December 14, 2006 Asset Sale and Purchase Agreement relating to certain assets of McMurdo Limited's marine business McMurdo Limited (1) Signature Industries Limited (2) Digital Angel Corporation (3) and Chemring Group Plc (4)
Exhibit
2.8
CONTENTS
Clause
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Page
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1
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Definitions
and interpretation
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1
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2
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Agreement
to Sell and Purchase
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9
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|
3
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Price
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9
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4
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Completion
Statement, Anniversary Statement and Adjustment to the Initial
Price
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10
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5
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Conditions
Precedent
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11
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6
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Deposit
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13
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7
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Exchange
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14
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8
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Completion
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14
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9
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Conduct
of Business prior to Completion
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16
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10
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Warranties
|
17
|
|
11
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Buyer’s
remedies
|
18
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12
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Property
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19
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13
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Employees
|
19
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|
14
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Business
Contracts
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20
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15
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Mutual
covenants and apportionments
|
22
|
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16
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Book
Debts and Creditors
|
23
|
|
17
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Obligations
of the Seller and Buyer after Completion
|
23
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18
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Restrictive
Covenants
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24
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19
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Confidentiality
|
25
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20
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Value
Added Tax
|
00
|
|
00
|
XX
Xxxxxxxxx
|
00
|
|
00
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CG
Guarantee
|
28
|
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23
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Announcements
and publicity
|
29
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24
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Notices
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29
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25
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Successors,
assigns and third parties
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30
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26
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Variation
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30
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|
27
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Waiver
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30
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28
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Costs
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30
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|
29
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Severance
|
30
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30
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Further
assurance
|
31
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|
31
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Entire
Agreement
|
31
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32
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Counterparts
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31
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33
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Miscellaneous
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31
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34
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Applicable
law and jurisdiction and remedy
|
31
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35
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Post-completion
effect
|
32
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Schedule
1
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33
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||
Apportionment
of the Initial Price
|
33
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Schedule
2
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34
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||
Warranties
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34
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||
Schedule
3
|
46
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||
Limitations
to the Warranties
|
46
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||
Schedule
4
|
50
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||
The
Employees
|
50
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||
Schedule
5
|
51
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||
The
Customer Contracts
|
51
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||
Schedule
6
|
53
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||
The
Supplier Contracts
|
53
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||
Schedule
7
|
55
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||
Products
|
55
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Schedule
8
|
56
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||
Registered
Intellectual Property
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56
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||
Schedule
9
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57
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||
The
Deferred Price
|
57
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Schedule
10
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61
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||
The
Plant
|
61
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Schedule
11
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62
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Schedule
12
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63
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Schedule
13
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71
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Schedule
14
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72
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This
Agreement is dated
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2006
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Parties
(1)
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McMurdo
Limited, a company incorporated in England (registered number 746603)
whose registered office is at 1650 Parkway, Whiteley, Fareham, Hampshire
PO15 7AH (the Seller).
|
(2)
|
Signature
Industries Limited, a company incorporated in England (registered
number
02800561) whose registered office is at Xxx Xxxxx Xxxx, Xxxxxxxxxx,
Xxxxxx
XX00 0XX (the Buyer).
|
(3)
|
Digital
Angel Corporation, a company incorporated under the laws of the state
of
Delaware USA whose registered office is at 000 Xxxxxxxx Xxxxxx, Xxxxx
Xx.
Xxxx, Xxxxxxxxx 00000-0000, XXX (DA).
|
(4)
|
Chemring
Group Plc, a company incorporated in England (registered number 86662)
whose registered office is 1650 Parkway, Whiteley, Xxxxxxx, Xxxxxxxxx,
XX00 0XX (CG).
|
Agreed
terms:
1
|
Definitions
and interpretation
|
1.1 | In this Agreement, unless the context otherwise requires, the following words will have the following meanings: |
Accounts
|
the
audited financial statements of the Seller for the accounting reference
period ended on the Accounting Date comprising a balance sheet,
profit and
loss account, notes, the directors’ and auditors’ reports a copy of which
is attached to the Disclosure
Letter;
|
Actual
Plant Value
|
the
aggregate value of the Plant as shown in the Completion Statement
as
agreed or determined in accordance with Schedule
12;
|
Actual
S&P Value
|
the
aggregate of the Actual Plant Value and the Actual Stock
Value;
|
Actual
Stock Value
|
the
aggregate value of the Stock as shown in the Completion Statement
as
agreed or determined in accordance with Schedule
12;
|
AIS
Business
|
the
business of the design, manufacture and sale of the AIS Products
carried
on by the Seller at the Transfer Date;
|
AIS
Contracts
|
those
contracts, engagements or orders entered into on or prior to the
Transfer
Date by or on behalf of the Seller with customers for the sale,
loan or
hire of goods or equipment or provision of services by the Seller
in
connection with the AIS Business;
|
AIS
Products
|
MT-1
transponder, XX-0
XXX Xxxxxxx, XX-0 transponder and M-2 Minimum
Keyboard Display;
|
Anniversary
Adjustment
|
the
Unused Stock Value less the Zero Valued Used Stock
Value;
|
Anniversary
Date
|
the
first anniversary of the Completion
Date;
|
1
Anniversary
Statement
|
the
anniversary statement prepared in accordance with clause 4.5 and
Schedule
12;
|
Assets
|
the
assets of the Business agreed to be sold and purchased pursuant
to this
Agreement as described in clause 2.1;
|
Book
Debts
|
all
trade and other debts owing to the Seller on the Transfer
Date;
|
Business
|
the
business of the design, manufacture and sale of the Products carried
on by
the Seller at the Transfer Date;
|
Business
Contracts
|
the
Customer Contracts, Supplier Contracts, IP Licences and the Leasing/Hire
Agreements;
|
Business
Day
|
any
day which is not a Saturday, a Sunday or a bank or public holiday
in
England and Wales;
|
Business
Information
|
all
information, documentation, papers, books, records, know-how and
techniques (whether or not confidential and in whatever form held)
(if
any) which exclusively relate to:
|
(a)
|
all
or any part of the Business and Assets (including all books, accounts,
credit reports, price lists, cost records, warranty records, work
tickets,
catalogues, certificates of title (including all correspondence
with the
patent and trade xxxx agents relating to any registered Business
Intellectual Property and all registration certificates
therefor);
|
(b)
|
any
products or services rendered by the Business (including formulae,
designs, processes, specifications, drawings, data, manuals or
instructions, plans, product descriptions, user or test reports,
type
approval papers or certificates, instructional and promotional
material
and other technical material together with any plates, blocks,
negatives
and similar material relating
thereto);
|
(c)
|
any
products or processes which are or were the subject of any research
or
development undertaken exclusively by the Business (whether or
not
completed or abandoned);
|
(d)
|
the
operations, management, administration, or financial affairs of
the
Business (including all employee records and interview records;
and
|
(e)
|
the
sale or marketing of any of the products manufactured and/or sold
or
services rendered by the Business including, without limitation,
all
customer and supplier names and lists, sales advertising and marketing
information (including without limitation, targets, sales and market
share
statistics, market surveys and reports on research and terms and
conditions of sale or supply), type approvals, licences and national
or
local authorisations in respect of the
Products;
|
Business
Intellectual Property
|
all
Intellectual Property owned or lawfully used by the Seller exclusively
in
connection with the Business as carried on by the Seller as at
the
Transfer Date including:-
|
(a)
|
those
items of registered Intellectual Property (and applications therefor)
described in Schedule;
|
(b)
|
the
Business Information; and
|
2
(c)
|
the
Business Name
|
but
excluding without limitation any Business Intellectual Property relating
to the
Computer System.
Business
Name
|
‘McMurdo’
(subject always to the terms of the Connectors Licence), 'McMurdo
Marine’
and ‘Nova Marine Systems’;
|
Buyer's
Group
|
the
Buyer, its holding company and all companies and undertakings which
now or
in the future become subsidiaries or subsidiary undertakings of
the Buyer
or of any such holding company;
|
Buyer’s
Solicitors
|
Kimbells
LLP, Xxxxx Xxxxx, Xxxxxxxx Xxxxx, Xxxxxxxxx, Xxxxxx Xxxxxx XX0
0XX;
|
CAA
|
the
Capital Xxxxxxxxxx Xxx 0000;
|
Completion
|
completion
of the sale and purchase of the Business and the Assets in accordance
with
clause 8;
|
Completion
Date
|
(subject
to clause 5.5)
the date which is the earlier of:
|
(a)
|
5
Business Days after notice has been given in accordance with
clause 5.2
by
the relevant Party that the last unsatisfied Condition has been
satisfied;
and
|
(b)
|
5
Business Days after the Buyer has waived the last unsatisfied Condition
or
Conditions in accordance with clause
5.4
|
or
such
other date as the Buyer and the Seller may agree;
Completion
Statement
|
the
completion statement prepared in accordance with the clause 4.1
and
Schedule 12;
|
Computer
System
|
all
computer hardware and associated peripheral equipment, software,
networks
and technical and other documentation related thereto owned or
used by the
Business including all arrangements relating to the provision of
maintenance and support, security, disaster recovery, facilities
management, bureau and on-line services to the
Business;
|
Conditions
|
the
conditions precedent set out in clause 5.1;
|
Connectors
Licence
|
the
trade xxxx licence dated 18 June 1998 between the Seller (1) and
ITW
Limited (2), a copy of which is at Folder 2a Section 14a of the
Disclosure
Bundle;
|
Connectors
Novation
|
the
deed of novation in the agreed form to be entered into between
the Seller
(1), ITW Limited (2) and the Buyer (3);
|
Creditors
|
all
trade and other debts, accrued charges and all other amounts owing
by the
Seller in connection with the Business on the Transfer
Date;
|
Customers
|
the
persons, firms or companies who or which were either at the Transfer
Date
or during the period of 12 months prior to the Transfer Date a
customer of
the Business;
|
Customer
Contracts
|
those
contracts, engagements or orders entered into on or prior
|
3
to
the
Transfer Date by or on behalf of the Seller with customers for the sale,
loan or
hire of goods or equipment or provision of services by the Seller in connection
with and in the ordinary course of the Business which at the Transfer Date
remain to be performed in whole or in part by the Seller being those contracts
listed in Schedule 5 and any further such contracts entered into after or
on
today's date. For the avoidance of doubt this excludes the AIS Contracts
and the
RNLI Contract;
Deferred
Price
|
the
further price, if any, payable by the Buyer for the Goodwill calculated
in
accordance with Schedule
5;
|
Deposit
|
has
the meaning given in clause 3.2.1;
|
Disclosure
Bundle
|
has
the meaning given in the Disclosure
Letter;
|
Disclosure
Letter
|
a
letter dated the same date as this Agreement from the Seller to
the
Buyer;
|
Employees
|
the
persons whose names are set out in Schedule
4;
|
Escrow
Agents
|
the
Buyer’s Solicitors and the Seller’s
Solicitors;
|
Escrow
Bank
|
National
Westminster Bank plc, Xxxxxx
Keynes;
|
Escrow
Letter
|
the
letter, in the agreed form, to be signed by the parties instructing
and
authorising the Escrow Agents to establish and operate the Retention
Account;
|
Excluded
Assets
|
the
following assets which are excluded from the sale to the Buyer
under this
Agreement: (i) the Retained Business; (ii) the Book Debts; (iii)
the
statutory books of the Seller; (iv) cash in hand or at the bank
and all
cheques and other securities representing the same; (v) any right
to use
or continue to use after Completion any trade or service name or
xxxx of
the Seller or any member of the Seller’s Group other than the Business
Names; (vi) the Property; (vii) the Computer System; (viii) items
of plant
and equipment used by the Seller in both the Business and the AIS
Business; and (ix) all assets, property rights and other interests
of the
Seller other than the Assets;
|
Expert
|
has
the meaning given in clause 11.4;
|
Goodwill
|
the
goodwill custom and connection of the Seller exclusively in relation
to
the Business together with the exclusive right for the Buyer and
its
successors and assigns to carry on the Business and use the Business
Names
respectively to represent themselves as carrying on the Business
in
succession to the Seller;
|
Guaranteed
Agreements
|
has
the meaning given in clause 21.1
|
HBoS
Release
|
the
release from HBoS in the agreed
form;
|
Initial
Price
|
the
sum of £3,117,020;
|
Initial
Plant Value
|
the
amount specified in Schedule 1 as being that part of the Initial
Price
apportioned to the Plant;
|
Initial
S&P Value
|
the
aggregate of the Initial Plant Value and the Initial Stock
|
4
Value;
Initial
Stock Value
|
the
amount specified in Schedule 1 as being that part of the Initial
Price
apportioned to the Stock;
|
Intellectual
Property
|
patents,
know-how, goodwill, registered and unregistered trademarks and
service
marks, domain names, registered designs, design rights, utility
models,
copyright (including all such rights in computer software, information
and
any databases), database rights, moral rights and topography rights,
trade
secret and other similar confidential information, rights in the
nature of
unfair competition rights and right to xxx for passing off and
any other
similar intellectual or commercial right (in each case whether
or not
registered or registrable for the full period thereof and all extensions
and renewals thereof), applications for any of the foregoing and
the right
to apply for any of the foregoing in any part of the world and
any similar
rights situated in any country;
|
Interest
Rate
|
means
2% above the base rate of the Bank of England from time to
time;
|
IP
Licences
|
means,
save for any which are incorporated into Customer Contracts or
Supplier
Contracts, any licences, authorisations and permissions in any
form
whatsoever whether express or implied, written or unwritten (a)
pertaining
to the use, enjoyment and exploitation by the Seller of any Business
Intellectual Property in connection with the Business as carried
on at the
Transfer Date, or (b) granted by the Seller to any third party
including a
member of the Seller's Group in the course of the Business pertaining
to
the use, enjoyment and exploitation by such third party of any
Business
Intellectual Property together with any other such licences entered
into
on or after today's date;
|
Leasing/Hire
Agreements
|
those
leasing
and hire agreements entered into on or prior to the Transfer Date
by or on
behalf of the Seller for the lease or hire of equipment exclusively
in
connection with and in the ordinary course of the Business which
at the
Transfer Date remain to be performed in whole or in part being
those
contracts listed
in Schedule 11 and any other leasing or hire agreements entered
into on or
after today's date by the Seller exclusively in connection with
the
Business;
|
Legal
Opinion
|
the
legal opinion in agreed form given in relation to DA entering into
this
Agreement;
|
Licence
|
has
the meaning given in clause 12.1;
|
Management
Accounts
|
the
accounts comprising a balance sheet as at 24 November 2006 and
a profit
and loss account for the period which commenced on 1 August 2006
and ended
on 24 November 2006, a copy of which is annexed to the Disclosure
Letter;
|
Mandate
Letters
|
letters
from the Buyer's Solicitors and the Seller's Solicitors to the
Escrow Bank
in the agreed form;
|
NAV
7 Licence
|
the
ip licence relating to the NAV7 casings and related tooling to
be entered
into between the Seller (1) and the Buyer (2) in the agreed
form;
|
Novation
Agreement
|
the
novation agreement to be entered into by the Parties in the
|
5
agreed
form;
Parties
|
the
parties to this Agreement (and Party means any of them depending
on the
context);
|
Patent
Assignment
|
the
patent assignment in the agreed form to be entered into between
the Seller
(1) and the Buyer (2);
|
Plant
|
the
plant, equipment (including items of office equipment used by Employees
on
a day to day basis other than any such items which relate to the
Computer
System) and machinery wherever situate, including tools and jigs
in the
possession of suppliers, belonging to the Seller and used exclusively
in
connection with the Business being those items listed in Schedule
10
together with any other such items acquired by the Seller after
today’s
date but before Completion and less any items on such list which
are
disposed of by the Seller after today’s date but before
Completion;
|
Post
Exchange Breach
|
has
the meaning given in clause 10.6;
|
Price
|
the
total purchase price payable by the Buyer to the Seller as referred
to in
clause 3.1;
|
Products
|
the
products listed at
Schedule 7;
|
Property
|
the
property known as Xxxxxx Xxxxx, Xxxxxxx Xxxxxxx Xxxx, Xxxxxxxxxx
XX0 0XX and any part or parts
thereof;
|
Retained
Business
|
any
businesses (other than the Business) carried on or previously carried
on
by the Seller (including the AIS Business and the carrying out
of its
obligations pursuant to the RNLI
Contract);
|
Retention
|
has
the meaning given in clause 3.2.3;
|
Retention
Account
|
the
joint interest bearing account to be established in accordance
with the
Escrow Letter;
|
Retention
Account Opening Form
|
the
form opening the Retention Account in the agreed
form;
|
RNLI
Contract
|
the
development and licensing agreement dated 19 September 2005 between
the
Seller (1) and RNLI (2), a copy of which is at Folder 2a, Section
8 of the
Disclosure Bundle;
|
Seller’s
Solicitors Account
|
the
Seller’s Solicitors client account held at Lloyds TSB Bank plc, sort code
30-96-68, account number 00000000 (or such other account as the
Seller may
notify the Buyer in writing);
|
Security
Interest
|
any
encumbrance, mortgage, charge, assignment for the purpose of security,
pledge, lien, right of set-off, retention of title or hypothecation
for
the purpose, or which has the effect, of granting security interest
of any
kind whatsoever and any agreement, whether conditional or otherwise,
to
create any of the foregoing;
|
Seller’s
Group
|
the
Seller, its holding company and all companies and undertakings
which now
or in the future become subsidiaries or subsidiary undertakings
of the
Seller or of any such holding
company;
|
6
Seller’s
Scheme
|
the
pension scheme known as the Chemring Group Staff Pension
Scheme;
|
Seller’s
Solicitors
|
Bond
Xxxxxx LLP of Oceana House, 00-00 Xxxxxxxxxx Xxxx, Xxxxxxxxxxx
XX00
0XX;
|
Special
Provisions Order
|
the
VAT (Special Provisions) Order 1995 SI
1995/1268;
|
Stock
|
the
stock-in-trade exclusively relating to the Business at the Transfer
Date
including (without limitation) raw materials, goods and other assets
purchased for resale, stores, component parts, work in progress,
together
with finished products all exclusively relating to the Business,
including
those items listed in Schedule 14 (to the extent they have not
been used
or otherwise disposed of by the Buyer after today’s
date);
|
Supplier
Contracts
|
those
contracts, engagements or orders entered into on or prior to
the Transfer
Date by or on behalf of the Seller for the supply or sale of
goods or
services to the Seller exclusively in connection with and in
the ordinary
course of the Business which at the Transfer Date remain to be
performed
in whole or in part including those contracts listed in Schedule
6. For
the avoidance of doubt this excludes any contracts between the
Seller and
a third party supplier which relate to services provided by the
Seller to
the Buyer under the Transitional Services
Agreement;
|
Tax
or Taxation
|
all
taxes, levies, duties, imposts, charges, contributions and withholdings
of
any nature whatsoever or wheresoever imposed and all penalties,
fines,
charges, surcharges and interest relating
thereto;
|
Trade
Xxxx Assignment
|
the
trade xxxx assignment in the agreed form to be entered into between
the
Seller (1) and the Buyer (2)
|
Transfer
Date
|
the
close of business on the Completion
Date;
|
Transitional
Services Agreement
|
an
agreement in respect of certain transitional services between the
Seller
and the Buyer in the agreed form;
|
TULRA
|
the
Trade Union and Labour Relations (Consolidation) Xxx
0000;
|
TUPE
|
the
Transfer of Undertakings (Protection of Employment) Regulations
2006 (as
amended);
|
Unused
Stock
|
items
of Stock which have not been used or otherwise disposed of by the
Buyer by
the Anniversary Date;
|
Unused
Stock Value
|
the
aggregate value of the Unused Stock as shown in the Anniversary
Statement
as agreed or determined in accordance with Schedule 12 and clause
4.10;
|
US
Coastguard Contract
|
US
Coast Guard contract ref HSCG 23-06-R-DNQ159 dated 27 September
2006
between United States Coast Guard (1) and the Seller (2) a copy
of which
is at Folder 2a, Section 6 of the Disclosure
Bundle;
|
VAT
|
Value
Added Tax or any equivalent tax outside of the United
Kingdom;
|
VATA
|
Valued
Added Tax Xxx 0000;
|
7
Warranties
|
the
warranties set out in clause 10
and Schedule
2.
|
Zero
Valued Used Stock
|
items
of Stock which were given a value of zero when calculating the
Actual
Stock Value and which have been used by the Buyer after
Completion;
|
Zero
Valued Used Stock Value
|
the
aggregate value of the Zero Valued Used Stock as shown in the Anniversary
Statement as agreed or determined in accordance with Schedule 12
and
clause 4.10;
|
1.2
|
In
this Agreement, unless the context requires
otherwise:
|
1.2.1
|
a
document in
the agreed form
is
a document which has been agreed by the parties before today's date
and
which has been initialled by them or on their behalf for
identification;
|
1.2.2
|
references
to a Clause or Schedule are to a clause of or a schedule to this
Agreement; references to this Agreement include its schedules; and
references in a Schedule to a paragraph are to a paragraph of that
Schedule;
|
1.2.3
|
all
words and terms defined in a Schedule have the same meaning when
used
elsewhere in this Agreement;
|
1.2.4
|
references
to this Agreement or any other document are to this Agreement or
that
document as amended from time to
time;
|
1.2.5
|
the
singular includes the plural and vice versa; references to any gender
include every gender, and references to persons include corporations,
partnerships and other unincorporated associations or bodies of
persons;
|
1.2.6
|
all
headings are for convenience, have no legal effect and should be
ignored
in the interpretation of this
Agreement;
|
1.2.7
|
the
words other,
including
and in
particular
do
not limit the generality of any preceding
words;
|
1.2.8
|
any
obligation not to do anything is deemed to include an obligation
not to
suffer, permit or cause that thing to be done if it is within the
power of
the relevant person to prevent that thing being
done;
|
1.2.9
|
agreements
includes any agreement, arrangement, contract, commitment, scheme
or
understanding whether legally binding or not and references to being
party
to an agreement will be construed
accordingly;
|
1.2.10
|
enactment
means any statute or statutory provision (of the United Kingdom or
elsewhere) and any subordinate legislation made under any statute
or
statutory provision;
|
1.2.11
|
a
reference to any enactment includes a reference
to:
|
(a)
|
any
enactment which that enactment has directly or indirectly replaced
(with
or without modification); and
|
(b)
|
that
enactment as re-enacted, replaced or modified at any time except
to the
extent that the liability of any party would be increased or extended
as a
result.
|
1.2.12
|
subsidiary
and holding
company
have the meanings given to them by section 736 Companies Act 1985
and
subsidiary
undertaking
and parent
undertaking
will have the meanings given to them by section 258 Companies Xxx
0000;
and
|
8
1.2.13
|
associate
has the meaning given to it by section 435 Insolvency Act 1986 and
a
person is regarded as associated
with any person which is an associate of his and with any company
of which
any director is an associate of his.
|
2
|
Agreement
to Sell and Purchase
|
2.1
|
With
effect from the Transfer Date the Seller will sell and the Buyer
(relying
on the Warranties) will purchase the Business as a going concern
together
with the following assets:
|
2.1.1
|
the
Goodwill;
|
2.1.2
|
the
Plant;
|
2.1.3
|
the
Stock;
|
2.1.4
|
the
benefit (subject to the burden) of the Business
Contracts;
|
2.1.5
|
the
Business Intellectual Property;
|
2.1.6
|
the
Business Information; and
|
2.1.7
|
all
the Seller’s rights against third parties including all rights under any
of the warranties, conditions, guarantees or indemnities or under
the Sale
of Goods Xxx 0000 exclusively relating to any of the Assets and the
benefit of all sums to which the Seller is entitled from third parties
or
insurers in respect of damage to those Assets
listed in clauses 2.1.1
to 2.1.6
(inclusive);
|
but
for
the avoidance of doubt, excluding the Excluded Assets.
2.2
|
The
Seller will sell the Business and the Assets with full title guarantee
free from all Security Interests.
|
2.3
|
Title
to and beneficial ownership of each of the Assets will pass to the
Buyer
on Completion.
|
2.4
|
For
the avoidance of doubt this Agreement shall not operate to assign
to the
Buyer any liabilities or obligations except as specifically stated
in this
Agreement or any documents which are in the agreed
form.
|
3
|
Price
|
3.1
|
The
price is the total of the Initial Price (as adjusted in accordance
with
clause 4 and Schedule 12) and the Deferred Price.
|
3.2
|
The
Initial Price will be paid as
follows:
|
3.2.1
|
£250,000
of the Initial Price (Deposit)
will be paid on the date of this Agreement in accordance with clause
6.1;
|
3.2.2
|
£2,792,020
of the Initial Price will be paid on Completion in accordance with
clause
8.1.2(b); and
|
3.2.3
|
£75,000
of the Initial Price (Retention)
will be paid on Completion into the Retention Account in accordance
with
clause 8.1.2(c).
|
3.3
|
The
provisions of Schedule 13 apply to the Retention once it has been
deposited in the Retention Account. The Buyer and the Seller shall
instruct their respective solicitors to open the Retention Account
using
the Retention Account Opening Form and Mandate
Letters.
|
3.4
|
The
provisions of Schedule 9 apply to the calculation and payment of
the
Deferred Price.
|
9
3.5
|
Subject
to adjustment in accordance with clause 4, the Initial Price will
be
apportioned as set out in Schedule 1.
|
4
|
Completion
Statement, Anniversary Statement and Adjustment to the Initial
Price
|
4.1
|
The
Buyer and the Seller will ensure that the Completion Statement is
prepared
in accordance with Schedule 12.
|
4.2
|
If
the Actual S&P Value:
|
4.2.1
|
is
equal to the Initial S&P Value there shall be no adjustment of the
Initial Price;
|
4.2.2
|
is
less than the Initial S&P Value the Seller will repay to the Buyer so
much of the Initial Price as is equal to the deficiency, provided
always
that the Seller shall not be required pursuant to this clause to
repay an
amount which is more than Initial S&P Value;
or
|
4.2.3
|
is
more than the Initial S&P Value the Buyer will pay to the Seller an
additional amount of consideration, such amount being equal to the
excess.
|
4.3
|
Any
payment required to be made under clause 4.2.2 or 4.2.3 will be made
in
cleared funds by electronic funds transfer within five Business Days
of
the Completion Statement being agreed, deemed agreed or determined
by the
Independent Accountants in accordance with Schedule 12 and will be
paid,
in the case of clause 4.2.2, to the Buyer’s Solicitors and in the case of
clause 4.2.3, to the Seller’s Solicitors. The relevant Solicitors are
hereby authorised to receive the same and their receipt will be an
absolute discharge of the Seller or the Buyer (as the case may
be).
|
4.4
|
If
any Party fails to make full payment under clause 4.2, the outstanding
balance of that payment from time to time will bear interest (as
well
after as before judgment) from the due date for payment in accordance
with
clause 4.3 to the actual date of payment (both dates inclusive) at
the
rate of 4 % per annum above the base rate of National Westminster
Bank plc
from time to time.
|
4.5
|
The
Buyer and the Seller will ensure that the Anniversary Statement is
prepared in accordance with Schedule 12 and clause
4.10.
|
4.6
|
If
the Anniversary Adjustment:
|
4.6.1
|
is
zero there shall be no further adjustment of the Initial Price;
|
4.6.2
|
is
more than zero the Seller will repay to the Buyer so much of the
Initial
Price as is equal to the excess, provided always that the Seller
shall not
be required pursuant to this clause to repay an amount which is more
than
Actual Stock Value; or
|
4.6.3
|
is
less than zero the Buyer will pay to the Seller an additional amount
of
consideration, such amount being equal to the
excess.
|
4.7
|
Subject
to clause 4.8, any payment required to be made under clause 4.6.2
or 4.6.3
will be made in cleared funds by electronic funds transfer within
five
Business Days of the Completion Statement being agreed, deemed agreed
or
determined by the Independent Accountants in accordance with Schedule
12
and will be paid, in the case of clause 4.6.2, to the Buyer’s Solicitors
and in the case of clause 4.6.3, to the Seller’s Solicitors. The relevant
Solicitors are hereby authorised to receive the same and their receipt
will be an absolute discharge of the Seller or the Buyer (as the
case may
be).
|
4.8
|
Payment
obligations under clause 4.6 will first be satisfied from the Retention
Account in accordance with Schedule
13.
|
4.9
|
If
any Party fails to make full payment under clause 4.6, the outstanding
balance of that payment from time to time will bear interest (as
well
after as before judgment) from the due date for payment in accordance
with
clause 4.7 to the actual date of payment (both
|
10
dates
inclusive) at the rate of 4 % per annum above the base rate of National
Westminster Bank plc from time to time.
4.10
|
In
the period between Completion and the Anniversary Date the Buyer
shall
always use the items of Stock before using similar items acquired
by it
after Completion. For the purpose of the Anniversary Statement if
the
Buyer has failed to comply with its obligation under this clause
the
Unused Stock, the Zero Valued Used Stock, the Unused Stock Value,
Zero
Valued Used Stock and the Anniversary Adjustment shall be calculated
on
the basis that they are what they would have been had the Buyer complied
with its obligation under this
clause.
|
4.11
|
The
Buyer and the Seller agree that when it is agreed they will both
initial
the list of Stock prepared for the purpose of the Completion Statement.
A
copy of such Stock list will be kept by both of them so that it is
available for the purpose of the Anniversary Statement. The Buyer
and the
Seller acknowledge that, subject only to paragraph 6.2 of part 3
of
Schedule 12, for the purposes of the Anniversary Statement such Stock
list
will be conclusive evidence of the
Stock.
|
5
|
Conditions
Precedent
|
5.1
|
Completion
of this Agreement is conditional upon
the Buyer or Seller :
|
5.1.1
|
receiving
the consent of Xxxxx Instruments Corp to the assignment (conditional
on
Completion taking place) of the agreement dated 1 December 2002 between
the Seller (1) and Xxxxx Instruments Corp (2) (a copy of which is
at
Folder 2c, Section D.1 of the Disclosure Bundle) from the Seller
to the
Buyer in accordance with the terms of such agreement or in such other
manner or form as the Seller and Buyer may
agree;
|
5.1.2
|
receiving
the consent of Simrad Limited to the assignment (conditional on Completion
taking place) of the agreement dated 7 February 2003 between the
Seller
(1) and Simrad Limited (2) (a copy of which is at Folder 2a, Section
7 of
the Disclosure Bundle) from the Seller to the Buyer in accordance
with the
terms of such agreement or in such other manner or form as the Seller
and
Buyer may agree;
|
5.1.3
|
receiving
the consent of Furuno Electric Co. Limited to the assignment (conditional
on Completion taking place) of the agreement dated 30 June 2005 between
the Seller (1) and Furuno Electric Co. Limited (2) (a copy of which
is at
Folder 2a, Section 5 of the Disclosure Bundle) from the Seller to
the
Buyer in accordance with the terms of such agreement or in such other
manner or form as the Seller and Buyer may
agree;
|
5.1.4
|
receiving
confirmation from Xxxxxx Xxxxxx Limited that other than as a result
of
matters which only become apparent after Completion the identity
of the
Buyer will not lead it to exercise its rights (under the second paragraph
of clause 11.1.3 of such agreement) to terminate the agreement dated
30
June 2005 between the Seller (1) and Xxxxxx Xxxxxx Limited (2) (a
copy of
which is at Folder 2a, Section 4 of the Disclosure
Bundle);
|
5.1.5
|
receiving
confirmation from Mitsubishi (or its relevant group company or agent)
that: (i) the patent licence (a copy of which is at Folder 2b, Section
6
of the Disclosure Bundle) has been assigned or will be assigned to
the
Buyer subject only to the Buyer or Seller confirming that the Business
and
Assets have transferred to the Buyer; or (ii) a replacement of such
patent
licence has been granted to or will be granted to the Buyer subject
only
to the Buyer or Seller confirming that the Business and Assets have
transferred to the Buyer;
|
5.1.6
|
receiving
confirmation from the Seller that the two software bugs referred
to at
Disclosure 41 of the Disclosure Bundle have been resolved and that
the
testing carried out by the Seller to check that they have been resolved
the Seller has carried out following the appropriate testing procedures
included in the Seller’s quality approved
system;
|
11
5.1.7
|
receiving
confirmation from the relevant authority or authorities that the
UK
product approvals which the Seller has in place at today’s date in
relation to each of the Products (such approvals being listed in
the
document at Folder 2a, Section 13c of the Disclosure Bundle) (UK
Approvals)
either have been issued or will be issued to the Buyer subject only
to the
relevant authority or authorities receiving confirmation that the
Business
and Assets have transferred to the
Buyer;
|
5.1.8
|
receiving
confirmation from the relevant authority or authorities that the
Danish
product approvals which the Seller has in place at today’s date in
relation to each of the Products (such approvals being listed in
the
document at Folder 2a, Section 13c of the Disclosure Bundle) either
have
been issued or will be issued to the Buyer subject only to the relevant
authority receiving confirmation that the Business and Assets have
transferred to the Buyer and/or confirmation that any of the UK Approvals
specified by such authority or authorities have been
issued;
|
5.1.9
|
receiving
confirmation from the relevant authority or authorities that the
French
product approvals which the Seller has in place at today’s date in
relation to each of the Products (such approvals being listed in
the
document at Folder 2a, Section 13c of the Disclosure Bundle) either
have
been issued or will be issued to the Buyer subject only to the relevant
authority receiving confirmation that the Business and Assets have
transferred to the Buyer and/or confirmation that any of the UK Approvals
specified by such authority or authorities have been
issued;
|
5.1.10
|
receiving
confirmation from the relevant authority or authorities that the
German
product approvals which the Seller has in place at today’s date in
relation to each of the Products (such approvals being listed in
the
document at Folder 2a, Section 13c of the Disclosure Bundle) either
have
been issued or will be issued to the Buyer subject only to the relevant
authority receiving confirmation that the Business and Assets have
transferred to the Buyer and/or confirmation that any of the UK Approvals
specified by such authority or authorities have been
issued;
|
5.1.11
|
receiving
confirmation from the relevant authority or authorities that the
Greek
product approvals which the Seller has in place at today’s date in
relation to each of the Products (such approvals being listed in
the
document at Folder 2a, Section 13c of the Disclosure Bundle) either
have
been issued or will be issued to the Buyer subject only to the relevant
authority receiving confirmation that the Business and Assets have
transferred to the Buyer and/or confirmation that any of the UK Approvals
specified by such authority or authorities have been
issued;
|
5.1.12
|
receiving
confirmation from the relevant authority or authorities that the
Italian
product approvals which the Seller has in place at today’s date in
relation to each of the Products (such approvals being listed in
the
document at Folder 2a, Section 13c of the Disclosure Bundle) either
have
been issued or will be issued to the Buyer subject only to the relevant
authority receiving confirmation that the Business and Assets have
transferred to the Buyer and/or confirmation that any of the UK Approvals
specified by such authority or authorities have been
issued;
|
5.1.13
|
receiving
confirmation from the relevant authority or authorities that the
Singaporean product approvals which the Seller has in place at today’s
date in relation to each of the Products (such approvals being listed
in
the document at Folder 2a, Section 13c of the Disclosure Bundle)
either
have been issued or will be issued to the Buyer subject only to the
relevant authority receiving confirmation that the Business and Assets
have transferred to the Buyer and/or confirmation that any of the
UK
Approvals specified by such authority or authorities have been
issued;
|
5.1.14
|
receiving
confirmation from the relevant authority or authorities that the
United
States (FFC) product approvals which the Seller has in place at today’s
date in relation to each of the Products (such approvals being listed
in
the document at Folder 2a, Section 13c of the Disclosure Bundle)
either
have been issued or will be issued to the Buyer subject only to the
relevant authority receiving confirmation that the Business and Assets
have transferred to the Buyer and/or confirmation
|
12
that
any
of the UK Approvals specified by such authority or authorities have been
issued;
5.1.15
|
receiving
confirmation from the relevant authority or authorities that the
Spanish
product approvals which the Seller has in place at today’s date in
relation to each of the Products (such approvals being listed in
the
document at Folder 2a, Section 13c of the Disclosure Bundle) either
have
been issued or will be issued to the Buyer subject only to the relevant
authority receiving confirmation that the Business and Assets have
transferred to the Buyer and/or confirmation that any of the UK Approvals
specified by such authority or authorities have been issued;
and
|
5.1.16
|
receiving
confirmation from the relevant authority or authorities that the
Netherlands product approvals which the Seller has in place at today’s
date in relation to each of the Products (such approvals being listed
in
the document at Folder 2a, Section 13c of the Disclosure Bundle)
will be
issued to the Buyer subject only to the relevant authority receiving
confirmation that the Business and Assets have transferred to the
Buyer
and/or confirmation that any of the UK Approvals specified by such
authority or authorities have been
issued.
|
5.2
|
The
Seller and Buyer shall respectively use all reasonable endeavours
to
ensure the satisfaction of all the Conditions as soon as possible
so far
as lies within their respective power so to do. As soon as a Condition
is
satisfied the Party who received notice from the relevant third party
that
it has been will promptly give written notice of this fact to the
Buyer or
Seller (as the case may be).
|
5.3
|
All
costs and expenses relating to obtaining the consents or approvals
or
other matters referred to in clauses 5.1.1 to 5.1.16 will be borne
by the
Seller and the Seller shall indemnify the Buyer and keep it indemnified
against any such costs and expenses provided always that the obligations
of the Seller under this clause 5.3 shall immediately cease in relation
to
any consent or approval or other matter if the Buyer waives the Condition
relating to such consent or approval or other
matter.
|
5.4
|
The
Buyer may waive in writing all or any of the Conditions.
|
5.5
|
If
all the Conditions are not satisfied or waived in accordance with
clause 5.4
on
or before 16 April 2007 (or such other date as the Seller and the
Buyer in
their absolute discretion may agree in writing) this Agreement (save
for
clauses 5.6, 6 (in relation to to whom the Deposit
belongs)and 23
which shall remain in force) shall become null and void and no party
shall
be entitled to make a claim against any other party in connection
with
this Agreement save for any claim which arises in respect of clauses
5.6,
6 (in relation to to whom the Deposit belongs) and 23.
|
5.6
|
If
any of the approvals referred to in this clause 5 are granted to
the Buyer
and for whatever reason Completion does not take place, the Buyer
will (at
the Buyer's expense) do, execute and perform and will procure to
be done,
executed and performed all such acts, deeds, documents and things
as the
Seller may require to ensure that any such approvals are reissued
in the
name of the Seller (or in such name as it may direct) and that they
cease
to be issued in the name of the Buyer. As security for the performance
of
its obligations under this clause 5.6, the Buyer hereby irrevocably
and
unconditionally appoints any director (for the time being) of the
Seller
severally as its attorney with full power and authority in the Buyer’s
name and on its behalf to do, sign and execute all acts, documents
or
deeds that the attorney, in its absolute discretion, considers necessary
or desirable for the performance of these
obligations.
|
6
|
Deposit
|
6.1
|
Upon
signing this Agreement the Buyer will pay the Deposit by electronic
transfer to the Seller’s Solicitors Account and the Seller’s Solicitors
are hereby authorised to receive the same and whose receipt will
be an
absolute discharge of the Buyer.
|
6.2
|
If
all the Conditions are satisfied and the Buyer fails to complete
the
purchase of the Business and the Assets under clause 8
on
the Completion Date (other than where it properly rescinds this Agreement
pursuant to clause 8.5
or
it properly terminates this
|
13
Agreement
pursuant to clause 11.1.2)
then
the Seller shall be entitled to retain the Deposit and this Agreement (save
for
clause 5.6, this clause 6 (in relation to to whom the Deposit belongs) and
clause 23
which
shall remain in force) shall become null and void and no Party shall be entitled
to make a claim against any other party in connection with this Agreement save
for any claim which arises in respect of clause 5.6, this clause 6 (in relation
to to whom the Deposit belongs)and clause 23.
6.3
|
If:
|
6.3.1
|
all
the Conditions are not satisfied or waived in accordance with
clause 5.4
on
or before 16 April 2007 (or such other date as the Seller and the
Buyer in
their absolute discretion may agree in writing);
or
|
6.3.2
|
the
Buyer rescinds the Agreement pursuant to clause 8.5;
or
|
6.3.3
|
the
Buyer terminates the Agreement pursuant to clause 11.1.2;
|
the
Seller shall refund the Deposit to the Buyer promptly to such bank account
as
the Buyer may nominate.
7
|
Exchange
|
7.1
|
Exchange
will take place at the offices of the Seller’s Solicitors on today’s date
(or such other place as the parties may agree), when the following
will
take place:
|
7.1.1
|
the
Seller will deliver, or procure delivery, (in the case of items (a)
to (d)
below at the Property) to the Buyer
of:
|
(a)
|
the
Disclosure Letter; and
|
(b)
|
a
certified copy of an extract from the minutes of a meeting of the
directors of the Seller and Chemring in the agreed form authorising
the
execution by such party of this Agreement and of any other documentation
that may be necessary or desirable arising out of or in connection
with
this Agreement and appointing the relevant signatory or signatories
to
sign the same;
|
7.1.2
|
against
compliance by the Seller with its obligations under clause 8.1.1
the
Buyer will deliver, or procure delivery, to the Seller
of:
|
(a)
|
a
certified copy of the minutes of a meeting of the directors of the
Buyer
and DA in the agreed form authorising the execution by such party
of this
Agreement and of any other documentation that may be necessary or
desirable arising out of or in connection with this Agreement and
appointing the relevant signatory or signatories to sign the same;
|
(b)
|
a
duly countersigned copy of the Disclosure
Letter;
|
(c)
|
the
Legal Opinion duly given by the relevant lawyers;
|
(d)
|
evidence
satisfactory to the Seller that the Buyer will be able fund the payments
this Agreement requires it is to make on
Completion
|
and
pay
the Deposit by electronic transfer to the Seller’s Solicitors Account and the
Seller’s Solicitors are hereby authorised to receive the same and whose receipt
will be an absolute discharge of the Buyer.
8
|
Completion
|
8.1
|
Subject
to clause 5,
Completion will take place at the offices of the Seller’s Solicitors on
the Completion Date (or such other place as the parties may agree),
when
the following will take place:
|
14
8.1.1
|
the
Seller will deliver, or procure delivery, (in the case of items (a)
to (d)
below at the Property) to the Buyer
of:
|
(a)
|
all
the Assets capable of passing by delivery (and title to those assets
will
pass by delivery);
|
(b)
|
all
documents of title and certificates it may hold exclusively relating
to
the lawful operation and use of, and all service documents pertaining
to
the Plant, and the Stock;
|
(c)
|
all
documents of title, certificates, deeds, licences, agreements and
other
documents it may hold exclusively relating to the Business Intellectual
Property (including any correspondence with the patent and trade
xxxx
agents relating to any registered Business Intellectual Property
and all
registration certificates therefor) and all manuals, drawings, plans,
documents and other materials and media it may hold on which the
Business
Information is exclusively
recorded;
|
(d)
|
the
Business Contracts to the extent they are
written;
|
(e)
|
the
duly executed HBoS Release in the agreed form;
|
(f)
|
the
Licence duly executed by the
Seller;
|
(g)
|
duly
executed board minutes and written resolution evidencing the change
of
name of McMurdo Limited, McMurdo Marine Limited, McMurdo Lights Limited
and Nova Marine Systems Limited;
|
(h)
|
the
NAV 7 Licence duly executed by the
Seller;
|
(i)
|
the
Trade Xxxx Assignment duly executed by the Seller;
|
(j)
|
the
Transitional Services Agreement duly signed by the Seller;
and
|
(k)
|
the
Patent Assignment duly executed by the
Seller
|
8.1.2
|
against
compliance by the Seller with its obligations under clause
8.1.1
the Buyer will:
|
(a)
|
deliver,
or procure delivery, to the Seller of:
|
(i)
|
the
Licence duly executed by the Buyer;
|
(ii)
|
the
NAV 7 Licence duly executed by the
Seller;
|
(iii)
|
the
Trade Xxxx Assignment duly executed by the Seller;
and
|
(iv)
|
the
Patent Assignment duly executed by the Seller;
|
(v)
|
the
Transitional Services Agreement duly signed by the Buyer;
|
(b)
|
pay
£2,792,020 of the Initial Price by electronic transfer to the Seller’s
Solicitors Account and the Seller’s Solicitors are hereby authorised to
receive the same and whose receipt will be an absolute discharge
of the
Buyer; and
|
(c)
|
pay
the Retention by electronic transfer to the Retention Account.
|
8.2
|
The
Buyer will not be obliged to complete the purchase of any of the
Assets
unless the purchase of all the Assets is completed in accordance
with this
Agreement.
|
15
8.3
|
At
Completion the Seller and the Buyer shall sign the Escrow Letter
and
procure that the Escrow Agents sign and deliver the Retention Account
Opening Form and the Mandate Letter to the Escrow
Bank.
|
8.4
|
The
Buyer may, in its absolute discretion, waive any requirement contained
in
clause 8.1.1.
The Seller may, in its absolute discretion, waive any requirement
contained in clause 8.1.2.
|
8.5
|
If
any of the provisions obligations set out in clause 8.1
are not fully complied with on the Completion Date by the Buyer or
the
Seller (as the case may be) (the “Party
in Default”) the
Party to whom the relevant obligation is owed may, on one or more
occasions, by written notice to the Party
in Default
|
8.5.1
|
defer
Completion to a date not more than 10 Business Days following the
intended
Completion Date or the next following intended Completion Date if
Completion has already been deferred under this Clause (and the provisions
of Clause 8
apart from this Clause 8.5
will
apply to the deferred Completion);
or
|
8.5.2
|
proceed
to Completion so far as practicable (without prejudice to its rights
under
this Agreement); or
|
8.5.3
|
rescind
this Agreement.
|
8.6
|
If
this Agreement is rescinded pursuant to this clause 8.6, it shall
become
null and void (save for clauses 5.6, 6
(in relation to to whom the Deposit belongs) and 23
which shall remain in force) and no Party shall be entitled to make
a
claim against any other party in connection with this Agreement save
for
any claim which arises in respect of clauses 5.6, 6
(in relation to to whom the Deposit belongs) and 23.
|
9
|
Conduct
of Business prior to
Completion
|
9.1
|
Pending
the Transfer Date, ownership of the Assets shall be retained by and
risk
in the Assets shall remain with the
Seller.
|
9.2
|
Subject
to the provisions of clause 9.3,
the Seller shall continue to carry on the Business for its own benefit
and
at its own risk up to the Transfer
Date.
|
9.3
|
Save
in circumstances where in the Seller's reasonable opinion a failure
to
take or make the relevant act or omission may prejudice the interests
of
any company in the Seller's group, the Seller undertakes to the Buyer
that
pending the Completion Date unless it has obtained the prior written
consent of the Buyer to the contrary (such consent not to be unreasonably
withheld or delayed):
|
9.3.1
|
the
Business will in all material respects continue to be carried on
in the
same manner as it is presently carried on as regards the nature,
scope and
manner of conducting it and so as to maintain it as a going
concern;
|
9.3.2
|
it
will not enter into a long term contract (being a contract which
cannot be
terminated by the Seller on less than 3 months notice) or a contract
with
an aggregate contract value of more than £25,000 in relation to the
Business (provided that where details of any such contract are contained
in the Disclosure Letter the Buyer shall be deemed to have given
its prior
written consent to such contract being entered
into);
|
9.3.3
|
it
will not engage any person as an employee of the Business other than
the
Employees;
|
9.3.4
|
it
will not create, issue or grant or agree to create, issue or grant
any
Security Interest over any of the Assets unless, the Assets will
be
released from such Security Interest on or prior to the
Completion;
|
9.3.5
|
there
shall be no merger or amalgamation of the Business with any other
company
or business;
|
16
9.3.6
|
it
shall not (and shall procure that no member of the Seller’s Group)
directly or indirectly acquire any business which is competitive
with any
business carried on by the
Business;
|
9.3.7
|
no
scheme of arrangement will be entered into in relation to the
Seller;
|
9.3.8
|
there
shall be no change to the corporate and/or trading names currently
used by
the Seller;
|
9.3.9
|
no
resolution for the cessation of business or the winding-up of the
Seller
shall be proposed, made or take place except in the event of the
insolvency of the Seller;
|
9.3.10
|
the
Seller will not directly request or procure the appointment of a
receiver
or an administrative receiver of the whole or any part of the
Assets;
|
9.3.11
|
it
will not commence any legal or arbitration proceedings (other than
routine
debt collection) in relation to the
Business;
|
9.4
|
Pending
Completion or earlier termination of the Agreement pursuant to this
Agreement, the Buyer and the Seller will use reasonable endeavours
to
resolve constructively any issues that arise in relation to the Business
so as to achieve an orderly transfer under this
Agreement.
|
9.5
|
Pending
Completion the Seller will, on the Buyer’s reasonable request, give to the
Buyer or its professional advisers such facilities and information
(including access to Employees) regarding the Business and Assets
as it
may reasonably request.
|
9.6
|
Pending
Completion the Seller will have Xxxxxx Xxxx telephone Xxxxx Xxxxxxx
of the
Buyer on a weekly basis to give him a business update in relation
to the
Business.
|
9.7
|
Pending
Completion the Seller will provide the Buyer with monthly management
accounts (in a form consistent with the Management Accounts) relating
to
the Business.
|
10
|
Warranties
|
10.1
|
The
Seller warrants to the Buyer in the terms set out in Schedule 2
and acknowledges that the Buyer is entering into this Agreement in
reliance on the Warranties.
|
10.2
|
The
Warranties are given subject only to matters fairly disclosed in
the
Disclosure Letter and for this purpose fairly disclosed means disclosed
in
a manner and with sufficient detail to enable a reasonable buyer
to make a
reasonably informed assessment of the matter
concerned.
|
10.3
|
Where
any Warranty is qualified by “to the best of the Seller’s knowledge and
belief” or “so far as the Seller is aware” or other similar qualification,
such warranty will be deemed to include additional statements that
it has
been made after reasonable enquiry of Xxxx Xxxxxx, Xxxxx Xxxxxx,
Xxxxxx
Xxxx and Xxxxx Xxxxxxxx of the Seller and the Seller will be deemed
to
have knowledge only of that information revealed by such
enquiries.
|
10.4
|
Each
of the Warranties is separate and independent of other
Warranties.
|
10.5
|
The
Parties agree that any claims under the Warranties will be limited
in
accordance with Schedule 3.
|
10.6
|
The
Seller undertakes that pending Completion it will as soon as reasonably
practicable notify the Buyer in writing of any fact, matter or
circumstance arising after today’s date of which it becomes aware (such
awareness being deemed to be the actual knowledge of Xxxx Xxxxxx,
Xxxxx
Xxxxxx, Xxxxxx Xxxx and Xxxxx Xxxxxxxx) which causes any of the
Warranties, whether given at today’s date or if they were to be repeated
immediately before Completion, to be breached (“Post
Exchange Breach”);
|
17
11
|
Buyer’s
remedies
|
11.1
|
If,
on or before Completion the Seller notifies the Buyer that there
has been
a material breach (as defined in clause 11.4)
the Buyer may within 15 Business Days (or longer if extended pursuant
to
clause 11.5)
of receipt of such notice, either:
|
11.1.1
|
elect
to waive such material breach and proceed to Completion. If the Completion
Date has already passed when the Buyer so elects it shall be deemed
to be
5 Business Days after the date on which such election is made;
or
|
11.1.2
|
elect
to terminate this Agreement (save for clause 5.6, clause 6 (in relation
to
to whom the Deposit belongs) and clause 23
which shall remain in force) by serving written notice on the Seller
and
following such termination the Agreement shall become null and void
and no
Party shall be entitled to make a claim against any other party in
connection with this Agreement save for any claim which arises in
respect
of clause 5.6, clause 6 (in relation to to whom the Deposit belongs)
and
clause 23.
|
11.2
|
If
the Buyer proceeds to Completion having received notice of a material
breach (as defined in clause 11.4)
it shall be deemed to have irrevocably waived any claim it may have
against the Seller in respect of the facts matters and circumstances
giving rise to such material breach and the circumstances or consequences
which flow from them. If the Buyer terminates this Agreement having
received notice of a material breach (as defined in clause
11.4)
it shall have no further claim whatsoever against the Seller or Chemring
pursuant to this Agreement.
|
11.3
|
If,
on or before Completion the Seller notifies the Buyer that there
has been
a Post Exchange Breach which has arisen as a result of an act or
omission
of the Seller after today’s date and such breach is not a material breach
(as defined in clause 11.4)
the Buyer shall be entitled to bring claim in respect of such breach
provided that for all purposes such claim shall be deemed to be claim
for
breach of the Warranties. The Buyer shall have no other remedy against
the
Seller whatsoever in respect of such
breach.
|
11.4
|
For
the purposes of this clause 11
a
“material
breach”
shall mean any Post Exchange Breach in respect of which the quantum
of
damages is agreed or determined to be in excess of £300,000.
If
there is a dispute as to whether the relevant Post Completion Breach
amounts to a material breach, the Buyer and the Seller shall acting
reasonably attempt to agree the level of such quantum. If they have
not
agreed it within 7 Business Days, either of them may refer the matter
for
determination by an independent chartered accountant or other suitable
expert (the
“Expert”)
agreed on by them (or appointed by the President for the time being
of the
Institute of Chartered Accountants of England and Wales on the request
of
either of them). The Expert shall act as an expert (not an arbitrator)
and
his determination shall (in the absence of manifest error) be conclusive.
The Expert’s fees shall be paid as he determines equitable.
|
11.5
|
If
the Expert’s determination is sought and he determines that it is a
material breach, the 15 Business Day period specified in clause
11.1
shall be deemed to end 5 Business Days after the Expert issues his
determination.
|
11.6
|
If
the Expert’s determination is sought and he determines that it is not a
material breach then clause 11.3
applies. If the Completion Date has already passed when his determination
is made then it shall be deemed to be 5 Business Days after the date
on
which the Expert made his
determination.
|
11.7
|
If
:
|
11.7.1
|
within
the period of 15 Business Days referred to in clause 11.1
there is no agreement and no determination has been sought as to
whether
the Post Exchange Breach amounts to a material breach;
or
|
18
11.7.2
|
the
Buyer and Seller have agreed that the Post Exchange Breach amounts
to a
material breach and the Buyer has not made its election pursuant
to clause
11.1;
or
|
11.7.3
|
the
Expert has made a determination of whether the Post Exchange Breach
amounts to a material breach and the Buyer has not made its election
pursuant to clause 11.1,
|
then
the
Buyer shall be deemed to have made the election specified in
clause 11.1.1
and the
Parties shall proceed to Completion 5 Business Days after the end of such 15
Business Days period.
12
|
Property
|
12.1
|
In
accordance with the terms of the Transitional Services Agreement,
the
Seller shall procure that Chemring grants the Buyer a non-exclusive
licence (the “Licence”)
to occupy the Property for a period of 9 months from the Completion
Date.
|
13
|
Employees
|
13.1
|
The
parties acknowledge and agree that irrespective of any determination
by a
court of competent jurisdiction to the contrary that the sale and
purchase
pursuant to this Agreement will constitute a relevant transfer for
the
purposes of TUPE and accordingly that it will not operate so as to
terminate any of the contracts of employment of the Employees and
such
contracts will be transferred to the Buyer pursuant to TUPE with
effect
from the Transfer Date which will be the time of transfer under TUPE.
|
13.2
|
The
Seller undertakes to the Buyer (for itself and as trustee for all
other
owners for the time being of the whole or any part of the Business
and the
Assets) to indemnify fully and keep indemnified the Buyer and all
other
owners referred to in this clause 13.2
against all losses, damages, costs, actions, awards, penalties, fines,
proceedings, claims, demands, liabilities (including without limitation
any liability to Tax), and expenses (including, without limitation,
legal
and other professional fees and expenses) which the Buyer or any
of such
owners may suffer, sustain, incur, pay or be put to by reason or
on
account of or arising from:-
|
13.2.1
|
any
claim or other legal recourse by all or any of the Employees in respect
of
any fact or matter concerning or arising from employment with the
Seller
prior to the Transfer Date;
|
13.2.2
|
any
claim or other legal recourse by any trade union or staff association
or
employee representatives in respect of all or any of the Employees
arising
from or connected with the failure by the Seller to comply with its
legal
obligations to such trade union or staff association or employee
representatives; and
|
13.2.3
|
any
act or omission done or omitted to be done by the Seller in relation
to
the Employees or any other employee of the Seller which by virtue
of TUPE
is deemed to be an act or omission of the Buyer.
|
13.3
|
If
any contract of employment or collective agreement not disclosed
to the
Buyer will have effect as if originally made between the Buyer and
any of
the Employees or a trade union as a result of the provisions of
TUPE:
|
13.3.1
|
the
Buyer may, within 28 days of the Transfer Date, terminate such contract
or
agreement forthwith; and
|
13.3.2
|
the
Seller will indemnify and will keep indemnified the Buyer against
all
losses, damages, costs, actions, proceedings, claims, demands, liabilities
(including, without limitation, any liability to Taxation), and expenses
(including, without limitation, legal and other professional fees
and
expenses) which the Buyer may suffer, incur, sustain, pay or be put
to by
reason or on account of or arising out of
|
19
such
termination or arising from such contracts of employment or collective agreement
before and after the Transfer Date.
13.4
|
Without
prejudice to the other provisions of this clause, the Seller will,
at its
own expense, give the Buyer such assistance as the Buyer may reasonably
require to contest any claim by any person employed in the Business
at or
prior to Completion resulting from or in connection with this
Agreement.
|
13.5
|
The
Buyer will
perform and observe all the employer’s obligations, whether under the
contract of employment or otherwise, arising out of or in connection
with
any employee’s employment including, without limitation, payment for wages
or salaries, accrued holiday pay, sick pay, maternity pay, liability
to
tax, accrued bonuses or commissions and other periodic payment for
any
period after the Transfer Date.
|
13.6
|
The
Buyer confirms and acknowledges that it has supplied the Seller in
writing
with all relevant information for the purposes of Regulation 13 of
TUPE on
a timely basis in connection with the sale and purchase of the
Business.
|
13.7
|
The
Buyer will indemnify the Seller against each and every cost, claim,
liability, expense or demand arising
from:
|
13.7.1
|
any
act or omission of the Buyer in relation to an Employee occurring
after
the Transfer Date; or
|
13.7.2
|
any
claim or allegation by an Employee that as a result of the sale of
the
Business to the Buyer, there has been or will be a significant detrimental
change in that Employee’s working
conditions.
|
13.8
|
If
the Seller employs any person in connection with the Business between
today’s date and Completion then, if the Buyer’s written consent to this
employment has been obtained (but not otherwise) that person is deemed
to
be an Employee.
|
13.9
|
If
any person employed in connection with the Business is dismissed
or his
employment otherwise terminates for any reason between today’s date and
Completion then that person is deemed not to be an
Employee.
|
14
|
Business
Contracts
|
14.1
|
With
effect from the Transfer Date the Buyer will:
|
14.1.1
|
become
entitled to the benefit of the Seller under the Business Contracts;
and
|
14.1.2
|
carry
out and perform and complete all the obligations and liabilities
created
by or arising under the Business Contracts (except to the extent
that any
obligations or liabilities which are attributable to a breach on
the part
of the Seller or its employees, agents or sub-contractors).
|
14.2
|
With
effect from the Transfer Date the Seller hereby assigns to the Buyer
all
the Business Contracts which are capable of assignment without the
consent
of other parties.
|
14.3
|
If
any of the Business Contracts cannot be assigned to the Buyer without
the
agreement of or novation by or consent to the assignment from another
party this Agreement will not constitute an assignment or attempted
assignment if the same would constitute a breach of such Business
Contracts. In the event that consent or novation is required to such
assignment:
|
14.3.1
|
at
the Buyer’s request the Seller will use all reasonable endeavours with the
co-operation of the Buyer to procure such novation or assignment
on terms
reasonably satisfactory to the Buyer;
|
14.3.2
|
unless
and until any such Business Contract will be novated or assigned
the
Seller will continue its corporate existence and will hold such Business
Contract on trust
|
20
for
the
Buyer and its successors in title absolutely and the Buyer will perform all
the
obligations of the Seller under such Business Contract as the Seller’s
sub-contractor (if such sub-contracting is permissible and lawful under the
Business Contract in question).
14.4
|
If
the Seller receives any payment in respect of the Business Contracts
on or
after the Transfer Date the Seller will hold the same as trustee,
record
such payment separately in its books and will account to the Buyer
for the
same within 5 Business Days of
receipt.
|
14.5
|
The
Buyer will fully and effectively indemnify the Seller (and keep the
Seller
so indemnified) against all liabilities, losses, actions, costs,
claims,
demands and expenses brought or made against or incurred by the Seller
in
respect of the non-performance or defective or negligent performance
by
the Buyer of the Business Contracts after the Transfer
Date.
|
14.6
|
Save
as otherwise herein expressly provided, the Seller will fully and
effectively indemnify the Buyer (and keep the Buyer so indemnified)
against all liabilities, losses, actions, costs, claims, demands
and
expenses brought or made against or incurred by the Buyer in respect
of
the non-performance or defective or negligent performance by the
Seller of
the Business Contracts prior to the Transfer
Date
|
14.7
|
In
relation to the Connectors Licence it is the intention of the Buyer
and
the Seller that any novation of it will be on the terms (or substantially
the terms) of the Connectors Novation. It is the intention of the
Buyer
and the Seller that the Connectors Novation (or a novation on
substantially similar terms) will be entered into on Completion and
if ITW
Connectors Limited executes such novation on or before Completion
the
Buyer and the Seller will also execute such novation on Completion.
If
such novation is not executed by ITW Limited until after Completion,
then
the Buyer and the Seller will each execute it as soon as reasonably
practicable after ITW Limited has executed
it.
|
14.8
|
If
the protest which has been made in the United States by a third party
in
relation to the US Coast Guard Contract is sustained and the Buyer
loses
the US Coast Guard Contract, such contract shall cease to be treated
as a
Customer Contract and the Buyer shall have no claim whatsoever against
the
Seller or CG in relation to such cessation. The Seller acknowledges
that
in relation to such protest it is responsible for paying the legal
fees
involved in defending such protest until such time as the Government
Accountability Office (GAO)
has made it decision to sustain, dismiss or deny such protest (expected
January/February 2007). For the avoidance of doubt, when the GAO
has made
such decision the Parties agree that neither the Seller nor CG shall
have
any further obligation relation to such
protest.
|
14.9
|
Unless
agreed otherwise by the Seller and the Buyer, the supply contract
with
Reactive Data in relation to the flash memory cards (further detail
in
respect of which is at Disclosure 25 in the Disclosure Letter) shall
not
be a Business Contract for the purpose of this Agreement and the
liability
in relation to it will remain with the Seller. If following Completion
the
Buyer needs to buy flash memory cards of the type referred to in
the
preceding sentence, it shall first buy them from the Seller (at a
price
equal to the cost to the Seller) until such time as the Seller has
none
left in stock. For the avoidance of doubt, subject to the limit specified
in paragraph 5.4 of Part 1 of Schedule 12, nothing in this clause
shall
prevent flash memory cards being included in Stock at a level no
greater
than they are at in the list of stock at Schedule
14.
|
14.10
|
The
Seller confirms that any claims (including any claim which may be
brought
by Furuno for liquidated damages under the relevant contract) by
Furuno
arising from the breach of the Furuno contract details of which are
set
out at Disclosure 27 of the Disclosure Letter are the liability of
the
Seller and the Seller shall indemnify the Buyer and keep it indemnified
from any liabilities under the relevant contract to the extent that
they
arise from such breach.
|
14.11
|
The
Seller shall indemnify the Buyer and keep it indemnified from any
liabilities it may suffer as a result of the Seller not owning the
intellectual property rights in the beacon circuit board and the
antenna
receiver for the SEPIRB (as more particularly described in Disclosure
21)
provided always that the Buyer shall not be entitled to make a claim
under
|
21
this
indemnity after the sixth anniversary of the Completion Date and provided
further that the Buyer shall be under a duty to mitigate its loss in relation
to
any such claims.
15
|
Mutual
covenants and
apportionments
|
15.1
|
Save
as otherwise herein expressly provided the Seller covenants with
the Buyer
that
the Seller will pay, satisfy, discharge and fulfil all costs, claims,
expenses, liabilities, obligations and undertakings whatsoever relating
to
the Business arising in respect of or by reference to any period
up to and
including the Transfer Date and will indemnify and hold harmless
the Buyer
in respect of the same.
|
15.2
|
Save
as otherwise herein expressly provided the Buyer covenants with the
Seller
that it will pay, satisfy, discharge and fulfil all costs, claims
and
expenses, liabilities, obligations and undertakings whatsoever relating
to
the Business in respect of any period commencing immediately after
the
Transfer Date and will indemnify and hold harmless the Seller in
respect
of the same.
|
15.3
|
Subject
to the remainder of this clause 15, all costs, claims, expenses,
liabilities, obligations and undertakings whatsoever ("Remedial
Costs")
resulting from any defects in, or alleged defects in, goods or parts
of
goods sold or supplied or services provided in the course of the
Business
prior to the Transfer Date shall be the responsibility of the Seller
and
not the Buyer. For the avoidance of doubt the Seller confirms that
any
costs arising from any refit instruction given by the Seller in relation
to the HRU units (as more particularly described in Disclosure 40
in the
Disclosure Letter) shall be its liability (or that of another company
in
its group) and not the Buyer’s.
|
15.4
|
If
the Buyer receives notice from a customer of the Business of any
defect or
alleged defect of the type referred to in clause 15.3 and there is
no
potential right of recovery for the Seller against a third party,
the
Buyer shall be entitled to carry out repair or replacement work on
behalf
of the Seller in relation to such defect or alleged defect provided
always
that the cost of such repair or replacement does not exceed £250
(excluding VAT). In calculating the cost of such work parts and stock
will
be charged at cost price and labour shall be charged at the rates
the
Buyer is entitled to charge under the Transitional Services Agreement
for
the relevant work. For the avoidance of doubt the Buyer requires
the
consent of the Seller under clause 15.6 before it initiates a product
recall and cannot use its rights under this clause 15.4 to do so.
|
15.5
|
To
the extent the Buyer carries out work in accordance with clause 15.4,
it
shall be entitled to recover the costs from the Seller by submitting
a
monthly invoice at the end of each month together with papers reasonably
supporting such invoice and a statement of work carried out in the
period
to which the invoice relates.
The Seller shall pay such invoice within 30 days of
receipt.
|
15.6
|
If
following Completion the Buyer receives notice of claims relating
to
defects or alleged defects of the kind referred to in clause 15.3,
it
shall promptly give notice of such claims to the Seller. Save where
the
relevant costs fall within Clause 10,
the Buyer shall not take any preventative action in order to avoid
claims
relating to defects or alleged defects of the kind referred to in
Clause
5.2 or carry out any maintenance and/or repair work and/or replace
any
items in connection with such claims without the prior approval of
the
Seller or CG (such approval not to be unreasonably withheld or
delayed).
|
15.7
|
The
Buyer shall indemnify the Seller and keep it indemnified against
any
increase in its liability arising under claims relating to defects
or
alleged defects of the kind referred to in clause 15.3 where such
increased liability arises as a result of work carried out by the
Buyer
pursuant to this clause 15.
|
15.8
|
Save
to the extent covered by the Licence or the Transitional Services
Agreement, all rents, rates, gas, water, electricity and telephone
charges
and other outgoings relating to or payable in respect of the Business
in
its ordinary and normal course up to and including the Transfer Date
and
all wages, salaries, holiday pay and maternity pay and other outgoings
related to the Employees up to and including the Transfer Date shall
be
borne by the Seller and as from the Transfer Date shall be borne
by the
Buyer and all rents, royalties and other periodical payments receivable
in
respect of the Business up to and including the
|
22
Transfer
Date shall belong to and be payable to the Seller and as from the Transfer
Date
shall belong to and be payable to the Buyer. Such outgoings and payments
receivable shall if necessary be apportioned accordingly, provided that any
such
outgoings or payments receivable which are referable to the extent of the use
of
any property or right shall as far as practicable be apportioned accordingly
to
the extent of such use.
15.9
|
Prepayments
and payments in advance made to the Seller on or before the Transfer
Date
in respect of goods or services to be supplied by the Buyer after
Completion shall be payable by the Seller to the Buyer and prepayments
and
payments in advance made by the Seller in respect of goods ordered
but not
delivered and services contracted for but not rendered to the Seller
in
connection with the Business prior to Completion shall be refundable
by
the Buyer to the Seller. All necessary apportionments shall be made
by the
Seller and the Buyer.
|
15.10
|
The
amount of apportionments specified in clauses 15.8 and 15.9 and the
balancing payment due either to the Seller or the Buyer (as the case
may
be) shall be agreed or determined in accordance with clauses 15.8
and 15.9
and Schedule 12 and such balancing payment shall be specified in
the
Completion Statement. The balancing payment so agreed or determined
shall
be paid by the relevant party to the other within 5 Business Days
of
agreement or determination of the Completion
Statement.
|
15.11
|
To
the extent that Lombard Finance invoice the Buyer in respect of any
of the
Assets the Seller shall either pay such invoice on the Buyer’s behalf or
promptly reimburse the Buyer any amount it pays to settle such
invoice.
|
16
|
Book
Debts
and Creditors
|
16.1
|
The
Seller is entitled, for its own account, to collect the Book Debts.
The
Buyer is under no obligation to collect the Book
Debts.
|
16.2
|
The
Buyer will hold on trust for the Seller any payment which it may
receive
after the Transfer Date in respect of the Book Debts and will account
to
the Seller for the same at the end of the week following Completion
and
thereafter at weekly intervals.
|
16.3
|
Any
sum received by the Buyer in respect of the Business which is not
specifically appropriated by the debtor to a particular transaction
will
be appropriated first to the oldest debt outstanding (whether due
to the
Buyer or a Book Debt).
|
16.4
|
The
Seller will collect the Book Debts in an orderly manner and in a
manner
which is consistent with the way in which the Seller has collected
trade
and other debts in the course of carrying on the Business prior to
the
Transfer Date.
|
16.5
|
After
the Transfer Date the Seller will pay the Creditors in a manner which
is
consistent with the way in which the Seller has paid Creditors in
the
course of carrying on the Business prior to the Transfer
Date.
|
17
|
Obligations
of the Seller and Buyer after Completion
|
17.1
|
For
the 12 months following Completion, the
Seller:
|
17.1.1
|
will
promptly refer to the Buyer all enquiries relating to the Business
and
assign to the Buyer all orders relating to the Business, including
enquiries relating to orders for any stocks, spares, parts, accessories
and other equipment manufactured or sold, or any services provided
in
connection with the Business, which the Seller may receive after
Completion;
|
17.1.2
|
will
retain for the period required by law, the books, accounts, records
and
returns of the Seller relating exclusively to or exclusively in connection
with the Business and will give to the Buyer reasonable access to
such
books, accounts, records and returns as the Buyer may reasonably
require
(including the right to take copies and extracts on reasonable advance
notice) and will keep them in good
order.
|
23
17.2
|
The
Buyer:
|
17.2.1
|
will
promptly refer to the Seller all enquiries relating to the Retained
Business and assign to the Buyer all orders relating to the Retained
Business, including enquiries relating to orders for any stocks,
spares,
parts, accessories and other equipment manufactured or sold, or any
services provided in connection with the Retained Business, which
the
Buyer may receive after Completion;
|
17.2.2
|
will
retain, for the period required by law, the books, accounts, records
and
returns of the Buyer relating exclusively to or exclusively in connection
with the Business and will give to the Seller reasonable access to
such
books, accounts, records and returns (insofar as they relate to the
pre-transfer Business) as the Seller may reasonably require (including
the
right to take copies and extracts on reasonable advance notice) and
will
keep them in good order.
|
17.3
|
The
Seller will ensure that within one month of Completion, McMurdo Pains
Wessex Inc and all other group companies which include the name “McMurdo”
will change their respective corporate names so that no longer include
the
word “McMurdo”.
|
17.4
|
The
Buyer will allow the Seller to use the name and trade xxxx "McMurdo"
alone
or in combination with other words and marks solely for the purposes
of:
|
17.4.1
|
selling
or otherwise supplying any stock of AIS Products manufactured prior
to
Completion and which carry the XxXxxxx xxxx;
and
|
17.4.2
|
collecting
any Book Debts whether relating to the Business or the Retained
Business.
|
18
|
Restrictive
Covenants
|
18.1
|
Subject
always to clause 18.2,
the Seller covenants with the Buyer that it will not and will procure
that
any other member of the Seller’s Group will not either on its or their own
account or through or in conjunction, association or by arrangement
with
or on behalf of any person or persons whether for its own benefit
or that
of others and whether directly or indirectly for the period of three
years
from Completion:
|
18.1.1
|
in
competition with the Business as carried on at Completion supply
products
or provide services to any person, firm or company who or which was
either
at Completion or during the period of 24 months prior to Completion
a
client or customer of the Business where such goods or services are
the
same as or similar to or compete with products sold or services provided
by the Business to that person, firm or company at or during the
period of
24 months prior to Completion;
|
18.1.2
|
in
competition with the Business as carried on at Completion solicit
or
endeavour to solicit the custom of or canvas or approach any person,
firm
or company who or which was either at Completion or during the period
of
24 months prior to Completion had been a client or customer of the
Business, for the supply of products or the provision of services
which
are the same as or similar to or compete with those products sold
or
services provided by the Business to that person, firm or company
at or
during the period of 24 months prior to
Completion;
|
18.1.3
|
other
than by way of general advertisement solicit or entice away or endeavour
to solicit or entice away from the Buyer any officer, manager, or
other
senior employee who was either at Completion or during the period
of 12
months prior to Completion engaged in the Business whether or not
such
person would commit a breach of his contract of employment by reason
of
leaving service;
|
18.1.4
|
carry
on or be engaged, concerned or interested in any business which competes
with the Business as the same was carried on at Completion (other
than as
a holder of securities listed on a recognised investment exchange
or
provided that such holding will not exceed five per cent of the class
of
securities of which the said holding forms part);
or
|
24
18.1.5
|
employ
or conclude any contract for services with any director, senior manager,
or senior employee (being an employee with an annual salary of more
than
£50,000) who worked in the Business at Completion.
|
18.2
|
Nothing
in this Agreement shall prevent Chemring Australia Pty Ltd, ACN 004
669
452 ABN 96 004 669 452 of Xxxxx 0/0000 Xxxxxxx Xxxx, Xxxx Xxxxxxx,
Xxxxxxxx, Xxxxxxxxx 0000 (whose registered office is at 000 Xxxxxxx
Xxxx
Xxxx Xxxxxxxx Xxxxxxxxx 3212) from carrying on its business in
fulfilling:
|
18.2.1
|
its
obligations under its contract dated 12 July 2005 with Kinetic Technology
International Pty Ltd, copy of which is attached to the Disclosure
Letter
at Folder 2b, Section 7 of the Disclosure Letter; or
|
18.2.2
|
any
obligations it may have arising as a result of carrying on its business
prior to the Transfer Date to the extent that they relate either:
(i) to
its liabilities in relation services and/or products supplied or
sold by
it prior to the Transfer Date; or (ii) to the
Products.
|
18.3
|
Each
restriction in clause 18.1
constitutes an entirely independent restriction on the
Seller.
|
18.4
|
If
any restriction in clause 18.1
is
determined to be unenforceable in whole or in part, its unenforceability
will not affect the enforceability of the remaining restrictions
or (in
the case of restrictions enforceable in part) the remainder of that
restriction.
|
19
|
Confidentiality
|
19.1
|
The
Seller undertakes and will procure that any member of the Seller’s Group
will undertake to keep confidential and not at any time to disclose
or
make known to anyone whatsoever or use for their own or any other
person’s
benefit all Business Information.
|
19.2
|
The
obligations imposed by the provisions of clause 19.1
will not apply to the extent that the Business Information in
question:
|
19.2.1
|
is
or comes into the public domain without fault on the part of the
party to
whom the same was disclosed, or to whose attention the same has
come;
|
19.2.2
|
was
already known to the relevant party at the time the same, was disclosed
to
it or came to its attention; or
|
19.2.3
|
has
been lawfully disclosed to the relevant party by a third
party;
|
19.2.4
|
is
required to be disclosed by law; or
|
19.2.5
|
is
required to be disclosed by a contractual obligation existing at
the date
of this Agreement.
|
20
|
Value
Added Tax
|
20.1
|
All
amounts expressed in this Agreement as being payable by the Buyer
are
expressed exclusive of any VAT which may be chargeable and the Buyer
will
pay to the Seller in addition to such amounts an amount equal to
any VAT
(to include any interest and penalties) for which the Seller is liable
to
account to HM Revenue and Customs in respect of any supply made by
it to
the Buyer under or in connection with this
Agreement.
|
20.2
|
The
parties intend that section 49 VATA and paragraph 5 of the Special
Provisions Order will apply to the transfer of the Business and the
Seller
and the Buyer will each use its reasonable endeavours to secure that
pursuant to the provisions referred to above the sale of the Business
is
treated as neither a supply of goods nor a supply of services for
the
purposes of VAT but as the transfer of a business as a going
concern.
|
25
20.3
|
If
HM Revenue and Customs do not agree that the sale of the Business
pursuant
to this Agreement falls within section 49 VATA and paragraph 5 of
the
Special Provisions Order the Seller will issue to the Buyer a valid
VAT
invoice in respect of the sale of the Business. The Buyer will forthwith
on receipt of such invoice pay to the Seller the VAT (to include
any
interest and penalties) charged on the sale of the Business in addition
to
the Price.
|
20.4
|
The
Seller and the Buyer will give to HM Revenue and Customs such notice
of
the sale and purchase of the Assets pursuant to this Agreement as
may be
required by paragraph 11 of Schedule 1 VATA or as may otherwise be
required by law.
|
20.5
|
The
Buyer warrants that it is registered for VAT purposes in the United
Kingdom and that it will use the Assets to be transferred under this
Agreement with the intention of continuing the
Business.
|
20.6
|
The
Seller warrants that it is duly registered for VAT purposes in the
United
Kingdom.
|
20.7
|
The
Seller will as soon as reasonably practicable after the execution
of this
Agreement request a direction from HM Revenue and Customs under section
49(1)(b) VATA that from and after Completion the Seller will retain
and
preserve all records relating to the Business which are required
to be
preserved by paragraph 6 of Schedule 11 VATA. If HM Revenue and Customs
gives such a direction, the Seller undertakes to preserve such records
for
such periods as may be required by law and to allow the Buyer and
its
agents access to, and to take copies of, such records on a reasonable
notice during normal business
hours.
|
21
|
DA
Guarantee
|
21.1
|
In
consideration of the Seller entering into this Agreement DA
unconditionally and irrevocably guarantees to the Seller and its
successors, transferees and
assigns:
|
21.1.1
|
the
due and punctual performance and observance by the Buyer of all the
Buyer’s obligations; and
|
21.1.2
|
the
punctual discharge by the Buyer of all the Buyer’s liabilities to the
Seller;
|
contained
in or arising under this Agreement, the Transitional Services Agreement, the
NAV
7 Licence, the Connectors Novation and the Licence (the
Guaranteed Agreements).
21.2
|
If
the Buyer defaults in the payment when due of any amount payable
to the
Seller under the Guaranteed Agreements DA will immediately on demand
by
the Seller pay to the Seller the amount payable by the Buyer in the
manner
prescribed in the relevant Guaranteed Agreement and as if DA were
the
principal obligor in respect of that
amount.
|
21.3
|
As
an independent and primary obligation and without prejudice to
clauses 21.1
and 21.2
DA
will unconditionally and irrevocably indemnify and keep fully and
effectively indemnified the Seller against all and any losses, costs,
claims, liabilities, damages, demands and expenses suffered or incurred
by
the Seller arising from the failure of the Buyer to comply with any
of its
obligations or discharge any of its obligations under the Guaranteed
Agreements.
|
21.4
|
The
guarantee and indemnity contained in this clause 21
(DA
Guarantee Obligations):
|
21.4.1
|
is
a continuing guarantee and indemnity and will continue in full force
and
effect until all liabilities or purported liabilities of the Buyer
arising
under, and all monies owing or payable or purported to be owing or
payable
by the Buyer under the Guaranteed Agreements have been paid, discharged
or
satisfied in full and notwithstanding any insolvency of the Buyer
or any
change in name or status of the Buyer;
and
|
21.4.2
|
is
in addition to and is not in any way prejudiced by any other security
now
or subsequently held by the Seller.
|
26
21.5
|
The
DA Guarantee Obligations will not be discharged, diminished or in
any way
adversely affected as a result of any of the
following:
|
21.5.1
|
any
time, consent or waiver given to, or composition made with, the Buyer
or
any other person;
|
21.5.2
|
any
amendment to, or replacement of, any Guaranteed Agreement (however
fundamental) or any other agreement or security entered into by the
Buyer;
|
21.5.3
|
the
taking, variation, compromise, exchange, renewal, release or refusal
or
neglect to take, perfect or enforce any rights or remedies against
or
security over the assets of the Buyer or any other person or any
non-observance of any formality or other requirement under any Guaranteed
Agreement or any failure to realise the full value of any
security;
|
21.5.4
|
the
release of the Buyer, any other guarantor or other person under the
terms
of any composition or arrangement, including any corporate or individual
voluntary arrangement;
|
21.5.5
|
any
incapacity, lack of power, authority or legal personality of or
dissolution or change in the members or status of the Buyer or any
other
person;
|
21.5.6
|
any
unenforceability, illegality or invalidity of any obligation of any
person
under any Guaranteed Agreement or any other document or
security;
|
21.5.7
|
any
insolvency or similar proceedings;
and
|
21.5.8
|
any
other act, omission, circumstance, matter or thing which, but for
this
clause 21.5,
might operate to release, reduce or otherwise exonerate DA but which
would
not have discharged a person primarily liable in respect
thereof.
|
21.6
|
DA
may not determine its liabilities under the guarantees and indemnities
given in this clause 21.
|
21.7
|
The
Seller will not be obliged to enforce any other rights, security
or claims
it may have against the Buyer or any other person before claiming
under
the guarantees and indemnities given by this clause 21.
|
21.8
|
Until
all amounts which may be or become payable by the Buyer under or
in
connection with the Guaranteed Agreements have been irrevocably paid
in
full DA agrees that it will not exercise any rights which it may
have:
|
21.8.1
|
to
be subrogated to or otherwise to share in any security or monies
held,
received or receivable by the Seller or, to claim any right of
contribution in relation to any payment made by DA under this
Agreement;
|
21.8.2
|
to
enforce any of its right of subrogation, indemnity, or to make any
application for quia timet relief against or in respect of the Buyer
or
DA;
|
21.8.3
|
following
a claim made on DA under the DA Guarantee Obligations, to demand
or accept
repayment of any monies due from the Buyer or to claim any set off
or
counter claim against the Buyer; or
|
21.8.4
|
to
claim or prove in any liquidation or other insolvency proceeding
of or
affecting the Buyer or any co-surety in competition with the
Seller.
|
21.9
|
Following
the making of a demand on DA under the DA Guarantee Obligations,
DA will
(at its own cost) promptly take such steps or action as are referred
to in
clause 21.8
above as the Seller may from time to time
stipulate.
|
21.10
|
All
amounts payable in respect of the DA Guarantee Obligations will be
paid by
DA without set off, deduction or counterclaim of any kind being
made.
|
27
22
|
CG
Guarantee
|
22.1
|
In
consideration of the Buyer entering into this Agreement CG unconditionally
and irrevocably guarantees to the Buyer and its successors, transferees
and assigns:
|
22.1.1
|
the
due and punctual performance and observance by the Seller of all
the
Seller’s obligations; and
|
22.1.2
|
the
punctual discharge by the Seller of all the Seller’s liabilities to the
Buyer;
|
contained
in or arising under the Guaranteed Agreements.
22.2
|
If
the Seller defaults in the payment when due of any amount payable
to the
Buyer under the Guaranteed Agreements CG will immediately on demand
by the
Buyer pay to the Buyer the amount payable by the Seller in the manner
prescribed in the relevant Guaranteed Agreement and as if CG were
the
principal obligor in respect of that
amount.
|
22.3
|
As
an independent and primary obligation and without prejudice to clauses
22.1 and 22.2 CG will unconditionally and irrevocably indemnify and
keep
fully and effectively indemnified the Buyer against all and any losses,
costs, claims, liabilities, damages, demands and expenses suffered
or
incurred by the Buyer arising from the failure of the Seller to comply
with any of its obligations or discharge any of its obligations under
the
Guaranteed Agreements.
|
22.4
|
The
guarantee and indemnity contained in this clause 22 (CG
Guarantee Obligations):
|
22.4.1
|
is
a continuing guarantee and indemnity and will continue in full force
and
effect until all liabilities or purported liabilities of the Seller
arising under, and all monies owing or payable or purported to be
owing or
payable by the Seller under the Guaranteed Agreements have been paid,
discharged or satisfied in full and notwithstanding any insolvency
of the
Seller or any change in name or status of the Seller;
and
|
22.4.2
|
is
in addition to and is not in any way prejudiced by any other security
now
or subsequently held by the Buyer.
|
22.5
|
The
CG Guarantee Obligations will not be discharged, diminished or in
any way
adversely affected as a result of any of the
following:
|
22.5.1
|
any
time, consent or waiver given to, or composition made with, the Seller
or
any other person;
|
22.5.2
|
any
amendment to, or replacement of, any Guaranteed Agreement (however
fundamental) or any other agreement or security entered into by the
Seller;
|
22.5.3
|
the
taking, variation, compromise, exchange, renewal, release or refusal
or
neglect to take, perfect or enforce any rights or remedies against
or
security over the assets of the Seller or any other person or any
non-observance of any formality or other requirement under any Guaranteed
Agreement or any failure to realise the full value of any
security;
|
22.5.4
|
the
release of the Seller, any other guarantor or other person under
the terms
of any composition or arrangement, including any corporate or individual
voluntary arrangement;
|
22.5.5
|
any
incapacity, lack of power, authority or legal personality of or
dissolution or change in the members or status of the Seller or any
other
person;
|
22.5.6
|
any
unenforceability, illegality or invalidity of any obligation of any
person
under any Guaranteed Agreement or any other document or
security;
|
22.5.7
|
any
insolvency or similar proceedings;
and
|
28
22.5.8
|
any
other act, omission, circumstance, matter or thing which, but for
this
clause 22.5 might operate to release, reduce or otherwise exonerate
CG but which would not have discharged a person primarily liable
in
respect thereof.
|
22.6
|
CG
may not determine its liabilities under the guarantees and indemnities
given in this clause 22.
|
22.7
|
The
Buyer will not be obliged to enforce any other rights, security or
claims
it may have against the Seller or any other person before claiming
under
the guarantees and indemnities given by this
clause 22.
|
22.8
|
Until
all amounts which may be or become payable by the Seller under or
in
connection with the Guaranteed Agreements have been irrevocably paid
in
full CG agrees that it will not exercise any rights which it may
have:
|
22.8.1
|
to
be subrogated to or otherwise to share in any security or monies
held,
received or receivable by the Buyer or, to claim any right of contribution
in relation to any payment made by CG under this
Agreement;
|
22.8.2
|
to
enforce any of its right of subrogation, indemnity, or to make any
application for quia timet relief against or in respect of the Seller
or
CG;
|
22.8.3
|
following
a claim made on CG under the CG Guarantee Obligations, to demand
or accept
repayment of any monies due from the Seller or to claim any set off
or
counter claim against the Seller;
or
|
22.8.4
|
to
claim or prove in any liquidation or other insolvency proceeding
of or
affecting the Seller or any co-surety in competition with the
Buyer.
|
22.9
|
Following
the making of a demand on CG under the CG Guarantee Obligations,
CG will
(at its own cost) promptly take such steps or action as are referred
to in
clause 22.8 above as the Buyer may from time to time
stipulate.
|
22.10
|
All
amounts payable in respect of the CG Guarantee Obligations will be
paid by
CG without set off, deduction or counterclaim of any kind being
made.
|
23
|
Announcements
and publicity
|
23.1
|
No
announcement or circular or other publicity in connection with the
subject
matter of this Agreement (other than as permitted by this Agreement)
will
be made by or on behalf of the Seller and the Buyer without the approval
of the other as to its content, form and manner of publication (such
approval not to be unreasonably withheld or delayed) save that any
announcement, circular or other publicity required to be made or
issued by
any of the parties pursuant to any legal or regulatory authority
may be
made or issued without such
approval.
|
24
|
Notices
|
24.1
|
Any
notice or other communication required to be given under this Agreement
must be in writing signed by (or by some person duly authorised by)
the
person giving it and may be served by delivering it personally or
sending
it by pre-paid recorded delivery or registered post to the then registered
office address of the relevant party (or as otherwise notified by
that
party in accordance with this clause 24).
Any notice so served will be deemed to have been
received:
|
24.1.1
|
if
delivered personally, at the time of delivery;
or
|
24.1.2
|
in
the case of a notice sent by pre-paid recorded delivery or registered
post, at the time of delivery.
|
24.2
|
In
proving service:
|
29
24.2.1
|
by
delivery by hand it will be necessary only to produce receipt for
the
communication signed by or on behalf of the addressee;
and
|
24.2.2
|
by
post it will be necessary only to prove that the communication was
contained in an envelope which was duly addressed and posted in accordance
with this clause 24.
|
24.3
|
For
the avoidance of doubt, any notice or communication given under this
Agreement will not be validly served if sent by
email.
|
25
|
Successors,
assigns and third parties
|
25.1
|
This
Agreement will be binding upon and enure for the benefit of each
party’s
successors. No party to this Agreement can assign or establish a
trust of
the benefit to this Agreement save that (i) provided that the Seller’s
liability under this Agreement (including the Warranties) shall not
be
increased as a result of such assignment, the Buyer may freely assign
the
benefit of this Agreement (including the Warranties) to another company
in
the Buyer’s Group provided that if any such assignee shall leave the
Buyer’s Group, prior to leaving it shall re-assign to the Buyer any rights
assigned under this clause and (ii) the Seller may assign or novate
its
rights and obligations under this Agreement to another company in
the
Seller’s Group and in the case of such novation if the Seller so requires
the Buyer and DA will enter into a novation agreement in the form
of the
Novation Agreement or in such other from as may be agreed between
the
Parties.
|
25.2
|
The
Parties agree that (save where may be expressly stated otherwise
in this
Agreement) for the purposes of the Contracts (Rights of Third Parties)
Xxx
0000 they do not intend any person other than a party to this Agreement
to
be able to enforce any term of this
Agreement.
|
26
|
Variation
|
26.1
|
No
variation of this Agreement will be valid unless made in writing
and
signed by or on behalf of each of the
parties.
|
27
|
Waiver
|
27.1
|
Any
waiver of any provision of this Agreement must be in writing and
signed by
or on behalf of each of the parties. No failure or delay by any party
in
exercising any right, power or privilege under this Agreement will
operate
as a waiver thereof nor will any single or partial exercise thereof
preclude any other or further exercise thereof or the exercise of
any
other right, power or privilege.
|
27.2
|
Any
waiver by any party of a breach of any provision of this Agreement
will
not be a waiver of any subsequent breach of the same or any other
provision.
|
27.3
|
All
the Parties' respective rights and remedies under this Agreement
or by law
are cumulative so a reference to or the exercise of one remedy does
not
affect any of the others and any failure to exercise or delay in
exercising any rights or remedies, will not operate as a waiver or
prevent
any further exercise of them.
|
28
|
Costs
|
28.1
|
The
Parties will pay their own costs and expenses in relation to the
negotiation, preparation, execution and implementation of this
Agreement.
|
29
|
Severance
|
29.1
|
If
any provision of this Agreement will be found by any court or
administrative body of competent jurisdiction to be invalid or
unenforceable such invalidity or unenforceability will not affect
the
other provisions of this Agreement which will remain in full force
and
effect.
|
30
30
|
Further
assurance
|
30.1
|
The
Seller will (at the Seller's expense) do, execute and perform and
will
procure to be done, executed and performed all such further acts,
deeds,
documents and things as the Buyer may reasonably require from time
to time
in order to carry out, evidence and confirm its rights and the intended
purpose of this Agreement in order to vest the Assets in the Buyer
on the
terms of this Agreement and otherwise to give to the Buyer the full
benefit of this Agreement.
|
30.2
|
The
Buyer will do, execute and perform and will procure to be done, executed
and performed all such further acts, deeds, documents and things
as the
Seller may reasonably require from time to time in order to carry
out,
evidence and confirm the Seller’s rights and the intended purpose of this
Agreement and to give to the Seller the full benefit of this
Agreement.
|
31
|
Entire
Agreement
|
31.1
|
This
Agreement, the Disclosure Letter, the documents in the agreed form
and all
agreements entered, or to be entered into, pursuant to the terms
of this
Agreement or entered into between the Seller and the Buyer in writing
and
expressly referring to this Agreement:
|
31.1.1
|
together
constitute the entire agreement and understanding between the parties
with
respect to the subject matter of this Agreement;
and
|
31.1.2
|
(in
relation to such subject matter) supersede all prior discussions,
understandings and agreements between the parties and their agents
(or any
of them) and all prior representations and expressions of opinion
by any
party (or its agent) to any other party (or its
agent).
|
31.2
|
Each
of the Parties acknowledges that it is not relying on any statements,
warranties or representations given or made by any of them in relation
to
the subject matter hereof, save those expressly set out in this Agreement,
and other documents referred to in clause 31.1,
and that it will have no rights or remedies with respect to such
subject
matter otherwise than under this Agreement (and the documents executed
at
the same time as it or on Completion or referred to in it) save to
the
extent that they arise out of the fraud, fraudulent misrepresentation
or
fraudulent concealment of any party.
|
32
|
Counterparts
|
32.1
|
This
Agreement may be entered into in any number of counterparts, each
of which
when executed and delivered will be an original, but all the counterparts
will together constitute one and the same agreement.
|
33
|
Miscellaneous
|
33.1
|
The
Buyer and DA jointly and severally confirm to the Seller that no
member of
the Buyer’s Group (including the Buyer and DA) or any of their respective
advisers on behalf of any of them is at the date of this Agreement
in
discussions or negotiations with any third party with a view to acquiring
any business which is similar to or is in competition with the
Business.
|
33.2
|
The
Buyer acknowledges that after today’s date the Seller will be discussing
the RNLI Contract with RNLI and telling it that the Buyer is keen
to
become the supplier of choice in relation to the MOB Guardian product.
The
Buyer confirms to the Seller that following Completion it will act
reasonably in negotiating with RNLI with a view to agreeing a formal
contract for the Buyer to supply the MOB Guardian
product.
|
34
|
Applicable
law and jurisdiction
and remedy
|
34.1
|
English
law governs this Agreement. Each party irrevocably agrees to submit
to the
exclusive jurisdiction of the courts of England over any claim or
matter
arising out of or in connection with this
Agreement.
|
31
34.2
|
The
only remedy available to a party for breach of any of the provisions
of
this Agreement is for breach of contract under the terms of this
Agreement.
|
34.3
|
Nothing
in clauses 31,
34.2 or
Schedule 3
will operate to limit or exclude any liability for
fraud.
|
35
|
Post-completion
effect
|
35.1
|
This
Agreement will remain in full force and effect after and notwithstanding
Completion in respect of all obligations, agreements, covenants,
undertakings or conditions contained in or implied by this Agreement
which
have not been done, observed or performed at or prior to Completion
and
all warranties and indemnities contained in or implied by this Agreement
(including the Warranties) will continue in full force and effect
after
and notwithstanding Completion and the parties may take action for
any
breach of non-fulfilment of any of them after
Completion.
|
In
witness wherof this
Agreement has been entered into as a Deed on the date stated at the beginning
of
this Agreement.
32
Executed
by
as a Deed by
|
/s/ Xxxx Xxxxxx | |
Director
|
||
McMurdo
Limited
acting by
|
/s/ Xxxxx Xxxxxx | |
Director/Secretary
|
Executed
by
as a Deed by
|
/s/ Xxxxx Xxxxxxx | |
Director
|
||
Signature
Industries Limited acting
by
|
/s/ Xxxxx Xxxxxxx | |
Director/Secretary
|
Executed
by
as a Deed by
|
/s/ Xxxxx XxXxxxx | |
Authorised
Signatory
|
||
Digital
Angel Corporation
acting by
|
/s/ Xxx Xxxxxxxx | |
Authorised
Signatory
|
Executed
by
as a Deed by
|
/s/ Xxxx Xxxxxx | |
Director
|
||
Chemring
Group Plc
acting by
|
/s/ Xxxxx Xxxxxx | |
Director/Secretary
|
33