Document:

Exhibit 4.6

 

CONTRACT OF LEASE

 

This Contract of Lease (the “Contract”) is made and entered into this Sept. 27, 2012 at Makati City, Philippines, by and between:

 

MEGAWORLD CORPORATION, a corporation duly organized and existing under and by virtue of Philippine laws, with business and postal address at the 28th Floor, The World Centre, 330 Sen. Gil Puyat Avenue, Makati City, represented herein by its Senior Assistant Vice President for Controllership Group,  JOEY I. VILLAFUERTE (hereinafter referred to as “LESSOR”)

 

-  and  -

 

WNS GLOBAL SERVICES PHILIPPINES, INC.,  a corporation duly organized and existing under and by virtue of Philippine laws with business address at the 9th Floor 1880 Eastwood Avenue Building, Eastwood City Cyberpark Bagumbayan, Quezon City, represented herein by its Managing Director, AMITABH  SINGH, (hereinafter referred to as the “LESSEE”)

 

W I T N E S S E T H:

 

For and in consideration of the payment of rents and other sums due hereunder, and the faithful compliance with all the conditions and covenants hereinafter contained, the LESSOR hereby leases, lets, and demises unto LESSEE, and the latter does hereby accept under lease, certain floor space constituting the Leased Premises, which are more particularly described in the Essential Provisions attached as Annex “A” hereof and The Risk Assessment Mitigation Document attached as Annex “B” hereof, both of which are made integral parts of this Contract;

 

This lease is granted by LESSOR and accepted by LESSEE subject to the following terms, covenants, conditions and restrictions.

 

ARTICLE 1 — DEFINITIONS

 

1.              DEFINITIONS -  As used herein, the following terms shall have the following respective meanings:

 

“Building” shall refer to the improvement identified in Annex “A” where the Leased Premises are located.

 

“Building Rules” shall refer to the rules and regulations which may from time to time be adopted by LESSOR regarding the occupancy of the Leased Premises and/or Building as well as the management, operation or maintenance of the Building.

 

“Common Areas” shall refer to all areas and facilities in the Building which have been designated by LESSOR for the general use and convenience of all lessees or occupants of the Building, their respective employees, customers and guests.

 

“Common Area Charges” shall refer to LESSEE’s monthly share in all costs and expenses incurred or to be incurred in the operation, management, repair and maintenance of the Common Areas, excluding those portions of the Common Areas which are reserved for the exclusive use of persons other than LESSEE.

 

“Force Majeure” shall mean an act, event or cause which is unexpected or unforeseen, or if foreseen, must be impossible to avoid, or which is beyond the control of LESSOR or LESSEE.  This term includes but is not limited to rebellion, insurrection, labor unrest, lockout, work stoppage, strikes on a citywide or nationwide scale, flood, typhoon, earthquake, robbery, theft, terrorism, or any other crime.

 

“Leasable Area” shall refer to the total floor area leased to LESSEE, computed by measuring from the outside finish of the permanent exterior building walls, and from the sides facing the Common Areas, and to the center of partitions that separate such floor space from adjoining leasable areas, without any deduction for columns, projections or other structural elements  common to the Building, and an area equal to a pro-rate share in the limited Common Areas in the floor where the premises is located.

 

“Leased Premises” shall refer to the floor space specifically described in Annex “A”.

 

“Lease Term” shall refer to the term of the lease over the Leased Premises as specified in Annex “A” or any renewal thereof.

 

ARTICLE 2  -  LEASE TERM/ DELIVERY AND FIT-OUT OF LEASED PREMISES

 

2.1                               LEASE TERM  -  This lease shall be for a term specified in Annex “A”.  Unless otherwise renewed under the conditions established hereunder, this lease shall not be deemed extended beyond the date specified herein for its termination for any reason whatsoever.  There shall be no tacit renewal of this Contract, notwithstanding the continuation of LESSEE in the possession of the Leased Premises for any length of time after expiration of the term of this lease.

 

This lease may be renewed upon the written agreement of LESSOR and LESSEE and under such terms and conditions as may be acceptable to them; provided, that should LESSOR and LESSEE fail to agree on the terms and conditions under which this lease shall be renewed on or before ninety (90) calendar days prior to the expiry of this lease, this lease shall automatically terminate and LESSOR shall be entitled to the rights granted under this Contract by reason of such termination.

 

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2.2                               DELIVERY OF LEASED PREMISES  -  LESSOR shall deliver to LESSEE physical possession of the Leased Premises in “as is” condition fit for the use intended on or before the date specified in Annex “A”.  Upon delivery of the Leased Premises, LESSEE may commence any and all works necessary to render the Leased Premises suitable for its use in accordance with plans and specifications approved by LESSOR.

 

If LESSOR is unable to transfer physical possession of the Leased Premises to LESSEE on the date specified herein due to (i) the unjustifiable refusal of a prior lessee to vacate the Leased Premises notwithstanding the expiration or termination of the lease agreed upon between such prior lessee and LESSOR, or (ii) any other reason beyond the control of LESSOR,  provided, no fault or omission is attributable to LESSOR and provided further that, LESSOR has exerted all efforts and observed due diligence in eliminating the cause of the delay, LESSOR shall not be subject to any liability for its failure to deliver the Leased Premises to LESSEE on the date specified.  Neither shall such failure affect the validity of this lease; provided, that the commencement date for the lease, as well as for the rental payments and other payment of LESSEE hereunder, shall be deferred to a date corresponding to the period of delay in the delivery, unless the parties shall mutually agree in writing on another period.

 

If the delay in delivering physical possession of the Leased Premises to LESSEE is attributable to the act or omission of LESSOR:

 

(a)         LESSOR shall reimburse LESSEE for any and all costs incurred by LESSEE for or arising from having to take and use another location/site or accommodation during the period of delay; and

 

(b)         LESSOR shall pay an interest at two percent (2%) per month on the costs incurred by LESSEE on its fit-out items and equipment.  From the agreed hand-over date to the date LESSEE actually takes physical possession of the Leased Premises.

 

The foregoing right of the LESSEE is without prejudice to any other remedy available under this Agreement.

 

If the delay in the delivery exceeds sixty (60) days, LESSEE shall have the option to rescind this Contract without penalty on its part and without need of judicial action, without prejudice to its remedies under this Contract and under the law.  LESSOR shall reimburse the costs of any equipment and fit-out items (including without limitation, any importation costs) specifically meant for the Building or for transferring all of LESSEE’s equipment and items to an alternative location, if this Contract is terminated due to act or omission not attributable to LESSEE.

 

2.3.                            RIGHTS RESERVED TO LESSOR  -  The grant of this lease shall not prejudice or adversely affect the following rights of LESSOR:

 

(a)                                 to provide for the free and uninterrupted passage and running of water, drainage, electricity, telecommunications or other public utilities or services through the installation of conduits, pipes, wires, cables or ducts as are now or may hereafter be installed in, on or under the Leased Premises, serving or capable of serving the Building, or the Common Areas or any adjoining property, and to enter the Leased Premises to inspect, repair or maintain such conduits, pipes, wires, cables or ducts at least forty-eight (48) hours after the issuance of a prior written notice to LESSEE, except in cases of emergency when such notice shall not be required.  Any such activity shall be effected in a manner as to cause the least inconvenience to LESSEE, its employees and/or guests;

 

(b)                                 to erect, alter or consent to the erection or alteration of any building located on any adjoining or neighboring property, notwithstanding that such erection or alteration may diminish the access of light, view or air enjoyed by the Leased Premises, or to deal with such neighboring or adjoining property as LESSOR shall see fit.  Provided however, that the LESSOR shall exert best efforts (i) to ensure that LESSEE’s quiet enjoyment of the Leased Premises is not interfered with during the construction of the neighboring property, (ii) to ensure that proper and recognized health and safety measures for all works to the neighboring property are being enforced at all times and adequate risk assessments are routinely being conducted and implemented accordingly, and (iii) not to diminish the access of light, view or air enjoyed by the Leased Premises and otherwise not to prejudice LESSEE  herein.  LESSOR further agrees to indemnify on a non-pass through basis and hold LESSEE free and harmless from and against any costs, damages or liabilities which may arise as a result of any failure to employ proper health and safety measures in respect for the adjacent works;

 

(c)                                  to enjoy subjacent and lateral support from the Leased Premises for the remainder of the Building;

 

(d)                                 to name or re-name the Building with any such style or name and, from time to time, to change, alter, substitute or abandon any such name, without compensation to LESSEE or the other tenants of the Building; provided, that LESSOR  shall give LESSEE not less than two (2) months’ prior written notice of LESSOR’s intention to do so and provided further, that such name shall not be contrary to law, morals, good customs or public policy, and the name is not that of an entity engaged in call center business or is otherwise a competitor of LESSEE;

 

(e)                                  to improve, change, alter, extend, reduce, add or otherwise deal in any manner with the arrangement, design or decoration of the Common Areas; provided, that in exercising such right, LESSOR will endeavor to cause as little inconvenience to  LESSEE as practicable under the circumstances;

 

(f)                                   to make, impose, adopt, supplement, abolish or amend the Building Rules, Provided that, LESSOR shall give LESSEE at least fifteen (15) business days prior written notice before the effectivity of such act; and provided further that, such act shall not adversely affect the ability of LESSEE to perform its obligations herein and to operate its business in the Leased Premises.

 

(g)                                  to appoint, ratify or confirm a property manager to manage and administer the Building and the Common Areas and to delegate to such property manager the power to adopt and implement the Building Rules; and for this purpose, any notice, act, decision, forbearance or consent required to be given or done hereunder shall be fully and effectively done or given if expressed to, by or on behalf of such property manager; and

 

(h)                                 to undertake the improvement of the Building or the Common Areas or any development work in an adjoining lot or within the vicinity of the Building, in such a manner as to cause the least inconvenience to LESSEE, its  employees, guests, customers and clients; and for this purpose and as long as the latter condition is fulfilled. LESSEE shall not hold LESSOR liable for any resulting disturbance or discomfort arising out of such development work or improvement.

 

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For the purpose of Article 2.3 (d), LESSEE shall give LESSOR a list of LESSEE’s competitors on or prior to the execution of this Contract which list LESSEE may update from time to time by giving a revised list to LESSOR.  It is understood, however that nothing in this provision shall prohibit or restrict LESSOR from naming the Building after any of its affiliates or related companies.

 

Nothing in this provision exempts LESSOR from liability where it performs any of its acts herein with willful misconduct or gross negligence.

 

2.4                               CONTRACTOR’S ALL RISK INSURANCE  -  Should LESSEE decide to conduct construction or renovation works on the Leased Premises, LESSEE shall cause its contractor, prior to the commencement of any construction or renovation work, to obtain a Contractor’s All Risk (CAR) Insurance from a reputable insurance company accredited by LESSOR, in an amount acceptable to LESSOR, which shall cover the contract works, any lessor-supplied materials, the Leased Premises and properties surrounding the Leased Premises; liability to persons due to bodily injury and property damage in the course of construction or renovation arising out of or in connection with the fault or negligence of LESSEE, its contractors, suppliers or workers undertaking such construction or renovation or the failure of LESSEE to comply with LESSOR’s construction guidelines for the Building.

 

2.5                               CONSTRUCTION CASH BOND - Prior to the commencement of any construction or renovation work on the Leased Premises, LESSEE shall submit to LESSOR a construction cash bond, in an amount equivalent to one (1) month rent for every floor leased or PHILIPPINE PESOS: ONE MILLION FIVE HUNDRED EIGHTY TWO THOUSAND SEVEN HUNDRED NINETY PESOS (P 1,582,790.00) to answer and stand as security for the immediate repair or reconstruction of any damage caused to the property of LESSOR, injury to any person and/or damage to any property.  Any construction cash bond submitted pursuant to this Article net of any deductions (which deduction shall be subject to audit by LESSEE)  shall, without need of any demand, be returned to LESSEE after completion of such construction or renovation works and upon compliance by LESSEE with the relevant certification and documentary requirements under the construction guidelines for the Building.

 

2.6                               ALTERATIONS, ADDITIONS OR IMPROVEMENTS  - LESSEE shall not make any alteration, addition, or improvement within the Leased Premises or in any of the Common Areas or effect the installation of any fixtures required by the conduct of its business, without the prior written consent of LESSOR. All such alterations, additions, or improvements shall be carried out subject to such reasonable terms and conditions as may be imposed by LESSOR.  All authorized alterations, additions or improvements made by LESSEE shall be done in good workmanlike fashion and at LESSEE’s cost. LESSOR reserves the right to require LESSEE to use LESSOR’s building contractor for any renovation of the Leased Premises when, in LESSOR’s reasonable opinion, the proposed renovation may adversely affect any of the warranties or guarantees given by any contractors of the building.

 

All building architectural, engineering, conceptual plans and specifications for any alteration, addition or improvement shall be submitted to LESSOR for its approval at least Fourteen (14) days prior to the commencement of work on any such alteration, addition or improvement.  The approval by LESSOR of such alterations, additions or improvements shall in no event relieve LESSEE from the responsibility of obtaining all the necessary permits and licenses pertaining to such alterations, additions, improvements, or installations or from paying the necessary taxes, insurance premium or fees as shall be necessary or appropriate in connection therewith.  LESSEE shall give all the notices required and shall comply with all ordinances, rules and regulations issued by governmental agencies and public utility companies having jurisdiction over the same.  For purposes hereof, LESSEE shall submit to LESSOR the CAR Insurance and the construction cash bond required by Articles 2.4 and 2.5, respectively, prior to the commencement of any construction or renovation of the Leased Premises or the Common Areas for the purpose of effecting any alteration, addition, improvement or installation.

 

All such alterations, additions or fixed improvements made by LESSEE, as well as any alteration, improvement or installation placed in or on the Leased Premises by LESSOR, except movable furniture and fixtures placed in the Leased Premises at the expense of LESSEE and removable without defacing or injuring any ceiling floor, wall or any portion of the Building or the Leased Premises, shall become the property of LESSOR at the expiry or termination of this lease, and shall remain upon and be surrendered with the Leased Premises as part thereof without compensation for their value to LESSEE.  In the event that LESSEE fails to comply with the provisions of this Article, LESSOR shall be entitled to apply the total cost of damages incurred by reason of such violation against the amount of the Security Deposit, without prejudice to the right of LESSOR to recover any deficiency from LESSEE.

 

Should LESSOR decide that it does not want any or all of the alterations, additions or improvements, it shall so advise LESSEE, who hereby undertakes to remove the same from the Leased Premises within thirty (30) days from said advice, at LESSEE’s sole cost.

 

Notwithstanding anything to the contrary in this Contract, it is understood that LESSEE shall have no obligation to remove any of its permanent improvements or additions or fixed alterations from the Leased Premises at the expiration or termination of the Lease Term on the condition that they have been kept in good tenantable condition subject to reasonable wear and tear.

 

In the event LESSEE has made any removal of improvements, additions or alterations pursuant to this provision, any such removal shall be undertaken without defacing the Leased Premises and/or Building.  In the event that damage or injury is caused to the Leased Premises and/or Building as a result of such removal, LESSEE undertakes to immediately repair any such damage or injury caused to the Leased Premises and/or Building.

 

2.7                               LOAD LIMITATIONS  -  LESSEE shall not bring, install, place or suspend any load, apparatus, equipment, article or thing into or in the Leased Premises in excess or in violation of the maximum weight and permitted locations of certain equipment, apparatus, article or thing as determined by LESSOR for the floor of the Building where the Leased Premises are located.   The maximum load limitation shall be mutually agreed in writing between the Parties and shall be appended to this Contract.  For this purpose, LESSEE shall obtain the prior written approval of LESSOR for the entry into and/or removal from the Leased Premises, of any load or apparatus, equipment or article.  LESSEE shall also comply with the requirements imposed by LESSOR for keeping such equipment, load or apparatus within the Leased  Premises, including the use of supports of such dimension and material, to distribute the weight of such equipment, load or apparatus as LESSOR may deem necessary.  Likewise, the LESSOR shall not bring in any thing into or in the Leased Premises without the written approval from the LESSEE except in case of emergency when such load, apparatus, or thing is necessary to perform or conduct immediate repair or restoration of utilities or similar emergencies.

 

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Neither shall LESSEE install, without the prior written  approval  of  LESSOR,  any  air-conditioning  equipment  in the Leased Premises other than that provided or approved by  LESSOR , nor any other plant, equipment, apparatus or machinery which requires additional wiring, or which consumes electricity not metered through the electric meter from which LESSEE’s consumption of electricity is calculated.  LESSEE shall not permit, suffer or cause any act to be done whereby the maximum allowable voltage capacity of the Leased Premises shall be exceeded.

 

2.8                               DRILLING OR DEFACING.  LESSEE shall not make, permit or suffer any act, installation, alteration or addition to be made or done in or to the Common Areas, the Leased Premises or any part of the Building which may cause damage thereto including, without limitation, any cutting, maiming, marking, defacing or drilling into or of any part of the Building, Leased Premises or Common Areas.

 

2.9                               SIGNS AND ADVERTISING MEDIA  -  LESSEE shall not affix, inscribe or paint, or cause the affixing, inscribing or painting of, any notice, sign or other advertising media on any part of the Leased Premises or Building, except with prior written permission of the LESSOR and/or its Signage Committee (which permission shall not be unreasonably withheld, delayed nor conditioned), provided further, that no such permission from LESSOR will be required if the notice, sign or any other advertising media will be affixed, inscribed or painted, or otherwise put up by LESSEE in any of the inner portion of the Leased Premises (facing wall).  If so allowed by LESSOR, the sign or media shall be in the size and style as LESSOR may determine at its sole discretion. LESSEE shall have the right without need of any prior consent from LESSOR to affix its signage on the common directory of the Building.  Only the name and nomenclature of the LESSEE as set out in this Contract or as registered with the Philippine Securities and Exchange Commission shall be advertised in any directory of lessees which may be maintained at the ground floor of the Building.  LESSOR shall have the right to require LESSEE to remove any unauthorized signage or such sign which LESSOR may consider to be inappropriate.  LESSOR shall have the authority, without incurring any liability, to enter the Leased Premises and/or Building, remove any signs it may consider inappropriate in the exercise of reasonable judgment,  and charge to LESSEE the entire cost of such removal and/or restoration of the Leased Premises or Building to its original condition, provided such cost is reasonable and appropriately substantiated.

 

LESSEE, upon leasing at least three (3) whole floors in the Building shall have the right to affix its signage on the external façade of the Building on the condition that the design specifications, materials used, size, location and manner of installation shall adhere to the guidelines and be subject to the prior approval of the Signage Committee of LESSOR, which approval shall not be unreasonably withheld, conditioned nor delayed.

 

2.10                        SHADES, AWNINGS, BLINDS  - LESSEE shall not hang or fix any shades, awnings, blinds or window guards of any description, shelters or coverings, wire or aerial wiring, supports, iron brackets or any other thing on any part of the Building, including the roof or exterior wall of the Leased Premises, without the prior written consent of LESSOR.  If so allowed by LESSOR, any shades, awnings, blinds or window guards shall be of such size and style as may be approved by LESSOR.

 

2.11                        PARKING.  LESSEE shall have a right to parking spaces as set out in Annex “A”.

 

ARTICLE 3  -  USE AND OCCUPANCY OF THE LEASED PREMISES

 

3.1                               AUTHORIZED USE  -  The Leased Premises shall be used exclusively for the purpose and in the manner stated in Annex “A”.  LESSEE shall not divert the Leased Premises to other uses, without the prior written consent of  LESSOR, it being expressly agreed that if, at any time during the Lease Term and without the previous written consent of LESSOR, any part of the Leased Premises is used for purposes other than what has been agreed upon, LESSOR shall have the right to (a) automatically cancel this Contract in accordance with Article 11 hereof;  (b)  increase the rent;  or (c) compel LESSEE to stop any unauthorized activity conducted in the Leased Premises.

 

It is understood, however, that LESSEE shall have no obligation to continually operate its business at the Leased Premises, provided that it continues to pay the rentals and other dues arising from this Contract.

 

3.2                               PROHIBITED ACTIVITIES - Without limiting the generality of the foregoing, LESSEE shall not use or permit the Leased Premises or Common Areas to be used as sleeping quarters or for domestic purposes.  However, LESSEE shall have the right to devote a reasonable portion of the Leased Premises as a rest or lounge area or temporary suite.   LESSEE shall not allow the Leased Premises or the Common Areas to be used for drying or hanging laundry or for loitering or eating (except that LESSEE may maintain a pantry within the Leased Premises for the use of its employees and guests).  LESSEE shall not allow the Leased Premises be used as an eatery or as a place where food or beverages of any kind are served by way of business; for the avoidance of doubt, this does not include food or beverage  brought by LESSEE’s employees or guests  for their own consumption.

 

Neither shall the Leased Premises or Common Areas be used for canvassing, peddling, touting or soliciting of business except the LESSEE’s or its customer’s business or for distributing any booklet, pamphlet and advertising material not related to the purpose stated in Annex “A”  or for any illegal or immoral purpose, or in any manner which may provide basis for the imposition of a fine, forfeiture or penalty against LESSOR under any applicable law provided however, that LESSEE shall have the right to conduct business solicitation within the Leased Premises or with LESSEE’s employees, customers and guests so long as such activities are similar or related to the business of LESSEE.    The Leased Premises shall not be used for the manufacture or storage of goods, articles or things or for the storage of dangerous goods or other explosive or hazardous substances.  No auction, fire, bankruptcy, close-down or similar sales of a retail business or any unethical type of business operation shall be conducted in the Leased Premises.

 

3.3                               NUISANCES  -  LESSEE shall not permit or suffer to be permitted any music or noise to emanate from the Leased Premises which in the reasonable opinion of LESSOR may constitute a nuisance or annoyance or give cause for  reasonable complaint from LESSOR or other lessees.   Neither shall it permit any odor or noxious smell, which in the sole opinion of LESSOR is offensive or unusual to emanate from the Leased Premises, nor keep or suffer to be kept any animals or pets inside the Leased Premises.   In the event that LESSEE violates any of the prohibitions herein stated, it shall be liable for any and all damages which may be caused LESSOR, other tenants and occupants of the Building, including their employees, agents, representatives, and guests, in addition to LESSOR’s right to cancel this Contract in accordance with Article 11 if the violation persists despite lapse of Fifteen (15) days from written notice thereof from LESSOR.

 

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3.4                               INCREASE IN INSURABLE RISK  -  LESSEE shall not use the Leased Premises, the Building or any part thereof in any manner which will cause insurance policies of the Leased Premises or the Building against loss or damage caused by fire, storm, typhoon, or other insurable perils and/or loss or claims by  third  parties  to  be  rendered  void  and voidable, or whereby the premium due thereon may be increased.   Thus, LESSEE shall not bring into, store or install within the Leased Premises anything of highly flammable nature, explosive materials or any apparatus, machinery or equipment which may expose the Leased Premises to fire (except those which are necessary in the conduct of LESSEE’s business or otherwise allowed herein).   If, as a result of any act, deed, matter or thing done or permitted by LESSEE, the premium on any such insurance policy is increased, LESSOR shall be entitled, without prejudice to any other remedy provided hereunder, to recover from LESSEE the amount of such increase in premium and to be indemnified by LESSEE against all claims, losses, damages or claims sustained or made against LESSOR by any person as a result of a breach of this Article.

 

3.5.                            CONDUCT OF BUSINESS.  - LESSEE shall at all times, during the term of this lease, conduct its business in accordance, and shall at all times comply, with law and regulations, both national and local, and shall conduct such business in a reputable manner and in accordance with the business and operating standards of LESSOR.  LESSEE shall on its own, and without any aid or assistance by LESSOR, obtain all permits and licenses as may be required by national or local government authorities in connection with its business and the use and occupancy of the Leased Premises, and the copies thereof and thereafter copies of renewal shall, without necessity of demand, be furnished to LESSOR not later than fifteen (15) calendar days from the start of LESSEE’s business and every renewal date required by law, ordinance or regulation. LESSEE shall likewise comply with all tax rules and regulations. It is understood that LESSEE shall be solely responsible for the operation of its business in the Leased Premises during the entire term of this lease. Such operation shall be undertaken with utmost due diligence and care, and employing best business practices to ensure maximum efficiency. LESSEE shall hold free and harmless the LESSOR, its affiliates and subsidiaries, successors-in-interests and assigns, stockholders, directors, officers, employees and agents (the “LESSOR Related Parties”) from, and shall indemnify them against, any and all actions, sums of money, liabilities, damages, demands, claims, losses or expenses, including assessments, penalties, fees, costs, taxes, levy, and other charges by the appropriate government agencies or any third person, which the LESSOR and LESSOR Related Parties, incur, sustain, are subjected to, or required to pay, arising from or in connection with the LESSEE’s use and occupancy of the Leased Premises as well as in the LESSEE’s conduct of its business.

 

3.6                               PREPARATION OF FOOD.  - LESSEE shall not allow the preparation of food in the Leased Premises.  LESSEE shall not use any electric or gas burner or any appliance of similar nature within the Leased Premises.  However, LESSEE may be allowed to use the following appliances in the Leased Premises, i.e. microwave ovens, refrigerators, water dispenser  and coffee makers. Boiling of water for tea or coffee other than by way of an electric or gas burner shall be allowed.

 

3.7                               FIREARMS  -  LESSEE shall not permit anyone to bear firearms within the Leased Premises or the Building.  LESSEE’s employees, personnel and visitors must deposit their firearms with the security personnel of LESSOR upon entering the Building.

 

3.8                               BULK DELIVERY   - LESSEE shall not deliver or instruct or take the delivery of furniture, equipment or other bulky items during office hours.  LESSEE may take out of the Building any bulky furniture, office machine, or similar types of office equipment and accessories in accordance with the Building Rules; provided, that LESSEE shall issue prior written notice thereof to LESSOR.

 

3.9                               COMPANY I.D.  -  LESSEE and LESSOR shall issue company identification cards and the same shall be worn at all times by its employees/personnel while they are within the Building.

 

3.10                        MAINTENANCE OF LEASED PREMISES  -  LESSEE shall well and sufficiently preserve, repair and maintain in good, clean tenantable condition, at its own cost, the interiors of the Leased Premises, including the flooring, interior plaster or other finishes, doors, windows, cables, conduits, wirings, sockets, electrical installations, and plumbing fixtures found in or about the Leased Premises.   The Leased Premises and all additions and installations supplied by LESSOR shall be kept in good clean working condition and repair.  LESSEE shall keep drains, pipes, sanitary or plumbing apparatus used exclusively by LESSEE, its employees, guests, clients or customers in good clean and tenantable repair condition, in accordance with the requirements imposed by the Building Rules and applicable regulations of governmental authorities.  LESSEE shall pay LESSOR the costs in cleaning, repairing or replacing any of the same when found to be blocked or stopped.  LESSEE shall take all such steps and precautions at its own cost to prevent the Leased Premises from becoming infested with termites, rats, mice, cockroaches or other pests or vermin. Should LESSEE fail to maintain the Leased Premises properly such that the same is infested with pests, LESSOR may employ pest control services on the Leased Premises and charge the cost thereof to LESSEE.

 

LESSEE shall permit LESSOR or the authorized representatives of public utility companies, at reasonable times, after due prior written notice to LESSEE, to enter the Leased Premises for the purpose of undertaking the repair and maintenance of utilities, facilities and other structural elements used or shared in common by LESSEE with the other lessees of the Building, inspecting the condition of the Leased Premises or for determining the LESSEE’s compliance with this Contract.   LESSOR shall be entitled without incurring any liability whatsoever, in the event of an emergency, to enter the Leased Premises to undertake the necessary repairs or conduct the inspection thereof for the protection of the Leased Premises and/or the Building.

 

The foregoing notwithstanding, and without prejudice to other provisions of this Contract, the following repairs and/or replacements shall be LESSOR’s responsibility and shall be for its account: (a) structural repairs on the Leased Premises and the Building; (b) repairs on the Common Areas; (c) repairs on all installations made or introduced by LESSOR; (d) repairs on account of damages due to fault or omission of LESSOR; (e) other repairs necessary to keep the Leased Premises in tenantable condition and adequate for the use for which it is intended where the damage is incurred due to the act or omission of the LESSOR.  LESSOR agrees to indemnify on a non-pass through basis and hold LESSEE  free and harmless from and against any costs, damages or liabilities which may arise as a result of LESSOR’s failure to comply with the foregoing obligations.

 

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3.11                        QUIET AND PEACEFUL ENJOYMENT — Subject to LESSEE’s compliance with its obligations in this Contract, during the Lease Term, LESSEE’s possession of the Leased Premises shall not be disturbed, this Lease shall remain in full force and effect without any modification whatsoever, and LESSEE shall be guaranteed quiet and peaceful enjoyment of the leased Premises by LESSOR.  LESSOR and its employees and agents shall at all times in a manner which is in line with the faithful compliance of the provisions of this Contract.

 

ARTICLE 4  -  RENT AND OTHER CHARGES

 

4.1                               RENT  -  The commencement of the obligation of LESSEE to pay rent, the amount of rent due from LESSEE and the manner of payment of rent shall be governed by the provisions of Annex “A”.   The rent due from LESSEE shall be subject to automatic annual escalation at the rate specified in Annex “A”.

 

Whenever the due date for payment of any amount due under this Contract falls on a Saturday, Sunday or holiday, such payment must be made on the first working day after such due date.

 

It is an essential consideration of this Contract that all matters pertaining to rent and rental payments by LESSEE to LESSOR shall be held in the strictest confidence.  LESSEE explicitly agrees that it shall not include in its invoices to customers any mention of the rent payable by LESSEE to LESSOR.

 

4.2                               SECURITY DEPOSIT  - Upon execution of this Contract, LESSEE shall provide LESSOR with a Security Deposit in cash in an amount specified in Annex “A”, to answer and stand as security for the proper and due performance of all of LESSEE’s obligations under this Contract.  The existence of such Security Deposit, however, does not and shall not excuse LESSEE’s non-payment of rent or of any other sum required to be paid hereunder on the due date specified therefor.

 

The Security Deposit shall be increased correspondingly as and when the rent is automatically increased annually.    The additional Security Deposit shall be remitted to LESSOR thirty (30) days before the onset of a new year under the Lease Term.

 

The Security Deposit or any balance thereof shall be returned to LESSEE, without interest, within sixty (60) days after the expiration of the term of this lease, and after LESSEE shall have completely and satisfactorily vacated and delivered the Leased Premises to LESSOR, less whatever amounts LESSEE may owe LESSOR or which LESSOR may apply against the Security Deposit as authorized hereunder.  LESSOR shall, notwithstanding the delivery of the Leased Premises to LESSOR by LESSEE, have the right to withhold all or any part of the Security Deposit until LESSOR shall have received statements of account from utility companies supplying telephone, water, electric power or public utility services to the Leased Premises, covering the period ending on the date LESSEE shall have completely vacated and delivered the Leased Premises to LESSOR.  The amount withheld shall answer for the payment of any unpaid utility and service bills.  Any remaining amount shall be returned to LESSEE without interest.  Likewise, should LESSEE have any other obligation which remains due and unpaid under any other contract with LESSOR, LESSOR shall have the right to automatically apply the amount of these unpaid obligations against the Security Deposit in settlement thereof, upon the termination of the lease.

 

The Security Deposit shall, however, be forfeited in favor of LESSOR upon the occurrence of any of the following events:  (i) LESSEE fails to occupy the Leased Premises for the full term of the lease or any extension or renewal thereof, where such failure is not due to the act or omission of the LESSOR, or (ii) this Contract is terminated by LESSEE for whatever reason prior to the expiry date of its term, other than those reasons indicated in Articles 10.2, 10.3, and 12.1 and other than where the termination is due to the act or omission of the LESSOR;  or (iii) upon the occurrence of any event of default or termination as provided in Article 11.1.  Upon the occurrence of any of these events, the Security Deposit (or the balance thereof which should otherwise have been returned to LESSEE had such termination not have occurred) shall be forfeited in favor of LESSOR, in addition to whatever damages that may be due by virtue of the termination of this Contract.  In the event, however, that this lease is terminated at the instance of LESSOR without any fault or negligence of LESSEE but with its conformity or at the instance of LESSEE pursuant to Articles 10.2, 10.3, and 12.1, the Security Deposit or any balance thereof shall be returned to LESSEE, net of the amounts authorized to be deducted therefrom under this Article.  If the Security Deposit is not refunded to LESSEE or its return to LESSEE is otherwise delayed on the 60th day after the expiry of this lease or otherwise when such Security Deposit is due for return to LESSEE under this Contract, LESSOR shall be liable to pay two percent (2%) interest per month of delay, on the amount of Security Deposit outstanding from the date it becomes due for payment.  This right of LESSEE shall be in addition to whatever is provided under the law and in this Contract.

 

4.3                               ADVANCE RENTAL — Upon execution of this Contract, LESSEE shall pay to LESSOR Advance Rental in an amount specified in Annex “A”, which amount shall be applied against rent in the manner specified in Annex “A”.

 

4.4                               TAXES  -  LESSOR shall be responsible for the payment of the real property taxes due on the Leased Premises, the Building and the land on which such is located, at current rates and shall ensure that said real property taxes are properly paid.

 

Other than LESSOR’s income taxes or taxes required to be withheld from the rentals due to LESSOR but creditable against LESSOR’s income taxes, all taxes accruing by reason of the receipt of rentals by LESSOR or execution of this Contract, including but not limited to the Value-Added Tax and documentary stamp tax, shall be for the account of LESSEE.

 

Upon receipt of demand from LESSOR, LESSEE agrees to present to LESSOR a copy of the certificate issued by the Philippine Economic Zone Authority (“PEZA”) on the entitlement of sales to PEZA-registered entities (like LESSEE) to valued added tax zero-rating.

 

4.5                               INTEREST AND PENALTY -  Without prejudice to the exercise by LESSOR of its rights under the penal provisions herein, LESSEE shall pay to LESSOR interest on any amount due under this Contract which remains unpaid on due date thereof at the rate of TWO PERCENT (2%) per month, or at the maximum prevailing interest rate allowed by  law as determined by LESSOR at the time the obligation is due, whichever is higher, to be computed from the date of delinquency until such amount is paid in full.  The interest and penalty rates shall be subject to review and adjustment by LESSOR yearly on 31 January at a rate to be mutually agreed by the parties.

 

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The preceding interest and penalty charges shall apply to any and all arrearages in the amounts payable by LESSEE, including but not limited to rentals, LESSEE’s share in Common Area Charges, and reimbursement of appropriate real property taxes as may be applicable.

 

In case of cancellation or termination of this Contract due to default or breach of its terms by LESSEE, LESSEE shall pay all attorney’s fees, costs and expenses of litigation that may be ordered by the courts.

 

4.6                               APPLICATION OF PAYMENTS - Any payment received by LESSOR shall be applied against the statement of account or billing with the earliest date.  In the event that the payment of interest, penalty, rent or other charges is covered by one statement of account, then the payment received by LESSOR shall be applied in the payment of obligations stated therein in the following order of priority:  , (i) first  against the interest due, and (ii) finally, against unpaid rent, Advance Rental, Security Deposit, Common Area Charges or utility charges.  Should the payment received be insufficient to completely settle any outstanding obligation, whether covered in one statement of account or billing, or otherwise, subsequent payments to be made by LESSEE shall be applied to the payment of such unpaid amount.

 

4.7                               EXTRAORDINARY INFLATION OR DEVALUATION  -  (a) In case extraordinary inflation should supervene during the effectivity of this Contract, the value of the currency at the time of the execution of this Contract shall be the basis of payment of rentals due under this Contract.    For purposes of this Contract, it is agreed that “extraordinary inflation” shall occur when the average inflation rate for the last six (6) months (the “Average Inflation Rate”) reaches twenty five (25%) as reflected in the NEDA official report.  In such event, the rentals shall be adjusted monthly using as bases the Average Inflation Rate and the value of the currency at the time of the execution of this Contract.

 

(b)  On the other hand, in case extraordinary depreciation or devaluation of the currency should supervene during the effectivity of this Contract, the value of the currency at the time of the execution of this Contract shall likewise be the basis of payment of rentals due under this Contract.  For purposes of this Contract, it is agreed that “extraordinary depreciation or devaluation” shall mean the diminution to the extent of twenty five percent (25%) of the exchange rate of the Philippine currency vis-à-vis the US Dollar based on the average peso-dollar exchange rate for the last six (6) months as reflected in the records of the Bangko Sentral ng Pilipinas vis-à-vis the prevailing exchange rate as of close of trading hours on the date of execution of this Contract.   In such event, the rentals shall be adjusted monthly using as bases the value of the currency and exchange rate at the time of the execution of this Contract.

 

ARTICLE 5  -  COMMON AREAS

 

5.1                               USE OF COMMON AREAS  -  During the term of this lease, LESSEE and its respective employees, agents, customers and guests shall have the non-exclusive right to use the Common Areas, in common with other lessees of the Building, as far as the same are necessary for the use or enjoyment of the Leased Premises, subject to any rights, powers and privileges reserved to LESSOR as provided hereunder and to the right of LESSOR to regulate and restrict such use in accordance with the Building Rules.

 

5.2                               OPERATION OF COMMON AREAS  -  During the term of this lease, LESSOR shall operate, manage, and maintain the Common Areas in a first class manner.  Subject to this standard, the actual manner in which the Common Areas shall be maintained, operated and managed, and the amounts to be spent for such maintenance, operation and management shall be determined at the sole and reasonable discretion of LESSOR.   The use of the Common Areas shall be subject to such reasonable regulations and charges which may be imposed from time to time by LESSOR provided that such regulations and charges and otherwise the maintenance of the Common Areas shall not adversely affect the ability of LESSEE to perform its obligations herein meet the requirements of its clients and any business solicitation with prospective clients and otherwise to operate its business in the Leased Premises.  LESSOR shall have the right to close, if necessary, all or any portion of such areas, to such extent as may be legally sufficient in the opinion of LESSOR’s counsel, to prevent the accrual of rights of any person or of the public therein, or to close temporarily all or any portion of such areas for whatever legitimate reason provided that such shall not adversely affect the ability of LESSEE to perform its obligations herein and to operate its business in the Leased Premises.

 

5.3                               COMMON AREA CHARGES   -  Commencing upon the effectivity of this lease and in addition to the payment of rental and other amounts due hereunder, LESSEE shall pay to LESSOR, on the due date specified in the applicable statement of account, Common Area Charges in such amount as may from time to time be determined by LESSOR.

 

The rate of Common Area Charges shall be correspondingly increased in the event that the cost of managing, operating and maintaining the Common Areas increases. The increase in Common Area Charges shall be effective and demandable on or during the month in which the increase in the utility and service charges being supplied to the Common Areas shall have been implemented by the relevant utility company or service agency with a prior written notice of not less than five (5) weeks to LESSEE.

 

ARTICLE 6 -  PUBLIC UTILITIES AND SERVICES

 

6.1                               UTILITY CHARGES  -  All deposits, fees, costs or other charges to be incurred for supplying the Leased Premises with public services or utilities shall be borne by LESSEE and shall be based on the actual consumption or use thereof by the Leased Premises.  To the extent applicable, LESSOR may require LESSEE to make payment of such deposits, fees, costs or other charges directly to the company supplying such utilities or services to the Leased Premises or Building.  Reimbursement for or payment of deposits, fees, costs or other charges for the use or consumption of utilities for the Leased Premises which are not paid directly to the utility companies during any given month will be payable to LESSOR on the due date specified in the applicable statement of account  if such are demanded from LESSOR by the appropriate authorities.

 

6.2                               DISCONNECTION OF UTILITIES  -  In the event that LESSEE fails to pay for the charges or fees incurred in connection with the supply to, consumption and use of public utilities and services in the Leased Premises and/or the Common Areas for an aggregate period of one (1) month and such charges or fees are not being disputed on valid  grounds by the LESSEE, LESSOR shall have the right to disconnect or discontinue the supply thereof upon prior written notice to LESSEE, for as long as any such charges or fees remain unpaid charges if the same has been confirmed by the service provider subject to prior notice to LESSEE of such confirmation.  No disconnection  shall be made by LESSOR pending such confirmation provided that LESSEE shall have made a payment for the charges or fee in an amount equivalent to the average of its billing statements for three (3) months prior to the disputed billing.  LESSEE shall immediately settle any remaining balance without any more question upon receipt of the service provider’s adjusted billing statement or confirmation billing.  LESSOR shall fully cooperate and assist LESSEE in resolving any dispute.

 

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This right of disconnection  shall be in addition to LESSOR’s other rights provided for in Article 11.2.

 

6.3                               NO RESPONSIBILITY  -  LESSOR assumes no responsibility for the inadequacy, quality or interruption in the utilities or services consumed or supplied in or to the Leased Premises, unless the same be due to LESSOR’s inexcusable fault or gross negligence.  LESSOR shall, in any event, exert every effort and diligence to improve the quality of such utilities or services or restore the same promptly to their proper functions and conditions.  Notwithstanding this provision, LESSOR warrants twenty four (24) hours a day/ seven days a week supply of all utilities in the Building.

 

6.4                               LESSEE, may at its option, install and maintain its own airconditioning system and generator system for the Leased Premises at its own cost subject to the approval of building administrator.

 

6.5                               LESSOR shall provide entrance cables to the nearest main distribution frame/intermediate distribution frame to meet LESSEE’s telecommunication requirements which LESSEE has made known to LESSOR before signing this Contract.  However, it shall be LESSEE’s responsibility to arrange with the appropriate telecommunications company for the installation of LESSEE’s telephone/telecommunication requirements.  LESSEE shall bear the cost of installing such telephone/telecommunications facilities and other materials used in connecting the same to the telephone/telecommunication lines of LESSOR.  LESSOR shall provide all such assistance as may be required by LESSEE in respect of such installations.

 

ARTICLE 7  -  LESSEE’S ADDITIONAL COVENANTS

 

LESSEE agrees that, in addition to its other undertakings under this Contract, and unless it has obtained the prior written consent of LESSOR for the performance of an act or deed which is otherwise prohibited under this Contract, it will abide by the following:

 

7.1                               SUBLEASE AND TRANSFER OF RIGHTS  -  It is expressly understood and agreed that the personal character of LESSEE and the nature of occupancy of the Leased Premises are special considerations for LESSOR’s grant of this lease to LESSEE.  Accordingly, LESSEE shall not assign or transfer its rights under this Contract, nor sub-lease all or any part of the Leased Premises or enter into any arrangement whereby the use or possession of any part of the Leased Premises is transferred to any person unless approved in writing by LESSOR.  By way of exception, LESSEE shall have the right to assign or transfer its rights under this Contract, or assign or sublease all or any part of the Leased Premises or any of its allocated parking slots or enter into any arrangement whereby the use or possession of any part of the Leased Premises or any of its allocated parking slots is transferred with notice to but without need of approval of LESSOR to (a) any surviving entity resulting from a merger or consolidation or any reorganization of the LESSEE or its parent company, or (b) any Affiliate or Affiliates of the LESSEE provided the LESSEE and the transferee shall have the same nature of business.  For the purpose of this provision, “Affiliate” means any person that directly or indirectly through one or more intermediaries.  “Control” shall mean possession, directly or indirectly or as a trustee or executor of the power to direct or cause the direction of the affairs or management of a person, whether through the ownership of voting securities or as trustee or executor, by contract or otherwise; provided that in any event: (i) the direct or indirect ownership of more than 50% of the outstanding capital stock or equity interest, or (ii) having ordinary voting power to elect more than 50% of the board of directors or other governing body of a corporation or any person, will be deemed control of such corporation or person.

 

In the event of a transfer, assignment or sub-lease arrangement covered by any of the instances enumerated in the preceeding paragraph or assignment or transfer to a subsidiary or an affiliate or any entity resulting from any reorganization of the LESSEE or its parent company, the LESSEE, if it is the surviving entity, shall still be primarily and wholly liable to LESSOR in connection with the payment of rent and fulfillment of all its obligations and covenants as stipulated in this Contract and shall give a Thirty (30) days prior notice to the LESSOR of such change. If LESSEE is not the surviving entity, the new or surviving entity shall, within Thirty (30) days of such change, notify LESSOR providing the latter copies of its SEC registration and company profile.

 

The LESSEE shall have the right to assign or sub-lease the entire part of the Leased Premises and/or any of its allocated parking slots, to any reputable company with the prior written consent of the LESSOR which consent shall not be unreasonably withheld, conditioned or delayed.  LESSEE shall submit to the LESSOR at least three (3) months prior to effectivity of the assignment or sublease a written request for approval of the proposed assignment or sublease together with the company profile of the proposed assignee or sub-lessee.

 

No right, title or interest to, in and under this Contract or the Leased Premises or any of its allocated parking slots shall be deemed conferred or vested in any person other than LESSEE and its permitted assignee/successor.

 

It is expressly understood that LESSEE has no goodwill or patronage rights over the Leased Premises and that such rights belong exclusively to LESSOR.  LESSEE shall not sell or dispose of said goodwill or patronage rights to any third person or entity.

 

7.2                               MORTGAGE  -  LESSEE shall not mortgage, encumber or create any security interest in and to the leasehold rights granted hereunder to LESSEE.

 

7.3                               INSPECTION PRIOR TO EXPIRY OF LEASE  -  During the last three (3) calendar months immediately preceding the expiration of the Lease Term, LESSEE shall allow, during business hours and upon prior written notice, LESSOR’s authorized representatives and prospective tenants to inspect the Leased Premises. Any such activity shall be effected in a manner as to cause the least inconvenience to LESSEE, its employees, guests, customers and clients.  During such period, LESSOR may exhibit, where it shall think fit, a notice offering the Leased Premises for lease, which LESSEE shall not conceal in any way.

 

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Prior to the last three (3) calendar months immediately preceding the expiration of the Lease Term.  LESSOR and LESSEE shall conduct a joint inspection of the Leased Premises and agree on the repairs to be made by LESSEE thereon (which exclude those arising from reasonable wear and tear and damages arising from Force Majeure).  LESSEE shall make the agreed repairs prior to the expiry of this Contract.  Prior to the last fifteen (15) days immediately preceding the expiration of the Lease Term, LESSOR and LESSEE shall again conduct a joint inspection of the Leased Premises and agree on the repairs to be made by LESSEE (which exclude those arising from reasonable wear and tear and damages arising from Force Majeure).  LESSEE shall make the agreed repairs prior to expiry of this Contract.  At the date of expiry of this Contract, LESSEE shall be responsible only for those repairs which arise from the act or omission of LESSEE during the joint inspection made by the parties.

 

7.4                               RETURN OF LEASED PREMISES  -  LESSEE agrees to return and surrender the Leased Premises at the expiration of the Lease Term or at the termination of this lease in the same condition as it was found at the commencement of this lease, reasonable wear and tear and damage directly attributable to Force Majeure excepted, without any delay whatsoever,  devoid  of  all  occupants,  furniture,  articles  and  effects  of  any  kind,  other than the alterations, additions or improvements which LESSOR may decide to keep in accordance with Article 2.6.  This clause shall be subject to the return of Security Deposit if the termination of this Contract is due to the fault or omission of LESSOR.

 

LESSEE shall repair any damage caused to the Leased Premises which cannot be accounted for by reasonable wear and tear or Force Majeure, and restore the Leased Premises to the condition it was found at the commencement of this lease to the satisfaction of LESSOR.  All keys giving access to all parts of the Leased Premises and/or the Common Areas shall be returned to LESSOR, and all expenses incurred in removing from the Leased Premises or Building, LESSEE’s names, posters, signboards, décor or advertising media, including any damage caused by such removal, shall be for the account of LESSEE.

 

7. 5                            DAMAGES FOR HOLD-OVER  - If LESSEE fails to return the Leased Premises to LESSOR at the end of the Lease Term or at the termination of this lease, LESSEE shall pay LESSOR, as damages, a sum equal to thrice the rental payable by LESSEE to LESSOR for the period during which LESSEE shall retain possession of the Leased Premises.  The exercise by LESSOR of its rights under this Article shall not be interpreted as a grant of permission to LESSEE to continue in possession of the Leased Premises beyond the Lease Term.   LESSEE shall also be responsible to LESSOR for all damages which the latter may directly suffer by reason of its failure to return the Leased Premises and will indemnify LESSOR against any and all claims made by any succeeding lessee, resulting from the delay in delivering possession of the Leased Premises to such succeeding lessee, to the extent that such delay is occasioned by the failure of LESSEE to surrender the Leased Premises on time.  LESSOR shall also be entitled to exercise the remedies specified in Article 11 hereof as well as all remedies to which it is entitled under the law.  The rights of LESSOR herein are subject to Article 7.4.

 

ARTICLE 8  -  REPRESENTATIONS AND WARRANTIES

 

8.1                               MUTUAL WARRANTIES - LESSOR and LESSEE represent and warrant in favor of each other that:

 

(a)                                 each has full power, authority and legal right to execute, deliver and perform this Contract and has taken all the necessary corporate action to authorize the foregoing;

 

(b)                                 this Contract constitutes the legal, valid and binding obligation of LESSOR or LESSEE, enforceable in accordance with its terms; and

 

(c)                                  the execution, delivery and performance of this Contract do not and will not violate any provision of, or result in a breach of or constitute a default under any law, regulation or judgment, or violate any agreement binding upon either of them or any of their property.

 

8.2                               The LESSOR represents, warrants and covenants in favor of the LESSEE that:

 

(a)                                 it is the absolute, registered and legal owner of the Leased Premises and the Building, and has full right, title and interest to grant the lease of the Leased Premises to the LESSEE in accordance with the terms of this Contract;

 

(b)                                 the Leased Premises is located on a parcel of land which has been zoned for commercial use and the use of the Leased Premises for commercial purposes as set out in Annex “A” is expressly allowed under the applicable zoning regulations and otherwise under all applicable laws and regulations;

 

(c)                                  it shall maintain the LESSEE in peaceful and uninterrupted possession of the Leased Premises for the entire term of this Contract;

 

(d)                                 it shall maintain and hereby guarantees 24/7 supply of utilities in the Building;

 

(e)                                  the land where the Building is located, the Building and the Leased Premises are free and clear of any mortgages,  liens and encumbrances;

 

(f)                                   the land where the building is located, the Building and the Leased Premises are not subject to any pending, or to the best knowledge of the LESSOR, threatened, suit questioning the validity of LESSOR’s title thereto or otherwise affecting the contemplate lease herein;

 

(g)                                  all taxes and assessments on the land where the Building is located, the Building and the Leased Premises due as of the date of this Contract and the handover of the Leased Premises to LESSEE have been paid;

 

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(h)                                 the structural elements of the Building (including but not limited to the building systems, exterior, walls, roof, corridors, load-bearing walls and foundation) are and shall be throughout this Contract in good working condition and repair;

 

(i)                                     the Leased Premises, the Building and the parcel of land where it is located are and shall always be free from hazardous materials and are and shall always be in compliance with environmental laws.

 

(j)                                    it has and shall continue to comply with all laws relating to the Building and the Leased Premises and shall maintain the Building and the Leased Premises in operational capacity free from any lien or encumbrances to ensure the LESSEE’s use is not hindered at any time during the Lease Term pursuant to this Contract;

 

(k)                                 the Building has been duly proclaimed as a PEZA IT Building in accordance with law and regulations, and will maintain this status during the Lease Term (and any renewal);

 

(l)                                     Empire East Land Holdings Inc. is the absolute, registered and legal owner of the land where the building is located and has granted to and authorized the LESSOR full right, title and interest to construct and develop the Building and enter this Contract of lease covering the Lease Premises and to collect rentals and other amounts due under this Contract of Lease;

 

(m)                             Empire East Land Holdings, Inc. has allowed the lease of the leased premises between the LESSOR and LESSEE under the terms and conditions contained herein;

 

(n)                                 The LESSOR shall strictly comply with the authority granted to it by Empire East land Holdings Inc and will not do any act or omission that will cause it to be in breach or in default of such authority.

 

ARTICLE 9  -  INDEMNITIES

 

9.1                               LIMITATIONS ON LIABILITY OF LESSOR  -  Save by its gross negligence or willful misconduct, LESSOR shall not be liable or responsible in any circumstance, whether tortuous or otherwise, for any damage or disturbance suffered, whether directly or indirectly, by LESSEE, whether personally or in respect of the Leased Premises or any contents therein, or by any of its employees, clients, customers or any other persons whomsoever.  Without limiting the generality of the foregoing, LESSOR shall not be liable for:

 

(a)                                 any loss, damage or injury sustained by LESSEE or any such other person or any of their properties, caused by or through any accident, happening or in any way owing to:

 

(i)                                     any failure, poor quality, inadequacy, fluctuation, interruption, malfunction, explosion or suspension of the electricity, water, telephone, telex, facsimile, emergency power or other public utility services supplied to or intended for the Leased Premises or the Building;

 

(ii)                                  any seepage, overflow or leakage of water from any pipe, drain or automatic sprinkler system or any part within the Building or the influx of rain water into the Leased Premises or the Building;

 

(iii)                               any activity of rats, pests or vermin in the Building;

 

(iv)                              any failure or breakage of glass in the Leased Premises or in the Building;

 

(v)                                 any defect, mechanical breakdown, failure or need for repair, overhaul or any negligent or improper working or operation by any person whomsoever, of the facilities provided for the common use of the lessees of the Building or for LESSEE in respect of the Leased Premises;

 

(vi)                              Force Majeure, subject to the provisions of Article 10 hereunder;

 

(vii)                           any escape of fumes, smoke, fire or other substances from anywhere within the Building;

 

(viii)                        any escape of electric current from electric wiring or cable situated upon or in any way connected with the Building or any part thereof, or any vibration from or of any part of the Building or adjoining or neighboring premises

 

(ix)                              any act, neglect or default of LESSEE or other lessees of the Building or of adjoining neighboring premises, or any of their respective employees, clients, guests or customers;

 

(x)                                 any defective or damaged condition of the Leased Premises or Building unless the same was brought to the attention of LESSOR by LESSEE, and LESSOR failed to correct the damage or defect; or

 

(xi)                              any violation by LESSEE or its officers, employees, representatives or guests, of the Building Rules or the regulations of any government agency in connection with the possession and maintenance of the Leased Premises by LESSEE and the conduct of business operations therein;

 

(xii)                           any damage resulting from LESSEE’s inability to conduct its business because of a labor dispute, strike, or lockout of other lessees or LESSOR.

 

(b)         the security or safekeeping of the Leased Premises or any person or property found therein, including without limitation all furniture, fixtures, goods, chattels, samples, personal effects, contents or any article delivered to or left in the Leased Premises.

 

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9.2                               INDEMNIFICATION  - LESSEE shall indemnify and keep LESSOR fully indemnified against all claims, actions, demands, actions and proceedings made against  LESSOR by any person arising as a result of or in connection with the use and occupancy by LESSEE of the Leased  Premises  and  against all costs and expenses incurred by LESSOR in respect of such claims, actions or demands except to the extent that such claims, actions or demands are directly attributable to LESSOR, its officers, employees, agents, representatives or guests, or a breach by LESSOR of any of its warranties or representations under this Contract.  LESSEE shall indemnify LESSOR  as applicable, for any loss or damage which may be done to the Leased Premises or any part thereof or to Common Areas or to any part of the Building, due to the fault or negligence of LESSEE, its employees, agents, customers, clients or guests.

 

9.3                               NON-ABATEMENT OF OBLIGATIONS  -  In no event shall the payment of any amount due hereunder whether as rent, Security Deposit, Common Area Charges or utility charges abate or cease to be payable on account of the occurrence of any of the causes specified in Article 9.1, except to the extent permitted by Article 10 or except to the extent that such cause has prevented LESSEE from fully or substantially occupying or using the Leased Premises or has otherwise adversely affected LESSEE’s operations.

 

ARTICLE 10  -  FORCE MAJEURE AND OTHER DISTURBANCES

 

10.1                        OCCURRENCE OF FORCE MAJEURE  - LESSEE shall give LESSOR written notice of any damage caused to the Leased Premises by reason of Force Majeure, within five (5) working days from the occurrence thereof.  If the Leased Premises are rendered inaccessible or destroyed or substantially damaged by Force Majeure, the damage shall be repaired at the expense of LESSOR, and the disturbance or discontinuance in the possession of the Leased Premises by reason of or occasioned during such repair shall confer no right of any kind to LESSEE against LESSOR, except to the extent recognized under Article 10.2.

 

10.2                        OPTION TO RESCIND  -  In the event that (i) physical damage resulting from the Force Majeure renders the Leased Premises totally unfit for use or occupation for more than sixty (60) days, or (ii) the repairs required to rectify the damage resulting from Force Majeure and to render the Leased Premises fit for use and occupation are expected to last for more than ninety (90) days, or (iii)  Force Majeure prevents LESSEE from conducting its business in the Leased Premises for a period of more than sixty (60) days, then either party with regard to (i) and (ii) and LESSEE with regard to (iii) shall have the right to rescind this Contract which shall be without prejudice to the rights and remedies of either party against the other in respect of any claim or liability antecedent to such rescission.

 

In no case shall any compensation or claim be allowed against LESSOR by reason of the interruption, annoyance or injury caused to LESSEE or its property arising from the rescission of this Contract or any interruption in the use or possession of the Leased Premises or the repair of any portion of the Building or the Leased Premises.

 

10.3                        STRIKES, LOCKOUTS AND OTHER THREATS  -  In the event that (i) a picket line is established in the Leased Premises or in the vicinity thereof due to a labor dispute involving LESSEE or arising in any way from the conduct of LESSEE’s business, or (ii)  an activity is performed in the Leased Premises which, in the sole judgment of LESSOR, interferes with or adversely affects the operations of LESSOR, or  (iii)  any event, accident or cause beyond the control of LESSEE threatens LESSOR’s operations in the Building, the operations of the other lessees/occupants of the Building and the lives of LESSEE’s employees, guests, customers or clients and the security of the Building itself, LESSOR may, at its sole option, terminate this Contract by written notice to LESSEE if such is due to the gross negligence or inexcusable fault of the LESSEE provided that LESSEE is given sixty (60) days within which to rectify the situation.  If there is no negligence or inexcusable fault on the part of the LESSEE,  LESSOR shall not elect to terminate this Contract, but may, in its sole discretion and by written notice, require LESSEE to pay for any additional cost LESSOR may incur in hiring security guards, maintaining the cleanliness of the Leased Premises or in contracting for such other services, including legal services  and  other costs of suits as may be required for the well-being, security and welfare of the other  lessees  in  the  Building.

 

In the event that LESSEE is prevented from conducting its business in the Leased Premises due to a strike, lockout, labor dispute or any other analogous activity involving LESSOR or other lessees, or due to an accident or cause beyond the control of LESSOR (that is hazardous  to  the  security   of  the  Building  such as but not limited to bomb threats), LESSEE hereby unconditionally relieves and releases LESSOR from any and all liabilities in connection with or arising  out  of  such  occurrence(s) except to the extent that such occurrence(s) is attributable  to  the  gross  negligence or inexcusable fault of LESSOR, its officers, employees, agents, representatives or guests.   LESSEE shall likewise continue to pay the rent, its share in the Common Area Charges and all its other obligations under this Contract. This Article shall be without prejudice to the rights of either party to terminate this Contract pursuant to Article 10. 2.

 

ARTICLE  11  -  TERMINATION AND ITS CONSEQUENCES

 

11.1                        EVENTS OF DEFAULT AND TERMINATION. - LESSOR shall have the right to cancel or terminate this Contract without need of legal or judicial action or order upon the occurrence of any of the following events by giving written notice to LESSEE:

 

(a)                                 LESSEE shall have failed to return and surrender the Leased Premises upon expiration of the Lease Term or upon the termination or cancellation of this lease;

 

(b)                                 the Leased Premises shall be closed, deserted or unoccupied for a continuous period of five (5)  calendar days;

 

(c)                                  LESSEE shall fail to pay for at least one (1) month its share of electric, emergency power, water, sewerage or other public utility or Common Area Charges accruing in connection with or allocated to the Leased Premises or shall fail to pay the rent or any other amount due hereunder on the date specified herein for its payment and LESSEE fails to rectify or remedy the failure within thirty (30) days from written demand of the LESSOR, provided however that LESSEE shall not be in default if the utility charges or fees are being disputed by LESSEE as provided under Article 6.2 or if the dispute is not resolved due to the act or omission of LESSOR or if the delay in payment continues despite best efforts are made by the LESSEE to resolve such dispute;

 

WNS Global Services Philippines, Inc._Techno Plaza II_5th and 6th Floors

Page 11 of 22

 

(d)                                 LESSEE fails to observe or perform any of its covenants provided hereunder or LESSEE commits a breach of any of its obligations and undertakings under this Contract, such as but not limited to the use of the Leased Premises for any purpose other than as herein agreed upon, violation of any other provision of this Contract relating to the use and occupancy of the Leased Premises, violation of the Building Rules, violation of any law, rule, regulation or ordinance of the national and/or city government regarding the use, occupancy, security and sanitation of the Leased Premises, or sublease or transfer of rights over the Leased Premises without securing LESSOR’s approval;

 

(e)                                  any of LESSEE’s representations and warranties as specified hereunder shall prove false in any material respect when made and LESSEE fails to rectify or remedy the breach within thirty (30) days from written demand of LESSOR;

 

(f)                                   LESSEE’s franchise shall have been revoked, if applicable;

 

(g)                                  LESSEE, if a natural person, shall have died;

 

(h)                                 LESSEE’s corporate existence, if a juridical entity, shall have ceased;

 

(i)                                     LESSEE shall have become insolvent or be unable to pay its debts when due or shall commit or   permit any act of bankruptcy under the applicable law; or

 

(j)                                    the occurrence of any other event which entitles LESSOR to exercise its right to cancel or terminate this lease pursuant to other provisions in this Contract other than Articles10.1  10.2, 10.3 and 12.1, Annex “A” and under the law.

 

11.2                        CONSEQUENCES OF DEFAULT  -  Upon the occurrence of any of the foregoing events specified in Article 11.1,  LESSOR shall be entitled to exercise any of the following remedies, alternatively or cumulatively at its discretion, in conjunction with or separately from any other right or remedy granted hereunder or under the law, without need for any legal or judicial action or order:

 

(a)                                 LESSOR is hereby constituted and appointed as LESSEE’s attorney-in-fact with the following powers and rights upon the occurrence of any of the events specified in Article 11.1:  to (i)  open, enter, padlock, secure, enclose or fence the Leased Premises, and/or discontinue the supply of public utilities and services to the Leased Premises, or otherwise take full and complete physical possession and control of the Leased Premises; (ii) assume ownership and take  full control and possession  of all alterations, additions, improvements or installations placed in or on the Leased Premises  which cannot be removed without defacing or injuring any ceiling, floor, wall or any portion of the Building or the Leased Premises, (iii) take an inventory of the equipment, furniture, articles or merchandise found or located in the Leased Premises which may be removed therefrom without defacing or injuring any ceiling, floor, wall or any portion of the Building or Leased Premises, place any of the same in storage and charge LESSEE the corresponding storage fees therefor;  (iv) in case LESSEE fails to claim said equipment, furniture, articles or merchandise from storage and liquidate any liability to LESSOR within thirty (30) days from the date LESSOR takes possession of the Leased Premises or of LESSEE’s  personal  properties,  to  dispose  of  said  properties  in  a  public  sale  and  to apply the proceeds thereof to the payment of whatever liability and/or indebtedness LESSEE may have to LESSOR, including expenses incurred by  LESSOR in connection with such sale, without prejudice to the right of LESSOR to collect any deficiency.  The appointment of LESSOR as attorney-in-fact of LESSEE shall be considered coupled with an interest and, hence, shall be irrevocable.

 

Notwithstanding anything to the contrary in this Contract, LESSOR shall not exercise its rights under this Article 11.2(a) unless it has fully exhausted all appropriate non-judicial remedies and recourses available to it and LESSEE failed to remedy said default after the curing period.  For the avoidance of doubt, Article 11.2(a) first paragraph is a measure of last resort by LESSOR.  In all events, the rights of LESSOR under Article 11.2(a) paragraph 1 shall be exercised by LESSOR only if LESSEE is not able to remedy the situation within thirty (30) days from receiving notice thereof from LESSOR.

 

(b)                                 LESSOR shall be entitled to collect from LESSEE, and LESSEE shall continue to be liable for the rental for the unexpired period of the Lease Term and any penalty and interest charges due thereon.  The entire Security Deposit and any Advance Rental shall be forfeited in favor of LESSOR, and LESSEE shall continue to be liable for all amounts due and owing from it under this Contract.   All these amounts shall be due to LESSOR in addition to whatever damages, whether actual or consequential, which may be due under Articles 7.5 as well as the damages LESSOR may incur or suffer arising from the termination of this Contract.  In no case shall any amount due hereunder from LESSEE be applied against the Security Deposit, it being understood that the entire amount thereof shall accrue by virtue of forfeiture in favor of LESSOR.

 

(c)                                  LESSOR shall be subrogated to the rights of LESSEE as sublessor, if LESSEE has subleased the Leased Premises to a third party, whether or not authorized by LESSOR.

 

(d)                                 Should LESSOR be compelled to seek judicial relief against LESSEE or any of its employees, agents or representatives, LESSEE shall, in addition to the damages mentioned above, pay an amount equivalent to such award as may be ordered by the courts as attorney’s fees.

 

ARTICLE 12  -  GENERAL PROVISIONS

 

12.1                        EXPROPRIATION  -  In the event that the Leased Premises or any part of the Building is expropriated during the period of this lease by any instrumentality of the Government or by any other entity with authority to exercise such power, either party may rescind this Contract upon giving the other party thirty (30) days prior written notice thereof, without incurring any liability or providing the other party with any basis for an action for damages.  In case of such expropriation, LESSEE hereby unconditionally relieves and releases LESSOR from any and all liability under this Contract in connection with or arising out of such expropriation proceedings and agrees that the compensation to  be  received by LESSOR shall belong to it wholly as owner of the Leased Premises, without prejudice to whatever recourse LESSEE may have against the expropriating entity on account of damage done or caused to it or its property by reason of such expropriation.  Upon such expropriation, LESSOR shall return to LESSEE the Security Deposit and Advance Rental given under this Contract, after deducting the payment for rentals, utilities and other amounts which remain due and owing to LESSOR.

 

WNS Global Services Philippines, Inc._Techno Plaza II_5th and 6th Floors

Page 12 of 22

 

12.2                        NON-WAIVER  -  The failure of any party to insist upon a strict performance of any of the terms, conditions and covenants hereof shall not be deemed a relinquishment or waiver of such terms, conditions or covenants granted to such party, nor shall it be construed as a condonation of any subsequent breach or default of the terms, conditions and covenants hereof, which terms, conditions and covenants shall continue to be in full force and effect.  The subsequent acceptance of rent by LESSOR shall not be deemed to be a waiver of any prior breach by LESSEE of any term, covenant or condition for this lease, regardless of LESSOR’s knowledge of such prior breach at the time of acceptance of such rent.  No waiver by LESSOR of any of its rights under this Contract shall be deemed to have been made unless expressed in writing and signed by LESSOR.

 

12.3                        NOTICE -  Where demand or notice is required to be given under this Contract, notice sent to LESSEE at the Leased Premises or at the address specified above by registered mail or by personal delivery shall be considered sufficient compliance with the requirement of notice or demand. All demands or notices required under this contract to be made by LESSEE shall also be sufficient if posted at the Leased Premises.

 

Except where a period is fixed for the parties under this Contract, whenever the consent, approval or permission of LESSOR is required under this contract, LESSOR shall have TEN (10) days within which to act on any request for such consent, approval or permission.  If LESSOR fails to act within said period, it shall be conclusively deemed that the LESSOR has granted the requested consent, approval or permission.

 

12.4                        NON-REGISTRATION OF LEASE - The parties agree that this Contract shall not be registered with the office of the Register of Deeds, but in the event of sale, transfer or disposition of the Leased Premises,  LESSOR binds itself to require the transferee or vendee to respect and abide by all the terms and conditions of this Contract.

 

12.5.                     ASSIGNMENT OF RIGHTS -LESSOR reserves the right to assign and convey its rights to this Contract in favor of its affiliates or subsidiaries, including any surviving entity or any other successor-in-interest resulting from a merger or otherwise, after notice in writing to LESSEE.  LESSOR binds itself to require its assignee to respect and abide by all the terms and conditions of this Contract.

 

12.6                        NON-LIABILITY FOR OBSTRUCTION -LESSOR shall not be liable for any obstruction and/or damages to LESSEE by virtue of future constructions of incoming tenants/occupants of the Building provided that it does not violate the safety and security of the LESSEE’S employees, guests, and its clients.  However, LESSOR shall exert its best efforts to implement and enforce the construction rules and regulations for the Building to prevent any such obstruction.

 

12.7                        LAW AND VENUE APPLICABLE  -  This Contract shall be construed, interpreted and governed by the laws of the Philippines.  Each party irrevocably submits to the jurisdiction of the courts in Quezon City for the purpose of enforcing any right or obligation under or arising out of this Contract.

 

12.8                        ENTIRE AGREEMENT  -  This Contract constitutes the complete understanding between the parties with respect to the subject matter hereof and supersedes any prior expression of intent, representation or warranty with respect to this transaction.  Both Parties shall not be bound by any stipulations, representations, agreements or promises, oral or otherwise not contained in this Contract. This Contract may be amended but only with an instrument in writing signed by the parties.

 

12.9                        ADDITIONAL TERMS AND CONDITIONS  -  This lease shall be subject to the additional terms and conditions specified in Annex “A”.  All the Annexes of this Contract constitute integral parts hereof.

 

12.10                 SEVERABILITY  -  If any one or more of the provisions of this Contract is declared invalid or unenforceable in any respect under any applicable law, the validity, legality or enforceability of the remaining provisions contained herein shall not in any way be affected or impaired.  In such event, the Parties shall promptly and in good faith discuss the manner in which their original intention can be fulfilled as closely as possible, and they will amend this Contract accordingly.

 

IN WITNESS WHEREOF, LESSEE and LESSOR have caused these presents to be signed on the date and at the place above-written.

 

	
MEGAWORLD CORPORATION
    	
WNS GLOBAL SERVICES   PHILIPPINES, INC.
    
	
LESSOR
    	
LESSEE
    
	
 
    	
 
    
	
By:
    	
/s/ JOEY I. VILLAFUERTE
    	
 
    	
By: 
    	
/s/ AMITABH SINGH
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
JOEY I. VILLAFUERTE
    	
AMITABH SINGH
    
	
SAVP-Controllership Group
    	
Managing Director
    
						

 

 

	
Signed in the Presence of:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    

 

WNS Global Services Philippines, Inc._Techno Plaza II_5th and 6th Floors

Page 13 of 22

 

A C K N O W L E D G M E N T

 

REPUBLIC OF THE PHILIPPINES)

CITY OF MAKATI CITY)S.S.

 

BEFORE ME, a Notary Public for and in MAKATI CITY on this SEP 27, 2012, personally appeared the following parties:

 

	
Name
    	
 
    	
C.T.C. No. /TIN
    	
 
    	
Date/Place of Issue
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Megaworld Corporation
    	
 
    	
TIN: 000-477-103-000
    	
 
    	
 
    
	
Represented by:
    	
 
    	
 
    	
 
    	
 
    
	
Joey I. Villafuerte
    	
 
    	
TIN: 202-249-678
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
WNS Global Services Philippines, Inc.
    	
 
    	
 
    	
 
    	
 
    
	
Represented by:
    	
 
    	
 
    	
 
    	
 
    
	
Amitabh Singh
    	
 
    	
 
    	
 
    	
 
    

 

known to me and to me known to be the same persons who executed the foregoing instrument and who acknowledged to me that the same is their own free and voluntary act and deed and that of the corporations they respectively represent.

 

I FURTHER CERTIFY that this instrument consists of fourteen (14) pages only, including this page where this Acknowledgment is written, but excluding the annexes and attachments thereto, which form an integral part hereof, which documents is a Contract of Lease over an office space in the Techno Plaza II Building, Eastwood City Cyberpark, 188 E. Rodriguez Jr. Avenue, Bagumbayan, Quezon City.

 

WITNESS my hand and seal on the date and at the place first above written.

 

	
NOTARY PUBLIC
    
	
 
    
	
Doc. No. 207;
    
	
Page No.  43;
    
	
Book No. 123;
    
	
Series of 2012.
    

 

WNS Global Services Philippines, Inc._Techno Plaza II_5th and 6th Floors

Page 14 of 22

 

ANNEX “A”

 

ESSENTIAL PROVISIONS

 

	
LESSOR
    	
 
    	
MEGAWORLD CORPORATION
    
	
 
    	
 
    	
 
    
	
LESSEE
    	
 
    	
WNS GLOBAL SERVICES PHILIPPINES, INC.
    
	
 
    	
 
    	
 
    
	
LEASED PREMISES
    	
 
    	
5th and 6th Floors of Techno Plaza II   Building, Eastwood City Cyberpark, 188 E. Rodirguez Jr. Avenue, Bagumbayan,   Quezon City.
    
	
 
    	
 
    	
 
    
	
LEASABLE AREA
    	
 
    	
Phase 1
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
Floor
    	
 
    	
Leasable Area (in sqm.)
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
5th Floor
    	
 
    	
3,165.58
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Phase 2
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
Floor
    	
 
    	
Leasable Area (in sqm.)
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
6th Floor
    	
 
    	
3,165.58
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Total of 6,331.16 square meters, inclusive of   undivided interest, if any, in the limited Common Areas of the floor in which   the Leased Premises are located.
    
	
 
    	
 
    	
 
    
	
USE
    	
 
    	
Office operations
    
	
 
    	
 
    	
 
    
	
LEASE TERM
    	
 
    	
Phase 1

 

Commencing on November 01, 2012 and   co-terminus with the expiry of the 6th Floor lease of the same   building which will expire on April 30, 2019 and with an option to renew   subject to mutually acceptable terms and conditions.  

 

Phase 2

 

Commencing May 01, 2013 and terminating on   April 30, 2019 and with an option to renew subject to mutually   acceptable terms and conditions.

 

The first year of the Lease Term shall be from   the Rent and Lease Commencement Date of the Leased Premises.
    
	
 
    	
 
    	
 
    
	
RENEWAL OPTION
    	
 
    	
LESSEE, by notice to LESSOR, given no later than   180 days prior to the expiration of the initial term shall have the option to   renew for another five (5) years.

 

The renewal terms shall be upon all the   applicable terms and conditions of the lease in effect during the initial   term, except for those items determined in accordance with the fair market   rent including the Base Rent during the renewal term, which shall be equal to   100% of the Fair Market Rent for the Premises prevailing as of the notice   date of the renewal.

 

Also, LESSEE shall no longer be entitled to the   rent-free period upon lease renewal.

 

Definition Fair Market Value Rental Rate  

 

With respect to the Renewal Option, the term   “Fair Market Rent” shall be defined to mean market rental rate for buildings   of comparable size, location, age and quality and should include   consideration of the space efficiency ratio, the total amount of space being   leased by the LESSEE at the time of renewal and any leasing concessions which   are granted at such comparable buildings to LESSEES which are similar in size   and credit to the LESSEE.  Should   the parties fail to reach an agreement on the “Fair Market RENT” within three   (3) months from receipt by the LESSOR of LESSEE”s notice of renewal, the   LESSEE, at its option, may submit the matter exclusively for arbitration to   an international real estate agency firm appointed mutually by the LESSOR and   the LESSEE. The cost of this arbitration shall be divided equally and borne   by both parties.

 

Moreover, the “Fair Market Rent” must be decided   on by the appointed real estate agency firm within one (1) month from   its appointment and not later than two (2) months prior to lease   expiration.
    

 

WNS Global Services Philippines, Inc._Techno Plaza II_5th and 6th Floors

Page 15 of 22

 

	
HAND OVER SCHEDULE
    	
 
    	
Phase 1

 

The 5th Floor shall be handed over to   the LESSEE on August 01, 2012 for simultaneous fit-out provided that the   Contract of Lease has been signed and payment of the three (3) months   Security Deposit and the three (3) months rental payment have been   settled by LESSEE.

 

Phase 2

 

The 6th Floor shall be handed over to   the LESSEE on February 01, 2013 provided that the Contract of Lease has   been signed and payment of the three months Security Deposit and the three   (3) months rental payment have been settled by LESSEE.

 

The Contract of Lease shall be executed not later   than July 31, 2012.
    
	
 
    	
 
    	
 
    
	
HAND OVER CONDITION
    	
 
    	
On an “as-is-where-is” Condition.

·                  Bare   shell condition for office areas

·                  Finished   condition for the common areas

·                  Air-conditioning   system (VRF)

·                  Lighting   Fixtures — installation/relocation for LESSEE’s account.
    
	
 
    	
 
    	
 
    
	
FIT OUT PERIOD
    	
 
    	
Three (3) months from the possession date of   the Leased Premises.

 

The Common Area Charges and Utility Charges   during the LESSEE’s fit-out period shall be for the account of the LESSEE.
    
	
 
    	
 
    	
 
    
	
RENT COMMENCEMENT DATE
    	
 
    	
Lease and Rent Commencement shall be as follows:

 

Phase 1 (5th Floor)

Not later than November 01, 2012.

 

Phase 2 (6th Floor)

Not later than May 01, 2013

 

In the event that LESSEE would need to commence   with fit out works and business operations on the space at an earlier date,   LESSEE would have to inform LESSOR about this in writing. LESSOR shall handover   the space to the LESSEE within 7 days from written notification for   simultaneous fit out. Furthermore, it should be understood that lease and   rental shall commence on the date such business operations commenced.
    
	
 
    	
 
    	
 
    
	
FIXED MONTHLY RENT
    	
 
    	
PESOS : FIVE HUNDRED (P500.00) per square meter of the Leasable Area per month exclusive of Value   Added Tax (VAT) and Association Dues which shall be for the account of the   LESSEE.
    

 

WNS Global Services Philippines, Inc._Techno Plaza II_5th and 6th Floors

Page 16 of 22

 

	
ESCALATION
    	
The Fixed Monthly Rent shall be escalated as   follows:
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
Phase   1
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
Months from the Lease
   Commencement 
    	
 
    	
Escalation
   Rate
    	
 
    	
Amount
    	
 
    
	
 
    	
November 01, 2012 to April 30, 2014
    	
 
    	
0.00
    	
%
    	
P500.00
    	
 
    
	
 
    	
May 01, 2014 to   April 30, 2015
    	
 
    	
0.00
    	
%
    	
P500.00
    	
 
    
	
 
    	
May  01, 2015 to   April 30, 2016
    	
 
    	
5.00
    	
%
    	
P525.00
    	
 
    
	
 
    	
May 01, 2016 to   April 30, 2017
    	
 
    	
5.00
    	
%
    	
P551.25
    	
 
    
	
 
    	
May 01, 2017 to   April 30, 2018
    	
 
    	
5.00
    	
%
    	
P578.81
    	
 
    
	
 
    	
May 01, 2018 to   April 30, 2019
    	
 
    	
5.00
    	
%
    	
P607.75
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
Phase   2
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
Months from Lease 
   Commencement
    	
 
    	
Escalation
   Rate
    	
 
    	
Amount
    	
 
    
	
 
    	
May 01, 2013 to   April 30, 2014
    	
 
    	
0.00
    	
%
    	
P500.00
    	
 
    
	
 
    	
May 01, 2014 to   April 30, 2015
    	
 
    	
0.00
    	
%
    	
P500.00
    	
 
    
	
 
    	
May  01, 2015 to   April 30, 2016
    	
 
    	
5.00
    	
%
    	
P525.00
    	
 
    
	
 
    	
May 01, 2016 to   April 30, 2017
    	
 
    	
5.00
    	
%
    	
P551.25
    	
 
    
	
 
    	
May 01, 2017 to   April 30, 2018
    	
 
    	
5.00
    	
%
    	
P578.81
    	
 
    
	
 
    	
May 01, 2018 to   April 30, 2019
    	
 
    	
5.00
    	
%
    	
P607.75
    	
 
    

 

TABLE OF RENTALS

·                  PHASE (AREA: 3,165.58 SQM.)

 

	
A
    	
 
    	
B
    	
 
    	
C
    	
 
    	
D (B X C)
    	
 
    	
E(C+D)
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
Total Amount to be
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
Fixed Monthly
    	
 
    	
 
    	
 
    	
Paid per Quarter by
    	
 
    
	
Period Covered
    	
 
    	
Leasable Area
    	
 
    	
Rent per sqm.
    	
 
    	
Fixed Monthly Rent
    	
 
    	
LESSEE to LESSOR
    	
 
    
	
11/01/2012 to 04/30/2014
    	
 
    	
3,165.58
    	
 
    	
500.00
    	
 
    	
1,582,790.00
    	
 
    	
4,748,370.00
    	
 
    
	
05/01/2014 to 04/30/2015
    	
 
    	
3,165.58
    	
 
    	
500.00
    	
 
    	
1,582,790.00
    	
 
    	
4,748,370.00
    	
 
    
	
05/01/2015 to 04/30/2016
    	
 
    	
3,165.58
    	
 
    	
525.00
    	
 
    	
1,661,929.50
    	
 
    	
4,985,788.50
    	
 
    
	
05/01/2016 to 04/30/2017
    	
 
    	
3,165.58
    	
 
    	
551.25
    	
 
    	
1,745,025.98
    	
 
    	
5,235,077.93
    	
 
    
	
05/01/2017 to 04/30/2018
    	
 
    	
3,165.58
    	
 
    	
578.81
    	
 
    	
1,832,277.27
    	
 
    	
5,496,831.82
    	
 
    
	
05/01/2018 to 04/30/2019
    	
 
    	
3,165.58
    	
 
    	
607.75
    	
 
    	
1,923,891.14
    	
 
    	
5,771,673.41
    	
 
    

 

·                  PHASE 2 (AREA: 3,165.58 SQM.)

 

	
A
    	
 
    	
B
    	
 
    	
C
    	
 
    	
D (B X C)
    	
 
    	
E(C+D)
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
Total Amount to be
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
Fixed Monthly
    	
 
    	
 
    	
 
    	
Paid per Month by
    	
 
    
	
Period Covered
    	
 
    	
Leasable Area
    	
 
    	
Rent per sqm.
    	
 
    	
Fixed Monthly Rent
    	
 
    	
LESSEE to LESSOR
    	
 
    
	
05/01/2013 to 04/30/2014
    	
 
    	
3,165.58
    	
 
    	
500.00
    	
 
    	
1,582,790.00
    	
 
    	
4,748,370.00
    	
 
    
	
05/01/2014 to 04/30/2015
    	
 
    	
3,165.58
    	
 
    	
500.00
    	
 
    	
1,582,790.00
    	
 
    	
4,748,370.00
    	
 
    
	
05/01/2015 to 04/30/2016
    	
 
    	
3,165.58
    	
 
    	
525.00
    	
 
    	
1,661,929.50
    	
 
    	
4,985,788.50
    	
 
    
	
05/01/2016 to 04/30/2017
    	
 
    	
3,165.58
    	
 
    	
551.25
    	
 
    	
1,745,025.98
    	
 
    	
5,235,077.93
    	
 
    
	
05/01/2017 to 04/30/2018
    	
 
    	
3,165.58
    	
 
    	
578.81
    	
 
    	
1,832,277.27
    	
 
    	
5,496,831.82
    	
 
    
	
05/01/2018 to 04/30/2019
    	
 
    	
3,165.58
    	
 
    	
607.75
    	
 
    	
1,923,891.14
    	
 
    	
5,771,673.41
    	
 
    

 

	
MANNER OF PAYMENT
    	
 
    	
The rent shall be payable QUARTERLY in advance,   on or before the 5th working day of the relevant QUARTER to which   such rent corresponds at the 28th Floor The World Centre, 330   Sen. Gil Puyat Avenue, Makati City, or at any other address which LESSOR may   by notice in writing to LESSEE from time to time direct, without necessity of   demand or collection. The rent for the entire Lease Term shall be covered by   postdated checks. The receipt of a check in payment of the rentals due   hereunder shall not produce the effect of payment until the proceeds thereof   are actually received by LESSOR.
    

 

WNS Global Services Philippines, Inc._Techno Plaza II_5th and 6th Floors

Page 17 of 22

 

	
SECURITY DEPOSIT
    	
 
    	
PESOS : NINE MILLION FOUR   HUNDRED NINETY SIX THOUSAND SEVEN HUNDRED FORTY (P9,496,740.00) or equivalent to Fixed Rent for three   (3) months exclusive of VAT and based on the rate applicable on the   first year of the Lease Term. The Security Deposit shall be payable upon   signing of the Contract of Lease.

 

The Security Deposit   shall be increased correspondingly as and when the rent is automatically   increased annually. The Security Deposit shall be refunded to the LESSEE   within sixty (60) calendar days after the expiration or earlier termination   of the Lease provided that:

 

1.              LESSEE has settled all expenses from utility   companies supplying telephone, water, electric power or public utility   services to the Leased Premises, covering the period ending on the date   LESSEE shall have completely vacated and delivered the Leased Premises to the   LESSOR.

2.              LESSEE has no other obligations which remain   due and unpaid under the Lease Agreement for the Leased Premises.

3.              LESSEE has completely and satisfactorily   vacated and delivered the Leased Premises to the LESSOR.

 

The reservation fee shall be credited to the   Security Deposit upon signing of the Contract of Lease. In the event the   LESSEE decides not to proceed with the lease, the reservation fee shall be   forfeited in favor of the LESSOR.
    
	
 
    	
 
    	
 
    
	
ADVANCE RENTAL
    	
 
    	
PESOS : NINE MILLION FOUR   HUNDRED NINETY SIX THOUSAND SEVEN HUNDRED FORTY (P9,496,740.00) or equivalent to Fixed Rent for three   (3) months exclusive of VAT, based on the rate applicable on the first   year of the Lease Term and shall be applied to the rent due on the first   three (3) months of the Lease Term.
    
	
 
    	
 
    	
 
    
	
INTEREST AND PENALTY
    	
 
    	
LESSEE shall pay to LESSOR interest and penalties   on any amount due under this Contract at the rate of two percent (2%) per month, or at the   maximum prevailing interest rate allowed by law as may be determined by   LESSOR, at the time the obligation is due, whichever is higher, to be   computed from the date of delinquency until such amount is paid in full, plus   a penalty of three percent (3%)   per month, to be computed from the date of delinquency until such amount is   paid in full.
    
	
 
    	
 
    	
 
    
	
COMMON AREA CHARGES
    	
 
    	
The Common Area Charges are subject to final   determination by the Building Administrator and the rate shall be finalized   upon building handover. This is payable quarterly in advance and may be   changed from time to time by the Building Administration.

 

The Common Area Charges shall be determined by   the LESSOR prior to the signing of the Contract of Lease. LESSOR commits to   the LESSEE that it shall have full transparency for the cost breakdown of   expenses covered by the Common Area charges fee.
    
	
 
    	
 
    	
 
    
	
ELECTRICITY
    	
 
    	
Based on actual consumption (meter reading)
    
	
 
    	
 
    	
 
    
	
WATER
    	
 
    	
Based on actual consumption (meter reading)
    
	
 
    	
 
    	
 
    
	
TELECOMMUNICATIONS
    	
 
    	
LESSEE shall have the right to use any   telecommunications provider, subject to reasonable requirements of LESSOR to   allocate space in the Building’s conduits and/or equipment rooms. LESSOR   shall not charge the chosen telecommunications provider fees for the access   to the Building.
    
	
 
    	
 
    	
 
    
	
AIR CONDITIONING
    	
 
    	
·   VRF Air-conditioning system.

 

There will be NO after-office air conditioning   charges. AC electricity charges shall be sub-metered and for the sole account   of the LESSEE.
    

 

WNS Global Services Philippines, Inc._Techno Plaza II_5th and 6th Floors

Page 18 of 22

 

	
OTHER UTILITIES
    	
 
    	
Based on actual consumption or charges for   emergency power and other public services or utilities consumed or supplied   in the Leased Premises.
    
	
 
    	
 
    	
 
    
	
PARKING
    	
 
    	
Reserved parking rate shall be as follows:

 

—   P4,000.00/slot per month for   indoor parking

 

Reserves parking rates are exclusive of VAT and   payable quarterly in advance. LESSEE shall be given a parking slot allocation   of one (1) slot for every 100-square meter of Leasable Area. There shall   be a separate Contract of Lease for parking.

 

The LESSEE shall only pay for the actual number   of slots that it is using.
    
	
 
    	
 
    	
 
    
	
REINSTATEMENT LIABILITY
    	
 
    	
At the expiration or early termination of the   lease, LESSEE will be allowed to vacate the premises on an “as-is” condition   and in good tenantable condition (i.e. no reinstatement). Improvements and   alterations to the Leased Premises during the Term shall be the property of   the LESSOR.

 

The LESSEE shall have no obligation to remove any   of its improvements or alterations at the expiration of the Term on the   condition that this has been kept in good and tenantable condition — subject   to reasonable wear and tear.

 

The LESSEE shall also have the right to remove   all moveable partitions, workstations, equipment and trade fixtures installed   by the LESSEE so long as it repairs any damage caused by the removal thereof.
    
	
 
    	
 
    	
 
    
	
SUBLEASING/ASSIGNMENT
    	
 
    	
The LESSEE without the LESSOR’s consent, shall be   allowed to assign or sub-lease the entire or part of the Leased Premises and   their allocated parking slots only to a subsidiary or any entity resulting   from a merger or consolidation with LESSEE and on the condition that they   have the same nature of business.  

 

However, it shall be understood that in the event   of a sub-lease arrangement to a subsidiary or any entity resulting from a   merger or consolidation with LESSEE that the LESSEE shall still be primarily   and wholly liable to the LESSOR in connection with the payment of rent and   fulfillment of all of its obligations and covenants as stipulated in the   Contract of Lease.

 

LESSEE shall have the right to assign or   sub-lease the entire or part of the Leased Premises and their allocated   parking slots to any reputable company, provided that prior written consent   of the LESSOR is obtained, which consent shall not be unreasonably withheld.   LESSEE shall submit to the LESSOR, at least three (3) months prior to   effectivity of the assignment or sublease, a written request for approval of   the proposed sublease together with a company profile of the proposed   sub-LESSEE.
    
	
 
    	
 
    	
 
    
	
RIGHT TO TEMINATE
    	
 
    	
LESSEE will be allowed to pre-terminate the lease   at the end of the 3rd year of the Lease Term subject to six   (6) months prior written notice, which can be served at the end of the   36th month of the Lease Term.

 

In the event of a lease pre-termination, the   LESSEE shall forfeit its three (3) months Security Deposit (kept intact   without deductions) and pay a three (3) months rent penalty.
    
	
 
    	
 
    	
 
    
	
WAIVER OF LIEN ON WORKING PAPERS
    	
 
    	
LESSOR shall not place a lien against the files   or records of LESSEE or LESSEE’s clients or against LESSEE’s work product.   LESSOR waives all such rights, whether arising under common or statutory law.
    

 

WNS Global Services Philippines, Inc._Techno Plaza II_5th and 6th Floors

Page 19 of 22

 

	
LANDLORD’S MAINTENANCE AND   REPAIR
    	
 
    	
LESSOR shall maintain and repair the Building’s   exterior and interior public portions, common areas, structure, foundation,   roof, plumbing, electrical, heating, ventilating, air conditioning and other   mechanical systems in accordance with all government requirements and in the   condition of a first class office building.
    
	
 
    	
 
    	
 
    
	
COMPLIANCE WITH LAWS: REQUIRED   IMPROVEMENTS
    	
 
    	
LESSOR shall represent and warrant that the   Building is in compliance with all laws, ordinances, rules and   regulations (the “Laws”) in effect as of the date of this Lease. LESSOR   shall, at its sole cost and expense, comply with all the future laws that may   require structural modifications or other capital improvements to be carried   out on the Building unless laws specifically apply solely by reason of the   Tenant’s particular use of the Premises.
    
	
 
    	
 
    	
 
    
	
INTERRUPTION OF SERVICES
    	
 
    	
In the event of any interruption of services   rendering all or any portion of the Leased Premises untenantable, LESSEE   shall have the following remedies: (1) abatement of rent (pro-rata   basis) if services are interrupted for more than three (3) consecutive   working days; and (2) the right to terminate the Lease if services are   interrupted for more than sixty (60) consecutive days.
    
	
 
    	
 
    	
 
    
	
SUBORDINATION AND NON-DISTURBANCE
    	
 
    	
Subject to the requirements of the law,   non-disturbance, subordination and attornment agreement will be required from   any mortgagee, LESSOR and any party having priority over the Lease. Such   agreements shall provide that LESSEE’s possession shall not be disturbed in   the case of any mortgage foreclosure or ground lease termination, and that   the Lease will remain in full force and effect without any modification   whatsoever. Any such subordination, attornment and non-disturbance agreement   (s) shall be in a form satisfactory to LESSEE.
    
	
 
    	
 
    	
 
    
	
SECURITY
    	
 
    	
Eastwood City  

 

The are four layers of security for the Techno   Plaza 2. These are:

 

1st — Guards are stationed at the   main entrances of the development, namely: C5.  

 

2nd — There are roving guards   patrolling the entire complex 24 hours a day, 7 days a week.

 

3rd — There are security guards   stationed at the ground floor entrance lobby of the tower.

 

4th — CCTV cameras are   strategically positioned in areas in and around the buildings.

 

Megaworld Corporation would consent (a) for   LESSEE to provide its own security services for its occupied floors as well   as in and around the Building and its Premises and (b) to allow general   access and/or tie in to any security system provided by the Building but subject   to the building house rules.
    
	
 
    	
 
    	
 
    
	
ACCESS TO PREMISES
    	
 
    	
The LESSEE shall have access to the Leased   Premises and parking facilities 24 hours per day, 7 days per week, 52 weeks   per year.

 

However, during emergency situations, the LESSOR   may restrict access to specific areas of the building in the interest of   safeguarding the well-being of its tenants/ occupants.
    
	
 
    	
 
    	
 
    
	
SIGNAGE
    	
 
    	
Exterior signage for the building shall be   subject to the mutual agreement of the parties.

 

Interior signage rights shall be subject to the   Building House Rules and Regulations.
    

 

WNS Global Services Philippines, Inc._Techno Plaza II_5th and 6th Floors

Page 20 of 22

 

The parties agree to the above conditions.  Signed this              day of                     , 2012.

 

 

	
MEGAWORLD CORPORATION
    	
WNS GLOBAL SERVICES   PHILIPPINES, INC.
    
	
LESSOR
    	
LESSEE
    
	
 
    	
 
    
	
By:
    	
/s/ JOEY I. VILLAFUERTE
    	
 
    	
By:
    	
/s/ AMITABH SINGH
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
JOEY I. VILLAFUERTE
    	
AMITABH SINGH
    
	
SAVP-Controllership   Group
    	
Managing   Director
    
						

 

WNS Global Services Philippines, Inc._Techno Plaza II_5th and 6th Floors

Page 21 of 22

 

ANNEX “B”

 

RISK ASSESSMENT MITIGATION DOCUMENT

 

	
Sl No
    	
 
    	
Description
    	
 
    	
LESSOR’s Response
    
	
1
    	
 
    	
Flooding due to Marikina River-Mitigation Plan
    	
 
    	
Aside from the 15.5 meters retaining/ riprap wall   from Techno Plaza 2’s ground floor level to Marikina river footing, there is   another existing Concrete Hollow Block (CHB) wall within the property line of   Techno Plaza 2, with a height of 3.5 meters.
    
	
2
    	
 
    	
Firewall required between DG Sets and   Transformers
    	
 
    	
That due to limitations attributed to layout   design of the area, LESSOR cannot put a CHB wall to separate the Diesel   Generator from the Transformer. The LESSOR however will check with its   consultants and implement appropriate alternative protection. LESSOR shall   present this to the LESSEE prior to actual implementation.
    
	
3
    	
 
    	
Slab Strengthening to be done for Server   Room and UPS Rooms
    	
 
    	
The best location for UPS and Servers will be   near the elevator core, preferably at lowest floor to be occupied by the   LESSEE. Once the LESSEE has submitted to the LESSOR all the necessary details   such as layout and equipment loading, the LESSOR can accommodate the needed   reinforcement subject to final approval of the LESSOR and its structural   consultant for TechnoPlaza2.
    
	
4
    	
 
    	
N+1 DG Set of 1,000 KVA
    	
 
    	
There is an existing Diesel Generator dedicated   to TechnoPlaza 2. As a back-up, a mobile Diesel Genset of 1,000 KVA capacity   is conveniently located in Eastwood City. This will be used during emergency   situations. Once the interface of the mobile Diesel Genset to TechnoPlaza 2   has been completed, the estimated time to deploy and connect to TechnoPlaza 2   is 60 mins.
    
	
5
    	
 
    	
Telecom Room in the Basement
    	
 
    	
The existing Telecom Room is located at the   basement level. This is backed up by a second telecom room located at the   Ground floor.
    
	
6
    	
 
    	
Assembly area to be identified
    	
 
    	
The assigned assembly area will be at the   Eastwood Citywalk open area. Should this location change, the LESSOR shall   inform the LESSEE in advance through writing, and identify an equally   appropriate substitute location within Eastwood City.
    
	
7
    	
 
    	
Statutory documents for DG Sets, Earthpit Reports   and Lift Licences
    	
 
    	
Necessary documentation required by the LESSEE   shall be provided that: a.) the LESSOR’s suppliers, vendors, and involved   Government Agencies have made available these necessary documents b.) The   LESSEE informs the LESSOR in writing of such a request
    
	
8
    	
 
    	
Space for Extra Earthpits
    	
 
    	
TechnoPlaza 2 has three (3) existing Earthpits.   Any additional requirement beyond this allocation shall be for the account of   the LESSEE. The LESSOR shall, through its Building Administrator, identify an   appropriate space for the LESSEE to implement this additional Earthpit.
    
	
9
    	
 
    	
Security on Supermarket side
    	
 
    	
1. Ingress and egress point of the office and   supermarket is totally separate and independent of each other. 2. There will   be distinct and separate security detail for Eastwood City, TechnoPlaza 2,   and the Supermarket.3. TechnoPlaza 2 will have Boom Barriers, conduct   underbody/boot checks for all entering vehicles. 4. Parking of TechnoPlaza 2   office tenants will be separate from the Supermarket. 5. Security guards will   be posted in the parking area. 5. CCTV Cameras will be provided in the   ingress / egress points, common areas (e.g. corridors, lift   lobbies, etc.). 6. The supermarket will not be permitted to store any   hazardous materials.
    
	
10
    	
 
    	
Fire Exit Doors
    	
 
    	
Fire exit doors of TechnoPlaza 2 will be equipped   with Panic Device Bars. Inspection Glass window is not built in the design.
    
	
11
    	
 
    	
HVAC/VRF Fire Integration
    	
 
    	
The module necessary to interface the HVAC/VRF   system to the fire system is not provided by the LESSOR. This shall be for   the account of the LESSEE.
    

 

WNS Global Services Philippines, Inc._Techno Plaza II_5th and 6th Floors

Page 22 of 22Exhibit 4.12

 

Dated  21st June  2012

 

(1)                                 BFSL LIMITED as Seller

 

(2)                                 WNS GLOBAL SERVICES (UK) LIMITED as Purchaser

 

(3)                                 WNS (HOLDINGS) LIMITED as Guarantor

 

(4)                                 BGL GROUP LIMITED as the Seller Guarantor

 

 

SALE AND PURCHASE AGREEMENT
 relating to the sale of
 Fusion Outsourcing Services Proprietary Limited

 

 

 

CONTENTS

 

	
Clause
    	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
1.
    	
Definitions and Interpretation
    	
3
    
	
2.
    	
Agreement to Sell and Purchase
    	
10
    
	
3.
    	
Purchase Price
    	
10
    
	
4.
    	
Completion
    	
13
    
	
5.
    	
Warranties
    	
14
    
	
6.
    	
Tax Covenant
    	
16
    
	
7.
    	
Purchaser’s Warranties
    	
16
    
	
8.
    	
Guarantees
    	
17
    
	
9.
    	
Confidentiality and Announcements
    	
17
    
	
10.
    	
Costs
    	
19
    
	
11.
    	
WNS Guarantee
    	
19
    
	
12.
    	
Seller Guarantee
    	
21
    
	
13.
    	
Restrictions on Activities of the Seller
    	
22
    
	
14.
    	
Entire Agreement
    	
25
    
	
15.
    	
Continuing Effect
    	
25
    
	
16.
    	
Invalidity
    	
25
    
	
17.
    	
Amendments and Waivers
    	
25
    
	
18.
    	
Further Assurance and Assistance
    	
26
    
	
19.
    	
Counterparts
    	
27
    
	
20.
    	
Assignment and Third Party Rights
    	
27
    
	
21.
    	
Set-off
    	
28
    
	
22.
    	
Notices
    	
28
    
	
23.
    	
Governing Law and Jurisdiction
    	
30
    
	
24.
    	
Agent for Service of Process
    	
30
    
	
25.
    	
Variation
    	
30
    
	
 
    	
 
    	
 
    
	
Schedules
    	
 
    
	
 
    	
 
    
	
1.
    	
Details of the Company
    	
 
    
	
2.
    	
Completion Arrangements
    	
 
    
	
3.
    	
Warranties
    	
 
    
	
4.
    	
Tax Covenant
    	
 
    
	
5.
    	
Limitations on Claims
    	
 
    
	
6.
    	
The Properties
    	
 
    
	
7.
    	
Completion Accounts
    	
 
    
	
8.
    	
Data Room Index
    	
 
    
	
9.
    	
Second Instalment Adjustment Mechanism
    	
 
    
					

 

 

Documents in the Agreed Terms

 

BGL Group Loan Novation Agreement

Co-existence Agreement

Disclosure Letter

Letters of resignation for Peter Winslow and Ian Leech

Securities Transfer Form

Press Announcement

 

 

THIS AGREEMENT is dated 21st June 2012 and is made between:

 

(1)                                 BFSL LIMITED, a company incorporated in England and Wales (registered number 02706280), whose registered office is at Pegasus House, Bakewell Road, Orton Southgate, Peterborough, Cambridgeshire PE2 6YS (the “Seller”);

 

(2)                                 WNS GLOBAL SERVICES (UK) LIMITED, a company incorporated in England and Wales (registered number 02292251), whose registered office is at Acre House, 11-15 William Road, London NW1 3ER (the “Purchaser”);

 

(3)                                 WNS (HOLDINGS) LIMITED, a company incorporated in Jersey (registered number 82262), whose registered office is at Queensway House, Hilgrove Street, St Helier, Jersey, JE1 1ES, Channel Islands (the “Guarantor”); and

 

(4)                                 BGL GROUP LIMITED, a company incorporated in England and Wales (registered number 02593690), whose registered office is at Pegasus House, Bakewell Road, Orton Southgate, Peterborough, Cambridgeshire, PE2 6YS (the “Seller Guarantor”).

 

BACKGROUND:

 

(A)                               Fusion Outsourcing Services Proprietary Limited is a private company limited by shares incorporated in the Republic of South Africa on 23 July 2003 with registered number 2003/017437/07.  Further details of the Company are set out in Schedule 1 (Details of the Company).

 

(B)                               The Seller has agreed to sell all of the issued shares in the stated capital of the Company to the Purchaser for the consideration and upon the terms and conditions set out in this Agreement.

 

(C)                               In consideration of the Seller entering into this Agreement, the Guarantor as the ultimate parent company of the Purchaser, has agreed to guarantee the obligations of the Purchaser under this Agreement, and in consideration of the Purchaser entering into this Agreement the Seller Guarantor has agreed to guarantee the obligations of the Seller under this Agreement, in each case subject to and in accordance with the terms of this Agreement.

 

IT IS AGREED that:

 

1.                                      DEFINITIONS AND INTERPRETATION

 

1.1                               Defined terms

 

In this Agreement and the Background, save as the context may otherwise require:

 

“Accounts” means the annual financial statements for the year ended 30 June 2011 in relation to the Company including the independent auditors’ report and directors’ report thereto;

 

“Actual Working Capital Value” means the aggregate value represented by the line item “Total Current Assets” as determined pursuant to the statement set out in Annex 1 (Pro forma Completion Accounts Statement) (excluding Cash) of the Company less the value represented by the line item “Total Current Liabilities” as determined pursuant to the statement set out in Annex 1 (Pro forma Completion Accounts Statement) of the Company in each case as at the Completion Accounts Date;

 

3

 

“Agreed Terms” means, in relation to any document, that document in the terms agreed between the parties and signed or initialled for identification purposes only by or on behalf of each of the Seller and the Purchaser prior to execution of this Agreement;

 

“Balance Sheet Date” means 30 June 2011;

 

“BGL Group” means BGL Group Limited and any of its subsidiaries or subsidiary undertakings from time to time;

 

“BGL Group Loan” means the total sum including all accrued interest thereon and any related costs owed by the Company to the Seller and/or any member of the Seller’s Group in an amount of £5,487,034.40 (five million four hundred and eighty seven thousand and thirty four pounds and forty pence);

 

“BGL Group Loan Novation Agreement” means the novation agreement in the Agreed Terms to be executed on or before Completion by the Company, the Seller and the Purchaser;

 

“BGL Group Loan Novation Consideration” means the amount of £5,487,034.40 (five million four hundred and eighty seven thousand and thirty four pounds and forty pence) of which £4,900,000 (four million and nine hundred thousand pounds) is payable at Completion in accordance with Schedule 2 and of which £587,034.40 (five hundred and eighty seven thousand and thirty four pounds and forty pence) is payable on the Second Instalment Payment Date by way of in each case consideration for the transfer by novation of the rights and obligations of the Seller under the BGL Group Loan to the Purchaser;

 

“Business Day” means a day (not being a Saturday or Sunday) when banks generally are open in the City of London for the transaction of general banking business;

 

“Cash” means cash of whatever currency including cash at bank and uncleared items banked by the Company in each case as at the Completion Accounts Date less an amount of ZAR 1,500,000 as determined by the Completion Accounts pursuant to and in accordance with Schedule 7 (Completion Accounts);

 

“Co-existence Agreement” means the co-existence agreement in the Agreed Terms to be entered into on or before Completion by the Seller and the Purchaser;

 

“Company” means Fusion Outsourcing Services Proprietary Limited details of which are set out in Schedule 1 (Details of the Company);

 

“Companies Act RSA” means the Companies Act (No. 71 of 2008);

 

“Companies Act UK” means the Companies Act 2006;

 

“Company Intellectual Property” means all Intellectual Property which at the Completion Date is owned or used by the Company in connection with its business;

 

“Completion” means completion of the sale and purchase of the Shares under this Agreement in accordance with clause 4 which is to take place immediately following signing of this Agreement;

 

“Completion Accounts” means the completion accounts to be prepared and agreed and/or determined pursuant to Schedule 7 (Completion Accounts);

 

“Completion Accounts Date” means 23:59 on 31 May 2012;

 

4

 

“Completion Date” means the day on which Completion takes place;

 

“Computer Systems” means the software, hardware, microprocessors, information and communication technology and any other items that connect with any of them which in each case is used by the Company in connection with its business excluding the systems, networks and links between the Seller’s Group and the Company which are used to route calls from the United Kingdom to the Company solely in relation to services being provided to Time Warner Publishing;

 

“Contract” means any agreement or arrangement, whether conditional or unconditional, and, whether by deed, under hand, oral or otherwise, in each case whether legally binding or not;

 

“Data Room” means the electronic facility hosted by the Seller’s Lawyers for the purpose of allowing the Purchaser to undertake due diligence in respect of the Company;

 

“Data Room Information” means the documents and other information made available to the Purchaser by way of the Data Room to the extent that such documents are referred to in the Data Room index which is annexed to Schedule 8 (Data Room Index);

 

“Debts” means any debt or other liability payable to or owing by the Company by or to any third party or any member of the Seller’s Group as at the Completion Accounts Date which is in excess of the amount of the BGL Group Loan (and, for the avoidance of doubt, such debt or other liability does not include any trade debt owed in the ordinary course of business or any Taxation liability) as determined by the Completion Accounts pursuant to and in accordance with Schedule 7 (Completion Accounts);

 

“Directors” means the directors of the Company named in Schedule 1 (Details of the Company);

 

“Disclosed” means disclosed in or by the Disclosure Letter with sufficient information to enable the Purchaser to make a reasonable assessment of the nature and scope of the information disclosed, and “Disclosure” shall be construed accordingly;

 

“Disclosure Documents” means the documents listed in the schedule of documents forming part of the Disclosure Letter including (i) the Data Room Information contained on a CD; and (ii) certain documents, amongst other matters, updating some of the Data Room Information contained on another CD and two identical bundles of documents annexed or otherwise enclosed with the Disclosure Letter in relation to which the indices accompanying such bundles have been initialled by or on behalf of the Seller and the Purchaser for identification purposes and to confirm that the documents referred to in the indices have been disclosed;

 

“Disclosure Letter” means the disclosure letter having the same date as this Agreement from the Seller to the Purchaser together with the Disclosure Documents qualifying the Warranties;

 

“EHS Law” means all law applicable to the Company (whether criminal, civil or administrative), including all applicable common law, judgment, court order, statute, statutory instrument, regulation, directive, decision, by-law, treaty or, to the extent in each case legally enforceable any government circular, code of practice or any decision of any competent regulatory body in force as at the date of this Agreement and relating to EHS Matters;

 

“EHS Matters” means all or any matters relating to the pollution or protection of the Environment or harm to or the protection of human health and safety including discharge, release, leakage, escape or disposal at or prior to Completion of Hazardous Substances caused by the Seller in the conduct of the business by the Company which results in harm to the Environment;

 

5

 

“EHS Permits” means all or any permits, consents, licences, approvals, certificates, permissions, registrations, exemptions and authorisations, including any conditions thereof, required by EHS Law for the operation of the business of the Company or the condition or use of any of the Properties;

 

“Encumbrance” means any mortgage, charge, pledge, hypothecation, lien, assignment by way of security, title retention, option, right of pre-emption, right of first refusal, restriction or other third party right or interest, title retention, counterclaim or any other security right or preferential right and any agreement to give or create any of the foregoing;

 

“Environment” means the natural and man-made environment, including all or any of the following media: air (including air within natural or man-made structures above or below ground), water (including territorial, coastal and inland waters, ground water and water in drains and sewers) and land (including surface land, sub-surface land, seabed and river bed under water) and any living organisms (including man) or systems supported by those media;

 

“Financial Year” means an accounting reference period ending on 30 June in each year;

 

“First Instalment” means £100,000;

 

“FSA” means the Financial Services Authority of the United Kingdom or any successor or replacement or substitute regulatory body (including the proposed Prudential Regulatory Authority and Financial Conduct Authority);

 

“FSB” means the Financial Services Board of the Republic of South Africa established under the terms of the Financial Services Board Act (No. 97 of 1990) or any successor or replacement or substitute regulatory body;

 

“FSMA” means the Financial Services and Markets Act 2000;

 

“Hazardous Substances” means any dangerous, hazardous, toxic or flammable substances or any other matter capable of causing harm to man or any other living organism or harm or damage to the Environment;

 

“Incumbrances” means the covenants, restrictions, stipulations and other matters contained in the title and tenancy documents in relation to the Properties other than any mortgage or legal charge or any matters contained in the Data Room Information to the extent Disclosed, or any matters to the extent Disclosed which would be apparent from and revealed by the searches and enquiries of the relevant Local Authorities, Deeds Registry or like registers or agencies in the Republic of South Africa in relation to the Properties as at 30 May 2012;

 

“Insider” means the Seller and any person who is or was at the relevant time a director of the Company or any person who is connected (as defined in section 1122 Corporation Tax Act 2010) with the Seller or any such director;

 

“Intellectual Property” means all intellectual property, including patents, utility models, trade and service marks, trade or business names, domain names logos or straplines, rights in designs, copyrights, moral rights, topography rights, rights to prevent passing off or unfair competition, rights in databases, trade secrets and know-how, in all cases whether or not registered or registrable and including registrations and applications for registration of any of these and rights to apply for the same and together with all extensions and renewals of them and in each and every case all rights or forms of protection of a similar nature or having equivalent or similar effect to any of these anywhere in the world;

 

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“Key Employees” means Johann Kunz (Managing Director), Rene Nel (Associate Director Human Capital), Helande Christian (Customer Relations Manager), Karen Van Der Merwe (Senior Operations Manager), Pieter Du Preez (Associate Director — Operational Support), David O’Dwyer (Associate Director — Operations), Anel Coetzee (Senior Operations Manager — Contract Money), Nicholas Hartley (Senior Operations Manager — Prepaid), Angela Jamieson (Manager — Finance), Ferdinand Nel (Manager — Finance), Fiona Liebenberg (Manager — Training and FET College), Andrew Brown (Manager — Workforce Planning), Carla Lolbe (Manager — Quality), Marc Crawford (Manager — IT and Operations) and Leigh Ann Caarnell (Project Manager);

 

“Losses” in respect of any matter, event or circumstance includes all losses, claims, demands, actions, proceedings, damages and other payments, costs, expenses or other liabilities of any kind;

 

“Net Cash Adjustment Amount” means such amount calculated as at the Completion Accounts Date pursuant to and in accordance with the provisions of Schedule 7 (Completion Accounts) as follows: (i) Cash plus (ii) Ambition House Deposit less (iii) Debts;

 

“Net Cash Balancing Payment Date” means the date falling 10 Business Days after the date when the Completion Accounts have become final and binding on the Purchaser and the Seller pursuant to Schedule 7 (Completion Accounts);

 

“Pension Scheme” means the Fusion Outsourcing Services Proprietary Limited Corporate Selection Pension Fund;

 

“Proceedings” means any proceedings, suit or action arising out of or in connection with this Agreement;

 

“Properties” means the leasehold properties described in Schedule 6 (The Properties);

 

“Purchase Price” means the purchase price as specified in clause 3 (Purchase Price);

 

“Purchaser’s Accountants” means Grant Thornton of 6th Floor, 119 Hertzog Boulevard, Foreshore, Cape Town, 8001, South Africa;

 

“Purchaser’s Group” means any of the following from time to time: the Purchaser, its subsidiaries and subsidiary undertakings and any holding company or parent undertaking of the Purchaser and all other subsidiaries and subsidiary undertakings of any holding company or parent undertaking of the Purchaser, and “member of the Purchaser’s Group” shall be construed accordingly (and which, for the avoidance of doubt, shall include the Company following Completion);

 

“Purchaser’s Solicitors” means Irwin Mitchell LLP of 40 Holborn Viaduct, London, EC1N 2PZ;

 

“Reference Date” means 31 December 2011 (being the date of the latest management accounts of the Company);

 

“Relevant Customer” means any person to whom the Company has provided services during the period of six calendar months prior to Completion or is providing services as at Completion in either case on an arm’s length basis for remuneration (which for these purposes shall include Comair Airways Limited), such services being provided to recipients in the Republic of South Africa (save in the case of Comair Airways Limited, Centrica plc, Situp TV, Findus and Time Warner Publishing where the recipients may be located elsewhere in the world), but, for the avoidance of doubt, a “Relevant Customer” shall not include any prospective customer or any person to whom the Company has tendered to or contacted with a view to providing services but has not actually provided any services for remuneration (other than Comair Airways Limited);

 

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“Relevant Service” means the services provided by the Company as at Completion or at any time during the period of six calendar months prior to Completion (but, for the avoidance of all doubt, shall not include (a) any insurance mediation or broking or aggregator services (including any arranging and/or administering or bringing about of any insurances), or insurance underwriting activities (including effecting or carrying out insurance contracts) or (b) any business continuity or disaster recovery services carried on by any member of the Seller’s Group (but excluding for this purpose only any member of the BGL Group) in the Republic of South Africa);

 

“Second Instalment” means £4,412,965.60 (four million four hundred and twelve thousand nine hundred and sixty five pounds and sixty pence);

 

“Second Instalment Payment Date” means 31 May 2013;

 

“Second Loan Instalment” means £587,034.40 (five hundred and eighty seven thousand and thirty four pounds and forty pence);

 

“Seller’s Account” means the account (Sort Code: 30-96-60; Account Number: 1147744; IBAN: GB55LOYD30966001147744) at Lloyds TSB Bank plc;

 

“Seller’s Accountants” means KMPG Services Proprietary Limited, MSC House, 1 Mediterranean Street, Foreshore, 8001, PO Box 4609, Cape Town, 8000, South Africa;

 

“Seller’s Group” means any of the following from time to time:  the Seller, its subsidiaries and subsidiary undertakings and any holding company or parent undertaking of the Seller and all other subsidiaries and subsidiary undertakings of any holding company or parent undertaking of the Seller, and “member of the Seller’s Group” shall be construed accordingly (and which, for the avoidance of doubt, shall exclude the Company following Completion);

 

“Seller’s Lawyers” means Mayer Brown International LLP (an English limited liability partnership) whose registered office is at 201 Bishopsgate, London EC2M 3AF;

 

“Service Document” means a claim form, summons, order, judgment or other process issued out of the courts of England and Wales relating to or in connection with any Proceedings;

 

“Shares” means all of the issued shares in the stated capital of the Company details of which are set out in Schedule 1 (Details of the Company);

 

“Target Working Capital Value” means ZAR 14,000,000;

 

“Tax or Taxation” means:

 

(a)                                 taxes on gross or net income, profits or gains and all other taxes, imposts, duties (including any customs duties wherever payable), levies, and withholdings of any nature, including any excise, property, value added, sales, use, occupation, transfer, franchise and payroll taxes and social security contributions; and

 

(b)                                 any fine, penalty, surcharge, interest or other imposition relating to any tax, duty, impost, withholding or levy mentioned in paragraph (a) of this definition or to any account, record, form, return or computation required to be kept, preserved, maintained or submitted to any person for the purposes of any such tax, duty, impost, withholding or levy;

 

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“Tax Authority” means any Tax or other authority, body or person competent to impose any liability to Tax wherever situated;

 

“Tax Covenant” means Schedule 4 (Tax Covenant) of this Agreement;

 

“Tax Covenant Claim” means any claim under the Tax Covenant;

 

“Transaction Documents” means this Agreement and the documents entered into in connection with it;

 

“VAT” has the meaning given to it in Schedule 4 (Tax Covenant); and

 

“Warranties” means the warranties referred to in clause 5 (Warranties) and set out in Schedule 3 (Warranties) given and made by the Seller in favour of the Purchaser.

 

1.2                               Contents page and headings

 

In this Agreement, the contents page and headings are included for convenience only and shall not affect the interpretation or construction of this Agreement.

 

1.3                               Meaning of references

 

In this Agreement, unless the context requires otherwise, any reference to:

 

(a)                                 this Agreement includes the Background and Schedules, which form part of this Agreement for all purposes;

 

(b)                                 the Background is to the statements about the background to this Agreement made above, a clause or to a Schedule is, as the case may be, to a clause of or a Schedule to this Agreement and any reference in a Schedule to a paragraph is to a paragraph of that Schedule;

 

(c)                                  a company is to any company, corporation or other body corporate wherever and however incorporated or established;

 

(d)                                 a document is to that document as supplemented, otherwise amended, replaced or novated from time to time;

 

(e)                                  any English statutory provision or English legal term for any action, remedy, method of judicial proceeding, document, legal status, court, official or other legal concept or thing shall in respect of any jurisdiction other than England (including the Republic of South Africa) be deemed to include what most nearly approximates in that jurisdiction to the English statutory provision or English legal term;

 

(f)                                   the masculine, feminine or neuter gender respectively includes the other genders and any reference to the singular includes the plural (and vice versa);

 

(g)                                  including means “including without limitation” (with related words such as “includes” being construed accordingly), in particular means “in particular but without limitation” and other general words shall not be given a restrictive interpretation by reason of their being preceded or followed by words indicating a particular class of acts, matters or things;

 

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(h)                                 indemnify and to indemnifying any person against any Losses by reference to a matter, event or circumstance includes indemnifying and keeping him indemnified against all Losses from time to time made, suffered or incurred by that person as a direct result of that matter, event or circumstance;

 

(i)                                     a party or the parties is to a party or the parties (as the case may be) to this Agreement and shall include any permitted assignees or successors of a party;

 

(j)                                    a person includes any individual, firm, company, corporation, government, state or agency of state or any association, trust or partnership (whether or not having a separate legal personality);

 

(k)                                 a person includes a reference to that person’s legal personal representatives and successors;

 

(l)                                     pounds, sterling or £ is to the lawful currency from time to time of the United Kingdom;

 

(m)                             Rand or ZAR is to the lawful currency from time to time of the Republic of South Africa;

 

(n)                                 a statute or statutory provision includes any consolidation or re-enactment, modification or replacement of the same and any subordinate legislation in force under any of the same from time to time except to the extent that a consolidation, re-enactment, modification or replacement which took effect after the date of this Agreement would increase the liability of any party under this Agreement;

 

(o)                                 a time of the day is to London time and references to a day are to a period of 24 hours running from midnight to midnight; and

 

(p)                                 writing shall include any modes of reproducing words in a legible and non-transitory form.

 

1.4                               Companies Act definitions

 

In this Agreement, the words and expressions “accounting reference period”, “body corporate”, “holding company”, “parent undertaking”, “subsidiary” and “subsidiary undertaking” have the meanings given to them in the Companies Act UK.

 

2.                                      AGREEMENT TO SELL AND PURCHASE

 

2.1                               Sale and purchase

 

The Seller shall sell and the Purchaser shall purchase the entire legal, registered and beneficial ownership in the Shares.  The Shares shall be sold free of any Encumbrance and with all rights attached or accruing to them at or after Completion.

 

3.                                      PURCHASE PRICE

 

3.1                               Purchase Price

 

The final consideration for the sale of the Shares (the “Purchase Price”) shall consist of:

 

(a)                                 the First Instalment payable at Completion in accordance with clause 3.4 and as provided for in clause 4.2 and Schedule 2; and

 

(b)                                 plus or minus the Net Cash Adjustment Amount, such amount to be dealt with in accordance with clause 3.2 (Net Cash Adjustment Amount); and

 

(c)                                  plus or minus the adjustment (if any) following calculation of the Actual Working Capital Value referred to in clause 3.3, such amount to be dealt with in accordance with clause 3.3 (Actual Working Capital Value); and

 

(d)                                 subject to clause 3.4(b), the Second Instalment (including accrued interest thereon in accordance with clause 3.7) payable on the Second Instalment Payment Date in accordance with clause 3.4.

 

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The Purchase Price shall be adopted for all tax reporting and accounting purposes by the parties (and if, for the purpose of determining the Purchase Price, any amount in ZAR is to be translated into £, then this shall be done by reference to the closing mid market rate for 31 May 2012 as reported in the London edition of the Financial Times).

 

3.2                               Net Cash Adjustment Amount

 

(a)                                 If the Net Cash Adjustment Amount is a positive number, the Purchaser shall pay this amount by way of electronic transfer for same day value to the Seller’s Account on or before the Net Cash Balancing Payment Date.

 

(b)                                 If the Net Cash Adjustment Amount is a negative number, the Seller shall pay this amount by way of electronic transfer for same day value to a bank account of the Purchaser as notified to the Seller no later than two Business Days prior to the Net Cash Balancing Payment Date and subject thereto on or before the Net Cash Balancing Payment Date.

 

3.3                               Actual Working Capital Value

 

(a)                                 If the Actual Working Capital Value is greater than an amount equal to the Target Working Capital Value plus the sum of ZAR 250,000, the Purchaser shall pay the amount of the difference by way of electronic transfer for same day value to the Seller’s Account on or before the Net Cash Balancing Payment Date.

 

(b)                                 If the Actual Working Capital Value is less than an amount equal to the Target Working Capital Value less the sum of ZAR 250,000, the Seller shall pay the amount of the difference by way of electronic transfer for same day value to a bank account of the Purchaser as notified to the Seller no later than two Business Days prior to the Net Cash Balancing Payment Date and subject thereto on or before the Net Cash Balancing Payment Date.

 

(c)                                  For the avoidance of all doubt, if the Actual Working Capital Value is within a range of either up to ZAR 250,000 below or above the Target Working Capital Value, then no adjustment shall be made.

 

3.4                               Payments

 

(a)                                 The First Instalment, the Second Instalment and the Second Loan Instalment shall be payable by way of electronic transfer for same day value to the Seller’s Account or to such other bank account as may be notified to the Purchaser in writing by or on behalf of the Seller no later than two Business Days prior to Completion in the case of the First Instalment or, in the case of the Second Instalment and the Second Loan Instalment, no later than two Business Days prior to the Second Instalment Payment Date unless the Seller and the Purchaser shall agree in writing another payment mechanism.

 

(b)                                 Without prejudice to clause 21, the Second Instalment and the Second Loan Instalment may be subject to adjustment subject to and in accordance with the provisions of Schedule 9 (Second Instalment Adjustment Mechanism) only.

 

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3.5                               Timing of payments

 

The First Instalment shall be payable to the Seller at Completion and the Second Instalment and the Second Loan Instalment shall be payable no later than the Second Instalment Payment Date.

 

3.6                               Payment pursuant to claim

 

Subject at all times to any relevant laws, if any payment is made by the Seller to the Purchaser pursuant to a claim made by the Purchaser for any breach of this Agreement or otherwise pursuant to this Agreement including under the Tax Covenant, the payment shall be deemed to be made by way of reduction of the Purchase Price and the Purchase Price shall accordingly be deemed to have been reduced by the amount of that payment.

 

3.7                               Interest on Second Instalment and Second Loan Instalment

 

Interest on the Second Instalment and the Second Loan Instalment shall in each case accrue and be calculated (but not compounded) on a daily basis, both before and after judgment, at the rate of 3% per annum above the base rate from time to time of Barclays Bank plc in respect of the period commencing on the Completion Date and ending on and including the Second Instalment Payment Date or, if earlier, the date on which the Second Instalment is paid.  The Seller acknowledges that it is not entitled to and excludes any right it has or may have to make any claim for interest under the Late Payment of Commercial Debts (Interest) Act 1998.

 

3.8                               Interest on overdue amounts

 

Interest shall be payable by a party on any money which is not paid by it to the other party under this Agreement by the due date for its payment.  That interest shall accrue and be calculated (but not compounded) on a daily basis, both before and after any judgment, at the rate of 3% per annum above the base rate from time to time of Barclays Bank plc for the period from the due date for its payment until the date on which it is actually paid. It shall be payable on demand to the other party’s bank account or to such other bank account as may be notified by the other party in writing at the time of demand.  Each party acknowledges that it is not entitled to and excludes any right it has or may have to make any claim for interest under the Late Payment of Commercial Debts (Interest) Act 1998.

 

3.9                               No deductions etc.

 

(a)                                 All sums payable by the Seller or the Purchaser (each a “Paying Party”) to the Purchaser or, as the case may be, to the Seller (each a “Recipient”) under this Agreement shall be paid free and clear of all deductions or withholdings whatsoever, save only as may be required by law.

 

(b)                                 If any deductions or withholdings are required by law to be made from any of the sums payable as mentioned in clause 3.9(a) at the time that payment is due, the Paying Party shall pay the deduction or withholding as is required by law to be made from such sum to the relevant authority pursuant to the relevant law and shall provide the Recipient with such certificates or other documentation which shows the amount or the deduction or withholding paid to the relevant authority, but the Paying Party shall not be obliged to pay to the Recipient such sum as shall equal such deduction or withholding.

 

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4.                                      COMPLETION

 

4.1                               Completion

 

Completion shall take place at the offices of Edward Nathan Sonnenbergs at 1 North Wharf Square, Loop Street, Foreshore in Cape Town, South Africa on the Completion Date.

 

4.2                               Completion arrangements

 

At Completion, the Seller and the Purchaser shall do those things listed in Schedule 2 (Completion Arrangements).  The Purchaser shall not be obliged to complete the purchase of any of the Shares unless the sale and purchase of all the Shares is completed simultaneously.

 

4.3                               Books and records

 

The Seller shall procure that all material books and records in the possession or under the control of the Company shall be made available to the Purchaser following Completion at the main premises of the Company in Cape Town, South Africa including the following:

 

(a)                                 all deeds and documents relating to the title of the Company to each of the Properties;

 

(b)                                 all cheque books in current use of the Company;

 

(c)                                  all papers, books, records, keys, credit cards and other property (if any) of the Company which are in the possession or under the control of the Seller, any other member of the Seller’s Group (other than the Company) or any other person who resigns as an officer of the Company in accordance with Schedule 2; and

 

(d)                                 details of bank signatories in respect of the bank account of the Company.

 

4.4                               Pre-Completion

 

Save for anything specifically approved in writing for and on behalf of the Purchaser in respect of the period from 31 May 2012 up to the time immediately prior to Completion, the Seller hereby agrees and acknowledges:

 

(a)                                 that the Company has not:

 

(i)                                     paid any dividend, or made any other distribution, other return of capital or payment to a third party other than (a) payments in the ordinary course of its business to employees or (b) subject to clause 4.4(a)(i)(a) any payment (including any operating expenses payment) in the ordinary course of business in respect of any item which does not exceed ZAR 25,000;

 

(ii)                                  incurred any capital expenditure (other than in the ordinary course of business including to fulfil any legal obligations pursuant to any agreement or arrangement with any customer on any single item which does not exceed ZAR 25,000 or items having an aggregate capital expenditure which do not exceed ZAR 750,000);

 

(iii)                               borrowed any sum of money; and

 

(iv)                              waived or forgiven any debt or amount owing to the Company (other than trading debts or amounts in the ordinary course of business); and

 

(b)                                 the Company has:

 

(i)                                     carried on its business in the ordinary course so as to maintain that business as a going concern; and

 

(ii)                                  taken all reasonable steps to preserve and protect its assets and minimise its liabilities;

 

(c)                                  the Seller shall indemnify and keep the Purchaser indemnified against all Losses incurred by the Purchaser and/or the Company as a direct result of any breach by the Seller of clause 4.4(a) or clause 4.4(b); and

 

(d)                                 the transfer of the sum of ZAR 6 million to the Seller, being the redemption proceeds of the preference shares in the capital of the Company, is in full and final settlement of all sums or other liabilities owed or owing by the Company in connection with the redemption of such shares and/or any rights or benefits of the Seller and/or any other member of the Seller’s Group in respect of such shares and the Seller hereby waives and has waived any right to interest on the redemption of such shares which it and/or any other member of the Seller’s Group had, has or may have in the future.

 

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4.5                               Post-Completion

 

Subject to the Contract between the Company and Telkom SA Limited dated on or around 1 June 2010 (“Telkom Contract”) continuing to remain valid and binding, the Seller agrees to continue to provide the support required to enable the link between itself and the Company to remain in place until the expiry of the aforementioned contract or 1 June 2012 whichever is earlier.  The Seller shall not be liable for any failure to provide the support required to enable such link to remain in place to the extent such failure is caused by the Company or Telkom SA Limited breaching any of the terms of the Telkom Contract.

 

4.6                               Seller’s indemnity

 

The Seller shall indemnify and keep indemnified:

 

(a)                                 the Purchaser and/or the Company from and against any and all costs (including costs of enforcement), expenses, liabilities, losses, claims, demands, proceedings and damages which the Purchaser and/or the Company directly incur or suffer in any way whatsoever as a result of the redemption by the Company of the 6,000,000 redeemable non-cumulative non-convertible preference shares of R1.00, for an aggregate subscription price of R6,000,000, not being in compliance with any applicable law of the Republic of South Africa or not being in accordance with the terms of the relevant constitutional documents of the Company; and

 

(b)                                 the Purchaser and/or the Company from and against any and all costs (including the costs of enforcement), expenses, liabilities, losses, claims, demands, proceedings and damages which the Purchaser and/or the Company directly incur or suffer  in any way whatsoever as a result of not obtaining any approval from the South African Reserve Bank in respect of the repayment by the Company to the Seller of a sum of ZAR 1.5 million of loan funding (which was advanced to the Company by the Seller subsequent to the submission of the Exchange Control application) or the amount of the BGL Group Loan (notwithstanding that on 4 June 2012 First National Bank (Cape Town) (“First National”) telephoned Edward Nathan Sonnenberges Inc. of Johannesburg to advise that the sum of ZAR 1.5million be repaid by the Company to the Seller in order to reinstate the loan balance to the amount as reflected in the Exchange Control application received by First National)

 

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provided that in (a) and (b):

 

(i)                                     except to the extent specifically required to comply with any applicable law or any legally binding obligation of the Company which existed prior to Completion (to the extent  such obligation is extant following Completion), the Purchaser shall not, and shall procure that any relevant member of the Purchaser’s Group shall not, and shall not authorise any third party to, actively initiate  on an unsolicited basis the taking of any steps to trigger any claim pursuant to this clause 4.6 (which shall include raising on an unsolicited basis any enquiry, or soliciting or encouraging an investigation, in connection with any matter referred to in this clause 4.6); and

 

(ii)                                  neither the Purchaser nor any member of the Purchaser’s Group shall, nor shall they authorise any third party to, accept or pay or compromise any claim made by or proceeding brought by any third party in relation to any matter referred to in this clause 4.6, nor make any admission in respect of it, without in each case first obtaining the prior written consent of the Seller (such consent not to be unreasonably withheld or delayed); and

 

(iii)                               the Purchaser shall, and shall procure that any relevant member of the Purchaser’s Group shall, (except to the extent specifically not permitted by any applicable law) keep the Seller informed of any developments  of which it is aware and shall take into account any reasonable comments of the Seller in connection with any claim or threatened claim in relation to any matter referred to in this clause 4.6; and

 

(iv)                              this clause is subject at all times to paragraph 6 of Schedule 5 (No double recovery).

 

5.                                      WARRANTIES

 

5.1                               Warranties

 

Subject to clauses 5.2 and 5.3, as at the date of this Agreement, the Seller warrants to the Purchaser in terms of the Warranties.

 

5.2                               Limitations on claims

 

Subject at all times to clause 5.7, the parties agree that the liability of the Seller in respect of any claim relating to breach of any of the Warranties shall be limited as set out in Schedule 5 (Limitations on Claims).

 

5.3                              Certain Warranties specific

 

The only Warranties given in respect of Tax are those set out in paragraph 18 of Schedule 3 (Warranties) and the other Warranties shall be deemed not to be given in relation to Tax.

 

5.4                               No right of rescission

 

(a)                                 Save in relation to any fraud on the part of any party and subject to clause 5.4(b), the sole remedy of any party for any breach of this Agreement (including the sole remedy of the Purchaser for any breach of the Warranties) shall be damages and each party acknowledges that it shall have no right to rescind this Agreement after Completion in any circumstances and irrevocably waives any other remedies it may have in relation to a breach of this Agreement.

 

(b)                                 Nothing contained in this Agreement shall prevent any party from seeking the remedies of injunction, specific performance or other equitable relief for any breach of this Agreement.

 

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5.5                               Meaning of “so far as the Seller is aware”

 

If any of the Warranties are expressed to be given “so far as the Seller is aware” or “to the best of the knowledge information and belief of the Seller”, or words to that effect, that statement shall be deemed to refer to the actual knowledge of the following persons having made reasonable enquiries into the subject matter of the Warranty or Warranties for which they have been allocated responsibility as follows:  (i) Otto Van Der Walt, Johannes Kunz, David Lundholm, Pieter du Preez and Ian Leech in respect of each of the Warranties of Schedule 3 (Warranties) (but excluding in the case of Ian Leech only the Warranty at paragraph 5.4 (Management Accounts) of Schedule 3 and excluding in the case of Pieter Du Preez the Warranties at paragraphs 2.1 and 2.2 (The Company), paragraphs 3.3 and 3.4 (Ownership of Capital), paragraphs 5.1 up to and including 5.5 (Information/Accounting Information), paragraph 6.1 (Assets), paragraph 15 (Employees), paragraphs 16.5 and 16.6 (Pensions), and paragraph 18 (Taxation) of Schedule 3), (ii) Dean Freed in respect of the Warranties at paragraph 14 (Computer System) of Schedule 3 (Warranties), (iii) Marc Crawford in respect of the Warranties at paragraphs 13 ( Company Intellectual Property) and paragraph 14 (Computer System) of Schedule 3 (Warranties), (iv) Rene Nel in respect of the Warranties at paragraphs 15 (Employees) and paragraph 19 (Litigation) of Schedule 3 (Warranties), (v) Andrew Strand in respect of the Warranties at paragraph 5 (Information/Accounting Information) and paragraph 18 (Taxation) of Schedule 3 (Warranties) and (vi) Lucy Sinfield in respect of paragraph 12 (Contracts) of Schedule 3 (Warranties), and the Seller shall be deemed not to have any other actual, imputed or constructive knowledge.

 

5.6                               Waiver

 

Each of the Seller and the Seller Guarantor irrevocably and unconditionally waives and shall procure that any member of the Seller’s Group shall waive and may not enforce any right which the Seller and/or the Seller Guarantor may have and shall procure that each member of the Seller’s Group may not enforce any right which that member of the Seller’s Group may have in each case against the Company or any director or employee of the Company to the extent such right relates to any information supplied or given by any such director, officer or employee of the Company for the purpose of assisting the Seller to give any of the Warranties or agreeing any statement in the Disclosure Letter or any term in this Agreement or any other Transaction Document except in circumstances of fraud or deliberate or wilful misconduct or deliberate or wilful omission or deliberate or wilful non-disclosure on the part of any such director, officer or employee.

 

5.7                               Fraud etc

 

Notwithstanding any other provision of this Agreement, nothing in Schedule 5 shall apply to exclude or limit the liability of the Seller to the extent that any claim relating to breach of any of the Warranties or any claim under the Tax Covenant arises by reason of fraud or where there has been deliberate or wilful misconduct or deliberate or wilful omission or deliberate or wilful non-disclosure on the part of the Seller.

 

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5.8                               Disclosure Letter

 

The Warranties are qualified by all facts, matters and information to the extent Disclosed by way of the Disclosure Letter.  In relation to the Properties only, the provisions of section 6(2) of the Law of Property (Miscellaneous Provisions) Act 1994 are excluded.

 

6.                                      TAX COVENANT

 

6.1                               Terms

 

The Seller and the Purchaser hereby agree to and acknowledge the terms of the Tax Covenant.

 

6.2                               Liability

 

The liability of the Seller under the Tax Covenant shall subject to clause 5.7 be limited where specifically provided for by the express terms of Schedule 4 (Tax Covenant) and Schedule 5 (Limitations on Claims).

 

7.                                      PURCHASER’S WARRANTIES

 

As at the date of this Agreement, the Purchaser warrants to the Seller that:

 

(a)                                 the Purchaser has full power and authority, without requiring or obtaining the consent of its shareholders or any other person, authority or body (excluding any member of the Seller’s Group), to enter into and perform the Transaction Documents to which it is a party which will, when executed, constitute valid and binding obligations on the Purchaser in accordance with their respective terms;

 

(b)                                 the Purchaser is entering into this Agreement on its own behalf and not on behalf of any other person;

 

(c)                                  the execution and delivery of, and the performance by the Purchaser of its obligations under, the Transaction Documents will not:

 

(i)                                     result in a breach of any provision of its memorandum or articles of association; or

 

(ii)                                  result in a breach of any agreement, licence or other instrument, or of any order, judgment or decree of any court or governmental agency or regulatory body to which the Purchaser is a party or by which the Purchaser is bound or of any applicable law to which the Purchaser is subject; and

 

(d)                                 save as provided in this Agreement all consents, permissions, approvals and agreements of shareholders of the Purchaser or any other third parties (excluding any member of the Seller’s Group) which are necessary for the Purchaser to obtain in order to enter into and perform the Transaction Documents in accordance with their respective terms have been unconditionally obtained in writing.

 

8.                                     GUARANTEES

 

8.1                               Release of Seller guarantees

 

The Purchaser undertakes to the Seller (for itself and as trustee for any member of the Seller’s Group) that it shall use its reasonable endeavours to procure the release as soon as is reasonably practicable of the Seller or any member of the Seller’s Group from any obligations or liabilities it/they may have in respect of any guarantee or indemnity given for the benefit of the Company of which it is aware (but excluding, for the avoidance of doubt, any guarantee or indemnity contained in this Agreement) and pending that release shall indemnify and keep the Seller or any relevant member of the Seller’s Group indemnified against any liability arising under any such guarantee or indemnity.

 

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8.2                               Release of Company Guarantees

 

The Seller undertakes to the Purchaser (for itself and as trustee for any member of the Purchaser’s Group) that it shall use its reasonable endeavours to procure the release as soon as is reasonably practicable of the Company from any obligations or liabilities which the Company may have in respect of any guarantee or indemnity given for the benefit of any  member of the Seller’s Group of which it is aware (but excluding, for the avoidance of doubt, any guarantee or indemnity contained in this Agreement) and pending that release shall indemnify and keep the Purchaser or any relevant member of the Purchaser’s Group indemnified against any liability arising under any such guarantee or indemnity.

 

9.                                      CONFIDENTIALITY AND ANNOUNCEMENTS

 

9.1                               Confidentiality

 

Subject to clause 9.2, each party shall treat as strictly confidential:

 

(a)                                 the existence and provisions of the Transaction Documents;

 

(b)                                 the negotiations relating to this Agreement; and

 

(c)                                  all information received or obtained as a result of entering into or performing this Agreement which relates to any other party or the business, financial or other affairs of any other party.

 

9.2                               Exceptions

 

Any party may disclose information referred to in clause 9.1 (including by way of press or public announcement or the issue of a circular) which would otherwise be confidential if and to the extent that the disclosure is:

 

(a)                                 approved by the Seller and the Purchaser in writing in advance;

 

(b)                                 required by the law of any relevant jurisdiction or by a court of competent jurisdiction;

 

(c)                                  lawfully required by the rules of any securities or investment exchange or regulatory or governmental body to which any party is subject wherever situated, including the London Stock Exchange, the UK Listing Authority, the Takeover Panel, the US Securities and Exchange Commission or the New York Stock Exchange, whether or not the requirement for disclosure has the force of law;

 

(d)                                 required to vest in that party the full benefit of this Agreement;

 

(e)                                  made to the professional advisers, auditors or bankers of that party or of any other member of the Seller’s Group (in the case of the Seller) or of any other member of the Purchaser’s Group (in the case of the Purchaser) and the party making the disclosure pursuant to this clause 9.2(e) shall procure that those persons referred to in this clause 9.2(e) to whom disclosure is made comply with clause 9.1 as if they were parties to this Agreement;

 

(f)                                   made to the officers or employees of that party or of any other member of the Seller's Group (in the case of the Seller) or of any other member of the Purchaser's Group (in the case of the Purchaser) who need to know the information for the purposes of the transactions effected or contemplated by this Agreement and the party making the disclosure pursuant to this clause 9.2(f) shall procure that those persons referred to in this clause 9.2(f) to whom disclosure is made comply with clause 9.1 as if they were parties to this Agreement;

 

(g)                                  of information that has already come into the public domain through no fault of that party; or

 

(h)                                 of information of the kind referred to in clause 9.1(c) which is already lawfully in the possession of that party as evidenced by its or its professional advisers' written records and which was not acquired directly or indirectly from the other party to whom it relates and in respect of which that party is not subject to any obligation of confidence or confidentiality undertaking in favour of any third party,

 

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provided that any information disclosed pursuant to clause 9.2 (b) or (c) shall be disclosed only after notice to the other parties (save where such notice is wholly impracticable or prohibited by law) and, where notice is given, to the extent reasonably practicable the disclosing party shall take reasonable steps to consult and co-operate with the other parties regarding the content, timing and manner of that disclosure provided that neither the Seller nor any member of the Seller’s Group shall be required to give notice to or consult with the Purchaser in connection with the proposed termination of the appointed representative arrangement between any relevant member of the Seller’s Group and the Company.

 

9.3          No limit in time

 

The restrictions contained in this clause 9 shall continue to apply following Completion for a period of six calendar years following Completion.

 

9.4          Notices to customers etc.

 

Nothing in this Agreement will prohibit the Seller (or any authorised representative on its behalf) or the Purchaser from making or sending after Completion any announcement to a customer, client or supplier of the Company informing it that the Purchaser has purchased the Shares on terms which have been approved in writing by the Purchaser (such approval not to be unreasonably withheld or delayed).

 

10.          COSTS

 

10.1        Each party responsible for own costs

 

Except to the extent this Agreement expressly provides otherwise, each party shall be responsible for all the costs, charges and expenses incurred by it in connection with and incidental to the negotiation, preparation and completion of this Agreement, the other documents referred to in this Agreement and the sale and purchase under this Agreement.

 

10.2        Purchaser responsible for transfer tax

 

The Purchaser shall promptly pay the securities transfer tax (and any associated interest and penalties) payable in respect of the transfer by the Seller to the Purchaser of the Shares pursuant to this Agreement (and shall indemnify the Seller in respect of the same to the extent that the Seller or any member of the Seller’s Group incurs any liability in connection with the same).

 

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11.          WNS GUARANTEE

 

11.1        Guarantee

 

In consideration of the entry of the Seller into this Agreement, the Guarantor irrevocably and unconditionally as primary obligor undertakes and guarantees to the Seller on demand to perform all of the Purchaser’s or, to procure the performance of all of the Purchaser’s, obligations under the Transaction Documents (subject to and in accordance with the terms of the Transaction Documents) including the due and punctual payment of all sums now or subsequently payable by the Purchaser to the Seller under this Agreement.

 

11.2        Guarantor warranties

 

The Guarantor warrants to the Seller that:

 

(a)           the Guarantor is a company in good standing duly incorporated and registered under the law of its jurisdiction of incorporation;

 

(b)           the Guarantor has full power and authority, without requiring or obtaining the consent of its shareholders or any other person, authority or body (excluding any member of the Seller’s Group), to enter into and perform this Agreement and any other Transaction Documents to which it is a party which will, when executed, constitute valid and binding obligations on it in accordance with their respective terms;

 

(c)           the Guarantor has taken or shall have taken by Completion all corporate action required by it to authorise it to enter into and perform each Transaction Document to which it is a party;

 

(d)           the Guarantor is entering into this Agreement on its own behalf and not on behalf of any other person;

 

(e)           the execution and delivery of, and the performance by the Guarantor of its obligations under, this Agreement and any other Transaction Documents will not:

 

(i)            result in a breach of any provision of its memorandum or articles of association; or

 

(ii)           result in a breach of any agreement, licence or other instrument, or of any order, judgment or decree of any court or governmental agency or regulatory body to which the Guarantor is a party or by which the Guarantor is bound or of any applicable law to which the Guarantor is subject; and

 

(f)            save as provided in this Agreement all consents, permissions, approvals and agreements of shareholders of the Guarantor or any other third parties (excluding any member of the Seller’s Group) which are necessary for the Guarantor to obtain in order to enter into and perform this Agreement and any other Transaction Documents in accordance with their respective terms have been unconditionally obtained in writing.

 

11.3        Purchaser default

 

If the Purchaser defaults in the performance of any obligations under any of the Transaction Documents, the Guarantor shall on demand perform (or procure the performance of) that obligation, so that the same benefits shall be conferred on the Seller as it would have received if the Purchaser had duly performed that obligation.

 

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11.4        Obligations continuing

 

The obligations and liabilities of the Guarantor in this clause 11 are continuing obligations and liabilities which shall remain in force until all the obligations of the Purchaser under the Transaction Documents have been performed.

 

11.5        Obligations not affected

 

The obligations of the Guarantor under this clause 11 shall not be affected by anything which, but for this clause 11, might operate to release or otherwise exonerate it from or affect its obligations, including:

 

(a)           any time, indulgence, waiver or consent given at any time to the Purchaser or another person;

 

(b)           a compromise or release of or abstention from perfecting or enforcing any rights or remedies against the Purchaser or another person;

 

(c)           a legal limitation, disability, incapacity or other circumstances relating to the Purchaser or another person;

 

(d)           an amendment to or variation of the terms of any of the Transaction Documents or another document referred to in this Agreement;

 

(e)           an irregularity, unenforceability or invalidity of the obligations of a party to any of the Transaction Documents; and

 

(f)            the dissolution, amalgamation, reconstruction or insolvency of the Purchaser.

 

11.6        Enforcement of guarantee

 

The obligations and liabilities contained in this clause 11 may be enforced without the Seller first taking any action against the Purchaser.

 

11.7        Demands of the Seller

 

The Seller may make one or more demands under this clause 11.

 

12.          SELLER GUARANTEE

 

12.1        Guarantee

 

In consideration of the entry of the Purchaser into this Agreement, the Seller Guarantor irrevocably and unconditionally as primary obligor undertakes and guarantees to the Purchaser on demand to perform all of the Seller’s, or to procure the performance of all of the Seller’s, obligations under the Transaction Documents (subject to and in accordance with the terms of the Transaction Documents) including the due and punctual payment of all sums now or subsequently payable by the Seller to the Purchaser under this Agreement.

 

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12.2        Seller Guarantor warranties

 

The Seller Guarantor warrants to the Purchaser that:

 

(a)           the Seller Guarantor is a company in good standing duly incorporated and registered under the law of its jurisdiction of incorporation;

 

(b)           the Seller Guarantor has full power and authority, without requiring or obtaining the consent of its shareholders or any other person, authority or body (excluding any member of the Purchaser’s Group), to enter into and perform this Agreement and any other Transaction Documents to which it is a party which will, when executed, constitute valid and binding obligations on it in accordance with their respective terms;

 

(c)           the Seller Guarantor has taken or shall have taken by Completion all corporate action required by it to authorise it to enter into and perform each Transaction Document to which it is a party;

 

(d)           the Seller Guarantor is entering into this Agreement on its own behalf and not on behalf of any other person;

 

(e)           the execution and delivery of, and the performance by the Seller Guarantor of its obligations under, this Agreement and any other Transaction Documents will not:

 

(i)            result in a breach of any provision of its memorandum or articles of association; or

 

(ii)           result in a breach of any agreement, licence or other instrument, or of any order, judgment or decree of any court or governmental agency or regulatory body to which the Seller Guarantor is a party or by which the Seller Guarantor is bound or of any applicable law to which the Seller Guarantor is subject; and

 

(f)            save as provided in this Agreement all consents, permissions, approvals and agreements of shareholders of the Seller Guarantor or any other third parties (excluding any member of the Purchaser’s Group) which are necessary for the Seller Guarantor to obtain in order to enter into and perform this Agreement and any other Transaction Documents in accordance with their respective terms have been unconditionally obtained in writing.

 

12.3        Seller default

 

If the Seller defaults in the performance of any obligations under any of the Transaction Documents, the Seller Guarantor shall on demand perform (or procure the performance of) that obligation, so that the same benefits shall be conferred on the Purchaser as it would have received if the Seller had duly performed that obligation.

 

12.4        Obligations continuing

 

The obligations and liabilities of the Seller Guarantor in this clause 12 are continuing obligations and liabilities which shall remain in force until all the obligations of the Seller under the Transaction Documents have been performed.

 

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12.5        Obligations not affected

 

The obligations of the Seller Guarantor under this clause 12 shall not be affected by anything which, but for this clause 12, might operate to release or otherwise exonerate it from or affect its obligations, including:

 

(a)           any time, indulgence, waiver or consent given at any time to the Seller or another person;

 

(b)           a compromise or release of or abstention from perfecting or enforcing any rights or remedies against the Seller or another person;

 

(c)           a legal limitation, disability, incapacity or other circumstances relating to the Seller or another person;

 

(d)           an amendment to or variation of the terms of any of the Transaction Documents or another document referred to in this Agreement;

 

(e)           an irregularity, unenforceability or invalidity of the obligations of a party to any of the Transaction Documents; and

 

(f)            the dissolution, amalgamation, reconstruction or insolvency of the Seller.

 

12.6        Enforcement of guarantee

 

The obligations and liabilities contained in this clause 12 may be enforced without the Purchaser first taking any action against the Seller.

 

12.7        Demands of the Purchaser

 

The Purchaser may make one or more demands under this clause 12.

 

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13.          RESTRICTIONS ON ACTIVITIES OF THE SELLER

 

13.1        Restrictions

 

In consideration of the Purchaser entering into this Agreement, the Seller undertakes to the Purchaser and the Company that the Seller will not and will procure that no member of the BGL Group will during the period of 24 calendar months from 31 May 2012 up to and including 31 May 2014 and no member of the Seller’s Group (which, for the purpose of this clause 13.1 only, shall exclude the BGL Group) will during the period of 12 calendar months from 31 May 2012 up to and including 31 May 2013 (in either case whether alone or in conjunction with or on behalf of another person and whether directly or indirectly) without, in either case, the prior written consent of the Purchaser:

 

(a)           carry on or be engaged, concerned or interested within the Republic of South Africa in any business which provides services which are in competition with the Relevant Services;

 

(b)           carry on or be engaged, concerned or interested elsewhere in the world in any business to the extent it provides services which are the same as or substantially similar to  Relevant Services to any Relevant Customer, including Comair Airways Limited, Centrica Plc, Situp TV, Vodacom, Findus and Time Warner Publishing;

 

(c)           canvass, solicit or approach, or cause to be canvassed, solicited or approached, either of the following Relevant Customers, Standard Bank or Direct Axis, with regard to the provision of business continuity or disaster recovery or similar services in the Republic of South Africa;

 

(d)           canvass, solicit or approach, or cause to be canvassed, solicited or approached, any Relevant Customer for the sale or supply of services which are in competition with the Relevant Services or deal or contract with any Relevant Customer in relation to the sale or supply of services which are in competition with the Relevant Services;

 

(e)           interfere or seek to interfere with the continuance of the provision of services by the Company to any Relevant Customer if that interference causes or would cause such Relevant Customer to cease receiving, or materially reduce its receipt of, Relevant Services;

 

(f)            interfere or seek to interfere with the continuance of the provision of services or goods by suppliers to the Company (who have been supplying services or goods to the Company at any time during the period of six calendar months preceding Completion) if that interference causes or would cause any such supplier to cease providing, or materially reduce its provision of, services or goods to the Company; or

 

(g)           directly or indirectly solicit or entice away or endeavour to solicit or entice away from the Company or employ or endeavour to employ any of its employees (being any director, officer or employee employed in a managerial, supervisory, technical or sales capacity by the Company at Completion where that person is in possession of Confidential Information and would be in a position to exploit the Company’s trade or customer connections) including any of the Key Employees except that this shall not prevent the Seller or any member of the Seller’s Group making, or any such director, officer or employee responding to, public recruitment advertisements of a generic nature and the relevant director, officer or employee thereafter being offered employment by the Seller or any member of the Seller’s Group and the director, officer, or employee accepting such offer, provided that (i) the Seller or any member of the Seller’s Group has not directed such advertisement at any such director, officer or employee, and (ii) in the case of Johann Kunz, Rene Nel, Pieter Du Preez, David O’Dwyer, Karen Van Der Merwe and Marc Crawford only, no offer of employment shall be made by the Seller or a member of the BGL Group or a member of the Seller’s Group (as the case may be) if such offer of employment (if accepted) would result in any of the aforementioned commencing employment with, in the case of any member of the BGL Group, on or before 31 May 2014 and, in the case of any member of the Seller’s Group, on or before 31 May 2013

 

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Provided that notwithstanding any of the foregoing:

 

(i)            nothing contained in clause 13.1 shall prevent or prohibit the Seller or any member of the BGL Group or the Seller’s Group (either directly or indirectly) from being the holder of not more than 10% of any class of shares of any company traded on any recognised stock or investment exchange;

 

(ii)           nothing contained in clause 13.1(a) shall prevent or prohibit the Seller or any member of the BGL Group or the Seller’s Group (either directly or directly) from acquiring either the entire issued share capital of a company or the assets and liabilities of a business which provides services in the Republic of South Africa which compete with the Relevant Services provided that  such services are not a material part of such acquired company or business (as relevant), where for these purposes only “material” shall mean that the services which compete with the Relevant Services provided by the acquired company or business in the Republic of South Africa shall represent more than 10% of such acquired company’s or business’ turnover and in circumstances where the services which compete with the Relevant Services are material, then the Seller shall use its reasonable endeavours to effect or procure a sale of the business providing the services which compete with the Relevant Services within 12 months of such business being acquired provided that this obligation shall not require the directors (or equivalent in any relevant jurisdiction) of the relevant seller to sell the business at a discount of more than 10% to net asset value or fair market value or to take any step or  action which may result in a breach by the directors (or equivalent in any relevant jurisdiction) of any statutory or fiduciary duty under common law which they may owe; and

 

(iii)          nothing in clause 13.1(a), (b) or (d) shall prevent or restrict the Seller or any member of the BGL Group or the Seller’s Group (as the case may be) from carrying on the business which it is carrying on at Completion or from dealing in any way with any Relevant Customer  in the way that they are dealing with such Relevant Customer as at Completion (provided, for the avoidance of all doubt, that such carrying on of a business or such dealing does not involve the provision of any service which is the same as or substantially similar to a Relevant Service provided to a Relevant Customer (save that the parties hereby agree and acknowledge that telemarketing services shall not be regarded as a service which is the same as or substantially similar to any Relevant Service)).

 

13.2        Severable undertakings

 

(a)           No member of the Seller’s Group or the BGL Group shall be in breach of this clause 13 in circumstances where any undertaking in the Seller’s Group or the BGL Group (as the case may be) is the subject of a change of control such that the control passes to any company which is not a member of the Seller’s Group or the BGL Group (as the case may be) prior to the change of control in which case clause 13 shall not restrict the new ultimate parent undertaking of such undertaking in the Seller’s Group  or the BGL Group (as the case may be) and its subsidiary undertakings (being its subsidiary undertakings immediately prior to completion of its acquisition of the undertaking in the Seller’s Group or the BGL Group (as the case may be)) in respect of any existing activities or businesses carried on at any time prior to the change of control by the new ultimate parent undertaking or any of its subsidiary undertakings  but, for the avoidance of doubt, clause 13 shall, to the extent then extant continue to apply in accordance with its terms to the members of the Seller’s Group or the BGL Group (as the case may be) immediately prior to such acquisition.

 

(b)           Subject to clause 20.3, each of the covenants in this clause 13 is:

 

(i)            a separate and severable undertaking by the Seller and shall be enforceable by the Purchaser separately and independently of its right to enforce any one or more of the covenants in this clause 13; and

 

(ii)           considered fair and reasonable by the parties, but if any restriction is found to be unenforceable, unlawful, against the public interest or in any way an unreasonable restraint of trade but would be valid if any part of it were deleted, or the period or area of application reduced, the restriction shall apply with such modification as may be necessary to make it valid and effective.

 

14.          ENTIRE AGREEMENT

 

14.1        Entire agreement

 

(a)           This Agreement, the Disclosure Letter and any other Transaction Documents together represent the whole and only agreement between the parties in relation to the sale and purchase of the Shares and supersede any previous agreement whether written or oral between the parties in relation to the subject matter of any of the aforementioned documents.  In entering into the aforementioned documents, each party to this  Agreement acknowledges that it is not relying upon any pre-contractual statement which is not expressly set out in them.  Except in the case of fraud, no party shall have any right of action against the other party to this Agreement arising out of or in connection with any pre-contractual statement except to the extent that it is repeated in any of the aforementioned documents.

 

(b)           For the purposes of clause 14.1(a), “pre-contractual statement” means any draft agreement, undertaking, representation, warranty, promise, assurance or arrangement of any nature whatsoever, whether or not in writing, relating to the subject matter of any of the aforementioned documents made or given by any person at any time prior to the date of this Agreement.

 

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15.          CONTINUING EFFECT

 

Each provision of this Agreement shall continue in full force and effect after Completion, except to the extent that any provision has been fully performed on or before Completion.

 

16.          INVALIDITY

 

If all or any part of any provision of this Agreement shall be or become illegal, invalid or unenforceable in any respect under the law of any jurisdiction that shall not affect or impair:

 

(a)           the legality, validity or enforceability in that jurisdiction of the remainder of that provision and/or all other provisions of this Agreement; or

 

(b)           the legality, validity or enforceability under the law of any other jurisdiction of that provision and/or all other provisions of this Agreement.

 

17.          AMENDMENTS AND WAIVERS

 

17.1        Amendments

 

No amendment or variation of the terms of this Agreement or any other Transaction Documents shall be effective unless it is made or confirmed in a written document signed by each party to the relevant document.

 

17.2        Waivers

 

No delay in exercising or the non-exercise by a party of any right, power or remedy under this Agreement or any other document referred to in it shall impair, or otherwise operate as a waiver or release of, that right, power or remedy, nor will any single or partial exercise of any right or remedy in any circumstances preclude any other or further exercise of it or the exercise of any other right or remedy.  Any waiver of any breach of, or any default under, any of the terms of this Agreement will not be deemed to be a waiver of any subsequent breach or default and will in no way affect the other terms of this Agreement.

 

18.          FURTHER ASSURANCE AND ASSISTANCE

 

18.1        Further assurance

 

Each party shall from time to time at its own cost, do, perform, sign, execute and deliver all such acts, deeds, documents and things (or procure the doing, performance, signing, execution or delivery of them) as the other parties shall from time to time reasonably require, in a form and in terms reasonably satisfactory to the other parties to give full effect to this Agreement and any other Transaction Documents and to secure to the other parties the full benefit of the  rights, powers and remedies conferred upon it in this Agreement and any other Transaction Documents.

 

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18.2        Books and records

 

As from the Completion Date, to the extent relevant, each of the Seller and the Purchaser shall (and shall procure that each member of the Seller’s Group, in the case of the Seller, and each member of the Purchaser’s Group, in the case of the Purchaser, shall):

 

(a)           give to the other such reasonable access to the information, books, accounts, records and returns relating to or in connection with the Company as the other may reasonably require including the right to take copies and extracts on reasonable advance notice; and

 

(b)           not destroy or delete, and shall procure that the Company shall not destroy or delete any information, books, accounts, records and returns relating to or in connection with the Company without first consulting the other party in each case until the earlier of the expiry of a period of six calendar years from the Completion Date or for so long as any actual or prospective claims under or in connection with this Agreement remain outstanding.

 

18.3        Availability of employees

 

After the Completion Date, the Purchaser shall (and shall procure that each relevant member of the Purchaser’s Group shall) make available to the Seller the assistance of such of its employees as the Seller may reasonably require in connection with the conduct of proceedings against the Seller or other members of the Seller’s Group or in connection with any matter relating to the Company whilst under the Seller’s ownership and in each case of which such employees have particular knowledge by virtue of their involvement in the matter giving rise to those proceedings or otherwise provided that the Purchaser shall not be obliged to procure that any such employee provides any such assistance to the extent that making available such an employee shall be without prejudice to the carrying on of the day-to-day business activities of the Company or the relevant member of the Purchaser’s Group.

 

19.          COUNTERPARTS

 

19.1        Any number of counterparts

 

This Agreement may be executed in any number of counterparts, and by the parties on separate counterparts, but shall not be effective until each of the parties has executed at least one counterpart.

 

19.2        Each counterpart an original

 

Each counterpart shall constitute an original of this Agreement, but all the counterparts shall together constitute one and the same instrument.

 

20.          ASSIGNMENT AND THIRD PARTY RIGHTS

 

20.1        Agreement binding on successors and permitted assignees

 

This Agreement shall be binding on and enure for the benefit of the successors and permitted assignees of the parties.

 

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20.2                        Benefit of agreement not assignable

 

(a)                                 Subject to clause 20.2(b), the benefit of this Agreement and any other Transaction Documents may not be assigned, transferred, charged or dealt in (whether by way of security, trust or otherwise) either in whole or in part to any person.

 

(b)                                 The Purchaser shall be entitled to assign (in whole but not part only) the benefit of this Agreement to any other member of the Purchaser’s Group provided that, if such assignee ceases to be a member of the Purchaser’s Group, the Purchaser shall procure that all of the benefit of this Agreement which has been assigned to such assignee is immediately re-assigned to the Purchaser or another member of the Purchaser’s Group prior to such cessation.

 

(c)                                  In the event of any assignment pursuant to clause 20.2(b), the liability of the Seller under this Agreement (including the Tax Covenant) as a result of the assignment shall not be greater than its liability would have been to the Purchaser had no assignment occurred.

 

20.3                        No Rights of Third Parties

 

(a)                                 Subject to clause 20.2(b) and clause 20.3(b), the parties do not intend any provision of this Agreement to be enforceable pursuant to the Contracts (Rights of Third Parties) Act 1999 (the “1999 Act”).

 

(b)                                 The parties agree as follows:

 

(i)                                     nothing in clause 20.3(a) shall prevent the Purchaser from making any claim against the Seller in respect of Losses incurred by the Company or seeking equitable relief on behalf of the Company in either case in respect of any breach of clause 8 or clause 13.1 (subject at all times to the other provisions of this Agreement including clause 5.4); and

 

(ii)                                  subject at all times to any other relevant provision of this Agreement (including clause 5.4 and 20.3(b)(iii)), if and only to the extent that a court rules that the Purchaser is not entitled to claim for any Losses or to seek any equitable relief in either case following a breach of clause 8 (Guarantees) or clause 13.1 (Restrictions on Activities of the Seller) due to those Losses not having been incurred by the Purchaser or due to an inability to seek such equitable relief, then the Company shall be entitled to enforce clause 8 or 13.1 (as the case may be) (and, to the extent relevant in connection with any enforcement of clause 13.1, clause 3.4(b) and Schedule 9) under the 1999 Act in which event no other member of the Purchaser’s Group (including the Purchaser) shall be entitled to enforce either clause 8 or clause 13.1 (as the case may be) with regard to the same subject matter of the claim which is made by the Company;

 

(iii)                               provided that in the event that the Company does enforce any right pursuant to clause 8 or clause 13.1, then:

 

the nature and scope of the rights of the Company under either such clause shall not be greater than the nature and scope of the rights which the Purchaser or another member of the Purchaser’s Group (pursuant to clause 20.2(b)) would otherwise have had had the Purchaser or any such member been so entitled and brought the claim or sought equitable relief (as the case may be) instead.

 

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For the avoidance of all doubt, if the Company were to enforce either clause 8 or clause 13.1 (including, to the extent relevant in connection with any enforcement of clause 13.1, clause 3.4(b) and Schedule 9)) then (to the extent relevant) all of the other provisions which would have applied to any claim brought by the Purchaser or any member of the Purchaser’s Group (pursuant to clause 20.2(b)) shall apply mutatis mutandis to the Company (including the provisions contained in Schedule 5).

 

If the Company exercises its right to enforce either clause 8 or clause 13.1, the Company shall in so far as it is within its reasonable control use its reasonable endeavours to exercise such right without any undue delay.

 

21.                               SET-OFF

 

21.1                        Right of set-off

 

To the extent that (i) the Seller owes any amount under this Agreement to the Purchaser, and/or (ii) the Purchaser owes any amount under this Agreement to the Seller, any payment to be made under this Agreement may be set-off by the payer against the amount owing by the payee to the payer, such that the payer shall be entitled to pay a net amount to the payee, provided that any such amount is due and payable at the relevant time.

 

21.2                        Exercise of right of set-off

 

No party shall be obliged to exercise its rights under clause 21.1.  Any exercise by any party of its rights under this clause 21 shall be without prejudice to any other rights or remedies available to that party under this Agreement or otherwise.

 

22.                               NOTICES

 

22.1                        Form of notices

 

All notices and other communications relating to this Agreement:

 

(a)                                 shall be in English and in writing;

 

(b)                                 shall be delivered by hand or sent by post (or airmail if overseas);

 

(c)                                  (subject to clause 24 (Agent for Service of Process) shall be delivered or sent to the party concerned at the relevant address, as appropriate, and marked as shown in clause 22.3, subject to such amendments as may be notified from time to time in accordance with this clause by the relevant party to the other parties by no less than 10 Business Days’ notice.

 

22.2                        When notices take effect

 

Each of the communications referred to in clause 22.1 shall be deemed to take effect:

 

(a)                                 if delivered by hand, upon delivery; or

 

(b)                                 if posted by first class registered post, on the second Business Day after posting, or, if sent by airmail, on the fifth Business Day after posting,

 

provided that in proving service by hand or by post, it shall be sufficient to prove that delivery by hand was made or that the envelope containing such notice was properly addressed and posted by way of first class registered post or airmail, and provided that if any communication  would otherwise become effective on a non-Business Day or after 5.00 p.m. on a Business Day, it shall instead become effective at 10.00 a.m. on the next Business Day and, if it would otherwise become effective before 9.00 a.m. on a Business Day, it shall instead become effective at 10.00 a.m. on that Business Day.

 

29

 

22.3                        Initial details of the parties

 

The initial details of the parties for the purposes of clause 22.1 are:

 

	
Party:
    	
 
    	
Seller
    
	
 
    	
 
    	
 
    
	
Address:
    	
 
    	
Pegasus   House, Bakewell Road,
   Orton Southgate, Peterborough, Cambridgeshire, PE2 6YS
    
	
 
    	
 
    	
 
    
	
Marked   for the Attention of:
    	
 
    	
Company   Secretary
    
	
 
    	
 
    	
 
    
	
Party:
    	
 
    	
Purchaser
    
	
 
    	
 
    	
 
    
	
Address:
    	
 
    	
Acre   House, 11-15 William Road, London NW1 3ER
    
	
 
    	
 
    	
 
    
	
Marked   for the Attention of:
    	
 
    	
Company   Secretary
    
	
 
    	
 
    	
 
    
	
With   a copy to:
    	
 
    	
WNS   Global Services Pvt Ltd
    
	
 
    	
 
    	
 
    
	
Address:
    	
 
    	
Plant   No 10 Gate No 4, Godrej & Boyce Complex,
   Vikhroli (W) Mumbai, 400 079, India
    
	
 
    	
 
    	
 
    
	
Marked   for the Attention of:
    	
 
    	
General   Counsel, WNS Group
    
	
 
    	
 
    	
 
    
	
Party:
    	
 
    	
Guarantor
    
	
 
    	
 
    	
 
    
	
Address:
    	
 
    	
Queensway   House, Hilgrove Street, St Helier, Jersey JE1
   1ES, Channel Islands
    
	
 
    	
 
    	
 
    
	
Marked   for the Attention of:
    	
 
    	
Company   Secretary
    
	
 
    	
 
    	
 
    
	
With   a copy to:
    	
 
    	
WNS   Global Services Pvt Ltd
    
	
 
    	
 
    	
 
    
	
Address:
    	
 
    	
Plant   No 10 Gate No 4, Godrej & Boyce Complex,
   Vikhroli (W) Mumbai, 400 079, India
    
	
 
    	
 
    	
 
    
	
Party:
    	
 
    	
Seller   Guarantor
    
	
 
    	
 
    	
 
    
	
Address:
    	
 
    	
Pegasus   House, Bakewell Road,
   Orton Southgate, Peterborough, Cambridgeshire, PE2 6YS
    
	
 
    	
 
    	
 
    
	
Marked   for the Attention of:
    	
 
    	
Company   Secretary
    

 

23.                               GOVERNING LAW AND JURISDICTION

 

23.1                        Governing law

 

This Agreement and any non-contractual obligations arising out of or in connection with this Agreement shall be governed by and construed in accordance with English law.

 

23.2                        Jurisdiction

 

Each party irrevocably submits to the exclusive jurisdiction of the English courts to settle any dispute which may arise under or in connection with this Agreement or the legal relationships established by this Agreement.

 

30

 

24.                               AGENT FOR SERVICE OF PROCESS

 

24.1                        Service

 

The Guarantor irrevocably agrees that any Service Document may be sufficiently and effectively served on it in connection with Proceedings in England by service on its agent, the Purchaser, in accordance with the provisions of clause 22 (Notices).

 

24.2                        Appointment of another agent

 

In the event of the Purchaser (or any replacement agent) ceasing so to act or ceasing to have an address in England, the Guarantor undertakes to promptly appoint another person as its agent for that purpose and to procure that notice of that appointment is given to the Seller in accordance with the provisions of clause 22 (Notices) and, if the Guarantor fails to do so, then the Seller shall be entitled to appoint an agent on the Guarantor’s behalf.

 

25.                               VARIATION

 

No amendment or variation to the terms of this Agreement shall be valid unless it is in writing and signed by or on behalf of each party to this Agreement but, for the avoidance of all doubt, no amendment or variation shall require the consent of the Company.

 

EXECUTION

 

The parties have shown their acceptance of the terms of this Agreement by executing it after the Schedules.

 

31

 

SCHEDULE 1
 DETAILS OF THE COMPANY

 

	
Name
    	
:
    	
Fusion Outsourcing Services Proprietary   Limited
    
	
 
    	
 
    	
 
    
	
Registration date
    	
:
    	
23 July 2003
    
	
 
    	
 
    	
 
    
	
Place of incorporation
    	
:
    	
South Africa
    
	
 
    	
 
    	
 
    
	
Registration
    	
:
    	
2003/017437/07
    
	
 
    	
 
    	
 
    
	
Registered office
    	
:
    	
Grant Thornton
   6th Floor, 119 Hertzog Boulevard
   Foreshore
   Cape Town, 8001
    South Africa
    
	
 
    	
 
    	
 
    
	
Directors
    	
:
    	
Peter Anthony Winslow
   Johannes Jacobus Kunz
   Otto Leon Van Der Walt
   Ian Robert Leech
    
	
 
    	
 
    	
 
    
	
Secretary
    	
:
    	
Hygeft Trust Company
    
	
 
    	
 
    	
 
    
	
Issued share capital
    	
:
    	
ZAR9,000,300 composed of 3,000,300 ordinary   shares of ZAR1.00 each
    
	
 
    	
 
    	
 
    
	
Shareholder(s)  
    	
:
    	
BFSL Limited
    

 

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SCHEDULE 2
 COMPLETION ARRANGEMENTS

 

1.                                      SELLER’S OBLIGATIONS

 

The Seller shall deliver to the Purchaser:

 

(a)                                 share certificates in respect of the Shares (or an indemnity in the usual form in the case of any lost certificate);

 

(b)                                 duly executed securities transfer form(s) in respect of the Shares in favour of the Purchaser, or as it may direct, and any power of attorney or other authority under which those transfers have been executed and any other document reasonably necessary to give to the Purchaser (or its nominee) full legal and beneficial ownership of the Shares;

 

(c)                                  certificate of incorporation (and any certificate of change of name), the certificate to commence business, memorandum of incorporation, securities register and all other statutory books of the Company written up to the day prior to the Completion Date (to the extent that any such documentation is in the Seller’s possession);

 

(d)                                 a duly signed counterpart of the Disclosure Letter;

 

(e)                                  a duly signed counterpart of the BGL Group Loan Novation Agreement;

 

(f)                                   a duly signed counterpart of the Co-existence Agreement;

 

(g)                                  a copy of the duly signed minutes of the meeting of the board of directors of the Seller authorising the execution by the Seller of this Agreement and the Transaction Documents;

 

(h)                                 a copy of the duly signed minutes of the meeting of the board of directors of the Seller Guarantor authorising the execution by the Seller Guarantor of this Agreement;

 

(i)                                     written resignations and releases from Peter Winslow and Ian Leech in each case resigning their offices with effect from on or around Completion; and

 

(j)                                    a copy of those contracts between the Company and Vodacom (which as at 31 March 2012 had not been signed by Vodacom and pursuant to which the Company had been providing services for or to Vodacom prior to 31 March 2012) signed by Vodacom containing those terms previously disclosed in writing to the Purchaser.

 

2.                                      BOARD MEETING OF THE COMPANY

 

The Seller shall cause to be duly held a meeting of the board of the Company validly to effect or execute or validly to resolve to effect or execute:

 

(a)                                 the approval of the said transfer of the Shares to the Purchaser (or its nominee) and the registration of the Purchaser (or its nominee) as holder of those Shares;

 

(b)                                 the acceptance of the resignation of Peter Winslow and Ian Leech as directors of the Company;

 

(c)                                  the issuing of new share certificates for the Shares in favour of the Purchaser (or its nominee); and

 

(d)                                 the approval of the Transaction Documents to which it is a party.

 

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3.                                      PURCHASER’S OBLIGATIONS

 

Subject to the conclusion of the matters referred to in paragraphs 1 and 2 above, the Purchaser shall:

 

(a)                                 procure that the aggregate sum of £100,000, being the amount of the First Instalment, shall immediately be paid by way of electronic transfer for same day value to the Seller’s Account;

 

(b)                                 procure that an amount of £4,900,000 by way of part payment of the BGL Group Loan Novation Consideration shall immediately be paid by way of electronic transfer for same day value to the Seller’s Account;

 

(c)                                  deliver to the Seller a duly signed counterpart of the Disclosure Letter;

 

(d)                                 deliver to the Seller a duly signed counterparty of the BGL Group Loan Novation Agreement and the Co-existence Agreement;

 

(e)                                  deliver to the Seller a copy of the duly signed minutes of the meeting of the board of directors of the Guarantor authorising the execution of this Agreement; and

 

(f)                                   deliver to the Seller a copy of the duly signed minutes of the meeting of the board of directors of the Purchaser authorising the execution of this Agreement and the Transaction Documents.

 

34

 

SCHEDULE 3
 WARRANTIES

 

1.                                      THE SELLER

 

1.1                               Capacity

 

The Seller has full power and authority, without requiring or obtaining the consent of its shareholders or any other person, authority or body, to enter into and perform its obligations under this Agreement and any other document to be executed by it pursuant to this Agreement.

 

1.2                               Valid and binding obligations

 

This Agreement and any other document to be executed by the Seller pursuant to or in connection with this Agreement shall, upon execution, constitute valid and binding obligations of the Seller in accordance with their respective terms.

 

1.3                               Insider’s Interests

 

(a)                                 There is not outstanding and there has not at any time during the period of 2 years ending on the date of this Agreement been outstanding any Contract to which the Company is or was a party and in which any Insider is or was interested in any way whatsoever (excluding any contract of employment between the Company and any of its directors as Disclosed).

 

(b)                                 No Insider has any interest, direct or indirect, in any trade or business which competes or is likely to compete with the Company’s business.

 

(c)                                  There is not outstanding any Contract which has been entered into between the Company and any other member of the Seller’s Group.

 

2.                                      THE COMPANY

 

2.1                               Company information

 

The information in respect of the Company set out in Schedule 1 (Details of the Company) is true and accurate.

 

2.2                               Memorandum of incorporation

 

The copy of the memorandum of incorporation of the Company contained in the Disclosure Documents is complete and contains all alterations or amendments made to it prior to the date of this Agreement.

 

2.3                               Statutory books

 

The securities register and other statutory books and records of the Company have been properly kept in all material respects in accordance with applicable law and contain an accurate record of the matters which should be dealt with in those books and records in all material respects and are in the possession or under the control of the Company and no notice or allegation that any of them is incorrect or should be rectified has been received by the Company.

 

35

 

2.4                               Company validly existing

 

The Company is duly incorporated and registered and validly exists under the laws of the Republic of South Africa and has all requisite corporate powers and authority to own its properties and to carry on its business as presently conducted.

 

2.5                               Constitution

 

The Company has at all times carried on its business and affairs in all respects in accordance with its memorandum of incorporation.

 

2.6                               Filings and returns

 

All returns, resolutions and other documents required to be filed with or delivered by law to the competent authority in the Republic of South Africa by the Company have been properly and correctly prepared in all material respects and so filed and delivered.

 

3.                                      OWNERSHIP OF CAPITAL

 

3.1                               Legal owner of the Shares

 

The Seller is the legal and beneficial owner of the Shares.

 

3.2                               Shares constitute entire issued share capital

 

The Shares constitute the whole of the issued and allotted stated capital of the Company and are all fully paid or properly credited as fully paid.

 

3.3                               No Encumbrance

 

There is no Encumbrance on any of the Shares or on any authorised, uncalled or unissued share capital of the Company, and no claim has been made by any person to be entitled to any such Encumbrance.

 

3.4                               No options etc

 

No person has the right to call for the allotment, conversion, issue, sale, exercise or transfer of any share, option, warrant, or loan capital or any other security of any kind giving rise to a right over the capital of the Company.

 

4.                                      SUBSIDIARIES, PARTNERSHIPS ETC.

 

4.1                               No subsidiaries

 

The Company has:

 

(a)                                 no subsidiaries and is not the legal, registered or beneficial owner of any shares or other securities or capital of any other company or corporation whether limited or unlimited and whether incorporated in the Republic of South Africa, the United Kingdom or elsewhere;

 

(b)                                 not at any time during the period of 6 years ending on the date of this Agreement had any interest, in the share capital of any company.

 

36

 

4.2                               No partnership

 

The Company is not a member of any partnership or other unincorporated association and has no place of business, branch or permanent establishment other than in the Republic of South Africa.

 

5.                                      INFORMATION/ACCOUNTING INFORMATION

 

5.1                               Accounts

 

The Accounts, a copy of which is enclosed in the Disclosure Documents:

 

(a)                                 show a true and fair view of the assets, liabilities and financial affairs of the Company as at the Balance Sheet Date and of the profits (or losses) of the Company for the financial year ending on that date;

 

(b)                                 have been prepared and audited in accordance with the historical cost convention and with applicable law in accordance with generally accepted accounting principles and practices in the Republic of South Africa at the time they were audited; and

 

(c)                                  have been prepared on bases and principles which are consistent with those used in the preparation of the audited statutory accounts of the Company for the 2 financial years immediately preceding that which ended on the Balance Sheet Date.

 

5.2                               Accounting Information

 

Without prejudice to the generality of paragraph 5.1, the Accounts:

 

(a)                                 provide a true and fair view of the liabilities (other than contingent or potential liabilities which are not expected to crystallise) and all capital commitments of the Company as at the Balance Sheet Date;

 

(b)                                 provide a true and fair view of the capital and reserves and value of all the assets of the Company as at the Balance Sheet Date and the profits (and losses) of the Company for the financial year ended on the Balance Sheet Date;

 

(c)                                  provide a true and fair view of the bad and doubtful debts of the Company as at the Balance Sheet Date; or

 

(d)                                 are not affected (except as disclosed in the Accounts) by an extraordinary or exceptional event, circumstance or item.

 

5.3                               Profits or losses

 

The profits or losses of the Company for the 2 consecutive financial years ended on the Balance Sheet Date as shown by the Accounts and by the previous audited accounts of the Company delivered to the Purchaser have not (except as disclosed in those accounts) been affected by the inclusion of extraordinary, exceptional or non-recurring items of income or non-expenditure, by transactions entered into otherwise than on normal commercial terms or by any other factors rendering such profits or losses for any such periods exceptionally high or low.

 

5.4                               Management accounts

 

The management accounts of the Company for each quarter in respect of the period from the Balance Sheet Date to 31 December 2011, copies of which are enclosed in the Disclosure Documents, have been prepared on a basis consistent with those used in the preparation of all previous management accounts and are not misleading in any material respect.

 

37

 

5.5                               Events since the Balance Sheet Date

 

Since the Balance Sheet Date:

 

(a)                                 the business of the Company has been carried on in the ordinary and usual course, without any interruption or alteration in its nature, scope or manner;

 

(b)                                 there has been no adverse material change in the financial or trading position of the Company;

 

(c)                                  no distribution of capital or income has been declared made or paid in respect of any share capital of the Company except as provided in the Accounts;

 

(d)                                 the Company has not acquired, or agreed to acquire, any single asset having a value in excess of ZAR 25,000;

 

(e)                                  the Company has not disposed of, or agreed to dispose of, any asset having a value in excess of ZAR 25,000 or assets having an aggregate value in excess of ZAR 750,000;

 

(f)                                   no loan made by the Company which remains outstanding has become due and payable in whole or in part to the Company;

 

(g)                                  the Company has not borrowed or raised any money or taken up any financial facilities and the Company has not repaid any borrowing or indebtedness in advance of its stated maturity;

 

(h)                                 the Company has not sold or agreed to sell a debt and no debt has been released, deferred or subordinated or written off by the Company;

 

(i)                                     no shareholders’ resolutions have been passed;

 

(j)                                    no outstanding management charge has become payable or been paid by the Company;

 

(k)                                 the Company has not assumed or incurred or agree to assume or incur any liability, obligation or expenses for a value in excess of ZAR 25,000 in respect of any one item or ZAR 750,000 in the aggregate in respect of an asset which has been ordered by the Company but not been paid for by the Company; and

 

(l)                                     save for salaries and employment benefits due under the terms of the relevant contract of employment, no payment has been made by the Company to the Seller, any past or present director of the Company or any person who is or was at the relevant time connected (as defined in section 1122 Corporation Tax Act) with the Seller or any such director.

 

6.                                      ASSETS

 

6.1                               Unencumbered title and possession

 

Each asset included in the Accounts or acquired by the Company since the Balance Sheet Date and each asset used by the Company which is reasonably necessary to carry on the business of the Company in the manner in which it is currently carried on or which is in the reputed ownership of the Company;

 

38

 

(a)                                 is legally and beneficially owned by the Company free from any Encumbrance (save for assets acquired subject to retention or reservation of title by the supplier or manufacturer arising in the ordinary course of business);

 

(b)                                 is in the possession or under the control of the Company; or

 

(c)                                  is not subject to any lease, hire or hire purchase arrangement.

 

6.2                               Location

 

Any asset of the Company which is not situated at the Properties at Completion is specified in the Disclosure Letter and the asset is clearly identified as an asset of the Company.

 

7.                                      DEBTORS

 

(a)                                 The Company has not made, or entered into any Contract to make, any loan to, or other arrangement with, any person as a result of which it is or may be owed any money, other than trade debts incurred in the ordinary course of business.

 

(b)                                 The Company is not entitled to the benefit of any debt otherwise than as the original creditor and the Company has not factored, deferred or discounted any debt or agreed to do so.

 

8.                                      EQUIPMENT

 

The vehicles, fixtures and fittings, furniture and other equipment used in connection with the business of the Company and which are reasonably necessary to carry on the business of the Company in the manner in which it is currently carried on:

 

(a)                                 are in a reasonable state of repair and condition (fair wear and tear excepted) and in reasonable working order and have been regularly maintained to a reasonable standard and in accordance with any safety regulations usually observed in relation to them; and

 

(b)                                 are accurately recorded in all material respects in the relevant asset register of the Company.

 

9.                                      FINANCIAL

 

(a)                                 Save in respect of the BGL Group Loan, the Company does not have outstanding any loan capital, borrowings or indebtedness in the nature of borrowing including any bank overdrafts or liabilities under acceptances or acceptance credit or any indebtedness or liabilities under any loan, lease, finance lease or hire purchase agreement.

 

(b)                                 No person has given any guarantee of or security for any overdraft, loan, other financial facility granted to the Company or other liability of the Company which remains outstanding.

 

(c)                                  The Company has not applied for or received any grant, subsidy or financial assistance from any government department or other body.

 

39

 

10.                               INSOLVENCY

 

10.1                        No winding up petition

 

So far as the Seller is aware, no order has been made for the winding up of the Company.  No resolution has been passed for the winding up of the Company, no petition has been issued to the Company for its winding up and no shareholders’ meeting has been convened for the purpose of considering a resolution for the winding up of the Company nor has any such shareholders’ resolution been passed.

 

10.2                        No business rescue

 

(a)                                 So far as the Seller is aware, no order or declaration has been made; or

 

(b)                                 No meeting of the directors or shareholders of the Company has been convened to consider the passing of a resolution,

 

in either case placing the Company under supervision for business rescue proceedings as contemplated in the Companies Act RSA.

 

So far as the Seller is aware, no application has been made by any affected person for an order placing the Company under supervision for business rescue proceedings as contemplated in section 131(1) of the Companies Act RSA.

 

10.3                        No administrator

 

So far as the Seller is aware, no application has been made to the court or order made for the administration of the Company. No notice has been given to the Company of intention to appoint an administrator of the Company.

 

10.4                        No officer

 

No provisional liquidator, liquidator, administrative receiver, administrator, trustee or other similar officer has taken possession of or been appointed over, and no encumbrancer has taken possession of, the whole or substantially the whole of the property of the Company.

 

10.5                        No creditor arrangement

 

The Company has not made a general assignment or any arrangement or composition with or for the benefit of its creditors, nor has a moratorium been agreed or declared in respect of or affecting all or a material part of the Company’s indebtedness.

 

10.6                        Analogous proceedings

 

No analogous proceedings in any other relevant jurisdiction to those described in 10.1 to 10.4 above have taken place in relation to the Company.

 

10.7                        Able to pay debts as they fall due etc.

 

The Company is not unable to pay its debts as they fall due, within the meaning of any relevant insolvency legislation, nor has it stopped paying its debts as they fall due.

 

40

 

11.                               REGULATORY AND COMPLIANCE

 

11.1                        Notice of infringement

 

The Company has not received a written notice that it has not complied in all material respects with all applicable laws and regulations administered by the FSB (to the extent relevant).

 

11.2                        Investigations

 

There is not and has not been any, and, so far as the Seller is aware, there is not pending any, governmental, regulatory or other investigation, inquiry or disciplinary proceeding (including, without limitation, any investigation, inquiry or proceeding by the FSB) concerning the Company, none is threatened and, so far as the Seller is aware, there is no event or circumstance likely to give rise to any such investigation, inquiry or proceeding.

 

11.3                        Compliance

 

The Company has obtained all necessary licences, consents, permits, authorities and permissions in the Republic of South Africa to enable it to carry on its business in the places and in the manner in which such business is now carried on, all such licences, consents, permits and authorities are valid and subsisting and have been complied with in all material respects and so far as the Seller is aware there is no reason why any of them should be suspended, cancelled or revoked.

 

11.4                        Conduct of business

 

The Company has conducted its business in all material respects in accordance with all applicable legal and administrative requirements in the Republic of South Africa.

 

12.                               CONTRACTS

 

12.1                        Contracts entered into in ordinary course

 

All of the Contracts to which the Company is a party and which are reasonably necessary to carry on the business of the Company in the manner in which it is currently carried on have been entered into in the normal course of business of the Company and were negotiated on an arm’s length basis.

 

12.2                        Breach of Contracts

 

The Company is not in material breach of any Contract to which the Company is a party which could lead to its termination by the relevant customer or a claim for compensation, damages, specific performance or an injunction/interdict being made against the Company.  So far as the Seller is aware, each Contract to which the Company is a party is valid and subsisting and, so far as the Seller is aware, no third party to any Contract to which the Company is a party is in material breach of any Contract.

 

12.3                        Material contracts

 

The Company is not, or has not been since the Balance Sheet Date, a party to, liable under or subject to any Contract which:

 

41

 

(a)                                 involves or is likely to involve any capital expenditure or involves or is likely to involve an aggregate expenditure or receipt in excess of ZAR 25,000 by the Company;

 

(b)                                 at the time of entry into the relevant Contract, the Seller was aware such Contract would result in a loss to the Company (excluding amounts which the Company would require to spend in the form of capital expenditure in the ordinary and normal course of business to support that contract);

 

(c)                                  is for the supply of goods or services by or to the Company on terms which are not expressly set out in the relevant Contract under which retrospective or future discounts, price reductions or other financial incentives are given;

 

(d)                                 involves delegation of any power under a power of attorney or authorisation of any person to bind or commit the Company to any obligation;

 

(e)                                  restricts the freedom of the Company to carry on its business as currently operated in any part of the world or to use or exploit any of its assets, in each case in such manner as it may think fit; or

 

(f)                                   is a guarantee, indemnity, surety or formal letter of comfort in respect of the obligations of a third party, under which any liability or contingent liability is outstanding.

 

12.4                        Non-compete/confidentiality

 

The Company is not a party to any non-compete or confidentiality or secrecy agreement with any third party which prevents the Company from sharing any information relating to that third party with the Purchaser or any other third party.

 

13.                               COMPANY INTELLECTUAL PROPERTY

 

13.1                        Disclosure of registered Intellectual Property

 

Details of all registered Intellectual Property owned by the Company have been listed in the Disclosure Letter.

 

13.2                        Ownership

 

All Intellectual Property used in the Company’s business (save for Intellectual Property licensed to the Company under any Contract) are legally and beneficially owned by the Company free from any Encumbrance.

 

13.3                        Maintenance and renewal

 

In respect of registered Company Intellectual Property owned by the Company, all renewal fees have been duly paid and, so far as the Seller is aware, all steps required for their maintenance and protection have been taken. So far as the Seller is aware, there are no grounds on which any person is or will be able to seek cancellation, rectification or any other modification of any such registration.

 

13.4                        Third party claims

 

There are no, and in the past two years have not been any, proceedings, actions or claims and, so far as the Seller is aware, none are pending or threatened to arise, impugning the title, validity or enforceability of the Company Intellectual Property owned by the Company or claiming any right or interest in such Intellectual Property.

 

42

 

13.5                        Company Intellectual Property

 

(a)                                 No Contract or consent in respect of any of the Intellectual Property owned by the Company has been entered into or given by the Company in favour of any third party.

 

(b)                                 So far as the Seller is aware, the Company has not, in the past two years, received any notice or claim alleging that any Intellectual Property owned by the Company infringes the Intellectual Property of a third party.

 

13.6                        Infringement of Company Intellectual Property

 

So far as the Seller is aware, the Company Intellectual Property owned by the Company is not being infringed and has not been infringed in the past two years.

 

13.7                        Know-how

 

Save for officers or employees of the Company or other members of the Seller’s Group, no third party has had access to any of the know how relating to or held by the Company except in the ordinary and normal course of business and in circumstances where those third parties are bound by obligations of confidence. The Company is not restricted in its ability to use, or to disclose to any third party, any information or know how except in circumstances where those third parties are, and the Company is, required to ensure that those third parties are bound by obligations of confidence.

 

13.8                        Disclosure of documents

 

Complete and materially accurate copies of all licences, sub-licences and other agreements whereby the Company is licensed or otherwise authorised to use the Intellectual Property rights of a third party or whereby the Company licenses or otherwise authorises a third party to use its Intellectual Property rights are enclosed in the Disclosure Documents or, in the case of Intellectual Property licences to the Company by a third party which is standard packaged commercially available software, such software is used in accordance with standard form shrink wrap, click wrap or similar licence terms.  The Company is not in material breach of any such agreement which could reasonably result in its termination by the relevant third party or such third party bringing a claim for compensation, damages, specific performance or an injunction/interdict being made against the Company, no notice has been given to terminate any of them and, so far as the Seller is aware, all of them are in full force and effect and, so far as the Seller is aware, the obligations of all relevant third parties in respect of them have been complied with in all material respects.

 

13.9                        Intellectual property

 

The Intellectual Property rights referred to in paragraph 13.8 are all the Intellectual Property rights reasonably necessary for the Company to carry on its business as carried on immediately prior to Completion, and the Company has not charged or encumbered or created any equity, lien or other adverse interest over any such rights.

 

13.10                Infringement of third party intellectual property rights

 

The Company has not, in the past three years, received any notice or claim alleging that it has, and, so far as the Seller is aware, the Company has not, infringed the Intellectual Property of a third party.

 

43

 

13.11                 Existing Domain Names

 

(a)                                 The Company is, at the date of this Agreement, the current registrant and user of the Existing Domain Names and has not sold, transferred, licensed, charged or otherwise encumbered any of the Existing Domain Names, or allowed the Existing Domain Names to be used by any third party (such “Existing Doman Names” comprising the following: “fusion-outsourcing.co.za”, “fusion-outsourcing.com”, “fusionoutsourcing.co.za”,”fusionsa.co.za”, “insidefusion.co.za”,”sacallcentres.co.za”, “fusionos.co.za” and “fusionoutsourcingservices.co.za”).

 

(b)                                 Neither the Company nor any member of the Seller’s Group has committed any breaches and are currently not in breach of the registration agreement with the registrar of the Existing Domain Names.

 

(c)                                  The Company has completed all necessary formalities (including the payment of all relevant fees) in order to effect any renewals of the Existing Domain Names which were due prior to the date of this Agreement.

 

14.                               COMPUTER SYSTEM

 

(a)                                 Material details of all software used by the Company in which the Intellectual Property rights are owned by a third party are set out in the Disclosure Letter. Complete and materially accurate copies of all licence, escrow and development agreements in respect of such software are enclosed in the Disclosure Documents. The licences of such software are complied with in all material respects by the Company.

 

(b)                                 Complete and materially accurate copies of all support and maintenance agreements in place in respect of the Computer Systems are enclosed in the Disclosure Documents.

 

(c)                                  Save for the Computer Systems licensed to the Company and disclosed under paragraphs 14(a) and 14(b), the Computer Systems are legally and beneficially owned by the Company free from any Encumbrance.

 

(d)                                 The Company has reasonably adequate procedures in place to ensure the security of the Computer Systems and data stored on them.

 

(e)                                  The Company has a sufficient number of employees who are technically competent and appropriately trained to ensure the correct operation and use of the Computer Systems for the purposes which the Computer Systems are currently used by the Company in its business immediately prior to Completion.

 

(f)                                   The data storage capability, functionality and performance of the Computer Systems as a whole are reasonably satisfactory for the Company’s business as it is now conducted as at Completion.

 

15.                              EMPLOYEES

 

15.1                        List of employees

 

A list of all of the Company’s employees as at the date of this Agreement has been disclosed.

 

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15.2                        Offers of employment/notices of termination

 

Save as set out in the Disclosure Letter, no offers of employment or engagement as an employee have been made by the Company or notices of termination of employment or engagement given to the Company or received by it in relation to an annual salary or payment in excess of ZAR 120,000, since the Balance Sheet Date.

 

15.3                        Amounts owing

 

There are no amounts owing to any present or former officers, workers or employees of the Company, other than those disclosed in the Disclosure Letter.

 

15.4                        Validity of Contracts

 

All employees of the Company have employment contracts in place and all such contracts are legal, valid and enforceable.  There is no employment contract between the Company and any of its employees which cannot be terminated by 3 months notice or less, provided that any termination on the part of the Company is in accordance with the provisions of the Labour Relations Act 66 of 1995 without giving rise to a claim for damages or compensation.

 

15.5                        Engagement and Notices of Termination

 

The Company has not in respect of any person earning an annual salary or payment in excess of ZAR 120,000 or in respect of any person earning less than ZAR 120,000 other than in the ordinary course of business:

 

(a)                                 employed or engaged or made any offers to employ or engage any person since the Balance Sheet Date;

 

(b)                                 given or received notice to terminate the employment or engagement of any person and no person has ceased to be employed or engaged by the Company since the Balance Sheet Date;

 

(c)                                  made, agreed or proposed to make any change of terms and conditions of employment or engagement of any of the employees of the Company since the Balance Sheet Date where such change of terms and conditions has not yet taken effect.

 

15.6                        Terms and conditions of employment

 

In relation to the employees of the Company there are contained in or attached to the Disclosure Letter materially accurate particulars or copies of:

 

(a)                                 any applicable written service agreements or contracts of employment or standard forms of particulars of employment and all manuals, handbooks, rules regulations and statements of terms, conditions, policies, procedures and practices for employees and employees earning in excess of ZAR 120,000;

 

(b)                                 the date of commencement of each employee’s worker’s or officer’s employment with the Company and their period of notice;

 

(c)                                  the rate of remuneration, bonus and commission, any other benefit of any kind to which the employee, worker or officer is entitled or which is regularly provided or made available to them and their annual leave entitlement; and

 

(d)                                 particulars of any collective agreement affecting the employee’s, worker’s or officer’s terms of employment, including disciplinary or grievance procedures and any procedures to be followed in the case of redundancy.

 

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15.7                        Reinstatement

 

There is no person previously employed or engaged by the Company who now has or may have a statutory or contractual right to return to work or to be re-instated or re-engaged by the Company.

 

15.8                        Absence

 

Details of all employees who have been absent from work for more than four continuous weeks (whether on maternity leave, unpaid leave, long-term sickness, secondment, authorised annual leave or otherwise) in the 12 month period ending on the date of this Agreement are contained in the Disclosure Letter.

 

15.9                        Trade Unions

 

The Company has not recognised, or so far as the Seller is aware, done any act which might be construed as recognition of, a trade union and the Company is not party to any agreement or understanding with any trade union or organisation of employees nor, so far as the Seller is aware, are any steps being taken by employees or other representatives to ensure trade union recognition.

 

15.10                 Disputes

 

The Company is not involved, or has during the 12 months prior to the date of this Agreement been involved, in any strike, lock-out, industrial or trade dispute or any negotiations with any trade union or body of employees.

 

15.11                 Disciplinary and grievance

 

Save as set out in the Disclosure Letter, no employee of the Company is subject to any disciplinary action or is engaged in any formal grievance procedure.

 

15.12                 Compliance

 

The Company has, in relation to all present employees and workers, complied in all material respects with all applicable statutes, regulations, orders and codes of conduct relating to, and there are no outstanding claims in relation to any former employees and/or workers relating to, employment and relations with employees and trade unions and the Company has maintained up to date and materially accurate records, as required to do so by law, regarding the service of each of its employees and has complied in all material respects with all agreements for the time being having effect as regards such relations or the conditions of service of its employees (whether collectively or individually).

 

15.13                 Flexible Working Arrangements

 

There are no homeworking, part-time job share, flexitime or flexible working arrangements or early retirement schemes applicable to any employees of the Company.  There are no schemes or programmes for the employment or training or inward or outward secondment of workers by the Company other than under its full control.

 

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15.14                 Working Schemes and Arrangements

 

The Company does not operate and has not operated any short time working scheme or arrangement or any redundancy or redeployment scheme or arrangement which provides for payments greater than those required by statute or for notice periods greater than those set out in contracts of employment or engagement.

 

15.15                 Self Employed Staff

 

The Company does not use the services of outworkers, agency or other self-employed persons, contracted labour or agents.

 

16.                               PENSIONS

 

16.1                        Pension Scheme

 

The Pension Scheme is the only arrangement for the purpose of providing benefits to any of its employees, officers or any of their respective dependents on retirement, permanent incapacity, permanent ill-health or death to which the Company has any liability.

 

16.2                        No other Pension Schemes

 

No announcement, undertaking or assurance (whether legally binding or not) has been made or given by the Company to continue or introduce or alter the benefits of the Pension Scheme.

 

16.3                        Information disclosed

 

There are contained in the Disclosure Documents materially accurate copies of material documents in respect of the Pension Scheme and the Company’s and its employees’ obligations and liabilities under it.  These documents include the following:

 

(a)                                 the documentation and rules currently governing the Pension Scheme including any approvals or consents in respect of the Pension Scheme; and

 

(b)                                 the latest schedule of total contributions by the Company as at 29 February 2012.

 

16.4                        Compliance with laws

 

The Company complies and has at all times complied in all material respects with all legal and regulatory requirements, actuarial recommendations and the schedule of contributions/payment schedule relevant to the Pension Scheme and the Company’s participation in the Pension Scheme.  The Company has received no notification of default in respect of the Pension Scheme.

 

16.5                        Claims

 

No claim, dispute, complaint or investigation has arisen which relates to the Pension Scheme or to the provision of retirement or death benefits in respect of the Company’s current and former employees, and so far as the Seller is aware, there is no reason why any such claim, dispute, complaint or investigation could arise.

 

16.6                        Amounts payable

 

All amounts payable in respect of the Pension Scheme have been paid on or before the date on which they were due, including:

 

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(a)                                 all contributions;

 

(b)                                 all premiums payable in respect of any insurance policy;

 

(c)                                  all levies in respect of the Pension Scheme;

 

(d)                                 all debts payable under applicable law; and

 

(e)                                  all taxes and expenses, including any fees for services rendered or requested in respect of the Pension Scheme and any tax charges payable under any applicable law.

 

16.7                        Effect of Completion

 

No event has occurred or so far as the Seller is aware will occur before, on or as a result of Completion which has resulted in or will result in the Pension Scheme being amended closed terminated or wound up in whole or in part.

 

17.                               PROPERTIES

 

17.1                        Properties

 

The Properties (details of which are listed in Schedule 6 (The Properties)) comprise the only land and buildings in which the Company has any right, title, interest or liability (actual or contingent) or which it uses or occupies.

 

17.2                        Leases affecting the Properties

 

Subject to the Incumbrances, so far as the Seller is aware, the Disclosure Letter, the Disclosure Documents and the replies to enquiries disclose details of any lease, tenancy or other right of occupation in respect of the Properties, whether granted by or to the Company and any Contract in respect of any such lease or tenancy or other legal right of occupation (in each case the “Lease”), including:

 

(a)                                 all rents, insurance premiums, levies, service charges and other amounts payable by the Company, all of which are fully paid up to date and any agreement or arrangement relating to any review or variation of any such amount or to the timing of any payment of any such amount (if any);

 

(b)                                 any rent deposit arrangements and any charges over such deposits;

 

(c)                                  any licence, consent, waiver or approval given to the Company (or, where available in the title deeds, its predecessor in title) in respect of any covenant or other obligation contained in the Lease;

 

(d)                                 all provisions relating to use, alterations, repairs, decoration, sharing of facilities, assignment, underletting, parting with or sharing possession and termination; and

 

(e)                                  any material or persistent breaches of covenants (including the covenant to pay rent) contained in the Lease.

 

17.3                       Compliance with terms

 

The Company has paid the rent and has not received notice of any breach of the material covenants on the part of the tenant contained in the Leases.

 

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17.4                        Approvals and licences

 

All licences, consents and approvals required from the landlords under the Leases have been obtained where requested and the Company has not received notice of any breach of the covenants on the part of the tenant contained in the licences, consents and approvals.

 

17.5                        Rent review

 

There are no rent reviews under the Leases outstanding.

 

17.6                        Notice by landlord

 

There is not outstanding and unobserved or unperformed obligation necessary to comply with any written notice given by the landlord to the Company under any of the Leases.

 

17.7                        Termination

 

The Company has not received any written notice of the landlord’s intention to determine the Lease.

 

17.8                        Litigation

 

The Company has not received written notice of any, and, so far as the Seller is aware, there is no, outstanding dispute or litigation in respect of any Lease.

 

17.9                        Re-entry

 

So far as the Seller is aware, there are no circumstances (other than those specified in the applicable lease documents for the Properties) which would entitle the landlord or any other person to exercise any right of re-entry or take possession of any of the Properties or any part thereof or which would otherwise restrict or terminate the continued possession and occupation of any of the Properties or any part thereof.

 

18.                               TAXATION

 

(a)                                 All notices, returns, computations, registrations and payments which should have been made by the Company for any Taxation purpose have been made within the requisite periods and are up-to-date, correct and on a proper basis and, so far as the Seller is aware, none of them is, nor likely to be, the subject of any dispute with any Tax Authority.

 

(b)                                 The Company has duly and properly made all Taxation claims, disclaimers, elections and surrenders and given all notices and consents and done all other things in respect of Taxation to the extent required before Completion in each case where the making, giving or doing of which was assumed to have been carried out for the purposes of the Accounts.

 

(c)                                  The Company has deducted and properly accounted to the appropriate Tax Authority for all amounts which it has been obliged to deduct or otherwise account for in respect of Taxation, has complied fully with all reporting requirements relating to all such amounts and has (where required by the applicable Tax Statute (as defined in Schedule 4 (Tax Covenant)) duly provided certificates of deduction of tax to the recipients of payments from which deductions have been made.

 

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(d)                                 The Company maintains all records which it is required to maintain for any Tax purpose and such records are:

 

(i)                                     complete, correct and up to date in all material respects; and

 

(ii)                                  sufficient to enable it to calculate the tax liability or relief arising in respect of an Event occurring wholly on or before Completion or in respect of the disposal of any asset owned by it at Completion.

 

(e)                                  The Company is not involved in any dispute with any Tax Authority concerning any matter likely to affect in any material way the liability of the Company to Taxation and, so far as the Seller is aware, there are no circumstances which are likely to give rise to any such dispute.

 

(f)                                   The Company has not entered into or been a party to any scheme, arrangement or transaction designed partly or wholly or containing steps or stages designed partly or wholly for the purpose of avoiding Taxation.

 

(g)                                  The Company is and has at all times been resident (for all Taxation purposes) in the jurisdiction in which it was originally incorporated and has not at any time been resident outside such jurisdiction for the purposes of any Tax Statute or any double taxation arrangements.

 

(h)                                 The Company has not at any time been subject to Taxation in any jurisdiction other than in the jurisdiction in which it was originally incorporated or had a branch or any permanent establishment outside such jurisdiction.

 

(i)                                     The Company is duly registered, is a taxable person for the purposes of VAT (to the extent applicable) and such registration is not subject to any conditions imposed by or agreed with any Tax Authority and the Company has complied in all material respects with all statutory requirements, orders, provisions, directions or conditions relating to VAT.

 

(j)                                    The Company has no interest in any asset in relation to which the recovery of VAT paid in relation to the asset may be adjusted in the future nor has it made any option to charge VAT in respect of supplies relating to land or property.

 

(k)                                 The Accounts fully provide for all Taxation (on the basis of the rates applicable to the financial year which ended on the Balance Sheet Date) liable to be assessed on or in respect of or by reference to:

 

(i)                                     the profits, gains, income and earnings for any period ended on or before the Balance Sheet Date; or

 

(ii)                                  any dividends or other distributions made or deemed to be made on or before the Balance Sheet Date.

 

(l)                                     The Company has not undertaken, or has agreed to undertake, any transaction or been a party to any other provision whatsoever or provides services (whether in respect of tangible or intangible assets, goods, services, loan or other finance or otherwise) which is otherwise than on fully arm’s length terms and, so far as the Seller is aware, there are no circumstances which could cause any Tax Authority to disregard such transaction or provision or require such transaction to be disregarded for any Taxation purpose or to make or require to be made any adjustment to the terms on which such transaction or provision is treated as taking place.

 

(m)                             The Disclosure Letter contains materially accurate details of all share incentive schemes and profit sharing schemes established by the Company whether approved by any Tax Authority or not (including details of securities, interests in securities or securities options, the disposal or exercise of which by the Seller will give rise to a liability to Taxation for which the Company is liable to account) and the Company has complied with all statutory requirements in respect of such schemes.

 

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19.                               LITIGATION

 

(a)                                 The Company is not engaged in any suits, actions, litigation, arbitration or tribunal proceedings or governmental investigations nor, so far as the Seller is aware, is any such suit, action, litigation, arbitration or tribunal proceeding or governmental investigation pending or threatened against the Company.

 

(b)                                 There is no outstanding or unsatisfied judgment, decree, order, award or decision of a court, tribunal, arbitrator or governmental agency against the Company and the Company is not party to any undertaking or assurance given to a court, tribunal or any other person in connection with the determination or settlement of any claim or proceedings.

 

20.                               INSIDER CONTRACTS

 

Save in respect of the BGL Group Loan, any agreement or arrangement between any member of the BGL Group and the Company entered into prior to the date of this Agreement (i) was entered into on an arm’s length basis, (ii) has now expired or otherwise terminated, and (iii) neither the Seller nor any other member of the BGL Group has, nor, so far as the Seller is aware, does the Company have, any outstanding accrued right or liability in connection with any such agreement or arrangement.

 

21.                               COMPANY AS INSURED

 

(a)                                 All insurable material assets of the Company are and have at all material times been, insured in amounts equal to their full replacement or reinstatement value against all risks normally insured against by persons carrying on the same classes of business as the Company.

 

(b)                                 The Company is and has at all material times been adequately covered against accident, damage, injury, third party loss, loss of profits and any other risk normally insured against by persons carrying on the same classes of business as the Company.

 

(c)                                  All premiums due in relation to the Company’s policies of insurance have been paid and, so far as the Seller is aware, nothing has been done or omitted to be done which would make any policy of insurance of the Company void or voidable.

 

(d)                                 No insurance claim is pending or outstanding and, so far as the Seller is aware, there are no circumstances which might result in any such claim.

 

(e)                                  Materially accurate particulars of the Company’s insurances and of all material claims made against those insurances in the last 3 years are set out in the Disclosure Documents.

 

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22.                               ENVIRONMENTAL/HEALTH AND SAFETY (EHS) MATTERS

 

22.1                        EHS Permits

 

All EHS Permits as are now required by the Company under EHS Law to carry on the business of the Company in the manner in which it is currently carried on have been obtained. The Seller has not received any written notice and is not aware that any EHS Permit may be suspended, revoked, cancelled, varied or not renewed.

 

22.2                        Compliance with EHS Law

 

So far as the Seller is aware, the Company materially complies and has at all times in the last two years materially complied with EHS Law in operating the business of the Company.

 

22.3                        Liability

 

The Company is not, nor has the Company been in the past two years, engaged in any action, litigation, arbitration or dispute resolution proceedings or subject to any investigation which is outstanding and which relates to any material breach of EHS Law or any material liability in relation to EHS Matters and the Seller is not aware of any such matters pending or being threatened.

 

23.                               JURISDICTION

 

The Company does not have any operations outside the territorial limits of the Republic of South Africa.

 

24.                               DATA PROTECTION

 

(a)                                 The Company has complied in all material respects with the Electronic Communications and Transactions Act 25 of 2002 (“ECTA”) and the direct marketing provisions contained in the Consumer Protection Act 68 of 2008 (“CPA”) and any relevant law in force in the Republic of South Africa as at the date of this Agreement relating to the processing of personal data and has:

 

(i)            maintained substantially accurate personal data; and

 

(ii)           obtained and maintained adequate consents from or provided adequate information to data subjects in relation to the processing of personal data, which shall enable the Company to continue such processing under current legislation in force in the Republic of South Africa.

 

(b)                                 The Company has not in the last two years received a notice, complaint or allegation from any regulatory body or authority or a data subject alleging non-compliance with any relevant law in force in the Republic of South Africa as at the date of this Agreement relating to the processing of personal data or the ECTA and the CPA or prohibiting the transfer of data or requesting rectification or erasure of personal data and, so far as the Seller is aware, there are no circumstances which may give rise to such a notice, complaint or allegation.

 

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SCHEDULE 4
 TAX COVENANT

 

1.                                      DEFINITIONS

 

In this Schedule 4:

 

(a)                                 The following expressions have the following meaning unless inconsistent with the context:

 

“Auditors” means the auditors for the time being of the Company;

 

“Dispute” means any dispute, appeal, negotiations or other proceedings in connection with a Tax Claim;

 

“Event” means any event, fact or circumstance whatsoever including but not limited to:

 

(i)                                     any transaction, action or omission (whether or not the Company is party to it);

 

(ii)                                  the earning, receipt or accrual for any Taxation purpose of any income, profits or gains;

 

(iii)                               the incurring for any Taxation purpose of any loss or expenditure;

 

(iv)                              the declaration, payment or making of any dividend or other distribution;

 

(v)                                 the sale and purchase of the Shares pursuant to this Agreement; and

 

(vi)                              Completion;

 

“Liability to Taxation” means:

 

(i)                                     any liability of the Company to make an actual payment of Taxation (whether or not the Company is primarily so liable and whether or not the Taxation is attributable to any other person and whether or not the Company has any right of recovery against any other person);

 

(ii)                                  the use by the Company (in whole or in part) of any Purchaser’s Relief (including a Purchaser’s Relief surrendered to the Company by another company) to reduce or eliminate any liability of the Company to make an actual payment of Taxation (whether or not the Company is primarily so liable and whether or not the Company has any right of recovery against any other person) in respect of which the Seller would otherwise have been liable under paragraph 2 (Covenant) or for breach of any of the Tax Warranties; and

 

(iii)                               in relation to paragraph 2(b) only, any liability of any member of the Purchaser’s Group to make an actual payment of or in respect of Taxation;

 

“Overprovision” means the amount by which any provision relating to Taxation in the Accounts or the Completion Accounts is overstated applying the accounting policies, principles and practices adopted in relation to the Accounts and if applicable the Completion Accounts;

 

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“Purchaser’s Relief” means:

 

(i)                                     any Relief of the Company which arises wholly or mainly as a result of any Event which has occurred or occurs after the Balance Sheet Date (except to the extent that the Relief relates to or arises in connection with any Liability to Taxation in respect of which (a) the Seller is liable under paragraph 2 (Covenant) or for breach of any of the Tax Warranties or (b) provision or reserve is made in the Accounts or the Completion Accounts) and otherwise any Relief of the Company which arises wholly or mainly as a result of any Event which has occurred or occurs after the Completion Date; or

 

(ii)                                  any Relief of any member of the Purchaser’s Group (but only of the Company in the circumstances described in (i) above);

 

“Relevant Person” means the Seller and any company or companies (other than the Company or any member of the Purchaser’s Group) which are, or have been on or before Completion treated as, or otherwise connected or associated in any way with, the Seller or the Company for any Taxation purpose or which at any time after Completion is treated as a member of the same group as, or otherwise connected or associated in any way with the Seller for any Taxation purpose;

 

“Relief” means:

 

(i)                                     any relief, allowance, exemption, set off, deduction or credit available from, against or in relation to Taxation or in the computation for any Taxation purpose of income, profits or gains; and

 

(ii)                                  any right to a repayment of Taxation;

 

“Saving” means the reduction or elimination of any liability of the Company to make an actual payment of Tax in respect of which the Seller would not have been liable under paragraph 2 (Covenant) or for breach of any of the Tax Warranties, by the use of any Relief arising wholly as a result of a Liability to Taxation in respect of which the Seller has made a payment under paragraph 2 (Covenant) or the Tax Warranties (but where the Relief arises wholly as a result of a Liability to Taxation in respect of which the Seller has made a payment under the Tax Warranties, only to the extent that the Relief arising has not already been taken into account in the amount of the payment made for breach of the relevant Tax Warranty);

 

“Straddle Period” means the accounting period of the Company in which completion occurs;

 

“Tax Authority” means any authority competent to impose, assess or collect Taxation;

 

“Tax Claim” means any notice, demand, assessment, letter or other document issued or action taken, by or on behalf of any Tax Authority and the submission of any taxation form, return or computation from which, in either case, it appears to the Purchaser that the Company is or may be subject to a Liability to Taxation or other liability in respect of which the Seller is or may be liable under paragraph 2 (Covenant) or for breach of any of the Tax Warranties;

 

“Tax Statute” means any statute (and all regulations and other documents having the force of law under such statute) published, enacted, issued or coming into force on or before the date of this Agreement relating to Taxation;

 

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“Tax Warranties” means the Warranties contained in paragraph 18 of Schedule 3 (and “Tax Warranty” shall be construed accordingly);

 

“VAT” means value added tax or any similar sales tax imposed in any jurisdiction; and

 

(b)                                 References to Events include Events which are deemed to have occurred for any Taxation purpose and references to income, profits or gains earned, received or accrued for any Taxation purpose include income, profits or gains which are deemed to have been earned, received or accrued for any Taxation purpose.

 

(c)                                  References to the loss of a Relief include the disallowance of a Relief and the failure to obtain a Relief and any references to a lost Relief shall be construed accordingly.

 

(d)                                 Any stamp duty or other transfer or registration tax which is charged on any document, or in the case of a document which is outside the jurisdiction in which the asset to which it is related is located any stamp duty or other transfer or registration tax that would be charged on the document if it were brought into the jurisdiction in which the said asset is located, which is necessary to establish the title of the Company to any asset or in the enforcement or production of which the Company is interested, and any interest, fine or penalty relating to such stamp duty or other transfer or registration tax, will be deemed to be a liability of the Company to make an actual payment of Taxation.

 

Part 2
 Tax Covenant

 

2.                                      COVENANT

 

Subject to the provisions of this Part 2 of this Schedule 4 (and Schedule 5 (Limitations on Claims) where specifically provided for by the express terms of Schedule 5 (Limitations on Claims)), the Seller covenants with the Purchaser to pay to the Purchaser an amount equal to the amount of:

 

(a)                                 any Liability to Taxation which has arisen or arises as a result of or in connection with any Event which occurred on or before Completion, whether or not such Liability to Taxation has been discharged on or before Completion;

 

(b)                                 any Liability to Taxation for which the Company or any other member of the Purchaser’s Group becomes liable pursuant to the terms of an applicable Tax Statute in consequence of the failure of any Relevant Person to discharge that Taxation within a specified period or otherwise;

 

(c)                                  any Liability to Taxation which arises as a result of any Event which occurs after Completion pursuant to a legally binding obligation (whether or not conditional) entered into by the Company on or before Completion otherwise than in the ordinary course of business of the Company;

 

(d)                                 any Liability to Taxation which arises at any time in respect of:

 

(i)                                     an option or other right to acquire securities granted prior to Completion by the Company or by any other person in the Seller’s Group or in respect of the exercise of such option or right; or

 

(ii)                                  any securities (including  employment-related securities) acquired as a result of a right or obligation (whether or not legally binding) created on or before Completion, which for the avoidance of doubt shall include (but not be limited to) any such securities acquired as a result of the exercise of such a right or option as is described in paragraph 2(d)(i);

 

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(e)                                  any Liability to Taxation which arises as a result of or in connection with any Event which occurred on or before Completion or the provision of any service (whether in respect of tangible or intangible assets, goods, services, loan or other finance or otherwise) on or before Completion which have not been undertaken on fully arm’s length terms;

 

(f)                                   any Liability to Taxation arising as a result of the Company or any employee being considered to be UK tax resident on or before the Completion Date and if the Company is considered to be a UK tax resident, any Liability to Taxation which arises as a result of or in connection with the Company ceasing to be UK resident for UK tax purposes;

 

(g)                                  any Liability to Taxation that arises as a result of or in connection with any refusal by the South African Revenue Service to accept the Company’s claims for capital allowances in whole or in part from the accounting year ended 30 June 2008 until the Completion Date in respect of leasehold improvements undertaken by it at its property at Fusion House, Knowledge Park (II), Heron Crescent, Century City, Milnerton 7435;

 

(h)                                 any Liability to Taxation arising as a result of or in connection with the failure by the Company to withhold tax from payments made to Otto Van der Walt and Johannes Kunz on or before Completion in the 2012 year of assessment;

 

(i)                                     any reasonable costs, fees or expenses (including legal costs) incurred by the Company or any other member of the Purchaser’s Group in connection with:-

 

(i)                                     any Liability to Taxation or other liability in respect of which the Seller is liable under any of paragraphs 2(a) to (h); or

 

(ii)                                  successfully taking or defending any action (including but not limited to legal proceedings) under this Schedule 4; or

 

(iii)                               any Dispute (that is followed by the Purchaser successfully taking action under this Schedule 4 in respect of the Dispute save where such costs, fees or expenses have been recovered by the Purchaser pursuant to paragraph 6 of this Schedule 4).

 

3.                                      QUANTIFICATION

 

For the purposes of paragraph 2 the amount of a Liability to Taxation within paragraph 2 (Covenant) will be determined as follows:

 

(a)                                 the amount of a Liability to Taxation falling within paragraph (i) of the definition of that expression in paragraph 1(a) will be the amount of the actual payment of Taxation which the Company is liable to make;

 

(b)                                 the amount of a Liability to Taxation falling within paragraph (ii) of the definition of that expression in paragraph 1(a) will be the amount of Taxation saved by the Company as a result of the use of the Purchaser’s Relief;

 

(c)                                  the amount of a Liability to Taxation falling within paragraph (iii) of the definition of that expression in paragraph 1(a) will be the amount of the actual payment of or in respect of Taxation which the member of the Purchaser’s Group is liable to make.

 

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4.                                      EXCLUSIONS

 

(a)                                 The Seller will not be liable under paragraph 2 (Covenant) in respect of a Liability to Taxation or for a liability which is the subject of a claim under the Tax Warranties (a “Tax Warranty Liability”) to the extent that:

 

(i)                                     provision or reserve was made in the Accounts or the Completion Accounts for that Liability to Taxation or Tax Warranty Liability, or the Liability to Taxation or Tax Warranty Liability was otherwise reflected in the Accounts or the Completion Accounts;

 

(ii)                                  such Liability to Taxation or Tax Warranty Liability arises (or is increased) in the ordinary course of the Company’s business since the Balance Sheet Date, save to the extent that the Liability to Taxation or Tax Warranty Liability arises in respect of any income, profits or gains earned, accrued or received in respect of the period from (but excluding) the Balance Sheet Date to (and including) Completion where such income, profits or gains have on or before Completion:

 

(A)                               been the subject of a dividend, distribution, return of capital or other payment to the Seller (unless such dividend, distribution, return of capital or other payment to the Seller has been reflected in the Purchase Price or any adjustment to the Purchase Price pursuant to clause 3 (Purchase Price) and/or Schedule 7 (Completion Accounts) of this Agreement); or

 

(B)                               been expended outside the ordinary course of the Company’s business (which for the purposes of this paragraph 4(a)(ii)(B) shall not be deemed to include any expenditure incurred for the operational or financial benefit of the Company or its business, nor any expenditure which has been reflected in the Purchase Price or any adjustment to the Purchase Price pursuant to clause 3 (Purchase Price) and/or Schedule 7 (Completion Accounts) of this Agreement);

 

(iii)                               any Relief (other than a Purchaser’s Relief) is or becomes available to the Company to mitigate the Liability to Taxation or Tax Warranty Liability;

 

(iv)                              such Liability to Taxation or Tax Warranty Liability arises or is increased as a result of the imposition of any change in the rate of any Taxation, the passing of or any change in the interpretation of any law (including decided cases), regulation or published practice of any Tax Authority or Relevant Accounting Standard in each case, made or coming into force after Completion;

 

(v)                                 payment or discharge of the Liability to Taxation or Tax Warranty Liability has been made on or before Completion and the discharge is reflected in the Accounts or the Completion Accounts;

 

(vi)                              the Liability to Taxation or Tax Warranty Liability arises or is increased as a result of the Company ceasing to carry on any trade or business after  Completion or effecting a major change after Completion in the nature or conduct of any trade or business carried on by it;

 

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(vii)                           the Liability to Taxation or Tax Warranty Liability is stamp duty or stamp duty reserve tax or any other transfer Tax payable on the transfer or agreement to transfer the Shares;

 

(viii)                        the Liability to Taxation or Tax Warranty Liability arises or is increased as a result of the gross negligence and/or failure by the Company or the Purchaser or any other member of the Purchaser’s Group after Completion to make any claim, election, surrender or disclaimer or to give any notice or consent to or do any other thing, the making, giving or doing of which is specifically taken into account in and is reasonably evident in the Accounts or the Completion Accounts in computing any provision or reserve made in the Accounts or the Completion Accounts;

 

(ix)                              the Liability to Taxation or Tax Warranty Liability arises or is increased as a result of any matter or thing done or omitted to be done at the written request of the Purchaser or any member of the Purchaser’s Group (including the redemption of the preference shares in the capital of the Company on or before Completion);

 

(x)                                 the Liability to Taxation or Tax Warranty Liability arises or is increased as a result of any act, omission, transaction or arrangement (or any combination of any of them) after Completion by the Company or the Purchaser or any member of the Purchaser’s Group outside the ordinary course of business of the Company after Completion and which the Purchaser was aware or ought reasonably to have been aware would give rise to the Liability to Taxation or Tax Warranty Liability;

 

(xi)                              the Liability to Taxation or Tax Warranty Liability arises or is increased as a result of the earning, receipt, realisation or accrual of any income, profit or gain on or before Completion which is not recognised in the Accounts or taken into account in the Completion Accounts;

 

(xii)                           the Liability to Taxation or Tax Warranty Liability arises or is increased as a result of the assignment of the benefit in whole or in part of this Agreement; or

 

(xiii)                        the Liability to Taxation or Tax Warranty Liability is taken into account in any adjustment to the Purchase Price and the Purchaser is aware or ought reasonably to be aware that the Purchase Price has been reduced to reflect such Liability to Taxation or Tax Warranty Liability.

 

(b)                                 For the purposes of paragraph 4(a)(ii) none of the following will be regarded as an Event occurring in the ordinary course of business of the Company:

 

(i)                                     any distribution or deemed distribution;

 

(ii)                                  the disposal or acquisition of any asset (including trading stock) or the supply or obtaining of any service or business facility of any kind (including a loan of money or the letting, hiring or licensing of any tangible or intangible property) in circumstances where the consideration (if any) actually received or given for such disposal, acquisition, supply or obtaining is different from  the consideration deemed to have been received or given for any Taxation purposes;

 

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(iii)                               any Event which gives rise to a Liability to Taxation or Tax Warranty Liability in respect of deemed (as opposed to actual) income, profits or gains, including without limitation a credit adjustment for transfer pricing;

 

(iv)                              the Company ceasing, or being deemed to cease, to be a member of any group of companies or associated with any other company for any Taxation purpose;

 

(v)                                 any Event which gives rise to a Liability to Taxation or Tax Warranty Liability primarily chargeable against or attributable wholly or partly to or recoverable wholly or partly from any other person;

 

(vi)                              the disposal of any capital asset;

 

(vii)                           any scheme, arrangement or transaction designed partly or wholly or containing steps or stages designed partly or wholly for the purpose of avoiding a Liability to Taxation or Tax Warranty Liability;

 

(viii)                        the creation, cancellation or reorganisation of any share or loan capital of the Company;

 

(ix)                              the failure by the Company to deduct or account for any Taxation; or

 

(x)                                 any Event which gives rise to any fine, penalty, surcharge or interest relating to any Taxation.

 

(c)                                  Paragraph 4(a)(ii) will not apply to any claim made pursuant to paragraph 2(h).

 

5.                                      DUE DATE FOR PAYMENT

 

(a)                                 The due date for the making of a payment by the Seller under this Schedule 4 will be:

 

(i)                                     the date falling five (5) Business Days after the Purchaser has served notice on the Seller demanding such payment; and

 

(ii)                                  in any case involving a liability of the Company or any member of the Purchaser’s Group to make an actual payment (whether or not a payment of Taxation), the later of the date mentioned in paragraph 5(a)(i) and the date falling five (5) clear Business Days before the last date upon which the payment is required to be made to the person entitled to the payment.

 

(b)                                 If any payment required to be made by the Seller under this Schedule 4 is not made by the due date, ascertained in accordance with paragraph 5(a), then such payment will bear interest in accordance with the terms of clause 3.8 of this Agreement.

 

6.                                      CLAIMS PROCEDURE

 

(a)                                 If the Purchaser or the Company becomes aware of any Tax Claim it will as soon as reasonably practicable and in any event within 5 Business Days of becoming aware of the Tax Claim give notice to the Seller, provided that the giving of such notice will not be a condition precedent to the liability of the Seller under paragraph 2 (Covenant) or for breach of any of the Tax Warranties.

 

(b)                                 Subject to paragraph 6(c) and provided that the Seller indemnifies the Company, the Purchaser and all other members of the Purchaser’s Group against all losses, costs, damages and expenses (including interest or surcharge on overdue Taxation) which may be reasonably and properly incurred thereby, the Purchaser will procure that the Company takes such action and gives such information and assistance in connection with its Taxation affairs as the Seller may reasonably and promptly request to dispute, appeal against, settle or compromise any Tax Claim, including applying to postpone (so far as legally possible) the payment of any Taxation.

 

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(c)                                  Subject to paragraphs 6(d) and 6(e), and to compliance by the Seller with paragraph 6(b) in relation to any Dispute, the Purchaser will not, and will procure that the Company will not, without the prior written consent of the Seller, such consent not to be unreasonably withheld or delayed:

 

(i)                                     transmit any material communication (whether written or otherwise) to any Taxation Authority;

 

(ii)                                  settle or compromise the relevant Tax Claim; or

 

(iii)                               agree any matter which is likely to affect the amount of the relevant Tax Claim.

 

(d)                                 The Purchaser will not be required to take or procure that the Company will take any action mentioned in paragraph 6(b), and nor will the provisions of paragraph 6(c). apply in relation to any action, which:

 

(i)                                     It reasonably considers is unlawful or materially prejudicial to the business or Taxation affairs of the Company, the Purchaser or any other member of the Purchaser’s Group; or

 

(ii)                                  involves contesting a Tax Claim beyond the first appellate body (excluding the Taxation Authority which has made the Tax Claim) in the jurisdiction concerned unless the Seller obtains (at the Seller’s cost and expense) the opinion of independent tax counsel of at least five years’ call that it is reasonable in all circumstances to make such an appeal.

 

(e)                                  If the Seller fails promptly (and in any event within 10 Business Days of the Purchaser giving notice requiring the Seller to do so) to duly pay under the indemnity described in paragraph 6(b) or to inform the Purchaser of any action which the Seller requests the Purchaser to procure the Company to take under that paragraph, or no action is required to be taken by virtue of any of the provisions of paragraph 6(d), the Purchaser will be entitled to procure that the Company settles or compromises any Tax Claim on such terms as it determines in its absolute discretion.  For the avoidance of doubt, the indemnity described in paragraph 6(b) shall not apply to the extent that the Purchaser does not take (or does not procure that the Company takes) any action referred to in paragraph 6(b), 6(c) or 6(d), including where the Purchaser or the Company invokes this paragraph 6(e).

 

7.                                      SAVINGS AND OVERPROVISIONS

 

(a)                                 If (at the Seller’s request and expense) the Auditors determine that the Company has obtained a Saving or that there is an Overprovision, the Purchaser will offset such Saving (less the amount of all costs and expenses incurred in obtaining the Saving) or Overprovision against any claim under paragraph 2 (Covenant) or for breach of any  of the Tax Warranties of which it has given notification to the Seller and in relation to which the Seller is liable.

 

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(b)                                 To the extent that there is an amount of Saving or Overprovision remaining after the application of paragraph 7(a), the Purchaser will as soon as reasonably practicable thereafter repay to the Seller the lesser of:

 

(i)                                     that amount; and

 

(ii)                                  in respect of a Saving, the amount of any previous payment(s) by the Seller under paragraph 2 (Covenant) or the Tax Warranties in respect of the Liability to Taxation which gave rise to the Saving less any part of that amount previously repaid to the Seller under this paragraph 7 (but in respect of a payment under the Tax Warranties, only to the extent that the payment made under the relevant Tax Warranty did not take account of the Saving); or

 

(iii)                               in respect of an Overprovision, the amount of any previous payment(s) by the Seller under paragraph 2 (Covenant) or the Tax Warranties less any amount previously repaid to the Seller under this paragraph 7.

 

(c)                                  The Company will be entitled to use in priority to any Relief which gives rise to a Saving any other Relief available to it (including by way of surrender by another company to it) to reduce or eliminate any liability to make an actual payment of corporation tax (or other tax on income, profits or gains).

 

(d)                                 The Company will not be treated as obtaining a Saving until the last date upon which it would have been obliged to make the actual payment or corporation tax (or other tax on income, profits or gains) which has been reduced or eliminated in order to avoid incurring interest or penalties thereon.

 

(e)                                  An Overprovision shall be disregarded for the purposes of paragraph 7(a) to the extent to which such Overprovision arises or is increased as a result of:

 

(i)                                     the use, set off or availability of a Purchaser’s Relief;

 

(ii)                                  (a) in relation to an Overprovision in the Accounts, any Event which occurred in the ordinary course of the business of the Company after the Balance Sheet Date and on or before Completion and (b) in relation to an Overprovision in the Completion Accounts, any Event which occurs in the ordinary course of the business of the Company after Completion; or

 

(iii)                               a change in legislation (including but not limited to an increase in rates of Taxation) or in the published practice of any Taxation Authority first enacted or announced (a) in relation to an Overprovision in the Accounts, after the Balance Sheet Date or (b) in relation to an Overprovision in the Completion Accounts, after Completion.

 

(f)                                   In determining whether the Company has obtained a Saving or Overprovision, the Auditors will act as experts and not as arbitrators and their determination will (in the absence of manifest error) be conclusive and binding on the parties.

 

8.                                      TIME LIMIT

 

(a)                                 The Seller will not be liable under paragraph 2 (Covenant) or under the Tax Warranties in respect of a Liability to Taxation unless within seven years after  Completion the Purchaser has given notice to the Seller of a Tax Claim relating to such Liability to Taxation.

 

(b)                                 The time limit in paragraph 8(a) is subject to clause 5.7 (Fraud etc) of this Agreement.

 

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9.                                      TAX RETURNS

 

(a)                                 The Company or its respective agents or professional advisers shall prepare the Tax returns and computations of the Company and shall prepare all claims, elections, surrenders, disclaimers, notices and consents relating to all accounting periods ending on or before the Completion Date to the extent that they have not been prepared before Completion (the “Tax Returns”).  The Seller agrees that it shall provide such assistance as is necessary and reasonable (at the cost and expense of the Company) to enable the Company or its respective agents or professional advisers to prepare the Tax Returns pursuant to this paragraph.

 

(b)                                 The Tax Returns shall be provided to the Seller or its respective agents or professional advisers at least 20 Business Days before the due date for submission of the Tax Returns to enable the Seller or its respective agents or professional advisers to comment on the draft Tax Returns.  The Company or its agents or professional advisers shall take account of all reasonable comments of the Seller or its agents or professional advisers in the final form of Tax Returns.  The Purchaser shall procure that the Company shall cause the Tax Returns to be authorised, signed and submitted in a timely manner to the appropriate Tax Authority with such amendments.

 

(c)                                  The Company or its respective agents or professional advisers shall have conduct of all matters including negotiations and correspondence relating to the agreement of the Tax Returns with the appropriate Tax Authority provided that the Purchaser shall (and procure that the Company shall) keep the Seller informed of all material matters relating to those returns and shall give the Seller the opportunity to comment on any material documentation before its submission to the relevant Tax Authority and the Company or its respective agents or professional advisers shall in the form of documentation actually submitted to the appropriate Tax Authority take into account the reasonable comments made by the Seller insofar as they relate to a liability to Tax of the Company.

 

(d)                                 The Company or its agents or professional advisers shall at the cost and expense of the Company prepare the Tax Returns and computations of the Company and shall prepare all claims, elections, surrenders, disclaimers, notices and consents for the Straddle Period (the “Straddle Period Returns”) on a basis which is consistent with the way in which the Tax Returns were prepared.

 

(e)                                  Before submission to the relevant Tax Authority, the Straddle Period Returns shall be provided in draft for the review of the Seller or its respective agents or professional advisers.  The draft Straddle Period Returns shall be provided to the Seller or its respective agents or professional advisers at least 20 Business Days before the due date for submission of the Straddle Period Returns to enable the Seller or its respective agents or professional advisers to comment on the draft Straddle Period Returns.  The Purchaser, the Company or its agents or professional advisers shall take account of all reasonable comments of the Seller or its agents or professional advisers in the final form of Straddle Period Returns actually submitted to the relevant Tax Authority insofar as they relate to any part of the Straddle Period up to and including the Completion Date or otherwise where they relate to anything which may adversely affect the Seller or a member of the Seller’s Group.

 

(f)                                   For the avoidance of doubt, in the event that any matter gives rise to a Tax Claim, the provisions of paragraph 6 (Claims procedure) shall, in relation to such matter, take precedence over the provision of this paragraph 99 and the Tax Claim shall be conducted in accordance with the provisions of paragraph 6 (Claims procedure).

 

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10.                               COUNTER COVENANT

 

(a)                                 The Purchaser covenants with the Seller to pay to the Seller an amount equivalent to any Tax for which the Seller or any person connected or deemed to be connected with the Seller becomes liable where the Seller or any person connected or deemed to be connected with the Seller is assessed to that Tax as a result of the failure by the Company to discharge a Liability to Taxation (other than a Liability to Taxation in respect of which the Purchaser is entitled to claim payment under this Schedule).

 

(b)                                 The covenant contained in paragraph 10(a) of this Schedule 4 shall not apply to the extent that:

 

(i)            the Purchaser could claim payment in respect of it under paragraph 2 (Covenant) of this Schedule 4 or for breach of any of the Tax Warranties;

 

(ii)           the Seller has recovered the relevant Taxation (or an amount in respect of such Taxation) from the Company, the Purchaser or any other member of the Purchaser’s Group under any relevant statutory provision (and the Seller shall procure that no such recovery is sought to the extent that payment has been made by the Purchaser under paragraph 10(a) of this Schedule 4);

 

(iii)          an amount in respect of that liability to Taxation has already been recovered by the Seller under paragraph 10(a) of this Schedule 4.

 

(c)                                  The Purchaser will be entitled to set off against any amount which it is liable to pay to the Seller under paragraph 10(a) of this Schedule 4 any amount which the Seller is liable to pay to the Purchaser under paragraph 2 of this Schedule 4 or for breach of the Tax Warranties.

 

(d)                                 Paragraphs 5 (Due date for payment), 6 (Claims procedure) and 8 (Time limit) of this Schedule 4 and paragraph 7 (Recovery from third parties) of Schedule 5 (Limitations on Claims) shall apply to the covenant contained in paragraph 10(a) of this Schedule 4 as they apply to the covenant contained in paragraph 2 (Covenant) of this Schedule 4, replacing references to the Seller with the Purchaser (and vice versa) and making any other necessary modifications.

 

11.                               RECOVERY FROM OTHER PERSONS

 

(a)                                 If the Company, the Purchaser or any other member of the Purchaser’s Group recovers from any other person (including any Tax Authority but excluding the Purchaser, any other member of the Purchaser’s Group or any insurance company that the Company has an insurance policy with) any actual monetary amount which is referable to a Liability to Taxation or other liability of the Company in respect of which the Seller has made a payment in full under paragraph 2 (Covenant) or for breach of any of the Tax Warranties, the Purchaser will repay to the Seller the lesser of:

 

(i)                                     the amount so recovered (less any costs and expenses reasonably and properly incurred by the Company, the Purchaser or any other member of the Purchaser’s Group as a result of the recovery of that amount and also less any Taxation paid or payable as a result of such recovery (or which would have  been paid or payable but for the availability of any Purchaser’s Relief) except to the extent already recovered from the Seller under paragraph 11(b) or otherwise); and

 

(ii)                                  the amount paid by the Seller under paragraph 2 (Covenant) or for breach of any of the Tax Warranties (net of any Taxation suffered thereon) in respect of the Liability to Taxation or other liability in question less any part of such amount previously repaid to the Seller under any provision of this Agreement or otherwise.

 

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(b)                                 If the Purchaser becomes aware that the Company is entitled to recover any amount mentioned in paragraph 11(a), the Purchaser will as soon as reasonably practicable give notice of the fact to the Seller and provided that the Seller indemnifies the Company, the Purchaser and all other members of the Purchaser’s Group against all costs and expenses which may be reasonably and properly incurred thereby, the Purchaser shall or shall procure that the Company shall use all reasonable endeavours to effect such recovery.

 

(c)                                  The action which the Seller may request the Company to take under paragraph 11(b) does not include:

 

(i)                                     any action which is unlawful;

 

(ii)                                  any action to the extent that the Purchaser can demonstrate to the Seller (acting reasonably) that such action will materially increase the liability to Tax of the Company, the Purchaser or any other member of the Purchaser’s Group or will be materially prejudicial to the business or Taxation affairs of the Company, the Purchaser or any other member of the Purchaser’s Group; or

 

(iii)                               allowing the Seller (or any person nominated by them) to undertake the conduct of any action necessary to effect recovery of the amount in question.

 

(d)                                 To the extent that the amount recoverable by the Company from any person referred to in paragraph 11(a) above is, and can reasonably be demonstrated by the Seller to be less than it would have been had the Company taken action against such person at the same time as it commenced action against the Seller in respect of the relevant Liability to Taxation or Tax Warranty Liability, the Purchaser will pay to the Seller the shortfall between the amount actually recovered by it from any person referred to in paragraph 11(a) and the sum reasonably demonstrated by the Seller that could have been recovered from such person, save that the total amount paid to the Seller by the Purchaser pursuant to paragraph 11(a) and this paragraph in respect of the relevant Liability to Taxation or Tax Warranty Liability shall not exceed the amount referred to in paragraph 11(a)(ii) above.

 

(e)                                  Paragraph 11(d) shall not apply to the extent that the reason for any delay by the Company in taking action against any person referred to in paragraph 11(a) arises as a result of the Seller acting unreasonably in respect of the settlement of any Liability to Taxation or other liability in respect of which the Seller is liable under paragraph 2 (Covenant) or for breach of the Tax Warranties or, as a result of the Seller’s failure to pay to the Purchaser any sums due to it in accordance with paragraph 5 of this Schedule.

 

(f)                                   The provisions of this paragraph 11 will not apply if the Liability for Taxation or Tax Warranty Liability in respect of which the Seller has made a payment to the Purchaser under paragraph 2 (Covenant) or for breach of the Tax Warranties relates to transfer pricing.

 

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SCHEDULE 5
 LIMITATIONS ON CLAIMS

 

1.                                      GENERAL

 

1.1                               Purchaser to notify potential claims

 

If the Purchaser or the Company becomes aware of any fact, matter, event or circumstance by virtue of which the Seller is or may become liable to pay the Purchaser under any of the Warranties or the Tax Covenant, the Purchaser shall as soon as reasonably practicable (but in any event within 28 days of becoming so aware) inform the Seller of the existence of such a claim.

 

1.2                               Exclusion

 

Paragraphs 3 and 4 of this Schedule 5 shall not apply in respect of a claim in relation to paragraphs 1.1 and 1.2 (the Seller), 2.1 (the Company) and 3 (Ownership of Capital) of Schedule 3 (Warranties).

 

2.                                      TIME LIMIT ON CLAIMS

 

2.1                               Time limits

 

No claim shall be brought by the Purchaser under the Warranties or the Tax Covenant unless the Purchaser shall have given notice in writing of that claim specifying (in reasonably sufficient detail to the extent practicable and known to the Purchaser and/or the Company), the matter giving rise to the claim, the nature of the claim and the amount claimed to the Seller not later than:

 

(a)                                 in the case of a claim relating to a Tax Covenant Claim or a claim relating to any of the Warranties specified in paragraph 18 only of Schedule 3 (Warranties), the expiry of a period of seven calendar years commencing on the Completion Date; and

 

(b)                                 in the case of a claim for breach of any of the Warranties (other than the Warranties specified in paragraph 18 of Schedule 3 (Warranties)), the expiry of a period of 18 calendar months commencing on the Completion Date.

 

2.2                               Legal Proceedings

 

The liability of the Seller in respect of a claim notified in accordance with paragraph 2.1 (Time limits) shall absolutely terminate (if that claim has not been previously satisfied, settled or withdrawn) (a) if Proceedings in respect of that claim containing particulars of it shall not have been properly issued and validly served on the Seller within nine months after the date of service of that notice and/or (b) if in respect of Proceedings, having been so properly issued and validly served as aforesaid it is established that in so far as it is within the reasonable control of the Purchaser, the Purchaser has not used its reasonable endeavours (subject to the application of and in accordance with any relevant court procedure rules) to enforce Proceedings with reasonable diligence provided that no claim shall absolutely terminate pursuant to this paragraph 2.2(b) if at the relevant time the Seller seeks or is seeking to rely on this paragraph 2.2(b) (i) the Purchaser is complying in all material respects with the relevant court procedural rules or enforcement of the Proceedings is being delayed by any act or omission of any third party or any circumstances outside the reasonable control of the Purchaser, or (ii) the Purchaser is acting in a manner which is consistent with the directions of the relevant court, or (iii) the Purchaser is taking steps (which it is doing with reasonable  diligence) to obtain evidence or advice from its external legal advisers which in either case reasonably prevents the Purchaser from pursuing the Proceedings with reasonable diligence.

 

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2.3                               Contingent claims

 

If any claim relating to a breach of any of the Warranties or the Tax Covenant arises by reason of a liability of the Seller which is a contingent liability when any such claim in respect thereof is notified to the Seller in accordance with this Schedule 5, the Seller shall not be obliged to make any payment to the Purchaser until such time as the contingent liability ceases to be contingent and becomes an actual liability and is due and payable.  Provided that any such claim has been notified to the Seller in accordance with paragraph 2.1 of this Schedule 5, then paragraph 2.2 shall be amended in relation to such claim so as to require that Proceedings be commenced within nine months from the date on which the Purchaser becomes aware and has notified the Seller that the said liability ceases to be contingent.

 

3.                                      SPECIFIC LIMITATIONS

 

The Purchaser shall not be entitled to claim against the Seller under the Warranties or the Tax Covenant (save in respect of any claim made pursuant to paragraph 2(h) or 2(i) of the Tax Covenant to which this paragraph will not apply):

 

(a)                                 unless the amount that would be recoverable (after taking into account the other provisions of this Schedule 5) from the Seller in respect of the claim exceeds £10,000, but subject always to paragraph 3(b).  For this purpose, where more than one claim is brought which each relates to or arises out of the same or substantially similar circumstances but one or more of these claims does not exceed £10,000, the Purchaser shall be permitted to aggregate the claims to exceed the £10,000 threshold (for example, where there are three claims of £9,000 relating to or which arise out of  the same or substantially similar circumstances, the Purchaser shall be permitted to aggregate these to exceed the threshold provided in this paragraph 3(a) and each claim shall be recoverable but subject always to paragraphs 3(b) and 4 and the other provisions of this Schedule 5); and

 

(b)                                 unless the amount that would be recoverable (after taking into account the other provisions of this Schedule 5) from the Seller in respect of the claim, when aggregated with the amount so recoverable in respect of any other claims against the Seller under the Warranties or the Tax Covenant (and for those purposes ignoring any claims which the Purchaser is not entitled to bring because of paragraph 3(a) but taking into account the other provisions of this Schedule 5) exceeds a threshold of £125,000, in which event the Seller shall be liable for the whole amount and not merely the amount by which that threshold is exceeded.

 

4.                                      MAXIMUM LIABILITY

 

(a)                                 Subject to paragraph 4(b) of this Schedule 5, the total maximum aggregate liability of the Seller in respect of claims under the Warranties and the Tax Covenant shall not exceed an aggregate amount equal to £7,500,000 (seven million five hundred thousand pounds).

 

(b)                                 The limit of £7,500,000 in paragraph 4(a) of this Schedule 5 shall not apply to any claim under the Warranties specified in paragraph 18 only of Schedule 3 (Warranties) or the Tax Covenant in either case to the extent it relates exclusively to any transfer pricing practices, procedures or rules of the Company or the Seller or any other member of the Seller’s Group in so far as any such practices, procedures or rules impact on or relate to the Company, including without limitation, the application of  any relevant transfer pricing practices, procedures or rules of the Company or the Seller or any other member of the Seller’s Group as contemplated in the Income Tax Act, 58 of 1962, and in respect of any such claim only the Seller’s liability therefor shall not be subject to any financial limitation.

 

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5.                                      OTHER LIMITATIONS

 

The Purchaser shall not be entitled to claim against the Seller under the Warranties excluding the Warranties in paragraph 18 of Schedule 3 (Warranties):

 

(a)                                 if and to the extent that:

 

(i)                                     the claim would not have arisen but for any act, omission, transaction or arrangement (or any combination of any of the same) having effect after Completion of the Purchaser or the Company or any other member of the Purchaser’s Group (other than to the extent that any such act, omission, transaction or arrangement is in the ordinary course of business of the Company as carried on over the period of 90 calendar days prior to the date of this Agreement or, as the case may be, any other member of the Purchaser’s Group or is required by law or occurs pursuant to a legally binding obligation of the Company, the Purchaser or, as the case may be, any other member of the Purchaser’s Group which existed prior to Completion and to the extent it is extant following Completion);

 

(ii)                                  the claim would not have arisen but for any change in the accounting policy or practice of the Purchaser or the Company or any other member of the Purchaser’s Group having effect after Completion save where such change has been made to ensure compliance by the Company or the Purchaser or any other member of the Purchaser’s Group with any accounting policy or practice or law to which the Company or the Purchaser or any other member of the Purchaser’s Group is subject;

 

(iii)                               the claim arises or is increased as a result of the passing of, or any change in or any change in the interpretation or application of, any law, rule, regulation or administrative practice of any government, government department, local or state agency, authority, regulatory or fiscal body after the date of this Agreement; or

 

(iv)                              the subject matter of the claim is taken into account in the Completion Accounts.

 

6.                                      NO DOUBLE RECOVERY

 

Subject at all times to clause 5.4 of this Agreement, the Purchaser shall not be entitled to recover damages or otherwise obtain payment or other compensation more than once in respect of the same fact, matter, event or circumstance.

 

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7.                                     RECOVERY FROM THIRD PARTIES

 

(a)                                 If the Purchaser, the Company or any other member of the Purchaser’s Group has reasonable grounds to recover from some other person (including insurers) (but excluding any member of the Seller’s Group) any Losses which give rise or may reasonably likely give rise to any claim under the Warranties excluding a claim for breach of the Warranties in paragraph 18 of Schedule 3 (Warranties) and excluding a claim under the Tax Covenant, the Purchaser shall or shall procure that the Company  or the relevant member of the Purchaser’s Group shall use all reasonable endeavours to enforce that recovery (keeping the Seller informed on a timely basis of any action so taken).

 

(b)                                 If, despite any other provision of this Schedule 5, any payment is made by the Seller in or towards the settlement of any claim made under the Warranties excluding a claim for breach of the Warranties in paragraph 18 of Schedule 3 (Warranties) and excluding a claim under the Tax Covenant and the Purchaser or the Company or any other member of the Purchaser’s Group subsequently recovers or procures the recovery from a third party (including insurers) of an amount which is referable to that claim (and, in the event that the Purchaser or the Company or any other member of the Purchaser’s Group becomes entitled after payment by the Seller to make recovery from a third party of an amount which is referable to that claim, the Purchaser undertakes to procure that the Company or the relevant member of the Purchaser’s Group shall use all reasonable endeavours to enforce that recovery) the Purchaser shall or shall procure that the Company or the relevant member of the Purchaser’s Group shall forthwith repay to the Seller an amount equal to whichever is the lesser of:

 

(i)                                     the amount (including interest (if any)) recovered from the third party less any reasonable costs and expenses incurred in recovering the same; and

 

(ii)                                  the amount paid by the Seller in or towards settlement of the claim.

 

8.                                      CONDUCT OF CLAIMS

 

If the Purchaser or the Company becomes aware of any fact, matter, event or circumstance that will or may reasonably give rise to a claim against the Seller under any of the Warranties excluding the Warranties in paragraph 18 of Schedule 3 (Warranties) and such fact, matter, event or circumstance relates to an actual or threatened claim, action or demand by or liability to a third party excluding any member of the Seller’s Group (a “third party claim”) then:

 

(a)                                 the Purchaser shall not make, and shall procure that neither the Company nor any other member of the Purchaser’s Group shall make, any admission of liability in relation to the third party claim nor compromise, dispose of or settle the third party claim without the prior written consent of the Seller (such consent not to be unreasonably withheld or delayed);

 

(b)                                 the Purchaser shall, and shall procure that the Company and all other members of the Purchaser’s Group shall, at the joint written request of the Purchaser and the Seller:

 

(i)                                     take such action as the Purchaser and the Seller may jointly and reasonably require to avoid, contest, dispute, resist, appeal, compromise or defend the third party claim (including, without limitation, making counter claims and exercising any contractual rights of set off against third parties and appointing lawyers and other professional advisers), and keeping each other informed as to the steps which are being taken in connection with the third party claim; and

 

(ii)                                  render or cause to be rendered such assistance as the Purchaser and the Seller may reasonably require (including providing access to information (save that this information shall not extend to any information which relates to any possible claim which may be by the Purchaser against the Seller and which is the subject of legal privilege) and to employees of the Purchaser or the Company or any member of the Purchaser’s Group while such employees  continue to remain in the employment of the Purchaser, the Company or any other relevant member of the Purchaser’s Group) for the purpose of avoiding, contesting, disputing, resisting, appealing, compromising or defending the third party claim for so long as it remains outstanding

 

68

 

Provided that

 

(A)                               in the event of any disagreement or dispute between the Seller and the Purchaser as to any matter in connection with or pursuant to paragraph 8(b)(i), and/or the conduct of the third party claim generally pursuant to paragraph 8(b)(i), then the Purchaser shall defer to the Seller’s reasonable request (such that any reference to the joint written request or similar of the Purchaser and the Seller or any action or assistance as the Purchaser and the Seller may jointly and reasonably require or may reasonably require shall be deemed to be substituted by references to a written request of the Seller and action or assistance as the Seller may reasonably require respectively);

 

(B)                               the Seller shall indemnify the Purchaser, the Company and each member of the Purchaser’s Group (to the extent relevant) and keep the Purchaser, the Company and each member of the Purchaser’s Group (to the extent relevant) indemnified against any Losses incurred by it to the extent that any such Losses are incurred as a direct result of complying with the provisions of or directly pursuant to paragraph 8(b)(i) and/or (ii) as a direct result of the Seller’s request or any action taken by or at the request of the Seller pursuant to (A) above;

 

(C)                               the Seller’s rights pursuant to this paragraph 8 shall not include the right to oblige the Company, the Purchaser, or any other member of the Purchaser’s Group to take proceedings against any counterparty to any agreement or arrangement to which the Company, the Purchaser or any member of the Purchaser’s Group is a party or to take any action in the name of the Company, the Purchaser or any other member of the Purchaser’s Group;

 

(D)                               where the Seller has conduct of a third party claim:

 

(i)                                     the Seller shall keep the Purchaser fully and promptly informed of any material developments with regard to the conduct of the third party claim, shall consult the Buyer on any matter which is or is reasonably likely to be material in relation to the third party claim, and shall take account of all reasonable requirements of the Buyer in relation to such third party claim; and

 

(ii)                                  the Seller shall not make any settlement or compromise of the third party claim or agree to any matter in the conduct of such third party claim which may affect the amount of the liability in connection with such third party claim without the prior approval of the Purchaser (such approval not to be unreasonably withheld or delayed).

 

69

 

9.                                      DUTY TO MITIGATE

 

The Purchaser shall (and shall procure that the Company and any other relevant member of the Purchaser’s Group shall) in relation to any Losses which might give rise to a claim under the Warranties against the Seller take all reasonable steps subject to and in accordance with its common law duty to mitigate its loss.

 

70

 

SCHEDULE 6
 THE PROPERTIES

 

	
Landlord
    	
 
    	
Tenant
    	
 
    	
Description
    	
 
    	
Date of Lease
    
	
Spearhead Property Holdings Limited
    	
 
    	
Fusion Outsourcing Services Proprietary   Limited
    	
 
    	
Fusion House

Knowledge Park (II)

Heron Crescent

Century City

Milnerton

7435

 

6 year lease commencing 1 April 2007
    	
 
    	
Signed by Tenant on 12 October 2006

 

 

Signed by Landlord on 23 October 2006
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
The Johannesburg Land Company (Pty) Limited
    	
 
    	
Fusion Outsourcing Services Proprietary   Limited
    	
 
    	
45 Commissioner Street

5th and 6th Floor

Life Style Centre

Johannesburg

2001

 

From 1 June 2011 to 31 May 2013
    	
 
    	
Signed by Sub Lessee (Fusion SA) on 30   September 2011

 

 

 

Signed by Sub Lessor on 5 March 2012
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
StorAge Self Storage (Pty) Ltd
    	
 
    	
Fusion Outsourcing Services Proprietary   Limited
    	
 
    	
Storage facility

Units #90, #91, #92

64-74 White Road

Tokai

Cape Town
    	
 
    	
12 May 2010
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Docufile Cape (Pty) Ltd
    	
 
    	
Fusion Outsourcing Services Proprietary   Limited
    	
 
    	
Offsite data storage site
    	
 
    	
Signed by the Company on 24 March 2012
    

 

71

 

SCHEDULE 7

COMPLETION ACCOUNTS

 

1.                                      INTERPRETATION

 

In this Schedule 7, save as the context may otherwise require:

 

“Accounts” means the annual financial statements for the year ended 30 June 2011 in relation to the Company including the independent auditor’s report and directors’ report thereto;

 

“Actual Working Capital Value” means the aggregate value represented by the line item “Total Current Assets” as determined pursuant to the statement set out in Annex 1 (Pro forma Completion Accounts Statement) (excluding Cash) of the Company less the value represented by the line item “Total Current Liabilities” as determined pursuant to the statement set out in Annex 1 (Pro forma Completion Accounts Statement) of the Company in each case as at the Completion Accounts Date;

 

“Ambition House Deposit” means the amount of ZAR 410,540 paid by the Company on or around 25 May 2012 in respect of the deposit for the premises at 4th Floor, Ambition House, 107 Voortrekker Road, Bellville, Cape Town;

 

“Cash” means cash of whatever currency including cash at bank and uncleared items banked by the Company in each case as at the Completion Accounts Date less an amount of ZAR1,500,000;

 

“Completion Accounts Date” means 23:59 on 31 May 2012;

 

“Debts” means any debt or other liability payable to or owing by the Company by or to any third party or any member of the Seller’s Group as at the Completion Accounts Date which is in excess of the amount of the BGL Group Loan (and, for the avoidance of all doubt, such debt or liability does not include any trade debt owed in the ordinary course of business or any Taxation liability) as at the Completion Accounts Date;

 

“Net Cash Adjustment Amount” means such amount calculated as at the Completion Accounts Date pursuant to and in accordance with the provisions of this Schedule 7 as follows: (i) Cash plus (ii) Ambition House Deposit less (iii) Debts;

 

“Reference Date” means 31 December 2011 (being the date of the latest management accounts of the Company); and

 

“Target Working Capital Value” means ZAR 14,000,000.

 

2.                                      FORM

 

2.1                               The Completion Accounts shall consist of a statement of the Company as at the Completion Accounts Date showing the Actual Working Capital Value in the same (or substantially the same) form as the pro forma completion accounts statement set out in Annex 1 (Pro forma Completion Accounts Statement) of this Schedule 7 and to be prepared in accordance with, and subject to, the provisions of this Schedule 7.

 

72

 

2.2                              The hierarchy of requirements applicable to the preparation of the Completion Accounts shall be as follows:

 

(a)                                 firstly, the specific requirements of paragraph 2.3 shall be applied;

 

(b)                                 secondly, subject to paragraph 2.2(a), the Completion Accounts shall be prepared on a basis consistent with the Accounts, and applied in the same way and following the same methodologies, bases, techniques, policies and principles (including as to the application of all practices, judgments, procedures, estimates, evaluation rules, forecasts and opinions) as those adopted and applied in the preparation of the Accounts; and

 

(c)                                  finally, subject to paragraphs 2.2(a) and (b), the Completion Accounts shall be prepared in accordance with accounting and actuarial principles, methodologies and assumptions generally accepted in the Republic of South Africa.

 

2.3                               In preparing the Completion Accounts (and valuing and determining all relevant assets and liabilities):

 

(a)                                 the Completion Accounts principles set out in Annex 2 (Completion Accounts principles) shall be followed;

 

(b)                                 no provision shall be made for deferred tax, whether as an asset or a liability;

 

(c)                                  preparation shall be on the assumption that the Completion Accounts Date constitutes a normal Financial Year end;

 

(d)                                 they shall be prepared so as to include no account, accrual or provision in respect of profits, gains, benefits or assets (whether actual or contingent) nor any charge, provision, reserve or write-off in respect of any costs, liabilities or charges to be obtained or incurred (as the case may be) after the Completion Accounts Date as a consequence of the change of ownership of the Company or any future change in management strategy, direction or priority or possible closure of any business (or part thereof) or otherwise; and

 

(e)                                  other than for items explicitly covered by the Completion Accounts principles set out in Annex 2 (Completion Accounts principles), they shall otherwise be prepared so as (i) to take account of events or changes of circumstance occurring or information coming to the attention of the Purchaser or Seller after the Completion Date but (ii) not to take account of events or changes of circumstance occurring or information coming to the attention of the Purchaser or Seller after the expiry of the Review Period.

 

3.                                      PREPARATION

 

3.1                               The Seller shall procure that the Seller’s Accountants in conjunction with the Company shall prepare draft Completion Accounts in accordance with this Schedule 7, and for a copy to be delivered to the Purchaser (together with such working papers and other information as may be reasonably requested by the Purchaser relating to the preparation of the Completion Accounts including the calculation of the Actual Working Capital Value in the draft Completion Accounts as are necessary, appropriate or desirable to understand them), as soon as practicable after Completion and, in any event, by no later than 31 July 2012. At the time of delivery of the draft Completion Accounts, the Seller shall use all reasonable endeavours to procure that the Seller’s Accountants deliver to the Purchaser (and shall in any event ensure such delivery by no later than 31 July 2012) a draft statement of financial position, a draft statement of comprehensive income, and a draft statement of cash flows in each case in the same (or substantially the same) form as set out in Annex 1A (Other statements) as at the Completion Accounts Date in respect of the period from the Balance Sheet Date up to the Completion Accounts Date prepared in accordance with paragraph 2.2 above.

 

73

 

3.2                               The Purchaser shall, as soon as practicable and, in any event, no later than 20 days after receipt of the draft Completion Accounts from the Seller (the “Review Period”), notify the Seller in writing either that it:

 

(a)                                 approves the draft Completion Accounts; or

 

(b)                                 disagrees with the draft Completion Accounts explaining in reasonable detail the matter(s) it disagrees with and the reason(s) for that disagreement.

 

3.3                               If the Purchaser fails to notify the Seller in accordance with paragraph 3.2, the draft Completion Accounts shall, on the expiry of the Review Period, become final and binding on the Purchaser and the Seller (except in the case of manifest error).

 

3.4                               If the Purchaser notifies the Seller in accordance with paragraph 3.2(a) that it approves of the draft Completion Accounts, they shall immediately become final and binding on the Purchaser and the Seller (except in the case of manifest error).

 

3.5                               If the Purchaser issues a notification in accordance with paragraph 3.2(b) within the Review Period, the Purchaser and the Seller shall use their reasonable endeavours to resolve the matter or matters in dispute. Any resolution which enables the draft Completion Accounts to be agreed shall be expressed in a joint confirmation (the “Joint Confirmation”) which shall:

 

(a)                                 be signed by both the Purchaser and the Seller; and

 

(b)                                 contain those final Completion Accounts as agreed between the Seller and the Purchaser, which shall be final and binding on the Buyer and the Seller (except in the case of manifest error).

 

3.6                               If, following the issue of a notification by the Purchaser in accordance with paragraph 3.2(b), no Joint Confirmation shall be issued within 20 Business Days after the expiry of the Review Period, the matter shall be referred to a firm of independent chartered accountants located in the Republic of South Africa (the “Independent Accountants”) as the Purchaser and the Seller shall jointly agree or, in default of agreement within 10 Business Days after the expiry of the period of 20 Business Days referred to above in this paragraph 3.6 as to the choice of independent chartered accountants or the terms of appointment, the Independent Accountants shall be appointed by the CEO of the South African Institute of Chartered Accountants (“SAICA”) (or any successor body or person thereto) on the application of either the Seller or the Purchaser. The decision of the Independent Accountants (and the final Completion Accounts confirmed by the Independent Accountants) appointed by SAICA shall be final and binding (except in the case of manifest error) on each of the Purchaser and the Seller. SAICA’s role shall cease on the appointment of the Independent Accountants.

 

3.7                               The Independent Accountants shall determine the matter or matters in dispute addressed in an objection notice delivered in accordance with paragraph 3.2(b) and shall confirm the correct amount to be included in the final Completion Accounts in respect of each matter in dispute. The Independent Accountants shall act as experts and not as arbitrators and shall be directed to determine the matter or matters in dispute by reference to paragraph 2 (Form) of this Schedule 7. Their decision (and the final Completion Accounts confirmed by them) shall be final and binding (except in the case of manifest error) on each of the Purchaser and the Seller. The Independent Accountants shall be instructed to deliver their determination as soon as practicable to the Seller and the Purchaser and in any event by no later than 30 Business Days following their appointment and they shall be entitled to instruct actuaries, valuers, solicitors and other professional advisers (if appropriate) to assist them in reaching their determination.

 

74

 

3.8                               The Purchaser and the Seller shall use their reasonable endeavours to procure that all records, working papers and other information within their respective possession or control as may be reasonably required by either of them (including, in the case of the Seller, its auditors), their respective professional advisers (to the extent relevant) and/or the Independent Accountants for the purposes of this Schedule 7, shall be made available on a request for them and shall generally render to each other and the Independent Accountants all assistance reasonably necessary for the preparation and finalisation of the Completion Accounts and/or, as the case may be, the Joint Confirmation or Independent Accountants’ decision. The Purchaser shall provide and shall procure that the Company shall provide without charge such reasonable access to its personnel (who shall be instructed to give prompt information and explanations) as the Seller and/or its auditors or the Independent Accountants may request provided that the Purchaser shall not be obliged to provide such access to its personnel to the extent that the provision of such access has or would adversely prejudice the Purchaser, the Company or any member of the Purchaser’s Group (in each case such entity acting reasonably).

 

3.9                               The costs, charges and expenses incurred in connection with, and incidental to, the matters specified in this Schedule 7 shall be payable as follows:

 

(a)                                 costs, charges and expenses incurred by the Seller shall be paid by the Seller;

 

(b)                                 costs, charges and expenses incurred by the Purchaser shall be paid by the Purchaser; and

 

(c)                                  the costs of the Independent Accountants (including the fees of any professional advisers appointed by the Independent Accountants as aforesaid) shall be borne by the Seller and the Purchaser in equal shares or in such other proportions as the Independent Accountants may otherwise direct.

 

If either party shall fail to pay such costs in accordance with the provisions of this paragraph, the other party may in its absolute discretion pay such fees on the first party’s behalf and the first party shall reimburse the other on demand all costs and expenses incurred by the other in so doing.

 

75

 

ANNEX 1

INDICATIVE PRO FORMA COMPLETION ACCOUNTS STATEMENT

 

	
 
    	
 
    	
 
    	
 
    	
ACTUAL
   WORKING
   CAPITAL
   ADJUSTMENTS
    ZAR
    (A)
    	
 
    
	
Trade receivables   external (excluding intra-group receivables)
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Prepayments
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Accrued income
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Other Debtors
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Total   Current Assets
    	
 
    	
(a)
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Trade payables   external
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Sundry Creditors
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Other Accruals
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Deferred Income
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Provisions
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Total   Current Liabilities
    	
 
    	
(b)
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Actual   Working Capital Value
    	
 
    	
(a)-(b)
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Less:   Target Working Capital Value
    	
 
    	
 
    	
 
    	
14,000,000
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Working   Capital Adjustment  
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Plus Cash
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Plus/minus   Debts
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

76

 

ANNEX 1A

OTHER STATEMENTS

 

Statement of Financial Position

 

	
 
    	
 
    	
As at
    	
 
    
	
 
    	
 
    	
31 May 2012
    	
 
    	
30 June 2011
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Assets
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Non-Current   assets:
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Property and   equipment
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Deferred tax
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Total non-current   assets
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Current   assets
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Trade and other   receivables
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Cash and cash   equivalents
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Current tax   receivable
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Total current   assets
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Total Assets
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Equity and Liabilities
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Equity
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Share Capital
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Retained Earnings
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Liabilities
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Non-current   liabilities
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Shareholder’s loan
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Other financial   liabilities
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Current   Liabilities
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Other financial   liabilities
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Trade and other   payables
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Deferred Income
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Total Equity and Liabilities
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

77

 

Statement of Comprehensive Income

 

	
 
    	
 
    	
For the 11
   month period
   ended 31 May
   2012
    	
 
    	
For the 12 month
   period ended 30
   June 2011
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Service fees
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Cost of sales
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Gross   Profit
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Other Income
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Operating Expense
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Operating   (loss)/profit
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Finance income
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Finance costs
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
(Loss)/profit   before taxation
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Taxation
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
(Loss)/profit   for the year
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

78

 

Statement of Cash Flows

 

	
 
    	
 
    	
For the 11
   month period
   ended 31 May
   2012
    	
 
    	
For the 12 month
   period ended 30
   June 2011
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Cash flows from operating activities 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Cash receipts from   customers
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Cash paid to   suppliers and employees
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Cash utilized in   operations
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Finance income   received
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Finance costs paid
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Taxation   received/(paid)
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Net   cash outflow from operating activities
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Cash flows from investing activities
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Additions to   property and equipment
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Proceeds from   shareholder’s loan
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Repayment from   shareholder’s loan
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Net   cash inflow from investing activities
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Cash flows from financing activities
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Repayment of other   financial liabilities
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Net Cash outflows from financing activities
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Total   cash movement for the period/year
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Cash and cash   equivalents at the beginning of period/year
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Cash   and cash equivalents at the end of period/year
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

79

 

ANNEX 2

COMPLETION ACCOUNTS PRINCIPLES

 

1.1                               Materiality

 

In preparing the Completion Accounts, no minimum materiality limits shall be applied.

 

1.2                               Tangible Fixed Assets

 

(a)                                 In the absence of a clear change in facts or circumstances between the Reference Date and the Completion Accounts Date, no fixed assets held at the Reference Date shall be impaired or revalued before or as at the Completion Accounts Date.

 

(b)                                 Fixed Assets shall be valued at zero for the purpose of the Completion Accounts.

 

1.3                               Intangible Fixed Assets

 

No intangible assets were recorded as at the Reference Date and the asset for “Software Development” reported as at the Reference Date as a tangible fixed asset shall be consistently reported as such as at the Completion Accounts Date.

 

Intangible Fixed Assets shall be valued at zero for the purpose of the Completion Accounts.

 

1.4                               Stock

 

Stock shall be deemed for the purposes of the Completion Accounts to be nil.

 

1.5                               Trade and other receivables

 

(a)                                 Trade receivables

 

The Completion Accounts shall be prepared recognising as an asset all revenues which are proportionately due for services and goods supplied for the period prior and up to and including the Completion Accounts Date.  The recognition of revenue shall be consistent to that used as at the Reference Date.  Trade receivables shall be the sum of amounts that have been billed and not yet paid plus amounts not yet billed but in respect of which services have been supplied.

 

Appropriate allowances for estimated unrecoverable amounts are included here when there is objective evidence that the asset is impaired.  The allowance recognised as an asset shall be measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at the effective interest rate computed at initial recognition.

 

(b)                                 Prepayments

 

The Completion Accounts shall be prepared on a consistent basis as the Accounts recognising an asset for services and supplies paid in advance of the benefit proportionately accruing.

 

(c)                                  Accrued income

 

The Completion Accounts shall be prepared on a consistent basis as the Accounts recognising an asset for services and supplies provided in advance of them becoming due for invoice or receipt from the customer.

 

(d)                                 Other debtors

 

Other debtors shall comprise any other receivable amounts not included in 1.5(a), (b) or (c) above (and, for the avoidance of all doubt, shall not include any intra-group receivables).

 

80

 

1.6                               Cash and Cash Equivalents

 

(a)                                 Cash at bank shall include uncleared items banked by the Company on or before the Completion Accounts Date provided these uncleared items are cleared before finalisation of the Completion Accounts.

 

(b)                                 Cash at bank shall be subject to a deduction for uncleared payments processed by the Company on or before the Completion Accounts Date provided these uncleared payments are cleared prior to finalisation of the Completion Accounts.

 

1.7                               Preference Shares

 

Preference Shares to the extent not redeemed prior to the Completion Accounts Date shall be deemed to be nil.

 

1.8                               Trade and Other Payables

 

(a)                                 Trade payables

 

Trade payables shall be the sum of amounts that have been billed and not yet paid plus amounts not yet billed but where services have been used.

 

(b)                                 Sundry creditors

 

The Completion Accounts shall be prepared on a consistent basis as the Accounts with regard to sundry creditors.

 

(c)                                  Deferred income

 

The Completion Accounts shall be prepared on a consistent basis as the Accounts recognising a liability as at the Completion Accounts Date for revenue from customers either received or invoiced in advance of the goods and services being provided determined on a pro-rata basis and including any unamortised element of government grants received.

 

(d)                                 Other accruals

 

Other accruals shall comprise any other amounts payable relating to any period prior to the Completion Accounts Date to the extent not included pursuant to paragraph 1.8 (a) to (c) above.

 

The Completion Accounts shall be prepared on a consistent basis as the Accounts recognising a liability for services and supplies paid in advance of the benefit proportionately determined on a pro-rata basis.

 

81

 

1.10                        Provisions

 

(a)                                 Leave provision

 

An accrual shall be included in the Completion Accounts in respect of staff holiday accrued but not taken as at the Completion Accounts Date.

 

(b)                                 Restructuring

 

No provision shall be made in the Completion Accounts for any reorganisation, restructuring, redundancy or early retirement or related costs arising in connection with the disposal of the Company or any decision taken by the Purchaser.

 

(c)                                  Provisions/accruals

 

Provisions/accruals shall be made in the Completion Accounts for all expenses incurred up to (and including) the Completion Accounts Date.

 

(d)                                 Bonus accruals

 

An accrual shall be made in the Completion Accounts for any employee bonuses (which shall be inclusive of any Tax thereon) earned in respect of any period prior to (and including) the Completion Accounts Date.

 

(e)                                  Commission and Overtime

 

An accrual shall be made in the Completion Accounts for all commissions and overtime earned in respect of any period prior to (and including) the Completion Accounts Date.

 

(f)                                   Employee contributions

 

An accrual shall be made in the Completion Accounts in respect of any deduction made from employee salaries in respect of employee contributions to the Company’s pension scheme but in circumstances where such deduction has not yet been paid to the pension scheme.

 

(g)                                  Provision for Tax

 

Provision for all Tax payable (including VAT) shall be made in the Completion Accounts up to (and including) the Completion Accounts Date other than in respect of any corporation Tax.

 

1.11                        Post-balance sheet events

 

Without prejudice to paragraph 3.2 of this Schedule 7, any adjusting post balance sheet events arising up to the date of delivery of the draft Completion Accounts shall be taken into account in the Completion Accounts.

 

1.12                        Exchange rates

 

Monetary assets and liabilities in currencies other than ZAR shall be translated into ZAR at the relevant exchange rate used by the Seller in preparing the Completion Accounts (such rate to be applied on a consistent basis for the purpose of preparing the Completion Accounts, such rate being derived by reference to the closing mid market rate for 31 May 2012 for the South African Reserve Bank).

 

82

 

1.13                        Currency

 

The Completion Accounts shall be prepared in the functional currency of the Company, which is ZAR.

 

83

 

SCHEDULE 8
 DATA ROOM INDEX

 

 

84

 

 

85

 

 

86

 

 

87

 

 

88

 

 

89

 

 

90

 

 

91

 

 

92

 

 

93

 

 

94

 

 

95

 

 

96

 

 

97

 

 

98

 

 

99

 

 

100

 

 

101

 

 

102

 

 

103

 

 

104

 

 

105

 

 

106

 

 

107

 

 

108

 

 

109

 

 

110

 

 

111

 

 

112

 

Index of Disclosure Bundle Documents

 

	
Document
    	
 
    	
Description
    
	
A
    	
 
    	
Springbok   — Disclosure Bundle Document A — List of Assets Acquired.xlsx
    
	
B
    	
 
    	
Springbok   — Disclosure Bundle Document B — Software Quote-MC Changes.xlsx
    
	
C
    	
 
    	
(a) Springbok   — Disclosure Bundle Document C — list of employees.xlsx

(b) Springbok   — Disclosure Bundle Document C — New Starters and Leavers since   July 2011.xlsx
    
	
D
    	
 
    	
(a) Springbok   — Disclosure Bundle Document D — FW Our discussion.msg

(b) Springbok   — Disclosure Bundle Document D — 3FIN_A_General Tax Directive_J Kunz.pdf

(c) Springbok   — Disclosure Bundle Document D — 3FIN_A_General Tax Directive_Ovdw.pdf

(d) Springbok   — Disclosure Bundle Document D — 120308 Excocomp DL v3.0.xlsx
    
	
E
    	
 
    	
(a) Springbok   — Disclosure Bundle Document E — Tax Submissions.pdf

(b) Springbok   — Disclosure Bundle Document E — Proof of Tax Filing Submission.pdf
    
	
F
    	
 
    	
(a) Springbok   — Disclosure Bundle Document F — Consent Letter — Gresham.pdf

(b) Springbok   — Disclosure Bundle Document F — Consent Letter — Lloyds.pdf
    
	
G
    	
 
    	
Springbok   — Disclosure Bundle Document G — Inter-company letters UK.pdf
    
	
H
    	
 
    	
Springbok   — Disclosure Bundle Document H — Board minutes.pdf
    
	
I
    	
 
    	
(a) Springbok   — Disclosure Bundle Document I — Assets identified for write-off @ May, 12 —   Final.xlsx

(b) -   Springbok — Disclosure Bundle Document I — List of Assets disposed.xlsx
    
	
J
    	
 
    	
Springbok   — Disclosure Bundle Document J — Standard Bank Guarantee cancellation   confirmation.TIF
    
	
K
    	
 
    	
Springbok   — Disclosure Bundle Document K — Maternity and Long term sickness
    
	
L
    	
 
    	
(a) Springbok   — Disclosure Bundle Document L — Preference Share Board Minutes.xlsx.pdf

(b) Springbok   — Disclosure Bundle Document L — Preference Shares confirmation 160412.pdf

(c) Springbok   — Disclosure Bundle Document L — Pref Shares.pdf
    
	
M
    	
 
    	
(a) Springbok   — Disclosure Bundle Document M — Fusion Loan Documents.pdf

(b) Springbok   — Disclosure Bundle Document M — Loan Amendment 31122010.pdf

(c) Springbok   — Disclosure Bundle Document M - Loan Amendment 30122011.pdf

(d) Springbok   — Disclosure Bundle Document M - Loan Amendment 31122009.pdf
    
	
N
    	
 
    	
(a) Springbok   — Disclosure Bundle Document N — Vodacom Fusion MSA Signed.pdf

(b) Springbok   — Disclosure Bundle Document N — Vodacom Fusion SS1 Signed.pdf

(c) Springbok   — Disclosure Bundle Document N — Vodacom Fusion SS2 Signed.pdf
    
	
O
    	
 
    	
Springbok   — Disclosure Bundle Document O — First Technology Purchase Order.pdf
    
	
P
    	
 
    	
Springbok   — Disclosure Bundle Document P — Proof of Payment.pdf
    
	
Q
    	
 
    	
(a) Springbok   — Disclosure Bundle Document Q — Consent to Sublease.pdf

(b) Springbok   — Disclosure Bundle Document Q — Life Centre Lease.pdf
    

 

113

 

	
R
    	
 
    	
(a) Springbok   — Disclosure Bundle Document R — FSA register.pdf

(b) Springbok   — Disclosure Bundle Document R — Fusion SA removal.pdf
    
	
S
    	
 
    	
(a) Springbok   — Disclosure Bundle Document S — SARB Notification.htm

(b) Springbok   — Disclosure Bundle Document S — Notification Letter.pdf

(c) Springbok   — Disclosure Bundle Document S — SARB approval.pdf
    
	
T
    	
 
    	
(a) Springbok   — Disclosure Bundle Document T — Fusion Directors’ Resolution.pdf

(b) Springbok   — Disclosure Bundle Document T - Fusion Shareholders’ Resolution.pdf

(c) Springbok   — Disclosure Bundle Document T - Fusion waiver of notice and interest of   redemption of preference shares.pdf
    
	
U
    	
 
    	
(a) Springbok   — Disclosure Bundle Document U — 120521 First Tech Licenses payment.pdf

(b) Springbok   — Disclosure Bundle Document U — Spescom.pdf
    
	
V
    	
 
    	
Springbok   — Disclosure Bundle Document V — 120530 signed offer to rent.pdf
    
	
W
    	
 
    	
Springbok   — Disclosure Bundle Document W — Letter of Agreement Teraco.pdf
    
	
X
    	
 
    	
(a) Springbok   — Disclosure Bundle Document X — KUNX JJ — 2012 3rd Provisional.pdf

(b) Springbok   — Disclosure Bundle Document X — Payment — SARS IRP6 — 250412.pdf

(c) Springbok   — Disclosure Bundle Document X — VAN DER WALT OL — 2012 3rd Provisional.pdf
    
	
Y
    	
 
    	
Springbok   — Disclosure Bundle Document Y — list of employee potential claims against   Fusion.xls
    

 

114

 

SCHEDULE 9
 SECOND INSTALMENT ADJUSTMENT MECHANISM

 

1.                                      AGREED CLAIM

 

If prior to the Second Instalment Payment Date, the Purchaser has notified the Seller of a claim in accordance with the provisions of clause 22 of this Agreement to the extent it relates to a breach of clause 13.1 of the Agreement (Restrictions on the Activities of the Seller), then if the claim is agreed or settled or otherwise determined but not yet paid prior to that date, it shall be deducted from the Second Instalment and the balance of the Second Instalment shall otherwise be payable subject to and in accordance with the terms of this Agreement, and to the extent such claim exceeds the amount of the Second Instalment, then the balance of such claim shall be deducted from the Second Loan Instalment and the balance of the Second Loan Instalment shall otherwise be payable subject to and in accordance with the terms of this Agreement.

 

2.                                      NOT AGREED CLAIM

 

2.1                               If prior to the Second Instalment Payment Date, the Purchaser has notified the Seller of a claim in accordance with the provisions of clause 22 of this Agreement to the extent it relates to a breach of clause 13.1 of the Agreement (Restrictions on the Activities of the Seller), then if the claim is not agreed or settled or otherwise determined prior to that date, then:

 

(a)                                 if the Seller accepts or is minded to accept liability but disputes quantum, and indicates what quantum is accepted by the Seller (acting in good faith), the amount which shall be deducted from the Second Instalment (and to the extent relevant the Second Loan Instalment in accordance with paragraph 1 above) shall be the average of the quantum indicated by the Purchaser (acting in good faith) and the quantum indicated by the Seller acting in good faith (this average amount being the “Agreed Escrow Amount”) and the balance of the Second Instalment (and to the extent relevant the balance of the Second Loan Instalment in accordance with paragraph 1 above) (if any) shall otherwise be payable subject to and in accordance with the terms of this Agreement; or

 

(b)                                 if the Seller disputes liability and/or quantum for whatever reason or accepts or is minded to accept liability but disputes quantum and does not indicate what quantum may be accepted by the Seller (anything in relation to any of these matters being a “Dispute”), then the Dispute shall be determined by an expert appointed pursuant to paragraph 3 below, and an amount being the lower of:

 

(i)                                     the amount of the Second Instalment and the Second Loan Instalment (taken together); or

 

(ii)                                  50% of the claim notified by the Purchaser (in good faith),

 

(such amount being the “Disputed Escrow Amount”) shall be deducted from the Second Instalment (and to the extent relevant the Second Loan Instalment in accordance with paragraph 1 above), and the balance of the Second Instalment (and to the extent relevant the balance of the Second Loan Instalment in accordance with paragraph 1above) (if any) shall otherwise be payable subject to and in accordance with the terms of this Agreement.

 

2.2                               The Agreed Escrow Amount and/or the Disputed Escrow Amount shall be paid into the Escrow Account (as defined in paragraph 4 below).

 

115

 

2.3                               Any acceptance of liability and/or quantum by the Seller or the Purchaser pursuant to paragraph 2.1 shall be without prejudice to the Seller’s rights or the Purchaser’s rights in connection with such claim (including the right to subsequently dispute the basis and/or quantum of such claim) and shall not amount to any admission for the purposes of legal liability on the part of the Seller or the Purchaser.

 

3.                                      EXPERT’S APPOINTMENT

 

3.1                               An Expert is a person appointed in accordance with this paragraph 3 (“Expert”) to resolve a Dispute.

 

3.2                               The parties shall agree on the appointment of an independent Expert and shall agree with the Expert the terms of his appointment.

 

3.3                               If the parties are unable to agree on an Expert or the terms of his appointment within five Business Days of either party serving details of a suggested expert on the other, either party shall then be entitled to request an independent firm of accountants (with experience of considering dispute relations to alleged breaches of restrictive covenants) to be appointed in the absence of agreement by the parties within 5 Business Days of either party’s notice to the other by the President of the Institute of Chartered Accountants of England and Wales from time to time on the written request of either party.

 

3.4                               The Expert shall be required to prepare a written decision and give notice (including a copy) of the decision to the parties within a maximum of one calendar month of the matter being referred to the Expert.

 

3.5                               If the Expert dies or becomes unwilling or incapable of acting, or does not deliver the decision within the time required by paragraph 3.4 then:

 

(a)                                 either party may apply to the President of the Institute of Chartered Accountants of England and Wales from time to time to discharge the Expert and to appoint a replacement Expert with the required expertise; and

 

(b)                                 this paragraph 3 shall apply to the new Expert as if he were the first Expert appointed.

 

3.6                               All matters under this paragraph 3 must be conducted, and the Expert’s decision shall be written, in the English language.

 

3.7                               The parties are entitled to make submissions to the Expert including oral submissions and will provide (or procure that others provide) the Expert with such assistance and documents as the Expert reasonably requires for the purpose of reaching a decision.

 

3.8                              To the extent not provided for by this paragraph 3, the Expert may in his reasonable discretion determine such other procedures to assist with the conduct of the determination as he considers just or appropriate, including (to the extent he considers necessary) instructing professional advisers to assist him in reaching his determination.

 

3.9                               Each party shall with reasonable promptness supply each other with all information and give each other access to all documentation and personnel and/or things as the other party may reasonably require to make a submission under this paragraph 3.

 

3.10                        The Expert shall act as an expert and not as arbitrator.  The Expert shall determine the Dispute (which may include any issue involving the interpretation of any provision of this Agreement, his jurisdiction to determine the matters and issues referred to him/or his terms of reference).  The Expert’s written decision on the matters referred to him shall be final and binding on the parties in the absence of manifest error or fraud.

 

116

 

3.11                        Each party shall bear its own costs in relation to the reference to the Expert.  The Expert’s fees and any costs properly incurred by him in arriving at his determination (including any fees and costs of any advisers appointed by the Expert) shall be borne by the parties equally or in such other proportions as the Expert shall direct.

 

3.12                        All matters concerning the process and result of the determination by the Expert shall be kept confidential among the parties and the Expert.

 

3.13                        Each party shall act reasonably and co-operate to give effect to the provisions of this paragraph 3 and otherwise do nothing to hinder or prevent the Expert from reaching his determination.

 

3.14                        Following the Expert’s determination, if the Expert determines that:

 

(a)                                 the subject matter of the Dispute involves a valid claim and the Expert has advised on quantum, then such amount (the “Determined Amount”) shall be deducted from the relevant Agreed Escrow Amount or the Disputed Escrow Amount (as the case may be) and shall be paid to the Purchaser with interest accrued thereon, and the balance (if any) shall be paid to the Seller with interest accrued thereon, and should the Determined Amount exceed the relevant Agreed Escrow Amount or the Disputed Escrow Amount (as the case may be), then the relevant Agreed Escrow Amount or the Disputed Escrow Amount (as the case may be) shall be paid to the Purchaser with interest accrued thereon, and any additional amount owing by the Seller to the Purchaser shall be paid to the Purchaser by the Seller; or

 

(b)                                 the subject matter of the Dispute does not involve a valid claim or the Expert is not able to determine the Dispute or is not able to advise on quantum for whatever reason or does not provide a determination for whatever reason by not later than 6 months following his appointment, then the relevant Agreed Escrow Amount or the Disputed Escrow Amount (as the case may be) (together with accrued interest thereon) shall be paid to the Seller.

 

3.15                        The parties agree that subject to any relevant provision of this Agreement:

 

(a)                                 any amount paid into the Escrow Account shall not be regarded as imposing any limit on the amount of any claim under clause 13.1 of this Agreement; and

 

(b)                                 nothing in this Schedule 9 shall prejudice, limit or otherwise affect any right, including to make any claim, or remedy which the Purchaser may have from time to time against the Seller either under this Agreement or under any of the documents executed pursuant to this Agreement.

 

4.                                      ESCROW ACCOUNT

 

4.1                               Pending the resolution of the Dispute by the Expert, the parties hereby agree and acknowledge that:

 

(a)                                 the Agreed Escrow Amount or the Disputed Escrow Amount (as the case may be) (either being the “Escrow Amount”) shall be placed into a separately designated interest bearing account to be opened by way of a letter in substantially the form set out in Schedule 2 (Letter of Instruction to Bank) in the names of [·] and [·] (the “Joint Account”) which account shall be free from any lien, charge, encumbrance, set off or counterclaim (other than as referred to in this Agreement);

 

117

 

(b)                                 the Joint Account shall be operated jointly by [·] and [·] in accordance with the letter of instructions in substantially the form as set out in Annex 1 (“Letter of Instructions”) which shall be delivered to [·] and [·] by no later than [·] signed by the Seller and the Purchaser;

 

(c)                                  the Seller and the Purchaser agree that upon either or both of them becoming entitled in accordance with the Agreement to payment out of the Joint Account they each shall give joint written instructions to [·] and [·] in substantially the form set out in Schedule 1 to the Letter of Instructions to procure the release of sums from the Joint Account in accordance with the terms of this Agreement;

 

(d)                                 no amount (including interest) shall be paid out of the Joint Account save as expressly permitted under this Agreement or the Letter of Instructions;

 

(e)                                  any interest which accrues on the monies held in the Joint Account shall (after any required deductions on account of taxation on interest by either or both of [·] and [·] in accordance with the Letter of Instructions) be credited to the Joint Account. Upon the whole or any part of the amount standing in the Joint Account being released to any party the recipient shall be entitled to any interest which has accrued on the principal amounts so released and such interest shall be paid at the same time as the principal amount is so released.

 

5.                                      COURTS’ JURISDICTION

 

In the circumstances referred to in paragraph 3.14(b) where the Expert is not able to determine the matter for whatever reason, then ultimately the courts shall have jurisdiction to settle the matter in accordance with clause 23 of the Agreement.

 

6.                                      OTHER

 

For the purpose of this Schedule 9 only, any reference to “parties” shall be deemed to be a reference to the Seller and the Purchaser only.

 

118

 

Annex 1

 

Letter of Instructions

 

To:                             [·]

 

and

 

	
[·]
    	
 
    	
[Date]
    

 

Dear Sirs

 

Agreement: arrangements regarding Escrow Account

 

We, [·] (“[·]”) and [·] (“[·]”), write in connection with the Agreement entered into on [·] June 2012 between, amongst others, BFSL Limited as seller and WNS Global Services (UK) Limited as purchaser in relation to the sale of Fusion Outsourcing Services Proprietary Limited (“Agreement”).

 

Any words and expressions used but not defined in this letter shall, unless the context requires otherwise, have the meanings given to them in the Agreement.

 

Under the Agreement, a sum of money the (“Escrow Amount”) may be paid into the Joint Account referred to in paragraph 1(a) (Instructions) at any time prior to 31 May 2013.

 

We are writing to confirm the terms on which the Joint Account is to be established and  any Escrow Amount is to be held on trust by your firms jointly for us.

 

1.                                      Instructions

 

You are irrevocably authorised and instructed by each of us as follows:

 

(a)                                 To set up as soon as possible a separately designated interest bearing bank account (“Joint Account”) with [·] plc [[·] Branch] [(sort code [·])] (“Bank”) in your joint names.  The mandate for the account shall require the Bank to make payment out of the Joint Account on receipt of joint written instructions signed by two duly authorised signatories of each of [·] and [·] and a letter shall be sent to the Bank in relation to the Joint Account in substantially the form set out in Schedule 2 (Letter of Instruction) to this letter.

 

(b)                                 To instruct the Bank to make a payment or payments out of the Joint Account upon your receiving either:

 

(i)                                     a written notice signed by or on behalf of each of us in substantially the form of that contained in Schedule 1 (Written Notice) to this letter; or

 

(ii)                                  an order, or a certified copy of an order, of a court of competent jurisdiction,

 

in either case requiring that payment to be made.

 

(c)                                  To permit the Bank to deduct any amounts of tax which are required by law to be deducted from the Joint Account or which the Bank considers are required by law or regulation to be deducted from the Joint Account.

 

119

 

(d)                                 To permit to be charged to the Joint Account any fees, charges, costs and expenses which the Bank may charge in connection with these arrangements.

 

(e)                                  To withdraw from the Joint Account an amount equal to the amount of tax (if any) on the interest earned in respect of the Joint Account for which you or either of you are or may become liable.

 

(f)                                   Neither of you shall exercise discretion in the operation and maintenance of the Joint Account and, subject to paragraphs 1(b) to (e), you shall not permit any withdrawals whatsoever from the Joint Account or otherwise pay any monies out of it.

 

The instructions set out in this paragraph 1 may only be varied or countermanded in writing signed by a director on behalf of each of us.

 

2.                                      Resignation

 

If either of you no longer wishes to be a joint holder of the Joint Account you may give each of us 10 days’ written notice, upon receipt of which we shall endeavour promptly to find an organisation to replace you as joint holder of the Joint Account.  We shall attempt to put the substitute arrangements in place by the expiration of the 10 day notice period or, if this has not proved possible, as soon as possible after that.  For the avoidance of doubt, you will continue to hold and operate the Joint Account in accordance with this letter until the substitute arrangements have been put in place.

 

3.                                      Communications

 

Each of you may rely on any written instruction or other communication in relation to the Joint Account from or signed by (or purporting to be from or signed by) a director on behalf of each of us.  Neither of you will be liable to either of us for doing so whether or not the instruction or other communication accords with the terms of the Agreement and is correct and has been validly authorised and whether or not any signature on it is authentic.

 

4.                                      Liability

 

(a)                                 Neither of you shall be liable for any losses, claims, demands, actions, proceedings, damages, payments, costs, expenses or other liabilities (“Losses”) arising from any sum not being received by the Bank (unless the non-receipt arises from the relevant firm’s negligence or wilful default) nor shall either of you be liable for any failure of the Bank to make any payment in accordance with any instructions given by you pursuant to this letter.

 

(b)                                 We acknowledge and confirm that:

 

(i)                                     neither of you shall have any obligation to either of us in respect of the establishment and operation of the Joint Account other than as expressly set out in this letter; and

 

(ii)                                  neither of us shall have any claim against either of your firms in respect of the establishment and operation of the Joint Account except and then only to the extent that the relevant firm has failed to act in accordance with its obligations under this letter.

 

120

 

5.                                      Indemnity

 

We jointly and severally undertake with each of you to indemnify and keep you indemnified against all Losses from time to time made, suffered or incurred by you in connection with or relating to the performance of your obligations in this letter or the omission to perform any of your obligations in this letter or otherwise in connection with the establishment and operation of the Joint Account, except that neither of your firms will be entitled to be indemnified in respect of any matter which arises out of that firm’s negligence or wilful default.

 

6.                                      Notices

 

(a)                                 Any notice, instruction or other communication given in accordance with this letter to  us must be given in writing and may be given in any manner agreed from time to time by a Relevant Person, provided that no such notice, instruction or other communication will take effect unless receipt of it is acknowledged in writing by a Relevant Person.

 

(b)                                 In this Paragraph 6, “Relevant Person” means, in respect of a notice, instruction or other communication given to:

 

(i)                                     [·], each of the following partners/members of that firm [·];

 

(ii)                                  [insert name of relevant firm], each of the following persons [·];

 

(iii)                               [insert name of relevant client], each of the following persons [·]; and

 

(iv)                              [insert name of relevant client], each of the following persons [·].

 

7.                                      Governing law and jurisdiction

 

This letter and any non-contractual obligations arising out of or in connection with this letter shall be governed by and construed in accordance with English law.  Each party irrevocably submits to the exclusive jurisdiction of the English courts to settle any dispute which may arise under or in connection with this letter or the legal relationships established by this letter.

 

Please countersign and return the attached copy of this letter to signify your acceptance of the instructions contained in it.

 

Yours faithfully

 

 

	
 
    	
 
    	
 
    
	
[·] [Limited]
    	
 
    
	
[By:  [·], Director]
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
[·] [Limited]
    	
 
    
	
[By:  [·], Director]
    	
 
    

 

121

 

[On copy]

 

We accept the instructions contained in the letter of which this is a copy.

 

 

	
 
    	
 
    	
 
    
	
[·]
    	
 
    
	
By:    [Partner] [Member] [Other]
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
[·] 
    	
 
    
	
By:    [Partner] [Member] [Other]
    	
 
    

 

122

 

SCHEDULE 1
 WRITTEN NOTICE

 

To:                             [·]

and                           [·]

 

[Date]

 

Dear Sirs

 

1.                                      We refer to:

 

(a)                                 [describe the Agreement]

 

(b)                                 a letter of instruction dated [·] from [·] and [·] to you (“Instruction Letter”); and

 

(c)                                  the Joint Account opened by you in your joint names with [·] Bank, [·] branch, account number [·] in accordance with the Instruction Letter.

 

2.                                      We jointly instruct you to pay:

 

(a)                                 the amount of £[figures] ([words] pounds sterling) from the Joint Account to [name of recipient] [at [details of bank];] and/or

 

(b)                                 the amount of £[figures] ([words] pounds sterling) from the Joint Account to [name of recipient] [at [details of bank];]

 

(in each case) by way of [banker’s draft] [electronic transfer].

 

3.                                      All words and expressions defined in the Instruction Letter shall have the same meanings in this letter.

 

Yours faithfully

 

 

	
 
    	
 
    	
 
    
	
[·] [Limited]
    	
 
    
	
[By:  [·], Director]
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
[·] [Limited]
    	
 
    
	
[By:  [·], Director]
    	
 
    

 

123

 

SCHEDULE 2
 LETTER OF INSTRUCTION TO BANK

 

To:                             [·] Bank plc
  [insert address]

 

[Date]

 

Dear Sirs

 

[Deposit] Account number [·]

 

We, [·] and [·], request you to open an interest bearing bank account in our joint names denominated “[·] and [·] joint account re [·]” (the “Joint Account”).

 

The following conditions shall apply to the Joint Account:

 

1.                                      All instructions for:

 

(a)                                 the variation of the terms on which monies are to be held on the Joint Account; or

 

(b)                                 the withdrawal of monies from the Joint Account,

 

shall be signed by any two of the members/partners/signatories of [·] whose signatures appear on the attached schedule together with any two of the members/partners/signatories of [·] whose signatures appear on the attached schedule.

 

2.                                      All interest accruing to the Joint Account shall be credited to the Joint Account at the Bank’s standard interval.

 

3.                                      Statements shall be supplied to both [·] (for the attention of [·]) and [·] (for the attention of [·]) monthly and at such other times when requested.

 

4.                                      Any alteration to the members or partners or other signatories authorised to sign on behalf of [·] or [·] will be advised to you by any two of the members or partners or other signatories of [·] or [·](as the case may be) listed on the attached schedule.

 

 

	
Signed
    	
 
    	
 
    	
 
    
	
[·]
    	
 
    
	
 
    	
 
    
	
Signed
    	
 
    	
 
    	
 
    
	
Partner, [·]
    	
 
    

 

124

 

Schedule of [Members] [Partners] [Others] signing for [·]

 

Full name

 

	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    

 

 

Schedule of [Members] [Partners] [Others] signing for [·]

 

 

Full name

 

	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    

 

125

 

EXECUTION:

 

	
SIGNED by IAN LEECH, Director,
    	
 
    	
)
    	
/s/ IAN LEECH
    
	
duly authorised for and on behalf of 
    	
 
    	
)
    	
 
    
	
BFSL LIMITED:
    	
 
    	
)
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
SIGNED by JOHNSON JAYARATNAM SELVADURAI,   Director,
    	
 
    	
)
    	
/s/ JOHNSON JAYARATNAM SELVADURAI
    
	
duly authorised for and on behalf of
    	
 
    	
)
    	
 
    
	
WNS GLOBAL SERVICES (UK)
    	
 
    	
)
    	
 
    
	
LIMITED:
    	
 
    	
)
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
SIGNED by KESHAV R MURUGESH, Director,
    	
 
    	
)
    	
/s/ KESHAV R MURUGESH
    
	
duly authorised for and on behalf of
    	
 
    	
)
    	
 
    
	
WNS (HOLDINGS) LIMITED:
    	
 
    	
)
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
SIGNED by IAN LEECH, Director,
    	
 
    	
)
    	
/s/ IAN LEECH
    
	
duly authorised for and on behalf of
    	
 
    	
)
    	
 
    
	
BGL GROUP LIMITED:
    	
 
    	
)
    	
 
    

 

126

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00216-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00216-of-00352.parquet"}]]