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EXHIBIT 10.1
Dated 22 October 2000
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(CONFORMED COPY)
THE XXXXX GROUP PUBLIC LIMITED COMPANY
- and -
GENCORP INC.
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AGREEMENT
FOR THE SALE AND PURCHASE OF ALL OF THE ISSUED
SHARES OF VARIOUS COMPANIES COMPRISING THE
DRAFTEX INTERNATIONAL CAR BODY SEALS DIVISION
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ASHURST XXXXXX XXXXX
Xxxxxxxxx Xxxxx
0 Xxxxxx Xxxxxx
Xxxxxx XX0X 0XX
Tel: 000-0000 0000
Fax: 000-0000 0000
RSG/L162.00018
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CONTENTS
CLAUSE PAGE
1. INTERPRETATION......................................................1
2. SALE AND PURCHASE AND ADJUSTMENTS...................................9
3. CONDITIONS.........................................................11
4. PERIOD TO COMPLETION...............................................12
5. COMPLETION.........................................................17
6. CAPITAL EMPLOYED AND COMPLETION ACCOUNTS...........................22
7. RELEASE............................................................25
8. WARRANTIES.........................................................25
9. PROTECTION OF GOODWILL.............................................26
10. CONFIDENTIAL INFORMATION...........................................28
11. PENSIONS...........................................................29
12. ANNOUNCEMENTS......................................................29
13. COSTS..............................................................30
14. EFFECT OF COMPLETION...............................................30
15. FURTHER ASSURANCES.................................................30
16. INDEMNITIES........................................................31
17. ENTIRE AGREEMENT...................................................33
18. VARIATIONS.........................................................34
19. WAIVER.............................................................34
20. INVALIDITY.........................................................34
21. NOTICES............................................................34
22. COUNTERPARTS.......................................................35
23. GOVERNING LAW AND JURISDICTION.....................................35
24. THIRD PARTY RIGHTS.................................................36
25. ASSIGNMENT.........................................................36
SCHEDULE 1................................................................38
Target Group Companies....................................................38
SCHEDULE 2................................................................39
Particulars relating to Target Group Companies............................39
SCHEDULE 3................................................................54
The Warranties............................................................54
SCHEDULE 4................................................................79
Vendor Protection Clauses.................................................79
SCHEDULE 5................................................................85
Part 1
The Properties............................................................85
SCHEDULE 5................................................................87
Part 2
The Excluded Properties...................................................87
SCHEDULE 6................................................................88
SCHEDULE 7................................................................89
Pro forma Completion Accounts.............................................89
SCHEDULE 8................................................................92
Accounting Policies and Procedures for The Completion Accounts............92
APPENDIX A................................................................97
Draftex...................................................................97
SCHEDULE 9................................................................99
Allocation of Consideration...............................................99
SCHEDULE 10..............................................................100
SCHEDULE 11..............................................................101
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Senior Executives........................................................101
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THIS AGREEMENT is made on 22 October 2000
BETWEEN:-
(1) GENCORP INC. whose principal place of business is at XX Xxx 000000,
Xxxxxxxxxx, XX 00000-0000 X.X.X. (the "BUYER"); and
(2) THE XXXXX GROUP PUBLIC LIMITED COMPANY (No. 55513) whose registered
office is at 0 Xx Xxxxx'x Xxxxxx Xxxxxx XX0X 0XX (the "SELLER").
THE PARTIES AGREE AS FOLLOWS:-
1. INTERPRETATION
1.1 In this agreement the following words and expressions and
abbreviations have the following meanings, unless the context
otherwise requires:-
"ACCOUNTS" means the statutory consolidation schedules in the agreed
terms of the Target Group including the balance sheet of each member
of the Target Group and the profit and loss account, as at and for the
financial period ended on the Accounts Date and including the
adjustments set out in the Vendor Due Diligence Assistance Reports and
described in the Disclosure Letter;
"ACCOUNTS DATE" means 31 December 1999;
"ACCOUNTING POLICIES" means the bases, practices, policies and
procedures set out or referred to in schedule 8 (in each case applied
on bases consistent with the application of the bases, practices,
policies and procedures in the Accounts);
"ACQUISITION SHARES" means the entire issued share capital of Draftex
Inc., Draftex Beteiligungsgeschellschaft mbH, Draftex International
(Pribor) SRO, Draftex International Iberica SA, Slic Corvol SA, Slic
Gruchet SA and Snappon SA;
"AGREED CAPITAL EMPLOYED" means (Euro) 232,112,000, being the Capital
Employed (but as at the Accounts Date) and being the sum of the
relevant items set out in schedule 7;
"AGREED RATE" means 2 per cent. above the base rate from time to time
of National Westminster Bank plc;
"ATOS SOFTWARE" bears the same meaning as in the IT Transitional
Services Procurement Agreement;
"BEIJING DRAFTEX SHARES" means the 60 per cent. equity interest held
indirectly by the Seller or directly by a member of the Seller's Group
in the PRC Company;
"BUSINESS DAY" means a day (excluding Saturdays) on which banks
generally are open in London, New York and San Francisco for the
transaction of normal banking business;
"BUSINESS IP" bears the same meaning as in the Intellectual Property
Deed;
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"BUYER'S GROUP" means the Buyer, its holding companies and subsidiary
companies and subsidiary companies from time to time of such holding
companies, all of them and each of them as the context admits;
"BUYER'S SOLICITORS" means Xxxxxxx & Xxxxxxx of 00 Xxxxxx Xxxxxx,
Xxxxxx XX0X 0XX;
"CAPITAL EMPLOYED" means all assets and liabilities of all of the
Target Group Companies, excluding all Cash, Intra-Group Debt, Third
Party Debt, Corporate Tax Assets and shareholders' equity calculated
using the equivalent corresponding line items used to calculate the
Agreed Capital Employed as at the close of business on the date of
Completion;
"CASH" means the aggregate cash and cash equivalents, as determined in
accordance with the Accounting Policies, of the Target Group as at the
close of business on the Completion Date;
"COMPLETION" means the completion of the sale and purchase of the
Acquisition Shares in accordance with clause 4.13;
"COMPLETION DATE" means the date on which Completion occurs;
"COMPLETION ACCOUNTS" means the aggregated pro forma balance sheet of
the Target Group as at the Completion Date to be prepared in the
format set out in schedule 7 in accordance with clause 6 and schedule
8;
"CONDITIONS" means the conditions set out in clause 3.1;
"CONFIDENTIAL INFORMATION" means all information relating to any
Target Group Company's business, financial or other affairs (including
Know-How, future plans and targets of any Target Group Company) which
is not in the public domain;
"CONSIDERATION" has the meaning ascribed to it in clause 2.4;
"CORPORATE TAX ASSETS" means the taxation amounts in relation to the
tax losses totalling (Euro) 12.071m as at the Accounts Date
(comprising (Euro) 1.419m in respect of Slic Gruchet SA, (Euro)
9.277m in respect of Draftex Inc., (Euro) 0.11m in respect of Slic
Corvol SA and (Euro) 1.265m in respect of Snappon SA (and totalling
(Euro) 7.345m as at 30 June 2000));
"CZECH COMPANY" means Draftex International (Pribor) SRO (proposed to
be changed to Draftex International s.r.o.) a limited liability
company with its registered office at Xxxxx 0, Xxxxxxxx Xxxxxx 00,
Xxxxx Xxxxxxxx, having the Identification Number, 26162148;
"DATA ROOM INFORMATION" means the materials and information made
available for inspection by the Buyer and its advisers at the offices
of the Seller's Solicitors details of which are given in the
Disclosure Letter;
"DEFERRED AMOUNT" means an amount in Euro equal to the aggregate of
the Set Off Amount(s), not exceeding (Euro) 20m, to be apportioned
amongst the Vendors in accordance with schedule 9;
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"DISCLOSURE LETTER" means a letter of today's date in the agreed terms
together with the attachments thereto addressed by the Seller (on
behalf of the Vendors) to the Buyer;
"ENCUMBRANCE" means any mortgage, charge (fixed or floating), pledge,
lien, hypothecation, trust, right of set off or other third party
right or interest (legal or equitable) including any right of
pre-emption, assignment by way of security, reservation of title or
any other security interest of any kind however created or arising or
any other agreement or arrangement (including a sale and repurchase
arrangement) having similar effect;
"ENVIRONMENT" means all, or any, of the following media namely the air
(including without limitation the air within buildings and the air
within other natural man-made structures above or below ground),
surface water, ground water and land (wherever occurring) and any
living organisms or systems supported by those media;
"ENVIRONMENTAL LAWS" means all applicable national or local laws or
regulations arising through statutes, subordinate legislation and
common law or equivalent in the appropriate jurisdiction and any
relevant codes of practice or other similar guidance or advice to
which a competent authority for Environmental Matters is required by
law to have regard in so far as they relate to or apply to
Environmental Matters and are in force at the Completion Date;
"ENVIRONMENTAL ISSUES" means in relation to the activities of the
Target Group and/or the Properties each and every of the environmental
issues (whether known or unknown at or before Completion) set out
below and all damages, losses, liabilities, costs and expenses
(including without limitation fines, penalties, settlements,
judgments, awards, statutory or other legally enforceable
contributions), loss of profits and consequential losses associated
therewith:
(a) all matters governed by and liability (present, future or
contingent) under Environmental Laws including without limitation
any environmental prosecutions, regulatory proceedings and third
party claims for personal injury or property damage arising in
connection with Environmental Matters;
(b) all actions required pursuant to and associated with
Environmental Permits (whether current or future) or in order to
obtain, renew, modify, withdraw, amend or comply with any
Environmental Permit which may be required at or after Completion
in relation to the current or future operations of any member of
the Target Group;
(c) all issues associated with the operations and/or the state and
condition of plant, equipment and buildings which lead or are
likely to lead to contamination or pollution of the Environment
(including for the avoidance of doubt noise pollution) as may be
required at any of the Properties or in relation to any of the
activities of any member of the Target Group (whether under
Environmental Laws or health and safety laws, as part of
implementing ISO 14001 certification or as part of general
corporate practice relating to improvement of environmental
performance);
(d) all issues associated with the historic building at the Property
at Corvol including without limitation any requirement to rebuild
or repair the building and any disturbance or other interference
with the operations at the Property at Corvol;
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(e) all issues associated with on or off-site soil, water and
groundwater contamination and the presence, escape, dispersal,
release, storage or migration or emission of Hazardous Materials
and Waste (including without limitation any remediation,
abatement, treatment, investigation and monitoring associated
with such issues and related professional and consultancy fees
and any requirement under any planning or zoning consent or law
concerning such matters); and
(f) all issues referred to and matters and information in the Dames &
Xxxxx reports prepared for the Buyer and the Enviros Xxxxxxxxx
reports (Ref AS0080001A) and the Disclosure Letter to the extent
that they relate to Environmental Matters, and compliance with
Environmental Laws and Environmental Permits,
and for the purposes of this definition, all references to
Environmental Laws shall include those in force at, prior to or
brought into force after Completion and none of the above issues other
than those referred to in (c) above shall include workers in the
workplace and for the avoidance of doubt, Environmental Issues shall
not include claims by workers in relation to exposure to Hazardous
Materials, Waste or noise or radiation prior to Completion.
"ENVIRONMENTAL MATTERS" means:-
(a) the disposal, release, spillage, deposit, escape, discharge, leak
or emission of Hazardous Materials or Waste;
(b) the exposure of any person to harm or danger including by
Hazardous Materials or Waste;
(c) the creation of any noise, vibration, radiation, chemical
exposure, common law or statutory nuisance or other adverse
impact on the Environment save for impact on workers in the
workplace; and
(d) any other matters relating to the condition, protection,
maintenance, restoration or replacement of the Environment or any
part of it arising directly or indirectly out of the
manufacturing, processing, treatment, keeping, handling, use
(including as a building material), possession, supply, receipt,
sale, purchase, import, export, transportation or presence of
Hazardous Materials or Waste;
"ENVIRONMENTAL PERMIT" means any licenses, approval, authorisation,
permission, consent, waiver order or exemption issued or granted under
Environmental Laws;
"ESTIMATED CASH" has the meaning ascribed to it in clause 2.5;
"ESTIMATED CONSIDERATION" has the meaning ascribed to it in clause
2.5;
"ESTIMATED INTRA-GROUP DEBT" has the meaning ascribed to it in clause
2.5 (and which for the avoidance of doubt shall be reduced by the Set
Off Amount(s) (if any));
"ESTIMATED THIRD PARTY DEBT" has the meaning ascribed to it in clause
2.5;
"EXCLUDED PROPERTY" means the properties set out in part 2 of schedule
5 or any part or part thereof and "EXCLUDED PROPERTY" shall mean any
one of them;
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"FORMER PROPERTIES" means in relation to any member of the Target
Group any properties formerly owned, used or occupied for the purpose
of its business activities prior to Completion and not owned, used or
occupied at Completion;
"FRENCH TARGET GROUP" means Slic Corvol SA, Slic Gruchet SA and
Snappon SA and "FRENCH TARGET GROUP COMPANY" means any one of them;
"HAZARDOUS MATERIALS" means pollutants, contaminants and dangerous,
toxic or radioactive substances and any substance designated or
classified as such under any Environmental Laws, whether in fluid,
liquid, solid, gaseous or other form;
"INDEMNITIES" means all and any indemnities given by the Seller or any
member of the Seller's Group to the Buyer or any member of the Buyer's
Group under this agreement;
"INFORMATION MEMORANDUM" means the information memorandum on the
Target Group prepared by Lazard Brothers & Co., Limited dated June
2000;
"INTELLECTUAL PROPERTY ASSIGNMENTS" means the documents in agreed
terms governing the assignment of certain patents, registered designs
and trademarks;
"INTELLECTUAL PROPERTY" means patents, trade marks, design rights,
trade names, copyrights data base rights (whether registered or not
and any applications to register or rights to apply for registration
of any of the foregoing), rights in inventions, Know-How, trade
secrets and other confidential information, and all other intellectual
property rights of a similar or corresponding character in any part of
the world;
"INTELLECTUAL PROPERTY DEED" means the document in the agreed terms
governing the sale of the Business IP and the licensing of
Intellectual Property;
"INTRA-GROUP DEBT" means, as at the close of business on the
Completion Date, the aggregate of all debts owed by the Target Group
Companies, on the one hand, to any members of the Seller's Group, on
the other, less the aggregate of all debts owed by members of the
Seller's Group, on the one hand, to the Target Group Companies, on the
other, but in all cases excluding any such debts arising in the
ordinary course of trading;
"IT TRANSITIONAL SERVICES PROCUREMENT AGREEMENT" means the agreement
in the agreed terms between Draftex SA and the Buyer pursuant to which
Draftex SA agrees to provide or procure the provision of various
facilities services to certain members of the Target Group;
"KNOW-HOW" means confidential or proprietary industrial, technical or
commercial information and techniques in any form (including paper,
electronically stored data, magnetic media, files and microfilm)
including, without limitation, drawings, data relating to inventions,
formulae, test results, reports, research reports, project reports and
testing procedures, shop practices, instruction and training manuals,
market forecasts, specifications, quotations, lists and particulars of
customers and suppliers, marketing methods and procedures, show-how
and advertising copy;
"LONDON STOCK EXCHANGE" means the London Stock Exchange PLC;
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"MANAGEMENT ACCOUNTS" means the aggregated management schedules of the
Target Group for the period from 1 January 2000 to 30 September 2000
in the agreed terms;
"OWNERSHIP INTEREST TRANSFER AGREEMENT" means the agreement of
transfer of 100 per cent. of the ownership interests in the Czech
Company;
"PENSION SCHEMES" means the Draftex Inc. Retirement Savings Plan and
any pension promises made by Target Group Companies in Germany;
"PERMIT" means a permit, licence, consent, approval, certificate,
qualification, specification, registration and other authorisation and
a filing of a notification report or assessment necessary in any
jurisdiction for the proper and efficient operation of the Target
Group business, its ownership, possession, occupation or use of an
asset or the execution and performance of this agreement;
"PRC COMPANY" means Beijing Wanyuan - Draftex Sealing Products Company
Limited, a Target Group Company details of which are included in
schedule 1 and schedule 2;
"PROPERTIES" means the properties described in part 1 schedule 5 or
any part or parts thereof (excluding the Excluded Properties) and
"PROPERTY" shall mean any one of them;
"PURCHASE PRICE" shall be (Euro) 243,000,000;
"RELATED PERSON" means in relation to any party its holding companies
and the subsidiary companies from time to time of such holding
companies, all of them and each of them as the context admits;
"RELEVANT MEMBER" has the meaning ascribed to in clause 2.1;
"SELLER'S GROUP" means the Seller, its holding companies and its
subsidiary companies excluding the Target Group;
"SELLER'S SOLICITORS" means Ashurst Xxxxxx Xxxxx of Xxxxxxxxx Xxxxx, 0
Xxxxxx Xxxxxx, Xxxxxx XX0X 0XX;
"SENIOR EXECUTIVE" means any one of the persons listed in schedule 11
and the employees of the Target Group Companies whose employment may
be terminated on three months' notice or more;
"SET OFF AGREEMENT(S)" means the Set Off Agreement(s) in the agreed
terms reflecting the Set Off Amount(s);
"SET OFF AMOUNT(S)" means the lesser of the outstanding receivables
due from Draftex SA ("GROUP TRADE DEBTORS") to the French Target Group
Companies or the outstanding balance of receivable intra-group debt
due to Draftex SA ("DRAFTEX SA INTRA-GROUP DEBT") by the French Target
Group Companies not later than 5 Business Days prior to Completion;
"SUPPLY AGREEMENTS" means the agreements in the agreed terms relating
to the supply of car sealing components between Soratech SA and Slic
Gruchet SA; Soratech and Snappon
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SA; Xxxxxxx and Slic Gruchet SA, and the letter agreement between
Kaucuk Ve Plastik Xxxxxx Ve Ticaret SA (Draftex International -
Europlast, Turkey) and Slic Gruchet SA.
"TARGET GROUP" means the companies comprising the Draftex
International Car Body Seals Division which are listed in schedule 1
(particulars of which are set out in schedule 2) and "TARGET GROUP
COMPANY" shall mean any one of them;
"TAX" OR "TAX" all forms of taxation, duties, levies, imposts and
other similar impositions of any jurisdiction, whether central,
regional or local including (without limitation) taxes on profits,
revenues, turnover, sales, purchases, consumption, gains and income,
customs, import and export duties, stamp duty and other transaction or
documentary taxes, social security, state pensions contributions,
taxes arising through ownership or occupation of land or premises,
taxes levied by reference to ownership, wealth or the use of any
property or assets, payroll and employment taxes, taxes arising on the
sale, lease, hire, gift or other disposal of any real or personal
assets or property, on the change of the control of any company and on
the death of any person, and any payment made to any person as the
result of the operation of any enactment or other law relating to any
taxes and all penalties, fines charges and interest relating to any of
the foregoing or resulting from failure to comply with the provisions
of any legislation, enactment or other law relating to any of the
foregoing but does not include rates or water rates or the equivalent
in any jurisdiction outside the UK;
"TAXATION AUTHORITY" means any taxing or other authority (whether
within or outside the United Kingdom) competent or authorised to
impose any tax;
"TAX DEED" means a deed of indemnity in the agreed terms;
"THIRD PARTY DEBT" means, as at the close of business on the
Completion Date, the aggregate bank borrowings of each Target Group
Company plus all other indebtedness of the Target Group including,
without limitation, any outstanding borrowing or indebtedness in the
nature of borrowing (from any bank, credit institution or otherwise),
any indebtedness for moneys borrowed or raised under any acceptance
credit, bond, note, xxxx of exchange or commercial paper, trade bills
(other than those on terms normally obtained), forward sale or
purchase agreement or conditional sale agreement or other transaction
having the commercial effect of a borrowing, any finance leases
(including the finance lease of Slic Gruchet SA described in the
Disclosure Letter) and hire purchase agreements but excluding for the
avoidance of doubt any operating leases and operating hire purchase
agreements;
"THIRD PARTY SOFTWARE" bears the same meaning as in the IT
Transitional Services Procurement Agreement;
"TRANSACTION DOCUMENTS" means the documents so defined in clause
17(a);
"UK LISTING AUTHORITY" means the Financial Services Authority in its
capacity as the competent authority for the purposes of Part IV of the
Financial Services Xxx 0000;
"VAT" means value added tax or other equivalent tax paid under EEC
Directive 77/388 or any equivalent goods and services or sales tax in
any jurisdiction;
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"VAT LEGISLATION" means all enactments relating to VAT in any
jurisdiction and all regulations, orders, notices, provisions and
conditions made under those enactments;
"VENDOR" means the entity (if any) identified as the Vendor of the
relevant Acquisition Shares as set out in schedule 1 and "VENDORS"
means all of them;
"WARRANTIES" means the warranties set out in schedule 3; and
"WASTE" means any waste including anything which is abandoned,
unwanted or surplus irrespective of whether it is capable of being
recovered or has any value.
1.2 In this agreement unless otherwise specified, reference to:-
(a) a "HOLDING COMPANY" means a company which in relation to another
company (its "SUBSIDIARY COMPANY"):
(i) holds a majority of the voting rights in it; or
(ii) is a member of it and has the right to appoint or remove a
majority of its board of directors; or
(iii) is a member of it and controls alone, pursuant to an
agreement with other shareholders or members, a majority of
the voting rights in it or is a subsidiary of a company
which is itself a subsidiary of that other company;
(b) a document in the "AGREED TERMS" is a reference to that document
in the form approved and for the purposes of identification
signed by or on behalf of each party;
(c) "INCLUDES" and "INCLUDING" shall mean including without
limitation;
(d) a party means a party to this agreement and includes its
assignees (if any) and/or the successors in title to
substantially the whole of its undertaking and, in the case of an
individual, to his or her estate and personal representatives;
(e) a person includes any person, individual, company, firm,
corporation, government, state or agency of a state or any
undertaking (whether or not having separate legal personality and
irrespective of the jurisdiction in or under the law of which it
was incorporated or exists);
(f) a statute or statutory instrument or accounting standard or any
of their provisions is to be construed as a reference to that
statute or statutory instrument or accounting standard or such
provision as the same may have been amended or re-enacted before
the date of this agreement;
(g) "CLAUSES", "PARAGRAPHS" or "SCHEDULES" are to clauses and
paragraphs of and schedules to this agreement;
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(h) "WRITING" includes any methods of representing words in a legible
form (other than writing on an electronic or visual display
screen) or other writing in non-transitory form;
(i) words denoting the singular shall include the plural and vice
versa and words denoting any gender shall include all genders;
(j) any statute, statutory instrument, regulation, by-law or other
requirement of English law and to any English legal or other term
for any titles, action, remedy, method of judicial proceeding,
legal document, consent, permission, permit, rent review, legal
status, procedure, court, official or any legal concept or
doctrine or other expression shall in respect of any jurisdiction
other than England be deemed to include that which most nearly
approximates in that jurisdiction to the English term;
(k) the time of day is reference to time in London, England.
1.3 The schedules form part of the operative provisions of this agreement
and references to this agreement shall, unless the context otherwise
requires, include references to the schedules.
1.4 The index to and the headings and the descriptive notes in brackets
relating to provisions of taxation statutes in this agreement are for
information only and are to be ignored in construing the same.
2. SALE AND PURCHASE AND ADJUSTMENTS
2.1 Upon the terms and subject to the conditions of this agreement, the
Seller shall sell (or procure that the relevant Vendor shall sell)
with full title guarantee and the Buyer (or any member or members of
the Buyer's Group nominated by the Buyer (the "RELEVANT MEMBER"))
shall purchase the Acquisition Shares (and the entire issued share
capital of each of Draftex International European Technical Centre
GmbH and Draftex Verwaltungsgesellschaft mbH) with effect from
Completion free from any Encumbrance together with all benefits and
rights now or hereafter attaching thereto save in respect of any
dividends declared after the Accounts Date in respect of the those
shares.
2.2 Neither the Seller nor the Buyer shall be obliged to complete the sale
and purchase of the Acquisition Shares unless the sale and purchase of
all the Acquisition Shares, (and the entire issued share capital of
each of Draftex International European Technical Centre GmbH and
Draftex Verwaltungsgesellschaft) is completed before the close of
business on the Completion Date.
2.3 The Seller waives or agrees to procure the waiver of any rights or
restrictions conferred upon it or any other person which may exist in
relation to the Acquisition Shares under the articles of association
or other constitutional documents of the Target Group Companies or
otherwise.
2.4 The consideration for the sale of the Acquisition Shares by the Seller
(on behalf of the Vendors) shall be the Purchase Price (as adjusted
pursuant to the provisions of clauses 2 and 6) less an amount equal to
the sum of Intra-Group Debt and Third Party Debt but plus an amount
equal to the Cash (as determined following the operation of the
provisions of clause 6 below), and which shall be subject to
adjustment in accordance with the provisions of this
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clause 2 and apportioned between the Acquisition Shares in accordance
with schedule 9, (the "CONSIDERATION").
2.5 Not later than 5 Business Days prior to the date anticipated for
Completion, the Seller shall notify the Buyer in writing of its
estimate (acting reasonably, together with such evidence as it may
have in support of its calculation) of:-
(a) the Intra-Group Debt (the "ESTIMATED INTRA-GROUP DEBT");
(b) the Third Party Debt (the "ESTIMATED THIRD PARTY DEBT");
(c) the Cash (the "ESTIMATED CASH")
and the Purchase Price less an amount equal to the sum of Estimated
Intra-Group Debt and Estimated Third Party Debt but plus an amount
equal to the Estimated Cash shall be the "ESTIMATED CONSIDERATION" for
the purposes of this agreement.
2.6 In the event that the Consideration:-
(a) is less than the Estimated Consideration then the Seller (on
behalf of the Vendors) shall pay to the Buyer an amount equal to
such shortfall;
(b) exceeds the Estimated Consideration then the Buyer shall pay to
the Seller (on behalf of the Vendors) an amount equal to such
excess.
2.7 All and any adjustments to the Consideration for the Acquisition
Shares which relate to any differences between the Estimated
Intra-Group Debt and the Intra Group Debt shall be made as follows:
(a) in the event that the Intra-Group Debt is less than the Estimated
Intra-Group Debt, the Seller shall, as agent for the members of
the Seller's Group pay or, as the case may be repay (or procure
that the relevant member of the Seller's Group shall pay or, as
the case may be, repay) an amount equal to the amount of such
difference to the Buyer (on behalf of the Target Group Company);
or
(b) in the event that the Intra-Group Debt is greater than the
Estimated Intra-Group Debt, the Buyer shall (on behalf of the
relevant Target Group Company) pay or, as the case may be, repay
an amount equal to the amount of such difference to the Seller
(on behalf of the relevant member of the Seller's Group).
2.8 In the event that the Capital Employed (as determined pursuant to the
provisions of clause 6):-
(a) is less than the Agreed Capital Employed then the Seller (on
behalf of the relevant Vendor(s)) shall pay to the Buyer an
amount equal to such shortfall and the Purchase Price shall be
thereby reduced by such amount;
(b) exceeds the Agreed Capital Employed then the Buyer shall pay to
the Seller (on behalf of the relevant Vendor(s)) an amount equal
to such excess and the Purchase Price shall be thereby increased
by such amount.
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2.9 Following determination of the Capital Employed pursuant to the
provisions of clause 6, the Buyer shall provide for the transfer by
CHAPS of an amount in Euro equal to the Deferred Amount to the
Seller (on behalf of the relevant Vendors) to the bank account of
the Seller as detailed in clause 5.5(b).
2.10 Any and all sums payable pursuant to clauses 2.6, 2.7, 2.8 and 2.9
shall be paid (together with interest thereon calculated at the Agreed
Rate and on a daily basis in respect of the period from Completion to
the date of actual payment) by electronic transfer for receipt in
Euro, free of all costs, deductions and charges, to such account as
the Buyer or, as appropriate the Seller (on behalf of the relevant
Vendor(s)) shall nominate for this purpose within 5 Business Days of
the determination of the Intra-Group Debt, Third Party Debt , Cash
and/or Capital Employed in each case in accordance with clause 6, the
payment of such sums (before interest) to be treated as :-
(a) reducing the Consideration for the Acquisition Shares in the case
of payments by the Seller (on behalf of the relevant Vendor(s))
to the Buyer pursuant to clauses 2.6(a) and/or 2.8(a) only; and
(b) increasing the Consideration for the Acquisition Shares in the
case of payments by the Buyer to the Seller (on behalf of the
relevant Vendor(s)) pursuant to clauses 2.6(b) and/or 2.8(b)
only.
3. CONDITIONS
3.1 Completion is conditional upon the fulfilment of each of the
Conditions as follows:-
(a) the Seller obtaining all necessary shareholder approvals for the
sale of the Target Group;
(b) all filings having been made and all or any applicable waiting
and other time periods (including extensions thereto) under the
United States Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976 (as amended) and the regulations thereunder having expired,
lapsed or been terminated as appropriate in respect of the
purchase of the Acquisition Shares by the Buyer;
(c) the Buyer having received written confirmation from the German
Cartel Office that the purchase of the Acquisition Shares does
not constitute a concentration requiring to be notified to such
office or that, requiring to be so notified, the German Cartel
Office has decided not to oppose it.
3.2 The Buyer may by notice in writing to the Seller waive any of the
Conditions contained in paragraphs (b) and (c) of clause 3.1 in whole
or in part.
3.3 The Seller undertakes to, and will procure that each Vendor will (if
applicable), use all reasonable endeavours to procure the fulfilment
of the Conditions set out in paragraphs (a) and (b) of clause 3.1 and
the Buyer undertakes to use all reasonable endeavours to procure the
fulfilment of the Conditions set out in paragraphs (b) and (c) of
clause 3.1;
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3.4 If all of the Conditions (save for those compliance with which has
been waived in accordance with the terms of this agreement) have not
been fulfilled on or before the date three months from the date of
this agreement, this agreement will terminate with effect from that
date (the "LONG STOP DATE").
3.5 The Seller shall keep the Buyer advised of the progress towards the
satisfaction of its obligations under clause 3.3 and disclose matters
of which it becomes aware which will or may prevent any of the
Conditions from being satisfied (and vice versa).
3.6 If this agreement terminates in accordance with clause 3.4 then the
obligations of the parties shall automatically terminate save that the
rights and liabilities of the parties which have accrued prior to
termination shall continue to subsist including those under clauses
16, 17 and 21 to 27 (inclusive).
4. PERIOD TO COMPLETION
4.1 The Seller shall, in addition to and without limiting its obligation
under clause 4.2, procure that from the date of this agreement until
Completion:
(a) the business of the Target Group Companies is carried on in the
usual and normal course;
(b) the Target Group Companies take all reasonable steps to preserve
the goodwill of their respective businesses and continue to deal
with the same in the ordinary course of business and shall do
nothing which will or would be likely to injure such goodwill;
and
(c) none of the Target Group Companies shall enter into any contract
or commitment or do anything which, in any such case, is either
out of the ordinary and usual course of its business or of a
material nature in the context of the Target Group taken as a
whole without the prior consent in writing of the Buyer. In
particular, but without limiting the foregoing, the Seller shall
procure that from the date of this agreement until Completion,
save with the prior consent in writing of the Buyer (such consent
not to be unreasonably withheld), none of the Target Group
Companies shall:
(i) make any alteration to its memorandum or articles of
association or any other document or agreement
establishing, evidencing or relating to its constitution;
or
(ii) alter the nature or scope of its business or operations in
any material respect; or
(iii) manage its business otherwise than in accordance with its
business and trading policies and practice currently
carried on, except as may be necessary to comply with any
legislative changes; or
(iv) enter into any agreement or arrangement or permit any
action whereby another company becomes its subsidiary or
subsidiary undertaking; or
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16
(v) enter into any transaction other than on arms' length terms
and for full and proper consideration; or
(vi) acquire (whether by one transaction or by a series of
transactions) the whole or a substantial or material part
of the business, undertaking or assets of any other person;
or
(vii) dispose of (whether by one transaction or by a series of
transaction and whether or not in the ordinary course of
business) the whole or any substantial or material part of
its business, undertaking or (except in the ordinary course
of business) any other of its assets (save as disclosed in
the Disclosure Letter); or
(viii) incur or agree to incur any capital expenditure in excess
of (Euro) 100,000 (other than capital expenditure committed
and/or forecast as set out in the Disclosure Letter); or
(ix) other than in the ordinary course of business and/or
pursuant to existing funding arrangements take any loans,
borrowings or other form of funding or financial facility
or assistance, or enter into any foreign exchange
contracts, interest rate swaps, collars, guarantees or
agreements or other interest rate instruments or any
contracts or arrangements relating to derivatives or
differences, or in respect of which the financial outcome
is to any extent dependent upon future movements in an
index or rate of currency exchange or interest, or in the
price of any securities or commodities ; or
(x) grant any loans or other financial facilities or assistance
to or any guarantees or indemnities for the benefit of any
person or create or allow to subsist any mortgage, charge
or other Encumbrance over the whole or any part of its
undertaking, property or assets (other than any disclosed
in the Disclosure Letter or pursuant to an extension of the
time period allowed for payment by creditors in respect of
sums due in the normal course of business); or
(xi) enter into any joint venture, partnership or agreement or
arrangement for the sharing of profits or assets outside
the ordinary course of business currently carried on; or
(xii) enter into any new death, retirement, profit sharing,
bonus, share option, share incentive or other scheme for
the benefit of any of its officers or employees or make any
variation (including, but without limitation, any increase
in the rates of contribution) to any such existing scheme
or effect any key man insurance (but allowing new members
to be added to any existing schemes); or
(xiii) commence, compromise or discontinue any legal or
arbitration proceedings having a value of more than
(Euro) 150,000 (other than routine debt collection and/or
as set out in the Disclosure Letter); or
(xiv) prematurely repay or prepay any loan, borrowings or other
financial facilities or assistance made available to it
having a value of more than (Euro) 200,000 (other than as
set out in the Disclosure Letter); or
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(xv) terminate the employment or office of any of its
directors, officers, consultants or Senior Executives or
appoint any new director, officer or senior employee or
consultant or materially alter the terms of employment or
engagement of any director, senior employee or consultant
with a salary of (Euro) 150,000 or more (other than as
set out in the Disclosure Letter); or
(xvi) declare, make or pay any dividend or distribution (whether
of capital or of profits) other than as set out in the
Disclosure Letter; or
(xvii) make or permit any material amendment, variation,
deletion, addition, renewal or extension to or of, or
terminate or give any notice or intimation of termination
of, any material contract or arrangement or breach or fail
to comply with the terms of any contract or arrangement
which is material in the context of the Target Group taken
as a whole; or
(xviii) (other than in the course of conducting the business as
currently operated) pay any remuneration, fee or other sum
to any Vendor, any person connected with or controlled by
any of the Vendors (other than remuneration properly
accrued due or reimbursement of business expenses properly
incurred, in each case as disclosed in the Disclosure
Letter or of a value of (Euro) 150,000 or less, or as
disclosed in the Disclosure Letter); or
(xix) enter into any agreement relating to or create any
encumbrance or third party rights over any of the
Properties or any rights appurtenant to any of them; or
(xx) grant any right, title or interest in or to the Business
IP; or
(xxi) maintain and pay all renewal fees in respect of any
registered business IP; or
(xxii) enter into any agreement or obligation to do anything
prohibited by clauses 4.1(c)(i) to 4.1(c)(xxi) inclusive.
4.2 From the date of this agreement the Buyer may nominate senior
executives (identified by name and agreed by the Seller, such
agreement not to be unreasonably withheld or delayed) to be permitted
access, upon reasonable notice, to Senior Executives who will consider
reasonable requests for access by the approved nominated senior
executives to the personnel, premises, books and records of the Target
Group (including, without prejudice to the generality of the
foregoing, to Business IP and information technology information,
books and records) and the Seller shall supply or procure the supply
of information reasonably required by the Buyer relating to the Target
Group provided that the Purchaser shall give reasonable notice of any
such required access and information and shall provide such
confidentiality undertakings as the Seller shall reasonably require.
4.3 For the avoidance of doubt none of the parties shall subject to clause
4.4 have any right to rescind or terminate this agreement or any other
Transaction Document for breach of contract (save in respect of any
right to rescind in respect of fraudulent statements or fraudulent
concealment made by, or carried out by, any of the parties or their
Related Persons).
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4.4 If the Seller is in material breach of any of the Warranties (or would
be if they were to be repeated at Completion) or of any obligation in
clause 4.1 and such a breach would have a material adverse effect on
the value of the business of the Target Group taken as a whole, which
in any such case is incapable of remedy or, if capable of remedy, is
not remedied by the Seller by the Completion Date or (if earlier)
within seven days after notice thereof from the Buyer requiring the
same to be remedied then in any such case only the sole remedy of the
Buyer shall be to elect by notice in writing to the Seller not to
complete the purchase of the Acquisition Shares and this agreement
shall automatically terminate save that the rights and liabilities of
the parties under clauses 12, 13 and 17 to 23 (inclusive) only shall
continue to subsist.
4.5 The Seller and the Buyer hereby undertake to use their respective best
endeavours to comply with all applicable employee representative body
consultation processes as are required by French law in relation to
those Target Group Companies which are incorporated in France (the
"FRENCH COMPANIES") and the Seller and the Buyer shall work together
with a view to ensuring that all requisite information is provided to,
and that all necessary meetings are held with, the Works Council of
each of the French Companies (the "WORKS COUNCILS") to enable each of
the Works Councils to express their opinions (the "WORKS COUNCILS
OPINIONS") on this transaction insofar as it affects the French
Companies as required by French law as soon as practicable after the
date hereof.
4.6 The Seller shall procure that each of the Vendors as soon as
reasonably practicable discloses in writing to the Buyer any matter or
thing which becomes known to the each of the Vendors up to the date
hereof and before Completion which is inconsistent with any of the
Warranties in any material respect or which would make any of them
inaccurate or misleading in any material respect if they were given at
any and all times from the date hereof down to Completion.
4.7 The Buyer undertakes to co-operate with the reasonable requests of the
Seller or any member of the Seller's Group in connection with the
relevant employee consultation process required as a result of this
agreement, including the provision of information to any relevant work
council or employee representative body.
4.8
(a) To the extent that the Excluded Properties are sold by the
relevant Target Group Company between the date hereof and the
Completion Date the net proceeds of any such sale (after allowing
for deduction of all applicable taxes and costs incurred in
connection with the sale(s)) will be paid to the Seller's Group
to the bank account set out in clause 5.5(b) (on behalf of the
relevant Vendor) and the Buyer hereby confirms it has no right to
any such sale proceeds and that the Seller or any member of the
Seller's Group may take such reasonable action as it wishes in
respect of the sale of the Excluded Properties between the date
hereof and Completion, so long as such action does not (other
than by imposing an obligation to transfer the relevant Excluded
Property) result in the relevant Target Group Company having any
liability or obligations beyond this which exist as at the date
hereof.
(b) If the Excluded Properties have not been sold by the Completion
Date then the Buyer hereby agrees to procure the appointment of
the Seller (or any member of the Seller's Group chosen by the
Seller) as the agent of the relevant Target Group Company to
procure the sale of the Excluded Properties on such terms as the
Seller (or any
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member of the Seller's Group) shall obtain, and on the basis that
the net proceeds of any such sale(s) (after allowing for
deduction of all applicable taxes and costs incurred in
connection with the sale(s)) shall be paid to the Seller (on
behalf of the relevant Vendor(s)) as an adjustment to the
Consideration. The Buyer hereby agrees to procure that the Seller
(or any member of the Seller's Group) is given reasonable access
to the Excluded Properties and to the management of the Target
Group Company in order to facilitate the sale(s) and to procure
that the Target Group Company (and its members and/or directors
and officers) will sign such documentation and take such action
as is reasonably required by the Seller (or any member of the
Seller's Group) in order to sell the Excluded Properties.
(c) Subject to paragraphs 2(c), 2.2, 2.3 and 2.4 of schedule 4 the
Seller hereby agrees to indemnify and hold harmless the Buyer and
each relevant Target Group Company (and any member of the Buyer's
Group) against any and all costs (including without limitation,
legal costs, and registration or administration costs or fees)
liabilities, losses, expenses, taxes, outgoings and claims of any
nature incurred by it or its duly authorised agent which for the
avoidance of doubt shall include any of the foregoing resulting
from Environmental Matters arising out of the Excluded Properties
and/or the Former Properties or relating to them or the sale or
disposal save both in respect of any such costs, liabilities,
losses and expenses which arise as a result of a negligent act or
omission by the Buyer in its operation and/or occupation of the
Excluded Properties following Completion or in respect of the
costs incurred by the Buyer's Group in operating the Excluded
Properties during the ordinary course of business following
Completion, (it being agreed nonetheless for the avoidance of
doubt, that neither the Buyer nor any relevant Target Group
Company shall have any obligation to continue to occupy, operate
from, manage or to do any other things in relation to any
Excluded Property).
4.9 The Buyer acknowledges that the Purchase Price fully takes into
account a price reduction in relation to any and all Environmental
Issues and accordingly waives on behalf of itself and the Buyer's
Group and any member of the Target Group any and all rights against
the Seller and any member of the Seller's Group under this agreement
(including for the avoidance of doubt under any of the Warranties) or
otherwise in respect of Environmental Issues save that for the
avoidance of doubt nothing shall hereby preclude the Buyer from
claiming under clause 4.8(c).
4.10 The Seller agrees to use its best endeavours to procure that on or
before the date five Business Days prior to Completion to the maximum
extent possible members of the Seller's Group enter into the Set Off
Agreements.
4.11 The Buyer hereby undertakes and warrants that each member of the
French Target Group shall remain solvent for a period of at least
eighteen (18) months following the Completion Date and the Buyer
agrees to indemnify and keep indemnified the Seller and any member of
the Seller's Group against any repayment of the Set Off Amount(s)
(together with all and any costs incurred in connection with any
repayment) which the Seller or any member of the Seller's Group may be
required to make by operation of law upon the insolvency or
liquidation of the relevant member of the French Target Group within
eighteen months of the Completion Date.
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4.12 Following Completion, in the event that the Buyer requests the Seller
to claim under any relevant insurance policy of the Seller's Group
which provided cover in respect of the matter forming the subject
matter of such claim for the period up to Completion, then the Seller
shall use all reasonable endeavours to pursue such claim in full
against the relevant policy and upon receipt of any payment from its
insurers to forthwith pay the amount of such payment (less all
reasonable costs and expenses incurred in making such claim) to the
Buyer.
4.13 The parties hereby acknowledge that the terms of the Set Off
Agreements provide that Draftex SA is and will be the owner of the
Snappon Receivables, Slic Corvol Receivables and Slic Gruchet
Receivables as defined in the Set Off Agreements (the "French Target
Group Receivables") up to a total amount equivalent to the Set Off
Amounts.
In the event that any of the French Target Group Receivables have not
been received by Draftex SA by the due date for payment thereof in
accordance with past practices (such amount being hereinafter referred
to as the "Unpaid Receivable") then the Buyer shall or shall procure
that on a weekly basis the relevant French Target Group Company shall
forthwith purchase the Unpaid Receivable from Draftex SA and pay
Draftex SA in cash the full amount of the Unpaid Receivable and if,
following any such payment, Draftex SA shall subsequently receive
payment of any Unpaid Receivable from any customer then the Seller
shall procure Draftex SA to forthwith pay such amount to the relevant
French Target Group Company.
5. COMPLETION
5.1 Completion shall take place at the offices of the Buyer's Solicitors:
(a) on a date to be mutually agreed by the Seller and the Buyer; and
(b) failing such agreement on the date of the Target Group's
accounting period end date immediately following the date when
the Works Councils Opinions (as defined in clause 4.5) have been
expressed (or the parties have agreed (each acting reasonably)
that all information reasonably necessary to allow the Works
Councils to give the Works Councils Opinions has been provided
and the Works Councils have been given all reasonable opportunity
to give their opinions) and all of the Conditions shall have been
fulfilled or waived (the "SATISFACTION DATE") (provided that
there are at least three clear Business Days between the
Satisfaction Date and the date of the Target Group's accounting
period end date).
5.2 On Completion the Seller shall deliver to, or procure the delivery by
the relevant Vendor, or, if the Buyer shall so agree, make available
to the Buyer:-
(a) transfers in common form relating to all the Acquisition Shares
duly executed by the registered holders thereof in favour of the
Buyer (or as it may direct) and
(i) the written resolutions of the sole participants of the
Czech Company authorising the transfer of 100% of the
ownership interests therein to the Buyer duly executed
before a Czech notary public;
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(ii) the Ownership Interest Transfer Agreement, duly executed
before a Czech notary public by or on behalf of the sole
participants of the Czech Company; and
(iii) a deed duly executed by Draftex Industries Limited and
Draftex Industries No. 1 Limited before a notary pursuant
to which Draftex Industries Limited and Draftex Industries
No. 1 Limited irrevocably transfer their entire
shareholding in Draftex Beteiligungsgesellschaft mbH to a
member of the Buyer's Group nominated by the Buyer and a
unanimous resolution of the shareholders' meeting of
Draftex Beteiligungsgesellschaft mbH authorising the
transfer of the shares to the member of the Buyer's Group
nominated by the Buyer; and
in relation to the Acquisition Shares of the French Target Group,
only:
(iv) original share transfer forms (ordres de mouvement) of the
French Target Group Company dated as of the Completion Date
and duly signed by the registered owners thereof in favour
of the Buyer or as the latter may direct;
(v) share transfer registers and shareholders' accounts for
each French Target Group Company (written up to but not
including Completion), showing the Vendor as the owner of
all of each French Target Group Company's shares and
containing no indication of the existence of any
Encumbrances over or in respect of any of the French Target
Group Company's Shares;
(vi) records of proceedings of the board of directors of each of
the French Target Group Companies and the minutes of
general meetings of each of the French Target Group
Companies, together with the attendance registers for
meetings of the board of directors and the attendance
sheets for the general meetings of the shareholders of each
such company as are in the possession of the French Target
Group Companies;
(vii) resignations in agreed terms from each of the members of
the board of the French Target Group Company retiring from
office with effect from Completion and confirming that they
have no claim against the French Target Group Company for
compensation; and
(viii) resolutions of a general meeting of the shareholders of
each French Target Group Company appointing such persons as
the Buyer shall nominate as members of the board of the
French Target Group Company and copies of certified as true
and complete minutes of such general meetings by the
chairman of the meeting; and
(ix) (if applicable) provide a certified copy of the minutes of
the EGM held by Snappon SA to adopt new Articles to permit
the free transfer of any Snappon Director's shares in
Snappon SA.
(b) share certificates relating to the Acquisition Shares;
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(c) any waivers or consents by members of any Target Group Company or
other persons which the Buyer has specified prior to Completion
in the agreed terms so as to enable the Buyer or its nominees to
be registered as the holders of the Acquisition Shares;
(d) resignations duly executed as deeds of such of the directors and
the secretary of any Target Group Company as the Buyer shall
request in writing from their offices as director or secretary of
any Target Group Company containing a confirmation that they have
no claims (whether statutory, contractual or otherwise) against
any Target Group Company for compensation for loss of office
together with delivery to the Buyer of all property of any Target
Group Company in their possession or under their control;
(e) the written resignations of the auditors of each Target Group
Company;
(f) the common seals, certificates of incorporation and statutory
books, share certificate books and cheque books of each Target
Group Company;
(g) the Tax Deed duly executed by the Seller; and
(h) counterparts of each of the required Intellectual Property
Assignments duly executed by the relevant assignor in each
instance;
(i) a counterpart of the Intellectual Property Deed duly executed by
the Seller;
(j) a counterpart of the IT Transitional Services Procurement
Agreement duly executed by Draftex S.A;
(k) counterparts of the Supply Agreements duly executed by the
relevant member of the Seller's Group;
(l) powers of attorney in the customary form for each relevant
jurisdiction;
(m) a deed duly executed before a German notary pursuant to which
Xxxxxx Xxxxxxx irrevocably transfers his entire shareholding in
Draftex Verwaltungs GmbH to Draftex Beiteilligungsgesellschaft
mbH and a unanimous resolution of the shareholders' meeting of
Draftex Verwaltungsgesellschaft mbH authorising the transfer of
the shares to a member of the Buyer's Group nominated by the
Buyer;
(n) a deed duly executed before a notary pursuant to which Xxxxxx
Xxxxxxx irrevocably transfers his entire shareholding in Draftex
International European Technical Centre GmbH to a member of the
Buyer's Group nominated by the Buyer and a unanimous resolution
of the shareholders' meeting of Draftex International European
Technical Centre GmbH authorising the transfer of the shares to a
member of the Buyer's Group nominated by the Buyer; and
(o) licences with respect to the Third Party Software and the Atos
Software (provided however that the Seller does not undertake to
procure the delivery of or make available to the Buyer a licence
in the terms of clause 2.3 of the IT Transitional Services
Procurement Agreement for any Atos Software which is not software
owned by the Seller or the Seller's Group).
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5.3 At or prior to Completion (and prior to the taking effect of the
resignations of the directors referred to in clause 5.2(d) above) the
Seller shall procure the passing of board resolutions (and/or passing
of shareholder resolutions where relevant) of each relevant Target
Group Company (where appropriate) under relevant local laws :-
(a) sanctioning for registration (subject where necessary to due
stamping) the transfers in respect of the Acquisition Shares and
any shares to which clause 5.2 refers;
(b) authorising the delivery to the Buyer of share certificates in
respect of the Acquisition Shares;
(c) appointing such persons as are nominated by the Buyer to be the
directors and secretary of each Target Group Company (if
applicable);
(d) tendering and accepting the resignations and acknowledgements of
the directors and secretary referred to in clause 5.2(d);
(e) tendering and accepting the resignation of the auditors and
appointing auditors nominated by the Buyer as new auditors of
each of the Target Group Companies.
5.4 As soon as practicable following Completion (and in any event within 3
months of Completion), the Seller shall procure the passing of board
resolutions and special resolutions of any member of the Seller's
Group which bear or include the name "Draftex" in their corporate
name, changing their corporate name so that it does not include or
bear the "Draftex" name.
5.5 Upon compliance by the Seller with the provisions of clauses 5.2, and
5.3 the Buyer shall:-
(a) In relation to the Czech Company
(i) deliver to the Seller the counterparts of the Ownership
Interest Transfer Agreement, duly executed by or on behalf
of the Buyer before a notary public;
(ii) deliver to the Seller the written resolutions of the Buyer
as the new sole participant in the Czech Company resolving
(a) to remove the current executives and replace them with
new executives and (b) in notarial deed form amending the
current Czech Company Memoranda of Association to change the
name of the Czech Company removing "Draftex" therefrom; and
(iii) deliver petitions to the relevant Czech court reflecting
the transfer of the ownership interests in the Czech Company
duly signed on behalf of the Czech Company.
(b) provide for the transfer by CHAPS of an amount in Euro equal
to the Estimated Consideration less the Deferred Amount to the
Seller's Account (the Seller receiving such transfer as agent
for the Vendors) at HSBC Bank plc, of 00-00 Xxxxxxx,
Xxxxxx XX0X 0XX, Sort Code 40-05-15, Account No. 00000000;
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(c) in respect of Intra-Group Debt provide on behalf of the relevant
member(s) of the Target Group for the transfer by CHAPS of an
amount in Euro equal to the Estimated Intra-Group Debt to the
Seller's Account (the Seller receiving such transfer on behalf
the relevant member of the Seller's Group) at HSBC Bank plc, of
00-00 Xxxxxxx, Xxxxxx XX0X 0XX, Sort Code 40-05-15, Account No.
00000000;
(d) deliver to the Seller a counterpart of the Tax Deed duly executed
by the Buyer;
(e) deliver to the Seller a counterpart of the Intellectual Property
Deed duly executed by the Buyer;
(f) a counterpart of the IT Transitional Services Procurement
Agreement duly executed by the Buyer; and
(g) counterparts of the Supply Agreements duly executed by the
relevant member of the Target Group.
5.6 The Seller acknowledges that, immediately following Completion until
such time as the transfer(s) of the Acquisition Shares (and the
transfers of the entire issued share capital of each of Draftex
International European Technical Centre GmbH and Draftex
Verwaltungsgesellschaft mbH) have been registered in the register of
members of the relevant Target Group Company, the Seller or a member
of the Seller's Group will hold those Acquisition Shares (and those
shares in the share capital of each of Draftex International European
Technical Centre GmbH and Draftex Verwaltungsgesellschaft mbH)
registered in its name on trust for and as nominee for the Buyer or
its nominees and undertakes to hold all dividends and distributions
and exercise all voting rights available in respect of those shares in
accordance with the directions of the Buyer or its nominees and if the
Seller is in breach of the undertakings contained in this clause the
Seller irrevocably authorises the Buyer to appoint some person or
persons as its attorney to execute all instruments or proxies
(including consents to short notice) or other documents which the
Buyer or its nominees may reasonably require and which may be
necessary to enable the Buyer or its nominees to attend and vote at
general meetings of the relevant Target Group Company and to do any
thing or things necessary to give effect to the rights contained in
this clause.
5.7 At or prior to Completion, the Seller shall procure that all Tax
sharing agreements and arrangements to which a Target Group Company is
party shall be terminated or, to the extent not so terminated, that
the relevant Target Group Company (or Companies as the case may be)
shall with effect from Completion cease to be party to and/or liable
in respect of any such agreements or arrangements.
5.8 Notwithstanding any other provision of this clause 5:
(a) if the Seller is unable to deliver to the Buyer on the Completion
Date any immaterial item (as reasonably determined by the Buyer)
required to be delivered to the terms of this clause 5, then at
the Buyer's option: (1) the parties can proceed to Completion
against the provision of appropriate assurances and/or
undertakings in a form reasonably satisfactory to the Buyer; or
(2) Completion shall be deferred to a date not more than 15
Business Days after the Completion Date (and so that the
provisions of this clause 5.8, apart from this clause 5.8(a),
shall apply to Completion as so
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deferred) by means of a notice to that effect in writing served
by the Buyer on the Seller;
(b) if the Buyer is unable to deliver to the Seller on the Completion
Date any immaterial item (as reasonably determined by the Seller)
required to be delivered to the terms of this clause 5, then at
the Seller's option: (1) the parties can proceed to Completion
against the provision of appropriate assurances and/or
undertakings in a form reasonably satisfactory to the Seller; or
(2) Completion shall be deferred to a date not more than 15
Business Days after the Completion Date (and so that the
provisions of this clause 5.8, apart from this clause 5.8(b),
shall apply to Completion as so deferred) by means of a notice to
that effect in writing served by the Seller on the Buyer.
5.9 If Completion has not occurred by the Long Stop Date, this agreement
shall automatically terminate save that the rights and liabilities of
the parties under clauses 12, 13 and 17 to 23 (inclusive) only shall
continue to subsist.
6. CAPITAL EMPLOYED AND COMPLETION ACCOUNTS
6.1 The Buyer and the Seller shall use all reasonable endeavours to
procure that, promptly after Completion, Completion Accounts together
with the statement (the "STATEMENT") of the Capital Employed, Cash,
Intra-Group Debt and Third Party Debt as at Completion, are prepared
in accordance with the provisions of this clause 6. The Completion
Accounts shall be prepared on the basis of the Accounting Policies and
procedures set out in schedule 8.
6.2 The Buyer shall:-
(a) as soon as practicable, and in any event within 30 Business Days
after Completion, procure that each of the Target Group Companies
undertakes a stocktake and valuation of its stock as at the
Completion Date. The Seller shall be entitled to have its
representative present at each stocktake and valuation; and
(b) arrange for the Completion Accounts and the Statement to be
prepared by the Buyer in conjunction with each Target Group
Company with a view to such draft Completion Accounts and
Statement being delivered to the Seller within 45 Business Days
of Completion.
6.3 The Seller shall notify the Buyer within 30 Business Days of receipt
of such draft Completion Accounts and the Statement whether or not it
accepts them for the purposes of this agreement.
6.4 If the Seller notifies the Buyer that it does not accept such draft
Completion Accounts and the Statement:-
(a) it shall, at the same time, set out in a notice in writing its
reasons for such non-acceptance and specify the adjustments
which, in its opinion, should be made to the draft Completion
Accounts and the Statement in order to comply with the
requirements of this agreement and deliver a copy of such notice
to the Buyer; and
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(b) the parties shall use all reasonable endeavours to meet and
discuss the objections of the Seller and to reach agreement upon
the adjustments (if any) required to be made to the draft
Completion Accounts and the Statement within 30 Business Days of
delivery of the notice referred to in (a) above. In the event
that agreement on some (or all) of the adjustments cannot be
reached, the parties shall produce within a further period of 10
Business Days, a list of disputed items (the "MATTERS IN
DISPUTE") which for the avoidance of doubt shall be limited to
items which were notified to the Seller under clause 6.4(a).
6.5 If the Seller is satisfied with the draft Completion Accounts and the
Statement (either as originally submitted or after adjustments agreed
between the Seller and the Buyer) or if the Seller fails to notify the
Buyer of its non-acceptance of the draft Completion Accounts and the
Statement giving reasons for such non-acceptance within the 30
Business Day period referred to in clause 6.3, then the draft
Completion Accounts and the Statement (incorporating any agreed
adjustments) shall constitute the Final Completion Accounts and the
Statement for the purposes of this agreement which shall be final and
binding on the parties.
6.6 If the Seller and the Buyer do not reach agreement within 30 Business
Days of the Seller's notice of non-acceptance pursuant to clause 6.4
then the Matters in Dispute and only those shall be referred, on the
application of either party, for determination by an appropriately
qualified partner of KPMG or, if KPMG is unable or unwilling to act,
by an appropriately qualified partner at an internationally recognised
firm of chartered accountants to be agreed upon by the Seller and the
Buyer or, failing agreement, to be selected, on the application of
either party, by the President for the time being of the Institute of
Chartered Accountants in England and Wales or his duly appointed
deputy (the "INDEPENDENT ACCOUNTANT"). The Seller and the Buyer shall
use all reasonable endeavours to agree with the Independent Accountant
the precise terms of reference to apply to his role hereunder within
10 Business Days of his appointment. The following provisions shall
apply to the Independent Accountant's role in any event:-
(a) the Buyer and/or the Buyer's accountants and the Seller and/or
the Seller's accountants shall each promptly prepare a written
statement setting out their respective positions on the Matters
in Dispute ("OPENING SUBMISSIONS") and shall, within 15 Business
Days of the appointment of the Independent Accountant, submit to
him their respective Opening Submissions (together with any
necessary and relevant supporting documentation). At the same
time, the Buyer and the Seller (or their respective accountants)
shall deliver to the other party (for their respective
accountants) a copy of their Opening Submissions and supporting
documentation, in the same form as that submitted to the
Independent Accountant;
(b) within 30 Business Days following the completion of (a) above,
the Seller and the Buyer shall each be entitled to comment in
writing upon the Opening Submissions and documentation submitted
by the other party ("SUBMISSIONS IN REPLY"). Such Submissions in
Reply should be addressed and delivered to the Independent
Accountant, with a copy being simultaneously delivered to the
other party or its accountants;
(c) in giving his determination, which the Independent Accountant
shall use his best endeavours to deliver simultaneously to each
of the parties not later than 30 Business
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Days after submission to him of the Submissions in Reply referred
to above, the Independent Accountant shall state in writing what
adjustments (if any) are necessary to be made to the draft
Completion Accounts and the Statement in respect of the Matters
in Dispute in order to comply with the requirements of this
agreement and to determine finally the Completion Accounts and
the Statement;
(d) the Independent Accountant shall act as an expert (and not as an
arbitrator) in making any such determination, which shall be
final and binding on the parties (in the absence of manifest
error);
(e) the Seller and the Buyer expressly waive, to the extent permitted
by law, any rights of recourse to the courts they may otherwise
have to challenge the Independent Accountant's determination
hereunder;
(f) although each party shall initially bear the costs and expenses
of all counsel and other advisers, witnesses and employees
retained by it, as well as 50% of any interim invoices rendered
by the Independent Accountant, ultimate liability for all such
costs and expenses shall be apportioned between the Buyer and the
Seller at the absolute discretion of the Independent Accountant
who will, when determining this issue, have regard to the outcome
of his determination and the manner in which the parties have
conducted themselves and co-operated with the provisions of this
clause 6. If, for any reason, the Independent Accountant fails to
make a determination on this issue, the costs and expenses of the
Independent Accountant shall be borne equally as between the
Seller and the Buyer and each of the Seller and the Buyer shall
bear its own costs and expenses incurred hereunder.
6.7 When the Seller and the Buyer reach (or pursuant to clause 6.6 are
deemed to reach) agreement on the Completion Accounts and the
Statement or when the Completion Accounts and the Statement are
finally determined at any stage in accordance with the procedures set
out in this clause 6:-
(a) the Completion Accounts and the Statement as so agreed or
determined shall be the Completion Accounts and the Statement for
the purposes of this agreement and shall be final and binding on
the parties; and
(b) the Capital Employed and the Cash, Intra-Group Debt and Third
Party Debt as at the Completion Date shall be as set out in the
Statement.
6.8 Subject to any rule of law or any regulatory body or any provision of
any contract or arrangement entered into prior to the date of this
agreement to the contrary, the Buyer shall procure that the Target
Group shall, promptly provide the Seller, its advisers, and the
Independent Accountant and the Seller's accountants with all
information (in their respective possession or control) relating to
the operations of the Target Group, as the case may be, including
access at all reasonable times on Business Days to all Target Group
employees, books and records, and all co-operation and assistance, as
may in any such case be reasonably necessary to:-
(a) enable the production of the Completion Accounts and the
Statement; and
(b) enable the Independent Accountant to determine the Completion
Accounts and the Statement.
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The Buyer hereby authorises the Seller's respective advisers and the
Independent Accountant (and those members of his firm assisting with
his determination) to take copies of all information which it has
agreed to procure to provide under this clause 6.8.
6.9 The Buyer shall not be entitled to set off against any consideration
otherwise due to the Seller pursuant to this agreement the amount of
any claims made under this agreement save in accordance with this
clause 6.
7. RELEASE
7.1 The Seller shall procure following Completion that each Target Group
Company (and for the avoidance of doubt, the whole of its Properties
and assets and undertakings) is released in the agreed terms from any
guarantee, indemnity, bond, letter of comfort or Encumbrance or other
similar obligation given or incurred by it which relates in whole or
in part to debts or other liabilities or obligations, whether actual
or contingent, of any member of the Seller's Group and shall produce
evidence of such release following Completion in the form acceptable
to the Buyer acting reasonably. Prior to such release the Seller shall
keep each member of the Buyer's Group indemnified against any and all
liabilities arising under any such guarantee, indemnity, bond letter
of comfort, Encumbrance or other similar obligation.
7.2 Following Completion the Buyer shall use its best endeavours to
procure that each member of the Seller's Group (and for the avoidance
of doubt, the whole of its Properties and assets and undertakings) is
released from any guarantee, indemnity, bond, letter of comfort or
Encumbrance or other similar obligation given by it or incurred by it
which relates in whole or in parts to debts or other liabilities or
obligations, whether actual or contingent, of any member of the Target
Group and shall produce evidence of such release following Completion
in the form acceptable to the Seller acting reasonably. Prior to such
release the Buyer shall keep each member of the Seller's Group
indemnified against any and all liabilities arising under any such
guarantee, indemnity, bond letter of comfort, Encumbrance or other
similar obligation.
8. WARRANTIES
8.1 As duly authorised agent on behalf of:-
(a) Xxxxx Inc., the Seller warrants to the Buyer (as trustee for the
Relevant Member) in the terms of the Warranties (as applicable)
in relation to Draftex Inc.;
(b) Draftex Industries Ltd, the Seller warrants to the Buyer (as
trustee for the Relevant Member) in the terms of the Warranties
(as applicable) in relation to Draftex Beteiligungsgesellschaft
mbH ((as to 75 per cent.), Draftex International GmbH & Co KG,
Draftex - MTech GmbH, Draftex International GmbH, Draftex Optimit
SRO, Draftex Verwaltgungs GmbH, Draftex International European
Technical Center GmbH & Co KG and Draftex International European
Technical Center GmbH and Beijing Wanyuan-Draftex Sealing
Products Company Limited;
(c) Draftex Industries (No. 1) Limited, the Seller warrants to the
Buyer (as trustee for the Relevant Member) in the terms of the
Warranties (as applicable) in relation to Draftex
Beteiligungsgesellschaft mbH (as to 25 per cent.) and Draftex
International
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GmbH & Co KG, Draftex - MTech GmbH, Draftex International GmbH,
Draftex Optimit SRO, Draftex Verwaltgungs GmbH, Draftex
International European Technical Center GmbH & Co KG and Draftex
International European Technical Center GmbH and Beijing
Wanyuan-Draftex Sealing Products Company Limited;
(d) Draftex SRO, the Seller warrants to the Buyer (as trustee for the
Relevant Member)in the terms of the Warranties (as applicable) in
relation to Draftex International (Pribor) SRO; and
(e) Draftex SA, the Seller warrants to the Buyer (as trustee for the
Relevant Member) in the terms of the Warranties (as applicable)
in relation to Slic Corvol SA., Slic Gruchet SA., Snappon SA.,
and Draftex International Iberica SA.
8.2 Each of the Warranties shall be construed as a separate warranty.
8.3 Any claim under the Warranties is subject to the terms and provisions
of this clause 8 and schedule 4.
8.4 Neither the Seller nor any member of the Seller's Group shall be under
any liability under the Warranties in relation to any matter forming
the subject matter of a claim thereunder to the extent that the same
or circumstances giving rise thereto are fairly disclosed in the
Disclosure Letter.
8.5 The Buyer warrants to the Seller that (and each such warranty shall be
construed as a separate warranty):-
(a) the execution and delivery of this agreement and the Completion
of the transactions contemplated hereby, have, where required,
been duly and validly authorised and no other proceedings or
action on the part of the Buyer is necessary to authorise the
agreement or to complete the transactions contemplated; and
(b) it has disclosed to the Seller all agreements, arrangements and
understandings (whether verbal or in writing) between any member
of the Buyer's Group and any director, employee, contractor or
agent of any member of the Target Group.
8.6 Any payment by a Vendor in satisfaction of a claim for breach of
Warranty shall be treated as a reduction in the relevant part of the
consideration payable hereunder (and any such reduction in
consideration shall either be attributed to those Acquisition Shares
to which the claim for breach of Warranty relates or as the parties
may otherwise agree).
9. PROTECTION OF GOODWILL
9.1 The Seller hereby undertakes to procure that (except as otherwise
agreed in writing with the Buyer) no member of the Seller's Group will
either solely or jointly with any other person (either on its own
account or as the agent of any other person):-
(a) for a period of 2 years from Completion carry on or be engaged or
concerned (except as the holder of shares in a listed company
which confer not more than five per cent. of the votes which can
generally be cast at a general meeting of the company) interested
directly or indirectly in a business which competes with the type
of
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business carried on by any member of the Target Group at
Completion in the countries and industries where any Target Group
Company operates;
(b) for a period of 2 years from Completion induce, solicit or
endeavour to entice to leave the service or employment of any
member of the Target Group, any person who during the period of
12 months prior to Completion was a consultant or an employee of
any member of the Target Group occupying a senior or managerial
position (a "MANAGER") likely (in the opinion of the Buyer) to
be:-
(i) in possession of confidential information relating to; or
(ii) able to influence the customer relationships or connections
of
any member of the Target Group; or
(c) for a period of two years from Completion solicit or entice the
custom of any person in respect of existing goods or services
manufactured or supplied by any member of the Target Group
immediately prior to Completion, such person having been a
customer of the Target Group in respect of such goods or services
during such period; or
(d) for a period of two years from Completion solicit or entice the
custom of any person in respect of existing goods or services
manufactured or supplied to any member of the Target Group
immediately prior to Completion, such person having been a
supplier of the Target Group in respect of such goods or services
during such period; or
(e) use or attempt to use any trade or domain name, trade or service
xxxx, design or logo or e-mail address used by any member of the
Target Group at any time during the 2 years immediately preceding
the date of this agreement or any other name intended or likely
to be confused with any such trade or domain name, or trade or
service xxxx, design or logo or e-mail address.
9.2 Nothing in clause 9 shall prevent or restrict any member of the
Seller's Group from:-
(a) carrying on or being engaged in or economically interested in any
business which, at the date of this agreement, it currently
carries on or is engaged in or economically interested in or any
reasonable extension or development thereof (other than the car
body seals businesses as operated by the Target Group immediately
preceding the date of this agreement and being sold hereunder);
(b) carrying on or being engaged in or economically interested in any
business referred to in clause 9.1(a) after such time as the
Buyer's Group ceases to carry on or be engaged in or economically
interested in such business to any material extent;
(c) being the holder of shares (conferring not more than five per
cent. of the votes which would normally be cast at a general
meeting of that company) or debentures of a company which is
engaged in any business referred to in clause 9.1(a);
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(d) acquiring the whole or any part of a business which, or the share
capital of a company or group of companies whose business or a
part of whose business, includes operations the carrying on of
which would otherwise amount to a breach of the undertaking
contained in clause 9.1 (the "COMPETITIVE OPERATIONS"), as part
of a larger acquisition or series of related acquisitions if the
Competitive Operations comprise a minor part of the business or
the business of such company, group of companies or businesses
acquired or in which the Seller's Group has acquired an interest
and for the purpose of this clause 13.2 a "MINOR PART" of the
business of such company, group of companies or business shall be
part of its overall business in which the turnover of the
Competitive Operations does not exceed 10 per cent. of the gross
turnover of the company, group of companies or business acquired;
and
(e) generally soliciting to the public for employment with the
Seller's Group and to which any Managers and Senior Executives
responded without any other solicitation or prompting and without
such general solicitation being directed at employees, or any of
them, of the Buyer's Group or the Target Group.
9.3 The Seller agrees that the undertakings contained in this clause 13
are reasonable and are entered into for the purpose of protecting the
goodwill of the business of each member of the Target Group.
9.4 Each undertaking contained in this clause 13 is and shall be construed
as separate and severable and if one or more of the undertakings is
held to be against the public interest or unlawful or in any way an
unreasonable restraint of trade or unenforceable in whole or in part
for any reason the remaining undertakings or parts thereof, as
appropriate, shall continue to bind the Seller.
9.5 If any undertaking contained in this clause 13 shall be held to be
void but would be valid if deleted in part or reduced in application,
such undertaking shall apply with such deletion or modification as may
be necessary to make it valid and enforceable which as far as possible
has the same legal and commercial effect as that which it replaces.
Without prejudice to the generality of the foregoing, such period (as
the same may previously have been reduced by virtue of this clause
9.5) shall take effect as if reduced by six months until the resulting
period shall be valid and enforceable.
9.6 Nothing in this agreement shall give the Buyer any rights to the names
"The Xxxxx Group Public Limited Company" or "Xxxxx" or any related or
similar trade names, trade marks, service marks or logos to the extent
that the same incorporate the names "The Xxxxx Group Public Limited
Company" or "Xxxxx" or any confusingly similar variation thereof and
the Buyer acknowledges that the Seller is and will remain the owner of
all such names, trade marks, service marks, logos and confusingly
similar variations thereof.
10. CONFIDENTIAL INFORMATION
10.1 The Seller shall not and shall procure that no other member of the
Seller's Group shall use or disclose to any person Confidential
Information.
10.2 Clause 10.1 does not apply to:-
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(a) disclosure of Confidential Information to the Buyer's Group or
its advisers in the disclosure process including the disclosure
of the Data Room Information, the Information Memorandum, the
Vendor Due Diligence Assistance Reports and any information
relating to any Target Group Company disclosed to the Buyer's
Group or its adviser during meetings with the management of the
Target Group or the Seller or at the written request of the
Buyer;
(b) use or disclosure of Confidential Information required to be
disclosed by law, regulation, any revenue authority or the London
Stock Exchange, or the UK Listing Authority, or the Unites States
Securities and Exchange Commission or the New York Stock
Exchange;
(c) disclosure of Confidential Information to professional advisers
for the purpose of advising the Seller; or
(d) Confidential Information which is in the public domain other than
by the Seller's breach of clause 10.1.
11. PENSIONS
On and from Completion the Buyer shall be and become responsible for
all of the pensions liabilities of the Target Group.
12. ANNOUNCEMENTS
12.1 Neither party shall disclose the making of this agreement nor its
terms nor any other agreement referred to in this agreement (except
those matters set out in the press release in the agreed terms) and
each party shall procure that each of its Related Persons and its
professional advisers shall not make any such disclosure without the
prior consent of the other party unless disclosure is:-
(a) to its professional advisers;
(b) made to the Independent Accountant (and those members of his firm
assisting with his determination) pursuant to Clause 6 of this
agreement; or
(c) required by law or the rules or standards of the London Stock
Exchange, the Listing Rules of the UK Listing Authority, the
United States Securities and Exchange Commission or the New York
Stock Exchange or the rules and requirements of any other
regulatory body including governmental or regulatory authorities
in the countries where the Target Group is authorised to do
business and disclosure shall then only be made by that party:-
(i) after it has taken all such steps as may be reasonable in
the circumstances to agree the contents of such announcement
with the other party before making such announcement and
provided that any such announcement shall be made only after
notice to the other party; and
(ii) to the person or persons and in the manner required by law
or the London Stock Exchange or the UK Listing Authority or
of the United States Securities
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and Exchange Commission or of the New York Stock Exchange or
such other regulatory body or as otherwise agreed between
the parties
provided that this clause 16.1 does not apply to announcements,
communications or circulars made or sent by the Buyer after Completion
to customers, clients or suppliers of any Target Group Company to the
extent that it informs them of the Buyer's acquisition of the
Acquisition Shares or to any announcements containing only information
which has become generally available.
12.2 The restrictions contained in clause 16.1 shall apply without limit of
time and whether or not this agreement is terminated.
13. COSTS
13.1 Unless expressly otherwise provided in this agreement each of the
parties shall bear its own legal, accountancy and other costs, charges
and expenses connected with the sale and purchase of the Acquisition
Shares.
13.2 The Buyer shall be solely responsible for and shall pay any and all
sales, excise, transfer, registration, stamp duty or other similar tax
or fee imposed on any transaction effected pursuant to clause 2.1 save
only in respect of the fees payable to the public notary in respect of
the acquisition by the Buyer of the shares of Draftex International
Iberica SA which fees the Buyer and the Seller agree to share in equal
proportions.
13.3 The Buyer will indemnify the Seller (and any member of the Seller's
Group) from all liabilities, costs, expenses and claims which arise as
a result of the Buyer's failure to meet its obligations under clause
13.2.
14. EFFECT OF COMPLETION
14.1 The terms of this agreement including the Warranties of the Vendor
(insofar as not performed at Completion and subject as specifically
otherwise provided in this agreement) shall continue in force after
and notwithstanding Completion.
14.2 The remedies of the Buyer in respect of any breach of any of the
Warranties shall continue to subsist notwithstanding Completion.
15. FURTHER ASSURANCES
15.1 Each of the parties shall from time to time upon request from the
other do or procure the doing of all acts and/or execute or procure
the execution of all such documents in so far as each is reasonably
able and in a form reasonably satisfactory to the party concerned for
the purpose of transferring to the Buyer the Acquisition Shares and
otherwise giving the other party the full benefit of this agreement.
15.2 Following Completion, the Seller agrees to procure that the relevant
member(s) of the Seller's Group, and the Buyer agrees to procure that
the relevant member(s) of the Buyer's Group (including members of the
Target Group), use all reasonable endeavours to procure that (if any)
all contracts involving the business of the Target Group immediately
before Completion and to which Draftex SA is a party (save in respect
of any contracts with Atos
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Infogerance SA) are novated to a member of the Buyer's Group on terms
that all members of the Seller's Group are released from all and any
obligations thereunder, and pending the later of such novation and
release:
(a) the Buyer agrees to indemnify and hold harmless all members of
the Seller's Group, from all losses, liabilities, costs and
claims arising out of any such contracts; and
(b) the Seller agrees to procure that the benefit(s) (if any) that
any member of the Seller's Group receives under such contracts
are held as trustee and are paid or delivered to the Buyer.
15.3 The Seller agrees that, on the Completion Date each Target Group
Company shall be provided with physical and electronic copies of all
source code, owned by and in the possession of the Seller or any
member of the Seller's Group, required to understand, maintain,
develop, modify, correct and enhance the version of the object code
related to that source code in use on each computer system used by
that Target Group Company as at the Completion Date.
15.4 The Seller undertakes to the Buyer that, for the period of 12 months
from the Completion Date, neither the Seller nor any member of the
Seller's Group shall perform any act, or omit to perform any act,
which has the effect of restricting in any way the access that each
Target Group Company has to the network services used by it as at the
Completion Date.
16. INDEMNITIES
16.1 (a) Within 30 days of the date of this agreement the Buyer undertakes
to notify the Seller in writing which (if any) of each of X.
Xxxxxxx, X. Xxx, X. Xxxxxxx, X. Xxxxxx, X. Xxxxxxxx, X. Xxxxxxx
and X. Xxxxxxx (each a "UK EMPLOYEE") it wishes to employ within
the Buyer's Group, (each UK Employee notified by the Buyer being
a "NOTIFIED EMPLOYEE") and the Buyer with effect from the
Completion Date will indemnify and keep the Seller (and any
member of the Seller's Group) indemnified against all
liabilities, obligations, costs, claims and demands arising
directly or indirectly as a result of the employment and/or
termination of employment of each Notified Employee (including
for the avoidance of doubt any such liabilities, obligations,
costs, claims and demands arising from the provision of
retirement and death benefits).
(b) In respect of each UK Employee who is not a Notified Employee,
the Seller shall be liable for the costs (including for the
avoidance of doubt any such liabilities, obligations, costs,
claims and demands arising from the provision of retirement and
death benefits) of that UK Employee's employment until the Seller
(or the relevant member of the Seller's Group) terminates the
contract of employment of that UK Employee within nine months of
the Completion Date in which event the Buyer and the Seller shall
each bear one half of the total liabilities, obligations, costs
and claims and demands of any nature (including for the avoidance
of doubt any such liabilities, obligations, costs, claims and
demands arising from the provision of retirement and death
benefits) (including for the avoidance of doubt any such
liabilities, obligations, costs, claims and demands arising from
the provision of retirement and death benefits)arising from or in
respect of or in relation to such termination, provided that the
Buyer's total liability arising under this clause 16 shall not
exceed (Euro) 0.5m.
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16.2 The Seller agrees to indemnify the Buyer (and any member of the
Buyer's Group) against all reasonable legal costs and expenses arising
out of proceedings commenced within 12 months of the Completion Date
challenging the Buyer's acquisition of its indirect interest in the
PRC Company following Completion.
16.3 (a) In the event that a Target Group Company shall be lawfully
prevented from occupying and/or using any freehold Property set
out against its name in schedule 5 whether such use or occupation
is or stands to be materially interfered with or curtailed by
legal proceedings or any order or direction of a competent court
or authority (or the lawful threat of any of the same) instituted
in connection with or arising from the fact that the relevant
Target Group Company does not actually have good and marketable
title to such freehold Property; or
(b) if it shall transpire that any relevant Target Group Company
shall not have good and marketable title to any freehold Property
and/or not be the legal and beneficial owner thereof; or
(c) if it shall transpire that the relevant Target Group Company's
interest in any freehold Property is subject to any encumbrance
of any nature which has not at the date of this agreement been
specifically disclosed to the Buyer (it being agreed for the
avoidance of doubt that deemed disclosure of any matter that the
Buyer has not actually seen or been told of specifically at the
date hereof shall not count as disclosure for these purposes);
then in any such case the Seller shall indemnify the Buyer and the
Buyer's Group and each relevant Target Group Company from and against
all losses, costs, damages, claims and demands of whatever nature
incurred by whichever of them is or are relevant arising out of any
such matters or circumstances as are referred to in (a) to (c) above
(but such costs and damages, claims and demands shall not include any
consequential loss or loss of profit or any matter against which the
Buyer or other relevant person shall have insured or loss in value of
the freehold Property) but the Seller may to the extent that the
relevant Target Group Company shall not have good and marketable title
free from such encumbrances at its own cost obtain such good and
marketable legal and beneficial title free from such encumbrances for
the relevant Target Group Company and thereupon the scope of the
indemnity hereunder shall be adjusted accordingly (other than in
respect of any losses, costs, damages, claims or demands previously
incurred or suffered by the Buyer or any such persons lasting beyond
the date on which good and marketable title is obtained as aforesaid);
Provided that:
(i) the Buyer shall (subject to being fully indemnified by the
Seller for all reasonable costs and expenses of whatever
nature reasonably incurred in so doing) take all reasonable
appropriate steps to mitigate its loss and take all
reasonable steps to assist the relevant Vendor in
performing its obligations under this clause 16.3, provided
that there shall be no obligation on the Buyer to act to
its own detriment or the detriment of any member of the
Buyer's Group or any Target Group Company; and
-32-
36
(ii) the Buyer shall not reveal to any other party (except to
the extent required by law, or to its professional advisers
and/or for any purposes in connection with raising finance)
the existence of this clause 16.3; and
(iii) so long as the Seller is not in breach of its obligations
under this sub-clause 16.3 the Buyer shall not (where the
matter is in its control) do any act or thing to worsen the
position of the Buyer or the Buyer's Group or the relevant
Target Group Company in respect of any such Property and
shall not make any compromise or settlement with any other
party in respect of any such matter except with the prior
written consent of the Seller (which shall not be
unreasonably withheld or delayed); and
(iv) the Buyer shall not be entitled to make any claim under
this provision and again under the Warranties in connection
with the Property it being agreed that the Buyer shall not
be entitled to recover twice in respect of the same loss or
damage.
17. ENTIRE AGREEMENT
Each party on behalf of itself and as agent for each of its Related
Persons acknowledges and agrees with the other party (each such party
acting on behalf of itself and as agent for each of its Related
Persons) that:-
(a) this agreement together with the Tax Deed, the Disclosure Letter,
the Intellectual Property Deed, the Intellectual Property
Assignments, the IT Transitional Services Procurement Agreement
and the Supply Agreements (together the "TRANSACTION DOCUMENTS")
constitutes the entire and only agreement between the parties and
their respective Related Persons relating to the subject matter
of the Transaction Documents;
(b) neither it nor any of its Related Persons have been induced to
enter into any Transaction Document in reliance upon, nor have
they been given, any warranty, representation, statement,
assurance, covenant, agreement, undertaking, indemnity or
commitment of any nature whatsoever other than as are expressly
set out in the Transaction Documents and, to the extent that any
of them have been, it (acting on behalf of itself and as agent on
behalf of each of its Related Persons) unconditionally and
irrevocably waives any claims, rights or remedies which it might
otherwise have had in relation thereto
PROVIDED THAT the provisions of this clause 21 shall not exclude any
liability which either of the parties or, where appropriate, its
Related Persons would otherwise have to the other party or, where
appropriate, to that party's Related Persons or any right which either
party them may have to rescind this agreement in respect of any
statements made fraudulently by any of them prior to the execution of
this agreement or any rights which any of them may have in respect of
fraudulent concealment by the other party or its Related Persons.
-33-
37
18. VARIATIONS
This agreement may be varied only by a document signed by each of the
Seller and the Buyer.
19. WAIVER
19.1 A waiver of any term, provision or condition of, or consent granted
under, this agreement shall be effective only if given in writing and
signed by the waiving or consenting party and then only in the
instance and for the purpose for which it is given.
19.2 No failure or delay on the part of any party in exercising any right,
power or privilege under this agreement shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right,
power or privilege preclude any other or further exercise thereof or
the exercise of any other right, power or privilege.
19.3 No breach of any provision of this agreement shall be waived or
discharged except with the express written consent of the Seller and
the Buyer.
19.4 Subject to clause 4.3 the rights and remedies herein provided are
cumulative with and not exclusive of any rights or remedies provided
by law.
20. INVALIDITY
20.1 If any provision of this agreement is or becomes invalid, illegal or
unenforceable in any respect under the law of any jurisdiction:-
(a) the validity, legality and enforceability under the law of that
jurisdiction of any other provision; and
(b) the validity, legality and enforceability under the law of any
other jurisdiction of that or any other provision,
shall not be affected or impaired in any way.
21. NOTICES
21.1 Any notice, demand or other communication given or made under or in
connection with the matters contemplated by this agreement shall be in
writing and shall be delivered personally or sent by fax or prepaid
first class post (air mail if posted to or from a place outside the
United Kingdom):-
In the case of the Buyer to:-
XX Xxx 000000
Xxxxxxxxxx
XX 00000-0000
U.S.A
Fax: 001 916 351 8668
Attention: Xxxxx Xxxx
-34-
38
In the case of the Seller (for itself and
on behalf of the Vendors) to:-
0 Xx Xxxxx'x Xxxxxx
Xxxxxx XX0X 0XX
Fax: 0207 839 2921
Attention: Company Secretary
and shall be deemed to have been duly given or made as follows:-
(a) if personally delivered, upon delivery at the address of the
relevant party;
(b) if sent by first class post, two Business Days after the date of
posting;
(c) if sent by air mail, 10 Business Days after the date of posting;
and
(d) if sent by fax, when despatched;
provided that if, in accordance with the above provisions, any such
notice, demand or other communication would otherwise be deemed to be
given or made after 5.00 p.m. on a Business Day such notice, demand or
other communication shall be deemed to be given or made at 9.00 a.m.
on the next Business Day.
21.2 A party may notify the other party to this agreement in writing of a
change to its name, relevant addressee, address or fax number for the
purposes of clause 25.1 provided that such notification shall only be
effective on:-
(a) the date specified in the notification as the date on which the
change is to take place; or
(b) if no date is specified or the date specified is less than five
Business Days after the date on which notice is given, the date
falling five Business Days after notice of any such change has
been given.
22. COUNTERPARTS
This agreement may be executed in any number of counterparts which
together shall constitute one agreement. Any party may enter into this
agreement by executing a counterpart and this agreement shall not take
effect until it has been executed by all parties.
23. GOVERNING LAW AND JURISDICTION
23.1 This agreement (and any dispute, controversy, proceedings or claim of
whatever nature arising out of or in any way relating to this
agreement or its formation) shall be governed by and construed in
accordance with English law.
23.2 Each of the parties to this agreement irrevocably agrees that the
courts of England shall have non-exclusive jurisdiction to hear and
decide any suit, action or proceedings, and/or to settle any disputes,
which may arise out of or in connection with this agreement
(respectively,
-35-
39
"PROCEEDINGS" and "DISPUTES") and, for these purposes, each party
irrevocably submits to the jurisdiction of the courts of England.
23.3 Each party irrevocably waives any objection which it might at any time
have to the courts of England being nominated as the forum to hear and
decide any Proceedings and to settle any Disputes and agrees not to
claim that the courts of England are not a convenient or appropriate
forum for any such Proceedings or Disputes and further irrevocably
agrees that a judgment in any Proceedings or Disputes brought in any
court referred to in this clause 27 shall be conclusive and binding
upon the parties and may be enforced in the courts of any other
jurisdiction.
23.4 Without prejudice to any other permitted mode of service the parties
agree that service of any claim form, notice or other document
("DOCUMENTS") for the purpose of any Proceedings begun in England
shall be duly served upon it if delivered personally or sent by
registered post, in the case of:-
(a) the Seller (for itself and on behalf of the Vendors) to 0 Xx
Xxxxx'x Xxxxxx Xxxxxx XX0X 0XX (marked for the attention of the
Company Secretary); and
(b) the Buyer to 00 Xxxxxx Xxxxxx, Xxxxxx XX0X 0XX (marked for the
attention of Xxxxxxx & Xxxxxxx (Ref: X76579/CRF/SXS))
or such other person and address in England and/or Wales as the Seller
shall notify the Buyer in writing or vice versa from time to time.
24. THIRD PARTY RIGHTS
24.1 Any person (other than the parties to this agreement) who is given any
rights or benefits under clause 21 and/or paragraph 1 of schedule 4 (a
"THIRD PARTY") shall be entitled to enforce those rights or benefits
against the parties in accordance with the Contracts (Rights of Third
Parties) Xxx 0000.
24.2 Save as provided in clause 28.1above the operation of the Contracts
(Rights of Third Parties Act) 1999 is hereby excluded.
24.3 The parties may amend, vary or terminate this agreement in such a way
as may affect any rights or benefits of any Third Party which are
directly enforceable against the parties under the Contracts (Rights
of Third Parties) Xxx 0000 without the consent of such Third Party.
24.4 Any Third Party entitled pursuant to the Contracts (Rights of Third
Parties) Xxx 0000 to enforce any rights or benefits conferred on it by
this agreement may not veto any amendment, variation or termination of
this agreement which is proposed by the parties and which may affect
the rights or benefits of the Third Party.
25. ASSIGNMENT
25.1 The Buyer may assign its rights hereunder to any other member of the
Buyer's Group provided that if as a result of any such assignment any
amount payable by any member of the Seller's Group hereunder is
increased, such assignee shall only be entitled to recover the amount
which would have been recoverable by the Buyer as the original
beneficiary of the
-36-
40
right in question and that if the assignee ceases to be a member of
the Buyer's Group then the assignee shall immediately cease to enjoy
the benefit of this agreement which shall revert to the Buyer (as the
assignor).
25.2 Subject as provided in clause 29.1, the rights and benefits of the
parties hereunder are personal to them and may not be assigned at law
or in equity without the prior written consent of other the other of
them.
IN WITNESS whereof this agreement has been executed on the date first above
written.
-37-
41
SCHEDULE 1
TARGET GROUP COMPANIES
TARGET GROUP COMPANY VENDOR(S)
Draftex Inc Xxxxx Inc.
Draftex Beteiligungsgesellschaft mbH Draftex Industries
Limited (as to 75%)
and Draftex
Industries No. 1
Limited (as to 25%)
Beijing Wanyuan-Draftex Sealing Products Co Ltd n/a
Draftex International European Technical Center GmbH & n/a
Co. KG
Draftex International European Technical Center GmbH n/a
Draftex International GmbH & Co KG n/a
Draftex International GmbH n/a
Draftex-Optimit SRO (awaiting registration of the change n/a
of name to Draftex International SRO)
Draftex International (Pribor) SRO Draftex SRO
Draftex Verwaltgungsgessellchaft mbH n/a
Draftex - MTech GmbH n/a
Draftex International Iberica SA Draftex SA (as to
99.78%) Draftex
Industries Limited
(as to 0.22%)
Slic Corvol SA Draftex SA
Slic Gruchet SA Draftex SA
Snappon SA Draftex SA
-38-
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SCHEDULE 2
PARTICULARS RELATING TO TARGET GROUP COMPANIES
U.S.A.
DRAFTEX INC.
------------
REGISTERED OFFICE: 0000 Xxxxxx Xxxx, Xxxxxxxxx XX 00000
FEDERAL I.D. NUMBER: 00-0000000
DATE OF INCORPORATION: 5 February 1996
AUTHORISED SHARE CAPITAL: 1000 shares (US$0.01 par value)
ISSUED SHARE CAPITAL: 10 shares
SHAREHOLDERS: Xxxxx, Inc.
OFFICERS: G C G Xxxxxxxxx, President
I M Arnott, Chairman
X X Xxxxxxxxxxx, Vice President Finance,
Secretary and Treasurer
DIRECTORS: G.C.G. Xxxxxxxxx
I M Arnott
C Xxxxxxx, Senior Vice President
SECRETARY: X X Xxxxxxxxxxx
ASSISTANT SECRETARY: N/A
MORTGAGES/CHARGES: Nil
GENERAL NOTES: Xxxx
-00-
00
Xxxxxxx
DRAFTEX BETEILIGUNGSGESELLSCHAFT MBH
------------------------------------
REGISTERED OFFICE: 41748 Viersen, Am Schluff 18-20
REGISTERED NUMBER: HR B 1096
DATE OF INCORPORATION: 13 July 1965
AUTHORISED SHARE CAPITAL: DM 60,000,000
ISSUED SHARE CAPITAL: DM 60,000,000
SHAREHOLDERS: Draftex Industries Limited DM45,000,000.00
Draftex Industries (No.1) Limited DM15,000,000.00
DIRECTORS: Xxx XxXxxxxxx Xxxxxx
Xxxxx Xxxxxxx Xxxxx
SECRETARY: None
ASSISTANT SECRETARY: None
MORTGAGES/CHARGES: None
GENERAL NOTES: None
-40-
44
China
BEIJING WANYUAN - DRAFTEX SEALING PRODUCTS COMPANY LIMITED
----------------------------------------------------------
REGISTERED OFFICE: 43 Feng Tai Road, Feng Tai High Technology
Development Zone, Beijing, People's
Republic of China, 100071 Beijing.
COMPANY NUMBER: 011099
DATE OF BUSINESS LICENCE: 28 December 1995
STARTED TRADING: 1 February 1996
TERM OF COMPANY: 50 years
TOTAL INVESTMENT: RMB 150,000,000
REGISTERED CAPITAL: RMB 100,000,000
INVESTORS: Draftex Beteiligungsgesellschaft mbH
60%
Beijing Wanyuan Sealing Device Factory 40%
DIRECTORS: Xxx XxXxxxxxx Xxxxxx - Chairman
Xxxxxx Xxxxx
Bai Meizhang
Xx Xxx
Xxxxxx Xxxxxxx
OFFICERS: Xxxxxxx Xxx - General Manager
Lu Zai Ping - Deputy General Manager
SECRETARY: None
ASSISTANT SECRETARY: None
MORTGAGES/CHARGES: None
GENERAL NOTES: Xxxx
-00-
00
Xxxxxxx
DRAFTEX INTERNATIONAL EUROPEAN TECHNICAL CENTER GMBH & CO. KG
-------------------------------------------------------------
REGISTERED OFFICE: Moenchengladbach
REGISTERED NUMBER: HRA 3584
DATE OF REGISTRATION WITH 6 June 2000
COMMERCIAL REGISTER:
AUTHORISED SHARE CAPITAL: Euro 100,000
ISSUED SHARE CAPITAL: None
PARTNERS: LIMITED PARTNER: Draftex Beteiligungsgesellschaft
mbH (Registered in Viersen under HRB 1096) Capital
Contribution Euro 100,000 (owns all shares and has
all votes)
GENERAL PARTNER: Draftex International European
Technical Center GmbH (Registered in
Moenchengladbach under HRB 6388) (owns no shares
and has no votes)
DIRECTORS: Xxxxxx Xxxxxxx
SECRETARY: None
ASSISTANT SECRETARY: None
MORTGAGES/CHARGES: None
GENERAL NOTES: Xxxx
-00-
00
Xxxxxxx
DRAFTEX INTERNATIONAL EUROPEAN TECHNICAL CENTRE Gmbh
----------------------------------------------------
REGISTERED OFFICE: Monchengladbach
REGISTERED NUMBER: HRB 6388
DATE OF REGISTRATION WITH 18 May 2000
COMMERCIAL REGISTER::
AUTHORISED SHARE CAPITAL: 50,000 DM
ISSUED SHARE CAPITAL: 50,000 DM
SHAREHOLDERS: Xxxxxx Xxxxxxx (99%)
Draftex Beteiligungsgesellschaft mbH (1%)
DIRECTORS: Xxxxxx Xxxxxxx
SECRETARY: N/A
ASSISTANT SECRETARY: N/A
MORTGAGES/CHARGES: None
GENERAL NOTES: Previous name: "Philomela"
VermogensverwaltgungsgessellschaftmbH
-43-
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Germany
DRAFTEX INTERNATIONAL Gmbh & CO. KG
-----------------------------------
REGISTERED OFFICE: 41748 Viersen, Am Schulff 18-20
REGISTERED NUMBER: HRA 3015
DATE OF REGISTRATION WITH 18 February 1987
COMMERCIAL REGISTER:
AUTHORISED SHARE CAPITAL: DM 60,000,000.00
ISSUED SHARE CAPITAL: DM 60,000,000.00
PARTNERS Limited Partner - Draftex Beteiligunggesellschaft
mbH 100% (owns all shares and has 60,000 votes)
General Partner - Draftex Verwaltungsgesellschaft
mbH (owns no shares but has 1,000 votes)
Draftex Verwaltungsgesellschaft mbH represented
by Xx X. Xxxxxxxx
SECRETARY: None
ASSISTANT SECRETARY: None.
MORTGAGES/CHARGES: None.
GENERAL NOTES: Name changed from Draftex GmbH & Co KG June 1999
Changed name to Draftex International GmbH & Co
KG wef 20.4.99
-44-
48
Germany
DRAFTEX INTERNATIONAL GMBH
--------------------------
REGISTERED OFFICE: Dusseldorf
REGISTERED NUMBER: HRB 39102
DATE OF REGISTRATION WITH 2 June 2000
COMMERCIAL REGISTER:
AUTHORISED SHARE CAPITAL: Euro 25,000
ISSUED SHARE CAPITAL: Euro 25,000
SHAREHOLDERS: Draftex Beteiligungsgesellschaft mbH
DIRECTORS: Xxxxxx Xxxxxxx -Director
Xxxxx Xxxxxxx Xxxxx - Director
SECRETARY: None
ASSISTANT SECRETARY: None
MORTGAGES/CHARGES: None
GENERAL NOTES: None
-00-
00
Xxxxx Xxxxxxxx
DRAFTEX-OPTIMIT S.R.O.
----------------------
(AWAITING REGISTRATION OF THE CHANGE OF NAME TO DRAFTEX INTERNATIONAL SRO)
REGISTERED OFFICE: XxxXxxxxx 000, 000 00 Xxxx, Xxxxx Xxxxxxxx
REGISTERED NUMBER: 48 39 32 23
DATE OF INCORPORATION: Registered 16 November 1993
AUTHORISED SHARE CAPITAL: 1,000,000 Kc
ISSUED SHARE CAPITAL: 1,000,000 Kc
SHAREHOLDERS: Draftex Beteiligungsgesellschaft mbH
1,000,000
DIRECTORS: X. Xxxxxxx-Xxxxx
Xxxxxx Piskytl
Milan Tomas (resigned 9 June, 2000 but
still registered as a director pending the
registration of Xxxxxx Xxxxxx Xxxxxx as
director).
SECRETARY: N/A
ASSISTANT SECRETARY: N/A
MORTGAGES/CHARGES: None
GENERAL NOTES: - Joint acting of Directors
- Change of Name not yet registered
(expected 10/2000)
-00-
00
Xxxxx Xxxxxxxx
DRAFTEX INTERNATIONAL (PRIBOR) S.R.O.
-------------------------------------
REGISTERED OFFICE: Xxxxx 0, Xxxxxxxx Xxxxxx 00, Xxxxx Xxxxxxxx
REGISTERED NUMBER: 26 16 21 48
DATE OF INCORPORATION: 8 March 2000
AUTHORISED SHARE CAPITAL: 100,000 CZK (one hundred thousand Czech Crowns)
ISSUED SHARE CAPITAL: CZK100,000
SHAREHOLDERS: Draftex s.r.o.
REPRESENTATIVES: Xxxxxxxxxxx Xxxxxxx-Xxxxx
Ing Zdenek Piskytl
SECRETARY: N/A
ASSISTANT SECRETARY: N/A
MORTGAGES/CHARGES: None
GENERAL NOTES: Directors may act independently
-47-
51
Germany
DRAFTEX VERWALTUNGSGESELLSCHAFT MBH
-----------------------------------
REGISTERED OFFICE: 41748 Viersen, Xx Xxxxxxx 00-00
REGISTERED NUMBER: HRB 1890
DATE OF REGISTRATION WITH 30 December 1986
COMMERCIAL REGISTER:
AUTHORISED SHARE CAPITAL: DM 50,000
ISSUED SHARE CAPITAL: DM 50,000
SHAREHOLDERS: Draftex Beteiligungsgesellschaft mbH
DM 500 (1%)
Xxxxxx Xxxxxxxx DM 49,500 (99%)
DIRECTORS: Xxxxxx Xxxxxxxx
SECRETARY: None
ASSISTANT SECRETARY: None
MORTGAGES/CHARGES: None
GENERAL NOTES: None
-48-
52
Germany
DRAFTEX-MTECH GMBH
------------------
REGISTERED OFFICE: 41748 Viersen, Xx Xxxxxxx 00-00
REGISTERED NUMBER: HRB 3081
DATE OF REGISTRATION WITH 3 January 2000
COMMERCIAL REGISTRY:
AUTHORISED SHARE CAPITAL: EUR 100,000
ISSUED SHARE CAPITAL: EUR 100,000
SHAREHOLDERS: Draftex International GmbH & Co. KG
DIRECTORS: Xxxxxx Xxxxxxxx
SECRETARY: None
ASSISTANT SECRETARY: None
MORTGAGES/CHARGES: None
GENERAL NOTES: Xxxx
-00-
00
Xxxxx
DRAFTEX INTERNATIONAL IBERICA S.A.
----------------------------------
REGISTERED OFFICE: c./dels Mercaders
9-11 Poligono Xxxxx xx Xxxxxx
08184 Palau de Plegamans
Barcelona
Spain
REGISTERED NUMBER: CIF A 58 53 35 55
DATE OF INCORPORATION: 11 March 1988
AUTHORISED SHARE CAPITAL: Pts 3,444,700,000
ISSUED SHARE CAPITAL: Pts 3,444,700,000 divided into 344,470 shares
Of 10,000 pts each
SHAREHOLDERS: Draftex Industries Limited: 770 shares
Draftex S.A. 343,700 shares
DIRECTORS: I.M. Arnott
X. Xxxxxx
X. Xxxxxx
SECRETARY: Xxxxx Xxxxxxxx Xxxxxxx
ASSISTANT SECRETARY: Xxxxxx Xxxxxxxxx xx Xxxx
MORTGAGES/CHARGES: None
GENERAL NOTES: Name changed from Draftex Iberica S.A. June 1999
-50-
54
France
SLIC CORVOL S.A.
----------------
REGISTERED OFFICE: Xxxxxx Xxx, 00000 Xxxxxx X'Xxxxxxxxxxx, Xxxxxx
REGISTERED NUMBER: Xxxxxx B331 875 856B.
DATE OF INCORPORATION: 1 January 1985
AUTHORISED SHARE CAPITAL: FF 10,500,000
ISSUED SHARE CAPITAL: FF 10,500,000
SHAREHOLDERS *DRAFTEX S.A. 104,994
D.I.L. 1
I.M. ARNOTT 1
G.C.G. XXXXXXXXX 1
X.X. SILVER 1
D.J.L. XXXXXX 1
Draftex Industries No 1 Limited 1
DIRECTORS: I.M. ARNOTT
X. XXXXXXXXX PDG
D.I.L. Represented by X. Xxxxxx
*DRAFTEX Represented by X. Xxxxxxx
SECRETARY: N/A
ASSISTANT SECRETARY: N/A
MORTGAGES/CHARGES: None
GENERAL NOTES: Converted from S.A.R.L. to S.A. with effect
23.12.1992
* Previously Atko
** The Commercial Court of Clanecy and the
Commercial Court of Xxxxxx were merged
with effect from 01.01.2000
-51-
55
France
SLIC GRUCHET S.A.
-----------------
REGISTERED OFFICE: 00 Xxx xx Xxxxxxx, 00000 Xxxxxxx Xx Xxxxxxx, Xxxxxx
REGISTERED NUMBER: Le Havre B 332 024 132 B
DATE OF INCORPORATION: 12 July 1985
AUTHORISED SHARE CAPITAL: FF 10,500,000
ISSUED SHARE CAPITAL: FF 10.500.000
SHAREHOLDERS: *DRAFTEX S.A. 104,994
D.I.L. 1
I.M. ARNOTT 1
G.C.G. XXXXXXXXX 1
X.X. SILVER 1
D.J.L. XXXXXX 1
Draftex Industries No 1 Limited 1
DIRECTORS: D.J.L. XXXXXX PDG
G.C.G. XXXXXXXXX
D.I.L. Represented by X. Xxxxxx
DRAFTEX Represented by X. Xxxxxxx
SECRETARY: Draftex Represented by Legalloudec
ASSISTANT SECRETARY: N/A
MORTGAGES/CHARGES: Secured tax privilege of FF 6,584,637
Secured Social Security privilege of FF 126,196
GENERAL NOTES: Converted from S.A.R.L. to S.A. with effect
23.12.1992
* Previously Xxxx
-00-
00
Xxxxxx
SNAPPON S.A.
------------
REGISTERED OFFICE: 0 xxx Xxxxxx Xxxxxxx, 00000 Xxxxxxxx, Xxxxxx.
REGISTERED NUMBER: Chartres B 807.020.458
AUTHORISED SHARE CAPITAL: FF 30,000,000
ISSUED SHARE CAPITAL: FF 30,000,000
SHAREHOLDERS: DRAFTEX S.A.* 299,994
D.I.L. 1
XXXXX 1
I.M. ARNOTT 1
D.J.L. XXXXXX 1
X.X. SILVER 1
Draftex Industries No.1 Limited 1
DIRECTORS: I.M. ARNOTT Chairman
D.I.L. Represented by X. Xxxxxx
D.J.L. XXXXXX
DRAFTEX* Represented by X. Xxxxxxx
SECRETARY: N/A
ASSISTANT SECRETARY: N/A
MORTGAGES/CHARGES: Secured tax privilege of FF 3,529,436
GENERAL NOTES: * previously Atko
-53-
57
SCHEDULE 3
THE WARRANTIES
For the purpose of this schedule 3:
in relation to the Warranties given by the Seller as duly authorised agent on
behalf of Xxxxx Inc., the "Target Group Company" means Draftex Inc.;
in relation to the Warranties given by the Seller as duly authorised agent on
behalf of Draftex Industries Limited, the "Target Group Company" means Draftex
Beteiligungsgesellschaft mbH (as to 75 per cent.), Draftex International GmbH &
Co KG, Draftex - MTech GmbH, Draftex International GmbH, Draftex Verwaltgungs
GmbH, Draftex International European Technical Center GmbH & Co KG, Draftex
International European Technical Center GmbH and Beijing Wanyuan-Draftex Sealing
Products Company Limited;
in relation to the Warranties given by the Seller as duly authorised agent on
behalf of Draftex Industries (No 1) Ltd, "Target Group Company" means Draftex
Beteiligungsgesellschaft mbH (as to 25 per cent.) and Draftex International GmbH
& Co KG, Draftex - MTech GmbH, Draftex International GmbH, Draftex Optimit SRO,
Draftex Verwaltgungs GmbH, Draftex International European Technical Center GmbH
& Co KG and Draftex International European Technical Center GmbH and Beijing
Wanyuan-Draftex Sealing Products Company Limited;
in relation to the Warranties given by the Seller as duly authorised agent on
behalf of Draftex SRO, "Target Group Company" means Draftex International
(Pribor) SRO;
in relation to the Warranties given by the Seller as duly authorised agent on
behalf of Draftex SA, "Target Group Company" means Draftex International Iberica
SA, Slic Corvol SA, Slic Gruchet SA and Snappon SA.
Any Warranty expressed to be given "to the best of the Vendor's knowledge and
belief" or "so far as the Vendor is aware" or otherwise qualified by reference
to the knowledge of the relevant Vendor means so far as is within the actual
knowledge, of the following persons Xxxxx X Xxxxx, Xxxxxx Xxxxxxx, Xxxxx
Xxxxxxx, Xxxxxxx Wulfhugel, Xxxx Xxx, Xxxx Xxxxxxx and Xxxx Xxxxxxx and shall be
deemed to include an additional statement that it has been made after due and
careful enquiry by such person.
1. VENDOR'S CAPACITY
1.1 AUTHORISATIONS
Each of the Vendors has obtained all corporate authorisations and all
other applicable governmental, statutory, regulatory or other
consents, licences, waivers or exemptions required to empower and
authorise it to enter into and to perform its obligations under this
agreement and the Transaction Documents.
2. THE TARGET GROUP, THE SHARES AND THE SUBSIDIARIES
2.1 INCORPORATION AND EXISTENCE
(a) The Target Group Companies are incorporated or formed under the
law shown in schedule 2 and have been in continuous existence
since incorporation or formation
-54-
58
and in good standing in their respective jurisdictions of
formation/incorporation, and are duly qualified to do business as
a foreign company in each others' jurisdiction in which either
the ownership or properties by them, or the actions carried by
them, requires such qualification.
(b) The particulars of each of the Target Group Company set out in
schedule 2 are true and complete.
2.2 THE SHARES
(a) The shareholder(s) of the Target Group Company as listed in
schedule 2 is/are the only legal and beneficial owner(s) of the
Target Group Company.
(b) The Target Group Company has not allotted any shares other than
the shares as shown in schedule 2 and such shares are fully paid
or credited as fully paid.
(c) There is no Encumbrance in relation to any of the shares as shown
in schedule 2 or unissued shares in the capital of any Target
Group Company.
(d) Other than this agreement, there is no agreement, arrangement or
obligation requiring the allotment, sale, transfer, redemption or
repayment of, or the grant to a person of the right (conditional
or not) to require the allotment, sale, transfer, redemption or
repayment of, a share in the capital of the Target Group
(including an option or right of pre-emption or conversion).
(e) No Target Group Company has any subsidiary which is not itself a
Target Group Company.
3. ACCOUNTS
3.1 GENERAL
(a) The Accounts show a true and fair view of the state of affairs at
the Accounts Date of the Target Group Companies.
(b) The Accounts for each Target Group Company have been prepared in
accordance with the accounting principles, standards and
practices generally accepted in the United Kingdom.
3.2 ACCOUNTING AND OTHER RECORDS
(a) The books of account and other records of the Target Group
Company are up-to-date and have been maintained in all respects
in accordance with the law and applicable standards, principles
and practices generally accepted in the country in which each
Target Group Company is incorporated and in accordance with the
accounting principles, standards and practices generally accepted
in the United Kingdom.
(b) All deeds and documents (properly stamped where stamping is
necessary for enforcement thereof) belonging to the Target Group
Company and which by law
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ought to be in the possession of the Target Group Company are in
the possession of the Target Group Company.
3.3 ACCOUNTING REFERENCE DATE
The accounting reference date of the Target Group Company is, and
during the last three years has always been, 31 December.
3.4 MANAGEMENT ACCOUNTS
(a) The management accounts of the Target Group Company in the agreed
terms have been prepared by the Target Group with due care and
attention and show with reasonable accuracy the state of affairs
and profit or loss of the Target Group Company as at and for the
period in respect of which they have been prepared and the
balance sheet of the Target Group Company as at 30 September 2000
but it is hereby acknowledged that they are not prepared on a
statutory basis, but that they have been prepared in accordance
with the accounting principles, standards and practices generally
accepted in the United Kingdom and on a basis consistent with
management accounts prepared in the preceding year.
(b) The level of Third Party Debt of the Target Group Company as at
the date of this agreement is not materially different from the
level of Third Party Debt of the Target Group Company shown in
the Management Accounts of the Target Group Company for September
2000.
4. CHANGES SINCE THE ACCOUNTS DATE
4.1 GENERAL
Since the Accounts Date:-
(a) the Target Group Company has carried on its business in the
ordinary and usual course and so as to maintain the business as a
going concern;
(b) there has been no material adverse change in the financial or
trading position of the Target Group Company.
4.2 SPECIFIC
Since the Accounts Date:-
(a) the Target Group Company has not made, or agreed to make, capital
expenditure exceeding in total (Euro)100,000 or incurred, or
agreed to incur, a commitment or connected commitments involving
capital expenditure exceeding in total (Euro)100,000 other than
as disclosed in the Disclosure Letter;
(b) no substantial supplier representing more than ten per cent. of
supplies or substantial customer representing ten per cent. of
sales has ceased or substantially reduced its trade with the
Target Group Company or has materially altered the terms of trade
to
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the Target Group Company's disadvantage other than as disclosed
in the Disclosure Letter;
(c) the Target Group Company has not declared, paid or made a
dividend or other distribution except to the extent provided in
the Accounts other than as disclosed in the Disclosure Letter;
(d) no resolution of the shareholders of the Target Group Company has
been passed (except for those representing the ordinary business
of an annual general meeting) other than as disclosed in the
Disclosure Letter;
(e) the Target Group Company has not repaid or redeemed share or loan
capital, or made (whether or not subject to conditions) an
agreement or arrangement or undertaken an obligation to do any of
those things other than as disclosed in the Disclosure Letter;
(f) the Target Group Company has not paid nor is under an obligation
to pay any management charges other than as disclosed in the
Disclosure Letter.
5. ASSETS
TITLE AND CONDITION
5.1 There are no Encumbrances, nor has the Target Group Company agreed to
create any Encumbrances, over any part of its assets and each asset
included in the Accounts or acquired by it so far as the Vendor is
aware since the Accounts Date (other than assets sold in the ordinary
course of business):-
(a) is legally and beneficially owned by the Target Group Company;
and
(b) where capable of possession, in the possession of the Target
Group Company.
5.2 Save as disclosed or save where expressly provided for and/or agreed
in this agreement, the Target Group Company owns or entitled to use in
conjunction with the other Target Group Companies, all of the assets
which are necessary to carry on the car body sealings business of the
Seller as currently conducted.
5.3 So far as the Vendor is aware all fixed assets of the Target Group
Company including, without limitation, all fixed and movable plant and
machinery, vehicles, and other equipment used in, or in connection
with, the business of the Target Group Company are in working order
and in a condition which is not materially different to the prevailing
standards of the car body seals industry (taking into account fair
wear and tear).
6. INTELLECTUAL PROPERTY
GENERAL
6.1 All the registered Intellectual Property which (i) is within the
definition of Business IP or (ii) is owned by the Target Group (the
"ACQUIRED REGISTERED IP"), is listed in Annex 1 of the Disclosure
Letter.
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6.2 All Intellectual Property which (i) is within the definition of
Business IP or (ii) is owned by the Target Group (the "ACQUIRED IP")
is free from Encumbrances.
6.3 In each case, the Acquired Registered IP is registered in the name of
a member of the Seller's Group or a member of the Target Group.
6.4 The Licensed Patents (as defined in the Intellectual Property Deed)
and the Intellectual Property listed in Attachment B of the Disclosure
Letter is legally and beneficially owned by and registered in the name
of a member of the Seller's Group or the Target Group.
6.5 The Vendor has not received notice of and is not aware of the validity
or ownership of any of the Acquired IP being challenged or opposed by
any third party.
6.6 So far as the Vendor is aware, from Completion the Buyer and the
Target Group Company will have available to it all the Intellectual
Property which is needed for the purpose of operating the business of
the Target Group Company as such business has been operated during the
12 months prior to the date of this agreement.
RENEWALS/MAINTENANCE
6.7 So far as the Vendor is aware, all registration and renewal fees have
been paid in relation to the Acquired Registered IP, and there are no
deadlines for renewal which fall due within 6 months of the date of
this agreement
LICENCES
6.8 True and correct copies of all licences of the Acquired IP which have
been granted to third parties and which are material to the Target
Group Company have been provided to the Buyer and are identified in
the Disclosure Letter. The Vendor has not been notified of and is not
aware of any material breach of such licences.
6.9 Other than software licences, true and correct copies of all licences
relating to Intellectual Property used in or on behalf of the business
of the Target Group have been provided to the Buyer and are identified
in the Disclosure Letter. The Vendor has not been notified of and is
not aware of any material breach of such licences.
6.10 The Seller has the power and authority to license or procure the
licence to the Buyer of the Intellectual Property licensed under
clause 3.1(a) or 3.1(b) of the Intellectual Property Deed on the terms
of the Intellectual Property Deed.
INFRINGEMENT
6.11 So far as the Vendor is aware, the activities comprised within the
business of the Target Group do not infringe the rights of any third
party and have not done so during the last three years.
6.12 There are no claims for infringement of third party rights which have
been settled by any of the Seller's Group or the Target Group by the
giving of undertakings which remain in force.
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6.13 So far as the Vendor is aware, no third party is infringing either the
Acquired IP or any Intellectual Property licensed under clauses 3.1(a)
or 3.1(b) of the Intellectual Property Deed, nor have such third
parties done so oar threatened to do so during the last three years.
CONFIDENTIALITY AGREEMENTS
6.14 The know how and confidential information within the Acquired IP is
kept strictly confidential and has not been disclosed to third parties
other than in the ordinary course of business and subject to
appropriate obligations of confidentiality.
7. EFFECT OF SALE
Neither the execution nor performance of this agreement or any
document to be executed at or before Completion will so far as the
Vendor is aware:-
(a) conflict with, or result in a material breach of an agreement,
arrangement or obligation to which the Target Group Company is a
party; or
(b) result in any substantial customer cease dealing with the Target
Group Company; or
(c) result in any substantial supplier cease supplying to the Target
Group Company;
(d) result in any officer or senior employee leaving the Target Group
Company; or
(e) make the Target Group Company liable to transfer or purchase any
assets, including shares held by it in other bodies corporate
under their articles of association or any agreement or
arrangement.
(f) cause the Target Group Company to lose the benefit of any
licence, consent, permit, approval or authorisation (public or
private) or any right, grant, subsidy or privilege it presently
enjoys or relieve any person of any obligation to the Target
Group Company (whether contractual or otherwise), or require the
repayment of a grant or subsidy, or enable any person to
determine any such obligation or any contractual right or benefit
now enjoyed by the Target Group Company or to exercise any right
whether under an agreement with the Target Group Company or
otherwise in each case which is material to the operation of the
Target Group Company;
(g) result in any present or future indebtedness of the Company
becoming due or capable of being declared due and payable prior
to its stated maturity;
(h) save as disclosed in the Disclosure Letter, give rise to or cause
to become exercisable any right of pre-emption or right of
termination;
(i) result in a breach of, or constitute a default under any
provision of the memorandum or articles of association of the
Company; or
(j) result in a breach of, or constitute a default under any order,
judgement or decree of any court or government agency by which
the Company is bound or subject.
8. CONSTITUTION
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8.1 INTRA XXXXX
The Target Group Company has the power to carry on its business as now
conducted.
8.2 MEMORANDUM AND ARTICLES
The memorandum and articles of association or equivalent
constitutional documentation of each Target Group Company in the form
annexed to the Disclosure Letter are true and complete.
8.3 POWERS OF ATTORNEY
The Target Group Company has not executed any power of attorney or
conferred on any person other than its directors, officers and
employees any authority to enter into any transaction on behalf of or
to bind the Target Group Company in any way and which power of
attorney remains in force or was granted or conferred within one year
of the Completion Date.
8.4 STATUTORY BOOKS AND FILINGS
(a) The statutory books of the Target Group Company are up to date,
in its possession and are true and complete in accordance with
the law.
(b) All resolutions, annual returns and other documents required to
be delivered to the Registrar of Companies (or other relevant
regulatory authority) have been properly prepared and filed and
the common seal of the Target Group Company is in its possession.
9. INSURANCE
9.1 POLICIES
The Disclosure Letter contains a list of current insurance and
indemnity policies in respect of which the Target Group has an
interest (together the "POLICIES"). So far as the Vendor is aware each
of the Policies is valid and enforceable and is not void or voidable.
9.2 CLAIMS
No claim is outstanding under any of the Policies and so far as the
Vendor is aware no matter exists which might give rise to a claim
under any of the Policies.
9.3 MAINTENANCE
All the Target Group Company's insurances are in full force and effect
and will be maintained in full force without alteration pending
Completion and all premiums have been paid on time. So far as the
Vendor is aware, there are no circumstances which might lead to any
liability under any of the Target Group Company's insurances being
avoided by the insurers or the premiums being increased otherwise than
as a result of general market increases.
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10. CONTRACTUAL MATTERS
10.1 VALIDITY OF AGREEMENTS
(a) No party with whom the Target Group Company has entered into any
agreement, arrangement or obligation which is material to the
operation of the business of the Target Group Company has given
notice of its intention to terminate, or has sought to repudiate
or disclaim, such agreement, arrangement or obligation.
(b) So far as the Vendor is aware no party with whom the Target Group
Company has entered into an agreement or arrangement which is
material to the operation of the business of the Target Group is
in material breach of such agreement or arrangement. So far as
the Vendor is aware no matter exists which might give rise to
such breach.
(c) So far as the Vendor is aware the Target Group Company is not in
breach of any agreement or arrangement which is material to the
operation of the business of the Target Group Company and so far
as the Vendor is aware no matter exists which might give rise to
such breach.
10.2 MATERIAL AGREEMENTS
(a) The Target Group Company is not a party to and is not liable
under any contract, transaction, arrangement or liability which
was entered into other than by way of a bargain at arm's length
or outside the Target Group Company ordinary course of business.
(b) The Target Group Company is not a party to and is not liable
under:-
(i) an agreement, arrangement or obligation by which the Target
Group is a member of a joint venture, consortium,
partnership or association (other than a bona fide trade
association); or
(ii) a distributorship, agency, marketing, licensing or
management agreement or arrangement.
(c) The Target Group Company is not a party to or subject to any
agreement, transaction, obligation, commitment, understanding,
arrangement or liability which:
(i) is of a length that is greater than is customary in
businesses of a similar nature to that of the Target Group
Company and which is material in the context of the Target
Group Company; or
(ii) is dependent on the guarantee or covenant of or security
provided by any member of Seller's Group and which is
material in the context of the Target Group Company; or
(iii) is a contract for the sale of shares or assets comprising a
business undertaking which contains warranties or
indemnities under which the Target Group Company still has a
remaining liability or obligation; or
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(iv) can be terminated as a result of any change in the
underlying ownership or control of the Target Group Company,
or would be materially affected by such change; or
(v) is in any way otherwise than in the ordinary course of the
Target Group Company's business.
10.3 SUBSTANTIAL OR SIGNIFICANT CONTRACTS
No contract, agreement, transaction, obligation, commitment,
understanding, arrangement or liability entered into by the Target
Group Company and now outstanding or unperformed involves the supply
by or to the Target Group Company of products or services whether by
way of lease or outright sale or otherwise to any one customer such
that the value of such supplies exceeds or is likely to exceed ten per
cent. of the total turnover of the Target Group Company in the
financial year ending 31 December 1999.
11. INFORMATION TECHNOLOGY
11.1 In the twelve months prior to the date hereof the Target Group Company
has not suffered any material failures or breakdowns of any computer
hardware or software used in connection with its business which have
caused any substantial disruption or interruption to their business.
11.2 There have been no Year 2000 issues which have interfered with
business to a material extent.
11.3 The Target Group Company has the benefit of maintenance and support
agreements for its material computer systems which are all in force
and not terminable by the contractor by less than six months' notice.
None of the maintenance and support agreements for the computer
systems are terminable as a result of the transaction.
11.4 The computer systems of the Target Group Company have, and the Vendor
has no reason to believe that the computer systems will not after
Completion continue to have, adequate capability and capacity for all
the processing and other functions required by the Target Group
Company immediately prior to Completion.
11.5 Each Target Group Company has disaster recovery procedures or
contracts which ensure or provide that the computer systems and the
data can be replaced or substituted without material disruption to the
business of the Target Group Company.
11.6
(a) In relation to third party software, the Vendor is unaware of any
reason why, in the event that any person providing maintenance or
support services for the computer systems of the Target Group
Company is unable to do so, the Target Group Company would be
unable to procure another person to carry out such services; and
(b) In relation to all other software, in the event that any person
providing maintenance or support services for the computer
systems of the Target Group Company is unable
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to do so, the Target Group Company has all necessary rights and
information to procure the carrying out of such services by
employees or by a third party.
11.7 The Target Group Company has, a sufficient number of technically
competent and trained employees to ensure proper handling, operation,
monitoring and use of the Target Group Company's computer systems and
the Vendor is aware of no reason why each the Target Group Company
will not have a sufficient number of so technically competent and
trained employees following Completion.
11.8 The Target Group Company has implemented reasonable procedures to
ensure internal and external security of its computer systems and data
including (without limitation) procedures for preventing unauthorised
access, preventing the introduction of a virus and/or loss of data and
for taking and storing on-site and off-site back-up copies of software
and data. So far as the Vendor is aware no viral infection subsists in
any of the computer systems or data of the Target Group Company.
11.9 The hardware of the Target Group Company is the absolute property of
the Target Group Company free from encumbrances.
11.10 Where any of the records of the Target Group Company are stored
electronically, the Target Group Company has all necessary software
licences and access to all hardware to enable it to keep, copy,
maintain and use such records in the course of its business. Except
for software, hardware and/or computer systems the subject of a
facilities management agreement between Draftex SA and ATOS dated 31
May 1997, the Target Group Company does not share any hardware or
software relating to the records with any person and no third party
enjoys any right or permission to copy or hold such records.
In the above warranties:
(a) "COMPUTER SYSTEM" means the hardware and the software;
(b) "DATA" means any data or information used by or for the benefit
of the Target Group Company at any time and stored electronically
at any time;
(c) "HARDWARE" means any computer equipment used by or for the
benefit of the Target Group Company at any time including,
without limitation, parts of computer equipment such as firmware,
screens, terminals, keyboards, disks and including cabling and
other peripheral and associated equipment but excluding all
software;
(d) "SOFTWARE" means any software and associated documentation and
materials created by or on behalf of or used in the business of
the Target Group Company.
12. LIABILITIES
12.1 DEBTS OWED BY THE TARGET GROUP COMPANY TO THIRD PARTIES
(a) The Target Group Company has not received any notice to repay
under any agreement relating to any borrowing or indebtedness in
the nature of borrowing from a person other than a member of the
Seller's Group (a "third party") which is repayable on demand.
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(b) There has not occurred any event of default or any other event or
circumstance which would entitle any person to call for early
repayment under any agreement relating to any borrowing or
indebtedness of the Target Group Company to a third party or to
enforce any security given by the Target Group Company to a third
party.
12.2 GUARANTEES AND INDEMNITIES
(a) The Target Group Company is not a party to any option,
pre-emption, guarantee, indemnity, or suretyship with respect to
the obligations of any member of the Seller's Group;
(b) No part of the loan capital, borrowing or indebtedness in the
nature of borrowing of the Target Group Company is dependent on
the guarantee or indemnity of, or security provided by, any
member of the Seller's Group.
12.3 BORROWING POWERS
(a) The total amount borrowed by the Target Group Company from its
bankers does not exceed its facilities and the total amount
borrowed by the Target Group Company from whatsoever source does
not exceed any limitation on its borrowing contained in its
articles of association, or in any debenture or loan stock deed
or other instrument.
(b) The particulars attached to the Disclosure Letter show the third
party bank facilities of the Target Group Company.
12.4 OFF-BALANCE SHEET FINANCING
The Target Group Company has not engaged in any borrowing or financing
not required to be reflected in the Accounts.
13. PERMITS
13.1 The Target Group Company has obtained all material licences,
approvals, permissions, authorisations (public and private) and
consents required for carrying on its business in the places and in
the manner in which such business is now carried on.
13.2 The licences, approvals, permissions, authorisations and consents
referred to in paragraph 13.1 are in full force and effect and have
been complied with in all material respects. So far as the Vendor is
aware no such licence, consent, permit approval or authorisation is
likely to be suspended, cancelled or revoked or not renewed upon
expiry.
14. INSOLVENCY
14.1 WINDING UP
No order has been made, petition presented or resolution passed for
the winding up of the Target Group Company or for the appointment of a
provisional liquidator to the Target Group Company.
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14.2 ADMINISTRATION
No administration order has been made and no petition for an
administration order has been presented in respect of the Target Group
Company.
14.3 RECEIVERSHIP
No receiver, receiver and manager or administrative receiver has been
appointed of the whole or part of the Target Group Company's business
or assets.
14.4 COMPROMISES WITH CREDITORS
No Target Group Company has proposed or had approved (by its members,
creditors and/or a court, as appropriate) any compromise or
arrangement with its general body of creditors (or any class of them)
in respect of the payment of creditors claims.
14.5 UNSATISFIED JUDGMENTS
No distress, execution or other process been levied against the Target
Group Company or action taken to repossess goods in the Target Group
Company's possession which has not been satisfied in full. No
unsatisfied judgment is outstanding against the Target Group Company.
14.6 ANALOGOUS EVENTS
No event analogous to any of the foregoing has occurred in or outside
England.
15. LITIGATION AND COMPLIANCE WITH LAW AND PRODUCT LIABILITY
LITIGATION
(a) The Target Group Company during the 12 months ending on the date
of this agreement has not been involved in any civil, criminal,
arbitration, administrative or other proceeding in any
jurisdiction which is material to the operation of its business.
So far as the Vendor is aware no civil, criminal, arbitration,
administrative or other proceeding in any jurisdiction is pending
or threatened by or against the Target Group Company which is
material to the operation of its business.
(b) There is no outstanding judgment, arbitral award or decision of a
court, tribunal, arbitrator or governmental agency in any
jurisdiction against the Target Group Company which is material
to the operation of its business.
15.2 COMPLIANCE WITH LAW
So far as the Vendor is aware the Target Group Company has conducted
its business and dealt with its assets in all material respects in
accordance with applicable legal and administrative requirements in
any jurisdiction (including the Health and Safety at Work Act 1974).
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15.3 INVESTIGATIONS
So far as the Vendor is aware the Target Group Company is not and has
not been subject to any investigation, enquiry or disciplinary
proceeding (whether judicial, quasi-judicial or otherwise) in any
jurisdiction which is material to the operation of its business. The
Target Group has not received any request for information from, any
court or governmental authority (including any national competition
authority and the Commission of the European Communities and the EFTA
Surveillance Authority) under any anti-trust or similar legislation in
any jurisdiction. So far as the Seller is aware no matter exists which
might give rise to such an investigation, enquiry, proceeding or
request for information.
15.4 PRODUCT LIABILITY
There is no claim in respect of Product Liability (as hereinafter
defined) outstanding or threatened against or expected by the Target
Group Company in relation to its business which is material in the
context of the Target Group Company as a whole and so far as the
Vendor is aware there are no circumstances which are likely to give
rise to any such claim. For this purpose "Product Liability" means a
liability arising out of death, personal injury or damage to property
caused by a defective product or defective services sold, supplied or
provided by the Target Group in the course of its business on or prior
to the date hereof.
16. BROKERAGE OR COMMISSIONS
No person is entitled to receive from the Target Group Company a
finder's fee, brokerage or commission in connection with this
agreement or anything in it and the Target Group Company is not liable
to pay to any of its directors, employees, agents and advisers any sum
whatsoever in connection with the sale of the Acquisition Shares.
17. OFFICERS AND EMPLOYEES
17.1 PARTICULARS OF SENIOR EXECUTIVES
The particulars of each Senior Executive annexed to the Disclosure
Letter show the names, job title, date of commencement of employment,
and date of birth of every Senior Executive of the Target Group
Company and no other person is a direct or shadow director of the
Target Group Company.
17.2 REMUNERATION AND BENEFITS
The particulars annexed to the Disclosure Letter show all remuneration
(including particulars of all profit sharing, incentive, bonus and
commission arrangements) and other benefits (including for the
avoidance of doubt any right to payment or compensation howsoever
arising):-
(a) actually provided; and/or
(b) which the Target Group Company is bound to provide (whether now
or in the future)
to each Senior Executive of the Target Group Company.
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17.3 TERMS AND CONDITIONS
(a) The Disclosure Letter contains examples of all the standard terms
and conditions, staff handbooks and policies which apply to
Senior Executives and employees of the Target Group Company.
(b) There are no terms and conditions in any contract with any Senior
Executive or employee of the Target Group Company pursuant to
which such person will be entitled to receive any payment or
benefit or such person's rights will change as a direct or
indirect consequence of the transaction contemplated by this
agreement.
(c) So far as the Seller is aware all employees have only one
employment contract with one of the Target Group Company and do
not have an employment relationship with either another Target
Group Company or any third party.
17.4 NOTICE PERIODS
The terms of employment of all employees of the Target Group Company
and the terms on which the service of any persons are provided to the
Target Group Company are such that their employment may be terminated
by not more than six months' (but in any event not less than 30 days')
notice given at any time without liability for any payment including
by way of compensation or damages (except in the case of employees, an
economic compensation payment if required by Chinese Labour Law (for
China only), a statutory redundancy payment or for all countries
except France unfair dismissal) except in the case of the Senior
Executives whose notice periods are disclosed in the Disclosure
Letter.
17.5 LOANS
There are no amounts owing or agreed to be loaned or advanced by any
of the Target Group Company to any Senior Executives of the Target
Group Company (other than amounts representing remuneration accrued
due for the current pay period, accrued extraordinary pay (for Spain
only) accrued holiday pay for the current holiday year or for
reimbursement of expenses).
17.6 INDUSTRIAL RELATIONS
(a) No trade union, staff association or any other body representing
workers is recognised by the Target Group Company for the
purposes of collective bargaining.
(b) The Disclosure Letter contains copies of any agreements
(collective or otherwise) between the Target Group Company and
any trade union, works council, staff association or any other
body representing workers ("Collective Agreements").
(c) The Target Group Company are not engaged or involved in any trade
dispute, industrial action (whether official or unofficial,
current or threatened) and/or any industrial relations matter
(whether or not referred to any government or other recognised
agency within each jurisdiction which specialises in providing
advisory, conciliation or arbitration services) with any
employee, trade union, staff association or any other body
representing workers.
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(d) So far as the Vendor is aware the Target Group Company is not
engaged or involved in any review or supervision by or dispute
with any governmental body which could claim any form of payment
from the Target Group Company.
17.7 NOTICE OF TERMINATION AND LEAVE OF ABSENCE
(a) No Senior Executive of the Target Group Company has given notice
to terminate his employment.
(b) None of the Senior Executives is under notice of dismissal nor is
there any liability outstanding to Senior Executives or former
Senior Executives arising out of or in connection with their
contract of employment, its termination or otherwise.
(c) There are no Senior Executives of the Target Group Company who
are on secondment, maternity leave or absent on grounds of
disability or other leave of absence (other than normal holidays
or absence of no more than one week due to illness).
(d) The Target Group Company does not have any proposals, plans,
commitments or agreements to dismiss any employees and there are
no present or planned consultations or discussions with any trade
union, staff association, works council or representatives of the
employees in respect of any such proposal, plan, commitments or
agreements.
17.8 CLAIMS BY OFFICERS AND EMPLOYEES
No past or present Senior Executive or employee of the Target Group
Company or any predecessor in business has instigated or threatened
any claim or right of action against the Target Group Company
including any claim:-
(a) in respect of any accident or injury which is not fully covered
by insurance; or
(b) for breach of any contract of services or for services; or
(c) for loss of office or arising out of or connected with the
termination of his office or employment, his contract of
employment or otherwise.
17.9 COMPLIANCE WITH LAW
So far as the Vendor is aware the Target Group Company has complied in
all material respects during the past two years (except in the case of
France and Spain which shall be five years) with the relevant
provisions of the Treaty of Rome, EC Directives, EC Regulations,
statutes (including for the avoidance of doubt any regulating working
time or minimum salary levels), regulations, codes of conduct,
Collective Agreements, terms and conditions of employment, contracts,
applicable redundancy procedures, social security regulations, filing
requirements, mandatory insurance requirements, legal requirements
relating to health and safety, orders, declarations and awards
relevant to the Target Group Company's employees or persons whose
services are provided to the Target Group Company or the relations
between the Target Group Company and any trade union, staff
association or any other body
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representing workers including its statutory obligations to inform and
consult appropriate representatives as required by law.
17.10 REDUNDANCIES
So far as the Vendor is aware there is (and in the case of France
there has not been over the past 5 years) no plan, scheme, commitment,
policy, custom or practice (whether legally binding or not) relating
to redundancy affecting any of the employees of the Target Group
Company more generous than the statutory redundancy requirements.
17.11 CHANGES SINCE ACCOUNTS DATE
Since the Accounts Date, no change has been made in (i) the rate of
remuneration, or the emoluments or pension benefits or other
contractual benefits, of any Senior Executive of the Target Group
Company or (ii) the terms of engagement of any such Senior Executive.
17.12 PAYMENT UP TO COMPLETION
All salaries and wages and other benefits of all employees of the
Target Group Company have, to the extend due, been paid or discharged
in full.
17.13 PAYMENTS ON COMPLETION
So far as the Vendor is aware none of the Senior Executives will
become entitled by virtue of their contract of employment (or other
formal or informal agreement) to any payment or enhancement in or
improvement to their remuneration, benefits or terms and conditions of
service only by reason of the execution of this agreement or of
completion of the sale and purchase under or pursuant to this
agreement.
17.14 HEALTH AND SAFETY
So far as the Vendor is aware no action has been taken by any
enforcing authority in relation to any actual or alleged breach by the
Target Group Company of any legal requirements relating to health and
safety and the Target Group Company are not in receipt of any claim by
an employee or past employee in relation to such breach and the Target
Group Company are not aware of any circumstances which may lead to
such action or claim.
17.15 The headcount reduction required to reduce actual employees to the
planned headcount set out in the business plan for December 2000 in
the Target Group Company operating in Germany (the "GERMAN TARGET
GROUP COMPANIES") is less than the total number of temporary, leased
or short term contract workers in the German Target Group Companies
whose contracts can be terminated on short notice with no cost and no
social plan, as illustrated below:
Actual employees end September 2000 (or whenever) 1,782
Planned headcount end December 2000 1,574
Headcount reduction to take place in October, 208
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November, December 2000 after closure of plant 3
Existing pool of temporary leased or short term contract 311
workers which can be terminated and short notice with no
cost and no social plan
18. PROPERTIES
18.1 ALL PROPERTIES
The Properties comprise all the property owned, used or occupied by
and all property rights vested in the Target Group and/or the relevant
Target Group Companies.
18.2 TITLE
The Target Group Company has good and marketable title to each of the
Properties set against its name in schedule 5 and is the legal and
beneficial owner thereof.
18.3 OCCUPATION
The Target Group Company is in sole and exclusive occupation (and is
entitled to sole and exclusive occupation) of the entirety of each
Property set out against its name in schedule 5 and no Property is, so
far as the Target Group Company and/or the Vendors are aware, subject
to any encumbrances which could materially inhibit the current use of
the relevant Property or its occupation or any use or occupation
currently intended by the Target Group Company.
18.4 RIGHTS
The Target Group Company has sufficient interest and right to entitle
it to occupy and use exclusively each Property set out against its
name in schedule 5 for its present use and enjoyment (and any use
currently intended by the Target Group Company) and there are
appurtenant to each Property all such rights and easements and other
matters reasonably necessary for such use and enjoyment and none of
the same are capable of withdrawal modification or termination by any
person (except for breach of the Target Group Company's obligation in
respect of a leasehold interest save where the general law of any
particular jurisdiction provides that Leases may be determined for
other reasons and such law mandatorily applies). The Target Group
Company has not received any notification from any third party
challenging its right to occupy any Property (set out against its name
in schedule 5) which it leases.
18.5 CONSENTS
The Properties benefit from and comply with all necessary consents
required for the occupation thereof for the purposes of the Target
Group Company's business and for the use to which each Property is
currently put and no such consents or approvals have been given on a
temporary or personal basis nor do any of them require removal at any
time of any works so authorised.
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18.6 ONEROUS MATTERS
There are no agreements or restrictions or other matters which are of
an unusual or onerous nature which would adversely affect the
occupation and use of the Properties their value or marketability.
18.7 OBLIGATIONS
So far as the Target Group Company and the Vendor are aware the Target
Group Company has duly and substantially performed in all material
respects in relation to the Property set against its name in schedule
5 and the conduct of the business of the Target Group Company therein
all obligations relating to such Property and the conduct of such
business whether to a landlord or to statutory or other public
authority or any other person and is not aware of any alleged material
breach of any such obligations.
18.8 DISPUTES
Neither the Target Group Company nor the Vendor is aware of any
outstanding current material dispute or complaint relating to any
Property set against the Target Group Company's name in schedule 5 or
the conduct of the Target Group Company's business therein.
18.9 UNUSUAL EXPENDITURE
Neither the Target Group Company nor the Vendor is aware of any
requirement (whether by a landlord a statutory or other public
authority or any other person) which would result in the Target Group
Company having to pay charges or outgoings (not being rent) of
material amount in excess of the sums currently paid in relation to
each Property set against its name in schedule 5 or in excess of usual
real estate rates and taxes.
18.10 CHANGE OF CONTROL
So far each as the Target Group Company and the Vendor are aware no
change of control of (or transfer of ownership or any interest in the
shares of the Target Group Company and/or any rights in them) requires
in relation to property any consent or authorisation from any party
and no such change of control or transfer will give rise to any right
of any person to terminate or curtail any interest in or connected
with any of the Properties or otherwise adversely affect the
Properties their use and enjoyment or the running of the businesses of
the Target Group Company provided that it is agreed that for the
purposes of this paragraph 18.10 the foregoing provisions shall be
subject to any general law of the jurisdiction in which Properties are
located which (i) provides that leases or consents may be terminated
for reasons other than breach of obligation and (ii) is of mandatory
application.
18.11 FURTHER TITLE ISSUES
(a) So far as the Target Group Company and the Vendor are aware the
particulars of the Properties shown in schedule 5 are true and
correct. The Target Group Company has not entered into any
agreement to acquire or dispose of any land or premises or any
interest therein nor has it entered into any agreements for
material construction, demolition or refurbishment of any
buildings or facilities.
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(b) Each Property is held free from any Encumbrance, lease,
sub-lease, tenancy, licence or right of occupation, rent charge,
exception, reservation, easement, quasi-easement, privilege,
pre-emption agreement, option or other encumbrance (or agreement
for any of the same) including without limitation in the case of
Properties in the United States any zoning or deed restriction
materially adversely affecting the use or occupation of the
Property, or its value or marketability
(c) The leases, sub-leases, tenancies, licences (or agreements for
any of the same) under which any of the Properties are held are
valid and subsisting against all persons.
18.12 MATTERS AFFECTING PROPERTIES
(a) None of the Properties is affected by any of the following
matters or is to the knowledge of the Target Group Company or the
Vendor likely to become so affected:
(i) any exception, reservation, right, covenant, restriction or
condition which is of an unusual nature or which affects or
might in the future affect the use of any of the Properties
for the purpose for which it is now used (the "CURRENT USE")
or any other use or enjoyment currently planned or
contemplated by the Target Group Company or which affects or
which could affect the value or marketability of any
Property but this warranty shall not apply (in the case of
properties located in Germany) to restrictions of use
deriving from covenants and restrictions customary and usual
in building permits and/or administrative permits and
administrative restrictions of the type referable to the
German Property in question;
(ii) any notice, order, demand, complaint, prosecution,
requirement or proposal of which the Target Group Company or
the Vendor have notice or of the Vendor or the Target Group
or any Target Group Company or the Vendor are aware made or
issued by or on behalf of any authority, agency or
department or body;
(iii) any outstanding material unusual claim or liability
(contingent or otherwise);
(iv) (save in respect of leasehold Properties) the requirement
for consent from any party to the encumbering of the
Properties or any of them.
(b) So far as the Target Group Company and the Vendor are aware, as
to each of the Properties there are no development works
redevelopment works or fitting out works outstanding.
(c) There are no restrictive covenants or provisions, orders
specifically affecting any Property, charges, restrictions,
agreements, conditions or other matters which preclude or limit
the use of any of the Properties except (in the case of Property
in Germany which comprises industrial plant) covenants
restrictions or conditions usually contained in building permits
and administrative restriction of industrial plant.
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(d) Any necessary or appropriate action to protect the interests of
each relevant Target Group Company has been taken in relation to
rent reviews and/or lease renewals and all appropriate time
limits have been complied with in all material respects and no
rent reviews are outstanding at the date hereof or exercisable
prior to Completion.
(e) In relation to any lease, sub-lease, tenancy or agreement for any
of the same under which the Target Group Company is the landlord:
(1) the rents collected have not exceeded the sums lawfully
recoverable;
(2) no forfeiture proceedings have been taken or are
contemplated;
(3) no notice has been served which is still outstanding;
(4) no works have been carried out which could give rise to a
claim against the Target Group or any Target Group Company
for compensation or which would have to be disregarded on
any rent review;
(5) all consents and conditions contained therein or relating
thereto have been observed and performed to date and all
necessary consents for the grant of the lease or other
instrument have been obtained; and
(6) brief details of all such leases, sub-leases, tenancies or
agreements for any of the same are set out at the end of
schedule 5 and such details are true and correct
(f) Where the interest in any of the Properties is leasehold (which
shall include any Properties held under a finance lease or credit
bail) there is no right for the landlord to determine the lease
(or finance lease or credit bail) except in the event of
non-payment of rent or other breach of covenant by the tenant.
(g) Provided that it is agreed that for the purposes of this
paragraph 18.12 the foregoing provisions shall be subject to any
general law of the jurisdiction in which Properties are located
which (i) provides that leases or consents may be terminated for
reasons other than breach of obligation and (ii) is of mandatory
application.
(h) In relation to any freehold property in the Czech Republic there
are so far as the Target Group Company and the Vendor are aware,
no claims or proceedings relating to restitution or whereby any
third party claims ownership of or an interest in that Property.
18.13 OUTSTANDING PROPERTY LIABILITIES
Except in relation to the Properties listed in schedule 5 and the
documents relating to them disclosed in the Data Room or disclosed in
writing by the Target Group Company's lawyers to the Buyer's lawyers
the Target Group Company has no material liabilities (actual or
contingent) arising out of or relating to land or premises or an
interest in land or premises, (including, without limitation,
leasehold premises sold, assigned or otherwise disposed of).
18.14 CHINA
In relation to the Properties in China the landlords thereof had good
and sufficient title to grant the leases thereof and the Target Group
Company is legally entitled to occupy the relevant Property.
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18.15 BOUNDARIES
The buildings and improvements of each Property in the United States
are located within the legal boundary lines of each Property are not
in material violation of applicable setback requirements, zoning laws
and ordinances and none of the Properties or buildings or improvements
thereon are subject (in the case of Properties in the United States)
to "permitted non-conforming use" or "permitted non-conforming
structure" classifications and do not encroach on any easement that
may burden the Property.
19. PENSIONS
19.1 PENSIONS ARRANGEMENTS DISCLOSED
Save under the Pension Schemes and the state pension schemes
(together, the "BENEFIT SCHEMES"), the Target Group Company is under
no obligation to provide any Applicable Benefit to or in respect of
any employee or former employee of the Target Group Company or its
subsidiaries (a "RELEVANT EMPLOYEE") or for any widow, widower,
spouse, child or dependant of any Relevant Employee. For the purposes
of this paragraph 19, "APPLICABLE BENEFIT" means any pension, lump
sum, gratuity, or other like benefit given or to be given:
(A) on retirement or on death; or
(B) in connection with past employment, after retirement or on or
after death; or
(C) in anticipation of or in connection with retirement or death.
19.2 EX GRATIA PAYMENTS
The Target Group Company is not making, and will not before Completion
make, any voluntary or ex gratia payments of any Applicable Benefits
to or in respect of any Relevant Employee.
19.3 NO ASSURANCES ETC.
None of the companies in the Seller's Group or the Target Group:
(A) have (except as disclosed in the Disclosure Letter) given any
undertaking or assurance (whether legally enforceable or not) to
any Relevant Employee or to any widow, widower, child or
dependant of any Relevant Employee as to the continuance,
introduction, improvement or increase of any Applicable Benefit;
or
(B) is paying or has in the last two years paid any Applicable
Benefit (except under the Benefit Schemes) to any Relevant
Employee or to any widow, widower, child or dependant of any
Relevant Employee.
19.4 DISCLOSURE OF DOCUMENTS
In respect of each Pension Scheme, the Buyer or its advisers have been
supplied with the documentation governing such Pension Scheme. Such
documentation and all material details
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relating to benefits and contributions of the Relevant Employees under
the Pension Schemes and the obligations of employers participating in
the Pension Schemes are disclosed in the Disclosure Letter.
19.5 AUGMENTATION
Except as disclosed in the Disclosure Letter, no power under the
Pension Schemes has been exercised in relation to any Relevant
Employee who is in employment with any company within the Seller's
Group or with the Target Group Company:
(A) to provide terms of membership of the Pension Schemes (whether as
to benefits or contributions) which are different from those
generally applicable to the members of the Pension Schemes; or
(B) to provide any benefits which would not but for the exercise of
that power have been payable under the Pension Schemes; or
(C) to augment any benefits under the Pension Schemes.
19.6 PAYMENT OF CONTRIBUTIONS AND EXPENSES
Contributions to the Benefit Schemes are not paid in arrears and all
contributions and other amounts which have fallen due for payment have
been paid. The Target Group Company has paid all the expenses of the
Benefit Schemes for which it is liable.
19.7 LEGAL COMPLIANCE
The Pension Schemes are in all material respects administered in
accordance with and comply with applicable legislation and
requirements.
19.8 SELLER'S VENDORS' AND TARGET GROUP COMPANY'S OBLIGATIONS
The Vendors and the Target Group Company have observed and performed
those provisions of the Benefit Schemes which apply to them.
19.9 CLAIMS AND LITIGATION
No claim has been made by or in respect of any Relevant Employee
against the Vendor or the trustees of the Pension Schemes which
remains outstanding (other than routine claims for benefits and
enquiries). So far as the Vendor and the Target Group Company are
aware, there are no facts likely to give rise to any such claim.
19.10 NO EARLY RETIREMENT PROGRAMMES
There are no special early retirement programmes in relation to any of
the employees of the Target Group Company other than as disclosed in
the Disclosure Letter.
19.11 EMPLOYEES OF BEIJING WANYUAN-DRAFTEX SEALING PRODUCTS CO LTD
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In relation to employees of Beijing Wanyuan-Draftex Sealing Products
Co Ltd, the Vendor warrants that Beijing Wanyuan-Draftex Sealing
Products Co Ltd is not liable to make payment of any Applicable
Benefits directly to such employees.
19.12 EMPLOYEES OF THE GERMAN TARGET GROUP COMPANIES
In relation to employees of the Target Group Companies incorporated
and Operating in Germany (the "GERMAN TARGET GROUP COMPANIES"), the
Vendor and the Target Group Company warrant that the Pension Schemes
(insofar as such schemes are applicable to the employees of the German
Target Group Companies) have been validly substituted (if substitution
has occurred) for any other pension scheme in which the employees of
the German Target Group Companies have at any time participated.
20. TAXATION
20.1 RETURNS AND DISPUTES
The Target Group Company has in the six years (or ten years in the
case of the PRC Company the Czech Company and Draftex Optimit SRO)
prior to the date hereof made all returns and supplied all information
and given all notices to the relevant Taxation Authority as required
by law within any requisite period and so far as the Seller is aware
all such returns and information and notices are correct and accurate
in all material respects and are not the subject of any dispute and so
far as the Seller is aware there are no facts or circumstances likely
to give rise to or be the subject of any such dispute.
20.2 Each Target Group Company has in all material respects in the six
years (or ten years in the case of the PRC Company and the Czech
Company and Draftex Optimit SRO) prior to the date hereof paid all
Taxes due and has not been liable to any material penalty or interest
in respect of any such Taxes and the Vendor is not aware that there
are or have been any circumstances which would give rise to any such
penalty or interest.
20.3 ACCOUNTS
The Accounts make proper provision or reserve in respect of any period
ended on or before the Accounts Date for all tax assessed or liable to
be assessed on the Target Group Company or for which it is accountable
at the Accounts Date or in respect of which it is liable to make
payment to any member of the Vendor's Group under any Tax sharing
arrangements.
20.4 SECONDARY LIABILITY
So far as the Vendor is aware, no transaction or event has occurred in
consequence of which the Target Group Company is or may be held liable
for any Tax or deprived of relief or allowances otherwise available to
it in consequence of any Tax or may otherwise be held liable for or to
indemnify any person (other than any Target Group Company) in respect
of any Tax, where some other company or person is or may become
primarily liable for the Tax in question (whether by reason of any
such other company being or having been a member of the same group of
companies or otherwise).
20.5 PAYROLL TAXES
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So far as the Vendor is aware, the Target Group Company has in all
material respects properly operated the relevant system for the
deduction of payroll taxes.
20.6 CAPITAL GAINS AND CAPITAL ALLOWANCES
The Target Group Company has sufficient records to be able to
calculate as well as any justification for proper deferral of any
capital gain, where applicable any liability to corporate tax on gains
(whether recognised as an income or capital receipt) arising as a
result of the disposal of any capital asset as well as any
justification for proper deferral of any capital gain, where
applicable.
20.7 VALUE ADDED TAX
(a) The Target Group Company is a registered taxable person in each
jurisdiction it carries on business and is required to be
registered for the purpose of the VAT Legislation and has been
treated as a member of a group of companies for such purpose. So
far as the Vendor is aware no circumstances exist whereby the
Target Group Company would or might become liable for the value
added tax as an agent or otherwise;
(b) So far as the Vendor is aware the Target Group Company has
complied in all material respects with the requirements and
provisions of the VAT Legislation and has made and maintained
accurate and up to date records invoices accounts and other
documents required by or necessary for the purposes of the VAT
Legislation and each Target Group Company has at all times
punctually paid and made all payments and returns required
thereunder.
20.8 CUSTOMS DUTY
So far as the Vendor is aware, the Target Group Company has paid all
customs duties payable and was made and maintained up-to-date records
in respect of customs duties.
20.9 STAMP DUTY
So far as the Vendor is aware all documents in the possession of the
Target Group Company in the enforcement of which the Target Group
Company is or may be interested have been duly stamped, registered and
filed with the competent Tax Authority in due course.
20.10 FOREIGN ELEMENT
So far as the Vendor is aware, the Target Group Company has always
been resident in the territory in which it was incorporated and has
never been resident in any other territory or treated as so resident
for the purposes of any double Tax agreement.
20.11 WITHHOLDINGS
Each Target Group Company has deducted Tax from all material payments
made where required by applicable legislation and accounted to the
relevant taxation authority for Tax so deducted.
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SCHEDULE 4
VENDOR PROTECTION CLAUSES
1. Each of the Vendors and Seller hereby undertake to and for the benefit
of the Buyer that they will not make or pursue any claim or action
howsoever arising against the Target Group Companies or any of the
directors, employees, agents or advisers of the Target Group Companies
in respect of any loss or liability the Vendors may incur pursuant to
the Warranties (or any other document referred to herein) or otherwise
in connection with the sale of the Acquisition Shares to the Buyer or
the preparation of the Disclosure Letter provided that the Seller or
the Vendors shall not be precluded from bringing any such claim
against the same in respect of fraud or willful concealment.
2. Save in the case of fraud or fraudulent concealment by the Vendor, the
Vendors shall be under no liability in respect of any claim under the
Warranties or the Tax Deed and any such claim shall be wholly barred
and unenforceable unless written notice of such claim setting out
reasonable details as are available to the Buyer including as far as
reasonably practicable an estimate of the maximum amount of the claim
shall have been served upon the Seller (on behalf of the relevant
Vendor) by the Buyer promptly after it becomes likely that a claim
will be made, and in any event:-
(a) in the case of a claim under the Warranties other than the
Warranties relating to Tax, by not later than 5.00 p.m. on the 21
month anniversary of the date of Completion; and
(b) in the case of a claim under the Warranties relating to Tax or
the Tax Deed by not later than 5.00 p.m. on the date 6 months
after the date on which the relevant statutory limitation for
claims by a Taxation Authority expires;
(c) in the case of a claim under the indemnity at clause 4.8(c) by
not later than 5.00pm on the fifth anniversary of the date
hereof,
and the liability of the Vendor for any claim specified in such notice
shall absolutely determine and cease (unless the amount payable in
respect of the relevant claim has been agreed by the Seller within six
months of the date of such written notice) if legal proceedings have
not been instituted in respect of such claim by the due service of
process on the relevant Vendor within six months of the date of such
written notice; or
2.2 For the purpose of this paragraph 2 legal proceedings shall not be
deemed to have been commenced unless they shall have been properly
issued and validly served upon the relevant Vendor.
2.3 Save in the case of fraud or fraudulent concealment the Vendor shall
be under no liability in respect of any claim under the Warranties,
the indemnity at clause 4.8(c) or the Tax Deed:-
(a) where the liability of the Vendor in respect of that claim (and
all other claims arising out of the same subject matter) would
(but for this paragraph) have been less than (Euro)50,000; or
(b) unless and until and only to the extent that the liability in
respect of that claim (not being a claim for which liability is
excluded under paragraph 22.3(a) above) when
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aggregated with the liability of all of the Vendors in respect of
all other such claims shall exceed (Euro)1,500,000.
2.4 (a) Save in the case of fraud or fraudulent concealment the aggregate
maximum liability of the Vendors (and the Seller's Group) in
respect of all claims under the Indemnities and the Warranties
and the Tax Deed shall not in any circumstances exceed (Euro)
180,000,000.
(b) Without prejudice to the generality of the provisions of this
schedule, the Vendors (and any member of the Seller's Group)
shall not be liable in respect of any liability under the Tax
Warranties (a "TAX WARRANTY CLAIM"):-
(i) where the Tax Warranty Claim in question would (but for this
paragraph) have been less than (Euro)50,000 per claim;
(ii) unless and until and only to the extent that the liability
in respect of that Tax Warranty Claim (not being a Tax
Warranty Claim for which liability is excluded under this
schedule and in particular under paragraph 2.4(b)(i) above)
when aggregated with the liability of the Vendors (and the
Seller) in respect of all other such Tax Warranty Claims and
all claims under the Tax Deed exceeds (Euro)5,000,000;
2.5 The Vendors shall be under no liability in respect of any claim under
the Warranties if the facts or circumstances giving rise thereto are
fairly disclosed in the Disclosure Letter, or provided for or
otherwise known to be exceptions under the terms of this agreement or
are otherwise actually known (but subject to the qualification in
paragraph 2.14) to any member of the Buyer's Group due diligence team,
comprising T Hall, J Xxxx, Y Xxxxx, E Xxxxxx, G Xxxxxxxx, M
Xxxxxxxx-Xxxx, C Xxxxxx, M Xxxxxx, W Xxxxxxxx and B Xxxx (the "BUYER'S
DUE DILIGENCE TEAM") at the date hereof.
2.6 No liability (whether in contract, tort or otherwise) shall attach to
the any of the Vendors in respect of any claim under the Warranties to
the extent that:-
(a) the claim or the events giving rise to the claim would not have
arisen but for an act, omission or transaction of the Buyer's
Group otherwise than in the ordinary and proper course of the
business of the Target Group as at present carried on which could
reasonably have been avoided and which the Buyer was aware (or
reasonably should have been aware) could give rise to a claim or
which would not have arisen but for any claim, election or
surrender or disclaimer made or omitted to be made or notice or
consent given or omitted to be given by the Buyer's Group under
the provisions of any statutes relating to Tax;
(b) the claim is based upon a liability which is contingent only,
unless and until such contingent liability becomes an actual
liability save that this paragraph 2.6(b) shall not prevent
liability attaching to the Vendor where the claim, albeit
contingent, was notified within the time periods referred to in
paragraph 2(a) or 2(b) but becomes an actual liability outside
those times;
(c) provision or reserve in respect of the matter giving rise to the
claim shall have been made in the Completion Accounts;
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(d) the claim occurs wholly or partly out of or the amount thereof is
increased as a result of:-
(i) any change in the accounting principles or practices of the
Buyer's Group introduced or having effect after the date of
this agreement unless the same is introduced to bring the
accounting principles and practices into line with generally
accepted accounting principles and practices in [the UK] in
relation to a business of the type carried on by the Buyer's
Group; or
(ii) any increase in the rates of taxation made after the date
hereof; or
(iii) any change in law or regulation or in its interpretation or
administration by any relevant court or by any other fiscal,
monetary or regulatory authority (whether or not having the
force of law) first published after the date hereof;
(e) the loss or damage giving rise to the claim is recoverable by the
Buyer's Group under any policy of insurance or would have been so
recoverable but for any change in the terms of insurance since
the date of this agreement;
(f) the claim relates to a claim or liability for taxation and would
not have arisen but for any winding-up or cessation after
Completion of any business or trade carried on by the Buyer's
Group except to the extent that such winding-up or cessation is
occasioned by the facts or circumstances giving rise to one or
more claims under the Warranties;
(g) the claim or the events giving rise to the claim would not have
arisen but for an act, omission or transaction carried out at the
written request of or with the written consent of the Buyer prior
to Completion.
2.7 In assessing any liabilities, damages or other amounts recoverable by
the Buyer as a result of any claim under the Warranties against the
Vendor(s) there shall be taken into account any benefit accruing to
the Buyer's Group including, without prejudice to the generality of
the foregoing, the net present value of any tax relief obtained by the
Buyer's Group and any amount by which any taxation for which the
Buyer's Group is or may be liable to be assessed or accountable is
reduced or extinguished, arising directly or indirectly in consequence
of the matter which gives rise to such claim.
2.8 No liability will arise and no claim may be made under any of the
Warranties to the extent that the matter giving rise to such claim is
remediable unless within the period of 30 days following the Buyer
becoming aware of such matter the Buyer shall have given written
notice thereof to the Seller and such matter shall not have been
remedied to the reasonable satisfaction of the Buyer within the period
of 30 days following the date of service of such notice.
2.9 Paragraph 2.10 shall apply in circumstances where:-
(a) any claim is made against the Buyer's Group which may give rise
to a claim by the Buyer against the Seller (on behalf of the
relevant Vendor) under the Warranties other than the Warranties
applying to Taxation (the "GENERAL WARRANTIES"); or
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(b) the Buyer's Group is or may be entitled to make recovery from
some other person any sum in respect of any facts or
circumstances by reference to which the Buyer has or may have a
claim against the Seller (on behalf of the relevant Vendor) under
the General Warranties; or
(c) the Seller or the Vendor shall have paid to the Buyer an amount
in respect of a claim under the General Warranties and subsequent
to the making of such payment the Buyer's Group becomes or shall
become entitled to recover from some other person a sum which is
referable to that payment.
For the avoidance of doubt any claim under any Warranty relating to
Tax (a "TAX WARRANTY") shall be governed by clause 7 of the Tax Deed.
2.10 The Buyer shall and shall procure that each member of the Buyer's
Group shall:-
(a) (subject to the Buyer being indemnified to its reasonable
satisfaction by the Seller or by a member of the Seller's Group
against all reasonable costs and expenses which may properly be
incurred by reason of such action) promptly and diligently take
all such action as the Seller may reasonably request (including
but not limited to the institution of proceedings and the
instruction of professional advisers approved by the Seller to
act on behalf of the Buyer or the Buyer's Group) to avoid,
dispute, resist, compromise, defend or appeal against any such
claim against the Buyer's Group as is referred to in paragraph
2.922.9 or to make such recovery by the Buyer's Group as is
referred to in paragraph 2.9(a) or 2.9(c) as the case may be, in
accordance with the reasonable instructions of the Seller and
giving reasonable consideration to all representations made to
the Seller in relation thereto; and
(b) not settle or compromise any liability or claim to which such
action is referable without the prior written consent of the
Seller which consent shall not be unreasonably withheld or
delayed; and
(c) in the case of paragraph 2.9(c) only, promptly repay to the
Seller an amount equal to the amount so recovered or, if lower,
the amount paid by the Seller or the Vendor to the Buyer
Provided that paragraphs 2.10(a) and 2.10(b) only shall not apply
where in the reasonable view of the Buyer any material adverse effect
on the business or commercial relationships of a member of the Target
Group and a material customer or supplier of the Target Group may be
directly caused by acting in accordance with those clauses.
2.11 The Buyer shall as soon as reasonably practicable:-
(a) inform the Seller (on behalf of the relevant Vendor) in writing
of any fact, matter, event or circumstance which comes to its
notice or to the notice of the Buyer's Group whereby it appears
that the Seller (on behalf of the relevant Vendor) is or may be
liable to make any payment in respect of any claim under the
General Warranties or whereby it appears the Buyer's Group shall
become or may become entitled to recover from some other person a
sum which is referable to a payment already made by the Vendor in
respect of such a claim; and
-82-
86
(b) thereafter keep the Seller (on behalf of the relevant Vendor)
fully informed of all material developments in relation thereto;
and
(c) provide all such information and documentation (no matter how it
is recorded or stored) as the Seller (on behalf of the relevant
Vendor) shall reasonably request in connection therewith and also
in connection with any proceedings instituted by or against the
Buyer's Group under these clauses.
2.12 The only remedies available to the Buyer (and, where appropriate, to
its Related Persons) in respect of this agreement together with any
other documents referred to in this agreement (the "TRANSACTION
DOCUMENTS") are damages for breach of contract (subject to the
limitations set out in this agreement and the Tax Deed) and, for the
avoidance of doubt, neither it (nor its Related Persons, where
appropriate) have any right to rescind or terminate any Transaction
Documents (save as provided herein) either for breach of contract or
for negligent or innocent misrepresentation or otherwise PROVIDED THAT
the provisions of this paragraph 2.12 shall not exclude any liability
which any of the parties or, where appropriate, their Related Persons
would otherwise have to any other party or, where appropriate, to any
other party's Related Persons or any right which any of them may have
to rescind this agreement in respect of any statements made
fraudulently by any of them prior to the execution of this agreement
or any rights which any of them may have in respect of fraudulent
concealment by any of them.
2.13 In the event that the Seller at any time after the date hereof shall
wish to take out insurance against its liability hereunder the Buyer
undertakes to provide such information as the prospective insurer may
reasonably require before effecting such insurance.
2.14 The Buyer hereby warrants that the Buyer's Due Diligence Team has no
actual knowledge of any fact which might lead to claims against the
Vendor under the Warranties, the Seller acknowledging on behalf of
each Vendor that knowledge of a fact or circumstance solely through
its inclusion in any draft of the disclosure letter would not provide
a defence to any action taken by the Buyer or qualify, limit or
restrict in any manner any claim made by the Buyer, for breach of any
of the Warranties unless the Disclosure Letter also contained a
reference to that fact or circumstance.
2.15 Nothing in this agreement shall or shall be deemed to relieve the
Buyer of any common law or other legal duty to mitigate any loss or
damage incurred by it.
2.16 Any liability of the Vendor in respect of any claim under the
Warranties which is based upon or referable to:
(a) a shortfall, insufficiency or reduction of earnings, revenues or
profits (whether or not consolidated, or before or after tax or
extraordinary, exceptional or non-recurring items) of the Target
Group; or
(b) an adverse effect on any such earnings, revenues or profits
arising in each case by virtue of the subject matters of the claim
shall not exceed the amount of such shortfall, insufficiency,
reduction or adverse effect which has occurred at the date of such
claim.
-83-
87
-84-
88
SCHEDULE 5
PART 1
THE PROPERTIES
DRAFTEX
-------
------------------------ -------------------------------- -------------- --------------------------- -------------
COMPANY ADDRESS TENURE LANDLORD SQM.
------------------------ -------------------------------- -------------- --------------------------- -------------
Draftex Buropark Hansastem Leasehold Iduna Vereinigte
International Xxxxx-Xxxxxxxx-Xxx. 00 Xxxxxxxxxxxxxxxxxx XX Fur 832
Worldwide 40547 Dusseldorf Xxxxxxxx Handel und
Headquarters Gewerbe
Lessor Draftex Neu Xxxxxxxxxxxx 00-00
International GmbH & 00000 Xxxxxxx
Co KG
------------------------ -------------------------------- -------------- --------------------------- -------------
Draftex Grefrath, Industrie 2 Leasehold Draftex International 780
International GmbH & Co. KG.
GmbH & Co KG
------------------------ -------------------------------- -------------- --------------------------- -------------
Draftex Plant II Freehold, 20,760
International GmbH & 41747 Viersen encumbered
Co XX Xxxxxxxxxxx 00, Xxxxxxxxxxx with land
charges in
the total
amount of DM
6 million
------------------------ -------------------------------- -------------- --------------------------- -------------
Draftex Plant IV Freehold 49,181
International GmbH & 47929 Grefrath,
Co KG Xxxxxxxxxxx 00
------------------------ -------------------------------- -------------- --------------------------- -------------
Draftex Plant VI Freehold 27,821
International GmbH & 41747 Viersen
Co KG Xxxxxxxxxxxxxxxx 00/00
------------------------ -------------------------------- -------------- --------------------------- -------------
DIETC Xxxxxxxxxx Xxxxxxx 00 Leasehold Company 13,310
41179 Monchengladbach Schafhorst,
Monchengladbach
------------------------ -------------------------------- -------------- --------------------------- -------------
Draftex Optimit s.r.o. Vitouska 391 Leasehold Semperflex Optimit a.s. 12,892
000 00 Xxxx
Xxxxx Xxxxxxxx
------------------------ -------------------------------- -------------- --------------------------- -------------
Draftex International Mistecka 1111 Leasehold Tatra Pribor a.s 21,963
(Pribor) s.r.o. 000 00 Xxxxxx Xxxxxx
Xxxxx Xxxxxxxx Mistecka 111
Czech Republic
-------------------------------- -------------- --------------------------- -------------
Mistecka 1111 Freehold Purchase Agreement signed 4,870
742 58 Pribor on 15 September 2000.
Czech Republic Currently awaiting
registration of the title
------------------------ -------------------------------- -------------- --------------------------- -------------
SLIC Corvol SA Grande Rue Freehold 6,200
58460 Corvol L'Orgueilleux
------------------------ -------------------------------- -------------- --------------------------- -------------
SLIC Gruchet SA Lieudit "xx XxxxxXxx", Freehold Auxicomi
------------------------ -------------------------------- -------------- --------------------------- -------------
-85-
89
------------------------ -------------------------------- -------------- --------------------------- -------------
COMPANY ADDRESS TENURE LANDLORD SQM.
------------------------ -------------------------------- -------------- --------------------------- -------------
76170 Saint Nicolas de la Subject to a 27-31 avenue du General 10,870
Taille finance lease XXXXXXX
00000 Xxxxxx Xxxxxx
Xxxxxx
------------------------ -------------------------------- -------------- --------------------------- -------------
Snappon XX Xxx Xxxxxx Xxxxxxx Freehold 16,300
28011 Chartres Cedex
------------------------ -------------------------------- -------------- --------------------------- -------------
Draftex International Rambla de Catalunya, 105 Leasehold Fincas Simeon Gestion de Approx. 150
Iberica SA Barcelona, Patrimonios
Spain
------------------------ -------------------------------- -------------- --------------------------- -------------
Draftex International Poligono Xxxxx xx Xxxxxx Freehold 51,710
Iberica SA C./dels Mercaders
9-11 E-08184 Xxxxx xx Xxxxxxxxx (00,000
Xxxxxxxxx built)
------------------------ -------------------------------- -------------- --------------------------- -------------
Draftex International Polgono Industrial de Valls Freehold 37,229
Iberica SA Xxxxxx Xxxxxxx
X/x 00000 Xxxxx Xxxxxxxxx (24,185
Spain built)
------------------------ -------------------------------- -------------- --------------------------- -------------
Draftex Inc. 0000 Xxxxxx Xxxx Freehold 450,000
Salisbury (Sq ft)
Xxxxx Xxxxxxxx, XX 00000
XXX
------------------------ -------------------------------- -------------- --------------------------- -------------
Draftex Inc. Suite 206 Leasehold Ericar Co. 5,365
00000 Xxxxx Xxxxx (Xx xx)
Xxxx
Xxxxxxx Xxxxxx
Michigan
------------------------ -------------------------------- -------------- --------------------------- -------------
Xxxxxxx Xx. 0 Xxx Xx Xxxx Xxx Xxxx Leasehold CALT 14740
Wanyuan Feng Tai District No. 1 Xxx Xx Xxxx Men Road
Draftex Sealing Beijing PO Box 9200-58 Feng Tai District
Products Company Post Xxxx 00 0000 Xxxxxxx XX Xxx 0000-00
Limited Post Code 10 0076
------------------------ -------------------------------- -------------- --------------------------- -------------
-86-
90
SCHEDULE 5
PART 2
THE EXCLUDED PROPERTIES
------------------------ ------------------------------- ------------- ----------------------------- ------------
COMPANY ADDRESS TENURE LANDLORD SQM.
------------------------ ------------------------------- ------------- ----------------------------- ------------
Draftex Plant I Freehold 18,075
International GmbH 41748 Viersen
& Co KG Am Schluff 18-20
------------------------ ------------------------------- ------------- ----------------------------- ------------
Draftex International Plant III Freehold 43,059
GmbH & Co KG 41747 Viersen
Xxxxxxxxxxxxxxxx 00
------------------------ ------------------------------- ------------- ----------------------------- ------------
Draftex Plant V Freehold
International GmbH & 41747 Viersen
Co KG Xxxxxxxxxxx Xxxxxxx 00
------------------------ ------------------------------- ------------- ----------------------------- ------------
SLIC Gruchet SA 00 xxx xx Xxxxxxx X.X. 00. Freehold 10,200
76210 Gruchet le Valasse
------------------------ ------------------------------- ------------- ----------------------------- ------------
SUB-LET PROPERTIES
--------------- ------------- --------- ---------------- ----- ----------------- ----------- -------------------
LESSOR LESSEE DATE OF ADDRESS SQ.M FEES TERM NOTICE PERIOD
LEASE
--------------- ------------- --------- ---------------- ----- ----------------- ----------- -------------------
Draftex Gebr. 15/12/99 2 store houses 600 DM5,181.72 01.02.2000- the lease will be
International Xxxxxxxxx "Industrie- 180 (DM4,467 net + 31.05.2005 extended by
GmbH & Co XX XxxX xxxxxxx 0, DM714.72 VAT) further periods
Grefrath" of five years
unless the lease
is terminated six
months prior to
the end of the
contractual term
--------------- ------------- --------- ---------------- ----- ----------------- ----------- -------------------
Draftex Xx Xxxxx 27/06/91 parking area 20 DM50 plus VAT Indefinite 1 month to the
International Kreuels of Plant 1 end of each
GmbH & Co. KG Oberrahser- calendar month
strasse, Viersen
--------------- ------------- --------- ---------------- ----- ----------------- ----------- -------------------
-87-
91
SCHEDULE 6
[Intentionally blank]
-88-
92
SCHEDULE 7
PRO FORMA COMPLETION ACCOUNTS
FOR INFORMATION ONLY
------------------------------------------------------------------------------------------------------------------------
31/12/1999 30/06/2000
SEALS TOTAL AS DEFINED AS DEFINED
ACTUAL ADJUSTMENTS IN SPA ACTUAL ADJUSTMENTS IN SPA
Balance Sheet
EURO 000
------------------------------------------------------------------------------------------------------------------------
BALANCE SHEET
Stock & WIP 38,687 38,687 39,081 39,081
Trade debtors 49,395 49,395 58,267 58,267
Other debtors 10,821 10,821 7,796 7,796
Group trade debtors 52,068 52,068 44,924 44,924
------------------------------------------------------------------------------------------------------------------------
Trade creditors (52,430) (52,430) (38,658) (38,658)
Current taxation 5,890 (10,806) (4,916) (331) (7,435) (7,766)
Other creditors (24,735) (24,735) (33,151) (33,151)
Group trade creditors (29,166) (29,166) (17,805) (17,805)
------------------------------------------------------------------------------------------------------------------------
Net current assets 50,529 (10,806) 39,723 60,123 (7,435) 52,688
Fixed assets 226,079 226,079 228,186 228,186
Fixed assets creditors- external (4,349) (4,349) (1,914) (1,914)
Fixed assets creditors- group 42 42 (814) (814)
Intangibles (47) (47) (66) (66)
Goodwill 0 0 0 0
Other non current assets 259 259 288 288
Provisions (16,073) (16,073) (93) (93)
Other non current liabilities (8,833) (8,833) (10,940) (10,940)
less tax
Taxation (greater than) 1 year 1,265 (1,265) 0 0 0 0
Deferred taxation (4,689) (4,689) (4,645) (4,645)
------------------------------------------------------------------------------------------------------------------------
Total assets less liabilities 244,183 (12,071) 232,112 270,125 (7,435) 262,690
------------------------------------------------------------------------------------------------------------------------
Share capital 66,365 66,365 66,593 66,593
Reserves 29,163 (12,071) 17,092 26,014 (7,435) 18,579
Net borrowings / (cash) (1,844) (1,844) (1,404) (1,404)
Group loans 150,499 150,499 178,921 178,921
------------------------------------------------------------------------------------------------------------------------
AGREED CAPITAL EMPLOYED 244,183 (12,071) 232,112 270,125 (7,435) 262,690
------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
RESERVES
Share premium 18 18 18 18
Revaluation 5,424 5,424 5,745 5,745
Exchange differences (277) (277) (282) (282)
Revenue- C Year - A/c no 30000 11,280 11,280 (477) (477)
Revenue- Other - A/c no 95000 12,718 (12,071) 647 21,010 (7,435) 13,575
---------------------------------------------------------------------------------
Total reserves 29,163 (12,071) 17,092 26,014 (7,435) 18,579
---------------------------------------------------------------------------------
As per balance sheet above 29,163 (12,071) 17,092 26,014 (7,435) 18,579
---------------------------------------------------------------------------------
Difference 0 0 0 0 0 0
---------------------------------------------------------------------------------
NET BORROWINGS / (CASH)
(Cash)/overdrafts (19,131) (19,131) (16,431) (16,431)
(Cash investments) 0 0 0 0
Loans (less than) 1 year 12,341 12,341 9,965 9,965
Loans (less than) 1 year 4,945 4,945 5,062 5,062
---------------------------------------------------------------------------------
Total (1,844) 0 (1,844) (1,404) 0 (1,404)
---------------------------------------------------------------------------------
As per balance sheet above (1,844) 0 (1,844) (1,404) 0 (1,404)
---------------------------------------------------------------------------------
Difference 0 0 0 0 0 0
---------------------------------------------------------------------------------
Finance leases included within 2,643 2,643 2,550 2,550
LOANS
---------------------------------------------------------------------------------
GROUP LOANS
Xxxxx Group 20,510 20,510 156,500 156,500
Other Group loans 129,989 129,989 22,421 22,421
---------------------------------------------------------------------------------
Total 150,499 0 150,499 178,921 0 178,921
---------------------------------------------------------------------------------
As per balance sheet above 150,499 0 150,499 178,921 0 178,921
---------------------------------------------------------------------------------
Difference 0 0 0 0 0 0
---------------------------------------------------------------------------------
-89-
93
AT 31 DECEMBER 1999
SEALS TOTAL Exchange rates versus EURO:
DM EURO DM PESETA CZK CZK FF FF FF
Balance Sheet 1.960 1.000 1.960 166.400 35.994 35.994 6.560 6.560 6.560
TOTAL
Euro 000 TOTAL KG DIETC WWHQ IBERICA OPTIMIT OPT - MI FRANCE SNAPPON GRUCHET
----------------------------------------------------------------------------------------------------------------------------------
BALANCE SHEET
Stock & WIP 38,687 14,471 0 0 5,086 1,856 0 6,481 2,701 2,502
Trade debtors 49,395 20,059 0 0 9,146 1,206 0 151 (90) 163
Other debtors 10,821 2,336 0 0 677 177 0 3,129 1,493 930
Group trade debtors 52,068 8,028 0 0 7,022 314 0 36,381 16,719 14,857
----------------------------------------------------------------------------------------------------------------------------------
Trade creditors (52,430) (12,582) 0 0 (17,228) (1,247) 0 (12,056) (5,941) (4,083)
Current taxation 5,890 (2,052) 0 0 (2,455) (449) 0 1,529 0 1,419
Other creditors (24,735) (12,538) 0 0 (1,276) (430) (0) (5,451) (3,387) (1,679)
Group trade (29,166) (3,160) 0 0 (518) (1,707) 0 (13,858) (6,288) (5,913)
creditors
----------------------------------------------------------------------------------------------------------------------------------
Net current assets 50,529 14,563 0 0 453 (280) (0) 16,305 5,208 8,196
Fixed assets 226,079 74,844 0 0 35,935 9,285 0 26,136 10,480 12,091
Fixed assets (4,349) (4,113) 0 0 0 (108) 0 (129) (37) (63)
creditors- external
Fixed assets 42 (827) 0 0 869 0 0 0 0 0
creditors- group
Intangibles (47) 0 0 0 0 (47) 0 0 0 0
Goodwill 0 0 0 0 0 0 0 0 0 0
Other non current 259 6,421 0 0 0 94 0 9 0 0
assets
Provisions (16,073) (15,136) 0 0 0 0 0 (122) 0 (122)
Other non current (8,833) 0 0 0 0 0 (1,460) (3,455) (1,130) (1,440)
liabilities less tax
Taxation greater than
1 year 1,265 0 0 0 0 0 0 1,265 1,265 0
Deferred taxation (4,689) 0 0 0 (1,279) (262) 0 0 0 0
----------------------------------------------------------------------------------------------------------------------------------
TOTAL ASSETS LESS 244,183 75,752 0 0 35,977 8,682 (1,460) 40,009 15,787 18,663
LIABILITIES
----------------------------------------------------------------------------------------------------------------------------------
Share capital 66,365 30,612 0 0 20,701 28 (7) 7,825 4,573 1,651
Reserves 29,163 25,053 0 0 26,412 5,520 (1,453) 14,908 1,907 6,859
Net borrowings/ (1,844) 102 0 0 (8,073) (158) 0 2,027 47 2,630
(cash)
Group loans 150,499 19,985 0 0 (3,063) 3,293 0 15,248 9,260 7,522
----------------------------------------------------------------------------------------------------------------------------------
Capital employed 244,183 75,752 0 0 35,977 8,682 (1,460) 40,009 15,787 18,663
----------------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------------
RESERVES
Share premium 18 0 0 0 18 0 0 0 0 0
Revaluation 5,424 0 0 0 1,882 0 0 3,304 2,444 668
Exchange differences (277) 0 0 0 0 0 0 1 0 0
Revenue- C Year - 11,280 22,288 0 0 5,015 2,171 (604) (2,370) (1,822) (714)
A/c no 30000
----------------------------------------------------------------------------------------------------------------------------------
Revenue- Other - A/c 12,718 2,765 0 0 19,497 3,349 (849) 13,973 1,285 6,905
no 95000
--------------------------------------------------------------------------------------------------------
Total reserves 29,163 25,053 0 0 26,412 5,520 (1,453) 14,908 1,907 6,859
--------------------------------------------------------------------------------------------------------
As per balance sheet 29,163 25,053 0 0 26,412 5,520 (1,453) 14,908 1,907 6,859
above
--------------------------------------------------------------------------------------------------------
Difference 0 0 0 0 0 0 0 0 0 0
--------------------------------------------------------------------------------------------------------
NET BORROWINGS /
(CASH)
(Cash)/ (19,131) (6,218) 0 0 (8,073) (158) 0 (615) 47 (12)
overdrafts
(Cash investments) 0 0 0 0 0 0 0 0 0 0
Loans less than 1 year 12,341 3,807 0 0 0 0 0 210 0 210
Loans less than 1 year 4,945 2,513 0 0 0 0 0 2,432 0 2,432
--------------------------------------------------------------------------------------------------------
Total (1,844) 102 0 0 (8,073) (158) 0 2,027 47 2,630
--------------------------------------------------------------------------------------------------------
As per balance sheet (1,844) 102 0 0 (8,073) (158) 0 2,027 47 2,630
above
--------------------------------------------------------------------------------------------------------
Difference 0 0 0 0 0 0 0 0 0 0
--------------------------------------------------------------------------------------------------------
Finance leases 2,643 0 0 0 0 0 0 2,643 0 2,643
included within loans
--------------------------------------------------------------------------------------------------------
GROUP LOANS
Xxxxx Group 20,510 23,554 0 0 (3,044) 0 0 0 0 0
Other Group loans 129,989 (3,569) 0 0 (19) 3,293 0 15,248 9,260 7,522
--------------------------------------------------------------------------------------------------------
Total 150,499 19,985 0 0 (3,063) 3,293 0 15,248 9,260 7,522
--------------------------------------------------------------------------------------------------------
As per balance sheet 150,499 19,985 0 0 (3,063) 3,293 0 15,248 9,260 7,522
above
--------------------------------------------------------------------------------------------------------
Difference 0 0 0 0 0 0 0 0 0 0
--------------------------------------------------------------------------------------------------------
Exchange rates versus EURO: AT 31 DECEMBER 1999
SEALS TOTAL Pound
FF RMB RMB US$ Sterling EURO
Balance Sheet 6.560 8.302 8.302 1.002 0.622 1.000
Euro 000 CORVOL WANYUAN WANY - MI INC UK ADJS
-----------------------------------------------------------------------------------------
BALANCE SHEET
Stock & WIP 1,278 1,098 0 9,694 0 1
Trade debtors 77 3,131 0 15,702 0 0
Other debtors 707 1,009 0 3,492 0 0
Group trade debtors 4,805 0 0 322 0 1
-----------------------------------------------------------------------------------------
Trade creditors (2,033) (509) 0 (8,808) 0 0
Current taxation 110 0 0 9,277 40 0
Other creditors (385) (423) (0) (4,416) 0 (201)
Group trade (1,657) (567) 0 (9,357) 0 0
creditors
-----------------------------------------------------------------------------------------
Net current assets 2,902 3,740 (0) 15,906 40 (199)
Fixed assets 3,564 13,258 0 66,615 0 6
Fixed assets (29) 0 0 0 0 0
creditors- external
Fixed assets 0 0 0 0 0 0
creditors- group
Intangibles 0 0 0 0 0 0
Goodwill 0 0 0 0 0 0
Other non current 9 0 0 0 0 (6,265)
assets
Provisions 0 (615) 0 (200) 0 0
Other non current (886) 0 (4,116) 0 0 198
liabilities less tax
Taxation greater than
1 year 0 0 0 0 0 0
Deferred taxation 0 0 0 (3,148) 0 0
-----------------------------------------------------------------------------------------
TOTAL ASSETS LESS 5,560 16,383 (4,116) 79,174 40 (6,260)
LIABILITIES
-----------------------------------------------------------------------------------------
Share capital 1,601 12,048 (4,670) 6,094 0 (6,265)
Reserves 6,142 (1,603) 555 (40,441) 207 5
Net borrowings/ (650) 5,938 0 (1,513) (167) 0
(cash)
Group loans (1,533) 0 0 115,035 0 0
-----------------------------------------------------------------------------------------
Capital employed 5,560 16,383 (4,116) 79,174 40 (6,260)
-----------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------
RESERVES
Share premium 0 0 0 0 0 0
Revaluation 192 0 0 238 0 0
Exchange differences 1 (80) (197) 0 0 0
Revenue- C Year - 166 2,224 (896) (16,549) 0 0
A/c no 30000
-----------------------------------------------------------------------------------------
Revenue- Other - A/c 5,784 (3,746) 1,648 (24,131) 207 5
no 95000
---------------------------------------------------------------
Total reserves 6,142 (1,603) 555 (40,441) 207 5
---------------------------------------------------------------
As per balance sheet 6,142 (1,603) 555 (40,441) 207 5
above
---------------------------------------------------------------
Difference 0 0 0 0 0 0
---------------------------------------------------------------
NET BORROWINGS /
(CASH)
(Cash)/ (650) (2,386) 0 (1,513) (167) 0
overdrafts
(Cash investments) 0 0 0 0 0 0
Loans less than 1 year 0 8,324 0 0 0 0
Loans less than 1 year 0 0 0 0 0 0
---------------------------------------------------------------
Total (650) 5,938 0 (1,513) (167) 0
---------------------------------------------------------------
As per balance sheet (650) 5,938 0 (1,513) (167) 0
above
---------------------------------------------------------------
Difference 0 0 0 0 0 0
---------------------------------------------------------------
Finance leases 0 0 0 0 0 0
included within loans
---------------------------------------------------------------
GROUP LOANS
Xxxxx Group 0 0 0 0 0 0
Other Group loans (1,533) 0 0 115,035 0 0
---------------------------------------------------------------
Total (1,533) 0 0 115,035 0 0
---------------------------------------------------------------
As per balance sheet (1,533) 0 0 115,035 0 0
above
---------------------------------------------------------------
Difference 0 0 0 0 0 0
---------------------------------------------------------------
-90-
94
AT 30 JUNE 2000 FOR INFORMATION ONLY
SEALS TOTAL Exchange rates versus
EURO:
DM EURO DM PESETA CZK CZK FF FF FF FF RMB
Balance Sheet 1.960 1.000 1.960 166.400 35.631 35.631 6.560 6.560 6.560 6.560 8.154
TOTAL
Euro 000 XXXXX XX XXXXX XXXX XXXXXXX XXXXXXX XXX-XX XXXXXX SNAPPON GRUCHET CORVOL WANYUAN
------------------------------------------------------------------------------------------------------------------------------------
BALANCE SHEET
Stock & WIP 39,081 13,695 220 0 4,616 2,248 0 6,928 2,530 2,922 1,476 1,368
Trade debtors 58,267 24,615 0 0 9,115 2,737 0 (233) (349) 39 77 3,448
Other debtors 7,796 539 0 0 2,253 224 0 3,602 2,610 597 395 909
Group trade debtors 44,924 5,519 1,082 0 2,486 225 0 35,612 14,358 15,720 5,533 0
------------------------------------------------------------------------------------------------------------------------------------
Trade creditors (38,658) (7,324) 0 0 (10,419) (1,178) 0 (10,745) (5,221) (3,323) (2,200) (757)
Current taxation (331) (3,328) 0 0 (4,408) (70) 0 2,371 1,284 1,158 (72) 0
Other creditors (33,151) (15,984) (401) 0 (1,547) (1,724) (0) (7,847) (5,195) (1,992) (661) (1,216)
Group trade creditors (17,805) (2,363) (865) 0 (1,944) (1,287) 0 (9,488) (3,838) (4,638) (1,012) (479)
------------------------------------------------------------------------------------------------------------------------------------
Net current assets 60,123 15,369 36 0 153 1,177 (0) 20,199 6,179 10,484 3,536 3,273
Fixed assets 228,186 75,901 252 937 35,652 11,542 0 25,961 9,979 12,452 3,530 13,009
Fixed assets (1,914) (1,617) 0 0 0 (141) 0 (156) (97) (75) 15 0
creditors- external
Fixed assets (814) 224 0 0 0 (1,039) 0 0 0 0 0 0
creditors- group
Intangibles (66) 0 0 0 0 (66) 0 0 0 0 0 0
Goodwill 0 0 0 0 0 0 0 0 0 0 0 0
Other non current 288 6,521 0 0 0 132 0 0 0 0 0 0
assets
Provisions (93) 0 0 (62) 0 0 0 (30) 0 (30) 0 0
Other non current (10,940) (2,053) 0 0 0 0 0 (2,849) (1,190) (972) (687) 0
liabilities less tax
Taxation greater than
1 year 0 0 0 0 0 0 0 0 0 0 0 0
Deferred taxation (4,645) 0 0 0 (1,184) (264) 0 0 0 0 0 0
------------------------------------------------------------------------------------------------------------------------------------
Total assets less 270,125 94,345 288 875 34,620 11,341 (0) 43,125 14,872 21,858 6,395 16,282
liabilities
------------------------------------------------------------------------------------------------------------------------------------
Share capital 66,593 30,612 100 0 20,701 28 0 7,825 4,573 1,651 1,601 12,267
Reserves 26,014 33,315 (1,387) (3,081) 30,984 5,039 (0) 12,595 (1,375) 7,369 6,601 (701)
Net borrowings / (cash) (1,404) 10,479 (776) 0 (13,960) 2,599 0 2,382 31 2,545 (195) 4,716
Group loans 178,921 19,939 2,351 3,956 (3,106) 3,675 0 20,324 11,643 10,293 (1,612) 0
------------------------------------------------------------------------------------------------------------------------------------
Capital employed 270,125 94,345 288 875 34,620 11,341 (0) 43,125 14,872 21,858 6,395 16,282
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
RESERVES
Share premium 18 0 0 0 18 0 0 0 0 0 0 0
Revaluation 5,745 0 0 0 1,882 0 0 3,621 2,433 997 192 0
Exchange differences (282) 0 0 0 0 0 0 1 0 0 1 (82)
Revenue- C Year - A/c (477) 9,450 (1,387) (3,081) 4,573 656 0 (2,631) (3,271) 181 459 931
no 30000
Revenue- Other - A/c 21,010 23,865 0 0 24,512 4,383 (0) 11,604 (537) 6,191 5,950 (1,550)
no 95000
-------------------------------------------------------------------------------------------------------
Total reserves 26,014 33,315 (1,387) (3,081) 30,984 5,039 (0) 12,595 (1,375) 7,369 6,601 (701)
-------------------------------------------------------------------------------------------------------
As per balance sheet 26,014 33,315 (1,387) (3,081) 30,984 5,039 (0) 12,595 (1,375) 7,369 6,601 (701)
above
-------------------------------------------------------------------------------------------------------
Difference 0 0 0 0 0 0 0 0 0 0 0 0
-------------------------------------------------------------------------------------------------------
NET BORROWINGS / (CASH)
(Cash)/overdrafts (16,431) 4,453 (776) 0 (13,960) 2,599 0 (168) 31 (4) (195) (1,735)
(Cash investments) 0 0 0 0 0 0 0 0 0 0 0 0
Loans less than 1 year 9,965 3,514 0 0 0 0 0 0 0 0 0 6,451
Loans less than 1 year 5,062 2,513 0 0 0 0 0 2,550 0 2,550 0 0
-------------------------------------------------------------------------------------------------------
Total (1,404) 10,479 (776) 0 (13,960) 2,599 0 2,382 31 2,545 (195) 4,716
-------------------------------------------------------------------------------------------------------
As per balance sheet (1,404) 10,479 (776) 0 (13,960) 2,599 0 2,382 31 2,545 (195) 4,716
above
-------------------------------------------------------------------------------------------------------
Difference 0 0 0 0 0 0 0 0 0 0 0 0
-------------------------------------------------------------------------------------------------------
Finance leases 2,550 0 0 0 0 0 0 2,550 0 2,550 0 0
included within loans
-------------------------------------------------------------------------------------------------------
GROUP LOANS
Xxxxx Group 156,500 23,643 2,351 1,592 (3,089) 219 0 0 0 0 0 0
Other Group loans 22,421 (3,705) 0 2,364 (17) 3,455 0 20,324 11,643 10,293 (1,612) 0
-------------------------------------------------------------------------------------------------------
Total 178,921 19,939 2,351 3,956 (3,106) 3,675 0 20,324 11,643 10,293 (1,612) 0
-------------------------------------------------------------------------------------------------------
As per balance sheet 178,921 19,939 2,351 3,956 (3,106) 3,675 0 20,324 11,643 10,293 (1,612) 0
above
-------------------------------------------------------------------------------------------------------
Difference 0 0 0 0 0 0 0 0 0 0 0 0
-------------------------------------------------------------------------------------------------------
AT 30 JUNE 2000
FOR INFORMATION ONLY
Exchange rates versus EURO:
SEALS TOTAL
Pound
RMB US$ Sterling EURO
Balance Sheet 8.154 0.987 0.633 1.000
Euro 000 WANY-MI INC UK ADJS
----------------------------------------------------------
BALANCE SHEET
Stock & WIP 0 10,006 0 0
Trade debtors 0 18,584 0 0
Other debtors 0 269 0 0
Group trade debtors 0 0 0 0
----------------------------------------------------------
Trade creditors 0 (8,235) 0 0
Current taxation 0 5,064 39 0
Other creditors (0) (4,431) 0 0
Group trade creditors 0 (1,380) 0 0
----------------------------------------------------------
Net current assets (0) 19,877 39 0
Fixed assets 0 64,932 0 0
Fixed assets 0 0 0 0
creditors- external
Fixed assets 0 0 0 0
creditors- group
Intangibles 0 0 0 0
Goodwill 0 0 0 0
Other non current 0 0 0 (6,365)
assets
Provisions 0 0 0 0
Other non current (4,563) 0 0 (1,475)
liabilities less tax
Taxation greater than
1 year 0 0 0 0
Deferred taxation 0 (3,196) 0 0
----------------------------------------------------------
Total assets less (4,563) 81,613 39 (7,840)
liabilities
----------------------------------------------------------
Share capital (4,755) 6,187 0 (6,372)
Reserves 192 (49,678) 204 (1,468)
Net borrowings / (cas 0 (6,680) (164) 0
Group loans 0 131,783 0 0
----------------------------------------------------------
Capital employed (4,563) 81,613 39 (7,840)
----------------------------------------------------------
----------------------------------------------------------
RESERVES
Share premium 0 0 0 0
Revaluation 0 242 0 0
Exchange differences (200) 0 0 0
Revenue- C Year - A/c (372) (8,616) 0 0
no 30000
Revenue- Other - A/c 765 (41,304) 204 (1,468)
no 95000
--------------------------------
Total reserves 192 (49,678) 204 (1,468)
--------------------------------
As per balance sheet 192 (49,678) 204 (1,468)
above
--------------------------------
Difference 0 0 0 0
--------------------------------
NET BORROWINGS / (CAS
(Cash)/overdrafts 0 (6,680) (164) 0
(Cash investments) 0 0 0 0
Loans less than 1 year 0 0 0 0
Loans less than 1 year 0 0 0 0
--------------------------------
Total 0 (6,680) (164) 0
--------------------------------
As per balance sheet 0 (6,680) (164) 0
above
--------------------------------
Difference 0 0 0 0
--------------------------------
Finance leases 0 0 0 0
included within loans
--------------------------------
GROUP LOANS
Xxxxx Group 0 131,783 0 0
Other Group loans 0 0 0 0
--------------------------------
Total 0 131,783 0 0
--------------------------------
As per balance sheet 0 131,783 0 0
above
--------------------------------
Difference 0 0 0 0
--------------------------------
-91-
95
SCHEDULE 8
ACCOUNTING POLICIES AND PROCEDURES FOR THE COMPLETION ACCOUNTS
1. The Completion Accounts for each Target Group Company shall:-
1.1 be prepared on a going concern basis as if the period beginning with
the day following 31 December 1999 and ending on the Completion Date
was a financial year of each Target Group Company and as if an
accounting period had ended on the Completion Date;
1.2 state the assets and liabilities of each Target Group Company;
1.3 except as otherwise specifically provided in this schedule, be
prepared on a basis consistent with the accounting policies, bases,
practices and methodologies actually applied in the preparation of the
Accounts, and in accordance with generally accepted accounting
standards, principles and policies in the country where the relevant
Group Company is incorporated and as adjusted to comply with UK GAAP
as at the Completion Date. In the case of the new WWHQ and DIETC
divisions the accounting principles, policies, bases, and
methodologies to be followed are to be those applied in respect of the
German division in the Accounts and in accordance with UK GAAP;
1.4 be prepared in accordance with the specific accounting policies set
out in paragraph 2 below and so that, in the case of any conflict,
such specific accounting policies shall override the provisions of
paragraph 1.3 above;
1.5 not re-appraise the value of any of the assets of any Target Group
Company as a result of the change in ownership of the share capital of
the Target Group (or any changes in the business of the Target Group
since the Completion Date following such change in ownership) except
only as specifically set out in this schedule 8; and
1.6 shall exclude the effects of the change of ownership except as
required in paragraph 2 below.
2. SPECIFIC ACCOUNTING POLICIES
The following specific accounting policies shall be applied:-
Intangible assets
- Intangible assets which were included in the Accounts, including but not
limited to goodwill, shall be included in the Completion Accounts in the
same amount subject only and where applicable to amortisation at the rates
which, when annualised, equate to the same rates as were used in the
preparation of the Accounts.
- Intangible fixed assets acquired or arising after 31 December 1999 shall be
included in the Completion Accounts and amortised using the same rates
adopted in the Accounts for similar assets.
- Tangible fixed assets
- Tangible fixed assets included in the Accounts which have not been sold
outside the Group by the Completion Date shall be included in the
Completion Accounts in the same
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96
amount subject only and where applicable to depreciation at the rates
which, when annualised, equate to the same rates as were used in the
preparation of the Accounts.
- Fixed assets shall be depreciated at the rates which, when annualised,
equate to the same rates as were used in the preparation of the Accounts.
- There shall be no reassessment of the impairment of fixed assets since 31
December 1999 in preparing the Completion Accounts on the basis of
attributable operating cashflows as would otherwise be the case were UK
GAAP applied (FRS11) but for the avoidance of doubt any assessments of the
impairment of fixed assets based on current or future use can be reflected
in the Completion Accounts using the accounting policies, bases, practices
and methodologies used in the Accounts and UK GAAP on a consistent basis.
- There shall be no reassessment of the economic lives and residual values of
fixed assets in preparing the Completion Accounts on the basis of
attributable operating cashflows as would otherwise be the case were UK
GAAP applied (FRS11) but for the avoidance of doubt, any reassessments of
the economic lives and residual values can be reflected in the Completion
Accounts using the accounting policies, bases, practices and methodologies
used in the Accounts and UK GAAP on a consistent basis.
- Tangible fixed assets acquired or which come into use after 31 December
1999 shall be included in the Completion Accounts at cost and depreciated
using the same rates adopted in the Accounts for similar assets.
- Costs at the Completion Date of any fixed assets under construction shall
be capitalised in the Completion Accounts following the same principles,
policies, bases and methodologies adopted by each respective division for
the purposes of the Accounts, and depreciation shall commence from the date
on which they are brought into use.
Transfer of assets
- Assets transferred from one company or division to another shall be
transferred at the book value of the transferring company or division at
the date of transfer.
- The book value relating to any land or properties included in the Excluded
Assets and which are included in the Completion Accounts shall be deducted
from the Capital Employed.
Fixed and current asset reclassifications
- There shall be no reclassifications between fixed and current assets in
preparing the Completion Accounts.
Environmental
- A general provision in respect of liabilities for Environmental Issues,
excluding Environmental Issues relating to Former Properties and Excluded
Properties, of (Euro) 9.5m shall be included in the Completion Accounts.
Finance and operating leases
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97
- Finance leases which were capitalised in the Accounts should be treated on
the same basis in the Completion Accounts. Any lease agreements entered
into since 31 December 1999 shall be accounted for as prescribed in SSAP
21.
Stocks and work in progress
- Stocks and work in progress shall be valued according to accounting
principles, policies, bases, practices and methodologies used in the
valuation of stocks and work in progress held by each company or division
for the purposes of the Accounts. Standard costs used in the Completion
Accounts shall be those used for the respective company or division in the
Accounts.
- Provisions in relation to obsolescence of stock and work in progress shall
be assessed and valued according to accounting principles, policies, bases,
practices and methodologies used in the assessment and valuation of
provisions for obsolescence held by each company for the purpose of the
Accounts and in accordance with UK GAAP on a consistent basis or, taking
into account the bases for stocks detailed in Appendix A, subject to the
accounting principles, policies, bases, practices and methodologies used in
the Accounts and in accordance with UK GAAP on a consistent basis which
shall override the bases in Appendix A in the event of any conflict.
Debtors
- Debtors in the Completion Accounts shall be included at the amount recorded
as due in accordance with the accounting principles, policies, bases,
practices and methodologies used in the Accounts, and which are summarised
in Appendix A to this schedule and in accordance with UK GAAP on a
consistent basis. The Buyer will take all reasonable steps to collect
amounts due.
Intercompany Accounts
- Transactions between members of the Target Group, and between the Target
Group and The Xxxxx Group plc and its subsidiaries, shall be recorded in
relevant Intercompany Accounts in the Target Group's accounts as per the
Accounts and in accordance with schedule 7. Such Intercompany Accounts
shall be reconciled and in agreement with the balance shown by the
counter-party, on a consolidated basis, for the Target Group, and with the
Target Group and the Xxxxx Group plc and its subsidiaries.
Prepayments
- Prepayments shall be assessed and valued according to the accounting
principles, policies, bases, practices and methodologies used to assess
prepayments held by each company for the purposes of the Accounts.
Tooling revenue and costs
- The revenue and costs shall be recognised over four years at the following
percentages:
YEAR 1 YEAR 2 YEAR 3 YEAR 4
% % % %
Turnover (P&L) 44 19 19 18
Direct Costs (P&L) 25 25 25 25
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98
The Completion Accounts shall reflect the deferred income and deferred
costs arising from the above applicable percentages.
Provisions and accruals
- Provisions and accruals for liabilities at the Completion Date shall be
calculated in accordance with UK GAAP (FRS 12).
- No further Provisions will be required for amounts indemnified or
specifically warranted in this agreement.
- Retirement indemnities payable to employees on retirement shall be
accounted for using the same accounting principles, policies, bases,
practices and methodologies adopted by each respective division for the
purposes of the Accounts and applied on a consistent basis.
Pensions
- Pension assets and liabilities and costs shall be included in the
Completion Accounts on the same basis, using the same methods and actuarial
assumptions as used in arriving at the pension assets and liabilities and
costs in the Accounts and applied on a consistent basis.
Recognition of income
- Income shall be recognised for the purpose of the Completion Accounts using
the same principles, policies, bases and methodologies adopted by each
respective division for the purposes of the Accounts.
Post balance sheet events
- Adjusting post balance sheet events as defined in SSAP 17 shall be taken
into account up until the date that the draft Completion Accounts are
provided to the Vendor by the Purchaser
Holiday pay
- Provisions for holiday pay shall be included according to the accounting
principles, policies, bases, practices and methodologies used to assess
provisions for holiday pay in the Accounts.
Tax and deferred tax
- Tax in the Completion Accounts shall be calculated as if the Completion
Accounts Date were an Accounting Reference Period.
- Deferred Tax provision shall be included according to the accounting
principles, policies, bases, practices and methodologies used to assess
deferred tax provisions in each company in the Accounts and in particular
the deferred tax provision shall not be based on a full liability basis of
deferred tax accounting.
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99
- A general provision of (Euro) 5.0m in respect of Tax liabilities shall be
included in the Completion Accounts.
Foreign currencies
- Foreign currency monetary assets and liabilities shall be translated into
Euros at rates of exchange ruling at the Completion Accounts Date. Foreign
currency non-monetary assets and liabilities shall be translated into Euros
in the Completion Accounts at the rates applicable at Completion except for
the rate applying to the Capital Employed of Draftex Inc. which shall be
translated into Euros at US$0.925 to 1 Euro. For the avoidance of doubt the
equivalent exchange rate at the Accounts Date was US$1.002 to 1 Euro as
reflected in schedule 7.
3. PRINCIPLES USED IN DETERMINING THE AGREED CAPITAL EMPLOYED AND TO BE
USED IN THE COMPLETION ACCOUNTS IN DETERMINING THE CAPITAL EMPLOYED
3.1 Cash and Intra-Group Debt and Third Party Debt were excluded from all
calculations to establish the Agreed Capital Employed and shall be
excluded in all calculations to establish the Capital Employed. Cash
and Intra-Group Debt and Third Party Debt will, however, be included
in the Completion Accounts.
3.2 Subject to clause 3.3 below taxes were included in all calculations to
establish the Agreed Capital Employed and shall be included in all
calculations to establish the Capital Employed.
3.3 Corporate Tax Assets were excluded from all calculations to establish
the Agreed Capital Employed and shall be excluded from the Capital
Employed.
3.4 In calculating the Capital Employed, goodwill and other intangible
assets shall be included at a value equal to that attributed thereto
in the Agreed Capital Employed as set out in schedule 7, save for
amortisation calculated in accordance with the Accounting Policies.
Changes (since the Accounts Date) to intangible assets representing
cash investments, such as purchases of software, shall be added to the
Agreed Capital Employed.
3.5 All calculations shall be presented in the format set out in schedule
7.
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APPENDIX A
DRAFTEX
SPAIN
-----
Stocks are reviewed monthly for technical and commercial obsolescence. Stock
provisions will only be made for specifically (item by item) identified obsolete
items.
Specific bad debts validly disputed by the customer in writing are specifically
provided for, and are identified on a monthly review for specific
non-recoverability.
General risks are not provided for in general provisions. In the event of an
issue which may give rise for the need to create a provision it is done on the
basis that the specific risk area is identified and the specific provision is
made.
GERMANY
-------
Specific bad debts validly disputed by the customer in writing are specifically
provided for.
A general provision exists for the remainder of the debt balances on the
following basis :-
- 100% of any balances over 2 years
- 50% of balances over 1 year
- 25% of balances over 6 months
- 1% of the remainder of the balances
STOCK
RAW MATERIALS
A full provision is made for raw materials which have had no consumption for
more than one year. No provision is made for any other raw materials stocks,
providing the type of raw material stocks has been used in the current year.
MIXED RAW MATERIALS
Any mixed raw material batches for trials, laboratory or development identified
as non current are specifically provided for.
WORK IN PROGRESS
No specific or general provision is made for stock obsolescence.
FINISHED GOODS
No specific or general provision is made for stock obsolescence.
The value of finished goods stocks is adjusted downwards in the event that the
manufacturing costs of specific goods exceeds the sales price minus packaging,
freight and admin costs of those goods.
CZECH REPUBLIC
--------------
A general provision for debtors is provided on the following basis:-
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Of the debt outstanding excluding packaging:
- if greater than 1 year -100%
- if greater than 6 months - 50%.
STOCK
Periodic review of stocks for obsolescence. Specific provisions, if required,
are made on a specific (item by item) basis.
USA
---
Stocks are reviewed periodically for obsolescence. Specific provisions are made
on a specific (item by item) basis.
Debtors are reviewed monthly. A general provision is held and adjusted based
upon an assessment of the total risk.
FRANCE
------
STOCK
Stock reviewed monthly for obsolescence. Provision provided for all stock items
not utilised within twelve month period.
DEBTORS
Debtors are reviewed on a monthly basis. 100% of amounts validly disputed by the
customer in writing are provided.
-98-
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SCHEDULE 9
ALLOCATION OF CONSIDERATION
The consideration for the sale of the Acquisition Shares shall be apportioned
between the Acquisition Shares in accordance with this schedule, save that in
the event of any adjustment of the consideration in accordance with the
provisions of clause 2 the parties shall agree such consequential adjustment as
shall be required to those valuations as are consistent therewith (or, failing
any such agreement, either Party shall be entitled to refer the matter to be
resolved by an independent firm of internationally recognised chartered
accountants to be agreed upon by the Seller and the Buyer or, failing agreement,
to be selected, on the application of either the Seller or the Buyer, by the
President for the time being of the Institute of Chartered Accountants in
England and Wales or his duly appointed deputy, in which event the provisions of
clauses 6.6(a)-(d) inclusive shall apply).
TARGET GROUP COMPANY PURCHASE INTRA-GROUP THIRD CASH % CONSIDERATION
PRICE DEBT PARTY DEBT DEFERRED
AMOUNT
------------------------------------- ------------- ---------- ----------- ------ ---------------- -----------------------
Draftex Inc (Euro) 70m x y z 28.81 (Euro) 70m-(x+y)+z
Draftex International Iberica (Euro) 26m a b c 10.7 (Euro) 26m-(a+b)+c
Slic Corvol (Euro) 12.5m d e f 5.14 (Euro) 12.5m-(d+e)+f
Slic Gruchet (Euro) 25m g h i 10.29 (Euro) 25m-(g+h)+i
Snappon (Euro) 12.5m j k l 5.14 (Euro) 12.5m-(j+k)+l
Draftex Berteilligungs (Euro) 97m m n o 39.92 (Euro) 97m-(m+n)+o
Gesellschaft mbH
Draftex International (Pribor) SRO (Euro) 1 (Euro) 1
-99-
103
SCHEDULE 10
-100-
104
SCHEDULE 11
SENIOR EXECUTIVES
DRAFTEX INC
SALISBURY PLANT
Plant Manager - Xxxx Xxxxxxx
Manufacturing Manager - Xxxxx Xxxxxxx
Finance Manager - Xxxxxxx Click
Project Management - Xxxxxx Xxxxx
Engineering Manager - Xx Xxxxx
Quality manager - Xxxx Xxxx
HR Manager - Xxxx Xxxxxxx
NOVI SALES AND ENGINEERING SUPPORT OFFICE
Sales & Marketing - Xxxx Xxxxxxxxxxx
DRAFTEX BETEILIGUNGSGESELLSCHAFT MBH
Nil
BEIJING WANYUAN - DRAFTEX SEALING PRODUCTS CO LTD
General Manager - Xxx Xxxx Chi
Deputy General Manager - Lu ZaiPing
Financial Manager - Hu DaZhong
Sales Manager - Xxxx XxXxxx
HR Manager - Tian Lijun
Engineering Manager - T Fengman
Manufacturing Manager - Cao Jingshi
Quality Manager - Z Jianming
DRAFTEX INTERNATIONAL EUROPEAN TECHNICAL CENTER MBH & CO KG
HR Manager - Xxxxxx Xxxxxxxx
Manager Finance & Contracts - Xxxxx Xxxxxxxx
Manager Engineering - Xxxxxxx Xxxxx
Project management - Xxxxxx Xxxxxxx*
Quality Manager - Xxxx Xxxxxxxx
DRAFTEX INTERNATIONAL EUROPEAN TECHNICAL CENTER GMBH
Nil
DRAFTEX INTERNATIONAL GMBH & CO KG
Manager Commercial - Sungur Derturk
Finance Manager - Xxxx X'Xxxx
Manufacturing Manager - Xxxxxx Xxxxxxxx
Manager Quality & Safety - Xxxxxx Xxxxxxxxxxx
HR Manager - Xxxxxxxxx Xxxxxx
-101-
105
Manager Order Processing - Xxxxxxx Xxxxxxx
Manager Production Engineering - Xxxxxx Xxxxxx
DRAFTEX INTERNATIONAL GMBH
Chairman - Xxxxx Xxxxxxx Xxxxx*
Deputy Chief Executive officer - Xxxxxx Xxxxxxx*
Executive Vice President HR - Xxxxx Xxxxxxx*
Executive Vice President Finance - Xxxxx Xxxxxxx*
Executive Vice President Commercial - Xxxx Xxx*
Executive Vice President Project
& Marketing - Xxxxxxx Wolfhugel
Executive Vice President Manufacturing - Xxxxxx Xxxxxxxx
Executive Vice President Quality - Xxxxx Xxxxxx*
DRAFTEX-OPTIMIT SRO (AND DRAFTEX INTERNATIONAL (PRIBOR) SRO)
Plant Manager - Piskytl Zdenek
Manufacturing Manager - Xxxxx Xxxxxx
Engineering Manager - Xxxxx Xxxx
HR Manager - Xxxx Xxxxxxxxx
Finance Manager - Xxxx Xxxxxx
Manager Projects - Xxxxx Xxxxx
Quality Manager - Xxxxxxxx Xxxx
DRAFTEX VERWALTUNGSGESELLSCHAFT
Nil
DRAFTEX - MTECH GMBH
Plant Manager - Xxxxxx Xxxxxxxx
DRAFTEX INTERNATIONAL IBERICA SA
Plant Manager - Xxxxxx Xxxxxx
Manufacturing Manager - X X Xxxxx
HR Manager - J Xxxxxxx
Finance Manager - F Xxxxxxxx
Manager Projects - U Kaiser
Quality Manager - J Xxxxxx
Chemical Laboratory Manager - F Xxxxxxxxx Xxxx
SLIC CORVOL SA
Site Manager - Xxxxxxx Xxxxxxxx
Technical Head - Xxxxx Xxxxxxxx
Head of Mixtures - Xxxxxxx Xxxxxx
Head of Personnel Administration - Xxxxx-Xxxxxxxxx Xxxxxxxx
Head of Quality - Xxxxxx Xxxxxxx
SLIC GRUCHET SA
Divisional general manager - Xxxx Xxxxxxx
-102-
106
Divisional quality manager - Yves Chasset
Divisional financial manager - Xxxxx Xxxxxx
Site Manager - Xxxxx Xxxxxxx
Head of Methods - Olivier Hugonnet
Head of Quality - Thierry Cinqueux
Assistant Head of Manufacturing - Xxxx-Xxxxxxxx Xxxxxx
Head of Human Resources - Xxxx Xxxxxxxxx
Financial Controller - Xxxxx Xx Xxxxxxx
SNAPPON SA
Site Manager - Xxxxxx Xxxxxxx
Project Manager - Xxxx-Xxxx Xxxxxxx
Financial Controller - Xxxxxx Xxxxxxxxx
Divisional Controller - Xxxxxxx Xxxxxxx
* English employment agreements. Not employed by the company.
-103-
107
Signed by Xxxx XxXxx )
for and on behalf of ) (signed)
THE XXXXX GROUP PUBLIC LIMITED COMPANY )
In the presence of : )
R Xxxxxxx )
0, Xxxxxx Xx
Xxxxxx XX0
Signed by Xxxxx X. Xxxx )
for and on behalf of GENCORP INC. ) (signed)
in the presence of :- )
C Xxxxxx
00 Xxxxxx Xx
Xxxxxx XX0
-104-
