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) DECEMBER 19, 1997
FARREL CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 0-19703 22-2689245
(State or other jurisdiction of (Commission (I.R.S. Employer
incorporation or organization) File Number) Identification No.)
25 MAIN STREET, ANSONIA, CONNECTICUT, 06401
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (203) 736-5500
NONE
(Former name or address, if changed since last report.)
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Item 2 - Acquisition of Assets
Farrel Corporation (the "Company") announces the completion of
the acquisition of selected assets of Francis Shaw & Co. Limited,
Francis Shaw Rubber Machinery Limited and PRC Fabrications Limited
by Farrel Bridge Limited from EIS Group PLC (the "Seller") on
December 19, 1997. Farrel Bridge Ltd., a subsidiary of Farrel
Ltd., changed its name to Farrel Shaw Ltd. on December 19, 1997.
The acquired assets included machinery & equipment, inventory and
intangible assets which were used by the seller to manufacture and
market mixing equipment for the rubber industry. The purchase
price of 6,500,000 pounds sterling (approximately $10,855,000) was
agreed through arms length negotiations between the Company and the
Seller. Payment was made from available resources and a partial
drawdown of the Company's worldwide credit facility with Chase
Manhattan Bank. The purchase price is subject to reduction in the
following circumstances: (a) any shortfall in the inventory
valuation and (b) by one pound sterling for every one pound
sterling that the 1998 profits, as defined in the agreement, are
less than 1,000,000 pounds sterling (approximately $1,670,000).
Farrel Shaw will continue to utilize the acquired assets in the
manufacture and marketing of mixing equipment for the rubber
industry.
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Item 7 - Financial Statements and Exhibits
(a) Financial Statements
The Company is making a request of the Commission for permission
to omit the filing of financial information relative to the
acquired assets based on unavailability of such information.
(c) Exhibits
EXHIBIT 2.1 ITEM 601 OF S-K
Sale and purchase agreement of the Francis Shaw Rubber Machinery
Business dated December 4, 1997 between Francis Shaw & Co.
Limited, Francis Shaw Rubber Machinery Limited, PRC Fabrications
Limited, EIS Group PLC, Farrel Bridge Limited and Farrel Limited
("Purchase Agreement"). Pursuant to Item 602(b)(2) of Regulation
S-K, the schedules to the Purchase Agreement are omitted. A list
of such schedules appears in the table of contents to the
purchase agreement included herewith. The registrant hereby
undertakes to furnish supplementally a copy of any omitted
schedules to the commission upon request.
EXHIBIT 20.1 ITEM 601 OF S-K
Press Release: December 19, 1997 Farrel Corporation
announces Acquisition of Francis Shaw Rubber Machinery.
EXHIBIT 20.2 ITEM 601 of S-K
Press Release: December 4, 1997 Farrel Corporation announces
conditional contract to acquire Francis Shaw Rubber Machinery.
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Exhibit Index
Exhibit
NO. DOCUMENT
2.1 Sale and purchase agreement of the Francis Shaw
Rubber Machinery Business dated December 4, 1997
between Francis Shaw & Co. Limited, Francis Shaw
Rubber Machinery Limited, PRC Fabrications Limited,
EIS Group PLC, Farrel Bridge Limited and Farrel
Limited ("Purchase Agreement"). Pursuant to Item
602(b)(2) of Regulation S-K, the schedules to the
Purchase Agreement are omitted. A list of such
schedules appears in the table of contents to the
purchase agreement included herewith. The registrant
hereby undertakes to furnish supplementally a copy of
any omitted schedules to the commission upon request.
20.1 Press Release: December 19, 1997 Farrel Corporation
announces Acquisition of Francis Shaw Rubber Machinery.
20.2 Press Release: December 4, 1997 Farrel Corporation
announces conditional contract to acquire Francis
Shaw Rubber Machinery.
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SIGNATURE
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 hereunto duly authorized.
FARREL CORPORATION
Date: January 5, 1998 /s/ Rolf K. Liebergesell
------------------------------
Rolf K. Liebergesell
Chief Executive Officer,
President and Chairman of the Board
DATE 4 December 1997
----------------------------
FRANCIS SHAW & COMPANY (MANCHESTER) LIMITED
FRANCIS SHAW RUBBER MACHINERY LIMITED
PRC FABRICATIONS LIMITED
FARREL BRIDGE LIMITED
EIS GROUP PLC
FARREL LIMITED
AGREEMENT
Relating to the sale and purchase of the Francis Shaw Rubber
Machinery Business
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CONTENTS
Clause Page
1 Interpretation 2
2 Conditions 14
3 Sale and Purchase 15
4 Exclusions from the Sale 16
5 Purchase Price 17
6 Conduct of Business prior to Completion 17
7 Value Added Tax 19
8 Completion 20
9 Valuation of the Stock 23
10 Warranties 24
11 Confidential Information 29
12 Assets Incapable of Transfer 30
13 Employees 31
14 Indemnities and Apportionments 34
15 Books of Account 37
16 Covenants 37
17 Insurances 39
18 Pension Provisions 40
19 Property Provisions 40
20 Guarantees 41
21 Post Completion Obligations 42
22 General Provisions 44
23 1998 Profits 48
24 Deductions and Withholdings 48
Schedules
1 Details of the Business
Part 1 - FS Manchester Business
Part 2 - FSRM Business
Part 3 - PRC Business
2 The Warranties
3 Computer System
4 Contracts
5 Employees
6 Fixed Assets
7 Installation Obligations
8 Hire Agreements
9 Properties
10 Pensions
11 Intellectual Property
12 Agenecy Contracts
13 Retained Contracts
14 1998 Profits
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15 Insured Contracts
Agreed Form Documents
A PRC Property Assignment
B FS Manchester Property Lease
C Assignment of Goodwill
D1 to D3 Letters of Instruction
E1 to E3 Trade Mark Assignments
F1 to F2 Patent Assignments
G Operating Agreement
H Trade Mark Licence
I Deed of Release
J Landlords Fixtures and Fittings
K 1998 Budget
L Letter of Subscription
M Know-how tax election
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AGREEMENT
DATE 4 December 1997
PARTIES
1 FRANCIS SHAW & COMPANY (MANCHESTER) LIMITED incorporated in England and
Wales with number 744369 ("FS Manchester");
2 FRANCIS SHAW RUBBER MACHINERY LIMITED incorporated in England and Wales
with number 3251163 ("FSRM");
3 PRC FABRICATIONS LIMITED incorporated in England and Wales with number
953588 ("PRC");
4 FARREL BRIDGE LIMITED incorporated in England and Wales with number
2245617 (the "Purchaser");
5 EIS GROUP PLC incorporated in England and Wales with number 61407 ("EIS");
and
6 FARREL LIMITED incorporated in England and Wales with number 1922655
("Farrel")
WHEREAS
A FS Manchester carries on, inter alia, the FS Manchester Business and has
agreed to sell the FS Manchester Goodwill and certain assets of the
FS Manchester Business to the Purchaser on the terms and conditions
of this Agreement.
B FSRM carries on the FSRM Business and has agreed to sell the FSRM Goodwill
and certain of the assets of the FSRM Business to the Purchaser on
the terms and conditions of this Agreement.
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C PRC carries on the PRC Business and has agreed to sell the PRC
Goodwill and certain of the assets of PRC Business to the Purchaser
on the terms and conditions of this Agreement.
D Each of FS Manchester, FSRM and PRC (together the "Vendor") is a
subsidiary of EIS.
E In consideration of the Purchaser agreeing to purchase the Goodwill
and certain assets of the Business EIS has agreed to be a party to
this Agreernent.
F In consideration of the Vendor agreeing to sell the Goodwill and
certain assets of the Business to the Purchaser Farrel has agreed to
be a party to this Agreement.
AGREEMENT
1 INTERPRETATION
1.1 In this Agreement and the Recitals and the Schedules hereto (unless
the context requires otherwise) the following words and expressions
shall have the following meanings:
ACCOUNTS: means the unaudited management accounts of the FSRM
Business and the PRC Business comprising a balance sheet as at 30
September 1997 and a profit and loss account for the nine month
period which ended on 30 September 1997, a copy of which is annexed
to the Disclosure Letter;
THE ACCOUNTS DATE: 30 September 1997;
THE AGENCY CONTRACTS: the agency agreements entered into by or on
behalf of the Vendor prior to the date hereof and relating to the
Business, particulars of which are set out in Schedule 12;
THE ASSETS: means the assets hereby agreed to be sold listed in
Clause 3.1;
BARWELL CONTRACT: the distribution agreement dated 27 November 1997
for the
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supply of rubber extruders by FSRM to Barwell Inc.;
BOOKS OF ACCOUNT: means all the books of account and accounting
records of the Vendor in relation to the Business including all
records that are required to be preserved under paragraph 6 of
Schedule 11 VATA;
BOOK DEBTS: all sums invoiced as at the Completion Date by the
Vendor for goods or services supplied or to be supplied by the
Vendor in the ordinary course of carrying on the Business;
BUSINESS: means the FS Manchester Business, the FSRM Business and
the PRC Business;
BUSINESS DAY: means a day which is not a Saturday or Sunday on which
clearing banks are open for business in the City of London;
BUSINESS INFORMATION: means all information (whether or not
confidential and in whatever form held) which in any way relates to
the Business or the Assets including all such information as relates
to:
(i) any products manufactured and/or sold or services rendered by
the Business;
(ii) any formula, designs, specifications, drawings, data, manuals
or instructions (including without limitation the records of all
laboratory trials conducted by the Vendor, whether for itself or
for a customer) but, for the avoidance of doubt, excluding any
of such information that principally relates to the Retained
Businesses;
(iii) the operations, management or administration of the
FSRM Business and the PRC Business (including any business plans
or forecasts, information relating to future business
development or planning, product costs, job estimates and
budgets) but, for the avoidance of doubt, excluding any of such
information that principally relates to the Retained Businesses;
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(iv) information relating to litigation or legal advice; and
(v) the sale or marketing of any of the products manufactured
(including without limitation product literature and information
of any kind) and/or sold or services rendered by the Business,
including, but without limiting the generality of the foregoing
words, all customer names and lists, prior customer orders or
order enquiries, sales and marketing information (including but
not limited to targets, sales and market share statistics,
market surveys and reports on research);
THE COMPLETED CONTRACTS: the contracts relating to the Business
which have been completed or in respect of which a final account or
invoice has been rendered prior to the Completion Date;
COMPLETION: means completion of the obligations of the Parties in
accordance with the provisions of Clause 8;
COMPLETION DATE: means the date on which Completion is to take place
pursuant to Clause 8.1;
COMPUTER SYSTEM: means the computer hardware and software,
particulars of which are set out in Schedule 3;
THE COMPUTER SYSTEM REPORT: means the report so entitled and
attached to the Disclosure Letter;
CONTRACTS: means all those contracts entered into by or on behalf of
the Vendor with customers suppliers and others in the ordinary
course of the Business and remaining unperformed in whole or part at
the date hereof particulars of which are set out in Schedule 4, the
Agency Contracts, and the Hire Agreements, (but for the avoidance of
doubt, excluding the Excluded Contracts and all other contracts to
which the Vendor is a party) together with all such contracts
entered into (with the consent of the Purchaser where required
pursuant to this Agreement) by or on behalf of the Vendor in
relation to the Business between the date of this Agreement
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(including such day) and the Completion Date and remaining
unperformed (in whole or in part) by the Vendor at the Completion
Date;
COVENANTORS: means any member of the EIS Group and any purchaser
after the date hereof of any of the Retained Businesses;
DISCLOSURE LETTER: the letter dated the date of this Agreement from
the Vendor to the Purchaser making certain disclosures against the
Warranties;
EIS GROUP: means EIS and any company which is from time to time a
holding company of EIS, a subsidiary of EIS or a subsidiary of a
holding company of EIS;
EMPLOYEES: means the employees of the Business whose names are set
out in Schedule 5;
ENCUMBRANCES: includes any interest or equity of any person or any
mortgage, charge, pledge, lien, right of set-off, assignment,
hypothecation, security interest, title retention, letter of
inhibition, standard security and floating charge or any other
security;
ENVIRONMENT: means all, or any, of the following media namely the
air, water and land and the medium of air includes without
limitation the air within buildings and the air within other natural
or man-made structures above or below ground;
ENVIRONMENTAL CLAIM: means all claims, demands, actions, proceedings
or other enforcement action made or brought against the Purchaser by
any competent authority and/or any third party pursuant to any
Environmental Law that arise directly or indirectly from the
carrying on of the Business or which are otherwise attributable to
the period prior to the Completion Date other than any claim which
is solely attributable to any act of the Purchaser following
Completion;
ENVIRONMENTAL CONSENTS: means any licence or consent or
authorisation required by Environmental Law in relation to either
the carrying on of the Business or any relevant circumstance at any
of the Properties;
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ENVIRONMENTAL LAW: means all applicable European Community
regulations and directives, all statutes and sub-ordinate
legislation, all regulations and orders, all common law which:-
(i) have as a purpose or effect the prevention of harm to human
health or to the Environment or to living organisms supported
by the Environment and relate to the presence, manufacturing,
processing, treatment, keeping, handling, use, possession,
supply receiving, sale, purchase, import, export or
transportation of Hazardous Materials or Waste;
(ii) relate to the release, spillage, deposit, escape, discharge,
leak or emission of Hazardous Materials or Waste; or
(iii) relate to noise, vibration, radiation or common law or
statutory nuisance or any other interference with the enjoyment
or use of land;
EXCLUDED ASSETS: means the assets referred to in Clause 4 as being
excluded from the sale pursuant to this Agreement;
EXCLUDED CONTRACTS: the Iranian Supply Contract, the Skinner
Contract, the Completed Contracts and the Retained Contracts;
EXPERT: means Arthur Andersen of Bank House, Charlotte Street,
Manchester Ml 41:1);
FIXED ASSETS: means all plant, equipment and machinery, fixtures and
fittings (other than the landlords' fixtures and fittings listed in
the schedule being in the Agreed Form marked "J" and the Excluded
Assets), wherever situated which are owned by the Vendor as at the
date hereof in connection with the Business including, without
limitation, those items particulars of which are listed in Schedule
6 together with all plant, equipment and machinery, fixtures and
fittings (other than landlord's fixtures and fittings) purchased
(with the consent of the Purchaser where required pursuant to this
Agreement) by the Vendor in connection with the Business between
the date hereof (including such day) and the Completion
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Date and owned by the Vendor as at the Completion Date;
FS MANCHESTER BUSINESS: means the business carried on by FS
Manchester prior to the date hereof with respect to the manufacture,
installation and commissioning of machinery for producing rubber
products, spare parts, repairs and refurbishment in respect of such
machinery as detailed in Part 1 of Schedule 1;
FS MANCHESTER GOODWILL: means the goodwill and the Know-how of the
Vendor in relation to the FS Manchester Business together with the
exclusive right for the Purchaser (and its successors and assigns)
to carry on and represent itself as carrying on the FS Manchester
Business in succession to the Vendor;
FS MANCHESTER PROPERTY LEASE: means a lease of the FS Manchester
Property between Francis Shaw & Company (Manchester) Limited (1) and
the Purchaser (2) in the Agreed Form marked "B";
FS MANCHESTER STOCK: means the stock-in-trade of the FS Manchester
Business as at the Completion Date including (without limitation),
work-in-progress, stocks of raw materials, components, goods
purchased for resale, partly finished and finished stocks, packaging
and promotional material and parts whether on order, in transit or
in stock wherever held (including any items which, although subject
to reservation of title by suppliers, are under FS Manchester's
control);
FS MANCHESTER PROPERTY: means the land and buildings at Corbett
Street, Ashton New Road, Manchester M11 4BB more fully described in
the FS Manchester Property Lease;
FSRM BUSINESS: means the business carried on by FSRM prior to the
date hereof with respect to the manufacture, installation and
commissioning of machinery for producing rubber products and spare
parts, repairs and refurbishment in respect of such machinery as
detailed in Part 2 of Schedule 1;
FSRM GOODWILL: means the goodwill and the Know-How of the Vendor in
relation to the FSRM Business together with the exclusive right for
the Purchaser (and its successors and assigns) to carry on and
represent itself as carrying on the
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FSRM Business in succession to the Vendor;
FSRM STOCK: means the stock-in-trade of the FSRM Business as at the
Completion Date including (without limitation), work-in-progress,
stocks of raw materials, components, goods purchased for resale,
partly finished and finished stocks, packaging and promotional
material and parts whether on order, in transit or in stock wherever
held (including any items which, although subject to reservation of
title by suppliers, are under FSRM's control);
GOODWILL: means the FS Manchester Goodwill, the FSRM Goodwill and
the PRC Goodwill together with the exclusive right for the Purchaser
to use the brand names "Shaw Rubber Machinery", "Shaw Intermix" and
"Intermix";
HAZARDOUS MATERIAL: means any Substance or organism whose presence
use or disposal is prohibited or controlled by law which alone or in
combination with others is capable of causing either harm or damage
to property or to man or any other organism supported by the
Environment;
HIRE AGREEMENTS: means all those contracts, engagements or orders
entered into prior to the date hereof by or on behalf of the Vendor
in relation to the leasing, lease purchase or hire of goods or
equipment for use in the ordinary course of the Business which on
the date hereof remain to be performed in whole or in part
including, without limiting the generality of the foregoing words,
all those contracts particulars of which are set out in Schedule 8
together with all such contracts entered into (with the consent of
the Purchaser where required pursuant to this Agreement) by or on
behalf of the Vendor in relation to the Business between the date
hereof (including such day) and the Completion Date and remaining
unperformed (in whole or in part) by the Vendor at the Completion
Date;
INSTALLATION OBLIGATIONS: means those obligations to install and
commission machinery and equipment of FSRM as detailed in Schedule
7;
INSURED CONTRACTS: means all those contracts particulars of which
are set out in Schedule 15;
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INTELLECTUAL PROPERTY: means all patents, technical information,
know-how and other confidential information, (including, but not
limited to, research and development), trade marks and service marks
(whether registered or unregistered), trade or brand names,
copyright, design copyright, registered designs and any equivalent
thereof under the laws of any country and any pending applications
for registration of any of the foregoing and owned by the Vendor
and/or EIS and used predominantly in connection with the Business
including, but not limited to, the intellectual property,
particulars of which are set out in Schedule 11;
IRANIAN SUPPLY CONTRACT: means all contracts for the supply of
rubber processing machinery to Iran Kafpoush;
KNOW-HOW: industrial information and techniques assisting in the
manufacture or processing of goods and materials;
LEASE: has the meaning ascribed to it in Schedule 9;
LONDON STOCK EXCHANGE: means London Stock Exchange Limited;
MATERIAL CONTRACTS: means the contracts relating to the Business
listed and marked with an asterisk in Schedule 4;
THE PARTIES: the parties to this Agreement;
PATENT ASSIGNMENTS: means the assignment of the patents referred to
therein in the Agreed Form marked "Fl" to "F2";
POLICY: the export credit insurance policy No.185881101 in force
with Trade Indemnity plc in favour of the Vendor;
PRC BUSINESS: means the business carried on by PRC prior to the date
hereof with respect to the manufacture of metal fabrications as
detailed in Part 3 of Schedule 1;
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PRC GOODWILL: means the goodwill and the Know-How of the Vendor in
relation to the PRC Business together with the exclusive right for
the Purchaser (and its successors and assigns) to use the name "PRC
Fabrications" and to carry on and represent itself as carrying on
the PRC Business in succession to the Vendor;
PROPERTY: has the meaning ascribed to it in Schedule 9;
PRC PROPERTY: means the leasehold property at Vaughan Industrial
Estate, Vaughan Street, Manchester M12 5BT more fully described in
the Lease;
PRC PROPERTY ASSIGNMENT: the assignment of the Lease of the PRC
Property in the Agreed Form marked "A";
PRC STOCK: means the stock-in-trade of the PRC Business as at the
Completion Date including (without limitation), work-in-progress,
stocks of raw materials, components, goods purchased for resale,
partly finished and finished stocks, packaging and promotional
material and parts whether on order, in transit or in stock wherever
held (including any items which, although subject to reservation of
title by suppliers, are under the PRC's control);
PURCHASER'S GROUP: means the Purchaser and any company which is from
time to time a holding company of the Purchaser, a subsidiary of the
Purchaser or a subsidiary of a holding company of the Purchaser;
PURCHASE PRICE: means the purchase price for the Business and the
Assets specified in Clause 5;
PURCHASER'S SOLICITORS: means Macfarlanes of 10 Norwich Street,
London EC4A 1BD;
RECORDS: means all lists of customers, credit reports, price lists,
product cost schedules (including all available records of stock,
work in progress and raw materials) work
tickets, catalogues, advertising and all the other documents,
papers and records (however stored), relating to the Business
excluding, for the avoidance
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of doubt, the Books of Account and the statutory books of the
Vendor and any records relating to the Retained Businesses;
REMEDIAL ACTION: means removing, remedying, cleaning up, abating,
containing or ameliorating the presence or effect of Hazardous
Materials or Waste in the Environment at the Completion Date arising
out of the conduct of the Business or in existence at or about the
Properties;
RETAINED BUSINESSES: means the businesses carried on as at the date
of this Agreement by FS Manchester other than the FS Manchester
Business;
RETAINED CONTRACTS: means those contracts that remain outstanding
at the Completion Date and to be completed directly or indirectly by
the Retained Businesses, details of which are set out in Schedule
13;
RETAINED STOCK: means the stock-in-trade of the Retained Businesses
as at the date hereof including (without limitation) work-in-
progress, stocks of raw materials, components, partly finished and
finished stocks, packaging and promotional material and parts
whether on order, in transit or in stock wherever held;
RUSSIAN ENQUIRY: the document numbered A2/4/E3 in the schedule to
the Disclosure Letter;
SKINNER CONTRACT: the agreement dated 18 September 1996 and made
between Francis Shaw & Company (Manchester) Limited and Skinner
Engine Company;
STOCK: means the stock-in-trade of the Business being the FS
Manchester Stock, the FSRM Stock and the PRC Stock,
SUBSTANCE: includes any natural or artificial matter, whether in
solid or liquid form or in the form of a gas or vapour and for this
purpose shall include electricity or heat;
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TAXES ACT 1988: means the Income and Corporation Taxes Act 1988;
TRADE MARK ASSIGNMENTS: means the assignments of the Trade Marks
referred to therein in the Agreed Form marked "El" to "E2";
TRADE MARK LICENCE: means the trade mark licence between FS
Manchester and the Purchaser in the Agreed Form marked "H" granting
the Purchaser the right to use the trade mark "Francis Shaw" in
connection with the Business for a period of 3 years from
Completion;
TRANSFER REGULATIONS: means the Transfer of Undertakings
(Protection of Employment) Regulations 1981;
THE UK PATENTS: the patents registered in or applied to be
registered in the UK as referred to in the Patent Assignments;
VATA: means the Value Added Tax Act 1994;
VAT: means value added tax;
VENDOR'S SOLICITORS: means Theodore Goddard of 150 Aldersgate
Street, London EClA 4EJ;
WARRANTIES: means the warranties, representations and undertakings
specified in Schedule 2;
WASTE: includes any Substance which constitutes an effluent or any
other unwanted surplus Substance arising from the application of any
process and any Substance or article which requires to be disposed
of as being broken, worn out, contaminated or otherwise spoiled.
1.1.1 reference to a document as "in the Agreed Form" means that document
in a form agreed and a copy of which has been initialled for the
purposes of identification by or on behalf of the Purchaser and the
Vendor;
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1.1.2 references to any statutory provision include any re-enactment
or statutory modification or extension thereof (whether before or
after the date hereof) and any statutory provision of which the
provision referred to is a re-enactment (whether with or without
modification) and also include any orders, regulations, instruments
or other subordinate legislation made under any such statutory
provisions;
1.1.3 the masculine gender includes the feminine and neuter and the
singular number includes the plural and vice versa;
1.1.4 references to clauses, sub-clauses and Schedules are references to
clauses and sub-clauses of and schedules to this Agreement;
1.1.5 where any statement is qualified by the expression "so far as the
Vendor is aware" or any similar expression that statement shall be
deemed to include an additional statement that it has been made
after due and careful enquiry of (without limitation) Messrs
Rothwell, Cowell, Thomas, Johnson, Masters, Wood-Hill, Haslehurst
and Hobbs. The Purchaser acknowledges and confirms that the
individuals named in this Clause 1.1.5 shall have no liability
whatsoever to the Purchaser in respect of any representations made
to the Purchaser or disclosures made against the Warranties;
1.1.6 words and phrases the definitions of which are contained or referred
to in Part XXVI of the Companies Act 1985 shall be construed as
having the meaning thereby attributed to them.
1.2 The Schedules hereto form part of and are incorporated in this
Agreement.
1.3 Headings and sub-headings are included for ease of reference only
and shall not affect the interpretation of this Agreement.
1.4 Unless expressly provided otherwise, all representations,
warranties, undertakings, covenants, agreements and obligations
made, given or entered into in this Agreement by more than one
person are made, given or entered into jointly and severally.
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2 CONDITIONS
2.1 Completion of this Agreement shall be conditional upon:-
2.1.1 the Vendor complying with its obligations under the Transfer
Regulations which shall include informing and consulting with
appropriate representatives (within the meaning of the Transfer
Regulations) of the Employees together with evidence to the
Purchaser's satisfaction that the appropriate representatives of the
Employees are reasonably satisfied with the consultation process
conducted by the Vendor.
2.1.2 the receipt by the Purchaser of the formal licence to assign the PRC
Property in terms satisfactory to the Purchaser.
2.1.3 the receipt by the Purchaser of written confirmation from the
parties thereto in terms satisfactory to the Purchaser of consent to
the assignment of the Material Contracts.
2.2 The Vendor shall use all reasonable endeavours to procure that each
of the conditions set out in Clause 2.1 are satisfied as soon as
possible but in any event not later than 7 January 1998;
2.3 In the event of any of the conditions in Clauses 2.1.1 to 2.1.3
(inclusive) not being satisfied by the Vendor or waived in writing
by the Purchaser, before 7 January 1998 then the provisions of this
Agreement (with the exception of this Clause and Clauses 11, 22.1
and 22.11, which shall continue in full force and effect) shall be
null and void and of no further effect and the Parties shall be
released and discharged from their respective obligations under this
Agreement save that the Vendor shall pay the Purchaser's costs and
expenses incurred in connection with the negotiation and preparation
of this Agreement not exceeding <pound-sterling>35,000 (excluding
VAT).
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3 SALE AND PURCHASE
3.1 Subject to the terms of this Agreement the Vendor shall sell with
full title guarantee, or transfer or procure the sale or transfer
with full title guarantee, and the Purchaser (relying on the
Warranties, representations and undertakings in this Agreement)
shall purchase with effect from the Completion Date free from all
claims or Encumbrances for the Purchase Price the Business as a
going concern together with the following assets:-
3.1.1 the Fixed Assets;
3.1.2 the Goodwill;
3.1.3 the benefit (subject to the burden) of the Contracts;
3.1.4 the Stock;
3.1.5 the Intellectual Property;
3.1.6 the Records;
3.1.7 the Business Information;
3.1.8 the Computer System;
3.1.9 the Know-How
3.1.10 the UK Patents;
3.1.11 all the rights of the Vendor against manufacturers, suppliers and
third parties (including without limitation all rights in connection
with such manufacturers', suppliers' and third parties' warranties
and representations) with respect to parts, services and any other
materials and merchandise purchased by the Vendor from such
manufacturers, suppliers and third parties and sold to the Purchaser
hereunder;
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3.2 The sale and purchase of each of the assets shall be inter-dependent
and shall be completed simultaneously.
3.3 All property in, and title to the Assets shall pass to the Purchaser
on the Completion Date.
3.4 Subject to the provisions of this Agreement, the Vendor shall with
effect from the Completion Date wholly discontinue carrying on the
Business and the Purchaser shall be exclusively entitled to carry on
and continue the Business and hold itself as doing so in succession
to the Vendor.
4 EXCLUSIONS FROM THE SALE
4.1 There shall be excluded from the sale and purchase hereby effected
any assets not specifically included pursuant to Clause 3 and, for
the avoidance of doubt, the following assets, liabilities and
obligations:-
4.1.1 the Book Debts;
4.1.2 all cash of the Business whether in hand or on deposit at any bank;
4.1.3 all liabilities for VAT, PAYE and National Insurance Contributions
incurred up to the Completion Date;
4.1.4 the Retained Businesses;
4.1.5 the Excluded Contracts;
4.1.6 all creditors and all other liabilities arising in relation to any
of the operations of the Business as at the Completion Date; and
4.1.7 all liabilities in relation to the Employees in respect of the
period prior to Completion.
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5 PURCHASE PRICE
5.1 The Purchase Price shall be the sum of <pound-sterling>6,500,002
which shall be apportioned as follows and such values shall be
adopted by the Parties for all purposes (including for the
purposes of tax and stamp duty):
<pound-sterling>
(a) the Fixed Assets; 2,500,000
(b) the Goodwill (including the Intellectual Property 500,000
but excluding the Know-How and the UK
Patents)
(c) the UK Patents 100,000
(d) the Stock 3,000,000
(e) the Know-How 400,001
(f) all other assets referred to in Clause 3.1 1
----------
TOTAL: 6,500,002
==========
5.2 The Purchase Price shall be paid by the Purchaser by telegraphic
transfer at Completion in accordance with Clause 8.3.1.
6 CONDUCT OF BUSINESS PRIOR TO COMPLETION
6.1 The Vendor hereby covenants with the Purchaser that between the
date of this Agreement and Completion it shall keep the Purchaser
informed of the conduct of the Business and take account of the
reasonable directions of the Purchaser in relation to the conduct
of the Business and, in particular but without limitation to the
generality of the foregoing, the Vendor:-
6.1.1 shall carry on the Business in the normal course and in the same
manner as it is presently carried on as regards the nature, scope
and manner of conducting it and so as to maintain it as a going
concern, and the Business will be conducted in an efficient,
businesslike and prudent manner;
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6.1.2 shall not dispose of or remove from the Properties any physical
assets of the Business save in the ordinary course of normal
day-to-day business;
6.1.3 shall use its best endeavours to maintain the Goodwill and the trade
and trade connections of the Business and will not by any action,
omission, default or neglect knowingly damage or risk damage to the
same;
6.1.4 shall not enter into any contract or commitment of any unusual
nature or outside the ordinary course of business or any contract
of any kind having a value in excess of <pound-sterling>250,000;
6.1.5 shall not create any mortgage, charge, lien or encumbrance over all
or any of the Assets;
6.1.6 shall not alter any of the terms of any agreement with any supplier,
customer or employee is made;
6.1.7 shall not engage any new employees of the Business, shall not
purchase plant, machinery, equipment or the like, nor incur any
capital expenditure or commitment;
6.1.8 shall procure that the insurance policies now in effect are
maintained in full force and effect and without reduction in value
or scope of cover with respect to any part of the Business or
Assets;
6.1.9 shall keep the Purchaser informed of all discussions and
negotiations conducted by or on behalf of the Vendor in relation
to the Russian Enquiry;
6.1.10 shall procure that any software licences in respect of the Computer
System which require formal assignment to the Purchaser shall be
assigned at the Vendor's cost to the Purchaser on Completion and
failing such assignment the Vendor shall procure at its cost that
adequate substitute licences are made available to the Purchaser to
enable the Purchaser to operate the Computer System to the same
standard as prior to Completion as soon as practicable following
Completion; and
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6.1.11 shall renegotiate the Barwell Contract so that the notice period
referred to therein relating to the termination of the Barwell
Contract is reduced to 12 months on either side.
7 VALUE ADDED TAX
7.1 The Parties intend that section 49(1) of VATA and paragraph 5 of the
Value Added Tax (Special Provisions) Order 1995 ("paragraph 5") will
apply to the sale of the Business and Assets hereunder and
accordingly:-
7.1.1 the Purchaser declares its intention to use the Assets in carrying
on the same business as the Vendor following the Completion Date;
7.1.2 the Vendor and the Purchaser will each use all reasonable endeavours
to secure that the sale of the Assets hereunder is treated as
neither a supply of goods nor a supply of services for the purposes
of VAT;
7.1.3 the Vendor and the Purchaser will give notice of the transfer to
H.M. Customs & Excise;
7.1.4 if it has not done so prior to the date hereof the Vendor will send
to H.M. Customs & Excise a letter seeking a direction that the
Vendor be permitted to keep and preserve the records referred to in
Section 49(1) of VATA which relate to the Business and Assets during
the period prior to the Completion Date, and:
7.1.4.1 if such direction is given the Vendor shall preserve such
records in good order in such manner and for such period
as shall be required by law and will give the Purchaser
reasonable access during the normal business hours to such
records; or
7.1.4.2 if such direction is not given but H.M. Customs rule that
the sale of the Property falls within paragraph 5 the
Vendor shall deliver all such records to the Purchaser as
soon as possible after the Completion Date and the
Purchaser will preserve such records in
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good order in such manner and for such period as shall be
required by law and will give the Vendor reasonable access
during normal business hours to such records; and
7.1.5 if VAT should be held to be chargeable on the sale hereunder or on
any part thereof then the Purchaser agrees that the VAT will be in
addition to the Purchase Price and the Purchaser will (against
delivery of proper tax invoices) pay the amount of any such VAT.
8 COMPLETION
8.1 Completion shall take place at the offices of the Vendor's
Solicitors on the second Business Day following receipt by the
Purchaser of written notification from the Vendor that the Vendor
has satisfied all of the conditions set out in Clause 2.1 (or
following receipt by the Vendor of written notification from the
Purchaser that all of or the last of such conditions to be satisfied
have been waived in writing by the Purchaser).
8.2 On Completion:
8.2.1 the Purchaser shall be entitled to possession (wherever the same
may be situated) of all items comprised in the Fixed Assets and all
documents of title relating thereto;
8.2.2 the Vendor shall deliver to the Purchaser:
8.2.2.1 a duly executed assignment of the Goodwill in the
Agreed Form marked "C";
8.2.2.2 the Trade Mark Assignments duly executed;
8.2.2.3 the Patent Assignments duly executed;
8.2.2.4 the Business Information, Records, all original
documents relating to the Intellectual Property and
all records relating to the
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Employees so far as the Purchaser shall require the same
PROVIDED THAT the Purchaser hereby undertakes to preserve
the same for a period of three years from Completion and
to afford the Vendor during such period reasonable access
thereto during normal business hours upon at least 14 days
notice in writing having been given to the Purchaser and
the opportunity at the Vendor's expense to take copies
thereof or extracts therefrom;
8.2.2.5 a copy of the minutes of a meeting of the directors of the
Vendor and EIS authorising the execution by the Vendor and
EIS of this Agreement and all documents ancillary hereto;
8.2.2.6 all other physical assets hereby agreed to be sold with the
intent that title therein shall pass by and upon such
delivery;
8.2.2.7 the duly executed PRC Property Assignment and the duly
executed FS Manchester Property Lease together with the
title deeds and documents relating to the PRC Property;
and
8.2.2.8 a copy, certified by the Vendor's Solicitors as a true and
complete copy, of a release of the Assets in the Agreed
Form marked "I" from Barclays Bank plc in respect of the
fixed and floating charge granted by FS Manchester on 11
September 1995 over the whole of its undertaking, property
and assets;
8.2.2.9 the duly executed Operating Agreement being in the Agreed
Form marked "G";
8.2.2.10 the Trade Mark Licence duly executed by EIS;
8.2.2.11 a certified copy of the special resolution of FSRM changing
the name of FSRM to a name which does not include the words
"Francis Shaw Rubber" or any name similar thereto and a
special resolution of PRC changing the name of PRC to a
name which does not include "PRC" or any name similar
thereto;
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8.2.2.12 all agreements relating to the use of confidential
information by the Vendor and relating to the
Business; and
8.2.2.13 the duly executed know-how tax election being in
the Agreed Form marked "M".
8.2.3 the Vendor shall ensure that all stock related to the
Retained Businesses is separated from the Assets.
8.3 On Completion the Purchaser shall following performance
by the Vendor of its obligations under Clause 8.2:
8.3.1 pay the sum of <pound-sterling>6,500,002 to National
Westminster Bank plc, Account No. 03012581, Sort Code
50-00-00 by way of bank telegraphic transfer;
8.3.2 deliver to the Vendor a counterpart of the following documents
duly executed by the Purchaser:-
8.3.2.1 the Trade Mark Assignments;
8.3.2.2 the Patent Assignments;
8.3.2.3 the assignment of Goodwill;
8.3.2.4 the PRC Property Assignment and the FS Manchester
Property Lease;
8.3.2.5 the Trade Mark Licence;
8.3.2.6 the Operating Agreement; and
8.3.3 a copy of the minutes of a meeting of the directors of the
Purchaser and Farrel authorising the execution by the Purchaser
and Farrel of this Agreement and all documents ancillary hereto.
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8.4 This Agreement shall notwithstanding Completion remain in full force
and effect in regard to any of the provisions remaining to be
performed or carried into effect and (without prejudice to the
generality of the foregoing) in regard to all obligations,
guarantees, representations, undertakings and warranties contained
herein or in any Schedule.
9 VALUATION OF THE STOCK
9.1 The Vendor shall on Completion procure that all of the Stock shall
be segregated from the Retained Stock and labelled. The Purchaser
shall carry out a physical stock take of the Stock (excluding the
Retained Stock) with the Vendor in attendance to commence on
Completion and the Vendor shall issue to the Purchaser as soon as
practicable thereafter but in any event not later than 35 Business
Days following the date of this Agreement a letter confirming the
value of the Stock ("the Provisional Value") and setting out the
basis of calculating the same including details of the items of the
Stock item by item together with copies of all documents in the
possession of the Vendor supporting the value and basis of
calculation of the Stock.
9.2 The Stock shall be valued in accordance with all applicable UK
Accounting Standards (SSAPs and FRSs).
9.3 Subject to Clause 9.2, the Stock shall be valued at the lower of
actual historical cost and net realisable value (taking account of
levied late delivery charges and penalties) and such figure shall be
reduced by the amount of any payments received by the Vendor from
customers in respect of orders currently in work in progress. Full
provision shall be made against the stock of parts used exclusively
in the Intermix Mark I and Mark II rubber mixers.
9.4 If the aggregate value of the Stock is less than
<pound-sterling>3,000,000 the Vendor shall pay to the Purchaser the
amount of the shortfall within 5 Business Days after the agreement
or determination of the aggregate value of the Stock.
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<PAGE>
9.5 If the Purchaser informs the Vendor in writing within 3 Business
Days of receipt of the letter referred to in Clause 9.1 that it
disagrees with the Provisional Value and such disagreement is not
resolved by the Vendor and the Purchaser within 10 Business Days the
dispute shall be immediately referred to the Expert by the Vendor
and the Purchaser signing and sending to the Expert an Instruction
Letter in the Agreed Form marked "Dl" and the decision of the Expert
(reached as experts and not as arbitrators) shall be final and
binding on the parties hereto. For the avoidance of doubt, the costs
of the Expert shall be borne equally by the Vendor and the
Purchaser.
10 WARRANTIES
10.1 The Vendor warrants, represents and undertakes to the Purchaser in
the terms of Schedule 2, and acknowledges that the Purchaser is
entering into this Agreement in reliance on the Warranties.
10.2 The Warranties:-
10.2.1 shall be separate and independent and save as expressly provided
shall not be limited by reference to or inference from any other
paragraph or anything in this Agreement;
10.2.2 are qualified by reference to those matters fully and fairly
disclosed in the Disclosure Letter and not otherwise. In particular,
the rights and remedies of the Purchaser in respect of the
Warranties shall not be affected by any investigation made by or on
behalf of the Purchaser into the Business or the Assets.
10.2.3 will be fulfilled down to and will remain true and accurate in all
respects and not misleading at Completion as if they had been
entered into afresh at Completion by reference to the facts and
circumstances then existing.
10.3 The Vendor undertakes to the Purchaser that if between the date of
this Agreement and Completion, any event (including for the
avoidance of doubt any omission) occurs which results, or which may
result, in any of the Warranties being unfulfilled or incorrect at
Completion then they will immediately on becoming
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aware of such event and in any event before Completion give the
Purchaser written notice of that event and its consequences.
10.4 If, before Completion, it is found that any of the Warranties has
not been fulfilled or is incorrect (and the Purchaser considers, in
its reasonable opinion, that such breach is material) the Purchaser
(or its successors in title) shall be entitled by notice in writing
given to the Vendor before Completion to rescind this Agreement but
failure to exercise this right shall constitute a waiver of any
other rights of the Purchaser or its successors in title arising
out of such breach of any of the Warranties. Rescission of this
Agreement under this Clause shall extinguish any right to damages to
which the Purchaser or its successors in title may be entitled in
respect of the breach of this Agreement save that the Purchaser
shall be entitled to be paid by the Vendor <pound-sterling>35,000
plus VAT towards its costs and expenses incurred in connection with
the preparation and negotiation of this Agreement.
10.5 If, before Completion, it is found that any of the Warranties has
not been fulfilled or is incorrect (and Purchaser considers, in its
reasonable opinion, that such breach is not material) the Purchaser
(or its successor in title) shall not be entitled to rescind this
Agreement but shall be entitled to exercise any other rights arising
out of such breach of any of the Warranties.
10.6.1 The liability of the Vendor in respect of any breach of the
Warranties shall be limited as follows:-
10.6.1.1 there shall be disregarded for all purposes (including,
for the avoidance of doubt, the application of the
threshold in Clause 10.6.1.2) any breach of any of the
Warranties in respect of which the amount which the
Purchaser would otherwise (but for the provisions of this
Clause 10.6.1.1) be entitled to recover would be less than
<pound-sterling>10,000;
10.6.1.2 subject to the provisions of Clause 10.6.1.1 the
Purchaser shall not be entitled to recover any amount in
respect of a breach of the Warranties unless the amount
recoverable, when aggregated with all other amounts
recoverable for breach of the Warranties
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<PAGE>
exceeds <pound-sterling>50,000, in which event this
limitation shall cease to apply and the whole of such
amount shall be recoverable and not merely the excess
over <pound-sterling>50,000; and
10.6.1.3 the aggregate liability of the Vendor in respect of all and
any breach of the Warranties or under Schedule 14 shall be
limited to and shall in no event exceed
<pound-sterling>3,250,000.
10.6.2 For the avoidance of doubt, the limitations referred to in Clause
10.6.1 shall not apply to any claim by the Purchaser under Clause 9
or under the indemnities referred to in Clauses 13 and 14.
10.7 Any amount paid by the Vendor to the Purchaser under this Agreement
shall be treated as a reduction in the Purchase Price.
10.8.1 The Vendor shall cease to have any liability for breach of any of
the Warranties on 30 June 1999.
10.8.2 If any matter comes to the notice of the Purchaser which may give
rise to a liability under the Warranties, the Purchaser shall as
soon as reasonably practicable give written notice of that matter to
the Vendor, specifying all material details of the breach or other
event to which such claim shall relate as shall be known to the
Purchaser and, so far as is practicable, the Purchaser's bona fide
estimate of the amount thereof.
10.9 The Purchaser shall not be entitled to recover any sum in respect of
any claim for breach of any of the Warranties or otherwise obtain
reimbursement or restitution more than once in respect of the same
fact or subject matter.
10.10 In the event of the Vendor having paid to the Purchaser an amount in
respect of a claim under this Agreement and subsequent to the date
of making such payment the Purchaser recovers from a third party
(whether by payment, discount, credit, relief or otherwise
howsoever) a sum which is referable to that payment then the
Purchaser shall forthwith repay to the Vendor so much of the amount
paid by the third party less the costs (including any tax
chargeable, unless such tax is
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otherwise recoverable) of the Purchaser in recovering such sum as
does not exceed the sum paid by the Vendor to the Purchaser.
10.11 In the event that the Purchaser shall be in receipt of notice of any
claim which might constitute or give rise to a claim under this
Agreement, the Purchaser shall as soon as reasonably practicable
notify the Vendor giving full details as far as practicable and
shall (subject to being indemnified and secured by the Vendor to the
Purchaser's reasonable satisfaction) not settle or compromise any
such claim or make any admission of liability without first
consulting the Vendor. Subject to the Business not being materially
prejudiced the Purchaser shall take account of the views of the
Vendor (provided that such views are promptly communicated to the
Purchaser) before taking any steps, proceedings or actions in
relation to defending any such claim.
10.12 If a breach of this Agreement shall be in respect of a matter where
the Purchaser shall be insured against any loss or damage arising
therefrom, the Purchaser shall after being compensated by the Vendor
under this Agreement procure that it shall make and diligently
pursue a claim against its insurers for compensation for such loss
or damage suffered and any insurance proceeds shall (after payment
of the Purchaser's expenses including management time incurred in
pursuing such claim against its insurers) be applied in a repayment
to the Vendor of the amount paid by the Vendor.
10.13 Nothing in this Agreement shall be deemed to relieve the Purchaser
from any common law duty to mitigate any loss or damage incurred by
it.
10 14 For the avoidance of doubt, no matter or fact (including,
without limitation, any matter or fact relating to the method or
policies of accounting) disclosed or deemed to be disclosed in or by
virtue of the terms of the Disclosure Letter shall limit or affect
the liability of the Vendor or EIS under Clauses 9, 13, 14, 20 of or
Schedule 14 to this Agreement or be taken into account for the
purposes of such Clauses and Schedule.
10.15 The Purchaser warrants to the Vendor that:
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10.15.1 it has not relied on any representation, warranty, covenant or
undertaking of the Vendor or any other persons save for any
representation, warranty, covenant or undertaking expressly set out
in this Agreement;
10.15.2 the Purchaser has power to enter into this Agreement and to
perform the obligations expressed to be assumed by it and has taken
all necessary corporate action to authorise the execution, delivery
and performance of this Agreement;
10.15.3 the execution, delivery and performance of the terms of this
Agreement by the Purchaser will not violate any provision of:
10.15.3.1 any law or regulation or any order or decree of any
authority, agency or court binding on the Purchaser;
10.15.3.2 the Memorandum or Articles of Association of the
Purchaser;
10.15.3.3 any loan stock, bond, debenture or other deed, mortgage,
contract or other undertaking or instrument to which
the Purchaser is a party;
10.15.4 in acquiring the Business and Assets hereunder the Purchaser is
acting as principal and not as agent or broker for any other
person;
10.15.5 the Purchaser is registered for VAT.
11 CONFIDENTIAL INFORMATION
11.1 EIS hereby undertakes to the Purchaser that it shall not and shall
procure that no other Covenantor shall at any time after Completion
divulge or communicate to any person or otherwise make use of other
than on the written instructions of the Purchaser or to the extent
required by law or by the rules of regulations of the London Stock
Exchange or any other recognized investrnent exchange (as defined by
section 207 of the Financial Services Act 1986) any confidential
information concerning the Assets, the Business, the accounts,
finance or contractual arrangements or other dealings, transactions
or affairs of or relating to the
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Business which may be within or may come to its knowledge and will
use its best endeavours to prevent the publication or disclosure of
any such information by any third party provided that the provisions
of this Clause 11.1 shall not prevent EIS or any member of the EIS
Group or a Covenantor disclosing to any person information that
principally relates to the Retained Businesses notwithstanding that
such information may refer to or contain information in respect of
the Business.
11.2 The Purchaser hereby undertakes to EIS that it shall not and shall
procure that no member of the Purchaser's Group will at any time
divulge or communicate to any person or otherwise make use of any
confidential information relating to the Retained Businesses which
it may have acquired prior to Completion or which it may acquire
following Completion as a result of the entering into of this
Agreement provided that: -
11.2.1 the Purchaser shall in no event be liable pursuant to Clause 11.2
in respect of any such divulgence or communication made by
Employees; and
11.2.2 the provisions of Clause 11.2 shall not prevent the Purchaser or
any member of the Purchaser's Group disclosing to any person
information that principally relates to the Business notwithstanding
that such information may refer to or contain information in respect
of the Retained Businesses;
11.2.3 the provisions of Clause 11.2 shall not apply to information which
the Purchaser can demonstrate to be information:-
11.2.3.1 which at the time of disclosure is within the public
domain; or
11.2.3.2 which falls into the public domain through no fault on the
part of the Purchaser; or
11.2.3.3 which is received by the Purchaser from a third party who
is lawfully in possession of such information; or
11.2.3.4 disclosure of which the Purchaser reasonably deems
necessary to comply with any legal obligation;
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12 ASSETS INCAPABLE OF TRANSFER
12.1 Subject to Clause 12.2, the Vendor shall assign to the Purchaser and
the Purchaser shall accept an assignment of and shall take over from
the Vendor at and with effect from the Completion Date the benefit
of the Contracts provided that nothing in this Agreement:-
12.1.1 shall require the Purchaser to perform any obligation falling due
for performance or which should have been performed before the
Completion Date;
12.1.2 shall make the Purchaser liable for any act, neglect, default or
omission in respect of any of the Contracts prior to the Completion
Date or for any claim, expense, loss or damage arising from any
failure to obtain the consent or agreement of any third party to
this Agreement or for any breach of any of the Contracts caused by
this Agreement or its completion;
12.1.3 shall impose any obligation on the Purchaser for or in respect of
any product delivered by the Vendor or any service performed by the
Vendor prior to the Completion Date.
12.2 Insofar as any consent or sanction of any third party is required to
the transfer of any of any of the Assets and such consent or
sanction shall not have been received at Completion:
12.2.1 the Vendor shall use its best endeavours with the Purchaser's
cooperation to obtain any necessary consent of any person not a
party hereto to the transfer to the Purchaser of the Business as a
going concern which is necessary to vest in the Purchaser full
right and title to and enjoyment of any of the Assets;
12.2.2 nothing in this Agreement shall be deemed to operate as such a
transfer or assignment as would give rise to any termination or
forfeiture of any benefit, right or interest of any person in any of
the Assets;
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12.2.3 until such time as such consent or sanction is received the Vendor
shall be deemed to be holding the relevant Assets and the benefit
thereof in trust for the Purchaser and shall account to the
Purchaser for any sums or other benefits received by the Vendor in
relation thereto provided that the Purchaser shall have the right to
perform, in place of the Vendor, any Contract as sub-contractor,
agent, licensee or sub-licensee (as the case may be) to the extent
that such performance is permissible and lawful under such contract;
12.2.4 until such time as such consent or sanction is received the Vendor
shall (so far as it lawfully may do so) act under the direction of
the Purchaser in all matters relating to any such Contracts for so
long as the Vendor is required and authorised so to do by the
Purchaser.
13 EMPLOYEES
13.1 The Vendor and the Purchaser acknowledge that the transfer of the
business pursuant to this Agreement constitutes a relevant transfer
of part of the undertaking of the Vendor for the purpose of the
Transfer Regulations.
13.2 The Vendor and the Purchaser acknowledge that such of the Employees
who remain employees of the Vendor at Completion (and who do not
inform the Vendor or Purchaser in writing that they object to
transferring their employment) will become employees of the
Purchaser at Completion and the Vendor will use all reasonable
efforts to assist in the transfer of the Employees to the employment
of the Purchaser.
13.3 The Vendor and the Purchaser shall comply with their respective
obligations under the Transfer Regulations which, in the case of the
Vendor, shall include informing and consulting with appropriate
representatives (within the meaning of the Transfer Regulations) of
the Employees. Immediately following Completion, the Purchaser
shall communicate to each of the Employees a notice informing those
Employees who have transferred to the Purchaser of the identity of
their employer.
13.4 The Vendor shall be liable for and shall fully effectively and
promptly indemnify and keep indemnified the Purchaser in respect of
all or any redundancy payments,
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compensation (including compensation for unfair dismissal and
compensation awarded in accordance with regulation 11 of the
Transfer Regulations), damages (including wrongful dismissal
damages or payments in lieu of notice), costs, actions, awards
(including awards made pursuant to section 189 of the Trade Union
and Labour Relations (Consolidation) Act 1992), penalties, fines,
demands, claims, or expenses of whatsoever nature ("Liabilities")
which may be incurred by the Purchaser directly as a result of
anything done or omitted to have been done before or at Completion
by or in relation to the Vendor in respect of any employees
(including the Employees) or ex-employees of the Vendor or any of
their contracts of employment or any collective agreement relating
to such employees or ex-employees of the Vendor which become
Liabilities of the Purchaser by virtue of regulation 5(2) or
regulation 6 of the Transfer Regulations
13.5 In the event of the Purchaser becoming aware of any claim which
would give rise to a liability under Clause 13.4 the Purchaser shall
give notice therefor to the Vendor and as regards any such claim the
Purchaser shall at the request of the Vendor take such action as the
Vendor may reasonably request to avoid, dispute, resist, appeal,
compromise or defend the claim and any adjudication in respect
thereof but subject to the Purchaser being indemnified and secured
to its reasonable satisfaction by the Vendor against any liability
and all costs damages or expenses incurred by the Purchaser.
13.6 If any contract of employment other than a contract of employment of
one of the Employees has effect after Completion as if originally
made between the Purchaser and any employee as a result of
regulation 5 of the Transfer Regulations, then:
13.6.1 in consultation with the Purchaser, the Vendor may within 7 days of
being so requested by the Purchaser make to each such employee an
offer in writing to employ that employee under a new contract of
employment on terms and conditions which will not differ from the
corresponding provisions (other than location) of the terms and
conditions enjoyed by such employee immediately prior to Completion
such new contract of employment to take effect on the termination
referred to below;
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13.6.2 upon the offer referred to in Clause 13.6.1 (or at any time after
the expiry of the 7 days if the offer is not made as requested) the
Purchaser may terminate the employment of the person concerned
forthwith; and
13.6.3 the Vendor shall indemnify the Purchaser against any Liabilities
arising out of such termination and against any sums payable to or
in respect of that employee in respect of his employment following
Completion.
13.6.4 In the event that any individual (whether or not an Employee)
brings a claim against the Vendor or the Purchaser arising out of or
in connection with the transfer or termination of that individual's
employment, the Vendor and the Purchaser shall give to each other,
as soon as reasonably practicable after any request therefor, all
information documents and assistance which may reasonably be
relevant to such claim and shall render to each other such
assistance and co-operation as either might reasonably require in
contesting, settling or dealing with any such claim. Compliance by
the Vendor or the Purchaser with the terms of this Clause 13.6 shall
be at the Vendor's expense.
14 INDEMNITIES AND APPORTIONMENTS
14.1 The Vendor shall discharge all its pre-Completion obligations,
responsibilities and liabilities strictly in accordance with the
terms thereof and shall indemnify and keep indemnified the Purchaser
from and against all debts, liabilities, obligations, actions,
losses, costs, damages, proceedings, claims and demands of whatever
nature relating to the Business or the Assets as at the Completion
Date including, without limitation, all and any liability arising
from any product warranty and product liability and the liabilities
referred to in Clause 4.
14.2 The Purchaser shall indemnify and keep indemnified the Vendor
from and against all debts, liabilities, obligations, actions,
losses, costs, damages, proceedings, claims and demands of
whatsoever nature relating to the Business or the Assets which are
attributable to the period following Completion or relating to the
non performance or defective or negligent performance of any of the
Contracts following the Completion Date provided that such indemnity
shall only apply if and to the extent that the Vendor has fully
disclosed the terms of all Contracts in
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the Disclosure Letter and the Purchaser shall not be liable to
indemnify the Vendor in respect of any claim relating to any work
in progress acquired by the Purchaser to the extent that such
claim relates to the action or omission of the Vendor prior to
Completion in respect of such work in progress.
14.3 All rents, rates, gas, water, electricity and telephone charges and
other outgoings of a periodical nature relating to or payable in
respect of the Business up to the Completion Date shall be borne by
the Vendor and as from the Completion Date shall be borne by the
Purchaser and all rents, royalties and other periodical payments
receivable in respect of the Business up to that time shall belong
to and be payable to the Vendor and as from the Completion Date
shall belong to and be payable to the Purchaser. Such outgoings and
payments receivable shall if necessary be apportioned accordingly,
provided that any such outgoings or payments receivable which are
referable to the extent of the use of any property or right shall be
apportioned according to the extent of such use.
14.4 Where any amounts fall to be apportioned under this Agreement, the
Vendor shall provide the Purchaser on Completion with full details
of the apportionments, together with supporting vouchers or similar
documentation, and in the absence of dispute the appropriate payment
shall be made by or to the Vendor forthwith. If the amount of any
apportionment is in dispute, the matter shall be referred to the
Expert (acting as experts and not arbitrators) for resolution in
accordance with the instructions set out in the letter being in the
Agreed Form marked "D3" and any amount determined by the said Expert
shall be paid within 14 Business Days of the determination, together
with interest calculated on a daily basis from the Completion Date
until the date of actual payment, at the rate of 2 per cent per
annum above the base rate from time to time of Barclays Bank Plc.
14.5 Without prejudice to the provisions of Clause 14.1, if
following the Completion Date either the Vendor or the Purchaser (as
the case may be) is notified of any claim for the repair or
replacement of, or for reimbursement of the price of, defective
goods sold by the Vendor before the Completion Date, then the party
receiving notification shall promptly provide the other party with
full details of any such claim. Where such claim may be made
directly against the manufacturer of the goods in question, the
Purchaser shall pursue (at the cost of the Vendor) such
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claim against such manufacturer on behalf of the Vendor. In the
event that such claim is disputed by such manufacturer, the
Purchaser shall then consult fully with the Vendor and the
Purchaser and the Vendor shall endeavour to agree how the claim
should best be dealt with. Where such claim appears reasonably to
be primarily attributable to any action, error or omission by or on
behalf of the Vendor and whether such claim is notified directly to
the Purchaser or to the Vendor, the Purchaser shall, after
reasonable consultation with the Vendor and to enable the Purchaser
to maintain the Goodwill of the Business satisfy such claim
including by means of repair, replacement or reimbursement and the
Vendor shall in any such case reimburse to the Purchaser on demand
the actual cost or expense incurred by the Purchaser including,
factory, labour and overhead costs of <pound-sterling>20 per hour
and engineering labour and overhead costs of <pound-sterling>14 per
hour.
14.6 The Purchaser shall notify the Vendor in writing of all
Environmental Claims made or asserted against the Purchaser.
Notification shall be made as soon as practicable after receipt of
any Environmental Claim and shall be accompanied by such further
correspondence and documentation relating to the circumstances
giving rise to the notice or claim as is in the possession of the
Purchaser and in any event no claim shall be capable of being made
against the Vendor under this Clause unless written notice thereof
shall have been given to the Vendor.
14.6.1 The Vendor shall have the conduct of all Environmental Claims
notified to it and shall be entitled to conduct, negotiate, settle
or resolve any Environmental Claim at its sole discretion and the
Purchaser shall permit the Vendor to conduct any Environmental Claim
in its name and shall render such assistance in the
proceedings as the Vendor shall reasonably require.
14.6.2 Where (in the Purchaser's opinion) the likelihood of an
Environmental Claim has been intimated or otherwise established
by the Purchaser but no Environmental Claim has yet been
made the Purchaser shall notify the Vendor of the intimation or
the circumstances which make it consider an Environmental Claim
likely and consult with the Vendor and take into account the
Vendor's reasonable directions with a view to preventing or
mitigating the Environmental Claim.
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14.6.3 The Vendor shall not be required to pay the Purchaser any amount in
respect of Environmental Claims to the extent that such claims
result from the Purchaser soliciting or procuring (unless required
to do so under any Environmental Law or the terms of any applicable
Environmental Consent) any investigation by any competent authority
which may encourage or assist the formulation or the bringing of
such claims.
14.7 The Vendor shall:-
14.7.1 conduct Environmental Claims pursuant to Clause 14.6 at its cost
and shall be liable for all costs, expenses and liabilities arising
from any Environmental Claim;
14.7.2 if previously approved by the Vendor (such approval not to be
unreasonably withheld or delayed) pay the Purchaser's reasonable
costs properly incurred pursuant to any Environmental Claim;
14.7.3 indemnify and keep indemnified the Purchaser against any costs,
expenses and liabilities incurred by the Purchaser pursuant to an
Environmental Claim;
14.7.4 undertake or procure the undertaking of any Remedial Action arising
from an Environmental Claim at its cost;
14.8 The Purchaser shall permit the Vendor, its servants, agents and/or
contractors together with plant and machinery to enter and remain
upon the Property for purposes pursuant to Clauses 14.6 and 14.7
provided always that the Vendor shall indemnify and keep indemnified
the Purchaser from and against all liabilities, obligations,
actions, losses, costs, damages, proceedings, claims of any nature
whatsoever arising from the presence of the Vendor, its servants,
agents and/or contractors together with its plant and machinery on
the Property.
14.9 In connection with the commencement and carrying out of any Remedial
Action, the Vendor shall consult with and obtain the consent of the
Purchaser (which may not be unreasonably withheld or delayed) and
shall make good any damage arising from the Remedial Action as soon
as practicable.
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15 BOOKS OF ACCOUNT
The Books of Account and the statutory books of the Vendor are
excluded from the sale of assets referred to in this Agreement,
provided that the Vendor undertakes to preserve the same for a
period of six years following Completion and should the Purchaser
reasonably and legitimately require information in relation to VAT
and other tax matters to afford the Purchaser reasonable access to
the Books of Account and at the Purchaser's expense to take copies
thereof.
16 COVENANTS
16.1 EIS hereby covenants with the Purchaser that EIS will not and that
it will procure that no other Covenantor will without the prior
consent in writing of the Purchaser either on its own account or in
conjunction with or on behalf of or through any other person or
persons, directly or indirectly:
16.1.1 for a period of two years commencing on the Completion Date carry
on or be engaged, concerned or interested in or assist in carrying
on any business which is competitive with the Business or any part
thereof in any territory in which the Business is carried on at the
Completion Date provided that nothing herein contained shall prevent
any member of the EIS Group from being the holder of or being
beneficially interested in any class of securities listed or dealt
in on the London Stock Exchange or the Alternative Investment Market
of the London Stock Exchange of not more than five per cent. of any
single class of the securities in that company;
16.1.2 for a period of one year commencing on the Completion Date engage,
employ, solicit or contact with a view to the engagement or
employment any of the Employees nor shall it knowingly employ or
aid or assist in or procure the employment by any other person,
firm or company of any such person (whether or not such person
would commit a breach of his contract of employment by reason of
leaving service).
16.1.3 for a period of two years commencing on the Completion Date
canvass, solicit, approach or entice away or cause to be canvassed,
solicited, approached or enticed
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away from the Business any person, who has at any time during
the period of two years preceding the Completion Date, been a
customer or client of the Business;
16.1.4 at any time following Completion use for any purpose the names
"Francis Shaw Rubber Machinery" and "PRC" (whether alone or in
conjunction with other names) or any name similar to those names or
likely to be confused with them.
16.2 EIS hereby acknowledges and agrees that the restrictions contained
in Clause 16.1 are separate, severable and enforceable and having
taken independent legal advice acknowledges that the restrictions
contained herein are in the context of this Agreement fair and
reasonable and necessary for the proper protection of the legitimate
interests of the Purchaser. In the event that nevertheless any such
restrictions shall be held to be illegal or unenforceable or void or
prohibited by the Treaty establishing the European Economic
Community but would be adjudged to be valid and effective if some
part or parts thereof were deleted or the period or the range of
activities or area of application reduced such restrictions shall
apply with such modification as may be necessary to make them valid
and effective.
16.3 No provisions of this Agreement (or any modification, amendment or
variation to any of the same) by virtue of which this Agreement is
subject to registration under the Restrictive Trade Practices Act
1976 shall take effect until the day after the day on which
particulars of this Agreement are furnished to the Director General
of Fair Trading ("the Director") for registration under the said
Act and a copy of the Office of Fair Trading's acknowledgement of
receipt of such particulars shall be conclusive evidence that such
particulars shall have been received by the Director on the day
indicated by such acknowledgement.
16.4 For a period of two years commencing on the Completion Date EIS
shall not and shall procure that no other Covenantor shall
deliberately do or omit to do anything which shall damage the
Goodwill of the Business and shall at all times act in such a manner
as to preserve such Goodwill.
16.5 None of the restrictions contained in this Clause 16 shall prevent
any member of the EIS Group from completing the Retained Contracts
or from continuing to carry
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on the Retained Businesses nor shall such restrictions prevent
Barwell Inc. fromcontinuing to market the FSRM Business range of
rubber extruders.
17 INSURANCES
17.1 All insurance cover in respect of the Business and Assets (save for
export credit insurance in relation to certain of the Contracts as
set out in Schedule 4) will cease with effect from Completion and
the Purchaser shall be solely responsible for insuring the Assets
and the Business (and any new contracts) with effect from
Completion.
17.2 The Vendor undertakes to the Purchaser following the Completion Date
to maintain the Policy in full force and effect for the insured
Contracts and to add the name of the Purchaser as joint insured
against each of the insured Contracts in order that the Purchaser
shall have the full benefit of the Policy after the Completion Date.
17.3 The Purchaser shall provide a Letter of Subscription to Trade
Indemnity plc in the Agreed Form marked "L" on Completion and the
Purchaser shall as soon as practicable advise the Vendor in writing
of any circumstance, act or default which may give rise to any
actual or potential claim under the Policy or which may render the
Policy void in whole or in part in respect of any of the insured
Contracts.
17.4 In the event that the Purchaser notifies the Vendor of any actual or
potential claim in accordance with Clause 17.3, the Vendor shall:
17.4.1 with the fill co-operation of and in accordance with the
reasonable directions of the Purchaser, diligently make and pursue
such claim with the insurer in accordance with the terms of the
Policy;
17.4.2 not make any admission of liability, agreement or compromise
with any person, body or authority in relation to such claim without
the prior written consent of the Purchaser (such consent not to be
unreasonably withheld or delayed); and
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17.4.3 forthwith pass to the Purchaser all payments received from the
insurer in respect of such claim
18 PENSION PROVISIONS
The provisions of Schedule 10 shall have effect.
19 PROPERTY PROVISIONS
The provisions of Schedule 9 shall have effect.
20 GUARANTEES
20.1.1 In consideration of the Purchaser entering into this Agreement EIS
hereby unconditionally and irrevocably guarantees to the Purchaser
as principal obligor and as a continuing guarantee the due and
punctual performance by the Vendor of all its obligations under this
Agreement and irrevocably and unconditionally undertakes with the
Purchaser that if the Vendor shall fail in any respect to fulfill
any of such obligations to indemnify and keep indemnified the
Purchaser against all losses, damages, costs and expenses of
whatsoever nature (including reasonable legal and other professional
fees) which may be suffered or incurred by the Purchaser by reason
of any default or delay on the part of the Vendor in the performance
of the said obligations.
20.1.2 EIS' guarantee hereunder and the Purchaser's rights under it shall
not be affected or prejudiced by the Purchaser varying, releasing,
omitting or neglecting to enforce the terms of this Agreement or by
any other fact or circumstances and whether known to the Purchaser
or not shall nevertheless be recoverable from EIS as principal
debtor.
20.1.3 EIS hereby irrevocably waives any right to require that the
Purchaser first proceeds against or claims payment from the Vendor
or any other person before claiming under this Clause.
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20.1.4 The obligations of EIS under this Clause shall continue
notwithstanding Completion and the provisions of this Clause shall
remain in force until all the obligations of the Vendor hereby
guaranteed have been discharged in full.
20.2.1 In consideration of the Vendor entering into this Agreement Farrel
hereby unconditionally and irrevocably guarantees to the Vendor as
principal obligor and as a continuing guarantee the due and punctual
performance by the Purchaser of all its obligations under this
Agreement and irrevocably and unconditionally undertakes with the
Vendor that if the Purchaser shall fail in any respect to fulfil any
of such obligations to indemnify and keep indemnified the Vendor
against all losses, damages, costs and expenses of whatsoever nature
(including reasonable legal and other professional fees) which may
be suffered or incurred by the Vendor by reason of any default or
delay on the part of the Purchaser in the performance of the said
obligations.
20.2.2 Farrel's guarantee hereunder and the Vendor's rights under it shall
not be affected or prejudiced by the Vendor varying, releasing,
omitting or neglecting to enforce the terms of this Agreement or by
any other fact or circumstances and whether known to the Vendor or
not shall nevertheless be recoverable from Farrel as principal
debtor.
20.2.3 Farrel hereby irrevocably waives any right to require that the
Vendor first proceeds against or claims payment from the Purchaser
or any other person before claiming under this Clause.
20.2.4 The obligations of Farrel under this Clause shall continue
notwithstanding Completion and the provisions of this Clause shall
remain in force until all the obligations of the Purchaser hereby
guaranteed have been discharged in full.
21 POST COMPLETION OBLIGATIONS
21.1 Following Completion the Purchaser hereby undertakes to:-
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21.1.1 supply (or procure to be supplied) to the Vendor rubber
extruders for cable producing machinery applications for use by the
Retained Businesses at such prices and upon such terms as are agreed
between the Parties;
21.1.2 provide (or procure to be supplied) engineering personnel for
installing and commissioning machinery and equipment pursuant to the
Installation Obligations as detailed in Schedule 7;
21.1.3 if so requested by the Vendor, complete any outstanding work to be
carried out in relation to the Retained Contracts, such work to be
charged at cost on materials together with factory labour and
overhead costs of <pound-sterling>20 per hour and engineering labour
and overhead costs of<pound-sterling>14 per hour;
21.1.4 give to the Vendor all reasonable assistance and to use all
reasonable endeavours to enable the Vendor to collect the Book Debts
and other debts in respect of the Business due to the Vendor at the
Completion Date (which for the avoidance of doubt are excluded from
the sale and purchase hereby affected pursuant to Clause 4) provided
always that the Vendor shall not institute or threaten any legal
proceedings or to take any step not at present part of the normal
routine of the Vendor to take in the collection of debts for a
period of 14 Business Days without having first given the Purchaser
an opportunity to make representations to the Vendor regarding such
action. The Vendor shall take reasonable account of such
representations, having regard to the Goodwill, provided that if
following such representations the Vendor confirms its intention to
continue with such action the Purchaser shall first be given an
opportunity to purchase such debts from the Vendor at their full
value. If the Purchaser fails to notify the Vendor of its intention
to purchase the debts within 2 Business Days, the Vendor alone shall
thereafter be responsible for the collection of any of the debts and
the Purchaser will be under no further obligations or liability in
respect thereof; and
21.1.5 give to the Vendor all reasonable assistance and to use all
reasonable endeavours to enable the Vendor to obtain a release from
any outstanding bank guarantees (including the return of the
original copies of any such guarantees) given on behalf of the
Vendor to third parties including, without limitation, to customers
and suppliers.
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21.2 Following Completion the Vendor undertakes to:-
21.2.1 procure that Yiorgos Palierakis is and continues to be engaged by
the EIS Group at the expense of the EIS Group and will procure that
he will support the Purchaser (if required by the Purchaser) for a
total of 20 Business Days in ensuring the transfer of the Computer
System to the Purchaser;
21.2.2 forward to the Purchaser without delay any enquiries (written or
verbal) relating to the Business received by it at any time in the
four years after Completion.
22 GENERAL PROVISIONS
22.1 COSTS
Subject to the provisions of Clauses 2.3 and 10.4 each of the
Parties shall pay its own costs of and incidental to the
negotiation, preparation and completion of this Agreement.
22.2 ANNOUNCEMENTS
22.2.1 Subject to Clause 22.2.2, neither the Vendor nor the Purchaser
shall publish any announcement or circular or release any other
public document or make any public statement in connection with the
subject matter of this Agreement or otherwise disclose the
provisions of this Agreement to any person without the prior written
approval of the other.
22.2.2 The provisions of 22.2.1 shall not apply to any announcement
relating to or arising out of this Agreement which is required to be
made by any applicable law or regulation in which event the Parties
shall consult with one another in relation to any proposed
announcement to be made in connection with this Agreement.
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22.3 VARIATION
No modification, variation or amendment of this Agreement shall be
effective unless such modification, variation or amendment is in
writing and has been signed by or on behalf of all the Parties. For
the avoidance of doubt, this Agreement supersedes the heads of
agreement signed on behalf of the Vendor and the Purchaser on 19
September 1997.
22.4 USE OF BRAND NAMES
The Purchaser shall be entitled to use the brand name "Francis Shaw
Rubber Machinery" in connection with the operation of the Business
for a period of 16 months following Completion provided that
(subject to Clause 16.1.4) the Vendor shall be entitled to use the
brand name "Francis Shaw" in connection with the operation of the
Retained Businesses.
22.5 WAIVER
No waiver by any Party of any breach or defau1t under this Agreement
or any of the terms hereof shall be effective unless such waiver is
in writing and has been signed by the Party or Parties against which
it is asserted. No waiver of any breach or defect shall constitute a
waiver of any other or subsequent breach or default. Completion
shall not constitute a waiver of any breach of this Agreement
whether or not known at the date of Completion.
22.6 RESCISSION
Save as expressly provided in this Agreement:
22.6.1 the Purchaser (for itself and as agent and trustee for and on
behalf of its directors, officers, employees, agents and advisers)
irrevocably and unconditionally waives any right it may have to
claim damages and/or to rescind this Agreement in respect
of any false or misleading statement (other than a statement made
fraudulently) made to it or any of its directors, officers,
employees, agents and advisers and
44
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upon which it relied in entering into this Agreement but which
is not expressly set out in this Agreement or in the Disclosure
Letter.
22.6.2 no breach of this Agreement shall in any event give rise to a right
on the part of the Purchaser to rescind or terminate this Agreement.
22.7 ASSIGNMENT
22.7.1 The Purchaser shall be entitled to assign the benefit of its rights
under this Agreement to any of its UK subsidiaries or to Farrel.
22.7.2 Subject to Clause 22.7.1, neither Party shall be entitled to assign
the benefit of this Agreement or any part of it to any other person.
22.8 FURTHER ASSURANCE
At any time after Completion the Vendor shall, (and shall procure
that any necessary third party shall) at the request and (save as
otherwise provided herein) cost of the Purchaser, execute such
documents and do such acts and things as the Purchaser may
reasonably require to carry out the terms of this Agreement and to
effectively vest in the Purchaser beneficial ownership of the
property, assets and goodwill hereby agreed to be sold and to give
the Purchaser the full benefit of all the provisions of this
Agreement.
22.9 INVALIDITY
If any of the provisions of this Agreement shall be held to be
invalid, illegal or unenforceable (in whole or in part) such
provision or part shall to that extent be deemed not to form part of
this Agreement but the remainder of this Agreement shall continue in
full force and effect.
22.10 COUNTERPARTS
This Agreement may be entered into in any number of counterparts
and by the Parties to it as separate counterparts, each of which
when so executed and
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delivered shall be an original, but all the counterparts shall
together constitute one and the same agreement.
22.11 GOVERNING LAW AND JURISDICTION
This Agreement shall be governed by English law and the Parties
hereby submit to the exclusive jurisdiction of the English Courts.
22.12 NOTICES
Any notice required or authorised to be given under this Agreement
and any process to be served in relation to or arising out of this
Agreement ("Notice") shall be in writing and may be delivered
personally or sent by pre-paid first class recorded delivery post
(or air mail if overseas) addressed to the address of the relevant
party or parties as specified below (or to such other address as
that Party may from time to time notify to the other Parties hereto
for this purpose by Notice) or transmitted by facsimile transmission
in each case to the address marked below:
22.12.1 In The Case Of The Vendor:
Address: EIS Group PLC
6 Sloane Square London SWlW 8EE
Fax: 0171 730 2271
Attention: Mr C W Peachey
22.12.2 In The Case Of The Purchaser:
Address: Farrel Limited
P O Box 27
Queensway
Castleton
Rochdale OLl1 2PF
Fax: 01706642611
Fax: 001 203 736 2836
Attention: Rolf K. Liebergesell, Chairman
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with a copy to the Purchaser's Solicitors (Fax No: 0171 831 9607)
marked for the attention of Robert Sutton Ref: 546833).
22.13 Service Of Notices
Any Notice delivered personally shall be deemed to have been given
when delivered to the address specified in Clause 22.12, any Notice
sent by pre-paid first class recorded delivery post shall be deemed
to have been given by midday on the second Business Day after the
same shall have been posted (or fifth Business Day if air mail) and
in proving the giving of such Notice it shall be sufficient to prove
that the letter containing such Notice was properly addressed and
put into the post as a pre-paid first class recorded letter and any
Notice sent by facsimile transmission (subject to oral confirmation
of receipt of all transmitted pages) on the day it is transmitted.
Provided always that if a Notice which is delivered personally is
given on a day that is not a Business Day the relevant Notice shall
be deemed to be given on the Business Day next following that day
and provided further that if a Notice which is delivered personally
or transmitted by fax is given or transmitted outside the hours of
9.30am and 5.3Opm on a Business Day the relevant Notice shall be
deemed to be given at 9.30am on the Business Day next following
such Business Day.
23 1998 PROFITS
The provisions of Schedule 14 shall have effect.
24 DEDUCTIONS AND WITHHOLDINGS
All sums payable by the Vendor or EIS to the Purchaser under this
Agreement shall be paid free and clear of all deductions or
withholdings whatsoever, save only as may be required by law. If any
deductions or withholdings are required by law to be made from any
of the sums payable under this Agreement the Vendor or EIS shall be
obliged to pay to the Purchaser such sum as will, after the
deduction or withholding has been made, leave the Purchaser with
the same amount as it would
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have been entitled to receive in the absence of any such
requirement to make a deduction or withholding. For the avoidance
of doubt, any payment made by the Vendor or EIS to the Purchaser
in respect of any indemnity under this Agreement shall be treated
as a reduction in the Purchase Price.
AS WITNESS the hands of the parties hereto or their duly authorised
representatives the day and year first before written.
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SIGNED BY J.J. Hobbs )
for and on behalf of FRANCIS )
SHAW & COMPANY ) /s/ J.J. Hobbs
(MANCHESTER) LIMITED in the )
presence of: )
Witness: Signature: /s/ L. Jackson
----------------
Name: L.I. Jackson
Address: 150 Aldersgate Street
London, EC1A 4EJ
Occupation: Solicitor
SIGNED BY J.J. Hobbs )
for and on behalf of FRANCIS )
SHAW RUBBER MACHINERY LIMITED ) /s/ J.J. Hobbs
in the presence of: )
Witness: Signature: /s/ L. Jackson
----------------
Name: L.I. Jackson
Address: 150 Aldersgate Street
London, EC1A 4EJ
Occupation: Solicitor
102
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SIGNED BY J.J. Hobbs )
for and on behalf of PRC )
FABRICATIONS LIMITED ) /s/ J.J. Hobbs
in the presence of: )
Witness: Signature: /s/ L. Jackson
----------------
Name: L.I. Jackson
Address: 150 Aldersgate Street
London, EC1A 4EJ
Occupation: Solicitor
SIGNED BY CHARLES S. JONES )
for and on behalf of FARREL )
BRIDGE LIMITED ) /s/ Charles S. Jones
in the presence of: )
Witness: Signature: /s/ Sarah Atkinson
----------------
Name: Sarah Atkinson
Address: 10 Norwich Street
London, EC4A 1BD
Occupation: Solicitor
SIGNED BY J.J. Hobbs )
for and on behalf of EIS )
GROUP PLC ) /s/ J.J. Hobbs
in the presence of: )
Witness: Signature: /s/ L. Jackson
----------------
Name: L.I. Jackson
Address: 150 Aldersgate Street
London, EC1A 4EJ
Occupation: Solicitor
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SIGNED BY CHARLES S. JONES )
for and on behalf of )
FARREL LIMITED ) /s/ Charles S. Jones
in the presence of: )
Witness: Signature: /s/ Sarah Atkinson
----------------
Name: Sarah Atkinson
Address: 10 Norwich Street
London, EC4A 1BD
Occupation: Solicitor
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FARREL NEWS
----------------
FARREL CORPORATION FOR IMMEDIATE RELEASE
25 Main Street CONTACT: PETER L. HESS
Ansonia, CT 06401 TELEPHONE: (203) 736-5501
(203) 736-5500
FARREL ANNOUNCES ACQUISITION OF
FRANCIS SHAW RUBBER MACHINERY
ANSONIA, CONNECTICUT, December 19, 1997 - Farrel
Corporation announced that the acquisition of the
Francis Shaw rubber machinery business located in
Manchester, England was completed today. The new
subsidiary has been named Farrel Shaw Limited.
As previously announced, Farrel expects substantial
opportunities from this acquisition in its worldwide
rubber machinery business. The management believe the
acquisition will enhance profitability and order
backlog.
As a result of several large orders received in recent
days, including a US$6.7 million order for a plastic
pelletizing system, the current order book totals
US$56.3 million.
FARREL NEWS
FARREL CORPORATION
25 MAIN STREET
FOR
IMMEDIATE RELEASE
ANSONIA, CT 06401
CONTACT: PETER L. HESS
(203) 736-5500
TELEPHONE: (203) 736-5501
ANSONIA, Connecticut,
December 4, 1997:
Rolf K. Liebergesell, Chairman, President and Chief Executive Officer of
Farrel Corporation, today announced that Farrel has entered into a conditional
contract to acquire the Francis Shaw Rubber Machinery business located
in Manchester, England from the EIS Group plc. The purchase price and terms
were not disclosed.
Mr. Liebergesell, remarking on the transaction said "Francis Shaw produces
world-class rubber mixing and extrusion equipment, and this acquisition
represents our continuing commitment to serving fully the rubber products
industries world- wide together with our other products, Banbury( Mixers
and Twin Screw Sheeters and related equipment. Farrel now provides a full
line of alternative solutions for its customers.
"From Francis Shaw's performance and the terms of the acquisition, we expect
the acquisition to add significantly to profits for 1998. The addition of
approximately $10 million to our current backlog will improve our prospects
for 1998 as well.
"Importantly, Farrel adds engineering and technology expertise to the world's
finest polymer engineering firm.
"Ultimately, the Francis Shaw business will be merged into existing Farrel
facilities in Rochdale near Manchester, thus providing an opportunity
to further improve profitability. In due course, Farrel's worldwide
resources will assist in the marketing of these products," he said.
<PAGE>
Francis Shaw produces Intermix( internal mixers with intermeshing rotors,
extruders and related equipment principally for technical rubber goods
manufacturers, while Farrel's Banbury( internal mixers and related equipment
are largely designed for the world's tire manufacturers.
In addition to rubber mixers, Farrel supplies large-scale plastic
pelletizing systems to the petrochemical industry and process equipment
to compounders of plastic materials.
