EXHIBIT 99.1
DATED 8 February 2005
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▇▇▇▇▇▇ LIMITED (TO BE RE-NAMED ▇▇▇▇ LIMITED)
and
EDITLAND LIMITED (TO BE RE-NAMED ▇▇▇▇▇▇ LIMITED)
and
TORO ▇▇▇▇▇▇ (GUERNSEY) LIMITED
and
THE TORO COMPANY
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AGREEMENT
for the sale and purchase of
the business and undertaking
of ▇▇▇▇▇▇ Limited
(to be re-named ▇▇▇▇ Limited)
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CONTENTS
CLAUSE PAGE
1. Interpretation........................................................1
2. Sale and Purchase of Business.........................................9
3. Consideration........................................................11
4. No warranties........................................................13
5. Completion...........................................................14
6. Post-Completion Obligations..........................................14
7. Cross Accounting.....................................................15
8. Responsibility for Liabilities.......................................15
9. Business Contracts...................................................15
10. Debts and Tax Rebates................................................16
11. Transferring Employees...............................................17
12. Independent Accountants..............................................17
13. Liabilities..........................................................18
14. Announcements........................................................18
15. Value Added Tax......................................................18
16. Wrong Pockets........................................................19
17. Counterparts.........................................................20
18. Further Assurance....................................................20
19. Variation, Waiver and Consent........................................20
20. Entire Agreement.....................................................20
21. Withholding and Grossing-Up..........................................21
22. Notices..............................................................21
23. Costs................................................................22
24. Rights of Third Parties..............................................22
25. Time of the Essence..................................................23
26. Continuing Effect....................................................23
27. Severability.........................................................23
28. Assignment...........................................................23
29. Termination of Seller's obligations..................................24
30. Guarantee............................................................24
31. Governing Law and Submission to Jurisdiction.........................24
DATE: 8 FEBRUARY 2005
PARTIES:
(1) ▇▇▇▇▇▇ LIMITED a company incorporated under the laws of England and
Wales with registered number 425045 and having its registered office
and its principal place of business at Spellbrook, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ (and which proposes changing its name to ▇▇▇▇
Limited) (the "SELLER");
(2) EDITLAND LIMITED a company incorporated under the laws of England and
Wales with registered number 5286686 and having its registered office
at ▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ (and which proposes changing
its name to ▇▇▇▇▇▇ Limited) (the "PURCHASER);
(3) TORO ▇▇▇▇▇▇ (GUERNSEY) LIMITED a company incorporated under the laws
of the States of Guernsey, Channel Islands with registered number
42797 and having its registered office at ▇▇ ▇▇▇ ▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇ 3XH (the "TRADE ▇▇▇▇ PURCHASER" and,
with the Purchaser, the "PURCHASERS"); and
(4) THE TORO COMPANY a company incorporated under the laws of Delaware
having its registered address at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ of America (the "GUARANTOR")
RECITALS:
(A) The Seller carries on the Business.
(B) The Seller has agreed to sell and the Purchaser has agreed to purchase
the Business (other than the ▇▇▇▇▇▇ Marks and Names) as a going
concern on the terms set out in this agreement.
(C) The Seller has agreed to sell and the Trade ▇▇▇▇ Purchaser has agreed
to purchase the ▇▇▇▇▇▇ Marks and Names on the terms set out in this
agreement.
(D) The Guarantor is the holding company of the Purchaser and has become a
party to this agreement for the purpose of entering into the guarantee
set out in clause 30
IT IS AGREED as follows:
1. INTERPRETATION
1.1 Defined terms
In this agreement, the following words and expressions shall have the
following meanings:
"ADVANCE RECEIPTS" means all amounts received (whether by deposit,
pre-payment or otherwise) by or on behalf of the Seller on or before
the Completion Date so far as the same relate to anything (including
any service) to be provided by the Purchaser under any of the Business
Contracts or otherwise in connection with the carrying on of the
Business in the ordinary course after the Completion Date;
"ACCRUED EMPLOYEE COSTS" means the sum of (pound) 142,202 being
accrued and unpaid wages, salaries, emoluments, PAYE payments,
employer National Insurance contributions and all other periodic costs
payable to or for the benefit of the Transferring Employees for the
period from 1 February 2005 (being the date after date to which such
payments were last made to the Transferring Employees) to and
including the Completion Date;
"ASSETS" means the assets to be sold and transferred to the Purchasers
under this agreement as described in clause 2.1;
"ASSUMED LIABILITIES" means, for the purposes of Clause 3.2 and
schedule 9, current liabilities relating to the Business of (pound)
2,899,000 and pension liabilities of (pound) 2,500,000;
"BUSINESS" means such part of the Seller's business comprising the
Assets as relates to the (i) manufacture and supply of pedestrian,
tractor, grass trimmer/brush cutter products designed for consumer
use; (ii) the manufacture and supply of quality grass cutting
machinery for the local authority and golf markets along with the
premium sector of consumer, petrol rotary mower market and as (in each
case) carried on by the Seller at the date of this agreement under the
brand name '▇▇▇▇▇▇' and (iii) the sale of '▇▇▇▇▇▇' - branded parts,
the resale of '▇▇▇▇▇▇' - branded tractors manufactured by ▇▇▇▇▇▇, Inc
and the non-exclusive distribution of '▇▇▇▇▇▇' - branded parts in
Europe carried on by the Seller at the date of this agreement;
"BUSINESS CONTRACTS" means the Customer Contracts, the Distribution
Contracts, the Equipment Contracts, the Intellectual Property
Contracts and the Supplier Contracts and all other contracts and
engagements entered into and orders placed or received on or before
Completion by or on behalf of the Seller in the ordinary course of the
Business and which at Completion remain (in whole or in part) to be
performed (including for the avoidance of doubt any such contracts,
engagements and orders with other members of the Seller's Group and
other divisions of the Seller to the extent that the same are for the
supply and/or distribution of products, components and parts required
to assure the Purchaser of continuity of supply ("ESSENTIAL SUPPORT
CONTRACTS")) but excluding: (1) contracts with employees, (2) the
Financing Contracts, (3) save to the extent incurred pursuant to
Essential Support Contracts, any and all inter-company indebtedness
incurred to other members of the Seller's Group and other divisions of
the Seller whether or not the same were incurred in the course of the
Business and (4) any contracts with members of the Seller's Group
which are not Essential Support Contracts;
"BUSINESS DAY" means a day (excluding Saturday) on which banks
generally are open in the City of London for the transaction of normal
banking business;
"BUSINESS INFORMATION" means all information existing at the
Completion Date and relating to the Business including but not limited
to details of customers, suppliers, distributors and agents, sales
targets, sales statistics, market share statistics, market surveys and
information relating to future business development or planning,
information relating to discounts, commissions and rebates received
and/or paid and litigation or legal advice, in whatever form
(including computer disks or tapes) that information may be recorded
or stored;
"BUSINESS INTELLECTUAL PROPERTY" means all Intellectual Property owned
and used by the Seller at the Completion Date which is used in, or has
been developed for use in, or is required or intended for use in the
Business including but not limited to that listed in schedule 5;
"BUSINESS RECORDS" means all books and records in whatever form
(including computer disks or tapes) containing or relating to Business
Information or on which Business Information is recorded or stored,
including the VAT Records but excluding the Excluded Business Records;
"CA85" means the Companies ▇▇▇ ▇▇▇▇;
"CHAPS" means the clearing houses automated payment system or any
other method of electronic transfer for same-day value;
"COMPLETION" means completion of the sale and purchase of the Business
comprising the Assets in accordance with clause 5;
"COMPLETION DATE" means the date of this agreement;
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"CONFIDENTIAL INFORMATION" means Know How, trade secrets and other
information of a confidential nature (including, without limitation,
all proprietary technical, industrial and commercial information and
techniques in whatever form (including computer disks or tapes) that
information may be recorded or stored);
"CONSIDERATION" means the sum of (pound) 18,770,000, as adjusted in
accordance with this agreement;
"CURRENT ASSETS" means, to the extent purchased under clauses 2.1 and
2.2, stock, the Debts, the Prepayments and other assets (but excluding
(i) cash at bank and in hand, negotiable money orders, cheques and the
benefit of any tax (including Value Added Tax refunds) and (ii)
packaging materials and advertising and promotional materials) in each
case as ascertained or determined in accordance with Relevant
Accounting Standards;
"CURRENT LIABILITIES" means all amounts falling due for payment by the
Purchaser under this agreement in connection with the Business within
one year of Completion, the Advance Receipts and any provisions for
such liabilities and charges which reasonably may fall due for payment
within 12 months of Completion in each case as ascertained or
determined in accordance with Relevant Accounting Standards;
"CUSTOMER CONTRACTS" means all contracts and arrangements entered into
and orders received on or before the Completion Date by or on behalf
of the Seller with customers for the sale or supply of goods or
services by the Seller in connection with the Business which at
Completion remain to be performed in whole or in part including but
not limited to those listed in part 1 of schedule 8;
"DEBTS" means all book and other debts owing to the Seller and other
rights to payment arising from the operation of the Business on or
before the Completion Date (each such debt being a "receivable" and
all such debts together being "receivables") (other than receivables
(i) owing to or arising in favour of the Seller from any member of the
Seller's Group or (ii) receivables relating to or arising from the
Excluded Assets, Tax and Financing Contracts) whether or not then
invoiced and whether or not then due and payable and any interest
payable on such receivables save to the extent that funds representing
the whole or any part of any receivable have been credited to the
Sellers receivables current account (number: ▇▇▇▇▇▇▇▇) at Barclays
Bank plc, Sort Code 20-00-00 at any time on or before 23.59 on the
Completion Date (which funds shall be treated as Excluded Assets);
"DEPOSIT" means the sum of US$2,500,000 deposited by the Purchaser
with the Seller's Solicitors on 24 January 2005;
"DISTRIBUTION CONTRACTS" means all agency, distributorship, franchise
and other like agreements entered into by or on behalf of the Seller
in connection with the Business which at Completion remain to be
performed (in whole or in part) including but not limited to those
listed in part 2 of schedule 8;
"ENCUMBRANCE" means any mortgage, charge, pledge, lien, restriction,
assignment, hypothecation, security interest, title retention or any
other agreement or arrangement the effect of which is the creation of
security, or any other interest, equity or other right of any person
(including any right to acquire, option, right of first refusal or
right of pre-emption), or any agreement or arrangement to create any
of the same, other than in any such case retention of title claims
arising in the ordinary course of business from suppliers of parts and
components;
"EQUIPMENT CONTRACTS" means all contracts and arrangements entered
into and orders placed or received on or before the Completion Date by
or on behalf of the Seller in relation to the leasing, lease purchase,
hire or hire purchase, credit sale, conditional sale or sale by
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instalments of goods or equipment in connection with the Business
which on Completion remain to be performed in whole or in part
including but not limited to those listed in part 3 of schedule 8;
"ESCROW ACCOUNT" means an interest bearing deposit account to be
opened with The Royal Bank of Scotland plc in the joint names of the
Purchaser's Solicitors and the Seller's Solicitors and to be
administered in accordance with the escrow instructions letter in the
agreed terms (the "ESCROW INSTRUCTIONS LETTER");
"ESCROW AMOUNT" means the sum of (pound) 800,000 (eight hundred
thousand pounds), and which shall be held in trust for the Seller and
the Purchaser and which shall be applied in accordance with clause
3.4;
"EXCLUDED ASSETS" means the assets referred to in clause 2.4 which are
excluded from the sale pursuant to this agreement;
"EXCLUDED CLAIMS" means the benefit of any insurance claim made by the
Seller prior to the Completion Date which is then outstanding in
respect of the loss or destruction of or damage to any of the Assets
where such Asset has prior to the Completion Date been restored in all
material respects or replaced at the Seller's expense;
"EXCLUDED BUSINESS RECORDS" means the Seller's statutory books and
accounting records, and all other records which do not relate in any
way to the Business (including those relating to Tax) but not
including the VAT Records;
"EXCLUDED LIABILITIES" means, save as expressly provided in this
agreement, all the liabilities or obligations relating to the Business
and outstanding or accrued or referable to the period on or before the
Completion Date or arising by virtue of the sale and purchase recorded
by this agreement, including but not limited to any and all
liabilities in respect of National Insurance, PAYE, VAT or other Tax
attributable to the Seller in respect of the Business or the
Transferring Employees (except those payments due to Transferring
Employees as provided for in clause 11.3) in respect of the period
ending on Completion and all bank or other overdrafts and loans owing
by the Seller whether due in respect of the Financing Contracts or
otherwise;
"FINANCIAL YEAR" shall be construed in accordance with s223 CA85;
"FINANCING CONTRACTS" means (i) all obligations of the Seller to
General Electric Capital Corporation or to any person for which it is
the parent undertaking and (ii) the bank lending contracts, security
and finance leases listed in schedule 3;
"FOREIGN AFFILIATE SETTLEMENT AGREEMENT" means the settlement
agreement dated 8 February 2005 between Summersong Investment Inc.,
▇▇▇▇▇▇ Europe Limited, ▇▇▇▇▇▇ Limited, ▇▇▇▇▇▇ Holdings Germany GmbH,
▇▇▇▇▇▇ Administration Germany GmbH, ▇▇▇▇▇▇ Germany GmbH & Co. KG,
General Electric Capital Corporation, PBGC, ▇▇▇▇▇▇, Inc. and the
Official committee of Unsecured Creditors of ▇▇▇▇▇▇, Inc.;
"GOODWILL" means the goodwill of the Seller in relation to the
Business including the exclusive right for the Purchasers or either of
them to represent themselves as carrying on the Business in succession
to the Seller;
"▇▇▇▇▇▇ MARKS AND NAMES" means the Trade ▇▇▇▇ referred to in part 1 of
schedule 5 the domain names referred to in part 2 of schedule 5 and
all right and interest of the Seller in the "▇▇▇▇▇▇" name and such
other rights which the Seller has in relation to trade marks, trade
and business names, logos and get up (including any and all goodwill
associated with or attached to any of the same and owned by the Seller
and all rights under the law of passing off
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and laws relating to unfair competition) or other domain names whether
registered, unregistered or registrable (including, where applicable,
all applications for registration) and the right to ▇▇▇ for damages
for past and current infringement in respect of any of the same;
"▇▇▇▇▇▇ PATENTS" means the patents referred to in part 3 of schedule
5;
"INDEPENDENT ACCOUNTANT" means as defined in clause 12;
"INITIAL CONSIDERATION" means the sum of (pound) 17,827,798 (being the
Consideration less the Accrued Employee Costs, less the Escrow
Amount);
"INTELLECTUAL PROPERTY" means (i) the ▇▇▇▇▇▇ Marks and Names, (ii) the
▇▇▇▇▇▇ Patents and (iii) such other rights which the Seller has in and
in relation to Confidential Information, patents, inventions (whether
or not patentable), registered designs, design rights, copyrights
(including, without limitation, rights in software) neighbouring
rights, database rights, semi-conductor topography rights, all rights
of confidence (including in the Know-How) and all rights or forms of
protection having an equivalent or similar nature or effect anywhere
in the world, whether registered, unregistered or registrable
(including, where applicable, all applications for registration) and
the right to ▇▇▇ for damages for past and current infringement in
respect of any of the same;
"INTELLECTUAL PROPERTY CONTRACTS" means all contracts, licences,
authorisations and permissions relating to the use, enjoyment and/or
exploitation by (1) the Seller of any Intellectual Property or
Business Information used in connection with the Business as carried
on at the Completion Date and (2) any third party of any Business
Intellectual Property or Business Information, including but not
limited to those listed in part 4 of schedule 8;
"KNOW HOW" means all unpatented, secret, substantial and identified
know-how, expertise, technical or other information developed,
acquired and owned by the Seller in relation to the Business
including, without limitation, all related ideas, concepts, methods,
inventions, discoveries, data, formulae, processes, methods,
techniques and specifications;
"LAST ACCOUNTS" means the audited financial statements (including
balance sheet and profit and loss account) of the Seller relating to
the Business as at 2 October 2004 in respect of the Financial Year
ended on such date together with all notes, reports (including the
auditors' report) and statements required by law or Relevant
Accounting Standards to be included in or annexed to them;
"LOSSES" includes, in respect of any matter, event or circumstance,
all demands, claims, actions, proceedings, damages, payments, fines,
penalties, losses, costs (including legal costs), expenses (including
taxation), disbursements or other liabilities in any case of any
nature whatsoever;
"PBGC" means the Pensions Benefit Guarantee Corporation;
"PENSIONS DEED" means deed in the agreed form and of even date
herewith between (1) the Trustees of the 'The Hayters Retirement
Benefits Plan', (2) the Seller and (3) the Purchaser whereby the
Purchaser is substituted as principal employer of the plan;
"PENSIONS MOU" means the memorandum of understanding in the agreed
form and of even date herewith between (1) the Trustees of the 'The
Hayters Retirement Benefits Plan', (2) the Seller and (3) the
Purchaser;
"PLANT AND EQUIPMENT" means all plant, machinery, motor vehicles,
office, warehouse and factory furniture, fixtures and fittings and
equipment (including computers) wherever situated owned by the Seller
and used in or in connection with the Business including but not
limited
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to those listed in schedule 6 but excluding for these purposes any
such items which are the subject of Equipment Contracts;
"PREPAYMENTS" means all amounts paid (whether by deposit, prepayment
or otherwise) on or before the Completion Date by or on behalf of the
Seller so far as the same relate to anything (including any service)
to be provided to the Purchaser under any of the Business Contracts or
otherwise in connection with the carrying on of the Business in the
ordinary course after the Completion Date (but excluding, for the
avoidance of doubt, liabilities in respect of Tax);
"PROCEEDINGS" means any proceedings, suit or action arising out of or
in connection with this agreement;
"PROPERTIES" means the freehold properties short particulars of which
are set out in schedule 4;
"PURCHASER'S GROUP" means the group of companies comprising the
Purchaser, any holding company from time to time of the Purchaser and
any subsidiary of the Purchaser or of any such holding company and
"MEMBER OF THE PURCHASER'S GROUP" shall be construed accordingly;
"PURCHASERS' SOLICITORS" means ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ of ▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇;
"RELEVANT ACCOUNTING STANDARDS" means, in relation to (i) the Last
Accounts, any of the following in force on 2 October 2004, and means
in relation to (ii) the determination of the Current Assets, the
Current Liabilities and the Working Capital, any of the following in
force on the Completion Date, namely any applicable Statement of
Standard Accounting Practice, Financial Reporting Standard, Urgent
Issues Task Force Abstract or Statement of Recommended Practice issued
by the UK Accounting Standards Board (or any successor body) or any
committee of it or body recognised by it and to the extent that the
Seller (in relation to the Business) is not required to comply with
any of the foregoing, the relevant accounting standards applicable to
the Seller (in relation to the Business);
"SALES DOCUMENTATION" means all sales publications, advertising and
promotional materials, printed terms and conditions of sale or supply,
business forms, instructional material and other technical and sales
materials which are owned by the Seller on the Completion Date and
relate to the Business;
"SELLER'S GROUP" means the group of companies comprising the Seller,
any holding company from time to time of the Seller and any subsidiary
of the Seller or any such holding company (including but not limited
to the Seller and ▇▇▇▇▇▇, Inc.) and "MEMBER OF THE SELLER'S GROUP"
shall be construed accordingly;
"SELLER'S SOLICITORS" means ▇▇▇▇▇▇▇ ▇▇▇▇ of ▇▇ ▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇;
"SERVICE DOCUMENT" means a document relating to or in connection with
any Proceedings;
"STOCK" means all raw materials, supplies, work in progress, parts and
components, finished goods, packaging materials and advertising and
promotional materials held, used or owned by the Seller in connection
with the Business at the Completion Date;
"SUPPLIER CONTRACTS" means all contracts and arrangements entered into
and orders placed with suppliers on or before the Completion Date by
or on behalf of the Seller for the sale or supply of goods or services
to the Seller in connection with the Business which at Completion
remain to be performed in whole or in part including but not limited
to those listed in part 5 of schedule 8 but excluding all and any
contracts, arrangements or orders for the supply of legal,
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tax, accounting, valuation, appraisal and/or corporate advisory and
other professional services;
"TARGET WORKING CAPITAL" means (pound) 10,903,000 (ten million nine
hundred and three thousand pounds);
"TAX" includes (without limitation) all taxes (including value added
tax), duties, levies, imposts, withholdings, social security
contributions, deductions or amounts in the nature of taxation,
whenever and by whatever authority imposed and whether of the United
Kingdom or elsewhere, irrespective of the person against or to which
any such taxes, duties, levies, imposts, withholdings, social security
contributions, deductions or amounts in the nature thereof are
directly or primarily chargeable, together with all interest, fines,
penalties and surcharges imposed pursuant to any legislation relating
to taxation and which are incidental or relating thereto;
"TAXES ACT" means the Income and Corporation Taxes ▇▇▇ ▇▇▇▇;
"TAX AUTHORITY" means any person, body, authority or institution which
seeks to impose, assess, enforce, administer or collect any Tax
whether in the United Kingdom or elsewhere;
"THIRD PARTY RIGHTS" means the benefit of all rights and claims (other
than claims relating to Tax) of the Seller arising on or before the
Completion Date out of or in connection with the Business, including
but not limited to:
(1) all claims against, or rights to make any claims against, any
third party in respect of any goods or services sold or supplied
to the Seller in connection with the Business on or before the
Completion Date where the goods or the subject matter of the
services form part of the Business;
(2) all claims against, or rights to make any claims against,
insurers or other third parties in respect of loss of or damage
or injury caused to the Business to the extent that such loss,
damage or injury has not been made good by and at the cost of the
Seller on or before the Completion Date;
(3) all claims made by the Seller for a loan, grant or other aid in
respect of any of the Assets;
(4) all rights of the Seller in respect of goods supplied by the
Seller in the course of the Business on terms as to retention of
title and to which the Seller retains title at the Completion
Date; and
(5) all the Seller's rights (to the extent that they are assignable)
under any agreement under which the Seller acquired any of the
Assets;
"TRANSACTION DOCUMENTS" means this agreement, the Pensions Deed and
the Pensions MOU;
"TRANSFERRING EMPLOYEES" means those employees of the Seller who are
employed in the Business and whose employment is to be transferred to
the Purchaser, a list of whom appears in schedule 7;
"VAT" means value added tax as defined in VATA;
"VATA" means the Value Added Tax ▇▇▇ ▇▇▇▇;
"VAT RECORDS" means the records required to be kept for VAT purposes
by paragraph 6 of Schedule 11 to VATA in relation to the Business; and
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"WORKING CAPITAL" means the total value of the Current Assets less the
total value of the Current Liabilities as at the Completion Date
agreed or determined in accordance with clause 3.
1.2 Statutory provisions
All references to statutes, statutory provisions, enactments, EU
Directives or EU Regulations shall include references to any
consolidation, re-enactment, modification or replacement of the same,
any statute, statutory provision, enactment, EU Directive or EU
Regulation of which it is a consolidation, re-enactment, modification
or replacement and any subordinate legislation in force under any of
the same from time to time except to the extent that any
consolidation, re-enactment, modification or replacement enacted after
the date of this agreement would extend or increase the liability of
either party to the other under this agreement.
1.3 Holding company and subsidiary
A company or other entity shall be a "HOLDING COMPANY" for the
purposes of this agreement if it falls within either the meaning
attributed to that term in ss736 and 736A CA85 or the meaning
attributed to the term "PARENT UNDERTAKING" in s258 CA85, and a
company or other entity shall be a "SUBSIDIARY" for the purposes of
this agreement if it falls within either the meaning attributed to
that term in ss736 and 736A CA85 or the meaning attributed to the term
"SUBSIDIARY UNDERTAKING" in s258 CA85, and the terms "SUBSIDIARIES"
and "HOLDING COMPANIES" are to be construed accordingly.
1.4 Agreed form
Any reference to a document in the "AGREED FORM" is to the form of the
relevant document in the terms agreed between the Seller and the
Purchaser prior to the execution of this agreement and signed or
initialled for identification purposes only by or on behalf of the
Seller and the Purchaser (in each case with such amendments as may be
agreed by or on behalf of the Seller and the Purchaser).
1.5 Recitals, schedules, etc.
References to this agreement include the recitals and schedules which
form part of this agreement for all purposes. References in this
agreement to the parties, the recitals, schedules and clauses are
references respectively to the parties and their legal personal
representatives, successors and permitted assigns, the recitals and
schedules to and clauses of this agreement.
1.6 Meaning of references
Save where specifically required or indicated otherwise:
(a) words importing one gender shall be treated as importing any
gender, words importing individuals shall be treated as importing
corporations and vice versa, words importing the singular shall
be treated as importing the plural and vice versa, and words
importing the whole shall be treated as including a reference to
any part thereof;
(b) references to a person shall include any individual, firm, body
corporate, unincorporated association, government, state or
agency of state, association, joint venture or partnership, in
each case whether or not having a separate legal personality.
References to a company shall be construed so as to include any
company, corporation or other body corporate wherever and however
incorporated or established;
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(c) references to the word "INCLUDE" or "INCLUDING" (or any similar
term) are not to be construed as implying any limitation and
general words introduced by the word "OTHER" (or any similar
term) shall not be given a restrictive meaning by reason of the
fact that they are preceded by words indicating a particular
class of acts, matters or things;
(d) references to any English statutory provision or legal term for
any action, remedy, method of judicial proceeding, legal
document, legal status, court, official or other legal concept,
state of affairs or thing shall in respect of any jurisdiction
other than England be deemed to include that which most nearly
approximates in that jurisdiction to the English statutory
provision or legal term or other legal concept, state of affairs
or thing;
(e) any reference to "WRITING" or "WRITTEN" includes any method of
reproducing words or text in a legible and non-transitory form
but, for the avoidance of doubt, shall not include e-mail;
(f) references to "INDEMNIFY" and to "INDEMNIFYING" any person
against any Losses by reference to any matter, event or
circumstance includes indemnifying and keeping that person
indemnified against all Losses from time to time made, suffered
or incurred as a direct or indirect consequence of or which would
not have arisen but for that matter, event or circumstance;
(g) references to "STERLING" or "(POUND)" or "POUNDS" are to the
lawful currency of the United Kingdom as at the date of this
agreement; references to "DOLLAR" or "$" are to the lawful
currency of the United States of America; References to "EURO" or
"(EURO)" are to the single currency of the European Union
constituted by the Treaty on European Union; and
(h) references to times of the day are to that time in London and
references to a day are to a period of 24 hours running from
midnight to midnight.
1.7 Headings
Clause and paragraph headings and the table of contents are inserted
for ease of reference only and shall not affect construction.
1.8 Connected persons
Section 839 Taxes Act is to apply to determine whether one person is
connected with another for the purposes of this agreement.
2. SALE AND PURCHASE OF BUSINESS
2.1 Sale and purchase of Business (excluding the ▇▇▇▇▇▇ Marks and Names)
The Seller shall sell and the Purchaser (relying on the obligations of
the Seller under this agreement) shall purchase with effect from the
Completion Date the entire legal and beneficial ownership in the
Business (excluding the ▇▇▇▇▇▇ Marks and Names) as a going concern
comprising the following assets free from all Encumbrances:
(a) subject to clause 9, the benefit (subject to the burden) of the
Business Contracts;
(b) the Business Information;
(c) the Business Intellectual Property (except for the ▇▇▇▇▇▇ Marks
and Names);
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(d) the Business Records;
(e) the Debts (other than any right of the Seller to reclaim VAT);
(f) the Goodwill;
(g) the Plant and Equipment;
(h) the Properties;
(i) the Sales Documentation;
(j) the Stock;
(k) the Third Party Rights;
(l) any rights or claims of the Seller against any customers of the
business in respect of any product sold or service supplied by
the Seller prior to the Completion Date in the ordinary course of
the Business;
(m) packaging materials and advertising and promotional materials;
(n) any loans made by the Seller to Transferring Employees; and
(o) all other rights and assets used in the Business as at the
Completion Date but not including the ▇▇▇▇▇▇ Marks and Names or
the Excluded Assets.
2.2 Sale and Purchase of the ▇▇▇▇▇▇ Marks and Names
The Seller shall sell and the Trade ▇▇▇▇ Purchaser (relying on the
obligations of the Seller under this agreement) shall purchase with
effect from the Completion Date the entire legal and beneficial
ownership in the ▇▇▇▇▇▇ Marks and Names.
2.3 Power to sell and transfer
The Seller covenants with the Purchasers that it has full power and
the right to sell and transfer the legal and beneficial title in the
Business as a going concern on the terms set out in this agreement
save that certain of the Assets may be subject to retention of title
claims arising in the ordinary course of business from suppliers of
parts and components in which case such parts and components are only
sold with such title, right and interest that the Seller may have.
2.4 Assets excluded from Sale
There shall be excluded from the sale and purchase under this
agreement (and accordingly nothing in this agreement shall operate to
transfer from the Seller) the following assets:
(a) the Excluded Business Records;
(b) the Excluded Claims;
(c) any cash in hand or at bank of the Seller (and, in the case of
cash at bank, the balance of the Seller's bank account(s) as at
11.59 p.m. on the Completion Date) negotiable money orders and
cheques;
(d) any right of the Seller to repayment of any Tax relating to the
Business attributable to periods or transactions completed before
the Completion Date;
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(e) such interests as the Seller may have in any subsidiary or any
company or other person;
(f) (for the avoidance of doubt) any amount owing to or arising in
favour of the Seller from any member of the Seller's Group; and
(g) any assets owned by a subsidiary of the Seller.
2.5 Properties
The Properties shall be sold on the additional terms and conditions
set out in schedule 4.
2.6 Debts
The Debts are sold to the Purchaser by way of absolute assignment and
the Seller hereby assigns the Debts to the Purchaser absolutely.
2.7 Sale of all the Assets
The Purchasers shall not be obliged to complete the purchase of the
Business unless the sale of all the Assets is completed simultaneously
in accordance with this agreement.
3. CONSIDERATION
3.1 Total price
The total price for the Business to be paid by the Purchasers to the
Seller is the Consideration which shall be subject to adjustment as
set out in this agreement.
3.2 Allocation of Consideration
The aggregate amount of the Consideration and the Assumed Liabilities
shall, subject to any difference between the Target Working Capital
and the Final Working Capital and clause 3.5, be allocated between the
Assets as specified in schedule 9 and such allocation shall be adopted
by the parties for Tax purposes.
3.3 Working Capital Adjustment
(a) As promptly as practicable, but no later than ninety (90)
calendar days after the Completion Date, the Purchaser will
prepare and deliver to the Seller a good faith calculation of
Working Capital as of the close of business on the Completion
Date (the "COMPLETION DATE WORKING CAPITAL STATEMENT"). For the
purposes of the Working Capital Purchase Price Adjustments (as
defined below), such Completion Date Working Capital Statement
shall be determined as of the close of business on the Completion
Date in accordance with Relevant Accounting Standards.
(b) Within ten (10) Business Days after receipt of the Completion
Date Working Capital Statement, the Seller may deliver to the
Purchaser, a written statement describing their questions or
objections (if any) to the Completion Date Working Capital
Statement. If the Seller does not raise any questions or
objections within such period, the Purchaser's good faith
estimate of the Working Capital as of the Completion Date as set
forth in the Completion Date Working Capital Statement will
become final and binding upon all of the parties. If the Seller
does raise any such questions or objections, the Purchaser and
the Seller and their respective accountants, counsel and advisers
shall attempt to resolve such matters within ten (10) Business
Days after receipt of the same by the Purchaser.
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(c) In the event that the Seller and the Purchaser are unable to
reach agreement within ten (10) Business Days after receipt of
the same by the Purchaser, either the Seller or the Purchaser
shall be entitled to refer the matter(s) in dispute to the
Independent Accountant. The Independent Accountant shall act as
expert and not as arbitrator and his determination of the
matter(s) in dispute shall be final and binding (save in the case
of manifest error).
(d) The Purchaser will make available to the Seller and their
accountants and other representatives the working papers and
back-up materials used in preparing the Completion Date Working
Capital Statement (and copies thereof at the Purchaser's sole
cost and expense), at any time during (i) the review by the
Seller of the Completion Date Working Capital Statement under
this clause and (ii) the pendency of any dispute under this
clause.
(e) For purposes of this agreement, "FINAL WORKING CAPITAL" means
Working Capital as of the Completion Date (i) as shown in the
Purchaser's calculation in the Completion Date Working Capital
Statement delivered pursuant to sub-clause (a) above if no notice
of disagreement with respect thereto is duly delivered pursuant
to sub-clause (b) above; or (ii) if such a notice of disagreement
is delivered, (A) as agreed by the Purchaser and the Seller
pursuant to sub-clause (b) above or (B) in the absence of such
agreement, as shown in the Independent Accountant's calculation
delivered pursuant to sub-clause (c) above.
(f) The Seller and the Purchaser will each pay their own fees and
expenses (including without limitation any fees and expenses of
their accountants, counsel and other representatives) in
connection with the determination of Working Capital Purchase
Price Adjustments.
3.4 Price Adjustment
(a) Any adjustment to the Consideration pursuant to this clause 3.4
is referred to in this agreement as the "WORKING CAPITAL PURCHASE
PRICE ADJUSTMENT".
(b) If the Final Working Capital equals but does not exceed the
Target Working Capital, then within three (3) Business Days of
the final determination of such amount pursuant to this clause 3,
the Purchaser and the Seller shall deliver a joint written notice
to their respective solicitors instructing their respective
solicitors to pay the amount remaining on deposit in the Escrow
Account plus the accrued interest on such amount (by electronic
funds transfer of immediately available funds) to the Seller. In
the event of the Purchaser failing to cooperate in the delivery
of such a joint written notice, the Seller may deliver a
certified copy of the Independent Accountant's calculation
delivered pursuant to sub-clause 3.3(c) above and, in the event
of the same showing or purporting to show that that the Final
Working Capital equals but does not exceed the Target Working
Capital, the Seller and the Purchaser hereby irrevocably instruct
their respective solicitors to act as if they had received a
joint written notice as aforesaid.
(c) If the Final Working Capital exceeds the Target Working Capital,
then within three (3) Business Days of the final determination of
the Final Working Capital pursuant to clause 3.3, the Purchaser
shall pay to the Seller the Escrow Amount plus the lesser of (i)
the amount of such excess and (ii) (pound) 800,000 and
accordingly within three (3) Business Days of the final
determination of the Final Working Capital pursuant to clause
3.3:
(i) the Purchaser and the Seller shall deliver a joint written
notice to their respective Solicitors to pay the Escrow
Amount plus the accrued interest on
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such amount (by electronic funds transfer of immediately
available funds) to the Seller;
(ii) the Purchaser shall pay to the Seller (by electronic funds
transfer of immediately available funds) the lesser of (i)
the amount of such excess and (ii) (pound) 800,000; and
(iii)in the event of the Purchaser failing to cooperate in the
delivery of such a joint written notice, the Seller may
deliver a certified copy of the Independent Accountant's
calculation delivered pursuant to sub-clause 3.3(c) above
and, in the event of the same showing or purporting to show
that that the Final Working Capital equals but does not
exceed the Target Working Capital, the Seller and the
Purchaser hereby irrevocably instruct their respective
solicitors to act as if they had received a joint written
notice as aforesaid.
(d) If Final Working Capital is less than Target Working Capital,
then within three (3) Business Days of the final determination of
such amount pursuant to clause 3.3, the Seller and the Purchaser
shall deliver a joint written notice to their respective
solicitors instructing their respective solicitors to pay such
deficit amount plus the accrued interest thereon out of the
Escrow Account (by electronic funds transfer of immediately
available funds) to the Purchaser provided that the Escrow
Account shall be the sole source of payment for any such
deficiency and in no event shall the Seller be otherwise liable
for any such deficiency. To the extent any amounts remain on
deposit in the Escrow Account after payment of any such deficit,
the Purchaser and the Seller shall deliver a written notice to
their respective solicitors instructing their respective
solicitors to pay any such amount remaining on deposit in the
Escrow Account plus accrued interest on such amount (by
electronic funds transfer of immediately available funds) to
Seller. In the event of the Seller failing to cooperate in the
delivery of such a joint written notice, the Purchaser and/or the
Seller may deliver a certified copy of the Independent
Accountant's calculation delivered pursuant to sub-clause 3.3(c)
above and, in the event of the same showing or purporting to show
that that the Final Working Capital is less than the Target
Working Capital, the Seller and the Purchaser hereby irrevocably
instruct their respective solicitors to act as if they had
received a joint written notice as aforesaid.
3.5 Any increase under clause 3.4(c) shall be deemed to be pro tanto an
increase in the price paid for the Assets under this agreement and any
reduction under clause 3.4(d) shall be deemed to be pro tanto a
reduction in the price paid for the Assets under this agreement (such
that, for the avoidance of doubt, if the increase or reduction in the
price paid is made as a result of the value attributed to a particular
Asset or Assets being different from the value attributed under this
agreement then such adjustment in the price paid shall be allocated to
or taken from such Asset or Assets accordingly).
4. NO WARRANTIES
4.1 Any information supplied by or on behalf of Seller in connection with
the preparation and negotiation of this agreement or in respect to the
business or affairs of the Seller shall not constitute a
representation or warranty as to its accuracy and the Purchaser shall
have no remedy in respect of any statement, representation, warranty
or understanding (whether innocently or otherwise) of any person
(whether party to this agreement or not) whether set out in this
agreement or otherwise. Without prejudice to the generality of the
foregoing, all representations (whether made innocently, negligently
or otherwise), warranties, terms, conditions or guarantees (whether
express or implied, statutory or otherwise (including without
limitation terms implied by the Sale of Goods Act 1979)) relating to
any Asset sold to the Purchasers pursuant to this agreement or which
is made available to the Purchasers by the
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Seller at or following Completion are excluded to the greatest extent
permitted by law. Nothing in this clause shall, however, operate to
limit or exclude any liability for fraud.
5. COMPLETION
5.1 Timing
Completion shall take place on the Completion Date immediately after
execution of this agreement such that it shall have economic effect
from the close of business on the Completion Date.
5.2 Location
Completion shall take place at the offices of the Seller's Solicitors
when all (but not some only) of the events detailed in this clause 5
shall occur.
5.3 Seller's obligations at Completion
At Completion, the Seller shall (subject to and conditional upon the
Purchasers complying with their obligations under clause 5.4) do or
deliver (or cause to be delivered) to the Purchaser the matters or
items listed in part 1 of schedule 1.
5.4 Purchasers' obligations at Completion
At Completion, and subject to the Seller complying with its
obligations under clause 5.3, the Purchasers shall:
(a) pay or cause to be paid the Initial Consideration to the Seller
or as directed by the Seller;
(b) pay or cause to be paid the Escrow Amount into the Escrow
Account; and
(c) do or deliver (or cause to be delivered) to the Seller the
matters or items listed in part 2 of schedule 1.
5.5 Receipt of funds
The Seller hereby confirms that Sidley ▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇ are
irrevocably authorised by the Seller to receive payment of the Initial
Consideration on the Seller's behalf and the receipt by Sidley ▇▇▇▇▇▇
▇▇▇▇▇ & ▇▇▇▇ shall be an absolute discharge for the Purchaser who
shall not be concerned to see to the application thereof or be
answerable for the loss or misapplication of such sum.
5.6 Risk and ownership of Assets
Risk in and ownership of the Assets shall pass to the Purchasers on
Completion.
6. POST-COMPLETION OBLIGATIONS
6.1 Obligations of the Seller
The Seller undertakes to the Purchasers to procure the performance and
observance of those matters listed in part 1 of schedule 2.
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6.2 Obligations of the Purchasers
The Purchasers undertake to the Seller to procure the performance and
observance of those matters listed in part 2 of schedule 2.
7. CROSS ACCOUNTING
To the extent that any payment is made:
(a) to the Seller in respect of the Business Contracts after the
Completion Date, the Seller shall receive the same as trustee for
the Purchaser, shall record such payment separately in its books
and shall account to the Purchaser for the same within 10
Business Days of receipt; and
(b) to the Purchaser in respect of any Excluded Asset after the
Completion Date, the Purchaser shall receive the same as trustee
for the Seller, shall record such payment separately in its books
and shall account to the Seller for the same within 10 Business
Days of receipt.
8. RESPONSIBILITY FOR LIABILITIES
8.1 Nothing in this agreement shall pass to the Purchasers or either of
them, or be construed as an acceptance by the Purchasers or either of
them of, any liability or obligation (of whatsoever nature and
howsoever arising) which is not expressly assumed by the Purchasers or
either of them under this agreement (including, without limitation,
the Excluded Liabilities).
8.2 Save in respect of any liabilities which are expressly assumed by the
Purchaser under this agreement, the Seller shall be responsible for
all Losses arising from the carrying on of the Business which relate
to or arise from the period on or before the Completion Date,
including but not limited to all Tax liabilities of the Seller.
8.3 The Seller agrees with the Purchasers that it will, in accordance with
its normal practice, pay, satisfy or discharge all debts, liabilities
and obligations relating in any way to the Business prior to
Completion and which are not expressly assumed by the Purchaser
hereunder.
8.4 The Purchaser agrees with the Seller that it will, in accordance with
its normal business practice, pay, satisfy or discharge all warranty
claims by customers for defects in products or parts of products
manufactured by the Seller.
9. BUSINESS CONTRACTS
9.1 Responsibility for Business Contracts
The Purchaser shall be responsible for and shall pay and discharge all
liabilities and obligations of the Seller arising under the Business
Contracts
9.2 Assignment of Business Contracts
This agreement shall constitute an assignment to the Purchaser of the
benefit of all the Business Contracts (except for those, if any, which
relate to the ▇▇▇▇▇▇ Marks and Names) and an assignment to the Trade
▇▇▇▇ Purchaser of the benefit of all the Business Contracts, if any,
which relate to the ▇▇▇▇▇▇ Marks and Names, in each case which are
capable of assignment without the consent of any third party and in
each case with effect from Completion.
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9.3 Performance and enjoyment of Business Contracts until necessary
consent obtained
Insofar as any of the Business Contracts cannot effectively be
assigned or transferred by the Seller to the Purchasers except by an
agreement of novation or without obtaining any consent, approval,
waiver or the like from a third party ("CONSENTS"), this agreement
shall not constitute an assignment or attempted assignment if such
assignment or attempted assignment would constitute a breach of such
Business Contract. In the event that any agreement of novation or
Consent is required:
(a) (subject to the Purchaser meeting the Seller's reasonable costs)
the Seller shall at the relevant Purchaser's request take all
reasonable steps to procure that such Business Contracts are
novated or the necessary Consents obtained and the relevant
Purchaser shall co-operate with the Seller for such purpose
(including the entering into of such assignment or novation on
terms reasonably acceptable to the Seller as may be necessary);
(b) (subject to the Purchaser meeting the Seller's reasonable costs)
unless and until any such Business Contract is so novated or any
necessary Consent is obtained, the Seller shall from Completion
hold such Business Contract on trust for the relevant Purchaser
and its successors in title absolutely and the relevant Purchaser
shall from Completion (if such sub-contracting is permissible and
lawful under the Business Contract in question), as the Seller's
sub-contractor, perform all the obligations of the Seller under
such Business Contract and the relevant Purchaser shall from
Completion (at that Purchaser's cost) use its reasonable
endeavours (having regard to the fact that the Seller will have
little or no resources to provide such assistance) to assist the
Seller to perform all the obligations of the Seller under such
Business Contract; and
(c) unless and until any such Business Contract is so novated or any
necessary Consent is obtained, the Seller shall (so far as it
lawfully may) give all such assistance to the relevant Purchaser
as the relevant Purchaser may reasonably require (having regard
to the fact that the Seller will have little or no resources to
provide such assistance) to enable the relevant Purchaser to
enforce its rights under such Business Contract and (without
limitation) will provide access to all relevant books, documents
and other information which remain in the possession of the
Seller following Completion in relation to such Business Contract
as the relevant Purchaser may reasonably require from time to
time.
9.4 Cut-off date
If any Business Contract to which the provisions of clause 9.2 apply
is not novated or any necessary Consent is refused or otherwise not
obtained on terms reasonably satisfactory to the relevant Purchaser
within 60 Business Days of the Completion Date and the procedure set
out in clause 9.3 does not enable the full benefit of that Business
Contract to be enjoyed by the relevant Purchaser as from the
Completion Date, the parties shall use reasonable endeavours to
achieve an alternative solution pursuant to which the relevant
Purchaser shall both receive the full benefits of that Business
Contract and assume associated obligations. If no such alternative
solution has been agreed between the parties within 6 months after the
Completion Date the relevant Purchaser shall be entitled within 6
months after the Completion Date and at its sole discretion to require
that the Seller serves proper notice to terminate that Business
Contract and such termination will be at the cost of the relevant
Purchaser.
10. DEBTS AND TAX REBATES
10.1 To the extent that any payment is made to the Seller in respect of the
Debts after the Completion Date, the Seller shall receive the same as
trustee for the Purchaser, shall record
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such payment separately in its books and shall account to the
Purchaser for the same within 10 Business Days of receipt.
10.2 To the extent that any payment is made to the Purchaser in respect of
Tax rebates due to the Seller after the Completion Date, the Purchaser
shall receive the same as trustee for the Seller, shall record such
payment separately in its books and shall account to the Seller for
the same within 10 Business Days of receipt.
11. TRANSFERRING EMPLOYEES
11.1 The provisions of part 2 of schedule 7 shall have effect.
11.2 The Purchaser shall be substituted as principal employer of the
Hayters Retirement Benefit Plan with effect from the Completion Date
in accordance with Clause 12 of the Consolidated Trust Deed dated 15
June 1998 and subject to Inland Revenue approval. The Seller shall
co-operate with the Purchaser to obtain such approval.
11.3 It is agreed that the Purchaser shall be responsible for:
(a) paying the salaries, wages, emoluments, PAYE payments, employer
National Insurance contributions and other periodical costs
payable to or for the benefit of the Transferring Employees for
the period from 1 February 2005 (being the date following the
date to which such payments were last made to the Transferring
Employees) to and including the Completion Date and that, by way
of reimbursement by the Seller to the Purchaser of all such
costs, the Accrued Employee Costs shall be deducted from the
Consideration; and
(b) paying to the relevant Transferring Employees the aggregate sum
of (pound) 45,160 in respect of employee bonuses awarded in
respect of the financial year of the Seller ending on 2 October
2004.
12. INDEPENDENT ACCOUNTANTS
If any difference of opinion arises between the parties or their
respective accountants in relation to any provision of this agreement
in respect of which a party is expressed to have the right to refer
such matter for determination pursuant to this clause 12, subject to
any time period referred to in the relevant provision during which the
parties must seek to resolve the dispute before referring it to an
independent firm having expired, either party may refer the matter to
an independent firm of accountants for resolution as follows:
12.1 the independent firm shall be jointly agreed by the parties or, if no
agreement is reached within 10 Business Days after either party
notifies the other that it wishes to appoint a firm under this clause,
shall be appointed at the request of either party by the President for
the time being of the Institute of Chartered Accountants in England
and Wales;
12.2 the independent firm shall be requested to resolve the matter in
dispute applying the terms of this agreement and shall act as expert
and not as arbitrator;
12.3 the determination of the independent firm shall be final and binding
on the parties in the absence of manifest error;
12.4 the independent firm shall give the parties the opportunity of making
written representations to him;
12.5 the costs of the independent firm shall be shared by the Purchaser and
the Seller equally unless the independent firm decides otherwise.
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13. LIABILITIES
Except as specifically provided in this agreement, the Seller will not
be liable for any act or omission in relation to the Business
occurring after Completion.
14. ANNOUNCEMENTS
14.1 Prior approval of announcements
Subject to the provisions of clause 14.2, no disclosure or
announcement relating to the existence or subject matter of this
agreement shall be made or issued by or on behalf of the Seller or the
Purchaser or any member of the Seller's Group or any member of the
Purchaser's Group without the prior written approval of the other
party (which approval may be subject to reasonable conditions but
shall otherwise not be unreasonably withheld or delayed) provided that
these restrictions shall not apply to any disclosure or announcement
if required by any law, applicable securities exchange, supervisory,
regulatory or governmental body.
14.2 Notices to customers etc.
Nothing in this agreement will prohibit the Purchaser from making or
sending after Completion any announcement to a customer, client or
supplier of the Business informing it that the Purchaser has purchased
the Business.
14.3 Consultation
The party making the communication shall use its reasonable endeavours
to consult with the other party in advance as to the form, content and
timing of the communication.
15. VALUE ADDED TAX
15.1 The Consideration is exclusive of any VAT chargeable thereon.
15.2 References in this clause 15 to "SECTIONS" and "SCHEDULES" are to
Sections of and Schedules to VATA.
15.3 The Purchaser warrants to the Seller that the Purchaser will as a
result of Completion immediately become a taxable person within the
meaning of Section 3.
15.4 The Seller and the Purchaser agree that the sale of assets described
in this agreement constitutes the transfer of a business as a going
concern, and shall use all reasonable endeavours to procure that the
provisions of Section 49 and article 5 of the Value Added Tax (Special
Provisions) Order 1995 (SI/1995/1268) (the "ORDER") apply to the sale
and purchase of the Assets under this agreement such that the sale of
the Assets falls to be treated as neither a supply of goods nor a
supply of services for VAT purposes and that no VAT shall be
chargeable in respect thereof.
15.5 If, not withstanding clause 15.4, HM Customs and Excise determine in
writing that VAT is chargeable in respect of the sale of any of the
Assets under this agreement, the Seller shall forthwith provide to the
Purchaser a copy of such written determination, together with a valid
VAT invoice or invoices complete in all respects in relation to any
VAT chargeable addressed to the relevant Purchaser. The VAT so
chargeable shall be paid by the relevant Purchaser to the Seller on
the later of two Business Days after the receipt by the relevant
Purchaser of credit or repayment from HM Customs and Excise in respect
of such VAT and two Business Days prior to the date on which the
Seller is liable to account for the same to HM Customs & Excise.
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15.6 The Seller warrants to the Purchasers that the sale of the Properties
under this agreement does not involve any grant within paragraph 2 of
article 5 of the Order.
16. WRONG POCKETS
16.1 Purchaser to transfer assets
If the legal title to or the beneficial interest in any asset which is
not used in the Business is transferred to or vested in either of the
Purchasers with the Assets at Completion, the relevant Purchaser shall
be deemed to hold the asset (the "REQUIRED ASSET(S)") in trust and as
bailee for the Seller and the relevant Purchaser shall, at the
Seller's request, as soon as practicable and on terms that no
consideration is provided by any person for such transfer:
(a) execute all such deeds or documents as may be necessary for the
purpose of transferring (free of any Encumbrance created after
Completion) the relevant interest in such Required Asset(s) to
the Seller or as it may direct; and
(b) do or procure to be done all such further reasonable acts or
things and procure the execution of all such other documents as
the Seller may reasonably request for the purpose of vesting the
relevant interest in such Required Asset(s) in the Seller.
16.2 Purchasers' obligations to notify
The relevant Purchaser shall notify the Seller forthwith upon it
coming to its attention that there are any Required Asset(s) in its
possession or control.
16.3 Seller to transfer assets
If the legal title to or the beneficial interest in any asset which is
used in the Business remains vested in the Seller after Completion,
the Seller shall be deemed to hold the asset (the "MISSING ASSET(S)")
in trust and as bailee for the relevant Purchaser, and the Seller
shall, at the relevant Purchaser's request, as soon as practicable and
on terms that no consideration is provided by any person for such
transfer:
(a) execute all such deeds or documents as may be necessary for the
purpose of transferring (free of any Encumbrance created after
Completion) the relevant interest in the Missing Asset(s) to the
relevant Purchaser or as it may direct; and
(b) do or procure to be done all such further reasonable acts or
things and procure the execution of all such other documents as
the relevant Purchaser may reasonably request for the purpose of
vesting the relevant interest in the Missing Asset(s) in the
relevant Purchaser or as the relevant Purchaser may direct.
16.4 Seller's obligation to notify
The Seller shall notify the Purchasers forthwith upon it coming to its
attention that there are any Missing Assets in its possession or
control.
16.5 Seller to account for Debts
If any Debts are paid to the Seller after Completion, the Seller shall
be deemed to hold such funds (the "Trust Moneys") in trust for the
Purchaser and the Seller shall as soon as practicable and to the
extent that it is able pay or procure the payment of the Trust Moneys
to the Purchaser or as the Purchaser may direct.
16.6 Seller's obligation to notify
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The Seller shall notify the Purchaser forthwith upon it coming to its
attention that any Trust Moneys have come into its possession or
control.
17. COUNTERPARTS
This agreement may be executed in any number of counterparts and by
the parties to it on separate counterparts and each such counterpart
shall constitute an original of this agreement but all of which
together constitute one and the same instrument. This agreement shall
not be effective until each party has executed at least one
counterpart.
18. FURTHER ASSURANCE
The Seller agrees (subject to the relevant Purchaser meeting the
Seller's reasonable cost) and for a period of 6 months following
Completion to perform (or procure the performance of) all further acts
and things, and execute and deliver (or procure the execution and
delivery of) such further documents, as may be required by law or as
the relevant Purchaser may reasonably require, whether on or after
Completion, to implement and/or give effect to this agreement and the
transaction contemplated by this agreement and for the purpose of
vesting in the relevant Purchaser the full benefit of the assets,
rights and benefits to be transferred to the relevant Purchaser under
or pursuant to this agreement including, without limitation, the legal
and beneficial ownership of the Assets.
19. VARIATION, WAIVER AND CONSENT
19.1 No variation or waiver of any provision or condition of this agreement
shall be effective unless it is in writing and signed by or on behalf
of each of the parties (or, in the case of a waiver, by or on behalf
of the party waiving compliance).
19.2 Unless expressly agreed, no variation or waiver of any provision or
condition of this agreement shall constitute a general variation or
waiver of any provision or condition of this agreement, nor shall it
affect any rights, obligations or liabilities under or pursuant to
this agreement which have already accrued up to the date of variation
or waiver, and the rights and obligations of the parties under or
pursuant to this agreement shall remain in full force and effect,
except and only to the extent that they are so varied or waived.
19.3 Any consent granted under this agreement shall be effective only if
given in writing and signed by the consenting party and then only in
the instance and for the purpose for which it was given.
20. ENTIRE AGREEMENT
20.1 Entire agreement
The Transaction Documents together represent the whole and only
agreement between the parties in relation to the sale and purchase of
the Business and supersede any previous agreement (whether written or
oral) between the parties in relation to the subject matter of any
such document save that nothing in this agreement shall exclude any
liability for, or remedy in respect of, fraudulent misrepresentation.
Each of the parties acknowledges and agrees that, in entering into
this agreement and the documents referred to in it, it does not rely
on, and shall have no remedy in respect of, any statement,
representation, warranty or understanding (whether negligently or
innocently made) of any person (whether party to this agreement or
not) other than as expressly set out in this agreement. The only
remedy available to the Purchaser for breach of this agreement shall
be for breach of contract under the terms of this agreement. Nothing
in this Clause shall, however, operate to limit or exclude any
liability for fraud.
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20.2 The Seller confirms that it has prepared schedule 6 in good faith
although it is acknowledged by the Purchaser that the Seller has not
carried out a pre-Completion audit of the assets listed therein.
Accordingly, the Seller shall have no liability to the Purchaser to
the extent that any non-material assets, not amounting in aggregate to
a material amount of assets, listed in schedule 6 are no longer owned
by the Purchaser.
21. WITHHOLDING AND GROSSING-UP
21.1 The Seller shall pay all sums payable by it under this agreement free
and clear of all deductions or withholdings unless the law requires a
deduction or withholding to be made. Otherwise than in relation to a
payment of interest, if a deduction or withholding is so required the
Seller shall pay such additional amount as will ensure that the net
amount the payee receives equals the full amount which it would have
received had the deduction or withholding not been required.
21.2 If any Tax authority brings any sum paid by the Seller under or
pursuant to this agreement into charge to Tax, then the Seller shall
pay such additional amount as will ensure that the total amount paid,
less the Tax chargeable on such amount, is equal to the amount that
would otherwise be payable under this agreement.
22. NOTICES
22.1 Save as otherwise provided in this agreement, any notice, demand or
other communication ("NOTICE") to be given by any party under, or in
connection with, this agreement shall be in writing and signed by or
on behalf of the party giving it. Any Notice shall be served by
sending it by fax to the number set out in clause 22.2, or delivering
it by hand to the address set out in clause 22.2 and in each case
marked for the attention of the relevant party set out in clause 22.2
(or as otherwise notified from time to time in accordance with the
provisions of this clause 22). Any Notice so served by fax or hand
shall be deemed to have been duly given or made as follows:
(a) if sent by fax, at the time of transmission; or
(b) in the case of delivery by hand, when delivered;
provided that in each case where delivery by fax or by hand occurs
after 6 pm on a Business Day or on a day which is not a Business Day,
service shall be deemed to occur at 9 am on the next following
Business Day.
References to time in this clause are to local time in the country of
the addressee.
22.2 The addresses and fax numbers of the parties for the purpose of clause
22.1 are as follows:
(a) Seller ▇▇▇▇▇▇ Limited
Address: c/▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇ ▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇
▇▇▇▇ ▇▇▇
Fax: 020 7406 1603
For the attention of: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
(b) Purchaser and IP c/o The Toro Company
Purchaser ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇: ▇▇▇▇▇▇▇▇▇▇▇
- ▇▇ -
▇▇ ▇▇▇▇▇
Fax: 001 952 948 4856
For the attention of: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Chief Executive Officer
22.3 A party may notify the other party to this agreement of a change to
its name, relevant addressee, address or fax number for the purposes
of this clause 22, provided that such notice shall only be effective
on:
(a) the date specified in the notification as the date on which the
change is to take place; or
(b) if no date is specified or the date specified is less than five
Business Days after the date on which notice is given, the date
following five Business Days after notice of any change has been
given.
22.4 In proving service it shall be sufficient to prove that the envelope
containing such notice was properly addressed and delivered to the
address shown thereon or that the facsimile transmission was made and
a facsimile confirmation report was received, as the case may be.
23. COSTS
Each of the parties shall be responsible for its own legal,
accountancy and other costs, charges and expenses incurred in
connection with the negotiation, preparation and implementation of
this agreement and any other Transaction Document.
24. RIGHTS OF THIRD PARTIES
24.1 Subject to the remaining provisions of this clause 24, any other
member of the Purchaser's Group and any of the officers, employees,
workers or agents (including advisers) of either of the Purchasers or
any other member of the Purchaser's Group ("THIRD PARTIES") may
enforce the terms and accordingly shall have the benefit of those
provisions in this agreement which are, or are stated to be, for their
benefit subject to and in accordance with the provisions of the
Contracts (Rights of Third Parties) ▇▇▇ ▇▇▇▇.
24.2 For the avoidance of doubt, it is intended that (with respect to any
breach by the Seller of the provisions identified in clause 24.1)
Third Parties shall be entitled to seek to recover their own Losses
arising from such breach but without prejudice to the right of either
of the Purchasers to recover in its own right any Losses it may suffer
or incur arising from such breach.
24.3 The parties may by agreement terminate, rescind or vary the terms of
this agreement (including this clause 24) at any time and in any way
without the prior consent of or notice to any Third Party.
24.4 Except as provided in this clause 24, the parties do not intend that
any term of this agreement shall be enforceable by virtue of the
Contracts (Rights of Third Parties) ▇▇▇ ▇▇▇▇ by any person who is not
a party to this agreement.
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25. TIME OF THE ESSENCE
25.1 Time shall not be of the essence of this agreement, either as regards
times, dates and periods specified in the agreement or as regards any
times, dates or periods that may by agreement between the parties be
substituted for any of them unless:
(a) time is expressly stated to be of the essence in relation to that
obligation; or
(b) one party fails to perform an obligation by the time specified in
this agreement and the other party serves a notice on the
defaulting party requiring it to perform the obligation by a
specified time and stating that time is of the essence in
relation to that obligation.
26. CONTINUING EFFECT
Each provision of this agreement shall continue in full force and
effect after Completion, except to the extent that a provision has
been fully performed on or before Completion.
27. SEVERABILITY
If any provision of this agreement is held by a court of competent
jurisdiction to be illegal, invalid or unenforceable in any respect
under the law of any jurisdiction, then such provision shall (so far
as it is invalid or unenforceable) be given no effect and shall be
deemed not to be included in this agreement but without invalidating
any of the remaining provisions of this agreement. Any provision of
this agreement held invalid or unenforceable only in part or degree
will remain in full force and effect to the extent not held invalid or
unenforceable. The parties shall then use all reasonable endeavours to
replace the invalid or unenforceable provision(s) by a valid and
enforceable substitute provision the effect of which is as close as
possible to the intended effect of the invalid or unenforceable
provision.
28. ASSIGNMENT
28.1 Subject to clauses 28.2 and 28.3 none of the parties shall be entitled
to assign the benefit or burden of any provision of this agreement
without the prior written consent of the other parties.
28.2 All or any of either of the Purchasers' rights under this agreement
may (notwithstanding any other provisions contained in this agreement)
be assigned or transferred by the relevant Purchaser to, or made the
subject of a trust created in favour of:
(a) any other member of the Purchaser's Group (or by any such member
to or in favour of any other member of the Purchaser's Group)
provided that such assignee company shall first enter into a
direct covenant with the Seller to comply with the terms of this
agreement as if they had been named as the relevant Purchaser and
provided that if such assignee company leaves the Purchaser's
Group, such rights are assigned or transferred to or made the
subject of a trust in favour of another member of the Purchaser's
Group; and/or
(b) any person by way of security for borrowings of the Purchaser's
Group.
28.3 The Seller shall be permitted to assign by way of first fixed
continuing security to General Electric Capital Corporation (the
"AGENT") all of it's rights, title, interest and benefit from time to
time (whether present or future, actual or contingent) in, under, to
and in respect of the Agreement including (without limitation) its
rights to receive payments of such amounts as may become payable to
the Seller from time to time from the Escrow Account and to receive
the excess payment referred to in clause 3.4 and to direct the
Purchaser to pay all sums which
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become payable to the Seller from the Escrow Account or otherwise from
time to time, to the Agent.
29. TERMINATION OF SELLER'S OBLIGATIONS
29.1 The parties acknowledge that it is the Seller's current intention to
enter into a members' voluntary liquidation (as defined in the
Insolvency Act 1986) following Completion and accordingly it is agreed
that subject to and conditionally upon the Seller (i) then having
commenced and remaining in a members' voluntary liquidation and (ii)
the Seller not then having commenced a creditors' voluntary
liquidation (as defined in the Insolvency Act 1986), that (save in
respect of any antecedent breach by the Seller of any such
obligations, the Purchaser's remedies for which shall be preserved)
any post-Completion obligations of the Seller shall automatically
determine six months after the date of this agreement. In the event of
any conflict between this clause and any other clause of this
agreement this clause shall prevail.
30. GUARANTEE
30.1 In consideration of the Seller entering into this agreement, the
Guarantor unconditionally and irrevocably guarantees, as a primary
obligation to the Seller, the due and punctual payment by the
Purchaser of all monies payable under Clauses 7 (b) and 10.2. If the
Purchaser defaults on the payment when due of any amount payable to
the Seller under Clauses 7 (b) and 10.2, the Guarantor shall
immediately on demand by the Seller pay that amount to the Seller in
the manner prescribed in this agreement as if it were the Purchaser.
This guarantee is a continuing guarantee and shall extend to the
ultimate balance of sums payable by the Buyer under Clauses 7 (b) and
10.2, regardless of any intermediate payment or discharge in whole or
in part. It shall not be affected by an act, omission, matter or thing
which, but for this clause, would reduce, release or prejudice any of
the Guarantor's obligations under this clause 3 (without limitation
and whether or not known to it or the Seller).
31. GOVERNING LAW AND SUBMISSION TO JURISDICTION
31.1 Governing law
The construction, validity and performance of this agreement shall be
governed by the laws of England and Wales.
31.2 Submission to jurisdiction
The parties to this agreement irrevocably agree that the courts of
England and Wales shall have exclusive jurisdiction over any claim or
matter arising under or in connection with this agreement and that
accordingly any proceedings in respect of any such claim or matter may
be brought in such court.
31.3 The Purchasers irrevocably consent to any process in any proceedings
being served on it in accordance with the provisions of this agreement
relating to the service of notices but nothing in this agreement shall
affect the right to serve process in any other manner permitted by
law.
The parties have shown their acceptance of the terms of this agreement by
executing it at the end of the schedules.
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[SCHEDULES OMITTED]
SIGNED by G. ▇▇▇▇ ▇▇▇▇ )
duly authorised for and on behalf ) /s/ G. ▇▇▇▇ ▇▇▇▇
of ▇▇▇▇▇▇ LIMITED )
SIGNED by ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ )
duly authorised for and on behalf ) /s/ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
of EDITLAND LIMITED )
SIGNED by ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ )
duly authorised for and on behalf of ) /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
of TORO ▇▇▇▇▇▇ (GUERNSEY) LIMITED )
EXECUTED AS A DEED BY THE TORO COMPANY )
Acting by: )
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, CEO and ) /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
J. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Secretary ) /s/ J. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇