1
Exhibit 2.3
CONFORMED COPY
DATED 25TH JANUARY 2001
--------------------------------------------------------------------------------
1. THE SHAREHOLDERS SET FORTH ON SCHEDULE 1
2. THE OPTIONHOLDERS SET FORTH ON SCHEDULE 1
3. NATCO GROUP INC.
--------------------------------------------------------------------------------
SALE AND PURCHASE AGREEMENT
in relation to the entire issued share capital of
AXSIA GROUP LIMITED
--------------------------------------------------------------------------------
Xxxxxx & Xxxxxx L.L.P.
Regis House
00 Xxxx Xxxxxxx Xxxxxx
Xxxxxx XX0X 0XX
2
TABLE OF CONTENTS
1. INTERPRETATION............................................................1
1.1 Definitions.......................................................1
1.2 Construction of Certain References................................7
1.3 Headings..........................................................8
1.4 Schedules.........................................................8
2. SALE OF SHARES............................................................8
2.1 Sale and Purchase.................................................8
2.2 No Sale of Part Only..............................................8
2.3 Waiver of Pre-emption Rights......................................9
3. CONSIDERATION.............................................................9
4. CONDITIONS................................................................9
4.1 Conditions........................................................9
4.2 Waiver...........................................................10
5. COMPLETION...............................................................10
5.1 Date and Place of Completion.....................................10
5.2 Vendors' Obligations.............................................10
5.3 Purchaser's Obligations..........................................12
5.4 Failure to Complete..............................................13
6. PURCHASER'S RIGHT OF ACCESS..............................................13
6.1 Right of Access..................................................13
6.2 Excluded Items...................................................14
6.3 No Solicitation of Personnel.....................................15
7. RESTRICTION OF VENDORS...................................................15
7.1 Restricted Business..............................................15
7.2 Covenants........................................................15
7.3 Vendors to Procure Compliance....................................16
7.4 Separate Covenants...............................................16
7.5 Reasonableness...................................................16
7.6 Void or Unenforceable Restrictions...............................16
7.7 Confidential Information Concerning the Company..................16
8. WARRANTIES...............................................................17
8.1 General..........................................................17
8.2 Purchaser's knowledge............................................17
8.3 Warranties to be independent.....................................17
8.4 Survival and Breach..............................................17
8.5 Damages..........................................................18
8.6 Vendor Protection................................................18
8.7 Pending Completion...............................................20
8.8 Liaison on Conduct of Business...................................20
8.9 Further Disclosure by Vendors....................................21
8.10 Rescission.......................................................21
8.11 Waiver of Claims.................................................21
9. ANNOUNCEMENTS............................................................21
9.1 Restriction......................................................21
9.2 Permitted Announcements..........................................21
3
9.3 Confidential Information.........................................22
9.4 Continuance of Restrictions......................................22
10. PROVISIONS RELATING TO THIS AGREEMENT....................................22
10.1 Assignment.......................................................22
10.2 Exclusivity......................................................22
10.3 Whole Agreement..................................................23
10.4 Agreement Survives Completion....................................23
10.5 Rights, Powers, Privileges and Remedies..........................23
10.6 Release of Vendors...............................................24
10.7 Further Assurance................................................24
10.8 Invalidity.......................................................24
10.9 Payment to the Vendors...........................................24
10.10 Counterparts.....................................................24
10.11 Costs............................................................24
10.12 Notices..........................................................25
11. LAW AND JURISDICTION.....................................................27
11.1 English Law......................................................27
11.2 Jurisdiction.....................................................27
4
THIS AGREEMENT is dated the 25th day of January 2001 and made BETWEEN:
1. Each of the Shareholders set forth in Part I of Schedule 1
(The Vendors and the Company) (a "Shareholder" and,
collectively, the "Shareholders");
2. Each of the Optionholders set forth in Part III of Schedule 1
(The Vendors and the Company) (an "Optionholder" and,
collectively, the "Optionholders"); and
3. NATCO Group Inc., a Delaware corporation (the "Purchaser").
WHEREAS:
The Vendors wish to sell and the Purchaser wishes to acquire the entire issued
share capital of Axsia Group Limited on and subject to the terms of this
Agreement.
NOW IT IS HEREBY AGREED as follows:
1. INTERPRETATION
1.1 Definitions
In this Agreement where the context admits:
"Affiliate" means a Person controlling, controlled by or under common
control with another Person. For this purpose, control shall mean the
ability to direct the management and affairs of a Person, whether
through ownership of securities, by contract or otherwise;
"Audited Accounts" means (i) the audited consolidated balance sheet of
the Company and the Subsidiaries made up as at the Balance Sheet Date;
(ii) the audited consolidated profit and loss account, the audited
consolidated statement of total recognised gains and losses and the
audited consolidated statement of cash flows of the Company and the
Subsidiaries in respect of the financial year ending on the Balance
Sheet Date ; (iii) the audited balance sheets of the Company and each
of the Subsidiaries made up as at the Balance Sheet Date; and (iv) the
audited profit and loss accounts, the audited statements of total
recognised gains and losses and the audited statements of cash flows of
the Company and each of the Subsidiaries in respect of the financial
year ending on the Balance Sheet Date, including, in each case, the
notes thereto and the directors' reports and auditors' reports, true
copies of all of which will be annexed to the Disclosure Letter;
"Authorisation" means any franchise, permit, license, authorisation,
order, certificate, registration or other consent or approval granted
by any Court, Governmental Authority or other party contracting with
the Company or any Subsidiary;
"Axsia Scheme" means the TGE pension scheme currently governed by a
deed dated 24 July 1996;
"Balance Sheet Date" means December 31, 1999;
1
5
"Beneficial Owner" means, when used in the context of the ownership of
a security, any Person who, directly or indirectly, through any
contract, arrangement, understanding, relationship or otherwise, has or
shares with respect to such security (i) voting power (which includes
the power to vote, or to direct the voting of, such security) and/or
(ii) investment power (which includes the power to dispose of, or to
direct the disposition of, such security);
"Business Day" means a day (other than a Saturday or Sunday) on which
banks are open for ordinary banking business in London;
"Company" means Axsia Group Limited, a company registered in England
under number 3508104 and incorporated on 11 February, 1998 as a private
company limited by shares under the Companies Xxx 0000;
"Companies Acts" means statutes from time to time in force concerning
companies including the Companies Xxx 0000, the Companies Xxx 0000,
Part V of the Criminal Justice Xxx 0000 and the Companies Consolidation
(Consequential Provisions) Xxx 0000;
"Completion" means completion of the sale and purchase of the Sale
Shares in accordance with Clause 5 (Completion);
"Completion Date" means the date for Completion which is agreed between
the parties following satisfaction or waiver of the Conditions and not
(save as set out in Sub-Clause 5.4A) later than the Final Completion
Date;
"Computer Systems" means the Hardware, Software and Data;
"Conditions" means the conditions set out in Sub-Clause 4.1
(Conditions);
"Continuing Directors" means the persons to be designated by the
Purchaser as continuing directors of the Company and the Subsidiaries
following Completion (which shall not include any directors appointed
by any of the Institutional Vendors);
"Court" means any court or arbitration tribunal established and
functioning under the Laws of any nation or state, including the United
Kingdom, the United States of America, or any political subdivision
thereof;
"Data" means any data or information used by or for the benefit of the
Company or any of the Subsidiaries at any time and stored
electronically at any time;
"Directors" means the persons serving as directors of the Company and
the Subsidiaries on the date of this Agreement;
"Disclosure Letter" has the meaning given in Sub-Clause 8.1 (General);
"Encumbrance" includes any interest or equity of any Person (including
any right to acquire, option or right of pre-emption) or any mortgage,
charge, pledge, lien, assignment, hypothecation, security interest
(including any created by law), title retention
2
6
or other security agreement or arrangement or a rental, hire purchase,
credit sale or other agreement for payment on deferred terms;
"Final Completion Date" means the date which is the later of March 15,
2001 and 15 Business Days following delivery of the Disclosure Letter
contemplated by Sub-Clause 8.1 hereof;
"Governmental Authority" means any national, federal, regional, state,
local or other governmental agency, authority, administrative agency,
regulatory body, commission or instrumentality (other than a Court),
including any multinational authority having governmental or
quasi-governmental powers;
"Hardware" means any computer equipment used by or for the benefit of
the Company or any of the Subsidiaries at any time including, without
limitation, PCs, mainframes, screens, terminals, keyboards, disks,
printers, cabling, and all associated and peripheral electronic
equipment but excluding all Software;
"ICG Option" means the option in favour of the holders of the
Preference Shares at the date of this Agreement pursuant to the amended
and restated call option deed dated 1 May 1998 under which such
preference shareholders have an option to acquire certain ordinary
shares in the Company from SUK BOF III Nominees Limited;
"Institutional Vendors" means the holders of the Preference Shares at
the date of this Agreement, Meggitt Properties Plc and SUK BOF III
Nominees Limited;
"Intellectual Property" means patents, trade marks, service marks,
rights (registered or unregistered) in any designs and applications for
any of the foregoing; trade or business names; copyright (including
rights in computer software) and topography rights; know-how; secret
formulae and processes; lists of suppliers and customers and other
confidential and proprietary knowledge and information; rights
protecting goodwill and reputation; database rights and rights under
licences and consents in relation to such things and all rights or
forms of protection of a similar nature to any of the foregoing or
having equivalent effect anywhere in the world;
"Intellectual Property Agreements" means agreements or arrangements
relating in any way, whether wholly or partly, to Intellectual
Property;
"Knowledge" means that which is actually known or understood. The
Knowledge of the Vendors at any given time shall mean the Knowledge of
any of the Vendors at that time;
"Laws" means all laws, statutes and ordinances of any nation or state,
including the United Kingdom, the United States of America, and any
political subdivision thereof, and including all decisions of Courts
having the effect of law in any such jurisdiction;
"Leased Properties" means the Properties indicated in Schedule 4
(Particulars of Property) as held by the Company or a Subsidiary under
lease, sub-lease, tenancy or other agreement;
3
7
"Listed Intellectual Property" means the Intellectual Property which
will be referred to in the list annexed to the Disclosure Letter;
"Listed Intellectual Property Agreements" means the Intellectual
Property Agreements which will be set out in the list annexed to the
Disclosure Letter;
"Management Accounts" means (i) the consolidated balance sheet of the
Company and the Subsidiaries made up as at December 31, 2000; (ii) the
consolidated profit and loss account and the consolidated statement of
cash flows of the Company and the Subsidiaries for the period from the
Balance Sheet Date to December 31, 2000; (iii) the balance sheets of
the Company and each of the Subsidiaries made up as at December 31,
2000; and (iv) the profit and loss accounts and the statements of cash
flows of the Company and each of the Subsidiaries for the period from
the Balance Sheet Date to December 31, 2000, true copies of all of
which will be annexed to the Disclosure Letter;
"Material" (and its correlative term "Materially") means, when used in
the context of any representation, warranty, covenant or condition with
respect to a Person, material to the business, assets, results of
operations, condition (financial and otherwise) or prospects of the
specified Person and its subsidiaries, if any, taken as a whole, or,
when used with reference to the business of the Company and the
Subsidiaries, the term shall apply to all the business of the Company
and the Subsidiaries taken as a whole; provided, however, that, if the
subject matter modified by the term "Material" can be expressed in
monetary terms, the term "Material" shall mean not less than
(pound) 500,000;
"Material Adverse Effect" means, when used in any representation,
warranty, covenant or condition of a Person, any condition,
circumstance, event, change or effect that would be material and
adverse to the business, assets, results of operations, condition
(financial and otherwise) or prospects of specified Person and its
subsidiaries, if any, taken as a whole, or, when used with reference to
the business of the Company and the Subsidiaries, the term shall apply
to all the business of the Company and the Subsidiaries taken as a
whole; provided, however, that, if the subject matter to which the term
"Material" is to be applied can be expressed in monetary terms, the
term "Material" shall mean not less than (pound) 500,000;
"Material Subsidiaries" means the Subsidiaries details of which are set
out in Parts I, II, III, IV, V and VIII of Schedule 2;
"Non-Institutional Vendors" means those Vendors who are not
Institutional Vendors;
"Options" shall mean the outstanding options to acquire a total of
148,144 "A" Ordinary Shares in the capital of the Company;
"Optionholders" means the persons listed in Part III of Schedule 1 (The
Vendors and the Company) as the holders of the Options;
"Order" means any judgment, order or decree of any Court or
Governmental Authority of competent jurisdiction;
4
8
"Owned Properties" means the Properties indicated in Schedule 4
(Particulars of Properties) as owned by the Company or a Subsidiary;
"Person" means an individual, partnership, limited liability company,
corporation, joint stock company, trust, estate, joint venture,
association or unincorporated organization, or any other form of
business or professional entity and shall be construed so as to include
that Person's assigns, transferees or successors in title, but shall
not include a Court or Governmental Authority;
"Preference Shares" means the 7,170,000 preference shares
of (pound) 0.999 each in the Company;
"Preference Shareholders" means the holders of the Preference Shares
of (pound) 0.999 each in the Company on the Completion Date;
"Preference Share Transfer" means the aggregate transfer of 3,693,694
Preference Shares from the holders thereof at the date hereof as
contemplated pursuant to Clause 10.14;
"Principal Warrantors" means the Vendors other than the Preference
Shareholders (in their capacity as such);
"Properties" means the properties particulars of which are set out in
Schedule 4 (Particulars of Properties);
"Records" has the meaning given in Sub-Clause 2.7(A) of Schedule 3
(Warranties and Representations);
"Regulation" means any regulation, policy, protocol, proclamation,
executive order or ordinance issued or otherwise applicable under
applicable Laws or issued or promulgated by any Governmental Authority
having the effect of Law or any rule or regulation of any
self-regulatory organization, such as a national securities exchange in
the United Kingdom or the United States of America;
"Relevant Claim" has the meaning given in Paragraph (C) of Sub-Clause
8.6 (Vendor Protection);
"Restricted Business" has the meaning given in Sub-Clause 7.1
(Restricted Business);
"Sale Shares" means the shares to be bought and sold pursuant to Clause
2.1 (Sale of Shares) being all the issued ordinary shares in the
capital of the Company (including any shares issued prior to Completion
upon exercise of the Options);
"Shareholders" means the persons named in Part I of Schedule 1 as the
holders of the Preference Shares and the "A" Ordinary, "B" Ordinary and
"C" Ordinary Shares in the capital of the Company;
5
9
"Software" means any set of instructions for execution by
microprocessor used by or for the benefit of the Company or any of the
Subsidiaries at any time, irrespective of application, language or
medium;
"Subsidiaries" means each body corporate set forth in Schedule 2 (The
Subsidiaries) being those bodies corporate in which the Company,
directly or indirectly, owns outstanding capital stock or other voting
securities having the power, under ordinary circumstances, to elect a
majority of the directors or similar members of the governing body of
such body corporate or otherwise to direct the management and policies
of such body corporate;
"Taxation" and "Tax" includes (without limitation) corporation tax,
advance corporation tax, the charge under Section 419 of the Taxes Xxx
0000, income tax, capital gains tax, the charge under Section 601(2) of
the Taxes Xxx 0000, value added tax, excise duties, the charge to tax
under Schedule 9A of the Value Added Tax Xxx 0000, customs and other
import duties, inheritance tax, stamp duty, stamp duty reserve tax,
capital duties, national insurance contributions, local authority
council taxes, petroleum revenue tax, foreign taxation and duties,
amounts payable in consideration for the surrender of group relief or
advance corporation tax or refunds pursuant to Section 102 of the
Finance Xxx 0000 and any payment whatsoever which the Company may be or
become bound to make to any Person or Governmental Authority as a
result of the operation of any enactment relating to any such taxes or
duties and all penalties, charges and interest relating to any of the
foregoing or resulting from a failure to comply with the provisions of
any enactment relating to taxation;
"Taxes Act 1988" means the Income and Corporation Xxxxx Xxx 0000;
"TCGA 1992" means the Taxation of Chargeable Gains Xxx 0000;
"Value Added Tax" and "VAT" mean value added tax as provided for in the
Value Added Tax Xxx 0000 and legislation supplemental thereto or
replacing, modifying or consolidating it; references to income or
profits or gains earned, accrued or received shall include income or
profits or gains treated as earned, accrued or received for the
purposes of any legislation; and references to the "Company" include
each of the Subsidiaries;
"Vendors" means the Shareholders and the Optionholders;
"Vendors' Solicitors" means Lovells;
"Warranties" means the warranties and representations set out in Clause
2 of Schedule 3 (Warranties and Representations);
any question whether a Person is connected with another shall be
determined in accordance with the Taxes Xxx 0000, Section 839 (subject
to the deletion of the words from "Except" to "arrangements" in
sub-section (4) thereof) which shall apply in relation to this Schedule
as it applies in relation to that Act; and
6
10
references to any Act, statutory instrument, regulation, by-law or
other requirement of English law and to any English legal term for any
action, remedy, method of judicial proceeding, legal document, legal
status, court, official or any legal concept or thing shall in respect
of any jurisdiction other than England be deemed to include that which
most nearly approximates in that jurisdiction to the English legal
term.
Where, in this Agreement, a term is defined in and for the purposes of
a particular Clause, Sub-Clause, Paragraph or Sub-Paragraph the
relevant definition shall apply, where the context admits, for all
other purposes of this Agreement.
Where this Agreement refers to procurement by the Vendors, such
procurement shall mean:
(a) with respect to each Vendor that it shall procure that any
voting powers exercisable by it at a general meeting of the
Company shall be exercised in a manner consistent with the
procurement of the matter concerned;
(b) with respect to any directors of the Company who have been
appointed by an Institutional Vendor, that the relevant
Institutional Vendor shall direct such appointed director to
act (subject to his fiduciary duties) in a manner consistent
with the procurement of the matter concerned; and
(c) where any Vendor is also a director or controlled by a person
who is a director of the Company, that such Vendor (or the
person in control of such Vendor) shall procure that the
relevant director acts (subject to his fiduciary duties) in a
manner consistent with the procurement of the matter
concerned.
1.2 Construction of Certain References
In this Agreement, where the context admits:
A. words and phrases the definitions of which are contained or
referred to in Part XXVI of the Companies Xxx 0000 shall be
construed as having the meanings thereby attributed to them;
B. references to statutory provisions shall be construed as
references to those provisions as amended or re-enacted or as
their application is modified by other provisions from time to
time and shall include references to any provisions of which
they are re-enactments (whether with or without modification);
C. references to Clauses and Schedules are references to Clauses
and Schedules of and to this Agreement, references to
Sub-Clauses or Paragraphs are, unless otherwise stated,
references to Sub-Clauses or Paragraphs of the Clause or
Sub-Clause of this Agreement in which the reference appears,
and references to this Agreement include the Schedules;
7
11
D. references to any document being in "agreed terms" or in
"agreed form" are to that document in the form signed or
initialled by or on behalf of the parties for identification;
and
E. words importing the singular shall include the plural and vice
versa;
F. the words "includes," "including," "particularly" and "in
particular" shall be construed as being by way of illustration
or emphasis only and shall not be construed as, nor shall they
take effect as, limiting the generality of any preceding
words; and
G. the words "other" and "otherwise" shall not be construed
ejusdem generis with any foregoing words where a wider
construction is possible.
1.3 Headings
The headings and sub-headings are inserted for convenience only and
shall not affect the construction of this Agreement.
1.4 Schedules
Each of the Schedules shall have effect as if set out herein.
2. SALE OF SHARES
2.1 Sale and Purchase
A. Subject to the terms of this Agreement, each Vendor with full
title guarantee for its Sale Shares shall sell and the
Purchaser shall purchase, free from all Encumbrances and
together with all rights now or hereafter attaching thereto
the number of Sale Shares set out in Schedule 1 in respect of
such Vendor (as may be amended pursuant to Clause 10.14) (plus
a further 148,144 "A" Ordinary Shares if the same are issued
pursuant to exercise of the Options), comprising in aggregate
the entire issued ordinary share capital of the Company.
B. On Completion, the Purchaser shall procure that the Company
shall redeem in full the Preference Shares by paying the
Preference Shareholders the sum of(pound)7,162,830.
2.2 No Sale of Part Only
The Purchaser shall not be obliged to complete the purchase of any of
the Sale Shares unless the purchase of all the Sale Shares and the
redemption of the Preference Shares are completed simultaneously.
8
12
2.3 Waiver of Pre-emption Rights
Each of the Vendors hereby waives any pre-emption rights he may have
relating to the Sale Shares, whether conferred by the Company's
Articles of Association or otherwise.
3. CONSIDERATION
The total consideration for the "A" Ordinary Shares, the "B" Ordinary
Shares and the "C" Ordinary Shares in issue on Completion shall be the
sum of (pound)25.668 per share (it being agreed that the total of the
amounts payable under this Clause 3 plus any amounts paid or payable by
the Company to the Optionholders in respect of cancellation of Options
and amounts paid or payable by the Company in respect of redemption of
the Preference Shares shall be (pound)31,500,000).
4. CONDITIONS
4.1 Conditions
Completion is conditional upon:
A. The Purchaser being satisfied in its sole discretion with the
results of its legal, financial and business due diligence
investigations contemplated by Clause 6 (Purchaser's Right of
Access);
B. The Purchaser having obtained, on terms and conditions
satisfactory to the Purchaser in its reasonable commercial
discretion, all of the financing required to consummate the
transactions contemplated by this Agreement;
C. no Material Adverse Effect having occurred with respect to the
Company since the date of this Agreement;
D. All of the Material consents and approvals requested by the
Purchaser and required from Governmental Authorities or from
any other party contracting with the Company or any other
Subsidiary in order to implement fully the terms of this
Agreement having been duly obtained;
E. The Purchaser having procured all Material consents and
approvals requested by the Vendor and required of it from
Governmental Authorities or third parties in order to
implement fully the terms of this Agreement;
F. The Non-Institutional Vendors, the Company and the
Subsidiaries having complied with the restrictions on the
activities of the Non-Institutional Vendors, the Company and
the Subsidiaries contained in Sub-Clauses 8.7 (Pending
Completion) and 8.8 (Liaison on Conduct of Business) and in
Paragraph 2.8(A) (Business Since the Balance Sheet Date) of
Schedule 3 (Warranties and Representations) from the date
hereof down to Completion;
9
13
G. No complaint, demand, action, suit, or proceeding being
pending or threatened before any Court or Governmental
Authority wherein an unfavorable Order would
1. prevent consummation of any of the transactions
contemplated by this Agreement;
2. cause any of the transactions contemplated by this
Agreement to be rescinded following consummation;
3. affect adversely the right of the Purchaser to own,
operate, or control the Sale Shares or the Company;
or
and no such Order being in effect.
H. Each of the Vendors shall have tendered all of its Sale Shares
for purchase by the Purchaser at Completion in accordance with
the terms and provisions of this Agreement.
4.2 Waiver
The Purchaser may waive in whole or in part all or any of the
Conditions other than Condition 4.1.E or extend the period in which
such Conditions are to be satisfied. The Vendors may waive in whole or
in part Condition 4.1.E or extend the period in which such Condition is
to be satisfied. The waiver of any of the Conditions and the completion
of the transactions contemplated by this Agreement shall not be
considered a waiver of any other rights of the Purchaser or (in the
case of Condition 4.1.E) the Vendors under this Agreement or at law.
5. COMPLETION
5.1 Date and Place of Completion
Completion shall take place on the Completion Date at the offices of
Xxxxxx & Xxxxxx L.L.P. at Regis House, 00 Xxxx Xxxxxxx Xxxxxx, Xxxxxx
XX0X 0XX at 10.00 a.m.
5.2 Vendors' Obligations
On Completion each of the Vendors in relation to Sub-Clauses 5.2 A.1,2
and 3, B, C and E and each of the Non-Institutional Vendors in relation
to Sub-Clauses 5.2 A.4,5 and 6,D, F and G shall:
A. deliver to the Purchaser:
1. duly executed transfers of the Sale Shares by the
registered holders thereof in favour of the Purchaser or
as it shall direct together with the relative share
certificates;
10
14
2. such waivers or consents as the Purchaser may require to
enable the Purchaser or its nominees to be registered as
holders of the Sale Shares; and
3. powers of attorney in an agreed form;
4. a certificate (without qualification as to materiality
or otherwise) of a director and the secretary of the
Company to the effect that each of the conditions
specified in Paragraphs (A)(2), (C), (D), (F) and (G) of
Sub-Clause 4.1 (Conditions) has been satisfied in all
respects, together with copies of all Material consents
and approvals procured pursuant to Paragraph (D) of
Sub-Clause 4.1 (Conditions); 5. a certificate of the
secretary of the Company to the effect that all
appropriate corporate and shareholder authorizations of
the Company and the Subsidiaries necessary to authorize
the transactions contemplated by this Agreement have
been obtained, together with certified copies of such
authorizations; and
6. such other certificates or documents as the Purchaser
may reasonably require (including evidence satisfactory
to the Purchaser that any liability of the Company or
any Subsidiary in respect of management fees payable to
TGE Group Limited will terminate upon Completion).
B. procure to the extent each Vendor is able that the Directors
(other than the Continuing Directors) and, if requested by the
Purchaser, the secretary or secretaries of the Company and the
Subsidiaries retire from all their offices and employments
with the Company and the Subsidiaries, each delivering to the
Purchaser a deed (in the agreed terms) made out in favour of
the Company and/or the Subsidiaries acknowledging that he has
no claim outstanding for compensation or otherwise and without
any payment under the Employment Rights Xxx 0000;
C. procure to the extent each Vendor is able the resignation of
the auditors of the Company and the Subsidiaries in accordance
with Section 393 of the Companies Xxx 0000, accompanied by a
written statement pursuant to Section 394 of that Act that
there are no circumstances connected with their resignation
which should be brought to the notice of the members or
creditors of each such company and that no fees are due to
them and deliver such resignation and statement to the
Purchaser;
D. deliver to the Purchaser as agent for the Company and the
Subsidiaries:
1. all the statutory and other books (duly written up to
the date immediately prior to the Completion Date) of
the Company and each of the Material Subsidiaries and
its/their certificate(s) of incorporation, any
certificates of incorporation on change of name and
common seal(s);
11
15
2. certificates in respect of all issued shares in the
capital or an indemnity in respect thereof of each of
the Material Subsidiaries and transfers of all shares,
if any, in any Subsidiary not held by the Company in
favour of such Persons as the Purchaser shall direct;
and
3. the title deeds to the Properties.
E. procure to the extent each Vendor is able a board meeting of
the Company and of each of the Subsidiaries to be held at
which there shall be:
1. passed a resolution, in the case of the Company,
declaring such dividends on the Preference Shares as
shall have accrued in respect of the period since 31
January 2001 up to Completion Date and directing that
such dividends be paid immediately prior to Completion
and resolving to redeem the Preference Shares;
2. passed a resolution to register, in the case of the
Company, the transfers of the Sale Shares and, in the
case of the Subsidiaries, the share transfers referred
to in Paragraph (D)(2) and (subject only to due
stamping) to register, in the register of members, each
transferee as the holder of the shares concerned;
3. appointed as directors and/or secretary such persons as
the Purchaser may nominate, such appointments to take
effect upon Completion;
4. tendered and accepted the resignations and
acknowledgements of the directors and secretary referred
to in Paragraph (B), each such acceptance to take effect
upon Completion; and
5. revoked all existing authorities to banks.
F. deliver to the Purchaser, certified as correct by the
secretary of the relevant company, the minutes of each such
board meeting referenced in Paragraph (E) above; and
G. procure the discharge of all guarantees and like obligations
given by the Company or any of the Subsidiaries in respect of
the obligations of any other Person (and including any
guarantees and obligations stipulated to be discharged at
Completion in the Disclosure Letter), such discharge to be
given in the agreed terms.
5.3 Purchaser's Obligations
A. The Purchaser shall not be obliged to complete the purchase of
the Sale Shares if any of the actions or matters listed in
Sub-Clauses 5.2 A.4,5 and 6,D,F and G have not taken place as
therein provided.
B. On Completion the Purchaser shall:
12
16
1. pay the full consideration for the Sale Shares as
provided by Clause 3 (Consideration), by way of
telegraphic transfer into the account of the Vendors'
Solicitors, at Barclays Bank Plc sort code 20-00-00
account number 00000000;
2. deliver to the Vendors a certificate (without
qualification as to materiality or otherwise) of the
Chief Financial Officer of the Purchaser to the effect
that Condition 4.1(E) has been satisfied in all
respects; and
3. procure that the Company pays(pound)7,162,830 to the
Preference Shareholders in order to fully redeem their
shares.
5.4 Failure to Complete
If in any respect the obligations of the Vendors or the Purchaser are
not complied with on or before the Final Completion Date the party not
in default may:
A. defer Completion to a date not more than 30 days after the
Final Completion Date (and so that the provisions of this
Sub-Clause 5.4, apart from this item, shall apply to
Completion as so deferred); or
B. proceed to Completion so far as practicable (without prejudice
to its rights hereunder); or
C. rescind this Agreement.
5.5 No Waiver
Completion shall not be deemed a waiver of any rights of the Purchaser
granted by this Agreement or at law and expressed or intended to have
effect thereafter.
5.6 The Purchaser shall take all steps and make all payments as are
necessary to refinance and/or replace the facility which the Company
has with National Westminster Bank Plc and/or its Affiliates on or
immediately prior to Completion.
6. PURCHASER'S RIGHT OF ACCESS
6.1 Right of Access
Except as provided in Sub-Clause 6.2 (Excluded Items) below, from and
after the date of this Agreement until the earlier of the Completion
Date or the rescission of this Agreement:
A. the Non-Institutional Vendors shall procure that the Company
and each of the Subsidiaries provide to the Purchaser, its
lenders and Affiliates and each of their respective authorised
representatives, including accountants, consultants and
solicitors, reasonable access upon reasonable notice at all
reasonable times, to the
13
17
assets, business, facilities, properties, agreements, books,
records (including tax returns filed and in preparation) and
key employees of or relating to the Company and each of the
Subsidiaries in order that the Purchaser shall have full
opportunity to make such investigation as it shall reasonably
desire to make of the affairs of the Company and each of the
Subsidiaries, and the Non-Institutional Vendors shall procure
that the Company and each of the Subsidiaries shall cooperate
fully in connection therewith;
B. the Non-Institutional Vendors shall, as soon as practicable
upon request of the Purchaser, supply or procure the supply of
any information reasonably required by the Purchaser relating
to the Company and each of the Subsidiaries and their
respective affairs; and
C. the Non-Institutional Vendors shall use their best efforts to
procure that the independent certified public accountants of
the Company and each of the Subsidiaries (i) provide to the
Purchaser, its lenders and Affiliates and each of their
respective authorised representatives, including accountants,
consultants and solicitors, free and full access upon
reasonable notice at all reasonable times, subject to such
confidentiality undertakings as such accountants may
reasonably require, to the records and work papers of such
accountants relating to the Company and each of the
Subsidiaries and (ii) consent to the inclusion of the Audited
Accounts, or any portion thereof, in any filings required of
the Purchaser by Law or by any securities exchange or
Governmental Authority having jurisdiction over it (including
the Securities and Exchange Commission and the New York Stock
Exchange), to the extent such Audited Accounts are so required
to be included therein.
The Purchaser hereby agrees to use its reasonable efforts to minimize
any disruption to the business of the Company, the Subsidiaries and
their accountants in connection with the conduct of the investigations
contemplated by this Clause.
6.2 Excluded Items
Notwithstanding anything to the contrary in Sub-Clause 6.1 (Right of
Access) above, the Non-Institutional Vendors may withhold from the
Purchaser or restrict the Purchaser's right of access to certain
original documents and specific information (the "Excluded Items")
which constitute sensitive commercial information, the disclosure of
which the Non-Institutional Vendors reasonably believe would adversely
affect the competitive position of the Company and the Subsidiaries if
this Agreement were to be rescinded prior to Completion. If the
Non-Institutional Vendors restrict the Purchaser's right of access to
any Excluded Items, the Non-Institutional Vendors shall provide or
procure the provision of outline written summaries of such Excluded
Items and/or written answers to the Purchaser's questions regarding
such Excluded Items. The Non-Institutional Vendors may omit from such
summaries and answers commercially sensitive information, the
disclosure of which the Non-Institutional Vendors reasonably believe
would adversely affect the competitive position of the Company and the
Subsidiaries if this Agreement were to be rescinded prior to
Completion. Such summaries and answers shall in all other
14
18
respects provide, as applicable, accurate summaries of such Excluded
Items and accurate answers to such questions.
6.3 No Solicitation of Personnel
If this Agreement is not completed, the Purchaser hereby agrees, for a
period of one year subsequent to the date of this Agreement, not to
solicit or entice away or endeavour to solicit or entice away from the
Company or any of the Subsidiaries any person who at the date of this
Agreement is a Director, a senior employee of the Company or any of the
Subsidiaries or an employee with whom the Purchaser has contact or of
whom the Purchaser gains knowledge during its investigation of the
Company and the Subsidiaries to take up employment with the Purchaser.
7. RESTRICTION OF VENDORS
7.1 Restricted Business
In this Clause, "Restricted Business" means the design, production and
installation of fluid processing technology applications that directly
or indirectly competes with the business of the Company or any of the
Subsidiaries carried on at the Completion Date.
7.2 Covenants
The Non-Institutional Vendors undertake with the Purchaser (as trustee
for itself and the Company) and its successors in title that they will
not and that they will procure that none of their Affiliates will,
either on their own account or in conjunction with or on behalf of any
other Person:
A. for the period of one year after the Completion Date (or, if
sooner, in respect of any Non-Institutional Vendor who is an
Optionholder, until the Company terminates the contract of
employment of such Optionholder for any reason other than
gross or serious or repeated misconduct) carry on or be
engaged, concerned or interested (directly or indirectly and
whether as principal, director, employee, agent, consultant,
partner or otherwise) in the active management of any
Restricted Business (provided, however, that this Paragraph A
shall not prohibit any of the Vendors or their Affiliates from
being the registered holder or Beneficial Owner of any class
of securities of any entity engaged in any Restricted
Business);
B. at any time after the Completion Date, directly or indirectly
use or attempt to use in the course of any business any trade
or service xxxx, trade name, design or logo (whether
registered or not and including the Listed Intellectual
Property referred to in Schedule 3) used in the business of
the Company or any of the Subsidiaries or any other name,
logo, trade or service xxxx or design which is or might be
confusingly similar thereto; and
C. for the period of three years after the Completion Date,
solicit or entice away or endeavor to solicit or entice away
from the Company or any of the Subsidiaries
15
19
any person who at the Completion Date is (or who within a
period of one year prior to the Completion Date has been) a
Director, officer, manager, employee or servant of the Company
or any of the Subsidiaries to take up employment with the
Vendors.
7.3 Vendors to Procure Compliance
The Non-Institutional Vendors undertake to take all such steps as shall
from time to time be necessary to ensure compliance with the terms of
Sub-Clause 7.2 above by employees and agents of the Vendors.
7.4 Separate Covenants
Each of the undertakings in Sub-Clauses 7.2 and 7.3 shall be construed
as a separate and independent undertaking and if one or more of the
undertakings is held to be void or unenforceable, the validity of the
remaining undertakings shall not be affected.
7.5 Reasonableness
The Vendors agree that the restrictions and undertakings contained in
Sub-Clauses 7.2 and 7.3 are reasonable and necessary for the protection
of the Purchaser's legitimate interests in the goodwill of the Company
and the Subsidiaries. If, however, any such restriction or undertaking
shall be found to be void or voidable but would be valid and
enforceable if some part or parts of the restriction or undertaking
were deleted, such restriction or undertaking shall apply with such
modification as may be necessary to make it valid and enforceable.
7.6 Void or Unenforceable Restrictions
Without prejudice to Sub-Clause 7.5, if any restriction or undertaking
is found by any court or other competent authority to be void or
unenforceable the parties shall negotiate in good faith to replace such
void or unenforceable restriction or undertaking with a valid provision
which, as far as possible, has the same legal and commercial effect as
that which it replaces.
7.7 Confidential Information Concerning the Company
No Vendor shall and each Vendor shall procure that no officer or
employee of any such Vendor shall make use of or divulge to any third
party (other than to the Vendors' professional advisers for the purpose
of this Agreement in which case each Vendor shall use its reasonable
endeavours to procure that such advisers keep such information
confidential on terms equivalent to this Clause) any confidential
information relating to the Company and the Subsidiaries save only:
A. insofar as the same has become public knowledge otherwise
than, directly or indirectly, through the Vendors' breach of
this Sub-Clause 7.7 or the failure of the officers, employees
or professional advisers referred to above to keep the same
confidential; or
16
20
B. to the extent required by Law or by any Court or Governmental
Authority.
8. WARRANTIES
8.1 General
The Vendors in the case of the statements made in relation to clause
2.1(A) (B) and (C) of Schedule 3 and the Principal Warrantors in the
case of all other statements in clause 2 of Schedule 3 hereby severally
represent and warrant as set out herein to and for the benefit of the
Purchaser that such statements will be correct and complete as of the
Completion Date (as though made then and as though the Completion Date
were substituted for the date of this Agreement throughout Clause 2 of
Schedule 3 (Warranties and Representations)), except (i) as fairly set
forth in the disclosure letter to be delivered by the Vendors to the
Purchaser not later than the 20th Business Day subsequent to the date
of this Agreement (the "Disclosure Letter") and (ii) as fairly
disclosed by the Vendors in the period from the date of delivery of the
Disclosure Letter to Completion. The Disclosure Letter and any
disclosures by the Vendors subsequent to the date of delivery of the
Disclosure Letter and on or prior to the Completion Date shall be
arranged in sections corresponding to the numbered and lettered
paragraphs contained in Clause 2 of Schedule 3 (Warranties and
Representations).
8.2 Purchaser's knowledge
The Purchaser shall not be entitled to make a Relevant Claim to the
extent that as at Completion it is aware of any fact or circumstance
which to its knowledge may give rise to such Relevant Claim.
8.3 Warranties to be independent
Each of the Warranties shall be separate and independent and, save as
expressly provided, shall not be limited by reference to any other
Warranty or anything in this Agreement.
8.4 Survival and Breach
A. The Purchaser shall be entitled to recover damages from each
of the Vendors if at any time from Completion up to the second
anniversary of Completion, any of the Warranties contained in
paragraphs (A) (B) and (C) of Sub-Clause 2.1 (The Company and
the Vendors) of Schedule 3 (Warranties and Representations),
each of which shall survive Completion and continue in full
force and effect for such period, is broken by it or proves to
be untrue or misleading, provided that each Vendor shall only
be liable to the Purchaser if and to the extent that it has
breached such Warranties and no Vendor shall be liable
pursuant to this Sub-Clause 8.4A for a breach of this
Sub-Clause 8.4 A by another Vendor.
B. The Purchaser shall be entitled to recover damages from each
of the Principal Warrantors in each case strictly by reference
to the proportion of such Relevant Claim which is set out
opposite the name of such Principal Warrantor in column 2 of
Schedule 5 if:
17
21
1. during the 30 day period following Completion, any of
the Warranties contained in Sub-Clause 2.13 (Excluded
Items) of Schedule 3 (Warranties and Representations),
each of which shall, for this purpose, survive
Completion and continue in full force and effect for
such period, is broken or proves to be untrue or
misleading; or
2. during the period of 20 weeks following Completion, any
of the Warranties contained in Clause 2 of Schedule 3
(Warranties and Representations) (other than those
contained in Paragraphs (A) (B) and (C) of Sub-Clause
2.1 (The Company and the Vendors), each of which shall,
for this purpose, survive Completion and continue in
full force and effect for such period, is broken or
proves to be untrue or misleading with respect to any
matter:
a of which any of the Principal Warrantors or
Optionholders had Knowledge prior to Completion;
and
b that is not fairly disclosed in or, to the
Knowledge of the Vendors, is misrepresented in the
Disclosure Letter (or in subsequent disclosures in
the period from the date of delivery of the
Disclosure Letter up to Completion).
8.5 Damages
If, subsequent to the Completion Date, the Purchaser becomes entitled
to recover damages from the Vendors or the Principal Warrantors
pursuant to Sub-Clause 8.4 (Survival and Breach), the Vendors hereby
covenant, subject to Sub-Clause 8.6 (Vendor Protection) to pay, on
demand, to the Purchaser the amount by which the value of the Sale
Shares has diminished as a result of such breach.
8.6 Vendor Protection
A. Guarantees
The Purchaser shall use its best endeavours to secure the
release of the Vendors from the guarantees and other
contingent liabilities listed in the Disclosure Letter for the
purpose of this Paragraph and shall in the meantime indemnify
the Vendors against any liability (including costs, damages
and expenses) thereunder or which may be incurred in relation
thereto.
B. Loan Accounts
At Completion the Purchaser shall procure that the Company and
the Subsidiaries shall repay to the Vendors the amounts owing
to them as specified in the Disclosure Letter.
18
22
C. Limitation of Liability
The following Paragraphs of this Sub-Clause 8.6 shall operate
to limit the liability of the Vendors under Sub-Clauses 8.4
(Survival and Breach) and 8.5 (Damages), subject to Paragraph
(D) below. In this Sub-Clause 8.6, the term "Relevant Claim"
means any claim under or in connection with the Warranties or
the Disclosure Letter.
1. Financial Limits
a. The aggregate liability of the Principal
Warrantors in respect of all Relevant Claims shall
be limited to (pound)3,100,000 and the individual
liability of the Principal Warrantors in respect
of all Relevant Claims shall be limited to the
amounts set opposite each of their names in column
3 of Schedule 5.
b. The Principal Warrantors shall not be liable in
respect of a particular Relevant Claim unless the
aggregate liability of the Principal Warrantors in
respect of all Relevant Claims exceeds
(pound)50,000 in which case the Principal
Warrantors shall be liable in the proportions set
opposite their names in column 2 of Schedule 5 for
the whole amount and not merely the excess over
(pound)50,000.
2. Time Limits and Notice
The Vendors or Principal Warrantors (as applicable)
shall have no liability in respect of any Relevant Claim
unless the Purchaser shall have given notice in writing
to the Vendors or Principal Warrantors (as applicable)
of such claim specifying (in reasonable detail) the
matter that gives rise to the claim, the nature of the
claim and the amount claimed in respect thereof within
the time periods provided in Sub-Clause 8.4 (Survival
and Breach).
3. Recovery From Third Parties
If the Vendors pay to or for the benefit of the
Purchaser an amount in respect of any Relevant Claim and
any of the Purchaser, the Company or any of the
Subsidiaries subsequently receives from any other Person
any payment in respect of the matter giving rise to the
Relevant Claim, the Purchaser shall thereupon reimburse
the Vendors an amount up to the payment received (but in
no event greater than the amount paid to or for the
benefit of the Purchaser by the Vendors), after having
taken into account any cost, liability (including tax
liability) or expense in respect thereof and except to
any extent that the liability of the Vendors in respect
of the Relevant Claim was reduced to take account of
such payment.
19
23
4. No Duplication of Recovery
The Purchaser shall not be entitled to recover damages
or otherwise obtain reimbursement or restitution more
than once in respect of the same loss.
D. Relevance of Limitations in Certain Circumstances
The provisions of Paragraphs (C)(1) and (2) shall not apply in
respect of:
1. any Relevant Claim with respect to any of the Warranties
contained in Paragraphs (A) (B) and (C) of Sub-Clause
2.1 (The Company and the Vendors) of Schedule 3
(Warranties and Representations); and
2. any other Relevant Claim if it is (or the delay in
discovery of which is) the consequence of fraud, willful
misconduct or willful concealment by the Vendor or
Vendors against whom such claim is made.
8.7 Pending Completion
The Non-Institutional Vendors shall procure that (save only as may be
necessary to give effect to this Agreement or as disclosed in the
Disclosure Letter) none of the Non-Institutional Vendors nor the
Company nor any of the Subsidiaries shall do, allow or procure any act
or omission before Completion that would constitute a breach of any of
the Warranties if they were given at any and all times from the date of
delivery of the Disclosure Letter to Completion or that would make any
of the Warranties inaccurate or misleading if they were so given. In
particular, the Non-Institutional Vendors shall procure that (save as
disclosed in the Disclosure Letter) Paragraph 2.8(A) (Business Since
the Balance Sheet Date) of Schedule 3 (Warranties and Representations)
shall be complied with at all times from the date hereof down to
Completion.
8.8 Liaison on Conduct of Business
The Non-Institutional Vendors shall in addition and without limiting
Sub-Clause 8.7 (Pending Completion) procure that, from the date of this
Agreement until Completion, the business of the Company and the
Subsidiaries is carried on in the usual and normal course and that none
of the Company or the Subsidiaries shall enter into any contract or
commitment or do anything that, in any such case, is either out of the
ordinary and usual course of its business or of a Material nature
without informing the Purchaser in writing in advance. In particular,
the Non-Institutional Vendors shall procure that from the date of this
Agreement until Completion, save after informing the Purchaser in
writing in advance, none of the Company or the Subsidiaries shall
declare, make or pay any dividend or distribution (whether of capital
or profits) subsequent to the date of this Agreement, except for (i)
dividends on the Preference Shares in respect of periods up to the
Completion Date and (ii) monthly management fees of (pound)21,000 to
TGE Group Limited in respect of periods up to the Completion Date
(including any pro rata management fees for any partial month).
20
24
8.9 Further Disclosure by Non-Institutional Vendors
The Non-Institutional Vendors without prejudice to Sub-Clause 8.8
(Liaison on Conduct of Business) shall forthwith disclose in writing to
the Purchaser by supplementing the Disclosure Letter (and references to
the Disclosure Letter shall mean the Disclosure Letter as supplemented
by any such disclosures made during the period from the date of
delivery of the Disclosure Letter to Completion) any matter or thing
that may arise or become known to the Non-Institutional Vendors after
the date of delivery of the Disclosure Letter and before Completion
that is inconsistent with any of the Warranties or that might make any
of them Materially inaccurate or misleading if they were given at any
and all times from the date hereof down to Completion or that is
Material to be known to a purchaser for value of the Sale Shares.
8.10 Rescission
In the event of any matter or thing that is mentioned in Sub-Clause 8.7
(Pending Completion) becoming known to the Purchaser before Completion
or in the event of it becoming apparent after the delivery of the
Disclosure Letter but on or before Completion that the Vendors are in
Material breach of any of the Warranties or any other term of this
Agreement, the Purchaser may, without prejudice to the rights of the
Purchaser under Sub-Clause 10.2 and Sub-Clause 10.11, rescind this
Agreement by notice in writing to the Vendors.
8.11 Waiver of Claims
The Vendors undertake to the Purchaser that they will not make or
pursue any claim that they have or may have against the Company, the
Subsidiaries or any of the Employees (as such term is defined in
Paragraph B(1) of Sub-Clause 2.12 (the Company and its Employees) of
Schedule 3 (Warranties and Representations)) in respect of or arising
out of the Warranties or any information supplied by them to or on
behalf of the Vendors or their professional advisers or agents on or
prior to the Completion Date.
9. ANNOUNCEMENTS
9.1 Restriction
Subject to Sub-Clause 9.2 (Permitted Announcements), neither the
Vendors nor the Purchaser shall make any announcement, whether to the
public, to the customers or suppliers of the Company, or to all or any
of the employees of the Company, concerning the subject matter of this
Agreement without the prior written approval of the other (which shall
not be unreasonably withheld or delayed).
9.2 Permitted Announcements
Sub-Clause 9.1 (Restriction) shall not apply if and to the extent that
such announcement is required by Law or by any securities exchange or
Governmental Authority having jurisdiction over it (including the
Securities and Exchange Commission, the New York Stock Exchange, the
London Stock Exchange, The Panel on Take-overs and Mergers and
21
25
the Serious Fraud Office) and whether or not the requirement has the
force of Law and provided that any such announcement shall be made only
after reasonable consultation with the other party.
9.3 Confidential Information
Any such announcement permitted by this Clause 9 may include any
information relating to the Company or the Subsidiaries as to which the
Purchaser has an obligation of confidentiality, but only to the extent
such information is required to be disclosed by Law or by any
securities exchange or Governmental Authority referred to in Sub-Clause
9.2 (Permitted Announcements).
9.4 Continuance of Restrictions
The restrictions contained in this Clause on the part of the Vendors
and Purchaser shall survive Completion.
10. PROVISIONS RELATING TO THIS AGREEMENT
10.1 Assignment
This Agreement shall be binding upon and inure for the benefit of the
successors of the parties but shall not be assignable, save that the
Purchaser may at any time assign all or any part of its rights and
benefits under this Agreement, including the Warranties and any cause
of action arising under or in respect of any of them, to any transferee
of the share capital of the Company or of any of the Subsidiaries, or
to any Affiliate of the Purchaser who may enforce them as if such
transferee or Affiliate had also been named in this Agreement as the
Purchaser.
10.2 Exclusivity
A. The Vendors will not, and the Vendors (in the case of the
Non-Institutional Vendors, to the extent they are able) will
procure that the Company and the Subsidiaries and their
respective Affiliates, directors, officers, employees and
representatives do not, prior to the earlier of Final
Completion Date and the termination or rescission of this
Agreement:
1. solicit, initiate, or encourage the submission of any
proposal or offer from any Person relating to any:
a. liquidation, dissolution, or recapitalization;
b. merger or consolidation;
c. acquisition or purchase of securities or assets
(save as contemplated by Clause 10.14); or
22
26
d. similar transaction or business combination
involving the Company or any of the Subsidiaries;
or
2. participate in any discussions or negotiations
regarding, furnish any information with respect to,
assist or participate in, or facilitate in any other
manner any effort or attempt by any Person to do or seek
any of the foregoing.
B. Each Vendor will notify the Purchaser immediately if he
becomes aware of any Person making any proposal, offer,
inquiry, or contact with respect to any of the foregoing. If
the Vendors, the Company or any of the Subsidiaries or any of
their respective Affiliates, directors, officers, employees or
representatives (including financial advisors) breaches his or
its obligations contained in this Sub-Clause 10.2, the
Purchaser shall be entitled to rescind this Agreement.
10.3 Whole Agreement
A. This Agreement, together with any documents referred to in it,
constitutes the whole agreement between the parties relating
to its subject matter and supersedes and extinguishes any
prior drafts, agreements, undertakings, representations,
warranties, assurances and arrangements of any nature, whether
in writing or oral, relating to such subject matter.
B. The Purchaser acknowledges that it has not been induced to
enter into this Agreement by any representation, warranty,
promise or assurance by the Vendors or any other Person save
for those contained in this Agreement and in the Disclosure
Letter. The Purchaser agrees that (except in respect of fraud)
it shall have no right or remedy in respect of any other
representation, warranty, promise or assurance save for those
contained in this Agreement.
C. No variation of this Agreement shall be effective unless made
in writing and signed by each of the parties.
10.4 Agreement Survives Completion
Survival of the Warranties and the recovery of damages by the Purchaser
shall be governed by Sub-Clause 8.4 (Survival and Breach). All other
provisions of this Agreement, in so far as the same shall not have been
performed at Completion, shall remain in full force and effect
notwithstanding Completion.
10.5 Rights, Powers, Privileges and Remedies
A. The rights, powers, privileges and remedies provided in this
Agreement are cumulative and are not exclusive of any rights,
powers, privileges or remedies provided by law or otherwise.
23
27
B. No failure to exercise, nor any delay in exercising, any
right, power, privilege or remedy under this Agreement shall
in any way impair or affect the exercise thereof or operate as
a waiver thereof in whole or in part.
C. No single or partial exercise of any right, power, privilege
or remedy under this Agreement shall prevent any further or
other exercise thereof or the exercise of any other right,
power, privilege or remedy.
10.6 Release of Vendors
The Purchaser may release or compromise the liability of any of the
Vendors hereunder without affecting the liability of the other Vendors.
10.7 Further Assurance
At any time after the date hereof each of the Vendors shall, at the
request of the Purchaser, execute or procure the execution of such
documents and do or procure the doing of such acts and things as the
Purchaser may reasonably require for the purpose of vesting the Sale
Shares in the Purchaser or its nominees and giving to the Purchaser the
full benefit of all the provisions of this Agreement.
10.8 Invalidity
If any provision of this Agreement shall be held to be illegal, void,
invalid or unenforceable under the laws of any jurisdiction, the
legality, validity and enforceability of the remainder of this
Agreement in that jurisdiction shall not be affected, and the legality,
validity and enforceability of the whole of this Agreement in any other
jurisdiction shall not be affected.
10.9 Payment to the Vendors
Any payment to be made to any specific Vendor under any provision of
this Agreement may be made to the Vendors' Solicitors, whose receipt
shall be an absolute discharge on behalf of such Vendor.
10.10 Counterparts
This Agreement may be executed in any number of counterparts, which
shall together constitute one Agreement. Any party may enter into this
Agreement by signing any such counterpart.
10.11 Costs
Each party shall bear its own costs arising out of or in connection
with the preparation, negotiation and implementation of this Agreement,
save that if this Agreement is rescinded by the Purchaser pursuant to
Sub-Clause 10.2 (Exclusivity), the Vendors (in the proportions set out
in Schedule 5) shall pay to the Purchaser its accountancy, legal and
other costs in relation to the preparation and negotiation of this
Agreement and the
24
28
investigation of the Company contemplated by Clause 6 (Purchaser's
Right of Access) prior to the date this Agreement is so rescinded by
the Purchaser.
10.12 Notices
A. Any notice or other communication required to be given under
this Agreement or in connection with the matters contemplated
by it shall, except where otherwise specifically provided, be
in writing in the English language and shall be addressed as
provided in Paragraph (B) and may be:
1. personally delivered, in which case it shall be deemed
to have been given upon delivery at the relevant
address; or
2. if within the United Kingdom, sent by first class
pre-paid post, in which case it shall be deemed to have
been given two Business Days after the date of posting;
or
3. if from or to any place outside the United Kingdom, sent
by pre-paid priority airmail, in which case it shall be
deemed to have been given seven Business Days after the
date of posting; or
4. sent by fax, in which case it shall be deemed to have
been given when despatched, subject to confirmation of
uninterrupted transmission by a transmission report
provided that any notice despatched by fax after 17.00
hours (at the place where such fax is to be received) on
any day shall be deemed to have been received at 09.30
(at such place) on the next Business Day.
B. The addresses and other details of the parties hereto to which
notices referred to in Paragraph (A) may be delivered are,
subject to Paragraph (C):
Vendors: TGE Group Limited
00 Xxxxxx Xxxx
Xxxxxxxxx
Xxxxxx XX00 0XX
Xxxxxx Xxxxxxx
Attention: Xxxx XxXxxxx
Telephone: 000 0000 0000
Facsimile: 020 8947 4896
with a copy to:
Lovells
00 Xxxxxxx Xxxxxxx
Xxxxxx XX0X 0XX
Xxxxxx Xxxxxxx
Attention: Xxxxx Xxxxxx//Xxxxxxx XxxXxxxxxx
Telephone: 000 0000 0000
25
29
Facsimile: 020 7296 2001
Purchaser: NATCO Group Inc.
Brookhollow Central III, Suite 750
0000 Xxxxx Xxxx Xxxx
Xxxxxxx, Xxxxx 00000
Attention: J. Xxxxxxx Xxxxx
Xxxxxx X. Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with copies to:
Xxxxxx & Xxxxxx L.L.P.
Regis House
00 Xxxx Xxxxxxx Xxxxxx
Xxxxxx XX0X 0XX
Xxxxxx Xxxxxxx
Attention: Xxxxxxxx Xxxxx
Telephone: 000 0000 0000
Facsimile: 020 7618 6001
Xxxxxx & Xxxxxx L.L.P.
0000 Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Xxxxxxx X. Xxxx, III
W. Xxxxxxxxx Xxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
C. Any party to this Agreement may notify the other parties of
any change to its address or other details specified in
Paragraph (B), provided that such notification shall be
effective only on the date specified in such notice or five
Business Days after the notice is given, whichever is later.
10.13 Several Liability
The obligations of each of the Vendors under or pursuant to this
Agreement are several. Save as expressly provided in Clause 8 and
Schedule 3, no Vendor shall be liable for any action or omission of any
of the other Vendors and the Institutional Investors shall only be
liable in relation to matters which arise directly out of their own
default.
10.14 Transfer of Shares
The parties are aware of and hereby consent to the transfer pursuant to
the Preference Share Transfer and the ICG Option of the following
transfers of shares that may take place before Completion:
26
30
10.14.1 28,000 "B" Ordinary Shares from SUK BOF III Nominees Ltd to
the holders of Preference Shares at the date hereof; and
10.14.2 3,693,694 Preference Shares from the holders at the date
hereof to SUK BOF III Nominees Ltd.
11. LAW AND JURISDICTION
11.1 English Law
This Agreement shall be governed by, and interpreted and construed in
accordance with, English law.
11.2 Jurisdiction
In relation to any legal action or proceedings to enforce this
Agreement or arising out of or in connection with this Agreement
("proceedings") each of the parties irrevocably submits to the
jurisdiction of the English courts and waives any objection to
proceedings in such courts on the grounds of venue or on the grounds
that the proceedings have been brought in an inconvenient forum.
AS WITNESS the hands of the duly authorised representatives of the parties on
the date first before written.
27
31
SCHEDULE 1
THE VENDORS AND THE COMPANY
PART I: THE SHAREHOLDERS
Vendor Number of Sale Shares
------ ---------------------
Braydeal Ltd. 80,000 "A" Ordinary Shares
Sloane Investments Ltd. 80,000 "A" Ordinary Shares
Suk Bof III Nominees Ltd.(1) 520,000 "B" Ordinary Shares
Meggitt Properties Plc. 120,000 "C" Ordinary Shares
Vendor Number of Preference Shares
------ ----------------------------
Alpinvest Mezzanine BV..... 286,800 Preference Shares
Intermediate Capital Group Plc 6,453,000 Preference Shares
Intermediate Capital Limited 430,200 Preference Shares
PART II: THE COMPANY
Name: Axsia Group Limited
Number: 3508104
Registered Office: 00 Xxxxxx Xxxx
Xxxxxx
XX00 0XX
Authorised Capital: 160,000 "A" Ordinary Shares of 1p each
520,000 "B" Ordinary Shares of 1p each
120,000 "C" Ordinary Shares of 1p each
7,170,000 Preference Shares of (pound)0.999 each
Issued Capital: 800,000 Ordinary Shares
7,170,000 Preference Shares
Directors: Xxxx Xxxxxx Xxxx
Xxxxx Xxxxx Xxxxxxx
Xxxx Xxxxxxxx Xxxx XxXxxxx
Xxxxx Xxxxxxx Xxxxxxxx
Xxxxxxx Xxxxxxx
X.X. Xxxxxxx (Will resign on or before
Completion)
Secretary: Xxxxx Xxxxx Xxxxxxx
28
32
Accounting Reference Date: 31 December
Auditors: Ernst & Young
PART III: THE OPTIONHOLDERS
Number of 'A' Ordinary
Shares over which Options Exercise
Optionholder are held Price per Share
------------ ------------------------- ---------------
Sloane Investments Ltd. 24,296 1p
Xxxx XxXxxxx 24,296 1p
Xxxxx X Xxxxxxxx 37,926 1p
Xxx X Xxxxxxx 18,962 1p
Xxxxxxxx X Xxxxxxx 23,702 1p
Xxxxxxx X Xxxxxxx 18,962 1p
--------
148,144
========
29
33
SCHEDULE 2
THE SUBSIDIARIES
PART I: AXSIA LIMITED
Name: Axsia Limited
Number: 3047122
Registered Office: 00 Xxxxxx Xxxx
Xxxxxx
XX00 0XX
Authorised Capital: 160,000 "A" Ordinary Shares of 1p each
520,000 "B" Ordinary Shares of 1p each
120,000 "C" Ordinary Shares of 1p each
7,170,000 Preference Shares of (pound)1 each
Issued Capital: 800,000 Ordinary Shares
7,170,000 Preference Shares
Registered Shareholders: Axsia Group Limited
Beneficial Owner of
issued capital: Axsia Group Limited
Directors: Xxxx Xxxxxx Xxxx
Xxxx Xxxxxxxx Xxxx XxXxxxx
X. Xxxxxxx*
G Wrigley*
Secretary: Xxxxx Xxxxx Xxxxxxx
Accounting Reference Date: 31 December
Auditors: Ernst & Young
------------
*Will resign on or before Completion.
30
34
PART II AXSIA XXXXX XXXXX LIMITED
Name: Axsia Xxxxx Xxxxx Limited
Number: 2106584
Registered Office: Riga House
000 Xxxxxxx Xxxx
Xxxxxxxxxx
Xxxxxxxxxxxxxxx XX0 0XX
Authorised Capital: Ordinary Shares - 100 shares of $1
Deferred Ordinary Shares - 100 shares
of (pound)1
Issued Capital: 100* Ordinary Shares of $1 and 2 Deferred
Shares of (pound)1
Registered Shareholders and
Beneficial Owner of
issued capital: [Axsia Limited]
Directors: X.X.Xxxx
Xxxxx Xxxxx
X.X. Xxxxxxx
X.X. Xxxxxx
J.K.L.XxXxxxx
X.X. Xxxxxxxx
X.X. Xxxxxxx
Secretary: Xxxxx Xxxxxxx
Accounting Reference Date: 31 December
Auditors: Ernst & Young
------------
* The 1999 accounts show 65 shares issued; the Annual Return shows 100
31
35
PART III AXSIA HOWMAR LIMITED
Name: Axsia Howmar Limited
Number: 961792
Registered Office: Albany Xxxx Xxxxxx
Xxxxxxx Xxxx
Xxxxxxxxx
Xxxxxx XX00 0XX
Authorised Capital: (pound) 1,000,000 divided into 1,000,000
deferred ordinary shares of(pound)1 each
100 ordinary shares of US$1 each
Issued Capital: 600,200 Deferred Ordinary Shares
100 Ordinary Shares
Registered Shareholders and
Beneficial Owner of
issued capital: Axsia Limited
Directors: D. G. F. Cash
X. X. Xxxx
X. Xxxxxxx
X. X. Xxxxxxx
J. K. L. XxXxxxx
X. X. Xxxxxxxx*
D. M. N. Welland
Secretary: Xxxxxx Xxxxxxx
Accounting Reference Date: 31 December
Auditors: Ernst & Young
------------
*[not shown as a director in the 1999 accounts]
32
36
PART IV AXSIA XXXXX XXXXX INC.
Name: Axsia Xxxxx Xxxxx Inc.
Number: Incorporated in California, USA,
No. FES-95.2575292
Registered Office:
Authorised Capital:
Issued Capital:
Registered Shareholders and
Beneficial Owner of
issued capital: Axsia Limited
Directors:
Secretary:
Accounting Reference Date:
Auditors:
33
37
PART V XXXXX XXXXX A/S
Name: Xxxxx Xxxxx A/S
Number: Incorporated in Norway 932171473
Registered Office:
Authorised Capital:
Issued Capital:
Registered Shareholders:
Beneficial Owner of issued capital:
Directors:
Secretary:
Accounting Reference Date:
Auditors:
34
38
PART VI XXXXX XXXXX LIMITED
Name: Xxxxx Xxxxx Limited
Number: 3429326
Registered Office: 00 Xxxxxx Xxxx
Xxxxxx XX00 0XX
Authorised Capital: (pound) 100
Issued Capital: 2 Ordinary Shares of (pound)1 each
Registered Shareholders and
Beneficial Owner of
issued capital: Axsia Limited
Directors: J. K. L. XxXxxxx
Secretary: Xxxxx X Xxxxxxx
Accounting Reference Date: 31 December
Auditors: None -- company is dormant
35
39
PART VII HOWMAR LIMITED
Name: Howmar Limited
Number: 3429435
Registered Office: 00 Xxxxxx Xxxx
Xxxxxx XX00 0XX
Authorised Capital: (pound) 100
Issued Capital: 2 Ordinary Shares of (pound) 1 each
Registered Shareholders and
Beneficial Owner of
issued capital: Axsia Limited
Directors: J. K. L. XxXxxxx
Secretary: Xxxxx X. Xxxxxxx
Accounting Reference Date: 31 December
Auditors: None -- company is dormant
36
40
PART VIII XXXXXXX XXXXXX LIMITED
Name: Xxxxxxx Xxxxxx Limited
Number: 1364279
Registered Office: Riga House
000 Xxxxxxx Xxxx
Xxxxxxxxxx
Xxxxxxxxxxxxxxx XX0 0XX
Authorised Capital: (pound) 10,000 divided into 10,000 Ordinary
Shares of (pound)1 each
Issued Capital: 10,000 Ordinary Shares of (pound)1 each
Registered Shareholders and
Beneficial Owner of
issued capital: Axsia Group Limited
Directors: Xxxxx X Xxxxxxxx
Xxxx XxXxxxx
Xxxxx Xxxxxxx
Secretary: A Vyvyan
Accounting Reference Date: 31 December
Auditors: [have E&Y been appointed?]
37
41
SCHEDULE 3
WARRANTIES AND REPRESENTATIONS
1. INTERPRETATION
1.1 In this Schedule, where the context admits, references to the "Company"
include each of the Material Subsidiaries.
2. WARRANTIES AND REPRESENTATIONS
Each of the Vendors in the case of the statements made in clause
2.1(A), (B) and (C) of Schedule 3 and the Principal Warrantors in the
case of the other statements contained in this Schedule 3 hereby
severally represent and warrant as set out herein to and for the
benefit of the Purchaser that such statements will be correct and
complete as of the date of the Disclosure Letter and will be correct
and complete as of the Completion Date (as though made then and as
though the Completion Date were substituted for the date of the
Disclosure Letter throughout this Schedule 3 (Warranties and
Representations)), except as fairly set forth in the Disclosure Letter
to be delivered by the Vendors to the Purchaser not later than the 20th
Business Day subsequent to the date of this Agreement, (as supplemented
in the period from the date of delivery of the Disclosure Letter up to
Completion). The Disclosure Letter shall be arranged in sections
corresponding to the numbered and lettered paragraphs contained in
Clause 2 of Schedule 3 (Warranties and Representations).
2.1 The Company and the Vendors. Each of the Vendors hereby severally
represents and warrants that:
A. Capacity. Such Vendor has full power and authority to enter
into and perform this Agreement, may execute and deliver this
Agreement and perform its obligations under this Agreement
without requiring or obtaining the consent of its shareholders
or of any other Person, Governmental Authority or Court, and
this Agreement constitutes valid and binding obligations on
such Vendor in accordance with its terms.
B. Ownership of Sale Shares. Such Vendor is the registered and
sole Beneficial Owner of the Sale Shares and/or Preference
Shares set forth next to its name on Part I of Schedule I (The
Vendors and the Company) (save as may be amended pursuant to
Clause 10.14), free from any Encumbrances, and such Sale
Shares and/or Preference Shares are in issue fully paid.
C. Options, etc. No Person has the right (whether exercisable now
or in the future and whether contingent or not) to call for
the sale, transfer or conversion of any share or loan capital
of the Company held by such Vendor pursuant to any option or
other agreement (including conversion and exchange rights and
rights of pre-emption).
D. Liabilities Owing to or by Vendors. There is not outstanding
any indebtedness or other liability (actual or contingent)
owing by the Company to such Vendor or to
38
42
any Director or any Person connected with such Vendor, nor is
there any indebtedness or other liability (actual or
contingent) owing to the Company by any such Person, and no
promise or representation has been made to such Vendor in
connection with the Warranties or the Disclosure Letter in
respect of which the Company or any of the Subsidiaries could
reasonably be expected to be liable.
2.2 The Company's Constitution.
A. Particulars of the Company. The particulars of the Company set
out in Schedule 1 (The Vendors and the Company) are true and
accurate.
B. Share Capital. The Sale Shares and the Preference Shares
comprise the whole of the issued and allotted share capital of
the Company.
C. Options, etc. No Person has the right (whether exercisable now
or in the future and whether contingent or not) to call for
the sale, transfer or conversion of any share or loan capital
of the Company pursuant to any option or other agreement
(including conversion and exchange rights and rights of
pre-emption).
D. Memorandum and Articles. The copies of the memorandum and
articles of association of the Company which will be annexed
to the Disclosure Letter will be true and complete in all
respects and have embodied therein or annexed thereto a copy
of every resolution or agreement as is required by law to be
embodied in or annexed to them, and set out completely the
rights and restrictions attaching to each class of authorised
share capital of the Company.
E. Company Resolutions. All resolutions of the Company or any
class of its members which are required to be filed at
Companies House have been so filed.
2.3 The Company's Investments.
A. Particulars of the Material Subsidiaries. The particulars set
out in Schedule 2 (The Subsidiaries) are true and complete,
and the Company has no other Material subsidiary or subsidiary
undertaking.
B. Material Subsidiaries' Share Capital. Schedule 2 contains true
and complete particulars of the authorised and issued share
capital of the Material Subsidiaries, and the shares there
shown as issued are in issue fully paid and are Beneficially
Owned and registered as set out therein, in each case free
from any Encumbrances.
C. Options, etc. No Person has the right (whether exercisable now
or in the future and whether contingent or not) to call for
the allotment, issue, sale, transfer or conversion of any
share or loan capital of any of the Material Subsidiaries
under any option or other agreement (including conversion or
exchange rights and rights of pre-emption).
39
43
D. Material Subsidiaries' Memoranda and Articles. The copies of
the memoranda and articles of association, or other
organizational documents, of each of the Material Subsidiaries
annexed to the Disclosure Letter are true and complete and
have embodied therein or annexed thereto a copy of every
Material resolution or agreement as is required by law to be
embodied in or annexed to them, and set out completely the
rights and restrictions attaching to each class of authorised
share capital of each of the Material Subsidiaries.
E. Material Subsidiaries' Resolutions. All resolutions of the
Material Subsidiaries or any class of their members which are
required to be filed at Companies House (or its equivalent in
the country of incorporation when that is not England and
Wales) have been so filed.
F. Investments, Associations and Branches. The Company is not the
registered holder or Beneficial Owner of, and has not agreed
to acquire, any class of the share or other capital of any
other company or corporation (whether incorporated in the
United Kingdom or elsewhere) other than of the Subsidiaries or
to an extent which is not material.
2.4 The Company and the Law.
A. Compliance with Laws. The Company has conducted its business
in compliance with all applicable Laws and Regulations of the
United Kingdom and any relevant foreign country or authority
except for such failures to comply as could not reasonably be
expected to have a Material Adverse Effect on the Company.
There is no Order of any Court, any Governmental Authority or
other competent authority or agency of the United Kingdom or
any foreign country outstanding against the Company that could
reasonably be expected to have a Material Adverse Effect on
the Company.
B. Returns. Since the Balance Sheet Date the Company has
substantially complied with the provisions of the Companies
Acts, and all Material returns, particulars, resolutions and
other documents required under any legislation to be delivered
on behalf of the Company to the Registrar of Companies or to
any other authority whatsoever have been properly made and
delivered. All such documents delivered to the Registrar of
Companies or to any other Governmental Authority whatsoever,
whether or not required by law, were true and accurate in all
Material respects when so delivered, and the Company has not
received notification of the levy of any fine or penalty for
non-compliance by the Company or any director of the Company
that could reasonably be expected to have a Material Adverse
Effect on the Company.
C. Authorisations.
1. The Company has not been notified or become aware of any
failure to obtain any Material Authorisations necessary
to enable the Company to carry on its business
effectively in the places and in the manner in which
40
44
such business is now carried on, and all such
Authorisations are in full force and effect and not
limited in duration.
2. The Company has not been notified or become aware that
the utilisation of any of the assets of the Company or
the carrying on of any aspect of the Company's business
or any business now being carried on at any of the
Properties is in breach of any of the terms and
conditions of any of such Material Authorisations, or
that any such Material Authorisation could reasonably be
expected to be suspended, cancelled or revoked.
D. Breach of Statutory Provisions. Neither the Company nor any of
its directors, officers, or employees (during the course of
their duties in relation to the Company) have committed, or
omitted to do, any act or thing the commission or omission of
which is, or could be, in contravention of any Law, Regulation
or Order in the United Kingdom or elsewhere that is punishable
by fine or other penalty and which could reasonably be
expected to have a Material Adverse Effect on the Company, and
no notice or communication has been received with respect to
any alleged, actual or potential violation of or failure to
comply with such Law, Regulation or Order which could
reasonably be expected to have a Material Adverse Effect on
the Company.
E. Litigation.
1. Neither the Company nor any of its directors, officers,
or employees is engaged in or the subject of any
litigation, arbitration, administrative or criminal
proceedings whether as plaintiff, defendant or
otherwise, that could reasonably be expected to have a
Material Adverse Effect on the Company or the ability of
the Purchaser to carry on the Company's business in the
same manner and to the same extent as carried on prior
to Completion.
2. No litigation or arbitration or administrative or
criminal proceedings are pending or threatened by or
against the Company or any such director, officer, or
employee that could reasonably be expected to have a
Material Adverse Effect on the Company or the ability of
the Purchaser to carry on the Company's business in the
same manner and to the same extent as carried on prior
to Completion, and there are no facts or circumstances
that could reasonably be expected to give rise to any
such litigation or arbitration or administrative or
criminal proceedings.
3. Neither the Company nor any of its directors, officers,
or employees (during the course of their duties in
relation to the Company) has been a party to any
undertaking or assurance given to any Court or
Governmental Authority with respect to any pending
matter or is the subject of any injunction which is
still in force, in each case that could reasonably be
expected to have a Material Adverse Effect on the
Company.
41
45
F. Fair Trading.
1. No agreement, practice or arrangement carried on by the
Company or to which the Company is or has in the two
years prior to the date of this Agreement been a party
infringes any competition, restrictive trade practice,
anti-trust, fair trading or consumer protection law or
legislation applicable in any jurisdiction in which the
Company has assets or carries on business or in which
the activities of the Company may have an effect.
2. The Company has not given any assurance or undertaking
to the Restrictive Practices Court or the Director
General of Fair Trading or the Secretary of State for
Trade and Industry, the European Commission, the EFTA
Surveillance Authority or the Court of Justice of the
European Communities or to any other Court or
Governmental Authority and is not subject to or in
default or contravention of any Law, Regulation or Order
relating to the matters referred to in this Paragraph
(F).
G. Pensions.
1. Apart from the liability to contribute to the Axsia
Scheme and to personal pension schemes at rates and in
respect of persons disclosed in the Disclosure Letter
the Company has no obligation to provide or contribute
to the provision of any relevant benefit (as defined in
ICTA 1988, s 612) or like benefit for or in respect of
any of the employees and officers or former employees
and former officers of the Company.
2. Complete and accurate particulars of the Axsia Scheme
(in the form of copies of any documents issued by the
Company to its employees and officers or former
employees and former officers and, in the case of the
Axsia Scheme, of the current trust deed and rules of the
Axsia Scheme and of the personal pension schemes to
which the Company contributes and of the Company's
liability to contribute to each of them) will be set out
in the Disclosure Letter.
3. All amounts that have fallen due to the Axsia Scheme and
to any personal pension scheme from the Company in
respect of any of the employees or former employees or
officers or former officers of the Company have been
paid on or before the latest date allowed by law.
4. The Axsia Scheme provides only money purchase benefits
or benefits payable on death in service or on disability
that are fully and adequately insured.
42
46
2.5 Taxation Matters.
A. General Taxation Matters.
1. Residence. The Company is resident, for taxation
purposes, only in the United Kingdom.
2. Payment of Tax. The Company has duly and punctually paid
all taxation which it has become liable to pay and is
under no liability to pay any penalty or interest in
connection with any claim for taxation and has not paid
any tax which it was and is not properly due to pay.
None of the Company's tax returns is disputed by the
Inland Revenue or any other Governmental Authority, and
there are no facts or circumstances that could
reasonably be expected to give rise to such a dispute.
3. Payments under deduction. All payments by the Company to
any Person that ought to have been made under deduction
of tax have been so made, and the Company has (if
required by Law or Regulation to do so) provided
certificates of deduction to such Person and accounted
to the Inland Revenue for the tax so deducted.
B. Close Company Matters. The Company is not a close company.
C. Clearances. The Company has obtained all clearances under any
enactment relating to taxation for which the Vendors
considered it prudent to apply. The facts and circumstances
relevant to the applications for such clearances were
disclosed in such applications. The Completion of this
Agreement and implementation of the transactions contemplated
hereby will not give rise to the re-opening or withdrawal of
any clearances previously obtained in relation to any taxation
matters.
D. Taxation of Employees and Agents.
1. PAYE. The Company has operated the Pay As You Earn
system as required by Law or Regulation in connection
with both employee income tax deductions and national
insurance contributions.
2. Benefits for Employees. The Company has not issued any
shares in the circumstances described in Section 77(1)
and has complied with Section 85 of the Finance Xxx
0000.
3. Slave Companies. Any payment made to or for the direct
or indirect benefit of any Person who is or could
reasonably be expected to be regarded by any
Governmental Authority with jurisdiction over taxation
matters as an employee of the Company has been and is
made to such Person directly and has not been and is not
made to any company or other entity associated with that
Person.
43
47
E. Stamp Duties.
1. Stamp Duty. The Company has duly paid or has procured to
be paid all stamp duty on documents to which it is a
party or in which it is interested and which are liable
to stamp duty.
2. Stamp Duty Reserve Tax. The Company has made all returns
and paid all stamp duty reserve tax in respect of any
transaction in securities to which it has been a party
or in respect of which it is liable to account for stamp
duty reserve tax.
F. Value Added Tax.
The Company has complied with all statutory provisions and
regulations relating to value added tax and has duly paid or
provided for all amounts of value added tax for which the
Company is liable.
2.6 The Company's Solvency.
A. Winding Up. No order has been made, petition presented or
resolution passed for the winding up of the Company, and no
meeting has been convened for the purpose of winding up the
Company. The Company has not been a party to any transaction
that could be avoided in a winding up.
B. Administration and Receivership. No steps have been taken for
the appointment of an administrator or receiver (including an
administrative receiver) of all or any part of the Company's
assets.
C. Compositions. The Company has not made or proposed any
arrangement or composition with its creditors or any class of
its creditors.
D. Insolvency. The Company is not insolvent, is not unable to pay
its debts within the meaning of the insolvency legislation
applicable to the Company and has not stopped paying its debts
as they fall due.
E. Unsatisfied Judgments. No distress, execution or other process
has been levied against the Company or action taken to
repossess goods in the Company's possession that has not been
satisfied in full. No unsatisfied judgment is outstanding
against the Company.
F. Floating Charges. No floating charge created by the Company
has crystallised, and there are no facts or circumstances that
could reasonably be expected to cause such a floating charge
to crystallise.
G. Analogous Events. No event analogous to any of the foregoing
has occurred in or outside England.
44
48
2.7 The Company's Records and Accounts.
The Vendors hereby represent and warrant that:
A. Books and records. All accounts, books, ledgers, financial and
other records of whatsoever kind ("Records") of the Company:
1. are in the possession and control of the Company and
contain true, complete and accurate records in all
Material respects of all matters required by Law to be
entered therein; and
2. have been fully, properly and accurately maintained in
all Material respects on a consistent basis.
No notice or allegation that any of the Records is incorrect
or should be rectified has been received.
B. Accounts. None of the Vendors has Knowledge of any errors or
omissions in the Audited Accounts or any matters which make
the Audited Accounts in any way misleading:
C. Management Accounts. The cumulative profits, assets and
liabilities of the Company stated in the Management Accounts
have been fairly presented in accordance with accounting
principles generally accepted in the United Kingdom and
applied consistently with those utilised in the preparation of
the Audited Accounts.
2.8 The Company's Business and the Effect of Sale.
A. Business Since the Balance Sheet Date. Since the Balance Sheet
Date:
1. save for disposals for fair value in the ordinary course
of its business, the Company has not disposed of any
Material assets included in the Audited Accounts;
2. the Company has not acquired any Material assets;
3. the Company has not given, created or allowed, or
entered into any agreement or commitment to give, create
or allow, any Material Encumbrance over or in respect of
the whole or any part of the Company's assets (whether
owned as of the Balance Sheet or thereafter acquired),
undertaking, goodwill or uncalled capital;
4. the Company has not entered into, or agreed to enter
into, any commitment to acquire or dispose of on capital
account any asset of a value in excess of (pound)
150,000 or any commitment involving expenditure by it on
capital account;
45
49
5. no share or loan capital has been agreed to be issued by
the Company; and
6. no distribution of capital or income has been declared,
made or paid in respect of any share capital of the
Company (other than distributions made by wholly owned
Subsidiaries to the Company or to another wholly owned
Subsidiary), and (excluding fluctuations in overdrawn
current accounts with bankers) no loan or share capital
of the Company has been repaid in whole or part or has
become liable to be repaid in whole or part.
B. Commission. No one is entitled to receive from the Company any
Material finder's fee, brokerage, or other commission in
connection with this Agreement or the sale and purchase of
shares in the Company.
C. Consequence of Share Acquisition by the Purchaser. The
acquisition of the Sale Shares by the Purchaser or compliance
with the terms of this Agreement will not:
1. result in any Material indebtedness of the Company
becoming due or capable of being declared due and
payable prior to its stated maturity;
2. result in a breach of, or constitute a default under,
any Order of any Court or Governmental Authority by
which the Company is bound or subject which could
reasonably be expected to result in a Material Adverse
Effect on the Company; or
3. result in a breach of, or constitute a default under the
terms, conditions or provisions of, any agreement,
understanding, arrangement or instrument (including any
of the Company's contracts) which could reasonably be
expected to result in a Material Adverse Effect on the
Company.
D. Grants. The Company has not applied for or received any
financial assistance from any Governmental Authority.
E. Insurances.
1. Particulars of Material insurance policies (including
the limit and basis of cover under each policy and the
amount of the applicable excess) in which the Company
has an interest (the "Company's Insurances") will be
given in the Disclosure Letter.
2. All the Company's Insurances are in full force and
effect and will be maintained in full force without
alteration pending Completion.
F. Trading Name. The Company does not trade under any name other
than its corporate name and any other name given in the
Disclosure Letter.
46
50
2.9 The Company's Assets.
A. Assets and Charges.
1. No Material asset is shared by the Company with any
other Person, and the Company does not depend for its
business upon any assets, premises, facilities or
services owned or supplied by any of the Vendors or any
Person connected with any of the Vendors.
2. No charge in favour of the Company is void or voidable
for want of registration.
B. Debts. The Company has not factored or discounted any of its
debts or other receivables or agreed to do so.
C. [Not used]
D. [Not used]
E. Intellectual Property Rights.
1. All the Intellectual Property rights owned or used by
the Company are valid and enforceable and are owned by
or licensed to it, and nothing has been done, omitted or
permitted whereby any of the Intellectual Property
rights has ceased or could reasonably be expected to
cease to be valid and enforceable.
2. None of the processes or products of the Company
infringes any Intellectual Property or any right of any
other Person relating to Intellectual Property or
involves the unlicensed use of confidential information
disclosed to the Company by any Person in circumstances
that could reasonably be expected to entitle that Person
to make a claim against the Company.
3. None of the Listed Intellectual Property is being used,
claimed, applied for, opposed or attacked by any Person.
4. None of the Listed Intellectual Property or any rights
relating to it is being infringed by any Person.
5. There are no outstanding claims against the Company for
infringement of any Intellectual Property or of any
rights relating to it used (or which have been used) by
the Company and during the last three years no such
claims have been settled by the giving of any
undertakings which remain in force. The Company has not
received any actual or threatened claim that any of the
Listed Intellectual Property is invalid or infringes the
rights of any Person.
47
51
6. Confidential information and know-how used by the
Company is kept strictly confidential. The Company has
not disclosed (except in the ordinary course of its
business) any of its confidential information, know-how,
trade secrets or list of customers to any other Person.
7. The Listed Intellectual Property Agreements are the
Material agreements in respect of Intellectual Property
to which the Company is a party. Each of the Listed
Intellectual Property Agreements is valid and binding,
and the Company is not in breach of any of the
provisions of such agreements.
8. None of the Intellectual Property owned or used by the
Company is subject to compulsory licensing or the
granting of any licences of right nor, to the Knowledge
of the Vendors, will it become so by operation of law.
F. [Not used]
G. Properties.
1. Interest in Properties
a. The particulars of the Properties shown in
Schedule 4 (Properties) are true and correct in
all Material respects. Except as there shown, the
Company has no other interest in land and does not
occupy any other property and has not entered into
any agreement to acquire or dispose of any land or
premises or any interest therein which has not
been completed.
b. The Company is solely legally and beneficially
entitled to and has good and marketable title to
and exclusive occupation of the Owned Properties.
c. The Company owns the Owned Properties free from
any mortgage or charge (whether legal or
equitable, fixed or floating), Encumbrance, lease,
sub-lease, tenancy, licence or right of
occupation, rent charge, exception, reservation,
easement, quasi easement or privilege (or
agreement for any of the same) in favour of a
third party.
d. The leases, sub-leases, tenancies or agreements
for any of the same under which the Company holds
the Leased Properties are valid and subsisting in
all Material respects against all Persons,
including any Person in whom any superior estate
or interest is vested.
e. There are appurtenant to each Property all
Material rights and easements necessary for its
current use and enjoyment (without restriction as
to time or otherwise) and the access for each of
the
48
52
Properties is over roads adopted by local
Governmental Authorities and maintained at public
expense.
f. The Company has not entered into any Material
positive covenants or personal obligations, nor
does it have any Material personal rights under
which it has any subsisting liability (whether
actual or contingent).
2. Matters affecting Properties.
a. None of the Properties is used for any purpose
other than the use specified for each Property in
Schedule 4 (Particulars of Properties).
b. Where the interest of the Company in a Property is
leasehold, there is no right for the landlord to
terminate the lease except in the event of
non-payment of rent or other breach of covenant by
the Company.
2.10 The Company's Contracts.
A. The Company's Contracts. Except as could not reasonably be
expected to result in a Material Adverse Effect on the Company
no notice of termination of any of the Company's contracts has
been received or served by the Company, and there are no
grounds for determination, rescission, avoidance or
repudiation of, any such contracts.
B. Contractual Arrangements.
1. All of the Company's Material contracts will be
disclosed to the Purchaser in the Disclosure Letter or
in the course of the Purchaser's due diligence
investigations.
2. The copies of the Company's contracts provided to the
Purchaser in the course of its due diligence activities
will be complete and accurate.
C. Substantial or significant contracts. No contract, agreement,
transaction, obligation, commitment, understanding,
arrangement or liability entered into by the Company and now
outstanding or unperformed involves any of the following:
1. save in the ordinary course of business, obligations on
the part of the Company which will cause or could
reasonably be expected to cause the Company to incur
expenditure or an obligation to pay money in excess of
(pound)150,000;
2. obligations on the part of the Company to purchase any
specified minimum quantity or any specified minimum
percentage of its total requirement for any of its stock
in trade from any one supplier;
49
53
3. the supply by the Company of products or services to any
one customer such that the value of such supplies
exceeds or could reasonably be expected to exceed 5 per
cent of the total turnover of the Company in the
financial year ending December 31, 2000 or in any
subsequent year.
D. [Not used].
E. Sureties. None of the Vendors nor any third party have given
any guarantee of or security for, any overdraft loan, loan
facility or off-balance sheet financing granted to the
Company, nor has the Company given any guarantee of or
security for any overdraft loan, loan facility or off-balance
sheet financing granted to any of the Vendors. There is not
now outstanding in respect of the Company any guarantee or
warranty or agreement for indemnity or for suretyship given by
or for the accommodation of the Company or in respect of the
Company's business.
X. Xxxxxx of Attorney. No powers of attorney given by the Company
(other than to the holder of an Encumbrance solely to
facilitate its enforcement) are now in force. No Person, as
agent or otherwise, is entitled or authorised to bind or
commit the Company to any obligation not in the ordinary
course of the Company's business, and the Vendors have no
Knowledge of any Person purporting to do so.
G. Insider Contracts.
1. There is not outstanding, and there has not at any time
since the Balance Sheet Date been outstanding, any
Material agreement or arrangement to which the Company
is a party and in which any of the following Persons is
or has been interested, whether directly or indirectly:
a. any of the Vendors;
b. any Person beneficially interested in the
Company's share capital;
c. any Director; or
d. any Person connected with any of them.
2. The Company is not a party to, nor have its profits or
financial position during such period been affected by,
any Material agreement or arrangement which is not
entirely of an arm's length nature.
3. All costs incurred by the Company have been charged to
the Company and not borne by any of the Vendors.
H. Debts. There are no Material debts owing by or to the Company
other than debts which have arisen in the ordinary course of
business, nor has the Company lent any Material amount of
money which has not been repaid.
50
54
I. Guarantees. The Company is not a party to, nor has it given
any guarantee, suretyship, comfort letter or any other
obligation to provide funds or take action in the event of
default in the payment of any indebtedness of any other Person
or in the performance of any obligation of any other Person.
J. Tenders, etc. No offer, tender, or the like is outstanding
which is capable of being converted into a Material obligation
of the Company by an acceptance or other act of some other
Person.
2.11 The Company and its Bankers.
A. Facilities. Full and accurate details of all Material
overdrafts, loans or other financial facilities outstanding or
available to the Company will be given in the Disclosure
Letter. True and correct copies of all documents relating
thereto will be provided to the Purchaser, and none of the
Vendors nor the Company have done anything whereby the
continuance of any such facilities in full force and effect
could reasonably be expected to be affected or prejudiced.
B. Off-Balance Sheet Financing. The Company has not engaged in
any borrowing or financing not required to be reflected in the
Audited Accounts.
C. Bank Accounts. Full and accurate particulars of all the bank
and deposit accounts of the Company and of the credit or debit
balances on such accounts as at a date (the "Statement Date")
not more than seven days before the date of delivery of the
Disclosure Letter will be given in the Disclosure Letter. From
the Statement Date to the Completion Date there will be no
payments out of any such accounts except for routine payments
in the ordinary course of the Company's business, and the
balances on such accounts as at the date of delivery of the
Disclosure Letter and as at the Completion Date will not be
substantially different from the balances shown as at the
Statement Date.
2.12 The Company and its Employees.
A. Directors. Schedules 1 and 2 show the full names and offices
held by each Person who is a director of the Company. No other
Person is a director or shadow director of the Company.
B. Particulars of Employees.
1. Annexed to the Disclosure Letter will be a list of all
individuals (the "Employees") employed by the Company at
the date of this Agreement. Such list indicates those
Employees who are party to a contract of service with
the Company. Notice of termination will not be given by
the Company to any of the Employees on or before
Completion.
2. The particulars shown in the list annexed to the
Disclosure Letter will show remuneration payable and
other benefits which the Company is bound to
51
55
provide (whether now or in the future) to each category
of the Employees at Completion or any Person connected
with any such Person.
3. There are no subsisting contracts for the provision by
any Person of any consultancy services to the Company.
4. None of the Employees is under notice of dismissal or
has any outstanding dispute with the Company in
connection with or arising from his employment that
could reasonably be expected to have a Material Adverse
Effect on the Company, nor is there any Material
liability outstanding to any Employee or former employee
except for remuneration or other benefits accruing due,
and no such remuneration or other benefit which has
fallen due for payment has not been paid.
5. There are no Material loans owed by any of the Employees
to the Company.
6. Since the date of this Agreement, no change outside the
ordinary course of business has been made in (i) the
rate of remuneration, or the emoluments or pension
benefits or other contractual benefits, of any officer
of the Company or any of the Employees or (ii) the terms
of engagement of any such officer or any of the
Employees.
7. There is no Material outstanding undischarged liability
to pay to any Governmental Authority in any jurisdiction
any contribution, taxation or other duty arising in
connection with the employment or engagement of any of
the Employees.
C. Service Contracts. There is not outstanding any contract of
service between the Company and any of its directors, officers
or employees (i) which is not terminable by the Company
without compensation (other than any compensation payable by
statute) on not more than three months' notice given at any
time or (ii) pursuant to which any Employee will become
entitled by virtue of his contract of service to any Material
enhancement in or improvement to his remuneration, benefits or
terms and conditions of service only by reason of completion
of the sale and purchase of the Sale Shares under or pursuant
to this Agreement.
D. Disputes with Employees. There is no:
1. pending or threatened claim by any Employee or former
employee of the Company or any dispute outstanding with
any Employee or former employee or with any unions or
any other body representing all or any of them, in each
case in relation to their employment by the Company and
that could reasonably be expected to have a Material
Adverse Effect on the Company, and there are no facts or
circumstances that could reasonably be expected to give
rise to any such dispute;
52
56
2. industrial action involving any Employee or former
employee, whether official or unofficial, currently
pending or threatened that could reasonably be expected
to have a Material Adverse Effect on the Company; or
3. industrial relations matter which has been referred to
ACAS or any similar Governmental Authority in the
applicable jurisdiction for advice, conciliation or
arbitration that could reasonably be expected to have a
Material Adverse Effect on the Company.
2.13 Excluded Items. All written information provided to the Purchaser
pursuant to Sub-Clause 6.2 (Excluded Items) of the Agreement with
respect to the Excluded Items shall be true and correct in all
respects.
53
57
SCHEDULE 4
PARTICULARS OF PROPERTIES
PART I
OWNED PROPERTIES
PART II
LEASED PROPERTIES
--------------------------------------------------------------------------------
NOTE - BY AN EXCHANGE OF E-MAILS BETWEEN LOVELLS AND XXXXXX & XXXXXX IT WAS
AGREED THAT DETAILS FOR SCHEDULE 4 WOULD BE PROVIDED AS SOON AS POSSIBLE AND
THAT THE WARRANTIES IN SCHEDULE 3 WOULD APPLY AS IF SUCH DETAILS HAD ALWAYS BEEN
INCLUDED IN THE AGREEMENT.
54
58
SCHEDULE 5
PRINCIPAL WARRANTORS' WARRANTY SCHEDULE
1. 2. 3.
WARRANTY WARRANTY
NAME OF VENDOR PROPORTION LIABILITY CAP
-------------- ---------- -------------
(%) (POUND)
Braydeal Ltd. 8.44 261,640
Sloane Investments Ltd 8.44 261,640
SUK Bof III Nominees Ltd 51.89(1) 1,608,590(2)
Intermediate Capital Group Plc 2.95(2) 91,450(2)
Meggitt Properties Plc 12.66 392,460
Sloane Investments Ltd. 2.56 79,360
Xxxx XxXxxxx 2.56 79,360
Xxxxx X Xxxxxxxx 4.00 124,000
Xxx X Xxxxxxx 2.00 62,000
Xxxxxxxx X Xxxxxxx 2.50 77,500
Xxxxxxx X Xxxxxxx 2.00 62,000
------------
(1) If the ICG Option is not exercised, SUK BOF III Nominees Ltd shall have a
Warranty Proportion of 54.84% and Intermediate Capital Group Plc shall not
be a Principal Warrantor.
(2) If the ICG Option is not exercised SUK BOF III Nominees Ltd shall have a
Warranty Liability Cap of pounds 1,700,040, and Intermediate Capital Group
Plc will not be a Principal Warrantor.
55
59
SIGNED for and on behalf
of Alpinvest Mezzanine BV
by Xxx Xxxxxxx /s/ Xxx Xxxxxxx
----------------------------------------
SIGNED for and on behalf
of Intermediate Capital Group Plc
by Xxx Xxxxxxx /s/ Xxx Xxxxxxx
----------------------------------------
SIGNED for and on behalf
of Intermediate Capital Limited
by Xxx Xxxxxxx /s/ Xxx Xxxxxxx
----------------------------------------
SIGNED for and on behalf
of Braydeal Limited
by J.K.L. XxXxxxx /s/ J.K.L. XxXxxxx
----------------------------------------
SIGNED for and on behalf
of Sloane Investments Limited
by Xxx Xxxxxx-Xxxxxxxxxx /s/ Xxx Xxxxxx-Xxxxxxxxxx
(Director) ----------------------------------------
60
SIGNED for and on behalf
of Suk Bof III Nominees Limited
by X. Xxxxxxxxxx (Director) and /s/ X. Xxxxxxxxxx
----------------------------------------
X. Xxx Xxxxxx (Director) /s/ X. Xxx Xxxxxx
----------------------------------------
SIGNED for and on behalf
of Meggitt Properties Plc
by Xxxxxx X. Xxxxx /s/ Xxxxxx X. Xxxxx
----------------------------------------
SIGNED for and on behalf
of Sloane Investments Limited
by Xxx Xxxxxx-Xxxxxxxxxx /s/ Xxx Xxxxxx-Xxxxxxxxxx
(Director) ----------------------------------------
SIGNED by Xxxx XxXxxxx
in the presence of:
Xxxxx Xxxxxxx /s/ Xxxx XxXxxxx
----------------------------------------
0 Xxxxxx Xxxxx, Xxxxxxxxx XX00 0XX
SIGNED by Xxxxx Xxxxxxx Xxxxxxxx
in the presence of:
Xxx X. Xxxxxxxx /s/ Xxxxx Xxxxxxx Xxxxxxxx
----------------------------------------
61
SIGNED by Xxx Xxxxxxx Xxxxxxx
in the presence of:
Xxxxx Xxxxxxxxx /s/ Xxx Xxxxxxx Xxxxxxx
----------------------------------------
0 Xxxxxx Xxxx
Xxxxx Xxxx Xxxxxx XX00 0XX
SIGNED by Xxxxxxxx Xxxxxxx Xxxxxxx
in the presence of:
X. X. Xxxxx /s/ Xxxxxxxx Xxxxxxx Xxxxxxx
----------------------------------------
SIGNED by Xxxxxxx Xxxxxx Xxxxxxx
in the presence of:
Xxxxx X Xxxxxxx /s/ Xxxxxxx Xxxxxx Xxxxxxx
----------------------------------------
62
SIGNED for NATCO Group Inc.
by
/s/ Xxxx Xxxxx
---------------------------------------
Xxxx Xxxxx, Senior Vice President
and Chief Financial Officer