DATED 30th NOVEMBER 1995
ADT (UK) LIMITED
ADT LIMITED
ELECTRONIC SIGNATURES, INC.
and
CHECKPOINT SYSTEMS, INC.
AGREEMENT
for the sale and purchase
of Actron Group Limited
London
CONTENTS
CLAUSE PAGE
1. Interpretation . . . . . . . . . . . . . . . . . . . . . . . .
2. Condition Precedent. . . . . . . . . . . . . . . . . . . . . .
3. Sale and Purchase of the Shares. . . . . . . . . . . . . . . .
4. Repayment of the Group Loans and Satisfaction of the
Consideration
5. Escrow Account . . . . . . . . . . . . . . . . . . . . . . . .
6. Adjustments. . . . . . . . . . . . . . . . . . . . . . . . . .
7. Seller's Warranties. . . . . . . . . . . . . . . . . . . . . .
8. Tax Deed . . . . . . . . . . . . . . . . . . . . . . . . . . .
9. Completion . . . . . . . . . . . . . . . . . . . . . . . . .
10. Employees. . . . . . . . . . . . . . . . . . . . . . . . . .
11. Release of Guarantees. . . . . . . . . . . . . . . . . . . .
12. Non-Competition Covenant by ADT. . . . . . . . . . . . . . .
13. ADT Name . . . . . . . . . . . . . . . . . . . . . . . . . .
14. Confidentiality and Information. . . . . . . . . . . . . . .
15. Guarantee and Warranties by ADT. . . . . . . . . . . . . . .
16. Guarantee and Warranties by Checkpoint . . . . . . . . . . .
17. Notices. . . . . . . . . . . . . . . . . . . . . . . . . . .
18. General. . . . . . . . . . . . . . . . . . . . . . . . . . .
19. Governing Law and Jurisdiction . . . . . . . . . . . . . . .
SCHEDULES
1. Particulars of Actron. . . . . . . . . . . . . . . . . . . .
2. The Subsidiaries . . . . . . . . . . . . . . . . . . . . . .
3. Warranties . . . . . . . . . . . . . . . . . . . . . . . . .
4. Warranty Limits. . . . . . . . . . . . . . . . . . . . . . .
5. Treatment of Claims. . . . . . . . . . . . . . . . . . . . .
THIS AGREEMENT is made on 30th November, 1995 BETWEEN:
(1) ADT (UK) LIMITED, a company incorporated in England with registered
number 1838517, whose registered office is at 00/00 Xxxxxxx Xxxxxx,
Xxxxxxxxx, Xxxxxxxxx XX00 0XX, Xxxxxxx (the "Seller");
(2) ADT LIMITED, a company incorporated in Bermuda, whose registered office
is at Xxxxx Xxxxx, 00 Xxxxx Xxxxxx, Xxxxxxxx XX00, Xxxxxxx ("XXX");
(3) ELECTRONIC SIGNATURES, INC., a company incorporated in the State of
Delaware, United States of America, with offices at 0000 Xxxxx Xxxx,
Xxxxx 000, Xxxxxxxxxx, Xxxxxxxx 00000-000, Xxxxxx Xxxxxx of America
(the "Purchaser"); and
(4) CHECKPOINT SYSTEMS, INC., a company incorporated in the State of
Pennsylvania, United States of America, with offices at 000 Xxxx Xxxxx,
Xxxxxxxxx, XX 00000, Xxxxxx Xxxxxx of America ("Checkpoint").
WHEREAS:
(A) The Seller wishes to sell and the Purchaser wishes to purchase all the
issued share capital of Actron Group Limited on the terms set out in
this agreement.
(B) ADT and Checkpoint are willing to guarantee the obligations of the
Seller and of the Purchaser, respectively, under this agreement.
IT IS AGREED as follows:
1. INTERPRETATION
(1) In this agreement:
"Accounts Date" means 30th September, 1995;
"Actron" means Actron Group Limited, short particulars of which are set
out in Schedule 1;
"Adjustment" means any payment required to be made under clause 6(6),
(7) or (8) or Schedule 5;
"Agreed Form" means, in relation to any document, the form of that
document which has been initialled for the purpose of identification by
the Seller's Solicitors and the Purchaser's Solicitors;
"ADT Group" means ADT and its subsidiaries for the time being (but
excluding the Companies);
"Business Day" means a day (other than a Saturday or Sunday) on which
banks are generally open in London for normal business;
"Companies" means the UK Companies and the European Companies and
"Company" means any of them;
"Completion" means completion of the sale and purchase of the Shares in
accordance with clause 9;
"Contract Losses" means the amount by which the aggregate of the
estimated direct costs associated with sales and installations of
electronic article surveillance systems (excluding sales of electronic
tags or labels) made or contracted to be made up to 31st December, 1996
by the Companies pursuant to contracts with customers in effect, and in
respect of which invoices have not been issued, at Completion exceeds
the aggregate of the selling price agreed to be paid by the customers
pursuant to those contracts and for these purposes "direct costs" means
actual direct material and labour costs (including estimated
installation costs) required to fulfil the relevant Company's
obligations in respect of those sales and installations under the
contracts in question;
"Contract Losses Statement" means the statement of Contract Losses
agreed or determined in accordance with clause 6;
"Deed of Settlement" means the Deed of Settlement and Release in the
Agreed Form;
"Deposit" means the sum of $1,000,000 paid by the Purchaser to Xxx
Xxxxxxx & Xxxxx of Xxx Xxx Xxxxxxxxxxxx Xxxxx, Xxx Xxxx, XX 00000 0000,
Xxxxxx Xxxxxx xx Xxxxxxx on 11th October, 1995 pursuant to clause 3.1
of the Purchase Agreement;
"Disclosure Documents" means the documents listed in the schedule to the
Disclosure Letter;
"Disclosure Letter" means the letter of the same date as this agreement
from the Seller to the Purchaser;
"dollars" or "$" denotes United States dollars;
"Escrow Account" means the interest-bearing deposit account in the joint
names of the Seller's Solicitors and the Purchaser's Solicitors at
Barclays Bank PLC, St Helier, Jersey, sort code 20-45-05, account no.
00000000;
"Escrow Amount" means the sum of $5,400,000 to be deposited in the
Escrow Account pursuant to clause 4(2)(b), or such principal sum as
shall remain in the Escrow Account from time to time;
"European Companies" means those Subsidiaries listed in Schedule 2
(other than Actron UK Limited);
"European Properties" means the properties shortly described in Part II
of Exhibit 2;
"Financial Information" means (i) the aggregated statements of income
of the Companies for each of the three years ended 31st December, 1994
and for the nine months ended on the Accounts Date, (ii) the aggregated
statements of assets and liabilities of the Companies at the Accounts
Date, 31st December, 1994 and 31st December, 1993 and (iii) the summary
of significant accounting policies of the Companies, a copy of which
comprises Exhibit 4;
"Group Loans" means the sums of L28,357,816 and L138,155 respectively
owed by Actron and Actron UK Limited to the Seller, by way of unsecured,
interest free loans, repayable on demand;
"Intellectual Property Rights" means all and any patents, trademarks,
service marks, trade names, registered designs, unregistered design
rights, copyrights (including software) and rights in confidential
information, and all and any other intellectual property rights, whether
registered or unregistered, and including all applications and rights
to apply for any of the same;
"Net Assets" means the amount by which the aggregate value of the
consolidated assets of the Companies exceeds the aggregate value of the
consolidated liabilities of the Companies as at Completion, after giving
effect to clause 4(3) but excluding a sum equal to the Group Loans and
before (i) making any provision in respect of any liability to
Checkpoint or any of its subsidiaries or in respect of any actual or
potential liability the subject of Schedule 5 or (ii) making any
provision in respect of any closure or redundancy costs or otherwise
taking into account any reorganisation or other change in the assets or
method of conducting the business of any of the Companies resulting from
any action taken or proposed to be taken by any of the Companies after
Completion;
"Net Assets Statement" means the statement of Net Assets agreed or
determined in accordance with clause 6;
"Net Sales" means the consolidated net sales of the Companies to third
parties for the year ended 31st December, 1994;
"Net Sales Statement" means the statement of Net Sales agreed or
determined in accordance with clause 6;
"Non-Compete Agreement" means the Non-Compete Agreement in the Agreed
Form;
"Properties" means the UK Properties and the European Properties
"Property" means any of them;
"Purchaser's Accountants" means KPMG of 0 Xxxxxx Xxxx, Xxxxxxxxxxx,
Xxxxxx XX0X 0XX;
"Purchase Agreement" means the agreement dated 11th October, 1995
between Checkpoint and the Seller relating to the sale and purchase of
all the issued share capital of Actron;
"Purchaser's Group" means the Purchaser and its subsidiaries for the
time being (including the Companies), any holding company for the time
being of the Purchaser and any other subsidiary of that holding company;
"Purchaser's Solicitors" means Macfarlanes of 00 Xxxxxxx Xxxxxx, Xxxxxx
XX0X 0XX;
"Seller's Accountants" means Coopers & Xxxxxxx of 0 Xxxxxxxxxx Xxxxx,
Xxxxxx XX0X 0XX;
"Seller's Solicitors" means Xxxxx & Overy of Xxx Xxx Xxxxxx,
Xxxxxx XX0X 0XX;
"Senior Employee" means any employee of a Company (i) whose basic annual
salary is more than $75,000 or its equivalent or (ii) who is entitled
to more than 6 months' notice to terminate his contract of employment;
"Shares" means the 5,000,000 issued ordinary shares of L1 each in the
capital of Actron;
"Statutory Accounts" means the audited balance sheet as at 31st
December, 1994 and audited profit and loss account for the year ended
on that date of Actron and the notes to them, a copy of which is
included in the Disclosure Documents;
"subsidiary" and "holding company" have the meaning given to them by
section 736 of the Companies Xxx 0000;
"Subsidiaries" means all the subsidiaries listed in Schedule 2 and
"Subsidiary" means any of them;
"Tax Deed" means the Tax Deed in the Agreed Form to be made between the
Seller and the Purchaser;
"Taxes Act 1988" means Income and Corporation Taxes Xxx 0000;
"Tokai" means Tokai Electronics Co. Ltd., a company incorporated in
Japan;
"UK Companies" means Actron and Actron UK Limited and "UK Company" means
either of them;
"UK Properties" means the properties shortly described in Part I of
Exhibit 2;
"US GAAP" means generally accepted accounting principles in the United
States; and
"Warranties" means the warranties on the part of the Seller contained
or referred to in clause 7(1).
(2) Any reference, express or implied, to an enactment includes references
to:
(a) that enactment as amended, extended or applied by or under any
other enactment before or after this agreement;
(b) any enactment which that enactment re-enacts (with or without
modification); and
(c) any subordinate legislation made (before or after this agreement)
under any enactment, including one within (a) or (b) above,
but so that no enactment made, amended, extended or applied after
the date of this agreement shall be construed as imposing or
extending the liability of the Seller under the Warranties.
(3) Where any statement in Schedule 3 is qualified by the expression "so far
as the Seller is aware" or "to the best of the Seller's knowledge,
information and belief" or any similar expression that statement shall
be deemed to include an additional statement that it has been made after
due and careful enquiry of one or more of the persons named in the
Disclosure Letter (but not further or otherwise), having regard to their
respective functions and responsibilities (as described in the
Disclosure Letter).
(4) Words denoting persons shall include bodies corporate and unincorporated
associations of persons.
(5) Subclauses (1) to (4) above apply unless the contrary intention appears.
(6) The headings in this agreement do not affect its interpretation.
(7) References to any Exhibit to this agreement are to that Exhibit in the
form which has been initialled for the purpose of identification by the
Seller's Solicitors and the Purchaser's Solicitors. The recitals,
Schedules and Exhibits to this agreement form part of it.
2. CONDITION PRECEDENT
The sale and purchase of the Shares is conditional upon the Group Loans
being repaid in full in accordance with clause 4(1) and neither the
Seller nor the Purchaser shall be required to complete the sale and
purchase of the Shares under this agreement unless and until this
condition is satisfied.
3. SALE AND PURCHASE OF THE SHARES
(1) Subject to clause 2 above, the Seller shall sell and the Purchaser shall
purchase all the Shares.
(2) The Shares shall be sold free from all liens, charges, equities and
encumbrances and together with all rights attaching to them.
(3) Subject to any applicable Adjustment the consideration for the sale of
the Shares shall be the sum of $10,002,920 payable in accordance with
clause 4.
(4) Neither the Seller nor the Purchaser shall be obliged to complete the
sale and purchase of any of the Shares unless the sale and purchase of
all the Shares is completed simultaneously in accordance with this
agreement.
4. REPAYMENT OF THE GROUP LOANS AND SATISFACTION OF THE CONSIDERATION
(1) The Purchaser shall forthwith on signature of this agreement advance to
Actron and Actron UK Limited sufficient sums to enable them to repay the
Group Loans and the Seller shall procure that the Group Loans are repaid
in full forthwith on those funds being available to Actron and Actron
UK Limited.
(2) At Completion the consideration for the sale of the Shares shall be
satisfied as follows:
(a) the Purchaser and the Seller (or the Purchaser's Solicitors and
the Seller's Solicitors acting as their agents) shall jointly
instruct Xxx Xxxxxxx & Xxxxx of Xxx Xxx Xxxxxxxxxxxx Xxxxx, Xxx
Xxxx, XX 00000 0000, Xxxxxx Xxxxxx xx Xxxxxxx to release the
Deposit, together with all interest earned on the Deposit whilst
held by Xxx Xxxxxxx & Xxxxx, to the Seller;
(b) the Purchaser shall deposit the sum of $5,400,000 in the Escrow
Account; and
(c) the Purchaser shall pay to the Seller a sum equal to the
consideration for the sale of the Shares less $6,400,000 (being
the aggregate of (i) the sum of $5,400,000 deposited under
paragraph (b) above and (ii) the Deposit released to the Seller
under paragraph (a) above).
(3) The parties acknowledge that the consideration for the Shares has been
agreed on the basis that:
(a) the Group Loans represent the only indebtedness of any kind
(whether or not presently payable) owed by any of the Companies
to any member of the ADT Group; and
(b) no indebtedness of any kind (whether or not presently payable) is
owed by any member of the ADT Group to any of the Companies,
other than:
(i) any amounts which may be due or become due by way of trade credit
in the ordinary course of trading as a result of goods or services
supplied on normal arm's length terms; or
(ii) any amounts which may fall to be paid pursuant to any express
provision of this agreement or any of the documents required to
be executed or delivered pursuant to the provisions of this
agreement; or
(iii)any amounts due from any of the UK Companies to the ADT Pension
Plan or the Britannia Pension and Life Assurance Scheme in respect
of contributions due in the ordinary way by reason of the
participation of those Companies in those schemes up to
Completion.
If it is established at any time after Completion that any indebtedness
of any kind (whether or not presently payable) was owing at Completion
by any of the Companies to any member of the ADT Group or by any member
of the ADT Group to any of the Companies, contrary to the basis stated
above, then either ADT or Checkpoint (as the case may be) shall procure
that the relevant member of the ADT Group or the relevant Company to
which that indebtedness is owed, shall waive that indebtedness by
executing a deed of waiver in such form as Checkpoint or ADT (as the
case may be) shall reasonably require or, if that is not permissible or
practicable, shall procure that that indebtedness is discharged or
otherwise eliminated at no cost to the Purchaser's Group or to the ADT
Group (as the case may be).
5. ESCROW ACCOUNT
(1) The sum of $5,400,000 deposited in the Escrow Account pursuant to clause
4(1)(c) above shall be dealt with in accordance with this clause.
(2) Any amount due to the Purchaser in respect of an Adjustment or for
breach of the Warranties or under the Tax Deed shall, forthwith on
becoming due, be paid to the Purchaser out of the Escrow Account to the
extent of the Escrow Amount and, as to any excess, shall be paid in
immediately available funds to the Purchaser.
(3) Subject to all amounts in respect of any Adjustments having been paid
to the Purchaser, the Escrow Amount shall be released to the Seller on
the second anniversary of Completion, unless prior to such anniversary
the Purchaser has given notice to the Seller of a claim or claims for
breach of the Warranties or under the Tax Deed which as at such
anniversary is or are not settled, in which event a sum equal to the
amount of such claim or claims shall be retained in the Escrow Account
pending settlement thereof and the balance only of the Escrow Amount
shall be released to the Seller on the second anniversary of Completion.
(4) Any sums retained in the Escrow Account under subclause (3) above in
respect of any claim for breach of the Warranties or under the Tax Deed
notified in writing by the Purchaser to the Seller prior to the second
anniversary of Completion shall be released to the Seller or the
Purchaser, as appropriate, as soon as practicable following the
settlement of that claim.
(5) For the purposes of this clause a claim shall be regarded as settled
if:
(a) the Seller and the Purchaser (or their respective solicitors)
shall so agree in writing,such written agreement not to be
unreasonably withheld or delayed following any oral agreement
between them as to the terms of settlement; or
(b) a court has awarded judgment in respect of the claim and the
period for lodging an appeal has expired without an appeal having
been lodged; or
(c) the claim is withdrawn.
(6) Any interest which accrues on the Escrow Amount while in the Escrow
Account shall follow the principal amount and shall be paid to the
Seller or the Purchaser (as the case may be) at the same time as payment
of the corresponding principal.
(7) The Seller and the Purchaser shall promptly give the Seller's
Solicitors and the Purchaser's Solicitors such joint instructions in writing
as are required to implement the provisions of this clause.
6. ADJUSTMENTS
(1) The Seller shall as soon as practicable following Completion and in
any event within 65 days of Completion:
(a) prepare the Net Assets Statement, the Net Sales Statement and the
Contract Losses Statement in each case in accordance with US GAAP
(as in effect at 31st December, 1994 in respect of the Net Sales
Statement and as in effect at Completion in respect of the other
Statements) and on a basis consistent with the Financial
Information (each a "Statement"); and
(b) deliver the Statements to the Seller's Accountants, the Purchaser
and the Purchaser's Accountants.
(2) The Seller's Accountants and the Purchaser's Accountants shall, during
the 65 days following the delivery to them of each Statement under
subclause (1)(b) above, review, and shall report to the Seller and the
Purchaser respectively whether, in their opinion, that Statement has
been prepared in accordance with the provisions of this agreement. If
both the Seller's Accountants and the Purchaser's Accountants report to
the Seller and the Purchaser respectively that, in their opinion, a
Statement has been prepared in accordance with the provisions of this
agreement, that Statement shall be conclusive and binding.
(3) The Seller shall procure that the Purchaser's Accountants and any
independent firm of accountants appointed under subclause (5), and the
Purchaser shall procure that the Seller, the Seller's Accountants and
any independent firm of accountants appointed under subclause (5), are
given all such assistance and access to all such information within the
possession or control of the Seller or the Purchaser respectively, and
as may reasonably be required in order to prepare, review or agree a
Statement.
(4) If either the Seller's Accountants or the Purchaser's Accountants
report to the Seller or the Purchaser respectively that, in their opinion,
any Statement has not been prepared in accordance with the provisions of
this agreement, the Seller or the Purchaser, as the case may be, shall
decide whether or not to accept the Statement and shall notify the other
accordingly in writing. If the Seller and the Purchaser agree a
Statement within ten Business Days of the expiry of the period referred
to in subclause (2) above that Statement shall be conclusive and binding.
(5) If the Seller and the Purchaser fail to agree a Statement within ten
Business Days of the expiry of the period referred to in subclause (2)
above, the Statement shall be determined by an independent firm of
chartered accountants agreed by the Seller and the Purchaser or, in the
event of a failure to agree the firm of chartered accountants within
those ten Business Days after the expiry of the period referred to in
subclause (2) above, by an independent firm of chartered accountants
appointed by the President for the time being of the Institute of
Chartered Accountants in England and Wales on the application of either
the Seller or the Purchaser. The fees of any such firm of independent
chartered accountants shall be apportioned equally between the Seller
and the Purchaser. Any firm appointed under this subclause shall act
as experts and not as arbitrators and their determination shall (in the
absence of manifest error) be conclusive and binding.
(6) Within five Business Days of the final agreement or determination of
the Net Assets Statement, the Seller shall pay to the Purchaser $1 for each
$1 by which the Net Assets are less than $16.5 million.
(7) Within five Business Days of the final agreement or determination of
the Net Sales Statement, the Seller shall pay to the Purchaser $1.125 for
each $1 by which the Net Sales are less than $48 million.
(8) Within five Business Days of the final agreement or determination of
the Contract Losses Statement, the Seller shall pay to the Purchaser $1 for
each $1 by which the Contract Losses are greater than $1 million subject
to a maximum payment of $5.4 million.
(9) Any payment made under subclauses (6), (7) or (8) shall be made in
accordance with clause 5(2) and shall be deemed to be a reduction in the
consideration for the sale of the Shares.
7. SELLER'S WARRANTIES
(1) Subject to subclause (2), the Seller warrants to the Purchaser that
each
of the statements set out in Schedule 3 is true and accurate.
(2) The Warranties are qualified and are subject to the limits and other
provisions set out in Schedule 4.
(3) The Seller agrees with the Purchaser (as trustee for each Company and
its present directors, officers and employees) to waive any rights or
claims which it may have against any Company or any of its present
directors, officers and employees in respect of any misrepresentation,
inaccuracy or omission (except one attributable to fraud or dishonest
concealment) in or from any information or advice supplied or given by
any Company or its employees in connection with the giving of the
Warranties, the preparation of the Disclosure Letter or the entry by the
Seller into this agreement.
(4) Any payment made by the Seller in respect of a breach of the
Warranties
or a liability under the Tax Deed shall be deemed to be a reduction in
the consideration for the sale of the Shares and the Seller acknowledges
that the Purchaser is relying on the Warranties in performing its
obligations under clause 4(1).
(5) The Warranties shall not in any respect be extinguished or affected by
Completion.
(6) Each of the Warranties is separate and independent and is not limited
or restricted by reference to or inference from any other Warranty.
(7) Except as expressly provided to the contrary in this clause and
Schedule
3, no representation, warranty or other assurance is given by the Seller
as to the accuracy or completeness of any of the Disclosure Documents
or of any other information provided by or on behalf of any member of
the ADT Group to Checkpoint, the Purchaser or any of their agents or
advisers prior to the date of this agreement.
(8) The Seller confirms to the Purchaser that it has not deliberately
withheld any information of which the Seller is actually aware (other
than information of which it is reasonable for the Seller to believe
that the Purchaser is aware) and which the Seller honestly considers
would render any of the information contained in the Disclosure
Documents misleading (by omission or otherwise) or incorrect in any
material respect so as to be likely materially and adversely to affect
the willingness of the Purchaser to purchase the Shares on substantially
the same terms (including price) as those set out in this agreement.
(9) The Seller and the Purchaser shall observe and perform the provisions
of Schedule 5 (which relates to the treatment of certain claims
identified in the Disclosure Letter) expressed to be observed and
performed by each of them respectively.
8. TAX DEED
On Completion the Seller and the Purchaser shall enter into the Tax Deed.
9. COMPLETION
(1) Subject to repayment of the Group Loans in accordance with clause
4(1),
Completion shall take place immediately after the signature of this
agreement at the offices of the Seller's Solicitors.
(2) At Completion the Seller shall procure:
(a) the delivery to the Purchaser of:
(i) duly executed transfers in favour of the Purchaser or its
nominee(s) of all the Shares;
(ii) the share certificates representing the Shares;
(iii) the certificate of incorporation (if available), common
seal, minute books, statutory registers and share
certificate books of each UK Company;
(iv) one part of the Tax Deed duly executed by the Seller;
(v) a duly executed transfer of the share in Actron UK Limited
which is registered in the name of ADT Trustees Limited in
favour of the Purchaser or as it may direct, together with
the relevant share certificate;
(vi) the resignation of Xx. X.X. Xxxxxxx as a director of Tokai
and of Xx. X.X. Xxxxxxx as the secretary of each UK Company,
in each case acknowledging that he has no claim against
Tokai or the relevant UK Company (as the case may be),
whether for loss of office or otherwise;
(vii) the Non-Compete Agreement duly executed by ADT;
(viii) the Deed of Settlement duly executed by ADT; and
(ix) the title deeds or documents of title to the UK Properties;
(b) that a board meeting of Actron is held at which it is resolved
that:
(i) such persons as the Purchaser nominates are appointed as
additional directors and the secretary of that Company;
(ii) its registered office is changed to Xxxx 00, Xxx Xxxxxxxxxx
Xxxxxx, Xxxx Xxxxxx, Xxxxxx, Xxxxx CM 19 5TJ; and
(iii) the transfers referred to in paragraph (a)(i) above
(subject only to their being duly stamped) are approved for registration;
(c) that a board meeting of Actron UK Limited is held at which it is
resolved that:
(i) such persons as the Purchaser nominates are appointed as
additional directors and the secretary of that Company;
(ii) its registered office is changed to Xxxx 00, Xxx Xxxxxxxxxx
Xxxxxx, Xxxx Xxxxxx, Xxxxxx, Xxxxx CM 19 5TJ; and
(iii) the transfer referred to in paragraph (a)(v) above
(subject
only to its being duly stamped) is approved for
registration;
(d) the delivery to the Purchaser of copies of the resignations of Xx.
X.X. Xxxxxxx as a director of Actron AG and of Xx. X. Xxxxxxxx and
Xx. X. Xxxxxxxxx as directors of Actron AG, Actron Entwicklungs
AG and Actron Produktion AG, in each case acknowledging that he
has no claim against the relevant Company whether for loss of
office or otherwise.
(3) At Completion the Purchaser shall:
(a) pay the consideration for the sale of the Shares to the Seller;
and
(b) deliver to the Seller's Solicitors a counterpart of each of the
Tax Deed, the Non-Compete Agreement and the Deed of Settlement,
duly executed by all persons who are expressed to be parties
(other than as a member of the ADT Group).
(4) If for any reason the provisions of subclauses (2) and (3) above are
not
fully complied with the party not in default may elect (in addition and
without prejudice to all other rights or remedies available to it) to
rescind this agreement.
10. EMPLOYEES
(1) On Completion the UK Companies shall cease to participate in the ADT
Pension Plan and the Britannia Pension and Life Assurance Scheme.
(2) ADT shall procure that ADT Group PLC shall permit the UK Companies and
their employees to continue to participate (to the extent and in the
manner they do at present) from Completion:
(a) until 31st December, 1995 in the ADT Group PLC Group Long Term
Disability Insurance Scheme; and
(b) until 31st December, 1995 in ADT Group PLC's Corporate Care Group
arrangements with The British United Provident Association
Limited,
(together the "Insurance Schemes") in each case subject to the rules and
other provisions applicable to the Insurance Schemes and to the
respective insurers of the Insurance Schemes consenting to that
continued participation which consent the Seller shall use its
reasonable endeavours to obtain.
(3) Without legal obligation to the Seller or to any third party the
Purchaser confirms to the Seller and ADT that such legal rights
(including rights to compensation for termination of employment) as
employees of any of the Companies have will be fully safeguarded in all
material respects.
11. RELEASE OF GUARANTEES
(1) The Purchaser shall use its best endeavours to procure that as from
Completion each member of the ADT Group is released from all guarantees
and indemnities given by it in respect of obligations of any Company and
of which full particulars are contained in the Disclosure Documents and
pending such release the Purchaser shall indemnify ADT (for itself and
as trustee for each other member of the ADT Group) against all
liabilities under those guarantees and indemnities.
(2) The Seller shall use its best endeavours to procure that as from
Completion each Company is released from all guarantees and indemnities
given by it in respect of obligations of any member of the ADT Group and
pending such release the Seller shall indemnify the Purchaser (as
trustee for each Company) against all liabilities under those guarantees
and indemnities.
(3) Without prejudice to subclauses (1) and (2) above, the Seller and the
Purchaser shall respectively procure Britannia Security Group Limited
(formerly Britannia Security Group PLC) and Actron UK Limited to cancel
forthwith the facility for L320,000 granted to those companies by
Midland Bank plc pursuant to the facility letter dated 18th June, 1991.
The Seller confirms and undertakes to the Purchaser that Britannia
Security Group Limited does not have any amounts drawn under, and will
not utilise, that facility and accordingly the Purchaser acknowledges
that any amounts drawn by Actron UK Limited under the facility will be
subject to the provisions of subclause (1) and the Seller acknowledges
that, if any amounts are drawn by Britannia Security Group Limited under
the facility (contrary to this subclause), they will be subject to the
provisions of subclause (2).
12. NON-COMPETITION COVENANT BY ADT
(1) Subject as provided in subclause (2) below, ADT covenants with the
Purchaser, with the intention of assuring to the Purchaser the full
benefit and value of the goodwill and connections of the Companies and
as a constituent part of this agreement, as follows:
(a) that for a period of two years from Completion neither it nor any
member of the ADT Group shall be concerned in any business engaged
in electronic article surveillance as part of loss prevention
programmes for the retail industry (the "Business") in any part
of the European Union (as constituted at Completion) or
Switzerland (the "Territory") which is of the same kind as, and
which is competitive or likely to be competitive with, any of the
businesses carried on by a Company at Completion;
(b) that neither it nor any other member of the ADT Group shall carry
on any trade or business in any part of the world under the name
"Actron" or any confusingly similar name;
(c) that neither it nor any other member of the ADT Group shall for
a period of two years from Completion directly or indirectly:
(i) interfere with or, in competition with any Company, offer
or agree to provide goods or services relating to the
Business to any person, firm or body corporate (an "Entity")
which at Completion is a customer of any Company or is, to
the Seller's knowledge, negotiating with a Company at
Completion in relation to the provision of goods or services
by any Company; or
(ii) interfere with any contractual arrangements relating to the
Business between a Company and any Entity which at
Completion is a supplier of a Company or is, to the Seller's
knowledge, negotiating with a Company at Completion in
relation to the provision of goods or services to a Company;
or
(iii) solicit the services of, or endeavour to entice away from
a Company, any director, employee or consultant (whether or
not such person would commit any breach of his contract of
employment or engagement by reason of leaving the service
of such Company); and
(d) that neither it nor any other member of the ADT Group shall for
a period of two years from Completion in any part of the Territory
engage in the manufacture of electronic article surveillance
products which are the same or substantially the same as the
products manufactured by any Company at Completion.
(2) Subclause (1) above shall not apply insofar as ADT or any other member
of the ADT Group at any time:
(a) holds or acquires any shares, debentures, notes or other equity
or debt securities in any Entity which carries on the Business for
investment purposes only and not with a view to influencing the
conduct of such Entity; or
(b) holds or acquires substantially all the shares or assets of any
Entity which carries on the Business provided that, (i) promptly
after such acquisition, ADT or any other relevant member of the
ADT Group offers to sell the assets used in the Business to the
Purchaser for fair market value as determined by two appraisers,
one appointed by each of ADT and the Purchaser or, in the event
that the two appraisers cannot agree on the fair market value as
determined by a third appraiser appointed jointly by ADT and the
Purchaser, whose decision shall be conclusive and binding, and
(ii) the Purchaser does not elect to purchase such assets within
10 days after their fair market value is agreed or determined in
accordance with this paragraph; or
(c) carries on the Business in conjunction with any other business
(being a business of a kind presently conducted by a member of the
ADT Group) and incidentally to the conduct of that other business.
(3) ADT acknowledges that the restrictions in subclause (1) above are
reasonable to protect the Purchaser as the purchaser of the Shares.
(4) Each of the restrictions in each paragraph of subclause (1) above
shall be construed as separate and individual and if any of those
restrictions is void but would be valid if some part of the restrictions
were deleted the restrictions shall apply with such modification as may
be necessary to make them valid.
(5) Without any legal obligation to the Purchaser, the Seller confirms to
the Purchaser that neither it nor any other member of the ADT Group
presently intends to become concerned in a Business carried on in any
part of the United States of America.
(6) If by virtue of any provision of this agreement or of any other
agreement or arrangement of which this agreement forms part the
agreement or arrangement is subject to registration under the
Restrictive Trade Practices Xxx 0000, that provision shall not take
effect until the day after particulars of the agreement or arrangement
have been given to the Director General of Fair Trading under section 24
of that Act.
13. ADT NAME
(1) The Purchaser acknowledges that (subject to subclause (2)) no member
of the Purchaser's Group may use, and shall procure that no member of the
Purchaser's Group uses, the name or xxxx "ADT" after Completion or
otherwise implies any association with the ADT Group.
(2) The Purchaser shall ensure that all stationery, advertising and other
promotional material which describes any of the Companies as a member
of the ADT group or incorporates the name or xxxx "ADT" is, as soon as
practicable after Completion and in any event within 45 days of
Completion, destroyed or altered so as to omit or obliterate any such
description, name or xxxx.
14. CONFIDENTIALITY AND INFORMATION
(1) The Purchaser shall not disclose (and shall procure that no other
member
of the Purchaser's Group discloses) to any person any information
regarding the business or affairs of any member of the ADT Group except
information which is in the public domain (otherwise than as a result
of a breach of the obligation in this subclause or of any other duty of
confidentiality).
(2) The Seller shall not disclose (and shall procure that no other member
of the ADT Group discloses) to any other person any information
regarding the business or affairs of any of the Companies except
information which is in the public domain (otherwise than as a result
of a breach of the obligation in this subclause or of any other duty of
confidentiality).
(3) No party shall make or permit any of its subsidiaries to make any
announcement on or after Completion concerning this sale and purchase
or any ancillary matter and which refers to any of the other parties
except after prior consultation with, and the approval of each other
party to which reference is to be madesuch approval not to be
unreasonably withheld or delayed.
(4) Following Completion and at the request of the Seller the Purchaser
shall grant access to representatives of the Seller and its auditors to
the books and records of the Companies in respect of the current or any
previous accounting period to the extent reasonably required by ADT in
order to prepare the financial statements of any member of the ADT Group
or to deal with any legal or regulatory requirement to provide
information relating to any Company and (subject to subclause (6) below)
the Seller agrees to keep and to procure that its agents and advisers
keep any information so disclosed strictly confidential.
(5) Following Completion the Seller shall, at the Purchaser's cost and
request, co-operate with the Purchaser and Checkpoint and shall provide
all such information and assistance as is in the possession or under the
control of the ADT Group and as the Purchaser may reasonably require in
order to compile such financial information as the Purchaser or
Checkpoint may be required to include in any registration statement or
other filing in accordance with the requirements of any competent
regulatory body.
(6) Nothing in this clause shall prevent any disclosure or announcement
required by law or by any competent regulatory body.
15. GUARANTEE AND WARRANTIES BY ADT
(1) ADT unconditionally and irrevocably:
(a) guarantees by way of continuing guarantee to the Purchaser the due
performance by the Seller of all its obligations under this
agreement and the Tax Deed; and
(b) agrees that if and each time that the Seller fails after proper
written demand has been made to make any payment to the Purchaser
when it is due under this agreement or the Tax Deed, ADT shall
within ten Business days of written demand being made of it pay
that amount to the Purchaser.
(2) Each payment to be made by ADT under this clause shall be made in
dollars.
(3) ADT's obligations under this clause shall not be affected by:
(a) any time or indulgence granted to, or composition with, the Seller
or any other person; or
(b) the taking, variation, renewal or release of, or neglect to
perfect or enforce this agreement, the Tax Deed or any right,
guarantee, remedy or security from or against the Seller or any
other person; or
(c) any unenforceability or invalidity of any obligation of the
Seller.
(4) ADT warrants to the Purchaser and Checkpoint that in respect of each
of
ADT and the Seller:
(a) each of ADT and the Seller has the power to execute and deliver
this agreement and, in the case of the Seller, the Tax Deed and
to perform its obligations under them and has taken all action
necessary to authorise such execution and delivery and the
performance of such obligations;
(b) the execution and delivery by each of ADT and the Seller of this
agreement and, in the case of the Seller, the Tax Deed and the
performance of its obligations under them do not and will not
violate or conflict with any law, rule or regulation applicable
to it, any provisions of its constitutional documents, any order
or judgement of any court or other agency or government applicable
to it or any of its assets or any contractual restriction binding
on or affecting it or any of its assets;
(c) all authorisations of and all notices or filings with any
governmental or other authority that are necessary to enable each
of ADT and the Seller to enter into and perform its obligations
under this agreement and, in the case of the Seller, the Tax Deed
have been obtained or made and are in full force and effect and
all conditions of any such authorisations exemptions have been
complied with; and
(d) this agreement constitutes and, in the case of the Seller, the Tax
Deed will constitute its legal, valid and binding obligations
enforceable against it in accordance with its terms (subject to
applicable bankruptcy, reorganisation, insolvency, moratorium or
similar laws affecting creditors' rights generally and subject,
as to enforceability, to the availability of equitable remedies
subject to the discretion of the court before which any proceeding
for such remedies may be brought).
16. GUARANTEE AND WARRANTIES BY CHECKPOINT
(1) Checkpoint unconditionally and irrevocably:
(a) guarantees by way of continuing guarantee to the Seller the due
performance by the Purchaser of all its obligations under this
agreement and the Tax Deed; and
(b) agrees that if and each time that the Purchaser fails after proper
written demand has been made to make any payment to the Seller
when it is due under this agreement or the Tax Deed, Checkpoint
shall within ten Business Days of written demand being made of it
pay that amount to the Seller.
(2) Each payment to be made by Checkpoint under this clause shall be made
in dollars.
(3) Checkpoint's obligations under this clause shall not be affected by:
(a) any time or indulgence granted to, or composition with, the
Purchaser or any other person; or
(b) the taking, variation, renewal or release of, or neglect to
perfect or enforce this agreement, the Tax Deed or any right,
guarantee, remedy or security from or against the Purchaser or any
other person; or
(c) any unenforceability or invalidity of any obligation of the
Purchaser.
(4) Checkpoint warrants to the Seller and ADT that in respect of
Checkpoint
and the Purchaser:
(a) it has the power to execute and deliver this agreement and, in the
case of the Purchaser, the Tax Deed and to perform its obligations
under them and has taken all action necessary to authorise such
execution and delivery and the performance of such obligations;
(b) the execution and delivery by it of this agreement and, in the
case of the Purchaser, the Tax Deed and the performance of its
obligations under them do not and will not violate or conflict
with any law, rule or regulation applicable to it, any provisions
of its constitutional documents, any order or judgement of any
court or other agency or government applicable to it or any of its
assets or any contractual restriction binding on or affecting it
or any of its assets;
(c) all authorisations of and all notices or filings with any
governmental or other authority that are necessary to enable it
to enter into and perform its obligations under this agreement
and, in the case of the Purchaser, the Tax Deed have been obtained
or made and are in full force and effect and all conditions of any
such authorisations have been complied with; and
(d) this agreement constitutes and, in the case of the Purchaser, the
Tax Deed will constitute its legal, valid and binding obligations
enforceable against it in accordance with its terms (subject to
applicable bankruptcy, reorganisation, insolvency, moratorium or
similar laws affecting creditors' rights generally and subject,
as to enforceability, to the availability of equitable remedies
subject to the discretion of the court before which any proceeding
for such remedies may be brought).
17. NOTICES
(1) Any notice or other document to be served under this agreement may be
delivered or sent by post or facsimile process to the party to be served
at its address below:
to the Seller at:
00/00 Xxxxxxx Xxxxxx
Xxxxxxxxx
Xxxxxxxxx XX00 0XX
Xxxxxxx
Fax no. (01734) 796622
marked for the attention of X.X.
Xxxxxxx
to ADT at:
c/o ADT Inc.
Xxx Xxxx Xxxxx
0000 Xxxxxx Xxxx
X.X. Xxx 0000
Xxxx Xxxxx
Xxxxxxx 00000
XXX
Fax no. 000 000 000 0000
marked for the attention of X.X.
Xxxxxx
to the Purchaser or Checkpoint at:
000 Xxxx Xxxxx
Xxxxxxxxx
Xxx Xxxxxx 00000
XXX
Fax no. 000 000 000 0000
marked for the attention of N.D.
Austin
with a copy to the Purchaser's
Solicitors
(reference CDZM/ALM/NR)
or, in the case of any party, at such other address or facsimile number
as it may have notified to the other parties for the purpose in
accordance with this clause. Any notice or other document sent by post
shall be sent by prepaid first class recorded delivery post (if within
the United Kingdom) or by prepaid airmail (if elsewhere).
(2) Any notice or document shall be deemed to have been served:
(a) if delivered, at the time of delivery; or
(b) if posted, on the second Business Day after it was put into the
post, if sent within the United Kingdom, or on the fifth Business
Day after it was put into the post, if sent by airmail; or
(c) if sent by facsimile process, at the expiration of 2 hours after
the time of despatch, if despatched before 3.00 p.m. (local time
at the place of destination) on any Business Day, and in any other
case at 10.00 a.m. (local time at the place of destination) on the
Business Day following the date of despatch.
(3) In proving service of a notice or document it shall be sufficient to
prove that delivery was made or that the envelope containing the notice
or document was properly addressed and posted either by prepaid first
class recorded delivery post or by prepaid airmail (as the case may be)
or that the facsimile message was properly addressed and transmitted.
18. GENERAL
(1) The Seller warrants to the Purchaser that it has the right to sell and
to transfer (or to procure the transfer of) the full beneficial and
legal interest in the Shares to the Purchaser and the Seller waives (and
shall procure the waiver by its nominee(s) of) all rights of pre-emption
which it (or such nominee(s)) may have in respect of the transfer to the
Purchaser or its nominee(s) of the Shares or any of them.
(2) Each of the obligations, Warranties and undertakings set out in this
agreement which is not fully performed at Completion will continue in
force after Completion.
(3) Unless otherwise expressly stated all payments to be made under this
agreement shall be made in immediately available funds in dollars to
such account as the intended recipient may from time to time notify in
writing to the payer for that purpose.
(4) None of the rights or obligations under this agreement may be assigned
or transferred without the prior written consent of all the parties.
(5) Time is of the essence in relation to this agreement.
(6) Except as expressly provided to the contrary in this agreement and the
Tax Deed each party shall pay the costs and expenses incurred by it in
connection with the entering into, completion and performance of this
agreement.
(7) This agreement may be executed in any number of counterparts, all of
which taken together shall constitute one and the same agreement and any
party may enter into this agreement by executing a counterpart.
(8) This agreement and the documents referred to in it contain the whole
agreement between the parties relating to the transactions contemplated
by this agreement and, subject to and with effect from
Completion,supersede all previous agreements between the parties
relating to these transactions including the Purchase Agreement, the
confidentiality agreement contained in a letter dated 27th June, 1995
from ADT Inc. to Checkpoint and accepted by Checkpoint on 30th June,
1995 and the Prior Agreement, as defined in that agreement.
(9) In entering into this agreement no party may rely on any
representation, warranty, collateral contract or other assurance
(except those set out in this agreement, the Tax Deed, the Deed of
Covenant and the Deed of Settlement) made by or on behalf of any
other party before the signature of this agreement and each of the
parties waives all rights and remedieswhich, but for this subclause, might
otherwise be available to it in respect of any such representation,
warranty, collateral contract or other assurance; provided that nothing in
this subclause shall limit or exclude any liability for fraud.
(10) Each of the Seller and the Purchaser shall do or procure to be done
all such further acts and things and execute and procure the execution of
all other such documents as the other may from time to time reasonably
require for the purpose of giving full effect to the provisions of this
agreement.
(11) The failure by any party at any time or times to require performance
of any provision of this agreement shall not affect its right to enforce
such provision at a later time.
(12) No waiver by any party of any breach of any term, covenant,
representation, warranty or undertaking contained in this agreement,
whether by conduct or otherwise, in any one or more instances shall be
deemed to be or construed as a further or continuing waiver of any such
breach or of any other term, covenant, representation, warranty or
undertaking in this agreement.
(13) This agreement may be amended, modified, superseded or cancelled and
any of its terms, covenants, representations, warranties, undertaking or
conditions may be waived only by an instrument in writing signed by or
on behalf of all of the parties to this agreement or, in the case of
waiver, by the party waiving compliance.
19. GOVERNING LAW AND JURISDICTION
(1) This agreement is governed by and shall be construed in accordance
with English law.
(2) ADT submits to the jurisdiction of the English courts for all purposes
relating to this agreement and irrevocably appoints the Seller as its
agent for service of process.
(3) Checkpoint submits to the jurisdiction of the English courts for all
purposes relating to this agreement and irrevocably appoints the
Purchaser's Solicitors as its agent for service of process. Any papers
served on the Purchaser's Solicitors under this subclause shall be
marked with reference CDZM/ALM/NR.
AS WITNESS the hands of a duly authorised officer of each of the parties on
the date which appears first on page 1.
SCHEDULE 1
PARTICULARS OF ACTRON
Registered number:
2687567
Registered office:
00/00 Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxx XX00
0XX
Date and place of incorporation:
14th February, 1992, England
Directors:
X. Xxxxxxxx
X.X. Xxxxxx
X. Xxxxx
Secretary:
X.X. Xxxxxxx
Accounting reference date:
31st December
Auditors:
Coopers & Xxxxxxx, London
Authorised share capital:
L10,000,000 divided into 10,000,000 ordinary
shares of L1 each
Issued share capital:
Ordinary (L1)
ADT (UK) Limited
4,999,999
ADT Trustees Limited
1
5,000,000
========
SCHEDULE 2
THE SUBSIDIARIES
Name Country of incorporation
1.
Actron UK Limited
UK
2.
Actron SA
France
3.
Actron Nederland BV
Netherlands
4.
Actron - FGS Sicherungsanlagen GmbH
Germany
5.
Actron Belgium & Luxembourg SA
Belgium
6.
Actron Benelux SA
Belgium
7.
Actron Sistemas de Securidad Srl
Spain
8.
Actron AG
Switzerland
9.
Actron Produktion AG
Xxxxxxxxxxx
00.
Actron Security AG
Xxxxxxxxxxx
00.
Actron Entwicklungs AG
Switzerland
SCHEDULE 3
WARRANTIES
A. General
B. Accounts and Financial
C. Commercial
D. Taxation
E. Properties
F. Employees
A. GENERAL
A.1 Accuracy of schedules and exhibits
The particulars relating to the Companies and the Properties set out in
Schedules 1 and 2 and in Exhibits 1 and 2 to this agreement are true and
correct in all respects and do not omit any information which they
purport to include.
A.2 Memorandum and articles of association, statutory books and returns
(1) The copy of the memorandum and articles of association (or the
equivalent documents) of each Company which is included in the
Disclosure Documents is accurate and complete in all respects and has
annexed or incorporated copies of all resolutions or agreements required
by applicable laws to be so annexed or incorporated.
(2) The register of members and other statutory books and registers of
each Company have been properly kept, contain in all material respects a
complete and accurate record of the matters which should be dealt with
in them and no notice or allegation that any of them is incorrect or
should be rectified has been received.
(3) All returns and particulars, resolutions and other documents which a
Company is required by law to file with or deliver to the registrar of
companies or his equivalent have been duly filed or delivered.
(4) Each of the Companies is duly organised and validly existing under the
laws of its jurisdiction of incorporation.
(5) Each European Company has in its possession or control its corporate
records and registers.
A.3 The Shares
(1) The Shares constitute the whole of the issued and allotted share
capital of Actron.
(2) All the Shares are fully paid or properly credited as fully paid.
(3) No person is entitled to require any Company to issue or allot, or to
grant any right to call for the issue or allotment of, any share or loan
capital either now or at any future date whether contingently or not and
no person has claimed to be entitled to any of the foregoing.
(4) There is no option, right of pre-emption, right to acquire, mortgage,
charge, pledge, lien or other form of security or encumbrance on, over
or affecting any of the Shares or any shares in the capital of a
Subsidiary nor is there any commitment to give or create any of the
foregoing, and no person has claimed to be entitled to any of the
foregoing.
(5) The capital stock and net equity of each of the Companies satisfy
local
company law requirements.
A.4 Group structure
Exhibit 1 correctly shows the beneficial ownership of the share capital
of each Subsidiary.
A.5 No other subsidiaries or associations
No Company:
(a) holds or beneficially owns or has agreed to acquire any securities
of any other corporation (whether incorporated in the United
Kingdom or elsewhere), other than shares of another Company or
Tokai; or
(b) is, or has agreed to become a member of any partnership or other
unincorporated association, joint venture or consortium (other
than recognised trade associations); or
(c) has any associated companies as defined for US GAAP purposes; or
(d) has any branch, place of business or permanent establishment
outside the country in which it is incorporated.
A.6 Assets
(1) Particulars of all material fixed assets owned by any Company are set
out in the Disclosure Documents.
(2) Except for current assets supplied or realised in the ordinary course
of business:
(a) no Company has disposed of any material asset since the Accounts
Date;
(b) the assets included in the Financial Information or acquired by
any Company after the Accounts Date are legally and beneficially
owned by one of the Companies; and
(c) all material tangible assets owned by any Company are in the
possession or under the control of, one of the Companies.
(3) None of the property, assets, undertaking, goodwill or uncalled
capital of any Company (other than the Properties) is subject to any
encumbrance (including, without limitation, any debenture, mortgage,
charge, lien, deposit by way of security, xxxx of sale, lease, hire-
purchase, credit-sale or other agreement for payment on deferred terms,
option or right of pre-emption) or any agreement or commitment to give
or create any of the foregoing.
(4) In this paragraph "material" means having a book value as at the
Accounts Date in excess of $50,000 (or equivalent).
(5) The plant and machinery, including fixed plant and machinery, forming
part of the manufacturing facility located at Rotkreuz, Switzerland is
in fair repair and condition having regard to its age and the use to
which it is put.
A.7 Licences
Each Company has such valid and subsisting licences as are required by
law to own and operate its assets and to carry on its business as it
does at present and the Seller is not aware of anything having occurred
that might result in the revocation, suspension or modification of any
of those licences or that might prejudice their renewal in the usual
way.
A.8 Related party contracts
(1) No Company is a party to any material contract or arrangement which
remains outstanding or unperformed and to which any member of the ADT
Group is a party.
(2) No Company is a party to, nor have its profits or financial position
during the three financial years ended on the Accounts Date been
materially affected by, any contract or arrangement which is not of an
entirely arm's length nature with any member of the ADT Group or, so far
as the Seller is aware, with any third party.
(3) No member of the ADT Group is a party to any outstanding agreement for
the provision of finance, goods, services or other facilities to or by
any Company.
A.9 Litigation
(1) No Company is engaged in any litigation or arbitration proceedings
(except as plaintiff for collection of debts not exceeding an aggregate
of $50,000 (or equivalent) in the case of all sums being collected by
all the Companies) and there are no such proceedings pending or
threatened by any Company and no Company has been notified of any such
proceedings pending or threatened against it.
(2) The Seller does not know of anything which is likely to give rise to
any material litigation or arbitration proceedings by or against any
Company or any other person for whose acts or defaults any Company may be
liable, vicariously or otherwise.
(3) No Company is the subject of any investigation, inquiry or enforcement
proceedings or process by any governmental, administrative or regulatory
body nor is the Seller aware of anything which is likely to give rise
to any such investigation, inquiry, proceedings or process.
A.10 Environmental matters
(1) In this paragraph:
(a) "Environmental Law" means all statutes, common law, bylaws,
regulations, orders and directives or any other legislative
measure concerning the protection of human health or the
Environment or the conditions of the workplace or the generation,
transportation, storage, treatment or disposal of a Dangerous
Substance;
(b) "Environmental Licence" means any permit, licence, authorisation,
consent or other approval granted under any Environmental Law;
(c) "Dangerous Substance" means any natural or artificial substance
(whether in the form of solid, liquid, gas or vapour, alone or in
combination with any other substance) likely to cause serious harm
to man or the Environment including but not limited to controlled,
special, hazardous, toxic or dangerous waste;
(d) "Relevant Property" means any premises now or previously owned,
leased, occupied or controlled by any Company; and
(e) "Environment" means the environment as defined in section 1(2) of
the Environmental Protection Xxx 0000.
(2) Each Company complies and has at all times complied in all material
respects with all applicable Environmental Law and with the terms and
conditions of all Environmental Licences.
(3) No Company has received any notice or other communication from which
it appears that:
(a) it is or may be in material violation of any Environmental Law or
Environmental Licence or that any Environmental Licence is likely
to be suspended or revoked;
(b) it is or may be responsible (wholly or in part) for any clean up
or other corrective action in relation to any Relevant Property;
(c) it has used, disposed of, generated, stored, transported, dumped,
released, deposited, buried or emitted any Dangerous Substance at,
on, from or under any Relevant Property or at, on, from or under
any other premises in circumstances which may result in a material
liability; or
(d) any Property has been a waste disposal site.
(4) So far as the Seller is aware no other person has used, disposed of,
generated, stored, transported, dumped, released, deposited, buried or
emitted any Dangerous Substance at, on, from or under any Relevant
Property in circumstances which may result in a material liability.
A.11 Insolvency
(1) No receiver or administrative receiver has been appointed in respect
of any UK Company or in respect of the whole or any part of the assets or
undertaking of any UK Company.
(2) No administration order has been made and no petition has been
presented for such an order in respect of any UK Company and no voluntary
arrangement has been proposed under s.1 of the Insolvency Xxx 0000 in
respect of any UK Company.
(3) No meeting has been convened at which a resolution is to be proposed,
no resolution has been passed, no petition has been presented and no
order has been made for the winding up of any UK Company.
(4) No unsatisfied judgement, order or award is outstanding against any UK
Company and since the Accounts Date no distress or execution has been
levied on, or other similar process commenced against, any asset of any
UK Company.
(5) No UK Company has been a party to any transaction (other than one
with another Company) at an undervalue as defined in section 238 of the
Insolvency Xxx 0000 or given or knowingly received any preference as
defined in section 239 of the Insolvency Xxx 0000, in either case within
the period of two years ending on the date of this agreement.
(6) No event analogous to any of those referred to in paragraphs (1) to
(5) above has occurred in relation to any European Company or otherwise
outside England in respect of any Company.
A.12 Consequences of sale
Compliance with the terms of this agreement does not and will not:
(a) conflict with or constitute a default under any provision of:
(i) any material agreement or instrument to which the Seller or
any Company is a party;
(ii) the Companies' or the Seller's memoranda or articles of
association (or equivalent documents); or
(iii) any lien, lease, order, judgement, award, injunction,
decree, ordinance or regulation or any other restriction of
any kind or character by which the Seller or any Company is
bound;
(b) relieve any other party to a material contract with any Company
of its obligations or enable that party to vary or terminate its
rights or obligations under that contract; or
(c) result in the creation or imposition of any lien, charge or
encumbrance of any nature on any of the property or assets of any
Company.
A.13 Tokai
(1) Actron is the owner of 200,000 shares of 500 Yen each in the capital
of Tokai which, so far as the Seller or any representative of the Seller
or any Company who is an officer of Tokai is aware, represent one-third
of all the issued share capital of Tokai.
(2) The Disclosure Documents include copies of all current material
agreements, arrangements or understandings to which any member of the
ADT Group or any Company is a party relating to:
(a) the purchase of goods from Tokai; or
(b) the shares owned by Actron in Tokai or the management of Tokai.
B. ACCOUNTS AND FINANCIAL
B.1 The Statutory Accounts and Financial Information
(1) The Statutory Accounts have been prepared under the historical cost
basis and in accordance with generally accepted accounting principles
and practices consistently applied and statutes and regulations
applicable in the United Kingdom.
(2) The Financial Information:
(a) has been prepared in dollars in accordance with the accounting
policies summarised in Exhibit 5, which accounting policies are
in accordance with US GAAP (as in effect at the Accounts Date);
and
(b) presents fairly the aggregated statements of income of the
Companies for each of the three years ended 31st December, 1994
and for the nine months ended on the Accounts Date and the
aggregated statements of assets and liabilities of the Companies
at the Accounts Date, 31st December, 1994 and 31st December, 1993.
B.2 Capital commitments
Except as disclosed in the Financial Information no Company had any
material commitments on capital account outstanding at the Accounts Date
and since the Accounts Date no Company has entered into nor agreed to
enter into any material capital commitments; for this purpose a
"material" commitment means one exceeding $250,000 (or equivalent).
B.3 Bank borrowings
(1) The total amount borrowed by each Company from its bankers does not
exceed its overdraft facilities as set out in the Disclosure Documents.
(2) In relation to any facility under which amounts disclosed under
paragraph (1) above are outstanding:
(a) the Disclosure Documents include true and correct copies of all
documents relating to it;
(b) there has not been any material contravention of or non-compliance
with any of its terms;
(c) no steps for the enforcement of any encumbrance have been taken
or threatened;
(d) it is not dependent on the guarantee of, or on any security
provided by, any member of the ADT Group or any third party; and
(e) it is not terminable by reason of the sale of the Shares.
B.4 Intra-group loans and guarantees
(1) No loan is outstanding from any Company to any member of the ADT Group
and (except for the Group Loans) no loan is outstanding from any member
of the ADT Group to any Company.
(2) No Company has any liability (whether present or future) under any
guarantee, indemnity or security granted in respect of any obligation
of any member of the ADT Group.
(3) The Group Loans are due and payable to the Seller on the terms
referred to in the definition of "Group Loans" in clause 1 and no others.
B.5 Loans
No Company has lent any money which has not been repaid to it or owns
the benefit of any receivable (whether present or future) other than (i)
receivables accrued to it in the ordinary course of its business or (ii)
amounts lent to or owed by another Company.
B.6 Bank accounts
The details of the Companies' bank accounts included the Disclosure
Documents are correct and none of the Companies has any other bank or
deposit account (whether in credit or overdrawn) not included in those
details.
B.7 Grants
No Company has outstanding any application for, or is currently in
receipt of, any material grant or allowance from any governmental
authority or agency.
B.8 Dividends
Since 1st January, 1995, no dividend or other distribution of profits
or assets has been or agreed to be declared, made or paid by Actron.
C. COMMERCIAL
C.1 Position since Accounts Date
Since the Accounts Date:
(a) each Company has conducted its business in a normal and proper
manner;
(b) no Company has entered into any unusual contract or commitment
which is material (in the context of the Companies taken as a
whole) or otherwise departed from its normal course of trading;
and
(c) no dividend or other distribution of profits or assets has been
or agreed to be declared, made or paid by any Company;
(d) no major supplier of the Companies (taken as a whole) has ceased
or has notified in writing any of the Companies or the Seller that
it intends to cease supplying, to reduce its supplies to, or to
change the basis on which it will make supplies to any Company;
(e) no major customer of the Companies (taken as a whole) has
terminated any contract with any Company;
(f) no share or loan capital has been allotted or issued or agreed to
be allotted or issued by any Company;
(g) there has been no damage or destruction materially and adversely
affecting any material tangible asset of the Companies (taken as
a whole) or any of the Properties;
(h) no Company has paid or has agreed to pay any director's fee or
other remuneration to directors except normal remuneration payable
to executive directors;
(i) the Companies' accounting reference date has not been changed; and
(j) no management services charge (or other charge of that nature) has
been paid by any Company (except to another Company).
C.2 Trading contracts
(1) The Disclosure Documents include:
(a) copies of the standard terms and conditions on which each Company
trades;
(b) particulars of all outstanding offers, tenders or the like which
are capable of being converted into a material obligation of any
Company by an acceptance or other act of some other person; and
(c) particulars of all contracts with a customer or supplier of any
Company under which a material obligation remains outstanding or
which oblige any Company to purchase or supply any products for
a period in excess of 180 days after the date of this agreement.
In this paragraph "material obligation" means an obligation to pay a sum
in excess of $200,000 (or equivalent).
(2) No Company is a party to any other contract which, whether by reason
of its nature, term, scope, or price, is of material importance to the
business, profits or assets of the Companies (taken as a whole) and
which:
(a) is not in the ordinary course of its business; or
(b) requires an aggregate consideration payable by that Company in
excess of $200,000; or
(c) contains sureties, guarantees or security or comfort letters or
other collateral of any kind in favour of any third party who has
provided security to the benefit of any Company, except in the
ordinary course of business.
C.3 Distributorships
(1) The Disclosure Documents include copies of all current distributorship
agreements to which any Company is a party. No notice to terminate any
of those agreements has been given or received by any Company or any
distributor and no amounts are owed by any Company to any former
distributor in respect of the termination of any previous
distributorship agreement, other than commissions payable in the
ordinary course.
(2) No Company is a party to:
(a) any franchise or similar agreement; or
(b) any agreement which restricts its freedom to carry on the whole
or any part of its business in any part of the world in such
manner as it thinks fit.
C.4 Anti-competitive arrangements
(1) So far as the Seller is aware, no Company is now, or has during the
last six years been, a party to any agreement, arrangement, concerted
practice or course of conduct which:
(a) is subject to registration under the Restrictive Trade Practices
Acts 1976 and 1977;
(b) contravenes the provisions of the Resale Prices Xxx 0000 or any
secondary legislation adopted under the Fair Trading Act 1973 or
similar legislation in any jurisdiction in which that Company
carries on business; or
(c) infringes Article 85 or 86 of the Treaty establishing the European
Community or any other anti-trust or similar legislation in any
jurisdiction in which that Company carries on business.
(2) So far as the Seller is aware, no Company is now, or has during the
last six years been, a party to any agreement or arrangement or been
involved in any business practice in respect of which an undertaking has
been given by or an order made against or in relation to it pursuant to any
anti-trust or similar legislation in any jurisdiction in which it
carries on business.
(3) No Company is now, or has during the last six years been, a party to
any agreement or arrangement or been involved in any business practice in
respect of which:
(a) any request for information, statement of objections or similar
matter has been received by any Company from any court, tribunal,
governmental, national or supra-national authority; or
(b) an application for negative clearance or exemption has been made
by any Company to the Commission of the European Communities.
C.5 Secret or confidential information or property
So far as the Seller is aware, neither any Company nor any other member
of the ADT Group has at any time (save in the normal and proper course
of a Company's day-to-day business or subject to an obligation of
confidentiality or to a Company's professional advisers) disclosed to
any person other than the Purchaser:
(a) any of the secret or confidential information or property of any
Company, including (without limitation) financial information,
plans, statistics, documents, files, client lists, marketing
information, records and papers; or
(b) any other information relating to any Company's business or
affairs the disclosure of which might or could cause loss or
damage to or adversely affect any Company; or
(c) any secret or confidential information relating to any Company's
customers, clients, employees and agents or to any other person
who has or has had any dealings with it.
C.6 Intellectual property rights
(1) Full details of all registered Intellectual Property Rights (including
applications to register the same) and all commercially significant
unregistered Intellectual Property Rights owned by any Company are set
out in the Disclosure Documents.
(2) All the Intellectual Property Rights referred to in subparagraph (1)
above are owned solely by one of the Companies free of all encumbrances.
(3) The Disclosure Documents include copies of all licence and other
agreements relating to Intellectual Property Rights to which any Company
is a party (whether as licensor or licensee) or which relate to any
Intellectual Property Right owned by any Company. No Company is in
material breach of any such agreement and so far as the Sellers are
aware no third party is in material breach of any such agreement.
(4) None of the Intellectual Property Rights described in subparagraph (1)
above or the agreements disclosed in relation to subparagraph (3) above
have lapsed or been cancelled and the Seller is not aware of any
challenge to the validity or subsistence of any of such Intellectual
Property Rights or such agreements.
(5) No claim has been made against any Company that its activities
infringe
any Intellectual Property Rights of any third party.
(6) The Seller is not aware of any unauthorised use by any person of any
Intellectual Property Rights or confidential information of any Company.
(7) None of the Intellectual Property Rights used by any Company are or
should be the subject of a licence agreement with any member of the ADT
Group.
C.7 Insurance
(1) The particulars of the insurance policies effected for the benefit of
each Company which are included in the Disclosure Documents are correct.
(2) So far as the Seller is aware nothing has been done or omitted to be
done by any of the Companies which could make any of those policies of
insurance void or voidable.
C.8 Data
(1) Each UK Company has complied in all material respects with all
relevant requirements of the Data Protection Xxx 0000, including the
following:
(a) the data protection principles established in that Act;
(b) requests from data subjects for access to data held by it; and
(c) the requirements relating to the registration of data users and
so far as relevant, computer bureaux.
(2) No UK Company has received a notice or allegation from either the data
protection registrar or a data subject alleging non-compliance with the
Data Protection Xxx 0000 or any of the data protection principles,
requiring a Company to change or delete any data or prohibiting the
transfer of data to a place outside the United Kingdom.
(3) No individual has claimed compensation from any UK Company under the
Data Protection Xxx 0000 for loss or unauthorised disclosure of data.
(4) Each European Company has complied in all material respects with any
provisions analogous to those referred to in paragraph (1) above in the
jurisdiction in which it is incorporated.
C.9 Business names
No Company carries on business under a name other than its own corporate
name.
C.10 No powers of attorney
No Company has granted any power of attorney or similar authority which
remains in force.
C.11 Default
Neither any Company nor, so far as the Seller is aware, any other party
to any material agreement with any Company is in default under any such
agreement in circumstances likely to give rise to a material adverse
consequence for the Companies (taken as a whole).
C.12 Agencies
No Company has any sales or marketing agent in respect of its products
or services in any part of the world.
C.13 Trade warranties
(1) Except in the ordinary course of business no Company:
(a) has given any guarantee or warranty or made any representation in
respect of articles or trading stock sold or contracted to be sold
by it, save for any guarantee or warranty implied by law; or
(b) has accepted any liability or obligation to service, repair,
maintain or take back any articles or stock after any such
articles or stock have been delivered by it, save pursuant to any
guarantee or warranty implied by law.
(2) No Company has manufactured, sold or supplied products which are or
were in any material respect faulty or defective or which do not comply in
any material respect with any warranties or representations expressly
or impliedly made by the Company or with any applicable legislation,
orders, regulations, standards or requirements, in each case to an
extent which exceeds the normal industry levels for faulty, defective
or non-compliant products.
D. TAXATION
D.1. General
(1) Tax returns
All notices, computations and returns which ought to have been given or
made have been properly and duly submitted by each Company to the
relevant taxation or excise authorities and all information, notices,
computations and returns submitted to such authorities are true and
accurate in all material respects and are not the subject of any
material dispute nor, so far as the Seller is aware, are likely to
become the subject of any material dispute with such authorities.
(2) Taxation liabilities
All taxation of any nature whatsoever for which a Company is liable or
for which a Company is liable to account has been duly paid (insofar as
such taxation ought to have been paid).
(3) Penalties and interest
No Company has within the past six years paid or become liable to pay,
nor so far as the Seller is aware are there any circumstances by reason
of which any Company is likely to become liable to pay, any penalty,
fine, surcharge or interest in connection with taxation.
(4) Investigations
No Company has within the past twelve months suffered any investigation,
audit or visit by any taxation or excise authority, and the Seller is
not aware of any such investigation, audit or visit planned for the next
twelve months.
(5) Consents and clearances
No transaction in respect of which any consent or clearance was required
or sought from any tax authority has been entered into or carried out
within the past six years without such consent or clearance having first
been properly obtained. Any transaction for which such consent or
clearance was obtained has been carried out only in accordance with the
terms of such consent or clearance and the application on which the
consent or clearance was based at a time when such consent or clearance
was valid and effective.
(6) Special arrangements
No tax authority has operated or agreed to operate any special
arrangement (being any arrangement which is not based on relevant
legislation or any published practice) in relation to any Company's tax
affairs.
(7) So far as the Seller is aware any guidance given to a Company by a tax
authority following a tax audit has been followed by the Company.
(8) There are no proceedings pending with a tax authority or a tax court
to which a Company is a party.
(9) The Disclosure Documents provide full details of all tax rulings
obtained by or applicable to any Company and any conditions contained
in such tax rulings have been fully complied with
D.2 Payments
All rents, interest, royalties, licence fees and annual payments paid
or payable by a Company since the Accounts Date or which there is a
subsisting obligation for a Company to pay in the future are or will be
wholly allowable as deductions or charges in computing the income of the
Company for taxation purposes.
D.3 Depreciation
(1) On the assumption that disposals are made for a consideration equal to
the book value of any pool of assets or any asset not in such a pool
shown in or adopted for the purpose of the Financial Information no
charge to tax would arise on the disposal by a Company of any of its
assets or pool of assets.
(2) No claim has been made for the depreciation of any asset of a Company
for tax purposes in circumstances in which the claim is likely to be
disallowed.
D.4 Capital gains
(1) The Disclosure Letter sets out full particulars of all claims and
elections made (or assumed in the Financial Information to be made)
insofar as they could affect the chargeable gain or allowable loss which
would arise in the event of a disposal after the Accounts Date by a
Company of any of its assets.
(2) None of the assets of a Company have been disposed of or acquired
since the Accounts Date in circumstances such that the disposal price or
acquisition cost of the asset would be treated for taxation purposes as
being different from the consideration received or given.
D.5 Employees - compensation for loss of office
No Company is under an obligation to pay nor has since the Accounts Date
paid or agreed to pay any compensation for loss of office or any
gratuitous payment in excess of $50,000 and which is not deductible in
computing its income for the purposes of taxation.
D.6 Tax grouping
(1) No Company has at any time within the last six years had its tax
affairs dealt with on a consolidated basis nor has any Company entered
into any tax sharing arrangement with any other company (including, without
limitation, any arrangement under which tax losses or tax reliefs are
surrendered or claimed or agreed to be surrendered or claimed).
(2) The Disclosure Letter gives details of every written arrangement
referred to in paragraph (1) above that a Company has entered into.
(3) Except as provided in the Financial Information no Company is nor will
it be under any obligation to make or have any entitlement to receive
any payment in respect of any period ending on or before the Accounts
Date under the arrangements referred to in paragraph (1) above.
D.7 Completion
No charge to tax will arise on a Company by virtue only of the entering
into and/or completion of this agreement.
D.8. Tax residence
Each Company is resident for taxation purposes in the country of its
incorporation and is not and has not been subject to tax in any other
jurisdiction.
D.9 Secondary liability
No Company is nor will it become liable to taxation chargeable primarily
on any other company.
D.10 Transfer pricing
No transactions or arrangements involving a Company have taken place or
are in existence which are such that any provision relating to transfer
pricing might be invoked by a taxation or excise authority.
D.11 Deemed income and gains
Except as provided in the Financial Information, no Company has a
liability to taxation on income or gains except in respect of and to the
extent of income and profits actually received, nor do any arrangements
exist which may give rise to such a liability.
D.12 Value added tax
(1) Each Company is duly registered for the purposes of the equivalent of
value added tax in the jurisdiction in which it is incorporated and has
been so registered at all times that it has been required to be so
registered ("VAT").
(2) Each Company has complied in all material respects with all statutory
provisions, rules, regulations, orders and directions concerning VAT,
including the making on time of accurate returns and payments.
(3) No Company has made exempt supplies in the current or preceding VAT
year applicable to that Company and there are no circumstances by reason of
which there might not be a full entitlement to credit for all VAT
chargeable on supplies received and imports made (or agreed or deemed
to be received or made) by the Company since the Accounts Date.
(4) The Disclosure Letter contains full particulars of all elections to
waive exemption in respect of land owned by a Company made or agreed to
be made by a Company and in no case has VAT been charged by a Company
whether on rents or otherwise, which is not properly chargeable because
the relevant person has not made an election to waive exemption having
effect in relation to the relevant supply.
(5) Immediately following Completion, no Company will be bound by any
lease, tenancy or licence in the case of which under its terms or by statute
the Company is or could become liable to pay an amount in respect of VAT
chargeable as a result of the making of an election to waive exemption.
(6) No Company is or has been treated as a member of a group for the
purposes of VAT.
D.13 Stamp tax
(1) So far as the Seller is aware all stamp duty, stamp duty reserve tax,
registration duties and similar taxes or duties have been paid in
respect of all transactions and any instrument or document which affect
the title of a Company to any asset owned by the relevant Company at
Completion.
(2) All duties, fees and penalties payable in respect of the capital of
each of the Companies (including any premium over nominal value to which any
share was issued) have been duly accounted for and paid and there are
no circumstances under which any relief obtained against payment of any
such amount could be withdrawn.
E. PROPERTIES
E.1 Good and marketable title
(1) The Properties are the only properties in any part of the world owned,
controlled, used or occupied by any Company or in which any Company has
any proprietary interest.
(2) The legal and beneficial owner of each Property is the Company shown
in Exhibit 2, and such Company is in exclusive occupation of it and has a
good and marketable title to it.
(3) Each Company has in its possession or control free from any lien all
of the deeds and documents necessary to prove the title of the Company to
the Properties owned by it.
E.2 Roads and services
The relevant Company has a permanent legal right free from restriction
or limitation and from onerous and unusual conditions to use all roads
providing access to and egress from and all conducting media serving
each Property in the manner in which they are presently used.
E.3 Free from encumbrances
(1) Each Property is free from encumbrances or third party rights of any
kind whatever which conflict with, inhibit or restrict the present use
of such Property or materially affects its value.
(2) None of the Properties is subject to any debenture, mortgage, charge,
lien, deposit by way of security or similar encumbrance, or any lease,
option or right of pre-emption or any agreement or commitment to give
or create any of the foregoing.
E.4 Covenants
(1) There is no covenant, restriction, burden, stipulation or outgoing
affecting any Property which is of an onerous or unusual nature or which
conflicts with, inhibits or restricts its present use or materially
affects its value.
(2) No Company has received any notice alleging any material breach of any
covenant affecting the freehold or leasehold titles to the Properties
which allegation remains outstanding.
E.5 Disputes
There are no outstanding disputes regarding boundaries, easements,
covenants or other matters relating to any Property or its present use.
E.6 Planning
(1) In this paragraph "Planning Law" means all statutes, statutory
instruments, byelaws and regulations concerning the control of
development of land and the use of land (including changes in such use)
in the jurisdiction in which the relevant Property is situated.
(2) The present use of each Property is that set out in Exhibit 2; that
use is authorised under Planning Law and the permissions authorising that
use are unconditional and permanent.
(3) No Company has received notice alleging that a material breach of
Planning Law has been committed in relation to any Property which
allegation remains outstanding.
E.7 Notices, orders and proposals
Neither the Seller nor any Company has received any notice or order
affecting any Property from any Government department, any authority or
any third party and so far as the Seller is aware there are no proposals
on the part of any Government department or any authority which would
adversely affect any Property, including, without limitation, those
relating to compulsory purchase or highways works.
E.8 Statutes
So far as the Seller is aware all statutes, orders or regulations
affecting the use and enjoyment of the Properties for their current use
have been observed in all material respects (here meaning material in
the context of each individual Property) and there are no material (as
defined in this Warranty) outstanding requirements or recommendations
of any competent authority in respect of any of the Properties.
E.9 Compliance with leases
In relation to the Properties which are leasehold, the Company has paid
all sums due and, so far as the Seller is aware observed and performed
in all respects all other material obligations on the part of the tenant
and the conditions contained in the leases and the obligations contained
in any licence or other document supplemental to any of the leases.
E.10 Contingent liability
In respect of any real property whether freehold, leasehold, licensed
or occupied under an informal or undocumented arrangement in any part
of the world (other than the Properties) no Company has any liability
(whether actual, contingent or prospective) or obligation to:
(a) perform covenants (restrictive or positive) or agreements
affecting or relating to land;
(b) pay rent or rents, service charges, insurance premiums or other
monies or observe or perform covenants, obligations or conditions
contained in any lease, agreement for lease, licence, deed,
agreement or other document ancillary or supplemental to a lease
whether or not expressed to be so;
(c) make payment under or otherwise observe or perform any guarantee
or surety whether as primary or secondary obligor or indemnity or
otherwise assume any liabilities of any third party by accepting
a leasehold or in any other manner; or
(d) make payments under or otherwise observe or perform any agreement
for sale option or right of pre-emption.
F. EMPLOYEES
F.1 Particulars of employees
(1) The persons whose names are set out in Exhibit 3 are all the employees
of the Companies and that exhibit contains a fair summary of the
material terms of their employment, including their remuneration and the
other benefits which they are entitled to receive from the Companies.
(2) No Senior Employee of any Company has given, or has been given, notice
of termination of his employment.
(3) Since the Accounts Date no material change has been made to the basis
or rate of remuneration, the emoluments or pension benefits of any of
the Senior Employees or any of the other employees of the Companies
which, in the case of the latter, has had a material adverse effect on
the Companies taken as a whole.
(4) No Company has received any notice or allegation that it has failed in
any material respect to comply with any legislation, regulations, codes
of conduct and terms and conditions of employment relating to its
employees' rights generally and which remains outstanding or unresolved.
F.2 Terms of employment
All the contracts of employment of those persons whose names are set out
in Exhibit 3 are terminable by their employer on three months' notice
or less without giving rise to any claim for damages or compensation
(other than compensation pursuant to the Employment Protection
(Consolidation) Act l978 in respect of the UK Companies or analogous
legislation in respect of the European Companies).
F.3 Profit - sharing schemes
The Disclosure Documents contain particulars of every share incentive,
share option, profit sharing or similar scheme applicable to any
employee of any Company.
F.4 Compensation and other sums due to or from employees
(1) No Company has any outstanding liability to pay compensation for loss
of office or employment or a redundancy payment to or in relation to any
present or former employee or any other outstanding liability arising
from the termination of any contract of employment.
(2) Except in respect of reimbursement of out-of-pocket expenses,
relocation
expenses and normal accruals of emoluments no sum is owing or promised
by any Company to any of its employees or former employees.
(3) No Company has made any loan or advance or provided any credit to any
employee or former or prospective employee which is outstanding.
(4) No Company has an obligation to any present or former employee to make
any payment on redundancy in excess of the applicable statutory
redundancy payment.
(5) No employee of any of the Companies has any right or any increased
right, whether contractual or otherwise, which arises or which may arise
on the acquisition of the Shares by the Purchaser under this agreement
or which is contingent on the change of control or ownership of any
Company.
F.5 Pension Schemes
(1) In this paragraph:
"Approved" means approved by the Board of Inland Revenue as an exempt
approved scheme (within the meaning of section 592 of the Taxes Act
1988) and "Approval" has the corresponding meaning;
"European Schemes" means the schemes providing
Retirement/death/disability Benefits operated by the European Companies
in the Netherlands, Belgium and Switzerland details of which are
disclosed in the Disclosure Documents;
"Retirement/death/disability Benefit" means any pension, lump sum,
gratuity or other like benefit given or to be given on retirement or on
death, or in anticipation of retirement, or, in connection with past
service, after retirement or death, or to be given on or in anticipation
of or in connection with any change in the nature of the service of the
employee in question or given or to be given on or in connection with
the illness, injury or disability of, or suffering of any accident by,
an employee;
"Schemes" means the ADT Pension Plan and Britannia Pension and Life
Assurance Scheme, and "Scheme" means either one of them; and
"Scheme Documents" means those documents (copies of which are contained
in the Disclosure Documents) constituting and governing the Schemes
(including all notices, announcements and explanatory literature of
current effect) and all documents relating to the Companies'
participation in and obligations under the Schemes.
(2) All information contained in the Disclosure Documents in connection
with
the Schemes and the European Schemes is correct, and there is no
omission from any of this information which would render it misleading
in any material respect.
(3) Except pursuant to the Schemes and the European Schemes no Company is
under any obligation (actual or contingent, present or future) to pay,
provide or contribute towards or provide or secure through the payment
of premiums, any Retirement/death/disability Benefit in any jurisdiction
for or in respect of any present or past officer or employee (or any
spouse, child or dependant of any of them) of any Company or of any
predecessor in business of any Company.
(4) The Scheme Documents contain full particulars of all the benefits
provided by, or to be provided by, and the terms of the Schemes,
including (but without limitation) any enhancement of or addition to the
benefits or terms in respect of any person.
(5) The Schemes are Approved and there is no ground known to the Seller on
which Approval may be withdrawn or cease to apply.
(6) The contributory members of the ADT Pension Plan employed by any
Company are contracted-out of the State Earnings-Related Pension Scheme by
reference to the Scheme. There is no ground known to the Seller on
which contracted-out status may be withdrawn or cease to apply.
(7) All the Companies participating in the Schemes have paid all sums due
from them and have observed and performed all their other obligations
under the Scheme Documents.
(8) All the Companies participating in the European Schemes have paid all
contributions and premiums due from them in accordance with the European
Schemes.
(9) No debt has become due in respect of the Schemes under section 144 of
the Xxxxxxx Xxxxxxx Xxx 0000.
(10) No members of the Schemes employed by any Company and in pensionable
service are employed outside the United Kingdom.
F.6 Disputes and collective agreements
(1) No significant claim has been made or threatened against any Company
and which remains unresolved or outstanding in respect of any act, event,
omission or other matter arising out of or in connection with:
(a) any application for employment by any person;
(b) the employment or termination of employment of any person;
(c) any Retirement/death/disability Benefit (as defined in F.5);
and the Seller is not aware of any circumstance which may give rise to
any such claim or investigation. For this purpose a "significant" claim
is one which may result in a Company being liable to pay compensation
or other sums in excess of $50,000 to any individual.
(2) There is not, and during the three years preceding the date of this
agreement there has not been, any industrial action affecting any
Company and the Seller is not aware of any circumstance which is likely
to give rise to such industrial action.
(3) No Company is a party to any collective bargaining agreement,
dismissal procedures agreement or union membership agreement.
SCHEDULE 4
WARRANTY LIMITS
1. Each of the Purchaser and Checkpoint acknowledges and agrees that:
(a) the Warranties are the only representations, warranties or other
assurances of any kind given by or on behalf of the Seller or any
other member of the ADT Group in connection with this agreement;
(b) any claim in connection with any of the Warranties (a "Warranty
Claim") shall be subject to the following provisions of this
Schedule; and
(c) at the time of entering into this agreement it is not aware of any
matter or thing which is inconsistent with the Warranties or
constitutes a breach of any of them.
2. The liability of the Seller under or in respect of the Warranties
shall be limited as follows:
(a) the Seller shall not be liable in respect of any breach of the
Warranties if and to the extent that (i) it is liable in respect
of the matter or circumstances giving rise to the breach under the
Tax Deed or (ii) the matter or circumstances giving rise to the
breach give rise to an Adjustment;
(b) the Purchaser shall not be entitled to recover any damages in
respect of any breach or breaches of the Warranties (other than
in respect of those relating to Taxation set out in part D of
Schedule 3 or, for the avoidance of doubt, any amount recoverable
under the Tax Deed) except to the extent that the amount of
damages in respect of all such breach or breaches exceeds in
aggregate the sum of $500,000; and
(c) the maximum aggregate liability of the Seller in respect of all
and any Warranty Claims and all and any claims under the Tax Deed
shall not exceed $54,000,000 less the aggregate amount of any
Adjustments.
3. The Purchaser shall not be entitled to make any Warranty Claim:
(a) to the extent that provision for the matter or liability which
would otherwise give rise to the claim in question is made or
reflected in the Net Asset Statement;
(b) in respect of anything fairly disclosed in the Disclosure Letter
or the Disclosure Documents;
(c) if the claim would not have arisen but for a change in legislation
made after the date of this agreement (whether relating to
taxation, rates of taxation or otherwise) or the withdrawal of any
extra-statutory concession previously made by the Inland Revenue
or other taxing authority (whether or not the change purports to
be effective retrospectively in whole or in part); or
(d) to the extent that the claim arises as a result only of any change
after Completion in the accounting bases upon which any Company
values its assets; or
(e) to the extent that the circumstances or matters which would
otherwise give rise to the claim in question occurred after 22nd
November, 1993 at the instigation, or with the active
participation or assistance, of Xx. X.X. Xxxxxx.
4. If the Purchaser becomes aware of a matter which could give rise to a
Warranty Claim it shall give notice of the then known relevant facts to
the Seller as soon as reasonably practicable and (subject to the
provisions of the Tax Deed in relation to any matter which may form the
subject of a claim under it) if the Warranty Claim in question is as a
result of or in connection with a liability or alleged liability to a
third party:
(a) the Purchaser shall procure the Companies or the relevant one or
more of them to take such action to avoid, dispute, resist,
appeal, compromise or contest the liability as may be reasonably
requested by the Seller and the Seller shall indemnify the
Purchaser in respect of all costs incurred thereby; and
(b) the Purchaser shall procure the relevant Company to make available
to the Seller such persons and all such information as it may
reasonably require for avoiding, disputing, resisting, appealing,
compromising or contesting any such liability.
5. The Seller shall cease to have any liability under or in respect of
the Warranties:
(a) on the seventh anniversary of Completion in respect of those
Warranties relating to Taxation or, if later, the expiry of the
period in any relevant jurisdiction other than the United Kingdom
during which the revenue authorities may assess the tax
liabilities of the relevant Company in respect of any period prior
to Completion; and
(b) on the second anniversary of Completion in respect of any other
Warranties except in respect of a Warranty Claim of which the
Purchaser gives notice to the Seller before the relevant date
and in accordance with paragraph 4 above but, unless the Seller
shall have assumed conduct of the claim in question in accordance
with the above provisions, the liability of the Seller in respect
of any Warranty Claim shall absolutely terminate if proceedings
in respect of it have not been commenced within twelve months of
service of notice of that Warranty Claim.
6. Without prejudice to the Purchaser's duty to mitigate any loss in
respect of any breach of the Warranties if, in respect of any matter
which would otherwise give rise to a breach of the Warranties, one of
the Companies is entitled to claim under any policy of insurance (or
would have been so entitled had it maintained in force its insurance
cover current at Completion) the amount of insurance monies to which
that Company is or would have been entitled shall reduce pro tanto or
extinguish the claim for breach of the Warranties.
7. If the Seller makes any payment by way of damages for breach of the
Warranties (the "Damages Payment") and any of the Companies or the
Purchaser receives any benefit otherwise than from the Seller which
would not have been received but for the circumstance giving rise to the
claim in respect of which the Damages Payment was made, the Purchaser
shall, once it or the relevant Company has received such benefit,
forthwith repay to the Seller an amount equal to the lesser of the
amount of (i) such benefit and (ii) the Damages Payment.
8. The Purchaser shall refrain from doing, and shall procure that the
Companies refrain from doing, any act or thing (other than in the
ordinary course of business of the Companies) which it knows may give
rise to a Warranty Claim which would not otherwise arise.
9. The Purchaser shall not be entitled to rescind this agreement after
Completion in any circumstances.
10. The provisions of this Schedule shall have effect notwithstanding any
other provisions of this agreement.
SCHEDULE 5
TREATMENT OF CLAIMS
1. Interpretation
In this schedule:
"Claim" means each of the following actions, proceedings, claims or
demands made against a Company and referred to in the Disclosure Letter:
(a) the alleged patent infringement claims by MW Trading ApS against
Actron SA and Actron UK Limited;
(b) the action brought by Xxxxxxxx St Marcq against Actron SA;
(c) the action brought by Landrelly S.a.r.L. against Actron SA; and
(d) the action brought by Fors France SA against Actron SA;
insofar as it relates to any act or omission ocurring, or any matter or
circumstance arising, before Completion;
"Counterclaim" means, in relation to any Claim, any action, proceedings,
claim or demand available to any of the Companies against any Third
Party, whether by way of counterclaim or set-off or otherwise;
"Costs" means any:
(a) legal and accountancy fees;
(b) fees or costs of expert witnesses or other experts;
(c) fees of any court or other tribunal;
(d) costs awarded to any other person against any Company;
in each case relating to the conduct of any Claim or Counterclaim
incurred on or after Completion, excluding any VAT.
"Finally Determined" means, in relation to any Claim or Counterclaim,
the date on which:
(i) if there is an appeal procedure available from the decision of the
competent tribunal or court relating to the Claim or Counterclaim,
the time limit for an appeal against a final judgment, order or
award of the competent tribunal or court expires without an appeal
against that decision being made; or
(ii) if there is no appeal procedure available from the decision of the
competent tribunal or court in respect of the Claim or
Counterclaim, the decision is made; or
(iii) any formal agreement is signed settling the Claim or
Counterclaim; or
(iv) the Claim or Counterclaim is formally abandoned or withdrawn; and
"Third Party" means any person making a Claim or against whom a
Counterclaim is made or who is at any time a party to any proceedings
in respect of the Claim or Counterclaim.
2. Conduct
(1) The provisions of this paragraph apply to each Claim and Counterclaim.
(2) The Seller shall be entitled to resist the Claim in the name of the
Companies or the relevant one or more of them and shall have the sole
and exclusive conduct on behalf of the Companies concerned of the
defence of any Claim, the prosecution of any Counterclaim, and of any
appeal, dispute, compromise of or in relation to the Claim or any
Counterclaim and of any incidental negotiations (including any
settlement of all or part of the Claim or Counterclaim).
(3) The Purchaser shall procure that the Companies shall appoint or
confirm
the appointment of such professional advisers as the Seller may decide
in relation to the Claim and any Counterclaim.
(4) The Seller shall pay all the Costs incurred by the Seller on behalf of
any Company relating to the conduct of the Claim and any Counterclaim.
(5) The Purchaser confirms to the Seller that no member of the Purchaser's
Group (excluding the Companies) has assisted any person making a Claim
or (other than as a licensee of MW Trading ApS) has any business
relationship with any such person and undertakes to the Seller that,
except as directed by the Seller in writing from time to time, no member
of the Purchaser's Group shall do or, so far as it is able to do so,
permit any of the officers or employees to do any act or thing after
Completion which would compromise or prejudicially affect the liability
of any Company in respect of any Claim or its rights in repect of any
Counterclaim, but the Purchaser shall not be deemed to be in breach of
this undertaking merely because a Company elects (at its risk) after
Completion to continue selling products the subject of the alleged
patent infringement claims by MW Trading ApS against Actron SA and
Actron UK Limited referred to in paragraph 1 above.
(6) The Purchaser shall and shall procure that all other members of the
Purchasers Group shall:
(a) co-operate with the Seller and its professional advisers and at
the request of the Seller or its professional advisers provide all
such assistance and information as is in the possession or under
the control of any member of the Purchaser's Group relating to any
Claim or Counterclaim as soon as practicable after any request is
received;
(b) promptly (by fax where practicable) advise the Seller or its
professional advisers of any communication or information, and
forward to them any correspondence, notice or other document,
received from any person relating to any Claim or Counterclaim;
(c) ensure that such employees or officers of any member of the
Purchaser's Group as are from time to time specified by the Seller
or its professional advisers:
(i) are available at all reasonable times to discuss any matter
relating to the Claim or Counterclaim with the Seller or its
professional advisers; and
(ii) provide any such assistance as the Seller or its
professional advisers reasonably require in relation to the
Claim or Counterclaim.
(7) The Seller shall procure that the Purchaser is kept informed of all
material developments relating to the progress of any Claim or
Counterclaim and shall notify the Purchaser forthwith on any Claim or
Counterclaim being Finally Determined and provide the Purchaser with
particulars of the outcome, specifying the amount payable to or by any
Company.
3. Adjustment to consideration
(1) This paragraph shall apply on each occasion on which a Claim or
Counterclaim is Finally Determined.
(2) If as a result of the Claim or Counterclaim being Finally Determined:
(a) any Company is obliged to make a payment to a Third Party
(including any costs of the Third Party), the Seller shall pay to
the Purchaser a sum equal to the amount of that payment, less a
sum equal to any amount which any Company is entitled to receive
from that Third Party as a result of the Claim or Counterclaim
being Finally Determined;
(b) any Company receives a payment from a Third Party (including any
Costs), the Purchaser shall pay to the Seller a sum equal to the
amount of that payment less a sum equal to any amount which any
Company is obliged to pay to that Third Party as a result of the
Claim or Counterclaim being Finally Determined.
(3) Any amount becoming payable by or to the Seller under sub-paragraph
(2)
above shall be paid by or to it within five Business Days of the date
on which the Claim or Counterclaim is Finally Determined, by way of an
adjustment to the consideration for the sale of the Shares.
Signed by Xxxxxxxx X. Xxxxx)
for ADT (UK) LIMITED )
Signed by Xxxxx X. Xxxxxxx )
for ADT LIMITED )
Signed by Xxxx X. Xxxxxx)
for ELECTRONIC )
SIGNATURES, INC. )
Signed by Xxxx X. Xxxxxx )
for CHECKPOINT SYSTEMS, INC)
