

	 
	 	4.7.4	 	has been written down correctly;

	 
	 	4.7.5	 	is used exclusively in connection with the Business; and does not contravene
any material legal requirement or restriction.

	 	 	The Stock and Products

	 
	4.8	 	The Products referred to in Schedule 7 are all the material products sold or supplied by the Business.

	 
	4.9	 	The Stock:

	 	4.9.1	 	is sufficient for the normal requirements of the Business as carried on at
the date of this Agreement and at Completion and relates exclusively to the Business;

	 
	 	4.9.2	 	is in good condition or, if not, its value has been appropriately written
down; and

	 
	 	4.9.3	 	(including work-in-progress) is not excessive in quantity and is capable of
being used in the ordinary course of business and the work-in-progress of the Business
and the amounts ordered for stock is at its normal level having regard to current
orders and to orders reasonably anticipated from customers of the business None of the
Stock is old, obsolete, slow moving, unsaleable, unusable or unmarketable. All work in
progress hereby agreed to be transferred (if any) is wholly re-chargeable to clients.

 

44

 

	 	4.9.4	 	(in the case of completed goods) is capable of being sold in the ordinary
and usual course of business in accordance with current price lists and without
discount, rebate or allowance to a buyer.

	 
	 	4.9.5	 	complies fully, and will on sale in the ordinary and usual course of the
Business comply fully, with all applicable laws, regulations, standards (including
British and European Union Standards) and specifications agreed with Customers.

	5	 	Contracts

	 
	 	 	Business Contracts

	 
	5.1	 	The Seller had and has the legal power and authority to enter into and perform the Business Contracts.

	 
	5.2	 	So far as the Seller is aware all the Business Contracts are in full force and effect and the
Seller has complied with them in all material respects.

	 
	5.3	 	All the material terms of each of the material Business Contracts have been disclosed to the
Buyer and none of the Business Contracts and no contract, agreement or arrangement (whether
oral or documented) in relation to the Business or the Assets (whether or not disclosed):

	 	5.3.1	 	was entered into otherwise than in the ordinary and usual course of business
of the Business;

	 
	 	5.3.2	 	is not on an arm’s length basis.

	5.4	 	None of the Business Contracts is the subject of any material claim, dispute or proceeding,
whether actual, pending or threatened and of which the Seller has received written notice.

	 
	 	 	Customer Contracts

	 
	5.5	 	The Customer Contracts are the only contracts entered into prior to today’s date by or on
behalf of the Seller with customers for the sale or hire of goods or equipment or provision of
services by the Seller in connection with the Business which at today’s date remain to be
performed in whole or in part by the Seller.

	 
	5.6	 	No more than 25% of the aggregate amount of all sales of the Business in the preceding 12
months were made to the same customer.

	 
	 	 	Leasing/Hire Agreements

	 
	5.7	 	The Leasing/Hire Agreements are the only leasing or hire agreements relating to the Business
existing at today’s date.

	 
	 	 	Supplier Contracts

	 
	5.8	 	The Supplier Contracts are the only contracts, engagements and orders entered into prior to
today’s date by or on behalf of the Seller for the supply or sale of goods or services in
connection with the Business which at today’s date remain to be performed in whole or in part
by the Seller.

	 
	5.9	 	No more than 25% of the aggregate amount of all purchases of the Business in the preceding 12
months were obtained from the same supplier.

	 
	 	 	Breach of Business Contracts and other arrangements

	 
	5.10	 	The Seller has not waived any rights or privileges under the Business Contracts.

	 
	5.11	 	The Seller is not in breach of any material obligation or restriction, agreement or
arrangement (including without limitation the Business Contracts) which it has entered into
for the purpose of, or which is used in the operation of, the Business and the Assets. So far
as the Seller is aware no matter exists which might give rise to such breach.

	 
	5.12	 	So far as the Seller is aware no event has occurred, is subsisting which, with the giving of
notice and/or lapse of time will, constitute or result in a default or the acceleration of any
obligation of the Seller under any agreement or arrangement
which it has entered into for the purpose of, or which is used in the operation of, the
Business and Assets.

 

45

 

	5.13	 	No threat or claim of default under any of the Business Contracts or any other agreement,
instrument or arrangements to which the Seller is a party relating to the Business or the
Assets has been made and is outstanding against the Seller and there is no circumstances
whereby any of the Business Contracts or any such other agreement, instrument or arrangement
may be terminated or rescinded by any other party or whereby the terms may be worsened as
against the Seller or the Buyer or whereby the Business or the Assets may be prejudiced as a
result of anything done or omitted or permitted to be done by the Seller.

	 
	6	 	Compliance

	 
	 	 	General

	 
	6.1	 	So far as the Seller is aware neither the Seller nor any of its officers, agents or employees
(in the course of their employment with the Seller and where the Seller is liable for the
relevant act or omission) has done or omitted to do any act or thing which is in contravention
or breach of or the subject of enquiry, investigation or proceedings under the provisions of
any Act, Order, Regulation or the like whether made in or pertaining to the United Kingdom
giving rise to any material fine, penalty, default, proceedings or other such material
liability in relation to the Business or any of the Assets.

	 
	6.2	 	So far as the Seller is aware (having received no notice of the same) all legislation and all
orders, provisions, directions and conditions relating to the Assets or the conduct of the
Business (including VAT) have been duly complied with in all material respects.

	 
	6.3	 	So far as the Seller is aware all necessary material licences, consents, permits, agreements,
arrangements, norms and authorities (public and private) necessary to enable the Seller to
carry on the Business effectively in the manner in which it is now carried on:

	 	6.3.1	 	have been obtained;

	 
	 	6.3.2	 	are valid and subsisting; and

	 
	 	6.3.3	 	are detailed in the Disclosure Letter;

	 	 	and the Seller is not in material breach of any of them.

	 
	6.4	 	In particular, the Seller warrants that the contract and licenses as provided or listed in
Documents K2.002-K2.014, K2.016-K2.023 are fully valid and in force at the Completion Date.

	 
	 	 	Data Protection

	 
	6.5	 	For the purpose of this paragraph 6 the terms data subject, personal data, processing and
data protection principles will have the same meanings as in the Data Protection Act 1998 (DPA
1998).

	 
	6.6	 	The Seller has complied in all material respects with the DPA 1998 in relation to the
Business and in particular but without limitation:

	 	6.6.1	 	the Seller has complied in all material respects with all the data
protection principles;

	 
	 	6.6.2	 	the Seller has made a notification in respect of the Business in accordance
with the DPA 1998, and the details given in such notification have been kept accurate
and up to date, and the notification has not expired.

	6.7	 	So far as it is aware, the Seller has not at any time in the 12 months immediately preceding
the date of this Agreement received in writing:

	 	6.7.1	 	any complaint from any data subject;

	 
	 	6.7.2	 	any compensation claim from any data subject in relation to its processing
of personal data in relation to the Business;

	 
	 	6.7.3	 	any notice from the Office of the Information Commissioner (or any similar
supervisory authority) in relation to the Business including but not limited to
any information, special information, enforcement, deregistration or transfer
prohibition notices.

 

46

 

	 	 	Competition and Trade Regulation

	 	6.7.4	 	So far as the Seller is aware the Seller, in relation to the Business, is
not and has not been a party to or concerned in any agreement, practice or arrangement
and has not engaged in any course of conduct or practice which in whole or in part:

	 
	 	6.7.5	 	contravened any of the provisions of the Restrictive Trade Practices Acts
1976 and 1977 or was or should have been registered under those or either of those
Acts,

	 
	 	6.7.6	 	contravened any of the provisions of the Resale Prices Act 1976,

	 
	 	6.7.7	 	contravenes or has contravened the Trade Descriptions Acts 1968 and 1972,

	 
	 	6.7.8	 	contravenes or has contravened any of the provisions of the Competition Act
1998 or the Enterprise Act 2002;

	 
	 	6.7.9	 	it has not received any written notice informing it is the subject of any
enquiry or investigation under the Fair Trading Act 1973, the Competition Act 1980,
the Competition Act 1998, the Enterprise Act 2002 or under any competition or anti
trust law anywhere in the world;

	 
	 	6.7.10	 	it has not received any written notice informing the Seller the Business infringes
or has infringed any of the provisions of the European Communities Act 1972 or
Articles 81 and/or 82 of the EC Treaty (or any regulations or directives made pursuant
to the Treaty) or Articles 53 and/or 54 of the EEA Agreement;

	 
	 	6.7.11	 	infringes or has infringed any competition, anti-trust, anti-cartel or restrictive
trade practices law, rule, regulation, order or the like anywhere in the world;

	 
	 	6.7.12	 	is or has been the subject of any measure, including any undertaking on the part of
the Seller to, or any requirement or order of, the Restrictive Practices Court, the
Director General of Fair Trading, the Office of Fair Trading, the Secretary of State
for Trade and Industry, the European Commission, the Court of Justice of the European
Communities or the Competition Appeal Tribunal or to any other competition or
regulatory authority, tribunal or court anywhere in the world; or

	 
	 	6.7.13	 	is unenforceable or void (whether in whole or in part) or renders the Seller liable
to civil, criminal or administrative proceedings by virtue of any competition or
anti-trust legislation anywhere in the world.

	6.8	 	The Seller, in relation to the Business:

	 	6.8.1	 	has not given any undertaking or assurance (whether or not legally binding) to; and

	 
	 	6.8.2	 	has not received any request for information from

	 	 	any regulatory authority under any competition, anti trust, or restrictive trade practice
legislation, law, rule or regulation anywhere in the world.

	6.9	 	The Seller, in relation to the Business is not and has not been a party to or concerned in
any agreement or arrangement in respect of which:

	 	6.9.1	 	an application under Article 81 and/or Article 82 of the EC Treaty for
negative clearance or exemption has been made to the European Commission; and/or

	 
	 	6.9.2	 	an application under sections 13, 14, 21 or 22 of the Competition Act 1998
has been made to the Office of Fair Trading or any sectoral regulator.

	6.10	 	So far as the Seller is aware no investigations, enquiries, reports or orders by or by
reference to any regulatory authority under any competition, anti trust, or restrictive trade
practice legislation, law, rule or regulation anywhere in the world have been made are pending
or in existence:

	 	6.10.1	 	in respect of the Seller, the Business or any of the Assets or in which the Business
may be involved ; or

 

47

 

	 	6.10.2	 	in respect of activities or behaviour in which the Business or the Seller (in
respect of the Business) is or has been or is alleged to be or have been involved.

	6.11	 	The Business is not and has not been in receipt of any aid which could be construed as
falling within Article 87(1) of the EC treaty other than aid or any alteration to existing aid
falling within Article 87(3) which has been duly notified to the European commission pursuant
to Article 88(3), and the Seller is not aware of any investigation, complaint, action or
negative decision in relation to the receipt or alleged receipt by the Business of any aid or
alleged aid or any threatened such investigation , complaint, action or negative decision.

	 
	 	 	Restrictions on Business

	 
	6.12	 	The Seller, in relation to the Business, is not and has not been a party to any agreement,
arrangement, understanding or practice restricting its freedom to:

	 	6.12.1	 	supply and receive goods and services to and from such persons by such means and
into or from such places as it may from time to time think fit; or

	 
	 	6.12.2	 	carry on the whole or any part of the Business or to use or exploit any of the
Assets in any part of the world in such manner as it from time to time thinks fit.

	7	 	Litigation and Insolvency

	 
	 	 	Defective Products and Services

	 
	7.1	 	So far as the Seller is aware there are no outstanding claims or circumstances that could
give rise to a claim against the Seller in respect of defects in quality or delays in delivery
or completion of contracts or deficiencies of design or performance of equipment, non
compliance with specifications or otherwise relating to liability for goods or services
supplied or to be supplied by the Seller in relation to the Business and so far as the Seller
is aware no such claims are threatened or anticipated. A list showing any such claims (or
series of claims arising from the same fact, matter or circumstances) having a value of more
than £2,000 which have been made against the Seller in the period from the preceding 12 months
is attached to the Disclosure Letter.

	 
	7.2	 	During the period of the Seller’s ownership of the Business the Seller has not:-

	 	7.2.1	 	instigated any product recall programme in respect of any of the Products; or

	 	7.2.2	 	save as disclosed in the Disclosure Letter, accepted any liability or
obligation to service, repair, maintain, take back or otherwise do or not do anything
in respect of any goods or products or services that would apply to after the goods or
products have been delivered by it or services provided.

	7.3	 	The Seller has not received a prohibition notice, a notice to warn or a suspension notice
under the Consumer Protection Act 1987 in relation to the Business.

	 
	 	 	Litigation

	 
	7.4	 	Details of all material customer claims, complaints or returns relating to the Business that
have occurred during the 12 months preceding today’s date are set out in the Disclosure Letter.

	 
	7.5	 	Neither the Seller nor so far as the Seller is aware any person for whose acts or omissions
it may be vicariously liable is engaged (whether as a claimant, defendant or otherwise) in or
subject to any civil, administrative, criminal or arbitration proceedings in relation to the
Business or the Assets or any of them and has not received notice informing the Seller it or
any person for whose acts or omissions it may be vicariously liable is the subject of any
investigation, inquiry or enforcement proceedings by any governmental, administrative or
regulatory body in relation to the Business or the Assets, and:

	 	7.5.1	 	so far as the Seller is aware there are no such proceedings pending or
threatened by or against the Seller or against any such person;

	 
	 	7.5.2	 	so far as the Seller is aware there are no facts or circumstances likely to
give rise to any such proceedings;

 

48

 

	 	7.5.3	 	there are no judgements and/or awards outstanding against the Seller which
affect or might affect any of the Assets; or

	 
	 	7.5.4	 	there is no undertaking or assurance given to any court or governmental
agency or injunction relating to the Business which is still in force.

	 	 	Insolvency

	 
	7.6	 	No application has been made or notice given or other step taken by the Seller or its
directors or any other person to appoint an administrator in respect of the Seller.

	 
	7.7	 	No request has been made by the Seller or its directors to any person for the appointment of
an administrator, administrative receiver or receiver in respect of the Seller or the whole or
any part of the Business or Assets.

	 
	7.8	 	No administrator, administrative receiver or receiver has been appointed in respect of the
Seller or the Business or the Assets or any of them and no mortgagee has taken possession of
the whole or any part of the Business or the Assets.

	 
	7.9	 	No order has been made or petition presented or application made or meeting convened or
resolution passed for the winding up or bankruptcy or striking off or dissolution of the
Seller or for any related interim order.

	 
	7.10	 	No composition in satisfaction of the debts of the Seller or scheme of arrangement of its
affairs or compromise or arrangement between it and either or both of its creditors or members
or any class of either or both of its creditors or members has been proposed, sanctioned or
approved and no proceedings have been commenced in respect of the Seller under any law,
regulation or procedure relating to the reconstruction or readjustment of debt.

	 
	7.11	 	No distress, charging order, third party debt order, execution or other process has been
levied or applied for in respect of the whole or any part of the Business or the Assets and no
action has been taken to repossess any of the Assets.

	 
	7.12	 	No event has occurred causing (and there are no circumstances likely to cause , or which upon
intervention or notice by any third party may cause) any floating charge created by the Seller
to crystallise over the Business or the Assets or any of them or any charge created by it to
become enforceable over the Business or the Assets or any of them nor has any such
crystallisation occurred nor is such enforcement in process.

	 
	7.13	 	The Seller is not insolvent, is not unable or deemed unable to pay its debts within the
meaning of section 123 of the Insolvency Act 1986 or the insolvency legislation applicable to
the Seller and the Seller has not stopped or threatened to stop paying its debts as they fall
due.

	 
	7.14	 	No judgement is outstanding against the Seller and no demand has been served on the Seller
under section 123(1)(a) of the Insolvency Act 1986.

	 
	7.15	 	No event has occurred or proceedings taken in respect of the Seller in any jurisdiction to
which it is subject which has an effect equivalent or analogous to any of the events mentioned
in paragraphs 7.6 to 7.14 (inclusive) above.

	 
	8	 	Employees

	 
	8.1	 	No person is employed or engaged in the Business (whether temporarily or permanently and
whether under a contract of service or contract for services) other than the Employees and the
Employees are all employed directly by the Seller and each of the Employees is employed wholly
and mainly in the Business.

	 
	8.2	 	There are no employees employed or engaged in the Retained Business at the Property.

	 
	8.3	 	The Disclosure Letter contains copies of all service contracts and contracts for services and
full particulars of the current terms of employment or engagement of all Employees and agents
of the Business (including all information required by law to be included in particulars of
terms of employment and all information relating to any collective agreements) and all of such
particulars are true and accurate and complete in all respects.

 

49

 

	8.4	 	The Seller has not offered any contract of employment or contract for services to any person
(except to any of the Employees) and there is not now outstanding any
contract of service or for services with any of the Employees or agents of the Business
which is not determinable by the Seller at any time on one month’s notice or less without
compensation (other than under the Employment Rights Act 1996) or any liability (other than
for salary, wages, commission or pension) on the part of the Business to or for the benefit
of any person who is an Employee or agent of the Business.

	 
	8.5	 	The Seller has not offered, promised or agreed for the future any variation in any contract
of employment or any contract for services in respect of the Employees or any other person
employed by the Seller in respect of whom liability may be deemed by TUPE to pass to the
Buyer.

	 
	8.6	 	There are no enquiries or investigations existing, pending or threatened into the Seller or
the Business by the Equal Opportunities Commission or the Commission for Racial Equality or
the Disability Rights Commission other similar authorities.

	 
	8.7	 	There is no person other than an Employee who now has or may in the future have a right to
return to work (whether for reasons connected with maternity leave or absence by reason of
illness or incapacity or otherwise) or a right to be reinstated or re-engaged in the Business
or to any other compensation.

	 
	8.8	 	There are not in existence and the Seller has not proposed or is not proposing to introduce
any bonus, profit sharing scheme, share option scheme, share incentive scheme or any other
scheme or arrangement under which the Employees or any of them are or is or would be entitled
to participate in the profits of the Business.

	 
	8.9	 	The Seller is not engaged or involved in any dispute, claim or legal proceedings (whether
arising under contract, common law, statute or in equity) with any of the Employees nor with
any other person employed by the Seller in respect of whom liability is deemed to pass to the
Buyer by virtue of TUPE, and so far as the Seller is aware there is no likelihood of any such
dispute, claim or proceedings arising at any time.

	 
	8.10	 	There is no industrial action or dispute threatened or existing or anticipated in respect of
or concerning any of the Employees.

	 
	8.11	 	The Seller has not recognised any trade union, works/staff councils or association of trade
unions or any other organisation of employees in respect of the Employees or any of them.

	 
	8.12	 	There is no collective agreement or other agreement or arrangement (whether in writing, or by
custom and practice) with any trade union, staff association, staff works council or other
organisation of employees in relation to the Business and the Seller is not involved or likely
to be involved in connection with the Business in any industrial or trade dispute or
negotiation with any trade union or other organisation of employees nor any application for
recognition pending before the Central Arbitration Committee under the Employment Relations
Act 1999 nor any prior notice of such.

	 
	8.13	 	Within the period of one year ending on the date of this Agreement and in relation to the
Employees, the Seller has not:

	 	8.13.1	 	given notice of any redundancies to the relevant Secretary of State or started
consultations with any trade union under Part IV TULRA or under TUPE nor has Seller
failed to comply with any of its obligations under Part IV of that Act; or

	 
	 	8.13.2	 	been a party to any relevant transfer as defined in TUPE nor has the Seller failed
to comply with any duty to inform and consult any trade union under TUPE and will not
before Completion do any of such things.

	9	 	Pensions

	 
	9.1	 	There are no agreements or arrangements for the payment to any person of or the contribution
to any scheme for benefits on the retirement or death of any Employee or any dependant of any
such person and no proposal to establish any such scheme or arrangement has been announced to
the Employees other than the Seller’s Scheme.

 

50

 

	9.2	 	As regards the Seller’s Scheme there are annexed to the Disclosure Letter a copy of the
current Member’s Handbook and of any announcements to Members which have not yet been
incorporated into the Handbook.

	 
	9.3	 	The names of the Employees who are members of the Seller’s Scheme are listed in the
Disclosure Letter and no other Employees are members of the Seller’s Scheme.

	 
	9.4	 	The Seller’s Scheme is a registered scheme under section 153 Finance Act 2004.

	 
	9.5	 	The Seller’s Scheme is a contracted out scheme within the meaning of the Pension Schemes Act
1993.

	 
	9.6	 	So far as the Seller is aware there are no actions, proceedings or claims (other than routine
claims for benefits) outstanding, by the Employees or any of them in respect of the Seller’s
Scheme relating to any act, event, omission or other matter arising out of or in connection
with the Seller’s Scheme.

	 
	9.7	 	No Employee has been excluded or prevented from membership of the Seller’s Scheme on the
grounds of part-time employment, marital status or otherwise where such exclusion, prevention
or restriction constitutes (or could reasonably constitute) discrimination in breach of
Article 141 of the EU Treaty or any European directive.

	 
	10	 	Intellectual Property

	 
	10.1	 	Details of all registered Business Intellectual Property (including applications for such
rights) are set out in Schedule 8 which are accurate in all material respects. All such
Business Intellectual Property are used, enjoyed and exploited exclusively in connection with
the Business.

	 
	10.2	 	The Business Intellectual Property constitutes all Intellectual Property required in order to
carry out the Business as carried on at the Transfer Date. The Seller does not own or use in
connection with the Business any Business Intellectual Property which has not been disclosed.

	 
	10.3	 	Save in respect of any Business Intellectual Property which is the subject of an IP Licence,
or the subject of any licence, authorisation or permission (in any form whatsoever, whether
express or implied, written or unwritten) from a member of the Seller’s Group or incorporated
into any Customer Contract or Supplier Contract, the Seller is the sole legal and beneficial
owner of all Business Intellectual Property and free from all Security Interests, licences and
adverse rights of any description.

	 
	10.4	 	None of the Business Intellectual Property so disclosed is jointly owned by the Seller and
any third party.

	 
	10.5	 	None of the Business Intellectual Property so disclosed is jointly used by the various
businesses of the Seller.

	 
	10.6	 	The Business Intellectual Property owned by the Seller is valid and enforceable, in full
force and effect and nothing has been done or not been done as a result of which any of them
has ceased or might cease to be valid, subsisting or enforceable. The Seller has not received
written notice that it is:

	 	10.6.1	 	subject to any claim, challenge disputes or proceedings, pending or threatened, in
relation to the ownership, validity or use of such rights by a third party or
competent authority; or

	 
	 	10.6.2	 	subject to an application for cancellation, revocation, amendment or licence of
right or compulsory licence; or

	 
	 	10.6.3	 	being claimed or opposed by any other person.

	10.7	 	So far as the Seller is aware there has been no infringement by any third party of any
Business Intellectual Property, nor any third party breach of confidence, passing off or
actionable act of unfair competition in relation to the Business and no such infringement,
breach of confidence, passing off or actionable act of unfair competition is current or
anticipated.

	 
	10.8	 	All application, renewal and other official statutory and regulatory fees and all
professional advisers fees payable in connection with any Business Intellectual Property owned
by the Seller have been paid and reasonable steps have been taken to ensure the maintenance
and protection of all such Business Intellectual Property.

 

51

 

	10.9	 	Particulars of all material IP Licences are set out in the Disclosure Letter. So far as the
Seller is aware the Seller is not in breach of any IP Licence. So far as the Seller is aware
all such IP Licences are valid and enforceable, in full force and effect and will not
terminate or be capable of termination by reason of the execution and performance of this
Agreement.

	 
	10.10	 	So far as the Seller is aware none of the activities involved in the conduct of the
Business, (save in relation to the Excluded Assets) infringe or have infringed any
Intellectual Property or constitute or have constituted breach of confidence, passing off or
actionable unfair competition in any jurisdiction. So far as the Seller is aware no such
activities give or have given rise to any obligation to pay any royalty, fee, compensation or
any other sum whatsoever.

	 
	10.11	 	The Seller is not, and has not within the year preceding the date of this Agreement, been
party to or threatened with any legal proceedings relating to any Intellectual Property and
the Seller is not aware of (and has not acquiesced in) any infringement of the Business
Intellectual Property or any breach of confidence, passing off or actionable unfair
competition in any jurisdiction in relation to the Business, (save in relation to the Excluded
Assets).

	 
	10.12	 	The Seller has in its possession or control all Business Information (to the extent the same
is confidential) used, enjoyed or exploited in the Business (or held with a view to such use,
enjoyment or exploitation). Except insofar as it is in the public domain through no fault of
the Seller or any member of the Seller’s Group, none of the same is known or accessible to any
person except the Seller, or members of the Seller’s Group, the Seller’s employees and
advisers, other than persons who have given the Seller confidentiality undertakings in respect
thereof details of which are set out in the Disclosure Letter. The Seller is not aware without
making any specific enquiries of any breach of such confidentiality obligations by any third
party.

	 
	10.13	 	Save in the ordinary course of business or with its employees, the Seller has not entered
into any confidentiality or other agreement, nor is subject to any duty, which restricts the
free use or disclosure of such information as is referred to in paragraph 10.12 above.

	 
	10.14	 	There are no outstanding written claims against the Seller under any contract or under
section 40, Patents Act 1977 for employee compensation in respect of any Business Intellectual
Property owner by the Seller.

	 
	10.15	 	The Seller has not in the year prior to today’s date carried on the Business under any name
other than its corporate name or Business Name.

	 
	11	 	Tax

	 
	11.1	 	The Seller has complied in all material respects with all statutory provisions, rules,
regulations, orders and directions in relation to the Business concerning VAT, PAYE and
National Insurance contributions including the making on time of accurate returns and payments
and the proper maintenance and preservation of records, and the Seller has not been given any
penalty, notice or warning regarding the same.

	 
	11.2	 	The Seller is not involved in any dispute with HM Revenue and Customs, the [Contributions
Agency] or other appropriate fiscal authority whether in the United Kingdom or elsewhere
concerning any matter affecting or likely to affect either the Business or any of the Assets
to be transferred under this Agreement.

	 
	11.3	 	No circumstances exist whereby any power within section 212, Inheritance Tax Act 1984 could
be exercised in relation to any of the Assets.

	 
	11.4	 	There is no HM Revenue & Customs charge over any of the Assets outstanding for unpaid
inheritance tax as provided by sections 237 and 238, Inheritance Tax Act 1984.

	 
	11.5	 	In respect of the Business all returns and payments for the purposes of VAT referable to
supplies made have been made.

	 
	11.6	 	None of the Assets is subject to the Value Added Tax Capital Goods Scheme provided for in
Part XV of the Value Added Tax Regulations 1995 (SI 1995/2518).

	 
	11.7	 	All VAT payable on the importation of goods, and all excise duties payable to HM Revenue &
Customs payable in respect of the Business Assets including the Stock, have been paid in
full, and none of the Business Assets is liable to confiscation, forfeiture or distress.

 

52

 

	11.8	 	None of the Assets is chargeable assets of a business which, if transferred to a body
corporate treated as a member of a group under section 43, VATA as a going concern, would give
rise to a liability on that body corporate or the representative member of the group of which
that body corporate is a member under section 44, VATA.

	 
	11.9	 	In respect of any Assets which are plant and machinery for the purposes of Part II of the CAA
and which are fixtures (as defined in section 173(1), CAA) at today’s date either:

	 	11.9.1	 	no person has been or will have become entitled to allowances in respect of any
expenditure incurred on the provision of the fixture or,

	 
	 	11.9.2	 	if any person has become so entitled that person has been, is or will be required to
bring the disposal receipts in respect of the fixture into account under section 55,
CAA; or

	 
	 	11.9.3	 	the Consideration will be apportioned for the purposes of CAA so as to attribute a
sum equal to the Seller’s ‘notional written down value’ as described in section 197(2)
CAA to the fixtures.

	11.10	 	HM Revenue and Customs has not agreed to operate any special arrangement (being an
arrangement which is not based on a strict application of the relevant legislation) in
relation to the Business whether in respect of benefits provided to its officers or employees,
the valuation of its stock, the depreciation of its assets or any administrative or other
matter whatsoever.

	 
	11.11	 	All documents in the possession or under the control of the Seller which establish or are
necessary to establish the title of the Seller to the Assets that need a stamp duty have been
duly stamped and any applicable stamp duties or charges in respect of such documents have been
duly accounted for and paid, and no such documents which are outside the United Kingdom would
attract stamp duty if they were brought in to the United Kingdom.

	 
	12	 	Health and Safety

	 
	 	 	Interpretation

	 
	12.1	 	In this paragraph 12:

			
	Health and Safety Laws	 	all applicable primary and subordinate Legislation,
Directives, Approved Codes of Practices including
but without limitation the Fire Precautions Act
1971, The Health and Safety at Work etc Act 1974
and Regulations made pursuant to section 15 of the
Health and Safety at Work Etc Act 1974 concerning
the health and safety of those who work for the
Business, whether as employees or otherwise, visit
the Property or are in anyway affected by the
activities of the Business or by persons working
for the Business.

	12.2	 	So far as the Seller is aware the Business complies with all material conditions,
limitations, obligations, prohibitions and requirements contained in any Health and Safety
Laws and so far as the Seller is aware there are no facts or circumstances which may lead to
any breach of any Health and Safety Laws.

	 
	12.3	 	The Seller has not received any written prohibition or improvement notices from any
enforcement body, including but without limitation the Health and Safety Executive and the
relevant local authority, with regard to breaches of Health and Safety Laws or otherwise in
respect of the Business.

	 
	12.4	 	In the last 12 months there have been no written claims (which remain outstanding),
investigations, proceedings against or threatened against the Seller or any of its directors,
officers or employees in respect of accidents, injuries, illness, disease or any other harm to
the health and safety of employees, contractors or any other persons caused by breaches of
Health and Safety Laws by the Seller in carrying on the Business and so far as the Seller is
aware there are no facts or circumstances which may lead to any such claims, investigations or
proceedings.

 

53

 

	13	 	Property

	 
	13.1	 	In relation to the Property, the rents have been paid and in all material respects all
covenants, restrictions, stipulations, obligations and undertakings have been performed and
the last demand (or receipt for rent if issued) were unqualified and the Lease is valid and in
full force and no notice of any breach has been received by either the Seller.

	 
	13.2	 	The Property is free from:

	 	13.2.1	 	any mortgage, debenture, charge (whether legal or equitable and whether fixed or
floating), rent, charge, lien or other right in the nature of security; and

	 
	 	13.2.2	 	any agreement for sale, estate contract, option, right of pre-emption or right of
first refusal,

	 	 	and there is no agreement or commitment to give or create any of them.

	 
	13.3	 	The Property is not subject to the payment of any outgoings other than non-domestic local
business rates and water and sewerage charges, and all outgoings have been paid when due and
none are disputed.

	 
	13.4	 	The Seller has complied with all applicable statutory and bye-law requirements, and all
regulations, rules and delegated legislation, relating to the Property and its current use,
including without limitation all requirements under the Public Health Acts, the Occupiers
Liability Act 1957, the Offices, Shops and Railway Premises Act 1963, the Occupiers Liability
Act 1984, the Construction (Design and Management) Regulations 1994, the Disability
Discrimination Act 1995, the Construction (Design and Management) Regulations 2007, and all
regulations, rules and delegated legislation and the Vendor has maintained all necessary fire
certificates and certificates in relation to electricity and gas.

	 
	14	 	The Property is in a condition that is fit for its current use.

	 
	15	 	There are no development works, redevelopment works or fitting-out works outstanding in
respect of the Property.

	 
	16	 	The Property has not suffered from any:

	 	16.1.1	 	flooding; or

	 
	 	16.1.2	 	subsidence; or

	 
	 	16.1.3	 	heave; or

	 
	 	16.1.4	 	landslip; or

	 
	 	16.1.5	 	mining activities; or

	 
	 	16.1.6	 	structural defects; or

	 
	 	16.1.7	 	defects in the drains and services from time to time serving the Property; or

	 
	 	16.1.8	 	dry rot, wet rot, rising damp or any infestation.

	17	 	The Seller has not received any adverse report from any engineer, surveyor or other
professional relating to the Property and is not aware of any predecessor in title having done
so.

	 
	18	 	No notices, complaints or requirements have been issued or made (whether formally or
informally) by any competent authority or undertaking exercising statutory or delegated powers
in relation to the Property, the current use of the Property or any machinery, plant or
equipment in it, and the Seller is not aware of any matter which could lead to any such
notice, complaint or requirement being issued or made.

	 
	19	 	There exists no dispute between the Seller and the owner or occupier of any other premises
adjacent to or neighbouring the Property and the Seller does not expect, and is not aware of
any circumstances that may give rise to, any such dispute after the date of this Agreement.

 

54

 

	 
	20	 	McMurdo Limited

	 
	20.1	 	The warranties set out in the McMurdo Ltd Sale and Purchase Agreement are hereby repeated.

	 
	21	 	Legal Opinion

	 
	21.1	 	The Legal Opinion of DC is true and accurate.

 

55

 

SCHEDULE 3

Seller Protection Provisions

	1	 	Definitions

	 
	1.1	 	In this Schedule:

	 	 	 
	Claim

	 	means any claim for breach of any of the Warranties;
	 
	 	 
	Event

	 	means any event, act, transaction, arrangement, default or
omission including, without limitation, the receipt or
accrual of any income or gains or of any distribution,
failure to distribute, acquisition, disposal, transfer,
payment, loan or advance including, without prejudice to the
generality of the foregoing, the sale and purchase of the
Business and the Assets pursuant to this Agreement;
	 
	 	 
	Taxation Warranties

	 	means the warranties contained in paragraph 11 of Schedule 2.

	2	 	Remedies

	 
	2.1	 	Subject to clause 11.1.2 of this Agreement a breach of any of the Warranties will give rise
only to an action by the Buyer for damages and will not entitle the Buyer to terminate,
rescind or repudiate this Agreement.

	 
	2.2	 	Where the matter or default giving rise to a Claim is capable of remedy, that Claim will only
entitle the Buyer to damages or other compensation to the extent that the relevant matter or
default is not remedied to the reasonable satisfaction of the Buyer within 30 days after the
date on which notice is served pursuant to paragraph 3 below.

	 
	3	 	Time

	 
	3.1	 	The Seller will have no liability for any Claim unless notice in writing of the Claim (giving
reasonable particulars of the nature of the Claim and amount claimed together with an estimate
of the liability) has been given to the Seller:

	 	3.1.1	 	on or before the expiry of the seventh anniversary of Completion Date in
respect of any Claim under the Taxation Warranties; or

	 
	 	3.1.2	 	on or before the expiry of the period of 18 months from the Completion Date
in respect of any other Claim.

	3.2	 	The Seller or the Buyer or OROLIA (if applicable) will have no liability for any indemnity
claim pursuant to this Agreement or any of the Transaction Documents unless notice in writing
of the indemnity claim (giving reasonable particulars of the nature of the indemnity claim and
the amount claimed together with an estimate of the liability) has been given to the Seller
(in respect of a claim by the Buyer or OROLIA) or the Buyer (in respect of a claim by the
Seller):

	 	3.2.1	 	on or before the expiry of the seventh anniversary of Completion in respect
Date of any indemnity claim relating to Tax; or

	 
	 	3.2.2	 	on or before the expiry of third anniversary of Completion Date in respect
of any other indemnity claim.

	3.3	 	Any Claim of which notice has been given in accordance with paragraph 3.1 of this Schedule is
deemed to have been withdrawn and fully barred and unenforceable on the expiry of six months
commencing on the date on which the relevant notice of the Claim was given to the Seller,
unless proceedings in respect of the Claim have already been issued and served on the Seller.

	 
	4	 	Amount

	 
	4.1	 	The Seller will have no liability whatsoever in respect of any individual Claim unless the
amount that would otherwise be recoverable from the Seller in respect of that
Claim (or series of Claims arising from the same fact, matter or circumstances) exceeds
US$15,000 (excluding costs and interest).

 

56

 

	4.2	 	The Seller will have no liability in respect of any individual Claim unless and until the
amount that would otherwise be recoverable from the Seller in respect of that Claim, when
aggregated with any other amounts so recoverable in respect of other Claims (excluding any
amounts in respect of a Claim for which the Seller has no liability by virtue of paragraph
4.1) exceeds US$ 250,000 and in the event that the aggregate amount exceeds US$ 250,000 the
Seller will be liable for the entire amount not only the excess over US$ 250,000.

	4.3	 	The aggregate liability of the Seller for Claims and indemnity claims made against the Seller
pursuant to this Agreement or any of the Transaction Documents shall under no circumstances
exceed an amount equal to the Initial Consideration.

	 
	5	 	Reduction of Consideration

	 
	5.1	 	Any payment made by the Seller in respect of any Claim will be deemed to be a reduction in
the Consideration.

	 
	6	 	Disclosure

	 
	6.1	 	The Seller will have no liability in respect of any Claim to the extent that the Event, fact
or circumstance which might result in a Claim or a possible Claim is disclosed fairly and
accurately in the Disclosure Letter or in this Agreement or in any agreement or arrangement
otherwise entered into between the Seller and the Buyer.

	 
	7	 	Changes in the law

	 
	7.1	 	The Seller will have no liability whatsoever in respect of any Claim to the extent that the
Claim would not have arisen but for the passing of or any change in after the date of this
Agreement, any law, rule, regulation, interpretation of the law or administrative practice of
any government, governmental department, agency or regulatory body or any increase in the
rates of Taxation or any imposition of new Taxation in any such case not in force at the
Completion Date.

	 
	8	 	Exclusion of certain Claims

	 
	8.1	 	The Buyer may not make any Claim against the Seller and the Seller will have no liability to
the Buyer under this Agreement:

	 	8.1.1	 	to the extent that the Claim arises or is increased out of:

	 	(a)	 	any changes in accounting policy or practice of the Buyer
introduced or having effect after Completion; or

	 
	 	(b)	 	any voluntary act or omission of the Buyer after Completion
done or suffered outside the ordinary course of business and other than
pursuant to a legally binding obligation entered into by the Seller before
Completion or in order to comply with any legal requirement binding on the
Buyer; or

	 
	 	(c)	 	any act, omission or transaction done, made or carried out
by or on behalf of the Seller at the request; or

	 	8.1.2	 	to the extent that the Claim arises because of:

	 	(a)	 	any legislation not in force at today’s date or any change
of law, judgment delivered or administrative practice having retrospective
effect that comes into force after today’s date; or

	 
	 	(b)	 	that Claim relates to any liability which is contingent
only until it becomes an actual liability, but this paragraph 8.1.2 will not
operate to avoid a Claim made in respect of a contingent liability in
accordance with paragraph 3 above.

	9	 	Satisfaction by other persons/means

	 
	9.1	 	The Seller will have no liability for any Claim to the extent that any loss occasioned to the
Buyer or to the Business is covered by a right to make recovery or claim
indemnity or by a policy of insurance in force and payment is made under such indemnity or
policy.

 

57

 

	9.2	 	If at any time the Buyer becomes entitled to recover from some other person any sum in
respect of any Claim then the Buyer will subject to a full indemnity from the Seller:-

	 	9.2.1	 	undertake all reasonable steps necessary to enforce such recovery; and

	 
	 	9.2.2	 	promptly supply all information which relates to such recovery to the Seller
including details of any steps taken to enforce such recovery and copies of all
correspondence and documents relating to the same.

	9.3	 	If the Buyer recovers from a third party an amount which is referable to an Event giving rise
to the Claim then:

	 	9.3.1	 	the sum recovered will be set-off against the Seller’s liability for that
Claim

	 
	 	9.3.2	 	if amounts previously paid by the Seller in respect of the Claim is more
than the sum recovered, the Buyer will immediately pay the Seller the sum recovered;
and

	 
	 	9.3.3	 	if amounts previously paid by the Seller in respect of the Claim is less
than or equal to the sum recovered the Buyer will immediately pay the Seller an amount
equal to the amount paid by the Seller.

	 	 	For the purposes of this paragraph 9.3 the “sum recovered” means an amount equal to the
amount recovered from the third party plus any repayment supplement in respect of the
amount recovered from the third party under section 825 ICTA plus any interest in respect
of the amount recovered from the third party less all reasonable costs and expenses
incurred by the Buyer in recovering the amount from the third party and any tax payable by
the Buyer on any sum so recovered.

	 
	10	 	Procedure for claims

	 
	10.1	 	If the Buyer becomes aware of any matter which might give rise to a Claim, the following
provisions will apply:-

	 	10.1.1	 	the Buyer will as soon as reasonably practical give notice to the Seller of the
Event and will consult with the Seller in respect of the Event;

	 
	 	10.1.2	 	the Buyer will provide to the Seller and to the Seller’s professional advisers
reasonable access to premises and personnel and to any relevant assets, documents and
records within their power, possession or control for the purpose of investigating the
event and enabling the Seller to take such action as is referred to in paragraph
10.1.4;

	 
	 	10.1.3	 	the Seller (at its own expense) will be entitled to take copies of any documents or
records and photograph any premises or assets as referred to in paragraph 10.1.2;

	 
	 	10.1.4	 	the Buyer will:-

	 	(a)	 	take such action and institute such proceedings and give
such information and assistance as the Seller may request to dispute, resist,
appeal, compromise, defend, remedy or mitigate the Event or enforce against
any person any rights of the Buyer in relation to the matter; and

	 
	 	(b)	 	in connection with any proceedings related to the Event use
professional advisers nominated by the Seller and, if the Seller so requests,
allow the Seller the exclusive conduct of the proceedings provided that such
action will not in the Buyer’s reasonable opinion, be detrimental to the
Business or its reputation

	 	 	 	and in each case on the basis that the Seller will indemnify the Buyer for all
reasonable costs and expenses incurred as a result of any request or nomination
by the Seller.

 

58

 

	 	10.1.5	 	If the Seller and the Buyer agree on the amount to be paid in respect of the Claim,
they will jointly instruct the Escrow Agent to pay to the Buyer the agreed amount.

	 	10.1.6	 	If the Seller and the Buyer disagree on the amount to be paid in respect of the
Claim, the matter will be settled according to clause 34 of this Agreement. The
decision of the Court will be forwarded by either the Seller or the Buyer to the
Escrow Agent and the Escrow Agent will take the appropriate measures.

	11	 	Fraud, etc

	 
	11.1	 	The provisions of this Schedule 3 will not apply in the case of any fraud, wilful
non-disclosure or misconduct by or on behalf of the Seller.

	 
	12	 	Mitigation

	 
	12.1	 	Nothing in this Agreement affects the duty at law of the Buyer to mitigate its loss.

 

59

 

SCHEDULE 4

The Employees

Attached

 

60

 

SCHEDULE 5

The Customer Contracts

Attached

 

63

 

SCHEDULE 6

The Supplier Contracts

Attached

 

64

 

SCHEDULE 7

Products

	1	 	C1 SVDR Capsule

	 
	2	 	Smartfind E5 EPIRB Auto

	 
	3	 	Smartfind E5 EPIRB Manual

	 
	4	 	Smartfind G5 EPIRB Auto

	 
	5	 	Smartfind G5 EPIRB Manual

	 
	6	 	FastFind

	 
	7	 	FastFind Plus

	 
	8	 	FastFind Max

	 
	9	 	FastFind Max G

	 
	10	 	FastFind 200/201

	 
	11	 	FastFind 210/211

	 
	12	 	S4 SART

	 
	13	 	Programming pen

	 
	14	 	MOB Guardian (excluding IP associated with the RNLI Contract)

	 
	15	 	G4 EPIRB GPS Auto

	 
	16	 	G4 EPIRB GPS Manual

	 
	17	 	Precision EPIRB GPS Auto

	 
	18	 	Precision EPIRB GPS Manual

	 
	19	 	E3 EPIRB Auto

	 
	20	 	E3 EPIRB Manual

	 
	21	 	SOS EPIRB Auto

	 
	22	 	SOS EPIRB Manual

	 
	23	 	HRU Kit

	 
	24	 	A5 SmartFind EPIRB Manual

	 
	25	 	Smartfind S5AIS SART

	 
	26	 	R1

	 
	27	 	R2

	 
	28	 	SART Batteries

	 
	29	 	EPIRB Batteries

	 
	30	 	NAV 7

	 
	31	 	NAV Accessories

	 
	32	 	Davis

	 
	33	 	SEPIRB

	 
	34	 	PLB Batteries

	 
	35	 	AMS 639 Buoy

 

65

 

SCHEDULE 8

Registered Intellectual Property

Registered trade marks

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Application /	 	 	 	 
	 	 	 	 	 	 	Registration	 	 	 	 
	Trade Mark	 	Jurisdiction	 	Number	 	 	Classes	 
	FASTFIND
	 	US	 	2934775	 	 	Class 9
	SMARTFIND
	 	US	 	3345623	 	 	Class 9
	SMARTFIND
	 	European Community	 	E4739256	 	 	Classes 9 & 41
	McMURDO
	 	European Community	 	E3250347	 	 	Classes 9, 13 & 41

Registered Patent

Patent number GB2334486

Full title: Release unit

Proprietor: Signature Industries Limited

Registered Domain Names

406mhz.co.uk

davisweather.co.uk

fastfindpersonallocatorbeacon.com

fastfindplb.com

mcmurdo.biz

mcmurdo.co.uk

mcmurdomarine.com

 

66

 

SCHEDULE 9

Part 1

Escrow Agreement

This Agreement is dated 2009

Parties

	(2)	 	SIGNATURE INDUSTRIES Limited, a company registered in England (registered number 2800561)
whose registered office is at Tom Cribb Road, Thamesmead, London SE28 0BH (the “Seller”);

	(3)	 	MCMURDO LIMITED, a company registered in England (registered number 6952856 whose registered
office is at Silver Point, Airport Service Road, Portsmouth PO3 5PB (the “Buyer” or “McMurdo
Limited”);

	(4)	 	Digital Angel Corporation, a company incorporated under the laws of the state of Delaware,
whose registered office is 490 Villaume Avenue, South St, Paul MN 55075 -2433 USA (“DC”); and

	(5)	 	OROLIA SA, a company incorporated under the laws of France, whose registered office is at 3
Avenue Du Canada, 91974 Les Ulis cedex, France (“OROLIA”).

Whereas

	(A)	 	This agreement is supplemental to an Agreement dated 2 November 2009 made between the Seller,
McMurdo Limited, OROLIA SA and Digital Angel Corporation (the Business Sale Agreement) whereby
the Buyer agreed to purchase certain of the assets of the Seller.

	(B)	 	Clause 3.2.2 and clause 8.1.5(i) of the Business Sale Agreement provides that on Completion
the Seller and the Buyer shall establish an Escrow Agreement in respect of the Retention.

	(C)	 	The Parties hereto wish to set out the terms and conditions of the establishment, maintenance
and operation of the Escrow Agreement.

It is agreed as follows

	1.	 	In this Agreement, save as otherwise defined or as the context may require, words and
expressions in the Business Sale Agreement shall have the same meaning in this Agreement.

1 Retention Account

	1.1	 	On Completion:

	 	(a)	 	OROLIA shall transfer the Retention into the Escrow Account pursuant to
clause 8.1. 5(i) of the Business Sale Agreement by electronic means;

	 
	 	(b)	 	the Seller and the Buyer shall jointly sign and deliver the Instruction
Letter to the Solicitors.

	1.2	 	Each of the Buyer and the Seller undertake to each other to hold the Retention on trust for
each other in accordance with the terms of this Schedule 9.

1.3 The following provisions shall apply in respect of the Escrow Account:

	 	(a)	 	all interest earned in respect of the Retention shall be credited to the
Escrow Account;

 

67

 

	 	(b)	 	no other credit shall be made to the Escrow Account without the written
consent of the Solicitors;

	 
	 	(c)	 	no withdrawal shall be made from the Escrow Account except in accordance with
the Instruction Letter or as may otherwise be ordered by a court of competent
jurisdiction;

	 
	 	(d)	 	neither the Buyer nor the Seller shall have any entitlement to interest until
payment of the principal to which it relates.

2 Relevant Claims

	2.1	 	After the Transfer Date, the Buyer shall notify the Seller monthly in writing all the
Relevant Claims having arisen during the prior month. If there is a Due Amount in respect of a
Relevant Claim, the Seller and the Buyer shall, unless such Due Amount in respect of a
Relevant Claim has been paid to the Buyer for the Relevant Claim(s) in full, instruct the
Escrow Agents to pay the Buyer the Due Amount in respect of the Relevant Claim(s) out of the
Escrow Account together with interest (less tax if deduction of tax is required) earned on
that sum in the Escrow Account from the Transfer Date to the date of actual payment in
accordance with this clause and for the avoidance of doubt and without prejudice to clause 2.5
the Due Amount in respect of the Relevant Claim(s) to be paid out of the Escrow Account shall
not in any circumstance exceed the General Retention.

	2.2	 	If any Relevant Claim has been notified in writing by the Buyer to the Seller on or before
the Anniversary Date but is not settled as defined at clause 2.6 (“Settled”) on or prior to
the Anniversary Date, the Buyer shall be entitled to retain from the Retention such amount as
is equal to the amount of the estimated liability of the Relevant Claim(s) (as determined by
the Buyer acting in good faith).

	2.3	 	In the event of a dispute as to the amount of the estimated liability of the Relevant
Claim(s) under clause 2.2, the Seller shall notify the Buyer in writing of such dispute
(giving reasonable particulars and supporting evidence of its valuation) and the Buyer and the
Seller shall acting reasonably attempt to resolve their dispute within 10 Business Days of the
receipt of such notice. If the dispute cannot be resolved amicably through ordinary
negotiations by appropriate representatives of the Seller and the Buyer, the matter will be
referred in writing by either the Seller or the Buyer to the Chief Executive Officers (or
their equivalent) of OROLIA and DC. The Chief Executive Officers will meet in order to
attempt to resolve the matter by negotiation, within 10 Business Days of them being notified
in writing. The Chief Executive Officers will notify in writing both the Buyer and the Seller
of the result of their negotiations (Chief Officers’ Notice).

	2.4	 	If the Chief Officers’ Notice sets out that the meeting referred to in clause 2.3 failed to
resolve the issue, either the Seller or the Buyer, on giving written notice to the other, may
declare that they are in dispute in which case the provisions of clause 2.6 will apply. If the
Chief Officers’ Notice set outs that the meeting successfully resolved the issue, then the
Seller or the Buyer shall comply with the terms of the arrangements set out in the Chief
Officers’ Notice and proceed to clause 2.5.

2.5 Without prejudice to clause 2.8, and subject to as otherwise provided by this clause 2.5:

	 	(a)	 	if no Relevant Claim has been notified in writing by the Buyer to the Seller
under this Agreement by the Anniversary Date; or

	 
	 	(b)	 	a settlement of all outstanding Relevant Claims notified in accordance with
clauses 2.1 to 2.4 has been made; or

	 
	 	(c)	 	a retention in respect of any outstanding Relevant Claim in accordance with
clause 2.2 above has been made;

the Seller and the Buyer shall, promptly (but in any event by no later than 5 Business
Days following the Anniversary Date, the resolution of the dispute pursuant to clauses 2.3
and 2.4 or settlement of all outstanding Relevant Claims pursuant to clause 2.6 (as
appropriate)) instruct the Escrow Agents to pay the balance standing to the credit of
the Escrow Account (together with any interest which has accrued on the amount so paid less
any applicable bank charges) to the Seller.

 

68

 

	2.6	 	For the purposes of this clause 2 a Relevant Claim shall be deemed Settled if:-

	 	(a)	 	the Seller and the Buyer so agree in writing having followed if required the
procedure set out in clauses 2.3 and 2.4 ; or

	 
	 	(b)	 	failing such resolution of their dispute pursuant to clauses 2.3 and 2.4, the
Relevant Claim has been determined by a court or tribunal of competent jurisdiction
from which there is no right of appeal or from whose judgment the Buyer or the Seller
(as the case may be) is debarred by passage of time or otherwise from making an
appeal.

	2.7	 	The General Retention shall not be regarded as imposing any limit on the amount of any
Relevant Claims under this Agreement or under any other Transaction Documents. If any part of
the Relevant Claim is not satisfied in full out of the Retention, the balance shall remain
fully enforceable against the Seller.

	2.8	 	The General Retention shall not be released at the Anniversary Date if there are still any
unpaid but due sums for services rendered by the Buyer or OROLIA SA under the Business Sale
Agreement or the Transitional Services Agreement or if pursuant to clause 16.5 of the Business
Sale Agreement, the Due Creditors remain unpaid. In such circumstances and without prejudice
to the Buyer’s rights and remedies under the Business Sale Agreement or at law, the Buyer
shall on notice to the Escrow Agents be entitled to set off such unpaid sums against the
General Retention.

3 Insolvency

	3.1	 	On the occurrence of an Insolvency Event in respect of either the Buyer or the Seller the
Buyer or the Seller (as the case may be) shall be deemed to have assigned all of its rights
under this Schedule 9 to OROLIA or DC (as appropriate) and (as appropriate)

	 	3.1.1	 	DC shall perform and discharge all obligations of the Seller in the manner
prescribed in this Agreement and the Business Sale Agreement;

	 
	 	3.1.2	 	OROLIA shall perform and discharge all obligations of the Buyer in the
manner prescribed in this Agreement and the Business Sale Agreement.

	3.2	 	On the occurrence of an Insolvency Event in respect of either the Buyer or the Seller, the
Buyer or the Seller shall notify all the parties to this Agreement and the Escrow Agents.

	3.3	 	Nothing in this Agreement shall prejudice the Buyer’s remedies under this Agreement, the
Business Sale Agreement or any Transaction Document or at law. If any part of the Relevant
Claim (subject always to clause 3.8) is not satisfied in full out of the Retention, the
balance shall remain fully enforceable against the Seller; and nothing in this Escrow
Agreement shall prejudice, limit or otherwise affect any right, including the right to make
any claim, or remedy which the Buyer may have from time to time against the Seller or DC
either under this Agreement or under any other Transaction Document.

 

69

 

In witness whereof this Agreement has been executed as a Deed on the date stated at the
beginning of this Agreement.

	 	 	 	 	 
	Executed by as a Deed by

Signature Industries Limited acting by or if by one

	 	/s/ Parke Hess
 

Director
	 	 
	director in the presence of:
	 	 	 	 
	Witness

	 	Director/Secretary	 	 
	Name — Geraldine Fabre
	 	 	 	 
	Address — 14 New Street, London
	 	 	 	 
	EC2M 4HE
	 	 	 	 
	 
	 	 	 	 
	Executed by as a Deed by

McMurdo Limited acting by or if by one director

	 	/s/ Jean Yves Courtois
 

Director
	 	 
	in the presence of: 

Witness

	 	/s/ Christophe Francois
 

Deputy CEO
	 	 
	Name
	 	 	 	 
	Address
	 	 	 	 
	 
	 	 	 	 
	Executed by as a Deed by

Digital Angel Corporation acting by or if by one

	 	/s/ Parke Hess
 

Authorised Signatory
	 	 
	director in the presence of:
	 	 	 	 
	Witness

	 	Authorised Signatory	 	 
	Name — Geraldine Fabre
	 	 	 	 
	Address — 14 New Street, London
	 	 	 	 
	EC2M 4HE
	 	 	 	 
	 
	 	 	 	 
	Executed by as a Deed by

OROLIA SA acting by

	 	/s/ Jean Yves Courtois
 

Director
	 	 
	 
	 	 	 	 
	 

	 	/s/ Christophe Francois
 

Deputy CEO
	 	 

 

70

 

Part 2

Instruction Letter

Pritchard Englefield Solicitors

New Street

London

EC2M 4EH

Kimbells LLP

Power House

Harrison Close

Milton Keynes

MK5 8PA

2009

Dear Sirs

	1	 	Purpose

This is the Escrow Letter referred to in the Escrow Agreement and sets out the terms on
which you have agreed to act as our Escrow Agents in relation to the Escrow Account.

	2	 	Interpretation

	 
	 	 	The terms defined in the Escrow Agreement shall have the same meaning when used in this letter.

	3	 	Deposit

	 
	 	 	We jointly and irrevocably instruct you to:

	 	3.1.1	 	open immediately a separately designated interest-bearing instant access
deposit account with the Escrow Bank in your joint names on the terms and conditions
of the Bank’s Mandate Letters or using the Request Letter attached to this letter; and

	 
	 	3.1.2	 	subject to receipt by the Escrow Bank from the Buyer of the Retention in
accordance with the Business Sale Agreement, to invest the Retention in the Escrow
Account unless we jointly instruct you otherwise in writing

	 
	 	3.1.3	 	hold the Retention to the credit of the Escrow Account to our joint order
(less any amount debited by the Escrow Bank in respect of its fees and charges).

	4	 	Interest

	 
	 	 	All interest that accrues from time to time in respect of the Retention shall be added to
the Retention and shall be deemed to form part of it for the purposes of this letter.

	5	 	Operation Of The Escrow Account

	 
	5.1	 	You agree to hold the Retention as escrow agents on our behalf and to accept payments in,
make payments from, and otherwise operate the Escrow Account in accordance with our joint
written instructions given in accordance with this letter
until the Anniversary Date or until settlement of all Relevant Claims in accordance with
Schedule 9 (as the case may be).

 

71

 

	5.2	 	The Retention (or any amount left of the Retention following a Relevant Claim) shall be
retained by you in the Escrow Account until you receive instructions given by us pursuant to
this letter, whether for the purpose of making payments from the Escrow Account or otherwise,
shall be given jointly by us to both of you in writing and signed by us, or on our behalf, by
the signatories whose names and specimen signatures are set out in the Schedule.

	5.3	 	In making any payment out of the Escrow Account, you may withhold or deduct any sum which you
are obliged by law to so withhold or deduct (whether in respect of liability to taxation or
otherwise). We hereby authorise you to pay all bank charges, taxation and other liabilities
referable to the operation of the Escrow Account. We undertake to indemnify each of you, and
to keep you fully and effectively indemnified against all such charges, taxation and
liabilities referable to the operation of the Escrow Account.

	5.4	 	Any payment from the Escrow Account shall be made by you as soon as is reasonably
practicable, and in any event no later than 10 Business Days, after receiving the relevant
instructions.

	5.5	 	You may (without checking the authority of such signatory) rely on and shall be protected in
acting or refraining from acting in accordance with any written notice, instruction or request
furnished to by the Buyer and the Seller.

	5.6	 	Any instructions from us may consist of separate documents in the same form, each signed by
or on behalf of the Seller and the Purchaser or following any assignment as envisaged by
clause 4 of the Escrow Agreement their Guarantors where appropriate.

	6	 	Liability Of The Escrow Agents

	6.1	 	Each of you undertakes to perform only such duties as are specifically set out in this
letter. In connection with such duties, neither of you shall be liable for any loss, damages,
charge, costs or expenses occurring as a result of any mistake of fact, error of judgment or
act, mistake or omission by you of any kind in connection with the operation or failure or
delay in the operation of the Escrow Agreement unless caused by wilful misconduct or gross
negligence, and you shall both be entitled to rely on any written notice, instrument or
signature believed by you to be genuine and believed to have been signed or presented by the
proper party or parties duly authorised to do so.

	6.2	 	Your obligations and duties as joint holders of the Escrow Account are several and will be
fully discharged by giving the Escrow Bank instructions in accordance with this letter.

	6.3	 	We jointly and severally agree to indemnify each of you and hold you both harmless against
any and all actions, proceedings, claims, demands liabilities (including, without limitation,
the Escrow Bank’s charges incurred in operating the Escrow Account), costs and expenses which
either of you may suffer or incur in connection with the performance of your obligations under
this letter, except for liabilities incurred by either of you resulting from your wilful
misconduct or gross negligence.

 

72

 

	7	 	Miscellaneous

	7.1	 	This letter is binding on, shall continue for the benefit of and be enforceable by, your and
our respective successors and assigns. The provisions of this letter shall apply
to and ensure for the benefit of the partners for the time being of each of the firms
respectively to whom it is addressed and to the partners of any firm resulting from any
reconstitution of either firm and reference to “partners” or “firms” shall include
reference to such partners or firms.

	7.2	 	No amendment to this letter shall be effective unless made in writing and signed by, or on
behalf of, you and us (or the relevant Guarantor of either the Seller or the Buyer).

	7.3	 	This letter may be executed in several counterparts, each of which when executed shall be
deemed an original but all of which together shall constitute one and the same instrument.

7.4 We declare that the instructions given in this letter are irrevocable.

	7.5	 	This letter and any disputes or claims arising out of or in connection with its subject
matter or formation (including non-contractual disputes and claims) are governed by and
construed in accordance with the law of England.

	7.6	 	The courts of England have exclusive jurisdiction to settle any dispute or claim that arises
out of or in connection with this Agreement or its subject matter or formation (including
non-contractual disputes or claims).

Please confirm that you agree to accept our instructions and to act as our escrow agents on
the terms set out in this letter by signing and returning the duplicate copies of this
letter enclosed.

Yours faithfully

	 	 
	On behalf of the Buyer	 

Yours faithfully

	 	 
	On behalf of the Seller	 

 

73

 

REQUEST LETTER

To: [ESCROW BANK]

Date

We, the undersigned, have this day request you to open a separately designated interest-bearing
instant access deposit account such account to be designated [     ] subject to the
following conditions:-

	1.	 	Interest is to be credited to the account gross.

	2.	 	Withdrawals at any time or times from that deposit account are to be made in accordance with
written instructions addressed to you, provided that they are signed on behalf of each of us
by one of the authorized signatories listed below.

	3.	 	You are entitled to deduct your reasonable and proper charges from the amount for the time
being standing to the credit of the deposit account.

	4.	 	This authority shall remain in force until revoked notwithstanding any change in the
constitution or name of the Firms and shall apply notwithstanding any change in the membership
of the Firms by death, bankruptcy, retirement or otherwise, or the admission of new partner or
partners.

	5.	 	Statement shall be supplied monthly to each of Pritchard Englefield Solicitors and Kimbells
LLP (for the attention of Geraldine Fabre and Anthony Harris at Pritchard Englefield
Solicitors and Jonathan Hambleton at Kimbells LLP.

List of Authorised Signatories

	 	 	 	 	 
	NAME	 	OFFICE HELD	 	SIGNATURE
	Anthony Harris

	 	Partner	 	 
	David Glass

	 	Partner	 	 
	Bryan Bletso

	 	Partner	 	 
	Geraldine Fabre

	 	Partner	 	 
	For Pritchard Englefield Solicitors
	 
	 	 	 	 
	Jonathan Hambleton

	 	Partner	 	 
	 
	 	 	 	 
	For Kimbells LLP
	 	 	 	 

 

74

 

SCHEDULE 10

The Plant

 

75

 

SCHEDULE 11

Leasing/Hire Agreements

Part 1: Vehicle Leases

	1	 	 Automotive Leasing Agreements

	 	(a)	 	Automotive Leasing — Car Registration AP06 PZL dated 1 August 2006

	 
	 	(b)	 	Fleethire Contract — Car Registration MT57 CMU dated 8 January 2008

	 
	 	(c)	 	Honda Finance — Car Registration EX57 VCP confirmation dated 3 August 2007

	 
	 	(d)	 	Arval Contract — Car Registration FY57 GVX dated 12 August 2007

	 
	 	(e)	 	Audi Finance — Car Registration GK08 UNE undated

	 
	 	(f)	 	Godfrey Davis Contract — Car Registration SL08 ENP undated

	 
	 	(g)	 	RCI Finance — Car Registration YE58 JCZ dated 4 December 2008

	 
	 	(h)	 	Fleethire Contract — Car Registration BN08 JYT start date 12 March 2008

Part 2: Other Leases

	2	 	Hire Agreement between Canotec Ltd and McMurdo Ltd regarding Canon copiers dated 9 November
2004

	3	 	Hire Agreement for franking machine between Vendor and Pitney Bowes dated 26 December 2007

 

76

 

SCHEDULE 12

Part (1)

Completion Statement

	 	 	Instructions

	 
	1	 	Immediately prior to (and in any event 7 days before Completion) the Seller will prepare the
Completion Statement.

	 	 	Content

	 
	2	 	Paragraphs 3 to 7 of this Part of this Schedule apply to the content of the Completion Statement.

	3	 	The Completion Statement will consist of the statement of the Initial Stock Value and the
Actual Stock Value.

	4	 	Subject to paragraph 5 of Part 1 of this Schedule which will take priority over the general
requirements of this paragraph 4 the Buyer will prepare the Completion Statement on the
following basis:

	 	4.1	 	so far as relevant in ascertaining the matters which are to be stated in it,
under the historical cost convention, in accordance with accounting principles and
practices generally accepted in the UK in accordance with Companies Act 2006 as it
applies to statutory accounts and all applicable statements of standard accounting
practices;

	 
	 	4.2	 	in accordance with the accounting policies and practices used in the
preparation of the Accounts.

	 	 	Accounting policies

	 
	5	 	In preparing the Completion Statement:

	 	5.1	 	Stock will be determined in accordance with paragraph 6 of this Part of this Schedule.

	 	 	Stock valuation

	 
	6	 	For the purposes of the preparation of the Completion Statement, the value of Stock will be
ascertained as follows:

	 	6.1	 	the Seller, OROLIA and the Buyer will cause a stocktaking of all the Stock to
be made seven days before the Completion Date;

	 
	 	6.2	 	unless otherwise agreed by the Seller and the Buyer, this stocktaking will
consist of a reconciliation of the relevant books and records (including stock
adjustments for obsolete and quarantine, reworked and to be reworked, stock, stock
provisions, and any other adjustments and/or provisions) with a physical check of the
amount, quality and condition of all Stock situated at the Property at the Completion
Date and an inspection of the relevant books and records and contractual documentation
of the Business for all Stock not so situated;

	 
	 	6.3	 	the stocktaking will also consist of a verification of the values attributed
to the top 50 items of Stock by value included in relevant books and records
(including stock adjustments for obsolete and quarantine, reworked and to be reworked
stock, stock provisions, and any other adjustments and/or provisions);

	 
	 	6.4	 	any items of damaged, obsolete, slow moving, unsaleable, unusable, reworked,
to be reworked, in quarantine or unmarketable Stock or work in progress shall have no
value and Stock more than 12 months old shall be regarded as obsolete and have no
value;

	 
	 	6.5	 	for the avoidance of doubt Chemring Stock shall be disregarded as shall any
Stock or work in progress relating to the MOB Guardian contract;

 

77

 

	 	6.6	 	any Stock which comprises of finished products or parts in relation to the
support of obsolete products previously supplied to any customer shall be disregarded;

	 
	 	6.7	 	when this stocktaking has been completed and valued in accordance with
paragraph 6 of this Schedule and such value shall be included in the Completion
Statement provided always that if the verification referred to in paragraph 6.3 above
reveals factual errors, such errors shall be corrected in the valuation of Stock for
the purposes of the Actual Stock Value;

	 
	 	6.8	 	the value of the Stock shall be determined in pounds sterling (£) and then
converted into US Dollars (US$) and the amount shall be paid in US dollars (US$).

	 	 	Format

	 
	7	 	The Completion Statement and shall be set out in the form of the pro forma Completion
Statement which is at Part 2 of this Schedule.

	 
	 	 	Preparation

	8	 	The Completion Statement will be delivered to OROLIA by the Seller prior to Completion and,
in any event, not later than 30 Business Days after Completion. Before delivery, OROLIA and
the Seller will so far as practicable consult with each other with a view to reducing the
potential areas of future disagreement.

	9	 	In order to enable OROLIA and the Seller to review the Completion Statement, the Buyer and
the Seller will keep up to date and make available to the other, its books and records
relating to the Business and the stock take during normal office hours and co-operate with
them with regard to the preparation and review of the Completion Statement.

	10	 	If OROLIA does not within 5 Business days of receiving the Completion Statement give written
notice to the Seller that it disagrees with the Completion Statement or any item in them, this
notice stating the reasons for the disagreement in reasonable detail, (Objection Notice), the
Completion Statement will be final and binding on the Parties. If OROLIA gives a valid
Objection Notice within the 5 Business Day period, OROLIA and the Seller will attempt in good
faith to reach agreement in respect of it and, if they are unable to do so before the Long
Stop Date the parties shall proceed to Completion and an adjustment of the Purchase Price
shall only made when the Completion Statement is agreed or determined in accordance with the
provisions below.

	11	 	In the event OROLIA and the Seller are unable to agree the Completion Statement, either such
Party may refer the matter to an independent accountant to be agreed by such Parties or,
failing agreement within 5 Business Days, to be appointed by the President of the Institute of
Chartered Accountants in England and Wales (Independent Accountants) at the instance of
whichever such Party first applies to him.

	12	 	The Independent Accountants will act as experts and not as an arbitrators and will determine
which, if any, adjustments proposed in the Objection Notice (or what lesser adjustments in
respect of the matter giving rise to the adjustments proposed in the Objection Notice) should
be made to the Completion Statement so that they comply with this Schedule. Any determination
made by the Independent Accountants will be final and binding on the Parties (in the absence
of manifest error).

	13	 	The costs of the Independent Accountants will be borne as the Independent Accountants
determine and if the Independent Accountants do not make a determination, then equally.

	14	 	The adjustments agreed by OROLIA and Seller or determined by the Independent Accountants (as
appropriate) will be deemed to form part of the Completion Statement.

	15	 	OROLIA and Seller will co-operate with the Independent Accountants and comply with their
reasonable requests made in connection with the carrying out of their duties under this
Agreement.

 

78

 

	16	 	Nothing in paragraph 17 will entitle OROLIA or the Seller or the Independent Accountants
access to any information or a document which is protected by legal professional privilege, or
which has been prepared by the other Party or its accountants and other professional advisers
with a view to assessing the merits of any claim or argument.

	17	 	Subject to paragraph 16, the Parties are not entitled to refuse to supply that part or parts
of any document which contain only the facts on which the relevant claim or argument is based.

	18	 	Each Party and the Independent Accountants will, and will ensure that its Accountants and
other advisers will, keep all information and documents provided to them under paragraphs 8 to
17 confidential and will not use the same for any purpose, except for disclosure or use in
connection with the preparation of the Completion Statement.

 

79

 

Part (2)

Pro Forma Completion Statement

	 	 	 	 	 
	Initial Stock Value
	 	£	1,300,000	 
	 
	 	 	 	 
	Actual Stock Value
	 	£	 	 
	 
	 	 	 	 
	Difference between the Initial Stock Value and the Actual Stock
Value due to the Seller or OROLIA (as the case may be)
	 	£	 	 

 

80

 

SCHEDULE 13

Licence to Occupy

 

81

 

SCHEDULE 14

McMurdo Ltd Sale and Purchase Agreement

 

82

 

	 	 	 
	Executed by as a Deed by
	 	 
	Signature Industries Limited acting by or if by one

	 	Director
	director in the presence of:
	 	 
	Witness

	 	Director/Secretary
	Name
	 	 
	Address
	 	 
	 
	 	 
	Executed by as a Deed by
	 	 
	McMurdo Limited acting by or if by one director in the

	 	Director
	presence of:
	 	 
	Witness

	 	Director/Secretary
	Name
	 	 
	Address
	 	 
	 
	 	 
	Executed by as a Deed by
	 	 
	Digital Angel Corporation acting by

	 	Authorised Signatory
	 
	 	 
	 

	 	Authorised Signatory
	 
	 	 
	Executed by as a Deed by
	 	 
	OROLIA SA acting by

	 	Jean-Yves COURTOIS, Chairman and CEO
	 

	 	Authorised Signatory
	 
	 	 
	 

	 	Christophe Francois, Deputy CEO

 

83exv4wawi

    Exhibit 4.(a)(i)

 

    TRUST DEED
    is made on 27 November 2009

 

    Between

 

    (1) INTERCONTINENTAL HOTELS GROUP PLC (the
    Issuer);

 

    (2) SIX CONTINENTS LIMITED (Six
    Continents);

 

    (3) INTERCONTINENTAL HOTELS LIMITED
    (InterContinental, and together with Six
    Continents, the Guarantors); and

 

    (4) HSBC CORPORATE TRUSTEE COMPANY (UK) LIMITED (the
    Trustee, which expression includes, where the
    context admits, all persons for the time being the trustee or
    trustees of this Trust Deed).

 

    Whereas

 

    (A) The Issuer has established a Euro Medium Term Note
    Programme pursuant to which the Issuer may issue from time to
    time Notes as set out herein (the Programme).
    Notes up to a maximum nominal amount from time to time
    outstanding of £750,000,000 (subject to increase as
    provided in the Dealer Agreement (as defined below)) (the
    Authorised Amount) may be issued pursuant to the
    said Programme.

 

    (B) The Guarantors have agreed to guarantee Notes issued
    under the Programme and to enter into certain covenants set out
    in this Trust Deed.

 

    (C) The Trustee has agreed to act as trustee of this
    Trust Deed on the following terms and conditions.

 

    NOW THIS
    TRUST DEED WITNESSES AND IT IS HEREBY DECLARED
    as follows:

 

    1.  Definitions
    and Interpretation
    

 

    1.1  Definitions

 

    In this Trust Deed the following expressions have the
    following meanings:

 

    Additional Rating Agency means Moody’s and Fitch;

 

    Agency Agreement means, in relation to the Notes of any
    Series, the agency agreement dated 27 November 2009 (as
    amended, modified and restated from time to time) between the
    Issuer, the Guarantors, the Trustee and HSBC Bank plc as
    Principal Paying Agent appointing the initial Paying Agent and
    the Calculation Agent in relation to such Series and any other
    agreement for the time being in force appointing Successor
    paying agents or a Successor calculation agent in relation to
    such Series, together with any agreement for the time being in
    force amending or modifying with the prior written approval of
    the Trustee any of the aforesaid agreements in relation to such
    Series;

    

    1

 

    Agents means, in relation to the Notes of any Series, the
    Principal Paying Agent, the other Paying Agents, the Calculation
    Agent or any of them;

 

    Appointee means any attorney, manager, agent, delegate,
    nominee, custodian, receiver or other person appointed by the
    Trustee under this Trust Deed;

 

    Auditors means the auditors for the time being of the
    Issuer or, as the case may be, a Guarantor and, in the event of
    any of them being unable or unwilling to carry out any action
    requested of them pursuant to this Trust Deed, means such
    other firm of chartered accountants in England as may be
    nominated in writing by the Trustee for the purpose;

 

    Authorised Signatory means any person who (a) is a
    Director of the Issuer or, as the case may be, the relevant
    Guarantor or (b) has been notified to the Trustee by any
    such Director as being an Authorised Signatory pursuant to
    sub-clause 8(p)
    (Authorised Signatories);

 

    Calculation Agent means, in relation to the Notes of any
    Series, the institution at its Specified Office initially
    appointed as calculation agent in relation to such Notes
    pursuant to the Agency Agreement and/or, if applicable,
    Successor calculation agent in relation to such Notes at its
    Specified office;

 

    CGN Permanent Global Note means a Permanent Global Note
    representing Notes for which the relevant Final Terms specify
    that the New Global Note form is not applicable;

 

    CGN Temporary Global Note means a Temporary Global Note
    representing Notes for which the relevant Final Terms specify
    that the New Global Note form is not applicable;

 

    Change of Control has the meaning given to such term in
    Condition 2(a);

 

    Clearstream, Luxembourg means Clearstream Banking,
    société anonyme;

 

    Common Safekeeper means an ICSD in its capacity as common
    safekeeper or a person nominated by the ICSDs to perform the
    role of common safekeeper;

 

    Conditions means the terms and conditions to be endorsed
    on, or incorporated by reference in, the Notes of any Series, in
    the form set out in Schedule 1 or in such other form,
    having regard to the terms of the Notes of the relevant Series,
    as may be agreed between the issuer, the Principal Paying Agent,
    the Trustee and the relevant Dealer(s) as modified and
    supplemented by the Final Terms(s) applicable to such Series, as
    any of the same may from time to time be modified in accordance
    with this Trust Deed and any reference in this
    Trust Deed to a particular numbered Condition shall be
    construed in relation to the Notes of such Series accordingly;

 

    Contractual Currency means, in relation to any payment
    obligation of any Note, the currency in which that payment
    obligation is expressed and, in relation to Clause 14.1
    (Remuneration), pounds sterling or such other currency as
    may be agreed between the issuer and the Trustee from time to
    time;

    

    2

 

    Couponholder means the holder of a Coupon;

 

    Coupons means any bearer interest coupons in or
    substantially in the form set out in Part E of Schedule 2 appertaining
    to the Notes of any Series and for the time being outstanding
    or, as the context may require, a specific number thereof and
    includes any replacement Coupons issued pursuant to Condition 15
    and, where the context so permits, the Talons appertaining to
    the Notes of such Series;

 

    Dealer Agreement means the agreement between the Issuer
    and the Dealers named therein concerning the purchase of Notes
    to be issued pursuant to the Programme as amended from time to
    time or any restatement thereof for the time being in force;

 

    Dealers means any person appointed as a Dealer by the
    Dealer Agreement and any other person which the Issuer may
    appoint as a Dealer and notice of whose appointment has been
    given to the Principal Paying Agent and the Trustee by the
    Issuer in accordance with the provisions of the Dealer Agreement
    but excluding any entity whose appointment has been terminated
    in accordance with the terms of the Dealer Agreement and notice
    of whose termination has been given to the Principal Paying
    Agent and the Trustee by the Issuer in accordance with the
    provisions of the Dealer Agreement and references to the
    relevant Dealer(s) mean, in relation to any Note, the Dealer(s)
    with whom the Issuer has agreed the issue and purchase of such
    Note;

 

    Director means any Director of the Issuer or, as the case
    may be, a Guarantor, from time to time;

 

    Drawdown Prospectus means a prospectus specific to a
    Tranche of Notes which may be constituted either (a) by a
    single document or (b) by a registration document, a
    securities note and, if applicable, a summary;

 

    Euroclear means Euroclear Bank SA/NV;

 

    Event of Default means any one of the circumstances
    described in Condition 13;

 

    Extraordinary Resolution has the meaning set out in Schedule 6;

 

    Final Terms has the meaning ascribed to it in the Dealer
    Agreement;

 

    Fitch means Fitch Ratings Ltd or any successor;

 

    Fixed Rate Note means a Note on which interest is
    calculated at a fixed rate payable in arrear on a fixed date or
    dates in each year and on redemption or on such other dates as
    may be agreed between the Issuer, the Guarantors and the
    relevant Dealer(s) (as indicated in the relevant Final Terms);

 

    Floating Rate Note means a Note on which interest is
    calculated at a floating rate payable at intervals of one, two,
    three, six or twelve months or at such other intervals as may be
    agreed between the Issuer, the Guarantors and the relevant
    Dealer(s) (as indicated in the relevant Final Terms);

    

    3

 

    FSMA means the Financial Services and Markets Act 2000;

 

    Global Note means a CGN Temporary Global Note, a CGN
    Permanent Global Note, an NGN Temporary Global Note or an NGN
    Permanent Global Note;

 

    ICSDs means Clearstream, Luxembourg and Euroclear;

 

    Index Linked Interest Notes has the meaning given to such
    term in the relevant Final Terms;

 

    Issue Date means, in relation to any Note, the date of
    issue of such Note pursuant to the Dealer Agreement or any other
    relevant agreement between the Issuer and the relevant Dealer(s);

 

    Interest Commencement Date means, in relation to any
    interest-bearing Note, the date specified in the relevant Final
    Terms from which such Note bears interest or, if no such date is
    specified therein, the Issue Date;

 

    Liabilities or Liability means any loss, damage,
    cost, charge, claim, demand, expense, judgment, action,
    proceeding or other liability whatsoever (including, without
    limitation, in respect of taxes, duties, levies, imposts and
    other charges) and including any value added tax or similar tax
    charged or chargeable in respect thereof and legal fees and
    expenses on a full indemnity basis;

 

    London Stock Exchange means the London Stock Exchange plc;

 

    Material Subsidiary has the meaning set out in Condition
    2(a);

 

    Moody’s means Moody’s Investors Service, Inc.
    or any successor;

 

    NGN Permanent Global Note means a Permanent Global Note
    representing Notes for which the relevant Final Terms specify
    that the New Global Note form is applicable;

 

    NGN Temporary Global Note means a Temporary Global Note
    representing Notes for which the relevant Final Terms specify
    that the New Global Note form is applicable;

 

    Noteholder and (in relation to a Note) holder
    means the bearer of a Note;

 

    Notes means the bearer notes of each Series constituted
    in relation to or by this Trust Deed which shall be in or
    substantially in the form set out in Schedule 2 and, for the time being
    outstanding or, as the case may be, a specific number thereof
    and includes any replacement Notes of such Series issued
    pursuant to Condition 15 and (except for the purposes of
    Clause 5.1 (Global Notes) and 5.3
    (Signature)) each Global Note in respect of such Series
    for so long as it has not been exchanged in accordance with the
    terms thereof;

 

    outstanding means, in relation to the Notes of any
    Series, all the Notes of such Series other than:

 

    (a) those which have been redeemed in accordance with this
    Trust Deed;

    

    4

 

    (b) those in respect of which the date for redemption in
    accordance with the provisions of the Conditions has occurred
    and for which the redemption moneys (including all interest
    accrued thereon to the date for such redemption) have been duly
    paid to the Trustee or the Principal Paying Agent in the manner
    provided for in the Agency Agreement (and, where appropriate,
    notice to that effect has been given to the Noteholders in
    accordance with Condition 19) and remain available for
    payment in accordance with the Conditions;

 

    (c) those which have been purchased and surrendered for
    cancellation as provided in Condition 10(j) and notice of the
    cancellation of which has been given to the Trustee;

 

    (d) those which have become void under Condition 14;

 

    (e) those mutilated or defaced Notes which have been
    surrendered or cancelled and in respect of which replacement
    Notes have been issued pursuant to Condition 15; or

 

    (f) (for the purpose only of ascertaining the aggregate
    nominal amount of Notes outstanding and without prejudice to the
    status for any other purpose of the relevant Notes) those Notes
    which are alleged to have been lost, stolen or destroyed and in
    respect of which replacements have been issued pursuant to
    Condition 15;

 

    provided that for each of the following purposes, namely:

 

    (i) the right to attend and vote at any meeting of the
    holders of Notes of any Series;

 

    (ii) the determination of how many and which Notes of any
    Series are for the time being outstanding for the purposes of
    Clauses 11.1 (Legal Proceedings) and 9.1
    (Waiver), Conditions 13 and 17 and Schedule 6;

 

    (iii) any discretion, power or authority, whether contained
    in this Trust Deed or provided by law, which the Trustee is
    required to exercise in or by reference to the interests of the
    holders of the Notes of any Series or any of them; and

 

    (iv) the determination by the Trustee whether any event,
    circumstance, matter or timing is, in its opinion, materially
    prejudicial to the interests of the holders of the Notes of any
    Series;

 

    those Notes (if any) of the relevant Series which are for the
    time being held by any person (including but not limited to the
    Issuer, any Guarantor or any Subsidiary) for the benefit of the
    Issuer, any Guarantor or any Subsidiary shall (unless and until
    ceasing to be so held) be deemed not to remain outstanding;

 

    Paying Agents means, in relation to the Notes of any
    Series, the several institutions (including, where the context
    permits, the Principal Paying Agent) at their respective
    Specified Offices appointed pursuant to the relative Agency

    

    5

 

    Agreement and/or, if applicable, any additional
    and/or
    Successor paying agents in relation to such Series at their
    respective Specified Offices;

 

    Permanent Global Note means, in relation to any Series, a
    Global Note to be issued pursuant to Clause 5.1 in the form
    or substantially in the form set out in Part B of Schedule 2;

 

    Potential Event of Default means an event or circumstance
    which could, with the giving of notice, lapse of time, the
    issuing of a certificate
    and/or
    fulfilment of any other requirement provided for in Condition
    13, become an Event of Default;

 

    Principal Paying Agent means, in relation to the Notes of
    any Series, the institution at its Specified Office initially
    appointed as issuing and principal paying agent in relation to
    such Series pursuant to the relative Agency Agreement or, if
    applicable, any Successor principal paying agent in relation to
    such Series at its Specified Office;

 

    Put Option has the meaning given to such term in
    Condition 10(e);

 

    Rating Agency means S&P or any of its respective
    successors or any Substitute Rating Agency and, for the purposes
    of Condition 10(f), includes any Additional Rating Agency;

 

    Receiptholder means the holder of a Receipt;

 

    Receipts means any bearer principal receipts appertaining
    to the Notes of any Series or, as the context may require, a
    specific number thereof and includes any replacement Receipts
    issued pursuant to Condition 15;

 

    Relevant Date has the meaning ascribed to it in Condition
    2(a);

 

    Reserved Matter has the meaning set out in
    paragraph 1 of Schedule 6;

 

    repay includes redeem and vice versa
    and repaid, repayable,
    repayment, redeemed,
    redeemable and redemption shall be
    construed accordingly;

 

    Series means a Tranche of Notes together with any further
    Tranche or Tranches of Notes expressed to be consolidated and
    form a single series with the Notes of the original Tranche and
    the terms of which are identical (save for the issue Date
    and/or the
    Interest Commencement Date but including as to whether or not
    the Notes are listed);

 

    Specified Office means, in relation to any Agent in
    respect of any Series, either the office identified with its
    name in Condition 2(a) of such Series or any other office
    notified to any relevant parties pursuant to the Agency
    Agreement;

 

    Subsidiary has the meaning set out in Condition 2(a);

 

    Substitute Rating Agency means any rating agency of
    international standing substituted for the Rating Agency by the
    Issuer from time to time with the prior written approval of the
    Trustee, such approval not to be unreasonably withheld or
    delayed;

    

    6

 

    Successor means, in relation to the Paying Agents, such
    other or further person as may from time to time be appointed
    pursuant to the Agency Agreement as a Paying Agent;

 

    Successor in Business means in respect of a company (the
    Original Company):

 

    (i) a company or other entity to whom the Original Company
    validly and effectually, in accordance with all enactments,
    orders and regulations in force for the time being and from time
    to time, transfers the whole or substantially the whole of its
    business, undertaking and assets for the purpose of assuming and
    conducting the business of the Original Company in its
    place; or

 

    (ii) any other entity which acquires in any other manner
    the whole or substantially the whole of the undertaking,
    property and assets of the Original Company and carries on as a
    successor to the Original Company the whole or substantially the
    whole of the business carried on by the Original Company prior
    thereto;

 

    S&P means Standard & Poor’s Rating
    Services, a division of The McGraw-Hill Companies Inc. or any
    successor;

 

    Talonholder means the holder of a Talon;

 

    Talons means any bearer talons appertaining to the Notes
    of any Series or, as the context may require, a specific number
    thereof and includes any replacement Talons issued pursuant to
    Condition 15;

 

    Temporary Global Note means, in relation to any Series, a
    Global Note to be issued pursuant to Clause 5.1 in the form
    or substantially in the form set out in of Schedule 2;

 

    this Trust Deed means this Trust Deed and the
    Schedules (as from time to time modified in accordance with the
    provisions contained herein) and (unless the context requires
    otherwise) includes any deed or other document executed in
    accordance with the provisions hereof (as from time to time
    modified as aforesaid) and expressed to be supplemental hereto;

 

    Tranche means all Notes of the same Series with the same
    Issue Date and Interest Commencement Date;

 

    Trustee Acts means both the Trustee Act 1925 and the
    Trustee Act 2000 of England and Wales;

 

    Written Resolution means, in relation to any Series, a
    resolution in writing signed by or on behalf of the holders of
    75 per cent. of the aggregate principal amount of the Notes
    of such Series for the time being outstanding, whether contained
    in one document or several documents in like form, each signed
    by or on behalf of one or more such Noteholders;

    

    7

 

    Zero Coupon Note means a Note on which no interest is
    payable.

 

		
	
    1.2  
	
    Principles
    of interpretation

 

    In this Trust Deed:

 

    (a) Statutory modification:  a provision
    of any statute shall be deemed also to refer to any statutory
    modification or re-enactment thereof or any statutory
    instrument, order or regulation made thereunder or under such
    modification or re-enactment;

 

    (b) Additional amounts:  principal
    and/or
    interest in respect of the Notes of any Series shall be deemed
    also to include references to any additional amounts, any
    redemption amounts and any premium which may be payable under
    the Conditions;

 

    (c) Relevant Currency:  relevant
    currency shall be construed as a reference to the currency
    in which payments in respect of the Notes
    and/or
    Receipts
    and/or
    Coupons of the relevant Series are to be made as indicated in
    the relevant Final Terms;

 

    (d) Tax:  costs, charges or expenses shall
    include any value added tax or similar tax charged or chargeable
    in respect thereof;

 

    (e) Enforcement of rights:  an action,
    remedy or method of judicial proceedings for the enforcement of
    rights of creditors shall include, in respect of any
    jurisdiction other than England, references to such action,
    remedy or method of judicial proceedings for the enforcement of
    rights of creditors available or appropriate in such
    jurisdictions as shall most nearly approximate thereto;

 

    (f) Clauses and Schedules:  a Schedule or
    a Clause,
    sub-clause,
    paragraph or
    sub-paragraph
    is, unless otherwise stated, to a schedule hereto or a clause,
    sub-clause,
    paragraph or
    sub-paragraph
    hereof respectively;

 

    (g) Clearing systems:  Euroclear
    and/or
    Clearstream, Luxembourg shall, wherever the context so admits
    (but not in the case of any Notes in NGN form), be deemed to
    include references to any additional or alternative clearing
    system approved by the Issuer and the Trustee;

 

    (h) Trust corporation:  a trust
    corporation denotes a corporation entitled by rules made under
    the Public Trustee Act 1906 to act as a custodian trustee or
    entitled pursuant to any other legislation applicable to a
    trustee in any jurisdiction other than England to act as trustee
    and carry on trust business under the laws of the country of its
    incorporation;

 

    (i) Gender:  words denoting the masculine
    gender shall include the feminine gender also, words denoting
    individuals shall include companies, corporations and
    partnerships, words importing the singular number shall include
    the plural and, in each case, vice versa;

    

    8

 

    (j) Records:  any reference to the records
    of an ICSD shall be to the records that each of the ICSDs holds
    for its customers which reflect the amount of such
    customers’ interests in the Notes (but excluding any
    interest in any Notes of one ICSD shown in the records of
    another ICSD);

 

    (k) Drawdown Prospectus:  each reference
    to Final Terms shall, in the case of a Series of Notes which is
    the subject of a Drawdown Prospectus be read and construed as a
    reference to the final terms of the Notes set out in such
    Drawdown Prospectus;

 

    (l) Guarantees:  all references in this
    Trust Deed to guarantees or to an obligation being
    guaranteed shall be deemed to include respectively references to
    indemnities or to an indemnity being given in respect
    thereof; and

 

    (m) Proceedings:  all references in these
    presents to taking proceedings against the Issuer
    and/or the
    Guarantors shall be deemed to include references to proving in
    the winding up of the Issuer
    and/or any
    Guarantor (as the case may be).

 

    1.3  The
    Conditions

 

    In this Trust Deed, unless the context requires or the same
    are otherwise defined, words and expressions defined in the
    Conditions and not otherwise defined herein shall have the same
    meaning in this Trust Deed.

 

    1.4  Headings

 

    The headings and
    sub-headings
    are for ease of reference only and shall not affect the
    construction of this Trust Deed.

 

    1.5  The
    Schedules

 

    The schedules are part of this Trust Deed and shall have
    effect accordingly.

 

    1.6 Written
    Notices/Approvals

 

    Any reference to a written notice or approval being given by the
    Trustee shall, for the avoidance of doubt, be deemed to include
    such notice being given by email.

 

    2.  Amount
    and Issue of the Notes
    

 

    2.1  Amount
    of the Notes

 

    The Notes will be issued in Series in an aggregate nominal
    amount from time to time outstanding not exceeding the
    Authorised Amount and, for the purpose of determining such
    aggregate nominal amount, Clause 14 of the Dealer Agreement
    shall apply.

 

    2.2  Prior
    to each Issue Date

 

    By not later than 3.00 p.m. (London time) on the fourth
    business day in London (which for this purpose shall be a day on
    which commercial banks are open for business in London)
    preceding each proposed Issue Date, the Issuer shall:

    

    9

 

    (a) deliver or cause to be delivered to the Trustee a draft
    of the relevant Final Terms and, if applicable, notify the
    Trustee of any proposed changes to the draft Final Terms
    delivered to the Trustee; and

 

    (b) notify the Trustee in writing without delay of the
    Issue Date and the nominal amount of the Notes of the relevant
    Tranche.

 

    For the avoidance of doubt, the Trustee shall not be required in
    any case to approve such Final Terms.

 

    2.3  Constitution
    of Notes

 

    Upon the issue of the Temporary Global Note, initially
    representing the Notes of any Tranche, such Notes shall become
    constituted by this Trust Deed without further formality.

 

    2.4  Further
    legal opinions

 

    After each anniversary of this Trust Deed and prior to the
    first issue of any Notes, on each occasion when a legal opinion
    is delivered to a Dealer pursuant to Clause 5.10 of the
    Dealer Agreement and on such other occasions as the Trustee so
    requests, the Issuer will procure, at no cost to the Trustee,
    that further legal opinions in such form and with such content
    as the Trustee may require from the legal advisers specified in
    the Dealer Agreement or in the relevant jurisdiction approved by
    the Trustee are delivered to the Trustee, provided that the
    Trustee shall not be required to approve the applicable legal
    opinions. In each such case, receipt by the Trustee of the
    relevant opinion shall be a condition precedent to the issue of
    Notes pursuant to this Trust Deed.

 

    3.  Covenant
    to Repay
    

 

    3.1  Covenant
    to repay

 

    The Issuer covenants with the Trustee that it shall, as and when
    the Notes of any Series or any of them become due to be redeemed
    or any principal on the Notes of any Series or any of them
    becomes due to be repaid in accordance with the Conditions,
    unconditionally pay or procure to be paid to or to the order of
    the Trustee in immediately available freely transferable funds
    in the relevant currency the principal amount of the Notes of
    such Series or any of them becoming due for payment on that date
    and shall (subject to the provisions of the Conditions and
    except in the case of Zero Coupon Notes), until all such
    payments (both before and after judgment or other order of a
    court of competent jurisdiction) are duly made, unconditionally
    pay or procure to be paid to or to the order of the Trustee as
    aforesaid on the dates provided for in the Conditions interest
    (which shall accrue from day to day) on the principal amount (or
    such other amount as may be specified in the Final Terms) of the
    Notes or any of them of such Series outstanding from time to
    time as set out in the Conditions (subject to Clause 3.3
    (Interest on Floating Rate Notes following Event of
    Default)) provided that:

    

    10

 

    (a) every payment of principal, interest or other sum due
    in respect of such Notes or any of them made to the Principal
    Paying Agent in the manner provided in the Agency Agreement
    shall satisfy pro tanto, to the extent of such payment,
    the relevant covenant by the Issuer contained in this Clause
    except to the extent that there is default in the subsequent
    payment thereof to the relevant Noteholders, Receiptholders or
    Couponholders (as the case may be) in accordance with the
    Conditions;

 

    (b) if any payment of principal or interest in respect of
    such Notes or any of them is made after the due date, payment
    shall be deemed not to have been made until either the full
    amount is paid to the relevant Noteholders, Receiptholders or
    Couponholders (as the case may be) or, if earlier, the seventh
    day after notice has been given to the relevant Noteholders in
    accordance with the Conditions that the full amount has been
    received by the Principal Paying Agent or the Trustee except, in
    the case of payment to the Principal Paying Agent, to the extent
    that there is failure in the subsequent payment to the
    Noteholders, Receiptholders, or Couponholders (as the case may
    be) under the Conditions; and

 

    (c) in any case where payment of the whole or any part of
    the principal amount due in respect of any Note is improperly
    withheld or refused upon due presentation of the relevant Note
    or Receipt (as the case may be) interest shall accrue on the
    whole or such part of such principal amount (except in the case
    of Zero Coupon Notes, to which the provision of Condition 8
    shall apply) from the date of such withholding or refusal until
    the date either on which such principal amount due is paid to
    the relevant Noteholders or Receiptholders (as the case may be)
    or, if earlier, the seventh day after which notice is given to
    the relevant Noteholders in accordance with the Conditions that
    the full amount payable in respect of the said principal amount
    is available for collection by the relevant Noteholders or
    Receiptholders (as the case may be) provided that on further due
    presentation of the relevant Note or Receipt (as the case may
    be) such payment is in fact made.

 

    The Trustee will hold the benefit of this covenant and the other
    covenants in this Trust Deed on trust for the Noteholders
    in accordance with their respective interests.

 

    3.2  Following
    an Event of Default

 

    At any time after any Event of Default or Potential Event of
    Default shall have occurred or the Notes of all or any Series
    shall otherwise have become due and repayable or the Trustee
    shall have received any money which it proposes to pay under
    Clause 12 to the relevant Noteholders, Receiptholders
    and/or
    Couponholders, the Trustee may:

 

    (a) by notice in writing to the Issuer, the Guarantors, the
    Principal Paying Agent and the other Agents require the
    Principal Paying Agent and the other Agents or any of them:

 

    (i) to act thereafter, until otherwise instructed by the
    Trustee, as Agents of the Trustee under the provisions of this
    Trust Deed on the terms provided in the Agency Agreement
    (with consequential

    

    11

 

    amendments as necessary and save that the Trustee’s
    liability under any provisions thereof for the indemnification,
    remuneration and payment of
    out-of-pocket
    expenses of the Agents shall be limited to amounts for the time
    being held by the Trustee on the trusts of this Trust Deed
    in relation to the Notes on the terms of this Trust Deed
    and available to the Trustee for such purpose) and thereafter to
    hold all Notes, Receipts and Coupons and all sums, documents and
    records held by them in respect of Notes, Receipts and Coupons
    on behalf of the Trustee; and/or

 

    (ii) to deliver up all Notes, Receipts and Coupons and all
    sums, documents and records held by them in respect of Notes,
    Receipts and Coupons to the Trustee or as the Trustee shall
    direct in such notice provided that such notice shall be deemed
    not to apply to any document or record which the relevant Agent
    is obliged not to release by any law or regulation; and

 

    (b) by notice in writing to the Issuer and the Guarantors
    require each of them to make all subsequent payments in respect
    of Notes, Receipts and Coupons to or to the order of the Trustee
    and, with effect from the issue of any such notice until such
    notice is withdrawn, proviso 3.1(a) to Clause 3.1
    (Covenant to repay) and (so far as it concerns payments
    by the Issuer and the Guarantors) Clause 12.4 (Payments
    to Noteholders, Receiptholders and Couponholders) shall
    cease to have effect.

 

    3.3  Interest
    on Floating Rate Notes and Index Linked Interest Notes following
    Event of Default

 

    If Floating Rate Notes or Index Linked Interest Notes become
    immediately due and repayable under Condition 13 the rate
    and/or
    amount of interest payable in respect of them will be calculated
    at the same intervals as if such Notes had not become due and
    repayable, the first of which will commence on the expiry of the
    Interest Period (as defined in the Conditions) during which the
    Notes of the relevant Series become so due and repayable in
    accordance with Condition 13 (with consequential amendments as
    necessary) except that the rates of interest need not be
    published.

 

    3.4  Currency
    of payments

 

    All payments in respect of, under and in connection with this
    Trust Deed and the Notes to the relevant Noteholders,
    Receiptholders and Couponholders shall be made in the relevant
    currency as required by the Conditions.

 

    3.5  Separate
    Series

 

    The Notes of each Series shall form a separate Series of Notes
    and accordingly, unless for any purpose the Trustee in its
    absolute discretion shall otherwise determine, all the
    provisions of this Trust Deed shall apply mutatis
    mutandis separately and independently to the Notes of each
    Series and in such Clauses and Schedule the expressions
    “Notes”,
    “Noteholders”,
    “Receipts”,
    “Receiptholders”,
    “Coupons”,
    “Couponholders”,
    “Talons” and
    “Talonholders” shall be construed
    accordingly.

    

    12

 

    4.  Guarantee
    

 

    4.1 The Guarantors hereby irrevocably and unconditionally
    and on a joint and several basis, and notwithstanding the
    release of any other guarantor or any other person under the
    terms of any composition or arrangement with any creditors of
    the Issuer, guarantee to the Trustee:

 

    (a) the due and punctual payment in accordance with the
    provisions of this Trust Deed of the principal of and
    premium (if any) and interest on the Notes and of any other
    amounts payable by the Issuer under this
    Trust Deed; and

 

    (b) the due and punctual performance and observance by the
    Issuer of each of the other provisions of this Trust Deed
    on the Issuer’s part to be performed or observed.

 

    4.2 If the Issuer fails for any reason whatsoever
    punctually to pay any such principal, premium, interest or other
    amount, the Guarantors shall cause each and every such payment
    to be made as if the Guarantors instead of the Issuer were
    expressed to be the primary obligor under this Trust Deed
    and not merely as surety (but without affecting the nature of
    the Issuer’s obligations) to the intent that the holder of
    the relevant Note, Receipt or Coupon or the Trustee (as the case
    may be) shall receive the same amounts in respect of principal,
    premium, interest or such other amount as would have been
    receivable had such payments been made by the Issuer.

 

    4.3 If any payment received by the Trustee or any
    Noteholder or Couponholder under the provisions of this
    Trust Deed shall (whether on the subsequent bankruptcy,
    insolvency or corporate reorganisation of the Issuer or, without
    limitation, on any other event) be avoided or set aside for any
    reason, such payment shall not be considered as discharging or
    diminishing the liability of the Guarantors and this guarantee
    shall continue to apply as if such payment had at all times
    remained owing by the Issuer and the Guarantors shall indemnify
    the Trustee and the Noteholders
    and/or
    Receiptholders
    and/or
    Couponholders (as the case may be) in respect thereof PROVIDED
    THAT the obligations of the Issuer
    and/or the
    Guarantors under this
    sub-clause
    shall, as regards each payment made to the Trustee or any
    Noteholder or Couponholder which is avoided or set aside, be
    contingent upon such payment being reimbursed to the Issuer or
    other persons entitled through the Issuer.

 

    4.4 Each of the Guarantors hereby agrees that its
    obligations under this Clause shall be unconditional and that it
    shall be fully liable irrespective of the validity, regularity,
    legality or enforceability against the Issuer of, or of any
    defence or counter-claim whatsoever available to the Issuer in
    relation to, its obligations under this Trust Deed, whether
    or not any action has been taken to enforce the same or any
    judgment obtained against the Issuer, whether or not any of the
    other provisions of this Trust Deed have been modified,
    whether or not any time, indulgence, wavier, authorisation or
    consent has been granted to the Issuer by or on behalf of the
    Noteholders, Receiptholders or the Couponholders or the Trustee,
    whether or not any determination has been made by the Trustee
    pursuant to Clause 9 whether or not there have been any
    dealings or transactions between the Issuer, any of the
    Noteholders or Couponholders or the Trustee, whether or not the
    Issuer has been dissolved, liquidated, merged, consolidated,

    

    13

 

    bankrupted or has changed its status, functions, control or
    ownership, whether or not the Issuer has been prevented from
    making payment by foreign exchange provisions applicable at its
    place of registration or incorporation and whether or not any
    other circumstances have occurred which might otherwise
    constitute a legal or equitable discharge of or defence to any
    guarantor. Accordingly, the validity of this guarantee shall not
    be affected by reason of any invalidity, irregularity,
    illegality or unenforceability of all or any of the obligations
    of the Issuer under this Trust Deed and this guarantee
    shall not be discharged nor shall the liability of a Guarantor
    under this Trust Deed be affected by any act, thing or
    omission or means whatever whereby its liability would not have
    been discharged if it had been the principal debtor.

 

    4.5 Without prejudice to the provisions of Clause 11
    the Trustee may determine from time to time whether or not it
    will enforce this guarantee which it may do without making any
    demand of or taking any proceedings against the Issuer and may
    from time to time make any arrangement or compromise with the
    Guarantors in relation to this guarantee which the Trustee may
    consider expedient in the interests of the Noteholders.

 

    4.6 The Guarantors waive diligence, presentment, demand of
    payment, filing of claims with a court in the event of
    dissolution, liquidation, merger or bankruptcy of the Issuer,
    any right to require a proceeding first against the Issuer,
    protest or notice with respect to this Trust Deed or the
    indebtedness evidenced thereby and all demands whatsoever and
    covenants that this guarantee shall be a continuing guarantee,
    shall extend to the ultimate balance of all sums payable and
    obligations owed by the Issuer under this Trust Deed, shall
    not be discharged except by complete performance of the
    obligations in this Trust Deed and is additional to, and
    not instead of, any security or other guarantee or indemnity at
    any time existing in favour of any person, whether from the
    Guarantors or otherwise.

 

    4.7 If any moneys shall become payable by the Guarantors
    under this guarantee the Guarantors shall not, so long as the
    same remain unpaid, without the prior written consent of the
    Trustee:

 

    (a) in respect of any amounts paid by it under these
    guarantees, exercise any rights of subrogation or contribution
    or, without limitation, any other right or remedy which may
    accrue to it in respect of or as a result of any such
    payment; or

 

    (b) in respect of any other moneys for the time being due
    to the Guarantors by the Issuer, claim payment thereof or
    exercise any other right or remedy.

 

    (including in either case claiming the benefit of any security
    or right of set-off or, on the liquidation of the Issuer,
    proving in competition with the Trustee). If, notwithstanding
    the foregoing, upon the bankruptcy, insolvency or liquidation of
    the Issuer, any payment or distribution of assets of the Issuer
    of any kind or character, whether in cash, property or
    securities, shall be received by the Guarantors before payment
    in full of all amounts payable under this Trust Deed shall
    have been made to the Noteholders, the Couponholders and the
    Trustee, such payment or distribution shall be received by the
    Guarantors on trust to pay the same over immediately to the
    Trustee for application in or towards the payment of all sums
    due and unpaid under this Trust Deed in accordance with
    Clause 7.

    

    14

 

    4.8 Until all amounts which may be or become payable by the
    Issuer under this Trust Deed have been irrevocably paid in
    full, the Trustee may:

 

    (a) refrain from applying or enforcing any other moneys,
    security or rights held or received by the Trustee in respect of
    those amounts, or apply and enforce the same in such manner and
    order as it sees fit (whether against those amounts or
    otherwise), and the Guarantors shall not be entitled to the
    benefit of the same; and

 

    (b) hold in a suspense account any moneys received from the
    Guarantors or an account of the Guarantors’ liability under
    this guarantee, without liability to pay interest on those
    moneys.

 

    5.  The
    Notes
    

 

    5.1  Global
    Notes

 

    (a) The Notes of each Tranche will initially be together
    represented by a Temporary Global Note. Each Temporary Global
    Note shall (save as may be specified in the relevant Final
    Terms) be exchangeable, in accordance with its terms, for
    interests in a Permanent Global Note or Notes in definitive form
    together with, where applicable, Receipts and (except in the
    case of Zero Coupon Notes) Coupons, and where applicable Talons
    attached.

 

    (b) Each Permanent Global Note shall be exchangeable, in
    accordance with its terms, for Notes in definitive form.

 

    All Global Notes shall be prepared, completed and delivered to a
    common depositary (in the case of a CGN) or common safekeeper
    (in the case of a NGN) for Euroclear and Clearstream, Luxembourg
    in accordance with the provisions of the Dealer Agreement or to
    another appropriate depositary in accordance with any other
    agreement between the Issuer and the relevant Dealer(s) and, in
    each case, the Agency Agreement.

 

    5.2  Notes
    in definitive form

 

    Notes in definitive form will be security printed in accordance
    with applicable legal and stock exchange requirements
    substantially in the form set out in Part C of Schedule 2. Any
    Coupons, Receipts and Talons will also be security printed in
    accordance with the same requirements and will be attached to
    the Notes in definitive form at the time of issue. Notes in
    definitive form will be endorsed with the Conditions and shall
    have endorsed thereon or attached thereto a copy of the
    applicable Final Terms (or the relevant provisions thereof).

    

    15

 

    5.3  Signature

 

    The Global Notes and the Notes in definitive form will be signed
    manually or in facsimile by a duly authorised person designated
    by the Issuer and will be authenticated manually by or on behalf
    of the Principal Paying Agent and if applicable, will be
    effectuated manually by or on behalf of the Common Safekeeper.
    The Issuer may use the facsimile signature of a person who at
    the date such signature was originally produced was such a duly
    authorised person even if at the time of issue of any Global
    Note or Note in definitive form he is no longer so authorised.
    Global Notes and Notes in definitive form so executed, duly
    authenticated and, if applicable, duly effectuated will be
    binding and valid obligations of the Issuer and title thereto
    shall pass by delivery.

 

    5.4  Entitlement
    to treat holder as owner

 

    The Issuer, the Guarantors, the Trustee and any Paying Agent may
    deem and treat the holder of any Note and the holder of any
    Receipt or Coupon as the absolute owner of such Note, Receipt or
    Coupon, as the case may be, free of any equity, set-off or
    counterclaim on the part of the Issuer or any Guarantor against
    the original or any intermediate holder of such Note, Receipt or
    Coupon (whether or not such Note, Receipt or Coupon shall be
    overdue and notwithstanding any notation of ownership or other
    writing thereon or any notice of previous loss or theft of such
    Note, Receipt or Coupon) for all purposes and, except as ordered
    by a court of competent jurisdiction or as required by
    applicable law, the Issuer, the Guarantors, the Trustee and any
    Paying Agent shall not be affected by any notice to the
    contrary. All payments made to any such holder shall be valid
    and, to the extent of the sums so paid, effective to satisfy and
    discharge the liability for the moneys payable upon the Notes.

 

    5.5  Further
    Notes

 

    The Issuer shall be at liberty from time to time (but subject
    always to the provisions of this Trust Deed) without the
    consent of the Noteholders, Receiptholders or Couponholders to
    create and issue further Notes having terms and conditions the
    same as the Notes of any Series (or the same in all respects
    save for the amount and date of the first payment of interest
    thereon) and so that the same shall be consolidated and form a
    single series with the outstanding Notes of a particular Series.

 

    6.  Cancellation
    of Notes and Records
    

 

    6.1 The Issuer shall procure that all Notes issued by it
    which are (a) redeemed or (b) purchased by or on
    behalf of the Issuer, a Guarantor or any Subsidiary and
    surrendered for cancellation or (c) which, being mutilated
    or defaced, have been surrendered and replaced pursuant to
    Condition 15 (Replacement of Notes, Receipts, Coupons and
    Talons) (together in each case, in the case of Definitive
    Notes, with all unmatured Receipts and Coupons attached thereto
    or delivered therewith), and all Receipts and Coupons paid in
    accordance with the relevant Conditions or which, being
    mutilated or defaced, have been surrendered and replaced
    pursuant to Condition 15 (Replacement of Notes, Receipts,
    Coupons and Talons), shall forthwith be cancelled by or on
    behalf of the Issuer and a certificate stating:

    

    16

 

    (i) the aggregate nominal amount of Notes which have been
    redeemed and the aggregate amounts in respect of Receipts and
    Coupons which have been paid;

 

    (ii) the serial numbers of such Notes in definitive form
    and Receipts;

 

    (iii) the total numbers (where applicable, of each
    denomination) by maturity date of such Receipts and Coupons;

 

    (iv) the aggregate amount of interest paid (and the due
    dates of such payments) on Global Notes;

 

    (v) the aggregate nominal amount of Notes (if any) which
    have been purchased by or on behalf of the Issuer, any Guarantor
    or any Subsidiary and cancelled and the serial numbers of such
    Notes in definitive form and, in the case of Notes in definitive
    form, the total number (where applicable, of each denomination)
    by maturity date of the Receipts, Coupons and Talons attached
    thereto or surrendered therewith;

 

    (vi) the aggregate nominal amounts of Notes and Receipts
    and the aggregate amounts in respect of Coupons which have been
    so surrendered and replaced and the serial numbers of such Notes
    in definitive form and the total number (where applicable, of
    each denomination) by maturity date of such Coupons and Talons;

 

    (vii) the total number (where applicable, of each
    denomination) by maturity date of the unmatured Coupons missing
    from Notes in definitive form bearing interest at a fixed rate
    which have been redeemed or surrendered and replaced and the
    serial numbers of the Notes in definitive form to which such
    missing unmatured Coupons appertained; and

 

    (viii) the total number (where applicable, of each
    denomination) by maturity date of Talons which have been
    exchanged for further Coupons,

 

    shall be given to the Trustee by or on behalf of the Issuer as
    soon as possible and in any event within one month after the end
    of each calendar quarter during which any such redemption,
    purchase, payment, exchange or replacement (as the case may be)
    takes place. The Trustee may accept such certificate as
    conclusive evidence of redemption, purchase, payment, exchange
    or replacement pro tanto of the Notes or payment of
    interest thereon or exchange of the relative Talons respectively
    and of cancellation of the relative Notes and Coupons.

 

    6.2 The Issuer shall procure (a) that the Principal
    Paying Agent shall keep a full and complete record of all Notes,
    Receipts, Coupons and Talons issued by it (other than serial
    numbers of Receipts and Coupons) and of their redemption, any
    cancellation or any payment (as the case may be) and of all
    replacement notes, receipts, coupons or talons issued in
    substitution for lost, stolen, mutilated, defaced or destroyed
    Notes, Receipts, Coupons or Talons,

    

    17

 

    (b) that the Principal Paying Agent shall in respect of the
    Coupons of each maturity retain (in the case of Coupons other
    than Talons) until the expiry of ten years from the Relevant
    Date in respect of such Coupons and (in the case of Talons
    indefinitely) either all paid or exchanged Coupons of that
    maturity or a list of the serial numbers of Coupons of that
    maturity still remaining unpaid or unexchanged and (c) that
    such records and Coupons (if any) shall be made available to the
    Trustee at all reasonable times.

 

    7.  Covenant
    to Comply with the Trust Deed
    

 

    7.1  Covenant
    to comply with the Trust Deed

 

    Each of the Issuer and each Guarantor severally covenants with
    the Trustee to comply with those provisions of this
    Trust Deed and the Conditions which are expressed to be
    binding on it and to perform and observe the same. The Notes,
    the Receipts and the Coupons are subject to the provisions
    contained in this Trust Deed, all of which shall be binding
    upon the Issuer, the Guarantors, the Noteholders, the
    Receiptholders, the Couponholders and all persons claiming
    through or under them respectively. The Trustee shall hold the
    benefit of this covenant upon trust for itself and the
    Noteholders, the Receiptholders and the Couponholders according
    to its and their respective interests.

 

    7.2  Trustee
    may enforce Conditions

 

    The Trustee shall itself be entitled to enforce the obligations
    of the Issuer and each Guarantor under the Notes and the
    Conditions as if the same were set out and contained in this
    Trust Deed which shall be read and construed as one
    document with the Notes.

 

    8.  Covenants
    by the Issuer and the Guarantors
    

 

    So long as any of the Notes remains outstanding, the Issuer and
    the Guarantors will each:

 

    (a) Books of account:  at all times keep
    and procure that all its Subsidiaries keep such books of account
    as may be necessary to comply with all applicable laws and so as
    to enable the financial statements of the Issuer or, as the case
    may be, the relevant Guarantor to be prepared and, if the
    Trustee, in its sole opinion, determines that it is necessary to
    request access to such books of account, allow the Trustee and
    any person appointed by it, to whom the Issuer, the relevant
    Guarantor or the relevant Subsidiary (as the case may be) shall
    have no reasonable objection, free access to the same at all
    reasonable times during normal business hours and to discuss the
    same with responsible officers of the Issuer;

 

    (b) Event of Default:  give notice in
    writing to the Trustee forthwith of the coming into existence of
    any security interest which would require any security to be
    given to the Notes pursuant to Condition 5 (Negative
    Pledge) or of the occurrence of any Event of Default,
    Potential Event of Default, Change of Control or Change of
    Control Put Event and without waiting for the Trustee to take
    any further action;

    

    18

 

    (c) Certificate of Compliance:  provide to
    the Trustee within seven days of any request by the Trustee and
    at the time of the despatch to the Trustee of its annual balance
    sheet and profit and loss account, and in any event not later
    than 180 days after the end of its financial year, a
    certificate, signed by two Authorised Signatories of the Issuer
    or, as the case may be, the relevant Guarantor certifying that
    up to a specified date not earlier than seven days prior to the
    date of such certificate (the “Certified Date”) the
    Issuer or, as the case may be, the relevant Guarantor has
    complied with its obligations under this Trust Deed and the
    Notes (or, if such is not the case, giving details of the
    circumstances of such non-compliance) and that as at such date
    there did not exist nor had there existed at any time prior
    thereto since the Certified Date in respect of the previous such
    certificate (or, in the case of the first such certificate,
    since the date of this Trust Deed) any Event of Default,
    Potential Event of Default, Change of Control Put Event, Change
    of Control or other matter which could affect the ability of the
    Issuer or, as the case may be, the relevant Guarantor to perform
    its obligations under this Trust Deed or (if such is not
    the case) specifying the same;

 

    (d) Financial statements:  send to the
    Trustee and to the Principal Paying Agent (if the same are
    produced) as soon as practicable after their date of publication
    and in the case of annual financial statements in any event not
    more than 180 days after the end of each financial year,
    two copies of the Issuer’s or, as the case may be, the
    relevant Guarantor’s consolidated annual balance sheet and
    profit and loss account and of every balance sheet, profit and
    loss account, report or other notice, statement or circular
    issued (or which under any legal or contractual obligation
    should be issued) to the members or holders of debentures or
    creditors (or any class of them) of the Issuer or, as the case
    may be, the relevant Guarantor in their capacity as such at the
    time of the actual (or legally or contractually required) issue
    or publication thereof and procure that the same are made
    available for inspection by Noteholders, Receiptholders and
    Couponholders at the Specified Offices of the Paying Agents as
    soon as practicable thereafter;

 

    (e) Information:  so far as permitted by
    applicable law, at all times give to the Trustee such
    information, opinions, certificates and other evidence as it
    shall require in accordance with its fiduciary duties and
    obligations to the Noteholders and in such form as it shall
    require (including, without limitation, the certificates called
    for by the Trustee pursuant to Clause 8(c) (Certificate of
    Compliance) for the exercise of its duties, trusts, powers,
    authorities and discretions vested in it under this
    Trust Deed or by operation of law;

 

    (f) Notes held by Issuer and the
    Guarantors:  send to the Trustee forthwith upon
    being so requested in writing by the Trustee a certificate of
    the Issuer or, as the case may be, the relevant Guarantor
    (signed on its behalf by two Authorised Signatories) setting out
    the total number of Notes of each Series which at the date of
    such certificate are held by or for the benefit of the Issuer,
    the relevant Guarantor or any Subsidiary;

    

    19

 

    (g) Execution of further Documents:  so
    far as permitted by applicable law, at all times execute all
    such further documents and do all such further acts and things
    as may be necessary at any time or times in the opinion of the
    Trustee to give effect to the provisions of this Trust Deed;

 

    (h) Notices to Noteholders:  send or
    procure to be sent to the Trustee not less than three business
    days in London prior to the date of publication, for the
    Trustee’s approval, one copy of each notice to be given to
    the Noteholders in accordance with Condition 19 (Notices)
    and not publish such notice without such approval (such approval
    not to be unreasonably withheld or delayed) and, upon
    publication, send to the Trustee two copies of such notice (such
    approval, unless so expressed, not to constitute approval of
    such notice for the purpose of Section 21 of the Financial
    Services and Markets Act 2000);

 

    (i) Notification of non-payment:  use its
    reasonable endeavours to procure that the Principal Paying Agent
    notifies the Trustee forthwith in the event that it does not, on
    or before the due date for payment in respect of the Notes,
    Receipts or Coupons of any Series or any of them receive
    unconditionally the full amount in the relevant currency of the
    moneys payable on such due date on all such Notes, Receipts or
    Coupons;

 

    (j) Notification of late payment:  in the
    event of the unconditional payment to the Principal Paying Agent
    or the Trustee of any sum due in respect of any of the Notes,
    the Receipts or the Coupons or any of them being made after the
    due date for payment thereof, forthwith give notice to the
    Noteholders that such payment has been made in accordance with
    Condition 19 (Notices);

 

    (k) Notification of redemption or
    payment:  not less than the number of days
    specified in the relevant Condition prior to the redemption or
    payment date in respect of any Note, Receipt or Coupon give to
    the Trustee notice in writing of the amount of such redemption
    or payment pursuant to the Conditions and duly proceed to redeem
    or pay such Notes, Receipts or Coupons accordingly;

 

    (l) Tax or optional redemption:  if the
    Issuer gives notice to the Trustee that it intends to redeem the
    Notes pursuant to Conditions 10(b) and 10(c) and prior to the
    Issuer giving such notice to the Noteholders, provide such
    information to the Trustee as the Trustee requires in order to
    satisfy itself of the matters referred to in such Condition;

 

    (m) Obligations of Agents:  observe and
    comply with its obligations and use all reasonable endeavours to
    procure that the Agents observe and comply with all their
    obligations under the Agency Agreement and notify the Trustee
    immediately it becomes aware of any material breach or failure
    by an Agent in relation to the Notes, Receipts or Coupons and at
    all times maintain Paying Agents and a Calculation Agent in
    accordance with the Conditions;

 

    (n) Change of taxing jurisdiction:  if
    before the Relevant Date for any Note, Receipt or Coupon the
    Issuer or any Guarantor shall become subject generally to the
    taxing jurisdiction of any territory or any political
    sub-division
    thereof or any authority therein or thereof having power to tax
    other than or in addition to the

    

    20

 

    United Kingdom, immediately upon becoming aware thereof notify
    the Trustee of such event and (unless the Trustee otherwise
    agrees) enter forthwith into a trust deed supplemental hereto,
    giving to the Trustee an undertaking or covenant in form and
    manner satisfactory to the Trustee in terms corresponding to the
    terms of Condition 12 with the substitution for (or, as the case
    may be, the addition to) the references therein to the United
    Kingdom of references to that other or additional territory to
    whose taxing jurisdiction, or that of a political subdivision
    thereof or an authority therein or thereof, the Issuer or, as
    the case may be, the relevant Guarantor shall have become
    subject as aforesaid, such trust deed also to modify Condition
    12 so that such Condition shall make reference to that other or
    additional territory;

 

    (o) Listing:  at all times use reasonable
    endeavours to maintain the admission to listing, trading
    and/or
    quotation of the Notes of each Series by the relevant competent
    authority, stock exchange
    and/or
    quotation system on which they are admitted to listing, trading
    and/or
    quotation on issue as indicated in the relevant Final Terms or,
    if it is unable to do so having used all reasonable endeavours
    or, if the Trustee considers that the maintenance of such
    admission to listing, trading
    and/or
    quotation is agreed by the Trustee to be unduly burdensome or
    impractical and the Trustee is of the opinion that to do so
    would not be materially prejudicial to the interests of the
    Noteholders, use reasonable endeavours to obtain and maintain
    admission to listing, trading
    and/or
    quotation of the Notes on such other competent authority, stock
    exchange
    and/or
    quotation system as the Issuer and the Guarantors may (with the
    approval of the Trustee decide and give notice of the identity
    of such other competent authority, stock exchange or quotation
    system to the Noteholders;

 

    (p) Authorised Signatories:  upon the
    execution hereof and thereafter forthwith upon any change of the
    same, deliver to the Trustee (with a copy to the Principal
    Paying Agent) a list of the Authorised Signatories of the Issuer
    and each Guarantor, together with certified specimen signatures
    of the same;

 

    (q) Payments:  pay moneys payable by it to
    the Trustee hereunder without set off, counterclaim, deduction
    or withholding, unless otherwise compelled by law and in the
    event of any deduction or withholding compelled by law pay such
    additional amount as will result in the payment to the Trustee
    of the amount which would otherwise have been payable by it to
    the Trustee hereunder; and

 

    (r) Notification of amendment to Dealer
    Agreement:  notify the Trustee of any amendment to
    the Dealer Agreement.

 

    (s) Auditor’s certificates:  cause to
    be prepared and certified by the Auditors in respect of each
    financial accounting period accounts in such form as will comply
    with all relevant legal and accounting requirements and all
    requirements for the time being of the relevant stock exchange;

 

    (t) Further documents:  at all times
    execute and do all such further documents, acts and things as
    may be necessary at any time or times in the reasonable opinion
    of the Trustee to give effect to this Trust Deed;

    

    21

 

    (u) Appointment and removal of
    Agents:  give notice to the Noteholders in
    accordance with Condition 19 (Notices) of any
    appointment, resignation or removal of any Paying Agent or
    Calculation Agent (other than the appointment of the initial
    Agents and Calculation Agent) after having obtained the prior
    written approval of the Trustee thereto or any change of any
    Paying Agent’s specified office and (except as provided by
    the Agency Agreement or the Conditions) at least 30 days
    prior to such event taking effect; PROVIDED ALWAYS THAT so long
    as any of the Notes remains outstanding in the case of the
    termination of the appointment of the Calculation Agent or so
    long as any of the Notes, Receipts or Coupons remains liable to
    prescription in the case of the termination of the appointment
    of the Principal Paying Agent no such termination shall take
    effect until a new Calculation Agent or Principal Paying Agent
    (as the case may be) has been appointed on terms previously
    approved in writing by the Trustee;

 

    (v) Subsidiaries:  procure its
    Subsidiaries to comply with all applicable provisions of
    Condition 10 (Redemption and Purchases);

 

    (w) Documents available for
    inspection:  use reasonable endeavours to procure
    that each Paying Agent makes available for inspection by
    Noteholders, Receiptholders and Couponholders at its specified
    office copies of this Trust Deed, the Agency Agreement and
    the then latest audited balance sheet and profit and loss
    account (consolidated if applicable) of the Issuer and the
    Guarantors;

 

    (x) U.S. Paying Agent:  if, in
    accordance with the provisions of the Conditions, interest in
    respect of the Notes becomes payable at the specified office of
    any Paying Agent in the United States of America promptly give
    notice thereof to the relative Noteholders in accordance with
    Condition 19 (Notices);

 

    (y) Dealer Agreement:  promptly provide
    the Trustee with copies of all supplements
    and/or
    amendments
    and/or
    restatements of the Dealer Agreement;

 

    (z) List of Material Subsidiaries:  give
    to the Trustee (i) on the date hereof and (ii) at the
    same time as sending to it the certificates referred to in
    paragraph (c) above, a certificate signed by two Authorised
    Signatories of the Issuer addressed to the Trustee (with a form
    and content satisfactory to the Trustee) listing those
    Subsidiaries of the Issuer which as at the date hereof, as at
    the Certified Date (as defined in paragraph (c) above) of
    the relevant certificate given under paragraph (c) above
    or, as the case may be, as at the first day on which the then
    latest audited consolidated accounts of the Issuer became
    available were Material Subsidiaries for the purposes of
    Condition 13 (Events of Default);

 

    (aa) Change in Material
    Subsidiaries:  give to the Trustee, as soon as
    reasonably practicable after the acquisition or disposal of any
    company which thereby becomes or ceases to be a Material
    Subsidiary or after any transfer is made to any Subsidiary of
    the Issuer which thereby becomes a Material Subsidiary, a
    certificate by two Authorised Signatories of the Issuer
    addressed to the Trustee (with a form and content satisfactory
    to the Trustee) to such effect;

    

    22

 

    (bb) Coupons:  upon due surrender in
    accordance with the Conditions, pay the face value of all
    Coupons (including Coupons issued in exchange for Talons)
    appertaining to all Notes purchased by the Issuer, the
    Guarantors or any other Subsidiary of the Issuer;

 

    (cc) Legal Opinions:  prior to making any
    modification or amendment or supplement to this Trust Deed,
    procure the delivery of (a) legal opinion(s) as to English
    and any other relevant law, addressed to the Trustee, dated the
    date of such modification or amendment or supplement, as the
    case may be, and in a form acceptable to the Trustee from legal
    advisers acceptable to the Trustee;

 

    (dd) Euroclear and Clearstream:  use all
    reasonable endeavours to procure that Euroclear
    and/or
    Clearstream, Luxembourg (as the case may be) issue(s) any
    record, certificate or other document requested by the Trustee
    as soon as practicable after such request; and

 

    (ee) Notice of rating downgrade:  promptly
    notify the Trustee upon becoming aware that any of the ratings
    assigned to the Notes has been downgraded or withdrawn.

 

    9.  Amendments
    and Substitution
    

 

    9.1  Waiver

 

    Without prejudice to Clause 9.4, the Trustee may, without
    any consent or sanction of the Noteholders, Receiptholders or
    Couponholders and without prejudice to its rights in respect of
    any subsequent breach, Event of Default or Potential Event of
    Default, from time to time and at any time, but only if and in
    so far as in its opinion the interests of the Noteholders shall
    not be materially prejudiced thereby, authorise or waive, on
    such terms and conditions (if any) as shall seem expedient to
    it, any breach or proposed breach by the Issuer or any Guarantor
    of any of the covenants or provisions contained in this
    Trust Deed or the Notes, Receipts or Coupons (other than a
    proposed breach or breach relating to the subject of a Reserved
    Matter) or determine that any Event of Default or Potential
    Event of Default shall not be treated as such for the purposes
    of this Trust Deed; any such authorisation, waiver or
    determination shall be binding on the Noteholders, the
    Receiptholders and the Couponholders and, if, but only if, the
    Trustee shall so require, the Issuer shall cause such
    authorisation, waiver or determination to be notified to the
    Noteholders as soon as practicable thereafter in accordance with
    the Conditions; provided that the Trustee shall not exercise any
    powers conferred upon it by this Clause in contravention of any
    express direction by an Extraordinary Resolution or of a request
    in writing made by the holders of not less than 20 per
    cent. in aggregate principal amount of the Notes then
    outstanding (but so that no such direction or request shall
    affect any authorisation, waiver or determination previously
    given or made) or so as to authorise or waive any such breach or
    proposed breach relating to any of the matters the subject of
    the Reserved Matters as specified and defined in Schedule 6.

    

    23

 

    9.2  Modifications

 

    Without prejudice to Clause 9.4, the Trustee may from time
    to time and at any time without any consent or sanction of the
    Noteholders, Receiptholders or Couponholders concur with the
    Issuer and the Guarantors in making (a) any modification to
    this Trust Deed (other than in respect of Reserved Matters
    as specified and defined in Schedule 6 or any provision of this
    Trust Deed referred to in that specification) or the Notes
    which in the opinion of the Trustee it may be proper to make
    provided the Trustee is of the opinion that such modification
    will not be materially prejudicial to the interests of the
    Noteholders or (b) any modification to this Trust Deed
    or the Notes if in the opinion of the Trustee such modification
    is of a formal, minor or technical nature or made to correct a
    manifest error or an error which is, in the opinion of the
    Trustee, proven. Any such modification shall be binding on the
    Noteholders, the Receiptholders and the Couponholders and,
    unless the Trustee otherwise agrees, the Issuer shall cause such
    modification to be notified to the Noteholders as soon as
    practicable thereafter in accordance with Condition 19
    (Notices).

 

    9.3  Substitution

 

    (a) Procedure:  Without prejudice to
    Clause 9.4, the Trustee may (1) without the consent of
    the Noteholders, the Receiptholders or the Couponholders, agree
    to the substitution, in place of the Issuer (or of any previous
    substitute under this Clause) of a Guarantor or its successor in
    business or any Subsidiary of the Issuer (hereinafter called the
    Substituted Obligor) as the principal debtor under
    this Trust Deed in relation to the Notes, Receipts, and
    Coupons of any Series and under the Notes, Receipts and Coupons
    of that Series and (2) without the consent of the
    Noteholders, the Receiptholders or the Couponholders, agree to
    the substitution of any Subsidiary of any Guarantor (also a
    Substituted Obligor) in place of a Guarantor (or
    any previous substitute under this Clause) as the guarantor
    under this Trust Deed in relation to the Notes, Receipts
    and Coupons of any Series and under the Notes, Receipts and
    Coupons of that Series, in each case provided that:

 

    (i) a trust deed is executed or some other written form of
    undertaking is given by the Substituted Obligor to the Trustee,
    in form and manner satisfactory to the Trustee, agreeing to be
    bound by the terms of this Trust Deed, the Notes, the
    Receipts and the Coupons (with any consequential amendments
    which the Trustee may deem appropriate) as fully as if the
    Substituted Obligor had been named in this Trust Deed and
    on the Notes, the Receipts and the Coupons as the principal
    debtor in place of the Issuer or, as the case may be, as the
    guarantor in place of the relevant Guarantor (or of any previous
    substitute under this Clause);

 

    (ii) the Issuer, the Guarantors and the Substituted Obligor
    execute such other deeds, documents and instruments (if any) as
    the Trustee may require in order that the substitution is fully
    effective and comply with such other requirements as the Trustee
    may direct in the interests of the Noteholders, the
    Receiptholders and the Couponholders;

    

    24

 

    (iii) an unconditional and irrevocable guarantee in form
    and substance satisfactory to the Trustee shall have been given
    (x) in the case of the substitution of the Issuer as
    provided in (1) above, by the Issuer and each of the
    Guarantors or, if one of the Guarantors or its successor in
    business has become the Substituted Obligor, by the Issuer and
    the remaining Guarantor or (y) in the case of the
    substitution of a Guarantor as provided in (2) above, by
    each of the Guarantors, of the obligations of the Substituted
    Obligor under this Trust Deed and the Notes;

 

    (iv) the Trustee is satisfied that (i) the Substituted
    Obligor has obtained all governmental and regulatory approvals
    and consents necessary for its assumption of liability as
    principal debtor or, as the case may be, as a guarantor in
    respect of this Trust Deed and the Notes, the Receipts and
    the Coupons in place of the Issuer and/or, as the case may be,
    the Guarantors or the relevant Guarantor (or such previous
    substitute as aforesaid) and (ii) the Issuer and/or, as the
    case may be, the Guarantors or the relevant Guarantor has
    obtained all governmental and regulatory approvals and consents
    necessary for the guarantee to be fully effective as referred to
    in
    sub-clause (c)
    and (iii) such approvals and consents are at the time of
    substitution in full force and effect;

 

    (v) (without prejudice to the generality of the preceding
    sub-clauses
    of this
    sub-clause 9.3(a))
    where the Substituted Obligor is incorporated, domiciled or
    resident in or is otherwise subject generally to the taxing
    jurisdiction of any territory or any political
    sub-division
    thereof or any authority of or in such territory having power to
    tax (the Substituted Territory) other than or in
    addition to the territory, the taxing jurisdiction of which (or
    to any such authority of or in which) the Issuer or, as the case
    may be, the relevant Guarantor is subject generally (the
    Issuer’s Territory), the Substituted Obligor
    will (unless the Trustee otherwise agrees) give to the Trustee
    an undertaking in form and manner satisfactory to the Trustee in
    terms corresponding to the terms of Condition 12 (Taxation) with
    the substitution for the reference in that Condition to the
    Issuer’s Territory of references to the Substituted
    Territory and in such event the Trust Deed and Notes,
    Receipts and Coupons will be interpreted accordingly;

 

    (vi) without prejudice to the rights of reliance of the
    Trustee under
    sub-clause 9.3(d)
    (Directors’ certification) the Trustee is satisfied
    that the said substitution is not materially prejudicial to the
    interests of the Noteholders;

 

    (vii) the Rating Agency has confirmed in writing to the
    Trustee that the substitution of the Substituted Obligor will
    not result in:

    

    25

 

    (A) in respect of any Series of Notes which is not
    specifically rated by any rating agency, a downgrading of the
    then current credit rating of any rating agency applicable to
    the class of debt represented by the Notes; or

 

    (B) in respect of any Series of Notes which is specifically
    rated by any rating agency, a downgrading of the then current
    credit rating applicable to such Series of Notes by such rating
    agency;

 

    (b) Change of law:  in connection with any
    proposed substitution of the Issuer or any Guarantor or any
    previous substitute, the Trustee may, in its absolute discretion
    and without the consent of the Noteholders or the Couponholders
    agree to a change of the law from time to time governing the
    Notes and the Coupons and this Trust Deed provided that
    such change of law, in the opinion of the Trustee, would not be
    materially prejudicial to the interests of the Noteholders;

 

    (c) Extra duties:  the Trustee shall be
    entitled to refuse to approve any Substituted Obligor if,
    pursuant to the law of the country of incorporation of the
    Substituted Obligor, the assumption by the Substituted Obligor
    of its obligations hereunder imposes responsibilities on the
    Trustee over and above those which have been assumed under this
    Trust Deed;

 

    (d) Directors’ certification:  if any
    two directors of the Substituted Obligor certify that
    immediately prior to the assumption of its obligations as
    Substituted Obligor under this Trust Deed the Substituted
    Obligor is solvent after taking account of all prospective and
    contingent liabilities resulting from its becoming the
    Substituted Obligor, the Trustee need not have regard to the
    financial condition, profits or prospects of the Substituted
    Obligor or compare the same with those of the Issuer or, as the
    case may be, the relevant Guarantor (or of any previous
    substitute under this Clause);

 

    (e) Interests of Noteholders:  in
    connection with any proposed substitution, the Trustee shall not
    have regard to, or be in any way liable for, the consequences of
    such substitution for individual Noteholders or the
    Couponholders resulting from their being for any purpose
    domiciled or resident in, or otherwise connected with, or
    subject to the jurisdiction of, any particular territory and no
    Noteholder or Couponholder shall, in connection with any such
    substitution, be entitled to claim from the Issuer or, as the
    case may be, the relevant Guarantor any indemnification or
    payment in respect of any tax consequence of any such
    substitution upon individual Noteholders or Couponholders;

 

    (f) Release of Issuer or, as the case may be, the
    relevant Guarantor:  any agreement by the Trustee
    pursuant to
    sub-clause 9.3(a)
    (Procedure) shall, if so expressed, operate to release
    the Issuer or, as the case may be, the relevant Guarantor (or
    such previous substitute as aforesaid) from any or all of its
    obligations as principal debtor or, as the case may be, as
    guarantor, in respect of the Notes, Receipts and Coupons and
    this Trust Deed (but without prejudice

    

    26

 

    to its liabilities under any guarantee given pursuant to
    sub-clause 9.3(c)).
    Not later than fourteen days after the execution of any such
    documents as aforesaid and after compliance with the said
    requirements of the Trustee, the Substituted Obligor shall cause
    notice thereof to be given to the Noteholders; and

 

    (g) Completion of substitution:  upon the
    execution of such documents and compliance with the said
    requirements, the Substituted Obligor shall be deemed to be
    named in this Trust Deed and the Notes, Receipts and
    Coupons as the principal debtor in place of the Issuer or, as
    the case may be, the guarantor in place of the relevant
    Guarantor (or in each case of any previous substitute under this
    Clause) and this Trust Deed, the Notes, the Receipts and
    the Coupons shall thereupon be deemed to be amended in such
    manner as shall be necessary to give effect to the substitution
    and without prejudice to the generality of the foregoing any
    references in this Trust Deed, in the Notes, Receipts and
    Coupons to the Issuer or, as the case may be, the relevant
    Guarantor shall be deemed to be references to the Substituted
    Obligor.

 

    9.4  Rating
    Confirmations

 

    For the purposes of determining whether or not the exercise by
    the Trustee of any of its trusts, powers, authorities, duties
    and discretions under this Trust Deed (including, without
    limitation, any modification, waiver, authorisation,
    determination or substitution), is materially prejudicial to the
    interests of the Noteholders of any Series of Notes, the Trustee
    shall be entitled to rely on (but is not bound by) any S&P
    or any Substituted Rating Agency confirmation received in
    respect thereof.

 

    10.  Breach
    

 

    Any breach of or failure to comply by the Issuer or the
    Guarantors with any such terms and conditions as are referred to
    in Clauses 8 and 9 shall constitute a default by the Issuer
    or the Guarantors (as the case may be) in the performance or
    observance of a covenant or provision binding on it under or
    pursuant to this Trust Deed.

 

    11.  Enforcement
    

 

    11.1  Legal
    proceedings

 

    The Trustee may at any time, at its discretion and without
    further notice, institute such proceedings against the Issuer
    and the Guarantors as it may think fit to recover any amounts
    due in respect of the Notes which are unpaid or to enforce any
    of its rights under this Trust Deed or the Conditions but
    it shall not be bound to take any such proceedings or any other
    action under this Trust Deed or the Notes unless
    (a) it shall have been so directed by an Extraordinary
    Resolution or so requested in writing by the holders of at least
    one-fifth in principal amount of the outstanding Notes and
    (b) it shall have been indemnified
    and/or
    secured
    and/or
    prefunded to its satisfaction against all Liabilities to which
    it may thereby become liable and all Liabilities incurred by it
    in connection therewith and provided that the Trustee shall not
    be held liable for the consequence of taking any such action and
    may take such action without having regard to the effect of such
    action on individual Noteholders, Receiptholders, or
    Couponholders. Only the Trustee may enforce the provisions of
    the this Trust Deed and the Notes, Receipts and Coupons and
    no Noteholder, Receiptholder or Couponholder shall be entitled
    to proceed directly against the Issuer

    

    27

 

    and/or any
    Guarantor unless the Trustee, having become bound so to proceed,
    fails to do so within a reasonable time and such failure is
    continuing.

 

    11.2  Evidence
    of default

 

    Proof that:

 

    (a) as regards any specified Note the Issuer has made
    default in paying any principal due in respect of such Note
    shall (unless the contrary be proved) be sufficient evidence
    that the Issuer has made the like default as regards all other
    Notes in respect of which a corresponding payment is then due;

 

    (b) as regards any specified Coupon the Issuer has made
    default in paying any interest due in respect of such Coupon
    shall (unless the contrary be proved) be sufficient evidence
    that the Issuer has made the like default as regards all other
    Coupons in respect of which a corresponding payment is then
    due; and

 

    (c) as regards any Talon, the Issuer has made default in
    exchanging such Talon for further Coupons and a further Talon as
    provided by its terms shall (unless the contrary be proved) be
    sufficient evidence that the Issuer has made the like default as
    regards all other Talons which are then available for exchange,

 

    and for the purposes of Subclauses 11.2(a) and 11.2(b) a payment
    shall be a “corresponding” payment notwithstanding
    that it is due in respect of a Note of a different denomination
    from that in respect of the above specified Note.

 

    12.  Application
    of Moneys
    

 

		
	
    12.1  
	
    Application
    of moneys

 

    All moneys received by the Trustee in respect of the Notes of
    any Series or amounts payable under this Trust Deed will
    despite any appropriation of all or part of them by the Issuer
    (including any moneys which represent principal or interest in
    respect of Notes, Receipts or Coupons which have become void
    under the Conditions shall, unless and to the extent
    attributable, in the opinion of the Trustee, to a particular
    Series of the Notes, be apportioned pari passu and
    rateably between each Series of the Notes, and all moneys
    received by the Trustee under this Trust Deed from the
    Issuer or, as the case may be, the Guarantors to the extent
    attributable in the opinion of the Trustee to a particular
    Series of the Notes or which are apportioned to such Series as
    aforesaid, be held by the Trustee on trust to apply them
    (subject to Clause 12.2 (Investment of moneys):

 

    (a) first, in payment or satisfaction of those Liabilities
    incurred by the Trustee or any Appointee in the preparation,
    maintenance and execution of the trusts of this Trust Deed
    (including remuneration and any additional remuneration of the
    Trustee);

 

    (b) secondly, in or towards payment pari passu and
    rateably of all interest remaining unpaid in respect of the
    Notes of the relevant Series and all principal moneys due on or
    in respect of the Notes of that Series provided that where the
    Notes of more than one Series become so due and payable, such
    monies shall be

    

    28

 

    applied as between the amounts outstanding in respect of the
    different Series pari passu and rateably (except where,
    in the opinion of the Trustee, such monies are paid in respect
    of a specific Series or several specific Series, in which event
    such monies shall be applied solely to the amounts outstanding
    in respect of that Series or those Series respectively); and

 

    (c) thirdly, the balance (if any) in payment to the Issuer
    (without prejudice to, or liability in respect of, any question
    as to how such payments shall be dealt with as between the
    Issuer and the Guarantors and any other person).

 

    Without prejudice to this Clause 10, if the Trustee holds
    any moneys which represent principal or interest in respect of
    Notes which have become void or in respect of which claims have
    been prescribed under Condition 14 (Prescription), the
    Trustee will hold such moneys on the above trusts.

 

		
	
    12.2  
	
    Investment
    of moneys

 

    If the amount of the moneys at any time available for payment of
    principal and interest in respect of the Notes of any Series
    under Clause 12.1 (Application of moneys) shall be
    less than a sum sufficient to pay at least one-tenth of the
    principal amount of the Notes of such Series then outstanding,
    the Trustee may, at its discretion, invest such moneys upon some
    or one of the investments hereinafter authorised with power from
    time to time, with like discretion, to vary such investments;
    and such investment with the resulting income thereof may be
    accumulated until the accumulations together with any other
    funds for the time being under the control of the Trustee and
    available for the purpose shall amount to a sum sufficient to
    pay at least one-tenth of the principal amount of the Notes of
    such Series then outstanding and such accumulation and funds
    (after deduction of any taxes and any other deductibles
    applicable thereto) shall then be applied in the manner
    aforesaid.

 

		
	
    12.3  
	
    Authorised
    Investments

 

    Any moneys which under this Trust Deed may be invested by
    the Trustee may be invested in the name or under the control of
    the Trustee in any of the investments for the time being
    authorised by English law for the investment by trustees of
    trust moneys or in any other investments, whether similar to
    those aforesaid or not, which may be selected by the Trustee or
    by placing the same on deposit in the name or under the control
    of the Trustee with such bank or other financial institution as
    the Trustee may think fit and in such currency as the Trustee in
    its absolute discretion may determine and the Trustee may at any
    time vary or transfer any of such investments for or into other
    such investments or convert any moneys so deposited into any
    other currency and shall not be responsible for any Liability
    occasioned by reason of any such investments or such deposit
    whether by depreciation in value, fluctuation in exchange rates
    or otherwise. If that bank or institution is the Trustee or a
    subsidiary, holding company or associated company of the
    Trustee, it need only account for an amount of interest equal to
    the amount of interest that would be payable by it on such
    deposit to an independent customer.

    

    29

 

    12.4  Payment
    to Noteholders, Receiptholders and Couponholders

 

    The Trustee shall give notice to the Noteholders in accordance
    with Condition 19 (Notices) of the date fixed for any
    payment under Clause 12.1 (Application of Moneys).
    Any payment to be made in respect of the Notes, Receipts or
    Coupons of any Series by the Issuer, any Guarantor or the
    Trustee may be made in the manner provided in Condition 11
    (Payments), the Agency Agreement and this Trust Deed
    and any payment so made shall be a good discharge of such
    payment to the extent of such payment by the Issuer, the
    relevant Guarantor or the Trustee (as the case may be).

 

    12.5  Production
    of Notes, Receipts and Coupons

 

    Upon any payment under Clause 12.4 (Payment to
    Noteholders, Receiptholders and Couponholders) of principal
    or interest, the Note, Receipt or Coupon in respect of which
    such payment is made shall, if the Trustee so requires, be
    produced to the Trustee or the Paying Agent by or through whom
    such payment is made and the Trustee shall in respect of a Note,
    Receipt or Coupon (a) in the case of part payment, enface
    or cause such Paying Agent to enface a memorandum of the amount
    and date of payment thereon (or, in the case of part payment of
    an NGN Temporary Global Note or an NGN Permanent Global Note
    cause the Principal Paying Agent to procure that the ICSDs make
    appropriate entries in their records to reflect such payment) or
    (b) in the case of payment in full, cause such Note,
    Receipt or Coupon to be surrendered or shall cancel or procure
    the same to be cancelled and shall certify or procure the
    certification of such cancellation.

 

    12.6  Noteholders
    to be treated as holding all Receipts and Coupons

 

    Wherever in this Trust Deed the Trustee is required or
    entitled to exercise a power, trust, authority or discretion
    under this Trust Deed, the Trustee shall, notwithstanding
    that it may have express notice to the contrary assume that each
    Noteholder is the holder of all Receipts, Coupons and Talons
    appertaining to each Note of which he is the holder.

 

    12.7  Regulated
    Activities

 

    Notwithstanding anything in this Trust Deed to the
    contrary, the Trustee shall not be required to do anything which
    might constitute a regulated activity for the purpose of the
    FSMA, unless it is authorised under the FSMA to do so.

 

    The Trustee shall have the discretion at any time (i) to
    delegate any of the functions which fall to be performed by an
    authorised person under the FSMA to any agent or person which
    has the necessary authorisations and licences and (ii) to
    apply for authorisation under the FSMA and perform any or all
    such functions itself if, in its absolute discretion, it
    considers it necessary, desirable or appropriate to do so.

 

		
	
    13.  
	
    Terms
    of Appointment

 

    By way of supplement to the Trustee Acts, it is expressly
    declared as follows:

    

    30

 

		
	
    13.1  
	
    Reliance
    on Information

 

    (a) Advice:  the Trustee may in relation
    to this Trust Deed act on the opinion or advice of or a
    certificate or any information obtained from any lawyer, banker,
    valuer, surveyor, broker, auctioneer, accountant or other expert
    (whether obtained by the Trustee, the Issuer, any Guarantor, any
    Subsidiary or any Agent) and shall not be responsible for any
    Liability occasioned by so acting; any such opinion, advice,
    certificate or information may be sent or obtained by letter,
    telegram, telex, email or facsimile transmission and the Trustee
    shall not be liable for acting on any opinion, advice,
    certificate or information purporting to be so conveyed although
    the same shall contain some error or shall not be authentic;

 

    (b) Certificate of Directors or Authorised
    Signatories:  the Trustee may call for and shall
    be at liberty to accept a certificate signed by two Directors
    and/or two
    Authorised Signatories of the Issuer or any Guarantor, as the
    case may be, or other person duly authorised on its behalf as to
    any fact or matter prima facie within the knowledge of the
    Issuer or the relevant Guarantor, as the case may be, as
    sufficient evidence thereof and a like certificate to the effect
    that any particular dealing, transaction or step or thing is, in
    the opinion of the person so certifying expedient, as sufficient
    evidence that it is expedient and the Trustee shall not be bound
    in any such case to call for further evidence or be responsible
    for any Liability that may be occasioned by its failing so to do;

 

    (c) Certificate of Auditors:  a
    certificate of the Auditors of the Issuer that in their opinion
    a Subsidiary is or is not or was or was not at any particular
    time or during any particular period a Material Subsidiary
    shall, in the absence of manifest error, be conclusive and
    binding on the Issuer, the Guarantors, the Trustee, the
    Noteholders, the Receiptholders and the Couponholders;

 

    (d) Resolution or direction of
    Noteholders:  the Trustee shall not be responsible
    for acting upon any resolution purporting to be a Written
    Resolution or to have been passed at any meeting of the
    Noteholders in respect whereof minutes have been made and signed
    or a direction of a specified percentage of Noteholders, even
    though it may subsequently be found that there was some defect
    in the constitution of the meeting or the passing of the
    resolution or the making of the directions or in the case of a
    Written Resolution in writing or a direction or a request it was
    not signed by the requisite number of Noteholders or that for
    any reason the resolution purporting to be a Written Resolution
    or to have been passed at any Meeting or the making of the
    directions was not valid or binding upon the Noteholders, the
    Receiptholders and the Couponholders;

 

    (e) Reliance on certification of clearing
    system:  the Trustee may call for any certificate
    or other document issued by Euroclear, Clearstream, Luxembourg
    or any other relevant clearing system in relation to any matter.
    Any such certificate or other document shall, in the absence of
    manifest error, be conclusive and binding for all purposes. Any
    such certificate or other document may comprise any form of
    statement or print out of electronic records

    

    31

 

    provided by the relevant clearing system (including
    Euroclear’s EUCLID or Clearstream, Luxembourg’s Cedcom
    system) in accordance with its usual procedures and in which the
    holder of a particular principal or nominal amount of the Notes
    is clearly identified together with the amount of such holding.
    The Trustee shall not be liable to any person by reason of
    having accepted as valid or not having rejected any certificate
    or other document to such effect purporting to be issued by
    Euroclear or Clearstream, Luxembourg or any other relevant
    clearing system and subsequently found to be forged or not
    authentic;

 

    (f) Noteholders as a class:  whenever in
    this Trust Deed the Trustee is required in connection with
    any exercise of its powers, trusts, authorities or discretions
    to have regard to the interests of the Noteholders, it shall
    have regard to the interests of the Noteholders as a class and
    in particular, but without prejudice to the generality of the
    foregoing, shall not be obliged to have regard to the
    consequences of such exercise for any individual Noteholder
    resulting from his or its being for any purpose domiciled or
    resident in, or otherwise connected with, or subject to the
    jurisdiction of, any particular territory or any political
    sub-division
    thereof and the Trustee shall not be entitled to require, nor
    shall any Noteholder, Receiptholder or Couponholder be entitled
    to claim, from the Issuer, the Guarantors, the Trustee or any
    other person any indemnification or payment in respect of any
    tax consequence of any such exercise upon individual
    Noteholders, Receiptholders or Couponholders except to the
    extent already provided for in Condition 12 (Taxation)
    and/or any
    undertaking given in addition thereto or in substitution
    therefor under this Trust Deed;

 

    (g) Trustee not responsible for
    investigations:  the Trustee shall not be
    responsible for, or for investigating any matter which is the
    subject of, any recital, statement, representation, warranty or
    covenant of any person contained in this Trust Deed, the
    Notes or any other agreement or document relating to the
    transactions herein or therein contemplated or for the
    execution, legality, effectiveness, adequacy, genuineness,
    validity, enforceability or admissibility in evidence thereof;

 

    (h) No obligation to monitor:  the Trustee
    shall be under no obligation to monitor or supervise the
    functions of any other person under the Notes or any other
    agreement or document relating to the transactions herein or
    therein contemplated and shall be entitled, in the absence of
    actual knowledge of a breach of obligation, to assume that each
    such person is properly performing and complying with its
    obligations;

 

    (i) Notes held by the Issuer:  in the
    absence of knowledge or express notice to the contrary, the
    Trustee may assume without enquiry (other than requesting a
    certificate of the Issuer or any Guarantor under
    sub-clause 8(f)
    (Notes held by Issuer and the Guarantors), that no Notes
    are for the time being held by or for the benefit of the Issuer,
    any Guarantor or any Subsidiary;

    

    32

 

    (j) Forged Notes:  the Trustee shall not
    be liable to the Issuer, any Guarantor or any Noteholder,
    Receiptholder or Couponholder by reason of having accepted as
    valid or not having rejected any Note, Receipt or Coupon as such
    and subsequently found to be forged or not authentic;

 

    (k) Events of Default:  the Trustee shall
    not be bound to give notice to any person of the execution of
    this Trust Deed or to take any steps to ascertain whether
    any Event of Default, Potential Event of Default, Change of
    Control or Change of Control Put Event has happened and, until
    it shall have actual knowledge or express notice to the
    contrary, the Trustee shall be entitled to assume that no such
    Event of Default, or Potential Event of Default, Change of
    Control or Change of Control Put Event has happened and that the
    Issuer and each Guarantor is observing and performing all the
    obligations on its part contained in the Notes, Receipts and
    Coupons and under this Trust Deed and no event has happened
    as a consequence of which any of the Notes may become repayable;

 

    (l) Legal Opinions:  the Trustee shall not
    be responsible to any person for failing to request, require or
    receive any legal opinion relating to any Notes or for checking
    or commenting upon the content of any such legal opinion and
    shall not be responsible for any Liability incurred thereby;

 

    (m) Authorised Amount:  the Trustee shall
    not be concerned, and need not enquire, as to whether or not any
    Notes are issued in breach of the Authorised Amount;

 

    (n) Trustee not Responsible:  the Trustee
    shall not be responsible for the execution, delivery, legality,
    effectiveness, adequacy, genuineness, validity, enforceability
    or admissibility in evidence of this Trust Deed or any
    other document relating thereto and shall not be liable for any
    failure to obtain any rating of Notes (where required), any
    licence, consent or other authority for the execution, delivery,
    legality, effectiveness, adequacy, genuineness, validity,
    performance, enforceability or admissibility in evidence of this
    Trust Deed or any other document relating thereto. In
    addition the Trustee shall not be responsible for the effect of
    the exercise of any of its powers, duties and discretions
    hereunder;

 

    (o) Freedom to Refrain:  notwithstanding
    anything else herein contained, the Trustee may refrain from
    doing anything which would or might in its opinion be contrary
    to any law of any jurisdiction or any directive or regulation of
    any agency or any state of which would or might otherwise render
    it liable to any person and may do anything which is, in its
    opinion, necessary to comply with any such law, directive or
    regulation;

 

    (p) Right to Deduct or
    Withhold:  notwithstanding anything contained in
    this Trust Deed, to the extent required by any applicable
    law, if the Trustee is or will be required to make any deduction
    or withholding from any distribution or payment made by it
    hereunder or if the Trustee is or will be otherwise charged to,
    or is or may become liable to, tax as a consequence of
    performing its duties hereunder whether as principal, agent or
    otherwise, and whether by reason of any assessment, prospective
    assessment or other imposition of liability to taxation of

    

    33

 

    whatsoever nature and whensoever made upon the Trustee, and
    whether in connection with or arising from any sums received or
    distributed by it or to which it may be entitled under this
    Trust Deed (other than in connection with its remuneration
    as provided for herein) or any investments or deposits from time
    to time representing the same, including any income or gains
    arising therefrom or any action of the Trustee in connection
    with the trusts of this Trust Deed (other than the
    remuneration herein specified) or otherwise, then the Trustee
    shall be entitled to make such deduction or withholding or, as
    the case may be, to retain out of sums received by it an amount
    sufficient to discharge any liability to tax which relates to
    sums so received or distributed or to discharge any such other
    liability of the Trustee to tax from the funds held by the
    Trustee upon the trusts of this Trust Deed; and

 

    (q) Reliance by Trustee:  any certificate
    or report of the Auditors or any other person called for by or
    provided to the Trustee (whether or not addressed to the
    Trustee) in accordance with or for the purposes of this
    Trust Deed may be relied upon by the Trustee as sufficient
    evidence of the facts stated therein notwithstanding that such
    certificate or report
    and/or any
    engagement letter or other document entered into by the Trustee
    in connection therewith contains a monetary or other limit on
    the liability of the Auditors or such other person in respect
    thereof and notwithstanding that the scope
    and/or basis
    of such certificate or report may be limited by any engagement
    or similar letter or by the terms of the certificate or report
    itself.

 

		
	
    13.2  
	
    Trustee’s
    powers and duties

 

    (a) Trustee’s determination:  The
    Trustee may determine whether or not a default in the
    performance or observance by the Issuer or any Guarantor of any
    obligation under the provisions of this Trust Deed or
    contained in the Notes, Receipts or Coupons is capable of remedy
    and if the Trustee shall certify that any such default is, in
    its opinion, not capable of remedy such certificate shall be
    conclusive and binding upon the Issuer, the Guarantors, the
    Noteholders, the Receiptholders and the Couponholders;

 

    (b) Determination of questions:  the
    Trustee as between itself and the Noteholders, the
    Receiptholders and the Couponholders shall have full power to
    determine all questions and doubts arising in relation to any of
    the provisions of this Trust Deed and every such
    determination, whether made upon a question actually raised or
    implied in the acts or proceedings of the Trustee, shall be
    conclusive and shall bind the Trustee, the Noteholders, the
    Receiptholders and the Couponholders;

 

    (c) Trustee’s discretion:  the
    Trustee shall (save as expressly otherwise provided herein) as
    regards all the trusts, powers, authorities and discretions
    vested in it by this Trust Deed or by operation of law have
    absolute and uncontrolled discretion as to the exercise or
    non-exercise thereof and the Trustee shall not be responsible
    for any Liability that may result from the exercise or
    non-exercise thereof but, whenever the Trustee is under the
    provisions of this Trust Deed bound to act at the request
    or direction of the Noteholders, the Trustee shall nevertheless
    not be so

    

    34

 

    bound unless first indemnified
    and/or
    provided with security
    and/or
    prefunded to its satisfaction against all actions, proceedings,
    claims and demands to which it may render itself liable and all
    Liabilities which it may incur by so doing;

 

    (d) Trustee’s consent:  any consent
    or approval given by the Trustee for the purposes of this
    Trust Deed may be given on such terms and subject to such
    conditions (if any) as the Trustee may require. The Trustee may
    give any consent or approval, exercise any power, authority or
    discretion or take any similar action (whether or not such
    consent, approval, power, authority, discretion or action is
    specifically referred to in this Trust Deed) if it is
    satisfied that the interests of the Noteholders will not be
    materially prejudiced thereby. For any avoidance of doubt, the
    Trustee shall not have any duty to the Noteholders in relation
    to such matters other than that which is contained in the
    preceding sentence;

 

    (e) Conversion of currency:  where it is
    necessary or desirable for any purpose in connection with this
    Trust Deed to convert any sum from one currency to another
    it shall (unless otherwise provided by this Trust Deed or
    required by law) be converted at such rate(s) of exchange, in
    accordance with such method and as at such date for the
    determination of such rate(s) of exchange as may be specified by
    the Trustee in its absolute discretion as relevant and any rate
    of exchange, method and date so specified shall be binding on
    the Issuer, the Guarantors, the Noteholders, the Receiptholders
    and the Couponholders;

 

    (f) Application of proceeds:  the Trustee
    shall not be responsible for the receipt or application by the
    Issuer of the proceeds of the issue of the Notes, the exchange
    of any Temporary Global Note for any Permanent Global Note or
    Notes in definitive form, the exchange of any Permanent Global
    Note for Notes in definitive form or the delivery of any Note,
    Receipt or Coupon to the persons entitled to them;

 

    (g) Error of judgment:  the Trustee shall
    not be liable for any error of judgment made in good faith by
    any officer or employee of the Trustee assigned by the Trustee
    to administer its corporate trust matters;

 

    (h) Agents:  the Trustee may, in the
    conduct of the trusts of this Trust Deed instead of acting
    personally, employ and pay an agent on any terms, whether or not
    a lawyer or other professional person, to transact or conduct,
    or concur in transacting or conducting, any business and to do
    or concur in doing all acts required to be done by the Trustee
    (including the receipt and payment of money) and the Trustee
    shall not be responsible for any Liability incurred by reason of
    the misconduct, omission or default on the part of any person
    appointed by it hereunder or be bound to supervise the
    proceedings or acts of any such person;

 

    (i) Delegation:  the Trustee may, in the
    execution and exercise of all or any of the trusts, powers,
    authorities and discretions vested in it by this
    Trust Deed, act by responsible officer(s) for the time
    being of the Trustee and the Trustee may also whenever it thinks
    fit, whether by power of attorney or otherwise, delegate to any
    person(s) or fluctuating body of persons (whether being a joint
    trustee of this Trust Deed or not) all or any of the
    trusts, powers,

    

    35

 

    authorities and discretions vested in it by this Trust Deed
    and any such delegation may be made upon such terms and
    conditions and subject to such regulations (including power to
    sub-delegate
    with the consent of the Trustee) as the Trustee may think fit in
    the interests of the Noteholders and the Trustee shall not be
    bound to supervise the proceedings or acts of and shall not in
    any way or to any extent be responsible for any Liability
    incurred by reason of the misconduct, omission or default on the
    part of such delegate or
    sub-delegate;

 

    (j) Custodians and nominees:  the Trustee
    may appoint and pay any person to act as a custodian or nominee
    on any terms in relation to such assets of the trust as the
    Trustee may determine, including for the purpose of depositing
    with a custodian this Trust Deed or any document relating
    to the trust created hereunder and the Trustee shall not be
    responsible for any loss, liability, expense, demand, cost,
    claim or proceedings incurred by reason of the misconduct,
    omission or default on the part of any person appointed by it
    hereunder or be bound to supervise the proceedings or acts of
    any such person; the Trustee is not obliged to appoint a
    custodian if the Trustee invests in securities payable to bearer;

 

    (k) Maintenance of ratings:  the Trustee
    shall have no responsibility whatsoever to the Issuer, the
    Guarantors, any Noteholder, Receiptholder or Couponholder or any
    other person for the maintenance of or failure to maintain any
    rating of any of the Notes by any rating agency;

 

    (l) Confidential information:  the Trustee
    shall not (unless required by law or ordered so to do by a court
    of competent jurisdiction) be required to disclose to any
    Noteholder, Receiptholder or Couponholder confidential
    information or other information made available to the Trustee
    by the Issuer or any Guarantor in connection with this
    Trust Deed and no Noteholder, Receiptholder or Couponholder
    shall be entitled to take any action to obtain from the Trustee
    any such information; and

 

    (m) Responsibility for loss:  the Trustee
    shall not be liable or responsible for any Liabilities or
    inconvenience which may result from anything properly done or
    properly omitted to be done by it in accordance with the
    provisions of this Trust Deed.

 

		
	
    13.3  
	
    Financial
    matters

 

    (a) Professional charges:  Any trustee
    being a banker, lawyer, broker or other person engaged in any
    profession or business shall be entitled to charge and be paid
    all usual professional and other charges for business transacted
    and acts done by him or his partner or firm on matters arising
    in connection with the trusts of this Trust Deed and also
    his properly incurred charges in addition to disbursements for
    all other work and business done and all time spent by him or
    his partner or firm on matters arising in connection with this
    Trust Deed, including matters which might or should have
    been attended to in person by a trustee not being a banker,
    lawyer, broker or other professional person;

    

    36

 

    (b) Expenditure by the Trustee:  nothing
    contained in this Trust Deed shall require the Trustee to
    expend or risk its own funds or otherwise incur any financial
    liability in the performance of its duties or the exercise of
    any right, power, authority or discretion hereunder if it has
    grounds for believing the repayment of such funds or adequate
    indemnity against, or security for, such risk or liability is
    not assured to it; and

 

    (c) Trustee may enter into financial transactions with
    the Issuer and Guarantors:  no Trustee and no
    director or officer of any corporation being a Trustee hereof
    shall by reason of the fiduciary position of such Trustee be in
    any way precluded from making any contracts or entering into any
    transactions in the ordinary course of business with the Issuer,
    any Guarantor or any Subsidiary, or any person or body corporate
    directly or indirectly associated with the Issuer, any
    Guarantor, or any Subsidiary, or from accepting the trusteeship
    of any other debenture stock, debentures or securities of the
    Issuer or any Subsidiary, any Guarantor or any person or body
    corporate directly or indirectly associated with the Issuer or
    any Subsidiary, and neither the Trustee nor any such director or
    officer shall be accountable to the Noteholders, the
    Receiptholders, the Couponholders, the Issuer, any Guarantor or
    any Subsidiary, or any person or body corporate directly or
    indirectly associated with the Issuer, any Guarantor or any
    Subsidiary, for any profit, fees, commissions, interest,
    discounts or share of brokerage earned, arising or resulting
    from any such contracts or transactions and the Trustee and any
    such director or officer shall also be at liberty to retain the
    same for its or his own benefit.

 

		
	
    13.4  
	
    Disapplication

 

    Section 1 of the Trustee Act 2000 shall not apply to the
    duties of the Trustee in relation to the trusts constituted by
    this Trust Deed. Where there are any inconsistencies
    between the Trustee Acts and the provisions of this
    Trust Deed, the provisions of this Trust Deed shall,
    to the extent allowed by law, prevail and, in the case of any
    such inconsistency with the Trustee Act 2000, the provisions of
    this Trust Deed shall constitute a restriction or exclusion
    for the purposes of that Act.

 

		
	
    13.5  
	
    Trustee
    Liability

 

    (a) Nothing in this Trust Deed shall in any case in
    which the Trustee has failed to show the degree of care and
    diligence required of it as trustee having regard to the
    provisions of this Trust Deed conferring on it any trusts,
    powers, authorities or discretions exempt the Trustee from or
    indemnify it against any liability for breach of trust of which
    it may be guilty in relation to its duties under this
    Trust Deed.

 

    (b) Notwithstanding any provision of this Trust Deed
    to the contrary, the Trustee shall not in any event be liable
    for special, indirect, punitive or consequential loss or damage
    of any kind whatsoever (including but not limited to lost
    profits, goodwill, reputation, business opportunity or
    anticipated saving), whether or not foreseeable, even if the
    Trustee has been advised of the likelihood of such loss or
    damage and regardless of whether the claim for loss or

    

    37

 

    damage is made in negligence, for breach of contract, breach of
    trust or otherwise; provided however, that this clause shall not
    be deemed to apply in the event of a determination of fraud on
    the part of the Trustee in a judgement by a court having
    jurisdiction.

 

		
	
    14.  
	
    Costs
    and Expenses

 

		
	
    14.1  
	
    Remuneration

 

    (a) Normal remuneration:  The Issuer shall
    pay to the Trustee remuneration for its services as trustee as
    from the date of this Trust Deed, such remuneration to be
    at such rate as may from time to time be agreed between the
    Issuer and the Trustee. Such remuneration shall be payable in
    advance on the anniversary of the date hereof in each year and
    the first payment shall be made on the date hereof. Such
    remuneration shall accrue from day to day and be payable (in
    priority to payments to the Noteholders, Receiptholders or
    Couponholders up to and including the date when, all the Notes
    having become due for redemption, the redemption moneys and
    interest thereon to the date of redemption have been paid to the
    Principal Paying Agent or the Trustee, provided that if upon due
    presentation (if required pursuant to the Conditions) of any
    Note, Receipt or Coupon or any cheque, payment of the moneys due
    in respect thereof is improperly withheld or refused,
    remuneration will be deemed not to have ceased to accrue and
    will commence again to accrue until payment to such Noteholder,
    Receiptholder or Couponholder is made).

 

    (b) Extra remuneration:  In the event of
    the occurrence of an Event of Default, a Potential Event of
    Default, a Change of Control or a Change of Control Put Event or
    the Trustee considering it expedient or necessary or being
    requested by the Issuer or any Guarantor to undertake duties
    which the Trustee and the Issuer or such Guarantor agree to be
    of an exceptional nature or otherwise outside the scope of the
    normal duties of the Trustee under this Trust Deed, the
    Issuer shall pay to the Trustee such additional remuneration as
    shall be agreed between them.

 

    (c) Value added tax:  The Issuer shall in
    addition pay to the Trustee an amount equal to the amount of any
    value added tax or similar tax chargeable in respect of its
    remuneration under this Trust Deed.

 

    (d) Failure to agree:  In the event of the
    Trustee and the Issuer failing to agree:

 

    (i) (in a case to which
    sub-clause 14.1(a)
    applies) upon the amount of the remuneration; or

 

    (ii) (in a case to which
    sub-clause 14.1(b)
    applies) upon whether such duties shall be of an exceptional
    nature or otherwise outside the scope of the normal duties of
    the Trustee under this Trust Deed, or upon such additional
    remuneration,

 

    such matters shall be determined by a merchant bank (acting as
    an expert and not as an arbitrator) selected by the Trustee and
    approved by the Issuer or, failing such approval, nominated (on
    the application of the Trustee) by the

    

    38

 

    President for the time being of The Law Society of England and
    Wales (the expenses involved in such nomination and the fees of
    such merchant bank being payable by the Issuer) and the
    determination of any such merchant bank shall be final and
    binding upon the Trustee and the Issuer.

 

    (e) Expenses:  The Issuer shall also pay
    or discharge all costs, charges and expenses properly incurred
    by the Trustee in relation to the preparation and execution of,
    the exercise of its powers and the performance of its duties
    under, and in any other manner in relation to, this
    Trust Deed, including but not limited to legal and
    travelling expenses and any stamp, issue, registration,
    documentary and other taxes or duties paid or payable by the
    Trustee in connection with any action taken or contemplated by
    or on behalf of the Trustee for enforcing, or resolving any
    doubt concerning, or for any other purpose in relation to, this
    Trust Deed.

 

    (f) Indemnity:  Without prejudice to the
    right of indemnity by law given to trustees, the Issuer shall
    indemnify the Trustee and every Appointee and keep it or him
    indemnified against all Liabilities to which it or he may be or
    become subject or which may be properly incurred by it or him in
    the preparation or execution or purported execution of any of
    its or his trusts, powers authorities and discretions under this
    Trust Deed or its or his functions under any such
    appointment or in respect of any other matter or thing done or
    omitted in any way relating to the Trust Deed or any such
    appointment (including all Liabilities incurred in disputing or
    defending the foregoing). The Trustee may use reasonable
    endeavours to provide to the Issuer written evidence of any
    Liabilities referred to in this Clause.

 

    (g) Payment of amounts due:  All amounts
    due and payable pursuant to sub clauses 14.1(e)
    (Expenses) and 14.1(f) (Indemnity) shall be
    payable by the Issuer on the date specified in a demand by the
    Trustee; the rate of interest applicable to such payments shall
    be one per cent. per annum above the base rate from time to time
    of HSBC Bank plc and interest shall accrue:

 

    (i) in the case of payments made by the Trustee prior to
    the date of the demand, from the date on which the payment was
    made or such later date as specified in such demand;

 

    (ii) in the case of payments made by the Trustee on or
    after the date of the demand, from the date specified in such
    demand, which date shall not be a date earlier than the date
    such payments are made.

 

    All remuneration payable to the Trustee shall carry interest at
    the rate specified in this Clause 14.1(g) (Payment of
    amounts due) from the due date thereof.

 

    (h) Apportionment of expenses:  The
    Trustee shall apportion the costs, charges, expenses and
    liabilities incurred by the Trustee in the preparation and
    execution of the trusts of this Trust Deed (including
    remuneration of the

    

    39

 

    Trustee) between the several Series of Notes in such manner and
    in such amounts as it shall, in its absolute discretion,
    consider appropriate.

 

    (i) Discharges:  Unless otherwise
    specifically stated in any discharge of this Trust Deed the
    provisions of this Clause 13.5(a) (Costs and
    Expenses) shall continue in full force and effect
    notwithstanding such discharge.

 

    (j) Payments:  All payments to be made by
    the Issuer to the Trustee under this Trust Deed shall be
    made free and clear of, and without withholding or deduction
    for, any taxes, duties, assessments or governmental charges of
    whatever nature imposed, levied, collected, withheld or assessed
    by or within any relevant jurisdiction or any authority therein
    or thereof having power to tax, unless such withholding or
    deduction is required by law. In that event, the Issuer shall
    pay such additional amount as will, after such deduction or
    withholding has been made, leave the Trustee with the full
    amount which would have been received by it had no such
    withholding or deduction been required.

 

		
	
    14.2  
	
    Stamp
    duties

 

    The Issuer will pay all stamp duties, registration taxes,
    capital duties and other similar fees, duties or taxes (if any),
    including interest and penalties, payable on or in connection
    with (a) the constitution and issue of the Notes, Receipts
    and Coupons, (b) the initial delivery of the Notes,
    (c) any action taken by the Trustee (or any Noteholder,
    Receiptholder or Couponholder where permitted or required under
    this Trust Deed so to do) to enforce the provisions of the
    Notes or this Trust Deed and (d) the execution and
    delivery of this Trust Deed. If the Trustee (or any
    Noteholder, Receiptholder, or Couponholder where permitted under
    this Trust Deed so to do) shall take any proceedings
    against the Issuer in any other jurisdiction and if for the
    purpose of any such proceedings this Trust Deed or any Note
    is taken into any such jurisdiction and any stamp duties or
    other duties or taxes become payable thereon in any such
    jurisdiction, the Issuer will pay (or reimburse the person
    making payment of) such stamp duties or other duties or taxes
    (including penalties).

 

		
	
    14.3  
	
    Exchange
    rate indemnity

 

    (a) Currency of Account and Payment:  The
    Contractual Currency is the sole currency of account and payment
    for all sums payable by the Issuer and the Guarantors under or
    in connection with this Trust Deed, the Notes, the Receipts
    and the Coupons including damages;

 

    (b) Extent of Discharge:  an amount
    received or recovered in a currency other than the Contractual
    Currency (whether as a result of, or of the enforcement of, a
    judgment or order of a court of any jurisdiction, in the winding
    up or dissolution of the Issuer or any Guarantor or otherwise)
    by the Trustee or any Noteholder, Receiptholder or Couponholder
    in respect of any sum expressed to be due to it from the Issuer
    or any Guarantor will only discharge the Issuer or any Guarantor
    to the extent of the Contractual Currency amount which the
    recipient is able to purchase

    

    40

 

    with the amount so received or recovered in that other currency
    on the date of that receipt or recovery (or, if it is not
    practicable to make that purchase on that date, on the first
    date on which it is practicable to do so);

 

    (c) Indemnity:  if that Contractual
    Currency amount is less than the Contractual Currency amount
    expressed to be due to the recipient under this Trust Deed
    or the Notes, the Receipts or the Coupons, the Issuer and the
    Guarantor will indemnify the Trustee or any Noteholder,
    Receiptholder or Couponholder against any Liability sustained by
    it as a result. In any event, the Issuer and the Guarantor will
    indemnify the recipient against the cost of making any such
    purchase; and

 

    (d) any deficiency arising or resulting from any variation
    in rates of exchange between (i) the date as of which the
    local currency equivalent of the amounts due or contingently due
    under this Trust Deed (other than this Clause) is
    calculated for the purposes of any bankruptcy, insolvency or
    liquidation of the Issuer or, as the case may be, the Guarantor
    and (ii) the final date for ascertaining the amount of
    claims in such bankruptcy, insolvency or liquidation. The amount
    of such deficiency shall be deemed not to be reduced by any
    variation in rates of exchange occurring between the said final
    date and the date of any distribution of assets in connection
    with any such bankruptcy, insolvency or liquidation.

 

		
	
    14.4  
	
    Indemnities
    separate

 

    The indemnities in this Clause 13.5(a) constitute separate
    and independent obligations from the other obligations in this
    Trust Deed, will give rise to separate and independent
    causes of action, will apply irrespective of any indulgence
    granted by the Trustee
    and/or any
    Noteholder, Receiptholder or Couponholder and will continue in
    full force and effect despite any judgment, order, claim or
    proof for a liquidated amount in respect of any sum due under
    this Trust Deed or the Notes, the Receipts or the Coupons
    or any other judgment or order. Any such Liability as referred
    to in
    sub-clause 14.3(c)
    (Indemnity) shall be deemed to constitute a Liability
    suffered by the Trustee, the Noteholders, the Receiptholders and
    the Couponholders and no proof or evidence of any actual
    Liability shall be required by the Issuer or any Guarantor or
    its liquidator or liquidators.

 

		
	
    15.  
	
    Appointment
    and Retirement

 

		
	
    15.1  
	
    Appointment
    of Trustees

 

    The power of appointing new trustees of this Trust Deed
    shall be vested in the Issuer but no person shall be appointed
    who shall not previously have been approved by an Extraordinary
    Resolution of the Noteholders. A trust corporation may be
    appointed sole trustee hereof but subject thereto there shall be
    at least two trustees hereof one at least of which shall be a
    trust corporation. Any appointment of a new trustee hereof shall
    as soon as practicable thereafter be notified by the Issuer to
    the Agents and the Noteholders. The Noteholders shall together
    have the power, exercisable by Extraordinary Resolution, to
    remove any trustee or trustees for the time being hereof. The
    removal of any trustee shall not become effective unless there
    remains a trustee hereof (being a trust corporation) in office
    after such removal. If, in such circumstances, no appointment of
    such a new trustee has become effective within 60 days of
    the date of such Extraordinary Resolution, the Trustee shall be
    entitled to appoint a

    

    41

 

    Trust Corporation as trustee of this Trust Deed, but
    no such appointment shall take effect unless previously approved
    by an Extraordinary Resolution.

 

		
	
    15.2  
	
    Co-trustees

 

    Notwithstanding the provisions of Clause 15.1
    (Appointment of Trustees), the Trustee may, upon giving
    prior notice to the Issuer and the Guarantors but without the
    consent of the Issuer or the Guarantors or the Noteholders, the
    Receiptholders or the Couponholders, appoint any person
    established or resident in any jurisdiction (whether a trust
    corporation or not) to act either as a separate trustee or as a
    co-trustee jointly with the Trustee:

 

    (a) if the Trustee considers such appointment to be in the
    interests of the Noteholders, the Receiptholders or the
    Couponholders; or for the purposes of conforming to any legal
    requirements, restrictions or conditions in any jurisdiction in
    which any particular act or acts are to be performed; or

 

    (b) for the purposes of obtaining a judgment in any
    jurisdiction or the enforcement in any jurisdiction either of a
    judgment already obtained or of this Trust Deed.

 

		
	
    15.3  
	
    Attorneys

 

    The Issuer and each Guarantor hereby irrevocably appoints the
    Trustee to be its attorney in its name and on its behalf to
    execute any such instrument of appointment. Such a person shall
    (subject always to the provisions of this Trust Deed) have
    such trusts, powers, authorities and discretions (not exceeding
    those conferred on the Trustee by this Trust Deed) and such
    duties and obligations as shall be conferred on such person or
    imposed by the instrument of appointment. The Trustee shall have
    power in like manner to remove any such person. Such
    remuneration as the Trustee may pay to any such person, together
    with any attributable Liabilities incurred by it in performing
    its function as such separate trustee or co-trustee, shall for
    the purposes of this Trust Deed be treated as Liabilities
    incurred by the Trustee.

 

		
	
    15.4  
	
    Retirement
    of Trustees

 

    Any Trustee for the time being of this Trust Deed may
    retire at any time upon giving not less than 60 days’
    notice in writing to the Issuer without assigning any reason
    thereof and without being responsible for any Liabilities
    occasioned by such retirement. The retirement of any Trustee
    shall not become effective unless there remains a trustee hereof
    (being a trust corporation) in office after such retirement. The
    Issuer hereby covenants that in the event of the only trustee
    hereof which is a trust corporation giving notice under this
    Clause it shall use its reasonable endeavours to procure a new
    trustee, being a trust corporation, to be appointed and if the
    Issuer has not procured the appointment of a new trustee within
    30 days of the expiry of the Trustee notice referred to in
    this Clause 15.4, the Trustee shall be entitled to procure
    forthwith a new trustee.

    

    42

 

		
	
    15.5  
	
    Competence
    of a majority of Trustees

 

    Whenever there shall be more than two trustees hereof the
    majority of such trustees shall (provided such majority includes
    a trust corporation) be competent to execute and exercise all
    the trusts, powers, authorities and discretions vested by this
    Trust Deed in the Trustee generally.

 

		
	
    15.6  
	
    Powers
    additional

 

    The powers conferred by this Trust Deed upon the Trustee
    shall be in addition to any powers which may from time to time
    be vested in it by general law or as the holder of any of the
    Notes, the Receipts or the Coupons.

 

		
	
    15.7  
	
    Merger

 

    Any corporation into which the Trustee may be merged or
    converted or with which it may be consolidated, or any
    corporation resulting from any merger, conversion or
    consolidation to which the Trustee shall be a party, or any
    corporation succeeding to all or substantially all the corporate
    trust business of the Trustee, shall be the successor of the
    Trustee hereunder, provided such corporation shall be otherwise
    qualified and eligible under this Clause, without the execution
    or filing of any paper or any further act on the part of any of
    the parties hereto.

 

		
	
    16.  
	
    Notices

 

		
	
    16.1  
	
    Addresses
    for notices

 

    All notices and other communications hereunder shall be made in
    writing and in English (by letter, telex or fax) and shall be
    sent as follows:

 

    (a) Issuer: if to the Issuer, to it at:

 

    InterContinental Hotels Group PLC

    Broadwater Park

    Denham

    Buckinghamshire UB9 5HR

    Fax: 01895 512 101

    Attention: The General Counsel and Company Secretary

 

    (b) Guarantors: if to the Guarantors, to them
    c/o the
    Issuer

 

    (c) Trustee: if to the Trustee, to it at:

 

    HSBC Corporate Trustee Company (UK) Limited

    8 Canada Square

    London E14 5HQ

    Fax: +44 20 7991 4350

    

    43

 

    Attention: CTLA Trustee Service Administration

 

		
	
    16.2  
	
    Effectiveness

 

    Every notice or other communication sent in accordance with
    Clause 15.1 shall be effective as follows:

 

    (a) Letter or fax:  if sent by letter, it
    shall be deemed to have been delivered 7 days after the
    time of despatch and if sent by fax it shall be deemed to have
    been delivered at the time of despatch; and

 

    (b) Telex:  if sent by telex, upon receipt
    by the sender of the addressee’s answerback at the end of
    transmission;

 

    provided that any such notice or other communication which would
    otherwise take effect after 4.00 p.m. on any particular day
    shall not take effect until 10.00 a.m. on the immediately
    succeeding business day in the place of the addressee.

 

		
	
    16.3  
	
    No
    Notice to Couponholders or Receiptholders

 

    Neither the Trustee nor the Issuer nor any Guarantor shall be
    required to give any notice to the Couponholders or
    Receiptholders for anypurpose under this Trust Deed and the
    Couponholders and Receiptholders shall be deemed for all
    purposes to have notice of the contents of any notice given to
    the Noteholders in accordance with Condition 19.

 

		
	
    17.  
	
    Law
    and Jurisdiction

 

		
	
    17.1  
	
    Governing
    law

 

    This Trust Deed and the Notes, and any non-contractual
    obligations arising out of or in connection with this
    Trust Deed and the Notes, are governed by English law.

 

		
	
    17.2  
	
    English
    courts

 

    The courts of England have exclusive jurisdiction to settle any
    dispute (a Dispute), arising out of or in
    connection with this Trust Deed or the Notes (including a
    dispute regarding the existence, validity or termination of this
    Trust Deed or the Notes or any non-contractual obligation
    arising out of or in connection with them) or the consequences
    of their nullity.

 

		
	
    17.3  
	
    Appropriate
    forum

 

    The parties agree that the courts of England are the most
    appropriate and convenient courts to settle any Dispute and,
    accordingly, that they will not argue to the contrary.

 

		
	
    18.  
	
    Severability

 

    In case any provision in or obligation under this
    Trust Deed shall be invalid, illegal or unenforceable in
    any jurisdiction, the validity, legality and enforceability of
    the remaining provisions or obligations, or of such provision

    44

 

    or obligation in any other jurisdiction, shall not in any way be
    affected or impaired thereby.

 

		
	
    19.  
	
    Contracts
    (Rights of Third Parties) Act 1999

 

    No person shall have any right to enforce any provision of this
    Trust Deed under the Contracts (Rights of Third Parties)
    Act 1999, but this does not affect any right or remedy of a
    third party which exists or is available apart from that Act.

 

		
	
    20.  
	
    Counterparts

 

    This Trust Deed may be executed in any number of
    counterparts, each of which shall be deemed an original.

 

    IN WITNESS
    WHEREOF this Trust Deed has been executed as a
    deed by the parties hereto and is intended to be and is hereby
    delivered on the date first before written.

    

    45

 

    SCHEDULE 1

 

    TERMS AND
    CONDITIONS OF THE NOTES

 

    The following is the text of the terms and conditions which, as
    supplemented, amended
    and/or
    replaced by the relevant Final Terms, will be endorsed on each
    Note in definitive form issued under the Programme. The terms
    and conditions applicable to any Note in global form will differ
    from those terms and conditions which would apply to the Note
    were it in definitive form to the extent described under
    “Summary of Provisions Relating to the Notes while in
    Global Form” below.

 

		
	
    1.  
	
    Introduction

 

    (a) Programme

 

    InterContinental Hotels Group PLC (the
    “Issuer”) has established a Euro Medium Term
    Note Programme (the “Programme”) for the
    issuance of up to £750,000,000 in aggregate principal
    amount of notes (the “Notes”) unconditionally
    and irrevocably guaranteed by Six Continents Limited
    (“Six Continents”) and by InterContinental
    Hotels Limited (“InterContinental” and,
    together with Six Continents, each a
    “Guarantor” and together, the
    “Guarantors”).

 

    (b) Final
    Terms

 

    Notes issued under the Programme are issued in series (each a
    “Series”) and each Series may comprise one or
    more tranches (each a “Tranche”) of Notes. Each
    Tranche is the subject of final terms (the “Final
    Terms”) which supplements these terms and conditions
    (the “Conditions”). The terms and conditions
    applicable to any particular Tranche of Notes are these
    Conditions as supplemented, amended
    and/or
    replaced by the relevant Final Terms. In the event of any
    inconsistency between these Conditions and the relevant Final
    Terms, the relevant Final Terms shall prevail.

 

    (c) Trust Deed

 

    The Notes are constituted by, have the benefit of and are in all
    respects subject to a trust deed dated 27 November 2009
    (the “Trust Deed”) between the Issuer, the
    Guarantors and HSBC Corporate Trustee Company (UK) Limited (the
    “Trustee”, which expression shall include all
    persons for the time being the trustee or trustees under the
    Trust Deed) as trustee for the Noteholders (as defined
    below).

 

    (d) Agency
    Agreement

 

    The Notes are the subject of an issue and paying agency
    agreement dated 27 November 2009 (the “Agency
    Agreement”) between the Issuer, the Guarantors, HSBC
    Bank plc as principal paying agent (the “Principal
    Paying Agent”, which expression includes any successor
    principal paying agent appointed from time to time in connection
    with the Notes) and the Trustee.

    

    46

 

    (e) Guarantees

 

    Each of the Guarantors has in the Trust Deed given an
    unconditional and irrevocable guarantee (each a
    “Guarantee” and together, the
    “Guarantees”) on a joint and several basis for
    the due payment of all sums expressed to be payable by the
    Issuer under the Trust Deed, the Notes and the Coupons.

 

    (f) The
    Notes

 

    All subsequent references in these Conditions to
    “Notes” are to the Notes which are the subject
    of the relevant Final Terms. Copies of the relevant Final Terms
    are available for viewing during normal business hours and
    copies may be obtained from the Specified Office(s) of the
    Paying Agent(s), the initial Specified Office of the Principal
    Paying Agent being set out at the end of these Conditions.

 

    (g) Summaries

 

    Certain provisions of these Conditions are summaries of the
    Trust Deed and the Agency Agreement and are subject to
    their detailed provisions. The holders of the Notes (the
    “Noteholders”) and the holders of the related
    interest coupons, if any, (the “Couponholders”
    and the “Coupons”, respectively) are entitled
    to the benefit of, are bound by, and are deemed to have notice
    of, all the provisions of the Trust Deed and the Agency
    Agreement applicable to them. Copies of the Trust Deed and
    the Agency Agreement are available for inspection by Noteholders
    during normal business hours at the Specified Office(s) of the
    Paying Agent(s).

 

		
	
    2.  
	
    Interpretation

 

    (a) Definitions

 

    In these Conditions the following expressions have the following
    meanings:

 

    “Accrual Yield” has the meaning given in the
    relevant Final Terms;

 

    “Additional Business Centre(s)” means the city
    or cities specified as such in the relevant Final Terms;

 

    “Additional Financial Centre(s)” means the city
    or cities specified as such in the relevant Final Terms;

 

    “Additional Rating Agency” means Moody’s
    and Fitch;

 

    “Borrowings” means, as at any particular time,
    the aggregate outstanding principal, capital or nominal amount
    (and any fixed or minimum premium payable on redemption) of the
    Financial Indebtedness of members of the Group, other than:

 

    (a) any indebtedness referred to in paragraph (g) of
    the definition of Financial Indebtedness;

 

    (b) any Project Finance Indebtedness; and

    

    47

 

    (c) any indebtedness referred to in paragraphs (f)(ii),
    (i) and (j) of the definition of Financial
    Indebtedness except, in the case of paragraphs (i) and (j),
    to the extent any such obligation or liability specified in such
    paragraphs has been provided for in the annual audited
    consolidated financial statements or interim unaudited
    consolidated financial statements of the Group or is disclosed
    as a contingency in the notes thereto and is quantified,

 

    and deducting, to the extent included, amounts attributable to
    interests of third parties in members of the Group.

 

    For this purpose, any amount outstanding or repayable in a
    currency other than U.S.$ shall on that day be taken into
    account in its U.S.$ equivalent at the rate of exchange that
    would have been used had an audited consolidated balance sheet
    of the Group been prepared as at that day in accordance with
    IFRS as applicable to the Original Financial Statements;

 

    “Business Day” means:

 

    (a) in relation to any sum payable in euro, a TARGET
    Settlement Day and a day on which commercial banks and foreign
    exchange markets settle payments generally in each (if any)
    Additional Business Centre; and

 

    (b) in relation to any sum payable in a currency other than
    euro, a day on which commercial banks and foreign exchange
    markets settle payments generally in London, in the Principal
    Financial Centre of the relevant currency and in each (if any)
    Additional Business Centre;

 

    “Business Day Convention”, in relation to any
    particular date, has the meaning given in the relevant Final
    Terms and, if so specified in the relevant Final Terms, may have
    different meanings in relation to different dates and, in this
    context, the following expressions shall have the following
    meanings:

 

    (a) “Following Business Day Convention”
    means that the relevant date shall be postponed to the first
    following day that is a Business Day;

 

    (b) “Modified Following Business Day
    Convention” or “Modified Business Day
    Convention” means that the relevant date shall be
    postponed to the first following day that is a Business Day
    unless that day falls in the next calendar month in which case
    that date will be the first preceding day that is a Business Day;

 

    (c) “Preceding Business Day Convention”
    means that the relevant date shall be brought forward to the
    first preceding day that is a Business Day;

 

    (d) “FRN Convention”, “Floating
    Rate Convention” or “Eurodollar
    Convention” means that each relevant date shall be the
    date which numerically corresponds to the preceding such date in
    the calendar month which is

    

    48

 

    the number of months specified in the relevant Final Terms as
    the Specified Period after the calendar month in which the
    preceding such date occurred, provided, however, that:

 

    (i) if there is no such numerically corresponding day in
    the calendar month in which any such date should occur, then
    such date will be the last day which is a Business Day in that
    calendar month;

 

    (ii) if any such date would otherwise fall on a day which
    is not a Business Day, then such date will be the first
    following day which is a Business Day unless that day falls in
    the next calendar month, in which case it will be the first
    preceding day which is a Business Day; and

 

    (iii) if the preceding such date occurred on the last day
    in a calendar month which was a Business Day, then all
    subsequent such dates will be the last day which is a Business
    Day in the calendar month which is the specified number of
    months after the calendar month in which the preceding such date
    occurred; and

 

    (e) “No Adjustment” means that the
    relevant date shall not be adjusted in accordance with any
    Business Day Convention;

 

    “Calculation Agent” means the Principal Paying
    Agent or such other Person specified in the relevant Final Terms
    as the party responsible for calculating the Rate(s) of Interest
    and Interest Amount(s)
    and/or such
    other amount(s) as may be specified in the relevant Final Terms;

 

    “Calculation Amount” has the meaning given in
    the relevant Final Terms;

 

    a “Change of Control” will be deemed to have
    occurred if:

 

    (a) any person or any persons acting in concert (as defined
    in the City Code on Takeovers and Mergers), other than a holding
    company (as defined in Section 1159 of the Companies Act
    2006) whose shareholders are or are to be substantially
    similar to the pre-existing shareholders of the Issuer, shall
    become interested (within the meaning of Part 22 of the
    Companies Act 2006) in (A) more than 50 per cent.
    of the issued or allotted ordinary share capital of the Issuer
    or (B) shares in the capital of the Issuer carrying more
    than 50 per cent. of the voting rights normally exercisable
    at a general meeting of the Issuer; or

 

    (b) any person or any persons acting in concert (as defined
    in the City Code on Takeovers and Mergers), other than a holding
    company (as defined in Section 1159 of the Companies Act
    2006) whose shareholders are or are to be substantially
    similar to the pre-existing shareholders of any direct or
    indirect holding company of the Issuer, shall become interested
    (within the meaning of Part 22 of the Companies Act
    2006) in (A) more than 50 per cent. of the
    issued or allotted ordinary share capital of any direct or
    indirect holding company of the Issuer or (B) shares in the
    capital of any direct or indirect holding company of the Issuer
    carrying more than 50 per cent. of the voting rights
    normally exercisable at a general meeting of the any such direct
    or indirect holding company of the Issuer;

    

    49

 

    “Change of Control Optional
    Redemption Amount” means, in respect of any Note,
    its principal amount or such other amount as may be specified
    in, or determined in accordance with, the relevant Final Terms;

 

    “Change of Control Optional
    Redemption Date” has the meaning given in the
    relevant Final Terms;

 

    “Change of Control Period” means the period
    commencing on the Relevant Announcement Date and ending
    90 days after the Change of Control (or such longer period
    for which the Notes are under consideration (such consideration
    having been announced publicly within the period ending
    90 days after the Change of Control) for rating review or,
    as the case may be, rating by a Rating Agency, such period not
    to exceed 60 days after the public announcement of such
    consideration);

 

    a “Change of Control Put Event” will be deemed
    to occur if a Change of Control has occurred and:

 

    (a) on the Relevant Announcement Date, the Notes carry from
    any Rating Agency:

 

    (i) an investment grade credit rating (Baa3/BBB-, or
    equivalent, or better), and such rating from any Rating Agency
    is, within the Change of Control Period, either downgraded to a
    Non-Investment Grade Rating or withdrawn and is not, within the
    Change of Control Period, subsequently (in the case of a
    downgrade) upgraded or (in the case of a withdrawal) reinstated
    to an investment grade credit rating by such Rating
    Agency; or

 

    (ii) a Non-Investment Grade Rating and such rating from any
    Rating Agency is, within the Change of Control Period, either
    downgraded by one or more notches (by way of example, Bal to Ba2
    being one notch) or withdrawn and is not, within the Change of
    Control Period, subsequently (in the case of a downgrade)
    upgraded or (in the case of a withdrawal) reinstated to its
    earlier credit rating or better by such Rating Agency; or

 

    (iii) no credit rating and a Negative Rating Event also
    occurs within the Change of Control Period, provided that if, at
    the time of the occurrence of the Change of Control, the Notes
    carry a credit rating from more than one Rating Agency, at least
    one of which is investment grade, then subparagraph
    (i) will apply; and

    

    50

 

    (b) in making any decision to downgrade or withdraw a
    credit rating pursuant to paragraphs (i) and
    (ii) above or not to award a credit rating of at least
    investment grade as described in paragraph (ii) of the
    definition of “Negative Rating Event”, the relevant
    Rating Agency announces publicly or confirms in writing to the
    Issuer or the Trustee that such decision(s) resulted, in whole
    or in part, from the occurrence of the Change of Control or the
    Relevant Potential Change of Control Announcement;

 

    “Change of Control Put Event Notice” means the
    notice to be given pursuant to Condition 10(f) (Change of
    Control redemption) by the Issuer or, as the case may be,
    the Trustee to the Noteholders in accordance with Condition 19
    (Notices) specifying the nature of the Change of Control
    Put Event and the procedure for exercising the Change of Control
    Put Option;

 

    “Change of Control Put Option” means the option
    of the Noteholders exercisable pursuant to Condition 10(f)
    (Change of Control redemption);

 

    “Change of Control Put Period” means the period
    of 45 days after a Change of Control Put Event Notice is
    given;

 

    “Consolidated Gross Assets” means the
    consolidated current assets plus consolidated non-current assets
    of the Group;

 

    “Coupon Sheet” means, in respect of a Note, a
    coupon sheet relating to the Note;

 

    “Day Count Fraction” means, in respect of the
    calculation of an amount for any period of time (the
    “Calculation Period”), such day count fraction
    as may be specified in these Conditions or the relevant Final
    Terms and:

 

    (a) if “Actual/Actual (ICMA)” is so
    specified, means:

 

    (i) where the Calculation Period is equal to or shorter
    than the Regular Period during which it falls, the actual number
    of days in the Calculation Period divided by the product of
    (1) the actual number of days in such Regular Period and
    (2) the number of Regular Periods in any year; and

 

    (ii) where the Calculation Period is longer than one
    Regular Period, the sum of: (A) the actual number of days
    in such Calculation Period falling in the Regular Period in
    which it begins divided by the product of (1) the actual
    number of days in such Regular Period and (2) the number of
    Regular Periods in any year; and (B) the actual number of
    days in such Calculation Period falling in the next Regular
    Period divided by the product of (a) the actual number of
    days in such Regular Period and (2) the number of Regular
    Periods in any year;

 

    (b) if “Actual/Actual (ISDA)” is so
    specified, means the actual number of days in the Calculation
    Period divided by 365 (or, if any portion of the Calculation
    Period falls in a leap year, the sum of (A) the actual
    number

    

    51

 

    of days in that portion of the Calculation Period falling in a
    leap year divided by 366 and (B) the actual number of days
    in that portion of the Calculation Period falling in a non-leap
    year divided by 365);

 

    (c) if “Actual/365 (Fixed)” is so
    specified, means the actual number of days in the Calculation
    Period divided by 365;

 

    (d) if “Actual/360” is so specified, means
    the actual number of days in the Calculation Period divided by
    360;

 

    (e) if “30/360” is so specified, the
    number of days in the Calculation Period divided by 360,
    calculated on a formula basis as follows:

 

	 	 	 	 	 
	
 
	
 
	
 
	
 
	
    [360×(Y2−Y1)+[30×(M2−M1)]+(D2−D1)
	
 
	
 
	
    Day Count Fraction =
	
 
	
    

	
 
	
 
	
 
	
 
	
    360

 

    where:

 

    “Y1”
    is the year, expressed as a number, in which the first day of
    the Calculation Period falls;

 

    “Y2”
    is the year, expressed as a number, in which the day immediately
    following the last day included in the Calculation Period falls;

 

    “M1”
    is the calendar month, expressed as a number, in which the first
    day of the Calculation Period falls;

 

    “M2”
    is the calendar month, expressed as number, in which the day
    immediately following the last day included in the Calculation
    Period falls;

 

    “D1”
    is the first calendar day, expressed as a number, of the
    Calculation Period, unless such number would be 31, in which
    case D will be 30; and

 

    “D2”
    is the calendar day, expressed as a number, immediately
    following the last day included in the Calculation Period,
    unless such number would be 31 and
    D1
    is greater than 29, in which case
    D2
    will be 30”;

 

    (f) if “30E/360” or “Eurobond
    Basis” is so specified, the number of days in the
    Calculation Period divided by 360, calculated on a formula basis
    as follows:

 

	 	 	 	 	 
	
 
	
 
	
 
	
 
	
    [360×(Y2−Y1)+[30×(M2−M1)]+(D2−D1)
	
 
	
 
	
    Day Count Fraction =
	
 
	
    

	
 
	
 
	
 
	
 
	
    360

 

    where:

 

    “Y1”
    is the year, expressed as a number, in which the first day of
    the Calculation Period falls;
    “Y2”
    is the year, expressed as a number, in which the day immediately
    following the last day included in the Calculation Period falls;

    

    52

 

    “Y2”
    is the year, expressed as a number, in which the day immediately
    following the last day included in the Calculation Period falls;

 

    “M1”
    is the calendar month, expressed as a number, in which the first
    day of the Calculation Period falls;

 

    “M2”
    is the calendar month, expressed as a number, in which the day
    immediately following the last day included in the Calculation
    Period falls;

 

    “D1”
    is the first calendar day, expressed as a number, of the
    Calculation Period, unless such number would be 31, in which
    case
    D1
    will be 30; and

 

    “D2”
    is the calendar day, expressed as a number, immediately
    following the last day included in the Calculation Period,
    unless such number would be 31, in which case D will be
    30; and

 

    (g) if “30E/360 (ISDA)” is so specified,
    the number of days in the Calculation Period divided by 360,
    calculated on a formula basis as follows:

 

	 	 	 	 	 
	
 
	
 
	
 
	
 
	
    [360×(Y2−Y1)+[30×(M2−M1)]+(D2−D1)
	
 
	
 
	
    Day Count Fraction =
	
 
	
    

	
 
	
 
	
 
	
 
	
    360

 

    where:

 

    “Y1”
    is the year, expressed as a number, in which the first day of
    the Calculation Period falls;

 

    “Y2”
    is the year, expressed as a number, in which the day immediately
    following the last day included in the Calculation Period falls;

 

    “M1”
    is the calendar month, expressed as a number, in which the first
    day of the Calculation Period falls;

 

    “M2”
    is the calendar month, expressed as a number, in which the day
    immediately following the last day included in the Calculation
    Period falls;

 

    “D1”
    is the first calendar day, expressed as a number, of the
    Calculation Period, unless (i) that day is the last day of
    February or (ii) such number would be 31, in which case
    D1
    will be 30; and

 

    “D2”
    is the calendar day, expressed as a number, immediately
    following the last day included in the Calculation Period,
    unless (i) that day is the last day of February but not the
    Maturity Date or (ii) such number would be 31, in which
    case
    D2
    will be 30,

 

    PROVIDED, HOWEVER, THAT in each such case the number of
    days in the Calculation Period is calculated from and including
    the first day of the Calculation Period to but excluding the
    last day of the Calculation Period;

    

    53

 

    “Early Redemption Amount (Tax)” means, in
    respect of any Note, its principal amount or such other amount
    as may be specified in, or determined in accordance with, the
    relevant Final Terms;

 

    “Early Termination Amount” means, in respect of
    any Note, its principal amount or such other amount as may be
    specified in, or determined in accordance with, these Conditions
    or the relevant Final Terms;

 

    “EBITDA” means, in relation to any Relevant
    Period, the total consolidated operating profit of the Group for
    that Relevant Period:

 

    (a) before taking into account:

 

    (i) Net Interest Payable;

 

    (ii) Tax; and

 

    (iii) all exceptional items; and

 

    (b) after adding back all amounts provided for depreciation
    and amortisation; and

 

    (c) deducting, to the extent included, amounts attributable
    to interests of third parties in members of the Group;

 

    “Extraordinary Resolution” has the meaning
    given in the Trust Deed;

 

    “Final Redemption Amount” means, in
    respect of any Note, its principal amount or such other amount
    as may be specified in, or determined in accordance with, the
    relevant Final Terms;

 

    “Financial Indebtedness” means any indebtedness
    (without double counting) for or in respect of:

 

    (a) moneys borrowed;

 

    (b) any amount raised by acceptance under any acceptance
    credit facility or dematerialised equivalent;

 

    (c) any amount raised pursuant to any note purchase
    facility or the issue of bonds, notes, debentures, loan stock,
    commercial paper or any similar instrument (entered into or
    issued primarily as a method of raising finance);

 

    (d) the amount of any liability in respect of any lease or
    hire purchase contract which would, in accordance with IFRS, be
    treated as a finance or capital lease;

 

    (e) receivables sold or discounted (other than any
    receivables to the extent they are sold or discounted on a
    non-recourse basis);

 

    (f) any amount:

    

    54

 

    (i) raised under any other transaction (including any
    forward sale or purchase agreement) required by IFRS to be shown
    as a borrowing in the audited consolidated balance sheet of the
    Group; or

 

    (ii) raised under any other transaction entered into
    primarily as a method of raising finance not required by IFRS to
    be shown as a borrowing in the audited consolidated balance
    sheet of the Group;

 

    (g) any derivative transaction entered into in connection
    with protection against or benefit from fluctuation in any rate
    or price (and, when calculating the value of any derivative
    transaction, only the marked to market value shall be taken into
    account);

 

    (h) shares which are expressed to be redeemable prior to
    2 May 2013;

 

    (i) any counter-indemnity obligation in respect of a
    guarantee, indemnity, bond, letter of credit or any other
    instrument issued by a bank or financial institution; and

 

    (j) the amount of any liability in respect of any guarantee
    or indemnity for any of the items referred to in paragraphs
    (a) to (i) above,

 

    but excluding indebtedness owing by a member of the Group to
    another member of the Group;

 

    “First Interest Payment Date” means the date
    specified in the relevant Final Terms;

 

    “Fitch” means Fitch Ratings Ltd. or any
    successor;

 

    “Fixed Coupon Amount” has the meaning given in
    the relevant Final Terms;

 

    “Group” means the Issuer and its Subsidiaries
    for the time being;

 

    “Guarantee” and “Guarantees”
    have the meaning stated in Condition 1(e);

 

    “Guarantor” and “Guarantors”
    have the meaning stated in Condition 1(a);

 

    “IFRS” means international accounting standards
    within the meaning of IAS Regulation 1606/2002 to the extent
    applicable to the relevant financial statements;

 

    “Indebtedness” means any indebtedness (whether
    being principal, premium, interest or other amounts) for or in
    respect of any notes, bonds, debentures, debenture stock, loan
    stock or other securities or any borrowed money or any liability
    under or in respect of any acceptance or acceptance credit;

 

    “Interest Amount” means, in relation to a Note
    and an Interest Period, the amount of interest payable in
    respect of that Note for that Interest Period;

    

    55

 

    “Interest Commencement Date” means the Issue
    Date of the Notes or such other date as may be specified as the
    Interest Commencement Date in the relevant Final Terms;

 

    “Interest Determination Date” has the meaning
    given in the relevant Final Terms;

 

    “Interest Payment Date” means the First
    Interest Payment Date and any date or dates specified as such
    in, or determined in accordance with the provisions of, the
    relevant Final Terms and, if a Business Day Convention is
    specified in the relevant Final Terms:

 

    (a) as the same may be adjusted in accordance with the
    relevant Business Day Convention; or

 

    (b) if the Business Day Convention is the FRN Convention,
    Floating Rate Convention or Eurodollar Convention and an
    interval of a number of calendar months is specified in the
    relevant Final Terms as being the Specified Period, each of such
    dates as may occur in accordance with the FRN Convention,
    Floating Rate Convention or Eurodollar Convention at such
    Specified Period of calendar months following the Interest
    Commencement Date (in the case of the first Interest Payment
    Date) or the previous Interest Payment Date (in any other case);

 

    “Interest Period” means each period beginning
    on (and including) the Interest Commencement Date or any
    Interest Payment Date and ending on (but excluding) the next
    Interest Payment Date;

 

    “ISDA Definitions” means the 2006 ISDA
    Definitions (as amended and updated as at the date of issue of
    the first Tranche of the Notes of the relevant Series (as
    specified in the relevant Final Terms) as published by the
    International Swaps and Derivatives Association, Inc.);

 

    “Issue Date” has the meaning given in the
    relevant Final Terms;

 

    “Margin” has the meaning given in the relevant
    Final Terms;

 

    “Material Subsidiary” means, at any time, any
    Subsidiary of the Issuer:

 

    (a) whose gross assets represent 10 per cent. or more
    of Consolidated Gross Assets or whose EBITDA represents
    5 per cent. or more of consolidated EBITDA of the Group, in
    each case, as calculated by reference to the latest financial
    statements of such Subsidiary (which shall be audited if such
    statements are prepared by that Subsidiary) and the latest
    audited consolidated financial statements of the Group adjusted
    in such manner as the auditors of the Issuer may determine
    (which determination shall be conclusive in the absence of
    manifest error) (i) to reflect the gross assets and EBITDA
    of any person which has become or ceased to be a member of the
    Group since the end of the financial year to which the latest
    audited consolidated financial statements of the Group relate
    where such adjustment is requested by the Issuer and
    (ii) so that for the purposes of this definition,

    

    56

 

    the gross assets of the relevant Subsidiary shall be calculated
    on the same basis as Consolidated Gross Assets are calculated
    and/or, as the case may be, EBITDA of the relevant Subsidiary
    shall be calculated on the same basis as consolidated EBITDA for
    the Group (but, in each case, relating only to the relevant
    Subsidiary) and making such adjustments and eliminations as are
    required to show the same as the contribution of the relevant
    Subsidiary to Consolidated Gross Assets and/or, as the case may
    be, consolidated EBITDA of the Group; or

 

    (b) to which is transferred all or substantially all of the
    business, undertaking or assets of a Subsidiary which
    immediately prior to such transfer is a Material Subsidiary,
    whereupon the transferor Subsidiary shall cease to be a Material
    Subsidiary and the transferee Subsidiary shall become a Material
    Subsidiary under this
    sub-paragraph
    (b) upon the completion of such transfer;

 

    Any determination made by the auditors of the Issuer as to
    whether a Subsidiary of the Issuer is or is not a Material
    Subsidiary at any time shall be conclusive in the absence of
    manifest error. The Trustee may rely on a report of the auditors
    of the Issuer, whether or not addressed to the Trustee, that, in
    their opinion, a Subsidiary is a Material Subsidiary, without
    liability to any person and without further enquiry or evidence,
    notwithstanding that such report
    and/or any
    engagement letter or other document entered into by the Trustee
    in connection therewith contains a monetary or other limit on
    the liability of the auditors of the Issuer and notwithstanding
    that the scope
    and/or basis
    of such a report may be limited by any engagement or similar
    letter or by the terms of the report itself.

 

    “Maturity Date” has the meaning given in the
    relevant Final Terms;

 

    “Maximum Redemption Amount” has the
    meaning given in the relevant Final Terms;

 

    “Minimum Redemption Amount” has the
    meaning given in the relevant Final Terms;

 

    “Moody’s” means Moody’s Investors
    Service, Inc. or any successor;

 

    a “Negative Rating Event” shall be deemed to
    have occurred if at such time as there is no rating assigned to
    the Notes by a Rating Agency (i) the Issuer does not,
    either prior to, or not later than 21 days after, the
    occurrence of the Change of Control seek, and thereafter
    throughout the Change of Control Period use all reasonable
    endeavours to obtain, a rating of the Notes, or any other
    unsecured and unsubordinated debt of the Issuer or (ii) if
    the Issuer does so seek and use such endeavours, it is unable to
    obtain such a rating of at least investment grade by the end of
    the Change of Control Period;

 

    “Net Interest Payable” means, in relation to
    any Relevant Period, the aggregate amount of interest and any
    other finance charges accrued by the Group in that Relevant
    Period in respect of Borrowings including:

 

    (a) the interest element of leasing and hire purchase
    payments;

    

    57

 

    (b) commitment fees, commissions and guarantee
    fees; and

 

    (c) amounts in the nature of interest payable in respect of
    any shares other than equity share capital,

 

    adjusted (but without double counting) by:

 

    (i) deducting interest income of the Group in respect of
    that Relevant Period;

 

    (ii) adding back the net amount payable (or deducting the
    net amount receivable) by members of the Group in that Relevant
    Period as a result of close-out or termination of any interest
    or (so far as they relate to interest) currency hedging
    activities;

 

    (iii) adding back the amount payable as a premium on any
    bond buy-back by members of the Group in that Relevant Period;

 

    (iv) deducting, to the extent included, the amount payable
    by members of the Group in that Relevant Period for arrangement
    or related fees in respect of Borrowings (to include, for the
    avoidance of doubt, underwriting, syndication and fees of a
    similar nature); and

 

    (v) deducting, to the extent included, the amount of
    interest and other finance charges attributable to interests of
    third parties in members of the Group and adjusting, as
    appropriate, the additions or deductions specified in paragraphs
    (i) to (iv) (inclusive) above as a consequence of interests
    of third parties in members of the Group,

 

    but shall exclude in relation to the Relevant Period
    (A) net
    mark-to-market
    gains or losses on revaluation of financial instruments, and
    (B) for the avoidance of doubt, any amount of interest paid
    to the Group’s loyalty programme on the accumulated balance
    of cash received in advance of the redemption of loyalty points
    awarded;

 

    “Non-Investment Grade Rating” means a
    non-investment grade credit rating (Ba1/BB+, or equivalent, or
    worse);

 

    “Optional Redemption Amount (Call)” means,
    in respect of any Note, its principal amount or such other
    amount as may be specified in, or determined in accordance with,
    the relevant Final Terms;

 

    “Optional Redemption Amount (Put)” means,
    in respect of any Note, its principal amount or such other
    amount as may be specified in, or determined in accordance with,
    the relevant Final Terms;

 

    “Optional Redemption Date (Call)” has the
    meaning given in the relevant Final Terms;

 

    “Optional Redemption Date (Put)” has the
    meaning given in the relevant Final Terms;

    

    58

 

    “Original Financial Statements” means the
    audited consolidated financial statements of the Group for the
    financial period ended 31 December 2008;

 

    “Participating Member State” means a Member
    State of the European Communities which adopts the euro as its
    lawful currency in accordance with the Treaty;

 

    “Paying Agents” means the Principal Paying
    Agent and any substitute or additional paying agents appointed
    in accordance with the Agency Agreement and a “Paying
    Agent” means any of them;

 

    “Payment Business Day” means:

 

    (a) if the currency of payment is euro, any day which is:

 

    (i) a day on which banks in the relevant place of
    presentation are open for presentation and payment of bearer
    debt securities and for dealings in foreign currencies; and

 

    (ii) in the case of payment by transfer to an account, a
    TARGET Settlement Day and a day on which dealings in foreign
    currencies may be carried on in each (if any) Additional
    Financial Centre; or

 

    (b) if the currency of payment is not euro, any day which
    is:

 

    (i) a day on which banks in the relevant place of
    presentation are open for presentation and payment of bearer
    debt securities and for dealings in foreign currencies; and

 

    (ii) in the case of payment by transfer to an account, a
    day on which dealings in foreign currencies may be carried on in
    London, the Principal Financial Centre of the currency of
    payment and in each (if any) Additional Financial Centre;

 

    “Person” means any individual, company,
    corporation, firm, partnership, joint venture, association,
    organisation, state or agency of a state or other entity,
    whether or not having separate legal personality;

 

    “Principal Financial Centre” means, in relation
    to any currency, the principal financial centre for that
    currency, PROVIDED, HOWEVER, THAT:

 

    (a) in relation to euro, it means the principal financial
    centre of such Participating Member State of the European
    Communities as is selected (in the case of a payment) by the
    payee or (in the case of a calculation) by the Calculation
    Agent; and

 

    (b) in relation to Australian dollars, it means either
    Sydney or Melbourne and, in relation to New Zealand dollars, it
    means either Wellington or Auckland; in each case as is selected
    (in the case of a payment) by the payee or (in the case of a
    calculation) by the Calculation Agent;

    

    59

 

    “Project Finance Indebtedness” means Financial
    Indebtedness (in respect of which Security has been given)
    incurred by a member of the Group (a “Project Group
    Member”) for the purposes of financing the acquisition,
    construction, development
    and/or
    operation of an asset (a “Project Asset”) where the
    provider of the Financial Indebtedness has no recourse against
    any member of the Group, except for recourse to:

 

    (a) the Project Asset of the Project Group Member or
    receivables arising from the Project Asset;

 

    (b) a Project Group Member for the purpose of enforcing
    Security given by it so long as:

 

    (i) the recourse is limited to recoveries in respect of the
    Project Asset; and

 

    (ii) if the Project Asset does not comprise all or
    substantially all of the business of that Project Group Member,
    the provider of the Financial Indebtedness does not have the
    right to take any steps towards its winding up or dissolution or
    the appointment of a liquidator, administrator, receiver or
    similar officer or person, other than in respect of the Project
    Asset or receivables arising therefrom; or

 

    (c) a member of the Group to the extent only of its
    shareholding in a Project Group Member;

 

    “Project Group Member” has the meaning given to
    it in the definition of Project Finance Indebtedness provided
    that the principal assets and business of such member of the
    Group is constituted by Project Assets and it has no other
    Financial Indebtedness except Project Finance Indebtedness;

 

    “Put Option Notice” means a notice which must
    be delivered to a Paying Agent by any Noteholder wanting to
    exercise a right to redeem a Note at the option of the
    Noteholder pursuant to Condition 10(e) (Redemption at the
    option of Noteholders);

 

    “Put Option Receipt” means a receipt issued by
    a Paying Agent to a depositing Noteholder upon deposit of a Note
    with such Paying Agent by any Noteholder wanting to exercise a
    right to redeem a Note at the option of the Noteholder;

 

    “Rate of Interest” means the rate or rates
    (expressed as a percentage per annum) of interest payable in
    respect of the Notes specified in the relevant Final Terms or
    calculated or determined in accordance with the provisions of
    these Conditions
    and/or the
    relevant Final Terms;

 

    “Rating Agency” means S&P or any of its
    respective successors or any Substitute Rating Agency and, for
    the purposes of Condition 10(f), includes any Additional Rating
    Agency;

    

    60

 

    “Redemption Amount” means, as appropriate,
    the Final Redemption Amount, the Early
    Redemption Amount (Tax), the Optional
    Redemption Amount (Call), the Optional Redemption Amount
    (Put), the Early Termination Amount or such other amount in the
    nature of a redemption amount as may be specified in, or
    determined in accordance with the provisions of, the relevant
    Final Terms;

 

    “Reference Banks” has the meaning given in the
    relevant Final Terms or, if none, four major banks selected by
    the Calculation Agent in the market that is most closely
    connected with the Reference Rate;

 

    “Reference Price” has the meaning given in the
    relevant Final Terms;

 

    “Reference Rate” has the meaning given in the
    relevant Final Terms;

 

    “Regular Period” means:

 

    (a) in the case of Notes where interest is scheduled to be
    paid only by means of regular payments, each period from and
    including the Interest Commencement Date to but excluding the
    first Interest Payment Date and each successive period from and
    including one Interest Payment Date to but excluding the next
    Interest Payment Date;

 

    (b) in the case of Notes where, apart from the first
    Interest Period, interest is scheduled to be paid only by means
    of regular payments, each period from and including a Regular
    Date falling in any year to but excluding the next Regular Date,
    where “Regular Date” means the day and month
    (but not the year) on which any Interest Payment Date
    falls; and

 

    (c) in the case of Notes where, apart from one Interest
    Period other than the first Interest Period, interest is
    scheduled to be paid only by means of regular payments, each
    period from and including a Regular Date falling in any year to
    but excluding the next Regular Date, where “Regular
    Date” means the day and month (but not the year) on
    which any Interest Payment Date falls other than the Interest
    Payment Date falling at the end of the irregular Interest Period.

 

    “Relevant Announcement Date” means the date
    that is the earlier of (a) the date of the first public
    announcement of the relevant Change of Control and (b) the
    date of the earliest Relevant Potential Change of Control
    Announcement (if any);

 

    “Relevant Date” means, in relation to any
    payment, whichever is the later of (a) the date on which
    the payment in question first becomes due and (b) if the
    full amount payable has not been received in the Principal
    Financial Centre of the currency of payment by the Principal
    Paying Agent on or prior to such due date, the date on which
    (the full amount having been so received) notice to that effect
    has been given to the Noteholders;

 

    “Relevant Financial Centre” has the meaning
    given in the relevant Final Terms;

    

    61

 

    “Relevant Indebtedness” means (i) any
    present or future indebtedness (whether being principal,
    premium, interest or other amounts) for or in respect of any
    notes, bonds, debentures, debenture stock, loan stock or other
    securities which have an initial stated maturity of not less
    than one year and which are or are of a type which is
    customarily quoted, listed or ordinarily dealt in on any stock
    exchange,
    over-the-counter
    or other securities market, and (ii) any guarantee or
    indemnity in respect of any such indebtedness;

 

    “Relevant Period” means:

 

    (a) each financial year of the Issuer; and

 

    (b) each period beginning on the first day of the second
    half of a financial year of the Issuer and ending on the last
    day of the first half of its next financial year;

 

    “Relevant Potential Change of Control
    Announcement” means any public announcement or
    statement by or on behalf of the Issuer, any actual or potential
    bidder or any adviser acting on behalf of any actual or
    potential bidder relating to any potential Change of Control
    where within 180 days following the date of such
    announcement or statement, a Change of Control occurs;

 

    “Relevant Screen Page” means the page, section
    or other part of a particular information service (including,
    without limitation, Reuters) specified as the Relevant Screen
    Page in the relevant Final Terms, or such other page, section or
    other part as may replace it on that information service or such
    other information service, in each case, as may be nominated by
    the Person providing or sponsoring the information appearing
    there for the purpose of displaying rates or prices comparable
    to the Reference Rate;

 

    “Relevant Time” has the meaning given in the
    relevant Final Terms;

 

    “Reserved Matter” means any proposal:

 

    (a) to change any date fixed for payment of principal or
    interest in respect of the Notes, to reduce the amount of
    principal or interest payable on any date in respect of the
    Notes or to alter the method of calculating the amount of any
    payment in respect of the Notes on redemption or maturity;

 

    (b) to effect the exchange or substitution of the Notes
    for, or the conversion of the Notes into, shares, bonds or other
    obligations or securities of the Issuer or any other person or
    body corporate formed or to be formed (other than as permitted
    under Clause 7.3 of the Trust Deed);

 

    (c) to change the currency in which amounts due in respect
    of the Notes are payable;

 

    (d) to change the quorum required at any meeting of
    Noteholders or the majority required to pass an Extraordinary
    Resolution; or

    

    62

 

    (e) to amend this definition;

 

    “S&P” means Standard &
    Poor’s Rating Services, a division of The McGraw-Hill
    Companies Inc. or any successor;

 

    “Security” means a mortgage, pledge, lien,
    hypothecation, security interest or other charge or encumbrance
    entered into for the purpose of securing any obligation of any
    person;

 

    “Security Interest” means any mortgage, charge,
    pledge, lien or other security interest including, without
    limitation, anything analogous to any of the foregoing under the
    laws of any jurisdiction;

 

    “Specified Currency” has the meaning given in
    the relevant Final Terms;

 

    “Specified Denomination(s)” has the meaning
    given in the relevant Final Terms;

 

    “Specified Office” has the meaning given in the
    Agency Agreement;

 

    “Specified Period” has the meaning given in the
    relevant Final Terms;

 

    “Subsidiary” means any company where the Issuer:

 

    (a) holds a majority of the voting rights in the
    company or

 

    (b) is a member of the company and has the right to appoint
    or remove a majority of its board of directors, or

 

    (c) is a member of the company and controls alone, pursuant
    to an agreement with other members, a majority of the voting
    rights in it,

 

    or if the company is a subsidiary of a company that is itself a
    subsidiary of the Issuer;

 

    “Substitute Rating Agency” means any rating
    agency of international standing substituted for the Rating
    Agency by the Issuer from time to time with the prior written
    approval of the Trustee, such approval not to be unreasonably
    withheld or delayed;

 

    “Talon” means a talon for further Coupons;

 

    “TARGET2” means the Trans-European Automated
    Real-Time Gross Settlement Express Transfer payment system which
    utilises a single shared platform and which was launched on
    19 November 2007;

 

    “TARGET Settlement Day” means any day on which
    TARGET2 is open for the settlement of payments in euro;

 

    “Tax” means any tax, levy, impost, duty or
    other charge or withholding of a similar nature (including any
    penalty or interest payable in connection with any failure by
    the Issuer to pay or any delay in paying by the Issuer any of
    the same);

    

    63

 

    “Treaty” means the Treaty establishing the
    European Communities, as amended;

 

    “Wholly-Owned Subsidiary” means any Person in
    which the Issuer,
    and/or one
    or more of its Wholly-Owned Subsidiaries, controls, directly or
    indirectly, all of the stock with ordinary voting power to elect
    the board of directors of that Person; and

 

    “Zero Coupon Note” means a Note specified as
    such in the relevant Final Terms.

 

    (b) Interpretation

 

    In these Conditions:

 

    (i) if the Notes are Zero Coupon Notes, references to
    Coupons and Couponholders are not applicable;

 

    (ii) if Talons are specified in the relevant Final Terms as
    being attached to the Notes at the time of issue, references to
    Coupons shall be deemed to include references to Talons;

 

    (iii) if Talons are not specified in the relevant Final
    Terms as being attached to the Notes at the time of issue,
    references to Talons are not applicable;

 

    (iv) any reference to principal shall be deemed to include
    the Redemption Amount, any additional amounts in respect of
    principal which may be payable under Condition 12 (Taxation),
    any premium payable in respect of a Note and any other amount in
    the nature of principal payable pursuant to these Conditions;

 

    (v) any reference to interest shall be deemed to include
    any additional amounts in respect of interest which may be
    payable under Condition 12 (Taxation) and any other amount in
    the nature of interest payable pursuant to these Conditions;

 

    (vi) references to Notes being “outstanding”
    shall be construed in accordance with the Trust Deed;

 

    (vii) if an expression is stated in Condition 2(a)
    (Definitions) to have the meaning given in the relevant Final
    Terms, but the relevant Final Terms gives no such meaning or
    specifies that such expression is “not applicable”
    then such expression is not applicable to the Notes; and

 

    (viii) any reference to the Agency Agreement or the
    Trust Deed shall be construed as a reference to the Agency
    Agreement or the Trust Deed, as the case may be, as amended
    and/or
    supplemented up to and including the Issue Date of the Notes.

 

		
	
    3.  
	
    Form,
    Denomination and Title

 

    The Notes are in bearer form in the Specified Denomination(s)
    with Coupons and, if specified in the relevant Final Terms,
    Talons attached at the time of issue. In the case of a Series of
    Notes with more than one Specified

    

    64

 

    Denomination, Notes of one Specified Denomination will not be
    exchangeable for Notes of another Specified Denomination. Title
    to the Notes and the Coupons will pass by delivery. The holder
    of any Note or Coupon shall (except as otherwise required by
    law) be treated as its absolute owner for all purposes (whether
    or not it is overdue and regardless of any notice of ownership,
    trust or any other interest therein, any writing thereon or any
    notice of any previous loss or theft thereof) and no Person
    shall be liable for so treating such holder. No person shall
    have any right to enforce any term or condition of any Note or
    the Trust Deed under the Contracts (Rights of Third
    Parties) Act 1999 but this does not affect any right or remedy
    of a third party which exists or is available apart from that
    Act.

 

		
	
    4.  
	
    Status of
    the Notes and Guarantees

 

    The Notes and Coupons constitute direct, general, unsubordinated
    and unconditional obligations of the Issuer which will at all
    times rank pari passu among themselves and at least pari passu
    with all other present and future unsecured obligations of the
    Issuer, save for such obligations as may be preferred by
    provisions of law that are both mandatory and of general
    application.

 

    The payment obligations of the Guarantors rank pari passu with
    all other present and future unsecured obligations of the
    Guarantors, save for such obligations as may be preferred by
    provisions of law that are both mandatory and of general
    application.

 

		
	
    5.  
	
    Negative
    Pledge

 

    So long as any of the Notes remains outstanding neither the
    Issuer nor any Guarantor nor any Material Subsidiary will create
    or have outstanding any Security Interest upon, or with respect
    to, any of the present or future business, undertaking, assets
    or revenues (including any uncalled capital) of the Issuer or
    any Guarantor or any Material Subsidiary to secure any Relevant
    Indebtedness, unless the Issuer or, as the case may be, such
    Guarantor or such Material Subsidiary, in the case of the
    creation of a Security Interest, before or at the same time and,
    in any other case, promptly, takes any and all action necessary
    to ensure that:

 

    (a) all amounts payable by it under the Notes, the Coupons
    and the Trust Deed are secured by the Security Interest
    equally and rateably with the Relevant Indebtedness to the
    satisfaction of the Trustee; or

 

    (b) such other Security Interest or other arrangement
    (whether or not it includes the giving of a Security Interest)
    is provided either (A) as the Trustee in its absolute
    discretion deems not materially less beneficial to the interest
    of the Noteholders or (B) as is approved by an
    Extraordinary Resolution (which is defined in the
    Trust Deed as a resolution duly passed by a majority of not
    less than three-quarters of the votes cast thereon at a meeting
    of the Noteholders or by a resolution in writing signed by or on
    behalf of the holders of not less than three quarters of the
    nominal amount of the Notes) of the Noteholders.

    

    65

 

		
	
    6.  
	
    Fixed
    Rate Note Provisions

 

    (a) Application

 

    This Condition 6 is applicable to the Notes only if the Fixed
    Rate Note provisions are specified in the relevant Final Terms
    as being applicable.

 

    (b) Accrual
    of interest

 

    The Notes bear interest from the Interest Commencement Date at
    the Rate of Interest payable in arrear on each Interest Payment
    Date, subject as provided in Condition 11 (Payments). Each Note
    will cease to bear interest from the due date for final
    redemption unless, upon due presentation, payment of the
    Redemption Amount is improperly withheld or refused, in
    which case it will continue to bear interest in accordance with
    this Condition 6 (as well after as before judgment) until
    whichever is the earlier of (i) the day on which all sums
    due in respect of such Note up to that day are received by or on
    behalf of the relevant Noteholder and (ii) the day which is
    seven days after the Principal Paying Agent has notified the
    Noteholders that it has received all sums due in respect of the
    Notes up to such seventh day (except to the extent that there is
    any subsequent default in payment.

 

    (c) Fixed
    Coupon Amount

 

    The amount of interest payable in respect of each Note for any
    Interest Period shall be the relevant Fixed Coupon Amount and,
    if the Notes are in more than one Specified Denomination, shall
    be the relevant Fixed Coupon Amount in respect of the relevant
    Specified Denomination.

 

    (d) Calculation
    of interest amount

 

    The amount of interest payable in respect of each Note for any
    period for which a Fixed Coupon Amount is not specified shall be
    calculated by applying the Rate of Interest to the Calculation
    Amount, multiplying the product by the relevant Day Count
    Fraction, rounding the resulting figure to the nearest
    sub-unit of
    the Specified Currency (half a
    sub-unit
    being rounded upwards) and multiplying such rounded figure by a
    fraction equal to the Specified Denomination of such Note
    divided by the Calculation Amount. For this purpose a
    “sub-unit”
    means, in the case of any currency other than euro, the lowest
    amount of such currency that is available as legal tender in the
    country of such currency and, in the case of euro, means one
    cent.

 

		
	
    7.  
	
    Floating
    Rate Note and Index-Linked Interest Note Provisions

 

    (a) Application

 

    This Condition 7 is applicable to the Notes only if the Floating
    Rate Note provisions or the Index-Linked Interest Note
    provisions are specified in the relevant Final Terms as being
    applicable.

    

    66

 

    (b) Accrual
    of interest

 

    The Notes bear interest from the Interest Commencement Date at
    the Rate of Interest payable in arrear on each Interest Payment
    Date, subject as provided in Condition 11 (Payments).
    Each Note will cease to bear interest from the due date for
    final redemption unless, upon due presentation, payment of the
    Redemption Amount is improperly withheld or refused, in
    which case it will continue to bear interest in accordance with
    this Condition 7 (as well after as before judgment) until
    whichever is the earlier of (i) the day on which all sums
    due in respect of such Note up to that day are received by or on
    behalf of the relevant Noteholder and (ii) the day which is
    seven days after the Principal Paying Agent has notified the
    Noteholders that it has received all sums due in respect of the
    Notes up to such seventh day (except to the extent that there is
    any subsequent default in payment.

 

    (c) Screen
    Rate Determination

 

    If Screen Rate Determination is specified in the relevant Final
    Terms as the manner in which the Rate(s) of Interest is/are to
    be determined, the Rate of Interest applicable to the Notes for
    each Interest Period will be determined by the Calculation Agent
    on the following basis:

 

    (i) if the Reference Rate is a composite quotation or
    customarily supplied by one entity, the Calculation Agent will
    determine the Reference Rate which appears on the Relevant
    Screen Page as of the Relevant Time on the relevant Interest
    Determination Date;

 

    (ii) in any other case, the Calculation Agent will
    determine the arithmetic mean of the Reference Rates which
    appear on the Relevant Screen Page as of the Relevant Time on
    the relevant Interest Determination Date;

 

    (iii) if, in the case of (i) above, such rate does not
    appear on that page or, in the case of (ii) above, fewer
    than two such rates appear on that page or if, in either case,
    the Relevant Screen Page is unavailable, the Calculation Agent
    will:

 

    (A) request the principal Relevant Financial Centre office
    of each of the Reference Banks to provide a quotation of the
    Reference Rate at approximately the Relevant Time on the
    Interest Determination Date to prime banks in the Relevant
    Financial Centre interbank market in an amount that is
    representative for a single transaction in that market at that
    time; and

 

    (B) determine the arithmetic mean of such
    quotations; and

 

    (iv) if fewer than two such quotations are provided as
    requested, the Calculation Agent will determine the arithmetic
    mean of the rates (being the nearest to the Reference Rate, as
    determined by the Calculation Agent) quoted by major banks in
    the Principal Financial Centre of the Specified Currency,
    selected by the Calculation

    

    67

 

    Agent, at approximately 11.00 a.m. (local time in the
    Principal Financial Centre of the Specified Currency) on the
    first day of the relevant Interest Period for loans in the
    Specified Currency to leading European banks for a period equal
    to the relevant Interest Period and in an amount that is
    representative for a single transaction in that market at that
    time,

 

    and the Rate of Interest for such Interest Period shall be the
    sum of the Margin and the rate or (as the case may be) the
    arithmetic mean so determined; PROVIDED, HOWEVER, THAT if
    the Calculation Agent is unable to determine a rate or (as the
    case may be) an arithmetic mean in accordance with the above
    provisions in relation to any Interest Period, the Rate of
    Interest applicable to the Notes during such Interest Period
    will be the sum of the Margin and the rate or (as the case may
    be) the arithmetic mean last determined in relation to the Notes
    in respect of a preceding Interest Period.

 

    (d) ISDA
    Determination

 

    If ISDA Determination is specified in the relevant Final Terms
    as the manner in which the Rate(s) of Interest is/are to be
    determined, the Rate of Interest applicable to the Notes for
    each Interest Period will be the sum of the Margin and the
    relevant ISDA Rate where “ISDA Rate” in
    relation to any Interest Period means a rate equal to the
    Floating Rate (as defined in the ISDA Definitions) that would be
    determined by the Calculation Agent under an interest rate swap
    transaction if the Calculation Agent were acting as Calculation
    Agent for that interest rate swap transaction under the terms of
    an agreement incorporating the ISDA Definitions and under which:

 

    (i) the Floating Rate Option (as defined in the ISDA
    Definitions) is as specified in the relevant Final Terms;

 

    (ii) the Designated Maturity (as defined in the ISDA
    Definitions) is a period specified in the relevant Final
    Terms; and

 

    (iii) the relevant Reset Date (as defined in the ISDA
    Definitions) is either (A) if the relevant Floating Rate
    Option is based on the London inter-bank offered rate (LIBOR)
    for a currency, the first day of that Interest Period or
    (B) in any other case, as specified in the relevant Final
    Terms.

 

    (e) Index-Linked
    Interest

 

    If the Index-Linked Interest Note provisions are specified in
    the relevant Final Terms as being applicable, the Rate(s) of
    Interest applicable to the Notes for each Interest Period will
    be determined in the manner specified in the relevant Final
    Terms.

 

    (f) Maximum
    or Minimum Rate of Interest

 

    If any Maximum Rate of Interest or Minimum Rate of Interest is
    specified in the relevant Final Terms, then the Rate of Interest
    shall in no event be greater than the maximum or be less than
    the minimum so specified.

    

    68

 

    (g) Calculation
    of Interest Amount

 

    The Calculation Agent will, as soon as practicable after the
    time at which the Rate of Interest is to be determined in
    relation to each Interest Period, calculate the Interest Amount
    payable in respect of each Note for such Interest Period. The
    Interest Amount will be calculated by applying the Rate of
    Interest for such Interest Period to the Calculation Amount,
    multiplying the product by the relevant Day Count Fraction,
    rounding the resulting figure to the nearest
    sub-unit of
    the Specified Currency (half a
    sub-unit
    being rounded upwards) and multiplying such rounded figure by a
    fraction equal to the Specified Denomination of the relevant
    Note divided by the Calculation Amount. For this purpose a
    “sub-unit”
    means, in the case of any currency other than euro, the lowest
    amount of such currency that is available as legal tender in the
    country of such currency and, in the case of euro, means one
    cent.

 

    (h) Calculation
    of other amounts

 

    If the relevant Final Terms specifies that any other amount is
    to be calculated by the Calculation Agent, the Calculation Agent
    will, as soon as practicable after the time or times at which
    any such amount is to be determined, calculate the relevant
    amount. The relevant amount will be calculated by the
    Calculation Agent in the manner specified in the relevant Final
    Terms.

 

    (i) Publication

 

    The Calculation Agent will cause each Rate of Interest and
    Interest Amount determined by it, together with the relevant
    Interest Payment Date, and any other amount(s) required to be
    determined by it together with any relevant payment date(s) to
    be notified to the Paying Agents and each competent authority,
    stock exchange
    and/or
    quotation system (if any) by which the Notes have then been
    admitted to listing, trading
    and/or
    quotation as soon as practicable after such determination but
    (in the case of each Rate of Interest, Interest Amount and
    Interest Payment Date) in any event not later than the first day
    of the relevant Interest Period. Notice thereof shall also
    promptly be given to the Noteholders. The Calculation Agent will
    be entitled to recalculate any Interest Amount (on the basis of
    the foregoing provisions) without notice in the event of an
    extension or shortening of the relevant Interest Period. If the
    Calculation Amount is less than the minimum Specified
    Denomination the Calculation Agent shall not be obliged to
    publish each Interest Amount but instead may publish only the
    Calculation Amount and the Interest Amount in respect of a Note
    having the minimum Specified Denomination.

 

    (j) Notifications
    etc.

 

    All notifications, opinions, determinations, certificates,
    calculations, quotations and decisions given, expressed, made or
    obtained for the purposes of this Condition 7 by the Calculation
    Agent will (in the absence of manifest error) be binding on the
    Issuer, the Guarantors, the Trustee, the Paying Agents, the
    Noteholders and the Couponholders and

    

    69

 

    (subject as aforesaid) no liability to any such Person will
    attach to the Calculation Agent in connection with the exercise
    or non-exercise by it of its powers, duties and discretions for
    such purposes.

 

    (k) Determination
    or Calculation by Trustee

 

    If the Calculation Agent fails at any time to determine a Rate
    of Interest or to calculate an Interest Amount, the Trustee or a
    person appointed by the Trustee for that purpose (but without
    any liability accruing to the Trustee as a result) will
    determine such Rate of Interest and make such determination or
    calculation which shall be deemed to have been made by the
    Calculation Agent. In doing so, the Trustee or a person
    appointed by the Trustee for that purpose (but without any
    liability accruing to the Trustee as a result) shall apply all
    of the provisions of these Conditions with any necessary
    consequential amendments to the extent that, in its sole opinion
    and with absolute discretion, it can do so and in all other
    respects it shall do so in such manner as it shall deem fair and
    reasonable in all the circumstances and will not be liable for
    any loss, liability, cost, charge or expense which may arise as
    a result thereof. Any such determination or calculation made by
    the Trustee shall be binding on the Issuer, the Guarantors, the
    Noteholders and the Couponholders.

 

		
	
    8.  
	
    Zero
    Coupon Note Provisions

 

    (a) Application

 

    This Condition 8 is applicable to the Notes only if the Zero
    Coupon Note provisions are specified in the relevant Final Terms
    as being applicable.

 

    (b) Late
    payment on Zero Coupon Notes

 

    If the Redemption Amount payable in respect of any Zero
    Coupon Note is improperly withheld or refused, the
    Redemption Amount shall thereafter be an amount equal to
    the sum of:

 

    (i) the Reference Price; and

 

    (ii) the product of the Accrual Yield (compounded annually)
    being applied to the Reference Price on the basis of the
    relevant Day Count Fraction from (and including) the Issue Date
    to (but excluding) whichever is the earlier of (i) the day
    on which all sums due in respect of such Note up to that day are
    received by or on behalf of the relevant Noteholder and
    (ii) the day which is seven days after the Principal Paying
    Agent or, as the case may be, the Trustee has notified the
    Noteholders that it has received all sums due in respect of the
    Notes up to such seventh day (except to the extent that there is
    any subsequent default in payment).

    

    70

 

		
	
    9.  
	
    Dual
    Currency Note Provisions

 

    (a) Application

 

    This Condition 9 is applicable to the Notes only if the Dual
    Currency Note provisions are specified in the relevant Final
    Terms as being applicable.

 

    (b) Rate
    of Interest

 

    If the rate or amount of interest fails to be determined by
    reference to an exchange rate, the rate or amount of interest
    payable shall be determined in the manner specified in the
    relevant Final Terms.

 

		
	
    10.  
	
    Redemption
    and Purchase

 

    (a) Scheduled
    redemption

 

    Unless previously redeemed, or purchased and cancelled in
    accordance with Condition 10(j) (Cancellation), the Notes
    will be redeemed at their Final Redemption Amount on the
    Maturity Date, subject as provided in Condition 11
    (Payments).

 

    (b) Redemption
    for tax reasons

 

    The Notes may be redeemed at the option of the Issuer in whole,
    but not in part:

 

    (i) at any time (if neither the Floating Rate Note
    provisions or the Index-Linked Interest Note provisions are
    specified in the relevant Final Terms as being
    applicable); or

 

    (ii) on any Interest Payment Date (if the Floating Rate
    Note provisions or the Index- Linked Interest Note provisions
    are specified in the relevant Final Terms as being applicable),

 

    on giving not less than 30 nor more than 60 days’
    notice to the Noteholders (which notice shall be irrevocable),
    at their Early Redemption Amount (Tax), together with
    interest accrued (if any) to the date fixed for redemption, if:

 

    (A) as a result of any change in, or amendment to, the tax
    laws or regulations of the United Kingdom or any political
    subdivision or any authority thereof or therein having power to
    tax, or any change in the application or official interpretation
    of such laws or regulations (including a holding by a court of
    competent jurisdiction), which change or amendment becomes
    effective on or after the date of issue of the first Tranche of
    the Notes on the next Interest Payment Date either (i) the
    Issuer would be obliged to pay additional amounts as provided or
    referred to in Condition 12 (Taxation) or (ii) each
    Guarantor would be unable for reasons outside its control to
    procure payment by the Issuer and in making payment itself would
    be required to pay such additional amounts; and

    

    71

 

    (B) such obligation cannot be avoided by the Issuer or, as
    the case may be, each of the Guarantors taking reasonable
    measures available to it,

 

    PROVIDED, HOWEVER, THAT no such notice of redemption
    shall be given earlier than:

 

    (I) where the Notes may be redeemed at any time,
    90 days prior to the earliest date on which the Issuer or,
    as the case may be, the relevant Guarantor would be obliged to
    pay such additional amounts if a payment in respect of the Notes
    were then due; or

 

    (II) where the Notes may be redeemed only on an Interest
    Payment Date, 60 days prior to the Interest Payment Date
    occurring immediately before the earliest date on which the
    Issuer or, as the case may be, the relevant Guarantor would be
    obliged to pay such additional amounts if a payment in respect
    of the Notes were then due.

 

    Prior to the publication of any notice of redemption pursuant to
    this paragraph, the Issuer shall deliver to the Trustee (i), if
    the Trustee so requests, an opinion of independent legal
    advisers of recognised standing to the effect that the Issuer
    or, as the case may be, a Guarantor has or will become obliged
    to pay such additional amounts as a result of such change or
    amendment and (ii) a certificate signed by two authorised
    officers of the Issuer or, as the case may be, each of the
    Guarantors, as the case may be, stating that the obligation
    referred to in (A) above cannot be avoided by the Issuer
    or, as the case may be, each of the Guarantors taking reasonable
    measures available to it and the Trustee shall be entitled to
    accept such certificate as sufficient evidence of the
    satisfaction of the condition precedent set out in
    (B) above in which event it shall be conclusive and binding
    on the Noteholders and Couponholders. Upon the expiry of any
    such notice as is referred to in this Condition 10(b), the
    Issuer shall be bound to redeem the Notes in accordance with
    this Condition 10(b).

 

    (c) Redemption
    at the option of the Issuer

 

    If Call Option is specified in the relevant Final Terms as being
    applicable, the Notes may be redeemed at the option of the
    Issuer in whole or, if so specified in the relevant Final Terms,
    in part on any Optional Redemption Date (Call) at the
    relevant Optional Redemption Amount (Call) on the Issuer’s
    giving not less than 30 nor more than 60 days’ notice
    to the Noteholders and the Trustee (which notice shall be
    irrevocable and shall oblige the Issuer to redeem the Notes or,
    as the case may be, the Notes specified in such notice on the
    relevant Optional Redemption Date (Call) at the Optional
    Redemption Amount (Call) plus accrued interest (if any) to
    such date).

    

    72

 

    (d) Partial
    redemption

 

    If the Notes are to be redeemed in part only on any date in
    accordance with Condition 10(c) (Redemption at the option of
    the Issuer), the Notes to be redeemed shall be selected by
    the drawing of lots in such place and in such manner as the
    Trustee approves, subject to compliance with applicable law, the
    rules of each competent authority, stock exchange
    and/or
    quotation system (if any) by which the Notes have then been
    admitted to listing, trading
    and/or
    quotation and the notice to Noteholders referred to in Condition
    10(c) (Redemption at the option of the Issuer) shall
    specify the serial numbers of the Notes so to be redeemed. If
    any Maximum Redemption Amount or Minimum
    Redemption Amount is specified in the relevant Final Terms,
    then the Optional Redemption Amount (Call) shall in no
    event be greater than the maximum or be less than the minimum so
    specified.

 

    (e) Redemption
    at the option of Noteholders

 

    If Put Option is specified in the relevant Final Terms as being
    applicable, the Issuer shall, at the option of the holder of any
    Note redeem such Note on the Optional Redemption Date (Put)
    specified in the relevant Put Option Notice at the relevant
    Optional Redemption Amount (Put) together with interest (if any)
    accrued to such date. In order to exercise the option contained
    in this Condition 10(e), the holder of a Note must, not less
    than 30 nor more than 60 days before the relevant Optional
    Redemption Date (Put), deposit with any Paying Agent such
    Note together with all unmatured Coupons relating thereto and a
    duly completed Put Option Notice in the form obtainable from any
    Paying Agent. The Paying Agent with which such Note is so
    deposited shall deliver a duly completed Put Option Receipt to
    the depositing Noteholder. No Note, once deposited with a duly
    completed Put Option Notice in accordance with this Condition
    10(e), may be withdrawn; PROVIDED, HOWEVER, THAT if,
    prior to the relevant Optional Redemption Date (Put), any
    such Note becomes immediately due and payable or, upon due
    presentation of any such Note on the relevant Optional
    Redemption Date (Put), payment of the redemption moneys is
    improperly withheld or refused, the relevant Paying Agent shall
    mail notification thereof to the depositing Noteholder at such
    address as may have been given by such Noteholder in the
    relevant Put Option Notice and shall hold such Note at its
    Specified Office for collection by the depositing Noteholder
    against surrender of the relevant Put Option Receipt. For so
    long as any outstanding Note is held by a Paying Agent in
    accordance with this Condition 10(e), the depositor of such Note
    and not such Paying Agent shall be deemed to be the holder of
    such Note for all purposes.

 

    If the Note is in definitive form and held through Euroclear or
    Clearstream, Luxembourg, to exercise the right to require
    redemption or, as the case may be, purchase of a Note under this
    Condition 10(e) the holder of the Note must, not less than 30
    nor more than 60 days before the relevant Optional
    Redemption Date (Put), give notice to the Principal Paying
    Agent of such exercise in accordance with the standard
    procedures of Euroclear and Clearstream, Luxembourg (which may
    include notice being given on his instruction by Euroclear or
    Clearstream, Luxembourg or

    

    73

 

    any common depositary for them to the Principal Paying Agent by
    electronic means) in a form acceptable to Euroclear and
    Clearstream, Luxembourg from time to time.

 

    (f) Change
    of Control redemption

 

    If Change of Control Put Option is specified in the relevant
    Final Terms as being applicable and a Change of Control Put
    Event occurs, the holder of each Note will have the option
    (unless prior to the giving of the relevant Change of Control
    Put Event Notice the Issuer has given notice of redemption under
    Condition 10(b) (Redemption for tax reasons) or 10(c)
    (Redemption at the option of the Issuer), if applicable)
    to require the Issuer to redeem or, at the Issuer’s option,
    purchase (or procure the purchase of) that Note on the Change of
    Control Optional Redemption Date at its Change of Control
    Optional Redemption Amount together with interest accrued to
    (but excluding) the Change of Control Optional
    Redemption Date.

 

    Promptly upon, and in any event within 14 days after, the
    Issuer becoming aware that a Change of Control Put Event has
    occurred the Issuer shall, and at any time upon the Trustee
    becoming similarly so aware the Trustee may, and if so requested
    by the holders of at least one-quarter in principal amount of
    the Notes then outstanding or if so directed by an Extraordinary
    Resolution of the Noteholders, shall, (subject in each case to
    the Trustee being indemnified
    and/or
    secured to its satisfaction) give the Change of Control Put
    Event Notice to the Noteholders.

 

    To exercise the Change of Control Put Option, the holder of the
    Note must deliver such Note to the specified office of any
    Paying Agent at any time during normal business hours of such
    Paying Agent falling within the Change of Control Put Period,
    accompanied by a duly signed and completed notice of exercise in
    the form (for the time being current) obtainable from the
    specified office of any Paying Agent (an “Exercise
    Notice”). The Note should be delivered together with
    all Coupons appertaining thereto maturing after the Change of
    Control Optional Redemption Date, failing which the Paying
    Agent will require payment from or on behalf of the Noteholder
    of an amount equal to the face value of any such missing Coupon.
    Any amount so paid will be reimbursed by the Paying Agent to the
    Noteholder against presentation and surrender of the relevant
    missing Coupon (or any replacement issued therefor pursuant to
    Condition 15 (Replacement of Notes and Coupons)) at any
    time after such payment, but before the expiry of the period of
    ten years from the date on which such Coupon would have become
    due, but not thereafter. If the Note is in definitive form and
    held through Euroclear or Clearstream, Luxembourg, to exercise
    the right to require redemption or, as the case may be, purchase
    of a Note under this Condition 10(f) the holder of the Note
    must, within the Change of Control Put Period, give notice to
    the Principal Paying Agent of such exercise in accordance with
    the standard procedures of Euroclear and Clearstream, Luxembourg
    (which may include notice being given on his instruction by
    Euroclear or Clearstream, Luxembourg or any common depositary
    for them to the Principal Paying Agent by electronic means) in a
    form acceptable to Euroclear and Clearstream, Luxembourg from

    

    74

 

    time to time. The Paying Agent to which such Note and Exercise
    Notice are delivered will issue to the Noteholder concerned a
    non-transferable receipt in respect of the Note so delivered or,
    in the case of a Note held through Euroclear
    and/or
    Clearstream, Luxembourg, notice received. Payment in respect of
    any Note so delivered will be made, if the holder duly specified
    a bank account in the Exercise Notice to which payment is to be
    made, on the Change of Control Optional Redemption Date by
    transfer to that bank account and, in every other case, on or
    after the Change of Control Optional Redemption Date
    against presentation and surrender or (as the case may be)
    endorsement of such receipt at the specified office of any
    Paying Agent. For the purposes of these Conditions, receipts
    issued pursuant to this Condition 10(f) shall be treated as if
    they were Notes. The Issuer shall redeem or purchase (or procure
    the purchase of) the Notes in respect of which the Change of
    Control Put Option has been validly exercised in accordance with
    the provisions of this Condition 10(f) on the Change of Control
    Optional Redemption Date unless previously redeemed (or
    purchased) and cancelled.

 

    Any Exercise Notice, once given, shall be irrevocable except
    where prior to the Change of Control Optional
    Redemption Date an Event of Default shall have occurred and
    the Trustee shall have accelerated the Notes, in which event
    such holder, at its option, may elect by notice to the Issuer to
    withdraw the Exercise Notice and instead to treat its Notes as
    being forthwith due and payable pursuant to Condition 13.

 

    If 80 per cent. or more in principal amount of the Notes
    then outstanding have been redeemed or purchased pursuant to
    this Condition 10(f), the Issuer may, on giving not less than 30
    nor more than 60 days’ notice to the Noteholders (such
    notice being given within 30 days after the Change of
    Control Optional Redemption Date), redeem or purchase (or
    procure the purchase of), at its option, all but not some only
    of the remaining outstanding Notes at their principal amount,
    together with interest accrued to (but excluding) the date fixed
    for such redemption or purchase.

 

    If the rating designations employed by any Rating Agency are
    changed from those which are described in paragraph (ii) of
    the definition of “Change of Control Put
    Event”, or if a rating is procured from a Substitute
    Rating Agency, the Issuer shall determine, with the agreement of
    the Trustee, the rating designations of such Rating Agency or
    such Substitute Rating Agency (as appropriate) as are most
    equivalent to the prior rating designations of the relevant
    Rating Agency and this Condition 10(f) shall be construed
    accordingly.

 

    The Trustee is under no obligation to ascertain whether a Change
    of Control Put Event or Change of Control or any event which
    could lead to the occurrence of or could constitute a Change of
    Control Put Event or Change of Control has occurred, or to seek
    any confirmation from any Rating Agency pursuant to the
    definition of Negative Rating Event below, and, until it shall
    have actual knowledge or notice pursuant to the Trust Deed
    to the contrary, the Trustee may assume that no Change of
    Control Put Event or Change of Control or other such event has
    occurred.

    

    75

 

    (g) No
    other redemption

 

    The Issuer shall not be entitled to redeem the Notes otherwise
    than as provided in Conditions 10(a) (Scheduled
    redemption) to 10(f) (Change of control redemption)
    above.

 

    (h) Early
    redemption of Zero Coupon Notes

 

    Unless otherwise specified in the relevant Final Terms, the
    Redemption Amount payable on redemption of a Zero Coupon
    Note at any time before the Maturity Date shall be an amount
    equal to the sum of:

 

    (i) the Reference Price; and

 

    (ii) the product of the Accrual Yield (compounded annually)
    being applied to the Reference Price from (and including) the
    Issue Date to (but excluding) the date fixed for redemption or
    (as the case may be) the date upon which the Note becomes due
    and payable.

 

    Where such calculation is to be made for a period which is not a
    whole number of years, the calculation in respect of the period
    of less than a full year shall be made on the basis of such Day
    Count Fraction as may be specified in the Final Terms for the
    purposes of this Condition 10(h) or, if none is so specified, a
    Day Count Fraction of 30E/360.

 

    (i) Purchase

 

    The Issuer or any of its Subsidiaries may at any time purchase
    Notes in the open market or otherwise and at any price,
    PROVIDED THAT all unmatured Coupons are purchased
    therewith.

 

    (j) Cancellation

 

    All Notes so redeemed or purchased by the Issuer or any of its
    Subsidiaries and any unmatured Coupons attached to or
    surrendered with them shall be cancelled and may not be reissued
    or resold.

 

		
	
    11.  
	
    Payments

 

    (a) Principal

 

    Payments of principal shall be made only against presentation
    and (PROVIDED THAT payment is made in full) surrender of
    Notes at the Specified Office of any Paying Agent outside the
    United States by cheque drawn in the currency in which the
    payment is due on, or by transfer to an account denominated in
    that currency (or, if that currency is euro, any other account
    to which euro may be credited or transferred) and maintained by
    the payee with, a bank in the Principal Financial Centre of that
    currency (in the case of a sterling cheque, a town clearing
    branch of a bank in the City of London).

    

    76

 

    (b) Interest

 

    Payments of interest shall, subject to paragraph (h) below,
    be made only against presentation and (PROVIDED THAT
    payment is made in full) surrender of the appropriate
    Coupons at the Specified Office of any Paying Agent outside the
    United States in the manner described in paragraph
    (a) above.

 

    (c) Payments
    in New York City

 

    Payments of principal or interest may be made at the Specified
    Office of a Paying Agent in New York City if (i) the Issuer
    has appointed Paying Agents outside the United States with the
    reasonable expectation that such Paying Agents will be able to
    make payment of the full amount of the interest on the Notes in
    the currency in which the payment is due when due,
    (ii) payment of the full amount of such interest at the
    offices of all such Paying Agents is illegal or effectively
    precluded by exchange controls or other similar restrictions and
    (iii) payment is permitted by applicable United States law.

 

    (d) Payments
    subject to fiscal laws

 

    All payments in respect of the Notes are subject in all cases to
    any applicable fiscal or other laws and regulations in the place
    of payment, but without prejudice to the provisions of Condition
    12 (Taxation). No commissions or expenses shall be
    charged to the Noteholders or Couponholders in respect of such
    payments.

 

    (e) Deductions
    for unmatured Coupons

 

    If the relevant Final Terms specifies that the Fixed Rate Note
    provisions are applicable and a Note is presented without all
    unmatured Coupons relating thereto:

 

    (i) if the aggregate amount of the missing Coupons is less
    than or equal to the amount of principal due for payment, a sum
    equal to the aggregate amount of the missing Coupons will be
    deducted from the amount of principal due for payment; provided,
    however, that if the gross amount available for payment is less
    than the amount of principal due for payment, the sum deducted
    will be that proportion of the aggregate amount of such missing
    Coupons which the gross amount actually available for payment
    bears to the amount of principal due for payment;

 

    (ii) if the aggregate amount of the missing Coupons is
    greater than the amount of principal due for payment:

 

    (A) so many of such missing Coupons shall become void (in
    inverse order of maturity) as will result in the aggregate
    amount of the remainder of such missing Coupons (the
    “Relevant Coupons”) being equal to the amount
    of principal due for payment; provided, however, that where this
    sub-paragraph
    would otherwise require a fraction of a missing Coupon to become
    void, such missing Coupon shall become void in its
    entirety; and

    

    77

 

    (B) a sum equal to the aggregate amount of the Relevant
    Coupons (or, if less, the amount of principal due for payment)
    will be deducted from the amount of principal due for payment;
    provided, however, that, if the gross amount available for
    payment is less than the amount of principal due for payment,
    the sum deducted will be that proportion of the aggregate amount
    of the Relevant Coupons (or, as the case may be, the amount of
    principal due for payment) which the gross amount actually
    available for payment bears to the amount of principal due for
    payment.

 

    Each sum of principal so deducted shall be paid in the manner
    provided in paragraph (a) above against presentation and
    (PROVIDED THAT payment is made in full) surrender of the
    relevant missing Coupons.

 

    (f) Unmatured
    Coupons void

 

    If the relevant Final Terms specifies that this Condition 11(f)
    is applicable or that the Floating Rate Note provisions or the
    Index-Linked Interest Note provisions are applicable, on the due
    date for final redemption of any Note or early redemption in
    whole of such Note pursuant to Condition 10(b) (Redemption
    for tax reasons), Condition 10(e) (Redemption at the
    option of Noteholders), Condition 10(c) (Redemption at
    the option of the Issuer) or Condition 13 (Events of
    Default), all unmatured Coupons relating thereto (whether or
    not still attached) shall become void and no payment will be
    made in respect thereof.

 

    (g) Payments
    on business days

 

    If the due date for payment of any amount in respect of any Note
    or Coupon is not a Payment Business Day in the place of
    presentation, the holder shall not be entitled to payment in
    such place of the amount due until the next succeeding Payment
    Business Day in such place and shall not be entitled to any
    further interest or other payment in respect of any such delay.

 

    (h) Payments
    other than in respect of matured Coupons

 

    Payments of interest other than in respect of matured Coupons
    shall be made only against presentation of the relevant Notes at
    the Specified Office of any Paying Agent outside the United
    States (or in New York City if permitted by paragraph
    (c) above).

 

    (i) Partial
    payments

 

    If a Paying Agent makes a partial payment in respect of any Note
    or Coupon presented to it for payment, such Paying Agent will
    endorse thereon a statement indicating the amount and date of
    such payment.

    

    78

 

    (j) Exchange
    of Talons

 

    On or after the maturity date of the final Coupon which is (or
    was at the time of issue) part of a Coupon Sheet relating to the
    Notes, the Talon forming part of such Coupon Sheet may be
    exchanged at the Specified Office of the Principal Paying Agent
    for a further Coupon Sheet (including, if appropriate, a further
    Talon but excluding any Coupons in respect of which claims have
    already become void pursuant to Condition 14
    (Prescription). Upon the due date for redemption of any
    Note, any unexchanged Talon relating to such Note shall become
    void and no Coupon will be delivered in respect of such Talon.

 

		
	
    12.  
	
    Taxation

 

    (a) Gross
    up

 

    All payments of principal and interest in respect of the Notes
    and the Coupons by or on behalf of the Issuer or any Guarantor
    shall be made free and clear of, and without withholding or
    deduction for or on account of, any present or future taxes,
    duties, assessments or governmental charges of whatever nature
    imposed, levied, collected, withheld or assessed by or on behalf
    of the United Kingdom or any political subdivision therein or
    any authority therein or thereof having power to tax, unless the
    withholding or deduction of such taxes, duties, assessments, or
    governmental charges is required by law. In that event, the
    Issuer or, as the case may be, such Guarantor, shall pay such
    additional amounts as will result in receipt by the Noteholders
    and the Couponholders after such withholding or deduction of
    such amounts as would have been received by them had no such
    withholding or deduction been required, except that no such
    additional amounts shall be payable in respect of any Note or
    Coupon presented for payment:

 

    (i) by or on behalf of a holder which is liable to such
    taxes, duties, assessments or governmental charges in respect of
    such Note or Coupon by reason of its having some connection with
    the jurisdiction by which such taxes, duties, assessments or
    charges have been imposed, levied, collected, withheld or
    assessed other than the mere holding of the Note or
    Coupon; or

 

    (ii) where such withholding or deduction is imposed on a
    payment to or for an individual and is required to be made
    pursuant to European Council Directive 2003/48/EC or any other
    Directive implementing the conclusions of the ECOFIN Council
    meeting of 26 — 27 November 2000 on the taxation
    of savings income or any law of the EU or a non-Member State
    implementing or complying with, or introduced in order to
    conform to, such Directive; or

 

    (iii) by or on behalf of a holder who would have been able
    to avoid such withholding or deduction by presenting the
    relevant Note or Coupon to another Paying Agent (if any); or

    

    79

 

    (iv) more than 30 days after the Relevant Date except
    to the extent that the holder of such Note or Coupon would have
    been entitled to such additional amounts on presenting such Note
    or Coupon for payment on the last day of such period of
    30 days.

 

    (b) Taxing
    jurisdiction

 

    If the Issuer or any Guarantor becomes subject at any time to
    any taxing jurisdiction other than the United Kingdom,
    references in these Conditions to the United Kingdom shall be
    construed as references to the United Kingdom
    and/or such
    other jurisdiction.

 

		
	
    13.  
	
    Events of
    Default

 

    If any of the following events occurs and is continuing then the
    Trustee may at its discretion and shall, if so requested in
    writing by the holders of at least one fifth of the aggregate
    principal amount of the outstanding Notes, or if so directed by
    an Extraordinary Resolution (subject to the Trustee having been
    indemnified
    and/or
    provided with security
    and/or
    prefunded by the Noteholders to its satisfaction) by written
    notice to the Issuer, declare the Notes to be immediately due
    and payable, whereupon they shall become immediately due and
    payable at their Early Termination Amount together with accrued
    interest (if any) without further action or formality:

 

    (a) Non-payment

 

    the Issuer fails to pay any amount of principal in respect of
    the Notes within ten days of the due date for payment thereof or
    any amount of interest in respect of the Notes within ten days
    of the due date for payment thereof; or

 

    (b) Breach
    of other obligations

 

    the Issuer or any Guarantor does not comply with any of their
    other obligations under or in respect of the Notes or the
    Trust Deed and (except in any case where, in the opinion of
    the Trustee, such failure is incapable of remedy in which case
    no continuation or notice as is hereinafter provided will be
    required) such failure to comply continues unremedied for
    30 days (or such longer period as the Trustee may permit)
    after written notice thereof has been delivered by the Trustee
    to the Issuer or such Guarantor, as the case may be; or

 

    (c) Cross
    Default

 

    (i) any Indebtedness of the Issuer or any Guarantor or any
    Material Subsidiary becomes due and repayable prematurely by
    reason of an event of default (however described);

 

    (ii) the Issuer or any Guarantor or any Material Subsidiary
    fails to make any payment in respect of any Indebtedness on the
    due date for payment or, as the case may be, within any
    applicable grace period as originally provided;

 

    (iii) any security given by the Issuer or any Guarantor or
    any Material Subsidiary for any Indebtedness is enforced; or

    

    80

 

    (iv) default is made by the Issuer or any Guarantor or any
    Material Subsidiary in making any payment due under any
    guarantee
    and/or
    indemnity given by it in relation to any Indebtedness of any
    other person,

 

    provided that (i) no event described in this Condition
    13(c) shall constitute an Event of Default where the Issuer or
    the relevant Guarantor or the relevant Material Subsidiary, as
    the case may be, satisfies the Trustee that it is contesting
    such Event of Default in good faith and by appropriate action
    and (ii) no event described in this Condition 13(c) shall
    constitute an Event of Default unless the Indebtedness or other
    relative liability, either alone or when aggregated with other
    Indebtedness
    and/or other
    liabilities relative to all (if any) other events described in
    this Condition 13(c) which have occurred and are continuing
    (excluding where the Issuer
    and/or the
    relevant Guarantor
    and/or the
    relevant Material Subsidiary, as the case may be, has satisfied
    the Trustee that it is contesting such event in good faith and
    by appropriate action), amounts to at least U.S.$50,000,000 (or
    its equivalent in any other currency); or

 

    (d) Security
    enforced

 

    a secured party takes possession, or a receiver, manager or
    other similar officer is appointed, of all or substantially all
    of the undertaking, assets and revenues of the Issuer, a
    Guarantor or any Material Subsidiary; or

 

    (e) Creditor’s
    process

 

    any expropriation, attachment, sequestration, distress or
    execution affects any asset or assets of the Issuer, any
    Guarantor or a Material Subsidiary having an aggregate value of
    and in respect of indebtedness aggregating at least
    U.S.$50,000,000 (or its equivalent in any other currency or
    currencies) and is not discharged within 30 days; or

 

    (f) Insolvency
    etc.

 

    (i) the Issuer, any Guarantor or any Material Subsidiary
    becomes insolvent or is unable to pay its debts as they fall
    due, (ii) an administrator or liquidator of the Issuer, any
    Guarantor or any Material Subsidiary of all or substantially all
    of the undertaking, assets and revenues of the Issuer, such
    Guarantor or such Material Subsidiary is appointed (otherwise
    than for the purposes of or pursuant to an amalgamation,
    reorganisation or restructuring whilst solvent on terms
    previously approved in writing by the Trustee or by an
    Extraordinary Resolution); or (iii) the Issuer, any
    Guarantor or any Material Subsidiary makes a general assignment
    or an arrangement or composition with or for the benefit of its
    creditors generally or declares a moratorium in respect of any
    of its Indebtedness given by it; or (iv) a person presents
    a petition for the winding up, liquidation, dissolution,
    administration or suspension of payments of the Issuer, any
    Guarantor or any Material Subsidiary (excluding where the
    Issuer, such Guarantor or such Material Subsidiary has satisfied
    the Trustee that it is contesting such petition in good faith
    and by appropriate action); or

    

    81

 

    (g) Winding
    up etc.

 

    an order is made or an effective resolution is passed for the
    winding up, liquidation or dissolution of the Issuer, any
    Guarantor or any Material Subsidiary (otherwise than for the
    purposes of or pursuant to an amalgamation, reorganisation or
    restructuring whilst solvent on terms previously approved in
    writing by the Trustee or by an Extraordinary
    Resolution); or

 

    (h) Failure
    to take action etc.

 

    any action, condition or thing at any time required to be taken,
    fulfilled or done in order (i) to enable the Issuer or the
    Guarantors lawfully to enter into, exercise their respective
    rights and perform and comply with their respective obligations
    under and in respect of the Notes, the Coupons and the
    Trust Deed, (ii) to ensure that those obligations are
    legal, valid, binding and enforceable and (iii) to make the
    Notes, the Coupons and the Trust Deed admissible in
    evidence in the courts of England is not taken, fulfilled or
    done; or

 

    (i) Cessation
    of business etc.

 

    the Issuer, any Guarantor or any Material Subsidiary ceases or
    threatens to cease to carry on all or substantially all of its
    business, save for (i) the purposes of or pursuant to an
    amalgamation, reorganisation or restructuring neither involving
    nor arising out of the insolvency of the Issuer or, as the case
    may be, such Guarantor or Material Subsidiary, (ii) any
    transfer of assets by the Issuer, any Guarantor or any Material
    Subsidiary to any other member of the Group, (iii) any
    transfer of assets by the Issuer, any Guarantor or any Material
    Subsidiary to a third party or parties (whether associated or
    not) on an arm’s length basis, (iv) any transfer of
    assets by the Issuer, any Guarantor or any Material Subsidiary
    whereby the transferee is or immediately upon such transfer
    becomes a Material Subsidiary, or (v) any transfer of
    assets by the Issuer, any Guarantor or any Material Subsidiary
    the terms of which have been previously approved by the Trustee
    or by an Extraordinary Resolution of the Noteholders; or

 

    (j) Guarantee
    etc.

 

    any Guarantee ceases to be, or is claimed by a Guarantor not to
    be, in full force and effect; or

 

    (k) Guarantors
    etc.

 

    any Guarantor ceases to be a Subsidiary controlled, directly or
    indirectly, by the Issuer,

 

    provided that, in the case of Conditions 13(b), (d) and
    (f) to (i) inclusive, the Trustee shall have certified
    in writing that such event is in its opinion materially
    prejudicial to the interests of the Noteholders.

    

    82

 

		
	
    14.  
	
    Prescription

 

    Claims for principal shall become void unless the relevant Notes
    are presented for payment within ten years of the appropriate
    Relevant Date. Claims for interest shall become void unless the
    relevant Coupons are presented for payment within five years of
    the appropriate Relevant Date.

 

		
	
    15.  
	
    Replacement
    of Notes and Coupons

 

    If any Note or Coupon is lost, stolen, mutilated, defaced or
    destroyed, it may be replaced at the Specified Office of the
    Principal Paying Agent (and, if the Notes are then admitted to
    listing, trading
    and/or
    quotation by any competent authority, stock exchange
    and/or
    quotation system which requires the appointment of a Paying
    Agent in any particular place, a Paying Agent having its
    Specified Office in the place required by such competent
    authority, stock exchange
    and/or
    quotation system), subject to all applicable laws and competent
    authority, stock exchange
    and/or
    quotation system requirements, upon payment by the claimant of
    the expenses incurred in connection with such replacement and on
    such terms as to evidence, security, indemnity and otherwise as
    the Issuer and the Guarantors may reasonably require. Mutilated
    or defaced Notes or Coupons must be surrendered before
    replacements will be issued.

 

		
	
    16.  
	
    Trustee
    and Agents

 

    The Trust Deed contains provisions for the indemnification
    of the Trustee and for its relief from responsibility, including
    provisions relieving it from any obligation to take proceedings
    to enforce repayment unless indemnified
    and/or
    secured to its satisfaction and to be paid its costs and
    expenses in priority to the claims of Noteholders. The
    Trust Deed also contains provisions pursuant to which the
    Trustee is entitled, inter alia, (i) to enter into
    business transactions with the Issuer, the Guarantors
    and/or any
    other Subsidiary
    and/or any
    related entity thereof and to act as trustee for the holders of
    any other securities issued or guaranteed by or relating to the
    Issuer, the Guarantors or any other Subsidiary, (ii) to
    exercise and enforce its rights, comply with its obligations and
    perform its duties under or in relation to any such transactions
    or, as the case may be, any such trusteeship without regard to
    the interests of, or consequences for, the Noteholders or
    Couponholders, and (iii) to retain and not be liable to
    account for any profit made or any other amount or benefit
    received thereby or in connection therewith.

 

    In the exercise of its powers and discretions under these
    Conditions
    and/or the
    Trust Deed, the Trustee will have regard to the interests
    of the Noteholders as a class and will not be responsible for
    any consequences for individual holders of Notes, Coupons or
    Talons as a result of such holders being connected in any way
    with a particular territory or taxing jurisdiction.

 

    In acting under the Agency Agreement and in connection with the
    Notes and the Coupons, the Paying Agents and the Calculation
    Agent (if any) act solely as agents of the Issuer or, following
    the occurrence of an Event of Default, the Trustee and do not
    assume any obligations towards or relationship of agency or
    trust for or with any of the Noteholders or Couponholders.

    

    83

 

    The Principal Paying Agent and its initial Specified Office is
    set out below. The initial Calculation Agent (if any) is
    specified in the relevant Final Terms. The Issuer reserves the
    right at any time, with the prior written consent of the
    Trustee, to vary or terminate the appointment of any Paying
    Agent or Calculation Agent and to appoint a successor principal
    paying agent or calculation agent and additional or successor
    paying agents; PROVIDED, HOWEVER, THAT:

 

    (a) the Issuer shall at all times maintain a Principal
    Paying Agent; and

 

    (b) the Issuer shall at all times maintain a paying agent
    in an EU member state that will not be obliged to withhold or
    deduct tax pursuant to European Council Directive 2003/48/EC or
    any other Directive implementing the conclusions of the ECOFIN
    Council meeting of
    26-27 November
    2000; and

 

    (c) if a Calculation Agent is specified in the relevant
    Final Terms, the Issuer shall at all times maintain a
    Calculation Agent; and

 

    (d) if and for so long as the Notes are admitted to
    listing, trading
    and/or
    quotation by any competent authority, stock exchange
    and/or
    quotation system which requires the appointment of a Paying
    Agent in any particular place, the Issuer shall maintain a
    Paying Agent having its Specified Office in the place required
    by such competent authority, stock exchange
    and/or
    quotation system.

 

    Notice of any appointment of, or change in, any of the Paying
    Agents or in their Specified Offices shall promptly be given to
    the Noteholders in accordance with Condition 19 (Notices).

 

		
	
    17.  
	
    Meetings
    of Noteholders; Modification and Waiver

 

    (a) Meetings
    of Noteholders

 

    The Trust Deed contains provisions for convening meetings
    of Noteholders to consider matters relating to the Notes,
    including the modification of any provision of these Conditions
    or the Trust Deed. Any such modification may be made if
    sanctioned by an Extraordinary Resolution. Such a meeting may be
    convened by the Issuer or the Trustee and shall be convened by
    the Trustee upon the request in writing of Noteholders holding
    not less than one-tenth of the aggregate principal amount of the
    outstanding Notes. The quorum at any meeting convened to vote on
    an Extraordinary Resolution will be two or more Persons holding
    or representing more than half of the aggregate principal amount
    of the outstanding Notes or, at any adjourned meeting, two or
    more Persons being or representing Noteholders whatever the
    principal amount of the Notes held or represented; PROVIDED,
    HOWEVER, THAT Reserved Matters may only be sanctioned by an
    Extraordinary Resolution passed at a meeting of Noteholders at
    which two or more Persons holding or representing not less than
    three-quarters or, at any adjourned meeting, not less than one
    quarter of the aggregate principal amount of the outstanding
    Notes form a quorum. Any Extraordinary Resolution duly passed at
    any such meeting shall be binding on all the Noteholders and
    Couponholders, whether present or not.

    

    84

 

    In addition, a resolution in writing signed by or on behalf of
    at least 75 per cent. of the Noteholders who for the time
    being are entitled to receive notice of a meeting of Noteholders
    under the Trust Deed will take effect as if it were an
    Extraordinary Resolution. Such a resolution in writing may be
    contained in one document or several documents in the same form,
    each signed by or on behalf of one or more Noteholders.

 

    (b) Modification
    and waiver

 

    The Trustee may agree, without the consent of the Noteholders or
    Couponholders, to (i) any modification to or of these
    Conditions, the Notes or the Trust Deed (other than in
    respect of a Reserved Matter) which is, in the opinion of the
    Trustee, proper to make if, in the opinion of the Trustee, such
    modification will not be materially prejudicial to the interests
    of Noteholders, (ii) any modification of these Conditions,
    the Notes or the Trust Deed that is of a formal, minor or
    technical nature or is made to correct a manifest error or to
    correct an error which, in the opinion of the Trustee, is
    proven, and (iii) any waiver or authorisation of any breach
    or proposed breach, of any of the provisions of these
    Conditions, the Notes or the Trust Deed (other than a
    proposed breach or breach relating to the subject of a Reserved
    Matter) that is in the opinion of the Trustee not materially
    prejudicial to the interests of the Noteholders. Any such
    modification, authorisation or waiver shall be binding on the
    Noteholders and the Couponholders and, if the Trustee so
    requires, such modification, authorisation or waiver shall be
    notified to the Noteholders as soon as practicable in accordance
    with Condition 19 (Notices).

 

    (c) Substitution

 

    The Trust Deed contains provisions permitting the Trustee
    to agree, without the consent of the Noteholders, the
    Receiptholders or the Couponholders, to the substitution of
    certain other entities in place of the Issuer or any Guarantor
    (or in either case any previously substituted company) as
    principal debtor or, as the case may be, guarantor under the
    Trust Deed in relation to the Notes, Receipts and Coupons of any
    Series of Notes, subject to (i) the Notes being
    unconditionally and irrevocably guaranteed by the Issuer or, as
    the case may be, the relevant Guarantor, (ii) the Trustee
    being satisfied that such substitution is not materially
    prejudicial to the interests of Noteholders; and
    (iii) certain other conditions set out in the
    Trust Deed being complied with.

 

    No Noteholder or Couponholder shall, in connection with any
    substitution, be entitled to claim any indemnification or
    payment in respect of any tax consequence thereof for such
    Noteholder or (as the case may be) Couponholder except to the
    extent provided for in Condition 12 (Taxation) (or any
    undertaking given in addition to or substitution for it pursuant
    to the provisions of the Trust Deed).

 

		
	
    18.  
	
    Enforcement

 

    The Trustee may, at any time, at its discretion and without
    further notice, institute such proceedings against the Issuer
    and/or the
    Guarantors as it thinks fit to enforce any obligation, condition
    or provision binding on the Issuer

    

    85

 

    and/or the
    Guarantors under these Conditions, the Notes or the
    Trust Deed, but shall not be bound to do so unless:

 

    (a) it has been so directed by an Extraordinary Resolution
    or it has been so requested in writing by the holders of at
    least one fifth of the nominal amount of the Notes
    outstanding; and

 

    (b) it has been indemnified
    and/or
    secured
    and/or
    prefunded by the Noteholders to its satisfaction.

 

    No Noteholder or Couponholder shall be entitled to institute
    proceedings directly against the Issuer or a Guarantor unless
    the Trustee, having become bound to proceed as aforesaid, fails
    to do so within a reasonable time and such failure is continuing.

 

		
	
    19.  
	
    Notices

 

    (a) Valid
    Notices

 

    Notices to the Noteholders shall be valid if published in a
    leading English language daily newspaper published in London
    (which is expected to be the Financial Times) or, if such
    publication is not practicable, in a leading English language
    daily newspaper having general circulation in Europe. Any such
    notice shall be deemed to have been given on the date of first
    publication (or if required to be published in more than one
    newspaper, on the first date on which publication shall have
    been made in all the required newspapers).

 

    (b) Other
    Methods

 

    Notwithstanding paragraph (a) above, the Trustee may
    approve some other method of giving notice to the Noteholders
    if, in its opinion, that other method is reasonable having
    regard to market practice then prevailing and to the
    requirements of any stock exchange on which Notes are then
    listed and PROVIDED THAT notice of that other method is
    given to the Noteholders in the manner required by the Trustee.

 

    (c) Couponholders

 

    Couponholders shall be deemed for all purposes to have notice of
    the contents of any notice given to the Noteholders.

 

		
	
    20.  
	
    Rounding

 

    For the purposes of any calculations referred to in these
    Conditions (unless otherwise specified in these Conditions or
    the relevant Final Terms), (a) all percentages resulting
    from such calculations will be rounded, if necessary, to the
    nearest one hundred-thousandth of a percentage point (with
    0.000005 per cent. being rounded up to 0.00001 per
    cent.), (b) all United States dollar amounts used in or
    resulting from such calculations will be rounded to the nearest
    cent (with one half cent being rounded up), (c) all
    Japanese Yen amounts used in or resulting from such calculations
    will be rounded downwards to the next lower whole Japanese Yen
    amount, and (d) all amounts

    

    86

 

    denominated in any other currency used in or resulting from such
    calculations will be rounded to the nearest two decimal places
    in such currency, with 0.005 being rounded upwards.

 

		
	
    21.  
	
    Further
    Issues

 

    The Issuer may from time to time without the consent of the
    Noteholders or Couponholders create and issue further securities
    either having the same terms and conditions as the Notes in all
    respects (or in all respects except for the first payment of
    interest on them) and so that such further issue shall be
    consolidated and form a single series with the outstanding
    securities of any series (including the Notes) or upon such
    terms as the Issuer may determine at the time of their issue.
    References in these Conditions to the Notes include (unless the
    context requires otherwise) any other securities issued pursuant
    to this Condition and forming a single series with the Notes.
    The Trust Deed contains provisions for convening a single
    meeting of the Noteholders and the holders of securities of
    other series where the Trustee so decides.

 

		
	
    22.  
	
    Governing
    Law and Jurisdiction

 

    (a) Governing
    law

 

    The Notes and the Trust Deed, and any non-contractual
    obligations arising out of or in connection with the Notes and
    the Trust Deed, are governed by, and construed in
    accordance with, English law.

 

    (b) English
    courts

 

    The courts of England have exclusive jurisdiction to settle any
    dispute (a “Dispute”) arising out of or in
    connection with the Notes and the Trust Deed (including a
    dispute relating to the existence, validity or cancellation of
    the Notes or any non-contractual obligation arising out of or in
    connection with the Notes or the Trust Deed) or the
    consequences of their nullity.

 

    (c) Appropriate
    forum

 

    The Issuer and each of the Guarantors agree that the courts of
    England are the most appropriate and convenient courts to settle
    any Dispute and, accordingly, that they will not argue to the
    contrary.

    

    87

 

	 	 	 
	

    The Issuer

	
 
	
 

	
 
	
 
	
 

	

    EXECUTED and DELIVERED as a DEED by

	
 
	
    ) NICOLETTE HENFREY

	
 
	
 
	
    )

	

    as attorney for

	
 
	
    )

	

    INTERCONTINENTAL HOTELS GROUP PLC

	
 
	
    )

 

	 	 	 	 	 
	

    Witness:

	
 
	
    Signature:
	
 
	
    DAVID CONNOLLY

	
 
	
 
	
    Name:
	
 
	
    DAVID CONNOLLY

 

	 	 	 
	

    The Guarantors

	
 
	
 

	
 
	
 
	
 

	

    EXECUTED and DELIVERED as a DEED by

	
 
	
    )

	

    INTERCONTINENTAL HOTELS LIMITED 

	
 
	
    )

	

    a company incorporated in England and Wales acting by

	
 
	
    )

	
 
	
 
	
    )

	

              , a
    director of the Company and

	
 
	
    ) RICHARD SOLOMONS

	

              , a
    director of the company/

	
 
	
    ) GEORGE TURNER

	
 
	
 
	
 

	

    EXECUTED and DELIVERED as a DEED by

	
 
	
    )

	

    SIX CONTINENTS LIMITED

	
 
	
    )

	

    a company incorporated in England and Wales acting by

	
 
	
    )

	
 
	
 
	
    )

	

              , a
    director of the Company and

	
 
	
    ) RICHARD SOLOMONS

	

              , a
    director of the company/

	
 
	
    ) GEORGE TURNER

 

	 	 	 
	

    The Trustee

	
 
	
 

	
 
	
 
	
 

	

    EXECUTED as a DEED by Leticia Acevedo

	
 
	
    )

	

    as attorney for

	
 
	
    )

	

    HSBC CORPORATE TRUSTEE

	
 
	
    )

	

    COMPANY (UK) LIMITED

	
 
	

    ) LETICIA ACEVEDO

    Attorney

 

	 	 	 	 	 
	

    Witness:

	
 
	
    Signature:
	
 
	
    SAMUEL WILSON

	
 
	
 
	
    Name:
	
 
	
    SAMUEL WILSON

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