DATED 18 JANUARY 1991
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CHEMFAB HOLDINGS U.K. LIMITED (2)
CHEMICAL FABRICS EUROPE (3)
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SHARE PURCHASE AGREEMENT
relating to
Fluorocarbon Fabrications Limited
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Tel: ▇▇▇-▇▇▇ ▇▇▇▇
Tlx: 24213 WITHER G
Fax: ▇▇▇-▇▇▇ ▇▇▇▇
Ref: CAS
CONTENTS
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Page No.
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PARTIES
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RECITALS
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1. Interpretation 1
2. Sale of Shares 2
3. Consideration 2
4. Completion Accounts 3
5. Escrow Account 5
6. Completion 6
7. Loans 7
8. Restriction on Vendors 8
9. Warranties 10
10. Limitation of Liability 11
11. Nature of obligations 16
12. Confidentiality and Announcements 16
13. Further Assurance 17
14. Employees 17
15. Costs 17
16. Waiver of Pre-emption Rights 17
17. Notices 17
18. Miscellaneous 18
Schedule 1 - Vendors 21
Schedule 2 - Definitions 22
Schedule 3 - Directors 25
Schedule 4 - Representations and Warranties 26
Schedule 5 - Deed of Indemnity 48
Schedule 6 - Fixed Assets 54
THIS AGREEMENT is made the 18 of January 1991
PARTIES : -
(1) The Persons whose names and addresses are set out in the first column of
Schedule 1 (together called "the Vendors"); and
(2) CHEMFAB HOLDINGS U.K. LIMITED ("the Purchaser") a company registered in
England under number 2560118 with its registered office at ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
(3) CHEMICAL FABRICS EUROPE ("the Guarantor") a company registered in Ireland
with its registered office at Kilrush, County Clare, Republic of Ireland.
RECITALS : -
(A) The Vendors and Chemical Fabrics Corporation ("Chemfab") entered into
Heads of Agreement on 5th November 1990 ("the Heads of Agreement") pursuant
to which the Vendors agreed subject to contract to sell all of the issued
and allotted shares of the Company to Chemfab or its Affiliate as therein
defined
(B) The Vendors are the beneficial owners of the whole of the issued and
allotted shares of the Company (as defined in Schedule 2) in the respective
amounts set out opposite their names in Schedule 1.
(C) The Vendors have the right, power and authority to sell and procure the
transfer of such shares free from any claims, charges, liens,
encumbrances or equities.
(D) The Purchaser is an affiliate of Chemfab and wishes to purchase and the
Vendors wish to sell the issued and allotted shares of the Company owned
by the Vendors on the terms and conditions and on the basis of the
representations, warranties, undertakings, agreements and indemnities
hereinafter mentioned.
NOW IT IS HEREBY AGREED:
1. INTERPRETATION
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1.1 In this Agreement and in the Schedules except where the context
otherwise requires the words and expressions defined in Schedule 2
shall have the meanings respectively there given to them.
1.2 Subject to Clause 1.1, words and phrases the definitions of which are
contained or referred to in Part XXVI Companies Act 1985 shall be
construed as having the meaning thereby attributed to them.
1.3 References to statutory provisions shall be construed as references to
those provisions as re-enacted or as their application is modified by
other provisions (whether before or after the date hereof but not so
as to increase or impose any liability upon the Vendors under the
Warranties or Indemnities) from time to time and shall include
references to any provisions of which they are re-enactments (whether
with or without modfication) and shall also include statutory
instruments or orders from time to time made pursuant to them.
1.4 Any document expressed to be "in the approved form" means a document
approved by (and for the purpose of identification signed by or on
behalf of) the parties hereto.
1.5 References to clauses and schedules are references to clauses and
schedules in this Agreement and references to sub-clauses are,
unless otherwise stated, references to sub-clauses of the clause in
which the references appear.
1.6 The headings in this Agreement and the Schedules are inserted for
convenience only and shall not affect the construction of this
Agreement.
2. SALE OF SHARES
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2.1 Subject to the terms of this Agreement each of the Vendors as
beneficial owner shall sell and the Purchaser shall purchase, free
from all liens, charges, adverse claims and encumbrances and together
with all rights now or hereafter attaching thereto the number of
ordinary shares in the capital of the Company set opposite his name
in the second column of Schedule 1.
2.2 The Purchaser shall not be obliged to complete the purchase of any of
the Shares unless the purchase of all the Shares is completed
simultaneously.
3. CONSIDERATION
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3.1 Subject to Clauses 3.2 and 4 below, the price payable to the Vendors
for the Sale Shares ("the Purchase Price") will be TWO HUNDRED
THOUSAND POUNDS ( Pounds 200,000).
3.2 The Purchase Price will be satisfied by payments in cash as follows.
3.2.1 the sum of Pounds 175,000 by telegraphic transfer to the Vendors'
Solicitors designated bank at Completion;
3.2.2 the sum of Pounds 25,000 into an interest bearing deposit account
in the joint names of the Purchaser's Solicitors and the Vendors'
Solicitors ("the Escrow Account") on the terms set out in Clause 5.
4. Completion Accounts
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4.1.1 As soon as practicable and in any event within 45 days of Completion
the Vendors' Accountants (at the cost of the Vendor or (so far as
may be lawful so to do) as a cost accrued to the Company) will
prepare a balance sheet of the Company as at the date of Completion
and a profit and loss account of the Company for the period from 1
November 1990 to the close of business on the day before the date of
Completion ("the Completion Accounts") and a certificate of the Net
Asset Value of the Company as at Completion (the "NAV Certificate")
using the same accounting policies as used in the Accounts and
deliver the Completion Accounts and the NAV Certificate to the
Purchaser.
4.1.2 At its election and at its own cost the Purchaser will either carry
out its own audit or review the work of the Vendors' Accountants and
within 45 days of delivery of the NAV Certificate notify the Vendors
as to whether or not it approves the NAV Certificate.
4.1.3 In the event that the Purchaser shall not within such period of 45
days agree the Net Asset Value then the Vendors and the Purchaser
shall together attempt to resolve any such written queries and
observations that have been raised by the Purchaser with regard
thereto. If no such resolution has been agreed between the parties
within a further period of 14 days of notification to the Vendors by
the Purchaser, the matter shall be referred to an independent firm of
chartered accountants as may be appointed by agreement between the
Vendors and the Purchaser or, failing such agreement within 7 days,
by the President of the Institute of Chartered Accountants in England
and Wales for the time being. The decision of such chartered
accountants (acting as experts and not as arbitrators) shall, in the
a bsence of manifest error, be final and binding upon the parties
and shall be incorporated in or otherwise dealt with in the NAV
Certificate. The fee of such chartered accountants shall be borne as
such independent firm shall determine, or, in the absence of any such
determination, equally by the Vendors and the Purchaser.
4.1.4 In the event that the Purchaser does not raise any queries or
observations in respect of the Completion Accounts and the N.A.V.
Certificate within 45 days of their delivery to it or if they shall
agree the Completion Accounts and the N.A.V. Certificate then (and in
either such case) the Net Asset Value shall be as stated in the
N.A.V. Certificate and the Purchaser shall be deemed to have agreed
for all purposes of this Agreement the Net Asset Value of the Company
4.1.5 IT IS HEREBY AGREED tht in preparing the Completion Accounts and the
N.A.V. Certificate, the Vendors' Accountants shall not be required to
re-circulate any of the debtors of the Company in respect of debts in
respect of which contact was made in the preparation of the Accounts
but the Purchasers may, if they so decide and to the extent that time
permits in accordance with Clause 4.1.2, re-circulate such debtors in
carrying out their review under such Clause.
4.2 In the event that the Net Asset Value is agreed, certified or
determined to be more or less than SEVENTY SIX THOUSAND POUNDS
(Pounds 76,000) sterling as at Completion, the Purchase Price shall
be accordingly increased or decreased respectively on a pound for
pound basis.
4.3 For the purposes of the NAV Certificate, the Fixed Assets of the
Company, being those listed in Schedule 6, shall be deemed to have an
aggregate fair value of TWELVE THOUSAND SIX HUNDRED AND TEN POUNDS
(Pounds 12,610) sterling. In addition stock will be valued on the
same basis as in the accounts for the periods ended 31 October 1989
and 31 October 1990 using the same accounting principles consistently
applied.
4.4 For the purposes of this Agreement, Fixed Assets shall be defined
as only the property, plant and equipment owned by the Company at
Completion shown in Schedule 6.
4.5 Immediately following completion of the Completion Accounts and
agreement or adjudication of the NAV Certificate the Purchaser
shall procure the resignation of the Vendors Accountants as
Auditors of the Company, together with their acknowledgement
that no monies are owed to them by the Company and a statement in
accordance with Section 394 of the Companies ▇▇▇ ▇▇▇▇.
5. Escrow Account
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Upon agreement or adjudication of the NAV Certificate: -
5.1 if the Net Asset Value is greater than Pounds 76,000, an amount equal
to the excess over Pounds 76,000 will be paid in cash to the Vendors
together with the amount (including interest) in the Escrow
Account within five (5) working days.
5.2 if the Net Asset Value is found to be less than Pounds 76,000 but
not less than Pounds 51,000, the difference below Pounds 76,000 will
be paid out of the Escrow Account to the Purchaser within five (5)
working days together with interest accrued on that amount from
Completion until the date of payment;
5.3 if the Net Asset Value is found to be less than Pounds 51,000, in
addition to the payment out of the Escrow Account pursuant to
Clause 5.2, the Vendors will pay the balance to the Purchaser within
five (5) working days;
5.4 the remaining balance in the Escrow Account after the application
of Clause 5.2 above, together with accrued interest, will then be
immediately paid out to the Vendors as the balance of the Purchase
Price;
5.5 if the Net Asset Value is found to be exactly Pounds 76,000, the
balance in the Escrow Account (including interest) will be paid to the
Vendors within five (5) working days.
5.6 Any sums which are not paid to the other party as required under
Clause 5.1 or 5.3 or Clause 7 shall bear interest (which shall accrue
from day to day after as well as before any judgment for the same) at
the rate of 4% per annum over the base rate of the National
Westminster Bank Plc from that date up to and including the date of
actual payment of such sums.
6. COMPLETION
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6.1 Subject to the provisions of this clause Completion shall take
place on 17 January 1991 whereupon:
6.1.1 The Vendors shall deliver to the Purchaser:
6.1.1.1 duly executed transfers of the Shares by the registered holders
thereof in favour of the Purchaser or its nominees together with
the relevant share certificates;
6.1.1.2 statements in respect of all bank accounts of the Company as at a date
not more than 2 working days before Completion and all cheque books
and bankers' cards in respect thereof;
6.1.1.3 such waivers or consents in the approved form as the Purchaser may
require to enable the Purchaser or its nominees to be registered as
holders of the Shares; and
6.1.1.4 the Supply Agreement in the approved form signed by Aerovac Systems
(Keighley) Ltd;
6.1.2 The Vendors shall deliver to the Purchaser:
6.1.2.1 the Deed of Indemnity duly executed by the covenantors named
therein;
6.1.2.2 all the statutory and other books (duly written up to but excluding
the date of Completion) of the Company and its certificate of
incorporation and common seal;
6.1.3 The Vendors shall procure:
6.1.3.1 a board meeting to be held at which such persons as the Purchaser
shall before completion have nominated to be appointed as directors
and as new secretary of the Company be appointed and, upon such
appointment, forthwith cause the Directors and the secretary or
secretaries of the Company to retire from their respective offices
and as employees each delivering to the Purchaser a letter under seal
in the approved form acknowledging that the person so retiring
has no claim or right of action outstanding of whatever nature against
the Company excluding sums due to them pursuant to Clause 7 but
including but not limited to claims or rights of action for breach of
contract wrongful dismissal, compensation for loss of office, unfair
dismissal or redundancy;
6.1.3.2 amendment of all authorities to the bankers of the Company relating to
bank accounts to give authority to such persons as the Purchaser may
prior to Completion have nominated to operate the same;
6.1.3.3 the repayment of all loans due to the Company from and all loans due
from the Company to every other company in the issued share capital of
which the Vendors have directly or indirectly an interest;
6.1.3.4 save as provided in Clause 7 below, the repayment of all loans
due from the Company to and all loans due to the Company from
directors or employees of the Company including repayment of the loan
from the directors' pension scheme by the Company;
6.1.3.5 the payment up to Completion of all directors' fees, expenses,
pensions configurations and bonuses (if any) of all directors in the
amounts disclosed in the Disclosure Letter;
6.1.4 The Purchaser shall:
6.1.4.1 pay the amount of Pounds 175,000 as provided by Clause 3
(payment to be made by way of banker's draft or telegraphic transfer
to the Vendors' whose receipt shall be an absolute discharge and the
Purchaser shall not be concerned with the allocation or distribution
amongst the Vendors of any sum paid by way of consideration
hereunder); and
6.1.4.2 deliver to the Vendors a counterpart of the Deed of Indemnity duly
executed by the Purchaser and the Company;
6.1.4.3 deliver to the Vendors the Supply Agreement in the approved form
signed by its affiliate Chemical Fabrics Europe.
7. LOANS
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7.1 The Vendors agree to provide the Company an interest free loan of
Pounds 54,231 representing part of the ACT paid on 14 November 1990
on the pre-sale dividend of Pounds 200,000 declared in the period
ended 31 October 1990. The Purchaser hereby undertakes to procure
the Company to repay the loan on the date and to the extent the
Company receives the ACT refund or any part thereof without set-off or
any reduction in mainstream corporation tax attributable thereto.
The Vendors acknowledge that in respect of Pounds 47,543 of the
loan the Purchaser's undertaking is limited to taking no action
to prevent collection or remittance to the Vendors by the Vendors'
Accountants in accordance with a letter of instruction by the Company
to the Vendors' Accountants dated 14 December 1990. The Purchaser
undertakes to file its 1991 Corporation Tax Return at the earliest
possible date once the audited figures are available to complete such
calculation and further undertakes itself and undertakes to procure
that the Company and all of its holding and subsidiary companies take
no steps which will cause a delay or reduction in the ACT refund or
the said reduction in mainstream corporation tax.
7.2 In addition the Vendors will maintain a loan to the Company in an
amount sufficient at the date of Completion to ensure that the Company
does not have an overdraft in its bank account being the sum of
Pounds NIL. The Purchaser hereby undertakes to procure the Company
to repay the loan referred to under this Clause 7.2 as soon as funds
are available but in any event within 90 days of Completion.
8. RESTRICTIONS ON VENDORS
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8.1 The Vendors hereby undertake with the Purchaser and the Company that
except with the written consent of the Purchaser they, either
separately or together will not:
8.1.1 for the period of five (5) years from Completion, directly or
indirectly, on their own account or jointly with or for any other
person, firm or company be engaged or concerned or interested in
any business, firm or company carrying on business in the area
comprising the United Kingdom and France which is competitive with any
business carried on by the Company within 2 years prior to Completion,
provided that nothing in this clause shall prevent any of the Vendors
from being the holder of or from being beneficially interested in any
class of securities in any company if such class of securities is
listed on The Stock Exchange, traded in the Unlisted Securities Market
or any other recognised stock exchange where the relevant Vendor
neither holds nor is beneficially interested in more than a total of 5
per cent of all the issued securities of that class; or
8.1.2 for a period of five (5) years from Completion either personally or
by their agent or by letters, circulars or advertisements and
whether for themselves or on behalf of any person, firm or company,
canvass or solicit orders for goods (of similar type to those being
manufactured or dealt in or for services similar to those being
provided by the Company within 2 years prior to Completion] from any
person, firm or company who or which is at Completion or has been at
any time within eighteen months prior to Completion a customer of the
Company; or
8.1.3 at any time hereafter make use of or disclose or divulge to any third
party (other than to officers or employees of the Company whilst it
remains under the ownership and control of the Purchaser and whose
province it is to know the same or to the Purchaser, or except insofar
as they shall have a statutory duty so to do) any information of a
secret or confidential nature relating to any business of the Company.
This restriction shall cease to apply to any information or
knowledge which may come into the public domain other than through the
act or default of either of the Vendors; or
8.1.4 at any time hereafter in relation to a business competitive with any
business carried on by the Company in the period 2 years prior
to Completion use or (insofar as they can reasonably do so) allow to
be used any trade name (save for "Fluorovac") used by the Company at
Completion or any other name intended or likely to be confused
therewith; or
8.1.5 at any time during the period of 3 years hereafter solicit or
induce, or endeavour to solicit or induce, anyone other than the
Vendors who is an employee of the Company at the date hereof or at
Completion to leave the employment or service of the Company save with
the prior written consent of the Purchaser.
8.2 The reference to the Company in clause 8.1 shall include its
successors in business.
8.3 Each of the covenants contained clause 8.1 shall be enforceable by the
Purchaser independently of each of such other covenants and shall not
be affected by any unenforceability or invalidity of any of such other
covenants.
8.4 The Vendors hereby acknowledge and agree that having obtained
professional advice, the covenants contained in this clause are fair
and reasonable in the context of this Agreement as a whole.
8.5 If any of the restrictions contained in this clause shall be found to
be void but would be valid if some part thereof were deleted, or the
period or area of application reduced, such restriction shall apply
with such modification as may be necessary to make it valid
and effective.
8.6 Nothing contained in this Agreement shall prevent the Vendors, either
separately or together, from directly or indirectly, on their own
account or jointly with or for any other person, firm or Company be
engaged or concerned or interested in and may either personally or by
their agent or by letters, circulars or advertisements and whether for
themselves or on behalf of any person, firm or Company canvass or
solicit orders for goods in relation to:-
8.6.1 any business engaged in the cutting and forming of PTFE glass cloth
shapes for sale into the composite fibre reinforced resin,
electronic/PCB and glass laminated industries; and
8.6.2 vacuum/pressure composite film lamination.
9. WARRANTIES
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9.1 The Vendors jointly and severally warrant to the Purchaser in the
terms of Schedule 4 as at Completion and it is hereby declared that
the Purchaser has entered into this Agreement in reliance on the
Vendors so warranting.
9.2 The Warranties are given subject to matters expressly disclosed in
the Disclosure Letter and to the other provisions of this Agreement
but no other information relating to the Company of which the
Purchaser has knowledge (actual, imputed or constructive) shall
prejudice any claim made by the Purchaser under the Warranties or
operate to reduce any amount recoverable.
9.3 The Warranties set out in each sub-paragraph or paragraph of Schedule
4 shall be separate and independent, and save as expressly provided,
shall not be limited by reference to any other sub-paragraph or
anything in this Agreement or the Schedules.
9.4 The Vendors hereby acknowledge to and agree with the Purchaser (as
trustee for the Company) that, in making the Warranties and preparing
the Disclosure Letter, the Vendors have not relied on any information
or advice supplied or given by the Company or its officers and
employees and hereby waive any rights which they may have against them
in respect of any misrepresentation, inaccuracy or omission in or from
any such information and advice.
9.5 Where any of the Warranties is qualified by the words "to the best of
the knowledge, information and belief of the Vendors" or "as far as
the Vendors are aware" or any similar expression there shall be
deemed to be included (save where expressly stated) an additional
warranty that the Vendors have made due and careful enquiry in
respect of such matters.
9.6 The Vendors hereby warrant to the Purchaser (for itself and as trustee
for and for the benefit of the Company that they will at all times
keep the Purchaser and the Company indemnified from and against all
costs, claims, damages, demands, expenses, losses and liabilities
which the Purchaser and/or the Company may sustain incur or pay by
reason of any breach or non-fulfilment of any of the Warranties
numbered 3, 5, 7, 8, 9, 18.2, 18.4, 24, 25, 27 and 40.
10. LIMITATION OF LIABILITY
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10.1 The liability of the Vendors under this Agreement (which for the
avoidance of doubt for the purposes of this Clause shall be deemed to
include the Schedules thereto) and under the Deed of Indemnity shall
be limited in accordance with the following provisions of this Clause
notwithstanding any other provision of this Agreement or the Deed
of Indemnity and where any such other provisions appear to be in
conflict or inconsistent with this Clause the provisions hereof shall
prevail.
10.2 The liability of the Vendors under this Agreement and under the
Deed of Indemnity shall in respect of matters relating to Tax cease
six years from the Completion Date and in relation to all other
matters shall cease on 31st January 1993 unless as regards any alleged
specific breach of any of the warranties or any Tax Claim notice in
writing (containing details of the circumstances giving rise to such
breach or claim, the nature thereof and the total amount or alleged
liability therefor), shall have been served on the Vendors within
the respective periods aforementioned and further provided that
proceedings shall have been commenced and served on the Vendors within
six months of the giving of the notice as aforesaid.
10.3 The liability of the Vendors under this Agreement and under the Deed
of Indemnity including for this purpose all reasonable costs and
expenses of or incidental to the negotiation, presentation and
settlement of any claim which the Vendors agree to pay shall not in
aggregate exceed Pounds 200,000 subject to adjustment following the
Completion Audit.
10.4 The Purchaser shall not be entitled to make any claim under the
Warranties or under the Deed of Indemnity until the aggregate of all
claims has reached Pounds 5,000 when the whole of such claims shall be
presented by the Purchaser to the Vendors for payment.
10.5 The Vendors shall have no liability under this Agreement in respect of
any loss if and to the extent that the same is covered by any policy
of insurance effected by the Company at the date hereof under which
the Purchaser is able to recover its loss.
10.6 The Purchaser shall have no claim against the Vendors under the
provisions of this Agreement to the extent of the amount of any
specific provision or reserve in the Completion Accounts or note in
the Accounts for any liabilities (including but not limited to
contingent unqualified and disputed liabilities and including
provisions for Tax) which would otherwise have been the subject of
such claim.
10.7 The Vendors shall have no liability under this Agreement for any claim
which would not have arisen but for some voluntary act or transaction
carried out by or on behalf of the Purchaser and/or the Company after
Completion.
10.8 The Purchaser shall have no claim against the Vendor under this
Agreement to the extent that such claim arises as a result only of any
provision or reserve in respect thereof being insufficient by reason
of an increase in rate of Tax made after the Accounting Date.
10.9 The Purchaser (which shall for this purpose include the Company) shall
not be entitled to recover from the Vendors under this Agreement and
under the Deed of Indemnity more than once in respect of the same
damage suffered.
10.10 In the event of the Purchaser becoming aware of any claim under this
Agreement (as opposed to claim under the Deed of Indemnity) it shall
as soon as reasonably practicable procure that notice of such claim
and circumstances giving rise thereto is given to the Vendors. Subject
to being fully indemnified by the Vendors to its reasonable
satisfaction the Purchaser or the Company as appropriate will at the
request and cost of the Vendors take such action as the Vendors may
reasonably request to enforce any claim which either the Purchaser or
the Company may have against any third party in respect of such claim
under this Agreement and shall account to the Vendors for any amount
recovered.
10.11 If any provision for any liabilities including contingent unquantified
and disputed liabilities and including provisions for Tax or in
respect of any assets (including debts) reflected in the Accounts or
the Completion Accounts proves to have been unnecessary or if the
Company recover any debts or parts thereof which have been treated as
doubtful or bad for the purposes of the Accounts or the Completion
Accounts the amounts of such provision or recovery as the case may be
shall be set off against the liability (if any) of the Vendors under
this Agreement or under the Deed of Indemnity.
10.12 Any amount paid by the Vendors to the Purchaser under this Agreement
or under the Deed of Indemnity shall be treated as a reduction in the
Purchase Price payable to the Vendors hereunder and any sum
subsequently received or benefit received by the Purchaser or the
Company from third parties in respect of any amount paid by the
Vendors under this Agreement or under the Deed of Indemnity shall
forthwith be paid to the Vendors.
10.13 The Purchaser hereby warrants and represents to the Vendors that, at
the date hereof, the Purchaser is not aware of any matter, fact or
thing as may be inconsistent with any of the Warranties or that may
give rise to any liability on the part of the Vendors hereunder.
10.14 If any breach or claim arising under the Warranties or under the
Indemnities shall arise by reason of some liability of the Company
which, at the time the breach is notified to the Vendors, is
contingent only, the Vendors shall not to be under any obligation to
make any payment to the Company or the Purchaser thereunder until such
time as the contingent liability shall become an actual liability.
10.15 No liability shall attach to the Vendors under the Warranties to the
extent that
(a) the Net Asset Value (after making allowance for Taxation or
adjustments to capital allowances and other consequential
adjustments) of the Company is increased bv reason that: -
(i) any assets held at Accounts Date were not included in the
Accounts or the value of any such assets shall have been
understated in the Accounts;
(ii) any losses or other allowable sums previously unutilised
become available for set off against Tax;
(b) the subject matter thereof is fully taken into account in
determining the Net Asset Value of the Company.
10.16 No breach of the Warranties or claim under the Indemnities shall in
any event give rise to a right on the part of the Purchaser to rescind
or terminate this agreement following Completion. The sole remedy of
the Purchaser in respect of any breach of the Warranties shall
be in damages.
10.17 Nothing herein or in the Warranties or the Indemnities shall be
deemed to relieve the Purchaser or the Company from any common law
duty to mitigate any loss or damage incurred by either of them.
10.18 The Purchaser hereby acknowledges that no reliance has been placed nor
will at any time hereafter be placed by the Purchaser on any
representation or warranty (whether expressed or implied and whether
written or oral) relating to the Company other than the
Warranties and accordingly all representations and warranties (whether
expressed or implied, statutory or otherwise) on the part of the
Vendors other than the Warranties are hereby excluded.
10.19 The Purchaser shall not be entitled to make any claim under or
pursuant to the Warranties or the Deed of Indemnity in relation to:
10.19.1 any matter where the claim arises as a result of, or would not
have arisen but for, legislation not in force at the date of this
Agreement, or any change in legislation with retrospective effect
after the date of this Agreement;
10.19.2 any claim which has been made good or is otherwise compensated for
otherwise than by the Company or the Purchaser.
10.20.1 Within 30 days after circumstances have come to the notice of the
Purchaser or the Company which will, or are likely to, or may give
rise to a claim under the Warranties or the Deed of Indemnity give to
the Vendors written notice of such claim and in particular (but
without prejudice to the generality of the foregoing) shall give such
written notice of any claim by or against, or any liability of or to
any third party (or of circumstances which become known to the
Purchaser and/or the Company likely or capable of giving rise to any
such claim or liability) in consequence of which the Vendors will or
may become liable for a claim under the Warranties or the Deed of
Indemnity, and further shall not settle or compromise any such claim
or liability without the prior written consent of the Vendors (such
consent not to be unreasonably withheld or delayed); and
10.20.2 at all times allow the Vendors and its professional advisers and other
agents access to and to inspect and take copies of, all necessary b
books, and files and records of the Company for the purpose of
assessing and dealing with any such claim or liability.
10.21 If the Purchaser is entitled to make a claim both under the Warranties
and under the Deed of Indemnity, the claim shall be made first under
the Warranties, and any amount payable under the Deed of Indemnity
shall be reduced to the extent of such claim.
11. NATURE OF OBLIGATIONS
---------------------
11.1 Each of the Obligations shall be binding on the respective successors,
estates and personal representatives of the Vendors.
11.2 If any shares in the Company shall at any time be sold or transferred
the benefit of each of the Obligations shall be assignable to the
purchaser or transferee of such shares without the consent of the
Vendors if the purchaser or transferee is an associated company of
the Purchaser and with the consent of the Vendors (such consent not to
be unreasonably withheld) in any other case. Such purchaser or
transferee shall be entitled to enforce each of the Obligations
against the Vendors as if he were named herein as the Purchaser.
11.3 Save as aforesaid none of the rights or obligations hereunder may be
assigned or transferred to any other person.
11.4 Warranties representations indemnities covenants agreements and
obligations given or entered into by more than one person are given or
entered into jointly and severally.
12. CONFIDENTIALITY AND ANNOUNCEMENTS
---------------------------------
The terms of the letter agreement dated 2nd July 1990 remain in full
force and effect save that from and after the execution of this
Agreement the Purchaser may make any disclosure or public announcement
it thinks fit or is required to make to comply with the requirements
of state or federal regulations or laws or the requirements of any
stock exchange provided that the Purchaser shall consult with the
Vendors if a proposed announcement refers to the Vendors or to Aerovac
Systems (Keighley) Limited.
13. FURTHER ASSURANCE
-----------------
The Vendors (at the Purchaser's reasonable request and expense) and
the Purchaser shall do and execute and perform all such further deeds,
documents, assurances, acts and things as either of them may
reasonably require bv notice in writing to give effect to the terms of
this Agreement.
14. EMPLOYEES
---------
14.1 The Vendors shall for a period of 6 months after Completion endeavour
to cause ▇. ▇. ▇▇▇▇ to remain in the employment or as a consultant or
adviser to the Company after Completion.
14.2 The parties acknowledge that other employees of the Company will be
made redundant or dismissed on or after Completion. The Purchaser
agrees to consult with the Vendors in connection with such matters and
contribute up to Pounds 2,500 in relation thereto. Any additional
liability to such employees for compensation for termination of
employment or redundancy shall be borne by the Vendors and not by the
Company.
15. COSTS
-----
Save as for the costs of the Vendors' Accountants referred to in
Clause 4.1, each party to this Agreement shall pay its own costs of
and incidental to this Agreement and the sale and purchase hereby
agreed to be made.
16. WAIVER OF PRE-EMPTION RIGHTS
----------------------------
Each of the Vendors hereby waives all rights (if any) which he may
have under the articles of association of the Company or in any other
way to have any of the Shares offered to him for purchase before such
Shares may be offered to any other person.
17. NOTICES
-------
Any notice required to be given bv any of the parties hereto to any of
the others shall be deemed validly served by prepaid registered or
recorded delivery letter sent through the post to its address given
herein and in the case of the Purchaser copied simultaneously to the
Purchaser's solicitor and in the case of the Vendors copied to the
Vendors' Solicitor and any notice so served shall be deemed to have
been served 48 hours after the time at which it was posted and in
proving such service it shall be sufficient to prove that the notice
was properly addressed and posted.
18. MISCELLANEOUS
-------------
18.1 This Agreement (together with any documents referred to herein)
constitutes the whole agreement between the parties hereto and it is
expressly declared that no variations hereof shall be effective
unless made in writing and executed by the parties hereto or their
duly authorised representatives.
18.2 This Agreement shall be governed by English law and the parties hereby
submit to the jurisdiction of the English Courts.
18.3 In consideration of the Vendors entering into this Agreement and the
Deed of Indemnity, the Guarantor hereby covenants with the Vendors and
each of them as primary obligations of the Guarantor : -
18.3.1 to procure that the Purchaser shall duly perform all its respective
obligations under this Agreement and the Deed of Indemnity (including
all variations, extensions and renewals thereof);
18.3.2 if and whenever the Purchaser shall be in default in the payment when
due of any amount payable under any such Agreement, within 5 days
after being given notice to that effect by the Vendors to pay all
amounts then payable by the Purchaser as though the Guarantor instead
of the Purchaser was expressed to be principal debtor; and
18.3.3 to indemnify the Vendors and each of them against all costs and
expenses (including legal fees) which they or either of them may pay
or incur in collecting any amounts payable by the Purchsaer or the
Guarantor and referred to in sub-clause 18.3.2 above.
18.4 Where the Purchaser has failed to pay any amounts due and owing under
this Agreement and/or the Deed of Indemnity but the Vendors are unable
to recover the same under the Guarantee by reason of any legal
limitation, disability or incapacity or any other matter or thing
whether known to the Vendors or not, the Vendors shall nevertheless be
entitled to recover such amounts from the Guarantor on the basis of an
indemnity.
18.5 The Guarantor acknowledges that the liability of the Guarantor under
this clause shall not be discharged or affected in any way by time
being given to the Purchaser or by any other indulgence or concession
being granted to the Purchaser, or by any variation, extension or
renewal of this Agreement or the Deed of Indemnity or by any other
act, omission, dealing, matter or thing whatsoever (including,
without limitation, any change in the Memorandum or Articles of
Association of the Purchaser of the Guarantor or the liquidation,
dissolution, reconstruction or amalgamation of the Purchaser or the
Guarantor) which but for this provision might operate to release the
Guarantor from its obligations under this clause.
18.6 This Guarantee is a continuing guarantee and shall remain in force
until all obligations of the Purchaser hereby guaranteed have been
discharged in full. It is in addition to and and shall not prejudice
nor be prejudiced by any other guarantee, indemnity or other security
or a right against any third party which the Vendors or either of them
may have for the due performance of the obligations concerned provided
always that the Vendors will use all reasonable efforts to mitigate
their losses and in no circumstances shall they be entitled to recover
more than once in respect of the same claim or loss.
SIGNED by ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ in the /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
presence of: -------------------------
SIGNED by ▇▇▇▇ ▇▇▇▇▇▇ /s/ ▇▇▇▇ ▇▇▇▇▇▇
in the presence of: ---------------------------
SIGNED by
for and on behalf of
CHEMFAB HOLDINGS U.K. LIMITED
in the presence of:
SIGNED by /s/ Gay O'Gara
for and on behalf of ----------------------------
CHEMICAL FABRICS EUROPE
LIMITED in the presence of:
SCHEDULE 1
----------
THE VENDORS
------------
(1) (2)
Names and Addresses
of Vendors Shares
------------------- ------
▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ 5,000
of Aireville, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇, ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ 5,000
(as above)
---------
10,000
SCHEDULE 2
----------
DEFINITIONS
------------
"the Accounting Date" means 31st October 1990;
"the Accounts" means the audited balance sheets of the Company as at
the Accounting Date and the audited profit and loss
account of the Company for the year ending on the
Accounting Date and any notes, reports and documents
contained therein or annexed thereto;
"CGTA 1979" means the Capital Gains Tax ▇▇▇ ▇▇▇▇;
"the Company" means Fluorocarbon Fabrications Limited a company
registered in England under number 1300643 and
incorporated on 4th April 1977 as a private company
limited by shares under the Companies Acts 1948 to
1967;
"Completion" means completion of the sale and purchase of the
Shares;
"the Completion has the meaning given in Clause 4.1.1;
Accounts"
"the Deed of Indemnity" means a deed of today's date in the form set out in
Schedule 5;
"the Directors" means the persons listed in Schedule 3;
"the Disclosure Letter" means the letter including all attachments thereto and
documents expressly referred to therein of even date
herewith from the Vendors' Solicitors to the
Purchaser's Solicitors;
"the Indemnities" the indemnities contained in the Deed of Indemnity;
"the Net Asset Value" the aggregate of the capital and reserves of the
Company as at Completion as shown by the Completion
Accounts including Fixed Assets as defined in Clause
4.4 but excluding any prepaid rent or insurance
premiums;
"the Obligations" means each of the obligations, warranties and
undertakings undertaken or given by the Vendors or
either of them in or pursuant to this Agreement;
"the Purchase Price" means the consideration for the Shares determined in
accordance with Clauses 3.1, 3.2 and 4;
"the Purchaser's means Messrs Ernst & Young
Accountants" of Commercial ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇
"the Purchaser's means Messrs ▇▇▇▇▇▇▇ of ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇" ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇ Reference PWD/CAS;
"the Records" means all lists of customers, books, accounts,
ledgers, financial and other records and other
documents of whatever kind relating to the Company
and whether electronically or magnetically or otherwise
stored or recorded;
"the Shares" means the shares to be bought and sold pursuant to
Clause 2.1;
"the Supply Agreement" means the supply agreement of even date herewith
relating to PTFE glass cloth, skived PTFE film
products and all other fluoro-polymer containing
products supplied by Chemical Fabrics Europe to Aerovac
Systems (Keighley) Limited
"Tax" includes all forms of tax, charge, impost, duty,
levy, liability or sum of whatever kind payable in
respect of income, profits, distributions, assets,
gains and receipts of all kinds or otherwise at the
instance of the Revenue, Customs, fiscal, governmental
or local authorities of the United Kingdom or elsewhere
and all penalties, charges and interest relating to any
claim for taxation, including (without limitation)
income tax, the investment income surcharge,
corporation tax, capital gains tax, development land
tax, rates, value added tax, customs and other import
duties, stamp duty, stamp duty reserve tax, estate
duty, capital transfer tax, inheritance tax, capital
duty, the special charge, petroleum revenue tax, poll
tax, payments to be made by the Company under the Pay
As You Earn system, National Insurance Contributions
and any interest penalty or fine in connection
therewith;
"the Taxes Act" means the Income and Corporation Taxes ▇▇▇ ▇▇▇▇;
"the Taxes Act 1970" means the Income and Corporation Taxes ▇▇▇ ▇▇▇▇;
"the Vendors means ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Josolyne of ▇▇▇▇▇ House, Spring
Accountants" ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇
"the Vendors' means ▇▇▇▇▇▇▇ Suddards of Empire House, 10
Solicitors" Piccadilly, Bradford BDl 3LR (ref: SXK/RMS);
"the VATA 1983" means the Value Added Tax ▇▇▇ ▇▇▇▇;
"the Warranties" means the warranties set out in Schedule 4 given by the
Vendors under sub-clauses 9.1, 9.5 and 9.6;
SCHEDULE 3
----------
THE DIRECTORS
--------------
Name of Director
----------------
▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇
SCHEDULE 4
----------
THE WARRANTIES
--------------
1. Accuracy of Information
-----------------------
The facts set out in the recitals B and C and schedules 1 and 3 to
this Agreement are true and accurate in all respects.
2. Ownership of the Shares
-----------------------
There is no option, right to acquire, right of first refusal, right of
pre- emption other than in the Company's articles of association,
mortgage, charge, pledge, lien or other form of security or
encumbrance on over or affecting any shares in the capital of the
Company and there is no agreement or commitment to give or create any
of the foregoing and no claim has been made by any person to be
entitled to any of the foregoing, and the Vendors are entitled to sell
and transfer the full legal and beneficial ownership in the whole of
the issued share capital of the Company to the Purchaser on the terms
set out in this Agreement nor do any circumstances exist whereby any
third party may properly claim entitlement or possession of any of the
Shares.
3. No Subsidiaries, Associations or Branches
-----------------------------------------
3.1 The Company:
3.1.1 is not the holder or beneficial owner of any class of any shares or
other securities of any other company (whether incorporated in the
United Kingdom or elsewhere);
3.1.2 is not a member of any partnership or other unincorporated association
(other than recognised trade associations); and
3.1.3 has no branch or permanent establishment outside the United Kingdom;
3.1.4 does not control (within the meaning of Section 840 Taxes Act) any
company.
4. Corporate Organisation
----------------------
4.1 The register of members of the Company contains complete and accurate
records of the members of the Company from time to time and the
Company has not received any notice or application or notice of any
intended application for the rectification thereof.
4.2 The statutory books of the Company are written up to date to the day
before Completion and share certificates have been properly issued to
the Vendors and the Company has recorded in duly signed minutes all
resolutions and proceedings which ought to be so recorded.
4.3 All returns, particulars, resolutions and other documents required to
be filed with the Registrar of Companies have been filed by the
Company and the Company has not materially breached any provisions of
the Companies ▇▇▇ ▇▇▇▇.
4.4 The Company has not exercised or purported to exercise or claimed any
liens over any of its issued shares and no call on any shares is
outstanding and all such shares are fully paid up or credited as fully
paid up.
4.5 The Company has not at any time capitalised or agreed to capitalise
(in the form of shares, debentures or other securities or in paying up
any amounts unpaid on any shares, debentures or other securities) any
profits or reserves of any class or description or passed or agreed to
pass any resolution to do so.
4.6 No person has the right to call for the issue of any share or loan
capital of the Company by reason of any conversion rights or under any
option or other agreement.
4.7 The copy of the memorandum and articles of association of the Company
which is annexed to the Disclosure Letter is true and up to date and
incorporates all documents and information required to be annexed
thereto or embodied therein and the Company has complied with all the
provisions of its memorandum and articles of association and in
particular (but without prejudice to the generality of the foregoing)
has not entered into any ultra ▇▇▇▇▇ transaction.
4.8 As far as the Vendors are aware, all necessary records, deeds,
agreements and documents relating to the Company, its assets and its
business have been fully, properly and accurately prepared and
maintained in accordance with the Companies ▇▇▇ ▇▇▇▇. All such
records are in the possession of the Company or under its control.
5. Accounts
--------
5.1 The Accounts and the audited balance sheet and profit and loss account
of the Company for the financial years ended 31st October 1988, 1989
and 1990:
5.1.1 have been prepared in accordance with the Companies ▇▇▇ ▇▇▇▇ and other
applicable statutes and regulations and statements of standard
accounting practice and show a true and fair view of the affairs of
the Company as at the respective dates to which they have been drawn
up and of the results of the Company for the accounting reference
periods ended on each of those dates and are not affected by any
exceptional or extraordinary items; and
5.1.2 fully disclose all income and assets and make provision or reserve or
disclosure for all its known liabilities (whether of a capital or
income nature and whether or not quantified or disputed) and fully
disclose by way of note any known prospective or contingent liability
of the Company at the Accounting Date.
5.2 Book Debts
---------
So far as the Vendors are aware (having made enquiries only of the
Company's employees and those responsible for its credit control
function) the debts included in the Accounts owed to the Company
(except as provided in the bad debt reserve) will be recoverable in
full within six months of the date hereof.
5.3 The bases and policies of accounting of the Company adopted for the
purpose of preparing the Accounts are the same as those adopted for
the purpose of preparing the audited accounts for the last three
accounting periods.
5.4 There were no commitments of a capital nature outstanding at the
Accounting Date (save as disclosed in the Accounts) and since the
Accounting Date the Company has not entered into nor agreed to enter
into any such commitments in excess of Pounds 500.
6. Dividends or Distributions
--------------------------
Other than the dividends referred to in the Disclosure Letter, no
dividends or other distributions of profits or management charges or
special bonuses have been or will be declared, made or paid by the
Company after the Accounting Date and prior to Completion and all
dividends or distributions of profits declared, made or paid since the
date of incorporation of the Company have been declared, made or paid
in accordance with law and its articles of association.
7. Borrowings
----------
7.1 The total amount borrowed by the Company from its bankers does not
exceed its overdraft facilities and the total amount borrowed by the
Company from whatsoever source does not EXCEED any limitation on its
borrowing contained in its articles of association or in any debenture
stock deed or other deed or document executed by it.
7.2 The Company does not have any outstanding loan capital, nor has it
factored its debts or borrowed (otherwise than from banks) any money
which it has not repaid.
7.3 The Company has not lent any money which has not been repaid to it nor
does it own the benefit of any debt (whether present or future) other
than debts accrued to it in the ordinary course of its business.
8. Bank Accounts and Borrowing Facilities
--------------------------------------
8.1 A statement of all the bank and other money accounts of the Company
and of the credit or debit balances thereon as at a date not more than
two working days prior to the date hereof has been supplied to the
Purchaser and the Company has no other bank or deposit accounts
(whether in credit or overdrawn) not included in such statement.
8.2 In relation to such encumbrances (if any) as have been disclosed and
in relation to such bank overdraft, borrowing or other financial
facilities as are available to the Company:
8.2.1 the Vendors have supplied to the Purchaser full details thereof and
true copies of all documents relating thereto;
8.2.2 there has been no contravention of or non-compliance with any
provision of any such document;
8.2.3 no steps for the enforcement of any encumbrances have been taken or
threatened;
8.2.4 there has not been any alteration in the terms and conditions of any
of the said arrangements;
8.2.5 the Vendors and the Company have not done anything (including,
without limitation, entering into this Agreement) whereby the
continuance of the said arrangements and facilities in full force and
effect might be affected or prejudiced; and
8.2.6 none of the said arrangements is dependent on the guarantee of or on
any security provided by the Vendors or a third party.
9. Tax Provisions
--------------
9.1 Full provision or reserve has been made in the Accounts (other than
any amount of corporation tax wholly attributable to an increase in
the rate of corporation tax made after the date thereof) for all Tax
liable to be assessed on the Company or for which it is accountable or
which is likely to be claimed in respect of income, profits or gains
earned, accrued or received, or deemed to have been earned, accrued or
received on or before the Accounting Date or any event or deemed event
on or before the Accounting Date including distributions made down to
such date or provided for in the Accounts and proper provision has
been made in the Accounts for deferred Tax in accordance with
generally accepted accountancy principles.
9.2 Returns
-------
The Company has properly and punctually made in all material respects
all computations, payments and returns and provided all notices,
accounts and information required for Tax purposes and all of such
computations, payments and such notices, accounts, information and
returns were when made (or subsequently amended) correct and made on a
proper basis and none is or is known by the Vendors to be likely to be
disputed by the Inland Revenue or any other authority concerned.
9.3 Payment of Tax
--------------
The Company has duly and punctually paid all Tax which it has become
liable to pay and is under no liability to pay any penalty or interest
in connection with any claim for Tax.
9.4 PAYE
----
The Company has properly operated the Pay As You Earn system,
deducting Tax as required by law from all payments to or treated as
made to employees and ex-employees of the Company and accounting to
the Inland Revenue for all Tax so deducted and all Tax chargeable on
benefits provided for directors and employees of the Company.
9.5 Payments Under Deduction
------------------------
All payments by the Company to any person which ought to have been
made under deduction of Tax have been so made and the Company has (if
required by law to do so) accounted to the appropriate Tax authorities
for the Tax so deducted.
9.6 Group Income
------------
The Company has at no time been a member of a group of companies (as
defined in ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇ or Section 29 VATA 1983) nor
been owned by a consortium within the meaning of Section 247 (group
income) or Section 413(6) (group relief) Taxes Act.
9.7 Advance Corporation Tax
-----------------------
9.7.1 The Disclosure Letter contains particulars of all arrangements and
agreements to which the Company is or has been a party relating to the
surrender of advance corporation tax made or received by the Company
under Section 240 Taxes Act (setting off company's surplus advance
corporation tax against subsidiary's liabilities) and:
9.7.2 the Company has not paid nor is liable to pay for the benefit of any
advance corporation tax which is now known to be or may become
incapable of set off against the Company's present or future
anticipated liabilities to corporation tax; and
9.7.3 The Company has not made or received nor purported or agreed
to make or receive any surrender of the benefit of advance corporation
tax under Section 240 Taxes Act (setting off company's surplus advance
corporation tax against subsidiary's liability).
9.7.4 The Company has no surplus advance corporation tax
9.7.5 Section 245 Taxes Act (treatment of Act on change of ownership of
company) does not apply to the surplus advance corporation tax of the
Company.
9.8 Close Company
-------------
The Company is a close company within the meaning of Section
414 Taxes Act.
9.9 Capital Assets
-------------
9.9.1 If each of the Fixed Assets were disposed of for a consideration equal
to the book value of that asset in or adopted for the purpose of the
Accounts no liability to corporation tax on chargeable gains or
balancing charge under the Capital ▇▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ or Finance ▇▇▇
▇▇▇▇ would arise in excess of the deferred tax provision made or to be
made in the Completion Accounts.
9.9.2 The Company has not appropriated any capital item to trading stock.
9.9.3 The Company has made no claim under Sections 115, ▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇ (▇▇▇▇-▇▇▇▇ relief).
9.9.4 The Company has not made a claim pursuant to Section 21 CGTA 1979
(compensation and insurance money).
9.9.5 No asset owned by the Company is subject to a deemed disposal and re-
acquisition under Schedule 5 paragraphs 11, 14 or ▇▇ ▇▇▇▇ ▇▇▇▇ (▇▇▇▇▇
for assets acquired prior to 6th April 1965).
9.9.6 No gain chargeable to corporation tax will accrue to the Company on
the disposal of any debt owing to the Company not being a debt on a
security.
9.9.7 The Company has not acquired benefits under any policy of insurance or
assurance otherwise than as original beneficial owner.
9.10 The Company is not entitled to any allowable losses (in accordance
with the provisions of Section 345(1) Taxes Act(definition of
chargeable gains)) to reduce any chargeable gains for corporation tax
purposes accruing the Company upon disposals by the Company which take
place at any time after Completion.
9.11 Capital Allowances
------------------
So far as the Vendors are aware (having made no enquiry) the Company
has not engaged in any transaction to which Sections 157 and 75 of the
Capital Allowances Act 1990 (anti avoidance provisions) applies.
9.12 Transaction not at Arm's Length
-------------------------------
The Company has not disposed of nor acquired any asset in
circumstances such that the provisions of Section 29A CGTA 1979
(disposals and acquisitions treated as made at market value) could
apply to such disposal or acquisition, nor entered into any
transaction at an undervalue (as defined by Section 238 Insolvency
▇▇▇ ▇▇▇▇, or otherwise than by way of bargain at arm's length, nor
given a preference (as defined by Section 239 Insolvency Act 1986)
nor entered into any material transaction with a connected person (as
defined by section 63 Capital Gains Tax Act 1979).
9.13 Trading Losses
--------------
9.13.1 There are no trading losses brought forward at the Accounting Date.
9.13.2 Any losses to which the Company claims entitlement in accordance with
the provisions of Sections 338 (allowance of charges on income) and
393(9) (certain charges treated as losses) Taxes Act are in respect of
payments made wholly and exclusively for the purpose of the trade of
the Company.
9.13.3 Within the period of three years ended with the date hereof there has
been no major change in the nature or conduct of any trade now carried
on by the Company or change of ownership of the Company (within the
meaning of Section 768 Taxes Act (disallowance of trading losses)) and
the Company has not during that period taken over or acquired a trade
or part of a trade hitherto carried on by some other person.
9.13.4 No trade of the Company has ceased or become small or negligible.
9.13.5 No government investment in the Company has been written-off in
circumstances such that Section 48 Finance ▇▇▇ ▇▇▇▇ or Section 400
Taxes Act (restriction of tax losses) will apply.
9.14 Withdrawal of Relief
--------------------
The Company is not liable so far as the Vendors are aware to the
withdrawal of any form of relief against Tax and there is no
information available to the Vendors from which it appears that the
Company may be liable to such withdrawal.
9.15 Annual Payments
---------------
All interest, rent, service charges, royalties, annuities and other
annual payments paid or payable by the Company under any loan, lease,
contract, agreement, covenant or other commitment or arrangement is
or are or will be deductible for corporation tax purposes, whether in
computing income from a particular source or in computing total
profits or otherwise.
9.16 Gifts
-----
The Company is not liable to be assessed to corporation tax on
chargeable gains or to inheritance tax or capital transfer tax as
donor or donee of any gift or transferor or transferee of value.
9.17 Distributions
-------------
9.17.1 No distribution within the meaning of Sections 209, 210 or 418
Taxes Act (transactions amounting to distributions) has been made by
the Company since 5th April 1965, except dividends shown in its
audited accounts, nor is the Company bound to make any such
distribution.
9.17.2 No security within the meaning of Section 254(1) Taxes Act issued by
the Company and outstanding at the date hereof was issued in such
circumstances or is of such a character that interest payable thereon
falls to be treated as a distribution under Section 209 Taxes Act
(transactions amounting to distributions).
9.17.3 The Company has not at any time after the 6th April 1965 repaid or
agreed to repay any share capital or otherwise reduced or agreed to
reduce its share capital or issued or agreed to issue any share
capital or paid up or agreed to pay up any share capital otherwise
than by the receipt of new consideration (as defined in Section
254(1) and (5) Taxes Act).
9.18 Payment to Employees
--------------------
9.18.1 The Company has not made any payment whether gratuitous or otherwise
to or provided any benefit for any officer or employee or ex-officer
or ex-employee of the Company which is not allowable in full as a
deduction in calculating the profits of the Company for taxation
purposes.
9.18.2 The Company has not issued any shares in the circumstances described
in Section 138 Taxes Act or Section 77(1) Finance ▇▇▇ ▇▇▇▇ (share
incentive schemes).
9.19 National Insurance etc.
----------------------
The Company has paid all national insurance and graduated pension
contributions for which it is liable and has properly accounted for
all national insurance contributions deductible out of employees'
remuneration and has kept proper books, records, invoices and other
documents relating to the same and has available for reference all
such records, invoices and other documents.
9.20 Pension Scheme
--------------
The Company is not required to contribute to any pension scheme or
insurance scheme and has no outstanding liabilities from any such
schemes in place prior to Completion.
9.21 Value Added Tax
---------------
9.21.1 The Company has VAT Registration Number 287435621 and has complied
with all statutory provisions and regulations relating to value
added tax and has not been requested to give security under such
legislation and has duly paid or provided for or will in the
Completion Accounts provide for all amounts of value added tax for
which the Company is liable.
9.21.2 All supplies made by the Company are taxable supplies or are exempt
supplies within the applicable de minimis limits and the Company is
not and will not be denied credit for any input tax by reason of the
operation of Section 15(l)(b) or (c) VATA 1983 (input tax allowable)
and regulations made thereunder.
9.21.3 No supplies have been made to the Company to which the provisions of
Section 7 VATA 1983 (reverse charge on supplies received from abroad)
apply.
9.22 Stamp Duty and Capital Duty
---------------------------
9.22.1 All documents in the enforcement of which the Company may be
interested have been properly stamped in accordance with applicable
stamp duty legislation
9.22.2 The Company has complied with the provisions of the Finance ▇▇▇ ▇▇▇▇
relating to capital duty and has duly paid all capital duty which it
is liable to pay and has not made any claim for relief or exemption
under Section 55 Finance ▇▇▇ ▇▇▇▇, Section 27 Finance ▇▇▇ ▇▇▇▇,
Schedule 19 Finance ▇▇▇ ▇▇▇▇, Section 78 Finance ▇▇▇ ▇▇▇▇ or Sections
75, 76 or 77 Finance ▇▇▇ ▇▇▇▇ (provisions for relief from stamp
and capital duty for companies).
9.22.3 The Company has not made any claim for relief or exemption under
Section 42 Finance Act 1930 (relief from stamp duty for associated
companies).
9.23 Tax Avoidance
-------------
The Company has not been a party to or otherwise involved in any tax
avoidance transaction scheme or arrangement whose principal purpose
was tax avoidance and which had limited or no commercial benefit.
9.24 Share Capital
-------------
The Company has not since its incorporation purchased or redeemed or
agreed to purchase or redeem any of its share capital; or provided any
financial assistance or, in breach of the Companies ▇▇▇ ▇▇▇▇, agreed
(whether contingently or otherwise)to provide any financial assistance
for the purchase, subscription or other acquisition of its own
shares.
9.25 Overseas Provisions
-------------------
9.25.1 The Company has never been the legal or beneficial owner or controller
(whether directly or indirectly through another company) of any share
capital or securities in another company resident outside the UK for
UK tax purposes.
9.25.2 The Company has not transferred a trade carried on by it outside the
United Kingdom through a branch or agency to a company not resident in
the UK for UK tax purposes in such circumstances that a chargeable
gain may be deemed to arise at a date after such transfer under
Sections 268 or 268A Taxes Act 1970 (postponement of charge on
transfer of assets to non-resident company).
9.25.3 The Company does not own and has never owned a material interest in an
offshore fund which is or has ever been a non-qualifying offshore fund
as defined by Section 760 Taxes Act.
9.26 Corporation Tax Falling on Shareholder
--------------------------------------
The Company has not received any capital distribution to which
the provisions of Section 346 Taxes Act (recovery of corporation tax
from shareholder) could apply.
10. Trading Matters
---------------
10.1 Since the Accounting Date:
10.1.1 the business of the Company has been continued in the ordinary and
proper course;
10.1.2 the turnover, the financial and trading position of the Company has
not deteriorated;
10.1.3 the average period of credit given by the Company has not been longer
than that shown by the Accounts;
10.1.4 no asset has been acquired by the Company on deferred payment terms in
respect of which any part of the purchase price remains outstanding.
10.2 Since the Accounting Date as far as the Vendors are aware:
10.2.1 no supplier of the Company has ceased supplying the Company or
substantially reduced its supplies to the Company; and
10.2.2 no customer of the Company has terminated any contract with the
Company or ceased or materially reduced its business with it;
and to the best of the Vendors' knowledge information and belief
(having made no external enquiries) after the date hereof, no supplier
or customer will do so.
11. Licences and Consents
---------------------
The Company has all necessary licences (including statutory licences),
consents and approvals for the proper carrying on of its business and
none of the Vendors knows (having made no enquiries) of any factors
that might in any way prejudice the continuance or renewal of any of
those licences, consents or approvals and the Company is not
restricted by contract from carrying on its present activities in any
part of the world.
12. Material Contracts
------------------
12.1 All contracts which are material (which shall mean contracts of kinds
referred to in the following sub-paragraph) have been disclosed in the
Disclosure Letter.
12.2 The Company is not a party to any contract, transaction, obligation,
commitment, arrangement or liability which:
12.2.1 is of an onerous nature; or
12.2.2 is for a fixed term of more than 6 months; or
12.2.3 is incapable of complete performance in accordance with its terms
within 6 months after the date on which it was entered into or
undertaken; or
12.2.4 not being for a fixed term is incapable of termination in accordance
with its terms by the Company on 60 days' notice or less; or
12.2.5 is known will result in a loss to the Company on completion of
performance; or
12.2.6 cannot readily be fulfilled or performed by the Company on time and
without undue or unusual expenditure of money and effort; or
12.2.7 involves or will involve obligations, expenditure or receipts of an
unusual or exceptional nature and not in the ordinary and proper
course of the Company's business; or
12.2.8 involves payment by the Company by reference to fluctuations in the
index of retail prices published by the Department of Employment or
any other similar index; or
12.2.9 requires an aggregate consideration payable by the Company in excess
of Pounds 10,000; or
12.2.10 involves the supply of goods the aggregate sale value of which will be
in excess of 10 per cent of the turnover for the current financial
year of the Company; or
12.2.11 contains currency or commodity re-negotiation or re-determination
clauses; or
12.2.12 is so far as the Vendors are aware (having made no enquiry) in any way
otherwise than in the ordinary and proper course of the Company's
business; or
12.2.13 is in breach of any statutory or delegated legislative provision; or
12.2.14 is a contract by which the obligations of the Company to a party are
sub-contracted to a third party.
13. Other Contracts
---------------
13.1 Compliance with the terms of this Agreement does not and will not:
13.1.1 conflict with or result in the breach of or constitute a default under
any of the terms, conditions or provisions of:
13.1.1.1 any agreement or instrument to which the Company is now a party; or
13.1.1.2 the Company's memorandum or articles of association; or
13.1.1.3 any loan to or mortgage, guarantee or charge created or entered into
by the Company or any lien, lease, order, judgment, award, injunction,
decree, ordinance or regulation or any other restriction of any kind
or character to which any property of the Company is subject or by
which the Company is bound; or
13.1.2 relieve any other party to a contract with the Company of its
obligations thereunder, or enable it to terminate its obligations
thereunder; or
13.1.3 result in the creation or imposition of any lien, charge or
encumbrance of any nature whatsoever on any of the Company's property
or assets.
14. Outstanding Offers
------------------
Save in the ordinary course of the Company's business no offer,
tender or the like is outstanding which is capable of being converted
into an obligation of the Company by an acceptance or other act of
some other person.
15. Defective Products
------------------
So far as the Vendors are aware (having made no enquiry), the Company
has not prior to the date hereof manufactured or sold products which
are or have or will become in any material respect faulty or defective
or which do not comply in any material respect with any warranties
or representations expressly or impliedly made by the Company nor has
the Company expressly accepted any liability or obligation to service,
repair, maintain, take back or otherwise do or not do anything in
respect of any articles or stock that would apply after any such
article or stock has been delivered by it.
16. Other Parties' Defaults
-----------------------
No person with whom the Company has entered into any contract is known
to be in material default thereunder.
17. Ownership of Assets
-------------------
17.1 The Company owned at the Accounting Date and (except for current
assets subsequently sold or realised in the ordinary and proper course
of business) still owns at the date hereof all the assets included in
the Accounts and none of such assets is the subject of an
agreement for payment on deferred terms or has been acquired by the
Company in circumstances which render such asset liable to
cancellation or avoidance under any statute or other rule of law.
17.2 The Company has not disposed of or agreed to dispose of, or granted or
agreed to grant any option, right of pre-emption or right of first
refusal in respect of, or offered for sale, its estate or interest in
any of the Fixed Assets.
17.3 None of the property, assets, undertaking, goodwill or uncalled
capital of or used by the Company is subject to any debentures,
mortgages, charges, liens, deposits by way of security, bills of
sale, hire purchase, credit or conditional sale or other
agreements for payment on deferred terms or any other encumbrance of
any nature or any agreement or commitment to give or create any of the
foregoing but the same are the sole, unencumbered absolute property of
the Company free from encumbrances.
17.4 No charge of any description by the Company has crystallised, nor has
any event occurred which, with the passage of time, will or could
cause any charge to crystallise, over all or any of the assets or
property (including, without limitation, the Properties) of the
Company.
18. Plant in Working Order
----------------------
18.1 The Fixed Assets are, having regard to their values, age and
condition, capable, and will (having regard as aforesaid and subject
to fair wear and tear) be capable, over the period of time during
which they will be written down to a nil value in the accounts of the
Company, of doing the work for which they were purchased.
18.2 do not (if correctly used) contravene any law or requirement or
restriction having the force of law.
19. Compliance with Laws
--------------------
As far as the Vendors are aware (having made no enquiry), neither the
Company nor any of its officers, agents or employees (during the
course of their duties in relation to the Company) has committed or
omitted to do any act or thing the commission or omission of which is
in contravention of any Act, order, regulation, decree, judgment,
ruling, law (whether created by statute or otherwise) or the like made
in any country by any government, government agency, court or other
body giving rise to any fine, penalty, default proceedings or other
liability on the part of, or which could have a material adverse
effect upon the assets or business of, the Company including, without
limitation, such legislation or regulations relating to the
administration of companies, employment, health and safety,
environmental protection, pollution.
20. Insurance
---------
Brief details of all the Company's insurance policies have been
disclosed to the Purchaser and all such insurance is currently in full
force and effect and nothing has been done or omitted to be done which
could make any policy of insurance void or voidable and there are no
claims outstanding, pending or threatened against the Company by any
employee or third party in respect of any accident or injury which are
not fully covered by insurance.
21. No Bonus Schemes
----------------
There are no schemes in operation whereunder any employee of the
Company or so far as the Vendors are aware any other person is
entitled to a commission or remuneration of any other sort calculated
by reference to the whole or part of the turnover profits or sales of
the Company.
22. Remuneration of Senior Executives
---------------------------------
22.1 Since the Accounting Date no change has been made in the rate of
remuneration or the emoluments or pension or other benefits of any
director, ex-director or senior executive of the Company (a senior
executive being a person in receipt of remuneration in excess of
Pounds 30,000 per annum) and no change has been made in the terms of
the engagement of any director or senior executive of the Company
and no additional directors have been appointed.
22.2 No money other than in respect of remuneration or emoluments for
employment is payable to or for the benefit of any director or senior
executive of the Company.
23. Contracts of Service Terminable on Three Months' Notice
-------------------------------------------------------
All subsisting contracts of service to which the Company is a party
are terminable on three months' notice or less without compensation
(other than compensation in accordance with the Employment Protection
(Consolidation) Act 1978).
24. Directors
---------
No person other than the Directors is a director or shadow director of
the Company. No director is or has been disqualified from acting as a
company director under any rule of law.
25. Particulars of Employees
-------------------------
The particulars shown in the schedule of employees annexed to the
Disclosure Letter are true and complete and show all remuneration
payable and other benefits provided and which the Company is bound to
provide (whether now or in the future) together with the dates of
birth and commencement of employment with the Company of each officer
and employee of the Company.
26. Future Pay Increases
--------------------
The Company is not under any obligation to increase the remuneration
of or to make any bonus or incentive payments to any of its employees
or officers at any future date.
27. Special Arrangements
--------------------
The Company is not a party to (i) any consultancy or management
agreements; or (ii) any arrangement or contract with a trade union,
or other body representing employees of the Company or any trade
organisation of employers.
28. Insider Contracts
-----------------
28.1 There is not outstanding and there has not at any time during the
last six years been outstanding any contract or legally binding
arrangement to which the Company is a party and in which either of
the Vendors or any director or employee of the Company is or has been
interested, whether directly or indirectly, and the Company is not a
party to, nor have its profits or financial position during such
period been affected by, any contract or arrangement which is not of
an entirely arm's length nature.
28.2 There are no agreements or understandings (whether legally enforceable
or not) between (i) the Company and (ii) any person who is a
shareholder or the beneficial owner of any interest in the Company or
any company in which such a person is interested relating to (a) the
management of the Company's business; or (b) the appointment or
removal of its directors; or (c) the ownership or transfer of
ownership or the letting or possession of any of its assets; or (d)
the provision of finance, goods, services or other facilities to or by
the Company; or (e) otherwise howsoever relating to the Company or
its affairs.
29. Litigation
----------
29.1 The Company is not engaged in or threatened by any litigation or
arbitration proceedings (save for routine debt collection) as
plaintiff, defendant or third party.
29.2 The Company is not involved in any industrial or trade dispute or any
other dispute regarding any claim with any of its employees or any
trade union or trade organisation and to the best of the knowledge,
information and belief of the Vendors there are no facts or
circumstances which might give rise to such industrial action or
dispute.
29.3 The Company is not a party to any collective agreement, dismissal
procedures agreement or union membership agreement whether such
agreement is binding in law or not.
30. Agencies, Licences, etc.
------------------------
The Company is not a party to any agency, distributorship, marketing,
purchasing, manufacturing or licensing agreement or any restrictive
trading or other agreement pursuant to which any part of its business
is carried on, or which in any way restricts its freedom to carry on
the whole or any part of its business in any part of the world, in
such manner as it thinks fit or which in any way infringes, or which
has or should have been registered or notified under, the Restrictive
Trade Practices Acts, the Monopolies and Mergers Acts, the Fair
Trading ▇▇▇ ▇▇▇▇, Articles 85 or 86 Treaty of Rome or any other anti-
trust, anti-monopoly or anti-cartel legislation and the Company has
not pursued and is not pursuing any course of conduct which amounts to
an anticompetitive practice within the meaning of Section 2(l)
Competition ▇▇▇ ▇▇▇▇.
31. No Disclosure of Trade Secrets
------------------------------
No disclosure has been made by the Company or the Vendors to any
person other than the Purchaser and its advisers of any of the
industrial know-how or the financial or trade secrets of the Company
save in the ordinary and proper course of business of the Company and
upon the Company having secured as far as practicable the confidential
nature of any such disclosure.
32. Know-how Patents etc.
--------------------
32.1 Full details of all know-how, patents, trade marks (whether registered
or not), registered and unregistered designs, or other industrial or
commercial monopoly rights used by the Company in its business in the
2 years prior to Completion ("the Intellectual Property Rights") have
been disclosed in the Disclosure Letter to the Purchaser's Solicitors
32.2 The Company is the sole registered proprietor and is entitled
beneficially to the Intellectual Property Rights and the applications
made respectively therefor.
32.3 The Vendors have received no written notice that any goods or articles
manufactured by the Company or method or process employed by the
Company (or by any licensees under any licence granted by the Company)
infringe any patents, trade marks, registered or unregistered designs
or other industrial or commercial monopoly rights or rights relating
to confidentiality of information of any third party or that any claim
has been made against the Company or any such licensee in respect
of such infringement.
32.4 Full details of all licence agreements relating to the Intellectual
Property Rights confidential information or the like to which the
Company is a party (whether as licensor or licensee) have been
disclosed to the Purchaser in the Disclosure Letter and all such
agreements are valid and subsisting and nothing has been done or
omitted to be done by the Company which would enable any such
agreement to be terminated or which would in any way constitute a
breach of the terms of any such agreement.
33. Business Names
--------------
The Company does not carry on nor has carried on business under or
used a name other than its corporate name.
34. Fees
----
No one is entitled to receive any finders' fee, brokerage or other
commission from the Company nor has the Company paid or promised to
pay any fees incurred in connection with this transaction.
35. No Powers of Attorney
--------------------
There are no powers of attorney in force given by the Company nor have
the directors of the Company given any express or implied authority
to any person to act on behalf of or represent the Company.
36. Investment Grants
-----------------
The Company has not done or failed to do any act or thing which could
result in all or any part of an investment grant or other similar
payment or allowance made or due to be made to it becoming repayable
or being forfeited by it and full particulars of all claims by the
Company to any investment grant or other similar payment or allowance
which have been made during the past 6 years have been disclosed in
the Disclosure Letter to the Purchaser.
37. Guarantees, Joint Ventures etc.
------------------------------
The Company is not a party to any contract for guarantee, indemnity or
suretyship or any partnership, joint venture or consortium agreement.
38. Properties
----------
There are no outstanding liabilities or residual obligations under any
agreements relating to freehold or leasehold property held by the
Company prior to Completion and the Company holds no current interest
in any such property.
39. Environmental Matters
---------------------
The Company itself has complied with and the Vendors are aware of no
previous breach of any legislation (including regulations, codes of
practice, circulars and guidance notes made thereunder) relating to
environmental matters, including (but without limitation) waste,
contaminated land, discharges to land, ground and surface water and
sewers, emissions to air, noise, dangerous, hazardous or toxic
substances and materials, nuisance, health and safety and neither the
Company nor the Vendors is aware of any action, claims or
proceedings (whether actual or potential) nor has any other reason to
believe that the Company has or is likely to have any liability in
relation to such matters.
40. Inter-company sales
-------------------
The value of inter-company sales between the Company and Aerovac
Systems (Keighley) Limited in the periods ended 31 October 1988, 1989
and 1990 have been Pounds 86,316, Pounds 148,970 and Pounds 73,522
respectively.
41. Shipments
---------
The Company has shipped goods since the Accounting Date in accordance
with normal or requested delivery dates from customers.
SCHEDULE 5
----------
DEED OF INDEMNITY
----------------
THIS DEED is made the [ ] day of [ ]
19[ ]
PARTIES : -
(1) ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇ ▇▇▇▇▇▇ (together "the Covenantors");
(2) FLUOROCARBON FABRICATIONS LIMITED ("the Company")
incorporated in England with registered number 1306643 whose
registered office is at ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇;
and
(3) CHEMFAB HOLDINGS U.K. LIMITED ("the Purchaser")
RECITALS:-
This Deed is entered into pursuant to an Agreement of even date herewith ("the
Agreement") and made between the Covenantors of the one part and the Purchaser
of the other part whereby the Purchaser has agreed to purchase the whole of the
issued share capital of the Company.
NOW THIS DEED WITNESSES AND IT IS HEREBY AGREED AND DECLARED as follows: -
1. Interpretation
--------------
1.1 In this Deed unless the context otherwise requires:
1.1.1 words and expressions defined in the Agreement shall have the same
meaning herein and any provisions in the Agreement concerning matters
of construction or interpretation shall also apply in this Deed;
1.2 For the purposes of this Deed a payment of Tax shall be deemed to have
been made by the Company if a payment of Tax would properly have been
made by it but for the utilization of any losses, allowances, credits,
reliefs, deductions or set-offs by the Company for its own benefit
(other than losses, allowances, credits, reliefs, deductions or set-
offs which relate to any period or arose to the benefit of the Company
prior to Completion and without prejudice to the generality of the
foregoing, and by way of example only, a payment of Tax shall be
deemed to have been made if such a payment would have been made but
for the availability to the Company of losses arising after
Completion and carried back to a period ending on or before that date
under the provisions of Section 393(2) Taxes Act (losses other than
terminal losses).
1.3 For the purposes of this Deed a payment of Tax deemed to have been
made in accordance with the provisions of subclause l.2 hereof shall
be deemed to have been made on the date on which such payment of Tax
would have been made (assuming that no appeal had been made against
the assessment or other notification in respect of any such Tax) but
for the availability of the losses, allowances, credits, reliefs,
deductions or set-offs concerned.
2. Indemnity
---------
2.1 The Covenantors (for themselves and their respective estates and
personal representatives) hereby jointly and severally covenant with
the Purchaser and persons to whom the Purchaser has assigned or may
assign the benefit of the Purchaser's rights under this Deed and (as a
separate covenant) with the Company that subject as herein and in
Clause 10 of the Agreement provided the Covenantors will, as directed
by the Purchaser, pay to the Purchaser or to the Company an amount
equal to:
2.1.1 any payment of Tax made or hereunder deemed to be made by the Company
as a direct or indirect result of any act, omission, event,
transaction or series of transactions (excluding the entering
into and/or completion of the Agreement or any transactions
contemplated thereby) occurring wholly or partly on or before the
date hereof
2.1.2 any Tax the right to a repayment of which has been taken into account
in the Accounts and which right is lost or cancelled, in whole or in
part;
2.1.3 any payment of Tax or deemed payment of Tax by the Company resulting
from the receipt by the Purchaser or the Company of any payment under
the provisions of this Deed provided that if it shall be finally
determined (whether by agreement or on appeal) that any payment ("the
original payment") made under this sub-clause is itself liable to Tax
such payment shall be increased to such sum as after allowing for Tax
or deemed payment of Tax thereon is equal to the original payment; and
2.1.4 any reasonable costs or expenses reasonably incurred by the Company
in connection with any such payment or deemed payment of Tax or loss
or cancellation of a right to a repayment of Tax as is referred to in
sub-clauses 2.1.1, 2.1.2 or 2.1.3 hereof or in connection with any
action reasonably taken in avoiding, resisting or settling any
such payment or claim for payment or in connection with the recovery
of payment from the Covenantors under this Deed,
such payment to be made, where the same relates to a payment of Tax by
the Company, on the day on which such payment of Tax is due and
payable, where the same relates to a deemed payment of Tax, on the
date on which such payment is deemed to have been made under the
provisions of sub-clause 1.3 hereof and where the same relates to a
lost right of repayment under sub-clause 2.1.2 above on the date of
notification to the Company that such repayment shall not be made or,
if later, the date on which such repayment was due for the purpose of
being taken into account in the Accounts.
3. Interest
--------
If the Covenantors shall fail to pay any sum due from them hereunder
on the due date for payment in accordance herewith the Covenantors
shall pay interest thereon from such date until payment in full (after
as well as before any judgment) compounded with half yearly rests on
1st January and 1st July of each year such interest being computed at
the rate of four per cent per annum above the base rate for the time
being of National Westminster Bank plc.
4. Limitations
-----------
4.1 The covenants contained in Clause 2 hereof shalt not apply to a
payment or deemed payment of Tax:
4.1.l to the extent to which in calcu1ating the provision for Tax in the
Accounts or the Competion Accounts an amount was included in respect
of that Tax or that payment or discharge of such Tax has specifically
been taken into account in the Accounts; or
4.1.2 which arises as a result of transactions in the ordinary course of
business since the Accounting Date both before and after the Purchaser
has completed the purchase of the Company; or
4.1.3 which arises or to the extent that any such Tax is increased as a
result only of an increase in rates of Tax or change in the law
relating to Tax made after the date hereof with retrospective effect;
or
4.1.4 to the extent that the subject matter of the payment of Tax is
disclosed in the Disclosure Letter as a potential tax liability; or
4.1.5 to the extent that the Covenantors are liable to the Purchaser under
the Warranties in respect of or arising from the same claim for Tax.
4.1.6 in respect of value added tax and duties relating to supplies made and
imports received the liability for which has been incurred in the
ordinary course of business of the Company; or
4.1.7 to the extent that such claim would not have arisen but a cessation of
trading or change in the nature or conduct of the trade carried on by
the Company on or after the date hereof; or
4.1.8 if the Purchaser or the Company fails after due warning to act in
accordance with the reasonable instructions of the Covenantors in
conducting any dispute in respect of that claim as set out in Clause 5
hereof.
5. Claims
-------
5.1 If the Purchaser or the Company receives any notice, demand,
assessment or other document whereby it appears that the Company may
be required to make or suffer an actual or deemed payment of Tax or
loss of a right to the repayment of Tax which may result in the
Purchaser and/or the Company having a claim against the Covenantors
under this Deed (referred to in this clause as a "Tax Claim") the
Purchaser shall give or procure that notice in writing is given to the
Covenantors as soon as is reasonably practicable.
5.2 If the Covenantors shall indemnify and secure the Company and the
Purchaser to their reasonable satisfaction against all losses,
costs, interest, damages and expenses which may be incurred thereby
the Company shall take such action as the Covenantors may reasonably
and promptly by written notice request to avoid, resist, appeal or
compromise any Tax Claim.
5.3 If within 30 days of the receipt by them of the aforesaid notice the
Covenantors fail to notify the Purchaser; in writing of their
intention to request the Company to avoid, resist, appeal or
compromise the Tax Claim and fail to indemnify and secure the Company
to their satisfaction the Purchaser and the Company shall be free to
settle the Tax Claim on such terms as they in their absolute
discretion think fit and without prejudice to their rights and
remedies under this Deed.
5.4 The Company shall make a repayment to the Covenantors to the extent
that and on the date on which the Company receives any repayment of
any amount paid in respect of any claim for Tax pursuant to this Deed.
5.5 For the purpose of this Deed the Company shall be deemed to receive a
payment for any Tax:-
(a) on the date on which the Company receives a repayment of Tax; or
(b) if and when the Company would have received such a repayment but
for a liability to any Tax in respect of which the Company is not
entitled to be indemnified hereunder
5.6 Upon making any repayment to the Covenantors pursuant to this Deed the
Company shall also pay to the Covenantors any repayment supplement
pursuant to Section 825 of the Taxes Act 1988 attributable to that
repayment and any interest (less tax) awarded in respect thereof.
6. Miscellaneous
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6.1 The Purchaser or the Company may release or compromise in whole or in
part the liability of either of the Covenantors under this Deed or
grant any time or other indulgence but any such release, compromise or
grant shall not affect the liability of the other of the Covenantor.
6.2 This Deed shall be governed by and construed in accordance with
English law.
6.3 This Deed shall not be assignable without the consent of all parties
save that the Purchaser shall be entitled to assign this Deed to a
associated company of the Purchaser without consent and to any other
party with the consent of the Covenantors (not to be unreasonably
withheld).
6.4 A claim may only be made pursuant to this Deed by the Company to the
extent that the Purchaser (or its lawful assigns) shall not be
entitled to make a full and effective recovery from the Vendors or
either of them in respect of the claim.
7. Notices
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7.1 Any notice or other document to be given hereunder may be
delivered or sent by first class recorded delivery post or telex to
the party to be served at that party's address appearing in this Deed
or at such other address as that party shall notify in
accordance herewith. Any such notice or document shall deemed to have
been served:
7.2 if delivered, at the time of delivery; or
7.3 if posted, at the expiration of 48 hours after the envelope containing
the same shall have be put into the post; or
7.4 if sent by telex at the expiration of 12 hours after the same shall
have been despatched.
In proving such service it shall be sufficient to prove that delivery
was made or that the envelope containing such notice or document was
properly addressed and posted as prepaid first class recorded delivery
letter or that the telex was properly addressed and despatched as the
case may be.
IN WITNESS whereof the parties hereto have executed this Deed the day and year
first above written.
SCHEDULE 6
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FIXED ASSETS
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Agreed Value
Item Description ( Pounds stg)
---- ----------- --------------
1. Rule dies for cut shapes 400
2. Heat sealing press 1,000
3. Heat sealing bar 150
4. 5 of fusion irons 500
5. Clipper joint press 1,972
6. Hayssen belt punch 200
7. Heat sealing bar (cantilevered) 80
8. Press and bar controllers 246
9. Car BXl9 Citroen 7,962
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TOTAL Pounds 12,6l0
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