Dated 23 May 2005
(1) UBINETICS HOLDINGS LIMITED as Seller
(2) AEROFLEX TEST SOLUTIONS LIMITED as Purchaser
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SALE AND PURCHASE AGREEMENT
for the entire issued share capital of UbiNetics Limited together with
such parts of the SPG business as are conducted in India, Japan and
Hong Kong
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SUBJECT TO CONTRACT
STRICTLY PRIVATE AND CONFIDENTIAL
▇▇▇▇▇
▇▇▇▇▇
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& MAW
LONDON
CONTENTS
CLAUSE PAGE
1. Definitions and interpretation...................................1
2. Agreement to sell and purchase..................................13
3. Consideration...................................................14
4. Completion......................................................16
5. Indian Completion...............................................17
6. Joint Account...................................................18
7. Contracts.......................................................19
8. Employees.......................................................20
9. Warranties......................................................25
10. Purchaser's warranties..........................................26
11. Guarantees......................................................26
12. Restrictions on Seller..........................................27
13. Asbestos indemnity..............................................29
14. Announcements and confidentiality...............................30
15. Costs...........................................................32
16. Entire agreement................................................34
17. Continuing effect...............................................34
18. Invalidity......................................................34
19. Amendments, variations and waivers..............................34
20. Further assurance and assistance................................35
21. Counterparts....................................................36
22. Assignment and third party rights...............................37
23. Notices.........................................................37
24. Governing law and jurisdiction..................................38
SCHEDULES
1. Details of the Company
2. Intellectual Property
3. Completion arrangements
4. Warranties
5. Limitations on claims
6. The Properties
7. Completion Net Asset Statement
8. Earn Out Consideration
9. Guarantees
10. Conduct of the Indian Business until Indian Completion
11. Conditions
DOCUMENTS IN THE AGREED TERMS
Deed of Tax Covenant
Disclosure Letter
Letters of resignation for Directors and the secretary
Letters of resignation for auditors
Powers of attorney
Local Agreement relating to the Indian Assets
Local Agreement relating to the Far East Assets
Letter of Instructions
Transitional Services Agreement
Deed of Guarantee
Indemnity for lost share certificate
Deed of Waiver of Intra-Group Debt
Deed of Waiver of Dividend
THIS AGREEMENT is dated 23 May 2005 and made between:
(1) UBINETICS HOLDINGS LIMITED a company incorporated in England and Wales
(registered number 03936291) whose registered office is at Cambridge
Technology Centre, Back Lane, Melbourn, Royston, Hertfordshire SG8 6DP (the
"SELLER"); and
(2) AEROFLEX TEST SOLUTIONS LIMITED a company incorporated in England and Wales
(registered number 03491978) whose registered office is at ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇ ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇ (▇▇▇ "PURCHASER").
BACKGROUND:
(A) UbiNetics Limited is a company limited by shares incorporated in England
and Wales on 16 October 1998 with registered number 03650692. Further
details of the Company are set out in Schedule 1 (Details of the Company).
(B) The Seller has agreed to sell or procure to be sold and the Purchaser has
agreed to purchase:
(i) the entire issued share capital of the Company; and
(ii) the Assets,
for the consideration and upon the terms set out in this Agreement.
IT IS AGREED THAT:
1. DEFINITIONS AND INTERPRETATION
1.1 DEFINED TERMS
In this Agreement:
"ADDITIONAL EMPLOYEE" means each of those persons working in the
Indian Business or the Far East Business who are based in India, Japan
or Hong Kong and who are listed by hire date, job title and location
on the list of Additional Employees disclosed at Disclosure Document
5.84;
"AGREED PAYMENT" shall have the meaning set out in Paragraph 4.4, Part
1 of Schedule 7 (Completion Net Asset Statement);
"AGREED TERMS" means, in relation to any document, that document in
the terms agreed between the parties and signed or initialled for
identification purposes only by or on behalf of each party prior to
execution of this Agreement;
"AMOUNT CLAIMED" means in respect of any Claim the amount claimed
(including costs and expenses incurred) in respect of the relevant
Claim;
"ASBESTOS" means the fibrous silicate material in any form commonly
referred to as asbestos and includes asbestos fibres and any asbestos
containing materials;
1
"ASBESTOS HEALTH LOSSES" means all or any liabilities, damages, costs
and expenses (including all expert, professional and legal fees) and
to the extent allowable by law fines and penalties in each case
incurred by the Company and/or the Purchaser and/or the Purchaser's
Group in respect of any claim made or threatened in writing by any
Relevant Company Employee (including their estate or family) or other
person (including consultants, contractors and visitors to the
Melbourn Site) in respect of which the Company owed a duty of care
prior to the Completion Date which in each case are in relation to any
Asbestos Illness suffered or sustained by the Relevant Company
Employee or such other person;
"ASBESTOS ILLNESS" means any illness, injury, disease or death
(including but without limitation asbestosis, mesothelioma, cancer of
the bronchii or peritoneum) arising from or related to the exposure to
Asbestos at, in, on, over or under the Melbourn Site prior to the
Completion Date;
"ASBESTOS INDEMNITY" means the indemnity set out at Clauses 13.1 and
13.2;
"ASBESTOS INDEMNITY PERIOD" means the period of 6 years from the
Completion Date;
"ASSETS" means the Indian Assets, the Far East Assets and the benefit
(subject to the burden) of the Contracts;
"ASSET REGISTER" means the register of assets of the Business
disclosed at Disclosure Document 3.1.64;
"AUDIT COSTS" means the sum of (pound)264,375 payable by the Seller to
the Seller's Accountants;
"BALANCE SHEET DATE" means 31 December 2004;
"BALANCING PAYMENT DATE" means the first Business Day date falling
three Business Days after the Net Worth Confirmation Date;
"BUSINESS" means the development and supply by the Company and other
members of the Seller's Group of test and measurement solutions for 3G
and next generation wireless radio cellular networks and 3G and next
generation wireless cellular telephones;
"BUSINESS DATA" means data relating predominantly to the Business and
"RETAINED DATA" means data relating predominantly to the VPT Business;
"BUSINESS DAY" means a day (not being a Saturday or Sunday) when banks
generally are open in the City of London for the transaction of
general banking business;
"BUSINESS RECORDS" means records in written or other machine readable
form (including computer disks or tapes) relating exclusively to the
Additional Employees or to the Plant and Equipment and any other such
records relating exclusively to the Far East Business or the Indian
Business;
2
"CAMBRIDGE SUB-LEASE" means the sub-lease between the Seller and the
Company relating to: (a) the part of the premises at ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇; and (b) Portacabin 4 at the
same premises;
"CLAIM" means any claim for a breach of this Agreement, the Deed of
Tax Covenant, either of the Local Agreements or the Hive Out
Agreement;
"CLONED IT SYSTEM" shall have the meaning set out in the Transitional
Services Agreement;
"COMPANY" means UbiNetics Limited details of which are given in
Schedule 1 (Details of the Company);
"COMPANY EMPLOYEE" means each of those persons employed by the Company
and listed by hire date, job title and location on the list of Company
Employees disclosed at Disclosure Document 5.84;
"COMPANIES ACT" means Companies ▇▇▇ ▇▇▇▇;
"COMPANY INTELLECTUAL PROPERTY" means all Intellectual Property which
at the Completion Date is owned by the Company and which is used in
the Business as currently carried on, excluding the Group Names and
the Intellectual Property agreed to be assigned to the Seller pursuant
to the Hive Out Agreement but including that listed in Part 1 of
Schedule 2 (Intellectual Property);
"COMPLETION" means completion of the sale and purchase of the Shares,
the Contracts and the Far East Assets pursuant to Clause 4
(Completion);
"COMPLETION DATE" means the day Completion takes place in accordance
with Clause 4 (Completion);
"COMPLETION NET ASSET STATEMENT" means the statement of net assets and
liabilities of the Business as at the close of business on the
Completion Date, which shall be drawn up in the form shown in Part 2
of Schedule 7 (Completion Net Asset Statement) and otherwise prepared,
reviewed and confirmed in accordance with Part 1 of Schedule 7
(Completion Net Asset Statement);
"COMPLETION NET WORTH" means the sum computed in accordance with
paragraph 3 of Part 1 of Schedule 7 (Completion Net Asset Statement);
"CONDITIONS" means the conditions set out in Schedule 11 (Conditions);
"CONFIDENTIALITY AGREEMENT" means the confidentiality agreement
entered into by the Seller and the Purchaser on 17 December 2004;
"CONTRACTS" means the Qualcomm Contract and each of the contracts
disclosed at Disclosure Documents 9.4, 6.1.10, 6.2.28, 6.2.29, 6.2.31
and 6.2.34;
"DEED OF GUARANTEE" means the deed of that name in the Agreed Terms to
be entered into between the Guarantor and the Seller at Completion;
"DEED OF TAX COVENANT" means the deed of that name in the Agreed Terms
to be entered into between the Seller and the Purchaser at Completion;
3
"DEED OF WAIVER OF DIVIDENDS" means the deed in the Agreed Terms
waiving all dividend payments to be entered into by the Seller and the
Company at Completion;
"DEED OF WAIVER OF INTRA-GROUP DEBT" means the deed in the Agreed
Terms waiving all amounts due to the Seller or any other member of
Seller's Group by the Company to be entered into by the Seller and the
Company at Completion;
"DIRECTORS" means the directors of the Company named in Schedule 1
(Details of the Company);
"DISCLOSURE DOCUMENTS" means the bundles of documents attached to the
Disclosure Letter and initialled by the Seller's Lawyers and the
Purchaser's Lawyers for the purposes of identification;
"DISCLOSURE LETTER" means the disclosure letter from the Seller to the
Purchaser together with its annexures in the Agreed Terms having the
same date as this Agreement;
"EARN OUT CONSIDERATION" means the amount payable by the Purchaser to
the Seller pursuant to the provisions of Clause 3.5 (Earn Out
Consideration) and Paragraphs 4.1, 4.2 or 5 of Schedule 8 (Earn Out
Consideration);
"EARN OUT CONSIDERATION DATE" means the first Business Day following
the expiry of 5 Business Days after the date on which the amount of
the Earn Out Consideration is agreed pursuant to the provisions of
Paragraph 2 of Schedule 8 (Earn Out Consideration);
"EARN OUT PERIOD" means the period from 1 July 2005 to 30 June 2006;
"EARN OUT STATEMENT" means the statement of Turnover and Gross Profit
prepared, reviewed and agreed in accordance with the provisions of
Schedule 8 (Earn Out Consideration);
"EMPLOYEES" means the Company Employees and the Additional Employees;
"EMPLOYER'S LIABILITY INSURANCE POLICIES" means those employer's
liability insurance policies held by the Company, the Seller or any
other member of the Seller's Group at or prior to the date hereof in
respect of liabilities of the Company or the Business;
"ENCUMBRANCE" means any claim, charge, mortgage, security, lien,
option, power of sale, hypothecation or other third party rights,
retention of title, right of pre-emption, right of first refusal or
security interest of any kind or agreement or arrangement to create
any of the foregoing;
"ENVIRONMENT" means all and any of the following media, being land,
water and air, and all living organisms including humans;
"ENVIRONMENTAL LAWS" means all or any applicable law, in force at or
prior to the date of this Agreement including common law, statute,
statutory instrument, regulation, code of practice or guidance,
directive, regulation, by-law, order, notice, decree, injunction,
resolution or judgment of any court which in each case is legally
4
binding and which has as its purpose or effect the prevention of harm
to or protection of the Environment;
"ENVIRONMENTAL PERMITS" means all or any permits, licences,
authorisations, consents, approvals, certificates including any
conditions thereof required under any Environmental Laws for the
activities of the Company or the occupation or use by the Company of
any premises or the Properties in relation to the activities of the
Company each at the date hereof;
"ESCROW AMOUNT" means an amount equal to (pound)6,900,000 or, as the
case may be, the balance of such amount after any payment from the
Joint Account to the Seller or the Purchaser pursuant to Clause 6.5
(Payment from Joint Account);
"ESSENTIAL IP" means IPR (as defined in the ETSI Guide on IPRs
1.9.2004 namely Intellectual Property including copyrights, patents,
utility models, registered designs and applications for any of these
but excluding trade marks, trade secrets, confidential information and
rights relating to get-up (packaging)), without which it would not be
possible on technical (but not commercial) grounds, taking into
account normal technical practice and the state of the art generally
available at the time of standardisation, to make, sell, lease,
otherwise dispose of, repair, use or operate equipment or methods
which comply with a standard (namely any standard adopted by ETSI or
by 3GPP (the Third Generation Partnership Project) or any other
organisational partner of 3GPP) without infringing that IPR;
"FAR EAST ASSETS" means the Business Records and the Plant and
Equipment, in each case to the extent they relate to the Far East
Business;
"FAR EAST BUSINESS" means such part of the Business as is conducted by
the Far East Seller;
"FAR EAST PURCHASER" means Aeroflex Asia Limited, a company
incorporated under the laws of Hong Kong (registered number 733044)
whose registered office is at ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ Resources Building, ▇▇
▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇;
"FAR EAST EMPLOYEES" means each of the Additional Employees working in
the Far East Business who are based in Hong Kong or Japan and who are
listed by hire date, job title and location on the list of Far East
Employees disclosed at Disclosure Document 5.84;
"FAR EAST SELLER" means UbiNetics (Hong Kong) Limited, a company
incorporated under the laws of Hong Kong (registered number: 672423)
whose registered office is at 20/F, St George's Building, ▇▇.▇, ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇;
"FINALLY DETERMINED" means, in relation to a Claim or any other claim,
if and when a court of competent jurisdiction has delivered a judgment
in respect of such Claim or claim (whether on appeal or otherwise) and
any one of the following provisions applies:
(a) where no application has been made for permission or leave to
appeal against such judgment within the requisite time period for
so doing as provided in the relevant court rules; or
5
(b) where an application for permission or leave to appeal has been
made within the requisite time period but such application has
been refused and may not be renewed in a higher court (or where
the requisite time period for renewing such application as
provided in the relevant court rules has expired); or
(c) where permission or leave to appeal has been granted but such
appeal has been withdrawn or refused; or
(d) where there is no right of appeal against any such judgment.
Where a time period as provided in the relevant court rules has
expired, an application to extend such time period or a court order
extending such time period shall be of no effect for the purposes of
this definition.
"FINANCIAL YEAR" means an accounting reference period as defined in
accordance with s223 Companies Act;
"GROSS PROFIT" means the gross profit of the Business in respect of
the Earn Out Period as calculated and determined in accordance with
the provisions of Schedule 8 (Earn Out Consideration);
"GROSS PROFIT BENCHMARK" means 86.81 per cent;
"GROSS PROFIT PERCENTAGE" means the ratio of Gross Profit to Turnover
expressed as a percentage;
"GROUP" means the Purchaser's Group or the Seller's Group, as
appropriate;
"GROUP NAMES" means the name UBINETICS and the stylised version of
that name as shown in Part 2 of Schedule 2 (Intellectual Property);
"GUARANTEES" means each of the guarantees and indemnities set out in
Schedule 9 (Guarantees);
"GUARANTOR" means Aeroflex Incorporated a company incorporated in the
State of Delaware whose registered office is at ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇;
"HAZARDOUS SUBSTANCES" means any natural or artificial substance or
combination of substances including but not limited to waste (whether
in solid or liquid form or in the form of a gas or vapour) which are
hazardous, toxic or dangerous and capable of causing harm to the
Environment;
"HIVE OUT AGREEMENT" means the asset purchase agreement disclosed at
Disclosure Document 6.3.25;
"ICTA" means the Income and Corporation Taxes ▇▇▇ ▇▇▇▇;
"INDIAN ASSETS" means the Business Records and the Plant and
Equipment, in each case to the extent they relate to the Indian
Business;
"INDIAN BUSINESS" means such part of the Business as is conducted by
the Indian Seller;
6
"INDIAN COMPLETION" means the completion of the sale and purchase of
the Indian Assets and the transfer of the Indian Employees pursuant to
Clause 5 (Indian Completion);
"INDIAN COMPLETION DATE" means the day Indian Completion takes place
in accordance with Clause 5 (Indian Completion);
"INDIAN EMPLOYEES" means each of the Additional Employees working in
the Indian Business who are based in India and who are listed by hire
date, job title and location on the list of Indian Employees disclosed
at Disclosure Document 5.84 as such list shall be updated in
accordance with Clause 8.1 (Provision of Information);
"INDIAN LONG STOP DATE" means 30 September 2005 or such later date as
the Seller and the Purchaser agree in writing;
"INDIAN PROPERTY" means ▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇-▇▇▇▇▇▇, ▇▇▇▇▇;
"INDIAN PURCHASER" means Aeroflex Test Solutions India Private
Limited, (Registration Number CIN-U72200KA2004 PTC 035306) whose
registered office is at 14th Floor, 'B' Wing, ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇/▇ ▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇, ▇▇▇▇▇;
"INDIAN SELLER" means UbiNetics India Private Limited a company
incorporated under the laws of India (registered number:
U72200KA2001PTC028495) whose registered office is at ▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇-▇▇▇▇▇▇, ▇▇▇▇▇;
"INITIAL CONSIDERATION" shall have the meaning set out in Clause 3.2
(Initial Consideration);
"INITIAL PAYMENT" shall have the meaning set out in Clause 3.3
(Payment of Initial Consideration);
"INTELLECTUAL PROPERTY" means all intellectual property, including
patents, utility models, trade and service marks, trade names, domain
names, right in designs, copyrights, moral rights, topography rights,
rights in databases, trade secrets and know-how, in all cases whether
or not registered or registrable and including registrations and
applications for registration of any of these and rights to apply for
the same and all rights and forms of protection of a similar nature or
having equivalent or similar effect to any of these anywhere in the
world;
"IP LICENCE" means the licence of Intellectual Property disclosed at
Disclosure Document 9.9;
"IT COSTS" means the costs payable by the Company on or after
Completion in respect of purchasing the IT hardware and software
listed in Disclosure Document 9.73;
"JOINT ACCOUNT" means the separately designated interest bearing
deposit account to be opened at Royal Bank of Scotland Bank plc,
Blackfriars Branch in the joint names of the Seller's Lawyers and the
Purchaser's Agent;
7
"LETTER OF INSTRUCTIONS" means the letter of instructions relating to
the Joint Account in the Agreed Terms;
"LIBOR" means:
(a) the applicable Screen Rate; or
(b) (if no Screen Rate is available for the relevant currency or
relevant period) the rate as supplied to the Seller at its
request quoted by the Reference Bank to the leading banks in the
London interbank market;
"LOCAL AGREEMENTS" means the local transfer agreements relating to the
Indian Assets and the Far East Assets in the Agreed Terms;
"LOSSES" in respect of any matter, event or circumstance means all
losses, claims, demands, actions, proceedings, damages and other
payments, costs, expenses or other liabilities of any kind;
"MATERIAL CONTRACTS" means:
(a) all contracts for the sale or supply by any member of the
Seller's Group of goods or services relating to the Business in
respect of which there are unperformed obligations at the
Completion Date for the sale or supply of such goods or services
or for the payment for such goods or services;
(b) all contracts for the sale or supply to any member of the
Seller's Group of goods or services relating to the Business in
respect of which there are unperformed obligations at the
Completion Date for the sale or supply of such goods or services
or for the payment for such goods or services and under which the
relevant member of the Seller's Group has an outstanding
obligation to pay a sum which is reasonably likely to be in
excess of (pound)50,000;
(c) all agency or distribution contracts entered into by any member
of the Seller's Group in relation to the Business which are
subsisting at the Completion Date; and
(d) all contracts for the grant of a licence:
(i) by any member of the Seller's Group of Intellectual Property
granted in the course of the Business; and
(ii) to any member of the Seller's Group of Intellectual Property
granted in the course of the Business,
which, in each case, are subsisting at the Completion Date;
"MELBOURN SITE" means the ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇ including all grounds and external areas within
its boundaries;
"NET WORTH CONFIRMATION DATE" means the date upon which the Completion
Net Worth is determined in accordance with Schedule 7 (Completion Net
Asset Statement);
8
"PENSION SCHEME" means the UbiNetics Stakeholder Pension Plan;
"PLANT AND EQUIPMENT" means:
(a) all items of plant, machinery, tools, patterns, prototypes,
fittings, furniture and equipment (whether fixed or loose)
including without limitation, any computer equipment, owned or
used by the Seller or any other member of the Seller's Group and
used predominantly in connection with the Indian Business or the
Far East Business at the Completion Date (in the case of the Far
East Business) or at the Indian Completion Date (in the case of
the Indian Business); and
(b) the motor vehicle owned or used by the Indian Seller on the
Indian Completion Date predominantly in the conduct of the Indian
Business as listed in the Asset Register.
"PROPERTIES" means the leasehold properties described in Schedule 6
(The Properties);
"PURCHASER'S AGENT" means Pinsent Masons of ▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇;
"PURCHASER'S ACCOUNTANTS" means KPMG LLP of ▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇,
▇▇▇ ▇▇▇;
"PURCHASER'S GROUP" means any of the following from time to time: the
Purchaser, its subsidiaries (including, solely after Completion, the
Company) and subsidiary undertakings (and their respective
subsidiaries and subsidiary undertakings) and any holding company or
parent undertaking of the Purchaser and all other subsidiaries and
subsidiary undertakings of any holding company or parent undertaking
of the Purchaser and "MEMBER OF THE PURCHASER'S GROUP" shall be
construed accordingly;
"PURCHASER'S LAWYERS" means Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ (UK)
LLP, ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇;
"QUALCOMM CONTRACT" means the test equipment licence agreement entered
into between the Seller and ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ dated 7 February
2003 (as varied on 12 February 2003) a copy of which is disclosed at
Disclosure Document 9.8;
"REFERENCE BANK" means National Westminster Bank plc;
"RELEVANT ACCOUNTING STANDARDS" means, in relation to the SPG Audited
Accounts, any of the following in force on the Balance Sheet Date: any
applicable Statement of Standard Accounting Practice, Financial
Reporting Standard, Urgent Issues Task Force Abstract or Statement of
Recommended Practice issued by the Accounting Standards Board (or any
successor body) or any committee of it or body recognised by it;
"RELEVANT COMPANY EMPLOYEE" means any Relevant Employee of the Company
at or prior to the Completion Date.
9
"RELEVANT EMPLOYEE" means any officer or Employee or former officer or
employee of the Company in respect of the Business or any of their
dependants;
"RESTRICTED AREA" means China, Finland, France, Germany, Hong Kong,
Ireland, Italy, Japan, Korea, Poland, Sweden, United Kingdom, United
States of America and any other country where there have been sales of
products or services of the Business in excess of (pound)75,000 within
the 12 months immediately preceding the Completion Date;
"RESTRICTED BUSINESS" means research into and the development,
distribution, sale and supply of test and measurement solutions for 3G
and next generation wireless radio cellular networks and 3G and next
generation wireless cellular telephones as the same is conducted by
the Company and other members of the Seller's Group in the ordinary
course prior to Completion;
"RETENTION" means the sum of (pound)6,900,000;
"RETENTION RELEASE DATE" means the second anniversary of the date of
this Agreement;
"SCREEN RATE" means the British Bankers Association Interest
Settlement Rate for the relevant currency and period displayed on the
appropriate Telerate screen. If the agreed page is replaced or service
ceases to be available, the Seller may specify another page or service
displaying the appropriate rate after consultation with the Purchaser;
"SELLER'S ACCOUNTANTS" means Deloitte & Touche LLP of ▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇;
"SELLER'S GROUP" means any of the following from time to time: the
Seller, its subsidiaries (including, solely prior to or on Completion,
the Company) and subsidiary undertakings (and their respective
subsidiaries and subsidiary undertakings) and any holding company or
parent undertaking of the Seller and all other subsidiaries and
subsidiary undertakings of any holding company or parent undertaking
of the Seller and "MEMBER OF THE SELLER'S GROUP" shall be construed
accordingly;
"SELLER'S LAWYERS" means Mayer, Brown, ▇▇▇▇ & Maw LLP (an English
limited liability partnership) whose registered office is at ▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇;
"SHARES" means the entire issued share capital of the Company details
of which are given in Schedule 1 (Details of the Company);
"SPG AUDITED ACCOUNTS" means the accounts disclosed at Disclosure
Document 3.1.60;
"SPG MANAGEMENT ACCOUNTS" means, in relation to the Business, the
unaudited balance sheet as at 28 February 2005 and the unaudited
profit and loss account in respect of the two month period ended 28
February 2005 disclosed at Disclosure Document 3.1.61;
10
"SUPPLIER" means any person or other organisation whatsoever that has
supplied or agreed to supply goods or services to the Business at any
time during the eighteen months prior to Completion, or who supplied
goods or services at Completion to the Business;
"TAX" or "TAXATION" means and includes, without limitation, (a) taxes
on gross or net income, profits and gains, (b) all other taxes,
levies, duties, imposts, charges and withholdings of any nature,
including any excise, property, value added, sales, use, occupation,
transfer, franchise and payroll taxes and any national insurance or
social security contributions and (c) all penalties, charges and
interest relating to any of the foregoing or to any later or incorrect
return in respect of any of them;
"TAX AUTHORITY" means any authority, body or person (whether inside or
outside the United Kingdom) competent to impose any liability to Tax;
"TAX STATUTE" means all legislation, directives, orders and
regulations in force or coming into force from time to time providing
for or imposing Tax;
"TAX WARRANTIES" means the Warranties set out in Schedule 4, Paragraph
19 (Taxation matters) and Warranty 17.9;
"TRANSACTION DOCUMENTS" means this Agreement, the Deed of Tax
Covenant, the Transitional Services Agreement, each of the Local
Agreements, the Disclosure Letter and the Deed of Guarantee;
"TRANSITIONAL SERVICES AGREEMENT" means the agreement in the Agreed
Terms relating to the provision of transitional services to be entered
into between the Seller and the Company on Completion;
"TURNOVER" means the net turnover of the Business in respect of the
Earn Out Period as calculated and determined in accordance with the
provisions of Schedule 8 (Earn Out Consideration);
"TURNOVER ELEMENT" means the amount calculated in accordance with the
provisions of Paragraph 4.1 of Schedule 8 (Earn Out Consideration);
"UNSATISFIED AMOUNTS CLAIMED" means, on the Retention Release Date, an
amount equal to the aggregate of:
(e) the whole or part of an Amount Claimed pursuant to a Claim made
before that date for which the Seller has accepted liability or
for which it has been Finally Determined that the Seller is
liable but which liability has not in either case been satisfied
by payment out of the Joint Account or otherwise; and
(b) any remaining Amount Claimed pursuant to a Claim made before that
date which the Purchaser has not withdrawn, for which the Seller
has not accepted liability or in respect of which, it shall not
have been Finally Determined whether or not the Seller is liable,
and in respect of such Claim, where proceedings have been
commenced or less than 12 months have elapsed since the date upon
which the relevant Claim was notified to the Seller;
11
"VAT" means value added tax as provided for in VATA at the rate(s)
from time to time imposed;
"VATA" means the Value Added Tax ▇▇▇ ▇▇▇▇;
"VPT BUSINESS" means the business of developing, making and licensing
protocol software, handset reference designs and systems-on-chip
solutions and related applications as carried on by the Seller or any
other member of the Seller's Group as at or prior to the Completion
Date together with all other assets and liabilities of the Company
that do not relate to the Business;
"VPT LICENSED IP" means all Intellectual Property licensed to the
Company by the Seller under the IP Licence; and
"WARRANTIES" means the warranties referred to in Clause 9 (Warranties)
and set out in Schedule 4 (Warranties) given and made by the Seller in
favour of the Purchaser.
1.2 CONTENTS PAGE AND HEADINGS
In this Agreement, the contents page and headings are included for
convenience only and shall not affect the interpretation or
construction of this Agreement.
1.3 MEANING OF REFERENCES
In this Agreement, unless the context requires otherwise, any
reference to:
(a) this AGREEMENT includes the Background and Schedules, which form
part of this Agreement for all purposes;
(b) a CLAUSE or to a SCHEDULE is, as the case may be, to a clause of
or a schedule to this Agreement and any reference in a Schedule
to a PART or PARAGRAPH is to a part or paragraph of that
Schedule;
(c) a DOCUMENT is to that document as supplemented, otherwise
amended, replaced from time to time;
(d) any ENGLISH STATUTORY PROVISION or ENGLISH LEGAL TERM for any
action, remedy, method of judicial proceeding, document, legal
status, court, official or other legal concept or thing shall in
respect of any jurisdiction other than England be deemed to
include what most nearly approximates in that jurisdiction to the
English statutory provision or English legal term;
(e) INDEMNIFY and to INDEMNIFYING any person against any Losses by
reference to a matter, event or circumstance includes
indemnifying and keeping him indemnified immediately on demand
against all Losses from time to time made, suffered or incurred
by that person as a direct or indirect result of that matter,
event or circumstance;
(f) a PARTY or the PARTIES is to a party or the parties to this
Agreement and shall include any permitted assignees of a party;
12
(g) a PERSON includes any individual, firm, company, corporation,
government, state or agency of state or any association, trust or
partnership (whether or not having a separate legal personality);
(h) the masculine, feminine and neuter GENDER respectively includes
the other genders and any reference to the singular includes the
plural and vice versa;
(i) POUNDS, STERLING or (POUND) is to the lawful currency from time
to time of the United Kingdom;
(j) a STATUTE or STATUTORY PROVISION includes any consolidation or
re-enactment, modification or replacement of the same, any
statute or statutory provision 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;
(k) a TIME OF DAY is to London time and references to a DAY are to a
period of 24 hours running from midnight to midnight; and
(l) WRITING shall include any modes of reproducing words in a legible
and non-transitory form.
1.4 NO RESTRICTIVE INTERPRETATIONS
In this Agreement, general words shall not be given a restrictive
interpretation by reason of their being preceded or followed by words
indicating a particular class of acts, matters or things.
1.5 COMPANIES ACT DEFINITIONS
Unless the context requires otherwise, any words and expressions
defined in Part XXVI Companies Act and not defined in this Agreement
shall have the meanings given to them in that Act.
2. AGREEMENT TO SELL AND PURCHASE
2.1 SALE AND PURCHASE OF THE SHARES
The Seller shall sell the Shares to the Purchaser with full title
guarantee and free from any Encumbrances, and the Purchaser shall
purchase from the Seller the entire legal and beneficial ownership in
and to the Shares together with all rights attached or accruing to
them at Completion including the right to receive all dividends,
distributions or any return of capital hereafter declared, made or
paid.
2.2 ASSETS BEING SOLD
The Seller shall sell or shall procure to be sold to the Purchaser or
a member of the Purchaser's Group with full title guarantee and free
from any Encumbrances and together with all rights attached or
accruing to them at or after Completion (in the case of the Contracts
and the Far East Assets) or Indian Completion (in the case of the
Indian Assets) and the Purchaser shall purchase or shall procure that
a member of the
13
Purchaser's Group shall purchase from the Seller or another member of
the Seller's Group as at and from midnight on the Completion Date (in
the case of the Contracts and the Far East Assets) or at and from
midnight on the Indian Completion Date (in the case of the Indian
Assets) the entire legal and beneficial ownership in the Assets which
shall be sold and transferred on a going concern basis by means of the
relevant Local Agreement (provided always that the provisions of this
Agreement shall prevail over any Local Agreement in the event of a
conflict, unless expressly stated otherwise in the relevant Local
Agreement). The Seller and the Purchaser (as applicable) shall procure
that each of the parties to the Local Agreements shall not assert, or
seek to assert, against any other party to such agreement, any
provision(s) of a Local Agreement if and to the extent that any such
provision(s) shall be in conflict with the provisions of this
Agreement.
For the purposes of this Clause 2.2, the Purchaser is acting for
itself and as agent or trustee for the Indian Purchaser and the Far
East Purchaser.
2.3 SALE OF SHARES AND ASSETS INTER-DEPENDENT
The sale and purchase of the Shares, the Contracts and the Far East
Assets are inter-dependent and shall be completed simultaneously.
3. CONSIDERATION
3.1 TOTAL CONSIDERATION
The total consideration for the sale and purchase of the Shares and
the Assets shall be the aggregate of:
(a) the Initial Consideration; and
(b) the Earn Out Consideration.
3.2 INITIAL CONSIDERATION
The "INITIAL CONSIDERATION" shall be a sum equal to:
(a) (pound)45,999,997 (being the sum payable for the Shares);
(b) (pound)1.00 (being the sum payable for the Contracts);
(c) (pound)1.00 (being the sum payable for the Indian Assets); and
(d) (pound)1.00 (being the sum payable for the Far East Assets),
plus the amount (if any) by which the Completion Net Worth exceeds the
sum of (pound)3,677,000, or minus the amount (if any) by which the
Completion Net Worth is less than the sum of (pound)3,677,000.
3.3 PAYMENT OF INITIAL CONSIDERATION
The Initial Consideration shall be satisfied:
(a) on Completion by the payment by the Purchaser:
14
(i) to the Seller in cash of the sum of (pound)39,100,000 (the
"INITIAL PAYMENT"); and
(ii) of the Retention into the Joint Account,
in each case in accordance with the provisions of Clause 4.2
(Completion arrangements) and Paragraph 3 of Part 1 of Schedule 3
(Completion arrangements); and
(b) on the Balancing Payment Date, by the payment to the Seller in
cash of an amount (minus any Agreed Payment which may have
already been paid to the Seller in accordance with Paragraph
4.4(b) of Part 1 of Schedule 7 (Completion Net Asset Statement)),
equal to the amount (if any) by which the Initial Payment plus
the Retention is less than the Initial Consideration, together
with accrued interest. Such interest which shall be charged for
the period beginning on the Completion Date and ending on the
date of actual payment (both before and after judgment) at the
rate of 2% above LIBOR as at the Completion Date with respect to
deposits with a term most nearly corresponding to the time period
between the Completion Date and the Balancing Payment Date.
Interest shall be calculated on the basis of a year of 365 days
and for the actual number of days elapsed and shall accrue from
day to day.
3.4 IF INITIAL CONSIDERATION IS LESS THAN INITIAL PAYMENT PLUS THE
RETENTION
Notwithstanding any other provision of this Agreement to the contrary
(including those provisions set out in Schedule 5 (Limitations on
claims)), if the Initial Consideration is less than the Initial
Payment plus the Retention the Seller shall be liable to pay to the
Purchaser, on the Balancing Payment Date, the full amount of the
shortfall minus any Agreed Payment which may have already been paid to
the Purchaser in accordance with Paragraph 4.4(b) of Part 1 of
Schedule 7 (Completion Net Asset Statement), together with accrued
interest. Such interest shall be charged for the period beginning on
the Completion Date and ending on the date of actual payment (both
before and after judgment) at the rate of 2% above LIBOR as at the
Completion Date with respect to deposits with a term most nearly
corresponding to the time period between the Completion Date and the
Balancing Payment Date. Interest shall be calculated on the basis of a
year of 365 days and for the actual number of days elapsed and shall
accrue from day to day.
3.5 EARN OUT CONSIDERATION
The Earn Out Consideration shall be paid in cash by way of electronic
transfer by the Purchaser to the Seller (a) on the Earn Out
Consideration Date, together with accrued interest, which shall be
charged for the period beginning on the first day following the end of
the Earn Out Period and ending on the Earn Out Consideration Date at
the rate of 2% above LIBOR at the end of the Earn Out Period with
respect to deposits with a term most nearly corresponding to the time
period between the end of the Earn Out Period and the Earn Out
Consideration Date, or (b) in accordance with the provisions of
Paragraph 5 of Schedule 8 (Earn Out Consideration).
15
3.6 RECEIPT BY SELLER'S LAWYERS
Receipt by the Seller's Lawyers (including by deposit to the account
referred to in Paragraph 3(a) of Part 1 of Schedule 3 (Completion
arrangements)) of any monies or completed documentation to be provided
by the Purchaser in satisfaction of any of the obligations of the
Purchaser to the Seller under this Agreement shall be deemed to be
full and complete discharge of any such obligation the Purchaser has
to the Seller under this Agreement and any obligation to pay
consideration for any of the Assets the Far East Purchaser has to the
Far East Seller or the Indian Purchaser has to the Indian Seller under
either of the Local Agreements.
3.7 PAYMENT PURSUANT TO CLAIM
If any payment is made by the Seller to the Purchaser pursuant to a
claim made by the Purchaser for any breach of this Agreement or
otherwise pursuant to this Agreement or the Deed of Tax Covenant, the
payment shall be deemed to be made by way of reduction of the Initial
Consideration and the allocation of the Initial Consideration to the
Shares, the Contracts, the Indian Assets and the Far East Assets shall
accordingly be deemed to be reduced by the amount of that payment as
appropriate.
3.8 INTEREST ON OVERDUE AMOUNTS
Save as otherwise expressly provided in this Agreement, interest shall
be payable by either party on any money which is not paid by it to the
other party under this Agreement by the due date for its payment. That
interest shall accrue and be calculated on a daily basis, both before
and after any judgment, at the rate of 2% above LIBOR with respect to
deposits with a term most nearly corresponding to the time period from
the due date for its payment until the date on which it is actually
paid.
4. COMPLETION
4.1 COMPLETION
Completion shall take place at the offices of the Seller's Lawyers on
the date of this Agreement.
4.2 COMPLETION ARRANGEMENTS
At Completion the Seller and the Purchaser shall deliver all documents
and take all actions listed in Part 1 of Schedule 3 (Completion
arrangements).
4.3 INSURANCE
(a) With effect from the Completion Date the Seller shall be entitled
to terminate any insurances maintained by any member of the
Seller's Group in relation to the Company or the Far East
Business and the Purchaser shall be responsible for arranging all
necessary insurances in respect of the Company and the Far East
Business.
(b) With effect from the Indian Completion Date the Seller shall be
entitled to terminate any insurances maintained by any member of
the Seller's Group in
16
relation to the Indian Business and with effect from the Indian
Completion Date the Purchaser shall be responsible for arranging all
necessary insurances in respect of the Indian Business.
4.4 RISK AND TITLE
Risk and title in respect of the Shares, the Contracts and the Far
East Business shall transfer to the Purchaser on Completion.
5. INDIAN COMPLETION
5.1 INDIAN COMPLETION
Indian Completion shall take place at the offices of the Seller's
Lawyers (or such other place agreed between the parties):
(a) 5 Business Days after all of the Conditions have been duly
fulfilled or duly waived in accordance with Clause 5.4 (Waiver);
or
(b) on the Indian Long Stop Date,
whichever is the earlier to occur.
5.2 CONDUCT UNTIL INDIAN COMPLETION
The Seller and the Purchaser shall from the date of this Agreement
until Indian Completion comply with the obligations set out in and
procure that the Indian Business is conducted in accordance with the
provisions of Schedule 10 (Conduct of the Indian Business until Indian
Completion).
5.3 INDIAN COMPLETION ARRANGEMENTS
At Indian Completion the Seller and the Purchaser shall deliver all
documents and take all actions listed in Part 2 of Schedule 3
(Completion arrangements).
5.4 WAIVER
The Seller shall be entitled to waive Conditions 1, 2 or 3 of
Condition A. The Purchaser shall be entitled to waive Condition 5 of
Condition A. Condition 4 of Condition A may only be waived by both the
Purchaser and the Seller. Any waiver under this Clause 5.4 shall be in
writing.
5.5 NOTIFICATION
Upon either party becoming aware of any of the Conditions being
fulfilled, delayed in fulfilment or becoming incapable of fulfilment,
the party so becoming aware shall immediately notify the other party
and shall supply to the other party written evidence (if available) of
the fulfilment of the relevant Condition or (as the case may be), an
explanation for the delay or non-fulfilment.
17
5.6 RISK AND TITLE
Risk and title in respect of the Indian Business shall transfer to the
Purchaser on Indian Completion.
6. JOINT ACCOUNT
6.1 OPERATION IN ACCORDANCE WITH LETTER OF INSTRUCTIONS
The Joint Account will be operated jointly by the Seller's Lawyers and
the Purchaser's Agent in accordance with the Letter of Instructions
which shall be delivered to the Seller's Lawyers and the Purchaser's
Agent at Completion signed by the Seller and the Purchaser.
6.2 PARTIES TO GIVE PROPER WRITTEN INSTRUCTIONS
The Seller and the Purchaser agree that upon either or both of them
becoming entitled to payment of any amount out of the Joint Account in
accordance with the terms of this Agreement they shall promptly after
the date such entitlement arises give joint written instructions to
the Seller's Lawyers and the Purchaser's Agent in the form set out in
schedule 1 (Written notice) to the Letter of Instructions to release
such amount from the Joint Account to the Seller or the Purchaser as
the case may be and each of the Seller and the Purchaser shall
indemnify the other from and against any Losses the other may incur as
a result of the Seller or the Purchaser (as the case may be) failing
to comply with its obligations under this Clause.
6.3 NO PAYMENTS OUT OF JOINT ACCOUNT
No amount (including interest) shall be paid out of the Joint Account
save as expressly permitted under this Agreement or the Letter of
Instructions.
6.4 INTEREST
Any interest which accrues on the monies held in the Joint Account
shall (after any required deductions on account of taxation on
interest by either or both of the Seller's Lawyers and the Purchaser's
Agent in accordance with the Letter of Instructions) be credited to
the Joint Account and shall be added to the monies then standing to
the credit of the Joint Account. Upon the whole or any part of the
principal amount standing to the credit of the Joint Account being
released to either party the recipient shall be entitled to interest
which has accrued on the principal amount(s) so released and such
interest shall be paid at the same time as the principal amount is so
released.
6.5 PAYMENT FROM JOINT ACCOUNT
If the Purchaser wishes to use the Escrow Amount in settlement of a
Claim:
(a) the Purchaser shall give to the Seller notice in writing of its
intention to seek satisfaction of the Claim from the Escrow
Amount from the Joint Account;
(b) within 15 Business Days after receipt of a notification of a
Claim in accordance with Clause 6.5(a) above the Seller shall
give the Purchaser notice stating:
18
(i) whether or not it accepts liability for the Claim; and
(ii) if the Seller accepts liability in accordance with this
Clause 6.5(b) whether or not the Seller accepts all or part
of the Amount Claimed;
(c) if the Seller fails to give notice in accordance with Clause
6.5(b) above the Amount Claimed or, if less, the remaining
balance of the Joint Account shall be paid from the Joint Account
to the Purchaser;
(d) if and to the extent that the Seller accepts liability or it is
Finally Determined that the Seller is liable in respect of the
whole or part of the Amount Claimed, the Seller and the Purchaser
shall procure that the Amount Claimed or (as appropriate) that
part of the Amount Claimed which is accepted or Finally
Determined shall be paid from the Joint Account to the Purchaser;
(e) on the Retention Release Date there shall be paid to the Seller
(or as the Seller may direct) from the Joint Account the Escrow
Amount less any Unsatisfied Amounts Claimed in respect of all
Claims which shall be retained in the Joint Account provided that
in the event that the aggregate Amount Claimed in respect of
Claims which comprise claims under the Warranties do not exceed
(pound)1,000,000 there shall be paid to the Seller (or as the
Seller may direct) on the Retention Release Date any Amounts
Claimed in respect of such claims under the Warranties; and
(f) if at any time after the Retention Release Date the amount of the
Escrow Amount exceeds the Unsatisfied Amounts Claimed in respect
of all Claims the excess shall be paid to the Seller (or as the
Seller may direct) from the Joint Account.
6.6 AMOUNTS PAID ON ACCOUNT
If and to the extent that a payment to the Purchaser out of the Joint
Account in respect of a Claim is less than the Amount Claimed it shall
be a payment on account of such Claim and the Seller shall remain
liable in accordance with the terms of this Agreement for any of the
amount agreed or Finally Determined to be payable in respect of the
remainder of such Claim.
7. CONTRACTS
7.1 FULFILMENT OF CONTRACTS
Subject to Clause 7.2 (Third party consents), the Purchaser shall
after Completion perform for its own account and fulfil, observe and
be bound by the terms of the Contracts.
7.2 THIRD PARTY CONSENTS
The Seller shall use its best endeavours and the Purchaser shall use
its reasonable endeavours to procure that after Completion the other
parties to the Contracts shall, where that consent is necessary,
consent to the substitution of the Purchaser or another member of the
Purchaser's Group in place of the Seller or, where applicable, any
other
19
member of the Seller's Group, as a party to the relevant Contract
(whether by contract, assignment, novation or otherwise):
(a) provided that if that consent is not obtained or until it is
obtained, the Seller or, where applicable, a member of the
Seller's Group, shall hold the relevant Contract and any monies,
goods or other benefits received under the Contract as trustee
for the Purchaser and shall, promptly following receipt of the
same, account for and pay or deliver them to the Purchaser;
(b) provided that if that consent is not obtained or until it is
obtained and if the Seller or, where applicable, a member of the
Seller's Group, shall comply with the provisions of Clause 7.2(a)
above, to the extent permitted by the relevant Contract the
Purchaser shall benefit from and shall perform the relevant
Contract as subcontractor for the Seller or, where applicable, a
member of the Seller's Group and the Purchaser shall indemnify
the Seller for itself and where applicable as trustee for each
member of the Seller's Group against or reimburse the Seller or,
where applicable, a member of the Seller's Group for all Losses
incurred by the Seller or, where applicable, a member of the
Seller's Group in relation to the performance or failure to
perform the relevant Contract by the Purchaser or the Company
after the Completion Date;
(c) provided that if that consent is obtained but the Seller or a
member of the Seller's Group retains any liability in respect of
the period after Completion under any of the Contracts the
Purchaser shall indemnify the Seller or, where applicable, a
member of the Seller's Group against or reimburse the Seller or,
where applicable, a member of the Seller's Group for all Losses
incurred by the Seller or, where applicable, a member of the
Seller's Group in relation to the performance or failure to
perform the Contracts by the Purchaser or the Company after the
Completion Date; and
(d) in relation to the Qualcomm Contract, the Purchaser shall
indemnify the Seller against or reimburse the Seller for, all
Losses incurred after Completion by the Seller or any other
member of the Seller's Group in relation to the performance or
failure to perform the Qualcomm Contract by the Purchaser or the
Company after the Completion Date, including for the avoidance of
doubt, the making of any payments thereunder.
8. EMPLOYEES
8.1 PROVISION OF INFORMATION
(a) As soon as practical following Completion and in any event within
15 Business Days before Indian Completion, the Seller shall
provide the Purchaser with (or shall procure the provision to the
Purchaser of) all information relating to the Indian Employees as
it may require in order to comply with its obligations under
Clauses 8.2 (Purchaser to make offer) including a list of those
employees of the Indian Seller working in the Indian Business at
that time and their then current terms and conditions of
employment.
(b) The Seller confirms and agrees that it has provided the Purchaser
with all information relating to the Far East Employees as it may
require in order to
20
comply with its obligations under Clause 8.2 (Purchaser to make offer)
including a list of those employees of the Far East Seller working in
the Far East Business at Completion and their current terms and
conditions of employment.
8.2 PURCHASER TO MAKE OFFER
(a) Subject to the Seller complying with its obligations under Clause
8.1, at least three Business Days prior to the Indian Completion
the Purchaser shall, or shall procure that the relevant member of
the Purchaser's Group shall, make an offer on the terms set out
in Clause 8.3 (Terms of offer) (which shall be conditional solely
on Indian Completion occurring) by letter to each Indian Employee
(other than to those under notice of termination of employment
(for whatever reason) at the time the Purchaser (or the relevant
member of the Purchaser's Group) makes its offer) to employ him
under a new contract of employment to commence immediately after
Indian Completion. The Seller shall or shall procure that the
relevant member of the Seller's Group shall require the Indian
Employees to indicate their acceptance of the offer by signing
and returning a copy of the offer letter to the Purchaser (or the
relevant member of the Purchaser's Group). In connection with
making such offers, the Purchaser (or the relevant member of the
Purchaser's Group) shall, with effect from the Indian Completion
Date, in respect of the Indian Employees, as may be applicable:
(i) comply in all material respects with its duties and
obligations under the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ in
respect of the Indian Employees, including complying with
Section 25FF of that Act; and
(ii) comply with all other material applicable statutory
enactments, rules and regulations in respect of the employer
of the Indian Employees.
(b) Subject to the Seller complying with its obligations under Clause
8.1, the Purchaser shall, or shall procure that the relevant
member of the Purchaser's Group shall, at Completion or as soon
as reasonably practicable thereafter, make an offer on the terms
set out in Clause 8.3 (Terms of offer) by letter to each Far East
Employee (other than to those under notice of termination of
employment (for whatever reason) at the time the Purchaser (or
the relevant member of the Purchaser's Group) makes its offer) to
employ him under a new contract of employment to commence with
effect from Completion or as soon as reasonably practicable
thereafter (the "TRANSFER DATE").
(c) The Seller undertakes to (and shall procure that the Indian
Seller or the Far East Seller (as the case may be) and each other
member of the Seller's Group shall) provide all assistance to the
Purchaser and the relevant member of the Purchaser's Group to
enable it to comply with its obligations under this Clause 8.2
and Clause 8.3 (Terms of offer).
8.3 TERMS OF OFFER
The offer by the Purchaser (or the relevant member of the Purchaser's
Group) made under Clause 8.2 (Purchaser to make offer) will be such
that the provisions of the new contract as to the continuity of
service and as to other terms and conditions of his or
21
her contract of employment having regard to any relevant local
employment legislation or rules will be no less favourable than the
corresponding provisions of his or her contract of employment as
existing immediately before such offer is made as the same have been
supplied by the Seller under Clause 8.1 (Provision of information),
save as to the identity of the employer. Subject at all times to their
obligations in this Clause 8 (Additional Employees), the parties agree
that, in connection with the operation of the business in the ordinary
course the Purchaser and the members of the Purchaser's Group shall be
entitled to take or omit to take any action they deem necessary in the
exercise of their business judgement.
8.4 SELLER TO PROCURE WAIVER
(a) Two Business Days before the offer of employment is made to an
Indian Employee by the Purchaser (or the relevant member of the
Purchaser's Group) in accordance with Clause 8.2 (Purchaser to
make offer), the Seller (or the relevant member of the Seller's
Group) shall deliver a letter to each Indian Employee to whom
such an offer is to be made advising them of the background to
and reasons for such offer of employment.
(b) If an Additional Employee wishes to accept the offer made in
accordance with Clause 8.2 (Purchaser to make offer), then the
Seller shall procure that the Indian Seller or the Far East
Seller (as the case may be) shall with immediate effect waive any
requirement on the Additional Employee to give any period of
notice of termination of his or her employment to the Indian
Seller or the Far East Seller (as the case may be) so as to allow
the relevant Additional Employee to commence employment with the
Purchaser or the relevant member of the Purchaser's Group at and
with effect from the Indian Completion in relation to the Indian
Employees and at the Transfer Date in relation to the Far East
Employees.
8.5 INDEMNITY
(a) Subject to Clause 8.5(b) and (c), the Seller hereby indemnifies
the Purchaser (acting for itself and as agent or trustee on
behalf of the Indian Purchaser in respect of the Indian Employees
and the Far East Purchaser in respect of the Far East Employees)
against all Losses in connection with any of the Additional
Employees arising directly or indirectly from:
(i) the Seller's failure to comply with its obligations under
Clauses 8.1 (Provision of information), 8.2 (Purchaser to
make offer) and 8.4 (Seller to procure waiver) prior to on
or after the Completion Date; and
(ii) any Additional Employee opposing at any time or making any
claim in relation to or in connection with the Purchaser's
or any relevant member of the Purchaser's Group's offer of
employment to any Additional Employee or refusal by the
Additional Employee thereof provided that such Losses shall
not include loss of profits or opportunity of or any
negative commercial impact on the Business as a result of
the relevant Additional Employee opposing or refusing the
Purchaser's or any relevant member of the Purchaser's
Group's offer of employment.
22
(b) Subject to the Seller complying with its obligations under Clause
8.1, Clause 8.5(a) will not apply unless the Purchaser has
complied with its obligations in Clause 8.2 (Purchaser to make
offer).
(c) The Purchaser or relevant member of the Purchaser's Group will
comply with the provisions of Paragraph 6 (Conduct of Claims) of
Schedule 5 (Limitation on claims) in relation to any opposition
from or claim made by an Additional Employee in relation to or in
connection with the Purchaser's or any relevant member of the
Purchaser's Group's offer of employment to any Additional
Employee.
8.6 MISCELLANEOUS
(a) To the extent not included in creditors or accruals in the
Completion Net Asset Statement, the Seller shall be liable to pay
to the Additional Employees all amounts due and payable or
becoming due and payable to them up to the date of Completion (in
relation to the Far East Employees) and Indian Completion (in
relation to the Indian Employees), pursuant to the terms of
employment and statutory provisions by way of wages, salary,
bonus, gratuity, pension and settlement of any employment-related
claims (including existing claims arising out of employee related
litigation, if any) and the Purchaser shall be liable for such
amounts in respect of the Far East Employees in respect of the
period commencing on the Completion Date and ending on and
including the Transfer Date (if later than the Completion Date).
For the avoidance of doubt it is clarified that any claims made
by the Additional Employees following the Transfer Date (in
relation to the Far East Employees) or Indian Completion (in
relation to the Indian Employees), but relating to any such
amounts payable by the relevant member of the Seller's Group for
the period prior to the Transfer Date (in relation to the Far
East Employees) or Indian Completion (in relation to the Indian
Employees), shall be borne by the Seller.
(b) The Seller and Purchaser (or the relevant member of the
Purchaser's Group) shall, as soon as practicable after Completion
in respect of the Far East Employees and as soon as practicable
after the Indian Completion in respect of the Indian Employees,
take all steps as may be necessary to transfer the amounts
accumulated for the benefit of the Additional Employees in
accordance with applicable law (including in respect of the
employee benefit funds for the benefit of the Indian Employees
being transferred pursuant to this Agreement) on the basis of
actuarial valuation in respect of the Additional Employees (which
accumulations are held on trust by the trustees of each of the
employee benefit funds for the benefit of the Additional
Employees) to the funds to be constituted by the Purchaser or the
relevant member of the Purchaser's Group.
(c) References to "Additional Employees" in Clauses 8.6(a) and (b)
only relate to and apply to those Additional Employees that
accept an offer of employment made by the Purchaser (or a member
of the Purchaser's Group) pursuant to Clause 8.2 (Purchaser to
make offer).
(d) The Seller is liable to pay to the Additional Employees that do
not accept an offer of employment made by the Purchaser
23
(or a member of the Purchaser's Group) pursuant to Clause 8.2
(Purchaser to make offer) all amounts due and payable or becoming due
and payable to such Additional Employees after Completion pursuant to
the terms of employment and statutory provisions by way of wages,
salary, bonus, gratuity, pension and settlement of any
employment-related claims (including existing claims arising out of
employee related litigation, if any) or otherwise.
8.7 TUPE TRANSFER 2000
The Seller hereby indemnifies the Purchaser (acting for itself and as
agent or trustee on behalf of the Company) against any and all Losses
in connection with any finding or allegation that the application of
the Transfer of Undertakings (Protection of Employment) Regulations
1981 to the employment of any person who transferred to the Company
from PA Consulting Group Limited on 1 January 2000. This indemnity
shall apply to Company Employees only to the extent such regulations
entitle any such employee to terms and conditions or any other payment
or benefit different or in addition to those disclosed in relation to
such Company Employees in the Disclosure Letter against Warranty set
out in Paragraph 17.1 of Schedule 4 (Warranties).
8.8 SELLER'S INDEMNITY RE. CONTRACTS
The Seller hereby indemnifies the Purchaser (acting for itself and as
agent or trustee on behalf of the Company) against any and all Losses
arising out of or in connection with the transfer or novation of the
Contracts to the Purchaser or the Company amounting to a relevant
transfer under the Transfer of Undertakings (Protection of Employment)
Regulations 1981 ("the Regulations").
8.9 EXCLUDED EMPLOYEES
If any contract of employment of any past or present employee of the
Seller or any member of the Seller's Group (excluding any Company
Employee) engaged in or assigned to the Contracts has effect after
Completion as if originally made between the Purchaser or the Company
and the employee concerned as a result of the Regulations:
(a) the Purchaser may (or may procure that the Company), upon
becoming aware of any such contract, terminate it forthwith;
(b) the Seller hereby indemnifies the Purchaser (acting for itself
and as agent or trustee on behalf of the Company) against all
Losses arising out of such termination including without
limitation such sums payable to, or on behalf of, such employee
in respect of his employment whether arising before on or after
Completion;
(c) the Seller hereby indemnifies the Purchaser (acting for itself
and as agent or trustee of behalf of the Company) against any and
all Losses arising in connection with or as a result of any claim
arising in connection with the transfer to the Purchaser or the
Company of the Contracts (including any individual entitlement of
an employee under or consequent upon such claim) by any trade
union, staff association (whether or not recognised by the Seller
or any member the Seller's Group in respect of all or any of its
employees) or by any other representatives (within the meaning of
Regulation 10 of the
24
Regulations) arising from or in connection with any failure by the
Seller or any member of the Seller's Group to comply with any legal
obligation to such trade union, staff association or employee
representatives (in his capacity as an employee representative)
whether under Regulation 10 of the Regulations or otherwise whether
any such claim arises or has its origin before on or after Completion.
9. WARRANTIES
9.1 WARRANTIES
As at the date of this Agreement, the Seller warrants to the Purchaser
in the terms set out in Schedule 4 (Warranties) on the basis that the
Warranties are given to the Purchaser acting for itself and as agent
or trustee for the Indian Purchaser and the Far East Purchaser.
9.2 LIMITATIONS ON CLAIMS
The liability of the Seller under the Warranties shall (except in the
case of fraud) be limited as set out in Schedule 5 (Limitations on
claims).
9.3 STATUS OF WARRANTIES
Subject to Clause 9.4 (Certain Warranties specific), the Seller agrees
that each of the Warranties is separate from and independent of any
other Warranty and (except as otherwise provided in this Agreement)
shall not be limited by any other provision of this Agreement.
9.4 CERTAIN WARRANTIES SPECIFIC
The only Warranties given:
(a) in respect of Intellectual Property and licences of Intellectual
Property are those set out in Schedule 4, Paragraph 11
(Warranties) and the other Warranties shall be deemed not to be
given in relation to Intellectual Property and licences of
Intellectual Property;
(b) in respect of employment matters including pensions and other
benefits are those set out in Schedule 4, Paragraph 17
(Warranties) and the other Warranties shall be deemed not to be
given in relation to employment matters including pensions and
other benefits (subject to Clause 9.4(e) below);
(c) in respect of the Properties subject to sub paragraph (e), are
those set out in Schedule 4, Paragraph 18 (Warranties) and the
other Warranties shall be deemed not to be given in relation to
the Properties;
(d) in respect of Tax are the Tax Warranties and the other Warranties
shall be deemed not to be given in relation to Tax; and
(e) in respect of the Environment, Environmental Laws, Environmental
Permits and health and safety are those set out in Schedule 4,
Paragraphs 15 and 20 (Warranties) and the other Warranties shall
be deemed not to be given in
25
relation to the Environment, Environmental Laws, Environmental
Permits or health and safety.
9.5 NO RIGHT OF RESCISSION
The sole remedy of the Purchaser for breach of the Warranties shall be
damages and the Purchaser acknowledges that it shall have no right to
rescind this Agreement after Completion in any circumstances (save in
the event of fraud) and irrevocably waives any other remedies it may
have in relation to a breach of the Warranties.
9.6 MEANING OF "SO FAR AS THE SELLER IS AWARE"
If any of the Warranties are expressed to be given "so far as the
Seller is aware" or "to the best of the knowledge information and
belief of the Seller" (or words to that effect) then such words shall
mean to the best of the Seller's knowledge, information and belief it
having made all reasonable enquiries. Reasonable enquiries for these
purposes means due, diligent and careful enquiry of each of Bjorn
Krylander, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ and, in relation only to the Warranties set out in
Schedule 4, Paragraph 17 (Warranties), ▇▇▇▇▇ ▇▇▇▇▇ and, in each case
any supplemental enquiries arising therefrom that it would be
reasonable to make.
10. PURCHASER'S WARRANTIES
The Purchaser warrants to the Seller that:
(a) the Purchaser has full power to enter into and perform this
Agreement, the Deed of Tax Covenant and this Agreement and the
Deed of Tax Covenant will, on entry by the Purchaser into such
agreements, each constitute valid and binding obligations on the
Purchaser in accordance with their respective terms;
(b) the Purchaser is entering into this Agreement on its own behalf
and not on behalf of any other person; and
(c) the execution and delivery of, and the performance by the
Purchaser of its obligations under this Agreement and the Deed of
Tax Covenant will not:
(i) result in a breach of any provision of its memorandum or
articles of association;
(ii) result in a breach of any order, judgment or decree of any
court or governmental agency to which the Purchaser is a
party or by which the Purchaser is bound; or
(iii)require the Purchaser to obtain any consent or approval of
its shareholders or any other material third party consent.
11. GUARANTEES
11.1 RELEASE
The Purchaser undertakes to the Seller (for itself and as trustee for
any member of the Seller's Group) that, following Completion and
subject to Clause 11.2 (Assistance), it
26
will use its reasonable endeavours to procure the release of the
Seller or the relevant member of the Seller's Group from any
obligations or liabilities it has under any of the Guarantees as soon
as reasonably practicable after Completion and pending such release
shall indemnify and keep the Seller or the relevant member of the
Seller's Group indemnified against any Losses arising under those
Guarantees relating to events, facts or circumstances arising in
connection with the conduct of the Business after Completion.
11.2 ASSISTANCE
The Seller undertakes to provide to the Purchaser (and shall procure
that each member of the Seller's Group shall provide to the Purchaser)
at its own cost all assistance and co-operation as may be required by
the Purchaser in connection with the performance of its obligations
under Clause 11.1 (Release).
12. RESTRICTIONS ON SELLER
12.1 SELLER'S COVENANT
The Seller undertakes to the Purchaser that during the period of three
years from the Completion Date it shall not, and the Seller shall
procure that no member of the Seller's Group shall, whether by itself,
through its agents or otherwise and whether on its own behalf or on
behalf of any other person, directly or indirectly:
(a) facilitate, carry on or be engaged, concerned or interested in
carrying on any Restricted Business or enter into any joint
venture, alliance or other corporate partnering arrangement which
engages in any Restricted Business, or act as consultant or
advisor to or otherwise assist any person that carries on a
Restricted Business, in each case in the Restricted Area;
(b) solicit or entice away from the employment of the Company, the
Indian Business or the Far East Business any Employee; or
(c) otherwise than in the ordinary course of business take any action
that could reasonably be expected to interfere with the supply of
goods or services to the Business from any Supplier where such
interference inhibits the supply of such goods or services to the
Business.
12.2 PERMITTED ACTIVITIES
The Purchaser agrees that nothing in this Clause 12 shall prevent the
Seller or any other member of the Seller's Group from:
(a) being or becoming a holder of securities and/or debentures
representing not more than a 5% interest in any one company; or
(b) acquiring all of, or an interest in excess of 5% in, the
business, assets or shares of any company or group of companies
which carries on a Restricted Business or any part of such
Restricted Business in the Restricted Area provided that:
(i) the acquisition of the Restricted Business is not the
principal reason for the acquisition of such business,
assets or shares; and
27
(ii) the Restricted Business does not constitute 5% or more of
the business or assets so acquired or the business or assets
of the company or group of companies so acquired or if it
does constitute more than such 5% it does not generate more
than (pound)1,370,000 of revenue per annum and provided
further that in the event that such business or assets shall
constitute such 5% or more and it generates more that
(pound)1,370,000 of revenue per annum the Seller shall not
be under any liability under this Clause 12 if within the
period of 12 months from such acquisition the Seller or the
relevant member of the Seller's Group shall have disposed of
or otherwise ceased to operate such business; or
(c) being or continuing to be engaged, concerned or interested
(whether alone or in association with any person, firm or
company) in any business or activity in which it or any of them
is engaged, concerned or interested at Completion; or
(d) employing under a contract of employment or contract for services
or otherwise any person formerly employed by the Company, the
Indian Business or the Far East Business where:
(i) such person has responded to a bona fide general
advertisement published in the ordinary course without
direct solicitation or encouragement of the person
concerned; or
(ii) the Seller or any other member of the Seller's Group has
approached a recruitment agency and such person is a client
of such agency provided that there has been no direct
solicitation or encouragement of the person concerned; or
(e) whether on its own behalf or on behalf of any other person,
directly or indirectly, facilitating, carrying on or being
engaged, concerned or interested in carrying on, or entering into
any joint venture, alliance or other corporate partnering
arrangement which engages in, or acting as consultant or advisor
to, or otherwise assisting any person that carries on the
development, manufacturing or licensing of, and/or any other
activities in relation to:
(i) handset reference designs, protocol software and
systems-on-chip solutions; and
(ii) verification scripts and systems to enable acceptance
testing of any of the above, such acceptance testing being
carried out on a standalone basis and/or when any of the
above is integrated into a product; or
(f) licensing, sub-licensing or assigning any Intellectual Property
except as restricted by the IP Licence; or
(g) carrying on the Indian Business in accordance with each of
Schedule 10 and the Transitional Services Agreement until Indian
Completion.
12.3 REASONABLE RESTRICTIONS
For the purposes of this Clause 12, the Purchaser contracts as trustee
and agent of each member of the Purchaser's Group. The parties
acknowledge that the restrictions
28
contained in Clause 12.1 (Seller's covenant) are fair and reasonable
restrictions having regard to the acquisition by the Purchaser of the
Shares and the Assets.
12.4 SEVERABILITY
The obligations undertaken pursuant to Clause 12.1 (Seller's covenant)
shall, with respect to each member of the Purchaser's Group,
constitute an entirely separate and independent covenant by and
restriction on the Seller. The Purchaser and the Seller agree that if
any such restrictions, by themselves, or taken together, shall be
adjudged to go beyond what is reasonable in all the circumstances for
the protection of the legitimate interests of the Company or any
member of the Purchaser's Group, but may be adjudged reasonable if
part or parts of the wording thereof were deleted, or the area of
operation or the period of application reduced, such restriction shall
apply with such modifications as may be necessary to make the covenant
valid and effective.
12.5 RIGHT OF FIRST REFUSAL
In the event the Seller (or the relevant member of the Seller's Group)
is obliged to sell a Restricted Business by virtue of Clause
12.2(b)(ii) (Permitted activities):
(a) the Seller shall (or shall procure that the relevant member the
Seller's Group shall) negotiate with the Purchaser with a view to
selling to the Purchaser such Restricted Business on arms length
fair market value terms; and/or
(b) in the event that the Seller receives an offer for such
Restricted Business from a third party, the Seller shall procure
that the Purchaser, as a right of first refusal, is given the
opportunity to match the price and all other material terms of
that third party offer for such Restricted Business within a
period of 10 Business Days after receiving notice thereof from
the Seller, and in the event the Purchaser enters into a binding
agreement to so match such third party offer within a further
period of 10 Business Days after the Seller receives notice that
the Purchaser will match such offer, the Seller shall sell, or
procure that the relevant member of the Seller's Group sells, to
the Purchaser such Restricted Business on the relevant terms and
if such binding agreement has not been entered within such 10
Business Day period the Seller shall be free to sell such
Restricted Business to the third party
13. ASBESTOS INDEMNITY
13.1 The Seller covenants to pay the Purchaser an amount equal to any and
all Asbestos Health Losses to the extent that a claim for such
Asbestos Health Losses under any applicable Employer's Liability
Insurance Policy has not resulted in payment or reimbursement to the
Company and/or the Purchaser and/or any member of the Purchaser's
Group of the Asbestos Health Losses under the Employer's Liability
Insurance Policies following the use by the Company of all reasonable
endeavours to pursue such claim.
13.2 The Seller shall only make payment to the Purchaser in respect of
claims for Asbestos Health Losses to the extent that such claims are
not insured under the Employer's Liability Insurance Policies
(including for the avoidance of doubt as a result of a breach of
policy term, condition, condition precedent or warranty or as a result
of a misrepresentation or material non disclosure prior to the
Completion Date on behalf
29
of the Seller, the Company or a member of the Seller's Group)
following the use by the Company of all reasonable endeavours to
pursue such claims provided that nothing in this Clause 13.2 shall
affect the operation of Clause 13.3.
13.3 If any insurer makes any payment of a sum in connection with any
Asbestos Illness under any insurance policy, which but for such
insurance policy would have been an Asbestos Health Loss, directly to
a Relevant Company Employee (or their estate or family) or such other
person making a claim in relation to such an Asbestos Illness but then
seeks recovery, reimbursement or repayment ("RECOVERY") of part or all
of such payment from the Company and/or the Purchaser and/or any
member of the Purchaser's Group, such party being an "Interested
Party", the Seller covenants to pay the Purchaser an amount equal to
any such payment successfully Recovered by the insurer from the
Company and/or the Purchaser and/or the Purchaser's Group following
the use by the Company and/or the Purchaser and/or the relevant member
of the Purchaser's Group where they are an Interested Party of all
reasonable endeavours to resist and defend any such claim by an
insurer.
13.4 The Seller shall co-operate with all reasonable requests for
information or documents (including, but not limited to, the identity
of relevant insurers, requests for copies of relevant certificates or
policy wordings in relation to the Employer's Liability Insurance
Policies, Relevant Company Employee records and contact details) made
by or on behalf of the Company, the Purchaser and/or any relevant
member of the Purchaser's Group arising out of or in connection with
any claim under the Employer's Liability Insurance Policies save that
nothing in this Clause 13.4 shall require the Seller to provide
information or documents the provision of which is prohibited, or to
the extent restricted, under law or where such information or
documents are legally privileged.
14. ANNOUNCEMENTS AND CONFIDENTIALITY
14.1 NO ANNOUNCEMENTS WITHOUT PRIOR APPROVAL
The parties mutually agree that, save as provided for in Clause 14.2
(Announcement exceptions), no press or other public announcements
(whether to shareholders, employees, customers, suppliers or
otherwise) shall be made or sent out by any of them in respect of the
sale and purchase of the Company or the Assets or any ancillary matter
without the text of the announcement receiving the prior written
approval of the Purchaser (in the case of the Seller) or the Seller
(in the case of the Purchaser) (such approval not to be unreasonably
withheld or delayed).
14.2 ANNOUNCEMENT EXCEPTIONS
Either party may make or send out any press or public announcement to
the extent the announcement is required by:
(a) the law of any relevant jurisdiction; or
(b) any securities exchange or regulatory or governmental body to
which that party is subject or submits, wherever situated,
whether or not the requirement for information has the force of
law,
30
in which case, the party concerned shall take all steps as may be
reasonable and practicable in the circumstances to consult with, and
take into account any reasonable requirements of the other party prior
to making any such announcement.
14.3 CONFIDENTIALITY
Subject to Clauses 14.1 (No announcements without prior approval) and
14.2 (Announcement exceptions), either of the parties shall, and shall
procure that the other members of their respective Groups shall, treat
as strictly confidential all information received or obtained as a
result of entering into or performing this Agreement which relates to:
(a) the provisions of this Agreement or the other documents referred
to in this Agreement;
(b) the negotiations relating to this Agreement; or
(c) the other party.
Without limiting the above, the Purchaser shall, and shall procure
that the Company shall, treat the Retained Data as strictly
confidential and the Seller shall treat the Business Data as strictly
confidential.
14.4 CONTROL OF DATA
In relation to any Business Data in the Seller's possession after
Completion, the Company shall be the data controller, the Seller shall
be a data processor and the Seller shall only process the Business
Data in accordance with the Company's instructions. In relation to any
Retained Data in the Purchaser's or Company's possession after
Completion, the Seller shall be the data controller, the Purchaser and
Company shall be data processors and the Purchaser shall, and shall
procure that the Company shall, only process the Retained Data in
accordance with the Seller's instructions. Each party intends that
data relating to the other party's Group be completely removed from
their own IT system as soon as reasonably practicable but in any event
by no later than six months after Completion and each shall therefore
take all reasonable steps to achieve this.
14.5 CONFIDENTIALITY EXCEPTIONS
Either of the parties may disclose information referred to in Clause
14.3 (Confidentiality) which would otherwise be confidential if and to
the extent the disclosure is:
(a) required by law or judicial proceedings;
(b) required by any securities exchange or regulatory or governmental
body to which the disclosing party is subject or submits,
wherever situated, whether or not the requirement for disclosure
has the force of law;
(c) required to enable the party concerned to enforce its rights
under this Agreement;
(d) disclosed on a strictly confidential basis to:
31
(i) the professional advisers, auditors or bankers of that party
or other any member of the Seller's Group (in the case of
the Seller) or any other member of the Purchaser's Group (in
the case of the Purchaser);
(ii) the officers or employees of that party or any other member
of the Seller's Group (in the case of the Seller) or any
other member of the Purchaser's Group (in the case of the
Purchaser) who need to know the information for the purposes
of the transactions effected or contemplated by this
Agreement;
(e) of information that has already come into the public domain
through no fault of that party; or
(f) following the receipt of the prior written approval of the other
party (such approval not to be unreasonably withheld or delayed),
provided that any information disclosed pursuant to Clause 14.5(a) or
(b) shall be disclosed after the party concerned has taken all steps
as may be reasonable and practicable in the circumstances to consult
with, and take into account any reasonable requirements of, the other
party prior to making any such disclosure.
14.6 NO LIMIT IN TIME
The restrictions contained in this Clause 14 shall continue to apply
after Completion without limit in time.
14.7 NO PREJUDICE TO CONFIDENTIALITY AGREEMENT
This Clause 14 shall be without prejudice to the provisions of the
Confidentiality Agreement, which shall continue in full force and
effect despite Completion.
15. COSTS
15.1 COSTS
Each party shall be responsible for all the costs, charges and
expenses incurred by it in connection with and incidental to the
preparation and completion of this Agreement, the other documents
referred to in this Agreement and the sale and purchase under this
Agreement. Subject to the other provisions of this Agreement, the
Seller shall be responsible for and shall pay all costs incurred by
the Company, the Indian Seller, the Far East Seller or any member of
the Purchaser's Group in connection with and incidental to the
transfer of any of the Additional Employees or any of the Assets to
the Purchaser or any other member of the Purchaser's Group and
effecting the assignment, novation or transfer of any of the Contracts
to the Company. The Purchaser shall pay all stamp duty, stamp duty
reserve tax and stamp duty land tax (and any associated interest and
penalties) payable in respect of the transfer of the Assets and the
Shares.
32
15.2 NO WITHHOLDING
All sums payable under this Agreement or any Local Agreement shall be
made in full without any set off, restriction, condition, deduction or
withholding whatsoever save only as may be required by law.
15.3 GROSS UP IF A WITHHOLDING REQUIRED BY LAW
If any deduction or withholding is required by law from any payment
made under this Agreement or any Local Agreement then, except in
relation to interest, the party making the payment shall be obliged to
pay the other party such additional sum as will, after such deduction
or withholding has been made, leave the other party with the same
amount as it would have been entitled to receive in the absence of any
such requirement to make a deduction or withholding.
15.4 GROSS UP IF PAYMENT CHARGED TO TAX
If any Tax Authority brings into charge to Tax any sum paid by a party
to any other party under this Agreement or any Local Agreement then,
except in relation to interest, the amount so payable shall be grossed
up by such amount as will ensure that, after payment of the Tax so
charged, there will be left a sum equal to the amount that would
otherwise have been payable had the sum in question not been so
charged to Tax.
15.5 REIMBURSEMENT OF CONSEQUENTIAL BENEFIT
If any party receiving payment under this Agreement or any Local
Agreement also receives, by virtue of the receipt of that payment or
in relation to the matter giving rise to the payment:
(a) a credit for, refund of or relief from any Tax or other monies
payable by it; or
(b) a similar benefit by reason of any deduction or withholding:
(i) for or on account of Tax; or
(ii) by reason of any Tax charged in respect of which there is a
gross up under Clause 15.3 or Clause 15.4,
then that party shall reimburse to the other relevant parties the
amount of such credit, refund, relief, or similar benefit.
15.6 LIABILITY TO GROSS UP NOT TO INCREASE ON ASSIGNMENT
If a party to this Agreement or to any Local Agreement assigns the
benefit of this Agreement or of the relevant Local Agreement, the
other relevant parties shall only be liable to make additional
payments pursuant to Clauses 15.3 or 15.4 to the extent that those
other parties would have been liable to make those payments if no
assignment had occurred.
33
16. ENTIRE AGREEMENT
16.1 ENTIRE AGREEMENT
This Agreement and the other Transaction Documents, together represent
the whole and only agreement between the parties in relation to the
sale and purchase of the Shares and the Assets supersede any previous
agreement whether written or oral between the parties in relation to
that subject matter. Accordingly, all other terms, conditions,
representations, warranties and other statements which would otherwise
be implied (by law or otherwise) shall not form part of this
Agreement.
16.2 NO LIABILITY UNLESS STATEMENT MADE FRAUDULENTLY
The Seller is not liable:
(a) in contract in respect of any representation, warranty or other
statement being false, inaccurate or incomplete (other than
contained in and in accordance with the terms of the Transaction
Documents); or
(b) in equity, tort or under the ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ in
respect of any representation, warranty or other statement
(whether or not contained in this Agreement) being false,
inaccurate or incomplete,
unless in any case it was made fraudulently.
17. 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.
18. INVALIDITY
If any term or provision of this Agreement is held to be illegal,
invalid or unenforceable, in whole or in part, then such term or
provision shall (so far as it is illegal, invalid or unenforceable) be
given no effect and shall be deemed not to be included in this
Agreement but the remainder of this Agreement shall not be affected.
The parties shall then use all reasonable endeavours to replace the
illegal, invalid or unenforceable provision by a valid provision the
effect of which is as close as possible to the intended effect of the
illegal, invalid or unenforceable provision.
19. AMENDMENTS, VARIATIONS AND WAIVERS
19.1 AMENDMENTS
No amendment or variation of the terms of this Agreement, the
Disclosure Letter or the Deed of Tax Covenant shall be effective
unless it is made or confirmed in a written document signed by all of
the parties to the relevant document.
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19.2 WAIVERS
No delay in exercising or non-exercise by any party of any right,
power or remedy under or in connection with this Agreement or any
other document referred to in it shall impair that right, power or
remedy or operate as a waiver or release of it.
20. FURTHER ASSURANCE AND ASSISTANCE
20.1 FURTHER ASSURANCE
Each of the parties shall from time to time at its own cost, on being
required to do so by the other party now or at any time in the future,
do or procure the doing of all such acts and/or execute or procure the
execution of all such documents in a form reasonably satisfactory to
the party concerned as the party concerned may reasonably consider
necessary, whether on or after Completion, for giving full effect to
this Agreement and the other Transaction Documents and securing to it
the full benefit of the rights, powers and remedies conferred upon it
in this Agreement and the other Transaction Documents.
20.2 BOOKS AND RECORDS
Subject to Clause 14.4 (Control of data) the Seller will (and will
procure that all other members of the Seller's Group will) and the
Purchaser will (and will procure that the Company and each other
member of the Purchaser's Group will) retain and preserve all books,
records, documents and information (including information recorded or
retained in any electronic form) of or relating to the Business or the
VPT Business in each case in respect of the period prior to Completion
for a period of 3 years from Completion, or the relevant prescribed
statutory period, whichever is the greater and as from the Completion
Date, each of the Seller and the Purchaser shall give to the other
such access (during normal business hours and on reasonable prior
notice) to such books, records, documents and information as the other
may require including the right to take copies and extracts on
reasonable advance notice within such period save as may otherwise be
provided for in the Transitional Services Agreement.
20.3 AVAILABILITY OF EMPLOYEES
After the Completion Date, the Purchaser shall use its reasonable
endeavours to make available to the Seller the assistance of such of
its and the Business's employees as the Seller may require in
connection with the conduct of proceedings against the Seller or other
members of the Seller's Group and of which such employees have
particular knowledge by virtue of their involvement in the matter
giving rise to those proceedings or otherwise provided that the
Purchaser shall be under no such obligation if:
(a) such proceedings are being brought against the Seller by the
Purchaser; and
(b) it determines acting reasonably that making such employees
available would materially adversely interfere with the carrying
on of the Business.
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20.4 PAYMENT OF IT COSTS
If the aggregate amount taken into account in the Completion Net Asset
Statement (whether as a specific provision or otherwise) in respect of
IT Costs ("PROVIDED FOR IT COSTS") differs from the actual amount paid
after Completion by the Company or any member of the Purchaser's Group
in respect of the IT Costs (the "ACTUAL IT COSTS") then as soon as
reasonably practicable after the Actual IT Costs have been established
to the reasonable satisfaction of the Seller and the Purchaser:
(d) the Seller shall pay to the Purchaser a sum equal to the amount
by which the Actual IT Costs exceed the Provided for IT Costs; or
(e) the Purchaser shall pay to the Seller a sum equal to the amount
by which the Actual IT Costs are less than the Provided for IT
Costs.
20.5 DOMAIN NAME
The Seller shall procure that its employee, ▇▇▇▇ ▇▇▇▇▇▇▇, shall after
Completion, promptly provide to an employee of the Purchaser (as
nominated by the Purchaser) the user identification and password
details relating to the domain name ▇▇▇-▇▇.▇▇▇ and shall take all
reasonable steps to transfer the contact details for that domain name
out of his name and into the name of the Purchaser's nominated
employee.
20.6 PAYMENT OF CERTAIN BONUSES
If the aggregate amount taken into account in the Completion Net Asset
Statement in respect of bonuses or other incentive compensation
payable to Employees as at the Completion Date in connection with
their employment by the Seller, the Far East Seller or the Indian
Seller (as the case may be) prior to the Completion Date ("PROVIDED
FOR BONUS COSTS") differ from the actual aggregate amount paid after
Completion by the Company or any member of the Purchaser's Group in
respect of such bonuses or other incentive compensation (the "ACTUAL
BONUS COSTS"), then as soon as reasonably practical after the Actual
Bonus Costs have been established to the reasonable satisfaction of
the Seller and the Purchaser:
(a) the Seller shall pay to the Purchaser a sum equal to the amount
by which the Actual Bonus costs exceed the Provided for Bonus
Costs; or
(b) the Purchaser shall pay to the Seller a sum equal to the amount
by which the Actual Bonus Costs are less than the Provided for
Bonus Costs.
21. COUNTERPARTS
21.1 ANY NUMBER OF COUNTERPARTS
This Agreement and the other Transaction Documents may be executed in
any number of counterparts and by the parties on separate
counterparts, but shall not be effective until each of the parties has
executed at least one counterpart.
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21.2 EACH COUNTERPART AN ORIGINAL
Each counterpart shall constitute an original of this Agreement or
other Transaction Documents (as the case may be), but all the
counterparts shall together constitute but one and the same
instrument.
22. ASSIGNMENT AND THIRD PARTY RIGHTS
22.1 AGREEMENT BINDING ON SUCCESSORS AND PERMITTED ASSIGNEES
This Agreement and the Deed of Tax Covenant shall be binding on and
enure for the benefit of the successors and permitted assignees of the
parties.
22.2 BENEFIT OF AGREEMENT NOT ASSIGNABLE
The benefit of this Agreement and the Deed of Tax Covenant may not be
assigned, transferred, charged or dealt in (whether by way of
security, trust or otherwise) either in whole or in part to any person
except as provided in Clause 22.3 (Permitted assignments).
22.3 PERMITTED ASSIGNMENTS
Either party (the "ASSIGNING PARTY") may assign all or any of its
rights under this Agreement or the Deed of Tax Covenant, without the
other party's prior written consent, to one or more members of its
Group subject to the condition that the Assigning Party will procure
that, before any assignee subsequently ceases to be a member of their
Group, that assignee shall assign back to the Assigning Party, or to
another member of their Group (which itself shall then be deemed to be
an assignee of the relevant party for the purposes of this clause), so
much of the benefit of this Agreement or the Deed of Tax Covenant (as
the case may be) as has been assigned to it, provided that the
liability of the other party as a result of the assignment shall not
be greater than its liability had no assignment occurred and that any
purported assignment in contravention of this clause shall be void.
22.4 NO RIGHTS OF THIRD PARTIES
A person who is not a party to this Agreement has no right under the
Contracts (Rights of Third Parties) ▇▇▇ ▇▇▇▇ to enforce any term of
this Agreement.
23. NOTICES
All communications relating to this Agreement shall be in writing and
delivered by hand or sent by post or facsimile to the party concerned
at the relevant address shown at the start of this Agreement (or such
other address as may be notified from time to time in accordance with
this clause by the relevant party to the other party). Any
communication shall take effect if delivered, upon delivery; if
posted, at the earlier of delivery and, if sent by first class
registered post, 10.00 a.m. on the second Business Day after posting
and if sent by facsimile, when a complete and legible copy of the
communication, whether that sent by facsimile or a hard copy sent by
post or delivered by hand, has been received at the appropriate
address.
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24. GOVERNING LAW AND JURISDICTION
24.1 GOVERNING LAW
This Agreement shall be governed by and construed in accordance with
English law.
24.2 JURISDICTION
Each party irrevocably submits to the exclusive jurisdiction of the
English courts to settle any dispute which may arise under or in
connection with this Agreement.
EXECUTION
The parties have shown their acceptance of the terms of this Agreement
by executing it after the Schedules.
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[SCHEDULES OMITTED]
EXECUTION:
SIGNED by ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Director, ) /s/▇▇▇▇▇ ▇▇▇▇▇▇▇▇
duly authorised for and on behalf of )
UBINETICS HOLDINGS LIMITED )
SIGNED by ▇▇▇▇▇ ▇▇▇▇▇ , Director, ) /s/▇▇▇▇▇ ▇▇▇▇▇
duly authorised for and on behalf of )
AEROFLEX TEST SOLUTIONS LIMITED )