AGREEMENT FOR THE SALE AND PURCHASE OF PART OF THE ISSUED SHARE CAPITAL OF BROOKHOUSE HOLDINGS LIMITED
Exhibit
2.1
Dated
12 June 2008
(1)
|
XXXXXXX
XXXXXXX AND OTHER
|
(2)
|
ABERDEEN
XXXXXX XXXXXXXXX PRIVATE EQUITY FUND A AND OTHERS
|
(3)
|
BARCLAYS
BANK PLC
|
(4)
|
KAMAN
UK HOLDINGS LIMITED
|
AGREEMENT
FOR THE SALE AND PURCHASE OF PART OF THE ISSUED SHARE CAPITAL OF
BROOKHOUSE HOLDINGS LIMITED
|
CONTENTS
1
|
Definitions
and interpretation
|
1
|
2
|
Sale
and purchase
|
9
|
3
|
Consideration
|
9
|
4
|
Completion
|
10
|
5
|
Warranties
|
10
|
6
|
Tax
|
12
|
7
|
Restrictive
covenants
|
12
|
8
|
Confidential
Information
|
13
|
9
|
Further
Undertakings
|
13
|
10
|
Institutional
Sellers
|
14
|
11
|
Escrow
Arrangements
|
14
|
12
|
Locked
Box Undertaking
|
17
|
13
|
Specific
Indemnities
|
18
|
14
|
Announcements
|
19
|
15
|
Assignment
|
19
|
16
|
Third
party rights
|
20
|
17
|
Entire
Agreement
|
20
|
18
|
Notices
|
21
|
19
|
Representatives
|
21
|
20
|
General
|
22
|
21
|
Further
Assurance
|
22
|
22
|
Governing
law and jurisdiction
|
23
|
Schedule
1 - The Sellers
|
24
|
|
Schedule
2 – The Group
|
27
|
|
Schedule
3 - Completion
|
33
|
|
Schedule
4 – Warranties
|
36
|
|
Schedule
5 – Limitations on the Sellers' liability
|
52
|
|
Schedule
6 – Tax
|
57
|
|
Schedule
7 – Properties
|
78
|
|
Schedule
8 – Intellectual Property
|
96
|
|
Schedule
9 – Balance Sheet
|
85
|
|
Schedule
10 – Locked Box
|
99
|
|
Schedule
11 – Buyer's Knowledge
|
101
|
|
Schedule
12 – Loan Note Holders
|
103
|
Agreed Form
Documents
Disclosure
Letter and Disclosure Documents
Letters
of resignation (officers)
Letter
of resignation (auditors)
Schedule
of title deeds
Xxxx
Xxxxxxxx Deed of Covenant
AAM
Deed of Covenant
Retention
Account Instruction Letter
THIS
AGREEMENT is made on 12 June 2008
BETWEEN:
(1)
|
THE
PERSONS whose names and addresses are set out in part A of schedule
1 (the "Principal
Shareholders");
|
(2)
|
THE
PERSONS whose names and addresses are set out in part B of schedule
1 (the "Institutional
Sellers");
|
(3)
|
BARCLAYS
BANK PLC a company registered in England and Wales (company number
1026167) whose registered office is at 0 Xxxxxxxxx Xxxxx, Xxxxxx X00 0XX
("Barclays");
and
|
(4)
|
KAMAN
UK HOLDINGS LIMITED a company registered in England and Wales
(company number 6612893), whose registered office is at Skadden, Arps,
Slate, Xxxxxxx & Xxxx (UK) LLP, 00 Xxxx Xxxxxx, Xxxxxx Xxxxx, Xxxxxx
X00 0XX (the "Buyer").
|
IT
IS AGREED as follows:
|
|||
1
|
Definitions and
interpretation
|
||
1.1
|
In
this agreement, including the schedules, the following words and
expressions have the following meanings unless the context otherwise
requires:
|
||
"AAM
Funds"
|
|||
the
Institutional Sellers other than Xxxxx Xxxxxx and Xxxxx
Xxxxxx;
|
|||
"Accounts"
|
|||
the
audited consolidated annual accounts of the Company for the accounting
reference period ended on the Accounts Date, comprising a balance sheet,
and a profit and loss account and cash flow statement, including the notes
thereon and the associated directors' and auditors'
reports;
|
|||
"Accounts
Date"
|
|||
30
September 2007;
|
|||
"ATG
(2000)"
|
|||
ATG
(2000) Limited (company number 3872101);
|
|||
"Balance
Sheet"
|
|||
the
consolidated balance sheet of the Company as at the Balance Sheet Date
attached hereto as schedule 9;
|
|||
"Balance Sheet
Date"
|
|||
30
April 2008;
|
|||
"Bank
Indebtedness"
|
|||
(i)
|
the
sum of £3,094,445.61, being the total indebtedness owed to Barclays Bank
plc at the Completion Date in respect of the repayment of the credit
facilities agreement dated 14 April 2004 (as amended);
and
|
||
(ii)
|
the
sum of £1,775,492.27, being the total indebtedness owed to Barclays
Mercantile Business Finance Limited at the Completion Date in respect of
the repayment of the asset facilities agreement;
|
||
"Bank
Warrants"
|
|||
the
warrants granted to Barclays Bank Plc pursuant to a deed poll entered into
by the Company and dated 14 April
2004;
|
1
"Boeing Asset
Facility"
|
||||||
the
asset finance facility provided by Barclays Mercantile Business Finance
Limited pursuant to the agreement set out at document B.2.1 of the Data
Room;
|
||||||
"Bonus"
|
||||||
(i)
|
the
sum of £1,000,000 being the amount of the discretionary exit bonus to be
paid (subject to the deduction of income tax and employees national
insurance under PAYE) by the Company to the persons set out below in the
amounts set out against their respective names:
|
|||||
Xxxxxxx
Xxxxxxx
|
£419,000
|
|||||
|
Xxx
Xxxxxx
|
£342,000 | ||||
|
Xxxxx
Xxxxxxx
|
£209,000
|
||||
Xxx Xxxxxxxxxxx | £30,000 | |||||
|
|
|||||
(ii)
|
the
sum of £208,358 being the amount of the general bonus and the
discretionary exit bonus to be paid (subject to the deduction of income
tax and employees national insurance under PAYE) by the Company to the
persons and in the amounts listed in Annexure A;
|
|||||
"Business
Day"
|
||||||
a
day other than a Saturday or Sunday or public holiday in England and
Wales;
|
||||||
"Buyer's
Group"
|
||||||
the
Buyer, its holding companies (direct or indirect), its subsidiaries and
any subsidiary of any holding company;
|
||||||
"Buyer's
Solicitors"
|
||||||
Skadden,
Arps, Slate, Xxxxxxx & Xxxx (UK) LLP of 00 Xxxx Xxxxxx, Xxxxxx Xxxxx,
Xxxxxx, X00 0XX;
|
||||||
"Buyer's Property
Solicitors"
|
||||||
Shoosmiths
of Xxxxxxxxxx Xxxxx, Xxxxxxxxxx Xxxxx, 00 Xxxxxxx Xxxxxx, Xxxxxxxxxx XX0
0XX;
|
||||||
"CA1985"
|
||||||
the
Companies Xxx 0000;
|
||||||
"CA2006"
|
||||||
the
Companies Xxx 0000;
|
||||||
"Claim"
|
||||||
a
claim by the Buyer involving or relating to a breach of any of the
Warranties;
|
||||||
"Companies
Acts"
|
||||||
CA1985
and CA2006 together, as in force from time to time;
|
||||||
"Company"
|
||||||
Brookhouse
Holdings Limited details of which are set out in part 1 of schedule
2;
|
||||||
"Company Intellectual
Property"
|
||||||
(a)
|
the
Company Trade Marks and the goodwill associated with each or any of
them;
|
|||||
(b)
|
the
Confidential Information; and
|
|||||
(c)
|
all
other Intellectual Property which is owned by a Group Company at the date
of this agreement, including those items set out in schedule
8;
|
2
"Company Trade
Marks"
|
|||
the
Trade Marks which are owned by a Group Company, including the Domain Names
listed in schedule 8;
|
|||
"Completion"
|
|||
completion
of the sale and purchase of the Shares in accordance with this
agreement;
|
|||
"Completion
Date"
|
|||
the
date on which Completion occurs in accordance with this
agreement;
|
|||
"Confidential
Information"
|
|||
all
trade secrets, data, know how and other such information (in whatever form
held including written, oral, visual and electronic) which is for the time
being not publicly known which is owned by a Group Company and used in, or
otherwise relates to, any part of the Group's business;
|
|||
"Consideration"
|
|||
£29,650,742
being the total consideration payable by the Buyer to the Sellers for the
sale of the Shares in accordance with this agreement;
|
|||
"Data
Room"
|
|||
the
contents of the online data room in relation to the Transaction as
contained on the CD's, a copy of which has been provided to the Buyer's
Solicitors prior to the date of this agreement;
|
|||
"Director"
|
|||
any
person holding the office of director or other office in any Group
Company;
|
|||
"Disclosure
Documents"
|
|||
the
two identical bundles of documents (as listed in the schedule to the
Disclosure Letter) in the agreed form;
|
|||
"Disclosure
Letter"
|
|||
the
letter in the agreed form from the Principal Shareholders to the Buyer in
relation to the Warranties having the same date as this
agreement;
|
|||
"Domain
Names"
|
|||
the
domain names listed in schedule 8;
|
|||
"Employee"
|
|||
any
person employed by any Group Company under a contract of
employment;
|
|||
"Encumbrance"
|
|||
a
lien, pledge, encumbrance, charge (fixed or floating), mortgage, pledge,
third party claim, debenture, option, right of pre-emption, right to
acquire, assignment by way of security, trust arrangement for the purpose
of providing security or security interests of any kind, including
retention arrangements or other encumbrances and any legally binding
agreement to create any of the foregoing;
|
|||
"Environment"
|
|||
the
natural and man-made environment, including all or any of the following
media, namely air, water and land (including air within buildings and
other material or man-made structures above or below the ground) and any
living organisms (including man) or systems supported by those
media;
|
|||
"Environmental
Law"
|
|||
all
statutes, subordinate legislation, regulations, codes of practice, and the
like (in each case having the force of law) concerning the protection of
human health or welfare or the Environment or the conditions of the work
place or effecting the immediate or
|
|||
3
surrounding
property or the use, generation, transportation, storage, treatment or
disposal of Hazardous Items;
|
|||
"Escrow
Account"
|
|||
the
deposit account to be opened in the joint names of the Buyer's Solicitors
and the Sellers' Solicitors on or about Completion with The Royal Bank of
Scotland plc;
|
|||
"Escrow
Agreement"
|
|||
the
agreement in the agreed form to be entered into on Completion by the
Buyer, the Managers' Representative, the Institutions' Representative, the
Buyer's Solicitors and the Sellers' Solicitors;
|
|||
"Escrow
Amount"
|
|||
the
sum of £2,500,000;
|
|||
"Expert"
|
|||
has
the meaning given to it in clause 11.8;
|
|||
"fairly
disclosed"
|
|||
has
the meaning given to it in clause 5.6;
|
|||
"First Payment
Date"
|
|||
the
date falling 12 months after Completion and if such date is not a Business
Day, the next following Business Day;
|
|||
"General
Warranties"
|
|||
the
warranties set out in part B of schedule 4;
|
|||
"Group"
|
|||
the
Company and each Subsidiary and "Group Company" shall
mean any of the Company or the Subsidiaries;
|
|||
"Hazardous
Items"
|
|||
any
waste of any kind, noise, vibration, smell, fumes, smoke, soot, ash, dust,
grit, pollution, chemicals, leachate, petroleum products, noxious,
radioactive, inflammable, explosive, dangerous or offensive gases or
materials and any other substances of whatever nature which could cause
harm to the health of living organisms or the Environment or to public
health or welfare;
|
|||
"Health and Safety
Law"
|
|||
all
statutes, subordinate legislation, regulations, codes of practice, and the
like (in each case having the effect of law) concerning the protection of
human health or safety or welfare or the conditions of the work place or
affecting the surrounding areas of the property or use, generation,
transportation, storage, treatment or disposal of Hazardous
Items;
|
|||
"Indebtedness
Amount"
|
|||
an
amount equal to the aggregate of the Bank Indebtedness and the Loan Note
Indebtedness;
|
|||
"Indemnity
Claim"
|
|||
a
claim made by the Buyer under the provisions of clause 13 (Specific
Indemnities);
|
|||
"Information
Technology"
|
|||
all
computer systems (including software and hardware) owned by or licensed to
a Group Company;
|
4
"Institutions'
Representative"
|
||||
the
person appointed to act as Institutions' Representative for the purposes
of this agreement in accordance with clause 19.4 or clause
19.6;
|
||||
"Intellectual
Property"
|
||||
all
intellectual property rights, including:
|
||||
(a)
|
patents,
Trade Marks, copyright, rights in designs, rights in inventions, database
rights and topography rights (whether or not
registered);
|
|||
(b)
|
applications
for any of the rights in (a) above, together with the right to apply for
registration of such rights;
|
|||
(c)
|
know-how,
trade secrets, confidential information, technical information, customer
and supplier lists and any other proprietary knowledge and/or information
of whatever nature and howsoever arising,
|
|||
together
with any rights or types of protection of the same or of a similar nature
to those listed in (a), (b) or (c) which may subsist anywhere in the
world;
|
||||
"Intellectual Property
Agreement"
|
||||
any
licence, consent or permission to use any Intellectual Property including,
without limitation, any software licence which relates to the business of
a Group Company;
|
||||
"Investment
Agreement"
|
||||
the
investment agreement relating to the Company entered into between the
parties thereto on 14 April 2004;
|
||||
"ITA"
|
||||
the
Income Tax Xxx 0000;
|
||||
"Loan
Notes"
|
||||
the
Inhoco 3035 Secured Loan Stock 2011 issued pursuant to a loan stock
instrument dated 14 April 2004 to those persons listed in schedule
12;
|
||||
"Loan Note
Indebtedness"
|
||||
the
sum of £7,281,914 plus interest of £241,001.43 being the amount required
to the repay the Loan Notes in full;
|
||||
“Locked Box
Schedule”
|
||||
the
locked box schedule set out at schedule 10;
|
||||
"Management
Accounts"
|
||||
the
unaudited management accounts of the Company, Brookhouse Aerospace
Limited, Brookhouse Composites Limited and Brookhouse Tooling Limited
comprising in each case a balance sheet as at 30 April 2008 and a profit
and loss account for the period which commenced on 1 October 2007 and
ended on 30 April 2008;
|
||||
"Managers'
Representative"
|
||||
the
person appointed to act as Managers' Representative for the purposes of
this agreement in accordance with clause 19.1 or clause
19.3;
|
||||
"Mellon"
|
||||
Mellon
Nominees (UK) Limited, being one of the Institutional
Sellers;
|
||||
"Minor Sale
Agreement"
|
||||
the
agreement, in the agreed form, to be entered into between (1) Xxxx
Xxxxxxxx and others, and (2) the Buyer;
|
||||
"Permitted
Payments"
|
||||
(i)
|
the
sum of £58,450 being the Participating Dividend (as such term is defined
in the Company’s articles of association for the time being) which has
been paid prior to Completion to the holders of the A ordinary shares in
the capital of the
|
5
Company
in respect of the financial period from 1 October 2006 to 30 September
2007; and
|
||||
(ii)
|
the
sum of £196,800 being the Participating Dividend which has been paid
immediately prior to Completion to the holders of the A ordinary shares in
the capital of the Company in respect of the financial period from 1
October 2007 to the date of Completion;
|
|||
"Properties"
|
||||
the
real properties, details of which are set out in schedule 7 and "Property" means any one
of them or any part of an individual property;
|
||||
"Relevant
Claim"
|
||||
has
the meaning given to it in clause 11.1;
|
||||
"Relief"
|
||||
has
the meaning given to it in Schedule 6;
|
||||
"Restricted
Business"
|
||||
the
business of the development and manufacture of composites components and
tools for the aerospace industry;
|
||||
"Restricted
Period"
|
||||
the
period of 2 years from the Completion Date;
|
||||
"Second Payment
Date"
|
||||
the
date falling on the second anniversary of Completion and if such date is
not a Business Day, the next following Business Day;
|
||||
"Security Trust
Deed"
|
||||
the
security trust deed relating to the Loan Notes entered into between the
parties thereto on 14 April 2004;
|
||||
"Sellers"
|
||||
the
Principal Shareholders, the Institutional Sellers and
Barclays;
|
||||
"Sellers'
Account"
|
||||
The
Royal Bank of Scotland plc, Account number: 00000000, Sort code:
16-00-01;
|
||||
"Sellers'
Representatives"
|
||||
the
Managers' Representative and the Institutions'
Representative;
|
||||
"Sellers'
Solicitors"
|
||||
Halliwells
LLP of 0 Xxxxxxx Xxxxxx, Xxxxxxxxxxxxxx, Xxxxxxxxxx X0
0XX;
|
||||
"Settled
Estimate"
|
||||
has
the meaning given to it in clause 11.9;
|
||||
"Shares"
|
||||
4,361,702
A ordinary shares of £0.01 each, 1,351,977 B ordinary shares of £0.01 each
179,864 C ordinary shares of £0.01 each, comprising 98.3% of the issued
share capital of the Company;
|
||||
"Subsidiary"
|
||||
a
subsidiary undertaking of the Company details of which are set out in part
2 of schedule 2 and "Subsidiaries" means all
those subsidiary undertakings;
|
||||
"Tax" and "Taxation"
|
||||
have
the meaning given in schedule 6;
|
6
"Tax
Authority"
|
||||
has
the meaning given in schedule 6;
|
||||
"Tax
Claim"
|
||||
a
claim by the Buyer under the Tax Covenant or involving or relating to
breach of a Tax Warranty;
|
||||
"Tax
Covenant"
|
||||
the
covenant in part 3 of schedule 6;
|
||||
"Taxes
Act"
|
||||
has
the meaning given in schedule 6;
|
||||
"Tax
Warranty"
|
||||
a
statement in part 2 of schedule 6 or paragraphs 2, 3 and 11 of Part B of
schedule 4 to the extent that they relate to Taxation and "Tax Warranties" means
all those statements;
|
||||
"Title and Capacity
Warranties"
|
||||
the
warranties set out in part A of schedule 4;
|
||||
"Trade
Marks"
|
||||
business
names, domain names, registered and unregistered trade and service marks
and applications for registration of any of these;
|
||||
"Transaction"
|
||||
the
sale and purchase contemplated by this agreement;
|
||||
"UK GAAP"
|
||||
generally
accepted accounting principles, standards and practices in the United
Kingdom;
|
||||
"Vendor
Shareholders"
|
||||
Xxxxx
Xxxxxx and Xxxxx Xxxxxx;
|
||||
"Warrant
Shares"
|
||||
the
179,864 C ordinary shares of £0.01 each in the capital of the Company
allotted and issued prior to the date of this agreement pursuant to the
exercise of the Bank Warrants;
|
||||
"Warranty"
|
||||
any
of the General Warranties, the Tax Warranties and the Title and Capacity
Warranties and the expression "Warranties" shall be
construed accordingly;
|
||||
"Worker"
|
||||
any
person who personally performs work for any Group Company but who is not
in business on their own account or in a client/customer
relationship.
|
||||
1.2
|
In
this agreement, a reference to:
|
|||
1.2.1
|
a
"subsidiary undertaking" or "parent undertaking" is to be construed in
accordance with section 258 CA1985 and a "subsidiary" or "holding company"
is to be construed in accordance with section 736
CA1985;
|
|||
1.2.2
|
a
document in the "agreed form" is a reference to a document in a form
approved and, for the purposes of identification, signed by or on behalf
of each party;
|
7
1.2.3
|
a
statutory provision includes a reference to the statutory provision as
replaced, modified or re-enacted from time to time before or after the
date of this agreement and any subordinate legislation made under the
statutory provision before or after the date of this
agreement. In particular (without prejudice to the generality
of the foregoing) a reference to a section of CA1985 shall include a
reference to any section of CA2006 which replaces, modifies or re-enacts
that section of CA1985 at any time after the date of this agreement with
effect from the date such section of CA2006 comes into
force;
|
|||
1.2.4
|
a
person includes a reference to an individual, body corporate, association,
government, state, agency of state or any undertaking (whether or not
having a legal personality and irrespective of the jurisdiction in or
under the law of which it was incorporated or exists);
|
|||
1.2.5
|
a
party means a party to this agreement and includes its permitted assignees
and/or the successors in title to substantially the whole of its
undertaking and, in the case of an individual, to his estate and personal
representatives;
|
|||
1.2.6
|
a
company (other than "the Company") shall be construed so as to include any
company, corporation or other body corporate, wherever and however
incorporated or established;
|
|||
1.2.7
|
this
agreement includes its schedules;
|
|||
1.2.8
|
a
sub-clause in a clause, or to a paragraph in a schedule, are to a
sub-clause of that clause or a paragraph of that
schedule;
|
|||
1.2.9
|
a
clause, paragraph or schedule, unless the context otherwise requires, is a
reference to a clause or paragraph of, or schedule to, this
agreement;
|
|||
1.2.10
|
writing
shall, subject to clause 18.4, include any mode of reproducing words in a
legible and non-transitory form;
|
|||
1.2.11
|
"includes"
and "including" shall mean including without limitation;
and
|
|||
1.2.12
|
this
agreement or any provision of this agreement or any document are to this
agreement, that provision or that document as in force for the time being
and as amended from time to time in accordance with the terms of this
agreement or that document or with the agreement of the relevant
parties.
|
|||
1.3
|
The
contents table and headings in this agreement are for convenience only and
do not affect its interpretation.
|
|||
1.4
|
Words
importing the singular include the plural and vice versa and words
importing a gender include every gender.
|
|||
1.5
|
Unless
specifically stated to the contrary all agreements, obligations and
liabilities on the part of the Sellers or any two or more of the Sellers
contained in or arising under this agreement are several and shall be
construed accordingly.
|
|||
1.6
|
Any
question as to whether a person is connected with another shall be
determined in accordance with section 839 of the Taxes Act (except that in
construing section 839 "control" for these purposes has the meaning given
by section 840 or section 416 of the Taxes Act so that there is control
whenever section 840 or 416 requires) which shall apply in relation to
this agreement as it applies in relation to the Taxes
Act.
|
|||
1.7
|
References
to "the Company" shall, whenever the context so admits, be deemed to
include reference to each or any Group Company so that, without any
limitation, each
|
|||
8
of
the Warranties shall be given in respect of and in relation to the Company
and each Subsidiary.
|
||||
2
|
Sale and
purchase
|
|||
2.1
|
At
Completion each of the Sellers (other than Mellon) shall sell with full
title guarantee and free from any Encumbrance, and the Buyer shall
purchase, the number of Shares set opposite the name of that Seller in
column (2) of schedule 1.
|
|||
2.2
|
At
Completion, Mellon shall transfer to the Buyer the legal title to the
number of Shares set opposite its name in column (2) of schedule
1.
|
|||
2.3
|
Title
to, beneficial ownership of and any risk attaching to the Shares shall
pass to the Buyer on Completion and the Shares shall be sold and purchased
together with all rights and benefits attached to or accruing to them as
from Completion, including the right to receive all dividends,
distributions or any return of capital declared, made or paid with effect
from Completion.
|
|||
2.4
|
The
Buyer shall not be obliged to complete the purchase of any of the Shares
unless the purchase of all the Shares and the shares to be acquired by the
Buyer pursuant to the Minor Sale Agreement is completed simultaneously in
accordance with this agreement and the Minor Sale Agreement, but
completion of the purchase of some of the Shares will not affect the
rights of the Buyer with respect to the purchase of the
others.
|
|||
2.5
|
Each
of the Sellers irrevocably waives any right of pre-emption or other right
or restriction on transfer in respect of any of the Shares and any of the
shares to be acquired by the Buyer pursuant to the Minor Sale Agreement
conferred on him (whether under the articles of association of the Company
or otherwise) and shall, before Completion, procure the irrevocable and
unconditional waiver of any such right or restriction conferred on any
other person who is not a party to this agreement.
|
|||
3
|
Consideration
|
|||
3.1
|
The
Consideration shall be paid by the Buyer to the Sellers in cash on
Completion in accordance with clause 3.2.
|
|||
3.2
|
On
Completion the Buyer shall satisfy its obligations under clause 3.1 by
paying:
|
|||
3.2.1
|
the
Escrow Amount into the Escrow Account or by directing the Sellers'
Solicitors to pay the Escrow Amount into the Escrow Account when it has
been opened; and
|
|||
3.2.2
|
the
sum of £27,150,742, such amount being the sum of the Consideration less
the Escrow Amount, to the Sellers' Account, such payment to be made by
wire transfer of funds for same day value in GBP and constituting full
discharge for the Buyer (who shall not be concerned with the application
of such amount) in respect of its obligations under this clause
3.2.
|
|||
3.3
|
As
between them, and, following payment by the Buyer in accordance with the
provisions of clause 3.2, with no liability or obligation whatsoever on
the part of the Buyer, the Sellers shall be entitled to receive the sum
referred to in clause 3.2.2 in the amounts agreed between the Sellers and
the Buyer on the date of this agreement (Due Proportions), subject to, in
the case of Xxxxxx Xxxxxxx Xxxxxxx, Xxx Xxxxxx, Xxxxx Xxxxxxx and Xxxxxxxx
Xxxxx, the deduction of an amount equal to the income tax and employee
national insurance contributions arising as a result of or in respect of
each of their subscriptions for B ordinary shares in the Company on 12
June 2008 and for which a Group Company is liable to account to a Tax
Authority (the "Deduction"). The
Managers' Representative shall ensure that such Deduction is made, and
shall promptly pay the amount of such Deduction to the respective employer
Group Company.
|
9
3.4
|
If
any payment is made by the Sellers to the Buyer under or in respect of any
breach of any provision of this agreement (including pursuant to any Tax
Claim), the payment shall, so far as possible, be treated as a reduction
in the Consideration, and the Consideration shall accordingly be reduced
by the amount of such payment.
|
||
3.5
|
All
payments to be made pursuant to this agreement shall be paid in full on
the relevant due date and without any set-off, counterclaim or other
deduction.
|
||
4
|
Completion
|
||
4.1
|
Completion
shall take place at the office of the Sellers' Solicitors (or such other
place as the parties may agree) on the date of this agreement when each of
the parties shall comply with their respective obligations set out in
schedule 3.
|
||
4.2
|
On
Completion the Buyer shall comply with its obligations under clause 3.2
and the Managers' Representative shall comply with its obligations under
clause 3.3.
|
||
4.3
|
The
Buyer shall procure that the Company pays the Bonuses through the payroll
to be processed on or about 20 June 2008.
|
||
5
|
Warranties
|
||
5.1
|
The
Principal Shareholders jointly and severally warrant to the Buyer in the
terms of the General Warranties and the Tax Warranties.
|
||
5.2
|
The
Sellers severally warrant to the Buyer in the terms of the Title and
Capacity Warranties, save that the Buyer acknowledges that Mellon are only
the legal owner and not the beneficial owner of the Shares set out against
its name in column (2) of schedule 1.
|
||
5.3
|
Each
of the Warranties shall be construed as a separate and independent
warranty and (except where this agreement provides otherwise) shall not be
limited or restricted by reference to or inference from any other term of
this agreement or any other Warranty or any other document referred to
herein (other than as specifically provided in this agreement or in the
Disclosure Letter).
|
||
5.4
|
The
rights and remedies of the Buyer in respect of any breach of any of the
Warranties shall survive Completion.
|
||
5.5
|
Except
in the event of any fraud or wilful concealment, each of the Sellers
waives and may not enforce any right which he may have in respect of any
misrepresentation, inaccuracy or omission in or from any information or
advice supplied or given by the officers or employees of the Company in
enabling the Sellers to give the Warranties or to prepare the Disclosure
Letter.
|
||
5.6
|
The
Warranties are qualified by the facts and circumstances fairly disclosed
in the Disclosure Letter. For this purpose "fairly disclosed"
means disclosed in such a manner and with sufficient detail so as to
enable a reasonable purchaser to identify the nature and scope of the
matter disclosed and to make a reasonably informed assessment of its
effect.
|
||
5.7
|
Unless
otherwise specified where any Warranty refers to the knowledge,
information, belief or awareness of the Principal Shareholders (or a
similar expression) the Principal Shareholders shall be deemed to have
such knowledge, information, belief or awareness as the Principal
Shareholders would have obtained had the Principal Shareholders made such
careful and diligent enquiries as are reasonable into the subject matter
of that Warranty of each other and Xxxx Xxxxxxxx and Xxx
Xxxxxxxxxxx.
|
10
5.8
|
The
Buyer confirms that, as at the date of this agreement, none of the
individuals listed in schedule 11 has actual knowledge (to include,
without limitation, (save in respect of Xxxx Xxxxxxxxx) the contents of
the due diligence reports prepared by the Buyer's Solicitors and the
Buyer's Property Solicitors in connection with the Transaction (in each
case solely with respect to the subject matter and the Warranties referred
to in column 2 of Schedule 11 opposite the name of each such individual)
of any matter that any of them is actually aware would give rise to a
right on the part of the Buyer to make recovery by way of a Claim for a
breach of those Warranties referred to in column 2 of Schedule 11 opposite
the name of each such individual having reviewed those
Warranties.
|
|||
5.9
|
The
Buyer acknowledges that, save in the case of fraud or wilful
concealment:
|
|||
5.9.1
|
its
sole remedy for any Claim (other than a Claim involving or relating to a
breach of any of the Title and Capacity Warranties) shall be contractual
damages (subject to the provisions of schedule 5) and the Buyer waives any
other right, power or remedy which it might otherwise have relating to any
such Claim (for the avoidance of doubt this clause 5.9.1 shall not apply
to a claim made under the Tax Covenant, a claim under clause 12 or an
Indemnity Claim); and
|
|||
5.9.2
|
no
breach of any provision of this agreement shall entitle the Buyer to
rescind this agreement or treat it as having been terminated and, save as
aforesaid, the Buyer waives all such rights of rescission and termination
in respect of this agreement.
|
|||
5.10
|
Notwithstanding
any other provision of this agreement the liability of the Sellers in
respect of any Claim shall be limited in accordance with schedule
5.
|
|||
5.11
|
Any
sum payable to the Buyer pursuant to a claim involving or relating to a
breach of this agreement (including, without limitation, pursuant to an
Indemnity Claim, a claim under clause 12, a Tax Claim or a Balance Sheet
Claim) shall be made free and clear of and without deduction for or on
account of any Taxation, except to the extent that any such deduction or
withholding is required by law. If Taxation or amounts in
respect of such Taxation must be deducted or withheld from any sum payable
to the Buyer pursuant to a claim involving or relating to a breach of this
agreement or pursuant to an Indemnity Claim, a claim under clause 12, a
Tax Claim or a Balance Sheet Claim or any such sum payable to the Buyer is
subject to Tax or is taken into account in calculating Tax, then the
Sellers shall be obliged to pay an additional amount (such amount being
referred to as the "gross-up amount") as
will ensure that after such deduction, withholding or Tax there shall
remain a sum equal to the amount that would otherwise have been payable to
the Buyer pursuant to such a Claim. In applying the preceding
sentence of this clause 5.11, no account shall be taken of the extent to
which any liability to Tax may be mitigated or off-set by any Relief
(other than a Principal Shareholders' Relief, as such term is defined in
schedule 6) available to the Buyer so that where such Relief is available
the additional amount payable hereunder shall be the amount which would
have been payable in the absence of such availability. To the
extent that the Buyer subsequently obtains and utilises any Relief as a
result of a Seller paying to the Buyer the gross-up amount, the Buyer
shall pay to the relevant Seller so much of the economic benefit from that
Relief which the Buyer has received and retained as does not exceed the
gross-up amount.
|
|||
5.12
|
The
Exit Bonus Relief or the VAT Relief (as such terms are defined in schedule
6) shall not be set-off against any Taxation which is the subject of a
gross-up payment. For the avoidance of doubt, any set-off
contrary to this clause shall be disregarded when calculating the gross-up
amount.
|
11
6
|
Tax
|
|||
The
provisions of schedule 6 shall apply.
|
||||
7
|
Restrictive
covenants
|
|||
7.1
|
Each
of the Principal Shareholders hereby severally undertakes with the Buyer
(for itself and as trustee for the benefit of each Group Company) that he
will not, either solely or jointly with or through any other person, on
his own account or as an employee, agent, manager, advisor or consultant
for any other person or otherwise howsoever:
|
|||
7.1.1
|
during
the Restricted Period carry on or be engaged, concerned or interested
(directly or indirectly) in any Restricted Business in the United Kingdom
which is competitive with the business carried on by any Group
Company as such business is conducted at the Completion
Date;
|
|||
7.1.2
|
during
the Restricted Period solicit custom or business from any person in
respect of goods and/or services competitive with those manufactured
and/or supplied by any Group Company during the period of 12 months prior
to the Completion Date, such person having been a customer of any Group
Company during such period;
|
|||
7.1.3
|
during
the Restricted Period employ or offer employment to, or induce, solicit or
endeavour to entice to leave the service or employment of any Group
Company any person who, during the period of 12 months prior the
Completion Date, was an employee of any Group Company occupying a senior,
managerial, technical, sales or research position; or
|
|||
7.1.4
|
make
use of any Company Intellectual Property, including without limitation,
use of a name including the words "Brookhouse", or anything
confusingly similar to any Company Intellectual
Property,
|
|||
provided
that the covenant at clause 7.1.1 or clause 7.1.2 shall not apply to
Xxxxxxxx Xxxxx.
|
||||
7.2
|
Each
of the Vendor Shareholders hereby severally undertakes with the Buyer (for
itself and a trustee for the benefit of each Group Company) that it will
not, either solely or jointly with or through any other person, on its own
account or as agent, manager, advisor or consultant for any other
person:
|
|||
7.2.1
|
during
the Restricted Period employ or offer employment to, or induce, solicit or
endeavour to entice to leave the service or employment of a Group Company,
any Principal Shareholder;
|
|||
7.2.2
|
make
use of any Company Intellectual Property, including without limitation,
use of a name including the words “Brookhouse” or anything
confusingly similar to any Company Intellectual
Property.
|
|||
7.3
|
Nothing
in clauses 7.1 or 7.2 shall prevent any Principal
Shareholder or Vendor Shareholder from:
|
|||
7.3.1
|
being
the holder of or beneficially interested as a passive investor in any
publicly traded or listed securities in any company which confer on that
person not more than 3% of the votes which can generally be cast at a
general meeting of that company; and
|
|||
7.3.2
|
placing
a general recruitment advertisement which may come to the attention of,
but which is not specifically directed at, any of the persons referred to
in clause 7.1.3 or 7.2.1.
|
12
7.4
|
The
Principal Shareholders and the Vendor Shareholders and each of them agree
and acknowledge that the restrictions contained in this clause 7 are fair
and reasonable and necessary to assure to the Buyer the full value of the
Shares.
|
||
7.5
|
Each
of the restrictions in each paragraph or sub-clause or clause above shall
be enforceable independently of each of the others and its validity shall
not be affected if any of the others is invalid.
|
||
7.6
|
If
any of those restrictions is void, but would be valid if some part of the
restrictions were deleted, the restriction in question shall apply with
such modification as may be necessary to make it valid.
|
||
8
|
Confidential
Information
|
||
8.1
|
Each
of the Sellers (other than Barclays) undertakes with the Buyer (for itself
and for the benefit of any Group Company) that it will not use or disclose
to any person any Confidential Information which it has at the date of
this agreement.
|
||
8.2
|
Clause 8.1
does not apply to:
|
||
8.2.1
|
disclosure
of Confidential Information to a director, officer or employee of the
Buyer or a Group Company whose function requires him to have the
Confidential Information;
|
||
8.2.2
|
use
or disclosure of Confidential Information required to be used or disclosed
by applicable law or by any governmental or regulatory body with
applicable jurisdiction;
|
||
8.2.3
|
disclosure
of Confidential Information on a strictly confidential basis to a
professional adviser for the purpose of advising the Sellers;
or
|
||
8.2.4
|
Confidential
Information which becomes publicly known after the date of this agreement
through no fault of any of the Sellers.
|
||
9
|
Further
Undertakings
|
||
9.1
|
Each
of the Sellers severally undertakes to the Buyer that, for so long as it
remains the registered holder of any of the Shares after Completion it
will:
|
||
9.1.1
|
hold
the Shares and the dividends and other distributions of profits or surplus
or other assets declared, paid or made in respect of them after Completion
and all rights arising out of or in connection with them in trust for the
Buyer;
|
||
9.1.2
|
deal
with and dispose of the Shares and all such dividends, distributions and
rights as the Buyer may direct;
|
||
9.1.3
|
vote
at all meetings which he shall be entitled to attend as the registered
holder of the Shares or execute any written resolutions as the holder of
the Shares in such manner as the Buyer shall direct (or, in the absence of
any such direction, abstain from voting); and
|
||
9.1.4
|
execute
all instruments of proxy or other documents which the Buyer may reasonably
require to enable the Buyer to attend and vote at any such
meeting.
|
||
9.2
|
For
the purpose of giving effect to clause 9.1 each of the Sellers hereby
severally appoints the Buyer (acting by any of its directors from time to
time) to be its attorney in its name and on its behalf to exercise all or
any of the rights in relation to the Shares
|
13
as
the Buyer in its absolute discretion sees fit from Completion until the
day on which the Buyer or its lawful nominee is registered in the register
of members of the Company as the holder of the relevant
Shares.
|
|||
9.3
|
The
Buyer undertakes to the Sellers to use its best endeavours to effect the
registration of the Buyer or its lawful nominee as the holder of the
Shares as soon as possible after Completion and, in any event, within 60
days of Completion. The Buyer undertakes to the Sellers to
submit for stamping the stock transfer forms relating to the transfer of
Shares hereunder within 30 days of the Completion Date.
|
||
10
|
Institutional Sellers
|
||
10.1
|
The
parties acknowledge that the obligations or liabilities of each
Institutional Seller (other than the Vendor Shareholders) (including the
obligation to make any payment or repayment to any other party under or in
respect of this agreement) are only:
|
||
10.1.1
|
with
respect to Shares registered in its name;
|
||
10.1.2
|
its
contribution and entitlement to the Escrow Amount pursuant to clause
11;
|
||
10.1.3
|
as
provided for in clause 2 (Sale and purchase), clause 4.1, clause 5.2,
clause 5.11 (Grossing Up), clause 8 (Confidential Information) clause 9
(Further Undertaking), clause 12 (Locked Box), clause 14 (Announcements),
clauses 19.5 and 19.6 (Institutions' Representative), clause 20 (General),
clause 21 (Further assurance) and clause 22 (Governing law and
jurisdiction).
|
||
10.2
|
The
parties acknowledge that the obligations or liabilities of the Vendor
Shareholders (including the obligation to make any payment or repayment to
any other party under or in respect of this agreement) are
only:
|
||
10.2.1
|
with
respect to Shares registered in its name;
|
||
10.2.2
|
its
contribution and entitlement to the Escrow Account pursuant to clause
11;
|
||
10.2.3
|
as
provided for in clause 2 (Sale and Purchase), clause 4.1, clause 5.2,
clause 5.11 (Grossing Up), clause 7.2 (Restrictive Covenants), clause 8
(Confidential Information), clause 9 (Further Undertaking), clause 12
(Locked Box), clause 14 (Announcements), clause 18 (Notices), clauses 19.5
and 19.6 (Institutions' Representative), clause 20 (General), clause 21
(Further assurance) and clause 22 (Governing law and
jurisdiction).
|
||
10.3
|
The
parties acknowledge that the obligations or liabilities of Barclays
(including the obligation to make any payment or repayment to any other
party under or in respect of this agreement) are only:
|
||
10.3.1
|
with
respect to Shares registered in its name;
|
||
10.3.2
|
its
contribution and entitlement to the Escrow Amount pursuant to clause
11;
|
||
10.3.3
|
as
provided for in clause 2 (Sale and purchase), clause 4.1, clause 5.2,
clause 5.11 (Grossing Up), clause 9 (Further Undertaking), clause 12
(Locked Box), clause 14 (Announcements), clause 18
(Notices), clauses 19.5 and 19.6 (Institutions'
Representative), clause 20 (General), clause 21 (Further assurance) and
clause 22 (Governing law and jurisdiction).
|
||
11
|
Escrow
Arrangements
|
||
11.1
|
For
the purposes of this clause 11, the following words and expressions shall
have the following meanings:
|
14
"Determined
Claim"
|
|||
a
Relevant Claim being either:
|
|||
(i)
|
agreed
in writing between the Sellers' Representatives and the Buyer;
or
|
||
(ii)
|
an
order or decree of a court of competent jurisdiction being given in
proceedings in respect of the Relevant Claim and such order or decree
being final and not or no longer appealable;
|
||
"Retained
Amount"
|
|||
in
the case of any Relevant Claim, either (as the case may
be):
|
|||
(i)
|
in
the event that either the Sellers Notice states that the Sellers’
Representatives agree with the Relevant Claim and the Buyer’s Estimate, or
the Sellers’ Notice is not served in accordance with clause 11.6, the
Buyer’s Estimate;
|
||
(ii)
|
in
the event that parties agree the amount to be retained in accordance with
clause 11.7, the Agreed Estimate; or
|
||
(iii)
|
in
the event that an Expert opines on the Relevant Claim in accordance with
clause 11.9, the Settled Estimate,
|
||
in
each case together with an amount equal to the Buyer's good faith estimate
of the reasonable third party costs and expenses (including legal costs
and expenses) which might reasonably be expected to be incurred by the
Buyer in connection with Relevant Claim
|
|||
"Payment
Date"
|
|||
the
First Payment Date or the Second Payment Date (as the case may
be);
|
|||
"Payment
Period"
|
|||
the
period between each such Payment Date or between Completion and the First
Payment Date;
|
|||
"Relevant
Claim"
|
|||
a
Claim, an Indemnity Claim, a Tax Claim, a Balance Sheet Claim and a claim
under clause 12, or a potential claim in accordance with paragraph 3.2.5,
contingent claim, of Schedule 5;
|
|||
"Undetermined
Claim"
|
|||
a
Relevant Claim which is not at the relevant Payment Date a Determined
Claim;
|
|||
11.2
|
The
Escrow Amount is to be retained in the Escrow Account following Completion
and amounts shall only be released from the Escrow Account in accordance
with the provisions of this clause 11 and the Escrow Agreement and amounts
therein shall be available to be used to satisfy Determined
Claims.
|
||
11.3
|
Subject
to the provisions of clause 11.4, £1,500,000 of the Escrow Amount shall be
paid to the Sellers’ Solicitors (whose receipt shall be a good discharge
therefor) by way of same day transfer of funds to the Sellers'
Account for the account of the Sellers on the First Payment
Date and the remainder of the Escrow Amount shall be paid to the Sellers’
Solicitors (whose receipt shall be a good discharge therefor) by way of
same day transfer of funds to the Sellers' Account for the
account of the Sellers on the Second Payment Date.
|
||
11.4
|
If,
at any time prior to a Payment Date, written notice of a Relevant Claim
has been given to the Sellers' Representatives of a Relevant Claim in
accordance with clause 11.5, there shall be deducted from the amount due
to be paid to the Sellers Account in accordance with clause 11.3 above on
such Payment Date an amount equal to the Retained Amount of all such
Relevant Claims or, if, in respect of any Relevant Claim or Relevant
Claims, the Retained Amount in respect of the Relevant Claim or
Relevant Claims in question has not at that time been determined in
accordance with the provisions of this clause 11, an amount equal to the
Buyer's Estimate (as defined in
|
15
clause
11.5) in respect of the Relevant Claim or Relevant Claims in question
together with an amount equal to the Buyer's good faith estimate of the
reasonable third party costs and expenses (including legal costs and
expenses) which might reasonably be expected to be incurred by the Buyer
in connection with Relevant Claim or Relevant Claims in question and the
amount payable to the Sellers' Account on that Payment Date in accordance
with clause 11.3 above shall be reduced accordingly, provided always
where the Buyer's Estimate of the Relevant Claim or Relevant Claims in
question has not been agreed or determined in accordance with this clause
11, following such agreement or determination there shall be paid to the
Seller's Account any excess by which the amount as agreed or determined in
respect of the Relevant Claim or Relevant Claims in question is less than
the Buyer's Estimate thereof. In the event that any monies shall be
deducted from a payment due to be made to the Sellers' Account in
accordance with clause 11.3 above on a Payment Date, such monies shall be
retained in the Escrow Account until the Relevant Claim or Relevant Claims
in question becomes or become a Determined Claim or Determined
Claims.
|
|||
11.5
|
If
the Buyer wishes to retain money in the Escrow Account in respect of any
Undetermined Claim(s), it shall deliver to the Sellers' Representatives no
later than 1 Business Day prior to the Payment Date a certificate signed
by a duly authorised officer of the Buyer stating in such terms as the
Buyer considers reasonably appropriate the circumstances giving rise to
the Relevant Claim in question and providing the Buyer's estimate of the
maximum amount that may reasonably be claimed in respect thereof (the
"Buyer's
Estimate") (the "Buyer's
Certificate").
|
||
11.6
|
Within
2 months of receipt of the Buyer’s Certificate, the Sellers’
Representatives shall serve written notice (the "Sellers' Notice") on the
Buyer accepting or rejecting the Relevant Claim set out in the Claim
Notice and/or accepting or rejecting the amount of the Buyer's
Estimate. Insofar as the Sellers' Representatives reject the
amount of the Buyer's Estimate, the Sellers' Notice shall include an
estimate of the maximum amount that may reasonably be claimed in respect
of the Relevant Claim in question (the "Sellers' Estimate") and
the basis for the Sellers' Estimate. Failure to serve a
Sellers’ Notice within such 2 month period shall be deemed to mean that
the Sellers' Representatives have accepted the amount of the Buyer's
Estimate solely for the purpose of this clause 11.6, and without prejudice
to the right to resist any and all claims in respect of the Relevant Claim
or Relevant Claims in question.
|
||
11.7
|
Following
receipt of a Sellers' Notice rejecting the Relevant Claim and/or the
quantum thereof the Buyer jointly with the Sellers' Representatives shall
attempt in good faith to resolve the difference of opinion between the
parties, including as to any difference between the amount of the Sellers'
Estimate and the amount of the Buyer's Estimate. Any successful
resolution of such difference shall be evidenced in writing signed by
a representative of the Buyer and by the Sellers' Representatives, (the
amount being the "Agreed
Estimate").
|
||
11.8
|
If
the Buyer and the Sellers' Representatives fail to resolve their
difference of opinion within 15 Business Days after the Sellers' Notice is
delivered the difference in opinion between the Buyer and the Sellers'
Representatives ("Claim
Dispute") shall be submitted for determination to a Queen's Counsel
appointed jointly by the Buyer and the Sellers' Representative, or if no
agreement as to such appointment is reached within 5 Business Days, to a
Queen's Counsel of at least ten years' standing and well versed in the law
relating to the dispute in question appointed by the Chairman of the Bar
Association (on the application of the Buyer or of the Sellers'
Representatives) (the "Expert").
|
||
11.9
|
The
jurisdiction of the Expert shall be limited to resolving the Claim Dispute
and the scope of the review shall be limited to reviewing the Buyer's
Certificate and the Sellers' Notice and the supporting documentation and
evidence referred to in the next following sentence. Both the
Buyer and the Sellers' Representatives shall have the right to submit
supporting documentation or evidence in writing to support the amount of
the
|
16
Buyer's
Estimate or the Sellers' Estimate (as the case may be) but neither the
Buyer nor the Sellers' Representatives shall have the right to change the
amount of the Buyer's Estimate or the Sellers' Estimate (as the case may
be) such amounts being deemed conclusively as the Buyer's and the
Sellers' estimate of the maximum amount that may reasonably be
claimed in respect of the Relevant Claim in question. The Claim
Dispute shall be decided by the Expert within 10 Business Days from
appointment of the Expert. The Expert shall be directed to
determine the amount that the Expert, based on his experience and the
information submitted by the parties, believes represents the maximum
amount that may reasonably be claimed in respect of the Relevant Claim in
question (the amount so selected by the Expert being referred to herein as
the "Settled
Estimate"). The Expert shall inform the parties in
writing of the Settled Estimate immediately after making his
decision. The costs of the Expert shall follow the cause, but
shall initially be paid by the party whose estimate of the maximum amount
that may reasonably be claimed in respect of the Relevant Claim in
question is furthest from the Settled Estimate.
|
|||
11.10
|
On
any Relevant Claim having become a Determined Claim the Sellers'
Representatives and the Buyer shall instruct the Sellers’ Solicitors and
the Buyer’s Solicitors to pay out of the Escrow
Account:
|
||
11.10.1
|
to
the Buyer and/or the relevant member of the Buyer Group (as the case may
be) an amount equal to the amount payable in accordance with the
settlement or determination of the Determined Claim and the Buyer shall
not be concerned as to the application of such proceeds (insofar as there
shall be sufficient monies standing to the credit of the Escrow Account);
and
|
||
11.10.2
|
to
the Sellers' Solicitors (whose receipt shall be a good discharge
therefor), for the account of the Sellers, the balance (if any) of the
amount that would otherwise have been due to them on the immediately
preceding Payment Date, but for the Relevant Claim in
question.
|
||
11.11
|
Save
as ordered by a court of competent jurisdiction, no payment shall be made
out of the Escrow Account except in accordance with the bank mandate in
relation to the Escrow Account which shall require the signature of each
of the Sellers' Representatives and the Buyer.
|
||
11.12
|
All
interest earned on principal in the Escrow Account (less any Tax withheld,
if appropriate) shall follow that part of the principal on which it is
earned.
|
||
11.13
|
In
the event of a referral of a Claim Dispute to the Expert in the manner set
out in clause 11.8 above, the Buyer's obligation to institute proceedings
against the Sellers in the manner contemplated in paragraph 2.2 of
Schedule 5 within 6 months of service of the notice referred to in that
paragraph shall only commence from the date upon which the Expert's
written notification of the Settled Estimate is delivered to the Buyer and
the Sellers' Representatives in accordance with clause 11.9
above.
|
||
11.14
|
The
Sellers agree to contribute to the Escrow Amount in the amounts agreed
between the Sellers, such payment to be satisfied in accordance with
clause 3.2. The Sellers shall be entitled to receive any payments to be
made to the Sellers from the Escrow Account pursuant to this clause 11 in
the proportions agreed between the Sellers. The Buyer shall not be
concerned with the application of any amounts released from the Escrow
Account for the benefit of the Sellers.
|
||
12
|
Locked Box
Undertaking
|
||
12.1
|
The
Sellers undertake to the Buyer that since the Balance Sheet Date, except
for any Permitted Payments:
|
17
12.1.1
|
no
distribution of capital (whether by reduction of capital or redemption or
purchase of shares or otherwise) or income has been declared, made or paid
by the Company;
|
||
12.1.2
|
no
payment has been made or agreed to be made by any Group Company to any
Seller or any connected person of any Seller (other than amounts payable
to an investee company of the AAM Funds in the ordinary and normal course
of business) other than contractual remuneration payable to the Principal
Shareholders and expenses incurred by the Principal Shareholders in the
ordinary and normal course of business which shall be no more than those
amounts set out in Annexure B, and accrued but unpaid holiday pay payable
to any Principal Shareholder;
|
||
12.1.3
|
no
Group Company has waived any amount owed to it by any of the Sellers or
any of their respective connected persons (other than an investee company
of the AAM Funds, such amounts having been waived in the ordinary and
normal course of business);
|
||
12.1.4
|
no
Group Company has made or provided or agreed to make or provide any gift
(including any transfer of an asset for a consideration less than the fair
market value of the relevant asset), guarantee, security, indemnity, loan
or other like arrangement or any repayment of indebtedness or interest on
such indebtedness to or on behalf of or for the benefit of any Seller or
any of their respective connected persons;
|
||
12.1.5
|
no
gratuitous or discretionary payment (including but not limited to any sale
bonuses in connection with the sale of the Shares but excluding the Bonus)
has been made or agreed to be made by any Group Company to any Seller or
to any of their respective connected persons; and
|
||
12.1.6
|
no
Group Company has paid or agreed to pay any of the fees or expenses of any
adviser or consultant engaged by any of the Sellers in connection with the
Transaction including, without limitation, the Sellers' Solicitors and
Xxxxxxxx Quarterdeck.
|
||
12.2
|
The
Sellers severally agree to indemnify the Buyer and keep it indemnified
from and against all liabilities, claims, losses, damages, external costs,
or reasonably and properly incurred external fees suffered or incurred by
the Buyer or any Group Company as a result of:
|
||
12.2.1
|
a
breach by any Seller of clause 12.1;
|
||
12.2.2
|
the
Company not receiving the sum of £16,954 as shown in the line item
entitled "Share Issue Proceeds" of the Balance Sheet,
|
||
for
the avoidance of doubt, to the extent that the amounts standing to the
credit of the Escrow Account at the relevant time are insufficient to
satisfy any claim brought under clause 12, each Seller shall only be
liable to indemnify the Buyer in respect of amounts received by, or to the
extent of the benefit derived by, itself, himself or its/his connected
persons.
|
|||
13
|
Specific
Indemnities
|
||
13.1
|
The
Principal Shareholders shall indemnify the Buyer (acting for itself and as
agent or trustee for any Group Company) against all costs, losses,
liabilities, penalties, fines, claims or expenses (including legal and
other professional fees and expenses) suffered or incurred by the Buyer or
any Group Company directly arising from, out of or in connection with the
following matters:
|
18
13.1.1
|
any
claim by Airbus S.A.S in relation to the possible infringement of Airbus
S.A.S's rights in respect of its Intellectual Property, details of which
are disclosed in the Disclosure Letter against Warranties 4.4.4 and
4.4.5;
|
||
13.1.2
|
any
claims by any of Messrs Oakes, Walmsley, Hargreaves and Topping (to the
extent not covered by insurance) in relation to any of the matters details
of which are disclosed in the Disclosure Letter against Warranty
7.12;
|
||
13.1.3
|
the
potential claims and disputes details of which are disclosed in the
Disclosure Letter against Warranty 24.2, 24.3 and 24.4 in respect of
environmental and nuisance matters; and/or
|
||
13.1.4
|
the
investigation by the Health and Safety Executive into possible
contraventions of the Health and Safety at Work Xxx 0000 and the Control
of Hazardous Substances Hazardous to Health Regulations 2002, details of
which are disclosed in the Disclosure Letter against Warranty 25.2 and
25.3.
|
||
13.2
|
No
claim may be brought against the Sellers in respect of the matters
referred to in clause 13.1 unless the aggregate amount of the liability
for all such claims exceeds £50,000 in which circumstances the Buyer shall
be able to claim the full amount and not merely the excess over
£50,000;
|
||
13.3
|
The
provisions of paragraphs 1.1, 2, 3.2, 8 and 9 of schedule 5
shall apply to any Indemnity Claim.
|
||
14
|
Announcements
|
||
14.1
|
Subject
to clauses 8, 14.2 and 14.3, no party shall make or authorise any public
announcement or other communication or circular concerning the terms of
any matter contemplated by or ancillary to this agreement unless it has
first obtained the consent of the others, such consent not to be
unreasonably withheld or delayed or the contents of the announcement,
communication or circular are otherwise in the public
domain.
|
||
14.2
|
Notwithstanding
clause 14.1:
|
||
14.2.1
|
a
party may make or authorise an announcement required by law or by the
United Kingdom Listing Authority or the London Stock Exchange or any other
securities exchange or regulatory or governmental body (whether or not
such requirement has the force of law) provided that the party has
consulted with and taken into account the reasonable requirements of the
other parties (if and to the extent that such consultation is reasonably
practicable);
|
||
14.2.2
|
a
party may make a communication to its professional advisers in connection
with advice relating to the interpretation of this agreement, proceedings
relating to the enforcement of the terms of this agreement or otherwise;
and
|
||
14.2.3
|
the
AAM Funds and their manager shall be entitled to make announcements in
respect of the realisation of their investment in the Company, provided
always that such announcements shall only contain such information as is
in the public domain regarding the transaction and the amount of the
return to the AAM Funds.
|
||
15
|
Assignment
|
||
15.1
|
No
party shall assign, transfer, charge, make the subject of a trust or deal
in any other manner with this agreement or any of its rights under this
agreement or purport to do any of the same without the prior written
consent of the other parties except that the Buyer may assign at any time
the benefit of its rights under the whole or any part of this
agreement:
|
19
15.1.1
|
to
a member of the Buyer's Group provided that and subject to the condition
that if any such company ceases to be such a member of the Buyer's Group
then the Buyer shall procure that upon such cessation the benefit of the
agreement shall be reassigned or transferred back to the Buyer or another
member of the Buyer's Group; or
|
||
15.1.2
|
by
way of security to any financial institution(s) which has or have agreed
to advance credit facilities to the Buyer to assist in the acquisition
contemplated by this agreement,
|
||
provided
that no assignee shall be entitled to greater damages or other
compensation than that to which the Buyer would have been entitled had it
not assigned the benefit of the agreement as aforesaid.
|
|||
15.2
|
This
agreement shall be binding on and shall enure for the benefit of each
party's successors and permitted assignees.
|
||
16
|
Third party
rights
|
||
16.1
|
The
Company, any person to whom the benefit of any provision of this agreement
is assigned in accordance with clause 15.1 and each person falling
within the category of persons described in clause 15.2 shall be
entitled under the Contracts (Rights of Third Parties) Xxx 0000 to enforce
any term of this agreement which confers (expressly or impliedly) any
benefit on any such person.
|
||
16.2
|
Subject
to clause 16.1, a person who is not a party to this agreement shall
have no rights under the Contracts (Rights of Third Parties) Xxx 0000 to
enforce a provision of this agreement.
|
||
17
|
Entire
Agreement
|
||
17.1
|
This
agreement, together with all agreements entered into or to be entered into
pursuant to the terms of this agreement (together the "Transaction Documents"),
constitutes the entire agreement between the parties in connection with
the matters dealt with therein.
|
||
17.2
|
Subject
to clause 17.3:
|
||
17.2.1
|
the
Transaction Documents supersede and extinguish all previous agreements
between the parties (whether oral or in writing) in connection with the
matters dealt with therein;
|
||
17.2.2
|
each
party acknowledges to the other that it has not been induced to enter into
any of the Transaction Documents by, nor relied on, any representation or
warranty other than those expressly contained in the Transaction
Documents; and
|
||
17.2.3
|
each
party hereby unconditionally and irrevocably waives (to the fullest extent
permitted by law) any claim it may have in relation to any representation
or warranty which is not expressly contained in the Transaction
Documents.
|
||
17.3
|
Nothing
in clause 17.2 operates to limit or exclude liability for fraud or
wilful concealment.
|
20
18
|
Notices
|
||
18.1
|
Any
notice given under this agreement shall be in writing and signed by or on
behalf of the party giving it and shall be served by delivering it by hand
or sending it by pre-paid recorded delivery or registered post (or
registered airmail in the case of an address for service outside of the
United Kingdom) or by fax to the party due to receive it, at (in the case
of the Buyer) its registered office address from time to time or (in the
case of the Sellers) their respective addresses set out in this agreement
or (in either case) to such other address or fax number as was last
notified in writing to the other parties.
|
||
18.2
|
Subject
to clause 18.3, in the absence of evidence of earlier receipt, any notice
given pursuant to this clause shall be deemed to have been
received:
|
||
18.2.1
|
if
delivered by hand, at the time of actual delivery to the address referred
to in clause 18.1;
|
||
18.2.2
|
in
the case of pre-paid recorded delivery or registered post, two Business
Days after the date of posting;
|
||
18.2.3
|
in
the case of registered airmail, five Business Days after the date
of posting;
and
|
||
18.2.4
|
if
sent by fax, at the time of completion of the
transmission.
|
||
18.3
|
If
deemed receipt occurs after 5.00pm on a Business Day or on any day which
is not a Business Day, the notice shall be deemed to have been received on
the next Business Day.
|
||
18.4
|
For
the avoidance of doubt, notice given under this agreement shall not be
validly served if sent by e-mail.
|
||
19
|
Representatives
|
||
19.1
|
Xxxxxxx
Xxxxxxx is hereby appointed to act as the Managers' Representative for the
purposes of this agreement.
|
||
19.2
|
Each
of the Principal Shareholders hereby irrevocably confirms that such
Principal Shareholders shall be bound by any steps or actions taken or
agreement entered into by the Managers' Representative appointed and
acting on its behalf (or such other person appointed for the time being
pursuant to clause 19.3) appointed and acting as the Managers'
Representative on the terms of this agreement.
|
||
19.3
|
If,
for any reason, at any time the then current Managers' Representative
shall not be able to act, the Managers' Representative will promptly (and
in any event within ten Business Days of the day on which the previous
Managers' Representative has ceased to be able to act) nominate in writing
another person to fill the role of the Managers' Representative
hereunder. Notice of the appointment as Managers'
Representative of such other person shall be provided in writing to the
Buyer by the Managers' Representative and such other person shall be the
Managers' Representative in substitution for the then current Managers'
Representative from time to time.
|
||
19.4
|
Aberdeen
Asset Managers Limited is hereby appointed to act as the Institutions'
Representative for the purposes of this agreement.
|
||
19.5
|
Each
of the Institutional Sellers and Barclays hereby irrevocably confirms that
such Institutional Sellers shall be bound by any steps or actions taken or
agreement entered into by the Institutions' Representative appointed and
acting on its behalf (or such other person appointed for the time being
pursuant to clause 19.6) appointed and acting as the Institutions'
Representative on the terms of this
agreement.
|
21
19.6
|
If,
for any reason, at any time the then current Institutions' Representative
shall not be able to act, the Institutions' Representative will promptly
(and in any event within ten Business Days of the day on which the
previous Institutions' Representative has ceased to be able to act)
nominate in writing another person to fill the role of the Institutions'
Representative hereunder. Notice of the appointment as
Institutions' Representative of such other person shall be provided in
writing to the Buyer by the Institutions' Representative and such other
person shall be the Institutions' Representative in substitution for the
then current Institutions' Representative from time to
time.
|
||
20
|
General
|
||
20.1
|
Except
where this agreement provides otherwise, each party shall pay its own
costs relating to the negotiation, preparation, execution and performance
by it of this agreement and of each document referred to in
it.
|
||
20.2
|
A
variation of this agreement is valid only if it is in writing and signed
by or on behalf of each party. The Buyer and the Sellers shall not be
required to obtain the consent of the Company or any other third party on
whom a benefit is conferred under this agreement to the termination or
variation of this agreement or to the waiver or settlement of any right or
claim arising under it.
|
||
20.3
|
The
failure or delay in exercising a right or remedy provided by this
agreement or by law does not constitute a waiver of that (or any other)
right or remedy. No single or partial exercise of a right or
remedy provided by this agreement or by law prevents the further exercise
of that (or any other) right or remedy.
|
||
20.4
|
Except
to the extent that they have been performed or where this agreement
provides otherwise, the obligations contained in this agreement remain in
force after Completion.
|
||
20.5
|
Any
liability to the Buyer under this agreement may be released, compounded or
compromised (in whole or in part) and any time or indulgence may be given
by the Buyer in its absolute discretion as regards any of the Sellers
without in any way prejudicing or affecting the Buyer's rights against any
of the other Sellers in respect of that (or any other) liability, whether
joint or several or otherwise.
|
||
20.6
|
Each
provision of this agreement is severable and distinct from the
others. If any provision is or at any time becomes to any
extent or in any circumstances invalid, illegal or unenforceable for any
reason, it shall to that extent or in those circumstances be deemed not to
form part of this agreement but (except to that extent or in those
circumstances in the case of that provision) the validity, legality and
enforceability of that and all other provisions of this agreement shall
not be affected or impaired and shall remain valid and
enforceable.
|
||
20.7
|
If
any provision of this agreement is found to be illegal, invalid or
unenforceable in accordance with clause 20.7 but would be legal, valid or
enforceable if some part of the provision were deleted, the provision in
question shall apply with such modification(s) as may be necessary to make
it legal, valid or enforceable.
|
||
20.8
|
This
agreement may be executed in any number of counterparts each of which when
executed and delivered is an original but all the counterparts together
shall constitute the same document.
|
||
21
|
Further
Assurance
|
||
Without
prejudice to any other provision of this agreement, the Sellers shall, on
being required to do so by the Buyer, do or procure the doing of all such
acts and/or execute or procure the execution of such documents as the
Buyer may from time to time reasonably require in order to vest any of the
Shares in the Buyer (or its nominee) or
|
|||
22
(at
the cost of the Buyer, to the extent that such costs are reasonably and
properly incurred) to give effect to the provisions of this
agreement.
|
|||
22
|
Governing law and
jurisdiction
|
||
22.1
|
This
agreement is governed by English law.
|
||
22.2
|
The
courts of England have non-exclusive jurisdiction to hear and decide any
suit, action or proceedings, and to settle any disputes, which may arise
out of or in connection with this agreement and, for these purposes, each
party irrevocably submits to the jurisdiction of the courts of
England.
|
||
22.3
|
Each
party irrevocably waives any objection which it might at any time have to
the courts of England being nominated as the forum to decide any suit,
action or proceedings, and to settle any disputes, which may arise out of
or in connection with this agreement and agrees not to claim that the
courts of England are not a convenient or appropriate
forum.
|
||
IN
WITNESS whereof the parties have executed this agreement as
a deed and it is hereby delivered on the day and year first before
written.
|
23
Schedule
1 - The
Sellers
Part A – The Principal
Shareholders
(1)
Name
and
Address
|
(2)
Number
of B
Shares
|
Xxxxxx
Xxxxxxx Xxxxxxx
00
Xxxxxxx Xxxxx
Xxxxxxx
Xxxxxxx
Xxxxxxxxxx
XX00
0XX
|
489,099
|
Xxx
Xxxxxx
Heathercombe
Xxxxxxxx
Xxxx
Xxxxxxxxxx
Xxxxxxxxxx
XX0
0XX
|
235,393
|
Xxxxx
Xxxxxxx
0
Xxxxxxxxx Xxxxx
Xxxxxxxxx
Xxxxxxxx
XX0
0XX
|
314,581
|
Xxxxxxxx
Xxxxx
Xxxxxxxxx
Xxxxx
Xxxxxxx
Xxxxxxxxxxxxxxx
XX0
0XX
|
167,514
|
Xxxxxxx
Xxxxxxx
00
Xxx Xxxxxxx
Xxxxxx
Xxxxxxxxx
Xxxxxxxxxx
XX0
0XX
|
145,390
|
24
Part B – The Institutional
Sellers
(1)
Name
and
Address
|
(2)
No
of A
Shares
|
Aberdeen
Private Equity FundA
Xxx
Xxx Xxxxxxxxxx
Xxxxxx
XX0X
0XX
|
1,420,625
|
Aberdeen
Private Equity FundB
Xxx
Xxx Xxxxxxxxxx
Xxxxxx
XX0X
0XX
|
1,280,432
|
Aberdeen
Development Capital plc
00
Xxxxxx Xxxxxxx
Xxxxxxxx
Xxxxxxxxxxxxx
XX00
0XX
|
271,395
|
COIP
(UK) Limited
Xxx
Xxx Xxxxxxxxxx
Xxxxxx
XX0X
0XX
|
12,891
|
Hexagon
Investments LLC
000
Xxxxx 00xx
Xxxxxx
Xxxxx
000
Xxxxxxxxx
XXX
XX00000
|
339,243
|
Mellon
Nominees (UK) Limited
XX
Xxx 00000
000
Xxxxxxxx Xxxxxx
Xxxxxx
XX0X
0XX
|
80,740
|
Tameside
MBC
Council
Offices
Xxxxxxxxxx
Xxxx
Xxxxxx-xxxxx-Xxxx
XX0
0XX
|
461,967
|
West
Yorkshire Pension Fund
Xxx
Xxxx Xxxx
Xxxxxxxx
Xxxx
Xxxxxxxxx
XX0
0XX
|
203,629
|
Xxxxx
Xxxxxx Xxxxxx
0
Xxxxxxxx Xxxx
Xxxxxxxx
Xxxx
Xxxxxxx
Xxxx
Xxxxxx
Xxxxxxxxx
XX0
0XX
|
145,390
|
Xxxxx
Xxxxxxxxx Xxxxxx
Xxx
Xxxxx
Xxxxxxxxxxx
Xxxx
Xxxxxx
Xxxx
Xxxxxxxx
Xxxxxxxxx
XX0
0XX
|
145,390
|
25
Part C –
Barclays
(1)
Name
and
Address
|
(2)
No
of C
Shares
|
Barclays
Bank plc
|
179,864
|
26
Schedule
2 – The
Group
Part
1 – The Company
1
|
Registered
number:
|
5018017
|
2
|
Date
of incorporation:
|
16
January 2004
|
3
|
Place
of incorporation:
|
England
and Wales
|
4
|
Type
of company:
|
Private
limited company
|
5
|
Address
of registered office:
|
India
Mill
|
India
Xxxx Xxxxxxxx Xxxxxx
|
||
Xxxxxx
|
||
Xxxxxxxxxx
|
||
XX0
0XX
|
||
6
|
Authorised
share capital:
|
£59,954.67
divided into 4,361,702 A
|
ordinary
shares of 1p each, 1,453,901 B ordinary shares of 1p each and 179,864
ordinary shares of 1p each
|
||
7
|
Issued
share capital:
|
£59,954.64
divided into 4,361,702 A
|
ordinary
shares of 1p each and 1,453,898 B ordinary shares of 1p each and 179,864 C
ordinary shares of 1p each
|
||
8
|
Directors:
|
Xxxxxx
Xxxxxxx
|
Xxxxx
Xxxxxxx
|
||
Xxxxxxxx
Xxxxx
|
||
Guy
Xxxxxx
|
||
Xxxxxx
Xxxxxxx Xxxxxxx
|
||
Xxxxx
Xxxxxxxx
|
||
9
|
Secretary:
|
Xxx
Xxxxxx
|
10
|
Accounting
reference date:
|
30
September
|
11
|
Auditors:
|
KPMG
LLP
|
Part
2 – The Subsidiaries
Brookhouse
Group Holdings Limited
1
|
Registered
number:
|
04734539
|
2
|
Date
of incorporation:
|
15
April 2003
|
3
|
Place
of incorporation:
|
England
and Wales
|
4
|
Type
of company:
|
Private
limited company
|
5
|
Address
of registered office:
|
India
Mill
|
India
Xxxx Xxxxxxxx Xxxxxx
|
||
Xxxxxx
|
||
Xxxxxxxxxx
|
||
XX0
0XX
|
27
6
|
Authorised
share capital:
|
£1,000
divided into 1,000 ordinary shares of £1.00 each
|
7
|
Issued
share capital:
|
£1,000
divided into 1,000 ordinary shares of £1.00 each
|
8
|
Directors:
|
Xxx
Xxxxxx
|
Xxxxx
Xxxxxxx
|
||
9
|
Secretary:
|
Xxx
Xxxxxx
|
10
|
Accounting
reference date:
|
30
September
|
11
|
Auditors:
|
KPMG
LLP
|
Brookhouse
2004 Limited
1
|
Registered
number:
|
03566250
|
2
|
Date
of incorporation:
|
18
May 1998
|
3
|
Place
of incorporation:
|
England
and Wales
|
4
|
Type
of company:
|
Private
limited company
|
5
|
Address
of registered office:
|
India
Mill
|
India
Xxxx Xxxxxxxx Xxxxxx
|
||
Xxxxxx
|
||
Xxxxxxxxxx
|
||
XX0
0XX
|
||
6
|
Authorised
share capital:
|
£50,000
divided into 50,000 ordinary shares of £1.00 each
|
7
|
Issued
share capital:
|
£15,850,000
divided into 15,850 ordinary shares of £1.00 each
|
8
|
Directors:
|
Xxx
Xxxxxx
|
Xxxxx
Xxxxxxx
|
||
9
|
Secretary:
|
Xxx
Xxxxxx
|
10
|
Accounting
reference date:
|
30
September
|
11
|
Auditors:
|
KPMG
LLP
|
Part
3 –Subsidiaries of Brookhouse 2004 Limited
Brookhouse
Tooling Limited
1
|
Registered
number:
|
00656260
|
2
|
Date
of incorporation:
|
12
April 1960
|
3
|
Place
of incorporation:
|
England
and Wales
|
4
|
Type
of company:
|
Private
limited company
|
28
5
|
Address
of registered office:
|
India
Mill
|
India
Xxxx Xxxxxxxx Xxxxxx
|
||
Xxxxxx
|
||
Xxxxxxxxxx
|
||
XX0
0XX
|
||
6
|
Authorised
share capital:
|
£1,000,000
divided into 1,000,000 ordinary shares of £1.00 each
|
7
|
Issued
share capital:
|
£200,000
divided into 200,000 ordinary shares of £1.00 each
|
8
|
Directors:
|
Xxx
Xxxxxx
|
Xxxxx
Xxxxxxx
|
||
Xxxxxx
Xxxxxxx Xxxxxxx
|
||
9
|
Secretary:
|
Xxx
Xxxxxx
|
10
|
Accounting
reference date:
|
30
September
|
11
|
Auditors:
|
KPMG
LLP
|
Brookhouse
Composites Limited
1
|
Registered
number:
|
01898700
|
2
|
Date
of incorporation:
|
25
March 1985
|
3
|
Place
of incorporation:
|
England
and Wales
|
4
|
Type
of company:
|
Private
limited company
|
5
|
Address
of registered office:
|
India
Mill
|
India
Xxxx Xxxxxxxx Xxxxxx
|
||
Xxxxxx
|
||
Xxxxxxxxxx
|
||
XX0
0XX
|
||
6
|
Authorised
share capital:
|
£250,000
divided into 250,000 ordinary shares of £1.00 each
|
7
|
Issued
share capital:
|
£250,000
divided into 250,000 ordinary shares of £1.00 each
|
8
|
Directors:
|
Xxxx
Xxxxxxx Xxxxx
|
Xxxxxxx
Xxxxx Xxxxxxx
|
||
Xxx
Xxxxxx
|
||
Xxxxx
Xxxxxxx
|
||
Xxxx
Xxxxxxx Xxxx
|
||
Xxxxxxx
Xxxxxx Xxxxxx
|
||
Xxxxxx
Xxxxxxx Xxxxxxx
|
||
9
|
Secretary:
|
Xxx
Xxxxxx
|
10
|
Accounting
reference date:
|
30
September
|
11
|
Auditors:
|
KPMG
LLP
|
29
Brookhouse
Aerospace Limited
1
|
Registered
number:
|
03461761
|
2
|
Date
of incorporation:
|
6
November 1997
|
3
|
Place
of incorporation:
|
England
and Wales
|
4
|
Type
of company:
|
Private
limited company
|
5
|
Address
of registered office:
|
India
Mill
|
India
Xxxx Xxxxxxxx Xxxxxx
|
||
Xxxxxx
|
||
Xxxxxxxxxx
|
||
XX0
0XX
|
||
6
|
Authorised
share capital:
|
£1,000
divided into 1,000 ordinary shares of £1.00 each
|
6.1
|
Issued
share capital:
|
£400
divided into 400 ordinary shares of £1.00 each
|
7
|
Directors:
|
Xxx
Xxxxxx
|
Xxxxx
Xxxxxxx
|
||
Xxxxxx
Xxxxxxx Xxxxxxx
|
||
8
|
Secretary:
|
Xxx
Xxxxxx
|
9
|
Accounting
reference date:
|
30
September
|
10
|
Auditors:
|
KPMG
LLP
|
Brookhouse
(SPD) Tool Company Limited (dormant)
1
|
Registered
number:
|
02621734
|
2
|
Date
of incorporation:
|
19
June 1991
|
3
|
Place
of incorporation:
|
England
and Wales
|
4
|
Type
of company:
|
Private
limited company
|
5
|
Address
of registered office:
|
India
Mill
|
India
Xxxx Xxxxxxxx Xxxxxx
|
||
Xxxxxx
|
||
Xxxxxxxxxx
|
||
XX0
0XX
|
||
6
|
Authorised
share capital:
|
£5,000,000
divided into 5,000,000 ordinary shares of £1.00 each
|
7
|
Issued
share capital:
|
£1,000
divided into 1,000 ordinary shares of £1.00 each
|
8
|
Directors:
|
Xxx
Xxxxxx
|
Xxxxx
Xxxxxxx
|
30
9
|
Secretary:
|
Xxx
Xxxxxx
|
10
|
Accounting
reference date:
|
30
September
|
11
|
Auditors:
|
KPMG
LLP
|
Brookhouse
Automotive Limited (dormant)
1
|
Registered
number:
|
04090258
|
2
|
Date
of incorporation:
|
13
October 2000
|
3
|
Place
of incorporation:
|
England
and Wales
|
4
|
Type
of company:
|
Private
limited company
|
5
|
Address
of registered office:
|
India
Mill
|
India
Xxxx Xxxxxxxx Xxxxxx
|
||
Xxxxxx
|
||
Xxxxxxxxxx
|
||
XX0
0XX
|
||
6
|
Authorised
share capital:
|
£1,000
divided into 1,000 ordinary shares of £1.00 each
|
7
|
Issued
share capital:
|
£1,000
divided into 1,000 ordinary shares of £1.00 each
|
8
|
Directors:
|
Xxx
Xxxxxx
|
Xxxxx
Xxxxxxx
|
||
9
|
Secretary:
|
Xxx
Xxxxxx
|
10
|
Accounting
reference date:
|
30
September
|
11
|
Auditors:
|
KPMG
LLP
|
Brookhouse
IM Limited (dormant)
1
|
Registered
number:
|
03566142
|
2
|
Date
of incorporation:
|
18
May 1998
|
3
|
Place
of incorporation:
|
England
and Wales
|
4
|
Type
of company:
|
Private
limited company
|
5
|
Address
of registered office:
|
India
Mill
|
India
Xxxx Xxxxxxxx Xxxxxx
|
||
Xxxxxx
|
||
Xxxxxxxxxx
|
||
XX0
0XX
|
||
6
|
Authorised
share capital:
|
£10,000,000
divided into 10,000,000 ordinary shares of £1.00 each
|
7
|
Issued
share capital:
|
£2
divided into 2 ordinary shares of £1.00
each
|
31
8
|
Directors:
|
Xxx
Xxxxxx
|
Xxxxx
Xxxxxxx
|
||
9
|
Secretary:
|
Xxx
Xxxxxx
|
10
|
Accounting
reference date:
|
30
September
|
11
|
Auditors:
|
KPMG
LLP
|
32
Schedule 3 -
Completion
1
|
Items for delivery by
the Principal Shareholders
|
The
Principal Shareholders shall deliver or procure the delivery to the Buyer
of:
|
|
1.1
|
executed
transfers transferring the Shares held by them to the Buyer or its
nominee(s);
|
1.2
|
the
relevant share certificates for the Shares held by them or an indemnity in
the agreed form in respect of any missing certificates;
|
1.3
|
each
register, minute book and other book required to be kept by the Company
under the Companies Acts (in each case written up to Completion), each
certificate of incorporation and certificate of incorporation on change of
name for the Company and the common seal (if any) of the
Company;
|
1.4
|
the
share certificates for all issued shares in the capital of each Subsidiary
held by the Company;
|
1.5
|
a
letter, executed as a deed and in the agreed form, from Xxxxxx Xxxxxxx,
Xxxxx Xxxxxxxx and Xxxxxxxx Xxxxx in each case resigning their respective
office as director of the Company with effect from the end of the meeting
held pursuant to paragraph 4 below;
|
1.6
|
the
duly executed Disclosure Letter;
|
1.7
|
the
title deeds to the Properties, being the title deeds listed in the
schedules in the agreed form;
|
1.8
|
a
deed in the agreed form duly executed and delivered by Barclays Bank plc
releasing the security granted to them by the relevant Group
Company;
|
1.9
|
evidence
in a form reasonably acceptable to the Buyer of the exercise of the Bank
Warrants and the issue and allotment, credited as fully paid, of the
Warrant Shares;
|
1.10
|
confirmation,
in the agreed form, from Barclays Mercantile Business Finance
Limited;
|
1.11
|
the
Escrow Agreement, duly executed on behalf of the Managers' Representative
and the Institutions' Representative;
|
1.12
|
duly
executed service agreements between the Company and each Principal
Shareholder except for Xxxxxxxx Xxxxx in the agreed
form;
|
1.13
|
a
duly executed service agreement between the Company and Xxx Xxxxxxxxxxx in
the agreed form;
|
1.14
|
the
duly executed deed of covenant from Xxxx Xxxxxxxx;
|
1.15
|
a
deed of termination in the agreed form in respect of the Investment
Agreement duly executed and delivered by each of the parties to the
Investment Agreement;
|
1.16
|
a
unanimous written resolution of the Sellers adopting new articles of
association of the Company in the agreed form with effect from the
Completion Date; and
|
1.17
|
Evidence
in the agreed form that no Group Company has any liability or obligation
in respect of the fees or expenses of any adviser or consultant engaged by
any of the Sellers in connection with the Transaction including, without
limitation, the Sellers' Solicitors and Xxxxxxxx
Quarterdeck.
|
33
2
|
Items for
delivery by Barclays
|
Barclays
shall deliver to the Buyer:
|
|
2.1
|
executed
transfers transferring the Shares held by them to the Buyer or its
nominee(s); and
|
2.2
|
the
relevant share certificates for the Shares held by them or an indemnity in
the agreed form in respect of any missing certificates.
|
3
|
Items for delivery by
the Institutional Sellers (other than Barclays)
|
The
Institutional Sellers shall procure the delivery to the Buyer
of:
|
|
3.1
|
executed
transfers transferring the Shares held by them to the Buyer or its
nominee(s);
|
3.2
|
the
relevant share certificates for the Shares held by them or an indemnity in
the agreed form in respect of any missing certificates;
|
3.3
|
such
duly authorised powers of attorney or other signing authorities as may be
required conferring authority on any person signing this agreement and the
documents referred to in this agreement on behalf of any AAM
Fund;
|
3.4
|
the
deed of release of the security securing the Loan Note Indebtedness, in
the agreed form, duly executed;
|
3.5
|
the
Loan Notes marked on their face as "CANCELLED";
|
3.6
|
the
Loan Note register showing that the Loan Notes have been redeemed;
and
|
3.7
|
a
deed of termination in the agreed form in respect of the Security Trust
Deed duly executed and delivered by each of the parties to the Security
Trust Deed;
|
3.8
|
the
duly executed deed of covenant from Aberdeen Asset Managers
Limited.
|
4
|
Board
meetings
|
The
Principal Shareholders shall procure that a meeting of the board of
directors of the Company is held at which the directors
shall:
|
|
4.1
|
vote
in favour of the registration of the Buyer or its nominee(s) as member(s)
of the Company in respect of the Shares (subject only to the production of
properly stamped transfers);
|
4.2
|
appoint
persons nominated by the Buyer as directors, secretary and auditors of the
Company with effect from the end of the meeting;
|
4.3
|
approve
and authorise the Company's execution of a deed of termination of the
investment agreement;
|
4.4
|
The
Principal Shareholders shall procure that immediately after the board
meeting referred to above, any meeting of the board of directors of a
Subsidiary that is required to be held by the Buyer is held and that such
meeting deals with any of the matters referred to above in this
paragraph 4 as the Buyer may require.
|
5
|
Obligations of the
Buyer
|
The
Buyer shall:
|
34
5.1
|
deliver
to the Sellers the following documents duly executed by the
Buyer:
|
|
5.1.1
|
the
Escrow Agreement; and
|
|
5.1.2
|
the
Disclosure Letter;
|
|
5.2
|
procure
that the Company is put in funds to repay the Bank Indebtedness and the
Loan Note Indebtedness and that the Company repays such
sums.
|
35
Schedule
4 –
Warranties
Part
A – Title and Capacity
1
|
Capacity and
authority
|
||||
1.1
|
The
Sellers have the requisite power and authority and have taken all action
necessary to enable them to enter into and perform this agreement and all
agreements or documents entered into, or to be entered into, pursuant to
the terms of this agreement.
|
||||
1.2
|
This
agreement and all agreements or documents entered into, or to be entered
into, pursuant to the terms of this agreement constitute (or will
constitute when executed) valid legal and binding obligations on the
Sellers in accordance with their respective terms.
|
||||
1.3
|
Compliance
with the terms of this agreement and all agreements or documents entered
into, or to be entered into, pursuant to the terms of this agreement does
not and will not conflict with or constitute a default or breach under any
provision of:
|
||||
1.3.1
|
any
agreement or instrument to which a Seller is a party or by which it is
bound; or
|
||||
1.3.2
|
where
applicable, a Seller’s memorandum or articles of association (or
equivalent documents); or
|
||||
1.3.3
|
any
order, judgment, award, injunction, decree, ordinance or regulation or any
other restriction of any kind or character by which a Seller is bound or
submits.
|
||||
2
|
The
Shares
|
||||
2.1
|
Each
Seller is the sole legal and beneficial owner of the number of Shares
specified opposite his name in schedule 1 and is entitled to sell such
Shares on the terms of this agreement without the consent of any third
party.
|
||||
2.2
|
There
is no Encumbrance in relation to any of the Shares or unissued shares in
the capital of the Company.
|
||||
2.3
|
Other
than this agreement, there is no agreement requiring the allotment, issue,
transfer, redemption or repayment of, or the grant to a person of the
right (conditional or not) to require the allotment, issue, transfer,
redemption or repayment of, a share in the capital of the
Company.
|
||||
Part
B – General Warranties
|
|||||
1
|
The Company and the
Subsidiaries
|
||||
1.1
|
The
Company
|
||||
1.1.1
|
The
Company is a limited company incorporated under English law and has been
in continuous existence since incorporation.
|
||||
1.1.2
|
The
information in schedules 1 and 2 is true and accurate.
|
||||
1.1.3
|
The
Shares and the shares to be sold pursuant to the Minor Sale Agreement
comprise the whole of the Company's allotted and issued share capital and
are fully paid or credited as fully
paid.
|
36
1.1.4
|
There
is no shadow director of the Company.
|
||||
1.1.5
|
The
Company has not given any power of attorney by which a person may enter
into an agreement on the Company's behalf (other than an authority for a
director, other officer or employee to enter into an agreement in the
ordinary course of his duties).
|
||||
1.2
|
Subsidiary
Undertakings
|
||||
1.2.1
|
Other
than the Subsidiaries:
|
||||
(a)
|
the
Company does not have, and has not within the last three years had, a
subsidiary undertaking; and
|
||||
(b)
|
the
Company does not hold shares in the capital of another
company.
|
||||
1.2.2
|
Each
allotted and issued share in the capital of each Subsidiary is legally and
beneficially owned by the Company and is fully paid or credited as fully
paid.
|
||||
1.2.3
|
There
is no Encumbrance in relation to a share or any unissued shares in the
capital of a Subsidiary.
|
||||
1.2.4
|
There
is no agreement requiring the allotment, issue, transfer, redemption or
repayment of, or the grant to a person (other than the Company) of the
right (conditional or not) to require the allotment, issue, transfer,
redemption or repayment of, a share in the capital of a
Subsidiary.
|
||||
1.2.5
|
Each
Group Company operates its business in accordance with its memorandum and
articles of association.
|
||||
2
|
Accounts and
Records
|
||||
2.1
|
The
Accounts
|
||||
The
Accounts:
|
|||||
2.1.1
|
comply
with the requirements of the Companies Acts, other relevant statutes and
UKGAAP at the date on which the Accounts were approved by the
directors;
|
||||
2.1.2
|
give
a true and fair view of the financial position and state of affairs of the
Group as at the Accounts Date and of its profit or loss and (where
applicable) cash flow for the period ending on that
date;
|
||||
2.1.3
|
are
not affected by any exceptional or non-recurring items;
and
|
||||
2.1.4
|
have
been prepared on a basis consistent with that used for the preparation of
the Company's accounts for the preceding 3 financial
periods.
|
||||
2.1.5
|
In
addition, the Accounts:
|
||||
(a)
|
contain
either provisions adequate to cover, or full particulars in notes, of all
Tax (including deferred Tax) and other liabilities (whether quantified,
contingent or otherwise) of the Group Companies as at the Accounts Date,
as required by UKGAAP;
|
||||
(b)
|
are
not affected by any unusual or non-recurring items;
and
|
37
(c)
|
make
provision reasonably regarded at that time as adequate for all bad and
doubtful debts as at the Accounts Date on a basis consistent with
UKGAAP.
|
||
2.2
|
Management
Accounts
|
||
The
Management Accounts have been properly prepared on a basis consistent with
and applying the same accounting policies, standards and practices as
those adopted in the preparation of the Accounts and give a fair view of
the assets and liabilities of the relevant Group Company, as at 30 April
2008 and of its profits and losses for the seven month period then
ended.
|
|||
2.3
|
The Balance
Sheet
|
||
The
Balance Sheet gives a fair view of the consolidated state of affairs and
the assets and liabilities of the Group as at the Balance Sheet Date, and
was prepared in accordance with the accounting policies, procedures and
practices adopted in the preparation of the Accounts.
|
|||
2.4
|
Records
|
||
All
statutory records required by the Companies Acts to be kept or filed by
each Group Company are up to date and have been properly kept or filed and
comply with the requirements of the Companies Acts. No notice
has been received by any Group Company that any of those records is
incorrect or should be rectified.
|
|||
3
|
Changes since the
Accounts Date
|
||
3.1
|
Since
the Accounts Date:
|
||
3.1.1
|
each
Group Company has conducted its business in a normal and proper manner and
in the ordinary and normal course so as to maintain the same as a going
concern;
|
||
3.1.2
|
no
Group Company has entered into any contract outside the ordinary and
normal course of business;
|
||
3.1.3
|
no
Group Company has entered into, nor agreed to enter into, any capital
commitments exceeding £25,000 (exclusive of VAT) in the case of any single
item or project or £50,000 (exclusive of VAT) in
aggregate;
|
||
3.1.4
|
there
have been no changes in the accounting policies or practices of any Group
Company (including any change in policies or practices relating to
depreciation or amortisation or reserving or provisioning with respect to
debtors) and no revaluation of any Group Company's properties or
assets;
|
||
3.1.5
|
no
Group Company has acquired or disposed of any business or asset with a
value in excess of £50,000;
|
||
3.1.6
|
no
Group Company has assumed or incurred any liabilities otherwise than in
the ordinary and normal course of business;
|
||
3.1.7
|
no
share or loan capital of any Group Company has been, or agreed to be,
issued, allotted, redeemed, purchased or repaid;
|
||
3.1.8
|
no
Group Company has changed its accounting reference period;
and
|
||
3.1.9
|
no
Group Company has declared, made or paid any dividend or other
distribution.
|
38
3.2
|
Since
30 April 2008, there has been no material adverse change in the turnover
of any Group Company compared to the 6 plus 6 forecast, a copy of which is
supplied at Document G.4.1.3 in the Data Room.
|
||
4
|
Assets
|
||
4.1
|
General
|
||
4.1.1
|
Each
asset (other than the Properties) included in the Accounts or acquired by
a Group Company since the Accounts Date (other than stock disposed of in
the ordinary course of business) and each asset used by each Group Company
is:
|
||
(a)
|
legally
and beneficially owned by the relevant Group Company free from any
Encumbrance;
|
||
(b)
|
where
capable of possession, in the possession or under the control of the
relevant Group Company; and
|
||
(c)
|
situated
in the United Kingdom.
|
||
4.1.2
|
The
property, rights and assets owned, leased or licensed by each Group
Company comprise all the property, rights and assets which in the
reasonable opinion of the Principal Shareholders are necessary for the
carrying on of the business of the relevant Group Company to the extent to
which it is conducted as at the date of this agreement.
|
||
4.2
|
Hire purchase and
leased assets
|
||
A
true and accurate list of all the assets used by the Group Companies which
are subject to a lease or hire, hire purchase, credit sale or conditional
sale agreement involving an annual expenditure by any Group Company in
excess of £25,000 is included in the Disclosure Letter.
|
|||
4.3
|
Vulnerable antecedent
transactions
|
||
No
Group Company has at any relevant time been party to a transaction
pursuant to or as a result of which an asset owned by any Group Company is
liable to be transferred or re-transferred to another person, or may give
rise to a right of compensation or other payment in favour of another
person, other than a transaction at arm's length terms.
|
|||
4.4
|
Intellectual Property
and Information Technology
|
||
4.4.1
|
The
Company Intellectual Property is legally and beneficially owned by the
relevant Group Company, free from any licence, Encumbrance, restriction on
use or disclosure obligation. Details of all registered Company
Intellectual Property are set out in Schedule 8.
|
||
4.4.2
|
No
Group Company has granted any licence, assignment or other right in
respect of any of the Company Intellectual Property.
|
||
4.4.3
|
The
Disclosure Letter sets out references to the document numbers of the Data
Room where Intellectual Property Agreements are disclosed and to which
each Group Company is a party, other than in respect of prepackaged
software agreements, where information in relation to such agreements is
disclosed in the Data Room. No Group Company is in breach of
any such agreement and, so far as the Principal Shareholders are aware, no
third party
|
39
is
in breach of any such agreement and all such agreements are in force and
subsisting.
|
|||
4.4.4
|
The
Company Intellectual Property is not and, so far as the Sellers are aware,
will not be, the subject of a claim or opposition from a person as to
title, validity, enforceability, entitlement or
otherwise.
|
||
4.4.5
|
So
far as the Principal Shareholders are aware, the activities, processes,
methods, products or services carried out, used, manufactured, dealt in or
supplied on or before the date of this agreement by each Group
Company:
|
||
(a)
|
do
not involve the unlicensed use of a third party's Intellectual Property or
confidential information;
|
||
(b)
|
do
not at the date of this agreement, nor did they at the time carried out,
used, manufactured, dealt in or supplied, infringe the Intellectual
Property (including moral rights) of another person.
|
||
4.4.6
|
No
Group Company has claimed that a person is infringing any Company
Intellectual Property, nor, so far as the Principal Shareholders are aware
is there any fact or matter which would give rise to such a
claim.
|
||
4.4.7
|
Each
Group Company owns or is licensed to use all Intellectual
Property used in the operation of the business of each Group Company
as now conducted.
|
||
4.4.8
|
Each
Group Company has taken commercially reasonable steps to maintain the
confidentiality of all material Confidential Information of the
Group. The Group enforces a policy that requires all employees
and contractors of the Group, other than hourly paid employees, to execute
either employment or consultancy contracts containing provisions pursuant
to which such employees or contractors (as the case may be) agree not to
disclose any Confidential Information and to assign inventions to the
employing or engaging Group Company, substantially in the Group's standard
forms. Hourly paid employees do not obtain any access to
Confidential Information. No Group Company has disclosed nor has any
obligation to disclose to another person any Confidential Information,
except pursuant to a confidentiality agreement or undertaking. To the
Sellers' Knowledge, no person has breached any agreement or undertaking
relating to Confidential Information nor are the Sellers aware of any fact
or matter which may give rise to such a breach
|
||
4.4.9
|
The
Information Technology systems owned by or licensed to each Group
Company:
|
||
(a)
|
comprise
all material computer hardware and software systems used in the operation
of the business of each Group Company as carried on at the date of this
agreement;
|
||
(b)
|
have
not during the twelve months prior to the date of this agreement failed to
perform in any way that materially adversely affected the business of
any Group Company; and
|
||
(c)
|
have
been maintained consistently with each Group Company's plans for that
system.
|
||
4.4.10
|
No
Group Company is in material breach of any agreement relating to
Information Technology.
|
40
4.4.11
|
Each
Group Company has in place procedures intended to reduce the risk of
unauthorised external access to data, the introduction of viruses, taking
and storing on site and off site back up copies of software and data
material to its business.
|
||
5
|
Debtors /
creditors
|
||
5.1
|
A
true and accurate list of debtors of the Group Companies as at 31 May 2008
is supplied at Disclosure Documents N.29 to N.31
(inclusive).
|
||
5.2
|
No
Group Company is a party to any factoring or discounting arrangement in
respect of any debts shown in the Accounts or the Management
Accounts.
|
||
5.3
|
No
Group Company is owed any sums other than trade debts incurred in the
ordinary and normal course of its business.
|
||
5.4
|
A
true and accurate list of the creditors of the Group Companies as at 31
May 2008 is supplied at Disclosure Documents N.32 to N.34
(inclusive).
|
||
6
|
Agreements
|
||
6.1
|
No
Group Company is a party to any agreement which:
|
||
6.1.1
|
is
not of an entirely arms' length nature;
|
||
6.1.2
|
was
entered into other than in the ordinary and normal course of
business;
|
||
6.1.3
|
is
a sale or purchase or option agreement affecting any material asset of a
Group Company other than in the ordinary and normal course of
business;
|
||
6.1.4
|
so
far as the Principal Shareholders are aware will result in a loss to the
Group which will have a material effect of the business of the Group as a
whole;
|
||
6.1.5
|
is
for the provision of advisory or consultancy services to the management of
any Group Company and which is not terminable by it on less than three
months' notice without compensation;
|
||
6.1.6
|
is
a Material Agreement incapable of termination in accordance with its terms
without payment of penalties, compensation or damages by that Group
Company on 90 days' notice or less otherwise than is included in the Data
Room; or
|
||
6.1.7
|
is
a distributorship, agency, franchise or management agreement or
arrangement.
|
||
6.2
|
No
Group Company or any of the Principal Shareholders have any knowledge of
the invalidity of, or a ground for termination of a Material Agreement or
any Intellectual Property Agreement to which any Group Company is a party.
No Group Company has received written notice from a party to such an
agreement of its intention to terminate such agreement.
|
||
6.3
|
Neither
any Group Company nor, so far as the Principal Shareholders are aware, any
other party to a Material Agreement entered into by that Group Company is
in breach of such agreement.
|
||
6.4
|
For
the purposes of paragraphs 6.1, 6.2 and 6.3, "Material Agreement" means an
agreement with customers or an agreement with suppliers for the supply of
raw materials.
|
41
6.5
|
No
offer, tender or similar arrangement is outstanding which is capable of
being converted into an obligation of any Group Company by an acceptance
or act of a third party other than any such offers, tenders or similar
arrangements made in the ordinary and normal course of
business.
|
||
6.6
|
There
is at Document C.2.17 of the Data Room a true and accurate list of the 10
largest suppliers (by purchases) within the last 12 months to the
Group.
|
||
6.7
|
Other
than the sole source supplies required by customers which are set out in
the contracts contained in the Data Room, the only sole source of supply
of products are for the fuel tank access cover or fuel tank access door
and these are fairly disclosed in the Disclosure
Documents.
|
||
6.8
|
No
Group Company is a member of any joint venture, consortium, partnership or
other unincorporated association.
|
||
6.9
|
No
Group Company is a party to any agreement or arrangement which restricts
in any respect its freedom to carry on the whole or any part of its
business in any part of the world in such manner as it thinks
fit.
|
||
7
|
Employees
|
||
7.1
|
The
Disclosure Letter contain true and accurate details of the identity of
each person who is not a Director, Employee or Worker who provides
services to any Group Company, the job description, the location of the
services they provide, the terms on which they are engaged and the
identity of the company which engages them.
|
||
7.2
|
The
Disclosure Letter, Disclosure Documents and documents in the Data Room
contain true and accurate details of:
|
||
7.2.1
|
the
total number of Directors, Employees and Workers, including true and
accurate details of those who are on maternity leave or absent because of
disability or other leave of absence which has been, or which any Group
Company has been notified will be, in excess of 8 weeks;
and
|
||
7.2.2
|
the
name, job description, date of start of employment, period of continuous
employment, salary and other benefits of any nature and age of each
Director, Employee and Worker and copies of any applicable standard terms
of employment or engagement, staff handbooks and policies, identifying to
whom they apply; and
|
||
7.2.3
|
the
terms of the contracts and of payment of any remuneration, and other
benefits of any nature in respect of each Director, Employee and Worker
entitled to remuneration at an annual rate, or an average annual rate over
the three financial years ending on the date of this agreement, of more
than £50,000;
|
||
7.2.4
|
any
formal written disciplinary or grievance proceedings taken within the past
12 months by or against any Director, Employee or
Worker;
|
||
7.2.5
|
the
membership, constitution and duties of the "Remuneration Committee"
referred to in any contract referred to in this clause
7.2.
|
||
7.3
|
No
Group Company has announced or become obliged to make any material changes
to any remuneration since 1 January 2008.
|
||
7.4
|
Save
as set out in the documents in the Data Room, none of the contracts
referred to in this paragraph 7 are terminable in accordance with their
terms on more than 3 months'
notice.
|
42
7.5
|
Since
the Accounts Date:
|
||
7.5.1
|
no
gratuitous payments or bonuses have been made, nor has any commitment to
make such a payment other than the Bonus;
|
||
7.5.2
|
the
basis of the remuneration payable to the Directors, Employees and/or
Workers has not altered no Group Company is obliged to increase, nor has
it made provision to increase, the total annual remuneration payable to
its Directors, Employees or Workers by more than 5% in
aggregate.
|
||
7.6
|
Each
Group Company has discharged its financial obligations in full to each
Director, Employee and Worker and no Group Company owes or is obliged to
pay in the future any amount to a present or former Director, Employee or
Worker other than for accrued remuneration or reimbursement of business
expenses.
|
||
7.7
|
Each
Group Company has maintained such records as it is required to maintain by
law regarding the employment of each of its Directors, Employees and
Workers and such records are up-to-date and accurate.
|
||
7.8
|
No
Group Company has dismissed any Director, Employee or Worker in
contemplation of the transaction contemplated by this agreement or in the
6 month period immediately preceding the date of this agreement and no
Director, Employee or Worker has given or received notice of termination
of their engagement.
|
||
7.9
|
There
is no obligation on the part of any Group Company pursuant to which any
Director, Employee or Worker will be entitled to receive any payment or
benefit or any change of rights as a consequence of the transaction
contemplated by this agreement other than the Bonus.
|
||
7.10
|
No
outstanding offer of employment had been made by any Group Company to any
person entitled to remuneration over £50,000.
|
||
7.11
|
No
Group Company has any agreement or arrangement with and does not recognise
any trade union, works council, staff association or other body
representing any of its Directors, Employees or Workers and no relevant
request or application has been made.
|
||
7.12
|
There
are no legal or other proceedings between any Group Company on the one
hand and any current or former Director, Employee or Worker on the other
hand nor, so far as the Principal Shareholders are aware, are there any
facts or circumstances which are likely to give rise to any such
proceedings, claim or right of action.
|
||
7.13
|
No
Director, Employee or Worker has previously transferred to any Group
Company by operation of the Transfer of Undertakings (Protection of
Employment) Regulations 2006 or its predecessor ("TUPE").
|
||
7.14
|
No
Group Company engages any commercial agents for the purposes of the
Commercial Agents (Council Directive) Regulations 1993 or any worker
through any employment agency.
|
||
7.15
|
All
employment agreements with any Director, Employee or Worker entitled to
annual remuneration over £50,000 to which any Group Company is a party are
valid, binding and in full force and effect and no Principal Shareholders
has any knowledge of the invalidity of, or a ground for termination of,
any such agreement. No party to such an agreement has given
notice of its intention to terminate the
agreement.
|
43
8
|
Pensions and other
benefits
|
||
8.1
|
In
this paragraph 8, in addition to the words and expressions defined in
clause 1.1, the following words and expressions shall have the following
meanings:
|
||
"Pension
Schemes"
|
|||
the
group personal pension schemes maintained and operated by Standard Life
and Prudential and the stakeholder pension scheme maintained and operated
by Standard Life.
|
|||
8.2
|
Except
for the Pension Schemes, there is not in operation (and no proposal has
been announced to enter into or establish) any plan, scheme, agreement,
arrangement, custom or practice, obligation or commitment (whether legally
binding or not) for the payment or provision of (or for the payment of any
contribution towards), any pensions, superannuation allowances, life
assurance benefits or other like benefits payable on retirement, death,
termination of employment (whether voluntary or not) or during periods of
sickness or disablement for the benefit of any of the employees (or former
employees) of any Group Company or their dependants and nothing has been
done to create a reasonable expectation that any such payments, provision
or contributions will be made. No Group Company has
participated in or contributed towards any former scheme or arrangement
which has, as its purpose or one of its main purposes, the provision of
"relevant benefits" (within the meaning of section 393B of the Income Tax
(Earnings and Xxxxxxxx) Xxx 0000 (ignoring the exemption contained in that
section) including the making or any payment of contributions
to or remunerations specifically referable to contributions to any
personal pension scheme, stakeholder pension scheme, retirement annuity
contract or similar arrangement ("Relevant Benefits") in
respect of which there is any residual liability.
|
||
8.3
|
Details
of the Pension Schemes, including copies of all documents that govern the
Pension Schemes, a list of current members and details of the rate at
which and the basis upon which any Group Company currently contributes to
each Pension Scheme, are included in the Disclosure Letter and/or the
documents in the Data Room.
|
||
8.4
|
Save
for any lump sum death in service benefits, all benefits payable or
prospectively or contingently payable under the Pension Schemes are "money
purchase benefits" within the meaning of section 181(1) of the Xxxxxxx
Xxxxxxx Xxx 0000 and no promise or assurances (oral or written) has been
given to any person that his or her benefits under the Pension Schemes
(other than lump sum death in service benefits) will be calculated by
reference to a person's remuneration or equate (approximately or exactly)
to any particular amount.
|
||
8.5
|
All
contributions to the Pension Schemes which have fallen due for payment to
or in respect of the Pension Schemes prior to the date of this agreement
have been paid to the trustees or managers of the Pension Schemes within
any applicable prescribed period under the Pensions Xxx 0000, the Pensions
Xxx 0000 and the Pension Schemes governing documentation. The
contribution rates fairly disclosed to the Buyer in the documents
contained in the Data Room are the current rates
applicable.
|
||
8.6
|
With
effect from 8 October 2001, each Group Company has complied at all times
with its obligation to designate and provide access to a stakeholder
pension scheme for all of its "relevant employees" (as defined in the
Welfare Reform and Pensions Act 1999 (as amended) and there is no failure
on the part of any Group Company with its obligations in relation to any
designated stakeholder pension scheme which could give rise to the
imposition of a fine by the Pensions Regulator.
|
||
8.7
|
No
Group Company has proposed, and will not before Completion make or
propose, any voluntary or ex-gratia payments of Relevant Benefits to or in
respect of any person and is not due to make any such payments in the
future.
|
44
8.8
|
No
undertaking or assurance (whether legally binding or not) has been given,
or will before Completion be given, by any Group Company to any person as
to the introduction, continuance, increase or improvement of any Relevant
Benefits.
|
||
8.9
|
No
discrimination by reason of sex, disability, sexual orientation or marital
status is occurring or has occurred in the provision of Relevant Benefits
to or in respect of any Director, Employee or Worker.
|
||
8.10
|
The
Pension Schemes have at all times complied with the Employment Equality
(Age) Regulations 2006 (as amended).
|
||
8.11
|
All
death benefits which may be payable are fully insured with an insurance
company authorised under the Financial Services and Markets Xxx 0000 to
carry on long term insurance business. All policies and
contracts under which such benefits are insured are enforceable and there
is no ground on which the insurance company concerned might avoid
liability under such policy or contract. Each member and
beneficiary has been covered for such insurance by such insurance company
at its normal rates and on its normal terms for persons in good
health. There is no person insured under any of the Pension
Schemes who is not eligible to be so and the trustees of the relevant
schemes are able to provide such cover without contravening section 255 of
the Pensions Xxx 0000.
|
||
8.12
|
Neither
the Pension Schemes nor any Group Company is engaged or involved in any
complaints, disputes or proceedings which relate to or are in connection
with the Pension Schemes or the benefits they provide and, so far as the
Principal Shareholders are aware, there are no facts or circumstances
likely to give rise to any such proceedings.
|
||
8.13
|
No
person has had his or her contract or employment transferred to a Group
Company from another employer in circumstances where the Transfer of
Undertakings (Protection of Employment) Regulations 2006 (as amended) or
the Transfer of Employment (Pension Protection) Regulations 2005
applied.
|
||
9
|
Insurance
|
||
9.1
|
The
Disclosure Letter contains a true and accurate list of each current
insurance and indemnity policy in respect of which any Group Company has
an interest (together the "Policies").
|
||
9.2
|
All
premiums due in respect of the Policies have been paid up to date and, so
far as the Principal Shareholders are aware, each of the Policies is
currently in force, valid and enforceable.
|
||
9.3
|
No
claim is outstanding under any of the Policies and, so far as the
Principal Shareholders are aware, there is no fact or circumstance which
is likely to give rise to a claim under any of the
Policies.
|
||
9.4
|
So
far as the Principal Shareholders are aware, nothing has been done or
omitted to be done which could make any policy of insurance void or
voidable.
|
||
9.5
|
The
documents contained in the Data Room set forth all insurance claims of any
Group Company for the past three years under any policy of
insurance.
|
||
10
|
Finance, borrowing and
guarantees
|
||
10.1
|
The
Disclosure Letter contains true and accurate details of all investment,
deposit and bank accounts maintained by or on behalf of each Group Company
and of the banks or other financial institutions at which those accounts
are kept.
|
45
10.2
|
The
statement of the Group Companies bank accounts and of the credit or debit
balances on them attached to the Disclosure Letter is correct as at 10
June 2008 and the Group Companies have no other bank or deposit accounts
(whether in credit or overdrawn) not included in the statement and since
the date of that statement there has not been any payment out of any of
the accounts except for payments made in the ordinary and normal course of
the Group Companies business.
|
||
10.3
|
There
are no unpresented cheques drawn by any Group Company other than in the
ordinary and normal course of business.
|
||
10.4
|
No
Group Company is a party to or is liable under a guarantee or indemnity to
secure or incur a financial or other obligation with respect to another
person's obligation.
|
||
10.5
|
No
part of the loan capital, borrowing or indebtedness of any Group Company
is dependent on the guarantee or indemnity of, or security provided by,
another person.
|
||
10.6
|
There
are no banking facilities or borrowings that are available to any Group
Company or in respect of which any Group Company has any obligation or
liability as at Completion which are not being discharged at
Completion.
|
||
10.7
|
No
Group Company is subject to any arrangement for receipt or repayment of
any grant, subsidy or financial assistance from any governmental
authority.
|
||
11
|
Litigation
|
||
11.1
|
Except
in relation to the collection of unpaid debts arising in the ordinary
course of business, no Group Company is involved in a civil, criminal,
arbitration, administrative or other proceeding.
|
||
11.2
|
So
far as the Principal Shareholders are aware, no fact or circumstance
exists which is likely to give rise to a civil, criminal, arbitration,
administrative or other proceeding involving any Group
Company.
|
||
11.3
|
There
is no outstanding judgment, order, decree, arbitral award or decision of a
court, tribunal, arbitrator or governmental agency against any Group
Company.
|
||
12
|
Insolvency, winding
up, bankruptcy
etc.
|
||
12.1
|
No
order or application has been made or resolution passed for the winding up
of any Group Company or for the appointment of a provisional liquidator to
a Group Company or for an administration order in respect of any Group
Company.
|
||
12.2
|
No
receiver or administrative receiver or receiver and manager has been
appointed of the whole or part of the business or assets of any Group
Company.
|
||
12.3
|
No
voluntary arrangement has been proposed under section 1 of the Insolvency
Xxx 0000 in respect of any Group Company. No compromise or arrangement has
been proposed, agreed to or sanctioned under section 899 CA2006 in respect
of any Group Company.
|
||
12.4
|
No
Group Company is insolvent or unable to pay its debts within the meaning
of section 123 of the Insolvency Xxx 0000. No Group Company has stopped
paying its debts as they fall due.
|
||
12.5
|
No
distress, execution or other process has been levied on an asset of any
Group Company.
|
||
12.6
|
So
far as the Principal Shareholders are aware, no action is being taken by
the registrar of companies to strike any Group Company off the register
under section 652 CA1985.
|
46
13
|
Compliance with
law
|
||
13.1
|
Each
Group Company has at all times carried on its business in compliance with
the applicable legal and administrative requirements, laws and regulations
of the territories in which it operates.
|
||
13.2
|
So
far as the Principal Shareholders are aware there is not in existence or
pending any governmental or other regulatory investigation, enquiry or
disciplinary proceeding concerning any Group Company.
|
||
14
|
Permits
|
||
14.1
|
Each
Group Company has obtained all permits, licences or consents which are
necessary for that Group Company to own and operate its assets and to
carry on its current business (each a "Permit"). No
Permit has been breached and, so far as the Principal Shareholders are
aware, no facts exist that are likely to result in the revocation,
suspension or modification of any Permits or that is likely to prejudice
their renewal provided that no warranty is given in this paragraph 14 to
any Permit:
|
||
14.1.1
|
relating
to Environmental, Intellectual Property and Information Technology
matters; or
|
||
14.1.2
|
which
is revoked, suspended, modified or prejudiced as a result of the
Transaction.
|
||
14.2
|
Each
Permit is in full force and effect so far as the Principal Shareholders
are aware no Group Company has received any written notification that any
Permit might be revoked, cancelled or not renewed.
|
||
14.3
|
No
Permit is personal to the Sellers.
|
||
15
|
Competition
|
||
15.1
|
No
Group Company is a party to any agreement, arrangement or practice
which:
|
||
15.1.1
|
is
or ought to have been registered under the Restrictive Trade Practices Xxx
0000 and/or 1977;
|
||
15.1.2
|
infringes
or has infringed the Competition Xxx 0000 or the Enterprise Xxx
0000;
|
||
15.1.3
|
infringes
or has infringed Articles 81 or 82 of the EC Treaty;
|
||
15.1.4
|
infringes
or has infringed any other laws relating to anti competitive
activities;
|
||
15.1.5
|
is
void or unenforceable (whether in whole or in part) or may render any
Group Company liable to proceedings under any such legislation as is
referred to in sub-paragraphs 15.1.1 to 15.1.4 above.
|
||
15.2
|
No
Group Company has received a written notice of any breach of any
competition, anti-trust, anti-restrictive trade practice or consumer
protection law nor is it the subject of any investigation, enquiry, report
or order by any regulatory authority under any such law, rule or
regulation.
|
||
15.3
|
No
Group Company is a party to any agreement, arrangement or business
practice or is involved in any business practice in respect of
which:
|
47
15.3.1
|
any
request for information, statement of objections or similar matter has
been received from any court, tribunal, governmental, national or
supra-national authority; or
|
||
15.3.2
|
an
application for negative clearance or exemption has been made to the
Commission of the European Communities or any other regulatory
authority.
|
||
16
|
Insider
agreements
|
||
16.1
|
There
is, and during the year ending on the date of this agreement there has
been, no agreement or arrangement affecting any Group Company to which a
Principal Shareholder is or was a party and in which a Principal
Shareholder or a director or former director of the Company is or was
interested in any way, other than a bona fide contract of employment made
between the Company and a Principal Shareholder or a director or former
director of the Company in the ordinary and normal course of
business.
|
||
16.2
|
Save
in respect of properly accrued remuneration or business expenses, there is
no amount owing by any Group Company to any Principal Shareholder,
director or former director of any Group Company.
|
||
16.3
|
There
is no amount owing to any Group Company from any Principal Shareholder,
director or former director of that company.
|
||
17
|
Business
locations
|
||
No
Group Company conducts any part of its business through a branch, agency
or permanent establishment outside the United Kingdom.
|
|||
18
|
Capacity and
consequences of sale
|
||
18.1
|
Compliance
with the terms of this agreement does not:
|
||
18.1.1
|
save
as fairly disclosed in a document contained within the Data Room and so
far as the Principal Shareholders are aware, constitute a default under a
provision of any agreement or instrument to which any Group Company is a
party;
|
||
18.1.2
|
save
as fairly disclosed in a document contained within the Data Room and so
far as the Principal Shareholders are aware, constitute a default under
provision of any lien, lease, order, judgment, award, injunction, decree,
law, ordinance or regulation or any other restriction of any kind or
character by which any Group Company is bound;
|
||
18.1.3
|
save
as fairly disclosed in a document contained within the Data Room and so
far as the Principal Shareholders are aware, relieve any other party to a
contract with any Group Company of its obligations or enable that party to
vary or terminate its rights or obligations under that
contract;
|
||
18.1.4
|
result
in the creation or imposition of any Encumbrance on any of the property or
assets of any Group Company; or
|
||
18.1.5
|
entitle
any person to receive from any Group Company any finder's fee, brokerage,
bonus payment or other commission or payment in connection with the
transactions contemplated by this agreement; or
|
||
18.1.6
|
result
in any indebtedness of any Group Company becoming due and payable prior to
its stated maturity which is not repaid at
Completion.
|
48
19
|
Data and
Records
|
||
19.1
|
Each
Group Company has complied with all relevant requirements of the Data
Protection Xxx 0000.
|
||
19.2
|
No
Group Company has received a notice or allegation from either
the Data Protection Commission or a data subject alleging non-compliance
with the Data Protection Act 1998 (or any previous enactment) or any of
the data protection principles, requiring the Group Company to change or
delete any data or prohibiting the transfer of data to a place outside the
United Kingdom.
|
||
20
|
Business
names
|
||
No
Group Company carries on business under a name other than its own
corporate name.
|
|||
21
|
Product
Claims
|
||
21.1
|
Except
as described in the Disclosure Letter:
|
||
21.1.1
|
no
claims have been made in writing or are, to the knowledge of the Principal
Shareholders, in writing, threatened under the product warranties of any
Group Company, other than routine warranty claims at such levels and for
reasons as in the reasonable opinion of the Principal Shareholders may be
reasonably expected in the ordinary and normal course of business as
carried on by each Group Company;
|
||
21.1.2
|
there
are no statements or decisions by any governmental authority or any
product testing laboratory stating that any product of any Group Company
is unsafe or fails to meet any standards promulgated by such governmental
authority or testing laboratory, with the exception of those products
undergoing testing prior to launch;
|
||
21.1.3
|
there
have not been any mandatory or voluntary product recalls with respect to
any products of any Group Company within the past four years and, so far
as the Principal Shareholders are aware, there is no fact relating to any
product of a Group Company that may impose a duty on any Group Company to
recall any product or warn customers of a defect in any product of the
Company.
|
||
21.2
|
All
products of the Group have been delivered with a certificate of conformity
which has been issued in accordance with the requirement of the Group’s
quality management controls which are governed by
ASEN9100.
|
||
22
|
Improper
Payments
|
||
None
of the Group Companies nor any director, officer, representative, agent,
employee of them, nor any person associated with or acting for or on
behalf of any of them has directly or indirectly:
|
|||
22.1
|
made
any contribution, gift, bribe, rebate, pay-off, influence payment,
kick-back or other payment to any person, private or public, regardless of
what form, whether in money, property or services:
|
||
22.1.1
|
to
obtain favourable treatment for the Group Companies or contracts
secured;
|
||
22.1.2
|
to
pay for favourable treatment for the Group Companies or contracts
secured;
|
49
22.1.3
|
to
obtain special concessions or for special concessions already obtained;
or
|
||
22.1.4
|
in
violation of any legal requirement, in breach of applicable law,
or
|
||
22.2
|
established
or maintained any fund or asset that has not been recorded in the books or
records of the Group Companies.
|
||
23
|
Customers and
Suppliers
|
||
In
the last 12 month period ending on the date of this agreement, no person
who is, or who has during the last 12 months, been a substantial customer
or supplier of goods or services to a Group Company, has ceased or has
given written notice to cease trading with or supplying a Group Company or
has reduced or, so far as the Principal Shareholders are aware, is likely
to reduce, substantially (meaning a reduction of 15 per cent or more in
comparison with the previous calendar year) its trading with or supply to
a Group Company. For the purposes of this Warranty a
"substantial" customer or supplier is one responsible for 5 per cent or
more of sales by or supplies to a Group Company in the 12 months ended on
the Accounts Date.
|
|||
24
|
Environmental
Matters
|
||
24.1
|
Each
Group Company is in compliance with Environmental Law has been in
compliance with Environmental Law for the period of three years prior to
the date of this agreement.
|
||
24.2
|
There
is no claim, proceedings or formal notice will give rise to such claim,
proceeding, formal notice nor, so far as the Principal Shareholders are
aware, is there any investigation by any governmental or regulatory body
in respect of Environmental Law with regard to any Group Company or any of
the Properties or, so far as the Principal Shareholders are aware, any
properties previously owned or occupied by a Group
Company.
|
||
24.3
|
So
far as the Principal Shareholders are aware, no complaints have been made
by any third party (including any employee) with regard to the Properties
and/or any activities, processes or substances in on over or under the
Properties or (so far as the Principal Shareholders are aware) any
properties previously owned or occupied by a Group Company the result of
any actual or alleged breach of the Environmental Law or the presence of
any Hazardous Items.
|
||
24.4
|
So
far as the Principal Shareholders are aware, no Hazardous Items have been
deposited, used, disposed of, generated, stored, transported, dumped,
released, burned or emitted on, in, under, upon or from the Properties or
(so far as the Principal Shareholders are aware) any other property
currently or previously owned or occupied by any Group Company or (so far
as the Principal Shareholders are aware) from any adjoining
property.
|
||
25
|
Health and Safety
matters
|
||
25.1
|
Each
Group Company is in compliance with Health and Safety Law and has been in
compliance with Health and Safety Law for the period of three years prior
to the date of this agreement.
|
||
25.2
|
There
is no claim, proceeding, formal notice nor so far as the Principal
Shareholders are aware investigation by any governmental or regulatory
body in respect of Health and Safety Law with regard to any Group
Company.
|
||
25.3
|
So
far as the Principal Shareholders are aware, no complaints have been made
by any third party (including any employee) with regard to activities,
processes or substances
|
50
in
on over or under the Properties as the result of any actual or alleged
breach of the Health and Safety Law.
|
|||
26
|
ATG
(2000)
|
||
26.1
|
ATG
(2000):
|
||
26.1.1
|
so
far as the Principal Shareholders are aware, is a limited company
incorporated under English law and has been in continuous existence since
incorporation;
|
||
26.1.2
|
so
far as the Principal Shareholders are aware, does not carry on any
activities or operations other than those disclosed in the Disclosure
Letter against Warranty 1.2.1;
|
||
26.1.3
|
so
far as the Principal Shareholders are aware, has no shares in issue other
than two fully paid ordinary shares of £1 each, one of which is legally
and beneficially owned by Brookhouse 2004 Limited and one of which is
legally and beneficially owned by Xxxxxx/Manufax Tool Company
Limited;
|
||
26.1.4
|
so
far as the Principal Shareholders are aware, operates its business in
accordance with its memorandum and articles of
association.
|
||
26.2
|
There
is no Encumbrance in relation to a share held by Brookhouse 2004 Limited
in the capital of ATG (2000).
|
||
26.3
|
So
far as the Principal Shareholders are aware, there is no agreement
requiring the allotment, issue, transfer, redemption or repayment of, or
the grant to a person of the right (conditional or not) to require the
allotment, issue, transfer, redemption or repayment of, a share in the
capital of ATG (2000).
|
||
26.4
|
So
far as the Principal Shareholders are aware, the most recent audited
annual accounts of ATG (2000) give a true and fair view of the financial
position and state of affairs of ATG 2000 as at 30 September 2007 and of
its profit or loss and (where applicable) cash flow for the period ending
on that date.
|
51
Schedule
5 – Limitations
on the Sellers' liability
For
the avoidance of doubt, the provisions of this schedule 5 shall not apply to a
claim under the Tax Covenant, unless and to the extent that it is expressly
provided in such a provision or in the Tax Covenant that such provision does
apply to a claim under the Tax Covenant.
1
|
Financial
limits
|
|||
1.1
|
All
Claims (other than Claims under the Title and Capacity Warranties), all
claims under the Tax Covenant and all Indemnity Claims shall be satisfied
solely and exclusively by way of the transfer to the Buyer of relevant
amounts out of the Escrow Account in accordance with clause
11. Notwithstanding any other provision of this agreement the
aggregate liability of the Sellers in respect of all Claims (other than
Claims under the Title and Capacity Warranties), all claims under the Tax
Covenant and all Indemnity Claims shall not exceed the amount standing to
the credit of the Escrow Account from time to time.
|
|||
1.2
|
The
maximum liability of each of the Sellers in respect of Claims under the
Title and Capacity Warranties shall be limited to the pro rata share of
the Consideration to which such Seller is entitled in respect of the
Shares sold by it pursuant to this agreement as agreed between the Sellers
and the Buyer on the date of this agreement.
|
|||
1.3
|
Subject
to paragraph 1.6, the Sellers shall not be liable in respect of a Claim,
(other than a Claim under the Title and Capacity Warranties), unless the
amount claimed in respect of that individual Claim exceeds £20,000 (each a
"qualifying claim"), provided that Claims arising directly or indirectly
from the same or substantially similar or related facts, events or
circumstances shall be treated as one individual Claim rather than a
series of individual Claims.
|
|||
1.4
|
Subject
to Paragraph 1.6, the Sellers shall not be liable in respect of a Claim,
other than a Claim under the Title and Capacity Warranties, unless the
aggregate amount of all qualifying claims (plus all Indemnity Claims and
all claims under the Tax Covenant) exceeds £500,000, in which event the
Sellers shall be liable for the full amount of all qualifying claims and
not merely the excess.
|
|||
1.5
|
The
Sellers shall not be liable in respect of a claim under the Tax Covenant
unless the aggregate amount of all such claims exceeds £100,000 in which
event the Sellers shall be liable for the full amount of all claims under
the Tax Covenant and not merely the excess.
|
|||
1.6
|
The
following provisions shall apply to a Claim in respect of the Warranty set
forth in paragraph 2.3 of schedule 4 (Balance Sheet) ("Balance Sheet
Claim")
|
|||
1.6.1
|
the
Sellers shall not be liable for a Balance Sheet Claim unless the amount
claimed in respect of that individual claim exceeds £10,000 provided that
Balance Sheet Claims arising directly or indirectly from the same or
substantially similar or related facts, events or circumstances
shall be treated as one individual Balance Sheet Claim rather than a
series of individual Balance Sheet Claims;
|
|||
1.6.2
|
the
Sellers shall not be liable in respect of a Balance Sheet Claim
unless the aggregate amount of all Balance Sheet Claims exceeds £100,000
in which event the Sellers shall be liable for the full amount of all
claims qualifying under paragraph 1.6.1 and not merely the
excess.
|
|||
1.7
|
In
assessing any damages or compensation payable by the Sellers the value of
the Shares will not be taken as exceeding the
Consideration.
|
52
2
|
Time
limits
|
||||
2.1
|
The
Sellers shall not be liable for a Claim (other than a Claim under the
Title and Capacity Warranties) or an Indemnity Claim or a claim under the
Tax Covenant, unless the Buyer gives the Sellers' Representative notice of
such Claim, Indemnity Claim or claim under the Tax Covenant ("Claim Notice") (stating
in reasonable detail the matter which gives rise to the Claim, the nature
of the Claim, Indemnity Claim or claim under the Tax Covenant and the
amount claimed, to the extent that such details are reasonably available
to the Buyer at the relevant time) on or before the second anniversary of
Completion.
|
||||
2.2
|
Subject
to the provisions of schedule 6, a Claim, an Indemnity Claim or a Tax
Claim notified in accordance with paragraph 2.1, which is not previously
satisfied, settled or withdrawn, shall be deemed to have been withdrawn
and waived in full by the Buyer unless proceedings in respect of that
claim have been both issued and served on the Sellers' Representatives
within the period of 6 months starting on the day such claim was notified
to the Sellers' Representatives provided that, where a Claim, Indemnity
Claim or Tax Claim is made in respect of a matter where the loss or
liability to the Buyer or to a Group Company is uncertain, or such claim
is unascertainable or unquantifiable or otherwise contingent on another
event, such legal action need not be brought until 6 months after the
first of the loss or liability becoming ascertained or ascertainable or
quantifiable or ceasing to be contingent.
|
||||
2.3
|
The
purpose of paragraph 2.1 is to provide for notification to the Sellers'
Representatives of the possibility of a Claim or Claims or Indemnity Claim
or Indemnity Claims or Tax Claim or Tax Claims being made. It
is not intended to permit the Sellers to rely on technical defences to
such Claims or Tax Claims on the grounds of insufficiency of
notice. Accordingly no defect in the form of the notice will
invalidate the notice or permit any of the Sellers to allege that the
Buyer has not complied with paragraph 2.1 of this schedule unless the
Sellers can satisfy the court that the Sellers could not reasonably have
been expected to understand the general nature of the allegation made, and
in doing so no regard shall be had to material which was not reasonably
and readily available to the Buyer at the time of the notice, provided
always that the provisions of this paragraph 2.3 shall not apply where the
Buyer has failed to remedy such defect or insufficiency within 10 Business
Days of being requested in writing to do so by either of the Sellers'
Representatives.
|
||||
3
|
General
limits
|
||||
3.1
|
The
Sellers shall not be liable in respect of a Claim and accordingly no Claim
may be brought to the extent that the matter, fact or circumstance giving
rise to the Claim:
|
||||
3.1.1
|
is
fairly disclosed in the Disclosure Letter or the Disclosure
Documents;
|
||||
3.1.2
|
would
not have arisen or occurred but for an act, omission or transaction done,
made or carried out by the Sellers or the Company, or any of their
directors, employees or agents prior to Completion at the written request
of or with the written consent of the Buyer;
|
||||
3.1.3
|
arises
as a direct result of the identity of the Buyer.
|
||||
3.2
|
The
Sellers shall not be liable in respect of a Claim or an Indemnity Claim
and accordingly no Claim or Indemnity Claim may be
brought:
|
||||
3.2.1
|
to
the extent that the matter, fact or circumstance giving rise to the Claim
or Indemnity Claim;
|
||||
(a)
|
would
not have arisen or occurred but for the passing of, or a change in, an
applicable law, rule, regulation, published
interpretation
|
53
of
the law or administrative practice of a government, governmental
department, agency or regulatory body, or a judgment passed, after the
Completion Date; or
|
|||
(b)
|
is
specifically allowed for, provided against or reserved for in the Balance
Sheet.
|
||
3.2.2
|
where
the loss or liability resulting from the Claim has been or is made good or
otherwise compensated for at no expense to the Buyer or the
Company;
|
||
3.2.3
|
which
results from a change in the accounting or taxation policies or practices
of the Company introduced or having effect after Completion, save to the
extent that the same are introduced to bring the accounting or taxation
policies or practices of the Company into line with UKGAAP in relation to
a business of the type carried on by the Buyer and/or the
Company;
|
||
3.2.4
|
which
would not have arisen or occurred but for a cessation of trading or change
in the nature or conduct of the Company’s business after
Completion;
|
||
3.2.5
|
which
is contingent or unquantifiable unless and until either such contingent
liability becomes an actual liability or such unquantifiable liability
becomes quantifiable and, in either case, such liability is due and
payable, provided that, if the Buyer notifies the Sellers Representatives
of the relevant matter, fact or circumstance in accordance with clause
11.5, the relevant matter, fact or circumstance shall constitute a
Relevant Claim and shall be treated in accordance with clause
11.
|
||
4
|
Conduct of
Claims
|
||
4.1
|
If
a Claim (other than a Claim relating to a Tax Warranty which shall not be
governed by this paragraph 4) or an Indemnity Claim arises as a result of,
or in connection with, a liability or alleged liability to a third party
(a "Third Party
Claim"), then:
|
||
4.1.1
|
the
Buyer shall as soon as reasonably practicable give notice to the Managers'
Representative of the matter;
|
||
4.1.2
|
the
Buyer shall procure the relevant Group Company make available to the
Managers' Representative such persons that are then employed by that Group
Company and such information as the Managers' Representative may
reasonably require for assessing, contesting, appealing or compromising
the Third Party Claim;
|
||
4.1.3
|
subject
to the provision of confidentiality undertakings in a form acceptable to
the Buyer, acting reasonably, the Managers' Representative may take copies
of the documents or records referred to in paragraph
4.1.2;
|
||
4.1.4
|
the
Buyer shall procure the relevant Group Company shall consult with the
Managers' Representative in good faith in relation to the conduct of any
appeal, dispute, compromise or defence of the Third Party Claim;
and
|
||
4.1.5
|
the
Buyer shall, and shall procure that the relevant Group Company shall keep
the Managers' Representative informed of the progress of the Third Party
Claim.
|
||
5
|
Recovery from third
party
|
||
Where
the Buyer is entitled to recover from any person any sum in respect of any
matter or event which gives rise to a Claim (other than a Claim relating
to a Tax Warranty which shall not be governed by this paragraph 5) or an
Indemnity Claim, the Buyer shall or shall procure that a Group Company
shall, subject to it being secured
and
|
54
indemnified
to its reasonable satisfaction by the Sellers and to it being satisfied,
acting reasonably, that such action will not be prejudicial to its
interests or the interests of any Group Company, use its reasonable
endeavours to recover that sum and shall keep the Managers' Representative
informed of the conduct of such recovery. The Buyer shall not be
restricted from pursuing that or any other Claim or Indemnity Claim in
relation to the same subject matter against the Sellers. Any sum recovered
by the Buyer before settlement or final determination of the Claim or
Indemnity Claim (less any costs and expenses incurred by the Buyer, the
Company or any other Group Company in recovering the sum and any Tax
attributable to or suffered in respect of the sum recovered) will reduce
the amount of the Claim or Indemnity Claim by an equivalent amount. If
recovery is delayed until after the Claim or Indemnity Claim has been
satisfied by the Sellers in accordance with the provisions of clause 11,
the Buyer shall (subject to the remaining provisions of this clause) repay
to the Escrow Account the amount so recovered (less any costs and expenses
incurred by the Buyer, the Company or any other Group Company in
recovering the sum and any Tax attributable to or suffered in respect of
the sum recovered), where it shall be held in accordance with the
provisions of clause 11. If the amount so recovered exceeds the amount of
the Claim or Indemnity Claim satisfied by the Sellers, the Buyer shall be
entitled to retain the excess.
|
|||
6
|
Sums
Recovered
|
||
6.1
|
If
the Sellers pay to the Buyer an amount in respect of a Claim (other than a
Claim under the Tax Warranties) or Indemnity Claim and the Buyer or the
Company subsequently recovers from another person an amount which is
referable to the matter giving rise to that Claim or Indemnity Claim, the
Buyer shall pay to the Sellers an amount equal to whichever is the lower
of the Sum Recovered (as defined below) and the amount previously paid by
the Principal Shareholders to the Buyer.
|
||
6.2
|
For
the purposes of paragraph 6.2, the "Sum Recovered" means an
amount equal to the total of the amount recovered from the other person
plus any interest in respect of such amount (less any costs and expenses
incurred by the Buyer, the Company or any other Group Company in
recovering the sum and any Tax attributable to or suffered in respect of
the sum recovered).
|
||
7
|
Specific
Warranties
|
||
None
of the Warranties, other than the Warranties specified in the first column
below, shall constitute or be deemed to constitute a warranty or
representation as to or in respect of any of the matters described
opposite the paragraph reference in the second column below and the Buyer
acknowledges and agrees that, save as aforesaid, the Sellers give no
warranties or representations as to or in respect of any of the matters
described in the second column
below:
|
Warranties
|
Description of asset
or matter warranted
|
Paragraphs
2, 3.1.1, 3.1.2, 3.1.3, 3.1.4, 3.1.5, 3.1.6, 4.4, 11 and 18 of part B of
schedule 4
|
Company
Intellectual Property
|
Paragraphs
2, 3.1.1, 3.1.2, 3.1.6, and 15 of part B schedule 4
|
Competition
|
Paragraphs
2, 3 and 11 of part B of schedule 4 and
Part
2 of schedule 6
|
Tax
|
55
Warranties
|
Description of asset
or matter warranted
|
Paragraphs
2, 3.1.1, 3.1.2, 3.1.3, 3.1.4, 3.1.5, 3.1.6, 3.2, 11, 13, 14, 18, 24 and
25 of part B of schedule 4 and Part 4 of schedule 7
|
Property
|
Paragraphs
2, 3, 18 and 24 of part B of schedule 4
|
Environmental
|
Paragraphs
2, 3.1.1, 3.1.2, 3.1.3, 3.1.4, 3.1.5, 3.1.6, 3.2, 4.4, 11 and 18 of part B
of schedule 4
|
Information
Technology
|
8
|
Information
|
The
Buyer shall use its reasonable endeavours, and shall procure that each
Group Company shall use its reasonable endeavours to preserve all
documents, records, correspondence, accounts and other information
whatsoever which relate (directly or indirectly) to a matter which may
give rise to a Claim or Indemnity Claim or a Tax Claim.
|
|
9
|
No double
claim
|
Subject
only to paragraph 7 of this schedule, the Buyer shall be entitled to bring
Claims under one or more applicable Warranties in respect of the same
matter, fact or circumstance. However, the Buyer is not
entitled to recover damages or otherwise obtain payment, reimbursement or
restitution (whether under the Warranties, Tax Covenant or otherwise) more
than once in respect of the same liability or loss.
|
|
10
|
Reduction in
Consideration
|
The
satisfaction by the Sellers of any claim involving or relating to a breach
of this agreement or an Indemnity Claim or a claim under clause 12 shall
be deemed to constitute a reduction in the
Consideration.
|
|
11
|
Duty to
mitigate
|
Nothing
in this schedule restricts or limits the Buyer's general obligation at law
to mitigate any loss or damage which it may incur in consequence of a
matter giving rise to a Claim.
|
|
12
|
Fraud
|
Notwithstanding
any other provision of this agreement, nothing in this schedule 5 shall
apply to exclude or limit the liability of the Sellers to the extent that
a Claim, a claim under the Tax Covenant or an Indemnity Claim arises or is
increased by reason of (or the delay in discovery of which results from)
any fraud or wilful concealment by or on behalf of any of the
Sellers.
|
56
Schedule
6 –
Tax
Part 1 - Definitions and
Interpretation
1
|
Definitions and
Interpretation
|
|||
1.1
|
In
this schedule, the following words and expressions have the following
meanings:
|
|||
"Actual Liability to
Taxation"
|
||||
any
liability of the Company to make an actual payment of (or of an amount in
respect of) Taxation;
|
||||
"Auditors"
|
||||
the
auditors for the time being of the Company;
|
||||
"Claim"
|
||||
any
claim, notice or demand, assessment, letter or other document issued, or
action taken, by or on behalf of any Taxation Authority, by which it
appears that the Company is or may be subject to a Liability to Taxation,
whether or not the Company is primarily so liable and whether or not the
Company has any right of reimbursement against any other person and in
respect of which the Principal Shareholders may be liable either under the
Tax Covenant or for breach of the Tax Warranties;
|
||||
"Control"
|
||||
has
the meaning given to it in Section 840 of the Taxes Act or Section 995 of
the Income Tax Xxx 0000
|
||||
"Event"
|
||||
any
event whatsoever, including, but not limited to any disposition,
transaction, circumstance, action or omission (whether or not the Company
and/or the Buyer is party thereto), the earning, accrual or receipt of any
income, profits or gains, the declaration, payment or making of any
dividend or other distribution and Completion and reference to any Event
occurring on or before Completion shall be deemed to include any
combination of two or more Events only the first or some of which shall
have taken place on or before Completion;
|
||||
"Exit Bonus
Relief"
|
||||
any
corporation tax deduction for the amount of the Bonus described in
paragraph (i) of the definition of Bonus in clause 1.1;
|
||||
"FA"
|
||||
Finance
Act;
|
||||
"HMRC"
|
||||
HM
Revenue & Customs;
|
||||
"IHTA"
|
||||
Inheritance
Tax Xxx 0000;
|
||||
"ITA"
|
||||
Income
Tax Xxx 0000;
|
||||
"ITEPA"
|
||||
Income
Tax (Earnings and Xxxxxxxx) Xxx 0000;
|
||||
"Liability to
Taxation"
|
||||
(a)
|
any
Actual Liability to Taxation (and the amount of such Liability to Taxation
shall be the amount of actual payment of Taxation or the payment in
respect of
|
57
or
by reference to Taxation which in each case the Company is liable to
make);
|
|||
(b)
|
the
loss, cancellation, nullification or clawing back (in whole or in part) of
any Relevant Pre-Balance Sheet Date Relief (and, for the purposes of
paragraph 3, if the Relevant Pre-Balance Sheet Date Relief lost,
nullified, cancelled or clawed back was a deduction from or set-off
against Taxation, the amount of such Liability to Taxation shall be the
amount of the Relevant Pre-Balance Sheet Date Relief lost or if the
Relevant Pre-Balance Sheet Date Relief lost was a deduction from or a
set-off against income, profits or gains, the amount of such a Liability
to Taxation shall be the amount of Taxation which would have been saved
but for the loss of the Relevant Pre-Balance Sheet Date Relief on the
basis of rates of Taxation current at the date of the
loss);
|
||
(c)
|
the
utilisation or set-off of any Relevant Pre-Balance Sheet Date Relief or
any Post-Balance Sheet Date Relief against any Actual Liability to
Taxation in respect of which the Principal Shareholders would, but for
such utilisation or set-off, have been liable under paragraph 3 (but for
the application of paragraph 1.5 (Threshold) of schedule 5), or against
any income, profits or gains of the Company earned, accrued or received on
or before the Completion Date in circumstances where, but for such
utilisation or set-off, the Company would have suffered an Actual
Liability to Taxation in respect of which the Principal Shareholders would
have been liable (but for the application of paragraph 1.5 (Threshold) of
schedule 5) under paragraph 3 (and, for the purposes of paragraph 3, the
amount of such a Liability to Taxation shall be the amount of the Relevant
Pre-Balance Sheet Date Relief or Post-Balance Sheet Date Relief
set-off against an Actual Liability to Taxation or the amount of
Taxation saved as a result of the set-off of the Relevant Pre-Balance
Sheet Date Relief or Post-Balance Sheet Date Relief against income,
profits or gains, as the case may be);
|
||
(d)
|
the
loss by the Company (in whole or in part) of any right to repayment of
Taxation or the set-off of any such right to repayment of Taxation or any
right to repayment of Taxation which arises wholly or mainly as a result
of any Event occurring after Completion against any Actual Liability to
Taxation in respect of which the Principal Shareholders would, but for
such set-off, have been liable (but for the application of paragraph 1.5
(Threshold) of schedule 5) under paragraph 3 (and for the purposes of
paragraph 3, the amount of such a Liability to Taxation shall be the
amount of the repayment of Taxation which would have been obtained but for
the loss or set-off); or
|
||
(e)
|
the
liability of the Company to make a payment (or to surrender a Relief)
pursuant to any indemnity, guarantee or covenant entered into by the
Company (or by a person or persons with Control of the Company) before
Completion under which the Company has agreed to (or the person or persons
with Control of the Company have agreed to procure that the Company does)
pay an amount in respect of (or surrender a Relief) to reduce or
extinguish any liability for Tax of any other person (and, for the
purposes of paragraph 3, the amount of such a Liability to Taxation shall
be the amount of such payment or the value of such Relief as the case may
be);
|
||
"PAYE"
|
|||
the
mechanism described by Taxation Statutes for the collection of income tax
and national insurance contributions from payments and benefits received
in connection employment;
|
|||
"Post-Balance Sheet Date
Relief"
|
|||
any
Relief (other than the Exit Bonus Relief) which arises wholly or mainly as
a result of or by reference to any Event
occurring:
|
58
(a)
|
after
Completion;
|
||
(b)
|
in
the ordinary course of business of the Company after the Balance Sheet
Date;
|
||
"Principal Shareholders’
Relief"
|
|||
means
any Relief other than a Relevant Pre-Balance Sheet Date Relief, a
Post-Balance Sheet Date Relief, any Relief that has been claimed or
utilised in paying or calculating any Tax due before Completion, any
Relief that has been taken into account in calculating any provision for
Tax in the Locked Box Schedule;
|
|||
"Relevant Pre-Balance Sheet Date
Relief"
|
|||
any
Relief which arises wholly or mainly as a result of or by reference to any
Event occurring on or before the Balance Sheet Date and which either has
been shown as an asset in the Locked Box Schedule or is otherwise treated
as an asset of the Company in computing, and thereby reducing any
provision for deferred Taxation contained in the Locked Box Schedule (or
which would otherwise have appeared in the Locked Box
Schedule);
|
|||
"Relief"
|
|||
any
relief, allowance, exemption, loss, set-off, deduction or credit available
from, against or in relation to Taxation or in the computation of income,
profits or gains for any Taxation purpose including a right to a repayment
of Tax but in all cases excluding the Exit Bonus Relief and the VAT Relief
so that for the avoidance of doubt any reference to Relief shall not
include the Exit Bonus Relief or the VAT Relief;
|
|||
"Tax" or "Taxation"
|
|||
(a)
|
any
tax, duty, impost, charge, deduction, withholding or levy, past or
present, of the United Kingdom or elsewhere,
whether governmental, state, provincial, local governmental or
municipal, including, but not limited to, income tax (including income tax
required to be deducted or withheld from or accounted for in respect of
any payment under Part II ITEPA or otherwise), corporation tax, advance
corporation tax, any tax required to be accounted for under section 419 of
the Taxes Act, capital gains tax, any liability arising under section 207
of the Finance Xxx 0000, inheritance tax, value added tax, insurance
premium tax, landfill tax, stamp duty, stamp duty reserve tax, stamp duty
land tax, customs and other import or export duties, rates, national
insurance and social security contributions (but excluding business and
water rates, community charges and council tax or any tax, rate, charge or
duty similar to, replacing or replaced by any of them);
and
|
||
(b)
|
any
fine, penalty, charge or interest relating to any such tax, duty, impost,
charge, deduction, withholding or levy mentioned in paragraph (a) of this
definition or to any account, record, form or return required to be
submitted to any competent authority for the purposes of any such tax,
duty, impost or levy;
|
||
"Taxation
Authority"
|
|||
any
taxing or other authority, whether of the United Kingdom or elsewhere,
competent to impose Taxation including but not limited to
HMRC;
|
|||
"Taxation
Statute"
|
|||
any
statute (and all regulations whatsoever and other documents having the
force of law under such statute howsoever made) ordinance, directive or
Act providing for imposing or relating to Taxation;
|
|||
"Taxes
Act"
|
|||
the
Income and Corporation Taxes Xxx 0000;
|
59
"TCGA"
|
|||
Taxation
of Chargeable Gains Xxx 0000;
|
|||
"VAT"
|
|||
in
relation to any jurisdiction within the European Community, the value
added tax provided for in Directive 2006/112/EC and charged under the
provisions of any national legislation implementing that directive or
Directive 77/388/EEC together with legislation supplemental thereto and,
in relation to any other jurisdiction, the equivalent Tax (if any) in that
jurisdiction;
|
|||
"VAT
Relief"
|
|||
(a)
|
any
refund of overpaid output VAT made by HMRC to Brookhouse Composites
Limited, by way of repayment, credit or set-off arising in relation to the
issue, in the quarterly accounting period ending 31 August 2008, of a
credit note or credit notes to Barclays Mercantile Business Finance
Limited cancelling VAT invoices previously issued by Brookhouse Composites
Limited to Barclays Mercantile Business Finance Limited;
or
|
||
(b)
|
a
VAT credit whether by way of repayment of VAT by HMRC or set off allowed
by HMRC against output VAT as a result of a successful claim by Brookhouse
Composites Limited for input VAT paid to Barclays Mercantile Business
Finance Limited and reflected on VAT invoices issued by Barclays
Mercantile Business Finance Limited to Brookhouse Composites Limited in
the quarterly accounting period ending 31 August 2008,
|
||
in
either case, in respect of a hire purchase arrangement;
and
|
|||
"VATA"
|
|||
Value
Added Tax Xxx 0000.
|
|||
1.2
|
In
interpreting this schedule:
|
||
1.2.1
|
words
and expressions defined elsewhere in this agreement shall, unless the
context otherwise requires, have the same meanings in this schedule as in
the agreement;
|
||
1.2.2
|
references
to Events include Events which are deemed to have occurred for any
Taxation purpose and references to income, profits or gains earned,
accrued or received include income, profits or gains which are deemed to
have been earned, accrued or received for any Taxation purpose and any
reference to any Event occurring on or before Completion shall be deemed
to include a reference to an Event which is deemed for any purposes of any
Taxation to have occurred on or before Completion;
|
||
1.2.3
|
unless
otherwise stated, references to paragraphs are references to paragraphs of
this schedule 6;
|
||
1.2.4
|
references
to the loss of a Relief include the disallowance of a Relief, a failure to
obtain a Relief or the inability of the Company to set off or otherwise
use a Relief howsoever in the way it was assumed to be set off or
otherwise used and references to the loss of a right to repayment of
Taxation include the disallowance of a repayment of Taxation and the
failure to obtain a repayment of Taxation;
|
||
1.2.5
|
references
to the Company shall mean the Company, any or all of the Group Companies
and ATG (2000) so that this schedule applies to each and to any of the
Group Companies and ATG (2000); and
|
60
1.2.6
|
references
to “material” in paragraphs 2.1 and 2.21 shall mean where a return,
computation, information, notification, disclosure or payment is made more
than a month late or where an underpayment of Taxation exceeds £1,000 or
where an error in a return or computation leads to a an underpayment of
Taxation exceeding £1,000.
|
||
1.3
|
It
shall be assumed for all of the purposes of this Tax Schedule (and in
particular for calculating any Liability to Taxation or any Relief) that
the date of Completion is the end of an accounting period for the purposes
of section 12 of the Taxes Act (basis of and periods of account) and all
such adjustments and apportionments as may be required consequent upon
such assumption shall be made in assessing any liability or in making any
calculation required under this Schedule.
|
||
1.4
|
Any
and all references in this schedule to “15 April 2004” shall be deemed to
be references to “12 January 2004” where the Company in question is
Brookhouse Holdings Limited, company number 5018017.
|
||
Part 2 - Tax
Warranties
|
|||
2
|
The Tax
Warranties
|
||
2.1
|
All
returns, computations, accounts, information, notifications, disclosures
and payments which should be or should have been made or provided by the
Company for any Taxation purpose since 15 April 2004 have been made or
provided within the requisite periods and are and were up-to-date,
correct, complete and on a proper basis in all material respects and none
of them is, or so far as the Principal Shareholders are aware, is likely
to be the subject of any dispute with HMRC or any other Taxation
Authority.
|
||
2.2
|
Each
Company maintains and has in its possession all records and documentation
which it is required by any of the Taxation Statutes to
maintain.
|
||
2.3
|
Each
Company has duly submitted all claims, disclaimers, elections, surrenders
and applications which have been assumed to have been made for the
purposes of the Accounts and details of such disclaimers, elections,
surrenders and applications are set out in the Disclosure
Letter.
|
||
2.4
|
No
action has been taken by any Company since 15 April 2004 in respect of
which any consent or clearance from any Tax Authority was required save in
circumstances where such consent or clearance was validly obtained, and
where any conditions attaching thereto were and will, immediately
following Completion, continue to be met.
|
||
2.5
|
No
Tax Authority is operating any special arrangement (being an arrangement
which is not based on relevant legislation or any published practice) in
relation to the affairs of any Company.
|
||
2.6
|
All
transactions entered into by the Company since 15 April 2004 with an
Affiliate have been entered into on an arm’s length basis and no notice or
enquiry by any Tax Authority has been made in connection with any such
transaction.
|
||
2.7
|
Since
15 April 2004, the Company has duly and timely deducted and accounted for
all amounts which it has been obliged to deduct and/or account for in
respect of Taxation and, in particular, has properly operated the PAYE
system by deducting Taxation, as required by law, from all payments or
benefits made or treated as made to its employees or former employees and
accounting to HMRC or other appropriate Taxation Authority for all
Taxation deducted by it or Taxation in respect of which the Company is
otherwise required to account to HMRC or other appropriate Taxation
Authority and for all Taxation chargeable on payments or benefits provided
for its employees or former
|
61
employees. No
PAYE audit in respect of the Company has been made by any Tax Authority
nor has the Company been notified that any such audit will be
made.
|
|||
2.8
|
There
are no employee share incentive schemes (such as share option schemes,
savings-related share option schemes, employee share ownership plans or
profit sharing schemes) established by the Company whether approved by
HMRC or not and the Company has not since 15 April 2004 granted any
employee or director any right to acquire shares under an Enterprise
Management Incentive scheme under Chapter 9 of Part 7 of ITEPA or
otherwise.
|
||
2.9
|
Each
Principal Shareholder and Minor Shareholder who is an employee or
ex-employee of the Company has, together with their respective employer,
executed a valid election under Section 431(1) ITEPA in respect of all of
their Shares. The provisions of Chapters 3, 3A, 3B, 3C and 4 of
Part 7 ITEPA do not apply and have never applied to the
Shares.
|
||
2.10
|
The
Company is not liable nor, so far as the Principal Shareholders are aware,
is it likely to become liable to pay, or make reimbursement or indemnity
in respect of, any Taxation (or any amount corresponding to Taxation)
either pursuant to an indemnity or covenant granted since 15 April 2004 or
in consequence of the failure by any other person to discharge that
Taxation or amount within any specified period or otherwise, where the
Taxation or amount relates to a profit, income, gain, transaction, event,
omission or circumstances arising, occurring or deemed to arise or occur
(whether wholly or partly) after 15 April 2004 and on or prior to
Completion.
|
||
2.11
|
The
Company is and has since 15 April 2004 at all times been a close company
within the meaning of Sections 414 and 415 of the Taxes
Act.
|
||
2.12
|
The
Company has not since 15 April 2004 been a close investment holding
company as defined in section 13A of the Taxes Act.
|
||
2.13
|
The
Company has not made any payment or incurred any expense or provided any
benefit or facility of whatever kind falling to be dealt with under
section 418 of the Taxes Act.
|
||
2.14
|
The
Company has not made any loan or advance or payment or given any
consideration or effected any transactions falling within sections 419 to
422 of the Taxes Act (inclusive) which is outstanding at Completion or has
been waived or repaid since the Accounts Date.
|
||
2.15
|
Since
15 April 2004, no Company has made or received any gift or transfer of
value (actual or deemed).
|
||
2.16
|
There
is no unsatisfied liability to inheritance tax attached or attributable to
the Shares or any asset of the Company and in consequence no person has
the power to raise the amount of such Tax by sale or mortgage of or by a
terminable charge on any of the Shares or assets of the Company as
mentioned in section 212 of IHTA and none of the Shares or assets of the
Company are subject to a charge within section 237 of
IHTA.
|
||
2.17
|
Since
the Accounts Date, the Company has not entered into or been a party to a
transaction which has or will give rise to a liability to corporation tax
on chargeable gains.
|
||
2.18
|
Neither
the execution nor the performance of, nor any action taken in pursuance
of, this agreement, nor any other event, transaction, act or omission
since the Accounts Date but on or before Completion will result in any
asset of the Company being deemed to have been disposed of and reacquired
under section 179 TCGA. No Company has since 15 April 2004
acquired any asset other than trading stock from any
Affiliate.
|
62
2.19
|
The
Company has not since 15 April 2004 entered into or been a party to any
election of the kind specified in section 179A TCGA.
|
||
2.20
|
The
Company has not since 15 April 2004 been a party to a loan relationship
which has been treated as being for an unallowable purpose within the
meaning of paragraph 13 schedule 9 FA 1996.
|
||
2.21
|
The
Company is registered for the purposes of the VATA, has since 15 April
2004 in all material respects made, given and obtained up-to-date and
accurate records, invoices and documents appropriate or required for the
purposes of the VATA, has since 15 April 2004 complied in all respects
with all other applicable VAT legislation and in particular has filed all
returns and made all payments of VAT on a timely basis and has not been
required by a Taxation Authority to give security under the
VATA.
|
||
2.22
|
The
Company is not and has not since 15 April 2004 been a member of a group of
companies for the purpose of section 43 VATA.
|
||
2.23
|
The
Company is not currently in a penalty default surcharge
period.
|
||
2.24
|
Neither
the Company, nor a company of which the Company is a relevant associate
within the meaning of paragraph 3(7) schedule 10 VATA, has elected to
waive the exemption under paragraph 2 schedule 10 VATA in relation to any
land or buildings.
|
||
2.25
|
All
value added tax payable on the import of goods since 15 April 2004 and all
customs duties and duties of excise payable to a Taxation Authority since
15 April 2004 in respect of any asset (including, without limitation,
trading stock) imported or owned by the Company has been
paid.
|
||
2.26
|
All
documents executed since 15 April 2004 to which the Company is a party and
upon which the Company must rely in order to assert title to any asset and
which are chargeable with stamp duty have been duly stamped with the
correct amount of duty and such duty plus interest and penalties have been
paid. In the event of any breach of this warranty, the amount
of damages payable shall be an amount equal to the appropriate amount of
stamp duty together with any interest, penalties, costs and expenses
relating thereto.
|
||
2.27
|
The
Company has not since 15 April 2004 made any claim for relief or exemption
under section 42 FA 1930, section 151 FA 1995, or sections 75 to 77 FA
1986 (inclusive) and no circumstances exist whereby any relief claimed
under section 42 FA 1930 or section 151 FA 1995 may be withdrawn including
but not limited to the operation of section 111 FA
2002.
|
||
2.28
|
Stamp
duty land tax has been paid in full in respect of all estates or interests
in land acquired on or after 15 April 2004 by the
Company.
|
||
2.29
|
The
Company has not claimed relief from stamp duty land tax under Part 1
(group relief) or Part 2 (reconstruction and acquisition relief) of
Schedule 7 FA 2003 in relation to any estate or interest in land that has
been transferred to it since 15 April 2004.
|
||
2.30
|
The
Company does not own any intangible assets within the meaning of Schedule
29 FA 2002.
|
||
2.31
|
The
Company is and has since 15 April 2004 been resident only in the UK for
Tax purposes, does not have a permanent establishment outside the UK and
has not incurred any liability to Tax outside the UK and does not own a
shareholding interest in a company resident outside the
UK.
|
63
2.32
|
No
Company is liable or has since 15 April 2004 been liable for any Tax as
the agent of any other person or business or constitutes a permanent
establishment of any other person, business or enterprise for any tax
purpose.
|
|||
2.33
|
All
necessary conditions for all capital allowances claimed by any Company
since 15 April 2004 were at all material times satisfied and remained
satisfied.
|
|||
2.34
|
No
Company is, or has not since 15 April 2004, a party to any scheme,
transaction, or arrangements the main purpose of which, or one of the main
purposes of which, is securing, obtaining or achieving a Tax advantage or
the avoidance of Tax and which has no commercial
purpose.
|
|||
2.35
|
No
Company is, or has not since 15 April 2004, a party to any scheme,
transaction, or arrangements which are disclosable or reportable to the
relevant Tax Authority.
|
|||
2.36
|
Since
15 April 2004, no Company has made (and will not be deemed to have made)
any distribution within the meaning of Sections 209 and 210 of the Taxes
Act except dividends properly authorised and shown in its accounts, nor is
any Company bound to make any such distribution.
|
|||
2.37
|
No
amendments have been made to the sale agreement dated 14 April 2004
between (1) Xxxxx Xxxxxx and others and (2) Brookhouse Holdings Limited
(known as “Inhoco 3035 Limited” at the time the agreement was entered
into).
|
|||
Part 3 - The
Covenant
|
||||
3
|
Covenant
|
|||
Subject
as hereinafter provided, the Principal Shareholders jointly and severally
hereby covenant with the Buyer to pay to the Buyer an amount equal to the
amount of:
|
||||
3.1
|
any
Liability to Taxation of the Company which has arisen by reason of or in
respect of any Event occurring after 15 April 2004 and on or before
Completion, whether or not in any such case any Taxation in question is
chargeable against or attributable wholly or partly to or recoverable
wholly or partly from any other person, and including (without prejudice
to the generality of the foregoing) any Liability to Taxation which arises
in connection with or in respect of or by reference to any income, profits
or gains earned, accrued or received after 15 April 2004 and on or before
Completion or in respect of a period ended on or before
Completion;
|
|||
3.2
|
any
Liability to Taxation which is primarily the liability of another person
(the Primary
Person) for which a Company is liable in consequence
of:
|
|||
3.2.1
|
the
Primary Person failing to discharge such Tax Liability;
and
|
|||
3.2.2
|
a
Company at any time after 15 April 2004 but before
Completion:
|
|||
(a)
|
being
a member of the same group of companies as the Primary Person;
or
|
|||
(b)
|
having
control of, being controlled by (construing "control" in accordance with
Section 416 Taxes Act, but subject to the modifications in Section 767B
Taxes Act), or being otherwise connected with, the Primary Person or being
controlled by the same person as the Primary Person for any Tax
purpose;
|
|||
3.3
|
any
and all costs incurred by a Company after Completion in respect of
inheritance tax which:
|
64
3.3.1
|
is
at Completion a charge on any of the shares in or assets of any Company or
has after 15 April 2004 but prior to Completion given rise to a power to
sell, mortgage or charge any of the shares in or assets of any
Company;
|
||
3.3.2
|
after
Completion becomes a charge on or gives rise to a power to sell, mortgage
or charge any of the shares in or assets of any Company being a liability
in respect of inheritance tax payable on the death of any person within
seven years after the transfer of value after 15 April 2004, if a charge
on or power to sell, mortgage or charge any such shares or assets would,
if the death of that person had occurred immediately before Completion and
inheritance tax which would become payable as a result thereof had not
been paid have existed at Completion; or
|
||
3.3.3
|
arises
to a Company as a result of a transfer of value occurring or being deemed
to occur after 15 April 2004 on or before Completion (whether or not in
connection with the death of any person whenever occurring) which
increased or decreased the value of assets of the Company or any Sellers
or any predecessor in title to such assets or to the shares in the
Company.
|
||
and
in determining for these purposes whether a charge on or power to sell,
mortgage or charge any of the shares in or assets of any Company exists at
any time, the fact that the inheritance tax may be paid by instalments
shall be disregarded and such tax shall be treated as becoming due, or a
charge or power to sell, mortgage or charge as arising, on the date on
which the inheritance tax first becomes payable or
arises;
|
|||
3.4
|
any
Liability to Taxation for which the Company is liable as a result of
claims for Relief in relation to research and development expenditure that
have been made in respect of periods or part periods ending after 15 April
2004 but on or before Completion being wholly or partly
disallowed;
|
||
3.5
|
to
the extent allowable under law, any Liability to Taxation for which a
Company is liable to deduct and/or account in respect of any fees or
remuneration paid to the Chairman of the Company at any time after 15
April 2004 but on or before Completion; and
|
||
3.6
|
any
reasonable costs, fees or expenses excluding internal management costs
incurred by the Company or the Buyer in connection with any Liability to
Taxation mentioned in paragraphs 3.1 to 3.5 (inclusive), or with
successfully taking or defending any action under this
schedule.
|
||
4
|
Employment Taxes
relating to sale of Shares
|
||
4.1
|
Each
Principal Shareholder and Minor Shareholder who is an employee or
ex-employee of a Company severally covenants to pay to the Buyer within 90
days of Completion an amount equal to any Tax (excluding employer’s
national insurance contributions) relating to the sale of the Shares and
for which a Company is liable to account to a Tax
Authority.
|
||
4.2
|
For
the avoidance of doubt, the covenant in paragraph 4.1 shall not apply to
the subscription for B ordinary shares on 12 June 2008 by Xxxxxx Xxxxxxx
Xxxxxxx, Xxx Xxxxxx, Xxxxx Xxxxxxx and Xxxxxxxx Xxxxx.
|
||
4.3
|
For
the avoidance of doubt, payments due under this paragraph 4 shall not be
subject to the Escrow provisions set out in clause 11 or the financial
limitations set out in paragraphs 1.1 (Cap on liability), 1.5 (threshhold)
and 2.1 (Time limits) of schedule
5.
|
65
5
|
Due Date for
Payment
|
||
5.1
|
Subject
to the provisions of clause 11 (Escrow Arrangements), the due date for the
making of a payment from the Escrow Account that is due under
paragraphs 3.1 to 3. 5 (inclusive) shall be, in any case involving a
liability of the Company to make an actual payment of Taxation, the later
of the date falling five Business Days after the Buyer has served notice
on the Managers’ Representative demanding such payment and the date
falling five Business Days before the last date upon which the Company is
obliged to make such payment in order to avoid incurring any fine, penalty
or interest in respect of unpaid Taxation.
|
||
5.2
|
If
the Principal Shareholders are or become liable to make a payment under
paragraphs 3.1 to 3.5 (inclusive) in respect of any other case not
involving a liability of the Company to make an actual payment of
Taxation, the Buyer will notify the Managers’ Representative in writing of
the amount which the Principal Shareholders are required to pay and,
subject to the provisions of clause 11 (Escrow Arrangements), such amount
shall be paid from the Escrow Account on or before:
|
||
5.2.1
|
in
the case of a Liability to Taxation involving the loss, cancellation,
nullification or clawing back of a Relief, the later of the date five
Business Days before Taxation is payable as a result of such
loss, cancellation, nullification or clawing back and five Business Days
after the date of such notice;
|
||
5.2.2
|
in
the case of a Liability to Taxation involving the utilisation or set off
of a Relief or right of repayment of Tax, the later of the date five
Business Days before any Taxation would have been payable were it not for
such set-off and five Business Days after the date of such
notice;
|
||
5.2.3
|
in
the case of a Liability to Taxation involving the loss of a right to
repayment of Tax, the later of the date on which such repayment was due
from a Tax Authority and five Business Days after the date of such
notice;
|
||
5.2.4
|
in
the case of a Liability to Taxation involving a liability of the Company
pursuant to an indemnity, guarantee or covenant, the date falling five
Business Days before the date on which the relevant Company is due to
discharge the liability under the relevant indemnity, guarantee or
covenant.
|
||
5.3
|
Subject
to the provisions of clause 11 (Escrow Arrangements), the due date for the
making of a payment that is due under paragraph 3.6 shall be the date
falling five Business Days after the Buyer has served notice on the
Managers’ Representative demanding such payment accompanied by an
appropriate invoice (or other reasonably satisfactory evidence of the
amount).
|
||
Part 4 - Limitations
and General
|
|||
6
|
Limitations
|
||
6.1
|
The
Principal Shareholders shall not be liable for breach of the Tax
Warranties nor shall the covenant contained in paragraph 3.1 apply in
respect of a Liability to Taxation to the extent to
which:
|
||
6.1.1
|
a
provision or reserve or allowance has been made in the Locked Box Schedule
for such Liability to Taxation;
|
||
6.1.2
|
such
Liability to Taxation would not have arisen but for any Event occurring in
the ordinary course of business of the Company or any Permitted Payments
between the Balance Sheet Date and
Completion;
|
66
6.1.3
|
such
Liability to Taxation would not have arisen but for anything voluntarily
done or omitted to be done outside the ordinary course of business after
Completion by the Buyer or the Company other than:
|
||
(a)
|
any
act carried out pursuant to a legally binding obligation of the Company
entered into on or before Completion;
|
||
(b)
|
any
act carried out at the written request of the Sellers’ Representative;
and
|
||
(c)
|
an
act which the Company was required to do by any legislation (whether
relating to Tax or otherwise);
|
||
6.1.4
|
such
Liability to Taxation would not have arisen or would have been reduced or
eliminated but for a failure or omission on the part of the Buyer or the
Company after Completion to make any claim or election or to give any
notice or consent or claim any Relief in relation to Taxation which was
taken into account in computing the provision or reserve for Taxation in
the Locked Box Schedule;
|
||
6.1.5
|
such
Liability to Taxation would not have arisen but for a change in the
accounting reference date of or of any accounting policies of the Company
other than any changes required to comply with UKGAAP;
|
||
6.1.6
|
such
Liability to Taxation would not have arisen but for the Company ceasing to
carry on any trade or business after Completion or effecting a major
change in the nature or conduct of any trade or business carried on by
it;
|
||
6.1.7
|
such
Liability to Taxation arises as a result of or in connection with any
Event (except for an Event that is contemplated by this agreement) which
takes place at the written request of or with the written acquiescence of
the Buyer; or
|
||
6.1.8
|
such
Liability to Taxation or other liability arises in connection with any
failure to make an instalment payment or the making of an insufficient
instalment payment prior to Completion under the Corporation Tax
(Instalment Payments) Regulations 1998 by the Company (or any other
designated person), in circumstances where the payments (or the decision
to make no instalment payments) made prior to Completion would not
subsequently have proved to have been insufficient but for the profits and
gains earned by the Company after Completion proving to be greater than
those reasonably expected at the date of the relevant instalment payment
to be earned, accrued or received by the Company after
Completion.
|
||
6.2
|
The
Principal Shareholders shall not be liable for breach of the Tax
Warranties nor shall the covenant contained in paragraphs 3.1 and 3.4
apply in respect of a Liability to Taxation to the extent to which such
Liability to Taxation would not have arisen but for the disclaimer,
revocation or amendment after Completion of any claim, election,
surrender, disclaimer or notification in relation to Taxation made on or
before Completion provided that the Buyer was aware or ought reasonably to
have been aware of such claim, election, surrender, disclaimer or
notification.
|
||
6.3
|
The
Principal Shareholders shall not be liable for breach of the Tax
Warranties nor shall the covenant contained in paragraphs 3.1 and 3.5
apply in respect of a Liability to Taxation to the extent to which a
payment in respect of such Liability to Taxation has been made or such
Liability to Taxation has otherwise been settled or discharged on or
before Completion and such payment, entitlement or discharge is taken into
account in the Locked Box Schedule.
|
67
6.4
|
The
Principal Shareholders shall not be liable for breach of the Tax
Warranties nor shall the covenant contained in paragraphs 3.1, 3.4 and 3.5
apply in respect of a Liability to Taxation to the extent to
which:
|
||
6.4.1
|
such
Liability to Taxation would not have arisen but for any change in the
rates of Taxation or statutorily imposed variation in the method of
applying or calculating rates of Taxation in each case occurring after
Completion but with retrospective effect;
|
||
6.4.2
|
such
Liability to Taxation is increased or would not have arisen but for the
passing of any legislation, the making of any subordinate legislation or
any change in the published practice of any Taxation Authority, in each
case, after Completion;
|
||
6.4.3
|
such
Liability to Taxation arises or is increased as a consequence of any
failure by the Buyer to comply with any of its obligations under paragraph
7 (Claims Procedure) of this schedule or otherwise under this agreement;
and
|
||
6.4.4
|
any
Principal Shareholders’ Relief (other than a Principal Shareholders’
Relief dealt with under paragraphs 9 or 10) is available (or is made
available at no cost to the Company) to the Company to reduce or eliminate
the Liability to Taxation and such Liability to Taxation is so reduced or
eliminated by such use or set-off.
|
||
6.5
|
The
Principal Shareholders shall not be liable for breach of the Tax
Warranties nor shall the covenants contained in paragraphs 3 and 4 apply
in respect of a Liability to Taxation to the extent to which such
Liability to Taxation would not have arisen but for any failure or delay
by the Buyer or the Company in paying over to any Taxation Authority any
payment previously made by the Principal Shareholders under this
schedule.
|
||
6.6
|
For
the purposes of this schedule, none of the following shall be regarded as
an Event occurring in the ordinary course of business of the
Company:
|
||
6.6.1
|
any
distribution (within the meaning of Part VI (with section 418) of the
Taxes Act) or deemed distribution or a payment that is not a Permitted
Payment;
|
||
6.6.2
|
the
acquisition or disposal of any asset (including trading stock) or the
supply of any service or business facility of any kind (including a loan
of money or the letting, hiring or licensing of any tangible or intangible
property) in circumstances where the actual consideration (if any) for
such acquisition, disposal or supply is different from the consideration
deemed to have accrued or been received for any Taxation
purpose;
|
||
6.6.3
|
any
Event which gives rise to a Liability to Taxation in respect of deemed (as
opposed to actual) income, profits or gains;
|
||
6.6.4
|
any
Event which gives rise to a Liability to Taxation under section 126 and
schedule 23 FA 1995;
|
||
6.6.5
|
any
Event which gives rise to a Liability to Taxation under Part XVII of the
Taxes Act;
|
||
6.6.6
|
any
Event which gives rise to a Liability to Taxation primarily chargeable
against or attributable wholly or partly to or recoverable wholly or
partly from any other person;
|
||
6.6.7
|
any
Event the purpose of which, or one of the purposes of which, was a
reduction, elimination, deferral or avoidance of a Liability to
Taxation;
|
68
6.6.8
|
a
disposal or deemed disposal of capital assets;
|
||
6.6.9
|
an
Event giving rise to a liability under section 419 of the Taxes Act;
or
|
||
6.6.10
|
an
Event in respect of which Taxation arises as a result of a failure of the
Company to deduct or account for Taxation whether in accordance with any
Taxation Statute or otherwise.
|
||
6.7
|
The
Principal Shareholders shall not be liable in respect of a claim under the
covenants in paragraph 3 or for breach of the Tax Warranties unless the
Buyer has given the Managers’ Representative written notice of such claim
(stating in reasonable detail the nature of such claim and, if
practicable, the amount claimed) on or before the Second Payment Date in
respect of such claim.
|
||
6.8
|
The
provisions of paragraph 1.1 (Cap on liability) and 1.5 (Threshhold) of
schedule 5 shall apply to claims under the Tax
Covenant. Notwithstanding any other provision to the contrary,
the provisions of paragraph 1.5 (threshold) of schedule 5 shall not apply
to a claim under paragraph 3.5 of this schedule.
|
||
6.9
|
Where
and to the extent that the Buyer is entitled to make a claim under this
schedule in respect of a Liability to Taxation and is also entitled to
make a claim under another provision of this agreement in respect of the
same Liability to Taxation, the Buyer shall be free to make either or both
claims. However:
|
||
6.9.1
|
the
Buyer shall not be entitled to recover an amount under this schedule in
respect of such Liability to Taxation to the extent that recovery (less
costs and expenses) has been made by the Buyer under another provision of
this agreement in respect of that Liability to Taxation;
and
|
||
6.9.2
|
the
Buyer shall not be entitled to recover an amount under another provision
of this agreement in respect of such Liability to Taxation to the extent
that recovery (less costs and expenses) has been made by the Buyer under
this schedule in respect of that Liability to Taxation.
|
||
6.10
|
The
Principal Shareholders’ liability under paragraph 3 or for breach of the
Tax Warranties in respect of a Liability to Taxation of ATG (2000) shall
be limited to half the amount of such Liability to
Taxation.
|
||
6.11
|
Notwithstanding
any other provision to the contrary, if and to the extent that a Liability
to Taxation in paragraph 3.1 or a Liability to Taxation which is the
subject of a claim for breach of a Tax Warranty is reduced or eliminated
by the set off, credit or utilisation of the Exit Bonus Relief or the VAT
Relief, then (notwithstanding the reduction or elimination) the amount of
the Liability to Taxation that is so reduced or eliminated shall be
treated for the purposes of this agreement as still being in existence and
therefore still being claimable under this agreement such that, for the
purposes of this agreement, the amount of the Liability to Taxation shall
be the amount that would have been payable had there been no set off,
credit or utilisation of the Exit Bonus Relief or VAT Relief (as the case
may be).
|
||
7
|
Claims
Procedure
|
||
7.1
|
Upon
the Buyer becoming aware of any Claim, the Buyer shall as soon as
reasonably practicable, and in any event within 10 Business Days of the
date thereof, give notice of such Claim to the Managers’ Representative
and upon the Buyer becoming aware of any event, fact or circumstance which
may give rise to such a Claim, the Buyer shall as soon as is reasonably
practicable give notice thereof and of the possible Claim to the Managers’
Representative, provided that the giving of notice under this paragraph
7.1 shall not be a condition precedent to the liability of the Principal
Shareholders under
|
69
this
schedule. If the Principal Shareholders become aware of any
Claim, they shall procure that as soon as reasonably practicable, and in
any event within 10 Business Days of the date thereof, the Manager’s
Representative gives notice of such Claim to the Buyer. If the
Principal Shareholders become aware of any Claim, then such awareness will
constitute notice of such Claim by the Buyer to the Managers’
Representative.
|
|||
7.2
|
Subject
to paragraphs 7.3 to 7.7 (inclusive), the Buyer shall procure that the
Company (at the Principal Shareholders' expense and provided that the
Principal Shareholders shall first indemnify the Company and the Buyer to
the reasonable satisfaction of the Buyer (for the avoidance of doubt such
indemnity being without recourse to the Escrow Account) against all costs
(excluding internal management costs) and expenses, including any
additional Taxation, which may be incurred thereby) takes such action and
gives such information and assistance in connection with the dispute of
the Claim as the Managers’ Representative may reasonably and promptly
request in writing to avoid, resist, appeal against or compromise any
Claim relevant for the purposes of this schedule, including but not
limited to applying to postpone (so far as legally possible) the payment
of any Taxation provided that the Managers’ Representative shall be
entitled to require the Company or the Buyer to delegate the conduct of
such action to the Managers’ Representative or any agent or professional
adviser. Neither the Buyer nor any Company shall be obliged to
undertake any action or make any approval which it reasonably considers
would be materially prejudicial to the Company’s or the Buyer’s relations
with a Tax Authority or materially increase its future liability to
Tax. Where the Managers’ Representative requests any action be
taken pursuant to this paragraph 7.2, paragraph 2.2 (Time Limits) of
schedule 5 shall apply to the relevant Tax Claim with the reference to 6
months being replaced with a reference to 12 months.
|
||
7.3
|
The
Buyer shall keep the Managers’ Representative properly informed of all
matters pertaining to any dispute, appeal, negotiations or other
proceedings conducted by or at the request of the Managers’ Representative
pursuant to paragraph 7.2 and shall provide the Managers’ Representative
with copies of all correspondence pertaining thereto and shall take action
in respect of such dispute, appeal, negotiation or other proceedings
without unreasonable delay. The Buyer shall submit to the
Managers’ Representative for prior written approval (not to be
unreasonably withheld or delayed) any communication (written or otherwise)
related to such dispute, appeal, negotiations or other proceedings
(including for the avoidance of doubt any proposal for or agreement to
settlement) which is to be transmitted to the relevant Tax
Authority. Where the Company or the Buyer is required to
delegate conduct of any action the provisions of this paragraph 7.3 shall
apply replacing references to the “Buyer” with references to the
“Managers’ Representative” (and vice versa) and making any other necessary
modifications.
|
||
7.4
|
Neither
the Buyer nor the Managers’ Representative (nor any Principal Shareholder)
shall at any time admit liability or otherwise settle or compromise or
attempt to settle or compromise the Claim or action except upon the
express written consent of the other (such consent not to be unreasonably
withheld or delayed) and the Buyer shall give to the Managers’
Representative such assistance as it shall reasonably require in respect
of the conduct of the said dispute, compromise and/or
appeal.
|
||
7.5
|
The
Buyer shall not be obliged to (and the Managers’ Representative shall not)
take or to procure the contest of any Claim before any court or other
appellate body pursuant to paragraph 7.2 unless at the Principal
Shareholders’ cost and expense the Managers’ Representative obtains the
written opinion of tax counsel, being a member of the Revenue Bar
Association, of not less than ten years' call, after disclosure of all
relevant information and documents and having regard to all the
circumstances such contest has a reasonable prospect of
success.
|
||
7.6
|
Where
the Claim is subject to a time limit for appeal that expires within 15
Business Days of the Managers’ Representative having been given written
notice of
|
70
the
receipt of Claim in accordance with paragraph 7.1 above, the Buyer shall
be obliged to procure that the relevant Company applies to extend the time
limit relating to such Claim unless (the Managers’ Representative having
been given written notice of the receipt of that Claim in accordance with
paragraph 7.1 above), the Buyer or the Company have not within 15 Business
Days thereafter received instructions in writing from the Managers’
Representative and an indemnity for costs and expenses in accordance with
paragraph 7.2, or the Buyer or the Company has received instructions not
to make an appeal or apply for an extension, in which cases the Buyer and
the relevant Company shall be free to settle or pay the Claim on such
terms as they shall see fit, acting in good faith. If the Buyer
so procures that the relevant Company applies for such an extension and
the Buyer or the Company have not received such instructions in writing or
such indemnity within the 15 Business Day period, or the Buyer or the
company has received instructions not to make an appeal or apply for an
extension, the Buyer and the Company shall be free to settle or pay the
Claim on such terms as they shall see fit, acting in good
faith.
|
|||
7.7
|
Where
the Claim has arisen out of any fraudulent or dishonest act or omission by
a Seller or the Company on or prior to Completion or where the conduct of
the dispute has been delegated to the Managers’ Representative and the
Managers’ Representative is in breach of its obligations under paragraph
7, the Buyer and the Company shall be free to settle or pay the Claim on
such terms as they shall see fit, acting in good faith.
|
||
8
|
Recovery from Third
Parties
|
||
8.1
|
If
on or before the Second Payment Date, the Company or the Buyer recovers or
becomes aware that it is entitled to recover from any third party
(including any Taxation Authority but excluding the Company and any
employee or customer thereof and excluding any member of the Buyer’s
Group) any amount which is referable to a Liability to Taxation in respect
of which the Principal Shareholders have made payment under paragraph 3.1,
the Buyer shall as soon as reasonably practicable give notice of that fact
to the Managers’ Representative and shall take or procure that the Company
takes (at the Principal Shareholders' cost (excluding internal management
costs) and expense and provided that the Principal Shareholders indemnify
the Buyer and the Company to the reasonable satisfaction of the Buyer
against all costs and expenses which may be incurred thereby (for the
avoidance of doubt such indemnity being without recourse to the Escrow
Account)) any action necessary to effect such recovery which the Managers’
Representative may reasonably request in writing, and the Buyer shall
within 5 Business Days of recovering such sum repay to the Escrow Account
(where such repayment shall be held in accordance with the provisions of
clause 11), or, if recovery is made after the Second Payment Date, to the
Managers’ Representative for the account of the Principal Shareholders,
the lesser of:
|
||
8.1.1
|
the
amount so recovered; and
|
||
8.1.2
|
the
amount paid by the Principal Shareholders under paragraph 3.1 in respect
of the Liability to Taxation in question less any part of such amount
previously repaid to the Escrow Account or to the Managers’ Representative
for the account of the Principal Shareholders under any provision of this
schedule or elsewhere under this agreement or otherwise
howsoever,
|
||
and
less an amount equal to any Taxation which arises in consequence of such
recovery and less any costs and expenses (which have not already been
satisfied under this paragraph 8.1) suffered or incurred by the Buyer or
the Company in recovering such amount.
|
|||
8.2
|
The
provisions of paragraph 8.1 shall not apply where and to the extent that
the recovery in question relates to the Exit Bonus Relief or the VAT
Relief.
|
71
9
|
Reliefs
|
||
9.1
|
If
a Liability to Taxation under paragraph 3, which has resulted in a payment
by the Principal Shareholders under Part 3 of this schedule, has given
rise to a Relief (other than a Principal Shareholders’ Relief that is the
subject of paragraph 6.4.4 (limitations) or paragraph 10.2) for the
Company which would not otherwise have arisen, and
either:
|
||
9.1.1
|
the
Managers’ Representative notifies the Buyer by the Second Payment Date
that such Relief will arise as a result of such Liability to Taxation that
the Company can use to reduce or eliminate an Actual Liability to Taxation
in respect of which the Principal Shareholders would not have been liable
under the covenant under paragraph 3 (ignoring for this purpose the
application of paragraph 1.5 (Threshold) of schedule 5);
or
|
||
9.1.2
|
the
relevant Company has by the Second Payment Date utilised such Relief to
reduce or eliminate an Actual Liability to Taxation in respect of which
the Principal Shareholders would not have been liable under the covenant
under paragraph 3 (ignoring for this purpose the application of paragraph
1.5 (Threshold) of schedule 5)
|
||
then
the Buyer shall repay to the Escrow Account (where such repayment shall be
held in accordance with the provisions of clause 11), or, where the due
date for payment falls after the Second Payment Date, to the Managers’
Representative for the account of the Principal Shareholders, an amount
equal to the lesser of:
|
|||
9.1.3
|
the
Actual Liability to Taxation which has been eliminated;
or
|
||
9.1.4
|
the
amount by which such Actual Liability to Taxation is
reduced.
|
||
9.2
|
Payment
shall be due by the Buyer under this paragraph 9 on the date on which the
payment of the Actual Liability to Taxation is or would have been due or,
where appropriate, the date on which the Company receives a repayment in
respect of the Relief. The amount which the Buyer is liable to pay
hereunder shall not in any case exceed the amount paid by the Principal
Shareholders under this schedule in respect of the Liability to Taxation
which has given rise to the Relief in question.
|
||
10
|
Over-provision,
savings, etc
|
||
10.1
|
If
it becomes apparent by the Second Payment Date that any provision for Tax
in the Locked Box Schedule has proved to be an over-provision, or any
right to a repayment of Taxation treated as an asset in the Locked Box
Schedule has proved to have been understated, then the amount of such
over-provision or under-statement shall be dealt with in accordance with
paragraph 10.3, save to the extent that such over-provision or
understatement is due to:
|
||
10.1.1
|
a
reduction in the rates of Tax or any other change in legislation made
after the Balance Sheet Date with retrospective effect;
or
|
||
10.1.2
|
any
Post Balance Sheet Date Relief, Exit Bonus Relief or VAT
Relief;
|
||
10.1.3
|
any
act of the Buyer or a Company carried out after the Balance Sheet Date;
or
|
||
10.1.4
|
the
availability of a Relief that is the subject of paragraph 9 (Reliefs) or
the availability of a Principal Shareholders’ Relief that is the subject
of paragraph 6.4.4 (Limitations) or paragraph 10.2.
|
||
10.2
|
If
it becomes apparent that an Actual Liability to Taxation of any member of
the Buyer's Group to pay Tax in respect of which the Principal
Shareholders would not have been
|
72
liable
under the covenant in paragraphs 3 or for breach of Tax Warranty (ignoring
for this purpose the application of paragraph 1.5 (Threshold) of schedule
5) has by the Second Payment Date been reduced by the use of a Principal
Shareholders’ Relief (other than a Principal Shareholders’ Relief that is
the subject of paragraph 6.4.4 (Limitations) or paragraph 9), the amount
by which such Actual Liability to Taxation is so reduced shall be dealt
with in accordance with paragraph 10.3.
|
|||
10.3
|
Where
it is provided under paragraphs 10.1 or 10.2 that any amount (the "Relevant Amount") is to
be dealt with in accordance with this sub-paragraph:
|
||
10.3.1
|
the
Relevant Amount shall first be set off against any payment then due from
the Principal Shareholders under the covenants in paragraph 3 or for
breach of Tax Warranty; and
|
||
10.3.2
|
to
the extent there is an excess, a refund shall be made to the Escrow
Account (where such refund shall be held in accordance with the provisions
of clause 11) or, where the refund falls to be made after the Second
Payment Date, to the Managers’ Representative for the account of the
Principal Shareholders, of any previous payment or payments made by the
Principal Shareholders under the covenants in paragraph 3 or for breach of
Tax Warranty and not previously refunded under this paragraph up to the
amount of such excess within 5 Business Days of the Relevant Amount
arising; and
|
||
10.3.3
|
to
the extent that the excess referred to in paragraph 10.3.2 is not
exhausted under that paragraph, the remainder of that excess shall be
carried forward and set off against any future payment or payments which
become due from the Principal Shareholders under the covenant in paragraph
3 or for breach of Tax Warranty.
|
||
10.4
|
The
Buyer will inform the Managers’ Representative as soon as reasonably
practicable after it or the Company becomes aware that there may be a
Relevant Amount.
|
||
10.5
|
If
the parties cannot agree as to the existence and/or the quantum of the
Relevant Amount, such disagreement may be referred by either party to the
Auditors for determination and, in making such determination, the Auditors
will act as experts and not as arbitrators and their determination will
(in the absence of manifest error) be conclusive and binding on the
parties. The costs of the Auditors shall be borne as the
Auditors shall determine having regard to the relative merits of the
parties in respect of the disagreement and such determination as to costs
will be conclusive and binding on the parties.
|
||
10.6
|
Where
any such determination as is mentioned in paragraph 10.5 has been made,
the Managers’ Representative or the Buyer or the Company may request the
Auditors for the time being of the Company to review such determination in
the light of all relevant circumstances, including any facts which have
become known only since such determination, and to certify whether such
determination remains correct or whether, in the light of those
circumstances, the amount that was the subject of such determination
should be amended.
|
||
10.7
|
If
the Auditors determine under paragraph 10.6 that an amount previously
determined should be amended, that amended amount shall be substituted for
the purposes of paragraph 10.6 as the Relevant Amount in respect of the
determination in question in place of the amount originally certified, and
such adjusting payment (if any) as may be required by virtue of the
above-mentioned substitution shall be made as soon as practicable by the
Managers’ Representative (for and on behalf of the Principal Shareholders)
or (as the case may be) to the Managers’ Representative for the account of
the Principal Shareholders. Where such adjusting payment is
made to the Principal Shareholders before the Second Payment Date, it
shall instead be paid into the Escrow
Account.
|
73
11
|
Conduct of taxation
affairs
|
||
11.1
|
Subject
to the provisions of paragraph 7 (Claims Procedure) and subject to
and in accordance with the provisions of this paragraph 11, the Managers’
Representative shall, at the relevant Company’s reasonable cost and
expense properly incurred, be entitled to deal with the Tax affairs in
respect of all actual accounting periods of the Company ended on or prior
to the Completion Date for:
|
||
11.1.1
|
the
preparation and submission of Taxation returns of the
Company;
|
||
11.1.2
|
the
preparation and submission on behalf of the Company of all claims,
elections, surrenders, disclaimers, notices and consents for the purposes
of Taxation; and
|
||
11.1.3
|
all
matters relating to Taxation which concern or affect the Company,
including the conduct of all negotiations and correspondence and the
reaching of all agreements relating thereto or to any Taxation
documents.
|
||
11.2
|
The
Seller’s Representative shall deliver all Taxation documents which are
required to be signed by or on behalf of the Company to the Buyer for
authorisation and/or signing in order that they may be submitted to the
relevant Taxation Authority. The Managers’ Representative shall
deliver such Taxation documents to the Buyer within a reasonable time to
allow the Company to review and to allow the Buyer to comply with
paragraph 11.4. The Managers’ Representative shall consult in good faith
with the Buyer in relation to any matters referred to in paragraph 11.1.3
and shall take into account and incorporate the Buyer’s reasonable
requests and comments.
|
||
11.3
|
The
Buyer shall procure that:
|
||
11.3.1
|
the
Managers’ Representative is afforded such access (including, where
relevant, the taking of copies) to the books, accounts, records, personnel
and premises of the Company and such other assistance as it requires to
enable the Managers’ Representative to discharge its obligations under
paragraph 11.1; and
|
||
11.3.2
|
the
Managers’ Representative is promptly sent a copy of any communication from
any Taxation Authority insofar as it relates to the pre-Completion
Taxation affairs.
|
||
11.4
|
The
Buyer shall procure that any Taxation document delivered to it under
paragraph 11.2 be authorised, signed and submitted to the appropriate
Taxation Authority without unreasonable delay (and in any event within any
relevant Taxation time limit) subject to the Buyer's reasonable
amendments.
|
||
11.5
|
The
Buyer shall procure that the Company shall not submit any corporation tax
return for the accounting period of the Company commencing prior to
Completion and ending after Completion (the "Straddle Period") to any
Taxation Authority without giving the Managers’ Representative a
reasonable opportunity to make representations and comment upon
that part of any such return which relates to that part of the Straddle
Period which falls on or before Completion and the Buyer shall not
unreasonably refuse to incorporate such comments as the Managers’
Representative may make.
|
||
11.6
|
The
Buyer shall be under no obligation to procure the authorisation, signing
or submission to a Tax Authority of any Taxation document which it
considers in its reasonable opinion to be false, misleading, incomplete or
inaccurate in any material respect
|
||
11.7
|
In
this paragraph 11:
|
74
"accounting
period"
|
|||
means
any period by reference to which any income, profits or gains, or any
other amounts relevant for the purposes of Taxation, are measured or
determined;
|
|||
"pre-Completion Taxation affairs" means
the Taxation affairs of the Company for which the Managers’ Representative
is responsible under this paragraph 11;
|
|||
"Taxation
documents"
|
|||
means
the Taxation returns, claims, and other documents which the Principal
Shareholders are required to prepare on behalf of the Company under
paragraphs 11.1.1 and 11.1.2 or to which reference is made in paragraphs
11.1.3 and 11.5;
|
|||
"Taxation
return"
|
|||
means
any return required to be made to HM Revenue and Customs of the income,
profits or gains of the Company including any related accounts,
computations, correspondence and attachments; and
|
|||
"Taxation time
limit"
|
|||
means
the latest date on which a Taxation document can be executed or delivered
to a relevant Taxation Authority without incurring any charge to penalties
and/or interest.
|
|||
References
to the Buyer and the Principal Shareholders and the Managers’
Representative in this paragraph 11 shall, where appropriate, include
references to the duly appointed agents of each and of all the Buyer and
of the Principal Shareholders’ and of the Managers’
Representative.
|
|||
12
|
Supplemental
|
||
12.1
|
All
payments by the Principal Shareholders and repayments by the Buyer under
this schedule shall be treated to the extent legally possible as
adjustments to the consideration paid for the Shares pursuant to this
agreement.
|
||
12.2
|
The
provisions of paragraphs 6 (Limitations), 7 (Claims Procedure), 8
(Recovery from Third Parties) of this schedule shall apply to a claim
under this agreement for breach of the Tax Warranties mutatis
mutandis. The provisions of paragraph 12 (Fraud) of schedule 5
shall apply to this schedule mutatis mutandis.
|
||
12.3
|
In
the event of any conflict or uncertainty the provisions of this schedule
shall apply and shall take precedence over the other provisions of this
agreement.
|
||
12.4
|
If
the Buyer or any Company has acted in accordance with the request(s) of
the Managers’ Representative, no Seller can bring a claim for
non-compliance by the Buyer or the relevant Company (as the case may be)
with any of the provisions of this schedule.
|
||
13
|
Buyer's
Covenant
|
||
13.1
|
The
Buyer shall pay to the Managers’ Representative for the account of the
Principal Shareholders an amount equal to the amount of any Taxation for
which the Principal Shareholders become liable by virtue of the failure of
the Buyer, the Company or any company controlled by the Buyer or a person
or persons controlling the Buyer (construing "control" in accordance with
Section 416 Taxes Act, but subject to the modifications in Section 767B
Taxes Act) to discharge the liability to such Taxation together with any
reasonable costs and expenses reasonably and properly incurred by the
Managers’ Representative in connection with taking any successful action
under this paragraph, except to the extent such
Taxation:
|
75
13.1.1
|
is
subject to a claim under the Agreement or this Schedule by the Buyer which
has not been satisfied or could be the subject of any such claim, assuming
that a claim was made in respect of such Taxation;
|
||
13.1.2
|
has
been recovered under any relevant statutory provision (and the Principal
Shareholders shall procure that no such recovery is sought to the extent
that payment is made hereunder); or
|
||
13.1.3
|
has
been paid or discharged by the relevant Buyer, Company or company
controlled by the Buyer, or person or persons controlling the Buyer, as
the case may be.
|
||
13.2
|
Paragraphs
5 (Due Date for Payment), 6.7 (Time Limits) and 7 (Claims Procedure) of
this schedule and paragraph 1.5 (Threshhold) of schedule 5 shall apply to
paragraph 13.1 as they apply to the covenants contained in paragraph 3,
replacing references to the "Principal Shareholders" and "Managers’
Representative" by references to the "Buyer" (and vice versa) and making
any other necessary modifications.
|
||
14
|
Exit Bonus
Relief
|
||
14.1
|
If
and to the extent that by the Second Payment Date a Company obtains, by
utilisation of any Exit Bonus Relief, a reduction in a liability to make
an actual payment of corporation tax, the Buyer shall pay to the relevant
Sellers’ Representatives for the account of the Sellers an amount equal to
the corporation tax actually saved by the utilisation of the Exit Bonus
Relief:
|
||
14.1.1
|
in
the event that no notice of enquiry (as specified in paragraph 14.1.2
below) has been given to the relevant Company prior to that date, on 1
October 2010 (or, if such date is not a Business Day, on the next Business
Day); or
|
||
14.1.2
|
in
the event that a notice of enquiry has been given to the Claimant Company
under paragraph 24, Schedule 18, FA 1998 in respect of the accounting
period in which a Company so utilises an Exit Bonus Relief (including by
claiming surrender of the Exit Bonus Relief from the Company liable to pay
the Bonus to which the Exit Bonus Relief relates), the date of receipt of
a closure notice under paragraph 32, Schedule 18, FA 1998, and for the
avoidance of doubt in such case the Buyer shall only be obliged to make
payment under this paragraph 14.1 to the extent that following such
enquiry, the Tax Authority has accepted the utilisation of an Exit Bonus
Relief.
|
||
14.2
|
For
the avoidance of doubt, the provisions of paragraph 14.1 shall apply
notwithstanding that the corporation tax saved is corporation tax for
which the Buyer could make a claim either under paragraph 3 or for breach
of a Tax Warranty. Where and to the extent that the corporation
tax saved is corporation tax for which the Buyer could so claim, the
provisions of paragraph 6.11 shall apply and the Buyer shall remain
entitled to make such claims for such corporation tax notwithstanding that
the Exit Bonus Relief has been used to reduce or eliminate such
corporation tax.
|
||
15
|
VAT
Relief
|
||
15.1
|
If
and to the extent that by the Second Payment Date Brookhouse Composites
Limited obtains the VAT Relief from HMRC, the Buyer shall pay to the
relevant Sellers Representatives for the account of the Sellers, an amount
equal to the VAT Relief refunded by HMRC:
|
||
15.1.1
|
in
the event and to the extent that HMRC effect the refund or credit by
reducing the amount of output VAT otherwise payable by Brookhouse
Composites Limited in the quarterly accounting period current at
Completion by the set off or credit of the VAT Relief, on 1 October 2008;
or
|
76
15.1.2
|
in
the event and to the extent that HMRC effect the refund by making a
payment to Brookhouse Composites Limited in respect of the VAT Relief, 5
Business Days after receiving such payment.
|
||
15.2
|
For
the avoidance of doubt, the provisions of paragraph 15.1 shall apply
notwithstanding that any output VAT that is otherwise payable by
Brookhouse Composites Limited in the quarterly accounting period current
at Completion which is reduced, is output VAT for which the Buyer could
make a claim either under paragraph 3 or for breach of a Tax
Warranty. Where and to the extent that the output VAT reduced
is output VAT for which the Buyer could so claim, the provisions of
paragraph 6.11 shall apply and the Buyer shall remain entitled to make
such claims for such output VAT notwithstanding that the VAT Relief has
been used to reduce or eliminate such output
VAT.
|
77
Schedule
7 –
Properties
Part
1 – Freehold Property
None
Part
2 – Leasehold Properties
Description
|
Details of lease/
licence (date and
parties)
|
Duration
|
Current annual
rent/licence fee and review date(s)
|
Existing
use
|
Break
rights
|
Exclusion from s.24-28
LLTA 0000
|
Xxxxxxxxx
Xxxxx, Xxxxxxx
Xxxx,
Xxxx
|
Lease
dated 28 November 2003 as varied by a Deed of Variation and Rectification
dated 14 April 2004 both made between (1) Brookhouse Managed Properties
Limited and (2) Brookhouse Aerospace Limited
|
20
years commencing on and including 28 November 2003
|
£235,370
to be reviewed on 27 November 2008 and every fifth anniversary thereof, on
the penultimate day of the
contractual
term and any other date specified under clause 3.2.4 of the
Lease
|
Uses
within B1, B2 and/or B8 of the Schedule to the Town and Country Planning
(Use Classes) Order 1987
|
28
November
2008,
28
November
2013
and
28 November
2018
by serving at
Least
six
months'
written
notice
on the
landlord
|
No
|
Xxxxx
Xxxx, Xxxxxx,
Xxxxxxxxxx
|
Lease
dated 28 November 2003 made between (1) Brookhouse Managed Properties
Limited and (2) Brookhouse Composites Limited as varied
|
20
years commencing on and including 28 November 2003
|
£108,500
to be reviewed on 25 March 2011 and every fifth anniversary thereof, on
the
penultimate
day
of
the
contractual
term
and
any other
|
Uses
within B1, B2 and/or B8 of the Schedule to the Town and Country Planning
(Use Classes) Order 1987
|
28
November 2013 and 28 November 2018 by serving at least six months' written
notice on the landlord
|
No
|
78
Description
|
Details of lease/
licence (date and
parties)
|
Duration
|
Current annual
rent/licence fee and review date(s)
|
Existing
use
|
Break
rights
|
Exclusion from s.24-28
LLTA 1954
|
by
a Deed of Variation dated 14 April 2004 made between (1) Brookhouse
Managed Properties Limited and (2) Brookhouse Composites Limited and a
Deed of Variation dated 5 June 2007 made between (1) Rom Capital
(Industrial) Limited and (2) Brookhouse Composites Limited
|
date
specified
under
clause
3.2.4
of the
Lease
|
|||||
Part
of India Mill and
Xxxxxxx
Xxxx, Xxxxxx,
Xxxxxxxxxx,
XX0 0XX
|
Lease
dated 28 November 2003 made between (1) Brookhouse Managed Properties
Limited and (2) Brookhouse Composites Limited as varied by a Deed of
Variation and
|
20
years commencing on and including 28 November 2003
|
£254,000
to be reviewed on the fifth anniversary of 28 November 2003 and every
fifth anniversary thereof, on the penultimate day of the contractual term
and any other date specified
|
Uses
within B1, B2 and/or B8 of the Schedule to the Town and Country Planning
(Use Classes) Order 1987
|
28
November 2008, 28 November 2013 and 28 November 2018 by serving at least
six months written notice on the landlord
|
No
|
79
Description
|
Details of lease/
licence (date and
parties)
|
Duration
|
Current annual
rent/licence fee and review date(s)
|
Existing
use
|
Break
rights
|
Exclusion from s.24-28
LLTA 1954
|
Rectification
dated 14 April 2004 made between (1) Brookhouse Managed Properties Limited
and (2) Brookhouse Composites Limited and a Deed of Variation dated 5 June
2007 made between (1) Rom Capital (Industrial) Limited and (2) Brookhouse
Composites Limited
|
under
clause 3.2.4 of the Lease
|
|||||
Flat
2 and Engine Room
Space
of India Mill,
Darwen
|
Lease
dated 5 June 2007 made between (1) Rom Capital (Industrial) Limited and
(2) Brookhouse Composites Limited
|
24
June 2007 to 27 November 2023
|
£28,275
reviewed on the fifth anniversary of 28 November 2003 and every fifth
anniversary thereof, on the
penultimate
day
of
the
contractual
term
and
any other
date
specified
under
clause
3.2.4
of the
|
Uses
within B1, B2 and/or B8 of the Schedule to the Town and Country Planning
(Use Classes) Order 1987
|
No
|
80
Description
|
Details of lease/
licence (date and
parties)
|
Duration
|
Current annual
rent/licence fee and review date(s)
|
Existing
use
|
Break
rights
|
Exclusion from s.24-28
LLTA 1954
|
Lease
dated 28 November 2003
|
Part
3 – Leases/Licences Created by the Company
Part
of the ground and first floor of Xxxxxxxxx House, Dukinfield Road,
Hyde
|
Lease
dated 30 September 2005 made between (1) Brookhouse Aerospace Limited and
(2) Tameside Metropolitan Borough Council
|
9
years commencing on and including 1 October 2005
|
£103,715
to be reviewed on the third and sixth anniversary of 1 October
2005
|
Office
accommodation
|
None
|
Yes
|
81
Part
4 – The Property Warranties
1
|
The Properties and
Title
|
||
1.1
|
The
Properties comprise all of the premises and land owned occupied or
otherwise used in connection with the businesses of the Company or in
which the Company (or any Group Company) has any rights interest or
liability.
|
||
1.2
|
The
information relating to the Properties set out at part 2 of schedule 7 is
true complete and accurate.
|
||
1.3
|
No
Group Company has entered into any agreement to acquire an interest in, or
dispose of, any premises or land which has not been
completed.
|
||
1.4
|
Each
Group Company has all deeds and documents relevant to that Group Company's
title to the Properties (or any of them) and are in that Group Company's
possession or control free from any security interest or
lien.
|
||
1.5
|
The
Company or a relevant Group Company as appropriate holds the Properties
for the estate or interest stated in schedule 7, and is in sole and
undisputed occupation of them and no other person is or will become
entitled to occupation of the Properties or any of
them.
|
||
1.6
|
The
Properties are not subject to any outgoings other than uniform business
rates (except rating surcharge), water rates, insurance, rent and service
charges and no Group Company is in arrears with any such outgoings which
have become properly due to date.
|
||
2
|
Contingent
Liabilities
|
||
2.1
|
No
Group Company is actually or contingently liable in relation to any
freehold or leasehold property (whether as owner or former owner or as
tenant or former tenant of any such property or as an original contracting
party, or guarantor of any party, to any deed, document, lease or licence
connected with such property) other than the
Properties.
|
||
3
|
The
Leases
|
||
3.1
|
With
respect to the leases (which expression includes underleases) under which
the Properties are held:
|
||
3.1.1
|
so
far as the Sellers are aware the Company or a relevant Group Company as
the case may be is in material compliance with these material covenants on
the part of the tenant contained in the leases;
|
||
3.1.2
|
the
rent referred to in schedule 7 is the current rent payable under the
relevant lease;
|
||
3.1.3
|
there
are no rent reviews which are currently in progress save as disclosed;
and
|
||
3.1.4
|
no
notice of breach has been received by the Company which remains
outstanding.
|
||
4
|
Tenancies
|
||
4.1
|
In
relation to those of the Properties which are subject to any lease,
underlease, agreement, licence or other right of occupation
("tenancies"):
|
||
4.1.1
|
each
tenancy is fairly and accurately summarised in part 3 of schedule
7;
|
82
4.1.2
|
all
rent and other payments have been paid to date as and when they become due
and no rent has been commuted, waived or paid in advance of the due date
for payment;
|
|
4.1.3
|
all
the tenancies are valid and in full force.
|
|
5
|
Preliminary
Enquiries
|
|
5.1
|
All
replies to Enquiries raised by the Buyer's Property Solicitors are in all
respects true and accurate.
|
|
5.2
|
For
the purposes of warranty 5.1 above, "Enquiries" means all
written replies given by the Sellers' Solicitors to the Buyer's Property
Solicitors in relation to the Properties and for the avoidance of doubt
shall include:
|
|
5.2.1
|
replies
to CPSE 1 (version 2.6), CPSE (version 2.2) and CPSE 4 (version 2.1)
enquiries; and
|
|
5.2.2
|
correspondence
from the Sellers' Solicitors containing written replies to written
enquiries in relation to the Properties from the Buyer's Property
Solicitors.
|
83
Schedule
8 –
Intellectual Property
Domain
Names
Domain
Name
|
Proprietor
|
Renewal
Date
|
Xxxxxxxxxx.xxx
|
Brookhouse
Composites Limited
|
11
January 2011
|
84
Schedule
9 – Balance
Sheet
85
Schedule
10 – Locked
Box
Final
SPA Position as at 11 June
|
||
£'000
|
||
Enterprise
Value
|
44,000
|
|
Assets/Liabilities
of the Company Assumed by Acquirer
|
||
Bank
Cash/(Overdraft)
|
1,877
|
|
Exit
Bonus
|
(1,128)
|
|
General
Bonus
|
(235)
|
|
Accrued
Dividends
|
0
|
|
Share
Issue Proceeds
|
17
|
|
Tax
|
||
Corporate
Tax as per BS
|
(17)
|
|
Estimated
Corporate Tax on YTD Profits
|
(661)
|
|
NI
Liability on 'New Shares'
|
(70)
|
|
Estimated
Tax Benefit of Exit Bonus
|
0
|
|
Hedging
Contracts
|
0
|
|
Excess
Working Capital
|
(904)
|
|
Additional
cash profits generated from Ref BS date to completion
|
000
|
|
Xxxxxx
Xxxxxxxx Xxxxxxxxx
|
(10)
|
|
KPMG
Tax/Accounting Advice to Company
|
(15)
|
86
Sum
of Adjustments to Enterprise Value
|
(1,011)
|
|
Amount
Paid to Sellers Solicitors (Consideration plus liabilities to be paid on
Company's behalf)
|
42,989
|
|
Liabilities
Settled by Sellers Solicitors on Company's Behalf
|
||
Bank
Loans
|
||
Bank
RCF
|
(2,325)
|
|
Bank
RCF Accrued Interest
|
(1)
|
|
Bank
Senior Stretched
|
(750)
|
|
Bank
Senior Stretched Accrued Interest
|
(14)
|
|
Bank
overdraft interest
|
(4)
|
|
Equipment
Loan
|
||
HP
Creditor
|
(1,480)
|
|
Interest
|
(37)
|
|
HP
Creditor VAT
|
(259)
|
|
Dividend
|
(255)
|
|
Shareholder
Loan Note
|
(7,282)
|
|
Shareholder
Loan Note Accrued Interest
|
(241)
|
|
Sum
of Debt Adjustments
|
(12,648)
|
|
Gross
Equity Value pre Shareholder Expenses & pre Escrow
(Consideration)
|
30,341
|
|
Escrow
|
(2,500)
|
|
Gross
Equity Value pre Shareholder Expenses paid at Closing
|
27,841
|
|
87
Schedule
11 – Buyer's
Knowledge
(1)
Name
|
(2)
Subject matter/Warranty no.
|
Xxxx
Xxxxxxxx
|
The
Accounts and the Management Accounts
Warranties
2.1 and 2.2
|
Xxxx
Xxxxxxxx
|
Changes
since the Accounts Date
Warranty
3
|
Xxxxx
Xxxxxxxx and Xxxxxx Xxxxx
|
Intellectual
Property and Information Technology
Warranty
4.4
|
Xxxx
Xxxxxxxx
|
Debtors/Creditors
Warranty
5
|
Xxxxxxx
Xxxxxxxx
|
Agreements
Warranty
0
|
Xxxxxx
Xxxx
|
Xxxxxxxxx
Xxxxxxxx
0
|
Xxxxxx
Xxxx
|
Pensions
and other benefits
Warranty
8
|
Xxxx
Xxxx
|
Insurance
Warranty
9
|
Xxxx
Xxxxxxxx
|
Finance,
borrowing and guarantees
|
88
(1)
Name
|
(2)
Subject matter/Warranty no.
|
Warranty
10
|
|
Xxxx
Xxxx
|
Environmental
matters
Warranty
24
|
Xxxx
Xxxx
|
Health
and safety matters
Warranty
25
|
Xxxx
Xxxxxxxx
|
Tax
Tax
Warranties
|
Xxxxx
Xxxxxxxx
|
Property
Paragraph
4 of Schedule 7
|
(1)
Name
|
(2)
Subject matter/Warranty no.
|
Xxxxxxx
Xxxxx
|
All
All
|
Xxxx
Xxxxxx
|
All
All
|
Xxxx
Xxxxxxxxx
|
All
All
|
89
Schedule
12 – Loan Note
Holders
Name
|
Address
|
Loan
Notes held (£)
|
Aberdeen
Xxxxxx Xxxxxxxxx
Private
Equity Fund "A"
|
Xxx
Xxx Xxxxxxxxxx,
Xxxxxx
XX0X 0XX
|
£2,022,782
|
Aberdeen
Xxxxxx Xxxxxxxxx
Private
Equity Fund "B"
|
Xxx
Xxx Xxxxxxxxxx,
Xxxxxx
XX0X 0XX
|
£1,823,165
|
Aberdeen
Development
Capital
plc
|
00
Xxxxxx Xxxxxxx,
Xxxxxxxx,
Xxxxxxxxxxxxx
XX00
0XX
|
£386,430
|
Tameside
MBC
|
Xxxxxxx
Xxxxxxx, Xxxxxxxxxx
Xxxx,
Xxxxxx-xxxxx-Xxxx
XX0
0XX
|
£657,780
|
West
Yorkshire Pension
Fund
|
Xxx
Xxxx Xxxx, Xxxxxxxx,
Xxxx
Xxxxxxxxx XX0 0XX
|
£289,941
|
State
Street Nominees
Limited
a/c 2GV3
|
000
Xxxxx Xxxx, Xxxxxxxxx,
XX0
0XX
|
£114,963
|
Hexagon
Investments LLC
|
000
Xxxxx 00xx
Xxxxxx, Xxxxx
000,
Xxxxxxxxx, XXX
XX00000
|
£483,038
|
COIP
(GP) Limited
|
Xxx
Xxx Xxxxxxxxxx,
Xxxxxx
XX0X 0XX
|
£18,355
|
Xxxxx
Xxxxxxxxx Xxxxxx, Xxxxxx Xxxx Xxxxxx and Xxxxxxx Xxxxx Xxxx Xxxx as
trustees of the XX Xxxxxx 1998 Discretionary Trust
|
x/x
Xxx Xxxxxx, Xxxxxxxxxxx
Xxxx,
Xxxxxx Xxxx,
Xxxxxxxx,
Xxxxxxxxx, XX0
0XX
|
£742,730
|
Xxxxx
Xxxxxx Xxxxxx, Xxxxxx Xxxxxxx Xxxxxx and Xxxxxxx Xxxxx Xxxx Xxxx as
trustees of the XX Xxxxxx 1998 Discretionary Trust
|
c/o
1 Woodfold Hall,
Woodfold
Park, Xxxxxxx
Xxxx,
Xxxxxx, Xxxxxxxxx,
XX0
0XX
|
£742,730
|
90
EXECUTED
AND DELIVERED AS A DEED by
|
)
|
|
XXXXXX XXXXXXX
XXXXXXX
|
)
|
|
in
the presence of:
|
)
|
……………………………………….
|
………………………………………………
Witness
signature
………………………………………………
Witness
name
………………………………………………
Witness
address
………………………………………………
Witness
occupation
EXECUTED
AND DELIVERED AS A DEED by
|
)
|
|
XXX
XXXXXX
|
)
|
|
in
the presence of:
|
)
|
……………………………………….
|
………………………………………………
Witness
signature
………………………………………………
Witness
name
………………………………………………
Witness
address
………………………………………………
Witness
occupation
EXECUTED
AND DELIVERED AS A DEED by
|
)
|
|
XXXXX
XXXXXXX
|
)
|
|
in
the presence of:
|
)
|
……………………………………….
|
………………………………………………
Witness
signature
………………………………………………
Witness
name
………………………………………………
Witness
address
………………………………………………
Witness
occupation
EXECUTED
AND DELIVERED AS A DEED by
|
)
|
|
XXXXXXX
XXXXXXX
|
)
|
|
in
the presence of:
|
)
|
……………………………………….
|
………………………………………………
Witness
signature
………………………………………………
Witness
name
………………………………………………
Witness
address
………………………………………………
Witness
occupation
EXECUTED
AND DELIVERED AS A DEED by
|
)
|
|
XXXXXXXX
XXXXX
|
)
|
|
in
the presence of:
|
)
|
……………………………………….
|
………………………………………………
Witness
signature
………………………………………………
Witness
name
………………………………………………
Witness
address
………………………………………………
Witness
occupation
EXECUTED AND DELIVERED
AS A DEED BY
|
)
|
……………………………………….
|
ABERDEEN XXXXXX
XXXXXXXXX PRIVATE
|
)
|
Attorney
|
EQUITY
FUND 'A' acting by
|
)
|
|
in
the presence of:
|
………………………………………………
Witness
signature
………………………………………………
Witness
name
………………………………………………
Witness
address
………………………………………………
Witness
occupation
EXECUTED AND DELIVERED
AS A DEED BY
|
)
|
……………………………………….
|
ABERDEEN XXXXXX
XXXXXXXXX PRIVATE
|
)
|
Attorney
|
EQUITY
FUND 'B' acting by
|
)
|
|
in
the presence of:
|
………………………………………………
Witness
signature
………………………………………………
Witness
name
………………………………………………
Witness
address
………………………………………………
Witness
occupation
EXECUTED AND DELIVERED
AS A DEED BY
|
)
|
……………………………………….
|
ABERDEEN DEVELOPMENT
CAPITAL PLC
|
)
|
Attorney
|
acting
by
|
)
|
|
in
the presence of:
|
………………………………………………
Witness
signature
………………………………………………
Witness
name
………………………………………………
Witness
address
………………………………………………
Witness
occupation
EXECUTED AND DELIVERED
AS A DEED BY
|
)
|
……………………………………….
|
TAMESIDE
MBC acting by
|
)
|
Attorney
|
in
the presence of:
|
)
|
………………………………………………
Witness
signature
………………………………………………
Witness
name
………………………………………………
Witness
address
………………………………………………
Witness
occupation
EXECUTED AND DELIVERED
AS A DEED BY
|
)
|
……………………………………….
|
YORKSHIRE
PENSION FUND acting by
|
)
|
Attorney
|
in
the presence of:
|
)
|
………………………………………………
Witness
signature
………………………………………………
Witness
name
………………………………………………
Witness
address
………………………………………………
Witness
occupation
EXECUTED AND DELIVERED
AS A DEED BY
|
)
|
……………………………………….
|
MELLON
NOMINEES (UK) LIMITED acting by
|
)
|
Attorney
|
in
the presence of:
|
)
|
………………………………………………
Witness
signature
………………………………………………
Witness
name
………………………………………………
Witness
address
………………………………………………
Witness
occupation
EXECUTED AND DELIVERED
AS A DEED BY
|
)
|
……………………………………….
|
HEXAGON
INVESTMENTS LLC acting by
|
)
|
Attorney
|
in
the presence of:
|
)
|
………………………………………………
Witness
signature
………………………………………………
Witness
name
………………………………………………
Witness
address
………………………………………………
Witness
occupation
EXECUTED AND DELIVERED
AS A DEED BY
|
)
|
……………………………………….
|
COIP
(UK) LIMITED acting by
|
)
|
Attorney
|
in
the presence of:
|
)
|
………………………………………………
Witness
signature
………………………………………………
Witness
name
………………………………………………
Witness
address
………………………………………………
Witness
occupation
EXECUTED
AND DELIVERED AS A DEED by
|
)
|
|
XXXXX
XXXXXX
|
)
|
|
in
the presence of:
|
)
|
……………………………………….
|
………………………………………………
Witness
signature
………………………………………………
Witness
name
………………………………………………
Witness
address
………………………………………………
Witness
occupation
EXECUTED
AND DELIVERED AS A DEED by
|
)
|
|
XXXXX
XXXXXX
|
)
|
|
in
the presence of:
|
)
|
……………………………………….
|
………………………………………………
Witness
signature
………………………………………………
Witness
name
………………………………………………
Witness
address
………………………………………………
Witness
occupation
EXECUTED AND DELIVERED
AS A DEED BY
|
)
|
……………………………………….
|
BARCLAYS
BANK PLC acting by
|
)
|
Director
|
a
director, in the presence of:
|
)
|
………………………………………………
Witness
signature
………………………………………………
Witness
name
………………………………………………
Witness
address
………………………………………………
Witness
occupation
EXECUTED
AND DELIVERED AS A DEED by
|
)
|
……………………………………….
|
KAMAN UK HOLDINGS
LIMITED
|
)
|
Director
|
acting
by:
|
)
|
……………………………………….
|
||
Director
|