EXHIBIT 10.17
DATED 18 NOVEMBER, 1998
(1) MR AND MRS A M XXXXXXXX
(2) PIPELINE INDUCTION HEAT LIMITED
AGREEMENT FOR THE SALE AND PURCHASE OF
THE WHOLE OF THE ISSUED SHARE CAPITAL OF
DIDCOT HEAT TREATMENT LIMITED
Xxxxxxx Suddards
Solicitors
Trinity Court
00 Xxxx Xxxxxx Xxxxxx
Xxxxxxxxxx
X00 0XX
Tel: 0000 000 0000
Fax: 0000 000 0000
SALE AND PURCHASE AGREEMENT
THIS AGREEMENT is made on November 18, 1998
BETWEEN:
(1) THE PERSONS whose names and addresses are set out in column 1 of
Schedule 1 ("the Vendors").
(2) PIPELINE INDUCTION HEAT LIMITED (Company No: 1478556) whose registered
office is at The Pipeline Centre, Xxxxxxxxxx Road, Xxxxxxxxxx Xxxx
Xxxxxxxxxx Xxxxxx, Xxxxxxx, XX00 0XX ("the Purchaser").
IT IS HEREBY AGREED as follows:
1. INTERPRETATION
1.1 In this Agreement, unless the context otherwise requires, the
following words and expressions shall bear the following
meanings:
"ADDITIONAL means the amount of (pound)508,000.
ELEMENT"
"ASSOCIATE" means any person, firm or company which is a
connected person (as defined in Section 839
ICTA) of the Vendors (or any of them), or which
is an associated company of the Vendors (or any
of them) within the meaning of Section 416 ICTA
but as if in sub-section (2) of that Section
there was substituted for the words "the
greater part" wherever they appear the words
"twenty five per cent or more").
"BANK means the sum of (pound)0 being the amount
LIABILITIES" above (pound)0
allocated for bank debt and any amount above
(pound)11,000 allocated for hire purchase
agreements in the Management Accounts.
"BUSINESS DAY" means any day other than Saturdays Sundays and
Bank Holidays during which clearing banks are
open for business in the City of London.
"CA 1985" means the Companies Xxx 0000.
"CA 1989" means the Companies Xxx 0000.
"COMPANIES ACTS" means CA 1985 and CA 1989 and the former
Companies Acts (within the meaning of Section
735(1) of CA 1985).
"COMPANY" means Didcot Heat Treatment Limited brief
details of which are set out in Schedule 2.
"COMPLETION" means completion of the sale and purchase
of the Shares in accordance with Clause 6.
"DISCLOSURE means the letter of even date herewith from
LETTER" the Vendors to the Purchaser disclosing
exceptions to the Warranties.
"DIRECTORS LOANS" means the loans of (pound)130,587 due to the
Directors of the Company as detailed in the
Management Accounts of the Company.
"FA" means Finance Act.
"FEBRUARY means the balance sheet of the Company as at the
BALANCE SHEET" close of business on 28 February 1999 to be
prepared
in accordance with Clause 5.
"FINAL PRICE" means the Net Assets plus the Additional
Element and the Sizewell Payment.
"FIRST TRANCHE" means the sum of (pound)1,265,000 .
"ICTA" means the Income and Corporation Taxes Xxx 0000.
"INTELLECTUAL means any patents, trade marks, service marks,
PROPERTY RIGHTS" registered designs, utility models, design
right, copyright (including copyright in
computer software), semi-conductor topography
right, inventions, trade secrets and other
confidential information, know-how, business
or trade names and all other intellectual
property and rights of a similar or
corresponding nature in any part of the world,
whether registered or not or capable of
registration or not and including all
applications and the right to apply for any of
the foregoing rights.
"LAST ACCOUNTS" means the audited balance sheet of the Company
as at the Last Accounts Date and the audited
profit and loss account of the Company made up
to the Last Accounts Date and (in each case)
the auditor's and the directors' reports and
notes thereon.
"LAST ACCOUNTS
DATE" means 28 February 1998.
"LEASE" means the lease of Xxxx 0 Xxxxxxx Xxxx,
Xxxxxxxxx, Xxxxxxxxxxx between (1) Trustees
for the time being of Didcot Heat Treatment
Limited Private Pension
Plan and (2) Didcot Heat Treatment Limited
dated with the date of this Agreement.
"METHOD means the method statement of the Company
STATEMENT" developed by the Company and used in carrying
out the Sizewell Contract a copy of an example
of the method statement is contained in Annex A
to this Agreement.
"MANAGEMENT means the unaudited balance sheet and profit
ACCOUNTS" and loss account of the Company for the period
ended 30 September 1998.
"NET ASSETS" means Total Assets less Total Liabilities.
"PLANNING ACTS" means the Town and Country Planning Xxx 0000,
the Planning (Listed Buildings and Conservation
Areas) Xxx 0000, the Planning (Consequential
Provisions) Xxx 0000, the Planning (Hazardous
Substances) Xxx 0000 and the Planning
(Compensation) Xxx 0000, and any other statute
or subordinate legislation relating to town and
country planning.
"PROPERTY" means the property of the Company briefly
described in Schedule 5 (and for the purpose of
the Warranties relating to environmental
matters includes all plant, equipment,
machinery, storage vessels, pipes, cables and
associated apparatus present at, upon, in or
underneath such Property).
"PURCHASER'S means KPMG of Xxxxxx VII Quay, Navigation Way,
ACCOUNTANTS" Ashton, Xxxxxxx, XX0 0XX.
"PURCHASER'S means Xxxxxxx Suddards, of Trinity Court,
SOLICITORS" 00 Xxxx Xxxxxx Xxxxxx, Xxxxxxxxxx X00 0XX.
"SECURITY means any mortgage, charge, assignment or
INTEREST" assignation by way of security, guarantee,
indemnity, debenture, hypothecation, pledge,
declaration of trust, lien, right of set off or
combination of accounts, or any security
interest whatsoever, howsoever created or
arising.
"SERVICE means the service agreements in the agreed form
AGREEMENTS" to be entered into between the Company and Mr
and Xxx Xxxxxxxx respectively.
"SHARES" means the 1,000 ordinary shares of (pound)1
each, in the capital of the Company fully paid
or credited as fully paid to be sold by the
Vendors in the numbers set out opposite their
respective names in column 2 of
Schedule 1.
"SIZEWELL means the Agreement between the Company and
CONTRACT" Mitsui Xxxxxxx Energy Service Limited for heat
treatment services at the nuclear power station
in Sizewell, Suffolk and, subject to the
provisions of clause 10.
"SIZEWELL means the payment by the Purchaser to the
PAYMENT" Vendors following 28 February 1999 due
entirely to the Sizewell Contract (for the
avoidance of doubt any liability to the Company
due entirely to the Sizewell Contract
(including, but not limited to, any liability
due to collection and rehousing of equipment,
termination of any occupation of premises and
other
relocation costs) shall be taken into account
in calculating this payment) determined in
accordance with the provisions of Clause 10.
"STOCK EXCHANGE" means London Stock Exchange Limited.
"TAXATION" means all forms of taxation, charges, duties,
imposts, rates, levies and governmental charges
(whether national or local) in the nature of
tax, whatsoever and whenever created, enacted,
or imposed, and whether of the United Kingdom
or elsewhere, and any amounts payable to any
Taxation Authority or any other person as a
result of any enactment relating to taxation,
together with all fines, penalties, interest,
costs, charges, surcharges and expenses
connected therewith and "Tax" shall be
construed accordingly.
"TAXATION means the Inland Revenue, H.M. Customs and
AUTHORITY" Excise or any statutory or governmental
authority or body (whether in the United
Kingdom or elsewhere) involved in the
collection or administration of Taxation.
"TAX DEED" means the Deed in the form set out in Schedule
4.
"TAXATION includes statutes (and all regulations and
STATUTES" arrangements whatsoever made thereunder)
whether of the United Kingdom or elsewhere, and
whether enacted before or after the date of
this Agreement, providing for or imposing any
Taxation.
"TCGA" means the Taxation of Chargeable Gains Xxx 0000.
"TOTAL ASSETS" means the value (in Sterling) of all of the
assets of the Company as contained in the
February Balance Sheet.
"TOTAL means the amount (in Sterling) of all
LIABILITIES" liabilities, or accruals for liabilities, of
the Company as contained in the February
Balance Sheet.
"UNDERTAKING", bear the meanings ascribed to them in CA
"SUBSIDIARY 1989.
UNDERTAKING",
"PARENT
UNDERTAKING",
AND
"PARTICIPATING
INTEREST"
"VENDORS' means Xxxxx Xxxxxxxx of 0 Xxxxxxxxxxx Xxx,
XXXXXXXXXXX" Xxxxxx, XX0 XXX.
"VENDORS' means Xxxxx Son & Xxxxxx of 7 St Martins
SOLICITORS" Street. Wallingford, Xxxx, XX00 OAN.
"WARRANTIES" means the warranties and representations set out
in Schedule 3
1.2 References to any statute, or to any statutory provision,
statutory instrument, order or regulation made thereunder,
includes that statute, provision, instrument, order or regulation
as amended, modified, consolidated, re-enacted, or replaced from
time to time, whether before or after the date of this Agreement
and also includes any previous statute, statutory provision,
instrument, order or regulation, amended, modified, consolidated,
re-enacted or replaced by such statute, provision, instrument,
order or regulation.
1.3 All references to a statutory provision shall be construed as
including references to all statutory instruments or orders,
regulations or ot her subordinate legislation made pursuant to
that statutory provision.
1.4 Unless the context otherwise requires, references to the singular
include the plural, references to any gender include all other
genders, and references to "persons" shall include individuals,
bodies corporate, unincorporated associations, professions,
businesses and partnerships.
1.5 Clause headings are for information only and shall not affect the
construction of t his Agreement.
1.6 The Schedules to this Agreement shall for all purposes form part
of this Agreement .
1.7 Each agreement, undertaking, covenant, warranty and
representation by two or more of the Vendors shall be deemed for
all purposes to be made or given jointly and severally.
1.8 References to "the agreed form" mean in the form agreed in
writing between the Vendors' Solicitors and the Purchaser's
Solicitors prior to signature of this Agreement.
2. SALE AND PURCHASE
2.1 Subject to the terms and conditions of this Agreement, the
Vendors shall sell and the Purchaser shall purchase the Shares
together with all accrued benefits and rights attaching or
accruing to the Shares, (including all dividends declared), on or
after the date of this Agreement.
2.2 The Vendors jointly and severally covenant with the Purchaser as
follows:
2.2.1 that each of the Vendors has the right to sell and
transfer those Shares set out opposite his name in
column 2 of Schedule 1 in accordance with the terms of
this Agreement;
2.2.2 that they will at their own cost take any necessary
steps to perfect the Purchaser's title to the Shares;
2.2.3 that the Shares are sold free from any liens, charges
and encumbrances (whether monetary or not and including
any lien which the Vendors might otherwise have,
whenever arising, for unpaid amounts of consideration
payable under this Agreement in respect of the Shares)
and from all other rights exercisable by third parties.
3. PRE-EMPTION RIGHTS WAIVER
The Vendors waive all rights of pre-emption (if any) over the Shares to
which they may be entitled under the Articles of Association of the
Company, or otherwise, in relation to the sale and purchase of the
Shares pursuant to this Agreement.
4. CONSIDERATION
4.1 The Consideration for the Shares shall (subject to any adjustment
pursuant to the provisions of Clause 5) be the Final Price which
shall be satisfied in accordance with the provisions of this
Clause 4.
4.2 On Completion the Purchaser will pay, on account of the Final
Price, an amount equal to the First Tranche which will be
satisfied by payment in cash by the Purchaser at Completion.
4.3 On account of the Final Price a payment due and payable on 28
February 1999 will be made on 30 April 1999, assuming that the
February Balance Sheet has been agreed or determined pursuant to
Clause 5:-
4.3.1 if the Net Assets plus the Additional Element is greater
than the First Tranche the Purchase shall pay to the
Vendor an amount equal to the Net Assets plus the
Additional Element less the First Tranche;
4.3.2 if the Net Assets plus the Additional Element is equal
to the First Tranche then no further payment will be
made;
4.3.3 if the Net Assets plus the Additional Element are less
than the First Tranche then the Vendor shall repay to
the Purchaser an amount equal to the First Tranche less
the sum of Additional Element and the Net Assets;
The liability of the Vendors to the Purchaser to make any payment
due under this Clause 4.3 shall be joint and several.
4.4 Provided always that if the February Balance Sheet has not been
agreed or determined pursuant to Clause 5 on 30 April 1999 then
the payment pursuant to Clause 4.3 will bear interest at a rate
of 2% above the base rate of Lloyds Bank PLC from 30 April 1999
until the date of payment.
4.5 If at Completion the Bank Liabilities are any amount above
(pound)0 then if following Completion and a cash positive
position verified by the provision of bank statements for a
period of one month confirming a cash positive position to that
period then the Purchaser will pay the Vendors a sum equal to
the amount of the Bank Liabilities (pound)0 at the Completion
Date.
4.6 The Purchaser will pay to the Vendors the Sizewell Payment as
per the provisions of clause 10.
5. FEBRUARY BALANCE SHEET
5.1 The Purchaser shall procure, that within six weeks after 28
February 1999 the Purchaser's Accountants will prepare a draft
February Balance Sheet and a draft statement of the Final Price
and submit both for approval to the Vendors.
5.2 The February Balance Sheet to be prepared:
5.2.1 on the basis of the historical cost convention;
5.2.2 using the specific accounting practices specified in
Schedule 7 and (subject to the provisions of Schedule
7) generally accepted United Kingdom accounting
principles (including all relevant Statements of
Standard Accounting Practice issued by the Accounting
Standards Committee, Financial Reporting Standards
issued by the Accounting Standards Board, and any
applicable pronouncements of the Urgent Issues Task
Force of the Accounting Standards Board); and
5.2.3 subject to the preceding provisions of this Clause 5.2,
in a manner consistent with the procedures and policies
bases and methods of valuation adopted in the
preparation of the Last Accounts.
5.3 Due regard shall be had in the preparation of the February
Balance Sheet (inter alia) to all matters set out or referred to
in the Disclosure Letter insofar as the same discloses any
liability (actual or contingent) which ought properly to be
provided for in the February Balance Sheet in accordance with
Clause 5.2 above.
5.4 Within 15 days of receipt by the Vendors of the draft February
Balance Sheet the Vendors will inform the Purchaser in writing
whether or not in their opinion the draft February Balance Sheet
complies with the requirements of this Clause 5 and, if not,
shall specify in writing, so far as they are then reasonably able
so to do, the amount and nature of any item which they do not
accept. If the Vendors confirm in writing that they accept the
draft February Balance Sheet, or if they fail to inform the
Purchaser within 15 days of receipt whether or not they accept
that the draft February Balance Sheet complies with the
requirements of this Clause 5, such draft shall be the February
Balance Sheet.
5.5 If the Vendors inform the Purchaser, in accordance with Clause
5.4, that they do not accept that the draft February Balance
Sheet complies with the requirements of this Clause 5, the
Vendors and the Purchaser will hold discussions in good faith
with a view to agreeing the February Balance Sheet. If such
agreement is reached, and is confirmed in writing by the parties,
it shall be final and binding on the parties but without
prejudice to the Purchaser's right to claim under the Warranties,
the Tax Deed or otherwise in respect of any matter.
5.6 Any dispute about the February Balance Sheet which remains
unresolved 45 days after receipt by the Vendors of the draft
February Balance Sheet shall, at the request of either party be
referred for final settlement to an independent firm of chartered
accountants nominated jointly by the Vendors and the Purchaser
or, failing such nomination, within 14 days after request by
either the Vendors or the Purchaser, nominated at the request of
either party by the President for the time being of the Institute
of Chartered Accountants in England and Wales. Such independent
firm shall act as experts and not as arbitrators and (in the
absence of manifest error) its decisions (both as to the manner
in which its determination is to be made and as to the subject
matter of its determination) shall be final and binding on the
parties, but shall be without prejudice to the Purchaser's right
to claim under the Warranties, the Tax Deed or otherwise in
respect of any matter.
5.7 All costs incurred by the Vendors in reviewing and agreeing the
February Balance Sheet shall be borne by the Vendors and all such
costs incurred by the Purchaser shall be borne by the Purchaser.
The fees of such independent firm shall be payable by the Vendors
and the Purchaser in such proportions as such firm determines (or
failing such determination in equal shares).
5.8 Each party will co-operate fully with the other and, if
applicable, with the independent firm appointed under Clause 5.6
(including giving all reasonable access to records, information,
and to personnel) with a view to enabling the draft February
Balance Sheet to be prepared and subsequently discussed and, if
applicable, with a view to enabling any such independent firm to
make any
determination required by Clause 5.6, and in particular the
Purchaser shall procure that the Company shall permit the Vendors
and their advisers (and, if applicable, such independent firm) to
have access to, and (where reasonable) to take copies of any
records or information belonging to the Company.
6. COMPLETION
6.1 Completion shall take place at the offices of the Vendor's
Accountants immediately after the signing of this Agreement when
the events set out in sub-clauses 6.2 to 6.5 shall occur.
6.2 At Completion the Vendors shall deliver to the Purchaser's
Solicitors:
6.2.1 duly completed and executed transfers of the Shares in
favour of the Purchaser or as it directs together with a
power of attorney from each Vendor in the agreed form
enabling the Purchaser to vote the Shares pending its
registration as shareholder;
6.2.2 the certificates for the Shares;
6.2.3 the Tax Deed duly executed by the Vendors;
6.2.4 the resignation of Xxx. Xxxxx Xxxx Xxxxxxxx as director
and secretary of the Company from her respective offices
in the Company, with a written acknowledgement under
seal from her in such form as the Purchaser requires
that she has no claim up to the date of Completion
against the Company on any grounds whatsoever;
6.2.5 the resignation of the existing auditors of the Company
confirming that they have no outstanding claims of any
kind against the Company and accompanied by a statement
in relation to the Company complying with Section 394 CA
1985 that there are no circumstances connected with
their ceasing to hold office which
they consider should be brought to the attention of the
members or creditors of that Company;
6.2.6 evidence satisfactory to the Purchaser that all charges,
debentures and other Security Interests affecting the
Company (including without limitation all such Security
Interests held by Lloyds Bank plc) have been discharged
in full; and.
6.2.7 the original Lease duly completed by the landlord of the
Property.
6.3 At Completion there shall be delivered or made available to the
Purchaser:
6.3.1 the Certificate of Incorporation of the Company;
6.3.2 the minute books of the Company and the duly made up
minutes of Completion;
6.3.3 the register of members and other statutory registers of
the Company duly made up to Completion;
6.3.4 the common seal of the Company;
6.3.5 all unissued share certificates of the Company;
6.3.6 the unstamped Lease;
6.3.7 all bank statements of all bank accounts of the Company
as at a date not more than three Business Days prior to
Completion together with bank reconciliation statements
in respect of each such account made up to Completion;
6.3.8 new bank mandates to be given by the Company; and
6.3.9 all the current cheque books, paying in books and unused
cheques of the Company.
6.4 At Completion the Vendors shall procure that the Service
Agreements are entered into.
6.5 At Completion a Board Meeting of the Company shall be duly
convened and held at which with effect from Completion:
6.5.1 the resignation referred to in Clause 6.2.5 shall be
submitted and accepted and the Purchaser's Accountants
shall be appointed auditors of the Company;
6.5.2 the transfers referred to in Clauses 6.2.5 shall
(subject to stamping) be registered;
6.5.3 such persons as the Purchaser may nominate shall be
appointed as additional directors and as the secretary
of the Company and the resignations referred to in
Clause 6.2.4 shall be submitted and accepted;
6.5.4 all authorities to the bankers of the Company relating
to bank accounts shall be revoked and new authorities to
such persons as the Purchaser may nominate shall be
given to operate the same;
6.5.5 the Service Agreements shall be approved and executed by
the Company and thereupon exchanged with the Vendors;
6.5.6 the Lease shall be approved and executed by the Company
and thereupon exchanged with the Vendors; and
6.5.7 the registered office of the Company shall be changed to
such address as the Purchaser shall stipulate.
6.6 Upon completion of the matters specified in Clauses 6.2 to 6.5
the Purchaser will pay the sum of the First Tranche by
telegraphic transfer to the Vendors' Solicitors (whose receipt
shall be an absolute discharge to the Purchaser of this
obligation).
6.7 Upon Completion the Directors Loans shall be repaid.
6.8 The Purchaser may in its absolute discretion waive any
requirement contained in Clauses 6.2 to 6.5 (inclusive) but shall
not be obliged to complete the purchase of any of the Shares
unless the purchase of all the Shares is completed in accordance
with such Clauses and this Agreement.
6.9 If in any respect any of the provisions of Clauses 6.2 to 6.5
(inclusive) are not complied with on the date agreed for
Completion then the Purchaser may defer Completion to a date not
more than 28 days after such date (and so that the provisions of
this Clause 6 (other than Clause 6.9) shall apply to Completion
as so deferred) and if there shall be non-compliance with any of
such provisions for a period of fourteen days following written
notice of non-compliance having been served by or on behalf of
the Purchaser on the Vendors then the Purchaser shall be entitled
to rescind this Agreement.
6.10 Any rights of rescission conferred upon the Purchaser by this
Agreement shall be in addition to and without prejudice to all
other rights and remedies available to the Purchaser and no
exercise or failure to exercise, or delay in exercising, such
rights of rescission shall constitute a waiver by the Purchaser
of any other rights or remedies.
7. WARRANTIES
7.1 The Vendors to the extent and subject as set out in this Clause 7
warrant, represent and covenant to the Purchaser that the
Warranties are and at Completion will be, true and accurate in
all respects.
7.2 Each of the Warranties (other than those referred to in paragraph
1 of Schedule 6 in respect of which no qualification is accepted)
is given subject to the matters fully and fairly disclosed in the
Disclosure Letter but none of the Warranties is otherwise subject
to any qualification whatever. No letter, document or other
communication shall be deemed to constitute a disclosure for the
purposes of this Agreement unless the same is accepted as such by
the Purchaser and is annexed to in the Disclosure Letter.
7.3 Each of the Warranties is without prejudice to any other Warranty
and, except where expressly stated, no Clause contained in this
Agreement governs or limits the extent or application of any
other Clause and the Warranties shall not in any respect be
extinguished or affected by Completion.
7.4 The rights and remedies of the Purchaser in respect of any breach
of the Warranties shall not be affected by completion of the
purchase of the Shares, by any investigation made by or on behalf
of the Purchaser into the affairs of the Company, by its
rescinding or failure to rescind this Agreement, by any failure
to exercise or delay in exercising any right or remedy or by any
other event or matter whatsoever, except a specific and duly
authorised written waiver or release expressly referring to such
breach.
7.5 None of the information supplied by the Company or its
professional advisers prior to the date of this Agreement to any
of the Vendors or their agents, representatives or advisers in
connection with the Warranties or the contents of the Disclosure
Letter, or otherwise in relation to the business or affairs of
the Company, shall be deemed a representation, warranty or
guarantee of its accuracy by the Company to the Vendors and shall
not constitute a defence to any claim by the Purchaser under the
Warranties or under the Tax Deed, and the Vendors waive any and
all claims which they might otherwise have against the Company
and their respective officers and employees.
7.6 Notwithstanding any rule of law or equity to the contrary, any
release, waiver or compromise or any other arrangement of any
kind whatsoever to which the Purchaser may agree or effect in
relation to one of the Vendors in connection
with this Agreement or the Tax Deed, and in particular, but
without limitation, in connection with any of the Warranties,
shall not affect the rights and remedies of the Purchaser as
regards any other of the Vendors.
7.7 The Vendors jointly and severally undertake to the Purchaser to
indemnify the Purchaser and the Company against (i) any
diminution in the value of the assets of the Company, (ii) any
increase in any liability of the Company, and (iii) any payment
necessarily made or required to be made by the Purchaser or the
Company, as a result of, or in connection with, any breach of any
of the Warranties or required to put the Company in the position
in which it would have been had there been no such breach of the
Warranties and against all costs and expenses incurred in
connection therewith. This indemnity shall be without prejudice
to any other rights and remedies of the Purchaser in relation to
the breach and all other rights and remedies are expressly
reserved to the Purchaser.
7.8 Each of the Vendors undertakes, in relation to any Warranty which
refers to the knowledge, information, belief or awareness of a
Vendor or any similar expression, that he has made full, due and
careful enquiry into the subject matter of that Warranty
(including without limitation where applicable of the employees,
agents and advisers of the Company) and each of them acknowledges
that the knowledge, information, belief or awareness of one of
the Vendors shall be attributable to the others of them.
7.9 Subject to 7.10 below the provisions of Schedule 6 shall have
effect to limit the liability of the Vendors under the Warranties
(other than those Warranties specified in paragraph 1 of Schedule
6 in respect of which the liability of the Vendors shall be
unlimited).
7.10 Only provisions 2.1.3, 2.1.4, 2.4, 2.7, 2.8, 2.10 and 2.11 of
Schedule 6 shall apply to any claims under any of the Warranties
where the claim has arisen due to the Company's liability under
the Sizewell Contract.
7.11 Each of the Vendors jointly and severally agrees to indemnify and
keep indemnified the Purchaser (for itself and as trustee for
each member of the Purchaser's Group) from and against all
losses, liabilities, costs, charges, expenses, actions,
proceedings, claims and demands which any such person may suffer
or incur arising out of any breach of any of the Warranties due
to the Company's liability under the Sizewell Contract. This
indemnity shall be without prejudice to any other rights and
remedies of the Purchaser in relation to the breach and all other
rights and remedies are expressly reserved to the Purchaser.
8. RESTRICTIONS ON THE VENDORS
8.1 In this Clause:
"BUSINESS" means all and any trades or other
commercial activities of the Company
which as at the Completion Date the
Company shall carry on with a view to
profit or which the Company shall as
at the Completion Date have determined
to carry on with a view to profit in
the immediate or foreseeable future;
"CONFIDENTIAL BUSINESS means all or any information relating
INFORMATION" to:
(i) the business methods,
corporate plans, management
systems, finances, new
business opportunities or
development projects of the
Company;
(ii) the marketing or sales of any
past or present or future
product or
service of the Company; or
(iii) any trade secrets or other
information relating to the
provision of any product or
service of the Company to
which the Company attaches
confidentiality or in
respect of which it holds
an obligation of
confidentiality to any third
party;
"CUSTOMER" means any person, firm or company who
or which shall at the date of
Completion be in negotiation with the
Company for the provision of
Restricted Services or to whom the
Company has provided Restricted
Services during the period of one year
prior to the date of
Completion;
"MATERIAL INTEREST" means:
(a) the holding of any position
as director, officer,
employee, consultant,
partner, principal or agent;
(b) the direct or indirect
control or ownership
(whether jointly or alone)
of any shares or debentures
or any voting rights attached
to them; or
(c) the direct or indirect
provision of
any financial assistance.
"PURCHASING GROUP" means the Purchaser and each of its
Subsidiaries;
"RESTRICTED AREA" means any country in which the
Vendors have conducted business
during the past three years;
"RESTRICTED SERVICES" means the manufacture for sale or hire
of heat treatment equipment and
consumables; the provision of
electrical resistance and high
velocity gas fuel fired heating
services; and the production and
supply of heating methodology,
procedures and associated stress
calculations, including finite element
analysis, for heat
treatment processes.
8.2 Without prejudice to any provisions operating to similar
effect which may be contained in any service contract or contract
of employment entered into now, or in the future between any of
the Vendors and the Company or any members of the Purchaser's
Group, each of the Vendors hereby covenants with the Purchaser
that without the prior written consent of the Purchaser:
8.2.1 he will not for a period of 3 years after the date of
Completion hold any Material Interest in any business
(other than the Purchaser or the Company or any company
which may acquire the Purchaser or the Company) which
provides Restricted Services in competition with the
Business in the Restricted Area;
8.2.2 he will not for a period of 3 years after the date of
Completion hold any Material Interest in any person,
firm or company carrying on business in the Restricted
Area (other than the Purchaser or the
Company or any company which may acquire the Purchaser
or the Company) which requires or might reasonably be
expected by the Company to require him to disclose or
make use of any Confidential Business Information in
order properly to discharge his duties or to further his
interest such person, firm or company;
8.2.3 he will not at any time after Completion disclose or
permit there to be disclosed (save as authorised by the
Purchaser or required by law) any Confidential Business
Information, nor will he at any time after Completion
otherwise make use of any Confidential Business
Information for his own benefit, or for the benefit of
others, or in any way to the detriment of the Company;
8.2.4 he will not at any time after Completion solicit or
entice away or seek to entice away any person who is,
and was at the date of Completion, employed by the
Company;
8.2.5 he will not for a period of 3 years after the date of
Completion within the Restricted Area and in respect of
Restricted Services directly or indirectly:
(a) solicit the custom of, or orders from, or
(b) accept orders from any person, firm or company
who at any time during the two years immediately
preceding Completion was a client or customer of
the Company in respect of Restricted Services;
8.2.6 that he will not for a period of 3 years after the date
of Completion interfere with or seek to interfere with
the continuance of supplies to the Company (or the terms
relating to such supplies) from any suppliers who have
been supplying components, materials or services to the
Company at any time during the two years immediately
preceding Completion; or
8.2.7 that if he shall have obtained trade secrets or other
confidential information belonging to any third party
under an agreement which contained restrictions or
disclosure, he will not without the previous written
consent of the Purchaser at any time infringe such
restrictions.
8.3 The parties agree that the restrictions contained in Clause 8.2.3
shall not apply if and to the extent that the Confidential
Business Information concerned has ceased to be confidential or
come into the public domain (other than as a result of breach of
any obligation of confidence by the Vendors).
8.4 Each Vendor shall procure that all companies and businesses
directly or indirectly owned or controlled by him shall be bound
by and observe the provisions of this Clause as if they were
parties covenanting with the Purchaser.
8.5 Each Vendor acknowledges that the Purchaser is accepting the
benefit of the covenants contained in this Clause on its own
behalf.
8.6 Nothing in this Clause 8 shall preclude any Vendor from being the
owner for investment purposes only of not more than 3% of the
equity share capital of any company listed on the Official List
or the Alternative Investment Market of The Stock
Exchange.
8.7 The restrictions contained in this Clause 8 are considered
reasonable by the Vendors in all respects but if any of those
restrictions shall be held to be void in the circumstances where
it would be valid if some part were deleted the parties agree
that such restrictions shall apply with such deletion as may be
necessary to make it valid and effective.
8.8 The provisions of Clauses 8.2.1 to 8.2.7 (inclusive) are separate
and severable and shall be enforceable accordingly.
9. VENDORS' AND PURCHASER'S UNDERTAKING
9.1 Until 28 February 1999 or the completion of the Sizewell
Contract, whichever is later, the Vendors and the Purchaser
shall procure that the Company unless both parties give their
prior written consent (any director of the Purchaser or either
Vendor having authority to do so such consent once given to be
relied upon by the other party), undertake that none of the
following shall occur:-
9.1.1 any change of location of the principal place of
business of the Company;
9.1.2 any change in the nature or conduct of the ordinary day
to day business or the goods dealt in or services
rendered by the Company;
9.1.3 the formation or acquisition of any subsidiary, the
entering into of any joint venture, partnership or any
other contract which is material in the context of its
business, assets or level of profitability;
9.1.4 any disposal of any part of the assets or undertaking of
the Company otherwise than in the ordinary and proper
course of business, and then only at full open market
value therefor;
9.1.5 any transfer to the Company of any onerous or
unprofitable activity, undertaking or obligation of the
Purchaser or from any member of the Purchaser's Group, or
of any third party;
9.1.6 the sale or provision to the Company of any goods or
services by the Purchaser or any member of the
Purchaser's Group, or the purchase by the Company from
the Purchaser or any member of the Purchaser's Group of
any goods or services at a price higher than a commercial
arms length rate for the goods or services in question;
9.1.7 the making of any monetary transfers or loans or the
payment of any service or management charges or other
payments by the Company to the Purchaser and/or the
Purchaser's Group other than in respect of
charges at a fair commercial rate for services rendered
by the Purchaser or the Purchaser's Group which have
first been approved by the Vendors;
9.1.8 the passing or proposing of any resolution for the
winding-up of the Company or the presentation by the
Purchaser or the Purchaser's Group of a petition for an
order for the winding up of the Company unless the
Company shall be unable to pay its debts as they fall
due;
9.1.9 any change of name of the Company;
9.1.10 the declaration to make or the payment of any dividend
or other distribution by the Company;
9.1.11 any change in the accounting reference date or
accounting policies of the Company;
9.1.12 permit any of its insurances to lapse or become void or
voidable;
9.1.13 the creation of any charge or other encumbrance over the
assets or part of the assets of the Company or over any
of the shares in the Company or the giving of any
guarantee or indemnity by the Company in either case to
secure the liabilities of any other person or company;
9.1.14 the employment of personnel which the Vendor reasonably
believes are surplus to the requirements of the Company
or make any change in the terms and conditions of
employment or any employee of the Company (other than for
good cause);
9.1.15 permit or incur any capital expenditure or enter into
any commitment to do so;
9.1.16 permit or incur any liability to arise for the Company
or enter into any commitment to do so; and
9.1.17 do any act or deed or omit to do any act or deed other
than those which show utmost good faith to each other.
9.2 Until 28 February 1998 or the completion of the Sizewell
Contract, whichever is later, the Vendors and the Purchaser agree
to procure that:
9.2.1 the Company shall retain the bank account with Lloyds
Bank Plc Sort Code: 30-93-93 and account number 0000000;
and
9.2.2 for any transaction equal to or above (pound)1,000 two
signatories shall be required, being one of the Vendors
and the other being a representative of the Purchaser;
and
9.2.3 for any transaction less than (pound)1,000 one signatory
shall be required being one of the Vendors or a
representative of the Purchaser.
10. THE SIZEWELL CONTRACT
10.1 Should the Sizewell Contract not be completed and invoiced by
its proposed completion date of 28 February 1999 then the
following provisions at this clause 10 will apply in relation to
the Sizewell Payment.
10.2 The Sizewell Payment represents the revenue attributable to the
amounts invoiced under the Sizewell Contract after the 28
February 1999 less the following costs (the "Sizewell Costs"):
(a) direct costs, the direct costs including but not limited
to; labour; subsistence allowances; transport; storage at
Sizewell; costs of the clearance of the Sizewell Site;
consumable items; depreciation of equipment; and all other
costs normally and reasonably attributable to the
completion of a contract of the same type as the Sizewell
Contract;
(b) a portion of central overheads allocated in direct
proportion to the value of the Sizewell Contract revenues
expressed as a percentage of total revenues for the same
period; and
(c) a provision for corporation tax at 31 per cent of the net
of the revenue less the costs included in (a) and (b)
above.
10.3 PROVIDED THAT the Sizewell Contract is not completed and the
final invoice submitted and agreed by 28 February 1999, within
two weeks of the completion and invoice of the Sizewell Contract
the Purchaser's Accountants will prepare a draft schedule of the
Sizewell Payment (the draft "Sizewell Payment Schedule") using
the provisions of clause 10.1.1 and schedule 7 as appropriate
and submit it for approval to the Vendors.
10.4 Within 15 days of receipt by the Vendors of the draft Sizewell
Payment Schedule the Vendors will inform the Purchaser in
writing whether or not in their opinion the draft Sizewell
Payment Schedule complies with the requirements of this Clause
10 and, if not, shall specify in writing, so far as they are
then reasonably able so to do, the amount and nature of any item
which they do not accept. If the Vendors confirm in writing that
they accept the draft Sizewell Payment Schedule, or if they fail
to inform the Purchaser within 15 days of receipt whether or not
they accept that the draft Sizewell Payment Schedule complies
with the requirements of this Clause 10, such draft shall be the
Sizewell Payment Schedule.
10.5 If the Vendors inform the Purchaser, in accordance with Clause
10.3, that they do not accept that the draft Sizewell Payment
Schedule complies with the requirements of this Clause 10, the
Vendors and the Purchaser will hold discussions in good faith
with a view to agreeing Sizewell Payment Schedule. If such
agreement is reached, and is confirmed in writing by the
parties, it shall be final and binding on the parties but
without prejudice to the
Purchaser's right to claim under the Warranties, the Tax Deed or
otherwise in respect of any matter.
10.6 Any dispute about the draft Sizewell Payment Schedule which
remains unresolved 15 days after receipt by the Vendors of the
draft Sizewell Payment Schedule shall, at the request of either
party be referred for final settlement to an independent firm of
chartered accountants nominated jointly by the Vendors and the
Purchaser or, failing such nomination, within 14 days after
request by either the Vendors or the Purchaser, nominated at the
request of either party by the President for the time being of
the Institute of Chartered Accountants in England and Wales.
Such independent firm shall act as experts and not as
arbitrators and (in the absence of manifest error) its decisions
(both as to the manner in which its determination is to be made
and as to the subject matter of its determination) shall be
final and binding on the parties, but shall be without prejudice
to the Purchaser's right to claim under the Warranties, the Tax
Deed or otherwise in respect of any matter.
10.7 All costs incurred by the Vendors in reviewing and agreeing the
Sizewell Payment Schedule shall be borne by the Vendors and all
such costs incurred by the Purchaser shall be borne by the
Purchaser. The fees of such independent firm shall be payable by
the Vendors and the Purchaser in such proportions as such firm
determines (or failing such determination in equal shares).
10.8 Each party will co-operate fully with the other and, if
applicable, with the independent firm appointed under Clause
10.5 (including giving all reasonable access to records,
information, and to personnel) with a view to enabling the draft
Sizewell Payment Schedule to be prepared and subsequently
discussed and, if applicable, with a view to enabling any such
independent firm to make any determination required by Clause
10.6, and in particular the Purchaser shall procure that the
Company shall permit the Vendors and their advisers (and, if
applicable, such independent firm) to have access to, and (where
reasonable) to take copies of any records or information
belonging to the Company.
10.9 Subject to the provisions of this clause 10 that the Sizewell
Payment Schedule is agreed the Sizewell Payment is to be made to
the Vendors within 2 months of the Sizewell Contract being
completed and invoiced PROVIDED THAT the Vendors provide written
confirmation that all Sizewell Costs arising from the Sizewell
Contract have been taken into account in the Sizewell Payment
and should further Sizewell Costs arise following the Sizewell
Payment the Purchaser will be reimbursed by the Vendors on a
pound for pound basis.
11. PENSIONS PAYMENT
On the earlier of the date of delivery of the final invoice for the
Sizewell Contract or 21 February 1998 the Company shall procure the
payment of (pound)200,000 to the Vendor's Solicitors with a direction
that it be paid to the account in the name of Trustees for the time
being to the Didcot Heat Treatment Limited Private Pension Plan.
12. HOLIDAY PAY
The Vendors will and shall keep the Purchasers indemnified at all times
after Completion against any claims made by any employee of the Company
being an employee prior to or at the time of Completion for any and all
accrued holiday pay claimed for the period up to 31 March 2000.
13. GENERAL
13.1 This Agreement shall be binding upon and enure for the benefit of
the successors in title of the parties and the benefit of this
Agreement and of the Tax Deed may be assigned by the Purchaser.
13.2 The Vendors shall execute and perform all such further acts,
deeds or assurances as may be reasonably required for effectually
vesting the Shares in the Purchaser and otherwise for fulfilling
the provisions of this Agreement. Each of the Vendors shall
following Completion provide such information as to the Company,
its business and its affairs as the Purchaser shall reasonably
and by prior notice specify, including if required attendance at
the premises of the Company.
13.3 Any sums due to the Vendors pursuant to this Agreement may be
paid to the Vendors' Solicitors whose receipt shall constitute a
full discharge of the Purchaser's obligations to make such
payment and the Purchaser shall not be concerned with the
application of any such amount between the Vendors.
13.4 The provisions of this Agreement insofar as the same shall not
have been performed at Completion shall remain in full force and
effect notwithstanding Completion.
13.5 No delay or omission by the Purchaser in exercising any right,
power or remedy shall operate as a waiver thereof, and any single
or partial exercise thereof shall not preclude any other or
further exercise thereof or the exercise of any right, power or
other remedy. The rights and remedies of the Purchaser hereunder
are cumulative and not exclusive of any right or remedy provided
by law.
13.6 Save as otherwise required by law or The Stock Exchange no
announcement shall be made by the Vendors in connection with this
Agreement unless previously approved in writing by the Purchaser.
13.7 No provision of this Agreement, or of any agreement or
arrangement of which this Agreement forms part, by virtue of
which this Agreement or the agreement or arrangement of which it
forms part is subject to registration under the Restrictive Trade
Practices Act 1976 shall take effect until the day after
particulars of this Agreement, or the agreement or arrangement of
which it forms part, (as the case may be) have been furnished to
the Director General of Fair Trading pursuant to Section 24 of
the said Act.
13.8 All expenses incurred by or on behalf of the parties, including
all fees of agents, representatives, solicitors, accountants and
actuaries employed by any of them in connection with the
negotiation, preparation or execution of this
Agreement shall be borne solely by the party who incurred the
liability and there shall be no liability in respect of them
upon the Company.
13.9 This Agreement shall be governed by and construed in accordance
with English Law and the parties submit to the jurisdiction of
the English Courts.
14. NOTICES
14.1 Any notice to be given hereunder shall be in writing and
delivered by hand or by first class recorded delivery post or by
telex or facsimile letter addressed and sent to the party to be
served (in the case of the Vendors) at the address given herein
and (in the case of the Purchaser) at its registered office for
the time being.
14.2 Notice delivered by hand shall be deemed to have been served at
the time of actual delivery.
14.3 Notice sent by post shall be deemed to have been served at the
expiry of 48 hours after posting.
14.4 Notices sent by telex or by facsimile shall be deemed to have
been served in the case of:
14.4.1 telex, on receipt by the sender of the answerback code
of the addressee after transmission of the telex; and
14.4.2 facsimile, on production of a transmission report from
the machine which sent the facsimile indicating that the
facsimile was sent in its entirety to the facsimile
number of the recipient.
AS WITNESS the hands of the parties hereto or their duly authorised
representatives on the date shown on the first page
SIGNED by XXXXXX
XXXXXXX XXXXXXXX in
the presence of:
SIGNED by XXXXX XXXX
XXXXXXXX in the presence
of:
Witness:
Name:
Address:
Occupation:
SIGNED by XXXXXX
XXXXXXX for and on behalf
of PIPELINE INDUCTION
HEAT LIMITED in the
presence of:
Witness:
Name:
Address:
Occupation:
