SHARE PURCHASE AGREEMENT
among
XXXXXX CRYSTALS LIMITED,
NEWPORT SPECTRA-PHYSICS LIMITED,
NEWPORT CORPORATION
and
DYNASIL CORPORATION OF AMERICA
Dated as of July 19, 2010
1. Purchase and Sale of the Shares 1
1.01. Purchase of the Shares from the Seller 1
1.02. Further Assurances 1
1.03. Purchase Price for the Shares 1
1.04. Post Closing Working Capital Adjustment 2
1.05. Payments on Account of Working Capital Adjustment 3
1.06. Additional Post Closing Adjustment 4
1.07. Cash Dividend to the Seller 7
1.08. Closing 8
2. Representations of the Seller Regarding the Shares 8
3. Representations of the Ultimate Parent and the
Seller Regarding the Company 8
4. Representations of the Ultimate Parent 8
4.01. Organization and Authority 8
4.02. Authorization 8
4.03. Regulatory Approvals 9
4.04. Brokers 9
5. Representations of the Buyer 9
5.01. Organization and Authority 9
5.02. Authorization 10
5.03. Regulatory Approvals 10
5.04. Investment Representation 10
5.05. Financing 10
6. Access to Information; Public Announcements 11
6.01. Access to Management, Properties and Records 11
6.02. Confidentiality 11
6.03. Public Announcements 12
7. Pre-Closing Covenants of the Seller and the Company 12
7.01. Conduct of Business 12
7.02. Negative Covenants 12
7.03. Delivery of Interim Financial Statements 14
7.04. Communications with Customers and Suppliers 14
7.05. Compliance with Laws 14
7.06. Continued Truth of Representations and Warranties 15
7.07. Continuing Obligation to Inform 15
7.08. Exclusive Dealing 15
7.09. Pension Scheme 15
7.10. Reports, Taxes 16
8. Reasonable Best Efforts to Obtain
Satisfaction of Conditions 16
9. Conditions to Obligations of the Buyer 16
9.01. Continued Truth of Representations and Warranties
of the Ultimate Parent, the Seller and the Company;
Compliance with Covenants and Obligations 16
9.02. Performance by the Ultimate Parent, the
Seller and the Company 17
9.03. Governmental Approvals 17
9.04. Consent of Lenders, Lessors and Other Third Parties 17
9.05. Adverse Proceedings 17
9.06. Repayment of Indebtedness; Intercompany Accounts 17
9.07. Pension Scheme 17
9.08. Transition Agreement 18
9.09. Material Adverse Effect 18
9.10. Closing Deliveries 18
10. Conditions to Obligations of the Seller and
the Ultimate Parent 20
10.01. Continued Truth of Representations and Warranties
of the Buyer; Compliance with Covenants
and Obligations 20
10.02. Corporate Proceedings 21
10.03. Governmental Approvals 21
10.04. Consents of Lenders, Lessors and Other Third Parties 21
10.05. Adverse Proceedings 21
10.06. Closing Deliveries 21
10.07. Repayment of Indebtedness; Intercompany Accounts 22
11. Reserved. 22
12. Indemnification 22
12.01. By the Ultimate Parent and Seller 22
12.02. By the Ultimate Parent and Seller in relation
to the Xxxxxx Analytical Retirement
Benefit Scheme 22
12.03. By the Buyer 23
12.04. Claims for Indemnification 23
12.05. Defense by the Indemnifying Party 23
12.06. Payment of Indemnification Obligation 24
12.07. Survival of Representations and Warranties and
Covenants; Claims for Indemnification for
Representations and Warranties 25
12.08. Limitation on Indemnification for Representations
and Warranties 25
12.09. Liabilities 26
12.10. Sole and Exclusive Remedy 26
13. Post-Closing Agreements 26
13.01. Proprietary Information 26
13.02. Waiver and Release 27
13.03. No Solicitation of Former Employees 27
13.04. Non-Competition Agreement 28
13.05. Tax Returns 28
13.06. Pension Scheme 30
14. Termination of Agreement; Damages 30
14.01. Termination by Lapse of Time 30
14.02. Termination by Agreement of the Parties 30
14.03. Termination by Reason of Breach 30
14.04. Availability of Remedies at Law 31
15. Dispute Resolution 31
15.01. Consent to Jurisdiction and Venue 31
15.02. Waiver of Jury Trial 31
16. Notices 32
17. Successors and Assigns 33
18. Entire Agreement; Amendments; Attachments 33
19. No Third-Party Beneficiaries 33
20. Severability 33
21. Construction 33
22. Investigation of the Parties 33
23. Expenses 33
24. Legal Fees 34
25. Governing Law 34
26. Section Headings 34
27. General Provisions 34
28. Counterparts 34
Appendix A -- Representations of the Seller Regarding the
Shares
Appendix B -- Representations of the Ultimate Parent, the
Seller and the Company Regarding the Company
Appendix C - Deed of Indemnity
Appendix D - Deed of Agreement
Exhibits
A -- March 31 Balance Sheet
B -- Transition Services Agreement
C -- Assumed Liabilities
SHARE PURCHASE AGREEMENT
This agreement (the "Agreement") is made as of
July 19, 2010 by and among Dynasil Corporation of America, a
Delaware corporation (the "Buyer"), Xxxxxx Crystals Limited,
a private limited company incorporated under the Companies
Xxx 0000 in the United Kingdom (the "Company"), Newport
Spectra - Physics Limited, a private limited company
incorporated under the Companies Xxx 0000 in the United
Kingdom (the "Seller"), which owns all of the issued and
outstanding capital stock of the Company, and Newport
Corporation, a Nevada corporation (the "Ultimate Parent").
Preliminary Statement
1. The Seller owns all of the issued and outstanding
ordinary shares, 1.00 GBP par value per share (the "Ordinary
Shares"), of the Company (the "Shares").
2. The Buyer desires to purchase, and the Seller desires
to sell, the Shares for the consideration set forth below,
subject to the terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the mutual
promises hereinafter set forth and other good and valuable
consideration, the receipt of which is hereby acknowledged,
the parties hereby agree as follows:
1. Purchase and Sale of the Shares
1.01. Purchase of the Shares from the Seller. Subject
to and upon the terms and conditions of this Agreement, at
the closing of the transactions contemplated by this
Agreement (the "Closing"), the Seller shall sell, transfer,
convey, assign and deliver to the Buyer, and the Buyer shall
purchase, acquire and accept from the Seller, all of the
Shares. At the Closing the Seller shall deliver to the
Buyer a certificate evidencing the Shares with a stock
transfer form duly executed by the Seller in favor of the
Buyer.
1.02. Further Assurances. At any time and from time to
time after the Closing, each of the Buyer, the Ultimate
Parent and the Seller shall promptly execute and deliver
such instruments of sale, transfer, conveyance, assignment
and confirmation, and take all such other action as any
other party hereto may reasonably request, in order to more
effectively transfer, convey and assign to the Buyer, and to
confirm the Buyer's title to, all of the Shares, and to
assist in completing the transactions contemplated by this
Agreement.
1.03. Purchase Price for the Shares. The purchase price
to be paid by the Buyer for the Shares shall be Four Million
Seven Hundred Fifty Thousand Dollars ($4,750,000), subject
to adjustment pursuant to Subsections 1.04, 1.06 and 12.05
hereof (the "Purchase Price").
(a) On the Closing Date, the Buyer shall pay to the Seller
a portion of the Purchase Price equal to Four Million
Dollars ($4,000,000) (the "Initial Payment"). The Buyer
shall deliver to the Seller the Initial Payment in cash, by
wire transfer of immediately available funds to an account
designated by the Ultimate Parent or the Seller.
(b) Within five (5) Business Days (as defined in Subsection
1.06(c)(iv)) after the Final Revenue Statement (as defined
in Subsection 1.06(c)(iii)) is approved in writing by the
Ultimate Parent (or deemed approved by the Ultimate Parent),
as the case may be, the Buyer shall pay to Seller an amount
in cash, by wire transfer of immediately available funds
(denominated in U.S. Dollars) equal to Seven Hundred Fifty
Thousand Dollars ($750,000) (the "Final Payment"), subject
to adjustment pursuant to Subsection 1.06.
1.04. Post Closing Working Capital Adjustment. The
Purchase Price set forth in Subsection 1.03 hereof shall be
subject to adjustment after the Closing Date as follows:
(a) Not later than sixty (60) days after the Closing Date,
the Buyer shall deliver a balance sheet of the Company as of
the Closing Date (as corrected pursuant to
Subsection 1.04(c) hereof, the "Closing Balance Sheet") to
each of the parties to this Agreement. The Closing Balance
Sheet shall be prepared in accordance with generally
accepted accounting principles in the United Kingdom ("UK
GAAP") applied consistently with the Company's past practice
(to the extent that such past practice was in accordance
with UK GAAP), without any adjustments applicable solely as
a result of the acquisition of the Shares by the Buyer on
the Closing Date.
(b) The Seller and one firm of independent certified
accountants acting on behalf of the Seller (the "Seller's
Auditors") shall have reasonable access to the books,
records, properties and personnel of the Company for
purposes of verifying the accuracy and fairness of the
presentation of the Closing Balance Sheet. The Seller shall
work in good faith and cooperate with the Buyer and the
Buyer's accountants (the "Buyer's Auditors") in the
preparation of the Closing Balance Sheet and the resolution
of any dispute in connection therewith pursuant to
paragraph (c) below.
(c) The values or amounts for each item reflected on the
Closing Balance Sheet shall be binding upon the Seller,
unless the Seller gives written notice, within thirty (30)
days after receipt of the Closing Balance Sheet, of
disagreement with any of the values or amounts shown on the
Closing Balance Sheet, specifying as to each such item in
reasonable detail, the nature and extent of such
disagreement (the "Dispute Notice"). If the Seller does
deliver a Dispute Notice, the Buyer and the Seller shall use
reasonable best efforts to resolve any disagreements with
respect to the Closing Balance Sheet, but if the Buyer and
the Seller are unable to resolve any such disagreement
within sixty (60) days after the date of the Dispute Notice,
then the Buyer and the Seller shall jointly retain an
independent accounting firm of recognized national standing
(the "Accounting Arbitrator") to make a binding
determination as to such unresolved disputed items in
accordance with this Agreement. If the Buyer and the Seller
are unable to agree on the choice of the Accounting
Arbitrator, then the Buyer's Auditors and the Seller's
Auditors shall jointly select a "big-four" accounting firm
(or a successor) as the Accounting Arbitrator. The Buyer
and the Seller shall direct the Accounting Arbitrator to
render a determination within thirty (30) days of its
retention and the Buyer, the Seller, and their respective
agents shall reasonably cooperate with the Accounting
Arbitrator during its engagement. The Accounting Arbitrator
shall consider only those items and amounts set forth in the
Dispute Notice which the Buyer and the Seller are unable to
resolve. The Buyer and the Seller shall each make written
submissions to the Accounting Arbitrator promptly (and in
any event within twenty (20) days after the Accounting
Arbitrator's retention), which submissions shall contain
such party's computations of the values and amount shown on
the Closing Balance Sheet and adjustments and information,
arguments, and support for such party's position. The
Accounting Arbitrator shall review such submissions and base
its determination solely on them. In resolving any disputed
item, the Accounting Arbitrator may not assign a value to
any item greater than the greatest value for such item
claimed by either the Buyer or the Seller or less than the
lowest value for such item claimed by either the Buyer or
the Seller. The determination of the Accounting Arbitrator
shall be conclusive and binding upon the parties. The
Closing Balance Sheet, as adjusted to reflect the negotiated
resolution of disputed items by the Buyer and the Seller and
the resolution of all other disputed items by the Accounting
Arbitrator shall be deemed to be the final Closing Balance
Sheet for the purposes of this Agreement. The Buyer and the
Seller shall bear the costs and expenses of the Accounting
Arbitrator in inverse proportion to their respective success
on the merits and such allocation of fees and expenses shall
be calculated by the Accounting Arbitrator and shall be
final and binding on the parties.
(d) The Buyer shall pay the fees and disbursements of the
Buyer's Auditors. The Seller shall under no circumstances
be liable for any fees or disbursements of the Buyer's
Auditors. The fees and disbursements of the Seller's
Auditors incurred in the review of the Closing Balance Sheet
shall be paid by the Seller. The Buyer shall under no
circumstances be liable for any fees or disbursements of the
Seller's Auditors.
(e) Immediately upon the expiration of the thirty (30)-day
period for giving the Dispute Notice, if no Dispute Notice
is given, or, if a Dispute Notice is delivered by the
Seller, immediately upon the resolution of disputes set
forth therein pursuant to this Subsection 1.04, the Purchase
Price shall be adjusted as set forth herein (as so adjusted,
the "Adjusted Purchase Price"). If the Net Working Capital
(as such term is defined below) on the Closing Date, as
reflected on the Closing Balance Sheet, is less than
GBP732,000, the deficiency shall be deducted from the Purchase
Price to obtain the Adjusted Purchase Price. If the Net
Working Capital on the Closing Date, as reflected on the
Closing Balance Sheet, is greater than GBP732,000, the surplus
shall be added to the Purchase Price to obtain the Adjusted
Purchase Price. For the purposes of this Subsection
1.04(e), any deficiency or surplus of Net Working Capital
shall be converted into U.S. Dollars in accordance with
generally accepted accounting principles in the United
States ("US GAAP"), based upon the spot exchange rate
reported in the Wall Street Journal on the Closing Date.
The term "Net Working Capital" is defined as the excess of
net accounts receivable, net inventory and prepaid expenses
over accounts payable and accrued expenses, all as shown on
the March 31, 2010 balance sheet of the Company (the "March
31 Balance Sheet") set forth in Exhibit A hereto. For the
avoidance of doubt, cash, cash equivalents and fixed assets
shall not be considered in the determination of Net Working
Capital.
1.05. Payments on Account of Working Capital Adjustment.
(a) The amount of any adjustment made to the Purchase Price
pursuant to Section 1.04, without interest, shall be paid to
the Buyer or the Seller, as applicable, within ten (10) days
following the expiration of the thirty (30)-day period for
giving the Dispute Notice, if no Dispute Notice is given, or
within ten (10) days following final resolution of any
dispute in connection with the determination of the Adjusted
Purchase Price.
(b) If an amount is payable to the Buyer pursuant to
paragraph (a) of this Subsection 1.05, such amount shall be
paid to the Buyer directly by the Seller, in cash, by wire
transfer of immediately available funds to an account
designated by the Buyer. If an amount is payable to the
Seller pursuant to paragraph (a) of this Subsection 1.05,
such amount shall be paid to the Seller directly by the
Buyer, in cash, by wire transfer of immediately available
funds to an account designated by the Ultimate Parent.
1.06. Additional Post Closing Adjustment. In addition
to any adjustment pursuant to Subsection 1.04, the Purchase
Price shall be subject to reduction based on the Company's
revenue performance relative to the projections provided to
Buyer for the Revenue Projection Period (as defined below),
as follows:
(a) Not later than forty-five (45) days after the last day
of the Revenue Projection Period (as defined below), the
Buyer shall prepare and deliver to the Seller and the
Ultimate Parent a statement (the "Draft Revenue Statement")
of Cumulative Product Revenue. "Cumulative Product Revenue"
means the Company's revenue for product lines existing as of
the Closing Date as set forth on Schedule 1.06 (including
new products developed within these product lines)
(collectively, the "Designated Products") for the eighteen
(18)-month period beginning on the Closing Date (the
"Revenue Projection Period"). The Draft Revenue Statement
shall include (i) a listing of each shipment of Designated
Products included in Cumulative Product Revenue, itemized by
customer name, product designation, quantity, unit price and
shipment date (but only to the extent that each of the
foregoing is readily capable of being generated from the
Company's or Buyer's IT system, as in existence when the
Draft Revenue Statement is prepared, into reportable
information without unreasonable effort or expense) and (ii)
a calculation of the Cumulative Product Revenue. The Draft
Revenue Statement shall be prepared in conformity with UK
GAAP applied on a basis consistent with the Company's
Accounts (as defined in Appendix A). Buyer shall
concurrently provide Seller and the Ultimate Parent with a
listing of all revenue generated by product shipments made
by the Company during the Revenue Projection Period,
categorized by the material used in the product composition
and an explanation for excluding any such revenue from the
calculation of Cumulative Product Revenue.
(b) As soon as practicable, but in any event within thirty
(30) days of the receipt by the Seller and the Ultimate
Parent of the Draft Revenue Statement, the Seller shall
provide to the Buyer a written report indicating its
agreement with, or objections to, the Buyer's calculation of
Cumulative Product Revenue, which objections shall be as
specific, itemized and quantified as Ultimate Parent can
reasonably provide based on the information provided by
Buyer pursuant to Section 1.06(a) ("Ultimate Parent Revenue
Objection"). Failure by the Ultimate Parent to object to
the Buyer's calculation of Cumulative Product Revenue within
such 30-day period shall be deemed to be the Ultimate
Parent's acceptance of the entire Draft Revenue Statement
and all items therein.
(c) Agreement on Cumulative Product Revenue.
(i) Within fifteen (15) days of the receipt by the Buyer of
the Ultimate Parent Revenue Objection, if any, the Ultimate
Parent and the Buyer shall endeavor to agree on any matters
in dispute. Any objection appropriately set forth in the
Ultimate Parent Revenue Objection that the Buyer does not
dispute within such fifteen (15) day period shall be deemed
accepted by the Buyer.
(ii) If the Buyer and the Ultimate Parent are unable to
agree on any remaining matters in dispute within fifteen
(15) days after the Buyer's receipt of the Ultimate Parent
Revenue Objection, then the matters in dispute will be
submitted for resolution to an independent accounting firm
mutually agreed upon by the Buyer and the Ultimate Parent
(the "Independent Accounting Firm"). If the Buyer and the
Ultimate Parent are unable to agree on the choice of the
Independent Accounting Firm, then the Buyer's Auditors and
the Seller's Auditors shall jointly select a "big-four"
accounting firm (or a successor) as the Independent
Accounting Firm. The Independent Accounting Firm shall
within thirty (30) days of the submission of the matters in
dispute determine, based solely on written submissions by
Buyer and Ultimate Parent, and not by independent review,
and issue a written report to the Ultimate Parent and the
Buyer upon such disputed items (in no event enlarging upon
any such disputed item and in no event adding any new or
additional item to those set forth in the Ultimate Parent
Revenue Objection), and such written decision shall be final
and binding upon the parties hereto. The Ultimate Parent
and the Buyer shall cooperate reasonably with each other and
each other's representatives to enable the Independent
Accounting Firm to render a written decision as promptly as
possible. The fees and expenses of the Independent
Accounting Firm shall be borne by the Ultimate Parent and
the Buyer in inverse proportion to their respective success
on the merits and such allocation of fees and expenses shall
be calculated by the Independent Accounting Firm and shall
be final and binding on the parties. At any time, the Buyer
and the Ultimate Parent may agree to settle any objections
raised in the Ultimate Parent Revenue Objection, which
agreement shall be in writing and binding upon each of the
Buyer and the Ultimate Parent with respect to the subject
matter of any such objection so resolved.
(iii) The revenue statement incorporating the resolution
of matters in dispute (if any), or, in the alternative, the
Draft Revenue Statement as approved in writing by the
Ultimate Parent (or deemed approved by the Ultimate Parent),
is referred to as a "Final Revenue Statement." The Final
Revenue Statement shall have the legal effect of an arbitral
award and shall be final, binding, and conclusive on the
parties hereto.
(iv) If Cumulative Product Revenue set forth in the Final
Revenue Statement is not at least Six Million Six Hundred
Fifty Thousand Dollars ($6,650,000) (the "Revenue Forecast")
then the Purchase Price shall be reduced by forty percent
(40%) of the difference of the Revenue Forecast minus the
Cumulative Product Revenue, provided that the total amount
of the adjustment pursuant to this Subsection 1.06 shall not
exceed Seven Hundred Fifty Thousand Dollars ($750,000). For
example, if Cumulative Product Revenue as set forth on the
Final Revenue Statement is equal to Six Million Dollars
($6,000,000), then the Purchase Price shall be reduced by
Two Hundred Sixty Thousand Dollars ($260,000). For the
avoidance of doubt, the Purchase Price shall be reduced by
Seven Hundred Fifty Thousand Dollars ($750,000) if
Cumulative Product Revenue is not at least Four Million
Seven Hundred Seventy Five Thousand Dollars ($4,775,000).
For purposes of this Subsection 1.06, all Cumulative Product
Revenue, in any currency, shall be converted into U.S.
Dollars in accordance with US GAAP on a monthly basis during
the Revenue Projection Period. For the purposes of this
Agreement, "Business Day" shall mean a day other than a
Saturday, Sunday or other day which shall be a legal holiday
in the State of New York or on which commercial banks in the
State of New York are authorized or required by law to
close.
(d) The Purchase Price adjustment set forth in this
Subsection 1.06 shall only apply to the extent the Buyer
acts in good faith and uses commercially reasonable efforts,
and causes the Company to act in good faith and to use
commercially reasonable efforts, to cause Cumulative Product
Revenue to be maximized. In the event that the Buyer does
not use commercially reasonable efforts then the estimated
revenue impact resulting from the failure shall be added
back to the Cumulative Product Revenue for the purposes of
calculating the Purchase Price adjustment. The parties
agree that any of the following actions by Buyer would be
considered to constitute a failure to use commercially
reasonable efforts:
(i) Failure to pursue the new business development plan as
outlined in the April 27-28, 2010 powerpoint presentation
included in the due diligence materials;
(ii) Discontinuing the development, manufacturing, marketing
and sales of the Designated Products reflected in the
Revenue Forecast during the Revenue Projection Period which
are profitable from a contribution margin standpoint (it
being understood for such purpose that a product's
profitability shall be determined without reference to
payment of all or any portion of the Final Payment);
(iii) Affirmatively and materially reducing the
operational, research and development and/or sales and
marketing staffing levels applied to the Designated
Products, including without limitation by adding additional
products or duties to such employees without proportionately
increasing the Company's staffing levels in those areas, or,
in the case of any reduction in staffing levels due to
voluntary termination of employment or otherwise, failing to
use commercially reasonable efforts to replace employees in
such areas;
(iv) Affirmatively taking any action that has the effect of
delaying the shipment of any Designated Products beyond the
Revenue Projection Period, except pursuant to unsolicited
customer requests (it being understood that delays due to
the Company's general on-time delivery performance shall not
by themselves constitute such action);
(v) Other than for cause, terminating the employment of Xxx
Xxxxxx, Xxxxx Xxxxxx, or Xxxx Xxxxxx during the Revenue
Projection Period where such termination has a negative
impact on the Cumulative Product Revenue and that negative
impact would be avoidable if such employment was continued;
(vi) Selling or otherwise disposing of the Company, all or
any significant portion of the Company or the Company's
business acquired by the Buyer hereunder, or any other
business or assets of the Buyer, the Company or their
respective Affiliates, which constitute a material portion
of the support infrastructure needed for the Buyer to
perform its obligations with respect to the operation of the
business of the Company, in each case, whether by merger,
reorganization, stock or asset sale, license or otherwise;
and
(vii) Changing the pricing, discounting and/or revenue
recognition policies utilized by the Company as of the date
of this Agreement (other than changes to pricing and/or
discounting policies made in response to specific
competitive pressures).
(e) The Purchase Price adjustment provisions of this
Subsection 1.06 shall be the sole and exclusive remedy of
the Buyer and the Company for any failure of the Company to
achieve, for any reason, the Revenue Forecast or other
revenue projections provided to Buyer; provided, however,
that this Subsection 1.06(e) shall in no way impair or
otherwise limit any remedy otherwise available to any party
pursuant to Section 12 hereof.
(f) During the Revenue Projection Period, once every
calendar quarter, the Buyer shall cause the Company to
provide the Ultimate Parent with a written summary of the
Cumulative Product Revenue achieved (i) during such calendar
quarter and (ii) cumulatively during the Revenue Projection
Period. Such summary shall include a listing of each
shipment of Designated Products during such calendar
quarter, itemized by customer name, product designation,
quantity, unit price and shipment date (but only to the
extent that each of the foregoing is readily capable of
being generated from the Buyer's or the Company's IT system,
as in existence when the summary is prepared, into
reportable information without unreasonable effort or
expense). The Ultimate Parent's receipt of such summaries
or other information pursuant to this Subsection 1.06(f)
shall be subject to the confidentiality provisions set forth
in Subsection 6.02 of this Agreement.
(g) During the Revenue Projection Period, the Buyer shall
keep records pertaining to the achievement of Cumulative
Product Revenue, in sufficient detail to permit the Ultimate
Parent to confirm the accuracy and completeness of any
summaries provided pursuant to Subsection 1.06(f), and Buyer
shall retain such records for a period ending on the later
of (i) three (3) years following the expiration of the
Revenue Projection Period, and (ii) the date on which the
Final Revenue Statement is approved in writing by the
Ultimate Parent (or deemed approved by the Ultimate Parent).
During the Revenue Projection Period, the Ultimate Parent
shall have the right to inspect such records, which
inspection rights may be exercised during normal business
hours upon reasonable prior written notice to the Buyer and,
in each case, no more than twice during the Revenue
Projection Period. The Ultimate Parent shall bear the full
cost of any such inspection. Prior to any requirement to
provide the Ultimate Parent with records pursuant to this
Subsection 1.06(g), the Ultimate Parent shall be required to
execute a confidentiality agreement in a form reasonably
acceptable to the Buyer.
1.07. Cash Dividend to the Seller. As of or immediately
prior to the Closing, the Seller shall cause the Company to
declare in favor of the Seller, from the funds of the
Company legally available therefor, a cash dividend in an
amount equal to all of the net cash and cash equivalents
(including cash in bank or other deposit accounts) held by
the Company as of the close of business of the day
immediately preceding the Closing, and the Company shall
have paid to the Seller such dividend amount; provided, that
such dividend shall not include any amount necessary to
cover outstanding checks and outstanding indebtedness of the
Company for borrowed money.
1.08. Closing. The Closing shall take place at the
offices of Xxxxxxx Xxxxxx Xxxxxx & Dodge LLP, 000 Xxxxxxxxxx
Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000 at 10:00 a.m., Boston
Time, on July 19, 2010, provided that the conditions set
forth in Sections 9 and 10 have been satisfied or waived, or
at such other place, time or date as may be mutually agreed
upon in writing by the parties (the "Closing Date"). The
transfer of the Shares by the Seller to the Buyer shall be
deemed to occur at 12:01 a.m., London Time, on the Closing
Date.
2. Representations of the Seller Regarding the Shares
The Seller represents and warrants to the Buyer as
set forth in Appendix A hereto.
3. Representations of the Ultimate Parent and the Seller
Regarding the Company
Each of the Ultimate Parent and the Seller,
jointly and severally, represent and warrant to the Buyer as
set forth in Appendix B hereto, except as fairly disclosed
(with sufficient detail to identify the nature and scope of
the matter disclosed) ("Disclosed") in the letter of even
date with this agreement from the Seller to the Buyer
relating to the Representations contained within Appendix B
of this agreement (the "Disclosure Letter"), which
exceptions shall be deemed to qualify such representations
and warranties.
4. Representations of the Ultimate Parent
The Ultimate Parent represents and warrants to the
Buyer as follows:
4.01. Organization and Authority. The Ultimate Parent
is a corporation duly organized, validly existing and in
good standing under the laws of the State of Nevada, and has
all requisite power and authority (corporate and other) to
own its properties and to carry on its business as now being
conducted. The Ultimate Parent has full power to execute
and deliver this Agreement and the agreements contemplated
herein, and to consummate the transactions contemplated
hereby and thereby. Certified copies of the Articles of
Incorporation and the Bylaws of the Ultimate Parent, as
amended to date, have been previously filed with the United
States Securities and Exchange Commission (the "SEC"), are
complete and correct, and no amendments have been made
thereto or have been authorized since the date thereof.
4.02. Authorization. The execution and delivery of this
Agreement by the Ultimate Parent, and the agreements
provided for herein, and the consummation by the Ultimate
Parent of the transactions contemplated hereby and thereby,
have been duly authorized by all requisite corporate action.
This Agreement and all such other agreements and written
obligations entered into and undertaken in connection with
the transactions contemplated hereby constitute the valid
and legally binding obligations of the Ultimate Parent,
enforceable against the Ultimate Parent in accordance with
their respective terms, except as the same may be limited by
bankruptcy, insolvency, reorganization, moratorium or
similar laws now or hereafter in effect relating to
creditors' rights generally. The execution, delivery and
performance of this Agreement and the agreements provided
for herein, and the consummation by the Ultimate Parent of
the transactions contemplated hereby and thereby, will not,
with or without the giving of notice or the passage of time
or both, (a) violate the provisions of any law, rule or
regulation applicable to the Ultimate Parent; (b) violate
the provisions of the Ultimate Parent's Articles of
Incorporation or Bylaws; (c) violate any judgment, decree,
order or award of any court, governmental body or
arbitrator; or (d) conflict with or result in the breach or
termination of any term or provision of, or constitute a
default under, or cause any acceleration under, or cause the
creation of any lien, charge or encumbrance upon the
properties or assets of the Ultimate Parent pursuant to, any
indenture, mortgage, deed of trust or other agreement or
instrument to which the Ultimate Parent is a party or by
which the Ultimate Parent is or may be bound where such
conflict, breach, termination, default, acceleration, or
lien, charge or encumbrance would have a material adverse
effect on the Ultimate Parent's performance under this
Agreement. Schedule 4.02 attached hereto sets forth a true,
correct and complete list of all consents and approvals of
third parties that are required in connection with the
consummation by the Ultimate Parent of the transactions
contemplated by this Agreement.
4.03.Regulatory Approvals. All consents, approvals,
authorizations and other requirements prescribed by any law,
rule or regulation which must be obtained or satisfied by
the Ultimate Parent and which are necessary for the
consummation of the transactions contemplated by this
Agreement have been, or will be prior to the Closing Date,
obtained and satisfied other than any consent, approval,
authorization or requirement the failure of which to obtain
or satisfy would not have a material adverse effect on the
Ultimate Parent's performance under this Agreement.
4.04.Brokers. Neither the Ultimate Parent, nor the
Seller nor the Company has any liability or obligation to
pay any fees or commissions to any broker, finder, or agent
with respect to the transactions contemplated by this
Agreement for which the Buyer or the Company could become
liable or obligated.
5. Representations of the Buyer.
The Buyer represents and warrants to the Seller
and the Ultimate Parent as follows:
5.01.Organization and Authority. The Buyer is a
corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware, and has
all requisite power and authority (corporate and other) to
own its properties and to carry on its business as now being
conducted. The Buyer has full power to execute and deliver
this Agreement and the agreements contemplated herein, and
to consummate the transactions contemplated hereby and
thereby. Certified copies of the Certificate of
Incorporation and the Bylaws of the Buyer, as amended to
date, have been previously delivered to the Seller, are
complete and correct, and no amendments have been made
thereto or have been authorized since the date thereof.
5.02.Authorization. The execution and delivery of this
Agreement by the Buyer, and the agreements provided for
herein, and the consummation by the Buyer of the
transactions contemplated hereby and thereby, have been duly
authorized by all requisite corporate action. This
Agreement and all such other agreements and written
obligations entered into and undertaken in connection with
the transactions contemplated hereby constitute the valid
and legally binding obligations of the Buyer, enforceable
against the Buyer in accordance with their respective terms,
except as the same may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws now or hereafter
in effect relating to creditors' rights generally. The
execution, delivery and performance of this Agreement and
the agreements provided for herein, and the consummation by
the Buyer of the transactions contemplated hereby and
thereby, will not, with or without the giving of notice or
the passage of time or both, (a) violate the provisions of
any law, rule or regulation applicable to the Buyer;
(b) violate the provisions of the Buyer's Certificate of
Incorporation or Bylaws; (c) violate any judgment, decree,
order or award of any court, governmental body or
arbitrator; or (d) conflict with or result in the breach or
termination of any term or provision of, or constitute a
default under, or cause any acceleration under, or cause the
creation of any lien, charge or encumbrance upon the
properties or assets of the Buyer pursuant to, any
indenture, mortgage, deed of trust or other agreement or
instrument to which the Buyer is a party or by which the
Buyer is or may be bound where such conflict, breach,
termination, default, acceleration, or lien, charge or
encumbrance would have a material adverse effect on the
Buyer's performance under this Agreement. Schedule 5.02
attached hereto sets forth a true, correct and complete list
of all consents and approvals of third parties that are
required in connection with the consummation by the Buyer of
the transactions contemplated by this Agreement.
5.03.Regulatory Approvals. All consents, approvals,
authorizations and other requirements prescribed by any law,
rule or regulation which must be obtained or satisfied by
the Buyer and which are necessary for the consummation of
the transactions contemplated by this Agreement have been,
or will be prior to the Closing Date, obtained and satisfied
other than any consent, approval, authorization or
requirement the failure of which to obtain or satisfy would
not have a material adverse effect on the Buyer's
performance under this Agreement.
5.04. Investment Representation. The Buyer is acquiring
the Shares from the Seller for its own account for
investment and not with a view to, or for sale in connection
with, any distribution thereof, nor with any present
intention of distributing or selling the same; and, except
as contemplated by this Agreement and the agreements
contemplated herein, the Buyer has no present or
contemplated agreement, undertaking, arrangement,
obligation, indebtedness or commitment providing for the
disposition thereof.
5.05. Financing. The Buyer currently has, and will
maintain up to and including the Closing, sufficient cash
and available credit facilities in an aggregate amount
sufficient to pay all of the consideration payable to the
Seller as required by this Agreement, and to make all other
necessary payments in connection with the purchase of the
Shares on the terms set forth herein.
6. Access to Information; Public Announcements.
6.01. Access to Management, Properties and Records.
(a) From the date of this Agreement until the Closing Date,
the Seller and the Company shall afford the officers,
attorneys, accountants and other authorized representatives
of the Buyer reasonable access upon reasonable notice and
during normal business hours to all management personnel,
offices, properties, books and records of the Company, so
that the Buyer may have full opportunity to make such
investigation as it shall desire to make of the management,
business, properties and affairs of the Company, and the
Buyer shall be permitted to make abstracts from, or copies
of, all such books and records; provided that (i) such
access does not unreasonably interfere with the normal
operations of the Company, (ii) the Buyer will bear any and
all costs incurred by Buyer in obtaining such access, and
(iii) the Ultimate Parent shall have the right to supervise
any access to the Company's customers, vendors and /or
employees. The Seller and the Company shall furnish to the
Buyer, at the Seller's expense, such financial and operating
data and other information as to the business of the Company
as the Buyer shall reasonably request.
(b) The Seller and the Company shall authorize the release
to the Buyer of all files pertaining to the business or
operations of the Company held by any governmental,
regulatory or administrative body. The Seller's and the
Company's authorization shall specifically waive all
previous claims of privilege or other restrictions, and in
any case where a release by a present or former employee of
the Company is necessary, the Seller and the Company shall
exercise their reasonable efforts to obtain such a release.
6.02. Confidentiality.
(a) The Company and the Seller have furnished and will
continue to furnish the Buyer with certain information which
is either non-public, confidential or proprietary in nature
and which (i) is identified in writing as being proprietary
and confidential, (ii) is not already known to any
individual, partnership (limited or general), corporation,
limited liability company, association, company, trust,
joint venture, unincorporated organization, private agency,
governmental entity or other entity of any kind (each, a
"Person") other than the Company, the Seller, its
representatives and third parties which have entered into
written non-disclosure agreements with the Company and
(iii) has not been independently developed by the Buyer
without any use of the confidential or proprietary
information of the Company or the Seller. All such
information furnished to the Buyer, its directors, officers,
employees, agents or representatives, including, without
limitation, attorneys, accountants, consultants, potential
lenders, investors and financial advisors (collectively
"representatives"), by the Company, the Seller, or any of
their respective representatives, and all analyses,
compilations, data, studies or other documents prepared by
the Buyer or its representatives containing or based in
whole or in part on any such furnished information or
reflecting the Buyer's review of, or interest in, the
Company is hereinafter referred to as "Information."
(b) Subject to the requirements of applicable law, the
Buyer hereby agrees to use the Information solely in
connection with the consummation of the transactions
contemplated by this Agreement and to transmit the
Information only to those representatives of the Buyer who
need to know the Information and who have been instructed by
the Buyer (i) to abide by the confidentiality obligations
contained in this Subsection 6.02 and (ii) that receipt of
any Information hereunder by such representative constitutes
acceptance by such representative of the terms of this
Subsection 6.02.
6.03.Public Announcements. The parties agree that
prior to the Closing Date any and all general public
pronouncements or other general public communications
concerning this Agreement and the purchase and sale of the
Shares by the Buyer, and the timing, manner and content of
such disclosures, shall be subject to the mutual agreement
of the Company, the Ultimate Parent and the Buyer, unless
otherwise required by applicable laws. Without limiting the
foregoing, the parties acknowledge that the Buyer has public
disclosure obligations relating to this Agreement and the
transactions contemplated thereby pursuant to the rules and
regulations of the SEC, including the filing of a Form 8-K
as a result of entering into this Agreement.
7. Pre-Closing Covenants of the Seller and the Company
From and after the date hereof and until the
Closing Date:
7.01.Conduct of Business. The Company shall carry on
its business diligently and substantially in the same manner
as heretofore and shall not make or institute any unusual or
new methods of manufacture, purchase, sale, shipment or
delivery, lease, management, accounting or operation, and
shall not ship or deliver any quantity of products in excess
of normal shipment or delivery levels, except as agreed to
in advance in writing by the Buyer. All of the property of
the Company shall be used, operated, repaired and maintained
in a normal business manner consistent with past practice.
7.02. Negative Covenants. Except as required by
applicable law or any governmental agency or expressly
required by this Agreement, without the prior written
consent of the Buyer, the Company shall not:
(a) take any action to amend its constitutional documents
or pass any special resolution for winding-up of the
Company;
(b) create, issue, allot, redeem, repurchase or reduce any
shares, stock, bonds or other securities or grant any option
or issue any warrant to purchase or subscribe for any of
such securities or issue any securities exercisable for or
convertible into such securities;
(c) incur, assume or guarantee any indebtedness or other
obligation or liability (absolute or contingent), except
current liabilities incurred and obligations under contracts
entered into in the ordinary course of business;
(d) declare or make any payment of a dividend or other
distribution;
(e) create any new mortgage, pledge, lien, charge or any
other encumbrance any of its assets or properties;
(f) sell, assign, transfer, encumber or pledge any of its
assets, except for inventory sold in the ordinary course of
business consistent with past practices;
(g) cancel any debts or claims, except in the ordinary
course of business;
(h) reorganize, sub-divide, consolidate, redesign or
otherwise change the terms of any Shares or stock in the
Company in any way or the rights, preferences or privileges
attaching to any Shares or stock in the Company;
(i) merge or consolidate with or into any other Person;
(j) negotiate with, give access to its books and records or
deliver any information respecting its business, operations,
prospects or results of operations, other than in the
ordinary course of business, to any Person;
(k) make, accrue or become liable for any bonus, profit
sharing or incentive payment, except for accruals under
existing plans, if any, or increase the rate of compensation
payable or to become payable by it to any of its officers,
directors or employees, other than increases in the ordinary
course of business consistent with past practice;
(l) make any Tax (as defined in Appendix B hereto) election
or give any consent pursuant to any Taxation Statute (as
defined in Appendix B hereto) applicable to the Company or
make any termination, revocation or cancellation of any such
election or any consent or compromise or settle any claim
for past or present Tax due;
(m) waive any rights of material value;
(n) modify, amend, alter or terminate any of its executory
contracts of a material value or which are material in
amount, other than in the ordinary course of business
consistent with past practice;
(o) take or permit any act or omission constituting a
material breach or default under any contract, indenture or
agreement by which it or its properties are bound;
(p) fail to use commercially reasonable efforts to
(i) preserve the possession and control of its assets and
business, (ii) keep in faithful service its present officers
and key employees, (iii) preserve the goodwill of its
consumers, suppliers, agents, brokers and others having
business relations with it, and (iv) keep and preserve its
business existing on the date hereof until the Closing Date;
(q) fail to operate its business and maintain its books,
accounts and records in the customary manner and in the
ordinary and regular course of business and maintain in good
repair its business premises, fixtures, machinery, furniture
and equipment;
(r) enter into any lease, contract, agreement or
understanding, other than those entered into in the ordinary
course of business calling for payments which in the
aggregate do not exceed Ten Thousand Dollars ($10,000) for
each such lease, contract, agreement or understanding;
(s) incur any capital expenditure in excess of Ten Thousand
Dollars ($10,000) in the aggregate;
(t) take any action that would result in the liquidation,
dissolution or winding up of the Company, either voluntarily
or involuntarily or file any petition for the appointment of
an administrator or liquidator or make an invitation to any
Person to appoint an administrative receiver or the entering
into of any compromise or arrangement to which the Companies
Xxx 0000 or the Insolvency Xxx 0000 applies;
(u) take any action that results in the creation of a
subsidiary;
(v) engage any new employee;
(w) materially alter the terms, status or funding condition
of any incentive scheme, bonus scheme, employee share option
scheme or other incentive arrangement; or
(x) commit or agree to do any of the foregoing for the
future.
0.00.Xxxxxxxx of Interim Financial Statements. As
promptly as possible following the last day of each month
after the date hereof until the Closing Date, and in any
event within twenty (20) days after the end of each such
month, the Seller or the Company shall deliver to the Buyer
the unaudited balance sheet of the Company and the related
statements of income, shareholders' equity and cash flows
for the one-month period then ended, all certified by an
officer or director of the Company to the effect that such
interim financial statements are prepared in accordance with
generally accepted accounting principles (except that such
financial statements may (i) be subject to normal year-end
adjustments and (ii) not contain all notes thereto that may
be required in accordance with generally accepted accounting
principles) and fairly present the financial condition of
the Company as of the date thereof and for the period
covered thereby (collectively, the "Interim Financial
Statements").
7.04.Communications with Customers and Suppliers.
(a) Subject to the receipt of any consents of Buyer
required under Section 7.02 hereof, the Company will
continue to accept customer orders in the ordinary course of
business and consistent with past practice for all products
offered by the Company but expected to be shipped after the
Closing Date.
(b) The Company and the Buyer will cooperate in
communications with suppliers and customers regarding the
transfer of the ownership of the Company to the Buyer on the
Closing Date.
7.05.Compliance with Laws. The Company will comply
with all laws and regulations which are applicable to it or
to the conduct of its business and will perform and comply
with all contracts, commitments and obligations by which
they are bound, except where any such failure to comply or
perform will not have a material adverse effect on the
Company, its financial condition, operations or results of
operations.
7.06.Continued Truth of Representations and Warranties.
Neither the Seller nor the Company nor the Ultimate Parent
will take any actions which it believes would be reasonably
likely to result in any of the representations or warranties
set forth in Sections 2, 3 and 4 hereof being inaccurate in
any material respect.
7.07.Continuing Obligation to Inform. From time to
time prior to the Closing, the Seller will deliver or cause
to be delivered to the Buyer supplemental information
concerning events subsequent to the date hereof which would
render any statement, representation or warranty in this
Agreement or any information contained in any Schedule
attached hereto inaccurate or incomplete in any material
respect at any time after the date hereof until the Closing
Date; provided, that none of such supplemental information
shall constitute an amendment of any statement,
representation or warranty in this Agreement or any
Schedule, Exhibit or document furnished pursuant hereto.
7.08.Exclusive Dealing. Neither the Ultimate Parent,
the Seller nor the Company will, directly or indirectly,
through any officer, director, agent or otherwise, (a)
solicit, initiate or encourage submission of proposals or
offers from any Person relating to an acquisition or
purchase of all or a material portion of the assets of or an
equity interest in the Company or any merger, consolidation
or business combination with the Company, or (b) participate
in any discussions or negotiations regarding, or furnish to
any other Person, any non-public information with respect to
or otherwise cooperate in any way with, or assist or
participate in, facilitate or encourage, any effort or
attempt by any other Person to do or seek any of the
foregoing. The Ultimate Parent, the Seller and the Company
agree to promptly notify the Buyer of any such proposal or
offer, or any inquiry or contact with respect thereto
received by the Company, the Ultimate Parent or the Seller.
7.09. Pension Scheme.
(a) The Ultimate Parent and the Buyer agree that, with
effect from the Closing Date, the pensionable service of the
current active members of the Xxxxxx Analytical Limited
Retirement Benefit Scheme (the "Scheme") will cease and they
will become deferred members.
(b) The Ultimate Parent and the Buyer agree that any
pension provisions relating to future service of employees
of the Company following the Closing Date will be the sole
obligation of the Buyer.
(c) On or before the Closing Date, the Ultimate Parent
shall make a payment to the Scheme equal to GBP800,000.
(d) On or before the Closing Date, the Ultimate Parent
shall provide an indemnity to the Company in the form
contained in the Deed of Indemnity appended to this
Agreement at Appendix C.
(e) On or before the Closing Date, the Company shall enter
an agreement with Xxxxxx Analytical Limited in the form
contained in the Deed of Agreement appended to this
Agreement at Appendix D.
7.10. Reports, Taxes. The Company will duly and timely
file all reports or returns required to be filed with
governmental, regulatory or administrative bodies or foreign
authorities and will promptly pay all Taxes (as defined in
Appendix B hereto), assessments and governmental charges
levied or assessed upon them or any of their properties
(unless contesting such in good faith and adequate provision
has been made therefor).
8. Reasonable Best Efforts to Obtain Satisfaction of
Conditions
The Seller, the Company, the Ultimate Parent and
the Buyer covenant and agree to use their reasonable best
efforts to obtain the satisfaction of the conditions
specified in this Agreement.
9. Conditions to Obligations of the Buyer
The obligations of the Buyer under this Agreement
are subject to the fulfillment, at the Closing Date, of the
following conditions precedent, each of which may be waived
in writing in the sole discretion of the Buyer:
9.01.Continued Truth of Representations and Warranties
of the Ultimate Parent, the Seller and the Company;
Compliance with Covenants and Obligations. The
representations and warranties of the Ultimate Parent, the
Seller and the Company (i) shall be true, in all material
respects, on and as of the Closing Date as though such
representations and warranties were made on and as of such
date (even though they purport to have been given on a date
prior to the Closing Date), with respect to the
representations and warranties set forth in Sections 2.1
(Power to sell the Company) and 2.2 (Shares in the Company)
of Appendix B; and (ii) shall be true on and as of the
Closing Date as though such representations and warranties
were made on and as of such date (even though they purport
to have been given on a date prior to the Closing Date),
with respect to the other representations and warranties (it
being understood that, for purposes of determining the
accuracy of such representations and warranties, all
"Material Adverse Effect" qualifications and other
materiality qualifications and similar qualifications
contained in such representations and warranties shall be
disregarded), except, in the case of clause (ii), for any
changes or inaccuracies permitted by the terms hereof or
consented to in writing by the Buyer or any inaccuracies
that do not have and would not reasonably be expected to
have, individually or in the aggregate, a material adverse
effect on (a) the business, financial condition,
capitalization, assets, operations or financial performance
of the Company; or (b) the ability of the Company, the
Seller or the Ultimate Parent to consummate the transactions
contemplated by this Agreement or to perform any of their
covenants or obligations under this Agreement. The Ultimate
Parent, the Seller and the Company shall have performed and
complied with, in all material respects, all terms,
conditions, covenants, obligations, agreements and
restrictions required by this Agreement to be performed or
complied with by each of them prior to or at the Closing
Date.
9.02.Performance by the Ultimate Parent, the Seller and
the Company. At the Closing, the Ultimate Parent, the
Seller and the Company shall have delivered to the Buyer
certificates signed by the President and Chief Financial
Officer of each of the Ultimate Parent, the Seller and the
Company, as applicable, as to their compliance (to such
officers' knowledge) with Subsection 9.01 hereof.
9.03. Governmental Approvals. All governmental,
regulatory and administrative agencies, departments,
bureaus, commissions and similar bodies, the consent,
authorization or approval of which is necessary under any
applicable law, rule, order or regulation for the
consummation by the Ultimate Parent, the Seller and the
Company of the transactions contemplated by this Agreement
and the operation of the business of the Company by the
Buyer shall have consented to, authorized, permitted or
approved such transactions.
9.04. Consent of Lenders, Lessors and Other Third
Parties. The Ultimate Parent, the Seller and the Company
shall have received all requisite consents and approvals of
all lenders, lessors and other third parties set forth on
Schedule 9.04 attached hereto, whose consent or approval is
required in order for the Ultimate Parent, the Seller and
the Company to consummate the transactions contemplated by
this Agreement.
9.05. Adverse Proceedings. No action or proceeding by
or before any court or other governmental body shall have
been instituted or threatened by any governmental body or
Person whatsoever which shall seek to restrain, prohibit or
invalidate the transactions contemplated by this Agreement
or which might materially and adversely affect the right of
the Buyer to own the Shares or to own or operate the
business of the Company after the Closing.
9.06. Repayment of Indebtedness; Intercompany Accounts.
Immediately prior to the Closing, all indebtedness of the
Company for borrowed money shall be repaid and satisfied in
full and all intercompany obligations, each as in existence
immediately prior to the Closing Date, between the Company
on the one hand and the Ultimate Parent, the Seller and any
of their respective affiliates (as such term is defined in
the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder) (individually, an
"Affiliate" and collectively "Affiliates") on the other hand
shall, without further action by any party, be deemed
automatically terminated with no further obligations on
behalf of the Company.
9.07. Pension Scheme.
(a) On or before the Closing Date, the Ultimate Parent
shall have made a payment to the Scheme equal to GBP800,000.
(b) On or before the Closing Date, the Ultimate Parent and
the Company shall have entered into the Deed of Indemnity in
the form appended to this Agreement at Appendix C;
(c) On or before the Closing Date, the Company shall have
entered into, and the Ultimate Parent shall have procured
that Xxxxxx Analytical Limited shall have entered into, the
Deed of Agreement in the form appended to this Agreement at
Appendix D.
9.08. Transition Agreement. The parties shall have
entered into a transition services agreement in the form
attached hereto as Exhibit B (the "Transition Agreement").
9.09. Material Adverse Effect. Since December 31, 2009,
there shall not have occurred any fact, circumstance, event,
condition, occurrence or change that has had or could
reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect on the Company.
"Material Adverse Effect" shall mean any fact, circumstance,
event, condition, occurrence or change that, considered
together with all other facts, circumstances, events,
conditions, occurrences or changes that have occurred prior
to the date of determination of the occurrence of the
Material Adverse Effect, is materially adverse to, or has
resulted in a material adverse effect on: (a) the business,
financial condition, capitalization, assets, operations or
financial performance of the Company; or (b) the ability of
the Company, the Seller or the Ultimate Parent to consummate
the transactions contemplated by this Agreement or to
perform any of their covenants or obligations under this
Agreement, other than any such facts, circumstances, events,
conditions, occurrences or changes (i) generally affecting
(A) the industries in which the Company and/or its customers
operate or (B) the economy, credit or financial or capital
markets, in the United Kingdom, United States or elsewhere
in the world, including changes in interest or exchange
rates, or (ii) resulting from (A) changes after the date
hereof in applicable laws or regulations or in generally
accepted accounting principles or in accounting standards,
(B) acts of war, sabotage or terrorism, or any escalation or
worsening of any such acts of war, sabotage or terrorism,
(C) natural disasters, or (iii) resulting from any actions
taken or failure to take action, in each case, to which the
Buyer has requested in writing, or the taking of any action
required by this Agreement, except in the case of clauses
(i) and (ii) above, to the extent any such facts,
circumstances, events, conditions, occurrences or changes
have a materially disproportionate impact on the Company
relative to other companies in the industries and other
geographic markets in which the Company operates.
9.10. Closing Deliveries. The Buyer shall have received
at or prior to the Closing such documents, instruments or
certificates as the Buyer may reasonably request including,
without limitation:
(a) transfers of the Shares executed by the Seller in
favour of the Buyer;
(b) the share certificates for the Shares in the name of
the Seller;
(c) the waivers, consents and other documents required to
enable the Buyer to be registered as the holder of the
Shares;
(d) an irrevocable power of attorney in agreed form given
by the Seller in favour of the Buyer to enable the
beneficiary to exercise all voting and other rights
attaching to the Shares before the transfer of the Shares is
registered in the register of members;
(e) the original of any power of attorney under which any
document to be delivered to the Buyer under this Section
9.10 has been executed;
(f) in relation to the Company, the statutory registers and
minute books (written up to the time of Closing), the common
seal, certificate of incorporation and any certificates of
incorporation on change of name;
(g) the written resignation of the auditors of the Company
accompanied by:
(i) a statement in accordance with section 519 of the
Companies Xxx 0000 that there are no circumstances connected
with the auditors' resignation which should be brought to
the notice of the members or creditors of the Company; and
(ii) a written assurance that the resignation and statement
have been, or will be, deposited at the registered office of
the Company in accordance with section 519 of the Companies
Xxx 0000;
(h) statements from each bank at which the Company has an
account, giving the balance of each account at the close of
business on the last Business Day before Closing; all cheque
books in current use by the Company and written confirmation
that no cheques have been written since those statements
were prepared; details of the Company's cash book balances;
and reconciliation statements reconciling the cash book
balances and the cheque books with the bank statements
delivered;
(i) all title deeds and other documents relating to the
Properties (as defined in Appendix B hereto);
(j) evidence, in agreed form, that any indebtedness or
other liability of the kind described in Section 2.17 of
Appendix B has been discharged;
(k) evidence, in agreed form, that the Company has been
discharged from any responsibility for the indebtedness, or
for the default in the performance of any obligation, of any
other person;
(l) to the extent applicable, all charges, mortgages,
debentures and guarantees to which the Company is a party
and, in relation to each such instrument and any covenants
connected with it:
(i) a sealed discharge or release in the agreed form; and
(ii) if applicable, a sworn and completed Form MG02
(statement of satisfaction in full or in part of the
mortgage or charge);
(m) such certificates of the officers of the Ultimate
Parent, the Seller and the Company (confirming that to their
knowledge and belief the conditions specified in this
Section 9 have been complied with) and such other documents
evidencing satisfaction of the conditions specified in this
Section 9 as the Buyer shall reasonably request;
(n) secretary's certificates attesting to the incumbency of
officers, the authenticity of the resolutions authorizing
the transactions contemplated by this Agreement, and the
authenticity and continuing validity of constitutional
documents for each of the Ultimate Parent, the Seller and
the Company;
(o) the Transition Agreement, duly executed by the Company,
the Seller and the Ultimate Parent;
(p) written resignations of all members of the Company's
Board of Directors other than Xxx Xxxxxx; and
(q) a cross receipt duly executed by the Seller.
10. Conditions to Obligations of the Seller and the
Ultimate Parent
The obligations of the Seller and the Ultimate
Parent under this Agreement are subject to the fulfillment,
at the Closing Date, of the following conditions precedent,
each of which may be waived in writing in the sole
discretion of the Seller and the Ultimate Parent:
10.01. Continued Truth of Representations and Warranties
of the Buyer; Compliance with Covenants and Obligations.
The representations and warranties of the Buyer in this
Agreement (i) shall be true, in all material respects, on
and as of the Closing Date as though such representations
and warranties were made on and as of such date, with
respect to the representations and warranties set forth in
Sections 5.01 (Organization and Authority) and 5.02
(Authorization); and (ii) shall be true on and as of the
Closing Date as though such representations and warranties
were made on and as of such date, with respect to the other
representations and warranties made by the Buyer in this
Agreement (it being understood that, for purposes of
determining the accuracy of such representations and
warranties, all "Material Adverse Effect" qualifications and
other materiality qualifications and similar qualifications
contained in such representations and warranties shall be
disregarded), except, in the case of clause (ii), for any
changes or inaccuracies permitted by the terms hereof or
consented to in writing by the Ultimate Parent or any
inaccuracies that do not have and would not reasonably be
expected to have, individually or in the aggregate, a
material adverse effect on (a) the business, financial
condition, capitalization, assets, operations or financial
performance of the Buyer; or (b) the ability of the Buyer to
consummate the transactions contemplated by this Agreement
or to perform any of its covenants or obligations under this
Agreement. The Buyer shall have performed and complied
with, in all material respects, all terms, conditions,
covenants, obligations, agreements and restrictions required
by this Agreement to be performed or complied with by it
prior to or at the Closing Date.
10.02. Corporate Proceedings. All corporate and other
proceedings required to be taken on the part of the Buyer to
authorize or carry out this Agreement shall have been taken.
10.03. Governmental Approvals. All governmental
agencies, departments, bureaus, commissions and similar
bodies, the consent, authorization or approval of which is
necessary under any applicable law, rule, order or
regulation for the consummation by the Buyer of the
transactions contemplated by this Agreement shall have
consented to, authorized, permitted or approved such
transactions.
10.04. Consents of Lenders, Lessors and Other Third
Parties. The Buyer shall have received all requisite
consents and approvals of all lenders, lessors and other
third parties whose consent or approval is required in order
for the Buyer to consummate the transactions contemplated by
this Agreement, including, without limitation, those set
forth on Schedule 10.04 attached hereto.
10.05. Adverse Proceedings. No action or proceeding by
or before any court or other governmental body shall have
been instituted or threatened by any governmental body or
Person whatsoever which shall seek to restrain, prohibit or
invalidate the transactions contemplated by this Agreement
or which might materially and adversely affect the right of
the Seller to transfer the Shares.
10.06. Closing Deliveries. The Seller and the Ultimate
Parent shall have received at or prior to the Closing such
documents, instruments or certificates as the Buyer may
reasonably request including, without limitation:
(a) such certificates of the Buyer's officers (confirming
that to their knowledge and belief the conditions specified
in this Section 10 have been complied with) and such other
documents evidencing satisfaction of the conditions
specified in this Section 10 as the Seller and the Ultimate
Parent shall reasonably request;
(b) a certificate of the Secretary of State of the State of
Delaware as to the legal existence and good standing of the
Buyer in Delaware;
(c) a certificate of the Secretary of the Buyer attesting
to the incumbency of the Buyer's officers, the authenticity
of the resolutions authorizing the transactions contemplated
by this Agreement, and the authenticity and continuing
validity of the charter documents and by-laws delivered
pursuant to Subsection 5.01;
(d) the Transition Agreement, duly executed by the Buyer;
(e) payment of the Initial Payment; and
(f) a cross receipt duly executed by the Buyer.
10.07. Repayment of Indebtedness; Intercompany Accounts.
Immediately prior to the Closing, all indebtedness of the
Ultimate Parent and/or Seller for borrowed money shall be
repaid and satisfied in full and all intercompany
obligations, each as in existence immediately prior to the
Closing Date, between the Company on the one hand and the
Ultimate Parent, the Seller and any of their respective
affiliates (as such term is defined in the Securities Act of
1933, as amended, and the rules and regulations promulgated
thereunder) (individually, an "Affiliate" and collectively
"Affiliates") on the other hand shall, without further
action by any party, be deemed automatically terminated with
no further obligations on behalf of Ultimate Parent and/or
Seller.
11. Reserved.
12. Indemnification
12.01. By the Ultimate Parent and Seller. Following the
Closing, the Ultimate Parent and Seller shall jointly and
severally indemnify and hold harmless the Buyer from and
against all claims, damages, losses, liabilities, costs and
expenses (including, without limitation, settlement costs
and any reasonable legal, accounting or other expenses for
investigating or defending any actions or threatened
actions) (collectively, the "Losses") suffered by the Buyer
or the Company in connection with each and all of the
following:
(a) any breach of any representation or warranty made by
the Ultimate Parent, the Seller or the Company in Sections
2, 3 and 4 of this Agreement;
(b) any breach of any covenant, agreement or obligation of
the Ultimate Parent, the Seller or the Company contained in
this Agreement;
(c) any tax liabilities or obligations of the Company (i)
with respect to any taxable period or portion thereof ending
on or before the Closing Date and (ii) arising as a result
of implementing the terms of this Agreement, including,
without limitation, taxes arising with respect to any
termination of intercompany obligations pursuant to Section
9.06 of this Agreement (provided that any taxable income
arising from such termination of intercompany obligations
shall be offset by any tax losses pursuant to Section
13.05(f)); and
(d) any liabilities of the Ultimate Parent, the Seller and
the Company to the extent arising from the period prior to
the Closing Date, other than the Assumed Liabilities, as
defined in Exhibit C hereto.
12.02. By the Ultimate Parent and Seller in relation to
the Xxxxxx Analytical Retirement Benefit Scheme. Following
the Closing, the Ultimate Parent and Seller shall jointly
and severally indemnify and hold harmless the Buyer from and
against all present and future obligations and liabilities
of the Company to make payments to the Xxxxxx Analytical
Limited Retirement Benefit Scheme (the "Scheme Liabilities")
save that, if the Company commits or suffers an Insolvency
Event within five years from the Closing Date otherwise than
as a consequence of losses in the course of its trade, the
amount due under this indemnity shall be reduced by the loss
suffered by the Ultimate Parent and/or the Seller as a
consequence of that Insolvency Event. In ascertaining the
loss suffered by the Ultimate Parent and/or the Seller, it
shall be assumed that the Xxxxxx Analytical Retirement
Benefit Scheme would start to wind up on the fifth
anniversary of the Closing Date in any event and that the
Ultimate Parent would be liable under this indemnity to pay
the liability of the Company arising under s75 Pensions Xxx
0000 at that time. For the purposes of this clause,
"Insolvency Event" means an 'insolvency event' as defined in
section 121 of the Pensions Xxx 0000 or regulations made
from time to time thereunder; or the receipt by the Pension
Protection Fund of an application or notification from the
trustees of the Scheme or the Pensions Regulator that the
Company is unlikely to continue as a going concern, which is
purported to be made in accordance with section 129 of the
Pensions Xxx 0000 or regulations made from time to time
thereunder. This indemnity shall only apply to the extent
that such Scheme Liabilities are not recoverable under the
Deed of Indemnity entered into between the Ultimate Parent
and the Company in the form appended to this Agreement at
Appendix C and the Buyer acknowledges that there should be
no double recovery.
12.03. By the Buyer. Following the Closing, the Buyer
shall indemnify and hold harmless the Ultimate Parent, the
Seller and the Company from and against all Losses in
connection with each and all of the following:
(a) any breach of any representation or warranty made by
the Buyer in Section 5 of this Agreement;
(b) any breach of any covenant, agreement or obligation of
the Buyer contained in this Agreement;
(c) the Assumed Liabilities; and
(d) the conduct of the business of the Company after the
Closing.
12.04. Claims for Indemnification. Whenever any claim
shall arise for indemnification under this Section 12, the
party seeking indemnification (the "Indemnified Party"),
shall promptly notify the other party (the "Indemnifying
Party") of the claim in writing and, when known, the facts
constituting the basis for such claim. In the event of any
such claim for indemnification hereunder resulting from or
in connection with any claim or legal proceedings by a third
party, the notice shall specify, if known, the amount or an
estimate of the amount of the Losses arising therefrom.
12.05. Defense by the Indemnifying Party. In connection
with any claim which may give rise to indemnity hereunder
resulting from or arising out of any claim or legal
proceeding by a Person other than the Indemnified Party, the
Indemnifying Party, at its sole cost and expense, shall be
entitled to participate in the defense of such claim or
legal proceeding and may, upon written notice to the
Indemnified Party within thirty (30) days following the
Indemnifying Party's receipt of the Indemnified Party's
notice of such claim pursuant to Subsection 12.04, assume
and control the defense of any such claim or legal
proceeding. If the Indemnifying Party assumes the defense
of any such claim or legal proceeding, the Indemnifying
Party shall select counsel reasonably acceptable to the
Indemnified Party to conduct the defense of such claims or
legal proceedings. The Indemnifying Party shall not consent
to a settlement of, or the entry of any judgment arising
from, any such claim or legal proceeding, without the prior
written consent of the Indemnified Party (which consent
shall not be unreasonably withheld or delayed) unless (a)
there is no finding or admission of any violation of law or
any violation of the rights of any Person and no effect on
any other claims that may be made against the Indemnified
Party and (b) the sole relief provided is monetary damages
that are paid in full by the Indemnifying Party. The
Indemnified Party shall be entitled to participate in (but
not control) the defense of any such action, with its own
counsel and at its own expense. If the Indemnifying Party
does not assume the defense of any such claim or litigation
resulting therefrom within thirty (30) days after the date
such claim is made: (x) the Indemnified Party may defend
against such claim or litigation in such manner as it may
deem appropriate, including, but not limited to, settling
such claim or litigation, after giving notice of the same to
the Indemnifying Party, on such terms as the Indemnified
Party may deem appropriate in its reasonable discretion in
light of its evaluation of the probability of an adverse
judgment in connection with such claim or litigation, the
estimated damages that would be awarded by a court rendering
such potential adverse judgment and its estimate of the out-
of-pocket costs of defending such claim or litigation, and
(y) the Indemnifying Party shall be entitled to participate
in (but not control) the defense of such action, with its
counsel and at its own expense. If the Indemnifying Party
thereafter seeks to question the manner in which the
Indemnified Party defended such third party claim or the
amount or nature of any such settlement, the Indemnifying
Party shall have the burden to prove by a preponderance of
the evidence that the Indemnified Party did not defend or
settle such third party claim in a reasonably prudent manner
consistent with clause (x) of this Subsection 12.05.
12.06. Payment of Indemnification Obligation. Each of
the Ultimate Parent and the Seller hereby agrees that any
claim for indemnification by the Buyer under this Agreement
relating to amounts paid or damages incurred by the Buyer,
which claim has been agreed upon by the parties, resolved
pursuant to a final, non-appealable judgment of a court of
competent jurisdiction or properly settled in accordance
with the terms of this Section 12, may, at the option of the
Buyer, be offset against any amount payable in respect of
the Final Payment, if any, pursuant to Subsection 1.06
hereof. All indemnification by the Ultimate Parent
hereunder (to the extent not satisfied in the manner
specified in the preceding sentence), and all
indemnification by the Buyer hereunder, shall be effected by
payment of cash or delivery of a cashier's or certified
check or wire transfer of immediately available funds to the
Indemnified Party in the amount of the indemnification
liability. For all purposes of this Section 12, "Losses"
shall be net of (a) any insurance or other recoveries
payable to the Indemnified Party or its Affiliates in
connection with the facts giving rise to the right of
indemnification and (b) any tax benefit available to such
Indemnified Party or its Affiliates arising in connection
with the accrual, incurrence or payment of any such Losses,
provided that such tax benefit is realizable in the same
year in which such Losses occur.
12.07. Survival of Representations and Warranties and
Covenants; Claims for Indemnification for Representations
and Warranties. All representations, warranties, covenants
and agreements made by any party in this Agreement shall
survive the Closing Date and the consummation of the
transactions contemplated hereby. Notwithstanding the
foregoing, no party shall be entitled to recover for any
Losses pursuant to this Section 12 unless written notice of
a claim thereof is delivered to the Indemnifying Party
before the Applicable Limitation Date. For purposes of this
Agreement, (a) there shall be no Applicable Limitation Date
for the representations and warranties set forth in Sections
2.1 (Power to sell the Company) and 2.2 (Shares in the
Company) of Appendix B, and Sections 5.01 (Organization and
Authority) and 5.02 (Authorization) (together, the
"Fundamental Warranties"), and (b) the term "Applicable
Limitation Date" shall mean, with respect to (i) the
representations and warranties set forth in Section 2.22
(Intellectual Property) of Appendix B, the date which is
three (3) years following the Closing, (ii) the
representations and warranties set forth in Section 2.21
(Environment and Health and Safety) of Appendix B, the date
which is five (5) years following the Closing, (iii) the
representations and warranties set forth in Section 2.29
(Taxation: General) of Appendix B, the date which is sixty
(60) days following the expiration of the applicable statute
of limitations, (iv) the remaining representations and
warranties that date that is eighteen (18) months after the
Closing Date, and (v) the covenants and agreements set forth
in Section 13, the time period set forth in the applicable
section, or if no such time period is specified, that date
which is eighteen (18) months after the Closing Date.
12.08. Limitation on Indemnification for Representations
and Warranties. Anything contained in this Agreement to the
contrary notwithstanding, the Indemnifying Party shall not
be required to make indemnification payments for Losses
pursuant to Section 12.01(a) (excluding Fundamental
Warranties) or Section 12.03(a) (excluding Fundamental
Warranties):
(a) unless and until the Indemnified Party has incurred
Losses pursuant to that Section in excess of $80,000 in the
aggregate, at which point, subject to the other limitations
set forth in this Agreement, the Indemnifying Party shall be
liable for all such Losses incurred from the first dollar;
and
(b) in the case of indemnification by the Ultimate Parent
and Seller, to the extent such indemnification payments
would exceed in the aggregate the amount of the Initial
Payment (the "Maximum Indemnification Amount"); provided,
however, that the foregoing Maximum Indemnification Amount
shall not apply to Losses arising out of, resulting from or
related to (a) any and all breaches of any Fundamental
Warranties, or (b) any act of fraud committed against the
Buyer by the Ultimate Parent, the Seller or the Company or
any of their respective officers, employees or
representatives; and
(c) if there is a Loss that constitutes an adjustment
pursuant to Section 1.04 or 1.06 of this Agreement, then to
the extent such adjustment is actually made, the Buyer will
not also be able to claim indemnification hereunder for such
Loss, but may claim indemnification hereunder with respect
to any excess above the adjusted amount relating to such
Loss, and
(d) in the case of indemnification by the Buyer, to the
extent such indemnification payments would exceed $1,000,000
in the aggregate; provided, however, that the foregoing
limitation shall not apply to Losses arising out of,
resulting from or related to (a) any and all breaches of any
Fundamental Warranties, or (b) any act of fraud committed
against the Ultimate Parent or the Seller by the Buyer or
any of its officers, employees or representatives.
12.09. Liabilities. With respect to any and all
liabilities of the Company, the Seller and the Ultimate
Parent arising from or relating to the period prior to the
Closing Date, except for the Assumed Liabilities (as defined
in Exhibit C attached hereto), it is understood and agreed
that the Buyer shall not be responsible for any such
liabilities of the Company, the Seller or the Ultimate
Parent. For the sake of clarity, the temporal limitations
and monetary limitations set forth in Sections 12.07 and
12.08 that are applicable solely with respect to
indemnification claims pursuant to Section 12.01(a) relating
to breaches of representations and warranties shall not
apply in any way to indemnification claims asserted with
respect to any liabilities described in Section 12.01,
Subsections (b), (c), and/or (d), and Section 12.02.
12.10. Sole and Exclusive Remedy. Each party
acknowledges and agrees that after the Closing Date, in the
absence of fraud, its sole and exclusive remedy with respect
to any and all claims relating to arising out of any
representation, warranty, covenant, agreement or
certification made by the other party pursuant to this
Agreement shall be pursuant to the provisions of this
Section 12, including pursuant to the specific performance,
injunctive or other relief provided for below. The parties
acknowledge that in the event of a breach of this Agreement,
money damages may be inadequate and the non-breaching party
may have no adequate remedy at law. Accordingly, the
parties agree that the non-breaching party shall have the
right, in addition to any other rights and remedies existing
in its favor, to enforce its rights and the breaching
party's obligations hereunder not only by an action or
actions for damages pursuant to the indemnification
provisions of this Section 12, but also by an action or
actions for specific performance, injunctive or other
equitable relief (other than rescission), and nothing set
forth in this Agreement shall be deemed to prohibit or limit
any party's right at any time to seek such relief for any
failure of any other party to perform any covenant or
agreement contained herein.
13. Post-Closing Agreements
The Ultimate Parent and the Seller agree that from
and after the Closing Date:
13.01. Proprietary Information.
(a) The Ultimate Parent and the Seller and each of their
Affiliates shall hold in confidence and shall use their
reasonable best efforts to have all officers, directors and
personnel who continue after the Closing to be employed by
the Ultimate Parent or the Seller or any Affiliate thereof
to hold in confidence all knowledge and information of a
secret or confidential nature with respect to the business
of the Company and not to disclose, publish or make use of
the same without the consent of the Buyer, except that this
provision shall not apply (i) as may otherwise be required
by law, provided that the Ultimate Parent or the Seller, as
the case may be, provides prior written notice of such
required disclosure to the Buyer and takes all reasonable
and lawful action to avoid and/or minimize the extent of
such disclosure, (ii) as may be necessary or appropriate in
connection with the enforcement of this Agreement, or (iii)
to the extent that such information shall have become public
knowledge other than by breach of this Agreement by the
Ultimate Parent or the Seller. The restrictions of this
Subsection 13.01 shall survive for a period of five (5)
years following the Closing.
(b) If (i) the employment of an officer, director or other
employee of the Seller or any Affiliate thereof, to whom
secret or confidential knowledge or information concerning
the business of the Company has been disclosed, is
terminated and (ii) such individual is subject to an
obligation to maintain such knowledge or information in
confidence after such termination, the Ultimate Parent and
the Seller shall, upon request by the Buyer, take all
reasonable steps, at their expense, to enforce such
confidentiality obligation in the event of an actual or
threatened breach thereof.
(c) The Ultimate Parent and the Seller agree that the
remedy at law for any breach of Subsection 13.01 would be
inadequate and that the Buyer shall be entitled to
injunctive relief in addition to any other remedy it may
have upon breach of any provision of Subsection 13.01.
13.02. Waiver and Release. Effective as of the Closing,
each of the Ultimate Parent and the Seller, on behalf of
itself and each of its past, present and future Affiliates,
beneficiaries and assigns ("Related Persons") hereby
releases and forever discharges the Company and each of its
past, present and future Affiliates, subsidiaries,
shareholders, stockholders, members, successors and assigns,
and their respective officers, directors and employees (each
individually, a "Releasee" and collectively, "Releasees"),
from any and all known claims, demands, proceedings, causes
of action, court orders, obligations, contracts, agreements
(express or implied), debts and liabilities under or
relating to the Shares, the Company or its predecessors in
interest both at law and in equity, which the Ultimate
Parent, the Seller or any of their respective Related
Persons now has or has ever had against the Releasees as a
result of any act, circumstance, occurrence, transaction,
event or omission occurring prior to the Closing Date.
Notwithstanding the foregoing, the Seller, the Ultimate
Parent and their respective Related Persons do not release
the Company or the Buyer from any claims arising out of or
relating to this Agreement or the transactions contemplated
hereby.
13.03. No Solicitation of Former Employees. Except as
provided by law, for a period of four (4) years after the
Closing Date, neither the Ultimate Parent, the Seller nor
any of their Affiliates shall solicit any Person who was an
employee of the Company on the date hereof or the Closing
Date to terminate his employment with the Buyer (or the
Company, as the case may be) or to become an employee of the
Ultimate Parent or the Seller or their Affiliates provided,
however, that general solicitations of employment not
specifically directed at employees of the Company on the
date hereof or the Closing Date shall not be deemed to
constitute a violation of this Subsection 13.03.
13.04. Non-Competition Agreement.
(a) For a period of four (4) years after the Closing Date,
neither the Ultimate Parent, the Seller nor any of their
Affiliates shall, except as an officer or employee of the
Company: (i) develop, manufacture, market or sell any
product which competes with any existing product, or any
product proposed as of the Closing Date to be, manufactured
by the Company on or prior to the Closing Date, or
(ii) engage in any business competitive with the business of
the Company as conducted on the date hereof or on the
Closing Date, in the United Kingdom, the United States or
any other country in which the Company conducted its
business during the two (2) years prior to the Closing Date
(any of the actions described in clauses (i) or (ii), a
"Competitive Business"). Such non-compete covenant will not
prevent the Ultimate Parent or any of its subsidiaries or
portfolio companies from acquiring (whether by means of a
share or asset purchase) as part of a larger acquisition any
interest in any business which engages or may engage in a
Competitive Business (a "Competitive Acquiree") provided
that (a) the revenues of such Competitive Acquiree that
derive from any Competitive Business do not, in the
aggregate, constitute more than twenty five percent (25%) of
the revenues of the Competitive Acquiree, and (b) the
Competitive Business shall not thereafter be carried on
under a corporate or trading name incorporating the word
"Xxxxxx Crystals" or any colourable imitation thereof. This
Subsection 13.04 shall not apply to then existing or future
operations of any Person that acquires the Ultimate Parent
or the Seller (including its continuation of such then
existing operations), by way of merger, stock purchase,
asset purchase or otherwise (other than a merger for the
purpose of effecting a reincorporation of Ultimate Parent or
Seller), or any of such Person's Affiliates provided such
acquirer thereafter does not utilize any assets, rights,
know-how, facilities, data, sales or marketing or
distribution systems of the Ultimate Parent, the Seller or
their respective Affiliates (that were Affiliates prior to
such acquisition), or any employees of the Ultimate Parent,
the Seller or their respective Affiliates (that were
Affiliates prior to such acquisition) in the activities that
would, but for this sentence, be a violation of this
Subsection 13.04.
(b) The parties hereto agree that the duration and
geographic scope of the non-competition provision set forth
in this Subsection 13.04 are reasonable. In the event that
any court of competent jurisdiction determines that the
duration or the geographic scope, or both, are unreasonable
and that such provision is to that extent unenforceable, the
parties hereto agree that the provision shall remain in full
force and effect for the greatest time period and in the
greatest area that would not render it unenforceable. The
parties intend that this non-competition provision shall be
deemed to be a series of separate covenants, one for the
United Kingdom and one for each and every county of each and
every state of the United States of America and each and
every political subdivision of each and every country
outside the United States of America where this provision is
intended to be effective. The Ultimate Parent and the
Seller agree that damages are an inadequate remedy for any
breach of this provision and that the Buyer shall, whether
or not it is pursuing any potential remedies at law, be
entitled to equitable relief in the form of preliminary and
permanent injunctions without bond or other security upon
any actual or threatened breach of this non-competition
provision.
13.05. Tax Returns
(a) The Seller or its duly authorised agent shall at the
Seller's sole expense prepare the corporation tax returns of
the Company for all accounting periods ended on or before
the Accounts Date to the extent that they have not been
prepared prior to Closing. The Seller shall give Buyer a
reasonable opportunity to comment on such return prior to
its submission to the relevant tax authority and shall take
into account the Buyer's reasonable comments in relation to
any period ending on or prior to the Closing.
(b) The Buyer shall procure that the Company shall cause
the tax returns mentioned in Subsection 13.05(a) above to be
authorised, signed and submitted to the relevant Taxation
Authority without amendment or with such amendments as the
Seller shall reasonably agree provided that the Buyer shall
not be obliged to procure that the Company takes any such
action as is mentioned in this Subsection 13.05 in relation
to any tax return that is not true and accurate in all
material respects.
(c) The Buyer shall provide the Seller with a copy of the
corporation tax return relating to the accounting period
current at the Closing at least twenty-eight (28) days prior
to the date for submission of that corporation tax return.
The Buyer shall give the Seller a reasonable opportunity to
comment on such return prior to its submission to the
relevant tax authority and shall take into account the
Seller's reasonable comments in relation to any period
ending on or prior to the Closing.
(d) The Seller or its duly authorised agent shall at the
sole expense of the Seller prepare all documentation and
deal with all matters (including correspondence) relating to
the tax returns of the Company for all accounting periods
ended on or prior to the Accounts Date and the Seller shall
provide the Buyer with copies of any correspondence relating
to such tax returns prior to their submission and copies of
any correspondence from the relevant Taxation Authority.
The Seller shall give the Buyer a reasonable opportunity to
comment on such correspondence prior to submission and shall
take account of the Buyer's reasonable comments. The Buyer
shall upon reasonable notice (having regard to the
circumstances) being given by the Seller procure that the
Company shall afford such access to its books, accounts and
records and personnel as is necessary and reasonable to
enable the Seller or its duly authorised agent to prepare
those tax returns and conduct matters relating thereto in
accordance with the Seller's rights under this Subsection
13.05.
(e) The Buyer shall procure that the Company shall at the
request of the Seller do all such things which may be
reasonably necessary to ensure that full effect is given to
any claim, surrender or election made to or by the Company
and which is reflected in the Accounts with respect to
accounting periods ended on or before the Accounts date
including for the avoidance of doubt signing and submitting
any revised claim, election or surrender and progressing any
such claim, surrender or election or revised claim surrender
or election with the relevant Taxation Authority.
(f) The Buyer agrees that the Seller may claim (for no cost
or payment) for itself, for members of its group or for the
Company (in order to mitigate any tax liabilities for a
period or part period before or up to the Closing and/or to
mitigate any tax liabilities arising with respect to any
termination of intercompany obligations pursuant to Section
9.06 of this Agreement) the benefit of any loss, relief or
credit from taxation that arises with respect to any taxable
period or part period before the Closing (except for any
benefit attributable to a carryback of any loss, relief or
credit arising from any taxable period (or portion thereof)
ending after the Closing Date), and the Buyer shall procure
that the Company shall give effect to such claims in dealing
with the tax returns and any documentation and that neither
it nor the Company will act in any way contrary to such
claims.
13.06. Pension Scheme. No later than the fifth (5th)
anniversary of the Closing Date, Ultimate Parent and Seller
shall take all actions necessary to either (a) effect a full
winding up of the Scheme or (b) a complete release of the
Company from any and all obligations or liabilities to the
Scheme. The Buyer shall procure that the Company will take
all reasonable steps that the Ultimate Parent and/or the
Seller may request, in order to assist the Ultimate Parent
and the Seller to achieve this, provided that this shall be
at the Ultimate Parent's and the Seller's risk and that the
Ultimate Parent and the Seller agree to meet the Buyer
and/or the Company's reasonable costs for providing such
assistance.
14. Termination of Agreement; Damages
14.01. Termination by Lapse of Time. This Agreement
shall terminate at 5:00 p.m., Boston Time, on August 31,
2010, if the transactions contemplated hereby have not been
consummated, unless such date is extended by the written
consent of the parties hereto.
14.02. Termination by Agreement of the Parties. This
Agreement may be terminated by the mutual written agreement
of the parties hereto. In the event of such termination by
agreement, the Buyer shall have no further obligation or
liability to the Ultimate Parent, the Seller or the Company
under this Agreement, and the Ultimate Parent and the Seller
shall have no further obligation or liability to the Buyer
under this Agreement.
14.03. Termination by Reason of Breach. This Agreement
may be terminated by the Ultimate Parent and the Seller, if
at any time prior to the Closing there shall occur a
material breach of any of the representations, warranties or
covenants of the Buyer or the failure by the Buyer to
materially perform any condition or obligation hereunder
such that, if not cured within thirty (30) days, the
conditions set forth in Subsection 10.01 would not be
satisfied; provided that the Ultimate Parent and the Seller
may not terminate this Agreement pursuant to this Subsection
14.03 if the Ultimate Parent or the Seller shall have
materially breached this Agreement. This Agreement may be
terminated by the Buyer, if at any time prior to the Closing
there shall occur a material breach of any of the
representations, warranties or covenants of the Ultimate
Parent, the Seller or the Company or the failure of the
Ultimate Parent, the Seller or the Company to materially
perform any condition or obligation hereunder such that, if
not cured, the conditions set forth in Subsection 9.01 would
not be satisfied; provided that the Buyer may not terminate
this Agreement pursuant to this Subsection 14.03 if (i) the
Buyer shall have materially breached this Agreement or (ii)
such breach by the Ultimate Parent, the Seller or the
Company is curable by such party, through the exercise of
commercially reasonable efforts, within thirty (30) days
after the Ultimate Parent's, the Seller's or the Company's,
as the case may be, receipt of written notice from the Buyer
of such breach hereunder and the Ultimate Parent, the Seller
or the Company, as the case may be, continues to exercise
commercially reasonable efforts to cure such breach through
such 30-day period and such breach is cured within thirty
(30) days after the Ultimate Parent's, the Seller's or the
Company's, as the case may be, receipt of written notice
from the Buyer of such breach.
14.04. Availability of Remedies at Law. In the event
this Agreement is terminated by the Buyer, on the one hand,
or the Ultimate Parent and the Seller, on the other hand,
pursuant to the provisions of this Section 14, the parties
hereto shall have available to them all remedies afforded to
them by applicable law.
15. Dispute Resolution
15.01. Consent to Jurisdiction and Venue.
(a) EACH OF THE PARTIES HERETO HEREBY CONSENTS TO THE
EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF
DELAWARE, OR THE UNITED STATES DISTRICT COURT FOR DELAWARE,
AS WELL AS TO THE JURISDICTION OF ALL COURTS TO WHICH AN
APPEAL MAY BE TAKEN FROM SUCH COURTS, FOR THE PURPOSE OF ANY
SUIT, ACTION OR OTHER PROCEEDING ARISING OUT OF, OR IN
CONNECTION WITH, THIS AGREEMENT OR ANY OF THE CONTEMPLATED
TRANSACTIONS. EACH PARTY HEREBY EXPRESSLY WAIVES ANY AND
ALL RIGHTS TO BRING ANY SUIT, ACTION OR OTHER PROCEEDING IN
OR BEFORE ANY COURT OR TRIBUNAL OTHER THAN THE COURTS
DESCRIBED ABOVE AND COVENANTS THAT IT SHALL NOT SEEK IN ANY
MANNER TO RESOLVE ANY DISPUTE OTHER THAN AS SET FORTH IN
THIS SECTION 15 OR TO CHALLENGE OR SET ASIDE ANY DECISION,
AWARD OR JUDGMENT OBTAINED IN ACCORDANCE WITH THE PROVISIONS
HEREOF.
(b) EACH OF THE PARTIES HERETO HEREBY EXPRESSLY WAIVES ANY
AND ALL OBJECTIONS IT MAY HAVE TO VENUE, INCLUDING, WITHOUT
LIMITATION, THE INCONVENIENCE OF SUCH FORUM, IN ANY OF SUCH
COURTS. IN ADDITION, EACH OF THE PARTIES CONSENTS TO THE
SERVICE OF PROCESS BY PERSONAL SERVICE OR ANY MANNER IN
WHICH NOTICES MAY BE DELIVERED HEREUNDER IN ACCORDANCE WITH
SECTION 16 OF THIS AGREEMENT.
15.02. Waiver of Jury Trial. EACH PARTY HERETO
ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE
UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND
DIFFICULT ISSUES, AND THEREFORE IT HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY
ARISING OUT OF OR RELATING TO THIS AGREEMENT AND ANY OF THE
AGREEMENTS DELIVERED IN CONNECTION HEREWITH OR THE
CONTEMPLATED TRANSACTIONS. EACH PARTY HERETO CERTIFIES AND
ACKNOWLEDGES THAT (A) NO REPRESENTATIVE, AGENT OR ATTORNEY
OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE,
THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION,
SEEK TO ENFORCE SUCH WAIVER, (B) IT UNDERSTANDS AND HAS
CONSIDERED THE IMPLICATIONS OF SUCH WAIVER, (C) IT MAKES
SUCH WAIVER VOLUNTARILY, AND (D) IT HAS BEEN INDUCED TO
ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL
WAIVERS AND CERTIFICATIONS IN THIS SECTION 15.
16. Notices
Any notices or other communications required or
permitted hereunder shall be sufficiently given if delivered
personally or sent by facsimile, e-mail transmission,
federal express, registered or certified mail, postage
prepaid, addressed as follows or to such other address of
which the parties may have given notice:
To the Buyer: Dynasil Corporation of America
000 Xxxxxx Xxxxxx
Xxxxxx, XX 00000
Fax: (000) 000-0000
Attention: President and Chief
Executive Officer
With a copy to: Xxxxxxx Xxxxxx Xxxxxx & Dodge LLP
000 Xxxxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Fax: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxxx,
Esq.
To the Ultimate Newport Corporation
Parent or the 0000 Xxxxx Xxxxxx
Xxxxxx: Xxxxxx, XX 00000
Fax: (000) 000-0000
Attention: General Counsel
With a copy to: Xxxxxxxxx Xxxxx Xxxxxxx & Xxxxx
000 Xxxxxxx Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx Xxxxx, XX 00000
Fax: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxx,
Esq.
Unless otherwise specified herein, such notices or other
communications shall be deemed received (a) on the date
delivered, if delivered personally, (b) upon receipt of a
confirmed transmission if sent by facsimile or e-mail
transmission, or (c) three (3) Business Days after being
sent, if sent by registered or certified mail.
17. Successors and Assigns. This Agreement shall be
binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns, except that the
Buyer, on the one hand, and the Ultimate Parent, the Seller
and the Company, on the other hand, may not assign their
respective obligations hereunder without the prior written
consent of the other party; provided, however, that the
Buyer may assign this Agreement, and its rights and
obligations hereunder, to a wholly-owned subsidiary of the
Buyer; provided further that such assignment by the Buyer
shall not relieve the Buyer of any of its obligations
hereunder. Any assignment in contravention of this
provision shall be void. No assignment shall release the
Buyer, the Ultimate Parent, the Seller or the Company from
any obligation or liability under this Agreement.
18. Entire Agreement; Amendments; Attachments
(a) This Agreement, all Schedules and Exhibits hereto, and
all agreements and instruments to be delivered by the
parties pursuant hereto represent the entire understanding
and agreement between the parties hereto with respect to the
subject matter hereof and supersede all prior oral and
written and all contemporaneous oral negotiations,
commitments and understandings between such parties. This
Agreement may be amended or modified only by a written
instrument executed by the parties hereto.
(b) If the provisions of any Schedule or Exhibit to this
Agreement are inconsistent with the provisions of this
Agreement, the provisions of the Agreement shall prevail.
The Exhibits and Schedules attached hereto or to be attached
hereafter are hereby incorporated as integral parts of this
Agreement.
19. No Third-Party Beneficiaries. this Agreement shall not
confer any rights or remedies upon any Person other than the
parties and their respective successors and permitted
assigns.
20. Severability. Any provision of this Agreement which is
invalid, illegal or unenforceable in any jurisdiction shall,
as to that jurisdiction, be ineffective to the extent of
such invalidity, illegality or unenforceability, without
affecting in any way the remaining provisions hereof in such
jurisdiction or rendering that or any other provision of
this Agreement invalid, illegal or unenforceable in any
other jurisdiction.
21. Construction. The parties have participated jointly in
the negotiation and drafting of this Agreement. In the
event an ambiguity or question of intent or interpretation
arises, this Agreement shall be construed as if drafted
jointly by the parties and no presumption or burden of proof
shall arise favoring or disfavoring any party by virtue of
the authorship of any of the provisions of this Agreement.
22. Investigation of the Parties. All representations and
warranties contained herein which are made to the best
knowledge of a party shall require that such party make
reasonable investigation and inquiry with respect thereto to
ascertain the correctness and validity thereof.
23. Expenses. Except as otherwise expressly provided
herein, the Buyer, on the one hand, and the Ultimate Parent
and the Seller, on the other hand, will pay all fees and
expenses (including, without limitation, legal and
accounting fees and expenses) incurred by them in connection
with the transactions contemplated hereby. In no event will
any of the fees or expenses incurred in connection with this
transaction by the Ultimate Parent or the Seller, including,
without limitation, the fees and expenses of counsel to the
Ultimate Parent or the Seller, be billed to or paid by the
Company. The Ultimate Parent or the Seller shall be
responsible for payment of all sales or transfer taxes
arising out of the conveyance of the Shares.
24. Legal Fees. In the event that legal proceedings are
commenced by the Buyer against the Ultimate Parent or the
Seller (or the Company, if the transactions contemplated
hereby are not consummated), or by the Ultimate Parent or
the Seller against the Buyer, in connection with this
Agreement or the transactions contemplated hereby, the party
or parties which do not prevail in such proceedings shall
pay the reasonable attorneys' fees and other costs and
expenses, including investigation costs, incurred by the
prevailing party in such proceedings.
25. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of
Delaware.
26. Section Headings. The section headings are for the
convenience of the parties and in no way alter, modify,
amend, limit, or restrict the contractual obligations of the
parties.
27. General Provisions. For purposes of this Agreement:
(a) The terms defined in this Agreement include the plural
as well as the singular.
(b) All accounting terms used herein have the meanings
ascribed to them under generally accepted accounting
principals in the United States, except to the extent
otherwise provided herein.
(c) All references herein to designated "Articles,"
"Sections" and other subdivisions and to "Exhibits" and
"Disclosure Schedules" are to the designated Articles,
Sections and other subdivisions of the body of this
Agreement and to the exhibits and other schedules to this
Agreement.
(d) Pronouns of either gender or neuter shall include, as
appropriate, the other pronoun forms.
(e) References to "$" or "Dollars" refer to United States
Dollars and references to "GBP" refer to British Pounds.
28. Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed to be an
original, but all of which shall be one and the same
document.
[Remainder of page intentionally left blank]
IN WITNESS WHEREOF, this Agreement has been duly
executed by the parties hereto as of and on the date first
above written.
DYNASIL CORPORATION OF AMERICA
By: /s/ Xxxxx Xxxxxx
Name: Xxxxx Xxxxxx
Title: President and Chief
Executive Officer
XXXXXX CRYSTALS LIMITED
By: /s/ Xxxxxxx X. Xxxxx
Name: Xxxxxxx X. Xxxxx
Title: Director
NEWPORT SPECTRA-PHYSICS LIMITED
By: /s/ Xxxxxxx X. Xxxxxxx
Name: Xxxxxxx X. Xxxxxxx
Title: Director
NEWPORT CORPORATION
By: /s/ Xxxxxxx X. Xxxxx
Name: Xxxxxxx X. Xxxxx
Title: SVP and General Counsel
Appendix A
Representations of the Seller Regarding the Shares
1.1 The Seller warrants to the Buyer that:
1.1.1 it is a body corporate duly incorporated and
existing under the laws of the country in which it is
incorporated;
1.1.2 it has the requisite power and authority to enter
into and to perform this Agreement and each of the other
agreements contemplated herein to which it is a party; the
execution and delivery of this Agreement and of each of the
and each of the other agreements contemplated herein to
which it is a party and the consummation of the transactions
contemplated by such agreements have been duly and validly
authorised by all necessary corporate actions in respect
thereof;
1.1.3 it has obtained or satisfied all corporate,
regulatory and other approvals and consents, or any other
conditions, necessary to execute and perform its obligations
under this Agreement and each of the other agreements
contemplated herein to which it is a party and such
approvals and consents are (and will at Closing be) in full
force and effect;
1.1.4 this Agreement and each of the other agreements
contemplated herein to which it is a party constitute
obligations binding on it and enforceable against it in
accordance with their terms;
1.1.5 compliance with the terms of this Agreement and
each of the other agreements contemplated herein to which it
is a party will not constitute a default under any provision
of:
(a) its constitutional documents; or
(b) any order, judgment, material agreement, decree-or
regulation or any other restriction of any kind by which it
is bound;
1.1.6 the Seller is, and will at Closing be, a direct,
wholly owned subsidiary of the Ultimate Parent;
1.1.7 no action, suit, proceeding, litigation or dispute
against it which might affect its ability to fulfil its
obligation under this Agreement or and each of the other
agreements contemplated herein to which it is a party is
presently taking place or pending or, to its or its
knowledge, threatened;
1.1.8 no order has been made or petition presented or
resolution passed for winding up it and no distress,
execution or other analogous process has been levied on any
of its assets, nor has it stopped payment or deferred any
payment which is now due for payment and is not insolvent,
or unable to pay its debts for the purposes of the
Insolvency Xxx 0000 or its equivalent in the jurisdiction in
which it is incorporated;
1.1.9 no administrator or administrative receiver
(within the meaning of the Insolvency Act 1986) or its
equivalent in any jurisdiction has been appointed or could
be appointed by any Person over its business or assets or
any part thereof, and there is no unfulfilled or unsatisfied
judgment or court order outstanding against it;
1.1.10 it has not made nor proposed any arrangement or
composition with its creditors or any class of its
creditors.
1.1.11 neither it nor the Company has any liability or
obligation to pay any fees or commissions to any broker,
finder, or agent with respect to the transactions
contemplated by this Agreement for which the Buyer or the
Company could become liable or obligated.
Appendix B
REPRESENTATIONS OF THE ULTIMATE PARENT, THE SELLER AND
THE COMPANY REGARDING THE COMPANY
1. INTERPRETATION
1.1. The definitions and rules of interpretation in this
clause apply in this agreement.
Accounts means the audited financial statements of
the Company as at and to the Accounts Date,
comprising the individual accounts of the Company,
including the balance sheet, profit and loss account
together with the notes on them, the cash flow
statement and the auditor's and directors' reports
(copies of which are attached at document F.1.3 in
the Electronic Data Room;
Accounts Date means 31 December 2009;
Business means the business of the Company, namely
the manufacture of synthetic crystals for infrared
spectroscopy and x-ray and gamma ray detection;
CAA 2001 means the Capital Xxxxxxxxxx Xxx 0000;
Competition Law: the national and directly effective
legislation of any jurisdiction applicable to the
Company which governs the conduct of companies or
individuals in relation to restrictive or other anti-
competitive agreements or practices (including, but
not limited to, cartels, pricing, resale pricing,
market sharing, bid rigging, terms of trading,
purchase or supply and joint ventures), dominant or
monopoly market positions (whether held individually
or collectively) and the control of acquisitions or
mergers;
Connected in relation to a person, has the meaning
given in section 1122 of the Corporation Tax Xxx
0000;
Control in relation to a body corporate, means the
power of a person to secure that the affairs of the
body corporate are conducted in accordance with the
wishes of that person:
(a) by means of the holding of shares, or the possession
of voting power, in or in relation to that or any other
body corporate; or
(b) by virtue of any powers conferred by the
constitutional or corporate documents, or any other
document, regulating that or any other body corporate,
and a Change of Control occurs if a person who
controls any body corporate ceases to do so or if
another person acquires control of it;
Current Use means the use for each Property as set
out in Schedule 2.27(a);
Director means each person who is a director or
shadow director of the Company, the names of whom
are set out in Schedule 2.26(a);
Disclosed means fairly disclosed (with sufficient
detail to identify the nature and scope of the
matter disclosed) in or under the Schedules,
including any documents attached to them;
Electronic Data Room means the electronic data room
maintained by xxx.xxx under the Newport Enterprise
Account containing copy documents that have been
made available to the Buyer or its agents,
solicitors and other advisers;
Employment Legislation means legislation applying in
England and Wales affecting contractual or other
relations between employers and their employees or
workers including, but not limited to, any
legislation and any amendment, extension or re-
enactment of such legislation and any claim arising
under European treaty provisions or directives
enforceable against the Company by any Employee or
Worker;
Employee means any person employed by the Company
under a contract of employment;
Encumbrance means any interest or equity of any
person (including any right to acquire, option or
right of pre-emption) or any mortgage, charge,
pledge, lien, assignment, hypothecation, security,
title, retention or any other security agreement or
arrangement;
Environment means the natural and man-made
environment, including all or any of the following
media, namely air, water and land (including air
within buildings and other material or man-made
structures above or below the ground) and any living
organisms (including man) or systems supported by
those media;
Environmental and Health and Safety Laws means all
applicable laws, statutes, regulations, secondary
legislation, by-laws, common law, directives,
treaties and other measures, judgments and decisions
of any court or tribunal, codes of practice and
guidance notes which are legally binding and in
force as at the date of this agreement in so far as
they relate to or apply to the Environment or health
and safety of any person;
Environmental and Health and Safety Matters means
all matters relating to:
(a) pollution or contamination of the Environment;
(b) the presence, existence, disposal, release,
spillage, deposit, escape, discharge, leak, migration or
emission of Hazardous Substances or Waste;
(c) the exposure of any person to any Hazardous
Substances or Waste;
(d) the health and safety of any person, including any
accidents, injuries, illnesses and diseases;
(e) the creation or existence of any noise, vibration,
odour, radiation, common law or statutory nuisance or
other adverse impact on the Environment; or
(f) the condition, protection, maintenance, remediation,
reinstatement, restoration or replacement of the
Environment or any part of it;
Environmental and Health and Safety Permits means
any permits, licences, consents, certificates,
registrations, notifications or other authorisations
required under any Environmental and Health and
Safety Laws for the operation of the Business or in
relation to the Property;
Freehold Property means the freehold property set
out in Schedule 2.27(a);
Harm means harm to the Environment, and in the case
of man includes offence caused to any of his senses
or harm to his property;
Hazardous Substances means any material, substances
or organisms which, alone or in combination with
others, are capable of causing Harm, including
radioactive substances and asbestos containing
materials;
holding company and subsidiary mean a "holding
company" and "subsidiary" as defined in section 1159
of the Companies Xxx 0000 and a company shall be
treated, for the purposes only of the membership
requirement contained in subsections 1159(1)(b) and
(c), as a member of another company even if its
shares in that other company are registered in the
name of (a) another person (or its nominee), whether
by way of security or in connection with the taking
of security, or (b) its nominee;
ICTA 1988 means the Income and Corporation Taxes
Xxx 0000;
IHTA 1984 means the Inheritance Tax Xxx 0000;
Intellectual Property Rights means patents, rights
to inventions, copyright and related rights, trade
marks and service marks, trade names and domain
names, rights to goodwill or to xxx for passing off
rights in designs, rights in computer software,
database rights, rights in confidential information
(including know-how) and any other intellectual
property rights, in each case whether registered or
unregistered and including all applications (or
rights to apply) to register, and renewals or
extensions of, such rights and all similar or
equivalent rights or forms of protection which
subsist or will subsist now or in the future in any
part of the world;
IT System means all computer hardware (including
network and telecommunications equipment) and
software (including associated preparatory
materials, user manuals and other related
documentation) owned, leased or licensed by the
Company;
IT Contracts means all arrangements and agreements
under which any third party (including without
limitation any member of the Seller's Group and any
source code deposit agents) provides any element of,
or services relating to, the IT System, including
leasing, hire purchase, licensing, maintenance and
services agreements;
Management Accounts means the unaudited consolidated
balance sheet and the unaudited consolidated profit
and loss account of the Company for the period of
six (6) months ended 3 July 2010 (a copy of which is
included as document F.2.2 in the Electronic Data
Room);
Material Contract means an agreement or arrangement
to which the Company is a party or is bound by and
which is of material importance to the business,
profits or assets of the Company;
Pension Scheme means the Xxxxxx Analytical Limited
Retirement Benefits Scheme, which is registered
under Chapter 2 Part 4 of the Finance Xxx 0000;
Previously-owned Land and Buildings means land and
buildings that have, at any time before the date of
this agreement, been owned (under whatever tenure)
and/or occupied and/or used by the Company, but
which are either no longer owned, occupied or used
by the Company, or are owned, occupied or used by
one of them but pursuant to a different lease,
licence, transfer or conveyance;
Planning Legislation means any primary or secondary
legislation from time to time regulating the use or
development of land;
Property means the Freehold Property;
Sale Shares means the two issued fully paid ordinary
shares of GBP1.00 each in the capital of the Company,
comprising the whole of the issued share capital of
the Company at closing and held by the Seller;
Statutory Agreement means an agreement or
undertaking entered into under any legislation;
Tax or Taxation means all forms of taxation and
statutory, governmental, state, federal, provincial,
local, government or municipal charges, duties,
imposts, contributions, levies, withholdings or
liabilities wherever chargeable and whether of the
UK or any other jurisdiction; and any penalty, fine,
surcharge, interest, charges or costs relating
thereto;
Taxation Authority means any government, state or
municipality or any local, state, federal or other
fiscal, revenue, customs or excise authority, body
or official competent to impose, administer, levy,
assess or collect Tax in the United Kingdom or
elsewhere;
Taxation Statute any directive, statute, enactment,
law or regulation wheresoever enacted or issued,
coming into force or entered into providing for or
imposing any Tax and shall include orders,
regulations, instruments, bye-laws or other
subordinate legislation made under the relevant
statute or statutory provision and any directive,
statute, enactment, law, order, regulation or
provision which amends, extends, consolidates or
replaces the same or which has been amended,
extended, consolidated or replaced by the same;
TCGA 1992 means the Taxation of Chargeable Gains Xxx
0000;
TMA 1970 means the Taxes Management Xxx 0000;
VATA 1994 means the Value Added Tax Xxx 0000;
Waste means any waste, including any by-product of
an industrial process and anything which is
discarded, disposed of, spoiled, abandoned, unwanted
or surplus, irrespective of whether it is capable of
being recovered or recycled or has any value; and
Worker means any person who personally performs work
for the Company but who is not in business on their
own account or in a client/customer relationship.
1.2 Where any Statement is qualified by "So far as the
Seller is aware" or any similar expression the
Seller shall be deemed to be aware of and have
knowledge of anything which it would have had
knowledge had it made enquiry immediately before
giving the representations and Warranties of Xxxxxxx
Xxxxxx, Xxxxxxx Xxxxx, Xxxx Xxxxxx, Xxxxx Dudouit,
Xxxxx Xxxxxx, Xxxxx Xxxxxx, Xxxx Xxxxxx and Xxxxxxx
Xxxxxx but not further or otherwise;
1.3 References to a "Schedule" herein shall be deemed to
include references to the Disclosure in the
Disclosure Letter referenced by the number of such
"Schedule".
2. WARRANTIES
2.1. Power to sell the company
(a) The Seller has all requisite power and authority to
enter into and perform this agreement and the other
documents referred to in it.
(b) This agreement and the other documents referred to
in it constitute (or shall constitute when executed)
valid, legal and binding obligations on the Seller in the
terms of the agreement and such other documents.
(c) Compliance with the terms of this agreement and the
documents referred to in it shall not materially breach
or constitute a material default under any of the
following:
(i) any agreement or instrument to which the Seller is a
party or by which it is bound; or
(ii) any order, judgment, decree or other restriction
applicable to the Seller.
2.2. Shares in the company
(a) The Sale Shares constitute the whole of the allotted
and issued share capital of the Company and are fully
paid.
(b) The Seller is the sole legal and beneficial owner of
the Sale Shares.
(c) The Sale Shares are sold free from all Encumbrances.
(d) No right has been granted to any person to require
the Company to issue any share capital and no Encumbrance
has been created in favour of any person affecting any
unissued shares or debentures or other unissued
securities of the Company.
(e) No commitment has been given to create an
Encumbrance affecting the Sale Shares (or any unissued
shares or debentures or other unissued securities of the
Company) or for any of them to issue any share capital
and, so far as the Seller is aware, no person has claimed
any rights in connection with any of those things.
(f) The Company:
(i) does not hold or beneficially own, nor has it agreed
to acquire, any securities of any corporation; or
(ii) is not or has not agreed to become a member of any
partnership or other unincorporated association, joint
venture or consortium (other than recognised trade
associations); or
(iii) has not, outside its country of incorporation,
any branch or permanent establishment; or
(iv) has not allotted or issued any securities that are
convertible into shares.
(g) The Company has not at any time during the past five
(5) years:
(i) purchased, redeemed or repaid any of its own share
capital; or
(ii) given any financial assistance in contravention of
any applicable law or regulation.
2.3. Constitutional and corporate documents
(a) The copies of the memorandum and articles of
association or other constitutional and corporate
documents of the Company Disclosed to the Buyer or its
advisers are true, accurate and complete in all respects.
(b) All statutory books and registers of the Company
have been properly kept and no notice or allegation that
any of them is incorrect or should be rectified has been
received.
(c) All returns, particulars, resolutions and other
documents which the Company is required by law to file
with or deliver to any authority in any jurisdiction
(including, in particular, the Registrar of Companies in
England and Wales) have been correctly made up and filed
or, as the case may be, delivered.
2.4. Accounts
(a) The Accounts have been prepared in accordance with
accounting standards, policies, principles and practices
generally accepted in the UK and in accordance with the
applicable law and regulation of that jurisdiction.
(b) The Accounts have been audited by an auditor or firm
of accountants qualified to act as auditors in the UK and
the auditors' report(s) required to be annexed to the
Accounts is unqualified.
(c) The Accounts give a true and fair view of the state
of affairs of the Company as at the Accounts Date and of
the profit or loss of the Company for the financial year
ended on that date.
(d) The Accounts have been filed in accordance with the
requirements of all applicable laws and regulations.
(e) The Accounts have been prepared on a basis
consistent with the audited accounts of the Company for
the two prior accounting periods without any change in
accounting policies used.
(f) The Management Accounts give a reasonable indication
of the aggregate income and expenses and the assets and
liabilities of the Company for the period and as of the
date to which they relate.
2.5. Financial and other records
(a) All financial and other records of the Company:
(i) have been properly prepared and maintained; and
(ii) are in the possession of the Company.
(b) No notice has been received or allegation made that
any of those records are incorrect or should be
rectified.
(c) All statutory records, including accounting records,
required to be kept or filed by the Company have been
properly kept or filed and comply with the requirements
of all applicable laws and regulations.
(d) All deeds and documents belonging to the Company are
in the possession or control of the Company.
2.6. Changes since Accounts Date
Since the Accounts Date:
(a) the Company has conducted its business in the normal
course and as a going concern;
(b) there has been no material adverse change in the
turnover or financial position of the Company;
(c) the Company has not issued or agreed to issue any
share or loan capital;
(d) no dividend or other distribution of profits or
assets has been, or agreed to be, declared, made or paid
by the Company;
(e) the Company has not borrowed or raised any money or
taken any form of financial security and no capital
expenditure has been incurred on any individual item by
the Company in excess of GBP10,000 and the Company has not
acquired, invested or disposed of (or agreed to acquire,
invest or dispose of) any individual item by the Company
in excess of GBP10,000;
(f) no shareholder resolutions of the Company have been
passed other than as routine business at the annual
general meeting; and
(g) the Company has not (save in the ordinary course of
business) offered price reductions or discounts or
allowances on sales of stock in trade, or sold stock in
trade at less than cost price.
2.7. Information
(a) All information contained in the Schedules provided
pursuant to the Share Purchase Agreement and this
Appendix B is complete, accurate and not misleading.
(b) The particulars relating to the Company set out in
Schedule 2.7(b) are true and accurate.
2.8. Compliance with laws
The Company is conducting its business in all
material respects in accordance with all applicable
laws and regulations of the United Kingdom.
2.9. Licences and consents
(a) So far as the Seller is aware, the Company has all
necessary licences, consents, permits and authorities
necessary to carry on its business in the places and in
the manner in which its business is now carried on, all
of which are valid and subsisting.
(b) No notice has been received by the Company to
suggest that any of those licences, consents, permits and
authorities should be suspended, cancelled, revoked or
not renewed on the same terms.
2.10. Insurance
(a) The Company is named as an insured on all such
insurance policies.
(b) The particulars of those policies set out in
Schedule 2.10(b) are true and accurate.
(c) There are no material outstanding claims under, or
in respect of the validity of, any of those policies.
2.11. Agency
(a) There are no powers of attorney in force given by
the Company.
(b) No person, as agent or otherwise, has been expressly
authorised to bind or commit the Company to any
obligation not in the ordinary course of the Company's
business.
(c) Schedule 2.11(c) sets out details of all persons who
have been expressly authorised to bind the Company in the
ordinary course of business.
2.12. Disputes and investigations
(a) Neither the Company nor, so far as the Seller is
aware, any person for whom the Company is vicariously
liable:
(i) is engaged in any litigation, administrative,
mediation or arbitration proceedings or other proceedings
or hearings before any statutory or governmental body,
department, board or agency (except for debt collection
in the normal course of business); or
(ii) is (so far as the Seller is aware) the subject of
any investigation, inquiry or enforcement proceedings by
any governmental, administrative or regulatory body.
(b) So far as the Seller is aware, no director of the
Company is, to the extent that it relates to the business
of the Company, engaged in or subject to any of the
matters mentioned in clause 2.12(a).
(c) The Company is not affected by any existing or
pending judgments or rulings and have not given any
undertakings arising from legal proceedings to a court,
governmental agency, regulator or third party.
2.13. Defective products and services
So far as the Seller is aware, the Company has not
manufactured or sold any products which were, at the
time they were manufactured or sold, faulty or
defective or did not comply with:
(a) warranties or representations expressly made or
implied by or on behalf of the Company; or
(b) all laws, regulations, standards and requirements
applicable to the products.
2.14. Customers and suppliers
In the 12 months ending with the date of this
agreement, the business of the Company has not been
materially affected in an adverse manner as a result
of any one or more of the following things happening
to the Company:
(a) the loss of any of its customers or suppliers; or
(b) a reduction in trade with its customers or in the
extent to which it is supplied by any of its suppliers;
or
(c) a change in the terms on which it trades with or is
supplied by any of its customers or suppliers.
2.15. Competition
(a) So far as the Seller is aware, the Company is not
engaged in any agreement, arrangement, practice or
conduct which amounts to an infringement of the
Competition Law of any jurisdiction in which the Company
conducts business and, so far as the Seller is aware, no
Director is engaged in any activity which would be an
offence or infringement under any such Competition Law.
(b) So far as the Seller is aware, the Company is not
the subject of any investigation, inquiry or proceedings
by any relevant government body, agency or authority in
connection with any actual or alleged infringement of the
Competition Law of any jurisdiction in which the Company
conducts business.
(c) The Company is not in receipt of any payment,
guarantee, financial assistance or other aid from the
government or any state body which was not, but should
have been, notified to the European Commission under
Article 88 of the EC Treaty or Article 108 of the Treaty
on the Functioning of the European Union for decision
declaring such aid to be compatible with the internal
market.
2.16. Contracts
(a) Except for the agreements and arrangements
Disclosed, the Company is not a party to or subject to
any agreement or arrangement which:
(i) is a Material Contract; or
(ii) is not in the ordinary and usual course of business
of the Company; or
(iii) involves partnership, joint venture,
consortium, joint development, shareholders or similar
arrangements; or
(iv) involves or is likely to involve an aggregate
consideration payable by or to the Company in excess of
$20,000; or
(v) requires the Company to pay any commission, finders'
fee, royalty or the like; or
(vi) is for the supply of goods and/or services by or to
the Company on terms under which retrospective or future
discounts, price reductions or other financial incentives
are given; or
(vii) is not on arm's length terms.
(b) Each Material Contract is in full force and effect
and binding on the Company and, so far as the Seller is
aware, the other parties to it. The Company has not
committed any outstanding default or breach under a
Material Contract, and:
(i) so far as the Seller is aware, no other party to a
Material Contract has defaulted under or breached such a
contract; and
(ii) so far as the Seller is aware, no such default or
breach by the Company or any other party is likely or has
been threatened.
(c) No notice of termination of a Material Contract has
been received or served by the Company and, so far as the
Seller is aware, there are no grounds for determination,
rescission, avoidance, repudiation or a material change
in the terms of any such contract.
2.17. Transactions with the seller
(a) There is no outstanding indebtedness or other
liability (actual or contingent) and no outstanding
contract, commitment or arrangement between the Company
and any of the following:
(i) the Seller or any member of the Seller's Group or
person Connected with the Seller; or
(ii) any director of a member of the Seller's Group or
any person Connected with such a member or director.
(b) Neither the Seller, nor any person Connected with
the Seller, is entitled to a claim of any nature against
the Company or has assigned to any person the benefit of
a claim against the Company to which the Seller or a
person Connected with the Seller would otherwise be
entitled.
2.18. Finance and guarantees
(a) Full particulars of all money borrowed by the
Company (including full particulars of the terms on which
such money has been borrowed) have been Disclosed.
(b) The Company does not have any outstanding loan
capital, or has not lent any money that has not been
repaid, and there are no debts owing to the Company other
than debts that have arisen in the normal course of
business.
(c) All debts (less any provision for bad and doubtful
debts) owing to the Company reflected in the Accounts and
all debts subsequently recorded in the books of the
Company have either prior to the date of this agreement
been realised or, so far as the Seller is aware, will,
within six months after the date of this agreement,
realise in cash their full amount as included in those
Accounts or books and none of those debts nor any part of
them has been outstanding for more than three months from
its due date for payment.
(d) The Company is not subject to any arrangement for
receipt or repayment of any grant, subsidy or financial
assistance from any government department or other body.
(e) A Change of Control of the Company will not result
in:
(i) the right of a lender to terminate or materially
vary any financial agreement or arrangement to which the
Company is a party or subject; or
(ii) any indebtedness of the Company becoming due, or
capable of being declared due and payable, prior to its
stated maturity.
2.19. Insolvency
(a) The Company:
(i) is not insolvent or unable to pay its debts within
the meaning of the Insolvency Xxx 0000; and
(ii) has not stopped paying its creditors in accordance
with its usual practice.
(b) No step has been taken in the UK to initiate any
formal insolvency or administration process against the
Company
(c) So far as the Seller is aware, no process has been
initiated which could lead to the Company being dissolved
and its assets being distributed among the relevant
company's creditors, shareholders or other contributors.
(d) No distress, execution or other process has been
levied on an asset of the Company.
2.20. Assets
(a) The Company is the full legal and beneficial owner
of, and has good and marketable title to, all the assets
included in the Accounts, and any assets acquired since
the Accounts Date, except for those disposed of since the
Accounts Date in the normal course of business.
(b) None of the assets shown in the Accounts, acquired
by the Company since the Accounts Date or used by the
Company is the subject of any lease, lease hire
agreement, hire purchase agreement or agreement for
payment on deferred terms or is the subject of any
licence or factoring arrangement.
(c) None of the assets, undertakings or goodwill of the
Company is subject to an Encumbrance, or to any agreement
or commitment to create an Encumbrance, and no person has
claimed to be entitled to create such an Encumbrance.
(d) The Company owns all of the rights, assets and
property currently held for use in, used in or required
for use in the operation of the Company's business in the
manner in which it is currently conducted, such rights,
assets and property are sufficient to conduct the
operations as currently conducted, and all such assets
are included in the Accounts. Following the completion
of the transactions contemplated by the Agreement, Buyer
will have the rights as of the Closing Date to operate
the business in the manner in which it is currently
conducted by the Company.
2.21. Reserved.
2.22. Environment and Health and Safety
(a) The Buyer agrees that it may only rely on the
Warranties contained in paragraph 2.22 of Appendix B
(Environment and Health and Safety) to bring a claim for
indemnification in respect of anything to do with the
Environment or any breach of Environmental and Health and
Safety Laws.
(b) The Company has obtained and has at all times during
the period of the Seller's ownership of the Company
complied with all Environmental and Health and Safety
Permits, all Environmental and Health and Safety Permits
are in full force and effect, and, so far as the Seller
is aware, there are no facts or circumstances that may
lead to the revocation, suspension, variation or non-
renewal of any Environmental and Health and Safety
Permits.
(c) So far as the Seller is aware, the Company has at
all times complied with all Environmental and Health and
Safety Laws and, so far as the Seller is aware, there are
no facts or circumstances which may lead to any breach of
or liability under any Environmental and Health and
Safety Laws.
(d) During the period of the Seller's ownership of the
Company, all information provided by or on behalf of the
Company to any relevant enforcement authority and all
records and data required to be maintained by the Company
under the provisions of any Environmental and Health and
Safety Laws are complete and accurate.
(e) So far as the Seller is aware, there are no
Hazardous Substances at, on or under, nor have any
Hazardous Substances been emitted, escaped or migrated
from, the Property.
(f) So far as the Seller is aware, there are, and have
been, no landfills, underground storage tanks or mining
operations, uncontained or unlined storage treatment or
disposal areas for Hazardous Substances or Waste (whether
permitted by Environmental and Health and Safety Laws or
otherwise) present or carried out at, on or under the
Property or within 200 metres of the Property. There are
no polychlorinated biphenyls or asbestos containing
materials at, on or under the Property.
(g) During the period of the Seller's ownership of the
Company, there have been no claims, investigations,
prosecutions or other proceedings against or threatened
against the Company or any of its respective directors,
officers or employees in respect of Harm arising from the
operation of the Business or occupation of the Property
or for any breach or alleged breach of any Environmental
and Health and Safety Permits, Environmental and Health
and Safety Laws and so far as the Seller is aware there
are no facts or circumstances which may lead to any such
claims, investigations, prosecutions or other
proceedings. At no time, during the period of the
Seller's ownership of the Company, has the Company
received any notice, communication or information
alleging any liability in relation to any Environmental
and Health and Safety Matters or that any works are
required.
(h) During the period of the Seller's ownership of the
Company, the Company has not received any enforcement,
prohibition, stop, remediation, improvement or any other
notice from any enforcement authority, including the
Environment Agency, the Health and Safety Executive and
the relevant local authority, with regard to any breach
or alleged breach of any Environmental and Health and
Safety Laws.
(i) So far as the Seller is aware, the Company has no
actual or potential liability under any Environmental and
Health and Safety Laws by reason of it having owned,
occupied or used any Previously-owned Land and Buildings.
(j) The Company has adequate employers' liability and
public liability insurance cover in respect of the
Business and the Property. No claims have been made or
are contemplated under any such insurance cover.
(k) Copies of all:
(i) current Environmental and Health and Safety Permits;
(ii) environmental and health and safety policy
statements;
(iii)reports commissioned by the Company in respect
of environmental and health and safety audits,
investigations or other assessments;
(iv) records of accidents, illnesses and reportable
diseases;
(v) assessments of substances hazardous to health;
(vi) correspondence between the Company and any relevant
enforcement authority during the Seller's period of
ownership of the Company; and
(vii)copies or details of all waste disposal
contracts relating to the Business or the Property have
been disclosed to the Buyer.
(l) During the period of the Seller's ownership of the
Company, the Company has not given or received any
warranties or indemnities in respect of (or have
otherwise attempted to apportion) any liabilities, duties
or obligations that arise under Environmental and Health
and Safety Laws.
(m) So far as the Seller is aware, the Company has at
all times materially complied with the requirements of
the:
(i) Producer Responsibility (Packaging Waste)
Regulations 2007;
(ii) Waste Electrical and Electronic Equipment
Regulations 2006; and
(iii)Restriction of the Use of Certain Hazardous
Substances in Electrical and Electronic Equipment
Regulations 2008.
2.23. Intellectual property
(a) Complete and accurate particulars of all registered
Intellectual Property Rights (including applications for
such rights) and material unregistered Intellectual
Property Rights owned by the Company are set out in
Schedule 2.23(a).
(b) Complete and accurate particulars of all material
licences under which:
(i) the Company uses or exploits Intellectual Property
Rights owned by any third party; or
(ii) the Company has licensed or agreed to license
Intellectual Property Rights to, or otherwise permitted
the use of any Intellectual Property Rights by, any third
party,
are set out in Schedule 2.23(b).
(c) Except as set out in Schedule 2.23(b), the Company
is the sole legal and beneficial owner of (or applicant
for) the Intellectual Property Rights set out in Schedule
2.23(a), free from all Encumbrances.
(d) The Company does not require any Intellectual
Property Rights other than those set out in Schedule
2.23(a) in order to carry on its activities.
(e) The registered Intellectual Property Rights set out
in Schedule 2.23(a) are valid, subsisting and enforceable
and, so far as the Seller is aware, nothing has been done
or not been done as a result of which any of them has
ceased or might cease to be valid, subsisting or
enforceable.
(f) So far as the Seller is aware, there has been no
infringement by any third party of any Intellectual
Property Rights set out in Schedule 2.23(a), nor any
third party breach of confidence, passing off or
actionable act of unfair competition in relation to the
business or assets of the Company.
(g) As far as the Seller is aware, the activities of the
Company and of any licensee of Intellectual Property
Rights granted by the Company:
(i) have not infringed and do not infringe the
Intellectual Property Rights of any third party; or
(ii) have not constituted and do not constitute any
breach of confidence, passing off or actionable act of
unfair competition; or
(iii)have not given and do not give rise to any
obligation to pay any royalty or fee compensation.
2.24. Information technology
(a) Complete and accurate particulars of the IT System
and all IT Contracts are set out in Schedule 2.24(a).
(b) Save to the extent provided in the IT Contracts, the
Company is the owner of the IT System free from
Encumbrances. The Company has obtained all necessary
rights from third parties to enable it to make exclusive
and unrestricted use of the IT System.
(c) The IT Contracts are valid and binding.
(d) The Company has possession or control of the source
code of all software in the IT System, or has the right
to gain access to such code under the terms of source
code deposit agreements with the owners of the rights in
the relevant software and reputable deposit agents
(particulars of which are set out in Schedule 2.24(d)).
2.25. Data protection
(a) The Company has notified registrable particulars
under the Data Protection Xxx 0000 of all personal data
held by them and:
(i) have renewed such notifications and have notified
any changes occurring in between such notifications as
required by that Act;
(ii) have paid all fees payable in respect of such
notifications;
(iii)the contents of such notifications (copies of
which are attached at Schedule 2.25(a)) are complete and
accurate; and
(iv) there has been no unauthorised disclosure of
personal data outside the terms of such notifications.
(b) The Company has complied in all material respects
with the Data Protection Xxx 0000 and the Data Protection
Xxx 0000.
2.26. Employment
(a) The name of each person who is a Director is set out
in Schedule 2.26(a).
(b) Schedule 2.26(b) includes anonymised details of all
Employees and Workers of the Company, the particulars of
each Employee and Worker and the principal terms of their
contract including:
(i) their remuneration (including any benefits and
privileges provided or which the Company is bound to
provide to them or their dependants whether now or in the
future);
(ii) the commencement date of each contract and, if an
Employee, the date on which their continuous service
began;
(iii)the length of notice necessary to terminate
each contract or, if a fixed term, the expiry date of the
fixed term and details of any previous renewals;
(iv) the type of contract (whether full or part-time or
other);
(v) their date of birth;
(vi) any country in which the Employee or Worker works or
performs services and/or is paid, if the Employee or
Worker works or is paid outside England and Wales; and
(vii)the law governing the contract, if the Employee
or Worker works or is paid outside England and Wales.
(c) Schedule 2.26(c) includes anonymised details of all
persons who are not Workers and who are providing
services to the Company under an agreement which is not a
contract of employment with the Company (including, in
particular, where the individual acts as a consultant or
is on secondment from an employer which is not a member
of the Seller's Group) and the particulars of the terms
on which the individual provides services, including:
(i) the company which engages them;
(ii) the remuneration of each individual (including any
benefits and privileges provided or which the Company is
bound to provide) to them or their dependants, whether
now or in the future;
(iii) the length of notice necessary to terminate
each agreement or, if a fixed term, the expiry date of
the fixed term and the details of any previous renewals;
(d) No Employee or Worker of the Company is on
secondment, maternity, paternity, adoption or other leave
or absent due to ill-health or for any other reason.
(e) No notice to terminate the contract of employment of
any Employee or Worker of the Company (whether given by
the relevant employer or by the Employee or Worker) is
pending, outstanding or threatened and no dispute under
any Employment Legislation or otherwise is outstanding
between:
(i) the Company and any of its current or former
Employees relating to their employment, its termination
and any reference given by the Company regarding them; or
(ii) the Company and any of its or their current or
former Workers relating to their contract, its
termination and any reference given by the Company
regarding them.
(f) No offer of employment or engagement has been made
by the Company that has not yet been accepted, or which
has been accepted but where the employment or engagement
has not yet started.
(g) The acquisition of the Sale Shares by the Buyer and
compliance with the terms of this agreement will not
entitle any Directors, officers or senior Employees of
the Company to terminate their employment or receive any
payment or other benefit.
(h) So far as the Seller is aware, all contracts between
the Company and its Directors, Employees or Workers
comply with any relevant requirements of section 188 of
the Companies Xxx 0000.
(i) The Company is not a party to, bound by or proposing
to introduce in respect of any of its Directors or
Employees any redundancy payment scheme in addition to
statutory redundancy pay, nor is there any agreed
procedure for redundancy selection.
(j) The Company is not a party to, bound by or proposing
to introduce in respect of any of its Directors,
Employees or Workers any incentive scheme (including,
without limitation, any share option arrangement,
commission, profit sharing or bonus scheme).
(k) The Company has no outstanding liability in
connection with any termination of employment of its
Employees (including redundancy payments) or for failure
to comply with any order for the reinstatement or re-
engagement of any Employee.
(l) The Company has not incurred any liability for
failure to provide information or to consult with
Employees under any Employment Legislation.
(m) The Company has not made or agreed to make a payment
or provided or agreed to provide a benefit to a present
or former Director or officer, Employee or Worker or to
their dependants in connection with the actual or
proposed termination or suspension of employment or
variation of an employment contract which in any such
case are currently in effect.
(n) The Company is not involved in any material
industrial or trade dispute or negotiation regarding a
claim with any trade union, group or organisation of
employees or their representatives representing Employees
or Workers.
(o) No subject access requests made to the Company
pursuant to the Data Protection Xxx 0000 by Employees or
Workers are outstanding and the Company has complied with
the provisions of the Data Protection Xxx 0000 in respect
of all personal data held or processed by them relating
to their Employees, Workers, and former Employees and
Workers.
(p) There are no sums owing to or from any Employee or
Worker other than reimbursement of expenses, wages for
the current salary period and holiday pay for the current
holiday year.
(q) The Company has not offered, promised or agreed to
any future variation in the contract of any Employee or
Worker.
(r) Schedule 2.26(r) includes true, complete and
accurate:
(i) anonymised copies of all contracts, handbooks,
policies and other documents which apply to any of the
Employees and Workers;
(ii) copies of all agreements or arrangements with any
trade union, employee representative or body of employees
or their representatives (whether binding or not) and
details of any such unwritten agreements or arrangements
which may affect any Employee or Worker.]
(s) No Employee is subject to a current disciplinary
warning or procedure.
(t) No employment-related securities or securities
options (as defined in Part 7 of the Income Tax (Earnings
and Pensions) Act 2003) (without limitation, including
shares in the Company and options over them) have been
issued, granted or transferred in respect of employment
or office with the Company.
(u) There are no securities, options over securities or
interests in securities (other than those securities or
options referred to in clause 2.26(t) above) in respect
of which the Company may have to account for income tax
or national insurance contributions liabilities (or
equivalent obligations in any jurisdiction) of any
Director, Employee or Worker.
2.27. Property
(a) The particulars of the Property set out in Schedule
2.27(a) are true, complete and accurate.
(b) The Property is the only land and building owned,
used or occupied by the Company.
(c) The Company has no right of ownership, right of use,
option, right of first refusal or contractual obligation
to purchase, or any other legal or equitable right,
estate or interest in, or affecting, any land or
buildings other than the Property.
(d) The Company has no actual or contingent liability in
respect of Previously-owned Land and Buildings.
(e) The Company has not given any guarantee or indemnity
for any liability relating to the Property, any
Previously-owned Land and Buildings or any other land or
buildings.
(f) All written replies given by or on behalf of the
Seller, any company within the Seller's Group, the
Company or any Subsidiary in response to written
enquiries raised by or on behalf of the Buyer in relation
to the Property were complete and accurate at the date
they were given, and would still be complete and accurate
I the replies were instead given on the Closing Date.
(g) The Company, as the owner of the Property in
Schedule 2.27(a), is solely legally and beneficially
entitled to it.
(h) The Company, as the owner of the Property in
Schedule 2.27(a), is in possession and actual occupation
of the whole of it on an exclusive basis, and no right of
occupation or enjoyment has been acquired or is in the
course of being acquired by any third party, and neither
the Company has granted, or agreed to grant, any right of
occupation or enjoyment in respect of the Property to any
third party.
(i) There are no insurance policies relating to any
issue of title affecting the Property.
(j) The Property (and the proceeds of sale from it) is
free from:
(i) any mortgage, debenture, charge (whether legal or
equitable and whether fixed or floating), rent charge,
lien or other right in the nature of security; and
(ii) any agreement for sale, estate contract, option,
right of pre-emption or right of first refusal,
(iii) and there is no agreement or commitment to give
or create any of the foregoing.
(k) The Property is not subject to the payment of any
outgoings other than non-domestic local business rates
and water and sewerage charges and all outgoings have
been paid when due and none is disputed.
(l) The Company is not aware of any matters which are
unregistered interests which override registered
dispositions under Schedule 3 to the Land Registration
Xxx 0000.
(m) All material covenants, restrictions, stipulations
and other encumbrances affecting the Property have been
substantially observed and performed and no notice of any
alleged breach has been received by the Company.
(n) So far as the Seller is aware, there are no
circumstances which (with or without taking other action)
would entitle any third party to exercise a right of
entry to, or take possession of all or any part of the
Property, or which would in any other way affect or
restrict the continued possession, enjoyment or use of
any of the Property.
(o) The Company is not aware of any matters which,
although not registered, are capable of registration as
local land charges.
(p) So far as the Seller is aware, the Company has not
(nor has anyone on its behalf) expressly or impliedly
waived any breach by any person of any covenant,
agreement, restriction, stipulation or obligation
relating to the Property or of which the Property has the
benefit.
(q) All necessary building regulation consents have been
obtained both in relation to the Current Use of the
Property and any alterations and improvements to them.
(r) No claim or liability (contingent or otherwise)
under the Planning Legislation in respect of the
Property, or any Statutory Agreement affecting the
Property, are outstanding, nor is the Property the
subject of a notice to treat or a notice of entry, and no
notice, order resolution or proposal has been published
for the compulsory acquisition, closing, demolition or
clearance of the Property, and the Company is not aware
of any matter or circumstances which would lead to any
such notice, order, resolution or proposal.
(s) So far as the Seller is aware, all planning
permissions, orders and regulations issued under the
Planning Legislation, and all building regulations,
consents and byelaws for the time being in force have
been fully complied with in relation to the Property.
(t) The Company has not received notice of breach of any
applicable statutory and by-law requirements, and all
regulations, rules and delegated legislation, relating to
the Property and its Current Use.
(u) The Company has not received any adverse report from
any engineer or surveyor relating to the Property.
(v) The Company has not received any notices, complaints
or requirements issued or made (whether formally or
informally) by any competent authority or undertaking
exercising statutory or delegated powers in relation to
the Property, the Current Use of the Property or any
machinery, plant or equipment in them, and the Company is
not aware of any matter which could lead to any such
notice, complaint or requirement being issued or made.
(w) There exists no dispute between the Company and the
owner or occupier of any other premises adjacent to or
neighbouring the Property, and the Company is not aware
of any circumstances that may give rise to any such
dispute after the date of this agreement.
2.28. Effect of sale on sale shares
Neither the acquisition of the Sale Shares by the
Buyer, nor compliance with the terms of this
agreement, will entitle any person to receive from
the Company any finder's fee, brokerage or other
commission in connection with the purchase of the
Sale Shares by the Buyer.
2.29. Retirement benefits
(a) The Pension Scheme and the Newport UK (Margate)
Group Stakeholder Pension Plan (the Stakeholder Plan) are
the only arrangements under which the Company has or may
have any obligation (whether or not legally binding) to
provide or contribute towards pension, lump-sum death,
ill-health, disability or accident benefits in respect of
its past or present officers and employees (Pensionable
Employees). No proposal or announcement has been made to
any Employee or officer of the Company as to the
introduction, continuance, increase or improvement of, or
the payment of a contribution towards, any other pension,
lump-sum, death, ill-health, disability or accident
benefit.
(b) Material details of the Pension Scheme are set out
in Schedule 2.29(b), including (but not limited to):
(i) copies of all documents governing the Pension
Scheme;
(ii) a list of all Pensionable Employees who are members
of the Pension Scheme;
(iii) a true and complete copy of the most recent
actuarial valuation of the Pension Scheme;
(c) All death benefits provided to the employees of the
Company are fully insured by an insurance policy with an
insurer of good repute. The Company is not aware of any
reason why these policies might be invalidated.
(d) The Pension Scheme is a registered pension scheme
for the purposes of Chapter 2 of Part 4 of the Finance
Xxx 0000.
(e) The Company has provided access to a designated
stakeholder scheme for their Pensionable Employees who
are not members of the Pension Scheme, as required by
section 3 of the Welfare Reform and Pensions Xxx 0000.
(f) The Company has not discriminated against, or in
relation to, any Pensionable Employee on grounds of age,
sex, disability, marital status, hours of work, fixed-
term or temporary agency worker status, sexual
orientation, religion or belief in providing pension,
lump-sum or death benefits.
(g) No claims or complaints have been made or are
pending or threatened in respect of the provision of (or
failure to provide) pension, lump-sum, death, ill-health,
disability or accident benefits by the Company in
relation to any of the Pensionable Employees. As far as
the Seller is aware, there are no facts or circumstances
likely to give rise to such claims or complaints.
2.30. Taxation: General
(a) All notices, returns (including any land transaction
returns), reports, accounts, computations, statements,
assessments and registrations and any other necessary
information submitted by the Company to any Taxation
Authority for the purposes of Taxation have been made on
a proper basis, were submitted within applicable time
limits, were accurate and complete when submitted and so
far as the Seller is aware remain accurate and complete
in all material respects. None of the above is, or so far
as the Seller is aware is likely to be, the subject of
any material dispute with any Taxation Authority.
(b) All Taxation (whether of the UK or elsewhere), for
which the Company has been liable to account, has been
duly paid (insofar as such Taxation ought to have been
paid).
(c) The Company has, within applicable time limits, kept
and maintained complete and accurate records, invoices
and other information in relation to Taxation as they are
required or is prudent to keep and maintain. Such
records, invoices and information form part of tax
accounting arrangements that enable the tax liabilities
of the Company to be calculated accurately in all
material respects.
(d) The Company has complied within applicable time
limits with all notices served on them and any other
requirements lawfully made of them by any Taxation
Authority.
(e) The Company has not made any payments representing
instalments of corporation tax pursuant to the
Corporation Tax (Instalment Payments) Regulations 1998 in
respect of any current or preceding accounting periods
nor is under any obligation to do so.
(f) The Company has not received from any Taxation
Authority (and has not subsequently repaid to or settled
with that Taxation Authority) any payment to which it was
not entitled, or any notice in which its liability to
Taxation was understated.
(g) The Company has not paid, within the period of three
years ending on the date of this agreement, and will not
become liable to pay, any penalty, fine, surcharge or
interest charged by virtue of the TMA 1970 or any other
Taxation Statute.
(h) All Taxation and national insurance contributions
deductible and payable under the PAYE system and/or any
other Taxation Statute has, so far as is required to be
deducted, been deducted from all payments made (or
treated as made) by the Company. All amounts due to be
paid to the relevant Taxation Authority prior to the date
of this agreement have been so paid by the due date,
including, without limitation, all Tax chargeable on
benefits provided for directors, employees or former
employees of the Company or any persons required to be
treated as such.
(i) Proper records have been maintained in respect of
all such deductions and payments, and all applicable
regulations have been complied with.
(j) Schedule 2.30(j) contains details (so far as they
affect the Company) of all current dispensations agreed
with HM Revenue & Customs in relation to PAYE and all
notifications given by HM Revenue & Customs under section
65(6) of ITEPA 2003.
(k) The Company is not involved in any dispute with any
Taxation Authority nor has, within the past 12 months,
been subject to any visit, audit, investigation,
discovery or access order by any Taxation Authority. The
Seller is not aware of any circumstances existing which
make it likely that a visit, audit, investigation,
discovery or access order will be made in the next 12
months.
(l) All transactions in respect of which any clearance
or consent was required from any Taxation Authority has
been entered into by the Company after such consent or
clearance has been properly obtained.
(m) The Company has not, for any period after the
Accounts Date, taken any action which has had or might
have the result of altering, prejudicing or in any way
disturbing for any period commencing after the Accounts
Date any concession, agreement or other formal or
informal arrangement which it has previously negotiated
with any Taxation Authority and Schedule 2.30(m) contains
details of such concessions, agreements or arrangements.
(n) Any application for clearance or consent has been
made on the basis of full and accurate disclosure of all
the relevant material facts and considerations, and all
such transactions have been carried into effect only in
accordance with the terms of the relevant clearance or
consent.
(o) The Company has duly submitted all claims,
disclaimers and elections the making of which has been
assumed for the purposes of the Accounts. No such
claims, disclaimers or elections are so far as the Seller
is aware likely to be disputed or withdrawn.
(p) The Accounts make full provision or reserve within
generally accepted accounting principles for any period
ending on or before the date to which they were drawn up
for all Taxation assessed or liable to be assessed on the
Company, or for which the Company is accountable at that
date, whether or not the Company has (or may have) the
right of reimbursement against any other person. Proper
provision has been made and shown in the Accounts for
deferred taxation in accordance with generally accepted
accounting principles.
(q) The Company is not, and so far as the Seller is
aware will not become liable, to make to any person
(including any Taxation Authority) any payment in respect
of any liability to Taxation which is primarily or
directly chargeable against, or attributable to, any
other person (other than the Company).
(r) The Company has sufficient records to determine the
tax consequence which would arise on any disposal or
realisation of any asset owned at the Accounts Date or
acquired since that date, but prior to Closing.
(s) The Company has not entered into a Managed Payment
Plan within the provisions of section 111 of the Finance
Xxx 0000 (paragraph 80 of Schedule 7 to the Taxation
(International and Other Provisions) Act 2010) nor into
any arrangement with HM Revenue & Customs for the
deferred payment of any liability to Taxation.
2.31. Chargeable gains
(a) The book value shown in, or adopted for the
purposes, of the Accounts as the value of each of the
assets of the Company, on the disposal of which a
chargeable gain or allowable loss could arise, does not
exceed the amount which on a disposal of such asset at
the date of this agreement would be deductible, in each
case, disregarding any statutory right to claim any
allowance or relief other than amounts deductible under
section 38 of TCGA 1992.
(b) The Company has not been a party to any scheme or
arrangement whereby the value of an asset has been
materially reduced as set out in sections 29-34 of TCGA
1992.
(c) The Company has not, since the Accounts Date,
appropriated any of its assets to or from trading stock
for the purposes of section 161 of TCGA 1992.
(d) The Company is not, and will not become, liable to
tax under section 190 of TCGA 1992 in respect of a
disposal occurring on or before Closing.
2.32. Capital allowances
(a) If any asset of the Company were disposed of at
Closing for its book value as shown in, or adopted for
the purpose of, the Accounts, or for the value of
consideration actually given for it on its acquisition
(if such asset were acquired since the Accounts Date), no
balancing charge under CAA 2001 (or any other legislation
relating to capital allowances) or similar clawback of
relief in jurisdictions outside the UK would be made on
the Company.
(b) No event has occurred since the Accounts Date
(otherwise than in the ordinary course of business)
whereby any balancing charge may fall to be made against,
or any disposal value may fall to be brought into account
by, the Company under CAA 2001 (or any other legislation
relating to any capital allowances) or similar
legislation relating to relief for similar capital
expenditure in jurisdictions outside of the UK.
2.33. Distributions and other payments
(a) No distribution or deemed distribution, within the
meaning of sections 209, 210 or 211 of ICTA 1988 (section
1000 of the Corporation Tax Act 2010), has been made (or
will be deemed to have been made) by the Company, except
dividends shown in their audited accounts, and the
Company is not bound to make any such distribution.
(b) No rents, interest, annual payments or other sums of
an income nature, in all cases of an amount in excess of
GBP5,000, paid or payable by the Company, or which the
Company is under an existing obligation to pay in the
future, are or may be wholly or partially disallowable as
deductions, management expenses or charges in computing
taxable profits for Taxation purposes.
(c) The Company has not, within the period of five years
preceding Closing, been engaged in, nor been a party to,
any of the transactions set out in sections 213 to 218
(inclusive) of ICTA 1988 (Chapter 5 of Part 23 of the
Corporation Tax Act 2010), nor has it made or received a
chargeable payment as defined in section 214 of ICTA 1988
(section 1086 of the Corporation Tax Act 2010).
(d) The Company has not received, nor so far as the
Seller is aware is likely to receive, a dividend which is
not exempt within the provisions set out in chapters 2
and 3 of Part 9A of the Corporation Tax Xxx 0000.
(e) The Company has not received any capital
distribution to which section 189 of TCGA 1992 could
apply.
2.34. Loan relationships
(a) All interests, discounts and premiums payable by the
Company in respect of its loan relationships (within the
meaning of section 302 of the Corporation Tax Xxx 0000,
formerly section 81 of the Finance Act 1996) are eligible
to be brought into account by the Company as a debit for
the purposes of Part 5 of the Corporation Tax Xxx 0000
(formerly Chapter II of Part IV of the Finance Act 1996)
at the time, and to the extent that such debits are
recognised in the statutory accounts of the Company.
(b) The Company is not, nor in the six years prior to
Closing has been, party to a debtor relationship (within
the meaning of section 302(6) of the Corporation Tax Xxx
0000, formerly section 103 of the Finance Act 1996) to
which Chapter 8 of Part 5 of the Corporation Tax Xxx 0000
(formerly paragraph 2 of Schedule 9 to the Finance Act
1996) applies or may apply.
(c) The Company is not party to a loan relationship made
other than on arm's length terms. There are no
circumstances in which section 445 or 447 of the
Corporation Tax Xxx 0000 (formerly paragraphs 11 and 11A
of Schedule 9 to the Finance Act 1996) could apply to
require an adjustment of debits and/or credits brought
into account by the Company.
(d) The Company has not been a party to a loan
relationship which had an unallowable purpose (within the
meaning of section 442 of the Corporation Tax Xxx 0000,
formerly paragraph 13 of Schedule 9 to the Finance Act
1996).
2.35. Close companies
The Company is not, nor has ever been, a close
company within the meaning of sections 414 and 415
of ICTA 1988 (section 439 of the Corporation Tax Act
2010).
2.36. Group relief
(a) Schedule 2.36(a) contains full particulars of every
written agreement relating to the claim or surrender of
group relief (as defined by section 402 of ICTA 1988
(section 99 of the Corporation Tax Act 2010)) to which
the Company is, or has been, a party within the last
three years.
(b) All claims made by the Company for group relief were
valid when made and have been or will be allowed by way
of relief from corporation tax. The Company has met all
procedural and other requirements of Part VIII of
Schedule 18 to the Finance Xxx 0000 in respect of such
claims.
(c) Except as provided in the Accounts, the Company is
not, nor will be, obliged to make or be entitled to
receive any payment for group relief as defined in
section 402(6) of ICTA 1988 (section 183 of the
Corporation Tax Act 2010) in respect of any period ending
on or before the Accounts Date.
(d) The Company has not been party to a surrender of a
tax refund under section 102 of the Finance Xxx 0000
(section 963 of the Corporation Tax Act 2010).
2.37. Groups of companies
(a) Neither the execution nor completion of this
agreement, nor any other event since the Accounts Date,
will result in any chargeable asset being deemed to have
been disposed of and re-acquired by the Company for
Taxation purposes under:
(i) section 179 of TCGA 1992;
(ii) sections 345 and 346 of the Corporation Tax Xxx 0000
(formerly paragraph 12A of Schedule 9 to the Finance Act
1996);
(iii) sections 630-632 of the Corporation Tax Act
2009 (formerly paragraph 30A of Schedule 26 to the
Finance Act 2002); or
(iv) section 780 or 785 of the Corporation Tax Xxx 0000
(formerly paragraph 58 or 60 of Schedule 29 to the
Finance Act 2002).
(b) The Company has not made any election under section
179A of TCGA 1992 or section 792 of the Corporation Tax
Xxx 0000 (formerly paragraph 66 of Schedule 29 to the
Finance Act 2002).
(c) The Company has never been party to any arrangements
pursuant to section 36 of the Finance Xxx 0000 (paragraph
79 of Schedule 7 to the Taxation (International and Other
Provisions) Act 2010) (group payment arrangements).
2.38. Company residence, treasury consents and
overseas interests
(a) The Company has, throughout the past seven years,
been resident in the UK for corporation tax purposes and
has not, at any time in the past seven years, been
treated as resident in any other jurisdiction for the
purposes of any double taxation arrangements having
effect under section 18 of the Corporation Tax Xxx 0000
(formerly section 249 of the Finance Act 1994) and
section 788 of ICTA 1988 (section 2 of the Taxation
(International and Other Provisions) Act 2010) or for any
other tax purpose.
(b) The Company has not caused, permitted or entered
into any of the transactions specified in section 765 of
ICTA 1988 (migration of companies) or, in relation to
transactions occurring on or after 1 July 2009, as set
out in section 37 of and Schedule 17 to the Finance Xxx
0000 without the prior written consent of HM Treasury, or
without having duly provided the required information to
HM Revenue & Customs (as appropriate).
(c) The Company has not, nor within the last seven years
has had, a permanent establishment outside the UK.
(d) The Company is not an agent or permanent
establishment of another company, person, business or
enterprise for the purpose of assessing such company,
person, business or enterprise to Taxation in the country
of residence of the Company.
2.39. Transfer pricing
(a) All transactions or arrangements made by the Company
have been made on fully arm's length terms. There are no
circumstances in which section 770A of, or Schedule 28AA
to, ICTA 1988 (Part 4 of the Taxation (International and
Other Provisions) Act 2010) or any other rule or
provision could apply causing any Taxation Authority to
make an adjustment to the terms on which such transaction
or arrangement is treated as being made for Taxation
purposes.
(b) In relation to each transaction for the supply of
goods or services or the lending or borrowing of money
into which the Company has entered with a party with
which it was connected, the Company has full
contemporaneous documentary evidence of the process used
to establish that arm's length terms applied.
2.40. Anti-avoidance
(a) The Company has not been a party to, nor has been
otherwise involved in, any transaction, scheme or
arrangement designed wholly or mainly for the purpose of
avoiding or deferring Taxation or reducing a liability to
Taxation or amounts to be accounted for under PAYE in
each such case in circumstances where a liability may
arise after Completion by reference to events prior to
Completion.
(b) The Company has not entered into any notifiable
arrangements for the purposes of Part 7 of the Finance
Xxx 0000 any notifiable contribution arrangement for the
purpose of the National Insurance Contribution
(Application of Part 7 of the Finance Act 2004)
Regulations 2007 (SI 2007/785) or any notifiable schemes
for the purposes of Schedule 11A to the VATA 1994.
2.41. Inheritance tax
(a) The Company has not:
(i) made any transfer of value within sections 94 and
202 of IHTA 1984; or
(ii) received any value such that liability might arise
under section 199 of IHTA 1984; or
(iii) been a party to associated operations in
relation to a transfer of value as defined by section 268
of IHTA 1984.
(b) There is no unsatisfied liability to inheritance tax
attached to, or attributable to, the Sale Shares or any
asset of the Company. None of them are subject to any HM
Revenue & Customs charge as mentioned in section 237 and
238 of IHTA 1984.
(c) Neither any asset owned by the Company, nor the Sale
Shares, are liable to be subject to any sale, mortgage or
charge by virtue of section 212(1) of IHTA 1984.
2.42. Value Added Tax
(a) The Company is a taxable person and is duly
registered for the purposes of VAT.
(b) The Company has complied with all statutory
provisions, rules, regulations, orders and directions in
respect of VAT, promptly submitted accurate returns, and
maintained full and accurate VAT records, invoices and
other requisite documents. The Company has not been:
(i) subject to any interest, forfeiture, surcharge or
penalty; or
(ii) given any notice under sections 59, 59A or 64 of
VATA 1994; or
(iii) given a warning within section 76(2) of VATA
1994; or
(iv) required to give security under paragraph 4 of
Schedule 11 to VATA 1994.
(c) VAT has been duly paid by the Company, or provision
has been made in the Accounts for all amounts of VAT for
which the Company is liable.
(d) The Company is not, nor has been, for VAT purposes,
a member of any group of companies. No act or transaction
has been effected in consequence of which the Company, is
or may be held, liable for any VAT arising from supplies
made by another company. No direction has been given, nor
will be given, by HM Revenue & Customs under Schedule 9A
to VATA 1994 as a result of which the Company would be
treated as a member of another group for the purposes of
VAT.
(e) For the purposes of Schedule 10 to VATA 1994, the
Company and any relevant associate of the Company (within
the meaning of paragraph 3 of Schedule 10 to VATA 1994)
have exercised an option to tax (pursuant to paragraph 2
of Schedule 10 to VATA 1994) only in respect of any
Property listed as having been the subject of such an
option in Schedule 2.42(e) and:
(i) neither the Company nor any relevant associate of
the Company has any intention of exercising, or
obligation to exercise, such an option in respect of the
Property;
(ii) all things necessary for the option to have effect
have been done and, in particular, any notification and
information required by paragraph 20 of Schedule 10 to
VATA 1994 has been given and any permission required by
paragraph 28 of Schedule 10 to VATA 1994 has been
properly obtained;
(iii) a copy of the notification, and of any
permission obtained from HM Revenue & Customs in
connection with the option, is included in Schedule
2.42(e);
(iv) no option has or will be revoked or rendered
ineffective under paragraph 12 of Schedule 10 to VATA
1994;
(v) neither the Company nor any relevant associate of
the Company (within the meaning of paragraph 3 of
Schedule 10 to VATA 1994) has charged VAT, whether on
rents or otherwise, which is not properly chargeable; and
(vi) neither the Company nor any relevant associate of
the Company has agreed to refrain from exercising an
option in relation to the Property.
(vii) neither the Company nor any relevant associate
of the Company has made a real estate election within the
meaning of paragraph 21 of Schedule 10 VATA 1994 in
relation to any Property.
(f) The Company does not own, nor has at any time within
the period of ten years preceding the date of this
agreement owned, any assets which are capital items that
are subject to the capital goods scheme under Part XV of
the VAT Regulations 1995.
2.43. Employees and pensions
(a) The Company has neither made, nor agreed to make,
any payment to, or provided or agreed to provide any
benefit for, any director or former director, officer or
employee of the Company, whether as compensation for loss
of office, termination of employment or otherwise, which
is not allowable as a deduction in calculating the
profits of the Company for Taxation purposes, whether up
to or after the Accounts Date.
2.44. Stamp duty, stamp duty land tax and stamp duty
reserve tax
(a) Any document that may be necessary or desirable in
proving the title of the Company to any asset which is
owned by the Company at Closing, and each document which
the Company may wish to enforce or produce in evidence,
is duly stamped for stamp duty purposes. No such
documents which are outside the UK would attract stamp
duty if they were brought into the UK.
(b) Neither entering into this agreement nor Closing
will result in the withdrawal of a stamp duty or stamp
duty land tax relief granted on or before Closing which
will affect the Company.
(c) No circumstances exist under which paragraph 5 or
paragraph 12 of Schedule 7 to the Finance Xxx 0000
(recovery of relief from another group company or
controlling director) could apply to the Company.
(d) Schedule 2.44(d) sets out full and accurate details
of any chargeable interest (as defined under section 48
of the Finance Act 2003) acquired or held by the Company
before Closing in respect of which the Seller is aware,
or ought reasonably to be aware, that an additional land
transaction return will be required to be filed with a
Taxation Authority and/or a payment of stamp duty land
tax made on or after Closing.
(e) Since the Accounts Date, the Company has not
incurred any liability to, or been accountable for, any
stamp duty reserve tax. There has been no agreement
within section 87(1) of the Finance Xxx 0000 which could
lead to the Company incurring such a liability or
becoming so accountable.
2.45. Tax sharing
The Company is not bound by or party to any Taxation
indemnity, Taxation sharing or any Taxation
allocation agreement in respect of which claims
against the Company would not be time barred.
2.46. Construction industry sub-contractors' scheme
The Company is not required to register as a
Contractor under the provisions of section 59 of the
Finance Xxx 0000 and the expenditure incurred by the
Company on construction, refurbishment and fitting
out works in each of the three years ending on the
Accounting Date is less than GBP1 million.
