1
Exhibit 10.49
DATED 27 MAY 2000
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(1) EMESS PLC
and
(2) SLI INC
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AGREEMENT
Relating to
The sale and purchase of (i) the entire share capital
of Brilliant Holdings GmbH and (ii) the ▇▇▇▇▇▇
Business and Emess Lighting Business
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ASHURST ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
Tel: ▇▇▇-▇▇▇▇ ▇▇▇▇
Fax: ▇▇▇-▇▇▇▇ ▇▇▇▇
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THIS AGREEMENT is made on 2000
BETWEEN:
(1) EMESS PLC a company registered in England and Wales with number
00164213 whose registered office is at ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇ (the "VENDOR"); and
(2) SLI INC a company incorporated in the State of Oklahoma, whose
principal place of business is at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇ (the "PURCHASER" which shall include its permitted
successors and assigns).
WHEREAS
The Vendor has agreed to sell, or procure the sale of, and the Purchaser has
agreed to purchase, or procure the purchase of (i) the Shares and (ii) the
▇▇▇▇▇▇ Business and the Emess Lighting Business (both to be effected by way of
sale as a going concern).
IT IS HEREBY AGREED:
1. DEFINITIONS AND INTERPRETATION
1.1 In this Agreement:
"ACCOUNTS" means the Business Accounts and the Brilliant
Accounts.
"ACTIVITIES" means any activity, operation or process, act or
omission carried out or made by any Asset Vendor in relation
to the Businesses or any member of the Brilliant (AG Excluded
Group) Group
"AFFILIATED COMPANY" means a company which is a subsidiary of
the party concerned or which is a holding company of such
party or a subsidiary of such holding company.
"AG GROUP" means Brilliant AG and any subsidiary or subsidiary
undertaking of Brilliant AG.
"APPORTIONMENT SCHEDULE" means the schedule setting out the
apportionment of the Consideration payable by the Purchaser to
the Vendor under this Agreement, to be agreed between the
Vendor and Purchaser on or before 23 June 2000 and drawn up in
compliance with clause 4.4.
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"ASSET VENDOR" means the Vendor in relation to the ▇▇▇▇▇▇
Business and Emess Lighting Inc in relation to the Emess
Lighting Business.
"ASSETS" means the Business Assets and the Brilliant Assets.
"ASSUMPTION OF LIABILITY AGREEMENT" means the agreement to be
entered into by the Purchaser or its nominee(s) at Completion
in order to assume certain liabilities associated with the
Emess Lighting Business in such form as may be agreed between
the Vendor and the Purchaser.
"AUSTCO" means Brilliant Lighting (Aust) Pty Ltd ACN 006 203
694.
"BRILLIANT ACCOUNTS" means the audited consolidated profit and
loss account and cash flow statement of Brilliant Holding for
the accounting period ended on, and the consolidated audited
balance sheet of Brilliant Holding as at, the Latest
Accounting Date in the agreed form.
"BRILLIANT AG" means Brilliant AG a company incorporated in
Germany, whose principal place of business is at
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇, ▇-▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ details of
which are set out at Part 2 of Schedule 4.
"BRILLIANT (AG GROUP EXCLUDED) ASSETS" means the Brilliant
Assets other than the property rights and assets relating to
any member of the AG Group.
"BRILLIANT (AG GROUP EXCLUDED) BUSINESS" means the Brilliant
Business other than the businesses carried on by any member of
the AG Group.
"BRILLIANT (AG GROUP EXCLUDED) GROUP" means the Brilliant
Group other than any member of the AG Group.
"BRILLIANT (AG GROUP EXCLUDED) GROUP CONTRACTS" means all
contracts, undertakings, arrangements and engagements of any
member of the Brilliant (AG Group Excluded) Group whether
written or verbal relating to the Brilliant (AG Group
Excluded) Business which are wholly or partly unperformed at
the date of Completion including, without limitation, supply
and distribution agreements, customer and supplier contracts,
lease, hire and hire purchase agreements but excluding
contracts of employment with the employees, agreements with
trade unions or employee representatives in respect of the
employees, leases of the properties and
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loan agreements (any one of these being a "BRILLIANT (AG GROUP
EXCLUDED) GROUP CONTRACT").
"BRILLIANT ASSETS" means all the property rights and assets
relating to any member of the Brilliant Group.
"BRILLIANT BUSINESS" means the businesses carried on by any
member of the Brilliant Group.
"BRILLIANT GROUP" means Brilliant Holding and each of the
Brilliant Subsidiaries.
"BRILLIANT HOLDING" means Brilliant Holding GmbH a company
incorporated in Germany, whose principal place of business is
at ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇, ▇-▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ details of
which are set out at Part 1 of Schedule 4.
"BRILLIANT INTELLECTUAL PROPERTY RIGHTS" means Intellectual
Property and the Brilliant Know-How owned by the Brilliant (AG
Group Excluded) Group including without prejudice to that
generality the registered Intellectual Property set out in
Schedule 2.
"BRILLIANT KNOW-HOW" means know-how used in the Brilliant (AG
Group Excluded) Business.
"BRILLIANT RECEIVABLES" means the aggregate amount as at
Completion of all outstanding loans and, borrowings or any
other amount in the nature of borrowing owed to any member of
the Brilliant Group.
"BRILLIANT RECORDS" means all bought and sold ledgers,
purchase and sales day books and purchase and sales invoices
and other books and records of any member of the Brilliant (AG
Group Excluded) Group relating exclusively to the Brilliant
(AG Group Excluded) Business.
"BRILLIANT SUBSIDIARY" means a subsidiary or subsidiary
undertaking of Brilliant Holding as listed in Part 2 of
Schedule 4 and "BRILLIANT SUBSIDIARIES" shall be construed
accordingly.
"BRILLIANT SUBSIDIARY (AG GROUP EXCLUDED) EMPLOYEES" means the
employees of any member of The Brilliant Group, other than the
employees of the AG Group, as at Completion;
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"BRILLIANT SUBSIDIARY EMPLOYEES" means the employees of any
member of the Brilliant Group at Completion.
"BUSINESSES" means either or both of the ▇▇▇▇▇▇ Business and
the Emess Lighting Business as the context so requires.
"BUSINESS ACCOUNTS" means the audited profit and loss account
and cash flow statement of each of the Vendor and Emess
Lighting Inc. in the agreed form for the accounting period
ended on, and the audited balance sheet of each of the Vendor
and Emess Lighting Inc. in the agreed form as at, the Latest
Accounting Date.
"BUSINESS ASSETS" means all the property rights and assets
relating to the ▇▇▇▇▇▇ Business and/or the Emess Lighting
Business (as the context so requires) agreed to be sold and
purchased as more particularly set out in clause 2.1of this
Agreement;
"BUSINESS DAY" means a day (other than a Saturday or Sunday)
on which clearing banks are open for business in London.
"BUSINESS INTELLECTUAL PROPERTY RIGHTS" means all Intellectual
Property and rights in Know-How owned and used exclusively by
the Asset Vendor in, or in connection with, the relevant
Business at the date of this Agreement including any rights to
proceed for the infringement of such Intellectual Property,
and without limitation, those registered rights set out in
Schedule 2.
"BUSINESS RECORDS" means all bought and sold ledgers, purchase
and sales day books and purchase and sales invoices and other
books and records of the Asset Vendor relating exclusively to
the relevant Business as at the date of Completion.
"COMPLETION" means completion of the sale and purchase of the
Shares and each of the Businesses in accordance with this
Agreement.
"COMPLETION STATEMENT" means the statement agreed between the
Vendor and the Purchaser or determined, in each case, in
accordance with clause 6.
"COMPULSORY CONTAMINATION PENALTIES" means any fine penalty or
order to pay damages imposed by a Regulatory Authority under
Environmental Law or any court under Environmental Law to the
extent any of the same relates to Pre-Completion Contamination
costs, expenses, losses, fines, penalties or damages
(including
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reasonable legal or other professional fees) incurred in
defending or resolving any contamination claim.
"COMPULSORY REMEDIATION COSTS" means reasonable costs
(including legal and professional fees) incurred in complying
with an enforceable order or notice pursuant to a
Contamination Claim imposed by a Regulatory Authority under
Environmental Law to the extent the same requires the
recipient to clean-up, investigate, monitor, or remediate
Pre-Completion Contamination.
"COMPUTER SYSTEMS" means the computer systems used exclusively
by or for the benefit of any of the Operations or computer
processors associated and peripheral equipment computer
programs including technical and other documentation and data
entered into or created for and used by or for the benefit of
any of the Operations from time to time.
"CONDITIONS" means the conditions contained or referred to in
clause 3.1.
"CONFIDENTIAL INFORMATION" means all information not at
present in the public domain used in or otherwise relating to
the Business or the Brilliant Business or customers or
financial or other affairs of the Business or the Brilliant
Business including, without limitation, information relating
to:
(a) the marketing of any goods or services including,
without limitation, customer names and lists and any
other details of customers, sales targets, sales
statistics, market share statistics, prices, market
research reports and surveys and advertising or other
promotional materials; or
(b) future projects, business development or planning,
commercial relationships and negotiations.
"CONTRACTS" means all contracts, undertakings, arrangements
and engagements of the Asset Vendor whether written or verbal
relating to the relevant Business which are wholly or partly
unperformed at the date of Completion including, without
limitation, supply and distribution agreements, customer and
supplier contracts, lease, hire and hire purchase agreements
but excluding contracts of employment with the Emess
Employees, ▇▇▇▇▇▇ Employees, agreements with trade unions or
employee representatives in respect of the Emess Employees or
▇▇▇▇▇▇ Employees, leases of the Properties and loan agreements
(any one of these being a "CONTRACT").
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"CONTAMINATION CLAIM" means any proceeding or claim formerly
instituted under Environmental Law by a Regulatory Authority
or third party to the extent the same relates to
Pre-Completion Contamination.
"▇▇▇▇▇▇▇▇▇ LICENCE" means the licence of the "▇▇▇▇▇▇▇▇▇" name
between the Purchaser or its nominee and the Vendor or its
nominee in the agreed form.
"DISCLOSED DOCUMENTS" means those documents appended to the
Disclosure Letter.
"DISCLOSURE LETTER" means the letter of today's date from the
Vendor to the Purchaser in relation to the Warranties.
"EMESS ASSETS" mean the property and assets referred to in
clause 2.1 in relation to the Emess Lighting Business.
"EMESS EMPLOYEES" means the employees employed in the Emess
Lighting Business at the date of this Agreement whose names
are included in the Disclosure Documents subject to such
amendments before Completion as have been agreed by the
Purchaser.
"EMESS LIGHTING BUSINESS" means the business of designing,
manufacturing, selling, distributing and importing consumer
lighting, principally to retailers in the United States of
America, under the brand names of "Alsy" and "▇▇▇▇▇▇▇▇▇"
carried on by Emess Lighting Inc or any member of the Vendor's
Group. "EMESS LIGHTING LOYALTY BONUSES" means the loyalty
bonuses together with the costs of any related social security
obligations to be paid by the Purchaser to certain Emess
Employees the amount of which shall be disclosed to the
Purchaser by the Vendor five Business Days before Completion.
"EMESS LIGHTING INC" means Emess Lighting Inc a company
incorporated in Delaware, The United States of America, whose
principal place of business is at ▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ details of which are set out in
Part 3 of Schedule 4.
"EMESS LIGHTING NET ASSETS" means the amount of the net assets
as shown in the balance sheet in respect of Emess Lighting Inc
constituting part of the Completion Statement.
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"EMESS PROPERTY" means the property or properties short
particulars of which are set out in schedule 3 and reference
to the Emess Property includes reference to the individual
properties comprising the Emess Property and any part or parts
of individual properties.
"EMPLOYEES" means the Emess Employees, the ▇▇▇▇▇▇ Employees
and the Brilliant Subsidiary Employees.
"ENCUMBRANCE" means any mortgage, charge, pledge, lien,
option, restriction, right of first refusal, right of
pre-emption, third party right or interest, any other
encumbrance or security interest of any kind, and any other
type of preferential arrangement (including, without
limitation, title transfer and retention arrangements) having
a similar effect.
"ENVIRONMENT" means any and all living organisms (including
without limitation, man), ecosystems, property and the media
of air (including without limitation air in buildings, natural
or man-made structures, below or above ground) water,
(including, without limitation, groundwater, rivers, canals,
streams, lakes, coastal waters and within water drains and
sewers) and land.
"ENVIRONMENTAL INDEMNITY" means the indemnity at clauses 8.1
to 8.8 of this Agreement.
"ENVIRONMENTAL LAW" means all statutes or subordinate
legislation, or civil or common law, EU Directives or
Regulations, all court orders, ordinances, decrees or
regulatory codes of practice, circulars, guidance notes and
equivalent controls which are enforceable as at Completion,
are applicable in the jurisdiction to which they relate and
which have as a purpose or effect
(i) the protection or prevention of harm to human health or
the Environment; or
(ii) the regulation of emissions, discharges or threatened
releases or escapes of Hazardous Substances into the
Environment; or
(iii) the regulation of production, processing, treatment,
storage, disposal, transport, packaging of, labelling of
or handling of any Hazardous Substances including laws
relating to nuisance but not including law pursuant
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to the Town and Country ▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ or its
equivalent in the relevant jurisdiction; or
(iv) the protection of worker health & safety.
"EUROPEAN BUSINESSES" means the ▇▇▇▇▇▇ Business and the
business of designing, manufacturing, selling, distributing
and importing commercial light fittings under the name ▇▇▇▇▇▇
carried on in Europe by ▇▇▇▇▇▇ BV and the business of
designing, manufacturing, selling, distributing and importing
street lighting carried on in Europe by Eclatec SA.
"EXCLUDED ASSETS" means the assets set out in Schedule 1.
"FIXED PLANT" means the fixed plant and machinery, and
leasehold improvements at the Properties, owned or used by the
Target Owners in connection with the Operations at the date of
Completion.
"FORMER PROPERTIES" means any site(s) formerly owned, occupied
or used by any member of the Brilliant (AG Group Excluded)
Group prior to Completion, but not including the Properties.
"GOODWILL" means the goodwill of the Businesses together with
the right for the Purchaser to use the names "▇▇▇▇▇▇",
"Eclatec", "Brilliant", "Alsy" and "▇▇▇▇▇▇▇▇▇" (subject to
licence) and to represent itself as carrying on the relevant
Business in continuation of and in succession to the Asset
Vendor or any member of the Vendors Group.
"GROUP" means in relation to a company its direct or indirect
subsidiaries, holding company and any direct or indirect
subsidiary of its holding company.
"GROUP INTELLECTUAL PROPERTY RIGHTS" means for the purposes of
Schedule 5, the Business Intellectual Property Rights and the
Brilliant Intellectual Property Rights.
"HAZARDOUS SUBSTANCES" means any natural or artificial
substance (whether solid, liquid, gas, noise, ion, vapour,
electromagnetic radiation or ionising radiation and whether
alone or in combination with any other substance) which is
capable of causing harm or to have a deleterious effect on the
Environment, or being a nuisance.
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"INDEBTEDNESS" means the aggregate amount as at Completion of
(i) all outstanding loans or borrowings or any other amount in
the nature of borrowings owed by any member of the Brilliant
Group; and (ii) all outstanding loans or borrowings or any
other amount in the nature of borrowings owed by an Asset
Vendor in relation to the Business and the Business Assets
other than the Trade Credits.
"INTERCOMPANY INDEBTEDNESS" means the aggregate of all sums
owing by members of the Target Group to members of the
Vendor's Group at Completion and specified in the Indebtedness
Schedule other than those in respect of trade creditors
arising through normal business transactions.
"INDEBTEDNESS SCHEDULE" means the schedule to be prepared by
the Vendor and delivered to the Purchaser on or before
Completion setting out the amount of the Intercompany
Indebtedness and shall include a breakdown of each amount
comprising the Intercompany Indebtedness and in respect of
each such amount, the relevant member of the Target Group
which owes the amount and the relevant member of the Vendor's
Group to which it is owed;
"INDEMNIFIED PERSON" means each of the Purchaser, Brilliant
Holding and the Brilliant Subsidiaries.
"INTELLECTUAL PROPERTY" means patents, trade marks, service
marks, registered designs, applications for any of the
foregoing, rights in trade and business names, domain name
registrations, unregistered trade marks, trade dress, logos
and corporate names, copyrights, rights in computer software,
designs, databases and inventions, and rights of the same or
similar effect or nature, in any part of the world.
"INTELLECTUAL PROPERTY ASSIGNMENTS" means the assignments of
registered Business Intellectual Property in the agreed form;
"KNOW-HOW" means all information not at present in the public
domain owned by the Asset Vendor and used exclusively by the
Asset Vendor in, or in connection with, the Operations held in
any form (including, without limitation, that comprised in or
derived from drawings, data, formulae, specifications,
component lists, instructions, manuals, brochures, catalogues
and process descriptions) and relating to:
(a) the manufacture or production of goods or the provision
of services;
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(b) the selection, procurement, construction, installation
or use of any raw material, plant, machinery or other
equipment or processes;
(c) the supply, storage, assembly or packing of raw
materials, components or partly manufactured or finished
products;
(d) quality control, testing or certification; or
(e) the rectification, repair or service of products, plant,
machinery or other equipment.
"LATEST ACCOUNTING DATE" means 31 December 1999.
"LIBOR" means:
(A) the rate per annum which appears on Telerate Page 3750;
or
(B) if no such rate appears, the arithmetic mean (round
upward to four decimal places) of the offered quotations
which appear on the relevant page (if any) on the
Reuters Monitor Money Rates Service (or such other
service as may replace the Reuter Monitor Money Rates
Service for the purpose of displaying London interbank
offered rates of leading banks); or
(C) if no such rate appears on the Telerate Screen and one
only or no such offered quotation appears on the
relevant page of the Reuters Screen or there is no
relevant page on the Reuters Screen the arithmetic mean
(rounded upward to four decimal places) of the rates, as
supplied to the Agent at its request, quoted by the
reference Banks to leading banks in the London interbank
market,
at or about 11.00 am two Business Days before the first day of
the relevant interest period for the offering of deposits in
Sterling for a period comparable to the relevant interest
period.
For the purpose of this definition "TELERATE PAGE 3750" means
the display designated as "PAGE 3750" on the Telerate Service
(or such other page as may replace Page 3750 that service) or
such other service as may be nominated by the British Bankers'
Association Interest Settlement Rates for deposits in the
currency concerned.
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"MACHINERY" means the loose plant, machinery, tools, moulds,
dies, equipment and other like articles owned or used by the
Asset Vendor in connection with the relevant Business at the
date of Completion.
"MANAGEMENT ACCOUNTS" means the unaudited consolidated profit
and loss account of the Asset Vendor and the consolidated
unaudited profit and loss amount of Brilliant Holding
accounting period ended on, and the unaudited consolidated
balance sheet of the Asset Vendor and each member of the
Brilliant Group, in the agreed form as at 25 February 2000;
"▇▇▇▇▇▇ ASSETS" means the property and assets referred to in
clause 2.1 in relation to the ▇▇▇▇▇▇ Business.
"▇▇▇▇▇▇ BUSINESS" means the businesses of designing,
manufacturing, selling, distributing and importing of
commercial light fittings carried on by the Asset Vendor or
any member of the Vendor's Group under the name ▇▇▇▇▇▇;
"▇▇▇▇▇▇ EMPLOYEES" means the employees ordinarily employed in
the ▇▇▇▇▇▇ Business as at the date of this Agreement whose
names are included in the Disclosed Documents subject to such
amendments before Completion as have been agreed by the
Purchaser.
"▇▇▇▇▇▇ NET ASSETS" means the amount of the net assets as
shown in respect of the ▇▇▇▇▇▇ Business constituting part of
the Completion Statement.
"▇▇▇▇▇▇ PROPERTY" means the property or properties short
particulars of which are set out in Section 1 of Part A of
Schedule 3 and a reference to the ▇▇▇▇▇▇ Property includes a
reference to the individual properties comprising the ▇▇▇▇▇▇
Property and any part or parts of individual properties;
"MOTOR VEHICLES" means the motor vehicles owned or used by the
Asset Vendor in connection with the relevant Business at the
date of this Agreement subject to such amendments up to date
of Completion as have been agreed by the Purchaser;
"NOTARIAL DEED" means the deed notarising the agreement of the
Brilliant Shares to be delivered at Completion.
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"OFFICE EQUIPMENT" means the office equipment and furnishings
and other like articles owned or used by the Asset Vendor in
connection with the relevant Business at the date of
Completion.
"OPERATIONS" means the Businesses and the Brilliant (AG Group
Excluded) Business.
"PRE-COMPLETION CONTAMINATION" means Hazardous Substances
which are present prior to Completion at in on or under the
Properties or Former Properties or the migration of such
Hazardous Substances therefrom, whether before or after
Completion.
"PRE-SALE REORGANISATION" means the following steps to be
taken by the Vendor's Group prior to Completion:-
(a) The sale by Brilliant Holding of the entire issue share
capital of First Square Management Limited to Emess Plc
for consideration of (pound)6,000;
(b) The sale by Brilliant Holding of the entire issue share
capital of EITS (Hong Kong) Limited to Emess Plc for
consideration of Dm110,000;
(c) The sale by Ecletec SA of the entire issue share capital
of Emess SCI for consideration of FF9,990;
(d) If required, the transfer by Emess Group Trading Limited
of the ▇▇▇▇▇▇ business as a going concern to Emess Plc;
(e) If required, intra-group transfer of shares in Brilliant
Holding to Emess Europe Limited, Emess Overseas Limited
and Emess Plc.
"PROPERTIES" means the property or properties short
particulars of which are set out in Part A of Schedule 3 and a
reference to the Emess Property or ▇▇▇▇▇▇ Property includes a
reference to the individual properties comprising the Emess
Property or the ▇▇▇▇▇▇ Property respectively and any part or
parts of individual properties.
"PURCHASER'S ACCOUNTANTS" means Ernst & Young of ▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇.
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"PURCHASER'S GROUP" means the Purchaser and any subsidiary or
associated companies from time to time of the Purchaser (and
shall include each member of the Brilliant Group with effect
from the date of Completion and any reference to "MEMBER OF
THE PURCHASER'S GROUP" shall be construed accordingly.
"PURCHASER'S SOLICITORS" means DLA of ▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇.
"REGULATORY AUTHORITY" means any legal person or body of
persons (including any government department or government
agency or court or tribunal) having jurisdiction to determine
any matter arising under Environmental Laws and/or relating to
the Environment.
"SHARES" means 50,000 fully-paid ordinary shares of 500 DM
each of Brilliant Holding comprising the whole of the issued
share capital of Brilliant Holding.
"STOCKS" means the stock of raw materials, partly finished and
finished goods acquired or produced exclusively in the course
of the relevant Business as at the date of Completion.
"TAXATION" OR "TAX" means as defined in part 1 of Schedule 10.
"TARGET GROUP" means the Brilliant Group, the ▇▇▇▇▇▇ Business
and the Emess Lighting Business.
"TARGET OWNERS" means the Asset Vendor and the Brilliant (AG
Group Excluded) Group.
"TAXES ACT" means Income and Corporation Taxes ▇▇▇ ▇▇▇▇;
"TRADE CREDITS" means the amounts due from the Asset Vendor in
connection with the ▇▇▇▇▇▇ Business and the Emess Lighting
Business at the date of Completion in respect of trade
creditors arising through normal business transactions
(whether or not yet payable).
"TRADE DEBTS" means the amounts due to the Asset Vendor in
connection with the ▇▇▇▇▇▇ Business and the Emess Lighting
Business at the date of Completion in respect of trade debtor
accounts arising through normal business transactions (whether
or not yet payable).
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"TRANSFER REGULATIONS" means the Transfer of Undertakings
(Protection of Employment) Regulations 1981 (as amended), the
Acquired Rights Directive, and national legislation
implementing the Acquired Rights Directive in other EU member
states (other than the United Kingdom) and EEA territories.
"TWICKENHAM PROPERTY" means the property more particularly
described in the part 1 of Schedule 3.
"UK PROPERTIES" means such of the Properties as are located in
the United Kingdom.
"VATA" means Value Added Tax ▇▇▇ ▇▇▇▇.
"VENDOR'S ACCOUNTANTS" means BDO ▇▇▇▇ ▇▇▇▇▇▇▇ of ▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇.
"VENDOR'S GROUP" means the Vendor and any subsidiary or
associated companies from time to time of the Vendor but
excluding any member of the Brilliant Group with effect from
the date of Completion and any reference to "MEMBER OF THE
VENDOR'S GROUP" shall be construed accordingly.
"VENDOR'S SOLICITORS" means Ashurst ▇▇▇▇▇▇ ▇▇▇▇▇ of ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, ▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇.
"VOLUNTARY REMEDIATION COSTS" means reasonable costs
(including reasonable legal and profession fees) incurred in:
(i) undertaking the minimum works necessary to clean up,
investigate, monitor or remediate in relation to
Pre-Completion Contamination which are required in order
to avoid the incurring of Compulsory Remediation Costs
or Compulsory Contamination Penalties (the "Minimum
Works") PROVIDED that where there is any failure of the
Vendor and Purchaser to agree what constitutes such
works the determination of an independent environmental
consultant jointly appointed by the Vendor and Purchaser
as to what constitutes "Minimum Works" shall be binding;
and
(ii) defending or resolving any Contamination Claim to the
extent the same relates to Pre-Completion Contamination;
and
- 15 -
16
(iii) any losses suffered or incurred as a result of the
necessary relocation or cessation of Operations due to
the carrying out of the Minimum Works but excluding loss
of profits.
"WARRANTIES" means the warranties contained in Schedule 5.
1.2 In this Agreement, a reference to:
(a) a "subsidiary" or "holding company" shall be construed in accordance
with section 736 of the Companies ▇▇▇ ▇▇▇▇ and a reference to
"subsidiary undertaking" shall be construed in accordance with
section 258 of the Companies ▇▇▇ ▇▇▇▇;
(b) "associated companies" shall be construed in accordance with section
416 of the Income and Corporation Taxes ▇▇▇ ▇▇▇▇;
(c) a document in the "agreed form" is a reference to a document in a
form approved and for the purpose of identification initialled by or
on behalf of the parties or their solicitors;
(d) a statutory provision includes a reference to:
(i) the statutory provision as modified or re-enacted or both from
time to time before the date of this Agreement; and
(ii) any subordinate legislation made under the statutory provision
before the date of this Agreement;
(e) persons includes a reference to any body corporate, unincorporated
association or partnership;
(f) a person includes a reference to that person's legal personal
representatives and successors;
(g) a clause or Schedule, unless the context otherwise requires, is a
reference to a clause of and Schedules to this Agreement;
(h) an agreement or other document is a reference to that agreement or
document as from time to time supplemented or amended.
1.3 If a period of time is specified and dates from a given day or the day of
an act or event, such period shall be calculated exclusive of that day.
1.4 The headings in this Agreement shall not affect the interpretation of this
Agreement.
1.5 Reference in clause 7 and Schedule 5 to the knowledge, information, belief
or awareness of any person shall be deemed to include any knowledge,
information, belief or awareness which the person would have at the date
hereof if the person had made all usual and reasonable enquiry of:
(A) in relation to the Warranties ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇ and
▇▇▇ ▇▇▇▇▇▇▇▇▇▇;
(B) in relation to the Warranties given with respect to the ▇▇▇▇▇▇
Business only, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇
▇▇▇▇▇;
(C) in relation to the Warranties given with respect to ▇▇▇▇▇▇ BV
only, ▇▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇▇;
(D) in relation to the Warranties given with respect to the
Brilliant (AG Group Excluded) Group only ▇▇▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇
Wentrot and ▇▇▇▇ ▇▇▇▇▇▇▇▇;
(E) in relation to the Warranties given with respect to Eclatec SA
only ▇▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇;
- 16 -
17
(F) in relation to the Warranties given with respect to the Emess
Lighting Business only, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
and ▇▇▇▇ Swindon into the subject matter of that Warranty.
1.6 References to any English legal term for any action, remedy, method of
judicial proceeding, legal document, legal status, court, official or
any legal concept or things shall in respect of any jurisdiction other
than England be deemed to include what most nearly approximates in
that jurisdiction to the English legal term.
2. SALE AND PURCHASE
2.1 In accordance with and subject to the provisions of this Agreement, the
Vendor shall with full title guarantee sell or procure the sale of, and
the Purchaser or an Affiliated Company or Affiliated Companies (a
"RELEVANT PURCHASER") of the Purchaser nominated by it shall purchase,
with effect from Completion (i) the entire legal and beneficial
interest in Shares and each accrued benefit and right attaching to the
Shares at Completion free of any Encumbrance and together with all
dividends declared after the Latest Accounting Date (other than the
dividends declared in respect of Brilliant AG on on or about 14 March
2000); (ii) the ▇▇▇▇▇▇ Business as a going concern and the ▇▇▇▇▇▇
Assets as at the date of Completion free from all Encumbrances; and
(iii) the Emess Lighting Business as a going concern and the Emess
Assets as at the date of Completion free from all Encumbrances (except,
in the case of the Properties, the Subsisting Interests as defined in
Part B of Schedule 3 or any encumbrances to which the sale of the
Property is subject by Schedule 3) which, in respect of each of the
▇▇▇▇▇▇ Business and Emess Lighting Business comprises:
(a) the benefit of each Contract (subject to the burden attaching
to each of them);
(b) the Fixed Plant;
(c) the Goodwill;
(d) the Business Intellectual Property Rights;
(e) the Know-How;
(f) the Machinery;
(g) the Motor Vehicles;
(h) the Office Equipment;
(i) the Properties;
(j) the Stocks;
(k) the Trade Debts and all cheques, bills, notes and securities
for the Trade Debts;
(l) the benefit of any sum to which the Asset Vendor are entitled
either from third parties or insurers in respect of damage or
injury to any of the ▇▇▇▇▇▇ Assets or the Emess Assets other
than any sum expended before Completion in making good the
damage or injury;
(m) all other property and assets of the Asset Vendor used
exclusively in connection with the Emess Lighting Business or
the ▇▇▇▇▇▇ Business (whether in or about the Properties or
otherwise), other than the Excluded Assets.
2.2 Nothing in this Agreement shall have the effect of transferring any
trade name or other rights in Intellectual Property whatsoever in or
including the words or the names "EMESS", "Emess" (save to the extent
permitted in clause 16) and "▇▇▇▇▇▇▇▇▇" (save to the extent permitted
under the ▇▇▇▇▇▇▇▇▇ Licence) in any of their variation. Save provided
in clause 16
- 17 -
18
the Purchaser shall, and shall procure that no member of the
Purchaser's Group shall, either alone or jointly with, through or as
manager, adviser, consultant or agent for any person, directly or
indirectly, use the names of "EMESS" and "Emess" and "▇▇▇▇▇▇▇▇▇" (save
to the extent permitted under the ▇▇▇▇▇▇▇▇ Licence) or any other name
intended or likely to be confused with any such name (save to the
extent permitted under the ▇▇▇▇▇▇▇▇▇ Licence).
2.3 Risk in, title to and possession and use of the ▇▇▇▇▇▇ Assets and Emess
Assets shall pass to the Purchaser or, as the case may be, to the
relevant member of the Purchaser's Group upon and with effect from
Completion. The Vendor undertakes to maintain in place until Completion
all existing insurance policies or policies relating to the ▇▇▇▇▇▇
Business and Emess Lighting Business.
3. CONDITIONS
3.1 Completion is subject to and conditional upon:
(a) the due convening of a general meeting of the Vendor and the
passing at that meeting of a resolution to approve the
transactions to be entered into pursuant to this Agreement;
(b) the Secretary of State for Trade and Industry confirming in
terms reasonably satisfactory to the Purchaser that it is not
his intention to refer any of the transactions contemplated
hereby or matters arising therefrom to the Competition
Commission in exercise of his powers under the Fair Trading
▇▇▇ ▇▇▇▇;
(c) all applicable waiting periods (and any extensions thereof)
under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of
1976, as amended, shall have expired or otherwise been
terminated;
(d) One of the following having taken place:
(i) receipt of a notice or a decision from the German
Federal Cartel Office ("FCO") that the prohibition
requirements of S36(1) of the German Act against
Restrictions of Competition ("ARC") are not fulfilled
in relation to the transactions contemplated hereby;
or
(ii) expiry of the one month time limit laid down in
S40(1) ARC without the parties having been notified
by the FCO that the FCO have entered into an
examination of the transactions contemplated hereby;
or
(iii) expiry of the four months time limit (or any
extension thereof) as laid down in S40(2) ARC without
the FCO having issued a prohibition order in relation
to the transactions contemplated hereby.
3.2 The Vendor shall use its reasonable endeavours to procure the
fulfilment of the Condition set out in clause (a) and assist in the
fulfilment of Conditions (b) to (d) (inclusive) as soon as possible and
in any event before 30 June 2000.
3.3 The Purchaser shall use its reasonable endeavours to procure the
fulfilment of Conditions set out in clause(s) (b) to (d)(inclusive) as
soon as possible and in any event before 30 June 2000.
3.4 If at any time the Vendor or the Purchaser becomes aware of any
circumstances that may give rise to non-fulfilment of any of the
Conditions, that party shall immediately give to the other party
written particulars of those circumstances and the Vendor and the
Purchaser shall co-operate fully with a view to procuring fulfilment of
the relevant Condition(s) in a prompt manner.
3.5 The Purchaser may at any time waive in writing any of the Conditions
set out in clause(s) (b) to (d) (inclusive) and such waiver may be made
subject to such terms and conditions as are determined by the Purchaser
(acting reasonably).
- 18 -
19
3.6 If the Conditions (which have not previously been waived pursuant to
clause 3.5) have not been fulfilled on or before 12 noon on the date
set for Completion in clause 5.1 then on that date the Purchaser may at
its option by notice in writing to the Vendor elect to postpone the
date for Completion to a date to be agreed with the Vendor but falling
not more than 20 Business Days after the date set for Completion in
clause 5.1;
3.7 If the Purchaser elects to postpone the date for Completion in
accordance with clause 3.6 then the provisions of this Agreement shall
apply as if the date set for Completion in clause 5.1 were the date to
which Completion is so postponed.
3.8 In the event that the Conditions have not been fulfilled or waived or
postponed in accordance with this clause 3 by 30 June 2000 (or as may
be agreed between the parties) then all rights and obligations of the
parties under this Agreement (other than clauses 3.2 and 3.3 (as the
case may be), 15, 17, 18, 21, 23 and 24) shall cease to have effect
immediately and no party shall have any liability under the provisions
of this Agreement (without prejudice to any provisions necessary for
the interpretation of this Agreement or to the rights of any party
hereto in respect of antecedent breaches) provided that the exclusivity
agreement dated 7 March 2000 between the parties shall remain in full
force and effect save where this Agreement has not become unconditional
due to the failure by the Purchaser to satisfy or waive the Conditions
set out in clauses 3.1.2 to 3.1.4 the Vendor shall have terminated this
Agreement in accordance with its terms.
4. CONSIDERATION
4.1 The Consideration payable by the Purchaser to the Vendor for the Shares
and the ▇▇▇▇▇▇ Business and the ▇▇▇▇▇▇ Assets and Emess Lighting
Business and Emess Assets (the "CONSIDERATION") shall be aggregate of:-
(A) the sum of (pound)81,000,000 less the Emess Lighting Loyalty
Bonus and an amount equal to the Intercompany Indebtedness
(subject to adjustment as provided in clauses 4.2 and 4.3) and
shall be allocated among the Shares, the ▇▇▇▇▇▇ Business, the
▇▇▇▇▇▇ Assets, the Emess Lighting Business and the Emess
Assets as set out in the Apportionment Schedule; and
(B) the assumption by the Purchaser of the Trade Credits.
To the extent that the portion of the Consideration attributable to the
Shares, the ▇▇▇▇▇▇ Business, the ▇▇▇▇▇▇ Assets, the Emess Lighting
Business and/or the Emess Assets is adjusted as provided in clauses 4.2
or 4.3, the apportionment specified in the Apportionment Schedule
shall, subject to clause 4.4, be adjusted as agreed between the parties
and failing agreement on a pro rata basis to reflect the apportionments
specified in the Completion Statement.
4.2 If the aggregate of the ▇▇▇▇▇▇ Net Assets and the consolidated net
assets of the Brilliant Group as shown in the Completion Statement
calculated in accordance with clause 6 and Schedule 6 shall be less
than US$74,380,000, the Vendor shall repay to the Purchaser the amount
of the shortfall. The Consideration shall not be adjusted upwards.
4.3 If the Emess Lighting Net Assets as shown in the Completion Statement
calculated in accordance with clause 6 and as set out in Schedule 6:
(a) exceed US$15,000,000 the Purchaser shall pay or procure the
payment to the Vendor the amount of the excess; and
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20
(b) are less then US$15,000,000 the Vendor shall repay to the
Purchaser the amount of the shortfall.
4.4 For the purposes of the Apportionment Schedule, the Vendor and the
Purchaser agree that the amount of the Consideration to be allocated
to:
(A) the Emess Lighting Business and Emess Assets shall be
US$9,000,000; and
(B) the Business Intellectual Property attributable to
the ▇▇▇▇▇▇ Business shall be US$5,000,000;
and, for the avoidance of doubt, if any or both of the
attributed values specified in (a) and/or (b) above (an
"ATTRIBUTED VALUE") differ from the value which such Business
or Asset or Business Intellectual Property would otherwise
have had there been no attribution pursuant to this clause 4.4
(an "ACTUAL VALUE"), the difference between the Attributed
Value and the Actual Value shall not be construed as an
adjustment to the Consideration payable under this clause 4
but shall instead be allocated to the other Assets or
Businesses or the Shares in such manner as agreed by the
Vendor and the Purchaser.
4.5 The Purchaser shall pay the Vendor the sum of (pound)81,000,000 less
the Emess Loyalty Bonus and an amount equal to the Intercompany
Indebtedness on 3 July 2000 (or the date of Completion if later) on
account of the Consideration payable in accordance with clause 4.1.
4.6 On 3 July 2000 (or the date of Completion if later) the Purchaser shall
procure that each of the relevant members of the Brilliant Group repay
to the relevant member of the Vendor's Group the amount of the
Intercompany Indebtedness attributable to it in the Indebtedness
Schedule.
4.7 The Vendor shall indemnify the Purchaser and each member of the
Brilliant Group against all losses, liabilities and costs which the
Purchaser or any member of the Brilliant Group may incur arising out of
or in connection with any Indebtedness other the Intercompany
Indebtedness.
4.8 If a party fails to pay any sum due and payable by it under this
Agreement on the due date of payment in accordance with the terms of
this Agreement, the party shall pay interest on the sum from the due
date until the date upon which the obligation of the party to pay the
sum is discharged at the rate of 2 per cent. per annum above LIBOR
(whether before or after judgment).
4.9 Any payment to be made under this clause shall be made by banker's
draft on the branch of a London clearing bank or by telegraphic
transfer to such account as shall be notified by the party due to
receive the payment to the other party not later than two Business Days
before the date of the payment. Any payment to the Vendor shall be made
to the Vendor's Solicitors Client Account at National Westminster Bank
Plc, Bishopsgate Business Centre, P.O. Box 34, ▇▇ ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇ account number ▇▇▇▇▇▇▇▇, sort code 50-00-00. Any payment made
pursuant to clauses 4.2 and/or 4.3 shall be made in US Dollars and
shall be made within 5 Business Days after agreement of determination
of the Completion Statement in accordance with clause 6. Any payment
made by the Purchaser to the Vendor or the Vendor's Solicitors shall be
a good discharge to the Purchaser and each member of the Brilliant
Group (and those on whose behalf such payment is made) and neither the
Purchaser nor any member of the Brilliant Group (and those on whose
behalf
- 20 -
21
such payment is made) shall not be obliged to see to the application
between the Vendors and members of the Vendor's Group.
5. COMPLETION
5.1 Completion shall take place at the offices of the Vendor's Solicitors
on 30 June 2000 or such other date in accordance with clause 5.4 or as
the parties may agree following satisfaction or waiver of the
Conditions.
5.2 At Completion effective control of the Emess Lighting Business and
▇▇▇▇▇▇ Business and the Shares shall pass to the Purchaser or as it may
nominate and the Vendor shall:
(a) deliver to the Purchaser evidence in a form reasonably
satisfactory to the Purchaser (whether by way of a certificate
of the Vendor's Solicitors or otherwise) of satisfaction of
the Condition set out in clause (a);
(b) complete the sale of the Properties in accordance with the
provisions of Part B of Schedule 3 (it being acknowledged that
completion of the sale of certain Properties may not take
place at Completion);
(c) give possession to the Purchaser or as it may nominate of
those ▇▇▇▇▇▇ Assets and Emess Assets which are transferable by
delivery;
(d) execute and deliver to the Purchaser or as it may nominate
▇▇▇▇▇▇▇▇▇ Licence and the Intellectual Property Assignment;
(e) deliver to the Purchaser or as it may nominate a release or
certificate of non-crystallisation in the form reasonably
satisfactory to the Purchaser in respect of any Encumbrance
affecting any of the ▇▇▇▇▇▇ Assets and Emess Assets;
(f) (if requested by the Purchaser in writing prior to the date
hereof) deliver to the Purchaser or as it may nominate in a
form reasonably acceptable to the Purchaser duly executed
assignments or bills of sale or otherwise vest in the
Purchaser those ▇▇▇▇▇▇ Assets and Emess Assets which are not
transferable by delivery including, without limitation the
Intellectual Property Assignments;
(g) deliver to the Purchaser the Business Records;
(h) deliver or procure delivery to the Purchaser each item
specified in Schedule 9;
(i) ensure that at Completion the directors of each of Brilliant
Holding and the Brilliant Subsidiaries excluding Brilliant AG
and its subsidiaries hold such meetings of the shareholders
and directors as may be required:
(i) vote in favour of the registration of the Purchaser
or its nominee(s) as member(s) of that company in
respect of the Shares (subject to the production of
properly stamped transfers);
(ii) change that company's registered office to a place
nominated by the Purchaser;
(iii) change that company's accounting reference date to a
date nominated by the Purchaser;
(iv) appoint persons nominated by the Purchaser as
directors, secretary and auditors of that company
with effect from the end of the meeting; and
(v) revoke each existing mandate given by that company
for the operation of its bank accounts and pass the
resolutions contained in new mandate(s) giving
authority to persons nominated by the Purchaser.
(j) ensure that ▇▇▇▇▇▇ B.V. acknowledges the transfer of its
shares to the Purchaser and that the transfer of the shares
will be recorded in the shareholders register;
- 21 -
22
(k) procure that the Management Board of Eclatec SA shall meet to
convene a general ordinary shareholders' meeting that will
appoint new members of the Supervisory Board;
(l) pay or procure the repayment to the relevant member of the
Brilliant Group of any Brilliant Receivable; and
(m) pay or procure the repayment of the Indebtedness other than
the Intercompany Indebtedness.
5.3 At or as soon as practicable after Completion, the parties shall take
all reasonable steps including the execution of documents to transfer
to the Purchaser all rights of the Vendor or any member of the Vendor's
Group in domain names included in the Business Intellectual Property
Rights.
5.4 At Completion the Purchaser shall:
(a) deliver to the Vendor (in a form satisfactory to the Vendor in
its absolute discretion) a copy of:
(i) an irrevocable instruction to its bank to pay the
amount specified in clause 4.5 in accordance with
clause 4.9; and
(ii) the Purchasers contract(s) to buy pounds sterling in
an amount equal to the consideration payable in
accordance with clause 4.5; and
(iii) the Purchasers banks letter of commitment to pay the
full amount of the consideration payable in
accordance with clause 4.5,
and if the Purchaser fails to provide the documents referred
to in this clause (a) or if the documents are not in a form
that is satisfactory to the Vendor, the Vendor shall be
entitled to postpone the date of Completion to 3 July 2000 in
which event all the provisions of this clause 5 shall operate
as drafted save that this clause 5.4.1 shall be deemed amended
so that the Purchasers' obligations to satisfy the
consideration under clause 4.5 and repay the Intercompany
Indebtedness under clause 4.6 shall arise at Completion as
postponed to 3 July 2000;
(b) deliver to the Vendor the ▇▇▇▇▇▇▇▇▇ Licence duly executed by
the relevant member of the Purchaser's Group;
(c) deliver to the Vendor the Intellectual Property Assignments
duly executed by the relevant member of the Purchaser's Group;
(d) deliver to the Vendor the Assumption of Liability Agreement,
duly executed by the Purchaser or the relevant member of the
Purchaser's Group.
5.5 On 3 July 2000 (or the date of Completion if later) the Purchaser shall
pay the amounts specified in clauses 4.5 and 4.6 in accordance with its
clause 4 or this clause 5 (as appropriate).
5.6 The Vendor and the Purchaser or their duly authorised representatives
shall execute a notarial deed in the form of a notary public assigning
title to the Shares from the Vendor to the Purchaser or its nominee
effective as of the date of Completion, where the same is required by
the jurisdiction governing such assignment.
5.7 The Purchaser shall not be obliged to complete this Agreement unless:
(a) the Vendor complies in all material respects with all its
obligations under clause 5; and
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23
(b) the purchase of all of the Shares and the ▇▇▇▇▇▇ Assets and
Emess Assets is completed simultaneously (but so that if the
Purchaser exercises its option pursuant to clause 5.8
completion of the purchase of some of the Shares and/or the
▇▇▇▇▇▇ Assets and Emess Assets will not affect the rights of
the Purchaser with respect to the others).
5.8 Subject to clause 3.8 if Completion does not take place on the date set
for Completion in clause 5.1 as a result of the Vendor failing to
comply fully with any of its obligations under clause 5, the Purchaser
may at its option (but without prejudice to any other right or remedy
it may have) by notice in writing to the Vendor elect to proceed to
Completion in so far as reasonably practicable.
6. COMPLETION STATEMENT AND ADJUSTMENTS TO PURCHASE PRICE
6.1 As soon as possible after Completion the Purchaser shall prepare a
statement (the "Statement") showing:
(a) as at the close of business on date of Completion the ▇▇▇▇▇▇
Net Assets and the Emess Net Assets in accordance with the
principles referred to in clause 6.2;
(b) a consolidated profit and loss account of the Brilliant Group
for the period starting on the day after the Latest Accounting
Date and ending close of business on the date of Completion
and a consolidated balance sheet of the Brilliant Group as at
the date of Completion and all attached notes prepared in
accordance with the principles referred to in clause 6.3; and
during the preparation of the Statement the Vendors
Accountants shall be consulted as appropriate.
6.2 Except as provided in Schedule 6 (which, in the event of any conflict,
shall override the provisions of this clause 6.2), the ▇▇▇▇▇▇ Net
Assets and the Emess Net Assets shall be calculated and the profit and
loss account, balance sheet and notes shall be prepared on a basis
consistent with the same accounting principles, policies and practices
that are normally adopted in the preparation of the Business Accounts
and otherwise prepared in accordance with the requirements of generally
accepted accounting principles in the United Kingdom.
6.3 Except as provided in Schedule 6 (which, in the event of any conflict,
shall override the provisions of this clause 6.3), the accounts
referred to in clause (b) in relation to each member of the Brilliant
Group shall be prepared on a basis consistent with and using the same
accounting principles, policies and practices, that are normally
adopted in the preparation of the Brilliant Accounts and otherwise
prepared in accordance with the requirements of generally accepted
accounting principles in the United Kingdom.
6.4 The Purchaser shall or shall procure that within 30 days after
Completion there is submitted to the Vendor the Statement and working
papers prepared in accordance therewith. The Vendor shall or shall
procure that within 30 days of receipt of the Statement and working
papers it or the Vendor's Accountants on its behalf certify whether or
not they agree with the Statement. The Purchaser shall procure that the
Vendor and the Vendor's Accountants are given all such assistance and
access to all such information as they may reasonably require in order
to enable them to prepare their certificate for the purposes of this
clause 6.4.
6.5 If the Vendor or the Vendor's Accountants certify their agreement with
the Statement, it shall constitute the Completion Statement. If the
Vendor or the Vendor's Accountants certify that they disagree with the
Statement, then the provisions of clause 6.6 shall apply and the
decision of the independent firm of chartered accountants produced in
accordance with
- 23 -
24
clause 6.6 shall constitute the Completion Statement. If the Vendor nor
the Vendor's Accountants do not give the Purchaser the certificate
required by clause 6.4 within the prescribed time limit, the statement
shall constitute the Completion Statement, provided always that, in the
event that the time limits prescribed in this clause 6 are varied by
written agreement between the parties to this Agreement, the provisions
of this clause 6 shall apply as if the varied dates were those
prescribed hereunder.
6.6 If any dispute arises between the parties as to the amount of
consideration payable under clause 4 or between the Vendor or the
Vendor's Accountants and the Purchaser or the Purchaser's Accountants
as to any matter to be included in the Completion Statement either
party may give notice that a dispute exists (a "DISPUTE NOTICE") to the
other party and if the parties have not resolved the dispute within 10
Business Days of the date of receipt of the Dispute Notice by the other
party, the following provisions shall apply. Either party may refer the
dispute to an independent firm of chartered accountants agreed by the
parties or in default of agreement within 20 Business Days of the date
of the Dispute Notice, an independent firm of chartered accountants
nominated by the President for the time being of the Institute of
Chartered Accountants in England and Wales (the "EXPERT"), with a
request that the Expert make a decision on the dispute within 20
Business Days of receiving the reference. In any reference, the Expert
shall act as an expert and not as an arbitrator. The decision of the
Expert shall, in the absence of fraud or manifest error, be final and
binding on both parties. The costs of the Expert shall be borne equally
by the parties.
7. WARRANTIES
7.1 The Vendor warrants to the Purchaser in the terms of the Warranties.
Each of the Warranties shall be deemed to have been repeated
immediately prior to Completion by reference to the facts then
existing.
7.2 The Vendor acknowledges that the Purchaser is entering into this
Agreement in reliance upon each of the Warranties.
7.3 The Warranties shall be qualified by reference to those matters fairly
disclosed in the Disclosure Letter. A matter shall only be regarded as
having been fairly disclosed in relation to any document received by
the Purchaser or its advisers after 5 pm on Tuesday, 23 May 2000 if the
importance of the matter has been brought to the attention of the
Purchaser in the Disclosure Letter.
7.4 Save in respect of any rights the Vendor may have against the
directors, employees, agents or advisers of the Target Group in respect
of fraud or fraudulent concealment the Vendor agrees with the Purchaser
that it shall waive and not enforce any right which it may have in
respect of any misrepresentation, inaccuracy or omission in or from any
information or advice supplied or given by any officer, employee or
adviser of or to the Target Group for the purpose of assisting the
Vendor to give any of the Warranties or to prepare the Disclosure
Letter.
7.5 Each of the Warranties shall be construed separately and independently
and (save where expressly provided to the contrary) shall not be
limited or restricted by reference to any of the other Warranties.
7.6 During the period beginning on the execution of this Agreement and
ending on the date of Completion the Vendor shall and shall procure
that each members of the Vendor's Group shall comply with the
provisions of Schedule 7 and the Vendor shall not and shall procure
that no member of the Vendor's Group or their respective officers or
employees shall, do or allow any act or omission which would constitute
a breach of any of the Warranties if the Warranties were given at any
time up to the date of Completion.
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25
7.7 The only Warranties given by the Vendor in respect of or relating to
the ▇▇▇▇▇▇ Property are contained in paragraph 7 of part 1 of Schedule
5 and the only Warranties given by the Vendor in respect of or relating
to environmental matters are contained in paragraph 8 of part 1 of
Schedule 5 and the only Warranties given by the Vendor in respect of or
relating to the tax are contained in paragraph 4 of Part 1 of Schedule
5 and Part 2 of Schedule 10.
7.8 The Purchaser warrants to the Vendor in the following terms (which
shall remain in full force and effect after Completion):
(A) ORGANISATION
The Purchaser is a corporation duly organised, validly existing and in
good standing under the laws of the State of Oklahoma and has the
corporate power to carry on its business as it is now being conducted
or presently proposed to be conducted.
(B) AUTHORISATION
The Purchaser has all requisite corporate power to enter into and
perform this Agreement, each document to be executed by the Purchaser
at or before Completion and the transactions and matters contemplated
thereby and has taken all necessary action to authorise the entry into
and performance of, and has obtained all applicable governmental,
statutory, regulatory or other consents, licences, waivers or
exemptions required to empower it to enter into and perform, this
Agreement, each document to be executed by the Purchaser at or before
Completion and the transactions and matters contemplated thereby.
(C) PROPERTY EXECUTION
The Purchaser's obligations under this agreement and each document to
be executed at or before Completion are or when the relevant document
is executed, will be enforceable in accordance with their terms, except
as the same may be limited by (i) bankruptcy, insolvency,
re-organisation, moratorium or similar laws now or hereafter in effect
relating to creditors rights generally; and (ii) general equitable
principles.
8. INDEMNITIES
8.1 Subject to the limitations below the Vendor shall fully and effectively
indemnify and keep indemnified the Purchaser's Group and any member of
the Brilliant (AG Group Excluded) Group against:-
(A) Compulsory Remediation Costs and Compulsory Contamination
Penalties;
(B) Voluntary Remediation Costs.
8.2 [Clause not used.]
8.3 The Purchaser shall inform the Vendor in writing of any Pre-Completion
Contamination of which the Purchaser has become aware and any
circumstances or state of affairs including any Contamination Claim
giving reasonable details of the same which indicates the Vendor may
incur liability under 8.1 above giving full written particulars of the
same within 21 days of the Purchaser becoming aware of the same
PROVIDED that no notification under this
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26
clause shall be effective to the extent that it is a general
notification that does not relate to and provide details of a specific
issue of actual Pre-Completion Contamination;
8.4 No claim under the indemnity at 8.1 above shall be permitted to the
extent that:-
(A) the claim arises from any act or omission of the Purchaser's
Group which is not in the ordinary course of business of the
relevant company;
(B) the claim arises as a result of any change in use or
development of a Property or any voluntary investigation by or
on behalf of the Purchaser's Group (the cost of which is not
covered by this Environmental Indemnity), any Affiliated
Company and any member of the Brilliant (AG Group Excluded)
Group of the state and condition of the soil or groundwater at
such Properties;
(C) the Purchaser's Group is entitled to recover sums otherwise
recoverable under the Environmental Indemnity from any other
party;
(D) it is limited by the application of clause 9.2 of this
Agreement;
(E) the claim is in relation to Hazardous Substances which are not
Pre-Completion Contamination;
(F) the claim is increased by or arises as a result of the
Purchaser, any Affiliated Company and any member of the
Brilliant Group failing to take all reasonable steps to
mitigate the claim or to comply with the provisions of this
Environmental Indemnity and/or the Agreement;
(G) the claim arises or is increased by any change in
Environmental Law or remediation standards from those in force
or followed as at the date of this Agreement;
8.5 No claim under the indemnity at 8.1 above shall be permitted if:-
(A) notice is given pursuant to 8.3 above in respect of a Property
more than four years after the date of Completion and in
relation to Former Properties more than six years after the
date of Completion;
(B) the matter in question has been disclosed to any Regulatory
Authority or third party by the Purchaser's Group or its
agents (save where disclosure is required under the
Environmental Law);
8.6 Save to the extent the Operations or a member of the Brilliant (AG
Group Excluded) Group would be materially prejudiced, in which case the
Purchaser shall retain conduct subject to the Vendor accepting, subject
to the terms and limitations of this Environmental Indemnity, liability
in relation to any matter for which notice is given pursuant to 8.3
above, the Vendor may at its absolute discretion assume sole conduct of
any actual or potential Contamination Claim (and any claim arising
against any third party in relation to the same matter (for the
purposes of this sub-clause (a "Third Party Claim")) provided that the
Vendor keeps the Purchaser informed of the conduct of any such
Environmental Claim or Third Party Claim and complies with the
reasonable requests of the Purchaser in relation to the conduct of the
same;
8.7 Save to the extent where the Operations or a member of the Brilliant
(AG Group Excluded) Group would be materially prejudiced, in which case
the Purchaser shall retain conduct subject to the Vendor accepting,
subject to the terms and limitations of this Environmental Indemnity,
liability in relation to any matter for which notice is given pursuant
to 8.3 above, the Vendor may at its absolute discretion assume sole
conduct of any works which will give rise to Voluntary Remediation
Costs or Contamination Claim (and any claim arising against any third
party in relation to the same matter (for the purposes of this
sub-clause a "Third Party Claim")) provided that the Vendor keeps the
Purchaser informed of the conduct of any
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27
such Minimum Works and Third Party Claim and complies with the
reasonable requests of the Purchaser in relation to the conduct of the
same;
8.8 Where the Vendor does not assume conduct under 8.6 or 8.7 above, the
Purchaser shall be obliged, in relation to any proposed works for which
a claim for Voluntary Remediation Costs may arise, to obtain the
agreement of the Vendor that the proposed works constitute the Minimum
Works before commencing any such works and in the event of a failure to
obtain agreement, then the Vendor and the Purchaser shall jointly
appoint an independent environmental consultant to determine what
constitutes the Minimum Works whose determination thereof shall be
binding on the parties.
8.9 The Vendor shall fully indemnify and keep indemnified the Purchaser and
each member of the Purchaser's Group against any liability, loss,
damage, penalty, cost or expense (including any reasonable legal and
other professional fees) incurred in defending or resolving any actions
or claims (civil or criminal) or in appealing against any judgment,
notice or award which are suffered or incurred by the Purchaser or any
member of the Purchaser's Group which arise out of:-
(a) any re-organisation of the corporate structure of the Vendor's
Group prior to Completion;
(b) the attachment of CE quality ▇▇▇▇ stickers attached to lamps
manufactured by ▇▇▇▇▇▇ Lighting B.V;
(c) any action taken by the ING Bank to crystallise its right to
have a lien on the machinery and goods of the ▇▇▇▇▇▇ Lighting
B.V. as a result of the repayment of any inter-company
indebtedness;
(d) any right of ▇▇ ▇▇▇▇▇ to subscribe for or sell any interest in
the shares of Brilliant (Aust) Pty Limited.
9. LIMITATIONS ON THE VENDOR'S LIABILITY
9.1 The Vendor shall have no liability whatsoever in respect of any
Relevant Claim save in relation to any claim under the Tax Schedule
unless and until the amount that would otherwise be recoverable from
the Vendor in respect of that Relevant Claim, when aggregated with any
other amounts so recoverable in respect of other Relevant Claims,
exceeds an aggregate threshold of US$1,000,000 in which event all
Relevant Claims including Relevant Claims previously notified, shall be
recoverable.
9.2 The aggregate liability of the Vendor in respect of all Relevant Claims
which for the purposes of this clause shall include any claim under the
Environmental Indemnity shall not exceed the aggregate of the
consideration payable under the provisions of clause 4.1.
9.3 The Vendor shall have no liability for any Relevant Claim unless notice
in writing of the Relevant Claim (stating in reasonable detail the
nature of the Relevant Claim including an estimate of the amount of
such claim if practicable) has been given to the Vendor (i) in the case
of a claim under the Tax Schedule or a Warranty relating to Tax on or
before the seventh anniversary of the date of Completion; and (ii) in
the case of any other Relevant Claim, on or before the second
anniversary of the date of Completion.
9.4 In respect of clause 9.3 the Vendor shall have no liability for any
such Relevant Claim (other than a claim under the Tax Schedule or the
Warranties relating to Tax in respect of the sale of Shares) unless (if
it has not been previously satisfied, settled or withdrawn) legal
proceedings have been instituted in respect of such claim by the due
service of process on the Vendor within six months of the date of
receipt of the written notice of the Relevant Claim.
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28
9.5 For the purposes of clause 9, "RELEVANT CLAIM" means any claim by an
Indemnified Person in respect of breach of any of the Warranties or any
claim made under the terms of the Tax Schedule.
9.6 No liability shall attach to the Vendor in respect of any claim under
the Tax Schedule to the extent that sums in respect of the matter
giving rise to the claim have been recovered under the Warranties and
no liability shall attach to the Vendor in respect of any claim under
or in connection with the Warranties to the extent that sums in respect
of the matter giving rise to the claim have been recovered under the
Tax Schedule.
9.7 No liability (whether in contract, tort or otherwise) shall attach to
the Vendor in respect of any claim under the Warranties other than the
Warranties relating to Tax in respect of the sale of the Shares to the
extent that:
(a) the claim or the events giving rise to the claim would not
have arisen but for an act, omission or transaction of the
Purchaser's Group otherwise than (i) in the ordinary and
proper course of the business of the Target Group or (ii) an
act of the Purchaser or any member of the Purchaser's Group at
the request of the Vendor or any member of the Vendor's Group;
(b) the claim is based upon a liability which is contingent only,
unless and until such contingent liability becomes an actual
liability (provided that nothing in this clause shall prevent
notice being given of any Relevant Claim);
(c) provision or reserve shall have been made in the Accounts or
the Completion Statement in respect of the matter giving rise
to the claim;
(d) the claim would not have occurred but for or the amount
thereof is increased as a result of:
(i) any change in the accounting principles or practices
of the Purchaser's Group introduced or having effect
after the date of Completion unless the same is
introduced to bring the accounting principles and the
practices into line with generally accepted
accounting principles and practices in the relevant
jurisdiction in relation to a business of the type
carried on by any member of the Brilliant Group; or
(ii) any increase in the rates of taxation made after the
date hereof; or
(iii) any change in law or regulation or in its
interpretation or administration by the courts of any
relevant jurisdiction, by the Inland Revenue, the
Internal Revenue Service or by any other fiscal,
monetary or regulatory authority (whether or not
having the force of law) within the relevant
jurisdictions;
(e) the loss or damage giving rise to the claim is recoverable by
any member of the Purchaser's Group under any policy of
insurance after deduction of the reasonable costs of recovery
of the Purchaser or any member of the Purchaser's Group and
for such purposes, the Purchaser's Group shall be obliged to
use its reasonable endeavours to make such recovery under all
available policies of insurance provided that this provision
shall not apply to the extent that the relevant member of the
Purchaser's Group shall not have recovered under any policy of
insurance within 6 months of the date that notice of the
Relevant Claim is given to the Vendor;
(f) the claim relates to a claim or liability for Taxation and
would not have arisen but for any winding-up or cessation
after Completion of any of the Businesses or part of it except
to the extent that such winding-up or cessation is occasioned
by the facts or circumstances giving rise to one or more
claims under the Warranties.
(g) No liability will arise and no claim may be made under any of
the Warranties to the extent that the matter giving rise to
such claim is remediable unless within period of
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29
30 Business Days following the Purchaser becoming aware of
such matter the Purchaser shall have given written notice
thereof to Vendor and such matter shall not have been remedied
to the reasonable satisfaction of the Purchaser within the
period of 30 Business Days following the date of service of
such notice.
9.8 Clause 9.9 shall apply in circumstances where:
(a) any claim is made against the Purchaser's Group which may give
rise to a claim by any member of the Purchaser's Group against
the Vendor under the Warranties other than the Warranties
relating to Tax in respect of the sale of Shares (the "GENERAL
WARRANTIES"); or
(b) the Purchaser's Group is or may be entitled to make recovery
from some other person any sum in respect of any facts or
circumstances by reference to which any member of the
Purchaser's Group has or may have a claim against the Vendor
under the General Warranties; or
(c) the Vendor shall have paid to any member of the Purchaser's
Group an amount in respect of a claim under the General
Warranties and subsequent to the making of such payment the
Purchaser's Group becomes or shall become entitled to recover
from some other person a sum which is referable to that
payment. For the avoidance of doubt any claim under the
Warranties relating to Tax in respect of the sale of shares
shall be governed by clause 1 of part 4 of Schedule 10.
9.9 The Purchaser shall and shall procure after Completion that the
Purchaser's Group shall:
(a) without prejudice to the validity of the claim or alleged
claim in question and subject to the Purchaser's Group being
indemnified to the reasonable satisfaction of the Purchaser by
the Vendor against all reasonable costs and expenses which may
properly be incurred by reason of such action) promptly and
diligently take all such action as the Vendor may reasonably
request including the institution of proceedings and the
instruction of professional advisers approved by the Vendor to
act on behalf of the Purchaser's Group to avoid, dispute,
resist, compromise, defend or appeal against any such claim
against the Purchaser's Group as is referred to in clause (a)
or to make such recovery by the Purchaser's Group as is
referred to in clause (b) or clause (c) as the case may be;
and
(b) not settle or compromise any liability or claim to which such
action is referable without the prior written consent of the
Vendor which consent shall not be unreasonably withheld or
delayed; and
(c) in the case of clause (c) only, promptly repay to the Vendor
an amount equal to the amount so recovered or, if lower, the
amount paid by the Vendor to the Purchaser.
9.10 Save as expressly provided in this Agreement the Purchaser shall not
Agreement the Purchaser shall not have any right to rescind or
terminate this Agreement or any other documents referred to in this
Agreement either for breach of contract or for negligent or innocent
misrepresentation or otherwise.
9.11 Without prejudice to the validity of any claim or alleged claim in the
event that the Vendor at any time after the date hereof shall wish to
take out insurance against its liability hereunder the Purchaser
undertakes to provide such information as the prospective insurer may
reasonably require before effecting such insurance.
9.12 The Purchaser will take or procure the taking of all such reasonable
steps and action as are necessary in order to mitigate any claim under
the Warranties. Nothing in this agreement shall or shall be deemed to
relieve the Purchaser of any common law duty to mitigate any loss or
damage incurred by it.
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30
9.13 The Purchaser warrants that as at the date hereof it has no knowledge
of any facts which it is aware will or could with reasonable certainty
give rise to a claim against the Vendor under the Warranties.
10. LIABILITIES
10.1 Subject to clauses 10.3 and 11, the Vendor shall or shall procure that
the relevant Asset Vendor shall:
(a) save in relation to matters covered under the Environmental
Indemnity or the Environmental Warranties continue to be
responsible for, and shall duly and promptly pay and
discharge, all debts payable by the relevant Asset Vendor and
claims by and liabilities to third parties outstanding against
the relevant Asset Vendor as at the date of Completion or
arising by reason of the operation of the ▇▇▇▇▇▇ Business or
the Emess Lighting Business (as appropriate) or any act or
omission by the Asset Vendor or any fact, event or condition
existing on or before the date of Completion except for such
debts, claims or liabilities that are assumed by the Purchaser
in the assumption of liabilities agreement and the Trade
Credits; and
(b) save in relation to matters covered under the Environmental
Indemnity or the Environmental Warranties indemnify the
Purchaser against all losses, liabilities and costs which the
Purchaser may incur arising out of, or as a consequence of,
the ownership or operation of the ▇▇▇▇▇▇ Business or ▇▇▇▇▇▇
Assets or the Emess Lighting Business or Emess Assets before
the date of Completion (including, without limitation, all
losses, liabilities and reasonable costs incurred as a result
of defending or settling any claim (a "SPECIFIED CLAIM")
alleging any such liability) other than those arising out of
the breach by the Vendor of any of the Warranties or other
provisions of this Agreement and except for such losses,
liabilities and costs that are assumed by the Purchaser in the
assumption of liabilities agreement and the Trade Credits.
10.2 Subject to clauses 10.3, and 11 the Purchaser shall:
(a) be responsible for all Trade Credits and debts falling due
after the date of Completion in respect of the ▇▇▇▇▇▇ Business
and ▇▇▇▇▇▇ Assets and the Emess Lighting Business and ▇▇▇▇▇▇
Assets; and
(b) indemnify the Vendor and the Asset Vendor against all losses,
liabilities and reasonable costs which the Vendor and the
Asset Vendor may incur to the extent arising out of, or as a
consequence of, the ownership or operation of the ▇▇▇▇▇▇
Business or ▇▇▇▇▇▇ Assets of the Emess Lighting Business and
Emess Assets or the Trade Credits after the date of Completion
(including, without limitation, all losses, liabilities and
costs incurred as a result of defending or settling any claim
(a "SPECIFIED CLAIM") alleging any such liability).
10.3 If either party (the "INDEMNIFIED PARTY") becomes aware of any matter
which might give rise to a Specified Claim, the following provisions
shall apply:
(a) the Indemnified Party shall immediately give written notice to
the other party (the "INDEMNIFYING Party") of the matter
(stating in reasonable detail the nature of the matter and
(including the grounds on which such claim is based and the
amount claimed to be payable in respect thereof and shall
consult with the Indemnifying Party with respect to the
matter. If the matter has become the subject of any
proceedings the Indemnified Party shall give the notice within
sufficient time to enable the Indemnifying Party time to
contest the proceedings before any final judgment;
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31
(b) the Indemnified Party shall:
(i) take such action and institute such proceedings, and
give such information and assistance, as the
Indemnifying Party or its insurers may reasonably
request to:
(A) dispute, resist, appeal, compromise, defend,
remedy or mitigate the matter; or
(B) enforce against any person (other than the
Indemnifying Party) the rights of the
Indemnified Party or its insurers in
relation to the matter; and
(ii) in connection with any proceedings related to the
matter (other than against the Indemnifying Party)
use professional advisers nominated by the
Indemnifying Party or its insurers and, if the
Indemnifying Party so requests, allow the
Indemnifying Party or its insurers the exclusive
conduct of the proceedings, in each case on the basis
that the Indemnifying Party shall fully indemnify the
Indemnified Party for all reasonable costs incurred
as a result of any request or nomination by the
Indemnifying Party or its insurers;
(c) if the Purchaser is the Indemnified Party, clause (b) shall
not apply if the request or nomination by the Vendor would in
the Purchaser's reasonable opinion materially prejudice its
relationship with any customer or supplier either of the
Businesses;
(d) the Indemnified Party shall not admit liability in respect of
or settle the matter without the prior written consent of the
Indemnifying Party, such consent not to be unreasonably
withheld or delayed.
11. CONTRACTS
11.1 Subject to clause (c), after Completion the Purchaser shall perform or
shall procure the performance of all the obligations under the
Contracts in a proper and workmanlike manner and shall indemnify the
Vendor and each member of the Vendor's Group against all losses,
liabilities and costs which the Vendor or any member of the Vendor's
Group may incur arising out of, or as a consequence of, the performance
of the Purchaser's obligations under each Contract to the extent that
the loss, liability or cost is attributable to any act, default or
omission of the Purchaser or any member of the Purchaser's Group after
the date of Completion (including, without limitation, all losses,
liabilities and costs incurred as a result of defending or settling any
claim alleging any such liability).
11.2 The Vendor shall indemnify the Purchaser and each member of the
Purchaser's Group against all losses, liabilities and costs which the
Purchaser or any member of the Purchaser's Group may incur arising out
of, or as a consequence of the performance by the Vendor and/or the
Asset Vendor of the Vendor's obligations or the obligations of any
member of the Vendor's Group under each Contract to the extent that the
loss, liability or cost is attributable to any act, default or omission
of the Vendor or any member of the Vendor's Group (including, without
limitation, all losses, liabilities and costs incurred as a result of
defending or settling any claim alleging any such liability).
11.3 If any of the Contracts cannot be transferred to the Purchaser or to a
member of the Purchaser's Group except by an assignment made with the
consent of another party or by an agreement of novation, then the
following provisions shall apply:
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32
(a) this Agreement shall not constitute an assignment or an
attempted assignment of the Contract if the assignment or
attempted assignment would constitute a breach of the
Contract;
(b) both before and after Completion the parties shall use their
respective reasonable endeavours to obtain the consent of the
other party to the assignment, or to procure the novation, of
the Contract;
(c) until the consent or novation is obtained, the Vendor shall do
or shall procure that the relevant Asset Vendor shall do all
such acts and things as the Purchaser may reasonably require
to enable due performance of the Contract and to provide for
the Purchaser or the relevant member of the Purchaser's Group
the benefits of the Contract (including enforcement at the
cost and for the account of the Purchaser of any right of the
Vendor or the relevant Asset Vendor against the other party to
the Contract arising out of its termination by the other party
or otherwise); and
(d) if the arrangements in clauses (b) and (c) cannot be made in
respect of the Contract the parties shall use their respective
reasonable endeavours to procure that the Contract is
terminated without liability to either of them and neither the
Vendor nor the Purchaser nor any member of their respective
Groups shall have any further obligation to the other relating
to the Contract except that the Vendor shall forthwith repay
or procure the repayment to the Purchaser any amount paid by
the Purchaser to the Vendor in respect of any such Contract.
(e) this clause 11.3 is without prejudice to the rights of the
Purchaser in respect of any Contract which the Vendor has
warranted is assignable, or may be performed by the Purchaser
in substitution for the Vendor, or the Asset Vendor without an
agreement of novation.
12. EMPLOYEES AND PENSIONS
12.1 The parties accept and agree that at Completion the Transfer
Regulations shall operate to transfer the contract of employment of
each ▇▇▇▇▇▇ Employee to the Purchaser.
12.2 The Vendor will perform and discharge all employer's obligations in
respect of each ▇▇▇▇▇▇ Employee due to be performed or discharged prior
to Completion (which shall for the avoidance of doubt include, but not
be limited to payment of salary, bonus, commission, pension
contributions and taxes arising out of the employment relationship).
12.3 The parties acknowledge and agree that pursuant to the Transfer
Regulations the contracts of employment between the Vendor and the
▇▇▇▇▇▇ Employees will with effect from completion have effect as if
originally made between the Purchaser and the ▇▇▇▇▇▇ Employees.
12.4 Before Completion the Vendor will inform and consult with
representatives of its employees who will be affected by this
Agreement, in accordance with its obligations under the Transfer
Regulations.
12.5 Prior to Completion the Vendor will deliver to each of the ▇▇▇▇▇▇
Employees a letter in terms to be agreed with the Purchaser informing
them that the Purchaser is to become their employer upon Completion.
12.6 In the event that any person (whether or not a ▇▇▇▇▇▇ Employee or an
Emess Employee) brings a claim against the Vendor and/or the Purchaser
or any member of their respective Groups arising out of or in
connection with or alleging the transfer or termination of that
person's employment, the Vendor and the Purchaser shall give to each
other as soon as practicable after any request thereof all information
which may reasonably be relevant to such claim and shall render to each
other such assistance and co-operation as either shall reasonably
require in contesting, settling or dealing with any such claims.
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12.7 The Vendor shall not terminate or in any way amend (whether orally or
in writing and whether expressly or impliedly) the contracts of
employment of any of the ▇▇▇▇▇▇ Employees without the prior written
consent of the Purchaser, such consent not to be unreasonably withheld
or delayed.
12.8 The Vendor shall fully indemnify the Purchaser and keep the Purchaser
fully indemnified against each and every action, proceeding, liability,
cost, claim, loss, expense (including legal expenses and other
professional fees together with any VAT thereon) and demand arising out
of or in connection with any claim by the ▇▇▇▇▇▇ Employees (or any of
them) and/or their representatives whether in contract or in tort or
under statute (including the Treaty of Rome and any Directives made
under the authority of that Treaty) for any remedy including without
limitation pursuant to the Transfer Regulations (including without
limitation, Regulation 10 save to the extent that any failure to comply
with the terms of Regulation 10 is a consequence of the Purchaser's
failure to comply with Regulation 10 (3)) or the Employment Rights ▇▇▇
▇▇▇▇ or for unfair dismissal, redundancy, statutory redundancy, equal
pay, sex or race or disability discrimination or under the Working Time
Regulations 1998 or under the National Minimum Wage Act 1998 as a
result of any act or omission by any person (other than the Purchaser
or any officers, employees or advisers of the Purchaser's Group) before
or at Completion (including without limitation the termination of their
employment by the Vendor or the relevant Asset Vendor and including
without limitation anything done or omitted to be done by the Vendor or
the relevant Asset Vendor which is deemed to have been done by the
Purchaser or any member of the Purchaser's Group by virtue of the
Regulations).
12.9 The Purchaser shall fully indemnify the Vendor and each member of the
Vendor's Group and keep the Vendor and each member of the Vendor's
Group fully indemnified against each and every action, proceeding,
liability, cost, claim, loss, expense (including legal expenses and
other professional fees together with any VAT thereon) and demand
arising out of or in connection with any claim by the ▇▇▇▇▇▇ Employees
(or any of them) and/or their representatives whether in contract or in
tort or under statute (including the Treaty of Rome and any Directives
made under the authority of that Treaty) for any remedy including
without limitation pursuant to the Transfer Regulations or the
Employment Rights ▇▇▇ ▇▇▇▇ or for unfair dismissal, redundancy,
statutory redundancy, equal pay, sex or race or disability
discrimination or under the Working Time Regulations 1998 or under the
National Minimum Wage Act 1998 as a result of any act or omission by
the Purchaser or any member of the Purchaser's Group at or after
Completion (including without limitation the termination of their
employment by the Purchaser or any member of the Purchaser's Group)
12.10 The Vendor shall fully indemnify the Purchaser and each member of the
Purchaser's Group and keep the Purchaser and each member of the
Purchaser's Group fully indemnified against each and every action,
proceeding, liability, cost, claim, loss, expense (including legal
expenses on an indemnity basis and other professional fees together
with any VAT thereon) and demand arising out of or in connection with
any claim by any person who is not a ▇▇▇▇▇▇ Employee who shall claim to
have become an employee of or have rights against the Purchaser or any
member of the Purchaser's Group by virtue of the Transfer Regulations
and/or their representatives whether in contract or in tort or under
statute (including the Treaty of Rome and any Directives made under the
authority of that Treaty) for any remedy including without limitation
pursuant to the Transfer Regulations (including without limitation
Regulation 10) or the Employment Rights ▇▇▇ ▇▇▇▇ or for unfair
dismissal, redundancy, statutory redundancy, equal pay, sex or race or
disability discrimination or under the Working Time Regulations 1998 or
under the National Minimum Wage ▇▇▇ ▇▇▇▇
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34
(including without limitation claims relating to anything done or
omitted to be done by the Vendor or any member of the Vendor's Group
which is deemed to have been done by the Purchaser or any member of the
Purchaser's Group by virtue of the Regulations).
12.11 As soon as practicable after Completion the Vendor shall deliver to the
Purchaser either originals or (if originals no longer exist or are not
under the Vendor's custody or control or that of any member of the
Vendor's Group) copies of all records in relation to taxes arising out
of the employment relationship and of any other documents or records
(including, but not limited to, personnel records and files) which
concern or are relevant to the ▇▇▇▇▇▇ Employees and which are in the
possession or control of the Vendor or any member of the Vendor's
Group.
12.12 The Vendor and the Purchaser shall implement the pension arrangements
set out in Schedule 8.
12.13 With respect to the Emess Employees the Purchaser shall assume such
obligations of Emess Lighting with respect thereto as shall reflect
normal custom and practice.
13. VALUE ADDED TAX
13.1 The parties shall use their respective reasonable endeavours to secure
that the transfer of the ▇▇▇▇▇▇ Assets under this Agreement is treated
under act 5(1) of the Value Added Tax (Special Provisions) Order 1995
and sections 49 VATA as neither a supply of goods nor a supply of
services.
13.2 Notwithstanding clause 13.1 if value added tax is chargeable on the
transfer of any of the ▇▇▇▇▇▇ Assets under this Agreement, the
Purchaser shall (against delivery of tax invoices in respect of the
▇▇▇▇▇▇ Assets) pay the amount of the value added tax in addition to the
consideration in respect of the ▇▇▇▇▇▇ Assets payable under clause 4.
13.3 At Completion the Vendor shall deliver or shall procure that there is
delivered to the Purchaser all records referred to in section 49 of the
VATA. After Completion the Vendor shall not and shall procure that each
member of its Group shall not make any request to H.M. Customs and
Excise for the records to be taken out of the custody of the Purchaser.
During the period for which the records are required to be preserved
under paragraph 6 of Schedule 11 to the VATA (duty to keep records),
the Purchaser shall give the Vendor and any relevant member of its
Group reasonable access to the records for the purpose of inspecting
the records and making copies of them.
13.4 In the event that HM Customs and Excise determine that VAT is
chargeable on the sale of the ▇▇▇▇▇▇ Business and the ▇▇▇▇▇▇ Assets
hereunder then the Vendor shall immediately notify the Purchaser of
such determination and the Vendor agrees that such Value Added Tax (and
any interest or penalties thereon to the extent that the same was
caused by a delay by the Purchaser in paying such VAT having been
presented with a valid invoice or to the extent that such VAT or
interest or penalties thereon is caused by the Purchaser being wholly
or partly in breach of clause 13.5) shall be in addition to the
consideration and the Purchaser shall (against production by the Vendor
of VAT invoices in respect thereof) pay the amount of any such VAT (and
any interest or penalties thereon to the extent that the same was
caused by a delay by the Purchaser in paying such VAT having been
presented with a valid invoice or to the extent that such VAT or
interest and penalties thereon is caused by the Purchaser being wholly
or partly in breach of clauses 13.5 within 10 business days after
receipt of such notification to the Vendor.
13.5 The Purchaser warrants that at Completion it will be taxable person for
the purposes of article 5(1) of the Value Added Tax (Special
Provisions) Order 1995 and further that it will use the assets acquired
under this Agreement for the purposes as carrying on the same kind of
business as carried on by the Vendor and that it has elected to waive
the exemption
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35
pursuant to paragraph 2 of Schedule 10 of the VATA in respect of the
relevant ▇▇▇▇▇▇ Properties and shall properly notify HM Customs and
Excise of such election before the date of Completion.
13.6 All transfer taxes and sales taxes incurred in connection with the
transfer of Emess Lighting Business and Emess Property shall be borne
by the Purchaser. Emess Lighting Inc. and the Purchaser (and its
relevant Affiliated Companies) shall co-operate to file all tax returns
and other documentation as required by law and to obtain all applicable
exemptions by filing required certificates or otherwise.
Notwithstanding the foregoing, the Vendor and the Purchaser acknowledge
that Emess Lighting Inc. may not comply with any requirements relating
to a bulk sale notice for tax purposes.
14. POST-COMPLETION OBLIGATIONS
14.1 As from Completion until title in the ▇▇▇▇▇▇ Assets and Emess Assets
have effectively been vested in the Purchaser the Vendor shall hold or
shall procure that the Asset Vendor shall hold the ▇▇▇▇▇▇ Assets and
Emess Assets in trust for the Purchaser.
14.2 For a period of six years from Completion the Purchaser shall procure
that at all reasonable times during usual business hours the Business
Records are open to the inspection of the Vendor and the relevant
member of the Vendor's Group, their respective employees and agents and
such other persons as may be authorised by the Vendor who may take, at
the Vendor cost, such copies of the Business Records as the Vendor may
reasonably require. For a period of six years from Completion the
Vendor shall procure that at all reasonable times during usual business
hours any brought and sold ledgers, purchase and sales day books and
purchase and sales invoices and other books and records relating to the
Target Group retained by it or any member of the Vendor's Group shall
be open to the inspection of the Purchaser, its employees and agents
and such other persons as may be authorised by the Purchaser who may
take, at the Purchaser's cost, such copies of those Business Records as
the Purchaser may reasonably require.
14.3 Each party shall forthwith pass to the other any payment, notice,
correspondence, information or enquiry in relation to each of the
▇▇▇▇▇▇ Business, the Emess Lighting Business, or the ▇▇▇▇▇▇ Assets and
the Emess Lighting Assets or any member of the Brilliant Group or in
relation to the Brilliant Business which it or any member of its Group
receives after Completion and which properly belongs to the other party
or any member of the other party's Group.
14.4 At or as soon as practicable after Completion the parties shall send a
joint letter in the agreed form to each customer, client and supplier
of the ▇▇▇▇▇▇ Business and the Emess Lighting Business advising it of
the purchase of the ▇▇▇▇▇▇ Business and the Emess Lighting Business by
the Purchaser.
14.5 For a period of up to six months after Completion the Vendor shall give
to or shall procure the giving to the Purchaser, subject to the payment
by the Purchaser of any direct costs involved, such information and
assistance as the Purchaser may reasonably require relating to each of
the Businesses.
15. CONFIDENTIAL INFORMATION
15.1 The Vendor shall:
(a) not, and shall procure that no member of the Vendor's Group
will, at any time after the date of this Agreement use or
disclose to any person any Confidential Information or
Know-How or Brilliant Know-How which may be within or may come
to its knowledge; and
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36
(b) use its, and shall procure that each member of the Vendor's
Group will use its, best endeavours to prevent the disclosure
of any Confidential Information or Know-How or Brilliant
Know-How.
15.2 clause 15.1 shall not apply to:
(a) disclosure of any Confidential Information or Know-How or
Brilliant Know-How to officers or employees of the Purchaser
whose province it is to know about the Confidential
Information or Know-How or Brilliant Know-How on terms that
this clause 15 shall apply to any use or disclosure by the
employee or officer;
(b) use or disclosure of any Confidential Information or Know-How
or Brilliant Know-How required by law or the London Stock
Exchange or any other recognised exchange;
(c) disclosure of any Confidential Information or Know-How or
Brilliant Know-How to any professional adviser for the purpose
of advising the Vendor on terms that this clause 15 shall
apply to any use or disclosure by the professional adviser; or
(d) any Confidential Information or Know-How or Brilliant Know-How
which comes into the public domain otherwise than by breach of
this clause 15 by the Vendor their employees, officers or
professional advisors.
16. FURTHER VENDOR'S UNDERTAKINGS
16.1 At Completion or as soon as practicable thereafter the Vendor shall
procure that the names of its relevant subsidiaries are changed so as
not to include any of the words "▇▇▇▇▇▇", "Brilliant" or "Alsy" and
shall co-operate with the Purchaser in ensuring that the Purchaser is
able to simultaneously change the name of its relevant subsidiaries to
include the words "▇▇▇▇▇▇", "Brilliant" or "Alsy" as the case may be.
The Vendor acknowledges the reputation and goodwill is attached to the
names "▇▇▇▇▇▇", "Brilliant" and "Alsy" and that the Purchaser is
acquiring all rights in that name pursuant to this Agreement. The
Vendor shall not and shall procure that no member of the Vendor's Group
will at any time after Completion, directly or indirectly, use, or
authorise, encourage, allow or assist any person to use any of the name
or names identical or confusingly similar to "▇▇▇▇▇▇", "Brilliant" or
"Alsy") in connection with any activity whatsoever. The Purchaser or
its nominee, as the case may be, is permitted to use the name "Emess"
in relation to the Emess Lighting Business for a period of 3 months
immediately after the date of Completion.
16.2 Save that the Purchaser acknowledges that the business carried on in
the names of ▇▇▇▇▇ Lighting and ▇▇▇▇▇▇▇▇▇ Lighting have been and may
continue to be engaged in the sale of products which compete with those
of the Purchaser and of the Businesses and of the Brilliant Business
and the Vendor shall not, and shall procure that no member of the
Vendor's Group nor any successor to its or their business other than
each of the Businesses and the Brilliant Businesses will, for a period
of three years after this Agreement, either alone or jointly with,
through or as manager, adviser or agent for any persons, directly or
indirectly;
(a) solicit with a view to offering employment or an engagement on
behalf of itself or any other person or organisation any of
the staff employed in the Businesses or the Brilliant Business
in the 12 months before the date of this Agreement without the
prior consent in writing of the Purchaser save that nothing in
this clause (a) shall prevent the Vendor or any member of the
Vendor's Group from making an offer of employment to any
member of staff of the Businesses of the Brilliant Group who
applies in response to a general public advertisement;
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37
(b) disclose or use to its advantage or to the disadvantage of the
Purchaser any information about the Businesses or the
Brilliant Business or any member of the Brilliant Group or any
Intellectual Property or of other confidential information
about the Businesses and/or the Brilliant Business or their
finances or transactions;
(c) carry on, promote or be engaged, concerned or interested in,
or assist, any business which competes, directly or
indirectly, with the business of Eclatec SA or the ▇▇▇▇▇▇
Business as carried on at the date of this Agreement in any
territory in which the business of Eclatec SA or the ▇▇▇▇▇▇
Business was carried on at that date;
(d) in competition with the Businesses or the Brilliant Businesses
as carried on at the date of this Agreement engage in
commercial activity intended to procure orders from customers
located in the United States of America.
17. ANNOUNCEMENTS
17.1 Subject to clause 17.2, no public announcement, communication or
circular concerning the transactions referred to in this Agreement
shall be made or despatched at any time (whether before or after
Completion) by either party without the prior written consent of the
other party (such consent not to be unreasonably withheld or delayed).
17.2 Where the announcement, communication or circular is required by law or
any regulation or rule of any stock exchange or regulatory body it
shall be made by a party after consultation with the other party (where
practicable) and taking into account the reasonable requirements (as to
timing, contents and manner of making or despatch of the announcement,
communication or circular) of the other party.
18. COSTS
Except as otherwise expressly provided in this Agreement, each party
shall pay its own costs of and incidental to the negotiation,
preparation, execution and implementation by it of this Agreement and
of all other documents referred to in it.
19. ENTIRE AGREEMENT
Each party on behalf of itself and as agent for each of its Affiliated
Companies acknowledges and agrees with the other party (each such party
acting on behalf of itself and as agent for each of its Affiliated
Companies) that:
19.1 this agreement together with any other documents referred to in this
agreement (together the "TRANSACTION DOCUMENTS") constitute the entire
and only agreement between the parties and their respective Affiliated
Companies relating to the subject matter of the Transaction Documents;
19.2 neither it nor any of its Affiliated Companies have been induced to
enter into any Transaction Document in reliance upon, nor have they
been given, any warranty, representation, statement, assurance,
covenant, agreement, undertaking, indemnity or commitment of any nature
whatsoever other than as are expressly set out in the Transaction
Documents and, to the extent that any of them have been, it (acting on
behalf of itself and as agent on behalf of each of its Affiliated
Companies) unconditionally and irrevocably waives any claims, rights or
remedies which any of them might otherwise have had in relation
thereto;
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38
PROVIDED THAT the provisions of this clause 19 shall not exclude any
liability which any of the parties or, where appropriate, their
Affiliated Companies would otherwise have to any other party or, where
appropriate, to any other party's Affiliated Companies or any right
which any of them may have in respect of any statements made
fraudulently by any of them prior to the execution of this Agreement or
any rights which any of them may have in respect of fraudulent
concealment by any of them.
20. FURTHER ASSURANCE
20.1 At any time (whether before or after Completion) each party shall (at
its own cost) do and execute, or procure to be done and executed, all
necessary acts, deeds, documents and things as may be reasonably
requested of it by the other party to give effect to this Agreement.
20.2 Pending Completion the Vendor shall give the Purchaser and any person
authorised by it reasonable access to the Properties and the Business
Records and the Brilliant Records other than in relation to the AG
Group (including the right to take copies at the Purchaser's cost) and
the Vendor shall procure that the directors and employees of the Target
Owners other than AG Group will promptly give such information and
explanations as the Purchaser or any authorised person may reasonably
request.
21. GENERAL
21.1 No variation of this Agreement or of any of the documents in the agreed
form shall be valid unless it is in writing and signed by or on behalf
of each of the parties.
21.2 The failure to exercise or delay in exercising a right or remedy under
this Agreement shall not constitute a waiver of the right or remedy or
a waiver of any other rights or remedies and no single or partial
exercise of any right or remedy under this Agreement shall prevent any
further exercise of the right or remedy or the exercise of any other
right or remedy.
21.3 The rights and remedies of the Purchaser provided in this Agreement are
cumulative and not exclusive of any rights and remedies provided by
law.
21.4 The invalidity, illegality or unenforceability of any provision of this
Agreement shall not affect or impair the continuation in force of the
remainder of this Agreement.
21.5 Except to the extent that they have been performed and except as
expressly provided in this Agreement the Warranties, indemnities,
undertakings, and obligations contained in this Agreement shall remain
in full force and effect notwithstanding Completion.
22. ASSIGNMENT AND RELEVANT PURCHASER
22.1 Neither party shall assign or transfer or purport to assign or transfer
any of its rights or obligations under this Agreement except that
either party may assign to an Affiliated Company the benefit of all or
any of the other party's obligations under this Agreement provided
however that such assignment shall not be absolute but shall be
expressed to have effect only for so long as the assignee remains an
Affiliated Company.
22.2 In the event that the Purchaser shall nominate a Relevant Purchaser to
acquire part or the whole of the Target Group any reference to the
Purchaser shall be deemed to be to the Relevant Purchaser as
appropriate.
22.3 In the event that the Asset Vendor proposes to reorganise the ownership
within the Vendor's Group of any Assets the Purchaser shall not
unreasonably withhold its consent and after such reorganisation the
Asset Vendor shall be regarded as including in addition the transferor
in respect of such Assets.
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39
23. NOTICES
23.1 Any notice or other communication under or in connection with this
Agreement shall be in writing and shall be delivered personally or sent
by first class post pre-paid recorded delivery (and air mail if
overseas) or by fax, to the party due to receive the notice or
communication at its address set out in this Agreement or such other
address as either party may specify by notice in writing to the other.
23.2 In the absence of evidence of earlier receipt, any notice or other
communication shall be deemed to have been duly given:
(a) if delivered personally, when left at the address referred to
in clause 23.1;
(b) if sent by mail other than air mail, two days after posting
it;
(c) if sent by air mail, six days after posting it; and
(d) if sent by fax, on completion of its transmission.
24. GOVERNING LAW AND JURISDICTION
24.1 This Agreement is governed by, and shall be construed in accordance
with, English law.
24.2 Each party irrevocably agrees for the benefit of the Purchaser that the
courts of England shall have exclusive jurisdiction to hear and
determine any suit, action or proceedings, and to settle any disputes,
which may arise out of or in connection with this Agreement
(respectively, "PROCEEDINGS" and "DISPUTES") and, for such purposes,
irrevocably submits to the jurisdiction of the courts of England.
24.3 Each party irrevocably waives any objection which it might at any time
have to the courts of England being nominated as the forum to hear and
determine any Proceedings and to settle any Disputes and agrees not to
claim that the courts of England are not a convenient or appropriate
forum.
24.4 Each party agrees that the process by which any Proceedings are begun
in England may be served on any of the Vendor by being delivered to
Company Secretary, Emess plc at ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇ ▇▇▇ and may be served on the Purchaser by being delivered to
the Purchaser's Solicitors. Nothing contained in this clause 24.4 shall
affect the right to serve process in any other manner permitted by law.
24.5 The submission to the jurisdiction of the courts of England shall not
(and shall not be construed so as to) limit the right of the Purchaser
to take Proceedings against the Vendor in any other court of competent
jurisdiction, nor shall the taking of Proceedings by the Purchaser in
any one or more jurisdictions preclude the Purchaser taking Proceedings
in any other jurisdiction (whether concurrently or not) if and to the
extent permitted by applicable law.
25. COUNTERPARTS
This Agreement may be executed in any number of counterparts, each of
which when executed and delivered shall be an original, but all the
counterparts together shall constitute one and the same instrument.
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IN WITNESS WHEREOF this Agreement has been duly entered in to on the day and
year first above written.
SCHEDULES
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇
----------------
SIGNED by ▇▇▇▇▇ ▇▇▇▇▇▇
duly authorised for and on behalf of
EMESS PLC in the presence of:
▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇ ▇▇▇
/s/ ▇▇▇▇ ▇▇▇▇▇
--------------
SIGNED by ▇▇▇▇ ▇▇▇▇▇
duly authorised for and on behalf of
SLI INC in the presence of:
▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇ ▇▇▇
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