EXHIBIT 2.1
DATED 21 MARCH 2003
(1) DDL EUROPE LIMITED
(2) ALINA LIMITED
(3) SMTEK INTERNATIONAL INC
__________________________________
SHARE SALE AGREEMENT
for all the issued share capital of
SMTEK Europe Limited
_________________________________
INDEX
CLAUSE SUBJECT PAGE
1. Interpretation
2. Sale of Shares
3. Consideration
4. Conditions
5. Completion
6. Restrictive Covenants given by Vendor's Group
7. Warranties
8. Not Used
9. [Not Used]
10. Confidentiality
11. Announcements
12. Guarantee
13. Provisions Relating to this Agreement
14. Law and Jurisdiction
SCHEDULE
1. Part I - Details of the Company
Part II - Not Used
2. Not Used
3. Not Used
4. Not Used
5. Particulars of the Property
6. Non-Taxation Warranties
7. Taxation Warranties
8. Completion Arrangements
9. Vendor Protection
10. Not Used
THIS AGREEMENT is dated 21 March 2003
PARTIES:
(1) DDL EUROPE LIMITED a company registered in Northern Ireland with
number ? whose registered office is at ▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇
▇▇▇ (the "Vendor");
(2) ALINA LIMITED a company registered in Northern Ireland] with number
NI45402 whose registered office is at Marlborough House, 30 Victoria
Street, Belfast, BT1 13GS (the "Purchaser"); and
(3) SMTEK INTERNATIONAL INC a company registered in Delaware with
number whose office is at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇-▇▇▇▇ (the "Guarantor").
INTRODUCTION:
(A) The Vendor wishes to sell and the Purchaser wishes to acquire the
entire issued share capital of SMTEK Europe Limited upon and subject to
the terms of this Agreement.
(B) The Guarantor joins to this Agreement to guarantee the obligations
of the Seller hereunder.
IT IS AGREED as follows:
1. INTERPRETATION
1.1 Definitions
In this Agreement where the context admits:
"Affiliate" means, in respect of any body corporate, a body
corporate which is its subsidiary or holding company, or a company
which is a subsidiary of that holding company, and each such company;
"Associate" means any person with whom the Vendor is or may be
connected or any person for whom the Vendor may be a personal
representative;
"Audited Accounts" means the audited balance sheet of the Company
made up as at the Balance Sheet Date and the audited profit and loss
account of the Company in respect of the financial year ending on the
Balance Sheet Date including, in each case, the notes thereto and the
directors' report and auditors' report;
"Auditors" means KPMG, ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇;
"Balance Sheet Date" means 30 June 2002;
"Business Day" means a day (other than a Saturday or Sunday) on
which banks are open for business in Belfast;
"Company" means SMTEK Europe Limited details of which are given
in Schedule 1 (Details of the Company);
"Companies Order" means the Companies (Northern Ireland) Order
1986;
"Companies Orders" means statutes from time to time in force in
Northern Ireland concerning companies including (without limitation)
the Companies (Northern Ireland) Order 1986, the Companies
Consolidation (Consequential Provisions) (Northern Ireland) Order 1986,
the Companies (Northern Ireland) Order 1989, the Insolvency (Northern
Ireland) Order 1989, the Companies (Northern Ireland) Order 1990, the
Companies (No. 2) (Northern Ireland) Order 1990, the Companies (Single
Member Private Limited Companies) Regulations (Northern Ireland) 1992,
the Criminal Justice ▇▇▇ ▇▇▇▇ Parts V and VII, the Partnerships and
Unlimited Companies (Accounts) Regulations (Northern Ireland) 1994 and
the Public Offers of Securities Regulations 1995;
"Completion" means completion of the sale and purchase of the
Sale Shares in accordance with Clause 5 (Completion);
"Completion Date" means the day Completion takes place;
"Conditions" means the conditions contained in Schedule 4
(Conditions);
"Directors" means the persons named in Schedule 1 (Details of the
Company) as directors of the Company and the "Continuing Directors"
means the persons named in the Schedule as continuing directors
following Completion;
"Disclosure Letter" means the letter in agreed terms dated the
date of this Agreement from or on behalf of the Vendor to the
Purchaser;
"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 or other
security agreement or arrangement or a rental, hire purchase, credit
sale or other agreement for payment on deferred terms;
"INI Grant" means the financial assistance granted to the Company
(formerly known as DDL Electronics Limited) by Invest Northern Ireland
(formerly known as the Department of Enterprise, Trade and Investment
and also the Department of Economic Development) under the terms of a
financial assistance agreement dated 7 April 1999 and a supplemental
agreement dated 3 September 2001.
"Management Accounts" means the management accounts of the
Company for the period from the Balance Sheet Date to 21 February 2003;
"Name Licence Agreement" means an agreement in agreed terms as
set out in Schedule 11;
"Property" means the property particulars of which are set out in
Schedule 5 (Particulars of Property);
"Purchaser's Group" means the Purchaser and each of its
Affiliates (if any);
"Purchaser's Solicitors" means Tughans of Marlborough House, ▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇;
"Restricted Business" has the meaning given in Sub-Clause 6.1
(Restricted Business);
"Sale Shares" means 2,550,000 ordinary shares of 1 pound each to
be bought and sold pursuant to Clause 2.1 (Sale and Purchase) being all
the issued shares in the capital of the Company;
"Subsidiaries" means the bodies corporate, details of which are
set out in Schedule 2 (The Subsidiaries);
"TA" means the Income and Corporation Taxes ▇▇▇ ▇▇▇▇;
"Tax Deed" means the deed of indemnity in agreed terms relating
to taxation, to be executed and delivered at Completion;
"Vendor's Group" means the Vendor and each of its Affiliates
other than the Company;
"Vendor's Solicitors" means ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ of ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇;
"Warranties" means the warranties and representations set out in
Paragraph 2 of Schedule 6 (Non-Taxation Warranties), and in Paragraph 2
of Schedule 7 (Taxation Warranties) given and made by the Vendor in
favour of the Purchaser.
1.2 Contents Page and Headings
In this Agreement the contents page and headings are included for
convenience only and shall not affect the interpretation or
construction of this Agreement.
1.3 Meaning of References
In this Agreement, where the context admits:
(A) references to a party or the parties is to a party or the parties
(as the case may be) to this Agreement;
(B) words and phrases the definitions of which are contained or
referred to in Part I of the Companies (Northern Ireland) Order 1986
shall be construed as having the meanings thereby attributed to them;
(C) 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);
(D) where any statement is qualified by the expression 'so far as the
Vendor is aware' or 'to the best of the Vendor's knowledge and belief'
or any similar expression, that statement shall be deemed to include an
additional statement that it has been made after due and careful
enquiry provided that the Vendor shall only be deemed to have the same
knowledge as the Purchaser, or the continuing Director strictly in so
far as the Vendor or the Guarantor has not done anything whatsoever in
relation to the Company without actual knowledge of the Purchaser or
theContinuing Director;
(E) 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 of
the Clause or paragraphs of the Schedule in which the reference
appears, and references to this Agreement include the Schedules;
(F) 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;
(G) any Northern Irish statutory provision or Northern Irish legal term
for any action, remedy, method of judicial proceedings, document, legal
status, court, official or any other legal concept or thing shall in
respect of any jurisdiction other than Northern Ireland be deemed to
include what most nearly approximates in that jurisdiction to the
Northern Irish statutory provision or Northern Irish legal term;
(H) a person shall be deemed to be connected with another if that
person is connected with another within the meaning of Section 839 TA;
(I) writing shall include any modes of reproducing words in a legible
and non-transitory form;
(J) any reference to "indemnity" and to "indemnifying" any person
against any circumstance includes indemnifying and keeping him harmless
from all demands, actions, claims and proceedings from time to time
made or brought against that person and all loss or damage and all
payments, costs or expenses or liabilities from time to time made,
suffered or incurred by that person as a direct or indirect consequence
of or which would not have arisen but for that circumstances;
(K) "Sterling" or "pounds" is to the lawful currency of the United
Kingdom;
(L) references to the masculine, feminine or neuter gender
respectively includes the other genders and any reference to the
singular includes the plural (and vice versa);
1.4 Headings
The headings and sub-headings are inserted for convenience only and
shall not affect the construction of this Agreement.
1.5 Schedules
Each of the Schedules shall have effect as if set out herein.
1.6 Words Defined in Related Documents
Words and expressions defined in the Disclosure Letter and Tax Deed but
not in this Agreement shall have the same meaning in this Agreement as
in the Disclosure Letter and the Tax Deed (as appropriate).
2. SALE OF SHARES
2.1 Sale and Purchase
Subject to the terms of this Agreement, the Vendor as beneficial owner
shall sell and the Purchaser relying on the Warranties and the other
obligations of the Vendor under this Agreement shall purchase the Sale
Shares. The Vendor agrees that the Sale Shares shall be free from all
claims, liens, charges and encumbrances and shall be sold with all
rights now or hereafter attaching thereto with effect from Completion.
2.2 No Sale of Part Only
Neither the Vendor nor the Purchaser shall be obliged to complete the
purchase of any of the Sale Shares unless the purchase of all the Sale
Shares is completed simultaneously.
2.3 Purchaser Entitled to Rights Accruing to Shares
With effect from the Completion Date the Purchaser shall be entitled to
exercise all rights attached or accruing to the Shares including,
without limitation, the right to receive all dividends, distributions
or any return of capital declared, paid or made by the Company on or
after Completion.
3. CONSIDERATION
Total Purchase Price
3.1 The total price for the Sale Shares shall be the sum of $1, which
shall be payable to the Vendor in cash on Completion.
4. CONDITIONS
4.1 The sale and purchase of the Sale Shares is conditional upon the
Conditions and in the event that the Conditions (or any of them) shall
not have been satisfied on or before 28 March 2003 this Agreement
shall lapse and no party shall make any claim against any other in
respect thereof unless the Vendor shall consent to a request by the
Purchaser that the Agreement shall not lapse in which case the Vendor
shall confirm a later date at which the provisions of this Clause 4.1
shall apply.
5. COMPLETION
5.1 Date and Place of Completion
Completion shall take place on or before 28 March 2003 subject to the
provisions of Clause 4.1 at the offices of the Vendor's Solicitors.
5.2 Completion Arrangements
At Completion the Vendor and the Purchaser shall do those things listed
in Schedule 8 (Completion Arrangements).
5.3 Not Used
6. RESTRICTIVE COVENANTS GIVEN BY VENDOR'S GROUP AND COVENANT BY THE
PURCHASER
6.1 Restricted Business
In this Clause, 'Restricted Business' means (a) in relation to the
Vendor any business activity within the United Kingdom and Ireland and
which directly or indirectly competes with the business of the Company
carried on at the date of this Agreement and (b) in relation to the
Purchaser any business activity outside the United Kingdom and Ireland
and which directly competes with the business of the Vendor's Group
(other than the Company) carried on at the date of this Agreement.
6.2 Restrictive Covenants
6.2.1 The Vendor undertakes with the Purchaser for itself and its
successors in title that it will not and that it will procure that none
of its Affiliates will:
(A) for the period of 1 year after the date of this Agreement,
either on its own account or in conjunction with or on behalf of any
person, firm or company, carry on or be engaged, concerned or
interested (directly or indirectly and whether as principal,
shareholder, director, employee, agent, consultant, partner or
otherwise) in establishing a presence in the United Kingdom or Ireland
in relation to the Restricted Business;;
(B) for the period of 2 years after the date of this Agreement,
either on its own account or in conjunction with or on behalf of any
person, firm or company, solicit or endeavour to entice away from the
Company any person who at the date of this Agreement is (or who within
a period of one year prior to the date of this Agreement has been) a
director, officer, manager, employee or servant of the Company whether
or not such person would commit a breach of contract by reason of
leaving service or office;
(C) without the consent of the Purchaser for the period of 2 years
after the date of this Agreement, either on its own account or in
conjunction with or on behalf of any person, firm or company, in
connection with any Restricted Business deal with, solicit the custom
of or endeavour to entice away from the Company any person who at the
date of this Agreement is (or who within a period of two years prior to
the date of this Agreement has been) a customer of the Company whether
or not such person would commit a breach of contract by reason of
transferring business; and
(D) for the period of 2 years after the date of this Agreement,
either on its own account or in conjunction with or on behalf of any
person, firm or company, in connection with any Restricted Business
endeavour to entice away from the Company any person who at the date of
this Agreement is (or who within a period of one year prior to the date
of this Agreement has been) a supplier of the Company whether or not
such person would commit a breach of contract by reason of transferring
business.
6.2.2 The Purchaser undertakes with the Vendor for itself and its
successors in title that it will not and that it will procure that none
of its Affiliates will:
(A) for the period of 2 years after the date of this Agreement,
either on its own account or in conjunction with or on behalf of any
person, firm or company, solicit or endeavour to entice away ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ from the Vendor's Group and
(B) without the consent of the Purchaser such consent not to be
unreasonably withheld for the period of 2 years after the date of this
Agreement, either on its own account or in conjunction with or on
behalf of any person, firm or company, in connection with any
Restricted Business deal with, solicit the custom of or endeavour to
entice away from the Vendor's Group any person who at the date of this
Agreement is (or who within a period of two years prior to the date of
this Agreement has been) a customer of the Vendor's Group whether or
not such person would commit a breach of contract by reason of
transferring business.
6.3 Vendor and Purchaser to Procure Compliance
The Vendor and the Purchaser each undertakes to the other take all such
steps as shall from time to time be necessary to ensure compliance with
the terms of Sub-Clause 6.2 above by employees and agents of (a) the
Vendor save for ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ or any of its Affiliates and (b) the
Purchaser or any of its Affiliates respectively.
6.4 Separate Covenants
Each of the undertakings in Sub-Clauses 6.2 and 6.3 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.
6.5 Reasonableness
The Vendor and the Purchaser each agrees that the restrictions and
undertakings contained in Sub-Clauses 6.2 and 6.3 are reasonable and
necessary for the protection of the other's legitimate interests in the
goodwill of the Company and the Vendor's Group respectively, but if 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.
6.6 Void or Unenforceable Restrictions
Without prejudice to Sub-Clause 6.5, 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 effect as
that which it replaces.
6.7 Confidential Information Concerning the Company
The Vendor shall not (without prior written consent) and shall procure
that no other member of the Vendor's Group nor any officer or employee
of the Vendor or any member of the Vendor's Group shall make use of or
divulge to any third party (other than to the Vendor's professional
advisers for the purpose of this Agreement in which case the Vendor
shall use all reasonable endeavours to procure that such advisers keep
such information confidential on terms equivalent to this Clause) any
confidential information relating to the Company save only:
(A) insofar as the same has become public knowledge otherwise than,
directly or indirectly, through the Vendor's breach of this Sub-Clause
6.7 or the failure of the officers, employees or professional advisers
referred to above to keep the same confidential; or
(B) to the extent required by law or by any supervisory or regulatory
body or Court of competent jurisdiction.
7. WARRANTIES
7.1 General
The Vendor hereby warrants and represents to the Purchaser in the terms
of the Warranties and acknowledges and accepts that the Purchaser is
entering into this Agreement in reliance upon each of the Warranties.
7.2 Purchaser's knowledge
The Warranties are given subject to matters fairly disclosed in this
Agreement or in the Disclosure Letter.
7.3 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.
7.4 Vendor protection provisions
The provisions of Schedule 9 shall apply to the Warranties and
Tax Deed.
7.5 Vendor Indemnity
The Vendor hereby undertakes to indemnify and keep indemnified the
Purchaser against any clawback by Invest Northern Ireland of the monies
granted to the Company pursuant to the INI Grant.
7.6 Purchaser's Claim
The Purchaser confirms to the Vendor that it has not formulated nor is
it in the process of formulating any claim for breach of the Warranties
and it is not its intention to make a claim for breach of Warranties
after Completion as a result of any fact or circumstance know to it.
7.7 NOT USED
7.8 Waiver of Claims
The Vendor undertakes to the Purchaser that it will not make or pursue
any claim which it has or may have against the Company, or any of the
Employees (as such term is defined in Schedule 6 (Non-Taxation
Warranties), para 2.11(B)(1)) in respect of or arising out of the
Warranties or any information supplied by them to or on behalf of the
Vendors or its professional advisers or agents on or prior to the date
hereof.
7.9 Any amount paid by the Vendor to the Purchaser in respect of any
of the provisions of this Agreement shall be treated as paid to the
Purchaser by way of pro-rata reduction of the consideration payable for
the Sale Shares.
8. NOT USED
9. NOT USED
10. CONFIDENTIALITY
10.1 Subject to Sub-Clause 10.2 and to Clause 11 and without prejudice
to Sub-Clause 6.7 each party:
(A) shall treat as strictly confidential information obtained or
received by it as a result of entering into or performing its
obligations under this Agreement and relating to the negotiations
concerning, or the provisions or subject matter of, this Agreement or
the other party ("Confidential Information"); and
(B) shall not, except with the prior written consent of the other
party (which shall not be unreasonably withheld or delayed), publish or
otherwise disclose to any person any Confidential Information.
10.2 Permitted Disclosures
Sub-Clause 10.1 shall not apply if and to the extent that the party
proposing to make such disclosure can demonstrate that:
(A) the Confidential Information was lawfully in its possession prior
to its disclosure by the other party (as evidenced by written records)
and had not been obtained from that other party; or
(B) the Confidential Information has come into the public domain
other than through its fault or the fault of any person to whom the
Confidential Information has been disclosed.
10.3 Continuance of Restrictions
The restrictions contained in this Clause on the part of the Vendor
shall survive Completion.
11. ANNOUNCEMENTS
11.1 Restriction
Subject to Sub-Clause 11.2, neither the Vendor 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).
11.2 Permitted Announcements
Sub-Clause 11.1 shall not apply if and to the extent that such
announcement is required by law or by any securities exchange or
regulatory or governmental body having jurisdiction over it (including
the US NASDAQ, London Stock Exchange, The Panel on Take-overs and
Mergers, the Financial Services Authority and 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 consultation with
the other party.
11.3 Continuance of Restrictions
The restrictions contained in this Clause on the part of the Vendor
shall survive Completion.
12. GUARANTEE
12.1 In consideration of the entry of the Purchaser into this
Agreement and the payment by it of 1.00 (one pound) (receipt of which
is hereby acknowledged) the Guarantor hereby unconditionally and
irrevocably guarantees to the Purchaser the due and punctual
performance and observance by the Vendor of its obligations under or
pursuant to this Agreement and the Tax Deed (the "Agreements") and
agrees to indemnify the Purchaser against all losses, liabilities,
costs, charges, expenses, actions, proceedings, claims and demands
which the Purchaser may suffer through or arising from any breach by
the Vendor of such obligations subject to any limits on the liability
of the Vendor in the Agreements.
12.2 If and whenever the Vendor defaults for any reason whatsoever in
the performance of any obligation or liability undertaken or expressed
to be undertaken by the Vendor under or pursuant to the Agreements, the
Guarantor shall upon demand perform (or procure the satisfaction of)
the obligation or liability in regard to which such default has been
made in the manner prescribed by the Agreements and so that the same
benefits shall be conferred on the Purchaser as it would have received
if such obligation or liability had been duly performed and satisfied
by the Vendor in default.
12.3 This guarantee is to be a continuing guarantee and is in addition
to and without prejudice to and not in substitution for any other
rights or security which the Purchaser may now or hereafter have or
hold for the performance and observance of the obligations of the
Vendor under or in connection with the Agreements.
12.4 Not Used
13. PROVISIONS RELATING TO THIS AGREEMENT
13.1 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 (with the prior written consent of the
Vendor, such consent not to be unreasonably withheld, save in respect
of an assignment to any member of the Purchaser's Group where consent
shall not be necessary) assign all or any parts of its rights and
benefits under this Agreement, including the Warranties and any cause
of action arising under or in respect of them, to any transferee of the
share capital of the Company, or to any Affiliate of the Purchaser who
may enforce them as if it had also been named in the Agreement as the
Purchaser.
13.2 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) No variation of this Agreement shall be effective unless made in
writing and signed by each of the parties.
(C) The Purchaser acknowledges that it has not been induced to enter
into this Agreement by an representation, warranty, promise or
assurance by the Vendor 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 representation, warranty, promise or assurance save for
those contained in this Agreement. The Purchaser acknowledges that its
legal advisers have explained to it the effect of this sub clause
13.2(C).
13.3 Agreement Survives Completion
The Warranties and 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.
13.4 Rights etc Cumulative and Other Matters
(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.
(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.
13.5 Not used
13.6 Further Assurance
At any time after the date hereof the Vendor shall, at the request and
cost 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.
13.7 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.
13.8 Payment to Vendor
Any payment failing to be made to the Vendor under any provision of
this Agreement may be made to the Vendor's Solicitors, whose receipt
shall be an absolute discharge.
13.9 Contracts (Rights of Third Parties) ▇▇▇ ▇▇▇▇
No term of this Agreement shall be enforceable by a third party
(whether pursuant to the Contracts (Rights of Third Parties) ▇▇▇ ▇▇▇▇
or otherwise).
13.10 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.
13.11 Costs
Each party shall bear its own costs arising out of or in connection
with the preparation, negotiation and implementation of this Agreement.
13.12 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 Sub-Clause (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 2 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 7 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 08.00 on the next
Business Day.
(B) The addresses and other details of the parties referred to in
Sub-Clause (A) are, subject to Sub-Clause (C):
Name: DDL Europe Limited, c/o SMTEK
International Inc.
[For the attention of:] ▇▇▇▇ ▇▇▇▇▇▇▇
Address: SMTEK International Inc.
Fax number: ▇▇ ▇ ▇▇▇ ▇▇▇▇▇▇▇
(C) Any party to this Agreement may notify the other parties of any
change to its address or other details specified in Sub-Clause (B),
provided that such notification shall be effective only on the date
specified in such notice or 5 Business Days after the notice is given,
whichever is later.
(D) For the avoidance of doubt, Notice given under this Agreement
shall not be validly served if sent by email.
14. LAW AND JURISDICTION
14.1 Northern Irish Law
This Agreement shall be governed by, and construed in accordance
with, Northern Ireland law.
14.2 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 Northern Ireland 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.
SIGNED by ▇▇▇▇ ▇▇▇▇▇▇▇
duly authorised for and on behalf of
DDL EUROPE LIMITED
SIGNED by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
duly authorised for and on behalf of
ALINA LIMITED
SIGNED by ▇▇▇▇ ▇▇▇▇▇▇▇
duly authorised for and on behalf of
SMTEK INTERNATIONAL INC
SCHEDULE 1
DETAILS OF THE COMPANY
Name: SMTEK EUROPE LIMITED
Number: NI 19281
Registered Office: ▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇
▇▇▇
Authorised Capital: 2,550,000 pounds sterling
Issued Capital: 2,550,000 Ordinary Shares of 1.00 pound each
Directors and other directorships: ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇ ▇▇▇▇▇
Secretary: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Accounting Reference Date: 30 June
Auditors: PricewaterhouseCoopers
Continuing Directors: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
SCHEDULE 2
SUBSIDIARIES
None
SCHEDULE 3
NOT USED
SCHEDULE 4
CONDITIONS
1. Consent of Invest Northern Ireland.
2. Consent of Ulster Bank Limited.
3. Release by Ulster Bank Limited of Guarantee given by the Guarantor.
in respect of the liabilities of the Company.
4. Ulster Bank offering facilities to the Company in terms satisfactory
to the Purchaser.
5. Invest Northern Ireland reaching agreement with the Company in
respect of loan facilities in terms satisfactory to the Purchaser.
6. Consent of the Guarantor's bankers.
7. Written confirmation from Invest Northern Ireland to the Guarantor
of the circumstances in which the INI Grant will become repayable in
terms satisfactory to the Guarantor
SCHEDULE 5
PARTICULARS OF THE PROPERTY
The property situated at ▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ , ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇
held by the Company under a Lease dated 19 January 1990 between (1)
Department of Economic Development (2) DDL Electronics Limited (now
SMTEK Europe Limited) to a term of 999 years from 19 January 1990,
subject to covenants on part of the lessee and the conditions contained
therein, which property is held at the Land Registry of Northern
Ireland under Folio AR9040L County Armagh.
The property is subject to the following registered Charges:-
(a) Charge in favour of DED
(b) Charge in favour of Ulster Bank Limited
The property is also subject to all other matters disclosed on the Land
Certificate and by a Search at the Land Registry.
SCHEDULE 6
NON-TAXATION WARRANTIES
1 INTERPRETATION
Where, in this Schedule, a term is defined in and for the purposes of a
particular paragraph or Sub-Paragraph the relevant definition shall
apply, where the context admits, for all other purposes of this
Schedule.
2 WARRANTIES AND REPRESENTATIONS
The Vendor hereby warrants and represents to and for the benefit of the
Purchaser in the following terms.
2.1 The Company and the Vendor
(A) Capacity
The Vendor and the Guarantor each have 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, authority or body and this Agreement constitutes valid and
binding obligations on the Vendor in accordance with its terms.
(B) Ownership of Sale Shares
The Vendor is the registered and sole beneficial owner of the Sale
Shares free from any Encumbrances.
(C) Liabilities Owing to or by Vendor
There is not outstanding any indebtedness or other liability (actual
or contingent) owing by the Company to any member of the Vendor's Group
or to any Director or any person connected with any of them, nor is
there any indebtedness owing to the Company by any such person.
(D) Competing Interests
No member of the Vendor's Group nor any person connected with any such
member has any interest, direct or indirect, in any business in the
United Kingdom or Ireland which competes with the business now carried
on by the Company save as the registered holder or beneficial owner of
not more than 5 per cent of any class of securities of any company
which is listed in the Official List of The London Stock Exchange
Limited or other recognised Stock Exchange.
2.2 The Company's Constitution
(A) Share Capital
The Sale Shares comprise the whole of the issued and allotted share
capital of the Company and all the shares there shown as issued are in
issue fully paid and are beneficially owned and registered as set out
therein free from any encumbrances.
(B) 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 the Company
under any option or other agreement (including conversion rights and
rights of pre-emption).
(C) Memorandum and Articles
The copy of the memorandum and articles of association of the Company
annexed to the Disclosure Letter is true and complete and has embodied
therein or annexed thereto a copy of every resolution or agreement as
is required by law to be embodied in or annexed to it, and sets out
completely the rights and restrictions attaching to each class of
authorised share capital of the Company.
(D) Company Resolutions
Neither the Company nor any class of its members has passed any
resolution (other than resolutions relating to business at annual
general meetings which was not special business).
2.3 The Company and its Investments
(A) Particulars of the Company
The particulars of the Company set out in Schedule 1 are true and
complete and the Company has no subsidiary.
(B) Investments, Associations and Branches
The Company:
(1) is not the 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);
(2) is not, and has not agreed to become, a member of any
partnership, joint venture, consortium or other unincorporated
association, body or undertaking in which it is to participate with any
other in any business or investment; and
(3) has no branch, agency or place of business outside Northern
Ireland and no permanent establishment (as that expression is defined
in the relevant double taxation relief orders current at the date of
this Agreement) outside the United Kingdom.
(C) City Code
During the ten years prior to the date of this Agreement, the
Company has not:
(1) had at any time any equity share capital listed on the London
Stock Exchange;
(2) had any dealings in its equity share capital advertised in a
newspaper on a regular basis for a continuous period of at least six
months;
(3) had at any time any equity share capital subject to a marketing
arrangement as described in Art 17.3(2)(b) of the Companies Order,
being (by way of example) subject to dealings on the Unlisted
Securities Market or Alternative Investment Market; or
(4) filed a prospectus, with the Registrar of Companies, for the
issue of any equity share capital.]
2.4 The Company's and Vendor's Solvency
(A) Winding Up
No order has been made, petition presented or resolution passed for the
winding up of the Company or the Vendor and no meeting has been
convened for the purpose of winding up the Company or the Vendor. So
far as the Vendor is aware the Company has not been a party to any
transaction which could be avoided in a winding up.
(B) Administration and Receivership
So far as the Vendor is aware 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) Unsatisfied Judgments
No distress, execution or other process been levied against the Company
or action taken to repossess goods in the Company's possession which
has not been satisfied in full. No unsatisfied judgment is outstanding
against the Company.
(E) Floating Charges
So far as the Vendor is aware no floating charge created by the Company
has crystallised.
(F) Analogous Events
No event analogous to any of the foregoing has occurred in or
outside Northern Ireland.
2.5 Not Used.
2.6 Not Used.
2.7 The Company's Business and the Effect of Sale
(A) Business Since the Balance Sheet Date
Since the Balance Sheet Date so far as the Vendor is aware no share or
loan capital has been issued or agreed to be issued by the Company;
(B) Commission
So far as the Vendor is aware no one is entitled to receive from the
Company any 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
So far as the Vendor is aware the acquisition of the Sale Shares by
the Purchaser or compliance with the terms of this Agreement will not:
(1) cause the Company to lose the benefit of any right or privilege it
presently enjoys or relieve any person of any obligation to the Company
(whether contractual or otherwise) or enable any person to determine
any such obligation or any contractual right or benefit enjoyed by the
Company or to exercise any right whether under an agreement with the
Company or otherwise;
(2) result in any present or future indebtedness of the Company
becoming due or capable of being declared due and payable prior to its
stated maturity;
(3) give rise to or cause to become exercisable any right of pre-
emption;
(4) result in a breach of, or constitute a default under any order,
judgement or decree of any court or government agency by which the
Company is bound or subject; or
(5) result in a breach of, or constitute a default under the terms,
conditions or provisions of any agreement, understanding, arrangement
or instrument (including, but not limited to, any of the Company's
contracts);
(6) and, to the best of the knowledge and belief of the Vendor, the
Company's relationships with clients, customers, suppliers and
employees will not be adversely affected thereby and the Vendor is not
aware of any circumstances indicating that, nor has it been informed or
is otherwise aware that, any person who now has business dealings with
the Company would or might cease to do so from and after Completion.
2.8 The Company's Assets
(A) Assets and Charges
(1) So far as the Vendor is aware except for current assets disposed
of by the Company in the ordinary course of its business, the Company
is the owner legally and beneficially of and has good marketable title
to all assets included in the Audited Accounts and all assets which
have been acquired by the Company since the Balance Sheet Date and no
encumbrance is outstanding nor is there any agreement or commitment to
give or create or allow any encumbrance over or in respect of the whole
or any part of the Company's assets, undertaking, goodwill or uncalled
capital and no claim has been made by any person that he is entitled to
any such encumbrance.
(1) Not Used.
(2) Not Used.
(3) So far as the Vendor is aware no charge in favour of the Company is
void or voidable for want of registration.
(B) Property
Title to Property
(a) The particulars of the Property shown in Schedule 5 (Particulars of
the Property) are true and correct. Except as 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 replies to requisitions on title raised by the Purchaser are
true and accurate in all material respects.
2.9 The Company's Contracts
(A) Substantial or significant contracts
Neither the Vendor or the Guarantor has entered into any contract,
agreement, transaction, obligation, commitment, understanding,
arrangement or liability for or on behalf of the Company without the
actual knowledge of the Purchaser or the continuing Director which are
now outstanding or unperformed and which involves any of the following:
(1) obligations on the part of the Company which will cause or are
likely to cause the Company to incur expenditure or an obligation to
pay money;
(2) obligations on the part of the Company to purchase any specified
minimum quantity or any specified minimum percentage of its total
requirement for raw materials or other stock in trade from any one
supplier;
(3) the supply by the Company of products or services whether by way of
lease or outright sale or otherwise to any one customer such that the
value of such supplies exceeds or is likely to exceed 5 per cent of the
total turnover of the Company in the financial year ending 30 June 2003
or in any subsequent year.
(B) Sureties
Neither the Vendor nor any member of the Vendor's Group or any third
party has 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 the
Vendors or any member of the Vendor's Group and 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.
(C) Powers of Attorney
So far as the Vendor is aware, 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 is not aware of any person purporting to do so.
(D) Insider Contracts
(1) So far as the Vendor is aware there is not outstanding, and there
has not at any time during the last six years been outstanding, any
agreement or arrangement to which the Company is a party and in which
(a) the Vendor;
(b) any member of the Vendor's Group;
(c) any person beneficially interested in the Company's share
capital;
(d) any Director; or
(e) any person connected with any of them
is or has been interested, whether directly or indirectly.
(2) So far as the Vendor is aware the Company is not a party to, nor
have its profits or financial position during such period been affected
by, any agreement or arrangement which is not entirely of an arm's
length nature.
(3) So far as the Vendor is aware all costs incurred by the Company
have been charged to the Company and not borne by any other member of
the Vendor's Group.
(E) Options and Guarantees
So far as the Vendor is aware the Company is not a party to any option
or pre-emption right, or a party to nor has it given any guarantee,
suretyship, comfort letter or any other obligation (whatever called) to
pay, 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.
2.10 The Company and its Bankers
Off balance Sheet Financing
The Vendor or the Guarantor have not engaged on behalf of the Company
in any borrowing or financing not required to be reflected in the
Audited Accounts.
2.11 Miscellaneous
All Material Matters Disclosed
All information contained or referred to in this Agreement (including
the Schedules and the documents in agreed terms) and in the Disclosure
Letter or in any annexure thereto or which has otherwise been disclosed
by or on behalf of the Vendor to the Purchaser or its advisers/others
on or prior to the date hereof is true and accurate in all material
respects and the Vendor is not aware of any other fact or matter which
renders any such information misleading because of any omission,
ambiguity or for any other reason.
SCHEDULE 7
TAXATION WARRANTIES
1. INTERPRETATION
1.1 In this Schedule, where the context admits:
'Taxation' and 'Tax' includes (without limitation) corporation
tax, advance corporation tax, the charge under s 419 of the Taxes ▇▇▇
▇▇▇▇, income tax, capital gains tax, the charge under s 601(2) of the
Taxes ▇▇▇ ▇▇▇▇, value added tax, excise duties, the charge to tax under
Sched 9A of the Value Added Tax ▇▇▇ ▇▇▇▇, 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 s 102 of the Finance ▇▇▇ ▇▇▇▇
and any payment whatsoever which the Company may be or become bound to
make to any person 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 Income and Corporation Taxes ▇▇▇ ▇▇▇▇;
'CAA 2001' means the Capital ▇▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇;
'TCGA 1992' means the Taxation of Chargeable Gains ▇▇▇ ▇▇▇▇;
'ITA 1984' means the Inheritance Tax ▇▇▇ ▇▇▇▇;
'Value Added Tax' and 'VAT' mean value added tax as provided for
in the Value Added Tax ▇▇▇ ▇▇▇▇ 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.
2. TAXATION WARRANTIES AND REPRESENTATIONS
The Vendor hereby warrants and represents to and for the benefit of the
Purchaser in the following terms which in each case shall be qualified
by the words "So far as the Vendor is aware"
2.1 General Taxation Matters
(A) Residence
The Company is and always has been resident for taxation purposes only
in the jurisdiction in which it is incorporated.
(B) Tax Provisions
Full provision or reserve has been made in the Audited Accounts for all
taxation assessed or liable to be assessed on the Company or for which
it is accountable in respect of income, profits or gains earned,
accrued or received, or deemed to be earned accrued or received on or
before the Balance Sheet Date or any event on or before the Balance
Sheet Date including distributions made down to such date or provided
for in the Audited Accounts and full provision has been made in the
Audited Accounts for deferred taxation calculated in accordance with
generally accepted accounting principles.
(C) Returns
The Company has properly and punctually made all returns and provided
all information required for taxation purposes and none of such returns
is disputed or is likely to be disputed by the Inland Revenue or any
other authority concerned (in the United Kingdom or elsewhere) and the
vendor is not aware that any event has occurred which would or might
give rise to a payment under the Tax Deed.
(D) Payment of Tax
(i) 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.
(ii) The Company has not made any payments representing instalments of
corporation tax pursuant to the Corporation Tax (Instalment Payments)
Regulations 1998 in respect of the Company's current or preceding
accounting period and neither is the Company under any obligation to do
so.
(E) Audits
The Company has not been subject to any visit, audit, investigation,
discovery, or access order by any taxation authority and there are no
circumstances existing which make it likely that a visit, audit,
investigation, discovery, or access order will be made.
(F) Special Arrangements and Concessions
(1) Full details of any special arrangements and concessions
(including, without limitation, any arrangements and concessions
relating to the taxation of foreign exchange gains and losses and/or
financial instruments and/or loan relationships) which relate to or
affect the Company and which have been made with any tax authority or
relied upon by the Company, in either case within the last six years,
are set out in the Disclosure Letter.
(2) The Company has not taken any action which has had, or might
have, the result of prejudicing or disturbing any such special
arrangement or concession.
(G) Calculation of Tax Liability
The Company has sufficient records relating to past events to permit
accurate calculation of the tax liability or relief which would arise
upon a disposal or realisation on completion of each asset owned by the
Company at the Balance Sheet Date or acquired by the Company since that
date but before Completion.
(H) Payments under deduction
All payments by the Company to any person which ought to have been made
under deduction of tax have been so made and the Company has (if
required by law to do so) provided certificates of deduction to such
person and accounted to the Inland Revenue for the tax so deducted.
(I) Claims, Elections, Clearances and Consent
Claims by the Company
The Company has made no claim under any of the following:
(1) section 279 of the TCGA 1992 (assets situated outside the United
Kingdom);
(2) section 24(2) of the TCGA 1992 (assets of negligible value);
(3) section 280 of the TCGA 1992 (tax on chargeable gains payable by
instalments);
(4) sections 242 and 243 of the Taxes Act 1988 (surplus franked
investment income); or
(5) section 584, 585 or 723 of the Taxes ▇▇▇ ▇▇▇▇ (unremittable
income arising outside the United Kingdom);
(6) section 139, FA 1993 (deferral of unrealised exchange gains);
(7) section 242(2), TCGA 1992 (small part disposals of land).
Elections
The Disclosure Letter contains full particulars of all elections made
by the Company under the following provisions:
(8) sections 524, 527 and 534 of the Taxes Act 1988 (lump sum
receipts for patents and copyright);
(9) section 85 of the CAA 2001 (short life assets); and
(10) section 290 of the CAA 2001 (leasehold interests).
Clearances and Consents
There are annexed to the Disclosure Letter copies of all correspondence
relating to applications for clearance under any enactment relating to
taxation. All particulars furnished to any Taxation Authority in
connection with an application for clearance or consent by the Company
or on its behalf or affecting the Company has been made and obtained on
the basis of full and accurate disclosure to the relevant Taxation
Authority of all relevant material facts and considerations; and any
transaction for which clearance or consent was obtained, has been
carried into effect only in accordance with the terms of the relevant
clearance or consent.
2.2 Corporation Tax, including Corporation Tax on chargeable gains
(A) Distributions
(1) No distribution within the meaning of ss 209, 210 and 211 of the
Taxes Act 1988 has been made (or will be deemed to have been made) by
the Company except dividends shown in its audited accounts nor is the
Company bound to make any such distribution.
(2) No securities (within the meaning of s 254(1) of the Taxes Act
1988) issued by the Company and remaining in issue at the date hereof
were issued in such circumstances that the interest payable thereon
falls to be treated as a distribution under either s 209 (2)(d), 209
(2)(da) or s 209(2)(e) of the Taxes ▇▇▇ ▇▇▇▇.
(3) The Company has not been engaged in nor been a party to any of
the transactions set out in sections 213 to 218 inclusive of the Taxes
▇▇▇ ▇▇▇▇, nor has it made or received a chargeable payment as defined
in Section 218(i) Taxes ▇▇▇ ▇▇▇▇.
(4) The Company has not received any capital distribution to which
the provisions of s 189 of the TCGA 1992 could apply.
(5) The Company has not used any credit, relief or set off that may
be disallowed pursuant to s 237 of the Taxes ▇▇▇ ▇▇▇▇.
(6) The Company has not issued any share capital, nor granted options
or rights to any person which entitles that person to require the issue
of any share capital to which the provision of s 249 of the Taxes Act
1988 could apply.
(7) The Company has not since 8 October 1996:
(a) treated as franked investment income any qualifying distribution
received which would fall to be treated as if it were a foreign income
dividend pursuant to the provisions of Schedule 7 of the Finance ▇▇▇
▇▇▇▇; or
(b) made any qualifying distribution which would fall to be treated
as a foreign income dividend pursuant to the provisions of Schedule 7
of the Finance ▇▇▇ ▇▇▇▇.
(B) Advance Corporation Tax/Shadow Advance Corporation Tax
(i) The Company does not have any unrelieved surplus advance
corporation tax eligible for carry and nor has the Company at any time
after 5 April, 1999 set surplus advance corporation tax against
corporation tax which could be displaced so as to give rise to a
liability of the Company to make a payment of or in respect of
corporation tax.
(ii) The Company does not have any surplus shadow advance corporation
tax nor will the Company at any time in the future be treated as having
surplus shadow advance corporation tax as a consequence of any act or
omission of the Vendor or a company within the Vendor's group.
(C) ACT carry forward
There has been no major change in the nature or conduct of any trade or
business carried on by the Company within the meaning of s 245 of the
Taxes ▇▇▇ ▇▇▇▇.
(D) Capital allowances
All the expenditure which the Company has incurred or may incur
under any subsisting commitment on the provision of machinery, plant or
buildings has qualified or will qualify (if not deductible as a
trading expense for trade carried on by the Company) for writing-down
allowances or industrial building allowances (as the case may be) under
CAA 2001 and in relation to expenditure incurred but for which no claim
has been made a claim made in the Company's next corporation tax self-
assessment return for such allowances in respect of such expenditure
would not be barred by virtue of section 58(4), CAA 2001.
(E) Leased assets
The Company has not made any claim for capital allowances in
respect of any asset which is leased to or from or hired to or from the
Company and no election affecting the Company has been made or agreed
to be made under sections 177 or 183, CAA 2001 in respect of such
assets.
(F) Finance leases
The Company is not a lessee under a lease to which the provisions
of Chapter 17 of Part 2, CAA 2001 apply or could apply.
(G) Long life assets
The Company has not incurred any long-life asset expenditure
within the meaning of section 90, CAA 2001.
(H) Industrial buildings
None of the assets of the Company, expenditure on which has
qualified for a capital allowance under Part 3, CAA 2001, has at any
time been used otherwise than as an industrial building or structure.
(I) Tax Losses
There has not within the three years preceding the date hereof been a
major change in the nature or conduct of any trade or business carried
on by the Company within the meaning of s 768 or 768 (A-E) of the Taxes
▇▇▇ ▇▇▇▇.
(J) Investment Company Deductions
Either
(1) There has not been a change in ownership of the Company within
the meaning of s 769 of the Taxes ▇▇▇ ▇▇▇▇ in the period commencing
three years before the Balance Sheet Date or in respect of any
accounting period commencing prior to that date the corporation tax
computations for which are still under enquiry with the Inland Revenue.
Or
(1) In respect of the changeof ownership, full details of which are
contained in the Disclosure Letter, there has not been:
(a) since any such change, any significant increase in the amount of
Company's capital for the purposes of s 768(B)(1) of the Taxes ▇▇▇
▇▇▇▇;
(b) any change in the nature or conduct of the business carried on by
the Company within the period beginning three years before such change
to three years thereafter;
(c) any acquisition of an asset to which s 171 of the TCGA 1992
applied after the change of ownership together with a disposal or part
disposal of that asset within the period commencing with the change in
ownership and ending three years thereafter;
(d) and the change of ownership did not occur at a time after the
scale of activities of the business carried on by the Company has
become small or negligible and before any considerable revival of the
trade.
(K) Section 765 of the Taxes Act 1988
The Company has not without the prior consent of the Treasury been a
party to any transaction for which consent under s 765 of the Taxes ▇▇▇
▇▇▇▇ was required. Where such consent would have been required but for
the provisions of s 765A(1) of the Taxes ▇▇▇ ▇▇▇▇, the Company has
complied in full with the requirements of The Movements of Capital
(Required Information) Regulations 1990 and a copy of the notification
required pursuant thereto is annexed to the Disclosure Letter.
(L) Controlled Foreign Companies
No notice of the making of direction under section 747, TA 88 has been
received by the Company and no circumstances exist which would entitle
the Inland Revenue to make such a direction or to apportion any profits
of a controlled foreign company to the Company pursuant to section 752,
TA 88.
(M) Depreciatory Transactions
No loss which might accrue on the disposal by the Company of any
share in or security of any company is liable to be reduced by virtue
of any depreciatory transaction within the meaning of s 176 and s 177
of the TCGA 1992 nor is any expenditure on any share or security liable
to be reduced under s 125 of the TCGA 1992.
(N) Value Shifting
The Company has not been party to any scheme or arrangement
whereby the value of an asset has been materially reduced as set out in
sections 29-34 TCGA 1992.
(O) Connected Party and Intra Group Transactions
(1) The Company has not disposed of or acquired any asset to or from
any person connected with it within s 839 of the Taxes Act 1988 or in
circumstances such that the provision of s 17 of the TCGA 1992 could
apply to such disposal or acquisition, nor given or agreed to give any
consideration to which section 128(1)(2) TCGA 1992 could apply.
(2) The Company has not acquired any asset (past or present) from any
other company then belonging to the same group of companies as the
Company within the meaning of s 170 TCGA 1992.
(3) The Company has not made, and is not entitled to make, a claim
pursuant to s 172 of the TCGA 1992.
(P) Transactions between connected persons
No allowable loss has accrued to the Company to which section
18(3), TCGA will apply.
(Q) Transfer Pricing
The Company is not a party to any transaction or arrangement
under which it may be required to pay for any asset or any services or
facilities of any kind an amount which is in excess of the market value
of that asset or those services or facilities, neither is or was the
Company a party to any transaction or arrangements to which the
provisions of section 770A and Schedule 28 ▇▇, ▇▇▇▇▇ ▇▇▇ ▇▇▇▇ may apply
and nor will the Company receive any payment for an asset or any
services or facilities of any kind that it has supplied or provided or
is liable to supply or provide which is less than the market value of
that asset or those services or facilities.
(R) Base Values
(1) The Disclosure Letter contains full and accurate particulars of:
(a) the extent to which the book value of an asset or a particular
class of assets as shown in the Audited Accounts is in excess of:
(i) the amount falling to be deducted under s 38 of the TCGA 1992
from the consideration receivable on a disposal of that asset;
(ii) the balance of the qualifying expenditure attributable to that
asset or pool of assets, as the case may be, brought forward into the
accounting period in which Completion will occur and save to the extent
disclosed, no such excess exists; and
(b) the extent to which provision for taxation in respect of such
excess has been made in the Audited Accounts.
(2) No election under s 35 of the TCGA 1992 is in effect in relation
to the Company and full particulars are given in the Disclosure Letter
of the first relevant disposal for the purposes of the said s 35.
(3) The Disclosure Letter contains full and accurate particulars of
all assets held by the Company on or after 6 April 1988 in respect of
which relief is or would be available under Schedule 4 of the TCGA 1992
upon disposal.
(4) No asset owned by the Company is subject to a deemed disposal and
re-acquisition under Schedule 2, TCGA so as to restrict the extent to
which the gain or loss over the period of ownership may be apportioned
by reference to straight-line growth.
(S) Roll-over Relief
The Disclosure Letter contains full and accurate particulars of
all claims made by the Company under ss 152 to 159, s 162, ss 242 to
245, s 247 or s 248 of the TCGA 1992 and no such claim or other claim
has been made by any other person (in particular pursuant to s 165 or s
175 TCGA 1992) which affects or could affect the amount or value of the
consideration for the acquisition of any asset by the Company taken
into account in calculating liability to corporation tax on chargeable
gains on a subsequent disposal.
(T) Pre-entry Losses
The Disclosure Letter contains details of all pre-entry losses
falling within of Sched 7A, para 1(2)(a) of the TCGA 1992 which have,
or will have, accrued to the Company prior to Completion and details of
all assets which, if disposed of on Completion, would give rise to an
allowable loss.
(U) Foreign Exchange Gains and Losses
(1) No exchange gain or loss of the Company has been calculated in
accordance with Sched 15 of the Finance ▇▇▇ ▇▇▇▇ and regulations made
thereunder.
(2) The Disclosure Letter contains full details of all claims to
defer unrealised exchange gains made by the Company pursuant to s 139
of the Finance ▇▇▇ ▇▇▇▇.
(3) The Disclosure Letter contains details of all debts to which the
provisions of Chapter II of Part II Finance ▇▇▇ ▇▇▇▇ do not apply by
virtue of reg 3 of the Exchange Gains and Losses (Transitional
Provisions) Regulations 1994.
(4) The Company has not received any direction as referred to in s
136(1)(d) or s 136A(7)(b) of the Finance ▇▇▇ ▇▇▇▇.
(V) Financial Instruments
(1) The Company has not entered into any transactions for which the
provisions of s 165, s 166 and s 167 of the Finance ▇▇▇ ▇▇▇▇ could
apply.
(2) The Disclosure Letter contains full details of all qualifying
contracts with non resident persons for the purposes of s 168 of the
Finance ▇▇▇ ▇▇▇▇.
(W) Loan Relationships
(i) The Company applies an authorised accruals method of accounting
(as that term is defined in s 85 of the Finance Act 1996) in respect of
all loan relationships (as that term is defined in s 81 of the Finance
Act 1996) to which it is a party.
(ii) The Disclosure Letter contains full and accurate particulars of
any loan relationship to which the Company is a party, whether as
debtor or creditor, where any other party to that loan relationship is
connected with the Company for the purposes of Chapter II of Part IV of
the Finance ▇▇▇ ▇▇▇▇.
(iii) The Disclosure Letter contains full and accurate particulars of
any loan relationship to which the Company is a party and to which s 92
or s 93A or 93B of the Finance ▇▇▇ ▇▇▇▇ applies.
(iv) The Disclosure Letter contains full and accurate particulars of
any debtor relationship (as that term is defined in s 103 of the
Finance Act 1996) of the Company which relates to a relevant discounted
security (as that term is defined in Sched 13, para 3 of the Finance
Act 1996) to which Sched 9, para 17 or para 18 of the Finance ▇▇▇ ▇▇▇▇
applies.
(v) The Company has not entered into any transaction to which Sched
9, para 11(1) of the Finance ▇▇▇ ▇▇▇▇ applies.
(vi) The Company has not been, and is not entitled to be, released
from any liability which arises under a debtor relationship (as defined
by s103 Finance ▇▇▇ ▇▇▇▇ )of that Company.
(vii) The Disclosure Letter contains full and accurate particulars of
(i) any loan relationship to which the Company is a party, whether as
debtor or creditor, to which Sched 15, para 8 of the Finance ▇▇▇ ▇▇▇▇
has applied or will apply on the occurrence of a relevant event (as
defined in para 8(2)) in respect thereof; (ii) in each case, the amount
of any deemed chargeable gain or deemed allowable loss which has arisen
or will arise in consequence of that relevant event; and (iii) any
election made pursuant to Schedule 15, paragraph 9 of the Finance ▇▇▇
▇▇▇▇.
(viii) The Company has not been a party to a loan relationship
which had an unallowable purpose (within the meaning of paragraph 13 of
Schedule 9, Finance Act 1996).
(X) Chargeable Debts
The Company is not owed a debt, other than a debt on a security, on the
disposal or satisfaction of which a liability to corporation tax on
chargeable gains will arise by reason of section 251, TCGA.
(Y) Chargeable Policies
The Company has not acquired benefits under any policy of assurance
otherwise than as original beneficial owner.
(Z) Non-resident Companies or Trusts
There has not accrued any income, profit or gain in respect of which
the Company may be liable to corporation tax by virtue of the
provisions of s 13 TCGA 1992 or Chapter IV of Part XVII Taxes ▇▇▇ ▇▇▇▇.
(AA) Company Migration
(1) The Company is not a dual resident company for the purposes of s
139(3) or s 160 or s 188 of the TCGA 1992.
(2) There are no circumstances pursuant to which the Company has or
may become liable to tax pursuant to s 185 (Deemed disposal of assets
on company ceasing to be resident in UK), s 186 (Deemed disposal of
assets on company ceasing to be liable to UK tax), s 187 (Postponement
of charge on deemed disposal) of the TCGA 1992 or s 132 (Liability of
other persons for unpaid tax) Finance ▇▇▇ ▇▇▇▇ or s 191 of the TCGA
1992 (Non-payment of tax by non-resident companies).
(BB) Leaseholds
The Company is not liable to taxation under the provisions of ss 34, 35
and 36 Taxes Act 1988 nor does it own any leasehold interest to which
the said s 35 may apply.
(CC) Land Sold and Leased Back
The Company has not entered into to any transaction to which the
provisions of section 779 or 780, TA 88 have been or could be applied.
(DD) Non- Deductible payments
No rents, interest, annual payments or other sums of an income nature
paid or payable by the Company or which the Company is under an
obligation to pay in the future are wholly or partially disallowable as
deductions, management expenses or charges in computing profits for the
purposes of corporation tax by reason of the provisions of ss 74, 125,
338 339, 577, 577A, 779 to 784, and 787 of the Taxes ▇▇▇ ▇▇▇▇ or
otherwise.
2.3 Corporation Tax - Groups of Companies.
(A) Group Income
The Disclosure Letter contains particulars of all elections made by the
Company under s 247 of the Taxes Act 1988 and the Company has not at
any time prior to 6 April 1999 paid any dividend without paying advance
corporation tax or at any time made any payment without deduction of
income tax in the circumstances specified in sub-section (6) of that
section. In respect of each such election the conditions of s 247 of
the Taxes Act 1988 have at all times been and continue to be satisfied.
(B) Transfer of Tax Refunds
Refunds arrangements and agreements relating to the transfer of tax
refunds to which the Company is or has been a party; and
(1) all claims by the Company for the transfer of tax refunds were
when made and are now valid and have been or will be allowed by way of
discharging the liability of the recipient company to pay any
corporation tax;
(2) the Company has not made nor is liable to make any payment under
any such arrangement save in consideration for the transfer of tax
refunds allowable to the Company by way of discharge from liability to
corporation tax and equivalent to the taxation for which the Company
would have been liable would it not have been for the transfers;
(3) the Company has received all payments due to it under any such
arrangement or agreement or transfer of tax refunds made by it and the
payments are not liable to be refunded in whole or in part.
(4) No such payments exceeds or could exceed the amount permitted by
S102 (7) FA 1989.
(5) save in respect of this Agreement, there have not been in
existence in relation to the Company any such arrangements as are
referred to in s 410 of the Taxes ▇▇▇ ▇▇▇▇.
(C) Surrender of Advance Corporation Tax
The Disclosure Letter contains particulars of all arrangements and
agreements to which the Company is or has been a party relating to the
surrender of advance corporation tax made or received by the Company
under s 240 of the Taxes Act 1988 and:
(1) the Company has not paid nor is liable to pay any amount in
excess of the advance corporation tax surrendered to it nor for the
benefit of any advance corporation tax which is or may become incapable
of set off against the Company's liability to corporation tax;
(2) the Company has received all payments due to it under any such
arrangement or agreement for all surrenders of advance corporation tax
made by it and the payments are not liable to be refunded in whole or
in part;
(3) No payment exceeds or could exceed the amount permitted s 240(8)
TA 1988.
(4) save in respect of this Agreement, there have not been in
existence in relation to the Company any such arrangements as are
referred to in s 240(11) of the Taxes ▇▇▇ ▇▇▇▇.
(D) Group Relief and Consortium Relief
The Disclosure Letter contains particulars of all arrangements and
agreements relating to group relief (as defined by S402 Taxes Act 1988)
to which the Company is or has been a party and:
(1) all claims by the Company for group relief were when made and are
now valid and have been or will be allowed by way of relief from
corporation tax;
(2) the Company has not made nor is liable to make any payment under
any such arrangement or agreement save in consideration for the
surrender of group relief allowable to the Company by way of relief
from corporation tax and equivalent to the taxation for which the
Company would have been liable had it not been for the surrender;
(3) the Company has received all payments due to it under any such
arrangement or agreement for surrender of group relief made by it and
no such payment is liable to be repaid, in whole or in part and no such
payment exceeds the amount permitted by Section 402(6) TA 1988;
(4) the Company is not a dual resident investing company within the
meaning of s 404 of the Taxes ▇▇▇ ▇▇▇▇; and
(5) save in respect of this Agreement, there are not nor have there
been in existence in relation to the Company any such arrangements as
are referred to in s 410 of the Taxes ▇▇▇ ▇▇▇▇.
(E) Group Reconstructions
The Company has not been party to any scheme of reconstruction or
reorganisation to which the provisions of s 139 of the ▇▇▇▇ ▇▇▇▇, ▇ ▇▇▇
▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇ or to which s 343 of the Taxes Act 1988 could
apply.
(F) Leaving the Group
The execution or completion of this agreement or any other event since
the Balance Sheet Date will not result in any chargeable asset being
deemed to have been disposed of and re-acquired by the Company for
Taxation purposes pursuant to section 178 or 179, TCGA or as a result
of any other Event since the Balance Sheet Date.
2.4 Close Companies
(1) The Company is not and has not been at any time within the six
years ended at the Balance Sheet Date a close company within s 414 and
s 415 of the Taxes ▇▇▇ ▇▇▇▇.
(2) No distribution within s 418 of the Taxes Act 1988 has been made
by the Company.
(3) The Company has not made (and will not be deemed to have made)
any loan or advance to a participator or an associate of a participator
so as to become liable to make any payment under s 419,420 & 421 of the
Taxes Act 1988 and the Company has not released or written off or
agreed to release or write off the whole or any part of such loans or
advances..
(4) The Company is not, and has not since 31 March 1989 been, a close
investment holding company within the meaning of s 13A of the Taxes ▇▇▇
▇▇▇▇.
2.6 Taxation of Employees and Agents
(A) PAYE
The Company has properly operated the Pay As You Earn system deducting
tax as required by law from all payments to or treated as made to
employees and ex-employees of the Company and punctually accounted to
the Inland Revenue for all tax so deducted and all returns required
pursuant to s 203 of the Taxes Act 1988 and regulations made thereunder
have been punctually made and are accurate and complete in all
respects.
(B) Dispensations and PAYE Audits
The Disclosure Letter contains full details of all dispensations
obtained by the Company and all notifications given by the Inland
Revenue under s166 TA 1988 and all details of any visit from the Audit
Office of the Inland Revenue within the last six years including full
details of any settlement made pursuant thereto.
(C) Benefits for Employees
(1) The Company has not made any payment to or provided any benefit
for any officer or employee or ex-officer or ex-employee of the Company
which is not allowable as a deduction in calculating the profits of the
Company for taxation purposes.
(3) The Company has not issued any shares in the circumstances
described in s 77(1) and has complied with s 85 of the Finance ▇▇▇
▇▇▇▇.
(4) The Company has not made any payment to which s 313 of the Taxes
▇▇▇ ▇▇▇▇ applies.
(D) Personal Service Companies
Any payment made to or for the direct or indirect benefit of any
person who is or might be regarded by any taxation authority as an
employee of the Company is made to such person direct and is not made
to any company or other entity associated with that person.
(E) Sub-Contractors
The Company has properly operated the sub-contractors' scheme under
Chapter IV Part XIII of the Taxes Act 1988 deducting tax as required by
law from all payments made to sub-contractors of the Company and
punctually accounted to the Inland Revenue for all tax so deducted.
(F) National Insurance
The Company has paid all national insurance and social security
contributions including employer contributions for which it is liable
and has kept proper books and records relating to the same and has not
been a party to any scheme or arrangement to avoid any liability to
account for primary or secondary national insurance contributions.
2.7 Value Added Tax: General Warranties
(A) The Company is duly registered and is a taxable person for the
purposes of VAT and such registration is not subject to any conditions
imposed by or agreed with the Commissioners of Customs & Excise.
(B) The Company has within the last six years complied in all
material respects with all statutory requirements, orders, provisions,
directions or conditions related to value added tax.
(C) All input tax for which the Company has claimed credit has been
paid by the Company in respect of supplies made to it relating to goods
or services used or to be used for the purpose of the Company's
business.
(D) The Company has not, at any time in the last 10 years, received
any income which would be deemed to fall within Schedule 9 VATA, 1994
(Exemption).
(E) The Company maintains complete, correct and up-to-date records
for the purposes of all legislation relating to VAT and is not subject
to any condition imposed by the Commissioners of Customs & Excise
under paragraph 6 Schedule 11 VATA relating to the preservation of
information.
(F) The Company is not in arrears with any payment or returns under
legislation relating to VAT or excise duties, or liable to any abnormal
or non-routine payment of VAT, or any forfeiture or penalty, or to the
operation of any penal provision.
(G) The Company has not within the last 6 years ending on the date of
this Agreement been served with any penalty liability notice under
section 64 (3) VATA or any surcharge liability notice under section 59
VATA or been issued with any written warning under section 76(2) VATA.
(H) The Company has not within the last six years been required by
the Commissioners of Customs & Excise to give security under paragraph
4 Schedule 11 VATA.
(I) The Company has not been or applied for treatment as a member of
a group for VAT purposes under Section 43 VATA and no transaction has
been effected in consequence of which the relevant Group Member is or
may be held liable for any VAT arising from supplies made by another
company.
(J) The Company has no interest in any assets treated as items under
Part XV of the Value Added Tax Regulations 1995 (Capital Goods Scheme).
(K) The Company is not, and has not been agreed to become, an agent,
manager or factor for the purposes of Section 47 VATA of any person who
is not resident in the United Kingdom; and
(L) The Company is not and is not required to be, registered for VAT
in any country other than the UK.
(M) The Company has not paid and is not liable to pay any interest
pursuant to s 74 of the Value Added Tax ▇▇▇ ▇▇▇▇.
(N) The company has not within the last six years disposed of or
acquired any business or assets in the circumstances mentioned in
Section 49 VATA or Article 5 of the Value Added Tax (Special
Provisions) Order 1995.
(O) All goods and services supplied by the company, or goods imported
by the company, in respect of which the company has claimed credit for
input tax under the rules set out in VATA, are used or to be used
wholly for the purposes of its business.
(P) There are set out in the Disclosure Letter details of all
outstanding claims made by each Group Member under Section 36 VATA -
Bad Debt.
(Q) The company has not been a party to any transaction or
arrangement as a result of which a direction has been or may be given
under Schedule 9A VATA (anti-avoidance provisions for groups of
companies).
(R) The company has not received any supplies of the type described
in Schedule 5 VATA.
2.7.1 VAT: Property Transactions
(A) The company has not incurred any liability in respect of VAT
(whether to HM Customs & Excise or to any other person) by reason of
the provisions of paragraph 2 (1) Schedule 10 VATA and there are no
circumstances whereby the company could become so liable as a result of
a person making an election under that paragraph.
(B) The company nor any relevant associate (within the meaning of
paragraph 3 (7) Schedule 10 VATA) has not made any election under
paragraph 2 (1) Schedule 10 VATA in respect of any land in, over or in
respect of which the company has any interest , right or licence to
occupy and the company is not aware of any intention to make such an
election.
2.8 Stamp Duties
(A) All stampable documents wheresoever executed (other than those
which have ceased to have any legal effect) to which the Company is a
party have been duly stamped or stamped with a particular stamp
denoting that no stamp duty is chargeable. Since the Balance Sheet
Date there have been and are no circumstances or transactions to which
the Company is or has been a party such that a liability to stamp duty
or any penalty in respect of such duty will arise on the Company.
(B) Stamp Duty Reserve Tax
Since the Balance Sheet Date the Company has not incurred any liability
to or been accountable for any stamp duty reserve tax and there has
been no agreement within section 87(1), Finance ▇▇▇ ▇▇▇▇ which could
lead to the Company incurring such a liability or becoming so
accountable.
2.9 Inheritance Tax and Gifts
(A) No transfers of value and associated operations
The Company has made no transfers of value within sections 94 and
202, ITA 1984, nor has the Company received a transfer of value such
that liability might arise under section 199, ITA 1984, nor has the
Company been party to associated operations in relation to a transfer
of value as defined by section 268, ITA 1984.
(B) Inland Revenue charge
There is no unsatisfied liability to inheritance tax attached to
or attributable to the Shares or any asset of the Company and none of
them are subject to an Inland Revenue charge as mentioned in section
237 and 238, ITA 1984.
(C) Power of sale, mortgage or charge
No asset owned by the Company nor the Shares are liable to be
subject to any sale, mortgage or charge by virtue of section 212, ITA
1984.
SCHEDULE 8
COMPLETION ARRANGEMENTS
1. VENDOR'S OBLIGATIONS TO DELIVER
The Vendor shall deliver to the Purchaser:
(a) duly executed share transfers in respect of the Sale Shares in
favour of the Purchaser, or as it may direct, together with the
relative share certificates and any power of attorney or other
authority under which such transfers have been executed;
(b) written resignations and releases under seal, in the agreed form,
from the Secretary of the Company and the Directors (other than the
Continuing Directors) resigning their offices and releasing the Company
from all claims and rights of action whatsoever, whether in respect of
breach of contract, compensation for loss of office, unfair dismissal,
redundancy or in respect of any loan or other indebtedness, or on any
other account whatsoever;
(c) the Common Seal, Certificate of Incorporation and the statutory
books of the Company properly written up to the day prior to
Completion, namely the Register of Members, Register of Mortgages,
Register of Directors and Secretaries, Register of Directors'
Interests, the Books of Account and the Minute Books of Meetings of the
Company and of its Boards of Directors;
(d) copies of all existing bank mandates and statements of the balances
of any bank accounts in the name of the Company, as at the close of
business on the last Business Day before Completion together with a
list of all unpresented cheques and uncleared cheques which upon
presentation or clearance would be debited or credited to such
accounts;
(e) the Tax Deed, and the Name Licence Agreement duly executed as at
Completion by the Vendor and the Purchaser;
(f) a letter of resignation as auditors of the Company in the agreed
form signed by the Auditors and complying with Article 401 of the
Companies Order together with a statement, pursuant to Article 401A of
the Companies Order, acknowledging that there are no circumstances
connected with their ceasing to hold office which should be brought to
the attention of the members or creditors of the Company together with
confirmation that the Auditors have no claims against the Company for
unpaid fees or expenses;
(h) irrevocable powers of attorney (in such form as the Purchaser may
require) executed by the Vendor in favour of the Purchaser, or its
nominees, enabling the Purchaser, or its nominees, pending registration
of the transfers of the Shares, to exercise all voting and other rights
attaching to the Shares and to appoint proxies for such purpose;
(i) Not Used
(j) a letter from the Vendor specifying the whereabouts of any other
documents, books or records of the Company which are not held at the
Property and directing the holders of them to deliver them up to the
Purchaser upon request;
(k) a letter of confirmation from Invest NI to the Company,
expressing its consent to the change of control of the Company and
waiving rights to clawback of grant monies as referred to in the
Conditions;
(k) a letter of confirmation from Ulster Bank Limited to the Company
expressing its consent to the change of control of the Company and
releasing SMTEK International Inc. from its guarantee;
(l) evidence of shareholder approval of the Vendor of a substantial
property transaction with a director as required under the Companies
Orders
(m) any other documents required by this Agreement to be supplied by
the Vendor to the Purchaser at Completion.
2. BOARD MEETING OF THE COMPANY
The Vendor shall cause to be duly held a meeting of the Company and of
the Board of the Company validly to effect or execute or validly to
resolve to effect or execute:
(a) the approval of the said transfers of the Sale Shares to the
Purchaser and/or its nominees, the issue to the Purchaser and/or its
nominees of share certificates in respect of those shares and the
registration of the Purchaser and/or its nominees as holders of those
shares (subject only to those transfers being represented duly
stamped);
(b) the appointment as Directors and Secretary of the Company of such
persons as the Purchaser may nominate, subject to such persons
consenting to such appointment and not being disqualified in law or
under the Articles of Association of the Company from holding such
offices;
(c) the revocation of all existing bank mandates and the issue of new
mandates in relation to the Company to such bank or banks and in such
form as the Purchaser may direct;
(d) the acceptance of the resignation of the Auditors and the
appointment as auditors of the Company of such person or firm as the
Purchaser may nominate, subject to the provisions of the Companies
Order;
(e) the acceptance of the resignation of the existing Directors
(other than the Continuing Directors) and Secretary;
(f) the change in the registered office of the Company to such
address as may be nominated by the Purchaser;
(g) the sealing of the Tax Deed and Share Certificates in favour of
the Purchaser;
(m) any other business which may be necessary or desirable to give full
and valid effect to the sale and purchase provided for in this
Agreement or as the Purchaser may reasonably require;
and the Vendor shall supply duly signed minutes of all such meetings to
the Purchaser on Completion.
3. PURCHASER'S OBLIGATION AT COMPLETION
Subject to the conclusion of the matters referred to in Paragraphs 1
(Vendor's Obligations to Deliver) and 2 (Board Meeting of the Company)
the Purchaser shall:
(a) deliver to the Vendor's Solicitors $1 in cash;
(b) deliver to the Vendor's Solicitors a counterpart of each of the Tax
Deed and the Name Licence Agreement duly executed by the Purchaser; and
SCHEDULE 9
VENDOR PROTECTION
1. Limitation of Liability
The following paragraphs of this Schedule shall operate to limit the
liability of the Vendor under or in connection with the Tax Deed, and
the Warranties and accordingly, in this Schedule, "Relevant Claim"
means any claim under or in connection with the Warranties or the Tax
Deed (including for the avoidance of doubt, any claim for
misrepresentation or negligent misstatement)
2. Financial Limits
2.1 Aggregate limit
The aggregate liability of the Vendor in respect of Relevant Claims
shall be limited to 80,000 pounds sterling.
2.2 Thresholds
The Vendor shall not be liable in respect of a Relevant Claim unless
the liability of the Vendor in respect of that Relevant Claim (and all
other Relevant Claims arising out of or related to the said or similar
subject matter) exceeds 8,000 pounds sterling.
2.3 The Vendor shall not be liable in respect of any Relevant Claim
(a) to the extent that the subject of any such claim is allowed or
provided for or reserved in the Audited Accounts or the Completion
Accounts or has been included in calculating creditors or deducted in
calculating debtors in the Audited Accounts or the Completion Accounts
and (in the case of creditors or debtors) is identified in the records
of the Company or to the extent such matter was specifically referred
to in the notes to the Audited Accounts or the Completion Accounts;
(b) to the extent that any such claim arises or is increased:
- wholly or partly from an act or omission occurring at the request of
or with the written consent of the Purchaser or (on or after
Completion) the Company or any of its directors, other officers,
employees or agents;
- wholly or partly from an act or omission compelled by law;
- as a result of any increase in rates of taxation since the Balance
Sheet Date;
- as a result of any change after Completion in the basis upon which
the accounts of the Company are prepared or any change in accounting or
taxation practice, policies or principles;
- as a result of any change after Completion in the date to which the
Company makes up its accounts; or
- wholly or partly as a result of the passing or coming into force of,
or any change in, any enactment law regulation directive requirements
or practice of any government governmental agency or regulatory body
after Completion whether or not having retrospective effect.
(c) to the extent that the subject of any such claim is fairly
disclosed in this Agreement or in the Disclosure Letter;
(d) to the extent that the liabilities of any such claim are
contingent, future or unascertainable in which case the Vendor shall
not be liable to recompense the Purchaser until such time as the
Purchaser shall actually have suffered the loss or incurred the
liability in question;
(e) if it relates to any expression or opinion or future intention or
any forecasts, projections, speculation, assessment or budget;
(f) if it relates to the fact that the Company has lost goodwill or
possible business since Completion; and
(g) if it would not have arisen or would have been reduced but for the
cessation of a trade or a change in the nature or conduct of a trade
carried on by the Company in either case occurring after Completion.
3. Time Limits
3.1 Notice to Vendor
The Vendor shall have no liability in respect of any Relevant Claim
unless the Purchaser shall have given notice in writing to the Vendor
of such claim specifying (in reasonable detail) the matter which gives
rise to the claim, the nature of the claim and the amount claimed in
respect thereof not later than:
(A) in the case of a Relevant Claim under or in connection with the Tax
Deed the applicable time limits specified in Sub-Clause 3.2 of the Tax
Deed; or
(B) in any other case, 31 May 2004
3.2 Any Relevant Claim in respect of which notice shall have been given
in accordance with clause 3.1 above shall be deemed to have been
irrevocably withdrawn and lapsed (not having been previously satisfied
settled or withdrawn) if proceedings in respect of such claim have not
been issued and served on the Vendor not later than the expiry of the
period of 4 months after the date of this notice.
4. Recovery from Third Parties
4.1 Accounting to Vendor
If the Vendor pays to or for the benefit of the Purchaser an amount in
respect of any Relevant Claim and any of the Purchaser, or the Company
subsequently receives from any other person any payment in respect of
the matter giving rise to the Relevant Claim, the Purchaser shall
thereupon pay to the Vendor an amount equal to the payment received,
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 Vendor in respect of the Relevant Claim was
reduced to take account of such payment
4.2 Where the Purchaser and/or the Company is or is likely to be
entitled to recover from some other person any sum in rspect of any
matter giving rise to a Relevant Claim or a claim under the Tax Deed
then the Purchaser shall procure that reasonable steps are taken to
enforce such recovery and if any sum is so recovered then either the
amount payable by the Vendor in respect of that claim shall be reduced
by an equal amount to the sum so recovered
4.3 Without prejudice to the generality of 4.2 above, the provisions of
4.2 shall apply:
(a) where the Company is entitled to recover from its insurers (in
respect of insurance effective on or before Completion) any sum in
respect of any matter giving rise to a Relevant Claim
(b) to the extent that the Vendor is liable for an obligation of the
Company to pay advance corporation tax and the Company is entitled to
obtain the benefit or reduction in liability to mainstream corporation
tax by reason of such payment when the Purchaser shall procure that the
Company shall make all such claims and elections as will result in such
benefit or reduction being obtained as soon as reasonably possible
5. No duplication of Recovery
5.1 No Double 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
5.2 Claims under Warranties or Tax Deed
In the event that the Purchaser is entitled to claim under the Tax Deed
or under the Warranties contained in Schedule 7 (Taxation) in respect
of the same subject matter, the Purchaser may claim under either or
both but payments under the Tax Deed shall pro tanto satisfy and
discharge any claim which is capable of being brought under the
Warranties contained in Schedule 4 in respect of the same subject
matter and vice versa
6. Conduct of Warranty Claims
6.1 The Purchaser shall notify the Vendor in writing of:
(a) any claim made against it by a third party which may give rise to a
Relevant Claim; and
(b) any claim the Purchaser is entitled to bring against a third party
which claim is based on circumstances which may give rise to a Relevant
Claim.
6.2 The Purchaser shall not be liable for any delay in giving any
notice under sub-clause 6.1 and shall not by reason of such delay be
precluded from bringing any such claim against the Vendor
6.3 The Purchaser shall procure that the conduct, negotiation,
settlement or litigation of the claim by or against such third party
is, so far as is reasonably practicable, carried out in accordance with
the wishes of the Vendor and at its cost subject to it giving timely
instructions to the Purchaser and providing reasonable security for any
costs and expenses which might be incurred by the Purchaser and the
Vendor hereby undertakes to indemnity and keep the Purchaser in respect
of such costs and expenses
6.4 The Purchaser shall provide to the Vendor and the Vendor's advisers
reasonable access to premises and personnel and to any relevant assets,
documents and records within their power, possession or control for the
purpose of investigating any Relevant Claim and enabling the Vendor to
take the action referred to in sub-clause 6.3 and shall allow the
Vendor and its advisers to take copies of any relevant documents or
records at their expense.
SCHEDULE 10
Dated the 9th day of April 2003
SMTEK INTERNATIONAL INC (1)
ALINA LIMITED (2)
NAME LICENCE AGREEMENT
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
Solicitors
▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Index to Clauses
1 Definitions
2 Rights granted and Territory
3 Duration
4 Quality of products
5 Use of the Name
6 Ownership of the Name
7 Infringements
8 Termination
9 Indemnity
10 Assignment
11 Force majeure
12 Illegality
13 Entire agreement/Amendment/Press releases/Costs
14 Notice
15 Interpretation
16 Governing law and jurisdiction
Schedule 1 The Products
NAME LICENCE AGREEMENT
Date: 9th April 2003
Parties:
"The Licensor": SMTEK INTERNATIONAL INC. a corporation incorporated
under the laws of the State of Delaware whose registered office is at
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
"The Licensee": ALINA LIMITED a private limited company incorporated
under the laws of Northern Ireland whose registered office is at
Marlborough House, ▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Recitals:
The Licensor wishes to permit the Licensee to use the Name in respect
of the Products (defined below) on the terms of this Agreement.
Operative provisions:
1 Definitions
In this Agreement:
"THE COMMENCEMENT DATE" means the date of this Agreement
"EXCLUSIVE" means a right enjoyed by a licensee to the exclusion
of all other persons including the grantor of that right
"LOGO" means any logo usedby the Licensor from time to time
"NAME" means SMTEK Europe (whether used in conjunction with the
logo or not)
"SECTOR" means the electronic contract manufacturing sector
2 Rights granted and Territory
2.1 The Licensor grants to the Licensee, on the terms set out in this
Agreement, an Exclusive licence to use the Name worldwide in the Sector
only on or in relation to the business or products. The licence does
not include any right to grant sub-licences PROVIDED THAT the Licensee
shall be entitled without the prior written consent of the Licensor to
have any products manufactured for it by any third party but shall
remain primarily liable to the Licensor notwithstanding any such sub-
contract.
3 Duration
3.1 This Agreement shall commence on the Commencement Date and shall
unless terminated in any of the circumstances of clause 8 of this
Agreement continue in force until the first anniversary of the
Commencement Date.
4 Quality of products
4.1 All products manufactured by the Licensee under or by reference
to the Name shall be of a high standard of quality in relation to their
manufacture, materials used, workmanship and design, packaging and
storage.
4.2 Products intended to be marketed under the Name which in the
Licensor's opinion are not of the quality required under clause 4.1
above shall on notice being given by the Licensor be forthwith
withdrawn from production and sale by the Licensee and they shall
either be corrected or destroyed or the Name removed from them at the
Licensor's option. The Licensor may inspect any such corrected products
before they are marketed.
4.3 If at any time the Licensee becomes aware of any defect in any
product manufactured by the Licensee on which the Name or Logo is used
it shall immediately inform the Licensor.
5 Use of the Name
5.1 All use of the Name by the Licensee shall be for the benefit of
the Licensor and the goodwill accrued to the Licensee arising from its
use of the Name (but no greater or other goodwill) shall accrue to and
be held in trust by the Licensee for the Licensor which goodwill the
Licensee agrees to assign to the Licensor at its request at any time
whether during or after the term of this Agreement.
5.2 Whenever the Name is used by the Licensee it shall be accompanied
by wording to show that it is a trade ▇▇▇▇ used by the Licensee with
the permission of the Licensor: the terms of such wording and its
placing shall be as reasonably requested by the Licensor.
5.3 The Licensee shall use the Name in the form stipulated by the
Licensor and shall observe any reasonable directions given by the
Licensor as to colours and size of the representations of the Name on
the products and any accompanying leaflets brochures or other material,
and in any advertising material prepared by the Licensee.
5.4 The Licensee shall submit designs of all printed materials using
the Name to the Licensor for approval as to the manner and the context
of the intended use of the Name and shall not make use of any such
designs or materials until they have been approved by the Licensor
which approval shall not be unreasonably withheld. The Licensee shall
however be responsible for ensuring that all other requirements
relating to labelling, packaging, advertising, marking and other such
matters are complied with.
5.5 The use of the Name by the Licensee shall at all times be in
keeping with and seek to maintain its distinctiveness and reputation as
determined by the Licensor, and the Licensee shall forthwith cease any
use not consistent therewith as the Licensor may reasonably require.
The Licensee shall not use the word "SMTEK" unless the word "Europe"
appears immediately after it in the same font size.
5.6 The Licensee shall not use any ▇▇▇▇ or name confusingly similar
to the Name in respect of its business or products.
6 Ownership of the Name
6.1 The Licensee undertakes not to do or permit to be done any act
which would or might jeopardise or invalidate any registration of the
Name as a trade ▇▇▇▇ or application therefor nor to do any act which
might prejudice the right or title of the Licensor to the Name.
6.2 The Licensee will on request give to the Licensor or its
authorised representative any information as to its use of the Name
which the Licensor may require and will (subject to the provisions of
clause 7 below) render any assistance reasonably required by the
Licensor in maintaining the registrations of the Name or in prosecuting
any application therefor.
6.3 The Licensee will not make any representation or do any act which
may be taken to indicate that it has any right title or interest in or
to the ownership or use of the Name except under the terms of this
Agreement, and acknowledges that nothing contained in this Agreement
shall give the Licensee any right, title or interest in or to the Name
save as granted hereby.
6.4 The Licensee shall assist (at the cost of the Licensor) the
Licensor as may be reasonably necessary (including by executing any
necessary documents) in recording the Licensee as a licensee of the
Name (including such of the applications as mature into registrations
during the period of this Agreement), and the Licensee hereby agrees
that such entry may be cancelled by the Licensor on termination of this
Agreement, for whatever reason, and that it will assist the Licensor so
far as may be necessary to achieve such cancellation including by
executing at the request of the Licensor any documents necessary for
that purpose.
7 Infringements
7.1 The Licensee shall as soon as it becomes aware thereof give the
Licensor in writing full particulars of any use or proposed use by any
other person, firm or company of a trade name, trade ▇▇▇▇ or get-up of
goods or mode of promotion or advertising which amounts or might amount
either to infringement of the Licensor's rights in relation to the Name
or to passing-off.
7.2 If the Licensee becomes aware that any other person, firm or
company alleges that the Name is invalid or that use of the Name
infringes any rights of another party or that the Name is otherwise
attacked or attackable the Licensee shall immediately give the Licensor
full particulars in writing thereof and shall make no comment or
admission to any third party in respect thereof.
7.3 The Licensor shall have the conduct of all proceedings relating
to the Name and shall in its sole discretion decide what action if any
to take in respect of any infringement or alleged infringement of the
Name or passing-off or any other claim or counterclaim brought or
threatened in respect of the use or registration of the Name. The
Licensee shall not be entitled to bring any action for infringement
under sections 30 or 31 of the Trade Marks ▇▇▇ ▇▇▇▇, and the Licensor
shall not be obliged to bring or defend any proceedings in relation to
the Name if it decides in its sole discretion not to do so.
7.4 The Licensee will at the request of the Licensor give full co-
operation to the Licensor in any action, claim or proceedings brought
or threatened in respect of the Name and the Licensor shall meet any
reasonable expenses incurred by the Licensee to third parties in giving
such assistance.
8 Termination
8.1 The Licensor may terminate this Agreement forthwith by notice in
writing to the Licensee if the Licensee:
(a) commits a breach of this Agreement; provided that if the
breach is capable of remedy the notice shall only be given if the
Licensee in breach shall not have remedied the same within 30 days of
having been given notice in writing specifying the breach and requiring
it to be remedied; or
(b) is unable to pay its debts or enters into compulsory or
voluntary liquidation (other than for the purpose of effecting a
reconstruction or amalgamation in such manner that the company
resulting from such reconstruction or amalgamation if a different legal
entity shall agree to be bound by and assume the obligations of the
Licensee under this Agreement) or compounds with or convenes a meeting
of its creditors or has a receiver or manager or an administrative
receiver or an administrator appointed of its assets or ceases for any
reason to carry on business or takes or suffers any similar action
which in the opinion of the Licensor giving notice means that the other
may be unable to pay its debts.
8.2 The Licensee may terminate this Agreement forthwith at any time
without cause by notice in writing to the Licensor.
8.3 Termination of this Agreement for whatever reason shall not
affect the accrued rights of the parties arising in any way out of this
Agreement as at the date of termination and in particular but without
limitation the right to recover damages from the other.
8.4 Upon the termination of this Agreement for whatever reason the
Licensee shall cease and shall procure that any member of its group
shall cease to make any use of the Name and shall procure that SMTEK
Europe Limited shall change its corporate name to a name unconnected
with the Name.
8.5 All provisions of this Agreement which in order to give effect to
their meaning need to survive its termination shall remain in full
force and effect thereafter.
9 Assignment
9.1 The Licensee shall not assign, transfer or in any other manner
make over to any third party the benefit and/or burden of this
Agreement without the prior written consent of the Licensor
9.2 The Licensor may assign the benefit and burden of this Agreement
to any party and shall use its reasonable endeavours to procure that
such assignee, if the Licensee so requires, shall grant a licence
direct to the Licensee on the same terms mutatis mutandis as those
contained in this Agreement.
9.3 In the event of an assignment this Agreement shall be binding
upon such successor or assignee and the name of a party appearing
herein shall be deemed to include the names of any such successor or
assignee.
10 Force majeure
Neither party shall be in breach of this Agreement if there is
any total or partial failure of performance by it of its duties and
obligations under this Agreement occasioned by any act of God, fire,
act of government or state, war, civil commotion, insurrection,
embargo, prevention from or hindrance in obtaining any raw materials,
energy or other cause beyond the control of either party. If either
party is unable to perform its duties and obligations under this
Agreement as a direct result of the effect of one or more of such
causes such party shall give written notice to the other of such
inability stating the cause in question and the date on which such
cause commenced. The operation of this Agreement shall be suspended
during the period (and only during the period) in which the cause
continues to have effect. Forthwith upon the cause ceasing to have
effect the party relying upon it shall give written notice thereof to
the other. If the cause continues to have effect for a period of more
than 90 days the party not claiming relief under this clause shall have
the right to terminate this Agreement upon giving 30 days written
notice of such termination to the other party, but such notice shall
not take effect if the other party gives notice within that period that
the cause has ceased to prevent the operation of this Agreement and
forthwith upon such cessation recommences the full and punctual
performance of its obligations hereunder.
11 Illegality
If any provision or term of this Agreement shall become or be
declared illegal, invalid or unenforceable for any reason whatsoever
such term or provision shall be divisible from this Agreement and shall
be deemed to be deleted from this Agreement provided always that if
such deletion substantially affects or alters the commercial basis of
this Agreement the parties shall negotiate in good faith to amend and
modify the provisions and terms of this Agreement so as to achieve so
far as possible the same economic effect without rendering the
Agreement so amended or modified illegal, invalid or unenforceable.
12 Entire agreement/Amendment/Press releases/Costs/Third Parties
12.1 This Agreement constitutes the entire agreement and understanding
of the parties and supersedes all prior oral or written agreements,
understandings or arrangements between them relating to the subject
matter of this Agreement. Neither party shall be entitled to rely on
any agreement, understanding or arrangement which is not expressly
contained in this Agreement and no change may be made to it except in
writing signed by duly authorised representatives of both parties.
12.2 No failure or delay on the part of either of the parties to
exercise any right or remedy under this Agreement shall be construed or
operate as a waiver thereof nor shall any single or partial exercise of
any right or remedy preclude the further exercise of such right or
remedy as the case may be. The rights and remedies provided in this
Agreement are cumulative and are not exclusive of any rights or
remedies provided by law.
12.3 The text of any press release or other communication to be
published by or in the media concerning the subject matter of this
Agreement shall require the approval of each of the parties.
12.4 Each of the parties shall be responsible for its respective legal
and other costs incurred in relation to the preparation of this
Agreement.
12.5 No provision in this Agreement may be relied upon by any person
not being a party hereto.
13 Notice
13.1 Any notice or other document to be given under this Agreement
shall be in writing and shall be deemed to have been duly given if left
at or sent by hand or by registered post; or by telex, facsimile or
other electronic media to a party at the address, telex or facsimile
number set out below for such party or such other address as one party
may from time to time designate by written notice to the other.
13.2 Any such notice or other document shall be deemed to have been
received by the addressee two working days (or seven working days in
the case of notices sent to the Licensor) following the date of
dispatch if the notice or other document is sent by registered post, or
simultaneously with the delivery or transmission if sent by hand or if
given by telex, facsimile or other electronic means.
13.3 The Licensor's address for service is ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
13.4 The Licensee's address for service is ▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇
14 Interpretation
14.1 The headings in this Agreement are inserted only for convenience
and shall not affect its construction.
14.2 Where appropriate words denoting a singular number only shall
include the plural and vice versa.
14.3 Reference to any statute or statutory provision includes a
reference to the statute or statutory provision as from time to time
amended, extended or re-enacted.
15 Governing law and jurisdiction
The validity, construction and performance of this Agreement
shall be governed by Northern Irish law, and shall be subject to the
exclusive jurisdiction of the High Court of Justice in Northern
Ireland.
IN WITNESS whereof these presents have been entered into the day and
year first herein written.
SIGNED by ▇▇▇▇ ▇▇▇▇▇▇▇
For SMTEK International, Inc.
SIGNED by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
For ALINA Limited
DATED 21 MARCH 2003
(1) DDL EUROPE LIMITED
(2) ALINA LIMITED
(3) SMTEK INTERNATIONAL INC
__________________________________
SHARE SALE AGREEMENT
for all the issued share capital of
SMTEK Europe Limited
_________________________________
INDEX
CLAUSE SUBJECT PAGE
1. Interpretation
2. Sale of Shares
3. Consideration
4. Conditions
5. Completion
6. Restrictive Covenants given by Vendor's Group
7. Warranties
8. Not Used
9. [Not Used]
10. Confidentiality
11. Announcements
12. Guarantee
13. Provisions Relating to this Agreement
14. Law and Jurisdiction
SCHEDULE
1. Part I - Details of the Company
Part II - Not Used
2. Not Used
3. Not Used
4. Not Used
5. Particulars of the Property
6. Non-Taxation Warranties
7. Taxation Warranties
8. Completion Arrangements
9. Vendor Protection
10. Not Used
THIS AGREEMENT is dated 21 March 2003
PARTIES:
(1) DDL EUROPE LIMITED a company registered in Northern Ireland with
number ? whose registered office is at ▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇
▇▇▇ (the "Vendor");
(2) ALINA LIMITED a company registered in Northern Ireland] with number
NI45402 whose registered office is at Marlborough House, 30 Victoria
Street, Belfast, BT1 13GS (the "Purchaser"); and
(3) SMTEK INTERNATIONAL INC a company registered in Delaware with
number whose office is at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇-▇▇▇▇ (the "Guarantor").
INTRODUCTION:
(A) The Vendor wishes to sell and the Purchaser wishes to acquire the
entire issued share capital of SMTEK Europe Limited upon and subject to
the terms of this Agreement.
(B) The Guarantor joins to this Agreement to guarantee the obligations
of the Seller hereunder.
IT IS AGREED as follows:
1. INTERPRETATION
1.1 Definitions
In this Agreement where the context admits:
"Affiliate" means, in respect of any body corporate, a body
corporate which is its subsidiary or holding company, or a company
which is a subsidiary of that holding company, and each such company;
"Associate" means any person with whom the Vendor is or may be
connected or any person for whom the Vendor may be a personal
representative;
"Audited Accounts" means the audited balance sheet of the Company
made up as at the Balance Sheet Date and the audited profit and loss
account of the Company in respect of the financial year ending on the
Balance Sheet Date including, in each case, the notes thereto and the
directors' report and auditors' report;
"Auditors" means KPMG, ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇;
"Balance Sheet Date" means 30 June 2002;
"Business Day" means a day (other than a Saturday or Sunday) on
which banks are open for business in Belfast;
"Company" means SMTEK Europe Limited details of which are given
in Schedule 1 (Details of the Company);
"Companies Order" means the Companies (Northern Ireland) Order
1986;
"Companies Orders" means statutes from time to time in force in
Northern Ireland concerning companies including (without limitation)
the Companies (Northern Ireland) Order 1986, the Companies
Consolidation (Consequential Provisions) (Northern Ireland) Order 1986,
the Companies (Northern Ireland) Order 1989, the Insolvency (Northern
Ireland) Order 1989, the Companies (Northern Ireland) Order 1990, the
Companies (No. 2) (Northern Ireland) Order 1990, the Companies (Single
Member Private Limited Companies) Regulations (Northern Ireland) 1992,
the Criminal Justice ▇▇▇ ▇▇▇▇ Parts V and VII, the Partnerships and
Unlimited Companies (Accounts) Regulations (Northern Ireland) 1994 and
the Public Offers of Securities Regulations 1995;
"Completion" means completion of the sale and purchase of the
Sale Shares in accordance with Clause 5 (Completion);
"Completion Date" means the day Completion takes place;
"Conditions" means the conditions contained in Schedule 4
(Conditions);
"Directors" means the persons named in Schedule 1 (Details of the
Company) as directors of the Company and the "Continuing Directors"
means the persons named in the Schedule as continuing directors
following Completion;
"Disclosure Letter" means the letter in agreed terms dated the
date of this Agreement from or on behalf of the Vendor to the
Purchaser;
"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 or other
security agreement or arrangement or a rental, hire purchase, credit
sale or other agreement for payment on deferred terms;
"INI Grant" means the financial assistance granted to the Company
(formerly known as DDL Electronics Limited) by Invest Northern Ireland
(formerly known as the Department of Enterprise, Trade and Investment
and also the Department of Economic Development) under the terms of a
financial assistance agreement dated 7 April 1999 and a supplemental
agreement dated 3 September 2001.
"Management Accounts" means the management accounts of the
Company for the period from the Balance Sheet Date to 21 February 2003;
"Name Licence Agreement" means an agreement in agreed terms as
set out in Schedule 11;
"Property" means the property particulars of which are set out in
Schedule 5 (Particulars of Property);
"Purchaser's Group" means the Purchaser and each of its
Affiliates (if any);
"Purchaser's Solicitors" means Tughans of Marlborough House, ▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇;
"Restricted Business" has the meaning given in Sub-Clause 6.1
(Restricted Business);
"Sale Shares" means 2,550,000 ordinary shares of 1 pound sterling
each to be bought and sold pursuant to Clause 2.1 (Sale and Purchase)
being all the issued shares in the capital of the Company;
"Subsidiaries" means the bodies corporate, details of which are
set out in Schedule 2 (The Subsidiaries);
"TA" means the Income and Corporation Taxes ▇▇▇ ▇▇▇▇;
"Tax Deed" means the deed of indemnity in agreed terms relating
to taxation, to be executed and delivered at Completion;
"Vendor's Group" means the Vendor and each of its Affiliates
other than the Company;
"Vendor's Solicitors" means ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ of ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇;
"Warranties" means the warranties and representations set out in
Paragraph 2 of Schedule 6 (Non-Taxation Warranties), and in Paragraph 2
of Schedule 7 (Taxation Warranties) given and made by the Vendor in
favour of the Purchaser.
1.2 Contents Page and Headings
In this Agreement the contents page and headings are included for
convenience only and shall not affect the interpretation or
construction of this Agreement.
1.3 Meaning of References
In this Agreement, where the context admits:
(A) references to a party or the parties is to a party or the parties
(as the case may be) to this Agreement;
(B) words and phrases the definitions of which are contained or
referred to in Part I of the Companies (Northern Ireland) Order 1986
shall be construed as having the meanings thereby attributed to them;
(C) 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);
(D) where any statement is qualified by the expression 'so far as the
Vendor is aware' or 'to the best of the Vendor's knowledge and belief'
or any similar expression, that statement shall be deemed to include an
additional statement that it has been made after due and careful
enquiry provided that the Vendor shall only be deemed to have the same
knowledge as the Purchaser, or the continuing Director strictly in so
far as the Vendor or the Guarantor has not done anything whatsoever in
relation to the Company without actual knowledge of the Purchaser or
theContinuing Director;
(E) 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 of
the Clause or paragraphs of the Schedule in which the reference
appears, and references to this Agreement include the Schedules;
(F) 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;
(G) any Northern Irish statutory provision or Northern Irish legal term
for any action, remedy, method of judicial proceedings, document, legal
status, court, official or any other legal concept or thing shall in
respect of any jurisdiction other than Northern Ireland be deemed to
include what most nearly approximates in that jurisdiction to the
Northern Irish statutory provision or Northern Irish legal term;
(H) a person shall be deemed to be connected with another if that
person is connected with another within the meaning of Section 839 TA;
(I) writing shall include any modes of reproducing words in a legible
and non-transitory form;
(J) any reference to "indemnity" and to "indemnifying" any person
against any circumstance includes indemnifying and keeping him harmless
from all demands, actions, claims and proceedings from time to time
made or brought against that person and all loss or damage and all
payments, costs or expenses or liabilities from time to time made,
suffered or incurred by that person as a direct or indirect consequence
of or which would not have arisen but for that circumstances;
(K) "Sterling" or "pounds" is to the lawful currency of the United
Kingdom;
(L) references to the masculine, feminine or neuter gender
respectively includes the other genders and any reference to the
singular includes the plural (and vice versa);
1.4 Headings
The headings and sub-headings are inserted for convenience only and
shall not affect the construction of this Agreement.
1.5 Schedules
Each of the Schedules shall have effect as if set out herein.
1.6 Words Defined in Related Documents
Words and expressions defined in the Disclosure Letter and Tax Deed but
not in this Agreement shall have the same meaning in this Agreement as
in the Disclosure Letter and the Tax Deed (as appropriate).
2. SALE OF SHARES
2.1 Sale and Purchase
Subject to the terms of this Agreement, the Vendor as beneficial owner
shall sell and the Purchaser relying on the Warranties and the other
obligations of the Vendor under this Agreement shall purchase the Sale
Shares. The Vendor agrees that the Sale Shares shall be free from all
claims, liens, charges and encumbrances and shall be sold with all
rights now or hereafter attaching thereto with effect from Completion.
2.2 No Sale of Part Only
Neither the Vendor nor the Purchaser shall be obliged to complete the
purchase of any of the Sale Shares unless the purchase of all the Sale
Shares is completed simultaneously.
2.3 Purchaser Entitled to Rights Accruing to Shares
With effect from the Completion Date the Purchaser shall be entitled to
exercise all rights attached or accruing to the Shares including,
without limitation, the right to receive all dividends, distributions
or any return of capital declared, paid or made by the Company on or
after Completion.
3. CONSIDERATION
Total Purchase Price
3.1 The total price for the Sale Shares shall be the sum of $1, which
shall be payable to the Vendor in cash on Completion.
4. CONDITIONS
4.1 The sale and purchase of the Sale Shares is conditional upon the
Conditions and in the event that the Conditions (or any of them) shall
not have been satisfied on or before 28 March 2003 this Agreement
shall lapse and no party shall make any claim against any other in
respect thereof unless the Vendor shall consent to a request by the
Purchaser that the Agreement shall not lapse in which case the Vendor
shall confirm a later date at which the provisions of this Clause 4.1
shall apply.
5. COMPLETION
5.1 Date and Place of Completion
Completion shall take place on or before 28 March 2003 subject to the
provisions of Clause 4.1 at the offices of the Vendor's Solicitors.
5.2 Completion Arrangements
At Completion the Vendor and the Purchaser shall do those things listed
in Schedule 8 (Completion Arrangements).
5.3 Not Used
6. RESTRICTIVE COVENANTS GIVEN BY VENDOR'S GROUP AND COVENANT BY THE
PURCHASER
6.1 Restricted Business
In this Clause, 'Restricted Business' means (a) in relation to the
Vendor any business activity within the United Kingdom and Ireland and
which directly or indirectly competes with the business of the Company
carried on at the date of this Agreement and (b) in relation to the
Purchaser any business activity outside the United Kingdom and Ireland
and which directly competes with the business of the Vendor's Group
(other than the Company) carried on at the date of this Agreement.
6.2 Restrictive Covenants
6.2.1 The Vendor undertakes with the Purchaser for itself and its
successors in title that it will not and that it will procure that none
of its Affiliates will:
(A) for the period of 1 year after the date of this Agreement,
either on its own account or in conjunction with or on behalf of any
person, firm or company, carry on or be engaged, concerned or
interested (directly or indirectly and whether as principal,
shareholder, director, employee, agent, consultant, partner or
otherwise) in establishing a presence in the United Kingdom or Ireland
in relation to the Restricted Business;;
(B) for the period of 2 years after the date of this Agreement,
either on its own account or in conjunction with or on behalf of any
person, firm or company, solicit or endeavour to entice away from the
Company any person who at the date of this Agreement is (or who within
a period of one year prior to the date of this Agreement has been) a
director, officer, manager, employee or servant of the Company whether
or not such person would commit a breach of contract by reason of
leaving service or office;
(C) without the consent of the Purchaser for the period of 2 years
after the date of this Agreement, either on its own account or in
conjunction with or on behalf of any person, firm or company, in
connection with any Restricted Business deal with, solicit the custom
of or endeavour to entice away from the Company any person who at the
date of this Agreement is (or who within a period of two years prior to
the date of this Agreement has been) a customer of the Company whether
or not such person would commit a breach of contract by reason of
transferring business; and
(D) for the period of 2 years after the date of this Agreement,
either on its own account or in conjunction with or on behalf of any
person, firm or company, in connection with any Restricted Business
endeavour to entice away from the Company any person who at the date of
this Agreement is (or who within a period of one year prior to the date
of this Agreement has been) a supplier of the Company whether or not
such person would commit a breach of contract by reason of transferring
business.
6.2.2 The Purchaser undertakes with the Vendor for itself and its
successors in title that it will not and that it will procure that none
of its Affiliates will:
(A) for the period of 2 years after the date of this Agreement,
either on its own account or in conjunction with or on behalf of any
person, firm or company, solicit or endeavour to entice away ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ from the Vendor's Group and
(B) without the consent of the Purchaser such consent not to be
unreasonably withheld for the period of 2 years after the date of this
Agreement, either on its own account or in conjunction with or on
behalf of any person, firm or company, in connection with any
Restricted Business deal with, solicit the custom of or endeavour to
entice away from the Vendor's Group any person who at the date of this
Agreement is (or who within a period of two years prior to the date of
this Agreement has been) a customer of the Vendor's Group whether or
not such person would commit a breach of contract by reason of
transferring business.
6.3 Vendor and Purchaser to Procure Compliance
The Vendor and the Purchaser each undertakes to the other take all such
steps as shall from time to time be necessary to ensure compliance with
the terms of Sub-Clause 6.2 above by employees and agents of (a) the
Vendor save for ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ or any of its Affiliates and (b) the
Purchaser or any of its Affiliates respectively.
6.4 Separate Covenants
Each of the undertakings in Sub-Clauses 6.2 and 6.3 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.
6.5 Reasonableness
The Vendor and the Purchaser each agrees that the restrictions and
undertakings contained in Sub-Clauses 6.2 and 6.3 are reasonable and
necessary for the protection of the other's legitimate interests in the
goodwill of the Company and the Vendor's Group respectively, but if 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.
6.6 Void or Unenforceable Restrictions
Without prejudice to Sub-Clause 6.5, 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 effect as
that which it replaces.
6.7 Confidential Information Concerning the Company
The Vendor shall not (without prior written consent) and shall procure
that no other member of the Vendor's Group nor any officer or employee
of the Vendor or any member of the Vendor's Group shall make use of or
divulge to any third party (other than to the Vendor's professional
advisers for the purpose of this Agreement in which case the Vendor
shall use all reasonable endeavours to procure that such advisers keep
such information confidential on terms equivalent to this Clause) any
confidential information relating to the Company save only:
(A) insofar as the same has become public knowledge otherwise than,
directly or indirectly, through the Vendor's breach of this Sub-Clause
6.7 or the failure of the officers, employees or professional advisers
referred to above to keep the same confidential; or
(B) to the extent required by law or by any supervisory or regulatory
body or Court of competent jurisdiction.
7. WARRANTIES
7.1 General
The Vendor hereby warrants and represents to the Purchaser in the terms
of the Warranties and acknowledges and accepts that the Purchaser is
entering into this Agreement in reliance upon each of the Warranties.
7.2 Purchaser's knowledge
The Warranties are given subject to matters fairly disclosed in this
Agreement or in the Disclosure Letter.
7.3 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.
7.4 Vendor protection provisions
The provisions of Schedule 9 shall apply to the Warranties and
Tax Deed.
7.5 Vendor Indemnity
The Vendor hereby undertakes to indemnify and keep indemnified the
Purchaser against any clawback by Invest Northern Ireland of the monies
granted to the Company pursuant to the INI Grant.
7.6 Purchaser's Claim
The Purchaser cnfirms to the Vendor that it has not formulated nor is
it in the process of formulating any claim for breach of the Warranties
and it is not its intention to make a claim for breach of Warranties
after Completion as a result of any fact or circumstance know to it.
7.7 NOT USED
7.8 Waiver of Claims
The Vendor undertakes to the Purchaser that it will not make or pursue
any claim which it has or may have against the Company, or any of the
Employees (as such term is defined in Schedule 6 (Non-Taxation
Warranties), para 2.11(B)(1)) in respect of or arising out of the
Warranties or any information supplied by them to or on behalf of the
Vendors or its professional advisers or agents on or prior to the date
hereof.
7.9 Any amount paid by the Vendor to the Purchaser in respect of any
of the provisions of this Agreement shall be treated as paid to the
Purchaser by way of pro-rata reduction of the consideration payable for
the Sale Shares.
8. NOT USED
9. NOT USED
10. CONFIDENTIALITY
10.1 Subject to Sub-Clause 10.2 and to Clause 11 and without prejudice
to Sub-Clause 6.7 each party:
(A) shall treat as strictly confidential information obtained or
received by it as a result of entering into or performing its
obligations under this Agreement and relating to the negotiations
concerning, or the provisions or subject matter of, this Agreement or
the other party ("Confidential Information"); and
(B) shall not, except with the prior written consent of the other
party (which shall not be unreasonably withheld or delayed), publish or
otherwise disclose to any person any Confidential Information.
10.2 Permitted Disclosures
Sub-Clause 10.1 shall not apply if and to the extent that the party
proposing to make such disclosure can demonstrate that:
(A) the Confidential Information was lawfully in its possession prior
to its disclosure by the other party (as evidenced by written records)
and had not been obtained from that other party; or
(B) the Confidential Information has come into the public domain
other than through its fault or the fault of any person to whom the
Confidential Information has been disclosed.
10.3 Continuance of Restrictions
The restrictions contained in this Clause on the part of the Vendor
shall survive Completion.
11. ANNOUNCEMENTS
11.1 Restriction
Subject to Sub-Clause 11.2, neither the Vendor 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).
11.2 Permitted Announcements
Sub-Clause 11.1 shall not apply if and to the extent that such
announcement is required by law or by any securities exchange or
regulatory or governmental body having jurisdiction over it (including
the US NASDAQ, London Stock Exchange, The Panel on Take-overs and
Mergers, the Financial Services Authority and 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 consultation with
the other party.
11.3 Continuance of Restrictions
The restrictions contained in this Clause on the part of the Vendor
shall survive Completion.
12. GUARANTEE
12.1 In consideration of the entry of the Purchaser into this
Agreement and the payment by it of 1.00 (one pound) (receipt of which
is hereby acknowledged) the Guarantor hereby unconditionally and
irrevocably guarantees to the Purchaser the due and punctual
performance and observance by the Vendor of its obligations under or
pursuant to this Agreement and the Tax Deed (the "Agreements") and
agrees to indemnify the Purchaser against all losses, liabilities,
costs, charges, expenses, actions, proceedings, claims and demands
which the Purchaser may suffer through or arising from any breach by
the Vendor of such obligations subject to any limits on the liability
of the Vendor in the Agreements.
12.2 If and whenever the Vendor defaults for any reason whatsoever in
the performance of any obligation or liability undertaken or expressed
to be undertaken by the Vendor under or pursuant to the Agreements, the
Guarantor shall upon demand perform (or procure the satisfaction of)
the obligation or liability in regard to which such default has been
made in the manner prescribed by the Agreements and so that the same
benefits shall be conferred on the Purchaser as it would have received
if such obligation or liability had been duly performed and satisfied
by the Vendor in default.
12.3 This guarantee is to be a continuing guarantee and is in addition
to and without prejudice to and not in substitution for any other
rights or security which the Purchaser may now or hereafter have or
hold for the performance and observance of the obligations of the
Vendor under or in connection with the Agreements.
12.4 Not Used
13. PROVISIONS RELATING TO THIS AGREEMENT
13.1 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 (with the prior written consent of the
Vendor, such consent not to be unreasonably withheld, save in respect
of an assignment to any member of the Purchaser's Group where consent
shall not be necessary) assign all or any parts of its rights and
benefits under this Agreement, including the Warranties and any cause
of action arising under or in respect of them, to any transferee of the
share capital of the Company, or to any Affiliate of the Purchaser who
may enforce them as if it had also been named in the Agreement as the
Purchaser.
13.2 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) No variation of this Agreement shall be effective unless made in
writing and signed by each of the parties.
(C) The Purchaser acknowledges that it has not been induced to enter
into this Agreement by an representation, warranty, promise or
assurance by the Vendor 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 representation, warranty, promise or assurance save for
those contained in this Agreement. The Purchaser acknowledges that its
legal advisers have explained to it the effect of this sub clause
13.2(C).
13.3 Agreement Survives Completion
The Warranties and 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.
13.4 Rights etc Cumulative and Other Matters
(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.
(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.
13.5 Not used
13.6 Further Assurance
At any time after the date hereof the Vendor shall, at the request and
cost 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.
13.7 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.
13.8 Payment to Vendor
Any payment failing to be made to the Vendor under any provision of
this Agreement may be made to the Vendor's Solicitors, whose receipt
shall be an absolute discharge.
13.9 Contracts (Rights of Third Parties) ▇▇▇ ▇▇▇▇
No term of this Agreement shall be enforceable by a third party
(whether pursuant to the Contracts (Rights of Third Parties) ▇▇▇ ▇▇▇▇
or otherwise).
13.10 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.
13.11 Costs
Each party shall bear its own costs arising out of or in connection
with the preparation, negotiation and implementation of this Agreement.
13.12 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 Sub-Clause (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 2 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 7 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 08.00 on the next
Business Day.
(B) The addresses and other details of the parties referred to in
Sub-Clause (A) are, subject to Sub-Clause (C):
Name: DDL Europe Limited, c/o SMTEK
International Inc.
[For the attention of:] ▇▇▇▇ ▇▇▇▇▇▇▇
Address: SMTEK International Inc.
Fax number: ▇▇ ▇ ▇▇▇ ▇▇▇▇▇▇▇
(C) Any party to this Agreement may notify the other parties of any
change to its address or other details specified in Sub-Clause (B),
provided that such notification shall be effective only on the date
specified in such notice or 5 Business Days after the notice is given,
whichever is later.
(D) For the avoidance of doubt, Notice given under this Agreement
shall not be validly served if sent by email.
14. LAW AND JURISDICTION
14.1 Northern Irish Law
This Agreement shall be governed by, and construed in accordance
with, Northern Ireland law.
14.2 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 Northern Ireland 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.
SCHEDULE 1
DETAILS OF THE COMPANY
Name: SMTEK EUROPE LIMITED
Number: NI 19281
Registered Office: ▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇
▇▇▇
Authorised Capital: 2,550,000 pounds sterling
Issued Capital: 2,550,000 Ordinary Shares of 1.00 pounds sterling each
Directors and other directorships: ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇ ▇▇▇▇▇
Secretary: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Accounting Reference Date: 30 June
Auditors: PricewaterhouseCoopers
Continuing Directors: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
SCHEDULE 2
SUBSIDIARIES
None
SCHEDULE 3
NOT USED
SCHEDULE 4
CONDITIONS
1. Consent of Invest Northern Ireland.
2. Consent of Ulster Bank Limited.
3. Release by Ulster Bank Limited of Guarantee given by the Guarantor.
in respect of the liabilities of the Company.
4. Ulster Bank offering facilities to the Company in terms satisfactory
to the Purchaser.
5. Invest Northern Ireland reaching agreement with the Company in
respect of loan facilities in terms satisfactory to the Purchaser.
6. Consent of the Guarantor's bankers.
7. Written confirmation from Invest Northern Ireland to the Guarantor
of the circumstances in which the INI Grant will become repayable in
terms satisfactory to the Guarantor
SCHEDULE 5
PARTICULARS OF THE PROPERTY
The property situated at ▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ , ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇
held by the Company under a Lease dated 19 January 1990 between (1)
Department of Economic Development (2) DDL Electronics Limited (now
SMTEK Europe Limited) to a term of 999 years from 19 January 1990,
subject to covenants on part of the lessee and the conditions contained
therein, which property is held at the Land Registry of Northern
Ireland under Folio AR9040L County Armagh.
The property is subject to the following registered Charges:-
(a) Charge in favour of DED
(b) Charge in favour of Ulster Bank Limited
The property is also subject to all other matters disclosed on the Land
Certificate and by a Search at the Land Registry.
SCHEDULE 6
NON-TAXATION WARRANTIES
1 INTERPRETATION
Where, in this Schedule, a term is defined in and for the purposes of a
particular paragraph or Sub-Paragraph the relevant definition shall
apply, where the context admits, for all other purposes of this
Schedule.
2 WARRANTIES AND REPRESENTATIONS
The Vendor hereby warrants and represents to and for the benefit of the
Purchaser in the following terms.
2.1 The Company and the Vendor
(A) Capacity
The Vendor and the Guarantor each have 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, authority or body and this Agreement constitutes valid and
binding obligations on the Vendor in accordance with its terms.
(B) Ownership of Sale Shares
The Vendor is the registered and sole beneficial owner of the Sale
Shares free from any Encumbrances.
(C) Liabilities Owing to or by Vendor
There is not outstanding any indebtedness or other liability (actual
or contingent) owing by the Company to any member of the Vendor's Group
or to any Director or any person connected with any of them, nor is
there any indebtedness owing to the Company by any such person.
(D) Competing Interests
No member of the Vendor's Group nor any person connected with any such
member has any interest, direct or indirect, in any business in the
United Kingdom or Ireland which competes with the business now carried
on by the Company save as the registered holder or beneficial owner of
not more than 5 per cent of any class of securities of any company
which is listed in the Official List of The London Stock Exchange
Limited or other recognised Stock Exchange.
2.2 The Company's Constitution
(A) Share Capital
The Sale Shares comprise the whole of the issued and allotted share
capital of the Company and all the shares there shown as issued are in
issue fully paid and are beneficially owned and registered as set out
therein free from any encumbrances.
(B) 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 the Company
under any option or other agreement (including conversion rights and
rights of pre-emption).
(C) Memorandum and Articles
The copy of the memorandum and articles of association of the Company
annexed to the Disclosure Letter is true and complete and has embodied
therein or annexed thereto a copy of every resolution or agreement as
is required by law to be embodied in or annexed to it, and sets out
completely the rights and restrictions attaching to each class of
authorised share capital of the Company.
(D) Company Resolutions
Neither the Company nor any class of its members has passed any
resolution (other than resolutions relating to business at annual
general meetings which was not special business).
2.3 The Company and its Investments
(A) Particulars of the Company
The particulars of the Company set out in Schedule 1 are true and
complete and the Company has no subsidiary.
(B) Investments, Associations and Branches
The Company:
(1) is not the 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);
(2) is not, and has not agreed to become, a member of any
partnership, joint venture, consortium or other unincorporated
association, body or undertaking in which it is to participate with any
other in any business or investment; and
(3) has no branch, agency or place of business outside Northern
Ireland and no permanent establishment (as that expression is defined
in the relevant double taxation relief orders current at the date of
this Agreement) outside the United Kingdom.
(C) City Code
During the ten years prior to the date of this Agreement, the
Company has not:
(1) had at any time any equity share capital listed on the London
Stock Exchange;
(2) had any dealings in its equity share capital advertised in a
newspaper on a regular basis for a continuous period of at least six
months;
(3) had at any time any equity share capital subject to a marketing
arrangement as described in Art 17.3(2)(b) of the Companies Order,
being (by way of example) subject to dealings on the Unlisted
Securities Market or Alternative Investment Market; or
(4) filed a prospectus, with the Registrar of Companies, for the
issue of any equity share capital.]
2.4 The Company's and Vendor's Solvency
(A) Winding Up
No order has been made, petition presented or resolution passed for the
winding up of the Company or the Vendor and no meeting has been
convened for the purpose of winding up the Company or the Vendor. So
far as the Vendor is aware the Company has not been a party to any
transaction which could be avoided in a winding up.
(B) Administration and Receivership
So far as the Vendor is aware 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) Unsatisfied Judgments
No distress, execution or other process been levied against the Company
or action taken to repossess goods in the Company's possession which
has not been satisfied in full. No unsatisfied judgment is outstanding
against the Company.
(E) Floating Charges
So far as the Vendor is aware no floating charge created by the Company
has crystallised.
(F) Analogous Events
No event analogous to any of the foregoing has occurred in or
outside Northern Ireland.
2.5 Not Used.
2.6 Not Used.
2.7 The Company's Business and the Effect of Sale
(A) Business Since the Balance Sheet Date
Since the Balance Sheet Date so far as the Vendor is aware no share or
loan capital has been issued or agreed to be issued by the Company;
(B) Commission
So far as the Vendor is aware no one is entitled to receive from the
Company any 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
So far as the Vendor is aware the acquisition of the Sale Shares by
the Purchaser or compliance with the terms of this Agreement will not:
(1) cause the Company to lose the benefit of any right or privilege it
presently enjoys or relieve any person of any obligation to the Company
(whether contractual or otherwise) or enable any person to determine
any such obligation or any contractual right or benefit enjoyed by the
Company or to exercise any right whether under an agreement with the
Company or otherwise;
(2) result in any present or future indebtedness of the Company
becoming due or capable of being declared due and payable prior to its
stated maturity;
(3) give rise to or cause to become exercisable any right of pre-
emption;
(4) result in a breach of, or constitute a default under any order,
judgement or decree of any court or government agency by which the
Company is bound or subject; or
(5) result in a breach of, or constitute a default under the terms,
conditions or provisions of any agreement, understanding, arrangement
or instrument (including, but not limited to, any of the Company's
contracts);
(6) and, to the best of the knowledge and belief of the Vendor, the
Company's relationships with clients, customers, suppliers and
employees will not be adversely affected thereby and the Vendor is not
aware of any circumstances indicating that, nor has it been informed or
is otherwise aware that, any person who now has business dealings with
the Company would or might cease to do so from and after Completion.
2.8 The Company's Assets
(A) Assets and Charges
(1) So far as the Vendor is aware except for current assets disposed
of by the Company in the ordinary course of its business, the Company
is the owner legally and beneficially of and has good marketable title
to all assets included in the Audited Accounts and all assets which
have been acquired by the Company since the Balance Sheet Date and no
encumbrance is outstanding nor is there any agreement or commitment to
give or create or allow any encumbrance over or in respect of the whole
or any part of the Company's assets, undertaking, goodwill or uncalled
capital and no claim has been made by any person that he is entitled to
any such encumbrance.
(1) Not Used.
(2) Not Used.
(3) So far as the Vendor is aware no charge in favour of the Company is
void or voidable for want of registration.
(B) Property
Title to Property
(a) The particulars of the Property shown in Schedule 5 (Particulars of
the Property) are true and correct. Except as 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 replies to requisitions on title raised by the Purchaser are
true and accurate in all material respects.
2.9 The Company's Contracts
(A) Substantial or significant contracts
Neither the Vendor or the Guarantor has entered into any contract,
agreement, transaction, obligation, commitment, understanding,
arrangement or liability for or on behalf of the Company without the
actual knowledge of the Purchaser or the continuing Director which are
now outstanding or unperformed and which involves any of the following:
(1) obligations on the part of the Company which will cause or are
likely to cause the Company to incur expenditure or an obligation to
pay money;
(2) obligations on the part of the Company to purchase any specified
minimum quantity or any specified minimum percentage of its total
requirement for raw materials or other stock in trade from any one
supplier;
(3) the supply by the Company of products or services whether by way of
lease or outright sale or otherwise to any one customer such that the
value of such supplies exceeds or is likely to exceed 5 per cent of the
total turnover of the Company in the financial year ending 30 June 2003
or in any subsequent year.
(B) Sureties
Neither the Vendor nor any member of the Vendor's Group or any third
party has 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 the
Vendors or any member of the Vendor's Group and 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.
(C) Powers of Attorney
So far as the Vendor is aware, 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 is not aware of any person purporting to do so.
(D) Insider Contracts
(1) So far as the Vendor is aware there is not outstanding, and there
has not at any time during the last six years been outstanding, any
agreement or arrangement to which the Company is a party and in which
(a) the Vendor;
(b) any member of the Vendor's Group;
(c) any person beneficially interested in the Company's share
capital;
(d) any Director; or
(e) any person connected with any of them
is or has been interested, whether directly or indirectly.
(2) So far as the Vendor is aware the Company is not a party to, nor
have its profits or financial position during such period been affected
by, any agreement or arrangement which is not entirely of an arm's
length nature.
(3) So far as the Vendor is aware all costs incurred by the Company
have been charged to the Company and not borne by any other member of
the Vendor's Group.
(E) Options and Guarantees
So far as the Vendor is aware the Company is not a party to any option
or pre-emption right, or a party to nor has it given any guarantee,
suretyship, comfort letter or any other obligation (whatever called) to
pay, 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.
2.10 The Company and its Bankers
Off balance Sheet Financing
The Vendor or the Guarantor have not engaged on behalf of the Company
in any borrowing or financing not required to be reflected in the
Audited Accounts.
2.11 Miscellaneous
All Material Matters Disclosed
All information contained or referred to in this Agreement (including
the Schedules and the documents in agreed terms) and in the Disclosure
Letter or in any annexure thereto or which has otherwise been disclosed
by or on behalf of the Vendor to the Purchaser or its advisers/others
on or prior to the date hereof is true and accurate in all material
respects and the Vendor is not aware of any other fact or matter which
renders any such information misleading because of any omission,
ambiguity or for any other reason.
SCHEDULE 7
TAXATION WARRANTIES
1. INTERPRETATION
1.1 In this Schedule, where the context admits:
'Taxation' and 'Tax' includes (without limitation) corporation
tax, advance corporation tax, the charge under s 419 of the Taxes ▇▇▇
▇▇▇▇, income tax, capital gains tax, the charge under s 601(2) of the
Taxes ▇▇▇ ▇▇▇▇, value added tax, excise duties, the charge to tax under
Sched 9A of the Value Added Tax ▇▇▇ ▇▇▇▇, 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 s 102 of the Finance ▇▇▇ ▇▇▇▇
and any payment whatsoever which the Company may be or become bound to
make to any person 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 Income and Corporation Taxes ▇▇▇ ▇▇▇▇;
'CAA 2001' means the Capital ▇▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇;
'TCGA 1992' means the Taxation of Chargeable Gains ▇▇▇ ▇▇▇▇;
'ITA 1984' means the Inheritance Tax ▇▇▇ ▇▇▇▇;
'Value Added Tax' and 'VAT' mean value added tax as provided for
in the Value Added Tax ▇▇▇ ▇▇▇▇ 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.
2. TAXATION WARRANTIES AND REPRESENTATIONS
The Vendor hereby warrants and represents to and for the benefit of the
Purchaser in the following terms which in each case shall be qualified
by the words "So far as the Vendor is aware"
2.1 General Taxation Matters
(A) Residence
The Company is and always has been resident for taxation purposes only
in the jurisdiction in which it is incorporated.
(B) Tax Provisions
Full provision or reserve has been made in the Audited Accounts for all
taxation assessed or liable to be assessed on the Company or for which
it is accountable in respect of income, profits or gains earned,
accrued or received, or deemed to be earned accrued or received on or
before the Balance Sheet Date or any event on or before the Balance
Sheet Date including distributions made down to such date or provided
for in the Audited Accounts and full provision has been made in the
Audited Accounts for deferred taxation calculated in accordance with
generally accepted accounting principles.
(C) Returns
The Company has properly and punctually made all returns and provided
all information required for taxation purposes and none of such returns
is disputed or is likely to be disputed by the Inland Revenue or any
other authority concerned (in the United Kingdom or elsewhere) and the
vendor is not aware that any event has occurred which would or might
give rise to a payment under the Tax Deed.
(D) Payment of Tax
(i) 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.
(ii) The Company has not made any payments representing instalments of
corporation tax pursuant to the Corporation Tax (Instalment Payments)
Regulations 1998 in respect of the Company's current or preceding
accounting period and neither is the Company under any obligation to do
so.
(E) Audits
The Company has not been subject to any visit, audit, investigation,
discovery, or access order by any taxation authority and there are no
circumstances existing which make it likely that a visit, audit,
investigation, discovery, or access order will be made.
(F) Special Arrangements and Concessions
(1) Full details of any special arrangements and concessions
(including, without limitation, any arrangements and concessions
relating to the taxation of foreign exchange gains and losses and/or
financial instruments and/or loan relationships) which relate to or
affect the Company and which have been made with any tax authority or
relied upon by the Company, in either case within the last six years,
are set out in the Disclosure Letter.
(2) The Company has not taken any action which has had, or might
have, the result of prejudicing or disturbing any such special
arrangement or concession.
(G) Calculation of Tax Liability
The Company has sufficient records relating to past events to permit
accurate calculation of the tax liability or relief which would arise
upon a disposal or realisation on completion of each asset owned by the
Company at the Balance Sheet Date or acquired by the Company since that
date but before Completion.
(H) Payments under deduction
All payments by the Company to any person which ought to have been made
under deduction of tax have been so made and the Company has (if
required by law to do so) provided certificates of deduction to such
person and accounted to the Inland Revenue for the tax so deducted.
(I) Claims, Elections, Clearances and Consent
Claims by the Company
The Company has made no claim under any of the following:
(1) section 279 of the TCGA 1992 (assets situated outside the United
Kingdom);
(2) section 24(2) of the TCGA 1992 (assets of negligible value);
(3) section 280 of the TCGA 1992 (tax on chargeable gains payable by
instalments);
(4) sections 242 and 243 of the Taxes Act 1988 (surplus franked
investment income); or
(5) section 584, 585 or 723 of the Taxes ▇▇▇ ▇▇▇▇ (unremittable
income arising outside the United Kingdom);
(6) section 139, FA 1993 (deferral of unrealised exchange gains);
(7) section 242(2), TCGA 1992 (small part disposals of land).
Elections
The Disclosure Letter contains full particulars of all elections made
by the Company under the following provisions:
(8) sections 524, 527 and 534 of the Taxes Act 1988 (lump sum
receipts for patents and copyright);
(9) section 85 of the CAA 2001 (short life assets); and
(10) section 290 of the CAA 2001 (leasehold interests).
Clearances and Consents
There are annexed to the Disclosure Letter copies of all correspondence
relating to applications for clearance under any enactment relating to
taxation. All particulars furnished to any Taxation Authority in
connection with an application for clearance or consent by the Company
or on its behalf or affecting the Company has been made and obtained on
the basis of full and accurate disclosure to the relevant Taxation
Authority of all relevant material facts and considerations; and any
transaction for which clearance or consent was obtained, has been
carried into effect only in accordance with the terms of the relevant
clearance or consent.
2.2 Corporation Tax, including Corporation Tax on chargeable gains
(A) Distributions
(1) No distribution within the meaning of ss 209, 210 and 211 of the
Taxes Act 1988 has been made (or will be deemed to have been made) by
the Company except dividends shown in its audited accounts nor is the
Company bound to make any such distribution.
(2) No securities (within the meaning of s 254(1) of the Taxes Act
1988) issued by the Company and remaining in issue at the date hereof
were issued in such circumstances that the interest payable thereon
falls to be treated as a distribution under either s 209 (2)(d), 209
(2)(da) or s 209(2)(e) of the Taxes ▇▇▇ ▇▇▇▇.
(3) The Company has not been engaged in nor been a party to any of
the transactions set out in sections 213 to 218 inclusive of the Taxes
▇▇▇ ▇▇▇▇, nor has it made or received a chargeable payment as defined
in Section 218(i) Taxes ▇▇▇ ▇▇▇▇.
(4) The Company has not received any capital distribution to which
the provisions of s 189 of the TCGA 1992 could apply.
(5) The Company has not used any credit, relief or set off that may
be disallowed pursuant to s 237 of the Taxes ▇▇▇ ▇▇▇▇.
(6) The Company has not issued any share capital, nor granted options
or rights to any person which entitles that person to require the issue
of any share capital to which the provision of s 249 of the Taxes Act
1988 could apply.
(7) The Company has not since 8 October 1996:
(a) treated as franked investment income any qualifying distribution
received which would fall to be treated as if it were a foreign income
dividend pursuant to the provisions of Schedule 7 of the Finance ▇▇▇
▇▇▇▇; or
(b) made any qualifying distribution which would fall to be treated
as a foreign income dividend pursuant to the provisions of Schedule 7
of the Finance ▇▇▇ ▇▇▇▇.
(B) Advance Corporation Tax/Shadow Advance Corporation Tax
(i) The Company does not have any unrelieved surplus advance
corporation tax eligible for carry and nor has the Company at any time
after 5 April, 1999 set surplus advance corporation tax against
corporation tax which could be displaced so as to give rise to a
liability of the Company to make a payment of or in respect of
corporation tax.
(ii) The Company does not have any surplus shadow advance corporation
tax nor will the Company at any time in the future be treated as having
surplus shadow advance corporation tax as a consequence of any act or
omission of the Vendor or a company within the Vendor's group.
(C) ACT carry forward
There has been no major change in the nature or conduct of any trade or
business carried on by the Company within the meaning of s 245 of the
Taxes ▇▇▇ ▇▇▇▇.
(D) Capital allowances
All the expenditure which the Company has incurred or may incur
under any subsisting commitment on the provision of machinery, plant or
buildings has qualified or will qualify (if not deductible as a
trading expense for trade carried on by the Company) for writing-down
allowances or industrial building allowances (as the case may be) under
CAA 2001 and in relation to expenditure incurred but for which no claim
has been made a claim made in the Company's next corporation tax self-
assessment return for such allowances in respect of such expenditure
would not be barred by virtue of section 58(4), CAA 2001.
(E) Leased assets
The Company has not made any claim for capital allowances in
respect of any asset which is leased to or from or hired to or from the
Company and no election affecting the Company has been made or agreed
to be made under sections 177 or 183, CAA 2001 in respect of such
assets.
(F) Finance leases
The Company is not a lessee under a lease to which the provisions
of Chapter 17 of Part 2, CAA 2001 apply or could apply.
(G) Long life assets
The Company has not incurred any long-life asset expenditure
within the meaning of section 90, CAA 2001.
(H) Industrial buildings
None of the assets of the Company, expenditure on which has
qualified for a capital allowance under Part 3, CAA 2001, has at any
time been used otherwise than as an industrial building or structure.
(I) Tax Losses
There has not within the three years preceding the date hereof been a
major change in the nature or conduct of any trade or business carried
on by the Company within the meaning of s 768 or 768 (A-E) of the Taxes
▇▇▇ ▇▇▇▇.
(J) Investment Company Deductions
Either
(1) There has not been a change in ownership of the Company within
the meaning of s 769 of the Taxes ▇▇▇ ▇▇▇▇ in the period commencing
three years before the Balance Sheet Date or in respect of any
accounting period commencing prior to that date the corporation tax
computations for which are still under enquiry with the Inland Revenue.
Or
(1) In respect of the changeof ownership, full details of which are
contained in the Disclosure Letter, there has not been:
(a) since any such change, any significant increase in the amount of
Company's capital for the purposes of s 768(B)(1) of the Taxes ▇▇▇
▇▇▇▇;
(b) any change in the nature or conduct of the business carried on by
the Company within the period beginning three years before such change
to three years thereafter;
(c) any acquisition of an asset to which s 171 of the TCGA 1992
applied after the change of ownership together with a disposal or part
disposal of that asset within the period commencing with the change in
ownership and ending three years thereafter;
(d) and the change of ownership did not occur at a time after the
scale of activities of the business carried on by the Company has
become small or negligible and before any considerable revival of the
trade.
(K) Section 765 of the Taxes Act 1988
The Company has not without the prior consent of the Treasury been a
party to any transaction for which consent under s 765 of the Taxes ▇▇▇
▇▇▇▇ was required. Where such consent would have been required but for
the provisions of s 765A(1) of the Taxes ▇▇▇ ▇▇▇▇, the Company has
complied in full with the requirements of The Movements of Capital
(Required Information) Regulations 1990 and a copy of the notification
required pursuant thereto is annexed to the Disclosure Letter.
(L) Controlled Foreign Companies
No notice of the making of direction under section 747, TA 88 has been
received by the Company and no circumstances exist which would entitle
the Inland Revenue to make such a direction or to apportion any profits
of a controlled foreign company to the Company pursuant to section 752,
TA 88.
(M) Depreciatory Transactions
No loss which might accrue on the disposal by the Company of any
share in or security of any company is liable to be reduced by virtue
of any depreciatory transaction within the meaning of s 176 and s 177
of the TCGA 1992 nor is any expenditure on any share or security liable
to be reduced under s 125 of the TCGA 1992.
(N) Value Shifting
The Company has not been party to any scheme or arrangement
whereby the value of an asset has been materially reduced as set out in
sections 29-34 TCGA 1992.
(O) Connected Party and Intra Group Transactions
(1) The Company has not disposed of or acquired any asset to or from
any person connected with it within s 839 of the Taxes Act 1988 or in
circumstances such that the provision of s 17 of the TCGA 1992 could
apply to such disposal or acquisition, nor given or agreed to give any
consideration to which section 128(1)(2) TCGA 1992 could apply.
(2) The Company has not acquired any asset (past or present) from any
other company then belonging to the same group of companies as the
Company within the meaning of s 170 TCGA 1992.
(3) The Company has not made, and is not entitled to make, a claim
pursuant to s 172 of the TCGA 1992.
(P) Transactions between connected persons
No allowable loss has accrued to the Company to which section
18(3), TCGA will apply.
(Q) Transfer Pricing
The Company is not a party to any transaction or arrangement
under which it may be required to pay for any asset or any services or
facilities of any kind an amount which is in excess of the market value
of that asset or those services or facilities, neither is or was the
Company a party to any transaction or arrangements to which the
provisions of section 770A and Schedule 28 ▇▇, ▇▇▇▇▇ ▇▇▇ ▇▇▇▇ may apply
and nor will the Company receive any payment for an asset or any
services or facilities of any kind that it has supplied or provided or
is liable to supply or provide which is less than the market value of
that asset or those services or facilities.
(R) Base Values
(1) The Disclosure Letter contains full and accurate particulars of:
(a) the extent to which the book value of an asset or a particular
class of assets as shown in the Audited Accounts is in excess of:
(i) the amount falling to be deducted under s 38 of the TCGA 1992
from the consideration receivable on a disposal of that asset;
(ii) the balance of the qualifying expenditure attributable to that
asset or pool of assets, as the case may be, brought forward into the
accounting period in which Completion will occur and save to the extent
disclosed, no such excess exists; and
(b) the extent to which provision for taxation in respect of such
excess has been made in the Audited Accounts.
(2) No election under s 35 of the TCGA 1992 is in effect in relation
to the Company and full particulars are given in the Disclosure Letter
of the first relevant disposal for the purposes of the said s 35.
(3) The Disclosure Letter contains full and accurate particulars of
all assets held by the Company on or after 6 April 1988 in respect of
which relief is or would be available under Schedule 4 of the TCGA 1992
upon disposal.
(4) No asset owned by the Company is subject to a deemed disposal and
re-acquisition under Schedule 2, TCGA so as to restrict the extent to
which the gain or loss over the period of ownership may be apportioned
by reference to straight-line growth.
(S) Roll-over Relief
The Disclosure Letter contains full and accurate particulars of
all claims made by the Company under ss 152 to 159, s 162, ss 242 to
245, s 247 or s 248 of the TCGA 1992 and no such claim or other claim
has been made by any other person (in particular pursuant to s 165 or s
175 TCGA 1992) which affects or could affect the amount or value of the
consideration for the acquisition of any asset by the Company taken
into account in calculating liability to corporation tax on chargeable
gains on a subsequent disposal.
(T) Pre-entry Losses
The Disclosure Letter contains details of all pre-entry losses
falling within of Sched 7A, para 1(2)(a) of the TCGA 1992 which have,
or will have, accrued to the Company prior to Completion and details of
all assets which, if disposed of on Completion, would give rise to an
allowable loss.
(U) Foreign Exchange Gains and Losses
(1) No exchange gain or loss of the Company has been calculated in
accordance with Sched 15 of the Finance ▇▇▇ ▇▇▇▇ and regulations made
thereunder.
(2) The Disclosure Letter contains full details of all claims to
defer unrealised exchange gains made by the Company pursuant to s 139
of the Finance ▇▇▇ ▇▇▇▇.
(3) The Disclosure Letter contains details of all debts to which the
provisions of Chapter II of Part II Finance ▇▇▇ ▇▇▇▇ do not apply by
virtue of reg 3 of the Exchange Gains and Losses (Transitional
Provisions) Regulations 1994.
(4) The Company has not received any direction as referred to in s
136(1)(d) or s 136A(7)(b) of the Finance ▇▇▇ ▇▇▇▇.
(V) Financial Instruments
(1) The Company has not entered into any transactions for which the
provisions of s 165, s 166 and s 167 of the Finance ▇▇▇ ▇▇▇▇ could
apply.
(2) The Disclosure Letter contains full details of all qualifying
contracts with non resident persons for the purposes of s 168 of the
Finance ▇▇▇ ▇▇▇▇.
(W) Loan Relationships
(i) The Company applies an authorised accruals method of accounting
(as that term is defined in s 85 of the Finance Act 1996) in respect of
all loan relationships (as that term is defined in s 81 of the Finance
Act 1996) to which it is a party.
(ii) The Disclosure Letter contains full and accurate particulars of
any loan relationship to which the Company is a party, whether as
debtor or creditor, where any other party to that loan relationship is
connected with the Company for the purposes of Chapter II of Part IV of
the Finance ▇▇▇ ▇▇▇▇.
(iii) The Disclosure Letter contains full and accurate particulars of
any loan relationship to which the Company is a party and to which s 92
or s 93A or 93B of the Finance ▇▇▇ ▇▇▇▇ applies.
(iv) The Disclosure Letter contains full and accurate particulars of
any debtor relationship (as that term is defined in s 103 of the
Finance Act 1996) of the Company which relates to a relevant discounted
security (as that term is defined in Sched 13, para 3 of the Finance
Act 1996) to which Sched 9, para 17 or para 18 of the Finance ▇▇▇ ▇▇▇▇
applies.
(v) The Company has not entered into any transaction to which Sched
9, para 11(1) of the Finance ▇▇▇ ▇▇▇▇ applies.
(vi) The Company has not been, and is not entitled to be, released
from any liability which arises under a debtor relationship (as defined
by s103 Finance ▇▇▇ ▇▇▇▇ )of that Company.
(vii) The Disclosure Letter contains full and accurate particulars of
(i) any loan relationship to which the Company is a party, whether as
debtor or creditor, to which Sched 15, para 8 of the Finance ▇▇▇ ▇▇▇▇
has applied or will apply on the occurrence of a relevant event (as
defined in para 8(2)) in respect thereof; (ii) in each case, the amount
of any deemed chargeable gain or deemed allowable loss which has arisen
or will arise in consequence of that relevant event; and (iii) any
election made pursuant to Schedule 15, paragraph 9 of the Finance ▇▇▇
▇▇▇▇.
(viii) The Company has not been a party to a loan relationship
which had an unallowable purpose (within the meaning of paragraph 13 of
Schedule 9, Finance Act 1996).
(X) Chargeable Debts
The Company is not owed a debt, other than a debt on a security, on the
disposal or satisfaction of which a liability to corporation tax on
chargeable gains will arise by reason of section 251, TCGA.
(Y) Chargeable Policies
The Company has not acquired benefits under any policy of assurance
otherwise than as original beneficial owner.
(Z) Non-resident Companies or Trusts
There has not accrued any income, profit or gain in respect of which
the Company may be liable to corporation tax by virtue of the
provisions of s 13 TCGA 1992 or Chapter IV of Part XVII Taxes ▇▇▇ ▇▇▇▇.
(AA) Company Migration
(1) The Company is not a dual resident company for the purposes of s
139(3) or s 160 or s 188 of the TCGA 1992.
(2) There are no circumstances pursuant to which the Company has or
may become liable to tax pursuant to s 185 (Deemed disposal of assets
on company ceasing to be resident in UK), s 186 (Deemed disposal of
assets on company ceasing to be liable to UK tax), s 187 (Postponement
of charge on deemed disposal) of the TCGA 1992 or s 132 (Liability of
other persons for unpaid tax) Finance ▇▇▇ ▇▇▇▇ or s 191 of the TCGA
1992 (Non-payment of tax by non-resident companies).
(BB) Leaseholds
The Company is not liable to taxation under the provisions of ss 34, 35
and 36 Taxes Act 1988 nor does it own any leasehold interest to which
the said s 35 may apply.
(CC) Land Sold and Leased Back
The Company has not entered into to any transaction to which the
provisions of section 779 or 780, TA 88 have been or could be applied.
(DD) Non- Deductible payments
No rents, interest, annual payments or other sums of an income nature
paid or payable by the Company or which the Company is under an
obligation to pay in the future are wholly or partially disallowable as
deductions, management expenses or charges in computing profits for the
purposes of corporation tax by reason of the provisions of ss 74, 125,
338 339, 577, 577A, 779 to 784, and 787 of the Taxes ▇▇▇ ▇▇▇▇ or
otherwise.
2.3 Corporation Tax - Groups of Companies.
(A) Group Income
The Disclosure Letter contains particulars of all elections made by the
Company under s 247 of the Taxes Act 1988 and the Company has not at
any time prior to 6 April 1999 paid any dividend without paying advance
corporation tax or at any time made any payment without deduction of
income tax in the circumstances specified in sub-section (6) of that
section. In respect of each such election the conditions of s 247 of
the Taxes Act 1988 have at all times been and continue to be satisfied.
(B) Transfer of Tax Refunds
Refunds arrangements and agreements relating to the transfer of tax
refunds to which the Company is or has been a party; and
(1) all claims by the Company for the transfer of tax refunds were
when made and are now valid and have been or will be allowed by way of
discharging the liability of the recipient company to pay any
corporation tax;
(2) the Company has not made nor is liable to make any payment under
any such arrangement save in consideration for the transfer of tax
refunds allowable to the Company by way of discharge from liability to
corporation tax and equivalent to the taxation for which the Company
would have been liable would it not have been for the transfers;
(3) the Company has received all payments due to it under any such
arrangement or agreement or transfer of tax refunds made by it and the
payments are not liable to be refunded in whole or in part.
(4) No such payments exceeds or could exceed the amount permitted by
S102 (7) FA 1989.
(5) save in respect of this Agreement, there have not been in
existence in relation to the Company any such arrangements as are
referred to in s 410 of the Taxes ▇▇▇ ▇▇▇▇.
(C) Surrender of Advance Corporation Tax
The Disclosure Letter contains particulars of all arrangements and
agreements to which the Company is or has been a party relating to the
surrender of advance corporation tax made or received by the Company
under s 240 of the Taxes Act 1988 and:
(1) the Company has not paid nor is liable to pay any amount in
excess of the advance corporation tax surrendered to it nor for the
benefit of any advance corporation tax which is or may become incapable
of set off against the Company's liability to corporation tax;
(2) the Company has received all payments due to it under any such
arrangement or agreement for all surrenders of advance corporation tax
made by it and the payments are not liable to be refunded in whole or
in part;
(3) No payment exceeds or could exceed the amount permitted s 240(8)
TA 1988.
(4) save in respect of this Agreement, there have not been in
existence in relation to the Company any such arrangements as are
referred to in s 240(11) of the Taxes ▇▇▇ ▇▇▇▇.
(D) Group Relief and Consortium Relief
The Disclosure Letter contains particulars of all arrangements and
agreements relating to group relief (as defined by S402 Taxes Act 1988)
to which the Company is or has been a party and:
(1) all claims by the Company for group relief were when made and are
now valid and have been or will be allowed by way of relief from
corporation tax;
(2) the Company has not made nor is liable to make any payment under
any such arrangement or agreement save in consideration for the
surrender of group relief allowable to the Company by way of relief
from corporation tax and equivalent to the taxation for which the
Company would have been liable had it not been for the surrender;
(3) the Company has received all payments due to it under any such
arrangement or agreement for surrender of group relief made by it and
no such payment is liable to be repaid, in whole or in part and no such
payment exceeds the amount permitted by Section 402(6) TA 1988;
(4) the Company is not a dual resident investing company within the
meaning of s 404 of the Taxes ▇▇▇ ▇▇▇▇; and
(5) save in respect of this Agreement, there are not nor have there
been in existence in relation to the Company any such arrangements as
are referred to in s 410 of the Taxes ▇▇▇ ▇▇▇▇.
(E) Group Reconstructions
The Company has not been party to any scheme of reconstruction or
reorganisation to which the provisions of s 139 of the ▇▇▇▇ ▇▇▇▇, ▇ ▇▇▇
▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇ or to which s 343 of the Taxes Act 1988 could
apply.
(F) Leaving the Group
The execution or completion of this agreement or any other event since
the Balance Sheet Date will not result in any chargeable asset being
deemed to have been disposed of and re-acquired by the Company for
Taxation purposes pursuant to section 178 or 179, TCGA or as a result
of any other Event since the Balance Sheet Date.
2.4 Close Companies
(1) The Company is not and has not been at any time within the six
years ended at the Balance Sheet Date a close company within s 414 and
s 415 of the Taxes ▇▇▇ ▇▇▇▇.
(2) No distribution within s 418 of the Taxes Act 1988 has been made
by the Company.
(3) The Company has not made (and will not be deemed to have made)
any loan or advance to a participator or an associate of a participator
so as to become liable to make any payment under s 419,420 & 421 of the
Taxes Act 1988 and the Company has not released or written off or
agreed to release or write off the whole or any part of such loans or
advances..
(4) The Company is not, and has not since 31 March 1989 been, a close
investment holding company within the meaning of s 13A of the Taxes ▇▇▇
▇▇▇▇.
2.6 Taxation of Employees and Agents
(A) PAYE
The Company has properly operated the Pay As You Earn system deducting
tax as required by law from all payments to or treated as made to
employees and ex-employees of the Company and punctually accounted to
the Inland Revenue for all tax so deducted and all returns required
pursuant to s 203 of the Taxes Act 1988 and regulations made thereunder
have been punctually made and are accurate and complete in all
respects.
(B) Dispensations and PAYE Audits
The Disclosure Letter contains full details of all dispensations
obtained by the Company and all notifications given by the Inland
Revenue under s166 TA 1988 and all details of any visit from the Audit
Office of the Inland Revenue within the last six years including full
details of any settlement made pursuant thereto.
(C) Benefits for Employees
(1) The Company has not made any payment to or provided any benefit
for any officer or employee or ex-officer or ex-employee of the Company
which is not allowable as a deduction in calculating the profits of the
Company for taxation purposes.
(3) The Company has not issued any shares in the circumstances
described in s 77(1) and has complied with s 85 of the Finance ▇▇▇
▇▇▇▇.
(4) The Company has not made any payment to which s 313 of the Taxes
▇▇▇ ▇▇▇▇ applies.
(D) Personal Service Companies
Any payment made to or for the direct or indirect benefit of any
person who is or might be regarded by any taxation authority as an
employee of the Company is made to such person direct and is not made
to any company or other entity associated with that person.
(E) Sub-Contractors
The Company has properly operated the sub-contractors' scheme under
Chapter IV Part XIII of the Taxes Act 1988 deducting tax as required by
law from all payments made to sub-contractors of the Company and
punctually accounted to the Inland Revenue for all tax so deducted.
(F) National Insurance
The Company has paid all national insurance and social security
contributions including employer contributions for which it is liable
and has kept proper books and records relating to the same and has not
been a party to any scheme or arrangement to avoid any liability to
account for primary or secondary national insurance contributions.
2.7 Value Added Tax: General Warranties
(A) The Company is duly registered and is a taxable person for the
purposes of VAT and such registration is not subject to any conditions
imposed by or agreed with the Commissioners of Customs & Excise.
(B) The Company has within the last six years complied in all
material respects with all statutory requirements, orders, provisions,
directions or conditions related to value added tax.
(C) All input tax for which the Company has claimed credit has been
paid by the Company in respect of supplies made to it relating to goods
or services used or to be used for the purpose of the Company's
business.
(D) The Company has not, at any time in the last 10 years, received
any income which would be deemed to fall within Schedule 9 VATA, 1994
(Exemption).
(E) The Company maintains complete, correct and up-to-date records
for the purposes of all legislation relating to VAT and is not subject
to any condition imposed by the Commissioners of Customs & Excise
under paragraph 6 Schedule 11 VATA relating to the preservation of
information.
(F) The Company is not in arrears with any payment or returns under
legislation relating to VAT or excise duties, or liable to any abnormal
or non-routine payment of VAT, or any forfeiture or penalty, or to the
operation of any penal provision.
(G) The Company has not within the last 6 years ending on the date of
this Agreement been served with any penalty liability notice under
section 64 (3) VATA or any surcharge liability notice under section 59
VATA or been issued with any written warning under section 76(2) VATA.
(H) The Company has not within the last six years been required by
the Commissioners of Customs & Excise to give security under paragraph
4 Schedule 11 VATA.
(I) The Company has not been or applied for treatment as a member of
a group for VAT purposes under Section 43 VATA and no transaction has
been effected in consequence of which the relevant Group Member is or
may be held liable for any VAT arising from supplies made by another
company.
(J) The Company has no interest in any assets treated as items under
Part XV of the Value Added Tax Regulations 1995 (Capital Goods Scheme).
(K) The Company is not, and has not been agreed to become, an agent,
manager or factor for the purposes of Section 47 VATA of any person who
is not resident in the United Kingdom; and
(L) The Company is not and is not required to be, registered for VAT
in any country other than the UK.
(M) The Company has not paid and is not liable to pay any interest
pursuant to s 74 of the Value Added Tax ▇▇▇ ▇▇▇▇.
(N) The company has not within the last six years disposed of or
acquired any business or assets in the circumstances mentioned in
Section 49 VATA or Article 5 of the Value Added Tax (Special
Provisions) Order 1995.
(O) All goods and services supplied by the company, or goods imported
by the company, in respect of which the company has claimed credit for
input tax under the rules set out in VATA, are used or to be used
wholly for the purposes of its business.
(P) There are set out in the Disclosure Letter details of all
outstanding claims made by each Group Member under Section 36 VATA -
Bad Debt.
(Q) The company has not been a party to any transaction or
arrangement as a result of which a direction has been or may be given
under Schedule 9A VATA (anti-avoidance provisions for groups of
companies).
(R) The company has not received any supplies of the type described
in Schedule 5 VATA.
2.7.1 VAT: Property Transactions
(A) The company has not incurred any liability in respect of VAT
(whether to HM Customs & Excise or to any other person) by reason of
the provisions of paragraph 2 (1) Schedule 10 VATA and there are no
circumstances whereby the company could become so liable as a result of
a person making an election under that paragraph.
(B) The company nor any relevant associate (within the meaning of
paragraph 3 (7) Schedule 10 VATA) has not made any election under
paragraph 2 (1) Schedule 10 VATA in respect of any land in, over or in
respect of which the company has any interest , right or licence to
occupy and the company is not aware of any intention to make such an
election.
2.8 Stamp Duties
(A) All stampable documents wheresoever executed (other than those
which have ceased to have any legal effect) to which the Company is a
party have been duly stamped or stamped with a particular stamp
denoting that no stamp duty is chargeable. Since the Balance Sheet
Date there have been and are no circumstances or transactions to which
the Company is or has been a party such that a liability to stamp duty
or any penalty in respect of such duty will arise on the Company.
(B) Stamp Duty Reserve Tax
Since the Balance Sheet Date the Company has not incurred any liability
to or been accountable for any stamp duty reserve tax and there has
been no agreement within section 87(1), Finance ▇▇▇ ▇▇▇▇ which could
lead to the Company incurring such a liability or becoming so
accountable.
2.9 Inheritance Tax and Gifts
(A) No transfers of value and associated operations
The Company has made no transfers of value within sections 94 and
202, ITA 1984, nor has the Company received a transfer of value such
that liability might arise under section 199, ITA 1984, nor has the
Company been party to associated operations in relation to a transfer
of value as defined by section 268, ITA 1984.
(B) Inland Revenue charge
There is no unsatisfied liability to inheritance tax attached to
or attributable to the Shares or any asset of the Company and none of
them are subject to an Inland Revenue charge as mentioned in section
237 and 238, ITA 1984.
(C) Power of sale, mortgage or charge
No asset owned by the Company nor the Shares are liable to be
subject to any sale, mortgage or charge by virtue of section 212, ITA
1984.
SCHEDULE 8
COMPLETION ARRANGEMENTS
1. VENDOR'S OBLIGATIONS TO DELIVER
The Vendor shall deliver to the Purchaser:
(a) duly executed share transfers in respect of the Sale Shares in
favour of the Purchaser, or as it may direct, together with the
relative share certificates and any power of attorney or other
authority under which such transfers have been executed;
(b) written resignations and releases under seal, in the agreed form,
from the Secretary of the Company and the Directors (other than the
Continuing Directors) resigning their offices and releasing the Company
from all claims and rights of action whatsoever, whether in respect of
breach of contract, compensation for loss of office, unfair dismissal,
redundancy or in respect of any loan or other indebtedness, or on any
other account whatsoever;
(c) the Common Seal, Certificate of Incorporation and the statutory
books of the Company properly written up to the day prior to
Completion, namely the Register of Members, Register of Mortgages,
Register of Directors and Secretaries, Register of Directors'
Interests, the Books of Account and the Minute Books of Meetings of the
Company and of its Boards of Directors;
(d) copies of all existing bank mandates and statements of the balances
of any bank accounts in the name of the Company, as at the close of
business on the last Business Day before Completion together with a
list of all unpresented cheques and uncleared cheques which upon
presentation or clearance would be debited or credited to such
accounts;
(e) the Tax Deed, and the Name Licence Agreement duly executed as at
Completion by the Vendor and the Purchaser;
(f) a letter of resignation as auditors of the Company in the agreed
form signed by the Auditors and complying with Article 401 of the
Companies Order together with a statement, pursuant to Article 401A of
the Companies Order, acknowledging that there are no circumstances
connected with their ceasing to hold office which should be brought to
the attention of the members or creditors of the Company together with
confirmation that the Auditors have no claims against the Company for
unpaid fees or expenses;
(h) irrevocable powers of attorney (in such form as the Purchaser may
require) executed by the Vendor in favour of the Purchaser, or its
nominees, enabling the Purchaser, or its nominees, pending registration
of the transfers of the Shares, to exercise all voting and other rights
attaching to the Shares and to appoint proxies for such purpose;
(i) Not Used
(j) a letter from the Vendor specifying the whereabouts of any other
documents, books or records of the Company which are not held at the
Property and directing the holders of them to deliver them up to the
Purchaser upon request;
(k) a letter of confirmation from Invest NI to the Company,
expressing its consent to the change of control of the Company and
waiving rights to clawback of grant monies as referred to in the
Conditions;
(k) a letter of confirmation from Ulster Bank Limited to the Company
expressing its consent to the change of control of the Company and
releasing SMTEK International Inc. from its guarantee;
(l) evidence of shareholder approval of the Vendor of a substantial
property transaction with a director as required under the Companies
Orders
(m) any other documents required by this Agreement to be supplied by
the Vendor to the Purchaser at Completion.
2. BOARD MEETING OF THE COMPANY
The Vendor shall cause to be duly held a meeting of the Company and of
the Board of the Company validly to effect or execute or validly to
resolve to effect or execute:
(a) the approval of the said transfers of the Sale Shares to the
Purchaser and/or its nominees, the issue to the Purchaser and/or its
nominees of share certificates in respect of those shares and the
registration of the Purchaser and/or its nominees as holders of those
shares (subject only to those transfers being represented duly
stamped);
(b) the appointment as Directors and Secretary of the Company of such
persons as the Purchaser may nominate, subject to such persons
consenting to such appointment and not being disqualified in law or
under the Articles of Association of the Company from holding such
offices;
(c) the revocation of all existing bank mandates and the issue of new
mandates in relation to the Company to such bank or banks and in such
form as the Purchaser may direct;
(d) the acceptance of the resignation of the Auditors and the
appointment as auditors of the Company of such person or firm as the
Purchaser may nominate, subject to the provisions of the Companies
Order;
(e) the acceptance of the resignation of the existing Directors
(other than the Continuing Directors) and Secretary;
(f) the change in the registered office of the Company to such
address as may be nominated by the Purchaser;
(g) the sealing of the Tax Deed and Share Certificates in favour of
the Purchaser;
(m) any other business which may be necessary or desirable to give full
and valid effect to the sale and purchase provided for in this
Agreement or as the Purchaser may reasonably require;
and the Vendor shall supply duly signed minutes of all such meetings to
the Purchaser on Completion.
3. PURCHASER'S OBLIGATION AT COMPLETION
Subject to the conclusion of the matters referred to in Paragraphs 1
(Vendor's Obligations to Deliver) and 2 (Board Meeting of the Company)
the Purchaser shall:
(a) deliver to the Vendor's Solicitors $1 in cash;
(b) deliver to the Vendor's Solicitors a counterpart of each of the Tax
Deed and the Name Licence Agreement duly executed by the Purchaser; and
SCHEDULE 9
VENDOR PROTECTION
1. Limitation of Liability
The following paragraphs of this Schedule shall operate to limit the
liability of the Vendor under or in connection with the Tax Deed, and
the Warranties and accordingly, in this Schedule, "Relevant Claim"
means any claim under or in connection with the Warranties or the Tax
Deed (including for the avoidance of doubt, any claim for
misrepresentation or negligent misstatement)
2. Financial Limits
2.1 Aggregate limit
The aggregate liability of the Vendor in respect of Relevant Claims
shall be limited to 80,000 pounds sterling.
2.2 Thresholds
The Vendor shall not be liable in respect of a Relevant Claim unless
the liability of the Vendor in respect of that Relevant Claim (and all
other Relevant Claims arising out of or related to the said or similar
subject matter) exceeds -8,000 pounds sterling.
2.3 The Vendor shall not be liable in respect of any Relevant Claim
(a) to the extent that the subject of any such claim is allowed or
provided for or reserved in the Audited Accounts or the Completion
Accounts or has been included in calculating creditors or deducted in
calculating debtors in the Audited Accounts or the Completion Accounts
and (in the case of creditors or debtors) is identified in the records
of the Company or to the extent such matter was specifically referred
to in the notes to the Audited Accounts or the Completion Accounts;
(b) to the extent that any such claim arises or is increased:
- wholly or partly from an act or omission occurring at the request of
or with the written consent of the Purchaser or (on or after
Completion) the Company or any of its directors, other officers,
employees or agents;
- wholly or partly from an act or omission compelled by law;
- as a result of any increase in rates of taxation since the Balance
Sheet Date;
- as a result of any change after Completion in the basis upon which
the accounts of the Company are prepared or any change in accounting or
taxation practice, policies or principles;
- as a result of any change after Completion in the date to which the
Company makes up its accounts; or
- wholly or partly as a result of the passing or coming into force of,
or any change in, any enactment law regulation directive requirements
or practice of any government governmental agency or regulatory body
after Completion whether or not having retrospective effect.
(c) to the extent that the subject of any such claim is fairly
disclosed in this Agreement or in the Disclosure Letter;
(d) to the extent that the liabilities of any such claim are
contingent, future or unascertainable in which case the Vendor shall
not be liable to recompense the Purchaser until such time as the
Purchaser shall actually have suffered the loss or incurred the
liability in question;
(e) if it relates to any expression or opinion or future intention or
any forecasts, projections, speculation, assessment or budget;
(f) if it relates to the fact that the Company has lost goodwill or
possible business since Completion; and
(g) if it would not have arisen or would have been reduced but for the
cessation of a trade or a change in the nature or conduct of a trade
carried on by the Company in either case occurring after Completion.
3. Time Limits
3.1 Notice to Vendor
The Vendor shall have no liability in respect of any Relevant Claim
unless the Purchaser shall have given notice in writing to the Vendor
of such claim specifying (in reasonable detail) the matter which gives
rise to the claim, the nature of the claim and the amount claimed in
respect thereof not later than:
(A) in the case of a Relevant Claim under or in connection with the Tax
Deed the applicable time limits specified in Sub-Clause 3.2 of the Tax
Deed; or
(B) in any other case, 31 May 2004
3.2 Any Relevant Claim in respect of which notice shall have been given
in accordance with clause 3.1 above shall be deemed to have been
irrevocably withdrawn and lapsed (not having been previously satisfied
settled or withdrawn) if proceedings in respect of such claim have not
been issued and served on the Vendor not later than the expiry of the
period of 4 months after the date of this notice.
4. Recovery from Third Parties
4.1 Accounting to Vendor
If the Vendor pays to or for the benefit of the Purchaser an amount in
respect of any Relevant Claim and any of the Purchaser, or the Company
subsequently receives from any other person any payment in respect of
the matter giving rise to the Relevant Claim, the Purchaser shall
thereupon pay to the Vendor an amount equal to the payment received,
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 Vendor in respect of the Relevant Claim was
reduced to take account of such payment
4.2 Where the Purchaser and/or the Company is or is likely to be
entitled to recover from some other person any sum in rspect of any
matter giving rise to a Relevant Claim or a claim under the Tax Deed
then the Purchaser shall procure that reasonable steps are taken to
enforce such recovery and if any sum is so recovered then either the
amount payable by the Vendor in respect of that claim shall be reduced
by an equal amount to the sum so recovered
4.3 Without prejudice to the generality of 4.2 above, the provisions of
4.2 shall apply:
(a) where the Company is entitled to recover from its insurers (in
respect of insurance effective on or before Completion) any sum in
respect of any matter giving rise to a Relevant Claim
(b) to the extent that the Vendor is liable for an obligation of the
Company to pay advance corporation tax and the Company is entitled to
obtain the benefit or reduction in liability to mainstream corporation
tax by reason of such payment when the Purchaser shall procure that the
Company shall make all such claims and elections as will result in such
benefit or reduction being obtained as soon as reasonably possible
5. No duplication of Recovery
5.1 No Double 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
5.2 Claims under Warranties or Tax Deed
In the event that the Purchaser is entitled to claim under the Tax Deed
or under the Warranties contained in Schedule 7 (Taxation) in respect
of the same subject matter, the Purchaser may claim under either or
both but payments under the Tax Deed shall pro tanto satisfy and
discharge any claim which is capable of being brought under the
Warranties contained in Schedule 4 in respect of the same subject
matter and vice versa
6. Conduct of Warranty Claims
6.1 The Purchaser shall notify the Vendor in writing of:
(a) any claim made against it by a third party which may give rise to a
Relevant Claim; and
(b) any claim the Purchaser is entitled to bring against a third party
which claim is based on circumstances which may give rise to a Relevant
Claim.
6.2 The Purchaser shall not be liable for any delay in giving any
notice under sub-clause 6.1 and shall not by reason of such delay be
precluded from bringing any such claim against the Vendor
6.3 The Purchaser shall procure that the conduct, negotiation,
settlement or litigation of the claim by or against such third party
is, so far as is reasonably practicable, carried out in accordance with
the wishes of the Vendor and at its cost subject to it giving timely
instructions to the Purchaser and providing reasonable security for any
costs and expenses which might be incurred by the Purchaser and the
Vendor hereby undertakes to indemnity and keep the Purchaser in respect
of such costs and expenses
6.4 The Purchaser shall provide to the Vendor and the Vendor's advisers
reasonable access to premises and personnel and to any relevant assets,
documents and records within their power, possession or control for the
purpose of investigating any Relevant Claim and enabling the Vendor to
take the action referred to in sub-clause 6.3 and shall allow the
Vendor and its advisers to take copies of any relevant documents or
records at their expense.
SCHEDULE 10
NAME LICENCE AGREEMENT
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇
SIGNED by ▇▇▇▇ ▇▇▇▇▇▇▇
duly authorised for and on behalf of
DDL EUROPE LIMITED
SIGNED by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
duly authorised for and on behalf of
ALINA LIMITED
SIGNED by ▇▇▇▇ ▇▇▇▇▇▇▇
duly authorised for and on behalf of
SMTEK INTERNATIONAL INC