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PREMIER FARNELL PLC
and
ARROW ELECTRONICS, INC.
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MASTER AGREEMENT
relating to the sale and purchase of
the Farnell Volume Business
(as amended and restated)
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TABLE OF CONTENTS
CLAUSE TITLE PAGE
1. INTERPRETATION...................................... 1
2. CONDITIONS.......................................... 14
3. SALE AND PURCHASE OF FARNELL VOLUME BUSINESS........ 17
4. SALE AND PURCHASE OF UK SHARES...................... 18
5. CALCULATION OF THE PURCHASE PRICE................... 19
6. TRANSFER ACCOUNTS AND DECEMBER STATEMENTS........... 19
7. PAYMENT OF THE PURCHASE PRICE....................... 22
8. ALLOCATION OF THE PURCHASE PRICE.................... 23
9. UNDERTAKINGS........................................ 25
10. COMPLETION UNDERTAKINGS REGARDING CASH GENERATED
IN BUSINESS......................................... 26
11. PERIOD BETWEEN EXCHANGE AND COMPLETION.............. 26
12. COMPLETION.......................................... 29
13. DEFAULT AT COMPLETION............................... 32
14. WARRANTIES.......................................... 32
15. LIMITATION ON LIABILITY............................. 33
16. INDEMNITIES......................................... 36
17. PROTECTION OF FARNELL VOLUME BUSINESS AND
USE OF NAME......................................... 40
18. PROTECTION OF THE RETAINED PREMIER FARNELL GROUP.... 46
19. THIRD PARTY CONSENTS AND THE CONTRACTS.............. 48
20. ASSIGNMENT/UNDERLETTING OF FOREIGN
LEASEHOLD PROPERTIES................................ 51
21. ACCESS.............................................. 56
22. EMPLOYEES........................................... 57
23. PENSION ARRANGEMENTS................................ 59
24. ANNOUNCEMENTS....................................... 60
25. MISCELLANEOUS....................................... 60
26. VALUE ADDED TAX................................................. 63
27. COSTS........................................................... 64
28. GUARANTEE BY PREMIER FARNELL.................................... 64
29. GUARANTEE BY ARROW.............................................. 65
30. NOTICES......................................................... 66
31. GOVERNING LAW AND JURISDICTION.................................. 67
SCHEDULE 1 Particulars of the Companies................................. 70
SCHEDULE 2 The Companies, Company Vendors and Company Purchasers....... 78
SCHEDULE 3 The Businesses, Business Vendors and Business Purchasers.... 79
SCHEDULE 4 Warranties.................................................. 81
SCHEDULE 5 Intellectual Property....................................... 116
SCHEDULE 6 Properties.................................................. 118
SCHEDULE 7 Pensions.................................................... 141
SCHEDULE 8 Country Managers............................................ 154
SCHEDULE 9 Warranties not repeated at Completion....................... 155
SCHEDULE 10 Part I: Excluded Intellectual Property Rights............... 157
Part II: The Registered Trade Marks......................... 158
Part III: Retained Registered Trade Marks................... 160
DOCUMENTS IN THE AGREED TERMS
Business Accounts
Company Accounts
Disclosure Letter
Farnell Volume Business Accounts
Farnell Volume Business Interim Accounts
Management Accounts
Multicomp/Multicomponent Agreement
Previous Accounts (Farnell Volume Business and each Business)
Regulatory Consents
Swedish Agreement
Tax Deed
Trade Xxxx Assignment
Transfer Agreements
Directors' resignations
Power of Attorney (Exercise of rights pending registration)
Deeds of Assignment of Slough Properties
Notices to Employees
DOCUMENTS IN THE AGREED FORM
Deeds of Assignment/Novations of Loans
THIS AMENDED AND RESTATED AGREEMENT is dated as of 20th December 1996
AND MADE BETWEEN:
(1) PREMIER FARNELL PLC, a company incorporated in England and Wales
(registered no. 876412) whose registered office is at Xxxxxxx Xxxxx,
Xxxxx Xxxx, Xxxxx XX00 0XX ("PREMIER FARNELL"); and
(2) ARROW ELECTRONICS, INC., a corporation incorporated in the State of New
York, USA having its principal office at 00 Xxx Xxxxx, Xxxxxxxx, Xxx
Xxxx 00000, XXX ("ARROW").
RECITAL:
Premier Farnell has agreed to sell or procure the sale of, and Arrow has agreed
to purchase or procure the purchase of, the Farnell Volume Business under or
otherwise in accordance with the terms of this Agreement.
IT IS AGREED as follows:
1. INTERPRETATION
1.1 In this Agreement, including its Schedules, the following
definitions are used:
"A LIST PROPERTIES" means the UK A List Property and the Foreign A List
Properties;
"ACCOUNTS DATE" means 28 January 1996;
"ARROW GROUP" means Arrow, its subsidiaries or subsidiary undertakings
from time to time and references to a "MEMBER OF THE ARROW GROUP" shall
mean whichever of Arrow or its subsidiaries or subsidiary undertakings
may be relevant in the particular context;
"ARROW'S SOLICITORS" means Xxxxxxx Xxxxx of Xxxxxxxx Xxxxx, Xxxxxxxx
Xxxxxx, Xxxxxx, XX0X 0XX;
"ASSUMED LIABILITIES" means all liabilities, debts and obligations of
each of the Business Vendors at Completion (whether actual or
contingent) arising primarily from the Business carried on by the
relevant Business Vendor arising in the ordinary course of carrying on
that Business but excluding the Excluded Liabilities;
"AUSTRIAN COMPANY" means Farnell Electronic Services GmbH, a company
incorporated under the laws of Austria;
"B LIST PROPERTIES" means the UK B List Properties and the Foreign B
List Properties;
"BUSINESS" means in relation to each Business Vendor, the business
carried on by it under the trading names set out against that Business
Vendor in column (1) of Schedule 3 and "Businesses" means all of those
businesses;
"BUSINESS ACCOUNTS" means in relation to each Business specified in
Schedule 3 the standard accounting forms relating to that Business
including a balance sheet of that
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Business as at the Accounts Date and a profit and loss account of that Business
in respect of the accounting reference period ended on the Accounts Date, in
each case in the agreed terms;
"BUSINESS ASSETS" means:
(a) the benefit of the Contracts;
(b) the Goodwill;
(c) the Business Intellectual Property Rights;
(d) the Moveable Assets;
(e) the Stock;
(f) the Receivables;
(g) the benefit (so far as the same can lawfully be assigned) of the
Claims; and
(h) such other rights and assets (other than the Properties) owned by the
relevant Business Vendor and used primarily in the relevant Business,
other than the Retained Assets and including, without limiting the generality of
the foregoing all of the assets of the Business that were included in the
Consolidated Net Operating Asset Statement except to the extent such assets have
been disposed of after the Transfer Date in the ordinary course of business or
otherwise ceased to exist as a result of the operation of the Farnell Volume
Business in the ordinary course after the Transfer Date and, for the avoidance
of doubt, any proceeds of such assets are reflected in the payment to be made in
accordance with clauses 10.1 and 10.4;
"BUSINESS DAY" means a day (not being a Saturday) on which banks are open for
general banking business in the City of London;
"BUSINESS INTELLECTUAL PROPERTY RIGHTS" means the Intellectual Property Rights
owned by each of the Business Vendors at Completion which relate primarily to
the Business carried on by the relevant Business Vendor including, without
limitation, those listed in Schedule 5;
"BUSINESS PURCHASER" means, in relation to any Business, the member of the Arrow
Group set out in column (4) of Schedule 3 which is to purchase that Business;
"BUSINESS RECORDS" means all the information and records of the Premier Farnell
Group in relation to the Farnell Volume Business, including:
(a) all Farnell Volume Business Confidential information;
(b) all other accounting, financial, marketing, sales, supply, personnel,
management and technical information, correspondence and literature;
(c) all correspondence relating to debtors and/or creditors of each
Company; and
(d) all drawings, software, disks and other material embodying or
incorporating or constituting any of the Intellectual Property Rights
referred to in Schedule 5;
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in each case, in whatever form or medium it is held or recorded which are in the
possession or under the control of the Premier Farnell Group and which relate
mainly to the Farnell Volume Business (which, for the avoidance of doubt, shall
include all statutory books and records required to be maintained by each
Company);
"BUSINESS VENDORS" means the members of the Premier Farnell Group specified in
column (3) in Schedule 3 and Business Vendor means the relevant member;
"CANADIAN COMPANY" means Farnell (Canada) Limited;
"CLAIMS" means all rights and claims of each of the Business Vendors arising out
of the Business carried on by the relevant Business Vendor insofar as they
relate to the Business Assets to be sold by a Business Vendor under the relevant
Transfer Agreement or to an Assumed Liability;
"COMMERCIAL WARRANTIES" means the warranties set out in Parts I to IV of
Schedule 4 other than the Tax Warranties;
"COMPANIES ACT" means the Companies Xxx 0000;
"COMPANY" and in the plural "COMPANIES" a company which forms part of the
Farnell Volume Business prior to Completion and Farnell Holding Inc. brief
particulars of which are set out in Schedule 1;
"COMPANY ACCOUNTS" means (a) in relation to each Company other than the US
Companies and the Canadian Company, its audited balance sheet as at the Accounts
Date and its audited profit and loss account in respect of the accounting
reference period ended on the Accounts Date; and (b) in relation to each of the
US Companies and the Canadian Company its balance sheet as at the Accounts Date
and its profit and loss account in respect of the accounting reference period
ended on the Accounts Date as adopted and used for the purposes of consolidation
into the statutory accounts of the Premier Farnell Group in agreed terms;
"COMPANY PURCHASER" means, in relation to any Company, the member of the Arrow
Group set out in column (3) of Schedule 2 which is to purchase the Shares of
that Company;
"COMPANY VENDOR" means, in relation to any Company, the member of the Premier
Farnell Group specified in column (2) in Schedule 2 which is to sell the Shares
of that Company;
"COMPETENT AUTHORITY" means any local or national agency, authority, court,
department, Inspectorate, minister, ministry, official or public or statutory
person (whether autonomous or not) of any government of any country (or any
supra-national authority, agency or court) having jurisdiction over this
Agreement or the parties;
"COMPLETION" means completion of this Agreement in accordance with clause 12;
"COMPLETION DATE" means the date on which Completion takes place;
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"CONSOLIDATION ADJUSTMENT" means the difference between the consolidated figure
in the Consolidated Net Operating Asset Statement and the sterling equivalent at
the rate on the Transfer Date of the aggregate Local GAAP Net Operating Asset
Values;
"CONSOLIDATED NET OPERATING ASSET STATEMENT" being a statement of the aggregate
of all the Local Net Operating Asset Values shown in the Local Net Operating
Asset Statements as consolidated and expressed in sterling in accordance with
clause 6.1;
"CONTINENTAL EUROPE" means Austria Belgium, Denmark, Finland, France, Germany,
Italy, the Netherlands, Norway, Sweden and Switzerland;
"CONTRACTS" means all contracts and engagements to which any of the Business
Vendors is a party which relate to the Business carried on by the relevant
Business Vendor prior to Completion which at Completion remain uncompleted or
unperformed (in whole or in part) but excluding:
(a) any leases or licence agreements for any of the Properties; and
(b) employment agreements with Employees;
"DANISH COMPANY" means Farnell Danmark AS;
"DECEMBER STATEMENTS" means the Local Net Operating Asset Statements, the
Consolidated Net Operating Asset Statement and the Local Retained Assets
Statements;
"DISCLOSURE LETTER" means the letter in the agreed terms from Premier Farnell to
Arrow delivered immediately prior to the execution of this Agreement;
"DOLLARS" or "$" means US dollars;
"EMPLOYEES" means all the employees of each Company and all employees
exclusively or mainly engaged in each Business;
"ENVIRONMENT" means the natural environment including but not limited to all or
any of the following media, namely air, water and land, including air within
buildings and air within other natural or man-made structures above or below
ground and subsurface soil and water;
"ENVIRONMENTAL LAW" means all laws, regulations, directives, statutes,
subordinate legislation, common law, ordinances and other national and local
laws, all judgments, orders, instructions or awards of any court or competent
authority and all codes of practice and guidance notes which relate to the
Environment;
"EXCLUDED INTELLECTUAL PROPERTY RIGHTS" means those Intellectual Property Rights
set out in Part I of Schedule 10;
"EXCLUDED LIABILITIES" means:
(a) external loans from third parties;
(b) any sums due to a Taxation authority;
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(c) any other sums due to any member of the Retained Premier Farnell Group
other than those which arose in the ordinary course of trade;
(d) any liability or obligations against which Premier Farnell is to
indemnify Arrow pursuant to clause 16; and
(e) any liability arising out of the dispute in Denmark with DME as more
fully set forth in the Disclosure Letter,
"FARNELL VOLUME BUSINESS" means the volume electronic component distribution
business carried on by the Companies and each of the Business Vendors (insofar
as the business of that Business Vendor is carried on under one of the trading
names (as appropriate) set out in column (1) of Schedule 3;
"FARNELL VOLUME BUSINESS ACCOUNTS" means the pro forma consolidated balance
sheet of the Farnell Volume Business as at the Accounts Date and the pro forma
consolidated profit and loss account of the Farnell Volume Business in respect
of the accounting reference period ended on the Accounts Date, in each case in
the agreed terms;
"FARNELL VOLUME BUSINESS CONFIDENTIAL INFORMATION" means all confidential
information and trade secrets relating mainly to the Farnell Volume Business (or
any part of it) or of any person having dealings with the Farnell Volume
Business or any part of it, including:
(a) its business methods, corporate plans, management systems and new
business opportunities or development projects, current trading
performance and future business strategy;
(b) all financial, marketing and technical information, ideas, concepts,
technology, processes and knowledge; and
(c) all lists or details of customers, suppliers, prices, discounts,
margins, information relating to research and development;
and any information derived from any of them and subsisting at Completion but
excluding any such information which is in the public domain other than by
reason of any breach of any confidentiality undertaking in relation to the
Farnell Volume Business or any part of it by any party bound thereby or of any
obligations under this Agreement;
"FARNELL VOLUME BUSINESS INTERIM ACCOUNTS" means the pro forma consolidated
balance sheet of the Farnell Volume Business as at the Interim Accounts Date and
the pro forma consolidated profit and loss account of the Farnell Volume
Business in respect of the period from the Accounts Date to the Interim Accounts
Date, in each case in the agreed terms;
"FOREIGN A LIST PROPERTIES" means the properties, brief particulars of which are
set out in Part III of Schedule 6
"FOREIGN B LIST PROPERTIES" means the properties brief particulars of which are
set out in Part IV of Schedule 6;
5
"FRENCH BUSINESS" means that part of the Farnell Volume Business carried on by
the French Business Vendor;
"FRENCH BUSINESS PURCHASER" means Arrow Electronique S.A.;
"FRENCH BUSINESS VENDOR" means Farnell (France) S.A.R.L.;
"GERMAN COMPANY" means Farnell Electronic Services GmbH, a company incorporated
under the laws of Germany;
"GOODWILL" means the goodwill of any of the Business Vendors at Completion
relating primarily to the Business carried on by it with the exclusive right
insofar as any Business Vendor can grant it for the relevant Business Purchaser
to represent itself as carrying on the relevant Business in succession to the
Business Vendor from Completion;
"INDEMNITIES" means the indemnities contained in clause 16 of this Agreement;
"INTELLECTUAL PROPERTY RIGHTS" means all inventions, patents, registered
designs, design rights and copyrights, know-how and trademarks (whether
registered or not) and the goodwill therein and applications for any of the same
and all rights of a similar nature throughout the world, including, without
limitation, those referred to in Schedule 5;
"INTERIM ACCOUNTS DATE" means 28 July 1996;
"IRISH SCHEME" means The Farnell (Republic of Ireland) Staff Benefits Plan
established by a deed dated 22 December 1992;
"ITALIAN COMPANY" means Farnell SpA;
"KEY WAREHOUSE" means any one of the A List Properties (other than the property
in Finland);
"LOAN(S)" means the balances (other than trading balances) together with
interest due to or from Companies to or from members of the Premier Farnell
Group but excluding balances between Companies;
"LOCAL COMPLETION STATEMENTS" means in relation to each Company, a statement
setting out in the local currency as at the Completion Date the following:
- the amount of any net movement in the amount of any Loan to or from
that Company for the period 28 December 1996 to the Completion Date
(inclusive) in the ordinary course of business of the Company;
- the amount of any net movement in any Cash for the period 28 December
1996 to the Completion Date (inclusive) outside the ordinary course of
business of the Company net of tax on such outside the ordinary course
activities;
- in the case of each of the Canadian Company, the Italian Company and
the UK Company, an amount of interest (calculated at a rate of seven
per cent per annum) on the amounts due to Premier Farnell from the
Canadian Company,
6
the Italian Company and the UK Company in each case for the period 28
December 1996 to the Completion Date (inclusive);
- the aggregate of the above ("THE LOCAL COMPLETION VALUE")
For the purposes of this definition any movement in the amounts referred to
above shall be regarded as within the ordinary course of business if it results
from a transaction involving any of the categories of assets or liabilities set
out in the Local Net Operating Asset Statements;
"LOCAL GAAP NET OPERATING ASSET STATEMENT" means in relation to each Company and
Business, the Local Net Operating Asset Statement adjusted for any differences
in order to comply with the generally accepted accounting practices in the place
of incorporation of the Company or Business Vendor instead of those in the UK
and which would have led to an aggregate difference of (pound sterling) 912,000
between the consolidated figure in the Consolidated Net Operating Asset
Statement and the aggregate of the Local GAAP Net Operating Asset Value as at 28
January 1996;
"LOCAL GAAP NET OPERATING ASSET VALUE" has the same meaning as Local Net
Operating Asset Value save that the calculation shall be made by reference to
the Local GAAP Net Operating Asset Statement rather than the Local Net Operating
Asset Statement;
"LOCAL NET OPERATING ASSET STATEMENTS" means in relation to each Company and
Business, a statement derived from the Transfer Accounts setting out in the
relevant local currency as at the Transfer Date the following:
- Tangible fixed assets
- Inventory
- Trade debtors (including inter-company trade balances)
- Other debtors and prepayments
- Trade creditors (including inter-company trade balances)
- Other taxes
- Other creditors and accruals
- Corporate taxes
- Provisions
- External Italian debt in respect of trade receivables
- loans between the Companies other than trade debtors and creditors
between those Companies
- The net aggregate of the above ("THE LOCAL NET OPERATING ASSET VALUE")
For the avoidance of doubt none of the assets and their associated liabilities
relating to the business to be transferred pursuant to the Swedish Agreement or
relating to Farnell
7
Components Inc. to be transferred to a member of the Retained Premier Farnell
Group prior to Completion shall be included in this statement;
"LOCAL RETAINED ASSET STATEMENTS" being in relation to each Company and
Business, a statement derived from the Transfer Accounts setting out, in the
relevant local currency as at 27 December 1996, the Local Retained Asset Values;
"LOCAL RETAINED ASSET VALUE" means:
in relation to each Company:
- the net balance of the following categories of assets and liabilities:
bank overdraft and other external borrowings other than trade debts
and the debts incurred by the Italian Company in the ordinary course
in respect of the financing of its trade receivables; cash at bank
and on hand and short term deposits ("CASH") and, for the avoidance
of doubt, excluding any amount included in the Local Net Operating
Asset Statement for such Company;
in relation to each Business, the net aggregate of:
- any liabilities relating to the Business which are not acquired or
assumed by the relevant Business Purchaser but which are included in
the Local Net Operating Asset Statement; and
- any assets relating to the Business which are not acquired or assumed
by the relevant Business Purchaser but which are included in the
Local Net Operating Asset Statement;
and for the avoidance of doubt, for the purposes of clause 5.4, the net
aggregate referred to above shall be deemed positive to the extent that
liabilities referred to in this definition (in respect of a Business) exceed
assets in this definition.
"LOSSES" means all losses, damages, compensation, liabilities, costs (including,
without limitation, reasonable legal costs), charges and expenses, actions,
suits, proceedings, claims, demands, judgments, assessments and awards;
"MANAGEMENT ACCOUNTS" means the cumulative management accounts for the ten month
period from the Accounts Date to the end of November 1996 in the agreed terms;
"MOVEABLE ASSETS" means the loose or severable plant and equipment, motor
vehicles, office equipment and other tangible assets (but excluding the
Properties and any fixtures forming part of any of the Properties) owned by the
Business Vendor at Completion and used primarily in the Business carried on by
the relevant Business Vendor;
"MULTICOMP/MULTICOMPONENT AGREEMENT" means the agreement in the agreed terms
between Premier Farnell and Arrow;
"NORTH AMERICA" means Canada and the United States of America;
"OVERSEAS PENSION ARRANGEMENTS" means those arrangements for retirement,
disability and other benefits detailed more specifically in the Towers Xxxxxx
Report;
8
"PERMIT" means any licence, consent, authorisation, certification or permit
required under Environmental Law;
"PLANNING ACTS" means the Town and Country Planning Acts or any other enactment
for the time being in force in any relevant jurisdiction relating to the use,
development and enjoyment of land and buildings;
"PREMIER FARNELL CONFIDENTIAL INFORMATION" means all confidential information
and trade secrets relating mainly to the business of the Retained Premier
Farnell Group (or any part of it) or of any person having dealings with the
business of the Retained Premier Farnell Group or any part of it, including:
(a) its business methods, corporate plans, management systems and new
business opportunities or development projects, current trading
performance and future business strategy;
(b) all financial, marketing and technical information, ideas, concepts,
technology, processes and knowledge; and
(c) all lists or details of customers, suppliers, prices, discounts,
margins, information relating to research and development;
and any information derived from any of them and subsisting at Completion but
excluding any such information which is in the public domain other than by
reason of any breach of any confidentiality undertaking in relation to the
business of the Retained Premier Farnell Group or any part of it by any party
bound thereby or of any obligations under this Agreement;
"PREMIER FARNELL GROUP" means Premier Farnell, its subsidiaries and subsidiary
undertakings from time to time and references to a "MEMBER OF THE PREMIER
FARNELL GROUP" shall mean whichever of Premier Farnell or its subsidiaries or
subsidiary undertakings may be relevant in the particular context;
"PREMIER FARNELL'S SOLICITORS" means Eversheds of Cloth Xxxx Xxxxx, Xxxxxxxxx
Xxxxxx, Xxxxx XXX 0XX;
"PREVIOUS ACCOUNTS" means:
(a) in relation to the Farnell Volume Business, the pro forma consolidated
balance sheet of the Farnell Volume Business as at the Previous
Accounts Date and the pro forma consolidated profit and loss account of
the Farnell Volume Business in respect of the accounting reference
period ended on the Previous Accounts Date, in each case in the agreed
terms;
(b) in relation to each Company save for each of the US Companies and
Canadian Company, its audited balance sheet as at the Previous Accounts
Date and its audited profit and loss account in respect of the
accounting reference period ended on the Previous Accounts Date;
(c) in relation to each of the US Companies and Canadian Company, its
balance sheet as at the Previous Accounts Date and its profit and loss
account in respect of the accounting reference period on the Previous
Accounts Date;
9
(d) in relation to each Business, the standard accounting forms comprising
a balance sheet of that Business as at the Previous Accounts Date and a
profit and loss account of that Business in respect of the accounting
reference period ended on the Previous Accounts Date, in each case in
the agreed terms;
"PREVIOUS ACCOUNTS DATE" means 29 January 1995;
"PROPERTIES" means those properties owned, used or occupied by the Farnell
Volume Business, brief particulars of which are set out in Schedule 6;
"PURCHASE PRICE" means the sum of $300,000,000 adjusted and paid in accordance
with clauses 5 and 7;
"RECEIVABLES" means the book and other debts owing to any of the Business
Vendors which relate primarily to the Business carried on by the relevant
Business Vendor (including, without limitation, deposits, trade debts and
prepayments) but excluding:
(a) Cash;
(b) debts due from any Taxation authority; and
(c) any sums owed by a member of the Retained Premier Farnell Group other
than debts which arose in the ordinary course of trade;
"REGIONAL BUSINESS" means the business carried on by the Farnell Volume Business
which is supplied primarily from a Key Warehouse taken as a whole;
"REGISTERED TRADE MARKS" means the registered trade marks of which Premier
Farnell is the registered proprietor as detailed in Part II of Schedule 10;
"REGULATORY CONSENTS" means the consents in the agreed terms received from:
(a) the Irish Minister for Enterprise and Employment; and
(b) the German Federal Cartel office;
"RETAINED ASSETS" means:
(a) Cash;
(b) any debts due from any Taxation Authority;
(c) any sums owed by a member of the Retained Premier Farnell Group other
than debts which arose in the ordinary course of trade;
(d) the Swiss Property;
(e) the Excluded Intellectual Property Rights;
(f) any assets, rights or properties used primarily in the business carried
on by Farnell AG not comprising a Business;
(g) any assets, rights or properties used primarily in the business carried
on by Farnell Danmark AS not comprising a Business;
10
(h) the switchboard or any hire agreement, lease or similar arrangement
relating to the same used in Farnell AG; and
(i) Farnell Components Inc.;
"RETAINED PREMIER FARNELL GROUP" means the Premier Farnell Group, excluding the
Companies and excluding the Business Vendors (to the extent that the business of
such Business Vendor relates to the Farnell Volume Business);
"RTPA" means the Restrictive Trade Practices Acts 1976 and 1977;
"Shares" means, in relation to any Company, the entire issued share capital of
that Company, particulars of which are set out in Schedule 1;
"SLOUGH PROPERTIES" means the UK properties brief particulars of which are set
out in Part V of Schedule 6;
"STOCK" means the stock-in-trade of any of the Business Vendors at Completion in
relation to the Business to be sold by the relevant Business Vendor;
"SWEDISH AGREEMENT" means the agreement in the agreed terms between the Swedish
Company and a member of the Retained Premier Farnell Group transferring the
Swedish Catalogue Business (to include all employees employed in the Swedish
Catalogue Business);
"SWEDISH COMPANY" means Farnell (Sweden) AB;
"SWISS PROPERTY" means the premises at Xxxxxxxxxxxxxxxxxx 000 XX-0000 Xxxxxx;
"TAX DEED" means the deed in the agreed terms to be entered into pursuant to
this Agreement at Completion;
"TAX WARRANTIES" means the representations and warranties set out in Part II of
Schedule 4;
"TAXATION" or "TAX" means taxation or tax as defined in the Tax Deed;
"TAXES ACT" means the income and Corporation Taxes Xxx 0000;
"TCGA" means the Taxation of Chargeable Gains Xxx 0000,
"THE LONDON STOCK EXCHANGE" means London Stock Exchange Limited;
"TOWERS XXXXXX REPORT" means a report prepared by Towers Xxxxxx dated 5 December
1996 titled Premier Farnell plc Electronic Services Division International
Benefits Summary;
"TOWN AND COUNTRY PLANNING ACTS" means the Town and Country Planning Xxx 0000,
the Planning (Hazardous Substances) Xxx 0000, and the Planning and Compensation
Xxx 0000;
"TRADE XXXX ASSIGNMENT" means the agreement in the agreed terms between Premier
Farnell and Arrow;
11
"TRANSFER ACCOUNTS" MEANS:
(a) the consolidated balance sheet of the Farnell Volume Business and
Farnell Holding Inc(excluding Farnell Components Inc) as at the
Transfer Date;
(b) in relation to each Company, the balance sheet of that Company as at
the Transfer Date; and
(c) in relation to each Business, the balance sheet as at the Transfer Date
of the relevant Business Vendor in relation to that Business;
"TRANSFER AGREEMENT" means, in relation to each of the Companies and each of the
Businesses, the agreement in the agreed terms to be executed in accordance with
this Agreement between a member of the Premier Farnell Group and a member of the
Arrow Group to implement the sale and purchase of that Company or Business in
accordance with the terms hereof;
"TRANSFER DATE" means the close of business on 27 December, 1996;
"UK A LIST PROPERTY" means the leasehold property known as sites 'A' and 'B'
Edinburgh Way, Harlow, Essex brief particulars of which are set out in Part I of
Schedule 6;
"UK B LIST PROPERTIES" means the leasehold properties, brief particulars of
which are set out in Part II of Schedule 6;
"UK COMPANY" means Farnell Electronic Services Limited;
"UK GAAP" means generally accepted accounting principles, policies and practices
in the United Kingdom including all applicable statements of Standard Accounting
Practice, Financial Reporting Standards and pronouncements of the Urgent Issues
Task Force;
"UK PROPERTIES" means the UK A List Property and the UK B List Properties;
"UK PURCHASER" means Arrow Electronics UK Holdings Limited;
"UK SCHEME" means The Premier Farnell Group of companies 1978 Retirement and
Death Benefit Scheme established by interim trust deed dated 26th January 1972;
"UK SHARES" means the 5,500,002 ordinary shares of (pound sterling)1 each
comprising the entire issued share capital of the UK Company;
"UK VENDOR" means Premier Farnell;
"US COMPANIES" means Farnell Electronics Inc and Farnell Holding Inc.;
"VAT" means:
(i) in the United Kingdom, value added tax; and
(ii) in any other country, the equivalent tax; and
"WARRANTIES" means the warranties set out in Parts I, II III and IV of Schedule
4;
12
1.2 In this Agreement, words and expressions defined in the Companies Act
shall bear the same meaning as in that Act.
1.3 In this Agreement, save where the context otherwise requires:
1.3.1 a reference to a statute or statutory provision shall include
a reference:
(A) to that statute or provision as consolidated,
modified, re-enacted or replaced by any statute or
statutory provision to the extent that such
consolidatory, re-enacting or replacing statute or
statutory provision is in force prior to the Transfer
Date;
(B) to any repealed statute or statutory provision which
it re-enacts (with or without modification); and
(C) any subordinate legislation made under the relevant
statute in force prior to the Transfer Date;
1.3.2 words in the singular shall include the plural, and vice
versa;
1.3.3 the masculine gender shall include the feminine and neuter and
vice versa;
1.3.4 a reference to a person shall include a reference to a firm, a
company, an unincorporated association or to a person's
executors or administrators;
1.3.5 a reference to a company shall include a reference to a body
corporate or other similar association if incorporated or
registered in a jurisdiction other than England and Wales;
1.3.6 a reference to a clause, sub-clause or a Schedule (other than
to a schedule to a statutory provision) shall be a reference
to a clause, sub-clause or Schedule (as the case may be) of or
to this Agreement;
1.3.7 if a period of time is specified and dates from a given day or
the day of an act or event, it shall be calculated exclusive
of that day;
1.3.8 references to any English legal term for any action, remedy,
method or judicial proceeding, legal document, legal status,
court, official or any legal concept or thing shall in respect
of any jurisdiction other than England and Wales be deemed to
include what most nearly approximates in that jurisdiction to
the English legal term;
1.3.9 references to any word or expression defined in any English
statute or statutory provision shall in respect of any
jurisdiction other than England and Wales be deemed to include
what most nearly approximates under applicable legislation in
that jurisdiction to the English word or expression;
13
1.3.10 a person shall be deemed to be connected with another
if that person is connected with another within the
meaning of section 839 of the Taxes Act;
1.3.11 references to writing shall include any modes of
reproducing words in a legible and non-transitory
form;
1.3.12 a reference to a balance sheet or profit and loss
account shall include a reference to any note
forming part of it;
1.3.13 where any of the Warranties is qualified by the
expression "to the best of the knowledge, information
and belief of Premier Farnell" or "as far as Premier
Farnell is aware" or any similar expression, that
Warranty shall mean:
(i) the knowledge of the country managers listed
in Schedule 8; and
(ii) the knowledge of Xx. X. Xxxxxxx, Mr. I
Xxxxxxx, Mr. A Xxxxxx (who shall have
enquired carefully as to the position with
Price Waterhouse), Xx. X. Xxxxxx (who shall
have carefully enquired as to the position
with Eversheds), Xx. X. Xxxxxxx, Xx. X.
Xxxxxx, Xx. X. Xxxxxx;
1.3.14 references to documents "in the agreed terms" shall
be to documents agreed between the parties, annexed
to this Agreement and initialled for identification
by Premier Farnell's Solicitors and Arrow's
Solicitors;
1.3.15 the headings in this Agreement are for convenience
only and shall not affect the interpretation of any
provision of this Agreement; and
1.3.16 references to this Agreement include this Agreement
as amended or supplemented in accordance with its
terms.
1.4 The designations adopted in the recitals and introductory
statements preceding this clause apply throughout this
Agreement, including the Schedules.
2. CONDITIONS
2.1 The provisions of this Agreement, other than this clause,
clause 3.3 and clauses 17.2.2 and 18.6 (Confidentiality), 24
(Announcements), 27 (Costs), 30 (Notices) and 31 (Governing
Law) are subject to each of the following conditions being
satisfied (or waived by written agreement between the parties
in accordance with this clause) on or before 30 June 1997:
2.1.1 it becoming apparent that no action will be taken by
the Italian Competition Authority under Law No.
287/90 to prohibit the proposed acquisition of the
Italian Company by the Arrow Group or to order
modifications of the same which are not satisfactory
to both parties acting reasonably either by receipt
of confirmation to that effect in terms satisfactory
to both parties acting reasonably or by the expiry of
14
any periods provided under the said law for the commencement of an
investigation of the proposed acquisition;
2.1.2 the Cartel Court of Austria ("the Cartel Court") either (i) having
confirmed,on terms satisfactory to both parties acting reasonably, that
none of the law office of the Federal Republic of Austria, the Federal
Economic Chamber, the Federal Chamber of Labour and the Austrian
Chamber of Agriculture have requested a review and investigation of the
proposed acquisition of Austrian Company by the Arrow Group; or (ii)
where such an investigation has been requested, not having restricted
the merger or (iii) where such an investigation has been requested, not
having ruled to prohibit the merger within the period of five months
provided in S 42b(5) Austrian Cartel Act PROVIDED THAT where such an
investigation has been requested and has not been completed and a
period of three weeks or more shall have elapsed since the last of the
conditions referred to in clauses 2.1.1, 2.1.3 and 2.1.4 was fulfilled
or waived by the parties, this clause 2.1.2 shall cease to operate as a
condition to this Agreement other than in relation to the sale of the
Austrian Company and the relative Transfer Agreement and the parties
will use their reasonable endeavours to agree how best to deal with the
Austrian Company to their mutual satisfaction, regard being had to any
remaining regulatory constraints;
2.1.3 the Swedish Competition Authority having confirmed, on terms
satisfactory to both parties acting reasonably, that no investigation
under Section 38 of the Swedish Competition Act has been initiated with
respect to the proposed acquisition of the Swedish Company by the Arrow
Group;
2.1.4 Farnell (France) S.A.R.L. having initiated consultations with the
appropriate bodies representing the employees of the Farnell Volume
Business in France (the "FRENCH EMPLOYEE REPRESENTATIVES") in
accordance with Article 432-1 of the French Labour Code and the French
Employee Representatives giving an opinion in accordance with the
French Labour Code;
2.1.5 no improper conduct by any of the Companies or Business Vendors having
occurred constituting fraud in connection with transactions with a
supplier of inventory to, or customer of, the Farnell Volume Business
which would have a material adverse effect on any Regional Business;
2.1.6 no violations of law by any of the Companies or Business Vendors having
occurred which would have a material adverse effect on any Regional
Business;
2.1.7 no occurrence of substantial loss or destruction having occurred, not
being covered by insurance or reimbursed by Premier Farnell, to a Key
Warehouse or the inventory contained therein;
2.1.8 the Regulatory Consents not being withdrawn or varied (such variation
being, in the reasonable opinion of either party, material);
15
2.1.9 no governmental or regulatory body or court of competent
jurisdiction restraining or preventing Completion or
completion of any of the Transfer Agreements or otherwise
limiting, preventing or restricting the implementation in any
material respect (except as provided in clause 2.1.2) by the
Arrow Group of the purchase of the Farnell Volume Business;
2.1.10 no claim having been made against or paid by any Company or
any Business Vendor under any guarantee by a Company or a
Business Vendor of the obligations of any member of the
Retained Premier Farnell Group which has not been satisfied or
reimbursed by a member of the Retained Premier Farnell Group;
and, if each of those conditions has not been satisfied, or waived by
written agreement between the parties on or before 30 June 1997, the
provisions of this Agreement (other than clauses 24 (Announcements), 27
(Costs), 30 (Notices), 31 (Governing Law) and 17.2.2 and 18.6
(Confidentiality)) shall from such date have no effect and neither
party shall have any liability under them (without prejudice to the
rights of either party in respect of antecedent breaches).
2.2 Arrow and Premier Farnell shall use their respective reasonable
endeavours to procure that the conditions in clauses 2.1.1 to 2.1.4
inclusive are satisfied by not later than 30 June 1997. Neither party
is entitled to withdraw from this Agreement before 30 June 1997 unless
it becomes evident that any of the conditions in clauses 2.1.1 to 2.1.4
has become incapable of satisfaction and both parties, acting
reasonably, agree in writing that this Agreement should be of no
further effect.
2.3 If the conditions contained in sub-clauses 2.1.1. to 2.1.3 have been
satisfied and both parties reasonably agree that the condition set out
in sub-clause 2.1.4 is unlikely to be satisfied within a short period
following the satisfaction of the latest in time to be satisfied of
conditions 2.1.1 to 2.1.3, both parties may agree that sub-clause 2.1.4
shall cease to operate as a condition and to use their reasonable
endeavours to agree a proposal for implementing the terms of this
Agreement save in respect of the sale of the French Business.
2.4 Without limiting the foregoing, it is agreed that all requests and
enquiries from any government, governmental, supranational or trade
agency or regulatory body or any trade union or works council shall be
dealt with by Premier Farnell and Arrow in consultation with each other
and Premier Farnell and Arrow shall promptly co-operate with and
provide all necessary information and assistance reasonably required by
such government, agency, body, trade union or works council upon being
requested to do so by the other.
2.5 If either Arrow or Premier Farnell fails to comply with the provisions
of clause 2.2, without affecting any other rights or remedies that
either party may have, Arrow and Premier Farnell each acknowledge and
agree that damages would not be an adequate remedy for breach of such
obligation and the party not in
16
default shall be entitled to the remedy of specific
performance or other equitable relief for any threatened
or actual breach of such obligation.
2.6 Each party acknowledges that it is of fundamental importance
to the other that, once this Agreement is announced,
Completion is effected subject always to the fulfilment,
satisfaction or waiver of the conditions set out in clauses 2
and 12.2. Accordingly, each party hereby waives any rights of
rescission which may be available to it (save such as may
arise in respect of fraud).
2.7 Each party agrees that, if either party fails to complete the
Agreement in circumstances where the conditions in clauses 2
and 12.2 have been fulfilled, satisfied or waived and the
other party has taken all steps as are required of it to
effect Completion, damages will be an inadequate remedy for
such other party and that the other party should be entitled
to equitable relief including specific performance to the
maximum extent available. Nothing contained in this clause
shall be construed as preventing either party Mom pursuing any
other remedies available to it for failure by the other party
to effect Completion in accordance with the provisions of this
Agreement.
3. SALE AND PURCHASE OF FARNELL VOLUME BUSINESS
3.1 Premier Farnell shall sell or procure the sale of the Farnell
Volume Business (including all of the Shares (excluding the
Shares in Farnell Electronics Inc.) and each of the Businesses
and their respective Business Assets) with full title
guarantee (save, in respect of the Business Assets only, as
expressly provided in this Agreement or any of the documents
in the agreed terms) and assign or novate the Loans or procure
them to be assigned or novated as appropriate and Arrow shall
procure the purchase, assignment or novation of the same, in
accordance with this Agreement and by the execution and
performance of each of the Transfer Agreements.
3.2 In relation to Contracts, the expression "full title
guarantee" in clause 3.1 shall not imply that Premier Farnell
or the relevant Business Vendor has the right to assign or
sell any Contract without the consent of the other party to
any Contract nor that Premier Farnell or the Business Vendor
has obtained any such consent which is required for such
assignment or sale.
3.3 As soon as practicable following the satisfaction or waiver of
each of the conditions set out in clauses 2.1.1 to 2.1.4
inclusive and in any event within three Business Days after
the date on which the last in time to be satisfied or waived
of those conditions is satisfied or waived (as the case may
be), Premier Farnell shall procure the execution and
completion by the Company Vendors and the Business Vendors of
(or itself execute and complete), and Arrow shall procure the
execution and completion by the Company Purchasers and
Business Purchasers of (or itself execute and complete), the
Transfer Agreements on terms that the execution and completion
of each of the Transfer Agreements shall be subject to and
effective from the completion of the provisions of clause 12
of this Agreement in accordance with its terms.
3.4 Time shall be of the essence for the purposes of clause 3.3.
17
3.5 Subject to the proviso to clause 2.1.2, neither party shall be
obliged to procure completion of the sale and purchase of the
Farnell Volume Business unless the other procures completion
of or completes the sale and purchase (as appropriate) of all
of the Farnell Volume Business in accordance with this
Agreement and each of the Transfer Agreements.
3.6 Neither party shall be permitted to delay Completion if the
only reason that Completion cannot occur is because a member
of such party's Group shall not have executed or completed a
Transfer Agreement when it was obliged to do so.
3.7 In relation to a sale of Shares or a Business, each of Premier
Farnell and Arrow acknowledge and agree that the other may, as
far as the other deems necessary, assign any of its rights
under this Agreement (but excluding the rights contained in
sub-clause 17.12) or the Transfer Agreements or any of the
documents in the agreed terms to any member of the Retained
Premier Farnell Group or the Arrow Group (as the case may be)
on condition that the assignee shall agree to reassign those
rights to another member of the Retained Premier Farnell Group
or Arrow Group (as the case may be) if at any time it ceases
to be, or it is proposed that it should cease to be, a member
of the Retained Premier Farnell Group or Arrow Group (as the
case may be).
3.8 Arrow undertakes to Premier Farnell (for itself and as trustee
for each of the Business Vendors) that it shall, or shall
procure that a Business Purchaser shall:
3.8.1 be responsible for and promptly pay, satisfy,
discharge and perform all the Assumed Liabilities as
they fall due; and
3.8.2 indemnify and keep fully and effectively indemnified
each Business Vendor from and against all Losses
which any Business Vendor may suffer or incur as a
result of the failure by Arrow or the relevant
Business Purchaser to be responsible for or to
promptly pay, satisfy, discharge or perform any of
the Assumed Liabilities.
4. SALE AND PURCHASE OF UK SHARES
4.1 Premier Farnell shall procure that the UK Shares shall be sold
free from any option, charge, claim, equity, lien, rights of
pre-emption or any other third party rights and together with
all rights attached to them at the date of this Agreement or
subsequently becoming attached to them.
4.2 Premier Farnell hereby waives and agrees to waive or to
procure the waiver of any restrictions on transfer (including
pre-emption rights) which may exist in relation to the UK
Shares under the articles of association or other
constitutional documents of the UK Company (or otherwise).
4.3 Neither party shall be obliged to procure completion of the
sale or purchase of any UK Shares unless the other party
completes, or procures completion of, simultaneously the sale
and purchase (as appropriate) of all of the UK Shares, but
completion of the sale or purchase of some of the UK Shares
will not
18
affect the rights of the parties with respect to the sale and
purchase of the other UK Shares.
5. CALCULATION OF THE PURCHASE PRICE
5.1 The total consideration for the sale of the Farnell Volume
Business shall be US$300,000,000 as adjusted in accordance
with the three adjustments set out in this clause 5. This
US$300,000,000 amount shall be called "the Basic Purchase
Price" and shall be paid in accordance with clause 7.
5.2 In order to make the required adjustments to the Basic
Purchase Price, the December Statements and the Local
Completion Statements shall be prepared in accordance with
clause 6.
5.3 The first adjustment to the Basic Purchase Price shall be made
by reference to the Consolidated Net Operating Asset
Statement. To the extent the total figure in the Consolidated
Net Operating Asset Statement is more than (pound
sterling)80,700,000, the Basic Purchase Price shall be
increased by that amount. To the extent the total figure in
the Consolidated Net Operating Asset Statement is less than
(pound)80,700,000, the Basic Purchase Price shall be decreased
by that amount. This amount shall be called the "Net Asset
Adjustment" and shall be paid in accordance with clause 7.
5.4 The second adjustment to the Basic Purchase Price shall be
made by reference to the Local Retained Asset Statements. Each
Local Retained Asset Value as shown in the Local Retained
Asset Statement shall be converted into sterling in accordance
with clause 6.1 and the various sterling amounts for all the
Companies and Businesses shall be aggregated. If this
aggregate amount is positive, the Basic Purchase Price shall
be increased by that amount. If this amount is negative, the
Basic Purchase Price shall be decreased by that amount. This
amount shall be called the "Retained Asset Adjustment" and
shall be paid in accordance with clause 7.
5.5 The third adjustment to the Basic Purchase Price shall be made
as follows:
Each Local Completion Value as shown in the Local
Completion Statement shall be converted into sterling
in accordance with clause 6.1 and the various
sterling amounts for all the Companies and Businesses
shall be aggregated. If this aggregate amount is
positive, the Basic Purchase Price shall be increased
by that amount. If this amount is negative, the Basic
Purchase Price shall be decreased by that amount.
This amount shall be called the "Completion
Adjustment" and shall be paid in accordance with
clause 7.
5.6 The total consideration shall be allocated between the various
Companies, Businesses and Loans in accordance with clause 8.
6. TRANSFER ACCOUNTS AND DECEMBER STATEMENTS
6.1 Within 20 Business Days of the Transfer Date Premier Farnell
shall prepare and deliver the Transfer Accounts and the
December Statements to Price Waterhouse. Arrow shall give and
shall procure that each Company and each
19
Business Purchaser gives Premier Farnell such information and
assistance as Premier Farnell reasonably requires for the
purpose of preparing the Transfer Accounts and December
Statements. The Transfer Accounts shall be prepared in
sterling under the historical cost convention in compliance
with the requirements of the Companies Act in relation to the
preparation of audited financial statements (save for the
requirement for an audit report) and in accordance with UK
GAAP, adopting and consistently applying the accounting
principles, policies and practices used by Premier Farnell in
the preparation of the Farnell Volume Business Accounts, in
order to present fairly the financial position of the Farnell
Volume Business at the Transfer Date. The Transfer Accounts
shall be prepared on the same basis as that on which they
would have been prepared had the Farnell Volume Business
remained within the ownership of the Premier Farnell Group.
The parties agree that the exchange rate to be applied in
translating into sterling:
6.1.1 the Transfer Accounts and the December Statements; and
6.1.2 the Local Completion Statements;
shall be the closing mid point exchange rate for the Transfer
Date and the Business Day before the Completion Date
respectively rounded to two decimal places as quoted in The
Financial Times.
6.2 Premier Farnell shall instruct Price Waterhouse to undertake a
review and audit in accordance with UK generally accepted
auditing standards of the December Statements and to make such
adjustments thereto as may be necessary to ensure that they
comply with the requirements of clause 6.1. The instructions
to Price Waterhouse shall be on the terms that it shall afford
to Ernst & Young the opportunity to review the process and
procedures (including attendance at any stock-take or
discussion on the need for or level of any provisions or
exceptional charges in relation to any asset or liability) and
to examine all audit working papers involved in Price
Waterhouse's review of the December Statements. Following
Completion Arrow shall give and shall procure that each
Company and each Business Purchaser gives Price Waterhouse
such information and assistance as Price Waterhouse reasonably
requires for the purpose of reviewing the December Statements.
Price Waterhouse shall deliver the December Statements (both
as so reviewed and adjusted) accompanied by a certificate from
Price Waterhouse confirming that the December Statements have
been prepared on the basis required by clause 6.1 to Premier
Farnell, Arrow and Ernst & Young as soon as reasonably
practicable and in any event within 20 Business Days after
Completion.
6.3 Arrow and Ernst & Young shall be entitled to review the
documents referred to in clause 6.2 and to discuss with
Premier Farnell and Price Waterhouse any matters arising
therefrom. Premier Farnell shall give and shall procure that
(following the Transfer Date) each member of the Premier
Farnell Group gives Arrow and Ernst & Young such information
and assistance (including access to former auditors of the
Farnell Volume Business) as either Arrow or Ernst & Young
reasonably require. Arrow shall notify Premier Farnell within
20 Business Days after receipt of the documents referred to in
clause 6.2 whether
20
it accepts that the December Statements (both as reviewed and adjusted)
have been prepared in compliance with the requirements of this
Agreement and, if it does not, such notification be accompanied by a
letter from Arrow or Ernst & Young giving detailed reasoning in writing
for any non-acceptance. In the case of non-acceptance, the parties
shall (in conjunction with their respective accountants) meet and
discuss the objections in order to seek to reach agreement upon such
adjustments (if any) to the December Statements as are acceptable to
Premier Farnell and Arrow. If Arrow does not notify Premier Farnell
within the said 20 Business Days, Arrow shall be deemed to have
accepted the December Statements delivered to it as the December
Statements.
6.4 If there is no such dispute, or such dispute is so resolved or settled,
Premier Farnell shall procure that Price Waterhouse issues the December
Statements (which shall be in the form of the draft delivered to Arrow
with such changes (if any) as reflect the resolution or settlement of
such dispute).
6.5 If Premier Farnell and Arrow are unable to resolve all such differences
of views within 20 Business Days following the notification of
objections by Arrow, the matters in dispute shall be referred on the
application of either Arrow or Premier Farnell to an independent firm
of internationally recognised chartered accountants in London to be
appointed by (in default of nomination by agreement between Arrow and
Premier Farnell) the President for the time being of the Institute of
Chartered Accountants in England and Wales for resolution. In giving
its decision, the firm so appointed shall state what further
adjustments (if any) are necessary to the December Statements in order
for them to have been prepared in accordance with this Agreement. Any
such decision shall be final and binding on all concerned and shall be
given by them as experts and not as arbitrators. Such independent firm
of accountants shall be entitled, in rendering its decision, to take
into account only such evidence and information as the parties shall
have put forward to it.
6.6 Arrow and Premier Farnell shall give and shall procure that each member
of the Arrow Group and the Premier Farnell Group respectively gives
such information and assistance as the expert reasonably requires for
the purpose of resolving or settling any dispute relating to the
December Statements in accordance with this clause 6.
6.7 Within 20 Business Days of Completion Premier Farnell shall prepare and
deliver to Price Waterhouse the Local Completion Statements. Arrow
shall give or procure that each Business Purchaser shall give Premier
Farnell such information and assistance as Premier Farnell reasonably
requires for the purpose of preparing the Local Completion Statements.
Price Waterhouse shall review the Local Completion Statements and
subject to making any appropriate amendment thereto certify in writing
that the statements are complete and correctly extracted. The
provisions of clauses 6.3 to 6.6 shall apply to the Local Completion
Statements, mutatis mutandis.
6.8 The costs of Price Waterhouse pursuant to the provisions of this clause
shall be borne by Premier Farnell. The costs of Ernst & Young pursuant
to the
21
provisions of this clause shall be borne by Arrow. The costs
of the independent accountants (if applicable) shall be borne
equally by Arrow and Premier Farnell.
7. PAYMENT OF THE PURCHASE PRICE
7.1 On Completion, subject to clause 7.2, Arrow shall pay to
Premier Farnell the Basic Purchase Price (being $300,000,000).
7.2.1 If available on or before Completion, Farnell Holding
BV shall deliver to Arrow a certificate issued by the
Minister of National Revenue of Canada pursuant to
subsection 116(2) of the income Tax Act (Canada) (a
"Section 116 Certificate") in respect of the
disposition by Farnell Holding BV of the entire
issued share capital of Farnell (Canada) Limited
("THE CANADIAN SHARES"). The Section 116 Certificate
shall specify as a "certificate limit" an amount no
less than the estimated purchase price for the
Canadian Shares, being Canadian dollars 22,000,000
(the "estimated purchase price for the Canadian
Shares").
7.2.2 in the event that the Section 116 Certificate has not
been delivered to Arrow on or before Completion
Arrow shall withhold from the Basic Purchase Price an
amount equal to 33-1/3% of the estimated purchase
price for the Canadian Shares (the "WITHHELD
AMOUNT"). The Withheld Amount shall be deposited by
Arrow in an interest bearing account at a bank
located in a jurisdiction acceptable to the Canadian
authorities. The Withheld Amount shall be remitted to
the Receiver General of Canada on the date (the
"REMITTANCE DATE") which is 30 days after the end of
the month in which Arrow acquired the Canadian
Shares. All interest received by Arrow on the
Withheld Amount shall be for the account of Farnell
Holding BV and the full amount of such interest shall
be paid to Farnell Holding BV on the Remittance Date.
7.2.3 Notwithstanding the foregoing, if Farnell Holding BV
delivers a Section 116 Certificate to Arrow at any
time after Completion and prior to the Remittance
Date, Arrow shall pay to Farnell Holding BV an amount
equal to the amount, if any, by which:
(A) the aggregate of:
(1) the Withheld Amount; and
(2) the amount of interest received by
Arrow on the Withheld Amount
exceeds
(B) 33 1/3% of the amount, if any, by which the
estimated purchase price for the Canadian
Shares (as adjusted in accordance with the
terms of this Agreement) exceeds the
"certificate limit" specified in the Section
116 Certificate;
22
provided however, that the amount, if any, resulting from the
calculation required by 7.2.3(B) above shall be remitted by
Arrow to the Receiver General of Canada on the Remittance
Date.
7.3 Upon the agreement of the relevant calculations, the Net Asset
Adjustment, the Retained Asset Adjustment and the Completion
Adjustment shall be aggregated to calculate the "Purchase
Price Adjustment" (an amount which will be in sterling). If
the Purchase Price Adjustment is a positive amount, Arrow
shall pay the amount of the Purchase Price Adjustment to
Premier Farnell. If the Purchase Price Adjustment is a
negative amount, Premier Farnell shall pay the amount of the
Purchase Price Adjustment to Arrow.
7.4 Payments in accordance with this clause shall be made by CHAPS
automated transfer to an account in the United Kingdom of a
clearing bank in the United Kingdom of Premier Farnell or
Arrow (as the case may be) previously nominated in writing by
it to the other. Receipt in that account of the amount shall
be a valid discharge of the paying party to the other.
7.5 Interest shall be payable at the Bank Base Rate of Barclays
Bank plc in respect of the Purchase Price Adjustment from the
Completion Date to the date of payment of the Purchase Price
Adjustment inclusive.
7.6 Payments made in accordance with this clause shall be made on
behalf of the relevant Company Purchaser, Business Purchaser
and Loan Assignees, Business Vendors, Company Vendors and Loan
Assignors respectively.
7.7 For the purposes of calculating the payment to be made
pursuant to clause 7.3, in the event that, at the time such
payment is due to be made, the amount of tax payable in
respect of a net movement in Cash outside the ordinary course
of business pursuant to the Completion Adjustment is not yet
known, the Completion Adjustment shall be calculated assuming
such tax will be payable in an amount equal to the amount of
the tax reserve contained in the Local Completion Statement in
respect of such movement in Cash (which reserve shall be
calculated in accordance with UK GAAP); and a subsequent
payment to reflect any difference between such assumed amount
and the amount of tax which is actually paid in respect of
such movement in Cash shall be made by the appropriate party
at the time such actual tax amount becomes known.
8. ALLOCATION OF THE PURCHASE PRICE
8.1 The portion of the Purchase Price allocated to each Business
(expressed in the relevant local currency) shall be as
follows:
Take the relevant local currency value of Goodwill for the
Business in accordance with clause 8.3;
ADD
The relevant Local GAAP Net Operating Asset Value in the
relevant local currency as shown in the relevant Local GAAP
Net Operating Asset Statement
23
ADD/DEDUCT
The relevant Local Retained Asset Value in the relevant local currency
as shown in the relevant Local Retained Asset Statement
8.2 The portion of the Purchase Price allocated to each Company shall be as
follows:
Take the relevant local currency value of Goodwill for the Company in
accordance with clause 8.3;
ADD
The relevant Local GAAP Net Operating Asset Value in the relevant local
currency as shown in the relevant Local GAAP Net Operating Asset
Statement.
ADD/DEDUCT
The relevant Local Retained Asset Value in the relevant local currency
as shown in the relevant Local Retained Asset Statement
ADD/DEDUCT
The relevant Local Completion Value in the relevant local currency as
shown in the relevant Local Completion Statement
ADD DEDUCT
In the case of the UK Company only, an amount equal to the difference
between the Consolidation Adjustment and (pound sterling)912,000.
8.2.1 For the purpose of calculating the portion of the Purchase
Price allocated to the Shares of a Company there shall be
added to the Purchase Price allocated to that Company the
amount of Loans due at Completion to the Company (or its
subsidiaries) and novated by Premier Farnell or the Premier
Farnell Group to the relevant person nominated by Arrow in
respect of the Loans.
8.2.2 Subject to clause 8.2.3, the Purchase Price as adjusted by
clause 8.2.1 allocated to a Company, shall first be allocated
to the assignment of the Loans due from the Company or its
subsidiary to Premier Farnell or the Premier Farnell Group up
to its face value and the balance to the Shares (expressed in
the relevant local currency).
8.2.3 In the event that the Purchase Price as adjusted by clause
8.2.1 allocated to any Company less the amount allocated to
any relevant Loan results in a negative amount, the Purchase
Price allocated to the Shares shall be the local equivalent of
(pound sterling)1 and the amount allocated to the relevant
Loan shall be reduced accordingly.
8.2.4 There shall be then allocated to the novation of any Loan due
at Completion to the Company (or its subsidiary) the amount of
the Loan
24
novated by Premier Farnell or the Premier Farnell Group to the
relevant person nominated by Arrow in respect of the Loan.
8.3 The value attributable to Goodwill for each Company and Business shall
be as follows:
COMPANY OR LOCAL CURRENCY
BUSINESS (POUND STERLING)'000 '000
UK 66,366 66,366
Germany NIL NIL
Austria XXX XXX
Xxxxxxxxxxx 000 000
Xxxxxx 3,921 34,466
Belgium 392 21,003
Holland 490 1,431
Italy 686 1,754,445
Canada 7,646 17,509
USA 3,431 5,730
Sweden 5,490 62,915
Finland 8,529 66,185
Denmark 882 8,767
8.4 The Transfer Agreements shall provide for the consideration to be
consistent with the mechanism set out under the terms of this clause.
9. UNDERTAKINGS
Premier Farnell shall use its reasonable endeavours:
9.1 on or before Completion to repay or replace with advances from
members of the Retained Premier Farnell Group all external
borrowings to which a Company is a party other than trade
debts and the debts incurred by the Italian Company in the
ordinary course in respect of the financing of its trade
receivables and other than overdrafts to fund the working
capital requirements of the Farnell Volume Business between
the Transfer Date and Completion;
9.2 on or before the Transfer Date to extract all significant
surplus cash of a Company not required to fund medium term
ordinary course activities of the Company (other than cash
generated in the ordinary course of business);
25
10. COMPLETION UNDERTAKINGS REGARDING CASH GENERATED IN BUSINESSES
10.1 Premier Farnell shall procure that there shall be paid to
Arrow, and Arrow shall procure that there shall be paid to
Premier Farnell, as soon as reasonably practical after
Completion, the amount of Cash generated or absorbed (as the
case may be) by each Business in the ordinary course of
business during the period from the Transfer Date to
Completion inclusive as adjusted for any tax assets or
liabilities retained by the Business Vendor relating to such
ordinary course activities.
10.2 A single net payment shall be made in sterling, such amount to
be calculated by making the above calculation for each
Business in the relevant local currency and translating to
sterling using the exchange rate on the Business Day before
Completion as determined in accordance with clause 6.1.
103 Interest shall be payable in respect of the amount of the
payment due from Completion to the date of payment inclusive
in accordance with clause 7.5.
10.4 Any Cash generated or absorbed shall be regarded as within the
ordinary course of business if it results from a transaction
involving any of the categories of assets or liabilities set
out in the Local Net Operating Asset Statements.
10.5 The procedure for determining the Completion Adjustment set
out in clause 6.7 shall apply for determining the amount of
the Cash generated or absorbed as if the provisions thereof
were set out herein verbatim save that references to Local
Completion Statements shall be replaced by references to
statements of Cash generated and absorbed.
10.6 Each party shall (or shall procure that any member of its
Group shall) account to the other (or to the appropriate
member of the other's Group) as soon as reasonably practicable
in respect of any monies received by it (or by a member of its
Group) after Completion which in accordance with the terms of
this Agreement belong to the other party (or to a member of
the other party's Group).
11. PERIOD BETWEEN EXCHANGE AND COMPLETION
11.1 Pending Completion, Premier Farnell shall procure that:
11.1.1 each Company and each Business Vendor (in relation to
the Business to be sold by it) continues to carry on
business in the normal course so as to maintain the
goodwill and reputation of that Company and that
Business;
11.1.2 Arrow and its advisers are given as soon as
reasonably practicable on request access to such
facilities and information regarding the Business
Assets, liabilities, contracts and affairs of each
Company and each Business Vendor (in relation to the
Business to be sold by it) as Arrow may reasonably
require which shall for the avoidance of doubt
include all information, financial or otherwise
provided by the operating
26
management to the board of directors of each Company and Business
Vendor (in relation to the Business to be sold by it) including all
monthly management accounts, comparative financial data, cashflow
information together with any correspondence relating to the
termination or threatened termination of any franchise agreements to
which any of Premier Farnell, the Business Vendors (in relation to the
Business sold by it) or the Companies is a party;
11.1.3 the Deed of Assignment relating to the transfer of the legal and
beneficial title to each of the Slough Properties at fair market value
together with any associated liabilities from the UK Company to, and
assumption by a member of the Retained Premier Farnell Group, is
executed and forthwith upon receipt of any required consent completed
and that all reasonable efforts are made to obtain such consent prior
to Completion and, if such consent is not received prior to Completion,
Arrow is indemnified and held harmless against any liability arising in
respect of the Slough Properties from the Transfer Date;
11.1.4 the Swedish Agreement is executed and, to the extent reasonably
practicable, completed;
11.1.5 the sale of Farnell Components Inc at fair market value is completed;
11.1.6 such officers and representatives of the Arrow Group as Arrow shall
request are given access to, and are permitted to operate within the
sites at which the Farnell Volume Business operates and that the
directors and officers of the Premier Farnell Group, where requested,
consult with and have due regard to suggestions and requests of such
officers and representatives PROVIDED THAT nothing in this sub-clause
shall allow the representatives and officers of Arrow present on such
sites to interfere unduly with the running of the Farnell Volume
Business;
11.1.7 unless Arrow shall have previously specifically consented thereto in
writing (such consent not to be unreasonably withheld or delayed),
neither any Company nor any Business Vendor (in relation to any
Business to be sold by it) shall:
(A) create, extend, grant or issue, or agree to create, grant or
issue any mortgage, charge, debenture or other security (other
than liens arising in the ordinary course of trading); or
(B) create or issue or agree to create or issue any share or loan
capital, or give or agree to give any option in respect of any
share or loan capital; or
(C) pass any resolution by its members in general meeting or make
any alteration to its memorandum or articles of association or
equivalent constitutional documents, charter or bye-laws; or
27
(D) declare, make or pay any dividend or other distribution other
than a dividend or distribution of any Retained Assets or any
proceeds of Retained Assets; or
(E) pay its creditors otherwise than in the ordinary course or
change its policy in relation to the payment of creditors; or
(F) enter into any contract or commitment which is outside the
ordinary course of its business; or
(G) enter into or terminate any supply agreement or franchise
agreement with any supplier relating to any products sold by
that Company or Business Vendor to its customers; or
(H) sell or transfer any of its assets except in the ordinary
course of business, or cancel, release or assign any
indebtedness owed to it or any claims held by it except in the
ordinary course of trade; or
(I) enter into any agreement, commitment or arrangement to incur
any liability for, or make any payment in respect of, any
capital expenditure or any other expenditure (in each case,
which exceeds (pound)20,000 in respect of any single item of
expenditure) other than expenditure of a revenue nature
incurred in the ordinary course of business; or
(J) make any material change to the terms of employment of its
employees or the benefits given to its employees (save for
arising as a result of salary negotiations in the ordinary
course) or in any working practices or collective agreements
relating to such practices, or employ or dismiss any employees
with, or to have, an annual salary of in excess of
(pound)25,000; or
(K) enter into any additional agreement, commitment or arrangement
with any member of the Retained Premier Farnell Group outside
of the ordinary course of trading or modify or vary the terms
of any existing agreement, commitment or arrangement with any
member of the Retained Premier Farnell Group;
11.1.8 in relation to negotiations for changes in salary in the ordinary
course of the officers and directors of the Premier Farnell Group
consult with representatives of Arrow and have due regard to their
reasonable requests;
11.1.9 the Farnell Volume Business will not incur or pay any management fees
or other charges to any member of the Retained Premier Farnell Group
except to the extent the same are for actual services rendered to such
Company or Business and are charged at the same rates and on a
consistent basis as prevailed prior to the Transfer Date.
28
11.2 The parties acknowledge during the period from the Transfer
date until Completion (and contingent upon Completion taking
place), the profits and losses and the related cash flows of
the Farnell Volume Business, including transactions involving
any of the categories of assets or liabilities set out in the
Local Net Operating Asset Statements, will be for the account
of Arrow in accordance with the terms of clauses 5.5 and 10.1.
11.3 Pending Completion, the parties shall use their reasonable
endeavours to procure that the French Employee Representatives
are provided with all information required by them in order to
complete the consultation procedure in accordance with Article
L431-5 of the French Labour Code and to enable the French
Employee Representative to give an opinion in accordance with
the French Labour Code.
11.4 Premier Farnell shall, from the Transfer Date until
Completion, provide the necessary funds to the Farnell Volume
Business as may be needed to enable the Farnell Volume
Business to be conducted in the ordinary course, such funds to
bear interest at the rate of seven per cent. per annum.
11.5 No claim shall be made by any member of the Arrow Group that
the transfer referred to in clause 11.13 or the sale referred
to in clause 11.1.5 was not made at a fair market value other
than a claim for any Losses suffered by any member of the
Arrow Group as a result of such transfer or sale having been
determined in, or in connection with, proceedings in which
unlawful financial assistance contrary to section 151 of the
Companies Act is alleged, before a court of competent
jurisdiction, to have been made at less than fair market
value.
12. COMPLETION
12.1 Immediately following the satisfaction or waiver (as the case
may be) of each of the conditions set out in clauses 2.1.1 to
2.1.4, Arrow (in the case of clauses 2.1.1 to 2.1.3) and
Premier Farnell (in the case of clause 2.1.4) shall give
notice in writing of such occurrence to the other and
thereafter each of Premier Farnell and Arrow shall comply with
clause 3.3 in respect of each of the Transfer Agreements.
12.2 Completion shall take place at the offices of Arrow's
Solicitors on the fourth Business Day, or at such other place
or time as the parties shall agree, following the due
satisfaction or waiver of the last in time to be satisfied or
waived of the conditions specified in clauses 2.1.1 to 2.1.4
provided that none of the events specified within clauses
2.1.5 to 2.1.10 has occurred and provided further that,
subject to clause 3.6, it shall be a further condition to each
party's obligation to proceed to Completion that all of the
Transfer Agreements have been duly executed and delivered.
12.3 At Completion, each of Arrow and Premier Farnell shall or
shall procure that the relevant member of the Arrow Group or
the Premier Farnell Group (as the case may be) shall execute a
Deed of Assignment or Novation in the agreed form in respect
of the Loans.
29
12.4 At Completion, Premier Farnell shall procure that:
12.4.1 there are delivered to the UK Purchaser or Arrow's Solicitors:
(A) a duly executed transfer to the UK Purchaser or its nominee of
the UK Shares, together with definitive share certificates for
them or an indemnity in standard form any missing share
certificates;
(B) any power of attorney under which any document to be executed
pursuant to this Agreement is executed on behalf of the UK
Vendor;
(C) any waivers, consents or other documents required to vest in
the UK Purchaser the full beneficial ownership of the UK
Shares and enable the UK Purchaser to procure them to be
registered in the name of the UK Purchaser or its nominees;
(D) the Tax Deed duly executed by Premier Farnell;
(E) the certificate of incorporation, common seal, all statutory
and minute books (which shall be written up to, but not
including, the date of Completion) and share certificate books
of the UK Company together with all unused share certificate
forms;
(F) all deeds and documents listed in Part VI of Schedule 6
relating to the title of the UK Company to each of the UK
Properties;
(G) the written resignations of Xxxxxx Xxxxxxx and Xxxxxx Xxxxxx
and any other Premier Farnell nominee directors as directors
of the UK Company executed as a deed in the agreed terms and
evidence that any loans outstanding to any such directors from
any of the Companies or Businesses have been repaid;
(H) evidence reasonably satisfactory to Arrow that each guarantee
given by any Company of any liability of (or otherwise for the
benefit of) any member of the Retained Premier Farnell Group
will be terminated or released with effect from Completion and
each registrable charge to which any of the assets or
undertakings of the UK Company or any of its subsidiaries is
subject has been released or discharged;
(I) a power of attorney from the UK Vendor (and the holders of any
nominee shares) in the agreed terms relating to the exercise
of rights in respect of the UK Shares pending their
registration in the name of the UK Purchaser and/or its
nominee;
(J) a notice of resignation of the existing auditors of the UK
Company containing a statement that there are no circumstances
connected with such resignation which the auditors consider
should be brought to the attention of the
30
members or creditors of the UK Company, in accordance
with section 394 of the Companies Xxx 0000;
(K) if the same have been previously completed, a
certified copy of each of the Deeds of Assignment in
the agreed terms relating to the Slough Properties,
duly executed by the parties thereto;
(L) the Trade Xxxx Assignment and the Multicomp/
Multicomponent Agreement in the agreed terms duly
executed by Premier Farnell;
(M) except as previously notified to Arrow's solicitors,
original trade xxxx registration certificates for
the trade marks which will be assigned pursuant to
this Agreement or the Trade Xxxx Assignment;
12.4.2 the UK Vendor shall procure that the following business is
transacted at meetings of the directors of the UK Company:
(A) the directors of the UK Company shall approve the
transfers of the UK Shares for registration and the
entry of the transferee(s) in the register of members
of the UK Company, in each case subject only to the
transfers being subsequently presented duly stamped;
(B) the situation of the registered office of the UK
Company shall be changed to that nominated by the UK
Purchaser (if any);
(C) all existing mandates for the operation of the bank
accounts of the UK Company shall be revoked and new
mandates issued giving authority to those persons
nominated by Arrow if any are so nominated to Premier
Farnell prior to Completion;
(D) any person nominated by Arrow for appointment as a
director or the secretary of She UK Company shall be
so appointed; and
(E) Ernst & Young shall be appointed to replace the
existing auditors of the UK Company .
12.5 At Completion, Arrow shall procure:
12.5.1 on behalf of each of the Company Purchasers and Business
Purchasers, that She Basic Purchase Price (less any sum
required to be withheld pursuant to the provisions of clause
7.2) is paid by CHAPS automated transfer to the account
(details of which shall have been previously notified by
Premier Farnell to Arrow) of Premier Farnell; and
12.5.2 the UK Purchaser shall deliver or cause to be delivered to the
UK Vendor or Premier Farnell's Solicitors:
(A) the Trade Xxxx Assignment and the Multicomp/
Multicomponent Agreement in the agreed terms duly
executed by Arrow; and
31
(B) the Tax Deed duly executed by Arrow.
13. DEFAULT AT COMPLETION
13.1 Neither party shall be obliged to complete this Agreement
until the other complies fully with the requirements of
clauses 3.3 (subject to the provisions of clause 3.6) and
clauses 12.4.1(A), (B), (C), (D), (F), (H), (I), (L) and (M),
12.4.2 and 12.5 (as appropriate).
13.2 To the extent that Premier Farnell does not comply fully with
the requirements of clause 12.4.1(E), (G), (J), and (K) at
Completion, Premier Farnell undertakes to satisfy such
requirements as soon as practicable following Completion (and
in any event within 5 Business Days of Completion) and
undertakes to indemnify Arrow (who holds the benefit of such
indemnity for itself and as trustee for each of its
subsidiaries from time to time (which for the avoidance of
doubt shall include the Companies and the Business
Purchasers)) for any and all Losses in connection with failure
to satisfy such requirements in accordance with this clause.
14. WARRANTIES
14.1 In relation to the Farnell Volume Business (including each of
the Companies and Businesses) Premier Farnell warrants to
Arrow (who holds the benefit of such warranties for itself and
as trustee for each Company Purchaser and each Business
Purchaser) in the terms of the Warranties.
14.2 Save with the prior written consent of Arrow, Premier Farnell
shall not, and shall procure that no Company Vendor or
Business Vendor shall (in the event of any claim being made
against any of them in connection with the sale of Shares or
any Business or Business Assets), make any claim against any
Company or any of its subsidiaries or subsidiary undertakings
or (save in the ease of fraud or fraudulent misrepresentation)
against any director or employee of any Company or any of its
subsidiaries or subsidiary undertakings or any director or
employee engaged by any Business Vendor as at the date of
Completion, on whom Premier Farnell or any Company Vendor or
Business Vendor may have relied before agreeing to any term of
this Agreement, of the appropriate Transfer Agreement or the
content of any of the Warranties or of the Tax Deed or
authorizing any statement in the Disclosure Letter.
14.3 Each of the Warranties shall be construed as a separate
warranty and is given subject to the matters which are fairly
disclosed in the Disclosure Letter but (save as expressly
provided to the contrary) shall not be otherwise limited or
restricted by reference to or inference from the terms of any
other Warranty or any other term of this Agreement.
14.4 Premier Farnell shall immediately disclose to Arrow any matter
or thing which may arise or become known to it or any other
member of the Premier Farnell Group after the date of this
Agreement which is inconsistent with any of the Warranties or
which might render any of them misleading.
32
14.5 The Warranties, save for the Warranties referred to in
Schedule 9, shall be deemed to be repeated at the Transfer
Date and at Completion and any express or implied reference
therein to the date of this Agreement shall be replaced by a
reference to the Transfer Date or to the date of Completion,
as the case may be.
14.6 Arrow (for itself and on behalf of each Company Purchaser and
Business Purchaser) shall be entitled to claim after
Completion that any of the Warranties is or was untrue or
misleading or has or had been breached even if Arrow or any
Company Purchaser or Business Purchaser could have discovered
on or before Completion that the Warranty in question was
untrue misleading or had been breached and Completion shall
not in any way constitute a waiver of any of the rights of
Arrow or any Company Purchaser or Business Purchaser.
14.7 Save as expressly provided to the contrary in this Agreement,
the rights and remedies of Arrow and each Company Purchaser
and Business Purchaser in respect of a breach of any of the
Warranties shall not be affected by Completion, by any
investigation made by or on behalf of Arrow or any member of
the Arrow Group into the affairs of any Company or any
Business (as the case may be), by the giving of any time or
other indulgence by Arrow or any Company Purchaser or Business
Purchaser to any person, or by any other cause whatsoever
except a specific waiver or release by Arrow in writing; and
any such waiver or release shall not prejudice or affect any
remaining rights or remedies of Arrow or any Company Purchaser
or Business Purchaser.
14.8 Premier Farnell acknowledges and agrees with Arrow that, in
relation to any claim made in connection with a breach of any
of the Warranties, Arrow may determine at its sole discretion
to seek damages calculated on either of the following bases:
14.8.1 so as to recover the loss or damage suffered or
incurred by the relevant Company Purchaser or
Business Purchaser arising from the breach of any of
the Warranties; or
14.8.2 so as to recover the loss or damage required to put
the relevant Company Purchaser or Business Purchaser
into the position that it would have been in had the
relevant matter been as so warranted.
14.9 Arrow warrants to Premier Farnell (who holds the benefit of
such warranties for itself and as trustee for each Company
Vendor and Business Vendor) in terms of the warranties set out
in Part V of Schedule 4.
15. LIMITATION ON LIABILITY
15.1 In this clause "RELEVANT CLAIM" means a claim in respect of
any of the Warranties save for those set out in paragraphs
1.1, 1.2 and 1.3 of Part III of Schedule 4.
33
15.2 No relevant claim shall be made unless written notice containing
specific details of the relevant claim is served on Premier Farnell, in
the case of the Commercial Warranties on or before 30 September 1998
and, in the case of the Tax Warranties, on or before 31 March 2003
15.3 The aggregate amount of the liability of Premier Farnell, the Business
Vendors and the Company Vendors in respect of all relevant claims (and,
except with respect to claims under sub-clause 16.1, claims under
clause 16) shall not exceed the Purchase Price
15.4 No liability shall attach to Premier Farnell in respect of a relevant
claim unless the aggregate amount of the liability of Premier Farnell
in respect of all such relevant claims shall exceed(pound)2,000,000 in
which case Premier Farnell shall only be liable for the amount by which
such aggregate exceeds(pound)250,000
15.5 Premier Farnell shall not be liable for any relevant claim in respect
of an amount less than (pound)10,000.
15.6 Premier Farnell shall not be liable in respect of a relevant claim:
15.6.1 if it would not have arisen but for anything voluntarily done
or knowingly omitted to be done after Completion in the
ordinary course of business by Arrow or any member of the
Arrow Group;
15.6.2 to the extent that it arises or is increased as a result only
of:
(A) an increase in rates of taxation after the Accounts
Date; or
(B) the passing of any legislation, or making of any
subordinate legislation after the Accounts Date;
15.6.3 to the extent that it relates to any loss for which any member
of the Arrow Group is indemnified by insurance;
15.6.4 to the extent that it relates to:
(A) any matter the subject of a specific or general
provision in, or charged to, the Transfer Accounts;
or
(B) any liability for taxation arising out of the
ordinary course of business of a Company after the
Accounts Date; or
(C) any liability specifically taken account of or
provided for in the Consolidated Net Operating Asset
Statement.
15.7 In respect of relevant claims which are not Special Claims (as defined
in clause 15.8) Arrow shall:
(A) seek to recover from any applicable third party sums
due from that party by taking such steps as would
customarily be taken by Arrow in the ordinary course
of business. To the extent that the sums due relate
to a matter which could give rise to a relevant claim
any amount recovered shall reduce the amount of the
relevant claim;
34
(B) as soon as is reasonably practicable, notify Premier Farnell
in writing of any relevant claim and of any claim or matter
which gives rise or is likely to give rise to a relevant
claim;
(C) provide to Premier Farnell such information within its
possession or control relating to any claim or matter which
gives rise or is likely to give rise to a relevant claim as,
in its reasonable opinion, is necessary for Premier Farnell to
be able to evaluate the relevant claim or matter;
(D) subject to it being fully indemnified and reasonably secured
to the satisfaction of Arrow, take such action as Premier
Farnell shall reasonably require to avoid, resist, contest or
compromise any claim or matter which gives rise or is likely
to give rise to a relevant claim (but for the avoidance of
doubt, not entitling Premier Farnell to request that
proceedings be brought in the name of itself or any member of
the Premier Farnell Group)
provided that Arrow shall not be obliged to take or procure that any
member of the Arrow Group shall take any action if Arrow reasonably
considers that such action would be prejudicial to any member of the
Arrow Group from time to time or its respective business or goodwill.
15.8 In respect of relevant claims in excess of (pound)50,000 ("SPECIAL
CLAIMS") Arrow shall:
(A) seek to recover from any applicable third party,
including insurers, any sums due from that party by
taking such steps as Premier Farnell shall reasonably
require. To the extent that the sums due relate to a
matter which could give rise to a relevant claim any
amount recovered shall reduce the amount of the
relevant claim;
(B) promptly notify Premier Farnell in writing of any
Special Claims and of any claim or matter which gives
or is likely to give rise to a Special Claim;
(C) provide to Premier Farnell such information within
its possession or control relating to any claim or
matter which gives or is likely to give rise to a
Special Claim; and
(D) subject to the right of any insurer to conduct the
defence of a claim and subject to it being fully
indemnified in respect of the costs arising and in
respect of any actual or alleged improper or unlawful
conduct of the proceedings relating to such claim and
reasonably secured to the satisfaction of Arrow, take
such action as Premier Farnell shall reasonably
require including the appointment of solicitors
nominated by it to avoid, resist, contest or
compromise any claim or matter which gives or is
likely to give rise to a Special Claim,
35
provided that, for the purposes of this clause 15.8,
Premier Farnell will not be acting unreasonably if it
requires Arrow to take action which Arrow considers
would be prejudicial to any member of the Arrow Group
from time to time or its respective business or
goodwill.
15.9 Premier Farnell shall have no liability in respect of any
relevant claim to the extent that it arises as a result of any
change in the accounting policy or practice or in the
accounting reference date of any Company or Business after
Completion;
15.10 Payment of any relevant claim shall to the extent of such
payment satisfy and preclude any other relevant claim or claim
under the indemnities set out in clause 16 and/or the Tax Deed
which is capable of being made in respect of the same subject
matter (and vice versa).
15.11 Nothing herein shall in any way diminish the common law duty
of Arrow or any Company Purchaser or Business Purchaser to
mitigate its loss.
15.12 Any amount payable by Premier Farnell to Arrow in satisfaction
of any relevant claim or any claim under the Indemnities shall
be treated as a reduction of the Purchase Price. Such
reduction shall be made from the part of the Purchase Price
attributable to the part of the Farnell Volume Business to
which the relevant claim relates. To the extent the reduction
relates to a Business, the reduction shall be made either from
the value of goodwill or the net assets dependent upon the
subject matter of the relevant claim.
15.13 Arrow acknowledges and agrees that the Warranties do not apply
to:
15.13.1 the Properties (save for the Warranties contained in
paragraph 9 of Part I of Schedule 4)
15.13.2 matters or circumstances relating to the Environment
or Environmental Law (save for the Warranties
contained in paragraph 15.3 of Part I of Schedule 4).
15.14 Premier Farnell will not be liable for any relevant claim to
the extent that the subject matter of the claim is
specifically taken into account in determining any adjustments
to the Purchase Price as a result of the application of
clauses 5.3 to 5.5 inclusive.
16. INDEMNITIES
16.1 Subject to the provisions of clauses 16.3 to 16.6, Premier
Farnell shall indemnify and keep indemnified Arrow and, as
separate covenants, each of the Companies, Company Purchasers
and Business Purchasers:
16.1.1 as to 100% of the Costs of any Remedial Works
required during the period beginning on Completion
and ending on the fifth anniversary of Completion;
36
16.1.2 as to 50% of the Costs of any Remedial Works required during
the period beginning on the fifth anniversary of Completion
and ending on the seventh anniversary of Completion
provided that:
(i) the relevant indemnified person shall take all reasonable
steps:
(a) to notify Premier Farnell promptly upon receiving
actual notice of any circumstances which are likely
to lead to a claim under this clause 16.1; and
(b) to consult with Premier Farnell with a view to
keeping Costs to as low a level as is reasonably
possible, consistent with the nature and extent of
the Remedial Works; and
(c) to consult with Premier Farnell in relation to the
commissioning and execution of the Remedial Works;
and
(ii) no such claim shall be brought under this clause 16.1 in
respect of any Costs attributable to works undertaken in
excess of the requirements of the competent authority; and
(iii) the person indemnified under this clause 16.1 assigns to
Premier Farnell all and any rights it may have against any
other person under any law to recover against that person
under the "polluter pays" or other principle.
In this clause 16.1:
"COSTS" means the costs actually incurred and paid by those indemnified
under this clause 16.1;
"EXCEPTED WORKS" means any works required as a result of any act on the
part of Arrow or any member of the Arrow Group following Completion
including without limitation a change of use of any of the Properties;
"REMEDIAL WORKS" means any works other than Excepted Works which any
authority charged with the responsibility to enforce Environmental Law
requires the persons indemnified under this clause 16.1 to undertake in
relation to the Farnell Volume Business to restore the Environment
arising from circumstances relating to or arising from hazardous waste,
pollution or other environmental harm in existence at the Properties at
Completion;
"REQUIRES" means notifies as a mandatory obligation and "required" and
"requirement" have corresponding meanings.
16.2 Subject to the provisions of clauses 16.3 to 16.6, Premier Farnell
shall indemnify and keep indemnified Arrow and, as separate covenants,
each of the Companies, Company Purchasers and Business Purchasers
against all Losses which may be suffered or incurred by Arrow or any
of the Companies, Company Purchasers or Business Purchasers:
37
16.2.1 arising in connection with any claims or disputes:
(A) relating to former employees of the Farnell Volume Business or
former employees of any member of the Premier Farnell Group;
or
(B) notified to Premier Farnell or to any Company or Business
Vendor prior to Completion relating to the employment on or
prior to Completion or the termination or purported
termination on or prior Completion of the employment of any
Employees of the Farnell Volume Business or employees of any
member of the Premier Farnell Group save as a consequence of
the transaction contemplated by this Agreement or where Arrow
has consented to or required such dismissal;
16.2.2 for a period of three years from the date of Completion as a result of
any claim against Arrow or any member of the Arrow Group (including,
for the avoidance of doubt, the Companies and the Business Purchasers
in relation to the Businesses) arising in connection with death,
personal injury, other injury to persons, damage to property, loss of
business or profits or other consequential loss or deprivation of
rights (whether based on statute, legislation, negligence, breach of
warranty, strict liability or any other theory or legal foundation)
caused by or resulting from, directly or indirectly, any defect or
alleged defect in or with respect to or the lack of or alleged lack of
merchantable quality or lack of or alleged lack of fitness for purpose
of, any goods distributed or service provided (including value added
work in connection with any goods) by any member of the Premier Farnell
Group on or prior to Completion provided that neither Arrow nor any
member of the Arrow Group shall be entitled to recover under this
provision to the extent that such claim can be satisfied by the
performance by Arrow or such member of the Arrow Group of the normal
Farnell Volume Business contractual product or service warranty;
16.2.3 relating to any reorganisation of the Swedish Company carried out in
contemplation of the sale of the Farnell Volume Business by Premier
Farnell to Arrow and arising prior to 31st March 2003;
16.2.4 as a result of any liability (arising prior to 31 March 2003) of Arrow
or any Company Purchaser or Business Purchaser to reinstate (in
relation to structural alteration made prior to Completion only) any
Property used by the Farnell Volume Business at Completion (including
for the avoidance of doubt properties transferred at Completion)
provided that if such structural change was carried out by a third
party prior to the occupation of such Property by any member or former
member of the Premier Farnell Group, the obligations of Premier Farnell
to indemnify hereunder shall be limited to 50% of the amount of such
liability;
38
16.2.5 in respect of rent or insurance premiums not charged or
undercharged under the lease of the UK A List Property in
respect of any period prior to Completion;
16.2.6 arising from the fact that the Slough Properties were not
transferred with Landlord's prior formal consent from the UK
Company at Completion or the Slough Properties were
transferred from the UK Company without Landlord's prior
formal consent whether before or after Completion;
16.2.7 arising out of or in connection with the claims made by
Connaught Electronics Limited against the UK Company referred
to in paragraph 14 on page 37 of the Disclosure Letter.
16.3 Premier Farnell covenants to pay any claims in respect of the
entitlement of employees of the French Business relating to periods
prior to Completion to a share of profits of the French Business
Vendor.
16.4 No claim may be made pursuant to this clause 16 unless the amount being
claimed in respect of such claim exceeds (pound)10,000.
16.5 The provisions of clause 15.6.4(A) and (C) and 15.14 shall apply to
claims made pursuant to this clause 16.
16.6 In respect of claims under this clause ("INDEMNITY CLAIMS") Arrow
shall:
16.6.1 seek to recover from any applicable third party (including
insurers) any sums due from that party by taking such steps as
Premier Farnell shall reasonably require. To the extent that
the sums due relate to a matter which could give rise to an
Indemnity Claim any amount recovered shall reduce the amount
of the Indemnity Claim;
16.6.2 promptly notify Premier Farnell in writing of any Indemnity
Claims and of any claim or matter which gives or is likely to
give rise to an Indemnity Claim;
16.6.3 provide to Premier Farnell such information within its
possession or control relating to any claim or matter which
gives or is likely to give rise to an Indemnity Claim;
16.6.4 subject to any right of any insurer to conduct the defence of
such claim and subject to it being fully indemnified in
respect of the costs arising and in respect of any actual or
alleged improper or unlawful conduct of the proceedings
relating to such claim and reasonably secured to the
satisfaction of Arrow, take such reasonable action as Premier
Farnell shall require including the appointment of solicitors
nominated by it to avoid, resist, contest or compromise any
claim or matter which gives or is likely to give rise to an
Indemnity Claim or to effect any recovery from any third party
in respect thereof,
provided that Premier Farnell will not be acting unreasonably if it
requires Arrow to take action which Arrow considers would be
prejudicial to any
39
member of the Arrow Group from time to time or its respective business
or goodwill.
17. PROTECTION OF FARNELL VOLUME BUSINESS AND USE OF NAME
17.1 In this clause 17:
17.1.1 "COMPETING BUSINESS" means any business in the United
Kingdom, the Republic of Ireland, Continental Europe
or North America which competes with the volume
electronic component distribution business carried on
at Completion by each of the Companies and each of
the Business Vendors in relation to the Businesses
but shall not mean the catalogue electronic component
distribution business carried on at Completion by
Premier Farnell and members of the Retained Premier
Farnell Group.
17.1.2 references to acting directly or indirectly include
(without prejudice to the generality of that
expression) references to acting alone or jointly
with or by means of any other person.
17.2 Premier Farnell covenants with Arrow and, as separate
covenants, with each of the Companies and the Business
Purchasers, that:
17.2.1 until 31 March 2002, neither it nor any other member
of the Premier Farnell Group shall directly or
indirectly carry on or be engaged or interested in a
competing business save solely in respect of the
holding for investment of up to three per cent of any
class of securities quoted or dealt in on the London
Stock Exchange. Premier Farnell and the Premier
Farnell Group will be deemed to be observing the
covenant contained in this clause 17.2.1
notwithstanding one or more incidences of breach,
provided there is no course of action pursued by
Premier Farnell or any member of the Premier Farnell
Group which demonstrates to the reasonable
satisfaction of Arrow a strategic intention on the
part of any member of the Premier Farnell Group to
pursue volume business.
17.2.2 until 31 March 2002, neither it nor any other member
of the Premier Farnell Group shall directly or
indirectly solicit or entice away or endeavour to
solicit or entice away from any part of the Farnell
Volume Business or the successors in title of any
part of the Farnell Volume Business in competition
with any part of the Farnell Volume Business or the
successors in title to any part of the Farnell Volume
Business any person employed by any Company or in any
Business in an executive, marketing, technical or
sales capacity at Completion with a view to inducing
that person to leave such employment and to act for
another person in the same or a similar capacity in
relation to the same field of work;
17.2.3 neither it nor any member of the Premier Farnell
Group shall at any time disclose or use for its own
benefit or that of any other person any
40
Farnell Volume Business Confidential Information which is in the
possession or control of any member of the Premier Farnell Group.
17.3 Each of the restrictions set out in clauses 17.2.1 to 17.2.3 are
separate and severable and in the event of any such restriction being
determined as unenforceable in whole or in part for any reason, such
unenforceability shall not affect the enforceability of the remaining
restrictions or (in the case of restrictions unenforceable in part) the
remainder of that restriction.
17.4 The restrictions entered into by Premier Farnell in clause 17.2 are
given to Arrow for itself and to each of the Companies and Business
Purchasers and Premier Farnell agrees that it will at the request and
cost of Arrow enter into a further agreement with each Company and
Business Purchaser whereby it will accept restrictions corresponding to
the restrictions in this Agreement (or such of them as Arrow for itself
in its absolute discretion shall deem appropriate).
17.5 The provisions of clause 17.2.1 are effective from Completion (subject
to clause 25.6) but their continued application is conditional upon:
17.5.1 no challenge being made directly or indirectly by Arrow or any
member of the Arrow Group to the validity, lawfulness or
enforceability of the covenant given by Arrow in clause 18.2
(the "ARROW COVENANTS") either proactively by means of any
application to that effect by Arrow or a member of the Arrow
Group to a Competent Authority or defensively in any legal
proceedings brought by Premier Farnell to enforce the Arrow
Covenants; and
17.5.2 Arrow and all members of the Arrow Group continuing to observe
the Arrow Covenants
and in the event that such a challenge is made or there is a failure by
any member of the Arrow Group substantially to observe the Arrow
Covenants the provisions of clause 17.2.1 shall forthwith cease to have
effect.
17.6 Notwithstanding the terms of clause 17.1 and the covenants contained in
clause 17.2.1, Premier Farnell and any member of the Premier Farnell
Group shall be entitled to acquire (whether directly or indirectly):
17.6.1 the undertaking of any person, firm or company which is
engaged concerned or interested in a competing business
(whether directly or indirectly and whether alone or in
conjunction with or on behalf of any other person and whether
as principal, shareholder, director, employee, consultant or
partner); and or
17.6.2 the shares in any other company which itself or through any
subsidiary undertaking (as defined in Section 258 of the
Companies Act) or associated company (as defined in section
416 of the Taxes Act) carries on or is engaged, concerned or
interested in a competing business (whether directly or
indirectly and whether alone or in conjunction with or on
behalf of any other person and whether as principal,
shareholder, director, employee, consultant or partner);
41
Provided that
(i) the relevant acquisition is not made primarily with a view to
acquiring the competing business; and
(ii) the turnover derived from the competing business is not (by
reference to the latest available audited accounts of the
relevant company or companies) more than 20 per cent of the
consolidated turnover of the relevant undertaking or of the
relevant company, its subsidiary undertakings and associated
companies (as defined above) insofar as such subsidiary
undertakings and associated companies are comprised in the
acquisition (as the case may be);
and in such event the covenant contained in clause 17.2.1 shall not
apply to such competing business to the extent only that such competing
business is carried on at the time of the relevant acquisition
17.7 Premier Farnell will dispose of any competing business acquired
pursuant to clause 17.6 within two years of completion of that
acquisition unless Arrow consents to its retention by Premier Farnell
(such consent not to be unreasonably withheld or delayed) (and will not
in the meantime actively seek to expand or grow that competing
business) provided that before entering into any negotiations with any
third party with a view to making such disposal it shall first give
Arrow the opportunity to make an offer for the competing business so
acquired. If Arrow does not make any such offer (or if its offer is
not accepted by Premier Farnell) and thereafter Premier Farnell
receives an offer from a third party which it is inclined to accept, it
shall give Arrow the opportunity to match the offer made by that third
party and if the offer is matched both parties will endeavour to
negotiate satisfactory agreements for the sale and purchase of that
competing business.
17.8 At or as soon as possible after Completion, Premier Farnell shall and
shall procure that each applicable member of the Premier Farnell Group
shall co-operate with Arrow and the applicable member of the Arrow
Group in despatching, at the cost of Arrow or such member of the Arrow
Group, notices substantially in the agreed terms to the Employees and
to suppliers, agents, distributors and customers of the Farnell Volume
Business and to such other third parties as Arrow and/or any other
member of the Arrow Group may reasonably request informing them of the
transfer of the Farnell Volume Business.
17.9 Premier Farnell shall and shall procure that each member of the Premier
Farnell Group shall, following Completion, as soon as reasonably
practicable upon receipt forward to Arrow or, if appropriate, the
relevant Company Purchaser or Business Purchaser, all notices,
correspondence, information, orders or enquiries relating to the
Farnell Volume Business or any part of it or to any of the Business
Assets or Contracts if and to the extent that they are received by any
member of the Premier Farnell Group after Completion.
42
17.10 On Completion the parties shall procure:
17.10.1 that the name of each Company shall be changed to a name which
does not include Farnell and/or FES and which is not similar
to Farnell and/or FES and which is not likely to cause
confusion and does not create or imply any other association
or link with the Premier Farnell Group or any of its members;
17.10.2 that each Company and Business Purchaser cancels any Internet
domain name registration which includes Farnell and/or FES or
create or imply any other association or link with the Premier
Farnell Group or, where possible, transfers such Internet
domain name to Premier Farnell;
and, in addition, Arrow shall procure that each Company and Business Purchaser
shall, as soon as reasonably possible, cause all entries in published materials
such as telephone, street, or other directories to be removed or amended so as
not to include reference to Farnell and/or FES.
17.11 Save as expressly provided in this clause 17, nothing in this Agreement
or in any of the Transfer Agreements shall confer upon Arrow or any
other member of the Arrow Group after Completion (including the
Companies and the Business Purchasers) any right or interest in and to
the Farnell and/or FES name and to any name which is similar to Farnell
and/or FES or which is likely to cause confusion. For the avoidance of
doubt, nothing in this Agreement shall entitle Arrow or any other
member of the Arrow Group, before or after Completion, to use Farnell
and/or FES as a corporate name or trading name or an Internet domain
name, or as part thereof.
17.12 Premier Farnell shall permit each Company and each Business Purchaser
in relation to the Business to continue to use the Farnell and/or FES
name on a non-exclusive basis, solely in those territories where it is
respectively used by each Company and each Business Purchaser before
Completion:
17.12.1 on its stationery and invoices in the manner and to the extent
currently used by that Company or in relation to that
Business;
17.12.2 on stock in trade held by that Company or in relation to that
Business on or before Completion provided that it was marked
with the Farnell and/or FES name before Completion and on
stock in trade received pursuant to orders made by that
Company or in relation to that Business on or before
Completion; and
17.12.3 on stocks of promotional material including videos, sales and
marketing catalogues, and packaging and other printed
promotional material held by, or received pursuant to orders
made by, that Company or in relation to that Business on or
before Completion;
provided that Arrow shall procure that each Company and Business
Purchaser concerned shall, in using any of the stationery or invoices
referred to in clause 17.12.1 or any promotional material referred to
in clause 17.12.3
43
contemporaneously notify any third party recipient by endorsement on or
addendum to the relevant stationery, invoice or promotional material or
otherwise that the Company or the Business concerned is no longer a
member of or otherwise associated with the Premier Farnell Group.
17.13 The licence granted pursuant to clause 17.12 shall continue until:
17.13.1 in the case of clause 17.12.1, six months from the date of
Completion;
17.13.2 in the case of clause 17.12.2 until the stock in trade is used
or written off as obsolete or, if earlier the date 6 months
after Completion; and
17.13.3 in the case of clause 17.12.3, until the stocks of promotional
materials have been used or become obsolete or, if earlier,
the date six months after Completion, provided that with
respect to stocks of the "Yellow Book" until the earlier of
the next scheduled printing of the same or 31 December 1997.
17.14 Arrow shall procure that no member of the Arrow Group shall after
Completion:
17.14.1 subject to clause 17.12, represent that it is a member of the
Premier Farnell Group;
17.14.2 use the Premier Farnel1 and/or FES name other than as
permitted under clause 17.12;
17.14.3 during the period of the licence contained in clause 17.12,
commit or omit any act or pursue any course of conduct which
might tend to bring the Farnell and/or FES name into disrepute
or use the Farnell name in any way likely to damage the
goodwill attaching to it or the registration thereof.
17.15 Notwithstanding clause 17.12 Premier Farnell shall have the right to
determine the licence granted pursuant to clause 17.12 forthwith on
notice if:-
17.15.1 any Company or Business Purchaser or Arrow challenges Premier
Farnell's and/or the Premier Farnel1 Group's exclusive right
to use the Farnell and/or FES name; or
17.15.2 any Company or Business Purchaser or member of the Arrow Group
applies for an Internet domain name which incorporates the
Farnel1 and/or FES name or any confusingly similar name.
17.15.3 any Company or Business Purchaser commits a material breach of
this clause 17.
17.16 On the expiry or any termination of the licence granted pursuant to
clause 17.12 (howsoever caused) Arrow shall procure that:
17.16.1 each Company and Business Purchaser shall forthwith cease to
use or sell stock in trade under or by reference to the
Farnell and or FES name;
44
17.16.2 each Company and Business Purchaser shall as soon as
reasonably practicable remove or obliterate all representation
of the Farnell name on the stock in trade or on any containers
or labels in the power or control of the Companies and the
Business Purchasers;
17.16.3 each Company and Business Purchaser shall as soon as
reasonably practicable cause all advertisements, sales videos,
promotional material, and the like to be expunged or changed
so as to eliminate any reference to the Farnell name; and
17.16.4 each Company and Business Purchaser shall not thereafter use
the Farnell and/or FES name or any trading style, trade name,
trade xxxx, or get up which is similar to or so nearly
resembles the Farnell and/or FES name as would or would be
likely to cause confusion.
17.17 Arrow:
17.17.1 agrees to indemnify Premier Farnell against any Losses
incurred by Premier Farnell which may be a result of any claim
by a third party that the Companies' and/or Business
Purchasers' use of the Farnell and/or FES name infringes such
third party's rights;
17.17.2 agrees subject to being indemnified to its reasonable
satisfaction to co-operate with Premier Farnell and act on
Premier Farnell's reasonable requests in respect of any
infringement or passing off described in Clause 17.17.3
(including without limit, by passing conduct of any action to
Premier Farnell when requested, by making no admission or
prejudicial statement without Premier Farnell's prior written
consent and by assisting Premier Farnell in such actions) and
shall procure that the Companies and Businesses (where
appropriate) do the same; and
17.17.3 Arrow agrees to notify Premier Farnell promptly of, any trade
xxxx infringement, passing off or other suspected or
threatened infringement of the Farnell and/or FES name by a
third party of which Arrow becomes aware or any allegation by
a third party of which Arrow becomes aware that the use of the
Farnell and/or FES name infringes or may infringe the rights
of a third party;
17.18 Arrow shall procure that each Company and Business Purchaser shall keep
Premier Farnell fully and effectively indemnified from and against all
Losses sustained by any Company Vendor or any Business Vendor or any
other member of the Retained Premier Farnell Group to the extent that
such Losses arise out of any goods or services supplied by the Company
and Business Purchaser under or using or by reference to the Farnell
and/or FES name (including without limitation such matters arising out
of any action brought under the Consumer Protection Xxx 0000 or for
negligence by reason of a defect in the stock in trade) after
Completion.
17.19 For a period of 6 months following the date of Completion Premier
Farnell shall permit each Company and each Business Purchaser in
relation to the Business to use the words "formerly trading as Farnell
Electronic Services" on
45
its stationery and invoices, and on stocks of promotional material
including videos, sales and marketing catalogues and packaging and
other printed promotional material held by or received pursuant to
orders made by, that Company or in relation to that Business on or
before Completion.
18. PROTECTION OF THE RETAINED PREMIER FARNELL GROUP
18.1 In this Clause 18:
18.1.1 "competing business" means any business which
competes in the United Kingdom with the catalogue
electronic component distribution business carried on
at Completion by Premier Farnell. For the purposes of
this Clause 18 Arrow will be deemed to be carrying on
a competing business only if it changes the way the
Farnell Volume Business operates in the UK in a
manner intended to cause, or likely to have the
effect of causing, the Farnell Volume Business to
become a potentially significant competitor to
Premier Farnell's retained catalogue electronic
component distribution business. Included in such
changes, for example, could be one or more of the
following:
(A) the catalogue published and distributed by
the Farnell Volume Business in the UK (and
known as the "Yellow Book") (or any other UK
catalogue) is published more frequently than
once in any 12 month period or is more
widely distributed than is currently the
case; or
(B) deliveries are made or orders accepted in
the ordinary course without charging for
carriage, packing or administration (unless
such change is made in response to changes
in the competitive nature of the volume
business);
(C) customers are solicited whose aggregate
annual purchases of electronic components
are unlikely to exceed (pound
sterling)25,000 in value; or
(D) field sales engineers are engaged whose
responsibilities include focusing on
customers described in paragraph (C) above;
or
(E) prices for electronic components (as opposed
to complete items) are listed per unit
(except to the extent prices are currently
so listed in the Yellow Book).
18.1.2 references to acting directly or indirectly include
(without prejudice to the generality of that
expression) references to acting alone or jointly
with or by means of any other person.
18.2 Arrow (for and on behalf of itself and its subsidiaries from
time to time) covenants with Premier Farnell that until 31
March 2002 neither it nor any other member of the Arrow Group
shall directly or indirectly carry on or be engaged or
interested in a competing business save solely in respect of
the holding for investment of up to three per cent of any
class of securities quoted or dealt in on a regulated Stock
Exchange. The parties acknowledge that the
46
continued publication and circulation of the Yellow Book in its present
form end at its present frequency of publication will not constitute a
competing business for the purposes of this clause 18. Arrow will be
deemed to be observing the covenant contained in this clause 18.2
notwithstanding one or more incidences of breach, provided there is no
course of action pursued by Arrow or Any member of the Arrow Group which
demonstrates to the reasonable satisfaction of Premier Farnell a
strategic intention on the part of any member of the Arrow Group to
pursue catalogue business.
18.3 The provisions of clause 18.2 are effective from Completion (subject to
clause 25.6) but their continued application is conditional upon:
18.3.1 no challenge being made directly or indirectly by Premier
Farnell or any member of the Premier Farnell Group to the
validity, lawfulness or enforceability of the covenants given
by Premier Farnell in clause 17.2.1 (THE "FARNELL COVENANTS")
either proactively by means of any application to that effect
by Premier Farnell or a member of the Premier Farnell Group to
a Competent Authority or defensively in any legal proceedings
brought by Arrow to enforce the Farnell Covenants; and
18.3.2 Premier Farnell and all members of the Premier Farnell Group
continuing to observe the Farnell Covenants;
and in the event that such a challenge is made or there is a failure by
any member of the Premier Farnell Group substantially to observe the
Farnell Covenants the provisions of clause 18.2 shall forthwith cease
to have effect.
18.4 Notwithstanding the terms of the covenant contained in clause 18.2 it is
hereby agreed and declared that Arrow and any member of the Arrow Group
shall be entitled to acquire (whether directly or indirectly):
18.4.1 the undertaking of any person, firm or company which is
engaged concerned or interested in a competing business
(whether directly or indirectly and whether alone or in
conjunction with or on behalf of any other person and whether
as principal, shareholder, director, employee, consultant or
partner); and or
18.4.2 the shares in any other company which itself or through any
subsidiary undertaking (as defined in Section 258 of the
Companies Act) or associated company (as defined in section
416 of the Taxes Act) carries on or is engaged, concerned or
interested in a competing business (whether directly or
indirectly and whether alone or in conjunction with or on
behalf of any other person and whether as principal,
shareholder, director, employee, consultant or partner);
provided that
(i) the relevant acquisition is not made primarily with a
view to acquiring the competing business; and
47
(ii) the turnover derived from the competing
business is not (by reference to the latest
available audited accounts of the relevant
company or companies) more than 20 per cent
of the consolidated turnover relevant
undertaking or of the relevant company, its
subsidiary undertaking and associated
companies (as defined above) (insofar as
such subsidiary undertaking and associated
companies are comprised in the acquisition)
(as the case may be);
and in such event the covenant contained in clause
18.2 shall not apply to such competing business to
the extent only that such competing business is
carried on at the time of the relevant acquisition.
18.5 Arrow will dispose of any competing business acquired
pursuant to clause 18.4 within two years of
completion of that acquisition unless Premier Farnell
consents to its retention by Arrow (such consent not
to be unreasonably withheld or delayed) (and will not
in the meantime actively seek to expand or grow that
competing business) provided that before entering
into any negotiations with any third party with a
view to making such disposal it shall first give
Premier Farnell the opportunity to make an offer for
the competing business so acquired. If Premier
Farnell does not make any such offer (or if its offer
is not accepted by Arrow) and thereafter Arrow
receives an offer from a third party which it is
inclined to accept, it shall give Premier Farnell the
opportunity to match the offer made by that third
party and if the offer is matched both parties will
endeavour to negotiate satisfactory agreements for
the sale and purchase of that competing business.
18.6 Arrow covenants with Premier Farnell and, as separate
covenants, with each of the Company Vendors and
Business Vendors that neither it nor any member of
the Arrow Group shall at any time disclose or use for
its own benefit or that of any other person any
Premier Farnell Confidential Information which is in
the possession or control of any member of the Arrow
Group.
19. THIRD PARTY CONSENTS AND THE CONTRACTS
19.1.1 Arrow shall and shall procure that each
Business Purchaser hereby undertakes for its
own benefit and at its own expense to adopt,
perform and fulfil all of the Business
Vendors' obligations and liabilities under
the Contracts (whether such obligations and
liabilities arise before, on or after
Completion save such liabilities as fall
within the provisions of clause 16.2.2) in
so far as such Contracts relate to the
Business being acquired by that Business
Purchaser.
19.1.2 Arrow shall indemnify and procure that each
Business Purchaser shall indemnify and keep
indemnified Premier Farnell and each
Business Vendor against all costs, expenses,
claims, demands, proceedings and damages
which it may suffer or incur as a result of
any act, neglect, default or omission on the
part of Arrow or any Business Purchaser to
perform or comply with any obligation under
the Contracts save such as fall within the
provisions of clause 16.2.2.
48
19.2 If any Contracts cannot effectively assigned or transferred by
the relevant Business Vendor to the relevant Business
Purchaser except by agreements of novation or without
obtaining a consent, an approval, a waiver or the like from a
third party ("Consent(s)") such Contracts shall be dealt with
as follows:
19.2.1 unless or until any such Contract is so novated or
any necessary Consent is obtained:
(A) Premier Farnell shall procure that the
relevant Business Vendor shall receive and
hold the benefit of the relevant Contract as
agent for the relevant Business Purchaser
and shall accordingly pay to the relevant
Business Purchaser promptly upon receipt any
sums received by it under any such Contract;
and
(B) Arrow shall procure that the relevant
Business Purchaser shall (at its cost) as
the relevant Business Vendor's agent perform
all the obligations and assume all the
liabilities of that Business Vendor under
any such Contracts;
19.2.2 Premier Farnell shall procure that the relevant
Business Vendor and Arrow shall procure that the
relevant Business Purchaser shall each use its
respective reasonable endeavours to procure that such
Contracts are novated and that any Consents required
to such novation are obtained;
19.2.3 in the event a Contract cannot be novated pursuant to
clause 19.2.2 Premier Farnell shall procure that the
relevant Business Vendor and Arrow shall procure that
the relevant Business Purchaser shall use its
respective reasonable endeavours to procure that such
Contract is assigned and that any Consent required to
such assignment is obtained;
19.2.4 in the event a Contract cannot be assigned pursuant
to clause 19.2.3 Premier Farnell shall procure that
the relevant Business Vendor and Arrow shall procure
that the relevant Business Purchaser shall use their
respective reasonable endeavours to procure that such
Contract be performed by appointing the relevant
Business Purchaser as a sub-contractor and that any
Consent required to such appointment be obtained.
Arrow shall and shall procure that the Business
Purchasers shall enter into such undertakings in
favour of any relevant third party as may be
reasonably requested in respect of any liabilities or
obligations for which such Business Purchaser will
become liable upon transfer, novation or assignment
or which may be a term of its appointment as a
sub-contractor;
19.2.5 if any Contracts are not novated or assigned or any
necessary Consent is not obtained or it has not been
possible to appoint the relevant Business Purchaser
as a sub-contractor and the procedure set out in this
clause 19.2 does not enable the full benefit of any
Contract to be enjoyed by the relevant Business
Purchaser after Completion the parties shall use all
reasonable endeavours to achieve an alternative
solution pursuant to which the relevant Business
Purchaser shall
49
receive the benefit of that Contract and assume the associated
obligations;
19.2.6 if the parties are prohibited by a court order in favour of
the other party to the Contract or proceedings are initiated
by the other party to the Contract in respect of an injunction
(or other similar order) in circumstances where such
proceedings are likely to be successful in each case in
respect of dealing with the Contract in accordance with the
provisions of this clause then, subject always to the
provisions of clause 19.2.5, the benefit and burden of the
Contract shall revert to the Business Vendor and Premier
Farnell shall indemnify Arrow and the relevant Business
Purchaser against any Losses suffered by any of them as a
result of a claim by any other party to the Contract other
than those arising as a consequence of a failure by Arrow or
the relevant Business Purchaser to perform obligations which
Arrow or the relevant Business Purchaser should have performed
prior to such reversion in accordance with the provisions
hereof;
19.2.7 Premier Farnell shall and shall procure that each relevant
Business Vendor shall use all reasonable endeavours to procure
the assignment of the benefit of the Claims to Arrow or the
relevant Business Purchaser and, subject to it being fully
indemnified in respect of costs arising and in respect of any
actual or alleged improper or unlawful conduct of the
proceedings relating to such claim, Premier Farnell will
co-operate with Arrow or the relevant Business Purchaser in
pursuing Claims, including allowing proceedings to be brought
in the name of the relevant Business Vendor if Arrow shall
reasonably require.
19.3 To the extent that Arrow and/or the relevant Business
Purchaser is unable to obtain or maintain insurance in
relation to any Contract until such time as the Contract is
assigned or novated to Arrow and/or the relevant Business
Purchaser, Premier Farnell will on request from Arrow procure
that the insurance cover in place at the date hereof in
respect of such Contracts is maintained and Arrow will
reimburse Premier Farnell or the relevant Business Vendor, as
the case may be for the premiums paid in respect of such
insurance until such time as either the Contract is assigned
or novated to Arrow or the relevant Business Purchaser or the
benefit or burden of the Contracts shall revert to Premier
Farnell or to the relevant Business Vendor.
20. ASSIGNMENT/UNDERLETTING OF FOREIGN LEASEHOLD
PROPERTIES
20.1 In this clause 20, the following definitions are used:
"Best Endeavours" means taking all those steps in the power of the
party on whom the obligation is imposed which a
prudent determined and reasonable owner acting in its
own interest and desiring to achieve the desired
objective would take;
50
"Change of Control Properties" means the four Canadian B List Properties
and the three American B List Properties
brief particulars of which are set out in
Part IV of Schedule 6;
"Consent to Assign" means such consent as is lawfully required
to enable Premier Farnell or the relevant
Business Vendor either to assign the whole
of its interest in each Relevant Property to
the relevant Business Purchaser or for the
relevant Business Purchaser lawfully to
occupy the Relevant Property following a
change of control in the tenant;
"Relevant Property" means such of the properties in Parts III
and IV of Schedule 6 more particularly
described in the Relevant Lease in respect
of which Consent to Assign is required from
a Relevant Landlord;
"Relevant Lease" means the Lease and or other documents dated
and made between the parties specified in
Parts III and IV of Schedule 6;
"Relevant Landlord" means the Landlord of the Relevant Property
or any other party from whom Consent to
Assign or Consent to Underlay is required;
"Security" means:
(i) the deposit of such sum as may be
reasonably required by a Relevant
Landlord as security for the
payment of the rents and other sums
and the observance and performance
of the obligations of the tenant
under a Relevant Lease; or
(ii) a guarantor who is required to
covenant with the Relevant Landlord
to pay the rents and other sums
reserved by and to observe and
perform the obligations of the
tenant contained in the Relevant
Lease in case of default by the
proposed assignee.
20.2 LANDLORD'S CONSENT TO ASSIGN
In respect of each Relevant Property Premier Farnell shall within 20
Business Days of the date of this Agreement make application for, or
where it is not at the date of this Agreement the current tenant of a
Relevant Property, procure
51
that the relevant Business Vendor makes application for Consent to
Assign in respect of each Relevant Property.
20.3 Premier Farnell shall use its Best Endeavours and procure that each
Business Vendor uses it Best Endeavours to obtain Consent to Assign
without it being a condition that Consent to Assign that the relevant
Business Purchaser provide Security for the Relevant Landlord;
20.4 Each relevant Business Purchaser shall at its own expense within 10
Business Days of being requested so to do:
20.4.1 supply to Premier Farnell accounts, references and such other
information as the Relevant Landlord may lawfully and properly
require;
20.4.2 enter into a deed or agreement with the Relevant Landlord in
such form as the Relevant Landlord acting reasonably requires
containing direct covenants by the relevant Business Purchaser
with the Relevant Landlord to pay the rents and other sums
reserved by and to observe and perform the obligations of the
tenant under the Relevant Lease from the date of the
assignment or transfer of control (as the case maybe) to the
relevant Business Purchaser;
20.5 Premier Farnell and each relevant Business Purchaser shall procure that
all deeds, agreements and other documents lawfully and properly
required to procure Consent to Assign are executed and delivered within
10 Business Days of being despatched to them.
20.6 If Premier Farnell and/or any Business Vendor is unable having used its
Best Endeavours to obtain Consent to Assign for any Relevant Property
within 6 months from Completion then Premier Farnell shall thereafter
make application for or procure that the relevant Business Vendor makes
application for Consent to Underlet in respect of any such Relevant
Property.
20.7 Premier Farnell shall notify the relevant Business Purchaser of each
application it shall make for Consent to Underlet and the provisions of
clauses 203 to 20.5 (inclusive) shall apply to each application save
that references to Consent to Assign in those clauses shall be deemed
to be references to Consent to Underlet.
20.8 If Premier Farnell and/or any Business Vendor is unable having used its
Best Endeavours to obtain Consent to Underlet for any Relevant Property
within 9 months of Completion then Premier Farnell shall make a further
application for Consent to Assign and the relevant Business Purchaser
will if required by the Relevant Landlord provide Security and the
provisions of Clauses 20.4 and 20.5 shall apply.
20.9 As from Completion Premier Farnell will hold each Relevant Property on
trust for the Business Purchaser and permit the relevant Business
Purchaser to enter into each Relevant Property as licensee from
Completion and each relevant Business Purchaser shall pay to Premier
Farnell the rents reserved by the
52
Relevant Leases and perform and observe the covenants on the part of
the tenant and the conditions contained in each Relevant Lease and will
at all times indemnify and keep indemnified Premier Farnell or the
relevant Business Vendor and their estate and effects from and against
all proceedings, liabilities, costs, claims and expenses whatsoever
arising out of the non-payment of the rents reserved by the Relevant
Lease or any breaches of the said covenants or conditions arising after
the date of Completion up to and including the date the Business
Purchaser ceases to occupy the Relevant Property.
20.10 Completion of the assignment of each Relevant Property shall take place
on the later of the 10th Business Day following the date on which
Consent to Assign has been obtained or Completion.
20.11 Each Assignment of a Relevant Property shall contain:
20.11.1 an indemnity covenant by the assignee in favour of the
assignor in respect of the future performance of the rents,
covenants, conditions and other matters contained in each
Relevant Lease;
20.11.2 a declaration that any implied statutory covenant shall be
negatived to the extent it would impose a covenant on the part
of the assignor to the effect that the Relevant Property is in
a better state of repair than it as at Completion.
20.12 Each underlease of a Relevant Property shall so far as the
circumstances allow be in the same form and subject to the same rents,
covenants, conditions and other matters as the Relevant Lease.
20.13 Premier Farnell will indemnify the relevant Company Purchaser for all
rents and other liabilities in respect of any Relevant Lease of the
Change of Control Properties if the Relevant Landlord refuses Consent
to Assign and requires the relevant Company Purchaser to vacate any
Change of Control Property from the date the relevant Company Purchaser
ceases to occupy such Change of Control Properties.
20.14 If Consent to Assign and Consent to Underlet is refused or has not
been obtained at the expiration of 12 months from Completion the
relevant Business Purchaser shall be entitled to remain in occupation
of the Relevant Property until such time as it is required to vacate by
the Relevant Landlord such occupation to be on the terms of clause 20.9
above.
20.15 In the event of the relevant Business Purchaser being required to
vacate the French A list property being Xxx xx Xxxxxxxxx Xxxxxxxxxxxxx
XXX Xxxxxx xx x'Xxxxxx 00000 Roncq against its wishes if so required by
the Business Purchaser Premier Farnell will use reasonable endeavours
to assist the Business Purchaser in procuring alternative accommodation
from other properties owned or leased by Premier Farnell in France.
53
20.16
20.16.1 Such of the Business Vendors who are the current tenants of
the premises at Xxxxxxxxxxxxxxxxxx 000 XX-0000 Xxxxxx ("Swiss
Property") and at Xxxxxxxxx 00 XX 0000 Xxxxxx ("Danish
Property") those Business Vendors being hereafter referred to
as the "Swiss Tenant" and the "Danish Tenant" respectively
shall grant and the Business Purchaser of that part of the
Business carried on at the Swiss Property and the Business
Purchaser of the Danish Property shall accept an underlease on
the following terms:
(A) the premises demised by the underlease of the Swiss
Property shall be such part of the Swiss Property
which is at the date of this Agreement occupied by
the Swiss Tenant;
(B) the premises demised by the underlease of the Danish
Property shall be the whole of the Danish Property
which was demised by a lease made between (1)
Ejendomsselskabet Xxxxxxxxx 00-00 K/S and (2) Farnell
Danmark A/S (Farnell Electronic Services A/S)
("Danish Lease");
(C) the yearly rents and other surfs payable for such
part of the Swiss Property to be demised pursuant to
clause 20.6.1(A) shall be such sums as shall bear the
same proportion to the rents and other sums paid by
the Swiss Tenant pursuant to the lease of the Swiss
Property as the area in square metres of the premises
to be demised bears to the total area in square
metres of the Swiss Property;
(D) the yearly rents and other sums payable for the
Danish Property shall be the same as the yearly rents
and other sums payable pursuant to the Danish Lease;
(E) save as otherwise provided in this clause 20.16 the
other terms of the underlease of the Swiss Property
and the Danish Property shall be the same as those
contained in the leases of the Swiss Property and the
Danish Property respectively vested in the Swiss
Tenamt and the Danish Tenant;
(F) the term of the underlease of the Danish Property
shall commence on the date of Completion and expire
on the day preceding the expiry of the term created
by the Danish Lease;
(G) the term of the underlease of that part of the Swiss
Property to be demised pursuant to clause 20.16.1(A)
shall commence on the date of Completion and expire
on the first date on which the lease vested in the
Swiss Tenant can be brought to an end in accordance
with its terms by the Swiss Tenant.
20.16.2 The Danish Tenant and the Swiss Tenant and each relevant
Business Purchaser shall immediately after today's date make
application for and
54
each use their respective Best Endeavours to obtain the consent of the
relevant landlords to the grant of the underleases to be granted
pursuant to this clause 20.16 without a condition of that consent being
that Security is provided to the relevant landlord by the relevant
Business Purchaser.
20.16.3 The underlease of the Danish Property and the Swiss Property shall be
completed on the later of the date of Completion and the date that
falls five Business Days after the necessary consent to the
underletting has been obtained from the Relevant Landlord.
20.16.4 If at Completion the consent of either or both of the Landlords has not
been obtained to the grant of either or both of the underleases to the
Business Purchaser to whom the lease is to be granted such Business
Purchaser shall be entitled to occupy such part of the Swiss Property
as is to be demised pursuant to clause 20.16.1(A) and/or the Danish
Property and in such case the Business Purchaser shall occupy as
licensee and pay to the Swiss Tenant and/or the Danish Tenant (as the
case may be) the yearly rents and other sums calculated in accordance
with clauses 20.16.1(C) and 20.16.1(D) and perform and observe the
covenants on the part of the tenant and the conditions contained in
the lease of the Swiss Property insofar as they relate to such part of
the Swiss Property as is to be demised pursuant to clause 20.16.1(A)
and the lease of the Danish Property (as the case may be) and will at
all times indemnify and keep indemnified the Swiss Tenant and the
Danish Tenant and their respective estate and effects from and against
all proceedings, liabilities, costs and claims and expenses whatsoever
arising out of any breach of such covenants and conditions arising
after the date of Completion.
20.17 Farnell shall procure that notice is served terminating the leases of
the Swiss Property and the leases of the following premises at the
earliest time it is possible so to do in accordance with the terms of
such leases.
DATE PARTIES PREMISES
---- ------- --------
5.8.71 (1) Xxxxxx Xxxxxxxxxx KG Xxxxxxxxxxxxxx 00
00000 Xxxxxxxxx
(2) Standard Electric
20.12.74 Xxxxxx XX
(1) Xxxxxx Xxxxxxxxxx KG Xxxxxxxxxxxxxx 00
00000 Xxxxxxxxx
(2) Standard Electric
Xxxxxx XX
20.18 Simultaneously with the application for consent to underlet the Danish
Tenant shall make application to assign the Danish Property to the
company to whom the underlease had been granted and the provisions of
clauses 20.1 to 20.5 and 20.11 shall apply in relation to such
application as if the Danish Property constituted a Relevant Property.
55
20.19 If the application to assign the Danish Property is granted
the Danish Tenant shall assign the Danish Property to the
relevant Business Purchaser if the Business Purchaser requires
it to do so.
20.20 Completion of the assignment of the Danish Property shall take
place 10 Business Days after the date Consent Assign is
obtained.
21. ACCESS
21.1 For a period of 6 years following Completion, Premier Farnell
shall and shall procure that each other member of the Premier
Farnell Group, give reasonable access to Arrow and its
authorised representatives to inspect all books and records
directly relating to the Companies and/or Businesses which are
not delivered to Arrow or to its order at Completion and (at
the expense of Arrow) to take copies thereof or extracts
therefrom and Premier Farnell shall and shall procure that
each other member of the Premier Farnell Group from time to
time exercise all reasonable care for the safekeeping thereof
and in addition shall permit reasonable access to management
for the purposes of explaining the same at times to be
mutually agreed.
21.2 For a period of 6 years following Completion, Arrow shall and
shall procure that each other member of the Arrow Group give
reasonable access to Premier Farnell and its authorised
representatives to all the books of account and records of the
Companies and/or Businesses delivered to Arrow or to its order
at Completion and (at the expense of Premier Farnell) to take
copies thereof or extracts therefrom and Arrow shall and shall
procure that each other member of the Arrow Group from time to
time exercise all reasonable care for the safekeeping thereof
and in addition shall permit reasonable access to management
for the purposes of explaining the same at times to be
mutually agreed.
21.3 If Completion shall be effected after 31 January 1997, Arrow
shall and shall procure that each Company Purchaser and each
Business Purchaser shall give all reasonable access to Premier
Farnell and its authorized representatives together with all
reasonable facilities and assistance as shall be required (at
Premier Farnell's cost) to prepare appropriate accounts for
the purposes of the preparation of Premier Farnell's
consolidated accounts for the period ending 28 January 1997.
Arrow shall and shall procure that each Company Purchaser and
each Business Purchaser shall ensure that its personnel shall
render such assistance as shall reasonably be required by
Premier Farnell for this purpose.
22. EMPLOYEES
The parties acknowledge and agree that on behalf of themselves and each
of the Business Vendors and Business Purchasers the contracts of
employment between the relevant Business Vendor and the employers
employed by such Business Vendor ("the Relevant Employees") will have
effect after Completion as if originally made between the relevant
Business Purchaser and the Relevant Employees. The transfer of such
contracts of employment will be subject to the remaining provisions of
this clause 22.
56
22.1 Upon or as soon as practicable after the signing of this Agreement,
Premier Farnell and Arrow will procure that the relevant Business
Vendor in conjunction, if practical, with the relevant Business
Purchaser makes an announcement to the Relevant Employees in each
relevant jurisdiction accordance with the applicable local employment
legislation regarding the transfer of their contracts of employment. It
is acknowledged by Arrow on behalf of itself and the Business Purchaser
of the French Business that the French Business Vendor has already
informed the French Employee representatives of the transactions set
out in this Agreement.
22.2 Upon or as soon as practicable after the signing of this Agreement,
Premier Farnell and Arrow will procure that Farnell (Sweden) AB will
make an announcement to its employees in accordance with local
employment legislation regarding the sale of the shares of Farnell
(Sweden) AB and the transfer of the Swedish catalogue business to
Farnell Components AB.
22.3 Save as set out in clauses 22.5 and 22.6, Arrow shall indemnify Premier
Farnell and each relevant Business Vendor in full against:
22.3.1 any action or claim against each relevant Business Vendor in
connection with the termination of the employment of any of
the Relevant Employees by each relevant Business Purchaser
after Completion or in consequence or relating to the transfer
of the contracts of employment of the Relevant Employees to
the relevant Business Purchaser and against any Losses
whatsoever suffered or incurred directly or indirectly in
relation to such action or claim; and
22.3.2 all Losses whatsoever arising directly or indirectly in
connection with the employment of the Relevant Employees after
Completion by the relevant Business Purchaser or any other
person including any claim by any of the Relevant Employees
arising or alleged to arise wholly or partly from any act or
omission of the relevant Business Purchaser; and
22.3.3 any refusal by any of the Relevant Employees to accept the
transfer of their contracts of employment from the relevant
Business Vendor to the relevant Business Purchaser including
any continuing costs and/or Losses whatsoever suffered or
incurred directly or indirectly by the relevant Business
Vendor in relation to such refusal or the termination
thereafter by the relevant Business Vendor of the contracts of
employment of such Relevant Employees.
22.4 Premier Farnell and Arrow acknowledge and agree that in the event of any
claim being made by any employee or union or other employee
representative of Farnell France SARL or Farnell (Sweden) AB that
notification prior to the date hereof has not been made to such employee
or union or employee representative in accordance with the local
employment legislation, each of Premier Farnell and Arrow shall bear 50%
of the costs of any claims, demands, awards, orders, costs, damages,
fines, expenses and liabilities arising Xxx any court or tribunal
proceedings brought on the basis of the notification prior to the date
hereof not being in accordance with local employment legislation by each
of the French Business Purchaser, French Business Xxxxxx,
00
Xxxxxxx (Xxxxxx) AB or Farnell Components AB, Premier Farnell
or Arrow in relation to such action or claim save that neither
Premier Farnell nor Arrow, the French Business Purchaser, the
French Business Vendor, Farnell (Sweden) AB or Farnell
Components AB shall incur any expenses or costs in relation to
such action or claim without having given prior consultation
to Premier Farnell or Arrow as the case may be.
22.5 To the extent that either Premier Farnell or Arrow or the
French Business Vendor or the French Business Purchaser or
Farnell Sweden AB or Farnell Components AB is required to pay
any costs, damages, fines, judgements, expenses, awards,
claims, demands or liabilities in excess of 50% of such costs,
damages, fines, judgements, expenses, awards, claims, demands
or liabilities then Premier Farnell or Arrow as the case may
be shall immediately indemnify the other in full against such
additional payment incurred by the others Group member.
22.6 Premier Farnell hereby agrees to indemnify Arrow in full
against any action or claim against Arrow or Farnell Sweden AB
in connection with the termination of the employment of any of
the employees of the Swedish catalogue business by Farnell
Components AB after the date of the transfer of the contracts
of employment of the catalogue business employees to Farnell
Components AB or in consequence or relating to such transfer
and against all Losses arising directly or indirectly in
connection with the employment of the employees of the Swedish
catalogue business after Completion by Farnell Components AB
or any other person including any claim by the relevant
employees arising or alleged to arise wholly or partly from
any act or omission of Farnell Components AB.
22.7 Arrow expressly acknowledges on behalf of itself and each
Business Purchaser that neither Premier Farnell nor any
Business Vendor has given any warranty or representation that
all the employees of the Business will agree to a transfer to
Arrow or the relevant Business Purchaser or agree to continue
their employment with Arrow or the relevant Business Purchaser
for any period of time after Completion.
23. PENSION ARRANGEMENTS
UK
23.1 The UK Scheme shall be dealt with in accordance with the
provisions of Schedule 7
IRELAND
23.2 It is agreed that all those Employees who are members of the
Irish Scheme at Completion ("Irish Members") will be offered
membership of a pension arrangement operated by the UK
Purchaser ("the Purchaser's Irish Arrangement") (which shall
be approved by the Irish Revenue Commissioners as an exempt
approved scheme) no later than six months from Completion.
58
23.3 During the period between Completion and the time when the
Irish Members are offered membership of the Purchaser's Irish
Arrangement ("the Participation Period") the UK Vendor will
use all reasonable endeavours to procure that, subject to
Irish Revenue Approval, the Irish Members are permitted to
continue to participate in the Irish Scheme.
23.4 During the Participation Period the UK Purchaser will make
contributions to the Irish Scheme in accordance with the rate
recommended by the actuarial valuation of the Irish Scheme
prevailing from time to time.
23.5 In respect of each Irish Member who chooses to transfer
benefits from the Irish Scheme to the Purchaser's Irish
Arrangement referred to above a past service reserve transfer
value will be transferred to the Purchaser's Irish Arrangement
calculated at Completion using the actuarial assumptions
prevailing in the actuarial valuation of the Irish Scheme at
Completion, together with the value of the contributions paid
by or in respect of such Irish Members during the
Participation Period, the total amount to be agreed between
the UK Purchaser's actuary and the UK Vendor's actuary within
two months and transferred together with interest (at the rate
of 2% above the base rate of the Allied Irish Bank from time
to time) in respect of the period from the end of the
Participation Period to the date of payment, no later than
one year after Completion (or such later date as the UK
Purchaser and the UK Vendor agree).
23.6 If there is any deficiency in the payment referred to in
clause 23.5, the amount of this deficiency will be paid by the
UK Vendor to the UK Purchaser forthwith, and in any event no
later Plan one year and 30 days after Completion.
23.7 The UK Vendor will use all reasonable endeavours to procure
that any additional voluntary contributions held by the
trustees of the Irish Scheme in respect of any Irish Member
who transfers to the Purchaser's Irish Arrangement will be
transferred with the amount referred to in clause 23.5.
23.8 In default of agreement as above, either party may refer the
matter to an independent actuary, such appointment to be
agreed by the other party. The decision of the independent
actuary will be binding on both parties.
SWEDEN
23.9 In respect of the Employees of the Swedish Company who under
the Swedish Agreement are transferring to the Swedish
catalogue business Premier Farnell agrees to assume all
obligations and liabilities in respect of future pension
arrangements.
24. ANNOUNCEMENTS
Neither party to this Agreement shall make, or procure or permit the
making of, any announcement whether before or after Completion with
respect to this Agreement or any of the Transfer Agreements or any
ancillary matter without (in the case of an announcement by any member
of the Premier Farnell Group) the prior consent of
59
either of Xx. X. Xxxxxxx or Xx. X. Xxxxxxx and (in the case of any
member of the Arrow Group) the prior consent of either of Xx. X.
Xxxxxxx or Xx. X. Xxxxxx, except as required by law or regulatory
authority or applicable stock exchange and in such case, not without
prior consultation with Arrow or Premier Farnell (as the case may be)
and having had due regard to all reasonable requests which such party
may make.
25. MISCELLANEOUS
25.1 Subject to clause 3.7, neither party may assign its rights
under this Agreement. This Agreement shall be binding on and
inure for the benefit of the parties' successors.
25.2 This Agreement, together with the documents in the agreed
terms, represents the entire understanding, and constitutes
the whole agreement, in relation to its subject matter and
supersedes any previous agreement between the parties with
respect thereto and without prejudice to the generality of the
foregoing excludes any warranty, condition or other
undertaking implied at law or by custom (to the fullest extent
permitted by law).
25.3 Each party confirms that, except as provided in this Agreement
and, without prejudice to any liability for fraudulent
misrepresentation, no party has relied on any representation
or warranty or undertaking which is not contained in this
Agreement or any document referred to in it or which was made
by any other party who is not a party to this Agreement.
25.4 So far as it remains to be performed, this Agreement shall
continue in full force and effect notwithstanding Completion.
25.5 Premier Farnell and Arrow shall each and shall procure that
each other member of the Premier Farnell Group or the Arrow
Group, as the case may be, shall after Completion execute all
such deeds and documents and do all such things as Arrow or
Premier Farnell, as the case may be, may reasonably require
for perfecting the transaction intended to be effected under
or pursuant to this Agreement and each of the Transfer
Agreements.
25.6 To the extent that any provision of this Agreement, or of any
other arrangement of which it forms part, is a restriction or
information provision for the purposes of the RTPA by virtue
of which this Agreement or any such arrangement is registrable
under the RTPA, no such restriction or provision shall take
effect until the day after particulars of this Agreement or,
as the case may be, that arrangement, have been furnished to
the Director General of Fair Trading in accordance with the
RTPA. The parties shall co-operate fully in furnishing
particulars of any registrable agreement, as soon as
practicable after the date hereof, to the Director General of
Fair Trading. The parties shall prepare any filings to the
Director General on a joint basis and shall forward copies to
each other of all correspondence received from the Office of
Fair Trading in relation thereto.
25.7 Arrow and each member of the Arrow Group on its part and
Premier Farnell and each member of the Retained Premier
Farnell Group on its part acknowledges that the purpose of the
Transfer Agreements is to reflect and
60
implement the provisions of this Agreement and accordingly
Arrow and each member of the Arrow Group on its part and
Premier Farnell and each member of the Retained Premier
Farnell Group on its part acknowledges that it shall not be
entitled to claim for any Losses arising as a consequence of
the Transfer Agreements which would not have arisen under this
Agreement and, to the extent that any member of the Arrow
Group or any member of the Retained Premier Farnell Group from
time to time makes a claim pursuant to or reliant upon the
Transfer Agreements for in excess of that which would be
recoverable under this Agreement, Arrow or Premier Farnell (as
the case may be) agrees to indemnify the relevant member of
the Retained Premier Farnell Group or the relevant member of
the Arrow Group (as the case may be) in respect of all Losses
incurred in relation to such claim. In addition, in the event
that a member of the Retained Premier Farnell Group or a
member of the Arrow Group incurs a liability under one of the
Transfer Agreements which it would not have incurred had the
relevant Transfer Agreement expressly provided that in the
event of any inconsistency between the relevant Transfer
Agreement and this Agreement, this Agreement prevails, Arrow
or Premier Farnell (as the case may be) agrees to indemnify
the relevant members of the Retained Premier Farnell Group or
the relevant member of the Arrow Group (as the case may be)
against such liability.
25.8 With the agreement of Arrow, Premier Farnell has agreed the
senior management completion bonuses referred to in the last
sub-paragraph of paragraph 16.33 of the Disclosure Letter and
the copy documentation contained in part M of Annex 3 to the
Disclosure Letter, Item 11. The payments of Messrs. Burgess,
Baggio, Norton and Xxxxxxx will either be home by:
25.8.1 Premier Farnell; or
25.8.2 the Farnell Volume Business in which case the amount
thereof shall be reflected in the Net Operating Asset
Value to the extent that the same have not been paid
at the Transfer Date.
25.9 The payments referred to in paragraph 16.33 of the Disclosure
Letter other than those for Messrs Burgess, Baggio, Norton and
Xxxxxxx will be borne equally by Premier Farnell and Arrow.
Accordingly:
25.9.1 if Premier Farnell effects such payments Arrow will
reimburse it for one half thereof;
25.9.2 if payments are made by the Farnell Volume Business
prior to the Transfer Date then one half of the
amount thereof shall be treated as an asset for the
purpose of determining the Net Operating Asset Value;
or
25.9.3 if payments are not made prior to the Transfer Date
and are to be paid by the Farnell Volume Business
then only 50% of the costs thereof will be included
as a liability in the Net Operating Asset Value and
the liability will then be assumed by the relevant
Company or the relevant Business Purchaser as part of
the Farnell Volume Business.
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25.10 Arrow shall at or as soon as practicable after Completion use
its reasonable endeavours to secure the release of each member
of the Retained Premier Farnell Group from all payment
guarantees, guarantees to suppliers, performance bonds or
similar obligations which they have given or to which they are
subject in respect of the Farnell Volume Business and to the
extent that any liabilities arise in connection with any of
them after the Transfer Date Arrow shall indemnify the
relevant member of the Retained Premier Farnell Group in
respect of any loss arising in respect of such guarantees,
bonds or obligations
25.11 Premier Farnell shall procure as soon as reasonably
practicable the release of Premier Farnell Electronic Services
Limited from:
25.11.1 the guarantee given by it pursuant to the terms of a
credit agreement dated 23 January 1996 made between
Premier Farnell and FAC Delaware Corp. as borrowers,
Natwest Markets Acquisition Finance as arranger,
National Westminster Bank plc as bank and National
Westminster Bank plc as agent; and
25.11.2 the guarantee given by it pursuant to the terms of a
note purchase agreement dated 17 June 1996 issued by
Premier Farnell Corp. as issuer and Premier Farnell
as guarantor whereby Premier Farnell Corp. authorised
the issue and sale of certain guaranteed senior
notes.
25.12 Each party agrees with the other that to the extent that a
judgment for costs is obtained in relation to this Agreement
or the matters contemplated by it which does not provide the
party in whose favour the judgment is made (the "FAVOURED
PARTY") with a full recovery of all legal costs and other
associated expenses the other party shall indemnify the
Favoured Party for the balance of all such costs and expenses
incurred.
26. VALUE ADDED TAX
26.1 All amounts due from Arrow (or the relevant Business
Purchaser or Company Purchaser) to Premier Farnell or the
relevant Business Vendor or Company Vendor in accordance with
clause 5 above or pursuant to or in connection with any other
provision of this Agreement shall be exclusive of any
applicable VAT.
26.2 If VAT is payable in connection with any supply made pursuant
to or in connection with this Agreement, Premier Farnell shall
procure that an appropriate VAT invoice is issued to the
relevant person and on production of that invoice Arrow (on
behalf of the relevant person) shall pay to Premier Farnell
(on behalf of the relevant person) any VAT due in respect of
the supply. Such payments shall be treated as additional
Purchase Price where appropriate.
26.3 Subject to clauses 26.4, 26.5 and 26.6, each of Arrow and
Premier Farnell intend that the sales of the Businesses and
the Companies shall be outside the charge to VAT on the basis
of applicable reliefs and exemptions and Arrow and Premier
Farnell shall use their reasonable endeavours to secure this
62
treatment (including, for the avoidance of doubt, making all
applicable necessary registrations, elections and notices).
26.4 Arrow represents, warrants and undertakes to Premier Farnell
that it will procure that:
26.4.1 in relation to each Business, the Business Purchaser
will be duly and properly registered with effect from
the Completion for the purposes of VAT in the
jurisdiction where the Business is carried on; and
26.4.2 the Business Purchaser will from Completion use the
Business Assets in carrying on the same kind of
business as the Business Vendor.
26.5 The sale by the French Business Vendor of certain assets of
the Farnell Volume Business is subject to VAT and such VAT
shall be paid in accordance with clause 26.2.
26.6 Nothing in clause 26.3 shall require Premier Farnell or any
member of the Premier Farnell Group to request a review or
appeal any determination of any revenue authority. If after
payment of Any VAT by Arrow pursuant to clause 26.2 Arrow
wishes to dispute the VAT treatment with the appropriate
revenue authority Premier Farnell shall, at Arrow's cost and
expense, give such assistance as Arrow may reasonably require.
26.7 All VAT records relating to any Business which are required by
applicable VAT law to be delivered to any Business Purchaser
shall be delivered to Arrow or the relevant Business Purchaser
on Completion and Arrow shall procure that the relevant
Business Purchaser shall retain and preserve those records for
any applicable time period required by the applicable VAT law
and give reasonable access on receiving reasonable notice to
Premier Farnell to such records that are reasonably required
by Premier Farnell or any member of the Retained Premier
Farnell Group to comply with its VAT obligations.
27. COSTS
27.1 Save as expressly provided in the Transfer Agreements or in
sub-clause 27.2, each of Arrow and Premier Farnell shall pay
its own costs in connection with the preparation and
negotiation of this Agreement, the Transfer Agreements and any
matter contemplated by any of them.
27.2 Arrow agrees to pay stamp duty costs arising in connection
with the transfer of the UK Shares pursuant to this Agreement
together with any transfer or registration taxes or fees
applicable to the transfer of the French Business.
28. GUARANTEE BY PREMIER FARNELL
28.1 Premier Farnell hereby unconditionally and irrevocably
guarantees to Arrow and, as separate guarantees to each of the
Company Purchasers and Business Purchases, the due and
punctual performance and observance by each of the Company
Vendors and Business Vendors of all their obligations,
commitments, undertakings, warranties and indemnities under or
pursuant to this Agreement, as the same may be varied from
time to time in accordance
63
with the provisions hereof, each of the Transfer Agreements
and the Swedish Agreement (in this clause 28.1, the
"Guaranteed Obligations") so as to ensure that the same
benefits shall be conferred on Arrow and the relevant Company
Purchaser or Business Purchaser as either of them would have
received if the Guaranteed Obligations had been duly performed
and satisfied by the relevant Company Vendor or Business
Vendor. For the avoidance of doubt, Arrow may claim against
Premier Farnell, or against the relevant Company Vendor or
Business Vendor and Premier Farnell jointly, without having to
first make a successful claim against the relevant Company
Vendor or Business Vendor. The liability of Premier Farnell
under this clause 28 shall not be released or diminished by
any variation of the terms of this Agreement or of any
Transfer Agreement (whether or not agreed by Premier Farnell),
or, save as expressly provided in this Agreement, any
forbearance, neglect or delay in seeking performance of the
Guaranteed Obligations or any granting of time for such
performance.
28.2 If and whenever any Company Vendor or Business Vendor defaults
for any reason whatsoever in the performance of any of its
Guaranteed Obligations, Premier Farnell shall forthwith upon
written demand perform (or procure performance of) and satisfy
(or procure the satisfaction of) the Guaranteed Obligations in
regard to which such default has been made in the manner
prescribed by this Agreement or the Swedish Agreement or the
Transfer Agreements.
(A) This guarantee is to be a continuing guarantee and
accordingly is to remain in force until all the
Guaranteed Obligations shall have been performed or
satisfied.
(B) This guarantee is in addition to and without
prejudice to and not in substitution for any rights
or security which Arrow or any Company Purchaser or
Business Purchaser may now or hereafter have or hold
for the performance and observance of the Guaranteed
Obligations.
28.3 As a separate and independent stipulation, Premier Farnell
agrees that any of the Guaranteed Obligations (including,
without limitation, the obligation to pay any moneys expressed
to be payable under this Agreement or any Transfer Agreement)
which may not be enforceable against or recoverable from the
relevant Company Vendor or Business Vendor by reason of any
legal limitation, disability or incapacity on or of the
relevant Company Vendor or Business Vendor or any other fact
or circumstance (other than any limitation imposed by this
Agreement or any Transfer Agreement) shall nevertheless be
enforceable against and recoverable from Premier Farnell as
though the same has been incurred by Premier Farnell and
Premier Farnell were the sole or principal obligor in respect
thereof and shall be performed or paid by Premier Farnell on
demand.
28.4 Without prejudice to the provisions of clause 28.3, the
liability of Premier Farnell under this clause 28 in respect
of any obligation or liability of a Company Vendor or Business
Vendor shall not exceed the liability of the relevant Company
Vendor or Business Xxxxxx.
00
00. GUARANTEE BY ARROW
29.1 Arrow hereby unconditionally and irrevocably guarantees to
Premier Farnell and, as separate guarantees to each of the
Company Vendors and Business Vendors, the due and punctual
performance and observance by each of the Company Purchasers
and Business Purchasers of all their obligations, commitments,
undertakings, warranties and indemnities under or pursuant to
this Agreement, as the same may be varied from time to time in
accordance with the provisions hereof, each of the Transfer
Agreements and the Swedish Agreement (in this clause 29, the
"Guaranteed Obligations") that the same benefits shall be
conferred on Premier Farnell and the relevant Company Vendor
or Business Vendor as either of them would have received if
the Guaranteed Obligations had been duly performed and
satisfied by the relevant Company Purchaser or Business
Purchaser. For the avoidance of doubt, Premier Farnell may
claim against Arrow, or against the relevant Company Purchaser
or Business Purchaser and Arrow jointly without having to
first make a successful claim against the relevant Company
Purchaser or Business Purchaser. The liability of Arrow under
this clause 29 shall not be released or diminished by any
variation of the terms of this Agreement or of any Transfer
Agreement (whether or not agreed by Arrow), or, save as
expressly provided in this Agreement, any forbearance, neglect
or delay in seeking performance of the Guaranteed Obligations
or any granting of time for such performance.
29.2 If and whenever any Company Purchaser or Business Purchaser
defaults for any reason whatsoever in the performance of any
of its Guaranteed Obligations, Arrow shall forthwith upon
written demand from Premier Farnell perform (or procure
performance of) and satisfy (or procure the satisfaction of)
the Guaranteed Obligations in regard to which such default has
been made in the manner prescribed by this Agreement or the
Swedish Agreement or the Transfer Agreement.
(A) This guarantee is to be a continuing guarantee and
accordingly is to remain in force until all the
Guaranteed Obligations shall have been performed or
satisfied.
(B) This guarantee is in addition to and without
prejudice to and not in substitution for any rights
or security which Premier Farnell or any Company
Vendor or Business Vendor may now or hereafter have
or hold for the performance and observance of the
Guaranteed Obligations.
29.3 As a separate and independent stipulation, Arrow agrees that
any of the Guaranteed Obligations (including, without
limitation, the obligation to pay any moneys expressed to be
payable under this Agreement or any Transfer Agreement) which
may not be enforceable against or recoverable from the
Relevant Company Purchaser or Business Purchaser by reason of
any legal limitation, disability or incapacity on or of the
relevant Company Purchaser or Business Purchaser or any other
fact or circumstance (other than any limitation imposed by
this Agreement or any Transfer Agreement) shall nevertheless
be enforceable against and recoverable from Arrow as though
the same had been
65
incurred by Arrow and Arrow were the sole or principal obligor
in respect thereof and shall be performed or paid by Arrow on
demand.
29.4 Without prejudice to the provisions of clause 29.3, the
liability of Arrow under this clause 29 in respect of any
obligation or liability of a Company Purchaser or a Business
Purchaser shall not exceed the liability of the relevant
Company Purchaser or Business Purchaser.
30. NOTICES
30.1 A notice, approval, consent or other communication in
connection with this Agreement:
30.1.1 must be in writing;
30.1.2 in the case of Arrow must be marked for the attention
of Xxxxxx X. Xxxxxxx, Executive Vice President at the
address set forth on page 1 of this Agreement, Fax
No. (000) 000-0000;
30.1.3 in the case of Premier Farnell must be marked for the
attention of the Finance Director and the Company
Secretary at the address set forth on page 1 of this
Agreement, Fax No. (01937) 580070; and
30.1.4 in each case must be left at the address specified
above or sent by prepaid first class post to such
address or sent by facsimile to the facsimile number
of the addressee which is specified in this clause or
if the addressee notifies another address or
facsimile number in writing (citing this Agreement)
then to that address or telex or facsimile number.
30.2 A notice, approval, consent or other communication shall take
effect from the time it is received (or, if earlier, the time
it is deemed to be received in accordance with clause 30.3)
unless a later time is specified in it.
30.3 A letter or facsimile is deemed to be received:
30.3.1 in the case of a posted letter, unless actually
received earlier, on the second (fifth, if sent
airmail from overseas) Business Day after posting;
30.3.2 in the case of facsimile, on production of a
transmission report from the machine from which the
facsimile was sent which indicates that the facsimile
was sent in its entirety to the facsimile number of
the recipient.
31. GOVERNING LAW AND JURISDICTION
31.1 This Agreement and the documents to be entered into pursuant
to it shall, save as expressly referred to therein, be
governed by, and construed in accordance with, English law.
31.2 Each party irrevocably agrees that the Courts of England shall
have exclusive jurisdiction in relation to any claim, dispute
or difference concerning this Agreement and such documents and
any matter arising therefrom (save in
66
circumstances where any legal restriction or qualification
exists to hinder a claim being made, or judgment or judicial
order being enforced in the Courts of England in which case
the Courts of England shall have non-exclusive jurisdiction).
31.3 Each party irrevocably waives any right that it may have to
object to an action being brought in those Courts, to claim
that the action has been brought in an inconvenient forum, or
to claim that those Courts do not have jurisdiction.
31.4 Premier Farnell irrevocably agrees that without preventing any
other mode of service, any document in an action (including,
but not limited to, any writ of summons or other originating
process or any third or other party notice) may be served on
Premier Farnell by being delivered to or left for Premier
Farnell at its address for service of notices under clause 30
and Premier Farnell undertakes to maintain such an address at
all times in the United Kingdom and to notify Arrow in advance
of any change from time to time of the details of such address
in accordance with the manner prescribed for service of
notices under clause 30.
31.5 Arrow irrevocably agrees that without preventing any other
mode of service, any document in action (including, but not
limited to, any writ, summons, order, judgment or other
process or any third or other party notice) may be
sufficiently and effectively served on it by service on its
agent appointed in this clause 31.5. Arrow hereby irrevocably
appoints Arrow (UK) Limited as its agent for service of
process.
31.6 Nothing in this clause 31 shall affect the right of either
party to serve process in any other manner permitted by law.
Arrow hereby irrevocably waives (and irrevocably agrees not to
raise) any right it would have under any federal or state law
in the United States of America to resist the recognition of
any judgment obtained by Premier Farnell relating to this
Agreement in any proceedings in the United Kingdom on the
basis that it did not receive due notice of the proceedings
(provided that it received notice in accordance with clause
31.5) or that any such related proceedings were brought in an
inconvenient forum. Each party irrevocably agrees that a
judgment obtained requiring the payment of money or specific
performances in any proceedings in the United Kingdom shall,
subject to all rights of appeal available to it in the Courts
of England, be conclusive and binding on it and may be
enforced in the courts of any other jurisdiction.
67
IN WITNESS of which the parties have executed this Agreement as at the date
first mentioned above.
SIGNED as a DEED by
PREMIER FARNELL PLC
acting by
a director and its secretary
Director /s/ Xxxxxx Xxxxxxx
------------------------------------
Name (in block letters) Xxxxxx Xxxxxxx
---------------------
Secretary /s/ Xxxxxxx Xxxxxx
------------------------------------
Name (in block letters) Xxxxxxx Xxxxxx
---------------------
SIGNED as a DEED by
ARROW ELECTRONICS, INC.
acting by /s/ Xxxxxx X. Xxxxxxx
---------------------
duly authorized
Name (in block letters) Xxxxxx X. Xxxxxxx
---------------------
Executive Vice
President
