SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) SEPTEMBER 3, 1998
LYNTON GROUP, INC.
(Exact name of Registrant as specified in its charter)
DELAWARE 0-6867 13-2688055
(State or other (Commission (I.R.S. Employer
jurisdiction of file number) Identification
incorporation or Number)
organization)
9 AIRPORT ROAD
MORRISTOWN MUNICIPAL AIRPORT
MORRISTOWN, NEW JERSEY 07960
(Address of principal (Zip Code)
executive offices)
Registrant's telephone number, including area code: (973) 292-9000
<PAGE>
Item 2. ACQUISITION OR DISPOSITION OF ASSETS.
Pursuant to two Aircraft Sales Agreements among Lynton Group Limited
("Limited"), a company organized under the laws of England and a wholly-owned
subsidiary of the Lynton Group, Inc. (the "Company"), and Air Hanson Limited,
a company organized under the laws of England ("Air Hanson"), Limited acquired
on September 3, 1998 two helicopters owned by Air Hanson for a total
consideration of U.S. $4,168,000.
Pursuant to a Share and Purchase Agreement dated September 3, 1998 (the
"Air Hanson Share and Purchase Agreement") among Limited, Hanson Funding (G)
Limited, the owner of the shares of capital stock of Air Hanson, and Hanson
Finance PLC, Limited acquired on September 3, 1998 all of the issued and
outstanding capital stock of Air Hanson (the "Air Hanson Shares").
The purchase price for the Air Hanson Shares will be calculated by
reference to the net asset value of Air Hanson following the issuance of
audited completion accounts. The price to be paid is subject to a maximum
purchase consideration of 500,000 Pounds Sterling and such amount will become
due on or before November 12, 1998.
The funds used for the above transaction included bank financing
obtained from Bank of Scotland in the principal amount of U.S. $2,500,000
along with additional debt financing obtained through the issuance of
subordinated convertible debentures in the principal amount of U.S. $4,623,000
to certain non-U.S. institutional investors. The surplus funds will be used
as additional working capital facilities within the Company.
Air Hanson is based at Blackbushe Airport in the United Kingdom where it
occupies a facility of approximately 60,000 square feet. Air Hanson is
engaged principally in the provision of maintenance, sale and management of
corporate turbine helicopters and fixed wing aircraft with franchises to sell
and maintain the Beechcraft fixed wing range and Sikorsky civilian
helicopters.
The foregoing description does not purport to be a complete description
of the terms of the Air Hanson Share and Purchase Agreement and is qualified
by reference to such agreement, a form of which is attached hereto as Exhibit
2.1.
<PAGE>
Item 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND
EXHIBITS.
(a) Financial Statements of Businesses Acquired.
None
(b) Pro Forma Financial Information.
None
(c) Exhibits.
2.1 Form of Share and Purchase Agreement by and among Lynton
Group Limited, Hanson Funding (G) Limited and Hanson Finance
PLC.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
LYNTON GROUP, INC.
(Registrant)
Date: September 17, 1998 By: /s/Christopher Tennant
Christopher Tennant,
President and
Chief Executive Officer
THIS AGREEMENT is made the day 3rd of September 1998
BETWEEN:
1. HANSON FUNDING (G) LIMITED (company no. 2582818) whose
registered office is at 1 Grosvenor Place, London SW1X 7JH
("the Vendor"); and
2. HANSON FINANCE PLC (company no. 1104811) whose registered
office is at 1 Grosvenor Place, London SW1X 7JH (the
"Guarantor"); and
3. LYNTON GROUP LIMITED (company no. 1755460) whose registered
office is at Denham Airport, Hangar Road, Uxbridge,
Middlesex UB9 5DF ("the Purchaser").
WHEREAS the Vendor is the legal and beneficial owner of all the
issued shares in the capital of the Company. It has agreed to
sell these shares to the Purchaser upon the terms set out in this
Agreement.
NOW THIS AGREEMENT WITNESSES as follows:-
1. DEFINITIONS AND INTERPRETATION
1.1 In this Agreement the following words have the following
respective meanings:-
"the Accounts" the audited financial statements of the
Company and each of the Subsidiaries,
comprising the balance sheet and profit
and loss account of the Company and of
each of the Subsidiaries, together in
each case with the notes thereon,
director's report and auditors' report
for the year ended on the Balance Sheet
Date
"the Act" the Companies Act 1985 (as amended)
"agreed form" in the form of the draft a copy of which
has been initialled on behalf of the
parties hereto and is annexed to this
Agreement
"Aircraft" the Sikorsky S76B (serial number 760356)
and the Sikorsky S76A (serial number
760086) as more particularly described
in the Aircraft Agreements
"Aircraft Agreements" the agreements to sell the Aircraft in
the agreed form
"the Balance Sheet September 30, 1997
Date"
"the Business" the business of corporate aviation
services including transport and
chartering services, sales, maintenance
and aircraft management business
together with any other business which
the Company and/or any Group Company
presently carries on
"the Company" Air Hanson Limited
"Completion" completion of this Agreement pursuant to
Clause 4
"Completion Accounts" a consolidated balance sheet and profit
and loss account of the Group to be
prepared as at close of business on the
Completion Date and as more particularly
described in Clause 5
"the Completion Date" the date of this Agreement
"Deed of Assignment" the deed of assignment between Air
Hanson Aircraft Sales Limited, the
Guarantor and the Purchaser in the
agreed form
"Deed of Indemnity
(Lease)" the deed of indemnity between the
Vendor, the Purchaser and Hanson PLC
in the agreed form
"Deed of Indemnity
(Romanian Bond)" the Deed of Indemnity between the
Purchaser, Air Hanson Aircraft Sales
Limited and the Guarantor in the agreed
form
"Deed of Waiver" the deed to be executed by Hanson PLC in
the agreed form
"the Disclosure Letter" the letter with today's date delivered
by the Vendor to the Purchaser
immediately prior to exchange of this
Agreement which contains certain
disclosures in relation to the
Warranties
"Employees" those employees engaged under oral or
written contracts and employed by any
Group Company as at the date hereof
"the Escrow Account" the interest bearing deposit account in
the joint names of the Vendor and the
Purchaser with The Royal Bank of
Scotland plc at its branch at 62-63
Threadneedle Street, London EC2R 8LA
Account number: 91267120 , Sort Code:
15-10-00
"the Escrow Amount" US$250,000
"the Group" the Company and each of the Subsidiaries
"Group Company" any member of the Group
"Inter-company Payables" the aggregate of the amounts owing as at
the Completion Date from members of the
Group to members of the Vendor Group
"Inter-company
Receivables" the aggregate of the amounts owing as at
the Completion Date from members of the
Vendor Group to members of the Group
"Letter of Indemnity" the letter to be addressed by Hanson PLC
to the Purchaser in the agreed form
"Management Accounts" unaudited management accounts for the
Group for the period from 1 October,
1997 to 30 June, 1998.
"Net Assets" the amount shown in the Net Assets
Statement of the total assets less
liabilities of the Group at Completion
(which excludes the Inter-company
Payables (these being waived at
Completion by the Deed of Waiver) and
the Inter-company Receivables)
"Net Assets Statement" has the meaning ascribed thereto in
Clause 5.1.2
"the Pension Scheme" the Hanson Industrial Pension Scheme
"the Properties" the properties details of which appear
in Schedule 3
"the Purchaser's Group" the Purchaser and its subsidiaries
including (without limitation) the Group
"Raytheon" Raytheon Aircraft Company
"the Raytheon Agreement" the Customer Support Agreement dated
1 January, 1998 between Raytheon and the
Company
"the Release Date" the first working day following the
expiry of one year after the Completion
Date or, if earlier, the date on which
Raytheon announces the award of their UK
customer support agreement to a third
party
"the Shares" the entire issued share capital of the
Company
"the Subsidiaries" the companies, other than the Company,
details of which are set out in Schedule
1
"Tax" shall bear the same meaning as set out
in Clause 1(A) of the Tax Deed and
"Taxation" shall also bear the same
meaning
"the Tax Deed" a deed of tax covenant in the agreed
form which contains certain covenants
relating to tax
"the Taxes Act" the Income and Corporation Taxes Act
1988
"the Vendor Group" Hanson PLC and its subsidiaries
(excluding the Group) from time to time
"the Warranties" the warranties contained in Schedule 2
1.2 Words and phrases which are defined in the Act have the same
meaning in this Agreement.
1.3 Where reference is made to a statutory provision it shall be
interpreted to include all prior and subsequent enactments,
amendments and modifications relating to it and any
regulations made under it.
1.4 References to Clauses and Schedules are to the clauses of
and schedules to this Agreement unless stated otherwise.
1.5 References to the masculine gender include the feminine and
neuter and vice versa and references to the singular include
the plural and vice versa.
1.6 The headings and index to this Agreement are inserted for
convenience only. They are not to affect its interpretation
or construction.
1.7 The Schedules form part of this Agreement.
2. SALE OF THE SHARES
Subject to the terms of this Agreement the Vendor agrees to
sell with full title guarantee and the Purchaser agrees to
buy the Shares with effect from the Completion Date free
from any charge, lien, equity or encumbrance, but together
with the benefit of all rights attaching to them as at the
Completion Date.
3. CONSIDERATION
Subject to adjustment as provided in Clause 5.3, the
consideration for the sale of the Shares pursuant to this
Agreement is the payment by the Purchaser to the Vendor of
the sum of US$1 to be satisfied in cash at Completion.
4. COMPLETION
4.1 Immediately prior to Completion and as a condition of
Completion, the Vendor and the Purchaser shall have procured
that:
(a) the Aircraft Agreements are duly signed and dated by
all the parties thereto and that payment for and,
delivery of, the Aircraft has been effected; and
(b) the Deed of Assignment has been duly executed and dated
by all the parties thereto and that payment for the
Debt (as defined in the Deed of Assignment) has been
made by the Guarantor.
4.2 The sale and purchase of the Shares will be completed at 1
Grosvenor Place, London SW1X 7JH or such other location as
may be mutually agreed on the Completion Date when:-
4.3 the Vendor will deliver or make available to the Purchaser:-
4.3.1 duly executed transfers in respect of the Shares
in favour of the Purchaser or its nominee;
4.3.2 the share certificates relating to the Shares;
4.3.3 the statutory books of the Company and each of the
Subsidiaries written up to date;
4.3.4 the Tax Deed duly executed by the Vendor;
4.3.5 duly executed transfers in favour of the Purchaser
or its nominee in respect of any shares in the
capital of the Subsidiaries which are not
registered in the name of the Company or any of
the Subsidiaries;
4.3.6 the share certificates relating to any shares
transferred pursuant to Clause 4.3.5;
4.3.7 the common seals, certificates of incorporation,
share certificate books, cheque books and copies
of the memorandum and articles of association of
the Company and the Subsidiaries;
4.3.8 all documents of title held by the Group relating
to the Properties;
4.3.9 all books of account or reference as to customers
and other records in any way relating to or
concerning the respective businesses of the
Company and the Subsidiaries;
4.3.10 all licences, consents, permits and authorisations
obtained by or issued to the Company or the
Subsidiaries or any other person in connection
with the business carried on by it and them;
4.3.11 subject to and conditional upon the Purchaser
performing its obligations under Clause 4.5.2 the
Deed of Waiver duly executed by Hanson PLC;
4.3.12 the Deed of Indemnity (Lease) duly executed by the
Company and Hanson PLC;
4.3.13 the Deed of Indemnity (Romanian Bond) duly
executed by Air Hanson Sales Limited and the
Guarantor;
4.3.14 the Letter of Indemnity duly executed by Hanson
PLC; and
4.3.15 details of the balances of all bank accounts of
each of the Group Companies as at the close of
business the day before the Completion Date with a
list of issued and uncleared cheques drawn on, and
other debits to, such accounts and a cash book
reconciliation as at the date not more than two
business days before Completion.
4.4 the Vendor shall procure that board meetings of each Group
Company are held at which as appropriate:-
4.4.1 the transfers of the Shares and any transfers pursuant
to Clause 4.3.5 (as the case may be) shall be approved
for registration subject only to being stamped;
4.4.2 G Dransfield and P T R McHaffey shall resign as
directors and D Hendry shall resign as secretary and
shall each deliver to the Purchaser a letter addressed
to the relevant Group Company in the agreed form and C
Tennant and D Harland shall be appointed directors and
P Boyd shall be appointed secretary of each of the
Group Companies;
4.4.3 each Group Company shall resolve to change its current
financial year end to the Completion Date;
4.4.4 all existing authorities of the Group to its bankers
shall be amended as the Purchaser may direct.
4.5 the Purchaser will then:-
4.5.1 pay the sum of US $1 in cash to the Vendor;
4.5.2 as agent for Air Hanson Aircraft Sales Limited, pay to
the Vendor as agent for Hanson PLC the sum of pound sterling79,060
in partial settlement of the Inter-Company Payables
4.5.3 pay the sum of pound sterling82,985 to The Royal Bank of
Scotland plc in accordance with the provisions of Clause 4 of
the Deed of Indemnity (Lease);
4.5.4 deliver to the Vendor the Tax Deed duly executed by the
Purchaser;
4.5.5 deliver to the Vendor the Deed of Indemnity (Lease)
duly executed by the Purchaser;
4.5.6 deliver to the Vendor the Deed of Indemnity (Romanian
Bond) duly executed by the Purchaser;
4.6 The Vendor will pay the Escrow Amount into the Escrow
Account;
4.7 The Purchaser shall, at its own expense, procure that,
immediately following Completion, the Company and any
relevant Subsidiaries file with the Companies Registry or
other relevant authority notice of the resolution passed
pursuant to Clause 4.4.3.
4.8 With the exception of the period of 60 days from the date of
Completion during which period the Vendor hereby consents
and authorises the use in connection with the business of
the Company and the Subsidiaries, the Purchaser undertakes
to the Vendor that it will not, and it will procure that the
Company and the Subsidiaries, and each subsidiary and
holding company of the Purchaser, will not at any time after
Completion use as a trade or business name or trademark or
carry on any business under (i) a name or title containing
the word "Hanson" or any word colourably similar thereto
other than "Air Hanson" or (ii) the Hanson logo or any logo
colourably similar thereto.
5. COMPLETION AND STATUTORY ACCOUNTS
5.1 As soon as practicable (and in any event no more than 60
days other than for reasons beyond the parties control)
after the Completion Date, the Purchaser shall procure each
Group Company to co-operate to enable the preparation by
Ernst & Young ("the Accountants") of drafts of:-
5.1.1 statutory accounts for each of the Company and the
Subsidiaries for the period ending on the Completion
Date;
5.1.2 the Completion Accounts, which shall be based upon such
statutory accounts; and
5.1.3 a statement of the Net Assets (the "Net Assets
Statement"), in each case to be prepared in accordance
with the policies referred to in Schedule 4 and,
subject thereto, applying accounting policies and
practices identical to those used and applied
consistently by the Group in preparing the Accounts (or
UK GAAP if such policies are not in accordance with UK
GAAP).
5.2 Forthwith upon preparation of the draft Completion
Accounts and the Net Assets Statement, the Purchaser
shall procure that the Company shall deliver a copy of
the same to the Purchaser and the Vendor. The
Purchaser and the Vendor shall have sixty days in which
to review the draft Completion Accounts and the draft
Net Assets Statement. If either the Purchaser or the
Vendor disputes any items in the draft Completion
Accounts or the draft Net Assets Statement, such party
may give written notice to that effect to the other
party during the aforesaid sixty day period of review
setting out the issue in dispute and the basis for the
objection. If such notice is given within the said
period, the Purchaser and the Vendor shall endeavour to
resolve their differences. If such differences are not
resolved in writing within sixty calendar days after
delivery of the first notice of objection, then such
dispute shall be referred to an independent firm of
chartered accountants agreed upon by the parties or,
failing agreement, a firm of chartered accountants
appointed by the President for the time being of the
Institute of Chartered Accountants in England and
Wales, who shall determine the dispute acting as an
expert and not as an arbitrator, and whose decision
shall, save for any manifest error in calculation, be
final and binding on the parties. The Vendor shall
bear the costs of the Accountants and the Purchaser
shall bear the costs of their accountants in carrying
out their functions pursuant to this Clause 5 and the
costs of any accountants' determination of the dispute
pursuant to this Clause 5.2 shall be shared equally
between the Vendor and the Purchaser. If no such
notice is delivered by either the Purchaser or the
Vendor within the aforesaid sixty day review period,
the Purchaser and the Vendor shall be deemed to have
conclusively agreed with the draft Completion Accounts
and the draft Net Assets Statement and such drafts (or,
as the case may be, the drafts as amended by the
parties or by the independent accountants following
such dispute) shall be the Completion Accounts and the
Net Assets Statement for the purpose of this Agreement.
5.3 Any adjusting payment shall be made as set out below within
ten days after the later of the expiry of the sixty day
review period referred to in Clause 5.2 and the final
determination of any dispute between the parties pursuant
thereto in accordance with the provisions of Clause 5.2.
If:
5.3.1 the Net Assets are less than pound sterling 581,000, the
Vendor shall pay to the Purchaser an amount equal to the shortfall;
and
5.3.2 the Net Assets are more than pound sterling 581,000, the
Purchaser shall pay the Vendor an amount equal to the difference
(subject to a maximum additional payment of pound sterling500,000)
in each case, any such payment to be treated as an
adjustment of the cash consideration paid pursuant to Clause
3.1.
6. THE RAYTHEON AGREEMENT
6.1 The Purchaser shall use its reasonable endeavours to procure
that, prior to the Release Date, Raytheon gives its consent
to the change in control of the Company and that Raytheon
either waives its right to terminate the Raytheon Agreement
pursuant to Clause 17.2 thereof or agrees to enter into a
new agreement with the Purchaser or a member of the Group on
terms substantially the same as those set out in the
Raytheon Agreement ("the Raytheon Consent")
6.2 If, prior to the Release Date the Raytheon Consent has been
obtained, there shall be released to the Vendor within 2
working days from the Escrow Account the Escrow Amount
together with all interest accrued thereon which amount
shall be treated as additional consideration for the sale of
the Shares pursuant to this Agreement.
6.3 If, on the Release Date the Raytheon Consent has not been
obtained, there shall be released to the Purchaser within 2
working days from the Escrow Account the Escrow Amount
together with all interest accrued thereon.
6.4 Save as provided in this Clause 6, no releases or
withdrawals shall be made from the Escrow Account save with
the previous written consent of both the Vendor and the
Purchaser.
6.5 The Vendor and the Purchaser each agrees to give such
instructions to the Royal Bank of Scotland plc as may be
required to give full effect to the provisions of this
Clause 6.
7. WARRANTIES
7.1 The Vendor hereby warrants to the Purchaser that the
Warranties are true as at the date of this Agreement. Where
any Warranty refers to the awareness of the Vendor or is
given "so far as the Vendor is aware" (or similar
qualification) the Vendor shall be deemed to have only such
awareness (in addition to matters of which they are actually
aware) as they would have at the date of this Agreement
after making all reasonable enquiries into the subject
matter of that Warranty of the Directors of the Company and
each of the Subsidiaries, Peter Sibley, David Sale and Dan
Hendry and each such Warranty shall be deemed to include a
further statement to the effect that the Vendor has made
such enquiries.
7.2 The Vendor shall be under no liability under the Warranties
in relation to any matter forming the subject matter of a
claim thereunder to the extent that the same or the facts or
circumstances giving rise thereto are fairly disclosed in
the Disclosure Letter or provided for by way of reduction of
the Net Assets.
7.3 The Vendor shall be under no liability in respect of any
claim under the Warranties or the Tax Deed and any such
claim shall be wholly barred and unenforceable unless
written notice of such claim setting out reasonable details
of the relevant claim (including to the extent then known
reasonable particulars of the grounds on which such claim is
based and the amount claimed to be payable in respect
thereof if reasonably quantifiable) shall have been served
upon the Vendor by the Purchaser:-
7.3.1 in the case of a claim under the Warranties (other than
the Warranties relating to tax), by not later than 5
p.m. on 31 December 1999; and
7.3.2 in the case of a claim under the Tax Deed or under the
Warranties relating to tax, by not later than 5 p.m. on
the sixth anniversary of the date of this Agreement.
7.4 Any claim under the Warranties in respect of which
written notice has been served on the Vendor pursuant
to Clause 7.3 shall be wholly barred and unenforceable
unless either:-
7.4.1 the amount payable in respect of the relevant claim has
been agreed by the Vendor within nine months of the
date of such written notice; or
7.4.2 legal proceedings have been instituted in respect of
such claim by the due service of process on the Vendor
within nine months of the later of:-
7.4.2.1 the date of such written notice; and
7.4.2.2 if the Vendor makes a request pursuant to Clause 7.10
in respect of such claim, the date on which (in respect
of such proceedings as shall have been instituted by
the Purchaser pursuant to such request);
7.4.2.2.1 judgement is given by a court of competent
jurisdiction; or
7.4.2.2.2 the date on which settlement is reached in such third
party proceedings with the consent of the Vendor ; or
7.4.2.2.3 the date on which the Vendor and the Purchaser agree
that proceedings or other action against the third
party shall be abandoned.
7.5 The Vendor shall be under no liability in respect of any
claim under the Warranties unless and until the liability in
respect of that claim when aggregated with the liability of
the Vendor in respect of all other such claims shall exceed
pound sterling50,000, in which case the Purchaser shall be entitled to
claim all of the amount claimed provided that the Vendor
shall have no liability in respect of any claim which would
(but for this clause) have been less than pound sterling5,000.
7.6 The aggregate liability of the Vendor in respect of all
claims under this Agreement and the Tax Deed shall not in
any circumstances exceed the aggregate of US $7.3 million
except where specifically provided otherwise in the Tax
Deed.
7.7 No liability (whether in contact, tort or otherwise) shall
attach to the Vendor in respect of any claim under the
Warranties or the Tax Deed to the extent that:-
7.7.1 the claim or the events giving rise to the claim arise
as a result of:
(i) an act, omission or transaction of the Purchaser's
Group after Completion which is voluntary, not
required by the terms of this Agreement or the Tax
Deed and otherwise than in the ordinary course of
the Business; or
(ii) any claim, election or surrender or disclaimer
made or omitted to be made or notice or consent
given or omitted to be given by the Purchaser's
Group after Completion (other than at the request
or direction of the Vendor under Clause 6 of the
Tax Deed) under the provisions of any statutes
relating to tax;
7.7.2 provision or reserve in respect of the matter giving
rise to the claim shall have been made in the Net Asset
Statement;
7.7.3 the claim occurs out of or the amount thereof is
increased as a result of:-
7.7.3.1 any change in the accounting principles or practices of
the Group introduced or effected by the Purchaser's
Group on or after Completion other than such a change
effected to comply with generally accepted accounting
principles; or
7.7.3.2 any increase in the rates of tax made after the date
hereof (including with retrospective effect); or
7.7.3.3 save as expressly provided in this Agreement any change
in law or regulation which in any case takes effect
retrospectively;
7.7.4 the loss or damage giving rise to the claim is
recoverable by the Purchaser under any policy of
insurance existing at Completion in respect of the
Group, less the cost of achieving any such recovery;
7.7.5 the claim is for tax which arises in respect of the
ordinary course of trading of the Company or any
Subsidiary after the Completion Date; or
7.7.6 the claim relates to a claim or liability for tax and
would not have arisen but for any winding-up, cessation
or major change in the conduct or nature after
Completion of any business or trade carried on by the
Group not caused by matters constituting a breach of
the Warranties.
7.8 The Purchaser shall not be entitled to recover any loss
under the Warranties in respect of any matter to the extent
that recovery has been made in relation to that matter under
the Tax Deed, or vice versa.
7.9 The provisions of Clause 7.10 shall apply if:-
7.9.1 any claim is made against the Purchaser's Group which
may give rise to a claim by the Purchaser against the
Vendor under the Warranties; or
7.9.2 the Purchaser's Group is or may be entitled to make
recovery from some other person of any sum in respect
of any facts or circumstances by reference to which
the Purchaser has or may have a claim against the
Vendor under the Warranties; or
7.10 In any of the circumstances set out in Clause 7.9 the
Purchaser shall and shall procure that the Purchaser's Group
shall:-
7.10.1 at the Vendor's cost and subject to the person taking
such action being indemnified by the Vendor against all
costs and expenses (including but not limited to the
risk of an award of costs being made against it) which
may properly be incurred by reason of such action,
promptly and diligently take all such action as the
Vendor may reasonably request (but for the
avoidance of doubt the Vendor shall not be
entitled to request the Purchaser to take any
action that the Vendor are prohibited from taking
by Clause 7.14) including the institution of
proceedings and the instruction of professional
advisers approved by the Vendor such approval not
to be unreasonably withheld or delayed to act on
behalf of each such person to avoid, dispute,
resist, compromise, defend or appeal against any
such claim against the Purchaser's Group as is
referred to in Clause 7.9.1 or to make such
recovery by the Purchaser's Group as is referred
to in Clause 7.9.2 as the case may be, in
accordance with the reasonable and lawful
instructions of the Vendor ;
7.10.2 not settle or compromise any liability or claim to
which such action is referable without the prior
written consent of the Vendor such consent not to
be unreasonably withheld or delayed; and
7.11 In the event that the Vendor shall have paid to the
Purchaser an amount in respect of a claim under the
Warranties and subsequent to the making of such payment the
Purchaser's Group recovers from some other person a sum
which is referable to that payment, the Purchaser shall
promptly repay to the Vendor an amount equal to the amount
so recovered (net of any costs of recovery and any tax on
the amount recovered) or, if lower, the amount paid by the
Vendor to the Purchaser.
7.12 The Purchaser shall as soon as is reasonably practicable:-
7.12.1 inform the Vendor in writing of any fact, matter, event
or circumstance which comes to its notice or the notice
of the Purchaser's Group whereby it appears that the
Vendor is or may reasonably be expected to be liable in
respect of any claim by a third party which may give
rise to a claim under the Warranties or whereby it
appears the Purchaser's Group shall become or may
become entitled to recover from some other person a sum
which is referable to a payment already made by the
Vendor in respect of such a claim; and
7.12.2 thereafter keep the Vendor fully informed of all
material developments in relation thereto; and
7.12.3 provide at the cost of the Vendor all such information
and documentation (no matter how it is recorded or
stored) as the Vendor shall reasonably request in
connection therewith and also in connection with any
proceedings instituted by or against the Purchaser's
Group under Clauses 7.10 and 7.11 except where the
provision of such information and documentation would
be in breach of legal privilege or duty of
confidentiality to a third party.
7.13 No liability in respect of any claim for tax under the
Warranties shall become payable:-
7.13.1 in the case of a claim for tax involving an actual
payment of tax or the loss or set off of a relief
against tax, prior to the date on which a payment of
tax becomes finally due and payable under or in
consequence of the claim for taxation in question; or
7.13.2 in the case of a claim for tax involving the loss of or
reduction of a right to repayment of tax, prior to the
day on which any repayment or increased repayment of
tax which, but for such claim for tax would have been
available, would have been due.
For the avoidance of doubt, provided a claim
for breach of Warranty is made prior to the
time limits in Clauses 7.3 and 7.4, payment
will remain payable outside of such time
limits.
7.14 The Vendor on behalf of itself and each member of the Vendor
Group hereby waives any and all claims which it or the
Vendor Group might otherwise have against the directors and
employees of each of the Group Companies, except that this
clause shall not result in the Vendor waiving claims for
fraud or wilful non-disclosure by directors and employees.
7.15 Nothing in this Agreement shall or shall be deemed to
relieve the Purchaser of any common law or other duty to
mitigate any loss or damage incurred by it.
7.16 The Vendor acknowledges that the Purchaser has entered into
this Agreement in reliance upon the Warranties. The
Purchaser agrees that the Purchaser's sole remedy is for
damages for breach of contract in respect of the warranties,
undertakings and covenants and to be indemnified and held
harmless (subject to the terms thereof) under the
indemnities expressly set out in this Agreement and the Tax
Deed subject to the applicable limitations contained in this
Agreement and the Tax Deed.
7.17 Subject and without prejudice to the foregoing provisions of
this Clause the Warranties shall remain in full force and
effect after Completion, but the Purchaser shall have no
right to rescind or terminate this Agreement after
Completion (whether for breach of any of the Warranties or
under the provisions of the Misrepresentation Act 1967 or
for any other reason whatsoever).
7.18 Any payment made pursuant to the Warranties or the Tax Deed
by the Vendor net of any repayments by the Purchaser shall
be deemed to be an adjustment to the cash consideration paid
pursuant to Clause 3.1.
7.19 None of the provisions of this Clause 7 shall operate to
limit or exclude any liability of the Vendors for any claim
arising from fraudulent or wilful misrepresentation.
8. PURCHASER'S UNDERTAKINGS
8.1 Subject to Clause 9.5, the Purchaser will not and it will
procure that each member of the Group will not at any time
after the Completion Date furnish to any other person
information of a confidential or secret nature relating to
the Vendor Group's affairs or businesses known to any of
them (other than to the Purchaser's professional advisers
who shall previously have agreed to keep such information
confidential) unless so requested in writing by the Vendor
or requested by any competent authority in the exercise of
any legal power or unless the same becomes public knowledge
other than by reason of breach of this Clause.
8.2 The Purchaser shall use all reasonable endeavours to procure
that as soon as reasonably practicable after /Completion
each member of the Vendor Group is released from those
guarantees, indemnities, bonds or securities (including,
without prejudice to the generality thereof, the guarantees
given by the Vendor and all other members of the Vendor
Group in respect of the bank borrowings of each member of
the Group) specified against this Clause in the Disclosure
Letter in respect of any liability, act or omission after
Completion of any member of the Group and pending such
release shall (without prejudice to its rights under the
Warranties) indemnify and keep indemnified the Vendor for
itself and as trustee for each member of the Vendor's Group
against all claims, demands, costs, expenses, liabilities
and obligations in respect of each such guarantee,
indemnity, warranty, bond or security.
9. PROTECTION OF GOODWILL
9.1 Subject to the following provisions of this Clause 9, the
Vendor undertakes that neither it nor any other member of
the Vendor Group will for a period of two years after
Completion within the United Kingdom without the Purchaser's
prior written consent directly or indirectly carry on or be
engaged, concerned or interested either solely or jointly
with any person in any of the activities of the Business or
solicit the custom of any person for any of the activities
of the Business.
9.2 The Vendor undertakes that it will not and that it will
procure that no member of the Vendor Group will not at any
time after Completion without the Purchaser's prior written
consent:-
9.2.1 with the exception of the word "Hanson", use any name
identical to or likely to be confused with a name used
by the Group prior to Completion in connection with the
Business;
9.2.2 save for the purposes of and to the extent reasonably
necessary for dealing with taxation matters in
accordance with the terms of the Tax Deed, hold itself
out as having any continuing connection with the Group
or the Business;
9.2.3 subject to Clause 9.5 disclose or use any trade secrets
or confidential information relating to the Group
and/or the Business which it has acquired prior to
Completion; or
9.2.4 for a period of two years after Completion induce,
solicit or endeavour to entice any director or senior
manager to leave the service or employment of the
Company or the Group, but the foregoing shall not be
taken to prevent the Vendor Group from advertising
vacancies generally nor from employing anyone who bona
fide responds to any such advertisements .
9.3 The Vendor undertakes that it will and that it will procure
that the each member of the Vendor Group will make
reasonable efforts to maintain the confidentiality of any
confidential information relating to the Group and/or the
Business which it may acquire in any manner.
9.4 Nothing in this Agreement shall in any way prevent the
Vendor or any member of the Vendor Group at any time from
(i) owning, leasing or chartering aircraft for the purposes
of the Vendor Group or (ii) acquiring any firm or
partnership or business of a sole trader or any shares or
assets of a company or group of companies which carried on
as part of its operation a business similar to the Business
(herein called "the Restricted Business") provided that the
principal reason for the acquisition of such business is
other than to engage in the Restricted Business and that the
Restricted Business constitutes and continues thereafter to
constitute until the expiry of the said period of two years
a minor part of the activity of such business or company or
group of companies as acquired, that is to say, the
aggregate turnover of the Restricted Business does not
exceed pound sterling20 million or 10% of the aggregate
turnover of such business or company or group of companies
in its last financial year (as defined by section 742 of
the Act) for which the accounts thereof are made up.
9.5 Nothing contained in Clauses 9.2.3 or 8.1 shall apply to
information that:-
9.5.1 is in the public domain at the time of Completion or
thereafter enters the public domain without breach of
the terms of Clause 9 or 8.1 respectively; or
9.5.2 must be disclosed pursuant to any order made by any
court or otherwise as may be required by law or by any
regulatory body or authority (including, without
limitation, the London Stock Exchange).
9.6 Nothing in this Clause 9 is to prevent any member of the
Vendor Group from holding for investment purposes up to 5%
of the issued share capital of a company whose shares are
dealt in or quoted on a recognised Stock Exchange.
9.7 Each covenant and/or undertaking contained in this Clause 9
shall be construed as a separate covenant and/or undertaking
and if one or more of the covenants and/or undertakings
contained in this Clause 9 is held to be unlawful as being
against the public interest or an unreasonable restraint of
trade the remaining covenants and/or undertakings shall
continue to bind the Vendor .
9.8 If any covenant or undertaking in Clause 9.1 or Clause 9.2
shall be held to be void or unlawful but would be valid if
deleted in part or reduced in application, the covenant or
undertaking in question shall apply with such deletion or
modification as may be necessary to make it valid and
enforceable.
Without prejudice to the generality of the foregoing, if
such invalidity arises by reason of the period being
excessive, such period (as the same may previously have been
reduced by virtue of this Clause 9.8) shall take effect as
if reduced by six months until the resulting period shall be
valid and enforceable.
10. PENSIONS
The provisions of Schedule 5 shall apply in relation to the
Pension Scheme.
11. RESTRICTIVE TRADE PRACTICES ACT
No provision of this Agreement, by virtue of which this
Agreement is subject to registration (if such be the case)
under the Restrictive Trade Practices Act 1976 (unless this
Agreement is a non-notifiable agreement pursuant to Section
27A of that Act) shall take effect until the day following
the day upon which particulars of this Agreement are
delivered to the Director General of Fair Trading in
accordance with the provisions of that Act. For this
purpose the expression "this Agreement" includes any
agreement or arrangement of which this Agreement forms part
and which is registrable or by virtue of which this
Agreement is registrable.
12. NOTICES
12.1 Any notice given under this Agreement or the Tax Deed shall
be in writing signed by or on behalf of the party giving it.
The notice may be served by leaving it at or sending it by
pre-paid recorded delivery or registered post to the
registered office for the time being of the recipient.
12.2 Any notice so served is deemed to have been received:-
12.2.1 in the case of personal service, upon delivery; and
12.2.2 in the case of pre-paid recorded delivery or registered
post, forty-eight hours from the time of posting.
12.3 For notices served by post it will be sufficient in proving
service to establish that the envelope containing the notice
was properly stamped, addressed and posted.
13. COSTS
Each of the parties is to be responsible for its own costs
(including, in the case of the Purchaser, any stamp duty
costs) relating to the preparation and execution of this
Agreement and the documents referred to herein.
14. CONFIDENTIALITY
Save to the extent required by law or the regulations of the
London Stock Exchange or other share exchange, no
announcement concerning the terms of or any matters
contemplated by this Agreement or any matter ancillary to it
may be made by or on behalf of any party to this Agreement
except with the prior written consent of the other such
consent not to be unreasonably withheld or delayed. Where
announcements or disclosure (as contemplated by Clause
9.5.2) are required by law or regulation the parties hereto
shall to the extent reasonably practicable consult each
other as to the form and/or content of such announcement or
disclosure.
15. THE GUARANTOR
15.1 The Guarantor irrevocably and unconditionally guarantees the
due and punctual performance by the Vendor of its
obligations under this Agreement and the Tax Deed and
irrevocably and unconditionally undertakes with the
Purchaser that, if the Vendor shall fail in any respect to
fulfil any of its said obligations or shall be in breach of
any of the Warranties or any of the covenants given to the
Purchaser under this Agreement or the Tax Deed, the
Guarantor will indemnify the Purchaser against all losses,
damages, costs, charges and expenses which may be suffered
or reasonably incurred by the Purchaser by reason of such
failure or breach to the intent that, if the Vendor shall so
fail, the Purchaser shall be at liberty to act and the
Guarantor shall be liable as if the Guarantor were the party
principally bound by such obligations.
15.2 The guarantee and indemnity contained in Clause 15.1 is a
continuing guarantee and indemnity and shall remain in force
until all obligations of the Vendor under this Agreement and
the Tax Deed have been fully performed and all sums payable
by the Vendor have been fully paid.
15.3 The obligations of the Guarantor shall not be affected by
any act, omission, matter or thing which, but for this
provision, might operate to release or otherwise exonerate
the Guarantor from its obligations or affect such
obligations including, without limitation and whether or not
known to the Guarantor:-
15.3.1 any time, indulgence, waiver or consent at any time
given to the Vendor or any other person;
15.3.2 any compromise or release of, or absention from
perfecting or enforcing, any rights or remedies against
the Vendor or any other person;
15.3.3. any legal limitation, disability, incapacity or other
circumstance relating to the Vendor or any other person
or any amendment to or variation of the terms of this
Agreement or the Tax Deed; and
15.3.4 any irregularity, unenforceability or invalidity of any
obligations of the Vendor under this Agreement or the
Tax Deed or the dissolution, amalgamation,
reconstruction or insolvency of the Vendor.
15.4 The guarantee and indemnity contained in Clause 15.1 may be
enforced by the Purchaser without first having to take any
steps or proceedings against the Vendor.
16. ENTIRE AGREEMENT
This Agreement (together with the various documents referred
to in it) constitutes the entire agreement between the
parties relating to the sale and purchase of the Shares. No
variation of this Agreement will be effective unless it is
in writing signed by or on behalf of all of the parties.
17. FURTHER ASSURANCE
17.1 All provisions of this Agreement which have not been
performed in full at Completion are to remain in full force
and effect notwithstanding Completion.
17.2 The Vendor will do all acts and execute all deeds and
documents reasonably required by the Purchaser to validly
transfer the Shares to the Purchaser and to assure to it the
rights agreed to be granted pursuant to this Agreement.
Stamp duty on the transfer of the Shares shall be for the
account of the Purchaser.
18. BENEFIT AND BURDEN
18.1 This Agreement, the Tax Deed together with all documents
referred in them and all rights and benefits of such
agreements are personal to the parties hereto and may not be
assigned at law or in equity.
18.2 Any waiver of a breach or default of the terms of this
Agreement will not constitute a waiver of any subsequent
breach or default. No waiver of any term, provision or
condition of this Agreement shall be effective unless such
waiver is evidenced in writing and signed by the waiving
party.
19. MISCELLANEOUS
19.1 This Agreement may be executed in any number of counterparts
and by several parties hereto on separate counterparts each
of which when so executed and delivered shall be an
original, but all the counterparts shall together constitute
one and the same document.
19.2 If at any time any one or more provisions of this Agreement
is or becomes invalid, illegal or unenforceable in any
respect under any law the validity, legality and
enforceability of the remaining provisions shall not be in
any way affected or impaired thereby.
20. GOVERNING LAW
This Agreement and the Tax Deed are governed by English law.
The parties agree to submit to the non-exclusive
jurisdiction of the English courts, for the purposes of the
interpretation and enforcement hereof and thereof.
IN WITNESS WHEREOF this Agreement has been executed as a Deed by
or on behalf of each the parties hereto the day and year first
above written.
