CONFORMED COPY
14th November 1997
PROSPECT INDUSTRIES PLC
PROSPECT ENGINEERING LIMITED
▇▇▇▇ INTERNATIONAL LIMITED
THE ▇▇▇▇ GROUP INC.
SALE AGREEMENT
FRESHFIELDS
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CONTENTS
Clause Page
INTERPRETATION..............................................................1
2. SALE OF THE SHARES AND PRICE..........................................4
3. CONDITION PRECEDENT...................................................5
4. COMPLETION............................................................5
5. TITLE AND SUPPLEMENTARY PROVISIONS....................................6
6. INTELLECTUAL PROPERTY RIGHTS..........................................7
7. EMPLOYEES.............................................................7
8. POST-COMPLETION UNDERTAKINGS..........................................7
9. WARRANTIES............................................................8
10. LIMITATIONS ON CLAIMS.................................................8
11. PENSION SCHEMES.......................................................8
12. LIABILITIES...........................................................9
13. VAT...................................................................9
14. RIGHTS OF ADMINISTRATIVE RECEIVERS...................................10
15. ENTIRE AGREEMENT.....................................................10
16. VARIATION............................................................10
17. ASSIGNMENT............................................................11
18. ANNOUNCEMENT.........................................................11
19. COSTS................................................................11
20. INVALIDITY...........................................................11
21. FURTHER ASSURANCE.....................................................11
22. NOTICES..............................................................11
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23. COUNTERPARTS.......................................................12
24. GOVERNING LAW......................................................12
25. JURISDICTION.......................................................12
26. AGENT FOR SERVICE OF PROCESS.......................................12
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THIS AGREEMENT is made on 14th November 1997
BETWEEN:
(1) PROSPECT INDUSTRIES PLC whose registered office is at ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ (the Vendor);
(2) PROSPECT ENGINEERING LIMITED whose registered office is at ▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ (PEL);
(3) ▇▇▇▇ INTERNATIONAL LIMITED whose registered office is at ▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ (▇▇▇▇); and
(4) THE ▇▇▇▇ GROUP INC. whose registered office is at ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇ 70816 (the Purchaser).
WHEREAS:
The Vendor has agreed to sell, or procure the sale, and the Purchaser has agreed
to purchase, or procure the purchase, of:
(1) the entire issued and outstanding share capital of ▇▇▇▇▇ Australia Pty.
Limited, Prospect Industries Overseas Limited and two thirds of the issued
share capital of Inflo Control Systems Limited (each a Company and
collectively the Companies);
(2) the entire issued and outstanding share capital of Prospect Industries
Money Purchase and Prospect Industries Pensions (each a Pension Company
and collectively the Pension Companies); and
(3) the business and certain assets of PEL,
for the consideration, and on the terms and conditions set out, in this
Agreement.
IT IS AGREED as follows:
INTERPRETATION
1.1 In this Agreement, the following expressions shall have the following
meanings:
▇▇▇▇▇ Australia means ▇▇▇▇▇ Australia Pty. Limited whose registered office is at
▇/▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, further details of which
are set out in Part 1 of Schedule 1;
Assets means the BPA Distribution, the Claims, the Contracts, Fixed Assets,
goodwill, the Intellectual Property Rights, the Property, the Stock, Sundry
Debtors, Tender Offers and Trade Debtors and any and all other assets used in
and rights relating to the Business save for the Excluded Assets (and, for the
avoidance of doubt, save for those assets otherwise excluded by this Agreement
from the sale and purchase hereunder);
Assignment of Trade Marks means the assignment relating to the use of the names
"Prospect", "▇▇▇▇▇", "Greenbank" and "▇▇▇▇" and any goodwill attached thereto in
the agreed form between, inter alia, the Vendor, PA No.2 and PA No.3;
Bank means Midland Bank plc;
BPA Distribution all rights of PEL in and to any distributions due or to become
due to PEL in connection with the BPA Joint Venture Agreement dated 1 July 1987;
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Business means the business carried on by PEL at the date of this Agreement;
Claims means all rights arising from or in relation to the issue of any notice,
letter or other document by or on behalf of PEL or ▇▇▇▇ from which a liability
of whatsoever nature or kind that has accrued for the benefit of PEL and/or ▇▇▇▇
against another party, including, without limitation, all such rights in and to
the following claims:
(A) ▇▇▇▇ International Limited ▇. ▇▇▇▇▇▇▇ & Cie AG AZ 850 182 195 (19.11.96)
195-238 876 20; and
(B) (1)........................................▇▇▇▇ International Limited v.
Chaudronnerie de L'Est;
(2)...............................................................Prospect
Engineering Limited Case No: 1994 - ORB No. 313;
Completion means completion of the sale and purchase of the Shares and the
Assets under this Agreement;
Contracts means the benefit but not the burden of all Intellectual Property
Licences and equipment contracts and leases used in the Business and the benefit
but not the burden of those agreements and arrangements listed in Schedule 2 to
this Agreement but excludes all other contracts, sub-contracts, and all
agreements and other arrangements with customers, creditors, suppliers and
sub-contractors in relation to the Business;
Costs means liabilities, losses, damages, costs (including legal costs) and
expenses, in each case of any nature whatsoever;
Deed of Indemnity means the deed of indemnity from the Purchaser to the Bank
relating to Letters of Credit, Bonds and Guarantees in the agreed form;
Deed of Indemnity relating to Preferential Debts means the deed of indemnity
from the Purchaser to the Bank relating to the preferential creditors of the
Vendor and PEL;
Deed of Release over the assets being sold by PEL means the deed of release
between the Bank and PEL over the assets being sold by PEL including the issued
share capital of ▇▇▇▇▇ Australia in the agreed form;
Deed of Release relating to intra group indebtedness means the deed of release
in the agreed form between, inter alia, the Vendor and the Companies relating to
the release of the Companies from certain intra group indebtedness;
Deed of Release releasing the US companies from their guarantees and releasing
the US security agreement means the deed of release in the agreed form between,
inter alia, Connex Pipe Systems Inc., CBP Engineering Corporation and Prospect
Industries (Holdings) Inc.;
Employees means all the employees of the Vendor or PEL immediately prior to
Completion (and, for the avoidance of doubt, excludes any employee employed in
any other member of the Vendor's Group);
Excluded Assets means the assets listed in Schedule 3 of this Agreement;
Fixed Assets means all plant, machinery, motor vehicles, furniture, tools and
equipment owned by the Vendor or PEL and used in the Business (for the avoidance
of doubt, excluding for this purpose plant and machinery which are the subject
of equipment leases and included in the term Contracts);
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Inflo means Inflo Control Systems Limited whose registered office is at Stores
Road, aforesaid further details of which are set out in Part 3 of Schedule 1;
Intellectual Property Licences means all existing agreements or arrangements
between PEL and third parties insofar as they relate to the use of Intellectual
Property Rights which have direct application to the Business;
Intellectual Property Rights means copyright (including rights in computer
software), rights in know-how, trade marks, service marks (including without
limitation the names "Prospect", "▇▇▇▇▇", "Greenbank" and "▇▇▇▇" and any
goodwill attached thereto) and any other intellectual property rights, in each
case whether registered or unregistered and including applications for the grant
of any such rights and all rights or forms of protection having equivalent or
similar effect anywhere in the world;
Landlord means the person who is lessor/landlord under the Relevant Lease and is
entitled to the freehold or leasehold reversion immediately expectant upon the
term granted by the Relevant Lease and the successors in title and assigns of
such person and includes the person or persons entitled to the freehold and any
other interest in reversion which is superior to the interest of the
lessor/landlord under the Relevant Lease;
the Leases means the leases dated 27 July 1953, 12 December 1960, 22 November
1968 between the Mayor Aldermen and Burgesses of the Borough of Derby (1) and
▇▇▇▇▇ and Co. Limited (2), the lease dated 11 March 1992 between Derbyshire
County Council (1) and ▇▇▇▇▇ and Co. Limited (2) and the lease dated 3 September
1976 between Derby Borough Council (1) and ▇▇▇▇▇ and Co. Limited and Relevant
Lease shall be construed accordingly;
LPMPA means the Law of Property (Miscellaneous Provisions) ▇▇▇ ▇▇▇▇;
Pension Schemes means Prospect Industries 1995 Pension Scheme and Prospect
Industries Pension
Plan;
PA No. 2 means Pike Acquisition No. 2 Limited whose registered office is c/o
Pipework Engineering Developments of ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇;
PA No. 3 means Pike Acquisition No. 3 Limited whose registered office is c/o
Pipework Engineering Limited of ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇;
Preferential Deed of Indemnity means the deed of indemnity from the Purchaser to
the Vendor and PEL relating to the preferential creditors of the Vendor and PEL;
Property means the land and buildings at Stores Road, Derby being part freehold
and registered at HM Land Registry under title no. DY117067 and part leasehold
and held by the Vendor under the Leases together with all fixtures and fittings;
Prospect Industries Money Purchase means Prospect Industries Money Purchase
Pensions Limited whose registered office is at ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇, further details of which are set out in Part 6 of Schedule 1;
Prospect Industries Overseas means Prospect Industries Overseas Limited whose
registered office is at Stores Road, aforesaid, further details of which are set
out in Part 2 of Schedule 1;
Prospect Industries Pensions means Prospect Industries Pension Limited, whose
registered office is at ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇, details of
which are set out in Part 5 of Schedule 1;
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Purchaser's Group means the Purchaser, any holding company from time to time of
the Purchaser and any subsidiary from time to time of the Purchaser or any such
holding company (with holding company and subsidiary being construed in
accordance with section 736 of the Companies Act 1985);
security interest means any security interest of any nature whatsoever
including, without limitation, any mortgage, charge, pledge, lien, assignment by
way of security or other encumbrance;
Shares means all of the issued shares in ▇▇▇▇▇ Australia (the ▇▇▇▇▇ Shares),
Prospect Industries Pensions (Pensions Shares), Prospect Industries Money
Purchase (Money Purchase Shares), Prospect Industries Overseas Limited (the
Prospect Shares), the ▇▇▇ ▇▇▇▇▇▇▇ "▇" issued shares in Inflo (Inflo Shares)
which are legally and beneficially owned by, in the case of the Pensions Shares,
Money Purchase Shares and the Prospect Shares, the Vendor and, in the case of
the ▇▇▇▇▇ Shares, PEL;
Stock means raw materials and work-in progress (including unbilled receivables)
associated with contracts or other agreements or arrangements of the Business;
Sundry Debtors means accounts receivable in connection with the non-trading
activities of PEL at the date of Completion or which have or will become due
thereafter by or in respect of non-trading activities including prepayments, VAT
input recovery and other debit balances;
Tender Offers means all rights of PEL in and to any tender offer issued by PEL
including any such tender offers which are subsequently converted into a binding
agreement or arrangement;
Trade Debtors means amounts receivable in connection with the trading activities
of PEL at the date of Completion or which have or will become due thereafter by
or in respect of trade debtors including work-in-progress and unbilled
receivables and inter-company indebtedness incurred in the course of the
business of PEL by other members of the Vendor's Group;
Transfers means the assignments or transfers of the Property by the Vendors
under this Agreement in the agreed form;
Vendor's Group means the Vendor, any holding company from time to time of the
Vendor and any subsidiary from time to time of the Vendor or any such holding
company (with holding company and subsidiary being construed in accordance with
section 736 of the Companies Act 1985);
Warranties means the representations and warranties set out in Schedule 6.
1.2 In this Agreement:
(a) the headings are inserted for convenience only and shall not affect the
construction of this Agreement;
(b) any statement qualified by the expression to the best knowledge of the
Vendor or so far as the Vendor is aware or any similar expression shall be
deemed to include an additional statement that it has been made after due
and careful enquiry;
(c) any reference to a document in the agreed form is to the form of the
relevant document agreed between the parties and initialled for the
purpose of identification.
SALE OF THE SHARES AND PRICE
2.1 The Vendor shall sell or procure the sale of the Pensions Shares, the Money
Purchase Shares, the Prospect Shares and the Inflo Shares and PEL shall sell or
procure the sale of the ▇▇▇▇▇ Shares and the Assets and the Purchaser shall
purchase or procure the purchase, of the Shares and the Assets, on the terms
that the same covenants shall be deemed to be given by the Vendor (in relation
to the Pensions
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Shares, the Money Purchase Shares, the Prospect Shares and the Inflo Shares), by
PEL (in relation to the Assets and the ▇▇▇▇▇ Shares) on Completion as are
implied under Part I of the LPMPA where a disposition is expressed to be made
with full title guarantee. The Shares and the Assets shall be sold free from all
security interests, options, equities, claims or other third party rights
(including, in the case of the Shares, rights of pre-emption) of any nature
whatsoever, together with all rights attaching to them.
2.2 The total price payable by the Purchaser to the Vendor and PEL for the
Shares and the Assets shall be the sum of (pound)9,362,225. The apportionment of
the consideration between the Shares and the respective assets comprised in the
Assets shall be as set out in Schedule 4 to this Agreement.
2.3 If any payment is made by the Vendor to the Purchaser under or in respect of
any breach of this Agreement (including, without limitation, any claim, the
payment shall so far as possible be treated as a reduction in the price paid for
the Shares and thereafter as a reduction in the price paid for the property.
2.4 Save as expressly contemplated by this Agreement, neither the Purchaser nor
any member of the Purchaser's Group shall acquire any Excluded Asset or, in
accordance with Clause 12, any debt, liability or obligations of any nature
whatsoever of any member of the Vendor's Group.
CONDITION PRECEDENT
3.1 Completion of the sale and purchase of the Shares and the Assets shall be
conditional upon the Vendor having delivered to the Purchaser the Deed of
Release relating to intra group indebtedness duly executed by the Vendor and the
other members of the Vendor's Group.
3.2 The Vendor undertakes to use all reasonable endeavours to ensure that the
Condition Precedent set out in clause 3.1 is fulfilled as soon as reasonably
practicable and in any event by no later than midnight on Friday 14 November
1997.
3.3 If the Condition Precedent set out in clause 3.1 has not been fulfilled on
or before the date specified in clause 3.2, this Agreement (other than clause
20) shall automatically terminate and no party shall have any claim of any
nature whatsoever against the other part under this Agreement (save in respect
of its accrued rights arising from any prior breach of this Agreement).
3.4 The Purchaser reserves the right upon written notice to the Vendor to waive
to such extent as it may think fit compliance with the Condition Precedent set
out in clause 3.1 but without prejudice to any other rights the Purchaser may
have under this Agreement.
COMPLETION
4.1 The sale and purchase of the Shares and the Assets shall be completed as
soon as practicable after the fulfilment of the Condition Precedent set out in
clause 3.1 and at a time and date mutually agreed between the Vendor and the
Purchaser, but in any event no later than midnight on Friday, 14 November 1997.
Completion shall take place at a location nominated by the Purchaser in
Amsterdam. The events referred to in the following provisions of this clause 4
shall take place on Completion.
4.2 At Completion, the Vendor shall deliver (or take steps to be delivered) to
the Purchaser or such person or persons as the Purchaser may direct (being one
or more wholly owned subsidiaries of the Purchaser):
(a) duly executed transfers into the name of the Purchaser or its nominees in
respect of all of the Shares, together with the relative share
certificates (if available);
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(b) the Certificate or Articles of Incorporation, as the case may be, Common
Seal, Share Register and Share Certificate Books (with any unissued share
certificates), all minute books and other statutory books of the Companies
and the Pensions Companies;
(c) the Deed of Release over the assets and shares in ▇▇▇▇▇ Australia being
sold by PEL and the Deed of Release releasing the US companies from their
guarantees and releasing the US security agreement all in the agreed form
and in each case duly executed as a deed by the Bank;
(d) (i) executed and completed transfers of the Property; and (ii) duly
executed Form(s) 53, and deeds of release (as appropriate) in relation to
the Property held under the Leases and in relation to the freehold land
registered at HM Land Registry under title number DY117067 in the agreed
form) together with all deeds and documents of title relating thereto;
(e) the Assignments of Trade Marks in the agreed form duly executed by the
Vendor;
(f) possession of those of the Assets which are tangible assets.
4.3 At Completion, the Purchaser will deliver to the Vendor (or such person as
the Vendor may direct):
(a) the Deed of Indemnity relating to Preference Debts duly executed by the
Purchaser;
(b) the Deed of Indemnity in favour of the Bank in the agreed form; and
(c) the Preferential Deed of Indemnity.
4.4 The Purchaser shall in satisfaction of its obligations under clause 2.2,
release to the order of the Bank's Solicitors the sum of (pound)9,362,225 which
was paid by electronic funds transfer from the Purchaser's Solicitors to the
Bank's Solicitor's Client Account on Thursday 13 November 1997.
Any payment made in accordance with clause 4.7 shall constitute a good discharge
for the Purchaser of its obligations under clause 2.2 and the Purchaser shall
not be concerned to see that the funds are applied in payment to the Vendor or
the Bank.
TITLE AND SUPPLEMENTARY PROVISIONS
5.1 Beneficial ownership and risk in respect of the Assets shall pass to the
Purchaser on Completion. Title to all Assets which are capable of transfer by
delivery shall pass on delivery and such delivery shall be deemed to take place
at the Property on Completion. Subject to the provisions of clauses 5.2 and 5.3,
PEL shall be a trustee for the Purchaser in respect of all the Assets until the
same shall have been actually delivered and/or, in the case of Assets not
capable of transfer by delivery, formally transferred or assigned to the
Purchaser.
5.2 Insofar as Contracts which cannot effectively be assigned or transferred by
PEL to the Purchaser, or such other person as the Purchaser may direct, except
by agreements of novation or without obtaining a consent, an approval, a waiver
or the like from a third party (Consents):
(a) PEL shall (upon the request of the Purchaser) take all reasonable steps to
procure that such Contracts are novated or the necessary Consents obtained
and the Purchaser shall co-operate with the Vendor for such purpose and
reimburse the Purchaser's reasonable out-of-pocket expenses;
(b) unless or until any such Contract is so novated or assigned or any
necessary Consent is obtained, PEL shall receive and hold the benefit of
the relevant Contract as agent for the Purchaser and shall accordingly pay
to the Purchaser promptly upon receipt any sums received by it under any
such Contract;
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(c) the Purchaser shall (at the Purchaser's cost) assist the Vendor to perform
all the obligations of the Vendor under any such Contracts;
(d) in the case of Intellectual Property Licences, the Vendor and the
Purchaser shall (where necessary) have discussions with a view to
establishing by mutual agreement (and the agreement of relevant third
parties) the identity of those Intellectual Property Licences where a
sub-licence is to be granted and/or those where a further licence is to be
granted to the Purchaser and/or those which are to be novated or otherwise
assigned (subject, where appropriate, to existing licences) to the
Purchaser.
5.2 PEL shall with all due diligence execute or cause the execution of such
other documents and take such other steps as may reasonably be required by the
Purchaser to vest the title to the Assets in the Purchaser or such person as the
Purchaser may direct and to give effect to this Agreement.
INTELLECTUAL PROPERTY RIGHTS
6.1 The provisions of this clause 6 shall operate with effect from Completion in
relation to Intellectual Property Rights used or held in relation to the
Business.
6.2 The Vendor shall procure that all Intellectual Property Rights used or held
in relation to the Business are assigned or transferred to the Purchaser such
other person as the Purchaser may direct pursuant to clause 4.
EMPLOYEES
7.1 The parties acknowledge and agree that the sale of the Assets is a "relevant
transfer" within the meaning of the Transfer of Undertakings (Protection of
Employment) Regulations 1981 and the contracts of employment between the Vendor
and PEL with the Employees will have effect after Completion as if originally
made between the Purchaser and the Employees.
7.2 The Purchaser shall indemnify the Vendor and PEL in respect of any loss
suffered by either of them as a result of any claims made against either of them
by an Employee after Completion in respect of any changes to the terms and
conditions of employment made by the Purchaser in relation to such Employee and
in respect of redundancy, unfair dismissal and any other claim by an Employee
whatsoever.
POST-COMPLETION UNDERTAKINGS
8.1 The Vendor shall procure that
(i) within 5 working days after Completion, the name of any member of the
Vendor's Group shall, where relevant, be changed so as to omit the word
"Prospect", "▇▇▇▇▇", "Greenbank" or "▇▇▇▇" any confusingly similar word or
name; and
(ii) as soon as reasonably practicable after Completion and in any event within
5 working days afterwards, the Vendor's Group shall cease in any manner
whatsoever to use or display any trade or service marks, trade or service
names, registered designs or logos used or held by the Business or any
confusingly similar ▇▇▇▇, design, name or logo.
8.2 The Vendor shall not and shall procure that each member of the Vendor's
Group shall not purport to assign the right to use the names "Prospect",
"▇▇▇▇▇", "Greenbank" or "▇▇▇▇".
8.3 The Vendor shall procure that resolution of the Board of Directors of ▇▇▇▇▇
Australia are passed by which the registration (subject to their being duly
stamped) of the transfers in respect of the shares in ▇▇▇▇▇ Australia comprised
in the Shares referred to in clause 4.2 is approved.
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WARRANTIES
9.1 Each of the Vendor and Holdings, as applicable, represents and warrants to
the Purchaser in the terms of the Warranties and acknowledges that the Purchaser
has entered into this Agreement in reliance upon the Warranties.
9.2 The Vendor agrees to waive the benefit of all rights (if any) which the
Vendor may have against the Companies or the Pensions Companies or any present
or former officer or employee of those companies, on whom the Vendor may have
relied in agreeing to any term of this Agreement or against the Assets or the
Shares and the Vendor undertakes not to make any claim in respect of such
reliance.
9.3 Each of the Warranties shall be construed as a separate Warranty and (save
as expressly provided to the contrary) shall not be limited or restricted by
reference to or inference from the terms of any other Warranty or any other term
of this Agreement.
9.4 The rights and remedies of the Purchaser in respect of the Warranties shall
not be affected by (i) Completion (ii) any investigation made into the affairs
of the Companies or investigation in relation to the Assets or any knowledge
held or gained of any such matters by or on behalf of the Purchaser or (iii) any
event or matter whatsoever, other than a specific and duly authorised written
waiver or release by the Purchaser.
9.5 The Purchaser undertakes to the Vendor that there are no circumstances
within the actual knowledge of the Purchaser which would entitle the Purchaser
to make a claim under the Warranties immediately after Completion and insofar as
there are any such circumstances the Purchaser will not be entitled to make a
claim under the Warranties in respect thereof.
LIMITATIONS ON CLAIMS
10.1 The Vendor shall not be liable for any claim for breach of any of the
Warranties unless it receives from the Purchaser written notice containing
details of the claim (or potential claim where a claim is in respect of a
contingent liability) before the third anniversary of Completion.
10.2 The aggregate amount of the liability of the Vendor for all claims for
breach of any of the warranties shall not exceed (pound)9,362,225.
10.3 None of the limitations contained in clauses 10.1 and 10.2 shall apply to
any breach of any Warranty which (or the delay in discovery of which) is the
consequence of dishonest, deliberate or reckless mis-statement, concealment or
other conduct by any member of the Vendor's Group or any officer or employee, or
former officer or employee, of any member of the Vendor's Group.
PENSION SCHEMES
11.1 Subject to 11.4 and to the consent of the Commissioners of Inland Revenue
and the Contributions Agency of the Department of Social Security and the
current trustees of the Pension Schemes (together the Consents), the Vendor
shall use its best endeavours to procure that (i) the Vendor is, with effect
from Completion, replaced as principal employer for the purposes of the Pension
Schemes by the Purchaser, and (ii) the Purchaser is permitted to participate in
the Pension Schemes with effect from Completion.
11.2 The Vendor shall assist the Purchaser to obtain the Consents to the change
in principal employers envisaged in clause 11.1.
11.3 Subject to 11.4 and to the obtaining of the consent of the current trustees
of the Pension Schemes, without prejudice to the generality of clause 11.1, the
Vendor shall deliver to the Purchaser
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(a) on or before Completion, deeds in the form set out in Schedule 7, each
duly executed as deeds by the Vendor and the current trustees of the
Pension Schemes.
(b) as soon as practicable after Completion, the originals of all deeds
documents and records relating to the Pension Schemes as agreed between
the Vendor and Purchaser.
11.4 The Purchaser shall on or before Completion deliver to the Vendor the
letter relating to winding-up the Pension Scheme in the form agreed and set out
in Schedule 8.
LIABILITIES
12. Save as expressly contemplated by this Agreement, nothing in this Agreement
shall make the Purchaser assume any liability or indebtedness or any other
obligation and/or arrangement of any nature whatsoever (including the burden of
the contracts or under purchase orders), whether contractually or otherwise of
the Vendor or any member of the Vendor's Group, including, without limitation,
any liability for:
(a) any indebtedness of the Vendor or any member of the Vendor's Group
outstanding at the close of business on the date of Completion; or
(b) any breach of contract, negligence, breach of duty or other circumstance
giving rise to liability to any third party which is attributable to any
act, neglect or default of the Vendor or of PEL in relation to the
Business prior to the close of business on the date of Completion,
and the Vendor shall indemnify the Purchaser and any member of the Purchaser's
Group against any liability which the Purchaser or a member of the Purchaser's
Group may incur in respect of any such indebtedness or as a result of any such
act, neglect or default (and all costs reasonably incurred by the Purchaser or
any member of the Purchaser's Group in connection therewith).
The Purchaser will indemnify PEL against all actions, proceedings, costs,
damages and claims in respect of any act or omission on the part of the
Purchaser in relation to the Assets after completion.
VAT
13.1 The parties shall use all reasonable efforts to ensure that the transfer of
the Assets is treated as a transfer of a business as a going concern for the
purposes of section 49(1) of the Value Added Tax ▇▇▇ ▇▇▇▇ (the "VATA 1994") and
article 5 of the Value Added Tax (Special Provisions) Order 1995, including the
making by the Purchaser of any election to waive exemption that may be required
for this purpose, and PEL shall and the Purchaser shall give notice of such
transfer to H.M. Customs & Excise as required by paragraph 11 of Schedule 1 to
VATA 1994 or by paragraph 5 of the VAT Regulations or as otherwise required by
law. If the transfer of the Assets is not so treated as a transfer of a business
as a going concern, the Purchaser shall pay VAT pursuant to a VAT invoice which
shall be submitted by PEL and shall reimburse to PEL any penalties and interest
arising in connection therewith but only to the extent that such penalties and
interests are attributable to any delay or default on the part of the Purchaser.
13.2 PEL shall on Completion deliver to the Purchaser of all the records of the
Business referred to in section 49 of the VATA 1994 which are required to be
preserved by the Purchaser and the Purchaser hereby undertakes to PEL to
preserve such records for not less than six years from Completion and to make
such records available to PEL or its agents upon reasonable prior notice during
normal working hours.
13.3 PEL warrants that its VAT registration in terms of Schedule 1 to the VATA
1994 has not been cancelled. The parties undertake to jointly approach H.M.
Customs & Excise as soon as reasonably practical after the transfer of the
business, but in any event within 30 days after the date of transfer of
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the business, and to apply for PEL's registration to be cancelled as from the
date of the transfer and for the Purchaser to take over PEL's VAT registration
number. The parties hereby record and agree that all the consequences of the
re-allocation of the VAT registration number which are set out in VAT Form 68
are legally binding (including, without detracting from the generality of the
consequences listed there, specifically any right of PEL, whether or not
existing at the date of the transfer, to credit for input tax that will be
recoverable on professional legal services supplied to PEL in connection with
its business before the transfer of the Business as a going concern).
RIGHTS OF ADMINISTRATIVE RECEIVERS
14. In this Clause:
14.1 Administrative Receivers means those individuals appointed by the Bank as
administrative receivers of the Vendor, PEL and any other company in the
Vendor's Group;
14.2 The Purchaser shall allow the Administrative Receivers and their
representatives and agents such facilities as may be reasonably required at any
premises occupied by the Purchaser, PA No.2 or PA No.3 or any subsidiary of the
Purchaser as an administrative office in the United Kingdom free of charge to
complete their receivership duties in relation to the Vendor, PEL and any
company in the Vendor's Group to which they have been appointed, including the
reasonable use free of charge of an office, external telephone and suitable
office furniture and reasonable access to personnel.
14.3 The Purchaser shall allow the Vendor, PEL and any other company in the
Vendor's Group and their Administrative Receivers, their representatives and
agents reasonable access (without cost to either the Vendor, and/or PEL, and/or
the Vendor's Group and/or the Administrative Receivers) to the staff, computer
generated information and books and records of the Vendor, PEL and any company
in the Vendor's Group to assist the Administrative Receivers to agree and settle
the preferential claims against the Vendor, PEL and any company in the Vendor's
Group and to assist the Vendor, PEL and any company the Vendor's Group in the
realisation of such assets they have (excluding any assets sold thereunder).
14.4 After a date three months after the appointment of any Administrative
Receiver, such Administrative Receiver shall give at least one business day's
notice of the Administrative Receivers intention to exercise their rights under
Clause 14.2 and 14.3.
ENTIRE AGREEMENT
15. This Agreement sets out the entire agreement and understanding between the
parties in respect of the sale and purchase of the Shares and the Assets. This
Agreement supersedes any Memoranda of Understanding entered into between the
Vendor and the Purchaser which shall cease to have any further force or effect.
It is agreed that:
(a) no party has entered into this Agreement in reliance upon any
representation, warranty or undertaking of any other party which is not
expressly set out or referred to in this Agreement;
(b) no party shall have no claim or remedy under this Agreement in respect of
misrepresentation (whether negligent or otherwise, and whether made prior
to, and/or in, this Agreement) or untrue statement made by any other
party;
(c) this clause shall not exclude any liability for fraudulent
misrepresentation.
VARIATION
16. No variation of this Agreement (or any document entered into pursuant to
this Agreement) shall be valid unless it is in writing and signed by or on
behalf of each of the parties hereto.
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ASSIGNMENT
17. No party shall be entitled to assign the benefit of any provision of this
Agreement without the prior written consent of any other party provided,
however, that (a) the Purchaser may assign all or any part of its rights
hereunder to one or more wholly owned subsidiaries but shall not be released
thereby from any of its obligations hereunder and (b) the Vendor may assign the
benefit of this Agreement to the Bank by way of security.
ANNOUNCEMENT
18. No announcement or circular in connection with the existence or the subject
matter of this Agreement shall be made or issued by or on behalf of the Vendor
or the Purchaser without the prior written approval of the other, (such approval
not to be unreasonably withheld or delayed). This shall not affect any
announcement or circular required by law or the rules of any stock exchange.
COSTS
19. Each of the parties shall pay its own Costs incurred in connection with the
negotiation, preparation and implementation of this Agreement.
INVALIDITY
20. If any provision of this Agreement is held to be invalid or unenforceable,
then such provision shall (so far as it is invalid or unenforceable) be given no
effect and shall be deemed not to be included in this Agreement but without
invalidating any of the remaining provisions of this Agreement.
FURTHER ASSURANCE
21. The Vendor shall do or procure to be done all such further acts and things,
and execute or procure the execution of all such other documents, as the
Purchaser may from time to time reasonably require, whether on or after
Completion, for the purpose of giving to the Purchaser the full benefit of all
of the provisions of this Agreement.
NOTICES
21.1 Any notice under this Agreement shall be in writing and signed by or on
behalf of the party giving it and may be served by leaving it or sending it by
fax, prepaid recorded delivery or registered post to the address and for the
attention of the relevant party set out in clause 22.2 (or as otherwise notified
from time to time hereunder). Any notice so served by fax or post shall be
deemed to have been received:
(a) in the case of fax, twelve (12) hours after the time of despatch;
(b) in the case of recorded delivery or registered post, forty eight (48)
hours from the date of posting.
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22.2 The addresses of the parties for the purpose of clause 22.1 are as
follows:
The Vendor:
For the attention of: The Finance Director
Fax: 01332 293362
PEL
For the attention of: The Finance Director
Fax: 01332 293362
▇▇▇▇:
For the attention of: The Finance Director
Fax: 01332 293362
The Purchaser:
For the attention of: The Chief Financial Officer
Fax: 001 504 296 1192
COUNTERPARTS
23. This Agreement may be entered into in any number of counterparts and by the
parties to it on separate counterparts, each of which, when executed and
delivered, shall be an original, but all the counterparts shall together
constitute one and the same instrument.
GOVERNING LAW
24. This Agreement is governed by and shall be construed in accordance with the
laws of England.
JURISDICTION
25. Each of the parties irrevocably submits to the exclusive jurisdiction of the
Courts of England.
AGENT FOR SERVICE OF PROCESS
26. The Purchaser shall at all times maintain an agent for service of process
and any other documents in proceedings in England or any other proceedings in
connection with the Agreement. Such agent shall be the registered office of
Pipework Engineering Developments Limited of ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ and any writ, judgment or other notice of legal process
shall be sufficiently served on the Purchaser if delivered to such agent at its
address for the time being. The Purchaser undertakes not to revoke the authority
of the above agent and if, for any reason, the Vendor requests the Purchaser to
do so, it shall promptly appoint another such agent with an address in England
and advise the Vendor thereof. If following such a request the Purchaser fails
to appoint another agent, the Vendor shall be entitled to appoint one on behalf
of the Purchaser.
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AS WITNESS this Agreement has been signed on behalf of the parties the day
and year first before written.
SIGNED by ▇.▇. ▇▇▇▇▇▇▇▇▇)
for and on behalf of)
PROSPECT INDUSTRIES PLC) ▇.▇. ▇▇▇▇▇▇▇▇▇
in the presence of:)
▇. ▇▇▇▇▇▇
Solicitor
Leeds
SIGNED by ▇.▇. ▇▇▇▇▇)
for and on behalf of)
PROSPECT ENGINEERING) ▇.▇. ▇▇▇▇▇
LIMITED in the presence of:)
▇. ▇▇▇▇▇▇
Solicitor
Leeds
SIGNED by ▇.▇. ▇▇▇▇▇▇▇▇▇)
for and on behalf of)
▇▇▇▇ INTERNATIONAL) ▇.▇. ▇▇▇▇▇▇▇▇▇
LIMITED in the presence of:)
▇. ▇▇▇▇▇▇
Solicitor
Leeds
SIGNED by ▇.▇. ▇▇▇▇▇▇▇▇, ▇▇.)
the duly authorised Secretary and)
General Counsel of)
THE ▇▇▇▇ GROUP INC.) ▇.▇. ▇▇▇▇▇▇▇▇, ▇▇.
in the presence of:)
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
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